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SolarWinds hack was ‘largest and most sophisticated attack’ ever — Microsoft president

WASHINGTON — A hacking campaign that used a US tech company as a springboard to compromise a raft of US government agencies is “the largest and most sophisticated attack the world has ever seen,” Microsoft Corp. President Brad Smith said.

The operation, which was identified in December and that the US government has said was likely orchestrated by Russia, breached software made by SolarWinds Corp, giving hackers access to thousands of companies and government offices that used its products.

The hackers got access to emails at the US Treasury, Justice, and Commerce departments, and other agencies.

Cybersecurity experts have said it could take months to identify the compromised systems and expel the hackers.

“I think from a software engineering perspective, it’s probably fair to say that this is the largest and most sophisticated attack the world has ever seen,” Mr. Smith said during an interview that aired on Sunday on the CBS program 60 Minutes.

The breach could have compromised up to 18,000 SolarWinds customers that used the company’s Orion network monitoring software, and likely relied on hundreds of engineers.

“When we analyzed everything that we saw at Microsoft, we asked ourselves how many engineers have probably worked on these attacks. And the answer we came to was, well, certainly more than 1,000,” Mr. Smith said.

US intelligence services said last month that Russia was “likely” behind the SolarWinds breach, which they said appeared to be aimed at collecting intelligence rather than destructive acts.

Russia has denied responsibility for the hacking campaign. — Reuters

[B-SIDE Podcast] Good design is good business

Follow us on Spotify BusinessWorld B-Side

The pandemic is changing the way we design our world and the way we move around in it.

“If you’re creating a journey from home to destination, then obviously everything you touch and interact with is design,” said Paul D. Priestman, founder and chair of PriestmanGoode, a design consultancy out of the United Kingdom that counts Airbus SE, Hong Kong’s Mass Transit Railway, and Transport for London as its clients.

“Good design is not an add-on but a crucial part of what makes a business successful,” he tells BusinessWorld reporter Patricia B. Mirasol. “When used effectively, it can make a massive difference to any business.”

TAKEAWAYS

Health and wellness are now part of every design brief because of the pandemic.

When it comes to public transit, designers are incorporating crowd control; social distancing; and self-cleaning materials that wear well, such as brass. The coronavirus has pushed health and wellness to the top of the priority list when it comes to design briefs.

“There are universal principles when it comes to good design,” Mr. Priestman said, “the first of which is that you really have to understand who you’re designing for. What are the problems you are trying to solve?” 

A key element that drives the work the design consultancy has done for its clients is the enhancement of customer service. “How can we create an environment that provides comfort, convenience, and efficiency for passengers?” he added. “How can we include design elements that also make the crew and maintenance staff jobs easier?”

Companies gain a competitive advantage with good design.

Design is a strategic tool that improves business profitability as well as the appeal of a product or service, said Mr. Priestman, who pointed out that good design is essential for companies wanting to compete at the international level. “Design is not an add-on cost. It’s one that improves profitability and saves expense and money,” he said, adding that most successful brands in the world use design effectively.  

Design creates a sense of place. 

Another key element is creating a sense of place. “We work a lot with national airlines, and our designs always focus on referencing the cultural heritage of that country, so that the interiors don’t just look like every other aircraft, but that they look distinct, and of that place,” said Mr. Priestman. The rebrand of Aegean Airlines, for instance, references the classical architecture of Greece translated into cabin patterns and motifs.

Transport plays an important role in how people experience places. It becomes one of the reasons people visit a city, he said. Travelers in Hong Kong go on the Star Ferry, visitors in New York get on its iconic yellow taxis. Transport has to be a cultural experience because part of the enjoyment of travel is doing something different. 

“We’re working in Austria, where we have to create places for putting skis so people can go skiing,” Mr. Priestman shared as he talked more about designing products that become a cultural symbol of a country. “In the vestibules where you get on and off trains in China, people like to have hot water, but in the UK it’s not necessary.” 

