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Q2 agricultural output falls by 3.3%

Farm output dropped by 3.3% in the second quarter, as the El Niño weather phenomenon caused dry spells and droughts around the country. — PHILIPPINE STAR/RUSSELL A. PALMA

By Adrian H. Halili, Reporter

THE PHILIPPINES’ agricultural output fell in the second quarter, as the crops and livestock sector continued to bear the brunt of the El Niño weather phenomenon.

Data from the Philippine Statistics Authority (PSA) showed the value of production in agriculture and fisheries at constant 2018 prices dropped by 3.3% to P413.91 billion in the April-to-June period, worsening from the 1.2% contraction a year earlier.

It was the first decline in agricultural output since the 0.2% drop in the third quarter of 2023, and the biggest drop since the 3.4% contraction in the first quarter of 2021.

Performance of Philippine Agriculture“The reduction was due to the decreases in the value of crops and livestock production. Meanwhile, expansions were recorded in the value of poultry and fisheries production,” the PSA said.

The agriculture sector accounts for about a tenth of the country’s gross domestic product (GDP) and provides about a quarter of all jobs.

The PSA is scheduled to release second-quarter GDP data on Aug. 8.

For the first half, the value of production in agriculture and fisheries slipped by 1.5%, a reversal of the 0.4% growth a year ago.

“The Philippine agriculture sector has demonstrated resilience, bolstered by strategic interventions from the Department of Agriculture (DA), in the face of challenges posed by the adverse impact of El Niño on crop harvest and the stubborn African Swine Fever (ASF) on hog production, particularly during the second quarter,” Agriculture Assistant Secretary and Spokesperson Arnel V. de Mesa said on Wednesday.

Crops production, which accounted for half of the agriculture sector’s total production, slumped by 8.6% year on year in the second quarter. This was a reversal of the 1.2% growth a year ago.

Year to date, crops production dropped by 4.4%, reversing the 1.5% growth a year earlier.

In the second quarter, palay (paddy rice) production declined by 9.5%, while corn plunged by 20.3%.

Also posting double-digit declines in production were sugarcane (-42.3 %), onion (-37.4 %), tomato (-15.6 %), mongo (-14%), and abaca (-12.4%).

Lower output was also seen in rubber (-7.5%), cassava (-7.2%), eggplant (-7%), sweet potato (-5.8%), ampalaya (-5.1%), coconut (-4%), banana (-3.3%), mango (-2.8%), pineapple (-2.7%), tobacco (-1.9%), coffee (-1.87%) and potato (-1%).

Only calamansi (6.4%), cacao (5.9%), and cabbage (2.7%) posted growth in production in the second quarter.

“These drops are the effects of El Niño during the first semester of the year. Crops, particularly rice and corn, either did not survive or suffered yield losses due to lack of water,” Federation of Free Farmers National Manager Raul Q. Montemayor said in a Viber message.

The state weather bureau declared the start of the El Niño weather event in June 2023, bringing below-normal rainfall conditions, dry spells and droughts. El Niño ended in early June, but dry conditions are expected to continue.

Based on the Agriculture department’s final bulletin, farm damage from El Niño hit P15.3 billion, with total crop losses at 784,344 metric tons. Rice and corn were the most affected crops.

“The explanation of (the DA) that the drop was due to delayed planting by some farmers does not seem realistic… So it was not a delay in planting but an inability to plant due to lack of rain,” Mr. Montemayor said.

However, Mr. De Mesa said the DA had supported the agriculture sector during El Niño, earmarking P14.54 billion in financial aid for affected farmers, production support and loans.

LIVESTOCK DROP
Livestock production shrank by 0.3% in the quarter ending June, reversing the 0.7% expansion a year ago. It accounted for 15.3% of the total agricultural output during the April-to-June period.

Data from the PSA showed a drop in the value of production for goat (-2.7%), carabao (-2.4%) and hog (-0.3%). Higher production was seen in dairy (9.7%) and cattle (0.2%).

In the January-to-June period, the value of livestock production slid by 1.9%, a reversal of the 2.4% growth in 2023.

Former Agriculture Secretary William D. Dar said in a text message that the livestock industry, particularly hogs, is still affected by ASF.

“The 0.3% decline (in hogs) is small. Most likely, the market weights of hogs are smaller due to extreme heat, which affected the feed intake and therefore the feed conversion as well,” National Federation of Hog Farmers, Inc. Vice-Chairman Alfred Ng said in a Viber message.

Hogs account for 12.4% of livestock production.

GAINS IN POULTRY, FISHERIES
Poultry output, which accounts for 16.9% of the total agricultural output, jumped by 8.7% in the April-to-June period, an improvement from the 1.5% growth a year ago.

