For a change, let’s have good news after two weeks under ECQ (enhanced community quarantine) and another three weeks of MECQ (modified ECQ) in the National Capital Region (NCR) plus four adjacent provinces also known as the “NCR Plus bubble.”
One bright spot during the current pandemic is the acceleration of digital adoption worldwide. According to the latest study of International Data Corp. (IDC), the personal and consumer services industry will experience the highest bounce-back in 2021 as the Asia-Pacific region recovers from last year’s recession.
Next would be the banking and telecommunications industries, which are projected to grow this year by 5.9% and 6.6%, respectively. Improvements in customer interactions and workforce will be the banking sector’s focus, while resumption of supply chain is the major factor in improving the telecom sector’s performance.
IDC market analyst Mario Allen Clement said national governments have launched various initiatives to revive their economies, indirectly allowing enterprises to allocate budgets for information and communications technology (ICT) spending — which is forecast to grow by almost 5% to $924 billion this year and is expected to reach $1 trillion by 2024.
Based on IDC’s “Worldwide ICT Spending Guide” covering 53 countries and more than 100 technology categories, another sector that will rebound faster than most is the construction industry. Projects that were halted due to the pandemic are gradually being resumed with the help of government regulations in place.
The semi-annual report stated that the lifting of lockdowns across the region has helped increase consumer demand as vaccines begin to be rolled out and revival of economic activities takes center stage. IDC senior research manager Ashutosh Bisht disclosed: “The economic indicators across the region suggest a bounce-back across the sectors, as majority of sectors have reached their pre-COVID level production levels.”
Sadly, the same thing cannot be said about the Philippines, which has the longest lockdown in the world and one of the slowest vaccination rollouts.
IMPRESSIVE ROI
Davao business tycoon Dennis Uy has lately been in the news after declaring that he is open to selling his investments in various companies – including his flagship firm, Phoneix Petroleum Philippines Inc.
This followed Uy’s sale of his controlling stake in logistics giant 2GO Group to the SM Investments Corp. for P6.6 billion amid a turbuluent business environment resulting from the COVID-19 pandemic.
But going largely unnoticed was Uy’s divestment from liquefied petroleum gas (LPG) player South Pacific Inc. (SPI) last year. His holding company, the Udenna Group, sold its 50% equity ownership in SPI for P6 billion to 168 Gas Corp. owned by the Ty family of Isabela.
Udenna entered into a 50-50 joint venture with 168 Gas to form SPI in 2014 with an original investment of P1 billion each. Six years later, Udenna’s gain from the sale was a whopping P5 billion or a return on investment equivalent to 35% compound annual growth rate from 2014 to 2020.
SPI’s first full year of operations was actually in 2016, when it was able to get a 6% share of the country’s total LPG market. Today it has grown to become the second biggest player in the industry with a 22% market share.
Uy must really be proud of the company he co-founded which quintupled his investment in such a short span of time and is thriving despite the extremely difficult phase our economy is going through.
J. Albert Gamboa is CFO of the Asian Center for Legal Excellence and chairman of FINEX Publications.
