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Spotify grows 27% on back of discounts in Q3

THE MUSIC streaming service Spotify grew its subscriber base by 27% in the third quarter (Q3) of 2020, bringing its total to 144 million on the back of offering discounted plans which, conversely, brought them a loss of €101 million or $121 million in the quarter according to Spanish analytics firm Comprar Acciones.

In the Philippines, Spotify has been offering some free tier users premium access for three months at P129, the price of a one-month subscription. Other premium tiers such as daily (P15) or family subscription or six premium accounts (P194) are also available.

The promotions did work as the service beat analysts’ estimates of 142 million paid subscribers according to Refinitiv data. It also brought monthly active users to 320 million or up 29% in the third quarter compared to numbers recorded last year.

Spotify expects to have between 150 to 154 million premium subscribers by the fourth quarter of 2020 against a forecast of 152.5 million.

The company has consistently grown its user base since 2015.

Spotify also reported an increase of 15% in subscription revenues in the third quarter of the year, bringing it to €1.79 billion, and a 9% increase in ad revenue.

The increases are attributed to the service’s entry in Russia and 12 other European markets in July. The company noted that the Russian launch was “the company’s most successful launch yet.”

Despite its growth on several fronts, Spotify still posted a loss of €101 million as discounted rates brought down revenue per user to €4.19 or -10%.

The loss is a massive reversal as in the same period last year, Spotify made €241 million in profit.

Spotify nevertheless is still the most subscribed music streaming service globally, with a 35% share of the market in 2019 according to statistics portal Statista. Spotify is followed by Apple Music at 19% and Amazon at 15%. — ZBC

DMCI Homes improving building durability of Davao condominiums after 2019 earthquake

DMCI HOMES is strengthening the durability of its condominium buildings in Davao City in light of a recent earthquake that hit the region last year.

In a statement over the weekend, the Consunji-led property developer said it completed seismic upgrades on the four buildings in its Verdon Parc project, namely Martel, Belvedere, Trevans and Maurin.

It engaged the Office of the City Building Official, Philippine Institute of Civil Engineers and Macro Consulting Structural Engineers Company in the planning and construction of the structural enhancements, it said.

Among the efforts were retrofitting the structure, reinforcing columns and beams with carbon fiber, and adding cross-brace and knee-brace support in strategic locations.

“As we start the turnover of the Belvedere building this month, our clients can be assured that Verdon Parc is up to the latest seismic safety standards. We have also enhanced the property’s features and property management services to complete residents’ resort-living experience at Verdon Parc,” DMCI Homes Vice-President for Project Development Dennis O. Yap said in the statement.

The Trevans and Maurin buildings are likewise scheduled for turnover by February and October next year, respectively.

Earlier this year, President Rodrigo R. Duterte threatened DMCI Holdings, Inc. that he will “not grant (the company) any permit to dig” following an issue relating to a condominium he said it built in Davao City.

The condominium is Ecoland 4000, which reportedly sustained “major cracks” after an earthquake in Davao City late last year.

DMCI Holdings is the listed parent of DMCI Homes, which recorded a 58% earnings decline to P3.91 billion during the past three quarters due to the coronavirus pandemic. — Denise A. Valdez

PIRA to consider evaluating data using telematics for auto insurance

THE PHILIPPINE Insurers and Reinsurers Association (PIRA) said it would consider data evaluation based on telematics, a technology used in mobile phones to detect and analyze driving behavior, in replacing motor tariff and promoting insurance technology or insurtech.

Risk advisor Simon Lee of Deloitte recently told PIRA in a webinar that the tool provides a driver score by collecting seven types of data: speed, acceleration, mileage, braking, time of trip, cornering, and location. A score of up to 100 as excellent for each category determines whether a driver is safe or dangerous.

With the use of GPS in telematics, Mr. Lee said drivers can be alerted on accident-prone roads, allowing them to take safer routes.

“It’s very timely because we’re in the middle of our debate whether to continue the tariff or offer an alternative. To my mind, this is a perfect alternative to that and I hope this is going to feed to the discussion,” PIRA Executive Director Michael F. Rellosa said.

Motor tariff is the amount shouldered by the insured before their claims are processed.

According to the Insurance Commission, private car owners must pay a minimum deductible of P2,000 or 0.5% of the sum insured (SI), whichever is higher. For commercial vehicles and motorcycles, the requirement is P3,000 or 1% of SI, and P500 or 1% of SI, respectively.

Citing data from a client in Japan, Mr. Lee said it was able to offer 25% less in premiums and reduce claims to 17 in a year using telematics. Meanwhile, he said a client in Portugal improved its customer retention by 23% and loss ratio at 19% annually.

As the drivers become more aware of their dangerous driving behaviors using data from telematics, Mr. Lee said insurers can also offer customer rewards which develop loyalty to the company.

“Based on frequent interaction with the client, these programs were proven to have greater influence than tariff discounts on driving behaviors,” he said.

Motor tariff discounts provide at least 0.75% of SI or P3,000 for private vehicles and 1.50% of SI or P4,500 for commercial vehicles.

“It’s really interesting. I’m sure we’ve opened their eyes to this possibility. We do have that sandbox thing in place and probably we could use that to introduce this new way of serving our clients,” Mr. Rellosa said.

In June, the Insurance Commission (IC) issued guidelines on the adoption of a regulatory sandbox framework, requiring insurtech firms to secure approval from the regulator.

A regulatory sandbox is a controlled environment where a licensed insurance provider will set up a system to allow “small scale and live testing of technical innovations” in different scenarios.

The sandbox should be operated in experimentation cycles that will have to be approved by the IC, with a maximum period of one year with period extension of up to six months.

Applicants will also have to submit an “exit plan” from the regulatory sandbox that will contain a methodology of scaling up the project for a larger market; a plan for clients in case the proposal is discontinued; and the amount allotted to implement the technological solution that shall be intended as payment for any claims arising from said implementation or adoption thereof, which shall be unimpaired at all times.

“I think this could help in the development of underwriting through the use of insurtech. Maybe, we will expect this initiative from the industry,” IC Claim Adjudication Officer Alwyn Franz P. Villaruel said. — K.K.T. Jose

Pandemic seen to give Metro Manila a chance to correct urban planning errors

By Cathy Rose A. Garcia, Managing Editor

THE PANDEMIC has exposed the vulnerabilities of mega-cities like Metro Manila, but it also offers a once-in-a-lifetime opportunity to correct urban planning mistakes, a top urban planner said.

Palafox Associates Founder and Principal Architect Felino “Jun” Palafox, Jr. said the pandemic is forcing cities around the world to rethink urban development for the “new normal.”

“I think cities will bounce back and bounce forward… We must learn from it. In fact with this pandemic. We are revisiting plans and programs that were not implemented. Even cities like Milan, the center of the pandemic, they are now changing urban development,” he said during a fireside chat at the BusinessWorld Virtual Economic Forum on Nov. 25.

In April, Milan unveiled the Strade Aperte plan which aimed to reduce car use by introducing bicycle lanes, wider pavements, and pedestrian and cyclist-priority streets.

“Other cities in the past, every time there is a pandemic, they improve. when there was cholera in Paris and London, they fixed their sewerage system so there was clean water and sanitation. In the US, when there was a cholera epidemic, they created Central Park and more open spaces,” Mr. Palafox said.

15-MINUTE CITY
Mr. Palafox lamented the lack of public parks and open spaces in Metro Manila, saying cities should be more walkable and bikeable.

“Open spaces are the lungs of the city. What we are pushing for is the 15-minute city… Neighborhoods where one can work, live, dine, shop and learn with healthcare and wellness centers should be within the 15-minute walk or ride,” he said.

Paris Mayor Anne Hidalgo earlier this year proposed the “ville du quart d’heure” — the quarter-hour city — where offices, shops, health facilities, and parks will just be a 15-minute walk or bike ride away. She also proposed creating bike lanes and removing parking spaces for cars.

Mr. Palafox believes Metro Manila can still implement similar measures to ease congestion. Several mayors in Metro Manila have implemented bike lanes in their cities during the lockdown.

