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NEDA backs more investments in IT infrastructure, cashless processes

THE National Economic and Development Authority (NEDA) said it supports greater investments in the infrastructure supporting e-commerce and cashless transactions, which allowed many businesses and individuals to function during the lockdowns and beyond.

“Online shopping and marketing platforms will play a bigger role in the new normal as businesses and consumers increase the use of electronic transactions, including cashless payment systems and other financial technology platforms,” NEDA Acting Secretary Karl Kendrick T. Chua said in a statement Monday.

NEDA proposed to “revisit” Republic Act No. 8792 or the Electronic Commerce Act of 2000 in a recent report. It recommended tweaks to make it “more comprehensive in detailing transactions covered by the law, specifying the rights of consumers, and strengthening the penalties imposed on service providers.”

Mr. Chua said more investments are needed in information and communications technology infrastructure to meet the spike in online transactions and to meet heightened consumer expectations for reliable Internet access.

According to a NEDA consumer survey conducted in April, more than half of some 390,000 respondents said their incomes fell after losing their livelihoods while many reported difficulty in accessing goods and services due to business closures, curfews and the ban on public transportation.

NEDA said in its report that meeting the spike in demand for online transactions “will be a challenge” with distancing guidelines still in place and many employees working from home. More businesses are also seeking to expand their online presence as alternative, digital modes to shopping continue to emerge.

“Businesses need to innovate and make full use of technology to resume operations and cater to consumer needs and preferences while still managing risks of COVID-19 infection,” Mr. Chua said, adding that companies will also have to “make online shopping easy, affordable, and secure.”

According to NEDA, the government needs to help them by extending financial and livelihood support for online enterprises and those in the e-commerce supply chain.

Meanwhile, Mr. Chua said financial institutions will also need to improve cybersecurity measures and regulations for retail clients and other businesses as well.

“The passage of the Financial Consumer Protection bill will provide the regulatory framework to protect the interests of financial consumers and reinforce confidence in financial markets,” according to NEDA, which also supports an information and education campaign on the rights of insurance policyholders. — Beatrice M. Laforga

House panel approves e-government bill

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THE House Committee on Information and Communications Technology on Monday approved House Bill 1248, which will require electronic government services and processes in all agencies and government corporations.

The proposed E-Government Act aims to improve ease of doing business and facilitate the observance of distancing measures in the post-quarantine era.

The bill requires the Department of Information and Communications Technology (DICT) to establish and promote an E-Government Master Plan to facilitate the development of all electronic government services. This is subject to review and revision every three years.

The master plan includes a Philippine government interoperability framework to guide and govern basic technical and informational interoperability of the ICT systems of all government agencies and corporations; an archives and record management information system to digitize paper-based documents; and a government online payment system enabling citizens and businesses to remit payments electronically.

The principal author of the measure, House Deputy Speaker and Camarines Sur Representative Luis Raymund F. Villafuerte, Jr. said in a statement on May 24 that the measure “aims to prepare and educate Filipinos for life after the lifting of the restrictions imposed by the national government and local government units to contain the spread of COVID-19 (coronavirus disease 2019) through new norms of social or physical distancing and safety measures in government and private offices, schools, commercial establishments and other public spaces,” Mr. Villafuerte said.

The committee also consolidated and approved House Bills 6759 and 6786 which seek to promote and develop digital careers.

Under the consolidated bill, the DICT, Department of Education, Commission on Higher Education, and the Technical Education and Skills Development Authority (TESDA) are required to create programs to ensure access to training, markets, and other forms of support for digital careers.

The Department of Labor and Employment and Department of Trade and Industry are the primary agencies tasked to draft standards for digital workers covering minimum-wage compliance, local government registration, complaint processing, industry-specific certification or training, and tax filing.

The bill also provides incentives for digital workers including scholarships, subsidized use of facilities and services provided by the government or private institutions, and grants-in-aid for equipment acquisitions.

The DICT, Department of Budget and Management and the Department of Public Works and Highways are required to ensure universal access to high speed, quality and affordable Internet by facilitating the development of connectivity infrastructures across the country.