Higher production was seen for chicken eggs (9%), chicken (8.9%), duck (1.3%) and duck eggs (0.8%).

From January to June, the value of poultry production rose by 7.3% from 2.3% a year ago.

Former Agriculture Undersecretary Fermin D. Adriano said the growth in poultry output during the period was due to poultry growers’ improved efforts to curb the spread of bird flu.

“It is easy for poultry production to recover because there are now chicken breeds which can be harvested for less than a month. Old stock affected by bird flu can easily be replenished,” he said in a Viber message.

Mr. Dar said the growth in poultry was driven by the sustained investments of large poultry companies including small- and medium-sized growers.

Meanwhile, fishery production increased by 2.2% in the second quarter, a turnaround from the 13.8% decline a year ago. The subsector made up 14.6% of the total farm output.

Year to date, the value of fishery output inched up by 1.1%, a turnaround from the 7.5% decline last year.

“Fisheries were coming from a very low base, so it was relatively easy for the sector to show an uptick.  Maybe the hot weather induced more phytoplankton production,” Mr. Montemayor said.

Gains were seen in skipjack or gulyasan (141.2%), bigeye tuna (94.1%), yellowfin tuna (43.2%), frigate tuna or tulingan (33.7%), P. Vannamei (33.6%), blue crab (7.4%), fimbriated sardines (5.9%) and cavalla or talakitok (4%).

On the other hand, production declined for tiger prawn or sugpo (-40.3%), grouper or lapu-lapu (-34.8%), seaweed (-25.8%), slipmouth or sapsap (-24.7%), big-eyed scad or matangbaka (-22.3%), mudcrab or alimango (-18.3%), round scad or galunggong (-13.6%), squid (-6.8%), tilapia (-6%), milkfish or bangus (-4.6%), threadfin bream or bisugo (-4.4%), and Bali sardinella or tamban (-0.1%).

Mr. Adriano noted that the open fishing season in Philippine waters coupled with better weather contributed to the increase in fishery production.

The DA is targeting 1-2% agricultural growth in 2024, taking into account the effects of the El Niño and La Niña weather events.

June jobless rate falls to lowest in two decades

People flock to a job fair at SM City San Lazaro in Manila, June 26, 2024. — PHILIPPINE STAR/EDD GUMBAN

THE UNEMPLOYMENT RATE in June fell to 3.1%, the lowest in two decades, as hiring in the construction sector surged, the Philippine Statistics Authority (PSA) reported on Wednesday.

Preliminary data from the Philippine Statistics Authority (PSA) showed the jobless rate slipped from 4.1% in May and 4.5% in June 2023.

The June unemployment rate was the same as in December 2023. It was also the lowest jobless rate since April 2005, when the statistics agency revised its definition of unemployed to Filipinos aged 15 years and older without a job, available for work, and actively seeking one.

Philippine Labor Force Situation

This translated to 1.62 million unemployed Filipinos in June, down by 486,000 from 2.11 million in May.

Year on year, unemployment went down by 707,000 from 2.33 million in June 2023.

This was also the lowest number of unemployed Filipinos since the 1.6 million recorded in December last year.

In the first half, the unemployment rate averaged 3.9%, lower than the 4.6% average a year ago.

“We can see the economic activity linked to construction activities substantially increased… (In construction) we added 938,000 jobs (year on year),” PSA Undersecretary and National Statistician Claire Dennis S. Mapa said in mixed English and Filipino during the press briefing on Wednesday.

However, underemployment — those who want longer hours or an additional job — went up to 12.1% in June from 9.9% in May. This was a tad higher than 12% in June 2023.   

The ranks of the underemployed Filipinos reached 6.08 million, up by 1.27 million month on month and 208,000 year on year.

As of end-June, the average underemployment rate stood at 12.3%, lower than 12.5% last year.

“Year on year, the labor force participation rate increased substantially… What happens is that the labor market cannot absorb this, so not everyone can get full-time jobs… This is why there is an increase in underemployed people,” Mr. Mapa said.

Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message the higher underemployment rate could have been due to the sectoral slowdowns and lack of available part-time work.

In June, the employment rate rose to 96.9%, equivalent to 50.28 million Filipinos. This was slightly higher than 95.9% (equivalent to 48.87 million) in May, and 95.5% (48.84 million) in June 2023.

In the first half, the employment rate averaged 96.1%, up from 95.4% a year ago.

The service sector remained the top employer, accounting for 58.7% of jobs in June, followed by agriculture (21.1%) and industry (20.2%).

In June, month-on-month job gains were recorded in construction (up 680,000 to 5.77 million), agriculture and forestry (up 571,000 to 9.53 million), and wholesale and retail trade (490,000 to 10.6 million).

