4 Contents January 2020 | Vol 95 | No 01
AmCham News Organizational Sections 10 New AmCham Associate Partners 06 About AmCham Philippines Profile 08 Officers & Directors 11 AmCham Corporate Partners 10 AmCham Corporate Partners 12 How to be an AmCham Member/ 12 How to be an AmCham Member/ Corporate Partner Corporate Partner 14 Chapters & Advocacies Business of Business 16 Committees 46 The Philippines’ Demographic Sweet 18 AmCham Staff Spot 29 Members’ Birthdays: January - February 61 Guidelines for Submission of Articles Company News 62 Index to Advertisers 50 Coca-Cola Philippines recognized as 62 AmCham Social Media Accounts Sustainability Trailblazer by WWF Philippines Upcoming AmCham Events Cover Story (01/08) Eradication of Poverty through Agripreneurship 22 Prospects for the Philippine Economy: 2020 & Beyond (01/14) Equity Compensation for U.S. Taxpayers Living Abroad 26 Arangkada Philippines: Turning on the T.A.P. (01/23) AmCham Visayas General (Tourism, Agribusiness, and Power) Membership Meeting & Induction of Officers 30 A Business Perspective on the Philippine Economy (02/21) 37th Honor Your Staff Day 37 House of Representatives: An Engine (03/01) 9th AmCham Foundation for Reform ScholaRUN - Eat & Run
Editorial 20 Looking forward
Feature 42 Year of the Rat 58 Marinduque Rising 52 JCCI President & CEO Shares Her Secrets to Successful Career Development
www.facebook.com/ AmCham.Philippines AmCham Philippines | January 2020 5
THIS MONTH'S ISSUE
The year 2020 is not only a new Year, it is a new Decade. There is much in store for AmCham members this year. (See the Editorial on page 20).
In this issue we also present some interesting facts on the Economy, as well as the Lunar year of the Rat. Kung Hei Fat Choy!
Cover Design by Eya Martinez Photo from Pixabay
MISSION STATEMENT The Chamber exists to serve the needs and wants of Filipino and U.S. businesses through the participation of members in promoting their long-term objectives, while fostering closer relationships between the two countries and contributing to the civic and economic development of the Philippines
EDITOR-IN-CHIEF: Ebb Hinchliffe PUBLICATIONS CONSULTANT/EDITOR: Leslie Ann Murray COMMUNICATIONS MANAGER: Christina Tuguigui ADVERTISING HEAD: Chet Guevara LAYOUT EDITOR: Eya Martinez PHOTOGRAPHERS: Eya Martinez and Roy Fulgado PUBLICATIONS COMMITTEE CHAIRPERSONS: Manuel R. Guillermo and Ernie Cecilia PUBLICATIONS COMMITTEE MEMBERS: Atty. Emmanuel T. Santos and J. Albert Gamboa PUBLISHED BY: The American Chamber of Commerce of the Philippines, Inc. MEMBER: Publisher Association of the Philippines, Inc.
All rights reserved. AmCham Business Journal is a general business magazine published monthly by The American Chamber of Commerce of the Philippines, Inc., with offices at 2nd Floor, Corinthian Plaza, 121 Paseo de Roxas, corner Gamboa St., Legazpi Village, Makati City 1229 (C.P.O. Box 2562, Makati City 1265), Philippines; Telephone: (632) 8818-7911 to 13; Fax: (632) 8811-3081 / 8811-3184; Emails: [email protected] / [email protected]; Website: www.amchamphilippines.com. Publication Registration No.: ISSN-0116-452X
All views expressed in all articles are those of the authors and not of The American Chamber of Commerce of the Philippines, Inc. The American Chamber of Commerce of the Philippines, Inc. accepts no liability for the accuracy of the data or for the editorial views contained in the articles. Publication of unsolicited articles is at the sole discretion of the Publications Committee.
To adhere to publication deadlines, the Publications Committee reserves the right to defer for subsequent publication any submission due to matters of space or time constraints.
Further, the AmCham Publications Committee reserves the right to refuse any submission due to style or content, or context, which may be in confl ict with AmCham mission.
No article or any content thereof may be reproduced in any manner or form without the prior written consent or authorization of The American Chamber of Commerce of the Philippines, Inc.
Entered as second-class mail at the Manila Post Offi ce on May 24, 1921 and on December 10, 1945. Re-entered as second-class mail at the Makati Central Post Offi ce on May 07, 1992 and under Permit #534 dated May 24, 1993. 6 | Header
8 | AmCham Officers & Directors
The American Chamber of Commerce of the Philippines, Inc. Putting your Business Forward Since 1902
H.E. SUNG Y. KIM U.S. Ambassador of the Philippines Honorary Chairman
PETER HAYDEN GEORGE M. DRYSDALE Capital One Philippines Support Services Corp. Marsman Drysdale Group President DONALD R. FELBAUM Optel LTD. BRUCE WINTON ROBERT M. SEARS Marriott Hotel Manila American Historical Collection Foundation, Inc. 1st Vice President Directors, Ex-Officios
ROBERTO BATUNGBACAL EBB HINCHLIFFE Dow Chemical AmCham Philippines 2nd Vice President Executive Director
PHILIP SOLIVEN ATTY. AILEEN TOLOSA-LERMA Cargill Philippines, Inc. Romulo Mabanta Buenaventura Sayoc de los Angeles Treasurer Law Office Corporate Secretary JOSE VICTOR EMMANUEL DE DIOS General Electric Philippines RALPH REUBEN MORALES Texas Instruments Philippines Inc. MARK LWIN President, AmCham North Luzon Chapter AIG Phils. Insurance, Inc. FRANK THIEL Quezon Power BRIAN CONNELLY Marco Polo Plaza Cebu ANDREAS RIEDEL President, AmCham Visayas Chapter Pfizer, Inc. ARIEL LACSAMANA ATTY. LEONCIO VILLA-ABRILLE 3M Philippines Casareo Villa-Abrille Development Corp. BELINDA RACELA President, AmCham Mindanao Chapter Chevron Malampaya LLC WINN EVERHART MARDIE C. TORRES Coca-Cola Far East LTD. AmCham Foundation Directors Acting Executive Director
2nd Floor, Corinthian Plaza Building, 121 Paseo de Roxas corner Gamboa Street Legazpi Village, Makati City 1229 Tels.: (632) 8818 7911 to 13 • Fax: (632) 8811 3081 Email: [email protected] • Website: www.amchamphilippines.com
10 | AmCham News
New AMCHAM Associate Partners Profile
VISAYAS Eastern Communications is a Telco and ICT Solutions company providing an extensive portfolio of services that include Data, Internet, Voice, Managed Services, Data Center and Cloud Services and Cyber Defense Services. We are the first communications services provider in the Philippines when we were commissioned by the Spanish government to provide the country’s first telegraphic services.
Over 140 years later, we have evolved into a full-service provider of world-class telecommunications services. We continue to be the solutions partner of choice for the biggest industry players in the country. We are champions of High Tech, High Touch.
As pioneers in the industry, we deem it our duty to raise the clarion call, “it’s time to bring back the human connection in the business of communications technology” In this we seek to differentiate ourselves with the other industry players: that on top of solid and reliable technology, we delight the customer with our brand of personalized service because the human connections are equally important.
We take pride in being the first Philippine telecommunications company to receive the ISO 9001 mark for our business operations and CE 2.0 certified for our Ethernet Services. These recognitions show our ability to deliver cutting-edge products with service that’s unwavering, unflagging, and undeniably strong.
MINDANAO Dusit International, in partnership with Torre Lorenzo Development Corporation, presents three premium destinations in Davao.
dusitD2 Davao is a contemporary city hotel located at the heart of Davao City’s emerging business district, only 15 minutes away from the airport. It features 120 fully-appointed D’Luxe and Suite rooms. Guests have access to courtyard-style swimming pools, Namm Spa, an exclusive club lounge, and DFiT.
The Dusit Thani Residence Davao offers 174 well-appointed studios and suites that come with complete amenities including a fully-furnished dining room and kitchenette with built- oven, induction stove and dishwasher for utmost convenience.
The Dusit Thani Lubi Plantation Resort is an exclusive island resort located just off the coast of the Davao Gulf. It has 18 luxury two-bedroom seafront villas with private terraces and open-air garden bathrooms. Amenities include an all-day restaurant, beachfront infinity pool, fitness center, spa, water sports facilities, events hall, and a church.
The University of Mindanao (UM) is the first private, non-sectarian university in Mindanao. It has three campuses at its main location in Davao City and seven provincial branches.
UM offers diverse horizontal and vertical academic options that befits time. After 73 years, UM is the largest higher learning institution in the region to offer49 graduate programs, 66 undergraduate programs, 1 certificate program and basic education.
UM was founded by Atty. Guillermo Torres Sr. in July 1946 and named then as Mindanao Colleges (MC). Its primary goal was to provide learning opportunities to the indigenous natives and pioneers of Mindanao. On December 1966, MC was chartered as the University of Mindanao, the first private, non-sectarian university in Mindanao.
With deep inspiration from his parents, the eldest son, Dr. Guillermo P. Torres, Jr. took over the UM presidency and chairmanship in 2007 and continue the legacy that his parents had started. AmCham News | 11
AMCHAM CORPORATE PARTNERS
AmCham Philippines has been the longest-serving and most vibrant American Chamber in Asia. Recognized as the voice of business since 1902.
The AmCham Corporate Partnership offers companies year-round benefits, including expanded access to AmCham core membership resources for an enhanced leadership status within the community, as well as greater intelligence, access, influence, and exposure.
For more information, please contact AmCham’s Corporate Partnership Consultant. Email: [email protected] / Tel: (+632) 8818 7911 loc. 218 12 | AmCham News
Corporate Partner The AmCham Corporate Partnership is a prestigious category which provides exclusive access, exposure, benefits, and support from the Chamber. For inquiries please contact Christina Winton at [email protected].
Regular Firm Membership Associate Individual Membership *A – Php 55,000 | B – Php 45,000 Php 33,000 (*+Php 12, 500 for New Members, deductible from your succeeding (*+Php 7, 500 for New Members, deductible from your succeeding membership membership dues in AmCham) dues in AmCham) This membership is available to corporations, partnerships, proprietorships, This membership is available to individuals residing in the Philippines and other business organizations and enterprises, which are registered who are non-American citizens and who are not eligible for any other and qualified to do business in the Philippines, with 30% or more of the membership classifications. ownership held by American citizens and/or corporations. In a partnership, the American partner/s must have a share of interest of 30% or more. In the case of non-stock corporations and un-incorporated associations, at Non-Profit and Government Membership least 30% of the voting members must be Americans. Php 22,000 In this classification, the firm shall be represented by an accredited (*+Php 6, 250 for New Members, deductible from your succeeding membership individual who must rank as a senior executive but may not be necessarily dues in AmCham) an American citizen. This membership is available to: non-profit, charitable, civic, educational, religious and eleemosynary organizations, associations and institutions in the Philippines. Under this classification, an individual accredited by Regular Individual Membership the organization shall serve as a representative. Employees of the U.S. Php 33,000 Federal Government can also avail of this membership category. (*+Php 7, 500 for New Members, deductible from your succeeding membership dues in AmCham) This membership is available to individual persons residing in the Non-Resident Membership Philippines who are American citizens and who are not eligible for any Php 22,250 other membership classifications. (*+Php 6, 250 for New Members, deductible from your succeeding membership dues in AmCham) This membership is available to firms and individuals who are doing Associate Firm Membership business outside the Philippines but would like to support the Chamber *A – Php 55,000 | B – Php 45,000 in its activities and events. (*+Php 12, 500 for New Members, deductible from your succeeding membership dues in AmCham) This membership is available to firms that are qualified to do business in Additional Firm Membership the Philippines, with 71% or more of the ownership held by citizens or Php 5,000 corporations which are non-Americans. The firm shall be represented by This membership is available to any employees of a firm member residing an accredited individual who must rank as a senior executive and may in the Philippines who wish to be recognized as an official member of be of any nationality. the Chamber.
For queries please contact AmCham’s Membership Manager. *A- Annual Revenue of US$ 5 million and above Email: [email protected] / Tel: (+632) 8818 7911 loc. 207 B - Annual Revenue of US$ 4.9 million and below
14 | AmCham Chapters & Advocacies
THE AMERICAN CHAMBER OF COMMERCE OF AMERICAN DESK AT THE BOARD OF INVESTMENTS THE PHILIPPINES, INC. (Established 1992) (North Luzon Chapter - 2015) RALPH REUBEN MORALES EBB HINCHLIFFE Texas Instruments Inc. Director President MC BENSAL JOAN SABROSO American Desk Specialist Chapter Office Manager 385 Sen. Gil Puyat Avenue, Makati City Claro M. Recto Highway, Clark Freeport Zone Tels.: (632) 8895 8851; 895 3918 • Fax: (632) 8896 2315 Mabalacat City, Pampanga 2010 Emails: [email protected] Telefax: (632) 8811 3081 • Mobile: +63 (927) 912 3248 [email protected] Email: [email protected]
THE AMERICAN CHAMBER OF COMMERCE OF FILIPINO-AMERICAN MEMORIAL ENDOWMENT, INC. THE PHILIPPINES, INC. (Founded 1986) (Visayas Chapter - 1987) BRIAN CONNELLY LT. COL. ARTEMIO MATIBAG Marco Polo President President LESLIE ANN MURRAY BRENDA LISEN Trustee Chapter Office Manager KV ROJAS RUTHCEL ARAGON F.A.M.E. Specialist Chapter Marketing Manager c/o The American Chamber of Commerce of the Philippines, Inc. Unit 303, Clotilde Commercial Center 2nd Floor, Corinthian Plaza Building, 121 Paseo de Roxas M.L. Quezon Street, Casuntingan, Mandaue City 6014 corner Gamboa Street, Legazpi Village, Makati City 1229 Tel.: +63 (32) 316 1093 • Fax: (032) 232 2373 C.P.O. Box 2562, Makati City, 1265 Mobile: +63 (917) 323 1972 Tels.: (632) 8818 7911 to 13 • Fax: (632) 8811 3081 Emails: [email protected] Email: [email protected] [email protected] ; [email protected] Website: www.filipino-americanmemorials.org
THE AMERICAN CHAMBER OF COMMERCE OF THE AMERICAN CHAMBER FOUNDATION THE PHILIPPINES, INC. PHILIPPINES, INC. (Mindanao Chapter - 1988) (Founded 1985) ATTY. LEONCIO VILLA-ABRILLE EDWIN FEIST Casareo Villa-Abrille Development Corp. Advanced Nutrition Technology President President
ANNIE QUITAY MARDIE C. TORRES Chapter Office Manager Acting Executive Director
2nd Floor, Door 207-208, Don Cesareo, Villa-Abrille Building 16th Floor, Sagittarius Conominium Jacinto corner Juan Luna Street, Davao City 8000 111 H.V. Dela Costa, Salcedo Village, Makati City 1227 Mobile: +63 (916) 876 7729 Trunkline: (632) 8816 3716 • Directline: (632) 8867 2426 Emails: [email protected] E-mail: [email protected] [email protected] Website: www.amchamfoundation.com
16 | AmCham Committees
COMMITTEE Chairman INDUSTRY DEVELOPMENT SPECIALIST Agribusiness Philip G. Soliven / Atty. Mel Hernandez KV Rojas Education Terry Farris Lia Daus Energy & Power Atty. Jocot de Dios / Frank Thiel Mark Rabago Environment and Urban Development Jonah de Lumen-Pernia Mark Rabago Financial Services, Taxes & Tariffs Atty. Jules Riego / Rombit Co KV Rojas Healthcare and Wellness Jaeger Tanco / Donald Felbaum Lia Daus Human Capital & Resources Ernie Cecilia / Grace Sorongon Lia Daus Information & Communications Technology Donald Felbaum / Frank Holz Mc Bensal Infrastructure & Logistics Jaime Faustino / John Peterson Mark Rabago Intellectual Property Rights Atty. Divina P.V. Ilas-Panganiban, LL.M. KV Rojas Atty. Princess Ascalon Legislative John D. Forbes / Atty. Elaine Collado Mc Bensal Manufacturing Dan Lachica / Chris Ilagan Mark Rabago Pharmaceutical Andreas Riedel KV Rojas Professional Women of AmCham Belinda Racela / Atty. Melanie Lagera Lia Daus Security & Disaster Resources Group Simoun Ung / Pete Troilo Lia Daus Sustainability Atty. Mimi Malvar / Mardie C. Torres KV Rojas Tourism & Hospitality Robert Blume / Dorothy Drysdale Mc Bensal Trade & Investment Mario Biscocho / Douglas Fowler Mc Bensal Young Professionals of AmCham Atty. Paolo Villonco Mark Rabago
INTERNAL Membership Roland dela Cruz / Martin Marty Vicky San Juan-Co Kapihan Ebb Hinchliffe / Leslie Ann Murray Mc Bensal • Networking / General Membership KV Rojas Meetings • Welcome Breakfast Vicky San Juan-Co Chapters Ebb Hinchliffe Vicky San Juan-Co • North Luzon Joan Sabroso • Visayas Brenda Lisen Ruthcel Aragon • Mindanao Annie Quitay Communications & Publications Manuel R. Guillermo Jim McGinness Ernie Cecilia Leslie Ann Murray Chet Guevara Eya Martinez Corporate Partners Ebb Hinchliffe Christina Winton
ACTIVITIES /ADVOCACY / AFFILIATE Amcham Foundation Edwin D. Feist Mardie C. Torres AmDesk at The BOI Ebb Hinchliffe Mc Bensal Business Leadership Program (BLP) Jun Salipsip / David Caldwell Pinky Jamili Filipino-American Memorial Endowment LT. Col. Art Matibag / Leslie Ann Murray KV Rojas (F.A.M.E.) The Arangkada Philippines Project John D. Forbes Mc Bensal (TAPP II) Washington Relations / APCAC Rick Santos / George Drysdale Divina Combes
18 | AmCham Staff
Assistant to the Executive Director Divina Combes
Receptionist Celine Laurel
Drivers Rick Peji Ernie Aala
Corporate Partnership Consultant Christina Winton
Membership Manager Vicky San Juan-Co
North Luzon Chapter Offi ce Manager Joan Sabroso
Visayas Chapter Offi ce Manager Brenda Lisen
Visayas Chapter Marketing Manager Ruthcel Aragon
Mindanao Chapter Offi ce Manager Annie Quitay
Program Manager, KV Rojas Committees and Industry Relations
Industry Development Specialists (IDS) Mc Bensal Lia Daus Mark Rabago
Government Liaison Mc Bensal
Human Resources / Administrative Offi cer Rachel de Guzman
Administrative Services Roy Fulgado
Accounting Manager Patricia Estrella
Accounting Head Elmer Yanuaria
Cashier Dominador Borres
Accounts Receivable Specialist Cristina Teves
Communications Consultant Jim McGinness
Publications Consultant / Editor Leslie Ann Murray
Advertising Head Chet Guevara
Layout Editor Eya Martinez
Business Leadership Program Manager (BLP) Pinky Jamili
Librarian Aurora Galvez
20 | Editorial
Looking forward
A major concern of the A-Team of AmCham is how to stay relative in this fast changing world.
Questions our office is often asked are: • How many people are employed by American companies in the Philippines? • What is the total revenue of our membership? • What are total exports of our members?...etc
There is no easy way to answer any of the questions and the usual answer is “no idea”.
We regularly send out membership surveys which are always only a small sampling of the total of the many questions posed. We are lucky to get a 20% response We also are looking at combining several of our rate. This definitely isn’t enough to validate any results. committee meetings into one and expanded into a larger Therefore, we will be conducting several smaller “sector forum. It would thus make it lucrative to make the trip focused” surveys in the first quarter, to be better able to once a quarter, but for a possible six hour event. respond to questions from members, as well as those seeking information from abroad. Another item to keep an eye out for is training. Many of our members have asked for a training department within The first survey is already in process m on the Pharma the Chamber. We will begin offering various courses for our sector. This survey will then be followed by surveys on members in the 1st quarter of 2020. The first session will other sectors: Manufacturing, BPO, Financial Services be on “Security”, but several others including “Financials and so forth. for the Non-Financial”, “Advanced ‘Microsoft Office’”, “Cyber-Security and Data Privacy” to name a few. All At least, for example, with results of the specifically will be certified courses, with an accredited organization targeted Pharma sector, we can say we have “no idea providing the instruction. in TOTAL of American companies, but we DO know that the Pharma companies of AmCham have XXX number of Regionally, we will continue to grow. Expansion into employees and generate $$xxxx in revenue”. Western Visayas was looked at in 2019 but was postponed until 2020, in order to further develop our Chapters in By the end of the year we can combine all the surveyed North Luzon, Visayas and Mindanao. While we continue sectors and have a much closer estimate to the impact to expand those, we also will be looking at those areas our members have on the economy of the Philippines. in which AmCham is not currently active, including Iloilo, Bacolod and Aklan (Boracay) in Western Visaysas. However, we need your assistance. When we send you the survey, please reply. Finally, we are pleased to announce that AmCham has reached an agreement with US AID on a project that In addition, there are several other changes coming will keep our Arangkada advocacy alive. The project is in 2020. called RESPOND and as you read the article on TAPP in this month’s magazine you will get a glimpse of what it How do we reach our members in the outlying areas is all about. Future editorials and articles in our Business of Metro Manila? The traffic situation continues to be a Journal will keep you updated. major reason some of our members are not attending our events. It is difficult to travel for an hour or longer, each These are only a few things that make 2020 an exciting way, to attend a two hour event at AmCham. Members time to be a member of AmCham. Fasten your seat belts from Alabang, Cavite, Quezon City, Pasay, Mandaluyong and join us for the great ride ahead. or Pasig, are seldom attending our meetings. How do we provide value to those members? One possible solution is to use technology, via Zoom or other methods, to take our meetings to them. Or perhaps, in some case, hold our Ebb Hinchliffe meetings in these areas. Editor-in-Chief
22 | Cover Story
PROSPECTSPROSPECTS FORFOR THETHE PHILIPPINEPHILIPPINE ECONOMY:ECONOMY: 20202020 && BEYONDBEYOND
By: Roger Santos
Dr. Bernardo Villegas shared his forecast for the Much like past recessions, the Philippine economy Philippine Economy in 2020 and beyond at one of will continue to be resilient. The country is in a AmCham’s General Membership Luncheon Meeting. good position for economic growth, given its young He shared the following current developments in the population with a high literacy rate. Meanwhile, our global economy. neighbors in the ASEAN are getting older and this is a potential pain point that can be exploited. The • Possible U.S. recession — U.S. Dollar may weaken Philippine government should altogether forget the as Federal Reserve stops raising interest rates. shift to federalism and just focus on amending the • Brexit uncertainties and trade wars could lead to economic provisions of the constitution to spur FDIs. a 1.8% slowdown in the Eurozone. • There would be a slowdown in the Chinese economy. The ambitious “Build, Build, Build” project of the current administration expects an intensifi ed investment fl ow • World oil prices will settle at US$ 50–60 per barrel. in the country. The development of nearby provinces • Uncertain monetary policies can lead to greater is also in the pipeline, which is expected to provide volatility in fi nancial markets. more employment opportunities. With continued infrastructure development, the Philippines can The Philippines has been and will be relatively safe become more attractive to foreign investors. from any global recession due to low globalization and foreign direct investments (FDIs). The Philippine economy is consumer led and internally driven Roger is a family man, who loves to cook and play with his son. and will not be affected by the projected global He spends most of his free time watching movies, especially the ones included in the Marvel Cinematic Universe. Roger loves recession, which has started manifesting in some to sing and, when he’s happy, he sings his heart out, without major economies. minding the people around him.
TEN LEADING EMERGING MARKETS THAT WILL DOMINATE INDIA PHILIPPINES INDONESIA CHINA MALAYSIA THE GLOBAL ECONOMY IN THE NEXT DECADE Source: Oxford Economics 2019 TURKEY THAILAND CHILE POLAND SOUTH AFRICA
24 | Cover Story THE NEXT 11: EMERGING ENGINES OF GROWTH
POPULATION 2018 GDP 2018 COUNTRY (in millions) (current US$ B) Bangladesh 164.9 287.6 Egypt 97.0 249.6 Indonesia 264.2 1,022.5 Iran 82.4 452.3
Mexico 124.7 1,223.4 Nigeria 193.9 397.3 Pakistan 201.0 312.6 Philippines 106.6 330.8 South Korea 51.7 1,619.4 Turkey 82.0 766.4
Vietnam 94.6 241.3
Source: IMF estimates, World Economic Outlook Database, April 2019
ENGINES OF GROWTH FOR THE PHILIPPINE ECONOMY
Young & Growing Population BPO-IT Industry • Infrastructure Domestic Tourism
OFWs • Public-Private Partnerships • Health & Education Manufacturing PPP
Opportunities for the Philippine Economy Growth Dampeners
• Among fastest rising emerging markets • Low Agricultural Productivity • Aging labor force and demographic crisis in developed • Obstacles to doing business countries • Shortage of Technical Skills • Young, growing, and English-speaking population • High frequency of natural calamities • Rebalancing between China and other Asian economies • High rates of electricity like Japan, South Korea, Taiwan and ASEAN neighbors • Corruption • FDI fl ows from China to Southeast Asia • Regional growth prospects: New Megapolis AmCham Philippines | January 2020 25 World Bank’s Ease of Doing Business 2019 Rankings
GLOBAL RANK
ECONOMY 2019 Score 2018 Score
Singapore 2 85.24 2 84.57 Hong Kong SAR, China 4 84.22 5 83.44
Taiwan, China 13 80.90 15 80.07 Malaysia 15 80.60 24 78.43 Thailand 27 78.45 26 77.44 China 46 73.64 78 65.29 Brunei Darussalam 55 72.03 56 70.60 Vietnam 69 68.36 68 67.93 Indonesia 73 67.96 72 66.47 Mongolia 74 67.74 62 69.03 Philippines 124 57.68 113 58.74 Cambodia 138 54.80 135 54.47 Lao PDR 154 51.26 130 55.58 Myanmar 171 44.72 171 44.21
Source: Doing Business 2019, www.doingbusiness.org
THE PHILIPPINES IN 2050 (FROM HSBC’S THE WIDER WORLD IN 2050)
Change in Rank Change in Rank Rank in 2050 Country from previous Rank in 2050 Country from previous HSBC study HSBC study 1 China +2 16 Philippines +27 2 U.S. -1 17 Indonesia +4 3 India +5 18 Australia -2 4 Japan -2 19 Argentina 5 Germany -1 20 Egypt +15 6 UK -1 21 Malaysia +17 7 Brazil +2 22 Saudi Arabia +1 8 Mexico +5 23 Thailand +6 9 France -3 24 Netherlands -9 10 Canada Same 25 Poland -1 11 Italy -4 26 Peru +20 12 Turkey +6 27 Iran +7 13 South Korea -2 28 Colombia +12 14 Spain -2 29 Switzerland -9 15 Russia +2 30 Pakistan +14 26 | Cover Story
Arangkada Philippines: Turning on the T.A.P. (Tourism, Agribusiness, and Power)
The Joint Foreign Chambers of Commerce of Policy briefs on the three topics has been released and the Philippines (JFC), through the Arangkada discussed in-depth panel discussions. With a combination Philippines Project (TAPP) successfully held their of public and private sector speeches and panels, the Eighth Anniversary Forum, “Arangkada Philippines: forum discussed key policies and projects that support Turning on the T.A.P. (Tourism, Agribusiness, and the achievement of high economic growth in these sectors Power)” on November 21, 2019 at the Marriott Grand under the Duterte Administration and the realization of Ballroom, Manila. Ambisyon Natin by 2040. The forum also featured a special panel “The Role of PPP in Build, Build, Build.”
Unlocking the Tourism Potential Guest Speaker: Undersecretary Benito Bengzon, Jr., Department of Tourism Moderator: Mr. Patrick Cooke, Regional Editor for Asia, Oxford Business Group Panelists: Ms. Aileen C. Clemente, Chairman and President, Rajah Travel Corporation; Mr. Arthur M. Lopez, President, Philippine Hotel Owners Association; Ms. Pamela D. Pascual, President, Manila Exposition Complex, Inc. and World Trade Center Management, Inc.; Ms. Cherry Lyn Rodolfo, PhD, Aviation and Tourism Specialist
Agribusiness: Key to Inclusive Growth Guest Speaker: Usec. Ariel Cayanan III, Department of Agriculture Moderator: Mr. Roby Alampay, Editor-in-Chief, BusinessWorld Panelists: Mr. Simon Bakker, Chief Executive Officer, Kennemer Foods International, Inc.; Mr. Rolando T. Dy, PhD, Executive Director for the Center for Food and Agri Business, University of Asia and the Pacific; Mr. Achim Fock, Operations Manager for Brunei, Malaysia, Philippines, and Thailand, World Bank; Mr. Christopher A. Ilagan, Corporate Affairs Director, Cargill Philippines, Inc. AmCham Philippines | January 2020 27
The Role of PPP in Build, Build, Build Guest Speaker: Mr. Ferdinand A. Pecson, PhD, Executive Director, Public-Private Partnership Center of the Philippines Moderator: Ms. Michelle Ong, News Anchor, ABS-CBN News Channel Panelists: Atty. Alberto C. Agra, Professor and Columnist, Business Mirror; Ms. Cosette V. Canilao, Chief Operating Officer, Aboitiz InfraCapital, Inc.; Mr. Gabriel U. Lim, Senior Vice President, BDO Capital and Investment Corporation
Challenges in the Power Sector Guest Speaker: Undersecretary Jesus Cristino P. Posadas, Department of Energy Moderator: Atty. Jose Victor Emmanuel De Dios, Chief Executive Officer, GE Philippines Panelists: Atty. Ray C. Espinosa, President and Chief Executive Officer, Manila Electric Company; Atty. Jose M. Layug, Jr.Senior Partner, Puno & Puno Law; and Former Chairman, National Renewable Energy Board; Mr. Francis Giles B. Puno, President and Chief Operating Officer, First Gen Corporation; Mr. Emmanuel V. Rubio, Executive Vice President and Chief Operating Officer, Aboitiz Power Corporation
This 2019 Arangkada Lifetime Achievement Award was presented to Ambassador Delia D. Albert, former Philippine Ambassador to Australia and is the first woman career diplomat to become Secretary of Foreign Affairs in Asia. → 28 | Cover Story
The Joint Foreign Chambers and Arangkada Electronic copies of the Arangkada tourism, Philippines would like to thank our speakers, agribusiness, and power policy briefs, as well corporate sponsors, media partners, partner as the photos, videos and presentations can be organizations, and everyone who attended the downloaded through the event website: forum, we look forward to seeing you in our future http://www.investphilippines.info/forum2019 events. Organizational Sections | 29
| Members' Birthdays
JANUARY FEBRUARY
Mark Anthony Pepino Edwin Jardin 2 Grant Grothen 2 Andy Suarez 3 Peter Troilo 4 Bobby Pacana 4 Maria Bernadita Alba Manan Arvind Mehta 7 Ariel Miranda 5 Merrell Davis Rioi Benjamin R. Punongbayan 7 Danilo Sebastian L. Reyes Shawn O’Brien 8 Florante, Jr. Sunga 8 Joseph Emmanuel Liwag Jobel Ramos 9 Emmylou Lozada 9 Michael John Henderson 13 Benito Chua Co Kiong 10 Stephan Sieberg 15 Mylene Manuel 11 Theo Wegbrans Priscilo Orcullo 16 Elena Palacios 12 Aurora Melvin Toru Takahashi 18 Andrew C. Ong 13 Renato D. Bueno David Attewill 15 Kathlyn Yu 19 Maria Luisa Sian 16 Juan Baranda 20 Anthony Decoste Miki Aristorenas 17 Josephine Gonzalez 21 Evangeline Tejada Jimmy Chua Shaun Beavis 22 Michael Brennan Maria Amor De Castro 19 Ma. Lourdes Herrera Ariel Lacsamana 23 Nilo Nimis 20 Yu Ming Chin Lorenzo Te, Jr. 24 Trinity S. Gatuz 21 Richard J. McGonegal Victoria Belo 25 Gerard Zorilla 23 Emmanuel T. Santos Ph. D 26 Ramon C. Garcia Jr. Rafael Fajardo 26 James Ileto 27 Noel Ostrea Michael Estaniel 27 Nixon Sioco Carlos Mendoza 29 Daniel E. Chalmers Valerie Lim 30 Karim Garcia Richmond S. Lim 31
→ 30 | Cover Story
A Business Perspective on the Philippine Economy The following is the opening speech delivered by Ms. Rizalina G. Mantaring, President of the Management Association of the Philippines and former Chair of Sun Life Financial Philippine Holding Co., Inc.
A few years ago, my husband was speaking with a working age. This, together with decades of increasing European colleague who had decided to close his earnings from BPOs and OFW remittances, are business in the Philippines and move – lock, stock expected to fuel the continuing growth of the middle and barrel – to another Asian country. He was married class. Poverty levels have declined from 26% in 2015 to a Filipina, so my husband was puzzled on why to 20.8% in 2019 and are expected to decline further he would want to move, as his business was fairly to 18.7% in 2021. successful. The response? “I can’t see why anyone would want to invest in this country.” “In the World Bank’s Ease of Doing He had become so frustrated with the slowness of how everything moved, the red tape, the Business Report, we received the welcome everyday logistical problems, the lack of supporting news that we moved up to 95th place from infrastructure, the informal barriers at each stage, last year’s 124th out of 190 countries. Yet that he had decided to give up. despite all of these, foreign investments, Today, I would challenge his views and ask, “Why so critical to moving the country forward would anyone not want to invest in the Philippines?” and turning it into a middle-class We have many things going for us. A young, literate economy, continue to significantly lag population, with a median age of 23 and with 60% of those of our ASEAN neighbors.” AmCham Philippines | January 2020 31
Despite the global uncertainties, the macroeconomic environment remains favorable. Notwithstanding the slower growth in the first half of the year, GDP has been growing at over 6% since 2010, and we expect this trend to continue in the next few years, powered by the Build, Build, Build program of the government and the continued implementation of market reforms. Reforms began in the 80s with trade and foreign exchange liberalization, opening up of the telecommunications and financial services sectors and the privatization of power. More recently, the passage of TRAIN drove another ratings upgrade. Important reforms that have languished for years have finally been passed – the rice tarrification law, levers to act proactively in response to changing instrumental in bringing down inflation which spiked market conditions. last year; the National ID, which in turn should greatly help in implementing the Ease of Doing Business law; In the World Bank’s Ease of Doing Business Report, the Bangsamoro Basic Law, which has the potential we received the welcome news that we moved up to to unlock the wealth of the ARMM and end decades 95th place from last year’s 124th out of 190 countries. of conflict. Yet despite all of these, foreign investments, so critical to moving the country forward and turning it into a The BSP is doing its part to support growth, middle-class economy, continue to significantly lag aggressively lowering interest rates and reducing those of our ASEAN neighbors. the reserve requirement ratio for banks. While the BSP has been doing a stellar job for years despite The reasons are many, and you have probably heard being hampered by an obsolete governing law, the this over and over. passage of the new Central Bank Act allows it to align with global best practices and gives it more →
Mr. Keiichi Matsunaga, President, Japanese Chamber of Commerce and Industry of the Philippines, Inc. (JCCIPI); Mr. Juliam Payne, President, Canadian Chamber of Commerce of the Philippines (CCCP); Mr. Ebb Hinchliffe, Executive Director, American Chamber of Commerce of the Philippines, Inc. (AMCHAM); Ms. Celeste B. Ilagan, Director, Philippine Association of Multinational Companies Regional Headquarters, Inc.; Ms. Cielo Narvaez, Director, Australian-New Zealand CHamber of Commerce of the Philippines (ANZCHAM); Mr. Ki Suk Hahn, Director, Korean Chamber of Commerce Philippines (KCCP); Mr. Florian Gottein, Executive Director, European Chamber of Commerce of the Philippines (ECCP); Mr. John D. Forbes, Senior Adviser, American Chamber of Commerce of the Philippines, Inc. (AMCHAM) 32 | Cover Story
The Ease of Doing Business act has great provisions and we have been eagerly awaiting its implementation. In particular, we need to make it easier to start new businesses, get approvals and pay taxes. Burdensome administrative procedures not only deter new businesses from starting up and existing ones from expanding, they also encourage corruption, as do complicated tax rules and processes. They also hold back badly needed infrastructure such as new power plants, many of which are mired in the approval process despite the looming power shortage.
Labor market rigidities make it difficult First, it is simply not easy to do business here. The to do business here. I remember numerous instances DTI, and now the ARTA, have done much to improve when I had to explain to our corporate and regional the business climate, and for this they deserve to be offices overseas why we couldn’t fire an obviously lauded, but much more needs to be done. incompetent employee. And worse, why we had to give him a separation package after months, or It is said that constitutions, while supposed to be even years, of non-performance! While we need to lasting, are often influenced by the issues of the times ensure that employees are protected from abusive in which they were written. Ours is no different. But in employers, we also need to ensure that our laws the over three decades since it was ratified, the world adapt to the times. For example, rather than security has moved on and globalization has changed the of tenure, why not portability of benefits? Everywhere environment dramatically. Foreign equity restrictions in the world we see employees moving away from have prevented sorely-needed investments in vital lifetime employment to taking on varying roles in industries such as telecommunications, transport different industries throughout their working life. But and energy. Competition is restricted, which protects each time they move, they lose all the benefits, such unproductive or poorly-performing firms at the as pensions, which they may have accumulated. If expense of more productive ones, and reduces the they take those accumulated benefits with them as incentive for firms to innovate. they move, they would have a nest egg by the time they retire. Limited competition in key sectors has significant consequences for the economy. Witness the impact Addressing all these issues will definitely help, but we of poor transport on logistics, and on every industry also need to remember that one of the biggest factors which relies on the movement of goods. Trade costs which makes investing attractive is predictability. could be greatly minimized by improving our port Money is the most cowardly of things, and when and logistics infrastructure. you are investing billions, even hundreds of millions, you need to know that the conditions under which To catch up with our ASEAN neighbors, we need you invested would not suddenly change. I ran a to lift these restrictions to encourage the entry of Canadian company which has been in the country capital. We can start by simply reducing the number for close to 125 years, through wars, coups, changes of sectors in the negative list. Why, for instance, do in government. Our contracts with clients lasted we bar foreigners from teaching at the tertiary level? decades. Knowing that the rules would not suddenly Singapore jumpstarted its tech industry by building change has helped the company prosper and invest excellent universities, understanding the heavy more in the country. reliance of technology development on human capital. And to attract good students, they brought in well- One of our biggest strengths and our most valuable known and highly respected educators from overseas. asset is our human capital. I truly believe the Filipino is AmCham Philippines | January 2020 33 world class. We note that the government’s medium- “An educated population is critical if we term Philippine Development Plan, its development blueprint to 2022, is people-centered, focusing are to build a competitive society. In a on inclusiveness, resilience and a competitive rapidly changing world where whatever knowledge economy. you know today will be obsolete in five Building a competitive workforce means years, the ability to learn and adapt will strengthening our human capital even further. This determine how we evolve as a nation.” starts with the very basic food security. It is estimated that 26% of Filipino children are malnourished. The damage to health, physical development, and brain more economically disadvantaged students get the development from malnutrition is often irreversible, support they deserve, while those who can afford it affecting children for life. The World Bank, in its pay more. This would also allow private universities Human Capital Index, estimates that at the current to participate in educating the youth – with the levels of nutrition, healthcare, and education, today’s lack of facilities, we need both public and private children will only be 55% as productive when they universities. grow up as they would have been had they been able to enjoy a complete education and full health An educated population is critical if we are to build support. a competitive society. In a rapidly changing world where whatever you know today will be obsolete in Thus, ensuring affordable food is important. The five years, the ability to learn and adapt will determine rice tarrification law is a step in the right direction. how we evolve as a nation. Helping Filipino farmers by giving them the tools and Which brings me to my last point, innovation. This knowhow to grow more lucrative crops and increase is one which is a personal advocacy, as we have productivity not only helps ensure food security but seen technology render once dominant companies also helps farmers escape poverty and drive inclusive obsolete. History is littered with the carcasses of growth. Secretary Dar deserves our full support in his business giants who have gone bankrupt, forced efforts to modernize the agriculture sector. out by new technologies and new business models – Kodak, Nokia, Blockbuster, Sears – household The Universal Health Care Law is also very welcome. names which are gone or are about to disappear. There remains a gap, however in its fulfillment, as we need to build an additional 2600 healthcare centers. When we look at what drives our economy, we see Perhaps LGUs should also find a way to engage the twin engines of BPOs and OFW remittances. private practitioners to provide certain packages of These are what have powered our GDP growth over services. more than a decade. But both are being impacted by technology. Education is another critical area. Prior to 2012 the Philippines was one of only three countries in the Some months ago I was speaking with a colleague world and the only one in Asia with only ten years visiting from Singapore, and he told me of a call of basic education. The shift to K-12 has brought us center operation which had just closed 3,500 seats. more in line with the rest of the world and should 80% of the seats were replaced by machines, allow even high school graduates to find jobs. Not powered by artificial intelligence. The remaining everyone is cut out for college and it has always 20% required more complex skills which the BPO puzzled me why we require a university diploma had difficulty finding locally, so they decided to for people being hired as clerks and data center bring back the seats to Singapore, where talent was operators. more expensive but also more readily available. As AI becomes more advanced, we can expect the Free education in state universities and colleges need for large backrooms to decline even further, sounds good, but one wonders how the government perhaps to the point where companies who are can fund all our SUCs, in addition to all the other currently offshoring simply take those functions services it is trying to provide. Quality education is back to their home countries. We are already seeing costly. Perhaps rather than free tuition for everyone, this in manufacturing, where some companies have we can implement a voucher system so that the relocated their factories back from Asia to the → 34 | Cover Story
range of technologies our scientists and engineers have developed, which are in need of funding. We also need to prepare our workforce for the future. It is estimated that more than half of them, including executive leadership, will need significant re-skilling and upskilling. Incidentally, one area where we can innovate fairly easily is tourism, which has the potential to become another growth engine for the country.
To become a middle class nation, as is the goal of Ambisyon Natin 2040, we need to surpass a 7.1% growth rate for the next 20 years. To achieve this, we need to generate 1.3 to 1.5 million new jobs a year for the next U.S. as AI and robotics have allowed them to operate 20 years, triple per capita income to $11,000, and entire plants with a minimal number of staff. It is said increase annual total factor productivity growth that as much as 89% of BPO jobs may be at risk. rate by 1.5% or higher in the next 22 years, double the world average since 2000. While information technology changes are the most visible, technological change is also happening in other It seems almost impossible. Yet even as we play areas. The bulk of our OFWs are located in the Middle catch up, our neighbors continue to grow and evolve East, which is primarily dependent on oil. As countries even faster. Can we ever compete? shift to green energy and lessen their dependence on oil, what will happen to the thousands of Filipinos I am reminded of the U. S.’s hockey victory in the working there? Indeed, as technology changes every 1980 Olympics, dubbed the Miracle on Ice. The single industry, what will happen to Filipinos working Soviet Union was the dominant force in hockey, all over the world? having won the gold in 5 of the last 6 Olympics. The The World Economic Forum estimates that 75 million team was composed primarily of professional players jobs will be lost by 2022 due to technological changes, who played hockey full time. The U. S., in contrast, but 133 million new jobs will be created, for a net gain consisted solely of amateur players still in college, of 58 million. But these are not jobs in the fields we the youngest team in the tournament. To anyone, it know. These are jobs in data science, analytics, artificial seemed impossible for the U.S. to beat the Soviets. intelligence, machine learning. We need to ensure that our human capital evolves and adapts as the world In the group stages, the U.S. was able to draw around us changes. This means not only enhancing against Sweden and managed to upset the heavily STEM education but emphasizing critical thinking, favored Czechs then beat the rest of their group. The complex problem-solving and creativity in our curricula. Soviets simply powered their way through, thrashing their opponents by such lopsided scores as 16-0, This will help us to create an enabling environment for 17-4 and 8-1. innovation so that we are at less risk of obsolescence as a nation. Further, enabling foreign capital and In the medal round, the U. S. met the Soviets in the talent to come in will spur competition, which is key first game. Playing to a packed crowd, the U. S. fell to innovation, and improve the quality of our physical behind early, but somehow managed to end the and digital infrastructure. More importantly, it should first period tied at 2-2. In the second period, the enable knowledge transfer. Soviets scored again and ended the period leading 3-2. In the third period, a Soviet player was given While the government needs to do its part, we in the a penalty and had to sit it out at the penalty box. business community also need to do ours. We need to With their opponents lacking one player, the U.S. invest in innovation. The DOST has presented a whole scored and tied the game a few seconds before →
36 | Cover Story
the coach chose the best players he could in the tryouts. You don’t win with a B-team. Two, every single player on the team did his part, from training hard to the point of exhaustion to playing hard in the actual games. Three, they followed the game plan – execution. And four – dedicated amateurs working together can beat even the best professionals. A star team is always better than a team of stars.
Can we achieve Ambisyon Natin 2040? Can we keep up and even surpass our neighbors? Yes, but only if each of us does his part until we drop from exhaustion. The Philippines is a he returned. Only a couple of minutes later, the U. S. land of great promise but also lost opportunities. This scored again. With the U.S. leading 4-3, the Soviets time, let’s lock arms – kapit-bisig – and move forward started to panic and made several tactical errors. As together to fulfill our promise. the clocked ticked away to the end of the game, the U. S. coach kept telling his players “Play your game, Thank you very much. play your game.”
The U. S. won the game and went on to beat Finland and win the gold. It is another David beating Goliath story, but it also left many valuable lessons. One,
JFC Presidents Press Conference on the launch of the new Arangkada policy briefs
www.amchamphilippines.com AmCham Philippines | January 2020 37
House of Representatives: An Engine for Reform The following is the keynote speech made by Representative Stella Luz Quimbo of the 2nd District of Marikina and Assistant Minority Leader at the House of Representatives
Representative Stella Luz Quimbo
To my colleagues in government, as my bosses at the House of the Joint Foreign Chambers of Representatives have urgent the Philippines, the Arangkada national concerns to attend to at Philippines Forum organizers led this moment. by Mr. John Forbes, the rest of our friends in the business community, But nonetheless, I am happy to be esteemed members of the here and it is truly an honor to speak academe, and our development before all of you as an economist, partners, an educator, a legislator, a public servant, but most importantly, as Good afternoon to all! a Filipino. Ours is a country of rich history, a nation filled with healthy I am Stella Quimbo, a neophyte and competing ideologies, and legislator representing the second a people of courage, resilience, district of Marikina City. I am also a and hard work. To me, the most neophyte politician - an accidental interesting aspect of our history one – having had to fill in the shoes is the Philippine economy, which that my husband wore in Congress I find to be so much like the UP for 9 years. I taught Economics basketball team: it is filled with at the UP School of Economics star players yet it did not make the for over two decades. I am also championship round when it was an accidental keynote speaker, expected to. It seems everyone → → 38 | Cover Story
has a theory as to why not, but UP still can’t seem to deregulation in the shipping, airline, and oil industries, get its act together. easing of entry of foreign banks, and easing of foreign equity limits, including resorting to a much So this afternoon, allow me to share my thoughts less restrictive negative list of activities where foreign on our economy and the role that Congress plays equity is limited. in steering our economy towards sustainable and inclusive growth. In 2015, the Philippine Competition Act was passed, after languishing in Congress for 25 years. This is an In the 1980’s, when I was an Economics freshman at important economic reform — a game changer for the UP School of Economics, the economy that I was the business community. Overnight, anti-competitive faced with and that I studied, was a highly restrictive agreements which many businesses have grown and regulated one — an economy that clearly lacked accustomed to have become illegal. Overnight, huge competition, in both the domestic and foreign mergers and acquisitions now need to be scrutinized. sectors. A study estimated top 4 concentration ratios Overnight, dominant firms’ business practices which of 70-100 percent for majority of the manufacturing appeared harmless because they were simply taking industries between 1988 and 1995. Among those advantage of “synergies” could now be deemed that benefited from protectionist policies was the unlawful acts. The law also created an anti-trust then-booming industry of shoes in my home city, body, the Philippine Competition Commission, for Marikina. which I served as Commissioner for almost 3 years.
At that time, the government initiated major economic Today, as a neophyte legislator, I find that the reforms particularly a series of trade liberalization debates on the floor have still revolved around the measures, including the lowering of tariff rates and same economic problems over the last four decades. removal of import controls. Since then we have slowly For example, whether or not the liberalization of rice progressed from a protectionist system to a relatively markets is good for the country is still being hotly open regime. Tariffs went down across sectors from debated. Whether or not public utilities need to be re- highs of 100 percent (or even more) before 1980 to defined such that we limit competition only for public 3 to 10 percent for the majority of products by the utilities which are natural monopolies is still an “issue early 2000s. of the day.” So I seemed to have joined Congress at the right time — a time when a number of important Apart from trade reforms, other reforms beginning in economic bills are pending before Congress. As I the 80s that had an impact on the state of competition wear my economist hat in Congress, I,together with in the Philippine economy include: privatization, de- 305 men and women, face the vital task of moving monopolization of the telecommunications industry, our economy forward. AmCham Philippines | January 2020 39
The economic measures that our lawmakers and “So I seemed to have joined Congress at government leaders have been pushing in the 18th Congress are unprecedented. the right time — a time when a number of important economic bills are pending The CITIRA bill seeks to reduce corporate income before Congress. As I wear my economist taxes, amidst complaints that our tax rates are among the highest in the ASEAN region. The bill also seeks to hat in Congress, I, together with 305 men rationalize fiscal incentives. While some corporations and women, face the vital task of moving at present enjoy fiscal incentives, it cannot be denied our economy forward.” that some of these incentives are unnecessary from an economic standpoint. The state must subsidize on the basis that these are public services that are only those activities that have positive externalities natural monopolies. In the case of a natural monopoly, or those that achieve development goals, such as the market demand can be satisfied at lowest cost the promotion of employment and exports. The by a single provider; hence, the state opts for one state must provide incentives only if firms would not domestic provider which is properly regulated. employ or export as much without such incentives. Other sectors will be opened to foreign competition, Some fiscal incentives are anti-competitive: they including telecommunications, airlines, and shipping. give undue competitive advantage to some, perhaps These sectors, which are all key to connectivity, causing an uneven playing field. Not only are will only continue to increase in productivity and redundant and unnecessary incentives wasteful to efficiency thanks to stronger competition. government, they could stunt growth of the economy in the long run. So, there must be a rational way to The national budget was approved on third reading at provide incentives to businesses. the Lower House and transmitted to the Senate last October 4. The budget approval process is a way by But exactly what that “rational way” is the subject which Congress can check on the implementation of of current debate. I have strongly argued before the laws by the executive branch. I hope that Congress, committees, and especially during plenary debates, in the years to come, will take this function even more that rationalization does not mean taking away seriously. (As mentioned in the earlier panel, we have all incentives in one swoop. It is rational only if it many good laws, but we are poor in implementation.) safeguards the sanctity of contracts and protects existing productive investments. If warranted, the All of these pending legislation are essential to the kind state needs to provide a longer transition period of transformation which our economy needs at this for investors who were lured to put in money in our point. We need to seriously usher in the “competition country because of the existing incentives. It is highly era” in our history. Competition not only results unfair to these investors if we keep changing the in lower prices and better quality of goods, it also rules in the middle of the ballgame. helps make markets work for business by lowering the cost of inputs, improving market access, and Amending the Foreign Investment Act has also been spurring innovation. Experience from all around the approved in Congress. The bill opens up professions world shows us that competitive industries improve to foreign competition, with the hope of attracting overall welfare. foreign experts and researchers to enrich the Filipino expertise and widen their knowledge in different As a member of the minority bloc, I have taken to heart fields. This has huge potential to further improve the our role as fiscalizers of the bills that pass through quality of our nation’s human capital. the House. I am fortunate to have personally done rigorous policy research as a UP professor. I have The bill amending the eighty-year-old Public learned as well from the collective research done by Service Act (PSA) is in the period of interpellation in the small community of economists in the country, Congress. For decades, a long list of industries have which I led as president of the Philippine Economic been protected by a constitutional provision which Society in 2014. As I join debates in Congress, I am prohibits foreign ownership beyond 40 percent in armed with all of these insights from research. public utilities. The proposed PSA amendments limit “public utilities” to four industries – water, sewerage, The monitoring of the implementation of the Rice electricity transmission, and electricity distribution – Tariffication Law is one of my primary advocacies. → 40 | Cover Story
“We need to seriously usher in the “competition era” in our history. Competition not only results in lower prices and better quality of goods, it also helps make markets work for business by lowering the cost of inputs, improving market access, and spurring innovation.”
Representative Quimbo with Joint Foreign Chambers representatives
It was in 1995 when we were first required to tariff-y our adjustments every week, on the basis of a formula rice quotas. We kept buying time, but unfortunately which uses parameters that are uniform across did not utilize the bought time to prepare our rice companies. I worry about the possibility that this farmers for tough competition, especially from our policy itself is the one that facilitates parallel pricing, ASEAN neighbors. But then early this year, the Rice or worse, tacit collusion among oil companies. Tariffication Law was passed, amidst the urgent need to address increases in the inflation rate post-TRAIN Having personally seen the benefits of research – 1. Rice Tariffication is another law that is driven by how it can ensure that intended effects of legislation the benefits of increased competition. Shifting to a are secured as well as minimizing unintended tariffication regime has increased the flow of imports, effects – I also hope that Congress as an institution thereby allowing us to meet the demand for rice at prioritizes capacity building of its research office. cheaper prices. It had immediately provided the cure Speaker Cayetano, himself, in some interviews, has and brought inflation rate to an all-time low. declared this to be a priority. He explained that the proposed increase in the budget of Congress was However, the same law has so far left our rice intended partly to enhance research. He said, “hindi farmers to bear the burden of the reform. Congress puwedeng nakikipag-debate tayo dito na ‘yung had the wisdom to include safety nets for our Executive ‘yung mga industriya kumpleto sa research farmers — the law provides for the creation of the tapos tayo hindi”. He also said he planned to tap Rice Competitiveness Enhancement Fund (RCEF) university professors on certain matters. precisely to ensure that rice farmers will be caught as they fall through the cracks, and more importantly, I certainly look forward to debates in the hallowed to help them bounce back. During my yet short stint halls of Congress where we only talk of facts, and in Congress, I have strongly advocated for the timely facts alone. I look forward to debates where the right disbursement of the RCEF so that farmers may questions are asked. Evidence-based legislation continue their essential work and so that, in the long is the key to produce structural transformations in run, we may improve their technological capacity the Philippine economy. This advocacy is my raison and improve the productivity of the sector. Only by d’etre as a Congresswoman. improving agricultural productivity can our economy undertake the needed structural transformation and As the economy grows, it is important that basic boost our other industries in the process. social services, especially health, are provided. I have long been an advocate of universal health care — in On the issue of fuel prices, I have filed a resolution fact, my PhD dissertation was about social health calling for the review of DOE monitoring strategies. insurance. One of the important debates today is the In particular, I recommend the review of the policy costing of Universal Health Care, which was provided that requires fuel companies to submit their price by a law passed this year. An accurate estimate of AmCham Philippines | January 2020 41
the cost of universal health care is necessary, as this will be the basis for a series of tax measures beginning with amendments to the Sin Tax Law. Empirical evidence is required for the proper costing of universal health care: what is the likelihood of illness? What is the cost of a hospital admission? What is the cost of outpatient care? How much is unmet need? Many of these questions have been answered by health economists, including myself. We need Congress to put together all of these pieces of evidence to come up with a proper financing plan for universal health care.
These are just snapshots of what your legislators talk about every day. Congress is made up of 306 individuals from all over the country with varying advocacies and heterogenous philosophies. On my end, because of my personal circumstances, what I stand for is sustainable economic growth brought about by a dynamic business environment, a growth that creates schooling and job opportunities in order for everyone to partake in such, and a growth that allows everyone a sufficient amount of social protection so that illness nor death will never cause poverty.
We cannot do this alone. Let’s pretend to be a basketball team and work hard to score economic progress. Coordination is of prime importance — a team cannot win without a clear strategy wherein each member plays his role and all are driven by the common goal. Let’s not drop the ball this time. All of us here today who represent the various groups in our economy — the private sector, government, academe — have to work hand-in-hand for sustained economic growth in the coming years. Teams also need a fair game – a level playing field— so that each one will thrive and reach its full potential. With harmonized efforts to foster an environment of development, we can win – and I tell you, we will.
It is truly an honor to share some reflections with you today. But besides that, no honor is much greater than serving the Filipino people.
Thank you very much! Mabuhay sa Arangkada Forum. God bless the Philippines. 42 | Feature
YEAR OF THE RAT 鼠 (Shǔ) Source: www.chinesenewyear.net/zodiac/rat
hinese New Year Day is Saturday, January 25, 2020 and the animal sign is the White Metal Rat. The Rat is the first of all zodiac Canimals. According to one myth, the Jade Emperor said the order would be decided by the order in which they arrived to his party. The Rat tricked the Ox into giving him a ride. Then, just as they arrived at the finish line, Rat jumped down and landed ahead of Ox, becoming first.
In the terms of yin and yang, the Rat is yang and represents the beginning of a new day. Rats are clever, quick thinkers; In Chinese culture, rats were seen as a sign of successful, but content with wealth and surplus. Because of their reproduction rate, married couples also prayed to them for living a quiet and peaceful life. children.
Recent years of the Rat Personality and characteristics
1924, 1936, 1948, 1960, 1972, 1984, 1996, 2008, 2020. Optimistic and energetic, people born in the Rat year are likable by all. They See the table below for the full details of each year. are sensitive to other’s emotions but ELEMENT YEAR FORTUNE are stubborn with their opinions. Their personality is kind, but due to weak Metal 1960, These Rats tend to be reliable and live a communication skills, their words may 2020 stable life. They may hold some power and are able to turn unlucky events into fortune. seem impolite and rude. Water 1972, These Rats encounter hardships in the early On the financial side, they like saving 2032 days. They become successful during their and can be stingy. However, their love middle ages and create a happy family. for hoarding will sometimes cause them However, relatives and close friends may to waste money on unnecessary things. weight them down. Wood 1924, These Rats are multi-talented. They are Men born in the Rat year are clever and 1984 strong-willed and always finish what they adapt quickly to new environments. begin. They are creative and great at taking Fire 1936, These Rats have high IQs and EQs. They advantage of opportunities. However, 1996 are average during youth, develop well in they sometimes lack the courage to the middle ages and have great fortune do so. Although they have great ideas, later in life. they might not be suitable for leadership Metal 1948, These Rats are good speakers. They’re the positions. 2008 mood makers of a group, but can be slightly possessive. They face difficulties in their Women born in the Rat year are the youth, but are generally able to withstand traditional women. They love keeping them. things organized and place great value AmCham Philippines | January 2020 43
on the family. Everything is taken care of by them Careers fit for Rats and there is no need for their husband to worry. Outside of home, they’re also someone with a Because of their independence and imagination, sense of responsibility and ability. they are suitable for creative jobs. These include authors, editors and artists. However, if they join a Compatibility team, their creative outlet may be blocked.
Most compatible with Rat: Ox, Dragon, Monkey Rats also pay attention to fine detail. They are fit for technical work, such as engineering and Similar to Dragons, Monkeys get along great with architecture. Rats, and tend to live happily ever after like a fairy tale. They are alert, but lack courage. This makes them Least compatible with Rat: Horse, Goat and Rabbit unsuitable as police officers, entrepreneurs or other leadership and political positions. Although The Earthly Branches of Rat and Horse clash strongly. Rats make good financial decisions, they should No matter what a Rat does, it won’t be enough for be careful not to invest with a close friend. It will the Horse. not only cause money problems, but also affect the friendship. Goats are attracted to Rat’s wealth and hope to control it, making it a rocky relationship. Health and lifestyle
The Rabbit will either purposely or unintentionally Rats have frail health. They have energetic go against the Rat’s wishes, while the Rat can only personalities, but tire quickly. They catch colds keep silent. often, but thankfully do not have serious illnesses. Rats are sensitive to change in temperature. Not Lucky for Rats: only is cold weather unbearable for them, they • Colors: blue, gold, green also can’t stand hot weather. But despite seeming • Numbers: 2, 3 weak and not being able to perform hard physical • Flowers: lily, African violet, valley lily work, they enjoy longevity. • Directions of auspiciousness: southeast, northeast • Directions of wealth: southeast, east Rats can eat anything, whether they are delicacies • Directions of love: west or plain food. However, they should pay attention to their diet. Enemies of their health also include Unlucky: smoking and drinking habits. • Colors: yellow, brown • Numbers: 5, 9 → 44 | Feature
Rats in the Year of the Rat (2020) Although a zodiac’s year is traditionally the most unfortunate, laden with bad omens and mishaps, 2020 will perform reasonably well for the Rat. Success will come in the form of career; celebrate the fact that your efforts will be rewarded and seen. On the other hand, your health and relationships will prove to be a struggle. The year will have its issues, but the positive factors can turn it around.
Career
Even though the year will be a challenge in many areas, the Rat’s career will not be among them. Success will flourish in the workplace, yielding benefits of all kinds. Hard work will be rewarded; your clever skills, quick-thinking, and optimism will drive you forward. Exclusive bonuses will come to those born in the first half of the year.
Finances will be booming for the entirety of the year! Your income might even double. It would do you well to save and invest your hard-earned money. Try to avoid spending it all on luxurious items and vacations.
Lucky Months: March, September, and November. Unlucky Months: April, July, and October.
Education
The Rat will maintain a decent academic standing couples and singles alike. You will face many in their educational studies. Hard work will be struggles throughout the year; however, your innate valued and necessary. Be wary of your well-being; positivity will help you push through hard times. stress over your course schedule might get you down and even cause illness. Lifestyle
Health Rats will experience both successes and failures in the Year of the Rat. Success will show itself in Vulnerable to sicknesses, like colds and fatigue, the workplace and education, while relationships the Rat will have to be extra careful in 2020. and health will be the areas that suffer. Rats should rejoice in their good fortune. Their natural ability to Relationships create success is a gift, a gift that will prove itself in financial gain. Luck is also not in your favor this year for love. Romance will be hard to come by for married
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46 | HeaderBusiness of Business
The Philippines’ Demographic Sweet Spot
By: Ernie Cecilia, DPM
emography per se does not determine 2019 POPULATION a nation’s destiny. However, it can help shape its trajectory. The Philippines is in According to United Nations data, as elaborated Da demographic sweet spot according to experts. by Worldometers, there are 108,674,567 Filipinos as The Filipinos’ average age is 24 years, second of Monday, November 18, 2019. Filipinos comprise only to that of PDR Lao. Close to two-thirds of the 1.4 percent of the world’s total population, and the Filipinos are between ages 15 and 64, the working Philippines ranks 13th among the most populated age. countries. With a total land area of 298,170 square kilometers, its population density is 363 people Given the right development strategies, per Km2 or 939 people per mi2; and 47.1 percent policies, and programs, the Philippines could be live in urban areas. In 1955, only 29 percent of one of the most prosperous countries in the world Filipinos live in urban areas. Quezon City, Manila by 2050 when its population shall have ballooned and Caloocan City are the most populated cities to 144.5 million. However, there are a number of today. population-related issues and concerns that stand in the way of overall prosperity.
108,674,567 Filipinos
50.2% 49.8& 1.4% (Men) (Women) of the world’s total population Working Age
No. 13 64.45% among the most (Ages 15-64) populated countries
30.4% (Ages 0-14)
5.51% (Ages 65+) AmCham Philippines | January 2020 47
Roughly 50.2 percent are men, while 49.8 percent are women. The average life span is 67.7 and 75.9 years for men and women, respectively. In 1950, the Philippines’ average life span was 54.4 for men and 58.5 for women.
The working age (15-64) population is 64.45 percent, while those aged 0-14 are 30.04 percent, and the senior citizens (65+) are 5.51 percent. The potential support ratio between working group and elderly is 11.69, while the overall dependency ratio is 55.2 percent.
By international standards, according to Worldometers, a woman must produce 2.1 children for each generation to exactly replace itself, without needing immigration. A value below 2.1 will cause the native population to decline. The Philippines’ Total Fertility Rate (FTR) is 2.58 in 2019.
Infant mortality rate is at 17.5 per 1,000 live births, while deaths below 5 years are 24.8 per 1,000 live births.
USA, CHINA AND RUSSIA
China, India and the USA are still the most populated countries today. America acquired 50 million immigrants between 1950 and 2015, nearly half of the developed world’s net immigration. Between mid-1980s and 2008, America was the only rich economy with a TFR of 2.1 children per woman. If this trend continues, George F. Will estimates, “there would be 380 million Americans, and its population will be younger than that of almost any other rich democracy, as its working Photo by Théo Roland on Unsplash population continues to expand. In 2015, the USA had twice as many working-age people with Nicholas Eberstadt of the American Enterprise undergraduate or graduate degrees as China had.” Institute believes that in terms of human capital, Russia seems to be in “all but irremediable Unlike the USA, the European Union and decline.” He observes that “In 2016, males 15 Japan are facing more daunting demographic years old had a life expectancy shorter than their challenges. According to Will, “Europe and Japan Haitian counterparts, and 15-year-old females’ life had sub-replacement fertility rates since the 1970s. expectancy was only slightly better than those in Demographers say that a woman born in Japan in the least developed countries. With a population of 1990 has close to a 40 percent chance of having 145 million, Russia has less privately held wealth no children of her own and a 50 percent chance of than do the 10 million Swedes.” never having grandchildren.” Eberstadt continues, “Although China’s By 2040, the population of American allies working-age population (aged 15 to 64) almost Indonesia and the Philippines could be 300 million doubled between 1975 and 2010, fertility has been and 145 million (by then larger than Russia’s), below the replacement level for at least 25 years. respectively. China’s population will shrink after 2027; its → 48 | Business of Business
Photo by Mauro Mora on Unsplash working-age population has been shrinking for five is No. 10 among 10 ASEAN countries in terms of years and will be at least 100 million smaller by national average IQ. The educational system of 2040, when the adult population “will have fewer other Asian countries has improved tremendously average years of schooling than that of Bolivia and while that of the Philippines needs continuous Zimbabwe. By then, China might have twice as overhauling. many elderly as children under 15. The number of elderly will have increased from 135 million to 325 The academe must keep pace with the million in 25 years, with the nation’s median age changing business environment. One guru said, having gone from less than 25 in 1990 to 48. No “The problem with our schools today is NOT that country has ever gone gray at a faster pace.” they are not what they used to be. The problem is that they are STILL what they used to be.” Eberstadt predicts, “India probably will replace Learning in the 21st century for 21st century skills China as the most populous nation by 2030, and need 21st century curricula, teachers, materials, by 2040 India’s working-age population might be and environment that can develop competencies 200 million larger than China’s. By that time, about for the future workplace and for entrepreneurship. 24 percent of China’s population will be over 65, Otherwise, we shall continue to produce graduates compared with around 12 percent of India’s.” that cannot find gainful employment.
We have millions of young, talented Filipinos. DEMOGRAPHIC TIME BOMB? Unless we develop and utilize their talents, such a huge human capital is wasted. The Philippine demographic sweet spot can become a demographic time bomb if some key George Bernard Shaw once said, “Youth is the demographic issues are not immediately resolved. most precious thing in life; it is too bad it has to be wasted on young folks.” Myanmar has the highest poverty incidence in ASEAN; the Philippines ranks second. Rounding For comments or questions please e-mail the up the top five are Laos, Cambodia and Thailand. author at: [email protected] One of four Filipinos is poor, but the three who are not poor have not done any significant effort to help deliver the other one out of poverty. Ernie Cecilia, DPM, is a regular contributor to the AmCham Business Journal. Mr. Cecilia Next to poverty, ignorance is a key issue. We is the Chair of the AmCham Human Capital used to be the most literate country in Asia, and & Resources Committee; Co-Chair of the AmCham Publications Department; Co-Chair the best English-speaking country outside of the of ECOP’s TWG on Labor Policy and Social USA. Last year, it was reported that the Philippines Issues; PMAP Past President.
50 | Company News COCA-COLA PHILIPPINES recognized as Sustainability Trailblazer by WWF Philippines Submitted by: Coca-Cola Philippines
Coca-Cola Philippines was recognized as Sustainability Trailblazers by the World Wide Fund for Nature (WWF). In photo are (L-R) Coca-Cola Philippines Public Affairs and Sustainability Director Jonah de Lumen-Pernia, Coca-Cola Beverages Philippines, Inc. (CCBPI) Corporate and Regulatory Affairs Director Atty. Juan Lorenzo Tañada, CCBPI President and CEO Gareth McGeown, CCBPI Stakeholder Relations Senior Manager Atty. Marc Cox.
orld Wide Fund for Nature (WWF) a PHP 1B pioneering, state-of-the-art, food-grade Philippines, the local arm of the world’s recycling facility that will help boost the country’s largest conservation organization, recycling rates and uplift livelihoods in the waste hasW recognized Coca-Cola Philippines as a value chain. This represents Coca-Cola’s first Sustainability Trailblazer for its programs on water major investment in a recycling facility in South replenishment, women economic empowerment, East Asia. energy efficiency and climate protection, and for one of its most ambitious undertakings—its World Further to this, Coca-Cola has been pushing Without Waste vision. strongly toward packaging innovation. It launched its first-ever bottle made entirely of recycled plastic With a vast system in the Philippines that under the Viva! brand and introduced the Sprite encompasses its bottling arm Coca-Cola clear bottle, a complete redesign prompted by the Beverages Philippines, Inc. (CCBPI), as well as the Company’s goal to increase the recyclability of its Coca-Cola Foundation Philippines, the Company packaging. mobilizes its system to work together, each playing an important role in ensuring that the Company Working with local communities, Coca-Cola champions sustainability across the entire business aims to help strengthen solid waste management and beyond. practices in areas where it is present. It has piloted programs in host barangays in Iloilo and Bacolod; Working toward a World Without Waste, the and has collaborated with local government units, Company announced this year that it will invest in including Boracay, Davao, Siargao, and Palawan → AmCham Philippines | January 2020 51
to champion environmental stewardship. Through NGO partners, the Coca-Cola Foundation has also aided communities in Cavite, Bataan, Marinduque, Albay, Davao, Metro Manila, Boracay, La Union, Baler, Siargao, Negros Occidental, and Saranggani through waste management workshops and the deployment of facilities and technologies needed for collection and recycling systems.
With environmentally conscious systems and policies in place, Coca-Cola has made the use of renewable energy prominent in its operations, with over 60% of its energy requirements being sourced from clean and renewable energy. The Company has continued on its green energy track, with the installation of approximately 10,000 solar panels in two of its manufacturing plants, in Bacolod and Misamis Oriental.
The Company’s holistic Water Leadership program has enabled it to achieve 124% water replenishment prior to its 2020 goal. In its operations, CCBPI has been constantly increasing its water efficiency, which has resulted in more than 5 billion liters of water saved through its water savings initiatives; while more than 17.5 million liters of water have been returned through to its waste-water treatment system. Going beyond the walls of its facilities, Coca-Cola Agos Program – led by The Coca-Cola Foundation Philippines – provides access to drinking water to far-flung, water-poor communities. The AGOS program has, thus far, reached 49 provinces.
On a global scale, the 5by20 program aims to empower 5 million women by 2020 and in the Philippines, Coca-Cola is underway to achieving this through the Sari-Sari Store Training and Access to Resources (STAR) program, which provides skills training, peer mentoring, and access to resources to grow their businesses. Coca-Cola has enabled 156,000 women since 2011.
Coca-Cola has always strived to go beyond what they have accomplished as part of the Company’s philosophy and mission to refresh the world. The Company continues to find ways to improve their operations, further their environmental stewardship programs, and reach out to more communities across the Philippines. 52 | Feature
MEMBER IN THE SPOTLIGHT JCCI President & CEO Shares Her Secrets to Successful Career Development
CCI President and CEO, Carol Dominguez, was one of the featured speakers atJ the 2019 HR Congress of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), held at the GSK Auditorium in Makati City in August 30. Carol gave a rousing presentation on Successful Career Development to a rapt audience, drawing on her own experiences, struggles and personal principles that ultimately led her down the path to success.
She shares her inspiring speech below. Photo credit: Chesca Gardaya
I was given the brief to tell there is only one color in my light, and that is green. So preparing you a little bit about how I started for this talk gave me an opportunity to reflect on my career. It’s my career, how I evolved and been a 32-year career: 10 different roles in two organizations — managed to stay relevant in today’s 15 years at Citibank and 17 years at John Clements. I’ve worked disruptive environment, and to in six cities — Manila, Chicago, NY, London, Milan and Stamford, share some stories that may inspire Connecticut — on three continents. you to create your own careers and become successful. I’ve never Let me try to give this a shot. As I reflected on my career, I thought much about my career — thought of 10 guiding principles:
Photo credit: MJ Nama-Sy AmCham Philippines | January 2020 53
The first one isTO HAVE A DREAM. I got accepted into NU’s Kellogg Graduate School of Management. When I was six years old, my parents took my younger sister and I on a trip to the U.S. We After Kellogg, Citi NY rehired me and I got visited Honolulu, and Ohio - and Boston, to attend cross-posted to Citi London, and Citi Milan. I made my father’s 10th-year reunion at Harvard Business it to VP in seven years. School. The trip left a lasting impression on me and the desire to, at some point, study, live and work Aside from the plan, I think it is very important in the U.S. My father always said that if we studied TO HAVE A MENTOR. hard, we would get a chance to go to school in the U.S. someday. How many of you have mentors? I was very fortunate to have my father as my mentor — and I returned to Manila as a first grader and I could also a tormentor! recall standing as a marshal while we were having our flag ceremony and national ceremony, and As I mentioned earlier, he always encouraged thinking that I was special. us to study hard and work hard in order to become successful in life. When I was looking for a job after Ten years later, at 16, our family had another college, he insisted that I find a job as a management trip to the U.S. My sister became quite ill, so she trainee in a large, multinational organization. So I and my parents stayed with my father’s sister while ended up taking a job as a management trainee at she got treated. My aunt invited me to attend my Citibank, as mentioned. cousin Malu’s graduation from Barnard College at Columbia University, in New York City. So we After my first year at Citibank, I found myself went on an eight-hour road trip to NYC from Akron, having so much fun going out to parties every Ohio. night with my colleagues. My father often asked me, “How could you stay out late every night and I was mesmerized when I first saw New York go to work and focus in the morning?” The perks of City — bright lights, big city — and I thought to being young! Finally one day, he had it with all my myself, someday I would live there. kalokohans, and said that it was time to get serious and go back to school, to take an MBA. Once you have a dream, you’ve got TO HAVE A PLAN. My parents took me on a trip to the US to visit about half a dozen schools. We visited As far as I can remember, I always had a plan. Harvard Business School in Boston. My father My goal was to study in the U.S and live in New even arranged for me to sit in some classes and York City. I thought that the students were very intense and the environment was very competitive. Then we My father said that if I studied hard, I would visited New York, the city of my dreams. We went be able to study in the U.S. and live there. With to Columbia University and I decided that NY this goal in mind, I was focused to go to the top was my first choice — oh, how I loved the city! university in the Philippines, UP (much against my But my father said that if I studied in NY, he would father’s wishes, since he went to De La Salle). not pay for my education because I would just get distracted. Oh, well… At UP, I got a bit distracted in my first and second years in college and managed to get myself kicked So we went to visit the West Coast; Stanford, out of the accounting program. Afterwards, I set a UCLA, and UC Berkeley. plan to graduate cum laude, despite entering the college of business with a 2.0 average, and ended However, on our way to California, we decided to up graduating cum laude. stop for a couple of hours in Chicago. We took a train to Evanston and visited the beautiful Northwestern This enabled me to land a job as a management campus of Kellogg School of Management and we associate for Citibank, where they rotate you to all fell in love with it. The curriculum fostered more different units of the bank. After two years at Citi, collaboration and teamwork than most business → 54 | Feature
schools. Also, Evanston was an hour away from Chicago — it was close enough, but not too close so I would not be distracted.
I returned to Manila and my father enrolled me in a GMAT course to study for the exams. I finally got accepted into Kellogg. Before I boarded the plane to Chicago, my father pulled me aside and said, “If I catch you doing anything immoral, I will cut you off.” Oh, wow!
When I graduated in 1987, it was very difficult to get a job because of the financial crisis, and , also, I did not have a U.S. visa. My father advised me to just keep on applying for jobs, so I sent out 200 applications and had 100 interviews. Finally, in the spring of 1989, I received an invitation for a second round of interviews at Citibank NY. I flew to NY for spring break, got interviewed and landed that job. I thought, ‘Wow, dreams do come true! Now I could live happily ever after.’
Working at Citibank in NYC was more challenging than I thought. It was a daunting task to climb the corporate ladder as a management associate. It was very tough and incredibly competitive. I soon realized that there was a hierarchy in the corporation. At the top you had the male WASPs and just transfer to London. Finally, they allowed (White Anglo-Saxon Protestants). Below that, you me and my career took on a new twist. had the non-white males, then the white females. Then, finally, came all the rest - including Asian I shone in Europe and moved up the ranks women, cats, dogs, and cockroaches. I was known quickly. It was great to have a woman mentor who as “the sweet and subservient Asian woman who helped me — not only providing guidance on how worked hard but doesn’t speak up”, so everyone to navigate my career, but pushing for me. She took credit for my work and often got promoted invited me to move to Citibank Milan and promoted faster. me to VP after seven years, which is not a bad achievement! I was miserable. I felt I had hit the glass ceiling. Oftentimes, I spoke with my father and told him that So it really pays to have a mentor. I wanted to return home, but he said it was worse in the Philippines — there were lots of brownouts My fourth guiding principle is and almost no economic growth in the early 90’s. TO BE AUTHENTIC. He advised me to “hang in there”; be patient and find opportunities. And - he was right. I had the opportunity to listen to the Crucibles of Leadership by author Robert Thomas, who One day, I was sent to London to work on a said “what matters most is what one makes of project. There I met some wonderful colleagues, experiences, particularly the traumatic and often one of whom became another mentor — Paula unplanned crucible events that challenge one’s Sestito. The folks at Citibank London gave me a identity as a leader”. What distinguishes leaders break and invited me to join them and work there. who grow through a crucible experience? - their At first, my bosses in NY did not allow me to move. approach to learning. However, after a year, I told them that if they did not allow me to move to London, I would quit anyway → AmCham Philippines | September 2019 55 56 | Feature
Although I experience terribly traumatic medical My personal passion is to help build the experiences, I have learned from them. To be Philippines, to make it a greater country than strong, to never give up, to always cast a wide net it is today. I was a Martial Law baby and never and find solutions. Most of all, when you are faced thought that we would ever experience the kind of with two near-death experiences, you think that economic development we are experiencing today. nothing can faze you, that everything is solvable, In one of the workshops I attended, we were asked and you become authentic. You cut through the to reflect on what our passions are, and why. noise and just focus on what is important. I often wondered myself why building the Which leads me to my next point, which is Philippines is such a great passion for me, when TO HAVE A PURPOSE BEYOND ONESELF. frankly I do not consider myself very nationalistic. I had to search deep down inside myself.
I also would like to show the world that there is more to the Philippines than domestic helpers. We have many talented people in our beautiful country and we should continue to educate the world about our people and attract more foreign direct investments into our country.
Having said that, I would encourage you all to: • Find purpose in your life story • Embrace your life’s crucibles • Constantly seek feedback • Develop a practice of self-reflection Photo credit: Chesca Gardaya • Transform from “I” to “We” How many of you have a purpose beyond yourself? In addition to finding a purpose that belongs to yourself, it is equally important For any leader at any level in any organization, TO KNOW YOUR STRENGTHS. clarity of purpose is a critical ingredient of success. A compass provides the ideal metaphor. Just like How many of you have taken a 360-degree a compass points toward a “true north” magnetic assessment? I underwent a Zenger Folkman (ZF) field, your personal “true north” directs your path 360-degree assessment a few years ago. ZF uses and pulls you forward. 16 competencies and compares you to the global standards of extraordinary learners. Based on my I had the opportunity to attend a class with ZF results, they have identified three competencies Prof. Bill George, who talked about finding your above the 90th percentile, which are: true north. He said that in order to find your true • Innovates north, you need to understand your life’s story. • Open to change He gave examples like Starbucks CEO, Howard • Connects to the outside world Schultz, who offers health insurance to all his employees, whether they are part-time or full-time. Of course, I have also focused on areas that One winter, his father had an accident and slipped. need improvement, such as builds relationships, He did not have any health insurance, since their collaborates, and teamwork. I have been working family had no money. So Bill vowed to provide towards listening to other people’s ideas more, health insurance to all his employees. and collaborating, since I used to be more of a listen-to-my-idea, or “the highway”-type of leader. How about Oprah? How many of you know that Oprah was raped as a child, and was a battered wife? This is why she is involved in foundations Carol hopes her ten guiding principles will that protect and help children, unwed women and inspire and encourage people to start down their battered wives. own career path to success. AmCham Philippines | January 2020 57 58 | Feature
MARINDUQUEMARINDUQUE RISINGRISING Text and Photos by J. Albert Gamboa
he smallest province in the Southern Tagalog region of Luzon, Marinduque is comprised by six municipalities with a total area of 953 Tsquare kilometers and a combined population of 234,521 as of the 2015 census. Its capital is the town of Boac, a first-class municipality that hosts the province’s main business district as well as most of its commercial and educational institutions.
and inaugurated in 2011 as the so-called “Heart of the Philippine Archipelago.” Rice production and coconut growing are Marinduque’s primary industries. Fishing, handicraft exports, and butterfly farming also contribute significantly to the provincial economy. The local tourism industry spikes during the Lenten season when the centuries-old Moriones Festival is staged annually in the towns of Boac, Gasan, Mogpog, and Santa Cruz. HEART OF THE PHILIPPINES Marinduque is a heart-shaped island province TREE OF LIFE situated at the geographical center of the Philippines According to a recent report from the Philippine based on the grandparent of all Philippine geodetic Council for Agriculture, Aquatic, and Natural surveys, the Luzon Datum of 1911. The exact Resources Research and Development (PCAARRD), central spot is at the top of the highest hill in the an attached agency of the Department of Science town of Mogpog, where the national historical and Technology, coconut remains to be one of the landmark at Station Balanacan was developed by country’s major export crops and is widely known the provincial government into a tourist destination as the “tree of life.” AmCham Philippines | January 2020 59
ECONOMIC EXPANSION OF MIMAROPA REGION t the turn of the millennium, Southern Tagalog was the Philippines’ biggest region in terms of land area and population.A Designated as Region IV by the national government for administrative purposes, it consisted of six provinces in the southern part of Luzon and five island provinces adjacent to the Visayas. In 2002, then President Gloria Macapagal Arroyo issued an executive order partitioning However, there has been Southern Tagalog into Calabarzon (Region IV- no significant improvement A) and Mimaropa (Region IV-B). Calabarzon is in the coconut industry for composed of Cavite, Laguna, Batangas, Rizal, the past years, and the study and Quezon, while Mindoro Oriental, Mindoro points to the controversial Occidental, Marinduque, Romblon, and Palawan “coco levy fund” from the belong toMimaropa. The province of Aurora was martial law era as a factor transferred to Central Luzon (Region III). that has adversely affected Among the 17 existing regions of the the industry. Philippines, Mimaropa was the second fastest growing in 2018 with a gross regional Despite these challenges, development product growth rate of 8.6%. some local firms still continue Mimaropa’s economic expansion was largely to promote the value of due to the performance of the industrial and coconut products and one of them is Marinduque services sectors that registered growth rates of Land Corp. (MLC), an agri-based company 11.2% and 9.3%, respectively. The agricultural domiciled in the municipality of Gasan near the sector also grew but at a slower rate of Marinduque domestic airport on the western side 2.6%. Construction was the top contributor of the island. to industrial growth, followed by mining and Recently I visited MLC’s production plant quarrying, manufacturing, electricity, gas, and in Gasan. The virgin coconut oil (VCO) factory water supply. produced several variants of handmade soaps and According to the Philippine Statistics dietary supplements plus a “ginger coco rub” made Authority, Mimaropa’s regional economy with turmeric herbal extract and wax from native accelerated at its fastest rate since 2010. National honeybees. Economic and Development Authority regional director Susan Sumbeling said: “The region will continue to encourage more private sector investments and build the proper infrastructure for the efficient delivery of products and services to its island communities.” With such attractions as Palawan’s more than a thousand tropical islands, Occidental Mindoro’s Apo Reef marine sanctuary, Romblon’s unexplored beaches, Oriental Mindoro’s Puerto Galera sunset parties, and Marinduque’s historic Moriones Festival – indeed the future looks bright for Mimaropa Region. 60 | Feature
HEALTH AND WELLNESS “Our mission is to help uplift the standard of living of the most neglected among the farmers,” Ms. Muhi MLC owners Archie Armada and Susie Muhi disclosed, referring to the island’s coconut farmers. were introduced to me during the Pistahan Festival “We believe that coconut is heaven-sent not only in San Francisco, California in August 2018. for a variety of physical ailments but also to cure the Their exhibit booth showcased MLC’s health and economic hardship afflicting our coconut farmers wellness products under two brands: Heaven’s and take care of their overall well-being,” she added. Cure for the food line, and Heaven’s Care for the This jibes with the advocacy of PCAARRD cosmetics line. At that time, my jet lag had not to achieve inclusive development and reach the worn off and their “sweet crystal oil” product made full potential of the Philippine coconut industry, me feel so much better. translating to welfare improvement on the lives of “We envision our company to be the catalyst of millions of Filipinos. natural farming in Marinduque. We aim to integrate all aspects of coconut farming and the species interdependent on its produce,” Armada said. MLC J. Albert Gamboa is CFO of Asian Center for Legal Excellence, Director of Long Beach-Bacolod Association, and Chairman of exports its products to such countries as Australia, FINEX Golden Jubilee Book Project. He is also a columnist of Japan, South Korea, and the US. Business World, Manila Bulletin, and Manila Times.
HOW TO GET THERE The fastest and most convenient way from Manila to Marinduque and back is via Cebu Pacific Air with scheduled flights on Mondays, Wednesdays, and Saturdays. Travel time is approximately 45-50 minutes. From the Marinduque Airport in Gasan municipality, it only takes 20 minutes by car to reach the Boac Town Center and Moriones Arena. Other means of transportation include daily bus trips from Metro Manila to Lucena City in Quezon province, where ferry boats and RORO vessels emanate from Dalahican Port en route to any of Marinduque’s three main ports in the towns of Sta. Cruz, Boac, and Mogpog.
WHERE TO STAY AND EAT Balar Hotel and Spa is a boutique resort that opened in 2018 along the Marinduque Circumferential Highway leading to the provincial capital, Boac. Set amid lush green plantations, Balar has its own private beach facing Tablas Strait as well as a relaxation lounge offering spa treatments. Right beside Balar Hotel is the 10 Y.O.Café and Bar serving a varied all-day menu in a Starbucks- like setting. It is located in the same building as the Balar Events Place which has become a venue of choice for regional conferences, seminar-workshops, performing arts shows, milestone parties, and destination weddings. | Organizational Sections AmCham Philippines | January 2020 61
→ 62 | Organizational Sections
Index to Advertisers
American Airlines ...... 23 John Clements Consultants, Inc...... OBC
Belrewmond Corporate Center ...... 03 Kittelson & Carpo Consulting ...... 19
BDO Unibank, Inc...... 13 Marriott Hotel International ...... 07
CalEnergy International Services Inc...... 17 Orion Support, Inc...... 37
Capital One Philippines Support Services Corp...... 35 PMFTC, Inc...... IBC
City Service Corporation...... 15 Quantity Solutions, Inc...... 45
Crown Worldwide Movers, Inc...... 09 Truth Verifi er Systems, Inc...... 51
Dusit Th ani ...... 49 Zuellig Pharma Asia Pacifi c Ltd...... IFC
Emerson Electric Asia Ltd. - ROHQ ...... 21
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