IBM pledges to achieve net-zero greenhouse gas emissions by 2030 to address the global climate crisis. The data centers that power the internet consume vast amounts of electricity and emit as much carbon dioxide as the airline industry, according to a 2018 Yale University article.
To achieve its net-zero goal IBM will: reduce its greenhouse gas emissions 65% by 2025 against base year 2010; procure 75% of the electricity it consumes worldwide from renewable sources by 2025, and 90% by 2030; and use feasible technologies—such as carbon capture—in or by 2030, to remove emissions in an amount which equals or exceeds the level of IBM’s residual emissions.
The majority of the company’s greenhouse gas emissions comes from its electricity consumption, said Edan T. Dionne, vice-president, Environmental, Energy and Chemical Management Programs with IBM’s Corporate Environmental Affairs staff, in an e-mail interview with BusinessWorld.
“Our data center operations have the greatest demand for electricity, followed by locations where we perform research, development, and manufacturing operations,” she said. “The spaces with least energy intensity are our offices/administrative buildings.”
To neutralize its residual emissions, IBM will have to depend on the carbon removal technologies available in the 175 countries it serves, each of them having varying renewable generation infrastructure.
“In countries that lack either government policy or capacity to support renewables, it will be more challenging for us to increase our renewables consumption,” said Ms. Dionne, “but we are committed and are confident that we will meet our goal.”
IBM Research also launched a Future of Climate initiative designed to accelerate the discovery of solutions to address the impacts of a changing climate. Researchers use a combination of artificial intelligence, hybrid cloud, and quantum computing to help solve climate-related problems and develop new materials that can absorb carbon at the origin of emission.
“The climate crisis is one of the most pressing issues of our time. IBM’s net-zero pledge is a bold step forward that strengthens our long-standing climate leadership and positions our company years ahead of the targets set out in the Paris Climate Agreement,” said Arvind Krishna, chairman and chief executive officer of IBM, in a statement. — Patricia B. Mirasol
PHNOM PENH – Cambodian Prime Minister Hun Sen received on Thursday a shot of the AstraZeneca COVID-19 vaccine supplied by India, about three weeks into the launch of his country’s inoculation programme, which initially relied only on Chinese vaccines.
Mr. Hun Sen, 68, had vowed to be the first to receive the Sinopharm vaccine donated by China, but later said he was too old. His sons and the justice and environment ministers were among the first to get it instead.
China is one of Cambodia’s closest allies, and Hun Sen dismissed public hesitance about the safety of the Sinopharm vaccine.
“The Chinese vaccine has gone to more countries than the AstraZeneca vaccine, even countries that are allies of the West also use the Chinese vaccines,” Mr. Hun Sen told a news conference after getting his shot.
He urged people below 60 to get the Sinopharm vaccine and those older than 60 to receive the AstraZeneca vaccine.
The Southeast Asian nation of about 16 million has reported among the lowest number of coronavirus cases and no deaths, though last month saw a rise in cases that took the cumulative total detected to 909.
Cambodia received its first batch of 324,000 doses of the India-made AstraZeneca vaccine and supplied through the World Health Organization-backed COVAX vaccine-sharing programme on Tuesday.
India and China have been engaged in vaccine diplomacy to bolster their standing in the region, with both donating shipments to smaller and poor countries.
China’s first consignment of 600,000 doses of the Sinopharm vaccine had arrived in Phnom Penh on Feb. 7 and an additional 400,000 doses are set to arrive in April. – Reuters
Nearly two million babies are expected to be born in the country this year, according to the Commission on Population and Development. This baby boom, more likely from the lower socioeconomic classes, will present opportunities for baby categories and FMCG for new mothers.
Baby products and bleach are likely to be in demand this year, according to data analytics firm Kantar, which identified shopping trends for 2021.
The demand for bleach grew 8% year to date in August 2020 versus 2019, while rubbing alcohol and hand sanitizers saw a combined growth of 93% in the same time period. According to Kantar, these disinfectants will remain “highly relevant” to Filipino households over the pandemic.
Meanwhile, an expected baby boom presents opportunities in the baby categories.
“The world continues to experience volatility and uncertainty due to the health crisis, and it is
therefore, difficult to predict Fast Moving Consumer Goods (FMCG) expenditures,” said Marie-Anne Lezoraine, general manager of the Worldpanel Division of Kantar Philippines. “The nature of our quarantine restrictions and our confidence in enjoying any mobility drastically changes our behavior as consumers and shoppers.”
