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New Year town hall meeting

Our new chief executive officer (CEO) will visit our factory in the second week of January. We plan to organize a town hall meeting for him so that he can articulate his plans and programs. Do you have any suggestions on how to make the event effective, meaningful, and productive? — Moon River.

It depends on many factors, including the CEO’s personality and management style. To emphasize this point, how would you choose between Danny and Freddie? Decide whom you prefer to be stuck with in an executive lounge, assuming both are looking for a lunch companion. Danny has a ready smile for everyone and likes to consult his people, but he is very strict even on trivial things like grammatical errors in somebody’s report.

Freddie, on the other hand, is a maverick thinker who dislikes the traditional way of doing things. He likes his workers to work an average of 10 hours a day just as he does, and yet is a compassionate leader who approved a $10,000 interest-free loan to an employee whose wife is suffering from cancer.

The loan was made despite the absence of a policy, potentially creating a bad precedent.

It’s difficult to choose, right? That’s why you need to know more about Danny, Freddie, and your CEO. With less than two weeks to prepare, the best thing that you can do is to write your best recommendation. Send an e-mail to the CEO outlining all the things you’re planning to do.

Prepare for the worst. The CEO may reject your ideas or approve them with major revisions. To minimize all possible issues, consult with all department heads and let them evaluate your proposal before sending it to the CEO.

Consider the goals. It is basically to communicate information about organizational profitability (or unprofitability), future goals, everyone’s responsibilities, and corporate culture. Having said that, town hall meetings need not be limited to a one-time annual affair.

ELEMENTS
Town hall meetings are easy to plan but difficult to execute, even if you follow a template or best practices of dynamic organizations. That’s because your capacity may be different from the resources and implementing teams available to your model companies. The key is not to be discouraged.

If you’ve been in the corporate world for some time now, you should have attended many successful town hall meetings which may include any or all of the following elements:

One is a proactive two-way communication process. The CEO should take the lead in creating an ideal atmosphere where people are allowed to talk without any adverse repercussions. That’s not all. Town hall meetings can be more effective if supported by other communication tools like the anonymous employee morale survey and problem-solving groups like quality circles or its derivatives.

Two, sincerity in sharing information. All facts and figures about the company’s profitability and sustainability must be trustworthy. But that’s only half of the equation. If management claims that it’s losing money, it must also show how it is doing its part in eliminating waste, including the sources of waste that are not invisible.

Three, corporate battle cry for the year. You must create a theme that summarizes what you intend to do for the year. Examples are “Breakthrough 2025” or “Excellence is our creed.” The theme may be related to the corporate vision, mission, and value statements that have been established at the foundation of your company.

Fourth, all employees must attend. If it’s not possible due to the exigencies of business operations or if some workers are assigned to the provinces or elsewhere that keeps them from being present at the head office, you may allow a hybrid set-up with an online version happening simultaneously with the face-to-face meeting.

Five, the responsibility of everyone. While it’s easy to assume that the role of middle managers, team leaders, and frontline supervisors may be clear to them, there’s no assurance they know what to do in specific situations. Or, if they know what to do, how about their direct reports? Is everyone on the same page?

Six, use a visual presentation. Follow Guy Kawasaki’s 10-20-30 rule. Limit the number of slides to ten, delivered in 20 minutes or less, using a font size of at least 30 points that can be read from a distance. Amplify them with a photograph or illustration to complement the slides with only five to seven words.

Seven, limit the meeting to one hour. This includes a program containing a 10-minute introduction, the CEO’s 20-minute presentation, a 15-minute open forum, and a five-minute concluding statement from the second highest ranking officer like the chief operating officer, general manager, or the executive vice-president. Then close the event with a brief coffee break.

Last, publish a summary or highlights. This includes the CEO’s answer to all questions raised by the workers or their managers. The objective is to clarify all issues, if there are any. The summary must be published on all bulletin boards and the intranet so everyone can go back to it for review.

 

Bring Rey Elbo’s leadership program called “Superior Subordinate Supervision” to your organization. Chat him on Facebook, LinkedIn, X, or e-mail elbonomics@gmail.com or https://reyelbo.com

Petron to open more car care branches

PETRON.COM

PETRON Corp. seeks to expand its car care center network in the Philippines after opening its 60th and largest outlet to date, the company said on Thursday.

