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Megawide Construction Corp. sets virtual annual stockholders’ meeting on June 30

NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

To the Stockholders of MEGAWIDE CONSTRUCTION CORPORATION (“Megawide”):

Notice is hereby given that the Annual Stockholders’ Meeting of Megawide will be held on June 30, 2020, at 2:00 p.m. The meeting will be conducted via remote communication and can be accessed through the following link: Please click here

The agenda of the meeting is as follows:

1. Call to Order

• The Chairman will call the meeting to order.

2. Proof of Notice and Quorum

• The Corporate Secretary will certify that notices of the meeting have been duly sent to stockholders of record date as required by the By-Laws. He will also attest to the attendance at the meeting and whether a quorum is present. Except as otherwise provided by law, a quorum shall consist of stockholders owning majority of the outstanding capital stock, (exclusive of treasury stock), in person or represented by proxy.

3. Approval of the Minutes of the Annual Stockholders’ Meeting on July 2, 2019

• The Minutes of the Annual Stockholders’ Meeting will be submitted for approval. It contains the following matters: (a) approval of the minutes of the Annual Stockholders’ Meeting on July 2, 2018; (b) Chairman’s Address and President’s Report; (c) Election of Directors; (d) Approval of the 2018 Audited Financial Statements; (e) Appointment of External Auditor; and (f) Ratification of all acts of Management and the Board of Directors. A copy of the Minutes is available in Megawide’s website.

4. Chairman’s Address and President’s Report

• The Chairman and President will give a welcome address and give the operational highlights of 2019.

5. Election of Directors

• The stockholders will approve the election of the regular and independent directors to hold office until the next Annual Stockholders’ Meeting and until their respective successors have been elected and qualified. The nominees were evaluated on the basis of all qualifications required by By-Laws, the New Manual on Corporate Governance and that no provision or disqualification would apply to them. The profile and qualifications of the nominees are available in the Definitive Information Statement and Annual Report.

6. Amendment of the Articles of Incorporation to Increase Authorized Capital Stock (“ACS”) for Preferred Shares.

• The increase in Megawide’s ACS for preferred shares will be submitted for the approval of the stockholders.

7. Approval of the 2019 Audited Financial Statements

• The 2019 Audited Financial Statements (2019 AFS) will be submitted for approval of the stockholders.

8. Appointment of External Auditor

• The stockholders will approve the appointment of Punongbayan & Araullo as external auditor.

9. Ratification of all acts of Management and the Board of Directors

• For ratification of the stockholders are the acts of Management and the Board of Directors in the ordinary course of Megawide’s business. A list of such acts is too voluminous to be included in the Information Statement. These acts pertain to obtaining government permits and clearances, execution of contracts, availment of services from banks, and other acts necessary for various construction projects of Megawide.

10. Other Matters

• The floor will be open for questions from the stockholders.

All stockholders of record at the close of business on May 13, 2020 are entitled to notice of and vote at the annual meeting and at any adjournment thereof. The stock and transfer books of Megawide will be closed from end of business day on May 14, 2020.

Please refer to Exhibit “1” of the Definitive Information Sheet (available at the PSE EDGE website) or visit Megawide 2020 ASM for the full details on the submission of proxies, procedure for voting, and participation in the Annual Stockholders’ Meeting of Megawide.

Quezon City, Philippines, June 2, 2020.

 


ANTHONY G. TOPACIO
Corporate Secretary

ARTHALAND’s Notice of 2020 Annual Stockholders’ Meeting

 NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

NOTICE is hereby given that the 2020 annual stockholders’ meeting of ARTHALAND CORPORATION will be held on 26 June 2020, Friday, at 8:30 A.M. and will be conducted through remote communication.

