WASHINGTON — The United States rejects China’s maritime claims in the South China Sea beyond what it is permitted under international law and stands with Southeast Asian countries resisting its pressure, US Secretary of State Antony Blinken said on Wednesday.
Mr. Blinken made the remarks in a call with Philippine Foreign Minister Teodoro L. Locsin, Jr., the US State Department said in a statement.
“Secretary Blinken pledged to stand with Southeast Asian claimants in the face of PRC pressure,” it said, referring to the People’s Republic of China.
China claims almost all of the energy-rich South China Sea, which is also a major trade route. The Philippines, Brunei, Vietnam, Malaysia, and Taiwan have overlapping claims.
The United States has accused China of taking advantage of the distraction of the coronavirus pandemic to advance its presence in the South China Sea.
The State Department said Mr. Blinken, who took office this week in the administration of Democratic President Joseph R. Biden, Jr., “underscored that the United States rejects China’s maritime claims in the South China Sea to the extent they exceed the maritime zones that China is permitted to claim under international law.”
US relations with China deteriorated under former US President Donald J. Trump over a variety of issues including the pandemic, Chinese policies in Hong Kong, Beijing’s treatment of its Muslim minority and trade.
Two weeks ago, the Trump administration imposed sanctions on Chinese officials and companies for alleged misdeeds in the South China Sea. — Reuters
LONDON — A surge of retail stock trading over the last year lit the fuse that sent shares of GameStop Corp. rocketing higher without a clear business reason, market watchers say, squeezing hedge funds that had bet against the video game retailer and other companies that were out of favor on Wall Street.
What is going on? Here are some answers:
BEHIND THE SURGE IN INTEREST OF RETAIL INVESTORS
More individuals have invested in stocks during the coronavirus disease 2019 (COVID-19) pandemic, and experts cite a number of reasons. Lockdowns boosted savings, policy stimulus put cash into people’s pockets, and extremely low interest rates drove investors to the stock market. Also, a proliferation of trading apps allowed anyone with a smartphone to buy or sell stocks for free.
Retail investors’ participation in US equity order flows increased to nearly 20% in 2020 from 15% in 2019, while orders from long-only funds fell to 6.4% last year from 9.7% in 2019, data from Swiss bank UBS showed.
Data this year suggests further growth. Online broker eToro said it registered more than 380,000 new users in the first 11 days of 2021, adding to the 5 million who used it last year, for example.
Retail investors are also buying stock options, the right to buy or sell shares at set prices without putting cash upfront. That takes their dollars much farther and can turbocharge share price movements.
WHAT HAS BEEN THE IMPACT OF THIS SURGE IN RETAIL TRADING?
Big US technology companies were among the beneficiaries last year. Facebook, Amazon, Apple, Netflix, and Google-owner Alphabet saw record inflows as their businesses benefited from lockdowns and their stocks soared.
With unprecedented stimulus and easy money policies from central banks, investors then shifted to smaller stocks, especially ones that got beaten down during the pandemic.
Market capitalization of world stocks surged to a record $88 trillion, a whopping $33 trillion jump from the March bottom. In the last few days, GameStop’s shares have jumped 1600%, with big gains also for shares of AMC Entertainment Holdings Inc., Blackberry Ltd., Nokia Oyj, and others.
WHAT’S HAPPENING ON REDDIT AND SOCIAL MEDIA?
Online discussions about stocks on social media platforms such as Reddit, Twitter, and Facebook are seen by many traders and analysts as fueling massive share price moves that cannot be explained by fundamental news or traditional valuation metrics. Retail investors have long discussed stocks on social media, but during the pandemic these forums appear to be gaining more influence. Investors pointed to discussion threads such as “WallStreetBets” on Reddit for driving the surge in GameStop.
Professional investors are paying attention. Dennis Dick, a stock trader in Las Vegas said he reads the site Seeking Alpha before work and keeps up to the minute by watching Twitter, but last weekend he also joined a group on Reddit “because I need to know what’s going on.”
HOW HAS THIS AFFECTED HEDGE FUNDS AND PROFESSIONAL TRADERS?
Massive share price swings for no apparent reason have caught Wall Street off guard. Short sellers, or investors who bet the price of a stock would fall, are getting crushed. Melvin Capital, a well-established hedge fund, took massive losses on its bets that GameStop share would fall.
