New Zealand should only reopen border in early 2022, panel advises

August 11, 2021 | 1:28 pm

1024px-Wellington_NZ-cablecar-topview — Image via Brett Taylor/CC BY 2.0/Wikimedia Commons

WELLINGTON — New Zealand should keep its borders shut until early 2022 and reopen only after the vast majority of its adults have been vaccinated against the coronavirus, a government-appointed panel said on Wednesday.

It said the country, which last reported a local case of coronavirus disease 2019 (COVID-19) transmission in February, needs to stick to its strategy of eliminating the virus to avoid straining its health system, with the virus rapidly mutating overseas.

“The advisory group considers that an elimination strategy is not only viable, but also the best option at this stage of the pandemic,” the panel said in a report.

New Zealand Prime Minister Jacinda Ardern has won global plaudits for containing local transmission of COVID-19 through tough lockdowns and shutting the border in March 2020. The country has recorded just 2,500 cases and 26 deaths.

The government is set to announce plans this week for reopening, based on the experts’ advice.

“The challenge of dealing with regular importations of the virus through our borders should not be underestimated,” the panel said in a report.

“Hence we support the idea that re-opening of the borders in 2022 should start in a carefully planned, phased way…”

The panel recommended New Zealand’s vaccination program should be completed before reopening. So far only 21% of the country has been fully vaccinated.

“We need to do more to further strengthen our borders and bolster our health defenses, including through the vaccine rollout, before we can safely open the border further, and that will take a little more time to properly prepare,” Associate Minister of Health Ayesha Verrall said in a statement.

She said the panel’s advice had evolved due to the emergence of the highly infectious Delta variant.

Businesses and public sectors facing worker shortages have called for a more rapid opening up, but the panel said that would make the country vulnerable to infection.

Ms. Ardern last week opened one-way quarantine-free travel for seasonal workers from Samoa, Tonga and Vanuatu to address labor shortages in the horticulture industry.

New Zealand suspended a quarantine-free travel “bubble” with Australia in July following outbreaks of the Delta variant there. — Reuters

MPIC features global ESG experts in first group Sustainability Summit

August 11, 2021 | 1:24 pm

Metro Pacific Investments Corporation (MPIC) assembled an impressive line-up of global environmental, social and governance experts in their first-ever Group Sustainability Summit held virtually last August 6. The summit was attended by over 300 participants composed of MPIC’s and MVP Group Companies’ Board of Directors and Senior Management as well assustainability champions across all of MPIC’s businesses.

Staying true to MPIC’s commitment to elevate its sustainability initiatives across the group, the summit was designed to bring key issues such as climate change, sustainability reporting standards, investor expectations and emerging global trends, among others, at the forefront of senior management’s agenda.

“Sustainability is the hot topic today and we all know that climate risk has steadily risen in our risk management boards. However, most of us will probably want to have a fuller understanding of what sustainability means and how it may impact the way we manage our companies,” said MPIC President and CEO Jose Ma. K. Lim as he opened the Summit. “I think the more interesting parts are the discussions on sustainable financing options and the changing expectations of shareholders and investors from management of their investing companies. I hope all the attendees find the topics stimulating and helpful in our journey towards a truly sustainable business model for each of our companies and for our country.”

“The group has a very strong social ethic beyond our traditional role of providing goods and services for a profit. The major metric by which our success should be measured is how well we uplift the lives of our people,” said MPIC Chairman Manuel V. Pangilinan. “I think we have the ability to push the sustainability agenda ahead of other corporates in this country. I’m glad that this summit sends an affirmative but resounding message that it is time to really be serious about these sustainability programs within our group and within the business community in general in the Philippines.”

Aligning with global best practices in sustainability begins with ensuring that decision-makers are kept abreast with recent developments and trends. To achieve this goal, MPIC purposely partnered with established institutions who graciously shared their insights during the summit.

Neil Stewart, Director of Corporate Outreach at the Value Reporting Foundation, spoke about the importance of global reporting standards and how the merging of the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) is a major step in driving the global alignment of reporting standards.

EY Leader for Climate Change and Sustainability Services and Oceania Chief Sustainability Officer Mathew Nelson stressed the importance of going beyond compliance as he discussed EY’s Global Climate Risk Disclosure Barometer.

Brendan Baker, Vice President, and ESG Climate Specialist at MSCI, discussed the value of forward-looking, return-based quantification of climate change risks.

BSR Vice President for Asia-Pacific Jeremy Prepscius led the panel on “Transformation to Net Zero” with co-panelists Melissa Brown, Partner at Daobridge Capital and the Director for Group Sustainability of an established player in the power industry in Asia.

