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PCG reveals ‘severe damage’ to disputed shoals

Philippine Senate told to probe coral reef destruction; China asked to pay

A PHILIPPINE senator has filed a resolution seeking to investigate China’s alleged destruction of corals at Iroquois Reef and Sabina Shoal in the South China Sea.

Senator Ana Theresia “Risa” N. Hontiveros-Baraquel in Resolution 804 condemned the coral harvesting allegedly by Chinese militia vessels and urged the Senate to conduct an inquiry into the matter.

She also renewed her call for China to pay for environmental damages after the Philippine Coast Guard confirmed a military report on the destruction of corals at Iroquois Reef and Sabina Shoal.

The senator said the government should not tolerate the continuing harm to the environment, economy and security brought about by Chinese incursions, and should try to hold China accountable, including a claim for damages to be filed with the Permanent of Court of Arbitration in the Hague.

“We should seek payment for damages caused by China in the West Philippine Sea,” Ms. Hontiveros said in a statement, referring to areas of the South China Sea within the Philippines’ exclusive economic zone. “We will get billions of pesos once China is obligated to pay,” she said in Filipino.

She accused China of robbing Filipino fishermen of their livelihood and destroying Philippine natural resources.

The Chinese Embassy in Manila did not immediately reply to an e-mail seeking comment.

The Philippines should seek an international investigation of the alleged coral harvesting by Chinese maritime militia vessels in Philippine-claimed areas of the South China Sea, geopolitical analysts said on Tuesday.

The Philippines has put itself in a good position to internationalize the ecological destruction of its maritime features through its maritime transparency policy, said Raymond Powell, project leader at Stanford University’s Gordian Knot Center for National Security Innovation.

“The Philippines can now appeal directly to international and transnational groups to investigate these matters and request outside intervention,” he said in a Twitter message, referring to the United Nations, Greenpeace and World Wildlife Fund.

The Philippine Coast Guard (PCG) this week said it had conducted underwater surveys that showed “the marine ecosystem in the subject West Philippine Sea features appeared lifeless, with minimal to no signs of life.”

It said it had monitored 33 Chinese militia vessels near Iroquois Reef and 15 others near Sabina Shoal from Aug. 9 to Sept. 11. Iroquois Reef is at the southern end of Reed Bank, an area northeast of the Spratly Islands thought to be rich in oil and gas.

There was visible discoloration of the seabed, indicating activities meant to modify the terrain’s natural topography, it added.

The presence of crushed corals strongly indicates a potential act of dumping, “possibly involving the same dead corals that were previously processed and cleaned before being returned to the seabed,” it said.

The Philippine military on Sept. 14 raised concerns over the resurgence of China’s swarming tactics in Philippine areas of the disputed waterway.

Citing air patrols on Sept. 6 and 7, the Armed Forces of the Philippines Western Command said Iroquois Reef was being surrounded by 23 Chinese fishing vessels.

The tactic was also seen at Sabina Shoal, where five Chinese fishing vessels were present, and at Nares Bank, where two Chinese fishing vessels were spotted, it said in a statement.

The swarming activity has implications for the Philippines’ “maritime security, fisheries conservation, territorial integrity and the preservation of the maritime environment,” it added.

At the height of a coronavirus pandemic in 2020, Ms. Hontiveros filed Senate Resolution 369 calling on the Executive to exert legal and diplomatic efforts so that China would foot the bill for its COVID-19 response.

The call came after a scientist from the University of the Philippines’ Marine Science Institute estimated that the country was losing P33.1 billion yearly from the damaged reef ecosystems at Scarborough Shoal and the Spratly Islands due to China’s reclamation activities in the area.

The amount was determined using a baseline value of $353,429 (P20 million) per hectare per year for coral reefs based on a study conducted by Elsevier, a Dutch company specializing in scientific, technical and medical information and analytics.

