Wealth management and preservation for the ultra-high-net-worth (UNHW) is a daunting task which goes beyond financial management. More importantly, it involves the perpetuation of the family legacy. This is why it is equally important to ensure the general well-being of family members across generations.
UHNW families have various business interests and own substantial assets locally and offshore. With multiple sources of income, they have complex needs and face numerous concerns that need to be managed well. First among these is BUSINESS — the setting up of strategic vision & direction as well as day-to-day business demands. Second is management of financial and & real ASSETS, owned individually and by the family. Third is FAMILY MANAGEMENT.
The first generation is usually focused on business and asset management because wrong decisions could result to huge financial losses. For this reason, they engage the best consultants in the industry to deploy or reallocate assets to the next most promising venture, talk to their bankers about loans and investments to maximize business profits and optimize portfolio returns.
What about Family Management? How important is this for the UHNW?
Many among us are familiar with numerous celebrated “Family Feuds” that have turned mean and ugly that has led to costly legal tussles over control of business and assets which sadly ends up in the tragic breakdown of family relationships. Surely, this goes against the long-term vision of the wealth creator for the clan.
This leads us to the main thesis of this piece:
“That breakdown of the family system is the single biggest destroyer of wealth and the one true source of unhappiness among the affluent. Wealth is not meant to destroy family relationships, it is meant to forge it.”
Pinoys are generally known to be ultra family-centric. Parents look to accumulate wealth over and beyond what they need because it is critical to leave something substantial to the children. However, only a few believe that their children are prepared to handle a huge inheritance and even fewer have revealed their actual wealth to their heirs. Most Filipino families have weak successor training and very restricted information sharing.
Why is this so? Why are Filipino families not actively addressing this area of concern?
Parents are rightfully concerned that knowledge of wealth may affect their child’s values, work ethic and security. And while they truly believe that the family would benefit from developing a formal set of principles to guide the purpose and meaning of their wealth, only a selected few have actually done so. Why? Perhaps because crafting a family vision is a long and tedious process that involves commitment from all family members.
Filipinos are innately family-centric. I often see this in parents who look to accumulate wealth over and beyond what they need because it is critical for them to leave something substantial to the children. Only a few of them, however, believe that their children are prepared to handle a huge inheritance, and even fewer have revealed their actual wealth to their heirs.
This is where trusted advisors come in. Usually, there is a need for an objective third party to fully unearth and understand interpersonal relationships, historical conflicts and other family needs. There are multiple providers & products available that help address specific areas of Family Management. Metrobank is well-placed to partner with independent counsellors who are experts in Family Education & Governance.
For us, the state of “health” of our families is as important as the weather-proof portfolios that we build for them. In order to ensure the family’s well-being over time, these are some things that the first generation can reflect on:
How are the children being prepared to handle bigger responsibilities?
Are succession lines clear and defined?
How will the perpetuation of the family legacy be ensured?
Is there a STEWARDSHIP mindset in the family, or just consumption?
Is there an effective conflict resolution process in place?
At Metrobank, we encourage clients to think about both Family Management & Portfolio Management because each family is unique and there is no one-size-fits-all solution for a successful wealth transfer strategy in the pursuit of a happy nest.
LIZETTE PEREZ is Head of the Private Wealth Division of Metrobank and has over 20 years experience in Private Banking. She is a B.S. Business Economics graduate of the University of the Philippines and earned her master’s degree in Economics at the University of Southern California.
This opinion article is part of Metrobank’s Financial Education campaign series.
Suzuki’s Ertiga and Dzire bundles elegance and efficiency for various drivers
Whether one looks for a car to begin his or her driving experience, or a vehicle to conveniently drive his or her family, Suzuki has the fitting models to suit their preferences.
Practical and efficient without sacrificing style, the Ertiga and the modern Filipino family make a perfect match. This seven-seater creates a strong impression through its attractive exterior, characterized by a smooth and elegant body with a distinctive personality, generating pride and family joy among its owners. Further making the Ertiga distinctive among other multi-purpose vehicles are its taller and wide nose, dynamic shoulder line, deeper curves, aerodynamic body, and refined chrome accents.
Ertiga also comes with an elegant black interior that optimizes comfort and convenience for the driver and the family while taking style and luxury to a higher level. Upping this interior are its 10-inch Touch Panel Audio System (GLX), keyless push start system, and woodgrain designs on interior panels and door trims.
Moreover, Ertiga proves its efficiency by its good fuel economy, which is at 20.51 kilometers per liter (Km/L), as observed by Automobile Association of the Philippines (AAP).
When new needs arise, the Ertiga provides a practical solution. Its flexible seating can easily be adjusted to comfortably accommodate friends, family, and large amounts of luggage.
Safety is a must in vehicles, and the Ertiga is fully equipped with solid safety measures that bolster peace of mind in drivers. These include the SRS Airbag System for the driver and front passenger; reverse parking sensor that warns the driver of detected obstacles; highly protective body with Suzuki’s advanced Total Effective Control Technology (TECT); pedestrian injury mitigating body; and child seat anchorage.
