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PLDT said to weigh $800-million telecom towers sale

PLDT Inc., the Philippines’ biggest telecommunications and digital services provider by market value, is considering selling its local towers in a deal that could be worth about $800 million, according to people with knowledge of the matter.

The Makati-based company is working with an adviser on the planned disposal, said the people, who asked not to be identified as the process is private. A transaction would involve PLDT selling the towers and then leasing them back, the people said. The company could be seeking as much as $1 billion from a sale, one of the people said.

Transactions involving digital infrastructure such as telecom towers and data centers have been on the rise recently amid global technology rollouts. DigitalBridge Group Inc. this week agreed to buy the data center business of Hong Kong’s PCCW Ltd. for $750 million, while Bloomberg News reported in May that GDS Holdings Ltd. is considering acquiring GLP Pte’s data center operations in a deal that could value the assets at as much as $10 billion.

Deliberations are still ongoing and PLDT can decide to keep the business, the people said. PLDT President and Chief Executive Officer Al Panlilio declined to comment, adding the company is still assessing its options.

PLDT, which has a market value of about P268 billion ($5.3 billion) counts Japan’s Nippon Telegraph and Telephone Corp. and Hong Kong-based investment firm First Pacific Co. among its major shareholders, according to data compiled by Bloomberg. The company’s total mobile subscribers stood at about 72 million by the end of March, while it had about 3.3 million users for its broadband services, its latest presentation shows. — Bloomberg

Philippines to place Manila area in lockdown to curb Delta spread

Photo by Michael Varcas, The Philippine Star

MANILA – Philippine President Rodrigo Duterte on Friday approved the imposition of lockdown measures in the capital region to prevent the spread of the more contagious Delta coronavirus variant, the presidential spokesperson said.

The Manila capital region, an urban sprawl of 16 cities home to more than 13 million people, will be placed under the tightest quarantine curbs from August 6 to 20, Presidential spokesman Harry Roque said in a televised address. “While it is a painful decision, this is for the good of all.” — Reuters

AllBank and UnionPay International collaborate to boost digital payments in the Philippines

AllBank (A Thrift Bank), Inc. announced today an exciting partnership with UnionPay International to boost financial inclusion in a digitally driven market. Through this collaboration, AllBank UnionPay cardholders now enjoy the convenience and efficiency of digital payments at popular merchants in The Philippines, and can even shop online in the comfort of their homes. As soon as international travel restrictions are gradually eased, AllBank UnionPay cardholders may simply bring and present their AllBank UnionPay debit cards, cash cards and/or prepaid cards to shop and/or withdraw cash in 180 countries and regions.

In line with its commitment to digitally modernizing banking products and services, AllBank recently launched its Electronic Know Your Customer (E-KYC) facility where customers can conveniently apply for cash cards / debit cards without physically completing bank forms in any AllBank branches. With this innovation, card application may be initiated using E-KYC via AllBank’s Mobile Banking Application that is readily available for download in both android and iOS mobile devices. AllBank commits to further enhance the features of its cards, and introduce contactless payment features through UnionPay’s QuickPass (contactless) payment facility.

Aside from modernizing traditional payments, AllBank will soon expand the features of its digital wallet powered by UnionPay, so that cardholders can conveniently utilize digital payment functions of AllBank’s Mobile Banking Application and enjoy the benefits of UnionPay QR Code Payment across 12,000 acceptance points in the Philippines and at over 30 million merchants around the world.

“We’re very much thrilled to be joining hands with UnionPay International to offer not just traditional card payments but soon to expand the innovative payment experience for our customers.” said Mr. Jesus Vicente Garcia, President of AllBank. “Our vision is to allow our customers to enjoy a seamless banking experience. Our collaboration with UnionPay International will help our expansion strategy and boost consumer adoption, especially during this pandemic,” said Mr. Garcia.