In a statement, the company said its branch in Urdaneta, Pangasinan is part of its expansion plan to meet the diverse needs of motorists.

Its car care center outlet, which opened last month, features nine service bays, Petron said, adding that its one-stop shop outlet also has a full range of automotive repair and maintenance services.

Petron opened six car care center outlets in Quezon City, Makati City, Pangasinan, Iloilo and Surigao City in 2024.

Petron’s attributable net income plunged 65.5% to P1.07 billion in the third quarter from a year earlier, as gross revenue fell 3.1% to P213.9 billion. — A.E.O. Jose

Inside the Entrepreneurial Mindset: Why continuous learning is so important

FACEBOOK.COM/DEARFACEPH

Being an entrepreneur is never easy. In my years working with and interviewing entrepreneurs, a common thread emerges: they all share how difficult it is to be an entrepreneur. It’s not just the constant hustle, the networking, or even the stress of being responsible for your workers and to your customers. It’s about how everything changes. Business models evolve, markets change, even consumer habits can become radically different overnight. For this reason, the entrepreneurial mindset is one that focuses on adapting to inevitable changes and embracing continuous learning.

Jonah Sison-Ramos embodies this entrepreneurial mindset. I had the good fortune of speaking with the founder and CEO of Dear Face and New Moon in my podcast, and sharing the stage with her at entrepreneurial events such as The Business Manual’s Growth Con. She has so many great lessons to share with entrepreneurs.

Jonah’s current businesses, Dear Face and New Moon need no introduction. But for those few who have somehow managed to be unaware of the TikTok hall-of-famer, Dear Face is the wildly popular beauty brand that sells beautifying multivitamin drinks like collagen and glutathione. New Moon, a relatively new disruptive product in the market, is an S-acetyl-glutathione product for those who want to whiten and brighten their skin while maintaining a healthy glow.

To provide some idea of the scale of the business, the numbers are difficult to wrap your head around. For example, Dear Face manufactures 50,000 to 100,000 pouches of Beauty Bean, one of Jonah’s most successful products, per week.

‘JUST GO WITH IT’
Jonah Sison-Ramos advises aspiring entrepreneurs to “Just go with it.” Perhaps, there is no greater testament to this entrepreneurial philosophy than her personal life. As a registered nurse and one-time casino card dealer, she has gone wherever there is opportunity.

This led her to establishing her first brand in 2012. No, it wasn’t Dear Face, not yet. It was a brand called Skin Potions.

After experiencing a particularly bad skin breakout, she tried a honey oatmeal soap to soothe her skin. Jonah recalls, “And then people were asking, ‘What did you use for your face? Because you had so many pimples back then.’ And then I said, this [is the] magical soap I used. And then they asked me, ‘Okay, are you selling it?’ So there’s a light bulb moment at that time. Why not sell it, right? And then they became my resellers.”

Crucially, this is also where she stumbled upon one of her ingredients to success: her distribution model. Inspired by multi-level marketing companies, she created her own version of the networking model, one where there were multiple teams and a leader per team. And from there, the business grew.

PIVOTING DURING THE PANDEMIC
Success wouldn’t come easy for Jonah though. During a critical time for the growth of Skin Potions, the COVID-19 pandemic happened. And the timing couldn’t have been worse. The brand had recently closed a partnership with Disney, and they were also expanding into retail.

Jonah recounts, “We wanted to go all out because this is the first time that a homegrown brand actually partnered with Disney. And then eventually we came up with a flagship store in Market! Market!

“And then three months after, it was the pandemic. So the investment, the money, the funds are all in our inventory and in our store. We didn’t have our ROI yet.”

To weather the pandemic, Jonah Sison-Ramos quickly pivoted her business. As Skin Potions sales flatlined, she kept the business afloat by selling alcohol in partnership with her manufacturers.

Never one to stand still, she also started developing new brands.

“Eventually I said to my husband, ‘We need to launch this brand.’ And then he said, ‘Why another skincare brand? Why not grow Skin Potions again?’”

Rather than rebuild the Skin Potions brand, Jonah chose to start a new brand with the same distribution network. It would be a fresh start, one dedicated to helping her distributors recover from the loss of income from the pandemic.

