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Philippines plans to establish artificial intelligence research center

REUTERS
An illustration picture shows a projection of binary code on a man holding a laptop, June 24, 2013. — REUTERS/KACPER PEMPEL/FILE PHOTO

THE government plans to build a national center for artificial intelligence (AI) research that will help the private sector develop new technologies.

A goal under the artificial intelligence roadmap launched on Wednesday, the National Center for AI Research (N-CAIR) will employ full-time research scientists and engineers.

“The N-CAIR will encourage companies to adopt AI by building their capacity to produce new products, processes and services that use AI,” Trade Secretary Ramon M. Lopez said at the launch.

The AI roadmap outlined 42 “strategic tasks” or goals that cover regulation, workforce development, research and development, and digitization and infrastructure.

One of the tasks is the creation of the AI research center, which Asian Institute of Management-Aboitiz Chairman in Data Science Christopher P. Monterola said would be run by private companies and would be central to regional hubs identified by the government.

“The idea is for this to make the companies in the Philippines competitive,” he said, adding that the facilities would house national data and research cloud centers.

The center in its first three to five years will prioritize agricultural technology and aquaculture, transportation and urban science, smart manufacturing, healthcare and resilience or disaster-management technology.

The success of the roadmap can be measured by internet speed and reliability, the global innovation index ranking, the quality of education rankings, labor market efficiency and employment, and the number of new businesses that use AI as critical components of products, Mr. Monterola said.

The Philippines will also try to attract top global companies to work on research and development in the country, he added.

The center will help small businesses improve productivity through data science and analytics, according to Mr. Lopez. 

“The potential AI applications that can benefit companies include avoiding spoilage of agricultural produce, predicting maintenance of equipment, optimizing processes in factories, and enhancing business decision-making through advanced analytics. This will lead to more operational efficiencies and innovation,” he said.

Information Technology and Business Process Association of the Philippines President and Chief Executive Officer Rey E. Untal is hoping that the center will help create higher value work in advanced technologies after noting a lack of upskilling opportunities for professionals.

“There is room and great opportunity for the industry to partner with N-CAIR in this case to work on comprehensive programs that will utilize real-life use cases across the variety of industries that we service,” he said.

The Trade department worked with data scientists from the Asian Institute of Management-Aboitiz School of Innovation, Technology, and Entrepreneurship to develop the roadmap. — Jenina P. Ibañez

DoF agreed to change EO on pork imports — Sotto

PHILIPPINE STAR/ MICHAEL VARCAS
THE AGRICULTURE department on April 9 implemented a suggested retail price for pork kasim at P270 per kilogram and imported pork liempo at P250 per kilogram. — PHILIPPINE STAR/ MICHAEL VARCAS

THE EXECUTIVE ORDER (EO) reducing the tariff rate for pork imports would be amended after the Senate and the country’s economic managers reached a compromise on the issue, Senate President Vicente C. Sotto III said on Wednesday.

“Compromise reached… (EO) 128 will be amended,” Mr. Sotto told reporters via Viber.

In a phone interview, Mr. Sotto said they agreed to place the cap on minimum access volume (MAV) for pork imports at 254,000 metric tons (MT).

He said they also agreed to set the tariff rates of pork imports under the MAV quota at 10% for the first three months, and increase it to 15% in the succeeding nine months.

Under EO 128 signed by President Rodrigo R. Duterte in April, the original 30% tariff rate of the pork imports under the MAV quota would be cut to 5% in the first three months and will be raised to 10% for the succeeding nine months.

“Middle ground kasi pinagbigyan din namin ’yung kahilingin ni Secretary (Carlos G.) Dominguez (III) at tsaka ng economic managers na ito’y makakatulong sa reduction ng inflation in the next few months,” he told BusinessWorld in a phone interview.

Mr. Sotto earlier said the senators and Executive department had to “strike a balance between accepting a formula in the reduction of inflation and the protection of the local swine industry.”

Mr. Duterte on April 7 issued EO No. 128 temporarily reducing the tariff rates on fresh, chilled or frozen pork “to address the existing pork supply shortage, stabilize prices of pork meat and minimize inflation rates.”