“As a global payment brand that promotes e-Payments by connecting consumers, financial institutions and businesses, UnionPay is pleased to partner with AllBank to enable more consumers in The Philippines to enjoy quick and secure cashless transactions with AllBank UnionPay Debit and Cash/Prepaid Cards. This collaboration is also in line with our vision to promote financial inclusion in the country. In addition to card payment, AllBank customers can soon enjoy the convenience of making UnionPay QR Code payment both locally and abroad when the AllBank Mobile Banking app is enhanced to read UnionPay QR Code,” said Mr. Qing Zhang, Senior Country Manager, UnionPay Philippines.

ABOUT UNIONPAY INTERNATIONAL

UnionPay International focuses on the growth and support of UnionPay’s global business. In partnership with more than 2,400 institutions worldwide, UnionPay International has enabled card acceptance in 180 countries and regions with issuance in 70 countries and regions. UnionPay International provides high quality, cost effective and secure cross-border payment services to the world’s largest cardholder base and ensures convenient local services to a growing number of global UnionPay cardholders and merchants.

ABOUT ALLBANK (A THRIFT BANK)

AllBank (A Thrift Bank), Inc. is in the business of providing specialized financing products and services to working-class Filipinos and business owners. AllBank’s fundamental goal is to play a vital role in the development, not only in the communities that its branches call home, but also the businesses that surrounds it.

AllBank offers services and highly competitive products that yield better returns compared to other banks. Banking is never a chore due to its top-notch customer service innovations.

Currently, AllBank has 17 Branches and 30 ATM Terminals operating all over Luzon servicing its more than 25,000 account holders across the country. AllBank also offers 34 different products and services to its customers and its market – the working-class individuals, as well as Entrepreneurs, Business Organizations, and Micro, Small, and Medium Enterprises (MSMEs).

Providing extended banking services for the convenience of its customers, AllBank has commenced its transformation towards Digital Banking. To date, AllBank already has 11 digital banking products and services, with over 12,000 users across the country.

Accenture rolls out CSR projects

Image via Accenture

Accenture Philippines recently partnered with Caritas Manila, Philippine Business Social Progress (PBSP), and Philippine Business for Education (PBEd) to implement corporate social responsibility projects that will, respectively, address food security, support livelihood training, and digitally upskill Filipinos.  

These programs, detailed in a virtual event on Tuesday, are part of the P240-million pledge that Accenture made this May to help local communities amid the coronavirus disease 2019 (COVID-19) pandemic. 

Through social service ministry Caritas Manila, Accenture will distribute gift vouchers to 180,000 Filipino families to help provide for their everyday needs. It will also oversee a six-month feeding program for 5,000 malnourished children in communities in the National Capital Region and nearby cities.  

“Malnutrition affects brain development… We have to save them before they reach 9 years old, else the damage is permanent,” said Fr. Anton T. Pascual, Caritas Manila’s executive director, adding that 1 in 3 Filipino children five years old and below is malnourished.  

The project with PBSP entails upskilling 3,000 individuals. The corporate-led social development foundation also provides livelihood training and assistance to about 14,000 families and 1,300 individuals through other programs. 

Accenture’s partnership with PBEd, meanwhile, is a volunteer-based community program called Kiddie Train that aims to teach 1,000 public school students from kindergarten to grade 3, as well as bring them up to speed with the reading, math, and science curricula. The program, which will pilot in Cebu in the next few weeks, includes the distribution of 1,000 tablets to students and teacher-facilitators to ensure continued learning.  

“At the household level, things are worrying. A 2020 Pulse Asia survey found that 1 out of 4 parents say their children are not learning enough,” said Lovelaine B. Basillote, executive director of PBEd.  

Apart from these projects, Accenture also has nine digital platforms that allow employees to volunteer virtually and share their skills. Thus far, more than 3,800 employees have spent around 10,000 hours upskilling Filipino youth, teaching children how to code, and mapping areas for disaster relief, among others. 