The Agenda for the meeting is as follows:

1. Call to Order
2. Secretary’s Proof of Due Notice of the Meeting and
Determination of Quorum
3. Approval of Minutes of the Annual Stockholders’ Meeting
held on 28 June 2019
4. Notation of Management Report
5. Ratification of Acts of the Board of Directors and Management
During the Previous Year
6. Approval of the Proposed Amendment of the By-laws
7. Approval of the 2020 Stock Option Plan
8. Election of Directors (including Independent Directors)
9. Appointment of External Auditor
10. Other Matters
11. Adjournment

Only stockholders of record at the close of business on 04 June 2020 are entitled to further notice of and to vote at this meeting. The electronic copy of the Information Statement which includes the manner of conducting the meeting and the process on how one can join the same, as well as vote in absentia, among other relevant documents, is available in www.arthaland.com and in the Electronic Disclosure Generation Technology of the Philippine Stock Exchange (PSE EDGE).

WE ARE NOT SOLICITING YOUR PROXY. However, if you cannot personally attend the meeting or participate through remote communication but would still like to be represented thereat and be considered for quorum purposes, you may inform the Office of the Corporate Secretary with contact details indicated below or through (+632) 8 403 6910 or investor.relations@arthaland.com not later than 19 June 2020 (Friday). You will be advised the following business day of any further action necessary on your part, which may include accomplishing a proxy.

Taguig City, Philippines.

RIVA KHRISTINE V. MAALA
Corporate Secretary

 

ARTHALAND CORPORATION
Head Office, 7F Arthaland Century Pacific Tower
5TH Avenue corner 30TH Street, Bonifacio Global City
1634 Taguig City, Philippines

Job losses swell in April

THE LATEST official labor data showed the jobless rate shot up to double-digits, as millions of Filipinos became unemployed, the Philippine Statistics Authority (PSA) reported earlier this morning.

Preliminary results of the PSA’s April 2020 round of the Labor Force Survey put the country’s unemployment rate at 17.7%, up from the 5.1% recorded in the same survey round last year. This was the highest since the government adopted new definitions for the LFS in 2005.

This is equivalent to around 7.25 million jobless Filipinos,  up by 4.98 million from 2.27 million in April 2019.

Likewise, the underemployment rate –  the proportion of those already working, but still looking for more work or longer working hours – worsened to 18.9% from 13.4%. This translates to 6.39 million underemployed Filipinos, up from 5.61 million previously. Among the April rounds of the LFS, this year’s result was the highest since the 19.2% underemployment logged in April 2013.

The size of the labor force was approximately 41.02 million out of the 73.7 million Filipinos aged at least 15 years old, yielding a labor force participation rate (LFPR) of 55.6% from 61.3% in April 2019, equivalent to 44.02 million Filipinos. According to the PSA, the latest LFPR was the “lowest in the history of the Philippine labor market.”

The employment rate, which is the proportion of the employed to the total labor force, dropped to 82.3% in April from 94.9% the previous year. This is equivalent to approximately 33.76 million Filipinos, 41.76 million fewer than the 41.76 million employed in April 2019.

By major economic sector, services still made up the largest share of the employed population. In April, the employment share in that sector shrank to 57.1% from 58.9%.

Industry accounted for 17% of employed Filipinos in April, down from last year’s 19.4%.

Agriculture employed 25.9% of the workers, up from 21.7% previously.

As of the April LFS round, there were 19.28 million people employed in services, down by 5.34 million from 24.61 million in April 2019. For industry, there were 5.74 million employed in the sector, down from 8.08 million. Agriculture, meanwhile, has 8.74 million – down from 9.06 million. – Marissa Mae M. Ramos

April factory output posts biggest drop in almost two decades

FACTORY OUTPUT declined for the second straight month in April, marking the steepest fall in almost two decades, the Philippine Statistics Authority (PSA) reported earlier this morning.

Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the Volume of Production Index (VoPI), contracting by 59.8% year-on-year in April

This was faster than the declines in March and April 2019, which were recorded at minus 7.7% and 14%, respectively.

According to the PSA, the April reading was the sector’s worst performance since 2001.

Year to date, the decline in factory output averaged 15.8% compared to the 9.1% growth decline in 2019’s comparable four months.

“The downturn in VoPI was driven by significant decreases in indices of all industry groups, of which, three were in a very minimal operations, namely: leather products (-99%), footwear and wearing apparel (-97.8%), and furniture and fixtures (-91.7%),” the PSA said in a statement.

A similar trend was observed in factory output as measured by the Value of Production index, which plunged by 61.4%.

