Home Blog Page 7572

Malampaya extension plan still a go if operator exits — Cusi

THE consortium involved in developing the country’s sole natural gas field will still proceed in applying for the project’s extension despite the imminent exit of its operator.

Shell Philippines Exploration B.V. (SPEx) on late Wednesday said it was considering the sale of its 45% stake in the Malampaya gas-to-power project under state-awarded Service Contract (SC) 38 as part of its rationalization efforts.

“As part of an ongoing portfolio rationalization to simplify and increase the resilience of its business, Shell is exploring its options with a view to divest its interest in SC 38 (Malampaya),” SPEx General Manager Rolando J. Paulino, Jr. said in a statement.

But its upcoming exit in the project will not affect the Malampaya consortium’s plan to apply for the extension of its operations beyond 2024, according to the Department of Energy (DoE).

“Even if [S]hell is planning to sell their share, the consortium will proceed with their application for extension or new contract,” Energy Secretary Alfonso G. Cusi told BusinessWorld in a mobile message.

SPEx heads the group behind the deepwater natural gas field near Palawan island, along with Dennis A. Uy’s UC Malampaya Philippines Pte Ltd., which acquired the 45% interest of Chevron Malampaya LLC in March. Government-owned Philippine National Oil Co. Exploration Corp. (PNOC-EC) holds the remaining 10% stake.

The consortium claims gas resources can still be tapped from the field beyond the end of its contract period. It has yet to disclose when it plans to formally file a contract extension.

Meanwhile, SPEx will “ensure a smooth transition of the asset to a credible buyer who would be well placed to optimize the value from Malampaya,” according to Mr. Paulino

“The Philippines remains an important country for Shell after over a century of successful operations, and Shell will continue to pursue opportunities where it can leverage its global expertise in line with its strategy,” he added.

The crash in refining margins as an impact of the global coronavirus disease led Pilipinas Shell Petroleum Corp. last month to announce the permanent shutdown of its 110,000-barrels-per-day refinery in Tabangao, Batangas. The plant will be converted into an import terminal so it can continue to supply petroleum products in Luzon and the northern Visayas.

Shares in Pilipinas Shell inched down 0.71% to close at P16.84 each on Thursday.

DEPLETING NATURAL GAS RESERVES
According to the DoE, the Malampaya natural gas field is projected to be completely depleted in 2027.

PNOC-EC, where Mr. Cusi is the ex-officio board chairman, is preparing a study on the country’s various sedimentary basins with potential gas and oil resources that can replace the Malampaya reserves.

Year-to-date, the Philippines is able to produce 73,388 million standard cubic feet (mmcsf) of natural gas, while consumption stands at 69,856 mmcsf, based on DoE’s latest monitoring.

The Malampaya field provides 3,200 megawatts of power, which accounts for 21.1% of the country’s gross power generation in 2019.

Rotational brownouts in Luzon are feared if the dwindling supply in the natural gas depot is left unresolved, Senator Sherwin T. Gatchalian said in a statement over the weekend.

Besides locating other indigenous natural gas spots, the country is also looking to import more liquefied natural gas (LNG) supplies.

Four private groups have applied with the government for the construction of imported LNG terminals, including a group led by businessman Lucio C. Tan and the Lopezes’ First Gen Corp. — Adam J. Ang

Want people to watch your ad? Don’t mention COVID

THE YEAR 2020 is when everything changed, when things ranging from how people shop, work, socialize, and study have been affected by the coronavirus disease 2019 (COVID-19) virus. The same goes with how ads are now made, what message they transmit to their customers, and how they incorporate this new, pandemic-laden reality, into the world of targeted storytelling.

“I think one of the big questions we get asked a lot is ‘how should my brand treat COVID-19 (coronavirus disease 2019): do we need to address it directly? Do we need to talk about it in context? And what behaviors can we display or not display,’” Ben Jones, global creative director, for Unskippable Labs, said in a press conference held after YouTube Brandcast 2020.

YouTube Brandcast is the video-sharing platform’s annual event targeted toward brands while Unskippable Labs is Google’s program that “help[s] brands figure out what type of creatives work on YouTube,” according to its website.

“The challenge of that is there’s this overwhelming human context that we’re all in — we’re all experiencing this — and yet our experiences have a lot of nuance to them,” Mr. Jones explained.