“With the support of our volunteers, we are on track… with our upskilling programs, despite the challenges that the pandemic brings,” said Louise G. Sabariaga, Accenture Philippines’ corporate citizenship executive sponsor, in a press statement. “We have also recalibrated our volunteering programs so that our employees are able to pursue their passion to make a difference in their own way.” — P. B. Mirasol

UnionBank is the Philippines’ foremost bank for SMEs, wins SME Bank of the Year 2021 at Asian Banking & Finance awards

Union Bank of the Philippines (UnionBank) was recently named SME Bank of the Year Philippines 2021 at the Asian Banking & Finance (ABF)’s Retail Banking Awards 2021. This distinction further validates UnionBank as the country’s foremost Bank for SMEs.

“Financial institutions that didn’t back down from the challenge and have adapted amidst the crisis have proved to be on the top of the industry. Asian Banking & Finance awards aim to recognize these exceptional firms and challenge them to provide top-tier products and services to their clients as we continue to move forward into the new normal,” said Tim Charlton, publisher of Asian Banking & Finance magazine.

This is the second time around that Asian Banking & Finance has recognized the Bank with this much-coveted award, the first time being in 2019 when it was honored for successfully enhancing SMEs’ competitiveness in the domestic and global markets by co-creating with them — building an SME package or a suite of banking products essential to operate their business.

SMEs have always been faced with the host of growth challenges including managing and enabling financial transactions, access to credit, and expanding their reach. These challenges have been aggravated by the COVID-19 pandemic which brought about substantial impact on SME clients since the lockdown in March 2020.

Prior to COVID, UnionBank has already laid the groundwork to address these challenges by introducing an MSME Banking Hub.

The first-to-market UnionBank SME Business Banking app came at the perfect time in 2020 to cater to the shifting needs of SMEs by offering the widest range of digital options and functionalities in managing their financial transactions such as: the first bank to introduce mobile check deposits which was most used feature during the lockdown due to the protocols set by the government; and first bank in the country to introduce Digital Account Opening for SMEs. In addition to this, there was a significant increase of banking customers coming from the platform, with a total of 71% new SME Business and Personal accounts from 2020 up to June 2021, contributing a total additional growth of 50% in deposit balances and another 50% additional growth in loans.

The app also has the most extensive list of government and utility billers for bills payment, local and international batch bank transfers, setup of customized and complex approval flows, batch account opening and management of payroll accounts, and a single log-in for all enrolled companies and subsidiaries.

It includes a payment gateway feature beneficial for SME owners to create a unified payment solution for easy collection. With a simple link, customers may pay through channels such as Visa and Mastercard. Other payment options to be included are Instapay, over-the-counter, digital wallets, UnionBank online, among many.

To address the needs for more access to credit, UnionBank Business Loan via the SeekCap platform offers a convenient and straight through digital application process, allowing SMEs to get a credit decision within 5 minutes/less. This is possible with the aid of APIs which pull data in real-time and feed into our credit scoring algorithm which is continuously enhanced through machine learning.

Lastly, UnionBank GlobalLinker, an AI-powered digital platform entirely dedicated to SMEs who can use the platform free of cost, transforms the way the Bank serves and supports SMEs.

It allows SMEs to expand networking reach, increase learning capabilities, and improve their digital presence by creating fully digital stores. UnionBank has conducted over various webinars to utilize the platform and expand SME’s learning opportunities. It has reached a total of 60,000 SMEs on the platform, enabling affinity partners where communities of SMEs are onboarded to the platform with help and promotions of key organizations such as the Department of Trade.

The Bank has also digitized the supply chain through its Financial Supply Chain platform, the first blockchain-enabled financial supply chain in the country. The platform provides financing products to supply chain ecosystems at scale through risk mitigation, security, and automation.

UnionBank’s continuing efforts in helping MSMEs have not gone unnoticed as it garnered these awards from Asian Banking & Finance as well as from Asiamoney with the Best Bank for SMEs award citing that by helping bring these companies into the financial system, the Bank is making an admirable contribution not just to its own bottom-line but to the future of its country.

