Mega Global projects tempered sales growth

July 30, 2021 | 12:01 am

CONSUMER goods maker Mega Global Corp. projects a slower growth for this year after posting “phenomenal sales” last year, company officials said on Thursday.

Marvin Tiu Lim, Mega Global chief growth and development officer, said that the company might not be able to replicate its performance last year. He did not disclose specific figures.

“Last year, it was phenomenal sales for our company, as you know with all the local government units ordering for ayuda (aid). Our sales more than doubled in some months last year. This year, I do not think we will be able to reach that,” Mr. Lim during the virtual launch of the company’s Mega Bigay Sustansya nutrition program.

“Reports showed that the total fast-moving consumer goods market is down. However, we are trying to harness other products such as our new corn sardines and our canned tuna line that can hopefully fill in the gaps of what we are going to lose in sardine sales versus last year,” he added.

Mr. Lim also disclosed that Mega Global is seeking a five percent price increase for its products due to higher costs of raw materials used in production.

He said tin cans currently cost a peso more, translating to a big increase in production expense.

“We are seeking a five percent adjustment towards our prices, which will hopefully get approved, because we have 4,000 employees to feed as well. As much as we do not want to increase prices for the Filipinos, we have to maintain job security in our company and maintain the innovation, the growth that we have internally,” Mr. Lim said.

Michelle Tiu Lim Chan, Mega Global chief operating officer, said the company will be launching a fresh frozen fish line featuring galunggong (round scad) and matang-baka (big-eyed scad), which she hopes will be one of the company’s growth drivers for the year.

She added that the company is building its first plant in Luzon, located in Sto. Tomas, Batangas, which will soon offer a variety of new products to consumers.

Mega Global’s Mega Bigay Sustansya program, which is on its third straight year, is in partnership with the Reach Out Feed Philippines.

“The program aims to support 870 children from various barangays across six provinces through a 60-day nutrition program. These include Batangas, Navotas, Valenzuela, Samar, Surigao del Sur, and Zamboanga,” Mega Global said.

“Beneficiaries are children aged 4-12 years old, who will receive two nutritious meals daily for 60 days. The daily meals will include at least one sardines meal, made using Mega Global’s vitamin and nutrient packed high-quality sardines,” the company added. — Revin Mikhael D. Ochave

National government outstanding debt

July 30, 2021 | 12:00 am

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. Read the full story.

How PSEi member stocks performed — July 29, 2021

July 30, 2021 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Thursday, July 29, 2021.

Peso climbs on quarantine measures, dovish Fed

July 29, 2021 | 9:00 pm

THE PESO appreciated versus the greenback on Thursday as the government kept Metro Manila under general community quarantine (GCQ) and after the US Federal Reserve said it will continue to support the world’s largest economy.

The local unit closed at P50.305 per dollar on Thursday, gaining 6.5 centavos from its P50.37 finish on Wednesday, based on data from the Bankers Association of the Philippines.

The peso opened Thursday’s session stronger at P50.31 per dollar. Its weakest showing was at P50.39, while its intraday best was at P50.27 against the greenback.

Dollars exchanged increased to $993.8 million on Thursday from $686.5 million on Wednesday.

A trader said the peso strengthened after the government maintained its quarantine classification for Metro Manila and nearby provinces.

Presidential Spokesperson Herminio L. Roque, Jr. on Wednesday said Metro Manila will remain under GCQ with “heightened restriction” measures in the first half of August despite rising coronavirus cases due to the spread of the Delta variant.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso rose versus the dollar following dovish signals from the Fed.

The Fed on Wednesday retained the interest rates near zero, as widely expected. It has also kept its bond-buying program unchanged, Reuters reported.

Fed Chairman Jerome Powell said data showing stronger job gains will be needed before they start cutting bond purchases.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno on Thursday said the recent weakness of the peso is in line with the broad depreciation of most Asian currencies versus the greenback.

The peso’s close on Thursday is lower by P2.382 or 4.7% from its P48.023-a-dollar finish on Dec. 29, the last trading day of 2020.

“The only exceptions are the Chinese yuan and New Taiwan dollar. On the whole, regional currencies have been weighed down by prospects of earlier US monetary policy normalization, as well as uncertainties in their growth outlook due to the ongoing health crisis,” Mr. Diokno said in an online briefing on Thursday.

“We therefore see the recent movements of the peso as reflective of shifts in demand and supply conditions in the foreign exchange market, as well, as emerging external and domestic developments,” he added.

Factors that affected the peso last month include worries over the Delta variant, the Fed’s hawkish shift, and higher corporate demand for the dollar amid the economy’s gradual recovery.

