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BusinessWorld Insights: Safe Banking: Data Security on Online Payment Services

Join BusinessWorld Insights, “Safe Banking: Data Security on Online Payment Services”, a discussion on how security issues in digital finance are being addressed and how consumers can ensure that they are safely doing financial transactions online with speakers Philip Casanova, principal, Technology Consulting of SGV & Co.; Sparky Perreras, CEO and co-founder of PearlPay; Paulo del Puerto, chief marketing officer of Secuna; and moderator Arjay Balinbin.

#BUSINESSWORLDINSIGHTS​‘ Safe Banking Special is presented by Security Bank with the support of Olern and The Philippine STAR.

PHL seen ‘insulated’ from virus fallout

THE PHILIPPINES is still relatively more “insulated” to risks arising from the spread of the coronavirus disease 2019 (COVID-19) compared with its regional peers, despite a recent spike in the number of local transmission cases, according to S&P Global Ratings.

In an online webcast, S&P Senior Economist Vincent Conti said the Philippines may likely most feel the impact of the virus from the investment side but will be able to withstand its impact.

“At least within the region, the Philippines is… at least relatively more insulated than the likes of say, Vietnam or Thailand,” Mr. Conti said on Wednesday.

“And the reason for that is foreign direct investment (FDI) is a small part of overall investment in the Philippines, in nominal terms, as the share of inward FDI is only about 3% of total,” he added.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that FDI net inflows fell by 23.1% to $7.647 billion in 2019, from the $9.949 billion in 2018.

The FDI inflows exceeded the downgraded $6.8-billion target set by the central bank in November last year.

“Chinese inward FDI, in general, in most years is less than 3% of it,” Mr. Conti said.

Analysts had blamed global trade uncertainty, unclear path for the local tax reform and some regulatory risks as culprits for the weaker investor sentiment in 2019.

“Most of the impact (of the COVID-19) we will see from the investment growth side, which will be slower despite government efforts to keep up the infrastructure build, that’s because of the supply chain disruption [due to the virus],” Mr. Conti said.

According to the S&P senior economist, other experts’ research showed the virus outbreak will peak or last until the second quarter, possibly June.

While tourism is taking a beating from COVID-19, Mr. Conti said the Philippines is less reliant on the sector compared to other Asian countries.

“Compared with the likes of Thailand, for instance, and even Korea and Singapore, the Philippines tourism industry is not as important as the percentage of overall GDP (gross domestic product),” he said.

Estimates from the National Economic and Development Authority (NEDA) indicated a possible 1.42-million decline in foreign tourist arrivals this year, as its two biggest source markets China and South Korea are the most affected by the COVID-19 outbreak. NEDA estimated foregone gross value added for the tourism industry to hit around P93 to P187 billion this year.

Mr. Conti said the outbreak also has a “knock-on effect” on consumption and consumer confidence.

S&P last week downgraded its GDP growth projection for the country to 5.8% last week from the 6.2% it originally penciled in December. If realized, this would be slower than the 5.9% growth seen in 2019.

Earlier this week, NEDA Undersecretary Rosemarie G. Edillon said that they are now looking at a 5.5-6.5% GDP growth in 2020 due to the outbreak, from a previous target of 6.5 to 7.5%.

The Department of Health reported late Wednesday afternoon an additional 16 positive COVID-19 cases, bringing the total to 49.

RELIEF FOR BUSINESSES
Meanwhile, tax-collecting agencies are mulling possible relief measures for businesses affected by the COVID-19 outbreak, officials said.

Bureau of Internal Revenue Commissioner Caesar R. Dulay said the government’s largest tax-collecting agency is considering “targeted relief” for businesses reeling from the impact of COVID-19.

“Will consider but haven’t decided on how or when,” Mr. Dulay said in a mobile phone message. He did not elaborate.

For the Bureau of Customs (BoC), the country’s second-biggest tax-collecting body, its top officials will on Monday discuss possible measures for affected businesses, according to BoC Assistant Commissioner and Spokesperson Vincent Philip C. Maronilla.

However, Mr. Maronilla admitted that “limited din kasi ’yung relief na pwede namin ibigay (the relief measures we can give are limited) in terms of financial charges due to the government, but we are looking into some.”

