鈥淎 substantial portion of this funding will go to Bonds.PH to expand our capabilities there, to invest in the platform and make sure that it can continue to grow and service the bond market,鈥� Philippine Digital Asset Exchange (PDAX) Founder and Chief Executive Officer Nichel O. Gaba said at a briefing on Tuesday.

Bonds.PH was launched in July 2020, which allowed the government to sell retail Treasury bonds through a blockchain-enabled platform. It was launched by UnionBank of the Philippines, Inc. in partnership with PDAX.

The funding round was led by a UK-based venture capital firm, joined by Hong Kong-based BC Group. Other existing investors have also increased their investments in PDAX, including Beenext Ventures, CMT Digital, Ripple Labs, and Aboitiz-led UBX.

鈥淒igital asset adoption and regulation continues at a rapid pace across Asia. As a licensed operator, PDAX is unique in the market and will continue to grow its leadership position and market share in the Philippines as end-users continue to migrate to trusted, regulated players,鈥� a representative from BC Group said.

Mr. Gaba said part of the proceeds will also be used for their team expansion and to support their working capital.

Moving forward, PDAX eyes to offer more investment options and features on their platforms. The firm is also looking to bring their services to overseas Filipino workers as well.

PDAX currently has about 500,000 users, Mr. Gaba said. 鈥淢ost of those users are in the cryptocurrency exchange, just because of how much cryptocurrency trading has gone mainstream over the past couple of years,鈥� he said.

Mr. Gaba said their platform complies with the requirement of regulatory bodies such as the Bangko Sentral ng Pilipinas and the Anti-Money Laundering Council, adding exchanges are now better equipped to flag suspicious activities.

鈥淸This] means that we have to onboard our clients in the same way that banks take on new clients. We have to perform Know Your Customer procedures up to the same standard. And we also have to employ new tools for transaction monitoring,鈥� Mr. Gaba said. 鈥� L.W.T. Noble

The future is digital. That much is evident by how much everyday life has been dominated by online connectivity, particularly during the COVID-19 pandemic. Even before, the world has been at the cusp of what was dubbed 鈥榯he Fourth Industrial Revolution鈥�, a digital revolution which sees the convergence of the physical, digital, and ecological worlds.

As the World Economic Forum puts it, 鈥淔or some time now, we have been in a new stage of transformation where corporations and countries are focused on equipping themselves with advanced technologies and new business models in order to stay relevant and competitive in a fast-changing world.鈥�

In that light, the organization identified COVID-19 as one of the most formidable challenges in recent history to governments, businesses, and society, so much that it is considered by many to be 鈥榯he ultimate tipping point for the 21^st 肠别苍迟耻谤测.鈥�

鈥淭he pandemic is a wake-up call for companies to have a plan to deal with disruptions to ensure business continuity. It is also a watershed moment that will signal the fast-track acceleration process for digitization throughout society,鈥� the World Economic Forum said.

How should organizations devise such a plan? And what does it actually look like for Filipino companies and enterprises?

The 大象传媒 Virtual Economic Forum 2021 Special Edition aimed to answer such questions by gathering experts like Mark Mulingbayan, chief sustainability officer of Manila Water Co.; and Denis Hew, director of the Asia-Pacific Economic Cooperation鈥檚 Policy Support Unit, for a Fireside Chat.

Mr. Mulingbayan, who talked about 鈥淏uilding Brands through Sustainability and Purpose鈥�, pointed out that a future much worse than COVID-19 could be looming on the horizon, should the world fail to mitigate climate change.

Companies have a social responsibility to champion sustainability before the worst can happen. To this end, Mr. Mulingbayan said that Manila Water has been pushing forward its sustainability initiatives since the beginning, and it has shaped the core of how the company has grown over the years.

鈥淲e need to be consistent with our shared value story. That鈥檚 the heart of it all. Our sustainability framework has not changed. It鈥檚 still the same. But the nuances have been developing through the years. And it鈥檚 exciting now that we are moving on to setting new targets,鈥� he said.

Manila Water鈥檚 sustainability framework, he discussed, focuses on key areas, the first of which is centered around servicing the Filipino community. He said that by expanding their services to as many people as possible, even the poor and marginalized communities can be more resilient towards natural disasters.

Another focus area is environmental stewardship. 鈥淚nterestingly, our relationship with the environment is one based on reciprocity. We depend on ecosystem services to provide us raw water, but we also do services to the ecosystem by treating wastewater,鈥� he said.

Most importantly, Mr. Mulingbayan said, they focus on their own employees.

鈥淚f we are to grow in the future, we have to have a team of capable and competent employees who are passionate about the work that we do. It鈥檚 common for all companies to identify talent management as a core sustainability issue,鈥� he said.

鈥淲e communicate with our employees and ensure they know their contribution to the corporate targets, because that is always aligned with our shared value story. At the same time, we try to engage them with our sustainability story. We believe that getting them on the ground and experiencing the impact of our work is the better way to go about it,鈥� he added.

For companies looking to start on their sustainability journey, Mr. Mulingbayan advised looking at the United Nations Sustainable Development Goals and finding out which of the goals are aligned with their business. What is most important is authenticity.

鈥淎 company needs to be aligned with what the society needs, and it needs to be relevant. Sustainability work can be a lot of things, or you can do a few things that really matter. A company needs to identify the issues with their stakeholders. A company cannot do it alone,鈥� he said.

Building on that note, Mr. Hew, who discussed 鈥淗elping SMEs Survive and Thrive through Digital Tools: An APEC Perspective,鈥� explored how smaller businesses, particularly micro, small, and medium enterprises (MSMEs) can utilize the tools available during this digital revolution to recover from the effects of the pandemic and thrive in a post-COVID-19 world.

鈥淥ne of the main drivers that accelerated the pace of digitalization for SMEs is COVID-19, which unfortunately continues onto this year. Companies have adopted digital tools to stay in business essentially. It helps them keep afloat during this difficult time,鈥� Mr. Hew said.

鈥淪ome of these digital tools have become extremely critical to business, whether it鈥檚 digital payments, fintech financing, logistics services, etc. It provides a kind of lifeline for these businesses to be able to continue operating.鈥�

Unfortunately, the rapid transition has created unforeseen challenges that many enterprises are not ready for.

鈥淐ritical challenges like data privacy, cybercrime, some of these things have to be taken into account. Unfortunately, SMEs have become the prime target for cyberattacks because they lack the resources to combat them,鈥� he said.

Mr. Hew said that APEC鈥檚 MSME working group has launched initiatives to support MSMEs in the region, including an online repository of information on trade regulations and training and resources for any business.

Among these is the multi-year The Boracay Action Agenda to Globalize MSMEs program, which aims to prepare the region to take advantage of the new opportunities available to them and to allow these enterprises to more significantly participate in global trade.

The Action Agenda aims to build on APEC鈥檚 extensive work on regional economic integration and ensure that efforts are relevant and responsive to MSMEs鈥� needs. To promote the internationalization of MSMEs and integrate them into global value chains, the program will seek to address barriers to trade and investment that disproportionately impact MSMEs in comparison to larger businesses, reduce and eliminate tariffs and non-tariff barriers in the region, and establish a more trade facilitating environment in alignment with the WTO Trade Facilitation Agreement.

鈥淥ne important point to recognize is that COVID-19 pandemic has increased the inequalities that we have seen before. It is crucial for organizations like APEC to try to address those gaps, meaning better access to education, training that includes digital literacy, as well as better access to healthcare and other types of infrastructure. That is crucial,鈥� he said.

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By Bjorn Biel M. Beltran, Special Features Writer

Digitalization has become the life-saving buoy against the tide of the COVID-19 pandemic for the business world, keeping companies operational even as quarantine measures restricting face-to-face interactions have shut down most offices everywhere.

In fact, more companies are realizing the potential of the digital world towards enhancing their capabilities. In a recent report, the International Data Corporation said that it expects global direct digital transformation investment to grow at a compound annual growth rate of 15.5% from 2020 to 2023, to approach $6.8 trillion as companies build on existing strategies and investments, becoming digital-at-scale future enterprises.

What does this entail for a country like the Philippines?

The recently-concluded 大象传媒 Virtual Economic Forum 2021 Special Edition gathered three experts to illustrate what a digitally-capable future looks like for the country, and the steps needed before it can achieve it. In the first of such Fireside Chats, Karrie C. Ilagan, managing director Cisco Philippines, discussed the importance of digital resilience in a post-COVID-19 world.

鈥淭his pandemic has changed the world forever. The digital transformation that is happening now has dramatically altered how we work and live. It has changed the role of many businesses because the needs of their customers are continuing to evolve rapidly. There has never been more urgency for organizations to deliver digital-first services,鈥� Ms. Ilagan said.

She added, 鈥淒igital resilience is about being ready for change and disruption. It鈥檚 about being ready to adapt and find opportunities in rapidly shifting environments.鈥�

Ms. Ilagan pointed out the importance of building a solid digital infrastructure for a company to find and take advantage of opportunities provided by constantly evolving technologies, whether it is by augmenting operations via digital networks or utilizing cloud services.

To this, such an infrastructure must have security and privacy as its core.

鈥淐ybersecurity is at the core of the success of every digital effort,鈥� she pointed out. 鈥淚 don鈥檛 think anybody can successfully be digitally transformed unless they take to heart cybersecurity.鈥�

Because the scope of the digital world has expanded to encompass even sectors like education, Ms. Ilagan said that there is an urgent need now to simplify systems, placing a strong focus on creating better cybersecurity. She called on organizations, industry leaders, and government officials to educate the public about data security and privacy to create a more digitally resilient society.

Cisco鈥檚 UGNAYAN 2030 program is one such effort aimed at launching key digitization initiatives to help the economy, create jobs, and promote innovation and next-generation skills development across the private and public sectors.

To give the government鈥檚 perspective on the country鈥檚 digitalization journey, Rosemarie G. Edillon, undersecretary for policy and planning of the National Economic and Development Authority, discussed the long process of digitalizing the Philippine economy.

Ms. Edillon was quick to point out that the demand for and the usage of digitalization is not as widespread as it appears in Metro Manila.

鈥淚f you look at all across the country, that is not the case. That may be true here in NCR (National Capital Region), but we found that there is very low usage in digital payments and e-commerce outside the capital. Even those putting their products online, they do not allow digital payments and instead prefer cash-on-delivery,鈥� Ms. Edillon said.

鈥淭he first thing we need to do is increase this demand, and at the same time improve our digital infrastructure,鈥� she said.

She pointed out that around 64% of barangays in the country do not have telecommunication towers to access the Internet, while 88% of barangays lack free Wi-Fi zones for their residents and 70% of barangays do not have fiber optic cables installed. The huge disparity between these areas and more urbanized areas are creating an increasingly wider digital divide that separates those who can take advantage of digital transformation and those who cannot.

In this effort, both the public and private sectors have roles to play.

鈥淲e鈥檝e been consistent that the main driver of the economy is the private sector and the role of government is to steer the economic triggers towards the direction where we want it to go,鈥� she said.

The government, for its part, needs to lay down the policy framework and code of conduct for the players participating in the digital economy. This includes promoting technological adoption among Filipinos, educating them on cybersecurity and digital literacy, and bridging the digital divide by streamlining the process of constructing cell towers.

Ensuring consumer protection during online transactions, making digital transformation inclusive, and trying to bring down the cost of connectivity, she said, are policies and programs that the government can enact to take the country further towards a digital economy.

Mamerto E. Tangonan, deputy governor for payments and currency management sector at the Bangko Sentral ng Pilipinas, discussed this further as he talked about the central bank鈥檚 Digital Payments Transformation Roadmap 2020-2023.

Mr. Tangonan said that the volume of digital payments in the Philippines has increased from a 25 million monthly average with a value of $5.92 billion in 2013 to 782 million in the first half of 2020, amounting to $29 billion.

The 2019 BSP Financial Inclusion survey found that 69% of adults own a mobile phone and about 53% use the Internet. Meanwhile, only 12% of mobile phone owners and only 9% of Internet users use these technologies for financial transactions. This is a huge opportunity for financial institutions to reach unbanked Filipinos.

Mr. Tangonan said that the roadmap is aimed at creating financial inclusion through the development of an accessible and secure digital payments framework by building the necessary digital finance infrastructure and digital governance and standards. Future payments digitalization initiatives will include PESONet multiple batch settlement, bills payments, request to pay, and direct debit.

鈥淒igital technology can massively promote financial inclusion, but there is a need to deliberately and purposefully harness this potential by ensuring that anyone can readily open and use an account through digital channels for various financial transactions,鈥� he said.

Mr. Tangonan added, 鈥淭his roadmap contributes to [central bank] Governor Diokno鈥檚 strategic direction of bringing the BSP closer to the Filipino people.鈥�

Shopping becomes expanded and more convenient with the growth of digital platforms. Nevertheless, many consumers still want the experience of physically browsing and buying in brick-and-mortar stores. Witnessing the consumers鈥� preference on using various shopping platforms, several retailers transform their businesses through an omni-channel strategy.

A panel discussion on the second day of 大象传媒 Virtual Economic Forum 2021 Special Edition addressed how retailers can effectively enhance the omni-channel experience of the consumers, as advised by experts from the marketing, retail, telecom, and banking industries.

Combining physical and digital for consumers

Vicky V. Abad, country manager of Ipsos Philippines, talked about consumer trends relating to omni-channel and why marketers must focus on them.

鈥淐onsumers鈥� mindsets, behavior, and priorities are shifting,鈥� Ms. Abad said.聽鈥淥ne year of staying indoors and limited mobility altered the way consumers shop and spend.鈥�

According to Ms. Abad, consumers will continue to be observant about personal safety, convenience, and speed.

The need for security of supplies; and the demand for entertainment, celebration, communication, and advocacy will also stay relevant among consumers.

Therefore, marketers should consider these to be constant even after the pandemic, Ms. Abad said. 鈥淐onsumers are going to look for ways to meet these needs and wants [whether] offline or digital; so we need to be mindful of that.鈥�

Recommending ways to apply omni-channel solutions in their business, Philippine Retailers Association President and Wilcon Depot, Inc. Senior Executive Vice-President and Chief Operating Officer Rosemarie Bosch-Ong stressed that retailers must combine both physical and digital.

鈥淵ou need your customers to be able to find you online,鈥� Ms. Ong said. 鈥淓ven after COVID-19, consumers will continue to buy online.鈥�

Brick-and-mortar stores, meanwhile, 鈥渨ill have to evolve to keep up with the digital store so that retailers can provide a seamless omni-channel experience for their customers,鈥� she said.

鈥淲e need to take advantage of both online and offline [platforms],鈥� Ms. Ong advised. 鈥淭hink of it as an added revenue stream and business continuity plan when your consumers could access your products in so many channels.鈥�

Consistency is key, Ms. Ong said. 鈥淐ustomers should be able to find the same quality of experience and accessibility of service in all channels. There should be an interaction, an interface,鈥� she added.

She also emphasized the need for retailers to connect their physical and online stores so that they can fulfill sales efficiently.

鈥淲ith our online and brick-and-mortar infrastructures interacting hand in hand, we will see efficiency in operations and convenience in our customers,鈥� Ms. Ong said.

Thus, applying omni-channel in the retail business, according to Ms. Ong, is a perfect solution in adapting to the new normal and an investment that will benefit retailers in the long run.

Connectivity, payment solutions in retail

In boosting the omni-channel experience, telecommunication and financial services play a vital role.

鈥淐onnectivity has surely become a huge driving force behind businesses which have pivoted and retrofitted their operations to potentially serve the ever-changing needs of our customers,鈥� said Exequiel Delgado, president and chief executive officer of Radius Telecoms, Inc.

According to Mr. Delgado, telecommunication services become an important catalyst in business recovery and resilience.鈥� Thus, he offered advice on how retailers can maximize connectivity and digital solutions to enhance their business.

鈥淎 wired and stable Internet connection is the preferred route. Wired Internet access provides opportunities for business owners to multitask and address the increasing demands of their customers,鈥� he said.

Furthermore, in designing the network, portal, or touchpoint, Mr. Delgado said it should be highly available, highly secure, and have low latency.

He also said that digital transformation cannot happen without innovation. 鈥淵ou really have to innovate, look at your existing process to make sure that they are continuously improved.鈥�

Meanwhile, UnionBank SME Segment and Platforms Head Jaypee Soliman believes that 鈥渢he biggest contribution of banking would be activating payment channels in terms of the omni-channel experience.鈥�

Mr. Soliman said that, in the omni-channel experience, ensuring cybersecurity is a big challenge. Unifying multiple modes of payments is a also concern.

Nevertheless, he said that UnionBank is working on these. He shared that the company launched a campaign to educate their customers about security threats.

鈥淲e maximize social media and direct communications with customers, and advise them on how to really protect their bank accounts and their information from scammers,鈥� he explained.

Mr. Soliman also shared that they are building a payment gateway that will unify different modes of payment channels available.

鈥淸Unifying] all those channels into one gateway will be a very big help for SMEs, businesses, and even the consumers,鈥� he said.

鈥淲e continuously listen to our customers to the point that we involve them during the innovation process,鈥� Mr. Soliman said about UnionBank鈥檚 plans that intend to meet the demands of consumers.

鈥淲e ask our customers to walk us through their journey, the exact experience they want to have,鈥� he said.

With the various work arrangements and conditions being experienced by employees during the COVID-19 pandemic, there would be new expectations and demands towards the workplace. For some leaders from the real estate industry, the office will evolve to be hybrid 鈥� a model that gives employees the option to work from home, in the office, or even anywhere.

During a panel discussion at the second day of the 大象传媒 Virtual Economic Forum 2021 Special Edition, the speakers highlighted the priorities that organizations must consider in building a hybrid office.

Flexible work, collaborative workplace

Based on the panel discussion, the incorporation of hybridity in the workplace responds to employees’ preference for flexibility and collaboration. The work-from-home arrangement became evidently common.

Nevertheless, offices remain essential for workers, according to Elizabeth Fuller, head of growth at WeWork Southeast Asia.

Citing a global survey done by WeWork, Ms. Fuller noted that 76% of respondents (68 business leaders representing over five million employees) recognize the significance of the office for collaboration.

According to the respective surveys conducted by Salesforce and WeWork, Ms. Fuller said that 90% of millennials prioritize their freedom to work [from anywhere they want] over their salary. She added that the generation who prefers to go to the office the most is the Gen Z.

鈥淚 think it鈥檚 important what your office is like 鈥� the environment, access, and flexibility you have,鈥� she stressed.

Ms. Fuller also said that 鈥渃ompanies will be hungry for flexible and scalable solutions to support their growth in both medium and long term.鈥�

鈥淲e鈥檙e in an uncertain and evolving economic landscape, and the only certainty is flexibility,鈥� Ms. Fuller said.

