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‘ Remittances still pillar of Philippines growth’
Remittances from overseas Filipino workers (OFWs) will continue to fuel consumption and boost the Philippines’ economic resilience, according to British banking giant HSBC......»»
IT-BPM sector banking on AI to boost productivity
The country’s information technology-business process management sector is working on the strategic integration of generative artificial intelligence, banking on its potential to boost productivity, according to an industry group......»»
UnionDigital Bank eyes high-frequency lending
The digital banking arm of Aboitiz-led Union Bank of the Philippines is moving toward high-frequency lending with shorter payment periods to boost its loan portfolio and include more Filipinos in the banking ecosystem......»»
Geopolitical tensions could hit global economy: US Fed
The US Federal Reserve warned Friday that the recent attack on Israel and the ongoing Ukraine conflict could cause harm to the world economy and boost global inflation. Israel has been conducting extensive air strikes on the Gaza Strip since October 7, when more than 1,400 people, mostly civilians, were killed by Hamas militants during an armed attack on the south of the country. Israel's retaliatory bombing campaign has left more than 4,100 people dead, many of them also civilians, according to the Hamas-run health authorities in Gaza. Ongoing exchanges of fire with Hezbollah militants along Israel's northern border with Lebanon have raised fears that the conflict could spread to other countries in the region. "The attack on Israel, in conjunction with Russia's ongoing war against Ukraine, has ratcheted up geopolitical tensions," the Fed said in its semi-annual report on financial stability. "Escalation of these conflicts or a worsening in other geopolitical tensions could reduce economic activity and boost inflation worldwide," it added. Mitigating banking stress In its report, the Fed also said that policy interventions earlier this year in light of the rapid collapse of Silicon Valley Bank (SVB) had "played a key role in mitigating the stresses in the banking system that emerged in March." SVB failed following a bank run by investors concerned by its exposure to interest rate risk in light of the Fed's aggressive campaign of rate hikes. A number of other US banks collapsed in the turmoil that followed, which also led to the merger, under pressure, of the Swiss banking giant Credit Suisse with regional rival UBS. "Since March, volatility has abated and deposit outflows have largely stabilized," for affected banks, the Fed said. "But these banks nonetheless continued to face challenges navigating changes in depositor behavior, higher funding costs, and reduced market values for investment securities," it added. The post Geopolitical tensions could hit global economy: US Fed appeared first on Daily Tribune......»»
SBCorp.: Financing gap yawns P400B
Department of Trade and Industry attached agency Small Business Corporation is seeing the financial gap, or the inability of private banks, lending firms, and the government’s lending arms to provide loans is now ranging from P300 billion to P400 billion. “Even if we put together government banking institutions providing loans to entrepreneurs, as well as savings and loans associations and cooperatives, the country’s financial gap still lacks from P300 to P400 billion. That’s our estimate based on our study,” Robert Bastillo, SBCorp president, exclusively told the DAILY TRIBUNE during his interview in the paper’s online show, Straight Talk. Bastillo said this is the main reason why small entrepreneurs have become baits to traditional loan sharks, colloquially known as the “5-6” scheme associated with Indian nationals, instead of formal sources of loans. They would rather close shop “This was also the reason why some businessmen opted to stop their enterprises due to this financial gap problem in the country. They would rather close shop. In fact, the International Finance Corporation estimated that the financial gap in the country is from P12 to P13 trillion, but we contradicted that because the economy of the country is not that huge,” he said. Bastillo said the whole portfolio of the banking sector in the country is approximately P8 trillion. With the huge financial gap, Bastillo said SBCorp’s P10 billion budget allocation is indeed not enough to fill in the gap. He said that’s why they have formulated programs to influence the financing sector so that MSMEs will look fundable to financial institutions, just like SBCorp’s P3 or the Pondo sa Pagbabago at Pag-asenso program. The P3 Program is a financing initiative by government to assist micro-entrepreneurs throughout the country by providing affordable and cost-efficient microloans, “But if the P3 will be coursed through cooperatives, then we give only a 2 percent interest rate per year. Cooperatives can stretch the interest rate by as much as 30 percent per year. But cooperatives nowadays provide only a 2 percent interest rate,” according to Bastillo. Bastillo said that if the P3 is directly availed from SBCorp., they will provide the loan at one percent per month or 12 percent per year, but with a diminishing effect, compared to other private banking institutions. Good players MSMEs that are good payers can be rewarded by a lower interest rate of up to 10 percent per annum if they will avail of another loan, Bastillo said. The scheme is a funding program that will provide an alternative source of financing for microentrepreneurs that is easy and quick to access, and is seen to give a boost to the micro enterprises sector, which comprises the bulk of Philippine micro, small, and medium enterprises. The program also aims to stabilize informal lending, locally known as 5-6 lending, and prevent micro-entrepreneurs from falling victim to usurious lenders. Added funding Meanwhile, Bastillo insisted that if funding for the SB Corp. is added by the government, more microloans will be ushered into MSMEs. “If the capital of P10 Billion, provided by the Magna Carta for MSMEs, will be raised around P50 to P100 billion, then we will be able to help more borrowers. However, it would take time to realize this, as amendments are needed to the Magna Carta for this request. Right now, it is still at the Committee level at the House of Representatives,” according to Bastillo. The post SBCorp.: Financing gap yawns P400B appeared first on Daily Tribune......»»
