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House panel extends estate tax amnesty by two years

By Charmaine A. Tadalan, Reporter

THE House Ways and Means Committee approved on Monday a measure extending the estate tax amnesty program by another two years, in light of the ongoing coronavirus pandemic.

House Bill (HB) No. 7068 extends the effectivity of the estate tax amnesty to four years from the original two years under Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019.

RA 11213, which took effect on May 31, 2019, gave a one-time opportunity for taxpayers to settle unpaid estate taxes as of Dec. 31, 2017. It gave interested parties until May 31, 2021 to avail of the estate tax amnesty.

If passed into law, taxpayers can avail of the estate tax amnesty through 2023.

“The amendment to RA 11213 will enable those who want to take advantage of this program ample time to recoup their resources and get back on their feet so they can still apply and pay their estate tax dues. This will also provide economic relief for many Filipinos at this time of crisis,” HB 7068 stated.

The Bureau of Internal Revenue (BIR) Assistant Commissioner Elenita B. Quimosing said the agency has collected some P1.3 billion from estate tax amnesty as of June, still far from the Finance department’s P6-billion target.

She said P3.403 billion was collected from the tax amnesty on delinquencies, falling short of the P21-billion target. The agency has collected a total of P4.765 billion so far from the two tax amnesty programs.

Baguio Rep. Mark O. Go moved for the approval of the extension of the estate tax amnesty to allow the BIR to meet its target.

“The conditions we have right now are reasons probably that we need to extend the availment of the estate tax,” Mr. Go said.

There is no counterpart measure filed in the Senate, but Senate President Vicente C. Sotto III said he is in favor of the extension of the estate tax amnesty.

Asked if he supports the measure, Mr. Sotto said in a phone message “yes, of course.”

In the same hearing, the House panel also tackled proposals to grant a general tax amnesty, which had been part of the original tax amnesty package until it was vetoed for lack of safeguards against tax evasion.

President Rodrigo R. Duterte vetoed the general tax amnesty for the absence of provisions lifting the bank secrecy for fraud cases and the automatic exchange of information, among others.

The substitute bill granted a general tax amnesty for one year on all unpaid taxes based on the 2018 statement of total assets, which may be availed either with a 3% or 20% rate.

“Kung 3% ka (If you avail the 3%), you will be subject to the examination of the BIR for a period of one year from the payment of the tax amnesty, pero kung (but if you go for the) 20% rate ang gagamitin mo, you will not be subject to the said examination,” House Ways and Means vice- chairperson and AAMBIS-OWA Rep.  Sharon S. Garin said.

Finance Assistant Secretary Dakila Elteen M. Napao said the general tax amnesty will allow individuals and companies with unpaid taxes but no pending cases, to have a “clean slate.”

“The amnesty will serve as a sort of a cleaning tool for the BIR on taxpayers,” he said.

Mr. Go, however, questioned the basis for the 20% rate, saying this may burden companies. He recommended to use the income as a basis, instead of the total assets.

“What is the basis of 20%? What we’re saying is the total asset of the company, medyo mabigat ’yun for them. Kung ang issue is the 2018 income nila, ’yun dapat ang basis, ’yung 2018 (that might be too heavy for them. If the issue is the 2018 income, that should be the basis),” he said.

Nueva Ecija Rep. Estrellita B. Suansing, presiding chairperson, asked the Finance department to come up with its calculation for other possible rates for deliberation in the next hearing.

The measure granting a general tax amnesty forms part of the administration’s comprehensive tax reform program. It was noted that collections from the measure will be used as additional funding for the coronavirus pandemic.

 

 

 

BTr eyes new Premyo bond offer

THE government is planning to offer Premyo bonds again, National Treasurer Rosalia V. de Leon said on Monday.

In a Viber message, Ms. De Leon told reporters the Bureau of the Treasury (BTr) will start working on the next Premyo bond offer concept.

Ms. De Leon said the next Premyo bonds will also use the Bonds.ph mobile application introduced during the recently concluded sale of retail Treasury bonds (RTB).

