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Stolen Fortnite accounts sold as part of $1 billion black market

Tens of thousands of Fortnite accounts are being sold online daily in a black market for stolen video-game accounts that generates $1 billion annually, according to a report from Night Lion Security, which helps companies identify vulnerabilities.

Criminals are using automated tools that can check 500 accounts a second to discover if login credentials stolen in various recent data breaches unlock any Fortnite accounts. Some Fortnite accounts have valuable skins—changing the appearance of a player’s avatar—and can sell for thousands of dollars, said Vinny Troia, who runs Night Lion. An average account sells for $200 to $250, he said.

“They can’t keep up with demand for certain accounts,” Mr. Troia said. “They resell it to people wanting to play the game with that account. Maybe somebody just doesn’t want to spend 100 hours of effort to get there.”

Fortnite, a cartoonish fight-to-the-death battle royale where players thrash one another in a struggle for weapons and resources, has grown into a worldwide phenomenon since its launch in 2017. It has more than 350 million registered players.

Account takeovers are a common problem among both social-networking and gaming sites. But gaming accounts can be more valuable, due to the virtual items they hold.

While Fortnite’s developer, Epic Games Inc., prohibits sale of accounts, some users do so in violation of policy—and some then ask the company to recover them.

Epic uses technology such as captcha, IP reputation and machine learning to “identify threats in seconds,” the company said. “Epic Games takes a sophisticated layered approach to protect our players,” it said. The company will “proactively block login attempts and automatically take action to secure any compromised accounts we identify,” according to a statement.

For its report, Night Lion talked with illegal distributors and stores that sell game accounts. Distributors market batches of thousands of accounts on services like Telegram and Discord. Owners of shady websites buy them, allowing consumers to simply find them by Googling “Fortnite accounts for sale.” One seller hawks $20,000 worth of Fortnite accounts a day, Mr. Troia said.

Hacked accounts from competing games like Roblox, Microsoft Corp.’s Minecraft and Jagex’s RuneScape are popular as well, Mr. Troia said. The four games add up to about $700 million in hacked account sales a year, he estimated, while the rest of video games round off the figure to $1 billion.

“Roblox, RuneScape, and Minecraft are three games that appear even more profitable,” the report said.

All the games have received a major boost thanks to pandemic-related lockdowns in the spring. As more people are spending more times playing, purchases of hacked accounts have ballooned, Mr. Troia said.

“Because of COVID, the demand has gone way up, there’s a general supply issue,” Mr. Troia said.

Night Lion shared its report, listing some websites peddling game accounts, with the Federal Bureau of Investigation, Mr. Troia said. — Bloomberg

ByteDance chief reconsiders TikTok options after new China rules

As Donald Trump threatened to ban the US operations of the hit app TikTok, Chinese parent ByteDance Ltd.’s choices seemed to be limited to selling the business for $20 billion to $30 billion or leaving empty-handed.

But after China signaled it will get involved in any deal’s approval, ByteDance founder Zhang Yiming is reconsidering his options and weighing the implications of Beijing’s involvement, according to people familiar with the matter. The company’s regulatory team and deal negotiators are huddling to discuss whether it’s still possible to craft a sale that can win approval from both governments, an acquirer, venture investors and ByteDance itself, said one of the people, asking not to be named because the matter is private.

Microsoft Corp. and Oracle Corp. have been deep in negotiations to buy TikTok US, submitting proposals while seeking reassurances from Washington that the Trump administration would bless their purchases. Microsoft is working on its bid with Walmart Inc., while Oracle has won support from venture backers such as Sequoia Capital.

But Beijing’s last-minute entry into the process raises the odds that Zhang will hold on to the US operation beyond the stated American deadlines or even back out of a deal altogether. It’s likely the need for approval in Washington and Beijing—along with the already complex negotiations—will push any final deal beyond the November elections in the US in any case, a person familiar with the matter has said.

“I’m not sure price matters as much as pride,” said Rebecca Fannin, author of Tech Titans of China, and founder of Silicon Dragon Ventures. “From the start, Zhang wanted to build a global company. Without the US market, he can’t fulfill those ambitions. He’s a maverick, fiercely independent-minded entrepreneur. He may just decide not to do the deal at all.”

Talks are fluid and it’s still possible Zhang will proceed with a sale, the people said. He could also negotiate a deal with an acquirer, then not complete the transaction because of government demands.