Designing to include the needs of the elderly will be a growing trend.

One of the other important issues shaping up in the world—apart from the pandemic and climate change—is its aging demographic. “Think about designing for your grandmother or grandfather. When designing a new product, ask: can they use it? That’s what we need to constantly reference,” said Mr. Priestman.

“Why take the fast train? Take the slow lane. Enjoy the travel experience,” he added. “Enjoy living. Design has everything to do with enhancing that.” 

This B-Side episode was recorded remotely on Jan. 13. Produced by Nina M. Diaz, Paolo L. Lopez, and Sam L. Marcelo.

Follow us on Spotify BusinessWorld B-Side

Pag-IBIG Fund finances homes of 16,975 low-wage workers in 2020

Pag-IBIG Fund financed socialized housing loans of 16,975 members belonging to
the minimum-wage and low-income sectors in 2020 despite the pandemic, its top
executives said on Thursday (February 11).

Socialized housing loans represent 27% of the 63,750 units financed by the agency,
and amount to P7.18 billion out of the P63.75 billion in total housing loans it
released last year.

“Pag-IBIG Fund’s Affordable Housing Loan Program offers the lowest rate and longest
term for minimum and low-wage workers. Even as the pandemic posed numerous
challenges last year, we were still able to provide many of our workers belonging to
this sector the means to acquire their own homes, under the most affordable
terms. This is our way of adhering to President Rodrigo Roa Duterte’s directive to
government institutions to provide programs that serve the needs of the underserved
sector,” said Secretary Eduardo D. del Rosario, Chairperson of the Department of
Human Settlements and Urban Development (DHSUD) and the 11-member Pag-IBIG
Fund Board of Trustees.

Pag-IBIG Fund’s Affordable Housing Program offers a subsidized rate of 3% per
annum for members earning not more than P15,000 per month within the National
Capital Region, and not more than Php 12,000 per month for members outside of
NCR, who will buy socialized housing units. Under the program, members can
borrow up to PHP 580,000 to buy socialized houses, or up to PHP 750,000 for
socialized condominium units, at 3% per annum, a special rate provided to a minimum
and low-wage workers since May 2017.

The loan program also features a 100% loan-to-value ratio allowing borrowers to
enjoy equity-free purchase of housing units.

According to Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti, the agency
is able to keep offering the lowest interest rate in the market because of its
tax-exempt status provided under Republic Act No. 9679.

“Pag-IBIG Fund is able to subsidize the low-interest rate that minimum and low-wage
workers enjoy under our Affordable Housing Loan Program being a tax-exempt
agency, as prescribed under our charter. We are happy that the new CREATE bill
seeks to continue to preserve this tax-exempt status of Pag-IBIG Fund, and thus
allow us to continue offering these subsidized rates. We are grateful to our
lawmakers who share our vision to make homeownership attainable, especially for
the underserved sector. And, as we continue to face challenges imposed by the
pandemic, we shall continue doing our best to help more low-income workers secure
their own homes where they can be safe,” said Moti.

Why should you invest in foreign stocks?

With interest rates for bank deposits lower than 1%, the average Filipino looking for investment options to grow their money are looking for other alternatives. The most popular choices come from securities, managed funds, government savings programs, bank products, and trading. The majority of Filipinos rely on the 30 Philippine-based companies which make up the Philippine Stock Exchange Index (PSEI) as alternatives. However, limiting the investment options to the local equity/market funds historically yields smaller returns compared to other markets.

For those looking for potentially high returns, some experts would recommend diversifying their portfolio. If you are on the fence about investing in foreign stocks or are thinking of doing so, here are some reasons why you should consider investing globally.

Diversification

When building your portfolio, it is always best not to put all your eggs in one basket: which in this case means not to put all your investments in the local Philippine market. This increases the ability to diversify risk by allocating across regions and asset classes thereby reducing local market concentration. In the long run, you may just find higher returns than if you have invested your savings all in one place locally.

