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Nation at a Glance — (10/15/19)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Nation at a Glance — (10/15/19)

A bright and robust sector

The Philippine insurance industry remains bright and robust, exhibiting positive growth in recent years despite some internal and external challenges. In fact, in 2018, the local insurance sector marked another banner year after posting new record highs in terms of premium, assets, net worth, and net income. Preliminary data based on unaudited reports submitted by all industry players to the Insurance Commission (IC) showed that the industry’s assets reached an all-time high of P1.58 trillion as of end of 2018, up 1.28% from the P1.56 trillion recorded as of end 2017.

The industry also posted the highest amount of premiums collected for the recent years. The industry’s total premium income grew 11.67% to P290.15 billion in 2018 from P259.82 billion posted a year ago.

In terms of net worth, the local insurance industry likewise posted a record-high net worth amounting to P337.37 billion in 2018, an increase of P17.07 billion from P320.3 billion a year ago. The industry’s total net income also rose to a record high of P37.43 billion from P36.39 billion, which translates to a 3% growth.

For the first half of 2019, however, the industry experienced a slight slowdown in terms of premium income, based on the unaudited quarterly reports submitted by life and non-life insurance firms and mutual benefit associations (MBA) to IC. The latest report released by the regulator on Oct. 10 showed that the industry’s overall premium income dropped 2.64% to P141.91 billion in the first six months of the year from P145.76 billion posted in the same period last year.

“The decrease in the total premium of the insurance industry can be attributed to the decrease in the uptake of single premium variable products due to global market uncertainty and economic slowdown,” Insurance Commissioner Dennis B. Funa was quoted as saying in a statement.

“Despite the year-on-year increase in the first year and renewal premiums in variable life products of 11.67% and 32.04%, respectively, the decline in the premium from the sale of variable life insurance products was caused by the significant decrease of single premium of 52.5% from P43.24 billion last year to P20.54 billion this year,” he added.

Meanwhile, premiums collected from traditional life insurance products increased by 12.55% to P31.17 billion as of end of second quarter of this year from P27.69 billion during the same period in 2018.

“A remarkable increase of 94.97% should also be noted in single premium policies of traditional life insurance from P1.1 billion in Q2 2018 to P2.2 billion of the same quarter in 2019,” Mr. Funa said.

The non-life insurance sector’s net premiums, on the other hand, grew by 12.98% year-on-year to P27.61 billion from P24.44 billion in the previous year. Consistent with the trend in the past reporting periods, the motor car insurance business contributed majority of the total net premiums at 49.47%.

Similarly, the MBA sector’s premium income grew 13.54% to P5.88 billion as of end of second quarter this year from P5.18 billion posted in the same period a year ago.

Overall, the total assets of the local insurance industry in the first six months of 2019 rose by 11.79% to P1.72 trillion from P1.54 trillion as of end-June last year.

“As of end of the first half of this year, the three sectors of the insurance industry registered positive growth in terms of assets. A significant portion of the industry’s assets or 88.37% (P1.52 trillion) were held in income generating investment,” Mr. Funa said.

Meanwhile, early this year, IC also released the ranking of top insurance companies in the country for 2018 in terms of key insurance statistics.

Among the life insurance companies in the country, Sun Life of Canada (Philippines), Inc. emerged on top and has retained its market leadership in terms of premium income collected at P37.39 billion. In terms of new business annual premium equivalent, Sun Life also topped the other life insurance companies with P8.22 billion.

Based on net income, on the other hand, Philippine American Life & General lnsurance Co., (Philam Life) took the top spot with P9.8 billion. It also topped the sector in terms of assets and net worth, amounting to P246.75 billion and P78.87, respectively.

For the ranking of non-life insurance companies in terms of net premiums written for 2018, Prudential Guarantee & Assurance, lnc. remained on top after recording the highest premium income of P5.18 billion.

In terms of gross premiums written and assets, Malayan Insurance Company, lnc., ranked first with P10.16 billion and P34.28 billion, respectively.

Based on net worth, Pioneer lnsurance & Surety Corporation has retained its market leadership with P15.39 billion. The BPI/MS lnsurance Corporation, on the other hand, recorded the highest net income with P453.83 million.

According to IC, existing insurance companies are required to increase their respective net worth to P900 million by end of 2019 from the existing minimum of P550 million. This is the penultimate mandatory increase in minimum net worth requirement as required under the lnsurance Code, as amended by Republic Act No. 10607. By end of 2022, firms are required to have a net worth of at least P1.3 billion. — Mark Louis F. Ferrolino

Engaging millennials in insurance

Millennials, people 22-38 years old, are the single force disrupting insurance, according to IBM. “They don’t buy their father’s insurance and they don’t shop for it the way their parents do,” read an article on its web site. “Traditional insurance products just don’t match millennial lifestyles. And, almost no millennial wants to chat about his personal insurance needs with some guy who could be his father (or grandfather). Instead, millennials prefer the convenience and relative anonymity of shopping online for products that match their way of life.”

