Peso slips on US-China tensions as oil prices creep back up

May 22, 2020 | 6:26 pm

THE peso weakened Friday on negative market sentiment after a new round of US-China tensions as well as higher oil prices.

The peso closed at P50.70, against its P50.61 close Thursday, according to data from the Bankers Association of the Philippines.

The currency strengthened week-on-week from its P50.76 per dollar close on May 15.

The peso opened at P50.73 against the dollar. It was weakest intra-day at P50.80 while the high was P50.70.

Dollar volume fell to $675.1 million from $778.6 million Thursday.

A trader said that the peso weakened after US-China trade tensions flared again over legislation related to China’s handling of Hong Kong affairs.

“The peso weakened on safe-haven demand after the US Senate reportedly approved a bill to impose sanctions on Chinese officials due to a new security law on Hong Kong,” he said in an e-mail.

Reuters reported that US senators from both sides of the partisan divide said they will impose sanctions on China for violating Hong Kong’s autonomy.

A Chinese official said Thursday that Beijing is looking at new national security legislation for Hong Kong to contain unrest. President Donald J. Trump responded that Washington would react “very strongly” to such a move.

The US bill will also impose secondary sanctions on banks that do business with entities found to violate the law safeguarding Hong Kong’s autonomy.

Rising oil prices also took their toll on the peso, according to Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

“The peso was also weaker after global crude oil prices reached new two-month highs,” Mr. Ricafort said in a text message.

Oil prices posted a fourth straight week of gains as fuel demand continues to recover with countries easing pandemic restrictions.

Reuters said Brent crude rose 0.4% to $36.20 a barrel early Friday, after gaining nearly 1% on Thursday. The contract is heading for a more than 10% climb for the week.

The price of West Texas Intermediate cruderose 0.2% to $33.97 a barrel, having gained more than 1% in the last session. The US benchmark is on track to rise 15% week-on-week. — Luz Wendy T. Noble

Our new normal should be a green one—WWF

May 22, 2020 | 11:34 am

Businesses have ground to a halt and whole industries have dried up as we enter into the third month of modified lockdown measures. As we progress ever further into our quarantine journey, the question remains – what will our post-pandemic world look like? With all this talk about shifting to the new normal, we also have to think about the bigger implications in terms of making economic recovery more ecologically-responsive and sustainable.

The argument for sustainability and environmental responsiveness

Atty. Angela Ibay, WWF-Philippines Head of Climate and Energy, lays out three arguments for businesses and cities to become more sustainable:

“First, we need to be more self-reliant as a country, even in terms of our energy needs,” she said. Much of the coal we use to power our plants is imported. With whole countries in lockdown, this importation has stopped. Meanwhile, we have abundant indigenous and renewable energy sources right here in the Philippines, that are ready and available for use whenever we need them.”

According to the Department of Energy, the country’s renewable energy potential is vast with at least 4,000 megawatts (MW) for geothermal, 76,600 MW for wind, 10,000 MW for hydropower, 5 kilowatt-hours per square meter per day for solar, 170,000 MW for ocean, and 500MW for biomass. The recent proposed auctioning of 2,000 MW and identification of competitive renewable energy zones (CREZs) of renewable energy capacity is a good start, Atty. Ibay says.

“However, we need to be able to support ourselves, which is why we must continue to explore and use these renewable sources of power. ”

Atty. Ibay continues by outlining a second need: To address our looming power needs.

“The lockdown has caused a delay in the construction and commissioning of several fossil-fueled power plants that had been slated for operation,” she said. “This could lead to supply challenges in the future. Commercial and industrial power demand may have decreased during the lockdown, but this has been offset by an increase in power demand from our own homes. Once community quarantines are lifted or eased, we can expect a surge in demand. There is immense opportunity, therefore, for us to plug our growing gaps in local power production, if only we were to tap into our bountiful sources of clean, renewable, and indigenous energy and implement stronger energy efficiency initiatives.”

Finally, Atty. Ibay says we need to stray away from thinking that our economic recovery will be a choice between livelihood and the environment.

