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Metrobank Q1 income falls as it doubles provisions for loans

METROPOLITAN BANK & Trust Co. saw its net income decline. — BW FILE PHOTO

METROPOLITAN BANK & Trust Co. (Metrobank) posted a lower net income in the first three months of 2020 as it set aside bigger loan provisions to prepare for the impact of the coronavirus disease 2019 (COVID-19).

In a filing with the local bourse on Thursday, the bank said its net profit in the first quarter settled at P6.1 billion, declining by 9.33% from the P6.75 billion seen a year ago.

“Recognizing the potential impact of the COVID-19 pandemic, the bank proactively doubled provisions to P5.0 billion, which tempered this quarter’s net income…,” it said in a statement.

“Our underlying business is strong. We started the year with healthy growth in loans, deposits and other revenue streams,” Metrobank President Fabian S. Dee said in the statement.

“However, current conditions point to an expected slowdown in the business environment and challenges ahead. Mindful of the potential impact of this pandemic, we decided to take the prudent approach of increasing provisions to cover anticipated risks. We have weathered periods of crisis in the past and we are confident that we are well prepared, as the bank has one of the strongest capital positions in the industry. We will continue to adjust our processes to ensure the sustained delivery of meaningful banking services; and implement the necessary measures to keep both our customers and our people safe,” Mr. Dee added.

Gross operating revenues from January to March climbed 13% to P27.6 billion while operating costs grew 8% to P14.5 billion. This caused its cost-to-income ratio to improve to 53% from 56% a year ago.

Growth in the bank’s core business came on the back of the 13% jump in gross revenue due to an eight percent rise in deposits and as its non-interest income reached P6.2 billion, driven by the 7% growth in service fees and commissions to P3.3 billion and net trading and foreign exchange gains of P1.4 billion.

The bank’s net loans and receivables went up six percent to P1.4 trillion during the period as it boosted support for customers’ business requirements across all segments such as corporates, middle market, SMEs (small and medium enterprises) and retail.

The quarter saw the bank’s nonperforming loan (NPL) ratio relatively stable at 1.4% while the NPL cover was at 114%.

“To anticipate the possible impact of the pandemic, the bank increased provisions to P5 billion, more than double the P2.4 billion in the first quarter last year,” Metrobank said.

Total deposits increased 8% to P1.7 billion during the period due to the 18% growth in current account, savings account (CASA) deposits. This improved CASA ratio to 66% from the 61% seen in the comparable year-ago period.

Meanwhile, Metrobank’s total asset base stood at P2.4 trillion while total equity was at P305 billion.

Capital adequacy ratio stood at 17.6% at end-March, while its common equity Tier 1 ratio was at 16.3%, both above the minimum regulatory levels.

The Ty-led lender’s shares ended trading at P39.05 apiece on Thursday, up by 3.86% or P1.45 from its previous close. — L.W.T. Noble

New lawyers urged to harness technology to deliver better justice

THE Integrated Bar of the Philippines (IBP) said the more than 2,000 passers of the 2019 Bar examinations must harness technology to deliver better justice.

“Your passing the bar exams during a world pandemic should remind you that countries and jurisdictions are intertwined in many ways; that technology can be harnessed to significantly improve the administration of justice and the practice of law; and that we can help our community and country beyond traditional lawyering,” according to the IBP President Domingo Egon N. Cayosa, in a letter to the new lawyers.

“Have a broad perspective and measure up to global standards. Use technology to efficiently deliver justice and more importantly to promote peace, conscientiously advance the interest of your clients, and help the less fortunate in your community and in our country,” he added.

A total of 2,103 out of 7,685 examinees passed the Bar exams held last year, for a passing rate of 27.36%.

The new lawyers are led by Mae Diane M. Azores from University of Santo Tomas in Legazpi City, who topped the Bar with a score of 91.05%.

“Be confident. Do not be afraid. Be true to your lawyer’s oath and be mindful of your ethics, for lawyering is not just a livelihood but a vocation,” it said.

Associate Justice Estela M. Perlas-Bernabe, who chaired the Bar committee, said at a virtual briefing that the passing score was lowered to 74% from 75%.

She noted the need for “younger and technologically adept lawyers to help different fronts of society as we meet the peculiar challenges brought about by the COVID-19 pandemic and transition to the new normal.” — Vann Marlo M. Villegas

No kissing, no extras: How to make TV in the Age of the Virus

How do you film a soap opera in the age of the coronavirus, when kissing is banned, make-up is scaled back, and extras are seen as a danger to everyone’s health?