But what kinds of ads make people want to watch and not skip? Mr. Jones said these are “ads [that] made no reference to the crisis at all” and made an example of the recent Nike ad titled, You Can’t Stop Us, which featured existing videos of athletes and how they can’t be stopped and that every adversity makes them come back stronger. Nike, in the video, explained that “if you have a body, you are an athlete.” The video has been viewed almost 60 million times and was uploaded last month.

“The top pool of ads made no reference to the crisis at all. They didn’t depict behaviors that were specific to the crisis. They didn’t talk about it directly. So what we saw is that many brands who are trying hard to make reference to the crisis were losing track of their own brand,” he explained.

Reactions to ads that make direct mention of the pandemic are “so overwhelming that consumers were not remembering the brands that were in the ads.”

“You need to be extraordinarily humble, you need to understand what your role is in the lives of consumers and what products or services are interesting to them, but you don’t need to make the ads about COVID: you need to make your ads about your brand and the role you can productively play,” he said.

In the Philippines, milk brand Lactum created the ad Alagang Ramdam ng Bawat Pilipino in May in time for Mother’s Day. The ad narrated the story of a mother’s love and highlighted the heroic roles of moms who are also COVID-19 frontliners. The video has been viewed more than 19 million times. And while the ad talked about COVID-19, it did so in a way that did more than highlight the pandemic, it highlighted the strength of mothers who fight it and still take care of their families.

AD PRODUCTION IN THE TIME OF COVID-19
With the health restrictions that came with the management of the pandemic, the production of advertisements became tricky as gone are the days when large scale ads could shoot in a studio with numerous staff members. This means that creatives have to be more creative.

“On YouTube, we are seeing advertisers that are starting to make ads that anticipate and embrace this new reality. As many businesses continue to think about how to navigate these uncertain times, creatives are experimenting with different storytelling styles,” Mr. Jones said in a release.

“From reimagining existing assets, reinvigorating animation to miracles of editing that take our breath away, we are seeing ads that are both effective and distinctive despite the constraints,” he said.

During the conference, he noted that “more creative directors’ children are starring in ads than ever before” and the same goes for behind-the-scenes staffers who are now getting a shot in from the camera.

The pandemic also saw “an explosion of animation and CGI (computer-generated imagery)” especially in food brands as they “explore the deliciousness of their food in a way that doesn’t require people to get together.”

“A whole range of options are opening up, [and there are] new opportunities to be creative in different sorts of ways,” Mr. Jones said.

And in order to create effective ads in such a different time, he advised that creatives “explore new signals” and “look beyond basic demographic signals.”

Once brands have settled on their signals, the trick  is to “tune those stories based on those signals.”

“This doesn’t need to be a large change — you can use exactly the same video clip but in a different [way] that references the consumer context or creates a connection to their passion, and that can again increase creative effectiveness,” he explained.

Finally, it’s all about experimentation.

“This path of experimentation can open up a pretty extraordinary upside and allow you to build from a small base into a healthier place for your business,” he said. — Zsarlene B. Chua

Del Monte cuts net loss by 91% on better sales, non-recurring expenses

DEL MONTE Pacific Ltd. posted an attributable net loss of $3.25 million in the three months ending July, lower by 91% from last year’s $38.26-million loss, due to improved sales this year and expenses that were not carried over from last year.

The canned fruits manufacturer disclosed its first quarter results on Thursday, showing a 10% growth in gross revenues to $413.06 million. The company’s fiscal year begins in May, and the results reported reflect its performance from May to July 2020.

Aside from the improved sales, the company’s bottomline was lower year-on-year because of last year’s $39.6-million one-time expenses. These are related to the withholding taxes on Del Monte Philippines, Inc.’s payment of dividend to the parent company.

Del Monte said the coronavirus pandemic brought positive results for its business, as consumers showed increased demand for healthy products to combat the health crisis.

United States subsidiary Del Monte Foods, Inc. (DMFI) recorded an 11% sales growth to $268.2 million. When people were stuck at home due to the lockdown, consumers prepared their own food and bought up Del Monte’s vegetable, fruit, tomato, and broth products as ingredients.