China Bank to infuse P2 billion in thrift bank arm
Listed China Banking Corp. is infusing an additional P2 billion to its thrift banking arm to bankroll sustained loan expansion and boost its ability to serve more segments of the banking population......»»
UAE agri, energy, banking deals eyed
The Department of Finance, or DoF, on Wednesday said United Arab Emirates or UAE-based firms are keen on exploring investments in a range of industries in the Philippines, including food, water management, renewable energy, and Islamic banking. DoF said the economic team talked to executives of Brevan Howard, a technology-driven investment management platform; Arqaam Capital, a financial firm for emerging markets; and Investment Corporation of Dubai, the Dubai Government’s principal investment arm for the possible foreign investments. “The companies expressed interest in the Philippines’ renewable energy projects, port operations, water and wastewater management, waste-to-energy projects, upcoming Sukuk bond issuances, Islamic banking, and the Maharlika Investment Fund,” DoF said in a statement to the media. Middle East roadshow Investment and trade discussions surfaced during the Philippine economic team’s investor briefing in the UAE, a seven-state federation, from 11 to 12 September. The finance department said the possible foreign investments affirm the need for the Comprehensive Economic Partnership Agreement or CEPA with the UAE aimed at easing and expanding trade between the two countries. DoF said the UAE Government and the Philippines have already signed an agreement for investment protection and collaboration as part of the ongoing negotiations over CEPA. It added the UAE will soon submit to the Philippines its template for the final document on CEPA. President Ferdinand Marcos Jr. said he aims to adopt foreign water technologies, such as hydroelectric power plants, irrigation canals, and diversion dams to store and distribute more water for households, commercial establishments, and farm irrigation amid the threats of climate change. Food exports to Dubai usually include pineapples, bananas, and fresh and processed fish amounting to over $30 million. For renewable energy, the Department of Energy aims to generate power capacity of at least 20,000 megawatts through a mix of sources, such as the sun, wind and geothermal. Meanwhile, National Treasurer Rosalia de Leon said the Philippines is entering the Islamic debt market by issuing Sukuk bonds, or Islamic bonds, in the fourth quarter this year or early next year to raise $1 billion. “Sukuk bonds will diversify the Philippines’ sources of financing, widen its investor base to reach the untapped Islamic finance market, and boost investments in physical and digital connectivity,” she said. The Islamic bonds offer investors a share of profits from projects financed by the debt instrument instead of interest payments from traditional bonds. The government aims to raise $5 billion from commercial borrowing and already acquired $3 billion in January. The post UAE agri, energy, banking deals eyed appeared first on Daily Tribune......»»
China Bank leverages AI to hike work productivity
China Banking Corp. is leveraging artificial intelligence via the CHIB GPT, its first AI solution, to boost employee production as it marked its 103rd anniversary......»»
Salmon, Oradian seal partnership serving unbanked Filipinos
Oradian has included fintech innovator Salmon in its roster of valued customers, providing expertise by adopting Oradian’s advanced core system to drive its growth strategy, and to help the government attain its goal of improving the numbers of unbanked Filipino Currently servicing tens of thousands of customers, Salmon is a consumer fintech company built by a team of finance professionals and entrepreneurs and backed by world-class investors that develop better and more inclusive financial products with a focus on innovation, flexibility, security, relentless focus on customer care and added value for clients. The fintech firm started originally with in-store purchase financing, as Salmon had intended to expand its range of financial services to cover all the daily needs of clients in the Philippines and beyond, bridging the financial inclusion gap for millions of consumers. “We’re delighted to have found a technology partner in Oradian. As we enter a new stage of our institutional development and ready ourselves to deliver new product offerings, Oradian provides some essential tools that will power our continued growth,” said George Chesakov, CEO and co-founder of Salmon in a press conference on Wednesday. Founded in 2022, Salmon has already attracted a cumulative $36 million in equity and debt funding, reflecting deep confidence in its business model and growth potential. Essential recipe “Oradian offers a vital combination of flexible, scalable, best-in-class technology and comprehensive in-market customer support and expertise that enables us to drive growth, scale rapidly, and boost our performance. This is an essential recipe for remaining competitive in an increasingly crowded fintech landscape,” said Chesakov. Salmon’s early success is indicative of the strength and health of the Philippines’ financial technology market, particularly as the Bangko Sentral ng Pilipinas and the national government seek to promote digital lending and boost financial inclusion. The BSP in its report last month said 22 million Filipinos have gained access to formal financial accounts between 2019 and 2021. According to the 2021 Financial Inclusion Survey of the BSP, 34.3 million Filipino adults remained unbanked, as the country’s banked population was at about 56 percent of all adults in 2021, improving from just 29 percent in 2019. First cloud-native core banking system Oradian, the first cloud-native core banking system to be used by BSP-regulated financial institutions in the Philippines, has been serving institutional customers for more than 10 years, enabling enhanced growth and performance with its cloud-native, API-enabled platform. Reflecting on this new partnership, Antonio Separovic, CEO and co-founder of Oradian said: “Oradian’s mission is to partner with high-growth, tech-enabled financial institutions to drive growth and promote financial inclusion for last-mile communities. “Oradian’s system is designed for sophisticated tech-led teams like Salmon that leverage technology to scale financial services throughout the entire community — we’re excited to work alongside George and Salmon’s team as they meet these goals.” The post Salmon, Oradian seal partnership serving unbanked Filipinos appeared first on Daily Tribune......»»
Crackdown vs text blasters up
The Department of Information and Communications Technology, or DICT, is cracking down on fraudsters who use cheap, China-made text-blasting machines to boost the electoral campaigns of their clients. DICT Undersecretary Alex Ramos said they will clamp down on the proliferation of scam and spam messages plaguing users despite the SIM Registration Act being in place. It will also be timely as the barangay and youth elections are near, he added. Ramos recalled that government authorities had previously confiscated text blast machines used to send messages en masse to multiple mobile numbers. “Those text machines were very popular during campaign periods and they are now very cheap. We [have] seized a lot of these machines,” he said. Despite having a SIM law, fraudsters are still able to find new ways to hack into phones and computers, this time using over-the-top or OTT media services such as chat apps, which are outside the scope of telco filters. The DICT official urged consumers to be more proactive and not fall for various online ruses by malevolent players capitalizing on the increasing shift by people to a digital lifestyle. Cybercriminals use the target’s full name and pretend to be messaging them about a missed connection or make various offers. They create a sense of familiarity and trust in an attempt to start a conversation. The SIM Registration Act was envisioned to address escalating cybercrime in the country, including the proliferation of smishing and other forms of scam and spam messaging. The law mandated all mobile phone and prepaid broadband users to register their SIMs by 25 July or face SIM deactivation. A deactivated SIM card can potentially affect several aspects of a person’s life. For instance, it will cut their access to online banking, e-commerce, transportation, healthcare, education, and entertainment, among other things. The post Crackdown vs text blasters up appeared first on Daily Tribune......»»
Digital venture Lentra launches local ops
A new digital lending software-as-a-service platform has officially launched local operations on Monday to help promote financial inclusion among the growing and digitally savvy population in the country. Armed with $78 million of recently secured Series B Funding, Lentra targets to provide financial lending services to retail stores and small to medium enterprises. The company has committed to leveraging over 60 financial institution partners to touch a significant slice of the underbanked population. “Demand for Retail and SME loans presents a huge opportunity for most banks in the Philippines. With a rising youth population and favorable policies to encourage financial inclusion, Lentra’s entry into the Philippines is timely,” Joel Del Valle, Lentra Country General Manager for the Philippines, said. “We will enable our banking ecosystem to keep pace with digitization and to accelerate financial inclusion,” he added. As such, Lentra CEO and Founder D Venkatesh also conveyed that the Philippines’ potential will help the company broaden its cross-country solution offerings. For Credit Information Corporation President and CEO Ben Baltazar, Lentra’s launch will help reduce the current 'time to decision' for small businesses and consumer lending, which can sometimes take around three to five weeks. “The drive to modernize lending systems is imperative to boost efficiency and agility in alignment with the country's economic growth aspirations,” Baltazar said. Founded in 2019, Lentra offers digital lending through its secure and scalable platform. It equips banks and non-banking financial institutions to create customized lending products and enhance customer experiences, through its API-driven modular architecture. Its lending platform currently serves over 60 financial institutions, and has processed over $20 billion worth of loan applications, with 2 million loans being processed monthly. The post Digital venture Lentra launches local ops appeared first on Daily Tribune......»»