“This pandemic emphasizes that all of us must have a higher purpose than just ‘profit’. For us at UnionBank, this greater-purpose is to extend banking and financial services to the mass market and the unbanked, via best-in-class digital and physical channels, so that they can be ‘digitally transformed’ and future-ready. We will continue to support MSMEs so they can be globally competitive in this new digital age as we continue our efforts to ‘Tech Up Pilipinas’ while pioneering innovations for a better world,” said UnionBank President and CEO Edwin R. Bautista.

 

Debt climbs to new high of P11.2T

BW FILE PHOTO

THE NATIONAL Government’s outstanding debt inched up to a new high of P11.166 trillion at the end of June, amid an increase in foreign borrowings to finance the pandemic response.

Preliminary data from the Bureau of the Treasury (BTr) showed the National Government’s debt stock rose by 0.9% from its end-May total of P11.07 trillion. This is also 23% higher than the P9.054-trillion outstanding debt a year ago.

Since the start of the year, the debt pile grew by 14% from P9.795 trillion, as the state borrowed P1.371 trillion.

Of the total, local debt accounted for 71%, while 29% were external borrowings.

As of end-June, outstanding local borrowings reached P7.938 trillion, a tad higher than the P7.916 trillion logged in May after the BTr increased its borrowing program for the month.

Overall government securities grew by 0.3% to P7.398 trillion from the previous month, but 25.6% higher from a year ago.

The local debt stock included a P540-billion loan from the Bangko Sentral ng Pilipinas (BSP).

External debt, on the other hand, jumped 2.3% to P3.23 trillion from the previous month.

“The increase in external debt was due to the impact of local-currency depreciation against the US dollar amounting to P64.86 billion and net availment of foreign loans amounting to P25.52 billion. These were tempered by the P18.27-billion decrease in the peso value of debt denominated in other currencies such as the EUR (euro) and JPY (Japanese yen) due to currency appreciation,” the BTr said.

Foreign debt rose by 12.7% from P2.864 trillion a year ago. This was broken down into P1.42 trillion in foreign loans and P1.81 trillion in global bonds.

The debt stock rose further as the government has to plug its widening budget deficit as the pandemic continued, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said.

“Increased government spending especially on infrastructure to help pump-prime the economy as a major pillar of the economic recovery program also led to wider budget deficits and some pick up in outstanding government debt recently,” he added.

Meanwhile, overall guaranteed debt rose month on month by 2.8% to P438.6 billion as of end-June, but 4.7% lower than the P460 billion as of June 2020.

The BTr attributed the increase to the P11.07-billion freshly acquired guarantees and the P3.98-billion impact of local-currency depreciation, which were partly offset by third-currency exchange rate fluctuations and debt repayments.

Mr. Ricafort said the government’s debt pile will continue to increase in the coming months as public spending rises, especially on infrastructure and ahead of the May 2022 national elections.

“The budget deficit-to-GDP (gross domestic product) and debt-to-GDP ratios of the Philippines have been relatively lower compared to some countries in ASEAN/Asia amid fiscal discipline in view of limited government funds allowed under the law for any additional stimulus measures.”

The government planned to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 9.3% of GDP.

The country’s debt level is expected to reach 59.1% of GDP by year’s end, from 54.6% as of end-2020 and 39.6% as of-end 2019. — Beatrice M. Laforga

National government outstanding debt

Auto industry’s uncertainties eased after tariff investigation report

PHILIPPINE STAR/ MICHAEL VARCAS

AUTOMAKERS are facing less uncertainty following the Tariff Commission’s recent finding that there is no basis for the imposition of safeguard duties on vehicle imports.

“The final report issued by the Tariff Commission finding that there is no basis for the imposition of safeguard duty has put to rest the uncertainties brought about by the petition,” Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) President Rommel R. Gutierrez said in a Viber message on Thursday.

The Tariff Commission in its final report released on July 23 said that it recommends that no safeguard measures be imposed on imported completely built-up units of passenger cars and light commercial vehicles.

The cars subject to investigation were not imported in increased quantities and therefore could not seriously injure local groups, the commission said.