Speakers from S&P Global’s Sustainable1, Michael Salvatico, Head of Asia Pacific ESG Business Development, and Bertrand Jabouley, Head of Sustainable Finance, Asia-Pacific, covered global emerging ESG trends and sustainable financing options.

MPIC Investors M&G Investments represented by Ben Constable-Maxwell, Head of Impact Investing, and Michael Bourke, Head of Global Emerging Markets and Fund Manager commended the group’s impressive metrics in human capital excellence as well as its efforts as a strategic partner of the government in helping improve lives in the Philippines. They also shared their expectations on environmental, social and governance matters from their investee companies.

Yayu Javier, United Nations Global Compact Network Philippines (UNGCP) Chairperson highlighted key sustainability areas of focus where MPIC and UNCGCP can jointly make meaningful contributions in.

The afternoon sessions included a discussion on sustainability reporting trends in the Philippines by SGV & Co Business Consulting Partner Joseph Ian Canlas. Finally, Business for Sustainable Development’s Executive Director Bonar Laureto took the group into a deep dive into the materiality assessment and strategy development process.

Hosted by Atty. Mike Toledo, MPIC Vice President for Government Relations, the summit also featured MPIC Group Sustainability Council Champions who capped each session with their key take-aways.

MPIC Chief Finance Officer and Chief Sustainability Officer Chaye A. Cabal-Revilla who has taken on the challenge of driving the group’s Sustainability strategy said, “We cannot operate our businesses with just profit in mind. More importantly, we have to be driven by purpose – we can always do good while doing well. We have put Sustainability at the heart of MPIC to future-proof not just our business but our existence as humanity. We all have to work together. Adhering to global sustainability reporting standards and integrating sustainability into our DNA and everything that we do is really key into making it pervasive and successful. This also means that everybody has to help out.”

Indeed, everyone has a role to play in ensuring that the generations to come can also benefit from nature’s gifts. MPIC is fully embracing its role, not just through the provision of essential services, but also as a driver of positive change. As a leading infrastructure investment company, MPIC is committed to contributing to the achievement of the 17 United Nations Sustainable Development Goals (SDG), with SDG #9 Industry, Innovation, and Infrastructure as its anchor.

Join us on Viber to get more updates from BusinessWorld: https://bit.ly/3hv6bLA

UN report ignites fight for funds to build climate defenses

August 11, 2021 | 12:50 pm

DAMAGE caused by several typhoons and the Taal Volcano eruption last year reached P113.4 billion, according to the National Economic and Development Authority. — PHILIPPINE STAR/ MICHAEL VARCAS

The United Nations (UN) climate panel’s report on Monday alerted wealthy nations to a lesson many of the world’s most vulnerable countries have already learned through bitter experience: they must adapt quickly to a world with more extreme weather.

The report by the Intergovernmental Panel on Climate Change (IPCC) made clear the planet will get warmer for at least the next few decades, and seas will rise for centuries — trends that have already triggered weather disasters across the globe.

“The fact that some changes are going to continue to play out for a long, long time, underscores the importance of paying much more attention to making communities more resilient,” Jane Lubchenco, deputy climate director at the White House Office of Science and Technology Policy, told Reuters.

As rich nations strain to curb their climate-warming emissions, experts say they will need to prepare for higher sea levels, which can turn storm surges into floods.

Societies will also need to ready for heat waves by creating public health infrastructure to cope with those who become ill, while regions must rethink urban planning and development to steer communities away from high-risk zones, such as wildfire spots.

In developing countries alone, the UN has said this will take up to $300 billion in adaptation investments per year by 2030, although other estimates run far higher. Few countries around the world have begun.

“Adaptation and resilience in general is underfunded nearly everywhere,” said climate scientist Bill Hare, who leads the non-profit Climate Analytics. Developed countries did not pay enough attention to the problem and developing countries did not have the money to spend, he said.

Development bank funding tells a similar story. Out of seven large development banks, only the African Development Bank in 2019 spent more to help societies adapt to already unavoidable climate change than on efforts to curb emissions, data from the banks showed.

The European Investment Bank spent just 11% of its climate finance for poorer countries on adaptation that year.

‘THIS IS WHAT WE’VE BEEN FIGHTING FOR’

Hours after the report’s release on Monday, the US government said it would spend $5 billion to help states and communities to prepare for climate disasters, for example, by strengthening power grids or water systems.

Even if global emissions are reduced quickly, the IPCC said average global temperature would rise 1.5 degrees Celsius above the preindustrial average over the next two decades. The world has already seen 1.1°C of that warming — enough to trigger today’s weather extremes.

