Philstocks awaits PSEi’s rally on economy’s prospects

January 3, 2023 | 12:04 am

THE local market is expected to move with an upward bias this year as long as the Philippine economy will see favorable developments, an analyst said.

“With the market at attractive levels, together with the local economy’s growth prospects, we see the bourse moving with an upward bias [in 2023],” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

According to Mr. Tantiangco, the economy is expected to further expand, though at a slower pace due to perceived challenges from high inflation, rising interest rates, and global economic headwinds.

In the third quarter of 2022, the country’s gross domestic product (GDP) grew stronger than expected at 7.6%, which brought the nine-month average growth to 7.7%. The latest quarterly figure is slightly higher than the revised 7.5% growth in the second quarter and the 7% growth in July-September 2021.

The economic growth figure for full-year 2022 is expected to be released by the Philippine Statistics Authority on Jan. 26.

“The local market may stage a strong rally if we see favorable developments with respect to the aforementioned challenges,” Mr. Tantiangco said.

“A decline in the Philippines’ inflation, which is possible due to the past policy rate adjustments by the Bangko Sentral ng Pilipinas (BSP), a slowdown in the monetary tightening of the central banks, and a resilient global economy may spur optimism,” he added.

Mr. Tantiangco said that unfavorable developments in the local economy could weigh on the local bourse. He said he remains to keep a bullish outlook as the market is seen to trade above the 50-day and 200-day exponential moving averages.

He placed the Philippine Stock Exchange index’s (PSEi) major support at 6,400, its immediate resistance at 6,600, and its next resistance between the 7,000 and 7,100 range.

Trading for 2022 was “anemic” after the bourse booked an average net value turnover of P5.92 billion, which is lower than 2021’s average of P7.38 billion.

“2022 has been a rough year for the local equities market,” Mr. Tantiangco said, adding that while concerns over the coronavirus pandemic and its impact on the local economy may have already dissipated, “the market transitioned to a new set of macroeconomic problems that dampened sentiment.”

On the last trading day of 2022, PSEi closed at 6,566.39, which is 556.24 points or 7.81% lower than its close of 7,122.63 on Dec. 31, 2021. — Justine Irish D. Tabile

Entertainment News (01/03/23)

January 3, 2023 | 12:04 am

1 of 3

Voltes V: Legacy trailer released

GMA Network’s Voltes V: Legacy released its first trailer on Dec. 31, 2022. Running at over five minutes, the trailer features cast members Miguel Tanfelix (Steve Armstrong), Ysabel Ortega (Jamie Robinson), Radson Flores (Mark Gordon), Matt Lozano (Big Bert), and Raphael Landicho (Little Jon Armstrong). Directed by Mark Reyes, the live action series is an adaptation of the 1977 Japanese animé Chōdenji Machine Voltes V. Voltes V: Legacy follows the Armstrong brothers, Steve, Big Bert, and Little Jon; their friends Jamie Robinson and Mark Gordon, as well as the giant robot they pilot in their war against humanoid aliens called Boazanians. The Boazanians plan to invade the earth and launch their beast fighters all over the world. The original animé series aired in the Philippines several times since the 1970s with English and Filipino dubs. The series will be part of the GMA Telebabad lineup, with a final release date yet to be announced. Watch the trailer here: https://youtu.be/ux-MNKChlrs

Choi Minho to meet fans in Manila

KOREAN singer, actor, model and SHINee group member Choi Min Ho is scheduled to meet his Filipino fans at the 2023 Best Choi’s Minho – Lucky Choi’s on Jan. 28 at the SM Mall of Asia Arena. Tickets will be available starting Jan. 7 at 12 noon. For members of the SHINee official fan club SHINee WORLD-ACE, a special online pre-sale is scheduled on Jan. 6 from 10 a.m. to 10 p.m. Register in advance on Jan. 4, 2023 to get a pre-sale code. Tickets will be available at SMTickets.com and SM Tickets outlets nationwide. For more information, visit https://www.facebook.com/ovationproductions/.