Asked if the Department of Finance (DoF) has discussed any relief in terms of levies for affected sectors, Finance Secretary Carlos G. Dominguez III said he “never mentioned tax relief.”

Instead, Mr. Dominguez has instructed the Department of Tourism (DoT) and Tourism Infrastructure and Enterprise Zone Authority (TIEZA) to “creatively use their available funds” worth over P14 billion to support the tourism and travel sector, which has been battered the most due to travel bans, virus fears and canceled events.

“I never mentioned tax relief. We have asked DoT/TIEZA to creatively use their available funds (P14 billion) to support the tourism industry,” Mr. Dominguez told reporters in a Viber message.

At the same time, BIR Assistant Commissioner Elenita B. Quimosing said there are no plans to extend the April 15 deadline for filing of income tax returns, despite the rise in the number of COVID-19 cases.

“The commissioners really do not recommend extending the deadline for filing… We are saying that as early as now we have to do it early… It’s our obligation to file and pay taxes,” Ms. Quimosing said during a Palace briefing.

Meanwhile, Socioeconomic Planning Secretary Ernesto M. Pernia urged trade-related agencies to “ease implementation of some regulations that will allow firms to manage costs and provide financing or loan restructuring to micro and small enterprises whose operations may have already been affected.”

Finance Undersecretary Antonette C. Tionko earlier said various government agencies to continue to monitor affected sectors and companies to see how the state could “give them relief, in the event that this COVID-19 becomes very widespread.” — Luz Wendy T. Noble and Beatrice M. Laforga with G.M.Cortez

Grocery operator’s IPO secures SEC go signal

By Denise A. Valdez
Reporter

MERRYMART Consumer Corp. has gained the approval of the Securities and Exchange Commission (SEC) to conduct a P1.6-billion initial public offering (IPO), amid a volatile market facing negative investor sentiment over the coronavirus disease 2019 (COVID-19) outbreak.

In a statement yesterday, the grocery operator owned by businessman Edgar “Injap” J. Sia II said it received a pre-effective approval from the SEC to do a primary offer of 1.59 billion shares to be sold at P1 each.

The SEC also gave the go signal for the registration of 6 billion common shares with par value of P0.05 each, making a total of 7.59 billion shares in MerryMart to be listed at the stock exchange.

Proceeds from the IPO, which are estimated at P1.47 billion, will support the company’s expansion plan.

MerryMart, which opened its first branch in April 2019, is targeting to have 1,200 branches and generate P120 billion in systemwide sales revenue by 2023.

In a separate statement, the SEC said P1.03 billion of the MerryMart proceeds will be allocated to capital expenditures and initial working capital. Some P220.9 million will go to investments in distribution centers, and P220.1 million to general corporate purposes.

PNB Capital and Investment Corp. has been tapped as the sole issue manager, lead underwriter and sole bookrunner for the offering.

“We believe this step will further strengthen the market grip of all the industries that our group is involved in,” Mr. Sia was quoted as saying in a MerryMart statement.

The company plans to open 12 new stores as soon as the second quarter of 2020. By the end of 2021, its plan is to reach 100 branches across the country, where about 25 of these stores will be supported by proceeds from the IPO.

MerryMart’s plan to list at the exchange comes as the stock market entered bear territory on Monday when it fell to the 6,300 level. It closed at 6,353.26 yesterday, up 34.88 points or 0.55% from the previous session.

“We don’t think that it’s a good idea for MerryMart to pursue listing in the market given the negative sentiment right now due to the COVID-19 outbreak,” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a text message.

“Although it is offering basic needs such as foods, its business may also be hit by the outbreak since most people are avoiding crowded places and choosing to stay home,” she added.

“Since Merrymart is still new in its industry, it might most likely be challenged this year in terms of earnings, along with the negative sentiment in the overall market.”

PNB Securities, Inc. President Manuel Antonio G. Lisbona also said the market situation is indeed “scary” at present, but how MerryMart will do in its IPO will still depend on investor appetite.

“[I]f clients are willing to subscribe to the shares, then the offering will proceed. At the moment, we have not received any cancellations from our clients,” he said.