“The IPCC pointed out how far behind we are in adapting to the impacts that are already unavoidable,” former UN climate chief Christiana Figueres said.

“Developing countries — and the most vulnerable populations in all countries — have already been knocked over the head by the adaptation challenge,” she said.

Developing countries tend to be the most vulnerable to costly climate impacts, and the least resourced to deal with them. For years, they have been struggling to secure the $100 billion a year pledged by rich nations toward helping them prepare for climate disruptions.

The money that has arrived, so far, has focused on emissions reduction rather than adaptation. Of the $78.9 billion in climate finance transferred by rich countries in 2018, only 21% was spent on adaptation, OECD data shows.

The IPCC report is likely to spur demands for more financing at a major UN climate conference in Glasgow, Scotland, in November. A failure to deliver could irk the developing world and frustrate talks on other global deals to safeguard the planet.

“This is what we’ve been fighting for, for a long time,” said James Michel, former president of the Seychelles islands. “We are not warming the planet … but then we are at the receiving end.”

Around 90% of the Seychelles’ population lives on the narrow coastal plateaus of the Indian Ocean nation’s main islands. Building houses further inland and improving flood defences is an expense the country cannot finance alone, Mr. Michel said.

Some especially vulnerable nations moved early to adapt.

Cyclone-prone Bangladesh has built more than 12,000 cyclone shelters along its coastline since 1970 — one of multiple adaptation investments that experts say have drastically reduced storm-related deaths.

“We have drills on what to do in a cyclone, what to do when a flood comes,” said Saleemul Huq, chair of the expert advisory group of the Climate Vulnerable Forum of 48 countries.

Not preparing means disasters can be costly, as many wealthy nations have seen. As of July 9, the United States had faced eight weather or climate-related disasters in 2021 with losses exceeding $1 billion each, government data shows.

This week’s IPCC report focused on physical climate impacts, but next year the panel will release another comprehensive assessment of how countries can deal with climate impacts.

“Good adaptation policy is well known. You just have to be better prepared for these kinds of events, and every country is going to have to be better prepared,” Mr. Huq said. — Kate Abnett, Valerie Volcovici, and Kanupriya Kapoor/Reuters

Recession ends as GDP grows by 11.8%

August 11, 2021 | 12:34 am

slum-area-skyline — PHILIPPINE STAR/ MICHAEL VARCAS

THE PHILIPPINE ECONOMY exited recession in the second quarter, after growing a faster-than-expected 11.8%, according to the Philippine Statistics Authority (PSA).

However, a surge in coronavirus disease 2019 (COVID-19) infections driven by the more contagious Delta variant and renewed mobility restrictions are likely to weigh on economic growth for the rest of the year.

After five straight quarters of decline, gross domestic product (GDP) jumped by 11.8% in the April to June period, a reversal from the revised 3.9% decline in the first quarter of 2021 and the record 17% contraction in the second quarter of 2020.

This marked the first time the Philippine economy posted growth since the fourth quarter of 2019, right before stringent lockdown measures were implemented to curb the spread of COVID-19.

On a year-on-year basis, the second-quarter result was the fastest growth recorded since the 12% print in the fourth quarter of 1988.

It also beat the 10.6% median growth estimate in a BusinessWorld poll of 20 economists conducted last week.

However, the Philippines’ recovery momentum slipped, as GDP declined by a seasonally adjusted 1.3% on a quarter-on-quarter basis following a 0.7% growth in the first quarter. The last quarterly decline was recorded in the second quarter last year with a seasonally adjusted contraction of 15.1%.

Metro Manila and nearby provinces were under the strictest lockdown from late March to mid-April this year, as COVID-19 cases surged.

“The robust performance is driven by more than just base effects. It is the result of a better balance between addressing COVID-19 and the need to restore jobs and incomes of the people,” Socioeconomic Planning Secretary Karl Kendrick T. Chua, Department of Finance Secretary Carlos G. Dominguez III and Department of Budget and Management Officer-in-Charge Tina Rose Marie L. Canda said in a joint statement.

Household spending, which accounts for around three-fourths of GDP, posted a year-on-year 7.2% growth in the second quarter compared with the -4.7% and -15.3% in the first quarter and the second quarter of 2020, respectively. Seasonally adjusted, it declined by 2.4% in the second quarter versus last year’s -13.3%.

The investment component, which is represented in the data as capital formation, expanded by an annual 75.5% in the second quarter from the year-on-year declines of 14.8% and 51.5% in the first quarter of this year and second quarter last year, respectively. This was the fastest since the 43.8% growth recorded in the third quarter of 2010.