Metrobank sets transaction limit
Metropolitan Bank & Trust Co. is set to impose a cumulative daily limit on certain transactions via its app and online banking platforms, as part of initiatives to further boost clients security......»»
Gilas also pinning hopes on crowd in battle vs ‘heavyweights’
Gilas Pilipinas is banking on home court advantage as a boost, as head coach Chot Reyes said they need to “punch above their weight” in the FIBA World Cup......»»
Index rebounds amid bargain hunt
Bargain hunting fueled a recovery at the local bourse as it gained by 74.18 points or 1.17 percent on Wednesday to 6,410.09. Market sentiment received an added boost from the first half 2.9 percent growth in cash remittances, even though slightly missing the government’s target of 3 percent growth for the year. Philstocks Financial Assistant Research Manager Claire Alviar said many investors remained on the sidelines, with a net market value turnover of P3.78 billion, as investors awaited the policy meeting of the Bangko Sentral ng Pilipinas. Banks receive beating The banking sector was the sole loser, down by 0.18 percent while the mining sector led the gainers among the indices, increasing by 1.85 percent. For index members, Universal Robina Corporation emerged as a front-runner, gaining 4.96 percent to P124.90 while PLDT Inc. had the biggest loss, dropping by 2.06 percent to P1,234.00. The post Index rebounds amid bargain hunt appeared first on Daily Tribune......»»
Manhattan of Pasay City (3)
The iconic Manhattan of Pasay City along Manila Bay, world-class and impressive, well-planned and eco-friendly, is set to affirm the city’s reputation as the first “Eco-City” in the Philippines. To date, the project has reclaimed more than 117 hectares of submerged lands above water, a testament to the technical capabilities and synergy of the Pasay Harbor City Corporation and its EPC contractor, Netherlands-based Royal Boskalis Westminster N.V. — one of the world’s top dredging companies. The project is set to be completed a decade and a half from today, with its horizontal development, including roads, bridges, drainage water, power, sewerage, communications, and other primary utilities and facilities. Pasay Harbor City Corporation or PHCC, the joint venture partner of the City of Pasay for the 265-hectare Pasay Reclamation Project with a closed P57-billion syndicated loan agreement, with five of the country’s largest banking institutions. With the loan in place, PHCC has secured funding for the completion of the project, the future site of Metro Manila’s premier central business district by the bay. The project is part of the Pasay Eco City Grand Vision to build a sustainable, eco-friendly, and world-class metropolis consistent with its mission to promote the quality of life of its people. The signing was led by PHCC’s chairman Carlos S. Gonzalez, its president Manuel S. Gonzalez, and counsels, Atty. Roan Libarios of Libra Law and Atty. Santiago T. Gabionza Jr. of VGD Law. This investment is a much-needed boost to the economy still saddled by the effects of the Covid-19 pandemic by creating jobs and economic multipliers and positioning Pasay as the next leading business, investment, and tourism hub in the country. The loan agreement was made possible due to the approvals of the bank lenders following months of required due diligence, particularly, PNB Capital led by its president/ CEO Gerry B. Valenciano and PNB executive vice president Cenon C. Audencial Jr.; BDO Unibank led by executive vice president Jeannette S. Javellana; Metrobank led by First Vice President Christopher Hector L. Reyes and First Vice President Mercedes P. Uyboco; Landbank led by Senior Vice President Gonzalo Benjamin A. Bongolan; DBP led by President/ CEO Emmanuel G. Herbosa; and the Lenders’ Counsel, Marievic G. Ramos-Añonuevo of SyCip Salazar Hernandez and Gatmaitan. The solid, visible, and incontrovertible proof of the completion of the project is the stunning success of the Mall of Asia, as envisioned by its father, the late visionary and father of the global metropolis of Pasay, Mayor Duay Calixto. For indeed, one can just marvel at the great transformation of the reclaimed area, now the home of SM and Mall of Asia. Manhattan of Pasay City is following Mayor Duay’s vision which turned into reality when Pasay City, in 2015 alone, earned P3.2 billion in real property taxes, business and work permits. With the project in progress, the city could double or even triple its income in taxes alone. The integrity and quality of workmanship in the erection of the iconic project are assured by the technical capability of the EPC contractor Netherlands-based Royal Boskalis Westminster N.V., one of the world’s top dredging companies. The Netherlands is a country built partly on reclaimed land by dredging companies with the likeness of the firm hired by the planners of the iconic Manhattan Tower in Pasay City. The post Manhattan of Pasay City (3) appeared first on Daily Tribune......»»
