A MEASURE giving more power to financial regulators to counter consumer fraud and abuse in availing financial products has been filed in the Senate.
Under Senate Bill No. 1329, or the “Financial Consumer Protection Act of 2020,” Senator Juan Edgardo M. Angara seeks to address crimes that go with the development of complex financial products.
“Time and again, we hear stories of consumers putting their lifelong savings in investment scams or suffering from or facing collection cases due to over indebtedness,” he said in the bill’s explanatory note.
The measure recognizes as regulators the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Insurance Commission and the Cooperative Development Authority.
These regulators are given the authority to impose policies, conduct surveillance and examination, and monitor the financial market.
Further, the regulators will also be authorized to adjudicate on claims or relief prayed for by financial consumers worth up to P100,000.
Mr. Angara also proposed penalizing financial service providers with a fine ranging from P50,000 to P2 million, imprisonment of 1-5 years, or both.
The bill says in case “profit is gained or loss is avoided as a result of the violation, a fine of no more than three times the profit gained or loss avoided may also be imposed.”
The measure will also subject the provider to administrative sanctions and may, at the recommendation of the financial regulators, be ordered suspended or canceled.
The bill, among others, mandates that financial service providers should design financial products appropriate to their target consumers. This includes ensuring the product’s affordability and suitability to the client.
The provider should also grant a clear cooling-off period, allowing the consumer to consider the cost and the risk and decide whether to cancel the contract without penalty unless the product is a contact of insurance, which cannot be returned.
Moreover, the bill noted that financial contracts will be declared illegal if they carry a provision that waives a client’s right to “sue the financial service provider, receive information, have their complaints addressed and resolved,” among others. — C.A. Tadalan
This 2020, Sun Life of Canada (Philippines), Inc., the country’s first and leading insurance company, marks its 125th anniversary in the Philippines with the theme “Beyond Lifetimes.”.
Since it started its operations in the country in 1895, Sun Life Philippines has continued to achieve its mission of helping Filipinos enjoy lifetime security and live healthier lives.
To kick off its celebration, Sun Life Philippines Chief Executive Officer and Country Head Benedict Sison announced during the company’s 125th Anniversary media launch that Sun Life Philippines has reached a milestone of hitting its five million client mark last December 2019, a year ahead of its December 2020 target.
He also revealed the growing number of millennial clients and financial advisors. Over 50% or 80,000 of Sun Life Philippines’ client base today come from the millennial market while most of the current 20,000 Sun Life Philippines advisors nationwide are millennials.
A Prosperous 2020
This year, Mr. Sison shared that the company aims to deepen the quality of relationships between advisors and clients through providing the latter with holistic advice, relevant solutions, 24/7 servicing, and meaningful interactions.
Sun Life Philippines will also launch new products this year including the Sun Cancer Care, a specialized health insurance plan that provides cash benefits upon diagnosis of a covered early and late stage cancer, as well as for treatment and recovery.
Mr. Sison said Sun Life Philippines is also embarking on a digital transformation journey to better serve its customers and to further grow the business.
For instance, the Sun Life Prosperity Funds are now available online for the convenience of clients who want to invest in mutual funds.
Paperless application and straight-through processing may also be enjoyed by clients who will avail of select Sun Life products.
Beyond business, Sun Life Philippines continues to champion financial literacy through various programs. One of these is the Sun Pera-Aralan, a financial management project led by its philanthropic arm, Sun Life Financial-Philippines Foundation, Inc.
Launched in partnership with the Department of Education and mounted with the help of Sun Life advisors, Sun Pera-Aralan aims to help 125,000 Filipino public school teachers lessen their debt and properly budget their salary.
To attract more Filipinos to achieve their financial goals, Sun Life Philippines will also conduct a year-long promo for new clients. Winners will be treated to birthday and anniversary celebration packages.
“All of these offerings aim to strengthen our relationship with the Filipino people and reiterate our commitment to help them achieve a brighter future,” Mr. Sison said.
Beyond Lifetimes Campaign
As part of its celebrations, Sun Life Philippines will be showcasing stories of their clients that highlight the authenticity of the company’s purpose. One such story is that of the Sy Family of Cagayan De Oro, which has been a Sun Life client for six generations now.
Having trusted the company to help secure their future and fulfill their dreams since 1907, the Sy Family perfectly exemplifies the company’s promise to be a lifetime partner to its clients. Their inspiring story will be among those featured in digital short films in Sun Life’s social media assets.
The Sy Family is also among the five paintings featured in “Portraits Beyond Lifetimes” client stories exhibit at the lobby of Sun Life Centre in BGC, Taguig City.
The exhibit, which commemorates Sun Life’s 125 years in the Philippines, includes artworks — made by the country’s outstanding young artists today — that are “inspired by powerful narratives that represent partnerships that forged a lifetime bond between Sun Life and Filipinos.”
A Commemorative Marker was also unveiled at the Sun Life Centre that “commemorates the establishment of Sun Life of Canada in the Philippines in 1895, making it the first and longest-standing life insurance company in the country today.”
Leading the unveiling ceremony were Sun Life executives and Insurance Commissioner Dennis B. Funa who recognized Sun Life Philippines’ contributions in the growth of the country’s insurance sector.
A Beyond Lifetimes Concert Musical, a symphony of exceptional performances celebrating Sun Life’s 125th anniversary in the Philippines, was also recently held at the SMX Convention Center in Pasay City.
A Crown Jewel in Asia
During the media launch, Sun Life Asia President Leo Grepin highlighted the importance of the Philippines to Sun Life’s success in the region.
“Sun Life Philippines is a crown jewel in our business. To be the first life insurer 125 years ago and the leading insurer today is a testament to our commitment to Filipinos through thick and thin, to a company culture focused on delivering for our clients over their lifetime, and to generations of employees and advisors who have led the evolution of the industry in the Philippines,” he said.
Sun Life Global President and CEO Dean Connor also recognized Sun Life Philippines’ successful evolution through the years.
