Foreign spouses and children of Filipinos traveling with them will now be allowed to enter the country starting Dec. 7, according to an order issued an inter-agency task force.
Former Filipino citizens may also come to the Philippines as long as they have pre-booked a quarantine facility and undergo coronavirus testing, the task force said in a resolution.
“They, too, must be subject to the maximum capacity of inbound passengers at the port and date of entry,” presidential spokesman Harry L. Roque said in a statement on Friday.
The task force ordered the Bureau of Immigration to come up with the rules for its enforcement, while the Tourism department must issue guidelines on accommodations.
It also allowed some companies to increase their shuttle services for employees as long as passengers are a seat apart. The Labor and Trade departments will come up with protocols for private shuttles.
The task force also adopted the StaySafe.ph app for contact-tracing and asked private companies to use it as well. — Vann Marlo M. Villegas
The Agriculture department has distributed P8.5 billion worth of crop inputs and other aid to farmers and fisherfolk affected by typhoons that hit the Philippines in October and November
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Cagayan Valley got the biggest help at P2.34 billion, followed by the Bicol region at P1.07 billion, the agency said in a statement on Friday.
The Mimaropa region consisting of the provinces of Mindoro, Marinduque, Romblon and Palawan got P914 million, while Calabarzon — Cavite, Laguna, Batangas, Rizal and Quezon got P736 million.
The Cordillera Administrative Region received P382 million in aid, while the Ilocos region got P313.8 million. Central Luzon received P281.5 million.
Agriculture Undersecretary Ariel T. Cayanan said the farmers also received rice, corn and vegetable seeds, cassava seed pieces, fertilizers, farm machinery and equipment and ready-to-lay chicken.
Farmers got P4.06 billion worth of rice, corn, and high-value crop inputs, cash aid worth P1.33 billion and P1 billion in insurance payments from the Philippine Crop Insurance Corp., the Agriculture department said.
Farmers and fisherfolk likewise received P800 million in emergency and livelihood loans, P670 million from the Bureau of Fisheries and Aquatic Resources, as well as P641.82 million in quick-response funds.
Crop damage from seven typhoons have reached P12.8 billion, it said. — Revin Mikhael D. Ochave
Data is crucial in effective decision-making, especially when tackling healthcare issues such as the novel coronavirus. Getting individuals to participate in an ecosystem of sharing data, however, is not that simple. To gain public trust, the Korea Centers for Disease Control and Prevention (KCDC) implemented key principles to protect the citizens’ data privacy.
“They announced that they collect only the minimum data needed and then deleted it afterwards,” said Tai Myoung Chung, a professor in South Korea’s Sungkyunkwan University, in a recent discussion on healthcare data. “Secondly, prior approval is needed before investigators can access private data. Thirdly, a security clearance is necessary for officials of both the KCDC and local government. Lastly, they use all kinds of model security solutions by security experts.”
South Korea, he added, invested US$240 million in a Data Dam project that collects and integrates information provided by both public and private sectors to manufacture useful data that can be shared via 5G networks. More than 5,000 companies and organizations are part of the project.
ADDRESSING DATA CONCERNS
Healthcare analytics has the potential to reduce the cost of treatment, predict outcomes of epidemics, and minimize the incidence of preventable diseases. From filing systems to smart wearables, the data the world collects slowly paint future forms of healthcare. Apart from data privacy, additional questions about data accuracy, standardization of data collection, and collaboration across borders need to be addressed in order to maximize this resource.
Gourish Singla, co-founder of London-based bioinformatics and data discovery platform Shivom, said that COVID-19 made everyone more open to collaborate and share data and resources. “One good thing that came out from this pandemic is that it brought the world together for sure. Everyone understands that [collaboration] will help us expedite solutions,” said Mr. Singla.
Shivom, which operates at the intersection of healthcare and blockchain technology, had to figure out how to aggregate genetic data—a difficult undertaking because of the privacy aspect. “Aggregating data was fragmented because biobanks and companies were reluctant to retain control of their data. We use blockchain, which is a revolutionary technology that allows you to share data as well as retain control of it. That has been a game changer.”
