Balance of payments back to deficit
By Luz Wendy T. Noble, Reporter
THE Philippines’ overall balance of payments (BoP) position posted a deficit of $1.39 billion in May, as the government repaid some of its foreign debt obligations.
Data from the Bangko Sentral ng Pilipinas (BSP) showed the BoP position in May was a reversal from the $2.43-billion surplus in May 2020 and the $2.614-billion surplus in April.
May’s BoP deficit is also the biggest since the $2.019-billion shortfall in February.
“The BOP deficit in May 2021 was mainly attributed to outflows arising from the foreign currency withdrawals of the National Government (NG) from its deposits with the BSP as the NG settled its foreign currency debt obligations and paid for various expenditures,” the central bank said in a statement.
However, the outflows were partially offset by inflows from the central bank’s foreign exchange operations and external borrowings of the National Government.
The BoP provides a picture of the country’s transactions with the rest of the world. A deficit means more funds left the country, while a surplus show that more money came in.
At its end-May position, the BoP reflects a final gross international reserves level of $107.25 billion, down by 0.42% from the $107.71 billion as of end-April.
The dollar reserves in May are enough to cover 12.2 months’ worth of imports of goods and payments of services and primary income. It is also about 7.9 times the country’s short-term external debt based on original maturity and 5.2 times based on residual maturity.
In the January-May period, the BoP deficit reached $1.627 billion, a reversal of the $4.029-billion surplus during the same period a year ago.
“Based on preliminary data, this cumulative BoP deficit was partly attributed to wider merchandise trade deficit and net outflows of foreign portfolio investments,” the central bank said.
The BSP last week revised its BoP surplus projection to $7.1 billion this year. This is higher than its previous forecast of a $6.2-billion surfeit, but lower than the $16-billion record BoP surplus in 2020.
Analysts said they are keeping an eye on the extent of the economy’s reopening in the coming months, as well as the Federal Reserve’s hints at tightening policy.
“With looser curbs locally, there is a potential for a wider trade deficit as the imports sector rebounds, while a hawkish US monetary policy could mean a persistent financial outflow. Therefore, a BoP deficit and peso depreciation appears more plausible by yearend given the current scenario,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message that he expects upside risks of more net outflows of foreign investments, as investors will likely move to developed country’s markets once the Fed tightens monetary policy.
Mr. Asuncion added the recent current account data may also be indicative that the BoP position will remain at a deficit in the coming months.
The current account includes flows related to trade in goods and services; remittances from overseas Filipino workers; profit from Philippine investments abroad; interest payments to foreign creditors; as well as gifts, grants and donations to and from abroad.
The current account in the first quarter of the year posted a deficit of $614 million, reversing the $225-million surplus a year earlier, the BSP said on Friday. This was supported by continued import growth as the economy gradually reopens.
P2.1-B income lost daily during MECQ, says Chua
AS MUCH as P2.1 billion in income was lost in Metro Manila and nearby provinces for each day of modified enhanced community quarantine (MECQ) in April and May, according to the National Economic and Development Authority (NEDA).
NEDA Secretary Karl Kendrick T. Chua said the looser quarantine restrictions helped temper the losses, which are significantly lower than the P2.8 billion a day or total of P1 trillion in income lost during the longer and stricter lockdowns in 2020.
“That is why this year, we have to think very well the strategy, I think the strategy, which the economic team supports, is not to impose general or widespread levels of quarantine. Our strategy should be addressing only the biggest source of risk for spreading the virus and allowing the rest of the economy to operate,” Mr. Chua said at the forum arranged by the Employers Confederation of the Philippines (ECoP).
The NEDA chief stressed the need to fast-track the vaccination of workers to further reopen the economy.
Mr. Chua said the 6-7% growth target for 2021 and 7-9% next year can be achieved if the economy is reopened, the mass vaccination campaign picks up pace and recovery measures are implemented efficiently.
The government has vaccinated 8.4 million Filipinos so far since the rollout began in February, he said, adding this would help boost consumer confidence.
“Nothing will move if there is no confidence, and that is why we have to work hard on our vaccination program… Hopefully we can vaccinate as many workers as we can in the next few months,” the NEDA chief said.
“If workers are vaccinated, they bring home much less risk to their family members, and I personally can see schools opening, because those that we want to protect, the senior citizens, people with comorbidities and the workers who commute to go to the office, are much more protected,” he added.
Mr. Chua has been proposing to allow children to go out and let schools conduct pilot test of face-to-face classes to help the economy rebound faster.
NEDA estimates showed around 102,000 more Filipinos could join 19.7 million people in poverty if another two-week ECQ will be imposed.
Further, 252,000 more will add to the 4.9 million unemployed Filipinos if restrictions will be tightened anew, according to his presentation.
The Health department reported 4,353 new cases on Wednesday, bringing the country’s total number of active cases to 49,962.
The government extended the general community quarantine status in Metro Manila and nearby areas until the end of the month, as the number of COVID-19 cases have declined from the peak in April.
More people have also been added to the vaccination priority list, as more COVID-19 vaccine supplies arrive. — Beatrice M. Laforga
PHL firms urged to localize sustainability criteria
By Jenina P. Ibañez, Reporter
PHILIPPINE COMPANIES must evaluate their sustainability practices based on local needs that can sometimes be distinct from the requirements of developed countries, sustainability practitioners said.
“Make sure that you localize these issues. We’re not a developed country, so I don’t think that we necessarily have to follow standards set by countries that have already stopped growing and are no longer in need of economic growth,” Aboitiz Equity Ventures Senior Vice-President Manuel R. Lozano said in a BusinessWorld Insights forum on Wednesday.
Firms follow a set of environment, social, and corporate governance (ESG) criteria that assesses their performance in protecting the environment, managing relationships with employees and communities, and ensuring transparent governance.
Business representatives at the forum said that these criteria have become more important for stakeholders and investors in recent years.
“If you asked us maybe a year ago, you would have maybe a few meetings where investors ask us about ESG, mainly those from Europe and a little bit from the United States,” PLDT, Inc. Investor Relations and Corporate Sustainability Office Head Melissa V. Vergel de Dios said.
“As the year passed, we’ve seen a lot of fund managers ask more about sustainability and what we’re doing in the areas of ESG, and to varying degrees… I guess it’s becoming important now for fund managers more and more to make sure that the companies that they’re investing in will carry on many years from now.”
ESG criteria should be adapted to issues that are unique to the Philippines, the experts said.
The Philippine environment is distinct, with expansive mangroves and rainforests that need to be protected, Ms. Vergel de Dios said.
“(There are also) activities that may also be present in the Philippines like illegal logging that we can address, in our case using technology,” she said.
European countries set sustainability goals and best practices, BDO Unibank, Inc. Vice-President for Sustainability Marla Garin-Alvarez said.
“The one thing we always think about in the Philippine context is, geographically we are in a very disaster-prone area which impacts anything else that has to do with the environment and social impact to the people,” she said.
Social inequality in the Philippines is also distinct from other countries, she added.
“And then there are also the sources of energy. In Europe, they don’t really have a lot of solar power sources, but that’s what we have in abundance in the Philippines.”
Maria Yolanda “Yoly” C. Crisanto, chief sustainability officer at Globe Telecom, Inc., said that differences in levels of adoption, culture, and enablement lead to a need for strong partnerships between the private and public sectors.
“Government can also include enabling laws, some more incentives in terms of more sustainability-linked businesses,” she said. “There’s a lot of sustainability-linked businesses that are sprouting everywhere, especially in areas like the more advanced countries. That’s something that we can think about.”
SEC drafts arbitration rules for intra-corporate disputes
By Keren Concepcion G. Valmonte
THE SECURITIES and Exchange Commission (SEC) has proposed guidelines on the arbitration of disputes within corporations.
“Section 181 of the Revised Corporation Code (RCC) now allows arbitration,” SEC Commissioner Kelvin Lester K. Lee said in a private message sent via Twitter. “So this is prepared in accordance with that provision and to allow the commission to implement that provision.”
Under Section 181 of Republic Act No. 11232 or the RCC, a domestic corporation can include an arbitration agreement in its articles of incorporation or by-laws, or as a separate document. Once this is in place, any intra-corporate dispute will be referred to arbitration.
