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Doing Business: How did we actually do?

The Philippines celebrated a 29-place jump in its Doing Business score in the World Bank’s 2020 report, having raised the country’s ranking from 124 to 95.

Looking at the increase in terms of scores might not seem too impressive — having gained 1.9 percentage points — but it still certainly deserves to be commended.

Of course, it is also important to break down the jump in rank.

The Philippines continues to have the seventh-highest Doing Business rank across the ASEAN Region, following Indonesia at 73rd place. This is not to take away the government’s win in the Doing Business 2020 rankings — but instead to emphasize just how many more reforms we will need to be competitive.

OVERALL SCORE
When looking at the breakdown of the Doing Business score, it is notable that the greatest contributor to the jump is the area of Protecting Minority Investors. The Philippines increased its score there by 16 percentage points, and its ranking from 132 to 72 (a 60-place jump in rankings).

When it comes to the Getting Credit index, the Philippines increased its rank by 52 places, but has not actually increased in score. This change is most likely due to corrections arising from the government’s grievances regarding the methodology of the Doing Business 2019 report.

Other than those, the only other indexes that increased in score are Starting a Business (two percentage points increase) and Dealing with Construction Permits (1.4 percentage points increase).

Dealing with Construction Permits showed a rank increase from 94 to 85, but Starting a Business actually presented a five-place slide from 166 to 171.

The rest of the Doing Business indices (Registering Property, Getting Electricity, Trading Across Borders, Enforcing Contracts, and Resolving Insolvency) showed either no increase in scores or a minimal decrease.

PAYING TAXES
As a tax reform advocate and co-chair of the Ease of Doing Business Taskforce on Paying Taxes, I would like to focus on one index in particular — the Paying Taxes index. In the Doing Business 2019 report, the Philippines ranked 94th across the world, the 5th highest in the ASEAN region.

In 2020, the Philippines ranked 95th across the world and was the 5th highest in the ASEAN region. While the score itself actually increased, it was only by 0.4 percentage points and was clearly not enough for the Philippines to maintain its 2019 rank.

Taking a look at the Paying Taxes indicators would suggest points for improvement that could help in the next Doing Business report.

The four indicators of the Paying Taxes index are Number of Payments, Time to Comply, Total Tax and Contribution Rate, and the Post-Filing Index.

The Paying Taxes indicators showed an improved performance in the Number of Payments and the Time to Comply, but has showed no change in the Post-Filing Index and a negative change in the Total Tax and Contribution Rate.

The number of payments was reduced by one, the time to comply was lessened by 10 hours, while the total tax and contribution rate increased by 0.2 percent.

NEEDED DEVELOPMENTS
Again, to check the Philippines’ actual performance, it is important to contextualize.

In the ASEAN region, only Singapore, Indonesia, and Vietnam increased in their Paying Taxes ranking. The largest jump in the Paying Taxes index is Indonesia, jumping 31 places from 112 to 81 and overtaking the Philippines and Brunei. Vietnam jumped from rank 131 to 109 (22 places).

The Doing Business report notes that the most significant factor for Indonesia’s performance is its implementation of an online filing and payment system for major taxes. For Vietnam, the improved score can be attributed to upgrading the information technology infrastructure of their revenue collection agency.

These tech developments — and similar projects — are crucial in making tax compliance easier.

Commuting is made convenient by ride hailing apps, shopping is made convenient by online stores, and takeout is made convenient by online delivery services. Going by the same line of thought, paying taxes should be made convenient by tax tech developments.

This is one area where the Bureau of Internal Revenue (BIR) can learn more from. Yes, it has the systems in place, but are those systems accessible and convenient to use?

In contextualizing the Paying Taxes, we can also look at the East Asia and Pacific Averages for each individual indicator. For the Number of Payments and the Time to Comply, the Philippines’ performance is actually above average. The main indicator that it has a problem with is the Total Tax and Contribution Rate (TTCR).

The Philippines tax rate is 43.1%, while the East Asia and Pacific Average stands at 33.6%. In fact, the Philippines’ TTCR is higher than the rates collected by OECD High Income Countries which is 39.9%.

Of course, since the TTCR is measured as taxes paid as percent of profit, it might also suggest that the lower score of OECD High Income Countries mean they have higher profits. However, other data clearly shows that the Philippines has a high corporate tax rate (and has the highest rate among the ASEAN).

This is another area where the government needs to catch up. Lowering the corporate income tax rate is long overdue, and it keeps getting delayed.

If unburdening the taxpayers is not enough of a reason, then look at competitiveness. The Philippines’ overall rankings may have increased significantly, but what of the actual indicators that affect regular taxpayers and the smaller businesses?