Ertiga offers stylish headlamps with a taller and stronger nose design
All of Ertiga’s external elegance and interior convenience can be availed in Ertiga’s Black Edition variants: Ertiga GA – MT (priced at P738,000); Ertiga GL – MT (P858,000); Ertiga GL – AT (P898,000); Ertiga GLX – AT (P988,000); Ertiga 1.5 GA – MT (P743,000); Ertiga 1.5 GL – MT Upgrade (P863,000); Ertiga 1.5 GL – AT Upgrade (P903,000); and Ertiga 1.5 GLX – AT Upgrade (P993,000).
Ertiga’s cabin is a balance between elegance and functionality designed to optimize a full driving experience
For other particular needs of motorists — whether first car buyers or experienced drivers — Suzuki offers its competitive Dzire model.
For instance, the Dzire MT variant, with its five-speed manual transmission, is a good option for first-time car buyers. The Dzire AGS variant, with its auto gear shift or automatic-manual feature, caters to those who are used to automatic driving but would still want to have control of a manual transmission when necessary. On the other hand, the Dzire GA variant is a great choice for motorists who ride for sales, transport network vehicle services, and taxi services.
Suzuki Dzire utilizes its space for functionality and more leg room
The Dzire is also a fitting choice not only for its usability but also for its higher fuel efficiency rating —25.81 Km/L for the AGS variant and 26.54 Km/Li for the MT variant, as observed by AAP.
Instrument panel for Suzuki DZIRE
Nonetheless, all these variants carry a refreshed design form that accentuates a signature sedan style with its sleek and elegant lines. Its front incorporates a wide-open grille with an aggressive bumper that truly fits in with the authentic sedan styling, while the smooth flow of its roofline, cabin, and the surrounding area gives Dzire a sleek character. Adding to this sleek form of the five-seater are its multi-reflector headlamp, fog lamps (for GL+ variants), rear combination lamps with LED, and 15-inch alloy wheels.
Complementing this sleekness is its instrument panel that is sophisticatedly designed with silver accents and wide solid contours, as well as its patterned high-grade fabric on its upholstery.
Suzuki’s Dzire is also characterized by its smart packaging which demonstrates easy-to-handle compact dimensions and expanded storage capacity, resulting in better utilization of space across the vehicle.
Suzuki Dzire is available in 10 colors with 3 variant
The Dzire is also fitting not just for first-time car buyers or drivers who prefer sedans. Dzire is also a great choice for motorists who usually take the road with friends, those who want to make their fuel expenses count, or those who like a quick getaway a few miles away from the Metro.
Dzire’s variants are priced as follows: Dzire GA 1.2L – M/T at P549,900, Dzire GL 1.2L – M/T at P638,000, and Dzire GL+ 1.2L Auto Gear Shift (AGS) at P698,000.
With the Dzire and Ertiga, Suzuki offers a stylish, efficient, and convenient driving experience for drivers of various levels.
Suzuki Philippines is also giving away one out of 10 Suzuki Skydrive 125 Fi motorcycles for anyone who purchases any Suzuki Ertiga variant under its “Dealightful Wheels Wave 2” promo, which runs from November 1 – 30, 2020. The raffle draw will be on December 9. Visit www.suzuki.com.ph for details about the promo, as well as to learn more about Suzuki Ertiga and Dzire.
As the global pandemic shuts down businesses and drives economies into recession, a woman is leading the first and biggest Filipino-owned life insurance company through the most complex crisis of this generation.
Nina D. Aguas, Executive Chairman of Insular Life Assurance Co. Ltd. (InLife), draws wisdom and strength from the company’s 110 years of history—surviving, evolving and emerging stronger from every crisis. Since she took over the helm of InLife in 2016, first as CEO and then as Executive Chair, the first woman to occupy these positions in the company —InLife has averaged double-digit growth in revenues, developed a solid digital infrastructure, launched a movement for the financial and social empowerment of women, and reaped international awards for excellence.
This year, InLife was again named Best Domestic Life Insurer by the Insurance Asia Awards, for the fourth consecutive year.
In this interview, Nina one of Forbes’ 25 Power Businesswomen in Asia 2019, and one of Business Insider Australia’s 100 People Transforming Business in Asia, talks about living and leading in the time of COVID-19.
As InLife marks its 110th anniversary, Nina expresses pride that the company upholds its core Filipino values and commitment to help Filipinos.
Q: Can you describe 2020 in a word?
NINA: It’s way too universal and life- and game-changing for anyone to define in one word, so I have three words: profound, mystifying, surreal.
Surreal because it’s almost unreal, like watching a science fiction movie, that this (pandemic) would happen to humankind. It’s global, the effects know no boundaries. It touches the high and mighty, the poor and the weak, the young and old, the men, women, and whoever is in between. It exempts no one.
Mystifying for how can anyone imagine and conceive this phenomenon. We were very hopeful going into 2020, a new decade, and a fresh outlook; even optometrists use 20-20 when vision is ideal.
Profound because we were all deeply and intensely impacted. Our parents had to live through World War 2; our generation was handed a world war that needed layers and complex solutions but was equally emotionally difficult. It’s unbelievable, unprecedented—there’s no playbook to handle something this difficult.
That’s why they say: man plans, God humors. He laughs at our plans. We always felt we were in control of our destinies, of what’s within our reach, within our world, within our side. But no, during confinement and lockdown, we realize Someone else beyond us was in control.
Q: What has the year been like for you as an executive, a Filipino and a woman?