The measure also directs TESDA to create a skills map geared towards identifying sectors that can be “effectively and positively” benefited by digital careers training.

“Clearly, online freelancing has become a viable option for Filipinos. By establishing the necessary policies in relation to online freelancing, we hope to provide ample and profitable employment to Filipinos online benefitting their families and our country,” Bohol Rep. Kristine Alexie B. Tutor said in the explanatory note of House Bill 6786.

All measures are awaiting second reading at the chamber. — Genshen L. Espedido

WFH to require data safeguards for outsourcing clients

OUTSOURCING contracts need to be rewritten to ensure client data protection under work-from-home (WFH) arrangements, IBM Philippines Government and Regulatory Affairs Executive Princess Lou M. Ascalon said.

Ms. Ascalon made the remarks at a virtual event organized by the National Privacy Commission Thursday.

“Data privacy clauses in our client and vendor contracts were… insufficient in addressing issues in a work-from-home environment, where we had to quickly amend and negotiate our client and vendor contracts to allow work-from-home arrangements with increased commitment from a physical, technical, and organizational perspective to ensure data privacy and security,” she said.

Some clients also asked for noise-proof workspaces in employee homes to reduce interference. Ms. Ascalon said IBM Philippines had to explain to clients that it is impossible for work-from-home operations to exactly mirror the security of an office environment.

IBM Philippines also had to ensure the delivery of secure devices to homes and to secure company network connections.

At the event, the NPC announced that it is leading 134 jurisdictions in a global task force to help shape government responses in protecting citizen privacy during the pandemic.

Privacy Commissioner Raymund E. Liboro was appointed chairman of the COVID-19 task force of the Global Privacy Assembly, which will focus on protecting data during contact-tracing and ensuring privacy as COVID-19 testing expands when employees return to work after quarantine restrictions are eased.

“Our aim for this task force is to examine current privacy concerns, while finding the right balance between supporting innovation to combat the pandemic and ensuring people’s personal data and information rights are respected,” Mr. Liboro said.

The task force includes representatives from the International Committee of the Red Cross. — Jenina P. Ibañez

PSA, NEDA survey farmers, fishermen on COVID-19 impact

THE Philippine Statistics Authority (PSA) has tied up with the National Economic and Development Authority (NEDA) for a survey that hopes to assess the impact of the coronavirus disease 2019 (COVID-19) outbreak on the agriculture and fisheries industries.

In a statement, the PSA said the survey, which was conducted in May, will aid in drafting policy recommendations to help the economy adapt to the post-pandemic environment.

“On behalf of the Inter-Agency Task Force’s Technical Working Group (IATF-TWG) on Anticipatory and Forward Planning, the NEDA and the PSA will conduct the Business Rapid Assessment Survey for Agriculture and Fisheries (BRASAF),” the PSA said.

BRASAF will be a rider survey to eight other surveys that will cover agriculture and fishery activities such as palay production, corn production, crop production, commercial livestock and poultry raising, commercial fisheries, municipal fisheries, inland fisheries, and aquaculture.

The PSA will also seek to form a picture of what forms of assistance are needed from the government to ensure continued production, and the industry’s plans in the next few months after quarantines are lifted. — Revin Mikhael D. Ochave

Energy efficiency industry, angling for slice of PESA money, touts job-creation potential

ENERGY efficiency projects have the potential to generate 45% more jobs than the government’s flagship infrastructure program, assuming extensive investment from the economic stimulus package, the industry association said.

In a position paper sent to various agencies Monday, the Philippine Energy Efficiency Alliance, Inc. (PE2) is lobbying for P55 billion worth of investment in energy efficiency for inclusion in the proposed Philippine Economic Stimulus Act (PESA), saying investment will boost job generation after the economic stagnation caused by the coronavirus disease 2019 (COVID-19) pandemic.

It said that energy efficiency projects are projected to generate 10 more jobs, or 37.42, for every P50 million worth of capital invested, compared to the government’s “Build, Build, Build” (BBB) program, which creates about 25.88 jobs per P50 million invested.