“The dichotomy… does not exist,” she said, stressing that sustainable business can easily meet our needs as a country.

“We’ve seen that investing in natural capital for ecosystem resilience, especially in climate-responsive sectors such as sustainable agriculture, does not only come with the associated environmental and health benefits, but can also provide a much needed economic boost,” she said. “It is possible for our economy to recover on the back of green industry, so long as companies are innovative and we create the environment for sustainable businesses to thrive. It is not a choice between the economy and the planet.”

Making the new normal green

According to Atty. Ibay, we can look to investments in clean energy infrastructure, clean research, and the greenification of private and public spaces as a way to expand the economy while addressing the looming climate crisis.

The Bangko Sentral ng Pilipinas recognizes this with their recent sustainable banking framework, which integrates sustainability in the banking sector with increasing financing flows and investments to green and sustainable economic development.

The pandemic has forced us to dramatically rethink and recalibrate our way of life, Atty. Ibay said. Hopefully, we will see this crisis as an opportunity to rebuild our economies for a better and more equitable future, one that is more resilient to systemically disruptive factors such as pandemics and climate change.

Nationwide round-up

May 22, 2020 | 1:00 am

FDA warns vs misleading ads on disinfectants

THE Food and Drug Administration warned the public against “misleading advertisements” on disinfectants that supposedly decrease the risk for coronavirus disease 2019 (COVID-19).

In an advisory, the FDA said the advertisement of SDS Blocker Anti-Virus and Virus Shut Out employ “deceptive marketing and promotion.”

“These products shall not, in any way, cure and specially kill viruses and bacteria and any other disease, and should not bear any misleading, deceptive and false claims on their label and/or any promotional material that will provide erroneous impression on the product’s character or identity,” the advisory read.

The FDA further warned that exposure to ingredients such as chlorine dioxide or chlorite through inhalation and skin contact may cause irritation in the mouth, esophagus, or stomach, shortness of breath and other respiratory problems.

The agency also noted that “there are no specific treatments for COVID-19.”

“Everyone is encouraged to follow accurate public health advice and guidance from the Department of Health and World Health Organization on basic protective measures against COVID-19 like handwashing, respiratory etiquette and physical distancing,” FDA said.

It also directed stores to stop using such “misleading advertisements and promotions.” — Vann Marlo M. Villegas

P77M aid alloted to artists

THE National Commission for Culture and the Arts (NCCA) has allocated almost P77 million worth of aid to artists affected by the coronavirus disease 2019 (COVID-19) crisis.

NCCA Executive Director Al Ryan S. Alejandre said in a briefing on Thursday that they have budgeted “around P76.8 million” to help about “14,520 freelance cultural workers in 19 sectors.”

“Malaki ang epekto ng COVID sa ating mga artists and cultural workers sa Pilipinas kasi marami sa kanila ay freelancers (COVID has a huge effect on our artists and cultural workers in the Philippines because many of them are freelancers),” Mr. Alejandre said.

NCCA Deputy Executive Director Marichu G. Tellano, meanwhile, said they are studying other ways to continue their programs lined up for the year without violating public health safety protocols.

She said while some projects have been moved to the online platform, they will hold consultations in June to explore other possibilities.

The NCCA and the Cultural Center of the Philippines (CCP) are also assessing the fate of performing arts companies under CCP as leisure activities remain prohibited under the relaxed quarantine policy. NCCA Chairman Arsenio “Nick” Lizaso is also the president of CCP. — Gillian M. Cortez

LTO releases IRR for bigger number plates for motorcycles

THE Land Transportation Office (LTO) has released the implementing rules and regulations (IRR) of Republic Act No. 11235, the Motorcycle Crime Prevention Act, which requires bigger rear and front number plates for motorcycles.

The IRR, dated May 11, 2020 and signed by LTO Assistant Secretary Edgar C. Galvante, was published in newspapers on Thursday.

Section 5 of the IRR requires the LTO to issue a set of bigger, more readable, and color-coded number plates for every motorcycle.

For the rear, it will be a metal number plate 235 millimeters in width and 135 mm in height. A decal number plate with a 135×85-mm size will be displayed in front.

According to the IRR, both number plates will bear a unique combination of alphanumeric characters.

“The contents of the number plates shall be readable from the front and the back of the motorcycle from a distance of at least 15 meters from the motorcycle. For this purpose, all motorcycles shall have a rear plate light,” the IRR says.

“The utilization of voluntary and paid labor from prisoners shall be among the requirements to bid for the procurement of the number plates.”

President Rodrigo R. Duterte signed the Motorcycle Crime Prevention Act on March 8 last year.

The law is intended to prevent and penalize the use of motorcycles in the commission of crimes with the installation of more visible plates.

The new law also states that color coding would serve as an identifying mark per region. — Arjay L. Balinbin

Charges over quarantine violations vs metro police not going away

METRO MANILA’s police chief, Debold M. Sinas, is still facing charges for violating quarantine protocols despite President Rodrigo R. Duterte’s decision to keep him at his post.

In a briefing on Thursday, Palace Spokesperson Harry L. Roque said, “Malinaw sinabi ni Presidente. Sa ngayon mananatili s’ya pero kung ano ang mangyayari sa susunod na araw, ating hintayin po (What the President said is clear. For now, he (Sinas) will stay but what will happen in the next days, let’s wait and see).”

Photos of a birthday celebration held for Mr. Sinas on May 8, posted by the National Capital Region Police Office (NCRPO), showed violations of public health safety standards and the liquor ban.

The photos circulated online and drew public flak. The NCRPO has since removed the images.

President Rodrigo R. Duterte earlier this week called Mr. Sinas a good and honest man, and said he will not remove the NCRPO chief from his post.

Criminal charges against Mr. Sinas were filed last week along with 50 other policemen present in the gathering.

The Philippine National Police (PNP) said on Wednesday that the probe on Mr. Sinas will continue.

PNP Chief Archie F. Gamboa has said he stands by Mr. Sinas, adding that he will be hard to replace considering his programs that will help beat the coronavirus pandemic.

Meanwhile, over 1,100 persons were accosted by police officers for breaching quarantine protocols, a day after the President defended Mr. Sinas.

PNP data released Thursday show 1,152 persons were apprehended since Wednesday.

Of the total violators, 918 were from NCR.

From March 17 to May 20, a total of 177,540 persons have been rounded up by authorities for allegedly defying quarantine protocols, 52,535 of whom ended up in jail. —Gillian M. Cortez and Emmanuel Tupas/PHILSTAR

BoI-approved investments plunge

May 22, 2020 | 12:33 am

By Jenina P. Ibañez, Reporter

THE Board of Investments (BoI) saw pledges sink by 71% in the first four months of 2020 as the coronavirus disease 2019 (COVID-19) disrupted economic activity in the country.

The BoI, which accounts for the bulk of planned projects registered with investment promotion agencies (IPA), on Thursday said it approved P84.1 billion year-to-date in April, well below the P286.7 billion in the same period last year.

Domestic investments fell 68% to P70.7 billion from a year earlier, while foreign investments dropped 80% to P13.4 billion from P66.9 billion.

“We have chosen to carefully re-confirm with proponents their commitment to pursue even in this environment. So far, the investors remain solidly optimistic about the medium-to-long-term prospects of the country,” BoI Managing Head Ceferino S. Rodolfo said in a statement.

The BoI, he said, has shifted to providing support for firms to continue business operations during the lockdown which started in mid-March.

For full-year 2019, total approved commitments among investment promotion agencies rose 112.8% to P390.11 billion. BoI contributed 86.1% of total foreign direct investment pledges at P335.74 billion.

American Chamber of Commerce of the Philippines Senior Advisor John Forbes in a mobile phone message on Thursday said that businesses have prioritized its response to the pandemic and have delayed expansion plans.

“Going forward, the Philippines will have to work together and harder to see the country as an investment site vis-a-vis competitors. Fortunately, many companies are looking at locating in or expanding to Southeast Asia and we hope (they) will consider the Philippines,” he said.

The four months to April saw transportation and storage investments at BoI reach P60.2 billion, or 71% of the total figure. Real estate investments reached P8.8 billion, followed by manufacturing (P5.3 billion), power (P4.2 billion), and accommodation (P3.8 billion).

The 70 projects — down 23% from a year earlier — are expected to create 11,055 jobs, which are also 23% below last year’s 14,409.

Among foreign pledges, investments from France topped the list with P1.5 billion, while Japan followed with P790 million. Malaysia followed with P601 million, while investments from India and the United Kingdom were valued at P325 million and P156 million, respectively.

Among those approved in April were Anflo Banana Corp.’s P616-million banana production project in Davao Oriental, and Maclin Electronics, Inc.’s P132-million project in Rizal.

In an online press conference on Wednesday, Mr. Rodolfo said the Philippines attracted almost P1.6 billion in realized investment projects that have relocated from China. Most were approved in late 2019.

The biggest was a P1.2-billion tennis ball manufacturing project by a Netherlands-based company. Five projects were from Taiwanese companies, and one from the United States. Six were registered at PEZA.

Mr. Rodolfo said he does not want to position the Philippines as an “alternative” destination from China.

“We have never positioned the Philippines as a country that will steal investments from China, but rather we present the Philippines as a complementary site for businesses in China to help them cope with the…US-China trade war,” he added.

The Philippines is targeting 135 foreign companies in its industry promotion strategy, including 64 China-based companies affected by the trade war and 16 Wuhan-based companies affected by the pandemic.

The Philippines has generated 24 business leads, with 12 from Taiwan, seven from Japan, three from China, and two from the US.

Mr. Rodolfo said investment promotion initiatives include encouraging the expansion of existing companies, engaging with target companies and existing leads, and developing digital marketing initiatives.

But there are challenges in attracting companies while businesses are put on hold during the pandemic and some foreign governments encourage companies to re-shore operations. Mr. Rodolfo added that China remains attractive to investors.

REPURPOSING MANUFACTURING
The BoI has been working with the private sector to repurpose export manufacturing activities to produce medical products and personal protective equipment (PPE) to help the domestic market address the COVID-19 crisis.

MedTecs International Corp. Ltd. and Yokoisada Philippines Corp. have been producing face masks, with the former committing to produce 10 million pieces each month from May to July.

BoI is also working with several companies to produce more medical or non-medical grade face masks, disinfectant alcohol, face shields, and ventilators, while garment exporters are producing protective coveralls.

Mr. Rodolfo said the Philippines is facing constraints in acquiring needed medical products and PPEs due to global supply shortages and export bans. The country needs N88 surgical mask middle filters, N95 masks, medical-grade gloves, and medical-grade fabric for PPEs.

He said the country needs to locally produce active pharmaceutical ingredients for COVID-19 drugs and test kits, and must prepare to produce COVID-19 vaccines once it has been developed.

Trade Secretary Ramon M. Lopez said the government is working to increase local production of medical-grade masks.

“As a result, from a pre-COVID capacity of just about 7 (million) masks and all directed to the export market; the Philippines, by end of this month, would already have an actual capacity level of close to 25 (million) masks for the domestic market,” he said.

Inflation for low-income households speeds up in April (2020)

May 22, 2020 | 12:32 am

INFLATION, as experienced by low-income families, accelerated in April as lockdown measures were implemented to contain the spread of the coronavirus disease 2019 (COVID-19), the Philippine Statistics Authority reported on Thursday. Read the full story.

Inflation impact on poor picks up in April

May 22, 2020 | 12:32 am

By Lourdes O. Pilar, Researcher

The inflation rate for the country’s bottom 30% income households figured in at 2.9% in April. This was faster than 2.4% in March, but slower compared to 3.1% in April 2019.

The latest reading brought the year-to-date pace for this income segment to 2.5%, still lower than the four-percent average in 2019’s comparable four months.

That compared to a 2.2% headline inflation experienced by the average household in April, which was slower than the 2.5% annual rate in March, and three percent in April 2019.

The inflation rate for the bottom 30% takes into account the spending patterns of this income segment. Thus, its consumer price index differs from that of the average household with the former assigning heavier weights on necessities.

In mid-March, the government placed Luzon under enhanced community quarantine (ECQ), which halted most economic activity. Metro Manila transitioned into a modified ECQ on May 16, while other parts of the country were placed under general community quarantine.

For April, the PSA noted higher annual increases in the following commodity groups: food and non-alcoholic beverages (2.3% from 1.1% in March 2020); health (3.6% from 3.4%); communication (0.3% from 0.2%); and restaurant and miscellaneous goods and services (2.7% from 2.6%).

The food-alone index for the poor was 2.2% in April, picking up from one percent the previous month.

Among select food items, faster price increases were observed in fruits (10.5% from 8.6%); vegetables (8.3% from 5.3%); food products “not elsewhere classified” (13.1% from 9.3%); oils and fats (1.8% from 1.3%); milk, cheese, and eggs (4.3% from 3.8%); and other cereals, flour, cereal preparation, bread, pasta, and other bakery products (2.7% from 2.4%).

The price for rice continued to decline by 3.9% in April, albeit slower compared to the six-percent drop in March. Corn also fell by 2% in April versus the 5.9% fall in the previous month.

Inflation experienced by poor households in Metro Manila eased to 1.7% in April from 1.9% in March. On the other hand, those living outside the capital saw inflation accelerate to 2.9% from 2.4% previously.

“The demand [among the bottom 30%] may have concentrated more on basic products, and it is known that the whole month of April was the height of the economic lockdown in the country. It is fitting to note that rice prices towards the end of March were actually trending higher,” said UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion in an e-mail.

The economist also noted the transport index’s 1.9% drop in April, a reversal of the annual pickup of 0.9% in March.

“The decline of the transportation index is attributed to the collapse of global oil prices. It is known that prices sharply declined as both Saudi Arabia and Russia failed to come to an agreement in their March meeting,” he said.

“The Philippines is a net importer of crude oil for its economic activities, and the Saudi-Russia issue has directly affected transportation costs and consequently demand driving prices downward.”

Mr. Asuncion expects inflation among lower-income households to pick up in the coming months.

“Although the increase is slow, the trend is clearly upward,” he said.

ERC to extend bill payment moratorium for poor households

May 22, 2020 | 12:31 am

THE Energy Regulatory Commission (ERC) will order power utilities to further extend the moratorium on bill payments for poor households in areas that continue to be under lockdown.

ERC Chairperson and Chief Executive Officer Agnes VST Devanadera said the commission will issue a new advisory that will extend the payment moratorium up to six months for households that consume 200 kilowatts per hour (kWh) a month.

“We are extending for this group, we can call them the lifeliners. Now we are extending the payment (moratorium) for six months,” she told senators during a virtual hearing on Thursday.

However, the ERC will maintain the four-month suspension of bill payments for areas that shifted to modified enhanced community quarantine (MECQ) from ECQ.

“In the advisory we are issuing, the four months will remain to be applicable to all as we have issued in our previous advisory,” Ms. Devanadera added.

She said the ERC decided against lifting the suspension after finding little difference in the situation of consumers under ECQ and MECQ.

“Under both situations there are no access to public transportation, so in the mind of the Commission, the daily wage earners, the informal sector, still are not able to be gainfully employed,” she said.

Ms. Devanadera was speaking before the Committee on Trade, Commerce and Entrepreneurship, tackling Senate Bill No. 1473, the “Three-Gives Law,” which will institutionalize a moratorium on the payment of bills during a state of calamity.

The bill will protect consumers from disconnection of service due to the nonpayment of electricity, water and telephone bills for the duration of the state of calamity.

Under the measure, billing may later be settled in three equal installments. It will also impose a P1-million fine per infraction committed by the public utility franchise holder or the service provider.

The ERC chief backed the measure, but noted the law should specify the type of calamity and its duration that will trigger the automatic moratorium.

“For example, the typhoon lasted only three days, flooding lasted for four days, will it automatically be availed of?” Ms. Devanadera said.

The National Electrification Administration (NEA), Metropolitan Waterworks and Sewerage System (MWSS) and the Philippine Chamber of Telecommunications Operators (PCTO) also supported the measure, but asked the Senate committee to consider the effect on businesses.

NEA Deputy Administrator Rossan Rosero-Lee said the suspension of bill payments will affect the financial position of electric cooperatives (co-ops), which are nonstock and nonprofit.

“’Yung ating electric cooperatives talagang tatamaan, on the average 19-20 typhoons ang bumibisita sa bansa, aside from volcanic eruption… Apektado din ang pagbayad ng power suppliers and other loan obligations that electric co-ops are paying on a monthly basis,” Ms. Lee said in the same hearing.

Ms. Lee suggested that the committee provide for a corresponding reprieve on the payment to independent power producers, new power providers, among other suppliers.

For water utilities, MWSS Chief Regulator Lester N. Ty noted they have implemented a similar measure but with targeted beneficiaries.

“Instead of a blanket three months for all customers, we decided to do a targeted one. We decided to give a three-month payment term to lifeline account holders,” Mr. Ty said.

“The reason behind this is we want it to be targeted and we don’t want to unduly hamper the operation of Manila Water and Maynilad (Water Services, Inc.) because of their cash flow.”

The telecommunications industry, as represented by the PCTO, also asked the panel to strike the right balance between public and private interests.

“For prolonged calamities, it will be difficult for telcos to only begin collecting a month after the end of the calamity,” PCTO Vice-President Roy Cecil D. Ibay said.

He pointed out that telecommunications firms are also at the forefront of calamity response through free mobile disaster alerts and providing access to emergency hotlines, among others. — Charmaine A. Tadalan

Meralco to refund ‘convenience’ fee

May 22, 2020 | 12:10 am

MANILA Electric Co. (Meralco) is returning the additional tariff paid for by customers who settled their bills via its online app during the enhanced community quarantine (ECQ) period, as the company will shoulder these fees charged by its service providers.

The Philippines’ biggest distribution utility in a response letter to the Department of Energy (DoE) dated May 20 said it should have shouldered the P47-convenience fee that its service providers charged to customers who are paying their bills via the Meralco online app from March 16 to May 15.

“I sincerely apologize for this lapse,” Meralco President and Chief Executive Officer Ray C. Espinosa said in his letter, a copy of which was shared by the DoE to reporters.

“Meralco will shoulder the Convenience Fee charged during the aforesaid ECQ period and refund to the customers the fees they paid during this period,” he added.

On May 14 letter, the Energy Secretary Alfonso G. Cusi asked Mr. Espinosa to explain the additional charges paid for by customers which he said “consequently increases the electricity cost to the consumers, a clear deviation to all the government efforts to bring down the cost of utilities, especially during these difficult times.”

The listed utility said PayMaya, which operates and maintains the payment gateway of its app, charges its customers a convenience fee, stressing that this is not remitted to the company.

“The charging of a convenience fee by a payment gateway provider like PayMaya is a common commercial practice in the online payment service industry,” it explained.

Launched in September 2018, the Meralco app provides a 24/7 online payment platform, allowing customers to file service applications, to view their billing records, and to report their concerns, among others.

Only Cebu City and Mandaue City are still placed under ECQ, and Metro Manila, Bataan, Bulacan, Nueva Ecija, Pampanga, Zambales, Angeles City, and Laguna are under the modified ECQ up to the end of May, while the rest of the country is under general community quarantine.

The utility has yet to respond to the question of whether it will also be shouldering convenience fees from service providers beyond mid-May.

Meralco is at the center of mounting complaints and inquiries on the apparent increase in its electricity charges in May, which it said was the result of its current meter reading, plus the estimated kilowatt-hour consumption of customers in March and April billings.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Adam J. Ang

NLEx segment C3-R10 to open in June

May 22, 2020 | 12:09 am

By Arjay L. Balinbin, Reporter

NLEX Corp. targets to open by end-June the 2.6-kilometer C3-R10 Section of the North Luzon Expressway (NLEx) Harbor Link Segment that is expected to improve commuter mobility between airports, seaports, and growth corridors in the north and south.

“[We are] targeting opening by end of next month, June,” NLEX Corp. Senior Vice-President for Communication Romulo S. Quimbo, Jr. told BusinessWorld in a phone message on Wednesday.

He was referring to the elevated C3-R10 Section of the NLEx Harbor Link Segment 10, which is now 95% complete.

The segment goes through the new Caloocan Interchange in C3 Road, Caloocan City to Radial Road 10, and Navotas City. It connects to the opened NLEx Harbor Link Segment 10 that traverses Karuhatan, Valenzuela City, Governor Pascual Avenue in Malabon City, and 5^th Avenue/C3 Road, Caloocan City.

NLEx opened the Malabon Exit of the Harbor Link C3-R10 Section in February. The entire expressway was expected to be operational in March, but it did not materialize when President Rodrigo R. Duterte locked down the island of Luzon to contain a coronavirus pandemic.

Mr. Quimbo said over the weekend that the company had resumed work on its major projects as the National Capital Region shifted to a more relaxed community quarantine. Among those projects are the construction of the Harbor Link C3-R10 expressway and the rehabilitation of the five-kilometer Candaba Viaduct in Pampanga.

In a news release on Wednesday, the company said construction activities on the NLEx Connector and the Subic Freeport Expressway (SFEx) Capacity Expansion have also resumed.

According to Mr. Quimbo, there would be “slight adjustments” in the projects’ timelines to completion. “Our planning teams are now confirming the delivery dates. We are always ready to accelerate the project delivery,” he said.

Public and private construction projects have been allowed to resume under the “modified enhanced” community quarantine but workers must be housed and fed onsite and observe physical distancing rules, among other requirements for construction work during the pandemic.

“We have complied with the safety protocols laid out by the government for the implementation of infrastructure projects amid modified enhanced community quarantine,” NLEX Corp. President and General Manager J. Luigi L. Bautista was quoted as saying in the release.

“With the acceleration of these projects, we can help the government in its aim to revitalize the economy despite the ongoing health crisis,” he added.

NLEX Corp. said it would also resume work on the additional lanes at Clark South Toll Plaza.

“Despite the challenging times, our team remains committed to accomplish our big-ticket projects and continue the 24/7 service to our customers and other stakeholders,” Mr. Bautista said.

SMIC profit hit by pandemic

May 22, 2020 | 12:08 am

PROFITS of SM Investments Corp. (SMIC) dropped 16% to P9 billion in the first quarter, pulled by income declines in its retail, property and banking segments.

In a statement Thursday, the holding company of the SM Group said the ongoing coronavirus disease 2019 (COVID-19) pandemic has negatively affected its profitability, as the enhanced community quarantine (ECQ) limited its operations.

Consolidated revenues grew to P111.12 billion for the quarter, improving from P109 billion in 2018. But mall closures and other ECQ-related disruptions dragged SMIC’s bottomline.

Per segment, banking made up 46% of SMIC’s net income, property comprised 44%, and retail accounted for the remaining 10%.

BDO Unibank, Inc. generated a net income of P8.8 billion, falling from P9.8 billion in the same quarter the previous year. This was somewhat tempered by China Banking Corp., which generated a 19% increase in earnings to P2.2 billion during the period.

Property arm SM Prime Holdings, Inc. posted 5% lower net income at P8.3 billion during the three months. Its revenues fell 3% to P25.8 billion as malls were closed due to COVID-19-related quarantine measures.

SMIC said mall operations made up 47% of SM Prime’s consolidated revenues, therefore the forced mall closures negatively affected its earnings. Revenues from Philippine malls fell 16% to P11.3 billion, while total mall rental income fell 12% to P10.1 billion.

The residential unit of SM Prime under SM Development Corp. softened the impact of the declining mall business by growing revenues 23% to P11.4 billion. This segment made up 44% of SM Prime’s topline, which improved due to reservation sales worth P24.8 billion.

Other business segments under SM Prime recorded consolidated revenues of P2.2 billion.

Retail segment SM Retail, Inc. slumped 56% to P1.2 billion. Under this segment are food-related units SM Markets, WalterMart and Alfamart, and non-food units The SM Store and Specialty Retail. Consolidated revenues from this segment increased 3% to P81 billion.

“The ECQ and broader pandemic started to weigh on our performance during the first quarter,” SMIC President and Chief Executive Officer Frederic C. DyBuncio said in the statement.

Despite the weak first quarter turnout, SMIC said its balance sheet is strong enough to give it flexibility to adapt to changing customer needs and behaviors.

“We are actively enhancing digital and delivery services across all our core businesses, while also working to support and protect our employees, customers, MSMEs (micro-, small- and medium-sized entrepreneurs) and business partners,” Mr. DyBuncio said.

SM has started gradually opening its mall network over the weekend for areas where quarantine measures have been relaxed by the government.

Shares in SMIC at the stock exchange gained P15 or 1.83% to P835 each on Thursday. — Denise A. Valdez

Del Monte completes sale of shares in Philippine unit

May 22, 2020 | 12:07 am

DEL MONTE Pacific Ltd. has completed the sale of shares in its Philippine subsidiary Del Monte Philippines, Inc. (DMPI) to a Singapore-based investor for $120 million (about P6.07 billion).

In a disclosure to the local exchange yesterday, Del Monte said it has signed a deal with Singapore’s SEA Diner Holdings Pte. Ltd. together with its wholly-owned subsidiaries DMPI and Central American Resources, Inc. to sell 335.68 million shares in DMPI, equivalent to 12% of its paid-up ordinary shares.

This is lower than the supposed $130-million agreement that the parties signed in January to sell 363.65 million DMPI shares to SEA Diner.

“The completion of the DMPI sale marks the beginning of a partnership with (SEA Diner), a leading investment company focused on investing in leading companies in the consumer sector in China and the ASEAN region. This transaction is a testament to DMPI’s solid standing and future prospects for growth as a food company,” Del Monte said.

“The group looks forward to working with the Investor (as a new shareholder of DMPI) in expanding the group’s footprint in the Philippines and other export markets,” it added.

Del Monte said then that SEA Diner was planning to focus more heavily on investments in food products, noting it has already invested over $1 billion in consumer businesses across the ASEAN and China.

Del Monte is a manufacturer of canned fruits, juice drinks, tomato sauce, spaghetti sauce and culinary mixes.

The company said net proceeds from the transaction is estimated at approximately S$149.4 million (about P5.34 billion). This will be used to pay outstanding loans of Del Monte owed mainly to Philippine banks.

“The company will make periodic announcements as to the use of the net cash proceeds as and when such proceeds are materially disbursed and whether such a use is in accordance with the stated use and in accordance with the percentage allocated,” it said.

Del Monte posted a 159% jump in net income to $6.67 million in the third quarter ending January. Its shares in the stock exchange picked up 14 centavos or 3.66% to P3.96 each on Thursday. — Denise A. Valdez

SEC warns violators of grace period for lenders

May 22, 2020 | 12:06 am

THE Securities and Exchange Commission (SEC) is warning lenders to comply with adjusting payment schedules in consideration of quarantine measures imposed since mid-March.

In an advisory on Thursday, the corporate regulator reminded all financing and lending companies to implement a minimum 30-day grace period for loans due during the quarantine period.

This is required by Republic Act No. 11469, or the Bayanihan to Heal As One Act, which looks out for borrowers struggling to commit to loan payments because of challenges brought by the enhanced community quarantine.

“The commission is currently investigating (financing and lending companies) that allegedly refuse to comply with the said law,” the SEC said.

“Any violation or noncompliance shall be dealt with to the full extent of the law,” it added.

Aside from the grace period, the law requires that lenders do not 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.

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

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