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Philippines remains a starter in digital transformation

By Arjay L. Balinbin, Senior Reporter

THE Philippines ranked 59th out of 79 countries in the 2020 Global Connectivity Index (GCI) report by Chinese technology firm Huawei Technologies Co.,Ltd., suggesting that the country remains a “starter” when it comes to digital transformation.

The Philippines had an average score of 38 out of 120 based on the four pillars used by the index, namely: levels of supply of information and communications technology (ICT) products and services, demand for connectivity, connectivity experience, and potential for future development of the digital economy.

The ranking of the Philippines was unchanged, although its latest GCI score was one point higher than 37 in the 2019 index report.

Under the four pillars used by the report, which analyzed the changes of each country’s GCI score since 2015, 40 indicators were used to track the impact of ICT on the country’s economy, digital competitiveness, and future growth. The indicators include ICT laws, mobile broadband subscriptions, e-government services, and ICT influencing new business models.

Four technology enablers were also determined, such as broadband, cloud, artificial intelligence (AI), and the Internet of Things (IoT). The Philippines got its highest score in the availability of broadband technology (45), three points higher than its score in 2019. Its scores lowered three points for cloud (33), and increased three points each for AI (27) and IoT (27).

The index grouped nations into three clusters: starters (ranks 58 to 79), adopters (21 to 57) , and frontrunners (1 to 20).

The Philippines and Indonesia (58th) were the only Southeast Asian countries in the list of starters, with scores of 38 and 39, respectively. Ethiopia, which scored 23, was the worst of them.

Among the Southeast Asian adopters were Malaysia (34th), Thailand (46th), and Vietnam (55th), with scores of 52, 46, and 41, respectively.

Singapore, which scored 81, was the second frontrunner after the United States whose GCI score was 87.

“The digital transformation of economic sectors will help economies develop ‘higher-order’ productivity to spur economic recovery and future competitiveness,” the report said.

It proposed five key stages for the digital transformation of economic sectors, namely: task efficiency, function efficiency, system efficiency, organizational efficiency and agility, and ecosystem efficiency and resilience.

ICT industry observer and expert Eliseo M. Rio, Jr., a former undersecretary at the Department of Information and Communications Technology, attributed the Philippines’ performance to the “lack of telecommunication infrastructure.”

“We are far behind our neighboring countries in terms of telco infrastructure. Vietnam has 70,000 towers as against our 24,000 towers, for example,” Mr. Rio said in a phone message on Friday.

He said the country’s digital services will only improve if it has sufficient infrastructure reaching the underserved and unserved areas.

“The aggressive rollout (of cell towers) will definitely improve our next ranking, especially when the third telco starts its commercial operations by March this year. Dito Telecommunity Corp. contributed around 3,000 additional towers. But even at this rate, it will take around seven more years if the government will not make telco infrastructure as important as its other Build, Build, Build programs,” he explained.

Infrawatch PH convenor Terry L. Ridon said the path towards full digital transformation is still “far and long.”

“Digital competitiveness between telecoms providers remain unchallenged, as the duopoly still corners a vast majority of the market despite the emergence of a new major player. On the other hand, lesser competitors cannot cope with consistency of service amid limited infrastructure and capital expenditures,” he said in an e-mailed reply to questions on Friday.

Mr. Ridon noted that several e-government services “have not been fully integrated nor intuitive” to public needs.

He pointed out that driver’s license databases are not fully integrated with vehicle information and other databases.

“Cloud services are now slowly being integrated in both government and industry, with Amazon Web Services establishing its foothold in the country. Competition in this field should be encouraged to reduce costs and ensure wider usage,” he noted.

The country is expected to continue being a “starter” nation in the medium term, as it still has limited investments in AI and IoT. “There is a bright spot in the financial technology sector with the new round of investments in GCash by foreign investors, as the current valuation may raise the company to the level of one of Southeast Asia’s valuation unicorns, those with market valuations of more than $1 billion.”

“There is also no shortage in emerging ICT influencing new business models, as various consumer service apps get launched almost every month, especially during the coronavirus pandemic. Their main challenge however is how to compete in an already crowded field of consumer service apps dominated by already established tech firms. Another challenge is how to build these apps for use not only in the Philippines, but in other parts of the world,” Mr. Ridon said.

To encourage growth and raise the level of domestic and foreign investments in the ICT sector, the government should remove bureaucratic roadblocks, he said.

The government should “allow the sector a wide latitude to innovate,” he also said, noting that government financial institutions “can even set aside investment funding to support nascent domestic tech initiatives, for as long as there is a clear proof of concept and plan of growth.”

