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AC Energy approves nearly P11B in funding for solar, wind projects

AYALA-led AC Energy Philippines, Inc. (ACEN) has approved a total of P10.81 billion in funding for a solar energy project and a wind farm, the firm told the local bourse on Thursday.

Its board of directors greenlit the financing of a solar plant project in Arayat and Mexico, Pampanga, through a secured loan, which would cover 100% of the project cost at P3.33 billion.

The firm also authorized the P7.48-billion funding of a wind farm project in Pagudpud, Ilocos Norte. This would take up 70% of the total project cost.

ACEN also approved the preparatory works needed for the planned follow-on offering, and a special audit of the company’s increase in authorized capital stock with multidisciplinary professional services firm SyCip Gorres Velayo & Co.

Last month, AC Energy President and Chief Executive Officer Eric T. Francia said that the firm had plans to sell its investments in coal-fired power plant projects in Bataan and Lanao del Norte in line with its goal to generate more than half of its energy from renewables in five years’ time.

Mr. Francia earlier said that financiers of renewables were able to limit their financial risks because they could invest in smaller amounts in those projects.

“The advantage of renewables, I should say, is that you can do your investments in digestible, reasonable chunks, unlike a large scale thermal plant where you typically invest billions of dollars,” he said during a webinar organized by the Philippine Energy Independence Council and the European Chamber of Commerce of the Philippines on Nov. 23.

Shares in ACEN on Thursday inched down by 0.16 % to close at P6.16 apiece. — Angelica Y. Yang

Falling plane values, e-commerce rise fuel boom in converting passenger planes to freighters

SYDNEY/JERUSALEM/MONTREAL — From Air Canada to China’s CDB Aviation, airlines and leasing firms are rushing to permanently convert older passenger jets into freighters, betting on a boom in e-commerce as the value of used planes tumbles amid the pandemic.

That has created a huge opportunity for passenger-to-freighter (P2F) conversion companies, including Singapore Technologies (ST) Engineering Ltd, Israel Aerospace Industries (IAI), and US-based Aeronautical Engineers, Inc.

Aviation analytics firm Cirium expects the number of P2F conversions globally will rise by 36% to 90 planes in 2021, and to 109 planes in 2022.

“We estimate that most slots are sold for 2021 and at least 40% for 2022,” Cirium Head of Market Analysis Chris Seymour said. “There is an increase in newer-generation programs, notably the 737-800 and A321, as well as the A330, although older types like the 767 continue to see strong demand, driven in the past few years by Amazon building their own fleet.”

The market value of 15-year-old planes has fallen by 20% to 47% since the start of the year depending on the model, according to advisory firm Ishka, which makes freighter conversions more attractive.

Air Canada is looking to convert several of its Boeing Co 767s, Russia’s S7 Group is acquiring its first 737-800 converted freighters from lessor GECAS, and lessor CDB Aviation has ordered two Airbus SE A330 conversions from ST Engineering’s EFW joint venture with Airbus.

The P2F conversions are a step beyond the cheaper temporary conversions many airlines have implemented during the pandemic, which remove passenger seats to carry more cargo.

Permanent conversions are a financial bet that air freight demand, which was weak before COVID-19, will remain strong for years to come as shoppers turn to e-commerce. The airline industry estimates it will take until 2024 for passenger traffic to recover to 2019 levels.

Freight markets are notoriously volatile, however, and have been beset by extended downturns; shortage can quickly turn into overcapacity, analysts warn.

Normally, about half of the world’s cargo is carried in the bellies of passenger planes, but the hit to demand has left the world more reliant on dedicated freighters.

“2020 has seen record high freighter aircraft utilisation, and our view is that the pandemic has accelerated the long-term structural shift towards increased e-commerce demand,” said CDB Aviation chief executive Patrick Hannigan.

Boeing said cargo yields had risen by 40% through September because of the pandemic-related passenger disruptions, and it forecasts more than 60% of freighter deliveries over the next 20 years will be conversions rather than new widebody freighters like the 777. Narrowbody freighters are almost all conversions.

The conversion boom is also helping aviation maintenance, repair and overhaul groups offset some of the lost business from the decline in passenger flights.

Such conversions generally cost millions of dollars on top of the cost of the aircraft and take three to four months, said ST Engineering Aerospace president Jeffrey Lam said.

His company is ramping up capacity, with plans to convert at least 18 A321 planes next year, rising to around 25-30 annually in the future, up from single digits this year.

“We are all booked out for 2021 for aircraft conversions,” Lam said. “The first slots are well into 2022.”

ST Engineering also may add converted freighters to its leasing business, which has focused on passenger planes, he said.

IAI can convert 18 or more 767s a year and produces most of those used by Amazon.com, Inc.

“We are investing a lot of effort to meet the market demand,” said Yosef Melamed, general manager of IAI’s aviation group, which is also working on the first-ever P2F conversion of the larger 777-300ER as part of a 15-plane contract with GECAS.

“What happened with the coronavirus outbreak, commercial flights were significantly reduced… international flights dropped to nearly zero,” he said. “So, the only solution for transporting cargo, and with the trend that people are staying at home ordering online, is cargo planes.”

US-based Aeronautical Engineers is also seeing a dramatic increase in demand for conversions, said Robert Convey, its senior vice president for sales and marketing, citing a 30-40% fall in the value of planes.

“We’re seeing younger and younger aircraft being converted due to the large number of passenger aircraft that have been grounded and are not likely to return to service in the near future,” he said.

Grant Stevens, vice president of corporate services at Canada’s KF Aerospace, said increased demand for P2F conversions, which grew from about 10% of its business before the pandemic to about half today, has helped offset a decline in requests for aircraft maintenance.

“We have been able to employ most of our staff by doing conversions,” he said. — Reuters

Philodrill extends SRO subscription to end-2021

LISTED exploration company The Philodrill Corp. has extended its subscription call for half the balance of its stock rights offering (SRO) to Dec. 31, 2021, the firm told the local bourse on Thursday.

The SRO, which was previously issued in 2009, had a 50% balance on subscription receivable that stood at P175.20 million last month.

The board of directors explained that the firm offered an extension on the SRO subscriptions as the global pandemic restrictions caused a delay in the implementation of projects, while noting that there was “no immediate need for liquidity.”

“The Board has decided to further extend the subscription call period to “at any time, on or before December 31, 2021,” Philodrill said in a regulatory filing.

The SRO previously commenced on Jan. 15, 2009, when Philodrill offered 38.37 billion new common shares at a par value of P0.01 per share to all stockholders of record.

Eligible stockholders were allowed to subscribe to one offer share for every four common shares held at an offer price of P0.01 per share, as of record date.

“At least 25% of the subscription price shall be payable upon subscription, another 25% shall be payable after 60 days from end of offer period, and the balance upon call by the Board of Directors not later than December 31, 2009,” Philodrill said, quoting the terms of its 2009 SRO.

It said the deadline was further extended when the Galoc oil field, of which it is a partner, started operating.

“During that time, the Company had a positive cash flow, there was no need for additional funds to cover operating expenses. In recent years, with the Company’s prudent measures implemented, it was able to sustain opex without needing to call on the subscription payments,” Philodrill said.

Last September, the firm, which operated a petroleum block northwest of Palawan, said that it would seek a 50-year extension of its service contract with the government once its contract expires in 2024.

Philodrill’s active petroleum projects cover production and exploration areas in onshore Mindoro and offshore Palawan, and holds various service contracts with the Department of Energy.

Philodrill shares on Thursday shed 8.33% to close at P0.011 apiece. — Angelica Y. Yang

As borders close and employers collapse, OFWs play the waiting game

By Luz Wendy T. Noble, Reporter

CRUISE SHIP singer Harry G. Bayona was home for a two-month holiday, which has since dragged on for more than half a year, and counting.

“It’s really stressful because this is how I make a living now,” Mr. Bayona said in a Zoom interview, noting that he had hoped his cruise career was a turning point for his ambitions to make it overseas.

When the COVID-19 outbreak turned into a pandemic, Gilbert A. Gayeta, a technician, was among the 300 employees sent home from a single company in Saudi Arabia.

“Operations started again and the company informed us that we can come back soon, but our status has been on hold for the past five months,” Mr. Gayeta said in Filipino via Facebook.

Overseas Filipino Workers (OFWs) have been a lifeline for the economy, but the pandemic has sent them on a rough — and uneven — ride. Health care workers were suddenly in demand all over the world, but faced caps on their overseas deployment. Workers in the Middle East became collateral damage as the oil markets collapsed. And cruise ships, which became notorious as vectors for infection, have been tied up in port for months.

The World Bank estimates that the Philippines is the world’s fourth biggest destination of worker remittances, behind only India, China, and Mexico. The impact of the pandemic has been severe, with May cash inflows declining 19% year-on-year to $2.106 billion the largest drop since the 33.5% contraction posted in January 2001.

Driving the decline was job losses in the OFW-dependent industries like oil, shipping, and cruise lines. The Department of Foreign Affairs (DFA) tally for repatriated workers toped 254,000 as of Nov. 15. Those numbers are expected to rise to about 300,000 by the end of 2020.

While OFW deployments have since recovered on a month-on-month basis from the April low, when only 1,794 OFWs left the country, deployments are still nowhere near their 2019 levels, based on preliminary data from the Philippine Overseas Employment Agency (POEA). In the seven months to July, deployments were down 65.24% year-on-year to 484,762.

“Based on the DFA’s experience in repatriating our distressed overseas Filipinos, the pandemic’s impact had an immediate effect on the cruise line industry and on our thousands of seafarers on board ship,” Foreign Affairs Undersecretary for Migrant Worker Affairs Sarah Lou Y. Arriola said in an e-mail.

Ms. Arriola said irregular migrants or those who left the country on tourist visas to seek employment abroad were also hit hard.

“When countries started to impose lockdowns and businesses had to temporarily close shop, the already limited job market for irregular migrants dwindled further,” she added.

Analysts said that the jobs recovery for OFWs will still depend on how economies in the host countries deal with the virus.

“OFWs working in sectors that are still deemed ‘non-essential’ and involving ‘high touch’ such as hospitality will still be under threat. However, as we get to know how to act during the pandemic and as vaccines emerge, such effects will be mitigated, but not in the short term,” Asian Institute of Management economist John Paolo R. Rivera said in an e-mail.

Mr. Rivera said some countries which have contained their outbreaks, such as New Zealand and Taiwan, may provide employment prospects for OFWs.

There are some bright spots for OFWs as restrictions ease and authorities find ways to operate their economies in the “new normal.” A return to pre-COVID levels of global trade could also herald an employment recovery, ANZ Research analysts Sanjay Mathur and Kanika Bhatnagar said in a note.

In late October, the US Centers for Disease Control and Prevention laid down guidelines for a phased resumption of cruise operations, ending the run of bad news for an industry that was laid up following a no-sail order in March. But the outlook remains clouded for demand.

“Even if you have the protocols to ensure the passengers are safe… convincing them to go onboard is another…,” Levinson C. Alcantara, a director at the Philippine Overseas Employment Agency (POEA) overseeing pre-employment services for OFWs, said at a forum.

Governments are now starting to decide to open up borders in reciprocal arrangements with countries they deem to be safe, according to Christian de Guzman, senior vice-president of the Sovereign Risk Group at Moody’s Investors Service, who cited the so-called “travel bubble” arrangement agreed to by Hong Kong and Singapore.

The flip side is the inability to travel of citizens of countries where infection rates remain high, such as the Philippines, whose nationals are not allowed to enter places like China.

“If the Philippines doesn’t get infection rates under control, it could very well affect the deployment of OFWs, which could then affect the remittance of inflows going forward,” Mr. De Guzman said in a Zoom interview.

As the crisis drags on, migrant workers may find themselves at a turning point in terms of how their host countries treat them.

“Given the lessons from the pandemic, will foreigners be given access to social protection in host countries – especially less skilled workers?” Jeremaiah Opiniano, Executive Director at the Institute for Migration and Development Issues, said in an e-mail.

In the meantime, Mr. Bayona, the cruise singer, has shelved his plans to buy property this year and has tried his hand at part-time jobs while awaiting notice from his company.

“There are so many OFWs who are breadwinners and still need to send their kids to school. I’m luckier in a way as I have more wiggle room when it comes to my finances,” he said.

In Batangas, Mr. Gayeta, the technician from Saudi Arabia, is still waiting for his company to call after being on no-pay forced leave since May. He continues to support his family by selling frozen chicken and working at building sites from time to time.

In the event of the worst-case scenario — a terminated contract — Mr. Gayeta said he will likely continue to look for jobs overseas with terms of at least a year or two, to provide more continuity compared to his three to six-month stints in construction.

“I’m the eldest sibling and what I earn here is not really not enough. In Saudi, I earn a little more and I will still choose that because I can handle homesickness anyway,” he said.

Roxas Holdings posts P3.8-B net loss

LISTED sugar and ethanol producer Roxas Holdings, Inc. (RHI) posted an attributable net loss of P3.81 billion for its 2020 fiscal year that ended on Sept. 30 despite cutting its net debt.

In a stock exchange disclosure on Thursday, the sugar company said its result for 2020 is worse than its 2019 losses of P1.88 billion.

Revenues of RHI dropped 41.1% to P4.8 billion against P8.15 billion in the previous year.

Further, the company said its net debt dropped 55.1% to P4.4 billion compared with P9.8 billion a year ago due to the completion of its asset sale.

RHI Chairman Pedro E. Roxas said funds from the sale of company assets such as its sugar mill and ethanol plant in La Carlota City, Negros Occidental, and investment properties like shares in Najalin Agri-Ventures, Inc. were used to pay all long-term loans.

“The sale of these assets to significantly reduce our debt is part of our efforts to de-risk the business and focus on expanding our sugar refinery operations in Nasugbu, Batangas,” Mr. Roxas said.

“This will also allow the group to help our country minimize importation of refined sugar needed by beverage and food manufacturers,” he added.

Meanwhile, the company said its non-recurring losses reached P2.6 billion as a result of its asset sale and goodwill impairment at the end of the year.

RHI Chief Financial Officer Celso T. Dimarucut said before the non-recurring charges, the company’s overall growth was tempered by losses from its ethanol business segment.

“The early shutdown of our alcohol plants due to the delays in lifting by oil companies and the steep rise in the cost of feedstock tempered gains, which resulted in slim margins for the alcohol unit,” he said.

Mr. Dimarucut added that the company’s performance during its fiscal year was also affected by the eruption of Taal Volcano in January, worsened by fewer available canes in the area, which subsequently hampered its production of refined sugar.

“Despite the prevailing uncertainties due to the pandemic, RHI is doing its best to fast track recovery and implement a wide-ranging transformation strategy to rebuild its sugar mill and refinery in Batangas, while boosting its alcohol business in Negros Occidental and strengthening its agri-business with more targeted programs to help farmers increase their yields,” he said.

Meanwhile, RHI also announced in another regulatory filing that Mr. Dimarucut will be appointed as the company’s president and chief executive officer effective immediately.

As a result, George T. Cheung will be the company’s executive vice-president, chief commercial officer, and chief risk officer to take effect on Jan. 15, 2021.

In a separate disclosure on Thursday, RHI’s parent company Roxas and Co., Inc. announced that the board of directors had approved the sale of some properties to National Grid Corp. of the Philippines. (NGCP).

The company has sold a total of 27,680 square meters coming from its own property and some portions of Roxaco Land Corp.’s property in Banilad, Batangas to NGCP.

“The properties are intended to be used by NGCP for its Tuy (Calaca)-Dasmariñas 500 kilovolt (kV) Transmission Line Project. The project of NGCP will be adjacent to properties of the corporation identified as a site for a future solar project,” the company said.

On Thursday, shares in RHI fell 2.17% or 4 centavos to close at P1.80 apiece, while those in Roxas and Co. rose 0.69% or one centavo to end at P1.45 each. — Revin Mikhael D. Ochave

How the entertainment industry learned to be more efficient during the pandemic

By Zsarlene B. Chua, Senior Reporter

THE KISSING SCENE is mandatory for certain types of drama, but became forbidden overnight because of work safety rules imposed during the pandemic. The US TV network Lifetime got around the prohibition by having actors kiss through plexiglass, and then digitally removing the barrier in post-production. These adjustments, some small and many large, all of them disruptive in some way, paint a picture of an industry having to frantically make up new rules as fresh problems arose.

GMA Network, Inc., the country’s largest television network, was caught out by the lockdown with two films in production — one in which crews were “literally in the middle of shooting,” according to Ianessa S. Valdellon, GMA Network first vice-president for public affairs, in an e-mail interview with BusinessWorld. It also had to halt production of various television series and had to air reruns until September, when Descendants of the Sun, the Philippine adaptation of a Korean TV drama, resumed filming.

“We were supposed to produce our second film this year, but I’m afraid this will be pushed back until such time that quarantine restrictions are relaxed,” according to Lilybeth G. Rasonable, GMA Network senior vice president for entertainment, also in an e-mail interview.

Despite the restrictions, GMA managed to produce five shows under “new normal” rules while TV5 managed to produce a slew of scripted and non-scripted shows.

Production company IdeaFirst also had “to stop and reevaluate all our plans,” its president Perci M. Intalan said by e-mail. It had movie and TV projects that had to stop because “they just weren’t feasible considering all the safety requirements and logistical restrictions.” Instead, it had to regroup with new projects that “can be produced safely and realistically.”

One of those new projects was the web series Gameboys, shot remotely and via videoconferencing, except for scenes in which the characters met. It aired in May.

Gameboys was unique because it was produced during ECQ (enhanced community quarantine, the strictest phase of the lockdown) — so we forced ourselves to shoot 100% from home and figured out ways to send props and equipment and to direct actors and finish entire episodes virtually,” Mr. Intalan said. He called it a “slow and laborious process” which “we are very proud of.” 

Mr. Intalan was quick to add that this may not be possible for other series.

“It’s not something you really wish to do over and over again…(that) won’t work for other projects especially those where characters have to interact in the same physical space,” he said.

The pandemic health regulations included a 50-person limit for on-set personnel, a half-day shooting window, locked-down shoots, regular testing, and monitoring by a health and safety officer. All of these imposed added costs.

“Without giving a number — it varies depending on the size of the production — it is definitely more expensive to shoot drama programs now with the need for swab tests, lockdown accommodations and food, PPE (personal protective equipment) and the observance of disinfection and safety protocols on set,” Ms. Valdellon said.

Mr. Intalan said shooting is “definitely” more expensive as in the case of his company’s TV5 Christmas special, Paano Ang Pasko, which had a P6.9-million safety budget, forcing the production to exceed its overall budget.

“You can’t scrimp on this. There are no shortcuts. You cannot risk anyone getting sick,” according to Mr. Intalan, who is also the head of programming at TV5.

The show ultimately had to rope in three directors — Mr. Intalan, Enrico Quizon, and Ricky Davao —  to distribute the added burden of pandemic-style production. 

“This is bayanihan,” said Mr. Davao, who was originally only a cast member.

The added costs of shooting, according to Jade Castro, a director, forced productions to be more efficient, particularly in response to the limited hours of shooting, which was for years on the wish lists of many industry workers. One byproduct of the lockdown requirement was that “everyone is in the same location.”

“For such a long time we have been pushing for shorter shoot times and now in the pandemic we proved that it can be done,” Mr. Castro said during an online interview with BusinessWorld during the promotion of Boys Lockdown on Oct. 7.

He added that he hopes this becomes the norm from now on, because shoots used to run for over 24 hours at a time, posing health risks for both cast and crew.

Locked-down shoots lay the groundwork for productions that are “more controlled. I think it would benefit the television and movie industry to continue studying this kind of setup and improving on it for the future,” Ms. Rasonable said.

“Despite the pandemic being a negative, I think that it has pushed producers/creators to be more imaginative and innovative in coming up with content and in the manner by which they produce such content. Out-of-the-box ideas, smaller and more efficient productions teams, new ways of story-telling, more experimentation on new technologies, new formats, etc. These, I believe, will be the long-term positive impacts of the pandemic on production,” she added.

Content was always king, but the lockdown made it even more so

By Denise A. Valdez, Senior Reporter

MARCH is a distant memory now, the last time many of us did things that we would deem non-essential. But as the lockdown weeks stretched into months, keeping people trapped at home, the dividing line between things that were vital to survival and those that were merely nice to have began to blur. And it’s fair to say that somewhere along the way, online content creators cemented a place in the homebound routines of a population starved for entertainment and connection.

The first signs of this longing, apart from self-improvement projects like manic workouts or sourdough baking, had an element of escapism, embodied in Netflix watch lists. One indicator of the sheer dependence people developed for Netflix was the dwindling list of recommended shows as audiences with time on their hands watched everything in sight.

Undeniably, entertainment proved to be just as essential to people’s lives, in whatever form, as the world turned unrecognizable. In the early days of the lockdown, TikTok grew more popular, online concerts became a thing, and live streams were popping up left and right.

For creators of content distributed via traditional channels, the lockdown meant no shoots, no production activity and no new shows. TV had to resort to reruns during the quarantine until it could adapt with new shows and homebound presenters reaching out via videochat.

“Even when the restrictions were eased, new protocols needed to be adopted. Everything that we did on television had to adapt to the new normal,” Raz de la Torre, director of shows such as Maalaala Mo Kaya for ABS-CBN Corp., said in an Oct. 20 video call.

Some of the protocols are shorter shoot hours, a 10-person limit per scene, sets reconfigured for social distancing, a ban on dining scenes, and the need to obtain performers’ consent to stand closer than six feet, among others.

“Many of the things that we used to have the freedom to do were suddenly gone, and that has a creative impact,” Mr. De la Torre said.

While TV struggled to produce new shows, digital content creators were able to adjust with more ease.

“A lot of creators thrived during this time because they have been able to pivot easily. A lot of vloggers just film their lives, so they can easily make content from their homes. They don’t need expensive equipment,” Jako de Leon, YouTuber and executive producer of PaperbugTV, said in an Oct. 29 video call.

At the height of the lockdown, Filipinos spent 5.2 hours a day of non-work time online — the most in Southeast Asia, where the regional average was only 4.7 hours a day at the time, Bain & Company said in its e-Conomy SEA 2020 report prepared with Google and Temasek. After lockdown rules were relaxed somewhat, Filipinos spent 4.9 hours a day in front of screens, still the highest in the region, where the average is 4.2 hours.

“The market is more ready now, so if you want to be a creator, now is the best time to do it,” Carlo Ople, who maintains a sneaker review vlog and heads tech blog Unbox.ph, said in an Oct. 22 video call.

Having started in digital content creation more than a decade ago, Mr. Ople said he has seen the industry change across various media over time: from blogging, photo sharing (see: Instagram), video blogging (vlogging), micro video blogging (see: TikTok), and now, live streams. The robust digital environment that took years for creators to build, the pandemic was able to develop in a matter of months.

“The internet was growing and internet usage was growing. But when the pandemic hit, the digitization of the Philippines in terms of market behavior shot up dramatically,” Mr. Ople said.

With people stuck at home, there was only one place for work, school, shopping, hanging out and entertainment. In other words, the past months were like an immersive training environment for understanding how digital platforms work. For a growing industry of digital content creators, this was a more than welcome development.

In January, the Creator and Influencer Council of the Philippines (CICP) was formed, gathering creators, influencers, and marketing professionals whose roles are intertwined with the industry.

Having recognized the usefulness of creators and influencers in brand-building, CICP’s founders thought it was high time to band together to strengthen the “influencer ecosystem.” Mr. De Leon and Mr. Ople are both board members of the organization.

“As they said, there are good things that have also happened during this pandemic, one of which is being able to bring the CICP to life,” Jim Guzman, president of CICP and social media head at Dentsu Aegis Network, said in an Oct. 29 video call.

One solid indication of the industry’s emerging centrality is how much bigger companies are willing to spend on digital creators. Ten years ago, Mr. Guzman said only about 5% of advertising budgets were allotted to digital. Now, this has shot up to about half the budget. “No one can deny the fact that the new celebrities are the internet stars,” he said.

Even Mr. De la Torre, the TV director, acknowledges the impact of digital content in advertising. “A lot of digital content, especially the ones that you see on YouTube, have monetization schemes that are actually very similar to a television structure… It’s still advertising-driven,” he said.

For this reason, some have found an online career to be a viable alternative to a day job. Mark Averilla, known digitally as Macoy Dubs, rose to online fame for creating Tagalog-dubbed videos. While holding on to a job at a creative agency, Mr. Averilla continues to attract new fans online, such as those following the “Aunt Julie” videos launched during the pandemic.

“Today, content creation is considered a passion and (a possible) source of income. As a matter of fact, a lot of millennials are considering leaving their full-time jobs just to be full-time content creators,” Mr. Averilla said in an Oct. 19 e-mail.

This is also one of the CICP’s goals. “Many are (creating content) because they want to entertain, to make people laugh, or to educate people… We’re here to help them continue that as a living, and not just something that they’re doing in the meantime,” Mr. De Leon said.

Mr. Ople, the sneaker vlogger, likened the appeal of online content to getting a “fix.” He said people watch TV and get sucked in for about 30 minutes, just to get a “kilig” fix, for instance. Online, a two-minute video can give a person just about the same feeling.

“The universal truths and benefits of storytelling will forever be there. What’s just happening is people can get that across multiple platforms now,” Mr. Ople said.

Mr. De la Torre, who’s been in the TV industry for more than a decade, said however that there are aspects of traditional narratives that cannot be replaced by digital. 

“You don’t give up how narratives should be told. The teleseryes, they’re supposed to mirror real life. So the way the scenes are written still has to mimic real life,” he said.

Similarly, Mr. De Leon said the two platforms will likely learn to co-exist, offering consumers more variety.

“We will still want to watch movies, we will still want to watch high-quality production stuff, we still want to see great shows and great writing. There are just more types of content now,” Mr. De Leon said.

Despite the challenges the pandemic imposed on the TV industry, digital creators agree that the mainstream platform is in no danger of dying out anytime soon. “It’s still the dominant platform that a lot of Filipinos look to, especially in areas wherein you don’t have robust and strong internet connection,” Mr. Ople said.

Mr. De la Torre also noted that getting featured on TV still gives digital creators a feeling of “legitimacy,” as it is acknowledged to have a wider reach than online.

“In many ways, you could see digital content creators as the ones who are more experimental, and therefore leading the way into treading new territory. But at the end of the day, it’s still popular mainstream platforms like television that dictate what will be palatable to a greater mass audience,” he said.

As for the future of digital, Mr. Ople said it may have to consolidate at some point. “In anything, you will always see the age of exploration and trial. That’s where people will go to a platform and try it out and experiment. And then you will start to see a consolidation — either some people will quit, or some people will band together. Some groups will form, and then you can see more structured, formal businesses out of that particular melting pot,” he said.

Pag-IBIG postpones increase in members’ monthly contribution

PAG-IBIG FUND has decided to defer the increase in its members’ monthly contribution that was supposed to take place in January 2021, the agency said, adding the move came after consulting with labor and employer groups.

“We know that many of our members and employers faced financial challenges in the last few months because of the effects brought about by the pandemic to the economy. After consulting with our stakeholders, we will no longer push through with the increase of the members’ monthly contributions next year,” Secretary Eduardo D. del Rosario, who heads the Department of Human Settlements and Urban Development, said in a statement.

He said the decision was in line with efforts of the Duterte administration “to alleviate the financial burden of our fellow Filipinos and help businesses recover.”

Mr. del Rosario heads the 11-member Pag-IBIG Fund Board of Trustees.

The agency’s statement said that in 2019, its officials approved the increase of members’ monthly contributions, which had remained unchanged since the 1980s.

Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti said that the projection at that time placed the amount of loans disbursed would eventually outpace the total collections from loan payments and members’ contributions each year.

“So, we proposed to increase the monthly savings by P50 to have enough funds to answer the growing demand and maintain the low rates of our loans,” the official said.

But he said with the pandemic, the circumstances have changed.

“Rest assured, our financial position remains strong and that has allowed us to defer the increase in our monthly contributions by a year. What we are focused on right now is providing our members and businesses the assistance they need to cope with the effects of the pandemic,” he said.

Mr. Moti said home loan availment had been rising steadily with the easing of quarantine restrictions after the pandemic dampened demand early this year.

He said that as a signal of early economic recovery, the agency released P44.16 billion in home loans this year, allowing 43,733 members to have their own homes.

For October alone, P7.7 billion in home loans were released, which equals pre-pandemic monthly takeout target for the month, he said.

Mr. Moti described the result as a “hopeful sign” that the agency was getting back on track.

“We assure our members that we will continue serving them, especially during these difficult times. While the pandemic could have been used as an excuse not to serve, we at Pag-IBIG Fund used it as a reason to serve our members better. That is the Lingkod Pag-IBIG way,” he said.

Healing priest’s biopic in 2020 MMFF

SHIFTING to an online platform may have led the annual Metro Manila Film Festival (MMFF) to introduce a greater variety of films for this year’s pandemic edition. While the requisite family films such as Magic Kingdom and Mang Kepweng: Ang Lihim ng Bandanang Itim are still part of the programming, it has been seven years since the festival last included a biopic on a religious figure, 2013’s Pedro Calungsod: Batang Martir. While Pedro Calungsod tells the life (or what little is known about the life) of the second Filipino saint who lived in the 1600s, Joven Tan’s Father Suarez: Healing Priest explored the life of a modern-day subject, the so-called healing priest, Father Fernando Suarez.

“I have heard a lot of things about Father Suarez from way back, so when I got to read the script, I was intrigued and wanted to work on this material. During our meets, prior and during the filming I remember him (Fr. Suarez) to be kind, straightforward, and sincere,” Joven Tan, the film’s director, said in a press release.

Fr. Suarez was a Filipino Catholic priest who performed faith healing in the Philippines and abroad. He was born in Taal, Batangas on Feb. 7, 1967. At the age of 18, Fr. Suarez is said to have discovered his healing abilities after he prayed over a paralyzed woman outside Quiapo Church after which the woman was able to walk again. He was ordained at the age of 35 in Canada, although he had been performing healing masses even before he officially became a priest. He returned to the Philippines to continue his healing mission in 2008. His healing missions attract thousands of people at a time.

Fr. Suarez died of a heart attack while playing tennis on Feb. 4 of this year, shortly before the film was finished. He was 53.

In the film, Father Suarez is played by John Arcilla who said it was easy saying “yes” to the role — although he had misgivings later on because of the controversies that surrounded Fr. Suarez, including accusations of corruption and sexual molestation which will be tackled in the film. Mr. Arcilla said that he didn’t want to be “a mouthpiece to justify some people’s issues,” according to the release. But after meeting Fr. Suarez, Mr. Arcilla was won over by his sincerity and because he did not try to defend himself. The priest was exonerated by the Holy Office at the Vatican in January.

Fr. Suarez, Mr. Arcilla noted, was also a fan of Heneral Luna (2015) where Mr. Arcilla played the title role. “[Fr. Suarez] personally handpicked me to play the role [in his biopic],” Mr. Arcilla said.

“While filming, I decided not [to] mimic or copy him,” said the actor. “I just took his essence and some of his demeanor but what I totally embraced was his unwavering trust in the Almighty.”

The film, which opens on Dec. 25, is something people should watch because “it pays to be reminded that we could always turn to our faith and ask guidance from our Creator,” said Mr. Tan.

Father Suarez: Healing Priest is part of this year’s MMFF slate. Tickets are now available via Upstream.ph. The Metro Manila Film Festival runs from Dec. 25 to Jan. 7 online. — Zsarlene B. Chua

Moody’s affirms Security Bank’s rating, outlook

MOODY’S INVESTORS Service affirmed Security Bank Corp.’s long-term debt rating of Baa2, citing the lender’s strong capitalization and profitability.

In a Dec. 14 credit opinion, the debt watcher also retained its “stable” outlook for the bank’s rating, which means the grade could be retained for the next 12 to 18 months.

Moody’s said the rating reflects their assumption of moderate level of systemic support from the government given Security Bank’s position as one of the biggest medium-sized banks in the Philippines.

It said the bank’s credit strengths lie in its “robust capitalization” and “stable profitability, supported by lower cost of funds.”

“Our strong capital position is an important pillar which both our clients and employees can rely upon to weather the challenges brought by the COVID-19 pandemic. That capital will be deployed to support our clients’ pandemic recovery efforts, employee health and safety initiatives, and investments in systems and technology,” Security Bank President and Chief Executive Officer Sanjiv Vohra said in a separate statement on Thursday.

Moody’s said an upgrade for the bank’s rating is unlikely in the near future as its Baa2 grade already matches the country’s sovereign rating. Following this, a downgrade of the country’s rating could also lead to a lower rating for the bank.

“A significant decline in capitalization as a result of excessive loan growth could also exert downward pressure on its BCA and ratings,” it added.

Moody’s expects the bank’s capitalization to remain robust. As of Sept. 30, Security Bank’s common equity Tier 1 ratio rose to 19.1% from 17.1%, as slower risk-weighted asset growth more than offset weaker internal capital generation.

Meanwhile, it flagged that the bank could see a further deterioration in asset quality amid the coronavirus pandemic. It noted the lender’s significant loan book exposure to pandemic-hit sectors such as retail (16%), construction (2.1%), agriculture (3.7%), and transportation (3.2%) as of end-2019.

Moody’s added that the bank’s consumer loans, which accounted for 26% of the total portfolio as of end-September, are also sizable.

“These loans are riskier as they are unsecured and retail borrowers tend to have limited buffers to withstand a prolonged cash flow crunch amid the economic downturn,” the report said.

Security Bank’s net profit slumped to P1 billion in the three months to September from P2.7 billion a year earlier due to higher loan loss reserves. This caused the lender’s nine-month net earnings to go down 12.9% to P6 billion.

The bank’s shares ended trading at P141 apiece on Thursday, down by 1.88% or P2.70 from its previous close. — Luz Wendy T. Noble

The cosmetics industry puts on a brave face

By Gillian M. Cortez, Reporter

HARD TIMES require most people to strip down to bare essentials. With work-from-home arrangements and mask mandates rendering make-up more or less superfluous, it’s hard to imagine how the cosmetics industry could possibly have survived. But contrary to expectations, it did, with the help of clever adaptations, like positioning the product as a small luxury, or a reassuring remnant of the user’s pre-pandemic life.

“Makeup enthusiasts don’t stop wearing even in the midst of compulsory face masks during this pandemic,” a representative of online brand Glamskin said in an e-mail exchange with BusinessWorld.

Thanks to masks, though, the playing field has shifted, from the face in general, to the eyes — just the right conditions for Glamskin’s eyeshadow products, some of which come in palettes the size of dinner plates.

“Consumers are raising their ‘eye game,’ emphasizing the appearance of their eyes. We have been trying to get our consumers to use more products for the upper part of the face, mainly brows, eyeshadow, liners, and lashes,” Glamskin said.

Glamskin’s social media has been pushing hard for rainbow-colored single-pan eyeshadow and fluttery false eyelashes, which promise a touch of glamor just a few inches north of the ever-present face mask.

Another brand with a strong eyeshadow line, Filipinta, which has built a reputation for vibrant colors, has also had to raise its social media game. Filipinta Creative Director Hannah Kirchhoff said in an interview with BusinessWorld that without social media, the company might not have survived.

Business “decreased a lot because what’s the use of (makeup) when there’s face shields and face masks,” she said.

However, the brand is still hanging on via its social media platforms, which had steered attention to its products pre-COVID-19. Ms. Kirchoff said marketing has continued via this channel to get around the lockdown and occasional disruption to delivery services.

Filipinta also reduced time to launch from three months from the previous six, to get product out the door faster and be less of a drain on resources during development.

“We really had to adapt to the situation,” she added.

Ever Bilena, Inc. Chief Marketing Officer Denice Sy told BusinessWorld makeup was a hard sell during the most difficult months of the crisis, when businesses were closing and workers were losing their jobs.

“It was a very sensitive time. It was not okay to market makeup at all. Everyone is really more concerned about their well-being and their health,” she said.

The Ever Bilena stable of brands includes Careline, targeted at teens; Blackwater, a fragrance line for men and women; and EB Naturals, a skincare line featuring soap and lotion, all suddenly difficult to sell for various reasons, not the least among them the grounding of the entire school-age population and the confinement of nearly the entire workforce to working from home.

“We actually did not think (the crisis) would last this long… in general I think the whole colorful cosmetics industry is suffering,” Ms. Sy said. She added that when the shops opened again, business did not pick up immediately due to limitations on mall hours and public transportation.

“That’s the reason why we see a lot of color cosmetics brands really trying to generate consumer purchases via promotions and campaigns,” she said.

Glamskin found itself having to offer discounts, even for its professional products.

“In order for us to carry on with our business and continue to provide jobs for our employees, our objective is to have continuous income despite the challenges we are facing. Putting most of our items on sale on all selling platforms online keeps our business afloat,” it said.

The biggest victim of the mask mandate was undoubtedly lipstick, which used to be wielded to inject striking color accents to the wearer’s general look. But that didn’t mean products for the eye area were flying off the shelves.

Ms. Sy of Ever Bilena described the situation for eye products as “not declining as much as the other categories… all other categories are barely performing.”

Ms. Sy also said the crisis also forced a shift to products perceived as more convenient, like eyebrow pencils, mascara and liquid eyeliner, for users who still wanted to achieve a put-together look without the time-consuming effort of their pre-pandemic routines.

Going forward, it is beginning to dawn on the industry that health protocols imposed by the pandemic will be around for some time.

“We will continue (to work with) the safety guidelines; makeup is a sanitary thing… as much as possible, we will keep pushing out products people like. We just need keep our heads up and be smart with our choices,” Ms. Kirchoff of Filipinta said.

The choice has come down to two equally plausible business strategies: saving costs during the crisis or generating excitement with new offerings.

“It’s important to excite the category… because people are not buying color cosmetics that much now; it’s really a call to action for them to try something new… people (will be) looking into cosmetics again,” Ms. Sy said.

Glamskin, which is counting on its users to look at cosmetics as a pleasant reminder of their old normal, before life was upended by the pandemic, said: “We all learned that despite the crisis, people remain resilient” and continue to seek out things that may not be essential, but are “important for their well being.”

Primex Realty taps Accor group for 200-room hotel in San Juan

PRIMEX Realty Corp. signed with hotel group Accor SA to manage its San Juan-based Pullman Manila at Primex Tower, which is slated to be completed by 2023.

The 200-room hotel will be at the topmost 10 floors of the mixed-use property that houses retail and office spaces in the lower floors.

Primex Realty Corp. is a subsidiary of listed company Primex Corp., which said in a disclosure on Thursday that the hotel at the 50-storey glass tower will have two restaurants, a rooftop bar, fitness center, swimming pool, and events facilities.

Primex Corp. started construction of the P3.6-billion Primex Tower in 2018, offering office spaces at 200-300-square meters each. The project is on a 1,944-square meter lot at the corner of EDSA, Connecticut Street, and Florida Street at the Greenhills commercial district.

Accor runs seven hotels in the Greater Manila area, with 16 more in its local pipeline for the next five years.

“This is a great market which will continue to thrive in the long-term due to its great potential driven by economic development, natural attractions, the people’s warm hospitality and the ongoing improvement of transport infrastructure,” said Andrew Langdon, Accor senior vice-president for Southeast Asia, Japan, and South Korea.

Primex Corp. acquired 100% stake in its affiliate Primex Realty Corp. in 2015, then 42.86% stake in Primex Development Corp. in 2019.

Shares in Primex jumped 1.20% or two centavos to P1.69 each on Thursday. — Jenina P. Ibañez

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