“Sun Life Philippines has done an excellent job in championing financial security and healthier lives across generations of Filipinos,” he said. “How they continually evolve and keep up with the times, while remaining true to the company’s purpose, has been a source of inspiration for all of us at Sun Life.”
Mr. Sison said Sun Life Philippines looks forward to continue keeping its promises, fulfilling dreams, and making Filipinos’ lives brighter.
“For us at Sun Life, it is and will always be an honor to be the Filipinos’ partner in their pursuit of a brighter future today, tomorrow, and Beyond Lifetimes,” he said.
For updates on Sun Life’s 125th anniversary celebration, visit sunlife.com.ph and follow @SunlifePH on Facebook, Instagram, and Twitter.
THE CLOTHES arrived from Shanghai in six suitcases, hastily packed, full of wrinkles.
It wasn’t how Wang Tao’s latest collection was supposed to get to New York Fashion Week, which ran from Feb. 3 to 12. But the designer considers it lucky they arrived at all.
“It’s like a Hollywood movie,” Wang, 52, said in the New York showroom where she had unfolded, ironed and sorted dozens of silk dresses and cashmere coats for the runway.
Coronavirus has created a global public health emergency that has taken lives and wreaked havoc in major and minor ways. This is the story of the professional obstacle the virus presented to one Chinese designer, and how she got around it.
Wang started her made-to-measure Taoray Wang label five years ago, designing for “the empowered career woman.” One customer she points to is Ida Liu, head of private banking in North America for Citigroup Inc.
“I am a huge fan,” Liu said in an e-mail. “She has impeccable tailoring and work-appropriate styles with a twist.”
With prices ranging from about $500 for a blouse to $3,800 for a coat, she sells to a global clientele, including in Washington, where Tiffany Trump wore a white Taoray Wang suit to her father’s inauguration.
Wang traces her tailoring skills to her job as a menswear designer for Junko Koshino. Eventually she moved to England from Tokyo, then returned to her native Shanghai to work with broadcast.bo, a women’s brand that’s part of Ribo Fashion Group, which also owns Taoray Wang.
About a month before her show, Wang had designed and made about 95% of the collection she planned to show in New York. She assumed she’d fly to Shanghai to make final adjustments, once her team had returned from the lunar New Year holiday.
But as the coronavirus crisis escalated, she realized her plan was impossible. The holiday was extended. Logistics companies were shut down. Chinese were not allowed to leave the country.
“At first I thought it was not that serious, then I was terrified,” she said of the virus.
She turned to e-mail. First, she had to identify people with US passports who were already making the trip out of China, and would be willing to take the clothes. Second, she needed someone in the office to pack them.
A message to her staff explaining the predicament produced a fortunate response: A member of her design staff — Bonan Tian — had stayed in the company dormitory for the entire holiday and was already on the premises.
In a matter of hours, he stuffed the suitcases — six instead of the 14 Wang would have used — and got them delivered to an Chinese-American couple with US citizenship flying to JFK airport.
“He is my hero,” she said.
The suitcases arrived in New York on Feb. 3 — the cue it was all clear to send out the invitations. Wang arrived from her home in England two days later.
And on Feb. 11, the show went on. Actresses Annet Mahendru (The Americans) and Sherri Saum (Locke & Key) were watching from the front row as models paraded in her feminine, edgy power suits.
Wang called the show “Cafe a l’hiver,” inspired by a Paris morning watching women on their way to work “looking romantic and sexy, their hair moving, their silk dresses moving.”
The color palette reflects that scene, with blues, grays and pinks of dawn, and creams and browns of her cappuccino and croissant.
Even before the virus disrupted production in Shanghai, Wang was planning to have any orders produced in the city that inspired the collection, aided by a new business relationship: She has started designing clothes for Paris-based shoe brand Charles Jourdan.
But no matter where they are made or worn, she vows not to skip her signature — silk linings with a traditional Chinese design of black-billed magpies on red plum branches.
“These birds,” she said, holding open her cashmere coat, “are legendary bringers of good fortune.” — Bloomberg
TRADING at the local bourse is seen to stay quiet as market players await developments that would reduce uncertainties.
The bellwether Philippine Stock Exchange index (PSEi) closed lower on Friday, down 121.12 points or 1.63% to finish at 7,282.
On a week on week basis, the main index slid 225.20 points or three percent amid ongoing risks over the coronavirus disease 2019 (COVID-19) as well as regulatory concerns of listed firms.
“Uncertainty reverberated across regional bourses, due to fears of factory closures in China as well as service interruption that could roll on supply chain,” online brokerage 2TradeAsia.com said in a market note.
“The key condition so far is that participants are heeding for some degree of ‘predictability’ in suppressing COVID-19, given reports the coronavirus is transmittable in its incubation phase, and that SARS was not,” 2TradeAsia.com added.
In an e-mail, Piper Chaucer E. Tan, client engagement officer and research associate at Philstocks Financial, Inc., said heightened regulatory risks, the COVID-19, and corporate earnings continue to influence market activity with both local and foreign investors “waiting for [a] conviction of strong earnings” result before being enticed to come back.
Average value turnover last week decreased 17% to P6 billion, however, net foreign buying increased to P815 million from the P736 million the previous week.
Amid efforts to curb the spread of COVID-19, economic activities in some parts of China have been on pause. Factories were forced to temporarily halt operations as some roads are also blocked.
The Philippines is among the countries seen most vulnerable to global trade disruptions as 30.8% of the country’s core intermediate goods were sourced from Hong Kong and China, Oxford Economics said last week.
Last week also saw investors unloading some shares of ABS-CBN Corp. after the Office of the Solicitor General filed a quo warranto to cancel its congressional franchise for alleged violations against laws on foreign ownership and “highly abusive practices,” among others.
For this week, China Bank Securities Corp. Senior Research Associate Rastine Mackie D. Mercado said in a text message: “We expect the market to retrace/scale back the forced closure on Friday… [the PSEi] may continue to hover around the 7,350-7,550 range. In the event that the forced closure holds, we expect a retest of the support at around 7,130.”