The 37-year-old coder-by-training is something of a lone wolf in China’s tech industry, refusing to take money from rainmakers Tencent Holdings Ltd. or Alibaba Group Holding Ltd. He endured a succession of crackdowns yet managed to groom Douyin, TikTok’s Chinese cousin, into a rising Internet star in the country. A fighter by nature, Zhang has several reasons to resist a TikTok sale in the clash with Trump.

He and his company don’t need the money. Privately held ByteDance is already worth $140 billion, according to startup tracker CB Insights, and is said to have generated more than $3 billion of net profit on more than $17 billion of revenue in 2019. Investment bankers had begun pitching Zhang’s team on going public in China or Hong Kong, even amid growing scrutiny in the US

Local demand for initial public offerings from technology companies is white-hot, with first-time share sales likely to surpass the heights of the dot-com bubble. Zhang stands to make billions no matter what happens with Trump.

Just as important, if he sells the US business, he can never get it back. Zhang would be relinquishing control over an asset that boasts upwards of a 100 million users in the US and is on the cusp of monetizing that base. If TikTok gets banned in the US, the immediate outcome is it vanishes from Apple and Google app stores and software updates halt. Depending on how the US Commerce Dept. defines Trump’s executive order, the sanctions could also cut off TikTok’s access to the local cloud services vital to maintaining data and streaming service.

But industrious American teens can still side-load the app, working around domestic restrictions to get software from abroad. In the meantime, TikTok can keep operating in the rest of the world (apart from India, where it is already banned) and build up the business further. It also leaves open the possibility of re-entering the US if political dynamics change.

Separately, ByteDance is taking advantage of US courts to see if it can stall Trump’s ban. Come November, there could be a new administration in power that may not regard shuttering TikTok as a high priority, not when the US economy is reeling and Washington battles Beijing on a number of other geopolitical fronts from the South China Sea to trade and Taiwan.

“Zhang is betting on a court injunction to get the case past deadline and hopefully even past the Trump presidency,” said Xiaomeng Lu, a senior analyst, geo-technology for the Eurasia Group. “His last hope is that the US legal system still functions as a guard rail when the white house malfunctions.”

Beijing’s involvement could end up benefiting Zhang. China’s assertion that its regulators will weigh in on any TikTok asset sale could give Zhang a possible out, said Ding Chenling, a tech entrepreneur who said he has known the ByteDance founder for a half-decade. It could take up to 30 days for Beijing to greenlight ByteDance’s application to sell tech to a foreign acquirer, which means it may well pass Trump’s target for banning TikTok.

“He thought that by making a promise to follow international standards or rules he would be able to escape the regulation or the kind of pressure from the American government,” said Ding. “But I think now he realizes he might have been wrong and that if he doesn’t want to sell the company, the only one who can help him is the Chinese government—which is what he’s tried to avoid the past few years.” — Bloomberg

Malaysia to bar long-term pass holders from India, Indonesia, Philippines

KUALA LUMPUR — Malaysia on Tuesday said it would bar entry of long-term immigration pass holders from India, Indonesia, and the Philippines from Sept. 7, in a bid to curtail imported coronavirus cases amid a spate of new clusters in the country.

Health authorities in Southeast Asia’s third-largest economy have recorded over 9,300 cases as of Tuesday, and 128 deaths, with new cases found in clusters detected in at least four states.

The entry ban on pass holders from the three countries will include permanent residents, expatriates, students, and those on spouse visas and participants of Malaysia’s My Second Home program, senior minister Ismail Sabri Yaakob said.

“The decision was made on the advice of the health ministry to clamp down on the spread of imported COVID-19 cases,” Ismail Sabri said in a televised news conference.

India is the third most affected country by the pandemic behind the United States and Brazil, with its coronavirus tally reaching nearly 3.7 million on Tuesday.

A total of 7,505 people have died of the coronavirus in Indonesia, the highest in the region, while the Philippines, which has reported over 224,000 cases, has seen a continuous rise in infections. — Reuters

Facebook sends world a warning with threat to Australian news

Facebook Inc. has flashed a warning to global regulators by taking a hardball stance against Australia’s plan to force it to pay media companies for stories.

The Australian government has drafted legislation to force the US tech giant and Google to compensate publishers for the value their stories generate for the platforms. Facebook lobbed a grenade on Tuesday seeking to hollow out the proposed law. If it passes, the company will block Australians and publishers from sharing news on Facebook and Instagram, an unprecedented step.