This will be used to address disputes among the corporation, its stockholders or members, arising from the implementation of the articles of incorporation or by-laws, or from intra-corporate relations.
However, any intra-corporate dispute that involves criminal offenses and interests of third parties shall be nonarbitrable.
Under the proposed rules, the arbitration agreements must enumerate the number of arbitrators who will form the tribunal and include the name of the independent party who chose them, as well as the appointment procedures.
Arbitrators must be accredited by the Office for Alternative Dispute Resolution or by organizations authorized by the said office or the SEC. Arbitrators must be appointed within a specified timeframe.
“Any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to his or her impartiality or independence,” the draft circular said.
Should the period for appointing arbitrators lapse, parties of the dispute may request the commission to appoint members to the tribunal. The draft circular also details the procedures the SEC will undertake, including sending each party the list of its candidates.
“The arbitral tribunal shall have the power to grant interim measures necessary to ensure enforcement of the award, prevent a miscarriage of justice, or otherwise protect the rights of the parties,” the SEC said.
The decision of the tribunal must be carried out within 15 days after parties of the dispute have been notified. It shall only be suspended by the filing of a bond or the issuance by the concerned court of an injunctive writ.
“I personally anticipate, that, moving forward, more corporations will have provisions on arbitration once the rules are approved and implemented, which would in effect help minimize court cases as more corporations will, hopefully, engage in arbitration instead,” Mr. Lee said.
Under the draft rules, regional trial courts should dismiss cases related to an intra-corporate dispute if a company has an arbitration agreement.
“Exceptional cases” may be exempt from the rules, the corporate regulator added.
The SEC is now requesting the public to comment on the draft memorandum.
NCIP issues halt order to 3 Hedcor hydro plants
A REGIONAL office of the National Commission on Indigenous Peoples (NCIP) has issued a halt order to a unit of Aboitiz Power Corp. that operates three hydroelectric power plants in Benguet province for alleged issues in obtaining consent from indigenous tribes.
In a stock exchange disclosure on Wednesday, AboitizPower said a cease-and-desist order was issued by the NCIP Cordillera Administrative Region (CAR) claiming “irregularities” in the free prior informed consent (FPIC) memorandum of agreement (MOA) signed by its unit Hedcor, Inc. and the Bakun Indigenous Tribes Organization on Oct. 15, 2019.
The affected plants in the province’s Bakun town are the 2.4-megawatt (MW) Lower Labay, 3.6-MW Lon-oy, and 5.9-MW FLS hydro facilities, which the NCIP-CAR wants Hedcor to shut down within five days after it receives the order.
Hedcor said it had complied with all the conditions when it sought the FPIC.
“We believe that we have been compliant with all the requirements during the course of the FPIC application process, and have been waiting for the issuance of the Certificate Precondition (CP) since the FPIC-MOA was signed,” Hedcor’s Vice-President for Corporate Services Noreen Marie N. Vicencio said in a statement.
The certificate is issued by the NCIP and signed by its chairperson, affirming the concerned communities’ consent after compliance with requirements.
Hedcor said it was saddened by the order to shut down its hydro operations in Bakun as it had made efforts to come into a dialogue with the indigenous tribes and the NCIP.
“At this time of a red alert situation in the Luzon grid, the continued operation of our plants is very crucial,” Ms. Vivencio said.
Hedcor said it would continue to actively reach out to the community for a customary tongtongan or a dialogue with the tribes, under the NCIP’s guidance.
BusinessWorld reached out to the NCIP’s regional office, which confirmed receipt of the questions via e-mail, but has not yet replied as of press time.
In 2012, the NCIP said that “no concession, license, permit or lease, production-sharing agreement, or other undertakings affecting ancestral domains shall be granted or renewed if they do not go through the process set by the law and the 2012 guidelines on the FPIC and related processes.”
Hedcor manages and operates 21 hydropower plants while supplying the country with 258 MW of renewable energy.
Shares in Hedcor’s parent firm AboitizPower inched down by 1% or 25 centavos to finish at P24.65 apiece on Wednesday in the local bourse. — Angelica Y. Yang
Telus opens Iloilo site, plans to hire 800 employees
OUTSOURCING firm Telus International Philippines has launched its first site outside Metro Manila as it eyes hiring 800 employees at its new Iloilo office.
