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Naga rural bank turns in banking license

A RURAL bank in Bicol has been permitted to voluntary surrender its banking license, according to the Bangko Sentral ng Pilipinas (BSP).

In a circular dated April 14, BSP Deputy Governor Chuchi G. Fonacier said that the Monetary Board approved the voluntary license surrender of First Naga Rural Bank, Inc.

“The end-view of the voluntary surrender of the banking license is to proceed with voluntary dissolution and liquidation,” Ms. Fonacier said in a text message.

The Philippine Deposit and Insurance Corp. handles the liquidation and administration of assets of such lenders.

The BSP allows for a voluntary surrender of a banking license for lenders undertaking a voluntary dissolution and liquidation or those that want to become non-bank institutions.

Operating income of rural banks hit P29.627 billion in 2019, up from P26.554 billion a year earlier, according to the BSP.

Meanwhile, total assets stood at P243.891 billion in 2019, from P229.867 a year earlier. — Luz Wendy T. Noble

Peso weakens on rate cut, China GDP contraction

THE peso weakened Friday on continuing concerns about the coronavirus disease 2019 (COVID-19) outbreak’s impact on the gloabl and following the central bank’s rate cut.

The peso closed at P50.90 against the dollar, after finishing at P50.80 Thursday, according to data from the Bankers Association of the Philippines.

The peso opened at P50.78, with an intraday low of PP50.93 and a high of P50.72.

Dollars tradding volume was $491.6 million, up from $352.1 million Thursday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso weakened in the wake of another rate cut by the Bangko Sentral ng Pilipinas.

“The peso closed at P50.90 a day after the surprise (50 basis—point) cut in policy rates that reduce the interest rate income of peso-denominated fixed-income investments,” he said in a text message.

On Thursday, BSP Governor Benjamin E. Diokno announced that the Monetary Board slashed policy rates further by 50 basis points to encourage lending to support the economy during the COVID-19 crisis.

This brought down rates for overnight reverse repurchase, lending, and deposit to 2.75%, 3.25%, and 2.25%, respectively.

The cut came less than a month after the 50-bp reduction in a scheduled Monetary Board meeting on March 19, which took effect on March 20.

Mr. Ricafort added that latest economic data releases from China and the US also weighed on the peso.

“The sharp decline in China’s GDP (gross domestic product) in Q1 2020 also partly caused some increase in global risk aversion,” he added.

According to China’s Bureau of Statistics, the Chinese economy economy contracted 6.8% year-on-year in the first three months, the first retreat since at least 1992 when quarterly GDP records began.

A trader who asked not to be identified said the rate cut as well as new economic data from the US affected the peso’s performance.

“The peso weakened following the announcement of an off-schedule 50-point basis BSP point policy rate cut yesterday and as new US layoff numbers for this week remain elevated,” he said in an email.

Reuters reported that 22 million Americans applied for unemployment benefits over the past month, representing about 13.5% of the work force. — Luz Wendy T. Noble

Digital push gains support as virus disrupts business

By Adam J. Ang

MORE companies are compelled to revamp their business models to step into further digitalization as the global coronavirus disease 2019 (COVID-19) pandemic has greatly affected the ways of doing business in the present age.

In a webinar hosted by the Management Association of the Philippines on Friday, leaders of JG Summit Holdings Inc., SyCip Gorres Velayo (SGV) & Co., and 1771 Group of Restaurants discussed the ways they are balancing their commitments to manage their workforces, to serve their customers or clients, and to aid the country as it grapples with the public health crisis.

“I think it [pandemic crisis] has accelerated our own conclusion that we need to really do digital ways of working,” said Nicasio L. Lim, group senior vice president for corporate resources of JG Summit.

He noted that the present crisis has opened many opportunities for the digital integration of various businesses for further productivity.

“We realize there’s a lot of opportunities to increase our productivity to do mergers and integrations on the ways of how we do our systems and processes,” Mr. Lim said.

Besides flexible work arrangements, many businesses have implemented work-from-home scheme for their employees as the country is placed under enhanced community quarantine (ECQ).

Based on data from the online job portal JobStreet, almost half of Filipino workers (47.8%) desired the option to work from home.

Workers of professional services firm SGV & Co. have turned into a remote working scheme since the implementation of the ECQ.

“We are able to shift to a work-from-home working arrangement immediately during the ECQ given that we’ve invested highly in digital transformation over the past years,” Julie Christine O. Mateo, a talent leader from the company, said.

But the firm noted that workers faced some challenges with the work set-up, such as feelings of isolation, time management, and even personal struggles.

To resolve this, the human resources department of the company has regularly put up a series of activities intended to engage them.

“What keeps us busy right now is we have to continue to engage our people on a virtual set-up which is different from a face-to-face set-up,” Ms. Mateo said.

Meanwhile, companies providing essential services claimed they have enforced safety measures and protocols as ordered by the government.

The 1771 Group, which has temporarily shuttered their food business since the enforcement of the ECQ, planned to reopen restaurants by the end of April, according to Ramon Ricardo V. Gutierrez, the company’s chairman and chief executive officer.

JobStreet noted that employees, especially those who cannot work remotely, will also seek medical and insurance coverages for themselves and their families from their employers, aside from mandatory government benefits.

Also, it said that a majority of the workforce (88%) wanted double-pay during holidays or in such events as calamities.

Both JG Summit and the 1771 Group cited that health insurance companies have offered telemedical consultations for those who wish to avail them.

“How employers will treat their people today will greatly influence the decision of their employees after this pandemic. Employees will remember how their employers have treated them today,” Mr. Lim said.

JobStreet said employees are watching how companies respond to the COVID-19 crisis. “With this, it’s important that your company continues to make strides forward,” it said.

GRADUAL WORK RECOVERY
Meanwhile, the Department of Labor and Employment (DoLE) is considering a gradual return of employees to work as soon as the ECQ lapses by the end of the month.

“We are thinking that should the lockdown period really end on April 30… it should not be an abrupt report-to-work for all the workers. We are thinking of maybe a gradual [return], about 30%, and then after one month, another 50%, and then 75%,” DoLE Undersecretary Ana C. Dione said in the webinar.

This move will help companies make necessary adjustments in occupational safety and health (OSH) protocols for their workers, along with the implementation of social distancing measures being ordered by the government.

Likewise, DoLE will create some adjustments in the implementation of Republic Act 11058 or the OSH Law.

As part of the employment recovery plan of the Labor department, Ms. Dione said: “We are also putting up some programs for those who will be laid off or those who will be unemployed.”

SEC warns of illicit use of its logo

THE Securities and Exchange Commission (SEC) told the public to refrain from engaging with online pages that appropriate its official logo on social media for exploitative reasons.

In an advisory issued on Thursday, the corporate regulator noted that there are individuals and groups who use its official logo on social media platforms, such as Facebook, without its prior permission.

“[T]he public is hereby advised to exercise caution in dealing with any individual or group of persons who use the official SEC Logo in its social media accounts,” the advisory read.

It also told them to disengage from any activities or services being offered by those entities.

The regulator warned that those who will be found illegally using its logo for business or personal gains will be “severely dealt with by law and may incur criminal liability or otherwise sanctioned or penalized accordingly.”

It stressed that the National Historical Commission of the Philippines-registered logo is a property of the agency.

The SEC advised the public to only transact or communicate concerns on matters related to the agency at its website or personally through its offices across the country.

Further, it told them to report any social media pages using its official logo. — Adam J. Ang

Globe forges deal to acquire US technology firms

AYALA-LED Globe Telecom, Inc. said it has entered into an agreement to acquire for $4 million (P200 million) substantially all of the assets of US-based technology companies Cascadeo Corp. and Cascadeo Partners.

The telecommunications service provider said the purpose of the agreement is to speed up the development of its Information and communications technology (ICT) capabilities and solutions, and to provide a full suite of cloud-native products and services to its customers.

In a disclosure to the stock exchange, Globe said the executive committee of its board of directors approved on Friday the acquisition of the assets of Cascadeo Corp., Cascadeo Partners, and Cascadeo’s Philippine unit Cascadeo, Inc.

Globe said the committee also approved the creation of new entities through which the acquisition will be made.

“Globe, along with Cascadeo, will make follow up investments for growth capital to fund the company’s expansion strategies,” it said.

Cascadeo was founded in 2006 and focuses on automation, cloud-native platform, data analytics, serverless infrastructure, and programmatic security.

The company, headquartered in Seattle, Washington, also provides professional consulting services.

Globe said further that Cascadeo operates a Cloud Operations Center of Excellence in Manila, which serves its customers in both the US and the Philippines.

Globe President Ernest L. Cu said: “The joint venture with Cascadeo will further strengthen our ability to invent, innovate, and experiment. We will be leveraging on Cascadeo’s Cloud-Native Consulting and Managed Services capabilities to further solidify our credibility as a cloud solutions provider for enterprises and small and medium business customers who are ready to digitally transform.”

Meanwhile, Cascadeo Corp. Chief Executive Officer Jared Reimer said: “We’re excited to have a partner like Globe in the next stage of our growth journey. Their commitment to cloud-first and speed of adoption are rare to see in large organizations.”

He also cited Globe’s “balanced achieving business goals with taking care of their people.”

“We continue to be amazed by the talent of the Filipino workforce and partnering with Globe will be instrumental in helping us become an employer of choice as we broaden our footprint in the Philippine market,” Mr. Reimer said. — Arjay L. Balinbin

Robinsons Land raises oversubscription option for P15-B bonds

ROBINSONS LAND Corp. (RLC) has doubled the over-subscription option for its P15-billion fixed-rate bonds, a move that is usually prompted by greater demand for its debt offering.

In a stock exchange disclosure on Friday, the Gokongwei-led property developer announced that its board agreed to raise the over-subscription option for its latest bond offer to P10 billion from P5 billion.

RLC did not provide further details as these are yet to be finalized.

In March, the company offered its peso-denominated issuance, which has an aggregate principal amount of P10 billion.

The bond offer is subject to the requirements of the Securities and Exchange Commission and the rating process of the Philippine Rating Services Corp.

RLC is the real estate and hotel arm of listed JG Summit Holdings, Inc. The company posted a 6% increase in net income in 2019 to P8.69 billion as its revenues jumped to P30.58 billion.

On Friday, shares in RLC grew by 5.83% to close at P15.26 each. — Adam J. Ang

SMC seeks more farms for raw materials

SAN MIGUEL Corp. (SMC) is studying how it can tap more farmers to source raw materials for its food products while helping farms stay profitable, the company said, as the country grapples with the health emergency brought about by the coronavirus disease 2019 (COVID-19).

“We are looking for ways to be able to tap more farmers for rice production, corn, cassava, coconut oil, pork, chicken, among others,” said SMC President and Chief Operating Officer Ramon S. Ang in a statement on Friday.

“Through this, we hope to be able to support the livelihood of our farmers and secure our future supply of food,” he added.

He said the move would also spur economic activity across the food value chain that includes farmers and other participants such as suppliers of agricultural inputs, processing facilities, and shipping to retailers.

The diversified conglomerate said that in recent weeks, it had “intensified” buying of cassava from more than 17,000 farmers nationwide through 130 assemblers.

SMC’s food unit San Miguel Foods Inc. is among the country’s biggest producers of fresh meats, poultry, processed meats, flour, dairy products, spreads, and coffee. It said it was willing to buy products at guaranteed prices for the benefit of farmers.

“We want to make sure that farmers will directly benefit. It’s not only people in Metro Manila who are in need of help but also, our kababayans in the provinces, including our farmers,” Mr. Ang said.

“Our local farmers have long been a major part of San Miguel’s supply chain. We source many of the raw materials for a lot of our products from them. They are even more important and critical now, especially given the tight competition for products in the global market,” he added.

He urged more farmers to plant and assured them of a ready market for their produce.

“Right now, we have more than enough inventory for our present needs, up to over six months. But we will still buy their produce, so we can further ensure supply. This will also allow us to start preparing for the succeeding months,” Mr. Ang said.

The company said that since the start of the Luzon-wide enhanced community quarantine in March, it had been expanding food production to ensure supply in store shelves.

SMC has so far donated nearly P1 billion to support the response to COVID-19. Of that amount, P227 million worth of its food products has been distributed to so-called vulnerable sectors in Metro Manila and provinces in the Visayas and Mindanao.

“At this point, lives are more important than profits. Once all of this is done, we can always go back to business and start anew. Once a life is lost, you can never bring it back. It’s gone forever. We choose life over anything else,” Mr. Ang said.

PCPPI names new president, CEO

PEPSI-COLA Products Philippines, Inc. (PCPPI) has appointed Frederick D. Ong to lead the beverages and snacks manufacturer as president and chief executive officer, the publicly listed company said on Friday.

“I feel honored to have been chosen to lead a dynamic team of ethical and purpose-driven individuals who are leading the industry to transition into a more sustainable business model that puts priority on the people, environment, and the future of the world,” Mr. Ong said in a statement.

PCPPI, which described its new head as a “seasoned industry professional,” said his appointed took effect on Feb. 16, 2020.

Before joining the company, Mr. Ong was the vice-president, group general manager and chief marketing lead for the Yokohama Group of Companies and Century Motolite Battery Sdn Bhd based in Kuala Lumpur, Malaysia.

With more than 25 years of senior-level experience, Mr. Ong’s expertise is in commercial management in various sectors, including fast-moving consumer goods in food, personal care and pharmaceutical, consumer electronics, and automotive supply industries.

PCPPI said his “signature” leadership style demonstrates the ability to manage, coach and lead high performance teams across cultures. It said Mr. Ong is also known for driving innovative business improvements, which is aligned with the sustainable business approach of the company.

“I hope to add the most value in leading PCPPI, while considering the impact of our decisions and activities on our ability to achieve our long-term goals to Win as One,” he said.

PCPPI is the exclusive manufacturer of PepsiCo beverages and snacks in the Philippines.

Stocks up nearly 5% on news of an interest rate cut

THE LOCAL market ended on a positive note on Friday on news that the Bangko Sentral ng Pilipinas (BSP) cut its policy rates by another 50 basis points (bps) to support the economy, which is struggling from the impact of the coronavirus disease 2019 (COVID-19) pandemic.

The 30-member Philippine Stock Exchange index (PSEi) rose by 4.78% or 264.37 points to 5,789.97 on Friday, while the broader all shares index increased by 3.62% or 122.3 points to 3,492.43.

Darren Blaine T. Pangan, trader and head of online trading at Timson Securities, Inc., said in a text message that the market ended in green territory as reports circulated that the BSP slashed interest rates.

“The move by BSP was to further support the economy amid the COVID-19 pandemic,” he said.

Claire T. Alviar, research associate at Philstocks Financial, Inc., said in a text message that the local bourse gained by almost 5% after the central bank cut policy rates by another 50 bps to bring interest rates to record lows.

“According to the BSP, it aimed to encourage lending to different sectors particularly to those most vulnerable during this time,” she said.

Ms. Alviar added that the market shrugged off the 6.8% year-on-year fall of China’s first quarter gross domestic product (GDP). It was its first GDP decline since 1992.

However, the unemployment rate in China’s urban areas was at 5.9% in March, lower than the 6.2% recorded in February.

“Investors were anticipating it already on the back of COVID-19 pandemic and disappointing data including a fall in retail sales by 19% and a decline of industrial production by 8.4%,” Ms. Alviar said.

However, Mr. Pangan said that the decline in China’s GDP might affect market sentiments.

“This may affect market sentiment negatively in the local bourse as investors price in its effect on companies that have operations in China,” he said.

On Friday, all sectoral indices registered an increase. Financials rose by 3.1% or 37.19 points to 1,235.72; industrials went up by 3.43% or 251.58 points to 7,566.82; holding firms increased by 4.84% or 265.05 points to 5,731.72; property climbed by 5.67% or 159.15 points to 2,963.69; services picked up by 4.2% or 52.21 points to 1,294.84; mining and oil improved by 0.36% or 16.97 points to 4,688.22.

“Investors reacted positively, and mostly banking on properties — with an increase of 5.67% and was the top gainer — It is one of the sectors to benefit the most when interest rates are reduced given its expansion plans,” Ms. Alviar said.

Advancers outnumbered decliners 142 to 63, while 27 names ended unchanged. Net foreign selling was at P814 million.

“With the index on a short-term uptrend, we may have to observe if support at 5,500 holds, and if so, nearest resistance to test is the 6,000 level,” Mr. Pangan said.

Robinsons Land Corp. (RLC) was among companies that disclosed corporate moves on Friday. It announced receiving greater demand for its P15-billion fixed-rate bonds as it moved to double its over-subscription option.

The Gokongwei-led property developer said its board had agreed to raise the over-subscription for its latest bond offer to P10 billion from P5 billion. Shares in the company rose 5.83% to close at P15.26 each.

Meanwhile, Manila Water Co., Inc. held its annual stockholders meeting on Friday. The meeting resulted in amendments to its seventh article of its Articles of Incorporation.

Stockholders approved the increase in the company’s authorized capital stock to P4.4 billion from P3.5 billion, creating an additional 900 million common shares.

The meeting also approved the increase in Manila Water’s carved-out shares to 900 million unissued common shares, from its previous 300 million common shares.

Last month, Manila Water disclosed details of Enrique K. Razon, Jr.’s P10.7-billion investment in the firm. The businessman’s Prime Metroline Holdings, Inc. will own 28% in the firm once it completes its acquisition of 820 million shares priced at P13 each.

“The signing of the subscription with the Razon group is just the beginning. Definitely bringing him (Razon) is important to the group,” said Manila Water Chairman Fernando Zobel de Ayala during the annual meeting, which was held online.

On Friday, shares in Manila Water rose by 0.18% and closed at P11.08 apiece. — Revin Mikhael D. Ochave

Important lessons in disaster and risk management

By Adrian Paul B. Conoza
Special Features Writer, BusinessWorld

AIM professor shares leadership principles in responding to the present crisis

Unlike natural disasters that the country has learned to brace for, the coronavirus disease 2019 (COVID-19) was an unprecedented disaster that has affected communities in numerous ways.

As the world continues to grapple with this pandemic and its effects, leaders can pick up from the COVID-19 crisis a lot of lessons on how to better prepare for disasters.

Prof. Kenneth Y. Hartigan-Go, head of the Stephen Zuellig Graduate School of Development Management at the Asian Institute of Management (AIM), shared these lessons on an online masterclass held at the institution’s Facebook page last April 17.

“Those who are prepared for it (disasters) would be in a better chance of bouncing back. This is the concept of resilience,” Mr. Hartigan-Go said at the beginning of the masterclass.

Mr. Hartigan-Go began his lecture by pointing out that while disasters raise the question of whether they bring out the best or worst in people, there is ‘another enemy’ leaders need to process.

“In leadership and understanding human behavior, we need to understand that we ourselves can also be the enemy,” he noted, adding that according to Sun Tzu’s Art of War, one does not need to fear the result of a hundred battles if he knows both the enemy and himself.

Mitigating risk

The professor then presented a framework in which one can better understand how certain factors contribute to a disaster risk, and in what ways can those factors be manipulated in order to reduce risk.

Risk is explained as the probability of loss, injury, death, and other consequences, Mr. Hartigan Go explained, and it is a product of hazard (in the present case, the virus), vulnerability, exposure, and capacity.