MerryMart is a wholly owned subsidiary of Injap Investments, Inc., Mr. Sia’s holding firm for his businesses. It has key shareholdings in DoubleDragon together with Tony Tan Caktiong’s Honeystar Holdings Corp.

Aside from MerryMart’s application, the SEC also approved yesterday the plan of Filinvest Development Corp. to issue up to P15 billion fixed-rate bonds, and the application of Altus Property Ventures, Inc. to list by way of introduction.

Altus will enter the stock exchange through the distribution of up to 100 million common shares as property dividends to shareholders of Robinsons Land Corp. These will be listed by way of introduction on the small main board of the stock exchange.

The shares will have an initial listing price of P10.10 each, representing 100% of the company’s issued and outstanding common shares.

PHL remains among weakest in rule of law

By Lourdes O. Pilar
Researcher

PHILIPPINE rule of law has remained one of the weakest in East Asia and the Pacific, according to an annual survey of the World Justice Project (WJP).

Where rule of law is strongest (or weakest)

The 2020 edition of WJP’s Rule of Law Index puts the Philippines at the 91st spot out of 128 countries globally, unchanged from the previous year. Its score was also unchanged at 0.47 on a 0 to 1 scale, where 1 indicates strongest adherence to the rule of law.

The score puts the Philippines at 13th out of 15 countries in East Asia and the Pacific (unchanged as in the previous year), and 13th out of 30 among lower-middle-income countries (compared to 14th previously).

WJP said the change in rankings “was calculated by comparing the 126 countries and jurisdictions measured in the 2019 index with the rankings of the same 126 countries and jurisdictions in 2020, exclusive of two new additions to the 2020 index [Kosovo and The Gambia].”

Denmark, Norway, and Finland were the top three overall performers, while the bottom three performers were the Democratic Republic of the Congo (126th), Cambodia (127th) and Venezuela (128th).

Meanwhile, New Zealand (seventh overall), Australia (11th), and Singapore (12th) were the top three countries with the highest rule of law scores in the East Asia and the Pacific region. On the other hand, the Philippines, Myanmar (112th), and Cambodia (127th) made up the region’s bottom three.

“More countries declined than improved in overall rule of law performance for a third year in a row, continuing a negative slide toward weakening and stagnating rule of law around the world. The majority of countries showing deteriorating rule of law in the 2020 Index also declined in the previous year, demonstrating a persistent downward trend,” the WJP said in its press release.

WJP also noted the Philippines as one of the countries with the largest average annual percentage drop in the rule of law over the last five years at 2.5%, along with Egypt (-4.6%), Venezuela (-3.9%), Cambodia (3%), Cameroon (-2.4%), Hungary (-2.1%), and Bosnia and Herzegovina (-2.1%).

Sought for comment, Justice Secretary Menardo I. Guevarra said the Filipinos’ respect for the rule of law “remains very high” and is “certainly much higher than the score given by the WJP.”

“[W]e continue to faithfully observe and adhere to our constitution as our fundamental law; our courts are functioning as they should; the crime rate is going down; and our legal system is as vibrant as any in this part of the world,” Mr. Guevarra told BusinessWorld in an e-mail.

“[H]owever, our structural challenges are numerous: lack of prosecutors, lack of judges, lack of resources relative to a huge population. Certain acts of violence have been sensationalized, and the existence of some misfits in law enforcement have attracted a lot of media attention, thus giving an unfair impression of widespread impunity and lack of respect for the law. While this may be true… at times, it is not, in my opinion, the general situation in our country,” he added.

In the WJP ranking, countries were assessed in 44 indicators that are, in turn, grouped into eight factors: constraints on government powers; absence of corruption; open government; fundamental rights; order and security; regulatory enforcement; civil justice; and criminal justice.

The Philippines’ score declined to 0.50 from 0.53 in the 2019 survey in terms of “constraints on government powers,” as well as that in “absence of corruption” (0.46 from 0.47); “open government” (0.52 from 0.53); and “fundamental rights” (0.41 from 0.42).

Meanwhile, the country saw improvement in its scores in “order and security” (0.65 from 0.60); “regulatory enforcement” (0.48 from 0.47); and “civil justice” (0.46 from 0.44).