“I’ve also been proposing for our congested cities to have elevated walkways and bike lanes in EDSA or congested areas that do not have wide sidewalks… This will have vendors in the area, so that all hours of the day, you feel safe. With vendors, there are more eyes on the public realm, so you feel safer,” he said.

At the same time, Mr. Palafox said the pandemic also gives the Philippine government an opportunity to balance national development.

“The primacy of Metro Manila is wrong. A primate city is more than 10 times the second largest city… Makati, Ortigas and Fort Bonifacio, these are areas with big concentrations of jobs and economic activity but they are surrounded by low-density, gated communities. So the employees of these job centers are edged out of the housing stock around the centers. We can correct that and maybe these CBDs, after this pandemic, should build more affordable housing for workers so they become part of the city,” he said.

It would be ideal to have more integrated, mixed-use developments within the cities, Mr. Palafox added.

CLIMATE CHANGE
Climate change is another problem being faced by cities, especially in the Philippines. Two super typhoons (Rolly and Ulysses) caused heavy flooding in parts of Luzon island.

“Metro Manila used to be the Pearl of the Orient Seas, now it is an example of how not to develop a city, how not to do it,” Mr. Palafox said.

“Zoning should be changed so the projects face the waterfront. Waterfront is an amenity, and our country has the fifth longest coastline in the world… Unfortunately in our country, we treat the waterfront, our waterways as the garbage and sewerage system.”

The Philippines has a total coastline of 36,289 kilometers, according to the Environment department.

Mr. Palafox said the government should make preparations to address potential disasters, since it is “90% cheaper, less expensive to address the hazards before they become disasters rather than post-disaster rehabilitation.”

“This crisis, we can get inspired by the best practices in the world and we can correct the mistakes we made,” Mr. Palafox said.

Central Azucarera de Tarlac posts P62.11-M net loss

LISTED sugar miller Central Azucarera de Tarlac, Inc. incurred a P62.11-million net loss in the July to September period, the first quarter of its fiscal year, despite posting higher revenues during these months.

In a disclosure to the stock exchange, the sugar company said its loss in the first quarter is slightly lower than the P62.41-million net loss it posted in the same period a year ago.

“The first quarter of fiscal year 2020-2021 was focused on managing resources while faced with challenges on all fronts. The first quarter was aimed at cash generation by converting inventory,” the disclosure said.

Central Azucarera de Tarlac said its revenues during the period rose by 57% to P219.03 million from P139.51 million last year.

The sugar company added that it capitalized on its alcohol sales as its sugar inventory has yet to increase as the milling season starts in the second quarter.

“The company has no beginning sugar inventory to sell compared to last year’s roughly 30,000 sugar bags or P46.5 million sales. This reduction was off-set by the alcohol and molasses revenues, both posting favorable price and quantity variances,” the disclosure said.

Revenues of the company’s alcohol and molasses products during the period reached P190.21 million and P17.50 million, respectively.

Meanwhile, Central Azucarera de Tarlac’s operating expenses increased by 1.2% to P24.75 million against P24.45 million last year.

The company said its depreciation and amortization expenses rose to P2.2 million, compared to P1 million a year ago, due to capital expenditures in non-factory facilities over the past years.

“Professional fees increased to P5.4 million from P4.9 million due to one-time engagements of various professionals in the last reporting period,” the disclosure said.

“The ill effects of the coronavirus disease 2019 (COVID-19) pandemic pushed the company forward in solidifying its commitment to strengthen its operations by exploring diversity and upholding sustainability and in all its business models,” it added. — Revin Mikhael D. Ochave

Japan-inspired condominium to rise in Manila

LISTED VISTA LAND & Lifescapes, Inc. is continuing its joint venture with Mitsubishi Estate Co. Ltd. to build a Japanese-inspired condominium in Taft, Manila.

In a recent statement, the Villar-led property developer said its condominium arm Vista Residences, Inc. will work with the Japanese firm on a 42-storey condominium tower.

The development will have more than a thousand units and a retail space, and will target university students and young professionals in the Taft area.

