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PHL slashes GDP growth outlook amid virus fight

PHILIPPINE STAR/ MICHAEL VARCAS
The Philippine economy’s recovery is dependent on the pace of its mass vaccination campaign, which has picked up pace as more vaccines arrive. — PHILIPPINE STAR/ MICHAEL VARCAS

By Beatrice M. Laforga, Reporter

THE GOVERNMENT slashed its growth target for this year and the next, as the renewed spike in coronavirus disease 2019 (COVID-19) cases and strict lockdown curbs hobble the economy’s recovery.

In its 179th meeting on Tuesday, the Development Budget Coordination Committee (DBCC) downgraded its gross domestic product (GDP) growth target to 6-7% from 6.5-7.5% penciled in last December 2020. However, this was still an improvement from the record 9.6% contraction in 2020.

“The emerging GDP growth projection is slightly adjusted to 6-7% from 6.5-7.5% in view of the emergence of new COVID-19 variants and the reimposition of enhanced community quarantine (ECQ) in the National Capital Region (NCR) Plus area during the second quarter of the year,” the DBCC said in a joint statement.

Economic managers expect the economy to return to its pre-crisis level by next year. Next year’s GDP is expected to grow by 7-9%, lower than the previous target of 8-10%. The economy’s growth is seen to slow to 6-7% in 2023 and 2024.

“The effects of the COVID-19 pandemic may remain in the short term, but we are optimistic that the economy will return to its upward growth trajectory starting this year. This can be achieved through the accelerated implementation of the country’s recovery package and rollout of the national vaccination deployment to cover a broader segment of the population,” the DBCC said.

The economy remained in a recession in the first quarter after contracting by 4.2%. This marked the fifth consecutive quarter of decline due to the coronavirus pandemic.

The government has gradually eased the strict lockdown measures reimposed in Metro Manila and its nearby provinces from March to May to curb the virus surge. The daily number of new COVID-19 cases have started to dwindle since then, with only 4,487 new infections recorded on Tuesday from a high of 15,000 last month, according to the Health department.

However, the economy’s recovery is dependent on the pace of the country’s mass vaccination campaign, which has been picking up as more vaccine supplies arrive. The government earlier said 35% of 110 million target Filipinos may be vaccinated against the coronavirus by August.

OTHER TARGETS
The DBCC maintained a 2-4% inflation target range for this year until 2024.

Amid a faster rebound in global economy, 2021 assumptions for growth in goods exports were increased to 8% from 5% previously, while the expansion of goods imports was pegged at 12%, from 8%, previously.

The merchandise exports sector is expected to pick up by 6% each year from 2022 to 2024, while goods imports will rebound faster at 10% next year (from 8% previously), and by 8% in the next two years.

Services exports are expected to increase at 6% over the medium term, while growth in services imports was pegged at 7% this year, and 8% in 2022-2024.

Socioeconomic Planning Secretary Karl Kendrick T. Chua during the briefing said the economy will have to grow by at least 10% in the next three quarters to meet the lower-end of the revised growth target this year.

“The second important element in this assumption is that we begin to accelerate significantly, our vaccination efforts in the areas of highest risk, and that includes the NCR Plus and the larger cities where the cases are quite high,” Mr. Chua said.

The DBCC said the target can be achieved if the government will strengthen its prevention, isolation and treatment strategies; adopt digital tools for its contact tracing efforts; and release P17-billion to fund additional social programs to help affected sectors.

“A version of this proposal is currently being deliberated in the Lower House, and is contingent on raising additional savings and revenues to remain deficit neutral,” economic managers said.

FISCAL PROGRAM
Economic managers also revised their medium-term fiscal program in the next four years.

The DBCC hiked the budget deficit cap to 9.4% of GDP (from 8.9%), after it increased the projected total spending to P4.74 trillion from P4.233 trillion due to the additional funds for the stimulus package and vaccination program. The target for state revenues was kept at P2.88 trillion.

It also raised the estimated deficit-to-GDP ratio for next year to 7.7% from 7.6%, previously. This will go down to 6.4% in 2023 and 5.4% in 2024.

Projected revenues for next year were trimmed to P3.29 trillion from P3.314 trillion, while the expected total disbursements were kept at P4.95 trillion.

For 2023, the economic team expects to generate P3.59 trillion in total revenues and spend P5.11 trillion. This will rise to P4 trillion for revenues and P5.4 trillion for disbursements in 2024.

“The estimated disbursements for 2022 to 2024 already take into account the proposed Growth Equity Fund (GEF), which will be established in line with the implementation of the Supreme Court Ruling on the Mandanas-Garcia case. The GEF aims to assist poorer Local Government Units (LGUs) in addressing the problems of marginalization, unequal development, and high poverty incidence,” the interagency committee said.

SALE OF ASSETS
While the projected debt stock was not disclosed during Tuesday’s briefing, Finance Secretary Carlos G. Dominguez III said they expect the debt pile to remain below 60% of GDP by the end of the year.

“We are preparing to sell assets, essentially, certain large mines that are under the management of the PMO (Privatization and Management Office), and with the developments in copper prices internationally the values of those assets have certainly increased. That will be one of the large sources to fund our future deficit,” Mr. Dominguez said.