For Philstocks’ Mr. Tan, the bellwether PSEi “may move this week to 7,200 and 7,500 placing 7,500 as major resistance” as the general market sentiment will be on a “wait-and-see mode” for developments.
He said if regulatory risk “escalates to other industries” as seen in property sector’s Ayala Land, Inc. a few weeks ago, a negative market sentiment might continue.
An S90 T8 PHEV is charged at a roadside. Volvo’s drive to an electric future envisions the company being climate neutral across its full value chain by 2040.
Volvo plug-in hybrids now available in PHL
THE PLUG-IN variants of the Volvo S90 sedan, XC60 compact SUV, and XC90 mid-size SUV are now available in the Philippines — offering “sleek, smart, and sensible” transportation.
Volvo says in a release that this “no-compromise combination of plug-in battery electric power and an efficient petrol engine provides low-to-zero tailpipe emissions, excellent flexibility, and a powerful driving experience to make everyday driving as comfortable and as environment-friendly as possible.”
The company’s plug-in hybrid electric vehicle (PHEV) features its T8 Twin Engine, and all models boast over 400hp and 640Nm of torque. The PHEVs seamlessly combine electric and petrol power for an efficient driving experience via a “low-emission petrol engine (and) an electric motor that delivers power on demand with ultralow CO2 emissions and more than 40 kilometers of pure electric range.”
Volvo’s promise of an electric future started last year when all newly produced cars had become available with plug-in hybrid technology. This “will continue until Volvo reaches its ambitious goal to be climate neutral across their full value chain in 2040, in line with the goals of the Paris Agreement.”
Team Autoforce’s Ryan Ablang wins Fastest Driver of the Day and Open Class Champion in the Philippine Autocross Championship Series.
Ablang wins Philippine Autocross Series, sets sights on Super Sprint 2020
RYAN ABLANG of Team Autoforce was crowned Fastest Driver of the Day and the Open Class Champion in the second round of the Philippine Autocross Championship Series (PACS) held last Feb. 8 at R33 Trucks, San Simon, Pampanga. The 37-year-old racer also bagged the Open Class Champion title as he clocked 38.85 seconds, followed by Jevoy Moreno at 38.90 seconds, and Mike Potenciano at 39.47 seconds.
Now on its 20th season, the Philippine Autocross Championship Series founded by Danny Santiago is said to be the farthest-reaching campaign of its kind in the country, as it advocates for disciplined driving while contributing challenging programs to Philippine motorsports.
Recently, Ablang also dominated the first round of Super Sprint 2020, held at Meycauayan Commercial Complex last Feb. 2. Driving his Honda Civic EG Hatchback with its 2.0 B20 modified engine, Ablang won first place in the Prepped B3 Class, Prepped C3 Class, and Prepped D3 class of Super Sprint Round 1, submitting times of 59.179 seconds, 59.008 seconds, and 57.478 seconds — winning fastest time of the day for his Autoforce team.
Last year, Ablang dominated Super Sprint, and was hailed as champion for Prepped B3, Prepped C3, and Prepped D3 class, granting him the title of 2019 Prepped Overall Champion.
For Super Sprint, Prepped Class is the category for any driver who has moderate to more experience in motorsports competitions. Other driver classifications are Street, Amateur, and Intermediate.
So far, Ablang’s most notable wins in the motorsports industry aside from those mentioned above include 2008 Race Motorsports Club Slalom Racing Novice Overall Champion, 2017 Philippine Autocross Championship Series Novice Overall Champion, 2001 and up Category Champion in Metro Manila (2019 AAP-MSDP National Gymkhana) 2019 Golden Wheel Awardee Sparco Cup Grid Group 6, and Open Class Fastest Time of the Day in the last round of the 2019 Philippine Autocross Championship Series, timed 30.94 seconds.
Ablang started the racing scene early, in 2007, participating in Race Motorsports Club Slalom Racing, and returned in 2017 after building a stable family life. Ablang is currently backed by Motolite, Keon Sondra LED PH, Denso Mandaluyong, MovNCool, Dynamics Performance Engineering, JG Remaps and Tuning, Unico Hijo Resort, Carbon Nitomura, JDM USDM Surplus Autoparts, Casa Cruz Barberia, Station Lifestyle Supply Co, OEM Auto Fab, and Dohcthor Performance by BertSpeed.
Nissan launches nationwide Car Care Support
UNTIL March 31, 2020, Nissan customers can receive free checkups for air-conditioning, brakes, and suspension at participating dealerships nationwide through the brand’s Car Care Support promo.
Customers who purchased a Navara, Terra, Almera, Urvan, Sylphy, and Juke beginning in 2014 can also enjoy a 10% discount on spare parts and labor including cabin filters, evaporators, brake pads, and shock absorbers. In addition, customers who bring in any of the vehicles and avail of any repair services, are entitled to a free car wash of their unit.
Said Nissan Philippines President and Managing Director Atsushi Najima: “Buying a Nissan vehicle means a partnership for life, and this promo is part of our commitment to serving our clients through our key pillars: products, service, customer experience, and people.” He added, “This timing is also beneficial to support those whose vehicles have been affected by the Taal Volcano eruption. We want people to know that Nissan’s support continues long after they purchase their car.”
For more information on the Car Care Support promo, visit www.nissan.ph.
New red color for 2020 Honda Civic RS Turbo
HONDA Cars Philippines, Inc. (HCPI) has just announced the availability of the 2020 Civic RS Turbo, which now also comes in a new hue the company calls Ignite Red Metallic. The new color supplants the previous Rallye Red, and will be an exclusive for the RS Turbo variant.
HCPI executives have confirmed that the RS variants across Honda’s range of vehicles have proven a hit among customers.
“With its sporty driving dynamics contributed by its 1.5-liter DOHC I-VTEC engine producing a maximum power output of 173ps at 5,500 rpm, and a maximum torque of 22.4 kg-m at 1,700-5,500 rpm, the Civic RS delivers powerful and responsive performance output with uncompromised fuel efficiency,” said HCPI in a release.