The scene is now set for an acrimonious battle after the Australian government said it won’t buckle to “coercion or heavy-handed threats.” The standoff has turned one of Facebook’s most distant markets, with a population of 25 million, into a test case as watchdogs around the world turn their own power against digital behemoths.

“This is a microcosm for other markets and what may happen as Facebook defends its turf,” said Dan Ives, an analyst at Wedbush Securities in New York. The company has come out “throwing punches,” he said.

Traditional media companies have long complained their content is being exploited by digital platforms without due compensation. The Australian government has said it’s trying to level the playing field as once-dominant publishers lose advertising revenue to Google and Facebook. In May, for example, Rupert Murdoch’s News Corp. announced plans to cut jobs and close or stop printing more than 100 local and regional newspapers in Australia.

The draft Australian law, which needs approval in parliament, calls for an arbitration panel to decide how much Facebook and Alphabet Inc.’s Google must pay publishers if the two sides can’t agree.

‘LINE IN THE SAND’

By pushing back in Australia, Facebook is telling other European regulators what to expect in disputes over the platform’s use of news, said Rob Nicholls, an associate professor at the business school of the University of New South Wales in Sydney. At the very least, Facebook wants to force a change in the legislation, or even delay its introduction, he said.

“If you draw a line in the sand here, you’ve effectively provided that benchmark for negotiations,” Mr. Nicholls said.

The chairman of Australia’s competition watchdog, Rod Sims, said in an interview in July that he knows of several counterparts overseas who are considering taking similar steps to Australia’s. Facebook’s explosive intervention follows recent gains by publishers in Europe against digital platforms.

GETTING THE NEWS

In April, France’s antitrust regulator ordered Google to pay media companies to display snippets of articles. Last October, Facebook introduced a separate news section, paying some publishers whose stories are featured. Last week, the company said it plans to expand the news section to other markets globally.

Facebook said in a blog post Monday that Australia’s legislation is based on the flawed assumption that it benefits most from its relationship with publishers. “The reverse is true,” Facebook said. Google also opposes the law, saying in an open letter it would “put the free services you use at risk in Australia.”

Nine Entertainment Co., publisher of the Sydney Morning Herald, called Facebook’s response to the proposed law “strange.”

“It is a demonstration of Facebook’s use of its monopoly power while failing to recognize the importance of reliable news content to balance the fake news that proliferates on their platform,” Nine said in a statement.

A spokesman for News Corp. in Sydney declined to comment. — Bloomberg

COVID-19 antibodies present in patients four months after recovery — study

Antibody levels against the novel coronavirus rose and then held steady for up to four months in more than 90% of recovered COVID-19 patients in Iceland, according to a study published on Tuesday.

In previous studies, antibody levels dropped sharply within a few months after COVID-19, raising questions about the duration of immunity that infection may provide.

The new finding may have implications for reinfection risks and vaccine durability, said Kari Stefansson, chief executive of deCode Genetics, which conducted the study.

To get a sense of how many people in Iceland had been infected with the new coronavirus and learn more about immune status after recovery, researchers measured antibody levels in more than 30,000 Icelanders.

Based on the results, they estimate that about 1% of the population had been infected. Of that group, 56% had received a confirmed diagnosis after a gold-standard polymerase chain reaction (PCR) laboratory test. Another 14% had not been formally diagnosed but had quarantined after exposure to the virus. In the remaining 30%, the antibody tests led to discovery of prior infection.

Among the 1,215 people with an infection confirmed by PCR, 91% had antibody levels that rose during the first two months after diagnosis and then plateaued, researchers reported.

The results, published in The New England Journal of Medicine, focused on a homogeneous population from a single country, so the findings may not be the same in other parts of the world with diverse populations.

Still, the study shows how careful antibody tests can determine the true prevalence of infection, Mr. Stefansson said.

An editorial that accompanied the study cautioned that it is unclear if recovered patients’ antibodies will protect them from reinfection.

However, it suggested that antibody tests may be a cost-effective alternative to infection testing alone, and may work better in surveying populations as countries look to safely reopen their economies and schools. — Reuters

Factory activity drops to 3-month low

THE Philippine capital’s return to a stricter lockdown in the first two weeks of August dampened manufacturing activity, which fell to a three-month low, IHS Markit said on Tuesday.

