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Microsoft, JA Asia Pacific, and CloudSwyft launch digital skills program in Asia Pacific

MICROSOFT CORP. has partnered with JA Asia Pacific and CloudSwyft to provide a skilling program for young jobseekers in Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. Of the targeted 60,000 participants this year, 4,000 will be from the Philippines.  

“COVID-19 has accelerated the shift towards a digital economy, and organizations here in the Philippines are requiring greater digital skills from talents so that their businesses can adapt and thrive in this new environment,” said Andres Ortola, Microsoft Philippines general manager, in a recent statement. 

The new program is an extension of Microsoft’s broader Global Skilling Initiative, which reported last month that over 150,000 Filipinos had gained digital skills via its online courses, to be offered until the end of 2021. 

Mr. Ortola added that “reskilling, cross-skilling, and upskilling” young adults should help them cope with job losses. The partners in this program are JA Asia Pacific, a youth-serving non-profit organization, and CloudSwyft, a cloud-based learning platform provider.  

The Department of Education (DepEd) will also assist in implementation. “There are a lot of Filipinos, particularly from underprivileged communities, who are eager to learn so that they can have better lives and contribute to Philippine society,” said Zaldy H. Reliquias, division curriculum chief of DepEd. 

As for the effects of skilling programs on jobseekers’ chances, last month’s Future in Talent report by professional networking site LinkedIn revealed that Philippine employers now value technical skills more highly than experience. 

Webinars offered in the program will include career path discussion, data science courses, and lab assessments by CloudSwyft. “In addition to providing crucial digital skills training to communities in the Philippines, our skilling program will be invaluable in supporting business and economic growth,” said Dann Angelo De Guzman, CloudSwyft founder and chief executive officer. 

One indicator of such growth is the labor force participation rate (LFPR), which rose to 65% in March from 63.5% in February, according to the latest data from the Philippine Statistics Authority (PSA). This means a total of 48.77 million Filipinos over 15 years old are either employed or looking for work, a record-high since the 65.2% LFPR in 2014. 

“We understand the hurdles people are currently facing when it comes to employment and employability,” said Maziar Sabet, JA Asia Pacific president and chief executive officer. “With 2021 signifying a fresh start for many, we hope to provide more avenues for those who need support through skills training and mentorship.” 

Added Mr. Ortola of Microsoft: “We will continue to partner with the government, NGOs, and the private sector and increase our efforts to ensure that more Filipinos are equipped with the necessary digital skills for the present and the future.” — Brontë H. Lacsamana 

US, Canada, Mexico hold ‘robust’ trade deal talks, downplay differences

Image via the US Food and Drug Administration
Image via the US Food and Drug Administration

WASHINGTON — Trade ministers from the United States, Canada and Mexico said on Tuesday they held “robust” talks on the new North American trade deal and pledged to fully enforce its higher standards, while downplaying differences over a range of other irritants. 

The ministers, in a joint statement issued after their first meeting to review the US-Mexico-Canada Agreement (USMCA) on trade that took effect in July 2020, also vowed to focus on fighting climate change and crack down on imports of goods to the region made with forced labor. 

“The USMCA commits us to a robust and inclusive North American economy that serves as a model globally for competitiveness, while prioritizing the interests of workers and underserved communities,” the ministers said. 

The statement came after US Trade Representative Katherine Tai met virtually with Mexican Economy Minister Tatiana Clouthier and Canadian Trade Minister Mary Ng in the initial meeting of the governing body for the trade deal, which regulates some $1.5 trillion in annual North American trade. 

Their statement described discussions on new labor and environmental obligations as “robust.” 

Ms. Tai had earlier urged her counterparts to pursue strong implementation of the USMCA to ensure that it would maintain political support. 

“For this agreement to be durable, it must serve the needs of everyday people — not just in the United States, but in Mexico and Canada as well. That will only happen if we deliver on our promises,” Ms. Tai said. 

The USMCA replaced the 1994 North American Free Trade Agreement, adding chapters on environmental, labor and digital commerce standards and considerably tighter regional automotive content rules. 

Over two days of bilateral and joint virtual meetings, the three ministers brought up long-standing complaints and ones that have cropped up over the past year, with Ms. Tai chiding Canada over a proposed digital tax and Ottawa’s allocation of dairy quotas. 

Ms. Ng told reporters that she raised Canada’s concerns about “unwarranted and unfair” US lumber tariffs and vowed to defend the sector’s interests. On Monday, she brought up US “Buy American” restrictions on infrastructure and public procurement projects. 

 Mexico raised differences between the US interpretation of the USMCA’s automotive content rules and the more flexible Mexican and Canadian interpretations, said Mexican Deputy Economy Minister Luz Maria de la Mora, adding that the countries would continue to discuss the matter. 