TV producers around the world will be closely watching as Neighbours — Australia’s longest-running, globally popular serial drama — plows ahead with its demanding, five-day-a-week filming schedule, even as the pandemic has brought much of the world’s television industry to a grinding halt.

For actor Takaya Honda it was clear things would be different when he stepped back onto the set in Melbourne after the show took a four-week hiatus. He was greeted by fellow actor Sally-Anne Upton, who was dressed in protective medical gear, ready to check his temperature. It was no performance.

Upton, who is also a registered nurse, was chipping in to help her colleagues implement strict new safety rules as the show, which pulls in around 3 million daily viewers in the UK alone, kicked off its 36th season.

“This isn’t a normal first day back on set,” said Mr. Honda, 32, who plays doctor David Tanaka on the show. It was a realization, he said, which he needed to accept in order to perform his job.

Neighbours, which has helped launch the careers of dozens of Australian stars including Kylie Minogue and Margot Robbie, has had to make drastic changes to comply with social distancing rules.

A nurse now flanks the set’s entrance, ready to take everyone’s temperature upon arrival. Only essential staff are allowed on site, meaning many post-production people work from home. Cast and crew have been divided into groups, restricting their movements to one of four different zones across the sprawling lot. Only two people are permitted in the canteen at any one time. Make-up and hair services have been scaled back. Shared changing rooms are now empty.

In response, the writers have made changes to plots and characters. Extras have been almost totally cut. On set, in what might be a first in the history of soap operas, the actors must keep their distance from one another no matter how hot and heavy their characters’ underlying affection. There is no kissing allowed.

Producers around the world will be closely watching this experiment in socially distanced TV to see if any of the show’s participants catch the coronavirus, according to Marc C-Scott, a senior lecturer in screen media at Victoria University in Melbourne.

Studios have halted production on hundreds of film and TV projects to protect the cast and crew from the deadly virus, which can spread rapidly in concentrated groups of people.

The outbreak has already cost entertainment companies worldwide billions of dollars in lost advertising and movie ticket sales. It could damage TV networks even more if production doesn’t pick up anytime soon, forcing them to air reruns in place of popular sporting events and prime-time shows.

Whether Neighbours can produce a rapidly paced, scripted series without ruining its quality or endangering its crew could go a long way toward deciding when more productions get up and running.

Chris Oliver-Taylor, chief executive officer Asia Pacific of Fremantle Media, the production company in charge of Neighbours, said the decision to resume shooting was unanimous from both the cast and crew. Millions of dollars would be lost if production of the show, which makes 258 episodes a year, was postponed indefinitely.

“If the show didn’t return, then that’s catastrophic financial damage to Neighbours,” he said. “All those crew and cast, no one gets paid, so they all lose out.”

According to Mr. Oliver-Taylor, the new set of protocols was developed over a seven-week period. The Australian government has been urging businesses to consider reopening when feasible, he said. Still, some aspects weren’t easy.

“We weren’t quite sure what the government at the time was going to do next,” he said. “Every day it was another announcement. We didn’t know where the bottom was, basically. It was almost impossible to write.”

While studios can film late-night talk shows and singing competitions using Zoom, there is no way to make an entire season of a sitcom or a two-hour action movie with all the actors in remote locations.

Hollywood studios have begun to discuss ways in which they could return to production. Producers deciding how and when to restart shows must grapple with any number of financial and legal uncertainties including who would pay for cost overshoots.

Neighbours will be among the first scripted productions to try and figure it all out. For Mr. Honda, the weirdest part about life on set these days is the feeling during lunch time. Before the pandemic, members of the cast and crew would flock to the canteen, grab a plate of food, and sit around socializing. Now, he said, everyone has to keep their distance from one another while they eat. What used to be a moment of bonding and camaraderie can now feel isolating and lonely.

With the rest of the cast, he is still adjusting to TV’s new rules of engagement. “It is about being conscious of things that felt automatic before,” he said. “The simple act of touching someone to comfort them isn’t something we can do anymore. But, in reality, we as actors on film and TV sets are asked to do weird things all the time.” — Bloomberg

Secondment strategies to minimize layoffs due to COVID-19

We’re a small enterprise with about 200 regular workers, 90% of which have been with us since our establishment 15 years ago. Due to the pandemic, we are looking at the temporary closure of our office for about three months as we don’t have sufficient capital to pay for salaries and benefits. There are only 75 workers who can work from home. Our CEO asked all department managers to prepare for the temporary closure of our office and require employees to go on forced leave without pay. As the head of the human resource department, I believe we can still do something to help the 125 workers who will be temporarily out of work. I pity the workers who have no other means of earning a living. What will happen to them and their families during these three months? Can you please give me your advice? — Gentle Touch.

Today, people and organizations are in crisis mode. Corporate management, in particular, is at a loss how to deal with the devastating effects of this pandemic if only to save their businesses from collapse. Most of the time, however, management will take the easy route by requiring employees to go on leave without pay or even terminate them.

The trouble is that this approach is not a socially-responsible solution, no matter how you look at it. Even if 10,000 businesses opt to lay off hundreds of thousands of their workers, it doesn’t mean it is the right solution to the problem at hand.

As of April 24, the Department of Labor and Employment (DoLE) announced there are more than two million workers displaced by the temporary closures of various businesses. Out of these two million workers, “over 600,000 personnel reported reduced incomes due to modified working arrangements (fewer workdays, rotation, forced leave, and telecommuting)” according to CNN Philippines.

What is the win-win solution that we can do that would satisfy both labor and management?

SECONDMENT
There is a solution to almost all problems, including how to manage our current employment situation. The best way is for your management and all other business establishments similarly situated to implement a secondment strategy to help preserve jobs and at the same time maintain business operations. If you’re looking for a socially and morally-responsible way to protect jobs, one ideal option that we can think of is secondment.

But what exactly is secondment? There are two types of secondment — internal and external temporary work arrangements. One, affected employees who are about to lose their jobs are transferred to other units or departments within the same organization to perform work other than their original assignments even outside of their job descriptions.

The transfer may also include assignment away from geographical areas with high incidence of COVID-19 to provincial locations where there are zero or minimal cases.

If internal secondment is not possible, consider external secondment to other business organizations that include affiliates, parent companies, suppliers, customers, and even subcontractors. Choose major companies that can afford to accept your displaced workers on a temporary basis. Distribute your prospective displaced workers to as many friendly organizations that can afford to take them in.

Secondment offers many advantages to both labor and management. It can uncover the hidden talents of employees, and motivate them by letting them know that their employers have gone the extra mile in protecting their jobs, giving people the chance to acquire new skills and experience. It can also improve goodwill between organizations.

In pursuing a secondment strategy, all the terms and conditions must be set down in writing. These include the duration of the secondment, payment of salaries and benefits to be shouldered by the accepting organization based on the employees’ current rate, protections against the loss of trade secrets, and the employer-employee relationship must be retained by the original employer without any loss of seniority and break of employment record.

It’s important for all employers, particularly those in the small-and-medium enterprise (SME) category, to think of protecting the jobs of their workers. Being small is not a good excuse to terminate employment. It’s just a matter of rethinking what’s best for both employers and their employees.

BUSINESS CONTINUITY PLAN FOR SMES
Incidentally, there’s an important and comprehensive tool to help you assess your company’s vulnerability against COVID-19. It’s called the Business Continuity Plan (BCP), especially designed and developed by the International Labor Organization (ILO) for SMEs to help identify their risk profile and assess weaknesses against the adverse effects of the pandemic.

I suggest that before doing any drastic changes and prior to executing the secondment strategy, use the suggested BCP six-step comprehensive form to assess your company’s strengths, weaknesses, opportunities, and threats, and evaluate them alongside the ILO’s 4Ps: People (the lives of workers and their families), Processes (enterprise operations), Profits (revenue generation) and Partnerships (enabling environment to carry out business operations).

You can download the form free of charge at www.ilo.org

 

ELBONOMICS: He who fails to plan is planning to fail.

Send anonymous questions to elbonomics@gmail.com or via https://reyelbo.consulting

SMDC says condo ‘safe’ after a wall collapsed

SM Development Corp. (SMDC) assured residents that its condominium in Makati City is safe for occupancy despite a collapse of a part of the building on Thursday.

In a statement, the property developer said it had conducted an investigation and found that the incident “does not affect the structural integrity of the development and that the buildings are safe for occupancy.”

It noted, however, that the cause of the incident was still to be determined.

On Thursday morning, a wall of a parking level at SMDC’s Jazz Mall property in Makati City “sustained damages that caused its outer slab to collapse to the driveway.” This resulted in two people getting “minor abrasions.”

SMDC said it would commit to necessary measures to address the situation and avoid it in the future.

SMDC is the residential arm of listed SM Prime Holdings, Inc. Shares in SM Prime at the stock exchange climbed five centavos or 0.16% to P31 each on Thursday. — Denise A. Valdez

Insurance sector ‘well-capitalized’ to weather risks

THE INSURANCE SECTOR can weather the impact of the coronavirus pandemic on their businesses, according to the Insurance Commission (IC), even as investments and sales face difficulties.

Insurance Commissioner Dennis B. Funa said insurance companies have been “well-capitalized” even before the pandemic hit and assured no company will go bankrupt.

“Insurers are well-capitalized. I don’t think that is the immediate issue. The initial impact will be on their investments and the sales of insurance products,” Mr. Funa said in a mobile phone message Wednesday.

Mr. Funa admitted that investments of insurers in businesses in other sectors will surely take a hit, with sales also affected by lockdowns across the country.

“That is why I allowed them to resort to online selling. In terms of investment, we all know that all industries will take a hit,” Mr. Funa said.

For life insurers, Philippine Life Insurance Association, Inc. (PLIA) President Benedicto C. Sison said firms remained “adequately capitalized” with enough buffers to “absorb any volatility in financial markets.”

Insurance companies’ minimum capital requirement was hiked to P900 million as of end-2019 from P550 million according to Republic Act No. 10607. This will increase further to P1.3 billion by end-2022.

To help firms amid the strict quarantine protocols imposed around the country, the insurance regulator has allowed companies to sell their products digitally or through any information and communication technology (ICT) channels.

On April 15, the IC conducted a survey to measure the impact of the coronavirus pandemic to their businesses. Insurers were scheduled to submit the forms earlier this week but IC said it is still compiling and assessing the results of the survey as of Thursday.

Mr. Sison said life insurers expect their assets to suffer “some drag” due to local equity sell-offs, although equities only account for a “small portion” of total assets of companies.

“It is also worth mentioning that the recent decline in bond yields have benefitted the valuation of the fixed income portfolio which make up the majority of the assets of most insurance companies,” Mr. Sison said in an e-mail.

PHILPLANS FIRST
Pre-need company PhilPlans First, Inc. told its planholders in a recent advisory that it will shut down all of its provincial branches starting June 6 to stay afloat after incurring massive losses in their investments.

PhilPlans said as a “strategy for survival,” it will only operate in Metro Manila “with barest and leanest workforce,” where they will continue to sell pension, memorial and life products as well as STI educational plans.

Its trust fund values were affected as pandemic fears hit markets and lockdown protocols “made recovery of these values even more difficult,” it said.

“While we have carefully chosen the trustees of the funds you have entrusted to us, as required by law, and while the trustees have invested the funds prudently, the economic repercussions of the pandemic has now affected our ability to generate adequate returns,” PhilPlans’ letter dated April 21 read, a copy of which was posted on its website.

The letter was jointly issued by PhilPlans President and CEO Monico V. Jacob and Eusebio H. Tanco, the company’s executive committee chairman.

PhilPlans said it even considered selling its assets “at their depressed values” to meet the company’s immediate maturing obligations, that could have resulted in “losses which we would no longer be able to recover — to the detriment of all our planholders.”

“We have weighed our options and considered the interest of all and we have decided to wait for the asset values to recover before we liquidate. Admittedly, this could take a rather long time,” it said.

The pre-need company said it is working on “quite a number of implementing strategies” to stay afloat during this crisis.

PhilPlans’ affiliates are health maintenance organization PhilHealthCare, Inc. and insurance provider Philippine Life Financial Assurance, Inc.

Sought for comment, IC’s Mr. Funa said the company will write a letter to the regulator on the matter.

IC earlier ordered pre-need companies selling three or more types of plans to maintain a minimum unimpaired paid-up capital of P100 million, P75 million for those selling two types of plans and P50 million for firms offering just one kind of plan including those who do not sell any type of plans. — B.M. Laforga

How PSEi member stocks performed — April 30, 2020

Here’s a quick glance at how PSEi stocks fared on Thursday, April 30, 2020.

COVID-19 may jeopardize gradual gains in vulnerable and informal employment

COVID-19 may jeopardize gradual gains in vulnerable and informal employment

Index boosted by optimism about easing lockdown

By Denise A. Valdez, Reporter

THE MAIN INDEX kept its upward trajectory yesterday as investors remained optimistic in anticipation of easing quarantine measures in select areas across the country.

The bellwether Philippine Stock Exchange index (PSEi) rose 56.74 points or 1% to end at 5,700.71 on Thursday. The broader all shares index also climbed 20.55 points or 0.60% to 3,445.83.

“The local bourse ended the shortened week on a positive note as some areas previously under ECQ (enhanced community quarantine) will be part of the more relaxed GCQ (general community quarantine) conditions,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message.

“Investors may have seen this as a positive thing for our economic well-being,” he added.

As the ECQ in select areas was set to expire yesterday, the government has started issuing clearer rules on which sectors may start going out and resume operations to oil the economy.

This is expected to help dampen the economic toll of the 1.5-month-long ECQ in Luzon, which shut down the operations of most sectors except a few ones considered “essential.”

Trading at the local bourse is suspended today in observance of the Labor Day holiday.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the sustained climb of the PSEi yesterday is also driven by positive development on finding a solution for the coronavirus disease 2019 (COVID-19) and the result of the meeting of the US Federal Reserve.

“Philippine equities jumped on the back of positive data from a potential coronavirus treatment from Gilead Sciences, continued effort from the Federal Reserve to sustain US growth,” he said in a mobile message.

US-based healthcare firm Gilead Sciences, Inc. continued reporting positive development from its trials of its anti-COVID-19 drug yesterday.

Also after meeting on Wednesday, the US Federal Reserve decided to keep its benchmark interest rate near zero until its economy has recovered from the COVID-19 pandemic. It likewise committed to do what it takes to lift the economy, Reuters reported yesterday.

All sectoral indices at the PSE closed with gains at the end of Thursday’s session: services improved 24.82 points or 1.84% to 1,373.82; financials added 18.80 points or 1.61% to 1,188.67; property rose 34.19 points or 1.18% to 2,921.92; holding firms gained 34.92 points or 0.63% to 5,544.29; mining and oil climbed 15.63 points or 0.33% to 4,708.57; and industrials increased 9.54 points or 0.12% to 7,474.93.

Some 590.40 million issues valued at P6.58 billion switched hands yesterday, slightly improving from Wednesday’s 584.34 million issues worth P4.54 billion.

Advancers stood at 120, decliners at 71, and unchanged names at 46.

Net foreign selling slowed to P658.39 million yesterday from P726.05 million the day prior.

Peso continues to rise on strong reserve data

THE PESO continued to strengthen on Thursday on the back of higher dollar reserves and continued risk-on sentiment due to news of the gradual lifting of lockdowns in some parts of the United States.

The local unit finished trading at P50.40 per dollar yesterday, strengthening by 11 centavos from its P50.51 close on Wednesday, according to data from the Bankers Association of the Philippines.

Week on week, it also appreciated by 43 centavos from its P50.84 finish on April 24.

Financial markets are closed today, May 1, for Labor Day.

The peso opened the session at P50.41 per dollar. Its weakest was seen at P50.50 while its strongest was its close of P50.40 against the greenback.

Dollars traded surged to $906.8 million on Thursday from the $498.5 million logged in Wednesday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s gains came on the back of the latest gross international reserves data from the central bank.

“The peso exchange rate closed stronger after the country’s GIR (gross international reserves) reached a new record high, thereby providing greater cushion for the peso,” Mr. Ricafort said in a text message.

Preliminary data from the Bangko Sentral ng Pilipinas showed GIR hit a record-high $88.995 billion as of end-March, surpassing the $88.187 billion seen at end-February as well as the $83.613 billion logged a year ago.

Meanwhile, a trader said optimism continued to buoy the peso amid news of the possible easing of lockdowns in some parts of the world.

“The peso’s movement is recently headline driven and there was risk-on sentiment from investors as some authorities state their plans to gradually lift lockdowns because this could help economic recovery,” the trader said in a phone call. — LWTN

Philippines seeks $750-M COVID-19 loan from AIIB

THE Philippines has applied for a $750-million facility from China’s Asian Infrastructure Investment Bank (AIIB) to help fund the coronavirus pandemic 2019 (COVID-19) containment effort, with the application expected to be acted on by mid-May.

According to a statement Monday from the Beijing-based bank, the Philippine government has asked the AIIB for $750 million to cofinance its COVID-19 Active Response and Expenditure Support (CARES) Program, alongside the Asian Development Bank (ADB).

“The program will provide critically needed support to help the Government of the Philippines mitigate the severe health, social, and economic impact caused by the COVID-19 pandemic,” AIIB said.

Finance Undersecretary Mark Dennis Y.C. Joven, who also heads the department’s International Finance Group (IFG), told BusinessWorld that the AIIB is expected to decide on the loan in mid-May.

“AIIB will deliberate mid-May, I think,” Mr. Joven said in a mobile phone message Wednesday.

He added that the government does not have plans for a second tranche of COVID-19 funding support from the AIIB, “unless the need arises.”

The funds will be sourced from AIIB’s $5-10 billion COVID-19 Crisis Recovery Facility.

AIIB said it expects the COVID-19 response program to increase the country’s testing capacity to 8,000 per day by next month, reduce the average turn-around time for tests to 48 hours or less by July and have all health care workers and COVID-19 patients be covered by the Philippine Health Insurance Corporation by July.

On Tuesday, the government signed a $100-million loan agreement for the COVID-19 Emergency Response Project with the World Bank as well as a new $200-million loan from the Asian Development Bank for the Social Protection Support Project.

The Philippines has also tapped the World Bank for a $500-million loan to fund its pandemic response programs, on top of the $500-million (P25.4 billion) Third Risk Management Development Policy Loan approved earlier this month.

The ADB has likewise approved a $1.5-billion loan to supplement the government’s funds as it seeks to contain the outbreak.

The Department of Finance has said it hopes to tap $5.7 billion worth of financial assistance from multilateral agencies such as the World Bank and ADB. — Beatrice M. Laforga

DoE could outline plans for strategic oil reserve by June

THE Department of Energy (DoE) is planning to issue a circular by June outlining plans for the establishment of a strategic oil reserve.

Rino E. Abad, director of DoE’s Oil Industry Management Bureau (OIMB), said that the drop in global oil prices represents an opportunity to stock up on petroleum products.

“Plano po namin in the next month or two, makapag-isyu po tayo ng circular (We plan to issue a circular on the oil stockpile program in the next month or two),” he told BusinessWorld by phone.

“We really have to move forward on this,” he added.

The DoE has been pushing for an oil reserve to guard against oil price volatility and supply disruptions.

State-owned Philippine National Oil Corp. is currently putting together a feasibility study on the strategic reserve. The study will form the basis of the DoE’s planned regulatory regime.

The strategic reserve will also undergo the budgeting process in Congress.

As of April 27, the Philippines had an estimated 3.29 billion liters of petroleum in its inventory, equivalent to 56.7 days’ consumption. Finished petroleum products are good for 27.9 days, and crude oil 28.8 days.

Oil prices have continued to drop due to a glut caused by the decline in demand due to the coronavirus disease 2019 (COVID-19) pandemic.

Mr. Abad said that the decline in oil demand is only temporary and that it may recover, along with prices, by the fourth quarter or early 2021, as major world economies roll out stimulus programs to ensure their economies recover.

Meanwhile, Energy Secretary Alfonso G. Cusi said on ANC Thursday that domestic fuel prices will remain volatile up to the end of the third quarter as demand will not return to pre-quarantine levels.

“I think that the (oil) prices up to the end of the third quarter will be volatile, and we will be seeing lower demand (from) consumers because there will still be restrictions in the mobility of people and somehow it will affect the demand for oil,” he said.

Mr. Cusi said the country is not reaping the benefits of low oil prices “because people are not traveling.” It has also affected retailers because they are not selling fuel.

“They bought some stocks at the high price that are still being sold at a low price. So they are experiencing cash flow problems,” he added.

He has noted around 10% of domestic fuel retailers closed down during the enhanced community quarantine (ECQ).

The oil rout has also affected exploration activity as concession holders evaluate whether exploring is worthwhile with prices so low.

The government could return to formal discussions with Chinese partners for joint exploration in the disputed West Philippine Sea (WPS) as soon as the ECQ is lifted.

“Maybe after the ECQ, we will sit down with our Chinese counterpart to see what is the best way to explore and exploit the resources,” Mr. Cusi said.

The ECQ will be lifted after May 15. — Adam J. Ang

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