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Pfizer vaccine trial success signals breakthrough in pandemic battle

Pfizer Inc.’s experimental COVID-19 vaccine is more than 90% effective based on initial trial results, the drugmaker said on Monday, a major victory in the war against a virus that has killed over a million people and battered the world’s economy.

Scientists, public health officials, and investors welcomed the first successful interim data from a large-scale clinical test as a watershed moment that could help turn the tide of the pandemic if the full trial results pan out. However, mass roll-outs, which needs regulatory approval, will not happen this year and several vaccines are seen as necessary to meet massive global needs.

Pfizer and German partner BioNTech SE said they had found no serious safety concerns yet and expected to seek US emergency use authorization this month, raising the chance of a regulatory decision as soon as December.

If granted, the companies estimate they can roll out up to 50 million doses this year, enough to protect 25 million people, and then produce up to 1.3 billion doses in 2021.

“Today is a great day for science and humanity,” said Pfizer Chief Executive Albert Bourla, noting the data milestone comes with “infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen.”

Experts said they wanted to see the full trial data, but the preliminary results looked encouraging.

“This news made me smile from ear to ear. It is a relief to see such positive results on this vaccine and bodes well for COVID-19 vaccines in general,” said Peter Horby, professor of emerging infectious diseases at the University of Oxford.

There are still many questions, such as how effective the vaccine is by ethnicity or age and how long immunity may last.

“But the bottom line is, as a vaccine it’s more than 90% effective, which is extraordinary,” top US infectious diseases expert Dr. Anthony Fauci told CNN.

Pfizer expects to seek US emergency use authorization for people aged 16 to 85. To do so, it will need two months of follow-up safety data to assure no side effects crop up. That is expected to be available in the third week of November.

US Health and Human Services Secretary Alex Azar said it would take several weeks for US regulators to receive and process the data before a potential approval.

MARKETS SURGE

The prospect of a vaccine electrified world markets with the S&P 500 and Dow hitting record highs. Stock of theme park and film company Walt Disney rose 12% and movie chain operator AMC Entertainment Holdings was up 51%.

Shares in companies that have thrived during lockdowns, such as Netflix Inc. and conferencing platform Zoom Video tumbled. Gun stocks sold off on higher hopes for a return to normal and a lack of civil unrest.

Pfizer shares jumped more than 8% to their highest since July last year, while BioNTech’s stock hit a record high.

Mizuho Securities analyst Vamil Divan forecast the vaccine may generate sales in excess of $8.5 billion for Pfizer in 2020–2021 alone.

Shares of other vaccine developers in the final stage of testing also rose with Johnson & Johnson up nearly 4% and Moderna Inc., whose vaccine uses a similar technology as the Pfizer shot, up more than 8%. Britain’s AstraZeneca, however, fell 2%.

Moderna is expected to report results from its large-scale trial later this month. “It’s likely that we’re going to have more than one vaccine that’s effective,” Dr. Fauci said.

William Schaffner, infectious diseases expert at Vanderbilt University School of Medicine in Nashville, Tennessee, called the Pfizer results better than most anticipated. “The study isn’t completed yet, but nonetheless the data look very solid.”

US President Donald Trump welcomed the test results, and the market boost: “STOCK MARKET UP BIG, VACCINE COMING SOON. REPORT 90% EFFECTIVE. SUCH GREAT NEWS!” he tweeted.

President-elect Joe Biden said the news was excellent but did not change the fact that face masks, social distancing and other health measures would be needed well into next year.

The World Health Organization called the results very positive but warned there was a funding gap of $4.5 billion that could slow access to tests, medicines, and vaccines in low- and middle-income countries.

There are other challenges as well that could affect less affluent countries. The Pfizer vaccine must be shipped and stored at an extremely cold temperature, which requires necessary infrastructure. Even many US hospitals lack these super cold storage units, which may impact when and where the vaccine becomes available in many U.S. rural areas as well.

That highlights the need for more traditional vaccines in development, such as J&J’s candidate.

‘NEAR ECSTATIC’

Still, there was cause for jubilation.

“I’m near ecstatic,” Bill Gruber, one of Pfizer’s top vaccine scientists, said in an interview. “This is a great day for public health and for the potential to get us all out of the circumstances we’re now in.”

Between 55% and 65% of the population will need to be vaccinated to break the dynamic of the spread of COVID-19, said Germany’s health minister Jens Spahn, adding that he did not expect a shot to be available before the first quarter of 2021.

The European Union said on Monday it would soon sign a contract for up to 300 million doses of the Pfizer and BioNTech COVID-19 vaccine.

The companies have a $1.95 billion contract with the U.S. government to deliver 100 million vaccine doses beginning this year. They did not receive research funding from the Trump administration’s Operation Warp Speed vaccine program.

The drugmakers have also reached supply agreements with the United Kingdom, Canada, and Japan.

The interim analysis, conducted after 94 participants in the trial developed COVID-19, examined how many had received the vaccine versus a placebo.

Pfizer did not provide that detail, but over 90% effective implies that no more than 8 of the 94 had received the vaccine, administered in two shots about three weeks apart.

The efficacy rate, which could drop once full results are available, is well above the 50% effectiveness required by the US Food and Drug Administration for a coronavirus vaccine.

Shortly after Pfizer’s announcement, Russia said its Sputnik V vaccine was also more than 90% effective, based on data collated from inoculations of the public.

MORE DATA NEEDED

To confirm the efficacy rate, Pfizer said it would continue its trial until there were 164 COVID-19 cases among volunteers. Bourla told CNBC on Monday that could be before the end of November.

Lawrence Young, a professor of molecular oncology at Britain’s University of Warwick, noted that the data may show the vaccine keeps people from getting sick but not necessarily from becoming infected. “And the subtlety there … is if you’re infected then you can still transmit the virus.”

Dozens of drugmakers and research groups around the globe have been racing to develop vaccines against COVID-19, which on Sunday exceeded 50 million cases since the new coronavirus first emerged late last year in China.

The Pfizer and BioNTech vaccine uses messenger RNA (mRNA) technology, which relies on synthetic genes that can be generated and manufactured in weeks, and produced at scale more rapidly than conventional vaccines. The technology is designed to trigger an immune response without using pathogens, such as actual virus particles.

The Trump administration has said it will have enough vaccine doses for all of the 330 million U.S. residents who want it by the middle of 2021. — Michael Erman and Julie Steenhuysen/Reuters

Sustaining the environment through reducing CO2 emissions

Industries’ contributions towards zero-carbon environment tracked in 2nd leg of BusinessWorld Insights Sustaining Sustainability Series

By Adrian Paul B. Conoza, Special Features Writer

In an accelerated push for sustainability among businesses, reducing the emission of carbon dioxide, a key greenhouse gas driving climate change, is inevitable. This is much agreed by the panel in the second leg of BusinessWorld Insights‘ Sustaining Sustainability Series, with the theme “Reducing Carbon Emissions for a Sustainable Future.”

The online forum, held on Oct. 28, gathered thoughts from key executives on what the private sector has contributed so far regarding carbon emission reductions and what else remains to be achieved.

Pushing for an alternative

Representing an industry concerned about carbon emissions, Electric Vehicle Association of the Philippines (EVAP) President Edmund Araga, stressed that their organization has been very vocal in adopting electric vehicles (EVs) as an alternative mode of transportation.

In a video presentation the president shared, reasons for and benefits of embracing EVs were pointed out. First among these is energy security, since adopting EVs is found to lessen the dependence on oil and minerals. It was also pointed out that EVs produce 20-30% lower fuel-cycle greenhouse gas emissions.

EVs are also beneficial for the health of Filipinos. In fact, replacing all jeepneys in Metro Manila with e-jeepneys is found to provide health benefits of P18.8 billion annually.

Moreover, EVs can open up possibilities for the local industry. One of these is the country’s potential to become one of the major players in manufacturing batteries for EVs since cobalt and nickel reserves in the country are abundant.

Mr. Araga added that while the present pandemic stalled activity in the EV industry, it has nonetheless highlighted EV’s perks when it was used to transport frontliners. “It really shows that there is a good effect in using EVs, that it is better to use an environment-friendly vehicle,” he said.

As the industry moves forward, the president looks forward to the passage of the Electric Vehicles and Charging Stations Act. “The collaboration and coordination between private and public sector is essential for us to push forward and sustain [the adoption of] environment-friendly vehicle,” Mr. Araga added.

Taking initiative

The rest of the speakers shared their company’s practices in reducing carbon footprint on top of sharing their perspective on carbon emissions.

As he shared Manila Electric Co.’s (Meralco) sustainability story, Raymond Ravelo, the company’s chief sustainability officer (CSO), highlighted that Meralco and its subsidiaries have begun to make great strides in reducing its own carbon footprint through its initiatives on direct emissions reduction and resource efficiency.

The company’s practices in direct emissions reduction, he continued, are driven by energy transition and vehicle electrification.

Specifically, its efforts in energy transition are highlighted by investments in renewable energy and own-use solar. In terms of vehicle electrification, the company has its own green mobility program which includes deploying EV vans and motorbike for its employees. Moreover, Meralco has been supporting EVs for public transportation with the operation of Makati-Mandaluyong e-jeeps through ESakay.

Meralco’s move towards resource efficiency, on the other hand, are marked by launching its own energy-efficiency dashboard, equipping industrial customers with MServ’s solutions, and educating consumers through its Bright Ideas campaign and Orange Tag labels on appliances.

Yet, with all these practices Mr. Ravelo says the company has just started. “While we have made significant progress, we really believe we still need to do a lot in order to not only minimize our carbon footprint, but also to further our sustainability agenda.”

The CSO also noted the value in collaborating between players and sectors. “We’re all on the same side,” he noted. “Ultimately, this is a shared task. This is a shared journey.”

Urgent action

Agnes de Jesus, CSO of First Philippine Holdings Corp. (FPH), meanwhile, emphasized that climate change is a creeping event, and it keeps calling stakeholders to act immediately.

“We’ve seen [climate change] reach our shores in 2009, and… we saw it accelerate in the past 10 years,” Ms. de Jesus said, adding that climate change caused disruptions not just in the environment, but also in the economy and in the health of citizens.

Seeing the emerging threat of climate change, FPH has been proactive in addressing it, she shared. In 2009, it joined the Philippine Climate Imperative with business leaders, the government, and NGOs. Fast forward to 2016, the firm have made a bold stance of not venturing to coal; and in 2018, it joined the pledge of maintaining global temperature below 1.5C.

Another significant move for FPH is the shift of its sustainability strategy from shared value to system value. “We saw that… we are dependent on people to buy our services, and people depend on nature, and people and business are embedded on environment — which means that both people and business must live within the limits or the capacity of the environment,” Ms. de Jesus explained.

The firm also realized that it has to go beyond the sustainability path, so it decided to change its mission, which now states that FPH is forging collaborative pathways to a decarbonized and a regenerative future.

As a result of these efforts, the CSO contnued, FPH’s clean power has reduced the country’s grid intensity by 15%. In addition, the forests the firm protects in its georeserves are absorbing 3.9 million tons of CO2 in a year.

Furthermore, the CSO noted that while addressing climate change entails costs, delaying action will even cost more.  “[T]here are now studies that said that if you act now, there’s really a pay-off. For every $1 that you invest to prevent or mitigate carbon emission, it’s a $3 to $7 payoff for avoided costs,” she explained.

The existential threat of climate should be recognized, she added, and this should spur organization and individuals to do their part. “There is no time, and we need to start now. But when we act, we should remember there is no one-size-fits-all solution…You don’t need to make the solution perfect, but we need to act now.”

Efficient management

Gerhard Tan, director of technology strategy at Globe Telecom, Inc., noted that the key challenge that should be addressed through sustainability efforts is urban influx, which drives the increased use of resources to sustain work functions and consequently contributes to increased carbon emission and environmental degradation. This can be addressed through what is called efficient resource management, consisting of collection of data through Internet-of-Things, automation of events, and analysis of historical data.

For their part at Globe, Mr. Tan said that they recognize their role in supporting a low-carbon future. “We have the responsibility to demonstrate a high standard of environmental management and stewardship in order to reduce our [and our stakeholders’] impact,” he added.

As Mr. Tan presented, Globe’s efficient management towards mitigating carbon emissions is anchored on a remote management. Furthermore, Globe is leveraging on efficient power solutions, which include fuel cell systems, which are great alternatives to diesel gensets; lithium-ion batteries, replacing lead-acid batteries; super capacitors, which are viable alternatives to chemical batteries; and solar on-grid solutions for reducing operational expenditures.

The executive also highlighted the importance of balancing the opportunities and challenges in addressing carbon emissions. “From [Globe’s] investment, we can see now the significant change in our company. We monitor our carbon footprint reduction and at the same time monitor our sites’ power usage effectiveness,” he said.

Mr. Tan also noted that while companies are taking this responsibility, it still remains a personal one. “We play an important role in making a difference by reducing our own personal greenhouse gas emissions,” he said.