“This will not be the first time for us to seek reparations,” Ms. Hontiveros said. “Japan paid our country for her destruction of Manila during World War II, and in more recent history, the United States of America also paid the Philippines P87 million after the USS Guardian damaged Tubbataha Reef in the Sulu Sea. We have the right to seek payment.”

“Our 2016 arbitral award clearly invalidated China’s sweeping and expansive claims in the West Philippine Sea,” Ms. Hontiveros said. “This is a case we won because of our dogged commitment to abide by international law and uphold the truth. It is only right that we pursue all options to make China pay.” — Norman P. Aquino and JVDO

#Philippine #Senate #told #probe #coral #reef #destruction #China #asked #pay

The Philippine real estate market in Q2 2023: Imminent business boom in Luzon

The Philippine real estate market in Q2 2023: Imminent business boom in Luzon

The second quarter of 2023 saw an economic slowdown due to high commodity prices and the lagged impact of interest rate hikes. In its latest trend report, Lamudi reveals how the real estate market is holding up despite economic headwinds.

Vertical residential and commercial properties grew at an equal pace in the first half of the year. The double-digit lead growth observed by Lamudi for both property types in Q2 2023 indicates homebuying appetite and business intentions.

An increase in commercial investments influenced the country’s moderate economic expansion. This reflects the 30% increase in quarter-on-quarter leads for commercial properties on Lamudi.

Consumer confidence in CALABARZON lots for sale

CALABARZON is a fast-growing region with adequate infrastructure for its population size and growth. Four of its five provinces made it to the top 10 locations for lots for sale on Lamudi; Rizal and Laguna received the most leads in the economic price segment.

The five-year development plan for CALABARZON aims to strengthen its priority industries: information technology, metals, electronics, automotive, and petrochemicals. Further, the plan seeks to modernize agriculture and agri-business and expand employee opportunities.

Lamudi identified the hottest markets for lots for sale in CALABARZON, opening up opportunities for investors to achieve sustained growth.

  • The top ten most viewed locations for agricultural lots for sale were in Luzon. Cavite, Batangas, and Rizal topped the list, in that order.
  • Cavite and Batangas received more pageviews than any other location for agricultural lots on Lamudi. Both provinces are also gaining popularity due to their suitability for agri-tourism activities and farm villa rentals.
  • Metro Manila was the most searched location for commercial lots on Lamudi. Other most viewed provinces were located in the periphery of the metro. Commercial lots in CALABARZON and Pampanga are suitable for warehousing, truck parking, and manufacturing.

Rewarding regional growth

Region IV-A’s real estate landscape has changed over the years. With Metro Manila becoming more saturated, property seekers and developers move towards investing in various property types situated in CALABARZON. A prominent region for technoparks, it is also one of the leading locations for houses, condominiums, mixed-use developments, and commercial establishments.

The rise of new developments in CALABARZON and the wider area of Luzon is also seen in the turnout for Lamudi’s awarding ceremony for property developers, The Outlook: Philippine Real Estate Awards 2023. The property platform recorded a 50% increase in nominated projects in Luzon compared to last year, reinforcing the growth in one of the three major islands of the Philippines.

This year, Lamudi will also be naming the Best Industrial Development of the Year, in recognition of an industrial project that enables efficient business operations and stimulates the local job market.

The Outlook: Philippine Real Estate Awards 2023 is happening this September

The most prestigious award-giving body for property developers is coming back this month. The Outlook: Philippine Real Estate Awards 2023, in partnership with Bank of the Philippine Islands (BPI), is happening on Sept. 21, 2023, at Shangri-La The Fort in BGC, Taguig. The awarding ceremony will gather the most prominent and respected personalities in the Philippine property scene and recognize outstanding developments in the country.

In addition to citing the leading industry projects of the year, The Outlook: Philippine Real Estate Awards 2023 will also be a platform for meaningful discussions on the state of the property market in the country. There will be a panel discussion featuring the frontrunners of the industry. Land Registration System’s (LARES) President, Teddy Sumulong, will deliver the keynote address.