The Civic RS also furthers Honda’s sporty heritage through an exterior design that features a low and wide stance, sharp character lines, an RS design spoiler, and 18-inch Belrina Black RS alloys.
Continuing inside, the new Civic RS receives a leather cover for its seats, an advanced full-color TFT instrument panel with customizable information display, and Honda’s seven-inch touchscreen Advanced Display Audio System with Apple CarPlay and Android Auto capability.
The 2020 Honda Civic RS Turbo CVT will be available at all 38 Honda Cars dealerships nationwide with a suggested retail price of P1.608 million. Four color options in total are available: Ignite Red Metallic (exclusive to RS Turbo CVT), Platinum White Pearl (for an additional P20,000), Cosmic Blue Metallic, and Modern Steel Metallic.
Isuzu Philippines fetes best sales and service performers in 2019
ISUZU Philippines Corporation (IPC) held its 15th Dealer of the Year Awards (DOYA) recently at Hilton Hotel Manila on Newport Boulevard in Pasay City to honor top performers.
The 2019 DOYA “capped off a challenging but fulfilling year for the dedicated men and women of the IPC dealer network’s sales force and after-sales operations.” The awards night has been held annually since 2004 to acknowledge the hard work and achievements of Isuzu frontliners in IPC’s dealer principals and operators.
Awards were handed out to branch, sales, service and parts managers, sales supervisors, and sales executives in an elegant black-tie dinner gala attended by IPC’s top executives and managers of the dealership network. In his welcome remarks, IPC President Hajime Koso said, “Tonight, as we give due recognition to our best dealers and performers of 2019, I would like to encourage all of you to step up to our commitment to serve our valued customers.”
Hailed as the 2019 Dealer of the Year Champion was Isuzu Pasig, with Isuzu Bulacan and Isuzu Sta. Rosa first and second runner-up, respectively. Isuzu Makati won Most Improved Dealership of the Year. The Sales Executive of the Year in the LCV Category was Migueland Castro from Isuzu Edsa, while the Sales Executive of the Year in the CV Category was Erlinda Erfe of Isuzu Cagayan de Oro.
The 2019 DOYA Awards were also handed out to Isuzu Pasig, Isuzu Cebu, and Isuzu Bulacan for being Excellent in Sales Operations; Isuzu Bulacan, Isuzu Sta. Rosa, and Isuzu EDSA for being Excellent in Parts Operation; Isuzu Sta. Rosa, Isuzu Cavite, and Isuzu Alabang as Excellence in Service Operations; and Isuzu Butuan, Isuzu Sto. Tomas, and Isuzu Cabanatuan as Excellence in Customer Service Operations.
PILIPINAS Shell Foundation, Inc. (PSFI) has launched a microgrid hybrid power system in Maytegued that will serve the community in Palawan with 24/7 electricity sourced from solar and wind energy.
Sebastian C. Quiniones Jr., executive director of PSFI, said the power system ensures the community that the organization is committed to work with Barangay Maytegued. He is hopeful that the project would serve as the residents’ “enabler” for development and sustainability.
The hybrid system, which was inaugurated on Feb. 4, is able to generate reliable and clean energy service for the island. It is directly connected to 86 households, where 70 solar home systems were distributed. The system serves as the community’s main source of electricity
“Barangay Maytegued is one of the islands of the municipality of Taytay in Palawan. It is home to about 700 people who has had no access to a stable and reliable source of energy since it’s been inhabited,” PSFI said.
BRUSSELS — The specter of the 1990s BSE crisis means the European Union is likely to reject US demands it ease strict food safety rules, even with President Donald Trump threatening car tariffs if EU countries do not start importing more US farm products.
With European food and farming exports to the United States worth up to $12 billion a year more than imports, US Secretary of Agriculture Sonny Perdue told the EU last month it should adapt its food regulations to reflect “sound science.”
But there seems little prospect Brussels will agree.
Europeans who remember BSE, nicknamed mad cow disease, will not accept any lowering of food standards and no politician could support a trade deal perceived as doing so, said Johan Bjerkem, trade specialist at the European Policy Centre.
“On top of that, you’re negotiating with Trump, for whom not many Europeans have great sympathy,” he said. “Combine these things and it will be very difficult to accept a deal on those issues.”
Trump, who has long complained that the EU’s position on trade is “worse than China,” said on Monday he was training his sights on Europe, raising the prospect of a new trade war.
The EU bans imports of meat treated with growth hormones or poultry washed with peracetic acid, often dubbed ‘chlorinated chicken.’ Both are standard US farming practices.
Washington points to inconsistencies — EU salad leaves are regularly washed with chlorine — and says EU rules are a smokescreen for protectionism. They undoubtedly do benefit EU farmers.
Brussels’ response is that antimicrobial poultry washes mask otherwise far less strict and hygienic standards.
The European Food Safety Authority (EFSA) has concluded that the various washes are not a safety concern, but do not replace the need for good hygienic practices during processing of poultry carcasses.
The agency’s study of hormone-treated meat similarly does not conclude that it is unsafe, but says there is insufficient data to prove it is safe.
CAUTIOUS EU APPROACH
The distinction is important, highlighting the “precautionary principle” that guides EU food safety law.
“The US has strict liability for lawsuits, which we don’t have so much in the EU … Here, the sense is more wanting to minimize the risks,” said Mute Schimpf, food specialist at Friends of the Earth Europe.
Bovine spongiform encephalopathy (BSE), which passed to humans and resulted from cattle being fed the remains of other livestock, led to a worldwide ban on British beef exports and the culling of millions of animals. It and other food scandals, such as dioxin in feed in Belgium, led to the founding of EFSA in 2002 and inform its safety-first approach.
“It led to the introduction in Europe of the precautionary principle, the idea that if you’re not certain, don’t take unnecessary risks,” said Erik Millstone, professor of science policy at the University of Sussex.