THE INTEROPERABILITY QUESTION
Both resource persons agreed on the importance of the government’s role in data access and management. “There’s so much data lying in government hospitals,” Mr. Singla said. “I think the first step will be digitizing the data and establishing protocols to determine its accuracy. The government is a key stakeholder. Interoperability will also be a key part. It’s the next step after the digitization of data.”
Sungkyunkwan University’s Mr. Chung, whose research is focused on data security and digital therapeutics, said that sharing data is beneficial but that an earnest discussion is necessary before interoperability across country borders can be realistically implemented.
“If we have a standard for data collection interoperability, will it be freely accessible to anonymous stakeholders? Data itself is the money,” he said. “Are countries willing to exchange data with other countries? We have an open-source community but I don’t see any open-data community yet.”
Rakuten Viber is introducing new features such as Chatbot Payments, through a partnership with Google Pay and Apple Pay, as part of its tenth anniversary. The service allows users to purchase products and services, and to accept payments directly through the app, marking Viber’s move towards fintech.
In the Philippines, this feature will be rolled out soon through partnerships with telcos like Globe. Filipino users will be able to check out and order from small food businesses through the soon-to-be-launched FoodPH bot. Users will also be able to pay for their orders via in-chat payments.
“Small businesses that don’t have money and knowledge to create a mobile app can go to Viber and create chatbots to serve their customers,” said Anna Znamenskaya, the platform’s chief growth officer.
Sending money through Viber is as simple as sending messages, said Viber Chief Executive Officer Djamel Agaoua. “We want to democratize and disrupt [payments], and make it efficient in cost and convenient to use,” he said.
Mr. Agaoua added that user privacy remains a priority. He cited Viber’s history, and how it cut business ties with Facebook for mishandling their user data for profit. The messaging app, which considers security as one of its core strengths, earlier this year pulled out all its ad spending on the social media platform and removed the Facebook Connect and GIPHY features within the app.
“Against our own monetization potential, we decided to prioritize our consumers first,” Mr. Agaoua said during a recent media roundtable. “If you said, ‘I love you,’ how do you know that thousands of engineers weren’t reading your message? It’s not a world we want to live in. We saw that by choosing to prioritize security, we needed to be creative when it comes to monetizing.”
Viber, whose advertising income is less than 20% of its total revenue, aims to be a sustainable alternative to Facebook.
“Our research says that people like Viber because it’s simple,” said Ms. Znamenskaya. “On Facebook, you’re overwhelmed. You want to have more intimacy. If you just want to send a message, you don’t want to read all these other things you didn’t ask for.”
Viber started out in 2010 with a simple goal to offer free calls to iPhone users. It has since evolved into a communication platform offering a suite of features like messaging, group chats, video calls, and chatbots, all protected by end-to-end encryption. Viber noted a 129% increase in community views and a 208% growth in messages sent to Communities in the first half of 2020 versus the same period last year. There was also an increase in the following during the quarantine: 43% in daily activations, 17% in monthly active users, 18% in daily active users, 22% in outgoing calls, and 35% in incoming answered calls. — Patricia B. Mirasol
Understanding disruptive forces such as artificial intelligence (AI), digital natives, and the gig economy will strengthen the future of any business, said entrepreneur, serial investor, and public speaker Maulik Parekh in his book, Futureproof Your Company and Career.
“In this rapidly changing world, we have a choice to make—either we future-proof ourselves or we risk becoming extinct,” Mr. Parekh said.
It was during his leadership in outsourcing companies like Inspiro and SPi Global that he began to recognize these disruptive forces and gleaned insights on how to future-proof companies and careers.
At the virtual book launch, Mr. Parekh said that AI can do jobs that are repetitive, boring, predictable, and have defined objectives. Investing in becoming a better human by inspiring and leading, on the other hand, will insulate you from the risk of AI automation for the next 10 years at least.
Digital natives, meanwhile, have the potential to disrupt the status quo of any company. To partner with Gen Zers and millennials, it is important to know what their values and motivations are. Equally important is optimizing their skillsets.