NINA: It’s defining on so many levels. I am thriving. I embraced and spiritualized the conditions. By the grace of God, I feel I have become an even better version of myself. Maybe I’m an optimist by disposition.
My daily life has taken on a better rhythm, a better tempo. It slowed me down, allowed me to breathe deeply. There was no pressure to be in a given place. I was in better control of my time. The confinement, while limiting, also expanded the time I gave my family. I saw more of my house in the last six months than I have in the 17 years we lived there. I appreciate the garden, the magnificent trees, the dragonflies and butterflies, the birds, the blue skies. You hear the rain and sense all of that smell, flavor and scent. It never dawned on me how I relished and missed those moments because I had to be at work in the office or away for my postings abroad.
(As an executive) The topmost priority for me was keeping our people safe and securing our company. Our business paused but momentarily and as the gravity of the situation began to sink in, we forged ahead confidently because of the strength and resilience of our balance sheet and our digital capability. Our agents adapted very well to the automated system (80% adoption). Only 18% of our people come to the office. There rest are on work-from-home arrangement. I’ve only been in the office very few times in the past six months.
Q: Digital is the backbone of your operations now. Were you prepared for it?
NINA: We were very prepared because in recent years, we went through a dual transformation strategy: reimagining today, and building the business model of the future. Future-proofing the business was heavily digital and technology powered. We said this is what we will invest in, and we’ve done so much in the last four years, creating a solid digital infrastructure and systems that allow for innovations. Despite the lockdowns, we were quite agile in our response. Even while on quarantine, we were able to put up InLife and Insular Health Care e-stores and offered affordable life insurance and prepaid health insurance online, as well as open new digital payment facilities. Our people are not one to waste a crisis. We were able to implement a seamless execution for our stakeholders.
Q: Have you made any changes in your personal or work life due to the pandemic?
NINA: I cannot imagine anyone who did not. I always said that life is a team sport but because of the limitations, we were not able to go to work, school, church, to gather as family. The thing I miss most is the personal interaction. We continue to work from home. It’s ironic, how the home confinement gave many of us room for reflection, spirituality, and creativity.
Q: As a champion of women’s empowerment, what do you think is the biggest impact of this crisis on women?
NINA: Women are disproportionately employed in health and associated sectors operating in the frontline of COVID-19, so the risk is at different levels.
If they’re breadwinners of a family, they also need to provide for daycare when they’re at work. Looking after the needs of the family becomes a shared responsibility to allow for some time and space for the mother or father. Everyone must pull together at home.
While we’re promoting economic and financial independence, we were setback because you can’t gather women and rally them when they have to deal with the absence of home support, deal with the day-to-day, and put food on the table. Sometimes the partner loses his job. Aside from coping with the financial loss, the wives and the mothers are expected to help with the emotional and psychological impact all these has brought to the family.
The April 2020 report of UN Women titled Gender Snapshot: Covid-19 in the Philippines revealed that one in five women aged 15 to 49 years has experienced violence at least once in their lifetime, and that’s exacerbated by the conditions families face now. We believed one way to free them was education and heightened awareness, but the safeguards against the spread of the virus has limited our ability to reach out proactively to them. This is momentary, we should get back in better and healthier times.
Q: As a business leader, what are your thoughts on the Philippines’ economic prospects in the next five years?
NINA: Until there are solutions, vaccines or better ways of living and co-existing with the (COVID-19) spread, our economic prospects are handicapped. We need to bring back fully the country’s economic activities and create and restore strong demand for goods and services to fuel recovery. We must regain our confidence, take hold of our bearings, and face our fears.
I remain optimistic but recovery may take a little bit longer – early 2022, maybe. The choice is between life because of the public health crisis, and life because of the loss of livelihood. It’s between a rock and a hard place. You have to draw from your inner strength to be able to survive this. When I was asked what I would say to leaders like me, I said: 1) Stay alive; 2) Keep the faith and be grateful, so you realize how little you need to live beautifully on Earth; and 3) Look out for your people, your communities; look out for your country. When you do right by them, when things normalize, they will remember. Rewards may not come today or tomorrow, but they will come when you need them most.
Q: Where do you position Insular Life in this kind of landscape?
NINA: We embarked, in July, on a Rapid Revenue Recovery plan. Let’s see whether we could get back to the same level of business 2018-2019. Let’s look at customer sentiment. People have been clamoring for health care solutions, so we offered health care prepaid cards at very affordable prices—the pick-up was unexpectedly high. It was adding to the top line, but as with any prepaid low-cost insurance, margins are very lean, but that’s okay. We are helping thousands who need health protection the most at this time.
We must recover momentum, so we are careful with spending especially in infrastructure and property, and then save where we can. This is what we are doing now, and this will continue until 2021.
Q: You are at the helm of a company that’s been around for 110 years. What has history taught InLife that equips it to help Filipinos through this pandemic?
NINA: We’ve outlived a war and several financial crises because we stayed true to our core corporate values – love of God and country, excellence, respect for the individual, integrity and teamwork. If I look out for my people and my community, they will look out for me in the future.
We’re very watchful, careful, agile, decisive. We cannot equivocate. We have very experienced people. Experience teaches you in ways you will never forget.
Q: How do you reassure people who are struggling financially and emotionally right now?