The Wanderland Festival returns to Manila in 2023

AFTER two years, the Wanderland Festival returns to Manila for its eighth edition on March 4 and 5 at the Filinvest City Event Grounds in Alabang. The festival was initially scheduled to return in March 2020, but had been postponed due to the coronavirus pandemic. Featured artists include Carly Rae Jepsen, Phoenix, Sunset Rollercoaster, Men I Trust, No Rome, Stephen Day, Balming Tiger, GEORGE, August Wahh, Blaster, Leo Wang, and The Sundown. Pre-lineup tickets are now available at P6,000 for standard tickets and P10,000 for VIP tickets. Once pre-lineup sales conclude, standard tickets will be priced at P8,000 and VIP tickets will be priced at P15,000. Tickets from the postponed 2020 edition will be honored at the event. For more information, visit https://wanderlandfestival.com/ and https://www.facebook.com/wanderlandfest/.

SC sets aside steel manufacturer’s tax liabilities worth P37.7-million

January 3, 2023 | 12:03 am

THE Supreme Court (SC) has canceled Prime Steel Mill, Inc.’s deficiency income tax liabilities worth P37.68 million inclusive of interest and penalties for 2005.

In a 10-page decision made public on Dec. 16, 2022, the SC Third Division said the Bureau of Internal Revenue (BIR) prematurely filed the final tax assessment notice before the firm could file its reply.

“The fact remains that the respondent violated the petitioner’s right to due process by issuing a final assessment notice without even awaiting its reply to the preliminary assessment notice,” according to the ruling penned by Associate Justice Japar B. Dimaampao.

Under the law, taxpayers are given 15 days to reply to a preliminary assessment and dispute their tax liabilities.

The Court of Tax Appeals previously denied the steel manufacturer’s appeal to review the tax assessment since it said the BIR had complied with the requirements of due process.

The High Court noted the period given to a taxpayer to reply should not be ignored since it allows a settlement of the dispute without the need for a final notice.

It added that tax assessments that fail to comply with the regulations on a taxpayer’s right to due process must be considered void.

“In several cases, this court has enjoined strict observance by the BIR of the prescribed procedure for the issuance of assessment notices in order to uphold the taxpayers’ constitutional rights,” the tribunal said. — John Victor D. Ordoñez

Value and volume of InstaPay, PESONet transactions increase

January 3, 2023 | 12:03 am

TRANSACTIONS COURSED through PESONet and InstaPay rose as of end-November, with both payment systems seeing growth in volume and value, according to data from the Bangko Sentral ng Pilipinas (BSP).

Automated clearing houses PESONet and InstaPay’s combined value transactions increased by 37.9% to P8.9 trillion in the January-to-November period from the P6.45 trillion in the same period in 2021.

In terms of volume, transactions done via PESONet and InstaPay also grew by 20.7% to 569.67 million in the 11-month period from 471.64 million transactions in the comparable year-ago period.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the rise in PESONet and InstaPay transactions came amid the continued reopening of the economy.

“The pandemic since 2020 also accelerated the adoption of digital/electronic banking transactions and electronic fund transfers, to complement and also as alternative to transactions done at physical branches,” Mr. Ricafort said in a Viber message.

“These are also convenient for the banking public, as these electronic/digital banking transactions and fund transfers may be done ubiquitously from anywhere around the world on a 24/7 basis,” he added.

Broken down, the value of transactions done via PESONet surged by 42.6% to P5.75 trillion as of end-November, from P4.03 trillion in the same period in 2021.

The volume of transactions coursed through the payment gateway stood at 77.124 million, increasing by 18.7% from the prior year.

Meanwhile, the value of transactions done through InstaPay also climbed by 30.7% year-on-year to P3.15 trillion in January to November 2022 from P2.41 trillion in the same period in 2021.