Trade saw a similar trend during the period with exports of goods and services jumping by 27% year on year compared with the -8.8% and -33.5% in the first quarter of 2021 and second quarter of 2020, respectively. Meanwhile, imports rose by 37.8%, a reversal from the -7% in the previous three-month period and the -37.3% in the same period last year.

On the other hand, government spending dropped by 4.9% in the second quarter — the first time since the 2.1% fall in the first quarter of 2017.

The industry sector recorded a 20.8% year-on-year expansion in the second quarter, the fastest since the 22.8% reading in the fourth quarter of 1988. Meanwhile, services went up by 9.6%, the fastest annual growth since the 9.8% in the second quarter of 2004. On the other hand, agriculture, forestry, and fishing dipped by 0.1% from -1.3% in the preceding quarter and 1.6% growth in the same period last year.

Accounting for seasonal factors, however, industry and agriculture rose by 1.1% and 0.6% in the second quarter, respectively. On the other hand, services declined by 2.8%.

“[A]lmost all sectors bounced back despite the imposition of the ECQ (enhanced community quarantine) and the MECQ (modified enhanced community quarantine) last April and May 2021. This is a clear indication that managing risks, instead of shutting down large segments of the economy, stands a far better chance of improving both economic and health outcomes,” the economic managers said.

They added prospects for a strong rebound this year “remain promising.”

“Although there are speed bumps given the current ECQ in Metro Manila and other parts of the country, we are now better equipped to sustain continuous positive growth,” the economic managers said.

Metro Manila and its nearby provinces are under a two-week ECQ until Aug. 20 to help curb a surge in COVID-19 cases due to the more transmissible Delta variant.

STRONG REBOUND UNLIKELY
For the first half, GDP rose by 3.7%, still below the government’s full-year growth target of 6-7%.

The economy has to grow by at least 8.2% in the second half to meet at least the lower end of the target range, PSA Chief Claire Dennis S. Mapa said at a press briefing.

“On the other hand, if we want to hit the 7%, the economy should grow by 10.2% during the second half,” he said.

Analysts were not as optimistic.

“Despite the double-digit expansion on a [year-on-year] basis, economic momentum actually slowed in [the second quarter] with GDP contracting 1.3% on a [quarter-on-quarter] basis after authorities reimposed tighter mobility restrictions in April,” said ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa in a statement to reporters.

“The resumption of lockdowns in April and in August have derailed the economic recovery with the economy backtracking by 1.3% in the second quarter and we can expect this trend to continue in the second half of the year,” Mr. Mapa added.

Alex Holmes, economist at Capital Economics, said the country’s chances of a strong economic rebound this year are “looking slim” given the new surge in virus cases.

“The government’s 6-7% GDP growth forecast for the year now looks out of reach,” he said in a separate statement. “[T]he worsening spread of the virus means we are cutting our 2021 growth forecast, from 6.0% to 5.0%.”

Pantheon Macroeconomics Senior Asia Economist Miguel Chanco was also less upbeat, noting the 2.4% quarter-on-quarter drop in household spending more than reversed the “relatively modest gains” made in the previous two quarters.

Mr. Chanco said the only silver lining in the GDP report was the 12.2% seasonally adjusted growth in total investment based on their calculations, but noted the “punchy gains” made since the third quarter of last year “primarily have been a function of catch-up growth.”

“Capex (capital expenditure) was hit hardest by the virus last year and it remains 15% below the pre-pandemic level, despite the near-75% rise over the last four quarters. All told, it now looks like GDP growth in the mid-4% range is the best the Philippines can hope for this year,” he said in a separate statement.

ANZ Research Senior Economist Bansi Madhavani and Chief Economist for Southeast Asia and India Sanjay Mathur noted headwinds to economic recovery such as high unemployment and underemployment, limited household savings and the banks’ “low propensity to lend.”

“[The latest] data release does not affirm growth recovery. Rather, it confirms that recovery will likely be gradual and protracted,” they said in a note. — Bernadette Therese M. Gadon with inputs from Beatrice M. Laforga and Luz Wendy T. Noble

FDI net inflows slide to lowest in over a year

August 11, 2021 | 12:33 am

NET INFLOWS of foreign direct investments (FDIs) dropped in May to its lowest level in over a year, as the emergence of new coronavirus disease 2019 (COVID-19) variants weighed on investor sentiment.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed FDI inflows fell by 25.4% to $429 million in May from $575 million net inflows during the same month in 2020. It was also 36.8% lower than the $679-million FDI net inflows in April.

The May figure is also the lowest since the $317 million inflows in April 2020 and nearly matched the $430 million logged in October.

“The FDI decline in May 2021 reflected renewed investor concerns on the rising cases of the new variants of COVID-19 globally,” the central bank said.

Many countries, including the Philippines, have seen new COVID-19 surges driven by more transmissible variants, particularly Delta.

Colegio de San Juan de Letran Graduate School Dean Emmanual J. Lopez said lower FDIs in May reflect a growing concern among investors over “what looks like a failure of authorities” to control the surge in coronavirus cases in the country.

“But we are expecting a slow recovery in FDI, as the country exits from recession, where investment climate becomes conducive,” he said.

BSP data showed non-residents’ net investment in debt instruments, consisting mainly of inter-company borrowings between foreign direct investors and their subsidiaries in the country, shrank by 23.4% to $269 million in May.

At the same time, non-residents’ net investments in equity capital slumped by 53.4% to $60 million in May. This was mainly due to the 70% increase in equity capital withdrawals to $21 million, alongside a 42.6% decline in equity capital placements to $82 million in May.

Equity capital placements were coming mainly from Japan, the United States and Malaysia, and were channeled into manufacturing, real estate, and financial and insurance industries.

Reinvestment of earnings went up 6% to $99 million in May.

YEAR-TO-DATE RISE
Despite the decline in May, FDI net inflows rose 37.8% to $3.48 billion in the first five months of 2021.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa noted that the year-to-date increase in FDI inflows were mainly backed by the debt instrument components rather than reinvestment of earnings.

BSP data showed non-residents’ net investments in debt instruments surged by 76.2% to $2.2 billion in the January to May period.

“This development shows that although some investors have decided to pour in some money into the Philippines, these types of investment are less permanent and can be withdrawn more easily as compared to fresh equity,” Mr. Mapa said in an e-mail, noting such trend shows investors overall outlook for the economy is still reflective of the crisis.

Reinvestment of earnings rose 3% to $407 million in the first five months, while net investments in equity capital dipped by 0.3% to $1.28 billion.

Equity capital dropped 0.9% to $879 million in January to May. This, as equity capital placements dropped by 5.4% to $1.018 billion, while equity capital withdrawals slid by 26.7% to $139 million.

The central bank expects FDI net inflows to reach $7.5 billion this year. — L.W.T.Noble

Banks’ nonperforming loans continue to climb in June

August 11, 2021 | 12:32 am

NONPERFORMING LOANS (NPLs) held by Philippine banks continued to pick up in June, reflecting how the pandemic remains a burden on lenders’ asset quality and borrowers’ capacity.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday showed soured loans climbed 73.9% to P482.991 billion in June from P277.806 billion in the same month in 2020. Bad loans also inched up by 0.7% from the P479.481 billion logged in May.

Despite the increase in bad loans held by lenders, the NPL ratio slightly eased to 4.48% from the 13-year high of 4.49% in May. However, it was still much higher than the 2.57% seen in June 2020.

BSP officials earlier said they expect the NPL ratio to hit “a little over 5%” by end-2021.

Banks across Southeast Asia may continue to face asset quality risks amid the resurgence of infections and containment measures imposed to control the pandemic, Moody’s Investors Service said.

“Thailand, the Philippines, and Indonesia will be hit the hardest in the region because of heightening uncertainties around the reopening of their economies, which makes banks in these countries most vulnerable,” Moody’s said in a note on Tuesday.

For consumption-driven economies like the Philippines and Indonesia, Moody’s said muted demand will impact the debt repayment capacity of borrowers with businesses that are unable to operate due to quarantine restrictions. These makes borrowers from industries such as wholesale and retail trade, dining, hospitality and other travel-related businesses, the most at risk.

BSP data showed that the total loan portfolio of the entire banking industry in June dipped by 0.4% to P10.775 trillion from P10.818 trillion a year earlier. Month on month, it went up 1% from the P10.669 trillion in May.

Past due loans increased by 51.2% to P577.06 billion from P381.426 billion a year ago. These borrowings made up 5.36% of the industry’s portfolio, from 3.53% in June last year.

Restructured loans in June surged by 575% to P328.647 billion from P48.669 billion a year earlier. This brought the ratio to 3.05% from 0.45%.

Banks continued to boost loan loss reserves which rose by 31% to P397.79 billion from P302.926 billion in the same month of 2020. Its ratio to the loan portfolio increased to 3.69% from 2.8%.

Meanwhile, lenders’ NPL coverage ratio — which is an indicator of allowance for potential losses due to bad loans — declined to 82.36% from 109.04%

For the months ahead, concerns on asset quality will continue to affect banks’ risk appetite to extend more loans, Asian Institute of Management economist John Paulo R. Rivera said. He noted the increasing infections and the reimposed lockdowns could cause risk-off sentiment for banks.