Laura Butler, senior vice-president for people and culture at Workfront, an enterprise work management company based in Utah, said that purpose is the connective tissue that connects the four generations (from baby boomers to Gen Zers) in the workforce. “People are more engaged if they feel a purpose in their work,” she said. “That’s not something unique to millennials. Everyone feels that.”
Ms. Butler was a guest at the virtual launch along with Paula Vogliazzo, founder of management consulting firm Scale Up Business in Buenos Aires; and Manuel V. Pangilinan, managing director and chief executive of Hong Kong-listed First Pacific Co. Ltd.
Being adaptable to changes in workforce trends was also a recurring theme throughout the event.
The rise of the gig economy is all about humanity’s innate desire for freedom, said Mr. Parekh. “I know some Harvard graduates who have left traditional employment and said ‘freedom is what I’m after’ … One left his law firm and became a freelancer servicing clients from around the world,” he added.
Ms. Vogliazzo advised companies to start planning their businesses to make them attractive to these professionals. “Freelancers will collaborate with your company but not on a full-time basis.”
A crucial point taken up at the aforementioned event was the reminder that the future belongs to those who are humble, curious, and learnable.
Mr. Pangilinan quoted Winston Churchill’s aphorism: “Success is never final. You’re only as good as your last deal, your last quarterly results—and then the world expects more and more of you. Savor your success because guess what? Tomorrow, people expect more from you.” He said, too, that failure is part of the rich tapestry of life: “Failure is not fatal. Don’t feel impervious to failure. Know that it’s a fleeting moment—whether it’s success or failure.” — Patricia B. Mirasol
BRITISH technology company Dyson Ltd. is planning to open a software lab in Alabang, Muntinlupa City, creating 400 software engineering jobs for research and development (R&D) work over the next three years.
The project is part of a global Dyson research expansion, in which £2.75 billion (P177 billion) will be invested into developing new technologies and products over five years.
Scott Maguire, Dyson chief operating officer, said in an online press conference on Thursday that the company plans to tap into the talent pool from local technical universities.
“The investment that we’re putting in there is very much around us growing our software engineering capability and up to 400 engineers. Hopefully in the next few years, we’ll be as aggressive as we possibly can and we’re confident there’s a lot of good talent in the Philippines,” he said.
Dyson has been operating in the Philippines to manufacture digital motors for some products like vacuums and hand dryers. The facility employs 600 people and produces 13 million motors a year.
Mr. Maguire said that the new facility will extend their Philippine operations from advanced manufacturing of technologies to engineering and inventing new technologies.
“So, it really is much more of the value chain that’s going into the Philippines for Dyson.”
Dyson software engineers, he said, work on sensor software, motor controllers, wireless, robotics, and cloud for new technologies.
The Philippine R&D center will also collaborate with other Dyson centers globally, including the United Kingdom, United States, Shanghai, Singapore, and Malaysia.
Through the global expansion, Dyson plans to double its product portfolio and enter new fields beyond home products.
“Dyson will invest further into research in the fields of robotics, next generation motor technology, intelligent products, machine learning, connectivity, and material science,” the company said in a press release on Thursday. — Jenina P. Ibañez
THE Department of Tourism (DoT) has condemned the party that took place in Boracay on Oct. 31, saying such irresponsible action compromises efforts to revive the tourism industry. The DoT, which serves as co-vice chair of the Boracay Inter-Agency Task Force for rehabilitation, said in a statement that it also “supports the recommendation of the Boracay Inter-Agency Rehabilitation Management Group to Malay Mayor Frolibar S. Bautista to close down the erring establishment in view of its lacking of business permit and necessary clearances as determined by the authorities.” Tourism Secretary Bernadette Romulo-Puyat also asserted that while the “halloween party” involved an establishment that does not require a DOT-accreditation, all stakeholders must observe guidelines as the industry aims to strike a balance between ensuring health safety and resuming economic activities. “The jobs and livelihoods that were recently restored in these sites will be affected once again if an outbreak occurs in the area due to the LGU’s negligence,” Authorities are currently investigating the incident and looking for at least 100 individuals who took part in the party, according to Lt. Col. Joem Malong, Western Visayas police spokesperson. “The attendees were not wearing face masks nor were practicing social distancing,” Ms. Malong said, citing a video clip of the event. One of the organizers, Jack Bates, said the activity was a private birthday party although an investigation revealed they collected P250 from each of the participants as entrance fee. Mr. Bates was slapped with a P5,000 fine. Two other persons, identified as Aaron Vega and Vanessa Claire, were charged for wearing police uniforms as costumes during the party, which is illegal under Article 179 of the Revised Penal Code. — with a report from Emmanuel Tupas/PHILSTAR
Economic managers are hoping the timely passage of the measure cutting corporate income tax and reforming the tax incentive system will help the economy bounce back faster. — REUTERS
By Charmaine A. Tadalan, Reporter
THE SENATE on Thursday approved on third and final reading a measure that will immediately lower the corporate income tax (CIT) to 25% from the current 30% rate as well as streamline fiscal incentives.
