Sales from 2022 soared past 352,000, breaching the industry’s target for units sold on the back of resurging demand. Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) President Rommel R. Gutierrez said the full-year 2022 sales figure “brings renewed optimism” for the local auto industry in 2023, adding that the heights reached in December alone was last recorded in 2017.

Globally, the Philippine auto industry is not alone in its confidence. According to a research report, “Global Automotive Industry Outlook 2024,” published by revenue impact firm MarketsandMarkets this month, the strong recovery in commercial vehicles and the electrification trend in passenger cars are expected to provide a consistent year-on-year growth rate of 5%-7%, causing global automotive sales to rise from over 91 million units in 2023 to over 96 million units by 2024.

In 2023, the global automotive sector showed strong growth even amidst geopolitical tensions and economic uncertainty. The automobile industry as a whole saw sales volumes increase by 10%-15% to more than 91 million units during the year, with notable gains in both the passenger car and commercial vehicle markets.

According to the data, there was also a bump in the commercial vehicle segment from 18% to 20% compared to the previous year. Commercial vehicle sales in the Asia-Pacific region, and especially in China and India, were driven by robust economic growth and an uptick in infrastructure projects.

Notably, the market for electric passenger cars increased by more than 35% from the previous year.

The research noted, however, that North American and European markets are likely to face further obstacles like rising interest rates, commodity price inflation, and geopolitical concerns. Nevertheless, the Asia-Pacific area is expected to make significant strides, propelled by the presence of large automobile markets and big developing economies, especially in India and China.

For a market like the Philippines, it is likely to see similar numbers in terms of growth and development. The latest joint data from the CAMPI and the Truck Manufacturers Association (TMA) showed that new motor vehicle sales reached 314,843 units from January to September, growing at a rate of 26.9% more than the 248,154 units in the same period last year.

“The auto market remained resilient since 2021 and current trend indicates that we will breach the highest pre-pandemic sales performance and achieve full industry recovery in 2023,” CAMPI’s Mr. Guiterrez said.

Because of this, CAMPI has revised its 2023 sales forecast to 423,000 units, projecting a 20% growth from its 2022 actual sales performance. The group also said they are targeting a 10%-15% growth, with sales projected at 395,000 units.

“We recorded the highest monthly sales performance in September and we hope that positive consumer outlook will be sustained in the fourth quarter,” Mr. Gutierrez said.

Looking forward

Despite all the good news, however, cautious optimism is warranted in 2024.

According to Fitch Ratings’ outlook for the global auto sector, even as improved supply chains allow for higher global vehicle production in 2024, overall sales will be tempered by less robust economic conditions, particularly in the US and China.

“We expect global sales and production to rise about 4% in 2024. Fitch forecasts lower economic growth and higher interest rates will dampen overall vehicle demand in 2024, but high pent-up demand due to industry under production over the past several years is likely to support sales,” the renowned rating agency noted.

“More normalized vehicle pricing and mix will bring back some customers priced out of the market. As vehicle production is running at, or slightly above, recessionary levels for nearly three years, we do not expect a sales decline in 2024 but sales are likely to remain well below pre-pandemic levels.”

The Economist also weighed in on the industry’s outlook for the coming year, writing that, “The automotive industry will face another subdued year in 2024, weighed down by slow consumer spending, high interest rates and disruption to supply chains due to geopolitical tensions. The only bright spot will be the electric vehicles market, with sales expected to soar by 21% as governments and consumers try to mitigate the worsening effects of climate change.”

For the Philippine auto industry to overcome the impact of a globally challenging economic landscape, it must take into consideration the state of the consumer market and the key trends driving innovation in the field, such as electrification, smart connectivity, and integrated manufacturing.

With its meteoric rise in popularity in the past several years, electrification will only continue to be a game-changer in the business.

According to a separate analysis from the International Energy Agency, electric car sales are expected to account for 18% of total car sales in 2023.

This can further be bolstered by national policies and incentives that would encourage faster adoption among the population, especially as oil prices remain volatile. According to the agency, the rollout of electric vehicles will eliminate the need for five million barrels of oil a day by 2030.

Already, an increasing number of car companies are funding the research and development of electric vehicles, such as Aston Martin, Jaguar Land Rover, Volvo, and General Motors. In order to fund the anticipated release of about 70 e-models over the next decade, Volkswagen has announced that it has allocated over €30 billion ($32.2 billion) for the initiative by the end of 2023.

Meanwhile, as the Philippines accelerates its push for more developed infrastructure and decentralizing Metro Manila, it can also stand to benefit from the trend of introducing smarter connectivity technologies for newer car models.

Cars today can interact with their surroundings through internet connectivity, and as such, can be used to gather data on the development of smarter roads and cities.

Consequently, car manufacturers need to adopt a mindset similar to software developers, where vehicles of all types are able to communicate wirelessly, integrate infotainment systems, and aid drivers, allowing them to engage in real-time interactions with other vehicles, traffic control systems, and cloud services. This will pave the way for smart home integration, real-time traffic data, and personalized services.

Car makers can reach a wider audience as a result. All passengers, not just the driver, are now the center of attention. Customers of the future will desire digital entertainment options in their vehicles, such as karaoke rooms or reading nooks. 

The advantages of network connectivity can also extend to the designers themselves, wherein they can analyze real-time data and work together remotely on the cloud to create the automobiles of the future.

Finally, advancements in the integration of information technology (IT) systems with operational technology (OT) systems can drive innovation and productivity for manufacturers.

From an IT perspective, there are currently a plethora of artificial intelligence tools and apps, like ChatGPT, to choose from. On the operational side, there are more recent uses such as robotic arms with articulated limbs and machine vision. With the combinatorial approach, teams have greater leeway to pick and choose which solutions will deliver the most value in manufacturing.

While one might be hard-pressed to expect the Philippines to lead in the adoption of these trends, slowly incorporating similar technology and ideas into the development of the auto industry could help accelerate its never-ending drive towards progress. — Bjorn Biel M. Beltran

One of the most significant advancements in the automotive industry was the introduction of mass production techniques in the early 1900s. This strategy allowed for the production of affordable cars that the average person could purchase. As a result, the demand for automobiles increased steadily. Car manufacturers strived to make their vehicles more efficient, durable, and safer in the following years, leading to ground-breaking innovations such as seat belts, air bags, and anti-lock braking systems.

Later in the 20^th century, there was a shift towards manufacturing high-performance cars as consumers expected more powerful and faster vehicles. Furthermore, technological advancements in the automotive industry have made high-performance cars more efficient and affordable. For instance, computer-aided design (CAD) and engineering have allowed car manufacturers to create more aerodynamic body shapes, lighter materials, and powerful engines. These advancements have led to the creation of faster, more fuel-efficient, and environmentally-friendly cars.

High-performance vehicles, also known as performance cars, are designed to deliver superior speed, power, and overall driving experience. They are characterized by their sportier design, high-performance accessories, and superior capabilities in terms of speed, cornering, and general performance.

From V8 found in muscle cars to the turbocharged V6 used in sports cars, these vehicles deliver incredible horsepower and torque.

In addition, high-performance cars are designed with great attention to detail, aiming to deliver exceptional handling and driving dynamics. They come equipped with advanced suspension systems, precise steering, and aerodynamic designs that enable superior control, responsiveness, and agility on the road.

To achieve impressive performance and speed, performance vehicles often employ lightweight materials in their construction. Carbon fiber, aluminum, and composites are commonly used to reduce the overall weight of the vehicle. This weight reduction allows for better acceleration, agility, and fuel efficiency, contributing to the car’s ability to optimize power and deliver its performance.

On the other hand, high-performance cars are not solely about their raw power. They also incorporate technology to amplify the driving experience. These vehicles come equipped with advanced features such as adaptive suspension systems, performance-enhancing traction control, and customizable driving modes. Moreover, high-performance cars often include sophisticated infotainment systems, digital instrument clusters, and driver-assistance technologies, to enhance comfort, convenience, and safety.

The design of these cars is created to draw attention that distinguish it from other vehicles. Hence, high-performance vehicles are characterized by sleek contours, aggressive lines, and efficient profiles.

High-performance cars are commonly linked with exclusivity and prestige. They embody the ultimate achievement in automotive engineering, and their ownership is highly sought after by enthusiasts and collectors all around the globe.

These vehicles are built to be fun to drive, often creating a desire to drive just by looking at them. While they offer an exhilarating driving experience, they typically come with higher price tags and maintenance costs compared to regular cars.

The automotive industry strives to exceed the boundaries of performance, engineering, and innovation. With the continuous advancements in technology, materials, and design, high-performance cars released this 2023 are expected to redefine the previous notions of what is possible on the road.

Lexus RC F

The Lexus RC F is a high-performance car that has earned a reputation as one of the top vehicles in its class in 2023. The car is powered by a 5.0-liter V8 engine that boasts an impressive 472 horsepower, making it the most powerful V8 engine in Lexus’ lineup.

With an acceleration time of 4.4 seconds for 0 to 60 mph and a top speed of 176 mph, the RC F gives drivers an exhilarating ride.

The latest model is equipped with a 10-speaker audio system with satellite radio, heated and ventilated leather front seats, and a heated steering wheel with a power-adjustable steering column. The RC F also features Lexus’ 2.5 Safety System+ suite of driver-assistance technology, including forward-collision warning and adaptive cruise control.

The exterior of the car is considered distinctive, with an aggressive style that sets it apart from its competitors. The interior is well-crafted and curated, providing a comfortable and enjoyable driving experience.

Lexus LC 500

The 2023 Lexus LC 500 is a luxurious and stylish vehicle that offers a perfect blend of performance, comfort, and elegance. It is equipped with a high-performance 5.0-liter V-8 engine that generates 471 horsepower and 398 pound-feet (lb-ft) of torque, making it a powerful and smooth-riding vehicle that competes with other luxury sports cars in the market.

The LC 500 comes with a quick-shifting 10-speed automatic transmission that provides smooth and responsive acceleration. Despite being heavier than its main competitors, the LC 500 offers a pleasant driving experience with precise steering and well-controlled handling.

Inside the car, the LC 500 offers a luxurious experience paired with advanced technology. The low instrument panel position, for instance, emphasizes a balance between function and comfort.

The vehicle has a more focused color palette with nine exterior colors, and its design is characterized by its flowing lines, large glass panel, and blacked-out rear pillars that create a floating roof appearance. Moreover, the LC 500’s unique light signature at night has taillamps inspired by the glow of a jet’s afterburners and ultra-compact, triple-projector LED headlamps.

Toyota GR Supra

The 2023 Toyota GR Supra, meanwhile, is a high-performance car that aims to enhance a person’s driving experience. One of the significant updates for the latest model is the inclusion of a six-speed manual transmission for the GR Supra 3.0 model.

The 2023 GR Supra offers a turbocharged 2.0-liter 4-cylinder engine with 255 horsepower and 295 lb-ft of torque, as well as a turbocharged 3.0-liter inline-six engine with 382 horsepower and 368 lb-ft of torque.

In addition, the latest model of the car has revised tuning for the suspension and steering systems, allowing additional wheelspin on one of the rear tires to help rotate the vehicle  around ultra-tight, hairpin turns.

The 2023 GR Supra comes with updated technology features, such as a color head-up display, navigation, wireless Apple CarPlay, and wireless smartphone charging, which were not available in previous models.

Moreover, the introduction of the manual transmission has been received positively, as it enhances the connection between the driver and the car, resulting in a more personalized and engaging driving experience. — Mhicole A. Moral

One of the leading modes of cashless payment being widely used today is the use of credit cards. According to the most recent “Consumer Payment Attitudes Study” by Visa, the use of contactless cards, whether credit and debit, is coming in close behind e-wallets as the most preferred mode of cashless payments in Southeast Asia. The former garnered 80% of respondents in the study, while the latter tallied 83%. Moreover, in recent years, the use of cards in Southeast Asia has become a primary payment method for consumers and it varies throughout different markets; Singapore is leading at 82%, followed by Malaysia at 69%, and Vietnam at 57%. The Philippines, for its part, has online card payments as one of Filipinos’ top digital payment methods they currently use, garnering 50% of respondents from the country.

Credit cards have been one of the most convenient modes of cashless payments for consumers, and yet they can also be a tool to enhance financial management in businesses.

According to a recent poll conducted by United States-based Forbes Advisor, 29% of businesses sought funding through business credit cards in 2022, and 4.67% of respondents reported that they had used business credit cards as their primary source of funding to kick-start their businesses. The poll also found out that of those who utilized either a business or personal credit card to fund their business, 25.4% of respondents, or one in four users, chose to use a credit card due to restricted access to conventional financing alternatives.

Among small businesses in United Kingdom, meanwhile, Intuit’s Small Business Index Annual Report found that credit card expenditure for business is up by 22% since before the pandemic. In addition, from 32% in September 2022, the proportion of respondents who had used credit cards or loans to support their cash flow increased to 51%.

Using credit cards for businesses offers significant advantages. One of these is establishing business credit, which is found to be important in expanding one’s business. Business credit can be built by paying bills on time, paying more than the minimum, and not going over the credit limit. This, in turn, can increase a business’ credit line or loan approval at a lower interest rate in the future.

Also, with a business credit card that is not tied to one’s personal credit but reports exclusively to relevant business credit agencies, owners can keep their personal finances and business finances separate from each other.

Another advantage businesses can get from getting their own credit card is the ability to protect against cash flow disruptions during economic uncertainties.  JPMorgan Chase & Co., in a discussion about their research on the use of credit cards among small businesses, recognized that credit cards are part of a suite of cash flow management tools.

“Credit cards can be an alternative for cash liquidity, providing financing when firms cannot pay in cash,” JPMorgan Chase wrote on its website, adding nonetheless that maintaining adequate cash buffers remains important as credit cards are found to be not always accepted for the expenses small businesses face.

As to how small businesses used such cards, the financial services firm noted, “Many firms are consistently transactors or revolvers over one to two years, suggesting that their routine use of credit cards is either as a means of payment or as a financing instrument. Nevertheless, a core credit card feature is flexibility: card holders may choose each month whether to pay in full or revolve.”

“They offer a flexible line of credit, which can be particularly helpful for covering unexpected expenses or making strategic investments. Plus, many business credit cards offer reward or cashback incentives that, over time, can provide additional benefits,” Antony Smith, director at comparison site Business Expert, said in an article published by Institute of Chartered Accountants in England and Wales on its website.

Speaking of rewards, even business credit card users can earn rewards with every purchase, which can be used to cover expenses, such as payroll, utilities, software, and other subscriptions needed for one’s business. Some even offer cash-back benefits, meaning users can get a percentage back on your purchases.

As with any financial tool, nonetheless, it is important to mindfully use business credit cards, as every use and compliance to terms of use will factor into an organization’s credit score and overall financial health.

Businesses need to have clear rules about how they spend using their cards, like how much they can spend, and when they can use them. For effective cash flow management, restricting transactions to a specific amount, spending category, and specific day or time is crucial to reduce risk in your business.

According to CNBC Select, when choosing a credit card that is best for one’s business, owners should think about what kind of payment options they prefer and what rewards and perks would be most helpful for their spending.

In terms of tracking activities, many business credit cards set up alerts in texts and emails about transactions, letting them know every time their business made a purchase or if someone illegally uses your card. Businesses can also track their account through online or mobile banking. On top of these, nonetheless, it is important to ensure that the accounting team in the business looks over each statement and makes sure you, as the owner or manager, approves each line of item. — Angela Kiara S. Brillantes

As concerns about environmental impact and climate change continue to grow, automakers are shifting their attention toward developing cleaner, greener, and more sustainable solutions.

Major car brands are now investing heavily in research and development to create innovative and sustainable electric alternatives. As a result, these vehicles are harnessing the power of renewable energy sources, significantly reducing greenhouse gas emissions and diminishing the industry’s carbon footprint.

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Lexus, a luxury car brand based in Japan, seeks to address the importance of sustainability, technological innovation, and a seamless driving experience with their first battery electric vehicle (BEV) on the market — the Lexus RZ 450e.

Lexus’ flagship model is designed with precision and purpose, showcasing its commitment to pushing the limits of electric vehicle capabilities as the automotive industry enters the age of electrification.

Lexus Chief Engineer Takashi Watanabe said that the development of RZ strongly emphasizes the delivery of an incredible driving experience.

“The RZ has been developed with the aim of creating a unique Lexus BEV that feels secure to ride in, is pleasing to the touch, and is exhilarating to drive. Our vision is to use electrification technology as a means to enhance fundamental vehicle performance so that we can continue to pursue driving pleasure for all future generations,” said Mr. Watanabe.

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Lexus’ electrification

At the heart of the RZ innovation lies the commitment to the Lexus Driving Signature, a philosophy that revolves around elevating the core characteristics of the brand — confidence, control, and comfort — in all driving situations.

Central to achieving this vision was the meticulous design, focusing on enhancing aerodynamics and energy efficiency.

The Lexus RZ boasts an impressive drag coefficient of 0.28 Cd, dedicated to minimizing air resistance by incorporating aerodynamic measures at every level.

The cabin shape is optimized to ensure smooth airflow on the outside and comfort inside. The belt molding sits flush with the bodywork, helping regulate the airflow and stabilize the car. The rear spoiler design contributes to handling and stability in straight-line driving and crosswinds without producing drag. The back door is shaped to adjust the airflow angle from the roof, reducing drag and contributing to the driver’s sense of the car being in firm contact with the road.

To further reduce drag, the car features a fully covered underfloor, with the front section featuring a dimpled surface that helps maintain stability at high speeds, and the rear features fins that direct airflow from the wheels.

Lexus RZ also comes with new e-Axles, the compact motor units used front and rear that work in conjunction with the new DIRECT4 all-wheel electronic drive torque control. The system adjusts the vehicle’s posture, traction, and power distribution according to the driving conditions.

In addition, the engineers and designers of Lexus RZ made it a priority to ensure that the cabin environment was calm and quiet. Lexus applied a three-part strategy: controlling the noise, preventing it from entering the cabin, and paying particular attention to the noise experienced in the rear seats.

The vehicle is equipped with the all-new Lexus Link multimedia platform, enabling faster operation and providing increased functions for connectivity, efficient planning and communication.

The RZ’s cockpit is an evolution of Lexus’ Tazuna concept to offer maximum convenience to the driver, featuring a precise arrangement of meters, controls, and displays that allow the driver to operate the vehicle with minimal hand and eye movements.

Partnering with premium audio equipment brand Mark Levinson, Lexus provides the vehicle with Pure Stage technology, which replicates the distinct sound features of specific performance venues, providing a unique and immersive sound experience. The car’s 10-speaker system ensures high-quality sound reproduction across all genres of music.

Safety features

The RZ also benefits from the latest generation of the Lexus Safety System +, which includes new and enhanced functions that work seamlessly in the context of a battery-electric vehicle, recognizing and responding to a wider range of accident risks.

The Pre-Collision System used by the RZ employs radar and camera technology that has a greater detection range and can recognize a broader range of hazards than before, including the risk of a head-on collision with traffic from the left or right when turning at an intersection.

The Lexus Safety System + package for the RZ also provides an Automatic High Beam or an Adaptive High-beam System (AHS) for automatic adjustment of the headlight beams to achieve optimal forward illumination without dazzling oncoming traffic. The RZ is the first Lexus to be equipped with AHS using a single bi-projector LED headlight.

The RZ uses the smooth and simple e-latch electronic door release system, which is linked to the car’s Blind Spot Monitor to provide Safe Exit Assist. This prevents doors from being opened in the path of cycles or vehicles approaching from the rear. Lexus estimates that this safety feature can prevent more than 95% of accidents caused by hazardous door openings.

Other safety features include the following: Emergency Steering Assist to keep the car stable within its traffic lane; Dynamic Radar Cruise Control (DRCC) to allow driver to customize inter-vehicle distance setting; Lane Departure Alert (LDA) and Lane Tracing Assist (LTA) to distinguish road markings; Deep Neural Network to recognize 3D objects in adjacent lanes or work zones; Road Sign Assist to recognize highway warning and command signs; and Advanced Park to move the car efficiently into parking spaces.

Battery

The RZ 450e is equipped with a 71.4-kWh lithium-ion battery, which is expected to retain at least 90% of its capacity after ten years of driving. The vehicle achieves energy consumption between 16.8 kWh and 18.7 kWh per 100 km in the combined Worldwide Harmonized Light Vehicles Test Procedure (WLTP) cycle.

The RZ comes with a compact and lightweight 11-kW onboard charger. When connected to a three-phase power supply, it only takes approximately 6.5 hours to fully recharge the battery. On the other hand, it will take about 10 hours when connected to a one-phase supply. The fastest way to recharge the battery is by connecting it to a DC fast-charging system, which can provide up to 80% charge in 30 minutes.

The all-new Lexus RZ 450e is available in several exterior finishes, including the new Aether Metallic, inspired by the blue sky, and the striking Sonic Copper. It is also available in Sonic Chrome, Sonic Quartz, Sonic Iridium, Graphite Black, and a bi-tone design with a black finish. The vehicle price starts at P4,828,000.

For more information, visit the Lexus website at lexus.com.ph or its Facebook (Lexus Philippines) and Instagram (@lexusph) pages. Android and iOS users can also get the latest updates and premium services via the MyLexus app.

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Unlike other countries, a Filipino Christmas is quite lengthy; and the Christmas season here is known to be the longest Christmas season in the world. Filipinos are starting to decorate and light up their surroundings, play popular Christmas songs, and planning for festivities as early as September.

Christmas is a festive time when loved ones come together. The season is a reminder of the love and strong bond that ties families for a long time. Many families travel a long way to celebrate the holiday to reunite with families and friends over delicious meals and fun stories that fill homes with laughter and joy.

Season of feasting

For many Filipino households, Christmas is not complete without the food. Most Filipinos start celebrating Christmas at midnight with the traditional Filipino Christmas feast of Noche Buena. The most common dishes served at Noche Buena include lechon, spaghetti, hamon, fruit salad, and queso de bola; albeit the options nowadays are endless.

For sweet treats, there are rice cakes such as bibingka — a traditional soft and sweet rice cake that is baked in clay pots or leaves and paired with egg, cheese, or unsweetened coconut shreds as a topping; and puto bumbong, purple-steamed rice cakes cooked in bamboo tubes.

Season of giving

Christmas is also known as the season of giving. In addition to exchanging well-thought gifts, there is another means of giving that puts a twist to the usual gift-giving. “Monito Monita” is usually done among family, friends, schoolmates, or workmates. In the gift exchange, before giving the gift straightforwardly, you must describe the person. A further twist to this giving is where participants give something related to a given theme, such as “something cute,” “something heavy,” etc.

While unwrapping gifts is great, there’s nothing as exciting as opening a red envelope with money inside, which is called ang pao, often given by godparents (ninong or ninang) to their godchildren (inaanak).

Accentuating with decorations

Enchanting decorations also make Christmas in the Philippines more unique, from blinking colorful lights, our very own parol, and other unique fixtures.

One of the most popular Christmas decorations in the country is our own version of the Christmas lantern, the parol, which comes in a large circle with a star in the center. Today, parols are hung everywhere — on lampposts, houses, malls and offices, shining bright at night. It also comes in a variety of shapes, sizes, designs, patterns, and materials.

Also, parols are admired because of their unique designs that leave people mesmerized every time they see them. Parols have always been a part of Filipino Christmas celebrations and they are always a part of every feast and parade across the country. Aside from being a decoration, parols are also considered a beacon of hope, a symbol of the vibrant Christmas culture and of hard work.

Belen, or the nativity scene, is another symbol unique to the Filipino Christmas celebration, which is a combination of different materials and can be seen in churches, homes, schools and office buildings. It is a three-dimensional art representing the birth of Jesus Christ: the baby Jesus in a manger, surrounded by the Virgin Mary, St. Joseph, the shepherds, their flock, the Three Kings and some animals and angels. Derived from the Spanish name for Bethlehem, the birthplace of Jesus Christ, the belen was introduced in the Philippines by the Spanish Franciscans during the colonial period.

Christmas trees are also a common fixture in homes and offices; and in the Philippines, these trees are more than evergreens, and they differ in size, color, and design.

Strings of blinking tivoli lights, snowflake ornaments, and Santa Claus with his reindeer are also some of the decorations that bring joy and comfort on the streets or at home.

Season of gathering

Christmas carols have been a tradition worldwide, but Filipinos are found to do caroling differently. Singing carols from house to house, the way it was done in the country, has a little twist and more humor. In addition to the traditional caroling with costumes or lyric books, Filipinos use recycled instruments and made-up lyrics.

Another tradition that lives on in the Philippines is celebrating mass during Christmas. There are many religious practices that Filipinos observe during the season. For instance, they attend the night mass (Simbang Gabi), where they spend the nine days leading up to Christmas attending mass early in the morning or late at night. There is a belief that when people finish the nine days, they can be granted a wish.

On Christmas Eve, they also attend the Christmas mass or the Misa de Gallo, a celebration involving the lighting of candles, projecting displays, or sometimes the reenactment of the birth story of baby Jesus.

This year, there are several performances available for public viewing that embody the genuine essence of the Filipino Christmas tradition. These shows include the first all-Filipino Christmas ballet Puso ng Pasko, performed by the artists of Alice Reyes Dance Philippines and the Cultural Center of the Philippines’ Professional Artist Support Program. The performance was premiered at the Metropolitan Theater in Manila last Dec. 1 and 2, and there will be a free public tour across Luzon, with stops at Pampanga, Tarlac, Nueva Ecija, Makati City, and the Malacañan Palace.

Stronger relationships, physically and virtually

In recent years, Filipinos celebrated Christmas differently. Due to the coronavirus pandemic, the holiday celebration was more restricted; but that was not a hindrance for still celebrating the season with each other. Many families used digital platforms to communicate with their loved ones; buying and sending gifts are made online; and gatherings are held through videoconferences.

Now, as the world returns to a new normal, Christmas celebrations are gradually returning to how they used to be. There are more people flocking to malls for shopping, gathering in churches for worship and reflection, and families will surely reconnect over a rich feast of sumptuous food and drinks, celebrating the fruits of hard work done for almost a year.

Whether it is celebrated physically or virtually, the season is about a celebration of love, the joy of giving, sharing blessings, and spending time and creating memories with loved ones — this is the true essence of Filipino Christmas. — Angela Kiara S. Brillantes

In Filipino culture, shopping during the holiday season is a long-standing tradition, with Filipinos enthusiastically taking part in gift-giving as a way to show love and appreciation to their loved ones.

According to a survey conducted by market research company Ipsos, holiday shopping budgets are rising after being stagnant for three years, with 32% of consumers planning to increase their budget. Additionally, PwC stated that almost 40% of consumers will spend more overall than last year.

However, there seems to be mixed feelings about spending this holiday season, with concerns about affordability and crowded retail places.

Despite the negative feelings brought by the current situation, Filipinos have found ways to continue shopping and express their love for their families and friends, as they still remain excited to celebrate. In fact, according to the latest data from the Bangko Sentral ng Pilipinas (BSP), Filipino consumers remain optimistic, with an outlook index of 18.9% in the third quarter of 2023, albeit lower than the 20.5 % recorded in the second quarter.

The following are some tips to make your shopping less stressful as just few weeks are left before Christmas Day.

Plan ahead

Long queues, last-minute decisions, and crowded stores can turn a festive experience into a chaotic one. Procrastination is the enemy of stress-free shopping, so planning it ahead of the sprees is essential.

Having a well-thought-out list and making purchases in advance allows you to choose thoughtful and quality gifts without succumbing to the pressure of time constraints.

In addition, planning ahead enables the consumer to secure popular items before they fly off the shelves.

For instance, Gen Z has specific shopping preferences related to planning, according to PwC. They tend to look for gift ideas in stores (67% vs. 58% overall) and on social media (41% vs. 31% overall). They also prefer to use social media for comparison shopping (34% vs. 27% overall) and to learn about sustainable companies (70% vs. 51% overall).

Set a budget

According to a recent CNET Money survey, 69% of respondents admitted that they are likely to overspend on purchases during the upcoming holiday season. Out of these, nearly one-third of shoppers said their overspending would happen in December, while 27% said they would probably overspend during fall holiday shopping events.

Having a budget during the holiday season is like a financial roadmap that helps prevent overspending. People can allocate specific amounts for gifts, decorations, and other expenses, allowing them to prioritize their spending and avoid going overboard. 

Moreover, the American Psychological Association (APA) reports that financial concerns are often cited as the leading cause of stress during the holiday season. Therefore, a well-defined budget not only prevents overspending but also contributes to overall financial well-being, reducing stress levels and promoting a positive holiday experience.

Get the best deals

During the holiday season, many people feel the pressure of finding the perfect gifts for their loved ones. This, combined with the financial strain of the holidays, can lead to increased stress. While the pursuit of sales and bargains may bring joy, it can also lead to excessive spending, which can bring on even more stress after the celebrations.

Maximizing your purchasing power is possible by taking advantage of buying deals that offer more value for money. Whether it’s a discount, buy-one-get-one-free offer, or bundled package, utilizing these bargains ensures that every dollar spent goes further.

In addition, the holiday season often comes with a time crunch, and shopping for gifts can be a time-consuming process. However, searching for deals can simplify the process of gift hunting by targeting discounted items quickly.

Knowing where to look for the best deals can save time spent navigating crowded stores, leaving more room to concentrate on choosing meaningful gifts.

Collaborate and delegate

One of the key benefits of delegating and collaborating during the holiday season is the ability to share responsibilities. Instead of taking on the entire burden of shopping, consider dividing the tasks among family members or friends.

To make the process more manageable and efficient, create a shopping list and assign specific items to each person. Delegating responsibilities not only reduces the overall workload, but also fosters a sense of collaboration and shared accomplishment among the circle.

Moreover, discussing gift ideas, seeking advice, and sharing the responsibility of finding the right presents can alleviate stress and create a more positive and enjoyable holiday experience. — Mhicole A. Moral

A Christmas feast, or Noche Buena as we call it here in the Philippines, is the centerpiece of the lavish occasion. Family members come together and share a delicious meal. For generations, Noche Buena is not only a continued tradition but also proof of the strong bond of Filipinos and their loved ones. Also, Christmas, among other significant celebrations, is often the time where most delicious and favorite foods are cooked and served at the table.

Yet, it takes hours of planning the menu, getting ingredients, and preparing dishes before a great and rewarding feast is enjoyed at Christmas Day. Here are some tips to keep in mind in order to have a less hassle and a smoother preparation for that much-awaited Christmas feast this year.

The first step is to make a list. Save yourself from being stressed by planning ahead of time. Prepare according to the size of your kitchen and how many dishes you are going to cook. Know how many people will be included in the feast, what they would like to have on Noche Buena, as well as whether they have food allergies. Make sure as well to have an adequate supply of the ingredients and things needed for the feast. Do not forget to factor in your budget as well.

Then, it might help to have a tentative timeline for getting the ingredients, cooking the meals, and even ordering some food. Planning your feast a few days, or even weeks, ahead will allow you to have more time for shopping and could even save you more time for the preparation period.

When shopping for ingredients, take the time to compare prices and brands that are suitable and more affordable for the feast you have in mind. Take the opportunity as well to look for Christmas sales, promos, and bazaars that might match well with your Noche Buena list. You can also look out for Christmas food in bundles, baskets, or boxes at more affordable prices.

Also, there are many alternatives you can choose from that are much better. For instance, there are products that are locally-produced and more affordable. This also gives you an opportunity to support these businesses.

In relation to alternatives, there’s nothing wrong with going for lower-priced varieties. Other kinds of cheese that as tasty as quezo de bola might go well in place of the traditional round fixture, for instance. Chicken can be considered in place of beef or pork; or a nicely-cooked embutido for morcon.

Amid all these preparations, nonetheless, do not forget learn to enjoy yourself and stay relaxed. Invite a welcoming atmosphere for your family and guests as you prepare those heartwarming meals for everyone to indulge in. As much as you aim for a fantastic feast, do not forget to have fun during the process, especially if you find joy in cooking or baking.

And when Christmas Day finally comes, and all the dishes have been prepared at the table, treat yourself by savoring the dishes you have prepared. After all, Christmas is an opportune time for enjoying the fruits one’s hard work, including the creation of a hearty feast. — Angela Kiara S. Brillantes

It is no surprise then, that Ernesto M. Tanmantiong, the president, CEO, and executive director of Jollibee Foods Corp. (JFC), has been named “Management Person of the Year 2023” by the Management Association of the Philippines (MAP).

The award was previously known as the Management Man of the Year and is an award given by MAP to individuals in business or government who have attained distinction in management and have made valuable contributions to the country.

Despite the award’s nearly six-decade run, just 47 recipients have been recognized thus far since finding the MAP Management Person of the Year is “a tedious process.” Lilia B. de Lima, the award’s judging committee vice-chairperson, pointed out that the award’s criteria include integrity, prestige and distinction in the business community; exceptional ability in performing management functions; and tangible contributions nationwide, among others.

Mr. Tanmantiong has been chosen for “being able to accelerate Jollibee’s globalization and transform it into one of the world’s largest, fastest-growing restaurants,” according to Ms. de Lima.

The feat is all the more remarkable as Jollibee — like much of the restaurant industry — is one of the companies that have suffered the most from the coronavirus pandemic.

“The quick-service restaurant industry was among the hardest-hit sectors by the pandemic. Even though we all are trying hard, this crisis spared nobody. For the Jollibee Group, this meant we had to close hundreds of stores, affecting many of our people, and resulting in a loss in 2020 — a first in our company’s history,” Mr. Tanmantiong had said in a previous interview with Esquire.

“This number could have gone higher if not for the substantial pivots we made to adapt to the changing needs of our customers and our business transformation. I cannot emphasize enough our appreciation for the hard work of our people and our partners, and through their collective effort, we swung back to profitability by the fourth quarter of 2020 and continue to grow and expand in 2021.”

Not that setbacks could hold his ambitions for the company down for long. It is no secret that it has ever been the dream of both Mr. Tanmantiong and his brother Tony Tan Caktiong, the founder and chairman of Jollibee Foods, to become the world’s biggest name in fast food.

“We never thought that we would grow this big, but my brother Tony always likes to dream big. So when we were operating the two ice cream parlors in the seventies, the goal at that time was to be number one in all the ice cream parlors in the Philippines,” he had said, speaking to CNBC.

“Yes, that was already the aim, to be number one. Then when we started introducing hamburgers and transforming the ice cream business into a hamburger business, the goal was to be the number one hamburger chain in the Philippines. At the same time, we were already thinking of expanding abroad.”

Mr. Tanmantiong said that when they achieved the number one position in the Philippines, they dared to dream bigger, setting a new goal post of becoming the largest restaurant company in Asia. They blew past that goal in 2014.

When they set the goal further to be the top 10 in the world in terms of market capitalization, they also achieved in record time. Now, the aim is to be one of the top five restaurant companies in the world in terms of market capitalization.

“We continue to dream big, and even despite the changes brought by the pandemic, our vision remains unchanged: to become one of the top five restaurant companies in the world by serving great tasting food and bringing the joy of eating to everyone,” he had said.

Serving up smiles amid crisis

Due to its size and influence, Jollibee had been instrumental in helping Filipinos during the pandemic through working with the government’s Inter-Agency Task Force, as well as its FoodAID Program. The company has donated over P300 million worth of food to thousands of frontliners and families who were severely affected by the pandemic.

Together with civic groups and other companies in the private sector, Jollibee also launched Project Karinderya to reestablish 320 karinderyas or eateries that have closed due to the pandemic, which benefitted more than 6,400 family beneficiaries or approximately 32,000 individuals.

Customers remain at the core of Jollibee’s operations, and no matter how high Mr. Tanmantiong’s dreams are for the company, he believes that they will continue to keep it that way.

“Many of the changes we’ve gone through were always predicated on our customers — from the time we shifted to hot meals from ice cream during our early ice cream parlor beginnings to today, where we pivot our business to adapt to the changing habits brought by the pandemic. We always strive to stay in tune with our customers, from their shift to digital, reliance on delivery and take-out, and dining in larger groups with their families at home. We responded as quickly as possible,” he had said.

“As the Jollibee Group grows, we want to make sure that the communities we serve grow with us. On top of providing employment opportunities, we also leverage on our expertise as a food company to help communities through the Jollibee Group Foundation.”

He noted that Jollibee programs are centered around access to food, such as the Farmer Entrepreneurship Program, which trains small farmers to become entrepreneurs. The program provides them a setup where they can directly sell to institutional buyers such as JFC, and improve their livelihoods substantially and sustainably.

“We are inspired to do more for our people and customers, to offer more of our great-tasting food to everyone, and to create more progress for the communities where we operate,” Mr. Tanmantiong said.

“We are humbled and honored to be among the brands that are loved by so many people across the globe. We have come a long way from our ice cream house beginnings in 1975. Back then, we were just looking for a stable source of livelihood for our family.”

“But through everyone’s hard work, we’ve grown into a company with over 5,800 stores across 34 countries carrying 17 brands. We know there’s still much to do, and we will not stop in our mission of serving delicious food, bringing the joy of eating to everyone,” he added.

Aside from his leadership position at JFC, Mr. Tanmantiong is also at the helm of Vismin Foods Corp., chairman of Jollibee Vietnam Corp. Ltd., chief executive officer of Jollibee Foods Corp. (USA), treasurer and director at Red Ribbon Bakeshop Holdings, Inc., and treasurer and director at Tokyo Terriyaki Corp. (which are all subsidiaries of JFC), and treasurer and director at Winall Holding Corp.

Mr. Tanmantiong is also on the board of 65 other companies. He holds an undergraduate degree from the University of Ateneo de Manila. — Bjorn Biel M. Beltran

The world is nearly a quarter into the 21st century, and the modern workplace could not be more different from it was back then. The passage of time has quickly introduced technological advancements — like high-speed, long-distance, real-time communications and on-demand computing through mobile and artificial intelligence technology — to enhance the way we work and conduct our businesses.

Another key aspect of such change in the workplace is the integration of younger generations into the workforce. With their fresh perspectives, innovative ideas, and digital fluency, young professionals bring a unique set of skills and experiences that can drive growth, foster creativity, and propel businesses forward.

In the final panel discussion during the recently concluded BusinessWorld Forecast 2024 last Nov. 22, it was mentioned how business leaders today are restructuring their company in order to meet the demands of millennials and Generation Z employees (Gen Zs) and to realize their leadership potential.

To fully utilize the abilities of the two generations towards handling leadership positions, businesses are adopting flatter organizational structures to accommodate young leaders’ penchant for collaboration and openness.

“A command-and-control structure does not work anymore,” Carlos Ramon C. Aboitiz, chief corporate services officer at Aboitiz Power Corp., said. “We need to allow [Gen Zs and millennials] to articulate their own vision, and kill policies that no longer make sense.”

Jericho P. Go, senior vice-president and business unit general manager at Robinsons Land Corp, said, “At management, it’s important to recognize the need to have an open mind. A lot of new ideas are being generated by young people, and it’s important that we emphasize that they are given free space to be able to showcase their intelligence and the things they want to bring about.

“More importantly, as leaders it is important to have this trait of having empathy. Being able to assure and extend that warmth to colleagues so that they would all be encouraged in the activities that they undertake. Agility is also key. Being able to ask and respond accordingly so that those ideas can be able to brought to fruition,” Mr. Go added.

Mr. Aboitiz said that, as the Aboitiz Group of Companies is over a hundred years old, their heritage and family DNA underpin a mindset of stewardship and generational perspective.

“We see the world as an ever-changing one from one transition to another, and we embrace adaptability as a core value in our group,” he said. “And this ensured our survival for a long span of time. We also embrace the diversity that comes with generational change in norms, behaviors, and our environments as opportunities for advancing both our purpose and our profit.”

As the energy sector is one that is seeing the most transformation due to advancements in renewable energy technology alongside increasing pressures from climate change, Mr. Aboitiz said that it is the perfect set-up for young leaders to succeed.

“The state of transformation and transition lends itself to new perspectives and new capabilities, wherein new generations untethered to the old ways of thinking and being play an enormously important role for us. They help bring new ideas to help us figure out how to decarbonize our energy sector. They are forging the path in our pursuit of the data-driven decision-making process with their ability to learn and apply data science and add new AI tools to business processes,” he said.

This is a common point repeated throughout the panel discussion, as one of the greatest assets that younger generations bring to the table is their fresh perspectives. Growing up in a digital age, they have a unique understanding of technology, social media, and global connectivity.

This fresh outlook allows them to challenge traditional norms, question existing practices, and offer innovative solutions to complex problems. By embracing their fresh perspectives, organizations can tap into a wellspring of creativity, enabling them to adapt to changing market trends and maintain a competitive edge.