“That’s when Dear Face started,” Jonah says. “And we started with skincare sets.”

LIVE SELLING SUCCESS
Soon, the Dear Face brand began to grow traction. Its breakthrough happened, though, when it began live selling on TikTok, a platform famous for its dancing influencers that Jonah initially didn’t want to join. Yet instead of stubbornly refusing to join TikTok, she embraced continuous learning and studied the platform’s online selling arm, TikTok Shop, instead.

“When TikTok Shop was launched,” she says, “I saw brands going live. And then they were gaining like millions [of followers] in a day. So I said to myself, ‘Why not try Dear Face? Why not sell Dear Face there?’ And my distributors were very excited because they were the ones that actually explored the platform.”

One of the reasons live selling was so successful for Dear Face on TikTok was how easy the platform made buying with its yellow basket icon. Eventually, Dear Face would be given awards by TikTok for its online selling success, but Jonah says she did it for her distributors.

“I am actually going live in TikTok with their baskets, with their shops,” she says.

ADOPTING THE ENTREPRENEURIAL MINDSET
Jonah has had tremendous success with her brands, from Skin Potions to Dear Face to New Moon. None of it was easy. But because of her entrepreneurial mindset, her ability to pivot her business, and her willingness to learn, she has managed to come out on top of every trial.

For aspiring entrepreneurs, she gives the following advice:

“Launch a good product. That’s number one for me. Number two is you do your assignment. You do the market research, competitive analysis, everything. And then I think for the number three is just do it. Just go with it. Dedicate everything to God.”

 

RJ Ledesma (www.rjledesma.com) is a Hall of Fame Awardee for Best Male Host at the Aliw Awards, a multi-awarded serial entrepreneur, motivational speaker and business mentor, podcaster, an Honorary Consul and editor-in-chief of The Business Manual. Connect with Mr. Ledesma on LinkedIn, Facebook and Instagram. The RJ Ledesma Podcast is available on Facebook, Spotify, Google and Apple Podcasts.

Entertainment News (01/03/25)

The Pen marks Feast of the Three Kings

The Peninsula Manila brings the holiday season to a close with the arrival of the Three Wise Men of the East – Melchior, Gaspar, and Balthazar. The Three Kings will visit the hotel’s Belen (Nativity scene) and then spread joy amongst the hotel’s guests. The Three Kings Parade will be held on Jan. 5, 11 a.m. to noon, starting at the hotel driveway. In an adjunct activity, the Escolta restaurant will be holding a Three Kings Brunch Buffet on the same day from noon to 3 p.m. for P4,490 (adults) and P2,290 (children under 12).

SZA releases album SOS Deluxe: LANA

TOP DAWG Entertainment and RCA Records’ four-time Grammy award-winning artist SZA has released SOS Deluxe: LANA, the expanded edition of her critically acclaimed album SOS. It includes “Drive,” a new song written by SZA and produced by ThankGod4Cody and Billy Lemon. It is accompanied by a music video directed by Bradley Calder and starring Ben Stiller. The album mainly features lyrics written by SZA and production by Michael Uzowuru, ThankGod4Cody, Carter Lang, Rob Bisel, Solomonophonic & Monsune, and Dylan Newstarter, among others. The album includes “Saturn,” which is currently Grammy nominated for Best R&B Song and Best R&B Performance, “30 for 30” (with Kendrick Lamar), “Kitchen,” “Scorsese Baby Daddy” and more. SOS Deluxe: LANA is out now on all digital streaming platforms.

Dystopian Boy Kills World now on Lionsgate Play

THE new action-packed dystopian tale, Boy Kills World stars Bill Skarsgard as a deaf-mute orphan, known simply as Boy, on a relentless quest for vengeance. His entire family wiped out by a power-hungry dynasty, he trains with a shadowy shaman and tears through waves of enemies searching for his family’s killer, the cunning and deranged Hilda Van Der Koy (played by Famke Janssen). The film is out now via Lionsgate Play.

