Monthly Archives: June 2014

The Philippine Credit Bureau is coming soon

 

June 25, 2014

After 6 years becoming law, the mandated credit bureau has the possibility of becoming reality with the awarding of the system to be used to CRIF of Italy. I had been a long time watcher of the developments in this area and was involved in helping at one time Australia’s biggest credit bureau compete for this opportunity. Unfortunately, for a number of reasons, the Australian credit bureau decided not bid and this is what has happened. However, this is not the end. Together with the ex-CEO of the Australian credit bureau, I am looking into the opportunity of revisiting this opportunity by establishing a private credit bureau which can be an accessing entity to the mandated credit bureau and provide the needed valued added analytics from the credit data available. Abangan.

 

From BusinessWorld Philippines
Credit bureau fully operational by 2015

ALMOST six years after receiving its mandate by law, the government-controlled Credit Information Corp. (CIC) has finally inked a deal that would provide the country a national credit information system by end-2015, its top official said Wednesday.

The CIC, created in 2008 to be the central registry or repository of credit information, has given the green light to a contractor to build an IT system that will be the backbone of the centralized system.

“The Notice to Proceed was issued today, June 25, 2014, to TIM-CRIF Joint Venture, the winning bidder, after contract [was] signed and notarized yesterday, June 24,” CIC President and CEO Jaime P. Garchitorena told members of the Chamber of Thrift Banks (CTB) at its general membership meeting yesterday.

The winning bid — a joint venture by Italian lending solutions provider CRIF and its local partner Total Information Management Corp. (TIM) — is worth P124 million, Mr. Garchitorena later told reporters.

The 2015 target for the credit bureau’s operations to go full blast is a revised goal.

Mr. Garchitorena’s predecessor, Baltazar N. Endriga, had earlier set a December 2014 target for the full operation of CIC.

Procurement issues — with government’s first try to bid out the contract a failure, according to Mr. Garchitorena — as well as delays in capitalization and lack of manpower have bogged down the credit bureau’s operations.
CIC started out with just 10 staff. “How can you run a corporation like the CIC with 10 people?” the bureau official said.

CIC is 60%-held by the government, while 40% of the firm belongs to CTB, the Philippine Cooperatives Center, the Bankers Association of the Philippines, the Credit Card Association of the Philippines, and the Rural Bankers Association of the Philippines.

Mr. Garchitorena claimed there was a delay in putting together CIC’s capitalization.

Under the Credit Information System Act (CISA), or Republic Act (RA) 9510, minted in 2008, the credit bureau should have an authorized capital stock of P500 million — P125 million of that should be paid up.

But both the government and its private partners stalled in putting together the 60% and the 40% of the amount respectively required of them, Mr. Garchitorena pointed out.

These logistical challenges hindered the CIC from getting its tax identification number (TIN) and headquarters in its early years, Mr. Garchitorena added.

“When I took over, we had just finished most of the paper work of the company,” said Mr. Garchitorena who took over as president and CEO of the corporation as an appointee of the current administration in May 2013.

He entered the corporation earlier, in November 2011.

OTHER ISSUES NIGGLE
The award of the contract for the IT system comes as the CIC pushes banks and other creditors to prepare for full compliance with the credit information law, once the centralized system is in place.

“Data gathering will happen by late this year, and so will testing using sample data in different scenarios. By mid-2015, all aggregation from financial institutions begin,” Mr. Garchitorena said.

“What we’re hoping for is by 2016, we have at least 80% of the data out there. [But] by end-2015, there should be large enough data [for the system] to be usable,” he added.

Mr. Garchitorena said that 288 organizations are expected to contribute information to the database. The largest of these contributors include government financial institutions like GSIS and the industry groups that partly control CIC.

However, he admitted that there is a “difference in thought” that leaves some banks having reservations about CIC’s project.

“The area of concern is… how the historical data is used to reject or deny [requests for loans],” Mr. Garchitorena said.

The CIC, he said, maintains the position that there should be no real obstacle to borrowing for individuals who have had a clean credit history for at least the last three years – something some banks are not comfortable with.

“The fact that it’s no longer in your credit report [for the last three years] should be telling these financial institutions that you’re qualified for credit… The law seems to be very strict in saying that,” Mr. Garchitorena said.

“But banks are saying we can look as far back as 10 years [into your credit history],” he said.

CISA stipulates that “the negative information on the borrower as contained in the credit history files of borrowers should stay in the database of the Corporation unless sooner corrected, for not more than three (3) years from and after the date when the negative credit information was rectified…”

As for the price of accessing the database, Mr. Garchitorena said that “the CIC has envisioned the basic cost” to be P65. That is the fee banks and other creditors – and even individuals, if they want their data – would pay for every view of an individual’s credit score and history.

Despite the concerns of some banks, however, Bank of the Philippine Islands Family Savings Bank and CTB President Jose Teodoro K. Limcaoco said in a mobile text message in reply to a question by BusinessWorld that “banks will comply with the law which requires the submission of the data.”

“I think banks just want to be assured that everyone complies,” he said.

RAISING PRIVATE INVESTORS’ STAKE
When the law was signed in 2008, a provision stated that the government has to sell a portion of its stake after five years.

“The national government shall continue to hold sixty percent (60%) of the common shares for a period not to exceed five (5) years from the date of commencement of operations of the Corporation,” the law said.

“After the said period, the national government shall dispose of at least twenty percent (20%) of its stockholdings in the Corporation to qualified investors which shall be limited to industry associations of banks, quasi-banks and other credit-related associations, including associations of consumers,” it added.

The count to five years did not begin in 2008, however. Mr. Garchitorena said that the timetable was “reset” using the government’s opinion that the date of start is when the board first convened.

Using this criteria, this deadline mentioned in the law lapses in November 2016, Mr. Garchitorena explained. Though it is not exactly such, he said CIC sees this as “the deadline for the implementation.”

Article location : http://www.bworldonline.com/content.php?section=Finance&title=Credit bureau fully operational by 2015&id=89811

The Future is now in the Philippines

With a majority of Filipinos now having internet access, the future environment now enjoyed by more developed countries is now also possible to the many in the country. Let us hope we use the advantages of this technology to create more jobs and livelihood opportunities to bring about a more inclusive society.

From BusinessWorld Philippines

June 24, 2014

Mobile access boosts Philippine Internet use

MORE Filipinos now have access to the Internet than they did four years ago given the rising ownership of mobile phones, research firm Nielsen yesterday said.

Internet penetration in the Philippines nearly doubled to 52% this year from the 27% of 2010, according to Nielsen’s PinoyNetizen report released Monday, providing a comprehensive view of the activities of Filipino Internet users in urban Philippines, as well as key demographic profiles, psychographic information, consumption of other media, and product consumption.

The report is a quarterly survey done via face-to-face interviews of males and females aged 10 years old and above, with a quarterly sample size of 2,500.

According to the report, the use of mobile phones to access the Internet went up to 35% this year from just 9% in 2012 and already equalled desktop usage, which in turn declined from 63% two years ago.

While desktop usage was going down, the use of laptops to access the Internet remained stable at 41% and is now the most commonly used device to access the internet.

“Filipinos are demanding fast, convenient and on-the-go access to the internet,” Nielsen Philippines Managing Director Stuart Jamieson said, in a statement announcing the release of the report.

“Mobile devices are effectively addressing this demand, and as a result, web users are migrating away from traditional PCs to connected devices as a means of accessing information online,” he said.

As the use of mobile phones to access the Internet was said to have grown, the frequency and the amount of time Filipinos go online also increased, Nielsen noted.

Six out of 10 (58%) said they were online daily in the first quarter of this year, up from the 23% recorded in the last quarter of 2013.

While connected, 33% said they had spent more than two hours per day online as against the previous quarter’s 28% on weekdays and 26% on weekends.

“As mobile penetration rises and getting online becomes easier than ever, consumers are staying online for increasing lengths of time,” Mr. Jamieson said.

“As such, connected devices are providing exciting opportunities for brands to connect with consumers, and in the coming years organizations need to understand and leverage this behavioral shift to help strengthen their engagement with their customers,” he added.

While accessing the Internet at home, 95% of the respondents said they visited social networking sites while 44% said they played online games.

“While entry points for online usage are social networking and gaming, the consumer’s world is becoming borderless with vast options and activities that can be conducted online,” the Nielsen Philippines chief pointed out.

“While on one hand, the uplift in internet usage presents opportunities to get nearer to consumers, on the other hand, increasing media fragmentation is making it harder than ever to capture consumers’ attention. Marketers need to seek out new and innovative ways to differentiate and stand out from the crowd,” he said. — Daryll Edisonn D. Saclag

Article location : http://www.bworldonline.com/content.php?section=Economy&title=Mobile access boosts Philippine Internet use&id=89744

A Business is also part of the community

I recall when I was studying in university, I was taught that maximising shareholder wealth was the priority concerned of a business. In this modern times, post GFC (Global Financial Crisis), the expectation has now changed it should now be maximising stakeholder wealth as the new mindset is that business cannot operate on focusing on enriching its shareholders at the expense of the community. Let’s hope with this new redefinition, businesses can find more compassion and generosity to extend some of their resources to help address the huge inequality still present in a booming Philippine economy.

From BusinessWorld Philippines

June 16, 2014

Stakeholders are back on the SEC radar

IN A BOLD move that is vintage Tessie Herbosa, the no-nonsense Securities and Exchange Commission (SEC) chair issued SEC Memorandum Circular 9 series of 2014, which reversed the removal of the phrase “and other stakeholders” from the Code of Corporate Governance when the SEC revised the code in 2009. Redefining the responsibilities, duties and functions of the Board, the revised code now clearly states: “It is the Board’s responsibility to foster the long-term success of the corporation and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the best interests of its stockholders and other stakeholders” (italics ours).

The revised code also assigns to the Board the duty “to identify the corporation’s stakeholders in the community in which it operates or are directly affected by its operations and formulate a clear policy of accurate, timely and effective communication with them.”

This circular was enthusiastically applauded by many corporate governance advocates, led by the Institute of Corporate Directors (ICD) and the Shareholders Association of the Philippines (SharePHIL) which had been working for this change in the last several years.

What is the significance of this simple phrase “and other stakeholders” in the country’s governance regime? Plenty.

First of all, with this change, the Philippines rejoins many other advanced countries in recognizing the role of the stakeholder in the workings of a corporation. This is global best practice. Also, the new circular makes it clear and emphasizes to the business community that it has to address the needs and interests not only of the stockholders but also the other stakeholders of the company.

For so long, we have seen many local corporations operate with only the stockholders’ interests as their primary motivation. Governance advocates here and abroad refer to these stockholder-centric corporations as “corporate reptiles.” This SEC circular essentially mandates that it is time for boards of directors to think of the others who have significant and substantial stakes in the corporation.

WHO ARE STAKEHOLDERS?
According to Professor R. Edward Freeman, who first coined this word in 1984, a stakeholder is anyone who is affected by, or can affect, an organization. He classifies them into three categories: internal stakeholders (management, regular and outsourced employees), value-chain stakeholders (suppliers, bankers, creditors, customers, etc.) and external stakeholders (government, media, investors, community, etc.)

And what is the implication of the SEC’s assignment to the corporates “to identify the corporation’s stakeholders… and formulate a clear policy of accurate, timely and effective communication with them”? This is where the rubber meets the road. The challenge to corporations now, more than ever, is how to engage its stakeholders. And the best way to engage the stakeholders is to understand and address their interests.

The internal stakeholders or the management and staff of the company are concerned with competitive compensation and benefits; job security; work-life balance; a safe, clean and pleasant workplace; and training and development, among others — in short, meaningful and gainful employment.

On the other hand, value-chain stakeholders — customers, depositors and borrowers, suppliers, service providers, bankers, creditors — value fairness, transparency, prompt payment, value for money or mutually beneficial business relationships

Finally, the external stakeholders — the government, the media, investors, the community — expect regulatory compliance, payment of the right taxes, truthfulness, timeliness of information, dividends, fairness, accountability and transparency, good governance, ethical behavior, social responsibility and concern for the environment.

It is, indeed, a very encouraging development that the SEC has re-recognized the value of the stakeholders in corporations. The governance advocates salute the SEC in this move. And we look forward to the other pending reforms being waged by the SEC chair and her commissioners, especially the amendment of the Corporation Code, the updating of the Securities Regulation Code’s implementing rules, and the study it is contemplating on the unregulated use of pension and retirement funds in large corporates.

(The author is chair of the National Issues Committee of the Management Association of the Philippines. He is a trustee of the Institute of Corporate Directors and the Shareholders Association of the Philippines (SharePHIL). Having retired from the active management of companies more than three years ago, he now concentrates on his board duties in four corporations and six non-government organizations. Send feedback tomapsecretariat@gmail.com and rex@drilon.com. For previous articles, visit map.org.ph.)

Article location : http://www.bworldonline.com/content.php?section=Opinion&title=Stakeholders are back on the SEC radar&id=89237

Here’s the proper way to evaluate a startup’s equity offerings

Some thoughts for my consideration to raising capital for my online Startup.

Daang Matuwid ay malayo pa (The straight road is still a far way to go)

Reading this front page article in the Philippine’s leading business newspaper is a reality check that we are still a far way to go before we have a corrupt free business environment. Its interesting to note a majority admit corruption is part of the cost of doing business. Over a third did not give importance to attending the required training or establishing whistleblowing hotlines even when anti-corruption policies and penalties are in place. Even more interesting is that fact majority have not given priority to participating in risk assessments or discussing with the internal auditor bribery and corruption issues. If this is how it looks from the private sector, you can just imagine how the public sector looks like. And while corruption exists in any country, the respondents think it is more common in the Philippines than compared to the rest of Far East Asia.

 

From BusinessWorld Philippines

June 11, 2014

Corruption widespread

ANTI-CORRUPTION efforts have to be ramped up in Philippine companies, professional services firm SGV & Co. yesterday said, with a global survey showing that Filipino executives believe the problem to be widespread and many even willing to bend the rules.

Over half, or 54%, of the 50 Filipino executives polled in Ernst & Young’s 13th Global Fraud Survey said corruption happens widely in business, similar to the average for emerging markets but worse than the 32% for Far East Asia.

An even larger 58% of the respondents — described as working at the country’s largest firms — “think certain unethical behavior can be justified to help a business survive an economic downturn,” SGV said in a statement. One in five, in particular, are amenable to misstating financial results.

While some nine in 10 said their firms already had anti-corruption policies (90%) and penalties (86%) in place, over a third had not attended the requisite training nor established whistleblowing hotlines.

More than half said they had not participated in risk assessments (52%) and interviews with an internal auditor (60%) to address bribery and corruption concerns.

“If senior management is not sufficiently engaged, significant risks may not be effectively managed or addressed. It also dilutes the tone from the top,” said Erick M. Vega, SGV partner for fraud investigation and dispute services, in the statement.

“Having the basic compliance elements in place is not enough. Organizations need to improve the effectiveness of their risk assessments-responding quickly to new and changing risks,” he added.

SGV is a member firm of Ernst & Young Global.

Mr. Vega pointed to cybercrime as an emerging risk and said that half of the local respondents downplayed this — a sign that beyond the chief information officer, the rest of the C-Suite may not be giving the threat enough importance.

For more than two thirds, or 64%, hackers represented the biggest cybersecurity threat, discounting the risk from employees, contractors and spying by foreign nations.

Companies, said SGV, should thus make use of forensic data analytics and boards hold management accountable for the quality of risk assessments. Also a priority are “explicit escalation procedures”, training tailored to seniority/positions and budget support.

“Companies, their boards and other stakeholders would be well served to deliver on these important priorities. With more focus on driving revenues from less mature markets, the challenges for companies are getting more complex. At the same time, regulators are working together across borders like never before to hold companies and their executives to account,” Mr. Vega said.

Globally, the Fraud Survey found that risks faced by businesses were not receding, as were the incidence of fraud and reported levels of corruption.

Among others, 6% of the 2,700 respondents worldwide were willing to justify misstating financial performance and 46% of chief financial officers (CFOs) — asked to pick from a list of questionable actions — said one or more were justifiable.

CFOs, general counsels, and sales and marketing executives were cited as more likely than other executives justify unethical activities when under pressure to meet certain targets.

“Unfortunately … our survey results over the past 10 years point toward a level of unethical conduct that businesses are unable to eradicate,” the Ernst & Young report states.

“They must instead to minimize its impact. They need to detect, investigate and remediate the actions of individuals within their organization who are prepared to act unethically.”

Article location : http://www.bworldonline.com/content.php?section=TopStory&title=Corruption widespread&id=89010

Big business to adopt a poor province to help develop inclusive growth

Here is a good idea to spur economic development and inclusive growth in country’s poorest provinces. Let’s see if this will work.

 