The government had raised a record high of P516.3 billion in RTBs early this month at a coupon of 2.625%. Around P48 million of five-year RTBs were bought through the Bonds.ph app that was downloaded nearly 25,000 times from 85 countries.

Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, Inc., said proceeds from another Premyo bond offer could be used to beef up the state’s coffers and support its fight against the coronavirus pandemic.

“This decision may be because of high liquidity. Moreover, this is inline with what economic managers are saying that this pandemic and battling its economic impact may not be just one big punch but may need endurance,” Mr. Asuncion said via Viber on Monday.

This will be the second offering of Premyo bonds, which is part of the government’s bid to attract more small investors to government securities. Last year, the BTr raised P4.961 billion from the sale of the one-year peso-denominated papers.

Currently, Ms. De Leon said the BTr is working on the remaining raffle draws from last year’s Premyo bond sales.

Premyo bonds are government securities that have corresponding raffle entries for cash and non-cash prizes, aside from earning interest.

With the Premyo bonds’ success, Ms. De Leon said in January that they may consider offering the short-tenored securities annually.

The government borrows from local and foreign lenders to plug its budget deficit seen to hit 9.6% of gross domestic product this year. It plans to borrow around P3 trillion this year.

In the first half, state borrowings reached P1.72 trillion, already exceeding the P1.02 trillion raised last year. — Beatrice M. Laforga

Sales of imported vehicles down 51% in seven months

Vehicle sales have been affected by lockdown restrictions in Metro Manila. – PHILIPPINE STAR /MIGUEL DE GUZMAN

IMPORTED vehicle sales for the first seven months of the year dropped by 50.9%, outpacing the Association of Vehicle Importers and Distributors, Inc.’s (AVID) expectation of a 40% sales slump for the full year, as the pandemic continues to dampen demand.

In a report released on Monday, AVID said the industry representing 21 member companies and 26 global brands sold 24,607 units in the seven-month period compared with the 50,151 sold last year.

Imported vehicle sales retained its month-on-month uptick, selling 5,100 units in July, or 38% higher than the 3,697 sold a month earlier.

The group said there has been an increase in passenger cars and subcompact SUVs sales because consumers are looking for safe mobility while public transport is restricted. Sales of small utility trucks and vans have also been rising.

AVID President Ma. Fe Perez-Agudo said the industry anticipated and prepared to adapt to the return to a stricter lockdown earlier this month. Metro Manila and nearby provinces are under a modified enhanced community quarantine (MECQ) until Aug. 18, although an announcement on new community quarantine levels is pending.

“Given that we have already bottomed out in the first semester, we believe the second half of the year will be better assuming there are no further lockdowns past Aug. 18,” she said. “Our focus now is to win back consumer confidence and give them the best value during these pandemic times.”

The automotive industry has been adopting digital tools to sell cars, including virtual showrooms.

Passenger car sales plummeted by 55% to 7,890 vehicles in the first seven months compared with the same period last year, with Hyundai Asia Resources, Inc. accounting for a bulk of the sales with 4,054 units.

Light commercial vehicle sales dropped by 48% to 16,561 units, led by Ford Group Philippines, Inc. which sold only 5,873 units or less than half of the 12,217 sold last year.

Commercial vehicle sales fell 73% to the 156 units sold by Hyundai Asia Resources, Inc.

Both local manufacturers and import distributors expect at least a 40% sales slump in 2020.

AVID’s full-year 2019 sales slipped 0.5% to 87,984 from an updated 88,430 units the year before.

Cars sold by manufacturers based in the country saw a 48.7% decline in the first seven months to 105,583 units sold compared with the same period a year ago, a joint report by Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) said last week.

Year to date, commercial vehicle sales dropped 47.6% to 75,514 units, while passenger car sales fell 51.4% to 30,069 units. — Jenina P. Ibañez

GDP to fall 9.1% this year — ANZ

An armed police officer patrols at a public market, where wearing face masks and face shields is mandatory, amid the coronavirus disease 2019 (COVID-19) outbreak in Taytay, Rizal province, Philippines, Aug. 11. – REUTERS/ELOISA LOPEZ

THE Philippine economy is set to shrink by 9.1% this year, weighed down by the fresh surge in coronavirus infections, a plunge in remittances and slow fiscal delivery, ANZ Banking Group’s research arm said on Monday.

ANZ Research’s latest outlook for the Philippines gross domestic product (GDP) is worse than its previous forecast of -2.5%, and lower than the government’s -5.5% projection.

“In terms of the trajectory, GDP growth is likely to contract by a slightly higher 9.2% y/y in H2 2020 compared with 9.0% in the first half,” ANZ Research Chief Economist Sanjay Mathur and economist Kanika Bhatnagar said in a note sent to reporters on Monday.

ANZ Research expects the economy to shrink by 11.5% and 7.1% in the third and fourth quarters, respectively, as the number of coronavirus infections continue to rise. This month, tighter restrictions were reimposed in Metro Manila and nearby provinces which have hurt consumer confidence.

“These restrictions have come at a time of tenuous recovery in household consumption since its trough in April. Real-time activity indicators capturing visits to retail and grocery stores stalled as soon as daily cases started rising in June,” ANZ Research said.

The Health department on Monday reported an additional 3,314 coronavirus cases, bringing the total to 164,474.

The pandemic also put a strain on economies where remittances of overseas Filipino workers (OFWs) are sourced. Over 21.65 million people have been infected by the coronavirus in more than 210 countries, a Reuters tally showed on Monday.

“While not totally unanticipated, we are seeing an unprecedented drop in remittances from OFWs. While the year-to-date fall of 6.4% in remittances appears benign, the monthly trend is clearly worsening,” ANZ Research said.

Cash remittances in May plummeted 19% year on year to $2.106 billion, the steepest decline in nearly two decades, latest data from the Bangko Sentral ng Pilipinas (BSP) showed. Year-to-date flows have also declined 6.4% to $11.554 billion. Cash remittances, which fuel consumption, could drop by 5% this year, the BSP said in June.

“The situation is unlikely to turn around any time soon as the industries employing most of the OFWs such as retail sales, recreation, and entertainment are still under strain from stringent social distancing rules and precautionary consumer behavior,” ANZ Research said.

More than 135,000 OFWs have been repatriated as of mid-August, according to the Foreign Affairs department.

SLOW FISCAL DELIVERY
At the same time, ANZ Research said the government’s “slow fiscal delivery” was another consideration in its weaker outlook for the Philippines. While state spending climbed 26.6% to P2.014 trillion in the first semester, it noted the figures hide the base effect of the weak spending last year due to the election season and the delayed 2019 budget passage.

“As such, the Philippine government has released less than half of its revised disbursements planned for the year. A front-loading of spending would have been more effective, in our view,” ANZ Research said.

The report also flagged the government’s slow infrastructure spending and frequent revisions to the list of priority projects.

Infrastructure spending decreased 4.3% year on year to P297.9 billion in the first half of the year amid disruption in construction activities during the lockdown, data from the Department of Budget and Management showed.

On the monetary side, ANZ Research said the central bank’s accommodative stance, which includes aggressive cutting of rates, have not led to lower market lending rates.

“Furthermore, credit growth has been weak in part due to commercial banks tightening credit standards and scaling back on credit lines,” it said.

The central bank has slashed rates by a total of 175 basis points (bps) this year, bringing down overnight reverse repurchase, lending, and deposit facilities at record lows of 2.25%, 2.75%, and 1.75%, respectively. It has also reduced the reserve requirement ratio (RRR) for big banks by 200 bps to 12% and by 100 bps for smaller lenders, reducing reserve requirements for thrift and rural banks to three percent and two percent respectively.

Despite this, lending growth in June continued to ease for the third consecutive month. Outstanding loans disbursed by universal and commercial banks inched up 9.6% in June, easing from the 11.3%  pace in the prior month, BSP data showed.

ANZ Research said it expects the country’s economy to grow by 8.4% by 2021. — Luz Wendy T. Noble

 

 

 

Lower costs, rival’s closure lift GMA

GMA NETWORK, INC.’s second-quarter attributable net income rose 31.7% to P826.36 million, boosted mainly by lower production costs and partly by a shift in advertising placements from rival ABS-CBN Corp.

In a regulatory filing on Monday, the network reported a 21.8% fall in revenues to P3.22 billion compared with the P4.12 billion posted in the same period last year.

The decline came despite the impact of the coronavirus quarantine restrictions on operations, as it cut production costs by 60% to P677.87 million, resulting in a 5.4% rise in the company’s gross profit to P2.54 billion.

The network said it also benefited from the absence of ABS-CBN’s broadcast operations whose legislative franchise expired in May.

Shares in GMA Network on Monday climbed 3.25% to close at P5.09 apiece.

“The shift in advertising placements resulting from the closure of the Company’s biggest and closest competitor (ABS-CBN) due to the expiration of its free-to-air broadcast franchise in early May provided some incremental revenues,” it said.

The network’s advertising revenues in the second quarter, when it started to receive advertisers from ABS-CBN, stood at around P2.96 billion, 8.9% lower than the P3.25 billion previously.

“The biggest drag came from the absence of political advocacies and advertisements this year, aggravated by the onset of the coronavirus pandemic or lockdown, which disrupted the business landscape across countries,” the network said.

“Meanwhile, this was partly cushioned by the improvement in online advertising sales, which grew by 23% during the first half of 2020,” it added.

In the first half, the company posted an attributable income of P1.4 billion, up 4.5% from the previous year, despite a 14.7% drop in gross revenue to P6.75 billion.

The network’s first-quarter net income declined 19.8% to P574.67 million. Total operating expenses decreased 4.3% to P2.69 billion.

GMA Network Chairman and Chief Executive Officer Felipe L. Gozon said last month the network would defer 30% or around P376 million of its capital expenditure (capex) budget for this year due to the pandemic.

In a disclosure to the stock exchange on June 30, the network said it had set a capex of P1.22 billion this year, which will be financed by internally generated funds.

The network is planning to launch more digital channels this year.

Mr. Gozon also said GMA is free of debt as of end-March, emphasizing its “ability to balance ratings growth with sound financials.” — Arjay L. Balinbin

GT Capital income falls as banking, auto units falter

GT CAPITAL HOLDINGS, Inc. recorded an attributable net profit of P197 million in the second quarter, or about 19 times lower than its bottom line in the same period last year, largely because of a deep plunge in its gross revenue.

In a regulatory filing on Monday, the Ty-led conglomerate reported a 75.6% fall in its quarterly gross revenue to P13.6 billion.

In the first semester, the holding firm posted an attributable net earnings of P2.74 billion, down 61.8% and pulled down by income declines in its banking and automotive businesses.

Its total revenues fell 47.8% to P52.62 billion in the first six months of 2020, compared with P100.75 billion a year ago.

Metropolitan Bank & Trust. Co. recorded a 30% drop in profit to P9.1 billion in the period as it raised loan provisions to P22.8 billion.

Toyota Motor Philippines Corp. netted P1.03 billion, more than four times lower than the P4.43 billion it earned a year ago.

It sold 35,648 units between January and June, lower compared with the 73,454 units sold a year ago. Despite this, Toyota still dominated the local industry with a 38.5% market share in the first semester.

“Digital initiatives were rolled out to provide platforms for car buyers to engage with dealers. Pent-up demand drove new vehicle sales in May, but in June, new reservations increased indicating an encouraging return of buyers to the market,” GT Capital Auto Dealership Holdings Chairman Vince S. Socco said.

“Smaller, more affordable vehicles were popular among those seeking alternative transport solutions. This underscores the essential nature of the auto and mobility sector in the drive to rebuild the economy,” Mr. Socco added.

Federal Land, the conglomerate’s property unit, also posted a lower income of P171 million in the first half, compared with P404 million last year. Its reservation sales expanded slightly by 3% to P9.1 billion, while lease revenues grew by 15%.

Metro Pacific Investments Corp.’s core income fell by 38% to P5.3 billion. This is attributed to a slump in contributions from its toll roads, rail services, water, and power businesses as their operations were affected by government-imposed quarantine policies.

GT Capital’s profits, though lower, were supported by income growth in AXA Philippines and Sumisho Motor Finance Corp.

The health insurance firm’s total life and general insurance gross premiums increased by 11% to P16.7 billion in the period, lifting its net income by 29% to P1.5 billion.

“During this period of uncertainty, GT Capital continues to practice fiscal discipline, resulting in a strong and stable balance sheet, adequate liquidity, and access to credit facilities, in case of need,” GT Capital President Carmelo Maria Luza Bautista said.

“Our Group’s solid core businesses make us well-positioned to ride out the impact of this pandemic,” the official said.

On Monday, shares in GT Capital grew by 5.74% to close at P424 each. — Adam J. Ang

PSE subjects small firms’ non-public shareholders to lock-up rule

THE Philippine Stock Exchange, Inc. (PSE) revised the lock-up rule for small, medium, and emerging (SME) companies to only cover non-public shareholders.

In a memorandum circular released on Monday, the local bourse said principal stockholders — or those holding at least a 10% interest in a firm, subsidiaries or affiliates, directors, principal officers, and others who can influence the company’s management are the only ones who are mandated to refrain from disposing of their shares for a one-year period from the shares’ listing.

Also subjected to the revised rule are their related parties, including the immediate families of principal stockholders, directors, and principal officers.

“All other stockholders shall not be subject to mandatory lock-up under this provision,” the circular read.

The PSE rule states that shares issued or transferred and fully paid within six months before the start of a firm’s public offering or prior to its listing date, if it is listing by way of introduction, and with a transaction price lower than the offer price, are subjected to a lock-up period of at least a year from listing. — Adam J. Ang

Fruitas incurs P27-million loss after ‘unprecedented’ sales fall

FRUITAS HOLDINGS, Inc.’s bottom line turned to a loss of P27.44 million in the second quarter as it saw an “unprecedented” sales decline during the period, the company said in a regulatory filing on Monday.

The listed food kiosk operator came from an attributable net income of P41.66 million in the same three months last year.

“The sales decline for the second quarter of 2020 was unprecedented as we had to suspend (the) operation of almost all of our stores because of the quarantine. It also coincided with the summer months, when our beverage sales peak,” Fruitas President and Chief Executive Officer Lester C. Yu was quoted as saying in a disclosure to the stock exchange on Monday.

In the first semester, Fruitas’ losses reached P12.35 million, reversing the P51.97-million net income a year ago. Revenues during the six-month period fell by more than half to P462.05 million from P941.19 million previously.

To manage the loss, it cut operating expenses by 40% to P249 million in the period. Its earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at P42 million, lower compared with P141 million previously.

As the government-imposed lockdowns eased in June, the company reopened stores “more cautiously.”

“For June, our sales were already back to 33% of last year, despite Fruitas only operating an average of about 45% of our store network throughout the month,” Mr. Yu noted.

“We will be a more profitable and productive company as the economy slowly reopens while realizing that a return to pre-pandemic levels will take time. We also continue to pivot our business model to derive more contribution from delivery and community stores,” he added.

The owner of Buko Juice, Jamaican Pattie, and Soy & Bean has firmed up the production capabilities of these best-selling brands for both open outlet and delivery platform, believing demand for them will expand soon as the country recovers from the pandemic.

“Better sales mix coming from products with lower direct costs allowed the company to improve gross profit margin for the first half of 2020 to 60%, compared to 58% during the same period last year,” it said.

Fruitas’ shares were unchanged at P1.18 each on Monday. — Adam J. Ang

AREIT to offer P15-B debt notes

AYALA-LED AREIT, Inc. is preparing to put up as much as P15 billion in debt securities.

The country’s first real estate investment trust (REIT) told the stock exchange on Monday that its board approved an upcoming filing of the debt notes with a three-year shelf registration to the Securities and Exchange Commission.

“This will provide AREIT the ability to leverage for future acquisitions while preserving cash for dividend distributions,” it said.

The company is set to release P0.59-per-share dividends from the first two quarters of the year on Sept. 15.

“AREIT provides investors regular dividend income derived from prime commercial properties, higher than most fixed-income instruments,” AREIT President Carol T. Mills said.

The REIT firm has a portfolio of three Grade-A properties in Makati City: Ayala North Exchange, Solaris One, and McKinley Exchange, which cover a total gross leasable area of about 153,000 square meters (sq.m.) with a 99.9% total occupancy rate.

It has also decided to pay out dividends on a quarterly basis. The planned distribution dates will be on or before March 31, June 30, Sept. 30 and Dec. 31 of the calendar year.

The REIT Act of 2009 provides for a distribution of at least 90% income of a REIT company to investors each year. AREIT’s dividend ratio, the company said, is higher than the prescribed minimum.

Meanwhile, AREIT said it is on track to buy Teleperformance Tower Cebu, a business process outsourcing (BPO) office property in Cebu IT Park, from Ayala Land, Inc.’s ALO Prime Realty. Upon acquisition, AREIT’s portfolio will rise to over 170,000 sq.m. by yearend.

Shares in AREIT soared by 7.68% to close at P25.95 on its third regular trading day. — Adam J. Ang

PLDT’s Pangilinan proposes standards to measure telco service improvements

PLDT, INC. is proposing internationally adopted standards to measure the improvements made by the telecommunications sector by December.

“We suggested the adoption of certain standards that are used by international independent rating agencies like Ookla or OpenSignal to measure us. In this regard, we are thinking of submitting an ideation paper to the government along these lines,” PLDT Chairman, President, and Chief Executive Officer Manuel V. Pangilinan said in a statement e-mailed to reporters on Monday.

In his fifth State of the Nation Address on July 27, President Rodrigo R. Duterte threatened to close or expropriate telco firms if they fail to improve their services by December this year.

Mr. Pangilinan vowed to improve PLDT’s services and further expand the coverage of its 4G and 3G networks.

“As of now, we have more than 95% of the population covered by 4G and 3G networks. We will try to cover higher than that, maybe up to 99%,” he said in a recent briefing.

Ookla, an internet speed surveyor, ranks mobile and fixed broadband speeds from countries around the world on a monthly basis.

“Internet measurements made with (Ookla’s) Speedtest occur at the times and in the places that are most relevant to the person taking the test. Each time a test is initiated, a snapshot of what the internet looks like in that place and time is recorded. When aggregated together, these individual experiences represent the typical internet performance for a given location,” Ookla explained in its Website.

Wireless coverage mapping firm OpenSignal said its measurements are “designed to capture as accurately as possible the experience of typical real users and are subject to all the factors that affect real user traffic, representing a wide base of users and devices.”

“Our scientific analysis processes these measurements to create the most accurate possible picture of user experience and how it varies between operators, regions and countries, as far as possible based only on measurements from real users,” it also said in its website.

PLDT reported recently that its second-quarter attributable net income grew 15.8% to P6.37 billion from P5.5 billion posted in the same period last year, driven by the surge in data and broadband revenues amid the coronavirus pandemic.

The telco giant said it would focus on LTE expansion, transport or backhaul rollout, and ADSL upgrade to fiber in the second half of the year.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

E-commerce boom to help drive demand for PHL logistics spaces

THE E-COMMERCE BOOM is fueling the demand for logistics spaces in the Philippines. – PHILIPPINE STAR/EDD GUMBAN

THE DEMAND for logistics space in the Philippines is expected to grow by 160,000 square meters per year in the next decade due to a spike in e-commerce demand, real estate services firm JLL Philippines said.

The company’s research found that there is 1.7 million square meters (sq.m.) in logistics space in the country — with 424,00 sq.m. expected to be completed next year.

Dry storage makes up two-thirds of the existing supply, while cold storage accounts for 21%.

“While there is a positive demand for logistics space in the country as reflected in the uptick in transaction activity in recent years, there is an increasing demand for better quality facilities, mostly from e-commerce firms and third-party logistics (3PLs) requiring high-specification warehouses that utilize technology and digital tools as part of their operations,” JLL Philippines’ Director for Industrial and Logistics Tom Over said.

JLL Philippines’ Head of Research and Consultancy Janlo de los Reyes, in a webinar last week, said the lockdowns have slowed down the real estate sector as construction activity was halted.

“Overall, we saw close to 350,000 square meters of office space that got deferred to the second half of 2020, and around 260,000 sq.m. in Metro Manila that will likely slip to 2021,” he said.

Average vacancy levels for offices increased by 9.1% in the second quarter of 2020 due to deferred business decisions from outsourcing, Philippine Offshore Gaming Operators, and corporations.

“We do anticipate that this sentiment will remain the same in the coming quarters and will translate to minimal change or movement in the office take-up,” he said.

The residential sector was also weakened despite landlords’ term negotiations.

Average Metro Manila residential rent fell by 14.9% quarter on quarter to P1,000 per month after leasing activities were slowed down by the pandemic.

Malls that have reopened are operating at 30% to 90% after restrictions were relaxed. The vacancy rate rose by the second quarter, after some stores closed permanently.

“We saw the supply slippage of around 60,000 sq.m. of shopping mall space in Metro Manila and Davao,” he said, while another 61,500 sq.m. is at risk of slipping next year.

Mall operators, he said, are focusing on growth in areas outside Metro Manila.

“We’ve seen overall declines in the rental values in Metro Manila, Metro Cebu, and Davao. So what developers have done now is that they’re offering much more flexible lease terms.” — Jenina P. Ibañez

Century Pacific extends ties with Linaco

FOOD MANUFACTURER Century Pacific Food, Inc. (CNPF) has forged a long-term agreement worth more than $50 million to be the original equipment manufacturer for Malaysia-based coconut producer Linaco Group.

In a stock exchange disclosure on Monday, it said that the two companies had agreed to boost volume commitments and expand the range of products that CNPF produces to meet Linaco’s increasing requirements.

Under the extended partnership, CNPF has an additional investment worth P300 million for the improvement of its coconut manufacturing capacity and to keep up with the international demand for high-value coconut products.

The pairing between the two manufacturers started in 2018, when CNPF signed up to be the original equipment manufacturer for Linaco’s coconut milk brands.

“The multi-year contract strengthens CNPF’s position as a leading and fast-growing player in the Philippine coconut industry and comes at a time when product health and safety continues to be top of mind among consumers amidst the ongoing pandemic,” the disclosure said.

Noel M. Tempongko, Jr., CNPF vice-president and general manager of integrated coconut operations, said the renewed partnership with Linaco bodes well not only for the company, but also for the coconut farmers in Mindanao, as they are given a stable market access for their products.

“We view this renewed partnership as a gesture of their continuing trust in our capabilities as a high-value coconut producer and supply partner,” Mr. Tempongko said.

Meanwhile, CNPF Executive Chairman Christopher T. Po said the company’s growing presence in the global coconut market is a part of its long-term plan to create a healthier and more diversified product lineup.

“We will continue to leverage on our manufacturing expertise, as well as our marketing and research and development capabilities, to capitalize on emerging global trends, and invest in our robust new product pipeline,” Mr. Po said.

CNPF is a supplier of global coconut water brand Vita Coco and offers several other coconut-based products such as desiccated coconut, virgin coconut oil, coconut flour and coconut milk.

On Monday, shares in CNPF fell 1.24% or P0.20 to close at P15.96 per share. — Revin Mikhael D. Ochave

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