Higher Investment Returns

One of the problems of limiting your investments locally is the comparatively smaller returns seen since 2015 when compared to other markets. While there is always a risk to be expected when investing in the stock market, investing globally gives investors the opportunities to enhance returns by tapping into global trends (eg: digitalization, advances in the medical field, and robotics).

A Well-Balanced Portfolio

Both local and international markets will inevitably vary— therefore it is worth looking into dividing your portfolio between both international and domestic equities. That way, whenever international markets start to rise, you can still expect good returns especially when the Philippine market underperforms.

AIA Philam Life has now introduced a global fund range available through its variable insurance products Family Provider and MoneyWorks. Called AIA Philam Life Elite Funds, these were developed in collaboration with AIA Investment Management Pte. Ltd. (AIA IM), its Singapore-based affiliate which serves as the hub for regional investment management of AIA Group, AIA Philam Life’s Hong Kong-based parent company.

“AIA IM’s partnership with AIA Philam Life gives Filipinos access to global portfolios managed by best-in-class fund managers that can help them grow their money for long-term investments,” said Shrikant Bhat, AIA IM Head of Funds. “With our team of experienced investment professionals, the Elite Funds combine various strategies to match client risk profiles and focus on delivering long-term investment returns so that our clients can expect reassurance and consistency with their investments.”

“By providing our clients with global investment options, we are helping Filipino investors grow their wealth and achieve their long-term savings goal. With this, we are able to bring our brand purpose to life by helping Filipinos live Healthier, Longer and Better Lives,” says Arleen Guevara, AIA Philam Life Chief Investment Officer.

Click here to know more about AIA Philam Life’s Elite Funds or visit the AIA Philam Facebook page, email philamlife@aia.com or call (02)8528-2000.

 

 

PNB appoints DDB-Optimax as digital marketing agency for 2021

Philippine National Bank (PSE: PNB) has appointed integrated media agency Optimax Communications Group, Inc. (Optimax) of DDB Group Philippines (DDB) as its new digital marketing agency.

PNB CEO Wick Veloso said, “We are shifting our digital marketing into high-gear with the help of our new marketing agency, DDB-Optimax. We are optimistic that this partnership will help us drive our strategy as we bring solutions to our customers whenever and wherever they need them.”

Veloso further emphasizes, “We see this partnership helping us enhance business yields in terms of leads generation, website statistics, and social media engagements. All these are aimed towards fulfilling our goal to become a more dynamic, innovative, and customer-focused bank that offers stability and security for Filipinos worldwide.”

DDB was named PNB’s new Digital Marketing Agency following a pitch in October last year. To support the engagement starting January 2021, DDB created a hybrid team that is tailor-fit for PNB: the PNB-Optimax team headed by Optimax General Manager Ela Federigan-Chua.

“Digital marketing has become even more essential during this pandemic. We have helped pivot clients’ campaigns from ones using traditional media to ones using digital channels and other new-normal friendly executions. And we are happy to add PNB to the roster of clients who can benefit from our expertise in integrated media especially digital media executions,” said Federigan-Chua.

The PNB and DDB-Optimax partnership is set to create a stronger digital marketing push for the bank’s credit card, retail banking, and remittance solutions, as well as its online banking channels.

This will entail agency outputs such as a digital video portfolio that features social influencers, always-on digital/social media content, and business-building tactical digital materials. In terms of services, DDB- Optimax will provide account management, performance marketing, agile content, social media, and influencer management.

Established by the Philippine government in 1916, PNB is one of the country’s largest private universal banks in terms of assets and deposits. It provides a full range of banking and other financial services to its highly diverse clientele comprised of individual depositors, small and medium enterprises, domestic and international corporations, government institutions, and overseas Filipinos. It has one of the industry’s widest domestic branch networks with 715 branches and more than 1,500 ATMs strategically located nationwide. It has the largest number of overseas offices with more than 70 branches, representative offices, remittance centers, and subsidiaries abroad.

