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A new delivery service takes off in the Metro

A newcomer in the industry, Getmo is an online delivery service platform that provides courier, shuttle and shopper service to key areas inside and outside of Mega Manila.

Getmo was established when the high demand for transport and delivery service arose, especially now that the restrictions on the quarantine reinforced as the NCR and nearby provinces – Bulacan, Laguna, Rizal, and Batangas – are back to Modified Enhanced Community Quarantine.

Getmo has setup a delivery system through Viber and Messenger to bring commodities closer to consumers.

With services of parcel, food and grocery delivery, Getmo has partnered with its affiliate brands, AllHome, AllDay and Coffee Project, as in-house delivery service across all branches.

Getmo also caters to start-up businesses that does not have their own fleet and needs mode of transport for their products; Getmo offers affordable options for them. With Getmo’s new program, Rider-of-the-Day, one can have their deliveries reach multiple areas in a day, covering 50km for 8 hours for only P1,000.

Along with the brand’s objective to bring consumers their necessities conveniently, Getmo also aims to provide job opportunities especially to displaced workers and promotes gender-equal environment, welcoming anyone that meets the standard qualifications.

Getmo also provides shuttle service that helps get businesses back to operations by targeting work employees in aid of transport for work, given the suspension of public utility vehicles especially in Metro Manila and areas under MECQ.

Vista Malls, in partnership with Getmo has recently launched a program called Shopbuddy with Getmo, where assigned personal shoppers would shop for your needs and deliver straight to your home. Shopbuddy is live on four Vista Malls namely: Vista Mall Sta. Rosa, Vista Mall Taguig, Evia Lifestyle Center and NOMO – A Vista Lifestyle Center and soon to launch on 14 other Vista Mall branches.

To book a rider for Getmo’s delivery service, customers must send a message to either Getmo’s Viber number or Facebook Messenger, with the name, address of delivery, contact numbers, items to be delivered, and preferred delivery schedule. Rates will vary on location, with the base booking fee of only P 65.00. Customers can pay via GCash and bank transfer for easy, cashless transactions.

COVID’s spreading fast because billions don’t have water to wash

A severe household water shortage facing two out of five people in the world is undermining efforts to contain the coronavirus pandemic.

Frequent and thorough hand washing are among the most effective measures in restricting the spread of the virus because the primary routes of transmission are droplets and direct contact, according to the World Health Organization (WHO). Yet, some 3 billion people don’t have access to running water and soap at home, and 4 billion suffer from severe water scarcity for at least one month a year, the United Nations group UN-Water said.

“It is a disastrous situation for people living without access to safe water and safely managed sanitation,” UN-Water Chair Gilbert F. Houngbo said in an interview. “The chronic underinvestment has left billions vulnerable and we are now seeing the consequences.”

Years of deferred investments in clean water and sanitation are now putting everyone at risk as the virus spreads through developed and developing nations generating a cycle of infection and reinfection.

The world needs to spend $6.7 trillion on water infrastructure by 2030, according to the UN, not just for the urgent sanitation needs, but to tackle longer-term issues from the pandemic such as providing better irrigation to head off a potential food crisis, Mr. Houngbo said.

Some companies have stepped in to offer solutions for the most urgent problems. Japan’s Lixil Group Corp., which owns brands such as American Standard and Grohe, worked with Unicef and other partners to create an off-grid handwashing gadget that needs only a small amount of water in a bottle. For $1 million it will make 500,000 units in India to be donated to serve 2.5 million people before it starts retail sales.

It’s a rapid, short-term response to help fight the pandemic, but more sustainable investments are needed, such as installing piped water to more homes, said Clarissa Brocklehurst, a faculty member of the Water Institute at the University of North Carolina and a former water, sanitation and hygiene chief at Unicef.

WATER INEQUALITIES

The lack of access to basic water and sanitation is one more example of the lethal effects of inequality being exposed by the pandemic. The impacts of water mismanagement are felt disproportionately by the poor, who are more likely to rely on rain-fed agriculture for food and are most at risk from contaminated water and inadequate sanitation, the World Bank said.

Underprivileged people in cities are particularly vulnerable as they often live in densely populated areas where social distancing is hard, especially if they have to share a water source. Transmission in the Americas has been tougher to contain in poor urban areas that have limited access to water, sanitation and public health services, said Carissa Etienne, director of the Pan American Health Organization.

As many as 5.7 billion people could be living in areas where water is scarce for at least one month a year by 2050, creating unprecedented competition for water, said UN’s Houngbo.

By one estimate, each degree of global warming will expose about 7% of the world’s population to a decrease of renewable water resources of at least 20%. Limiting warming to 1.5 degrees Celsius, compared to 2 degrees, may reduce climate-induced water stress by as much as 50%.