Kapitolyo Art Space hosts 1st exhibit at new location

THE inaugural exhibition at the new location of Kapitolyo Art Space is Projekt Kapitolyo, done in partnership with Shades of Pink Philippines Foundation, Inc., a breast cancer awareness organization. The group show, which runs until Jan. 12, boasts artworks by various artists such as Junyee, Pandy Aviado, Red Mansueto, Eghai Roxas, Gig de Pio, Kitty Taniguchi, Hermisanto, Arnel Borja, Pen Medina, Sio Montera, Raymund Fernandez, and Danni Sollesta, among many others. It marks the move of the art space to its new home at 21 West Capitol Drive, Kapitolyo, Pasig City. The gallery is open daily from 10 a.m. to 7 p.m.

Alien: Romulus now streaming on Disney+

THE latest installment of the legendary Alien franchise, 20th Century Studios’ Alien: Romulus, makes its way to streaming this January. With it, director Fede Alvarez takes the story back to its iconic roots as a group of young colonizers come face-to-face with the most relentless and deadly life form in the universe. It stars Cailee Spaeny, David Jonsson, Archie Renaux, Isabela Merced, Spike Fearn, and Aileen Wu. The film is out now via Disney+.

How PSEi member stocks performed — January 2, 2025

Here’s a quick glance at how PSEi stocks fared on Thursday, January 2, 2025.

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN economies, December 2024

PHILIPPINE factory activity ended 2024 on a high as December growth was the fastest since November 2017, driven by an increase in production and new orders, S&P Global said on Thursday. Read the full story.

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN economies, December 2024

Philippine shares climb on PMI, bargain hunting

REUTERS

PHILIPPINE SHARES climbed on the first trading day of 2025 on stronger manufacturing activity in December and as investors hunted for bargains.

The benchmark Philippine Stock Exchange index rose by 0.33% or 21.60 points to close at 6,550.39 on Thursday, while the broader all shares index went up by 0.17% or 6.59 points to 3,755.10.

Philippine financial markets were closed for holidays on Dec. 30, Dec. 31, and Jan. 1.

The local bourse ended higher following the release of data showing that Philippine factory activity in December expanded at its fastest pace since November 2017, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The headline S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) went up to 54.3 last month from 53.8 in November.

This marked the 16th straight month that the PMI expanded and was also the strongest improvement in operating conditions since November 2017.

A PMI reading above the 50 mark indicates expansion, while a reading below 50 shows a deterioriation in operating conditions.

“Both output and new orders rose sharply and at broadly similar rates, marking the strongest growth in each since April 2022,” S&P Global said.

“The market closed its first trading day of the year on a positive note on the back of last-minute bargain hunting,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Foreign transactions posted net inflows amounting to P217.72 million… Trading was still lethargic, however, with net value turnover at P2.8 billion, below last year’s average of P5.15 billion.”

Net foreign buying stood at P217.72 million on Thursday, a turnaround from the P112.76 million in net foreign selling recorded on Dec. 27.

Meanwhile, value turnover dropped to P3.24 billion on Thursday with 1.11 billion issues traded from the P4.19 billion with 1.18 billion shares that changed hands on Dec. 27.

“Philippine shares started on a positive note, showing noticeable gains as the market gears up for a full year ahead,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Majority of sectoral indices closed lower on Thursday. Mining and oil declined by 1.73% or 136.09 points to 7,693.57; holding firms dropped by 0.32% or 18.47 points to 5,621.79; industrials retreated by 0.18% or 17.10 points to 9,291.05; and property inched down by 0.03% or 0.78 point to 2,376.45.

Meanwhile, services rose by 1.68% or 35.11 points to 2,116.83 and financials climbed by 0.83% or 18.07 points to end at 2,175.61.

“International Container Terminal Services, Inc. was the top index gainer, climbing 3.37% to P399. Nickel Asia Corp. was the worst index performer, dropping 4.30% to P3.34,” Mr. Tantiangco said.

Decliners narrowly beat advancers, 97 versus 94, while 47 names closed unchanged. — Revin Mikhael D. Ochave

Peso ends lower on Trump 2.0 jitters

ANGIE REYES-PEXELS

THE PESO dropped against the dollar on the first trading day of 2025 as the market stayed cautious ahead of US President-elect Donald J. Trump’s return to the White House this month and amid a lack of fresh trading drivers.

