This is the speech I delivered in the ECOP National Conference of Employers on 3 August 2020.
After 10 years of sustained and impressive economic growth, the Philippines started 2020 with a first quarter contraction in economic performance as the initial effects of the pandemic began to manifest itself in March.
The full impact of COVID-19 became prominent from the second quarter onwards and today, this pandemic has crippled not only our economy, but likewise the world economy as it infected more than 17 million and caused 700 thousand deaths worldwide. It has afflicted more than 100 thousand Filipinos with about two thousand fatalities as I speak to you this afternoon.
The IATF claims it could have been worse if it did not impose the world’s harshest and longest lockdown of 75 ECQ and countless GCQ days, particularly in the National Capital Region and CALABARZON regions, which together account for 53 percent of the country’s Gross Domestic Product.
It cannot be argued that saving human lives is paramount and the militaristic community quarantine was deemed necessary. But equally important is saving livelihood because human life and economic life are not mutually exclusive. As BSP Governor Ben Diokno posted on Viber: “The political leadership and the economic managers should focus on saving lives, saving livelihoods, and saving jobs. Let us first survive.”
He continued, “Let’s forget fiscal sustainability (at this time) and borrow what we need at 0.06 percent for 40 years. We can pay that. I assure you!”
Other countries like South Korea, Sweden, Japan and others were initially shocked by the unprecedented spread of COVID-19. But even without the much-awaited vaccine, these countries kept their economies open with fewer fatalities from the virus by following the same strict health protocols which the IATF has prescribed.
We have a workforce of 45 million with a 5 percent unemployment rate before COVID-19. Today, we have reached a historical high unemployment rate of 17.7 percent or almost 8 million jobless workers, 52 percent shuttered businesses, raising public debt to P9.03 trillion as of end of June, growing social unrest from rising poverty and hunger, worsening negative GDP, and dampened spirit of many entrepreneurs who are hesitant to restart or afraid to continue business operations due to economic uncertainties from the threats of another lockdown and the lingering induced fear of infection.
As pessimistic as the picture maybe and even fatalistic with our doctors and nurses seemingly capitulating under COVID’s relentless siege, this is not the time to feel helpless and hopeless. We must not give up the fight. Remember, the night is darkest before dawn!
I am confident that after centuries of crises such as 300 years of subjugation by Spain, 50 years of colonization by America, 5 years of occupation by Japan, 25 yearly destructive typhoons, major volcanic eruptions and earthquakes, global economic depressions of the 30s, a decade under martial rule by a local dictator, the Asian currency crisis of 1997, and the subprime financial crisis of 2008, COVID-19 is just one more tragedy that we will overcome.
For sure, life and work as we know them have changed into a new normal, significantly different from the ones we used to know. But we will adapt and move on. As Robert Frost said, “Life goes on” and together we shall heal as one nation because these centuries of hardships I mentioned have made us resilient, patient, and persistent.
To facilitate and advance the transition to the new normal, ECOP is holding this yearly National Conference of Employers or NCE in virtual format.
During these times of uncertainty and volatility, our theme for the conference is, “21st Century Employers: Digital, Agile and Resilient.” ECOP recognizes the immediate need to mount a quick and effective response to the crisis facing us now before it completely overwhelms us, and one critical enabler in this endeavor is digital technology. We need to examine our current business models, organizational structures, and processes and evaluate their relevance in the midst of changing economic and social environment. Finally, with crucial challenges on liquidity and solvency we must be resolute in our drive to move our businesses forward and upward.
To these ends, we have invited resource speakers in the next five days to present and discuss with you their views, and suggested roadmaps towards economic recovery during and after the pandemic. Salient topics like automation and digital technology and their roles in the transformation of work particularly in the advent of the 5th Industrial Revolution, where the war on human talent and artificial intelligence will bring a fusion of man and machine in the workplace. They will also talk about skills development, the future of work given the new realities, business flexibility, and testimonials on best practices, to mention a few.
In closing, I wish all of you 21st century employers a most instructive and productive conference.
That light may heal the nation in this darkest hour
Tokyo trade halted for day after glitch
Trade on Tokyo’s stock exchanges was halted for the whole day Thursday after a technical glitch forced activity to be suspended before the market opened.
“TSE (Tokyo Stock Exchange) has decided to halt all listed stocks for all of today. When trade will resume has not yet been decided,” operator Japan Exchange Group said in a statement.