Mr. Duterte also asked Congress to increase the pork imports under the MAV quota by 350,000 metric tons (MT), on top of the current 54,210 MT.

However, Congress opposed the government’s pork import policy. Senators on April 15 adopted a resolution urging Mr. Duterte to withdraw the EO, saying Congress has exclusive power to change tariff rates and import quotas under the Constitution. — Vann Marlo M. Villegas

$14B in planned LNG infrastructure in PHL at risk of being stranded

By Angelica Y. Yang, Reporter

NEARLY $14-billion worth of planned liquified natural gas (LNG) import infrastructure in the Philippines may be at risk of becoming stranded assets as the cost of renewable power generation drops, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

“All 10.9 GW (gigawatts) of LNG-fired power capacity in the current pipeline — with an estimated value of $13.6 billion in total investment — is at risk of being stranded as the market adapts to lower cost renewable power generation,” IEEFA, an organization that examines energy markets, trends and policies, said in a report.

The projected amount covers investments in LNG power plants, ports, regasification facilities and pipelines.

The report, which was written by IEEFA energy finance analyst Sam Reynolds, said the projects would be affected by the price volatility in global LNG markets that is likely to continue in the long term.

“Following the outbreak of the COVID-19 (coronavirus disease 2019) crisis, demand destruction caused JKM (Japan Korean Marker) prices to plummet to $1.85/MMBtu (per million British Thermal Unit) in May 2020,” IEEFA said, referring to what it described as the benchmark spot price for LNG in Asian markets.

IEEFA said production shut-ins, cold weather conditions in Asia and shipping delays caused prices to skyrocket to $32.50/MMBtu in January.

“The Texas energy crisis in February and the blocking of the Suez Canal by a container ship in April demonstrate the wide range of international factors that can influence LNG prices. In the long term, global LNG markets are likely to tighten, adding upward pressure to prices,” it added.

In the Philippines, the short-run marginal costs of an LNG-fired power plant would be determined by fuel prices in the global market, IEEFA said.

“Volatility and long-term upward price risk therefore represent a serious threat to the utilization rates of potential LNG-fired power plants in the Philippines,” it said.

Last year, prices in the country’s spot market were said to have remained low due to easing demand amid a COVID-19 pandemic. If spot market prices decline further and LNG prices rise, merchant LNG plants will experience lower dispatch rates and record diminishing returns over their lifetime, according to IEEFA.

“While the short-run marginal costs of thermal generators are determined mainly by volatile fuel prices, renewable energy sources like wind and solar can essentially run for free when the sun is shining or the wind is blowing,” IEEFA said. “As more renewables are added to the market, gas-fired power plants are likely to go unused for longer periods of time.”

IEEFA said the Philippines’ green energy auction program, which is scheduled next month, is expected to lower the costs of RE technologies and encourage greater price discovery; while the country’s renewable portfolio standards will promote renewable energy deployment at scale and drive down prices in the electricity market.

The auction program allows eligible RE developers to supply their output to consumers who wish to access green electricity at potentially below-market prices. Meanwhile, the portfolio standards require distribution utilities to obtain an agreed portion of power from qualified RE firms.

In its report, IEEFA said the Philippines has a “long history of failed LNG-to-power projects” due to regulatory delays.

“Due to the complexity of LNG-to-power projects, project developers should continue to expect similar delays and analysts should recognize that regulatory delays are a common occurrence for Philippine LNG projects — even those in ‘advanced’ stages,” it added.

At present, seven firms planning to develop LNG import terminal projects have already secured permits from the Energy department. Six companies have projects in Batangas, where the country’s gas-fired plants are located. These are FGEN LNG Corp., Excelerate Energy L.P., Batangas Clean Energy, Inc., Atlantic Gulf & Pacific Co. of Manila, Inc., Shell Group, and Vires Energy Corp.

Energy World Gas Operations Philippines, Inc., which also holds a permit, is building an LNG plant in Pagbilao, Quezon.

Last year, Energy Secretary Alfonso G. Cusi described LNG imports as the “best way” to address the country’s power needs in the coming years. The LNG transition comes as the energy department has previously signaled the impending depletion of the country’s sole provider of natural gas.

Reserves from the Malampaya gas-to-power project, located off northern Palawan, will likely be completely depleted by 2027, based on estimates by the energy department. The project has supplied 21.1% of gross power generation in 2019.

MPIC net income surges nearly four times to P7B

Company officials say banks keen on REIT for tollways, hospitals

By Arjay L. Balinbin, Senior Reporter

METRO Pacific Investments Corp. (MPIC) on Wednesday reported a 272.06% increase in its first-quarter attributable net income, owing to the sale of its stakes in a power producer and a toll road business in Thailand, as well as the recently signed tax incentives law.

MPIC’s attributable net income for the first quarter reached P7.03 billion, up from P1.89 billion in the same period last year, the company said in a statement to the stock exchange.

The company said it benefited from the gain recognized from the sale of Global Business Power Corp. and Thailand’s Don Muang Tollway Public Co. Ltd.

“These recent asset sales underscores MPIC’s commitment to optimizing its portfolio and realizing value for its stakeholders,” it said.

However, the company’s first-quarter core net income fell 26% to P2.5 billion, blaming the decline on the economic contraction caused by the public health crisis.

The pandemic, MPIC said, has resulted in “reduced toll road traffic, light rail services, and commercial and industrial demand for water and power.”

The recently signed Republic Act No. 11534 or the Corporate Recovery and Tax Incentives (CREATE) law that lowered the income tax rates from 30% to 25% also aided the company’s performance in the first quarter, MPIC noted.

“This law eases the company’s future tax liabilities and consequently allows reallocation of resources to further improve operational efficiencies,” it added.

MPIC Chief Financial Officer and Chief Sustainability Officer June Cheryl A. Cabal-Revilla said at an online briefing: “In the first quarter, we actually recognized some positive impact, with the tax rates lowered from 30% to 25%, and that’s about P500 million for the group.”

The company’s operating revenues declined 7.16% to P10.63 billion in the first quarter from P11.45 billion in the same period in the previous year.

MPIC’s power business, which consists of contributions from Manila Electric Co. (Meralco) and Global Business Power, accounted for P2.5 billion or 66% of the total contribution from operations.

Meralco’s core net income fell 11% to P5.1 billion in the first quarter. MPIC said the decrease was “driven by lower energy sales, lower interest income on cash investments, and higher operating expenses.”

Global Business Power’s core net income increased 19% to P522 million because of the CREATE law, it noted.

MPIC’s toll road business saw its core net income fall 15% to P788 million. The decline was due to the “decrease in traffic volumes, higher interest expense and amortization from expanded capital expenditure initiatives in the construction of new roads, and the reduction in contribution from international toll roads owing to the divestment of Don Muang Tollways in Thailand in February 2021.”

“This was partly offset by the positive impact of the CREATE law,” MPIC added.

MPIC said toll roads contributed P800 million or 21% of the total contribution from operations.

The water segment, which consists of contributions from Maynilad Water Services, Inc. and Metropac Water Investments Corp., contributed P500 million or 14% of the total.

Maynilad saw its first-quarter core net income fall 24% to P1.2 billion.

“Amortization and depreciation expenses increased due to substantial investments in the Putatan Water Treatment Plant 2, in the Pasay and Parañaque sewage treatment plants, and continuing upgrades to facilities, partly offset by lower income tax resulting from the CREATE law,” MPIC noted.

The company’s light rail business through the Light Rail Manila Corp. reported a core net loss of P104 million, mainly due to the reductions in capacity and average daily ridership.

MPIC’s hospitals under the Metro Pacific Hospital Holdings, Inc. saw a 6% increase in their consolidated core net income to P285 million.

The increase was “driven by the growth in revenues, further augmented by the positive impact of the tax reduction from CREATE law,” MPIC said.

According to Ms. Cabal-Revilla, MPIC is “poised to hit P12 billion in core income” at the yearend.

REIT AS FUNDING OPTION
MPIC also said on Wednesday it is studying the possibility of pioneering real estate investment trust (REIT) for infrastructure.