The local unit closed at P57.91 per dollar on Thursday, weakening by 6.5 centavos from its P57.845 finish on Dec. 27, Bankers Association of the Philippines data showed.

The peso opened Monday’s session slightly weaker at P57.90 against the dollar. Its worst showing was at P58.04, while its intraday best was at P57.78 versus the greenback.

Dollars exchanged went down to $1.195 billion on Thursday from $1.52 billion on Friday.

Philippine financial markets were closed for holidays on Dec. 30, Dec. 31, and Jan. 1.

“The dollar-peso ended higher but the market traded mostly sideways due to lack of fresh catalysts following the holidays,” a trader said by phone.

The dollar was generally stronger amid concerns over Mr. Trump’s potentially inflationary policies, which could lead to a more hawkish US Federal Reserve, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Friday, the trader sees the peso moving between P57.70 and P58.10 per dollar, while Mr. Ricafort expects it to range from P57.80 to P58.

The US dollar wobbled at the start of 2025 trade on Thursday after a strong year of gains against most currencies, with the yen anchored near its lowest level in more than five months as investors ponder US interest rates staying higher for longer, Reuters reported.

The dollar index, which measures the US currency against six others, eased 0.2% to 108.32 on Thursday but remained close to the two-year high touched on Tuesday. The index rose 7% in 2024 as traders drastically cut back rate-cut expectations. — A.M.C. Sy with Reuters

Congress urged to pass new LANDBANK, DBP charters

BW FILE PHOTO

THE Department of Finance (DoF) said it is pushing for Congressional approval of the new charters of state-run banks Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP).

“To further strengthen the financial standing of state banks, the DoF is advocating for Congressional approval of amendments to the charters of LANDBANK and DBP,” it said in a statement on Thursday.

The DoF also said the changes will allow the banks to “access capital more efficiently, reducing their reliance on National Government support or dividend relief.”

House Bill No. 11230, which seeks to amend the DBP’s charter, was approved by the House banks panel in November 2019; proposals seeking to revise LANDBANK’s charter remain stuck in that committee.

The LANDBANK bills propose to increase its capitalization to P1 trillion from the current P200 billion.

Meanwhile, legislation on DBP’s new charter hurdled the Senate in September.

Senate Bill No. 2839 proposed to increase the bank’s authorized capital stock to P300 billion from P35 billion.

The International Monetary Fund (IMF) has called for the restoration of capital to the government banks after they contributed to the startup funding of the Maharlika Investment Corp. (MIC).

The IMF noted the importance of returning startup capital and exiting regulatory relief “as soon as possible.”

“While the establishment of the MIC can help address the country’s investment needs, it should not come at the cost of a resilient financial system, sound regulatory framework, and level playing field,” it said in a report.

LANDBANK and DBP had contributed P50 billion and P25 billion respectively to the sovereign wealth fund.

Asked for comment, Rafael D. Consing, president and chief executive officer (CEO) of MIC said: “I concur with them.”

“The reality, however, is that LANDBANK (capital ratios) actually meet the minimum regulatory requirements. But all the Philippine banks do,” Mr. Consing told BusinessWorld.

He said most banks are compliant with the 10% capital adequacy ratio (CAR) standard set by the Bank of International Settlements.

At the end of November, LANDBANK’s CAR remains at a healthy level of 16.42% while DBP is at 14.78%, the DoF said in the statement.

“The solid financial footing of LANDBANK and DBP reaffirms their indispensable role in advancing the nation’s progress,” Finance Secretary Ralph G. Recto said in the statement.

Mr. Recto said this enables the banks to “continuously adhere to prudent financial management practices, utilize their resources to support Filipinos and sectors such as infrastructure; agriculture; fisheries; micro, small and medium enterprises.

“Our robust financial health and consistent revenue growth empower us to fulfill our mandate, serving as a dependable partner in the National Government’s inclusive development agenda,” LANDBANK President and CEO Lynette V. Ortiz said in the statement.

Meanwhile, DBP President and CEO Michael O. de Jesus said its bank “remains financially strong and more than capable of supporting” the President’s 10-point economic agency while following its mandate and servicing clients and stakeholders. — Aubrey Rose A. Inosante

Medical coverage subsidy rules for gov’t employees approved

PIXABAY

THE Department of Budget and Management (DBM) has approved the guidelines and regulations governing a subsidy that will allow government employees to obtain their own health insurance coverage.