Instead of reporting to agriculture ministries or commissioners also concerned about the welfare of farmers and the food industry, food safety agencies became part of policy on health and consumer protection.
EU labeling laws also tightened at a similar time. In 2003, labels were required to show the presence of more than trace elements of genetically modified (GM) crops. The result was that, while millions of tonnes of GM animal feed are imported into Europe, there are no GM food items on sale to EU consumers.
The United States does not require labeling of GM food and some of its farming lobbies believe Europe is unfairly stigmatizing their products with labels.
The restrictions though are not only in Europe.
The United States bans cheese made with unpasturised milk unless it has been aged for 60 days, ruling out imports of French brie and camembert. Kinder Eggs, a chocolate encasing a plastic toy, are also banned.
A lot of standards essentially boil down to local customs and a suspicion of standards elsewhere, particularly practices promoted by big foreign business.
“We work on the principle that if we don’t do it, it must be bad. Whether that is protectionist or not I leave for others to dwell on,” said Hosuk Lee-Makayama, director of trade think tank ECIPE. — Reuters
We live, it seems, in particularly trying times of multiple and simultaneous “acts of God.” No sooner had the Angat Dam water level gone dangerously low causing water interruptions than the African Swine Fever decimated our hogs, the Taal volcano erupted, and the coronavirus pandemic exploded disrupting lives, livelihoods, and property. Acts of God happen but we can’t say exactly when and where. And when they come calling, they wantonly lay waste to everything along the way. As a society, we are forced to take draconian measures (lockdowns, evacuations, livestock culling) and to hope we can wait out their ravages. In those times, we draw upon the reserves we built in calmer times. These reserves serve as the ramparts that stand between us and extinction. Our “resilience” is, in other words, anchored on those fateful reserves.
Which is why it is so imperative that we carefully husband the times of relative normality to build up our reserves. Aesop’s resilient ants survive winter because knew in their heart of hearts that the summer sun was for making hay not for fannying about. The ant society is governed by pheromones which leave no place for envy and self-seeking that could divide and weaken the solidarity of the ants. Every ant, in its given own role, struggles mightily to increase the stored reserves of the colony. Which is why the ants are still with us while the dinosaurs have long gone. They will probably be here long after we humans, the dinosaurs of the 21st century, have gone as well.
But not if suddenly ants acquire a class consciousness. What would happen if suddenly the worker class of ants decide that its members too should now exercise their innate but hormonally suppressed capacity to bear offspring of their own and decide to feed on, rather feed, the queen? If suddenly the forager class decides that the soldier class are having too much fun at their expense and sabotage the food train? The colony will soon die out. Not by a physical act of God but by an internal virus of class hatred.
Humans are blessed and cursed with an evolved consciousness. With this come resentment and envy — all the vices and virtues that adorn a human being. Like it or not, we are prone to class envy and even class hatred.
And human societies survive by reining in and harnessing these tendencies towards the production of social reserves. Our dams, our factories, our transport systems, they all embody our reserves. It is the brotherhood of men that rechannel these individual proclivities to productive endeavors. Unhinged, these tendencies result in social chaos and social collapse.
Apropos this rechanneling of proclivities, I am inspired by two quotations which embody my own limited understanding of how economic progress gets engendered or aborted:
“The test of government is not whether we add to the abundance of those who have much; it is whether we provide for those who have little.” — US President Franklin D. Roosevelt
“You cannot strengthen the weak by weakening the strong; you cannot help the poor by discouraging the rich; you cannot help the wage earner by pulling down the wage payer; you cannot further the brotherhood by inciting class hatred among men.” — US President Abraham Lincoln
All leaders subscribe to the equity ethic of President Roosevelt. But only a precious few subscribe to the efficiency ethic of President Lincoln. President Roosevelt’s is a commitment to the final outcome of inclusive abundance; President Lincoln’s is a commitment to an efficient path towards inclusive abundance. Lincoln’s efficient path is to rechannel not suppress the varied capabilities of different social classes towards inclusive abundance.
Class hatred is antithesis to the efficient path. Most class hating popular leaders produce economic disasters by an excess enthusiasm for the first to the exclusion of the second. Deng Xiaoping’s miraculous China attests to the wisdom of these two ethics pursued as one. Mao Zedong’s China and Nicolas Maduro’s Venezuela attest to the utter folly of the pursuit of equity without the tempering wisdom of efficiency.
It may surprise you as it did me that my first encounter with the brilliant juxtaposition of the above two quotations was not in some ponderous treatise on economic progress but in President Rodrigo Duterte’s 2016 Presidential Inaugural Address. He implied, even as he confessed ignorance of the other cannons of Economics, that these two quotations encapsulated his own innermost economic philosophy. Though more in hope than in conviction, we were reassured. Economic wisdom couldn’t be more succinctly put. In the first two years of Duterte’s presidency, he kept his promise to leave economic policy to his economic team and the economy obliged.
The third year of Duterte saw a switch in the mindset: the second ethic lost ground to the first. After the opposition Otso-Diretso was squelched in the May 2019 elections, Philippine society has been subjected to a firestorm blowing from along the Pasig River. The “hated oligarchs” has resurfaced straight from Joma Sison’s playbook. Suddenly contracts that have served the public well for decades became “onerous” and were threatened with nullification. Has Lincoln’s dreaded class hatred made a landfall? If so, the arteries of brotherhood and thus the capacity to grow our reserves now face rupture. Venezuela beckons.
In that same inaugural address, President Duterte even bound himself and his underlings to the strict observance of the rule of law and the sanctity of contracts: “My adherence to due process and the rule of law is uncompromising.”
“I order all department secretaries and heads of agencies to refrain from changing and bending the rules on government contracts, transactions and projects already approved and awaiting implementation. Changing the rules when the game is ongoing is wrong.”