“In comparison to the BBB program through the remaining term of the Duterte administration, energy

efficiency projects are estimated to be 45% more labor-intensive than BBB infrastructure development activities, creating significantly more jobs for every P50 million invested in long-term or stimulus programs,” PE2 said.

The Department of Budget and Management (DBM) estimated that 1.1 million jobs are created each year from the implementation of BBB projects, in which P8-9 trillion is due to be invested by 2022.

Under the PESA Bill, the enhanced infrastructure program will receive around P650 billion in funding.

The job-generation estimate was arrived at after a survey of energy service companies.

PE2’s investment recommendations will create around 41,200 energy efficiency-related jobs over three years starting 2021.

The proposed investment includes P40 billion in concessional loans from financial institutions such as the Development Bank of the Philippines and the Land Bank of the Philippines to local government units and small businesses for their energy efficiency projects. Another P15 billion will go to energy-efficiency improvements in public sector facilities.

On May 26, the House Defeat COVID-19 Ad-Hoc Committee approved PESA among bills aimed to help the Philippine economy recover from the pandemic . — Adam J. Ang

Proposed tax reform in a time of pandemic

The government’s plan to improve our corporate tax system and to develop a more efficient and competitive tax incentives regime has been ongoing for quite some time. In February, the proposed measure, known as the Corporate Income Tax and Incentives Reform Act (CITIRA) Bill, reached the Senate. Many hopes were raised that the CITIRA Bill would soon be enacted into law.

Unfortunately, the COVID-19 pandemic broke out. Along with it are the measures undertaken by the government such as declaring a state of public health emergency and imposing community quarantine in several areas to contain the spread of the virus. These measures halted many social and economic activities and changed various aspects of our everyday lives.

The CITIRA Bill was not spared change. Given the COVID-19 situation, several changes were proposed to the bill to recalibrate it, to be more responsive to the needs of businesses, and to aid taxpayers in their recovery.

Below are some of the proposed key changes to CITIRA Bill, now known as the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), that legislators are currently evaluating:

OUTRIGHT REDUCTION OF CORPORATE INCOME TAX RATE
Under CITIRA, the corporate income tax (CIT) rate will be reduced by 1 percentage point every year starting Jan. 1, 2020, until it eventually reaches 20% by Jan. 1, 2029. Under CREATE, businesses can enjoy earlier the benefit of paying income tax at lower rates due to an outright reduction of the CIT rate from 30% to 25% by July 1, 2020. Afterwards, starting Jan. 1, 2023, there will be a 1 percentage point decrease every year until the CIT rate reaches 20% by Jan. 1, 2027.

Businesses can use the funds saved from the cut in the CIT rate to revitalize operations and retain their workers.

EXTENDED PERIOD OF NET OPERATING LOSS CARRY-OVER
Net operating loss is the excess of deductible expenses over the gross income of a taxpayer in a given taxable year. Under the current rules, the net operating loss can be carried over as a deduction from gross income to the next three succeeding taxable years. Under the CITIRA Bill, there were no provisions amending this rule.

Under CREATE, however, the net operating loss incurred by non-large taxpayers for the taxable year 2020 can be carried over as deduction from gross income for the next five consecutive years. This provision will help taxpayers recover the losses incurred in 2020 when many businesses were forced to stop their operations or operate at limited capacity due to the COVID-19 pandemic.

LONGER SUNSETS FOR BUSINESSES CURRENTLY ENJOYING INCENTIVES
Under the reform on the tax incentives, the incentives currently being enjoyed by businesses registered with different investment promotion agencies (IPAs) are being modified to make the incentives performance-based, targeted, time-bound, and transparent. Companies currently enjoying incentives under the existing laws governing their respective IPAs, however, will still be allowed to enjoy existing incentives for a certain period.

Under CREATE, businesses currently registered with different IPAs can still enjoy 5% gross income tax for four to nine years from effectivity of new tax incentive schemes. This is an extension of two years from the two to seven years of sunset period provided under the CITIRA Bill. This will give ample time for businesses to adjust to and evaluate the new incentive schemes.