The IHS Markit Philippines Manufacturing Purchasing Managers’ Index (PMI) slid to 47.3 last month from 48.4 in July, remaining below the 50-mark threshold that separates growth from contraction. August was the sixth straight month of declining factory output,

“The Philippines manufacturing sector headed into a steeper downturn in August as quarantine measures in a number of provinces were tightened. New orders fell sharply, as the latest PMI survey data indicated a second consecutive drop in production,” the statement read.

Manufacturing purchasing managers’ index of select ASEAN economies, August (2020)

Metro Manila and the provinces of Cavite, Laguna, Rizal and Bulacan reverted to modified enhanced community quarantine (MECQ) from Aug. 2 to 18, in an effort to curb the rise in coronavirus infections. Laguna, Cavite and Rizal are part of the key industrial region of Calabarzon.

The headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).

The Philippines posted the second lowest PMI reading among six ASEAN countries, worse than the regional average of 49. Myanmar and Indonesia both saw factory output expand in August, with PMI readings of 53.2 and 50.8, respectively.

IHS Markit cited the contraction in output levels for a second straight month, and the continued decline in new orders since March when the coronavirus pandemic escalated.

The re-imposition of the MECQ negatively impacted demand in August, as some businesses had to cut operating capacity.

“New work inflows contracted sharply as movement was restricted, while some sectors were forced to operate at reduced capacity. The fall in new orders was the fastest seen in three months. Export sales also declined, but only at a modest rate as global COVID-19 restrictions were generally relaxed,” IHS Markit said.

The August drop in manufacturing production was faster than July’s, but softer than the contraction seen from March to May when most parts of the country were under a strict lockdown.

Employment dropped to its slowest pace in three months, but IHS Markit said job losses were still noticeable.

“Job losses remained apparent as firms continued to trim capacity at a steep rate to adapt to the new economic environment. Stocks were also reduced, extending the run of depletion to six months,” David Owen, an economist at IHS Markit, was quoted as saying.

IHS Markit noted the lengthening delivery times at manufacturing companies, which started in August 2019. The quarantine restrictions made it harder for companies to procure raw materials in time, it added.

Input prices climbed at the quickest pace since February 2019, as  suppliers reported shortages and costs of imported goods rose.

This resulted in some factories increasing output charges to pass the higher costs onto consumers, but only at a “modest” uptick as businesses continue to offer discounts to boost sales.

“The outlook for the manufacturing sector remained subdued in August and was broadly in line with that seen in July. More businesses predict that output will improve in the year ahead than those expecting a decline, but confidence was much weaker than the series trend,” it said.

Mr. Owen said the sluggish business confidence may signal post-pandemic recovery remains uncertain.

Robert Dan J. Roces, chief economist at Security Bank Corp., said the decline in PMI was “relatively small” considering the MECQ lasted only two weeks. The National Capital Region remains under general community quarantine (GCQ) until Sept. 30.

“As we transition to GCQ, there’s a high chance that the PMI could bounce back near or above 50 to register a rebound while trade and production slowly improve,” Mr. Roces said via e-mail Tuesday.

Despite a broader recovery in emerging Asian economies, manufacturing activity in the Philippines dipped last month due to the tighter quarantine rules, said Capital Economics economist Alex Holmes.

“We suspect this (decline in PMI) will be short-lived for Vietnam, where the virus appears to already be back under control. But things are likely to take longer to recover in the Philippines,” Mr. Holmes said in a note on Tuesday, referring to Vietnam’s PMI of 45.7.

“Looking ahead, a slow recovery in external demand is likely to drive further small improvements in conditions for Asia’s export-orientated manufacturers. That said, it is still likely to be a long time before output consistently returns to pre-crisis levels,” he added.

The think tank Oxford Economics also has a dim outlook for the Philippine manufacturing sector.

“In our view, recovery prospects vary greatly across the region, with China, South Korea and Taiwan firmly in the lead, and India and Philippines trailing far behind in our forecasts,” Oxford Economics said in a note Tuesday. — B.M. Laforga

Manufacturing purchasing managers’ index of select ASEAN economies, Aug. (2020)

THE Philippine capital’s return to a stricter lockdown in the first two weeks of August dampened manufacturing activity, which fell to a three-month low, IHS Markit said on Tuesday. Read the full story.