The event’s gold sponsors are ContractWorld Furniture and Taylor Living Furniture, while the minor sponsors are MetroMart and Pick.A.Roo.

The media partners of The Outlook: Philippine Real Estate Awards 2023 are the Philippine Daily Inquirer, Inquirer Property, The Philippine Star, Manila Bulletin, BusinessWorld, Business Mirror, Manila Standard, Malaya Business Insight, and The Business Manual. The media support are Media Blast Digital, Property Finds Asia, NegoSentro, Real Estate Blog PH, and Village Connect.

To know more about The Outlook: Philippine Real Estate Awards 2023, visit now.


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#Philippine #real #estate #market #Imminent #business #boom #Luzon

Nobel laureate Ressa acquitted in Philippine tax case

Nobel laureate Ressa acquitted in Philippine tax case

 – Philippines Nobel laureate Maria Ressa and her news site Rappler were acquitted of tax fraud by a trial court on Tuesday, in another legal victory for the embattled journalist and for press freedom in the Southeast Asian country.

Ms. Ressa, who won the Nobel Peace Prize in 2021 alongside a Russian journalist, is head of Rappler, which earned a reputation for its intense scrutiny of former President Rodrigo Duterte and his deadly war on drugs.

After the verdict was announced, Ms. Ressa told reporters Her acquittal sends a “good signal” to the business community, as her tax charges “have a lot to do with the rule of law”.

“The acquittal now strengthens our resolve to continue with the justice system, to submit ourselves to the court despite the political harassment, despite the attack on press freedom,” Ms. Ressa said.

“It shows that the court system works. We hope to see the remaining charges dismissed,” she added.

Ms. Ressa‘s acquittal was expected after she was cleared of similar tax charges nine months ago.

Those charges stem from a 2018 government indictment that accuses Ms. Ressa and Rappler of dodging tax payments after failing to declare proceeds of a 2015 sale of depositary receipts to foreign investors.

Ms. Ressa, 59, is currently on bail and was convicted in 2020 for cyber libel in one of several cases against the website filed by government agencies. She maintained those cases were politically motivated.

President Ferdinand Marcos Jr, who has been in office for 14 months, has said he would not interfere in the court cases against Rappler.

Rappler is still operating unhindered pending its appeal against a closure order from the securities regulator.

Francis Lim, one of Ms. Ressa‘s lawyers, said the team hoped the latest acquittal would lead to the dismissal of the other cases, including the closure order.

The Philippines is ranked 132 out of 180 countries in the World Press Freedom Index, describing its media as “extremely vibrant despite the government’s targeted attacks and constant harassment” against journalists that are “too critical”. – Reuters

#Nobel #laureate #Ressa #acquitted #Philippine #tax #case

US judge won’t order Philippine casino merger to close

US judge won’t order Philippine casino merger to close

WILMINGTON, Del. – The Philippines’ largest casino, owned by an affiliate of Japan’s Universal Entertainment Corp. does not have to complete a SPAC merger deal with 26 Capital Acquisition Corp. of the U.S., a Delaware judge ruled on Thursday.

Vice Chancellor Travis Laster said the affiliate that owned Okada Manila did not have to complete the $2.5 billion deal 2021 merger in part because 26 Capital “engaged in conduct that should not be rewarded” by ordering the deal to close.

Laster said 26 Capital could still seek damages, which he would address at a later date.

An attorney for the casino owners said they were pleased with the ruling and an attorney for 26 Capital did not respond to a request for comment.

Delaware courts have a history of ordering parties to complete their merger deals, but Laster said those were situations where the court could oversee and enforce its order which the judge said he would not be able to do.

Laster said directing the deal to close might violate a Philippine court order. In April 2022, the Philippine Supreme Court ordered Japanese pachinko tycoon Kazuo Okada returned to the leadership of the casino owner as part of Okada’s fight against his removal from Universal Entertainment.

Laster also said ordering the deal to close would reward improper conduct.