Business activities are again affected by the two-week lockdown imposed in Metro Manila and some provinces until Aug. 20.

“If the risks would persist, we can expect NPL to rise and banks being more risk averse in lending to minimize defaults. Containing the recent surge and continuous and rapid vaccination are keys to restoring confidence in lending,” Mr. Rivera said in a Viber message.

Outstanding loans by big banks dropped for the seventh straight month in June by 2%, although it also marked the second consecutive month of softer decline. — Luz Wendy T. Noble

Resumption of face-to-face classes, economic reopening may help Philippines avoid ‘scarring’

August 11, 2021 | 12:31 am

THE Department of Education said the new school year will start on Sept. 13, but face-to-face classes will still not be allowed unless given the go signal by Malacañang. — PHILIPPINE STAR/ MICHAEL VARCAS

THE RESUMPTION of face-to-face classes and the further reopening of more sectors will help the Philippine economy avoid long-lasting damage from the coronavirus pandemic, Socioeconomic Planning Secretary Karl Kendrick T. Chua said.

In a briefing on Tuesday, Mr. Chua said the economic team is concerned about the possible medium to long-term damage caused by the pandemic on the economy, especially sectors severely affected by the lockdowns.

Managing the risks of shutting down the economy and containing the spread of the coronavirus disease 2019 (COVID-19) should be the most cost-effective way of preventing economic scarring for the country, he said.

“And the other thing that we advocate really is to pave the way already for the resumption of face-to-face schooling, the long-term scarring effects of students not being able to learn has a permanent effect also on their future productivity,” Mr. Chua said.

An Asian Development Bank (ADB) report in April showed the country may have lost 0.61 learning-adjusted year of schooling due to the class disruptions last year, which was equivalent to an 8.11% decline from 2020’s baseline.

The ADB had estimated school closures may cost Filipino students $26.9-36.1 billion in lifetime earnings for not attaining the potential income they could have obtained had the pandemic not occurred.

The Department of Education said the new school year will start on Sept. 13, but face-to-face classes will still not be allowed unless given the go signal by Malacañang.

Mr. Chua said the government will continue to manage the health and economic risks, especially as the country is experiencing a new surge in COVID-19 infections.

“I think we should resume our original strategy of, number one, opening more sectors of the economy while adhering to health standards; number two, beginning the plan to open some schools for pilot face to face; and number three, allowing children and families to have more healthier lives by going out safely,” he said.

The Health department on Tuesday reported 8,560 new COVID-19 cases, bringing active cases to 79,016. Metro Manila and nearby provinces are under the strictest form of lockdown until Aug. 20 to curb a Delta-driven surge.

Think tank Oxford Economics in a July 30 report warned that the Philippine economy faces deep scarring from the pandemic. It estimated the country’s projected gross domestic product (GDP) in 2025 will still be 8.4% lower than its pre-pandemic forecasts.

The debt watcher Moody’s Investors Service also warned of the rising prospects for long-term economic scarring for the Philippine economy as the virus outbreak continues to dampen its recovery.

The government is aiming for a 6-7% growth this year from last year’s 9.6% slump. The economy has to grow by at least 8.2% in the second half to meet at least the lower end of the target, after it registered 11.8% growth in the secon d quarter. — B.M.Laforga

MPIC still keen on Sangley airport project

August 11, 2021 | 12:08 am

Offshore company offers to ‘combine’ tollways operation

THE Metro Pacific Investments Corp. (MPIC) remains open to Cavite’s Sangley airport project, its chairman said.

“I think the investment to make a second runway in Sangley operable is much less than building a new airport, so that’s why we are open to it… We’ll… probably take the plunge… It will have to be with half of our eyes closed,” MPIC Chairman Manuel V. Pangilinan told The Chiefs segment on Cignal TV’s One News Channel on Monday.

He said the Cavite airport is a good complement to the Ninoy Aquino International Airport (NAIA) because of their proximity.

“The orientation of the runway is similar to the orientation of the existing runway of the NAIA, so it’s a good second runway to Manila,” Mr. Pangilinan said, referring to the Sangley airport.

But the company will have to assess the “robustness” of air travel in the future, he noted.

“The demand for airports is very evident now,” he added, noting that this keeps the company waiting. “We are fortunate that we have a fairly, under normal times, robust domestic travel market unlike Singapore and Hong Kong.”

Mr. Pangilinan also said the company will need a partner if it decides to bid for the Sangley airport project.

Lucio C. Tan’s MacroAsia Corp. and its partner China Communications Construction Co. Ltd. negotiated with the Cavite province for the project last year, but the latter canceled its notice of selection and award due to the “various deficiencies in the submission of requirements to conclude the joint venture agreement.”

The province has issued a new invitation for firms to submit joint venture proposals for the airport project.

TOLLWAYS
Mr. Pangilinan also said on Monday that MPIC received an offer to “combine” with the toll roads of an “offshore” company.

“We received an offer to combine. This is an offshore tollways operator [combining] with our consort of — I think I’m talking too much — with our own,” he said.

“But I think if we are able to achieve (or) put all those tollways together, we’ll be the largest tollways operator in ASEAN,” he added.

MPIC saw its second-quarter core net income climb 82% to P3.5 billion, as more industries reopened.

For the first half, MPIC’s consolidated core net income rose 13% to P6 billion.

MPIC shares closed 0.80% lower at P3.72 apiece on Tuesday.

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

Monde Nissin reallocates IPO proceeds to pay P15.6-B loan

August 11, 2021 | 12:07 am

FOOD and beverage firm says cutting debt is “most prudent course of action.” — BW FILE PHOTO

MONDE Nissin Corp.’s board of directors has decided to reallocate the initial public offering (IPO) proceeds initially budgeted for capital expenditures (capex) to repay the majority of its remaining term loans worth P15.6 billion.

“It was determined that the most prudent course of action for shareholders is to pay down debt, resulting in significant interest savings and a reduction in interest rate risk,” said Henry Soesanto, chief executive officer of Monde Nissin.

The company earmarked over half or P26.5 billion of its IPO proceeds for its capex. It raised P48.6 billion when it debuted at the local bourse in June, the biggest-ever IPO in the country.

Monde Nissin said the decision to reallocate these funds would lead to around P700 million in interest expense savings, assuming current rates.

Despite the move, Monde Nissin said that it is not changing the plans stated in its offer prospectus.

“We continue to have strong conviction of the long-term growth opportunities of our businesses and capital expenditure plans and growth strategy will remain unchanged,” Mr. Soesanto said.

Monde Nissin said in its prospectus that it plans to finance key projects for its food and beverage business in the Asia-Pacific, which include the completion of its facility in Malvar, Batangas and to fund the increase in capacity for its innovation projects such as new healthy noodle lines, operational facility, and supply network transformation.

The company is also looking to expand its meat alternative business via product development capabilities and manufacturing improvement through building a new research and development facility.

“Funding will be provided by our strong operating cash flows supplemented with existing lines of credit if needed,” Mr. Soesanto said.

On Tuesday, shares of Monde Nissin at the stock market went up by 0.83% or 14 centavos to close at P16.92 each. — Keren Concepcion G. Valmonte

8990 Holdings bullish on beating pre-pandemic results as income hits P1.9B

August 11, 2021 | 12:06 am

8990 Holdings, Inc. said in a regulatory filing on Tuesday that it is “on course to exceeding its pre-pandemic results” as the company’s profits and revenues for the first half of the year surged.

The listed mass-housing developer reported a second-quarter net income of P1.91 billion, soaring from the P138.93 million earned in the same period last year. Its topline climbed by nearly three times to P5.54 billion from P1.42 billion.

For the six-month period ending June, 8990 Holdings posted a 133% profit growth to P3.46 billion from P1.48 billion year on year. This is already more than half of the company’s full-year income of P5.86 billion in 2019.

“Our first-half performance reflects the hope and optimism of Filipinos for socioeconomic recovery with the successful rollout of the vaccination program by both the government and private sector,” 8990 Holdings Chairman Mariano D. Martinez, Jr. said in a statement.

Revenues for the first half increased by 104% to P10.01 billion from P4.91 billion year on year.

“[The company’s] P10.01-billion revenue in the first six months of 2021 is also only P500 million shy of its P10.5-billion total sales revenue in the pre-pandemic January-to-September period in 2019,” 8990 Holdings said.

In 2019, the company generated P15.4 billion in revenues.

The majority or 71% of the company’s sales in the first six months of 2021 are from Luzon, amounting to P6.74 billion. Visayas accounted for 15% at P1.47 billion, and Mindanao made up for 13% of the sales at P1.27 billion.

Luzon also accounted for 56% of total units sold in the first half with 3,318 units, followed by Visayas with 1,606 or 27% of units sold. Mindanao units made up for 16% to total 965 units.

“While 8990’s gross margin declined from 54.6% to 49.5%, net income margin improved from 30.2% to 34.5% from the first half of 2020 to the same period this year,” the company said.

Mr. Martinez expects the company to “perform well” for the rest of the year.