Manufacturing purchasing managers’ index of select ASEAN economies, August (2020)

Philippines seeks $600-million loan for 4Ps program

THE Philippines is seeking a fresh $600-million (P29.1-billion) loan from the World Bank (WB) to extend its conditional cash grants to poor families amid the coronavirus disease 2019 (COVID-19) pandemic.

Documents from the World Bank showed the proposed Beneficiary FIRST Social Protection Project is expected to be approved on Sept. 15.

Proceeds of the loan will partially fund the proposed $10-billion (P485- billion) Pantawid Pamilyang Pilipino Program (4Ps) in the next five years.

The project aims to mitigate the impact of the pandemic on low-income families and boost the Department of Social Welfare and Development’s (DSWD) social protection delivery systems.

The bulk of the funds or $580 million (P28.1 billion) will support the cash handouts under the 4Ps.

“This combines financing support for the DSWD to mitigate the negative welfare impacts of the COVID-19 on 4Ps households with longer-term resources to enable DSWD’s efforts to prepare for future shocks,” the document read.

Of the $580 million, $300 million (P14.5 billion) will be used immediately to disburse cash grants for 4Ps beneficiaries as the pandemic continues.

“Rapid financing would be disbursed against the statement of expenses for cash grants paid to 4Ps beneficiaries during the first year of the project implementation, given the urgent needs for funds during the response phase of the COVID-19 pandemic,” it said.

Around $280 million (P13.6 billion) is expected to be disbursed from the second year onwards, although it will depend on the achievement of performance targets.

The remaining $20 million (P970 million) will be used to modernize the payment delivery system of the DSWD, the main implementing agency of the program, and help it establish its own grievance redress system for beneficiaries.

The project will also support DSWD’s medium-term digital transformation strategy, development of its information technology system for assessment of recipients, and improvement of its database of beneficiaries.

The World Bank said the contingent emergency response component (CERC) currently has no funding allocation but will allow funds to be reallocated when needed.

“The government can request the WB to urgently activate CERC and reallocate the undisbursed balance to support the implementation of the government’s emergency plan. Additional financing can also be mobilized to fully or partially replenish the funds reallocated to the CERC in accordance with the WB’s requirements,” it said.

As the project aims to mitigate the impact of the pandemic, the World Bank warned of social risks such as delays in services, increase in student drop-outs, rise in child labor, and higher malnutrition among children.

“The Pantawid program has contributed to overall poverty reduction in the country, and has proven its consistent and lasting impacts on health/educational outcomes of children from poor households, as evidenced in various studies,” it said.

Poverty rate has steadily declined to 16.6% in 2018 from 26.6% in 2006, while the unemployment rate went down to 5.1% in 2019 before it surged to 17.7% in April at the height of the lockdown.

“The slowdown of the economy due to COVID-19 is likely to reverse the substantial progress in poverty reduction. The extended quarantine period has adversely affected jobs, particularly among informal workers, which had been fueling growth in household incomes among lower income groups,” it said.

Since 2008, the World Bank has been providing financial and technical support to 4Ps, the country’s flagship safety net program where cash grants were given to poor families to ensure their children’s health and education.

The World Bank said last month it will lend $1.9 billion in fresh loans to the country in the remaining months of the year to help the economy get back on track. It said three loans worth $1 billion will be approved this month.

From April to early August, the bank has released $1.67 billion in loans to the Philippines — $500 million for the government’s COVID-19 response, $500 million for disaster risk management and $200 million for social protection in budgetary support; and $470 million in two project loans. — B.M. Laforga

More firms may follow SMC’s lead in seeking tax perks for airport projects

By Arjay L. Balinbin, Senior Reporter

THE proposed tax incentives for San Miguel Aerocity’s Bulacan airport project is prompting other groups to explore the possibility of securing similar perks for their own projects.

However, the Finance department is opposed to a House panel’s move to exempt the San Miguel Corp. (SMC) subsidiary from all taxes while building the airport, saying it does not want this to set a precedent.

Chelsea Logistics and Infrastructure Holdings Corp., which has an unsolicited proposal to modernize the Davao International Airport, may consider requesting the same incentives.

“If there will be such a thing, then chances are that we can also request (tax incentives),” Chelsea Logistics President and Chief Executive Officer Chryss Alfonsus V. Damuy said in a phone message.