Carlos Giammattei, Telus Philippines marketing director, said at a virtual launch on Wednesday that the Iloilo City site now has over 350 trainees.
“Very soon, we will be at the 800 mark,” he said.
The company has a local work force of over 18,000 people working on customer experience, digital solutions, and information technology. The Iloilo City office is its seventh local site.
Mr. Giammattei said that the company is open to further expansions outside the capital.
“We are always looking for opportunities. Based on our business, based on our growth, and finding the right place where we wanna go is gonna be very critical in deciding when and where we (will) have our second site out of Metro Manila,” he said.
“We have expansion plans, but it all depends on the flow of business and what type of work is coming in.”
The company is still evaluating how much remote or on-site work it will retain in the long term as it assesses government regulations, customer needs, and employee concerns.
The outsourcing industry was allowed by the government to retain some on-site operations during the strictest part of the lockdown declared to arrest the spread of the coronavirus disease 2019 (COVID-19).
The country’s outsourcing revenue rose just 1.4% to $26.7 billion last year from the 2019 figure, the Information Technology and Business Process Association of the Philippines (IBPAP) said.
To compare, the sector’s revenues jumped 7.1% in 2019, beating industry targets. — Jenina P. Ibañez
Nokia sees PHL making rapid progress toward 5G
MULTINATIONAL telecommunications company Nokia Corp. said on Wednesday fifth-generation (5G) technology rollouts continue to gain momentum in the Philippines despite the pandemic crisis.
“Even with the socio-economic challenges caused by the ongoing COVID-19 (coronavirus disease 2019) situation, 5G adoption across Southeast Asia continues to gain momentum. This is evidenced by the Philippines as one of Southeast Asia’s first countries to roll out 5G — meaning that the nation’s industries, enterprises and people are especially poised to tap into the growth and innovation prospects that the next generation of connectivity holds,” Carlos Reyes, Nokia’s head in Philippines, said at a virtual briefing.
In his presentation, Mr. Reyes said that some of the major industries that would be highly impacted by 5G are ports, mining, and smart cities.
Philippine telecommunications companies are currently accelerating the rollout of their 5G services across the country.
Nokia has partnered with DITO Telecommunity Corp. for the delivery of 5G services to customers in Mindanao.
It also signed a memorandum of understanding with NOW Corp. to roll out a 5G standalone network and explore new opportunities in industrial and manufacturing use cases.
Nokia said it also has a 5G deal with Globe Telecom, Inc.
5G is set to be a game changer for the Philippines’s industries and enterprises. It represents a significant evolution over current LTE solutions, as this next generation in connectivity will empower organizations to achieve the new levels of reliability, security, multi-user capacity performance, and mobility needed for them to make the best utility out of Industry 4.0 technologies and applications,” Mr. Reyes explained.
“5G also builds on LTE vertical differentiating capabilities — with crucial enhancements specifically relevant for industry — to enable it to unlock unprecedented productivity gains and connect all elements of industries and enterprises,” he added.
Nokia currently has 20 commercial 5G deals in Asia-Pacific and Japan.
It is also working with the Philippines’ Converge ICT Solutions, Inc. for the internet service provider’s “ultra-broadband” services.
“Nokia is also collaborating with mobile operator PLDT and its subsidiary Smart Communications to launch enterprise-specific Internet of Things (IoT) services across the country and the deployment of comprehensive service orchestration and assurance solutions across PLDT’s and Smart Communication’s nationwide network,” the company added. — Arjay L. Balinbin
Britney Spears case throws spotlight on complex conservatorships
POP star Britney Spears has been under a court-appointed conservatorship, or guardianship, since 2008. On Wednesday, she is due to make a personal address to the Los Angeles judge who is handling the conservatorship.
Here is how a conservatorship works in California:
What is a conservatorship?
A court-approved arrangement in which a person or organization is chosen to protect and manage the personal care and/or finances of a person whom a judge has found to be unable to manage his or her own affairs.
In what circumstances is a conservatorship approved by the courts?
When someone needs help taking care of his or her daily needs, managing their finances, or gives away large sums of money to strangers. Many are elderly people, or developmentally disabled, or people with temporary or permanent mental or physical disabilities. Details about the personal health of the conservatee is not made public. A court-appointed investigator is required to make a personal visit and submit a status report about the conservatorship every two years.