The millennial market has been posing a challenge in the insurance industry. In fact, a 2015 Gallup poll found millennials to be least engaged with insurers.

For insurers to meet the millennial market, it is necessary for them to fully understand how they think and behave and thereafter set a strategy that will reach and engage them.

In an interview with Insurance Business Asia magazine published on its web site, Nick Chadwick, a former senior researcher at market research cloud Fuel Cycle, observed that millennials “want to be engaged using multiple methods, including social media, apps, emails, online communities, or any other method available to the insurer.” In light of this, he suggested that insurers should set up direct channels of communication such as mobile apps or online web sites as well as invest in several non-traditional areas such as research and development and customer intelligence.

“[G]iving a voice to your consumers is the best way to ensure that you are meeting their expectations and needs on a consistent basis,” added Mr. Chadwick.

These things, along with more significant developments, have been done by insurance companies in addressing the challenge of engaging the millennial market.

Locally, for instance, Allianz PNB Life Insurance, Inc. in 2018 launched AZpire Growth, a millennial-tailored insurance product that acts both as protection and an investment vehicle. Philam Life, meanwhile, finds millennials to be one of its markets for its AIA Critical Protect 100. Manulife Philippines, on its part, tapped a celebrity very known to the millennial market as its endorser to attract and encourage millennials to start investing.

Overseas, an insurance start-up based in New York, USA called Lemonade has been popularly tagged as a “millennial-friendly” provider.

“Using artificial intelligence, a mobile app and other tech-centric methods, Lemonade founders Daniel Schreiber and Shai Wininger are turning the centuries-old business of property insurance into a Millennial-friendly consumer product,” reported Forbes magazine on its web site last May.

With its renters insurance covering personal property, personal liability, loss of use, and medical payments, Lemonade claims “to process claims in just three seconds” through its AI software. Its user-friendly interface on its web site and mobile app adds another edge to the product.

“It didn’t feel like we were taking the terrifyingly adult leap of insuring our belongings in case of an emergency,” read a review of Lemonade on Business Insider. It likened getting insurance on Lemonade to ordering dinner on a food delivery app, “except instead of getting chicken and broccoli, we get reimbursed if a leak in our apartment damages our couch.” — Adrian Paul B. Conoza

How the Gokongweis are paving the way towards a sustainable future

John L. Gokongwei, Jr. — BW File Photo

When his father died, the 13-year-old John L. Gokongwei, Jr. was left with the massive responsibility of supporting his family. Starting from selling candles, soap, and thread in Cebu’s bustling market, he slowly and steadily began his business adhering to a philosophy of responding to customers’ needs, making products accessible, maximizing resources, and seizing opportunities that came along. Success came, if not swiftly, then eventually.

Now, Mr. Gokongwei is the founder and chairman emeritus of JG Summit, one of the largest and most diversified companies in the Philippines, and he has interests in industries such as real estate, airline, retail, petrochemical, and banking.

He had made a lasting mark on Philippine business. Now he and his family are putting their fortune towards creating a lasting legacy.

Bringing sustainability to the next level

Taking JG Summit to a new frontier of sustainability is President and CEO Lance Y. Gokongwei — BW File Photo

His son, Lance Y. Gokongwei, in particular, is committed towards this cause, with the formal integration of sustainability at JG Summit being a key priority since he took over as president and chief executive officer (CEO) of the company in May 2018.

One milestone in JG Summit’s sustainability journey is the CEO Sustainability Summit, a conglomerate-wide alignment, where all the CEOs of the conglomerate’s strategic business units shared how their frameworks, best practices, and future initiatives toward enhanced sustainability are rooted in their business strategy.

During the summit, Edgar O. Chua, chairman of the Philippine Business for Environment and former country chairman of Shell Group of Companies in the Philippines, highlighted how sustainability has evolved to socially conscious, “green” or ethical investment. From its early forms as philanthropy and corporate social responsibility, Mr. Chua said that “Sustainability has now evolved to social investment, an investment strategy which seeks to consider both financial return and social, environmental good to bring about positive social change.”

The CEO Sustainability Summit was also an opportunity for the JG Summit Strategic Business Unit (SBU) CEOs to explore potential synergies within the conglomerate that address issues like waste management and reduction, as well as water and energy efficiency. With its scale, diversity, and strong ecosystem, JG Summit hopes to utilize and build on its expertise in different areas of business to deliver long-term, positive impact on a wider and more inclusive scale.

Meanwhile, in the transportation scene, Cebu Pacific’s (CEB) investment in game-changing “ecoplanes” that can fly passengers farther and faster at less fuel burn manifests the airline’s commitment to reduce its carbon footprint. Its multi-awarded tourism campaign “Juan Effect” is a multi-sectoral advocacy whose goal is to influence tourists, local business owners, and LGUs to make a difference by changing at least one daily habit to mitigate the negative impact of tourism on popular tourist spots.  Supporting this is CEB’s implementation of environment-friendly processes and investments in their operations.

At URC’s Sugar & Renewables and Agro-Industrial Divisions, over dependence on fossil fuel-based energy has been considerably reduced with the help of biomass and biogas technologies that use waste and by-products generated by the plants. Generating energy from plant and animal waste has resulted in lower electric consumption while protecting the environment.

For Robinsons Land Corporation, integrating business and sustainability strategies entail fostering responsible growth, reaching underserved markets, and reshaping communities. Robinsons Starmills in Pampanga boasts of having the world’s largest rooftop solar panel. Total investment in solar panels for the various Robinsons malls all over the country will reach close to P1.7 billion by the end of 2019.

JG Summit Petrochemical Group’s flagship environmental programs in Batangas City manifest that environmental responsibility is a priority. One such initiative is the construction of artificial reefs in Barangay Simlong where the plant is located. Now on its 17th year, the project has demonstrated a long-term positive impact on the marine environment in the area. As it supports abundant marine life, fishermen from nearby communities now have better fishing opportunities. The potential for the artificial reefs to become tourist income-generating diving sites is also being explored.

Robinsons Bank focuses on financial inclusivity to serve the typical Filipino who remains unbanked. Simplé Savings, which was launched in October 2018, opened gateways to easily obtain a savings account with its simplified requirements.

As one of the country’s largest multi-format retailers, JG Summit affiliate Robinsons Retail Holding, Inc. contributes to the growth of small-to-medium enterprises (SMEs) within its supply chain. Out of its total 2,300-strong supplier base across all its categories, around half are SMEs. Meanwhile, TGP (The Generics Pharmacy), which has the widest network of community drugstores in the country with around 2,000 branches nationwide, encourages aspiring entrepreneurs through its franchise model.

The various SBU CEOs also shared their dashboards, which identified the key material topics that need to be monitored for their upcoming sustainability reports.

“Today, more than ever, business exists for a nobler purpose. Business has an inherent responsibility to uplift the lives of people while ensuring that this one Earth where we live in remains viable for future generations,” Lance Gokongwei said of the SBUs’ efforts to become increasingly sustainable.

A legacy for future generations

While the CEO Sustainability Summit was an opportunity to affirm JG Summit’s top-level commitment to its transformation, it was also a chance to ensure that sustainability is ingrained in the way the company does business for generations to come.

In one area of the room, Lance Gokongwei’s wife and children sat and listened while different strategic business units shared their road maps toward enhanced sustainability.

For the JG Summit chief, the presence of his children in the summit is not only a continuation of the family tradition of exposing their children early on to the business that their grandfather built and expanded to the next generation. More importantly, he wanted them to learn how business today is evolving — how an entrepreneurial mindset needs to include commitment to the common good.

“I have my kids here listening so they can see that their father is working for a company that is socially responsible. I do think that’s probably true for you, with your own families,” he told the summit’s participants.

And with this, the conglomerate’s journey to sustainability continues.

High-tech gadgets for high-ranking executives

The demands of top executive posts can sometimes be too heavy to handle. But smart technological devices can help ease the workload. Here are some of them:

Microsoft Surface Pro 6

Microsoft’s very own creation, Surface Pro 6 is one of the best Windows 10 devices in the market today. This two-in-one tablet computer is lightweight and therefore easy to carry around. And it’s remarkably powerful as well, running on the latest 8th generation Intel Quad Core processor. Microsoft says it’s 67% faster than the fifth generation Surface Pro. Surface Pro 6’s 12.3-inch screen is also one of the sharpest around for a tablet and a laptop, with a resolution of 2736 x 1824, resulting in pixels per inch of 267. What’s more, the device offers a battery life of up to 13.5 hours of local video playback. There are several storage options available: 128 GB, 256 GB, 512 GB and 1 TB solid-state drives. Surface Pro 6 has unibody magnesium design and comes in two colors, platinum and black.

Apple iPad Pro

Described by Apple as its most advanced and powerful iPad ever, iPad Pro has two models, an 11-inch one and a 12.9-inch one, which both possess the Liquid Retina display technology. According to Apple, the screen of the iPad Pro is the brightest and the most color-accurate iPad display, with wide color gamut and anti-reflective coating for a natural and accurate viewing experience indoors and out. The new iPad Pro also features ProMotion technology that automatically adjusts the display fresh rate up to 120 Hz for smooth scrolling and better responsiveness. Despite being a laptop and running on the mobile operating system of Apple, iOS, iPad Pro is no slouch when it comes to performance. Apple says the A12X Bionic chip, with four performance cores, four efficiency cores and next-generation Neural Engine, in the iPad Pro outperforms most PC laptops. The other key feature of the tablet is the USB-C connector, which replaces the Lightning connector present in previous iPad Pros and can be used to charge an iPhone.

Samsung Galaxy Note10

The newly released flagship phablet of Samsung, the Note10 is a sophisticated piece of technology crafted to be sleek, slim and distraction-free. For the first time, the new Note series comes in two screen sizes: 6.3 inches (Note10) and 6.8 (Note10+) inches. The display on both models is considered to be Samsung’s best smartphone display yet. It is a Dynamic AMOLED kind of display that has a stunning wide color range, an HDR10+ certification and Dynamic Tone Mapping. Among the key productivity features of the Note10 series is the handwriting-to-text functionality; users can scribble down notes with the S Pen and convert their handwriting into digital text in Samsung Notes, an app, and export it to different formats, including a Microsoft Word file. The Note10 smartphones that have 5G can reach hyper-fast speeds (There are Note10 versions that have LTE instead). Note10+ 5G, in particular, is capable of harnessing the full power of the next-generation network for streaming high-resolution video, among other activities.

BSP boosts watch on big banks

THE BANGKO SENTRAL ng Pilipinas (BSP) has enhanced its framework for watching banks deemed too big to fail, the monetary authority said in a press release on Saturday.

The BSP said the approved “enhancements” to its framework for watching domestic systemically important banks (D-SIBs) are designed to better determine how important a bank is to the health of the financial system.

The new features which the BSP’s Monetary Board has approved include adoption of threshold levels and other revisions to weights of indicators and their composition, as well as calibration of additional capital requirement.

These changes are applied both on a consolidated basis on all universal and commercial banks, as well as their subsidiary banks and quasi banks, as well as branches of foreign lenders.

Initial guidelines for D-SIBs were released in October 2014.

A bank is considered “systematically important” if — because of its size — its distress or failure would disrupt the domestic financial system and threaten general economic activity.

Apart from requiring such banks to have bigger capital, they are also subject to closer supervision and are required to have a recovery plan that addresses the risk they pose to the financial system and the entire economy.

Under the revised framework, a bank’s systemic importance is gauged according to indicators for size, interconnectedness, substitutability and complexity. Among these four indicators, size and interconnectedness bear the greater weight “as these factors are more critical… in determining a bank’s systemic importance in the Philippines, taking into consideration the simple structure of the Philippine financial system,” the BSP said in its news statement.

D-SIBs are then identified based on overall scores against certain thresholds.

Depending on their degree of systemic importance, such banks are categorized into higher loss absorbency groupings and will be required to raise their minimum common equity tier 1 (CET1) capital by 1.5-2.5% of total risk-weighted assets. This, the BSP said, “aims to bolster resilience of D-SIBs”. This requirement will be on top of the existing CET1 minimum, capital conservation buffer and countercyclical capital buffer (an extension of the capital conservation buffer) required of all universal and commercial banks, as well as their subsidiary banks and quasi-banks.

“Failure to meet the foregoing regulatory minimum will subject the bank to constraints in the distribution of their income,” the central bank said. — L. W. T. Noble

Biomass dev’t pushed to foreign investors

By Victor V. Saulon
Sub-Editor

THE DEPARTMENT of Energy (DoE) has opened biomass energy development to full foreign ownership to encourage growth of the sector that has lured only a few investors even after the feed-in tariff (FiT) scheme gave them a fixed, subsidized rate for their power output.

Marissa P. Cerezo, a director at the department’s Renewable Energy Management Bureau (REMB), said the DoE was working on immediate publication of the “omnibus guidelines” for the award and administration of renewable energy contracts, signed earlier this month by Energy Secretary Alfonso G. Cusi.

“In these new guidelines, we opened up the biomass sector to foreign corporations,” she told reporters, adding that the DoE has done away with the 60-40% ownership rule in favor of Filipinos.

She said the reason for allowing foreign ownership in biomass development is that this thrust uses a natural resource, hence, no foreign ownership limitation should apply.

Biomass energy projects use agricultural waste to generate energy. The DoE has also classified waste-to-energy projects under biomass development, thus widening the sector’s scope.

“We don’t have the local technology on biomass yet so with this policy opening up to foreign companies, we believe that a lot more foreign companies will engage in biomass development or waste-to-energy development,” she said.

DoE Undersecretary Felix William B. Fuentebella said the new guidelines have also removed the blocking system for biomass projects, which is akin to delineating the scope of a service contract in petroleum exploration projects. A block is equivalent to 81 hectares.

“You’re not supposed to explore. There’s no exploration stage. That’s why in the award of the contract, it will start with operating stage,” he said.

Monalisa C. Dimalanta, chairman of the National Renewable Energy Board (NREB), said it was the biomass developers themselves who sought clarification from her office about whether technologies involved in waste-to-energy projects can be considered as exploration projects.

She said NREB, which advises the DoE on renewable energy issues, believes that these projects do not involve natural resources thus the nationality requirement should not apply.

“I think that’s an indication that it will also unlock more interest or will realize more interest in the sector because… the request came from that sector itself,” she said.

Mr. Fuentebella said he was optimistic that the new guidelines would encourage more investments in biomass projects.

“We’re addressing one of the hindrances,” he said, referring to ownership restrictions.

He also said the problem of feedstock availability could be addressed by business models that allow the supplier of agricultural waste to be part-owner of the power plant projects.

Biomass development is among renewable energy technologies for which the DoE had set an installation target in a race to complete a project and qualify under the feed-in tariff program, an incentive scheme that grants priority connections to the grid, priority purchase and transmission of, and payment for, electricity generated.

Under the rules, eligible RE developers are guaranteed a rate for 20 years for each kilowatt they produce. For biomass developers, the rate was set at P6.63 per kilowatt-hour (/kWh). The rate was degressed to P6.5969/kWh for 2017, when the scheme was supposed to end.

But on Feb. 23, 2018, the DoE endorsed to the Energy Regulatory Commission the extension of the biomass installation target for two years — from Dec. 31, 2017 until Dec. 31, 2019 — or upon successful commissioning of projects covering the unsubscribed balance of their respective 250-megawatt (MW) installation targets, whichever comes first.

At that time, up 170.33 MW had been taken up and considered FiT-eligible by the DoE, leaving developers in a race to complete their projects ahead of the others before the end-2019 deadline.

Ms. Dimalanta said NREB was expecting the installation target to be exceeded by yearend. The board has a pending request to the DoE to accommodate the excess.

For 2018 and 2019, the degressed rates for biomass are P6.5639 per kWh and P6.5310 per kWh, respectively.

“As of now, based on the guidance of the Secretary, until 2019 na lang because ’yung extension na two years will be finished by 2019,” said REMB Director Mylene C. Capongcol in an earlier interview.

“Inaaral pa namin pero (We are still studying but) we’re not extending as of now the biomass [feed-in tariff]. But we may devise a mechanism on how we will be able to accommodate ‘yung lumagpas (those that go beyond that deadline).”

House backs relaxation of bank secrecy

LIFTING of bank secrecy restrictions, as pushed by the Finance department and the central bank, will find ready support anew in the House of Representatives, the chairman of the chamber’s Ways and Means committee said in a mobile phone message last weekend.

The move had been pushed as part of a general tax amnesty program, but that amnesty law was approved by the past 17th Congress and enacted sans that provision, which was supposed to help taxmen verify asset declarations of those applying for amnesty.

“I support it… The House has been passing that measure but it gets deleted in the Senate,” Albay 2ND District Rep. José María Clemente “Joey” S. Salceda said.

“It will allow the BIR (Bureau of Internal Revenue) to look into the bank accounts of taxpayers where it has probable cause to allege tax evasion.”

Senators did not respond to requests for comment as of Sunday afternoon.

For Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno, the measure “is a very important way to fix tax evasion so I’m advocating that.”

“It will elevate our status as far as anti-money laundering is concerned if we can have that passed… hopefully within the year or first quarter of next year. That is a major reform that has been talked about for the past three decades so sana matapos (hopefully this will be enacted),” Mr. Diokno told reporters last Friday.

Finance Secretary Carlos G. Dominguez III said he is “determined” to see the measure passed within this Congress as it is “absolutely necessary for proper tax administration.”

“We’re not looking to pressure Congress. We’re just asking Congress, please give us the tools so that our tax authorities and other authorities can do their job…” — Beatrice M. Laforga

Who will be the next Entrepreneur Of The Year Philippines?

The Entrepreneur Of The Year Philippines 2019 has concluded its search for the country’s most successful and inspiring entrepreneurs. Entrepreneur Of The Year Philippines is a program of the SGV Foundation, Inc. with the participation of co-presenters Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. In the next few weeks, BusinessWorld will feature each of the finalists for the Entrepreneur Of The Year Philippines 2019.

THE SEARCH for the Entrepreneur Of The Year Philippines 2019 concludes tomorrow night with a much-anticipated awards gala at the Makati Shangri-La Hotel.

This year’s search has identified 15 outstanding entrepreneurs from diverse industries throughout the country.

The Entrepreneur of the Year Philippines 2019 program recognizes outstanding Filipino entrepreneurs who work with relentless determination and purpose. They are individuals who thrive in the age of disruption and lead enterprises that can inspire and empower communities and uplift the nation. They are unstoppable.

Alexander Cruz built his first mall in Angono, Rizal in 2002. He grew his business by applying sound business strategies, such as selecting complementing tenants to create full ecosystems that support the business of his developments, from supporting tenants to ensuring foot traffic to creating convenience for visitors. Today, the chairman and chief executive officer (CEO) of XRC Mall Developer, Inc. has built 28 community malls, six hotels, and developed five public markets with the goal of bringing growth to the countryside.

Beverly M. Dayanan was born to an impoverished family in Davao. Despite her family’s economic difficulties, she was able to finish college and become a bank manager. She discovered her passion for property development after she helped a friend improve his real estate business. Sensing the demand for high-quality and affordable houses, she established Contempo Property Holdings, Inc. (CPHI). After completing her flagship project in Mandaue City, CPHI is now developing other projects in key cities in Visayas and Mindanao. She has also expanded her business to include socialized housing projects.

Miguel Garcia always aspired to create his own brand. In 1997, his started his own company, Diversified Technology Solutions International, Inc. (DTSI). DTSI has now become a leading enabler of facilities and IT solutions for enterprises, business process outsourcing (BPO) and shared services clients. DTSI designs, builds and manages facilities and enables clients with the best in class technology solutions. In 2010, to further globalize DTSI, he forged a partnership with Nippon Telegraph & Telegraph (NTT) of Japan, a Global Fortune 100 company. As part of the NTT Group, DTSI is able to create a wide portfolio of technology-based products, solutions, and services for digital disruptors.

Esther Wileen Go had a vision of enhancing the quality of healthcare through technology and automation. Leveraging her love for technology and her experience in healthcare operations, she took over her father’s small technology company which provided automated health coverage eligibility verification services. Through a series of strategic innovations, she transformed the company in into an industry leading, award-winning healthtech provider that also provides data mining and machine learning solutions.

Alvin Hing and Paul Holaysan were brought together by their shared vision of improving food security in the country through advanced and sustainable pig farming practices to enhance livestock quality for breeding and consumption. Together, they founded Excelsior Farms, Inc. (EFI) in 2014. By investing in top-of-the-line equipment and software for EFI’s farm facility located in Cebu and offering free education on best practices to stakeholders, students and fellow farmers through their SWINEovation learning center, EFI aims to modernize the swine industry.

Henry Lim Bon Liong developed the first high-yield hybrid rice seed variety suited for the tropics, in line with his vision of transforming the Philippines into a rice self-sufficient nation. He established one of the country’s leading hybrid rice companies, SL Agritech Corp. (SLAC), in 2001, and has since empowered countless farmers by educating them on advanced agricultural methods that has led to increased yields and better rice quality. At present, SLAC’s commercialized hybrid rice seeds and rice products are being distributed locally and exported to countries in Asia, North America, and the Middle East.

Olivia Limpe-Aw faced numerous challenges when she took over her father’s company, Destileria Limtuaco & Co. Inc. (DLCI). But she rebuilt by expanding their exporting capabilities, bolstering the quality of their products, and improving labor-management relations. She continues to develop DLCI by establishing her own brands and ventures. Through hard work and determination, she has successfully sustained and developed her family’s legacy in the liquor business.

Jose P. Magsaysay, Jr. started Potato Corner with his partners in 1992 to make money on the side. By experimenting with a franchising business model and making business owning accessible, they have grown to over 1,000 kiosks, including 200 outlets in 11 countries. Today, they are diversifying their brand lineup by launching brands that sell food items that cater to different markets. Under his guidance and leadership, Potato Corner has become one of the leading brands in the food industry.

Sindulfo “Etchin” Sumagang persevered in growing his family’s small customs brokerage company, Oneworld Alliance Logistics Corp. (OALC), into one of the country’s preferred logistics firms. OALC takes pride in exceeding industry standards by providing enhanced service speed, completing in only two days what other companies need more than five days to accomplish. By focusing on winning clients from specific niches, OALC has become one of the top five custom brokerage companies in Manila, as well as one of the selected firms trusted by the Bureau of Customs with sensitive shipments.

Regan Sy believes that in the steel-trading business, trust is vital. He has embedded this value in his company, Regan Industrial Sales, Inc. (RISI), a market leading steel products importer. Guided by his values of honesty and transparency, RISI is committed to providing their clients with clear choices of steel quality and country of origin, in accordance with their specifications and budget. Over the years, RISI has leveraged on international partnerships with reputable mills in Japan, Korea, Taiwan, Thailand, China U.A.E. and other origins, to provide innovative products and services to Filipino consumers.