Yes, Paying Taxes can be improved by making transactions swifter, removing unnecessary forms, and other administrative changes. But if the problems are the high tax rates and the lack of push toward a proper digital transformation of the BIR, then it will not be enough.

A genuine tax reform requires both legislative and administrative reforms.

For its digital push, the BIR recently launched its latest initiative, Hack-A-Tax — a hackathon event where concepts to develop the best tax software will compete. For this project, the BIR has partnered with USAID, the Asian Consulting Group (ACG), and DevCon Philippines.

Even in its advocacy as a social enterprise, ACG maximizes technology to improve the taxpayer’s experience — be it in teaching them about taxes or in helping them comply. On December, ACG plans to launch, as part of its Digital Transformation initiatives, the TaxWhizPH Mobile App and its very own Tax Whiz Channel.

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.

 

Raymond A. Abrea is a member of the MAP Tax Committee and one of the 2017 Outstanding Young Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and Founding President of the Asian Consulting Group (ACG) and the Center for Strategic Reforms of the Philippines (CSR Philippines).

consult@acg.ph.

map@map.org.ph

http://map.org.ph

Tourism, taxation and competition

The Philippines with 7,600+ islands and islets and 108 million population still has difficulty reaching $10 billion in tourism revenues, something that many of our neighbors in the region had attained nearly a decade ago (see Table 1).

During The Arangkada Philippines Project (TAPP) Conference last week, Nov. 21, at Marriott Grand Ballroom Manila, three policy reports were launched and discussed — on tourism, agribusiness, and power.

Among the data discussed in the tourism paper are milestones in the country’s airport development. I summarized and shortened the long table here, data gaps are indicated (see Table 2).

Seemingly lacking in our airport infrastructure is the development of budget terminals or low-cost carrier terminals (LCCTs). Japan has two (Kansai-Osaka and Narita Terminal 3), and these three tourism powerhouses in the ASEAN have one each: Singapore (Terminal 4), Malaysia (KLIA 2), and Thailand (Don Mueang). Not as glitzy as the regular terminals, these LCCTs are also modern yet charge lower for airlines and passengers and hence, further attracting more foreign visitors.

Another activity during the TAPP conference was a press conference with the heads of the Foreign Chambers of the Philippines composed of the chamber of commerce of the US, Canada, EU, Australia-New Zealand, Japan, and South Korea. Among the topics discussed was the Philippines’ taxation policy to attract more foreign direct investments (FDIs).

When the TRAIN (Tax Reform for Acceleration and Inclusion Act) law was enacted in 2017 and TRAIN 2 bill (renamed TRABAHO — Tax Reform for Attracting Better and Higher Quality Opportunities — bill) was filed in 2018, some 15 multinational companies with regional headquarters or regional operating headquarters in the country have left as the special taxes they enjoyed have been removed or to be removed. This was articulated by the Philippine Association of Multinational Companies Regional Headquarters Inc. Director Celeste Ilagan.

The unpopular TRABAHO bill was renamed CITIRA (Corporate Income Tax and Incentive Rationalization Act) bill this year and it still causes discomfort to many multinationals because the pace of reducing the corporate income tax (CIT) is long, from 30% to 20% in 10 years, while the removal of the gross income earned (GIE, 5%) and other fiscal incentives will be done in the first year of implementation. Indonesia plans to cut its CIT from the current 26% to 20% in two years.

So bottlenecks in airports and tourism and uncertainties in taxation, these two plus other factors contribute to low level of FDIs in the country. And I would add one more factor — some of our competition policies as implemented by the Philippine Competition Commission seem to be anti-multinationals.

Take the case of transport network vehicle services (TNVS). When US multinational Uber decided to leave the Philippines (and the ASEAN) in 2018, many factors contributed especially the heavy bureaucracies and penalties imposed by the Land Transportation Franchising and Regulatory Board. When Uber finally packed up in April 2018 and merged as minority investor in the remaining TNVS multinational, Grab, Uber was also fined by the PCC for hurrying the merger.

Recently, the PCC fined Grab P23.5 million for certain violations in its imposed requirements, including “overcharging” the passengers and acting as virtual monopolist.

This thing, “overcharging,” is a misnomer. If someone held a gun at people’s heads making them ride the costly TNVS, then that is clear overcharging and coercion. But people have many choices — jeepneys, buses, vans, regular taxis, new TNVS, Angkas motorcycle taxis. Thus, when people still choose the more costly TNVS, they do it for some other reasons like safety and comfort.

So that multi-million fine would ultimately be passed on to the public — directly via higher fare for exclusive rides, or indirectly via low fares but longer waiting time, more shared and indirect rides than exclusive direct rides.