“Vista Land is excited to present our very first Japanese-inspired condominium property in Manila… We want our homebuyers to be able to balance their purpose and passion while enjoying the convenience of city living,” Vista Land President and CEO Manuel Paolo Villar said in the statement.

The project will offer studio and one-bedroom units and will feature larger common areas and outdoor spaces as it aims to appeal to a premium market.

It will be located close to De La Salle University, College of St. Benilde and St. Scholastica’s College, and will be a few minutes away from Makati City, Taguig City and the Bay Area.

“We are grateful for our partnership with Vista Land that will enable us to take on another challenge to share our expertise and passion in real estate development, and we hope to explore more opportunities with Vista Land,” Mitsubishi Estate Senior Executive Officer Yutaro Yotsuzuka said in the statement.

“We look forward to our collaboration in terms of concept, architecture and technology that will differentiate this project from the rest of the condominium properties in Manila,” he added.

The two companies first announced their 60-40 joint venture for a condominium project in Taft last year. — Denise A. Valdez

Entertainment News (12/01/20)

Itchyworms release 2 Christmas songs

THE ITCHYWORMS keeps the holiday cheer going with the simultaneous release of two Christmas songs: “Have A Merry Christmas” and “Maligayang Pasko.” Honoring the tradition of writing Yuletide-themed originals, the pop-rock quartet is keen on uplifting people’s spirits during the pandemic. Lead vocalist Jugs Jugueta said that “Have A Merry Christmas” was inspired by a meme featuring Jose Mari Chan which he said was funny the first time it came out, but lost its charm with repetition year after year. So he posted a challenge on Facebook: instead of posting about Jose Mari Chan, write your own Christmas song. “Have A Merry Christmas” was his reaction to his own challenge. Intricately arranged with Beatlesque pop harmonies, string arrangements, and catchy, sing-along moments, “Have A Merry Christmas” has a message of joy and positivity. Meanwhile, “Maligayang Pasko” takes listeners back to the 1970s and early ‘80s. It is a laid-back, groovy tune that winks toward Manila Sound and city pop. The two songs are now available on all streaming platforms worldwide via Sony Music.

Bianca remakes Rivermaya classic

ACOUSTIC pop newcomer Bianca has released a stripped-down version of Rivermaya’s classic song “Hinahanap-hanap Kita” via Sony Music Philippines. Arranged with acoustic guitars, lush strings, and subtle electronic beats, Bianca’s rendition of the 1997 alt-rock staple infuses a more poignant take than the original.  “Hinahanap-hanap Kita” is co-produced by 6cyclemind’s Rye Sarmiento who gave the finishing touches to Bianca’s first single, “Biglaan,” which has racked up a million streams so far on Spotify. “Hinahanap-hanap Kita,” a part of her upcoming EP, is now available on all streaming platforms worldwide.

PhilPop releases final batch of songs

THE NATIONWIDE songwriting competition PhilPop has released the final batch of songs from the South Luzon cluster. Carefully selected from thousands of submissions, the entries from this particular group reflect truths about romantic relationships, disappointments, and heartaches. Distributed by Warner Music and produced by PhilPop, the homegrown tracks are now available on all digital and streaming platforms worldwide. The entries are “Para Kay Catriona,” composed by Kulas Basilonia and interpreted by I Belong to the Zoo; “Bitaw,” composed by Keen and interpreted by Zsaris; and “Lunod,” composed by Chochay Magno and interpreted by Shaira Opsimar.

R&B artist Gareth T. drops new song

HONG KONG-based R&B producer/artist Gareth.T has dropped a soulful jam called “2 More Weeks” via international indie label, Umami Records. Infused with a Mac Ayres-inspired vibe and lo-fi beats, “2 More Weeks” tells the story of someone wanting to go home to see their loved ones. This R&B bop features hip-hop verses coasting through breezy melodic lines and a slinky pop edge. Currently based in Boston while studying at Berklee College of Music, the prolific producer has been dropping a new track every four weeks, and has no plans to slow down. Listen to “2 More Weeks” at this link: https://www.umamirecords.sg/2-more-weeks/.