Aboitiz Group furthers ‘Great Transformation’ into 2023
The Aboitiz Group has seen exceptional performance in the first half of 2023, showcasing its "Great Transformation" into the Philippines’ first techglomerate. Leveraging innovation as well as synergies across its diverse business portfolio, the group has solidified its position as a trailblazer of industry. With a strong foundation in place, the Aboitiz Group eagerly sets its sights on forthcoming projects that promise further success and innovation. AboitizPower. The Aboitiz Group’s holdings in power generation and distribution, AboitizPower, continues to support the country’s energy transition and socioeconomic development with its diverse portfolio of thermal and renewable energy power plants, as well as internationally certified asset management capabilities from its distribution utilities. With close to 1,000 megawatts (MW) of ongoing and disclosed energy projects, it is en route to accomplishing its 10-year growth strategy of having at least 9,200 MW in its generation portfolio equally split between RE and thermal sources of energy by the next decade. This journey includes the development of the 17 MW Tiwi Binary Geothermal Power Plant, the 94 MW Cayanga-Bugallon solar facility, and the 167 MW Laoag solar facility. AboitizPower is also looking to begin the construction of its Calatrava Solar project and Olongapo Solar project within the year. These RE investments are complemented by other developments in Battery Energy Storage Systems, like the SN Aboitiz Power 24 MW Magat Battery in Isabela, which — much like the commercially operational 49 MW Maco Battery in Davao de Oro — will help provide regulating and contingency reserve power to the country’s grids. Subsidiaries. Meanwhile, subsidiaries Davao Light and Power Company, Visayan Electric Company, Cotabato Light and Power Company and Subic EnerZone Corporation were the first power DUs in the Philippines to be certified with an ISO 55001:2014 certification for Asset Management, an international standard that attests to the efficiency of how they manage the lifecycle of their assets, i.e., power lines, transformers and substations. This validates the reliability of their services and strengthens the uninterrupted provision of electricity in their respective service areas. Efficient asset management is essential for DUs to successfully manage their infrastructure and optimize maintenance and costs, thereby ensuring regulatory compliance and a reliable bridge between transmission lines and businesses, communities and homes. UnionBank. Union Bank of the Philippines continues on its trajectory of becoming a Great Retail Bank as it has consistently been recognized as one of Asia’s leading companies. Among the many recognitions for the 1st half of 2023 that UnionBank has reaped are: Best Retail Bank in Southeast Asia (Cfi.co), 4-time Best Retail Bank in the PH (The Asian Banker) and 6-time Digital Bank of the Year PH (The Asset). In line with its nation-building “Tech-UP Pilipinas” advocacy, UnionBank’s strategic partnerships have been focused on digitization as an essential element for client success. UnionBank’s determination to be an enabler of the Philippines’ bid to be a G20 country by 2050 is apparent as it continues to nurture and grow its diverse client portfolio that includes corporate, MSME, high net worth as well as local and national government entities. As a recognized trailblazer that embraces technological innovations that empower its customers, UnionBank together with its digital banking arm UnionDigital Bank (UnionDigital), fintech arm UBX and thrift arm City Savings Bank (CitySavings) showcased its expertise in artificial intelligence at the first AI Summit PH 2023 last May. The first half of the year also saw UnionBank’s commitment to offering clients amazing and exclusive experiences through partnerships with Live Nation (for world-tour concerts) and GMG productions (for the Hamilton musical). “The investments we made last year have exceeded our expectations. UnionDigital is already profitable after less than a year in operation. There is strong momentum in the acquired credit cards business from Citi. New-to-bank card customers are at a record level. We are geared up to grow our retail banking business. Our infrastructure is ready for scale. We have sufficient capital coming from the recent stock rights offering to further grow our earning asset capital base,” said UnionBank president and CEO Edwin R. Bautista. Aboitiz InfraCapital. Aboitiz InfraCapital remains on track with its purpose of enabling businesses and uplifting communities. AIC Economic Estates maintains its position as the leader in industrial-anchored mixed-use development nationwide, with the largest footprint of developed industrial estates as well as the single largest privately owned industrial estate in Lipa-Malvar, Batangas– LIMA Estate. 2023 marked LIMA Estate’s 25th anniversary, as well as the 30th year of West Cebu Estate in Cebu. These estates are undergoing industrial and commercial expansion to accommodate more locators and create approximately 90,000 employment opportunities. Water business. For AIC’s water business units, Apo Agua can now produce safe and reliable water for the Davao City Water District’s water reservoirs. Apo Agua’s laboratory has also obtained accreditation for drinking water analysis from the Department of Health. AIC's LIMA Water, on the other hand, continues to operationally benefit from its SMART Water Network, leading to reduced fuel consumption and high facility uptime. Digital infrastructure. In the digital infrastructure landscape, Unity Digital Infrastructure completed the first closing of a total of 250 sites from its acquisition of over 1,000 telecom towers from Smart-PLDT and Globe Telecom. Additionally, Unity marked a major milestone by successfully co-locating three Mobile Network Operator tenants (Globe, Smart and DITO) in one of its towers in Cebu. The three-tenant tower is the first in the Philippines and showcases the effectiveness of the shared tower model in support of the government's drive to improve digital connectivity through the common tower initiative. Mactan-Cebu International Airport. Mactan-Cebu International Airport surpassed expectations with significant growth in passenger traffic, peaking at around 5 million passengers in the first half of this year, more than double the previous year. The resumption of major international routes, such as Shanghai and Taipei, and improved aircraft availability are expected to further boost traffic in the second half of the year. MCIA's excellence in promoting the airport and in ensuring customer experience was also recognized, as it received the Routes Asia 2023 Marketing Award in the 5 million category and became the first airport in the Philippines to be accredited by the Airports Council International for its Airport Customer Experience. The post Aboitiz Group furthers ‘Great Transformation’ into 2023 appeared first on Daily Tribune......»»
