Feb. trade gap widens as imports rise
THE COUNTRY’S trade-in-goods deficit widened in February as imports grew for the first time in 22 months and exports contracted albeit at a slower pace, the government’s statistical agency reported on Thursday.
Merchandise imports rose by 2.7% to $7.60 billion in February following a 12.1% annual decline in January, preliminary data by the Philippine Statistics Authority showed.
The import tally for February was bigger than the $7.40 billion in February 2020, but smaller than the $8.40 billion in January 2021.
Moreover, the value of imports for February was lowest since June 2020’s $6.96 billion.
Nevertheless, February imports marked the first expansion in 22 months or since April 2019 when it posted an annual growth of 2.9%.
“The rebound in imports… may be more a result of base effects rather than a true recovery for the sector with the economy still stuck in recession amidst an ongoing 12-month lockdown with daily COVID-19 (coronavirus disease 2019) infections spiking in March,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a statement to reporters.
Meanwhile, merchandise exports declined by 2.3% in February to $5.31 billion, lower than the 4.8% contracted recorded in January.
Pantheon Macroeconomics Senior Asia Economist Miguel Chanco in a statement said the continued decline in merchandise exports was “particularly discouraging.”
This brought the trade deficit to $2.29 billion for February, bigger than the $1.97-billion gap in the same month last year.
Year to date, imports of goods fell 5.6% to $16 billion, while exports slid 3.6% to $10.83 billion.
These figures were below the Development Budget Coordination Committee’s growth targets of 8% and 5% for imports and exports this year.
That brought the year-to-date trade balance to a $5.17-billion deficit, smaller than the $5.72-billion shortfall in the same two months last year.
The country’s total trade — the sum of export and import goods — was $12.91 billion in February, up 0.6% year on year. For the first two months of the year, total trade amounted to $26.83 billion, down 4.8% from $28.19 billion a year ago.
As of last year, the imports and exports of goods made up 16.3% and 28.7% of the country’s gross domestic product, PSA’s national accounts showed.
Raw materials and intermediate goods, which account for 39% to the goods imports bill in February, jumped 6.4% to $2.97 billion year on year.
Capital and consumer goods likewise increased by 5.7% (to $2.56 billion) and by 3.9% ($1.32 billion) in February, respectively. On the other hand, imports of mineral fuels, lubricant and related materials contracted by 20.1% to $692.46 million.
On the export side, the sales of manufactured goods rose 2.6% year on year to $4.53 billion last year. These goods made up 85.3% of total goods exports in February.
Electronic products, which made up more than half of the total export sales in February, inched up 0.4% to $2.98 billion.
However, declines were seen in the sales of agro-based products (-22.3% to $336.63 million), mineral products (-26.3% to $318.03 million), and petroleum products (-97.9% to $808,090).
BRIGHT SPOTS
Mr. Chanco noted some “bright spots” in the data, particularly the turnaround in capital goods imports.
“This was more than enough to keep their recovery from last year’s lockdown broadly intact. On the other hand, though, imports of consumer goods continued to struggle, and they look set for a renewed collapse, due to the headwinds posed by the second virus wave,” he said.
“All told, the weakness in domestic demand will continue to dominate, keeping the trade deficit well above the 2018 nadir,” he added.
Security Bank Corp. Chief Economist Robert Dan J. Roces expects “renewed demand for inputs” by the time the enhanced community quarantine (ECQ) imposed in Metro Manila and the provinces of Bulacan, Cavite, Laguna, and Rizal will be lifted on April 11.
“When the ECQ is lifted, renewed demand for inputs should cause some rebound in imports of capital goods and raw materials, while a global reflation trade is possible once major economies reopen again. Thus, we still anticipate a trade rebound notably in the second half…,” Mr. Roces said.
For Mr. Mapa, imports of goods and services will continue to expand in the next few months due to base effects and with manufacturers moving to restock depleted inventories.