He said it was never disclosed to the casino owners that their deal adviser, Zama Capital hedge fund founder Alex Eiseman, also owned more than 60% of a 26 Capital affiliate. A low-ball deal for the casino would therefore benefit Eiseman’s investment and Laster described Eiseman’s work with 26 Capital as “a conspiracy to mislead Universal.”

A lawyer for Eiseman did not respond to a request for comment.

If completed, the deal would have generated $275 million for the casino.

Okada Manila started operations late in 2016 and is the biggest of four multibillion-dollar casino-resorts operating in the Philippine capital. — Reuters

#judge #wont #order #Philippine #casino #merger #close

Philippine jobless, underemployment rates jump in July

Philippine jobless, underemployment rates jump in July

By Bernadette Therese M. Gadon, Researcher

The unemployment rate in the Philippines inched up to 4.8% in July, bringing the number of jobless Filipinos to 2.27 million, the Philippine Statistics Authority (PSA) said on Friday.

The underemployment rate, on the other hand, rose to a 20-month high as slower economic activity led to more job losses.

Preliminary results of the April Labor Force Survey (LFS) showed the unemployment rate rose to 4.8% in July from 4.5% in June. Year on year, this was lower compared to 5.2% in July 2022.

At 4.8%, this was the highest unemployment rate since 5% in September 2022, and matched the unemployment rate in January and February this year.

Despite the higher rate, the absolute number of jobless Filipinos in July was lower than the 2.33 million in June and 2.6 million in the same month last year, as the labor force shrank.

Year to date, the unemployment averaged 4.6%, lower than the 5.4% average a year ago.

PSA data also showed job quality deteriorated as the underemployment rate went up to 15.9% in July from 12% in June and 13.8% in July last year.

This is equivalent to 7.10 million underemployed Filipinos in July, higher than the 5.88 million in June and the 6.54 million recorded a year ago.

The 15.9% underemployment rate is the highest in 20 months or since the 16.6% in November 2021, PSA Undersecretary and National Statistician Claire Dennis S. Mapa said during the press conference.

“Invisible underemployment rose, which means more Filipinos are working 40 hours or more already, but they want to work more hours for additional income, or they want another job with higher pay,” he added.

Meanwhile, the employment rate dropped to 95.2% in July from 95.5% in the previous month, but higher than the 94.8% in the same month a year ago.

In absolute figures, 44.63 million Filipinos had jobs in July, down from the 48.84 million in the previous month. However, this is higher than the 47.39 million employed persons in July last year.

PSA data also showed the labor force size decreased by 4.27 million to 46.90 million in July from 51.17 million in June.

This put the country’s labor force participation rate (LFPR) at 60.1%, lower than the 66.1% and 65.2% in June and July 2021, respectively.

Analysts said the uptick in the jobless rate can be attributed to slower economic activity.

In an e-mail, ING Bank N.V. Manila senior economist Nicholas Antonio T. Mapa said that it was not surprising to see employment figures slip as high interest rates continue to dampen economic activity.

“A portion of the household may have left the labor force to accompany the kids back home. Supporting this is the fact that saw a steep decrease in those who are self-employed or who are unpaid family workers, jobs that are mostly associated with the informal sector,” HSBC economist for Association of Southeast Asian Nations (ASEAN) Aris Dacanay said

Average hours worked in a week rose to 42.3 hours in July from 40 hours in June, and 40.5 hours from a year ago.

The services sector remained the largest employer with 59.4% share, followed by agriculture with 21.5% and industry with 19%.

On a monthly basis, job losses were highest in the following industries: agriculture and forestry (8.14 million in July from 10.45 million in June), wholesale and retail trade, repair of motor vehicles and motorcycles (8.68 million from 10.08 million), and public administration and defense, compulsory social security (2.63 million from 2.99 million).

“The entire government remains committed to improving the business climate in the country to attract more investments, which will lead to the creation of high-quality and high-paying jobs,” said National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan in a statement.

However, Sentro ng mga Nagkakaisa at Progresibong Manggagawa (SENTRO) Secretary-General Josua T. Mata said in a Viber message that elevated inflation may hinder job creation for the rest of the year.

“It will be more challenging to increase employment in the next months because of inflationary pressures. What the government can do is to maintain a strong stance on fiscal policy, make it more aggressive, if possible,” he said.

Mr. Mata said the government should introduce a robust public employment program that would directly generate jobs, like climate jobs.

“Climate jobs are those that would directly lower the carbon emission of the country. Examples are: developing renewable energy including manufacturing solar panels and turbines; coastal and riverine rehabilitation; serious reforestation; etc.,” he said.

HSBC’s Mr. Dacanay said that the government’s commitment to ramp up spending in the second half may improve employment numbers.

“Furthermore, the size of the labor force should increase once schooling begins as household members can return back to work to help make ends meet amid elevated inflation,” he said.

The April LFS was conducted from July 8 to 31, with a total of 170,859 sample households.

#Philippine #jobless #underemployment #rates #jump #July

Ruling on Makati-Taguig case hits Philippine Infradev subway project

Ruling on Makati-Taguig case hits Philippine Infradev subway project

PHILIPPINE Infradev Holdings, Inc. said the alignment of the planned $3.7-billion Makati City subway is no longer feasible after the recent decision of the Supreme Court (SC) mandating some areas covered by the project to be under Taguig City’s jurisdiction. 

“Under the joint venture (JV) agreement executed between the Makati City government and the company, the depot and a few stations of the Makati City subway system will be in the affected areas. Also, the alignment of the subway will no longer be feasible,” Philippine Infradev said in a stock exchange disclosure on Wednesday.

Philippine Infradev said that it sent an intent notice to the Makati City government to propose discussions after the change in law with the SC decision.

“Please be informed that pursuant to the recent SC decision, some areas previously within the jurisdiction of Makati City were found to be within the jurisdiction of Taguig City instead,” the company said.

“We will advise the Philippine Stock Exchange and the Securities and Exchange Commission for any further material developments on the matter,” it added.

In October 2018, the Makati City government awarded the project to Philippine Infradev, followed by the project’s groundbreaking ceremony in December 2018. 

The SC previously ruled that Fort Bonifacio and the Enlisted Men’s Barrios or the so-called “EMBO” barangays are under the jurisdiction of Taguig City.

The 10-kilometer project, which has 10 stations, was projected to be fully operational by 2025. It aims to link Ayala Ave. to the area of Ospital ng Makati through about a 15-minute trip.

In a separate statement, transport advocacy network The Passenger Forum (TPF) said the Taguig City government should be included in the JV between the Makati City government and Philippine Infradev.

“Commuters are really looking forward to having a subway in the heart of the busiest district in the country. If this requires including Taguig into the project, so be it. If this necessitates another JVA (joint venture agreement) with Taguig, Infradev should do it and do it fast,” TPF Convener Primo V. Morillo said.

“Infradev’s disclosure mentions something about their intent to start discussions with the LGU (local government unit) of Makati in light of the SC decision to grant some former Makati territories to Taguig City. We hope that they will find a workable solution as this is a very important mass transportation project and about 700,000 passengers are expected to ride and benefit from this subway on a daily basis,” he added.

According to Mr. Morillo, negotiating with the Taguig City government also opens the possibility of an expansion to BGC.

“Persuading Taguig to be part of this project is a crucial task for Infradev and expanding into BGC may just do the job. In our view, it may even push the daily ridership closer to a million commuters making it more efficient and helpful in our dreams to solve Metro Manila’s transport woes. We appeal to the good mayors of Makati and Taguig to cooperate for the sake of the commuting public and the nation,” Mr. Morillo said.

Mr. Morillo added that the Transportation department or the Metro Manila Development Authority should take over on the government side if the cities of Makati and Taguig will not “cooperate.”

“This is another way to save the project and it could even make the project better as it can go beyond the boundaries of those two cities,” Mr. Morillo said.

BusinessWorld sought the comment of a representative from the Makati City government but had not received a response as of the press deadline.

Shares of Philippine Infradev at the local bourse dropped six centavos or 10.34% on Wednesday to close at 52 centavos apiece. — Revin Mikhael D. Ochave

#Ruling #MakatiTaguig #case #hits #Philippine #Infradev #subway #project

Philippine shares rise further on increased buying

Philippine shares rise further on increased buying

PHILIPPINE SHARES continued to climb on Wednesday amid increased buying and as the market awaits the release of US data that could affect the next move of the US Federal Reserve.

The Philippine Stock Exchange index (PSEi) rose by 16.69 points or 0.26% to end at 6,241.69 on Wednesday, while the broader all shares index went up by 8.11 points or 0.24% to close at 3,368.25.

“Investors are slowly buying into the market as we see buying pressure at this level. It’s not that significant yet due to the low value turnover as compared to months before,” Mercantile Securities Corp. Head Trader Jeff Radley C. See said.

Value turnover went up to P3.84 billion on Wednesday with 459.94 million shares changing hands from the P3.41 billion with 437.48 million issues seen on Tuesday.

“Philippine shares still managed to eke out modest gains despite rising oil prices after Saudi Arabia and Russia extended their voluntary supply cuts… On Wednesday, investors await the release of the Beige book, as well as economic data releases on the US trade deficit and services industry,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Saudi Arabia and Russia on Tuesday said they would extend voluntary oil cuts to the end of the year, despite a rally in the oil market and analyst expectations of tight supply in the fourth quarter, Reuters reported.

Oil prices rose sharply following the news, with Brent rising above $90 a barrel for the first time since November, despite steady increases in Iranian and Venezuelan oil exports as the market believes the United States is not enforcing sanctions as stringently as in previous years.

The Saudi and Russian voluntary cuts are on top of the April cut agreed by several OPEC+ (Organization of the Petroleum Exporting Countries and its allies) producers, which extends to the end of 2024.

Mr. See added that the market is monitoring Metro Pacific Investments Corp.’s (MPIC) delisting plans.

Most sectoral indices went up on Wednesday. Holding firms rose by 42.83 points or 0.71% to 6,027.28; services gained 6.29 points or 0.41% to end at 1,517.51; industrials went up by 15.02 points or 0.17% to 8,834.67; and financials climbed by 1.17 points or 0.06% to 1,820.

Meanwhile, mining and oil fell by 109.85 points or 1.07% to 10,136.06 and property declined by 8.52 points or 0.33% to 2,572.49.

Decliners outnumbered advancers, 95 to 91, while 40 names closed unchanged.

Net foreign selling declined to P663.89 million on Wednesday from P669.21 million on Tuesday.

MPIC is one of the three key Philippine units of Hong Kong-based First Pacific, the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority share in BusinessWorld through the Philippine Star Group, which it controls. — SJT with Reuters

#Philippine #shares #rise #increased #buying

Philippine school opening gives top mall operator sales lift

Philippine school opening gives top mall operator sales lift

Top Philippine mall operator SM Prime Holdings Inc.’s revenue from its malls in the country may exceed P16.1 billion ($283 million) in the third quarter as school openings boost consumer spending in restaurants and shops, according to Steven Tan, president of the company’s unit SM Supermalls.

The third-quarter is so far “turning out better than the first quarter and there’s a good chance it will even be better than our second quarter,” Mr. Tan said. SM Prime booked P13 billion and P16.1 billion in rental revenue from its malls in the country in the first quarter and second quarter, respectively.

“A lot of sales are driven by what students need,” Mr. Tan said in an interview on the sidelines of an event on Monday. “The third quarter so far is our biggest surprise because normally it’s a lean season,” he added. Schools resumed classes for the year in the Southeast Asian nation last month.

A positive revenue outlook at SM Prime’s SM Supermalls unit could help perk up sentiment toward the Philippine consumer sector after online broker COL Financial said companies mostly performed below expectations in the second quarter due to “normalizing” demand and higher operating costs.

Shares of SM Prime rose as much as 2% in Manila, heading for the third gain in four days. The stock is down about 15% this year, compared with a drop of some 5% in the Philippine Stock Exchange Index.

SM Prime reported a 49% increase in second-quarter net income with mall revenue driven by sustained tenant sales and foot traffic. Despite elevated inflation, Mr. Tan said restaurants are still “‘doing well,” while there is “some” pullback on high fashion and high-end products as many consumers are watchful of non-discretionary spending. — Bloomberg

#Philippine #school #opening #top #mall #operator #sales #lift

Digitalization to boost Philippine banking growth

Digitalization to boost Philippine banking growth

THE continued adoption of digitalization and open finance in the Philippine banking industry is expected to transform the delivery of financial services, enhance lenders’ revenue-generation capabilities and boost economic growth.

Digitalization in the sector was accelerated when banks were forced to find new ways of delivering financial services to the public amid the mobility restrictions imposed at the height of the coronavirus pandemic, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said.

“The increased digital transformation of BSP Supervised Financial Institutions (BSFIs) and the financial consumers’ growing preference for digital payments and financial services brought about tremendous gains in terms of BSP’s advocacy on financial inclusion and digital payments transformation roadmap,” she said in a Viber message.   

One of the central bank’s priorities is to ensure the delivery of payment solutions aligned with consumers’ needs, she said, and digitalization has enabled increased efficiency, stability and confidence in online payments.   

“As technological innovations become mainstream in financial services, financial consumers can avail of accessible, affordable and convenient digital financial services,” Ms. Fonacier said. “To further cement this positive development, the BSP implemented regulatory and supervisory frameworks covering digital banking, open finance and regulatory sandbox, among others.”

The BSP wants 50% of retail payments done digitally and to onboard 70% of adult Filipinos into the formal financial system by the end of this year.   

Latest data from the central bank showed the share of digital payments in the total volume of retail transactions in the country rose to 42.1% in 2022 from 30.3% in 2021. 

Merchant payments, peer-to-peer remittances and business transactions of salaries and wages were the key contributors to the increase in digital payments.

Meanwhile, about 22 million Filipinos gained access to formal financial accounts between 2019 and 2021, bringing the country’s banked population to about 56% of adults in 2021, up from just 29% in 2019.   

The increase was driven by faster growth in digital payments, the central bank earlier said, as 36% of all Filipinos had e-money accounts in 2021, up from the 8% share in 2019.

However, the Philippine central bank is also aware of the risks associated with digitalization, Ms. Fonacier said, including cyberattacks.

“Thus, the BSP employed various regulatory and supervisory responses to manage such risks,” she said, adding that they issued BSP Circular No. 1140 to mandate institutions to adopt fraud management systems to address increased cybercrime incidents.

The circular issued in March 2022 amended risk management regulations to help strengthen cybersecurity and minimize losses from online fraud and illicit activities.

The BSP has also issued several memoranda on application programming interface (API) security, security of retail electronic payments and financial services, and e-mail security to address emerging threats that affect BSFIs, Ms. Fonacier said.   

Amid the rapid digitalization of the sector, banks and financial institutions are tweaking their business and operational models to keep up with “new normal,” she said.

“BSFIs are increasingly migrating to the cloud to address capacity demands and scalability. We’ve also noted growing interest in the areas of artificial intelligence (AI), including generative AI such as ChatGPT, digital marketplace and open finance, among others,” she said.   

The BSP launched the Open Finance PH Pilot in partnership with the World Bank and the International Finance Corp. The initiative aims to build financial profiles and credit histories for unbanked Filipinos.

The pilot is a voluntary pledge of financial institutions to co-develop an interconnected ecosystem that would allow consumers to take more control over their financial data and to use various financial products and services from different providers.