The volume of InstaPay transactions rose by 21.1% year on year to 492.54 million.

The central bank earlier said the increase in PESONet transactions was due to pension fund disbursements facilitated by the Development Bank of the Philippines, which were done twice a month.

The BSP also attributed the rise in InstaPay transactions to the wider use of online banking and e-money transactions for domestic remittances, e-commerce, bills payment, and other immediate low-value payments.

PESONet and InstaPay are automated clearing houses launched under the central bank’s National Retail Payment System.

PESONet caters to high-value transactions and may be considered as an electronic alternative to the paper-based check system. On the other hand, InstaPay is a real-time, low-value electronic fund transfer facility for transactions up to P50,000 and is most useful for remittances and e-commerce.

The increases in PESONet and InstaPay transactions are expected to help the BSP achieve its twin goals to have 50% of retail payments done online and 70% of adult Filipinos become part of the formal financial system by this year. — Keisha B. Ta-asan

Film sets are stars in MCAD Zoom Screening

January 3, 2023 | 12:03 am

Macaulay-Culkin-and-Daniel-Stern-in-Home-Alone-(1990) — A SCENE from the film Home Alone (1990)

1 of 4

A COLLECTION of films where sets are integral to the story will be screened via Zoom for free on all the Wednesdays of Jan. 2023. The works exhibit how film sets build narrative, establish social context, and communicate the emotions and thoughts of the characters. The selection has been curated by the Museum of Contemporary Art and Design (MCAD) of the De La Salle-College of Saint Benilde.

Home Alone (1990) by American filmmaker Chris Columbus takes the audience along the adventures of an eight-year-old accidentally left behind during the holidays. The now-classic Christmas comedy sheds light on a child’s feelings of loneliness amid a large extended family. It will be on view on Jan. 4.

The Apartment (1960) by Austrian-American director Billy Wilder introduces a Manhattan insurance clerk who lets his bosses use his flat for their mistresses. Considered a masterclass in screenwriting and directing, the movie frames one’s perception of the corporate world’s value system and the failure to distinguish authentic relationships from those built on convenience. It is scheduled for screening on Jan. 11.

In The Mood for Love (2000) by Hong Kong filmmaker Wong Kar-Wai follows two neighbors who both suspect their spouses of extramarital activities. A drama that transcends the romance genre, it explores the feelings of loss and loneliness and how the protagonists find themselves in a strong bond challenged by the brutality of time. It is slated to screen on Jan. 18.

Jeanne Dielman, 23, quai du commerce, 1080 Bruxelles (1976) by British filmmaker Chantal Akerman is a cinematic portrayal of the day-to-day life of a widowed housewife. It is a study on domestic anxiety and structural economy as the lead engages in occasional tricks to make ends meet. It is lined up for viewing on Jan. 25.

The free and public online screenings will be conducted via Zoom every 12 noon on the scheduled dates. To register, email mcad@benilde.edu.ph. For more information, visit the official Facebook page of MCAD (https://www.facebook.com/MCADManila).

ACEN says 700-MW solar, wind plants to run in 2023

January 3, 2023 | 12:02 am

ACEN Corp. is expecting at least 700 megawatts (MW) of its solar and wind projects to start operations in 2023.

“ACEN is currently building over 1,000 MW of solar and wind projects in the Philippines, of which around 700 MW is expected to start operations within the next 12 months,” Eric T. Francia, president and chief executive officer of ACEN, said in a Viber message.

Mr. Francia said the facilities would help alleviate the supply pressure and also help the country achieve its renewable energy (RE) targets. The Philippines is targeting to increase the share of renewable energy in its energy mix to 35% by 2030 and 50% by 2040.

Latest available data from the Department of Energy showed that as of 2021, coal accounted for the biggest share in the country’s gross power generation mix at 57.5%, while the share of renewables stood at 23.4%, followed by natural gas at 17.7% and oil-based sources at 1.4%.