Its score on “criminal justice” remained unchanged at 0.31.

The results of the 2020 WJP Rule of Index was based on more than 130,000 household and 4,000 expert surveys worldwide.

Where rule of law is strongest (or weakest)

PHILIPPINE rule of law has remained one of the weakest in East Asia and the Pacific, according to an annual survey of the World Justice Project (WJP). Read the full story.

Where rule of law is strongest (or weakest)

‘Hysteria’ over coronavirus hurting malls, hotels

PANIC over the spread of the coronavirus disease 2019 (COVID-19) around Metro Manila is hurting the property sector, as more Filipinos avoid visiting shopping malls and staying at hotels.

In a briefing in Makati City yesterday, Pronove Tai President and Chief Executive Officer Monique C. Pronove said the coronavirus outbreak will weigh heavily on the hospitality and retail sectors, as the number of foreign tourists plunge and major public events such as conferences are canceled or postponed.

“Mass hysteria will impact the property sector in the first half of 2020 as a reaction to COVID-19,” she said.

“Occupancy level will drastically decrease due to lower tourist arrivals, as well as temporary postponement of large MICE (meetings, incentives, conferences and exhibitions).”

Major trade events, such as the Philippine Hospitality Summit, Chamber of Thrift Banks Convention, Philippine World Building and Construction Exposition and Franchise Asia Philippines, scheduled this month have been postponed to later dates. These were supposed to be held at convention centers, hotels and events venues around Metro Manila.

Pronove Tai said occupancy levels in the hospitality sector have been averaging 65% for the last five years, but this may be halved due to COVID-19.

Government estimates showed the Philippines may lose as much as 1.42 million foreign tourist arrivals this year, amid a travel ban imposed on Chinese tourists. Of the 8.26 million visitor arrivals last year, Chinese tourists was the second-biggest source at 1.74 million.

At the same time, Ms. Pronove noted that major regional retail centers will see lower foot traffic, as Filipinos are advised by health officials to avoid crowded public spaces and practice social distancing.

While some call for a lockdown of Metro Manila, Ms. Pronove warned such a move will be counterproductive, as this will further drag the country’s economy that is largely powered by consumer spending.

“Our call to action is to disinfect… We have a responsibility to keep the economy going,” she said, adding that buildings should always be disinfected.

“What I’m very scared of (is turning public spaces into) virtually ghost towns. We don’t want that to happen, because jobs will be affected, the economy will be affected. We can prevent it through education,” Ms. Pronove said.

Mall operators have been implementing measures to ensure the safety of its customers and employees.

SM Supermalls President Steven Tan said temperature checks are implemented at the malls’ entrance, where alcohol dispensers are also available. He said common areas are regularly disinfected, and comfort rooms are sanitized every 30 minutes.

Ayala Malls, Inc. President Jennylle Tupaz in a statement said high-touch surfaces such as escalator handles, railings and elevator buttons are regularly disinfected, while sanitizers are available at elevators and concierge counters at all of its malls.

“Restrooms strictly follow our standard 5-10-15 protocol, where cubicles and water closets are cleaned for every five customers, surfaces are wiped every 10 minutes, and restroom amenities such as soap, hand sanitizers, and toilet papers are replenished every 15 minutes,” Ms. Tupaz said.

RESILIENT SECTORS
Unlike the retail and hospitality sectors, the office, residential and industrial warehousing segments are likely to be more resilient during these times.

“This hysteria will obviously impact those two sectors. But the leases for offices, for other sectors, these are three- to five-year leases. It’s not going to go down drastically. Landlords will always adopt a wait-and-see attitude,” Ms. Pronove said.

Property developers said they expect demand for residential spaces to remain high, although purchases may be delayed until the COVID-19 outbreak subsides.

In a separate panel discussion by online property marketplace Lamudi yesterday, officials of Federal Land, Inc. (FLI) and PHINMA Property Holdings Corp. said business has been performing well, and may remain so if things do not worsen in the next months.

“Our first two months were very good. The first week of March was also very good in terms of sales of our residential units. So we are not feeling the effect yet,” FLI Executive Vice-President Catherine C. Ko said.