This is talking the talk of the rule of law and the sanctity of contracts. Walking the walk and staying the course is another matter, but we hoped. President Widodo of Indonesia, already in his second term, stayed the course on the rule of law towards jobs creation. In the Philippines of the post May 2019 election landslide victory, the walk, if at all, is just a chicken walk. 2016 seems so long ago and so far away.
Raul V Fabella is an Honorary Professor of the Asian Institute of Management (AIM), a member of the National Academy of Science and Technology (NAST) and a retired professor of the University of the Philippines. He gets his dopamine fix from hitting tennis balls with wife Teena and bicycling.
The Research Institute of Credit Suisse paints a grim picture of wealth distribution in the Philippines. According its latest Global Wealth Report, the Philippines is one of the most unfair societies on the planet where one-tenth of one percent of the population control 76% of the country’s wealth.
In terms of incomes, the report showed that a whopping 89% of adults in the Philippines earn under P500,000 per year (or less than P10,000 per month); 10.2% earn between P500,000 and P5 million; .07% earn between P5 million and P50 million; while the .01% elite earn over P50 million per year.
No surprise, 16.1% of all Filipino families live below the poverty line. These families, mostly consisting of five people, collectively earn below P10,481 per month. On the other hand, a mere 105,000 individuals earn between P4 million to P400 million pesos a month.
The Philippines has a GINI coefficient of 82.6. For those unaware, the GINI index is a statistical number that measure a country’s degree of wealth inequality. The higher the value, the more uneven the distribution of wealth.
How did the Philippines become a society so severely imbalanced?
It was designed that way by the narrow elite who write our laws. The law, and the many regulations that govern business, were purposely written to favor big business and eliminate competition.
As a result, most industries in the Philippines operate with just a few players controlling supply, price, distribution and access. In other words, our industries are set up as oligopolies with little or no pressure from competition. This is particularly true in power generation and distribution, telecommunications, infrastructure development, transport services, manufacturing, agriculture, large-scale retail and wholesale industries.
The few players in oligopolies enjoy scandalous profits despite being inefficient and delivering products and services that are oftentimes substandard. Their owners become bigger (and wealthier) without much pressure to improve.
Moreover, having a relatively small number of large-scale employers in an economy gives rise to a situation called “monopsony.” In a monopsony, the few employers that exist can repress wages so as to maximize profits. They keep the workforce living at subsistence levels while they amass wealth. Case in point: Note how cashiers and salespersons in large retail chains live hand to mouth while their owners roll in profits. Monopsonies exacerbates income inequality.
Why do oligopolies thrive in the Philippines? Oligopolies prosper and multiply because our laws favor them. In particular, our laws give undue advantage to big local corporations to the detriment of small- and medium-sized enterprises (SMEs) and foreign firms.
Despite the efforts of governments to develop the SME sector — business conditions in the Philippines remain extremely challenging for them. In obtaining business financing, for instance, banks remain tight-fisted in granting credit to SMEs despite the law mandating them to allocate 10% of their loan portfolio to the entrepreneurial sector. In contrast, clean credit lines are readily granted to large corporations.
In project biddings, government agencies and private firms often require a minimum paid up capital and other constraints that preclude SMEs from participation.
Even the justice system works against SMEs. In enforcing contracts, only big corporations have the resources and wherewithal to navigate their way through the justice system. In trade, nontariff measures (NTMs) or steep technical regulations, act as barriers that prevent SMEs from engaging in imports and exports. In government regulations, the Bureau of Internal Revenue and local governments make it tedious (and expensive) for SMEs to obtain the necessary permits, licenses, and tax clearances to operate.
All these make it nearly impossible for SMEs to mature into strong entities that can compete with oligopolies.
With SMEs unable to break the stronghold of industry giants, one would assume that large foreign firms would fill the gap and provide the needed competition.
Unfortunately, this is not the case. Again, Philippine laws were written in such a way that it discourages foreign firm from competing with local behemoths.
As we all know, the 1987 constitution restricts foreign participation in industries relating to public utilities, mass media, education, and natural resources. In addition, the constitution puts a 40% cap on foreign equity in most sectors.
A study conducted by the Organization for Economic Co-operation and Development (OECD) shows that the Philippines has the most restrictive environment for foreign investors as compared to 62 other emerging economies. While other countries are doing their best to attract foreign direct investments, our constitution discourages them.
The economic laws of the 1987 constitution have worked contrary to the national interest but to the advantage of local conglomerates. It is the reason why electric power supply across the country is perennially in deficit despite being the most expensive in the region. It is why internet speed is among the slowest despite high toll rates. It is why the mining industry remains low yielding and environmentally damaging despite our wealth of natural resources.
The economic laws of the constitution is like a slow-releasing poison that the legislators of the time damned future generations of Filipinos with. We will do well to amend it. The sooner, the better.
In contrast, the sectors that received the highest level of foreign participation by way of equity investments are the most efficient and productive today. They include the hotel and tourism sector, food production, oil and gas.
With SMEs and foreign firms unable to penetrate industries and provide competition, oligopolies are free to manipulate supply and price. They grow not by becoming more efficient but by controlling market conditions.
This is why the elite control the lion’s share of the country’s wealth. What is interesting is that the majority of these families also belong to (or are connected with) political dynasties. The elite write the laws from which they benefit. It is a perverse, self-serving design that we have been forced to live with.
The establishment of the Philippine Competition Commission in 2016 was a step in the right direction but much has yet to be done to eliminate undue advantages enjoyed by the oligopolies.
So what can be done to level the playing field and promote competition? Three reforms need to be put in place: 1. eliminate the barriers that prevent SMEs from flourishing, the most significant of which is access to credit, ease in government regulation, and lowering cost of trade; 2. open Philippine industries to foreign competition by amending the restrictive laws of the constitution; and, 3. pass the Anti-Political Dynasty Law.
The second and third requirements necessitate statesmanship and self sacrifice from our legislators.
But, as expected, certain members of congress have already said they would oppose the proposal to outlaw political dynasties when charter change is deliberated.
It looks like the elite are intent on keeping their perverse, self-serving design in place.