She also said Mexico asked the United States to review its ground transportation rules to ensure that Mexican truckers had access to the US market — a longtime complaint from Mexico City. 

TAKING STOCK
But those issues were not mentioned in the joint statement, which focused on cooperation to implement new labor, environmental, and digital economy rules and reaching out to underrepresented groups. 

The ministers said officials from the three countries plan to meet with small-business owners in October in San Antonio to promote inclusion in USMCA’s benefits. 

“This was primarily an opportunity to take stock of the new agreement, think about how it works, and … lay out the priorities of the three countries,” said a senior US trade official, adding that further high-level meetings would likely take place in coming years. 

Although the USMCA did not include a climate-change chapter at the insistence of the Trump administration, the official said Tuesday’s talks included substantial discussion of climate-change matters. 

The United States highlighted the importance of labor issues during the meetings, and said Mexico’s response to a potential labor rights violation associated with a union contract vote at a General Motors Co truck plant in the central Mexican city of Silao showed “how well this can be used by both countries.” — David Lawder and Andrea Shalal/Reuters 

China says US threatening peace as warship transits Taiwan Strait

BEIJING/TAIPEI — China accused the United States on Wednesday of threatening the peace and stability of the Taiwan Strait after a US warship again sailed through the sensitive waterway that separates Taiwan from its giant neighbor. 

The US Navy’s 7th Fleet said the Arleigh Burke-class guided missile destroyer USS Curtis Wilbur conducted a “routine Taiwan Strait transit” on Tuesday in accordance with international law. 

“The ship’s transit through the Taiwan Strait demonstrates the US commitment to a free and open Indo-Pacific. The United States military will continue to fly, sail, and operate anywhere international law allows,” it said. 

A spokesman for China’s Eastern Theatre Command expressed strong opposition and condemned the move, which comes amid heightened tensions between the two powers. 

“The US actions sends the wrong signals to Taiwan independence forces, deliberately disrupting the regional situation and endangering peace and stability across the Taiwan Strait,” he said. 

Chinese forces tracked and monitored the ship throughout its voyage, he added. 

China believes Taiwan’s democratically elected government is bent on a formal declaration of independence for the island, a red line for Beijing. 

Taiwan President Tsai Ing-wen says they are already an independent state called the Republic of China, its formal name. 

Taiwan’s Defense Ministry said the US ship had sailed in a southerly direction through the strait and the “situation was as normal.” 

The US Navy has been conducting such operations every month or so. 

The United States, like most countries, has no formal diplomatic ties with Taiwan but is its most important international backer and a major seller of arms. 

Military tension between Taiwan and Beijing have spiked over the past year, with Taipei complaining of China repeatedly sending its air force into Taiwan’s air defense zone. 

Some of those activities can involve multiple fighters and bombers. 

China has said its activities around Taiwan are aimed at protecting China’s sovereignty. Taiwan’s government has denounced it as attempts at intimidation. — Reuters 

How Myanmar’s military moved in on the telecoms sector to spy on citizens

RODION KUTSAEV-UNSPLASH

SINGAPORE/BANGKOK — In the months before the Myanmar military’s Feb. 1 coup, the country’s telecom and internet service providers were ordered to install intercept spyware that would allow the army to eavesdrop on the communications of citizens, sources with direct knowledge of the plan told Reuters. 

The technology gives the military the power to listen in on calls, view text messages and web traffic including emails, and track the locations of users without the assistance of the telecom and internet firms, the sources said. 

The directives are part of a sweeping effort by the army to deploy electronic surveillance systems and exert control over the internet with the aim of keeping tabs on political opponents, squashing protests and cutting off channels for any future dissent, they added. 

Decision makers at the civilian Ministry of Transport and Communications that delivered the orders were ex-military officials, according to one industry executive with direct knowledge of the plans and another briefed on the matter. 

“They presented it as coming from the civilian government, but we knew the army would have control and were told you could not refuse,” the executive with direct knowledge said, adding that officials from the military-controlled Ministry of Home Affairs also sat in on the meetings. 

More than a dozen people with knowledge of the intercept spyware used in Myanmar have been interviewed by Reuters. All asked to remain anonymous, citing fear of retribution from the military junta. 

Neither representatives for the junta nor representatives for politicians attempting to form a new civilian government responded to Reuters requests for comment. 

Budget documents from 2019 and 2020 for the previous government led by Aung San Suu Kyi that were not disclosed publicly contain details of a planned $4 million in purchases of intercept spyware products and parts as well as sophisticated data extraction and phone hacking technology. The documents were provided by activist group Justice for Myanmar and were independently verified by Reuters. 

Reuters was not able to establish to what extent senior non-military people in Ms. Suu Kyi’s government had been involved in the order to install the intercept. 