“It’s their ability to quickly harness technology and new ways of working. I personally saw a lot of that during the pandemic. When we had to do a lot of process adjustments that were normally manual or face-to-face, our young leaders who had a familiarity with low-code, no-code process automation were able do it quickly,” Isabelle Gotianun Yap, executive director and vice-president at East West Banking Corp., said.

“Because of that, we were able to start a committee moving forward about creating a community of young leaders who are optimizing processes using technology. Most of those people are in the millennial and even the Gen Z category.”

As the younger generations have grown up in an era of constant change, they are well-versed in adapting to new technologies and are quick to embrace emerging trends. Their ability to navigate the digital landscape effortlessly provides organizations with a valuable advantage. But that does not mean businesses should not focus on their development.

On this point, Ms. Yap noted the need to continuously improve learning programs and tools for sustainability, alongside providing more and better quality feedback.

“They need opportunities to pilot programs and proofs-of-concept, which the company can do small-scale. Give them that safe space to fail,” Mr. Go said.

“Crazy ideas may not be crazy after all. Voice it, put it in a business plan, and justify its worth in the company,” he added, noting the importance of embedding lifelong learning in company initiatives.”

Encouraging their participation and involvement in decision-making processes can allow companies tap into the young generations’ innovative thinking and drive transformative change. Their eagerness to experiment, take risks, and challenge the status quo can help organizations remain agile in a fast-paced business environment.

Embracing younger generations in the workforce is not just about gaining their skills; it is also about fostering collaboration and bridging the generation gap. There is strength to be found in age diversity, Mr. Aboitiz noted, as it is through creating a diverse and inclusive environment that organizations can facilitate knowledge sharing and mentorship opportunities between different age groups.

“We should not overplay these generational changes. There is nothing to be fearful of,” Mr. Aboitiz said. “[Current] leaders need to overcome [these fears].”

“Understand how our behaviors and expectations are different, and design an environment to allow for the coming together of these differences,” he added.

This exchange of ideas and experiences can lead to enhanced learning and growth for both younger professionals and their more experienced counterparts. It also fosters a sense of mutual respect and understanding, ultimately strengthening the overall fabric of the organization.

“What’s really important with leaders is that we should be centered around a common purpose. Not just a shared purpose, but a shared culture across generations,” Ms. Yap said.

By Bjorn Biel M. Beltran, Special Features and Content Assistant Editor

The prominent theme for many global economic outlooks produced for 2023 is that while growth is still projected largely within reach into next year, there are a number of persistent risks that may compromise and slow down growth all over the world. Despite this, however, the Philippines, owing to certain factors, have largely bucked the trend.

Such was the sentiment shared by many of the esteemed guests and speakers at the recently concluded BusinessWorld Forecast 2024 forum, which took place on Nov. 22 at the Grand Hyatt Manila in Bonifacio Global City, Taguig.

In his keynote address on the “Philippines’ Economic Outlook for 2024,” Asian Development Bank (ADB) Country Director for the Philippines Pavit Ramachandran said the country’s economic growth is currently at the “top of the leaderboard” in Southeast Asia.

“The economy has largely remained resilient, notwithstanding global uncertainties, geopolitical tensions, economic headwinds, interest rates, inflation. We’ve seen a very strong rebound in the Philippines, and we’re actually seeing traction in the growth momentum. A lot of this is underpinned by strong macro-fiscal fundamentals; reforms that have been undertaken and have been continued from the previous administration; and the opening up of several strategic sectors like telecommunications, airlines, shipping, and renewables,” Mr. Ramachandran said.

The Philippines’ 5.9% gross domestic product (GDP) growth in the third quarter overtook the growth rates of Vietnam (5.3%), Indonesia (4.9%), and Malaysia (3.3%). The ADB did, however, lower its forecast for Philippine growth this year from 6% in April to 5.7%.

With a 6.2% growth forecast for 2024, the ADB predicts that the Philippines’ economy would develop the fastest in Southeast Asia.

“There’s a real buzz now about the Philippine prospects. Having said all that, I think we do need competitiveness-enhancing and productivity-enhancing investments particularly to nurture the potential demographic dividends here. That’s going to be crucial, and we need to intensify climate action,” Mr. Ramachandran said.

“You can’t really think of medium- to long-term sustainable, inclusive development without addressing some human deficit challenges. There are still lagging regions in the Philippines. 20 of the poorest provinces are still concentrated in Visayas and Mindanao. 60% of GDP growth still comes from Metro Manila, the Southern Tagalog region, and Central Luzon,” he said.

Mr. Ramachandran pointed out that a lot of the country’s growth is still dependent on domestic demand, household consumption and fixed investment both public and private investment in construction, and in the future, the Philippines would need to improve infrastructure competitiveness and enhance productivity and investments to sustain momentum.

Sharing growth

From the perspective of the World Bank, Country Director for Brunei, Malaysia, Philippines and Thailand Ndiamé Diop said he is optimistic about the country’s growth prospects despite global headwinds. The Philippines, from the international lender’s own data, still remains as one of the fastest-growing economies in the region.

“The good news is that the Philippines really has climbed out of pandemic-induced recession in 2020, and we are quite optimistic about its growth prospects. One of the key reasons is that the structural drivers that are quite favorable despite the headwinds coming from the global economy, and that’s why the economy is quite resilient.”

The headwinds still take their toll, however. The World Bank had reduced its growth forecast for the Philippines to 5.6% in October from the 6% projection it gave in June. It also trimmed its growth forecast for the Philippines to 5.8% for 2024 from 5.9% previously. These are below the government’s 6-7% target for this year and 6.5-8% in 2024.

“Before the pandemic, the world and the Philippines grappled with three long-term challenges: one, building human capital; second, dealing with climate change and natural disasters; and then ensuring inclusive digital transformation,” Mr. Diop said during his address on the theme, “Development Imperatives in a Post-Pandemic World.”

“In this brave new world, what should government do? Essentially, they should have a two-speed strategy. They should deal with immediate shocks, and they should address longer term development challenges that haven’t disappeared,” he added, identifying the need to support and provide safety nets for households struggling with rising costs, manage inflation, and ensuring food supply and security.

“What we think is a key area to focus on and work more towards is to ensure that that growth and the prosperity generated is shared more widely in the Philippines. That every Filipino, wherever you are in the country, [is] connected to that growth prospect and benefit from it. And this what I see as the key challenge for the Philippines going forward. The best way to do it, to make sure that there is equality of opportunity is to build the foundation right now.”

“It will be really important to further enable private investment and innovation to keep growth,” Mr. Diop recommended. “Second is to double down on investment in human capital. Third is to bridge the digital divide and invest in adapting and integrating climate change.”

Sustaining efforts

Meanwhile, International Monetary Fund (IMF) Representative to the Philippines Ragnar Gudmundsson echoed the sentiment.

“When considering the global environment, we are seeing currently a global economy that is limping along rather than sprinting. It is in fact slowing down from 3.5% in 2022 to 3% in 2023, and this compared to a growth rate for the world economy that averaged 3.8% during the last two decades, we are clearly seeing a slowdown in the global economy,” he said, addressing the financial stability risks for the Philippines in 2024.

For the Philippines, he pointed out that the government’s infrastructure program, opening up sectors to foreign investments, and private sector participation should help realize a growth potential of about 6.5% over the medium term.

“Boosting the country’s growth potential requires sustained efforts to raise productivity by reducing infrastructure and education gaps while promoting foreign investment,” Mr. Gudmundsson said.

“Sustaining significant growth gains over the past few decades and reaping the benefits of the demographic dividend will depend on further investments to diversify exports, promote the acquisition of new skills, and enhance connectivity across the archipelago,” he said.

According to the IMF, the country should redouble efforts to exit the Financial Action Task Force’s (FATF) “grey list” to further reassure foreign investors and reduce financial transaction risks.

Since June 2021, the Philippines has been included in the global “dirty money” watchdog’s gray list of countries subjected to increased monitoring to prove its progress against money laundering and terrorist financing.

Ultimately, the Philippines must steel itself against disruption to adapt and innovate when the situation calls for it, Miguel G. Belmonte, BusinessWorld president and CEO, said during his opening remarks.

“As we discuss future risks and help one another devise effective strategies for the incoming year, we need strong relationships with all our stakeholders, including customers, suppliers, employees, and regulatory bodies. Nurturing long-term relationships will ensure that our businesses—and our country—remain resilient even in the face of adversity,” he said.

“While the odds may be stacked against us, keeping the economic momentum of the Philippines going requires more than deft hands; it requires us to remain committed to a future of sustainable and inclusive growth that can be enjoyed by all.”

Recalling main takeaways from Forecast 2024 in his closing remarks, BusinessWorld Editor-in-Chief Wilfredo G. Reyes highlighted, among others, the importance of keeping an eye on both short-term and long-terms priorities and of factoring in all possible impacts of solutions to issues.

“Addressing urgent concerns should not make us lose sight of what is important to our companies in the next three to five years,” Mr. Reyes stressed.

“Solutions to problems need to be designed and carried out in a wholistic manner, keeping in mind everything else that can be affected in order to minimize unintended consequences,” he added.

Future trends

In addition to the keynotes on the country’s economic outlook, there were also two panel discussions that looked into the prospects of leading industries, namely real estate and energy. In addition, the first fireside chat walked through the opportunities unfolding in the Philippine stock market.

Two other panel discussions, meanwhile, delved into emerging trends in consumer behavior, as well as the seen shift of corporate leadership and workforces towards younger generations, particularly the millennials and Generation Z. Another trend explored in the forum was generative artificial intelligence, which was tackled in the second fireside chat of the forum.

Top 1000 Premium

The forum also served as the venue for introducing BusinessWorld’s latest offering, the Top 1000 Premium. It is a digital platform (accessed via https://top1000.bworldonline.com) that carries up to ten years of data from the country’s leading corporations, conglomerates, and sectors that were previously published on the annual Top 1000 Corporations in the Philippines magazine.

“With Top 1000 Premium, users are not just confined to the print editions of Top 1000 in looking for figures and comparing them. Users can now view such data with less hassle, in an interactive and visually appealing manner,” Lucien C. Dy Tioco, executive vice-president of BusinessWorld, shared during the second half of the forum.

“The platform does not just show a rundown of top corporations, top conglomerates, and top sectors in a given year. Top 1000 Premium makes it easier to view how a corporation, a conglomerate, or sector has performed in, say, the previous year, alongside how it performed in previous years. It also allows a corporation’s performance to be viewed in comparison with its competitors in its particular industry,” Mr. Dy Tioco explained.

A one-month free trial of Top 1000 Premium is currently offered to those who will reserve a copy of the upcoming 2023 edition of the Top 1000 Corporations in the Philippines magazine.

BusinessWorld Forecast 2024 was presented by AboitizPower Corp. and Megaworld, with gold sponsors ACEN, Ayala Corp., First Gen Corp., GCash, Globe, National Grid Corporation of the Philippines, Prime Infra, and SM Investments Corp. Silver sponsors BDO, Federal Land NRE Global, Inc., Global Dominion Financing Incorporated, and SM Supermalls; as well as bronze sponsors AppleOne Properties, Inc., EastWest Bank, Meralco, PAGCOR, Pag-IBIG Fund, Robinsons Land Corp., SGV, Toyota Motor Philippines, and Villar City, have also made contributions to the event.

Additionally, the event is supported by the following partner organizations: the Asia Society of the Philippines; the Bank Marketing Association of the Philippines; the British Chamber of Commerce of the Philippines; the French Chamber of Commerce and Industry of the Philippines; Fiera de Manila, Inc.; J. Legaspi Computer Graphics; the Management Association of the Philippines; the Nordic Chamber of Commerce of the Philippines; the Philippine Chamber of Commerce and Industry; the Philippine Franchise Association; and the Philippine Retailers Association. Media partners, including The Philippine Star and One News, also covered the event.

2023 has been a progressive year for the Philippine real estate sector, as it started the year on a positive note and has worked its way in sustaining its performance.

As Colliers Philippines Research Director Joey Roi Bondoc previously wrote in a BusinessWorld column, in spite of the challenges in reaching the growth target of more than 6% this year, Philippine real estate is expected to have a “solid finish” towards the end-2023 as opportunities still remain for selected property segment. These include, among others, the expansion of resort or leisure-themed projects in the residential segment; holiday-induced spending in retail; and the potential of the Philippines as a meetings, incentives, conferences & exhibitions (MICE) hub for hotels.

Despite economic headwinds, key drivers such as the return to the office, increased tourism, investment pledges, and steady demand from office and retail spaces, are seen to help in mitigating imminent risks, thus bringing hope for the country’s real estate sector moving forward.

These were discussed in the first panel discussion of BusinessWorld’s Forecast 2024 last Nov. 22 in Grand Hyatt Manila in Bonifacio Global City, Taguig. McKinsey & Company Philippines Managing Partner Jon Canto, Federal Land Inc. President William Thomas F. Mirasol, and Megaworld Corp. Executive Vice-President for Sales and Marketing Noli D. Hernandez shared their outlook for the Philippine real estate market in the upcoming year, including the opportunities and challenges they expect the sector to face.

“The Philippines is optimistic about real estate. It is one of the sectors that will rebound fully next year. It has been resilient in the wake of COVID-19, inflation, and rising construction costs, but sustained demand and investment will take it through next year,” Mr. Canto of McKinsey & Company said during this presentation.

For Mr. Hernandez of Megaworld Corp., while there are risks in inflation, the Philippine real estate sector has been performing exceptionally well. Offices, businesses, and hotels have been increasing significantly, resulting in steady and increasing rental income, occupancy, and room rates.

“For our hotels, office, and businesses, we have also seen a surge of investor confidence and in fact, as far as retention levels of our tenants are concerned, it’s been very steady and increasing. This has contributed substantially to making sure we have a very stable rental income,” Mr. Hernandez said.

“Similarly, for our hotels and resorts business, we are seeing a very huge demand coming from the MICE industry, as well as from foreign tourist arrivals, both foreign and domestic. As a result, we have been seeing not just an increase in occupancy rates but also increase in room rates, especially compared to the previous year,” he added.

Likewise, Mr. Mirasol emphasized how the sector has continuously been creating developments for every Filipino to benefit from. In particular, he spotted residential homes in middle and high-end markets as main drivers of growth for Federal Land.

“We’re doing great. 2019 was our best year ever, and as of end-October, we’ve already exceeded 2019 numbers. We’re very optimistic about the year-end numbers,” Mr. Mirasol said.

“We’re optimistic that this positive side of momentum can carry on to the next year. We see signs of increased consumer confidence and have observed favorable opportunities from the high income and luxury market segments where most of our projects are,” he added.

Returning to office

Among the rising trends highlighted during the discussion was the rise of office spaces. While hybrid work arrangements have changed how people work and live, physical office spaces are found to be more needed among workforces.

According to Mr. Canto of McKinsey, citing their firm’s recent report, people are spending more time in the office, and this is seen to impact real estate in general.

“Globally, we see that people are in the office three and a half days a week. That affects real estate, how we think about offices, and going back to work,” Mr. Canto said.

“Traditional views of the office are now different. Going back to the office, people now want a different kind of space, a place to collaborate, a place where they feel at home,” he added.

Mr. Canto’s presentation cited Cisco’s Global Hybrid Work Study, which showed a significant proportion of respondents globally preferring the hybrid work model. In the Philippines, it was found the study found that 70% of employees surveyed prefer hybrid work, while 20% prefer working fully online and 11% prefer a fully remote mode.

The McKinsey partner also highlighted that, compared to previous years, office spaces are much more considered now as spaces for collaborations, interactions, increased productivity, and fostering social cohesion.

“For Asia, there’s a stronger preference to return to [working on site]; but it will be different. It’s more purposeful collaboration, where you come to work to do certain things that are much effective in person, to drive social cohesion. Think about ideation sessions [and] working with teams — a different type of engagement than it was in the past,” Mr. Canto said.

“Filipinos are much more social. We want to see each other and to interact face-to-face. We also don’t have, let’s say, the technology services sector like in other places in the US and Europe where collaboration online is much more effective. We will need to come back more than them,” he added.

Given these expectations, Mr. Canto notes the importance of enabling younger generations to adjust to the new and evolving office environment in spite of their apparent hesitancy to fully return to office.

“The reality is that in the Philippines over half of companies have returned. Over time, as we get to a steadier state, we would see that there is a key role of physical office space. It’s good to have a different type of office space than you’re used to in the past. People want different things now when they come to the office. They want to ‘want’ to be there in essence. With that, you’ll get millennials and the younger generations to adapt accordingly,” Mr. Canto said.

“In the data that Jon has mentioned, the 20% of people who wants to go back to the office, these are the owners and executives, and the managers who want their staff to be in office all the time. There’s going to be a push and pull, but undoubtedly things are going to leaning more towards going back to the office,” Federal Land’s Mr. Mirasol added.

Moreover, the data also showed that the number of occupancy rates are going down, but it’s still exceeded to go up in the following year.

“Despite the COVID-19 [having] induced the work-from-home arrangements a couple of years back, people would always want to see each other,” Megaworld’s Mr. Hernandez shared.

There’s nothing that can replace the human interaction that makes people a lot more productive and we have been seeing a steady increase of occupancy rates. Our tenant retention levels are at an all-time high and this allowed the necessary rent escalation. So, I’m optimistic that moving forward this is a pattern that we can sustain.” 

Risks in inflation, rising costs

Alongside such opportunities, the panel also cited risks that can hinder the sector’s growth. The risks are led by global inflation, driving the rising costs of materials and mortgage rates, which altogether are seen to make access to emerging markets more challenging.

For Mr. Canto, to address such issues, the country still has room for growth, starting with the lack of retail lending, where banks can play an important role.

Regarding mortgage rates, Mr. Mirasol observed that when interest rates are low, investors do not make as much money in investing; which means there is less demand for currency and the exchange rate also decreases.

“Not every consumer has the ability to pay cash. So, the more the flexible the banks are, the easier the mortgage rates will be, the better the industry will go,” he said.

“Higher interest rates tend to naturally bring down the man. But, on the upside, the economy is growing, and the consumer [can have] confidence in the future,” he added.

In spite of the seen risks, the impact of inflation is also seen as an opportunity that will help the sector to survive and thrive.

“While inflation poses a threat, it can also serve as a boon to the industry because we know that real estate investment still remains to be a very good hedge against inflation,” Mr. Hernandez explained. “On one hand, there is the threat posed by inflation as a deterrent to the impulse to invest. On the other hand, it can be an impulse that will generate more interest in the industry.”

Adding to inflation is the rising cost of materials, which has a direct impact on construction and development. Rising costs of materials, from low-income housing to luxury market segments, eventually lead to extra costs and higher prices for consumers who are buying or investing in real estate properties.

“Fortunately, as a big developer in scale, we can offer very inventive and creative payment schemes,” Mr. Hernandez responded. “And as you spread amortization over a period of time, it becomes more attractive and helpful for consumers who would like to aspire to be a part of the improving environment for community building. That is some way we can mitigate interest rate regime.”

Embracing sustainability

Also emphasized during the discussion was the shift to sustainability among property developers. For instance, since the pandemic, there has been an increase in replacing older buildings with sustainable and energy-efficient ones, as well as mixed-use developments that are transit-oriented and environment-friendly.

Yet, support from the public sector is necessary to supplement efforts in decarbonizing buildings and integrating sustainable practices in property development. 

“[On sustainability,] the major issue is the cost. When a consumer finds out the costs, sometimes [they] get a little pushed back. Now, what can be done is [giving] incentives to the industry for doing more green development,” Mr. Mirasol said. “Leaning towards green is inevitable; we just have to find a way to make it more less expensive.”

Besides incentives, Mr. Canto added, the government can give their support in terms of policies covering the landscape of building infrastructure, communities, and affordable housing.

“These things will make the overall landscape in sustainability more acceptable to a large part of the population,” Mr. Canto said.

Development has many demands, and one of the most pressing is economic growth’s insatiable appetite for energy. While in the past, meeting such demands could be met quite comfortably with fossil fuels like coal and oil, for the modern world the task is not quite as simple.

As the world grapples with the urgent need to combat climate change, for the Philippines in particular as an archipelagic country, transitioning to clean energy sources has emerged as a critical priority. With the increasing global awareness of the environmental impact of fossil fuels, governments, organizations, and individuals are now facing the challenge of shifting towards sustainable alternatives.

But while the benefits of clean energy are undeniable, this path to transition is fraught with hurdles. One of the significant challenges in transitioning to clean energy is the sheer scale of the task.

The existing energy infrastructure built around fossil fuels is deeply entrenched and highly reliant on established technologies, supply chains, and economic models. Replacing this infrastructure with clean energy systems requires substantial investments, technological advancements, and a comprehensive overhaul of the energy sector. Additionally, the intermittency of renewable energy sources, such as solar and wind, poses challenges in terms of reliability and grid integration.

Such points were raised in a panel discussion on the future of Philippine energy at the BusinessWorld Forecast 2024 forum. Anthony Oundjian, managing director and senior partner for Manila at Boston Consulting Group, noted that factors like global inflation, the Ukraine-Russia war, and general supply chain bottlenecks are major factors in the hampered progress towards a cleaner energy grid.

“The crisis, if you want to call it a crisis, is in fact a convergence of a couple of factors that are shaping the energy system. Of course, we aspire to get reliable, clean, and affordable energy. But in each of these dimensions, the last few years have not been quite smooth,” Mr. Oundjian said.

“If we take reliability, we have a dip in production related to COVID (coronavirus disease) like three years ago; and in many dimensions, we are not quite back where we are or quite back to the growth trajectory that we have embraced.”

He mentioned that pressures to enact a clean energy transition are mounting every year, with the materiality of the impact of climate change becoming clearer as time goes on. Some countries went very far from the Philippines in taking measures that are really driving the sector and the adoption on this front.

“Finally, affordability is affected by a set of factors not just by the imbalance between supply and demand that we will expect (but, of course, that is one factor) but also related to inflation in many other sectors. We are at the point where supply is constrained, the climate action has never been so high, and we are facing a pressure on prices. That is our challenge,” he said.

Abotiz Power Corp. (AboitizPower) President and Chief Executive Officer (CEO) Emmanuel V.  Rubio said that there is a need to balance “variable” renewable energy (RE) sources to ensure grid preparedness for its buildout.

“One thing that needs to be discussed in this transition — and there has to be a transition towards green energy — is the variability of renewables. People are talking about the low costs of generation from wind and solar. Sure, of course, the resource is free once you’ve invested on the capacity; but what is not being discussed is the energy needed to balance the variability of solar and wind, to the point that I believe that variable renewable energy has a cap in terms of grid penetration. When it gets to a certain level of capacity in the grid, the grid may not be able to manage it,” he said.

Previously, AboitizPower set its own target net attributable capacity of 9,200 megawatts and a 50:50 balance between its RE and thermal portfolios by the end of the decade.

As of end-2022, renewables accounted for about 22% of the Philippines’ power generation mix. The government wants to increase the share to 35% by 2030 and 50% by 2040.

Mr. Rubio added that the country’s energy transition needs to consider a lot of things.

“It’s easy to actually discuss and simplify things, but it’s not simple. The transition has to be well-managed and well-planned; and every time there’s a discussion on transition to cleaner energy, I think what has to be put into the table is also about climate justice and energy equity,” he said.

John Eric T. Francia, president and CEO of ACEN Corp., pointed out that the country’s current strong growth makes it much more difficult to meet the requisite energy demands from renewables alone. That fact has contributed to a decreased share of renewable energy in the country’s energy grid.

“In 2010, the share of renewables out of the total output was close to 30%. Today, it’s down to 22%. This is ironic because it was in 2008 when the RE Law was passed. But, because of the strong growth of the country over the last decade or so, a lot of the new capacity we have built was from coal plants; and only about 3,000 megawatts was from renewable energy. That’s how the renewable energy mix declined, how we got to where we are today,” Mr. Francia said.

The Philippines would need an additional 18,000 MW of renewables to adjust to the low capacity factor of solar and wind resources, he pointed out.

“We don’t think that geothermal potential in the Philippines would close that gap of 5,000 megawatts of renewables. We believe that a lot of that will be driven by solar and wind, which have low output or low capacity factor,” Mr. Francia added.

“When we now look forward, by 2030 and beyond, the country is growing at 5%-6% per year; and that translates to about 1,000 megawatts of new capacities that we need to build every year,” he said, noting that for the next seven years and beyond the country will need to build around almost 6,000 MW of “clean” capacity, which is to be driven by solar and wind sources.

Currently, ACEN has approximately 4,430 MW of attributable capacity spanning the Philippines, Vietnam, Indonesia, India, and Australia.

ACEN is building solar and wind power projects with a total capacity of 1,100 MW, of which 700 MW is expected to be operational in the next three to six months, Mr. Francia said.

“I think we’re at a pivotal moment. We’ve reached a point where we need to do things differently, and we need to ensure and keep a cycle of investments. For the next five to ten years, we should probably invest more than we’ve invested in the previous decade,” Mr. Oundjian said.

A big part of changes taking place in the economy involves changes in consumer behavior, which organizations and brands adapt to in order to remain relevant and responsive to their markets. One of these recent changes that businesses should not miss is that consumers are now being more empowered by information, tools, technology, and support they need for making their own decisions on what to purchase and consume.

In the third panel discussion of BusinessWorld Forecast 2024 last Nov. 22, themed “Points of Convergence: Meeting Consumers Where They Currently Are,” industry experts and executives from Bain & Company, Global Dominion Financing, Inc., and Globe Telecom discuss how consumer empowerment is driving and can further drive the way companies are reaching their customers.

As one of the fastest-growing economies in the world, Southeast Asia is experiencing fundamental economic and consumer shifts. More particularly, in the Philippines, the shift to higher levels of lifestyle resulted in an increase in consumer spending as well. According to Yukiko Tsukamoto, partner at Bain & Company, citing recent reports from the firm’s end, consumer spending is projected to double by 2030 as 75% of the population shifts to mid-high-income lifestyles.

“As the GDP per capita grows, there will be a rocket effect on the consumption and on things they will spend money on. Even today, we observe this. [Consumer] fitness is close to three times high, consumer electronics are two times high, and you’ll understand that when you become richer. Your base of lifestyle becomes better and you start to look for your health, you start to look for better iPhones. This is why consumers are starting to spend more, and we expect this spend to further increase as the Filipino consumers redefine what is the basic need is. Their basic need is now expanding into more and more categories,” Ms. Tsukamoto explained.

Engaging with Filipino consumers comes in two phases — purchasing and discovery. According to Bain & Company, research revealed that the Philippines is among the highest digital users in the world, and using the digital platform is essential for engaging with Filipino consumers.

“The purchase will happen more and more on e-commerce, they really want to buy online because it’s easier and more convenient, and you can do it anytime you want. The survey also suggests that a lot of people prefer to do it in a marketplace (Lazada, Shoppee, etc.),” Ms. Tsukamoto explained.

Ms. Tsukamoto also noted that the digital space serves as consumers’ channel for discovery. The digital space gives consumers closer access to product and brand information, as well as consumer preference reviews, which not only help consumers in decision making but also has the potential in improving the image of brands.

Bain & Company’s report showed a majority of Filipino consumers are tech-savvy, and they use their phones at least 10 hours a day for emails, phone calls, web browsing, social media, etc. The digital shift, as revealed by these findings, presents an advantage for businesses to enhance consumer interactions and relationships.

Patricia Poco-Palacios, Global Dominion Financing Inc., president & COO, said the need for building online presence while maintaining offline channels has now become a key to sustaining customer relationships in order to address their changing needs and expectations.

Known financial institutions like GDFI have served families and businesses by helping them reach their financial goals. For GDFI, utilizing the digital platform streamlined their operations. For instance, 30% of payments are made through digital banking and mobile wallets, up from previously 7%.   

Similarly, Stella Christine D. Dizon, vice-president for the business-to-business segment at Globe Telecom, stated that the digital shift helped businesses provide a seamless experience and improve consumer relationships.

She shared that GCash, Globe’s payment service and mobile wallet, has proven the upside of going digital as it helped individuals and businesses adapt to new ways of doing financial transactions.

“As we shift online, we also shift how we engage with our customers; and we’ve taken great lengths to bring all of these experiences online. It is our responsibility as well to meet them in the digital world and bring all those experiences within that space,” Ms. Dizon said.

“It is our mantra to help businesses in the Philippines to grow and reach their customers better. What we’ve done and continue to try to do is help our customers in the business realm come closer to their customers as well through their own digital transformation journey,” she added.

Switching choices

While the country’s consumer spending rate is high, Ms. Tsukamoto described Filipino consumers as “not loyal” as they are more likely to switch to consumer goods that they think are more suited to their changing lifestyles.

“If you look at the things they look for, it’s the value of money, price, and quality; and they’re looking for better products. When we looked up [how consumers switch brands], they were switching to an insurgent ground. They were looking for something for me [themselves], something that has an edge; and they’re waiting to change,” Ms. Tsukamoto explained.

“But, it doesn’t mean large consumer products are doomed because a lot of these insurgents are part of their portfolio. It’s more of how you market or position yourself to be able to communicate the value of a specific customer segment.”

The panel noted that as consumer spending and expectations are expected to accelerate, businesses should use data and technology to their advantage.

“Being in the digital space has leveled the playing field for businesses and consumers. They have access to the global market already, and the power is in their hands because they can look at reviews, and compare prices in real-time, and they expect so much more from the businesses they will deal with or the brands they patronize,” Ms. Dizon of Globe said.

Becoming sustainable brands

Aside from digitalization, sustainability has been moving its way towards consumer spending and lifestyles. For consumers, making sustainable choices is crucial in achieving net zero transition.

In the Philippines, many consumers are found to be more than willing to pay for sustainable products but there is still a gap in the market. According to Ms. Dizon, while 80% of consumers are interested in buying sustainable products, only a few actually do so. The success of integrating sustainability into brands depends on their accessibility, availability, and affordability.

“It is on us (companies), to be able to give them those alternatives and options because it needs to be a part or integral part of the business of what we do.” Ms. Dizon said. “At Globe, we’re a very big advocate for sustainability, it’s a very important part of our business.”

“We have to be the ones to deliver on that and we have to become that brand and commit to it as an organization,” she added. “Sustainability should be good for the organization and for the brand image.” 

Sustainability is not only about environmental protection but also about consumer protection, GDFI’s Ms. Palacios added. She noted that sustainability frameworks consist of consumer protection, which is a big concern for the country’s financial sector. Moreover, the need to address financial illiteracy within the Filipino population is seen one of the sustainability goals that the financial sector should endeavor to achieve.

“It is imperative that we have a sustainability framework, and this is the direction we’re going to go and see how sustainability will be embedded in our operations. More than anything, we also feel our products and services are addressing one of the UN Development Goals which is anti-poverty,” she said.

“Aside from board support, internally, our regulators, through the Financial Consumer Protection Act, have been pushing to disclose all the interest rates and for everyone to be treated fairly and equitably,” she added.

The Philippines has become an attractive market for both local and foreign investors, demonstrating resilience in the face of economic obstacles. In 2024, the Philippine stock market is expected to offer a dynamic landscape of opportunities and challenges, which investors and market enthusiasts are eagerly anticipating.

In a fireside chat themed “Dissecting the Stock and Bonds Market Outlook for 2024” during the BusinessWorld Forecast 2024 last Nov. 23, Ramon S. Monzon, president and chief executive officer of the Philippine Stock Exchange (PSE) shared about the performance of the stock market this year and his insights into what lies ahead for 2024.

Mr. Monzon acknowledged that 2023 brought disappointments in terms of the stock market’s performance, particularly in trading volume and the number of companies going public. Several companies that planned to go public in 2023 deferred their initial public offerings (IPOs) due to volatile market conditions.

However, he emphasized that this trend is not unique to the Philippine market but is observed across the Southeast Asian region.

Despite this, Mr. Monzon remains optimistic about the future of the Philippine stock market and highlighted several initiatives to enhance the market’s attractiveness and resilience.

“We at the PSE, we’re always optimists,” he shared. “Our job is to provide products, provide an efficient platform for people to trade and exchange, and harmonize the needs of companies that need to raise capital versus the equally important advocacy of PSE to protect small investors.”

He also acknowledged that while the IPO prices of real estate investment trusts (REITs) have experienced fluctuations, the appeal lies in their attractive yields. Therefore, the declining prices have resulted in higher yields, attracting investors who value steady income.

“In the PSE index, we have nine of these 30 giving dividend yields of more than 10%. I mean, you can’t get that up anywhere. And that’s for the third quarter. We expect the fourth earnings to be even higher,” Mr. Monzon explained.

Making the Philippine market more attractive

The Philippines has been seen as a promising market for local and international investors for quite some time. However, the market has become less attractive due to the recent economic challenges and the impact of the pandemic. As a result, the national government and financial authorities, especially the PSE, are working together to implement measures to make the Philippine market more appealing to local and foreign investors.

According to Mr. Monzon, current retail investors comprise around 19% to 20% of the average trading volume. The PSE president acknowledged the impact of high interest rates on the market. In addition, friction costs, including stock transaction taxes and fixed commission rates, have been a major challenge that puts the Philippines at a disadvantage compared to other markets in the ASEAN.

“In Jan. 2021, at the height of the pandemic, we were hitting about 12 billion in trading volume. The retail investors comprise [52%] of the trading volume,” he said. “So, in short, we know that the retail investors are there. What’s really hurting the market right now, I would say, is the high interest rates.”

“Only in the Philippines do you have a stock transaction tax of 60 basis points, 0.6 of 1%. We have a minimum broker’s commission rate of 0.25. So, if you do a round-trip transaction in the market, you buy, you sell, and you’re down 1.1% right away, 110 basis points. So, if you’re a foreign investor, you’re talking about earning 2%, 3%, or 4% in the market, 1.1 friction cost is very discouraging,” the PSE president added.

In turn, legislative efforts are underway to reduce the stock transaction tax and dividend tax for foreign investors, potentially acting as a significant game-changer.

“[There is] a bill that would reduce a stock transaction tax from 60 basis points to 10 basis points, and reducing the dividend tax for foreign investors from 25% to 10% again, to entice the foreign investors to come back and put our market at a level playing field,” Mr. Monzon noted.

“We’re hoping the Senate can do something about this before they do the recess. If not, it’s going to be in the first quarter, but that’s a very big [deal]. I think that could be a big game changer, the reduction of the friction cost,” he added.

In addition, the resistance level in the market, currently hovering between 62 and 65, was identified as a hurdle. Mr. Monzon emphasized the importance of interest rates in stimulating market activity. For instance, if interest rates go down or the expectation of such a decrease arises, the excess liquidity in savings and time could flow into the market. Conversely, rising interest rates could deter market participation.

Moreover, the PSE president announced their intention to introduce short selling in the Philippine market to attract institutional investors and boost market liquidity.

“We are pushing for the short selling product to entice foreign investors to return to the market because, without the short selling, the Philippine market is just a long market. If there is some bad news in the Philippine economy or even the Asian economy, and investors feel the need to get out of the market, in the Philippine market, they have no choice but to sell,” said Mr. Monzon.

“But with the short selling, they will now have the ability to hedge their portfolio and investments,” he continued. “So, they will not be selling, but they will just be doing some hedging.”

Addressing the issue of listings, Mr. Monzon shared the PSE’s commitment to fostering an environment conducive to the growth of small and medium enterprises (SMEs). Acknowledging the urgency for SMEs to secure funding for expansion, he highlighted the liberalization of listing rules.

According to the PSE president, they have reduced barriers to entry, allowing companies with a two-year operating history and a sales growth of at least 20% to qualify for listing, even without a profit track record.

To further facilitate SME listings, the PSE introduced the Listing Engagement and Assistance Program (LEAP). This initiative provides guidance to companies, particularly those facing challenges in preparing for an IPO.

Furthermore, Mr. Monzon affirmed that these changes were now the new listing rules. The adjustments, initially implemented to mitigate pandemic-induced economic challenges, have proven effective in encouraging more companies, especially SMEs, to consider going public.

In response to the trend of local companies listing abroad, particularly in Singapore, the PSE president emphasized the mutually beneficial nature of dual listings. Notably, companies listed in both the Philippine and foreign markets enhance market liquidity.

“If the DRs (depository receipts) of the local companies trade very well in the foreign markets, they will have to buy the corresponding shares here. So that will increase the liquidity here,” he explained.

On the topic of corporate earnings, Mr. Monzon expressed optimism, citing positive reports from major banks such as BDO, BPI, Metro Bank, China Bank, and PNB. These institutions have reported significant increases in earnings, with some boasting a remarkable 35% increase over the nine-month period.

“When you go to the 12-month, year-end, the earnings are really going to, I guess, go through the roof. If inflation goes down, then, obviously, these companies will have a lower cost of capital and a lower cost of borrowing — they can expand. So, you should expect the earnings to go even higher,” he added.

The PSE president also touched upon the time and effort involved in introducing innovative market mechanisms. For instance, obtaining regulatory approval for short selling took four years. Acknowledging the potential delays in crafting new rules, Mr. Monzon suggested collaborating with regulators by providing existing rules from other exchanges to expedite the approval process.

The conversation also touched on sectors that could drive capital market activity in the coming year. Mr. Monzon hinted at a potential listing of a mining company — an area the Philippine stock market has not explored for a considerable period. He emphasized the need for a new income stream for the Philippines, suggesting that responsible mining should be a valuable contributor.

“Mining does not equal to, I guess, environmental deterioration. There’s such a thing as responsible mining… I think the biggest obstacle for mining companies to operate is not so much the environmental impact but the LGU approval. So, if the national government can help these mining companies overcome the LGU challenges, I think we should be okay there,” said the PSE president.

Digitalization and inclusivity

Mr. Monzon shedding light on the positive impact of digitalizing trading for financial inclusivity.

For instance, fintech app GCash introduced GStock to make online trading services accessible to the public. The PSE has adjusted its board lot to allow retail investors to participate with a minimum investment of 100 pesos. The PSE president has stated that this move reflects a concerted effort to make the stock market more financially inclusive.

“Foreign investors know that institutional investors comprise a bigger share of any market. But when they see that a market has big retail participation, they get encouraged. So, we’re hopeful that we’ll take off.”

Meanwhile, the PSE has indicated a cautious approach to digital currencies, citing recent controversies, including the issue of money laundering by the founder of a crypto exchange giant. Instead, the PSE focuses on expanding the market’s product offerings, such as introducing DRs by next year and aiming for derivative trading by 2025, aligning the PSE with regional counterparts.

In closing, Mr. Monzon encourages investors to consider the historical outperformance of the stock market compared to bank deposits, particularly during times of high-interest rates.

“While the market is at this level, it would be very prudent for investors to start putting some of their funds in the market, and I think next year will be a much better year,” Mr. Monzon said.

The constant pursuit of innovation is a testament to human’s inherent curiosity and creativity. With the advancement of technology, people are constantly seeking innovative solutions to enhance their efficiency and productivity. In this regard, generative artificial intelligence (AI) is one of the most promising technologies, which complements human capabilities, augments creativity, and drives progress in various fields.

In the second fireside chat of BusinessWorld Forecast 2024 entitled “Uncovering the Capabilities of Generative AI,” David Hardoon, chief data and AI officer at Union Bank of the Philippines and chief executive officer of Aboitiz Data Innovation (ADI), delved into the potential impact of generative AI across various industries.

Mr. Hardoon shared that unlike traditional AI technology, the exciting aspect of generative AI lies in its conversational capabilities. This feature allows users to ask questions without worrying about specific syntax as it opens the door to a more personal interaction with the system.

“[Generative AI] is effectively solving the problem of knowledge management,” he explained. “I have tons of files, minutes of meetings, FAQs, and maintenance manuals. ‘What is really relevant to me? What am I looking for? How can I pull that information?’ This is what generative AI is. It’s a layer of knowledge management.”

He also spoke about the reception of technology in the Philippines, noting the country’s history of rapid adoption of technology, such as the widespread adoption of mobile phones and platforms, as well as generative AI.

“There is ultimately an inert adoption for technology and new things in the Philippines. Now, suddenly, it’s the ability to leapfrog a lot of technological incremental steps that may have been needed previously,” Mr. Hardoon said.

Generative AI-powered tools can significantly improve the efficiency of an organization as they act as knowledge management tools to enhance creativity, collaboration, productivity, and decision-making.

When asked about the benefits of this technology, Mr. Hardoon pointed out its potential applications in various industries, such as travel and finance.

For instance, he is developing a “travel buddy” platform that creates personalized itineraries based on user preferences. Another example is how generative AI can assist customers in selecting the most suitable financial products, such as credit cards, by just understanding their lifestyles and needs.

A tool to increase efficiency

Addressing the critical question of whether generative AI will replace millions of jobs, Mr. Hardoon acknowledged concerns about job stability but emphasized pragmatic optimism due to humans’ innate desire for innovation.

“Yes, we should be worried; but at the same time, we shouldn’t,” he stated.

The key, according to Mr. Hardoon, lies in viewing generative AI as a tool to enhance and augment human capabilities rather than a direct threat to employment.

“If someone who comes along is better equipped, skilled, and knowledgeable, that’s how progress happens. That’s actually how we should be thinking about generative AI: How does it help us be more effective in our jobs? How does it help us in terms of identifying what’s relevant? How are we able to leverage our own domain expertise?” he said.

Mr. Hardoon also emphasized the limitations of the technology as it only operates within the boundaries of existing information and lacks the ability for spontaneous creativity, unlike what humans can do.

“Why I say we shouldn’t worry [about generative AI] is because it is a tool that helps us push the boundaries to be even better. But, it is our responsibility to want to be better,” he added.

Responsible adoption, risk management

Handling safety concerns in using generative AI, Mr. Hardoon highlighted a term associated with the technology – hallucination. Drawing an analogy to human conversations, like individuals providing creative responses or admitting ignorance, he said that generative AI operates by making recommendations based only on available information.

While generative AI is designed to provide helpful information, it lacks the discernment of human context, posing challenges in scenarios where harmful intent may be implied. Hence, the inherent risks lie in the potential inaccuracies of the information it utilizes and the predictions it makes.

In response, Mr. Hardoon discussed two key approaches to mitigate these risks. The first one involves curtailing the flexibility of generative AI in specific domains, observed in instances where the technology responds with “I can’t answer” or “I don’t know,” signaling a limitation in its capabilities for certain queries.

The second approach centers on transparency regarding the sources of information used by the AI system. By making the sources explicit, users can better assess the reliability of the responses.

Moreover, Mr. Hardoon acknowledged the difficulty in curbing potential harm from the answers given by the generative AI. He suggested that controlling the sources of information could be a solution. This may involve assessing what kind of information should be made available to the AI system, aligning with a broader consensus on ethical standards.

“[Generative AI] simply takes it as if you just ask, ‘How do I make lemonade?’ So, this is where that difficulty in the risk of how you curtail potential harm. Whereby, yes, you can ask that question, but no, you should not get the answer. [That’s] because we don’t know what you may do with it, and we do not want to have that kind of information and know-how available everywhere,” Mr. Hardoon explained.

Policy and governance

Contrary to the misconception that the government suppresses innovation, Mr. Hardoon spoke about the synergy between innovation and good governance. He highlighted the importance of management in ensuring the quality and reliability of generative AI, asserting that the most exceptional technology is only effective when built upon a foundation of sound governance.

“There’s another layer that I think is critically important, which is trust and governance — understanding the path that you want to take in the context of the Philippines. And that’s the role of the government; that’s the role of a legislator; that’s the role of a regulator. It’s not a matter of right or wrong but a matter of saying that this is where we want to go; this is how we want to go,” Mr. Hardoon explained.

In addition, collaboration between the government and the private sector is crucial to fully enjoy the benefits of technology. Mr. Hardoon suggested the need for a dialogue to promote responsible adoption and encourage shared vision that aligns with the values and needs of society.

Future of AI

Mr. Hardoon also conveyed during the discussion the importance of changing people’s perception toward augmented intelligence to augment human capabilities and unlock the full potential of the technology.

“We need [augmented intelligence] to dream, research, create, and deploy solutions that are designed to augment us. You should not be thinking of it replacing people,” he explained.

His vision also revolved around empowering humans to excel in areas where their unique strengths lie: creativity, innovation, and interpersonal skills.

Consequently, Mr. Hardoon emphasized the inefficiencies of having individuals perform repetitive tasks that could be automated, urging businesses to embrace generative AI for systematic functions while allowing humans to focus on their areas of expertise.

He also stressed the importance of continuous technological advancement and dismissed the idea of halting AI development.

“We are hardwired for change, for innovation… It’s never going to stop. So, what we can do is embrace it with management, with compliance, with governance; but embrace and imagine what’s the next thing that can be done,” Mr. Hardoon said.

Recently, the prevalence of cyberattacks has continued to rise, and it is far from slowing down. It is thus important to strengthen the digital infrastructure of businesses through cybersecurity.

Cyberattacks are malicious attacks to gain unauthorized access to information from a device, system, or computer network. These attacks come in different forms, such as malware, phishing, man-in-the-middle attacks, denial-of-service attacks, and password attacks.

A report published by professional solution services firm PricewaterhouseCoopers (PwC) this year hints that due to the rising cyberattacks, cybersecurity remains as the most important tool businesses can leverage in mitigating the risks in the digital landscape, with 48% of respondents saying they are increasing cybersecurity and data privacy investments.

However, there are many ways for businesses to protect themselves from such attacks, including antivirus software, firewalls, and network security, among others. According to an article by global management consulting firm, McKinsey & Company, cybersecurity is a booming industry, with investments in information security amounting to over $188 million this year.

Through strengthened data privacy and consumer confidence in cybersecurity, businesses see this as an opportunity rather than an obstacle. McKinsey added that companies that build digital trust with digital technologies, data, and artificial intelligence (AI) are the key to meeting consumer expectations, as well as helping businesses grow by 10%.

“A majority of consumers believe that the companies they do business with provide the foundational elements of digital trust, which we define as confidence in an organization to protect consumer data, enact effective cybersecurity, offer trustworthy AI-powered products and services, and provide transparency around AI and data usage,” McKinsey & Company said.

Moreover, a report by professional services firm Deloitte showed that the adoption of new technologies is essential for business management and development. In recent years, newer and more advanced cybersecurity measures have been integrated and prioritized by most companies. Among them are cloud computing, data analytics, and the use of generative AI.

For businesses, cybersecurity strategies have become more important than ever. Deloitte’s report highlighted that looking into cybersecurity also means looking beyond IT in order to understand the strategic importance of cybersecurity and how it affects business strategy.

With this, many companies have partnered with cybersecurity organizations that follow a global, centralized, and consolidated model. In Deloitte’s 2023 Cybersecurity for Financial Services survey, 61% are using the global, centralized, and consolidated model as their cybersecurity operating model.

The global model means that the cybersecurity organization covers all of the companies’ geographic locations. The centralized model, meanwhile, means that one cybersecurity organization serves all business lines, and establishes rules and regulations for businesses to follow. The consolidated model is where the organization looks at everything related to cybersecurity, from the technology to the impact on businesses, risks, and talent.

Deloitte’s research added that as cybersecurity becomes more crucial to companies, they are also paying more attention to how cybersecurity will help in terms of risk management. Today, companies are spending almost as much on cybersecurity as they are on new digital investments because knowing how to handle the risks once it has been identified is also a crucial step in ensuring protection against attacks that can harm businesses in any way.

For big and small businesses, cybersecurity can be their weapon not only in protecting the business but also customers from any harm, regardless of the industry.

“More and more, the perception of cybersecurity as strictly an IT function has changed. It is a strategic part of the daily business of an organization. But to be effective, it has to be driven by senior management. Good governance and leadership at the top of the organization are necessary to establish a corporate culture of cybersecurity and privacy, and protect the firm as well as its customers,” Koen Maris, cybersecurity leader at PwC Luxembourg, said.

“Cybercriminals are species that evolve all the time. Technology is changing all the time. And hackers change with it. Good leadership means never resting on the solutions that keep you protected today, but constantly preparing for what hackers will do tomorrow,” he added. — Angela Kiara S. Brillantes

The initial surge in automotive purchases during the holiday season is frequently attributed to the financial capacity of Filipinos. With Christmas bonuses being distributed, a significant number of individuals enjoy an increase in their disposable income, making it an ideal opportunity to invest in a new vehicle.

Despite the economic challenges the country faces, such as interest rate hikes and slow economic growth, the demand for vehicles has increased remarkably.

According to a report published by the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA), the Philippine new vehicle market rebounded strongly every December of the year.

In 2021, December recorded the highest number of sales since the COVID-19 pandemic started. A total of 27,846 units were sold, slightly increasing the 27,596 units sold in December 2020. The slight increase in the numbers indicated a slow but stable economic recovery and a resurgence in consumer confidence within the market.

Similarly, December recorded the highest monthly performance in 2022, with a total of 37,259 units sold, rising to 33.8% year-on-year. These figures include 28,645 sales of commercial vehicles and 8,614 sales of passenger vehicles.

As the industry navigates through the first seven months of 2023, the upward trajectory in vehicle sales continues, maintaining a double-digit growth rate. Vehicle sales have experienced a 31.1% surge when compared to the same period last year. The sustained increase indicates a growing resilience in the market and a positive response from consumers.

Looking ahead to December 2023, industry experts are anticipating another strong performance that builds on the success of previous years. The positive trend in the first seven months of the year is expected to continue, leading to a strong finish this year.

All these figures indicate that the Philippine automotive industry is continuously growing, with Christmas sales increasing year-on-year.

Strategic timing

Car manufacturers often release new models during the Christmas season to take advantage of increased consumer spending.

In addition, automakers often launch special editions of their popular car models during “-ber months.” These limited-edition vehicles are created to commemorate the holiday season and create a sense of exclusivity. Often, these vehicles feature unique design elements, upgraded features, and even performance enhancements.

Automakers also showcase these special models to attract the attention of consumers, giving them a glimpse of what’s to come in terms of innovation and design in the new year.

The launch of these new cars not only boosts sales but also creates excitement for the upcoming year. The timing enables them to grab the attention of potential buyers looking for a special gift or considering a big purchase as the year approaches.

On the other hand, dealerships strategically sell off their current inventory to make space for the upcoming models slated for the following year. This practice not only helps dealerships keep an updated lineup but also enables them to offer attractive deals to clear out existing stock.

Dealerships often try to attract customers by offering discounts, rebates, and special financing rates. Manufacturers also work with dealerships to provide factory incentives, resulting in additional savings for consumers.

The mutually beneficial arrangement of the strategy helps dealerships clear inventory while also allowing customers to purchase a new vehicle at a significantly reduced cost.

Several dealerships host year-end clearance events and special promotions to increase the excitement. These events attract potential buyers with promises of exclusive discounts and additional perks.

Limited-time offers and bundled packages, such as free maintenance plans or extended warranties, make the deal more enticing for consumers who are considering a purchase.

Exclusive discounts and promotions

The holiday brings more than just gifts and feasts as several dealerships strategically offer special discounts to attract potential buyers.

Car sellers in the Philippines are leveraging the festive spirit to create a sense of urgency and excitement. For instance, car manufacturers take advantage of the opportunity to offer discounts and incentives.

Dealerships provide Christmas coupons and other holiday-themed promotions to make the car-buying experience more appealing to customers. Some may offer free accessories, discounted packages, and aftermarket support to sweeten the deal.

In addition, showrooms undergo festive transformations during the Christmas season, with Christmas trees, twinkling lights, and bows adorning the featured car models. Test drives may also come complete with complimentary seasonal refreshments and sometimes even a surprise gift for those who make a purchase.

Automotive companies are also extending their holiday-themed campaigns to social media, online advertising, and even virtual showrooms. Interactive online experiences, virtual test drives, and personalized holiday messages from dealerships contribute to a comprehensive and engaging online presence.

Family-centric holiday

Filipinos are known for their strong family-centric culture, and this is especially evident during the Christmas season. Since extended families frequently live in various parts of the city or even across islands, the challenge of gathering together becomes a logistical obstacle. Hence, family transportation is considered important by many.

In a study published in Applied Energy journal in 2020, private vehicles were responsible for 71.3% of vehicle trips in Metro Manila, highlighting the significance of personal transportation for families in urban settings.

Understanding the importance of Christmas and family-centric activities for Filipinos, automotive dealerships focus on providing vehicles that cater to the needs of families, such as spacious and comfortable cars, vehicles with advanced safety features, and those suitable for long drives and family outings.

Family-friendly deals are common, such as discounts on larger vehicles or bundled accessories that cater to the needs of those with children. The idea is to position the purchase of a new vehicle as a family-oriented decision, aligning with the values of the season.

Family transportation goes beyond just logistics as it symbolizes the dedication to keeping strong family bonds and the realization that the true essence of Christmas lies in the company of loved ones. — Mhicole A. Moral

Instead of opting for generic presents, consider personalized items, tech gadgets, or even subscription services that cater to their love for all things automotive. Whether it’s for a classic car collector or a modern-day driver, there’s a perfect gift waiting to rev up their holiday spirit. We have prepared some suggestions below.

For the practical, reliable designated driver

This one’s for that friend in the group that is the designated driver every outing, or the often-unsung hero of every family trip. This holiday season offers a chance to show your appreciation for all the times that they came in clutch with their dependability. And what better way to do that than by giving them something practical and has an everyday use?

Practicality can be found in a range of useful car accessories. Consider items such as high-quality car covers, precision tire pressure gauges, or innovative storage solutions that cater to their on-the-go lifestyle.

From trunk organizers to versatile car chargers, these accessories not only enhance the driving experience but also add a touch of convenience to their daily routines.

For those who appreciate the finer details, or simply those drivers who value comfort and quality of life, why not splurge on some luxury car care products and detailing kits for some elegant and thoughtful gifts?

Anyone who takes good care of their cars would delight at some premium microfiber towels, top-tier detailing sprays, or professional-grade car wax. These gifts not only showcase your thoughtful consideration but also help them maintain their beloved vehicles in pristine condition.

For the highly personalized custom car enthusiast

For many people, their cars are an extension of themselves. They load it up with stickers to show their personality, pillows and adornments from the shows and movies they love, and even get custom decals to show off their passions even while on the road.

For such people, nothing captures the essence of thoughtful gift-giving quite like personalized items. How about considering custom license plate frames, engraved keychains, or bespoke car mats that proudly display their unique style and personality? If both of you are fans of movies, shows, or games, you can get them figures or merchandise that would be a joy to look at while stuck in traffic.

For the tech-savvy motorhead

There are also many people today who view cars as the pinnacle of human technology, with good reason. Cars have exemplified many of humanity’s biggest breakthroughs. Just take a look at the latest concept cars making headlines: self-driving vehicles powered by artificial intelligence, running on renewable electricity, and equipped with smart technology connected to the Internet of Things.

If you know someone like this, you probably don’t need to get them any of that as a Christmas gift, nor do they expect you to. Consider instead gifting them clever and innovative gadgets that enhance their driving experience and make them feel as if they are on the cutting edge of tech.

How about upgrading their vehicles with a high-quality dash cam, wireless charging pads, or a Bluetooth stereo? Even advanced GPS navigation systems and smart car adapters that provide real-time diagnostics are out there for those willing to shell out the cash.

For the careful chauffeur or the haste driver

On the road, safety should always come first. But for better or worse, some people value it more than others. These gift ideas are suited to both types of people.

Consider safety and emergency preparedness essentials that provide peace of mind on the road. These can be anything from premium roadside assistance kits to advanced emergency car escape tools. How about investing in high-quality vehicle emergency kits, compact first aid supplies, or multi-functional survival gear? Tire pumps, car jacks, or even car maintenance tools would be great to ensure peace of mind every trip, for you and for them.

Gift-giving does not have to break the bank, nonetheless. There are many budget-friendly options such as car-themed apparel, novelty car air fresheners, or DIY car care recipe books that offer creative and affordable ways to enhance the driving experience of those you care about.

Maybe look into affordable car accessories, such as stylish key fobs, decorative car decals, or practical car organization solutions that add a touch of personality to your loved ones’ vehicle without exceeding your budget. — Bjorn Biel M. Beltran

By Chelsey Keith P. Ignacio, Special Features and Content Senior Writer

As urban spaces and population expand, there is a rising need for solutions to address existing challenges with urbanization and to prevent more issues to come along the establishment of cities. And nowadays, advancements in technology are being utilized or integrated into developing existing and upcoming cities to address such issues and transform these urban areas into smart cities.

But smart city development would also stipulate for comprehensive planning to ensure that its innovative solutions do address the issues and enable better urban life. From minding the city’s energy source, sustainability of homes, to inclusivity in transport, drafting “A Blueprint for Philippine Smart Cities” was discussed by experts and leaders from relevant industries during the business forum organized by BusinessWorld and The Freeman last Nov. 10 at Belmont Hotel Mactan in Cebu.

“We all know how a lack of comprehensive urban planning can negatively affect our lives and the environment we live in. In drafting a blueprint for smart cities in the Philippines…we hope to explore opportunities, innovations, and developments that will positively impact our lives and the world we live in,” BusinessWorld and The Freeman President and Chief Executive Officer (CEO) Miguel G. Belmonte said in his welcome remarks.

Opportunities are seen to be found in smart cities, particularly in benefiting people’s lives and the economy.

“When we talk about technologies, we actually have a lot,” Department of Human Settlements and Urban Development (DHSUD) Secretary Jose Rizalino L. Acuzar said. “When brought together, there is a potential of making life more comfortable than ever and sustainable for future generations.”

“For me, that’s the essence of developing smart cities, to bring forward the vision of improving quality of life,” he continued with his keynote on “The Prospect of Smart Cities: From A Real Estate Perspective.”

However, citing The Economist Impact’s Digital Cities Index, Mr. Acuzar pointed out that the Philippines, as a developing country, is lagging behind. Manila placed last in the index, scoring 39.1, which is below the global average of 63.3 and Asia-Pacific’s average score of 59.4. The index looked at 30 cities across the world.

Mr. Acuzar nonetheless shared initiatives planned to develop more homes under the Pambansang Pabahay Para sa Pilipino program, which he said was not only building houses but also targeting township development encompassing amenities, services for housing communities, livelihood, and digital connectivity. It also seeks to develop megacities that will generate opportunities for economic growth.

Among the other prospect developments he mentioned was the transit-oriented North-South Development Project. Yet, he noted the need for investment and an active policy environment from both government and business sides.

“We are literally drawing smart cities on a laid canvass. With holistic point of view, we are taking one step at a time, but also minding all angles to connect the dots toward our vision of genuine urban development,” Mr. Acuzar said.

Meanwhile, aside from improving quality of life, smart cities are also seen to support economic competitiveness.

“Technology is transforming the way our cities work in Southeast Asia. This presents a unique opportunity for countries like us to embrace smart city solutions that can boost economic competitiveness and improve our overall quality of life,” Cyel Auza, vice-president for Cebu Operations at Aboitiz InfraCapital Economic Estates, said in her keynote on “Economic Opportunities from Smart Cities.”

Ms. Auza perceived the capabilities of technologies in smart city solutions to forecast and address risks and uncertainties caused by climate change and cyber threats. Developing smart cities also involves infrastructure and services in the urban space to deal with environmental and social issues.

“The ultimate goal is to find a balance between economic growth, protecting the environment, and enhancing the well-being of our citizens, ensuring a prosperous and harmonious future for our communities,” she said.

As cities seek to become smart, the development would not only hinge on the local government. Kellie Ko, president of the Mandaue Chamber of Commerce and Industry, further underscored the importance of collaborating with the government in developing smart cities during the forum’s first panel discussion themed “The Circuitry of Cities: Innovations powering smart city development”.

“It’s a two-way thing now. A city has to do their part,” Mr. Ko said.

“We don’t wait for the city government to make our city smart. We have to work with with the government to achieve it,” he added.

Mr. Ko also highlighted the value of pursuing smart city development moving forward in terms of competitiveness and livability.

“From the general public and economic perspective, the strive toward smart and resilient cities is really worthwhile. It’s a necessity [that] if we do not do it, we will be uncompetitive and cities will be unlivable. So definitely, that is the future we should strive for,” he said.

Core components

When talking about smart cities, it does not solely revolve around being innovative. Sustainability also makes certain to be embedded in various areas, among which is in property developments in the city.

In the real estate sector, Maricris Sarino-Joson, director and head of Office Services – Landlord Representation at Colliers International, gave several recommendations to incorporate diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) standards.

“These are very important components if you’re building a community,” she said.

Ms. Sarino-Joson presented property market updates centered on the office sector in starting off the forum’s first panel discussion.

For DEI, some of Ms. Sarino-Joson’s recommendations included, among others, collaborating with locally-based suppliers to reduce carbon footprint; supporting local communities; acknowledging the impact of establishments or institutions on the lower-income group, indigenous people, and people of color; and making adjustments contingent to how these groups are affected.

Meanwhile, some recommended pursuits for ESG involved bringing in sustainable alternatives for a company’s resources, investing in sustainable and higher quality materials; and having green lease in companies, among others.

Broadly looking into masterplanned communities, Joey Bondoc, head of Research Team – Manila at Colliers International, also mentioned that developers should integrate green sustainable features in these projects. At the same time, they should consider leveraging technology advancements, such as the Internet of Things.

“Overall, Internet of Things and other advanced advancements in technology, it’s really important that you integrate these features into the new property department,” Mr. Bondoc said.

“Internet of Things will really play a role in advancing the technologies and the features of these masterplanned communities,” he added.

Powering the city

As urban areas are transformed to function with digital technologies, energy is a necessity to power these smart cities.

“Cities are not only centers of culture, education, and economic activity, but also centers for energy,” Anton Perdices, chief operating officer at Aboitiz Power Corp. Distribution Group, said during the first panel discussion.

“In fact, cities account as much as 80% of world global energy consumption. This underscores the critical importance of energy security and maintaining residents’ quality of life and attracting investments — both key elements in fostering smart city growth,” he continued.

Mr. Perdices also considered that energy democratization and electrification of the economy would be vital for cities’ future, especially with the anticipated rise of electric vehicles, smarter city grids, digital substations, digitalization through smart meters, and net metering.

“To make these aspirations a reality, a well-planned transition in the city’s energy system is essential. This transition demands cross-border collaboration and learning from successful cities that have walked this path before,” he said.

As smart cities ensure the availability of their energy sources, considering renewables would also further sustainability.

“One way to support or help achieve the smart city goal to reduce carbon emissions, the people of the smart cities or the businesses can choose clean and renewable energy resources,” said Arlene Sy Soriano, assistant vice-president of First Gen Corp.

Ms. Soriano mentioned the Retail Competition and Open Access (RCOA) and Green Energy Option Program (GEOP), which enable qualified end-users to select an electricity supplier according to their preference.

“Again, if they want to help push decarbonization within the cities, hopefully, they can also choose clean and renewable energy sources. So aggregation, for example, include condominium buildings, business districts, malls, multi-purpose business complex, as well as economic zones,” she said.

And in furthering the power sector, working with the government is crucial as well.

“It is essential to emphasize the importance of active participation and collaboration between distribution units, governments, and the private sector in realizing the vision of smart cities. Each and every one of us can’t do it alone; we really need to work together,” said AboitizPower’s Mr. Perdices, who also highlighted that individuals in the city have to do their part as well.

Building smart homes

Smart cities also serve as  home to citizens. And their housing could also keep pace with the innovative and sustainable developments in their cities, from the construction materials, design, and things that make up the homes in a city.

“Having sustainable material and design is very much part of a smart city,” said Jennifer H. Latoga, general manager at AAC Lightweight Block Corp., during the panel discussion on “Home in the Smart City: Building Sustainable and Green Communities.”

Smart homes, for Ms. Latoga, start with green materials.

Environmental consciousness among consumers has also risen during the pandemic, thus considering the environmental impact of products they purchase for their homes, according to Rosemarie B. Ong, senior executive vice-president and chief operating officer of Wilcon Depot, Inc.

“We believe that technology and automation hold a significant role in improving the lives of everyone. And we believe also that having sustainable products available can help improve the quality of life,” said Ms. Ong.

Accessibility is also important for smart homes, for Ms. Ong. As such homes are all about controlling and powered by the Internet.

And with smart and sustainable objects being placed in their houses, smart homes are supposed to improve the lives of people residing there. “Having a smart home is not just to live there, but you have to enjoy [living there] as well,” Ms. Ong said.

Some of the benefits she also saw for residents in smart homes include enhancing their convenience, energy efficiency, and security.

“Let’s all be smart in our choices and practices so that we can create smart communities and smart homes,” Ms. Ong reminded.

Focusing on home design, Stephen Rhey Ralota, director and project manager at the Cebu Office of Palafox Architecture Group, Inc. addressed the issue of merely copying designs from the Internet or magazines without considering the climate of the area.

“Sometimes, they just tend to copy and then the topography of the property is not applicable. So that’s where the connection comes in,” he added.

Smart cities, as further elaborated by Mr. Ralota, are “meant to permit citizens who make important choices to their environment in order to make everyday life more efficient and less stressful.” He presented the components of smart cities, which involve smart governance, economy, living, people, mobility, environment, and connectivity.

While Mr. Ralota acknowledged the “smart move” of Cebu with the bus rapid transit system, he looked to the digitalization of traffic management in the place.

Mobility in smart city

In supporting citizens to move around smart cities, mobility would also need to be sustainable and inclusive.

One of the ways to make transport sustainable is electrification. “We believe electrification is the future of transportation,” said Neil Stephen Lopez, assistant executive director at the Electric Vehicles Association of the Philippines, in the panel discussion on “Advancing Smart and Inclusive Mobility in the City.”

At the same time, Mr. Lopez noted the importance of transport accessibility in underserved areas.

“If we will be developing smart cities, one of the opportunities is to improve the accessibility of transport to underserved areas,” he said.

“Mobility is not a luxury; it’s a basic need. With the advent of technology, I hope we get to improve accessibility, make transportation affordable, make electric vehicles cheaper, and give good quality public transportation,” he added.

Meanwhile, Benedict L. Camara, director and founder of the National Bicycle Organization, further promoted active mobility, particularly the use of bicycles as transport.

“[I’m] hoping the government will make more policies to promote or support [active mobility], he said. “It starts with a simple policy. It doesn’t have to be big, but from there it can branch out.”

Mr. Camara further promoted active mobility by recommending businesses set up private bike shares and bike parking.

Ride sharing is also highlighted by Ma. Cristina Fe N. Arevalo, CEO of Toyota Mobility Solutions Philippines, Inc.

“[A] ride doesn’t have to be exclusive, it can be shared. But we have to address the safety and security issues,” she said. “And that will, I think, contribute to having a smart city and achieve more carbon neutrality and a sustainable society.”

“A Blueprint for Philippine Smart Cities” was presented by BusinessWorld Publishing Corp. and The Freeman, in partnership with AboitizPower and Wilcon Depot; with the support of GCash, Energy Development Corp., Aboitiz InfraCapital Economic Estates, CCLEX Corp., and Primeworld Land Holdings, Inc.; and was sponsored by AppleOne Properties, Inc.; Meralco PowerGen Corp., Global Business Power Corp., Primary Homes Inc., Sto. Niño Mactan College School of Law, SM Supermalls, and Visayan Electric Company; with media partner The Philippine STAR.

A Swedish proverb states, “Rough waters are truer tests of leadership. In calm water, every ship has a good captain.”

True enough, in times such as the present where the business landscape shifts like the changing tides, the value of true leadership becomes clear to all. Coming from the COVID-19 pandemic, everyone in the world has had to adjust in some way, whether it is working from home or taking classes online.

Such unexpected alterations to our way of life have had an impact on our principles and values. There has never been a more important time to consider what it means to be a leader and an aid to others than now.

This is the driving purpose of the Asia CEO Awards, held last Oct. 24 at the Manila Marriott Grand Ballroom in Pasay City. Each of the 15 categories in the awards ceremony hails notable organizations and leaders that have made important contributions to their industries and the country’s development. These organizations and leaders are selected to be part of Asia CEO’s distinguished Circle of Excellence in their respective categories. One of these Circle of Excellence awardees was hailed as the grand winner during the awarding ceremony.

The categories cover a wide range of categories and spans many different industries, recognizing the best companies in terms of innovation, sustainability, service excellence, corporate social responsibility, employment, and many more.

The Asia CEO Awards attempts to give answers to questions that are certain on every business leaders’ mind: In the wake of hurdles like the pandemic, the emergence of disruptive technologies like artificial intelligence, and socioeconomic challenges, what does it take to lead effectively in the new world? What qualities are necessary to thrive in the face of such daunting global and social challenges as climate change, the annihilation of our natural environment, and pervasive inequality?

When asked these questions, Asia CEO Awards Woman Leader of the Year Haidee Enriquez, the chief executive of business process outsourcing companies MicroSourcing and Beepo, responded with her own guideline for leadership: the acronym D.A.R.E.

“D stands for Dream. A stands for Act. R stands for Renew or Reinvent, and then E stands for Enjoy,” she said in an interview with BusinessWorld.

In the face of difficult challenges, Ms. Enriquez pointed out that a leader, first and foremost, should be the person in charge of creating a vision for a company to rally towards.

“The second one is act. Of course, we can dream all we want. But if we’re not willing to put in the action that’s necessary to be closer and closer to the realization of that dream then it’s just pointless, right?” she said, adding that it is essential for leaders to be the central role models for such actions to take place.

“Team members who have worked with me, including those who are in MicroSourcing, would often describe me as mangbubudol,” she shared with a laugh.

“According to them, I have a unique ability to make people do things that otherwise they would not have done or would not have even thought possible. I’d like to believe that it probably had something to do with the fact that they see me do it first. That they know and they see that I would not ask them to do something that I myself would not do. And because of that, it either inspires them or forces them to at least try.”

Ms. Enriquez admitted that she would not have gotten as far as she has in her field if not for her tenacity in reinventing and renewing her principles with regards to her work. She shared that she constantly had to ask more experienced members of the management team questions about how things were done in order for her to understand the landscape she was operating in.

Under her leadership, MicroSourcing and Beepo’s expansion pivoted to regions outside of Metro Manila, and have grown from 3,500 professionals to more than 8,000 in almost three years. More than half, or about 54% of them are now located in provincial locations. In addition, the companies’ Balik Eskwela program has benefitted more than 7,400 learners from far-flung public elementary schools across the country since their launch.

As one of 15 award categories, the Woman Leader of the Year prize recognizes the successful careers of Filipino women who have contributed to the country’s economy and social status. Ms. Enriquez, as one of the awardees, also paid tribute to other women leaders.

“While it is a great recognition, at the end of the day, what is more important is not what the public thinks of me. What is more important to me is what the people who really work with me on a day-to-day basis, what they think of me and what I think of myself in relation to the standards that I have set for myself,” she said.

For women and any individuals looking to follow in her footsteps, Ms. Enriquez also had some advice.

“I wouldn’t exactly want to inspire everyone or every woman out there to follow in my footsteps because I am a product of the unique circumstances of my life. But what I would like to dare them to do is to define success in their own terms, and to be the best version they could ever be of themselves.”

Ms. Enriquez said that one of the biggest fallacies and myths women believe is that they can only be successful if they have a great career, or if they are a C-level executive, or if they are earning a certain amount of money. While that may be true for some people, that is not necessarily true for all.

“A mother who has raised very successful children, while being a housewife all her life, I think, is a very successful woman in her own right and a very successful leader in her own right. Every individual I would dare, especially women, to really think through and discern: How do I define success in my case? Define what success looks like for you, and aim for that. Work for that. Dare to be that.”

Businesses and executives in the country who have shown significant accomplishments in particular areas were once again recognized in this year’s Asia CEO Awards with Title Sponsor Globe Telecom.

Over 700 nominations were received in the awards for 2023, the largest in its 14-year history. Its Circle of Excellence awardees and the grand winners for the year were celebrated last Oct. 24 at the Manila Marriott Grand Ballroom in Pasay City.

“When we first started doing this event 14 years ago, we had a hard time getting quality companies to really show themselves. Now, there’s more of the diversity and quality,” Asia CEO Awards Chairman Richard Mills said.

In each of the 15 categories, notable organizations and leaders that made important contributions to their industries and the country’s development were selected to be part of the Circle of Excellence. One of these Circle of Excellence awardees was hailed as the grand winner in their respective category during the awarding ceremony.

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Asia CEO Awards also recognized Lifetime Contributor Awardees in the public and private sector, which were given to Former Ombudsman Conchita Carpio Morales and Alliance Global Group Chairman and Founder Andrew Tan, respectively, for 2023.

Foreign leaders who have attained success while running companies in the Philippines were honored in the Circle of Excellence for Expatriate Executive of the Year. This year, the recognition was bestowed on Wipro Philippines Country Head Aseem Roy. Executives who were part of the said award’s Circle of Excellence were Amit Jagga, SVP and country leader of Concentrix Philippines; Eng Teng Wong, president and CEO of Pru Life UK; Kais Marzouki, chairman and CEO of Nestlé Philippines; Praveer Chadha, SVP for Customer at Datamatics; Sanjiv Gupta, president and country head of IBM Solutions Delivery; Shiju Varghese, country head of Tata Consultancy Services; and Sudhir Agarwal, founder and CEO of Everise.

Young Leader of the Year for 2023 was given to Walther Buenavista, president and CEO of Shawarma Shack Group. Other young leaders who were recognized in the Circle of Excellence were Eric Darryl Lim, executive vice-president of Autokid Subic; James Lacsamana, head of IT at Eastvantage; Joshua Palisoc, COO of Ask Lex PH Academy; Mark Alvarez, managing partner for Southeast Asia at Human8; Ralph Ray Chua, chairman and president of Immuni Global; Rolan Marco Garcia, CEO and managing partner at Embiggen Group; and Sean Gabriel Villoria, CEO of GerWeiss Motors.

Asia CEO Awards’ Technology Company of the Year was EdukSine Production Corp., who bested other thriving technology companies in the Circle of Excellence, which included Ask Lex PH Academy; Dyson Electronics Pte. Ltd. Philippine Branch; GoTyme Bank; PCCW Solutions, Philippines, Inc.; Pili Seal; and Tata Consultancy Services (Philippines), Inc.

An organization with notable success in minding workplace health was awarded the Wellness Company of the Year, which went to Seda Hotels this year. Companies in the Circle of Excellence of this award were CBRE; Diageo APAC SSC Ltd, Inc.; Dyson Electronics Pte. Ltd. Philippine Branch; Hewlett Packard Enterprise; Infosys BPM Philippines; Manulife Business Processing Services; TDCX (PH), Inc.; Teleperformance Philippines; and VXI Global Holdings B.V. (Philippines).

Meanwhile, Nestlé Philippines, Inc. was recognized as the Diversity Company of the Year, winning over among the Circle of Excellence awardees, which included Aboitiz Land, Inc.; Foundever Philippines Corp.; Genpact Services LLC Philippines Branch; Hewlett Packard Enterprise; HSBC GSC Philippines; loveyourself, inc.; Manulife Business Processing Services; Northern Operating Services Asia, Inc.; Shell Companies in the Philippines; Teleperformance Philippines; TTEC; and Ubisoft Philippines.

Successful small and medium-sized enterprises (SMEs) were also celebrated by the Asia CEO Awards. The SME Company of the Year was conferred to Immuni Global. Autokid Subic Trading Corp.; DynaQuest Technology Services, Inc.; eBIZolution, Inc.; Embiggen Group; Hytex Power, Inc.; Motovita; Ova Virtual; PSO (Manila) Limited Philippine Branch Office; and What’s your FLAN International Group of Franchise Companies were the SMEs who make up the Circle of Excellence.

Winning the Service Excellence Company of the Year was Asian Hospital and Medical Center. Other organizations that demonstrated service excellence and belonged to this year’s Circle of Excellence were Amaia Land Corp.; CGI Philippines, Inc.; Eastvantage Business Solutions, Inc.; GoTyme Bank; ING Hubs Philippines; the Public Attorney’s Office; Sprout Solutions; Sutherland Global Services; Theos Cybers Solutions; Tech Mahindra Limited; and Unified Internship Program.

Organizations that have developed “a meaningful innovation” are recognized in the Circle of Excellence for Most Innovative Company of the Year, with Maya being hailed as the grand winner. Among the companies in the Circle of Excellence were ALLCARE Technologies Philippines, Inc.; CGI Philippines, Inc.; Converge ICT Solutions, Inc.; Embiggen Group; GoTyme Bank; Maybank Philippines; MDI Novare; Ramco Systems; Traxion Tech; VXI Global Holdings B.V. (Philippines); and Western Digital Storage Technologies (Philippines) Corp.

Filipino women leaders in the private sector and the government were also honored by the Asia CEO Awards with the recognition of Woman Leader of the Year. The award went to Microsourcing and Beepo CEO Haidee Enriquez. Notable women leaders in the Circle of Excellence were Abigail Del Rosario, country director of Maybank; Annalyn Cuisia, CEO and founder of Traxion Tech; Cosette Canilao, president and CEO of Aboitiz InfraCapital; Divine Gomez, partner – BPO, Talent at IBM Business Services; Grace Vera Cruz, country head of Grab Philippines; Lotis Ramin, country president of AstraZeneca; Ma. Rhodora Campos, country head of Infosys BPM; Marilene Acosta, CEO of Pag-IBIG Fund; Nerissa Gerial, deputy executive director at NKTI; Rosemarie Rafael, chairperson and CEO of Airspeed Group; and Tonichi Parekh, vice-president at Concentrix.

In the area of sustainability, Robinsons Land Corp.’s Commercial Centers Division (Robinsons Malls) won as the Sustainability Company of the Year. Organizations that are also recognized for their sustainability commitment were Aboitiz InfraCapital; Alaska Milk Corp.; Bank of the Philippine Islands; Concentrix Philippines; DynaQuest Technology Services, Inc.; Filinvest REIT Corp.; Foundever Philippines Corp.; Land Bank of the Philippines; Lexmark Research and Development Corp.; Nestlé Philippines, Inc.; and the Securities and Exchange Commission Philippines.

Entrepreneurs who have successfully grown their businesses from scratch were also recognized, with Sante International CEO Jesus Joey Marcelo winning the honor of Entrepreneur of the Year. The award’s Circle of Excellence included Charlotte Reyes, founder and president of OVA Virtual; Chet Pastrana, president and CEO of APFC; Francisco Magsaysay, founder of Carmen’s Best; Joash Tubaga, owner founder of FIXMYMAC I.T.; Maria Angeline Fon, founder of Thinkstitute PHL; Mharicar Castillo-Reyes, president and CEO of Asticom Group; Regieno Valencia, owner of Interior Construction; Rolan Marco Garcia, CEO and managing partner at Embiggen Group; Rommel Carlos, CEO of Nokarin & Arcus; and Victor Lim, co-founder and CEO of Kraver’s.

Asia CEO Awards also celebrated Filipino business leaders who have shown success within or beyond the country. Infosys BPM Philippines Country Head Ma. Rhodora Campos was awarded as the Global Filipino Executive of the Year, winning over other leaders in the award’s Circle of Excellence, including Dante Abando, president of Makati Development Corp.; Eppie Titong III, SVP and country manager at VXI Global; Jennire Torres, CEO of Atos; Atty. Jose Martin Loon, president and CEO of Cocolife; Lito Villanueva, EVP and CIIO at RCBC; and Raymund Berja, chief financial officer at AirAsia Philippines.

Meanwhile, the Executive Leadership Team of the Year was given to companies with successful executive management. IBM in the Philippines Consulting Client Innovation Center won the recognition, while the other organizations in the Circle of Excellence were Airspeed Group of Companies; Datamatics Global Services Corp.; Eastvantage Business Solutions, Inc.; Filinvest Land., Inc.; Maya; Northern Operating Services Asia, Inc.; Sante International, Sprout Solutions; and VXI Global Holdings B.V. (Philippines).

Organizations notably demonstrating their corporate social responsibility (CSR) became part of the Circle of Excellence for CSR Company of the Year, with Maybank Philippines being the grand winner while the other recognized organizations were DynaQuest Technology Services, Inc.; EXL Service Philippines, Inc.; Gardenia Bakeries (Philippines), Inc.; Genpact Services LLC Philippines Branch; HSBC Global Service Centre Philippines; Innodata Knowledge Services, Inc.; KMC Solutions; Manila Water Foundation; Nezda Technologies, Inc.; OpenText (Philippines), Inc.; Personal Collection; Procter & Gamble Philippines; TDCX (PH), Inc.; and Wipro Philippines, Inc.

Companies are also honored as employers in the Asia CEO Awards. Concentrix Philippines won as the Top Employer of the Year. Employers in the Circle of Excellence were [24]7.ai Philippines; United Coconut Planters Life Assurance Corp.; Gardenia Bakeries (Philippines), Inc.; Hewlett Packard Enterprise; HSBC Global Service Centre Philippines; IBM in the Philippines; PepsiCo, Inc. Philippine Branch; Shopping Center Management Corp.; Tech Mahindra Limited; Teleperformance Philippines; TTEC; and Wipro Philippines, Inc.

Grand winners and Circle of Excellence awardees in this year’s Asia CEO Awards were also acknowledged and reminded on their role for economic growth.

“All the industries that each of you represent tonight are builders of economic progress. You are all stakeholders standing behind the industries that are boosters of economic engine. Each one of you has a stake in this; each one of you is invested in this. I’d like every one of you to remember that,” said Oscar Sañez, founding CEO of what is now IT & Business Process Association of the Philippines (IBPAP) and an emeritus judge at Asia CEO Awards, in his keynote during the event. “Your leadership expertise is being recognized for your contribution to building this economy.”

“All of you in the Circle of Excellence, as soon as you walk up the stage to receive your trophies, are committing to this mission to invest your talent in boosting this engine of economic growth. This is the only way we can prove that this program has stayed true to its mission,” he continued.

Real estate is seen as one of the major drivers of the Philippine economy. Global data and business intelligence platform Statista bases this on the gross value added generated by the industry, which amounted to P536 billion from 2020 to 2022. Such share can be sustained, or even boosted, as big opportunities are seen for the industry this year.

As global management consulting firm McKinsey & Company shared on its website last March, “real estate is likely to experience continued recovery which is supported by emerging industries and easing restrictions.”

This development is set on a background where the Philippine economy grew by 4.3% in the second quarter (Q2) of 2023, continuously being one of the countries with the fastest gross domestic product growth rates in Southeast Asia.

According to diversified professional services and investment management company Colliers, in Q2 real estate is experiencing decelerating inflation, as well as the increase of development of office spaces (18.4%) and residential rentals, which are key factors for economic growth. With this, vacancy is expected to decline from 17.6% to 17% during the last quarter of the year, positively impacting residential rents and prices.

Similarly, Ayala Land, Inc. (ALI) sees the growth of the country’s real estate market to continue throughout this year. The developer sees that although the pace of growth may vary, the outlook remains positive given factors such as low interest rates, government infrastructure projects, and increased consumer confidence.

ALI also sees a variety of trends and opportunities in the current real estate investment environment.

“The rise of remote/online work and flexible office spaces has created a demand for residential developments that cater to work-from-home setups,” ALI shared in an email to BusinessWorld. “The growth of e-commerce has also led to increased demand for logistics and warehousing facilities. Additionally, sustainable and eco-friendly developments are gaining popularity among investors and consumers.”

Residential

Looking deeper into property segments, the residential segment is anticipated to remain buoyant, with the middle-income segment driving demand for affordable housing.

Such improvement can be seen in increased demand, as shown by figures from Colliers, which Global Property Guide cited in their recent analysis of the country’s residential real estate market. The data shows that 20,000 units were sold in 2022, a 54% increase from the previous year. In the first half of 2023, the high demand for outsourcing firms, consular offices, and multilateral lending firms from foreign investors has resulted in an increased use of offices, thus, positively impacting rents and prices.

Colliers added that rents climbed to 1%, with continued residential leasing in business districts. This was coupled with an increase in prices (3.3%), and a decrease in vacancy rate (16.9%). The vacancy rate, however, is more likely to increase in the following year due to new supply.

“Vacancy in the Metro Manila secondary market is stabilizing and this has been resulting in gradual improvement in rents and prices. Colliers still sees slower launches and completion this year, but we see the latter making a big comeback in 2024,” Joey Roi Bondoc, senior research manager at Colliers International Philippines, said in its most recent report for the residential segment.

“The upside for the sector is that developers have aggressively been scouting for developable parcels of land outside Metro Manila, targeting the end-user market,” he added. “Developers are undeniably banking on the government’s infrastructure push, aggressively and strategically acquiring land near the government’s big-ticket public projects. Moving forward, this should result in the development of more horizontal projects including resort-oriented master-planned communities.”

Furthermore, McKinsey sees residential buildings to likely drive growth in real estate and its recovery to pre-pandemic levels.

“Much of the sector is expected to recover to pre-pandemic levels by the end of 2023, and construction by the end of 2024. Much of this growth will likely be driven by residential building construction, predicted to grow by 12%. Non-residential construction, by contrast, has yet to recover to pre-pandemic levels,” it added.

Office

Within the office segment, McKinsey noted that the “return to office” trend caused a high demand for office spaces, as well as a resurgence in the need for industrial, retail, and leisure spaces. These two factors are seen to boost growth in this segment.

“Office spaces may need to be reinvented as companies look to adopt more hybrid ways of working,” McKinsey’s article read. “This could result in vacancy rates persisting, however, the growth of coworking facilities and the desire for sustainable buildings will necessitate innovations in construction techniques and leasing agreements, thus encouraging sector-wide growth.”

Colliers, meanwhile, stated in their report that the sector has seen a decline in office vacancy in the first half of the year, from 18.7% to 18.4%. Moreover, net absorption has also increased, resulting in a higher net take-up by the end of the year. With this, elevated vacancy is expected due to the incoming supply that is bound to happen later.

Retail

As long as Filipinos continue to enjoy shopping, the retail sector is seen to rebound faster than expected. Following the previous year, the growth rate for retail is looking positive. Back in the first quarter (Q1), Colliers found, mall vacancies have decreased from 15.4% to 14%. Currently, consumer traffic is returning to pre-COVID levels and the mall foot traffic jumped higher than it was before the pandemic — from a 1% growth in 2022 to a 2.5% in 2023.

According to Colliers, in Q1 2023 the physical mall space is swarmed with mostly food and fashion retails. This, as a result, has attracted foreign retailers.

Moreover, despite the growth of e-commerce in the Philippines, in-store buying will continue to rebound, as seen by the rising absorption of physical mall space by retailers.

Industrial and leisure

In addition, there is a consistent industrial demand in the Philippines this year, and the country is setting high records for investment pledges as foreign investments are more likely to use major industrial hubs in the country. By seeking foreign investments, industry players can further strengthen the country’s manufacturing.

Currently, the Philippines is seeking for foreign investors that are likely to consider the Southeast Asia region as a hub for manufacturing, as well as investments from trade deals. According to Colliers, industrial park developers should use this as an opportunity to expand their industrial footprint and modernize warehouses to meet the needs of their clients and continuously strengthen the industrial sector for a long time.

Green buildings

One notable trend within real estate recently is the rise of green buildings, or structures that incorporate environmentally-responsible and resource-efficient measures. McKinsey noted that the emergence of green real estate, which the firm sees as a “promising step” to the Philippines’ goal of reducing carbon emissions by 75% in 2023, contributes to an optimistic projection for the country’s real estate.

ALI, likewise, finds that “green buildings have become a significant factor in real estate investments due to increasing awareness of environmental sustainability.”

In response, the developer plans to expand its green real estate portfolio by incorporating sustainable features in its developments, such as green spaces, energy-efficient systems, and waste management initiatives.

“ALI aims to create communities that prioritize environmental stewardship while providing quality living and working spaces,” the developer added.

Investors might each have their own objectives through their investments; and real estate is widely seen to meet several of them. Among these is providing an opportunity for investors looking to diversify beyond the stock market or those wanting to gain more control of their investments. And for investors who merely seek to earn from passive income, returns from real estate investments could be generated as such.

Whatever goals one has in mind as an investor, venturing into property investing must involve exploring the real estate industry, the market, and one’s finances.

There are different ways for investors to embark on the real estate sector. Each of them is expected to vary in terms of the amount to put in, potential risks and returns, as well as the management needed, all of which are considerations that investors must be aware of to know which is best for them to add to their investments.

Perhaps one of the most known means to profit from real estate is through investing in properties to rent out. Ideally, such kind of real estate investing could generate steady cash flow, whether an investor leases their property to tenants for a long term that extends years or for a short term like overnight staycations.

But, while rental properties could be rewarding, investors must understand that this real estate investment demands continuous effort and expenses. Among the responsibilities that could cost investors in managing their properties are maintenance and repairs. Rentals could thus be challenging especially if investors manage several properties for lease in their portfolio.

Another way of getting investment returns from procuring a property is through flipping. This meant purchasing a property, renovating it, and putting it up for sale in the market, which then could generate earnings in the short term. However, this investment could be complex, particularly because of the costs it would require for the renovation and its processes.

Apart from rentals and flipping properties, some also view their own homes as an investment. As the owners, investors can earn from their homes someday when they decide to sell them. Investing in one’s home could build its value in the long term.

Such ways to invest in real estate entail managing the properties. Nevertheless, for investors who prefer not to always oversee their properties but still want to partake in real estate investing, they could look into real estate investment trusts (REITs). Investing in REITs involves purchasing a share of a company that owns income-producing real estate assets. When such companies get revenues from their properties, they return the dividends to their investors.

These advantages and risks that come with a particular way of investing in real estate must be looked into by investors to decide which they would go for. But whatever ways one chooses to invest in the real estate sector, investors would need to have their finances ready to pay the costs of such investments.

As mentioned, spending for a real estate investment does not stop at purchasing the property. Especially if such properties would be leveraged for rent or would undergo flipping, investors would have to make expenses for their investments to earn.

In addition, investors must be acquainted and updated about the real estate market to leverage possible opportunities and somehow have expectations. Among the factors they should look at are the property’s location, tenants’ housing preferences, and even the economic conditions.

For instance, looking at the inflation situation in the Philippines during the past months, Colliers held that investors must continuously monitor deviations in inflation and interest rates, and their effect on mortgage rates.

“Colliers encourages investors to proactively monitor interest and mortgage rates, particularly as these strongly influence the viability of condominium as a residential investment,” the professionals services and investment management firm said in its report from July.

The location also matters in real estate investing, such as if a property is surrounded by many conveniences.

In relation to location, Colliers stated in the same report that vertical units within integrated communities and close to public infrastructure developments possess “great capital appreciation potential,” which therefore are among key features that investors should consider in investing in condominium units. This as the firm observed that the investor market in Metro Manila still depends on the potential capital appreciation of condominium units.

Investors should also watch out for the trends and preferences of home seekers. These preferences could deal with the amenities such as outdoor spaces; the location or its proximity to essential establishments; or features that enable smart or sustainable home living. But what tenants look out for in a home constantly shifts, so property investors should stay updated on the market. — Chelsey Keith P. Ignacio

ESG has a significant impact on the performance, risk, and value of real estate investments.

According to a report published by Deloitte, ESG can be a value driver for real estate by helping to ensure that buildings are designed and operated in a sustainable and socially responsible way. Hence, ESG investments in real estate properties can translate to lower vacancy rates, lower operating expenses, and higher market value.

In a report by McKinsey & Company in 2022, residential and commercial buildings are responsible for approximately 40% of global carbon dioxide (CO₂) emissions from fuel combustion and 25% of overall greenhouse gas emissions. As the world moves towards reducing carbon, environmental sustainability is one of the pillars of ESG in property investment.

Nowadays, property investors are giving more importance to green practices to minimize the overall environmental impact of real estate development.

According to McKinsey, real estate leaders have accelerated the need for economic and environmental resiliency planning to combat ecological risks. Property investment leaders need to shift how they design, build, operate, and decommission assets with green growth.

Property investments are also contributing to the development of creating inclusive, accessible, and safe spaces.

Investors are ensuring that the property is secure and well-lit, with working smoke detectors, carbon monoxide detectors, alarm systems, and security cameras. They are also accommodating people with disabilities, such as wheelchair ramps, accessible entrances, and elevators; attracting a wider range of market segment.

Furthermore, proper governance in real estate can help investors implement and assess its policies, goals, and reporting efforts for ESG initiatives.

Based on a study published in the open-access journal Sustainability, strong government policies and procedures can help build trust, attract buyers or renters, and prevent costly mishaps while meeting community needs. Policies and regulations have a significant impact on the real estate market, and property investors can take advantage of opportunities and avoid potential risks.

While the world is facing post-pandemic challenges, property owners and investors who consider ESG-driven actions may be better positioned for success in the future.

According to PwC, ESG-focused investment is expected to soar 84% to US$33.9 trillion by 2026.

Furthermore, real estate investments with strong ESG practices have higher returns on invested capital and assets compared to those without, according to a report by investment research firm MSCI ESG Research, Inc.

Buyers and tenants are also increasingly looking for buildings that are designed and operated in a sustainable and socially responsible way.

ESG, in turn, has become an essential consideration for investment decisions. Investors can attract and retain buyers or tenants, increase the value of their investments, and have a positive impact on sustainability. Consequently, those who ignore ESG factors may be at risk of losing out on opportunities.
— Mhicole A. Moral

Q3 exceeded automotive forecasts as it hit 99.7 million units, the highest monthly vehicle selling rate since August 2018, according to Jeff Schuster, executive vice-president and group head of GlobalData. Globally, Europe is leading with volume growth of 23%, followed by North America with 17%. Meanwhile, Asia continues to experience sustained growth, led by Japan (17%), followed by South Korea (15%), and China (7%).

For the first nine months, the automotive sector has witnessed double-digit growth. Globally, automotive sales exceeded over 90 million units, making it the fourth month in a row where the number was exceeded.

As reported by automotive web-based platform Automotive World, the full-year forecast has increased by 0.1 points. In 2023, the demand for automotive vehicles is expected to rise in major regions but is expected to remain below pre-pandemic levels.

“As we edge toward the end of 2023, the global automotive market has consistently outperformed expectations monthly, leading to another increase to the forecast from 86.8 million units to 87.9 million units, an increase of 8% from 2022,” Mr. Schuster of GlobalData said.

“The lift in the forecast for 2023 has spilled into 2024, with the outlook being increased to 91.6 million units from 90.2 million,” he added.

For light vehicles (LV) sales, China is leading in the market with 25,196 units sold, followed by North America (16,780 units), then Europe (14,049 units), South America (5,142 units), India (4,200 units), Japan (4,488 units), Southeast Asia (2,984 units), and Middle East (2,640 units).

While sales for LVs in Southeast Asia climbed by 5% month-on-month (m-o-m), it has also decreased by 2% year-on-year (y-o-y) in August 2023. According to GlobalData, the results were caused by lower sales in countries Vietnam, Thailand, and Indonesia.

Due to economic challenges, the data showed LV demand is struggling in the Southeast Asia region. LV y-o-y sales dropped by 6% in July and 17% in August in Vietnam; while it dropped 12% in Thailand and 10% in Indonesia for the whole Q3. However, in Southeast Asia countries like Malaysia and the Philippines, light vehicle demand remained strong.

Malaysia saw a surge in LV sales by 33% (y-o-y) and 8% (m-o-m) in July, increasing by 8% (y-o-y) and 13% (m-o-m) in August. Despite the sales decreasing by 5% (m-o-m) in September, the result was still positive and exceeded the sector’s forecast.

Sales in PHL

In the Philippines, automotive sales have surged to a double-digit annual growth. In July, the Philippine automotive industry saw a 33% increase in vehicle sales. According to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA), new vehicle sales increased from 27,813 to 37,086 units since last year.

In July, passenger car sales jumped by 49.8% (y-o-y) and 5.82% (m-o-m), LVs by 32.7%, commercial vehicles by 28.5% (y-o-y) and 0.9% (m-o-m), utility vehicles by 14.1% (y-o-y), and light trucks by 0.2%.

“The auto industry is truly inspired to expand its product and service offering to the consumers and businesses alike as seeing this continued growing demand for new motor vehicles is indeed a welcome and significant part of growth development,” Rommel R. Gutierrez, president of CAMPI, said in a statement.

In August, CAMPI and TMA reported that automotive sales increased by 22% from 30,185 units to 36,715 units annually. 

Moreover, a report from GlobalData shared that August sales increased by 28% (y-o-y), marking the country’s eighteenth month in a row of double-digit growth. Additionally, the Philippine automotive sales have increased from 33,000 units in the first quarter of 2023 to 38,000 units in Q3, which led to the continuing trend of growth.

“Consumer demand drives the auto sales further from an already considered pre-pandemic performance a year prior amidst the above inflation target recorded anew in the same period,” Mr. Gutierrez of CAMPI observed.

According to CAMPI and TMA, in August, new vehicle sales rose 21.6% to 36,714 units in August from 30,185 units in the same month a year ago. 75% of the automotive sales were made up of commercial vehicles, totaling a 28% increase since January 2023, and increasing by 13.5% annually. Also, heavy trucks witnessed a 50.6% increase, passenger car sales tallied a 49.9% increase, while Asian Utility Vehicles (AUV) declined by 0.3% (y-o-y) and 8.3% (m-o-m).

Continuing this rise of demand for automotive vehicles, vehicle sales grew by 9.5% annually in September. Unfortunately, September was also the month when the country’s double-digit growth in automotive sales slowed down.

According to the data, two-thirds of the vehicle sales were made up of commercial vehicles, increasing by 6.5% (y-o-y) and 9.2% (m-o-m) in September. Whereas, light commercial vehicles rose by 4.6% and AUV sales by 14.9% Additionally, light truck sales increased by 21.7% and passenger car sales by 19.8%, while medium and heavy truck sales dropped by 2.4 and 5.8%.

“The industry also welcomed the country’s sustained improvement in major economic sectors, which remain an important factor toward economic and market conditions that are favorable for the industry and consumers alike,” Mr. Gutierrez said by the time of the report’s release.

“The steady year-on-year growth recorded in the first five months gives the industry a reason to be even more optimistic and grateful at the same time as attaining its growth forecast this year felt even closer to reality and proves rather possible,” he added.

In the first nine months, the top car manufacturers in the Philippines continued to remain strong and robust in terms of automotive sales. The leading manufacturer in this list, Toyota Motor Philippines Corp., sold out 144, 232 units, equivalent to a 45.81% market share. Second in ranking is Mitsubishi Motors Philippines Corp., selling out 58,065 units, resulting in a 65.2% sales increase. They were followed by Ford Motor Co., Phils with a 42.2% sales increase, selling out 23, 091 units, and Nissan Philippines, Inc. with 24.7% (20,037 units).

The total Q3 2023 vehicle sales results have put the industry right on track for recovery this year. Despite the slow growth of vehicle sales this month, from 248,154 units to 314,843 units were managed to be sold during the nine-month period.

With the new results of vehicle sales in the last month of Q3, CAMPI increased its 2023 sales target from 395,000 units to 423,000 units, which is 20% higher than the 2022 vehicle sales.

“The automotive market has remained resilient since 2021 and the current trend indicates that we will breach the highest pre-pandemic sales performance and achieve full industry recovery in 2023,” Mr. Gutierrez said.

“The auto industry is notably going strong despite the consumer spending slowdown attributed to the risks of inflation. In fact, the auto industry is sustaining its positive growth trend as sales of new motor vehicles recorded a continued year-on-year growth for the past 17 consecutive months since March 2022. The industry hopes to maintain this trend this year,” he added. — Angela Kiara S. Brillantes

According to Market Research Philippines, the automotive industry in the Philippines is one of the leading manufacturing hubs in Southeast Asia with a recorded increase in sales of 31.3%, with a total of 352,696 units sold.

In the first half of 2023, the sector demonstrated impressive sales growth of 27.2% on a year-on-year basis, indicating the industry’s continued progress despite the pandemic. According to a report published by the Philippine News Agency, the Philippine automotive industry is expected to continue its growth in the coming years despite the rising oil prices and supply constraints.

Furthermore, top car manufacturers in the Philippines have exceeded sales expectations in quarter two. These manufacturers include Toyota Motor Philippines Corp., Mitsubishi Motors Philippines Corp., Ford Motor Co. Phils., Inc., Nissan Philippines, Honda Cars Philippines, and Suzuki Phils., Inc., and GAC Group.

Toyota Zenix HEV

The Toyota Zenix HEV is a hybrid vehicle designed for the Southeast Asian market, and it is considered the key to opening the era of environmentally friendly technology.

The Zenix features a modern design departure from the current-generation Innova, including a prominent Trapezium grille, sleek headlights, and stylish 18-inch wheels.

This vehicle is equipped with a Series-Parallel hybrid (or Power-Split hybrid) powertrain that comprises a 2-liter gasoline engine and a Permanent Magnet Synchronous Electric motor. The battery for this car’s electric motor comes with an 8-year or 160,000km warranty.

The top-of-the-line Q Variant features the MK20A-FXS 2.0-liter four-cylinder engine, which generates 150 horsepower, complemented by the added power from the electric motor.