In the Philippines, sales likewise grew 22% in dollar terms, lifted by increased volume, improved sales mix and better foreign exchange rates. Meal mixes, spaghetti sauce, and pineapple juice were the most prominent products as people heeded its supposed health benefits.

The company’s presence in other parts of the world similarly generated improved results. Gross profit in Asia Pacific grew 8% to $44.15 million, while Europe swung to a gross profit of $803,000 from last year’s loss of $1.04 million.

“We are encouraged by the sustained sales momentum in the first quarter, which is a testament to the strength of our brands and product portfolio, offering health and nutrition to consumers,” Del Monte Managing Director and CEO Joselito D Campos, Jr. said in a statement.

The company’s bottom line remains a loss, but Del Monte said this is due to the seasonality of its business, which usually makes the first quarter its lowest quarter of the year. Del Monte expects to return to profitability by the end of its fiscal year 2021.

“[Del Monte] is well-positioned in this environment given its nutritious long shelf-life products which enable consumers to prepare more meals at home… DMFI is also well-placed to improve performance [this year] with a more efficient supply chain due to the restructuring accomplished in the last fiscal year, better sales mix and management of costs,” it said.

“The [Del Monte] Group expects to return to profitability in fiscal year 2021, barring unforeseen circumstances,” it added.

Shares in Del Monte at the stock exchange closed at P4.75 apiece on Thursday, up 10 centavos or 2.15% from the last session. — Denise A. Valdez

MacroAsia, Chinese partner get extension for Sangley documents

THE Cavite province has given MacroAsia Corp. and its Chinese partner another 90 days to complete their requirements for the $10-billion Sangley Point International Airport project.

Lucio C. Tan-led MacroAsia and its partner China Communications Construction Co. Ltd. (CCCC) had missed the Sept. 9 deadline set by the Cavite government for the submission of all the required post-qualification documents for the airport project.

“The consortium was able to make partial submission of documents as required by Notice of Award. However, considering the continuing adverse impact of Covid-19 (coronavirus disease 2019) and in the exigency of service, the request for extension of 90 days immediately after air travel resumes between China and the Philippines to comply with all the conditions of the Notice of Award is granted,” Cavite’s Public-Private Partnership Selection Committee Legal Officer Jesse R. Grepo said in a mobile phone message on Thursday.

“Note that the said extension is granted subject to the firm commitment of the consortium to fully comply with the requirements on or before the new deadline,” he added.

In a disclosure to the stock exchange, MacroAsia said among the documents it had already submitted was the “newly and fully authenticated copy” of the joint venture proposal.

The post-qualification documents were supposed to be completed and submitted 60 days after the group received the notice of award on Feb. 14.

Cavite had initially given the consortium until the second week of June to process and submit the documents before a joint venture development agreement could be signed.

The groundbreaking for the first phase of the airport project was initially expected to take place in the second quarter of the year.

The airport is expected to be fully operational by 2023, with partial operations to start a year earlier. — Arjay L. Balinbin

CCP Arthouse Cinema screens films about Martial Law

THE CULTURAL Center of the Philippines (CCP) is reviving its cinema program by screening selected films revisiting one of the most tumultuous periods in Filipino history — the Marcos Martial Law era.

Starting Sept. 25, 3 p.m., the CCP Arthouse Cinema, through the CCP Channel, will be screening a selection of films that were featured in past editions of the Cinemalaya Independent Film Festival and the Gawad CCP Para sa Alternatibong Pelikula at Video. The films will be available for viewing for 48 hours

These films serve as the start of the relaunch of the CCP Arthouse Cinema and CCP Film Society on the digital platform.

The following films will be shown in the #Never Forget program:

• EDJOP (directed by Joe Cuaresma, 1987). The documentary follows the life and times of student leader Edgar Jopson. The young “Edjop” led the student movement that sparked the historic First Quarter Storm. The documentary won the top prize at the first Gawad CCP Para sa Alternatibong Pelikula at Video.

• ML (directed by Benedict Mique, Jr., 2018). The political thriller tells the story of college jock Carlo (Tony Labrusca) as he experiences Martial Law-style incarceration and interrogation when he stumbles into the demented existence of a retired military general (played by Eddie Garcia). Eddie Garcia won the Best Actor award and the film was awarded as having the Best Editing at Cinemalaya. It was lauded for direction and editing at the 2019 Gawad Urian Awards.