NINA: In times like this, when the need exceeds the capacity of anyone giver to fill, we are all asked to give fearlessly. As they say, no one is too poor as not to be able to offer something, a smile or a comforting hug, and no one is too rich as not to need anything; they might need the same hug and support.
Q: You speak a lot about your faith. What is the role of your faith in bringing you where you are now?
NINA: I feel blessed that I was born from a family of faith. Everything that happened to me was born by faith, so I live my life through that faith. That’s why I believe in destiny; I believe you are placed in a position for a reason and if you embrace that, you cannot be in a bad place. Everyone is saying, you’re recognized by Forbes, Business Insider, etc., all totally unexpected —the accountability of those recognitions, is a bigger responsibility. You have to continue making a positive impact. Success is relative. I can just as well change a light bulb; I clean the bathroom, do my groceries, plan the menu, look out for my family, laugh out loud with friends—it’s all those things, too.
THE Philippine central bank would probably remain dovish and might cut benchmark interest rates again next month and in the next quarter as the recovery outlook remains uncertain, analysts said.
“If the pace of economic recovery continues to underperform official forecasts, as we expect in the near term, then policy rate cuts will be warranted,” Nomura Global Markets Research analysts Euben Paracuelles and Rangga Cipta said in a note.
Further cuts would likely come especially as inflation remains benign and stays within the target of the Bangko Sentral ng Pilipinas (BSP), whose monetary policy decisions continue to rely on data, they added.
“We reiterate our forecast that BSP will cut its policy rate by another 50 basis points (bps) to 1.5%, likely delivering 25 bps at its next monetary board meeting in December and then another 25 bps in the first quarter of 2021,” Mr. Paracuelles and Mr. Cipta said.
The central bank unexpectedly cut benchmark rates to a record on Thursday, citing the uncertainty caused by a fresh surge in coronavirus cases globally and recent typhoons on the struggling economy.
The economy shrank by 11.5% in the third quarter, bringing the total contraction in economic output for the three quarters to 10%.
Central bank Governor Benjamin E. Diokno also cited the continued contraction in domestic output and weak confidence among companies and households.
“The Monetary Board assessed that there remains a critical need for continuing policy support measures to bolster economic activity and boost market confidence,” he added.
The policy-making Monetary Board has slashed 200 bps from key interest rates this year to support the virus-stricken economy. This brought the overnight reverse repurchase, lending, and deposit facilities to new record lows of 2%, 2.5%, and 1.5% respectively.
The BSP expects inflation to average at 2.4% this year and at 2.7% next year, well within its 2-4% target.
Despite rate cuts this year, lending growth eased to 2.8% in September, the slowest in more than 13 years, as banks tightened their credit standards while borrowers’ confidence remained low.
“The benchmark overnight reverse repurchase rate is unlikely to be the only tool the BSP will utilize,” Sophia Ng, an analyst at Mitsubishi UFJ Global Markets Research, said in a separate note on Friday.
The central bank stands ready to “deploy the full arsenal of tools” as needed, she said, citing Mr. Diokno.
SLOW PACE The central bank might also further cut the reserve requirement ratio for banks or may do another tranche of lending to the National Government, Ms. Ng said.
She said the Philippines is unlikely to get vaccines for the coronavirus in the first half of next year, which could lead to a slow recovery as restrictions remain in place.
The Monetary Board is authorized to cut the reserve ratio by as much as 400 bps this year. It has slashed the ratio by 200 bps for big banks to 12%, and by 1% for thrift and rural banks to 3% and 2%, respectively.
Meanwhile, the slow pace of fiscal stimulus measures from the government is a major concern and may force the central bank to cut rates further, ANZ Research Chief Economist for Southeast Asia and India Sanjay Mathur and economist Kanika Bhatnagar said.
“We do not rule out further rate cuts next year,” they said in a note. “Even so, in our view its efficacy will be limited by weak transmission.”
Fiscal measures from the Philippine government are equivalent to 3.9% of the gross domestic product (GDP), according to the policy tracker of the International Monetary Fund.
Fiscal responses from its neighbors are bigger including Malaysia at 5% of GDP, Thailand at 9.6%, Vietnam at 4.2% and Indonesia at 4.4%.
Congress passed a law in March to provide P275 billion in stimulus funds to sectors affected by the pandemic.
It allotted another P165.5 billion in a follow-up law in response to the crisis. The law also allowed the central bank to advance as much as P850 billion to the National Government at zero percent interest.
Lawmakers are also trying to fast-track the approval of the P4.5-trillion national budget for next year as it battles the COVID-19 pandemic.
EARNINGS of blue-chip stocks may fall deeper this year as third-quarter earnings results came in weaker than expected due to quarantine measures meant to contain a coronavirus pandemic.
The reporting season for corporate earnings ended last week, and the 30 members of the Philippine Stock Exchange index (PSEi) posted an aggregate profit decline of 38% in the third quarter, based on data from Philippine National Bank (PNB).
This was better than the previous quarter’s 59% year-on-year drop, but resulted in a 52% slump in earnings for the nine months through September.
“Although the slower decline in the third quarter was expected, the magnitude of the improvement was lower than our expectations,” PNB Vice-President and Head of Equity Research Alvin Joseph A. Arogo said in a Nov. 20 e-mail to BusinessWorld.