“The government’s swift implementation of infrastructure projects and the continued improvement of operating conditions for manufacturing firms have led to these employment gains. Increasing investments in renewable energy, water supply, and mining and quarrying have also supported employment growth in these areas,” National Economic and Development Authority Secretary Arsenio M. Balisacan said in a statement.

On the other hand, the biggest monthly job loss was seen in public administration and defense, which cut 466,000 jobs to 2.67 million. Job losses were also seen in education (down 184,000 to 1.51 million), and transportation and storage (down 152,000 to 3.57 million).

Meanwhile, construction saw the largest annual increase in jobs, adding 938,000 jobs to 5.77 million. Significant job gains were also seen in wholesale and retail trade (up 527,000 to 10.6 million), and accommodation and food service activities (up 396,000 to 2.62 million).

Year on year, agriculture and forestry cut 916,000 jobs to 9.53 million. Annual job losses were also seen in public administration and defense (down 340,000 to 2.67 million) and fishing and aquaculture (down 81,000 to 1.09 million).

Sentro ng mga Nagkakaisa at Progresibong Manggagawa Secretary-General Josua T. Mata questioned what he called the “flawed employment strategy” of the government.

“Worker underutilization remains high. The combined underemployment and unemployment rate rose from 14% in May 2024 to 15.2% in June 2024. This means nearly one in six workers are either unemployed or underemployed and unable to fully contribute to the economy,” he said in a Viber message.

The country’s labor force reached 51.9 million in June, increasing by 926,000 from 50.97 million in May.

On an annual basis, the labor force increased by 730,000 from 51.17 million.

This translated to a labor force participation rate of 66%, higher than the 64.8% in the previous month, but lower than 66.1% last year.

The average Filipino employee worked for 40.9 hours a week, up from 40.6 hours in May and from the 40 hours in June 2023. — Charles Worren E. Laureta

Forex buffer hits over 2-year high of $105.6B

JOHN GUCCIONE-PEXELS

By Luisa Maria Jacinta C. Jocson, Reporter

THE COUNTRY’S gross international reserves (GIR) jumped to $105.65 billion as of end-July, its highest level in over two years, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary data from the BSP showed gross dollar reserves inched up by 0.4% from $105.19 billion as of end-June.

Dollar reserves rose by 5.7% from $99.95 billion year on year.

This was also the highest level of reserves in 28 months or since the $107.3-billion level recorded in March 2022.

“The month-on-month increase in the GIR level reflected mainly the upward valuation adjustments in the BSP’s gold holdings due to the increase in the price of gold in the international market, net income from the BSP’s investments abroad, and the National Government’s (NG) net foreign currency deposits with the BSP,” it said.

As of end-July, the level of dollar reserves was enough to cover about 6.1 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.

It was also equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income.

Ample foreign exchange (forex) buffers protect an economy from market volatility and ensure the country can pay its debts in the event of an economic downturn.

BSP data showed that foreign investments edged higher by 0.09% to $90.07 billion from $89.99 billion a month ago. Year on year, investments increased by 7.6% from $83.68 billion.

Reserves in the form of gold were valued at $10.31 billion as of end-July. This was up by 4.1% from $9.9 billion in the previous month and by 0.09% from $10.3 billion a year ago.

On the other hand, net foreign currency deposits slipped by 1.4% to $791.2 million from $802.2 million month on month. It also fell by 42.1% from $1.37 billion a year earlier.

As of end-July, net international reserves edged up by 0.4% to $105.62 billion from $105.16 billion the  month prior.

Net international reserves are the difference between the BSP’s reserve assets or GIR and reserve liabilities, such as short-term foreign debt and credit and loans from the International Monetary Fund (IMF).

Meanwhile, the country’s reserve position in the IMF slid by 2.8% to $719.9 million as of end-July from $740.4 million as of end-June.

Special drawing rights, or the amount the country can tap from the IMF, was unchanged at $3.75 billion.

“The Philippines’ gross international reserves slightly increased in July, primarily due to higher gold valuations and positive investment returns. This maintains a robust external liquidity buffer, essential for safeguarding the country’s financial stability,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the GIR level continued to rise due to the new record highs in world gold prices, which boosted the value of the BSP’s gold holdings.

Mr. Ricafort said the country’s dollar reserves could improve in the coming months amid steady growth in overseas Filipino worker remittances, business process outsourcing revenues, foreign tourism revenues, and foreign direct investments.

The BSP expects the GIR level to settle at $104 billion by yearend.