T-bill and bond rates may move sideways on cautious sentiment

RATES ON government securities may move sideways this week as investors are becoming more cautious amid uncertain recovery prospects. — BW FILE PHOTO

RATES OF government securities on offer this week will likely move sideways or end mixed, with investors becoming increasingly cautious towards long-term debt despite strong liquidity in the market.

The Bureau of the Treasury (BTr) wants to borrow P20 billion from its offer of Treasury bills (T-bills) on Monday, broken down into P5 billion each from the 91- and 182-day debt papers and P10 billion via the 364-day securities.

On Tuesday, the BTr will auction off P30 billion in reissued 10-year Treasury bonds (T-bonds), which have a remaining life of nine years and five months. The notes bear a coupon of 2.875%.

T-bill yields may move sideways or higher by five basis points (bps) from the previous week, Security Bank Corp. First Vice-President and Head of Wholesale Treasury Sales Carlyn Therese X. Dulay said in an e-mail.

Ms. Dulay said the recent sell-off could push the rates of these short-term debt to inch up, but this will be partly tempered by abundant liquidity in the market.

However, a bond trader expects T-bill rates to continue to go down by 5-10 bps at this week’s auction.

Robinsons Bank Corp. peso sovereign debt trader Kevin S. Palma, for his part, said “demand for the front end of the curve is still expected to be tenacious as liquidity remains the name of the game.”

“Investors opt to diversify their excess cash on the intermediate term as policy settings remain to be accommodative and may not likely tighten until we see the economy in full throttle,” Mr. Palma added.

Meanwhile, for the reissued 10-year bonds, Ms. Dulay said they expect the notes to fetch a rate between 2.9% and 3%, while the trader gave a forecast range of 3-3.1%.

“We think the 10-year auction [this] week will meet demand relatively weaker than that of a three- or five-year bond as players have been quite aloof on the long end due to prospects of better conditions in the country from the pandemic. Alongside that, the market is also set to take in tenors under 10-year in the second half of February, so we might not see tenders like 3 to 4 times the supply size,” Ms. Dulay said.

Robinsons Bank’s Mr. Palma also sees a slight uptick in the 10-year bond’s rate as investors remain cautious, even as they seek higher returns amid the low interest rate environment.

The Bangko Sentral ng Pilipinas (BSP) slashed benchmark rates by 200 bps last year, bringing down the overnight reverse repurchase, lending and deposit yields to record lows of 2%, 2.5%, and 1.5%, respectively.

The BTr last week upsized the volume of T-bills it awarded to P22 billion from P20 billion and even opened its tap facility to accommodate the strong demand seen for the offering. The auction attracted total tenders of P112.2 billion, making the offer over five times oversubscribed.

Broken down, the Treasury raised P5 billion in 91-day T-bills as planned from P17.33 billion in bids. The three-month debt fetched an average rate of 0.969%, down 1.5 bps from the 0.984% logged in the previous week.

The government also accepted P7 billion in bids for the 182-day T-bills, higher than the P5-billion program, as tenders hit P31.527 billion. The average yield of the six-month papers went down by 2.5 bps to 1.323% from 1.348% previously.

Lastly, the Treasury made a full P10-billion award of the 364-day securities on offer, with total bids reaching P63.355 billion. The one-year instruments were quoted at an average rate of 1.542%, down 4 bps from the 1.582% seen in the previous offering.

Meanwhile, the last time the BTr offered the reissued 10-year bonds on offer on Tuesday was on Aug. 11 where it made a full P30-billion award out of P54.725 billion in bids. The T-bonds fetched an average rate of 2.724%, down from the coupon fetched when the papers were first auctioned off on July 11.

At the secondary market on Friday, the 91-, 182- and 364-day T-bills were quoted at 1.091%, 1.091% and 1.53%, respectively, while the 10-year bonds fetched a yield of 2.937%, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

The BTr plans to borrow P140 billion from the local debt market this month: P80 billion via weekly auctions of T-bills and P60 billion from fortnightly T-bond offerings.

The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of gross domestic product. — Beatrice M. Laforga

Material trends offer opportunities for textile sustainability challenges

TEXTILE presents sustainability challenges as the world moves to a more circular economy, but recent trends provide an opportunity to surpass these.

“The initial challenges are almost insurmountable, but we’re starting to chip away at that,” said Andrew Dent, executive vice-president for research of Material ConneXion, a New York-based materials consultancy. In a presentation on sustainable material trends at the recently held TELA Conference 2021, he gave examples related to reduced waste from digital manufacturing, new performance treatments, dyeing technologies, leather and cotton-free alternatives, and end-of-textile-life practices. “These innovations are small-volume. That’s the concern. How do we take these innovations and have them end up as larger volume solutions for the market?”

SUSTAINABLE MATERIAL TRENDS
A way to reduce textile waste that has emerged is 3D (three-dimensional) or digitized knitting, where items are produced by inputting design information into a program, and a machine knits the information using only the needed materials. Companies that use the technology include the Swedish furniture company Ikea, which uses it for one of its chairs. 

Meanwhile, Dutch dyeing technology supplier DyeCoo has a waterless dyeing solution that is able to infuse dye particles into an entire bolt of fabric. “Pigments fall like water, even though they’re still like gas, then go through the fabric so zero water is needed,” said Mr. Dent. “It dyes entire bolts in one go with zero water, but does require more of a capital investment. These are not small machines.”

Material manipulation is another growing trend in the textile industry. Liquid silk, for one, is a water-based, non-animal protein source that is being used to create a coating on other lower cost, readily available fabrics. The resulting fabric has the feel of silk without the need to actually produce it from silkworms. Meanwhile, mushrooms are being utilized by San Francisco-based startup MycoWorks to produce leather-looking membranes. “Although not having quite the same durability as real leather, it does have the same look and feel, and composts safely at the end of its material life,” Mr. Dent said.

One problem is what happens to textiles after they’ve come to the end of their usefulness. Brands such as OSOM use upcycled yarns from discarded garments to reduce textile waste. The company pulls fabrics apart through a machine that maintains the fabric’s fiber length and thus integrity.

As Mr. Dent explained, “The challenge with recycling natural fabrics such as cotton is that they’re made of individual fibers that are spun together. When you chop those fibers up, the less strong the resulting fabric is. OSOM is able to pull fabrics while maintaining 80% of the fiber length of those yarns.”

SHIFTING TO A CIRCULAR ECONOMY
Shifting to a circular economy requires asking the right questions. Textile upcycling, for instance, may be sustainable — but you need to be careful about what you do with it, Mr. Dent told the audience at the conference. Solutions need to be localized and not labor intensive. “If you can upcycle, produce new products, and use renewable energy, then you have your solution. We don’t want to put out so much plastic material out there in the world.”

A three-pronged approach involving the consumer, the brand, and the government is also necessary to spark a shift to a circular economy.

“Consumers need to want to purchase products that are circular. Brands need to offer circular options. The government and other institutions need to provide the infrastructure that allows materials to be recycled and reused,” Mr Dent said. “Without a combination of these three, it’s not gonna work.”  — Patricia Mirasol

Trading in January led by local investors – PSE

LOCAL retail and institutional investors dominated stock market trading in January, marking the eight straight months that foreigners were left behind, the Philippine Stock Exchange (PSE) said.

PSE President and Chief Executive Officer Ramon S. Monzon said in a statement that local investors have accounted for 75.3% of the market’s value turnover in January, with the remaining 24.7% going to foreign participants.

The PSE said local investor participation in January is the highest recorded on a monthly basis since March 2010, which was at 76.2%.

“This is the eighth consecutive month that locals outpaced foreign investors in terms of value traded in the stock market. Trading activity of foreign funds may have abated, but liquidity in the stock market has not deteriorated,” Mr. Monzon said.

For January 2021, the market’s daily average value turnover amounted to P11.04 billion, against P7.35 billion as of end-2020 and P6.13 billion at the end of January last year.

“Daily average value turnover is up 50.3% year to date and 82.4% year on year,” Mr. Monzon said.

Further, the PSE said the volume turnover of the local market reached 1.43 trillion in January while value turnover for the month amounted to P220.85 billion. For the month, the PSE said 22.28 billion shares valued at P128.76 billion were traded.

It added that retail participation as of Jan. 22 accounted for 52.2% of the market’s value turnover, while 47.8% came from institutional investors.

“Retail participation started to expand when the pandemic started. In 2020, the retail market was responsible for 26.9% of value traded from 18.2% in 2019,” Mr. Monzon said.

“Initial public offerings (IPO) usually serve as the entry point in the stock market of retail investors. We hope to have a robust IPO pipeline this year, including Real Estate Investment Trusts (REITs), to further grow the retail market,” he added.

Meanwhile, Mr. Monzon said that despite wishing to see more local and retail investors at the PSE, new investors should learn the basics of the stock market before investing.

He said local small investors can subscribe to IPO shares via the PSE’s Electronic Allocation System web and mobile platforms, adding that the public can attend monthly webinars to increase their trading knowledge. — Revin Mikhael D. Ochave

First Shell retail station built with ‘eco-bricks’ rises in Bulacan

 

Facility made of upcycled materials is considered a ‘milestone’

IT’S ALL ABOUT promoting a “circular economy,” says Randy Del Valle, Pilipinas Shell general manager and VP for its mobility business in the country.