Traders scrambling to cover these short positions and prevent further losses had to pay inflated prices, which added more fuel to the rally. Several traders told Reuters that this phenomenon—the classic short-squeeze—drew in still more retail investors hoping to ride the wave.
WHAT ARE THE RISKS?
With global stock markets surging since March despite the pandemic’s devastation of the real economy, investors and analysts are warning about asset bubbles. If markets turn, overvalued stocks will fall with them. Many trading platforms also offer loans to investors to buy shares and magnify their returns. In a falling market, that could wipe out people caught on the wrong side of the trade. — Thyagaraju Adinarayan/Reuters
MANILA – The Philippines’ Food and Drug Administration (FDA) has approved the emergency use of AstraZeneca PLC’s COVID-19 vaccine, the second to be approved in the Southeast Asian nation.
The known and potential benefits of AstraZeneca’s COVID-19 vaccine outweighed the risks to date, FDA chief Rolando Enrique Domingo told a news conference. The Philippines’ FDA has previously approved Pfizer and BioNTech’s coronavirus vaccine. — Reuters
MANILA – The Philippine economy contracted by slightly less than expected in the last quarter of 2020, official data showed on Thursday, helped by increased spending around the Christmas holidays.
The gross domestic product shrank 8.3% in the December quarter from a year earlier PHGDP=ECI, the statistics agency said. Economists in a Reuters poll had expected the economy to shrink 8.5% after a revised 11.4% fall year-on-year in the third quarter. — Reuters
Farmers try to save their crops after the fields were flooded in Alicia, Isabela province, Nov. 23, 2020. — PHILIPPINE STAR/MICHAEL VARCAS
By Revin Mikhael D. Ochave, Reporter
FULL-YEAR agriculture output contracted for the first time since 2016, after the sector was battered by the coronavirus disease 2019 (COVID-19) pandemic, a series of devastating typhoons, and the continued outbreak of African Swine Fever (ASF).
The Philippine Statistics Authority (PSA) reported on Wednesday that agriculture output, which contributes about a tenth to gross domestic product (GDP) and a fourth of the country’s jobs, shrank by 1.2% in 2020, a reversal from the 0.3% growth in 2019.
This was the first time the agricultural output saw an annual decline since 2016’s -1.5%.
In the fourth quarter, farm output slumped by 3.8%, worse than the -0.1% recorded in the same quarter of 2019 and the 0.7% growth in the third quarter.
This dismal performance makes it unlikely that fourth-quarter GDP, set to be announced today, will get a lift from the agriculture sector.
The PSA noted a drop in crops, livestock, poultry and fisheries production during the October to December period, when a series of strong typhoons hit parts of Luzon.
“We believe that despite the Taal Volcano eruption, COVID-19 pandemic, continued incidence of the ASF, and a series of strong typhoons, the country’s agriculture and fishery sector has remained pliant and resilient, facing head on and surmounting the huge challenges last year,” Agriculture Secretary William D. Dar said in a statement on Wednesday.
After missing the 1.5% growth target last year, the Department of Agriculture (DA) is aiming to achieve 2.5% growth this year.
Q4 SLUMP In the fourth quarter, crops output declined by 0.4% versus the 1% growth it posted a year ago, as palay (unhusked rice) and corn production dropped 1.4% and 0.3%, respectively. Improvements were seen in production of tobacco (13.4%), sugarcane (10%) and cacao (7.1%) during the period.
For the full year, crops production improved by 1.5%, led by increases in sugarcane (19%) and cacao (10%).
Mr. Dar said production of rice and corn are seen to increase in 2021, as long as there are no strong typhoons. The government has allocated around P20 billion in programs to improve output in the two subsectors.
In a mobile phone message, Roy S. Kempis, a professor at Pampanga State Agricultural University (PSAU) said it should be noted that crops output only slipped by 0.4% for the fourth quarter despite the typhoons.
“This means that crops such as rice, corn, fruits, and vegetables have been harvested before the typhoons arrived,” Mr. Kempis said.
Typhoons Quinta, Rolly, Ulysses and Vicky, swept through the country in the last three months of 2020.Data from the DA showed the combined crop damage caused by Quinta and Rolly reached P8.46 billion, while losses from Ulysses amounted to P6.72 billion, and damage from Vicky totaled P129.8 million.
Rolando T. Dy, executive director of Center for Food and Agri-Business of the University of Asia and the Pacific (UA&P) said in a mobile phone message that the sector can improve in 2021 by focusing on hybrid rice and by consolidating mechanization to increase yield.