“Meanwhile, exports may face some challenges in the near term with global trade expected to take a hit after select countries reinstate lockdowns to deal with spiking COVID-19 cases in their areas…” he said.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the government’s export target of 5% this year “is modest and very much attainable.”
“However, imports may be slightly hampered and largely depends on how the government curbs the virus effectively,” Mr. Asuncion said. — Lourdes O. Pilar with inputs from Beatrice M. Laforga
No ‘drastic’ liquidity moves for now — BSP
THE CENTRAL BANK is not keen on “drastic” liquidity-infusing moves as the impact of the pandemic is better addressed by fiscal measures, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.
“Where we are right now is that we feel that our current monetary policy stance is still appropriate for the recovery. I don’t think there will be any drastic moves on our part to inject more liquidity into the system,” Mr. Diokno said in a Bloomberg TV interview on Wednesday, noting the impact from the measures rolled out in 2020 have yet to be fully absorbed by the financial system.
The Monetary Board maintained its key policy rate at a record low of 2% at its policy setting in March, as support for the pandemic-hit economy even as inflation surpassed the annual target range of 2-4%.
Central bank officials have assured that they will remain watchful of the inflation spike’s second-round effects such as wage and transport fare hikes.
The National Economic and Development Authority (NEDA) earlier estimated the two-week enhanced community quarantine in Metro Manila and nearby provinces could shave off around 0.8 percentage point from this year’s gross domestic product.
Mr. Diokno said the economy will likely grow by 6%-7% this year, below the official target range of 6.5%-7.5% set by economic managers.
For now, Mr. Diokno said heavier lifting should be on the fiscal side.
“I think there’s still a need for some fiscal stimulus. I think for example, we need to take care of the poor and the vulnerable who were affected by the lockdown,” he said.
Lawmakers are pushing for a third stimulus measure to support affected businesses and drive recovery. House Bill 8628 or the Bayanihan to Arise as One Act, which proposes to allocate P420 billion for a social amelioration program, wages subsidy for affected workers and the acquisition of more COVID-19 vaccines and medicine, among others.
EXTENSION
Mr. Diokno also confirmed that the BSP extended the maturity of the P540-billion loan to the National Government by three months. It was originally supposed to have been repaid in March.
National Treasurer Rosalia V. de Leon said in a Viber message that the no-interest BSP loan should be repaid by July 12.
“We are fortunate that under the revised charter of the central bank, we are really allowed to lend to the government in extraordinary times and these are extraordinary times,” Mr. Diokno said.
Finance Secretary Carlos G. Dominguez III on Tuesday said the government is looking to wind down its loans from the central bank this year or next. — Luz Wendy T. Noble with inputs from Beatrice M. Laforga
PHL factory output continues 12-month losing streak
THE COUNTRY’S factory output declined for a 12th straight month in February, and posted its steepest fall in five months, the government reported on Thursday.
Preliminary results of the Philippine Statistics Authority’s (PSA) Monthly Integrated Survey of Selected Industries for February showed factory output, as measured by the Volume of Production Index (VoPI), plunged by 43.6% year on year in February. This was faster than the revised 12% drop in January, and a reversal of the 0.4% growth a year earlier.
The February decline marked the steepest in five months or since the 56.7% year-on-year slump seen in September 2020.
The index has been on steady a decline since March last year, around the time when strict lockdown restrictions were implemented to contain the spread of the coronavirus disease 2019 (COVID-19).
The February result brought the slump in the first two months of the year to average 27.8% compared with the 1.4% dip in the same period last year.
The PSA noted 19 out of 22 industry divisions saw a drop in February. Of these, 14 posted double-digit annual declines led by the manufacture of coke and refined petroleum products (-85.4%); machinery and equipment, except electrical (-48.5%); textiles (-32.6%); and furniture (-30.3%).
Capacity utilization — the extent to which industry resources are used in producing goods — averaged 53.8% in February, down from 56.7% in January. This was the lowest since April 2020 when it recorded an average capacity utilization rate of 46.1%.