Mr. Francia said that to scale up renewables, the country should incorporate more energy storage in the system.

“It is therefore critical to get the reserve market operational soonest. It is also critical to get the renewable energy market operational, especially given the upward adjustment in renewable portfolio standards (RPS),” he said.

The RPS program requires power distributors to source or produce a fraction of their requirements from eligible RE resources.

ACEN, the energy arm of the Ayala group, announced in 2021 that it was targeting to reach net-zero greenhouse gas emissions by 2050 through the retirement of its remaining coal plant.

In November, ACEN announced that it completed divesting its stake from a 246-MW coal-fired plant of its subsidiary South Luzon Thermal Energy Corp., allowing the early retirement of the coal plant in Batangas.

The company aims to reach 20 gigawatts of renewable capacity by 2030. To date, it has 4,000 MW of attributable capacity in the Philippines, Vietnam, Indonesia, India, and Australia. — Ashley Erika O. Jose

King Charles bestows first honors

January 3, 2023 | 12:02 am

LONDON — Britain recognized Queen guitarist Brian May, several English “Lionesses” who won the European women’s soccer championship and diplomats involved in the response to Russia’s invasion of Ukraine in King Charles’ first New Year’s honors list.

Four members of the England women’s soccer team received honors, with captain Leah Williamson awarded an OBE, while the tournament’s golden boot winner Beth Mead, defender Lucy Bronze and all-time top scorer Ellen White received MBEs.

The team’s coach, Dutch national Sarina Wiegman, received an honorary CBE — a type of award given to foreign nationals.

Sir Brian May, a founder member of rock band Queen, was knighted at the end of a year in which he opened Queen Elizabeth’s Platinum Jubilee concert atop the Victoria Monument — 20 years after he performed on top of Buckingham Palace at the Golden Jubilee.

Queen Elizabeth died in September, making the New Year’s honors the first to be awarded by King Charles since he came to the throne. The list is drawn up by independent committees, before it is approved by the prime minister and the monarch.

Melinda Simmons and Deborah Bronnert, Britain’s ambassadors to Kyiv and Moscow respectively, both received damehoods for their services to foreign policy, with other officials who worked on Britain’s response to Russia’s invasion of Ukraine also honored.

The chair of the COP26 climate conference, Alok Sharma, was awarded a knighthood, as were former civil servants Mark Sedwill and Tom Scholar, who were ousted from high-profile roles during the tenures of former Prime Ministers Boris Johnson and Liz Truss, respectively.

Denise Lewis, an Olympic champion who won gold in the heptathlon the Sydney 2000 games, was made a dame, while fashion designer Mary Quant and artist Grayson Perry were also honored.

NatWest Chief Executive Alison Rose, the first female CEO of a major British Bank, was awarded a damehood, as was Anita Frew, the first female chair of aerospace firm Rolls Royce.

The New Year’s honors have been awarded since Queen Victoria’s reign in the 19^th century and aim to recognize not just well-known figures but people who have contributed to national life through often unsung work over many years.

OBE is an Officer of the Order of the British Empire, the MBE a Member of the Order of the British Empire and the CBE a Commander of the Order of the British Empire. — Reuters

Analysts’ December 2022 inflation rate estimates

January 3, 2023 | 12:02 am

HEADLINE INFLATION likely peaked in December as strong holiday demand and agricultural damage caused by typhoons may have driven food prices higher, according to analysts. Read the full story.

BSP rolls out cyber hygiene campaign

January 3, 2023 | 12:02 am

THE BANGKO SENTRAL ng Pilipinas (BSP), together with the Bankers Association of the Philippines (BAP) and the Bank Marketing Association of the Philippines (BMAP), has launched an information campaign aimed to improve cyber hygiene.

The “Check-Protect-Report” (CPR) information drive aims to help protect financial consumers against illicit activities online, the BSP said in a statement on Monday.