TARGETED INCENTIVES FOR BUSINESSES IN IDENTIFIED AREAS
One aspect of the new tax incentives schemes under both CITIRA and CREATE is to provide a longer period of tax incentives for businesses that will locate in less-developed areas and areas outside of metropolitan regions. This geographic targeting is in support of the government’s “Balik Probinsya, Bagong Pag-asa Program,” which aims to decongest Metro Manila.

In terms of industry targeting, activities which include highly technical manufacturing, agriculture, fishing, forestry, and service activities requiring knowledge, modern science, engineering, and research resulting in significant value-added and high-paying jobs, as well as activities that may draw in investment capital of $1 billion, will be highly prioritized.

Moreover, the President is given flexibility in granting tax incentives. Upon the recommendation of the Fiscal Incentives Review Board, the President may modify the mix, period, or manner of availing of incentives for a highly desirable project or a specific industrial activity based on defined development strategies, such as creation of high-skilled jobs and attracting significant foreign capital or investment subject to limitation that the period for availing of incentives shall not exceed 40 years.

Over the past few months, we have seen how our government dug deep into its pockets to support its people and put up the fight against the COVID-19 outbreak. With this fight came lockdowns, business shutdowns, layoffs, and disrupted supply chains, which have taken a heavy toll on our economy. Some of the proposed provisions of CREATE to help businesses recover from the pandemic may mean a reduction in government revenue, but these will also help attract a new wave of multinational businesses to invest in our country, thereby giving our economy a much-needed boost. We can only hope that the proposed measures will be passed into law as early as possible.

The pandemic and tax reform both entail change. While the changes brought about by the former may be something we wished never happened, the changes that the latter may bring would definitely be most welcome.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

John Paulo D. Garcia is a manager of the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Local pro hoops league looking to ease its way back

By Michael Angelo S. Murillo, Senior Reporter

WITH Metro Manila entering a general community quarantine (GCQ) setup on Monday, the Philippine Basketball Association is hoping that it would pave the way for more opportunities for it to ease its way back to the grind.

Following nearly three months of heightened restrictions because of the coronavirus disease 2019 (COVID-19) pandemic, the Inter-Agency Task Force for Emerging Infectious Diseases (IATF) last week decided to downgrade, beginning June 1, conditions in the National Capital Region to GCQ, where certain restrictions are lowered.

These include allowing athletes and enthusiasts of individual sports to squeeze in some activities, provided certain health and safety protocols are followed.

Among the sports allowed to resume are running, biking, golf, swimming, tennis, badminton, equestrian and skateboarding.

Some forms of mass gatherings, too, are allowed as long as participants are accommodated in limited capacity to ensure that the potential to get COVID-19 would not be high, if not possible.

It is this turn of events that PBA is banking on as it angles to get back to some semblance of normalcy after shutting its activities in March when the highly contagious respiratory disease started to take further root in the country.

“This makes us optimistic that our teams can be allowed to return to the gym for individual workouts by shift,” PBA Commissioner Willie Marcial was quoted as saying in the official league Website on what they are immediately looking at with the easing of certain restrictions.

Mr. Marcial, however, said they recognize that there is still a long way to go from the league’s return to action but he expressed their readiness to comply with whatever government asks of organizations like them and do what is needed to ensure a successful restart.

“Slowly the plans of the government moving forward are being made known and the PBA is looking at that and working around it,” said Mr. Marcial.

The PBA said that it would make a final decision on the fate of Season 45 in August, believing that by that time there would be a clearer picture of the COVID-19 situation in the country.

But while the league is awaiting return to action, the PBA office has started operating after some time.

It does not have the full complement yet as it is still waiting the results of the COVID-19 testing done on its personnel at the weekend but nonetheless are bent on getting some work done in their push to resume activities.

This week the PBA Board of Governors is set to convene and craft the appropriate protocols for the league under the “new normal.”

Sunsparks wins second straight MLBB Professional League — PH title

FOR the second straight time Sunsparks is the Mobile Legends: Bang Bang Professional League – Philippines (MPL-PH) champion after topping ONIC PH in the finals of season 5 at the weekend.

Allen “Greed_” Baloy lifted Sunsparks to the title, leading his team to the 3-1 victory in their best-of-five battle with ONIC PH, which he was once part of.

With the title-clinching Game Four heading into a fever pitch, both teams figured in a crucial clash near the lord pit. Greed_ (Natalia) — who was donning the ONIC PH jersey just last season — found his former teammate Danerie “Wise” James (Hanzo) placed just beside the throne in his pinnacle form and erased him off the map right away.

With members of ONIC PH still far off, Greed_ immediately attacked the throne to seal the crown.

Having had the opportunity to contribute that way he did, Greed_ said he was very happy to finally lay his hands on the title with Sunsparks just as he shared he felt for his former team.

“I can say that I am more happy that we won than because we beat them (ONIC PH),” said Greed_ , who finished with seven kills and five assists in Game Four, while also providing the vision for his team through Natalia’s assassin instinct.

Teammate Kiel VJ “Kielvj” Cruzem (Kimmy), backstopped Greed_ with four kills and eight assists while the supporting cast of Jaypee “Jaypee” Dela Cruz (Jawhead), Ashley Marco “Killuash” Cruz (Thamuz), and Christian “Rafflesia” Fajura (Khufra) combined for eight kills and 17 assists.

For his consistent finals brilliance, however, Kielvj was named finals most valuable player.

ONIC PH was paced by Christian “Iy4knu” Manaog (Chou) with eight kills, four kills, and three deaths in Game Four with Wise adding five kills, seven assists, along with five deaths.

For winning the tournament, Sunsparks secured the $25,000 top prize with ONIC PH settling for $13,000.

Third place went to Bren Esports while Execration finished fourth.

Other teams that competed in the tournament were SGD Omega, Blacklist International, BSB and ULVL.

The Mobile Legends: Bang Bang Professional League — Philippines (MPL-PH) was powered by Smart Communications Inc. — Michael Angelo S. Murillo

Jordan, Hamilton let their voices be heard over Floyd’s death

TORONTO — Basketball great Michael Jordan voiced outrage on Sunday over the death of George Floyd, a black man shown on video gasping for breath as a white policeman knelt on his neck in Minneapolis, an incident that has triggered violent nationwide protests.

Jordan said his heart went out to the family of Floyd and others who have died through acts of racism.

Also having his voiced over the issue was six-time Formula One motor racing champion Lewis Hamilton, who criticized his sport for its silence on the killing.

“I am deeply saddened, truly pained and plain angry,” Jordan, a Basketball Hall-of-Famer and owner of the National Basketball Association’s Charlotte Hornets, said in a statement. “I see and feel everyone’s pain, outrage and frustration.

“I stand with those who are calling out the ingrained racism and violence toward people of color in our country. We have had enough.”

The comments from Jordan came as many US cities were bracing for another night of unrest after cleaning up streets strewn with broken glass and burned-out cars as curfews failed to quell confrontations between protesters and police.

Jordan, a six-time NBA champion who was at the heart of the Chicago Bulls’ dynasty in the 1990s, called on people to show compassion and empathy and never turn their backs on senseless brutality.

“We need to continue peaceful expressions against injustice and demand accountability,” said Jordan. “Our unified voice needs to put pressure on our leaders to change our laws, or else we need to use our vote to create systemic change.

“Every one of us needs to be part of the solution, and we must work together to ensure justice for all.”

STAYING SILENT
Hamilton, meanwhile, criticized his sport for not speaking on the killing of Floyd.

Formula One’s first black world champion, Hamilton spends much of his time in America and spoke out on the issue in an Instagram story on Sunday.

“I see those of you who are staying silent, some of you the biggest of stars yet you stay silent in the midst of injustice,” wrote the Mercedes driver. “Not a sign from anybody in my industry which of course is a white-dominated sport. I’m one of the only people of color there yet I stand alone,” he added.

In a second post, Hamilton added: “I do not stand with those looting and burning buildings but those who are protesting peacefully. There can be no peace until our so-called leaders make change.”