Of the 22 sectors, 15 averaged a capacity utilization rate of at least 50% in February.
In comparison, the IHS Markit Philippines Manufacturing Purchasing Managers’ Index (PMI), which uses a different set of parameters, posted a 52.2 reading in March, above the neutral 50 mark which separates expansion from contraction. However, this was down from the 52.5 figure recorded in February.
“The downtrend in manufacturing mirrors the weakness noted in our export figures also released where we saw outbound shipments other than semiconductors fell 5.5%. The most recent PMI report also indicated fading demand for our export products,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.
The economist also attributed the February turnout to the ongoing lockdown that continued to weigh on manufacturing activity.
The government has imposed lockdown restrictions nationwide since March of last year to curb the spread of COVID-19. Currently, Metro Manila and the provinces of Bulacan, Cavite, Laguna, and Rizal were placed under “extended community quarantine” — the country’s strictest form of lockdown until April 11.
Philippine Exporters Confederation, Inc. (Philexport) President Sergio R. Ortiz-Luis, Jr. expects manufacturing production in the coming months to continue to shrink by double-digits, albeit to a lesser degree compared with the February result due to base effects, he said in a phone interview.
A look at the PSA’s national accounts shows manufacturing to be among the top contributors to economic growth in the last few years. The same could be said for the revised 9.6% gross domestic product decline in 2020 wherein the sector chipped in -1.83 percentage point (ppt), only second to construction’s -2 ppt. — Jobo E. Hernandez
Philippines’ GDP decline in 2020 steeper than initially reported
By Ana Olivia A. Tirona, Researcher
THE PHILIPPINE ECONOMY performed worse than previously reported in 2020, as the coronavirus pandemic continues to dampen business activity, the Philippine Statistics Authority (PSA) reported on Thursday.
Gross domestic product (GDP) — the value of all finished goods and services produced in the country at a given period — fell by record 9.6% last year, slightly faster than the 9.5% drop initially reported on Jan. 28.
Meanwhile, GDP for the fourth quarter of 2020 was unchanged at 8.3% from PSA’s preliminary estimate.
On the other hand, last year’s gross national income — the sum of the nation’s GDP and net primary income from the rest of the world — was revised to an 11.4% decline from the earlier estimate of -11.1%.
The performance in the services sector for the entire 2020 was revised downward to -9.2% from the previously reported -9.1%. Likewise, the decline in the industry sector is now estimated at -13.2% from -13.1%.
Downward revisions were noted in the following subsectors: manufacturing (-9.8% from -9.5%); wholesale and retail trade (-6% from -5.7%); accommodation and food service activities (-45.4% from -44.7%); information and communication (5% from 5.1%); financial and insurance activities (5.5% from 5.8%); and professional and business services (-10% from -9.3%).
On the expenditure side, growth in government spending was raised to 10.5% in 2020 from the preliminary 10.4%.
Trade in goods and services figures were also tweaked, with exports (-16.3% from -16.7%) and imports (-21.6% from -21.9%) both contracting less than initially reported.
Gross capital formation, or the investment component of the economy, was revised to -34.4% from -35.8%.
Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said sectors that have been resilient at the outset of the coronavirus pandemic such as manufacturing, agriculture, and information and communications technology will be the main drivers for economic recovery.
“Sectors like recreation, retail trade and face-to-face services where health protocols are difficult to implement will continue to lag behind, however. This is where the public sector can give more attention to avoid a spiral of joblessness, erosion of consumer confidence and production as a good portion of our labor force work there,” he said in an e-mail.
“Capital formation may see a slightly faster recovery than household spending as many of the supply-side challenges causing inflation to spike will be addressed both by the private and the public sector’s projects, hopefully stepping up post-ECQ (enhanced community quarantine),” he added.