“Amid the rise in digital transactions, the CPR campaign encapsulates what we encourage the public to cultivate as a habit. It is expected to enhance financial consumer welfare, further strengthen confidence in the use of electronic payments, and therefore promote growth,” BSP Governor Felipe M. Medalla said.

“Bolstering public trust in the payment system is supportive of the BSP’s goals under the Digital Payments Transformation Roadmap, which aims to digitalize half of the volume of retail payments and onboard 70% of Filipino adults to the formal financial system by 2023,” he added.

The central bank said consumers should check and be careful before sharing any data as financial institutions are only required to ask for personal information when they are contacted by their clients.

Consumers should also protect their personal data from suspicious text messages or e-mails and should “report” to their banks any unlawful transactions.

The information drive highlights that cybersecurity is a shared responsibility among financial regulators, industry participants, and financial consumers, the BSP said.

“Our strong collaboration with the BSP and BMAP complements the BAP’s #Cybersafe campaign by providing a platform to keep the banking public abreast and empowered with the knowledge of the ever-evolving schemes of cybercriminals,” BAP President Antonio C. Moncupa said.

“As proponents of safe and efficient banking practices, the banking industry continuously works closely with the regulators, legislators and law enforcement agencies to effectively curtail fraud and the proliferation of cybercrimes,” he said. “Central to this goal is the protection of the banking public’s hard-earned funds which can only be achieved with the joint effort by the financial institutions, government agencies and the customers themselves.”

The BMAP said partnering with the central bank and the BAP will help raise consumer awareness against cybercrime.

“Cyber criminals have evolved and reinvented scams that are becoming more complex and harder to detect. Further, a social media savvy population makes the country more vulnerable to cyberattacks and fraud incidents,” BMAP President Mai Gacilo Sangalang said.

“With this, we call on the public to always be vigilant, practice due diligence, and to not be complacent when it comes to cybersecurity,” she added. — K.B. Ta-asan

ICTSI rises on prospects for 2023, acquisition news

January 3, 2023 | 12:01 am

SHARES in Razon-led International Container Terminal Services, Inc. (ICTSI) moved upward last week as investors assessed the port operator’s financial performance as well as its subsidiary’s agreement to buy ownership interest and subscription rights in a terminal operator.

Data from the Philippine Stock Exchange (PSE) showed ICTSI ranking 10^th in value turnover with P383.72 million worth of 1.92 million shares exchanging hands from Dec. 27 to 29.

ICTSI shares closed at P200 apiece on Thursday, lower by 2% from its Dec.23 close. Year to date, the stock retained its share price. Local financial markets were closed on Dec. 26 due to a special non-working holiday and on Dec. 30 due to a national holiday.

“ICT has been moving in a generally upward bias the past few weeks as many investors are betting heavily on the company to outperform for 2023,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said, referring to ICTSI’s ticker symbol.

“Though [last] week did see some consolidation which was due to market weakness as a whole as trading volumes were depressed because of the holiday season and shortened trading week,” he added.

In a separate e-mail, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said ICTSI’s stock movement reflected investors’ expectations for the global economy for 2023.

Mr. Tantiangco highlighted worries about a lingering global economic slowdown, risks of global recession due to rising interest rates, and the adverse effects of Russia’s prolonged war on Ukraine and China’s coronavirus disease 2019 (COVID-19) situation.

“Given ICT’s dependence on the performance of the global economy, in particular global trade, a global economic slowdown, much worse, a recession, poses downside risks on the company’s financial performance,” he said.

In the last week of 2022, the Enrique K. Razon, Jr.-led company saw developments that include the signing by its subsidiary IWI Container Terminal Holdings, Inc. of an agreement to buy the ownership interest and subscription rights of Marubeni Corp., a Japan-based integrated trading and investment business, in Bauan International Port, Inc. (BIPI).

IWI Container Terminal is acquiring 2.05 million BIPI shares held by Marubeni representing a 20% stake for around P507.41 million.