“We have been approached by several banks to consider REITs, especially for the hospital business. But we are now the minority shareholder in the hospitals, so it’s really up to the majority shareholders to decide,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said.

Metro Pacific Hospital Holdings President and Chief Executive Officer Augusto P. Palisoc, Jr. said the matter is a “possibility.”

“I think the REIT is a possibility for the hospital group, but we will have to study it very carefully. At the moment, we are very busy with the COVID surge and the vaccination programs that are coming our way,” he said.

For her part, Ms. Cabal-Revilla said: “I think our toll roads group has also been approached to do REITs, but I think they are looking at this from a timing perspective.”

“We’ve been approached… One of our objectives is also to do a public listing eventually. But right now, our portfolio is not yet balanced,” Metro Pacific Tollways Corp. President and Chief Executive Officer Rodrigo E. Franco noted.

REITs require a company to have a recurring income portfolio that investors may put their money into through the purchase of public shares. The new rules of the Securities and Exchange Commission require a minimum public float of 33% and a paid-up capital of P300 million for REITs.

MPIC shares closed 2.44% lower at P4 apiece on Wednesday.

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

Tan’s LT Group earmarks nearly P10B for capex

AYALALAND.COM.PH
THE company also set some P1 billion for ALI Eton Property Development Corp. — AYALALAND.COM.PH

By Keren Concepcion G. Valmonte

LUCIO C. Tan’s LT Group, Inc. (LTG) is allocating P9.7 billion for capital expenditures (capex) this year, nearly double the previous year’s P5-billion budget as the company expects the slow opening of the economy to “bode well for all businesses in general.”

The listed holding firm is formed by Tanduay Distillers, Inc. (TDI), Asia Brewery, Inc. (ABI), Fortune Tobacco Corp., PMFTC, Inc., Eton Properties Philippines, Inc., Philippine National Bank (PNB), and Victorias Milling Co., Inc.

Nearly half or P4.6 billion of the company’s capex will be allocated for PNB’s digitalization efforts.

During the company’s annual stockholders’ meeting, LTG President and Chief Operating Officer Michael G. Tan said the group’s banking segment is expecting to see more nonperforming loans as the grace period given to borrowers ended in 2020.

“A better economy should pave the way for the need for more loans,” Mr. Tan said.

Meanwhile, the company does not expect its property firm to be as affected compared with other real estate developers since it has more office spaces in its leasing portfolio.

LT Group has increased its capex allocation to P2 billion for Eton Properties after construction was halted last year due to pandemic restrictions.

The company also set some P1 billion for ALI Eton Property Development Corp., its joint venture firm with Ayala Land, Inc.

“We expect the demand for our consumer goods, those of TDI and ABI to show some volume growth or at least remain steady,” Mr. Tan said.

LTG earmarked around P1.5 billion of its capex for TDI and around P700 million for ABI.

“But the volume of PMFTC’s products might still be impacted, as price increases are needed to pass on the annual increase in excise taxes, the last of which was in October 2020,” Mr. Tan said.

LTG also said it was able to secure enough vaccines for over 54,000 of its employees and service providers, as well as for their families.

On Wednesday, LTG shares at the stock exchange went down by 1.36% or P0.18 to close at P13.10 apiece.

Aboitiz group extends terms of CEO, president until 2027

ABOITIZ GROUP

THE board of directors of Aboitiz Equity Ventures, Inc. (AEV) has given the go signal to extend Sabin M. Aboitiz’s term as the listed holding company’s president and chief executive officer until Dec. 31, 2027.

Mr. Aboitiz was supposed to step down at the end of 2024.

“[He] has proven to be a leader who can steer us wisely and resolutely in the right direction, through turbulent waters toward a safe and prosperous harbour in the years to come,” Endika M. Aboitiz, chairman of AEV, said in a statement on Wednesday.

Succeeding his brother Erramon I. Aboitiz, the group’s current president ran the ship beginning Jan. 1 last year. He was lauded by the company for his “decisive leadership, innovative mind-set and ensuring business continuity amid the turbulent economic climate due to the pandemic.”

“The board’s vote of confidence for Sabin comes as AEV and its business units are targeting recovery after the widespread economic disruption caused by the COVID-19 pandemic,” AEV said.