• Sigwa (directed Joel Lamangan, 2010). Dolly, a junior correspondent of a US magazine, is sent to the Philippines in 1970 to do a story on student activism in Manila. She returns after being arrested and deported in 1975, the third year of martial law. Returning decades later, her mission is personal this time: to look for her daughter, who was supposed to have died 35 years ago, but who, she has been told, is alive. The 6th Cinemalaya Independent Film Festival awarded the Best Supporting Actor to Tirso Cruz III for his work in Sigwa; while the film won Best Story and Best Screenplay at the 2011 FAMAS Awards. It also bagged Best Motion Picture, Best Original Screenplay, Best Supporting Actress for Zsa Zsa Padilla, and Best Supporting Actor for Tirso Cruz III at the 2011 Golden Screen Award Phils.

• Beyond the Walls of Prison (directed by Lito Tiongson, 1987). A documentary about the quest for justice and freedom of former political detainees under the new government, the video bagged Best Documentary at the 1st Gawad CCP Para sa Alternatibong Pelikula at Video.

On the days leading up to their premieres, audiences can learn more about the films by reading the informational content that will be released on the CCP Official Facebook page. The films will be available for 48-hours free public viewing beginning at 3 p.m. on Sept. 25, on the CCP Channel Vimeo Video-On-Demand Platform.

Audiences may use the promo code NEVERFORGET to avail themselves of the free screening of films.

As part of the online relaunch of the CCP Arthouse Cinema and CCP Film Society, audiences will be able to watch online all of their exclusive offerings featuring the best of Philippine cinema.

The P100 Membership to the CCP Film Society comes with year-long access to the film screenings and special programs of the CCP Arthouse Cinema. For more information they can visit the CCP Media Arts Division Facebook page.

For more information on #Never Forget, call the CCP Film, Broadcast and New Media Division at 8832-1125, local 1705 and 1712.  Or visit the CCP Facebook accounts and website (www.culturalcenter.gov.ph).

ILO estimates 10.7% decline in incomes due to pandemic

THE International Labor Organization (ILO) said the global pandemic has reduced worker incomes by 10.7% to $3.5 trillion in the first three quarters of the year, without factoring in government aid.

In the sixth edition of its ILO Monitor: COVID-19 and the world of work, the ILO said lost working hours also exceeded its earlier estimate issued in June by a wide margin.

It said the revised estimate of global working time lost at the end of the second quarter compared with the end of 2019 was 17.3%, equivalent to 495 million full time equivalent (FTE) jobs based on a 48-hour working week. The earlier estimate was for a decline of 14%, or 400 million FTE jobs. In the third quarter, the estimate is for losses of 12.1% or 345 million FTE jobs.

The outlook for the fourth quarter has worsened significantly since the last ILO Monitor was issued, it said. The baseline scenario is for global working-hour losses of 8.6% compared with the end of 2019 which corresponds to 245 million FTE jobs. The previous estimate was for a decline of 4.9% or 140 million FTE jobs.

It said the working-hour losses are driven by workers in developing and emerging economies, who were much more affected than in past crises, the ILO said.

“While many stringent workplace closures have been relaxed, there are significant variations between regions. Ninety-four percent workers are still in countries with some sort of workplace restrictions, and 32% are in countries with closures for all but essential workplaces.

The ILO said in the second quarter, there was a “clear correlation” between the size of the government’s fiscal stimulus package relative to gross domestic product (GDP) and the prevention of working-hour losses. It found that an additional fiscal stimulus of 1% of GDP reduced working hour losses by a further 0.8%.

 

Axelum starts bouncing back in second half

LISTED AXELUM RESOURCES Corp. is expecting a sharp rebound in revenues by 2021 as it starts seeing improved performance in the second half of the year.

In a statement on Thursday, the coconut products manufacturer said it has started to climb back after posting a 47% income decline to P202.94 million in the first semester.

“Despite the numerous challenges brought about by this ongoing pandemic, we continue to see improving performance and have returned to year-on-year revenue growth,” Axelum President and Chief Operating Officer Henry J. Raperoga said in the statement.

“We are confident of sustaining this uptrend through the end of the year and a sharp rebound in 2021,” he added.