BIPI, the operator of the Bauan terminal, supports cargo movements in and out of the Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) region.

For Mr. Limlingan, the acquisition is another positive update for the company. He noted, however, that the market’s reaction might be delayed as fund managers were mostly on a break last week.

Mr. Tantiangco said the move to acquire an additional 20% stake through its subsidiary wasn’t given much attention by investors as the focus was more on the global economic prospects for 2023.

In the third quarter, ICTSI reported a 42.6% rise in attributable net income to $170.66 million. Its consolidated revenues from port operations during the period grew by 20.4% to $595 million.

Claire T. Alviar, a research analyst at Philstocks, projects ICTSI’s earnings per share in 2022 to reach $0.31, which would be 71% higher than the 2021 figure if realized.

An improvement in the global economic outlook could entice investors to consider the port operator, Mr. Tantiangco said.

“This would include global demand being able to withstand the rise in interest rates so as to keep the flow of global trade healthy. The solving of problems weighing on the world economy such as the Russia-Ukraine war and China’s COVID-19 situation is also seen to help,” he added.

“Immediate support is seen at P190.00. Immediate resistance is seen at the P205.00-P207.00 range.”

For Mr. Limlingan, investors are always ready to buy into the company, thus any market correction would provide the opportunity to do so.

He pegged support and resistance levels at P196.00 and P208.00, respectively. — Abigail Marie P. Yraola

Yields end mixed amid lack of leads

January 3, 2023 | 12:01 am

YIELDS on government securities (GS) were mixed last week amid a lack of catalysts and as investors took positions ahead of the new year.

GS yields at the secondary market went up by an average of 1.48 basis points (bps) week on week, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rates as of Dec. 29 published on the Philippine Dealing System’s website.

Financial markets were closed on Dec. 30 in observance of Rizal Day.

The 91- and 364-day Treasury bills (T-bills) saw their yields go up by 2.57 bps and 2.64 bps to 4.2269% and 5.2099%, respectively.

Meanwhile, the rate of the 182-day T-bill dropped by 1.28 bps week-on-week to 4.9002%.

Almost all rates at the belly of the curve increased. Yields on the two- and five-year Treasury bonds (T-bonds) inched up by 0.97 bp and 0.99 bp to 5.9706% and 6.47%, respectively. The rates of the three- and four-year papers also climbed by 5.44 bps and 3.25 bps to 6.2464% and 6.3755%, respectively.

Meanwhile, the yield on the seven-year paper inched down by 0.52 bp to 6.6585%.

At the long end of the curve, the 10-year T-bond rose by 6.14 bps to 6.986%, while the 20- and 25-year papers fell by 1.96 bps (7.2234%) and 1.94 bps (7.2205%).

Total GS volume traded reached P7.227 billion on Friday, lower than the P5.204 billion recorded on Dec. 23.

“The main driver for the movement (or lack thereof) [last] week was the shortened three-day work week. Given this, market activity was fairly limited, with most investors already having repositioned previously and winding down towards the holidays. Given the focus on the long-end of the yield curve, we saw bids get more defensive,” ATRAM Trust Corp. Head of Fixed Income Jose Miguel B. Liboro said in an e-mail.

“Not a lot of actual selling activity given the reduced market liquidity, but we expect market bids to remain defensive in January, especially with expectations for December CPI (consumer price index) to remain above the 8% handle over the short term,” Mr. Liboro said.

Headline inflation likely settled within the 7.8% to 8.6% range in December due to higher electricity rates and rising food prices, the Bangko Sentral ng Pilipinas (BSP) said last week.

The BSP’s month-ahead forecast range indicates that inflation may have been faster than the 14-year high of 8% in November.

The upper end of the forecast or the 8.6% would also be the fastest pace since the 9.1% print during the Global Financial Crisis in November 2008.

If the 8.6% forecast is realized, this would bring the full-year average inflation to 5.9%, slightly above the BSP’s 5.8% average forecast for 2022.

December would also be the ninth straight month that inflation surpassed the BSP’s 2-4% target range.

Mr. Liboro said yields climbed in 2022 amid a volatile trading environment.

“Rates moved up across the yield curve by 250-300 basis points from a year-on-year standpoint. Similar to other markets both locally and globally, Philippine fixed income had a challenging 2022. However, this has put it in a decent position for much brighter prospects for 2023, given where yield levels currently are,” he said.

“We are likely to see a defensive bias initially in January as the combination of likely still-above 8% CPI, long-end auction focus, a resumption of the trend upwards in global yields and a large potential supply injection in the form of a jumbo RTB (retail Treasury bond) to weigh on the market. Despite these short-term headwinds, we expect Philippine fixed income to deliver a stronger performance in 2023 given the current starting levels.

The government plans to borrow P200 billion from the domestic market in January, higher than the P135-billion program in December. It will raise P60 billion via T-bills and P140 billion from T-bonds. — A.O.A. Tirona

Revenge spending to extend into 2023

January 3, 2023 | 12:01 am

shopping mall — PHILIPPINE STAR/ MICHAEL VARCAS

(This is the second of a two-part property market outlook by Colliers Philippines)

MALL OPERATORS should brace for more foreign and local retailers as consumer confidence and foot traffic pick up this year.

Major mall developers have been reporting that consumer traffic has now reached between 85%-95% of pre-COVID levels in the third quarter of 2022 from only 40% a year ago.

In 2023, we see more retailers (foreign and local) taking up physical mall space to take advantage of rising consumer traffic and anticipated increase in purchasing power.

Colliers sees the approval of the amendments to the Retail Trade Liberalization Act (RTLA) as paving the way for the entry more foreign retailers in the country. Based on our mall scans, the food and beverage (F&B) segment will account for 50% of the upcoming retailers followed by fashion accessories and beauty and health at 27%.

Colliers recommends that mall operators reactivate their event spaces or activity centers by organizing events such as trade fairs, exhibits and concerts to attract more mallgoers. F&B and clothing & footwear retailers should also consider opening pop-up stores, especially those testing the feasibility of the Philippine retail market.

We also encourage mall operators and retailers to continue implementing regular sanitation and other health and safety protocols, especially in high-density retail spaces.

In 2023, we see vacancy marginally rising to 17% from a projected 16% vacancy in 2022 due to the substantial delivery of 448,900 square meters (sq.m.) (4.8 million square feet) of new supply. Despite record-high new supply, we expect greater retail space absorption from brick-and-mortar shops following the improved consumer traffic as reported by mall operators and the consumer confidence index of the Philippine central bank.

Colliers encourages developers to reassess the ideal sizes of upcoming retail developments as they welcome more consumers back to their properties.

From 2024 to 2026, Colliers sees the completion of 62,000 sq.m. (667,100 sq.ft.) of new retail space annually, only a fifth of the annual delivery of 327,200 sq.m. (3.5 million sq.ft.) of new supply that we recorded from 2017 to 2019.

Colliers believes that online shopping will remain popular as Filipinos continue to put a premium on convenience. In our view, this will likely complement brick-and-mortar shopping which we see receiving a boost from the dropping of mask mandates.

Colliers encourages mall operators and retailers to further strengthen their omni channel strategies to support brick-and-click shopping.

LEISURE: DOMESTIC TOURISTS TO JUMPSTART RECOVERY
Data from the Department of Tourism (DoT) showed that foreign arrivals as of Nov. 14, reached 2 million, already exceeding the full year target of 1.7 million arrivals. The United States, South Korea and Australia were the top source markets during the period.

Meanwhile, hotel occupancies in the capital region as of H1 2022 reached 47% from 44% in H2 2021 as we saw the return of business travel and resumption of MICE activities.

The DoT also reported that visitor arrivals from February to September 2022 generated P100.7 billion ($1.7 billion) in visitor spending, higher than the P4.94 billion ($8.4 million) a year ago.