For Friday, Mr. Ricafort gave a forecast range of P50.25 to P50.35 per dollar, while the trader expects the local unit to move within a wider band of P50.20 to P50.45. — L.W.T. Noble with Reuters

Shares inch up as gov’t keeps NCR Plus under GCQ

July 29, 2021 | 9:00 pm

PHILIPPINE shares closed in the green on Thursday, with investors optimistic after the government maintained loose restriction measures for Metro Manila and nearby provinces or the National Capital Region (NCR) Plus bubble.

The benchmark Philippine Stock Exchange index (PSEi) improved by 23.50 points or 0.36% to 6,496.53 on Thursday, while the all shares index rose by 31.94 points or 0.79% to end at 4,042.03.

“Local market rebounded as government retains its GCQ (general community quarantine) stance for NCR Plus starting Aug. 1 with heightened restrictions, instead of the much-feared circuit breaker lockdown,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.

“The local market rose but gains were kept in check on [the] possibility of stricter restrictions. Several business groups, as well as Metro Manila mayors, pushed for stricter lockdown measures for two weeks to prevent the spread of the Delta variant,” AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad said in a Viber message.

Metro Manila and its nearby provinces of Bulacan, Cavite, Laguna, and Rizal will remain under GCQ until Aug. 15, Malacañang announced on Wednesday, even as coronavirus cases continued to rise.

The Health department on Thursday logged 97 new Delta variant cases, bringing the country’s tally for the variant to 216 infections.

“Prices did not move higher because of a surge in demand from optimistic investors, but rather due to the reduced selling pressure from panicking shareholders which have been driving the market lower over the last week,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said via e-mail.

“Trading volumes have increased slightly, although a lot of investors will still choose to be on the sidelines because of the uncertainty,” Mr. Mangun added.

Value turnover inched down to P4.82 billion with 925.21 million shares switching hands on Thursday from the P4.49 billion with 1.08 billion shares traded on Wednesday.

All sectoral indices posted gains on Thursday. Mining and oil climbed 251.36 points or 2.62% to 9,843.07; industrials went up by 149.29 points or 1.65% to 9,181.21; financials increased by 11.75 points or 0.84% to 1,403.02; property rose by 13.61 points or 0.44% to finish at 3,088.40; holding firms gained 6.75 points or 0.1% to 6,479.81; and services inched up by 0.64 points or 0.04% to 1,553.11.

Advancers beat decliners, 109 against 70, while 54 names closed unchanged.

Net foreign selling slowed to P465.76 million on Thursday from the P772.37 million recorded the previous day.

“We might see another session of sideways trading as ghost month nears, and as investors monitor the country’s Delta variant count, and if the uptrend in positivity rate will be sustained,” AB Capital Securities’ Mr. Soledad said. — Keren Concepcion G. Valmonte

Haul from Shell excise tax seen at P41B after Supreme Court ruling

July 29, 2021 | 8:16 pm

THE GOVERNMENT is set to collect P41 billion in excise taxes from Pilipinas Shell Petroleum Corp. (PSPC), the Palace said Thursday, after the Supreme Court (SC) lifted a temporary restraining order (TRO) which had barred tax collectors from imposing charges on Shell shipments of a petroleum additive.

The excise tax collections will be tapped to boost the government’s pandemic response, Palace Spokesman Herminio L. Roque, Jr. said at a televised news briefing Thursday.

The prospective collections represent duties and fines that have accumulated after the Supreme Court barred the government from imposing taxes on the company’s shipments of alkylate, Mr. Roque said.

“Nakabuti rin po siguro iyong pag-aapela nila ‘no dahil kung hindi po ako nagkakamali, P3 o 4 billion ang principal nito pero lumobo na po sa P41 billion kung isasama po ang mga penalties at interests (It’s a positive thing that Shell appealed because the original contested amount was only P3-4 billion, which has swelled to P41 billion with penalties and interest)” he said.

The SC recently lifted the TRO, which government lawyers said “caused irreparable injury to the government.”

In her dissenting and concurring opinion, Associate Justice Amy Lazaro-Javier said PSPC had been importing alkylate for almost seven years without paying excise taxes. The company allegedly misdeclared the petroleum additive as a blending component to avoid excise duties.

The magistrate said these taxes could have augmented funding for healthcare services and “could have very well extended the lives of Filipinos afflicted by the virus.”

“Countless families from local government units could have also received additional relief or ayuda during the quarantine,” she said. “…the people therefore were deprived, and are continuously being deprived of these benefits as the imposition and collection of taxes are suspended or otherwise restrained.”

Mr. Roque has said the decision of the National Government on the recommendation of Metro Manila mayors to put Metro Manila under a hard lockdown will depend on the availability of funds to provide financial aid for residents who will be affected. — Kyle Aristophere T. Atienza

Household spending seen rising 4% this year

July 29, 2021 | 8:16 pm

CONSUMPTION is likely to recover with a 4% increase in household spending this year, although the consumer and retail sectors are only expected to return to pre-pandemic levels by 2022, Fitch Solutions Country Risk & Industry Research said.

“This better outlook comes from expectations that there will be more jobs and better incomes, fewer quarantine restrictions, and more businesses reopening,” it said in a note Thursday.

Total household spending is expected to hit P10.6 trillion this year, which is still lower than the P11.1 trillion logged in 2019 prior to the pandemic, it added. By 2022, household spending is projected to grow by 5.1% to P11.2 trillion.

Fitch Solutions warned that the consumer spending outlook remains clouded by the delayed vaccine rollout as well as the emergence of new coronavirus variants.

Consumption accounts for about 70% of the economy. It fell by 8.3% last year and continued to shrink by 7.3% in the first quarter.

Gross domestic product contracted by a record 9.6% in 2020 and continued to fall 4.2% in the three months to March. This year, the government is projecting 6-7% growth.

Consumer confidence remains weak although it has improved, Fitch Solutions said. This is affecting household consumption behavior.

“Our Country Risk team expects household savings rates to remain elevated given the pandemic uncertainty and loss of income over past quarters, while the domestic employment situation is unlikely to improve markedly in the near term,” it explained.

The consumption-driven economy is only expected to fully recover by 2022, “with more conventional growth patterns returning in 2023.”

“Economic growth will be underpinned by consumer spending, easing unemployment, and a continued recovery in the country’s tourism industry,” it added.

Fitch Solutions in May lowered its growth forecast for the Philippines this year to 5.3% from 5.8% previously. It blamed the infection surge, renewed lockdown restrictions earlier in the capital region, and low vaccination rates for the dimmer outlook. — Luz Wendy T. Noble

DoF rejects donor tax waiver on rewards for athletes

July 29, 2021 | 8:15 pm

THE DEPARTMENT of Finance (DoF) has rejected proposals from Congress to waive the donor tax on gifts made to successful athletes like Olympic gold medalist Hidilyn F. Diaz, and to grant permanent tax exemptions for athletes’ winnings.

When asked if he would entertain a proposal from legislators to grant such waivers and exemptions, Finance Secretary Carlos G. Dominguez III said “no.”

“All Philippine citizens and residents have an obligation to share in the cost of the provision of public goods to society,” Mr. Dominguez told reporters via Viber on Thursday.

The Bureau of Internal Revenue on Thursday said the P10-million cash incentive provided by the Philippine Sports Commission will not be counted in Ms. Diaz’s gross income, but donors who provided cash will need to pay the 6% donor’s tax.

Albay Rep. Jose Maria Clemente S. Salceda filed House Bill No. 9891 seeking to exempt from tax all rewards and donations received by national athletes.

Donations to weightlifter Ms. Diaz poured in after she won the country’s first Olympic gold medal at the Tokyo games.

Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act reduced the donor’s tax to a fixed rate of 6% from up to 15% previously. — Beatrice M. Laforga

Value of mineral resources down 4.7% from 2013

July 29, 2021 | 8:15 pm

THE VALUE of Class-A nickel, copper, chromite, and gold resources dropped 4.7% to P296.28 billion compared with 2013, according to the Philippine Statistics Authority (PSA).

The PSA said in a report Thursday that Class-A nickel resources fell 17.9% by value to P136.61 billion in 2020, compared to 2013 levels.

The value of Class-A copper resources fell 59.2% to P25.84 billion in 2020, also compared to the level recorded in 2013.

The value of Class-A chromite resources rose 69.9% to P1.11 billion, while the value of Class-A gold resources rose 39.4% to P132.72 billion.

“The total resource rent of the four mineral resources contributed 0.2% to the gross domestic product of the Philippines in 2020, amounting to P30.46 billion,” the PSA said.

“Class A resources are commercially-recoverable mineral resources which are confirmed to be economically viable by a defined development project or operation,” the PSA said.

On April 14, President Rodrigo R. Duterte signed Executive Order No. 130, which removed the ban on new mineral agreements.

The order is expected to raise P21 billion in revenue for the government with 100 mining projects in the pipeline as a result of the ban’s lifting. — Revin Mikhael D. Ochave

SB Corp. plans loan program for small food firms in FMCG supply chain

July 29, 2021 | 8:15 pm

SMALL BUSINESS Corp. (SB Corp.) said it plans to launch a financing program for food suppliers seeking partnerships with large fast-moving consumer goods (FMCG) companies in a bid to support food security and accessibility.

The Sustaining Trade and Access to Primary Food and Link Enterprises (STAPLES) loan product is aimed at micro-, small-, and medium-sized enterprises (MSMEs) in the food supply chain, the financing arm of the Department of Trade and Industry said in a statement Thursday.

SB Corp. said the program is geared for an August launch and should help such businesses retain or rehire employees.

