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Gov’t collected P1.4 trillion of revenue as of April — Recto

People line up to file their income tax returns at the Bureau of Internal Revenue office in Intramuros, Manila, April 18, 2022. — PHILIPPINE STAR/ RUSSELL A. PALMA

THE GOVERNMENT collected P1.4 trillion in revenue in the first four months of 2024, accounting for almost a third of its full-year target, preliminary data from the Finance department showed.

“My calculation is we are at P1.4 trillion. That’s for the first four months,” Finance Secretary Ralph G. Recto told reporters in mixed English and Filipino on the sidelines of an event on Monday.

Preliminary figures from the department showed that Bureau of Internal Revenue (BIR) collections reached P912.9 billion.

The agency is expected to generate P3.055 trillion this year. It collects about 70% of the government’s overall revenues.

Meanwhile, data from the Bureau of Customs (BoC) showed that it had collected P299.674 billion as of end-April. It aims to collect P959 billion this year.

The Finance department also recorded nontax revenues worth P206.4 billion in January-April, data showed.

“We expect both our tax and nontax revenues to dramatically increase over the coming months as we intensify our revenue mobilization efforts,” Mr. Recto said.

If the pace of its revenue performance continues, the government can meet its fiscal targets, Mr. Recto said. “It’s the first four months of the year. Let’s see if it’s sustainable for eight more months.”

This year, the government is expected to generate P4.3 trillion in revenue, equivalent to 16.1% of the gross domestic product (GDP).

Mr. Recto said there are no plans to increase revenue targets.

“I doubt it very much. As far as (we’re) able to collect what is targeted already, I’m happy with that,” he said.

The budget balance is also expected to remain in a deficit, he added.

“You will always have a deficit. Your debt will increase this year. There’s no doubt about that.”

Latest data from the Bureau of the Treasury (BTr) showed the National Government’s budget deficit widened by 0.65% to P272.6 billion in the first quarter.

The government set a budget deficit ceiling of P1.48 trillion this year, equivalent to 5.6% of GDP. It aims to reduce the deficit-to-GDP ratio to 3.7% by 2028.

GLOBAL BONDS
Meanwhile, Mr. Recto said the BTr is finalizing its first global bond offering for the year.

“The Treasury is timing the market. I think it’ll be within the first half,” he said, noting that most of the global bond offerings this year would be dollar-denominated.

The government’s last global bond issuance was its Sukuk bond offering in December, when it raised $1 billion from its first-ever sale of Islamic bonds.

“We’re open to (other) bonds, whatever is cheap and has less risk,” Mr. Recto added.

The government’s borrowing mix favors domestic sources (75%) to mitigate foreign currency risks. Its borrowing program is set at P2.57 trillion this year. — Luisa Maria Jacinta C. Jocson

Progress of 2025 budget on track, says DBM

BW FILE PHOTO

By Beatriz Marie D. Cruz, Reporter

GOVERNMENT AGENCIES have turned in their 2025 budget proposals to the Department of Budget and Management (DBM) as of end-April, with next year’s spending plan still on track for submission to Congress by July, Budget Secretary Amenah F. Pangandaman said.

“Our preparation for the 2025 national budget is well on schedule,” she said in a Viber message.

“While agencies were able to submit their proposals as of April 30, some are still in the process of providing complete documentation in support of their budget proposals, such as detailed listings, inventory and other similar materials that will prove the implementation readiness of the proposals,” she said.

The National Government’s (NG) spending plan for 2025 is set at a record-high P6.2 trillion, 7.5% or P432.4 billion higher than this year.

This would be equivalent to 21.4% of the gross domestic product (GDP).

“Our Budget Preparation and Execution Group was also able to complete the technical budget hearings on April 30,” Ms. Pangandaman added. The group provides agencies with inputs and recommendations for their budget allocations.

The proposals are now with the DBM’s Preliminary Executive Review Board (ERB), which is set to review them until May 10, according to the Budget chief.

“The Final ERB is tentatively scheduled from May 29 to June 4,” Ms. Pangandaman said.

The ERB, composed of the Budget chief and senior officials of the agency, aims to ensure that priority programs and their respective budgets are in line with the National Government’s agenda.

The DBM will then finalize the National Expenditure Plan and Budget of Expenditures and Sources of Financing, which will be presented to the President and Cabinet members.

“Meanwhile, the scheduled presentation to the President and the Cabinet is on the third week of June, to have ample time for final decisions before printing of the budget documents. Submission of the President to Congress is tentatively targeted on July 22, 2024,” Ms. Pangandaman added.

Under the Constitution, the President must submit its proposed budget to Congress 30 days after the State of the Nation Address. The government wants its spending plan passed before yearend to ensure timely implementation of its projects in 2025 and sufficient funding for public services.

HUMAN CAPITAL DEVELOPMENT
Meanwhile, the DBM in a memorandum reminded agencies to prioritize human capital development in their budgets.

“The NG remains committed to balancing fiscal sustainability while ensuring that the country’s development needs are addressed,” the DBM said in National Budget Memorandum No. 152 dated April 30.

In particular, key programs/activities/projects (PAPs) on education, health and social protection, and labor force productivity should be given higher funding, the department said.

Larger budgets should also be allocated to agriculture, tourism, and micro, small, and medium enterprises, as well as the digitalization of government services.

The DBM also told government agencies to include only the key PAPs indicated in its March 19 memorandum in their Tier 2 proposals for new and expanded programs, as it noted that budgets for Tier 1 proposals — requirements of ongoing projects — are expected to take the bulk of available funding.

“Implementation-ready PAPs that can be completed within the fiscal year, or until the allowable implementation period as provided in the applicable general and special provisions of the General Appropriations Act (GAA), if any, shall be accorded top priority in line with the principles of Cash Budgeting System,” according to the memorandum.

NG agencies were also asked to use existing funds from this year’s budget for the continued implementation of their activities. Maintenance and other operating expenses and capital outlays under the 2024 GAA are valid until end-2025.

“The indispensable role of government in stirring domestic economic activity cannot be overstated,” the DBM said, noting that the underperformance in government spending in the first half of 2023 had affected economic output.

“Swifter budget utilization, coupled with the efficient implementation of PAPs, will be vital for full economic recovery.”

“Agencies are, therefore, urged to continue their efforts to strengthen budget execution and maximize the early release of allotments under the General Appropriations Act as the Allotment Order policy by undertaking proper planning and early procurement, and ensuring comprehensive preparatory works are completed. These include an improved targeting and distribution system for beneficiaries of social programs, as well as preconstruction activities like the acquisition of right-of-way/relocation sites for infrastructure projects, among others,” it added.

ICTSI profit up 35.7% on strength of int’l portfolio

ICTSI.COM

RAZON-LED International Container Terminal Services, Inc. (ICTSI) saw its attributable net income climb by 35.7% to $209.88 million for the first quarter (Q1), boosted by its international portfolio.

“The group continues to benefit from geographic diversification spanning 19 countries which has enabled us to deliver growth, despite regional economic headwinds,” ICTSI Chairman and President Enrique K. Razon told the stock exchange on Monday. 

For the January-to-March period, the company’s attributable net income went up to $209.88 million, marking a 35.7% increase from $164.61 million in the same period last year. 

The company’s combined revenues surged to $637.65 million, up by 11.4% from $572.25 million a year earlier, its financial report showed.

Broken down, its US operations accounted for the majority, or about 41.1% of its revenues at $262.27 million; Asia at $259.37 million or 40.7%, and EMEA, or Europe, the Middle East, and Africa’s operations at $116.01 million, accounting for 18.2%.

“I am pleased to announce an excellent first quarter with ICTSI delivering growth in revenues of 11%. Our international portfolio performed exceptionally well,” Mr. Razon said.

“We look to the future with confidence, and with our highly disciplined business model we remain strongly positioned to continue to deliver financially and operationally for all our stakeholders.”

The listed port operator said it handled a combined volume of 3.09 million twenty-foot equivalent units (TEUs) in the first quarter, lower than the 3.1 million TEUs handled in the first quarter last year.

The lower volume handled during the period was due to the expiration of the concession contract at the Pakistan International Container Terminal and the termination of cargo handling operations at PT Makassar Terminal Services in Indonesia, ICTSI said.

However, the impact of these were mitigated by the improvement in trade activities at certain terminals and its new services, it added.

Capital expenditures (capex), excluding capitalized borrowing costs for the first quarter, amounted to $67.94 million, which was allocated for the ongoing expansion at ICTSI-Contecon Manzanillo and ICTSI-Rio in Brazil, as well as for the expansion of terminals in the Philippines, the company said.

Earlier, the company said it projected a $450-million capex for the year, $60 million of which were carried over from last year’s capex.

The company said its target budget for 2024 was allocated for its recently acquired terminal in Iloilo, the Visayas Container Terminal, formerly known as the Iloilo Commercial Port Complex; expansion in Brazil; the development of the East Java Multipurpose Terminal in Indonesia; and its ongoing expansions in Mexico and the Democratic Republic of Congo.

At the local bourse on Monday, shares in the company gained P5 or 1.46% to end at P347 apiece. — Ashley Erika O. Jose

SM Prime net income jumps 11% to P10.5 billion

SY-LED property developer SM Prime Holdings, Inc. said its consolidated net income grew by 11% to P10.5 billion for the first quarter (Q1) from P9.4 billion last year, driven by improvements across its business segments.

First-quarter consolidated revenues increased by 7% to P30.7 billion compared with P28.6 billion in 2023, SM Prime said in a stock exchange disclosure on Monday.

The company’s mall business posted a 7% revenue growth to P18.2 billion. It took up 59% of overall revenues.

Mall rental income climbed by 8% to P15.8 billion, while other revenues, including cinema and event ticket sales, reached P2.5 billion.

The company’s primary residential business group recorded a 10% increase in revenues to P8.5 billion from P7.7 billion last year, accounting for 28% of overall revenues. Reservation sales reached P26.5 billion during the period.

Revenues of other business segments consisting of offices, hotels, and convention centers saw a 9% growth to P3.4 billion.

Broken down, the company’s office business unit reported P1.8 billion in revenues, while hotels and convention centers business unit reached P1.6 billion in revenues.

SM Prime’s first-quarter consolidated operating income rose by 6% to P14.7 billion from P13.8 billion last year.

“We are encouraged with the performance of all our businesses this first quarter of 2024. We are particularly bullish with our malls business as we plan to open a new mall this month of May, and another three within the year,” SM Prime President Jeffrey C. Lim said.

“For the residential business, our focus remains in addressing housing backlog within the socialized and economic segments,” he added.

SM Prime is the property unit of the Sy family’s listed holding company SM Investments Corp. It earmarked P100 billion for its capital expenditure budget this year.

On Monday, SM Prime shares dropped by 0.18% or five centavos to P27.35 per share. — Revin Mikhael Ochave

AboitizPower profit climbs to P7.9 billion in Q1

ABOITIZPOWER.COM

ABOITIZ Power Corp. (AboitizPower) announced on Monday that its net income increased by 4% to P7.9 billion for the first quarter from P7.5 billion in the same period last year.

“AboitizPower continued its strong performance in the first quarter of 2024, building on its successful 2023,” AboitizPower President and Chief Executive Officer Emmanuel V. Rubio said in a statement.

Excluding nonrecurring items, the energy company of the Aboitiz group reported a core net income of P7.8 billion, up 3% from P7.6 billion a year ago.

Its generation and retail electricity supply business registered a 5.3% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) to P13.8 billion.

Capacity sold in the three-month period increased by 1% to 8,812 gigawatt hours (GWh) from 8,725 GWh previously.

AboitizPower’s power distribution business recorded an EBITDA of P2.6 billion, a decrease of 11% due to “favorable timing in pass-through charges that were recognized in 2023 resulting from declining fuel prices.”

Energy sales grew by 9% to 1,526 GWh due to higher demand driven by the effect of the El Niño weather phenomenon, the company said.

“Looking ahead, we’re excited about the new growth drivers emerging this quarter. By leveraging these opportunities, we remain confident in our ability to unlock shared success for all our stakeholders,” Mr. Rubio said.

For 2024, AboitizPower has set aside P73 billion in capital expenditures (capex), higher than the P26 billion in 2023. Of the total, 72% is earmarked for its renewable energy pipeline.

The energy company aims to build 3,700 megawatts (MW) of new renewables, which will grow its capacities to 4,600 MW by 2030.

As part of its initial expansion phase of 1,200 MW, renewable energy projects totaling a capacity of 176 MW are set to come online in the first half of 2024.

This includes the 17-MW binary geothermal power plant in Tiwi, Albay, and the 159-MW solar plant in Laoag, Pangasinan.

The company said construction for an additional 218 MW is ongoing.

“The second phase of AboitizPower’s expansion will see another 1,700 MW of new solar and wind power,” it said.

Meanwhile, the rest of the P73-billion budget for the year is allocated for further improving the reliability of the company’s baseload power plants, land acquisition, and new substations and meters for its distribution business.

The capex does not yet include the investment in Chromite Gas Holdings.

In March, AboitizPower, through its subsidiary Therma NatGas Power, entered into an investment agreement with Meralco PowerGen Corp. to acquire a 40% stake in Chromite Gas.

The investment involves two gas-fired power plants — the 1,278 MW Ilijan power plant and a new 1,320 MW combined cycle power facility — as well as a liquefied natural gas import and regasification terminal. — Sheldeen Joy Talavera

SMPC income down 28% on weaker market prices

SEMIRARA Mining and Power Corp. (SMPC) posted an attributable net income of P6.54 billion for the first quarter, down by 28% from the previous year due to lower selling prices for coal and electricity.

“While we faced some pricing challenges this quarter, our robust export sales and improved plant performance demonstrate the resilience and adaptability of our operations,” SMPC President and Chief Operating Officer Maria Cristina C. Gotianun said in a statement on Monday.

For the January-to-March period, the company’s revenues declined by 11% to P18.43 billion from P20.71 billion in the same period last year.

This was attributed to the “softer market prices for both coal and power segment coupled with higher proportion of noncommercial grade coal shipments.”

SMPC said that the decline in revenues was cushioned by increased coal shipments and electricity dispatch.

The average selling price for Semirara coal declined by 33% to P2,978 per metric ton (MT) from P4,427 per MT in the previous year.

Coal sales went up by 37% to 4.8 million MT, mainly driven by exports which soared by 78% to 2.7 million MT.

Total coal shipments increased by 37% to 4.8 million MT, boosted by strong Chinese and international demand.

Foreign shipments went up by 78% to 2.7 million MT as China sales more than doubled to 2.3 million MT.

Domestic shipments rose by 6% to 2.1 million MT due to an uptick in internal sales, as the company recorded its highest overall plant availability at 92%.

“With better overall plant availability, gross generation increased by 7% from 1,316 gigawatt hours (GWh) to 1,408 GWh,” the company said.

The average selling price for SMPC’s electricity dropped by 28% to P4.47 per kilowatt-hour largely due to the sharp drop in the Wholesale Electricity Spot Prices.

Electricity sales volume grew by 3% to 1,281 GWh due to higher bilateral contract quantity (BCQ) sales, which offset the decline in spot market dispatch for the period.

BCQ sales rose by 38% to 499 GWh while spot sales decreased by 11% to 782 GWh.

During the company’s annual stockholder’s meeting, Ms. Gotianun said that Narra mine has remaining reserves of approximately 45 million MT as of yearend 2023.

“Assuming demand remains stable, primarily from the domestic market, we believe an annual shipment of 16 million MT is sustainable until 2026,” she said.

She also said that exploration activities at the Acacia mine are ongoing, “which could sustain our coal operations for an additional four years.”

The company expects coal demand in China to remain stable in the near to medium term “given its important role in their energy security program,” she noted.

“Coal is not only a primary source of energy but also a critical backup that ensures supply stability. RE (renewable energy) sources typically provide intermittent output so China relies on coal to achieve a consistent energy supply,” she added.

“We do not foresee a rapid decrease in their coal consumption anytime soon.”

Shares of the company on Monday went down by P0.55 or 1.68% to close at P32.20 each. — Sheldeen Joy Talavera

EEI board clears creation of new subsidiary 

EEI Corp. said its board of directors has approved the establishment of a new subsidiary and the subscription to shares worth P500 million.

In a stock exchange disclosure, EEI said the wholly owned subsidiary is designated to acquire and hold interest in various potential businesses. 

“The company to be registered with the Securities and Exchange Commission (SEC) will be a holding company intended to acquire and hold interests in various potential business,” EEI said in its regulatory filing.

EEI will subscribe to a total of 500 million shares priced at P1 apiece, amounting to a total of P500 million, representing 100% of the company’s outstanding shares.

It said the closing of the share subscription is still pending approval from the Securities and Exchange Commission.

In the company’s previous disclosure, it mentioned that it had received the certificate of incorporation from the SEC for EEI Ventures, Inc.

Established in 1931, EEI has business interests in construction services and the distribution of industrial and machinery systems.

EEI is primarily engaged in the construction of power-generating facilities, oil refineries, chemical production plants, rails, ports, expressways, and high-rise towers.

Its subsidiaries include EEI Ltd., EEI Construction and Marine, Inc., and  EEI Power Corp. 

In 2023, the company reported an attributable net income of P149.67 million, lower by 28.5% from P209.21 million in a year earlier, due to higher expenses for the period, according to its financial statement 

Last year, the company’s revenues went up to P18.75 billion, 28% higher from the P14.65 billion in 2022.

The company’s combined expenses for 2023 climbed 13.6% to P16.21 billion from P14.27 billion in 2022.

At the local bourse on Monday, shares in the company shed 22 centavos or 4.19% to end at P5.03 apiece. — Ashley Erika O. Jose

20  years later, we are still talking about The Day After Tomorrow

10 books, movies, and TV shows that incorporate climate change

By Olivia Rudgard

MENTION climate change fiction, and someone will inevitably bring up The Day After Tomorrow. In the blockbuster released 20 years ago this month, disruption to the North Atlantic Current plunges the United States and United Kingdom (UK) into an icy winter. Tornadoes destroy Los Angeles, a wave slams into New York City, and helicopters freeze in mid-air.

The legacy of The Day After Tomorrow is complicated. Scientists are split between crediting the movie with fostering mass awareness of climate change, and criticizing it for misinforming and frightening its audience. As a teenager, I remember watching it with confusion and terror. How likely was any of this to happen? And isn’t climate change meant to make the world hotter?

Apart from the liberties it takes with climate science, the film and others like it might even be harmful for public perception of climate change, says Pietari Kaapa, a professor of media and communications at Warwick University in the UK. “People might talk about the spectacular effects or some aspects of the storylines,” he says. “But it doesn’t necessarily mean that there’s actually any real change happening as a result.” Apocalyptic tales can also flatten a threat, Mr. Kaapa notes, removing it enough from reality to make it effectively useless as a tool for public awareness.

But while the climate-disaster genre is something of a staple, research suggests the climate change stories we tell are also changing over time. Good Energy, a nonprofit consultancy that researches and shapes climate change narratives in film and TV, recently put out a report that showed an overall uptick in climate change in popular films: The theme was present in nearly a quarter of films released in 2021-22, compared to 10% in 2013-14. (Good Energy is funded by Bloomberg Philanthropies, the philanthropic organization of Michael Bloomberg, the founder and majority owner of Bloomberg LP, which owns Bloomberg News.)

Authored by Matthew Schneider-Mayerson, an associate professor at Colby College, the Good Energy report also captures a shift in the types of climate change stories we see in films — from climate-as-antagonist in epic superhero tales to inclusion in a wider range of narratives. Climate themes have popped up in TV shows as diverse as Borgen, True Detective, Insecure, and Madam Secretary. In Oscar winner Parasite, climate change is never explicitly mentioned but quietly underpins the plot, as a poor family is flooded out of their home and their wealthy counterparts barely notice. Knives Out: Glass Onion, a lighthearted Netflix murder mystery, satirizes false climate solutions. In the Ari Aster horror Midsommar, a character observes that “it’s the hottest and brightest summer on record.”

So why does climate change in fiction matter? Partly, it’s about portraying the real world accurately. Films set in the present or near future that ignore global warming “should be considered what they are: fantasy,” says Mr. Schneider-Mayerson’s report.

But it’s also about the power storytelling has to help people come to terms with a changing world. “The more that we see it included or highlighted in all of the narratives that we’re exposed to, the more likely we are to really prioritize it, to think about it as a public issue that demands attention and demands immediate action,” Mr. Schneider-Mayerson says. More realistic and human storylines make it easier for the viewer to relate to the challenges ahead.

The most recent crop of climate stories heed this advice, focusing on ordinary people and their regular lives as they struggle to make the best out of what they have. In literature, Kim Stanley Robinson’s The Ministry for the Future and Megan Hunter’s The End We Start From focus on what might happen in the boardrooms, climate conferences, and living rooms of the very near future.

It’s easy to imagine yourself as Ms. Hunter’s unnamed protagonist, forced to flee her London home and fend for herself and her baby in a flooded, unstable Britain. Or to see yourself in Mr. Robinson’s stoic heroine, Mary Murphy, grimly watching as the world is overtaken by climate calamity while trying to usher in systems and policies that might stem the tide. Both books also end on a hopeful note, merging a vision of tragedies ahead with roadmaps to better things.

The Last City, a climate fiction podcast from Wondery, is set in a futuristic, tech-forward refuge from a climate-ravaged US. Characters all have their own personal AI and appear to live healthy, peaceful lives, but their community is hiding a dark secret. Lead writer Carmiel Banasky describes her story, set in 2072, as a “protopia” — neither utopia or dystopia, but a third way in which life improves in “incremental and realistic ways.”

The Last City is a thriller and a mystery, but Ms. Banasky, who usually writes family comedy-drama, says she also wanted to show how families, friendships, and romantic relationships develop in a world dealing with climate change. One emblematic tension exists between main character Demetria and her mother, a former activist whom Ms. Banasky conceived of as a “Greta [Thunberg] all grown up.” As a youngster, Demetria was “pushed onto the stage to speak about climate when she just wanted to play,” says Ms. Banasky, a dilemma many modern activists face with their own children.

These intergenerational relationships are also a key part of my favorite piece of climate fiction: the 2017 comedy mockumentary Carnage, made by the British comedian Simon Amstell. Climate change has a bit part in the story, which is set in the UK in 2067, when eating meat and dairy has become taboo and an older generation must face their past transgressions. The story is keenly focused on how people can come to terms with the guilt of having lived in a way now deemed wrong. It’s also set in a world that looks familiar. We can easily put ourselves in the shoes of those people, looking back and wondering what they might have done differently. — Bloomberg

 


10 books, movies, and tv shows with climate themes

Extrapolations (2023). With sweeping, global scope and a star-studded cast, Apple TV’s Extrapolations follows eight stories over 33 years, looking at climate from every angle — including religion, tech, nature, and family life.

3 Body Problem (2024). Based on the books by Liu Cixin, in this Netflix series, ecological destruction pushes one major character to a momentous decision. The central question it poses — how to deal with intelligent and potentially hostile aliens coming to colonize earth 400 years from now — makes for a powerful climate allegory.

The Ministry for the Future, by Kim Stanley Robinson (2020). A climate policy nerd’s bible, The Ministry for the Future offers a chorus of global voices describing suffering and salvation as a near-future world muddles its way through climate catastrophe.

The End We Start From (2023). This movie, based on Megan Hunter’s moving novel, is a quiet antidote to bombastic, big-budget disaster films. How might one new mother and her baby survive through a catastrophic flood? The answer is unexpectedly beautiful.

Flight Behavior, by Barbara Kingsolver (2012). Many of Ms. Kingsolver’s books have environmental themes, but here it’s right at the center of the story. A poor Appalachian housewife discovers that a valley near her house is full of Monarch butterflies displaced by climate change — opening the door to a new life but also complex questions about how best to live it.

Parasite (2019). Bong Joon Ho’s Oscar-winning movie is about class, wealth and inequality, but it’s also (subtly) about climate change. A poor family’s basement home is destroyed when a rainstorm leads sewers to overflow, while a rich family simply suffers a ruined holiday.

The Commons (2019). This Australian drama, starring Joanne Froggatt of Downton Abbey fame, follows a woman’s struggle to have a baby in a world affected by climate-related disease and disaster.

How to Blow Up a Pipeline (2022). An against-the-clock thriller that follows a highly organized band of activists as they attempt to sabotage an oil pipeline. Loosely based on Andreas Malm’s nonfiction book, it brings to life his radical ideas about the case for property destruction in response to the climate crisis.

Annihilation, by Jeff VanderMeer (2014). This creepy, atmospheric sci-fi horror novel, adapted into a movie in 2018, is about a mysterious fungal force causing bizarre mutations in the natural world. It covers themes including humanity’s frailty and disconnection from nature.

Fortitude (2015). An unsettling slow-burn horror series, Fortitude is set in an Arctic community in which nothing bad ever happens — until environmental collapse brings gruesome results. — Bloomberg

Wilcon Depot profit drops 23.1% to P740M

@WILCONDEPOT.PH

LISTED home improvement and finishing construction supply retailer Wilcon Depot, Inc. recorded a 23.1% decline in its first quarter net income to P740 million from P962 million last year due to lower net sales.

The company’s first-quarter net sales fell by 2.5% to P8.31 billion from P8.53 billion in 2023 due to weaker sales, attributed to the long Easter holiday season falling in March this year compared to April last year, Wilcon Depot said in a stock exchange disclosure on Monday.

The net sales of the company’s depots reached P7.97 billion, down 4% year-on-year, with same-store sales declining by 7.9%. They accounted for 95.9% of the total net sales during the quarter.

The Do-It-Wilcon (DIW) format stores, comprising 2.8% of total net sales, saw a 37.2% total sales growth to P232 million for the quarter, with same-store sales declining by 10.9%.

“For both formats, Metro Manila stores recorded the highest decline as these stores also registered the highest same store sales growth in the first quarter of 2023,” Wilcon Depot said.

Project sales increased by 108.1% to P105 million, accounting for the remaining 1.3% of total net sales.

“Our earnings for the first quarter may have declined 23% year-on-year, but it’s still higher than any quarter’s earnings prior to 2022,” Wilcon Depot President Lorraine Belo-Cincochan said.

“This quarter’s performance was driven primarily by the considerable year-on-year drop in March sales because of the Easter holidays falling in March this year and exacerbated by the fact that March last year was our highest grossing month. Our April year-on-year sales growth reversed the decline in March and we are hoping that our improving average daily sales will be sustained from here on,” she added.

Wilcon Depot’s gross profit dropped by 1.3% to P3.32 billion. Operating expenses including lease-related interest expense surged by 6.9% to P2.47 billion due to expansion-related expenses such as depreciation and trucking.

In the first quarter, Wilcon Depot opened one depot in Mindanao as well as two DIW format stores, with one in Mindanao and one in Luzon.

“We are still on track to reach our 100-store target by the end of the year,” Ms. Belo-Cincochan said.

“We are looking forward to better results in the future as we work towards improving our performance to reach or even beat our 2022 results,” she added

Wilcon Depot shares climbed by 1.2% or 20 centavos to P16.90 each on Monday. — Revin Mikhael D. Ochave

BINI prepares for first major concert

BINI performs their smash hit ‘Pantropiko’ on Samsung Philippines’ livestream on Facebook. — FACEBOOK.COM/SAMSUNGPH

WITH a three-day solo concert coming up in June, P-pop girl group BINI has been busy practicing in private and performing publicly on smaller stages in the lead-up to the major gig.

On May 2, BINI members Mikha (a.k.a. Mikhaela Janna Lim), Aiah (Maraiah Queen Arceta), Colet (Nicolette Vergara), Maloi (Mary Loi Yves Ricalde), Gwen (Gweneth Apuli), Stacey (Stacey Aubrey Sevilleja), Jhoanna (Jhoanna Christine Robles), and Sheena (Sheena Mae Catacutan) talked of their summer plans in a Facebook livestream — most of which are preparations for the concert, with vacation and travel on the side.

The stream was hosted by Samsung Philippines, the latest brand that they now endorse. The BINI members, clad in pastel blues and purples, opened the livestream by singing and dancing to their smash hit “Pantropiko.” Then, they settled in, to give away prizes to viewers and tell all about their recent endeavors.

“Summer plans namin ay concert kasi iyun ang naka-schedule (Our summer plans are concerts because that’s what’s scheduled). We already have a month-long schedule planned for us,” said Aiah.

Before that, though, she traveled a bit to Vietnam and to Hong Kong. Meanwhile, Gwen opted to vacation at a beach resort with her family.

Jhoanna, despite being an only child, was said to be notorious for bringing home two barangays’ worth of pasalubong for her extended family in Laguna. Aiah, ever the conscientious traveler, was revealed as the one most likely to overpack her luggage.