“Moving forward, we still see a lot of growth opportunities to deepen digital innovation and transformation in financial services delivery, to capture or retain customer base and maintain competitiveness while enhancing revenue-generation capabilities,” Ms. Fonacier said.

“Nonetheless, the BSP and the industry players must continue to support the digital expansion by making sure that technologies and systems remain safe, robust, accessible and resilient against cyber and IT related risks,” she added.   

Using Threat Intelligence technology will help financial institutions strengthen cybersecurity, Siang Tiong Yeo, general manager for Southeast Asia at Kaspersky, said in an e-mail.

He added this technology can help allow internal cybersecurity departments to focus on objectives with higher priorities.   

“Also, having a Managed Detection and Response solution that allows a cybersecurity team to employ the help of external experts to detect and stop complex attacks on company infrastructure at an early stage would be a great defensive measure,” he said.

Mr. Yeo added that financial data sharing and open banking initiatives are not new concepts, with Singapore being among the early adopters in Southeast Asia.   

“In a study in 2022, 85% of professionals in Singapore agree that open finance is giving consumers access to a greater range of financial services,” he said.

“Additionally, 76% agreed that open finance has the potential to bring about fairer and more equal financial services, while 90% agreed that open finance is already having a positive impact on the industry and making it more collaborative.”

However, data and third-party security should be fully covered in any data-sharing business model, especially in the financial industry.   

“As there are potential opportunities for growth in the industry for both players and consumers with the adoption of open banking, our experts at Kaspersky are predicting that this may lead to more opportunities for cyberattacks,” Mr. Yeo said.

He said open banking is vulnerable to risks such as financial fraud and identity theft.

“We also predict that the continued adoption of open banking systems will result in API abuses shifting from an infrequent to the most frequent attack vector, resulting in data breaches for enterprise web applications,” he said.   

Thus, Kaspersky said banks should adopt a unified cybersecurity approach with process-based security implementation, employee and user/consumer awareness and education, and technologies created specifically for the industry.

The further adoption of digital platforms can boost the Philippines’ gross domestic product (GDP) if done in a manner that provides equitable access to the internet access and digital services, Swarup Gupta, industry manager at the Economist Intelligence Unit, said in an e-mail.

“Digital transformation of enterprises and governance processes has the potential to substantially boost GDP, and this is why the Marcos administration has rolled out several initiatives in this area,” Mr. Gupta said.

“A major positive is the fact that, according to recent statistics, the Philippines has some of the best internet speeds in the world, which is a crucial factor when it comes to aiding the process of digital transformation,” he said.   

However, digitalization also makes data vulnerable to theft and other illicit activities if not monitored effectively.   

“Late last year, the BSP launched a regulatory and supervisory solution in order to lighten the burden of regulatory compliance while automating the central bank’s supervisory role on cybersecurity,” Mr. Gupta said.   

“This solution catered to 150 supervised financial enterprises as of end 2022 and will soon be expanded to 600,” he said.   

Despite having a young population and a relatively high internet penetration rate, the Philippines faces multiple challenges to digitalization, Mr. Gupta said.   

“Philippine banks have to launch and persevere with services which can cater to a population which remains relatively underbanked apart from being less fortunate economically,” he said.   

Based on the central bank data, 34.3 million adults remained unbanked in the country. Farmers and agriculture workers were the least banked among all types of workers, with 73% having no accounts, the highest financial exclusion level seen in 2021.

Other segments that had a high percentage of unbanked adults were workers for private households (48%) and self-employed individuals (45%). Non-working adults without accounts stood at 52%, equivalent to 15.6 million adults. 

Still, the outlook for digitalization and open banking in the Philippines remains bright, Mr. Gupta said.   

“The opportunities are numerous in terms of a spurt in financial innovation, leading to higher economic growth, and the evolution of personalized products and services to cater to specific need sets,” he said.

“Risks include an increasing prevalence of cybercrime and the consequent need for regulators to strike a balance between helping to foster innovation and protecting customers,” he added. — Keisha B. Ta-asan

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