She added that the deployment of coronavirus disease 2019 (COVID-19) vaccines should boost consumer confidence, but also advised patience. “It may still be some time before we see that full impact on purchase behavior, however, as shoppers are likely to remain cautious in going out for some time (by choice or by policy). Purchase power may also take time to recover,” Ms. Lezoraine said.
The top consumer trends, according to Kantar, are:
Baby boom
Nearly two million babies are expected to be born in the country this year, according to the Commission on Population and Development. This baby boom, more likely from the lower socioeconomic classes, will present opportunities for baby categories and fast-moving consumer goods (FMCG) for new mothers.
Cautious spending
Throughout the pandemic, most households have cut their FMCG expenditure to manage their budgets. Based on Kantar’s Purchase Confidence Study in July 2020, 79% expressed worry about their financial situation. Value for money is the name of the game as Filipino shoppers focus on making the most of their budget.
E-commerce expansion
Online shopping remains nascent in the Philippines despite the disruption experienced by brick and mortar stores due to the pandemic. Based on Kantar’s findings, only 8% of the population purchased FMCG online in 2020. The channel is growing, with 772,000 additional buyers, although it currently remains skewed toward the higher socioeconomic classes as well as shoppers in the National Capital Region (NCR). Brands must not underestimate the differences in behavior and basket content of online vs. offline consumers, Kantar said. E-commerce as a marketing touchpoint may also lead to offline purchases.
Leveraging omnichannel
Loyalty to one channel is almost non-existent. Filipinos continuously adapt their channel repertoire depending on their needs, reinforcing omnichannel shopping. Keeping the pulse of channel choices is critical as behavior has become more volatile.
Convenience and proximity of local retailers
Shoppers with limited mobility prefer proximity when visiting stores in their locality. Kantar noted that 9 out of 10 Filipinos prefer to shop in nearby stores, offering an opportunity for retailers to expand in or close to residential areas.
Relevance of antibacterial products
Unsurprisingly, antibacterial products have been highly relevant to Filipino households. However, as more and more brands leverage their virus-killing advantage, they need to step up their game and combine this essential function with additional benefits.
Emphasis on health and immunity
Brands should focus on the health and nutritional value of their products in order to attract Filipino consumers.
Continuing preference for convenience
In 2021, Filipinos are likely to increase their mobility assuming that quarantine restrictions will be eased across the country. However, Filipinos will remain very cautious in venturing out and may seek convenience and versatility as their lifestyles continue to evolve. Brands must be able to adapt accordingly.
Recovery of impulse products
Assuming mobility stabilizes or improves, the recovery of impulse products could experience slow but sustained growth.
Improved performance in the personal care category
The personal care category, particularly beauty products, was drastically deprioritized when the Philippines implemented the enhanced community quarantine in March 2020. Similar to impulse categories, Kantar expects that the new year would see the slow return of the Filipinos’ beauty routine. This will still be subject, however, to improved mobility and the consumers’ aspiration for normality.
Regionalization of behaviors
Consumers in Visayas and Mindanao have smaller basket sizes but they shop more often. “Manufacturers should understand shoppers in their full complexity from a regional perspective and from a socioeconomic one,” said Ms. Lezoraine.
Sustainability
Kantar found that 75% of Filipino shoppers seek out brands that offer ways to offset their environmental impact. Most importantly, consumers see it as the role of manufacturers to drive the sustainability agenda. Developing a sustainability strategy has become paramount for brands moving forward.
“It is important to identify key targets, prioritize them based on how valuable they may be for your business, and activate it through the right pack, price, and channel strategy in order to reach more consumers more than a year into the pandemic,” said Ms. Lezoraine. — Patricia B. Mirasol
SEOUL – The death of South Korea’s first known transgender soldier, who was discharged last year for undergoing gender reassignment surgery, sparked calls from advocacy groups and activists for better protections and acknowledgement of transgender residents.
Byun Hui-su, 23, who was a staff sergeant before being discharged, was found dead by emergency officials at her home in the city of Cheongju, south of Seoul, on Wednesday.
“Byun’s death resonated even more with the public because the military and this society refused to acknowledge the change,” Rainbow Action Against Sexual-Minority Discrimination of Korea, an umbrella association of group of 40 sexual minority groups, said in a statement.
Byun’s bravery in coming forward had inspired and empowered others, the group said.
She went public when the military discharged her last year after having the operation in Thailand, and launched a lawsuit against senior officials.