When private enterprises create more jobs and provide goods and services to consumers, they are already doing a public service. Government should step back from more regulations and prohibitions, more taxation and intervention.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Rule of Law in Hong Kong, on enforcement

From our discussion last week (Nov. 18, www.bworldonline.com/rule-of-law-in-hong-kong), we continue with the law enforcement issues of the Hong Kong police.

The issues of the Hong Kong police are three. These are: the extent of the concept of maximum tolerance for civil protests versus violent actions, the number and randomness of the protests, and the lack of clarity in the rules of engagement.

The principle in protest action is that the citizenry are showing their dissatisfaction with the state and are exercising their right of assembly and of expression. They must be given the forum and the latitude for outbursts.

In the past and in many cases in various places, mass actions and demonstrations ended with firing at or into the people. In the 21st century and in one of the freest economies, most visited and well-known cities in the world that is Hong Kong, with global attention, it is understandable and expected that only the usual methods for crowd dispersal are employed, i.e. water cannons, tear gas, pepper spray that do not injure or kill.

If the protests are peaceful, done in public spaces, and do not disrupt (though it may inconvenience) the rest of the population, police can monitor and their presence made to deter disorderly conduct.

But if the protests do not meet the criteria, the police will have to, at the minimum, control the protestors and eventually disperse the crowd. In law enforcement, the gathering of a few to the many is a situation where emotions can run high and passions can translate to actions.

An act done by an individual in a group may lead to crime because there is anonymity in numbers. When one is not held to account for one’s action, it affords impunity. It also spreads to the others because of herd mentality — everyone is doing it.

The protesters in Hong Kong acted with violence. But because of the framework of maximum tolerance for the protests, the police came in too late to stop the damage to property initially, and the threat to the policemen and non-supportive groups eventually. These actions are criminal in nature and when their commission can be attributed, the rules of criminal justice clearly apply.

As Hong Kong is a city with a convenient infrastructure and highly mobile population, that the protests can happen anywhere and at any time adds to the randomness of numbers faced by the police. But the same analysis and conclusions follow from the smallest far-flung protests to the biggest and most central ones.

Recall the previous protests in Hong Kong tagged as the “umbrella movement” in 2014 that were peaceful. Police moved into the crowds when positions were taken up to “occupy” key areas of the city. In 2019, umbrellas are no longer symbolic, passive defense.

The police and government did not, could not, take stronger actions against the violent protestors. They were patient and know that over time, large protest actions are not sustainable. Weekly protests take their toll on the protestors — they are still people who need to eat, to work, and to live. Even with the escalating violence, there was no corresponding escalation in the type of force used by the police.

One reason violence escalates is because of collective frustration and the thinking that it will force action that is not achievable with peaceful means. This line of argument is within the “terrorist or freedom fighter” debate.

Finally, a predictable resort by the protestors was to occupy universities that are traditionally the grounds for dissent of the youth and for student action, familiar territory with the facilities and strategic locations for protests. This move may be the last as the number of protestors and the location and range of the protests are now determinable, their identities knowable to the police and to the families. The police can amass and win the numbers game with their organizational discipline and resources at hand.

The rules of engagement can be considered along the following lines. One is a determination of the legal age that protestors can join mass actions. Can children as young as 14 engage in the full range or are they vulnerable groups that need special care?

Two, this should lead to clarity in the acceptable forms and manners of protests versus any type of violence and their consequences. The default is that anything outside of the rules is allowed as long as the duty to do no harm is observed. Violence is offensive and self-defeating.

The third is to expand the political arena lest the police force bear the brunt of public dissatisfaction. But for this, it is another dialogue on another dimension of the rule of law.

Hong Kong voters offer glimmer for recovery

By Robyn Mak

HONG KONG — A small ray of hope has emanated from Hong Kong’s ballot boxes. Nearly 3 million voters, or 71% of those eligible, turned out to hand pro-democracy groups a big victory in the Chinese special administrative region. The outcome puts pressure on Chief Executive Carrie Lam to make some concessions. Even after six months of bumbling, she now has a chance to take steps that could help keep the calm and reverse an economic slump.

In most ways, the landslide is merely symbolic. District councils in Hong Kong typically focus on mundane neighborhood affairs ranging from noise pollution to transportation. Yet after six months of anti-government demonstrations, which have included violent standoffs between police and protesters nearly every week, Sunday’s elections were a test of public support for the movement. With votes still being tallied on Monday morning, pro-democracy candidates were on track to rout Beijing-friendly incumbents and sweep more than half the 452 seats up for grabs.

It is a strong rebuke against Lam, whose administration’s tin-eared response have fed widespread outrage. Her only concession, the formal withdrawal of her proposed extradition bill which triggered the unrest, came too late and only after demands from protesters broadened to include an independent investigation of the police force and extending the vote to include higher offices too.

Lam has been given a narrow window in which to act. Sunday’s elections were largely free of disruption, bringing a rare and welcome respite from petrol bombs and tear gas. Announcing a formal inquiry now into the conduct of law enforcement, for example, could appease some more moderate supporters of the movement.

Moreover, extending the calm would help the city start rebuilding from recession. Retail sales in September plunged by almost a fifth, the eighth consecutive month of decline from a year earlier. That same month, the number of tourists cratered by more than a third. Major events, from music festival Clockenflap to tech bash Rise, have been called off by organizers. Hong Kongers have spoken; it’s a question of whether Lam is ready to capitalize on the moment and listen.

 

REUTERS BREAKINGVIEWS

We could be approaching peak beef

By David Fickling

IF YOU WANT a picture of the future, imagine a human face biting into a burger — forever.

That’s certainly a popular view of the way the human diet is headed. As the world’s population grows and incomes rise, we’ll inevitably eat far more beef — the meat that’s considered the most expensive and prestigious in a remarkably wide range of cultures.

That’s a worrying prospect for the planet. Grazing and providing animal feed for cattle already accounts for about 60% of the world’s agricultural land despite the fact that beef provides just 2% of calories. Domesticated cows and buffalo produce about 5 billion tons of carbon-equivalent emissions each year, the same as roughly one-seventh of all fossil-fuel emissions. Western countries need to reduce beef consumption by about 90% to avert disastrous climate change, according to a report last year.

The good news is that cutting back this craving isn’t nearly as improbable as many think. Indeed, there’s ample evidence around that we may soon be approaching peak beef.

WHAT’S THE BEEF?
While production is still creeping up, the pace of growth has slowed markedly in recent years. The compound annual growth rate over the past decade was just 0.11%, based on data from the United Nations Food and Agriculture Organization. That’s the slowest rate since the decade to 2001, when the impact of bovine spongiform encephalopathy or “mad cow disease” dealt a severe blow to eating beef in Europe and elsewhere, and well below forecasts of a growth rate just shy of 1% a year over the coming decade.

Even in beef-loving America, appetites are changing. Thanks to decades of health warnings about red meat, chicken consumption overtook beef all the way back in the 1990s. Pork has been threatening to move ahead of beef for several years, too. While the population of the US has grown about 40% since the 1980s, beef consumption is up just 15%.

WHITE MEAT
The change is even more dramatic in other parts of the world. Beef production in Europe in 2017 was 26% below its peak level in 1991; in Russia, it had fallen 55% from a 1992 peak. Even the ranching cultures of the Americas appear to be losing their appetite for steak and chuck: Production in Canada and Argentina in 2017 had fallen 41% and 16% from peaks in the mid-2000s.

The wildcard in all this is the pace of consumption growth in emerging economies. If they converge on the levels seen in the Americas and Oceania, then we’re just in the foothills of the growth in beef consumption. But it’s an open question whether that’s going to be the case.

A MATTER OF TASTE
China, a country that once considered beef as exotic an ingredient as palm civet and water deer, has been the driver of that growth in recent decades. That process may already be all but played out, though. China’s per-capita beef consumption is already on a par with far richer Singapore and Taiwan, and is approaching the levels where Japan’s appetites topped out in the early 1990s; among affluent East Asian countries, only South Korea is still showing a rising trend of beef consumption.

China’s domestic beef industry appears to have long since hit capacity limits, with the inventory of cattle stable at around 100 million head to 108 million head for a decade. Imports have been supplementing that, a trend that may be accentuated by the decline in domestic pork production this year thanks to African swine fever. But a major shift to imports could be a challenge, given that outside of the wealthiest cities most beef is bought fresh from wet markets, rather than the frozen or chilled packaged meat that’s best-suited to international trade.

More to the point is the fact that China’s population peak is just over three years away. After that, the next wave of growth in the global middle-class will be found in India, where for religious reasons eating cows is even less likely to reach rich-country levels. Buffalo is another matter, and comprises about two-thirds of India’s bovine meat production — but that, too, has been caught up in often violent Hindu nationalist politics. Abattoirs in the country’s largest state were ordered to shut in 2017 because of fears among religious groups that cows as well as buffalo were being slaughtered. Taken together, India’s increase in beef and buffalo consumption over the past decade was smaller than that of Guatemala.