The lender’s full-year forecast was a 34% year-on-year decline for the aggregate earnings of PSEi members.
“This will be revised down given that the total nine-monthdecline was 52% year on year,” Mr. Arogo said. “Earnings growth in the fourth quarter is unlikely given the slower-than- expected recovery in the economy.”
Philippine economic output fell by 11.5% in the third quarter, resulting in a year-to-date contraction of 10%.
Earnings weakened in the third quarter after the capital region and nearby provinces reverted to a stricter lockdown after a fresh surge in infections in August, breaking the recovery momentum.
Government spending growth also slowed to 5.8% last quarter from 21.8% in the second quarter, Mr. Arogo said.
Some sectors managed to perform better or on par with expectations, Christopher John Mangun, research head at AAA Southeast Equities, Inc. said in an e-mailed reply to questions.
“Bank earnings came in better than expected as revenues are at their highs,” he said. “The reduction in net income was only due to added buffers for potential bad loans.”
Mr. Mangun also said property earnings were 50-70% lower year on year, but almost double the level in the previous quarter.
He now expects full-year earnings to slump by 50-60% from a year earlier, with fourth- quarter earnings improving by as much as 40% from the previous quarter.
“The PSEi is currently up 22% since the beginning of the fourth quarter, recovering all its losses from the drop that we saw back in March,” Mr. Mangun said. “We may see it climb further towards the end of the year.”
Mr. Arogo expects corporate earnings to start posting growth next year as the economy recovers from the crisis.
“Key factors that will drive earnings growth next year are containment of new virus cases, which would allow consumers and businesses to spend even without a vaccine, as well as timely and meaningful government spending,” he added.
Among PSEi members, those that will drive recovery next year are companies that made the biggest adjustments to new trends, such as going online and improving logistics, Mr. Mangun said.
Companies in the retail and manufacturing sectors might continue to lag, along with those that rely heavily on exports, he added.
“Our economy is consumer-based,” Mr. Mangun said. “We need to see a pickup in spending from consumers as well as the government, which is highly possible as consumers gain confidence that the risks of the pandemic are gone and it is OK to spend again.”
He expects government spending to pick up next year after the national budget was increased to P4.5 trillion to fund more infrastructure projects and boost state response to the pandemic.
The PSEi closed at 7,169.79 on Friday, its highest finish since February after gaining 2.46% or 172.17 points from the previous session.
THE government should look at digital payment systems that can cover cross-border transactions to widen its digital tax base, according to the National Tax Research Center (NTRC).
Long-standing issues such as poor internet connection and the lack of infrastructure should also be addressed, the state think tank said in a recent study.
The center urged the country’s tax agencies to maximize the use of digital payment systems because they are proven to be an effective tool to make online transactions more efficient. Faster tax collection could also help the country’s economic recovery, it added.
“Many countries have already adopted a progressive movement of taxing digital transactions to capture the fast-growing digital economy and level the playing field,” according to the study.
“Payment systems have the potential to help tax authorities in monitoring tax compliance and enforcing tax rules,”it added.
The Finance department in May said it would study how to plug potential value-added tax (VAT) leakages on goods and services sold online, including cross-border transactions. House Bill 6765 or the Digital Economy Taxation Act was filed seeking to impose a 12% VAT on online transactions.
Aside from the public’s lukewarm attitude toward digital payments and the lack of a reliable and secure payment infrastructure, there’s also a need to ensure the efficient implementation of payment systems involving cross-border online transactions, the NTRC said.
The adoption of digital payments has been slow because many Filipinos think cash is still the fastest and safest way to pay, the agency said, citing past studies.
It said most countries that impose VAT or its equivalent on cross-border digital services do not require foreign companies to establish a physical office in the country where they sell, though some do have a representative office.
The Bureau of Internal Revenue issued a memo in June reminding online businesses to register with the agency for tax purposes. More than 7,000 businesses have registered as of the Sept. 30 deadline.
“During the COVID-19 pandemic, the digital transformation of BIR’s digital services has become crucial to ensure the safety of taxpayers from the threat of the virus,” it said.
“With lower revenue expectations due to the COVID-19 pandemic, the increased use of digital technologies along with strong macroeconomic fundamentals can help the government quickly return to high growth once the health crisis is over,” it added.
Tax revenues dropped by 11.28% to P1.854 trillion in the nine months through September due to weak consumer spending and business closures during the pandemic.
The tax agency also aims to start the pilot of its electronic receipts and e-invoicing system next year.
Online payment transactions of the government accounted for 59% of 472 million digital payments done, while individuals and businesses accounted for 9% and 4%, respectively, the NTRC said, citing estimates by the Better than Cash Alliance last year.
Total digital payments remained low, accounting for only 8% of the total monthly volume of payments made nationwide.
The center said there were 98 operators of payment systems registered with the Philippine central bank, while 25 others have provisional licenses. — Beatrice M. Laforga
THE country’s midterm growth potential remains strong amid a coronavirus pandemic, and good fundamentals continue to guard its credit rating and outlook, according to Moody’s Investors Service.
But remittances and investments could be hit if the government fails to contain infections, Christian de Guzman, senior vice-president of Sovereign Risk Group at Moody’s, told BusinessWorld via Zoom Cloud Meetings last week.