In late 2019, Axelum was expecting its revenues to grow double digits by the end of 2020, driven by expansion and acquisition plans.

However, due to the coronavirus pandemic, the company’s revenues dropped 9% to P2.39 billion in the first half of 2020. It said the lockdowns and mobility restrictions implemented to combat the virus outbreak limited its access to coconut supply, resulting in some unmet demand.

But since the quarantine measures were eased, Axelum said it has commissioned a pressed coconut water processing plant and started operating its pressed coconut water line. These are seen to drive up the company’s production volume, which will help it hit at least 25 million liters of coconut water for its client Vita Coco by yearend.

The Christmas season is likewise seen to lift Axelum’s performance, as it said the holidays usually result in higher demand for both its domestic and export segments.

“We have successfully adapted to this new normal environment. Notwithstanding all these prolonged uncertainties, we are staying focused and determined to attain our growth aspirations,” Mr. Raperoga said.

For next year, Axelum expects its growth will be supported by its new spray-drying facility, which will allow it to develop new products from coconut powder. The completion of the facility will double its daily capacity to 20 metric tons of coconut milk powder.

Axelum is a homegrown company that supplies coconut products to local and international manufacturers, such as All Market, Inc. (Vita Coco), The Hershey Co., Nestlé, Unilever, Ferrero, General Mills, Campbell’s, Quaker and ConAgra Foods.

Shares in the company picked up one centavo or 0.39% to close at P2.55 each on Thursday. — Denise A. Valdez

Disney postpones Black Widow, extending big-movie drought

WALT DISNEY Co. postponed the release of Black Widow, the highly anticipated Marvel movie starring Scarlett Johansson, for another six months, in the latest setback for film studios and theaters.

The movie, originally scheduled to hit theaters in the US on May 1, had already been delayed once, until Nov. 6. It’s now set to debut on May 7 next year, Disney said Wednesday. West Side Story, director Steven Spielberg’s take on the classic Broadway musical, was pushed back an entire year, to Dec. 10, 2021.

Though most theaters in the US are open, studios still face a daunting path to profitability for their high-profile pictures. Because of coronavirus disease 2019 (COVID-19), the largest movie markets in the country, Los Angeles and New York City, are still closed, and sales at venues that are open have been capped to meet social-distancing requirements. A theater trade group also said last week many consumers still think that their local cinema is closed.

The delay also prolongs the pain for theater chains, which need major pictures to draw fans back. Just one big-budget film has opened in recent months — Warner Bros.’ Tenet. The $200 million film has generated a little more than $36 million in domestic ticket sales in four weeks of release, showing that the public is reluctant to go out, and marked one the weakest results for director Christopher Nolan. His last movie, Dunkirk, sold almost $200 million in tickets domestically in 2017.

Against that backdrop, the rescheduling of Black Widow was widely anticipated across Hollywood. Disney’s move means there will be no new major Hollywood films in cinemas until Nov. 20, when Metro-Goldwyn-Mayer’s new James Bond movie No Time to Die is scheduled to debut. Warner Bros., owned by AT&T Inc., still plans to release two major films in December, the sci-fi story Dune and the DC Comics installment Wonder Woman 1984, though it’s possible those dates could slip because of the virus.

MULAN EXPERIMENT
The Black Widow delay shows Disney continues to see theaters as a crucial outlet for new releases. Earlier this month, the studio tried an online debut for Mulan, a live-action remake of a 1998 animated film, offering it to customers of the Disney+ streaming service for an additional $30. It has taken in $57 million in ticket sales in international theatrical markets.

Earlier this year, Disney Chief Executive Officer Bob Chapek called the Mulan release an experiment, helping the studio assess how customers want to watch new movies. Disney hasn’t said how many people bought Mulan, but analysts suggested it would need about 10 million downloads to break even given its $300 million production and marketing cost.

Disney also announced rescheduling plans for other movies, including moving Death on the Nile to Dec. 18 of this year from Oct. 23 and Shang-Chi and the Legend of the Ten Rings, moving to July 9, 2021 from May 7.