The multi-award-winning DDB Group Philippines is known for its human-centric design solutions. It is part of the DDB Worldwide Communications Group, known globally as DDB, one of the world’s largest and most influential advertising and marketing networks. DDB consists of more than 200 offices in over 90 countries with its flagship office in New York.

Developers told to register with AMLC

By Luz Wendy T. Noble, Reporter

REAL ESTATE developers and brokers as well as Philippine offshore gaming operators (POGOs) and service providers are required to register with the electronic reporting system of the Anti-Money Laundering Council (AMLC) by mid-March.

This as POGOs and their service providers, and real estate developers and brokers are now covered persons under Republic Act (RA) No. 11521, which strengthened the Anti-Money Laundering Act of 2001.

As covered persons, they are now required to report all covered and suspicious transactions to the AMLC.

“If real estate developers and brokers do not submit certificates of [their] registration [with the AMLC], banks and other covered persons may refuse to open a bank account or to continue business relationships with them. The intention of this requirement is to avoid abuse of the Philippine financial system,” AMLC Executive Director Mel Georgie B. Racela said in a text message.

Registration with the AMLC’s system is done online and is free of charge.

AMLC said real estate developers, real estate brokers, as well as POGOs and their service providers, need to register by March 16, 2021.

“Failure to register would mean failure to electronically file covered and suspicious transaction reports with the AMLC, which is a money laundering offense per Section 4 of the AMLA, as amended,” it said.

Mr. Racela noted this is a criminal offense under the amended AMLA, which cites “extreme circumstances where there is clear intention not to report.”

Those who fail to register may also request an extension with the AMLC’s Compliance and Supervision Group, citing specific reasons, Mr. Racela said.

Employees of real estate developers and brokers do not need to register individually so long as their employers register with the AMLC.

“As of date, none has registered, but the AMLC has been receiving a lot of inquiries regarding the registration as well as requests for training and seminars from various real estate brokers’ associations,” Mr. Racela said.

Based on AMLC rules, failure to register with the electronic reporting system within the prescribed period is considered as a serious violation. Penalties will depend on a covered entity’s asset size: those with assets worth P10 million and below may pay P10,000 to a maximum of P500,000, while those with assets worth P50 billion and above may pay a maximum of P5 million.

Under RA 11521, entities regulated by the Philippine Amusement and Gaming Corp. including POGOs and their service providers are required to report a single casino cash transaction equivalent to P5 million.

Meanwhile, real estate brokers and developers are mandated to report single cash transactions worth P7.5 million and above to the AMLC.

On Jan. 29, President Rodrigo R. Duterte signed RA No. 11521 into law in order to address gaps in its “dirty money” regulations ahead of the Feb. 1 deadline set by the Financial Action Task Force (FATF).

Regulations against terrorism financing were tightened through RA No. 11521 or the Anti-Terrorism Act of 2020, which was enacted in July.

Mr. Racela last week said that while the country addressed technical compliance by passing legislation to prevent being “gray-listed” by the FATF, effective compliance still needs to be proven to the international watchdog.

“So anything we can add to demonstrate positive and tangible progress in implementing these laws (RA 11521 and RA 11479) before the submission may be included [in the post-observation period report],” Mr. Racela said, noting the report is due for submission “at least first week of April.”

FIST law urgently needed as bank relief measures to expire

THE ENACTMENT of the Financial Institutions Strategic Transfer (FIST) Act is urgently needed by the banking industry, as most bank relief measures are only applicable until the end of 2021.

“The FIST Act complements the BSP’s (Bangko Sentral ng Pilipinas) temporary relief measures which are mostly in effect until end-December 2021. The BSP will continue to monitor the impact of these relief measures on banks’ financial condition and calibrate the same, if necessary,” BSP Deputy Governor Chuchi G. Fonacier said in a text message to BusinessWorld.

Ratified by Congress in December, the FIST measure is now awaiting President Rodrigo R. Duterte’s signature.