Indeed, it’s quite possible that the fastest growth in consumption over the coming decade comes not from the usual-suspect emerging markets in China and Southeast Asia, but from less-heralded regions like Central Asia, the Middle East, and Africa. That may not be enough to compensate if the largest markets in North America, Europe, Oceania and India continue to decline or post flat growth.

The world has had an almost unlimited appetite for beef in recent decades. It may soon be sated.

 

BLOOMBERG OPINION

Efficient cybersecurity for your business

Trends Managed ICT Services (MICTS) offers Managed Security Monitoring Services powered by McAfee

IT security is now regarded as one of the essential components in business operations. Establishments usually involve data on its operations, making it more necessary to keep data safe from cyberattacks like phishing, malware, and ransomware. As a result, heightened IT security increases trust in businesses, which consequently contributes to their credibility and sustains its profitability.

In fact, Microsoft, in the latest volume of its Security Intelligence Report, ranked the Philippines as the 8th most vulnerable country to malware across the Asia Pacific region. Furthermore, another software firm found the Philippines to be among the top 5 countries with the highest number of detected online threats.

These figures should already alarm businesses, regardless of the size, to utilize a viable means of securing data.

Yet, for small and medium businesses that might not be able to afford an internal cybersecurity team, they may turn to a more cost-efficient and invaluable security solution that could be outsourced — managed security service providers (MSSPs).

Aside from its notable advantages which include in-depth knowledge, efficiency, and reduced cost, getting an MSSP is a great way to accelerate a company’s journey to cloud technology.

Security software company McAfee, in its Cloud and Risk Adoption Report, found that when customers use a cybersecurity provider to get ahead of risk and fill core security gaps they encounter, they use more cloud and are more likely to experience benefits associated to business acceleration. The research also found that 87% of companies experience business acceleration from using cloud services.

 

With these advantages, MSSPs are a very helpful partner in ensuring transactions and processes involving data are secured.

Reliable service by McAfee

Businesses can avail of such services from Trends Managed ICT Services (MICTS), especially as it taps McAfee’s MSSP to enable its own Managed Security Monitoring Services.

The use cases of Trends MICTS are built over a Security Information and Event Management System (SIEM), the bedrock of the security monitoring services. This SIEM, also from McAfee, provides a holistic security compliance framework and gives the ability to detect malicious threats, monitor compliance, log collection for forensics and understand the holistic view of security.

A device-to-cloud cybersecurity company, McAfee creates enterprise and consumer solutions that make our world a safer place for the benefit of all. Its holistic, automated, and open security platform and cloud-first approach to building security solutions allow all products to coexist, communicate, and share threat intelligence with each other anywhere in the digital landscape.

Effective solutions from Trends MICTS

As McAfee’s platinum partner, Trends can provide top-of-line and highly customizable IT services and solutions to address your business needs.

Trends MICTS is a comprehensive and customizable service offering capable of addressing your security requirements to suit your business needs in a dynamic tech landscape. The service also uses a holistic approach that integrates each useful solution, which has better value compared to employing silos.

With Trends, businesses can avail of the following benefits: flexible service design and delivery; pay-as-you-go consumption; best-in-class technology; skilled and competent IT professionals; improved efficiency and security investments; faster response and reduced threat exposure; multi-tenancy management; world-class Network and Security Operations Center; and global technical expertise and threat intelligence.

Trends offers 24×7 proactive Security Monitoring Services coming from its round-the-clock Trends Operations Center (TOC). Trends’ Security Monitoring Services consist of use cases such as Advance Malware Defense Monitoring, Boundary Defense Monitoring, Asset Vulnerability Monitoring, Privilege Account Monitoring, and Sensitive Data Exfiltration Monitoring.

It also includes detection (analysis and investigation) and response which includes notification and recommendation on how to contain, eradicate, and recover from a security incident based on applicable use cases for your business.

To explore how you can outsource your cybersecurity essentials, click  https://bit.ly/2yFWanx.

How do startups know if it’s time to grow up?

Leading entrepreneurship magazines are filled with stories about how people started their businesses and quickly achieved success — turning their business from a hobby or a quick and dirty idea into an actual small company. From a being a chef to founding a food startup or from working in an office as a software developer to developing their own service, or from a young mother to an owner of an online store, people can dramatically transform their careers.

Transformation from individual entrepreneurship, which is often a hobby, to a real business, occurs so quickly that sometimes newly successful business leaders do not even have time to realize the gravity of their new status. I noticed this when talking with guys from our Innovation hub — Kaspersky’s dedicated department where we scout internal and external innovative startups. They see themselves as entrepreneurs, but not yet the users of full-fledged business services (for example, messaging, videoconferencing, collaboration cloud services and storage).