Mr. Gutierrez said that the chamber commends the process done by the Department of Trade and Industry (DTI) and the Tariff Commission (TC) in responding to the petition filed by Philippine Metal Workers Alliance (PMA) for safeguard measures.

“The automotive manufacturing sector will continue with its strong collaboration with the government in its efforts to sustain local production of vehicles and address the concerns of various stakeholders,” he said.

The investigation was prompted by autoparts labor group PMA’s petition for safeguard duties on car imports, claiming a decline in local employment after a surge in imports. The Safeguard Measures Act or Republic Act No. 8800 allows domestic producers to ask the government to conduct an investigation into their import competitors if they claim to have been injured by excessive imports.

In response, the DTI earlier this year imposed 200-day provisional duties on car imports to protect local jobs, while the Tariff Commission conducted its own investigation.

Legal teams representing car firms and industry groups affected by the duties in February questioned the labor group’s ability to represent the car industry, given that the domestic manufacturers themselves oppose the duties.

But PMA said that it is a legitimate stakeholder in the car industry because it represents workers made vulnerable by disruptions in the production process. According to the Tariff Commission’s final report, PMA is a “juridical person belonging to the motor vehicles industry.”

PMA has not yet responded to the Tariff Commission’s conclusions, while the DTI said it is studying the report.

Car sales increased 44.8% to 22,550 units in June compared with 15,578 in the same month last year, a joint report from CAMPI and Truck Manufacturers Association (TMA) said.

The car industry could recover to pre-pandemic sales as late as 2023, Mr. Guttierez said earlier this year. The best-case scenario for the industry in 2021, he said, is 30-35% sales growth, although the provisional safeguard duties on imported cars could lower growth to 20-25% compared with last year’s figure. — Jenina P. Ibañez     

PSE eyes REITs from smaller property firms

BW FILE PHOTO

THE PHILIPPINE Stock Exchange (PSE) is hoping that more property developers, even small- and medium-sized firms, will consider entering the real estate investment trust (REIT) market.

“We are pushing for this REIT product not only for the big real estate developers, but we wanted to target the medium and even the small property developers so that they could recycle their capital and invest,” PSE President and Chief Executive Officer Ramon S. Monzon said at a virtual forum on Thursday.

The local bourse maintains a “robust” pipeline for the second half of the year.

“So far, applications have been filed with the PSE for capital-raising activities amounting to P141.8 billion or $2.8 billion,” Mr. Monzon said. 

Three REIT companies, namely Filinvest REIT Corp., RL Commercial REIT, Inc., and MREIT, Inc., are planning to launch initial public offerings (IPO) this year.

Meanwhile, Del Monte Philippines, Inc. is planning to conduct an IPO worth P44 billion, while Jollibee Foods Corp. and Sta. Lucia Land, Inc. are also preparing follow-on offerings.

Capital raised at the local bourse in the first six months of the year amounted to P122.46 billion, already exceeding the capital raised for the whole of 2020 at P103.76 billion.

The PSE is also looking to introduce new products and services in the second half of the year, such as short selling and developing two new indices, to boost market liquidity.

“We’re trying to still follow-up the approval [from our regulators for] our short selling product, which I believe will be key to attracting foreign investors back to our market,” Mr. Monzon said. 

The PSE is waiting for the Bureau of Internal Revenue to approve the Global Master Securities Lending Agreement.

The PSE is also waiting for the Securities and Exchange Commission to approve the offshore collateral request of foreign investors, and the Philippine Depository & Trust Corp.’s application as securities lending agent. 

“We will also be increasing our sector classification to comply more with global benchmarks, we shall also be developing two additional indices,” Mr. Monzon.

It aims to launch is the mid-cap index and a high-dividend index. Meanwhile, an environment, social, and governance (ESG) sub-index is planned for 2022. — K.C.G. Valmonte

VAT on exporters’ local inputs formally deferred

REUTERS
THE Bureau of Internal Revenue has suspended its recent order that imposed a 12% value-added tax on previously exempt raw materials sold by local manufacturers to exporters. — REUTERS

THE BUREAU of Internal Revenue (BIR) suspended its recent order that imposed a 12% value-added tax (VAT) on previously exempt raw materials sold by local manufacturers to exporters, after outcry from the export industry.