The FIST measure was transmitted to Malacañang in the last week of January, according to Presidential Spokesperson Heminio “Harry” L. Roque, Jr.

“The FIST Act aims to reinforce banks’ capital and liquidity position in the long-term by allowing financial institutions to dispose of their nonperforming assets, increase their risk-bearing capacity, and enhance their capability to provide financial services to productive sectors of the economy,” Ms. Fonacier said.

The banking industry’s bad loan ratio reached 3.61% as of end-December. Non-performing loans (NPLs) increased 74.8% to P391.657 billion by end-2020, from P224.1 billion a year prior.

The BSP last year allowed loans that should already have fallen under the nonperforming and past due classification from March 8 to the succeeding six months to be excluded from the categories until Dec. 31, 2021.

The relaxed credit risk weight for loans to micro-, small-, and medium-sized enterprises is also in effect until end-2021.

Meanwhile, lenders are also given the leeway to book allowance for credit losses over a period of five years and to implement a higher single borrower’s limit of 30% (from 25%) until end-March.

“Banks have also continued to adopt a prudent stance by increasing their loan loss provisioning in anticipation of a rise in their NPLs,” Ms. Fonacier said.

Allowance for credit losses booked by banks surged 77% year on year to P367.094 billion. The industry’s NPL coverage ratio, which shows the allowance for potential losses due to bad loans, rose to 93.73% as of end-2020 from 92.59% as of end-2019.

As banks tighten credit standards and borrowers’ confidence remain weak, lending in December declined 0.7% year on year — the first drop in over 14 years that followed the already meager 0.5% credit expansion in November.

The industry-wide bad loan ratio reached its peak of 17.6% in 2002 in the aftermath of the Asian Financial Crisis.

“Compared with the Asian Financial Crisis, Philippine banks today are better placed in terms of capitalization and loan loss coverage to withstand rising problem loans, but we expect NPL ratios will remain elevated until the Philippine economy turns around,” Joyce Ong, an analyst at the Financial Institutions Group of Moody’s Investors Service said in an e-mail.

The Special Purpose Vehicle Act which helped banks to get rid of nonperforming assets was only passed in 2002, already five years after the 1997 currency crisis in Asia.

BSP Governor Benjamin E. Diokno has earlier said the FIST is only a “fallback position” and said the banking industry can handle the crisis given its adequacy ratio hovers around the 15% territory, which is well beyond the 10% requirement set by the central bank. — Luz Wendy T. Noble

Flying high: Private aircraft demand soars in the Philippines

Businessmen prefer to own private aircraft such as Citation jets and Bell helicopters amid the pandemic. — COURTESY OF PHILJETS GROUP

By Arjay L. Balinbin, Senior Reporter

DEMAND for private aviation services in the Philippines is growing amid a coronavirus pandemic that has battered commercial airlines.

Aviation solutions company PhilJets Group has seen a 20% increase in aircraft sales in 2020, helping it stay afloat despite the crisis.

“Yes, for new owners, we have more demand… We did sell more aircraft in 2020, by 20% more than in 2019,” PhilJets Chairman Thierry Tea told BusinessWorld in a recent phone interview.

Business travelers have turned to private flights due to concerns over the coronavirus disease 2019 (COVID-19) and limited commercial flights as many airlines downscaled operations.

“Basically, they are business people who need to fly for business or other activities,” Mr. Tea said.

Citation jets and Bell helicopters are among the most preferred aircraft because they are “low-cost, cost-efficient, low maintenance aircraft,” he said.

The price of the five-seater Bell 505 alone, depending on the equipment, is around $1.7 million.

There were about 1,200 business jets and 4,000 helicopters in Asia, with China leading the market and the Philippines having about 200 helicopters and 50 jets as of November 2020, according to PhilJets.

“We already closed some deals this year. This is for Bell 505, which is in high demand,” Mr. Tea said.