The idea of a so-called “lawful intercept” was first floated by Myanmar authorities to the telecommunications sector in late 2019 but pressure to install such technology came only in late 2020, several sources said, adding that they were warned not to talk about it. 

The intercept plans were flagged publicly by Norway’s Telenor in an annual update on its Myanmar business, which is one of the country’s biggest telecom firms with 18 million customers out of a population of 54 million. 

Telenor said in the Dec. 3 briefing and statement posted on its websites that it was concerned about Myanmar authorities’ plans for a lawful intercept able to “directly access each operator and ISP’s systems without case-by-case approval” as Myanmar did not have sufficient laws and regulations to protect customers’ rights to privacy and freedom of expression. 

In addition to Telenor, the affected companies include three other telecom firms in Myanmar: MPT, a large state-backed operator, Mytel, a venture between Myanmar’s army and Viettel which is owned by Vietnam’s defense ministry, and Qatar’s Ooredoo. MPT and Mytel are now under the full control of the junta, the sources said. There are about a dozen internet service providers. 

Telenor declined to respond to questions from Reuters for this article, citing unspecified security concerns for its employees. 

MPT, Mytel and Ooredoo did not respond to requests for comment. Japanese trading house Sumitomo Corp, which together with wireless carrier KDDI Corp announced in 2014 planned investment of $2 billion in MPT, declined to comment. KDDI and Viettel did not respond to requests for comment. 

Many governments allow for what are commonly called “lawful intercepts” to be used by law enforcement agencies to catch criminals. But in most democratic countries and even some authoritarian regimes, such technology is not ordinarily employed without any kind of legal process, cybersecurity experts say. The Myanmar military, in contrast, is directly operating invasive telecoms spyware without legal or regulatory safeguards to protect human rights in place, according to industry executives and activists. 

Even before the coup, Myanmar’s military wielded outsized influence in the democratically elected civilian government led by Ms. Suu Kyi. It had an unelected quota of 25% of parliamentary seats and the constitution gave it control of several key ministries. It also had extensive sway at the communications and other ministries through the appointment of former army officers. That has become total control since the coup. 

TRACINGS AND INTERCEPTIONS 

According to three sources at firms with knowledge of the surveillance system, not every telecom firm and internet service provider has installed the full intercept spyware. Reuters was not able to establish how broadly it has been installed and deployed. 

But military and intelligence agencies are conducting some tracing of SIM cards and interception of calls, two of those sources said. One source said calls being redirected to other numbers and connecting without a dial tone were among the signs of interception. 

A legal source with knowledge of cases against people involved in the protests also said there was evidence of monitoring spyware being used to prosecute them. Reuters has not seen any documents supporting the claim. 

A senior civil servant who is aiding ousted politicians seeking to form a parallel government also said their group has been warned by people working for the junta but sympathetic to protesters that phone numbers are being traced. 

“We have to change SIM cards all the time,” the senior civil servant said. 

According to Amnesty International’s Security Lab and three other tech experts, the intercept products outlined in the government budget documents would enable the bulk collection of phone metadata — data on who users call, when they call and for how long — as well as targeted content interception. 

CABLES CUT, ACTIVISTS’ PHONES BLOCKED 

Among the military’s first actions on Feb. 1 was to direct armed soldiers to break into data centers nationwide at midnight and slash internet cables, according to employees at three firms who showed Reuters photos of severed cables. 

At one data center where employees resisted, soldiers held them at gunpoint and also smashed monitors to threaten them, said one source briefed on the matter. 

Though the internet was mostly restored with hours, the army began shutting it down nightly. Within days, the army had secretly ordered telecom firms to block the phone numbers of activists, junta opponents and human rights lawyers, providing the firms with lists, according to three industry sources briefed on the matter. Those orders have not been previously reported. 

The sources added that operators are required by law to share customer lists with authorities. 

The army also directed the blocking of specific websites. Facebook, which was used by half the country and quickly became crucial to protest organizers, was among the first to be banned, followed by news sites and other social media platforms. 

When opposition grew in March, the military cut access to mobile data altogether, leaving most in Myanmar without access to the internet. 

“Firms have to obey the orders,” one industry source said. “Everyone knows that if you don’t, they can just come in with guns and cut the wires. That’s even more effective than any intercept.” 

Telenor and Ooredoo executives who protested were told to stay quiet or the companies would face losing their licenses, four sources said. 

THE ARMY’S TIGHTENING GRIP 

Under previous juntas that ruled between 1963 and 2011, activists and journalists were routinely wiretapped and smartphones were scarce. 

As Myanmar opened up, it became a telecoms success story with a thriving, if nascent, digital economy. Mobile phone penetration, in 2011 the second-lowest in the world after North Korea at 6.9%, soared to stand at 126% in 2020. 