Miley Cyrus drops album Plastic Hearts

MILEY Cyrus returns to the music scene with the release of her highly anticipated new album, Plastic Hearts, out now via RCA Records. Cyrus’ seventh studio album features collaborations with Billy Idol, Joan Jett and Dua Lipa. Built around retro-inspired bangers and thumping stadium anthems, Cyrus’ new sound gives listeners a renewed sense of appreciation for music made in the 1970s and ‘80s, as seen in her cover art, which was photographed by iconic rock & roll photographer Mick Rock. Cyrus had already released two singles from the album: “Prisoner” featuring Dua Lipa, which was accompanied by a campy rock video featuring the duo, plus Cyrus’ summer hit, “Midnight Sky.” Plastic Hearts is now available on all digital platforms worldwide.

Quasi-lenders’ loan portfolio drops in 1st half

THE LENDING portfolio of nonbank financial institutions with quasi-banking functions (NBQBs) dropped in the first half of the year as players merged or gave up their licenses, an official from the Bangko Sentral ng Pilipinas (BSP) said.

“As of end-June 2020, the NBQBs’ total loan portfolio (TLP) dropped by 33.6% year on year to P133.4 billion following merger and/or surrender of QB license of certain entities resulting from a review of strategic direction and business operations,” BSP Managing Director for Policy and Specialized Supervision Lyn I. Javier said in an e-mail.

Quasi-banks include financing companies and investment houses.

This also affected total operating income of NBQBs, which plummeted 70.8% to P3.9 billion.

“The decline is also partly influenced by the drop in non-interest income, particularly trading income,” Ms. Javier said.

Like their bank counterparts, quasi-lenders also saw a higher nonperforming loan (NPL) ratio amid the impact of the pandemic. The industry’s NPL ratio picked up to 5.8% as of end-June from 4.4% a year ago.

“The current NPL ratio is higher than the Philippine banking system’s estimated NPL ratio of 4.6% by end-December 2020.  Nevertheless, we expect that the NBQB’s NPL ratio will remain manageable in the next two years,” Ms. Javier said.

The Philippine banking system’s bad loan ratio stood at 3.4% as of end-September, already the highest since the 3.42% NPL ratio logged in May 2013.

The BSP will remain watchful of the NPL ratio of quasi-lenders amid the current crisis, said Ms. Javier.

“The NBQB industry is expected to remain stable as most of the financing companies and investment houses with QB license are linked with universal and commercial banks hence, governed by the same set of risk management standards,” she said. — L.W.T. Noble

Stocks may move sideways on bargain hunting

By Denise A. Valdez, Senior Reporter

LOCAL SHARES are expected to move sideways this week as some investors may start bargain hunting after last week’s four-day decline.

The benchmark Philippine Stock Exchange index (PSEi) closed Friday’s session at 6,791.46, down by 136.29 points or 1.96% against the previous day.

On a weekly basis, the index was lower by 378.33 points or 5.28%, reversing the uptrend it recorded for three consecutive weeks.

Value turnover grew 58% to an average of P16.42 billion, while net foreign selling expanded 162% to an average of P1.56 billion.

“Profit taking dominated following consecutive sessions of strength. The PSEi failed to hold the 7,000 level, plunging 378 points to 6,791,” online brokerage 2TradeAsia.com said in a market note.

The market has been on an uptrend since the start of November due to improved third-quarter corporate earnings and a string of positive news on the coronavirus disease 2019 (COVID-19) vaccine.

However, strong selling pressure pushed the PSEi to correct last week, which led the market to break below its 10-day exponential moving average, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said.

“(This) trading week, we may see sideways movement from the market. Investors may hunt for bargains from last week’s sell off,” Mr. Tantiangco said in a text message.

Aside from bargain hunting, investors may also turn bullish if there will be positive developments on coronavirus vaccine candidates. Another catalyst is the upcoming November manufacturing data, which is expected to come out this week.

“Improvement in our manufacturing data could provide boost to market sentiment,” Mr. Tantiangco said.

Investors may also react to the passage of the corporate tax reform bill, Senate Bill No. 1357 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE).