Shares of 8990 Holdings at the stock market rose by 0.55% or four centavos on Tuesday, closing at P7.28 apiece. — Keren Concepcion G. Valmonte

DMCI income more than triples to P5.2B; coal sales lead

August 11, 2021 | 12:05 am

CONSUNJI-LED DMCI Holdings, Inc. said its net income attributable to equity holders reached P5.23 billion in the second quarter, up by more than three times the P1.42 billion posted a year earlier amid higher earnings from its business segments.

In a regulatory filing on Tuesday, the listed conglomerate said revenues from April to June hit P29.76 billion, more than twice the P11.75 billion registered in the same period last year.

Profits were led by the firm’s coal mining segment, which comprised a significant portion or 35% of its second-quarter earnings. Earnings from coal mining climbed to P10.57 billion, over three times the figure previously recorded in 2020.

DMCI said its reported net income in the second quarter grew more than threefold to P5.23 billion from P1.42 billion, which was mainly driven by “all-time high” coal and nickel sales, higher accomplishments from real estate and deferred tax remeasurement under the Corporate Income Tax and Incentives Reform Act.

In the first half of 2021, the holdings firm registered a consolidated net income of P9.5 billion, nearly five times the P2 billion it reported in 2020, due to a rebound of its subsidiaries Semirara Mining and Power Corp. (SMPC), DMCI Homes and DMCI Mining Corp., according to a separate statement.

“Coal and nickel prices were rallying while our production was ramping up so our Q2 (second quarter) was even better than our Q1 (first quarter). Revenue recognition in our real estate business also improved on higher productivity,” DMCI Chairman and President Isidro A. Consunji said.

“We are within striking distance of returning to our pre-pandemic annual net income of P10.5 billion. Barring any major unforeseen events and if commodity prices hold up, we may be able to finish the year even stronger,” he added.

DMCI said that its second-half performance will mainly depend on the movement of coal, nickel and electricity spot prices and sustained upswing of its mining, construction and power plant operations.

“Coal prices could trend upward on global supply disruptions amid strong China demand while nickel prices may strengthen further on robust stainless-steel production versus tightening supply because of coronavirus disease 2019 (COVID-19) lockdowns, bad weather and Indonesian ore export ban,” it said.

“Meanwhile, electricity spot prices could consolidate at around 4 pesos as demand eases during the rainy season and supply improves due to the commissioning of a major power plant, increased output of hydropower plants and reduced plant outages,” it added.

DMCI and its units are engaged in the general construction, coal and nickel mining, power generation, real estate development, water concession and manufacturing businesses. Its major subsidiaries are D.M. Consunji, Inc., DMCI Project Developers, Inc., SMPC, DMCI Power Corp., and DMCI Mining.

DMCI shares improved by 4.01% or 22 centavos to finish at P5.70 apiece at the stock market on Tuesday. — Angelica Y. Yang

Filipino biotech firm InterVenn raises P10B for immuno-oncology test

August 11, 2021 | 12:04 am

A FILIPINO-LED biotechnology company in the United States has received P10 billion in series C funding to develop and sell a blood-based test matching cancer patients to therapies with the best chance of response.

InterVenn Biosciences received this latter stage startup financing from SoftBank Group, Heritage Provider Network, Irving Investors, and Highside Capital Management.

The funding will be used to develop and sell Dawn, a blood-based test that will help physicians match cancer patients to immune-oncology therapies, the company said in press release on Monday.

Dawn is in early validation, a process done to demonstrate consistent quality, for patients with melanoma as well as pancreatic and lung cancers, while its use for other tumor types is being studied.

InterVenn Chief Executive Officer Aldo Carrascoso is a graduate of Ateneo De Manila University and Babson College, while co-founder Carlito Lebrilla, is a professor at the University of California, Davis School of Medicine.

The InterVenn headquarters and US-regulator certified clinical laboratory are in San Francisco, California.

“One hundred percent of our software is done in the Philippines,” Mr. Carrascoso said.

“Our engineering team in our Pasig City office takes care of the cloud infrastructure, front end, back end, and even security. Information security, information event management. Events like infiltration, penetration testing. We have a full staff that does dev ops, server systems administration.”

InterVenn previously worked on Glori, a test that can differentiate between benign and malignant pelvic tumors in women with 86% accuracy, after receiving P2 billion in venture investment from Genoa Ventures, True Ventures, Amplify Partners, Boost VC, Prado SV, the Ojjeh Family and Anzu Partners.

The company continues to work on studying early-detection blood tests for adenoma, colorectal cancer, and nasopharyngeal carcinoma. — Jenina P. Ibañez

1...6,0476,0486,049...12,617 Page 6,048 of 12,617