The civilian government’s first known move towards nationwide surveillance came in 2018, with the establishment of a social media monitoring system it said was aimed at preventing the influence of foreign forces. It followed that with a biometric SIM card registration drive last year, saying multiple SIM card use was undesirable and a central database was necessary. 

Authorities are now seeking still more power over telecommunications. 

The communications ministry proposed a new law on Feb. 10 that states internet and telecom firms will be required to keep a broad range of user data for up to three years and remove or block any content deemed to be disrupting “unity, stabilization, and peace,” with possible jail terms for those who don’t comply. 

In late April, the junta began ordering telecom operators to unblock certain websites and apps, starting with the apps of local banks, said three people briefed on the development. Microsoft Office, Google’s Gmail, Google Drive and YouTube have also since been unblocked. 

Asked about the unblocking, a Microsoft representative said the company had not engaged with officials in Myanmar. Google did not respond to requests for comment. 

Industry sources and activists believe these moves are part of an attempt by the junta to establish its version of the internet, akin to what China has done with the “Great Firewall.” 

“The military wants to control the internet so it will be a safe zone but only for them,” said one industry executive. “We’ve gone back five years in time.” — Fanny Potkin and Poppy McPherson/Reuters 

FWD Insurance partners with Cebuana Lhuillier for nationwide financial and protection inclusion

FWD Insurance has partnered with Cebuana Lhuillier to bridge the financial and protection gap covering a wider socioeconomic segment of the Philippine market. In an agreement signed in April 2021, affordable FWD insurance plans and digital solutions will be made accessible to Cebuana Lhuillier’s close to 30M Filipino customers spread across 2,500 branches nationwide.

Combining their strengths in product innovation and market reach, both organizations aim to change the landscape of insurance protection in the country. The expanded market share plus the diverse array of financial and insurance solutions are projected to stimulate revenue growth and financial health for both organizations.

The plan will be implemented through pawn assurance, digital channels and solutions, a fully digitized team of advisors, and a brand-new sachet insurance concept that will cater to the specific needs of more Filipino households.

“We’re always searching for innovative channels so we can reach more untapped customer segments. This partnership with the country’s leading micro-financial services institution strengthens our thrust toward financial and protection inclusion on a national scale. Cebuana Lhuillier can help us provide the right protection that fits the specific needs and budget of more Filipinos and empowers them to celebrate living,” says Li Hao Zhuang, President, and CEO of FWD Insurance.

“In our venture to bring our business to digital space, building a strategic partnership with one of the fastest-growing insurers in the Philippines supports our commitment to make every Filipino financially included anytime, anywhere. The strength of both our organizations allows us to seamlessly deliver quality products and services to our markets,” says Jean Henri Lhuillier, President, and CEO of PJ Lhuillier, Inc.

Affordable life insurance-focused products and packaged solutions involving health, life and investment products will be introduced to give more Filipinos from all walks of life the chance to get covered according to their protection needs and budget. They will also be given optimum buying options for their convenience using either technology-aided platforms for remote interaction, or through face-to-face engagement with a highly trained sales team.

Both FWD Insurance and Cebuana Lhuillier will be sharing best practices in the implementation of plans under the partnership. Aside from training employees and salespeople for additional knowledge and skills in financial planning, team collaboration and a reward system for top performers will also be enforced.

 

 

Vivant Corporation announces schedule of virtual stockholders’ meeting

PHL slashes GDP growth outlook amid virus fight

PHILIPPINE STAR/ MICHAEL VARCAS
The Philippine economy’s recovery is dependent on the pace of its mass vaccination campaign, which has picked up pace as more vaccines arrive. — PHILIPPINE STAR/ MICHAEL VARCAS

By Beatrice M. Laforga, Reporter

THE GOVERNMENT slashed its growth target for this year and the next, as the renewed spike in coronavirus disease 2019 (COVID-19) cases and strict lockdown curbs hobble the economy’s recovery.

In its 179th meeting on Tuesday, the Development Budget Coordination Committee (DBCC) downgraded its gross domestic product (GDP) growth target to 6-7% from 6.5-7.5% penciled in last December 2020. However, this was still an improvement from the record 9.6% contraction in 2020.

“The emerging GDP growth projection is slightly adjusted to 6-7% from 6.5-7.5% in view of the emergence of new COVID-19 variants and the reimposition of enhanced community quarantine (ECQ) in the National Capital Region (NCR) Plus area during the second quarter of the year,” the DBCC said in a joint statement.

Economic managers expect the economy to return to its pre-crisis level by next year. Next year’s GDP is expected to grow by 7-9%, lower than the previous target of 8-10%. The economy’s growth is seen to slow to 6-7% in 2023 and 2024.