Hamilton has spoken out before about the lack of diversity in motor racing. “There really is the most minimal diversity within this sport and I really somehow want to be a part of shape-shifting that with Formula One,” he said a year ago. — Reuters

Elite sport to get exemptions from British quarantine rules — report

LONDON — British quarantine rules are set to be relaxed for elite sport in a boost for soccer clubs in European competition and Formula One’s plans for races at Silverstone, the Times reported on Sunday.

Britain is introducing a two-week quarantine period from June 8 for most people arriving from abroad to guard against a resurgence of the COVID-19 pandemic, with sport not specifically excluded.

The Times reported that the government was prepared, however, to exempt elite sports events if detailed plans regarding movements and activities were approved.

A Formula One spokesperson said in response to the report that the sport welcomed “the government’s efforts to ensure elite sport can continue to operate and their support for our return to racing.

“We will maintain a close dialogue with them in the coming weeks as we prepare to start our season in the first week of July.”

The sport, whose season has been delayed by COVID-19, plans to issue a revised calendar next week with two races behind closed doors in Austria on July 5 and 12, followed by a grand prix in Hungary before two races in Britain in August.

Formula One plans to keep the teams, seven of them based in Britain, in a safe environment with regular testing and minimal contact with anyone outside the circuit. Staff will fly in on charters.

Quarantine would have affected their ability to come and go as well as restricting Italian teams Ferrari and AlphaTauri as well as Swiss-based Alfa Romeo.

Manchester City and Chelsea are still in soccer’s Champions League while Manchester United, Wolverhampton Wanderers and Glasgow Rangers are playing in the Europa League. Those matches could also take place in August.

West Indies and Pakistan are also due to tour England this summer.

Culture secretary Oliver Dowden said on Saturday that “football, tennis, horse racing, Formula One, cricket, golf, rugby, snooker and others — all are set to return to our screens shortly.” — Reuters

World Vision to hold virtual run for children

LIMITED it may be by the ongoing coronavirus disease 2019 (COVID-19) pandemic, World Vision in the Philippines is not being deterred by it as it continues to look for ways to push for its mission.

Later this month, World Vision is set to hold the 1st Virtual Run for Children, the goal which is to promote fitness and health during the community quarantine in the country while raising funds for the benefit of the organization’s most vulnerable children and communities.

As the entire country deals with COVID-19, World Vision recognizes that children are among those impacted greatly by the pandemic, with their access to basic needs like food, education and hygiene compromised.

But since outside movement is still limited as restrictions are still up as part of mitigating measures of the government against COVID-19, World Vision is instead encouraging people to run for a cause but with them not having to leave their homes through the virtual run.

“World Vision is excited for its first-ever virtual run for children. It is our prayer that friends and families will be refreshed as they continue supporting the most vulnerable children. In these trying times, we hope that this will also provide them with an enjoyable, safe and healthy way to somehow reconnect in a virtual manner,” World Vision National Director Rommel Fuerte said of their upcoming event.

Lending support to World Vision’s virtual run for children are celebrity ambassadors Enzo Pineda, Gelli Victor and Gretchen Ho.

Those interested to participate in the virtual run just have to sign up by selecting the advocacy they wish to support, whether Education or Health & Nutrition, and their preferred mileage, either 21K, 50K, 100K, or 200K.

Then, run anytime and anywhere between June 15 and July 31.

Once they have reached the goal, they can get a limited-edition World Vision Virtual Run for Children Finisher Shirt and a Finisher Medal.

The participants can walk or run whether indoors or outdoors and use a running or steps app to monitor the distance while making sure that they follow the community quarantine regulations in their area.

To make the virtual run more interesting, World Vision is challenging participants to step up their game by inviting family and friends to donate to their chosen advocacy.

The fees range from P1,050 to P1,650 and it is inclusive of a shirt, medal, and an e-certificate. A portion of the proceeds will contribute to World Vision’s projects for Education and Health & Nutrition.

To register for the World Vision Virtual Run for Children, visit www.takbo.ph/vr/worldvisionrun2020.