France to test ‘flying taxis’ from next year
“Flying taxis” will start taking off from an aerodrome north of Paris as soon as next June, operators said, in a trial ahead of a vast tourist influx for the 2024 Olympics.
The experiment will take place at the Pontoise-Cormeilles-en-Vexin aerodrome some 90 minutes northwest of the capital by car, according to a joint announcement by the Ile-de-France region, airports operator Groupe ADP and the RATP public transport agency.
A drone-like, fully-electric vertical take-off and landing vehicle (VTOL) dubbed VoloCity, produced by German company Volocopter, was chosen for the innovative trial with flying taxis in a peri-urban area, they said.
The partners said in a statement they had “decided to bring together all the conditions to make the emergence of this new mode of transport possible to complement the existing modes, whether for the public or for goods.
“Furthermore, the prospect of the 2024 Olympic and Paralympic Games provides an exceptional opportunity to involve an entire industry in order to make Paris Region a leader in the global market of urban air mobility.”
The experiment will depend on the approval of residents, security protocols and air traffic regulations, said the companies.
In the first half of 2021, arrangements will be made for parking areas, recharging stations and ground markings for the demonstration.
Working with aviation safety agencies, the partners said “parking, takeoff and landing operations as well as operations around the vehicle, whether maintenance or electrical recharging, will be tested in a real aeronautical environment in June 2021.”
VoloCity is equipped with 18 rotors and nine battery packs. Each can carry two passengers with hand luggage, for a maximum payload of 200 kilogrammes (440 pounds).
It flies at 110 kilometers per hour, at an altitude of 400 to 500 meters (1,312-1,640 feet), with a range of 35 kilometers (22 miles).
Volocopter executive Fabien Nestmann said the craft’s makers hoped for full certification from the European Union Aviation Safety Agency within two to three years.
“We want a demo for the 2024 Olympic Games,” Valerie Pecresse, president of the Ile-de-France region, added at the launch news conference.
But it could take a decade for the project to be rolled out at scale.
“The day that you can buy a ticket (for a flying taxi) on the internet and take one, is more towards 2030, RATP CEO Catherine Guillouard told journalists.
In the long term, “we will be able to integrate mini take-off and landing zones into the urban fabric, which will require (public) acceptance, and the issue of noise will be key,” she added.
In the quest to limit traffic pollution and ease congestion, the idea of flying taxis has taken route worldwide.
Volocopter has already tested its airborne taxi in different parts of the world, and last October chose Singapore for the first test in the heart of a city.
Several other companies are working on similar projects, including Boeing, Airbus, Toyota and Hyundai.
Earlier this month, Japanese firm SkyDrive showed its eight-propeller, manned compact vehicle flying around a test field.
Secretive Big Data firm Palantir makes low-key stocks debut
Data analytics firm Palantir, which has drawn fire over its law enforcement and national security work, made a low-key debut Wednesday on Wall Street at a hefty valuation of more than $20 billion.
Palantir, whose name comes from the mystical, all-powerful seeing stone in “Lord of the Rings,” opted for a direct listing which raises no new cash but allows its shares to be traded publicly.
The debut came without fanfare, as the trade opened with no splashy bell-ringing event for Palantir, using the symbol PLTR, at the New York Stock Exchange.
The shares opened in early afternoon at $10, representing a market value of some $21.7 billion — close to its valuation by private investors.
After some swings higher, Palantir ended at $9.50, making its value slightly above $20 billion.
The company, created in Silicon Valley and recently relocated to Denver, has argued that its tech platform helps catch terrorists and keep people safe.
But some activists argue that Palantir’s technology — which scoops up financial records, social media posts, call records and internet records — enables unprecedented opportunities for mass surveillance with little oversight on privacy and fundamental rights.
Amnesty International said in a report this week that Palantir’s contracts with US authorities to target asylum seekers “raise serious questions about the company’s actions to uphold its responsibility to respect human rights.”
The report said Palantir “has a responsibility to avoid causing or contributing to human rights abuses, and to address human rights impacts in which they are involved” under United Nations guidelines.
Responding to the Amnesty report, Palantir said it has no contracts with US Customs and Border Protection and claimed it was the subject of “misreporting and conflation” of its activities.
In its prospectus, Palantir said it offers software to defense and intelligence agencies “whose missions are to keep us safe,” while adding that it steers clear of data tracking used by other large technology firms.
“Our software is used to target terrorists and to keep soldiers safe,” the company said. “We have chosen sides, and we know that our partners value our commitment.”