The province of Cavite also wants to explore the same perks for its Sangley airport project with the consortium of MacroAsia Corp. and China Communications Construction Co. Ltd. (CCCC).

“We are studying all angles. Every project should be on equal footing,” Cavite Governor Juanito Victor “Jonvic” C. Remulla told BusinessWorld in a phone message on Aug. 28, adding he will discuss the matter with President Rodrigo R. Duterte.

The House Ways and Means Committee on Aug. 26 approved the tax provision of a bill granting a 50-year franchise for San Miguel Aerocity to build and operate the airport.

Under the measure, the SMC unit will be exempted from paying income taxes, value-added taxes (VAT), percentage taxes, excise taxes, documentary stamp taxes, customs duties and tariffs, taxes on real estate, buildings and personal property, business taxes, franchise taxes, and supervision fees.

After the end of the construction period, San Miguel Aerocity will continue to be exempt from income tax and taxes on real estate, buildings and property for the remainder of its franchise.

“We don’t want precedents, so we’re taking that position with the Bulacan project,” Finance Assistant Secretary Maria Teresa S. Habitan said in a phone message.

Ms. Habitan earlier said the Finance department is “not okay” with the proposed tax incentives for the Bulacan airport project, which is an unsolicited proposal, as “under the build-operate-transfer (BOT) law, the government must not provide subsidies or guarantees to proponents.”

Antonio A. Ligon, law and business professor at De La Salle University, said once Congress approves the Bulacan airport bill, similar projects will also seek the same tax treatment.

“While the power to tax belongs solely to Congress, tax exemptions must be strictly scrutinized and should not be granted easily to a private entity, especially if the project is not for charitable, educational, or religious purposes,” Mr. Ligon said in a phone interview.

‘HUGE GAP’ IN TAX REGIMES
Maria Lourdes P. Lim, tax managing partner at Isla Lipana & Co., PwC Philippines, said in a phone message there are some airport operators that are exempted from paying real property tax (RPT) such as Manila International Airport Authority (MIAA), Mactan-Cebu International Airport Authority (MCIAA), and Clark International Airport Corp. (CIAC), which also enjoys the 5% gross income tax (GIT) incentive.

The House bill for San Miguel Aerocity’s franchise “appears to have granted a much broader exemption,” Ms. Lim said.

“Under the House bill, revenues from the airport operations of San Miguel Aerocity will be entitled to much better incentives since it grants income tax exemption for the entire 50-year concession period as compared to the 5% GIT being enjoyed by CIAC and the mere RPT exemption for MIAA and MCIAA, both government agencies,” she said, noting that the bill also provides further exemption from all other taxes including VAT, local business tax and RPT.

Ms. Lim said further the “huge gap” in the tax regimes between San Miguel Aerocity and the other airport operators “may raise a concern under Article VI, Section 28 of the 1987 Constitution which mandates uniformity in taxation.”

She argued they all belong to “the same class and are similarly situated.”

“Perhaps the transcript of congressional deliberations may give guidance to confirm whether the legislators provided for substantial standards and for the legislative purpose for the different tax treatment,” Ms. Lim added.

However, House Ways and Means Committee Chairman Albay Rep. Jose Maria Clemente S. Salceda said these airport franchises are not “similarly situated” since MIAA, CIAC and MCIAA are government-owned-and-controlled corporations (GOCCs).

“In the case of the three GOCCs, we were going to do the project anyway, with or without the tax incentives. In the case of the Bulacan airport, the operator and developer of a publicly needed infrastructure project is a private enterprise. The incentives have some bearing on whether the project actually pushes through…. So, I think the idea of giving them a different set of tax incentives is justified. We can argue the limits of these incentives, however,” Mr. Salceda said.

“What is exceptional with the San Miguel Aerocity franchise is that although it is owned fully by the private sector, we will be gaining from its profits in excess of a 12% margin. We have not granted any recent franchise to a private enterprise that has a similar provision. So, that’s a win for the government,” he added.

The New Manila International Airport, Mr. Salceda said, will be a direct investment equivalent to 4% of the country’s gross domestic product.

“The indirect benefits, in the form of returns to government in excess of the 12% profit margin, massive job creation in Central Luzon and the surrounding regions, increased investment in the area, and the decongestion of our air transport system, are also extraordinary, from our viewpoint,” he added.