IMPACT OF ASF Livestock production, which accounted for 15.4% of total agricultural output, slipped by 12.9% in the fourth quarter. Hog production decreased by 13.8% during the period, as the ASF outbreak persisted.
Poultry production slumped by 5.5% in the October to December period, bringing the full-year decline to 3.5%. Chicken production declined by 7.9% in the fourth quarter.
“Expectedly, the livestock and poultry subsectors performed poorly due to the ASF incidence in Central Luzon and low demand of chicken due to limited operation of fastfood chains and restaurants,” Mr. Dar said.
He said the DA has set aside an initial budget of P500 million for loans to backyard and semi-commercial raisers in an effort to improve local poultry production.
PSAU’s Mr. Kempis said the decline in poultry output was a surprise since he expected it to grow as Filipino consumers look for a substitute to pork.
“I believe factors that may have affected is the closure of poultry farms as a result of the crackdown by local government units on farms that adversely affect the environment with flies and obnoxious odor, and conflict between contract growers and integrators,” Mr. Kempis said.
United Broilers Raisers Association (UBRA) Chairman Gregorio A. San Diego said the poultry industry’s losses were more than what PSA data showed, adding this was the reason for the rise in the retail price of chicken.
Based on latest price monitoring from the DA, the price of whole chicken ranges at P160 to P200 per kilogram.
Similarly, DA reports showed that the price of pork shoulder, or kasim, ranges from P340 to P400 per kilogram, while pork belly, or liempo, is priced from P320 to P440 per kilogram, well above their suggested retail prices (SRP).
As a result, the DA recently proposed an executive order to put a price ceiling on the said products. If signed, the price of pork shoulder will be at P270, pork belly at P300, and whole chicken at P160.
FISHERIES Fisheries production fell 4.7% during the fourth quarter of 2020, a turnaround from the 2% growth it posted in 2019. This brought the value of production of the fisheries subsector to drop by 1.2% versus a growth of 1.5% the previous year.
The PSA said fish species such as fimbriated sardines, blue crab, threadfin bream, tiger prawn, tilapia, and yellowfin tuna posted lower output.
Asis G. Perez, Tugon Kabuhayan convenor and former national director of the Bureau of Fisheries and Aquatic Resources (BFAR), said the lower fisheries output can be attributed to recent typhoons.
“Major production areas for aquaculture and capture fisheries such as the Calabarzon Region and Bicol Region were devastated,” Mr. Perez said in a mobile phone interview.
However, Mr. Perez said the subsector is seen to quickly bounce back in 2021 since the fishing boats that were damaged during the recent typhoons have already been replaced or repaired, thus allowing fishermen to return to fishing.
“Further, the closed fishing season for roundscad (galunggong) will end on Jan. 31. It will augment the country’s fish supply,” Mr. Perez said.
FULL-YEAR agriculture output contracted for the first time since 2016, after the sector was battered by the coronavirus disease 2019 (COVID-19) pandemic, a series of devastating typhoons, and the continued outbreak of African Swine Fever (ASF). Read the full story.
THE Philippine trade deficit widened to a nine-month high in December as month-on-month imports went up, potentially indicating improved consumer imports as economic activity picks up, data from the Philippine Statistics Authority (PSA) showed on Wednesday. Read the full story.
The trade deficit reached $21.8 billion in 2020, according to the statistics agency. — REUTERS
By Jenina P. Ibañez, Reporter
THE Philippine trade deficit widened to a nine-month high in December as month-on-month imports went up, potentially indicating improved consumer imports as economic activity picks up, data from the Philippine Statistics Authority (PSA) showed on Wednesday.
Preliminary data from the PSA said that the value of merchandise exports fell 0.2% to $5.7 billion in December, reversing the 4% increase seen in November.
This drove the full-year export tally to $63.8 billion, or 10.1% lower than 2019 exports, better than the Development Budget Coordination Committee’s (DBCC) 16% decline estimate for 2020.
Merchandise imports shrank 9.1% to $7.9 billion in December from the same month in 2019 as it registered a year-on-year decline for the 20th straight month. But imports had improved month on month, rising 4.5% since November.
For full-year 2020, imports fell 23.3% to $85.6 billion from the comparable 12 months in 2019, worse than the DBCC’s revised target of a 20% decline for the full year.
The trade-in-goods deficit in December as a result amounted to $2.18 billion, down from the previous month’s $1.73 billion but still narrower than the $2.96 billion in the same month in 2019.
