No need for bicam if Senate passes ‘fiscally sound’ CITIRA — Salceda

May 21, 2020 | 12:32 am

THERE may be no need for a bicameral conference committee if the Senate passes a “fiscally sound” version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), according to House Ways and Means Chair and Albay Rep. Jose Maria Clemente S. Salceda.

“As long as the Senate’s final output is fiscally vetted, and without weird additions that threaten our financial position, we can go without a bicameral conference. We are confident that the House submitted a very reasonable and very sound first draft. As long as they don’t compromise the overall fiscal health of the country,” Mr. Salceda said in a statement on Wednesday.

The CITIRA bill, which is now renamed as the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), is still pending second reading approval at the Senate. Lawmakers are now scrambling to come up with a final version before Congress goes on recess on June 5.

Under CREATE, the corporate income tax (CIT) will be slashed to 25% in July, from the current 30%. The version approved by the House last year had sought to reduce the CIT to 20% over a decade.

“I broadly agree with the amendments. Actually, I proposed that we cut CIT faster to help COVID (coronavirus disease 2019) afflicted businesses even before the changes were made. So, with that critical input considered, it fits what I believe should be the tax policy counterpart of the economic recovery plan,” Mr. Salceda said.

If passed, the measure will save small businesses an estimated P42 billion.

“It’s P42 billion more money in hundreds of thousands of small businesses — wala pang delay sa implementation, kasi instant ang epekto sa bottomline. The cut is effective July 2020, if the Senate can manage to pass it before we go on break this June,” Mr. Salceda said.

CREATE also proposed to extend the net operating loss carry-over (NOLCO) to five years from the current three-year period. This will allow firms to utilize net losses in 2020 as additional deductions to their taxable income from 2021 to 2025.

The Fiscal Incentives Review Board (FIRB), whose functions will be expanded under the bill, will also have the power to recommend the grant of longer tax incentives and non-fiscal incentives to deserving companies.

Upon the recommendation of the FIRB, the President can approve a set of incentives with longer periods of availment if necessary to attract “highly desirable investments that will bring more employment, high level of skills training, and greater value-added to the economy.”

Mr. Salceda is confident that the proposed tax reform can be passed immediately as long as the net revenue impact “makes sense.”

“Pia naman and I have an open line, as well as the economic managers. So, the small details can be ironed out and the House will continue to provide insights. But, if the net revenue impact makes sense, we can adopt the Senate version. Kung ipasa nila bukas, bukas tapos na tayo,” Mr. Salceda said referring to Senate Ways and Means Chair Pia S. Cayetano.

CREATE is part of the recovery stage under the Philippine Program for Recovery with Equity (PH-Progreso).

STATUS QUO INCENTIVES
The Philippine Economic Zone Authority (PEZA) continues to support the “status quo” on incentives, despite the new proposals to immediately cut corporate income tax and lengthen the sunset period for existing fiscal incentives.

“We’ll leave it to the senators (because) they’re the ones who will vote,” PEZA Director-General Charito B. Plaza said about the new proposals in a mobile phone message on Wednesday.

The CITIRA also proposes to rationalize incentives, where companies can retain their existing incentives for four to nine years. The sunset provision was at two to seven years.

Ms. Plaza maintained in a television interview on Wednesday that export companies prefer to retain the existing incentives regime.

“Our incentives package is exactly what attracted our FDIs (foreign direct investments), our exporters to come to the country. Our incentives package is tried, tested, and proven and is globally competitive.”

She said in the mobile phone message that PEZA supports the reduction of the CIT for domestic enterprises.

“Exporters still prefer the GIE (gross income earned) (because) it’s simplified and they don’t have to deal with the LGU (local government unit), BoC (Bureau of Customs) and many other agencies thus, open to red tape and corruption,” she explained in the mobile phone message.

PEZA has been contesting the removal of the 5% tax on GIE paid by locators in lieu of other local and national taxes. Companies have to deal with various government agencies for the various tax payments.

The Philippine Exporters Confederation, Inc. (PhilExport), along with several foreign business chambers, has expressed support for the CIT reduction.

“The drop in CIT is seen to attract investors, increase the country’s competitiveness and help address particularly the cash flow issue of MSMEs. But in this crisis, this tax reform will particularly be relevant especially to small- and medium-sized businesses bleeding from the impacts of the lockdowns and COVID-19 pandemic,” PhilExport President Sergio R. Ortiz-Luis, Jr. said in a statement last week. — Genshen L. Espedido and Jenina P. Ibañez

PCC warns against unchecked price controls

May 21, 2020 | 12:31 am

By Jenina P. Ibañez
Reporter

THE Philippine Competition Commission (PCC) warned against unchecked price controls and “rescue mergers,” as it flagged a possible lessening of competition among companies during the coronavirus disease 2019 (COVID-19) pandemic.

