Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 7632

Nationwide round-up

VP Robredo recommends realignment of P29.5-B DepEd budget

VICE-PRESIDENT Maria Leonor G. Robredo has recommended that the Department of Education’s (DepEd) P29.5-billion budget for school buildings this year be realigned to buy gadgets and equipment for distance learning. “Given the shift to distance learning, many of these school buildings will be left without children to occupy them, thus deprioritizing the need for the rehabilitation of physical spaces,” she said in an Aug. 10 letter to DepEd. Ms. Robredo also said part of the funds may be used to address health concerns of teachers. On top of this, she said in-service training this year, which shifted to online modalities, may have freed up resources meant to cover travel expenses from a P700-million allocation. The new school year opens Aug. 24 with no face-to-face classes allowed. Primary and secondary schools will be using various modes of instruction such as printed modules, radio and television programs, and online learning. Senator Sherwin T. Gatchalian, meanwhile, called for a reassessment of the Aug. 24 opening date, saying the distribution of modules “would be a very big issue,” especially in areas where there are still a high number of coronavirus cases. Mr. Gatchalian, who chairs the Senate’s basic education committee, also flagged the lack of guarantee in terms of testing and hospitalization coverage for teachers. — Charmaine A. Tadalan

Justice dep’t proceeds with Echanis murder probe

THE Department of Justice may now proceed with its probe on the killing of National Democratic Front of the Philippines consultant Randall Echanis after the police released the body on Wednesday, Secretary Menardo I. Guevarra said. “I understand that the PNP (Philippine National Police) has released the body to the Echanis family upon verifying that the deceased was indeed Randall Echanis,” the Justice chief told reporters. “In that case, the NBI (National Bureau of Investigation) need not do another verification, and the DoJ/AO (Administrative Order) 35 special investigation team may proceed to do its work.” Anakpawis party-list, which Mr. Echanis chaired, has lambasted the police for forcefully taking his remains even after his wife already confirmed the body’s identity. Police authorities, on the other hand, explained that a confirmation was necessary as the body was initially identified as Manuel Santiago based on an identification card found at the crime scene.

NOT THE TARGET
Meanwhile, Maj. Elmer Monsalve, head of the Quezon City Police Criminal Investigation and Detection Unit, said it is highly possible that Mr. Echanis was not the target of the killers but his companion, Louie Tagapia. The two were murdered inside Mr. Echanis’ rented apartment in Quezon City. Mr. Monsalve said their background investigation shows that Mr. Tagapia had just been released from prison on a drug-related case and was a member of the criminal Sputnik gang. — Vann Marlo M. Villegas and Emmanuel Tupas/PHILSTAR

Survey shows Filipinos among most worried over pandemic impact

FILIPINOS were the second most pessimistic over the impact of the coronavirus pandemic among Asian countries surveyed by Manufacturers Life Insurance Co. (Manulife). In a statement on Thursday, Manulife said the survey showed 58% of Filipino respondents expect the outbreak to escalate in the second half, higher than the regional average of 41%, and comes next to Indonesians who posted the highest rate. The Manulife Asia Care Survey asked 2,400 insurance policyholders in May, covering markets in China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore and Vietnam. Some 300 respondents were from the Philippines. Worries over the global health crisis prompted 46% of respondents to “review and manage personal finance more often than before” the pandemic hit. “Through this study, we are able to identify their concerns, priorities, and goals so we can provide the necessary solutions to help address our customers’ financial and health needs and help them live every day better,” said Melissa Henson, senior vice-president and chief marketing officer of Manulife Philippines. — Beatrice M. Laforga

BSP warns vs 1-year debt moratorium

BANGKO SENTRAL ng Pilipinas (BSP) Governor Benjamin E. Diokno on Thursday warned the proposed one-year debt moratorium for borrowers under the Bayanihan to Recover as One (Bayanihan II) measure will “significantly strain” the banking industry.

The central bank chief’s warning comes as the Bicameral Conference Committee is set to meet today (Aug. 14) to reconcile the provisions of Bayanihan II, a stimulus measure that would provide much-needed financial aid for sectors badly affected by the pandemic.

In an online briefing, Mr. Diokno said a one-year debt moratorium could lead to “unintended consequences that will severely affect the banking industry, the financial system and the economy.”

“It will significantly strain the liquidity of banks…The inability of a bank to service withdrawal may trigger a bank run and will undermine the confidence of the public in the banking system,” he said.

The House of Representatives on Monday passed on third and final reading House Bill No. 6953 or Bayanihan II. Under Section 3, lenders are “encouraged to extend the terms or agree to the restructuring of existing consumer loans of employees of non-essential businesses, commercial loans of non-essential businesses… and local government loans.”

This would cover loans whose payment dates fall due between March 16 and Dec. 31, 2020. The loan term may be extended for up to one year, and further extended by another year. Only principal payments may be suspended in case of a moratorium.

Under the bill, banks that will implement a debt moratorium will be entitled to regulatory relief including staggered booking of allowance for credit losses and exemption from loan-loss provisioning, among others.

Meanwhile, Senate Bill No. 1564 provides for a minimum 30-day grace period for loans with payments falling between March 16 and Dec. 31, 2020.

“While I keep saying that Philippine banking industry is sound, some banks might end up standing while others might be adversely affected,” Mr. Diokno said.

The BSP chief said a longer debt moratorium will push banks to adopt stricter underwriting standards, with some likely to even “completely deny credit to some sectors including MSMEs.”

Sought for comment, Senator Juan Edgardo M. Angara said the final version of Bayanihan II will not likely include the 365-day debt moratorium. 

“It won’t be 365 days (for the debt moratorium), the most it will be from the looks of initial talks is 90 days although 45 and 60-day periods have also been mentioned,” Mr. Angara told BusinessWorld in a text message.

A nationwide grace period was implemented for loan payments falling due during the Luzon-wide enhanced community quarantine (ECQ) that began on March 16. The grace period ended as restrictions eased starting June.

BSP Deputy Governor Chuchi G. Fonacier earlier told BusinessWorld banks continue to accommodate loan payment extensions on a case-to-case basis depending on their own assessments. She said any further grace period will be dependent on the provisions of the Bayanihan II once it is signed into law.

Bankers Association of the Philippines President Cezar P. Consing earlier said a mandated one-year debt moratorium will cause “liquidity problems and could threaten the viability of many banks.”

Fintech Alliance.ph on Tuesday also expressed opposition to the Bayanihan II’s provision, saying the debt moratorium could lead to the closure of financing and lending companies that are granting credit to the unbanked population.

BSP data showed gross nonperforming loans of banks rose to 2.53% in June, the highest in nearly six years. This is against the lending industry’s total loan book, which dropped 1.27% to P10.82 trillion in June.

The banking industry’s capital adequacy ratio stood at 12.73% as of June, well beyond the 10% minimum required by the BSP. — Luz Wendy T. Noble

Construction sector seen to slump by 10%

By Beatrice M. Laforga, Reporter

THE Philippine economy is unlikely to get the much-hoped for boost from infrastructure projects this year, as the construction sector is seen to shrink by up to 9.8% amid the pandemic, according to Fitch Solutions Country Risk & Industry Research.

In its Aug. 12 commentary, Fitch Solutions said it slashed its forecast for the Philippine construction sector to -9.8% year on year, from the previous projection of 2.9% growth, following the grim second-quarter economic data and rising number of coronavirus infections.

In the second quarter, gross domestic product (GDP) contracted by 16.5%, with the construction sector declining by 33.5% year on year. Luzon was placed under an enhanced community quarantine during most of the period, resulting in many construction projects being halted.

“We have turned bearish on the growth of the Philippines’ construction sector in 2020,” Fitch Solutions said.

For next year, Fitch Solutions raised its growth forecast for the industry to 9.5% on expectations that the country will contain the spread of the virus and normal construction activity will resume.

While the government is hoping infrastructure projects will drive economic growth, Fitch Solutions said the impact will only be felt in 2021 as it still needs to address “administrative hurdles” such as finishing feasibility studies, addressing right-of-way issues, and securing local permits.

This year, the pandemic’s impact will be seen in both the infrastructure and building construction sectors. Fitch Solutions slashed its 2020 forecasts for these sub-sectors to -7.8% and -10.6%, respectively.

“The infrastructure sector, often seen as an important engine of growth, is expected to take a backseat throughout the rest of 2020… Our forecasts are mainly underpinned by the belief the government will face increasingly tighter financial constraints as the pandemic drags on,” it said.

The think tank said reduced government infrastructure spending may delay some projects. Economic managers have cut anew this year’s infrastructure program to P785.5 billion, which accounts for 4.2% of gross domestic product (GDP).

“Although the financial contribution from the government towards ‘Build, Build, Build’ infrastructure projects do not account for a substantial portion of total project pipeline value, it nevertheless remains imperative to the development of projects given that strong government spending usually sends a positive signal to the rest of the sector, which could spur private investments,” Fitch Solutions said.

State spending on infrastructure declined 12.2% to P235 billion in five months to May.

Fitch Solutions said projects funded through the public-private partnerships (PPP) will also take a hit, noting arranging deals may be challenging this year.

“A potential upside risk, the progress of PPP transactions is the government’s proposal to lengthen the term of projects to increase financial viability, mentioned by Presidential Adviser for Flagship Programs Vivencio Dizon in late July 2020. The government is also exploring the possibility to defer the collection of its share of revenues until the normalization of project operations,” it said.

Fitch Solutions said the buildings construction faces a deeper slump as investments in housing, industrial and commercial sectors decline.

“In the residential sector, we expect the fall in income levels to reduce demand for housing and renovation, leading to a decline in housing construction activity. In the commercial and industrial sector, lower expected construction activity is expected to be caused by a reduction in capex in light of the economic uncertainty,” it said.

The think tank said downside risks to their 2020 and 2021 growth forecasts persist as it remains unknown on how long the pandemic will last.

“We have earlier alluded to the effects of a prolonged pandemic on the construction sector, and we continue to highlight the possibility of further cuts to the government’s infrastructure budget and reduced PPP activity in 2020 that would exacerbate the slowdown in the infrastructure construction sector,” Fitch Solutions added.

However, Charlie A. V. Gorayeb, the chairman of Chamber of Real Estate and Builders’ Association (CREBA) in the Philippines, expects the construction sector to be resilient.

“We don’t see the construction section declining, specially in the real estate industry, considering the size of the market and need of the housing sector,” Mr. Gorayeb said, noting that there is currently a backlog of 6.7 million housing units.

“It may undergo a slight adjustment in the interim but not as huge decline as in the other sector of the economy,” he added.

Shell to shut down Batangas refinery

PILIPINAS SHELL Petroleum Corp. is permanently closing its refinery in Batangas province, saying its operations are no longer “economically viable” as margins worsened amid the coronavirus crisis.

At the same time, Energy Secretary Alfonso G. Cusi said  Pilipinas Shell’s decision to shut down the 110,000-barrel-per-day Tabangao refinery “will not affect the oil supply in the country.”

“The regional refining margins which have been weak for some time due to the oil supply/demand imbalance in the region, have worsened due to demand destruction from the (coronavirus) crisis. As such, it is no longer economically viable for us to run the refinery,” Pilipinas Shell President and Chief Executive Officer Cesar G. Romero said in a statement.

Pilipinas Shell said the facility in Batangas will be converted into a world-class import terminal, noting the shift to an imports-based supply strategy would not affect its supply capability. Details on the planned import terminal were not available.

The refinery has been shuttered since May 24 to help the company preserve cash, and to insulate it from the further decline in refining margins.

However, Department of Energy’s (DoE) Mr. Cusi expressed concern for the workers who will be displaced because of the refinery’s closure. “I hope they will find employment with the other industry players,” he said. 

Mr. Romero said the company will ensure employees “directly impacted by the transition are well taken care of,” but did not provide details.

The planned import terminal will still supply fuel products in Luzon and the northern Visayas, while the North Mindanao Import Facility in Cagayan de Oro will cater to Visayas and Mindanao markets.

“Shell remains committed to the Philippines and will pursue opportunities where we can leverage our global expertise in line with our growth strategy,” Mr. Romero said.

The Tabangao facility started commercial operations in 1962. It is one of two refineries in the country, both of which have shuttered operations as the lockdown affected oil demand.

Demand for petroleum products plunged during the lockdown, by as much as 80% in April versus February levels.

Petron Corp.’s 180,000 bpd facility in Bataan has been temporarily shut since May 5. Petron Chairman Ramon S. Ang on Thursday said the company will resume the operations of the refinery on Sept. 1.

“We have advised the DoE that we are now doing preparatory work at the Petron Bataan Refinery, for the resumption of operations on Sept. 1,” Mr. Ang told reporters via Viber.

Q2 LOSS NARROWS
In a disclosure to the stock exchange, Pilipinas Shell said it estimated an after-tax asset impairment of P6 billion from the closure of the Tabangao facility, which will be reflected in its third-quarter profit report.

Pilipinas Shell swung to a net loss of P1.2 billion in the second quarter, from a P1.4-billion profit a year ago. However, the second-quarter loss was narrower than the P5.5 billion in the first quarter, on slightly improving prices of crude oil and finished products.

For the first six months, Pilipinas Shell’s net loss stood at P6.7 billion from a P3.73-billion profit a year ago.

The listed fuel company remains “cautious” about the slight recovery in volume and earnings given the spike of coronavirus infections in the Philippines and the recent return to a stricter lockdown in Metro Manila and adjacent provinces.

The company so far was able to save P1.3 billion from capital and operating expenditures, P700-million short of its 2020 target savings.

Meanwhile, the company also decided to cancel dividend payouts this year to preserve cash.

Shares in Pilipinas Shell fell by 4.11% to close at P16.78 each on Thursday. — Adam J. Ang

Shares in Ayala-led AREIT tumble in market debut

SHARES of Ayala-led AREIT, Inc., the country’s first real estate investment trust (REIT), tumbled in its market debut on Thursday.

AREIT’s shares closed 7.78% lower at P24.90 apiece from its offer price of P27, while the Philippine Stock Exchange index (PSEi) closed 1.71% higher on Thursday.

Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said there were “some technical issues with the brokers,” which contributed to the slump in AREIT’s share price.

“And also, the market was followed by uncertain sentiment. I think that the price discovery towards AREIT factored in also to the drop in share price,” he said.

At the listing ceremony, Finance Secretary Carlos G. Dominguez III said Ayala Land, Inc.’s (ALI) REIT public offering signals that the market is ready to resume business after the challenges brought about by the coronavirus pandemic.

“This public offering is a strong vote of confidence in our good economic prospects and in the resiliency of many of our industry sectors, some of which will be occupants of ALI’s REIT properties,” Mr. Dominguez said.

“It shares in the optimism that, notwithstanding the global economic downturn today, the Philippine economy has strong fundamentals to rise quickly from the devastation brought about by the global health emergency,” he added.

AREIT’s portfolio consists of three office buildings in Makati City: 24-storey commercial building Solaris One, mixed-use development Ayala North Exchange and five-storey commercial office McKinley Exchange.

“This global pandemic has indeed plunged the world into a recession. However, the Philippine capital markets are still looking hopeful with the introduction of the REIT as a new investment product,” Securities and Exchange Commission Chairman Emilio B. Aquino said.

Mr. Aquino said he hopes there will be a “capital boom” in 2021. — Arjay L. Balinbin

Pandemic hits Ayala with 79% profit fall

AYALA Corp.’s attributable income in the first semester took a 79% dive to P7.9 billion as the coronavirus pandemic caused its real estate business segment to limit operations while bloating the loan-loss provisions of its banking unit.

In a regulatory filing on Thursday, the listed conglomerate posted P100.31 billion in total revenues between January and June, which is 30% lower year on year.

By business segments, Ayala Land, Inc. suffered the biggest profit decline at 70% to P4.5 billion due to reduced project bookings, suspended construction activities, restricted mall operations and temporarily closed resorts.

Its banking arm Bank of the Philippine Islands, Inc. (BPI) reported a 15% drop in net income to P11.7 billion as it reserved P15 billion in provisions for the potential adverse impact of the coronavirus pandemic to nonperforming loans.

Globe Telecom, Inc.’s income fell by 5% to P11.5 billion as more network investments raised depreciation expenses.

Ayala Corp.’s power arm AC Energy, Inc. posted an income of P4.5 billion, down 80.6% compared with P23.2 billion in the first half of 2019, mainly from partial divestment of its thermal assets.

Leading its industrial technologies business, AC Industrials shed P1.8 billion as the pandemic affected both global manufacturing industry and the Philippine automotive space.

Integrated Micro-Electronics, Inc. (IMI) also reported a loss of $21.5 million with a quarter slump in revenues following its plant shutdowns in the Philippines, China and Mexico due to quarantine policies.

AC Motors incurred a P575-million loss due to the demand crash. Via Optronics and STI, Ltd. netted combined revenues of $109 million in the period.

“While the health crisis has stifled the momentum of some of our businesses, we have started to see positive trends in the operations of BPI, Globe and Ayala Land since the easing of quarantine restrictions in June,” Ayala Corp. President and Chief Operating Officer Fernando Zobel de Ayala said.

Mr. Zobel noted the “unprecedented growth” of BPI Online and GCash over the past five months, as the country further adopted online financial services amid the crisis.

Year to date, the company spent P8 billion in capital expenditure, mostly for its new businesses. It recorded P93.8 billion in net debt, while cash at the parent level stood at P28.3 billion.

The Ayala group actively accessed both domestic and foreign capital markets during the public health crisis, expecting to raise $3 billion in combined proceeds, according to Ayala Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala.

Ayala Land and BPI already scored $1.2 billion from their bonds offering. An additional $1.8 billion will come from Ayala Land’s real estate investment trust offer, the first in the local bourse, BPI’s CARE bonds, Globe’s bonds, and Manila Water’s sustainability bonds

Shares in Ayala Corp. increased by 1.89% to close at P753 each on Thursday. — Adam J. Ang

Manila Water earnings up 1% to P2.5 billion

EAST ZONE water concessionaire Manila Water Co., Inc. posted a 1% increase in its net income for the first half of the year to P2.48 billion, amid weak performances from its subsidiaries.

In a disclosure to the stock exchange on Thursday, the water provider said its total revenues rose 3% to P10.88 billion against P10.53 billion in the same period last year.

Manila Water said the net income for its concession amounted to P3.04 billion while the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 6% to P6.32 billion.

The company’s Manila Water Philippine Ventures (MWPV) posted a net loss of P208 million resulting from increases in its direct, personnel and overhead costs.

“Several of MWPV’s core subsidiaries experienced a notable decline, with businesses and commercial accounts being affected by the enhanced community quarantine,” the disclosure said.

Meanwhile, the water company’s international business ventures under Manila Water Asia Pacific (MWAP) recorded a net loss of P320 million, caused by weaker performance of Saigon Water and East Water.

“Even amid the challenges posed by the COVID-19 pandemic, Manila Water worked to maintain business operations while safeguarding the health and safety of employees and customers,” the disclosure said.

“Critical facilities remained operational to ensure water availability, as business support and leak repair/maintenance works continued in response to customer concerns,” it added.

Manila Water President and Chief Executive Officer Jose Rene Gregory D. Almendras said the company is pushing forward with its operations despite the coronavirus disease 2019 (COVID-19) pandemic.

“It’s been very challenging for us to work under the conditions posed by the COVID-19 pandemic, but we persevere because we know that we provide an important and basic service. In the end, we know that the solutions we develop to overcome these challenges, will help us serve our customers even better,” Mr. Almendras said.

On Thursday, shares of Manila Water rose 0.61% or P0.08 to close at P13.16 per share. — Revin Mikhael D. Ochave

Megaworld says 56% profit drop still ‘manageable’

MEGAWORLD CORP. saw its second-quarter net income dive by 56% to P2.1 billion as the coronavirus pandemic-induced lockdown affected its businesses.

The decline brought down its net profit in the first six months of 2020 by 34% to P5.9 billion with total revenues sliding by more than a quarter to P23.8 billion compared to its 2019 first-half record, the property developer said in stock exchange disclosure, Thursday.

However, the quarter profit drop “wasn’t as bad” as expected, and remains “manageable,” according to Megaworld’s Chief Strategy Officer Kevin L. Tan.

Megaworld’s leasing business, which delivered a 78% share to its rental income, is its only segment that saw improvements in earnings. Megaworld Premier Offices earned P5.6 billion between January and June, a 10% increase over a year ago, offsetting the impact of the partially shuttered Megaworld Lifestyle Malls.

“Our strategic decision of further strengthening our office leasing business way before the pandemic started is now evidently making us more resilient,” Mr. Tan said.

Megaworld is set to complete five more office developments by year’s end, adding 213,000 square meters to its portfolio of completed leasable offices. These include: Iloilo Business Park in Iloilo City, Arcovia City in Pasig City, Westside City in Parañaque City, McKinley West and Uptown Bonifacio in Taguig City.

So far, these ongoing projects are already 90% pre-leased on average.

Mr. Tan noted that business process outsourcing (BPO) firms and traditional offices, including the headquarters of multinational companies, still occupy around 90% of its spaces.

However, it is closing some deals from BPO companies in Metro Manila that are expanding in provincial townships, where quarantine policies are more relaxed to continue operations.

“Our current portfolio of active BPO tenant partners is still huge, and these are our first-line takers in our provincial developments,” he said.

By yearend, the listed property developer will have 70 completed offices covering 1.4 million square meters of inventory, sans those units sold.

Overall rental income in the first semester went down by over a tenth to P7.2 billion year on year.

Meanwhile, Megaworld recorded a 29% decline in hotel revenues to P917.9 million. During the lockdown, it operated 10 hotels with around 3,500 rooms serving pre-booked guests from BPO firms and returning overseas workers.

It claimed reservation sales peaked during the quarter, hitting P38 billion, despite the quarantine restricting selling activities for residential projects.

Enforcing more flexibility in payment terms brought its real estate sales in the first half down by 29% to P14.3 billion.

Shares in Megaworld slightly went up 1.01% to close at P3.01 apiece on Thursday. — Adam J. Ang

Tokwifi named best film in Cinemalaya 2020

FILIPINA filmmakers took the majority of the awards at the 16th Cinemalaya Independent Film Festival with Carla Pulido Ocampo’s Tokwifi winning Best Film.

Tokwifi, a short film about a Bontoc Igorot meeting and falling in love with an actress from the 1950s stuck inside an old TV set, won not only the Best Film award but also the NETPAC Jury Prize.

The film’s Best Film citation read that it had won “For its highly original take on love between two persons coming from different areas and worlds, and how identity and tradition could best be bridged by common humanity.”

The decision was unanimous according to filmmaker and film producer Jeannette Paulson Hereniko, chairman of this year’s Cinemalaya jury, during the awarding ceremonies held via Zoom on Aug. 12.

The jurors also lauded the film’s “magical but very convincing depiction of how women are boxed into stereotypes by television and how cultural communities are reduced into backward primitivism by the media.”

Joanna Vasquez Arong’s contemplative take on the destruction brought upon by Typhoon Haiyan/Yolanda in 2013, Ang Papakalma sa Unos (To Calm the Pig Inside), won the Special Jury Prize in this year’s Cinemalaya.

The film won “For its moving account through the eyes of a child of the ravages wrought by the strongest typhoon ever recorded in human history,” the film’s citation read. The jury also took note of the film’s “poignant poetry.”

The Best Direction award was given to Martika Ramirez Escobar who directed Living Things, for being able to weave a “whimsical, convincing tale of how two people in love [face] the challenges of change [with] even more love and devotion.”

Aside from it being a big night for women filmmakers, it was also a big night for filmmakers from the regions outside the National Capital Region. Tokwifi is from Bontoc, Mountain Province; Ang Papakalma sa Unos is from Cebu and featured Tacloban, Leyte, and Guian, Eastern Samar; Quing Lalam Ning Aldo (Under the Sun) by Reeden Fajardo, which won the Audience Choice Award, is from Pampanga; and Pabasa kan Pasyon by Hubert Tibi, which won Best Screenplay, is from Albay.

This year’s Cinemalaya jury was headed by Ms. Hereniko with filmmakers Sari Dalena and Raymond Red as members.

Cinemalaya continues its run until Aug. 16 online via Vimeo. For tickets and access to the films, visit cinemalaya.org/tickets. Tickets are priced from P75 for a film bundle to a P350 premium pass.

Below is the complete list of winners:

Best Film: Tokwifi by Carla Pulido Ocampo

Special Jury Prize: Ang Papakalma sa Unos (To Calm the Pig Inside) by Joanna Vasquez Arong

Best Direction: Martika Ramirez Escobar for Living Things

NETPAC Jury Prize: Tokwifi by Carla Pulido Ocampo

Best Screenplay: Pabasa Kan Pasyon by Hubert Tibi

Audience Choice Award: Quing Lalam Ning Aldo (Under the Sun) by Reeden Fajardo. — Z.B. Chua

SEC extends annual report filing date

THE Securities and Exchange Commission (SEC) is once again giving companies more time to submit their annual reports and general information sheets amid the coronavirus pandemic.

Corporations with fiscal years ending Nov. 30 to Dec. 31, 2019 must file their annual financial statements by Sept. 30, regardless of their SEC registration or license numbers, the SEC said in a statement on Thursday.

The SEC last month asked publicly listed companies and those with registered securities to notify the commission of their inability to file their annual and quarterly reports after the lapse of the deadline that was extended to June 30.

The regulator had previously given the companies a 60-day deadline extension after noting that companies were unable to submit reports during the lockdown.

Corporations whose fiscal years ended between Jan. 31, 2020 and June 30, 2020 now have another 30 days from their previously adjusted deadline to file their reports.

The new deadline for fiscal year ending Jan. 31 , 2020 is on Aug. 28. Companies with fiscal years ending Feb. 29, March 31, and April 30 will have filing deadlines on Sept. 28, Oct. 27 and Nov. 11, respectively.

Firms with fiscal years ending on May 31 and June 30 will submit on Nov. 11 and Oct. 28, respectively.

Corporations that held their annual stockholders meetings during the enhanced community quarantine (ECQ) and modified enhanced community quarantine (MECQ) in Metro Manila have until Sept. 30 to submit copies of their general information sheets. They must submit the printed copies to the SEC main or extension offices.

Submissions must be done through courier services, including express delivery services or through the Philippine Postal Corp.

In the meantime, the corporations may submit scanned copies of signed and notarized reports through e-mail.

The SEC in March issued a memorandum circular extending the deadlines for the filing of annual reports for companies that were unable to submit due to quarantine restrictions.

Companies that operate domestically were given until June 30 to submit their documents, while those that have foreign operations had until 60 days to submit from the day travel restrictions are lifted. — Jenina P. Ibañez

Disney’s CEO is scrapping once-sacred businesses

WHEN Walt Disney Co. announced that it had closed more than 20 foreign TV channels last week, Chief Executive Officer Bob Chapek looked like he was taking the knife to a big chunk of the company’s international audience.

The move would have been unthinkable a few years ago. But Mr. Chapek — less than six months after succeeding longtime CEO Bob Iger — is using the COVID-19 crisis to transform Disney much faster than expected, all with an eye toward making the company an online juggernaut that reaches far more people worldwide.

Besides scrapping the networks, he shut down a musical version of the animated film Frozen that opened with much fanfare on Broadway two years ago, closed a chain of English-language schools in China, and scaled back a $1-billion resort-technology project that has largely been replaced by a simple mobile-phone app.

“He’s going to be looking in every corner where they can save money,” said Dave Heger, an analyst who follows the company at Edward Jones and recommends buying Disney stock. “Considering what Disney is dealing with, he’s the right guy to have at the wheel.”

With the global pandemic crippling Disney’s theme-park, movie, and TV businesses, Mr.  Chapek’s first months atop the world’s largest entertainment company have been anything but a honeymoon.

The broad-shouldered, 61-year-old Indiana native jumped in with characteristic zeal, making big changes to cope with the crisis and the tectonic forces reshaping the company’s core businesses. The decisions came large and small. Disney shuttered its theme parks in March, anchored its cruise ships, and furloughed some 100,000 workers. Revenue slumped 42% last quarter, hurt by the closed businesses and loss of advertising sales at networks like ESPN and ABC.

But the biggest strategic shift is unquestionably Disney’s push into online video. Mr. Chapek provided a clue to what was coming in June, when the company said it was removing the Disney Channel TV networks from pay-TV systems operated by Virgin Media and Sky in the UK and putting the programming on the new Disney+ streaming service instead.

It turns out that was part of a much broader move announced last week — affecting many of the people who see the company’s programming outside the US.

The company shut down more than 20 international channels, took a $4.9-billion charge against earnings, and will instead expand its worldwide streaming operation. Mr. Chapek introduced a new online service using the Star brand internationally that will feature content from Disney networks like ABC and FX.

He also said he’d make Mulan, the live-action remake of the 1998 animated hit, available to purchase for $30 on the Disney+ service at the same time it’s released in theaters.

NEW OPPORTUNITIES
“Like many companies, we’ve had to find innovative ways to conduct our business during the pandemic,” Mr. Chapek said on an earnings call. “While we view this as a devastating situation for everyone affected, it’s also forced us to consider different approaches and look for new opportunities.”

Disney shares plunged in February and March as the pandemic hit business after business, but they’ve staged a comeback. After hitting a low on March 23, the stock is up more than 50%.

Since joining Disney in 1993, Mr. Chapek has risen up the ranks, finding new ways to squeeze additional profit from the company’s many businesses. At the home-video division in the 1990s, he worked on the “vault” strategy, where classic Disney films were released only occasionally on videocassette and later DVD, often with extra features that enticed customers to buy them over and over.

As head of consumer products, he let go dozens of workers and restructured the operation around big franchises, just in time to see the explosion in demand for Frozen dresses and related merchandise. Given command of the theme parks in 2015, Chapek introduced variable ticket pricing, lifting admission to as much $159 a day, and brought alcoholic beverages to Disneyland, along with the new Star Wars-themed lands that opened last year.

Walmart, Inc. CEO Doug McMillon said he can remember touring stores with Mr. Chapek and coming away impressed by his customer focus and creativity. “He’s someone who invests the kind of time and energy it takes to get into the details of a business and really understand it,” Mr. McMillon said in an e-mail.

Mr. Chapek pushed hard for new projects in Disney resorts, such as a totally immersive Star Wars-themed hotel in Florida and an Avengers-inspired area that was supposed to open in California this summer. With the pandemic, he’s reduced capital spending by $700 million this year.

In his rise to the top, Mr. Chapek bested other contenders, including the likable former chief financial officer and parks chief Tom Staggs and the hard-charging dealmaker and former corporate strategist Kevin Mayer.

In an interview in February, Mr. Iger, 69, said he thought the time was right for a transition, with the company completing its $71.3-billion acquisition of Fox’s entertainment assets and launching its big family-focused streaming service. Having assembled that massive collection of entertainment properties, he wanted someone to make sure it ran efficiently.

“I really needed to turn over the reins to Bob, to someone else so that they can essentially run the company from day to day and free me up to do what I think should be the priority at this point,” Mr. Iger told Bloomberg TV’s Emily Chang.

Mr. Iger’s official role as executive chairman is to oversee creative endeavors at Burbank, California-based Disney. He’s done some of that, helping get a filmed version of the Broadway show Hamilton on Disney+ on an accelerated timetable and negotiating with the National Basketball Association to host the rest of its season at a Disney facility in Florida.

But Mr. Chapek is beginning to get out from beneath Mr. Iger’s shadow. The ex-CEO wasn’t even on Disney’s last earnings call with analysts — a surprise to some who expected Mr. Iger to keep a tight hold on the company.

With the pandemic still raging — and film and TV production only starting to come back — it’s still too early to say what the Chapek era will look like. Jeffrey Sonnenfeld, a management professor at Yale University who has followed Disney for years, noted that Mr. Iger was dismissed early in his 15-year tenure as a suit without any creative chops. Disney’s new CEO may yet overcome a similar image today, he said.

“You get a sense they really know what they’re doing, that they’ve got a plan,” Mr. Sonnenfeld said. “There’s just an infectious enthusiasm from a guy who’s not a backslapper. It’s the classic tough act to follow and he’s doing a magnificent job.” — Bloomberg

Bloomberry incurs loss on gaming suspension

BLOOMBERRY RESORTS CORP. posted a P4.7-billion loss in the second quarter, reversing its P2.46-billion net profit attributable to equity holders a year ago, as its gaming operations remained suspended.

In a disclosure to the stock exchange on Thursday, the listed operator of Solaire Resort & Casino recorded a 92% decline in consolidated revenues to P940.9 million, compared with the P11.6 billion it earned in the same quarter in 2019. This brought its first-semester net revenues down by more than half to P10.4 billion.

It shed P3.3 billion between January and June, compared with a profit of P4.7 billion in the same period a year ago.

The Razon-led firm recorded a 97% decline year on year in consolidated gaming revenues to P327.7 million in the April-June period, or 96% lower compared with the previous quarter. This brought its earnings in the first six months of the year down 57% to P8 billion.

Solaire’s gross gaming revenues decreased by 95% in the second quarter to P686.6 million. It earned P121.7 million from its VIP gaming tables, lower by 98%, while its mass tables and slot machines booked P303.7 million and P261.1 million in revenues, respectively.

The government allowed limited dry-run gaming operations at Solaire starting June 15 when Metro Manila was placed under general community quarantine. Select invited guests were accommodated during the period. Still, the integrated resort is still not open to the public.

Solaire Korea’s Jeju Sun Hotel & Casino did not earn from gaming operations in the quarter as its business remained suspended since March 21. Its first-half earnings plunged by 76% to 93.1 million.

Bloomberry’s other business segments, including food and retail, recorded a 69% drop in combined revenues to P613.2 million in the April-June period, pulling down its first-semester figure to P2.3 billion.

Solaire’s non-gaming revenue went down 69% to P610.6 million in the quarter. It noted a hotel occupancy rate of 14.5%, compared with 89.4% a year ago and 67.4% in the first three months of 2020.

Non-gaming business at Jeju Sun earned P2.6 million or a decrease of 89%.

Limited operations in both Solaire and Jeju Sun led the company to further cut its cash expenses in the second quarter to P2.7 billion, or lower by 54% compared with P5.8 billion in the first quarter.

Weathering the pandemic’s impact and securing the health and safety of its employees and guests remained as the company’s top priorities around this time, said Bloomberry Chairman and Chief Executive Officer Enrique K. Razon, Jr.

The company official said the Solaire North project, which is set to be its second integrated resort in the Philippines, is still pushing through, believing that its launch “will coincide with a meaningful upcycle that is typical after a period of economic weakness.”

“We look to emerge from this crisis as a much stronger company,” Mr. Razon added.

On Thursday, shares in Bloomberry decreased by 2.38% to close at P6.15 each. — Adam J. Ang

1...7,6317,6327,633...12,677Page 7,632 of 12,677
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube