Facebook Instagram Linkedin X Youtube
Home Blog Page 9036

Consumer giants push suppliers to rescue seafarers

UNILEVER PLC and Procter & Gamble Co. are among consumer companies urging world leaders to resolve the plight of more than 300,000 seafarers stuck on commercial vessels, where forced labor and deteriorating working conditions threaten to disrupt the global supply chain.

Chief executives of household consumer brands, from retailer Carrefour SA to food manufacturer Mondelez International, Inc. and beverage maker Heineken NV, have signed an open letter calling for measures to allow more crew changes at ports, ensure the safety of overworked seafarers and make sure supply chains don’t use forced labor.

The letter, which was sent to United Nations Secretary-General Antonio Guterres Wednesday before a General Assembly web conference on seafarers, is the latest call to address a growing humanitarian crisis at sea brought about by the coronavirus disease 2019 (COVID-19) pandemic as cautious governments restrict access to borders and air travel remains curbed. An earlier Bloomberg investigation found numerous violations of international maritime law designed to protect seafarers, including wage and labor problems highlighted by interviews with more than 40 crew members globally.

“We are coming to a tipping point if we don’t resolve the issue of crew changes,” Marc Engel, chief supply chain officer at Unilever, which spearheaded the letter, said in an interview. “There’s a huge risk that the global supply chain will start failing. It’s an inadvertent situation of forced labor because these seafarers are stuck on these ships. It’s a human rights issue.”

The call to action by more than two dozen CEOs — members of the powerful Consumer Goods Forum that represents 400 of the biggest consumer retailers, manufacturers and service providers — is one of the strongest appeals by business titans to draw attention to the seafarer crisis.

More than eight months since the pandemic unfolded, the backlog of crew swaps threatens to get worse. More than 120 countries or territories have stopped or limited access for ships to conduct seafarer changes in a bid to prevent the spread of the novel coronavirus that’s killed almost 1 million across the globe.

“This has led to a major disruption of global supply chains, which are vital to manufacturers and retailers and their ability to produce and offer essential consumer goods, including food and hygiene products,” the CEOs said in the letter. — Bloomberg

PLDT warns of slower internet during maintenance on submarine cables

PLDT Inc. on Thursday warned customers that they might experience slower internet speeds from Sept. 26 to 30 due to maintenance activities on submarine cables.

The “emergency” maintenance activities will be conducted on the Asia-America Gateway (AAG) submarine cables in the waters of Hong Kong, the mobile operator said in an e-mailed statement.

The telco giant said connectivity will continue during the maintenance period, as it has alternative cable systems.

“PLDT has been investing substantially in expanding and boosting the capacity of existing and new international submarine cable systems, such as the Jupiter Cable and the Asia Direct Cable systems, to provide redundancy to ensure continuous service in situations like this. Such investments are vital because bulk of internet content used by Filipinos comes from overseas,” the company said.

It said measures like “traffic rerouting” and “local catching” have been put in place to minimize the impact of the maintenance activities on its services.

“Should there be internet traffic spike beyond the traffic of the past weeks, some slowing down in the busiest hours for traffic going to Asia may be experienced, but no service will be denied and internet traffic within the Philippines and to the US will not be impacted,” PLDT added.

Globe Telecom, Inc. issued its own advisory, assuring customers that the emergency maintenance activities that will be performed on the AAG  submarine cables will not affect its services.

Globe said it continues to carry out network upgrades to improve its services.

“All the network upgrades are expected to be completed by 2021,” it said in a statement.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

Hollywood’s venerable trade publications unite in joint venture

HOLLYWOOD’s longtime trade-publication rivals are uniting under one roof.

Penske Media Corp., which owns Variety and Rolling Stone, will run the Hollywood Reporter, Billboard, and Vibe in a joint venture with their owner, MRC, Variety reported Wednesday.

Under the deal, whose terms weren’t disclosed, Penske and MRC will establish an entity called PMRC through which Penske will handle the daily operations of the entertainment and music brands. In another PMRC joint venture, MRC will use its production assets, including Dick Clark Productions, to develop new content based on PMRC stories and properties.

Variety and the Hollywood Reporter have faced off covering the entertainment business for decades. Variety got its start in New York in 1905 and launched a daily West Coast edition in 1933, which won fame for headlines like “Sticks Nix Hick Pix.” The Hollywood Reporter was founded in 1930. Both publications are now weekly magazines in print and operate extensively online.

Penske’s holdings that aren’t part of the new joint ventures include Deadline, WWD, She Media, Sportico and Robb Report. MRC, formerly known as Valence Media, bought Nielsen Holdings Plc’s music-data operations last year and produces films such as Knives Out.

Outside the PMRC ventures, Penske and MRC will operate separately, according to Variety. — Bloomberg

Local banks struggle in deploying AI — McKinsey

PHILIPPINE banks should develop a clear strategy for the use of artificial intelligence (AI) and build digital and data technologies faster, a global business analyst said.

McKinsey & Co. said banking in the future will be dominated by “AI-first banks” that can collect relevant customer data, analyze them faster, design products targeted to certain customer segments, and launch their products faster.

Its report shows 20-50% more consumers around the world will shift to online and mobile banking, while nearly 60% of global financial institutions have integrated one AI tool in their systems.

McKinsey added the use of AI will increase by 25% each year.

However, McKinsey said Philippine banks still struggle in deploying AI quickly across their operation channels for two reasons.

First, they lack a clear strategy for adopting AI. McKinsey said banks should specify the uses of the technology in their business units.

“They need to translate the general excitement that management teams have about the potential for AI into an actual, enterprise-wide AI strategy,” Kristine Romano, McKinsey’s managing partner in Manila, said in an e-mail.

Second, many local banks operate with outdated technologies. McKinsey said this slows their product development and launch.

“Many Philippine banks run on weak underlying technologies that limit how quickly banks can innovate and bring new products and services to market,” McKinsey Associate Partner Shwaitang Singh said in an e-mail.

To improve their services, analysts said Philippine banks should engage all units in crafting an AI-centered strategy.

“Business and technology teams at many Philippine banks still work in siloes. They should collaborate more closely to translate business requirements into effective technology tools that benefit the bank and its customers,” Ms. Romano said.

McKinsey also said local banks should invest more in technology focusing on data to raise more profit while they deliver convenient services.

“Processes within the banks are still largely manually driven. While there is an abundance of data, the fact that it is not digitized means it’s not easy to analyze and get useful business information from,” Mr. Singh said.

The analysts said the AI shift also requires the development of a universal digital ID system, external infrastructures and credit bureaus.

The government is fast-tracking the establishment of a national ID system that uses QR codes containing the personal and government data of an individual. It is set to be operational by 2022 and complies with the Philippine Identification System Act.

The government also set aside P2.4 billion in the 2021 budget proposal for internet connection nationwide.

Meanwhile, state-run Credit Information Corp. continues to partner with banks to provide an online database for over 18.2 million borrowers. — Kathryn Kristina T. Jose

Merit pay increase for workers during the pandemic

We are a small food manufacturer with about 180 directly-hired workers. Top management has requested our human resource (HR) department to study the possibility of giving pay increases to our workers who performed well during the pandemic. Many of our workers have continued to report for work despite the lack of public transport by using motorcycles or bicycles. Due to our workers’ dedication, our factory has managed to achieve our sales target despite COVID-19. We’d like to return the favor by giving material rewards to those who deserve it. Could you give me some idea how to make this happen? — Sun Flower.

First things first. I would like to commend your management for thinking of employee rewards even during the crisis while many organizations are closing, if not downsizing. It’s not every day we get to encounter management that is trying to save jobs and giving out reasonable rewards to dedicated, hard-working employees.

Mark Twain once said: “When I read the Bible, the parts that trouble me the most are not the ones I don’t understand, but the ones I do understand.” A similar misunderstanding could happen to you if you implement employee rewards without serious thinking of long-term implications for your organization. If you’re not careful, you may find yourself on the losing end.

The question on top of my mind is this: Are you sure you can maintain paying merit increases this year and in the years to come? If not, then read on.

BASIC CONSIDERATIONS
You need to be careful not to commit to something no matter what your good intentions are. Of course, you want your workers to be dedicated and hard-working. Let’s explore some basic considerations for planning, designing, and implementing a merit pay increase:

One, establish a clearly-worded policy on performance appraisals. Without this, it would be difficult for your line supervisors and managers to evaluate the work of each and every employee. If you have a policy, ensure that it’s understood by all workers. If necessary, notify everyone of the policy in Taglish and make the process as objective as possible to prevent line executives from giving average ratings to avoid becoming unpopular with the workers.

Two, give merit pay to those with above-average ratings. In other words, recognize only those people who have exceeded management expectations. This means focusing only on the actual results of each individual worker rather than giving attention to the number of hours they spent in the workplace. If you would like to reward people who brave the hassles of daily commuting and the fear of infection, the best approach is to give them hazard pay, which you can always withdraw anytime or as soon as the pandemic is over.

Three, allot a reasonable budget for merit pay that matches inflation. Aside from the inflation rate, the best approach to determine the budget is to align your salary structure with your industry. If your business is too small and can’t compete on this score with the big guns of the industry, the other option is to meet the trends in your community or geographical location. If your factory is in an export processing zone, ensure that your employee reward structure aligns with the standards within such a location.

Last, emphasize that the merit pay increase is contingent on profitable results. This is an important stipulation when you issue a policy on employee rewards and recognition. Without this, employees may harbor false expectations. Avoid giving any firm commitments. If future circumstances do not allow you to fulfill your promises, you may end up with demotivated and unhappy workers. It could also land your management in legal trouble later on.

ACTUAL RESULTS, NOT HOURS
For some people managers, it’s not always easy to make a distinction between actual performance and perfect attendance. There are managers out there with low performance standards that put a premium on workers who report for work daily and on time, regardless of their performance. This is apparent in your context when your top management wants to recognize workers for finding ways to report for work in the absence of public transportation.

Let me emphasize this: A perfect attendance award is a lousy employee recognition program. It makes clock watchers believe they have done a good job. Of course, we all want deserving workers to be properly rewarded. It’s one basic approach to motivating people. However, let’s understand that a merit pay increase is totally different from hazard pay as I’ve explained above. Don’t confuse the two.

Whatever the gap is between your current policy and the realities on the ground — and that includes your top management’s inclination to reward people who are confronting the daily hassles of commuting — there’s much you can do to promote a merit-based system. rather than merely recognizing people who mechanically report daily.

This requires honest and open communication between management and their employees.

 

Send anonymous questions to elbonomics@gmail.com or via https://reyelbo.consulting

AirAsia hopes digital business will help airline’s recovery

AirAsia Group Berhad is banking on the digital business to help its airline operations recover from the impact of the coronavirus pandemic.

In a briefing on Thursday, AirAsia Group Executive Chairman Datuk Kamarudin Meranun said the airline group expects its digital segment to become “another core business.”

AirAsia Group Chief Executive Officer Anthony Francis “Tony” Fernandes said they are already “making money” from their digital offerings.

“I think our destination will still be in (airline) operations. The frequency may not be as great initially. We don’t know what the post-COVID world is going to look like, but if you look at domestic, that’s a great snapshot. We are launching a new route next week. Not many airlines are launching new routes,” he explained.

He also noted that business, intercontinental, or  first-class travel may take longer to recover.

The group formally introduced its new app, AirAsia Digital, on Thursday.

“AirAsia Digital leverages the Group’s physical and digital assets to create an ecosystem of businesses that connect with our customers in their everyday life, transforming the AirAsia brand into a fully fledged digital company — now much more than just an airline,” it said in a statement.

The app is intended to develop, incubate, and accelerate companies “that have the potential to maximize revenue or generate new revenue streams sustainably, better manage costs through increased efficiencies and productivity, or enhance the customers’ experience.” — Arjay L. Balinbin

AboitizPower wins Stevie Award for COVID-19 response

AboitizPower bagged a Silver Stevie award for its Integrated Response and Awareness towards COVID-19 Hazards (I-REACH) program in the Most Valuable Corporate Response category in this year’s International Business Awards.

The International Business Awards are the world’s premier business awards program. All individuals and organizations worldwide – public and private, for-profit and nonprofit, large and small – are eligible to submit nominations.

The 2020 IBAs received entries from organizations in 63 nations and territories. Stevie Award winners were determined by the average scores of more than 250 executives worldwide who participated in the judging process from July through early September.

The I-REACH campaign is a testament to the commitment of the company to its stakeholders in time of the pandemic. The program’s objective was to provide support for customers, especially for critical institutions such as hospitals and other healthcare facilities.

A key component of the I-REACH campaign is AboitizPower’s collaboration with its partner hospitals in Luzon and Visayas to provide healthcare heroes with surgical masks, as well as sanitation and food supplies, in support of their fight against COVID-19.

It also covers a series of webinars to engage customers and keep them informed of the impact of COVID-19, especially on their business operations. The webinar topics focus on business continuity and recovery practices, COVID-19 as an accelerator of digital transformation, and the government’s  economic outlook and initiatives to support key industries, among others.

Through the campaign, AboitizPower is able to support its customers in their transition to the new normal. With the timely information drive oriented towards key customer concerns such as sanitation and virus prevention, work-from-home best practices, online employee training, and government advisories, customers are equipped to maneuver their way through the challenges brought about by the pandemic.

“We are grateful that our customer efforts have been recognized by the International Business Awards. The real victory here is seeing our partners rise toward recovery. This accolade reminds us that we are on the right track and inspires us to do even better for our partners,” said AboitizPower Head of Commercial Operations Juan Alejandro Aboitiz.

For this campaign, AboitizPower partnered with hospitals such as the PNP General Hospital, Perpetual Help in Binan and Las Pinas, Mary Mediatrix in Batangas, Chong Hua Hospital in Cebu, and Riverside Medical Center in Bacolod. The company is also looking to conduct a roundtable discussion with key representatives from the retail segment in the next run of the webinar series entitled: “The Next Normal: Harnessing insights from customer experiences and challenges to sustain the future of work.”

The I-REACH campaign is one of the many COVID-19 response initiatives of AboitizPower for its various stakeholders. The company, despite the challenging times, endeavors to fulfil the Aboitiz Group’s promise of Advancing Business and Communities.

 

Stuff to Do (09/25/20)

CCP presents a virtual jazz festival

THE CULTURAL Center of the Philippines (CCP) presents a music festival featuring Filipino jazz talents which will be streamed live online via the Facebook pages of the CCP and the CCP Office of the President on Sept. 25-27 and Oct. 2-4, at 7:30 pm. JAZZ STAY AT HOME: Virtual Jazz Festival 2020 is free to the public, and will feature Nicole Asensio, Baihana, Tots Tolentino, Michael Guevarra, Simon Tan Trio, Pipo Cifra, Lorna Cifra, and other notable names in the Philippine jazz scene. It will be hosted by musician and CCP Trustee Stanley Seludo.

Avon Femme-Powerment Fashion Show

TO CELEBRATE women of all breast shapes and sizes, Avon Intimate Apparel will be holding a Femme-Powerment Fashion Show featuring real women with real bodies. The fashion show will also have Julie Ann San Jose providing femme-powering tunes as the models walk the runway. Wave 89.1 DJ Debbie Then will be hosting the event, and joining the fashion show are model, content creator, and entrepreneur Chelsea Robato, TV and sports reporter Roxanne Montealegre, and TV and event host Patricia Reyes. The fashion show will be held on Sept. 26, 2 p.m., on AVON PH’s Facebook Page.

Enchanted Kingdom holds a virtual party

ENCHANTED Kingdom’s mascot Eldar The Wizard is celebrating his birthday, so the theme park is marking the occasion with a virtual Eldar’s Magical Birthday Celebration on Sept. 26, 6-7 p.m., on Pinoy Box Office Channel (PBO), and Enchanted Kingdom’s official Facebook (www.facebook.com/enchantedkingdom.ph ) and YouTube (www.youtube.com/user/EKMagicVideos ) accounts. It will be an hour of fun, learning, and special performances from Eldar, Princess Victoria, Princess Madeline, and the EK characters, plus a special segment with Jose Mari Chan featuring his newest Christmas ballads. For more information, visit Enchanted Kingdom’s official website (www.enchantedkingdom.ph) and Facebook page.

Gaya Sa Pelikula premiers on YouTube

GLOBE Studios — whose roster of  award-winning films includes Birdshot, Goyo, Hintayan ng Langit, LSS and Dead Kids — presents its first ever narrative digital series, Gaya sa Pelikula (Like in The Movies). Written and created by Juan Miguel Severo and directed by JP Habac, the romantic comedy follows Karl, an introverted 19-year-old architecture student in the middle of an identity crisis and Vlad, a schoolmate on the run from his own family. As their lives become entwined by fate, they become housemates and come to learn more about each other and about themselves than they could have ever imagined. Gaya sa Pelikula is an eight-part series of 20-minute episodes that is a prequel to the unproduced teleplays on Wattpad by Severro. It will premiere on Globe Studios’ official YouTube channel starting Sept. 25. New episodes will drop every Friday at 8 p.m., from Sept. 25 to Nov. 13. Gaya sa Pelikula was also chosen to be part of YouTube’s Super Stream content line-up. Super Stream is an effort of YouTube to enable Filipino viewers to access partners’ content such as movies, TV shows and more for free for a limited time.

PETA Young Artists Playlab

AS PART of the ongoing Philippine Educational Theater Association’s (PETA) Festival of Windows, Young Artists’ Playlab will be having its first performance on Sept. 26, Paaralang Buhay, Paaralan ng Buhay, a collaborative poetry dance short film jointly undertaken by the students and teacher of the Special Program for the Arts of Tabaco National High School in Tabaco, Albay with special support by the Infanta National High School under the creative guidance of PETA Artist-Teacher-Members. The show will be streamed via the PETA Facebook page.

BGC Art Mart Online

BONIFACIO Global City (BGC) is holding its first online Art Mart on Sept. 27, 2 to 5 p.m., via the BGC Arts Center Facebook page. Watch the stream to discover and reconnect with local artists, shop for art, enjoy performances, and find inspiration for your own creativity while safe at home. Some of the artists featured in the mart are GloriAnne Rose Dairo and Fabnglam by Flor. Register at the Facebook event page.

Philippine Readers and Writers Festival goes online

THE PHILIPPINE Readers and Writers Festival, an annual event held by National Book Store together with Raffles Makati, returns for its 7th year from Sept. 28 to Oct. 4. Because of the ongoing coronavirus disease 2019 (COVID-19) pandemic, the week-long festival moves online. It will feature a series of author interviews, talks, and panel discussions with top Filipino artists and authors — all streaming for free on the NBS Facebook Page (fb.com/nbsalert) and with selected sessions simulcast on Shopee and Lazada. Books featured during the Festival can be purchased at NBS branches and online on www.nationalbookstore.com and its official stores on Shopee and Lazada. Special discounts will be available online from Sept. 25 until Oct. 4, with up to 20% off on all imported titles and 10% off on all local titles. Learn about the value of history in quarantine with author and historian Ambeth R. Ocampo. Enjoy live poetry reading by Jerico Silvers and learn about poetry’s function as social commentary from Lourd de Veyra. Join book discussions with a variety of authors including Ayris Alcachupas, Kaye Allen, and Jason Paul Laxamana. There will be discussions on a plethora of topics, including an exploration of stories in the time of COVID-19 to the behind-the-scenes of making a children’s book.  Bliss Books authors will share tips for writing during the new normal and there will be a panel discussion on teaching values through picture books. Sign up for updates by visiting bit.ly/prwf2020signup and get a chance to win a set of books. One can also join the raffle promo when shopping online. Five winners will receive a dining certificate for two at Raffles Makati. Learn more by visiting www.readersandwritersfestival.com and following National Book Store on social media — @nationalbookstore on Instagram and @nbsalert on Facebook, Twitter, and YouTube.

Singapore Writers Festival

THE 23rd edition of the Singapore Writers Festival is migrating online from Oct. 30 to  Nov. 8, with a diverse line-up of programs inspired by the theme of “Intimacy” and will be presented in a digital format for the first time. Organized  by the National Arts Council, the multilingual literary festival celebrates thoughtful discussion, a love for stories, and encourages intercultural dialogue by bringing together writers, thinkers, and participants from Singapore and overseas. Digital festival passes are available at S$20 from Sept. 21 via SISTIC Live, and will include full access to all programs by international speakers for the first time. For more information, visit the festival website https://www.singaporewritersfestival.com/

CCP screens Martial Law films

THE CULTURAL Center of the Philippines (CCP) revives its cinema program by screening select films revisiting one of the most tumultuous periods in Filipino history. Starting Sept. 25, 3 p.m., Martial Law films such as Edjop (1987), ML (2018), Sigwa (2010), and Beyond the Walls of Prison (1987) can be viewed via the CCP’s Vimeo channel. The films will be available for free for 48 hours. For more information call the CCP Film, Broadcast, and New Media Division at 8832-1125 local 1705 and 1712 or visit the CCP Facebook account and website.

Credit access in the pandemic

The Bayanihan to Recover as One Act set aside an allocation of P55 billion to provide low interest loans to sectors severely affected by the coronavirus pandemic. Of this amount, P18.4725 billion is for the Land Bank of the Philippines, P10 billion for Small Business Corp. (P4 billion for MSMEs, cooperatives, hospitals and overseas Filipino workers and P6 billion for tourism); P6 billion for the Development Bank of the Philippines; and P5 billion for the Philippine Guarantee Corp. The remaining P15.5275 billion is a standby fund to be infused into Landbank and DBP as additional capital.

While this appears to be good news, please note that only around P40 billion is intended for the lending program. As I have written in another column, is this amount sufficient given the very bad state of the economy with most small businesses at standstill? Likewise, is the delivery and distribution system solely through the government financial institutions (GFIs) operationally efficient.

SME lending is primarily a distribution problem. Constraints like transaction costs, fixed costs in intermediation, economies of scale, distance and regulatory hurdles are aplenty. A large part of funds flow is handled by intermediaries, which is dominated by private financial institutions. It is important to use existing distribution channels that are close to the customers in order to efficiently reach out.

When the US Congress passed its Coronavirus Aid, Relief and Security Act (CARES), it opened several windows for small business and eligible non-profit organizations, veterans’ organizations, tribal businesses and individuals who are self-employed and independent contractors. It had an allocation of $670 billion for the Paycheck Protection Program. But what stands out is that the Small Business Administration (SBA), mandated to implement the program, will delegate authority to SBA-certified lenders to process application. In addition, federally insured depository institutions and credit unions as well as farm credit system institutions will be available to apply as approved lenders for the program.

In other words, the SBA expands its reach by accrediting the private sector financial institutions who have excess liquidity available for loans. Funds that have been allocated by Congress will multiply because of the leverage effects and should reach beleaguered businesses in a timely manner.

The SBA-certified lenders will be given delegated authority to speedily process loans. The SBA guarantees 100% of the outstanding balance, and that guarantee is backed by the full faith and credit of the United States.

In addition, the SBA waives all guaranty fees, including the upfront and annual servicing fees. Lenders do not collect fees from applicants. SBA will pay lenders fees for processing loans in graduated levels: five percent for loans not more than $350,000 and less than $2,000,000; and one percent for loans of at least $2,000,000. This is an interest subsidy and it is higher for smaller chunks.

This is not to discredit the government financial institutions. By way of disclosure, this writer has actively worked in a few of these institutions and yes, they have dedicated people who are mission- and developmental-driven. My concern is that the carrying capacity for direct loans, especially to the core small businesses, might be compromised. The risk rules from the regulatory perspective remain unchanged. And a direct lending program is limited to the allocated amount.

Another concern about the GFIs is that they are supervised just like any other institution and there may be constraints in terms of breaching certain limits on past due, loan defaults, capital adequacy, etc. In other jurisdictions, government policy banks are subjected to more benign regulatory standards that appreciate their development mandate. We are in pandemic crisis mode and the development thrust of our GFIs must be reinforced. In the case of the top two government banks, there is an unwritten pressure of competing as part of the top banks of the country and this means closely marking the metrics of the regular banking system.

Most economies have given outright subsidies to help their small businesses. South Korea, for example, has allocated 3.2 trillion won for 2.9 million eligible small businesses or self-employed people. They will receive 2 million won each in cash payments. Japan provides cash grants of up to Y2 million for companies seeing declines of 50% or more in year-on-year monthly revenue. Sole proprietors, including freelancers, will also be eligible for a maximum of Y1 million in subsidies.

We cannot afford direct subsidies on this scale as a country. But we can expand the reach of our limited funds by multiplying it through loan guarantees. Our Asian neighbors have tested credit guarantees as it helped stove off bankruptcies during episodes of financial crisis and calamities in the past. Credit guarantees will tap the resources that may be idle in private financial institutions. It is a catalyst. Enterprises that are not able to borrow without the guarantee system are made bankable. And for the financier, the risk weight should lower because of the guarantee coverage.

This is the right time to explore a more aggressive guarantee program that takes on calculated risks and that taps into the strength of the financial system, our private institutions. The problem with past guarantee initiatives in the country is the unwillingness of policy and regulation to absorb losses. Guarantee programs are second best economic solutions that skirt direct subsidy, and its success must be measured by the economic activity generated, the jobs saved and lives supported. The program must be willing to absorb risks.

 

Benel D. Lagua was executive vice-president and chief development officer at the Development Bank of the Philippines. He is an active FINEX member and an advocate of risk-based lending for SMEs. The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX.

How PSEi member stocks performed — September 24, 2020

Here’s a quick glance at how PSEi stocks fared on Thursday, September 24, 2020.

PSEi dips over fears of choppy US recovery

LOCAL SHARES declined on Thursday to mirror the drop in Wall Street the night before as investors worried over a possible choppy economic recovery in the United States.

The benchmark Philippine Stock Exchange index (PSEi) gave up 46.92 points or 0.79% to close at 5,845.80. The broader all shares index let go of 23.19 points or 0.65% to end at 3,521.95.

“Local shares retreated… as market participants struggled to shake off worries about a lack of a coronavirus aid package and rising coronavirus disease 2019 (COVID-19) cases,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

Reuters quoted US Federal Reserve Vice Chair Richard Clarida as saying the US economy remains in a “deep hole” of joblessness and weak demand, and called for more fiscal stimulus, noting that policymakers “are not even going to begin thinking” about raising interest rates until inflation hits 2%.

Cleveland Federal Reserve Bank President Loretta Mester echoed Mr. Clarida, saying that the US remains in a “deep hole, regardless of the comeback we’ve seen.”

The COVID-19 outbreak in the US remained the worst around the world on Thursday, reaching 6.93 million cases with 201,909 deaths, based on data from Johns Hopkins University.

Statements from Fed officials spooked investors, pushing US markets lower on Wednesday: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices fell 1.92%, 2.37% and 3.02%, respectively.

This negative sentiment spilled over to Asian markets on Thursday.

MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 1.93% in the afternoon session on broad losses across the region, putting it on track for its biggest daily drop since July 16, Reuters reported.

Rising tensions between North and South Korea influenced market trading, Philstocks Financial, Inc. Research Associate Claire T. Alviar said.

“Negative sentiments abroad continued to be watched by investors since there is a lack of catalysts at home,” Ms. Alviar said in a text message.

Most sectoral indices at the PSE ended Thursday’s session with losses. Mining and oil erased 130.56 points or 2.19% to 5,813.98; holding firms lost 104.02 points or 1.68% to 6,054.32; property slid 27.18 points or 0.99% to 2,706.63; and financials trimmed 3.95 points or 0.34% to 1,138.53.

On the other hand, services increased 9.97 points or 0.68% to 1,456.69, and industrials added 21.27 points or 0.27% to 7,893.72 at the close of trading.

Value turnover on Thursday stood at P4.05 billion with 1.07 billion issues switching hands, slightly lower from the previous day’s P4.45 billion with 1.47 billion issues.

Decliners outnumbered advancers, 120 against 76. Some 31 names ended unchanged.

Net foreign outflows jumped to P292.84 million from P95.86 million the previous day. — Denise A. Valdez with Reuters

Peso weakens as stock investors take profit

THE peso further weakened on Thursday as investors took profit in US stocks amid the rising number of cases of coronavirus disease 2019 (COVID-19) abroad.

The local currency closed at P48.56 versus the dollar on Thursday, up by nine centavos from P48.47 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session at P48.60 per dollar. It reached a peak at P48.51 during the session, while its weakest showing was at P48.61.

Dollars traded amounted to $585.15 million on Thursday from $580.05 million the previous day.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso was weaker amid increasing cases of COVID-19 in the US.

“The peso closed weaker for the third straight day amid the latest sell-off in the US stock markets that led to some demand for the US dollar as a safe haven, largely due to concerns that the spike in COVID-19 cases could lead to risk of new lockdowns,” Mr. Ricafort said in a text message.

The US Centers for Disease and Control Prevention reported COVID-19 cases have climbed to over 6 million across the states.

The US stock indices continued its decline in over a month. On Wednesday, Dow Jones closed lower by 1.92%. Nasdaq Composite slid 3.02%, while S&P 500 fell 2.37%.

A trader said profit taking in US stocks may continue as the US government delays the approval of a stimulus package to combat the effects of COVID-19.

“The peso depreciated amid increasing market caution from the dimming prospects of an approved stimulus bill before the US November 2020 presidential elections,” the trader said in an e-mail.

The White House recently agreed on a $1.3-trillion stimulus after rejecting a $2.3-trillion proposal from lawmakers in the Democratic Party.

Federal Reserve Chairman Jerome Powell said on Wednesday a bigger stimulus package is urgently needed to save the US stock market and help the US economy recover soon.

For today, Mr. Ricafort sees the peso moving from P48.50 to P48.65, while the trader expects the local currency to range from P48.45 to P48.65. — Kathryn Kristina T. Jose

1...9,0359,0369,037...14,244Page 9,036 of 14,244
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube