Filipino millennials expect improving Philippine economy

Almost half of Filipino millennials expect the Philippine economy to improve in the next 12 months, significantly down from 78 percent last year.

The 2019 Deloitte Millenial Survey revealed that fewer Filipino millennials are optimistic about the country’s political outlook at 41 percent down from last year’s 68 percent.

Just the same, Filipino millennials remain more optimistic than the rest of their peers: globally, less than a third of millennials expect their respective economies and social and political situations to improve in the next few months.

Filipino millennials are showing growing disillusionment with the traditional institutions, skepticism of business’ motives, and pessimism about economic and social progress.

Respondents were asked if they think traditional institutions — political leaders, religious/faith leaders, social media platforms, business leaders, traditional media journalists, and leaders of NGOs – are having a positive impact on them and the world around them, and if they trust these same institutions as reliable sources of information.

The group that received the most favorable view is NGO leaders: 58 percent of Filipino millennials believe they have a positive impact, yet only 28 percent of millennials say this same group is a reliable source of information.

In fact, millennials have little trust for traditional institutions across the board, with political leaders faring the worst: only 16 percent of millennials trust this group as an accurate source of information; 36 percent believe politicians have a positive impact.

Interestingly, traditional media and social media landed at about the same spot along the trust axis – 22 percent of Filipino millennials trust traditional media, and 21 percent trust social media as sources of reliable information.

But social media fared slightly better on the impact axis: 48 percent of Filipino millennials believe social media has a positive impact, while 38 percent say the same about traditional media.

“It’s a cause for concern when we see young people reporting that they have little trust for the organizations and institutions they’re supposed to look up to as leaders,” says Eric Landicho, Deloitte Philippines Managing Partner & CEO. “For our part as business leaders, we have the responsibility to understand what is fueling this distrust or wariness, and then to take appropriate steps to mitigate or address it.”

The survey also noted a growing gap between businesses and Filipino millennials. Asked what impact they think businesses around the world are having on wider society, 76 percent of Filipino millennials said the impact is positive, down from 93 percent last year.

Globally, 55 percent of millennials believe businesses have a positive impact on society. And this demographic is letting its wallet do the talking: 44 percent of Filipino millennials said that as a consumer, they have stopped their relationship with a business because its products or services negatively impact the environment or society. Globally, 38 percent of millennials did the same.

The generation that grew up with social media seems to have a conflicted relationship with the platform. Eighty-one percent of Filipino millennials say they are physically healthier and 73 percent believe they would be happier if they reduced the time they spend on social media, compared to 64 percent physically healthier and 60 percent happier globally.

Yet 52 percent of Filipino millennials admit they would be anxious if they could not check their social media accounts or had to give it up for a day or two, compared to 44 percent globally. Not surprisingly, 61 percent of Filipino millennials believe that social media does more harm than good, compared to 55 percent globally.

“You could say that this conflicted attitude towards social media is a reflection of the conflicting impact the platform has on the lives of its users,” says Landicho.

“On one hand, it allows people to connect more easily with others across geographical and societal divides, but it also exposes users to so many serious risks such as fraud and even cyber-bullying.”

Ninety percent of Filipino millennials worry about being the victim of online fraud, with 78 percent admitting that they feel they have no control over who has their personal data and how it is used. Thirty-five percent of Filipino millennials admit they would like to completely stop using social media, compared to 41 percent globally.

 

 

 

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US remains the Philippines’ biggest export market

The United States remains the biggest market of Philippine products as it posted the highest export value of $906.98 million or 6.5 percent to the total exports in April 2019.

The Philippine Statistics Authority (PSA) says exports to the US increased by 10.6 percent from $819.91 million in April 2018.

The other major export trading partners of the Philippines are China ($804.39 million), Japan,  $780.99 million; Hong Kong,  $704.82 million; and Singapore, $275.33 million.

China was the country’s biggest supplier of imported goods with 23.9 percent share to total imports in April 2019.  Import payments from China reached $2.15 billion, from $1.83 billion in April 2018.  Other major import trading partners were Japan, $827.73 million;  Republic of Korea, $710.41 million;  the US, $663.95 million; and Singapore, $555.89 million.

By economic bloc, majority of the country’s merchandise exports in April 2019, which comprised 49.7 percent of total exports or $2.74 billion, went to countries in East Asia, up by 1.8 percent.

East Asia was the biggest supplier of Philippine imports in April 2019, amounting to $4.35 billion or 48.3 percent of the total imports, down by 3.8 percent, from $4.52 billion in April 2018.

Total exports to the Asean-member countries dropped by 5.1 percent to $855.89 million or a share of 15.5 percent to total export value.

Commodities imported from Asean countries rose slightly by 0.6 percent to $2.30 billion or a share of 25.5 percent of the total import value.