“The demand is driven by the US market basically, but Asia is coming stronger as well. It is starting to recover quite fast. The demand is rising in China, and the big jets are less in demand. The demand is more on the medium-sized jets,” he explained.

PhilJets lost more than 20% of its overall business in 2020, with the charter segment contributing the most due to travel restrictions.

“We lost more than 50% of our charter business,” Mr. Tea said. “It was a very challenging time for us, especially in the first three to four months of the year.”

PhilJets is engaged in distribution and sales of components, spare parts, consumables, software, and tooling equipment for the aviation industry. It is also engaged in aircraft trading and maintenance, repair, and overhaul services.

“If we were only doing a charter business, probably we’re already dead or bankrupt,” Mr. Tea noted.

The company was able to secure more partners despite the pandemic.

“We have partnerships with a few other brands, especially for maintenance. We are finalizing a few partnerships,” Mr. Tea said, adding that PhilJets is also working on a partnership with Yugo, a private aviation network.

Digitalization is what Yugo, a digital platform, would bring.

“It already started to get Philippine members. It’s not yet officially launched in the Philippines, but it’s already getting quite a lot of traction, and they will be opening an office in Manila pretty soon,” he said.

Mr. Tea said PhilJets’ partnership with Yugo, which has presence in Asia, Europe, North America and the Middle East, should “raise the standards for business aviation in the Philippines.”

The company does not expect air traffic to go back to pre-pandemic levels right away after the COVID-19 vaccine rollout.

“Even with the vaccine, people will not fly right away,” Mr. Tea said. “We are looking at 2024 before air traffic will return to normal.”

PHL agriculture may see export recovery this year

AGRICULTURE exports may see a rebound this year. — PHILIPPINE STAR/MICHAEL VARCAS

THE EXPORT INDUSTRY is expecting the agriculture sector to lead some export recovery this year, while manufacturing growth will remain slow.

Philippine Exporters Confederation, Inc. (Philexport) President Sergio R. Ortiz-Luis, Jr. said that while he is hoping agriculture exports could grow, shipments of big-ticket items like electronics to other countries will continue to be strong.

“If regulations can be fixed, we hope mining ore exports could grow too,” he said in mixed English and Filipino in a phone interview on Feb. 4.

These mining exports could serve as substitutes, he said, while most other exports are down because of low demand in the global market.

“Requirements (for mining goods) don’t stop, especially from China.”

Agro-based exports in 2020 declined 11.5% to $4.57 billion as the country’s total goods exports dropped 10.1% to $63.77 billion, data from the Philippine Statistics Authority (PSA) showed. Mineral products exports were up 6.6% to $4.98 billion.

Manufactured goods exports fell 10.7% to $52.6 billion.

Mr. Ortiz-Luis said manufactured goods export growth, including automotive parts, will remain slow this year.

Prospects for cars, wiring harnesses, and other components like batteries are also dim, he said.

Export demand from China and other parts of Asia are growing, he added, but orders from other markets like the United States are down.

Government export targets for this year and 2022 were revised to reflect the extent of the impact of the coronavirus disease 2019 (COVID-19) pandemic, aiming for $105 billion.

The initial Philippine Export Development Plan (PEDP) 2018-2022 roadmap earlier projected $122 billion-$130.8 billion in goods and services exports by 2022 after a compound annual growth rate of 8.89-9.96%.

Philexport has said that exports would fall short of the initial government target, mostly due to the global economic slowdown caused by the coronavirus pandemic and calamities that destroyed agri-based raw materials and equipment last year. — Jenina P. Ibañez

Gold mine sums up newfound appreciation of PHL small caps

PHILIPPINE INVESTORS are shifting into small, lesser-known names in a stock market that ranked as the world’s worst performer last month.

Demand has waned for the 30 component shares of the Philippine Stock Exchange index (PSEi), which includes giants like SM Investments Corp. and Ayala Land, Inc., amid an uncertain economic recovery, the ongoing pandemic and a flight of foreign funds. The PSEi tumbled 7.4% in January, the worst performance among global equity benchmarks.