Disney still plans to release Soul, the latest animated film from Pixar, on Nov. 20 as previously scheduled. That could allow the company to release the picture early next year on Disney+. The studio also kept Nomadland on the calendar for Dec. 4. The drama starring Frances McDormand has captured festival prizes and is a leading Oscar contender. — Bloomberg

Legislator raises concerns over bill allowing freer entry of foreign contractors

A MINORITY legislator expressed concern Thursday over a bill that could allow freer entry of foreign contractors, which he said may threaten a key source of employment for Filipinos.

During deliberations on House Bill No. 7337, which seeks to amend Republic Act (RA) 4556 or the Contractors’ License Law, House Minority leader Bienvenido M. Abante, Jr. said foreign contractors’ dominance of the construction industry is already “the status quo.”

“The unregulated entry of foreign contractors at this time of an extended pandemic will adversely affect small and medium-sized Filipino contractors and deprive Filipino workers of job opportunities in their own country,” Mr. Abante said.

Section 3.1, Rule 3 of the Implementing Rules and Regulations (IRR) of RA 4556 restricts ownership in the construction industry to Filipinos. It reserves regular licenses only to contractors or firms that are either Filipino sole proprietorships and firms with 60% Filipino ownership.

HB 7337 proposes in Section 17 to add the following provision: “Only persons, regardless of nationality or citizenship, properly licensed and registered with the board in conformity with the authority may practice construction contracting in the Philippines.”

In his sponsorship speech, House Committee on Trade and Industry Chair and Valenzuela representative Weslie T. Gatchalian said RA 4566 did not promote competition because its IRR failed to properly translate the intent of the law.

“The IRR introduced nationality-based classifications which are not found in the enabling law and acted as a barrier to entry for foreign contractors,” he said.

The Supreme Court recently voided the nationality requirement in licensing rules for contractors set by the Philippine Contractors Accreditation Board (PCAB). The case stemmed from PCAB’s denial of Manila Water Company’s application to accredit its foreign contractors.

“With these amendments, this representation is confident that the country will be able to generate more foreign direct investment in the construction industry to spur economic recovery after the tragedy that is COVID-19. Our country badly needs more investment in the construction and real estate industry during this time,” Mr. Gatchalian said.

Foreign direct investment (FDI) inflows declined 18.3% during the first half.

According to Mr. Gatchalian, opening up the construction industry could increase FDI inflows from the current $35.8 million to $216.1 million.

“As a result, the construction sector’s share of total FDI is projected to increase from 0.36% to at least 2.2%,” he said.

“We should take note that these estimates only take into consideration the direct impact of liberalization on the construction sector and has not taken into account the multiplier potential on other related or complementary businesses,” he added. — Kyle Aristophere T. Atienza

Maynilad aims to finish new sewer lines early next year

BW FILE PHOTO

WEST ZONE water concessionaire Maynilad Water Services, Inc. plans to finish the installation of new sewer lines along two water esteros in Manila by the first quarter of 2021.

In a statement, Maynilad said it targets to complete the laying of 1.78 kilometers of sewer lines as part of its “Adopt an Estero” program.

The estero program involves the installation of new sewer lines along five creeks that will catch wastewater from Maynilad customers who could not be served by individual sewer connections.

Maynilad said the program is in support of the Manila Bay rehabilitation program of the Department of Environment and Natural Resources (DENR).

“Facilitating this project has been a challenge given quarantine restrictions. Nonetheless, we continue to pursue our estero rehabilitation efforts because it will help to reduce pollution loading in Manila Bay,” Maynilad Chief Operating Officer Randolph T. Estrellado said.

Since the program’s implementation in November 2018, Maynilad said it had installed 745 meters of interceptor pipes along Estero dela Reina and Estero San Antonio Abad that benefitted more than 19,400 residents.

“As long as solid waste can be managed well at the household level, it will not pollute these same esteros that we are trying to clean. That will ensure that our investment in new sewer lines will not go to waste,” Mr. Estrello said.

Meanwhile, the water provider said it is also constructing new sewerage treatment plants in Valenzuela City and Muntinlupa City to add to its 22 operational wastewater facilities.

Maynilad provides water for areas in the west zone of the National Capital Region such as Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon, Manila, Makati, and Quezon City; and parts of Cavite province such as Bacoor, Imus, Kawit, Noveleta, and Rosario.

Metro Pacific Investments Corp., which has majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

Hong Kong Disneyland loses right to land near theme park

WALT Disney Co.’s Hong Kong Disneyland Resort lost an option to expand its site after local authorities decided not to renew an agreement with the amusement park to develop a neighboring plot of land.