“I want to show everyone that I can also be one of the great soldiers who protect this country,” Byun said at the time, breaking down in tears as she described her decision to undergo surgery and the subsequent clash with the military.
An initial military comment that it was not in a position to say anything regarding “the news of the death of a civilian” drew swift criticism on social media, and on Thursday a spokesperson offered official condolences, calling Byun’s death “unfortunate.”
The official said, however, that the military had still not had any detailed discussion on its policies toward transgender soldiers.
The case triggered debate in South Korea’s LBGT community over how transgender members of the military are treated in a country that requires all able-bodied men to serve for around two years.
Byun had said she still hoped to serve in the military in the future.
Entertainer Harisu, who made history as South Korea’s first transgender celebrity and only the second person to legally change their gender in the country, shared her condolences on social media. Amnesty International’s Seoul office praised Byun for mustering the courage to stand for a “world free of discrimination and hatred.” – Reuters
WASHINGTON – The U.S. House of Representatives passed a bill on Wednesday banning controversial police tactics and easing the way for lawsuits against officers violating suspects’ constitutional rights, although the measure’s Senate prospects were uncertain.
Democrats pushed the “George Floyd Justice in Policing Act” through the House by a vote of 220-212, with the support of only one Republican, just days before former Minneapolis police officer Derek Chauvin goes on trial on a state murder charge in the death of Floyd last year.
However, later on Wednesday evening, Representative Lance Gooden, the sole Republican who voted for the legislation, wrote in a post on Twitter that his vote had been a mistake and in fact he opposes the bill.
Floyd, 46, an African-American man, died when he was detained with Chauvin kneeling on his neck for nearly eight minutes. His killing sparked weeks of nationwide and global protests, many of which were led by Black Lives Matter activists.
“How many more people have to die, how many more people have to be brutalized on videotape” before police reforms become law, asked Democratic Representative Karen Bass, who wrote the legislation with House Judiciary Committee Chairman Jerrold Nadler.
The bill includes measures such as restricting certain funds to local governments that allow law enforcement officers to use choke holds, banning “no-knock warrants” that allow police officers to enter premises without announcing themselves and requiring law enforcement agencies to provide data on instances when police officers used deadly force.
Bass said the bill would hold police “accountable” when constitutional rights are violated but would also support local law enforcement by fostering improvements in community policing, especially for minority neighborhoods.
One of its most controversial provisions would change “qualified immunity” for police, further opening the door for lawsuits over the use of excessive force.
Reuters in May 2020 published an investigation revealing how qualified immunity, with the Supreme Court’s continual refinements, had made it easier for police officers to kill or injure civilians with impunity.
Conservative Republicans have attacked the Democratic bill, saying it would put law enforcement lives in danger and make communities less safe.
The police reform effort sputtered in Congress last summer after the House passed the so-called George Floyd bill and Democrats blocked a Senate Republican bill.
While the Republican bill also addressed issues such as police choke holds, no-knock warrants and use of police body cameras, Democrats complained it relied on incentives rather than mandating changes.
Senator Tim Scott, the author of the Republican bill, told Reuters in a statement he welcomed conversations with Democrats over qualified immunity. – Reuters
March 4 – Myanmar pro-democracy activists pledged on Thursday to hold more demonstrations after the United Nations said 38 people had been killed in the most violent day of unrest since last month’s military coup.
Police and soldiers opened fire with live rounds on Wednesday with little warning, witnesses said.
The bloodshed occurred a day after neighbouring countries had called for restraint in the aftermath of the military’s overthrow of the elected government of Aung San Suu Kyi.
“We know that we can always get shot and killed with live bullets but there is no meaning to staying alive under the junta so we choose this dangerous road to escape,” activist Maung Saungkha told Reuters.
“We will fight the junta in any way we can. Our ultimate goal is to remove the junta system from the roots,” said Maung Saungkha, who said his General Strike Committee of Nationalities group planned to hold a protest on Thursday.
Social media posts from other activists said at least two other demonstrations were also planned in parts of Yangon.
United Nations special envoy on Myanmar, Christine Schraner Burgener, said in New York that Wednesday was the “bloodiest day” since the Feb. 1 coup with 38 deaths, bringing the total toll to more than 50 as the military tries to cement its power.
A rights group and some media have given different numbers of wounded and killed after Wednesday’s violence. The dead included four children, an aid agency said. Local media reported that hundreds of protesters were arrested.