BusinessWorld Insights Sustainability Series is made possible by Globe, Energy Development Corporation, First Gen Corporation, Meralco, media partner The Philippine STAR and e-learning
platform partner Olern; with the support of the Bank Marketing Association of the Philippines, British Chamber of Commerce Philippines, Financial Executives Institute of the Philippines, Management Association of the Philippines, and Philippine Chamber of Commerce and Industry.

Fruitas Holdings, Inc. announces schedule of annual stockholders’ meeting via remote communication

Agricultural output growth slows

Palay and corn production growth helped drive agricultural output in the third quarter. — COURTESY OF DEPARTMENT OF AGRICULTURE

By Revin Mikhael D. Ochave, Reporter

GROWTH in agricultural production slowed to 0.7% in the third quarter, as higher crops and fisheries production were offset by declines in livestock and poultry output, the Philippine Statistics Authority (PSA) said on Monday.

In a report, the PSA said the value of production of the farm sector — which contributes around a tenth to the country’s gross domestic product (GDP) and a fourth of jobs — grew by 0.7% in the July to September period but this was slower than the 2.3% rise a year ago.

However, it was an improvement from the 0.5% growth seen in the second quarter.

For the first nine months of the year, the country’s agriculture output slipped by 0.2%.

“At current prices, the value of agricultural production amounted to P404.6 billion, higher by 4.1% from the previous year’s level,” the PSA said.

Crop production climbed by 4.8% in the third quarter, accounting for 52.7%, of the country’s total agricultural output. However, this was slightly slower than the 5% growth in the previous quarter.

Palay, or unmilled rice, production rose 15.2% while corn output increased 3.5% during the July to September period.

Former Agriculture Undersecretary and current  Monetary Board member V. Bruce J. Tolentino said palay production growth reflects the effect of government’s assistance for rice farmers.

“This is the result of the farmer assistance following the passage of Republic Act No. 11203 or the Rice Tariffication Law, especially the implementation of the RCEF (Rice Competitiveness Enhancement Fund), components on certified inbred seeds, combined with the ongoing national rice production program which assists farmers with hybrid seeds and fertilizer,” Mr. Tolentino said in an e-mail.

Agriculture Secretary William D. Dar in a statement said the increase in palay and corn production showed the government is on the right track in its initiatives with the two subsectors. He said the results are encouraging, especially considering the ongoing pandemic and bad weather during the period.

For Philippine Maize Federation, Inc. (PhilMaize) President Roger V. Navarro, corn harvests are usually higher during the wet season compared with the dry season.

“Corn prices and supply will improve if the government can address problems concerning post-harvest and storage infrastructure and institute price support mechanisms for our farmers,” Mr. Navarro said in a mobile phone message.

Fisheries output also grew by 1.9%, contributing 15.8% of total farm production. This is also better than the sector’s 1% growth in the second quarter.

Bigeye tuna, bali sardinella, blue crab, yellowfin tuna, and roundscad (galunggong) posted higher output during the period.

Rolando T. Dy, executive director of Center for Food and Agri-Business of University of Asia and the Pacific (UA&P), noted the production of commercial fisheries such as tuna and sardines provided a boost for the subsector.

“Fisheries also provides consumers with a cheaper source of protein such as dried fish and canned products like tuna and sardines,” Mr. Dy said in a mobile phone message.

Asis G. Perez, Tugon Kabuhayan convenor and former national director of the Bureau of Fisheries and Aquatic Resources (BFAR), said the catch of galunggong was higher during the third quarter.

“However, we are expecting galunggong production to decline because of the current implementation of the closed fishing season that began this November,” Mr. Perez said.

LOWER PRODUCTION
Meanwhile, livestock production, which accounted for 17.5% of total agricultural output, slid by 7.6% in the third quarter. The pace of decline slowed from the 8.5% drop in the previous quarter.

Hog production dropped by 7.7%, while cattle and carabao output slipped by 10.7% and 6.3% respectively. However, dairy production rose 16% and goat output increased 0.4%.

In a statement, Samahang Industriya ng Agrikultura Chairman Rosendo O. So said the detection and the ongoing spread of African Swine Fever (ASF) has wiped out local pork production in Luzon.

Mr. So said the DA should improve its meat inspection facilities and address the increasing retail prices of pork.

“Supermarkets are now selling imported frozen pork at sky-high retail prices,” Mr. So said.