From the Philippine Star

Forget CSR, do something bigger

Monday, June 09, 2014
By Boo Chanco |
Forget CSR, do something bigger

The country’s top business conglomerates and richest Filipinos should really put their money where their mouths are on inclusive growth. They ought to forget tokenism which, in all honesty, their CSR projects are all about. They must do something bigger and whose impact can be seen and felt.
An honest to goodness program to attack poverty and make a difference is also in the self interest of our ruling social and economic elite. Not only will this improve the buying power of our masa for their products and services, it may also stop them from feeling deprived enough to resort to more drastic means to correct the social order. It is now happening in Thailand, it may take time to happen in the Philippines but eventually it will happen here too.
Last month, I suggested a summit meeting of the country’s top business leaders with P-Noy and Neda Chief Arsi Balisacan to discuss what can be done to address poverty. I was thinking that each of the conglomerates can adopt one poverty stricken province and help take that province out of the list of the country’s poorest. But nothing should stop the big guys from doing something on their own even without government involvement.
Depending on what list you look at, the following provinces are supposed to be among the country’s poorest: Apayao, Bukidnon, Camiguin, Eastern Samar, Lanao del Sur, Lanao del Norte, Maguindanao, Negros Oriental, North Cotabato, Northern Samar, Sarangani, Sultan Kudarat, Sulu, Western Samar, Zamboanga del Norte, Agusan del Sur, Davao Oriental, Mountain Province and Tawi tawi.
A final list of ten or fifteen can be made by NEDA and conglomerates can select from the list or be assigned one from it. The idea is to utilize the expertise and reach of the conglomerate to get the economy of the province to move up enough to get the province out of the most poverty stricken list.
The principle in this adopt-a-poor province approach is that the rich in our society is responsible for the poor, his brother’s keeper, to the point of bringing the poor to a level where he is able to fend for himself. We are all together in this ship called the Philippines and the holes in its hull that remain unattended will sink the entire ship, drowning even those in the luxury lounges.
Bayanihan is another principle involved here. We are all Filipinos and by nature, we are supposed to be ready to help those who are in need.
The problem with CSR is that most if not all CSR projects are driven mainly by image building motivations. These are managed by the public relations people who are more concerned with column inches scored than mouths that have been fed. Those Anvil Awards changed nothing in the wide divide between the rich and the destitute of this country.
CSR, despite some protestations to the contrary, is ultimately measured by how much the company’s reputation had been served. Companies with very good PR people who are able to extract the best exposure for even a small program are rewarded. I, myself, must confess some mea culpas in this regard. CSR may assuage the corporate conscience but stop there.
I am not saying CSR projects do not benefit the intended beneficiaries. But even worthwhile projects, like Ayala’s Centex, for example, tend to be mere token activities. These projects, while laudable, lack the proper scale to produce a visible impact on the immense problem of poverty.
Assigning one conglomerate to one poor province will probably give a noticeable development boost. A billion pesos worth of CSR projects scattered nationwide will be lost in the vast sea of poverty. That amount of money invested in one poor province may produce a noticeable difference in the lives of people whose faces a taipan can actually see. What is a billion pesos to our dollar billionaire taipans?
Indeed, if a conglomerate is able to choose a poor province whose development could be made integral to the company’s business activities, the effort may even be painless. A good example is a company with interests in tourism working with a poor province with tourism potential. Or farmers in a poor province can be made contract growers that will provide raw materials for the company’s manufacturing operations.
Nestlé is already helping some farmers grow good coffee beans and assures them a ready market. San Miguel turned a problem with land reform farmers into a business opportunity that benefits them all. They just have to significantly scale these projects and we need more such projects specially for the poorest provinces.
Sometimes, a poor province only needs the expertise of the company’s executives to help them strategize and implement programs. The government often has enough funds for development that only gets dissipated in scams like the Napoles operations. Maybe companies can harness their retired but highly experienced executives to provide those management skills to a poor province.
Of course this also assumes the ruling political dynasties in the poorest provinces will cooperate in the effort to uplift their economy. Development often works against the interests of the local kingpins but there should be enough poor provinces for an initial experiment of this concept if some LGUs are hesitant.
What is happening in Thailand should ring alarm bells among our political, social and economic elite. There was a time when Thailand was our ASEAN twin, same population, same economic situation.
Thailand overtook us and experienced tremendous growth. But the growth was monopolized by the Bangkok elite and left out the provinces where poverty was oppressive. It took just one crafty politician to use this non inclusive growth for his advantage. That’s what the red shirts vs the yellow shirts problem is all about.
Our problem is no less explosive. Data shows the income divide between the have’s and have-not’s remain wide, according to NSCB Secretary General Jose Ramon Albert in a Rappler article last year.
“We observe that the bottom 20 percent of families have a share of about 6% of the total national income, whereas, the upper 20% of income distribution, have a share of nearly 50% of total national income,” Albert said.
“The total income of the top 20 percent of Pinoy families, in other words, is approximately 8 times of the total income of the bottom 20 percent of Filipino families in the first semester of 2006, 2009, and 2012,” he added.
The worse thing that could happen for our country is for those who can do something choosing to do nothing or nothing much. Even if they think they can escape any social turmoil with a quick exit to foreign shores, they won’t have enough time to take their assets with them.
The elite should not feel comfortable in the inability of the NDF to mount a successful revolution. All it takes is one Hugo Chavez firebrand in a surprise coup to change everything by force.
As we eradicate corruption in the armed forces, what we are left with are idealistic officers and rank and file who are sensitive to class oppression. Remember that the firepower of our armed forces is in the hands of people who themselves come from the same social classes mired in poverty and are naturally sympathetic to their plight. Their frustration with the system can just explode.
We have this chance to do it right. We can’t depend on government to do it alone because it can’t. The Ayalas and the Chinoy taipans among others must show commitment to this country that has rewarded them and their families richly. And CSR alone won’t do it.

Good progress but more work needs to be done

Here’s what global insurance broker Marsh has to say about the government’s PPP program. Let’s hope the government decision makers for this program take note of the comment and continue to focus on what is needed to be done.