For the first three months of 2021, the Aboitiz group’s income soared by 276% year on year to P7.6 billion from P2 billion.

AEV shares at the stock exchange on Wednesday declined by 1.26% to P35.30 each. — Keren Concepcion G. Valmonte

Yields on BSP’s term deposits drop on steady April inflation

BW FILE PHOTO

YIELDS on the central bank’s term deposits slipped on Wednesday following steady April inflation data and as the peso strengthened in the past days.

Demand for the term deposit facility (TDF) of the Bangko Sentral ng Pilipinas (BSP) hit P583.062 billion on Wednesday, higher than the P510 billion on the auction block as well as the P546.571 billion in tenders logged a week earlier.

Broken down, tenders for the one-week term deposits amounted to P157.385 billion on Wednesday, surpassing the P150-billion offer but failing to beat the P174.267 billion in bids seen during the previous offering.

Banks asked for yields ranging from 1.7% to 1.7499%, narrower than the 1.7% to 1.755% band recorded on April 28. With this, the average rate for the seven-day papers dipped by 0.97 basis point (bp) to 1.7314% from 1.7411% last week.

Meanwhile, the 14-day deposits attracted bids amounting to P425.677 billion, higher than the P360 billion auctioned off by the BSP as well as the P372.304 billion in tenders seen a week ago.

Accepted rates for the two-week papers ranged from 1.7% to 1.76%, lower than the 1.725% to 1.78% band seen last week. This caused the tenor’s average rate to drop by 1.15 bps to 1.7486% from 1.7601% previously.

The BSP did not offer 28-day deposits for the 28th straight week to give way to its weekly offerings of bills with the same tenor.

Term deposits and the BSP’s short term securities are used by the central bank to mop up excess liquidity in the financial system and guide market rates.

Yields on the term deposits declined following the release of April inflation data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Headline inflation was steady at 4.5% in April, data released by the Philippine Statistics Authority on Wednesday showed. This was slower than the 4.7% median estimate in a BusinessWorld poll held last week but remained higher than the BSP’s 2-4% target for the year for the fourth consecutive month.

Year to date, inflation averaged 4.5%, above the central bank’s 4.2% forecast for 2021.

Mr. Ricafort said the peso’s recent rise versus the dollar also improved market sentiment, resulting in the lower TDF yields seen on Wednesday.

The peso logged a four-day rally to close at P48.025 versus the greenback on Wednesday. This was its strongest finish in more than two months or since its P47.93-a-dollar close on Feb. 15. — L.W.T. Noble

End-March state-backed loans to MSMEs surge by sevenfold

BW FILE PHOTO
GUARANTEED LOANS to small businesses climbed as of March as Philguarantee Corp. received more funds, the Finance department said. — BW FILE PHOTO

STATE-RUN Philippine Guarantee Corp. (Philguarantee) saw its guaranteed loans to micro, small and medium enterprises (MSMEs) surge by sevenfold as of March from the end-2020 level after receiving the P5 billion in additional funds from the government’s second stimulus package.

The Department of Finance (DoF) reported on Wednesday that Philguarantee’s overall guaranteed loans to MSMEs jumped by 612% to P1.47 billion as of March from P207 million in December 2020. The statement quoted a report from the state-run firm’s president and CEO Alberto E. Pascual.

The number of small businesses that availed of the MSME credit guarantee program (MCGP) also spiked by 312% to 12,122 as of March from 2,948 at end-2020.

Mr. Pascual said improved processing and evaluation processes helped boost the number of businesses that availed the program.

Most of the beneficiaries were from wholesale and retail sectors, according to Mr. Pascual, with P503.5 million in total guarantee loans extended to 9,113 of these enterprises.

This was followed by the agriculture sector, where 158 MSMEs were able to take out P33.91 million in government-backed loans; the hotel and restaurant sector, with 573 firms receiving P28.45 million in credit guarantees; and the personal services sector with a combined P31.82 million in guarantees.

Philguarantee is implementing the government’s P120-billion MCGP meant to help the sector recover from the coronavirus pandemic’s impact by encouraging banks to lend more.

Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II) infused additional capital of P5 billion into the state-run firm to expand the program, P2 billion of which was alloted for MSMEs and the rest for guarantee loans of bigger companies requiring up to P300 million in credit cover.

The Budget department released the additional capital on Feb. 8.

In terms of location, Mr. Pascual said borrowers from all regions were able to tap the facility, with the biggest guaranteed loans going to borrowers from the Calabarzon Region (P135.76 million), Central Luzon (P118.87 million), and the Ilocos Region (P65.82 million).

Around P37.7 billion in loan guarantee facilities have been approved so far for 34 banks since last year. The number of banks actively participating in the program also grew to 14 banks at end-March from just three as of 2020.

Mr. Pascual said 12 more financial institutions are scheduled to submit their lists of businesses eligible for guarantee coverage.

The MSME credit guarantee scheme covers loans worth P100,000 to P1 million availed by micro firms from thrift banks and rural banks. The program provides 50% guarantee cover for working capital loans and up to 80% for term loans of up to seven years for use in capital expenditure projects. — B.M. Laforga

Smart partners with AT&T to launch 5G roaming in US

SMART Communications, Inc., the wireless arm of PLDT, Inc., announced on Wednesday that it is launching its fifth-generation (5G) roaming services in the United States.

Smart is working with mobile services company AT&T to launch 5G roaming services in the US, the Philippine telco said in an e-mailed statement.

“We are the first Philippine operator to launch a complete roaming pack for our prepaid customers in the United States,” said Alice R. Ramos, vice-president and head of Roaming and Consumer Business at Smart.

“The US is among the top destinations of tourists and migrant Filipinos, and this partnership with AT&T propels us forward in our goal to bring our world-class 5G roaming services to them,” she added.

Smart said it now has 22 international partners for its 5G roaming services in 16 countries.

It recently partnered with True in Thailand; Sunrise in Switzerland; SmarTone and Hong Kong Telecommunications in Hong Kong; Pelephone in Israel; Turkcell in Turkey; Ooredoo and STC in Kuwait; StarHub in Singapore; NTT Docomo in Japan; Vodafone in Australia; Zain Kuwait, Zain Saudi Arabia, and Zain Bahrain; China Mobile and China Unicom in China; Etisalat and du in the United Arab Emirates; FarEasTone and T-Star in Taiwan; and KT Corp in South Korea.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

Pinoy food beyond the table

FACEBOOK.COM/FILIPINOFOODMONTHOFFICIAL

THE CULMINATING talk of Filipino Food Month, titled “The Endless Possibilities of Filipino Cuisine,” took the discussion beyond the table and into the fields of tourism and education.

The talk, held over Facebook Live on April 30, brought together the Head of the National Commission of Culture and the Arts’ (NCCA) Committee on Music Prof. Felipe de Leon, Jr., sustainable tourism advocate and co-chair of the Philippine Coffee Board Pacita Juan, and Agricultural Counselor for the Philippine Embassy in Beijing Ana Abejuela.

Mr. De Leon made a case for the continued celebration of Filipino Food Month despite the pandemic. “Ang pinakamalapit sa puso ng mga Pilipino, bukod sa kanyang wika, ay relihiyon; pangatlo ang pagkain. Maski gaano katagal na sa ibang bansa ang isang Pilipino, hindi pa rin niya makakalimutan ang kanyang relihiyon, wika, at panglasa. Talagang hinahanap pa rin niya ang pagkain natin (The thing closest to a Filipino’s heart, aside from their language, is their religion; third is food. No matter how long one stays in another country, they do not forget their religion, language, and tastes. They still really look for our food),” he said. “Para sa akin, importante na mapag-aralan ang pagkain, para lalong maintindihan ang ating kultura (For me, it is important to study food, to better understand our culture).”

Ms. Abejuela, meanwhile, takes a stab at its necessity for purposes of the economy. “When that awareness is awakened, it starts. You like it. If you like it, you buy it, or you eat it in a  restaurant. You cook it at home. At the end of the day, it creates economic activity.”