With 20 affirmative votes, one negative vote and zero abstentions, the chamber passed Senate Bill No. 1357, the “Corporate Recovery and Tax Incentives for Enterprises Act (CREATE),” which is also intended to capture investments of companies relocating out of China.
Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the timely passage of the CREATE bill will help the economy bounce back faster from the recession.
“It will certainly help in our recovery and also to give all SME (small and medium enterprises) an incentive to be more productive and competitive,” Mr. Chua said in a Viber message on Thursday.
CREATE provides for a reduction of CIT to 25%, starting July 2020, and a reduction of one percentage point annually from 2023 to 2027.
Senator Pia S. Cayetano, chair of the Ways and Means Committee, said the bill’s current version provided to lower the CIT to 20% for businesses with income below P5 million.
“Just the other day, we also accepted a major change… 20% na lang ang CIT for those with income below P5 million,” she said during Thursday’s session. She noted the amendment was introduced by Senator Ralph G. Recto.
President Rodrigo R. Duterte had certified the bill as an urgent measure, allowing the chamber to do away with the three-day interval in passing measures on second and third reading.
Albay Rep. Jose M. Clemente S. Salceda, who chairs the House Ways and Means Committee, said there will be no need for a Bicameral Conference Committee since the House will adopt the version approved by the Senate.
“House will adopt the Senate version,” he told reporters via mobile phone message.
The CREATE bill forms part of the government’s economic stimulus package, along with the Bayanihan to Recover as One Act, under Republic Act 11494, that allocates up to P165 billion for assistance. The government will forego P40 billion in revenues for fiscal year 2020, and P650 billion in the next five years.
The CREATE bill will grant exporters and domestic industries between four to seven years of income tax holiday. They may later pay the 5% gross income earned (GIE) for 10 years.
The bill also increased the sunset provisions to 10 years from the initial proposal of four to nine years. A much earlier version, the Corporate Income Tax and Incentives Rationalization Act, provided a two- to seven-year period.
Ms. Cayetano also said the bill mandates the Fiscal Incentives Review Board (FIRB), chaired by Finance Secretary Carlos G. Dominguez III, to oversee incentives granted by investment promotion agencies (IPA) and other government agencies.
“There will be an FIRB, which based on the compromise version coming out of the period of amendments, investments P1 billion and below, IPAs will handle it.But for (investments that are) P1 million above, FIRB will handle it, but it will still go through the IPA,” she said. “If it’s P1 billion and above then they submit it for the approval of the FIRB.”
Senator Richard J. Gordon, the lone senator to vote against the measure, had proposed to exclude the Subic Bay Metropolitan Authority, Clark Development Corp., Authority of Freeport Area of Bataan, Cagayan Economic Zone Authority, Zamboanga City Special Economic Zone Authority, and Tourism Infrastructure and Enterprise Zone Authority among others from the bill’s coverage.
The amendment, however, was rejected by a vote of 16-5. The chamber had planned to approve the bill on Wednesday evening, but was deferred until Thursday to accommodate Mr. Gordon.
Senate Majority Leader Juan Miguel F. Zubiri said he had called Mr. Dominguez on Thursday morning to find a compromise, but the secretary said the proposed exemption would be a “deal-breaker.”