According to the DA’s latest price update across major Metro Manila markets, the price of pork shoulder, known in the market as kasim, ranges from P270 to P300 per kilogram while pork belly, or liempo, ranges from P300 to P350 per kilogram.

The current market prices are far from the DA’s suggested retail price (SRP) set for kasim at P260 and liempo at P280.

Poultry production, which contributed 14% of the entire farm output, also fell 3.8% during the third quarter. In the second quarter, the subsector recorded a 4.7% decline.

Chicken production went down by 7.2%. On the other hand, chicken egg production rose 6%, while the output of duck and duck eggs also increased 2.3% and 3.1% respectively.

“The performance of the hog and poultry sectors was expected due to the lingering effects of the ASF and low demand for poultry products,” Mr. Dar said.

UA&P’s Mr. Dy said the poultry and livestock subsectors were affected by the weaker demand from the hotels, restaurants, and institutions (HRI) segment.

“HRIs have shuttered and their purchasing power is down or they have shifted to cheaper alternatives,” Mr. Dy said.

In a mobile phone message, United Broilers Raisers Association (UBRA) Chairman Gregorio A. San Diego, Jr. said the figures of hog and broiler production would be much lower for the whole year due to the increase in imports.

“To increase local broiler production, the government should temporarily stop chicken importation before it’s too late,” Mr. San Diego said.

The government is now targeting 1.5% growth in agriculture production this year, lower than its original 2% target due to the pandemic.

Performance of Philippine Agriculture (Q3 2020)

Performance of Philippine Agriculture (Q3 2020)

GROWTH in agricultural production slowed to 0.7% in the third quarter, as higher crops and fisheries production were offset by declines in livestock and poultry output, the Philippine Statistics Authority (PSA) said on Monday. Read the full story.

Performance of Philippine Agriculture (Q3 2020)

Q2 slump sharper than initially estimated — PSA

The economy shrank by 16.9% in the second quarter, worse than the preliminary estimate of -16.5%. — PHILIPPINE STAR/MICHAEL VARCAS

By Marissa Mae M. Ramos, Researcher

THE ECONOMY contracted faster in the second quarter than previously estimated, the Philippine Statistics Authority (PSA) reported on Monday.

The PSA said its latest estimate showed Philippine gross domestic product (GDP), which indicates the value of final goods and services produced within a country during a specific period, slumped by 16.9% in the second quarter, faster than the initial 16.5% decline given in August.

The services sector posted a 17% drop in the April-June period, quicker than the initial estimate of -15.8%. Subsectors that posted faster declines based on revised data were real estate and ownership of dwellings (-29.7% from -20.1%); education (-15% from -12.2%); and wholesale and retail trade, and repair of motor vehicles and motorcycles (-13.9% from -13.1%).

Meanwhile, the contraction in the industry sector in the second quarter was revised downward to 21.8% from 22.9%. Slower declines were noted in construction (-30.4% from -33.5%); mining and quarrying (-22.8% from -24.5%); and manufacturing (-20.7% from -21.3%).

Agriculture, forestry, and fishing — the sole major economic sector that posted growth in the second quarter — saw a slight downward revision to a 1.55% expansion from 1.61%.

On the expenditure side, growth in government spending was lowered to 21.8% from the initial 22.1%.

Household consumption was revised to a -15.3% from -15.5% previously.

Exports and imports fell by 35.8% and 37.9%, slower than -37% and -40% previously.

On the other hand, the plunge in gross capital formation was adjusted higher to 53.7% from 53.5%.

The second-quarter 2020 revision comes ahead of today’s release of preliminary estimates for third-quarter GDP.

A BusinessWorld poll of 19 economists yielded a median GDP decline of 9.2% in the third quarter.

The government, through the interagency Development Budget Coordination Committee, expects the economy to shrink between 4.5% and 6.6%, or an average of 5.5% this year.

Lockdowns should be ‘last resort,’ says Chua

THE government’s move to ease lockdown restrictions and further reopen the economy will likely boost growth this quarter, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said.

In a speech before the 58th Philippine Economic Society Annual Meeting and Conference on Monday, Mr. Chua said strict lockdowns should be the “last resort” in the fight against the coronavirus disease 2019 (COVID-19).

To help the economy recover, he said the economic team had recommended to the Inter-Agency Task Force for the Management of Emerging Infectious Diseases shift its policy “from total risk avoidance to risk management.”