“We anticipate, though, that…there may be a little resistance. We might have to hold off on some of our open houses… If people don’t come and see our model units, maybe there’ll be a move to postpone buying, but not to cancel outright,” she added.

PHINMA Property Chief Executive Officer Raphael B. Felix shared the same view: “Things were good. Do I expect it to be otherwise? Depends how this escalates.”

Unlike going to a mall or eating out at a restaurant, he said buying a property is not a decision that one makes overnight and could change in an instant.

“If it’s going to continue its trend — you get about five new cases every week — then I don’t see it affecting much. Why? Home buying is something you plan for… It’s something you plan for well in advance. People have this in their minds, they have it as an objective, and they’re out to do it,” Mr. Felix said.

However, property developers are looking at how the virus fallout may impact projects, in the event of disruption in the shipment of raw materials and lack of available labor.

“If you don’t have workers constructing the buildings, then we will be delayed. We have not seen any of that happening yet… but we are already monitoring,” FLI’s Ms. Ko said.

PHINMA Property’s Mr. Felix said building completions may be affected if shipments of raw materials from China are delayed.

“The major effect of all of these is to our income statement. Our accounting system in this country is based on percentage completion. If our construction projects don’t go, even if all the sales are there, we don’t recognize revenues. That’s a big problem for us,” he said. — Denise A. Valdez

Udenna takes over Chevron stake in Malampaya

Malampaya gas-to-power project fuels five power plants in Luzon with a capacity of 3,200 megawatts

UDENNA CORP. said on Wednesday that its unit had completed the acquisition of Chevron Malampaya LLC’s 45% stake in the Malampaya gas-to-power project located offshore of northwest Palawan.

“We see immense potential in natural gas, the fuel of the future, and we are optimistic and excited to bring its full benefits to Filipinos,” Udenna Chairman Dennis A. Uy said in a statement.

The completed deal comes months after Udenna announced in November last year that its subsidiary UC Malampaya Philippines Pte Ltd. had signed a sale and purchase agreement to acquire Chevron’s stake in the deepwater project, the country’s only source of natural gas in large commercial quantity.

The Malampaya field supplies five power plants in Luzon, serving 30% of the national demand for electricity with a capacity of 3,200 megawatts.

UC Malampaya is joining Shell Philippines Exploration B.V., which also has a 45% stake, and state-owned Philippine National Oil Co. Exploration Corp. (PNOC-EC), which owns the remaining 10%, in developing the almost two-decades-old Malampaya project under the Department of Energy (DoE)-awarded Service Contract 38.

“We look forward to working with our joint venture partners, Shell and PNOC-EC, and Malampaya’s key stakeholders, including the Philippine [DoE], to ensure that Malampaya continues to play an important role in developing a sustainable clean energy business in the Philippines,” Mr. Uy said.

Udenna’s statement could mean that PNOC-EC did not exercise its right to acquire 10% of the shares sold by Chevron.

In December last year, DoE Secretary Alfonso G. Cusi told reporters that PNOC-EC was exercising its right “because we feel that the acquisition price is very advantageous for [the company] to invest.”

Mr. Cusi chairs the board of PNOC-EC.

Sources at the DoE, Shell Philippines and PNOC either declined or did not respond when asked to validate whether PNOC-EC did not exercise its right.

The deal between Udenna unit UC Malampaya and the unit of Chevron Philippines, Ltd. to buy the full stake of the consortium partner was signed on Oct. 25, 2019. The parties did not disclose the value of the acquired stake.

Udenna holds Mr. Uy’s interest in diversified businesses, including distribution and retail of finished petroleum products, shipping and logistics.

The Davao City businessman’s portfolio has expanded to property development, education, food, gaming, tourism, and infrastructure. — Adam J. Ang

SEC plans to ease filing rules for firms amid virus

THE Securities and Exchange Commission (SEC) is planning to relax regulatory policies for corporations amid the coronavirus disease 2019 (COVID-19) outbreak.

In a statement Wednesday, the country’s corporate regulator said it is finalizing two memorandum circulars that would allow remote communication for meetings and extend the deadline for filing annual reports.

“The SEC will issue a memorandum circular to provide guidelines on the attendance and participation of directors, trustees, stockholders, members and other officers of corporations in regular and special meetings through remote communication,” it said.

“(It) is likewise set to issue a memorandum circular giving all affected companies more time to submit their annual reports (SEC Form 17-A), including annual financial statements, for the period ended December 31, 2019, as well as quarterly reports (SE Form 17-Q) for the first three months of 2020 for publicly listed companies,” it added.

This comes after the bourse operator Philippine Stock Exchange, Inc. advised shareholders of publicly listed firms on Tuesday to explore remote participation in annual stockholder meetings scheduled in the coming weeks.

“In line with the President’s declaration of a state of public health emergency, the Commission will explore and implement all appropriate measures to help contain the spread of COVID-19 and mitigate its effects,” SEC Chairperson Emilio B. Aquino was quoted as saying in the statement.

The SEC said it has started doing meetings remotely to explore the possibilities that companies may implement to address the threat of COVID-19.

The extended period for submitting regulatory filings will likewise accommodate companies that are affected by travel restrictions and work suspensions.

Until the circulars are out, the regulator said companies may use the SEC Express Nationwide Submission to file annual reports via courier. Copies of the filings may be obtained by the public by requesting through www.secexpress.ph or calling (02) 8737-8888.

As of writing, the number of confirmed COVID-19 cases in the Philippines stood at 33, some of which were results of local transmission of the virus.

The Department of Health advised the public to avoid going to public places and attending mass gatherings to limit the spread of the virus. — Denise A. Valdez

SMC foods and drinks unit posts 6% profit increase to P32 billion

PROFITS of San Miguel Food and Beverage, Inc. (SMFB) climbed 6% in 2019, driven by higher volumes of its products and an increase in average selling prices.

In a statement yesterday, the listed food and beverage arm of San Miguel Corp. (SMC) said its consolidated net income in 2019 stood at P32.28 billion. Consolidated revenues also improved 9% to P310.79 billion.

The main driver of the company’s growth was its beer business, which posted a 10% increase in revenues to P142.27 billion backed by increased beer volumes.

The food segment added P139.46 billion in revenues, up 5% year on year, due to the recovery of its poultry business previously challenged by an industry-wide decline. It noted consumer demand also remained strong for its key products such as Tender Juicy Hotdogs, Purefoods Chicken Nuggets, Purefoods Corned Beef, Magnolia Gold Butter and Star Margarine.

The spirits and liquor segment had the highest jump in revenues at 17% to P29.06 billion. The increase was driven by a 14% rise in volumes, which the company attributed to successful promotional campaigns.

“We continue to remain confident in the strength of the Philippine consumer and resilience of the economy,” SMFB President and Chief Executive Officer Ramon S. Ang was quoted in the statement as saying.

“We believe we have the ability to overcome the challenges we now face as we continue to expand the breadth of our product offerings and reinforce our presence in markets. We remain focused on delivering the best products, and providing improved results to all our stakeholders,” he added.

In a separate disclosure to the stock exchange, SMFB said its board of directors approved looking at alternatives to conduct the company’s annual stockholders’ meeting amid the coronavirus outbreak.

“In light of public health concerns…, the board approved for management to study whether to allow stockholders to attend and vote through remote communication…, and if so, for management to determine the mechanics to implement such mode of voting…,” it said.

The annual stockholders’ meeting of SMFB is scheduled on June 3.

Shares in the company at the stock exchange closed flat on Wednesday at P67 each. Shares in its parent SMC were also flat at P119.50 each. — Denise A. Valdez

Venture capital firm Kickstart sees more local investing opportunities

By Arjay L. Balinbin
Reporter

KICKSTART Ventures, Inc. said it sees more opportunities to invest this year in startups that offer Internet-of-Things (IoT) innovations for “smarter living.”

“We are seeing a lot in network technology and IoT. We are seeing a lot of opportunities around connected devices. Some [startups] are locals and some of them are from overseas. This is the year that there are more and more companies that think how to make devices more intelligent, connect them to the cloud and help people analyze data,” Kickstart Vice President Joan Cybil Yao said in a recent interview.