A spokesman for the ruling military council did not answer telephone calls seeking comment.
Ms. Suu Kyi’s National League for Democracy party said in a statement that flags would fly at half mast at its offices to commemorate the dead.
Schraner Burgener said she warned Myanmar deputy military chief Soe Win that the military was likely to face strong measures from some countries and isolation in retaliation for the coup.
“The answer was: ‘We are used to sanctions, and we survived’,” she told reporters. “When I also warned they will go (into) isolation, the answer was: ‘We have to learn to walk with only few friends’.”
The U.N. Security Council is due to discuss the situation on Friday in a closed meeting, diplomats said.
U.S. State Department spokesman Ned Price said the United States was “appalled” by the violence and was evaluating how to respond.
The United States has told China it expects Beijing to play a constructive role, the spokesman said. China has declined to condemn the coup, with Chinese state media calling it a “major cabinet reshuffle”.
The European Union said the shootings of unarmed civilians and medical workers were clear breaches of international law. It also said the military was stepping up repression of the media, with a growing number of journalists arrested and charged.
‘EVERYTHING WILL BE OK’
In Yangon, witnesses said at least eight people were killed on Wednesday, while local media reported six were killed in the central town of Monywa.
“I heard so much continuous firing. I lay down on the ground, they shot a lot,” protester Kaung Pyae Sone Tun, 23, told Reuters.
Save the Children said four children were killed including a 14-year-old boy who Radio Free Asia reported was shot dead by a soldier on a passing convoy of military trucks. The soldiers loaded his body onto a truck and left, according to the report.
Security forces breaking up protests in Yangon detained about 300 protesters, the Myanmar Now news agency reported.
Images of a 19-year-old woman, one of two shot dead in Mandalay, showed her wearing a T-shirt that read “Everything will be OK”.
Police in Yangon ordered three medics out of an ambulance and beat them with gun butts and batons, video broadcast by U.S.-funded Radio Free Asia showed. Reuters was unable to verify the video independently.
The military justified the coup by saying its complaints of voter fraud in the Nov. 8 vote were ignored. Ms. Suu Kyi’s party won by a landslide, earning a second term.
The election commission said the vote was fair.
Junta leader Senior General Min Aung Hlaing has pledged to hold new elections but given no time frame.
Ms. Suu Kyi, 75, has been held incommunicado since the coup but appeared at a court hearing via video conferencing this week and looked in good health, a lawyer said. – Reuters
Philippine seismologists on Thursday raised an alert on the Mount Pinatubo volcano in the main Luzon island.
“There is low-level unrest that may be related to the tectonic processes beneath the volcano,” the Philippine Institute of Volcanology and Seismology (Phivolcs) said in an advisory.
While no imminent eruption is foreseen, it advised the public to avoid entry into the crater area.In 1991, Mount Pinatubo erupted after lying dormant for more than 600 years. Since Jan. 20, more than 1,700 earthquakes were recorded beneath its edifice, the agency said. — Bloomberg
Acid reflux is a disorder that occurs when there is a backflow of stomach acid into your esophagus. The acid irritates the lining of your esophagus, causing a painful, burning sensation in your chest.
Symptoms of acid reflux
• A painful burning sensation in your esophagus, especially during and after eating
• Worsening chest pain when lying down
• Pain when swallowing
• Sour liquid being regurgitated at the back of your throat
• The feeling of an object stuck at the back of your throat
Can stress cause acid reflux?
Stress increases acid production, which can increase the likelihood of experiencing acid reflux symptoms. This condition can be made worse if you react to stress by taking stimulants such as caffeine-based beverages, which tend to increase the incidence of reflux symptoms.
Treatment for acid reflux
Acid reflux is a relatively easy condition to treat as medication is easily available and effective. Here are some of the treatments you may be advised to take for acid reflux:
Antacids
Antacids are over-the-counter medications that neutralize stomach acid to relieve the pain of acid irritating your esophagus. However, while antacids help you feel more comfortable in the short term, they can’t heal the esophagus from acid damage. It is also important to note that the over-consumption of antacids may cause adverse side effects like loose stools or kidney complications.
Acid reducers
Acid reducers decrease the amount of acid the stomach makes. This protects the esophagus, stomach, and intestines from getting damaged. It can also help to heal damage caused by inflammation of the esophagus. Examples of the 2 types of acid reducers are H2 blockers and proton pump inhibitors.