The recent survey on self-rated poverty done by the Social Weather Stations (SWS) piqued my curiosity. The Fourth Quarter of 2019 survey (conducted on Dec. 12-16, 2019) showed self-rated poverty spiking by 12 points compared to the previous quarter. It increased from 42% in September 2019 to 54% in December 2019. In the same vein, self-rated food poverty increased by six points in the same period, from 29% in September 2019 to 35% in December 2019.
To put things in perspective, SWS computed the annual average of self-rated poverty rate in 2019 at 45%, still lower than that of 2018, which was 48%. For self-rated food poverty, the annual average rate for 2019 was 31%, also lower than the self-rated food poverty rate in 2018, which was 33%.
Nevertheless the spike in self-rated poverty in the last quarter of 2019 is surprising, taking into consideration other factors or developments, namely:
1. In the first quarter of 2019, SWS’s survey on self-rated poverty showed a remarkable drop, 12 points below December 2018. This is remarkable given that the reduction in self-rated poverty happened on the heels of the elevated inflation in 2018 brought about by the sharp rise in food prices (mainly, a rice shortage because of a policy that restricted imports) and the increase in petroleum prices, mainly arising from the surge in international crude oil prices. (The culprit is not the tax reform.)
2. According to the SWS, the hunger incidence dropped — from 9.1% of families experiencing involuntary hunger (at least once in the past three months) in September 2019 to 8.8% in December 2019. The annual average hunger rate in 2019 was 9.3%, compared to 10.8% in 2018.
3. The fourth quarter of 2019 SWS survey found an increase in the number of Filipinos who believed their lives improved. The survey result showed that 39% of Filipinos were better off while 21% were worse off, hence a net gain score of +18. This was an increase from the net gain score of +11 in September 2019.
4. Inflation has leveled off at a low rate. In December 2019, inflation stood at 2.5%, compared to 5.1% in the same period in 2018. The annual average inflation rate for 2019 was likewise 2.5%, down from 5.2% in 2018.
5. Philippine unemployment decreased to 4.5% in October 2019, from 5.1% in October 2018. Underemployment likewise declined to 13% in October 2019, from 13.3% in October 2018. One in fact can observe a steady annual decline in unemployment since 2014. Moreover, the unemployment and underemployment rates in October 2019 were the lowest across all quarters since 2005.
How then can we reconcile the increase in self-rated poverty with other indicators (some of which are also drawn from the SWS survey) like the trend of declining poverty (as shown by the SWS’s self-rated poverty and the Philippine Statistics Authority’s official figures on poverty incidence), hunger incidence, low and stable inflation, and decreasing unemployment and underemployment?
SWS founder and former economics professor Mahar Mangahas has pointed out that the most significant determinants of self-rated poverty are inflation, especially food price inflation, and underemployment.
But in the current period, inflation is low, although there was an uptick in the inflation rate between the third and fourth quarters of 2019. The rise in inflation can nevertheless be overcome by a higher increase in income. Underemployment and unemployment have decreased. The increase in employment, particularly in the service and industry sectors, translates into higher incomes. Moreover, the budget for government transfers increased. On top of the conditional cash transfers (CCT), government introduced unconditional cash transfers (UCT) as a compensation for the poor and the near poor in conjunction with the comprehensive tax reform. The UCT was calculated in a way that the amount to be given was greater than the estimated costs that could be attributed to the tax reform.
It is worth mentioning that a 2018 World Bank publication titled Making Growth Work for the Poor: Q Poverty Assessment for the Philippines did state that the leading income sources that contribute to poverty reduction (2006-2015) are non-agriculture wage, government transfers, domestic remittance (note, not foreign remittance), and agriculture wage, in that order. In short, Filipinos escape poverty by having quality employment (wages) and receiving government cash transfers.
So, what can possibly explain the significant increase in the self-rated poverty, in light of the positive indicators on prices and employment?
I posit three possible explanations.
The first plausible explanation is that self-rated poverty is also about relative poverty (hence the respondents would indicate sharply differing income thresholds to be above poverty). As lives of households or families improve, as they receive or earn higher income, their standards and expectations likewise get higher.
Second, still related to relative poverty, is the feeling of inequality, again leading the self-rated poor to aspire for higher living standards. Although what has happened is that the rising tide has lifted all boats, and although the lives of the poor have improved, the fact is that the non-poor — the middle class and the upper class — have gained more from the economic gains. To illustrate, the middle class has benefited tremendously from the income tax reform, through a significant reduction of tax rates. The middle and upper classes, too, are the main beneficiaries of populist measures like free college education. The poor, on the other hand, do not have a direct benefit from the income tax reform (they are exempted from paying income tax, for they do not have sufficient income). Nor can their children avail themselves of free college education, for many of the poor children cannot even finish primary education.
The third explanation is the dismal performance of the Department of Social Welfare and Development (DSWD) and the Land Bank of the Philippines in distributing the cash grants to 10 million poor households and indigent senior citizens. According to the Land Bank, the completion rate of the UCT in 2018 was 81.9%, equivalent to around 8.2 million beneficiaries receiving the UCT amounting to P2,400. But in 2019, wherein the cash subsidy was increased to P3,600, the completion rate was less than half, or 42.85%, equivalent to about 4.3 million beneficiaries. The disbursement rate to Land Bank branches in 2019 was also low, equivalent to 55%, compared to a sterling 97.55% fund disbursement rate in 2018.
For the third reason alone, which is factual, we could have avoided the spike in self-rated poverty.
Self-rated poverty is a politically sensitive indicator. After all, the Filipino people will not vote on the basis of the official poverty data released by the Philippine Statistics Authority. They will vote on the basis of what they feel, what they think. Government agencies and politicians must pay serious attention to it.
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.
The day before Valentine’s Day, red roses were selling briskly at P5,000 per dozen/per bouquet at a small flower stand in a Makati mall. What a waste, the dumpy old widow grumbled to herself — whoever guy is giving that near-wilting bunch of flowers to his lady love would do better to give her the cash.