First-quarter GDP growth revised upwards to 5.8%

A vendor arranges watermelons at a stall along a highway in Naic, Cavite, March 2, 2024. — PHILIPPINE STAR/EDD GUMBAN

THE PHILIPPINE ECONOMY grew slightly faster than initially reported in the first quarter, the Philippine Statistics Authority (PSA) said on Wednesday.

The PSA said in a statement the gross domestic product (GDP) growth rate for the January-to-March period was raised to 5.8% from the 5.7% previously reported. This was the fastest GDP growth since 6% in the third quarter of 2023.

The PSA said the main sources of the revision were financial and insurance activities (10.3% from 10%); wholesale and retail trade and repair of motor vehicles and motorcycles (6.6% from 6.4%); and electricity, steam, water and waste management (6.9% from 6.3%).

On the other hand, the largest downward revisions were recorded in education (3.7% from 4.6%), accommodation and food service activities (13.1% from 13.9%), and professional and business services (7% from 7.5%).

On the expenditure side, household and government spending growth remained unchanged at 4.6% and 1.7%, respectively.

Exports of goods and services, on the other hand, were revised upwards to 8.4% from 7.5%, while imports were revised downwards to 2.2% from 2.3%.

Gross capital formation growth was downgraded to 0.5% from the preliminary estimate of 1.3%.

The net primary income from the rest of the world was also higher at 57.6% from 57%.

Meanwhile, the gross national income — the sum of the nation’s GDP and net primary income from the rest of the world — for the first quarter was revised upwards to 9.8% from 9.7%.

National account revisions are based on approved revision policy, which is consistent with international standard practices, the PSA said.

The PSA will release second-quarter GDP data on Aug. 8. — Karis Kasarinlan Paolo D. Mendoza

Philippines in talks with JPMorgan for bond index inclusion, sources say

BLOOMBERG

THE PHILIPPINES is in talks with JPMorgan Chase & Co. for the inclusion of its peso government bonds in the US bank’s emerging-market debt gauge that’s tracked by billions of dollars’ worth of global funds.

Finance Secretary Ralph G. Recto told Bloomberg News that he knew there are discussions and that he was awaiting an update.

Joining the benchmark is typically a breakout moment for emerging economies, as the move attracts fresh inflows of overseas capital into their debt markets. India acceded to the gauge in late June, having been placed on watch for eligibility three years before.

For officials in Manila, the talks mark a potential turnaround after its global peso notes dropped out of the index due to illiquidity in January 2024. The Philippines has different types of local currency notes.

“Everyone’s pushing for stronger capital markets for the Philippines,” said Helen Go Oleta, a fund manager at RCBC Trust Corp. The development would be welcome as it would “provide a very healthy two-way market.”

The Philippines is not the only country to have been removed from the index in recent years. Russia got excluded in 2022 following the invasion of Ukraine, while Egypt was cut earlier this year after suffering dire shortages of foreign exchange.

A spokesperson for the Wall Street bank did not respond to Bloomberg’s e-mail and telephone call requesting comment. — Bloomberg

Banking, property boost SMIC’s Q2 profit to P21.8B

SMSUPERMALLS.COM

By Revin Mikhael D. Ochave, Reporter

SM Investments Corp. (SMIC) reported a 13% increase in its net income for the second quarter (Q2), reaching P21.8 billion, primarily driven by a strong performance in the banking and property sectors, which offset the impact of lower retail sales.

“[O]ur banks, property, and portfolio investments continued to deliver,” SMIC President and Chief Executive Officer Frederic C. DyBuncio said in a statement on Wednesday.

“We remain cautiously optimistic for the balance of the year,” he added.

Second-quarter consolidated revenue increased by 6% to P157.7 billion, SMIC said.

SMIC saw a 10% increase in its first-half consolidated net income to P40.2 billion from P36.5 billion last year.

Its January to June consolidated revenue rose by 5% to P301.4 billion from P286.7 billion in 2023.

The conglomerate’s banking segment accounted for 50% of total net earnings, followed by property at 27%, retail at 14%, and share of portfolio investments at 9%.

Sought for comment, AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said that SMIC is expected to have another “banner year,” with its first-half performance meeting expectations.

“It is in line with estimates. It’s only slightly behind the P40.4 billion we expected for the first half,” he said in a Viber message.

“Considering that the seasonality of SM’s earnings leans heavily towards the second half of the year, we can safely assume that the company is headed for another banner year,” he added.

However, he also said that SMIC’s property segment faces risks following the recent government ban on Philippine offshore gaming operators (POGOs).

“The biggest risk would be the effect of the POGO ban on SMIC’s property arm. Granted, they have limited exposure to POGOs, but they have a sizable portfolio of office spaces in the Bay Area. That’s one of the areas where we expect office vacancy to rise following the POGO ban, which could directly translate to lower lease rates. There could also be a knock-on effect on the residential side in terms of vacancies,” he said.

“Another potential risk is the return of weakness in consumer spending if the latest jump in inflation numbers is not a one-off as we expected,” he added.

The conglomerate’s banking business led by BDO Unibank, Inc. grew its first-half net earnings by 12% to P39.4 billion, driven by the momentum of its core lending and fee-based services.

Net interest income rose by 11% to P99.6 billion. Gross customer loans grew by 13% across all market segments, while total deposits increased by 13%.

China Banking Corp. recorded a 6% increase in its first-half net income to a record P11.4 billion on improved core lending and deposit-taking activities.

Net interest income rose by 19% to P30.4 billion as higher interest income offset the increase in interest expense. Gross loans climbed by 10% to P817 billion led by higher demand across market segments, while deposits increased by 14% to P1.3 trillion.

SMIC’s property unit, SM Prime Holdings, Inc., generated P22.1 billion in first-half consolidated net income, up by 13% from P19.4 billion in 2023.

Consolidated revenue increased by 8% to P64.7 billion from P59.9 billion in 2023.

SMIC said its retail business, led by SM Retail, saw a 9.5% decline in first-half net income to P7.6 billion from P8.4 billion as a result of a “high base effect from the impact of the lifting of mobility restrictions on consumption in 2023.”

SM Retail grew its first-half revenue by 4% to P196.9 billion from P188.5 billion in 2023.

“The second quarter reflected higher growth by 6% in retail revenues and 2% in net income, indicative of spending on discretionary items such as appliances, beauty, and fashion. Specialty retail revenues increased by 5%. Food retail revenues grew by 7%,” SMIC said.

As of end-June, SM Retail added 355 stores, bringing its total network to 4,208 stores.

Among its portfolio investments, SMIC said Atlas Consolidated Mining and Development Corp. more than doubled its first-half net income to P2.07 billion as revenue went up by 23% to P12.5 billion on higher copper metal prices.

The Philippine Geothermal Production Co., Inc. recently started the exploration and development of new geothermal energy sources in various parts of Luzon. This aims to support power security in Luzon and advance the country’s renewable energy objectives.

Logistics company 2GO Group, Inc. launched the 2GO M/V Masigla and 2GO M/V Masikap vessels in the second quarter, which will sail from Manila to destinations in Visayas and Mindanao. Both vessels will carry containerized freight and rolling cargo to businesses and consumers.

On July 18, SMIC listed $500 million worth of debt notes on the Singapore Exchange Securities Trading Ltd. The issuance came from the conglomerate’s $3-billion Euro Medium-Term Notes program established in May.

Final demand for the issuance reached $1.6 billion, marking SMIC’s largest offshore bond issuance since 2014.

“We were also pleased with the demand and positive feedback on our recent maiden Euro Medium-Term Notes issuance, highlighting the quality of our financials and the investability of strong Filipino companies,” Mr. DyBuncio said.

In a separate stock exchange disclosure, SMIC said its board also approved a property-for-share swap with its subsidiary Intercontinental Development Corp. (ICDC). The transaction involves ICDC landholdings in Muntinlupa City in exchange for new SMIC shares.

The conglomerate did not provide further details on the deal.

On Wednesday, SMIC shares rose by 1.14% or P10 to P890 apiece.

CEB profits halved to P1.31B amid soaring Q2 costs

CEBUPACIFICAIR.COM

CEBU Air, Inc. (CEB), the operator of budget carrier Cebu Pacific, saw its attributable net income plunge by 50.9% to P1.31 billion for the second quarter from P2.67 billion, mainly due to higher expenses during the period.

In a regulatory filing, Cebu Air reported a combined revenue of P26.14 billion, higher by 15.3% from the P22.67 billion in the same period last year.

Broken down, the company recorded passenger revenues of P17.85 billion for the second quarter, up by 12.7% from the P15.84 billion a year ago; cargo revenues increased to P1.38 billion, significantly higher from last year’s P866.9 million, and its ancillary revenues climbed by 15.6% to P6.9 billion, compared with P5.97 billion in the same period a year ago.

Cebu Pacific carried a total of six million passengers in the second quarter alone, the company said, describing the feat as its highest passenger count in a quarter in its entire history.

The company said its cargo business also soared, flying nearly 36 million kilograms of cargo for the April to June period.

Still, despite posting higher revenues, Cebu Air’s attributable net income for the second quarter declined, attributed to higher expenses during the period, its financial statement showed.

The operator of the budget airline registered gross expenses of P23.3 billion for the second quarter, marking a 15.6% increase from the P20.15 billion in the same period last year.

For the six-month period, Cebu Pacific’s attributable net income also declined to P3.55 billion, lower by 5.3% from the P3.75 billion in the first half of 2023.

Cebu Air reported gross revenue of P51.44 billion for the first half of 2024, climbing by 18.1% compared with the P43.55 billion in the January to June period last year.

Passenger revenues account for the majority of the company’s increase in top line for the period, at P35.68 billion, up by 18.4% year on year.

For the first half, Cebu Air’s gross expenses soared to P45.95 billion, higher by 15.5% from last year’s P39.79 billion, mainly driven by flying operations expenses.

Its flying operations expenses for the first semester increased to P19.15 billion, higher by 14.2% from P16.77 billion a year ago; however, its expenses in repairs and maintenance decreased slightly to P7.38 billion, down from P7.41 billion last year.

Despite posting lower earnings for the second quarter and first six months, Cebu Pacific Chief Executive Officer Michael B. Szucs described the company’s developments for the period as a “significant achievement.”

“This has been a very important quarter for our airline, marked by significant achievements and crucial milestones. We’ve set new highs in terms of passengers flown, finalized our quasi-reorganization, and made the historic order of up to 152 aircraft from Airbus,” Mr. Szucs said.

Earlier this month, Cebu Air secured the approval of the Securities and Exchange Commission for its restructuring plan aimed at clearing the company’s deficit.

On July 17, 2023, Cebu Air’s board of directors approved its proposal to pursue an equity restructuring of its deficit.

The company proposed to use its additional paid-in capital of P20.66 billion to clear its deficit amounting to P16.27 billion, leaving it with a capital of P4.39 billion.

In June, the company announced that it would order up to 152 A321neos worth P1.4 trillion, or $24 billion, described as the largest aircraft order in the country.

“This substantive commitment, through the new aircraft order, aligns CEB’s ability to grow with the robust economic story in the Philippines and its ongoing investment in infrastructure,” Mr. Szucs said.

Alexander G. Lao, president and chief commercial officer of Cebu Air, has said that the airline is actively exploring various financing strategies for its pending aircraft acquisition.

The company anticipates the commencement of aircraft deliveries in 2028, with the procurement contract slated to be finalized by the third quarter of this year.

At the stock exchange, shares in the company gained five centavos or 0.18% to end at P27.85 apiece. — Ashley Erika O. Jose

Sales boost Megaworld’s Q2 income to P4.15 billion

LISTED property developer Megaworld Corp. saw a 9% increase in its second-quarter attributable net income to P4.15 billion from P3.79 billion last year, driven by higher real estate sales.

Consolidated revenue for the April to June period rose by 27.8% to P20.22 billion from P15.82 billion in 2023, Megaworld disclosed in a stock exchange filing on Wednesday.

Second-quarter real estate sales increased by 31.5% to P12.7 billion from P9.66 billion the previous year.

Megaworld launched P18 billion worth of residential projects for the second quarter. These include 9 Central Park – West Wing at Northwin Global City in Bulacan, One Portwood Residences at Newport City in Pasay City, CostaVida Residential Resort at The Mactan Newtown in Lapu-Lapu City, Cebu, Lialto Beach and Golf Estates – Phase 1 at Lialto Beach and Golf Estates in Lian, Batangas, and Sonrisa Gardens at Baytown Palawan in Puerto Princesa, Palawan.

For the first half, Megaworld’s attributable net income grew by 8.6% to P8.55 billion from P7.88 billion in 2023.

From January to June, consolidated revenue increased by 22% to P39.1 billion from P32.04 billion last year.

Real estate sales during the first six months surged by 30% to P24.82 billion, spurred by strong bookings and high demand for Megaworld’s residential properties across township developments in Taguig City, Cavite, Bulacan, Palawan, and Cebu.

“We continue to see robust demand for our residential properties outside of Metro Manila. Before the year ends, we hope to launch more projects in the provinces as we remain on track to finish 2024 with 35 townships,” Megaworld President Lourdes T. Gutierrez-Alfonso said.

Megaworld Hotels & Resorts’ revenue during the first half jumped by 38% to P2.36 billion, bolstered by the resurgence of meetings, incentives, conventions, and exhibitions (MICE) activities and local tourism.

First-half leasing revenue increased by 6% to P9.33 billion. Megaworld Lifestyle Malls’ revenue grew by 19% to P3.02 billion, thanks to higher tenant sales and increased foot traffic. Occupancy rates reached 93% as of the end of June.

Megaworld Premier Offices maintained stable revenue at P6.31 billion despite challenges in the Philippine office industry. The company secured new leases of office spaces totaling about 55,000 square meters, mostly in McKinley Hill, Eastwood City, and The Mactan Newtown.

The occupancy rate across its office developments reached 87%, surpassing the current industry average.

Megaworld recently announced its 33rd township, San Benito Private Estate, which will be a 25-hectare integrated active wellness township developed in partnership with the group that owns and operates The Farm at San Benito medical wellness resort.

On Wednesday, Megaworld shares fell by 0.56% or one centavo to P1.77 per share. — Revin Mikhael D. Ochave

Nickel Asia says new projects target EV market

NICKEL ASIA Corp. on Wednesday said that it expects the operation of its three new mines to bolster the company’s nickel production amid increased demand.

“Our three new nickel projects, namely Dinapigue, Bulanjao, and Manicani, will supplement our annual nickel ore production volumes to help supply the ever-growing demand for nickel ore driven by both the stainless steel and electric vehicle (EV) markets,” Nickel Asia President and Chief Executive Officer Martin Antonio G. Zamora said in a statement.

Mr. Zamora added that the company has pipelined three new renewable energy projects to increase its goal of one gigawatt by 2028.

The company is expecting to start construction of the Subic-Cawag solar project by the fourth quarter of 2024.

Commercial operations are expected in the fourth quarter of the following year.

The company said that its solar project in Leyte is planned to be completed by the first quarter of next year. It is a joint venture between its unit Emerging Power, Inc. and Shell Overseas Investments B.V.

“Pre-development activities for a 45-MWp (megawatt-peak) solar project in Botolan, Zambales, are also ongoing,” it added.

For the second quarter, Nickel Asia reported that revenues declined by 3.7% to P5.81 billion from P5.82 billion a year ago.

The sale of ore and limestone for the April to June period slipped by 0.17% to P5.81 billion from P5.82 billion in 2023.

For the first semester, the company reported that its net income fell by 59.3% to P1.12 billion compared to P1.75 billion in the same period last year.

Revenues declined by 14.8% to P9.29 billion from P10.92 billion in the same period last year.

Due to lower nickel ore prices, the company’s ore and limestone sales dropped by 16.7% to P7.8 billion from P9.37 billion.

“The company realized P57.5 per US dollar from these nickel ore sales, a 4% increase from P55.33 last year,” it said.

The weighted average nickel ore sales price declined by 26% to $16.60 per wet metric ton (WMT) from $22.32 per WMT in the same period last year.

Shares of Nickel Asia rose by 4.76%, or 15 centavos, to close at P3.3 per share on Wednesday. — Adrian H. Halili

Expense cuts offset Globe’s Q2 revenue slide

GLOBE Telecom, Inc. saw an attributable net income of P7.74 billion for the second quarter, representing a 9.5% increase from the same period last year.

Gross revenues for the second quarter reached P44.32 billion, lower by 0.38% from P44.49 billion a year ago, the company’s financial report showed.

The company’s lower expenses for the period managed to offset its lower revenues, according to Globe’s financial report.

For the April to June period, Globe’s combined expenses reached P38.93 billion, marking a drop of 1.04% from the P39.34 billion previously.

For the six-month period, the Ayala-led telecommunications company managed to eke out an increase in its attributable net income despite flat revenue growth.

Globe also registered flat earnings of P14.55 billion, up by 1.6% from last year’s P14.32 billion.

Globe’s combined revenue for the first semester reached P89.63 billion compared with last year’s P89.52 billion.

Globe’s core net income, which excludes nonrecurring items and mark-to-market gains, reached P11.7 billion, higher by 20.6% from the P9.7 billion previously.

Broken down, service revenues reached P82.23 billion, marking an increase of 2.3% from P80.4 billion a year ago.

Among its service revenues, mobile revenues accounted for the biggest share at 71%, with P58.39 billion; home broadband at P12.1 billion; corporate data at P9.79 billion; fixed-line voice at P763 million.

To date, Globe said it is expecting mobile revenues to extend its gains, citing improving data consumption across all its brands.

The company is banking on a surge in mobile data traffic, which increased by 16% to 3,256 petabytes year on year, despite its mobile subscribers declining by 28% to 59.5 million.

“We are also thrilled that our landmark tower deal is nearing completion, with 88% of the covered towers successfully transferred to the towercos as of July, and we are on track to complete this transaction within the second half of the year,” Globe President and Chief Executive Officer Ernest L. Cu said.

Globe said it has generated P85.2 billion from its tower sales after fully transferring some of its tower assets to Frontier Tower Associates Philippines, Inc. (Frontier Towers).

The telco has closed the sale of 1,037 towers valued at P13.17 billion, marking the completion of 3,529 towers to be acquired by Frontier Towers.