H2 receptor blocker
The active ingredient in H2 receptor blockers inhibits the cells in the stomach from producing acid. In a day, they can reduce stomach acid production by up to 70%. As a result, the irritated esophagus lining will have more time to heal. Cimetidine, famotidine, and ranitidine are all different types of H2 receptor blockers. This group of medications, however, can cause bowel complications like constipation and diarrhea.
Proton pump inhibitor
This group of medications works similarly to H2 receptor blockers, except that they are much stronger, reducing acid production for longer periods of time. Pantoprazole, rabeprazole, lansoprazole and omeprazole are examples of proton pump inhibitors.
Endoscopy
If medications do not alleviate your symptoms, endoscopy is usually recommended to evaluate the extent and other possible causes for the symptoms. Endoscopy also enables the taking of tissue samples from the esophagus to make sure that a severe form of gastro-esophageal reflux disease called Barrett’s esophagus has not developed. Barrett’s esophagus is a condition that increases the risk of developing esophageal cancer.
Surgery
If medications do not alleviate your symptoms, surgery may be recommended as a last resort. A fundoplication is a minimally invasive procedure commonly done to treat chronic heartburn. In this procedure, the top part of the stomach is wrapped around the base of the esophagus to tighten the sphincter, reducing the incidence of acid reflux. Your surgeon can operate on the outside by looking through a tiny camera inserted through a few small incisions.
Symptoms of peptic ulcer disease — photo from https://www.mountelizabeth.com.sg
What is peptic ulcer disease?
Peptic ulcers occur when stomach acid erodes your digestive tract’s own protective mucus lining. This leads to painful, open sores in the lining of your stomach (gastric ulcer) and the upper part of your small intestine (duodenal ulcer).
Symptoms of peptic ulcer disease
• Pain in the upper abdomen
• Heartburn
• Dizziness
• Feeling full quickly when eating
• Worsening pain between meals
Rarely, more severe symptoms may occur:
• Vomiting blood
• Black stools
• Unintentional weight loss
Can stress cause ulcer disease?
The role of stress as a cause of peptic ulcers remains controversial because of difficulties associated with quantifying stress in different people. However, several studies tracking ulcer occurrence in a defined population have linked certain types of stresses to the risk of developing ulcers. These stresses include depression, work-related stress, social problems and post-traumatic stress disorder.
Treatment for peptic ulcers
Peptic ulcers can usually be treated in a similar way to acid reflux by using medication to neutralize or reduce acid in the stomach. However, other approaches may be necessary. Some of the additional recommended medications can include:
Antibiotics
Helicobacter pylori is a common bacteria that can cause peptic ulcers. Once your doctor has determined that you have the bacteria present in your system, they will prescribe a suitable regimen of antibiotics to kill the Helicobacter pylori bacteria.
Cytoprotective agents
This medication increases mucus production in the stomach and increases the flow of blood throughout the digestive tract. The active ingredients form a coat to protect the ulcers in the stomach from further irritation and allow them to heal.
Endoscopy
Peptic ulcers are usually diagnosed during upper gastrointestinal endoscopy. Endoscopy is useful as samples can be taken from the stomach to ensure that the ulcer is not cancerous. Bleeding from peptic ulcer disease is usually treated by endoscopy. The doctor will identify the site of bleeding in the stomach or small intestine and apply clips to stop the bleeding.
Surgery
In very severe cases of peptic ulcer disease, a hole (perforation) in the stomach wall can occur. The hole will need to be closed surgically to avoid serious complications.
Managing your stress is key
It is important to identify the causes of your stress and address them. Sometimes, stress can’t be avoided, especially when you have responsibilities to handle. Still, you can find ways to release the built-up tension in your mind through some of the following activities, which help you produce endorphins and reduce stress hormones in your body:
• Physical exercise
• Spending time with loved ones
• Long uninterrupted sleep
If acid production is a constant source of discomfort for you, consult your doctor, who will be able to work out the best treatment plan.
Learn more about cancer care. Join BusinessWorld Insights, in partnership with Mount Elizabeth Hospital Singapore and Parkway Cancer Centre, with the theme, “Hope, Science and Technology: Cancer Care in the New Normal” this March 10, 2021 at 11 a.m. Register at bit.ly/BWCancerCare.
For inquiries, please contact us at Parkway Hospitals Singapore-Manila Office at G/F-B, Marco Polo Hotel, Meralco Avenue and Sapphire Street, Ortigas Center, Pasig City 1600, e-mail us at manila.ph@parkwaypantai.com or call 0917-526-7576.