But that is the ritual, Tita. Have you forgotten when it was your day? Ah, yes! My office was like a funeral wake, with bouquets and bouquets of flowers on Valentine’s Day. No reflection on my attractiveness or desirability as a woman — Valentine’s Day was a safe excuse for business friends and other publics, including co-employees, to give something (flowers) without lasting monetary value to the receiver, and less likely to be perceived as “sip-sip” (a lick-ass) or bribing for favors and advantage. I would have returned them all, but I decided to raffle these off, cost-free, to my male staff, for them to give to their “Valentines.” Flowers on Valentine’s Day have become so obligatory.
“In Japan, it’s women who do the gift giving on Valentine’s Day,” a USA Today article of Feb. 13, 2016 said. Friends, family, and office workers are on the list, and the gift on Feb. 14 is traditionally a box of chocolates. The male recipients are to reciprocate, also with chocolates, on March 14, White Day, if they wanted to. Of course, most, if not all, men who receive chocolates from a woman would, out of courtesy, pay back with chocolates on White Day. The Chocolate and Cocoa Association of Japan estimates that $500 million is spent annually on chocolates for Valentine’s Day, which is less than a third of what Americans spend on candy for Feb. 14. Japanese spend another $500 million on chocolate for White Day, the USA Today write-up said.
The ritual, which is called “giri choco,” started in the 1950s and translates as “obligation chocolates.” Women in the workplace are the most shackled by this tradition, as they are expected to buy chocolates on Feb. 14 for their male co-workers, above them or below them in rank. However, growing numbers of women are snubbing the Valentine’s Day tradition, with a recent survey showing that only 35% of women said they planned to offer chocolate to their male colleagues, the majority instead opting to buy presents for loved ones and friends. “Some firms are now banning the office tradition, which is viewed by many in the country as a form of abuse of power and harassment,” the UK newspaper The Independent wrote last week.
A 2016 editorial of the Japan Times bemoaned that the 1986 equal employment opportunity law — amended in 1999 against discriminatory treatment in the recruitment, hiring, assignment, and promotion of workers for gender-based reasons — has had lackluster compliance even as Prime Minister Shinzo Abe in 2015 required businesses as well as central and local government organizations to compile and publicly disclose plans to increase women in management. Japan’s gender wage gap, at 24.5%, is third-worst among developed countries. But persistent gender attitudes and roles might support the “glass ceiling” which restricts the advancement of women: the male-centric work ethic that requires long working hours and extended male-exclusive bonding after work, vis-à-vis the “tough choice (of women) between their families and their careers,” with married working women having to voluntarily exit the work force to stay home and raise children, or single women opting to stay single to build a career among men. Sodeska! Women hold just 13% percent of managerial positions in Japan, compared with 44% in the United States. According to a recent Reuter’s poll, three-quarters of Japanese companies say they have no female senior executives. “Politics is even more of a male bastion. With women accounting for just 10% of the members in Japan’s lower house, the country ranks 161st out of 193 countries in female political representation, according to the Inter-Parliamentary Union (The New York Times, Oct. 17, 2018). Combined female representation in politics and in business, Japan ranked at the bottom of the G7 countries in 2016.
Compare the status of women workers in Japan, who comprised 43% of the labor force in 2016, with women workers comprising 49.3% of the Filipino work force, also in 2016, both according to respective national statistics. According to the Philippine Commission on Women (PCW), more than 27% of women in the labor force in 2014 held executive and supervisory positions in government and business. By the May 2016 national elections, 78.5% of elective government positions were won by women voted in by a voter turnout of 43.3 million, 80.1% of whom were women.
These numbers seem to show the higher status of women in the workforce and in society in general in the Philippines, compared to other countries. Indeed, the Philippines ranked eighth (0.799) of 149 nations in the 2018 WEF Global Gender Gap Report, higher by two notches from 10th place (0.790) in 2017, on their progress in gender parity through economic participation and opportunity, educational attainment, health and survival, and political empowerment (Sunstar, Dec. 20, 2018). The report also showed that the Philippines is the most gender-equal country in Asia.
One thing disturbs the pride of achievement in gender-equality though: there must be a social cost, particularly to the family unit, for a mother or female head of family to prioritize making a living over the unpaid services of making a home. Then we appreciate and respectfully admire “the cruel choice” between remaining single (to pursue a career among men) or having a family (and giving up a career) that the Japanese working woman is faced with. For the Filipino working woman, she would have to grapple with the same male-centric corporate and business culture of the “old boys club” that will extract from her, more effort and time at the office at the sacrifice of being home with family.
The Philippine Statistics Authority shows that the number of women Overseas Foreign Workers surpased male OFWs since 2014, growing cumulatively from 451,000 in 2000 to 1.25 million of the total 2.447 million OFWs in 2015. One percent of the 100 million Filipinos in 2015 were women aged 25-29 who flew to Hong Kong and the Middle East to take care of foreign children and the elderly. In Japan, where roughly one-fourth of the population is aging (65 years old and over), going abroad as domestic helper is not done and is not compatible with social traditions of filial love and care. Falling birthrates have left Japan with one of the world’s oldest and fastest-shrinking labor forces, and the nation is focused on strengthening the social foundations of family with planned increased births. The “giri choco” tradition on Valentine’s Day might yet help boost the “Womenomics” of Shinzo Abe that urges women to take the initiative in socioeconomic development.
On Valentine’s Day here, the Social Weather Station (SWS) came out with significant insights on love and making a living:
Three out of five, or 60%, of Filipinos said they will choose their career over their love life if they had to. Of this, 77% of men and 83% of women who never married said they would choose career over relationships. Half of married men and those living with partners would also pick their profession over their love life, while 65% percent of women with live-in partners, and 49% of those who are married would choose their career.
“By sex, 68% of men and 63% of women experienced having a successful love life and career at the same time,” SWS said.
Flowers on Valentine’s Day are always welcome.
Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.