The members also discussed how their first solo concert, BINIverse — set to run on June 28, 29, and 30 at the New Frontier Theater in Quezon City — was sold out.

It was initially meant to be a one-day gig, but in less than two hours, all tickets for that day were snapped up by the public, according to the group’s leader Jhoanna. This led to many Blooms (the name for BINI fans) crying online about how they weren’t able to secure tickets.

BINI then decided to add two more performances to accommodate their fans.

Tinanong ng management kung kaya namin at nag-meeting muna kaming girls at nagkasundo na mag-day two and three para sa Blooms namin (Management asked us if we could do it and, after we girls had a meeting, we agreed to add a second and third day for our Blooms),” said Jhoanna.

Last week was a particularly hot one for the girls, both onsite and online. Their April 30 appearance at the Bangus Festival in Dagupan, Pangasinan, was cut short after an unconfirmed number of audience members fainted amid a heat index that soared to 48°C.

It was around this time that Star Music announced BINI’s achievement of four million monthly Spotify listeners, a mere three years after their debut in 2021 with the single “Born to Win.”

In March, BINI really took off after releasing their extended play Talaarawan, which included the viral tracks “Pantropiko” and “Salamin, Salamin.”

Asked why they continue to do mall shows and festivals despite the heat, their undeniable success, and the major concert coming up, Stacey said, “Gusto namin ikutin ang Pilipinas — Luzon, Visayas, at Mindanao — para di magtampo ang mga Blooms. Gusto namin ma-treat sila nang maayos.” (“We want to travel the Philippines — Luzon, Visayas, and Mindanao — so that our Blooms won’t sulk. We want to treat them right.”) — Brontë H. Lacsamana

More retailers seen to occupy transit-oriented spaces

FREEPIK

COLLIERS Philippines said it expects an increase in retailers occupying transit-oriented retail spaces due to the rise in public transport infrastructure projects.

“A lot of retailers (will) occupy mall spaces within the transit-oriented retail spaces,” Colliers Philippines Associate Director Joey Roi H. Bondoc said during a press briefing last week.

“You have all these infrastructure projects that will be completed between 2024 to 2029,” he added.

Mr. Bondoc cited One Ayala, launched in 2022, which is directly linked to the Manila Metro Rail Transit System (MRT)-3.

Similarly, the Araneta City Terminal is situated near residential and office towers as well as the MRT-3, Light-Rail Transit 2, and the Araneta City Bus Terminal.

The viability of transit-oriented development provides a lot of optimism for developers as infrastructure projects ensure high consumer traffic and spending from commuters, he said.

Under the revamped Build Better More program, Mr. Bondoc noted that it is fitting for retailers to lease out brick-and-mortar spaces within the infrastructure projects expected to be completed between 2024 and 2029.

“Looking at Ninoy Aquino International Airport (NAIA), which will be expanded, modernized, capacity of 32 million, New Manila International Airport in Bulacan, 35 million, MRT 7, MRT 3, capacities of 350,000, 800,000 for the North-South Commuter Railway,” he said.

Among these is the 36-kilometer Metro Manila Subway which is seen to provide 520,000 capacity that spans from Quezon City to NAIA in Pasay.

Colliers also reported developers renovating their retail spaces, such as Uniqlo in SM Mall of Asia, Timezone in Trinoma, Shangri-La Plaza Mall in Puma, Bayo in Glorietta and more.

Additionally, food and beverage (F&B) and fast fashion retailers continue to lead retail space uptake as they occupy a significant portion of the available physical retail space in the market.

About 43% of upcoming retailers in the first quarter are attributed to F&B, followed by 35% for fashion, beauty, and health, with technology accounting for 6%.

Mr. Bondoc said that Ayala Land has earmarked P13 billion for the redevelopment of its malls, with most projects expected to be completed by 2026, including Glorietta, Ayala Center Cebu, Trinoma, and Greenbelt 2.

Colliers forecasts the vacancy rate to decline to 17% by the end of 2024, driven by the annual completion of retail space totaling 162,300 square meters over the three years from 2024 to 2026.

Selected upcoming projects between 2024 and 2027 include Bridgetowne Opus Mall in Quezon City, the expansion of SM Mall of Asia in the Bay Area, and Ayala Mall Arca South.

Makati has Greenbelt 1 and 2 redevelopments.

Meanwhile, the vacancy rate rose to 15.5% for the first quarter of 2024, which is the industry average for the Metro Manila sector. This is higher than the 14.4% recorded quarter on quarter, attributed to new mall openings.

INCOMING STOCK TO INCH UP VACANCY LEVEL
In a similar trend, incoming office stock will marginally increase the vacancy level to 19.6% by 2024 from 19.3% last year.

“We expect vacancy to remain below 20%, marginally increasing to 19.6% by the end of the year, since we are still expecting over half a million of the office space will be expunged from the line this year,” Kevin Jara said.

Colliers reported a 19% vacancy rate for the first quarter of 2024 or about 2.7 million square meters (sq.m.) of vacant spaces.