“He was very firm that this is a deal-breaker, that they will veto it,” Mr. Zubiri said.
CREATE is among the priority measures President Duterte mentioned in his fifth State of the Nation Address. It is also among the bills listed down by 14 business groups as priorities in the opening of the session.
Its counterpart measure, House Bill No. 4157, was approved by the House in September 2019. — withBeatrice M. Laforga
Hospitals were nearly overwhelmed with the number of coronavirus disease 2019 (COVID-19) cases at the start of the pandemic. Picture taken June 26. — REUTERS/ELOISA LOPEZ
By Denise A. Valdez, Senior Reporter
THE coronavirus pandemic is prompting companies to prioritize big investments in the healthcare sector, in preparation for any future outbreaks.
“People are saying, how does one learn from a crisis like this? I think one area that all of us must focus on is reinforcing our whole healthcare system… I think pandemics will be with us as a new form of crisis in the future,” Jaime Augusto Zobel de Ayala, chairman and CEO of Ayala Corp., said during the BusinessWorld Virtual Economic Forum on Thursday.
Noting that the whole world is getting denser and the Philippine economy relies heavily on exporting its workers, Mr. Zobel said it is imperative to prepare for any viral outbreak in the future.
“I believe all of us should have a renewed focus on our healthcare platforms, on what we need both from a government and from a private sector point of view, and make sure something like this doesn’t catch us unprepared in the future again,” he said.
The Ayala Group started investing in healthcare five years ago with the formation of Ayala Healthcare Holdings, Inc. (AC Health). Mr. Zobel said having a team of healthcare professionals within its group was a big help during this crisis.
Focusing on healthcare is also seen as key to reviving consumer confidence, which would help businesses recover faster.
Citing the government’s efforts on how to bring COVID-19 vaccines to the Philippines, Magsaysay Group of Companies President and CEO Doris Magsaysay-Ho said these developments help in improving market confidence that will spur more consumption.
“I think that in itself is hopeful that we’re on to that next step of how to ensure health is really addressed, and how fear can be overcome so that people can go back to their normal consumption and modes of living,” Ms. Magsaysay-Ho said.
The partnership between the public and private sector is also heightened during crises like this, which Mr. Zobel said should push companies to increase coordination with groups outside of its own.
“Solutions cannot be found by one entity by itself… The pandemic will not be the last thing that we have to tackle as a community. There are going to be so many other issues where we not only have to coordinate as a country, we have to coordinate with other countries as well,” Mr. Zobel said.
However, Ms. Magsaysay-Ho noted that businesses must also remember to remain competitive despite a shared crisis.
“The pandemic forces all to have a common purpose because we have a common enemy… (But) we have another (challenge), which is… competition. We have other countries that are competing with us,” she said.
She cited as example the companies that left China at the start of the pandemic, but which opted to go to other countries in Southeast Asia, and not the Philippines.
“We must be able to be in that picture of where people will come to invest,” Ms. Magsaysay-Ho said. “We must think a little more strategically to see how we can really build that prosperity.”
Mr. Zobel noted that the Philippines is full of very capable individuals in the medical field, which should serve as a competitive advantage against regional peers.
“I think we have the software, which are extraordinary nurses and doctors. We now have to support that with more capital infusion into some of the bricks and mortars side, the equipment side, and see if we can create the kind of infrastructure a country like ours would need for its healthcare space,” he said.
Jeepney drivers had to beg for money in the streets, after they were left unemployed as public transportation was halted during the strict lockdown earlier this year. — PHILIPPINE STAR/MICHAEL VARCAS
By Beatrice M. Laforga, Reporter
THE COUNTRY’S unemployment rate will likely remain at around 9-10%, roughly double its pre-pandemic level, until mid-2021, Asian Development Bank (ADB) Country Director for the Philippines Kelly Bird said.
Speaking at the BusinessWorld Virtual Economic Forum on Thursday, Mr. Bird said unemployment will remain high as scars from the coronavirus pandemic are expected to reduce the potential productive capacity of the economy in the medium term.