Phl on right track for infra dev’t – Marsh

MANILA, Philippines – The Philippines is making good progress to promote Public-Private Partnerships (PPP) as a way to meet the country’s insatiable demand for public infrastructure, but more work needs to be done, according to experts at a recent Marsh event in Manila.

Marsh, the leading global insurance broker and risk advisor, hosted a major conference on May 29 at the Mandarin Oriental, Manila, to debate and discuss the risks, opportunities, and trends for PPPs in the Philippines.

In his keynote address, Finance Undersecretary Jose Emmanuel Reverente highlighted the need for infrastructure development as a matter of nation building, and that the government’s early focus on PPPs as a way to way to encourage private participation has contributed to the healthy pipeline of bankable projects, which now stands at around 50 projects worth $22 billion.

“The government will continue to work on ways to streamline and standardize the PPP process, as well as provide incentives and safeguards to facilitate private investment, from both local and international parties,” said Undersecretary Reverente.

A panel discussion, which included experts from the Asian Development Bank, PJS Law, Macquarie Infrastructure and Real Assets, Marsh, and the Undersecretary himself, highlighted the need for more work on institutionalizing the use of PPPs, a better understanding of risk allocation, the availability of new credit risk solutions to de-risk projects, and issues around contract certainty.

Edwin Charnaud, chairman, Marsh’s Global Infrastructure Practice and moderator of the panel, commented: “The Philippines is a great example of a country recognizing the need for infrastructure funding early, and actively taking steps to put in place policies and regulations to promote private investment. More work clearly needs to be done to embed PPPs as a preferred infrastructure funding mechanism and to address quickly many of the risk-related issues that determine the attractiveness of the Philippines PPP program for domestic and foreign private sector investors. As the competition across Asia for infrastructure investment continues to intensify, all stakeholders need to draw from local and international experience for Philippines PPP projects to be an attractive proposition for investors.”

Growing NZ and PH business relationships

New Zealand and Australia have so close ties with each other, the differences between them are few. Its good to see the Kiwis are building new partnerships with Filipinos like those mentioned below. What I wish to see is a partnership that will share New Zealand expertise in agriculture/ agribusiness like breeding sheep and cattle livestock to take advantage of the abundance of land, labour and market demand in the Philippines. Imagine the huge opportunities possible doing it in the Philippines.

From the Philippine Star

NZ, Phl firms ink partnerships

Groser

MANILA, Philippines – Three New Zealand companies announced yesterday partnerships in the Philippines as part of a three-day mission to the country this week led by New Zealand Minister of Trade Tim Groser.

For one, New Zealand’s GNS Sciences and Energy Development Corp. (EDC), the Lopez-led geothermal company, signed a Memorandum of understanding for the provision of advisory services by GNS to help in EDC’s existing operations.

EDC executive vice president Ernie Pantangco said the MOU would help EDC in evaluating its reservoir and improving as an international company.

“It would help assess our reservoir and improve our processes,” Pantangco said.

GNS Science provides earth, geoscience and isotope research and consultancy services to create economic, social and environmental benefits.

Both GNS and EDC work together on Philippine steam field development as well as EDC’s geothermal interests in Peru, Chile and Indonesia.

Also, New Zealand-owned global health software company Orion Health will partner with The Medical City. TMC bought Orion Health’s Enterprise Electronic Health Record system, which will provide a unified view of patient data across the healthcare organization through an easy-to-use web-based interface that is accessible anywhere.

Finally, the New Zealand Technology Industry Association (NZTech) and the Information Technology and Business Process Association of the Philippines (IBPAP) signed an MOU to strengthen their relation and agree upon a growth plan for the technology services sector.

“The three deals reflect the existing business relationship between New Zealand and the Philippines,” said Hernando Banal, New Zealand’s Trade Commissioner to the Philippines.

Developing Start-ups needs developing the infrastructure too

 

If the Philippines needs to become a leader in promoting start-ups, the country has to improve its infrastructure starting with the internet speed.

From Sunstar.com.ph

PH Internet infrastructure scores poorly in assessment

Wednesday, June 4, 2014

THE Philippines needs huge improvements on its Internet connectivity, legal, delivery, and payment infrastructure, after having received low ratings in a startup assessment report released to the public on Tuesday.

The country scored a “developing” rating in its delivery and online payment infrastructure, below average in its Internet infrastructure and average for its legal infrastructure. The figures were presented by World Startup Report team lead Beryl Li at the ICT-BPM Conference held at the Marco Polo Plaza Cebu.

The developing rating, Li explained, means that a big portion of the country’s users have no access to the delivery and online payment infrastructure. But in places where it is available, it is often “prohibitively expensive and very unreliable.”

In countries like the US and Singapore, she said the payment infrastructure or the use of credit cards is widely practiced while security is ensured. Both countries received a “world-class rating” to all infrastructure components identified in the report.

One of the examples she cited is the US-based ecommerce site Amazon, which provides buyers a fast delivery of purchased products online.

The legal infrastructure in the Philippines was also examined. Li particularly noted that the 60-40 percent rule in business ownership in the country limits the entry of foreign investors.

“It (60-40 ownership) dissuades potential Filipino entrepreneurs from incorporating their companies in the Philippines. (Instead) they go to Singapore, US, or Hong Kong… (There is also) inefficiency in merging” Li noted in her report.

The Internet infrastructure in the Philippines, which got a below average rating by the World Startup Report, has been widely criticized because of its poor performance but expensive rates.

The Philippines, compared with countries in the Southeast Asian region, registered the slowest Internet speed of two megabits per second (mbps) on average. It ranked 158th out of the 190 countries surveyed worldwide. South Korea ranked first with an average Internet speed of 21.9 mbps followed by Japan with 12.8 mbps.

“If these areas will be resolved, we can attract more (investors and entrepreneurs) in the Philippines,” Li said during the conference’s panel discussion.

Aside from the identified infrastructure, funding for startups was also raised during the discussion.

Khailee Ng urged businessmen in Cebu to form a pool of “Cebu Angels” in the same way Manila has formed a private network of investors called ManilaAngels.

IdeaSpace president Earl Martin Valencia also told businessmen to consider investing in startups. “Businesses have a large role in the startup ecosystem because they can either be the investors, consumers, or partners,” he said.

Currently, the Philippines has roughly 10 angel investor groups, according to Department of Science and Technology’s Information and Communications Technology Office program manager Emmy Delfin.

To foster the startup environment in the country, Delfin disclosed that DOST ICTO, tech leaders and incubators are coming up with a national roadmap for startups, which is expected to be completed in five months’ time.

Help and support needed for Cebu start-up community

With my new focus on tech start-ups, its interesting to read this comment from Silicon Valley 500 start-ups accelerator Khailee Ng on the need for mentors and angel investors to support the growing start-up community in Cebu. Let’s see how we can support them.

 

From BusinessWorld Philippines

June 05, 2014

More start-up mentors, ‘angel’ investors needed

CEBU CITY — Malaysian start-up entrepreneur Khailee Ng said start-ups in Cebu stand to benefit from a pool of mentors and so-called “angel” investors to provide initial capital.

Mr. Ng, who has founded 500 start-ups, said during the recently concluded Cebu ICT/BPM Conference here that “Cebu’s impressive young talent needs the guidance of seasoned start-up mentors to unlock their full potential.”

He made his remarks ahead of Start-up Weekend Cebu where potential entrepreneurs can make business pitches on Friday and receive assistance in fleshing out their final presentations by Sunday.

The event, to be held at the University of Cebu on June 6-8, will begin with an “open mic” pitch and proceed to the formation of teams for a business plan presentation on the final day to be critiqued by a panel of experts.

The event is part of this year’s Cebu Business Month celebration. — John Paolo G. Bago

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