PCC Chairperson Arsenio M. Balisacan said on Wednesday that price controls could deter the supply of essential goods and could be used as a reference point for collusion.

“In the short term, we may see firms exhibiting pricing behavior different from that in normal times. When profits are down, collusive and other forms of anti-competitive behavior that attempt to exploit crisis conditions to raise prices are more likely,” he said in a webinar hosted by the Management Association of the Philippines (MAP).

“Some jurisdictions have already imposed price caps and price ranges. However, the government should use price controls with caution. Imposing price ceilings may be counterproductive since they may deter the entry of other firms to produce more goods, especially essential goods.”

While temporary cooperation among firms could be beneficial in improving efficiency in producing essential goods, Mr. Balisacan said there is a possibility this may lead to price fixing.

“However, there is a significant risk that cooperation might spill over to hardcore restrictions like price fixing since competitors may then regularly obtain information on the other firms’ inventories and pricing strategies. Price fixing or output fixing is welfare reducing because it artificially sets the prices higher or output lower,” he added, noting that this cartel-like behavior may continue after the crisis.

Mr. Balisacan described the effects of the crisis due to the pandemic, noting the market exit of smaller firms due to losses and the increased appetite for “rescue mergers” among larger firms.

He said that there is pressure to approve mergers quickly as some firms are failing due to losses amid the pandemic.

“Our take on that is that if the acquisition involves efficiency, involves improvement that benefits not only the firms but everyone else, then that should not be prohibited. But if the big firm swallows the small firm because it doesn’t want a potential rival or competitor… then surely makes a lot of difference for us in the way we look at the issue,” Mr. Balisacan said.

PCC’s proposed solution is to expedite merger and acquisition evaluation for medical solutions, and review the “failing firm” defense on a case-by-case basis.

Mr. Balisacan added that government’s policy measures, including subsidies and bailouts, come with risks in distorting the business playing field.

He said subsidies should be based on objective criteria and transparent rules and should be applicable to all businesses within an industry to avoid selective policy that distorts the playing field.

Physical distancing will be ‘very costly’ for some firms

May 21, 2020 | 12:30 am

By Marissa Mae M. Ramos
Researcher

COMPANIES that rely on face-to-face interaction are likely to be more negatively affected by the implementation of physical distancing measures than other sectors, as fears over the coronavirus disease 2019 (COVID-19) persist, according to economists from the University of Asia and the Pacific (UA&P).

In an unpublished paper titled “Consumer Fear in a Post Quarantine Economy,” UA&P economists George N. Manzano and Nikka C. Pesa said while the practice of physical distancing is necessary from a public health policy perspective, the practice can be very costly from a business standpoint.

“There are certain markets, especially in the services segment, whereby the very nature of the transaction, makes physical distancing impossible. These are termed ‘high contact intensive’ industries marked by face-to-face interaction between service provider and consumer such as food services, hair salons, and dentists,” they said, adding that firms offering non-essential services are even more vulnerable as consumers are expected to delay making these purchases.

They noted that among establishments with 20 or more workers, firms that provide non-essentials employ around 1.28 million Filipinos, or 28.5% of the country’s total employment, citing the Philippine Statistics Authority’s (PSA) 2015 edition of the Annual Survey of Philippine Business and Industry. On the aggregate, these firms earned approximately P3 trillion that year.

In Metro Manila alone, around 508,000 workers or 24% were employed in this group with total income amounting to P1.8 trillion.

Mr. Manzano and Ms. Pesa’s paper follows the analysis of economist Fernando Leibovici and colleagues at the Federal Reserve Bank of St. Louis in the United States where they distinguished industries that produce essential services during the pandemic such as health services, from those that do not.

Among industries identified as “high-contact intensive” but providing non-essential services were personal care; outpatient healthcare; food and drinking places; amusement and recreation; and tourism-related industries such as transportation and accommodation.

“The fact that workers from these industries are less likely to have possibilities for working remotely will compound the problem… The more obvious case is that cash-strapped customers, recently emerging from the ECQ (enhanced community quarantine), can hardly afford to spend on such services,” the UA&P economists said.

“Even more alarming, people do not want to avail of such services due to fear of infection. As customers shy away, demand is driven downwards leading to even lesser revenues.”

INFORMATION ASYMMETRY
This “fear factor” stems from the problem of information asymmetry, which arises when one party has more information than the other.

“Because reliable information is absent or hard to come by, everyone will suspect that the person — co-worker, client, service provider, etc. — could be a potential carrier. Given the perceived risk, they will forgo the transaction leading to a loss of potential business,” Mr. Manzano and Ms. Pesa said.

One remedy to this problem, they said, is through “signaling.”

“[S]ervice providers can signal the state of their health. A certificate of having been tested and found negative of the virus could be used as an instrument for signaling. Alternatively, a record of thermal scan readings for the past 21 days could likewise be employed,” they explained.

However, even this may prove problematic if signals are not credible.

“If the reliability of the current testing procedures in detecting asymptomatic carriers at all times is questionable, then the certificates of testing may not be very useful as a signaling instrument… In addition, if the service provider cannot assure that integrity of the ecosystem where he or she operates… is ‘safe’, then possessing test certificates of health may not be very convincing signaling instruments,” they said.

“In the absence of a credible signaling instrument, that could mitigate the fear factor, the high-contact service sectors would face a very difficult path to recovery. These service sectors would therefore need government assistance. That a good number of these sectors are micro, small, and medium establishments, which are more fragile during lockdowns, makes the call for assistance more urgent.”

The country’s gross domestic product (GDP) shrank by 0.2% in the first quarter — the first time in 21 years or since the fourth quarter of 1998.

The services sector contributed 0.81 percentage point (ppt) to GDP performance during the period to partially offset the negative contributions of agriculture and industry at minus 0.04 ppt and minus 0.93 ppt. Nevertheless, this paled in comparison to its contribution of 4.16 ppts in the first quarter last year when the economy grew by 5.7%.

The cabinet-level Development Budget Coordination Committee now expects GDP to shrink by 2% to 3.4% this year, lower than the -1% to zero growth forecast made in late March.

‘High contact intensive’ firms stand to lose from new normal as personal interaction becomes health risk

May 21, 2020 | 12:30 am

AC Health allots P300M for virus response

May 21, 2020 | 12:10 am

By Denise A. Valdez, Reporter

THE healthcare unit of Ayala Corp. (AC) is looking to take a bigger part in the country’s battle against the coronavirus disease 2019 (COVID-19) pandemic, allotting up to P300 million for initiatives to support testing and triaging.

In an online media briefing on Wednesday, Ayala Healthcare Holdings, Inc. (AC Health) said it had committed to build five biosafety laboratories across the country that would process 3,000 COVID-19 tests every day.

This is aside from previous initiatives of partnering with hospital operator QualiMed to build a COVID-19 referral facility in its Nuvali, Sta. Rosa branch, and opening FamilyDoc and Healthway clinics to serve as triage points for suspected COVID-19 cases.

“Within AC Health specifically, our program to date is about P300 million in investments and donations towards building out, for instance, Qualimed Nuvali, building out the biosafety labs, and investing in testing in general,” AC Health President and Chief Executive Officer Paolo Maximo F. Borromeo said.

AC Health will be opening next week a testing lab in Makati City in partnership with the Tropical Disease Foundation. In the coming weeks until June, it will be opening the other four testing labs in QualiMed Sta. Rosa, Batangas, Bulacan and Iloilo.

“With the network of five labs, we will be able to contribute significantly to the government’s goal of 30,000 tests per day by the end of May. We’re also looking to establish partnerships with other lab providers and hospital providers, including in big cities such as Cebu,” Mr. Borromeo said.

He said the government had been able to conduct 11,000 tests every day, but a lot has to be done involving the private sector to reach the target of 30,000 tests by month’s end.

One of the ways AC Health hopes to improve the process is by procuring automated extracting machines. Mr. Borromeo said this would raise the number of tests conducted daily to 800–1,000 tests versus 100–200 tests with manual labor.

AC Health currently offers COVID-19 rapid testing services at select clinics in Metro Manila at P1,600 for walk-in clients. Corporate rates are also available for companies that want to tap the company for testing their employees.

As the situation pushes most hospitals to focus efforts on the COVID-19 crisis, Mr. Borromeo said AC Health is finding opportunities to plug gaps in the healthcare sector, such as by advancing telemedicine and improving its pharmaceutical services.

The company launched in April a telemedicine platform, HealthNow.ph, in partnership with Globe Telecom, Inc.’s 917 Ventures. It is handled by AC Health’s technology arm Vigos and allows people to digitally get in touch with a pool of about 80 doctors every day from Healthway and FamilyDoc.

HealthNow is currently accessible through its website for free. By next month, Vigos Chief Executive Officer Christian Besler said the initiative will have its mobile application, which will allow doctors to offer paid consultations.

By July, HealthNow will link with Generika drug stores to have medicine delivery capabilities, and by the third or fourth quarter, will incorporate corporate healthcare facilities through FamilyDoc.

Mr. Besler said the goal is for the platform to become an all-around service provider to address various public health-seeking behaviors. Healthway, FamilyDoc and Generika are all brands handled by AC Health.

“For the Ayala group, I think the pandemic has shown how vital the healthcare sector is to nation building. For us at the group, it’s renewed our own commitment to the sector,” Mr. Borromeo said.

“I do think moving forward, it needs massive support and will require continuous investments from the private sector, both in terms of capacity building and capability building. So I think you’ll see more investments from us, from the private sector into the healthcare industry,” he added.

AC Health has long been planning to have a cancer network in its portfolio, with an initial goal of groundbreaking a P2-billion cancer hospital this year. Mr. Borromeo said this has been delayed because of the pandemic, but the project is still alive, together with plans to have a network of cancer clinics.

“Hopefully after the lockdown, we are able to build stand-alone cancer clinics… Our goal is to build a cancer network,” he said.

AC Health is one of AC’s newest investments which it projects as a long-term value driver to the company. Its primary businesses are in real estate, banking, telecommunications, power and water.

Earnings of AC in the first quarter fell 17% to P6.7 billion due to a decline in its property, banking and industrial segments. Its shares at the stock exchange gained P15 or 2.31% to P665 each on Wednesday.

PAL further bleeds as last year’s losses more than double to P10B

May 21, 2020 | 12:09 am

THE listed operator of flag carrier Philippine Airlines reported a net loss of P10.31 billion last year, more than double the attributable losses to equity holders recorded a year earlier.

In a regulatory filing, PAL Holdings, Inc. placed revenues in 2019 at P154.54 billion, higher by 2.7% than the previous year’s, but expenses and other charges piled up.

PAL said financing charges had increased by P6.76 billion or 128.4%, mainly after it adopted the new lease accounting standard, or PFRS 16, and chalked up additional aircraft financing.

“There were also more charges incurred during the year and significantly less one-off gains compared to 2018 where it booked income from reversal of provision for contingency for the Flight Attendants and Stewards Association of the Philippines (FASAP) case, reassessment of the carrying values of asset restoration obligations for certain aircraft and credit memos received from various aircraft manufacturers,” it also said.

Last year’s topline number was driven by a 4.2% increase in passenger revenues as there were additional frequencies and new routes, but these were partly offset by lower cargo and ancillary revenues at 8.2% and 5%, respectively.

Although consolidated expenses last year decreased by 3.1% to P151.66 billion, the company was weighed down by financing charges of P12.03 billion and other charges of P2.04 billion.

“The main contributors for the decrease were flying operations and passenger service expenses, which were partly offset by the increase in aircraft and traffic servicing expenses,” it said.

For 2020, PAL said the coronavirus pandemic could have a material impact on its financial results this year and even periods after.

PAL President and Chief Operating Officer Gilbert F. Santa Maria said in a recent virtual conference that the current crisis is “a great time of turmoil” for the company.

“But we have been around for almost 80 years, so we are not giving up. We will be around for a while longer,” he added.

He noted that there had been “reluctance” among people to travel, but the company is now carrying out measures to build their confidence to fly again.

On whether the prices of flight tickets would go up, he said: “You are asking if ticket prices are going to be up? The quick answer is somewhat.”

“You understand that in airlines, the CAB (Civil Aeronautics Board) will not allow us to raise prices…. But within the airline itself, there are different classes of seats, so we will charge different prices for promotions and different prices for standard and regular seats, and so we will work within that framework to allow us to fly economically but safely,” he said further.

On Wednesday, shares in PAL inched up by 0.14% to close at P6.95 apiece. — Arjay L. Balinbin

Mid-market focus boosts FDC net profit by 23%

May 21, 2020 | 12:08 am

FILINVEST Development Corp. (FDC) recorded a 23% earnings growth to P12 billion in 2019, lifted by higher profits from its banking and property segments as it focused on the middle market.

In a statement on Wednesday, the Gotianun-led holding company said its consolidated revenues last year rose 15% to P74.85 billion. Gross expenses also climbed 14% to P59.86 billion.

Primary drivers of growth were FDC’s banking and property units. East West Banking Corp. contributed P6.1 billion in net income, 45% higher than the level in 2018.

The property segment, which includes both real estate and hospitality businesses, made up “more than half of FDC’s bottomline.” The exact contribution of the property segment was not disclosed, but Filinvest Land, Inc. (FLI) said in a statement on Monday it booked a 7% earnings growth to P6.28 billion last year.

Power unit FDC Utilities, Inc. (FDCUI) added P2.5 billion in net income, up 20% year-on-year.

“The year 2019 was a banner year for FDC. We met our goals for our core businesses, gained further traction in the new businesses and achieved record financial results,” FDC President and Chief Executive Officer L. Josephine G. Yap said in the statement. “This was done through our continued focus on the delivery of products and services to the dynamic yet underserved middle market.”

Broken down, EastWest Bank saw a 21% growth in revenues and other income to P36.4 billion last year. This was due to a 12% increase in net interest income and a 16% rise in non-interest income.

“EastWest Bank recorded its most profitable year in 2019 following a consumer-led loan portfolio that expanded remarkably well. It also maintained its top-tier position in profitability with a return on equity of 14%,” FDC Chairman Jonathan T. Gotianun said in the statement.

Real estate arm FLI increased its lot, condominium and residential unit sales by 5% to P21.5 billion. Rental revenues from FLI and Filinvest Alabang, Inc. likewise rose 21% to P7.5 billion due to the expansion of its leasing portfolio.

Hotel operations, which is under FDC’s property segment, recorded a 24% growth in revenues to P3.3 billion after it opened new facilities in 2018 and 2019. Filinvest Hospitality Corp. now has six properties in its portfolio.

FDCUI had a 17% climb in revenues to P10.1 billion. This was due to an increase in sales volume from higher customer demand and gains from selling replacement power to other power generators.

This year, FDC said the coronavirus disease 2019 (COVID-19) pandemic has led to operational disruptions that may slow its businesses down.

“The COVID-19 pandemic…has put an unexpected pause to our 2020 plans. Our attention was diverted as we worked closely with the public and private sectors to mobilize resources towards health care, testing and community assistance,” Ms. Yap said.

“Nevertheless, the Filinvest group is in a solid position to address the forthcoming challenges posed by this crisis,” she added.

FDC and its subsidiaries have committed P100 million in fighting the COVID-19 pandemic through its foundations.

Shares in FDC at the stock exchange slipped 18 centavos or 2.20% to P8.02 each on Wednesday. — Denise A. Valdez

SMC starts COVID-19 tests on employees

May 21, 2020 | 12:07 am

SAN Miguel Corp. (SMC) has started doing coronavirus disease 2019 (COVID-19) tests to its employees as they prepare to return to work.

The diversified conglomerate said in a statement on Wednesday it had begun swabbing in key facilities while waiting for its dedicated testing lab to finish construction.

“We are prioritizing, first, our security and other maintenance staff, as they are the ones who take care of our workplace. After them, we test our colleagues whose duties require them to report to the office,” SMC President and Chief Operating Officer Ramon S. Ang said.

“Initially we are looking at only 20% of our head office population to report for work. Majority will still continue to work from home,” he added.

The government has eased quarantine restrictions over the weekend, which prompted several sectors to resume operations starting this week.

SMC said aside from testing employees in key facilities, the company will conduct testing to nearly 8,000 manufacturing, operations and management frontline staff. This would include plants in Cavite, Visayas and Davao in the coming weeks.

“We are doing this in phases. The success with which we can quickly test a large percentage of our employee population over the next few weeks will be a key consideration in the timelines of our overall return-to-work plan,” Mr. Ang said.

“Currently, we are working with partner laboratories to process the tests, but once our lab is up, we expect to be able to process more tests quickly so we don’t burden the system and we can take care of our employees,” he added.

Before it conducted tests for its employees, SMC committed to support local government units in conducting regional testing, donating swab booths and about 34,000 testing kits.

It said it will donate more kits to help the country achieve its goal of conducting 30,000 tests daily by the end of May.

SMC recorded flat earnings of P48.57 billion in 2019 due to lower sales from its oil and food units. Its shares at the stock exchange closed flat on Wednesday at P96.40 apiece. — Denise A. Valdez

Roxas Holdings cuts losses in second quarter

May 21, 2020 | 12:06 am

ROXAS Holdings Inc. (RHI) trimmed its losses attributable to equity holders to P92.75 million during the second quarter of its fiscal year ending March in part after the company reduced some of its expenses.

The net loss in the three-month period, which was lower by 44% compared with the previous year’s, was due to lower sugar production and weather disturbances.

Including non-controlling interests, the company’s net loss was at P96.15 million, wider by 42.3% than the level in the same period last year, its financial report submitted to the stock exchange on Wednesday showed.

The company attributed the net loss due to “unfavourable weather conditions, the eruption of Taal Volcano, and increased cane competition in the Batangas area.”

RHI’s revenues for the second quarter fell by 8.03% to P2.52 billion.

In the first half of its fiscal year, RHI recorded a net loss of P92.43 million, 74.6% lower than the P364.12 million loss in the same period in 2019.

RHI President and Chief Executive Officer Hubert D. Tubio said that the company was crafting a roadmap for interventions that would increase its annual output of sugar.

Mr. Tubio added that profit from RHI’s bioethanol segment fell as feedstock costs increased during the first half of the crop year.

“The high price of molasses affected the ethanol segment’s operations, resulting in lower production volume,” he said in a statement.

RHI Executive Vice President and Chief Finance Officer Celso T. Dimarucut said that the company’s focus is on its efforts to “de-risk” the business.

“Despite the many challenges we face, especially with the onslaught of COVID19, RHI has continued to manage its cash flow to ensure continuous manufacturing operations and is exploring all opportunities to reduce debt,” Mr. Dimarucut said.

On the other hand, the company’s ethanol group is exploring the commercial production of ethyl alcohol to assist in the country’s battle against the coronavirus disease 2019 (COVID-19) pandemic.

Described as the largest integrated sugar and ethanol producer in the country, RHI manages sugar miller Central Azucarera Don Pedro, Inc.; Central Azucarera de la Carlota, Inc.; ethanol producers Roxol Bioenergy Corp. and San Carlos Bioenergy, Inc.; and RHI Agri-business Development Corp.

On Wednesday, shares in RHI fell by 0.78% or P0.01 to close at P1.28 apiece. — Revin Mikhael D. Ochave

Personal SM shoppers and more on MyKuya

May 21, 2020 | 12:05 am

ON-DEMAND service app MyKuya announces that its users can now use the app to shop in SM Supermalls as quarantine measures “inspired [the company] to continue expanding its horizons for the comfort of the Filipino people,” a statement read.

“In terms of demand [it’s now] 700% than it was before the pandemic and before the quarantine,” Shahab Shabibi, founder of MyKuya, said in an online conference on May 12.

The addition of enterprise partners, he said, was a response to demand for more variety as it allows customers to buy items from shops inside SM malls.

“By partnering with SM, we are able to provide our customers the convenience and safety that they seek during these difficult times when it comes to getting their desired food and other products,” he said in a release.

Among the services the app provides are messenger services, personal shopper service, grocery delivery, and other errands. The app has also partnered with Ministop, Ayala Malls, and Lucky Chinatown Mall.

How it works is a user first clicks on the kind of service they want, indicates where the delivery will be made to, and how long the task will take. The fee depends on the distance and the time it will take to finish the job. The app promises to connect the customer to a service provider within two minutes or get P50.

Payment for the services and goods can either be made once delivery is completed if it’s under P1,000 or the “kuya” or “ate” (“older brother” and “older sister,” as the app calls its service providers) can first go to the customer’s residence to get cash or the customer can send the money via GCash.

In March, the three-year-old company noted a 300% increase in service bookings and added more than 5,000 individuals to provide services on the app. At the time, most of the bookings were for grocery deliveries. A month later, it announced that it was ready to accept 15,000 more individuals.

“Before the quarantine period, our services were quite evenly distributed, and from the moment that the quarantine began, about 80% of our orders became about grocery deliveries,” he explained.

Now that the country is more than two months in some version of quarantine and some cities are loosening up restrictions, Mr. Shabibi noted that they have seen demand for other services such as handyman, technician, and other specialized services. He said they will have those services soon on the app.

While many industries have paused their expansion plans because of quarantine restrictions to control the COVID-19 pandemic, for MyKuya, it sped up its growth.

“It has been war mode for us. Our team has been working seven days a week, double shift, since Day One of the quarantine. And the reason this happened is because we listened to our customers and we saw they need the service more than ever,” Mr. Shabibi said.

“So we had to definitely realign, and we had to work a lot harder to grow a lot faster and to be able to kind of take in and rapidly bring a lot of these pieces of our service community on board,” he added. — Zsarlene B. Chua

ERC asked to order refund of Meralco bills for May

May 21, 2020 | 12:05 am

A CONSUMER group on Wednesday asked the Energy Regulatory Commission (ERC) to ask Manila Electric Co. (Meralco) to return to customers their payments for May bills, as well as to halt its billings during the period of enhanced community quarantine (ECQ).

In a letter, the National Association of Electricity Consumers for Reforms, Inc. (Nasecore) said the listed distribution utility did not comply with the ERC advisory on postponing its electricity billings until after May 30, amortized in four installments in the next four billing months after the ECQ.

“Undoubtedly, Meralco customers who paid their May billings online and at payment centers while the ECQ is still in effect were deprived of the benefits they were entitled to under the ERC Advisories,” it said.

In a message to BusinessWorld on Tuesday, Meralco Vice President and Utility Economics Head Lawrence S. Fernandez said the company “strictly complied with ERC Advisories and relevant regulations.”

Last week, the Philippines’ largest distribution utility explained that the bill shock experienced by customers was due to the increase in electricity charges computed based on the actual electricity consumption in kilowatt-hours (kWh) from the current meter reading, plus the estimated consumption reflected in the deferred April and March bills.

The ERC on Monday ordered Meralco to explain the basis of its computation of the May billing.

Meanwhile, the group also accused Meralco of “abuse of market power” by supposedly imposing a P47-convenience fee for online bills payments.

The fee, it said, “should have been a subject of an application with the Commission and of a public hearing.”

Responding to this, Meralco Senior Vice President and Legal Head William S. Pamintuan said on Tuesday that the additional fees are not theirs but are “the fees charged by online payment services provider to those using their platform or system to transact online payments for their convenience.”

The Department of Energy in a letter dated May 14 asked the utility to submit its explanation on this matter. — Adam J. Ang

Best wine movies to watch

May 21, 2020 | 12:04 am

The last two months of our quarantine, I am sure most of us stuck at home have done our share of movie bingeing. For a change, why not watch movies with wine themes?

In the mid 1990s, at the beginning of my wine career, I started paying more attention to movies that had wine in their story line or backdrop. I remembered watching the 1995 romantic comedy French Kiss starring Meg Ryan and Kevin Kline, where Kline, who played a French guy, in one scene, is teaching Ryan how to associate wine aromas with herbs. I also recall a Bruce Willis action-crime movie in 1998 called Mercury Rising, where in one scene Willis breaks into the cellar of the villain played by Alec Baldwin and starts opening and drinking Alec’s luxury wine collection of Château Petrus and Château Cheval Blanc, even mentioning that one of the wines he tried is corky. Then, there was a Jacky Chan movie in 1999 with Taiwanese actress Shu Qi (of The Transporter) showing the action star rolling his hand-crafted giant Riedel crystal Bourgogne glass from side to side on a table to aerate a Bordeaux wine.

These are just some memorable wine scenes in regular movies, but there are a few good movies that really have wine as a theme or as a major part of its theme. Below are the three films I immensely enjoyed, and I highly recommend to wine lovers. Warning: I include spoilers.

Sideways (2004)

This critically acclaimed movie revolves around two old friends in their 40s portrayed by seasoned actors Paul Giamatti and Thomas Haden Church (Sandman in Spider Man 3 of the Toby Maguire era), who are on a week-long road trip to the Santa Ynez Valley wine country.

Giamatti plays Miles Raymond, a hardcore wine enthusiast and English teacher from San Diego. Miles is also a frustrated book writer and a bitter divorcee who still longs to reconcile with his ex-wife. Haden Church plays Jack Cole, a small-time TV actor who is getting married soon. The wine country road trip is Miles’ idea as a send-off bachelor gift to his long-time buddy Jack. But Jack has other things in mind. While Miles wants to enjoy the wines, the local cuisine, the picturesque scenery, and the brotherly bonding, Jack is more interested in having guiltless sexual flings before tying the knot.

As the week progresses, Miles has been constantly at the side of the testosterone-charged Jack, including being his sidekick as Jack conducts an open affair with Stephanie, a wine-knowledgeable staffer they met during a winery tasting visit. Stephanie’s friend Maya is a waitress at a restaurant Miles frequents when he visits the wine country. As Jack gets to spend more time with Stephanie, Miles and Maya also begin to develop feelings for each other. In an accidental slip up, Miles reveals to Maya that Jack is engaged to be married, and Maya quickly tells Stephanie. Stephanie physically attacks Jack in anger and ends their ill-advised affair.

Instead of learning his lesson, the incorrigible Jack quickly finds another willing victim in waitress Cammi, also a fan of his. But this time, he gets caught by Cammi’s husband, and once more Miles helps Jack out of a potentially messy situation to ensure that Jack’s looming marriage will push through.

While Jack is creating his own problems, Miles also receives bad news from his book agent. Jack’s draft novel has been rejected by another publisher, and his dream of becoming a writer seems doomed.

Everything hits rock bottom for Miles as he meets his ex-wife at Jack’s wedding, and she introduces him to her new husband. Knowing that he can no longer win his ex-wife back, Miles quickly leaves the wedding reception to pick-up his most cherished wine, a 1961 Château Cheval Blanc, that he has been saving to drink on a special occasion. He drinks this wine rather brusquely in a nearby fast food restaurant with only a styro-cup, whiffing and quaffing in total pleasure. I do see why such a majestic wine like a Cheval Blanc can make one’s crappy life more tolerable and can offer some joy in such dire situations.

There are quite a lot of memorable scenes in this movie. Most wine people I know remember the Merlot-bashing, and Pinot Noir-reverence dialogue, but for me, the most memorable scene also happens to be one of the most disgusting I have ever seen in any movie. This is when a very irate Miles (after learning his novel has been rejected by a publisher) returns to a wine tasting room, and wants to drink more out of frustration. But the winery personnel refuse to pour him a full glass even when he offers to pay for it, saying Miles should just buy a bottle and drink outside their premises. In a feat of anger, Miles takes the spit bucket and unmindfully gulps down the contents… OUCH! I still twitch every time I remember this particular visual.

Bottle Shock (2008)

Bottle Shock is based on a true story that occurred in 1976 — the historic year that literally and figuratively put Californian wines in the wine map. The movie stars the late Alan Rickman as Steven Spurrier, Bill Pullman as Jim Barrett, and Chris Pine as Bo Barrett. Bottle Shock tells of the exploits of Spurrier, a British owner of a “not-so-busy” Paris wine shop, who hatches an ambitious wine tasting plan to pit his favorite French wines against relatively unknown Californian wines.

The original idea was more to see if other country’s wines could be at par with the proud French wines in terms of taste and quality. Steven then travels to California in search of worthy wines to bring to the Paris wine tasting. In a twist of fate, Steven meets Jim Barrett, the hard nosed owner of struggling Château Montelena. And soon after, he visits the winery to taste some barrel samples of the Chardonnay. Convinced that the Château Montelena Chardonnay can compete with the best White Burgundy from France, Steven offers to buy two bottles to bring back to Paris. Jim does not believe in the tasting and feels that Steven is only taking Château Montelena to the Paris tasting to embarrass Napa wines. But son Bo thinks it is a fantastic idea and is very confident about their wine, so he sneaks out two bottles of their 1973 Château Montelena Chardonnay to give to Steven before he departs for Paris. And the rest, as they say, is history. Château Montelena emerges as the surprise winning white wine in this momentous tasting event known as Judgment of Paris by beating the more illustrious French burgundies and shocking not only the eight French wine expert judges, but also the rest of the world — a real underdog story that is actually stranger than fiction (especially during the 1970s).

The movie is just very entertaining. Alan Rickman is hilarious. But while the movie was well done and was well received by film critics, it has not escaped controversy from those in the wine trade. For one, Steven Spurrier, the main character in the supposedly true-to- life movie, questioned the accuracy of the story. Also, the real winemaker of the 1973 Château Montelena Chardonnay was Croatian immigrant Mike Grgich (now owner of Grgich Hills Cellar) who worked for Jim Barrett back then. Gustavo Brambila, who is depicted in the movie as the gifted winemaker, was more like an understudy of Mike Grgich during this period at Château Montelena.

Uncorked (2020)

Uncorked is a Netflix original movie, and one of those new releases I watched while under the pandemic quarantine. The movie has no big stars and is actually about an African-American family in Tennessee — unusual when one considers what is normally associated with wine culture. But despite the lead character, Elijah (played by Mamoudou Athie), being African-American, there are no racial undertones when it comes to Elijah’s wine endeavor, though the soundtrack is “black” hip-hop music.

Uncorked talks of the relationship between Elijah and his father, Louis (played by Courtney B. Vance). Elijah works at Joe’s, a local liquor shop where he develops fondness for wines. He is tutored by his boss Raylan, who also encourages Elijah to turn his interest in wine into a master sommelier title. To pursue a master sommelier title, Elijah needs to first pass a state exam for sommeliers, which he does. Elijah then enrolls in a sommelier/wine school to prepare himself for the very difficult master sommelier exam. As Elijah mentions to his girlfriend Tanya, “There are only 240 master sommeliers in the world.”

But when Elijah tells his father Louis that he passed the qualifying exam for master sommelier, Louis is not thrilled. The plan Louis has is for Elijah to take over their thriving barbeque restaurant started by his father, Elijah’s grandfather, in Memphis. Their barbeque restaurant is also opening its second branch. Elijah’s mother Sylvia (Niecy Nas) is, however, supportive of her son and convinces Louis to let Elijah do what he wants. While in school, Elijah is asked to join a study group which goes to Paris on an exchange program. While in Paris, Elijah finds out his mom has died from cancer.

He comes back home and is faced with a huge quandary: his desire to help his dad run their family barbeque business and his own ambition of becoming a sommelier. He chooses the former. Elijah drops out of wine school and works with his dad full time. But with prodding from Tanya and eventually, his dad, Elijah agrees to go for the master sommelier exam. Louis decides to help his son review. Elijah fails the exam but is not giving up on his dream. He re-enrolls in wine school, this time, more determined than ever to become a master sommelier.

Wine trade professionals will have real empathy with the character of Elijah. But this is still a fictional story as to achieve the actual master sommelier status — and, yes, there really are just 269 master sommeliers in the world — you need to pass four stages, not two as simplified in the movie (though the movie does a great job of showing the grind and hustle of being a sommelier).

The sommelier accreditation is administered by the Court of Master Sommeliers (CMS) through examinations that get much harder with each level. You start with the CMS first level, for the Introductory Sommelier title, and once you pass this, you go to the next level, for the Certified Sommelier title. You pass this, you go to the next level, for the Advanced Sommelier title. And finally, if you pass this, you hit the ultimate level, going for the Master Sommelier title. There is no bypassing of levels. The first three levels of exams are mostly in written form, while Master Sommelier level includes an oral exam on theories in front of a panel, aside from blind tasting of six wines (three red, three whites), and a service exam. Each part needs to be passed to become a Master Sommelier. Even after passing all three levels from introductory to advanced sommelier, the percentage of passing the final level is very low at around 4-5% only. With each level passed, you get a new lapel pin that comes with a certificate. While the Uncorked story line on father and son conflict is a bit old and tiring, the wine side of it makes this a real fun watch.

I intentionally did not include documentary movies like Netflix’s Sour Grapes (2016) about the life of wine con artist Rudy Kurniawan, or Mondovino (2004), a low-budget documentary, done entirely with a handheld digital camcorder, about commercialization and globalization of wine and its effect on the various wine regions.

For comments, inquiries, wine event coverage, wine consultancy and other wine related concerns, e-mail the author at protegeinc@yahoo.com. He is also on Twitter at

www.twitter.com/sherwinlao.

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