“Handwashing for so long has been what I would call infantilized,” Ms. Brocklehurst said. “All of a sudden, it’s a matter of life and death and adults are teaching themselves handwashing songs.” — Bloomberg

[B-SIDE Podcast] China: Duterte’s Achilles’ heel

Political analyst Robin Michael Garcia talks about issues affecting Philippine attitudes toward China, among them the coronavirus pandemic and the increasing tension in the West Philippine Sea. 

This episode jumps off from an April 2020 survey by polling and data analytics company WR Numero Research that found that 54% of Filipinos think of China as a good ally to the Philippines. Many things have changed since then and attitudes toward China are ambivalent. Mr. Garcia, CEO of WR Numero Research and an assistant professor at the University of Asia and the Pacific, tells BusinessWorld reporter Charmaine A. Tadalan what he thinks of Duterte’s foreign policy and how China could become the President’s Achilles’ heel.

TAKEAWAYS

The number of people that see China as a good ally will likely decrease if the economic benefits from China fail to materialize.

Mr. Garcia feels that the reason 54% of people still believe that China may be a good ally is because of the economic benefits that China may give, such as the Belt and Road Initiative. 

If these investments do not materialize, the numbers will probably dip below 54%.

The government should assert Philippine rights at sea as more Filipinos feel threatened by China. While the Department of Foreign Affairs has been sending diplomatic protests, the government should create a strategy to improve the country’s security policy 

“Rhetoric is not enough,” said Mr. Garcia. “We need to be able to create a grand strategy of improving our security policy, our security capabilities, alliance policy as well with the US and China.”

China and COVID-19 is the Duterte administration’s Achilles’ heel which may result in a decrease in his influence ahead of the 2022 elections.

“These two things may be separate but also interrelated because China is responsible for this whole mess. It will definitely affect the numbers because this is a cross-cutting issue that even the people who supported Duterte do not agree with Duterte on both,” said Mr. Garcia.

Terminating the Visiting Forces Agreement with the United States will put the Philippines at a weaker position against China’s growing aggression in the West Philippine Sea.

According to Mr. Garcia, a strong alliance with the United States is needed. “If this abrogation will continue then we will really, really be weak in the face of increasing Chinese aggression.”  

China is taking advantage of the pandemic to assert its claims in the West Philippine Sea. It is using the maritime issue to divert attention from its weak response to the COVID-19 crisis. 

The China Communist Party needs to project strength, said Mr. Garcia, and the Chinese government is rallying the country toward nationalism to distract the population from its internal problems. “That’s why from a perspective of insecurity, it’s now becoming more aggressive in the South China Sea,” he said.

Recorded remotely on July 15. Produced by Nina M. Diaz, Paolo L. Lopez, and Sam L. Marcelo.

 

Related episode:

 

One People. One Nation. Healing as One

Over the course of 57 years, the Land Bank of the Philippines (LANDBANK) has taken a more expansive and relevant role in the service of Filipinos and the nation. From delivering intensified support to the country’s agriculture sector, to becoming a reliable partner of the National Government and Local Government Units (LGUs) in driving progress, LANDBANK has remained committed in pursuing its brand promise – ‘We Help You Grow.’

Despite the challenging and rapidly changing banking landscape, LANDBANK through the years has successfully managed to strike a balance in fulfilling its dual role of promoting countryside development while remaining financially viable.

The Bank has stepped up its efforts to be more responsive than ever to the needs of Filipino farmers and fishers, as well as their organizations. It has exerted greater focus on directing its loans to programs and projects that help accelerate growth, generate employment, and revitalize local economies, especially in the countryside.

As a testament to its strong financial record, LANDBANK ranks among the top five commercial banks in the Philippines in terms of deposits, assets, capital, and loans. It is by far the largest formal credit institution in the rural areas, and the only bank present in all 81 provinces of the country that caters to the financing needs of Filipinos even in the farthest corners of the archipelago.

Today, as the country faces an unprecedented crisis of massive scale due to the coronavirus disease 2019 (COVID-19) pandemic, LANDBANK has risen to the demands of unhampered public service. The Bank continues to serve at the front lines to deliver essential and uninterrupted financial services to its mandated sectors, while carrying out various response and support measures to help Filipinos and the entire nation recover, rise, and heal as one.

“As we commemorate LANDBANK’s 57th founding anniversary, we thank all our customers and partners for your continued trust and support. We assure you that LANDBANK is committed more than ever in providing uninterrupted banking service, and contribute in implementing recovery measures. We are one with the National Government and the Filipino people in rising above this adversity,” said LANDBANK President and CEO Cecilia C. Borromeo.

Unwavering support and service in the time of COVID-19

Since the beginning of the COVID-19 outbreak, LANDBANK continues to provide its clients uninterrupted access to financial services, while performing a critical role in the delivery of various support initiatives to sectors most affected by the health crisis.

While many establishments have temporarily closed to stop the spread of the virus, majority of LANDBANK branches nationwide remain open. The Bank is implementing the following preventive measures to ensure public health and safety within Bank premises:

To avoid further spread of the deadly virus, LANDBANK’s electronic and digital platforms are fully operational, providing convenient banking for customers in the safety of their homes. As of end-June 2020, LANDBANK’s e-banking channels recorded a 24 percent surge in volume of transactions.

Meanwhile, LANDBANK supported the implementation of Republic Act No. 11469 or the “Bayanihan to Heal as One Act” as the main distribution arm in the delivery of various social amelioration programs (SAP) of national government agencies for qualified Filipino households severely affected by the pandemic. As of July 1, funds disbursed for these programs are the following:

In terms of providing timely and affordable credit to the affected sectors amid the virus-induced downturn, LANDBANK developed lending programs to finance various response and recovery measures.

Relief for borrowers

Meanwhile, to minimize the financial burden of its clients amid the crisis, LANDBANK rolled out relief packages in the form of payment moratoriums for due dates falling during the previous enhanced community quarantine (ECQ) period. 

In response to the call of the Bangko Sentral ng Pilipinas (BSP) for relief measures that would benefit the general public and increase the use of digital payments during the COVID-19 pandemic, LANDBANK waived its fund transfer fees for PESONet and InstaPay channels until Dec. 31, 2020.

OFBank becomes fully-digital, branchless bank

Amid the onslaught of the COVID-19 pandemic, LANDBANK was still able to fulfill its promise of transforming its wholly-owned subsidiary, the Overseas Filipino Bank (OFBank), as a digital-only, first branchless Philippine government bank. OFBank clients across the globe can now enjoy the convenience of a safe, reliable, and secure digital banking experience anytime, anywhere.

As a digital-only facility, OFBank now utilizes the Digital Onboarding System with Artificial Intelligence (DOBSAI) to facilitate real-time account opening via the OFBank’s Mobile Banking App. There are three types of accounts available: the OFBank Visa Debit Card for overseas Filipinos (OFs) and overseas Filipino workers (OFWs), the OFBank Visa Debit Card for beneficiaries, and the OFBank Debit Card for beneficiaries below 18 years old.

The OFBank Visa Debit Card allows cardholders to receive secure and convenient real-time fund transfers. They may also use OFBank’s mobile facility to transfer funds to the OFBank and LANDBANK accounts of their beneficiaries, free of charge. 

Since the launch of OFBank as a fully-digital bank last June 29, a total of 7,131 overseas Filipinos and OFWs from 43 countries opened their accounts with OFBank as of July 30, 2020. And as it moves forward, it is looking to introduce an electronic multi-purpose loan system to further serve the financing requirements of its valued clients.

Support to Agriculture

Even in the face of a global health pandemic, LANDBANK remains steadfast in delivering intensified support to the agriculture sector, reaching more Small Farmers and Fishers (SFFs). 

Loans to Agriculture

As of end-June this year, LANDBANK has extended loans to agriculture sector amounting to P227.47 Billion—P7.97 Billion or 3.6 percent more than the P219.5 Billion as of June 2019. 

Of these, P35.63 Billion was outstanding loans to small farmers, fishers, cooperatives, and farmers associations. This includes direct lending to farmers and fishers which grew by P219 Million or 18.37 percent from P1.19 Billion in May to P1.41 Billion in June. Meanwhile, loans to other players in the agri-business value chain stand at P191.84 Billion.

Assisting 2 Million SFFs

Also by the midpoint of the year, LANDBANK is already nearing its goal to reach its two (2) million SFFs cumulative target for 2020, with 1,976,689 SFFs assisted nationwide as of end-June. This represents 98.8 percent of the Bank’s target for the year.

Out of the total tally, 1,290,240 beneficiaries were supported through LANDBANK’s various regular loan offerings, and programs jointly implemented with the Department of Agriculture (DA) and the Department of Agrarian Reform (DAR) such as the following:

Financial Performance (as of June 30, 2020)

Despite the significant impact of COVID-19 to the economy, LANDBANK recorded stable financial numbers for the first half of the year with a net income of P10.02 Billion. 

Total assets grew to P2.2 Trillion driven by the 22.23 percent increase in deposits which surpassed the P2 Trillion mark. This fuels the Bank’s continued support to agriculture and other sectors affected by the pandemic.

Stories from the Frontlines

Passion to serve: Courage at sea in the face of adversity

PINAMALAYAN, Oriental Mindoro – Despite health and safety risks, LANDBANK Pinamalayan Branch employees, led by Branch Head Ferdinand E. Abas, braved the waters between Mindoro and Romblon on April 21 to reach the Municipality of Concepcion in Sibale Island, Romblon, to disburse cash cards to more than 200 Conditional Cash Transfer (CCT) beneficiaries of the DSWD affected by the pandemic.