 

Philippine banking sector lags behind other Southeast Asian countries

The Philippines is lagging behind other Southeast Asian countries such as Malaysia and Thailand in terms of financial access and efficiency.

A report by the Philippine Institute for Development Studies (PIDS) noted that the Philippine banking sector is smaller in size compared to Malaysia and Thailand, but comparable to that of Indonesia. Compared to Vietnam, however, the banking assets of Vietnam starkly increased from 1999 to 2016, although its ratio to gross domestic product (GDP) was just half of the Philippines in 1999.

In terms of financial access by a wide range of households and firms, the Philippines has “significantly lagged behind other comparable ASEAN member-states in terms of access to banking services,” said the PIDS report.

The report noted that the Philippines’ number of deposit accounts per 1,000 adults was even lower than Lao PDR’s in 2016, even if it had more bank branches per 1,000 adults than the latter.

The Philippines also trailed its neighbors in accessing mobile money service. In particular, there was significant growth in the use of debit cards and electronic payments. The more advanced ASEAN member-states such as Singapore, Malaysia, and Thailand, reported the highest access to digital financial services in 2017, followed by Indonesia, Vietnam, and the Philippines.

As for efficiency, the Philippines came out as having the lowest turnover ratio-defined as the value of domestic shares traded divided by their market capitalization-indicating the thinness of its stock market. Turnover ratio is highest in Thailand in recent years, followed by Vietnam, Singapore, and Malaysia.

The report explained that the higher the turnover ratio is, the more liquid and efficient the market. Few transactions taking place in a thin market can lead to price volatility and less liquid assets.

Nonetheless, the Philippine banking system fared better with respect to financial stability. In many measures of financial development, Vietnam has also overtaken the Philippines, but the latter has generally performed better than Indonesia. The study found that Singapore’s banking system is the most stable, followed by the Philippines and Malaysia.

The report noted that the banking sector in the Philippines has proven to be resilient in the face of global financial crises, underpinned by a strong regulatory and supervisory framework.

“However, a review of the state of the Philippine financial services sector indicated that there has been no significant transformation over the past three decades. A review of the financial regulatory framework also showed that key domestic regulations remain restrictive,” report said.

The report recommended a more diversified, dynamic, competitive, and resilient financial system that offers a wider range of financial products and services both to consumers and businesses through more efficient delivery channels.

The report also suggested a comprehensive and detailed long-term strategic action plan for the Philippine financial sector to help identify reforms to address the weaknesses, and actualize a truly inclusive financial sector that is supportive of the country’s economic growth and development.

Countries urged to make teaching profession more intellectually attractive

The Organization for Economic Cooperation and Development (OECD) has urged countries to make the teaching profession more financially and intellectually attractive to meet a growing demand across the world for high-quality teachers.

Based on the OECD’s Teaching and Learning International Survey (TALIS), the report, “Teachers and School Leaders as Lifelong Learners”, says that attracting the best and brightest to the profession will be essential to ensure that young people are given the skills they will need to thrive in tomorrow’s world of work.

About 260,000 teachers and school leaders at 15,000 primary, lower and upper-secondary schools from 48 countries and economies took part in this third edition of the survey. Through the voices of teachers and school leaders, it aims to help strengthen the knowledge and skills of the teaching workforce to support its professionalism.

The findings show that much still needs to be done to give teachers better opportunities to prepare for tomorrow’s world. Little more than half of teachers across participating OECD countries received training in the use of technology for teaching, and less than half felt well prepared when they joined the profession. Yet two thirds of teachers report that the most useful professional development they took part in focused on innovation in their teaching.

“The acceleration of technological, economic and social changes makes it imperative that our education systems adapt almost in real time,” said Ludger Schuknecht, OECD Deputy Secretary-General. “Policy makers should work closely with teachers and school leaders and leverage their expertise to help students succeed in the future world of work.”

“The quality of an education system can never exceed the quality of its teachers,” said Andreas Schleicher, OECD Director for Education and Skills.

“Governments should empower their teachers and school leaders with the trust and autonomy they need to innovate and instil a collaborative culture in every school. They also need to better recognise the importance and value of involving teachers in designing better practices and policies to create classrooms fit for the future.”

 

Airlines operating at NAIA face more sanctions for misusing slots

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The Department of Transportation (DOTr) was warned airline operators at the Manila international airport that they face more stringent sanctions for misusing airport slots.

A joint memorandum signed by the Manila International Airport Authority (MIAA), the Civil Aviation Authority of the Philippines (CAAP) and Civil Aeronautics Board (CAB) would be implemented to help decongest the NAIA.

Under joint memorandum, the definition of slot misuse has been expanded to cover the holding of slots that the airline does not intend to operate, as well as the holding of slots for an operation other than planned for the purpose of denying capacity to another aircraft operator.

Also constituting slot misuse are the requisition of new slots that the airline does not intend to operate, and the requisition of slots for an operation other than indicated with the intention of gaining improved priority.

A timeslot committee will review the slot coordinator’s findings of the slot monitoring performance of airlines. The slot coordinator is tasked to initiate any disciplinary action against an airline that intentionally misuses its allocated slots.

Stricter sanctions will be imposed to provide an effective implementation of efficient slot utilization.

An airline that operates services without the corresponding timeslots, on a regular basis, will not be entitled to historical precedence for either the actual times they operated or for the allocated times.

An airline that continues to misuse or inefficiently use timeslots may be relegated to a lower priority in future slot allocations.

If an airline, despite being sanctioned, continues to misuse or inefficiently use timeslots, the timeslot committee will have the authority to recall slot approval or suspend slot allocations of the erring airline.

DOTr Secretary Arthur Tugade commended MIAA, CAAP and CAB for their action, noting that it is high time for airlines to take responsibility.

“Landing on an airport is a privilege. To intentionally disregard the value of these airport slots is unethical, and an aggravation to the current state of congestion at NAIA. We have to recognize the domino effects of these slot misuses, which ultimately result in the massive inconvenience to our air passengers,” Secretary Tugade stressed.

Recent years saw a substantial increase in the number of passengers, flights, and airport slots per hour at the NAIA, resulting in a compounded state of congestion.

NAIA passenger traffic stood surged from 36.5 million in 2016 to 45 million last year, an increase of 8.4 million passengers or 23.08%.

The frequency of flights also grew by over 14,000 (5.75%) as airport slots per hour increased by 22.2% from 36 to 44.

Philippine domestic trade up 8.4% in 1stQ

The total quantity of domestic trade during the first quarter of 2019 increased by 8.4 percent to 5.54 million tons from the 5.11 million tons recorded in the first quarter of 2018.

Food and live animals commodities led in terms of quantity, with 1.19 million tons or 21.5 percent share to total quantity of domestic trade. Animal and vegetable oils, fats and waxes commodities was the least with 0.04 million tons.

Almost all of the commodities were traded through coastal water while the remaining commodities, through the air.

Among the regions, Northern Mindanao posted the highest quantity of traded commodities of 1.59 million tons during the first quarter of 2019 followed by Central Luzon 1.3 million tons and National Capital Region (NCR) with 720,000 tons.

The total value of domestic trade amounting to PHP173.75 billion (US$3.36 billion) during the first quarter of 2019 slightly decreased by 0.6 percent from the PHP174.88 billion total value in the same quarter of 2018

Machinery and transport equipment continued to account for the highest value of traded commodities during the first quarter of 2019, amounting to PHP59.74 billion or 34.4 percent of the total value of domestic trade followed by food and live animals with a value of PHP38.40 billion and manufactured goods classified chiefly by material with PHP22.49 billion.

Philippine companies engaged in health and social work business up 2%

The number of Philippine companies that engaged in health and social work activities has increased by 2 percent to 1,096 in 2017 according to the annual survey of Philippine business and Industry.

Among the industry groups, hospital activities led the sector in terms of number of establishments with 699 or 63.8 percent,followed by medical and dental practice activities with 283 establishments (25.8%) and other social work activities without accommodation with 52 establishments (4.7%).

Among the regions, Metro Manila had the most number of establishments at 322 or 29.4 percent of the total followed by CALABARZON (16.1%) and Central Luzon (9.1%).

The number of employees in the health and social work activities sector rose by 3.3 percent to 145,739 workers. Of the total workforce, 144,963 workers or 99.5 percent were paid employees while the remaining were working owners and unpaid workers.

By industry group, hospital activities employed the highest number of workers of 124,870 or 85.7 percent of the total employment followed by medical and dental practice (10.3%) and other social work activities without accommodation (2.2%).

The National Capital Region (NCR) topped other regions in generating jobs for 45,401 workers (31.2%) followed by CALABARZON (15.7%)  and Central Visayas (9 %).

The sector recorded an average of 133 workers per establishment with hospital activities posting the highest average workers per establishment of 179  followed by other social work activities without accommodation with 61 workers.

The total compensation paid by the health and social work establishments increased by 2.2 percent to  PHP33.6 billion (US$6.5 billion) in 2017 which translates to an average annual compensation of PHP232,000 (US$4,510) higher by 2.2 percent from the PHP227,000 average annual compensation per paid employee in 2016.

 

 

 

 

 

 

 

 

Financial sector posts fastest revenue growth of 14.6% in 1stQ 2019

The financial sector posted the fastest revenue growth of 14.6 percent in the first quarter of 2019 compared to 2018 followed by transportation, storage and communication with 14.5 percent, trade (14.4 percent) and real estate with 12.4 percent.

The Philippines’ gross revenue index expanded by 8.1 percent in the first quarter of 2019 higher than the 7.3 percent growth in the same period in 2018, according to the Philippine Statistics Authority (PSA).

The total employment Index grew by 1.7 percent boosted by transportation, storage and communication with 4.3 percent growth,  trade (2.7 percent), manufacturing (2.5 percent), mining and quarrying (2.3 percent), finance (1.6 percent), real estate (1.3 percent), electricity, gas and water supply (1.2 percent) and other services with 0.8 percent. On the other hand, employment index in the construction industry declined by 0.3 percent.

The electricity, gas and water supply sector recorded the fastest growth in compensation index with 9.8 percent. The total compensation index grew by 4.6 percent in the first quarter of 2019 compared to 2018.

Industries that contributed to the growth in compensation index were mining and quarrying with 9.2 percent, construction (8.6 percent), manufacturing (7.7 percent), other services ( 4.7 percent), finance (2.4 percent), real estate (1.9 percent), transportation, storage and communication (1.8 percent) and trade with 0.3 percent.

The compensation per employee index grew by 2.9 percent. The acceleration was attributed to the uptrend in construction (8.9 percent), electricity, gas and water supply (8.6 percent), mining and quarrying (6.8 percent), manufacturing (5 percent), other services (3.8 percent), finance (0.8 percent) and real estate (0.5 percent).

Philippines’ total savings up 4.4% in 2018

The Philippines’ total savings increased by 4.4 percent in 2018 to Php4.4 trillion (US$85.5 billion) at current prices.

The Philippine Statistics Authority (PSA) reported that among the four institutional sectors, the highest share in savings came from non-financial corporations at 57.6 percent followed by financial Corporations at 28.5 percent, general government (11.3 percent) and households including non-profit institutions serving households (NPISH) at 2.6 percent.

In terms of contribution to gross domestic product (GDP), non-financial corporations continued to account for the highest share at 51.5 percent in 2018 followed by households (32.7 percent), financial corporations (8.3 percent) and general government (7.5 percent).

The PSA report was based on the consolidated accounts and income and outlay accounts which present a summary of transactions and relationships among the various flows of the economy at current prices.

Included in the report are production, consumption, income, gross accumulation, and economic transactions with the rest of the world.

Philippine enterprises urged to integrate biodiversity into their operations

The ASEAN Centre for Biodiversity (ACB) has urged Philippine enterprises to start mainstreaming biodiversity into their operations rather than just making it a part of their corporate social responsibility.

Mainstreaming biodiversity is the process of embedding biodiversity considerations into the policies, strategies and practices of businesses so that biodiversity is conserved and sustainably used, says Dr. Theresa Lim, executive director of ACB.

She told a recent environment forum organized by the Philippine Chamber of Commerce and Industry (PCCI) that practicing environmental conservation and biodiversity mainstreaming makes good business sense because “nature provides business with the fundamental components for long-term profit and survival.”

Lim said many industries are directly reliant on biological diversity for sustenance. The global multibillion-dollar tourism industry, including ecotourism, is among them, and in the Philippines the development of this sector is assured only if biodiversity is sustained and preserved.

The Philippines has one of the most amazing biodiversities in the world, and the richness and uniqueness of our ecosystem needs to be protected because it is key to the survival and growth of businesses and industries, says Lim.

She noted how the Philippines is part of the Coral Triangle, often referred to as the Amazon of the Ocean, which contains 75% of the world’s reef-building corals.

She added that a large percentage of all species in the world can only be found in the Philippines. For instance, 45% of birds are found only in the country, 59% of mammals, 60% of flora, 77% of reptiles, and 81% of amphibians.

But other sectors are also connected to biodiversity because nature provides the “ecosystem services” they need. These include provisioning services, such as how forests provide bignay, a wild fruit used to make wine; raw materials for clothing like the bakong fibers and water. As an example, Lim said wild fruits abound in the Philippines and “it would be good to see how these could be sustainably utilized so that you preserve the forest and at the same time you earn livelihood from it.”

Other services provided by the ecosystem include regulating services, such as the way mangroves and wetlands regulate the rise and fall of the sea level and forests regulate temperature, helping mitigate climate change that can be disastrous for industries.

The ecosystem also provides support services such as through bats and bees that act as pollinators to propagate the seeds of fruits and the pollen from flowers and trees. Lim mentioned durian as an example of local fruits that rely on the help of these pollinators.

“Biodiversity is good for business because by integrating biodiversity considerations into company policy, operations, and management systems, a company can limit project delays and enhance relationships with stakeholders, and improve its reputation as a responsible operator.”

Lim also urged businesses to analyze the impact of their decisions and operations on the biodiversity and ecosystem functions and services, and to prepare action plans for integrating biodiversity into their operations.

The goal should be to maximize the benefits to biodiversity of their business and vice versa, while minimizing the impacts on biodiversity of their business, Lim added.