This brought the cumulative trade deficit for 2020 to $21.839 billion, smaller than the $40.67-billion gap a year earlier.
Total external trade in goods for the year — or the sum of export and import goods — plummeted by 18.2% to $13.66 billion.
Export sales of manufactured goods, which made up 87% of total sales in December, inched up 3.5% to $4.98 billion from the same month in 2019.
Electronics products exports — which accounted for 63% of merchandise goods — rose 4.9% to $3.61 billion. Agriculture-based exports slumped 46.8% to $186 million.
Meanwhile, imports of capital goods, which accounted for 34% of December imports, fell 12.5% to $2.7 billion compared with the same month a year earlier. Imports of mineral fuels, lubricant, and related materials slipped 50.8% to $644 million.
Imports of raw materials and intermediate goods went up 7.3% to $3 billion, while imports of consumer goods increased by 1.5% to $1.45 billion.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said lower outbound shipments to major trading partner China and a decline in agri-based exports impacted by recent typhoons weighed on an export sector that had expected expansion.
He noted the continued decline in imports was caused mostly by shrinking capital and fuel imports.
“Of note, however, was the surprise gain in consumer imports, eking out a 1.5% increase for the month which could give an indication of some resumption of economic activity as select lockdown measures continue to be relaxed,” he said in an e-mail.
According to Rizal Commercial Banking Corp. Economist Michael L. Ricafort, exports could have also been subdued due to a stronger peso exchange rate and slow recovery from export destination markets that saw a renewed surge in coronavirus disease 2019 (COVID-19) cases.
He said measures to reopen the economy supported faster monthly growth in imports.
“Resilience in foreign direct investment data could have also led to faster growth in imports, especially for capital equipment and other production inputs,” he said.
OUTLOOK Mr. Mapa said that fragile global recovery would limit export gains in 2021, while import demand remains subdued by lower investment activity from both firms and households.
“The net effect of these trends will mean that the 2021 trade deficit remains below the pre-COVID-19 of $3.1 billion, which in turn would be supportive of (the Philippine peso) as corporate demand for the dollar remains soft,” he said.
Milo K. Gusaninghe, JPMorgan EM Asia Associate, said in an e-mail that slow economic recovery would mean that a widening of the trade deficit would materialize in the second half.
Imports and exports could pick up this year, Mr. Ricafort said, if economies recover and the number of COVID-19 cases fall. Government spending on infrastructure could increase capital equipment and construction materials imports, he added.
“An offsetting risk factor is the new variants/strains of the coronavirus that are more contagious, leading to some lockdowns and travel restrictions in Europe and in other countries around the world, including the major export markets/trading partners of the Philippines, thereby could slow down the economic recovery prospects, as well as the pick up in demand for Philippine exports and imports,” he said.
THE Cavite government will look for a new partner to build an international airport at Sangley Point after it canceled the deal with MacroAsia Corp. and China Communications Construction Co. Ltd. (CCCC).
The Lucio C. Tan-led MacroAsia said in a disclosure on Wednesday that the Cavite provincial government informed the company a day earlier it was canceling the “notice of selection and award” for the Sangley Point International Airport project.
The MacroAsia-CCCC tandem was awarded the project to upgrade the Sangley Point airport on Feb. 12, 2020.
Reuters reported MacroAsia’s shares sank as much as 19% to a three-month low in the first 10 minutes of trade following the cancellation. The company’s shares closed 0.36% up at P5.55 each on Wednesday.
“Due to the various deficiencies (in) the submission of requirements to conclude the joint venture agreement for the Sangley Point International Airport, the Cavite Provincial Government Special Selection Committee has recommended the non-approval of the redevelopment of the former airbase as presented by the applying parties,” Cavite Governor Juanito Victor “Jonvic” C. Remulla, Jr. said on his Facebook page on Wednesday.
Mr. Remulla said he approved the recommendation on Jan. 26.
The Cavite provincial government had been negotiating with the MacroAsia-CCCC tandem to form a joint venture for the $10-billion international airport project.
Mr. Remulla said they will now have to “restart the project,” but hopes to have a successful negotiation with a qualified partner by October this year.
He said the provincial government’s decision should not deter other groups from pursuing the project. “I still believe that a new international airport is important for the country in the long run,” he said.
Mr. Remulla told BusinessWorld on Monday that the joint venture deal was not signed in December after the provincial government saw “infirmities” in the tandem’s submissions.