Three hours of boat travel and a mountain hike later, they finally reached Concepcion for the successful pay-out. But on their way back, one of the engines of their small motor boat conked out. A passing boat of the Philippine Coast Guard (PCG) came to their rescue. But with its limited capacity, they had to travel in batches. 

Abas and the others patiently waited for the Coast Guard’s return but because it was already dark, their rescuers failed to locate them. It was already late at night when they safely got back to Pinamalayan on board their limping vessel after hours of fighting rough seas in total darkness.

“In my 25 years of service in LANDBANK, that was the first time my team and I faced such dangers. We could have postponed the pay-out, but we knew that the CCT beneficiaries urgently needed government assistance. I am thankful for my staff who remained true to their duties as Landbankers, with passion and dedication for public service,” Abas said.

Uninterrupted service: Flying through borrowed wings

JOLO, Sulu – When commercial flights to and from Jolo airport were suspended due to COVID-19, LANDBANK Jolo Branch Acting Head Felix Friales had to figure out a way to fly in their cash supplies from the LANDBANK Cash Operation Unit in Zamboanga City to cater to the cash requirements of partner-agencies in implementing various social amelioration programs (SAP). 

Friales tapped the 11th Infantry Division of the Armed Forces of the Philippines (AFP), under the Western Mindanao Command (WestMinCom), to use one of its military aircrafts to transport the cash package. However, unlike commercial flights, the military plane had no fixed schedule of arrival in Jolo, further adding to their anxiety.

“Since this was the first time we used a military aircraft to transfer cash, we were really concerned whether the package would get to us in time for our operations. So when the cash finally arrived, it was a mixed feeling of relief and fulfilment,” he said.

For Frias, his long stay with LANDBANK serves as his driving force to commit to this level of uninterrupted service, adding that, “In this global pandemic, and when faced with a daunting task, Landbankers will continue to strive for excellent customer service, finding extraordinary means when faced with adversity.”

Dedicated Service: A beacon of light during darkness

NAGA CITY, Camarines Sur – On April 8, Bookkeeper Demi Medina, together with LANDBANK Naga Rotunda Branch Manager Melanie Avila and seven others, conducted the first-ever pay-out of the Department of Agriculture’s (DA) Financial Subsidy to Rice Farmers (FSRF) Program in Nabua town for 619 small rice farmers.

“The summer heat was at its peak, worsened by our face masks and gloves, and the packed venue of waiting beneficiaries. Suddenly, the electricity in the venue went out. But because there were still farmers waiting in line, we decided to continue the cash card distribution despite the blackout,” Medina said.

She and her fellow Landbankers resorted to using flashlights from their mobile phones as emergency light. Though exhausted, Medina and her companions felt a renewed sense of fulfillment.

“It was fulfilling to be able to help the farmers in Nabua, whose already meager income were severely affected by the pandemic. I now realize that our willingness to serve others truly makes our job more rewarding. By being a beacon of light amidst the darkness, you can make a difference, you can help change lives,” said Medina.

‘Substantial’ fiscal stimulus needed

PEOPLE line up at a remittance center in Marikina City as they wait to get financial aid from the government’s Social Amelioration Program, Sunday. — PHILIPPINE STAR/MICHAEL VARCAS

THE GOVERNMENT should come up with a “substantial” fiscal package to make up for the drastic drop in consumption that led to a deeper contraction in gross domestic product (GDP) in the second quarter.

“Substantial fiscal packages have shown to be useful to quell a festering recession and we need not look far with neighboring ASEAN countries employing aggressive spending measures,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a note sent to reporters.

The Philippine economy shrank by 16.5% in the April to June period and fell into a recession for the first time since 1991. Growth drivers household consumption and investment significantly declined in the second quarter, given the closures of businesses and losses in income during one of the world’s strictest lockdowns.

The government now expects full-year GDP to contract by 5.5% on the widening impact of the pandemic.

Marikina Rep. Stella Luz A. Quimbo, co-chair of the House of Representatives’ panel on economic stimulus, said the government has to reverse the trend of declining consumption by putting cash in the hands of sectors most affected by the pandemic.

“The huge drop in consumption levels (P534 billion) in Q2 is not surprising, with so many Filipinos now without jobs. Consumption is an important driver of the multiplier effects of government spending on GDP,  hence, it contributed the most to the decline in Q2 GDP,” she said in a text message.

“Filipino households tend to spend more out of every additional peso if these are transfers from the government (e.g. conditional cash transfers) than their own income, so the multiplier effect of ayuda tends to be high,” she added.

Congress is set to approve the economic recovery measure, Bayanihan to Recover as One Act (Bayanihan II) this week.