Quick AI response as small biz magnet
Digital banking powered by artificial intelligence or AI is increasingly becoming the norm. How fast and flexible industry players can maximize benefits from this technology to provide credit to most small businesses is the edge, Edwin Bautista, president and CEO of Union Bank of the Philippines, told the Daily Tribune. [caption id="attachment_164549" align="aligncenter" width="585"] Edwin R. Bautista, president and CEO, UnionBank of the Philippines[/caption] “All we know is AI will disrupt industries, so the earlier you try to figure out how to adopt it, the better. Now, the question is, how many financial institutions are prepared to make that bet of lending using alternative data sources using AI?” Bautista said. UBP’s digital banking arm UnionDigital Bank is shifting gears to provide small businesses with accessible loans using AI. It collects data from the Internet and humans and organizes them into qualitative and quantitative categories to generate text, images, audio and videos. Many small business owners usually need financial statements on paper, as they sell products and services primarily online through social media, such as Facebook, Instagram and TikTok. However, Bautista said their financial capabilities could be traced and analyzed even without the formal documents required by traditional banks, such as income tax returns, financial statements, and trading partners profiles. He stressed AI does not discriminate. “When you look at the smaller businesses, they appear as an underground economy, so they cannot produce those kinds of documents. AI will help us because what it does is it puts together different information about that particular business or person and flow of sales so it can give a prediction on whether the small business owner will pay you back or not.” This technology is critical to lenders, including informal lenders, as micro, small and medium enterprises comprise 99 percent of all businesses in the country and drive most of its economic activities. Global market researcher McKinsey & Company said Philippine-based lenders can boost their growth by tapping the country’s bankable population, which is expected to expand by 30 percent to 85 million by 2030, along with owners of small and medium enterprises. “The Philippines has an estimated 15 million informal entrepreneurs and self-employed workers. Meanwhile, retail lending is heavily concentrated in a narrow band of wealthy households,” the researcher said. McKinsey reported a few domestic digital banks had gained traction, with three digital banks, including UnionDigital, growing a total market value by $3 billion. In contrast, traditional banks only saw a $2.2 billion growth between January 2021 and January 2023. However, McKinsey stressed digital banks in the Philippines have been limiting their services to mobile payments. “While competition in digital financial services intensifies, dominant players have yet to emerge outside the mobile-payments subsector. Six digital banks have recently launched operations in the Philippines, but none lend at scale.” Unlike informal lenders, Bautista said digital banks can reach more borrowers as AI learns about all people with access to the Internet and produces sound data correlations. “The theory is that if you have many friends and are grounded in a particular community, chances are you will not just run away from your debt. The minute borrowers go outside their community. It’s challenging for informal lenders because they already do not know the people they are lending to.” With the developments in AI, Bautista said UBP is redesigning its brick-and-mortar banks by tapping digital technologies and its UnionDigital to exchange market insights, systems, and people skills to boost mutual growth. “We think we can be the number one Consumer Bank in the Philippines in the next three years. Why? Because Our growth path is based on broadening the base on which we can learn to adapt. You can only do that if you’ve transformed your front, middle, and back office accordingly.” Bautista said this means the ever-changing skills development of people of both banks. While AI has been demonized by some of the labor force and business owners worldwide, saying it will replace traditional jobs and employees, Bautista said the future remains uncertain. Still, it can also highlight innately human jobs. “AI may rather have pluses and minuses. You will be affected negatively, but you will also have a positive impact if new jobs are generated.” Bautista said proof of this is the human eye, intuition, and brain need to verify whether AI-generated data matches customers’ changing preferences and needs. “So today, I can know instantly what my customer sentiments are. If my back-end operations take me six months, what good is knowing today if I can act on it? And the only way I can act is I have people with the ability to modify their things and a back end that allows me to change my products and features near real-time.” The post Quick AI response as small biz magnet appeared first on Daily Tribune......»»