“The effects of the COVID-19 pandemic may remain in the short term, but we are optimistic that the economy will return to its upward growth trajectory starting this year. This can be achieved through the accelerated implementation of the country’s recovery package and rollout of the national vaccination deployment to cover a broader segment of the population,” the DBCC said.

The economy remained in a recession in the first quarter after contracting by 4.2%. This marked the fifth consecutive quarter of decline due to the coronavirus pandemic.

The government has gradually eased the strict lockdown measures reimposed in Metro Manila and its nearby provinces from March to May to curb the virus surge. The daily number of new COVID-19 cases have started to dwindle since then, with only 4,487 new infections recorded on Tuesday from a high of 15,000 last month, according to the Health department.

However, the economy’s recovery is dependent on the pace of the country’s mass vaccination campaign, which has been picking up as more vaccine supplies arrive. The government earlier said 35% of 110 million target Filipinos may be vaccinated against the coronavirus by August.

OTHER TARGETS
The DBCC maintained a 2-4% inflation target range for this year until 2024.

Amid a faster rebound in global economy, 2021 assumptions for growth in goods exports were increased to 8% from 5% previously, while the expansion of goods imports was pegged at 12%, from 8%, previously.

The merchandise exports sector is expected to pick up by 6% each year from 2022 to 2024, while goods imports will rebound faster at 10% next year (from 8% previously), and by 8% in the next two years.

Services exports are expected to increase at 6% over the medium term, while growth in services imports was pegged at 7% this year, and 8% in 2022-2024.

Socioeconomic Planning Secretary Karl Kendrick T. Chua during the briefing said the economy will have to grow by at least 10% in the next three quarters to meet the lower-end of the revised growth target this year.

“The second important element in this assumption is that we begin to accelerate significantly, our vaccination efforts in the areas of highest risk, and that includes the NCR Plus and the larger cities where the cases are quite high,” Mr. Chua said.

The DBCC said the target can be achieved if the government will strengthen its prevention, isolation and treatment strategies; adopt digital tools for its contact tracing efforts; and release P17-billion to fund additional social programs to help affected sectors.

“A version of this proposal is currently being deliberated in the Lower House, and is contingent on raising additional savings and revenues to remain deficit neutral,” economic managers said.

FISCAL PROGRAM
Economic managers also revised their medium-term fiscal program in the next four years.

The DBCC hiked the budget deficit cap to 9.4% of GDP (from 8.9%), after it increased the projected total spending to P4.74 trillion from P4.233 trillion due to the additional funds for the stimulus package and vaccination program. The target for state revenues was kept at P2.88 trillion.

It also raised the estimated deficit-to-GDP ratio for next year to 7.7% from 7.6%, previously. This will go down to 6.4% in 2023 and 5.4% in 2024.

Projected revenues for next year were trimmed to P3.29 trillion from P3.314 trillion, while the expected total disbursements were kept at P4.95 trillion.

For 2023, the economic team expects to generate P3.59 trillion in total revenues and spend P5.11 trillion. This will rise to P4 trillion for revenues and P5.4 trillion for disbursements in 2024.

“The estimated disbursements for 2022 to 2024 already take into account the proposed Growth Equity Fund (GEF), which will be established in line with the implementation of the Supreme Court Ruling on the Mandanas-Garcia case. The GEF aims to assist poorer Local Government Units (LGUs) in addressing the problems of marginalization, unequal development, and high poverty incidence,” the interagency committee said.

SALE OF ASSETS
While the projected debt stock was not disclosed during Tuesday’s briefing, Finance Secretary Carlos G. Dominguez III said they expect the debt pile to remain below 60% of GDP by the end of the year.

“We are preparing to sell assets, essentially, certain large mines that are under the management of the PMO (Privatization and Management Office), and with the developments in copper prices internationally the values of those assets have certainly increased. That will be one of the large sources to fund our future deficit,” Mr. Dominguez said.

The Finance chief maintained that the next stimulus program will be deficit neutral where funding sources will mainly come from realigned budgets and remittances from state-run firms, among others.

The cabinet-level DBCC is composed of heads of the Department of Budget and Management, National Economic and Development Authority, the Department of Finance, as well as the Executive Secretary. The Bangko Sentral ng Pilipinas also sits as the committee’s resource institution.

Maynilad, MWSS ink revised water concession agreement

MAYNILAD WATER Services, Inc. has signed a new concession agreement with the Metropolitan Waterworks and Sewerage System (MWSS), which no longer includes “onerous provisions,” Justice Secretary Menardo I. Guevarra said on Tuesday.

“MWSS has signed (the contract) and it has been transmitted to Maynilad,” Mr. Guevarra told reporters.

“The revised concession agreement between the MWSS and Maynilad contains essentially the same terms as those in the recently signed revised concession agreement between the MWSS and Manila Water Company, (Inc.).”