Ms. Quimbo noted the P162 billion allocated for additional healthcare spending, wage subsidies and financial relief for critically impacted sectors under Bayanihan II is “less than ideal,” as it is a stop-gap measure rather than a comprehensive economic stimulus package. However, she said “any additional amount that the government is willing to spend is certainly welcome.”

The House of Representatives in June passed the P1.3-trillion ARISE (Accelerated Recovery and Investments Stimulus for the Economy) package, but economic managers rejected this, saying such an amount cannot be funded without new sources of revenue. It is still pending at the Senate.

Finance Secretary Carlos G. Dominguez III defended the proposed P180-billion economic stimulus plan, saying this already anticipated the sharp reduction in GDP in the second quarter and will be maintained to keep the budget deficit in check.

In a statement on Sunday, Mr. Dominguez said the stimulus package already incorporates P40 billion worth of tax credits.

“As we said, whatever stimulus package we have, it has to be affordable and it has to recognize the fact that this (corona) virus may not be defeated by the end of this year. So we have to keep, as they say, we have to keep our powder dry for next year as well,” he said. 

The P40 billion is expected to come from the reduction of the corporate income tax (CIT) from 30% to 25% through the Corporate Recovery and Tax Incentives for Enterprises (CREATE) which is pending in Congress and is targeted to be approved within the year.

Mr. Dominguez said the stimulus program also includes a P50-billion infusion into the banking system, which he estimated will generate P400 billion worth of economic activity. At the same time, P5 billion will be allocated for a credit guarantee program for troubled firms, which will have a multiplier effect of 20 times. Taken together, he said this will generate between P400 billion and P600 billion in economic activity.”

Senator Juan Edgardo M. Angara said Bayanihan II is meant to provide initial help, but should be  followed by other economic actions. “Kami naman sa Senado (In the Senate,) we have shown our willingness to work with our economic managers to pursue a successful recovery strategy,” he told BusinessWorld in a text message.

INCOME REPLACEMENT
Meanwhile, House Ways and Means Chair and Albay Rep. Jose Maria Clemente S. Salceda said they will continue to study the need for more income-replacement schemes, including a possible third tranche of the Social Amelioration Program (SAP).

He said there is a need to gauge how much of the decline in household consumption was due to income loss or lack of confidence, which is only considered as deferred consumption and can be revived by addressing policy and bolstering the healthcare system.

“Lost consumption due to lost income will have to be replaced with corresponding increases in government spending on subsidies. Otherwise, that will set future growth back for years,” Mr. Salceda told BusinessWorld in a text message.

“Clearly, we need to do better with providing social assistance. We have to find ways to provide our people with enough income replacement and enough substitute jobs for basic necessities,” he added.

For Asian Institute of Management economist John Paolo R. Rivera, it’s not just the amount of stimulus, but the timeliness of release and the coverage also counts.

“The point of these interventions is to at least allow people to have work and sustain consumption of essentials,” he said in a text message.

He said the government should consider beefing up the SAP in such a way that eligible households will receive it on time to make the stimulus effective and also boost consumption.

“Avoiding taxation (defined or proposed) on both essential and non-essential goods would also help stimulate consumption,” Mr. Rivera added. — Luz Wendy T. Noble

Gov’t debt payments up 42% in first half

THE National Government settled P547.347 billion in debt in the first half of 2020, up 42% from a year ago, data from the Bureau of the Treasury (BTr) showed.

The government’s debt service bill in the first six months accounted for a little over half of the P1.033-trillion debt payment target this year, based on the Budget of Expenditures and Sources of Financing report.

Latest BTr data indicated as of end-June, amortization made up 66% of the total at P359.67 billion, while the remaining 34% or P187.676 billion went to interest payments.

For the month of June, debt service payment fell 59% to P34.387 billion from P83.811 billion in June 2019, largely due to lower amortization. The June figure was 40% higher than May’s P24.642 billion.

In June, 80% of debt payments went to interest and 20% went to amortization.

Principal payments plunged by 83.55% to P6.826 billion in June, from P41.495 billion a year ago. This all went to external creditors as the government did not make principal payment to its local lenders during the month.

Interest payments totaled P27.56 billion, slipping by 5.28% year on year. Some 89% or P24.617 billion were paid to domestic creditors while 11% or P2.944 billion went to foreign sources.

In 2019, total debt payments reached P842.449 billion, up 16.1% from the previous year.

The government borrows from both domestic and foreign lenders to plug the budget deficit seen to hit 9.6% of gross domestic product this year amid rising pandemic expenses and weak state revenues.

The government targets to borrow P3 trillion this year, more than double the P1.4-trillion program set before the pandemic hit the country.

Gross borrowings in the first six months of the year reached P1.7 trillion, beating the P1.02 trillion raised for full-year 2019. Excluding the repayments made, net borrowings for the period reached P1.548 trillion.