Meanwhile, Michael McCullough, managing director of KMC Savills, Inc., said that due to the pandemic, there is a clear shift in office demand.

He also observed that the strict lockdown in the country led to difficult working conditions. Operating remotely caused challenges in managing routine, finding motivation, and having relaxation.

鈥淭he hybrid workplace 鈥� or the office of the future 鈥� is going to be all about the employee experience,鈥� Mr. McCullough said.

He noted that companies should provide flexibility and spaces for collaboration in establishing hybridity at work.

鈥淔lexible workspaces have enabled businesses to operate and retain important personnel throughout the pandemic,鈥� he said.

The KMC executive also shared that the benefit of being allowed to work from home became a standard in recruitment. 鈥淗aving a flexible schedule is now the bare minimum a company will be able to offer their employees,鈥� he said.

He also believes that the office would not disappear. 鈥淚t鈥檚 definitely going to be a place to collaborate,鈥� he said.

Sharing the same insight is Christophe Vicic, country manager of JLL Philippines. “The office will be a social hub and a place for collaboration,” he said.

He noted that there is a quick and drastic shift towards the future office, which is the work-from-anywhere ecosystem.

鈥淸The future office is] not about the physical office location, even it鈥檚 work from anywhere. It鈥檚 about the human experience, the employee experience, more collaboration space, amenities, more social learning, and fewer individual spaces,鈥� he explained.

Mr. Vicic said that real estate providers, real estate advisors, and organizations must invest in the future workplace.

鈥淥rganizations need to redefine the new purpose of the workplace, embrace maximum flexibility, and shift workplace allocation to enable new ways of working,鈥� he said.

He added that hybrid work is here to stay. 鈥淭he principal reason is it鈥檚 about the people, the employees who have clearly tasted a different way of working.鈥�

Safe and healthy workspaces

Carol Mills, president of Ayala Land Offices, Inc. and AREIT, Inc., agrees that the future office is about flexibility. Yet, she emphasized the importance of safety and health in the workplace.

“In whatever form, location, or delivery our clients choose, they can be assured that we are very mindful of safety in our properties,鈥� Ms. Mills said. 鈥淥ffice buildings have to be cleaner. [We are] more deliberate in providing clean and healthy environment for the occupants.鈥�

She added that they also go beyond physical safety to total well-being. 鈥淥ur office buildings are located within Ayala Land mixed-use developments where one can [experience] that harmonious live, work, play environment within minutes of reach.鈥�

Ms. Mills stressed that working is not just about getting things done or jumping from one virtual meeting to another. 鈥淓mployees need a community where they can harness their talents and will allow them to be inspired and take part in the richness of life.鈥�

鈥淥ur goal is to offer that complete ecosystem, cultivate opportunities, and provide a healthy state of total well-being for the working population,鈥� she added.

As the push towards a digital economy gets accelerated, with the increased use of and preference for digital tools due to the COVID-19 pandemic, several related issues cannot be overlooked. Among them is the 鈥渄igital divide鈥� which simply indicates the lack of equity in access to digital tools such as the Internet and digital-enabled services such as electronic payments and online learning.

The Philippines Digital Economy Report 2020 of the National Economic Development Authority and the World Bank highlighted that the Philippines still experiences 鈥渁 very significant digital divide鈥�, with more than half of total households in the country lacking Internet access and fixed and mobile Internet penetration in the Philippines faring relatively low, compared to its Southeast Asian neighbors. This divide is seen to contribute to unequal access to services that are delivered via the Internet.

During a panel discussion in the 大象传媒 Virtual Economic Forum 2021 Special Edition, two heads from leading digital companies and an economist recognized the need to address this divide, while sharing their thoughts on how it can be done.

Sharing from the digital payments perspective, Shailesh Baidwan, president of PayMaya Philippines, noted that the advent of digital economy allows nearly everyone to participate in the formal economy. He also observed that as the push for digital payments is now taking a 鈥榥atural momentum鈥� 鈥� with various sectors of society further appreciating digital payments 鈥� the opportunity opens to include more Filipinos into the financial system.

鈥淔or fintechs like us working with the government, the regulators, and other players in the industry, I think this is an opportunity to narrow and break the [digital] divide with financial solutions; and to bring the unbanked, the underserved, and what I call the unhappily served into the formal system,鈥� Mr. Baidwan said.

The PayMaya executive pointed out three priorities in bridging the digital divide, namely bridging online and offline and vice versa; moving at an accelerated pace to include the unbanked sectors; and working on a bigger and deeper digital talent pool.

鈥淭he solutions need to be built on automated and digital platforms that can serve large volumes. [We should also] provide sachet-sized financial services in a cost-effective way,鈥� Mr. Baidwan said about including the unbanked.

Giving insights from a broader perspective, Kevin C. Chua, senior economist at World Bank, highlighted several barriers that are causing the digital divide. These include gaps in material access, pertaining to gadgets and network connection; gaps in skills access, referring to digital literacy and competency; gaps in usage access, having to do with the systematic use of programs, applications, content, and services; and gaps in motivational access, which refers to the trust and confidence in using technologies.

Mr. Chua further noted that there are two determinants driving the digital divide. In terms of access, income becomes the determining factor, with well-off consumers more able to afford gadgets and connectivity. In terms of digital skills, age generates the gap, with the younger population being more tech-savvy and receptive to change.

The senior economist added that while there are indications that the digital divide may be narrowing in the Philippines, including surge in the number of Internet and digital payments users, much work remains to be done. 鈥淭here鈥檚 a lot of catching up [which] will require addressing these barriers to material, skills, usage, and motivational access,鈥� he said.

Mr. Chua recommends that devices, gadgets, and connections should be made more available and affordable by mobilizing the private sector and encouraging competition.

He also stressed the need to support the young and working-age population through education and digital skills training. 鈥淲e need to encourage the young people to move beyond entertainment, gaming, and communication, into [learning] more advanced tasks, and education would be key to that,鈥� he added.

Mr. Chua also finds it important to address the gaps in motivational access by building trust and confidence in the use of technology. 鈥淭his involves strengthening cybersecurity measures, data privacy, and data protection ecosystem,鈥� he said. 鈥淚n e-commerce, we should set up a regulatory framework to protect both sellers and buyers from fraud and unscrupulous practices.鈥�

Going deeper into other aspects of addressing the digital divide, Andr茅s Ortola, country general manager of Microsoft Philippines, noted the value of activating partnerships and collaborations especially in education, with many students struggling to access quality online learning.

鈥淲e must continue building coalitions, partnerships, and initiatives to tackle this digital divide,鈥� he said, adding that public and private institutions coming together to tackle societal problems is needed to create new economies.

Mr. Ortola further stressed that the future of a digital society must be built in the pillars of trust, inclusion, growth, and security. 鈥淚t鈥檚 our responsibility as leaders to ensure inclusive access, leverage technology to reach millions of people, and empower them with the necessary skills to thrive in the digital era,鈥� he added.

He also said that while many technologies are already available, the greater challenge is driving innovation in a more pervasive way.

Among these technologies, the Microsoft executive noted the potential of cloud infrastructure to allow solutions to be deployed faster, more securely, and more broadly. 鈥淭he Philippines is an ideal country for cloud,鈥� he said. 鈥淐loud would bring this level of resiliency and service that everybody needs.鈥�

Beyond being a buzzword in the business community, digital transformation has really become a turning point for many businesses as they rose from the impacts of coronavirus disease 2019 (COVID-19).

In efforts to curb the spread of the virus, digital tools have been sought to help organizations continue operations while ensuring safety and even add flexibility and convenience among workforces. Their digital journeys, nonetheless, are in progress, with much more opportunities to maximize, pitfalls to avoid, and concerns to prioritize.

The first panel discussion held during the 大象传媒 Economic Forum 2021 Special Edition last May 26 further explored how digital transformation can build a better normal for businesses, with two experts from business strategy and consulting firms and an executive from a leading digital platform sharing their insights.

Anthony Oundjian, managing director and senior partner at Boston Consulting Group, first noted that while COVID-19 has laid bare some gaps and triggered an accelerated digitalization, digital has already been helping build the country鈥檚 economic resilience even before recovery from the pandemic has been discussed.

鈥淎 lot of the continuity that we got was [brought] by some digital tools,鈥� Mr. Oundjian said, citing the trends in remote work, electronic commerce, and online learning.

Nonetheless, the need remains to further build an environment that keeps in step with digital transformation, starting with initiatives such as the national identification system. 鈥淢ore investment in infrastructure, both from the public and the private sector, will certainly help us to be more resilient and stronger in the next crisis,鈥� he said.

Mr. Oundjian also pointed out that digitalization is imperative for economic recovery, given that consumers are behaving differently and businesses are not going back to former ways of working and engaging with customers. At the same time, digitalization opens opportunities as it transcends physical borders.

鈥淲e see people looking for talents across the world when they used to look for it locally,鈥� he explained. 鈥淚f you are a talented data scientist in the Philippines, you have fantastic opportunities working at home. If you are a startup, you immediately have a broader reach.鈥�

Mr. Oundjian also stressed that digital transformation does not start with technology, but with designing solutions to address consumers鈥� pain points. 鈥淒igital transformation starts with how we can make things easier, more intuitive for consumers or customers. The thinking needs to start there,鈥� he said.