Maynilad Spokesperson Jennifer C. Rufo on Tuesday confirmed that the company has signed the revised contract, adding details will be disclosed on Wednesday.

Mr. Guevarra said the new deal removed “onerous provisions,” as claimed by President Rodrigo R. Duterte, such as the non-interference clause and its ability to charge corporate income tax to consumers.

“Contingent liabilities of the government have been substantially reduced, and a framework for better service to the public has been put in place,” he added.

Maynilad also signed a waiver on Tuesday terminating all related proceedings to its 2017 arbitral award which directed the government to pay P3.4 billion to the company, Mr. Guevarra said.   

He said Manila Water also signed a waiver when the revised contract was finalized on March 31, terminating all proceedings related to its 2019 arbitral award which directed the government to pay the company P7.3 billion.

Signing the waivers means that the government will no longer pay for the compensation stated in the arbitral award, and that “the arbitral award cannot be enforced by execution or by any judicial process anywhere,” Mr. Guevarra said.

Mr. Guevarra also confirmed that Maynilad agreed to a tariff freeze until Dec. 31, 2022 to assist poor customers and aid the country’s economic recovery after the coronavirus disease 2019 (COVID-19) pandemic, which Manila Water also agreed to.

Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Bianca Angelica D. Añago

Filipinos seen to buy more meat, cut back on rice consumption

PHILIPPINE STAR/ MICHAEL VARCAS
BANANAS will continue to be the top choice of fruit among Filipino households, as prices remain low compared with imported fruits. — PHILIPPINE STAR/ MICHAEL VARCAS

FILIPINOS are likely to spend over a third of their household budget on food by 2025, as they buy more meat and poultry products while cutting back on rice consumption, according to Fitch Solutions Country Risk & Industry Research.

“The average Filipino household will spend 34.5% of the total household budget on food in 2025, increasing by 4.8 percentage points from 29.8% in 2006,” Fitch Solutions said in a note titled “Philippines Dietary Shift Analysis” on Monday.

Fitch said the average Filipino household can afford more than just basic food items, as wages and disposable income rise.

The number of Filipino families with an annual disposable income of $10,000 (approximately about P478,000) will rise to 37.7% of the total in 2025, from 3.9% in 2006, it said.

This scenario is based on the nominal wages growing by an annual 5.8% to an average of P13,487 in 2018 from P6,381 in 2006, Fitch Solutions said citing data from the Philippine Statistics Authority.

“Over this period, we note that food spending will grow by an annual average of 8.9% compared to the annual average inflation rate of 3.5% over the same period, indicating real growth in food spending over this period. As a result, there are several instances of shifts in dietary spending stemming from income growth, with consumers spending a lesser proportion of their food spending on staple food items such as rice, instead opting for animal protein,” Fitch Solutions said.

The average Filipino family is expected to spend more than half of its food budget on meat and poultry; fish and seafood; and bread, rice and cereals by 2025.

Filipinos will likely buy less of bread, rice and cereals, with the food category’s share in total food spending falling to 20.4% in 2025, from 36% in 2006, Fitch said.

Spending on fish and seafood products will rise to 24.2% of total food spending from 12.7% in 2006, while meat and poultry will account for 22.3% of the budget from 17.5% in 2006.

“We highlight that the large increase in spending on fish and fish products is due to its relatively low price compared to other animal protein,” it said.

Fitch Solutions noted per capita consumption of meat and rice is expected to rise to 36.6 kilograms (kg) and 130.7 kg, respectively, “highlighting how meat is increasingly taking a larger portion of per capita consumption.”

“Additionally, we note that the average Filipino meal serving size will increase by 10.6% in terms of total rice and meat consumed. This signifies how the average Filipino is consuming more calories, as their disposable incomes increase,” it said.

Filipino households are still expected to be among the top rice consumers in the region, but spending on rice as a share of total food spending will steadily drop to 13% in 2025, from 25.8% in 2006.

Fitch Solutions noted Filipino consumers will be diversifying their diets by adding more meat, vegetables and fruits.

Beef spending will see “insignificant growth” due to much higher prices and quicker yearly inflation, it said.

Meat products, particularly pork, became a major factor to quicker inflation in recent months amid the African Swine Fever outbreak that has caused supply disruption.

Meanwhile, Filipino households are also expected to buy more fresh and preserved fruits, with bananas maintaining the biggest share in spending.

Fruits will likely make up 5.9% of total food spending in 2025, from 3.3% in 2006.

“The Philippines has a large domestic banana farming sector, resulting in much cheaper prices, compared to other fruits domestically. As such, bananas are a cheap and widely available source of fruit of Filipino households to meet recommended daily fruit intakes,” the think tank said. — Luz Wendy T. Noble

Imported car sales soar year on year in April

IMPORTED car sales surged in April after coming off an extremely low base during the strict lockdown in the same month last year, the industry association said.