According to Mr. De Leon, during NCCA’s Heritage Month (celebrated every May), their office collects 150 recipes from all over the country, noting that the most familiar are those found in the lowlands. By his count, there are at least 131 languages spoken in the Philippines — each one corresponding to a unique group, each with their own recipes. “Kapag nakilala natin ang kani-kanilang luto — ay naku! — ang laki-laking industriya niyan (When we become familiar with each of their cuisines — my goodness! — what a huge industry it could be).”

“What we need to focus on is the use of local ingredients,” said Ms. Juan in a mix of English and Filipino. “It is timely for us to discover using our local ingredients,” she said, citing difficulties in the shipping and logistics industry due to the pandemic; thus delaying the arrival of imported goods. “We need to ask, ‘Why have we been given this kind of food?’ We need to re-appreciate the local food for those at home, for those who cook — because the consumer is always a co-producer. If it isn’t eaten, it won’t be grown.”

Speaking of producing, Ms. Juan also pointed out how Korean soft power via K-drama has played a role in promoting that country’s cuisine (and by extension, its culture). She urges Filipino entertainment to do the same to inject “more cultural nuance into the script, but the viewer will appreciate it because it’s contextual.”

On a related note, Ms. Abejuela thinks that instilling familiarity with our cuisine (and therefore a love for it) should start at a young age, suggesting the expansion of Home Economics programs in schools. Based on her own experience, “We usually cooked, before, local dishes with the ingredients available, and the ingredients that we have planted,” she said. “It starts with the young. If children are aware of how beautiful and how delicious our dishes are, they will look for them,” she said in a mixture of English and Filipino.

Promotion of Filipino cuisine had been brought up due to the discussion of the more pervasive influence of other Asian cuisines on the world stage: everybody knows what sushi, pad thai, or bulgogi is; but it takes some work to introduce sisig or adobo. “The show-window of a country is when tourism goes up,” said Ms. Juan. “We need that tipping point in the number of tourists who visit us,” she said. “The availability of access to a country’s culture brings the food with it.” She still hopes though, that with the number of Filipinos abroad, our cuisine could make an impression on the world’s palate.

Mr. De Leon agrees. “Ang access, nasaan (Where is the access)?

“When you go to a place, it’s so hard to find Filipino food. Filipinos have to appreciate their own culinary fare [first],” he said in a mix of English and Filipino. “How can we convince other people about the story of our own food?” — J.L. Garcia

Microinsurance premium production down in 2020

BW FILE PHOTO

THE MICROINSURANCE industry’s total premium production dropped by 14.5% last year, but the number of persons covered by these products increased at the height of the coronavirus pandemic, the Insurance Commission (IC) reported on Wednesday.

The IC said in a statement that the total premiums produced by microinsurance companies in the country went down to P7.8 billion in 2020 from P9.12 billion in 2019, citing unaudited financial reports.

The regulator attributed the decline to the strict quarantine measures imposed by the government last year at the height of the coronavirus pandemic.

The nonlife insurance sector posted the largest drop in premiums at P913.51 million, down by 25.46% year on year. This was followed by the mutual benefit association (MBA) sector, which produced P4.46 million in premiums last year, or 15.13% lower from the 2019 level.

The life insurance sector likewise recorded an 8.17% decrease in premiums to P2.42 billion.

“Nevertheless, we are hopeful that these adverse effects are only temporary; and that the situation will improve in the succeeding months. Despite these year-on-year decreases, the microinsurance sector’s premium and contribution production still signified growth [on a quarterly basis],” Insurance Commissioner Dennis B. Funa was quoted as saying.

Meanwhile, the number of lives covered by microinsurance products went up by 11.56% to 50.35 million last year from 45.13 million the year before, breaching the IC’s 50 million goal two years ahead of the 2022 target.

The expansion was led by the life sector, whose microinsurance products’ covered lives rose by 33.48% to 14.7 million in 2020. The MBA sector reported 28.96 million lives insured, up 12.88% year on year.

The growth in the number of lives insured by these two sectors more than offset the 20.96% drop in the coverage of the nonlife insurance sector to 6.69 million last year from 8.47 million in 2019.

Grace periods, the deferment of premium payments, and further extension of various relief measures may have contributed to the lower premiums earned by the industry and the increased number of lives insured, the IC said.