Circular No. 2024-6, which was first issued on Dec. 6, covers the grant of yearly medical allowances of up to P7,000 to civilian government personnel.

The allowances were authorized by Executive Order No. 64, issued on Aug. 2.

“Starting in 2025, they will be able to receive a medical allowance to help them obtain HMO (coverage) for their health-related expenses or costs,” Budget Secretary Amenah F. Pangandaman said in a statement on Thursday.

The subsidy will go towards paying for health maintenance organization (HMO)-type benefits, the DBM said.

It added that the subsidy applies to all civilian government personnel in National Government agencies, including state universities and colleges and government-owned and -controlled corporations not covered by Republic Act No. 10149 and Executive Order No. 150.

“The Medical Allowance may be granted in the form of HMO-type product coverage, which could be availed of by either government agencies concerned or their respective employees’ organizations/groups,” the DBM said.

The DBM said the subsidy can be issued in cash to those seeking to take on or renew HMO-type benefits and to those who paid for their own medical expenses, subject to conditions. — Aubrey Rose A. Inosante

BPOs tout AI early adoption efforts, back broader upskilling

WANGXINA-FREEPIK

THE IT & Business Process Association of the Philippines (IBPAP) called for comprehensive efforts to prepare the workforce in all industries for the opportunities and challenges of artificial intelligence (AI).

The Philippines, the world’s second-largest destination for IT and business process management (IT-BPM) services, is projected to end 2024 with $38 billion in revenue and 1.82 million employees, it said in a statement on Thursday.

It added that 67% of IBPAP member companies have integrated AI into their operations. This early adoption has enhanced productivity and elevated the industry’s value, positioning it as a model for navigating AI disruption.

However, IBPAP warned that broader workforce upskilling is essential to sustain this momentum and mitigate potential job losses in other industries.

“AI is not a distant challenge; it is a present reality reshaping industries and economies globally,” the association’s president and chief executive officer Jack Madrid said in a statement.

“The IT-BPM sector has shown that early adoption of AI can create opportunities. However, we must not stop there. The Philippines must act decisively to prepare the broader workforce, leveraging our leadership in IT-BPM as a blueprint for other industries.”

IBPAP is advocating for a nationwide focus on upskilling and educational reform.

It urged increased funding for AI-focused training programs and the integration of digital and AI-related skills into the national curriculum.

Strategic partnerships through collaboration with the Department of Education and the Technical Education and Skills Development Authority are expected to develop scalable training initiatives in data analytics, machine learning and cybersecurity, it said.

IBPAP rolled out the Philippine Skills Framework for Contact Center and Business Process Management to complement such efforts, aiming to upskill a million workers by 2028, it said.

Additionally, it is equipping industry leaders with tools to adopt AI responsibly and implement ethical workforce transition strategies. — Chloe Mari A. Hufana

Commercial EVs seen as niche PHL can develop via PUV modernization

PHILIPPINE STAR/WALTER BOLLOZOS

By Justine Irish D. Tabile, Reporter

THE PHILIPPINES can establish a niche for itself in commercial electric vehicle (EV) manufacturing as its entry point into the global EV supply chain, by enlarging the existing base market created by public utility vehicle (PUV) modernization, regulators and industry officials said.

“We still have not missed the boat of EV manufacturing since we are already on the boat,” Board of Investments (BoI) Industry Development Services Executive Director Ma. Corazon H. Dichosa told BusinessWorld in an interview. 

“Several electric PUV and three-wheeler assemblers are already here in the Philippines. There are companies assembling battery packs here, and our electronics manufacturing services companies are already supplying relevant electronics components for EVs,” she said.

She added that PUV modernization could serve as a jumping-off point for electric PUV (ePUV) assemblers.

“The production of electric commercial vehicles and ePUVs could pose a significant opportunity for our niche EV market considering the capabilities of our auto parts makers and our need to modernize and electrify our public transport system,” Ms. Dichosa said.

In a separate interview, Electric Vehicle Association of the Philippines (EVAP) Chairman Emeritus Ferdinand I. Raquelsantos told BusinessWorld that the Philippines is still in the EV game.