“The CREATE bill… will be a primary point of discussion for 2021, especially for the next earnings reporting seasons,” 2TradeAsia.com said.

Among the bill’s salient points, based on the brokerage’s analysis, are the reduced corporate income tax, as this will help pad earnings recovery, and the net operating loss carry-over extension, which will assist small and medium enterprises.

“Truly, there is no such thing as free lunch, but the CREATE bill, in general, will put the Philippines on par with ASEAN economies in taxation — a plus in the long run,” 2TradeAsia.com said.

Other developments that will help improve sentiment are the passage of the P4.25-trillion national budget for next year and news that the government is preparing for COVID-19 vaccinations by as early as the second half of 2021.

The brokerage set the immediate support for the PSEi at 6,650 and resistance at 7,000, while Mr. Tantiangco put support at 6,600 and resistance at 7,150.

DPWH, not House revamp, blamed for realigned budget

THE Department of Public Works Highways (DPWH) was responsible for redistributing infrastructure spending items in the proposed 2021 national budget, a senior legislator said, rejecting claims that budget cuts targeted Representatives associated with the former House leadership.

“It was the DPWH that made the realignments and we just adopted the amendments given to us by the department,” ACT-CIS Party-list Rep. Eric G. Yap told ABS-CBN News Channel, after a senator claimed that allies of House Speaker Lord Allan Q. Velasco received increased budgets.

While there were “noticeable” increases in the budgets of congressmen allied with the current House leader, allocations for infrastructure projects in districts represented by those allied with ousted Speaker and Taguig Rep. Alan Peter S. Cayetano were “slashed,” Senator Panfilo M. Lacson said.

Camarines Sur Rep. Luis Raymund F. Villafuerte, Jr., a former deputy Speaker, said P368 million was slashed from his district’s budget.

Mr. Yap, however, said the budget cuts cited by Mr. Villafuerte were not intended for the projects specifically for the second district of Camarines Sur. “The P386-million cut was for Build, Build, Build, projects,” he said.

The funds were reallocated by the DPWH to other projects that “can be finished by 2021,” he added.

Mr. Yap said other realignments were made in response to the needs of some areas hit by the November typhoons.

He said Mr. Velasco “did not meddle” in budget amendments.

“I think Speaker Velasco recognized my independence, that I’m not clinging to the left or clinging to the right. I just do my job.”

The bicameral conference committee on the proposed P4.5-trillion national budget for next year convenes this week.

“I can assure you that this is free of pork barrel. All I can see are projects that will benefit the Filipino people,” he said. — Kyle Aristophere T. Atienza

Philippine consumer confidence lags region; WFH-enabled workers report more optimism

CONSUMER CONFIDENCE in an economic recovery is lower in the Philippines compared with elsewhere in Asia, McKinsey & Co. said, citing the results of a study.

Only 42% of Filipinos considered themselves optimistic, while 9% were pessimistic and 49% unsure.

McKinsey & Co. Philippine Managing Partner Kristine A. Romano said at the BusinessWorld Economic Forum last week that “40-60% strongly agree that their jobs, their livelihood, (on a personal level) they’ve been very affected by the pandemic.”

“Since the lockdown started, there really has been a decline in consumer optimism (in the Philippines) in contrast to China.”

Philippine optimism in March was at 57%, then dropped to 42% in April and October. In contrast, optimism in China was at 48% in March, increasing to 56% in April then 58% in September.

In India, 58% are optimistic, while 53% of Indonesians are the same. Optimism in Japan is much lower, with 62% saying that they are unsure and 7% remaining optimistic.

“In India or in Indonesia, where arguably the level of health outcomes are somewhat similar, they’re much more optimistic than we are,” she said.

Ms. Romano said that she is closely tracking the fourth quarter data for the impact of the holiday season on Philippine consumer optimism.

She said consumer behavior in the Philippines is changing, with more people using mobile and contactless payments.

“The lower income segments are actually less optimistic, while the higher income segments have become more optimistic over time,” she said, adding that jobs could be more stable for white collar workers as they do more remote work.

Lower consumer confidence, she said, translates to postponed spending even if the workforce is earning.