Founded in 2003 in response to the September 11, 2001 terror attacks, Palantir got initial funding from a CIA venture-capital unit.
Its predictive analytics reportedly helped the US military locate Osama bin Laden and track weapons movements in the Middle East.
Its platform has also been used in the controversial practice of “predictive policing” to help law enforcement, detect medical insurance fraud and fight the coronavirus pandemic.
While Palantir’s data practices and algorithms are secret, the company claims it follows a roadmap which is, if anything, more ethical than its tech sector rivals.
It moved its headquarters to Denver this year, partly in an effort to set itself apart from its Silicon Valley rivals.
“From the start, we have repeatedly turned down opportunities to sell, collect or mine data,” it said.
One source of controversy for Palantir is co-founder and large shareholder Peter Thiel, an early Facebook investor and one of the rare tech executives who backed Donald Trump’s campaign in 2016.
Chief executive Alex Karp, a self-described socialist, has brushed aside criticism of the company, saying technology firms should not be in charge of public policy.
The listing will lead to fresh scrutiny for Palantir, which posted a loss of $580 million last year on revenue of $743 million.
One question for investors is an unorthodox governance system.
Independent technology analyst Richard Windsor says the company will have “a voting structure that overwhelmingly favous its founders, ensuring that public investors are at great risk of paying the economic price of bad decisions over which they have no say.”
Palantir’s Class B shares held by founders will have 10 votes to one for the Class A stock along with a new category with variable voting power.
“This result is that until all of the founders have died, the remaining founders will have complete control of this company and other shareholders will have none,” Windsor said on his Radio Free Mobile blog.
DD ready for bounce
The economy went down as everyone faced an unfamiliar enemy — an unseen and highly contagious virus that has no known medicine or vaccine up to now.
DoubleDragon Properties Corp. (DD) expects to grow by multiple folds in the years to come despite the effects brought by the coronavirus disease (COVID-19) pandemic.
While DD chairman Edgar “Injap” Sia II, during the Annual Shareholders Meeting yesterday, admitted that there is no denying that everyone was hit by the COVID-19 pandemic, he stood firm that DoubleDragon, with its portfolio, will be resilient during the pandemic.
“The economy went down as everyone faced an unfamiliar enemy — an unseen and highly contagious virus that has no known medicine or vaccine up to now. A global crisis ensued, something we’ve never seen before — where all nations are facing the same problem, all at the same time,” he said.
But as time passed by, DD has been naturally forced to adjust and find a workaround, to live with the invisible enemy.
“Given the great extent of the destruction of this pandemic, the magnitude is enough to make permanent behavioral changes in all of us. And it made us think of our future as well,” he pointed out.
He said the DD team was able to lay down foundations, in advance, on the resilient areas within the real estate industry that is not totally immune, but is expected to remain highly relevant in going forward.
“The total equity value of the company is very important as the net value of DoubleDragon will be generally based on its Total Equity value,” Sia said.
During the past six years, the total equity of DoubleDragon grew from just P589 million to P47.86 billion.
“If that equity growth was possible in the past six years, we believe that the overall strategic goal for DoubleDragon to be able to grow its total equity from P47.86 billion to increase to P120 billion by 2030 is possible,” he said.
The P120-billion total equity goal will be enabled by an accumulation of net income, and from multiple tranches of REIT listings of its leasable portfolio, he added.
Beat virus odds
“We did not foresee these to happen, actually we just got lucky, and we are grateful,” he said, stressing that at any moment the economy is ready to bounce and jump up, DD is just as ready as well,” he said.
The DoubleDragon team continues to work and navigate through this unprecedented journey, making the management team to be on top of the situation.
“My desire to see DoubleDragon grow multiple folds in the years to come is profound and absolute,” Sia stressed.
He likewise said that most tenants of CityMall community centers in the provincial areas are essential and played a vital role in providing basic necessities and services to the communities they serve.
Phoenix focuses on tillers, fishers
We recognize the challenges that this crisis has brought upon Filipinos, including those in the agriculture sector.
Homegrown oil company Phoenix Petroleum is extending help to farmers and fisherfolk through a deal with the Department of Agriculture (da) and the Department of Energy (DoE) that allows vendors to market their produce in Phoenix gas stations.
With various initiatives especially organized for the beneficiaries, the project aims to soften the negative impact of the COVID-19 pandemic to the country’s agriculture sector.
“Due to the COVID-19 pandemic and the subsequent quarantine measures imposed in different cities nationwide, distribution of agricultural goods has been affected, leaving farmers and fishermen with limited livelihood opportunities. We recognize the challenges that this crisis has brought upon Filipinos, including those in the agriculture sector,” Phoenix Petroleum general manager for retail sales Eric Inocencio said.
Phoenix offers various means in helping Filipinos by employing a multi-pronged approach. Targeting nearby residents as potential customers, Phoenix has provided spaces among retail stations in South and Central Luzon where farmers and fisherfolk may sell agricultural products such as fruits and vegetables from 6 am to 2 pm daily up to 31 December 2020.
The sellers are required to observe safety by practicing social distancing and wearing masks and face shields and are limited to their designated areas for proper traffic management.
DoE Secretary Alfonso Cusi recognized the huge contribution of oil companies during the crisis period.
“We are aware that the downstream oil sector was badly hit during the pandemic. Despite this, the oil companies immediately provided assistance to frontliners and now to farmers and fisherfolk, who have also been badly affected by the crisis. The strength of the Filipino spirit never fails to shine through in the face of adversity,” he emphasized.
“We are glad to come together with the DoE and DA and provide opportunities to those in need even during this challenging period. With this initiative, we will be able to help farmers and fisherfolk by giving them a new channel to offer their products and additional support that will alleviate their fuel expenses, and ultimately help soften the blow of the pandemic to their livelihood,“ Phoenix senior vice president Raymond Zorrilla said.
SMC kicks off free training
This will change the lives of Bulacan residents even beyond the pandemic.
Ahead of the construction of its P734-billion Manila International Airport (MIA) in Bulakan, Bulacan, San Miguel Corporation (SMC), in partnership with Technical Education Skills and Development Authority (TESDA), launched its free livelihood and skills training program for local residents.
According to SMC president and chief operating officer Ramon S. Ang, the massive training program, which is open for all Bulacan residents, is part of SMC’s job creation initiative to help Filipinos adapt to changing demands and benefit from opportunities that will emerge with the construction of the airport project in Bulacan.
“This airport project will be a game-changer, not only in terms of its effect on the economy of Bulacan and the entire Philippines. More important, this will change the lives of Bulacan residents even beyond the pandemic. These courses are for free and open to all residents of Bulacan who are willing to learn,” Ang said.
The initial batch consisting of 60 participants will undergo 20 days of training in their chosen courses and three days of entrepreneurship guidance.
SMC foots bill
SMC will shoulder the tuition, assessment, trainors’ honoraria, meals, insurance, including transportation allowance of the initial participants who are all former Barangay Taliptip residents.
After completing the training courses, those who will opt for self-employment and set up their own business will be provided with toolkits like welding machines, sewing machines and other equipment.
“By helping them develop new skills, we equip communities with the means to become resilient to rapid changes and future needs and empower them to be able to transform their lives for the better. We also want to make sure that the benefits of this project are shared equitably among our kababayans,” Ang said.
Courses include shielded metal arc welding, electrical installation and maintenance, and heavy equipment operations, while courses such as dressmaking and cookery are also offered for residents who want to be self-employed.
“We are inviting everyone to learn any of the TESDA courses being offered so they can be prepared for present and future opportunities. After our initial batch of 60 individuals, we will immediately expand the program to include all residents of Bulacan, subject to government health protocols that include wearing of protective equipment and physical distancing,” he said.
Ecozone near airport
The Bulacan Airport City Economic Zone located near the new MIA is also expected to attract business locators that will provide employment to local residents and boost local government revenues.
Ang thanked TESDA officials led by secretary general Isidro Lapena who attended the launch to show their support at the TESDA Regional Training Center Central Luzon held in Tabang, Guiguinto, Bulacan.
“We are also paying tribute to the Bulacan local officials, led by Bulacan governor Fernando and Bulakan municipal mayor Vergel Meneses for giving their full support to this project and showing malasakit. They were instrumental in relaying to us the concerns of their constituents and helping find ways to be more responsive to the needs of their people,” Ang said.
The airport project will likewise benefit residents of Central Luzon provinces as well as the overseas Filipino workers who had to return to the country due to uncertain global economic conditions.
The MIA project, which is capable of handling up to 100 million passengers per year, is expected to create about 30 million tourism-related jobs, and generate more than a million direct jobs for host province Bulacan and nearby areas.
FCDU loans down 1.7% in quarter
The slowdown in FCDU lending may be due to lower customer inventory financing needs and working capital requirements as the ongoing health crisis continued to constrain domestic economic activity.