“Hazard, exposure, and vulnerability placed together will intersect and create what is known as potential loss or disaster risk,” he continued, “But we as citizens, as well as the government and private sector, can play a large role in reducing the [impact] of these three.”

Hazard, for instance, can be decreased by early monitoring. Exposure can be managed through the use of personal protective equipment (PPEs) such as face mask and goggles. Vulnerability, on the other hand, can be reduced through preparedness, engineering, and planning of enterprise (for businesses).

Lessons being learned

Moreover, the professor explained the lessons that have surfaced so far in the country’s and the world’s fight against the COVID-19.

First, he observed heroism among those in the frontlines battling against the spread of the virus. Patients were said to misinform and not declare their history of travel or exposure to other people out of fear.

He also observed the business sector and civil society creating innovations in the midst of necessity, like homemade or improvised face masks, PPEs, and tents.

The private sector has also been noted for coming forward with their “bayanihan spirit” to contribute to the effort of government in decreasing further infection.

An important lesson on fostering credibility is being learned as well by the government. “This credibility must be created through transparency long before any crisis hits,” Mr. Hartigan-Go said.

He also noted that other countries, especially those with strong health care institutions, are doing better with contact tracing and primary health care.

While the country has a Universal Health Care law, it has to come into implementation through adequate financing, integration of primary and hospital care, as well as the integration of the efforts of national and local government units.

“This is a wake-up call for us to invest in universal health care during this pandemic and beyond this,” he said.

Shielding against ‘infodemic’

The professor also noted that during this pandemic, the spread of fake news is likewise rampant. He advised to always validate information if they are received from trusted people or sources.

“We do have an obligation to report back information that are fake because these can harm the community through creation of anxiety and panic,” Mr. Hartigan-Go added.

He further stressed that in validating information, it is important to go deeper than the event being reported and find out if there are apparent patterns and trends that explain the events and structures that would explain the pattern.

“Information…that is wrong can be an enemy. You can’t make a proper management plan and strategy if you’re mislead by information,” he said.

Preparing to lead during crisis

Mr. Hartigan-Go also taught in the masterclass the seven Cs essential in crisis leadership.

To begin with, leaders should learn to keep calm and have grace under pressure. They should also have the confidence to take the lead in dealing with crises.

“The person should be learned and has studied [the situation], and if he doesn’t have all the information, [he] is willing to ask his people to help him and guide him so that he gains the confidence in crafting the strategic policies and management tools to deal with the crisis,” he explained.

The importance of communication must not be forgotten by leaders, since many people who are hungry for proper information will greatly benefit from communication allays their anxiety and fear.

Since leaders do not possess all the information, collaboration is a must, especially with science policymakers and management experts in the community.

The community is also vital in crisis leadership, and trust must be built within it. Compassion is also an important factor as it brings further balance to decisions being made. Lastly, cash completes the requirements of crisis leadership.

When it comes to creating an exit strategy once the enhanced community quarantine ends, Mr. Hartigan-Go stressed that leaders must learn from the best practices from other countries, especially from our neighbors.

Taiwan, for instance, was observed to have a strong UHC system that a lockdown was not needed to be ordered. South Korea, meanwhile, has invested in testing to identify those at risk.

Credibility and transparency are also noteworthy lessons learned from other countries. “Constant communication allaying the fears, and telling our society what exactly is happening, who is doing what, and the coordinated action of different government agencies is a very important tool that we learned [from] Singapore and Vietnam,” he said.

For businesses, Mr. Hartigan-Go suggested creating plans that prepare for the onslaught of pandemics.

“It’s not too late. I think we should still encourage enterprises and businesses to learn to integrate their SOP, human resource policy, finance policy, legal obligations, dealing with suppliers, maintaining customer loyalty and branding, [which] are all part of the disaster executive armamentarium,” he said.

Bayanihan to Heal as One Act

 

UP’s study on ECQ ‘flattening the curve’