The line between the two states is indeed very thin. However, if new business leaders become aware of their new status, they can make their lives much easier, solving business problems faster and more effectively.

IKEA for business

Here is a very clear example of how this can be done. Let’s use the story of Wendy and Peter. Peter works as a cook, and in his free time, he experiments with healthy desserts and sells them through his Instagram account. Wendy works as a consultant in a large firm and dreams of exchanging the office routine for something more exciting. Once Peter and Wendy know they can rely on each other’s support, why not step into the wonderful unknown world of running their own small business? After thinking it over, they decided that their resources and skills are great for opening a small café with trendy healthy desserts and drinks in a busy city neighborhood. A new business captures their imagination and they feel like pioneers who have to go to accomplishing their goal.

The business plan was written, the documents were ready, the menu was drawn up, and the right space had been found. It was time to buy furniture, accessories and utensils to turn their new space into a lovely café, so they visit IKEA. They entered as new apartment owners, striving to fill their store with new products. After having thought through the design and choosing the right products on the retailer’s website, they go around the store for a long time with their trolley, picking up cups, spoons, chairs, plants. They wasted precious hours doing this, and for entrepreneurs who occasionally combine several jobs in one at the start of business, this lost time is extremely valuable.

The fact is that IKEA has a special service — IKEA Business, which works with companies and simplifies their purchasing tasks. Through this service, as a business owner, you can choose a finished interior or individual products, order delivery and installation, and even do it all on credit. A ritual passage through the IKEA exhibition halls is not necessary; everything can be done online, saving time and effort, which means money for new business. But neither Peter nor Wendy paid attention to this service, but chose a less effective, longer journey.

Cybersecurity for maturing businesses

All the characters in this story are fictional, and any chance that this has happened to real people is just a coincidence, but it illustrates the trend that we found among small businesses, including our customers that use consumer tools instead of special offers for business.

We interviewed nearly 700 companies with less than 50 employees around the world, and a quarter (25%) of them admitted that they use products for home use to protect their business from cyberthreats. This confirms what we see through our sales analytics as well — consumer IT security products are purchased by businesses, and the share of these sales is remarkable, it is not about several occasional cases per year. Basically, these are companies that consist of several people, some of which have just recently left individual entrepreneurship, and some have had their business for some time already, with a staff of three to ten employees.

Perhaps this option seems easier, cheaper and faster for them. It is likely that they do not have full-time IT specialists, they do not need to set up special policies, analyze threat events or manage hundreds of devices. They just need to ‘set and forget’ their IT security for reasonable money. And it seems that a home-based product for family protection provides all they need.

What is wrong with consumer protection

Security tailored for consumers is a great thing and it is possible to use it for business protection. It is possible to protect several devices with one license including PCs and mobile devices. However, it still lacks some features and can’t meet all business demands, even for small companies.

What if a company has not five but 20 employees or the business is growing very fast and the number of employees is constantly increasing? Then it suddenly needs several licenses of consumer product but a person who manages protection won’t be able to manage all devices together. The business will not have the visibility it needs across all devices and the status of their protection. In addition, consumer products cannot be used for server protection, so file servers where a company normally stores all business data will not be safe.

Changing mindsets

The use of inappropriate services and products, is not necessarily fatal for businesses, and even cybersecurity is not an exception. The key takeaway from this story is the idea that companies should realize they are actually businesses.

This means they need to consider everything from a point of view that benefits the company and ensures efficiencies. Companies must find optimal solutions to solving problems —whether it’s buying furniture for a restaurant or managing the logistics of order deliveries from a store in Tokyo to Copenhagen. These small steps into a big business will not harm progress, but, most likely, will help to save money and time. Moreover, a properly organized cyber defense will help secure all these effective business processes and the results of entrepreneurial work.

Canva looks to double workforce

THE local headquarters of graphic design company Canva is looking at doubling their workforce, especially their design and operations team, by 2020 as the country continues to be “design hub” for the company.

“Ninety-nine percent of the over 50,000 templates available on Canva is made in the Philippines,” Yani Hornilla-Donato, Canva PH country manager, said during the launch of their first Christmas campaign on Nov. 18 at their offices in Makati City.

From their 220 employees, Ms. Hornilla-Donato expects it will “double” by 2020 though she said they may reach it before long as “historically there’s a 20% increase in workforce by the end of the year.”

The company is looking for more designers especially with the introduction of their Canva for Enterprise tier and more customer service representatives because of the service’s growing number of users which Ms. Hornilla-Donato pegged at “over 20 million monthly active users.”

“When we launched [the enterprise package] one of the things that makes enterprise stand out is that we have a template service where we have dedicated designer to recreate the client’s existing templates,” she said.