(This article was reviewed by Dr. Chua Tju Siang, gastroenterologist at Mount Elizabeth Hospitals.)
INVESTMENT PLEDGES approved by the Board of Investments (BoI) surged by 156% in the first two months, despite a drop in commitments from foreign investors as the pandemic continued.
Trade Secretary Ramon M. Lopez, who is also the chairman of the BoI, said on Wednesday the investment promotion agency approved P121.9 billion in investments in January and February, higher than the P47.6 billion in pledges approved during the same period a year ago.
The BoI accounts for the bulk of planned projects registered with investment promotion agencies.
Broken down, foreign investment commitments declined 16.81% to $6.2 billion, while domestic investment pledges jumped 188% to $115.7 billion.
The number of projects likewise fell 39% to 31, but the projected number of jobs the investments will create rose by 41% to 10,207.
“As our economy recovers, we are confident of achieving our pre-pandemic growth rates and beyond. To this end, we are facilitating greater trade and investment in the country by continuously pursuing reforms to foster a better business environment,” Mr. Lopez said in a speech at the Manila Forum for China-Philippines relations on Wednesday.
He referred to reforms such as the reduction in corporate income tax to 25% from the current 30%, which was included in the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) passed by Congress in February.
The BoI reached P1.02 trillion in approved investment pledges last year, or around 10% lower than the P1.14 trillion recorded a year earlier and below the P1.25 trillion target set before the pandemic. BoI-approved investment pledges reached P617 billion in 2017 and P915 billion in 2018.
The investment promotion agency is targeting P1.25 trillion in investment approvals for 2021, or 22.5% higher than last year’s tally as it anticipates more infrastructure projects.
The Bangko Sentral ng Pilipinas (BSP) reported the country’s net foreign direct investment inflows dropped by 10.8% year on year to $5.8 billion in the first 11 months of 2020, amid lingering concerns over the coronavirus pandemic.
Mr. Lopez told the attendees of the Association for Philippines-China Understanding (APCU) event that investment opportunities in the Philippines include manufacturing of e-vehicles, e-bikes, and bicycles; light industries manufacturing for connectivity devices, bags, and textile manufacturing; and Internet of Things (IoT), smart manufacturing, and artificial intelligence.
Another investment promotion agency, the Phiippine Economic Zone Authority (PEZA), approved P11.308 billion in investment pledges in January , or 139% higher than the P4.726 billion in the same month last year.
PEZA expects the 24 projects to employ 5,601 workers.
Economic managers expect gross domestic product to grow by as much as 7.5% this year after a 9.5% contraction in 2020. — Jenina P. Ibañez
In the Philippines, one only has to have a net wealth of at least $60,000 (around P2.9 million) to be considered part of the wealthiest 1% of the population, according to the Knight Frank Wealth Report. — REUTERS/ELOISA LOPEZ
THE number of super-rich Filipinos is likely to grow over a five-year period in line with a global trend, the annual wealth report from real estate consultant Knight Frank said.
High-net-worth individuals in the Philippines — or those with net worth over $1 million (around P48 million) — have declined by 3% since 2015. But this trend will reverse, with the number of high-net-worth individuals expected to grow by 36% between 2020 and 2025, Knight Frank said.
The number of ultra high net worth individuals (UHNWI) in the Philippines, or those with more than $30 million (around P1.5 billion), will likely increase by 35% in the five years to 2025. This after the UHNWI population dropped by 10% in the previous five years.
Globally, Knight Frank projects the population of high net worth individuals and UHNWIs to jump by 41% and 27%, respectively, between 2020 to 2025. The Wealth Report covered 44 economies.
“This year’s forecasts represent optimism for the emergence of a new economic cycle and set new expectations for the post-pandemic world,” Knight Frank said.
The coronavirus pandemic cut the number of wealthy Filipinos last year.
The number of high net worth individuals in the Philippines slipped by 3% to 13,936, while the UHNWI population dropped by 7% to 489.
The Philippines also lost three billionaires (in US dollar terms), bringing the total to 12 in 2020. Knight Frank projected the number of billionaires will return to 15 by 2025.
The decline is in contrast with a global trend maintaining a 7.1% growth in the number of billionaires between 2019-2020. The global response to the pandemic, Knight Frank said, supported the wealthy.
“With lower interest rates and more fiscal stimulus, asset prices have surged, driving the world’s UHNWI population 2.4% higher over the past 12 months to more than 520,000. The process was seen across North America and Europe, but it was Asia, with 12% growth, that saw the real upswing,” Knight Frank said, referring to countries like China and Singapore.
This expansion was not seen everywhere, “with a fall in the number of UHNWIs in Latin America, Russia and the Middle East as currency shifts and the pandemic undermined local economies.”
Countries hardest-hit by the pandemic and economies reliant on tourism also saw the number of UHNWIs decline.
Wealth inequality, Knight Frank said, would spur demand for policies that would curb such imbalance, such as wealth taxes.
WHAT IT TAKES TO BE RICH The threshold to join the wealthiest 1% of the population varies per country, according to Knight Frank.
For instance, one needs to have a net wealth of $7.9 million (around P383 million) to be part of the 1% in Monaco and $2.9 million (P140 million) to be considered among the richest in Singapore.
But in the Philippines, one only has to have a net wealth of at least $60,000 (around P2.9 million) to be considered part of the top 1%.
“This reflects rising wealth but, as elsewhere, growth is not uniform. Wealth inequality has become starker within countries and globally, particularly as a result of the COVID-19 pandemic, and this is likely to become a point of growing contention,” Knight Frank said.
To be considered part of the richest 0.1% in the country, a Filipino needs a net wealth of $210,000 (around P10.2 million). This is significantly smaller compared with the $10-million (around P485-million) threshold in Singapore and $10.4 million (around P504 million) in Hong Kong.
The Wealth Report Attitudes Survey identified the coronavirus disease 2019 (COVID-19) as the biggest concern of 80% of the respondents’ clients. Also, 90% of the respondents see new investment opportunities in the post-pandemic recovery.
The Attitudes Survey is based on responses from more than 600 private bankers, wealth advisors and family offices representing combined wealth of more than $3.3 trillion. The survey was conducted between October-November 2020. — J.P. Ibañez
PHILIPPINE BANKS appear better positioned to weather the surge in soured loans than Southeast Asian peers, but sluggish economic growth could dampen the sector’s recovery this year, S&P Global Ratings said.
“We have a negative outlook on the Philippine banking sector, that means there is a one-third chance that the rating can be downgraded in 1.5 to two years, so clearly that there are risks,” Ivan Tan, director at the financial institutions ratings of S&P, told a webinar on Wednesday.
The credit rater gave a “negative” outlook on the Philippines’ rated banks on expectations that existing financial buffers may not be enough to absorb the fast deterioration of asset quality, if economic recovery is delayed.
“But if you look at it in a relative perspective in terms of the other Southeast Asian banking system that we have a negative outlook as well, including Thailand, Indonesia and Malaysia — the Philippines as a whole has actually performed quite well,” Mr. Tan said.
He said the number of loans that availed of the payment moratorium in the Philippines are lower compared with Malaysia and Indonesia, despite the surge in nonperforming loans (NPLs)from retail and small- and medium-sized enterprises (SMEs) segments.
Republic Act No. 11494 Bayanihan to Recover as One Act (Bayanihan II) provided a one-time 60-day moratorium on loan payments following the similar grace period provided by the government’s first stimulus package.
Mr. Tan said Malaysia’s moratorium on loan payments was more extensive, covering two thirds of the total loan book of banks, and lasted until September.
“The negative impact of the loan quality of the bank, the trajectory of the recovery of the Philippines in terms of nonperforming loans buildup and the resolution of loans under moratorium has been comparatively better than Southeast Asia peers,” he said.
The rise in NPLs in the country was also less severe than expected, said Geeta Chugh, senior director of financial institution ratings at S&P, during the forum.
Ms. Chugh said gross NPL ratio at 3.6% end of 2020 was softer than the credit rater’s forecast that this would rise to 6%. The restructured loan ratio of 1.91% as of end-December was also lower than their prediction of 2.5%.
“Based on the buffers, or the level of capital that the banks are holding, the level of provisioning that they have already written, the level of provisioning that they are forecasting for this year, and the earnings capacity on how much provisioning can the banks do before ending in the red, the levels that we forecasted they are manageable,” she said.
“Banks will remain cautious and asset quality preservation will be a priority over growth simply because the economic outlook is still a bit uncertain,” she added.
The debt watcher expects NPLs would spike further in the first quarter,and peak in the second half of 2021 as monetary support ends.