Rizza Maniego-Eala, Globe’s chief financial officer, said the company will complete its tower sales within the year.

“We are hoping to complete 100% of our tower sales by this year. If we only complete about 92% by the end of December, we are still on track,” she said.

In total, Globe has transferred 6,628 towers, generating a total of P85.2 billion, out of the 7,506 towers planned for the sale and leaseback arrangement.

At the local bourse, shares in the company gained P52 or 2.39% to close at P2,230 each. — Ashley Erika O. Jose

ALI says ‘robust demand’ led to P13.1-B profit

LISTED property developer Ayala Land, Inc. (ALI) recorded a 15% increase in its first-half net income to P13.1 billion on “robust property demand and consumer activity.”

First-half consolidated revenue increased by 28% to P84.3 billion, ALI said in a stock exchange disclosure on Wednesday.

Residential reservation sales rose by 17% to P68.4 billion led by the premium and vertical segments.

The sales growth was driven by properties such as AyalaLand Premier’s Park Villas in Makati central business district and The Courtyards Phase 3 in Vermosa, Alveo’s Park East Place in Bonifacio Global City, and Sereneo in Nuvali, and Avida’s Verge Tower 1 in Mandaluyong.

ALI launched P33.7 billion worth of projects for the first half, of which 92% were from premium brands and 52% were horizontal developments.

Leasing and hospitality revenues increased by 10% to P22.1 billion due to the higher occupancy of Ayala Malls Manila Bay, the contribution of One Ayala Mall and Offices, Ayala Triangle Tower Two, Seda Manila Bay, and the higher occupancy of Seda Nuvali and Lio.

Shopping center revenues climbed by 8% to P11.1 billion while office leasing surged by 6% to P6.1 billion. Hotel and resort revenues improved by 19% to P5 billion.

Meanwhile, ALI’s service businesses, comprised of construction, property management, and airlines, saw a 51% increase in first-half revenue to P8.4 billion.

Net construction revenue of Makati Development Corp. doubled to P5.5 billion led by additional contracts from external projects.

Boutique airline AirSWIFT, property management, and retail electricity supply companies generated revenues of P2.9 billion, up by 2% on airline sales and property management fees.

“ALI is hitting its growth targets across all business lines and market segments. Residential sales outperformed expectations. We will continue to pursue our growth trajectory with a keen eye on capital efficiency,” ALI President and Chief Executive Officer Anna Ma. Margarita Bautista-Dy said in a media briefing in Makati City on Wednesday.

“We are reinventing our assets to deliver elevated and differentiated experiences to our customers, and we will continue to bring compelling and market-shaping residential offerings to Filipino homeowners,” she added.

ALI has spent P36.5 billion in capital expenditures as of end-June, of which 51% were spent on residential projects, 27% on estate development, 11% on commercial leasing assets, and 11% on land acquisition commitments.

On Wednesday, ALI shares rose by 5.08% or P1.45 to P30 per share. — Revin Mikhael D. Ochave

Exports drive Century Pacific Food’s profit up by 12% to P1.9B

LISTED Century Pacific Food, Inc. (CNPF) generated a 12% jump in its net profit for the second quarter to P1.9 billion from P1.7 billion in 2023, led by the exports segment.

The company increased its April-to- June revenue by 10% to P19.59 billion from P17.79 billion last year, CNPF said in a regulatory filing on Wednesday.

For the first half, CNPF recorded a 14% climb in its first-half attributable net income to P3.63 billion from P3.2  billion in 2023, led by “favorable trends in commodity costs.”

January-to-June consolidated revenue rose by 13% to P37.74 billion from P33.41 billion last year due to the recovery of its original equipment manufacturer (OEM) exports.

The bulk of CNPF’s revenues came from the branded business, composed of marine, meat, and milk & other segments, catering predominantly to the domestic market. The OEM exports segment, including tuna and coconut exports, accounted for about a fifth of its business.

OEM export sales rose by 36% versus the second quarter of last year, bringing the segment’s six-month growth rate to 42% year on year. Coming from a soft 2023, the segment rebounded in the first half on the back of improving commodity costs and favorable foreign exchange market conditions.

“Following a high base, the branded segment delivered a 5% growth rate during the three-month period amid a strained consumer environment, laddering up to a 7% year-on-year increase in first-half sales versus the same period last year,” CNPF said.

Meanwhile, CNPF reiterated its outlook of aiming for a low double-digit growth for both its top line and bottom line for 2024.

On Wednesday, CNPF shares rose by 1.96% or 65 centavos to P33.75 per share. — Revin Mikhael D. Ochave

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