BIR Commissioner Caesar R. Dulay issued Revenue Regulation (RR) No. 15-2021 on Wednesday deferring the effectivity of RR 9-2021 until the issuance of a new amendatory regulation, as a form of relief for exporters struggling amid the pandemic.

“We thank Sec. Sonny (Finance Secretary Carlos G. Dominguez III) for his intercession. It’s a ton off the shoulders of both direct and indirect exporters plus the MSMEs (micro, small and medium enterprises) supply chain,” George T. Barcelon, chairman of the Philippine Exporters Confederation, Inc. (Philexport) said in a Viber message on Thursday.

Mr. Dominguez said earlier this month that the regulation was being reviewed to align the conflicting provisions under Corporate Recovery and Tax Incentives for Enterprises (CREATE) law and Tax Reform for Acceleration and Inclusion (TRAIN) law.

CREATE, which was enacted in April retained the zero-tax rate for exporters while the Tax Reform for Acceleration and Inclusion (TRAIN) law in 2018 mandates the BIR to impose the VAT on these previously zero-rated transactions once the 90-day refund system is in place.

The BIR issued the RR, which took effect on June 27, to comply with the TRAIN law’s provision.

Various exporters’ groups and foreign chambers had asked the BIR to repeal the RR, saying this could cripple the industry and hamper investments.

Mr. Barcelon had said imposing a 12% VAT on locally sourced inputs could force companies to source their raw materials offshore instead where they can enjoy lower taxes. — B.M.Laforga

Fed chief sees progress on taper conditions

REUTERS
THE Federal Reserve Board building is pictured in Washington, US, March 19, 2019. — REUTERS

FEDERAL RESERVE officials are moving closer to when they can start reducing massive support for the US economy, though chief Jerome Powell said there was still some way to go.

“We’re not there. And we see ourselves as having some ground to cover to get there,” he told a press conference Wednesday after the Federal Open Market Committee (FOMC) held interest rates in a range near zero and maintained asset purchases at $120 billion a month until “substantial further progress” was made on employment and inflation.

“The economy has made progress toward these goals, and the committee will continue to assess progress in coming meetings,” the FOMC said in its policy statement. The vote was unanimous.

Mr. Powell said officials had taken a “first deep dive” during their two-day meeting on how to go about scaling back bond buying when the time came — but no decision on taper timing had been made.

“We’re making progress. We expect further progress and if things go well, we will reach that goal,” he said.

Stocks pared losses, the dollar lost ground and 10-year Treasury yields initially advanced as investors digested the somewhat hawkish tone of the statement, but declined as he spoke.

“The chairman tried to walk that back a little bit in the press conference, making it seem like it’s more of a continuous process rather than just a big discrete move,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC.

The FOMC also repeated language that inflation had risen “largely reflecting transitory factors,” and that risks to the economic outlook remain.

“The sectors most adversely affected by the pandemic have shown improvement but have not fully recovered,” the statement said.

DELTA VARIANT
Consumer prices are rising at the fastest pace since 2008 as the economy reopens and Americans renew spending after a year of lockdown. At the same time, the spreading Delta variant has jolted investors who worry it could threaten the economic recovery.

“As long as COVID is running loose out there, as long as there is time and space for the development of new strains, no one is finally safe,” Mr. Powell said.

“The Fed is starting the clock on tapering. It is not happening now or even in September, but expect the pace of asset buying to slowdown late this year or early next,” said Neil Dutta, head of US economics at Renaissance Macro Research

Fed officials held their benchmark interest rate in a zero to 0.25% range and Mr. Powell said “we’re clearly a ways away” from liftoff. Fed forecasts published last month showed rates on hold through next year. The quarterly projections will be updated in September.

Since last September, the Fed has set the amount of its monthly purchases of Treasuries at $80 billion and mortgage-backed securities (MBS) at $40 billion to help the economy heal from COVID-19.