Pandemic forces retailers to innovate, adapt

TIGHT consumer spending, faster e-commerce growth and the need for fast and reliable delivery amid a coronavirus pandemic has forced Philippine retailers to adapt and innovate, according to consulting firm Bain & Company.

Philippine retailers should work on social commerce and digital marketing to take advantage of such radical changes or so-called digital disruptions, Derek Keswakaroon, a partner at Bain & Company Bangkok, said in an e-mailed reply to questions.

But while technology is critical, it is not the be-all and end-all, he said. “It is important to recognize that while digital and technology will be a key driving force toward the future of retail, technology in itself is insufficient.”

He said Filipino retailers should reinvent their value proposition to put customer needs at the center of their operations.

“That might involve putting ultra-convenience at the heart of their offering in response to denser urbanization and the rise of time-poor dual-income households,” Bain & Company said in a report discussing the future of retail in the Asia-Pacific region.

Mr. Keswakaroon said there would still be brick-and-mortar stores, but retailers should strengthen their assets and operations for the future.

“There is still a compelling role that physical stores can play,” he said. “The importance is taking a future back approach to optimally resize and respace the store network, and plan for the next generation of store formats, reflecting the changing role of stores,” he added.

In the report, Bain & Company said the Philippine retail industry barely experiences radical digital innovations and has a market that is less mature than in developed economies such as South Korea and Australia.

It joins Mexico, Russia and neighbors Malaysia and Thailand as “developing digitalizers” in a report.

These countries fall behind countries with so-called high digital disruption and maturity that expect only measured or slight digital growth.

In contrast, countries such as Vietnam and Indonesia both have low digital disruption and market maturity, and are expected to experience the strongest digital growth.

More than half of Filipinos live in cities with more than half-a-million people, according to the report. The country’s top three grocery retailers have a market share of about 42%.

Online users spent an average of 15 minutes a visit on e-commerce platform Lazada between March and May, well above the level during the pre-quarantine period, according to the Alibaba Group unit. Transactions on Lazada rose by almost a tenth, it said.

Lazada said the health crisis gives businesses, especially micro, small and medium enterprises, more reasons to take their businesses online.

The value of electronic payment transactions hit P53 billion at the height of a coronavirus lockdown in April, or an average of P6,130 per transaction, according to Philippine Payments Management, Inc., an industry partner of the Bangko Sentral ng Pilipinas.

On Lazada, customers are also finding entertainment in the form of LazLive, a so-called shopper-tainment feature, which draws about 70,000 views per show.

Lazada said shopping online is no longer just a buy-and-sell transaction. The customer journey is omnichannel, so it is important to drive brand engagement and touch base with customers, both on online and offline channels, it said.

One key online battleground during the lockdown was consumer essentials, which might have migrated decisively to online even beyond the pandemic, with shoppers remaining wary of safety issues associated with shopping on site.

At least four of 10 digital consumers in Southeast Asia were found to have spent more on packaged and fresh groceries online this year, with at least 80% of them indicating their intention to continue buying groceries online in the future, according to Facebook, citing a study by Bain & Company.

In March, ride-hailing company Grab launched GrabMart in the Philippines, partnering with more than 150 stores, from big supermarkets to small retailers, with a delivery area of 17 cities in and around Metro Manila. — Jenina P. Ibañez

In the midst of a pandemic, Shell Art tilt theme touches on hope

ENTRIES are now welcome for the 53rd Shell National Students Art Competition (NSAC), with the theme corresponding to the COVID-19 crisis: Hope In Our Art.

“Art can inspire creativity, provoke thought, and empower people to make a change — and that is how it gives hope,” said Serge Bernal, Jr., Vice-President of External and Government Relations of Pilipinas Shell Petroleum Corp. (PSPC), during a webinar on Aug. 25. “Young artists often have a fresher vision and an untarnished idealism. We believe that they can influence the country towards a better and brighter future. Shell continues to invest in programs that promote social development because we believe in the power of the Filipino youth.”

“As heralds of the visual arts, how will you spark hope in the hearts of Filipinos amidst the challenges we face as one nation?,” says the official announcement for the 53rd competition. “Now more than ever, our nation needs enablers who will not just ignite creativity to many but can also bring hope and show resilience amidst the adversaries that we are battling.”

“Using your brush, hands, pen, and technology, show us how you envision a resilient nation,” it says, and goes on to suggest what the students may wish to illustrate: “A nation guided by servant leaders and modern-day heroes; a nation with enhanced education system, strong transportation and infrastructure implementation; a nation strengthened by solidarity and communal efforts; a nation that advocates for sustainability and safeguards the environment.”

The contest is open to college students who are currently enrolled in a duly recognized college or university in the Philippines for the academic year 2020 to 2021 with at least 12 units.  The contest is also open to college students who have enrolled in a duly recognized college or university in the Philippines in any of the semesters for the academic year 2019 to 2020 with at least 12 units, with Senior High School and graduates of the academic year of 2019-2020 not included for eligibility. Entries are accepted until Oct. 11.

Students can win up to P60,000, a gold medal, and a plaque for First Prize. In addition to that, “The respective college or department of the first prize winners will get a special grant worth P20,000 in  support of the Faculty Development Program,” according to the contest mechanics. The Second Prize Winner will win P40,000, a silver medal, and a plaque; and the winner for Third Prize will win P30,000, a bronze medal, and a plaque. Contact shellnsacsecretariat@gmail.com for inquiries regarding submission  of entries.

“We have seen through the years a multitude of talent in the entries we have received, since its inception in 1952. We have since gathered a roster of acclaimed alumni, some of which went on to become National Artists,” said Shell’s Mr. Bernal. Among them are Jose Joya, Federico Aguilar Alcuaz, Ang Kiukok, and Benedicto “BenCab” Cabrera. “More than a source of pride, these artists have given us a sense of purpose, an appreciation of history, and the value of nation building.”

Mariles Gustilo, Senior Director, Arts and Culture of Ayala Foundation Inc. (AFI) said that Shell has donated the winning entries since 1952 to the Ayala Museum in 2017. Those entries, according to her, now form the core of the Philippine contemporary art collection.

This year, instead of a physical exhibit, entries will be featured in a virtual exhibit. While this is also a selling exhibit — there will be a virtual auction, with half the purchase price going to the student and half to charity — the winning entries will not be sold, but will instead be donated to Ayala Museum.

For complete contest mechanics including details on the exhibit and auction, visit https://www.shell.com.ph/energy-and-innovation/make-the-future/national-students-art-competition-hope-in-our-art/_jcr_content/par/toptasks_107961138.stream/1598164851932/2ad47283064395f2e9d6ed632ea8010f46433a93/shell-national-students-art-competition-2020-hope-in-our-art-mechanics.pdf — Joseph L. Garcia

Alsons to boost clean power portfolio in coming years

ALSONS Consolidated Resources, Inc. will raise its renewable portfolio in the coming years, which it expects to deliver nearly half of its earnings.

The Alcantara-led listed holding firm is set to offer P1 billion in the second series of its debt program, the proceeds of which will fund its eight run-of-river hydropower plant projects in the pipeline, the company said in a stock exchange filing on Monday.

“In the next few years, in terms of the number of power facilities, renewable energy will constitute the largest segment in Alsons’ power portfolio,” Alsons Chairman and President Tomas I. Alcantara said in the disclosure.

Out of the eight projects, the 14.5-megawatt (MW) hydropower plant in Maasim, Sarangani province is now under construction and is expected to start operating by 2022.

After completing three renewable facilities, clean power will make up 35% of its income, rising to 45% when five more go online in the future, according to Alsons Deputy Chief Financial Officer Philip Edward B. Sagun.

The company is also developing the 105-MW San Ramon Power, Inc. baseload coal-fired power plant in Zamboanga City, which is expected to begin construction early next year once it gets a construction contract.

Alsons’ P2.5-billion debt service program started in 2018 and is registered with the Securities and Exchange Commission (SEC).

Its latest tranche of issuance was rated PRS A plus by the Philippine Rating Services Corp. (PhilRatings), which means the company has an above-average capacity to meet its financial obligations. It was also given a stable outlook, meaning its rating was likely to be maintained in the next 12 months.

Alsons’ net income soared more than four times to P1.39 billion in the first half from a year earlier, driven by its 210-MW Sarangani Energy Corp. coal-fired baseload plant that was fully operational during the period. Revenue jumped to P5.28 billion from P3.10 billion.

The holding firm is engaged in both power production and real estate. It has four power generators with a combined capacity of 468 MW.

The company said at its recent annual stockholders’ meeting it was considering the sale of its property business.

Alsons shares were unchanged at P1.27 at the close of trading on Monday. — Adam J. Ang

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