“We proposed, and this was accepted, to consider escalation of quarantine level only as a last resort. So if COVID-19 cases are rising, we will still maintain the current quarantine level and implement stricter protocols, or more localized quarantine instead of putting an entire region or province in quarantine,” Mr. Chua said.

Nearly all economic activity was halted during the strictest form of lockdown from mid-March to May, pushing the Philippines into its first recession in nearly 30 years. Official data released on Monday showed the economy shrank faster than expected in the second quarter to -16.9% from the previous estimate of -16.5%.

Mr. Chua said the economic team’s recommendations included increasing the capacity of mass transportation, allowing businesses to run at 100% capacity, boosting health systems, shortening curfew hours, and adopting localized quarantines if COVID-19 cases spike.

“Hopefully with the changes that you are seeing in the last quarter, these (looser restrictions) will have a better impact on our fourth-quarter GDP (gross domestic product) growth,” Mr. Chua said.

Former Socioeconomic Planning Secretary Ernesto M. Pernia, who stepped down from his post in April, said the government should spend more to pump-prime the economy.

“On fiscal stimulus, it should be a ‘demand stimulus’ because what’s needed is to get the spending going again and also to get this micro, small and medium enterprises functioning, just to keep them alive,” he said.

Mr. Pernia also said this is not the right time to implement a reduction in corporate income tax to 25% from 30% as companies may not use the tax savings to spend now but instead put them into “precautionary reserves.”

Nndiame Diop, World Bank’s country director to the Philippines, said they expect the economy to contract by 6.9% this year, which translates to P2.6 trillion worth of foregone revenue because of the pandemic.

“The coronavirus crisis has negatively impacted the lowest earning families and the small businesses. Those who make more were better able to cushion the blow and had more resources to restart as the economy opened back up,” he said.

For the country to return to its growth path, Mr. Diop said the government should focus on controlling the virus, maintaining coordinated macroeconomic policies, boosting infrastructure spending and eventually proceed with structural reforms.

Curbing the spread of the virus remains key in economic recovery as this boosts consumer and business confidence, he said. State spending on infrastructure projects would create much-needed jobs and stimulate economic activity, and address infrastructure gaps. 

Meanwhile, the government and Bangko Sentral ng Pilipinas (BSP) should also coordinate in deploying the needed fiscal boost.

“Fiscal agility should be maintained to continue protecting the poor and vulnerable because the recovery in incomes and jobs is likely to be gradual even if GDP rebounds. Support to poor households is particularly critical to avoid disinvestment in human capital,” Mr. Diop said.

“No country can afford a simultaneous unwinding of both fiscal and monetary support, thus coordination of fiscal and monetary policies will remain critical in the next few years,” he added. — Beatrice M. Laforga

Meralco rates drop in Nov.

Power rates will go down this month, Manila Electric Co. said on Monday. — PHILIPPINE STAR/MICHAEL VARCAS

TYPICAL HOUSEHOLDS can expect their monthly electricity bill to go down by P8 in November, after Manila Electric Co. (Meralco) announced a cut in overall rates due to a reduction in power generation charges.

In a statement, the distribution utility said power rates inched down by P0.0395 per kilowatt-hour (kWh) to P8.5105 kWh, the third-lowest rate since September 2017.

“This month’s overall rate is also a net rate reduction of P1.35 per kWh since the start of the year,” Meralco said in a statement.

The decrease means households consuming 200 kWh, which account for the bulk of residential customers, will enjoy an P8 cut in their power bills. Households consuming 300 kWh, 400 kWh and 500 kWh will see a reduction of P12, P16, and P20 respectively in their bills.

The generation charge fell by P0.0215 per kWh to P4.2018 per kWh this November. Meralco attributed the drop in generation charge to the reduced rates from the Wholesale Electricity Spot Market (WESM), and improved supply.

“The Luzon grid’s power supply situation improved in October, as demand decreased due to weather disturbances and there was less generation capacity on outage,” Meralco said.

The cost of power from Independent Power Producers (IPPs) slipped by P0.0842 per kWh as Malampaya natural gas prices fell due to its quarterly repricing and the slight appreciation of the peso against the US dollar.

Charges from Power Supply Agreements (PSA) increased by P0.2118 per kWh, after the forced outage of the 414-megawatt (MW) San Gabriel combined cycle power plant in September.

Meralco said WESM, IPPs and PSA accounted for 12%, 35%,and 53% of its energy requirements, respectively.