Necisto U. Sytengco took over his father’s insurance company when he was just 16 years old. After college, he opened Sytengco Merchandising, a single proprietorship that initially focused on distributing electronic spare parts and later transitioned to the importation and trade of chemicals. The company’s portfolio today features over 3,000 products that serve various industries. Leveraging on his penchant for calculated risk-taking, he has grown SBS from a humble trading firm to one of the leading chemical distributors in the country.

Aivee Aguilar Teo is a dermatologist on a mission to build confidence and change the lives of Filipinos through her holistic approach to beauty and wellness. In her quest to revolutionize aesthetic medicine in the country, she established The A – Institute in 2017 to address all the medical and cosmetic needs of her patients, from dermatology to sleep medicine, sports medicine and nutrition. Her clinic offers a wide array of services, including painless, non-invasive procedures, physician-assisted robotic transplants and plastic surgery.

Rolandrei Viktor E. Varona dreamt of becoming a chef and run his own restaurant since he was a boy. He spent his young adult life saving up capital for his future business – fueling his determination with his dream. He remained undeterred even after failing his first business and made a huge comeback with Zark’s Burger in 2009. Zark’s Burgers quickly became the standard for affordable quality burgers and a go-to restaurant for the Filipino youth. In just 10 years, Zark’s Burgers grew from a humble 16-seater space to a franchise powerhouse boasting 60 branches nationwide.

Benjamin Yao was determined to help the country’s steel industry catch up with the rest of the world. He partnered with National Steel of Singapore and soon after, he built the country’s first modern rebar mill in Bulacan. Seeing the opportunity to further scale up his operations, Mr. Yao decided to operate mills in Batangas, Cebu, Misamis Oriental and Davao. SteelAsia is currently the Philippines’ flagship steel firm and is among the largest rebar manufacturers in Asia. With presence across the archipelago, its annual production reaches over 2 million metric tons, serving over 2,000 customers, including the country’s biggest property development companies.

From among these 15 entrepreneurs, one winner will be named the Entrepreneur Of The Year Philippines 2019 and will represent the country at the World Entrepreneur Of The Year awards in Monte Carlo, Monaco in June 2020.

The SGV Foundation, Inc. established the Entrepreneur Of The Year program in the Philippines in 2003. The first winner of the Entrepreneur Of The Year Philippines was Jollibee Foods Corp. President and CEO Tony Tan Caktiong, who went on to win the 2004 World Entrepreneur Of The Year award in Monte Carlo, Monaco. Other past awardees include Socorro “Nanay Coring” Cancio-Ramos, founder and general manager of National Book Store; Lance Y. Gokongwei, president and CEO of Cebu Air, Inc.; Senen Bacani, Chairman and President of La Frutera, Inc.; Wilfred Steven Uytengsu, Jr., president and CEO of Alaska Milk Corp.; Ambassador Jesus P. Tambunting, chairman and president of Planters Development Bank; Tennyson Chen, president of Bounty Fresh Food, Inc; Erramon I. Aboitiz, President and CEO of Aboitiz Power Corp.; Jaime I. Ayala, founder and CEO, Hybrid Social Solutions Inc.; Ben Chan, chairman of Suyen Corp.; Nix Nolledo, chairman and CEO of Xurpas, Inc.; and Natividad Cheng, chairperson and CEO of Multiflex RNC Philippines, Inc.

The 2019 search for the Entrepreneur Of The Year Philippines is conducted with the participation of the Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange.

The official airline of the Entrepreneur of the Year Philippines 2019 is Philippine Airlines. Media sponsors are BusinessWorld and the ABS-CBN News Channel.

Banquet sponsors are Global Ferronickel Holdings, Inc., ICTSI, Jollibee, Robert Blancaflor & Groups, Inc., Manny O wines, Udenna Corporation, Universal Harvester and Uratex.

The winners of the Entrepreneur Of The Year Philippines 2019 will be announced on Oct. 15 in an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2020 in Monte Carlo, Monaco in June 2020.

The Entrepreneur Of The Year program is produced globally by professional service firm Ernst & Young (EY). The Entrepreneur Of The Year program was developed in the United States in 1986 by EY. Through the program, successful entrepreneurs can come forward and tell their inspiring stories to awaken the entrepreneurial spirit in others. In 2001, EY expanded the program and launched the World Entrepreneur Of The Year awards.

Liquidity and lending growth steady despite RRR cuts

Liquidity and lending growth steady despite RRR cuts

Rice duty referral to economic team seen as ‘waste of time’

A FARMERS’ association said it doubts that economic managers will greenlight a proposal to impose safeguard measures on imported rice and called a referral of the matter to them a “waste of time.”