The enterprise package was launched in October and is priced at $30 per team member per month for a team with a minimum of five members. No localized pricing is available for the Philippines just yet though Ms. Hornilla-Donato said they will introduce it soon.

As a freemium app, users can use Canva for free though more storage and a bigger selection on templates, stock photos, and fonts can be accessed for P505/month.

In 2020, aside from growing their design and customer service team, she said that they will be focusing on “increasing brand awareness in the Philippines.”

And that’s where its Christmas promotion comes in as Canva PH recently launched “Canva Pasko,” a design competition where five weekly winners will have their works on a billboard along the Guadalupe northbound part of EDSA.

“For times when words arent’s enough, we’re encouraging every Filipino…to mark the occasion with a very special tribute — design a beautiful card on Canva for free for a chance to see it displayed on a huge billboard in EDSA. Sitting in traffic has never been so meaningful,” Ms. Hornilla-Donato said in a release.

The campaign, open to Filipinos 13 years and above, runs until Dec. 18. Five entries per week starting Dec. 2 will see their Christmas cards on the digital billboard.

To enter, one must visit the contest homepage (www.canva.com/canvapasko) and register for a free Canva account to design the entry using pre-made Instagram portrait templates. Entries must be submitted on the website and register their contact details through the link provided. Entrants may also post their submissions on the Canva PH Facebook and Instagram accounts and include a caption about the entry.

To date, Ms. Hornilla-Donato said they have received over 300 entries which is more than the company’s projection.

PHL firms eye ASEAN’s last frontiers

By Denise A. Valdez
Reporter

PHILIPPINE conglomerates are watching out for opportunities in less developed but fast-growing Association of Southeast Asian Nations (ASEAN) members, drawn by the “unique needs” of these markets.

Gross domestic product growth projections of the Asian Development Bank, International Monetary Fund, the World Bank and the ASEAN+3 Macroeconomic Research Office for Cambodia, Laos and Myanmar have constantly rivaled or outdone those of the Philippines and Vietnam to lead the rest of ASEAN and much of Asia, while Myanmar — since February — has led Southeast Asian countries tracked by IHS Markit’s Purchasing Managers’ Index, dislodging the Philippines and Vietnam from the region’s helm in terms of manufacturing.

Following Ayala Corp.’s announcement of its $237.5-million investment in Myanmar’s Yoma Group two weeks ago, Aboitiz Equity Ventures (AEV), SM Prime Holdings, Inc. and Metro Pacific Tollways Corp. (MPTC) said they too have been on the lookout for opportunities in smaller but fast-expanding economies.

“We see the potential to add value in developing markets with unique needs,” AEV Chief Financial Officer Manuel O. Lozano said in an e-mail on Sunday.

AEV’s expertise in renewable energy, feeds and farms make it well-positioned to meet the needs of less developed countries like Myanmar where it can “build on these strengths” and “integrate towards the consumer such as moving from feeds to farms.”

“For power, we are exploring renewable energy opportunities in Vietnam, Indonesia and Myanmar,” Mr. Lozano said.

“We are interested in opportunities where we can participate in decision-making and operations.”

It is set to finish its acquisition of Vietnam’s Mekong Wind Pte. Ltd. by the end of 2019 and is doing a feasibility study with Indonesia’s SN Power & Energi Infranusantara for a potential 127-megawatt hydro project in Central Sulawesi.

For SM Prime, the property arm of the Sy family’s SM Investments Corp., Myanmar and Cambodia have been in its sights since 2017. Chief Financial Officer John Nai Peng C. Ong said in an e-mail on Tuesday last week that the company remains “open to opportunities coming from overseas projects.”

“We look for potential partners in the country that we want to invest and would make the project worthwhile. This way, the potential return on investments will be higher than the returns we generate in the Philippines… We go beyond being a passive investor as this is how we operate in the Philippines,” Mr. Ong said.

But for MPTC, the tollways unit of Metro Pacific Investments Corp. (MPIC), expansion in less developed emerging markets may not come anytime soon.

“Early this year, we looked at a toll road opportunity in Myanmar. However, after review of the terms, we felt that Myanmar is not yet ripe for us,” MPTC President Rodrigo E. Franco said in an e-mail on Saturday.

“We thought that the risks, resulting mainly from the country’s lack of PPP (public-private partnership) experience, are too much for us… The country needs to build its PPP credentials first in more manageable sectors like power generation.”

Mr. Franco said earlier this year that MPTC was looking at Myanmar and Laos as part of its pan-ASEAN strategy. Aside from the Philippines, it also has footprint in Indonesia, Thailand and Vietnam.