Partnering with Green Antz Builders, the global energy company’s Philippine operations recently completed its very first retail station in the country using so-called eco-bricks. Green Antz Builders made the eco-bricks from upcycled plastic waste. In this case some 15,000 Shell lubricant bottles, Select water bottles, and other materials sourced by the community in Plaridel were processed into 26,512 bricks used in the construction.

The eco-brick hub of Green Antz also collects materials through the waste management programs of Malolos, Pulilan, Baliuag, and San Ildefonso local governments, with help from Plaridel’s “chief eco-brick proponent” Jocell Vistan.

The circular economy that Mr. Del Valle speaks of is based on “the concept that things are designed to last longer and (are) meant to be reused, repurposed or recycled.” Instead of ending up in landfills, discarded materials are put to good use.

“We call it urban mining. Instead of getting all the resources from the environment, we just look around and source for plastic waste,” says Green Antz CEO Engr. Rommel Benig in a release. “In fact, we’re not calling it waste, we’re calling it a resource.” While admitting that the eco-brick is more costly to produce, “buildings that use this alternative can reduce the overall cost of construction and operation.”

In an exclusive interview with “Velocity,” Mr. De Valle shares, “With over 30 Shell Mobility stations already using eco-bricks as part of its building components, and this Plaridel facility built completely using them, Shell will continue to expand this in our new stations and renovation projects. This is truly aligned with Shell’s purpose and commitment to reduce waste as we help shape the mobility future of the Philippines.”

While the other stations partially feature eco-bricks in the construction of some walls, pavement or walkway, the Plaridel facility, avers the Shell executive, is significant in several ways. “It is the first commercial building made of 100% eco-bricks in the Philippines, and it is the first Shell Mobility building of its kind in the world. This is a great milestone for the Philippines, and globally for Shell. Big credit is due to our retailer, Joyce Vistan-Leonardo.”

Along with plastic materials, glass and other debris are used to make the building material which proves more compact than regular hollow blocks and is up to five times stronger — which means less are needed for a build. The eco-bricks also provide greater insulative properties, which can redound in reduced energy consumption and, ultimately, lower cost and environmental impact.

“This past year has been all about accelerating our transformation to do better in our financial, social, and environmental dimensions,” shares Mr. Del Valle. “At Shell, we believe that this milestone station will not only help us reduce our carbon footprint and meet our ambition to reduce, reuse, recycle waste, but also set a precedent for smarter and cost-efficient station design.”

Shell has also forged ties with Green Antz through Pilipinas Shell Foundation to put up a similar eco-brick factory in Cagayan de Oro. This is part of an effort to manage waste in Macajalar Bay, “while also providing members of the Macabalan Wharf Porters Association an additional source of livelihood.”

Underscores Mr. Benig, “We’re seeing a very good trend now. A lot of awareness is being created and more companies and organizations are really getting involved in this now. This was not the case five, six, or seven years ago. So, we are excited about the future, where everybody is more environmentally responsible. We cannot do it alone, neither the government nor the private sectors. But if we combine forces, we have a very good fighting chance to address the problem.”

Shell has pledged US$1.5 billion over the next five years to end plastic waste in the environment, and is a leading member of the Alliance To End Plastic Waste comprised of chemicals and plastic manufacturers, consumer goods companies and waste management companies, along with the World Business Council for Sustainable Development.

“We want to make a difference in communities and expand this effort to more locations and sites,” insists Mr. Del Valle. “This is part of Shell’s purpose, even my own personal purpose, and I hope that as a country we will continue doing this for our generation and the next.”

Coronavirus pandemic spurs tie-ups for digital payments

DATA from the Bangko Sentral ng Pilipinas showed cash remittances coursed through banks edged up by 0.3% to $2.379 billion in November from $2.372 billion a year earlier. — BW FILE PHOTO

THE PANDEMIC is putting more people at ease with digital remittance transactions, paving the way for these firms’ tie-ups with other businesses looking to utilize electronic payments, remittance players said.

“We have experienced a tremendous demand not only from the retail [side] but also for the businesses, for partners,” UniTeller Philippines Country President Noel C. Cristal said in an interview.

Mr. Cristal said some firms have started to tap them for white label services related to remittances.

“Right now, we are looking for partners that are e-wallet capable because we think that’s where [the trend is] going,” he said.

With customers becoming more comfortable with digital payments, online remittance transactions will likely thrive in the long term, WorldRemit Philippines Country Director Earl Allan E. Melivo said.