“Tossing the issue to the EDC [Economic Development Managers] is an exercise in futility and a waste of time,” Federation of Free Farmers National Manager Raul Q. Montemayor said in a statement, noting that the economic managers are unlikely to look with favor upon the proposed safeguard measures as they themselves backed the liberalization of rice imports.

“They have repeatedly alluded to the suffering of farmers as mere ‘birth pains,’ and have argued that the benefit of the (Rice Tariffication) law to the consumers far outweighs the losses of farmers,” he added.

Agriculture Secretary William D. Dar announced on Friday that the department has terminated the process of studying the imposition of safeguard duties on imported rice. The matter will be discussed with the economic managers at an Oct. 24 meeting. He did not say why the investigation process was terminated.

“There seems to be no sense of urgency and no appreciation of the serious difficulties that rice farmers are facing at present because of the surge of cheap rice imports,” Mr. Montemayor said.

The Philippines started its safeguard duty investigation on Sept. 11, amid allegations that rice imports caused a plunge in farmgate prices of palay, or unmilled rice, following the implementation of the Rice Tariffication Law, which liberalized rice imports and imposed a tariff of 35% on Southeast Asian grain.

Mr. Dar said that rice imports on order from March to August amounted to 2.4 million metric tons (MMT). Of this, 1.6 MMT has entered the country.

According to the Philippine Statistics Authority (PSA), the farmgate price of palay fell 30.1% year-on-year in the third week of September, to P15.96 per kilogram.

Under Republic Act No. 8800 or the Safeguard Measures Act, government officials can make an initial determination that increased imports of a product have caused undue harm to domestic industry due to unfair foreign competition. The official has 30 days to make a decision from receipt of the petition for investigation.

“Delaying a decision defeats the purpose of the law, and may make the harm to farmers irreparable,” Mr. Montemayor said, and adding that such consultation should have been done earlier given the current state of the rice industry.

The group maintained that safeguard duties will not result in higher retail pries for rice as long as the Department of Trade and Industry (DTI) does its job of monitoring traders and retailers.

Asked to comment, Philippine Institute for Development Studies Research Fellow Roehlano M. Briones said he favors the termination of the investigation.

“I favor it… Allow the status quo on trade policy of RA 11203 (the Rice Tariffication Act). Safeguards will partially reverse gains on the consumer side,” he said in a text message, and adding that increasing tariff will only lead to higher prics for imported rice already in the country prior to its imposition since higher tariffs would discourage importers from bringing in more rice. — Vincent Mariel P. Galang

CTA cancels BIR’s tax deficiency claims against San Miguel Foods

THE COURT of Tax Appeals (CTA) has canceled the alleged tax deficiency of San Miguel Foods, Inc. for 2010 worth P959.89 million following the failure of the Bureau of Internal Revenue (BIR) to indicate the specific period for the settlement of the tax liabilities.

In a 15-page decision on Oct. 2, the court’s third division said there was no due date indicated in the demand letter for San Miguel Foods to pay its alleged tax deficiencies which is stated in previous Supreme Court decisions.

“Correspondingly, the subject tax assessments cannot be considered as valid, since the same do not contain a demand for payment within a prescribed period. Thus, the same bear no valid fruit,” the decision penned by Associate Justice Erlinda P. Uy read.

“Relative thereto, it must be emphasized that the issuance of a valid formal assessment is a substantive prerequisite for collection of taxes. In other words, tax collection should be premised on a valid assessment,” it added.

The formal letter of demand and details of discrepancies issued to the company lacked a fixed date for the payment. Assessment notices issued also showed the “due date” portion were left blank.

San Miguel Foods was assessed for an income tax deficiency of P880.4 million and deficency value-added tax of P79.5 million.

It filed the petition claiming the final assessment notice against the company for 2010 was received only on March 9, 2015 which is beyond the three-year prescribed period for tax assessment and the waivers executed for extension of assessment were also not valid.

If the waivers are valid, the corporation said the right of the bureau to assess the alleged tax liabilities has partially prescribed for the first and second quarter.

The BIR on the other hand claimed that the waivers were valid and binding and the corporation failed to comply with Section 52(c) of the Tax Code or the return of corporation contemplating dissolution or reorganization, “thus, respondent cannot in any case determine whether the claimed Net Operating Loss Carry Over and input tax credit are within the limits prescribed by law.”

The court, however, said the contention of the San Miguel Foods on the waivers are invalid because “it has undisputedly ‘voluntarily settled the deficiency taxes on the other issues.’”

“In view of the invalidity of the subject tax assessments, the latter must already be struck down. Such being the case, it becomes unnecessary to address the remaining arguments raised by the parties,” it ruled.

Associate justices Ma. Belen M. Ringpis-Liban and Maria Rowena Modesto-San Pedro concurred with the decision. — Vann Marlo M. Villegas

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