Meanwhile, data from the Philippine Statistics Authority (PSA) showed that the tourism sector’s share to the country’s economy reached 5.2% in 2021 from 5.1% in 2020. Domestic tourism expenditures also reached P783 billion ($13.2 billion), up 39% year on year after reporting 37.3 million trips in 2021 (from 27 million in 2020).

The DoT is optimistic that the removal of mask mandates will likely attract more travelers to visit the country. In our view, this is likely to stoke demand for hotels across the country and help raise occupancy levels.

However, the Philippine Hotel Owners Association (PHOA) is “cautiously optimistic” for 2023 as rising inflation and higher airfares as well as global geopolitical tensions are likely to affect customers’ travel decisions.

For 2023, Colliers projects the completion of a record-high 3,900 rooms as developers anticipate the projected recovery in global travel. From 2023 to 2025, Colliers expects the annual delivery of 2,120 rooms, higher than the 720 rooms completed yearly from 2020 to 2022. We expect more foreign-branded hotels opening in the next 12 to 36 months. From 2023 to 2025, about 42% of the new supply are foreign brands and are likely to open in the Bay Area, Makati and Ortigas central business districts.

Colliers sees average daily rates (ADRs) rising by about 15% in 2022 after recording a cumulative drop of 20% in 2020 and 2021. ADRs are likely to continue to improve in 2023 following the projected rise in local and foreign tourists.

The ADRs of selected high-end resorts have either held firm or increased versus the previous half. Colliers attributes this to continued revenge travel across the country. In our view, the increase in rates is likely to be sustained as the country attracts more international travelers, especially the long-haul and high-spending ones.

INDUSTRIAL: Industrial parks to support manufacturing’s revival
The industrial sector is likely to benefit from the Marcos administration’s push for industrialization. Prioritizing job-generating manufacturing activities was among then-candidate Ferdinand Marcos, Jr.’s priorities. Colliers believes that improving manufacturing competitiveness should result in greater inflow of investments and these should benefit industrial parks, especially those located in northern and central Luzon.

In June 2022, the Department of Trade and Industry (DTI) highlighted that it is expecting more than P500 billion ($8.4 billion) worth of investments in the Philippines in the next 18 months. According to DTI, the manufacturing sector will likely be a major recipient of these pledges. Colliers believes that this will play a vital role in industrial space absorption once these investments materialize.

We also see the cold chain sector sustaining demand for industrial and warehouse assets, especially with the growing preference for online groceries and same-day deliveries. Recently, the German-Philippine Chamber of Commerce and Industry (GPCCI) disclosed that there are seven German companies which are seeking local partners in the cold chain industry. The Board of Investments (BoI) aims to increase cold storage capacity in the country to 650,000 pallets by 2023 from 500,000 pallets in 2020.

In our view, data centers are potential industrial locators beyond 2022. Industrial parks are ideal locations for data centers because of their power capacity that can support data centers’ electricity requirements. Developers should be proactive in cornering the demand from data centers by highlighting features of industrial parks such as the potential for customization and subsidized utility costs. Upcoming data centers located inside industrial parks include YCO Cloud Centers in Light Industry and Science Park 4 in Batangas and Dito Telecommunity in Clark Global City in Pampanga.

Industrial parks in Central Luzon will likely remain as popular alternative options to CALABA (Cavite-Laguna-Batangas). From 2023 to 2024, we see the delivery of 210 hectares (520 acres) of new industrial space particularly in Tarlac and Subic. The DTI is currently pitching Central Luzon as a manufacturing and logistics hub, highlighting growth opportunities in Pampanga’s New Clark City, Bataan’s Freeport Area, and Tarlac’s Luisita Industrial Park. Singaporean firms are also keen on investing in the Filinvest Innovation Park in New Clark City.

Joey Roi Bondoc is associate director and head of research at Colliers Philippines.