To recall, the MacroAsia-CCC tandem had asked Cavite to thrice extend the deadline for the complete submission of the post-qualification requirements for the airport project, which were supposed to be submitted 60 days after the group received the notice of award on Feb. 12, 2020.
Mr. Remulla noted the project, aside from the documentary requirements, also had “PR issues” to tackle.
“I’m going to be hit on all sides because there are other interested parties. I’m confident though that as long as I keep my nose clean and do the right things for the right reasons, good things will happen,” he explained.
The Cavite provincial government initially targeted to break ground for the first phase of the airport project by the second quarter of 2020.
In December 2019, the CCCC-MacroAsia consortium was the sole bidder for a $10-billion airport just outside the capital, one of two big projects that aim to take pressure off the four terminals of Manila’s notoriously packed international airport.
CCCC was among the Chinese firms blacklisted by the United States in August for their roles in constructing and militarizing artificial South China Sea islands.
Mr. Remulla said the blacklisting had nothing to do with the cancellation.
China’s CCCC was not immediately available for comment. — Arjay L. Balinbin with Reuters
The government is scheduled to announce the preliminary estimates for fourth-quarter GDP today (Jan. 28). — PHILIPPINE STAR/MICHAEL VARCAS
By Beatrice M. Laforga, Reporter
THE Philippine economy shrank a little less than previously estimated in the third quarter, the Philippine Statistics Authority (PSA) said on Wednesday.
In a statement, the PSA said Philippine gross domestic product (GDP), which indicates the value of final goods and services produced within a country during a specific period, contracted by 11.4% in the third quarter. This was a tad better than the initial 11.5% GDP contraction reported in November.
The government is scheduled to announce the preliminary estimates for fourth-quarter GDP today.
The PSA said several subsectors posted slower declines based on the updated data, namely Real Estate and Ownership of Dwellings (-19.4% from -22.5%); Education (-17.8% from -21.4%); and Other Services (-49.9% from -53.4%).
The upward revisions have been partly tempered by the faster-than-expected decline in net primary income (NPI) received from countries abroad to -29% from the -28.2% previously reported.
Despite this, the 13% year-on-year decline for gross national income (GNI) was unchanged for the third quarter.
The nine-month GDP average also remained at -10%.
Several economists said the slight improvement in the third-quarter GDP will not affect their current projections.
“It won’t affect my projections just yet. Pero ’yung (but for the) agriculture output, that’s concerning. I won’t be surprised if GDP has contracted in double digits,” said Security Bank Chief Economist Robert Dan J. Roces, who projected a 9.5% decline for the fourth quarter and a 9.9% drop for the entire year.
Agriculture output declined by 1.2% last year after the fourth-quarter production fell by 3.8%, following the devastation caused by a string of typhoons. This marked the first time the agricultural output posted an annual decline since 2016, when it shrank by 1.5%.
Ruben Carlo O. Asuncion, the chief economist at the UnionBank of the Philippines, Inc., revised his GDP projection to -6.5% (from -5%) for the fourth quarter and -9.1% (from -8.6%) for the full year.
“Downside risks may have been overlooked from weaker-than-expected government expenditures and also a weaker-than-expected export performance for the year,” he said via e-mail.
The PSA said on Wednesday that the trade deficit widened to $2.18 billion in December from the $1.725-billion gap in November last year, bringing the full-year 2020 shortfall to $21.84 billion.
Economic managers projected that last year’s GDP may have dropped by 8.5-9.5%.
Santos Knight Frank says e-commerce brings ‘important implications’
By Angelica Y. Yang
THE industrial and logistics sector — among the most stable real estate assets last year — would lead the recovery of the country’s property market in 2021, as the demand for e-commerce and coronavirus disease 2019 (COVID-19) vaccines rises, a real estate service provider said.
“Industrial and logistics will lead the recovery and will lead the renaissance and changes of the market. I think that’s driven by e-commerce, the (COVID-19) vaccine, and cold storage (demand),” said Rick Santos, chairman and chief executive officer of real estate provider Santos Knight Frank, Inc., in a media briefing on Wednesday.
Mr. Santos said that even before the pandemic, institutions in the region were already looking for investment opportunities in Southeast Asia’s industrial and logistics segment.
“I think that the market is only constrained by supply so there’s a large appetite for industrial and logistics locally but also for regional institution investments,” he said.