What are the duties of a conservator?
A conservator can be a relative, friend, or professional entity. Duties include deciding where the conservatee will live, making arrangements for their health care, housekeeping, transportation, managing finances, paying taxes and bills, making investments, protecting assets, accounting to the court for management of finances and reporting to the court on the status of the conservatee. Any changes require court approval.
Who are the conservators in the Britney Spears case?
The singer’s father Jamie is a joint conservator of her personal affairs with care manager Jodi Montgomery. Jamie Spears is also a joint conservator of her financial affairs with financial firm Bessemer Trust. Ms. Spears has an attorney to represent her. In 2020, Ms. Spears began her attempts to remove Jamie Spears as her personal conservator.
How much freedom does a person under a conservatorshp have?
Restrictions are determined by the court depending on individual circumstances. Since 2008, Ms. Spears has performed multiple concerts, been on several tours, recorded several albums, goes shopping, posts frequently to her Instagram account, has a boyfriend, gets an allowance and has gone on vacation.
How can a conservatorship be brought to an end?
The conservatee, or a relative or friend, can ask the judge at any time to end the conservatorship. A court appointed investigator would evaluate the case and hear from all sides. The conservatee must prove they can handle their own personal and financial affairs. The judge would make a decision. Ms. Spears has not made such a request. The court can remove a conservator who is failing to perform their duties and appoint a new one.
Why has the britney spears case attracted so much attention?
It is unusual for someone of Ms. Spears’ age and high profile to have been under such an arrangement for 13 years. Details of her mental health issues have never been revealed. The fan-based #FreeBritney movement, started in 2019, believes Spears is being held against her will and that she is sending cryptic messages through her Instagram postings. The 2021 TV documentary Framing Britney Spears brought wider attention to the case.
What is Britney Spears expected to say on Wednesday?
Neither Ms. Spears nor any of the attorneys in the case have said what the singer plans to speak about. She is not expected to attend the Los Angeles court in person but to speak via audio and/or video link. The last time she spoke to the judge, in May 2019, the hearing was closed to the public and her testimony was sealed. — Reuters
PNB Holdings to redevelop prime properties
PNB Holdings Corp. will redevelop its prime real estate assets to maximize their value amid the demand for rental space, it said on Wednesday.
In a statement, the company said it would work on improving the gross leasable area of the PNB Financial Center located in Pasay City, which spans 10 hectares, and the PNB Makati Center in Makati City’s central business district.
“We are excited [about] planning for the redevelopment of our properties in Makati and Pasay as we see a very huge growth potential in these areas,” Karlu Tan Say, president of PNB Holdings and chief executive officer of Eton Properties Philippines, Inc., said.
The company will look to further enhance the developments to serve the market in “the new normal.”
“While we are cautious of the economic environment, we also remain optimistic that the ongoing vaccine rollout and the health and safety protocols in place will prompt the imminent reopening of the local economy,” Ms. Tan Say said.
PNB Holdings said it expects a “significant increase” in profits by the end of the year from its 2020 net income of P200 million. — Keren Concepcion G. Valmonte
You can now have what the BTS boys are having
(but hold on to the sauce — it might be worth a mint)
AWARD-winning boyband BTS — we’re talking the American Music Awards, the South Korean Order of Cultural Merit, and the Guiness World Records, among other recognitions — apparently have a hankering for 10 pieces of Chicken McNuggets, medium fries, and a medium Coke. Since last week, Filipino fans have been able to enjoy the same thing the boys (namely Jin, Suga, J-Hope, RM, Jimin, V, and Jungkook) like to order.
The BTS Meal, available from June 18 until supplies last, is pinned on the McDonald’s Famous Orders program. Previous collaborations were with rapper (and Kylie Jenner’s ex) Travis Scott and singer J Balvin. The Famous Orders program was launched last year, with a Superbowl commercial featuring the favorite orders of several celebrities (from the commercial, we found out Kim Kardashian likes six-piece chicken McNuggets, a cheeseburger, a vanilla shake, an apple pie, small fries, and honey dipping sauce).
“No matter who you are, everyone has a favorite McDonald’s order — even some of the biggest celebrities,” said Assistant Vice-President of Marketing and Channels for McDonald’s Philippines Oliver Rabatan during an online press conference the day before the release. “BTS are longtime brand fans, who, no matter where they travel… enjoy McDonald’s.”
The BTS meal was launched in the US last year, and has gone on to be present in over 50 markets. The nuggets-and-fries combo come with a limited-edition spicy cajun sauce and sweet chili sauces, which, according to the brand, are based on “popular recipes” from McDonald’s South Korea.
The BTS meal arrived to the Philippines amid much fanfare: the week before the release, McDonald’s got their restaurant crew together for a BTS TikTok challenge. Earlier this week, McDonald’s BTS-themed photobooths were placed in some stores. On a more philanthropic note, McDonald’s gave a first taste of the much-awaited offering to healthcare workers prior to the June 18 launch. Through McDonald’s Kindness Kitchen, over 2,000 BTS Meals were distributed to select hospitals and vaccination hubs.
BusinessWorld snagged the meal last week and got the familiar snack of nuggets and fries (P270). It all comes down to the sauces, ranking the creamy Cajun sauce, with its spicy-creamy notes, our own favorite (the sweet chili sauce tasted — well, like sweet chili sauce, and nothing much else). We’d petition McDonald’s to keep the Cajun sauce a store staple if we could.
Of course, aside from having what the boys are ordering, the fans are crazy about the BTS-themed packaging. Using the band’s signature color — a light purple — the global giant fast-food brand splashed the McDonald’s nugget box, the paper cup, and the paper bag with the BTS logo and colors. Some fans have already taken to social media to show off what they’ve done with their merch: cellphone cases, journals, and toys. “Now we’re excited to give BTS fans a new way to connect with their favorite band through the McDonald’s food they love,” said Mr. Rabatan.
PS: Hold on to your sauces. In 2018, a sachet of McDonald’s Szechuan Sauce from 1998 (following a push from cartoon Rick & Morty) sold for about $14,700.* The seller had found it in an old car he had bought. Due to the publicity from the cartoon’s mention (and the sauce’s sale), McDonald’s briefly brought the sauce back. Current prices on eBay for the sauces range from $5 to $300. Who knows? In the future, one might be sitting on a gold mine — thanks to the boys.
For now, the boys of BTS are saving fans a bit of money. If one orders the BTS Meal through the McDelivery App from June 25 to 27, only ₱7 will be charged as the delivery fee (terms and conditions apply). — Joseph L. Garcia
*https://time.com/4744570/mcdonalds-szechuan-sauce-ebay/
Cisco Philippines unveils innovations for ‘inclusive’ hybrid work
CISCO Philippines announced Wednesday the new features added to its communication and collaboration tool Webex, aimed at making the hybrid work and events more “inclusive.”
“At the core of what we do at Cisco is our drive to deliver innovations in technology that can create pathways to economic prosperity for all, continue to connect the unconnected, and bring the ecosystem around our business along with us to a future that is inclusive, where no one is left behind,” Cisco Philippines Managing Director Karrie C. Ilagan said at a virtual briefing.
“We are bringing innovations to our portfolio with that in mind, and with Webex Suite, everyone has a seat at the table, everyone’s voice can be heard, and it’s a platform where discussions are made equitable,” she added.
Cisco said it expects 98% of future meetings to include at least one remote participant. The transition necessitates companies or organizations to invest in more than just a traditional meeting room.
The hybrid work and events setup, Cisco noted, is already at work in the country. The Health department alone has conducted 17,400 sessions via Webex over the past year, amounting to more than 2.3 million minutes of meetings and consultations, the technology company reported.
Among the latest advancements added to Webex include “Increased Value,” which combines meetings, calling, messaging, polling and events in one offering.
Another feature is the “End-to-End Events,” a complete events execution and management platform.
Cisco also added new audience interaction tools such as polling, quizzes, and Q&A.
Webex users will have the new ability of speech optimization “for remote and shared workspaces through My Voice Only to eliminate background noise, including speech from people in the background, and solely focus on the main speaker’s speech,” the company said.
My Voice Only will be available worldwide in August this year. — Arjay L. Balinbin