Mr. Melivo, however, noted that there are clients that remain skeptical about using apps to transfer money back home.

“We understand the apprehension, but as the COVID-19 pandemic highlighted, access to digital payment channels is imperative to ensure continuity of providing financial support to recipients back home,” Mr. Melivo said in an e-mail.

Remittances help fuel consumption that makes up 70% of the economy.

Money sent home by overseas Filipino workers (OFWs) in November grew by its slowest pace in three months, with cash remittances reaching its lowest level since May as lockdowns were reimposed in some countries due to a spike in coronavirus cases.

Data from the Bangko Sentral ng Pilipinas (BSP) released last month showed cash remittances coursed through banks edged up by 0.3% to $2.379 billion in November from $2.372 billion a year earlier.

Meanwhile, cash remittances for the 11 months to November dropped 0.8% to $27.013 billion from $27.231 billion a year earlier. The decline is below the BSP’s projection of a 2% contraction for the full year.

For Mr. Cristal, the digital payments transformation roadmap of the BSP has become a guiding principle for many firms integrating online transactions into their businesses.

The central bank wants 50% of payments in terms of both volume and value done digitally by 2023. With the coronavirus pandemic making consumers prefer safety and convenience, the BSP is bullish this goal could be reached before the 2023 target.

A Better than Cash Alliance report showed online payments increased to make up 10% of the total volume as of 2018 from just 1% in 2013. By value, it also increased to comprise 20% of the total in 2018 from 8% in 2013.

CHALLENGES TO DIGITALIZATION
Remittance players said they would continuously need to push initiatives to boost the adoption of digital transactions by both senders and receivers of remittances.

“One of the challenges for digital payments providers like WorldRemit is to continue educating consumers on how to use our platforms and knowing they understand the benefits of using such; providing superior speed, cheaper pricing and greater features thus providing a greater experience to customers and allowing savings to be made,” Mr. Melivo said.

UniTeller’s Mr. Cristal said clients at the sender side seem to be more at ease with the shift to digital transactions as cash remains king for many remittance recipients who are already used to spending money right after an ATM withdrawal or a visit to a remittance center or pawnshop.

Another issue would be “making Lolo and Lola to adapt to this digital economy,” he said.

Mr. Cristal said while spending e-money is very convenient in Metro Manila, the case is not always true in rural areas where more people are still reliant on cash transactions.

“For those in the provinces, the unbanked, how do you use an e-wallet? Adoption is critical,” he said. “Where can an e-wallet owner spend when there are no merchants accepting such mode of payments?”

He said he hopes that with government initiatives such as the national QR code, the road to a cash-lite society will be more inclusive across the country. — Luz Wendy T. Noble

Tax court affirms cancelled P506-M assessment on Grand Plaza

THE Court of Tax Appeals (CTA) affirmed the cancellation of tax assessment on Grand Plaza Hotel Corp. for 2008 worth P506 million.

In a resolution dated Jan. 19, the court, sitting en banc, denied for lack of merit the appeal of the Bureau of Internal Revenue (BIR).

The BIR claimed that while there is no disputed assessment, the en banc erred in ruling that the court in division assumed jurisdiction over the company’s petition. It was also filed out of time, even if it falls under “other matters,” the bureau said.

It also claimed that the court should not have declared void the deficiency tax assessment for allegedly not containing a definite due payment.

“Petitioner’s contentions are mere reiterations of the arguments he has raised in his “Petition for Review.” Moreover, these issues have been amply considered, weighed and resolved in the Assailed Decision. Thus, to discuss anew the explanation of the Court on these matters is superfluity,” the court said.

“In sum, the Court En Banc finds no cogent reason to warrant a reconsideration of the Assailed Decision,” it added.

The company in its comment also said that the arguments raised were a rehash of the claims raised both in the en banc and the division, the court said.

The court in its decision on Sept. 29, 2020 upheld the decision of its special second division in October 2018 and resolution in March 2019 cancelling the tax assessment against Grand Plaza.

The en banc ruled that the court in division “properly assumed and exercised jurisdiction over the case,” noting that its jurisdiction of those falling under “other matters” clause under the Tax Code include determination of validity of a warrant of distraint and levy and prescription of the bureau’s right to collect taxes.

The court noted in the decision that the company’s basis in filing a petition for review was the issuance of the Final Notice, which was meant to enforce collection of the alleged tax liabilities.

It was received by the company on Feb. 16, 2015 and filed the petition to the court on Feb. 20, which is within the prescribed period to question the issuance.

The court also said that the assessment is void due to the lack of a “definite and unequivocal demand for payment on a certain due date.”