In a report on Tuesday, the Association of Vehicle Importers and Distributors, Inc. (AVID) said its 21 members which distribute 26 global brands sold 4,396 units in April, or 24,322% higher than just 18 vehicles sold during the enhanced community quarantine that shut down auto dealerships a year ago.

Although year-on-year sales grew, April sales declined by 13% from the 5,193 units sold in March. The government imposed another set of strict quarantine restrictions in the capital region and its neighboring provinces at the end of March after a surge of coronavirus disease 2019 (COVID-19) cases.

Year-to-date sales went up 40% to 20,353 units.

Passenger car sales surged to 987 in April from just 7 last year, led by sales from Suzuki Philippines, Inc. The category’s year-to-date sales grew 16% to 5,328 units.

Light commercial vehicle sales soared to 3,116 from 11 last year, with a bulk of sales going to Ford Group Philippines, Inc. Year-to-date sales increased by 44% to 14,314 units.

The industry group sold 293 commercial vehicles in April after selling none in the same month last year. Year-to-date sales increased by almost eight times to 711 units.

“With these encouraging figures, I say we at AVID have boldly transformed ourselves and have become even better at what we do, which is to provide our customers an end-to-end mobility experience that best suits the needs of the times,” AVID President Ma. Fe Perez-Agudo said.

Another car industry group recorded a 13,315% sales growth to 17,843 vehicles in April, which it called a record increase since the start of the pandemic last year.

Last month’s sales, however, remain 13.8% lower than March figures, data from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA)  showed.

Imported car sales growth in 2021 is expected to come in at between zero and 20%, depending on the government’s final decision on safeguard duties, Ms. Perez-Agudo said in March.

The Trade department imposed 200-day provisional safeguard duties on imported cars to protect domestic-industry jobs after it found a link between a decline in employment and higher imports, following a petition from an auto parts industry union. — Jenina P. Ibañez

Securities sector faces ‘medium’ risk for money laundering, says SEC

REUTERS

THE Securities and Exchange Commission (SEC) found that the securities sector faced a “medium” risk for money laundering (ML) and terrorist financing (TF), after conducting an overall risk assessment.

The risk rating is based on the 2021 Sectoral Risk Assessment for the Securities Sector, which the SEC conducted with support from the Asian Development Bank.

“It was designed to identify the main criminal offenses and related threats currently being faced by the securities sector, the sector’s vulnerabilities most likely to be exploited for ML/TF purposes, and the potential impact or harm that ML/TF activities and other financial crimes in the sector may cause,” the SEC said in a statement.

The report covered 304 brokers, dealers, investment houses, underwriters of securities, government securities eligible dealers (GSEDs), investment company advisers, mutual fund distributors and investment companies supervised by the SEC.

Money laundering and terrorist financing threats may cause “a diminished level of market integrity” and an adverse impact on earnings and revenue across the sector, the regulator said.

The overall money laundering criminal threat for the securities sector is “medium,” although investment houses and underwriters face a “medium-high” risk. Investment company advisers, mutual fund distributors and investment companies see a “medium-low” risk, while brokers and dealers face “medium” risk and GSEDs with “low” risk.

“The sector attracts various criminal threats, with moderate level of sophisticated tactics and methods to commit offenses. The cheap availability of internet access, increasing functionality of mobile phones, and technological advancements that speed up transactions, while admittedly contributing to the ease of doing business and financial inclusion, nonetheless provide criminals with tools to escape detection or to hide the proceeds of their illegal activities,” the SEC said.

Covered individuals submitted 744 suspicious transaction reports (STRs) worth P11.5 billion to the Anti-Money Laundering Council from 2017 to 2019.

Around 4.9% of the reports were related to plunder, 2.5% to graft and corruption, 0.9% were related to drug trafficking, and 0.6% were linked to fraudulent practices and other violations of the Securities Regulations Code.

“Majority of the transactions were suspected to have been facilitated for the commission of the predicate crimes within the Philippines, while five transactions were suspected to have been committed in China,” the SEC said.

The report also showed the securities sector has a medium to low terrorist financing risk, there were a small number of related reports to the AMLC.

However, the sector has a medium vulnerability rating, as the SEC noted “a significant number of factors” that might make the sector exposed to criminal abuse.

“For instance, brokers or dealers have to deal with high liquidity and the speed at which trades can be made without suspicion, making the sub-sector vulnerable to ML,” it said.   

“Investment houses, which had an overall vulnerability of medium to low, showed significant transactional volume and value. The involvement of legal entities in the STRs filed by investment houses and underwriters of securities indicates the vulnerability of the sub-sector for being abused for crime by such entities.”