The slump in large caps pushed investors to take a chance on riskier small caps, said Fitz Aclan, who helps manage about $520 million as chief investment officer at United Coconut Planters Bank.

“The market is very liquid now, and with interest rates low some are moving out of blue chips to look for higher yields,” Mr. Aclan said. “The expectations for blue chips aren’t as bright as before because of disappointing developments like delays in further economic reopening and vaccination.”

The benchmark has accounted for only 38% of this year’s daily trades compared with an average of about 75% over the past two decades, amid the retail-driven frenzy in small caps. The weighting of PSEi stocks in the country’s total market capitalization dropped about five percentage points from last year’s high to a recent low.

While the share of large caps has dropped, the boom in trading of non-index names is making the Philippines one of Asia’s busiest markets in 2021. An average of 59.3 billion shares has traded in the country each day so far this year.

Much of the explosion in volume has been concentrated in smaller stocks such as Abra Mining & Industrial Corp., the nation’s most actively traded stock this year, accounting for 81% of the market’s daily transactions. Its shares are up 76% since the start of January, fueled by return-hungry retail traders and speculation over investor interest in its gold mines.

RETAIL REVOLUTION
“There are more retail investors now, and many of them are more aggressive,” said Noel Reyes, who helps manage $1.6 billion as chief investment officer at Security Bank Corp. “There are more people who trade daily rather than buy/hold, and that is why the money isn’t going to the index names and many of the stocks that move are the second- and third liners.”

Retail investors were behind almost 27% of the total stock value traded in 2020, up from 18% in 2019, as their participation jumped amid the pandemic, Philippine Stock Exchange President Ramon S. Monzon said on Feb. 1.

Meanwhile, foreigners have withdrawn about $4.15 billion from Philippine stocks over the past three years. It is this group that could determine whether the PSEi fully bounces back from its 8.6% loss last year and dismal performance in January. The benchmark is up 5.7% so far this month.

“Once foreign funds come back these retail investors will switch and ride the ensuing rally in index names,” said Security Bank’s Reyes. But for now, “the play is in non-index stocks.” — Bloomberg

Corporate earnings seen to rise by 20-30% in 2021

CORPORATE earnings per share (EPS) may increase by 20-30% this year, as government restrictions are expected to be eased following COVID-19 inoculations.

According to the 2021 outlook released by Philstocks Financial, Inc. titled Hope Amid the Pressing Times, the Philippine Stock Exchange index (PSEi) is expected to finish the year at 7,150 to 7,750 at best.

A base EPS growth of 20% will allow the market to close the year with 7,150, while the company’s best bet of 30% EPS growth raises its PSEi projection to 7,750.

Philstocks said the EPS numbers, which measure the total return earned by a company derived by dividing its profit by the number of issued shares, are dependent on the developments related to the health crisis.

“A faster easing of restrictions, virus containment, vaccine roll out, and confidence improvement would give our companies a better chance of achieving a 30% EPS growth,” Philstocks said.

Philstocks is also expecting a continuous positive growth in market trends, projecting that the index would even break the 7,300 levels within the next several months. If it doesn’t, the company says it is anticipating the market to trade sideways.

“If the market fails to break and sustain ground at this level, it is expected to trade sideways, within the 6,600 and 7,300 range,” Philstocks said.

On Thursday, the PSEi dropped by 91.14 points or 1.28% to close at 6,991.01.

The firm also noted that an improvement in business and consumer confidence is a key indicator of market performance.

“Better consumer sentiment would lead to more spending which in turn would help our corporates’ toplines. Better business sentiment on the other hand would lead to the pursuance of store-network expansion, production capacity expansion, and other investment plans,” it said.

However, the company noted that the majority of the public’s budget will be spent on essentials, namely: food, beverage, and health products. Clothing and the footwear segment may not see significant recovery.

Philstocks’ research also pointed out that adjusting well to the pandemic is another key factor.