The pandemic continues to pummel the economy, which is projected to contract by 5.5% this year following the 16.5% slump in the second quarter. — B.M.Laforga

‘Worst is not over’: FDI slump seen to continue

The rising number of coronavirus infections prompted the government to reimpose a modified enhanced community quarantine (MECQ) in Metro Manila and nearby provinces until Aug. 18. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Luz Wendy T. Noble, Reporter

THE SLUMP in foreign direct investment (FDI) inflows in the Philippines is expected to worsen in the coming months, as investors consider the country’s pandemic response and the steep contraction in gross domestic product (GDP) in the second quarter, the International Institute of Finance (IIF) said.

“I believe the worst is not over. COVID-19 (coronavirus disease 2019) cases are still rising, and a new round of lockdown measures has been implemented,” IIF Associate Economist Yuanliu Hu told BusinessWorld in an e-mail.

The soaring number of coronavirus infections in recent weeks prompted the government to again impose a modified enhanced community quarantine (MECQ) in Metro Manila and nearby provinces until Aug. 18.

Net FDI inflows in the first four months of 2020 slid by nearly a third  to $1.98 billion, data from the Bangko Sentral ng Pilipinas (BSP) showed. In April alone, FDI inflows plummeted 67.9% year on year to $311 million in April.

Mr. Hu said the dismal second-quarter GDP will also weigh on investor sentiment, resulting in investment plans either suspended or postponed.

The country’s GDP contracted by 16.5% in the April to June period as many businesses were shuttered amid one of the world’s longest and strictest lockdowns. The economy is now in a technical recession as the first-quarter GDP also slipped by 0.7%.

“Lower FDI will have a direct negative impact on the government’s infrastructure projects and companies that rely on foreign capital,” Mr. Hu said, noting their research showed a close correlation between FDI and investment-related imports.

At this point, Mr. Hu said the ability to control the spread of COVID-19 will be a vital determining factor in attracting FDI inflows.

“For example, in the region, Thailand has relatively good control of the virus and its FDI increased by 76% year on year in the first five months,” he said, adding the Philippines on the contrary has become the epicenter of the outbreak in Southeast Asia.

The Health department on Saturday reported 4,226 new coronavirus infections, bringing the total to 126,885 cases. The Philippines is now the 22nd in the world in terms of the number of confirmed COVID-19 cases.

“To win back investors, the government will need to do more to control the virus and introduce more stimulus plans,” Mr. Hu said.

Senate Bill No. 1564 also known as Bayanihan II that allocates P140 billion for COVID-19 recovery efforts was approved by the Senate in late July. The funds will be used for increased testing and acquisition of medical supplies, cash-for-work program for displaced workers, and benefits for repatriated overseas Filipino workers.

Its Lower House counterpart which allocates a slightly higher P160 billion is pending and is expected to be approved on third reading this week.

Meanwhile, the much bigger P1.3-trillion stimulus package called ARISE (Accelerated Recovery and Investments Stimulus for the Economy) bill has been approved by the House of Representatives in June but remains pending in the Senate.

Real yields appeal in Southeast Asia as inflation monster sleeps

INFLATION FEARS are hotting up around the world, threatening to undermine the attraction of bond markets. But for now, Southeast Asia appears to be relatively immune.

Indeed, the lack of price growth has been a major factor helping to push up the region’s real yields, or nominal bond yields adjusted for inflation. Indonesia’s consumer-price gains slid to the least in two decades in July, while Malaysia and Thailand have both seen deflation for the last four months. The three countries all offer 10-year real yields of above 2%, putting them in the top tier of major emerging markets.

A major factor behind the subdued inflation in the region has been sluggish food prices. These have a relatively high weighting in local inflation baskets: approximately 30% for Malaysia, and around 36% for Thailand and Indonesia, according to data compiled by Bloomberg. The price of rice — the region’s major food staple — may trend lower in the second half due to rising supply from Thailand, Vietnam and India, Fitch Solutions said last month.

One exception to the overall picture of benign inflation is the Philippines, where a report this week showed consumer prices unexpectedly climbed 2.7% in June. That has resulted in the real yields on its 10-year bonds sinking almost to zero.

Investors should be aware that rising consumer prices remain a risk, especially with the spread of emerging-market yields over the US narrowing. Reflationary price pressures have typically started in developed markets and spilled over into emerging ones, according to a study by Bloomberg Intelligence last month. There are plenty of signs price momentum is building, most notably US two-year break-even rates have risen for 14 straight weeks.

In addition to the favorable inflation picture, another factor burnishing the appeal of Southeast Asian bonds from a real yield perspective is the low currency volatility, a key consideration for investors who prefer not to use hedges.