Kash Aristotle Salvador, the firm’s director for investment and capital markets, said during the briefing that warehouse demand would remain strong, and there would be an increase in cold chain solutions to accommodate the rollout of the COVID-19 vaccine.
“We see more venture capitalists have logistics and industrial warehousing space at the top of their priority list when it comes to looking for opportunities in the Philippines,” Mr. Salvador said.
“We’ve seen that happen last December 2020, where a venture capitalist has invested into a big logistics and warehousing company, and we feel that more and more of these companies will open up… (and) that would help the overall market,” he added.
In a press release, Santos Knight Frank described the industrial and logistics sector as the most stable asset class last year. It said that the adoption of e-commerce during the government-imposed lockdown had “important implications” on the growth of industrial and logistics.
“Santos Knight Frank expects the capital market for the industrial and logistics segment to become more sophisticated as venture capitalists and investment firms place the sector high on their list,” the group said in a statement.
The firm said that the country’s property market would exhibit a “soft rebound this year,” with key sectors such as industrial and logistics, office and residential showing signs of recovery.
The group added that the country’s office market would fare better than last year, but it is unlikely to immediately return to pre-pandemic levels.
“While COVID-19 forced occupiers to adopt remote work setups and increased Metro Manila’s vacancy to 9.8% in 2020, the office sector may see a gradual return by tenants to the physical workplace this year,” Santos Knight Frank said.
It added that business process outsourcing firms are expected to continue looking for new locations for expansion and office rightsizing in 2021.
Meanwhile, the residential market is targeted to rebound slowly but steadily, with the sector leaning in favor of buyers.
“Santos Knight Frank anticipates more opportunities for residential buyers with better deals in terms of price and payment terms. For instance, developers have extended flexible payment schemes to drive demand and, in terms of financing, more competitive interest rates from the banks will also be key in encouraging homebuying,” the group said.
BUDGET, regulations, cybersecurity, and inability to appreciate the benefits of technologies remain the top constraints that keep some companies from going digital, business leaders said.
Budget is a major constraint “because digital transformation is not cheap,” said David L. Almirol, Jr., chief executive officer and founder of software development and IT solutions provider Multisys Technologies Corp., at the BusinessWorld Insights online forum on Wednesday.
“It’s not cheap to build your own platform. It’s not cheap to do integration. It’s not also cheap to reconstruct your whole platform because you have to adopt the ‘new normal’ processes,” he added.
He noted there are ways to address this constraint. “For example, Multisys has programs where our customers don’t have to pay us. We do some kind of revenue-sharing with them. In fact, we have like 85 companies that we are supporting now.”
Gwendolyn de Lara-Kelley,first vice-president, chief technology officer, and head of information technology division of Insular Life Assurance Co., Ltd., said: “Top of mind would be regulations and cybersecurity.”
Putting in place a secured platform that is open to the public costs a lot, she noted. The insurance industry also has to deal with regulatory issues.
“For the insurance industry, regulation would be a constraint because it’s a highly regulated industry. There are strict policies with regard to e-commerce, data privacy, and capitalization requirements, which could in a way constrain the product development process or affect how we design the customer experience, or how quickly we want to adopt new technologies,” Ms. Kelley explained.
The buying public is also one of the major factors when going digital, because an innovation cannot be successful if people will not use it, she noted. “Hence, the readiness to adjust to the new technology that you are offering is also one of the constraints.”
Ma. Victoria “Marivic” C. Españo, chairperson and chief executive officer of P&A Grant Thornton, said: “Based on observation, the biggest challenge for companies is probably the inability to appreciate how technologies can help them achieve their business goals and execute their strategies.”
“For some companies, technology is nice to have and it seems to be the goal by itself. I believe that technology is not a goal. It is a tool, a means to achieve the strategic goals of the business. It is an enabler,” she added.
She stressed that companies should first define their strategies and the technology they need for the execution.
“If there is an alignment, then they will have a burning issue to execute their digital transformation plans,” she said. “Digitalization establishes the why. Why are we going digital? Because you need it to execute your strategies.”
Mr. Almirol pointed out that the focus of companies nowadays should be on “using something effective and readily available.”
“It’s no longer about building something… People cannot wait. Companies cannot wait, or else they will be left behind,” he said.
Ms. Kelley said life insurance companies have started seeing the current situation as an opportunity to partner with regulators and accredited industry associations to raise awareness, especially about the regulatory constraints they face amid their digital transformation journey.