MBAs continued to be the biggest player in the microinsurance industry last year, both in terms of coverage and premiums, with its premium production and total number of lives insured taking market shares of 57.2% and 57.5%, respectively.

For their part, life insurers contributed 31% to the microinsurance industry’s premiums in 2020 and serviced 29.19% of the total market. Meanwhile, the nonlife sector produced 11.7% of total premiums and had a 13.29% share in terms of coverage.

MBAs that led in terms of premiums last year were: CARD Mutual Benefit Association, Inc., Pag-Asa ng Pinoy MBA, Inc.; Tulay sa Pag-unlad Mutual Benefit Association, Inc.; Simbag sa Emerhensiya Asin Dagdag Pasegurohan MBAI; and Alalay sa Kaunlaran Benefit Association, Inc.

Meanwhile, the life insurance firms that recorded the biggest microinsurance premiums last year were: CLIMBS Life and General Insurance Cooperative; Pioneer Life, Inc.; United Coconut Planters Life Assurance Corp.; 1 Cooperative Insurance System of the Philippines; and Country Bankers Life Insurance Corp.

Nonlife insurers that made it to the top five were: CARD Pioneer Microinsurance, Inc.; The Mercantile Insurance Co., Inc.; Pioneer Insurance & Surety Corp.; UCPB General Insurance Co., Inc.; and Visayan Surety & Insurance Corp. — B.M. Laforga

SMIC income up by 5% after cutting costs

SM Investments Corp. (SMIC) reported on Wednesday that its consolidated net income increased by five percent to P9.5 billion in the first three months of the year from P9 billion year on year due to cost-cutting measures.

“We have reduced our operating costs and are benefiting from the high levels of cost efficiency that we focused on during the last twelve months,” SMIC President and Chief Executive Officer Frederic C. DyBuncio said in a statement on Wednesday.

The company closed the January-to-March period with consolidated revenues of P96.9 billion, 13% lower than the P111.2 billion seen last year.

Its banking segment accounted for 54% of its net earnings from core businesses.

BDO Unibank, Inc. generated a net income of P10.4 billion during the quarter, 19% higher than the P8.8-billion income seen in the previous year “on the robust performance from service fee businesses that compensated for the weak demand for loans.”

Loans at BDO dropped by one percent year on year to P2.2 trillion, while total deposits increased by two percent to P2.6 trillion with an 11% rise in CASA (current account and savings account) deposits.

Meanwhile, China Banking Corp. reported a net income increase of 64% to P3.6 billion from the P2.2 billion seen in the same period last year.

China Bank’s net interest income went up by 16% to P9.2 billion due to a 52% interest expense dip.

“This was supplemented by a three-fold growth in fee-based income to P3.6 billion, driven by strong trading and securities gains of P2.2 billion,” SMIC said.

SMIC’s property segment contributed 33% of the company’s net earnings from subsidiaries.

SM Prime Holdings, Inc. finished the quarter with P6.5 billion in consolidated net income, which declined by 22% from P8.3 billion last year. Consolidated revenues fell by 19% to P20.8 billion from P25.8 billion.

Residential revenues grew by five percent to P11.9 billion, revenues in local mall businesses went down by 48% to P5.9 billion year on year, while other business segments contributed P1.6 billion in SM Prime’s consolidated revenues.

SM Retail Inc. generated a first-quarter net income of P1.6 billion, a 36% improvement from P1.2 billion earned in the first three months of 2020. However, revenues declined by 14% to P70 billion from P81 billion.

Food businesses in SM Markets, WalterMart, and Alfamart saved in utility expenses due to the use of energy-efficient lighting and refrigeration.

Meanwhile, non-food stores The SM Store and Specialty Retail also had cost-cutting measures, which led to a 58% growth in net earnings.

“As our businesses adapt to a challenging operating environment and broader economic uncertainties, we continue to innovate and find new ways to service our customers’ needs,” Mr. DyBuncio said.

On Wednesday, SMIC shares at the stock exchange went down by 0.94% to close at P951 each. — Keren Concepcion G. Valmonte

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