Citing data gathered by his firm, Miko David, president and co-founder of David & Golyat, shared that there are immense opportunities for businesses in rising consumption across different online channels, particularly social platforms and e-commerce marketplaces.

At the same time, levels of competition have become more intense in terms of capturing the online market, as indicated by increased advertising in online channels.

鈥淎cross the board, this is a theme we see for the economy. There are a lot of opportunities despite gaps and missteps that are happening [among both] leaders and other incumbents,鈥� he said.

Mr. David noted that even traditional sectors have been quite good to adapt, particularly in terms of opening up more channels of communication, but the challenge to keep at pace with the accelerated push for digitalization remains among organizations.

鈥淭he biggest challenge for a lot would be translating their historical activities to these existing channels,鈥� he said. 鈥淲hen you look at the options that they should utilize for their executions on digital, it鈥檚 not always translating as well.鈥�

Mr. David added that organizations need to look into other dimensions such as their culture, structure, and strategy. He sees that such 鈥渆nablement activities鈥� can help improve employee morale and perseverance.

鈥淐ompanies who have this culture or mindset of always being in the know and staying hungry to learn, test something, or just be aware of the market, actually end up learning from their mistakes really early and implement better than what their competitors have done,鈥� he added.

Aside from highlighting how GCash has leveraged digital products amid the increased need for digital payments and transfers, Martha M. Sazon, president and CEO of Mynt (the e-wallet platform鈥檚 operator), noted the deepened appreciation for customer centricity.

鈥淏ecause of the change in the conditions that we鈥檝e seen, people are forced to reimagine the business in a way that will service the customers, in a way that will reach the customers even better,鈥� Ms. Sazon said.

The executive also stressed that as long as there are friction points in the customer industry, there will be a reason for any competitor to play. 鈥淐ustomer is king. It鈥檚 always been like that, but more and more businesses are realizing and are lazer-focused on customer experience,鈥� she said.

Ms. Sazon also noted that the current situation calls for transformative leaders who are agile and flexible.

鈥淸One has to have] a growth mindset [and a] very entrepreneurial spirit that always finds opportunities to grow and frictions to address,鈥� she continued. 鈥淸This should be] combined with empowering the organization, trying to spot that talent who can deliver and encourage collaboration among other parts of the organization.鈥�

By Adrian Paul B. Conoza, Special Features Writer

Along the journey of organizations to adapt to the changes brought by the coronavirus disease 2019 (COVID-19) pandemic, one significant course of action that is regarded as necessary towards economic recovery is digitalization. In fact, the Philippines Digital Economy Report 2020 by the World Bank and the National Economic and Development Authority revealed that an opportunity already lies for the Philippine economy to hasten its recovery and build up its resilience by further embracing digital technologies.

This discourse was continued during the special edition of the 大象传媒 Virtual Economic Forum, which was held last May 26 and 27. Themed 鈥淭he Digital Economy PH: Towards a Faster Economic Recovery鈥�, the online forum further explored the vision of a digital economy in the country and the initial steps that must be taken to realize such goal, along with underlying issues that must be resolved.

As 大象传媒 President and Chief Executive Officer (CEO) Miguel G. Belmonte shared in his opening remarks on the forum鈥檚 first day, the special edition of the forum picks up from the conversations from last year鈥檚 first 大象传媒 Virtual Economic Forum, which largely tackled digitalization. 鈥淸This year鈥檚 forum] would be a very good venue to tackle digital transformation as an urgent component in accelerating the country鈥檚 recovery and creating a stronger, more resilient, and sustainable economy,鈥� Mr. Belmonte said.

Meanwhile, Lucien C. Dy Tioco, 大象传媒鈥檚 executive vice-president, pointed out on the forum鈥檚 second day the need to fully accept and understand the changes that have recently taken place. 鈥淲e were all anticipating to move forward without really understanding what has changed, its effects, and how to effectively solve it,鈥� Mr. Dy Tioco said in his welcome address on Day 2, adding that the pandemic is teaching organizations to manage how the future should take shape by finding solutions to current problems.

The way forward

Starting off the forum with his keynote address, Fernando Zobel de Ayala, president and CEO of Ayala Corp., stressed that digital transformation, as the 鈥渢he way forward towards a resilient, progressive, and equitable country鈥�, goes beyond developing or pushing the latest technologies and so must take into consideration other factors.

鈥淢eaningful and genuine digital transformation is deeply understanding our stakeholders鈥� needs and aspirations, and integrating technology to provide them with relevant and inclusive solutions,鈥� Mr. Zobel de Ayala said.

While he observed that digitalization has made a tremendous impact on several sectors such as financial services, healthcare, and e-commerce, to name a few, Mr. Zobel de Ayala further stressed that the Philippines faces a 鈥減ersistent challenge to ensure widespread and equitable access to digital infrastructure and the Internet.鈥�

He said that a digitally developed economy should be built on reliable infrastructure, a national ID system, digital records and online access to services, and cybersecurity.

Among organizations, the Ayala Corp. president and CEO said that digital transformation should be accompanied by highly regarding the 鈥渇undamental components鈥� of such shift which are the stakeholders.

鈥淪pecifically, institutions should be deliberate in deeply understanding stakeholder pain points and aspirations. There should also be a commitment to address underserved needs, most especially the inequalities the pandemic exacerbated,鈥� he said, adding that holistic stakeholder understanding requires mining insight from both big data and small data.

Mr. Zobel de Ayala also emphasized that managing the complexities of the future of work lies in promoting greater flexibility and choice, where the main principle is to work where one is most effective for the job at hand.

The first day of the two-day forum continued with panel discussions on how digital transformation can enable a 鈥榖etter normal鈥� and how the digital divide in the country 鈥� a pressing issue in building a digital economy 鈥� should be bridged.

These were coupled with fireside chats on topics such as 鈥淏uilding the Foundation of Digital Resilience鈥�, 鈥淒igitalizing the Philippine Economy Now鈥�, as well as the Digital Payments Transformation Roadmap 2020-2023 of the Bangko Sentral ng Pilipinas.

Along the digital track

The forum鈥檚 second day took a deep dive into the trends that go along with building a digital economy, led by keynotes from Bernadette Nacario, country director of Google Philippines; and Kais Marzouki, chairman and CEO of Nestl茅 Philippines.

Discussing the topic 鈥淭he Emerging New Economy: New Skills, Jobs and Business Tools鈥�, Ms. Nacario of Google Philippines highlighted the opportunities that have opened up through digital transformation.

Citing the 鈥渆-Conomy SEA 2020鈥� report of Google, Temasek, and Bain & Company, Ms. Nacario noted that many Filipinos went online 鈥渟earching for solutions to their sudden new challenges鈥�; while e-commerce has driven significant growth in the country at 55%, largely offsetting declines in travel and transport.

The overall Philippine 鈥榚-conomy鈥�, she added, is expected to reach $28 billion in value in 2025, reaccelerating to a compounded annual growth rate of roughly 30%.

鈥淭he future is indeed bright. Yearly, our growing digital economy presents ripe opportunities for Filipinos,鈥� Ms. Nacario said.

Barriers, however, still exist. Among these include challenges around talent, which the Google Philippines country director observes as 鈥渁 key blocker that all sectors need to keep working on鈥�.

To optimize such opportunities and address such barriers, she continued, Google is committed to invest in digital skills and education, as well as to provide tools and platforms for businesses. 鈥淭ogether with our partners from the public and private sectors, we will continue closing the gap in digital opportunity,鈥� she said.

Meanwhile, in his keynote on the readiness of the Philippine economy to transition from a brown to green economy, Mr. Marzouki of Nestl茅 Philippines noted that businesses are called upon by the pandemic to reflect and to act on their collective impact on the environment by transitioning from a fossil fuel-dependent brown economy to a sustainable green economy.

鈥淚n a green economy,鈥� Mr. Marzouki explained, 鈥済rowth in employment and income are driven by public and private investments into such economic activities; infrastructure and assets that allow reduced carbon emission and pollution; enhanced energy and resource efficiency, and prevention of the loss of biodiversity and ecosystem services.鈥�

While getting to a green economy takes much more time as it involves a whole-of-society approach, Mr. Marzouki said that a 鈥渨indow of opportunity鈥� is now open 鈥渢o make brave new choices that will allow the country to grow economically within sound ecological boundaries.鈥�

Panel discussions on the second day gathered thoughts on how a hybrid mode of work is shaping today鈥檚 workplaces, as well as on how an omnichannel experience is being realized in retail.

The fireside chats gathered insights on how organizations can build their brands through sustainability and purpose, as well as on how digital tools can be utilized by micro, small, and medium enterprises for them to survive and thrive amid the global crisis.

Wilfredo G. Reyes, 大象传媒鈥檚 editor-in-chief, wrapped up the virtual forum, in his closing remarks. 鈥淭he COVID-19 crisis made us a little bit more adept at promptly improving the way we do things even if this takes a complete overhaul. We need to mesh digital more into our strategies and not to treat it as something completely separate,鈥� he said.

大象传媒 Virtual Economic Forum 2021 Special Edition was presented by 大象传媒 Corp.; with co-presenter GCash; gold sponsors Cisco, Globe, Meralco, Radius Telecoms, and San Miguel Corp.; silver sponsors Ayala Group of Companies, BPI-Philam, FWD Life Insurance, Toyota, UnionBank, and Vista Land; bronze sponsors BDO, BPI, First Gen Corp., J&T Express, Mabuhay Energy Corp., PAGCOR, PayMaya, Pacific Cross, PLDT, Smart, SGV & Co, and SM Investments Corp.; partner organizations Asia Society 鈥� Philippines, British Chamber of Commerce Philippines, French Chamber of Commerce and Industry in the Philippines, Financial Executives Institute of the Philippines, Management Association of the Philippines, Philippine Chamber of Commerce and Industry, and Philippine Franchise Association; official TV partner OneNews; and media partner The Philippine STAR.

Oftentimes, disruption is negatively defined as a disturbance or a problem that interrupts an event, activity, or process. In this day and age characterized by waves upon waves of technological advancements, digital revolution permeates everyone鈥檚 lives including how companies do their businesses.

However, disruptions can turn into great opportunities; and having this mind-set as a response to these changing times have set some businesses apart from the rest.

This had been one of the focus of the recently concluded 大象传媒 Economic Forum held last May 18 at Grand Hyatt Manila in Taguig City. In one of the afternoon sessions titled 鈥淔inding Opportunities in the Age of Disruption,鈥� Orlando B. Vea, president and CEO of Voyager Innovations; Anthony Thomas, CEO of Mynt (Globe Fintech Innovations, Inc.); Brian Cu, country head of Grab Philippines; and Miguel Cuneta, co-founder and chief community officer of Satoshi Citadel Industries (SCI), shared valuable inputs on how they were able to and continue to navigate the disruptive digital revolution to make their companies sustainable and competitive.

In his presentation, Mr. Cuneta underscored that the response to disruption is mostly unfavorable, and identifying those reactions can be advantageous.

鈥淭he initial response to disruptive technology is usually fear, doubt, or resistance. Fear because of the unknown, and resistance because we鈥檙e naturally resistant to change; and it doesn鈥檛 help that the incumbents feel threatened and fight back 鈥� trying to defend their position,鈥� Mr. Cuneta shared.

鈥淓ventually, the very disruptive technologies that people were afraid of become basic utilities. What are the examples of disruptive technologies today and how do we identify them? We actually just need to know what people are afraid of,鈥� he continued.

Mr. Cuneta added that those who dismiss disruptive technologies are usually the ones who get to be affected by it, and old industries that don鈥檛 adapt become obsolete. Moreover, the SCI co-founder also said that disruption is incessant and inevitable.

鈥淭here鈥檚 no really age of disruption; it鈥檚 really a constant process by which humanity uses technology to solve specific problems. It鈥檚 necessary for us to become a more advanced society and truly, disruptive technology is unstoppable,鈥� he shared.

Given that disruption constantly happens, all the speakers shared the same sentiment that disrupting themselves are necessary to be able to effectively navigate challenges, and make their companies resilient.

Mr. Vea said, 鈥淭oday鈥檚 disruption is tomorrow鈥檚 business as usual. That鈥檚 a fact of life. Before you鈥檙e able to disrupt, you have to disrupt yourself first.鈥�

He added that if you鈥檙e an incumbent, disruption is a 鈥淐EO thing鈥� 鈥� a decision that has to come from the very top.

Mr. Cu also shared how Grab, known as a major disruptor in the country鈥檚 transportation sector, has numerously needed to disrupt itself amid challenges such as government regulations and some negative feedback from the riding public in order to remain an agile company.

鈥淚t鈥檚 important that for every disruptor not to forget your roots, not to forget the basics of why you came into the market, and disrupt the market that you wanted to. For us it is three simple rules: safe rides, convenient rides, and fast rides. Now, we have to re-look at all the processes we have built over the last five years and again disrupt ourselves to be able to deliver those three core values that we鈥檝e set out to do. It鈥檚 always good to anchor yourselves to those basic values that you鈥檝e started off with,鈥� he shared.

The speakers also underscored the importance of collaboration with different stakeholders or even between incumbents and start-ups. This collaboration would not only benefit the companies involved, but ultimately, the market that they are serving as well.

Saying that it is fundamentally about people, Mr. Vea said that disruption is not really meant to disrupt the competitor. Specifically for them at Voyager Innovations, disruption means to disrupt the inequalities and inefficiencies together with the incumbents, that鈥檚 why they work together with competitors or with incumbents as partners.

鈥淚 think we can only survive and grow with that kind of mind-set,鈥� noted Mr. Vea.

Mr. Cu expressed the same view and said, 鈥淲e cannot work in silos or as a single company trying to do it alone. It is important for start-ups or even large companies who are trying to drive disruption in a certain space to work with other stakeholders. Also, being enablers to a space and being a platform that allows different stakeholders to enjoy benefits of the services you provide is very important.鈥�

Mr. Thomas echoed the same message, and said that as a financial technology provider, they are looking for opportunities to partner and collaborate if they see someone moving into the same business space as they are present in, and are solving the similar problems as they are.

鈥淲hat we aim to provide is really a better life for Filipinos,鈥� Mr. Thomas said.

Also highlighting the significance of collaboration, Mr. Cuneta shared that no matter how incumbents or regulators resist, the market will eventually choose what is beneficial to them.

鈥淚t鈥檚 in the better interest of start-ups, regulators, incumbents, and all the players to work together to make sure that the ultimate beneficiary of disruptive technology will be not just all of us here today but also the future generation,鈥� he said.

A panel of three private-sector leaders was assembled to tackle the subject before the roughly 500 attendees of the forum, which took place in the Grand Ballroom of Grand Hyatt Manila in Taguig City.

These leaders were Arthur R. Policarpio, co-founder and chief executive officer of Mobext Philippines, a mobile-first creative digital agency; Luis Miguel O. Aboitiz, executive vice-president and chief operating officer of the corporate business group of Aboitiz Power Corp.; and Camille A. Villar, managing director of Vista Land & Lifescapes, Inc.

Mr. Policarpio鈥檚 talk revolved around two trends he described as 鈥渂ig鈥� and 鈥渄estructive.鈥� The first of which is the virtual company model. 鈥淎t this point we should ask this question, 鈥榃hy should we even need to go to an office… when we can work anywhere?鈥欌��

He cited the technology firm Automattic, which owns the content management system WordPress, as a company that has gone virtual. Its employees, who are located in a number of countries worldwide, largely work from home.

鈥淲hy should you embrace the virtual company model? Think about it, you have the capability to tap a talent pool of 50 million people anywhere in the world via the freelance marketplaces… You reduce your office costs, increase worker satisfaction, reduce traffic,鈥� Mr. Policarpio said.

Coinciding with the emergence of the virtual companies is the rise of the freelancers and the freelance Web sites. The development, Mr. Policarpio said, is 鈥渕ostly driven by the millennial work force who prefers flexibility and control over the way they want to work.鈥� And Filipinos are increasingly getting in on freelancing. One freelance marketplace, Mr. Policarpio said, has over a million Filipino members.

The second trend is the sharing economy, and it has given rise to a whole new kind of company, a marketplace company that does not need a lot of physical assets to create real value, Mr. Policarpio said. 鈥淭here are consumers or people who need services on one side, and you have people, not companies, who can provide those services on the other side. The marketplace business… creates a platform that enables those two to find each other,鈥� he explained.

For navigating these trends, Mr. Policarpio said, 鈥淐EOs need to be students all over again.鈥� He also suggested building a culture of learning into an organization since the millennials are 鈥渉ungry for learning.鈥�

Automation is also changing the workplace. Mr. Aboitiz had a personal encounter with one type of it, called semi-intelligent automation.

鈥淭he last time I was [in the United States], I was shocked because I had a problem with my cell phone. So I had called a call center. No person answered my call. It was a computer that answered the call. It conversed with me. It answered back. I didn鈥檛 type any numbers on my phone. I just said the numbers, numbers of my credit card… any details it wanted,鈥� Mr. Aboitiz said. 鈥淥nly when I asked questions that were unusual was I passed on to a real person.鈥�

In boardroom decision-making discussions, Mr. Aboitiz believes that some of the questions that are going to be asked are: 鈥淗ow do we change?鈥� 鈥淗ow do we automate?鈥� 鈥淲hat do we use to automate?鈥� 鈥淗ow do we transition from where we are to automation?鈥� 鈥淒o we take big leaps or small strides?鈥�

Millennials are finding themselves answering these type of questions 鈥� and other important management questions 鈥� as they rise through the ranks into ever more senior positions.

But these individuals are often misunderstood. 鈥淭he problem, it seems, is that we tend to overly generalize traits that we attribute to them,鈥� Ms. Villar said. 鈥淕eneralizations, while useful, must be employed with caution because they tend to overlook the uniqueness and complexities of all of us. Profiling a generation, be it baby boomers, the Gen X, or the millennials, should inform but not shape our thinking.鈥�

鈥淲ith a generation of socially motivated, consumption-crazy but creatively innovative individuals starting to take over the work force, it is imperative that we acquire deeper understanding of their strengths and weaknesses in order to make informed strategic decisions,鈥� she added.

Ms. Villar shared a few things she had learned about her generation that members of other generations may want to take note of. One is that they are outspoken but respectful of hierarchy and wisdom of experience. 鈥淭he best millennial leaders I鈥檝e met both in and outside Vista Land have found a good balance between their passion for new ideas and pushing boundaries and… recognizing the value of knowledge established by time, tradition and mentors.鈥�

They are 鈥渇lexible, independent, collaborative and innovative.鈥� Ms. Villar said this combination of characteristics allows them to thrive in an environment of constant innovation through collaboration. 鈥淭hus it becomes more important to mentor this generation in order to provide guidance and essential feedback mechanisms for self-correction and self-improvement.鈥�

Millennials are also 鈥渋nfinite learners,鈥� Ms. Villar said. 鈥淐ombining the easier access to data with the drive to learn more, millennial leaders have the potential to bring human society to heights unforeseen if given the right opportunity and proper understanding,鈥� she said.

The forum, which has become one of the leading live platforms for discussing the key challenges and opportunities for the nation since its inception in 2016, brought together over 500 people from the private and public sectors. Titled 鈥淒isruptor or Disrupted? The Philippines at the Crossroads,鈥� it delved into the forces and realities of disruption and their effects on industries and the country.

The keynote speech was delivered by Dennis A. Uy, one of the most exciting personalities in the Philippine business scene today. He is the founder, chairman and chief executive officer of Udenna Corp., a holding company which has interests in a wide variety of industries, including petroleum retail and distribution (Phoenix Petroleum Philippines, Inc.) and shipping and logistics (Chelsea Logistics Holdings Corp.)

鈥淚f I have learned anything in life, it is this: Change 鈥� which we millennials call disruption 鈥� is constant. If you cannot adapt, you will be left behind,鈥� Mr. Uy said.

Change, he pointed out, is usually a positive thing for what he called 鈥渂usiness insurgents,鈥� or those that rebel against the incumbents and think that there are better ways to do business, especially with technology. The same can鈥檛 be said for the incumbents, also known as the established businesses, because they refuse to see the changes in the landscape and consumer preference, so they get left behind, Mr. Uy said.

鈥淐hange is coming, and we have no choice but to embrace it. If we do not evolve, we become extinct. We will be the products of yesterday, instead of being the brands of the future.鈥�

Mr. Uy鈥檚 speech was succeeded by a series of talks by some of the esteemed personalities in their respective industries. The session devoted to big data and Philippine competitiveness was opened by Ret. Gen. Eliseo M. Rio, Jr., acting secretary of the Department of Information and Communications Technology. He pointed out that all aspects of human life are now controlled by information and that information is the new oil.

Kristine Romano, managing director of McKinsey & Company in the Philippines, helped debunk and prove some myths about digital. It is not true that digital is creating value across sectors, that only digital natives can successfully disrupt, and that strategy no longer matters in digital. It is true, however, that digital is a 鈥渨inner takes all鈥� game, that disruptors have the first-mover advantage, and that culture change is critical.

In her talk, Erika Fille T. Legara, professor at the Asian Institute of Management, noted that for the Philippines to remain globally competitive, it has to disrupt itself. For the country to adapt to disruption, there鈥檚 a need to spark the interest of various stakeholders and to collaborate with each other.

In the following session, which revolved around artificial intelligence, e-commerce and cashless transactions, Pia Bernadette Roman-Tayag, managing director of the Inclusive Finance Advocacy Office at Bangko Sentral ng Pilipinas, reminded the audience that many parts of the country remain unbanked; in fact, as much as 34% of Philippine cities and municipalities have never seen a bank.

Edwin R. Bautista, president and CEO of Union Bank of the Philippines, said that banks today have two options with the entry of fintech or financial technology: disrupt themselves or perish. UnionBank is already mining bitcoin, he said, adding that blockchain is the future.

Meanwhile, as companies leverage on artificial intelligence (AI), they gain more information about their customers, particularly their pain points, according to Lito Tayag, country managing director of Accenture, Inc. (Philippines). But he advised companies to raise their AI systems to be more productive as the capabilities and impact of these systems grow.

An important ingredient for engaging customers in the age of disruption for Walt Steven Young, founder and CEO of Adobomall, is authenticity, which a story that鈥檚 unique to a brand can enhance. But Adobomall is also taking advantage of available technology as Mr. Young shared that they are in the process of patenting a shopping experience powered by augmented reality.

Opening the third session, which focused on finding opportunities in the age of disruption, Orlando B. Vea, president and CEO of Voyager Innovations, told the audience 鈥渁 fact of life:鈥� today鈥檚 disruption is tomorrow鈥檚 business as usual. But he noted that to lead in the age of disruption, one must think in terms of platform.

GCash, a micropayment service of Mynt (Globe Fintech Innovations, Inc.), is one example. Mynt鈥檚 CEO, Anthony Thomas, said that now, one can even purchase load credits and pay bills on Facebook Messenger through GCash.

Brian Cu, country head of Grab Philippines, said that disruptors shouldn鈥檛 forget about their roots. He also shared things his company had learned about disruption: remaining agile, collaborating with stakeholders, focusing on growth without forgetting the basics and innovating.

For Miguel Cuneta, co-founder and chief community officer of Satoshi Citadel Industries, companies like Grab are doing an important thing in the age of disruption 鈥� creating useful services. But he doesn鈥檛 believe that there is a real age of disruption since disruption is a constant process in which the market chooses what鈥檚 beneficial to itself.

In the fourth and final session, which revolved around the workplace and disruption, Arthur R. Policarpio, co-founder and CEO of Mobext Philippines, said marketplace companies, like聽 freelancing Web sites, will continue to thrive as the sharing economy grows. And leaders in this day and age, he noted, must be students all over again, be business model engineers and be architects of company vision in the digital world at the same time.

Luis Miguel O. Aboitiz, executive vice-president and chief operating officer of the Corporate Business Group of Aboitiz Power Corp., noted that since things are changing fast and technologies are getting better, businesses should expect a reorganization every two years.

The workplace is already changing with the entry of more and more millennials. But according to Camille A. Villar, managing director of Vista Land & Lifescapes, Inc., people tend to overly generalize traits attributed to them. Profiling a generation, she said, should inform but not shape one鈥檚 thinking. She recommended seeking millennials who have high levels of emotional intelligence and not necessarily high grades, to create a culture of mutual trust and respect in the workplace.

The 大象传媒 Economic Forum 2018 was presented by 大象传媒 Corp., with co-presentors LT Group, Inc., GT Capital Holdings, Inc., and SM Investments Corp.; platinum sponsors PLDT and Manila Electric Company; gold sponsors Ayala Corp., BDO Unibank, Inc., Megaworld Corp., Phoenix Petroleum, Udenna Corp., and UnionBank; silver sponsors Aboitiz Power Corp., Asian Institute of Management, FWD Philippines, Metro Pacific Investments Corp., Mundo Builders, San Miguel Corp., and St. Luke鈥檚 Medical Center; bronze sponsors Development Bank of the Philippines, Land Bank of the Philippines, Mastercard, National Home Mortgage Finance Corp., Philippine Amusement and Gaming Corp., Sun Life Financial Philippines, Voyager Innovations, Wilcon Depot, Inc., and Cross; media partners The Philippine Star, PhilStar Global, and One News; and event partners Fiera de Manila and ESET.

The fourth industrial revolution is heralding a world of rapidly transforming business landscapes. Across all industries, from media to manufacturing, a technological arms race is threatening to change the world as we know it. Innovation is at the forefront of this global transformation, and business models, policy environments, and even social norms are facing disruption at the hands of new technologies like the Internet of Things (IoT), big data analytics, cloud computing, and artificial intelligence.

鈥淭he First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production,鈥� Klaus Schwab, founder and executive chairman of World Economic Forum Geneva, explained.

鈥淣ow a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres,鈥� he added.

Understanding just how such an all-engulfing phenomenon is affecting and will affect Philippine competitiveness in the future is a challenge in itself.

At the 大象传媒 Economic Forum, held at the Grand Hyatt Manila in Taguig City on May 18, Erika Fille T. Legara, a professor at the Asian Institute of Management鈥檚 Department of Analytics, Information & Operations, recounted how a Filipino entrepreneur asked her about how the Philippines can hope to catch up to the fourth industrial revolution, when the country is barely positioned for the third.

鈥淗e said, 鈥榃hy are we talking about the fourth industrial revolution? The Philippines is still in Industry 2.0. We haven鈥檛 even positioned yet to three, and now you鈥檙e talking about four鈥�,鈥� she shared.

鈥淏ut then again, the future is not very evenly distributed. Whether we鈥檙e moving from three to four, or two to three, or taking a leap from two to four, it is important that we are all aware of what is happening around us. And how these developments can potentially affect our businesses, our people, our society,鈥� she added.

The Internet of Things, she explained, held the potential to change the world much like the Internet did during the turn of the millennium. The technology is based around the concept of connecting any device to the Internet and to each other. Through the IoT, devices ranging from smartphones and smartwatches, to appliances like coffee makers, washing machines, and even machinery like jet engines can freely collect and exchange data, as well as communicate with one another.

鈥淲hat does this mean for businesses? Take a look at Boeing. A Boeing 77 has two engines. Each of its engines produces 20 terabytes of data per hour. So if you鈥檙e flying from New York to LA, that takes about six hours. That鈥檚 240 terabytes of data. That鈥檚 a lot of big data,鈥� she said, noting that the sensors inside the engines are communicating to each other, monitoring vital flight conditions like temperature, humidity, and pressure throughout the trip.

Using this abundance of data, machine-learning software and artificial intelligence could then be used to interpret and obtain meaningful insights for businesses. Sectors with a heavy dependence on machinery and robotics like manufacturing could stand to gain huge competitive advantages, given the right capabilities.

Even sectors not conventionally perceived as technologically independent, such as farming, are not immune to the disruption such technologies present.

鈥淲e can now deploy sensors to our soil, to our water management system. We can fly drones to monitor our fields and distribute seeds and fertilizers,鈥� Ms. Legara said.

鈥淎bove all these, these sensors can also collect data, send this data up to the cloud, perform some machine-learning models and do different levels of analytics, from descriptive to predictive all the way to prescriptive analytics. And then these results will go back to the stakeholders, including our farmers,鈥� she added.

However, is the Philippines equipped to facilitate the constant exchange of such vast quantities of data over its networks?

Ret. Gen. Eliseo M. Rio, Jr., acting secretary at the Department of Information and Communications Technology, lamented the fact that compared to the country鈥檚 neighbors in Southeast Asia, the Philippines has fallen behind in terms of its telecommunications services. The problem, he said, was due to a lack of government support.

鈥淯p till now, the government has not supported our ICT industry in the same manner as the other countries have. Up till now, all the infrastructure that are being rolled out in our telecommunication industry has all been private sector-funded,鈥� Mr. Rio said during his talk.

He added that just privately funded roads tend to have tolls to recoup investments made by investors, the same could be said for privately funded telecommunications networks 鈥� that is, the burden falls to the consumer. And though the current administration has plans to address the lack of infrastructure, it remains, in his belief, the primary obstacle for businesses trying to mitigate the effects of disruption.

鈥淓verything now, all aspects of our lives, are controlled or even influenced by information,鈥� Mr. Rio said. 鈥淚nformation is the new oil, they say, but that oil has to be distributed by pipes. That pipe is what the government needs to use to support the telecommunication industry, so information can flow faster at less cost to most of the areas in our country.鈥�

The bad news is that the longer the Philippines remains unequipped to handle the strain of technological advancement, the more difficult it will be for businesses to play catch-up with the rest of the world. The price for any business adapting too late in a fast-changing, disruptive environment could be death.

鈥淭here are clear winners and losers from disruptions. Everyone knows the saga of Netflix and Blockbuster,鈥� Kristine Romano, managing partner of the global management consulting firm McKinsey & Company in the Philippines, said.

鈥淏lockbuster used to be an eight-billion-dollar company in 2005 and only five years later filed for bankruptcy. It could not compete with the instant and low-cost digital delivery of Netflix. Similarly, you find the likes of Google whose market share has gone from 12% in 2001, to an estimated 90% today. Meanwhile, who still uses their Yahoo accounts?,鈥� she shared.

Ms. Romano further said that by being the first mover, or at least being one of the top 25% of companies fastest to respond to disruption, companies can negate the projected revenue and profit losses for disrupted businesses, according to their research at McKinsey.

鈥淲e tracked the direction of the revenues of the most disrupted industries and we found that growth in disruptive industries can be reduced as much as 6 to 12 percentage points. Now, of course, the numbers vary by sector by player, but our research shows that digital enables competition that puts pressure on revenue and profit growth,鈥� she said, further noting that disruptors tend to have the competitive advantage when compared to disrupted businesses that fail to adapt.

To ensure chances of success, the imperative to change and adapt should naturally come from the very top of the company ladder and work its way downward. Culture change is inevitable, and if industry executives play their cards right, they could see themselves becoming the digital leaders of the future.

鈥淵ou don鈥檛 need to be a digital native to win; a great strategy by itself can retrieve all of the revenue growth lost and contribute to further growth. Companies with a high DQ or digital quotient rely on internal collaborations, take bold risks, and experiment with new strategies,鈥� Ms. Romano said.

In a trajectory of rapid improvements, buoyed by disruptive technologies, consumers are becoming more demanding and discriminating. Emerging technologies provide companies a multitude platform to unleash new level of customer relationship and re-examine their purpose in an increasingly competitive market. Although disruption opens new opportunities for both start-ups and the incumbents, it remains less attractive to some industry players who need to adapt new business model to stay ahead of the digital curve.

Innovations, particularly in banking, retail and services sectors, have transformed monetary transactions into an immersive financial experience that goes beyond the traditional processes. The emergence of Artificial Intelligence (AI), E-Commerce and cashless transactions brings consumers more secure, faster and more convenient transaction options.

During the recent 大象传媒 Economic Forum held at Grand Hyatt Manila in Taguig City on May 18, Bangko Sentral ng Pilipinas (BSP) Managing Director of Inclusive Finance Advocacy Office and Concurrent Head of Financial Consumer Protection Pia Bernadette Roman-Tayag explained how disruptions in financial system can help achieve financial inclusion by reaching the unbanked and by eradicating misconceptions on the services that banks offer.

鈥淒isruptions are able to improve services for currently served population,鈥� Ms. Roman-Tayag said. 鈥淏ut it is transformational in the effect that it can have for the unserved or never served before, and that is where the opportunity lies.鈥�

Ms. Roman-Tayag shared that 554 out of 1,634 or 34% of cities and municipalities in the country do not have a banking office. Also, citing the BSP Financial Inclusion Survey in 2015, she shared that 47% of Filipino adults have outstanding loans, and 72% of them borrow from informal sources.

These people are paying high prices from informal lenders for thinking that financial services from banks are expensive, in addition to the fact that some of them don鈥檛 have enough funds to open an account or don鈥檛 have the necessary documentation required by these institutions.

鈥淭hat鈥檚 exactly right for disruption. That鈥檚 exactly what technology can bring to these misconceptions or perceptions or realities of the unbanked,鈥� Ms. Roman-Tayag said. 鈥淭echnology is there, the demographic is just waiting for all this new technology to come in, for disruptors to come in. The currently served market is still your market to improve products, but then, the game will be on the transformation, will be on the unserved market.鈥�

While disruption provides banks the opportunity to position themselves in reaching the untapped market, they are also facing challenges to stay competitive 鈥� still brought by disruption. New technologies and alternative payment methods are ramping fast, pushing financial technology (fintech) companies to gain momentum while leaving traditional banks behind.

According to Edwin R. Bautista, president and chief executive officer (CEO) of Union Bank of the Philippines (UnionBank), banks in the age of disruption have only two choices: digitize or perish.

Mr. Bautista shared that as fintechs gain a strong foothold in the industry, there鈥檚 an implication for banks, like UnionBank, to later lose their market share.

鈥淎fter thinking of these, our board told the management: 鈥業s it time to just sell the bank?鈥� How should a bank or how could a bank respond? At UnionBank, our answer after a long soul search was we fight fire with fire, technology with technology,鈥� Mr. Bautista said, noting that fintechs do not have a monopoly of technology and there is no reason for banks to use the same technology.

In response, UnionBank arrived at a plan to transforming the bank into a bank that is digital to the core; it started its digital transformation journey to avoid being disrupted.

While heading its way to join industry disruptors, Mr. Bautista said that they run into two realizations: one, banks can play the role of a disruptor too; and two, the best way to avoid disruption is to disrupt oneself. 鈥淭his way, we can at least fear ourselves to a more desirable outcome,鈥� he said.

The BSP, playing its mission to promote and maintain price stability, a strong financial system, and a safe and efficient payments and settlements system in the country, is creating the enabling policies and regulatory environment so banks can use financial technologies, can become fintechs themselves, can disrupt themselves or be at equal footing as other disruptors in the industry.

Ms. Roman-Tayag said that BSP is leveling up the playing field in terms of other fintechs that need to be licensed with the BSP such as e-money issuers and virtual currency exchanges. 鈥淲ith this, we get to create an ecosystem where we can develop trust and certainty in the market which is what the people are really looking for,鈥� Ms. Roman-Tayag added.

To keep customers engage in this age of disruption, Adobomall Founder and CEO Walt Steven Young identified three points: to tell stories that create authenticity, to continuously create more innovations, and to constantly measure results.

Mr. Young said that in this age, everybody has the capabilities of creating technology. 鈥淎t the end of the day, your customers will see a lot of technologies in front of them. What sets you apart is because you have a story that you are grounding your ideas to,鈥� he said, adding that having a unique story would help companies create connection that generates customer engagement.

Furthermore, technology and innovation create new experiences, thus measuring its impact or results would help companies judge what seems to be effective that might be changed in the next days.

鈥淵ou may be disrupting now, but maybe in a few months, in a few weeks, you鈥檙e no longer a disruptor, you鈥檙e a traditional business,鈥� Mr. Young said. 鈥淣ever stop innovating. It is the name of the game now.鈥�

As observed, all disruption-led changes focus on customer centricity and personalization of customers鈥� experience. And as companies are making their transition into the disruptive marketplace, some of them are now leveraging on AIs and technologies that help them gain more intelligence about their customers. This, according to Accenture, Inc. (Philippines) Country Managing Director Lito Tayag,听allows companies to identify customers鈥� pain points and predict their preferences.

One technology trend that is growing its reach in today鈥檚 landscape is called citizen AI. Mr. Tayag said that as AI grows in capabilities and its impact on people鈥檚 lives, businesses must raise their AI to act as responsible productive members of society.

鈥淲ith these opportunities, we see a new era unfolding. The era of applied intelligence, the era of breakthrough collaborations between humans and machines as it ushers the revolution that is the intelligent enterprise. In this new synergy, it is expected that Artificial Intelligence shall become integral in enabling people to scale up productivity and ultimately bring more and further innovations to business and society,鈥� Mr. Tayag said.

And as the country prepares for the impact of AI and other advanced technologies to benefit the society, Mr. Tayag said that it should result in inclusion for the country, including financial inclusion of the unbanked, access to payments, access to lending, and access to investment.

I would like first to thank 大象传媒 and Miguel Belmonte for this opportunity to be with you today. No, I did not invite myself to speak 鈥� but I guess it helps to be a proud owner of the paper.

Our group invested in 大象传媒 six years ago. So yes, technically our reporter janina lim works for me! God bless you, hija!

Let me congratulate Miguel, the editors, reporters, and staff of 大象传媒. For the first time in many years, 大象传媒 has turned profitable for the full year 2016 鈥� a feat, which Prime Minister Virata and Professor Raul Fabella noted took more than a decade to accomplish!

So I guess there is hope for TV 5!

Let me also thank the sponsors of this forum. And special congratulations to sponsor Turkish Airlines in particular.

Turkish airlines has been named Europe鈥檚 best airline for six years straight. But now it has a new title: Turkish Airlines 鈥� official airlines of the Asean.

I understand the Ambassador of Turkey is here. Welcome, Ms. Ambassador.

I have only one request if Turkey is to become a member of Asean. Turkey can join Asean 鈥� but it may not join SEABA!

Growth drivers

This forum seeks to identify the engines which could drive long-term growth of our country.

I may suggest three drivers:

First, the government鈥檚 tax reform for acceleration and inclusion; second, infrastructure; and third, investment in businesses which could propel growth. There could be a fourth game changer 鈥� gas in the south china sea.

Let me now speak about the first driver: the government鈥檚 Comprehensive Tax Reform Program or CTRP.

CTRP will reconstitute our tax system to make it:

Simpler and fairer 鈥� by decreasing the number of income tax brackets from 7 to 6, reducing the rate in most brackets, especially for those with lower incomes, simplifying requirements for small taxpayers; more efficient 鈥� limit exemptions of VAT to necessities like raw food, education, and healthcare; raise excise tax on fuel and automobiles; more friendly for business 鈥� lower the tax rates for corporates.

With these changes, CTRP aims to raise the requisite funds to finance infrastructure in part, as well as education, social safety nets, and health. The goal is to raise incremental resources by P2.2 trillion over six years 鈥� or P366 billion a year.

CTRP is central to dutertenomics; it is in fact the catalyst to the government鈥檚 10-point economic program. That is why I believe the business sector should support it.

President Duterte and [Finance] Secretary Dominguez, and the DoF team, should be congratulated for crafting this pivotal tax policy.

Second growth driver 鈥� infrastructure.

The fiscal space which CTRP could provide, complemented by ample liquidity here and abroad, could mean financing available for infrastructure 鈥� the 2nd growth driver I turn to now.

We all know the government plans to spend a massive P8.4 trillion on infrastructure until 2022, with spending rising from 5.4 percent to 7.4 percent of GDP by the time president Duterte leaves office.

To cover this prodigious outlay, the plan is to combine the resources raised by CTRP with local borrowings and ODAs, in the proportion of 80-20, respectively. The budget deficit will therefore rise from 2.7 percent of GDP in 2016, to about 3 percent between now and 2022.

Central to this financing plan is the assumption that GDP will continue rising robustly over the period, to accommodate government鈥檚 rising debts. The plan is of course not totally without risks 鈥� if for some reason, our growth targets are missed, the 3% debt cap could get breached, with possibly unpleasant consequences. That鈥檚 why it鈥檚 important for business to support in whatever way it can to keep the GDP engine going at 6 to 7%, or better.

Hybrid PPP approach

As well, government has decided to adopt the 鈥淗ybrid PPP approach鈥� to infrastructure 鈥� government to build the projects and, upon completion, bid out the operations and maintenance of it.

This hybrid approach has prompted some conversation: First, do we have the capacity to execute these large projects? Are there enough local contractors and sub-contractors with the necessary size, experience, and skills to execute them? And within the contracting and supply context, can the private sector participate and help?

Second, considering that a good portion of infra spend will be financed by debt, how can these be effectively serviced?

In regard to this Hybrid PPP, let me speak about the subic-clark expressway model. This tollway was built by government on JICA financing, and ultimately privatized by way of a concession agreement, not O&M.

From our perspective, this was a win-win formula for both government and business: first, the tollways got done; second, tollway fees paid to government are sufficient to service JICA鈥檚 long-term loan; third, the concessionaire and not the government, shoulders the O&M expenses; fourth, the concession agreement enhances the equity value of our tollways group because it confers a quasi-ownership interest in the business 鈥� which an o&m contract doesn鈥檛.

We鈥檙e also aware that certain existing infra requires immediate attention 鈥� NAIA and MRT-3, in particular. The government appears to be leaning towards Clark Airport 鈥� frankly, this is the only viable option we have for now. NAIA is filling quickly to the brim, and a new airport will take years to complete.

As to MRT-3, what more can be said? In 2016: 2,619 trains removed from daily run due to glitches, 63 service shutdowns, 586 emergency passenger disembarkations.

Third growth driver 鈥� investing in business

The third driver refers to those businesses that infrastructure and CTRP intend to support. Remember that both infrastructure and taxes are enablers of business 鈥� an airport is built or expanded if tourism and other businesses in its vicinity can be established or developed. Investment in the tourism ecosystem 鈥� in hotels, inns, restaurants, markets, entertainment 鈥� has to be made principally by the private sector. Without these investments, an airport by itself cannot be economically justified.

Of course, infrastructure breeds its own collateral businesses to feed its requirements 鈥� cement and steel plants, aggregates, labor and contracting services.

So, which businesses? I say those which create jobs 鈥� businesses with significant labor input:

First, businesses unique to their geographic and resource advantages, such as tourism and mining. These are located in rural areas where most poverty exists. Tourism is labor-intensive and plays to the strength of our people鈥檚 service orientation. Mining is capital intensive, has significant export potential, and is located in outlying areas.

Stop redistributing poverty

Speaking of mining, we welcome a break in the impasse on policy with the appointment of a new DENR secretary. I鈥檓 told Secretary Cimatu went to NU before going to PMA, then took his MBA at the Ateneo. Hopefully, we can have an open dialogue with him, beginning with this topic 鈥� how to dethrone La Salle.

A second category are by-products of our people鈥檚 migration abroad, and of global ageing. These are medical tourism and retirement homes, both of which are labor-intensive.

Third, agriculture.

Despite its critical place in our economy, it has regrettably been accorded step-child attention. Agriculture accounts for about 27% of our labor force, but only 8.8% of our GDP. Most importantly, 70% of our poor live in rural areas. Of the estimated 21.6 million poor, some 17 million are directly and indirectly dependent on agriculture.

The anemic performance of agriculture must be attributable mainly to the comprehensive agrarian reform program, or CARP.

There are many reasons why CARP has failed in its almost 30 years of life.

With its five-hectare ownership limit, CARP has effectively discouraged private capital from agriculture. It has presumed that farmers will become entrepreneur-businessmen by owning their land. But with no more than a hectare under cultivation on average, how on earth can we expect our farmer-entrepreneur to make a living?

Dr. Fabella once wrote 鈥� 鈥渢o everything there is a season, and now is the time to let go. We now have to redirect our agricultural focus from land equity to farm efficiency. Private capital must be attracted back into agriculture.鈥�

It is time, in other words, to stop redistributing poverty.

Areas for commercial farming 鈥� to coconuts, cocoa, rubber, coffee and staples such as rice, sugar and corn 鈥� must be opened up and leased.

When I was in China recently, I was told that China can buy all the fruits we can produce. And right on our doorstep, Indonesia imports about 4.0 million tons of raw sugar each year.

Investing in productive, diversified agriculture will bring in agri-processing plants and our ability to export agri-products. These will provide sustainable jobs to the countryside and deploy excess labor from small farms. We鈥檙e doing this by propagating coconut oil mills in various parts of the country where coconuts are abundant. Remember world population will grow from 7.5 billion people this year to 11.2 billion by the year 2100. Food therefore must figure into our long-term planning.

Resources in the South China Sea

Finally, the South China Sea, and its resource potential.

We know that Malampaya will start depleting in 2024. It is imperative that we start looking for alternative sources of gas now 鈥� failing which, gas has to be imported. We simply cannot leave the three gas plants of 3,000 MWs in Batangas stranded 鈥� brownouts will ensue, for certain. The first critical step is to determine if there are indeed commercial gas resources in the area.

In 2012, Philex petroleum disclosed the highlights of an interpretation report of new 3D and 2D results, together with the vintage data acquired earlier, over service contract 72. A best estimate of contingent resources in the north bank was reported 鈥� equivalent to about 2.6 trillion cubic feet of gas 鈥� about the size of Malampaya 鈥� plus oil and condensate gas of 65 million barrels.

There is of course no assurance at this time that these estimates are accurate until further drilling and technical evaluations are made.

But we鈥檙e encouraged that the Duterte government has provided an accommodating environment with its open, constructive approach to China. A bilateral consultation mechanism has recently been formed to agree a code of conduct in the region.

It is time to close. But before I do, let me congratulate the two Gilas teams for winning the SEABA tournament. Dutertenomics seem to represent a workable, actionable plan for the economy and its growth prospects. Combined with the President鈥檚 strong political will and bias for action, supported by his continued high trust rating, it stands a good chance of execution. So this inspires hope.

Leaders after all should be merchants of hope.

We must hope for a great future for our country 鈥� a future in which we can match our strength with our moral values, our wealth with wisdom, our power with purpose.

We must hope for a Philippines that provides the opportunities for, and raises the welfare of all our people, without regard to privilege or pedigree.

We must hope for a country which protects our environment, rewards fulfillment in sports, recognizes achievements in business, in arts, and in our armed services.

And we must hope for a Philippines that commands respect in the world 鈥� for our people, for our culture and our history.