US first quarter GDP growth revised sharply up to 2%
US economic growth came in at two percent in the first quarter this year, the Commerce Department said Thursday, making a significant upward revision to earlier estimates partly on stronger-than-expected consumer spending. While GDP growth in the world's biggest economy has still cooled from 2.6 percent in the final three months of 2022, the latest first-quarter figure is markedly higher than the annual rate of 1.1 percent initially estimated. "The updated estimates primarily reflected upward revisions to exports and consumer spending," said the Commerce Department in its report. Analysts had expected a lower annual rate of 1.3 percent, according to Briefing.com. The Commerce Department added Thursday that the shift upwards was partly offset by downward revisions in other areas, such as non-residential fixed investment. Consumption has provided a boost to the US economy, giving it a strong start in 2023 even as banking sector turmoil and higher interest rates weighed on the outlook. This was in spite of 10 consecutive rate hikes by the US central bank over the past year or so -- to ease demand and rein in stubborn inflation -- before pausing at its most recent meeting. "The US economy is currently displaying genuine signs of resilience," said Gregory Daco, chief economist at EY-Parthenon in a note. "This is leading many to rightly question whether the long-forecast recession is truly inevitable," he added. Instead, another possibility is a "soft landing of the economy" where inflation falls to a two percent pace without a recession, he said. Risks remain But analysts flag risks on the horizon, with High-Frequency Economics chief US economist Rubeela Farooqi noting that the lagged effects of the Federal Reserve's rate hikes will slow the economy. There are also risks from "a further tightening in credit conditions, which will have an impact on business hiring and investment decisions," she said in a note. But a strong household sector supported by job growth could help the US economy avoid a contraction, Farooqi added. In a separate report released on Thursday, initial jobless claims slipped in the week ending June 24. Continued claims came down from a recent peak as well. Initial claims dropped by 26,000 to 239,000, according to Labor Department figures, a level lower than analysts had predicted. "The data are a reminder that labor markets are still quite tight," said Nancy Vanden Houten, lead US economist at Oxford Economics. This raises the risk that the Fed lifts interest rates again next month, she added. The post US first quarter GDP growth revised sharply up to 2% appeared first on Daily Tribune......»»
Economic managers court Singaporeans
The country’s economic managers on Thursday boasted of the government’s aggressive infrastructure development plan and strong consumer spending among Filipinos post-pandemic as they hope to attract more investments from Singaporean firms. In their second economic briefing in Singapore, Philippine economic managers updated the foreign business community on the 194 infrastructure projects approved by the National Economic and Development Authority in March. NEDA Secretary Arsenio Balisacan shared 93 of them are already being built, of which 19 are expected to be completed this year and 61 in the next five years. “These investments will ease the process of doing business, expand market opportunities and foster job creation and innovation,” Balisacan said. The infrastructure program totaling around P8.3 trillion includes transportation, energy, water, agriculture and digitalization projects, among others. Committed to increase infrastructure spending Under the current administration of President Ferdinand Marcos Jr., Balisacan said the government has committed to increase infrastructure spending ranging from 5 percent to 6 percent of the gross domestic product or at least $20 billion to $40 billion each year. “In the previous administrations, we didn’t have ready-to-implement infrastructure projects. We had to develop them ourselves. Now there are such, with feasibility studies and some detailed engineering, so you can come in and invest,” Finance Secretary Benjamin Diokno added. Through public-private partnerships or PPPs in the infrastructure industry, Balisacan said the government can improve other basic services to the people. “We’re pushing for PPPs to support certain programs and have the rest of the funds support other basic programs such as social protection, health and education.” To boost funds for infrastructure spending, Diokno said the government has proposed the Maharlika Investment Fund, a sovereign wealth fund which could have sub-funds for specific industries, such as those contributing to fight climate change. Economy expanded the most in Asia Meanwhile, Bangko Sentral ng Pilipinas deputy governor Francisco Dakila Jr. said the Philippine economy expanded the most in Asia at 6.4 percent in the first quarter this year, higher than Malaysia’s 4.9 percent, India’s 4.6 percent and Thailand’s 2.8, due to strong consumption of goods and services. Dakila reported sales from hotels and restaurants jumped by 23.8 percent and 30.1 percent from automobile shops. He added domestic consumption was also partly driven by the continued flow of remittances from overseas Filipino workers which increased by 3 percent in the first quarter despite global inflation. While the banking sector has seen moderate growth, Dakila said financial firms remain stable and optimistic for more clients as more Filipinos have been able to find jobs, with the unemployment rate falling to 4.5 percent in April from 5.7 percent in the same month last year. “We see that the banking sector is pretty much stable. The central bank did an outlook survey for the non-performing loans ratio showing it rising to 8 percent during the pandemic and that didn’t happen. Now it’s 3.5 percent, so banks are well capitalized. Investments in the financial sector should be very attractive.” Middle-income society Balisacan said the government aims to achieve economic growth of at least 6.5 percent each year and make the country a predominantly middle-income society by 2040. To achieve this goal, Balisacan said the government will be expanding trade agreements with other countries, including members of the Association of Southeast Asian Nations (ASEAN). “His marching order to us is to expand the opportunities in trade with other countries. The Philippines has the lowest number of bilateral agreements in ASEAN. The country has improved employment but the quality of employment is below par.” The post Economic managers court Singaporeans appeared first on Daily Tribune......»»