Dollar-denominated loans approved by the country’s foreign currency deposit units or FCDU posted a slight decline in the second quarter 2020, with bulk of the portfolio being held by residents.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said that FCDU loans as of end-June 2020 stood at $18 billion, a 1.7 percent decrease from the registered $18.3 billion quarter-ago.
“The slowdown in FCDU lending may be due to lower customer inventory financing needs and working capital requirements as the ongoing health crisis continued to constrain domestic economic activity,” Diokno said.
On a year-on-year basis meanwhile, the latest FCDU figure reflected a 2.8 percent expansion from the end-June 2019 level of $17.5 billion.
Local borrowers took the lion’s share of the overall stock for the quarter, reaching 64.3 percent while the remaining 35.7 percent were booked by non-residents.
Long term loans dominate
Loans that are set to mature in more than a year or long-term loans took the bulk or 79.9 percent of the total loan portfolio with $14.35 billion while short-term loans accounted for the remaining 20.1 percent or $3.61 billion.
By creditor bank, local commercial banks approved $15.67 billion while thrift banks granted only $42 million. Foreign banks on the other hand, extended $2.24 billion worth of credit.
“Year-on-year, FCDU deposit liabilities increased by $2.2 billion (or by 5.3 percent) from the end-June 2019 level of $41.3 billion,” the BSP said.
Relaxed rules up
Monetary authorities granted a more relaxed regulation for the expanded/FCDU to provide further relief to covered institutions amid the pandemic.
Under the new rules, banks are now allowed to offset any deficiency in the asset cover incurred on one day or more with the excess cover they may hold on the other days of the same week and the immediate week after.
Chinese firms play key role vs COVID
During the quarantine period, Chinese firms in the telecommunications, power and banking industries have demonstrated a strong commitment to their duties, the Chinese embassy said in a statement.
Chinese companies have made huge contributions to the anti-coronavirus disease campaign in the Philippines as they have strengthened protection to ensure the safety of both the Chinese and Philippine employees and voluntarily donated money and supplies based on narratives that the Chinese Embassy had solicited.
On 29 September, an award ceremony for “My Anti Covid-19 Story” took place in the embassy in the Philippines in a blended on site awarding and online streaming. Ambassador Huang Xilian joined the event and presented the winners with the awards.
Since the coronavirus disease 2019 (COVID-19) outbreak, Chinese enterprises were responsible for nearly 10 million medical items including medical masks, protective suits, gloves and goggles which were distributed to local communities.
During the quarantine period, Chinese firms in the telecommunications, power and banking industries have demonstrated a strong commitment to their duties, the Chinese embassy said in a statement.
Flow of goods ensured
By strengthening protection while requiring employees to report to their posts, the foreign firms guaranteed the uninterrupted flow of essential basic services during the most trying times of the pandemic.
The diplomatic post said in a statement that many more encouraging actions were taken by Chinese firms such as sending the most needed supplies to frontliners, providing financial supports for local families, organizing various activities and training programs and helping employees cope with stress and anxiety.
After the strict limitations under the enhanced community quarantine (ECQ) were lifted, Chinese companies have made significant achievements in terms of work resumption and in actively contributing to the economic recovery.
Most enterprises have resumed production and are now operating with a capacities of over 80 percent. In the first half, total value of new contracts involving Chinese groups amounted to $3.7 billion, or a 26.5 percent increase from the previous year.
Exploits during crisis
“My Anti Covid-19 Story” was launched by the Chinese Embassy and the Chinese Enterprises Philippine Association in August.
All local locators have been invited to tell their stories and experiences during the Covid-19 pandemic including the challenges they face, the responses they took and the social responsibilities they demonstrate. This event aims to give the floor to the Chinese enterprises in the Philippines, share their solutions and amplify their voices, and encourage their commitment to social projects and mutual development.
Some 23 Chinese firms submitted 45 pieces of stories in various forms including essays, videos, poems, etc.
Based on their commitment to the local society during the pandemic, six companies were presented with the “2020 Award for Best Enterprises with Social Responsibilities.”
Based on the originality, creativity and media promotion values of the stories, six persons and enterprises also received citations.
Huang said he was deeply touched and encouraged by the stories which exhibited vivid images of the courageous acts taken to grapple with the challenges posed by the pandemic.
The ambassador encouraged more Chinese enterprises to make more contributions to the local community and promote communication and economic cooperation between China and the Philippines.