While South Africa, Brazil and Mexico offer notably high bond yields, they also come with some of the most volatile currencies. In contrast, not a single Southeast Asian currency appears among the top seven emerging markets when ranked for three-month implied foreign-exchange volatility.

There are plenty of things for investors to like about Southeast Asian bonds, including positive supply metrics and favorable positioning. Low currency volatility and attractive real yields can be added to that list — so long as the inflation monster stays away. — Bloomberg

MPIC head keen on COVID-19 vaccines

BUSINESSMAN Manuel V. Pangilinan said his group is interested in talking to pharmaceutical companies for a possible reservation deal once a coronavirus vaccine becomes available.

“Recently, we’ve gotten calls from pharmaceutical companies whether we will be interested in making reservations for potentially the vaccines that could be developed, hopefully by them, so we said, ‘Yes we are interested to talk,’” he said at a virtual briefing on Aug. 6.

The hospital unit of Metro Pacific Investments Corp. (MPIC), which Mr. Pangilinan chairs, has been “preparing to purchase the vaccines for distribution in their hospitals,” Philippine Ambassador to the United States Jose Manuel G. Romualdez said in his recent column in The Philippine Star, citing a conversation with the businessman.

Confirmed cases of coronavirus disease 2019 (COVID-19) in the country have reached over 120,000, according to the Health department.

Mr. Pangilinan said the group was doing everything it could to help the government fight the coronavirus pandemic.

“It’s a big effort on the part of the group to help the government. We are part of the process, in our own small way, of addressing the issues related to the virus,” he said.

He was also concerned about the effects of the contraction of the country’s gross domestic product in the second quarter.

“This 16.5% contraction is worrisome. How will the third and fourth quarters behave moving forward? Will it have an impact on people’s ability to spend on telco products? How will the enterprise sector be affected by this contraction? So these are worrisome issues for us because they could very well affect our revenues moving forward,” Mr. Pangilinan said, referring to PLDT, Inc., in which he is president and chief executive officer.

Finance Secretary Carlos G. Dominguez III said last month the government was planning to allocate P20 billion for the purchase of vaccines.

He said the government would need to vaccinate for free a minimum of 20 million Filipinos.

The Philippine International Trading Corp. will be in charge of purchasing the vaccines, which will be distributed by the Health department, Mr. Dominguez said.

Philippine Ambassador to London Antonio Manuel R. Lagdameo has also said the government is interested in the experimental vaccines developed by Oxford University.

China, according to President Rodrigo R. Duterte, will give priority to the Philippines once it successfully develops a vaccine.

In May, the United States ordered 300 million doses of AstraZeneca’s experimental coronavirus vaccine, while the United Kingdom ordered 90 million doses of potential vaccines from various drug makers, including Pfizer, Inc.

MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group. — Arjay L. Balinbin

Lazada keeps people shopping longer with entertainment

DURING its early days, online shopping was straightforward and uncomplicated — one would search for an item, click on it to add to the cart, pay, and wait for it to be delivered — but today, online platforms like Lazada have found that by providing entertainment within their app via games and livestreams is an effective way to engage with customers and turn their clicks into sales.

“If you make the shopping experience more interactive and engaging and more entertaining on e-commerce platform like Lazada, it’s a way for people not only to shop also play, watch, and essentially it’s a way to make them stay longer on the platform,” Neil Trinidad, Lazada Philippines’ chief marketing officer, said in an interview with BusinessWorld on July 24.

Lazada started introducing games and livestream content on its app last year and Mr. Trinidad noted that they’ve seen more sellers do livestreams, something that they’ve seen become commonplace in other platforms like Alibaba in China (Lazada is part of the Alibaba Group).

Livestream content can be from sellers and brands that want to introduce and promote their products to their viewers — these can be in the form of modelling or demonstrating the product or in the form of concerts, workout sessions, do-it-yourself videos, and game shows where shoppers can interact and engage and sometimes win vouchers or items. Lazada’s livestream content is under the LazLife category on the app.

“Livestream is now the new mainstream [in China]. In Alibaba, they’ve been doing thousands of livestreams [a day] and it’s really been sort of its own economy where brand sellers have been able to engage with their audience,” he explained.

The livestream function was added in March 2019 and its first offering was an online concert by English singer Dua Lipa.

In the Philippines, more than a hundred livestreams are conducted every day, and are steadily increasing, which Mr. Trinidad said is a testament to the format’s popularity and its effectiveness in turning clicks to sales.

“The key metrics we’re looking at livestreams is how many views you are getting. Views are very important,” he said.

A cursory look at the app on Sunday morning as this writer was writing this piece showed that there were 10 livestreams ongoing, each getting at least a hundred viewers with some approaching 200.