For more updates on the event, like and follow World Vision Run on Facebook, www.facebook.com/worldvisionrun. — Michael Angelo S. Murillo

TRUST: The most stable ‘currency’ in the COVID-19 crisis and recovery

The rise of COVID-19 from a “crisis-to-watch” back in late December 2019 to a global pandemic that saw every country go into virtual lockdown, is nothing short of meteoric. The world’s economy fell into the doldrums with businesses (except for a handful) struggling with almost non-existent operations, disrupted supply chains, and an unprecedented surge or drop in demand that were not even in any planning scenario. We are all caught flat-footed by this continuously evolving threat, at a loss as to what will come next, not knowing where to start our business continuity and recovery efforts.

The COVID-19 pandemic is redefining many aspects of society, the environment and the world. It is revealing vulnerabilities of both public and private institutions, and in sharp contrast, showing the strengths of communities, families, and individuals to come together and “save the day.” We see heightened activities in social media that have become a potent “microphone” for the people to say what they think and feel; and how this is being used to amplify the message that the governed should have influence over the decisions and actions of those who govern. Trust has become the most stable “currency” that institutions must have in huge reserves to engage stakeholders.

The acceptance or rejection of the behavior, actions, and policies adopted by the government and business organizations depend on how well they are trusted to deliver what was promised.

People are looking closely not at just the plans, but how well these are implemented; not just at the pronouncements or press releases but what their networks’ — families, friends, co-employees, communities — testimonials are. The talk must be the walk.

Therein lies the challenge. Because trust is a critical factor in crisis, its presence constitutes major capital for organizations and leaders, one that can be leveraged on to bounce back and recover faster in the aftermath. Conversely, its absence will dictate how long a time they will need to regain lost ground, if they survive at all.

How are their actions increasing or decreasing their trust reserves? The most successful brands use their power and capabilities to be at least one of these qualities to their stakeholders: helpful, useful, or uplifting.

For instance, insurance company Pru Life UK offered free COVID-19 insurance for 500,000 Filipinos through its healthcare management app, Pulse. HP Philippines provides free printable templates to engage parents looking for activities to do with their children while stuck at home during the lockdown. Total Philippines showed its support for medical frontliners by letting them gas up for free at key Total stations around Manila.

Companies who are showing compassion to their employees by coming to their assistance at this time of need are perceived more favorably than those who are announcing plans to lay off workers. Airlines are winning and losing by the policies they adopt on cancellations and refunds.

There are LGUs that are stepping up and providing creative solutions to provide access to food and transportation; and the people responded by coming to the rescue of these trusted leaders, protecting them from political repercussions. In contrast, we also witness how the political shine of other local leaders dimmed because of the lack of trust that they can deliver.

Communication with stakeholders has become a critical component in trust-building. Credible, transparent, and reliable information is the best defense against lies, fear, anxiety, and wrong perceptions. Because the medium is the message, it is vital that leaders and organizations pay equal importance to both content and the one tasked to deliver this, to ensure that the narrative covers all the touchpoints — not just with data and numbers, but also with emotions. Proper communication cannot be left to chance; it requires insights, empathy, critical thinking, and discipline to strike a note that will swing the trust meter in the right direction.

Finally, we must not be afraid to say that we do not have all the answers and that we can commit mistakes. Transparency is a must if we are to build a trust-based relationship with our stakeholders.

Gaining the trust of our stakeholders takes time. It adds up with every action that shows how we put the customer first by giving them their money’s worth; by how we improve their experience with every complaint they report; by how well we treat our employees; by the importance we place on purpose, not just profit; and by our concern for the environment, sustainability and governance.

Communication is the bridge that connects what we do to build this trust, the stakeholders we need to build relationships with, and with society in general.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP)

 

Junie del Mundo is Vice-Chair of the MAP CEO Conference Committee and the Chair and CEO of The EON Group, a fully integrated communications consultancy with expertise in consumer and corporate PR, reputation management and public affairs, digital marketing and creative technology, and experiential marketing.

junie.delmundo@eon.com.ph

map@map.org.ph

http://map.org.ph

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