Mr. Powell said officials had discussed the mechanics of scaling back bond buying when the time came, including the pace and composition of any changes, and promised plenty of advance warning before any decision.

Some officials have said they would like to begin the taper sooner rather than later, citing financial stability concerns including the steep rise in home prices. They’ve also argued the Fed should reduce its MBS purchases at a faster pace than Treasuries because the housing market no longer needs central bank support.

The July meeting comes a month ahead of the Kansas City Fed’s annual policy retreat in Jackson Hole, Wyoming. Fed chairs, including Mr. Powell, have sometimes used the venue to signal policy shifts. Mr. Powell confirmed he will speak at the Aug. 26-28 conference. The next gathering of the FOMC is Sept. 21-22.

Employment has made significant strides in the past few months, with the unemployment rate falling below 6% as more jobs are added and more workers rejoin the labor force. But the gains haven’t been equal for all Americans — the Black unemployment rate stood at 9.2% and the Hispanic rate at 7.4% in June.

While inflation is running well above the Fed’s 2% target, officials have said that price spikes are likely temporary and are being driven by categories related to the economic reopening. Used vehicles accounted for a more one-third of the gain the June consumer price index. Hotels, airfares and clothing also drove the 5.4% year-over-year jump.

In addition, economists say the increased spread of the delta variant, which is now the dominant strain of coronavirus in the US, may weigh on growth in the second half of this year.

Variants have surpassed inflation as the biggest risk to market stability, according to Deutsche Bank AG’s monthly survey of market participants. — Bloomberg

Aboitiz group profit more than doubles to P4.9B

ABOITIZ GROUP

ABOITIZ Equity Ventures, Inc. (AEV) posted a 159% year-on-year increase in its consolidated net income for the second quarter to P4.9 billion on the back of its business segments’ robust contribution.

AEV said in a stock exchange disclosure on Thursday that it recognized one-times gains of P49 million during the period, against P242 million a year earlier, for the revaluation of dollar-denominated assets.

“Without these one-off gains, the company’s core net income for the second quarter of 2021 was P4.9 billion, a 194% increase year on year,” it said.

Consolidated earnings before interest, tax, depreciation, and amortization (EBITDA) rose 29% to P14.3 billion.

In the first half, AEV’s net income rose 243% to P13.5 billion against P3.9 billion in the same period last year. It recognized nonrecurring losses of P169 million for the period, up from P20 million last year, as a result of the goodwill write-off related to City Savings Bank, Inc.

Sabin M. Aboitiz, AEV president and chief executive officer, said the group’s first-half performance “is a solid foundation for optimism” that the country is heading towards economic recovery.

“However, we know the coronavirus disease 2019 (COVID-19) Delta variant remains a very real threat, so we have to be cautious in our next steps,” he said in the disclosure.

AEV said that without the one-off losses for the period, its core net income for the first half was P13.6 billion, a 246% increase year on year. It also said that consolidated EBITDA rose 43% to P32.8 billion.

Among its business units, Aboitiz Power Corp. made up 53% of the total income contributions, followed by financial services at 28%, infrastructure at 9%, food at 7%, and real estate at 3%.

In a separate disclosure on Thursday, AboitizPower said it posted a 136% increase in its consolidated net income for the second quarter to P4 billion. The company recognized nonrecurring gains of P34 million, down from P251 million in the same period a year earlier.

Without the one-off gains, core net income for the second quarter was P3.9 billion, 175% higher year on year.

“This was due to commissioning revenue from the company’s new facility, GNPower Dinginin Unit 1, as well as higher water inflow, higher demand, and higher Wholesale Electricity Spot Market (WESM) dispatch in compliance with the must offer rule,” AboitizPower said.

For the first six months of the year, AboitizPower recorded a P171% increase in its net income to P10.1 billion.

The company recognized nonrecurring gains of P5 million, lower than P224 million previously, due to net foreign exchange gains on the revaluation of dollar-denominated liabilities.