In comparison, the Nikkei Philippines Manufacturing Purchasing Managers’ Index, which uses a different set of variables, dropped to 31.6 from 39.7 in March. A reading above 50 indicates an improvement in business conditions from the preceding month.

Average capacity utilization — the extent by which industry resources are used in the production of goods — was estimated at 70%. Only four of the 20 sectors registered capacity utilization rates of at least 80%. – Jobo E. Hernandez

Inflation eases to six-month low in May

The overall increase in prices of widely used goods and services eased to a six-month low in May, the Philippine Statistics Authority (PSA) reported this morning.

May saw headline inflation slow further to 2.1% from 2.2% in April and 3.2% a year ago, preliminary PSA data showed.

The May result fell within the 1.9%-2.7% forecast range of the Bangko Sentral ng Pilipinas for that month, but was lower than the 2.2% median estimate of a BusinessWorld poll of 17 economists conducted late last week. This also marked the lowest since November 2019’s 1.3%.

So far, headline inflation averaged 2.5%, still within the BSP’s 2%-4% target band for the entire 2020 as well as its projection of 1.75%-3.75% when taking account of the pandemic.

Stripping out volatile items such as food and fuel prices, core inflation remained unchanged at 2.9% in May. From January to May, it averaged 3.1%.

The PSA said the May slowdown was “mainly driven” by the transport index, which posted an annual decline of 5.6%. This was, however, slower than the revised 6.2% decline recorded in the sector in April.

The PSA also noted slower annual increases in food and non-alcoholic beverages (2.9% from 3.4% in April); clothing and footwear (2.4% from 2.6%); furnishing, household equipment and routine maintenance of the house (4.1% from 4.2%); and recreation and culture (1.4% from 1.6%).

“On the contrary, a higher annual increase of 18.0 percent was noted in the index of alcoholic beverages and tobacco [from 17.9% the previous month]. The indices of the rest of the commodity groups such as housing, water, electricity, gas, and other fuels; health; communication; education; and restaurant and miscellaneous goods and services retained their previous month’s annual growth rates,” the PSA said. – Mark T. Amoguis 

Approved foreign investment pledges (Q1 2020)

APPROVED foreign investment pledges in the first quarter fell to its lowest level in two years, preliminary data from the Philippine Statistics Authority (PSA) showed. Read the full story.

Approved foreign investment pledges (Q1 2020)

Q1 FDI pledges lowest in two years

By Marissa Mae M. Ramos, Researcher

APPROVED foreign investment pledges in the first quarter fell to its lowest level in two years, preliminary data from the Philippine Statistics Authority (PSA) showed.

Foreign direct investments (FDI) committed with investment promotion agencies (IPAs) dropped 36.2% to P29.36 billion in the first three months of the year from the P45.98 billion recorded in the same period in 2019.

This was the lowest level since the P14.21 billion posted in the first quarter of 2018.

Likewise, combined investment pledges by both foreigners and Filipino nationals totaled P114.77 billion, down 58.1% from P274.23 billion a year ago.

Should foreign and local commitments materialize, it is expected to generate 34,814 jobs, 17.6% less than the 42,245 projected additional employment a year ago.

Approved foreign investment pledges (Q1 2020)

The government counts investment pledges from seven IPAs, which are authorized by law to grant tax and nontax incentives to investors putting up businesses or expanding existing ones in priority sectors.

The seven IPAs tracked by the PSA are the Philippine Economic Zone Authority (PEZA), Board of Investments (BoI), Clark Development Corp. (CDC), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan (AFAB), BoI-Bangsamoro Autonomous Region in Muslim Mindanao (BoI-BARMM) and the Cagayan Economic Zone Authority (CEZA).

The three months to March saw the BoI contributing the most pledged FDIs at 45.5% of the total with P13.36 billion, albeit a 56.6% year-on-year decline. This was followed by PEZA with a 42% share valued at P12.32 billion, though five-percent less than a year ago.

Rounding the rest of the IPAs were CDC’s 8.4% share at P2.47 billion (up six times or 547% from last year), CEZA’s 3.7% share at P1.1 billion (up 13.8 times or 1,277.3%), SBMA’s 0.4% share at P110.5 million (down 92.9%), and AFAB’s 0.003% share at P900,000 (down 99.5%).

Data from BoI-BARMM was not available.

By sector, a huge chunk of foreign investment pledges went to transportation and storage with a 37.2% share of the total at P10.93 billion, followed by manufacturing with a 33.9% share (P9.95 billion), and the administrative and support services’ 10.2% share (P3.01 billion).

Year on year, foreign pledges in transportation and storage were around 569 times bigger than last year’s P19.2 million. On the other hand, foreign commitments in manufacturing and administrative and support services were lower by 71.4% and 14.7%, respectively.

Among the regions, the National Capital Region got the bulk of the foreign pledges at 43.8% of the total or P12.87 billion. This was more than twice the commitments to the region in the first quarter of 2019 when it logged P6.29 billion in foreign pledges.

Calabarzon — the region immediately south of Metro Manila consisting of Cavite, Laguna, Batangas, Rizal and Quezon — was the second-biggest contributor with a 17.5% share (P5.13 billion), while Central Luzon came in third with 15.2% (P4.48 billion).

The United Kingdom was the biggest source of FDI commitments in the first quarter with P6.15 billion, around 21.7 times bigger than a year ago and accounting for 21% of the total for that period. It was followed by the US and China, pledging P5.74 billion (19.6% share) and P4.9 billion (16.7% share), respectively.

“Definitely, the COVID-19 (coronavirus disease 2019) pandemic played a huge role in this foreign investments pledges decline, and this may also include the impact of the Taal Volcano eruption and the general softer sentiment about investing around the world following the immediate impact of the virus in Wuhan,” Ruben Carlo O. Asuncion, chief economist at the UnionBank of the Philippines, Inc., said in an e-mail.

“I think the government has already anticipated the decline and has already lined-up particular responses (fiscal stimulus and economic reforms) to help buffer from these said negative impact,” he added.

In late January, the Taal Volcano eruption disrupted economic activities in Calabarzon and Metro Manila, while the rising COVID-19 cases in March prompted the government to impose a lockdown in the entire Luzon island and select areas in the Visayas and Mindanao to minimize the virus’ spread. The community quarantines remain in place, although more businesses are now allowed to resume operations.

For economist and Foundation for Economic Freedom (FEF) President Calixto V. Chikiamco, regulatory concerns in the first quarter were among the major reasons for the decline.

“Regulatory uncertainty [were] brought about by uncertainty over tax reforms, President [Rodrigo R.] Duterte’s demands to renegotiate the water concession contracts, [and] the administration’s bias against [public-private partnerships]…,” he said in an e-mail.

Mr. Chikiamco also noted other existing factors such as the “continued restrictive laws and regulations on foreign investments,” the country’s poor infrastructure, the lack of competition in many industries, and increasing labor costs.

“Monopolies and duopolies make doing business in the country expensive and challenging. The Philippines has the most concentrated economy in Asia, according to the World Bank, i.e., monopolies and duopolies dominate industries,” he said.

Among measures being discussed by lawmakers is the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), the revised version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), that accelerates reductions in corporate income tax to 25% from 30% by July.

More than 30 local and foreign business groups have supported the passage of the bill to revive the economy, however, economists from various universities have proposed amendments to CREATE noting that at its form, the bill is “inequitable and inefficient” which only serves as a tax relief for big companies and leaving out micro, small, and medium enterprises.

PEZA has also issued a statement on Monday advocating the status quo on incentives for export-oriented companies.

Moving forward, FEF’s Mr. Chikiamco expects approved foreign investments in the remaining quarters to be lower compared to last year.

UnionBank’s Mr. Asuncion also sees “further sluggishness” of foreign investment pledges throughout the year due to the ongoing pandemic.

“However, this view is highly dependent on a quick discovery and wide administration of a COVID-19 vaccine in the country. A significant and steep bounce back is expected at the start of 2021 if and when positive news of a vaccine pervades,” he said.

COVID-19 insurance payouts reach P327M

INSURANCE PAYOUTS related to the coronavirus disease 2019 (COVID-19) have reached P326.95 million as of May 8, a survey conducted by the Insurance Commission (IC) showed.

“According to survey results, the life and nonlife insurance companies, mutual benefit associations (MBAs) and health maintenance organizations (HMOs) all have displayed financial resiliency in the handling and payout of COVID-19-related claims. The respondents honored their contractual obligations to their customers, and some have even gone above and beyond said obligations by paying ex gratia settlements,” Insurance Commissioner Dennis B. Funa was quoted as saying in a statement.

The survey, conducted from April 16 to May 8, showed the insurance industry received P308.16 million in COVID-19-related claims which were settled in full.

However, the life insurance and nonlife insurance companies, MBAs and HMOs appear to have paid more than this amount as they said they made P307.26 million in payments due to contractual obligations and P19.68 million were paid ex gratia or payments made outside the terms of the policy.

Of the amount, medical benefits comprised the bulk or P258.8 million of the COVID-19 claims paid. In-patient benefit claims reached P124.3 million, of which P110 million were paid out.

“Critical illness claims came second, with an aggregate amount of P23.33 million paid. However, the HMO industry reportedly paid more than P73 million (in critical illness) based on tabulated survey responses. Said industry has not yet clarified this disparity as of this writing,” the insurance regulator said.

Medical benefit payouts related to COVID-19 included outpatient benefits (P74.89 million), daily hospitalization claims (P870,000) and medical reimbursement benefits from life insurance worth P130 million.

By sector, the HMO industry settled the most medical benefits at P231.36 million or 89% of the total, followed by the life insurance industry with P14 million and nonlife insurance industry with P13 million.

Meanwhile, payouts for death benefits reached P61.54 million, of which P59 million were paid by life insurers.

Other coronavirus-related claims for benefits such as travel inconvenience, travel cancellations and delays stood at P6.61 million, of which P4.45 million were paid by life insurers.

“This commission noted that ninety-three (93) respondents — a substantial majority — expressed willingness to consider and/or continuously provide coverage for pandemic cases in the future. Said respondents believe that they have an obligation to provide this critical and much-needed assistance to their clients in times of need,” IC said.

When asked whether they will consider providing pandemic coverage in the future, 22 out of the 30 life insurance companies said “yes” while eight answered “no.”

Out of the 54 nonlife insurers surveyed, only 26 said they will look at adding pandemic coverage. Twenty-six out of the 33 MBAs surveyed expressed willingness to consider pandemic coverage in the future, along with 19 out of 25 HMOs that participated.

“On an encouraging note, the COVID-19 pandemic has also positively influenced the four respondent industries in terms of willingness to consider providing pandemic coverage in their products in the future. This will be to the advantage of future insurance and HMO customers, as well as MBA members,” Mr. Funa said.

The insurance industry’s premium income rose five percent to P304.639 billion in 2019 from P290.151 billion in 2018.

The IC conducted the survey to assess the financial impact of the COVID-19 pandemic on the industry and how they have responded to COVID-19-related claims.

As of Thursday, the Health department said total COVID-19 deaths in the Philippines stood at 984 while confirmed cases have reached 20,382. — Beatrice M. Laforga

No grace period for loans falling due this month — SEC

FINANCING and lending companies will no longer be required to offer a grace period for loans that fall due this month as strict lockdown measures eased around the country, the Securities and Exchange Commission (SEC) said.

“Please be advised that the mandatory grace period shall no longer be applied to loans falling due during the general community quarantine (GCQ) or modified general community quarantine (MGCQ) throughout the Philippines beginning June 1,” the corporate regulator said in a notice on its website.

The SEC cited the central bank memo that requires the mandatory grace period to be applied only in areas under an enhanced community quarantine or modified enhanced community quarantine.

Since June 1, Metro Manila, Central Luzon, Cagayan Valley, Calabarzon, Central Visayas, Pangasinan, Zamboanga City, and Davao City are now under GCQ, while the rest of the country is under MGCQ.

To recall, the SEC ordered financing companies, lending companies and microfinance nongovernment organizations (NGOs) since mid-March to offer a minimum 30-day grace period for loans that fall due during the strict quarantine period, in order to help borrowers affected by the coronavirus crisis.

This was in line with Republic Act No. 11469 or the Bayanihan to Heal As One Act which requires a mandatory grace period for all loans with principal and/or interest due within the ECQ period.

But the SEC noted the mandatory grace period will once again be applied in any area that will be placed under an enhanced community quarantine or modified ECQ.

Aside from the extended period for loan payment, the SEC also ordered lenders not to impose interest on interest, fees and other charges to future payments or amortizations. Interest accrued during the grace period may also be paid on a staggered basis over the remaining life of the loan.

Violators may be punished with two months of imprisonment, a fine of between P10,000 and P1 million, or both. — Denise A. Valdez

Diokno: ‘A’ rating campaign to resume once recovery is on track

BANGKO SENTRAL ng Pilipinas (BSP) Governor Benjamin E. Diokno said the government’s campaign to secure a long-coveted “A” credit rating will resume only if a recovery is seen next year.

“Assuming that we get a U-shaped recovery as predicted by many institutions, we can grow by 7-9% next year, then the ‘A’ rating campaign is still on the table, and we hope that would be enough,” Mr. Diokno told reporters in an online briefing yesterday.

For now, Mr. Diokno said the government’s priorities will be on “saving jobs and saving lives” during the coronavirus crisis.

Economic managers project the economy will shrink by 2-3.4% this year before bouncing back with 7.1-8.1% growth in 2021. The country’s gross domestic product unexpectedly contracted by 0.2% in the first quarter, where business activity was affected by the Taal Volcano eruption, the coronavirus outbreak and the subsequent lockdown in mid-March.

Mr. Diokno’s remarks came after S&P Global Ratings last week affirmed the country’s rating at “BBB+”, just a notch away from an “A” rating which the government was targeting before the outbreak. S&P said the ratings reflect the expectation for a strong recovery by next year and the country’s strong macroeconomic fundamentals.

The debt watcher also maintained the rating outlook at “stable,” signifying that the rating is likely to remain for the next six months to two years.

S&P’s credit rating for the Philippines compares to the “BBB” and “Baa2” ratings both with “stable” outlooks given by Fitch Ratings and Moody’s Investors Service, respectively.

Mr. Diokno said that the path to recovery with the gradual reopening of the economy is still uncertain given that a coronavirus vaccine has not been found.

“We don’t know how the consumers will behave and how the financial market will do. So there’s a lot of uncertainty. Fear factor — that’s the main question here,” he said.

Mr. Diokno said the government needs to do more to clinch the “A” rating. These include the passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), a revised version of the earlier Corporate Income Tax and Incentives Rationalization Act. CREATE eyes to speed up a 5% reduction on corporate income tax to 25% from 30%, and also offers flexible tax and nontax incentives for investors.

Mr. Diokno said they were hoping that President Rodrigo R. Duterte would call a special session to have the bill passed before July. He said it “will send a signal to potential investors that we are improving the policy environment of the Philippines.” — Luz Wendy T. Noble

Weak demand drags Asia CEOs’ rise from pandemic

MORE than half of surveyed business leaders in Asia identified lower demand for products and services as the greatest obstacle for business viability as a result of the pandemic, a new report showed on Thursday.

The latest update to the Chief Executive COVID-19 Global Survey by YPO, an international group of more than 29,000 business leaders, said 53% of CEOs in North and Southeast Asia cited diminished demand as their biggest problem. Their proportion is slightly higher than the 50% of CEOs globally.

Globally, changes in consumer behavior were the second biggest threat as identified by 44% of CEOs, followed by 32% who pointed to operating restrictions from the government.

More CEOs in North and Southeast Asia said that the needed government support for their business was not available, with 31% noting this compared with 28% globally.

The third YPO survey during the coronavirus disease 2019 (COVID-19) pandemic was done on May 27-30 and drew 2,718 respondents. The first survey was in March.

Some business leaders have become more optimistic since the first survey, with 23% of global leaders saying that they are at least slightly more positive about business since March.

Among business leaders in North and Southeast Asia, 35% have taken a more negative outlook, more than their counterparts in the United States and Australia/New Zealand, with 31% and 23%, respectively. But this is less than their counterparts in South Asia and Africa, with at least half of their business leaders reporting a more negative outlook.

While business leaders in Africa are on the earliest response stage or the “immediate response stage” to the pandemic in YPO’s business disruption cycle, Asia is furthest ahead in the business continuity phase. But Asia experienced the smallest month-on-month movement along the cycle since March. No country or region is in the business revival and business recovery phases.

Up to 44% of business leaders in North and Southeast Asia said the resurgence of COVID-19 is a large or severe threat, just slightly more than the 42% of global business leaders.

North and Southeast Asian CEOs are less optimistic about sales and fixed investment than the global response, with 33% expecting sales to be down more than 20% in a year, compared to 29% globally. More than a quarter or 29% of North and Southeast Asian chiefs expect total fixed investment to be down by more than 20% a year from now, while 23% of CEOs surveyed globally said the same.

However, fewer North and Southeast Asian CEOs or 15% expect employee numbers to be down by more than 20% a year from now, compared to the 18% of CEOs globally.

Responses are similar to those of CEOs in Europe and the United States as 14% of them expect a 20% decrease. Meanwhile, more chief executives in South Asia (40%), Latin America (27%), and Africa (24%) expect a decrease in 12 months. — Jenina P. Ibañez

Coca-Cola strengthens digital platforms to drive demand

By Denise A. Valdez, Reporter

COCA-COLA Beverages Philippines, Inc. is boosting its digital platforms to cope with changing consumer behavior due to the coronavirus disease 2019 (COVID-19) pandemic.

Winn Everhart, president and general manager of the local unit of Coca-Cola, said in an e-mail to BusinessWorld the company is now focusing efforts to improve its e-commerce presence to lift consumer demand.

“With the ongoing shift in consumer behavior, we have… observed that a lot are moving into the online world rapidly and we are therefore strengthening our digital and e-commerce platforms,” he said.

The company currently operates a delivery service that sends Coca-Cola products straight to homes. Among these products are carbonated drinks, flavored juice and bottled water.

“Coca-Cola has always been a staple in Filipino households, and we will continue to build on this strength as more drinking occasions emerge at the comforts of their home,” Mr. Everhart added.

In an online forum by BusinessWorld on May 27, Mr. Everhart said Coca-Cola Philippines was being challenged by the lockdown as its beverages used to be commonly consumed in restaurants and sporting events. These venues have shut or limited operations since March to observe quarantine protocols.

“The pandemic’s impact to our business was felt more in the latter part of quarter 1 and this quarter 2 as a result of the lockdowns. However, we are seeing an improvement especially as the lockdowns are lifted and away from home channels like restaurants are also re-opening,” Mr. Everhart said in his e-mail Wednesday.

In a regulatory filing by The Coca-Cola Co., the Atlanta-based parent company of Coca-Cola Philippines, it said unit case volume in the Philippines recorded a 4% growth in the first quarter. Unit case volume is its measure of beverage products directly and indirectly sold to consumers.

The performance in the Philippines is against the drop in unit case volume observed in nearly all countries where Bottling Investments Group (BIG) operates. BIG is the subsidiary of The Coca-Cola Co. that handles bottling operations in most Southeast Asian countries, including the Philippines.

“Unit case volume for Bottling Investments declined 5%. Declines in nearly all of our consolidated bottling operations as a result of COVID-19 were partially offset by 4% growth in the Philippines bottling operation,” the company said in the regulatory filing.

“[T]he outbreak and preventive measures taken to contain COVID-19 negatively impacted our unit case volume and our price, product and geographic mix in all of our operating segments, primarily due to unfavorable channel and product mix as consumer demand has shifted to more at-home consumption versus away from home,” it added.

The Philippines is Coca-Cola’s fourth-largest market in terms of unit case volume in Asia-Pacific in 2019, making up 8% of total volume for the region. The three markets above it are China (38%), India (15%) and Japan (13%).

Despite the challenges brought by the COVID-19 pandemic, Mr. Everhart said Coca-Cola Philippines is positive it will start seeing an improvement in the coming months.

“In our 108 years here in the Philippines, we have always emerged stronger through every crisis and we are optimistic that by supporting our employees, customers, partners and communities, our business will thrive in this next normal,” he said.

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