A slow economic recovery could further dampen the grim outlook for the banking sector, said Vincent Conti, Asia-Pacific senior economist at S&P.
S&P gave a 9.6% growth forecast for the Philippine economy this year coming from a record 9.5% contraction in 2020.
Mr. Conti said the growth will largely be driven by a pickup in household consumption and the ramped-up infrastructure program.
The two main growth drivers will be supported by further easing of mobility restrictions and the pent-up demand from last year, as well as increased government spending, he said, adding that they are unlikely to be slowed down by weak credit growth.
“These are the key drivers for the growth this year. If anything I believe, the demand push from these two factors can help open the tabs on credit once again. The risks to growth from a slower recovery weigh more heavily on credit than the other way around,” he said.
THE Philippines is among key Southeast Asian nations best positioned to take advantage of the growing demand for electronics as the global economy recovers from the pandemic, Moody’s Analytics said.
In its report “Factory Southeast Asia: Global Manufacturing’s Next Frontier,” the think tank said Southeast Asia has gained attention as a global manufacturing hub, especially with the US-China tensions, an increase in labor costs in China, and diversification of global supply chains due to the pandemic.
“Southeast Asia is better positioned than any other global region to benefit from rising labor costs in China and global manufacturers’ push to reduce exposure to trade and geopolitical risks. The combination of low labor costs, a growing workforce, strong macroeconomic institutions, and a stable business climate sets Southeast Asia apart from emerging market peers in Latin America, South Asia and Eastern Europe,” Moody’s Analytics said.
The Association of Southeast Asian Nations (ASEAN) region’s six largest economies, Singapore, Malaysia, Thailand, the Philippines, Indonesia and Vietnam, are active in the electronics, textile and automotive industries.
“While Southeast Asia will not displace China as the world’s factory, its diverse economies are better positioned than any other global region to benefit from the push to cut labor costs and hedge trade and geopolitical risks,” the think tank said.
The ASEAN-6 accounts for nearly one-sixth of global electronics exports, which have grown over 20% since 2015.
The region’s electronics exporters create value in the assembly and processing stages of intermediate goods, such as advanced semiconductor fabrication in Singapore and Malaysia to lower-value microchip assembly and test activities in the Philippines and Thailand, it added.
“Southeast Asia plays a key role in the global electronics supply chain with potential for further growth and diversification. Vietnam, Malaysia, Thailand and the Philippines are likely to lead this trend,” Moody’s Analytics said.
“Vietnam, the Philippines, Malaysia and Thailand are especially well-positioned to benefit from the surge in global consumer electronics demand in the short term, but also from a potential longer-term realignment, as the ongoing global tech battle and concerns regarding intellectual property theft will be pervasive,” it added.
However, Moody’s Analytics noted these nations are still heavily reliant on imports of raw materials and advanced components for electronics production.
Sought for comment, Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) President Danilo C. Lachica said the sector is expected to benefit from the demand surge.
“Long term, we need to continue creating an environment conducive for investments in expansions, new products and technologies and competitive compared to our ASEAN neighbors such as Vietnam and Thailand,” Mr. Lachica said via Viber on Wednesday.
Meanwhile, Southeast Asia’s contribution to the textile industry is relatively small but Moody’s Analytics noted Vietnam and Indonesia have recently ramped up production.
The two countries will remain attractive for textile producers over the medium term, thanks to their abundant, low-cost labor, the think tank said.
At the same time, Southeast Asia may still have a limited presence in the automotive industry, but Moody’s Analytics said there is “potential to contribute to selected segments of production given its growing integration in value chains and maturing domestic markets.”
“Even though economies such as Vietnam have emerged as lucrative manufacturing hubs and attracted sizeable foreign investment in recent years, the region’s auto production has been highly volatile since 2013, raising concerns regarding its ability to scale up production in the short term,” it noted.
Moody’s Analytics said most Southeast Asian nations will benefit from China’s economic recovery and the surge in electronics demand over the near term.
However, the region has to improve its presence in the global supply chains to reap long-term gains.
“To a large extent, this will depend on ASEAN nations’ ability to attract additional foreign direct investment and expand the region’s productive capacity,” it said.
“As global manufacturers ramp up investments in labor-saving technologies, the lure of low-cost labor will play less of a role in production decisions. To remain competitive longer term, Southeast Asian economies will need to invest in infrastructure development and the human capital necessary to drive investment in higher-value manufacturing activities,” Moody’s Analytics added. — Beatrice M. Laforga