She said interventions are needed to improve consumer confidence.

“On one hand, you could give away money, which, yes, works. But at the end of the day, what brings confidence is also how we communicate and how we create lighthouses of success,” she said.

“For example, is there a way that we can bring in significant FDI (foreign direct investment) into the country? Can we bring tens or hundreds of millions of FDI, rationalize whatever benefits we need to, make ourselves more competitive not just during the pandemic but during the long term, announce that, create jobs — and that’s the type of thing that will improve consumer confidence over the long term.”

Asked what she would advise companies, she said safety and localization drive consumption. This means that consumers buy from places that have safety protocols in place and are closer to them.

“If you’re not able to be nearby, can you shift online so that you can have the same convenience? I think there’s something to be said around the safety and convenience that you have to offer.”

Companies can also consider product lines that focus on value-driven consumers who either splurge to reward themselves or prefer to spend on value-for-money goods like smaller bite-sized foods.

She added that enabling digital interaction with consumers also helps.

“For example with malls, people now assume nobody is going to the malls. But in fact, people first now go to the website or Facebook page of the mall,” she said, to look at opening hours and other information.

She said that consumers no longer go to malls for leisure, but are instead “on a mission” to buy certain goods. Access to information, she added, gives them the confidence to go outside and make purchases.

The more quickly organizations are able to learn and adapt to different economic scenarios will determine whether they will succeed post-pandemic, she said.

Ms. Romano said that the pandemic is accelerating trends in ASEAN, including advancing manufacturing hubs, investing in green infrastructure, building high-value food industries, company digitalization, and reskilling workers. — Jenina P. Ibañez

PHL recovery to be hindered by Nov. typhoons

THE economy’s recovery will be hindered by the series of typhoons that hit during the fourth quarter, with fiscal and monetary measures necessary to provide support, S&P Global Ratings said.

“The economy is gradually improving, but the disruption of a recent typhoon will delay the recovery,” S&P said in a note on Monday.

Crop damage from typhoons Rolly and Ulysses (international names: Goni and Vamco) were tallied at P5.79 billion and P6.72 billion, respectively, by the Department of Agriculture.

S&P Global Ratings maintained its gross domestic product (GDP) estimate of minus 9.5% and 9.6% for 2020 and 2021, respectively, issued in September. This compares to the minus 4.5% to minus 6.6% forecast range given by the government for this year and a growth estimate of 6.5% to 7.5% for 2021.

S&P’s 2020 GDP forecast for the Philippines is the worst among the economies it tracks in the Asia Pacific. Its estimate for Thailand is minus 6.4%, Singapore minus 6.1%, and Hong Kong minus 5.8%.

“As before, the base-effect-driven high growth rates for the upcoming years mask the fact that the level of GDP will remain far below the pre-COVID trend even by the end of our forecast horizon,” S&P said.

The economy contracted by 11.5% in the three months to September, following the record 16.9% decline in the three months to June period. The third quarter was the third straight GDP contraction.

S&P expects inflation this year to average 2.8%, higher than the 2.4% forecast of the central bank. Year-to-date, the consumer price index rose 2.5% as of the end of October.

“Inflation remains high relative to how much domestic activity has fallen, in part due to the supply-side disruptions from recent typhoons,” it said.

“But with growth so low, we continue to pencil in one last rate cut from the Bangko Sentral ng Pilipinas (BSP) after [last] month’s [November] move, before a long pause,” it added.

The overnight reverse repurchase, lending, and deposit facility are currently at record lows of 2%, 2.5%, and 1.5%, respectively, after a 25 basis points (bps) cut in November. The central bank has slashed 200 bps from benchmark rates so far this year to provide support to the economy and has assured that it will remain accommodative if the need arises.

Meanwhile, S&P said the Philippines’ fiscal response to the crisis remains small.

“We expect a boost from fiscal impulse in the second half of next year if key infrastructure projects start to ramp up again,” it added.

The 2021 budget worth P4.5 trillion remains pending in Congress and legislators have committed to passing it by Dec. 16, in time for signing before the year ends. — Luz Wendy T. Noble

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