Despite being held back by concerns on PPP experience, Mr. Franco said less developed emerging markets remain promising. “A developer will have the opportunity to pursue high-impact projects that will significantly contribute to the economic development of the country. Returns to be generated will be appropriate to the level of risks being taken,” he said.

MPIC is one of three Philippine units of Hong Kong-based First Pacific Company Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

PNB Securities, Inc. President Manuel Antonio G. Lisbona said the attractiveness of less developed economies is rooted in the needs of these countries for the products and services of Philippine conglomerates. “As a whole, less-developed economies have more room to grow and the governments of these countries are more liberal since they want to attract investors to set up shop there,” he said in a text message on Friday.

At the same time, risks of investing in these countries cannot be ignored, Mr. Lisbona said, citing “differences in culture and norms, legal systems… likely not as good, political instability and fiscal position.”

Still, Managing Director Paolo Maximo F. Borromeo, who heads international strategy and development for Ayala, said the conglomerate is bullish on its latest foray.

“Myanmar is an under-penetrated emerging market in ASEAN with a promising growth story on the back of the government’s broad liberalization initiatives and its unique geographic location… [W]e believe it has many similar trends as the Philippines, particularly in terms of growing consumer demand and a young population,” he said in an e-mail on Thursday.

“We will remain open to forging other similar investments in the region with the right strategic partners, but will be very deliberate and selective in our approach.”

Philippine-US FTA could come ‘as late as 2021’ — AmCham exec

MANILA and Washington could forge a free trade agreement (FTA) within two years amid delays in talks, an officer of the American Chamber of Commerce of the Philippines (AmCham) said late last week.

The Philippine Trade department had said in November 2018 that talks on the FTA’s scope could start this year.

But AmCham Executive Director Ebb Hinchliffe told reporters on Thursday that Washington is not likely to consider new agreements while its trade deals with Mexico and Canada await approval by US lawmakers.

At the same time, he said: “I would confidently state there will be free trade agreement between the US and the Philippines coming. I hope it would be some time in 2020, but it could be as late as 2021.”

“When they start the negotiations, it will take a couple of years. But the trade agreement between the US and the Philippines will not take a long time. We are common partners, we know each other very well, we know our needs and wants very well… once these trade agreement talks begin, it should not take a very long time.”

Mr. Hinchliffe added that free trade agreements are not a popular topic during an election year, but “basic agreements can get started” in 2020.

The US will hold its presidential elections in November 2020.

“AmCham will continue to push this. We believe strongly it will be a big advantage to have a free trade agreement, so we’re excited to do that,” he said. — J. P. Ibañez

PSALM to reduce floor price for Malaya thermal plant after failed tender

ANOTHER ATTEMPT of state-led Power Sector Assets and Liabilities Management Corp. (PSALM) to sell the 650-megawatt (MW) Malaya thermal power plant failed anew as most of the pre-qualified bidders backed off and a lone bidder submitted an offer below the floor price, the agency said.

“PSALM will report to its Board of Directors the outcome of today’s bidding so that it can take the necessary steps to lower the MBP (minimum bid price),” it said in a statement on Friday after going through the auction process. “The next round of bidding for the Malaya plant will commence at the soonest possible time.”

PSALM, the company formed by law to privatize state-owned energy assets, said the four entities that were prequalified to bid for the power plant and the underlying land in Pililla, Rizal all backed out even after passing the initial stage of the bidding.

“However, right before the deadline for submission of the financial bid at 12 noon today (Friday), Fort Pilar Energy, Inc., Panasia Energy, Inc., and AC Energy Philippines, Inc. sent letters to PSALM saying essentially that they cannot meet the minimum bid price (MBP) of P4,481,796,017,” PSALM said.

The agency said one other bidder, D.M. Wenceslao and Associates, Inc., submitted a sealed bid.

“PSALM declared a failure of the second round of public bidding because there was only one bid,” it said.

It added that pursuant to the bidding rules, the agency then proceeded to go through the process of a negotiated sale with D.M. Wenceslao.

“Nonetheless, when PSALM opened the lone bid from D.M. Wenceslao, it was below the MBP. Thus, PSALM was constrained to also declare a failure of the negotiated sale process.”

The plant remains operational and being dispatched as a “must-run” unit. A must-run plant is compelled to run and provide the needed power supply as deemed necessary to ensure reliability of power supply in the Luzon grid, especially in times of supply shortfall, system security and voltage support.

Based on the directive from the Department of Energy, once the plant is privatized on an “as is where is basis,” it would no longer be required to be a must-run unit. — Victor V. Saulon

Which subgroups have the most productive and well-compensated employees?

Which subgroups have the most productive and well-compensated employees?

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