DAR vows securing farmers’ soft loans
The Department of Agrarian Reform has committed assistance to farmers by securing loans from banking institutions to elevate their lives and livelihoods, as anchored in the Kapatid Angat Lahat Agri Program with Private Sector Advisory Council-Jobs Sector Group Joey Concepcion in the lead. Conrado Estrella made this assurance during his meeting with Concepcion on Monday, along with other stakeholders in the agriculture sector. “We thank the Department of Agrarian Reform for expressing willingness to help our initiative to help our farmers scale up. Uplifting the lives of our small farmers is a daunting task. We need all hands-on deck to accomplish this, and we are glad that we have DAR Secretary Estrella’s commitment to extend a helping hand,” Concepcion said. During the meeting, Concepcion emphasized the need for small farmers to achieve scale, saying it would be hard for them to succeed without it. “Farmers cannot obtain a loan from banks that they can use to boost production and improve their lives because they cannot use their land as collateral under agrarian reform law,” he said. Farm clustering Among the recommendations by KALAP and the think tank group Foundation for Economic Freedom, represented by Dr. Fermin Adriano, is the implementation of farm clustering to boost productivity and help ensure food security. “Clustering does not mean consolidation of land ownership but merely the clustering of land for better production scheduling,” said Adriano, adding this process has already led to higher farm productivity in China, Vietnam, Laos and Cambodia, among others. “The process would enable the government to effectively provide assistance to farmers who are clustered because it will deal with groups rather than millions of individual small tillers,” he added. He said clustering would also pave the way for the use of modern farm machinery and technologies, thereby achieving economies of scale, and allowing the development of downstream industries like food processing activities, because of an adequate and reliable supply of raw materials. Improve access to government services On the other hand, he stressed that the process would also improve access to government services like extension, and credit for clustered farms. Farming will also be more attractive to private sector groups to invest in agriculture because of lesser transactions. To accelerate farm clustering, Adriano called for the immediate and proper implementation of the law condoning the debt of defaulting agrarian reform beneficiaries. “The implementing rules and regulations of the law must ensure that the administrative burden of transferring land ownership to farmer beneficiaries is not burdensome and allow beneficiaries to enter into a leasehold contract agreement with investors but ensure that land will not be converted to non-agricultural uses,” he said. Adriano also advocated for the promotion of agricultural joint-venture agreements between small landowners and agribusiness corporations. Estrella, for his part, expressed support for the proposal, saying the DAR can check within their network of beneficiaries. Big brother companies The DAR chief also lauded the KALAP’s big brother companies for their commitment to sharing their technology and best practices with the DAR and their willingness to become an assured market for the farmers. “I am happy that KALAP’s big brothers are willing to share their technology with DAR. We want to tap into the knowledge of the big brothers to better prepare the beneficiaries of agrarian reform so that the land will be utilized properly,” Estrella said, adding they can also help extend credit assistance to agrarian reform beneficiaries if needed. Meanwhile, National Irrigation Administration (NIA) Administrator Eddie Guillen said the private sector plays a huge role in the success of the agriculture sector. “Around 80 percent of the success of the agricultural sector depends on the private sector. If magsucceed ito sa mga agri reform beneficiaries, mas madaming makikinabang,” he said. Guillen also revealed that President Marcos wants to harmonize concerned agencies and their functions, instead of establishing a task force. President Marcos earlier ordered the geomapping of all agricultural lands in the country to establish soil maps for specific agricultural products to ensure increased yield and improve farmers’ income. The post DAR vows securing farmers’ soft loans appeared first on Daily Tribune......»»