“We don’t necessarily think that there is going to be a structural downshift in growth, assuming that there will be a degree of normalization and a resolution to the pandemic starting next year,” he said.
The global credit watcher affirmed its Baa2 rating and stable outlook for the Philippines in July, saying the country’s strong fiscal position would shield it from the health crisis.
Moody’s expects the Philippine economy to slump by 7% this year before bouncing back with a 6.8% growth next year.
The government expects economic output to shrink by 4.5% to 6.6 this year and grow by 6.5% to 7.5% next year.
Mr. De Guzman said economic weak points remain, such as the tourism sector, though border restrictions around the world won’t cause as much damage compared with its neighbors in the region.
“There is a bit of nuance because compared with Thailand and the region, the nature of travel and tourism in the Philippines is more domestic than international,” he said.
Some destinations in the Philippines such as Boracay, Tagaytay, Baguio and Palawan started to welcome local tourists last month, provided they come from areas of the country under a relaxed community quarantine.
Tourist numbers are also limited and they must comply with minimum safety standards.
Mr. De Guzman said remittances and investment flows would depend on travel restrictions in both source and destination countries.
He cited Singapore and Hong Kong’s travel bubble after they allowed their citizens to travel between them without the need for quarantines because both have managed to control the virus.
A government failure to control coronavirus infections “could very well affect the deployment of overseas Filipino workers, which can then affect the remittance inflows down the road,” Mr. De Guzman said.
Cash remittances rebounded with a 9.3% growth to $2.601 billion in September from a year earlier, but inflows for the 10 months were still down by 1.4% to $22.187 billion, according to data from the Philippine central bank.
Foreign direct investments (FDI) will also depend on travel restrictions since some transactions require investors to physically come here.
FDIs grew for a fourth straight month in August due to renewed investor confidence despite the pandemic, the central bank said this month.
Net inflows climbed by 46.9% to $637 million in August from a year earlier. For the eight months through August, FDI inflows dropped by 5.6% to $4.432 billion from last year.
The Philippines would continue to be on a “better footing” than many of its Baa2-rated peers despite risks to growth, Mr. De Guzman said, citing the country’s improved fiscal position in the past decade and its strong banking system.
“We understand that the country’s debt will rise, effectively erasing some of the gains that were made over the past decade,” he said. “But we are viewing this as a cyclical shock.”
A VERY specific wish for a watch had been fulfilled with the release of a new line of Seiko’s Prospex diver’s watches. We’re talking about a limited Philippine edition.
The watch was launched early this month via Facebook Live, in an event hosted by athlete and host Marc Nelson. It was launched alongside a 55th anniversary edition (the first Seiko diver’s watch was released in 1965).
The Philippine-edition Prospex watch was codenamed SRPF33K1 and limited to only 1,000 pieces. It has a 42.4mm stainless steel case, with Seiko’s caliber 4R36 automatic movement with manual winding capacity. The power reserve is approximately 41 hours and it is water resistant up to 200 meters. It comes with a Day/Date display, stop second hand function, glowing Lumibrite on the hands and indexes; all sitting atop a blue IP dial and yellow gradation dial. It comes with a two-tone stainless steel band with an extra silicone blue band that will be placed inside a special box engraved with limited edition numbers and the words “Philippine Limited Edition).”
As a diver’s watch, of course it would have a touch of marine influence, but as Yoshikatsu Kawada, Director and Senior Vice-President for Seiko Japan, noted, “Seiko Corp. recognizes the Philippines as one of the best diving destinations in the world. It is for this reason that we have created the first Philippine Prospex Limited Edition, inspired by the Philippines’ beautiful treasure, Tubbataha Reef.” The coral reef has indeed been rated many times by magazines as one of the world’s best, and also has the distinction of being considered a World Heritage Site by UNESCO.
As such, Karl Dy, President of Timeplus Corp. (which distributes Seiko watches in the country) pledged that a certain amount from the proceeds from the sales of the limited edition Prospex will go towards protecting the reef. “The design is a collaboration between Seiko Watch Corp. of Japan and Seiko Philippines,” said Mr. Dy.
“Seiko Watch Corp. and Seiko Philippines had met several times to discuss the design of the watch. It took about a month to finalize but it was well worth it,” said Mr. Dy in an e-mail to BusinessWorld, asked about how long it took to plan the watch’s release. “Seiko Philippines was always hoping for a limited edition since other countries already released their own years ago. Seiko Watch Corp. also acknowledges the Philippines as one of its important markets; that is why the idea was quickly implemented and prioritized.
“I think the Philippines is overdue in having its own Philippine limited edition. Seiko Watch Corp. was thinking of the perfect time to launch it and thought that it would do well to coincide with the Tokyo Olympics. Obviously, the situation with COVID-19 (coronavirus disease 2019) was unexpected but we are so thankful to the Filipino community for embracing our very first Seiko limited edition,” said Mr. Dy.
Seiko is not averse to fulfilling wishes. Mr. Kawada discussed a letter the company received in 1968, three years after the release of the first Prospex. In it, a diver said that no diver’s watch in the market could withstand a saturated diving system in depths greater than 300m. “Answering the request, Seiko established a new development team,” said Mr. Kawada. Of course, he was very proud to say that in 1975, they managed to go above and beyond the diver’s request, and released a watch that could work in depths of 600m.