“Although we have been overtaken by others, I still believe if we can develop local production of commercial vehicles, not only can we supply the Philippine market but also export because nobody is making commercial vehicles in ASEAN,” he said, noting that China is the other current maker of commercial EVs.

“Everybody is focused on passenger cars, so we should focus on something that they are not in, such as Asian utility vehicles, whose chassis is (applicable to) delivery vans,” he added.

He said that the Philippines could continue investing in commercial vehicles as they can be used for public transport and be exported to serve logistics customers like delivery services, among others.

“Unfortunately, we still don’t see any original equipment manufacturers (OEMs) interested in locating in the Philippines for completely knocked down (CKD) assembly. In Thailand, by the end of this year, there will be 11 brands doing CKD assembly of EVs,” he said.

He said that among those that went to Thailand is China’s BYD, which the Philippines had been seeking to attract.

“For the last 2-3 years, the market has been favoring BYD. BYD is number one in EV sales worldwide when it comes to passenger cars, and it decided to go to Thailand. It was the first one, actually, to assemble CKDs in Thailand,” he said.

“Although our focus is actually on PUVs, we’re still working in that direction. Because of course, it would be nice if there would be a different brand principal that would do CKD assembly in the Philippines,” he added.

ADOPTION
According to Ms. Halili-Dichosa, EV adoption in the Philippines is expected to hit 5% by the end of the year, based on the projections of the Accelerating the Adoption and Scale-up of Electric Mobility for Low-Carbon City Development in the Philippines project.

“New EV sales in the Philippines totaled 11,584 units in 2023 and 10,001 units in the first half of 2024,” she said.

“This constitutes around 3% adoption vis-à-vis total vehicle sales in 2023 and 4.4% for the first half of 2024. It is expected that the adoption rate will increase to 5% by the end of the year,” she added.

She said adoption is increasing due to the influx of new vehicle releases and the closing of the price gap between EVs and internal combustion engine (ICE) vehicles.

“Currently, EVs are 20-40% more expensive on average compared to their ICE counterpart,” she added.

Asked what level of adoption would constitute critical mass for more assemblers to enter the market, she said that would depend on current and forecasted demand and on the development of the industry’s value chain.

“We currently have several EV manufacturers in the country, particularly focusing on ePUVs and electric tricycles. Based on consultations with various assemblers, a ballpark demand of around 1,000-2,000 units per year would be a viable business case for them,” she added.

In terms of local content, she said the Philippines can manufacture body shells, large plastic parts, chassis, wheels and tires, and vehicle electronics.

For EVs, she said the Philippines has the capacity to produce battery packs at St Baker Gigafactory and Greener Solar Power & Electric Motor, Inc. and EV charging stations through BTC Power.

“But we still need to pursue expanding this existing supply chain to enhance competitiveness in local manufacturing and assembly,” she said.

“Based on estimates, our auto parts industry can supply local content of between 20% and 60-70%, considering the potential value added from using locally assembled battery packs,” she added.

EVs are estimated to account for 2-3% of all vehicles registered with the Land Transportation Office in 2023, EVAP President Edmund A. Araga said.

“It is still far from (the adoption of) ICE vehicles, as not all Filipinos will switch immediately to EVs because they do not understand the full benefits of using EVs due to cost and charging infrastructure concerns,” Mr. Araga told BusinessWorld via Viber.

According to the Department of Energy (DoE), the Philippines had 833 EV charging points as of the end of November.

“This consists of 329 alternating current charging stations, 41 direct current charging stations, and 463 battery swapping stations,” according to Patrick T. Aquino, director at DoE’s Energy Utilization Management Bureau.

Mr. Raquelsantos said that one of the factors that makes other countries attractive for EV assembly investment is the clustering of parts makers.

“Obviously, in Thailand, they have a lot more local parts makers, so their supply chain is much better, much more complete. And because they have volume, the price of the parts is cheaper,” he said.

“Even CKD assembly is about P100,000 cheaper to produce in Thailand than in the Philippines. So those are the things that explain why foreign investors go to Thailand,” he added.

POLICY
Asked why he thinks such investments have been going to countries like Thailand, Mr. Raquelsantos said it is mainly due to better incentives and benefits.

“Here in the Philippines, a foreign company who will export or whatever has to lease property. In Thailand, it’s free. So right away, if you’re an investor, your cost goes down because the rent is free,” he said.

“And of course, in terms of bureaucracy in getting local permits and government permits, it’s much harder here than in other countries,” he added.

He said that although the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act is set to improve incentives enjoyed by registered business enterprises, it will not be enough compared to Thai offerings.

Representative Rufus B. Rodriguez has said that “CREATE MORE is a ‘one size fits all’ measure that may not address the concerns of the automotive industry.

He noted that the government should pass a bill that expands incentives on offer under the Comprehensive Automotive Resurgence Strategy (CARS) program to other manufacturers.

A bill aimed at increasing the incentives given to car manufacturers has been with the House Committee on Trade and Industry since September 2022.

Mr. Araga noted the incentive packages already available under the Electric Vehicle Industry Development Act and Comprehensive Roadmap for the EV Industry.

“But we are still hoping for some amendments in terms of zero tariffs under Executive Order (EO) 62,” he added.

On June 20, President Ferdinand R. Marcos, Jr. signed EO 62, which modified the nomenclature and rates of import duty on various products.

The EO covered the expansion of the reduced Most Favored Nation tariff rates of the products covered under EO 12 to other battery EVs, hybrid EVs (HEVs), plug-in hybrid EVs (PHEVs), and certain parts and components.

Aside from the 34 lines of EVs covered by EO 12, it also covered e-motorcycles, e-bicycles, nickel metal hydride accumulator batteries, e-tricycles and quadricycles, HEVs, and PHEV jeepneys or buses.

According to Ms. Halili-Dichosa, the BoI is also looking forward to the EV Incentive Strategy, which aims to provide more incentives similar to those that can be availed of under CARS.

“This program will provide incentives similar to those of the CARS Program and is aimed to encourage local EV and parts manufacturing,” she said.

“This program also aims to drive the growth of the sector by lowering the cost gap between ICEs and EVs, making the latter more attractive and cost-effective,” she added.

Launched by the Department of Trade and Industry, the EVIS aims to produce 4 million locally manufactured EVs, particularly two-wheelers, e-trikes, ePUVs, and eBuses, over the next 10 years.

Meanwhile, Mr. Aquino said that the government is also planning to issue other policies aimed at increasing the number of charging stations.

“The government will issue further policies to support EV charging station expansion with rules on dedicated parking slots and EV chargers in gasoline stations, among other issuances for public consultation next year,” he said.

OUTLOOK
Despite better incentives in other countries, Mr. Raquelsantos said that the Philippines could still attract EV assembly due to its demographics.

Because of the workforce’s English-language fluency, the Philippines has an advantage over Indonesia, Malaysia, Thailand, or Vietnam, he said.

“We have an abundance of skilled manpower in technical or information technology and software development. We have a lot of that manpower. So those are the things that would entice them,” he added.

Asked how the geopolitical situation and trade wars will affect the EV industry, Mr. Araga said the industry remains positive and it will continue to grow.

“We have other options in sourcing our supplies, like with our ASEAN neighbors who are very close to us,” he said.

He added that sourcing from neighboring countries is a reasonable strategy, as most of the car brands also source from ASEAN manufacturers.

“So we are optimistic that EVs will flourish as more and more people are now aware of the benefits of using EVs, and maybe in the next 2-3 years the ratio of the number of chargers to EV users will be similar to Thailand’s of about 15:1,” he said.

According to Mr. Aquino, the EV industry is expected to sustain its growth next year as pricing becomes more competitive.

“With the continued implementation of the import tariff suspension until 2028, the costs of EVs are becoming more accessible to the public, coupled with the increasing number of EV charging stations,” he added.

Ms. Halili-Dichosa said the future of the EVs in the Philippines is still hard to predict as the industry is still developing.

“But based on (the comprehensive EV roadmap), in the business-as-usual scenario, it is expected that EV adoption will hit at least 10% of the total fleet by 2040 for all sectors, excluding EV trucks,” she said.

“On the other hand, the clean energy scenario sets a more ambitious target with the mandated re-fleeting of at 50% of all fleets excluding the household sector with EVs by 2040,” she added.

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