The Finance chief maintained that the next stimulus program will be deficit neutral where funding sources will mainly come from realigned budgets and remittances from state-run firms, among others.

The cabinet-level DBCC is composed of heads of the Department of Budget and Management, National Economic and Development Authority, the Department of Finance, as well as the Executive Secretary. The Bangko Sentral ng Pilipinas also sits as the committee’s resource institution.

Maynilad, MWSS ink revised water concession agreement

MAYNILAD WATER Services, Inc. has signed a new concession agreement with the Metropolitan Waterworks and Sewerage System (MWSS), which no longer includes “onerous provisions,” Justice Secretary Menardo I. Guevarra said on Tuesday.

“MWSS has signed (the contract) and it has been transmitted to Maynilad,” Mr. Guevarra told reporters.

“The revised concession agreement between the MWSS and Maynilad contains essentially the same terms as those in the recently signed revised concession agreement between the MWSS and Manila Water Company, (Inc.).”

Maynilad Spokesperson Jennifer C. Rufo on Tuesday confirmed that the company has signed the revised contract, adding details will be disclosed on Wednesday.

Mr. Guevarra said the new deal removed “onerous provisions,” as claimed by President Rodrigo R. Duterte, such as the non-interference clause and its ability to charge corporate income tax to consumers.

“Contingent liabilities of the government have been substantially reduced, and a framework for better service to the public has been put in place,” he added.

Maynilad also signed a waiver on Tuesday terminating all related proceedings to its 2017 arbitral award which directed the government to pay P3.4 billion to the company, Mr. Guevarra said.   

He said Manila Water also signed a waiver when the revised contract was finalized on March 31, terminating all proceedings related to its 2019 arbitral award which directed the government to pay the company P7.3 billion.

Signing the waivers means that the government will no longer pay for the compensation stated in the arbitral award, and that “the arbitral award cannot be enforced by execution or by any judicial process anywhere,” Mr. Guevarra said.

Mr. Guevarra also confirmed that Maynilad agreed to a tariff freeze until Dec. 31, 2022 to assist poor customers and aid the country’s economic recovery after the coronavirus disease 2019 (COVID-19) pandemic, which Manila Water also agreed to.

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

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

Filipinos seen to buy more meat, cut back on rice consumption

PHILIPPINE STAR/ MICHAEL VARCAS
BANANAS will continue to be the top choice of fruit among Filipino households, as prices remain low compared with imported fruits. — PHILIPPINE STAR/ MICHAEL VARCAS

FILIPINOS are likely to spend over a third of their household budget on food by 2025, as they buy more meat and poultry products while cutting back on rice consumption, according to Fitch Solutions Country Risk & Industry Research.

“The average Filipino household will spend 34.5% of the total household budget on food in 2025, increasing by 4.8 percentage points from 29.8% in 2006,” Fitch Solutions said in a note titled “Philippines Dietary Shift Analysis” on Monday.

Fitch said the average Filipino household can afford more than just basic food items, as wages and disposable income rise.

The number of Filipino families with an annual disposable income of $10,000 (approximately about P478,000) will rise to 37.7% of the total in 2025, from 3.9% in 2006, it said.

This scenario is based on the nominal wages growing by an annual 5.8% to an average of P13,487 in 2018 from P6,381 in 2006, Fitch Solutions said citing data from the Philippine Statistics Authority.

“Over this period, we note that food spending will grow by an annual average of 8.9% compared to the annual average inflation rate of 3.5% over the same period, indicating real growth in food spending over this period. As a result, there are several instances of shifts in dietary spending stemming from income growth, with consumers spending a lesser proportion of their food spending on staple food items such as rice, instead opting for animal protein,” Fitch Solutions said.

The average Filipino family is expected to spend more than half of its food budget on meat and poultry; fish and seafood; and bread, rice and cereals by 2025.

Filipinos will likely buy less of bread, rice and cereals, with the food category’s share in total food spending falling to 20.4% in 2025, from 36% in 2006, Fitch said.

Spending on fish and seafood products will rise to 24.2% of total food spending from 12.7% in 2006, while meat and poultry will account for 22.3% of the budget from 17.5% in 2006.

“We highlight that the large increase in spending on fish and fish products is due to its relatively low price compared to other animal protein,” it said.

Fitch Solutions noted per capita consumption of meat and rice is expected to rise to 36.6 kilograms (kg) and 130.7 kg, respectively, “highlighting how meat is increasingly taking a larger portion of per capita consumption.”

“Additionally, we note that the average Filipino meal serving size will increase by 10.6% in terms of total rice and meat consumed. This signifies how the average Filipino is consuming more calories, as their disposable incomes increase,” it said.

Filipino households are still expected to be among the top rice consumers in the region, but spending on rice as a share of total food spending will steadily drop to 13% in 2025, from 25.8% in 2006.

Fitch Solutions noted Filipino consumers will be diversifying their diets by adding more meat, vegetables and fruits.

Beef spending will see “insignificant growth” due to much higher prices and quicker yearly inflation, it said.

Meat products, particularly pork, became a major factor to quicker inflation in recent months amid the African Swine Fever outbreak that has caused supply disruption.

Meanwhile, Filipino households are also expected to buy more fresh and preserved fruits, with bananas maintaining the biggest share in spending.

Fruits will likely make up 5.9% of total food spending in 2025, from 3.3% in 2006.

“The Philippines has a large domestic banana farming sector, resulting in much cheaper prices, compared to other fruits domestically. As such, bananas are a cheap and widely available source of fruit of Filipino households to meet recommended daily fruit intakes,” the think tank said. — Luz Wendy T. Noble

Imported car sales soar year on year in April

IMPORTED car sales surged in April after coming off an extremely low base during the strict lockdown in the same month last year, the industry association said.

In a report on Tuesday, the Association of Vehicle Importers and Distributors, Inc. (AVID) said its 21 members which distribute 26 global brands sold 4,396 units in April, or 24,322% higher than just 18 vehicles sold during the enhanced community quarantine that shut down auto dealerships a year ago.

Although year-on-year sales grew, April sales declined by 13% from the 5,193 units sold in March. The government imposed another set of strict quarantine restrictions in the capital region and its neighboring provinces at the end of March after a surge of coronavirus disease 2019 (COVID-19) cases.

Year-to-date sales went up 40% to 20,353 units.

Passenger car sales surged to 987 in April from just 7 last year, led by sales from Suzuki Philippines, Inc. The category’s year-to-date sales grew 16% to 5,328 units.

Light commercial vehicle sales soared to 3,116 from 11 last year, with a bulk of sales going to Ford Group Philippines, Inc. Year-to-date sales increased by 44% to 14,314 units.

The industry group sold 293 commercial vehicles in April after selling none in the same month last year. Year-to-date sales increased by almost eight times to 711 units.

“With these encouraging figures, I say we at AVID have boldly transformed ourselves and have become even better at what we do, which is to provide our customers an end-to-end mobility experience that best suits the needs of the times,” AVID President Ma. Fe Perez-Agudo said.

Another car industry group recorded a 13,315% sales growth to 17,843 vehicles in April, which it called a record increase since the start of the pandemic last year.

Last month’s sales, however, remain 13.8% lower than March figures, data from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA)  showed.

Imported car sales growth in 2021 is expected to come in at between zero and 20%, depending on the government’s final decision on safeguard duties, Ms. Perez-Agudo said in March.

The Trade department imposed 200-day provisional safeguard duties on imported cars to protect domestic-industry jobs after it found a link between a decline in employment and higher imports, following a petition from an auto parts industry union. — Jenina P. Ibañez

Securities sector faces ‘medium’ risk for money laundering, says SEC

REUTERS

THE Securities and Exchange Commission (SEC) found that the securities sector faced a “medium” risk for money laundering (ML) and terrorist financing (TF), after conducting an overall risk assessment.

The risk rating is based on the 2021 Sectoral Risk Assessment for the Securities Sector, which the SEC conducted with support from the Asian Development Bank.

“It was designed to identify the main criminal offenses and related threats currently being faced by the securities sector, the sector’s vulnerabilities most likely to be exploited for ML/TF purposes, and the potential impact or harm that ML/TF activities and other financial crimes in the sector may cause,” the SEC said in a statement.

The report covered 304 brokers, dealers, investment houses, underwriters of securities, government securities eligible dealers (GSEDs), investment company advisers, mutual fund distributors and investment companies supervised by the SEC.

Money laundering and terrorist financing threats may cause “a diminished level of market integrity” and an adverse impact on earnings and revenue across the sector, the regulator said.

The overall money laundering criminal threat for the securities sector is “medium,” although investment houses and underwriters face a “medium-high” risk. Investment company advisers, mutual fund distributors and investment companies see a “medium-low” risk, while brokers and dealers face “medium” risk and GSEDs with “low” risk.

“The sector attracts various criminal threats, with moderate level of sophisticated tactics and methods to commit offenses. The cheap availability of internet access, increasing functionality of mobile phones, and technological advancements that speed up transactions, while admittedly contributing to the ease of doing business and financial inclusion, nonetheless provide criminals with tools to escape detection or to hide the proceeds of their illegal activities,” the SEC said.

Covered individuals submitted 744 suspicious transaction reports (STRs) worth P11.5 billion to the Anti-Money Laundering Council from 2017 to 2019.

Around 4.9% of the reports were related to plunder, 2.5% to graft and corruption, 0.9% were related to drug trafficking, and 0.6% were linked to fraudulent practices and other violations of the Securities Regulations Code.

“Majority of the transactions were suspected to have been facilitated for the commission of the predicate crimes within the Philippines, while five transactions were suspected to have been committed in China,” the SEC said.

The report also showed the securities sector has a medium to low terrorist financing risk, there were a small number of related reports to the AMLC.

However, the sector has a medium vulnerability rating, as the SEC noted “a significant number of factors” that might make the sector exposed to criminal abuse.

“For instance, brokers or dealers have to deal with high liquidity and the speed at which trades can be made without suspicion, making the sub-sector vulnerable to ML,” it said.   

“Investment houses, which had an overall vulnerability of medium to low, showed significant transactional volume and value. The involvement of legal entities in the STRs filed by investment houses and underwriters of securities indicates the vulnerability of the sub-sector for being abused for crime by such entities.”

Investment company advisers, mutual fund distributors, and investment companies were given a medium risk vulnerability rating, but the SEC found a declining trend in the number of STRs filed with the AMLC. The SEC said this suggests “a need to strengthen its reporting mechanisms.”

Meanwhile, the vulnerability risk for GESDs is low due to banks’ internal audit units and periodic examinations by the Bangko Sentral ng Pilipinas (BSP).

The SEC plans to develop regular reporting mechanisms and processes to collect information on the securities sector on top of providing the guidelines and educational activities on anti-money laundering/combating the financing of terrorism (AML/CFT).

“The commission will also take steps to effectively implement [AML/CFT] risk-based supervisory model through regular off-site and on-site inspections,” the SEC said.

It said it will work with the AMLC and the BSP to ensure AML/CFT supervision. — Keren Concepcion C. Valmonte

GMA, TV5 bullish about 2021 amid absent ABS-CBN

By Arjay L. Balinbin, Senior Reporter

FREE television companies GMA Network, Inc. and TV5 Network, Inc. are bullish about 2021 as they continue to benefit from the absence of ABS-CBN Corp.’s broadcast business.

“We became a beneficiary of that,” TV5 Chairman Manuel V. Pangilinan said at an online forum on Tuesday, referring to the non-renewal by the Philippine Congress of ABS-CBN’s broadcast franchise.

The forum, titled “Philippines in View,” was organized by the Asia Video Industry Association (AVIA).

TV5 used to be considered the “third” media network in the country, according to Mr. Pangilinan. “We are far number two to GMA 7 based on the latest [data], although I’m glad we are inching up,” he added.

For her part, GMA Network Chief Marketing Officer Lizelle G. Maralag said the media company, which saw its attributable net income in 2020 surge to P5.98 billion from P2.62 billion previously, is bullish about 2021.

“We’re bullish. It was very difficult last year, but since we are very resilient… we look at 2021 with optimism and hope, especially that the vaccines are coming in already so that will make protocols more relaxed in so far as producing content is concerned,” she said.

On the impact of the shutdown of ABS-CBN’s broadcast operations on GMA Network, she said: “All of the free-to-air channels have… benefited. When you look at the viewing levels of free-to-air stations, they remain stable.”

“But what was lost was the DTT (digital terrestrial television) part — the viewing part of the business — which is roughly around two percentage points, and therefore… we launched our own DTT device, both box and a plug-and-play device on mobile phones, and we’re seeing the recovery of that part of the business already since third quarter of last year,” she said.

Cignal and TV5 President and Chief Executive Officer Robert P. Galang said the Pangilinan group’s DTH (direct-to-home) satellite pay TV benefited from the shutdown of ABS-CBN group’s Sky Direct.

“There were more than a million subscribers who were disenfranchised with that shutdown. Cignal was the stronger alternative,” he said.

“Free to air for TV5 is also doing very well, and we are seeing that improvements in ratings, audience share, and revenue will continue throughout 2021,” he added.

Alexander Muller, TV5 Monde Asia-Pacific managing director, said the number of linear pay TV subscribers is expected to grow in the “next three to four years, as the middle-class population in the Philippines will be more and more numerous.”

“The great thing in the Philippines is that it is a great market in all forms: linear TV is growing, SVOD (subscription video on demand) is growing, AVOD (advertising-based video on demand) is growing, and mobile is growing. It’s really one of those great markets in Asia-Pacific,” he explained.

Mr. Galang noted that the free-to-air model is still the primary way for Filipinos to access entertainment and news.

“It will remain to be that way, as 95% of the population belong to C, D, and E markets. Most of the homes are really single TV homes, so TV is still the cheapest way to get entertainment content and information,” he said.

“The next stage is pay TV, just like what we have in Cignal. We’re seeing very good growth in our pay TV business, and that happened despite the pandemic. We are very confident and bullish that in the next five years, we will still continue to grow both businesses aggressively,” Mr. Galang added.

In his presentation, BusinessWorld Corp. Head of Research Leo Jaymar G. Uy said the Philippine TV culture has experienced disruptions in the recent years, with more Filipinos seen turning to the internet.

Pay TV market, he said, has also been challenged to thrive and remain relevant amid the disruptions brought by the pandemic, as well as the shutdown of ABS-CBN, Sky Direct, and ABS-CBN TVplus.

“TV viewership has also gone down on aggregate compared with pre-pandemic level, albeit it is showing signs of recovery a year after,” Mr. Uy noted.

Among the trends worth watching are the continuing presence of ABS-CBN on the digital space and through TV5 and Zoe Broadcasting Network’s A2Z, GMA’s recently launched digital channels, and moving of advertising spends to digital, he said.

Petron to deliver ‘good financial performance’ in 2021

By Angelica Y. Yang, Reporter

LISTED oil company Petron Corp. said it is hoping to deliver a good financial showing this year as long as authorities do not impose a stringent lockdown, its top official said on Tuesday.

“We certainly believe it (Petron) will continue to deliver a good performance unless there is a strict lockdown again,” President and Chief Executive Officer Ramon S. Ang said during the company’s annual stockholders’ meeting which was virtually held on Tuesday.

The firm was able to return to profitability by the second half of last year, as its net income from July to December hit P2.8 billion.

Petron’s Chief Finance Officer Emmanuel E. Eraña said during the event that this was a modest recovery from “huge losses” incurred the first half of 2020, which the firm earlier placed at P14.24 billion.

“The results from last two quarters of 2020 fueled our optimism as we entered 2021,” Mr. Eraña said, citing Petron’s first-quarter consolidated net income of P1.73 billion.

He added that the company’s refinery in Bataan served as the main import facility which ensured a stable and reliable supply of petroleum products during the global health emergency.

For Mr. Ang, Petron’s 180,000 barrels-per-day refinery is “very competitive,” and the firm sees no reason in shuttering the facility.

“In fact, we are set… to restart the refinery this coming June, unless there is a hard lockdown and the volume drops down tremendously,” he said, adding that the refinery remains a viable business.

Previously, Petron temporarily halted the operations in its Limay refinery in February to reduce losses due to weak margins.

Sought for comment on the impact of the coronavirus disease 2019 (COVID-19) pandemic on Petron’s overall financial performance, Mr. Ang said that volume sales were affected.

“Pandemic has brought down the volume of Petron. Revenue-wise, we are down practically 44% decline and volume drops by 27%,” he explained.

“Luckily, Petron’s balance sheet is very strong, and we have prepared the company to be able to weather this kind of storm. Rest assured that this company will survive and will make good return for everyone,” he added.

Petron’s attributable net income for the three months ending March stood at P1.4 billion, swinging from losses of P4.61 billion in the same period last year, even as the number of oil barrels sold declined and revenues decreased during the period.

Shares of Petron in the local bourse shed 0.32% or 1 centavo to close at P3.09 apiece on Tuesday.

Ty’s GT Capital core income up 19% to P3.4B

GT Capital Holdings, Inc. posted a 19% growth in core net income in the first quarter to P3.4 billion from P2.8 billion year on year on the back of the performance of Metropolitan Bank & Trust Co. and Toyota Motor Philippines Corp.

“The solid performance of Metrobank and the strong rebound in the auto business led to significant earnings growth for GT Capital in the first quarter,” Carmelo Maria Luza Bautista, president of GT Capital, said in a statement on Tuesday.

The Ty-led conglomerate said its consolidated net income amounted to P4.1 billion for the period, soaring by 60% from P2.5 billion a year ago.

For the first three months of 2021, Metrobank’s net profits went up by 27% to P7.8 billion from P6.1 billion as non-interest income increased by 28% to P7.9 billion.

“With nonperforming loans ratio stable at 2.4%, the bank was able to reduce provisions by 50% year on year to P2.5 billion,” GT Capital said.

Meanwhile, Toyota’s consolidated net income improved by 39% in the January-to-March period to P2 billion from P1.4 billion a year ago. Consolidated revenues also went up by 18% to P33.9 billion from P28.8 billion.

Its retail vehicle sales totaled 33,095 units, while 74,585 units were sold in the automotive sector. GT Capital said Toyota earned a record 44.4% overall market share in the first quarter.

Toyota launched a new Innova unit in February, and the Vios GR Sport and a new Vios in March.

“We look forward to our entry into the pre-owned vehicle segment, through our joint ventures with JBA Philippines and Premium Warranty, which will continue to expand our automotive value chain footprint,” GT Capital Auto Dealership Holdings, Inc. Chairman Vince S. Socco said.

Real estate arm Federal Land, Inc. saw its consolidated net income fall by 12.8% to P327 million from P375 million last year as pandemic restrictions continued to affect construction and sales activities. Its topline went down by 27% to P2.4 billion from P3.3 billion.

Federal Land’s reservation sales for the quarter amounted to P3.5 billion, suffering a 55% fall from P7.9 billion a year earlier. Lease revenues also declined by 12.8% to P327 million from P375 million.

Meanwhile, Metro Pacific Investments Corp.’s (MPIC) consolidated core income declined by 26% to P2.5 billion for the first three months from last year’s P3.4 billion.

However, GT Capital said: “Compared to the 34% full-year decline in 2020, the first-quarter earnings decline of 26% shows a gradual improvement in performance, notwithstanding the continuing quarantine across the country.”

Of MPIC’s total operating income, power made up for 66% or P2.5 billion, toll roads accounted for 21% or P783 million, and water contributed 14% or P534 million. Other businesses like hospitals, light rail, and logistics incurred a P49-million loss altogether.

“Consolidated reported net income rose 272% to P7.0 billion in the first quarter, benefitting from the gain recognized from the sale of Global Business Power and Don Muang Tollways,” the company said.

Insurance firm AXA Life Insurance Corp. “also supported GT Capital’s performance during the period,” as its consolidated life and general insurance gross premiums amounted to P12.5 billion. It is a 32% hike from last year’s P9.5 billion.

AXA Life’s consolidated net income in the first quarter declined by nearly 12% to P324 million from P367 million year on year.

GT Capital is remaining optimistic for the rest of 2021.

“We look forward to the escalated vaccine deliveries by the second half, the faster inoculation of the general public, and the reopening of more sectors of the economy,” Ms. Bautista said.

Shares of GT Capital at the stock market went up by 0.57% or P3 to close at P530 each on Tuesday. — Keren Concepcion G. Valmonte

DMCI expects return to pre-pandemic levels in 2023

DMCI Holdings, Inc. said it expects to revert to pre-pandemic levels starting 2023, as the firm anticipates the recovery of its units amid the global health emergency.

“Considering the (coronavirus disease) vaccine rollout is only starting, it will probably end by the first quarter of next year. So, the side effects of this pandemic would probably end up at the end of 2022. So, pre-pandemic economic condition will probably begin in 2023,” DMCI President and Chief Executive Officer Isidro A. Consunji said during the company’s annual stockholders meeting, which was virtually held on Tuesday.

He made the comment when asked about when DMCI is expected to return to pre-pandemic profits.

During the event, he gave an outlook on several units under the holding firm, including its construction, real estate and power segments.

Mr. Consunji, who is also DMCI chairman, said that he expects a strong bounce-back from the firm’s construction arm D.M. Consunji, Inc. this year, because of its substantial order book, higher barracks capacity and additional workers.

“Productivity is also higher because unlike last year, essential and priority infrastructure projects are allowed to continue even during ECQ (enhanced community quarantine),” he said.

He said the firm’s real estate segment DMCI Homes is likely to fare better this year due to its considerable unrecognized revenues, better construction productivity and efforts in optimizing resources. But he noted that “softening demand for mid-segment projects caused by job insecurity and unemployment may negatively impact its profitability by 2023.”

However, he is optimistic that resort-type developments will sustain buyer interest.

Mr. Consunji said that the firm expects the earnings of its coal producer Semirara Mining and Power Corp. (SMPC) to improve on the back of better market conditions. But the water seepages at the Molave North Block 7 in Antique and prolonged outage of a unit of its Calaca power plant will “temper” the company’s financial results.

Operational headwinds will likely persist for SMPC, he said.

He added that mining unit DMCI Mining Corp. could increase its reserves by 276 million wet metric tons, if all pending mineral production sharing agreements are approved.

Mr. Consunji also gave updates on DMCI Power Corp., which is continuing with its expansion plans. He said the unit begun the construction of a 15-megawatt (MW) thermal plant in Palawan, which is seen to stabilize power supply in the area.

DMCI Power is also building a 4-MW hybrid solar-diesel plant in Masbate that is targeted to go online by next year.

Mr. Consunji said that DMCI intends to participate in the government’s Build, Build, Build (BBB) program as joint-venture partner or sub-contractor, since the projects “will not allow DMCI to participate as a single entity.”

DMCI’s first-quarter attributable net income rose by nearly seven times to P4.25 billion, from P616.45 million in the same period last year.

Shares of DMCI in the local bourse improved 0.37% or 2 centavos to close at P5.46 apiece on Tuesday. — Angelica Y. Yang

Bringing art into the workspace

WORKS from Modeka X KMA exhibit ‘Defy Limits: Art at KMC’ exhibit.

DURING the strict lockdowns, workspace provider KMC Solutions offered the employees of its member brands a very stable desk, a chair, and a computer or laptop while they worked from home. When restrictions eased, employees didn’t have to come to the city but were allowed access to workspaces within the proximity of their residences. And now they can view art as they work as, for the first time, KMC Solutions, is showing art in its co-working spaces in a team up with Modeka Art.

The workspace provider adds creativity to its co-working space at the KMC Podium West Tower with its first Modeka Art pop-up exhibit, “Defy Limits: Art at KMC.”

As a workspace provider, KMC Solutions offers office spaces to more than 400 global brands and local businesses across multiple industries in the Philippines. It currently has more than 55 flexible workspaces in over 23 locations around Metro Manila, Cebu, Clark, and Iloilo.

Meanwhile, Modeka Art, which opened in 2019, is an independent, artist-led contemporary art gallery, creative space, and art consultancy located in Makati.

“There have been many studies showing how workplace design and aesthetics can improve well-being. It was in this spirit that we decided to partner with Modeka Art to bring in their paintings from great local artists. We wanted to further enliven our already thoughtfully designed workplaces with even more art at a time people need it the most,” Gian Reyes, Vice-President of Marketing and Strategic Partnerships at KMC Solutions, said in a statement.

“[The artworks] really add beautiful and attractive content to the offices and the KMC community. Having Modeka Art displaying the art of their artists to our portfolio of offices, really adds to the vibe and the interior design,” Gregory Kittelson, Chairman of KMC MAG Solutions, said during an online press launch on May 17 held via Google Meet.

Curated by Stephanie Frondoso, “Defy Limits: Art at KMC” features paintings, sculptures, photos, and sketches by 270501, AK Ocol, Alyssa Hueze, Aze Ong, Bjorn Calleja, Buboy Cañafranca, Dini Nur Aghina, Gary Ross Pastrana, Geremy Samala, Jed Escueta, Jolo Salvador, Mac Valdezco, Mara Fabella, Miles Villanueva, MM YU, Monica Delgado, Nasser Lubay, Pablo Bermudez, Peter Yuill, Romina Diaz, and Rosit Mulyadi.

The pop-up exhibit takes the experience of art appreciation outside the usual gallery setting, bringing it to a wider audience.

“From the very start of Modeka Art, we have always been championing new ways of experiencing and collecting art. While the industry is moving digital, being able to enjoy art in person is still challenging during these times,” Riccardo Corsini, founder and Creative Director of Modeka Art said in a statement.

During the online press launch, Mr. Corsini said that the pandemic has allowed the art community to expand its audience by going virtual since most people are spending their time at home. The galleries have been able to rethink their business model and create a digital strategy, going beyond a physical stage.

Mr. Kittelson is looking into the idea of expanding the partnership to various branches. “We would love to see Modeka Art’s artworks through our offices continuously,” he said.

Tenants and guests who will visit the pop-up exhibit must schedule an appointment (https://kmc.solutions/defy-limits-art-at-kmc-podium-west-tower/) to comply with health and safety protocols. An online declaration form has to be accomplished prior to entering.

“Defy Limits: Art at KMC” is open for viewing until Aug. 14. The KMC Podium West Tower is at the 26th and 27th Floor, Ortigas Center, Mandaluyong City. For more information, visit KMC Solutions at https://kmc.solutions/ and Modeka Creative Space at https://modeka.space/. — Michelle Anne P. Soliman

DoubleDragon nets P6B in 2020, P444M in first quarter

DOUBLEDRAGON Properties Corp. said on Tuesday its consolidated net income in 2020 amounted to P6.03 billion, a 43.38% drop from its P10.65-billion income in the previous year as revenues also declined.

The company’s topline went down by 29.41% to P14.26 billion from P20.20 billion “mainly due to the absence of substantial fair value gains booked the prior year,” it said in a statement on Tuesday.

DoubleDragon’s recurring revenues amounted to P4.10 billion in 2020, improving by 3.9% from P3.95 billion due to the 10.2% growth of its rental revenues to P3.90 billion from P3.27 billion.

The company now has a portfolio spanning 1.024 million square meters of gross floor area.

Its 41 retail malls nationwide are said to maintain a 90.53% occupancy rate “as [the] majority of the leasable space in CityMalls are dedicated to essential services such as supermarket, pharmacies, clinics, and banks.”

The office portfolio of DoubleDragon’s real estate investment (REIT) trust, DDMP REIT, Inc., also has an occupancy rate of 97.23% due to the stable office sector.

Meanwhile, 518 rooms of its Hotel 101 chain in Manila were 80.1% occupied in 2020 despite the pandemic restrictions. The company said that the occupancy rate bumped up to 86.39% in the last quarter of the year.

For the first three months of 2021, the company generated P443.81 million in consolidated net income, down by 40.41% from P774.74 million a year ago.

Consolidated revenues declined by 20.72% to P1.52 billion, which is also due to the absence of fair value gains booked in this year compared with the same period last year.

Recurring revenues grew by 11.44% to P1.03 billion in the first quarter from P927.91 million on the back of a 15.75% rental revenue climb, which totaled P897.05 million for the period.

The company’s total equity increased by 20.73% to P59.23 billion in the January-to-March period after the initial public offering of its REIT, which is “substantially higher” than the company’s total debt.

“2021 is a milestone year for DoubleDragon as its debt-to-equity (D/E) ratio is only at 0.77x vs the maximum allowable cap of 2.33x making DD (DoubleDragon) now among the listed companies in the Philippines with the lowest D/E ratio,” DoubleDragon Chairman Edgar “Injap” J. Sia II said in a statement.

On Tuesday, shares of DoubleDragon at the stock exchange went down by 0.49% to close at P12.12 each. — Keren Concepcion G. Valmonte

The beauty of the Philippines’ blades

Book Jacket

By Jonathan Best

Book Review
A Warrior’s Armament
and Ornament: The Edwin R. Bautista
Collection of Philippine
Bladed Weapons
Published by the
MusKKaT Museum

THE RECENTLY published fine arts book, A Warrior’s Armament and Ornament is a collection of scholarly essays documenting the Edwin R. Bautista collection of Philippine antique and vintage bladed weapons which were recently acquired by the MusKKaT museum. The Museo ng Kaalamáng Katutubò (MusKKat) is a foundation engaged in museum development, cultural education, material culture research and conservation, a long term philanthropic project of the Unilab Corporation based in Mandaluyong City, Metro Manila. The museum does not have its own permanent building yet and currently uses offices at the Unilab headquarters in Mandaluyong with its own archival storage and state-of-the-art conservation facilities in Laguna province south of Manila. The Museum has a small highly trained staff headed by Director Corazón S. Alvina, the former director of the Philippine National Museum and author of numerous books and articles on Philippine art and culture.

Over the last few years, the MusKKaT museum has been assembling an impressive collection of Filipino ethnological material, textiles, wood carvings, antique and vintage weapons, indigenous metal work, betel nut boxes, maps and other ethnological reference books and documents. Their collection, which will eventually be available for public display, has been gathered locally and from various international sources. Currently, during the pandemic, the museum is busy with its publishing projects and hosts informative lectures and online cultural and educational events.

Their latest publication, a 217-page full color, hardbound, large format edition is the museum’s second major publication. Their first was a study of the insular communities living on the Batanes Islands north of Luzon. Due to its size and copious full-page illustrations, this new publication could easily be mistaken for just another elegant coffee table book. However, this book is not only for display or casual browsing as a great deal of very serious scholarship and painstaking research has gone into its production. All the items illustrated in the book have extensive descriptive captions and are accompanied by their museum accession numbers.

Ms. Alvina is the book’s primary editor and she has put together a distinguished team of well-trained experts in the field of Filipino material culture, crafts and art conservation. The original owner of this valuable collection of Filipino bladed weapons, Edwin R. Bautista, spent many years assembling hundreds of items, primarily long knives, daggers and swords known locally as kampilan, kris, bolo, tálibong, and countless other names for weapons with various shapes, sizes, and different function, and local origin. Each category of weapon has its own distinctive blade, hilt, pommel, and sword guard and is usually accompanied by ornamented leather, wooden, or metalic scabbards or sheaths.

Mr. Bautista is a native of Iloilo and is currently CEO of Union Bank in Manila. He is a board member of the Philippine Map Collectors Society (PHIMCOS), and a trustee of the Museo Iloilo in his home province. He provides an opening essay for this book, giving an outline of how and why he amassed this comprehensive collection which he has now very generously donated to the MusKKaT Museum.

The other contributing writers are Jaime C. Laya Ph.D., who provides the official introduction and a synopsis of the book; Patrick D. Flores Ph. D., the noted art historian and curator who writes on the physicality and functionality of the bladed weapons; Eusebio Z. Dizon Ph.D., who gives an “archaeo-metallurgical assessment” of the subject collection; Narciso C. Tan, an avid researcher and collector of Philippine ethnological material, writes on the weapons of Northern Luzon; and, Lorenz Lasco, another major collector and Southeast Asian scholar, who writes on the social, spiritual and talismanic significance of the weapons and their ornamentation.

In addition to the principal writers there are a number of shorter ancillary contributions which give helpful insights into the collection’s social and artistic significance. Ms. Alvina offers a descriptive list of materials used for the weapons and their adornment: bone, ivory, leather, mother-of-pearl, giant clam shell, turtle shell, bamboo, coconut shell, cotton, rattan, hardwood, and numerous locally forged metals such as brass, bronze, copper, gold, iron, nickel, and silver. Focusing on the form and function of these indigenous materials elucidates how the weapons were very much a product of the Philippine’s indigenous culture and tropical, archipelagic environment.

Orlando V. Abinion, the former head of the conservation department of the National Museum of the Philippines, gives pointers on the proper care and handling of metal artifacts. Raymond Santiago, the registrar of the UNILAB and MusKKaT Museum’s collections, writes a short, well researched, piece on the traditional leaf shaped barong of Mindanao and Sulu, while Rosch Emille C. Manuel writes on the kris knives of Sulu and Muslim Mindanao. Jose Ma. Lorenzo P. Tan, the well-known naturalist, writer, and photographer, discusses the curve bladed panabas which was used for both agricultural work and warfare. Samuel M. Briones gives the history of the famous wavy bladed gunong of the Maranao and the superstitions regarding its shape and length.

Photographer At Maculangan’s full color illustrations are handsomely set off against dramatic black or sheer white backgrounds, showing full length weapons and sharply focused details of the ornamentation. Narciso C. Tan’s essay is well illustrated with contemporary and vintage photographs of weapons from his and his wife Sharon Ann Azarcon Tan’s own extensive weapons and photograph collection.

Overall the book is handsomely laid out and complete with an essential bibliography and well researched end-notes — unfortunately these are somewhat difficult to read given their small font size.

Since the introduction of forged metals many centuries ago, and before guns became ubiquitous, knives, swords, and spears were the universal personal weapons of choice for armed men and occasionally of women as well. Bladed weapons have also had many other important functions other than just for hand-to-hand combat or for warfare — they are important utilitarian tools for agriculture and hunting and have also been used as ceremonial insignia of rank and social status, as well as simply for prestigious adornment in societies ranging from the primitive to the most refined and civilized.

The Philippines may not have achieved the same levels of opulence as the royal courts of the traditional Hindu rajahs and Islamic sultans of India, Malaysia, and Indonesia with their magnificent gold, ivory, and jewel-encrusted ceremonial and prestige weapons. However, many of the designs and decorative motifs, birds’ heads, leaf scrolls and mythical, symbolic talismans from these countries are subtly reflected in the simpler Filipino weapons from Sulu, Mindanao, and even the Visayas as seen in this collection. Traders, seafaring peoples, and pirates were very active throughout Southeast Asia for many centuries before the Europeans arrived and continued exchanging goods and ideas after the Spanish began colonizing the Philippines, so this is not surprising.

This elegant book, A Warrior’s Armament and Ornament, makes an important contribution to the study of the Philippine’s material culture and examines the esthetic details and historical development of these weapons throughout the Philippine’s ethnically diverse archipelagic communities. The obvious influences of greater East Asian and Southeast Asian cultures found in these items helps to further identify the Philippines’ place in the history and cross currents of Asian civilization. For Filipino scholars and for the general reader, this book is a beautiful and fascinating look at material which helps instill greater pride in indigenous craftsmanship and shared history.

A Warrior’s Armament and Ornament was published as a limited edition and sells for P5,000. It can be ordered directly from the MusKKat Museum via e-mail: administrator@muskkat.org.

Jonathan Best is the senior consultant for the Ortigas Foundation Library, Greenhills, Manila.

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