Kickstart is a venture capital firm, a wholly-owned subsidiary of Globe Telecom, Inc. and backed by Ayala Corp. and SingTel. It has invested in 42 digital startups across seven countries since it was established in 2012.

“The bulk of our investments are here in the Philippines. The others are in the US, Canada, Israel, Indonesia, Singapore, and Malaysia,” Ms. Yao said.

For her part, Kickstart President Minette B. Navarrete said the company is also looking to invest in areas that are relevant to the Ayala Corp. and the Department of Trade and Industry.

“We are faithful to the kind of future we want to build; hence, we have four descriptors for the future that we would like to build, and these four themes shape the kinds of investments we want to make,” she said.

The four investment themes, she said, are: A Frictionless Future, From Automation to Augmentation, Smarter Living, and A World of Plenty.

“How do we remove frictions for a regular person on a day to day basis? That’s what a frictionless future is… What we would also like to do is look for a technology which enhances the human capital and makes work less dangerous, less repetitive, more enriching, and more engaging. As for the smarter living, we are looking for a technology which makes people’s lives more secure, or maybe more enjoyable, or maybe helps them integrate better with other people in the community,” Ms. Navarrete said.

For the fourth theme, she said: “We are looking for solutions that are more reliable, more affordable, and more accessible to get services to wider population whether it’s water, energy or clean air.”

Ms. Navarrete said Kickstart started with $2.5 million seed fund in 2012, followed by $50 million growth fund in 2015.

“Last year, we got a new fund from Ayala, and that’s a commitment of $195 million,” she added.

On her assessment of the company’s performance last year, Ms. Navarrete said: “I think it was a big year for us. We nearly doubled the deal flow. We invested and raised more cash.”

Ms. Yao said the company is currently in talks with “quite a few” startups.

“We have presented them to our investment committee, and some are in the final stages of the deal while others are in the earlier stages,” she noted.

Amazon launches business selling automated checkout to retailers

AMAZON.COM Inc. on Monday is set to announce a new business line selling the technology behind its cashier-less convenience stores to other retailers, the company told Reuters.

The world’s biggest web retailer said it has “several” signed deals with customers it would not name. A new website Monday will invite others to inquire about the service, dubbed Just Walk Out technology by Amazon.

The highly anticipated business reflects Amazon’s strategy of building out internal capabilities — such as warehouses to help with package delivery and cloud technology to support its website — and then turning those into lucrative services it offers others.

Its chain Amazon Go has brought shopping without checkout lines into the mainstream, and the market for retail without cashiers — one of the most common vocations in the United States — could grow to $50 billion, US venture firm Loup Ventures has estimated.

Dilip Kumar, Amazon’s vice president of physical retail and technology, had no market forecast to share but said shoppers’ preferences will determine how big the business becomes.

“Do customers like standing in lines?” he asked. “This has pretty broad applicability across store sizes, across industries, because it fundamentally tackles a problem of how do you get convenience in physical locations, especially when people are hard-pressed for time.”

Unlike Amazon Go stores, shoppers will insert a credit card into a gated turnstile to enter, rather than scan an app. The turnstiles will display the logo “Just Walk Out technology by Amazon,” but all other branding and store aspects will be controlled by the retailer using the service.

Items picked up by a customer and any guests who enter with them will be added to the shopper’s virtual cart. The store will then bill the credit card once the person or group leaves the store — no bar code scans or checkout lines necessary.

Kumar said Amazon will install the technology including ceiling cameras and shelf weight sensors at retailers’ stores, whether they are new locations or retrofits, and it will have a 24-7 support line.

COURTING RIVALS?
A by-product of demand for the offering would be increased usage of Amazon Web Services, the company’s cloud that underpins its checkout-free systems.

Still, high demand is by no means certain. Other vendors including Grabango and AiFi are offering automated checkout to retailers, which in the past have been loath to hand deals to their rival Amazon that has been the biggest disruptor of their brick-and-mortar businesses.

Media reports have said Amazon was in talks to bring its technology to airport stores, for instance, rather than to Walmart Inc or Target Corp. Kumar said Amazon “potentially” could sell the service to big box rivals but would not speculate.