It cited a Supreme Court ruling which stated that an assessment must not only contain the computation of the tax liabilities, but also a demand for payment within a prescribed period.

The High Court also said that the lack of a certain date “negates BIR’s demand for payment,” the CTA said.

Associate Justice Jean Marie A. Bacorro-Villena dissented in the Sept. 29 decision, saying the court has no jurisdiction over the original petition for review filed at the division as a formal letter of demand (FLD) was received as early as Sept. 19, 2013 and the company partially paid its tax. The petition should have been filed within 30 days from the receipt of the FLD, she said in her dissenting opinion.

The division in July 2018 initially dismissed the petition of the company for lack of jurisdiction since the assessment in question had become final for its failure to file a protest against the formal letter of demand within the prescribed period.

In the amended decision in October 2018, the court’s division found merit in the appeal of the company, saying that while there is no disputed assessment, it can assume jurisdiction over the petition under “other matters” clause of the Tax Code. It said that the court may review the BIR’s right to collect upon assessment. — Vann Marlo M. Villegas

Making Philippine silk

UNKNOWN to many people, that most desired of luxury fabrics, silk, has been quietly being made in the Philippines.

In a video presentation during last week’s TELA Conference 2021 (streamed via Zoom and Facebook Live), the Philippine Textile Research Institute (PTRI) under the Department of Science and Technology (DoST), gave updates on the Philippine Silk Road Program, which is an initiative to develop raw silk through local silk farms. Some of the silk producers they interviewed have been at it for 20 years. Some of the country’s silk farms, set up with the assistance of the PTRI, are located in Kalinga-Apayao, Ifugao, Benguet, Aklan, Misamis Oriental, and Bukidnon.

Silk is a legendary product, with its first use documented in ancient China, reaching the West through the Silk Road trade route. Silk was one of the treasures that drove explorers to reach the East, and legends of how sericulture (the cultivation of the silkworms from which comes the silk thread that is used to make the fabric) came to the rest of the world range from the deceptive (princesses smuggling cocoons in their hair; monks keeping moth eggs in canes) to the divine (gifts from gods).

In the Philippines, we don’t have to worry about that. According to the PTRI, the backbone of sericulture rests in an expertise on silkworm germplasm and delivery of disease-free silkworm hybrids. They are assisted by the Philippine Genome Center (PGC) of the University of the Philippines in the study of silkworm strains. Meanwhile, weaving silk thread into fabric was shown to be accomplished through handlooms, though some have upgraded to using textile software to create designs.

Antonio Arabis, one of the silkworm breeders from Cagayan de Oro, presented his rearing house (where the silkworms are raised); while Alfredo Ampo from Cagayan Valley said that his first step into sericulture was signing a Memorandum of Agreement to plant mulberry plants (the silkworms’ primary diet) in a 1/4 hectare plot. “I realized that it’s good to expand, so I made it almost a hectare now,” he said.

Celia Elumba, Director of the PTRI, used the opportunity to promote local textiles, especially silk. She notes that consumers still think that Philippine textiles should be cheap, or else might be of low quality. “That has to change. We are part of that equation,” she said. “The call is, if the industry is not yet hearing the call, consumers must heed the call.”

“Consumers, you exercise, as in elections with the ballot, you exercise with your money.” — J.L. Garcia

Globe says demand for mobile data to surge after vaccinations

GLOBE TELECOM, Inc. is expecting consumers to depend on mobile data again after vaccinations, its top official said.

“The availability of a vaccine that will allow things to go back to the way they were would mean that people will be out again and depend on mobile data as they did prior to the pandemic,” Globe President Ernest L. Cu told BusinessWorld in a recent e-mail interview.

He noted that Globe saw an increase in mobile data use after the government started easing community quarantine restrictions.

“As the lockdowns eased, we saw people starting to go out of their homes — increased activity in malls, businesses re-opening, and workforce slowly returning to offices, even just on voluntary or few-days-a-week basis,” he explained.

“So, even as people discovered the convenience and higher efficiency in some cases of doing things online (e.g., digital banking, using self-service mobile apps, etc.), people also obviously missed in-store experience, dining out, working in the office, and the like,” he added.

Globe saw its mobile business revenue as of September 2020 decline 6.39% to P77.31 billion from P82.59 billion generated in the same period in 2019. Nine-month revenue from its home broadband business grew 21.63% to P19.55 billion from P16.07 billion.

Globe has set a capital expenditure (capex) budget of P70 billion for 2021, higher than last year’s revised capex guidance of P50 billion.

“Expect more aggressive rollouts of new cell sites and fiber to homes, using the most advanced technologies available, such as 5G, to deliver improved services and better data experience to our customers,” Mr. Cu said.

He noted that the availability of 5G and enhanced 4G will pave the way for the development of additional digital services in fintech, e-health, and e-commerce, among other things.

As for the challenges that Globe expects to continue to face this year, he said: “Like other businesses, closures and limited movement affected our sales and service delivery, and safety measures put in place incurred and continue to incur additional costs on our operations.”

“All of these will have a domino effect on our economy, and we have yet to feel the full economic impact of the pandemic, just like with other countries,” he noted.

“Hopefully, the vaccine’s availability, and with all countries working on inoculating their citizenry, will have a sweeping effect. Economic recovery will take time, though, and we expect that it will not be an easy climb back to pre-pandemic levels. But, when you hit rock bottom, there’s no way to go but up,” he added.

Globe targets to put up 2,000 cell towers this year. It built 1,300 new cell sites last year.

The company recently reported an attributable net income of P15.87 billion for the first nine months of 2020, down 10.25% from a year earlier.

Globe Telecom shares closed 3.62% lower at P1,941 apiece on Friday. — Arjay L. Balinbin

Low US interest rates worsen racial wealth gap

KEEPING interest rates low in an effort to boost a weak economy, which the Federal Reserve has signaled it will do through at least 2023, may actually exacerbate wealth inequality between White and Black households, according to a new economic paper.

The gains in stock prices that come with a low interest-rate environment and disproportionately benefit White Americans, far outweigh the job and income gains that Black citizens experience at the same time, according to the paper released Friday. Its authors include Alina Bartscher from the University of Bonn and New York Fed economist Moritz Schularick.

“Our analysis therefore does not bode well for the suggestion made by politicians and central bankers that a more accommodative monetary policy helps alleviate racial inequalities,” they wrote. “With the instruments available — all of which work through effects on asset prices and interest rates — a central bank would not be able to design policies for an income-gap reduction objective without increasing wealth inequality.”

Because White Americans own a disproportionate share of wealth-building assets like stocks and homes, their gains in a low interest-rate environment may actually widen the wealth gap. The S&P 500 Index rose 16% last year even amid the pandemic. Unemployment, which surged for all Americans, remains at 9.9% for Black Americans, while White workers have seen their rate fall to 6%.

The authors found that Black households on average own 30 cents per dollar of housing held by White households, and 9 cents per dollar of White households’ stock holdings.

In a low interest-rate environment, Black households experience a gain in income — owing to better job opportunities — equivalent to 0.19% of annual income. The capital-gains benefits of an increase in things like equity prices result in a gain equal to 24% of annual income for White households versus 6.5% for Black households. That 17.5 percentage-point gap is two orders of magnitude larger than the 0.19%, the paper’s authors found.

The median White household has almost eight times as much wealth as the median Black household. The average gap, which takes into account the concentration of White wealth at very high levels, is more than $800,000.

Fed officials have argued recently that while their tools to fight inequality are blunt, they will nonetheless deploy them in an effort to shore up the job market for all Americans as the economy recovers from the pandemic crisis. The central bank changed its policy framework last year to specifically say that maximum employment is a “broad-based and inclusive goal” that it will seek to achieve. — Bloomberg

How do you maximize limited space at home? Experts share valuable advice

FROM creating an illusion of a bigger room to incorporating built-in furniture designs, industry experts revealed some points to consider, as well as tips and tricks to make the most out of limited areas, most specially in studio-type condominiums and one-room units.

Interior designer Katherine Anne Correa, MArch, Interior Design Program Chairperson and architect Harvey Vasquez, MArch, UAP (United Architects of the Philippines), Architecture Program Chairperson, both from the De La Salle-College of Saint Benilde from the School of Design and Arts, noted the importance to identify the purpose of a given space.

“We Filipinos are very ingenious when it comes to maximizing small spaces. It is part of our culture,” Ms. Correa stated. “Ask yourself: What do you intend to do in that small space during daytime and night time? Can we compartmentalize those specific functions within the available space or make it flexible that we can convert any time?”

She added that using certain shades produces an illusion of a more spacious room. “Receding colors are those that are high in value, lower in saturation and cooler in hue,” she expounded. “They are perceived to raise the ceiling height.”

She suggested white-painted ceilings and walls, matched with bright lights, to make for a bigger area. For those who do not want to go all-white, they can opt for cream or pastel. To complement the soft backdrop, she recommended home décor such as pillows, artworks, or even indoor plants for pops of color.

Choose furniture designs that are useful both for day and night. “Murphy beds can be tucked in or folded and be converted into a dining table, work table, or sofa during day time,” Ms. Correa advised. “Another option is to design a bunk bed wherein you can use the bottom part as a work space or a living area.”