Meanwhile, transmission charges, taxes and other charges went down by P0.0180 per kWh for residential customers.

The collection of the Universal Charge-Environmental Charge, which stood at P0.0025 per kWh, was still suspended, as previously directed by the Energy Regulatory Commission (ERC).

Meralco’s distribution, supply and metering charges remained unchanged for 64 months, following registered reductions in July 2015.

Meralco said it does not earn from pass-through charges, such as the generation and transmission charges, while taxes and public policy charges are remitted to the government.

In compliance with the ERC directive, Meralco said it will not disconnect any accounts that are unable to pay their bills until Dec. 31, 2020. This applies to consumers with a monthly consumption of 200 kWh and below.

“For all other customers, consuming 201 kWh and up, Meralco will be complying with ERC’s advisory stating that a minimum of 30-day grace period will be given on all payments falling due within the period of Enhanced Community Quarantine (ECQ) and Modified Enhanced Community Quarantine (MECQ), without incurring interests, penalties, and other charges,” it said.

Metro Manila is currently under a general community quarantine until Nov. 30.

Unpaid balances that remain after the 30-day grace period should be made payable in three equal monthly installments without incurring interests, penalties and other charges, Meralco added.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang

Telcos’ capex to rise by up to 25% in 2021 — Fitch

By Arjay L. Balinbin, Senior Reporter

THE capital expenditure (capex) of the “incumbent” telecommunications companies is expected to increase by up to 25% next year, driven by regulatory pressure and the planned commercial launch of telco startup DITO Telecommunity Corp. in March, Fitch Ratings said.

In its latest non-rating action commentary, Fitch Ratings said: “We forecast the incumbents’ capex will increase by 20%-25% in 2021.The Philippines has among the highest capex/revenue ratios in Asia-Pacific, at around 40%.”

The credit rating agency noted both PLDT Inc. and Globe Telecom, Inc. will be “accelerating their network rollout in mobile and fiber broadband in the coming quarters,” ahead of the commercial launch of DITO Telecommunity, which targets to cover “37% of the national population over the next six months.”

Ernest L. Cu, president and chief executive officer of Globe, said at a briefing last week that the Ayala-led telco would build fiber-to-the-homes “more aggressively” in 2021 to address the increasing demand.

Also last week, PLDT said in a statement that it was aiming to extend its current 395,000-kilometer footprint “by another 81,000 kilometers.”

Smart Communications, Inc. also intends to add “about 2,000 cell sites next year,” PLDT added.

Fitch Ratings also expects the telco sector’s revenues to grow “by mid-to-high single digits” next year, “driven by fast-expanding home broadband services and localized competition in mobile.”

PLDT saw its attributable net income for the third quarter grow 95% to P7.41 billion. Its revenues increased 10% to P46.49 billion, driven by the spike in customer demand for digital services amid a pandemic crisis.

Meanwhile, Globe saw a 22% decline in its attributable net income for the third quarter to P4.39 billion.

Globe’s service revenues declined 3% to P36.68 billion, driven by the sustained drop in traditional voice and mobile SMS revenues.

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.

D&L Industries sees sustained recovery until next year

By Denise A. Valdez, Senior Reporter

D&L Industries, Inc. is hopeful to see better results in 2021 as businesses learn to adapt better to government measures against the coronavirus pandemic.

The listed manufacturer of food ingredients, specialty plastics and chemicals reported on Monday a net income of P573 million in the third quarter, lower by 7% from the same period a year ago, but double the P287 million it recorded the previous quarter.

In a virtual media briefing, D&L President and CEO Alvin D. Lao said the company has been steadily improving after the challenging first semester, and is optimistic that the uptrend will be sustained until the end of the year.

“We’re optimistic about [the] fourth quarter. We think the growth we saw in the third quarter will most likely continue as more people [get used to the pandemic],” Mr. Lao said.

“In 2021, kasi wala na yung (because we’re likely to eliminate the) very bad second quarter, performance should be better than 2020. But it’s not clear yet if we can get to the same level as 2019,” he added.

The company posted P5.75-billion sales during the three-month period, down 4% from a year ago. Exports contributed P1.8 billion or 32% to total sales, up 11 percentage points from 21% in third quarter 2019.

By business segment, net income from the chemicals business (down 2% to P226 million), specialty plastics (down 0.5% to P135 million) and consumer products (up 72% to P89 million) have all reached close to or beyond their levels in the same period in 2019. However, the food segment continued to struggle, posting a net income 38% lower at P155 million.

Mr. Lao attributed this to the altered consumer habits, as many people still would not or could not go out because of the ongoing pandemic. He noted many restaurants are still either closed or on limited capacity.

For the nine months beginning January, D&L’s net income is down 32% to P1.37 billion, as sales fell 4% to P15.92 billion.

Net income in three business segments declined for the nine-month period: food ingredients by 52%, chemicals by 24%, and specialty plastics by 27%.

The consumer products segment, which accounts for revenues from the sale of alcohol and disinfectant products, was the only one to see growth, with its net income up 38% year-on-year.

To support growth, D&L continues to invest in the expansion of its 26-hectare plant in Batangas, which is scheduled to finish construction by end-2021. The company has so far spent P1.72 billion for capital expenditures this year, already exceeding its end-2019 spending of P1.53 billion.

D&L previously said it was targeting above P1 billion earnings in the second half of 2020. Its earnings in the first half reached P802 million, down 43% from last year.

Shares in D&L at the stock exchange closed at P6.63 each on Monday, up nine centavos or 1.38% from the last session.

Mass housing firm 8990 posts 31% profit climb on record revenues

EARNINGS of mass housing developer 8990 Holdings, Inc. jumped 31% to P1.82 billion in the third quarter on the back of record-high quarterly revenues amid the coronavirus pandemic.

In a regulatory filing on Monday, 8990 said it generated P4.83 billion revenues in the July-to-September period, up 38% from the same period a year ago.

“After we felt the impact of four consecutive months of lockdown in the first half of this year, I am happy to report that we registered a very strong third quarter, our highest quarterly performance in the 17 year history of 8990,” 8990 Acting President and CEO Alexander Ace Sotto said in a statement.

“Our performance for this period shows the resilience of the affordable housing sector and affirms the need to fill the ever-growing housing backlog in the Philippines,” he added.

Real estate sales added P4.83 billion to the company’s revenues, while rental income contributed P2.85 million. These offset the P28,393 losses that came from its hotel operations.

Year-to-date, 8990’s attributable net income stood at P3.31 billion, down 21% from the same period last year. Revenues likewise slid 7% to P9.74 billion.

The company said the declines are due to its weak second quarter, which can be traced to construction challenges in the first half of 2020. At the time, the coronavirus-related lockdown in the country was stricter.

At the end of the third quarter, 8990 was able to deliver 3,083 units of affordable housing, bringing its nine-month sales to a total of 6,794 units. It noted the projects delivered in the third quarter almost match six months’ worth of homes sold.

Most of these projects, or 53% of the total, are located in Luzon. Some 27% are in Visayas and 20% in Mindanao. About 53% are horizontal projects, while 47% are vertical projects.

“This global pandemic has added pressure to businesses in all industries including ours. Since March of this year, we have been working on adjusting to this new reality by closely monitoring and managing our liquidity, strengthening our organization, and finding better ways to reach out to our existing and potential buyers,” Mr. Sotto said.

Shares in 8990 at the stock exchange picked up 24 centavos or 3.12% to close at P7.94 each on Monday. — Denise A. Valdez

DLI’s tower set for partial opening

DAVAO CITY — Damosa Land, Inc.’s (DLI) new office building, the 17-floor Diamond Tower, is ready for partial opening with more than 92% of the construction and finishing work done.

“We will complete the construction by next month but we are able to accommodate locators as early as now,” DLI First Vice-President Ricardo F. Lagdameo said in an interview via Messenger.

He said while they will be completing the project at what is probably the “toughest time for the industry,” it will also mean the company will be ready for investors when they consider or resume plans for setting up in Davao.

Part of the building’s 1,800-square meter office space is allocated to DLI, its mother firm Anflo Management and Investment Corp. (Anflocor) of the Floirendo family, and global office space provider Regus, which already has a partnership with the company through another building.

“We have roughly 4,500 that’s already allocated to Anflocor, Damosa Land, Regus, and another tenant,” Mr. Lagdameo said.

The Diamond Tower is located within the Damosa IT Park, an accredited special economic zone, which already houses two other buildings occupied mainly by business process outsourcing (BPO) firms.

The new building is targeted for more BPOs, financial service companies, and “traditional” offices.

He added that DLI will be constructing a carpark building within the Damosa complex in anticipation of the increased vehicular and people traffic. — Maya M. Padillo

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