What’s interesting about these livestreams is that they cut across categories as Mr. Trinidad pointed out that sellers and brands from the electronic segment, fashion, home living, “and everything else” do go on livestreams to promote their wares. And livestreams have become an important part of selling itself as he said that it’s “a great way to build presence” and to introduce oneself to the market.

“We’ve seen that viewers who have watched a livestream returned [to the same store] the following day,” Mr. Trinidad said, adding that it makes it an effective way to get repeat traffic as 40% of those who viewed a livestream returned to the store the next day.

Such is the popularity of livestreams that Lazada created its own live show, Sing It!, where viewers can sing along with celebrities such as Karylle and Yael Yuzon. The show was created during the early days of the lockdown in March and continues every Saturday.

“We created the show while all of us were working from home. We did it in the span of five days,” Mr. Trinidad said. The shows are typically watched by around 80,000 people.

Other shows created by Lazada were Guess It (inspired by The Price is Right) which was introduced last year, and LazTalent, a reality show held in June searching for “the next livestream star,” with Lazada users getting the chance to win P50,000 and a livestream contract with the platform. Lazada also held a benefit concert called Lazada for Good in April for the benefit of frontliners during the pandemic. — Zsarlene B. Chua

PLDT defers plan to redevelop Makati property, cites pandemic

PLDT, INC. is putting on hold the plan to redevelop the company’s Ramon Cojuangco Building (RCB) in a prime spot in Makati City, its chairman said.

“Wala eh (None), that has been put on hold because of the pandemic,” said Manuel V. Pangilinan, who is also the chief executive officer of the telecommunications service provider, when asked for an update on the plan at a briefing on Aug. 6.

RCB is PLDT’s current headquarters in Makati City.

Mr. Pangilinan said last year the company was pushing through with its plan to redevelop its RCB and MGO (Makati General Office) building in Makati City.

He said Japan’s NTT Realty group was “very keen” to redevelop the two buildings.

If PLDT proceeds with the redevelopment of the buildings with NTT Realty, Mr. Pangilinan said the Japanese firm would provide the capital and its redevelopment experience for the project.

He said the company would need one or two local partners that have experience in the Philippines.

PLDT expects to spend P70 billion for its network rollout this year.

The company’s second-quarter attributable net income grew 15.8% to P6.37 billion from P5.5 billion reported in the same period last year, driven by the surge in data and broadband revenues.

“Our strong performance will allow us to further boost our already significant investments. These investments, which total some P260 billion over the past five years, enabled our networks to carry all the additional traffic during these past few months and also to bring new technologies such as 5G,” Mr. Pangilinan said at the briefing.

In the second half of the year, PLDT plans to focus on LTE expansion, transport or backhaul rollout, and ADSL upgrade to fiber.

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. — Arjay L. Balinbin

Durian industry pushing to be included in China trade deal amid weak domestic sales

DAVAO CITY — It’s durian season in Mindanao and growers are struggling to find a market for their produce — so they’ve set their sights on China.

“This is a major challenge in the fruit industry. Mahirap magpalabas ng mga prutas ngayon (It’s difficult to transport fruits nowadays),” Candelario B. Miculob, former president of the Davao City Durian Industry Council, said in an online interview.

While agricultural products are exempt from quarantine restrictions imposed to mitigate the spread of the coronavirus disease 2019 (COVID-19), Mr. Miculob said they are limited by available land transport services and flights.

Fewer people are going out and social gatherings are still banned or discouraged in many areas, he said.

The annual Durian Festival, held every August to September alongside the Kadayawan Festival in Davao City, is not happening this year after the local government suspended all major events for the rest of 2020.

In the Davao Region, durian growers typically harvest up to 48 metric tons each season.

There are at least four processing plants in the region that can make frozen packs from the fresh produce.

Mr. Miculob said the industry’s sales dropped after the April and May harvest, when a strict form of lockdown was in place nationwide.

The plunge in domestic demand, he said, highlights the industry’s continued push for the government to have durian included in the bilateral trade deal with China — which growers have been calling for since at least 2016.

That year, the industry was able to ship four 40-foot container vans of frozen durian to China, but coursed through accredited countries such as top exporter Thailand.

“We are hoping that the accreditation of Philippine durian to China will materialize soon for us to be able to export to China. Ang pag-asa namin ay sa labas (Our future is in export),” he said.

Mr. Miculob added that having the accreditation will open the door for foreign investors to set up more processing plants in the region.

In 2018, he said, Chinese traders expressed interest in procuring volumes that exceeded local output.

“There is no limit in terms of volume requirement. The only problem is we have limited processing capacity. It is easier to export and it is also advantageous for us,” he said.

Thailand exported $567.29 million worth of durian to China in the four months to April, according to a July 27 Bangkok Post report citing government data.

Malaysia received accreditation for frozen durian to China last year.

For the Philippines, fruits with current access to the Chinese market include banana, avocado and coconut. — Maya M. Padillo

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