Emmanuel V. Rubio, AboitizPower president and chief executive officer, said higher energy demand due to the easing of pandemic-related restrictions helped the company’s financial performance.

“Later this year, GNPower Dinginin Unit 1 will begin commercial operations and deliver the much-needed additional capacity to the Luzon grid. In the next 10 years, our focus will be to grow our Cleanergy portfolio to 4,600 megawatts (MW),” Mr. Rubio said.

“The significant growth of Cleanergy will bring our overall capacity to 9,200 MW by 2030, with a 50:50 balance between renewables and thermal,” he added.

Meanwhile, UnionBank of the Philippines’ income contribution to AEV for the first six months reached P4.2 billion, up 92% from the P2.2 billion. Its net revenues also rose 16% to P25.5 billion.

The combined first-half income contribution of AEV’s non-listed food subsidiaries such as Pilmico Foods Corp., Pilmico Animal Nutrition Corp., Pilmico International Pte. Ltd., and Gold Coin Management Holdings Pte. Ltd. improved 35% to P1.1 billion from P795 million in 2020.

Aboitiz Land, Inc. posted a consolidated net income of P385 million for the first semester, a turnaround from the P39-million net loss incurred last year.

Republic Cement & Building Materials Inc.’s income contribution to AEV reached P1.3 billion, recovering from the P10-million net loss a year earlier due to stronger market demand carried by the residential and infrastructure segments.

On Thursday, shares of AEV fell 1.25% or 50 centavos to P39.50 apiece, while stocks of AbotizPower rose 0.84% or 20 centavos to P24 each. — Revin Mikhael D. Ochave

PetroEnergy plans ‘transition’ towards power generation

PETROENERGY Resources Corp. said on Thursday that it will be focusing more on the power generation business as it hopes to grow into one of the most profitable listed energy companies in the Philippines.

“These are exciting times for our company as we transition more and more into the power generation business. We have a lot on our plate, which we aim to put ‘onscreen’ as we have done with the other projects now in our portfolio,” PetroEnergy President Milagros V. Reyes said during the company’s virtual annual stockholders meeting.

“This is to fulfill our mission to provide optimum value to our shareholders who are keeping our focus on our vision to grow into one of the most profitable publicly listed energy companies in our country,” she added.

PetroEnergy has three projects “ready for takeoff” and two offshore wind service contracts, Ms. Reyes said.

The projects are the 25-megawatt (MW) direct current solar power plant in Bohol; the 10-MW wind hybrid project in San Vicente, Palawan; and the 14-MW Nabas-2 wind power project in Aklan.

“We have also successfully been awarded two offshore wind service contracts which we shall pursue in earnest,” Ms. Reyes said, referring to sites in Northern Luzon (Ilocos region) and Northern Mindoro where wind energy projects will be built.

During the annual meeting, she said PetroEnergy’s power generation ventures were not greatly affected by the pandemic because these renewable energy sources have fixed power rates under the feed-in-tariff (FiT) scheme or under long-term bilateral agreements.

However, the company’s upstream petroleum ventures were hard-hit as crude oil prices fell.

“The global crude oil market was in turmoil due to these uncertainties [and the] deep dive in prices would not be compensated by higher production volumes, which we attempted from our newer wells,” Ms. Reyes said.

PetroEnergy is engaged in petroleum production through the Etame consortium in the African country of Gabon; and in renewable energy at home through its subsidiary PetroGreen Energy Corp.

The Yuchengcos’ listed energy and petroleum exploration company is chaired by Helen Y. Dee, with Yvonne S. Yuchengco as treasurer.

The firm previously registered an attributable net income to its parent of P106.30 million in the three months ending March, lower by 16% compared with the P126.04 million recorded in the same period last year.

Last year, it reported an attributable net income of P319 million, 9% higher due to increased revenues from its 20-MW Tarlac-2 solar plant amid the prolonged summer season and FiT rate adjustments.

PetroEnergy’s shares at the local bourse shed 2.96% or 12 centavos to finish at P3.93 apiece on Thursday. — Angelica Y. Yang

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