The unemployment rate stood at 5.1% at the end of 2019, but the strict lockdown imposed in mid-March caused joblessness to spike to a multi-year high of 17.7% in April.
The unemployment rate eased to 10% in July as the economy gradually reopened. The government’s economic managers project this to settle between 11% and 13% by year’s end.
Mr. Bird said increasing investments on skills development, apprenticeship, and workplace improvement can help workers keep their current jobs and new graduates find jobs as the economy recovers.
The ADB projected the country’s gross domestic product (GDP) will shrink by 7.3% this year.
“While we project a strong rebound of 6.5% growth in 2021, we still don’t expect the Philippine economy to reach its pre-COVID, inflation-adjusted GDP until 2022 and its per capita GDP by 2023. This recovery path is not unique to the Philippines; many other countries are likely to experience this path as well,” Mr. Bird said.
The ADB official noted the “worst is over” for the Philippine economy, citing signs of recovery in various economic data for September. For instance, goods exports grew by 2.2% in September after six months of decline, while the annual drop in imports easing to 16.5% that a month from 21.3% contraction in August. Remittances sent by overseas Filipinos rose by 9.3% year on year in September, while expansion in manufacturing was seen in the same month.
“This is very good news, but this recovery is going to be fragile and slow as the pandemic affects consumer and business confidence the most. The economic recovery will surely depend on the Philippines’ continued response to dealing with the virus over the next 12 months and the pace of opening up the economy safely,” he said.
In the same forum, Ndiamé Diop, World Bank country director for Brunei, Malaysia, the Philippines and Thailand, stressed the need for a coordinated response to the crisis, particularly on public health, fiscal and monetary policies, and structural reforms.
“By implementing agile fiscal, accommodative monetary policy and advancing structural reforms, the Philippines is really poised to really recover relatively well in the next two years to come,” he said.
Mr. Diop said the country entered the crisis with a 39.6% debt-to-GDP ratio as of end-2019, one of the lowest in the region and the world. This is projected to reach 53.9% by yearend as the government borrowed more amid the crisis.
“Such a strong fiscal position avails the Philippines the fiscal room to ramp up growth, fight the virus and save lives, without threatening fiscal sustainability,” Mr. Diop said.
ADB’s Mr. Bird said the government’s fiscal response was “appropriate” after focusing on direct income transfers through wage subsidies and emergency grants to poor families.
Coupled with a low interest rate environment to encourage lending, he said these measures have been proven to be the most effective response to help struggling companies, save jobs and stimulate spending.
Mr. Diop said a balanced fiscal strategy involves providing immediate support to households and the vulnerable sector in the short term, and making investments to boost economic growth, such as in infrastructure projects.
Messrs. Bird and Diop highlighted the importance of massive infrastructure spending because of its high multiplier effects, ability to create direct and indirect jobs, and support long-term growth.
After the pandemic, Mr. Diop said the Philippines, like Indonesia, can benefit from a favorable demographic dividend if key reforms on the supply side of the economy will be implemented, such as closing the infrastructure gap, investing in education and skills, and continuing structural reforms to improve business environment.
“What demographic dividend does, especially in countries where poverty is falling, is it energizes the demand side of the economy but if the demand side of the economy is moving, what we need is to reform the supply side to post a high growth,” Mr. Diop said.
“The Philippines will remain well-placed to bounce back but it will not be over for the Philippines, nor any other country in the world until it is over for the rest of the world,” he added.
MORE FOREIGN CAPITAL entered than left the country in October to yield a net inflow after seven straight months of outflows, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.
Foreign portfolio investments — also known as “hot money” because of the ease by which these funds enter and exit the economy — posted a net inflow of $439.46 million, BSP data showed.
The October tally is a 320% surge from the $104.53-million net inflows in October 2019 and a reversal from the net outflows worth $493.65 million in September. This is also the highest net inflow since the $762.82 million seen in January 2019.
October was also the first time since February that hot money recorded a net inflow, suggesting signs of improvingsentiment in the local equities market.
“The large chunk channeled into securities was reflective of recent improvements in the local stock market. There are emergent signs that foreign investors have begun coming back with some risk-on tone,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a text message.