“We invite large food manufacturers to work together with SB Corp. in implementing this new program and help foster the restart, strengthening, and growth of the MSMEs in the food supply chain,” SB Corp. President and Chief Executive Officer Ma. Luna E. Cacanando said.

Through the program, MSMEs participating the supply, production, distribution, and retailing chain of large FMCG food companies can replenish their working capital or fund other business needs, SB Corp. said.

The accredited FMCG partner will sign an agreement with SB Corp. to market the program to their distribution channels and share information to MSMEs in their supply chain.

FMCG accredited partners must be large FMCG food companies with a nationwide network of at least 20 distributors and 100,000 sari-sari stores, along with P5 billion in annual sales.

“We envision our MSMEs to be free from the burden of scurrying for affordable, easy-to-access loans for the sustenance of their livelihoods. The STAPLES program will allow them to access much-needed funds and keep the retail food businesses running through the help of our accredited FMCG partners,” Ms. Cacanando said.

SB Corp., which operates the loan program to help small businesses recover from the effects of the coronavirus disease 2019 (COVID-19) pandemic, has so far approved around 32,600 loan applications worth P4.98 billion under the program. — Jenina P. Ibañez

Tourism industry’s water, power use, carbon emissions plunge in 2020

July 29, 2021 | 8:14 pm

THE TOURISM industry’s water consumption, energy usage and carbon emissions declined sharply to record lows in 2020 due to the industry slowdown as a result of the pandemic, the Philippine Statistics Authority reported on Thursday.

Preliminary results from the agency’s inaugural Measuring the Sustainability of Tourism report showed the tourism industry’s total water consumption fell 84.6% to 110.62 million cubic meters last year.

This represented a 2.5% share of total Philippine water consumption last year, the lowest reading since 2012.

The industry’s consumption of petroleum and other fuel products and electricity last year fell 80.9% to 3,533.24 kilotons of oil equivalent, equivalent to a record-low 4.6% share of national consumption.

The industry’s carbon dioxide (CO2) emissions from petroleum and electricity consumption were measured at 4,476.62 Gigagrams of CO2 last year, 79.1% less than in 2019.

As a share of the country’s total CO2 emissions from petroleum and electricity use, the tourism industry accounted for 7.7%.

John Paolo R. Rivera, associate director of the Dr. Andrew L. Tan Center for Tourism at the Asian Institute of Management, said these declines reflect the minimal activity of the tourism sector due to the lockdowns ordered to contain the COVID-19 pandemic.

“Tourism contribution will remain minimal because of the persistent restrictions,” he said in an e-mail.

Gross domestic product (GDP) fell by record 9.6% in 2020, reversing the 6.1% growth posted in 2019.

The industry’s direct gross value added accounted for a two-decade low of 5.4% of GDP last year.

Meanwhile, the industry faces more headwinds amid calls for another two-week hard lockdown to prevent the spread of the more contagious Delta variant of the coronavirus.

As of July 29, the Department of Health reported 97 new cases of the Delta variant, bringing the total to 216.

“Tourism will definitely bounce back as soon as the pandemic is contained but this is conditioned on how soon can we achieve herd immunity and confidence in travel has been restored because safety protocols have been established and instituted,” Mr. Rivera said.

“We can expect V-shaped growth in travel if these assumptions hold.” — Ana Olivia A. Tirona

App developers urged to protect IP from outset

July 29, 2021 | 8:13 pm

A DIGITAL commerce association is pushing for mobile application developers in the Philippines to seek intellectual property protections for their work to avoid costly legal disputes.

Maria Jesusa Viray, founding member of the board of the Philippine Association for Digital Commerce and Decentralized Industries, said 75% of developers in the US have registered their intellectual property (IP).

“Most of those who develop (in the Philippines) are not even registered. So they don’t register their logos, their names, their artworks and all. They think that when they’re bigger that’s when they have to do all of these things. So in the scheme of things, it is the last thing that they do,” she said.

She was speaking at a July 26 event organized by the lntellectual Property Office of the Philippines (IPOPHL) and the World Intellectual Property Organization (WIPO), IPOPHL said in a statement Thursday.

Ms. Viray, who is also the chief executive officer of Medicare Plus, Inc., said she is hoping for stronger intellectual property rights education for app developers. Efforts should be focused, she added, on understanding which work can be protected to avoid legal pitfalls.

“With more education, people, our developers, our entrepreneurs, who are planning to get into the industry, will know that (IP protection) is part of their checklist when they start,” she said.

App Association Senior Global Policy Counsel Brian Scarpelli said rights holders must be proactive to avoid the risks of an IP infringement proceeding.

“I urge all of you to be proactive in protecting your own copyrights and getting informed,” he said. The event it part of a WIPO project to support the software sector and mobile application sector in the Philippines, Kenya, and Trinidad and Tobago. — Jenina P. Ibañez