“‘Keep moving forward’ is exactly the expression that explains both the will of the people who have been wearing Prospex, and who keep making Prospex watches,” he said.
The Philippine-edition Prospex watch is priced at P29,000 and will only be available at Official Seiko Boutiques and Authorized Dealers. For more details, visit seikowatches.com/ph-en or Seiko Philippines on Facebook and @seikophilippines on Instagram. You may also shop directly at shop.seikoboutique.com.ph. — Joseph L. Garcia
THE Cavite government sees “signs” that it will finally seal a joint venture (JV) agreement by Nov. 24 with MacroAsia Corp. and its partner China Communications Construction Co. Ltd. (CCCC) for the $10-billion Sangley Point International Airport project.
“November 24 is the last day for the partners to enter into a joint venture agreement. We have given them an extendable deadline, so we will know then. But all signs point that they will sign the agreement before that,” Cavite Gov. Juanito Victor “Jonvic” C. Remulla told BusinessWorld in a recent phone interview.
Mr. Remulla stressed he is optimistic that the airport project will push through.
Jesse R. Grepo, Cavite’s public-private partnership selection committee legal officer, said on Sept. 24 that the Lucio C. Tan-led MacroAsia and its partner CCCC were given another 90 days to complete their post-qualification requirements for the airport project, after they missed the Sept. 9 deadline.
“The consortium was able to make partial submission of documents as required by Notice of Award. However, considering the continuing adverse impact of Covid-19 (coronavirus disease 2019) and in the exigency of service, the request for extension of 90 days immediately after air travel resumes between China and the Philippines to comply with all the conditions of the Notice of Award is granted,” Mr. Grepo said in a mobile phone message.
He said the extension was granted because of the “firm commitment” of the consortium to fully comply with the requirements on or before the new deadline.
MacroAsia said in a recent disclosure to the stock exchange that among the documents it had already submitted was the “newly and fully authenticated copy” of the joint venture proposal.
The post-qualification documents were supposed to be completed and submitted 60 days after the group received the notice of award in February.
Cavite had initially given the consortium until June to process and submit the documents before a joint venture development agreement could be signed.
The groundbreaking for the first phase of the airport project was initially expected to take place in the second quarter of the year.
The first phase of the project, which will cost $4 billion, includes the construction of the Sangley connector road and a bridge to connect the Kawit segment of the Manila-Cavite Expressway to the airport.
Phase 1 also involves the construction of the airport’s first runway.
The airport is rated at 25 million passengers yearly, and is intended to help decongest the Ninoy Aquino International Airport.
It is expected to be fully operational by 2023, with partial operations to start a year earlier. The fourth runway will be opened after six years.
The same consortium will work on the other two phases of the airport project, but there may be contract renegotiations, according to the Cavite government.
The second phase, which will cost about $6 billion, involves the construction of two more runways, giving the airport an annual capacity of 75 million passengers.
The last phase is the expansion to four runways, bringing capacity to 130 million passengers.
MacroAsia incurred losses of P269.44 million in the third quarter, a reversal of its profits a year ago, as the group’s core business segments “continue to be impacted by the downturn in air travel due to COVID-19-related quarantine and airport restrictions from March 2020 onwards,” the company said in a recent stock exchange disclosure.
In the same quarter last year, MacroAsia recorded an attributable net income of P300.05 million.
LOUIS VUITTON and the National Basketball Association (NBA) recently partnered on a capsule collection which is now available at the LV Greenbelt 4 branch in Makati City.
Done under the artistic direction of American Louis Vuitton designer Virgil Abloh, the LVxNBA collection is “motivated by the exchange between French craftsmanship and American sports.”
For the line, Mr. Abloh created a limited clothing and accessories collection which he is described as uniting the emblems of the two renowned institutions.
The collection adapts the designer’s codes with the visual images of the basketball world, and honors the values of relatability and inclusion which Mr. Abloh has been underscoring since joining Louis Vuitton as artistic director for men’s wear in 2018.
Taking its cue from a player’s wardrobe, the collection captures three main dress codes: travels and transits are represented in a grey cashmere tracksuit adorned with graphics informed by the lines of a basketball; game arrivals manifest in a blue hooded leather jacket, Monogram jeans and T-shirts; and the press conference dress code is expressed in suits and a dress shirt.
Among the prominent features here is how the NBA logo is employed in an infinite houndstooth pattern used in tailoring, shirting and a tie.
Multi-functional bags draw on the red, blue, and white colors of the NBA logo. The collection sees the debut of a multi-pocket backpack in LV’s classic Monogram pattern with white contrast straps as a nod to the graphics associated with the game.
Shoes meld the insignia of Louis Vuitton and NBA in classic loafers, chunky-soled leather derbies, slip-ons, and in lace-up leather boots fused with components from existing sneakers; each recognizable by the new LVxNBA emblem embossed on the foot-bed.
Fashion jewelry have NBA logos as pendants, highlighting the meshing of sports and craftsmanship.
“Fashion muses aren’t predictable. Ideas of luxury can be found in the sports world and its champions as much as in traditional forms of artistry. This collection celebrates the cultural contribution of basketball and its diverse characters, and the idea of relatability as a force of unity today,” said Mr. Abloh of the collection in a statement. — Michael Angelo S. Murillo
AYALA-LED AC Energy, Inc. plans to sell its investments in coal-fired power plant projects in Bataan and Lanao del Norte in line with its goal to generate more than half of its energy output from renewables by 2025.