A few signs of normalization in the global economy lifted equity markets in general, said Nicholas Antonio T. Mapa, senior economist at ING Bank N.V. Manila.
In October, hot money inflows reached $1.352 billion, higher by 8% than the $1.252 a year ago and more than double the $594.02 million seen the prior month.
Meanwhile, gross outflows declined 20% to $913.49 million from the $1.148 billion recorded in October last year and by 16% compared with the $1.087 billion seen in September.
BSP data showed investments were mainly from the United Kingdom, the United States, Singapore, Luxembourg and Hong Kong, which altogether made up 80.9% of the total.
About 78.8% of these investments were funneled into securities of mainly information technology, banks, holding firms, real estate companies, and food, beverage and tobacco firms. Meanwhile, 21.2% of the investments during the month went into government securities.
For the first 10 months of the year, hot money continued to yield a net outflow of $3.943 billion, surging 221% from the net outflow worth $1.225 billion during the same period a year ago.
The BSP attributed the bigger outflows of hot money to the uncertainty arising from the coronavirus disease 2019 (COVID-19) pandemic’s impact on the world economy and financial system. It also cited “international and domestic developments such as geopolitical tensions, certain corporate governance issues and extended quarantine measures in select regions in the country.”
The BSP expects hot money to yield net inflows worth $2.4 billion this year and $3.5 billion by 2021, respectively.
“Going into the last few months of the year, positive sentiment will likely remain, this time brought about by positive trends in vaccine development and the now seemingly peaceful transition for US President-elect (Joseph) Biden,” Mr. Mapa said in an e-mail.
But there could still be risks to continued net inflows in the last part of the year, said Mr. Roces.
“The general direction of market sentiment may not yet be consistent with resurgence in virus cases globally and a still uncertain outlook; although positive news from the vaccine development front provides some upsides,” he said.
THE MONETARY BOARD has approved a regulatory framework for digital banks, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Thursday.
“We see these [digital] banks as additional partners in further promoting market efficiencies and expanding access of Filipinos to a broad range of financial services,” Mr. Diokno told reporters via Viber.
Under the framework, digital lenders will be classified differently from universal, commercial, thrift, rural, cooperative, and Islamic banks.
The Monetary Board may also limit the number of digital banks that may be established, considering the total number of applications received and the current banking landscape in the country.
“Essentially, the BSP is looking to attract players with strong value proposition, sufficient financial strength, technical expertise of management and effective risk management,” Mr. Diokno said.
The latest draft of the framework was released last month. Among the proposed provisions was a minimum capital requirement of P1 billion for digital banks.
The approved framework has yet to be released.
BSP Deputy Governor Chuchi G. Fonacier confirmed in a text message on Thursday that the minimum P1-billion capital requirement was retained in the approved framework.
Digital banks need to pay the BSP a P250,000 application fee and a P12.5-million license fee, based on the latest proposal.
These lenders are also expected to maintain a main office for management and support operations for customer concerns and as a point of contact for the BSP and other regulators, the central bank said.
“Digital banks are also allowed to tap cash agents and other qualified service providers subject to existing regulations to complement the innovative delivery of financial services,” it added.
Mr. Diokno has said that digital banks could help the BSP achieve its goal to bring 70% of adult Filipinos into the financial system and to have at least 50% of payments by volume and value done digitally by 2023.
Only 29% of Filipino adults had accounts with financial institutions as of 2019, leaving some 51.2 million unbanked, BSP data showed.
Meanwhile, e-payments made up 10% of the total transaction volume in the country in 2018 from only 1% in 2013, data from the Better Than Cash Alliance showed. By value, online transactions made up 20% of the total in 2018 from just 8% in 2013.
“It is our long-term goal to see more digital-savvy Pinoys, such that it becomes second nature for them to perform routine financial transactions online — making payments and fund transfers, or availing of credit, insurance, and investments,” Mr. Diokno said in a forum on Thursday. — L.W.T. Noble
“I believe all of us should have a renewed focus on our healthcare platforms, on what we need both from a government and from a private sector point of view, and make sure something like this doesn’t catch us unprepared in the future again,” he said.