Hong Kong won’t extend the 20-year purchase option, which expires Thursday, due to “the current economic conditions,” according to a statement Wednesday on the government website. A 60-hectare patch of land next to the theme park was reserved since 2000 to allow for possible expansion.

It would be more “prudent” for the theme park operator to focus on developing the existing resort, a spokesman for the Commerce and Economic Development Bureau said in the statement.

The move underscores changing priorities for Hong Kong as it tries to revive its economy battered first by the anti-government protests and then by the coronavirus disease 2019 (COVID-19) outbreak. Waves of challenges have badly hurt the city’s tourism sector and major attractions such as Hong Kong Disneyland have been closed for most of the year.

‘EXTREMELY DISAPPOINTED’
Disney “will continue investing in the current expansion plan, however, we are extremely disappointed with the Hong Kong government’s decision not to extend the phase 2 land expansion option,” a Hong Kong-based company spokeswoman said in an e-mail.

Disneyland’s plan to expand within its existing Hong Kong site aimed at adding at least one new attraction almost every year through 2023, according to a paper submitted by the city’s legislative council in June. The plan was estimated in 2016 to cost HK$10.9 billion ($1.4 billion), according to the document.

The theme park in Hong Kong is run by a firm that’s jointly owned by the local government and Disney. It’s scheduled to reopen on Friday with reduced capacity and enhanced health and safety measures.

In January, Hong Kong’s Secretary for Transport and Housing Frank Chan said that he wanted to build temporary residential units on this site, urging Disney to consider its “corporate social responsibility.”

Some local tycoons, criticized by state-run media for helping drive up home prices, have offered to donate land or cash to the government to avert any backlash from Beijing. — Bloomberg

Krungsri, Security Bank deal gets PCC approval

THE Philippine Competition Commission (PCC) has approved the acquisition by Thailand-based Bank of Ayudhya Public Co. Ltd. of 50% of the outstanding capital stock of Security Bank Corp.’s consumer finance subsidiary.

Security Bank told the Philippine Stock Exchange on Thursday that it had received the commission’s approval of the deal. Bank of Ayudhya — better known as Krungsri — will own 50% of SB Finance Co., Inc. while the listed universal bank will keep a 49.54% stake.

PCC in a statement on Thursday said that the transaction is unlikely to lead to a substantial lessening of competition. It said that there would be enough competitive constraints on the merged entity, noting that many competitors, including banks and other financial institutions, offer loan products.

“Given the limited market share of the merged entity, PCC also determined that the parties behind the transaction would have no incentive to raise interest rates and decrease the quality of services unilaterally,” the commission added.

PCC will take no further action on the deal.

Bank of Ayudhya’s parent entity is Japanese banking corporation Mitsubishi UFJ Financial Group, Inc. In the Philippines, Mitsubishi UFJ runs MUFG Bank, Ltd. and Acom Consumer Finance Corp., which offers unsecured personal loans.

Last year, Security Bank signed a partnership with Krungsri to further expand its retail services offered to Filipinos using the foreign bank’s strategies.

Krungsri is the fifth-largest bank in Thailand based on assets, loans, and deposits. It also has a regional network of 698 branches, including those in Laos, Myanmar, and Cambodia.

“By localizing the strategies that propelled Krungsri to become Thailand’s market leader in consumer finance, SB Finance is well positioned to scale the business faster, launch better and more innovative product variants, serve more customers,” Security Bank President and CEO Sanjiv Vohra said.

Security Bank posted total loans and receivables of P449.6 billion in the first half, down by 0.2% from P448.6 billion in end-December 2019.

The bank plans to develop more digital tools in addressing the financial needs of consumers as the coronavirus pandemic persists. It reported a 170% expansion in online banking usage from March to August when stricter lockdown policies were imposed to help contain the spread of the virus.

PCC continues to review transactions entered into by entities before the implementation of the Bayanihan to Recover as One Act, or Bayanihan II.

Under Bayanhian II, parties involved in mergers and acquisitions with transaction values below P50 billion are exempt from notifying the commission in the next two years. — Jenina P. Ibañez and Kathryn Kristina T. Jose