Eric T. Francia, AC Energy president and chief executive officer, said the company had completed the transfer of all onshore Philippine assets to publicly listed subsidiary AC Energy Philippines, Inc., or ACEN, except for these projects.
“Ang hindi lang in-infuse na Philippine assets ng AC Energy, Inc. is the GNPower plants, both Mindanao, Kauswagan; and ‘yung AA thermal, ‘yung Dinginin and tsaka Mariveles,” he told reporters in an online briefing.
(The Philippine assets of AC Energy, Inc. that were not infused are the GNPower plants, both the one in Kauswagan, Mindanao, and those under AA Thermal, Inc.—the projects in Dinginin and Mariveles.)
GNPower Kauswagan Ltd. Co. is building a four-unit, “clean”, coal-fired power plant, each with an identical capacity of 138 megawatts (MW) or a total of 552 MW in Kauswagan, Lanao del Norte.
AC Energy has a stake in the 632-MW GNPower Mariveles Coal Plant Ltd. Co. and in the 668-MW supercritical coal-fired plant GNPower Dinginin Ltd. Co. AA Thermal holds AC Energy’s interests in the Mariveles and Dinginin projects.
AC Energy, whose change of name to AC Energy and Infrastructure Corp. (ACEIC) was approved by the Securities and Exchange Commission on Nov. 18, is the holding firm for ACEN’s energy platform.
“‘Yung naiwan kay ACEIC because we have plans of divesting those coal plants… We didn’t feel the need to infuse those large coal plants in ACEN,” Mr. Francia said.
He earlier said that ACEN would need around $1.8 billion to $2 billion to help it realize that vision. He said that the company would undergo corporate restructuring in the next couple of years, and that ACEN would seek to raise funds of $500 million to $600 million as growth capital to add to its $700 million cash reserves.
The company aspires to exceed 5 gigawatts of attributable capacity and generate at least 50% of energy from renewables by 2025.
On Friday, shares in ACEN rose by 11.96% to close at P5.80 apiece. — Angelica Y. Yang
LUSH is a beauty brand that prides itself on being cruelty-free by not testing its products on animals, and now it is giving prizes to anyone with ideas on how to stop the practice. This is because, as a company release says, “Every year, it is estimated that more than 115 million animals are used in testing laboratories around the world.”
Earlier this month, Lush awarded the £250,000 Lush Prize (P16,022,500 at an exchange rate of P64.09 = £1), the largest prize fund in the non-animal testing sector. There are nine winning projects, organizations, and scientists from seven countries, as well as a winner of the Andrew Tyler Award. The winners share the total prize fund.
Several projects won for finding ways of testing and assessing chemicals and molecules without having to use animals in the process. The MIE Atlas Team from Cambridge University/Unilever in the UK, presented a study called “In Silico Models to Predict Human Molecular Initiating Events.” Edoardo Carnesecchi, from Utrecht University’s Institute for Risk Assessment Sciences (IRAS) in the Netherlands won for an innovative software platform to assess chemical mixtures’ toxicity and exposure, while Domenico Gadaleta from the Computational Toxicology Unit — Mario Negri Institute for Pharmacological Research in Italy won for the study “Screening Based on Structure-Activity Relationships Predicting Molecular Initiating Events of Neurotoxicity.”
Other projects won for lobbying, public awareness, and training. The Environment and Animal Society of Taiwan (EAST), won for a lobbying project which aims to erase mandatory animal testing requirements and prioritising non-animal testing methods in the chemical registration process. Meanwhile, SOKO Tierschutz in Germany won for an undercover investigation at the Laboratory of Pharmacology and Toxicology in Mienenbuettel, Germany. Helpathon from the Netherlands won for its “innovative brainstorming sessions to help scientists who currently use animals explore new approaches,” according to the Lush Prize Instagram account.
The rest of the winning projects took a look at biology. Nadine Dreser from the University of Konstanz, Germany won for a project about early neurodevelopmental disturbances during sensitive periods of stem cell differentiation. Dr. Johana Nyffeler, from the US Environmental Protection Agency, presented a study on “High-throughput phenotypic profiling of human neural progenitor cells to identify putative modes-of-action of developmental neurotoxicants.” Dr. Yuan Pang from Tsinghua University, China won for the project “Construction of advanced in-vitro tissue models based on 3D bioprinting and their application in drug discovery and toxicity tests.”
Andrew Rowan, PhD took home the Andrew Tyler Award, a nonfinancial prize, for oustanding contributions to ending animal testing. Mr. Rowan is President of Wellbeing International, and was the former CEO of Humane Society International. He has also served on the committees of several animal protection groups, including the World Society for the Protection of Animals.
“The judges were particularly excited by the fact that this year’s shortlist contained a new wave of projects which were modelling the cellular pathways of toxic molecules in their datasets. This combination of 21st century technologies showed perhaps the greatest promise yet for a widespread replacement of older and less reliable animal models on a global scale,” said Rob Harrison, Lush Prize Director.
In the Philippines, Lush is exclusively distributed by Stores Specialists, Inc. — JL Garcia