He declined to comment on the service’s business model or pricing, saying, “a lot of those are bespoke deals.”

One issue that may arise is who owns the shopper data, something that businesses typically want in order to tailor marketing offers and build their customer base.

Shoppers who desire a receipt will be able to type their email into a kiosk at any store. Amazon will send receipts to that address each subsequent time the credit card is used at a Just Walk Out location, no matter the retailer. Kumar said Amazon saves the email address and ties that to the credit card information, solely for the purpose of charging the customer.

Kumar would not discuss whether or how Amazon would integrate this into retailers’ loyalty programs but said, “These are the retailers’ customers.”

“We prohibit the use of Just Walk Out technology data for anything other than supporting Just Walk Out retailers,” he said. — Reuters

Yields on BSP’s term deposits drop on virus, lower oil prices

YIELDS on the central bank’s term deposits declined. — BW FILE PHOTO

YIELDS ON THE central bank’s term deposit facility (TDF) declined further on Wednesday amid developments in the coronavirus disease 2019 (COVID-19) outbreak and the recent drop in oil prices.

Bids for the term deposits offered by the Bangko Sentral ng Pilipinas (BSP) amounted to P217.39 billion on Wednesday, beyond the P150 billion auctioned off by the central bank and also higher than the P168.216 billion seen the previous week for the P120-billion offer.

Tenders for the seven-day deposits totaled P66.733 billion, surpassing the P50 billion on offer and also beating the P48.697 billion in bids logged on March 4.

Yields for the tenor ranged from 3.7% to 3.8%, down from the 3.75% to 3.85% margin logged last week. This caused the average rate to drop to 3.7557%, down by 2.64 basis points (bps) from last week’s 3.7821%.

For the 14-day term deposits, total bids amounted to P70.844 billion, higher than the P50 billion on offer as well as the P52.454 billion in tenders seen last week for the P40 billion on the auction block.

Banks sought yields ranging from 3.75% to 3.8125%, a slimmer band compared to the 3.765% to 3.85% range seen last week. This brought the average rate to 3.7757%, slipping by 5.45 bps from the 3.8102% seen on March 4.

On the other hand, bids for the one-month term deposits hit P79.813 billion, higher than the P50 billion on offer and also going beyond the P67.065 billion worth of tenders logged last week for a P30-billion offering.

Yields sought by banks for the 28-day tenor ranged from 3.675% to 3.78%, a wider margin compared to the 3.75% to 3.8% seen last week. With this, the average rate for the papers settled at 3.7436%, inching down by 4.24 bps from the 3.786% seen a week ago.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the lower yields to weaker investor sentiment caused by the coronavirus disease 2019 (COVID-19) outbreak, as well as tensions caused by the oil price war.

“These lower yields indicate the continuing impact of the COVID-19 and oil price war uncertainties on investor sentiment. The downward pressure on yields is expected to continue as players continue to take on lesser risks,” Mr. Asuncion said in an e-mail.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort also said the decline in oil prices may have dragged down yields further.

“The latest decline in TDF auction yields was largely triggered by the sharp decline in global oil prices, to new 4-year lows, thereby could reduce the country’s inflation rate and further increase the odds of a further cut on local policy rates,” Mr. Ricafort said in an e-mail.

Reuters reported that Saudi Arabia on Tuesday announced that it would heighten its oil supplies to a record high in April, raising the stakes in a standoff with Russia and effectively rebuffing Moscow’s suggestion for new talks.

On Monday, oil prices fell by about 30% after Saudi Arabia slashed its selling price in a bid to start a price war with Russia amid falling demand in the market on the back of the COVID-19 outbreak.

The BSP’s Monetary Board will have its second policy-setting meeting on March 19. BSP Governor Benjamin E. Diokno has said the COVID-19 outbreak, the emergency rate cut of the US Federal Reserve last week, as well as the 2.6% headline inflation print in February will be among the factors they will consider in their rate decision.

Rates of the BSP’s overnight deposit, overnight reverse repurchase, and overnight lending facilities are currently at 3.25%, 3.75% and 4.25%, respectively. — Luz Wendy T. Noble with Reuters