Investment company advisers, mutual fund distributors, and investment companies were given a medium risk vulnerability rating, but the SEC found a declining trend in the number of STRs filed with the AMLC. The SEC said this suggests “a need to strengthen its reporting mechanisms.”

Meanwhile, the vulnerability risk for GESDs is low due to banks’ internal audit units and periodic examinations by the Bangko Sentral ng Pilipinas (BSP).

The SEC plans to develop regular reporting mechanisms and processes to collect information on the securities sector on top of providing the guidelines and educational activities on anti-money laundering/combating the financing of terrorism (AML/CFT).

“The commission will also take steps to effectively implement [AML/CFT] risk-based supervisory model through regular off-site and on-site inspections,” the SEC said.

It said it will work with the AMLC and the BSP to ensure AML/CFT supervision. — Keren Concepcion C. Valmonte

GMA, TV5 bullish about 2021 amid absent ABS-CBN

By Arjay L. Balinbin, Senior Reporter

FREE television companies GMA Network, Inc. and TV5 Network, Inc. are bullish about 2021 as they continue to benefit from the absence of ABS-CBN Corp.’s broadcast business.

“We became a beneficiary of that,” TV5 Chairman Manuel V. Pangilinan said at an online forum on Tuesday, referring to the non-renewal by the Philippine Congress of ABS-CBN’s broadcast franchise.

The forum, titled “Philippines in View,” was organized by the Asia Video Industry Association (AVIA).

TV5 used to be considered the “third” media network in the country, according to Mr. Pangilinan. “We are far number two to GMA 7 based on the latest [data], although I’m glad we are inching up,” he added.

For her part, GMA Network Chief Marketing Officer Lizelle G. Maralag said the media company, which saw its attributable net income in 2020 surge to P5.98 billion from P2.62 billion previously, is bullish about 2021.

“We’re bullish. It was very difficult last year, but since we are very resilient… we look at 2021 with optimism and hope, especially that the vaccines are coming in already so that will make protocols more relaxed in so far as producing content is concerned,” she said.

On the impact of the shutdown of ABS-CBN’s broadcast operations on GMA Network, she said: “All of the free-to-air channels have… benefited. When you look at the viewing levels of free-to-air stations, they remain stable.”

“But what was lost was the DTT (digital terrestrial television) part — the viewing part of the business — which is roughly around two percentage points, and therefore… we launched our own DTT device, both box and a plug-and-play device on mobile phones, and we’re seeing the recovery of that part of the business already since third quarter of last year,” she said.

Cignal and TV5 President and Chief Executive Officer Robert P. Galang said the Pangilinan group’s DTH (direct-to-home) satellite pay TV benefited from the shutdown of ABS-CBN group’s Sky Direct.

“There were more than a million subscribers who were disenfranchised with that shutdown. Cignal was the stronger alternative,” he said.

“Free to air for TV5 is also doing very well, and we are seeing that improvements in ratings, audience share, and revenue will continue throughout 2021,” he added.

Alexander Muller, TV5 Monde Asia-Pacific managing director, said the number of linear pay TV subscribers is expected to grow in the “next three to four years, as the middle-class population in the Philippines will be more and more numerous.”

“The great thing in the Philippines is that it is a great market in all forms: linear TV is growing, SVOD (subscription video on demand) is growing, AVOD (advertising-based video on demand) is growing, and mobile is growing. It’s really one of those great markets in Asia-Pacific,” he explained.

Mr. Galang noted that the free-to-air model is still the primary way for Filipinos to access entertainment and news.

“It will remain to be that way, as 95% of the population belong to C, D, and E markets. Most of the homes are really single TV homes, so TV is still the cheapest way to get entertainment content and information,” he said.

“The next stage is pay TV, just like what we have in Cignal. We’re seeing very good growth in our pay TV business, and that happened despite the pandemic. We are very confident and bullish that in the next five years, we will still continue to grow both businesses aggressively,” Mr. Galang added.

In his presentation, BusinessWorld Corp. Head of Research Leo Jaymar G. Uy said the Philippine TV culture has experienced disruptions in the recent years, with more Filipinos seen turning to the internet.

Pay TV market, he said, has also been challenged to thrive and remain relevant amid the disruptions brought by the pandemic, as well as the shutdown of ABS-CBN, Sky Direct, and ABS-CBN TVplus.

“TV viewership has also gone down on aggregate compared with pre-pandemic level, albeit it is showing signs of recovery a year after,” Mr. Uy noted.

Among the trends worth watching are the continuing presence of ABS-CBN on the digital space and through TV5 and Zoe Broadcasting Network’s A2Z, GMA’s recently launched digital channels, and moving of advertising spends to digital, he said.

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