“Better adaptation to the new normal both by consumers and companies are also seen to help boost earnings,” the company said.

When the country put its regions on several lockdowns in an attempt to curb the spread of the virus, consumers began to conduct their transactions online — boosting companies’ preference and need for digital transformation.

“The online and digital transactions will continue to emerge and a higher contribution of it to revenue is expected,” Philstocks added.

Demand for data will be maintained as people continue to work and study from home, it pointed out.

Meanwhile, a rebound is expected for the energy sector, as commercial and industrial activities may pick up as lockdowns are eased.

Philstocks also said that once signed into law, the Financial Institutions Strategic Transfer bill “would serve as a major catalyst for the banking sector” as it would diminish risks when banks would be allowed to transfer bad loans to asset management companies. — Keren Concepcion G. Valmonte

Geely Okavango charges into Year of the Ox with new variant

 

Urban Plus trim gets more bells and whistles Pinoys asked for

PERHAPS WELCOMING ever more prosperity and good fortune, Sojitz G Auto Philippines (SGAP) — the country’s exclusive distributor of Geely vehicles — recently unveiled an additional locally available variant of the Okavango, Urban Plus, right in time for the onset of the Year of the Ox.

SGAP shares that the Okavango Urban Plus is the variant that carries additional bells and whistles many of Filipino customers have apparently been asking for. The highlighted new amenities are: A beautiful, 60-inch panoramic sunroof, a 12.3-inch digital instrument panel, and Adaptive Drive Beam (ADB) matrix LED headlamps. This higher-end variant sells for a rather convincing P1,478,000 as of the moment.

Similar to the initial Okavango Urban variant, the Urban Plus carries a 1.5-liter, three-cylinder turbocharged petrol engine mated with a seven-speed, wet dual clutch transmission. The vehicle also incorporates a mild hybrid system — with its 48-volt electric motor — thus gifting the Okavango with a delightful 190 horses and up to 300Nm of torque. That’s not bad at all for a seven-seater sold at this price point.

Moreover, the Okavango is quite versatile with three rows and 19 seat configurations to play around with. Triple-zone air-conditioning shares the love and the comfort among all passengers, while a CN95 cabin filter makes sure that the circulating air is purified of molds, spores and other infectious agents. A total of 42 smart storage compartments were also designed into the car’s interior, for full practicality amid many potential occupants.

There are also some amusing little details to the new features found in the Okavango Urban Plus. For starters, skin-sensitive motorists who might not be all that savvy about sun exposure will be happy to know that the vehicle’s panoramic sunroof uses three layers of special shading materials to filter out the sun’s harmful rays. The sunroof also has a handy rainfall sensor, which automatically closes it once the car detects that it is beginning to rain.

Meanwhile, the ADB matrix LED headlamps are quite a big deal because they have lots of practical built-in features, such as four different lighting modes and self-adjusting high and low beams. Its adaptive front lighting system has a useful “bend mode” which concurrently turns your lights in sync when you round a bend or turn into a corner. This is especially useful when on dark, country roads where greater visibility directly means heightened safety. The car’s lights also make automatic height adjustments; and its special City Mode offers some lighting alerts whenever pedestrians are detected within range.

Lastly, the Okavango Urban Plus gets a tasty 12.3-inch digital instrument panel which changes its display depending on the drive mode selected: Eco, Comfort or Sport.

SGAP Executive Vice-President Yosuke Nishi shared that “For SGAP, it will all be about moving forward and cautiously beefing up the game this year. We will further reinforce our product line for this year, starting with the introduction of the Okavango Urban Plus variant, and a few more updates and another model in the second half of the year.”

Although last 2020 was painful to almost any business, Geely — as a relatively newly introduced brand — still recorded a top-10 ranking in its total passenger vehicles sold in the Philippines, based on data from the Chamber of Automotive Manufacturers of the Philippines (CAMPI) and Association of Vehicle Importers and Distributors (AVID).

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