Meanwhile, IHS Markit Chief Economist for Asia-Pacific Rajiv Biswas said the reimposition of strict lockdown restrictions in Metro Manila and the surrounding provinces is “likely to be a key factor constraining the pace of near-term economic recovery.”
“[T]he pace of economic recovery in 2021 is likely to be less buoyant than previously expected, with renewed pandemic control measures dampening growth in the near term. Consequently, GDP growth in 2021 is expected to be in the 5% to 6% range, with stronger growth in 2022 as the pandemic is gradually constrained by widening vaccine rollout in the Philippines,” he said in a separate e-mail.
The revision comes ahead of the release of the PSA’s national accounts for Q1 2021 on May 10.
According to the PSA, revisions on the estimates are based on updated data submissions by data source agencies, in line with international standard practices.
PHL business sentiment improves, but ECQ may dampen outlook
PHILIPPINE FIRMS are more optimistic for the rest of the year, a central bank survey showed, but the surge in coronavirus infections and the reimposition of a strict lockdown in the capital region threatens to dampen sentiment.
The overall business confidence index in the first three months of the year improved to 17.4% from a reading of 10.6% in the fourth quarter of 2020, based on the Business Expectation Survey results released by the Bangko Sentral ng Pilipinas (BSP) on Thursday.
This is the highest reading since the 22.3% in the first quarter of 2020 before the pandemic’s impact became more pronounced.
The confidence index reading for business outlook for the second quarter also improved to 42.8% from 37.4%.
Business optimism spilled over for the rest of the year with the confidence index at 60.5%, better than the 57.7% the previous quarter and the highest since the 59.6% seen in the fourth quarter of 2019.
The improvement in business confidence could be traced to the easing of restriction measures and re-opening of businesses, as well as more people adapting to the new normal, BSP Department of Economic Statistics Senior Director Redentor Paolo M. Alegre, Jr. said in an online briefing on Thursday.
Respondents also cited the increase in volume of sales and orders, the rollout of the coronavirus disease 2019 (COVID-19) vaccines, and the development of new business strategies, as factors that contributed to business optimism.
“However…as seen from the chart there was a dip in optimism that you see by area or by period basis that with a lockdown, there can be an impact on business sentiment in the second quarter,” Mr. Alegre said.
The study was conducted among 1,512 firms around the country from Feb. 4 to March 12. Metro Manila and nearby provinces was placed under the strictest form of lockdown on March 29. The enhanced community quarantine was extended until April 11.
“So far what we have experienced is just two weeks of ECQ, it depends on the extent where restrictions are reimposed and it also depends on the direction,” BSP Deputy Governor Francisco G. Dakila, Jr. said.
He noted the vaccination rollout also contributed to the firms’ more upbeat outlook.
The BSP study also showed more firms are eyeing to expand in the next quarter (20.6% for the second quarter from 16.9% in the fourth quarter of 2020) although slightly lower for the next 12 months (27% from 28%).
Firms involved in mining, quarrying and manufacturing are planning to expand, while those in agriculture, fishery and forestry sectors were less keen on expansion in the next 12 months.
Firms cited insufficient demand resulting in low sales volume (46.7%) and stiff competition (41.6%) as major risks to their business. — Luz Wendy T. Noble
Meralco rates rise on higher spot market prices
TYPICAL households in Metro Manila are set to see an increase of around P17 in their electricity bill this month as Manila Electric Co. (Meralco) announced a rise in the overall power rate due to higher spot market prices.
In a press release on Thursday, Meralco said that its overall rate climbed by P0.0872 per kilowatt-hour (kWh) to P8.4067 per kWh from last month’s P8.3195 per kWh.
The increase will translate into a P17.44 hike in the monthly bill of typical households, or those that consume 200 kWh a month. Households consuming 300 kWh, 400 kWh, and 500 kWh will see an increase of around P26, P35 and P44, respectively.
Meralco explained that the generation charge, which it remits to power suppliers, rose this month by 3.7% or P0.1621 to P4.5370 per kWh. The surge was caused by the P2.5991-per-kWh increase in the cost of power at the wholesale electricity spot market (WESM) because of tighter supply conditions in the Luzon grid.
“Peak demand in Luzon increased by almost 1,000 MW (megawatts) in March as a result of warmer temperature, while unavailable capacity from plant outages remained above 3,400 MW. WESM share is slightly down to 11% this month,” the firm said.
However, the increase in WESM charges were mitigated by the lower costs from independent power producers (IPPs) and power supply agreements (PSAs), Meralco said.
Charges from IPPs and PSAs went down by P0.2090 and P0.1371 per kWh, respectively, due to improved average plant dispatch and the peso’s appreciation.
PSA-sourced power accounted for 50% of Meralco’s energy requirements while IPPs were responsible for 39%.
Transmission charges decreased by P0.0856 per kWh, mainly caused by lower ancillary service charges, while taxes and other charges climbed by P0.0107 per kWh.
Meralco said that the collection of the environmental component of the universal charge at P0.0025 per kWh remains suspended in line with an order from the Energy Regulatory Commission (ERC).
The power firm said its distribution supply, and metering charges have remained unchanged for 69 months, after being reduced in July 2015.
Meralco does not earn from the pass-through charges, such as generation and transmission charges.
“Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP (National Grid Corp. of the Philippines),” it said.
Taxes and other public policy charges like the universal charges and the feed-in tariff allowance are remitted to the government, it added.
REFUNDS
In its statement, Meralco said that the April rate includes the ERC’s approved adjustments of the firm’s pass-through charges from January 2017 to December 2019.
Four months ago, the ERC ordered Meralco to refund over-recoveries in transmission and other charges over three months, and to collect an under-recovery in the generation rate for 24 months.
“Meralco implemented the ERC-approved adjustments starting January 2021. The impact to residential customers, from the months of January to April 2021, is a net refund of around P0.1150 per kWh,” the company said.
The distribution utility added that it is also implementing its distribution rate true-up refund, which began in March. The amount represents the difference between the actual weighted average tariff and the ERC-approved interim average rate for distribution-related charges from July 2015 to November 2020.
The refund rate is at P0.2761 per kWh, and is set to appear in consumers’ bills as a line item called “Dist True-Up.”
On Thursday, shares in Meralco at the local bourse shed 1.13% or P3.2 to close at P280.60 apiece.
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., which has interest in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang
Sorkin’s Chicago 7 is Netflix’s latest shot at Oscar glory
AARON SORKIN has seen a lot over more than 30 years in Hollywood, but even he couldn’t have predicted how neatly a Vietnam War-era film would fit the political climate of 2020.
The Trial of the Chicago 7, the second movie directed by the famed screenwriter, follows the Vietnam War protesters who were accused of inciting riots at the 1968 Democratic Convention. The film has been nominated for six Academy Awards, including for Mr. Sorkin’s screenplay, and represents Netflix, Inc.’s latest shot at the industry’s top prize.
The movie got a boost last week by taking the best-ensemble prize at the Screen Actors Guild Awards, marking the first time a streaming service has won that recognition. The Academy Awards will be announced April 25.
Reflecting earlier on the film, which took about 14 years to make from conception to completion, Mr. Sorkin marveled at how little things have changed in the half-century since Tom Hayden, Abbie Hoffman, Bobby Seale and the others went on trial for their roles in the riots. The antiracism movement of last summer helped audiences connect with its message about the importance of protest in a democracy, he said.
“We thought the movie was plenty relevant last winter when we were making it,” Mr. Sorkin, 59, said in a phone interview from his home in Los Angeles. “We didn’t need it to get more relevant, but it did, obviously. I’ve been asked a lot if I changed the script to reflect events in the world. And I didn’t ever. The world changed to reflect the script.”
The idea for the movie came from Oscar-winning director Steven Spielberg, who has made a few of his own historical pictures, including Lincoln. He called Mr. Sorkin, the creator of the TV series The West Wing, over to his house on a Saturday morning in 2006 and said he wanted to make a movie about the Chicago Seven. Mr. Sorkin enthusiastically agreed to write it, without admitting he didn’t know what Mr. Spielberg was talking about.
“I left his house, called my father and asked who the Chicago Seven were,” Mr. Sorkin recalled.
The Chicago Seven (there were initially eight) were from different factions of the antiwar movement that rallied thousands of young people to come to Chicago in the summer of 1968 to protest the Democratic Party’s expected nomination of Vice-President Hubert Humphrey to succeed President Lyndon Johnson. They were met by 12,000 Chicago policemen, 5,600 members of the Illinois National Guard and 5,000 US Army soldiers.
The trial began more than a year later, pressed by President Richard Nixon’s Justice Department. Mr. Sorkin did some firsthand research through conversations with Mr. Hayden, a leader of Students for a Democratic Society at the University of Michigan in the 1960s. Mr. Hayden, played by Eddie Redmayne, gave Mr. Sorkin a sense of the tension between himself and Mr. Hoffman, a prominent antiwar activist who is played in the film by Sacha Baron Cohen. Mr. Hoffman took his own life in 1989. Mr. Hayden, who had a long career in California politics later and was married for 17 years to actress Jane Fonda, died in 2016 after a lengthy illness.
The drama between the two became an important part of the script, along with the police confrontation early in the film and the courtroom fireworks, after Mr. Sorkin dropped the notion of turning the story into a Broadway musical or play. He rewrote the screenplay dozens of times and the film went through numerous iterations, first with Mr. Spielberg set to direct, then with different actors including Seth Rogen and Dane Cook, before eventually going into production at ViacomCBS, Inc.’s Paramount Pictures with the current cast and Mr. Sorkin as director.
Last spring, it was clear the coronavirus was going to disrupt Paramount’s plans for a theatrical release. Market research indicated the first customers to come back to theaters would be people who thought COVID-19 was a hoax. And they might not have been sympathetic to the film’s message, studio Chairman Jim Gianopulos and the filmmakers agreed. “We didn’t have much confidence the Idaho militia was going to show up opening weekend,” said Mr. Sorkin, who won an Oscar in 2011 for adapting the Facebook story The Social Network to the big screen.
Tyler Thompson, a producer at Cross Creek Pictures who worked with Mr. Sorkin on the movie, said the transition to streaming went smoothly and may ultimately have been a good thing. The film cost about $35 million to make and would have eaten up a similar amount in marketing. Netflix bought the picture for $56 million and released it to home audiences on Oct. 16.
“It’s interesting to watch the Netflix big machine,” Thompson said. “They reach 600 million people. It’s pretty fantastic, to say the least. It was definitely a lifeboat that was an unlikely possibility, but they saw what we saw.”
Because Netflix doesn’t routinely disclose viewer numbers, it’s not clear how popular the film was. The streaming giant’s management touted its good fortune in picking up the film on an earnings call. It’s one of eight movies vying for the best-picture Oscar.
But for the producers to receive that same $56 million from a theatrical release, The Trial of the Chicago 7 would have had to generate almost $150 million in ticket sales, on par with the performance of Wonder Woman 1984.
Mr. Sorkin, who also wrote the screenplay for the hit courtroom drama A Few Good Men, said that while he thinks some aspects of moviegoing may be permanently changed because of COVID-19, he still wants his pictures shown theatrically when the pandemic is over. He just started production on a new film, Being the Ricardos, a biopic about Lucille Ball and Desi Arnaz.
“I really do think we’re going to have our cake and eat it, too,” Mr. Sorkin said. “I think that people are going to go back to the movies. I think we’re going to have the convenience of being able to watch a feature at home.” — Bloomberg
Cebu Pacific’s refunds payable hit P1.43 billion in 2020
BUDGET CARRIER Cebu Pacific said its customer refunds payable reached P1.43 billion last year due to a surge in refund requests amid a public health crisis.
Cebu Air, Inc., the listed operator of the low-cost carrier, said in its annual report released on Thursday that it saw a “1,938.7% increase” in its refunds payable last year “due to a surge in refund requests with the increase in flight cancelations brought about by the COVID -19 (coronavirus disease 2019) outbreak.”
Its refunds payable last year totaled P1.43 billion, a significant increase from the previous year’s P70.17 million.
“In light of the significant increase in flight cancelations due to the COVID-19 outbreak and consequent to the grounding of the group’s commercial operations, customers were given options for their canceled flights which included, among others, conversion to a full travel fund which is a virtual wallet equivalent to the amount paid for an existing booking. A travel fund is valid for two years and can be used as payment for future bookings,” the budget carrier said.
Cebu Pacific has said processing of refunds could take up to seven months due to the high volume of requests.
It reported a net loss of P22.2 billion, owing primarily to the effect of the pandemic on its operations.
Cebu Air’s revenues for 2020 dropped 73% to P22.6 billion. Cargo business contributed P5.4 billion or 24% of the total.
The number of passengers it carried last year dropped 78% to five million, while the number of flights was 71% lower at 41,804.
It closed the year with P20.77-billion operating loss and negative EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) of P932 million.
Cebu Air said it expects a slow recovery from the crisis due to the losses it has suffered.
“The group remains in a strong balance sheet and equity position at the end of the period,” it noted.
“The group is actively engaged in planning and executing various measures to mitigate the impact of the COVID-19 global pandemic on its business operations. These include negotiations with key suppliers on capital expenditure commitments and related cash flows, as well as with other suppliers and stakeholders as they impact the group’s cash flows. It is further engaged in the planning of staff rightsizing in addition to further optimization and digitalization of processes,” it added.
Cebu Air shares closed 2.06% higher at P47 apiece on Thursday. — Arjay L. Balinbin
Petron approves issuance of dollar-denominated senior capital securities
PETRON Corp. has greenlit the issuance of dollar-denominated senior capital securities in $200,000 denominations, the proceeds of which will be used for the company’s debt payments and general corporate purposes, the listed oil company said on Thursday.
Petron told the local bourse that its board of directors had authorized the company to issue the perpetual capital securities “under terms and conditions as the management may determine.”
According to a preliminary offering circular, Petron said that “the securities will be issued in registered form in denominations of $200,000 and integral multiples of $1,000 in excess thereof.”
The firm did not give further details on the initial rate of distribution or the issue price. It mentioned, however, that the expected closing date is 2021, and that the increase in the rate of distribution is 2.5% per annum.
Since the securities are perpetual, they do not have a fixed redemption date.
“The issuer may redeem the securities (in whole but not in part) on the step up date or any distribution payment date falling after the step-up date,” Petron said.
The Ramon S. Ang-led firm said that the securities are being offered only outside of the US in offshore transactions in line with the amended US Securities Act of 1922.
“The securities being offered or sold herein have not been, and will not be, registered with the Philippine Securities and Exchange Commission under the Philippines Securities Regulation Code,” Petron clarified.
The firm explained an “approval in-principle” was already obtained from the SGX-ST (Singapore Exchange Securities Trading Ltd.) to list and quote the securities.
“For so long as the Securities are listed on the SGX-ST and the rules of the SGX-ST so require, the Issuer shall appoint and maintain a paying agent in Singapore, where the Securities may be presented or surrendered for payment or redemption, in the event that the Global Certificate is exchanged for Certificates,” Petron said.
It added that the minimum board lot size of the securities will stand at $200,000.
The net proceeds from the issue of securities, which will be in US dollars, will be used by Petron for the repayment of debts and for general corporate purposes.
The trustee, principal paying agent, calculation agent, transfer agent and registrar of the securities is the Hongkong and Shanghai Banking Corp. Ltd.
Last month, Petron reported that it swung to a net loss of P11.4 billion in 2020, from a net income of P2.3 billion in the year before, as sales declined due to the global health emergency. The company added that its consolidated revenues last year dropped 44% to 286 billion.
Shares of Petron in the local bourse inched down by 0.32% or one centavo to finish at P3.15 apiece on Thursday. — Angelica Y. Yang
Anthems for life’s realities
By Michelle Anne P. Soliman, Reporter
Album review
The Bitter Truth (2021)
Evanescence
BMG Rights Management
THE recording session for the new studio album began in January 2020; it was originally set for release later that year. However, the global lockdown led the band to postpone trips to the studio. This resulted in songs written and produced remotely between the band in the US and their guitarist and backing vocalist in Germany. A year into the pandemic, Evanescence released The Bitter Truth on March 26 — their first album of original material in a decade.
The American rock band made their debut in 2003 with the album Fallen which spent 43 weeks on the Billboard Top 10 and sold more than 17 million copies worldwide. Their debut single, “Bring Me to Life,” won the Grammy for Best Hard Rock Performance in 2004 — the same year the band won the Grammy for Best New Artist. In their 18-year-career, the band has made five studio albums including The Open Door (2006), Evanescence (2011), and Synthesis (2017).
The Bitter Truth is a return to the band’s heavy rock sound featuring its current members: bassist Tim McCord, drummer Will Hunt, lead guitarist Troy McLawhorn, and guitarist and backing vocalist Jen Majura, and its sole original member and lead singer Amy Lee.
The words of each song were difficult to understand at first listen because of the intense guitars and drums in the background. Following the lyrics highlighted on the phone screen while listening via Spotify will help one understand the songs. Despite no longer being used in the genre’s heavy sound, I realized I had missed hearing Amy Lee’s distinct head tone vocals, which remain full and rich since the band’s debut with “Bring Me to Life.”
The songs in the album are a reflection of the band members’ personal experiences of loss, grieving, and redemption, as well as social issues on inequality.
The album begins with an intro track, “Artifact/The Turn,” which has a calm, slightly electronic sound. The track’s ending segues to “Broken Pieces Shine,” a song about overcoming struggles.
The first four songs feature the band’s signature heavy guitar and drums. The sound calms down in the fifth track — and the album’s first single, released in April 2020 — “Wasted on You,” a slow danceable ballad which talks about recovering from a broken relationship.
The second half of the album regains its loudness with songs “Better Without You” and “Take Over.” Then, it slows down once more on the piano ballad “Far From Heaven” — a reflection of Ms. Lee’s experience with the loss of her younger brother who passed away from severe epilepsy in 2018. The emotional track showcases much of Ms. Lee’s ability as a vocalist.
A notable song that carries a different theme from the other tracks is “Use My Voice” — the third single which was released last August — featuring vocals by Within Temptation’s Sharon den Adel, violinist Lindsey Stirling, Halestorm’s Lizzy Hale and The Pretty Reckless’ Taylor Momsen. The song talks about the courage to speak up against injustice, with lyrics such as “If we can’t talk about it, we’ll just keep drowning in it” and “No, don’t you speak for me.”
“I want people to come away from this album feeling hope and empowerment and strength. Something that inspires me a lot in life is people who have overcome great obstacles – survivors,” said Ms. Lee of the new album on the band’s website.
This message is evident as the album reaches the 47-minute mark with the hopeful message of “Blind Belief.” The song’s final phrase — loud and intense — goes: “We hold the key to redemption. Love over all.” The sustained last note cuts with the sharp bang of drums.
The Bitter Truth takes listeners back to the band’s original heavy rock instrumentation, but their lyrics have matured, telling us that miseries and battles are real and that to feel fear and sorrow are valid, but there is light at the end of the tunnel.
The Bitter Truth is available on music streaming platforms. For more information, visit https://www.evanescence.com/home/.