Meanwhile, Mr. Vasquez added that the concept of open spaces, now deemed a trend, was the main design feature of a bahay kubo or nipa hut. “It was ahead of its time. In the morning, it served as the working area for the housewife, play area for the kids, dining area during family meals. At night, it became the sleeping area. With minimal fixed furniture and just one cabinet, it successfully hosted the basic role of a house.”

He stressed multi-functionality as the core element. “Flexibility of being able to adapt different scales of activities is a welcome feature to an efficient house,” he reiterated.

To instill a sense of privacy amid the open spaces, he further proposed portable partitions. “This was especially highlighted during this pandemic, as we are trapped inside, with no place to do personal work,” he explained. “Moving forward, being able to design a personal space, even though limited, is also important.”

Maintaining a tiny space means constant decluttering. Mr. Vasquez advised full-height cabinets as a great way to organize the limited space. “It can also be a room in itself; a full kitchen can be inside a cabinet if designed right,” he noted.

Lastly, “Flexibility has always been related to mobility as it gives us the potential to transform spaces simply by moving the furniture around,” Mr. Vasquez detailed. “Different configurations of spaces can be achieved by reconfiguring chairs, cabinets and tables.”

Improved Michelin tire geared for vans, pickups, and light trucks

All-new Agilis 3 boasts longevity, other benefits

LAST WEDNESDAY, Michelin unveiled its all-new Agilis 3 tire, designed specifically for light commercial vehicles including light trucks, vans, and pickups. During the online launch event, company executives explained how the need for “sustainable mobility” has been magnified by the COVID-19 pandemic — with logistics being a crucial cog of daily life.

Michelin thus sees the newest iteration of the Agilis line as a decisive answer to the even more important role of mobility during this time, and is another expression of how the brand is working to make tires last as long as possible while assuring safety and performance throughout their life cycle.

The Agilis 3 is particularly positioned to “play a central role in the new normal,” as it takes its place as Michelin’s primary product in the segment.

Said Shane Chadderton of Michelin East Asia and Oceania B2B Marketing for Urban Mobility, “In line with Michelin’s ‘Performance and Safety Made to Last’ brand promise, the new Michelin Agilis 3 is outfitted with innovative technologies and sophisticated features for long-lasting performance with optimum safety and environmental friendliness. These attributes not only provide a competitive advantage over current competitors in the same market segment, but also reinforces Michelin’s commitment to more sustainable mobility. Essentially, this tire is well-positioned to be a sustainable urban growth engine. The latest breakthrough is further evidence of Michelin Group’s sustainable performance strategy in favor of safer, cleaner, more accessible and more efficient mobility.”

Michelin cites specific innovations and qualities that enable the all-new tire to deliver several benefits. The Agilis 3 features “stone ejectors,” in the tread groove through horizontal bars designed to minimize stone trapping which can damage the tire and impair performance; sidewall shielding is provided by an abrasion-resistant rubber compound that protects without compromising flexibility; and U-shape grooves allow for better water displacement.

Even the tire compound itself is composed of “higher density of silica and carbon black materials,” leading to enhanced wet grip performance while promising fuel savings and increase mileage. Wet grip is also improved via full-depth sipes which ensure the flexibility of the tread blocks. Lastly, the undertread keeps the operating temperature cooler, leading to lower fuel costs.

Three key benefits are highlighted in the Agilis 3: Compared to its competitors, this Michelin exhibits shorter wet-braking distance (5% or up to 1.9 meters shorter when new and up to 11% [up to 3.8 meters] shorter when worn); 25% more mileage compared to the previous-generation Agilis; and 12% improved rolling resistance compared to “average competitors.”

Michelin declares that supply is assured, along with minimal environmental impact and lower shipment costs owing to the fact that 97% of the Agilis 3 supply is sourced within the Asia-Pacific region. The model is also engineered with a reinforced casing to “meet challenges of the region’s usages and road conditions.”

Mr. Chadderton expressed hope that Michelin will be able to make positive changes through this long-lasting tire, which need to be changed when the tread depth is reduced to 1.6mm instead of the usual 3mm in other tires — without adversely impacting safety and performance.

The Agilis 3 is now available at authorized Michelin commercial light truck tire dealers across the nation (visit https://www.michelin.com.ph/auto/dealer-locator). Sizes range from 13 to 17 inches diameter, and cover the entire light one-to-three-ton load segment of Philippines’ commercial light truck tire market. The Agilis 3 is also positioned for use in vans and pickups. For more information, visit https://www.michelin.com.ph. — Kap Maceda Aguila

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