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Manila Water unit signs P3-B loan with two banks

A SUBSIDIARY of east zone water provider Manila Water Co., Inc. has signed a loan to fund its capital expenditure programs and expansions projects.

In a disclosure to the stock exchange on Tuesday, Manila Water Philippine Ventures, Inc. (MWPVI) has applied for an additional P3-billion term loan facility with Security Bank Corp. and Metropolitan Bank and Trust Co., Inc. as co-lenders.

The loan is in addition to MWPVI’s P4-billion loan agreement with the same banks in October 2016.

On May 8, Ayala-led Manila Water reported a 4% increase in its consolidated net income for the first quarter of 2020 to P1.3 billion. The water company’s concession earnings were at P1.63 billion while its revenues climbed 9% to P5.5 billion.

However, domestic operations under MWPVI recorded a net loss of P151 million for the first quarter. The loss was attributed to the lower contribution of Estate Water caused by its lower supervision fees.

“The decline was primarily the result of the change in accounting treatment for said fees, but also in part by the stoppage of projects due to the enhanced community quarantine,” the water company said.

On Tuesday, shares in Manila Water fell 3.61% or P0.42 to close at P11.20 each. — Revin Mikhael D. Ochave

Luxury trendspotting isn’t easy in the COVID-19 age

By Andrea Felsted, Bloomberg Opinion

ALMOST three weeks ago, the American retailer J. Crew Group, Inc. filed for bankruptcy after it fell out of fashion. But there’s one item from the once-feted store that shoppers just can’t get enough of: masks. The most recent batch of nonmedical face coverings in its signature fabrics — plain blue shirting and blue-and-white stripes — has sold out on its British website.

Upmarket, stylish face coverings could provide a bit of a boost in a coronavirus-strewn landscape, where luxury goods sales are expected to drop as much as 35% this year, according to Bain & Co. estimates. To give some idea of the pent-up demand, fashion search platform Lyst said searches for masks are up 1,600% over the past month, compared with a year earlier.

That’s sparked a huge debate in the luxury industry as to whether to cash in. After all, if we’re going to have to wear masks anyway, why not make them chic?

It may be tempting. At the height of the crisis, many fashion houses — including LVMH’s Louis Vuitton and Christian Dior; Kering SA’s Gucci; Prada SpA; Burberry Group Plc; and Ralph Lauren, Inc. — repurposed some production facilities to make personal protective equipment for donation to medical workers on the front lines. Burberry is poised to take delivery of a special mask-making machine at its mill in Keighley, Yorkshire. But the items will be for donation, not for sale in its shops. And they certainly won’t be made out of its iconic red, white, black and tan check.

While the brands have gained the requisite skills, there are considerable risks associated with turning masks into fashion statements. So far, the bling behemoths are wisely keeping a respectable social distance.

If luxury goods companies were to make masks for profit, not only would they need to look stylish, but they would probably have to boast some health effectiveness, too. And they’d have to be expensive to fit with any luxury brand’s high-end prices. For example, a Louis Vuitton monogrammed mink-fur sleep mask — perfect for catching some shuteye on that first-class flight — costs 700 pounds ($859).

The danger is that luxury groups would be seen as profiteering from a health-care emergency. What’s more, according to consultants at McKinsey & Co., consumers shift to more subtle “silent luxury,” rather than in-your-face bling, after a large-scale crisis with a heavy emotional toll. What is perceived as unethical behavior — or simply ugly consumerism — could turn off customers, especially younger shoppers who are particularly conscious of brands’ social values.

One way to get around this would be to give a percentage of the profits to good causes, or to donate one mask for every one sold. J. Crew has donated 75,000 single-use masks to Montefiore Health System hospitals in New York.

Even if the pitfalls around profiteering are surmounted, there are other perils. Luxury is about feeling good. Brands must weigh whether they want to be associated with a pandemic and its huge human and economic toll. And although masks can have replaceable filters that extend their use, it’s unlikely people will hold onto them for long. Being disposable is anathema to luxury goods, from Hermes handbags to Cartier watches, for which heritage is crucial.

That doesn’t mean face coverings won’t work for some brands. For example, Off-White, the streetwear label from DJ and designer Virgil Abloh, who is also the artistic director for Louis Vuitton’s menswear, has been producing masks for some time. Off-White’s $95 arrow-logo face mask was the most in-demand men’s fashion item in the first quarter, according to the Lyst index, which measures clothing and accessories searches on its own site, Google and other social media.

Streetwear masks, along with heavy boots and multi-pocket coats, are part of an apocalyptic look that began to emerge before COVID-19 (coronavirus disease 2019). Serving to partly conceal one’s identity and repel other urban hazards like pollution, masks are a good fit with younger, edgier brands, such as the aptly named Anti Social Social Club. That’s not the case for traditional luxury.

Consequently, the big fashion houses would be better off focusing their attention on items that can be accessorized with masks, or adapting products to changing needs. Luxury resale site Vestiaire Collective saw a 45% increase in orders for scarves, including Hermes’s classic silks, in the last week of March, compared with the previous seven days, and demand has remained elevated. Brands could experiment with supersized sun visors to ensure social distancing or extended collars that could double as face coverings.

As the world emerges from the pandemic, and things become less emotionally charged, consumers may give luxury brands more permission to sell them protective clothing. For now, any move to do so will likely be a one-off to grab attention on the catwalk or Instagram. The pop star Billie Eilish, for one, donned a Gucci custom double-G-emblazoned mask for the Grammy Awards in January. While Gucci’s decision not to commercialize the product means passing up millions of euros of sales, it’s the right call.

2Go Group, Inc. to conduct virtual stockholders’ meet on June 18

 

 

Revised Notice of Annual Stockholders’ Meeting

To all Stockholders:

The annual meeting of the stockholders of 2GO GROUP, INC. (the “Corporation) will be held on June 18, 2020, Thursday at 2:00 P.M. Given the current circumstances, the meeting will be conducted virtually and voting conducted in absentia through the Corporation’s secure online voting facility.

Agenda:

  1. Call to Order
  2. Certification of Notice and Quorum
  3. Approval of Minutes of the Annual Meeting of Stockholders held on April 11, 2019
  4. Approval of Annual Report for 2019
  5. Approval and Ratification of the Acts of the Board of Directors and Management
  6. Election of Directors for 2020-2021
  7. Appointment of External Auditor
  8. Other Matters
  9. Adjournment

The Board of Directors has fixed the end of trading hours of the Philippine Stock Exchange on May 19, 2020 as the record date for the determination of stockholders entitled to the notice of, participation via remote communication, and voting in absentia at such meeting and any adjournment thereof.

The conduct of the meeting will be streamed live, and stockholders may attend the meeting by registering via asmregister.2go.com.ph and submitting the supporting documents listed there until June 10, 2020. All information submitted shall be verified and validated by the Corporate Secretary.

Stockholders who wish to cast votes through a proxy may accomplish the proxy form and submit the same on or before June 10, 2020. In view of the community quarantine, scanned forms will be accepted. Paper copies shall be sent to the office of the Corporate Secretary at the 33rd Floor, The Orient Square, F. Ortigas Jr. Road, Ortigas Center, Pasig City once the community quarantine is lifted.

Stockholders who successfully registered can cast their votes in absentia through the Corporation’s secure online voting facility for this meeting. In order to participate remotely, they will also be provided with access to the meeting that will be held virtually. The “Guidelines for Participation via Remote Communication and Voting in Absentia” as appended to the Definitive Information Statement labeled as Schedule A will be posted in the Corporation’s website www.2go.com.ph/asm2020 and PSE EDGE.

In compliance with SEC Resolution No. 196, Series of 2015, a copy of the Unaudited Interim Financial Statements of the Corporation for the period ended March 31, 2020 shall be posted in the Corporation’s website www.2go.com.ph/asm2020 and PSE EDGE on or before June 12, 2020. Hard copies of the interim financial statements shall be provided upon written request of any stockholder not later than June 12, 2020.

Pasay City, May 22, 2020

 

(Sgd.)
Arthur A. Sy
Assistant Corporate Secretary

Life sector spurs 20% growth in insurance industry’s 2019 income

THE INSURANCE INDUSTRY’S total net income booked double-digit growth in 2019 buoyed by a spike in the life insurance sector’s net profit.

In a statement on Tuesday, Insurance Commissioner Dennis B. Funa said net income of the insurance industry jumped 20.38% to P45.12 billion last year from P37.48 billion in 2018.

Mr. Funa said the figures were based on the unaudited quarterly reports on selected financial statistics submitted by insurance firms.

He said the spike in overall net income was largely due to the increase in the life insurance sector’s net earnings which grew 25.76% to P36.13 billion last year from P28.73 billion in 2018.

However, net income of other sectors including nonlife firms and mutual benefit associations (MBAs) were not available as of writing.

“We learned from said reports that the significant growth of the life insurance industry’s net income, which was due to increases in premium income, commissions earned, and underwriting income, drove the overall increase of the net income of the entire insurance industry,” Mr. Funa was quoted as saying.

Broken down, the insurance industry’s total investments rose 20% to P1.59 trillion last year from the P1.33 trillion seen the year prior.

Total assets grew 13% year on year to P1.78 trillion in 2019 from P1.58 trillion in 2018, while its aggregate net worth hit P382 billion, also up 13% from P338 billion the prior year.

The industry’s total premiums collected likewise increased by around five percent to P304.64 billion from P290.15 billion the previous year.

Mr. Funa said all sectors recorded growth last year in terms of assets, net worth, investments and total premiums collected.

For the life insurance sector in particular, investments rose 20% year on year to P1.39 trillion from P1.16 trillion. Its “assets, net worth, premiums collected, and paid-up capital likewise grew,” according to Mr. Funa, but without citing exact figures.

The nonlife insurance sector’s total investments also spiked 31% to P117.5 billion in 2019 from P89.77 billion.

“This notable increase in the total investments of the nonlife insurance industry can be attributed to the 63% increase in equity securities investments, 16% increase in investments in government debt securities, and 33% increase in investments in debt securities from private sector, year on year,” Mr. Funa said.

The nonlife sector’s overall net worth also increased 19.2% year on year to P98.14 billion in 2019 from P82.33 billion, while its total assets, paid-up capital and net premiums written all “recorded positive growth,” according to the regulator.

Meanwhile, the MBA sector saw its total assets grow 15.02% to P101.06 billion from P87.86 billion in 2018, while total fund balance also increased 17.39% year on year to P41.45 billion.

“The MBA industry’s other performance indicators displayed an upward trend year on year, particularly its total guaranty fund, investments, contributions/premiums collected, and net surplus,” Mr. Funa said.

“These figures were obtained prior to the onset of the community quarantine due to the 2019 coronavirus disease pandemic. Nevertheless, we hope that the economic and financial impact of the pandemic in the succeeding reporting quarter will be softened by the measures adopted by the Commission through the various COVID-19-related Circular Letters that we have issued,” he said.

He added that insurance density, the amount of premium per capita, inched up 3.35% year on year. — Beatrice M. Laforga

Ayala Malls to mount thermal scanners in select malls

Several Ayala Malls will have thermal scanners to check temperatures of mall goers as the coronavirus disease 2019 (COVID-19) pandemic persists.

In a statement on Tuesday, the mall network led by Ayala Land, Inc. (ALI) said it bought thermal scanners to limit contact between staff and visitors in doing temperature checks.

The machines are similar to what is used in international airports to trace body temperatures of a crowd at the same time.

“Our customer’s health and safety are our priority, and we have really put many protocols in place to welcome everyone back to Ayala Malls,” Ayala Malls President Jenylle Tupaz said in the statement.

“We are investing in the best technology and we are proactive in training our staff, along with providing guidelines for our merchants to provide a safe environment for everyone in our malls,” she added.

The company said the thermal scanners are fully automated and have a 99% accuracy in detecting body temperatures. The machines can also detect pickpockets and shoplifters through facial recognition once programmed to identify certain individuals.

The thermal scanners will be mounted in mall entrances that are most used by mall goers. Malls that are included are Glorietta, Greenbelt, Market! Market!, Alabang Town Center, Ayala Center Cebu, Central Bloc, Abreeza, Centrio, Trinoma, Ayala Malls Manila Bay, UP Town Center, Ayala Malls Feliz and Ayala Malls Fairview.

After closing all its malls since mid-March when Luzon was placed under strict quarantine, Ayala Malls started opening its network this month following government protocols for the relaxed lockdown.

ALI’s mall network contributed P4.65 billion in revenues in the first quarter, 9% lower from last year due to waived rent for non-operational tenants. Total revenues fell 28% to P28.4 billion while net income dropped 41% to P4.32 billion.

Shares in ALI at the stock exchange shed P1 or 3.24% to close at P29.90 each on Tuesday. — Denise A. Valdez

Skyway extension faces delay on pandemic lockdown

San Miguel Corp. on Tuesday said the completion of its P10-billion Skyway extension project might be slightly delayed due to the coronavirus lockdown.

“The project’s original target completion date was December 2020, but the two-month delay is likely to push this back a little,” the company said in a statement.

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

The government gave the go-signal for the resumption of construction activities on May 15.

The company said that as part of its efforts “to get back on track with the construction of the project following a 60-day delay due to the enhanced community quarantine, the Skyway Alabang Toll Plaza Southbound Entry will be closed from May 31 to June 15.”

The closure will make way for bored piling works at the southbound section.

“Because of the temporary closure, a new traffic scheme will be implemented with the help of the Muntinlupa Traffic Management Bureau,” it added.

The company advised private cars to take Filinvest entry and/or national road to Susana Heights entry. Trucks and buses are advised to take the national road to Susana Heights entry.

“We are happy to report that despite the long delay due to the ECQ and the limited workforce deployed, we’ve been gaining a lot of ground in terms of construction these past two weeks. Workers are also back at the site and earning income for their families. We’re asking for the public’s continued cooperation and kind understanding for any delays our work might cause,” SMC President and Chief Operating Officer Ramon S. Ang said.

The project aims to extend the Skyway from Susana Heights in South Luzon Expressway to Sucat and back and provide direct access to the elevated section of the Skyway. Construction of the four-kilometer elevated viaduct started in June last year.

Once completed, the project’s three new northbound lanes will be able to accommodate an additional 4,500 vehicles per hour. The two additional southbound lanes will be able accommodate an additional 3,000 vehicles per hour. — Arjay L. Balinbin

How PSEi member stocks performed — May 26, 2020

Here’s a quick glance at how PSEi stocks fared on Tuesday, May 26, 2020.


Where does the Philippines stand in COVID-19 testing?

Where does the Philippines stand in COVID-19 testing?

Jobstreet sees pickup in May job ad postings after poor April showing

JOBSTREET.COM, an online job search portal, said postings by employers advertising new job opportunities started to pick up in May after having fallen 30-50% year on year during the first full month of the Luzon lockdown in April.

It said the April downturn in job postings was significantly larger than the 30% decline for Asia.

Jobstreet Country Manager Philip Gioca said in an online news conference Tuesday: “In the Philippines, we saw a significant drop between 30-50%… in number of placements, and worse during the first week of April. But now that we are in May we are seeing very good traction. Now, people are starting to post again.”

Pre-lockdown, the website averaged around 100,000 Philippine job postings per day.

In response to the downturn in postings, Jobstreet.com launched a new program to connect employees to urgent hiring opportunities during the pandemic.

Jobstreet’s program for job seekers during the coronavirus disease 2019 (COVID-19) pandemic includes a COVID-19 microsite offering job reports for employers. It introduced a new feature called #WorkNow to flag immediate hiring opportunities and availability.

“Some companies have paused accepting applications, but many of them remain actively recruiting, so we’d like to encourage jobseekers that there’s a way for them to signal hirers that they are up for urgent hiring,” Mr. Gioca said.

Jobstreet also allows small and medium-sized enterprises offering work-from-home jobs for fresh graduates or jobseekers with no work experience to post on their website for free up to June 30.

Mr. Gioca said manufacturing, construction, and real estate job postings slumped in the March 15-April 30 period, while the top postings were received from the outsourcing industry (41%), government (15%), education (9%), banking and financial services (4%), and computer or information technology as well as software (4%).

Top job postings were for call center agents (10%), teachers (7%), nurses (5%), engineers (4%), and customer service representatives (4%). — Jenina P. Ibañez

Philippines to join field trials for swine vaccine

THE Philippines is set to take part in field trials for a potential vaccine against African Swine Fever (ASF).

In a statement, the Department of Agriculture (DA) said it will be joining an international trial for a candidate vaccine produced in the UK.

“We believe that the collaboration will provide first-hand information on the efficacy of the vaccine against the strain present in the Philippines,” the DA said.

England’s Pirbright Institute, which researches infectious diseases in farm animals, has developed a possible vaccine for ASF.

“The Pirbright team has developed a vectored vaccine, which uses a non-harmful virus (the vector) to deliver eight strategically selected genes from the ASF virus genome into pig cells. Once inside the cell, the genes produce viral proteins which primes the pig immune cells to respond to an ASF infection,” Pirbright Institute said in a statement.

Bureau of Animal Industry (BAI) Director Ronnie D. Domingo said the candidate vaccine still has to hurdle field testing before it can be distributed widely.

“Vaccine development takes a long time. It usually takes a minimum of 10 to 15 years. There are several stages of vaccine development,” Mr. Domingo said.

The DA has said that over 280,000 pigs have been culled to contain ASF. — Revin Mikhael D. Ochave

Agri-focused stimulus touted to help economy rebound from virus crisis

AGRICULTURE Secretary William D. Dar made his pitch for the role of farming in reviving the economy, claiming that an “agriculture-driven” approach will help the Philippines rebound more strongly from the pandemic.

In a statement Tuesday, Mr. Dar said: “For us to rise stronger from this COVID-19 crisis, the government must encourage the development of an agriculture-driven economy.”

The Department of Agriculture (DA) is proposing a P66-billion budget to fund its so-called Plant, Plant, Plant program, which it is positioning as a stimulus measure. The program hopes to expand the food supply, improve farm logistics, and stabilize food prices.

The proposal is currently being discussed in Congress as a component of the proposed Philippine Economic Stimulus Act.

“We believe that economic growth in agriculture is more effective at reducing poverty and food insecurity than growth in other sectors. Investment in agriculture can help revive food production and create jobs, following a crisis, and enable rural communities to recover,” Mr. Dar said.

Mr. Dar also called for more investments and partnerships in agriculture with the private sector and local government units.

The DA has so far entered partnerships with San Miguel Corp., AgriNurture, Inc., Shell Philippines, and other agribusiness firms.

“With the help of the private sector and local government units, we hope to improve our productivity and food supply chain through farm consolidation and clustering, provision of accessible financing, stronger linkages between production and marketing, and establishment of more postharvest and processing facilities,” Mr. Dar said. — Revin Mikhael D. Ochave

Remittances seen falling 2-4% if PHL classified as money-laundering risk

REMITTANCES could fall 2-4% if the Philippines is determined to be lax in policing money laundering and terrorist financing, which will compel international banks to treat transactions by Filipinos with extra caution, Anti-Money Laundering Council (AMLC) Executive Director Mel Georgie B. Racela said.

“Financial institutions may de-risk Filipinos, both individuals and entities, which include remittance companies; and may withdraw from existing business relationships,” Mr. Racela said in a text message to BusinessWorld.

He said “delayed processing of transactions due to requests for additional justification or documentary requirements” could produce delays of five to 10 days, which “will result in a reduction of 2-4% in annual foreign currency remittances, computed based on 240 working days per year,” Mr. Racela said.

He said more cautious treatment of transactions by Filipinos could ensue if the Philippines is put on the gray list or identified as a high risk-jurisdiction due to its anti-money laundering (AML) or counter-terrorism financing (CTF) regime. If this happens, other jurisdictions will have the option to require more paperwork or even to prohibit transactions with entities and individuals in the Philippines.

“Further, international banks may become reluctant to enter into partnerships with Philippine banks,” Mr. Racela said.

The Financial Action Task Force (FATF) has adjusted its timeline for its review on the Philippines’ AML and CTF practices due to the pandemic, allowing legislators and officials more time to act on the matter.

Mr. Racela said the Philippines’ observation period will end by February instead of the initial deadline of October. The FATF will then decide whether or not to include the Philippines in its gray list by June 2021.

Cash remittance growth slowed to 2.5% year on year to $2.301 billion in February as coronavirus disease 2019 (COVID-19) began to spread to economies where Filipino workers are deployed. In January, remittances grew 6.6% to $2.648 billion.

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said earlier this month that the remittance growth target this year was cut to 2% from the 3% goal before the pandemic. The World Bank’s global projection is that remittances may drop 13% to lower and middle-income countries due to the looming global recession as well as layoffs and lower wages due to the COVID-19 crisis.

Remittance inflows prop up consumption in the Philippines, which makes up 70% of the economy.

“Currently, the pandemic continues to cripple different sectors of the economy, and an FATF ICRG (International Co-operation Review Group) public listing, which is in itself a national emergency, will worsen the already negatively-affected Philippine economy,” Mr. Racela said.

House Bill 6174 which seeks to amend the Anti-Money Laundering Act (AMLA) with more stringent AML measures has been pending with the House Committee on Banks and Financial Intermediaries since February. Its counterpart in the other chamber, Senate Bill 1412, is also pending at the committee level.

Key AMLA amendments proposed are the inclusion of tax crimes, inclusion of real estate agents as covered persons, and the expansion of investigative powers of the AMLC to include subpoena and contempt powers, among others.

Meanwhile, House Bill 7141 which seeks to amend the Human Security Act and to strengthen CTF measures has been pending with the Committee on Public Order and Safety since March 2018. Its counterpart Senate Bill No. 1083 was approved on final reading in February. — Luz Wendy T. Noble