The Toyota Zenix HEV is a glimpse of what future MPVs could be like with great design and better comfort. It is a logical next step for Toyota in promoting environmentally friendly technology transportation in Asia.

The Zenix proves that the future is within reach, and it presents an exceptional value proposition at a price tag of P1,968,000.

Chevrolet New Generation 2024 Trax

The 2024 Chevrolet Trax is a compact SUV that has been redesigned to offer more space and size than its predecessor.

The Trax is powered by a 137-hp turbocharged three-cylinder engine and six-speed automatic transmission, which it borrows from the smaller Trailblazer. The vehicle earned an EPA-estimated 28 mpg in the city and 32 mpg on the highway.

The new Chevy Trax has a completely redesigned interior with a driver-facing infotainment screen and climate controls that are neatly places. The vehicle has a longer wheelbase than before, which has resulted in about three inches of additional rear legroom and more cargo space.

Moreover, the 2024 Chevy Trax comes with a strong offering of standard safety features, including Chevy Safety Assist, adaptive cruise control, and keyless open.

2024 Honda CR-V

The 2024 Honda CR-V is a compact SUV that has been fully redesigned for 2023 with new styling, a larger interior, and improved safety features.

The Honda CR-V adds a Sport-L trim level for 2024, which bridges the gap between Sport Hybrid and Sport Touring Hybrid trims.

The vehicle has standard forward-collision warning and automated emergency braking, standard lane-keeping assist and lane-departure warning, and standard adaptive cruise control. It also has safety ratings and a smartly packaged interior.

2024 Honda HR-V

The Honda HR-V is a subcompact crossover SUV that has been redesigned for 2023. The vehicle is Honda’s smallest SUV and is positioned below the CR-V and Pilot.

The HR-V is available in three trims, and the Sport trim makes the most sense, with its slightly more aggressive exterior styling and 18-inch wheels.

The vehicle offers standard automated emergency braking, lane-departure warning with lane-keeping assist, and adaptive cruise control.

Volvo C40 Recharge EV

The Volvo C40 Recharge EV is a fully electric crossover SUV with a leather-free interior and Google built-in.

Meanwhile, the twin engine version of the C40 Recharge delivers 402 horsepower and 486 pound-feet of torque from its pair of electric motors, allowing it to go from zero to 60 mph in 4.5 second.

The C40 Recharge has an electric range of up to 478 km for the single motor version and up to 414 km for the twin engine version.

The C40 Recharge has a sloped roof design that gives it a crossover-coupe styling, which is currently popular. The interior features high-end materials and finishes, and the car is completely leather-free. The vehicle includes a comprehensive set of driver-assistance features as standard, including lane-keeping assist and automated emergency braking.

GAC GS3 Emzoom

GAC Motor has launched its new entry-level model, the GS3 Emzoom crossover SUV, which has been grabbing the attention of buyers with its statement geometric design and practicality.

The Emzoom R-Type uses GAC’s Global Platform Modular Architecture chassis with a length of 4410 mm, width of 1850 mm, height of 1600 mm, and a wheelbase of 2600 mm. The car is equipped with a 10.25-inch touchscreen display that is easy to use and provides access to a range of features, including navigation, entertainment, and climate control

The GS3 Emzoom is powered by a 1.5-liter turbocharged engine that produces 150 horsepower and 230 Nm of torque. The engine is paired with a 7-speed dual-clutch transmission that provides smooth and responsive shifting.

The car is equipped with a range of safety features, including anti-lock brakes, electronic stability control, and a rearview camera.

Suzuki Ertiga Hybrid

The Suzuki Ertiga Hybrid is a compact MPV that combines advanced engine technology with versatility, all wrapped up in an affordable package.

The car boasts a 1.5-liter K15B petrol engine combined with an electric motor and a lithium-ion battery pack. This hybrid system provides a seamless driving experience with the electric motor assisting the vehicle from a stop and during braking.

The Suzuki Ertiga Hybrid caters to the diverse needs of modern families by offering exceptional versatility. A spacious and well-designed cabin comfortably accommodates up to seven occupants.

The car is also equipped with innovative SHVS technology and the ISG and Lithium-ION battery, which improve the engine’s operationalization and regenerative capacity.

2024 Mitsubishi Outlander PHEV

This quarter, Mitsubishi has unveiled the latest addition to its lineup, the 2024 Mitsubishi Outlander PHEV.

The 2024 Outlander PHEV combines advanced electric and hybrid technology with its interior, tech features, and safety measures.

The Outlander PHEV has a powerful engine and smooth performance. It features a 20-kWh battery pack and a 2.4-liter four-cylinder engine that produces 221 horsepower and 181 pound-feet of torque.

The EPA-rated for 38 miles of all-electric driving range, the 2024 Outlander PHEV also boasts 420 miles of overall driving range when combining electricity and gasoline.

This vehicle has advanced technology features that enhance a person’s driving experience, with user-friendly infotainment system equipped with a large touchscreen display. The interface also integrates with smartphones, allowing users to access their favorite apps, make calls, and stream music through Apple CarPlay or Android Auto.

The Outlander PHEV boasts a forward-collision warning and automated emergency braking. It also features Mitsubishi Motors’ Super-All Wheel Control twin-motor 4WD system.

Mercedes-Benz EQE

Mercedes-Benz has recently released the EQE, an electric luxury sedan that diverges from the gas-powered Mercedes E-class in multiple ways.

The EQE has an aerodynamically optimized design that is unique to the electric model. It has a lozenge-shaped body that is slightly more compact than the E-class, but it rides on a unique EV platform that delivers a roomier interior.

The vehicle has a single electric motor mounted on its rear axle, and a trio of available powertrains includes a 288-hp rear-drive setup and two all-wheel-drive configurations with up to 402 horses.

Mercedes claims the non-AMG model has a maximum driving range of over 300 miles, and an EQE350 4Matic model traveled 260 miles on a real-world highway route. — M. A. Moral

For any enthusiast looking ahead to 2024, it will be worth the time to anticipate trends and keep an eye on industry-shifting innovations, as this may give insight into how the automotive industry of the future is shaping up.

Doubly so for the Philippines. After the industry suffered devastating losses due to the coronavirus disease 2019 (COVID-19), local automakers in the Philippines predicted that the industry would not be able to bounce back until 2023. But due to various factors, the recovery began as early as 2021, when the country saw steady increases in vehicle sales despite difficulties in the supply chain and worldwide socioeconomic pressures, and continued throughout 2022 up to today.

Latest reports from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) registered double-digit annual vehicle sales growth in August 2023, with 36,714 units sold from 30,185 units in the same month a year ago.

By the end of 2023, it is predicted that annual car sales will have reached 400,000.

“Consumer demand drives the auto sales further… from an already considered pre-pandemic performance a year prior amidst the above inflation target recorded anew in the same period,” CAMPI President Rommel R. Gutierrez said in a statement.

“The auto industry is mindful of the challenges brought by high inflation and its effect on the overall consumer confidence particularly for big-ticket items — not welcome news to the consumers and industry alike if it will persist,” Mr. Gutierrez said.

Global trends may serve to bolster the numbers further, especially as the world at large moves on from conventional fossil fuels and transitions to more sustainable energy sources.

Sustainable fuel is becoming more popular, and automobile companies are working to lower carbon emissions through electrification, lighter materials, and better aerodynamics. It is predicted that electric vehicles (EVs) will rule the market moving forward, and that hybrid versions of numerous models will become standard fare on roads worldwide.

In fact, according to the International Energy Agency (IEA), the global market for EVs is booming, with sales of more than 10 million units in 2022. The strong demand for EVs is expected to persist well into next year, as sales increased by over 25% year-over-year in the first quarter of this year alone, reaching over 2.3 million units.

This means that, the IEA noted, with new purchases picking up speed in the second half of this year, there will be an expected 14 million in EV sales by the end of 2023, a 35% year-on-year growth. This would account for 18% of the year’s total vehicle sales.

Technological advancements in automobiles are also seeing groundbreaking progress. While the development of autonomous driving technology has been in the news for several years now, continued investments by companies like Tesla, Google’s Waymo, and General Motors can bring the technology to new heights in 2024.

Global management consultant McKinsey and Company anticipates autonomous driving (AD) could create $300 billion to $400 billion in revenue by 2035. Recent research found that major improvements in AD capabilities are on the horizon.

According to a consumer survey conducted by McKinsey in 2021, consumers are interested in AD features and are willing to pay for them. This is not even mentioning the knock-on effects self-driving cars can have on other industries.

“For example, by reducing the number of car accidents and collisions, AD technology could limit the number of consumers requiring roadside assistance and repairs. That may put pressure on those types of businesses as consumer adoption of AD rises,” McKinsey’s report said.

“In addition, consumers with self-driving cars might not be required to pay steep insurance premiums, since handing over control of vehicles to AD systems might mean that individual drivers could no longer be held liable for car accidents. As a consequence, new business-to-business insurance models may arise for autonomous travel.”

Naturally, several automakers are already piloting new insurance products to accompany these developments, as they glean insights on driving behavior from autonomous technology and make personalized offers to their consumers. Since they control the AD system, its performance, and the data that it generates (such as the real-time performance of drivers), auto companies can precisely tailor insurance policies to their consumers, giving them a significant advantage over external insurance providers.

Even if self-driving cars and such a future are still a few years away, in today’s highly connected world, vehicles are still essentially mobile computers. Device connectivity is on the rise, and as time goes on, so will the intelligence of motor vehicles.

Adaptive cruise control, lane-keeping assist, and automated parking are just a few examples of the advanced driver-assistance systems that will become standard on more and more vehicles in the near future.

With the help of AI and machine learning, automobiles will learn the preferences of their drivers and adjust accordingly, creating a more pleasant and relaxing driving experience for everyone. Your vehicle will reflect your individuality, from the way you like to relax to the music and shows that are recommended to you based on your preferences.

The accessibility of modern technologies is also expected to improve. In many modern automobiles, drivers are already able to safely make and receive phone calls and text messages without taking their hands off the wheel. Now, even with automobiles that have not historically included a lot of fancy technology are increasingly including digital displays and touchscreen technologies. These technological enhancements will eventually reach even the most basic and utilitarian automobiles.

In the coming year, the automotive industry will no doubt remain a dynamic landscape of technological advancement, environmental consciousness, and shifting consumer tastes. Electric vehicles and autonomous driving will likely reach more people as the technologies behind them continue to improve, and this will have far-reaching effects on the transportation landscape, from design to urban mobility. — Bjorn Biel M. Beltran

At the core of these emerging strategies is a focus on sustainability and digital transformation. Property developers are increasingly prioritizing environmental responsibility by incorporating green spaces, renewable energy sources, and innovative technology into their projects. Digital technologies, meanwhile, enable companies to engage consumers, enhance their customer experience, and streamline their processes.

Ayala Land, Inc. (ALI), a pioneer in Philippine property development, is at the forefront of these transformative strategies. ALI reported a 41% increase in first-half attributable net income, reaching P11.39 billion, and a 23% surge in real estate revenues, now standing at P64.52 billion, up from P52.32 billion in the same period the previous year.

Residential reservation sales, which contributed significantly to these revenues, witnessed an 18% year-over-year increase, amounting to P58.3 billion. This surge was driven by AyalaLand Premier’s Ciela in Carmona, Cavite; Alveo’s Park East Place in Bonifacio Global City; Arcilo at Nuvali in Laguna; Parklinks South Tower in Quezon City; and Avida Towers’ Makati Southpoint.

Known for its consistent leadership in the Philippine real estate industry, Ayala Land continuously adapts to evolving market trends. The company boasts a diverse portfolio of real estate developments, including residential, leisure, commercial, industrial, and construction and property management services, a legacy built since 1988.

As ALI marks its 35^th year in real estate, it has established a reputation for creating diverse property developments and shaping the real estate industry. The company’s extensive portfolio includes a variety of residential developments, ranging from luxury residences to sustainable co-living spaces across the metropolis. It offers innovative and affordable residential projects nationwide, complete with services and amenities, ensuring resident security and convenience near bustling economic centers.

In the office leasing segment, ALI has established a substantial presence with a total of 1.4 million square meters of office developments, with a substantial focus on serving business process outsourcing firms, a cornerstone of the Philippine economy. The launch of Clock In by AyalaLand Offices has introduced premium, contemporary office spaces tailored for diverse businesses, featuring shared workspaces, private offices, and meeting rooms at strategic locations like Makati Stock Exchange, Bonifacio High Street, and Bonifacio Technology Center.

ALI also has a suite of leisure and hospitality projects that continuously contribute to the growth of the tourism sector. Seda Hotel has expanded to 12 properties around the country to include city hotels, resorts, and residential apartments, to serve travelers with its distinct brand of service. Raffles Hotel, a 30-storey luxury hotel building, now welcomes domestic and foreign guests with its charm and sophistication. Its resorts in Palawan and Sicogon also continue to be favorite island getaways. Its El Nido Resorts was recently recognized as among the best resorts in the world in the Conde Nast Traveler 2023 Readers’ Choice Awards.

Fostering economic growth

Ayala Land’s legacy is woven into the fabric of the Philippine real estate landscape, with 50 estates spanning mixed-use, tourism, residential, commercial, and industrial categories, catering to the social and economic needs of the Philippine real estate market.

In Makati, ALI completed One Ayala which includes the 40,000-square-meter BPO office building, East Tower and the One Ayala Terminal, a three-floor 20,000-square-meter modern intermodal transport hub designed to improve the commuting experience. It includes covered walkways and three terminal floors, which serves as a terminal for different transport vehicles, including buses, modern jeepneys, and Asian utility vehicles (AUVs), among others. Also within this integrated development is the One Ayala Mall which boasts six retail floors spanning over 43,000 square meters with more than 400 stores including dining outlets and offering a range of shopping options. It aims to create a premier destination for shopping, leisure, and events, offering a diverse array of experiences and amenities within the mall.

Also, in the middle of lifestyle options, ALI proudly presents the Samsung Performing Arts Theatre at the Circuit Makati, a venue that celebrates live entertainment and the Filipino talent.

Furthermore, ALI has expanded its high-end commercial developments in Quezon City, including Alveo’s High Park, Orean Place, and Ayala Land Premier’s One Vertis Plaza, along with the final tower in Avida Towers Sola, offering breathtaking green spaces within Metro Manila.

Well-positioned for change

Ayala Land continues to adapt to the evolving landscape of the Philippine real estate market, harnessing digital solutions such as virtual property tours and online reservation systems to enhance the home-buying process. Accessible online platforms have simplified the home-buying journey, with user-friendly websites enabling customers to explore ALI’s listings and take virtual tours.

When it comes to sustainable building and eco-friendly policies, Ayala Land leads by example. The company’s commitment to sustainable development is evident through innovative solutions that reduce environmental impact and enhance quality of life for residents and visitors alike.

With over 957 hectares of green space in 26 urban estates, including 46 parks in established estates and 11 emerging estates, ALI is actively contributing to environmental conservation. The company also maintains 586 hectares of dedicated carbon forests within its properties and has adopted a global sustainability framework.

In developing and maintaining its properties, ALI employs energy-saving technologies, renewable energy sources, and green building features that promote energy efficiency and indoor air quality. Waste management strategies, such as waste segregation, composting programs, and recycling initiatives, are integral to ALI’s sustainability efforts.

A major component of ALI’s sustainability efforts is its constant collaboration with local communities. The company runs community-engagement initiatives that promote sustainability and teaches locals how to live sustainably, such as workshops, seminars, and outreach programs.

Ayala Land has been a pioneer of incorporating sustainable practices into its developments, products, and services. The company’s commitment to sustainability not only creates value for its customers, investors, and stakeholders but also contributes to environmental, social, and economic benefits for the public.

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This goes for both the individual and the enterprise level. Just as any person should have some measure of security to protect against financial emergencies, whether through insurance or otherwise, businesses are expected to take into account potential risks and concerns when devising their strategies.

Doing business in the Philippines is a double-edged sword in that regard. On the one hand, even as the country records the slowest growth it has seen in almost 12 years in the second quarter of 2023, it is still poised to outpace many of its neighbors in Southeast Asia.

According to the World Bank, despite recently lowering its forecast for the Philippines from 6.0% to 5.6%, the Philippine economy is still expected to grow faster than Cambodia (5.5%), Indonesia (5%), Vietnam (4.7%), Malaysia (3.9%), Laos (3.7%), Thailand (3.4%), and Myanmar (3%).

National Economic and Development Authority Secretary Arsenio M. Balisacan is even optimistic the country can achieve the lower end of its 6% to 7% target growth range, provided the government spending ramps up for the rest of the year.

On the other hand, the Philippines is seemingly beset on all sides by risk and conflict. The ASEAN+3 Macroeconomic Research Office (AMRO), an international organization aiming to secure the macroeconomic and financial resilience and stability of the ASEAN+3 region, identified several immediate and long-term risks that may hinder the country’s growth moving forward.

In a preliminary assessment made by AMRO during its Annual Consultation Visit to the Philippines from Aug. 29 to Sept. 8, it found that such risks include: high inflation, especially due to local supply shocks in the food sector; economic slowdown in major trading partners and volatility in the global financial market; the scarring effects of the pandemic; the pace of infrastructure development; geopolitical risks; and the economic losses from natural disasters, which are being exacerbated by climate change.

Data released by the Philippine Statistics Authority put inflation at 6.1% in September, rising for the second month in a row. Inflation was recorded at 5.3% in August, changing course from the downward trend since the start of the year.

Inflation has averaged 6.6% so far this year, well outside the government’s 2%-4% goal range. January’s 8.7% rate is still the highest of the year.

According to the PSA, the rise in September’s inflation was primarily due to food and non-alcoholic beverages, more specifically cereals and cereal goods (14.1%). Because rice is weighed more heavily in the commodities basket, rice’s price volatility has a greater impact on total inflation rates.

Inflation in rice reached a 14-year high of 17.9% in September, despite President Ferdinand Marcos Jr.’s determination to enforce price restrictions on rice. This measure did not make much of an impact as, according to the PSA, most of the regular-milled and well-milled rice varieties observed in September did not adhere to the price limitations.

Fuel price increases also contributed to the inflationary trend. Gas prices have risen steadily throughout the month of September that the government has released P2.95 billion to subsidize fuel for public utility vehicles.

Moreover, jeepney tickets are increasing by P1 across the country. Both the higher rates for commuters and the indirect raising of expenses for Filipinos who utilize jeepneys as a mode of transportation might push inflation higher in the coming months.

Meanwhile, the Philippines continues to suffer from the adverse effects of climate change, the most recent of which was Typhoon Jenny earlier this month, with winds reaching up to 89 to 117 kilometers per hour, and posing significant threat to life and property.

In 2022, worsening tropical cyclones caused around P25.03 billion worth of damages, according to Statista. PAGASA expects four to seven tropical cyclones to form within or enter Philippine territory from October this year to March 2024.

Opportunities amid uncertainty

Yet, as mentioned before, the Philippines is in a much more favorable position to weather risks than others. Finance Secretary Benjamin E. Diokno, for instance, said that the Philippine economy would be less affected by the economic slowdown of China, despite such a slowdown dampening global trade and exerting downward pressure on the country’s goods and service exports.

“The Philippines is expected to be less affected by China’s slower economic growth given that the potential slowdown in exports could be partially mitigated by the demand from our large domestic market,” he said during the ASEAN Roundtable at the World Bank-International Monetary Fund (IMF) Annual Meetings in Marrakech, Morocco on Oct. 11.

Moreover, infrastructure spending is expected to ramp up in the fourth quarter of 2023 to boost the local economy. State spending soared 65.8% in August as the government ramped up the implementation of projects.

In its latest National Government (NG) disbursement report, the Department of Budget and Management (DBM) said infrastructure and other capital outlays jumped to P122.1 billion in August from P73.7 billion in the same month a year ago. Month-on-month, infrastructure spending also rose by 10% from P111 billion in July.

“This was largely attributed to the disbursements made by the Department of Public Works and Highways (DPWH) for its completed projects nationwide, such as national roads and bridges, infrastructure projects, flood control projects, convergence programs, and payment of right-of-way claims,” the DBM said.

Of course, much more needs to be done to secure the Philippines’ economic outlook over the medium to long term. Particularly, as the country recovers from the scars left by the pandemic and moves into a future that is threatened by external risks like climate change and geopolitical conflict, it will be necessary to invest in and create the foundations for sustainable economic growth. — Bjorn Biel M. Beltran