Mr. Jara said vacancy remains flat and inched from 19.3% in the last quarter.

“We’re expecting 553,000 sq.m. to be completed this year and that number will taper to 300,000 sq.m. to 400,000 sq.m. annually until 2027 as we still see the developers rationalizing their office pipeline,” he said.

Colliers expects the office stock to reach 365,000 sq.m. in 2025, 463,000 sq.m. in 2026, and 405,000 sq.m. in 2027.

About 63% of new buildings in the next four years will be Grade A.

Quezon City’s stock is seen to last with 67,000 sq.m. in 2027. Bay Area, Quezon City, and Makati Fringe are expected to contribute half of the new supply this year.

The vacated spaces also rose 37% to 161,000 sq.m. in the first quarter of 2023.

In terms of net take-up, the consultancy firm is expecting it to reach 366,000 sq.m. by the end year of 2024.

Year on year, Mr. Jara said the office space transaction rose 88% to 240,000 sq.m. in the first quarter of 2024 from 128,000 sq.m. in the first quarter of 2023.

However, this is 27% lower than the previous 331,000 transactions in the fourth quarter of 2023.

Traditional firms led the most office deals in the first quarter with 107,000 sq.m. and accounted for a 44% share in the overall transactions, according to Mr. Jara.

This was followed by business process outsourcing companies at 75,000 sq.m. (31%), Philippine Offshore Gaming Operators (POGO) at 54,000 sq.m. (23%), and shared services at 4,000 sq.m. (2%).

 “We’ve also monitored some POGO transactions, mostly concentrated in the Bay Area at 54,000 and largely concentrated in just very few deals,” he said.

Bay Area logged the most transaction activity in Metro Manila with 99,100 sq.m. About 35,000 sq.m. of these are from government offices.

In addition, Fort Bonifacio came second at 30,000 sq.m. and Quezon City at 25,000 sq.m. — Aubrey Rose A. Inosante

Universal Music Group artists returning to TikTok after new licensing pact

UNIVERSAL Music Group (UMG) and TikTok said last week that they had reached a new licensing agreement that will restore the label’s songs and artists to the social media platform as well as give musicians more protections from artificial intelligence (AI).

TikTok began removing Universal’s content from its app after their licensing deal expired in January and the two sides failed to reach agreement on royalties, AI, and online safety for TikTok’s users.

Describing their new pact as a multi-dimensional deal, the companies said they were working “expeditiously” to return music by the label’s artists to TikTok, and also said they would team up to realize new monetization opportunities from TikTok’s growing e-commerce capabilities.

They will “work together on campaigns supporting UMG’s artists across genres and territories globally,” the two firms said in a joint statement.

The short video app is a valuable marketing and promotional tool for the music industry. TikTok is where 16- to 19-year-olds in the United States most commonly discover music, ahead of YouTube and music streaming services such as Spotify, according to Midia Research.

“Roughly a quarter of US consumers say they listen to songs they have heard on TikTok,” said Tatiana Cirisano, Midia’s senior music industry analyst.

However, Universal Music claimed its artists and songwriters are paid just a fraction of what it receives from other major social media platforms.

The music label says TikTok accounts for 1% of its annual revenue or about $110 million in 2023. YouTube, by contrast, paid the music industry $1.8 billion from user-generated content in the 12 months ending in June 2022, according to Midia.

In a move that may well have eroded its bargaining power, Taylor Swift, one of Universal Music’s biggest acts, allowed a selection of her songs to return to TikTok as she promoted her latest album, The Tortured Poets Department.

Ms. Swift owns the copyrights to her recordings through her 2018 deal with Universal and can control where her songs are available, according to the Financial Times.

As licensing negotiations resumed in recent weeks, AI remained a major point of contention. Universal has claimed TikTok is “flooded” with AI-generated recordings, including songs that users create with the help of TikTok’s AI songwriting tools.

In Thursday’s deal, TikTok and Universal said that they would work together to ensure AI development across the music industry will protect human artistry and the economics that flow to those artists and songwriters.

“TikTok is also committed to working with UMG to remove unauthorized AI-generated music from the platform, as well as (developing) tools to improve artist and songwriter attribution,” the statement said.

Concerns about AI have grown in the creative community. In April, a non-profit group called the Artist Rights Alliance published an open letter urging the responsible use of the technology. The group of more than 200 musicians and songwriters called on technology companies and digital music services to pledge not to deploy AI in a way that would “undermine or replace the human artistry of songwriters and artists or deny us fair compensation for our work.”

The deal comes amid questions over TikTok’s long-term future in the United States. President Joseph R. Biden signed legislation last week that gives TikTok’s Chinese owner, ByteDance, 270 days to sell its US assets. TikTok has vowed to file suit to challenge the legislation, which it calls a ban.

More than 170 million Americans use its video service, according to TikTok. Globally, it has more than 1.5 billion monthly active users, according to research firm Statista. — Reuters