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Banks’ soured loans highest in 6 years

LOCAL BANKS’ bad loans continued to rise in July as the economy was battered by the coronavirus pandemic, bringing the industry’s nonperforming loan (NPL) ratio to its highest level since 2014.

Gross bad loans climbed by nearly a third (32.1%) to P290.1 billion in July from P219.6 billion a year ago, according to data from the Bangko Sentral ng Pilipinas (BSP).

The industry-wide gross bad loan ratio stood at 2.67% as of end-July, rising from the 2.53% as of end-June. This was also the highest in six years or since the 2.74% logged in August 2014.

Bad loans are those left unpaid for at least 30 days after the due date. These are considered risky assets because borrowers are unlikely to settle these loans.

The central bank is projecting the bad loan ratio to rise to 4.6% by end-December. It reached 17.6% in the aftermath of the Asian financial crisis in 2002.

The rise in soured loans outpaced the 5.14% growth in the industry’s loan portfolio to P10.86 trillion in July.

Economic activity in the country was halted due to strict lockdown measures that began in mid-March to curb the rise in coronavirus infections. Metro Manila remains under a general community quarantine until Sept. 30. Coronavirus cases stood at 248,947 as of Thursday.

Past due loans ballooned by 88.8% to P573.2 billion in July, pushing the industry’s past due loan ratio to 5.28% from 3.49% in June.

Restructured loans jumped by 23.14% to P49.03 billion in July. The ratio of restructured loans to the total loan book stood at 0.45% for the third consecutive month, up from the 0.39% a year ago.

As the pandemic continues to affect the quality of loan books, banks’ provision for credit losses jumped by 59% to P321.85 billion from the P202.22 billion it set aside last year.

The industry’s bad loan coverage ratio, which measures their allowance for potential losses due to soured loans, stood at 110.94% as of end-July, higher than 92.1% a year ago and 109.87% logged in June.

Meanwhile, the capital adequacy ratio (CAR) stood at 12.69%, slightly worse than 12.85% a year ago and 12.73% in the prior month. Despite this, the end-July ratio of the banking industry was still beyond the 10% minimum requirement set by the BSP.

The continued rise in nonperforming loans comes as no surprise with the economy in recession, according to Colegio de San Juan de Letran Graduate School Dean Emmanuel J. Lopez.

“The situation is an offshoot of the economic recession that the country is experiencing currently, and this phenomenon is expected to worsen until the end of the year, when economic authorities project a major economic contraction in our GDP (gross domestic product),” Mr. Lopez said in a text message.

The country entered a recession after economic output plunged by a record 16.5% in the second quarter. The government expects GDP to shrink by 4.5% to 6.6% this year.

Mr. Lopez said banks are now left with no choice but to buy time and wait for the economy to “at least return to a semblance of normalcy.”

In July, bank lending expanded by 6.7% year on year, the slowest since 5% in March 2010.

The Financial Institutions Strategic Transfer Bill, which will create asset management companies to relieve banks of their bad loans, has been passed in the House of Representatives and is pending in the Senate. — Luz Wendy T. Noble

External trade weakness persists in July amid global slowdown

By Lourdes O. Pilar, Researcher

PHILIPPINE international trade further contracted in July as trade activity remains subdued here and the rest of the world, the Philippine Statistics Authority (PSA) reported on Thursday.

Preliminary data from the PSA showed merchandise exports in July declined by 9.6% to $5.654 billion compared with a revised 12.5% fall in June and 4.8% growth recorded in July 2019.

The July result marked the fifth straight month of decline for exports, as well as the slowest decline this year after the double-digit decline that started in March.

Philippine trade year-on-year performance (July 2020)

Meanwhile, merchandise imports contracted for the 15th consecutive month in July by 24.4% to $7.481 billion, worsening from the year-on-year declines of 23.1% in June and 0.9% in July last year.

The trade deficit in July stood at $1.827 billion, lower than the $3.641-billion gap in the same month last year. This was, however, the biggest in four months, or since March’s shortfall of $2.368 billion.

The country’s total external trade in goods — the sum of export and import goods — was $13.134 billion in July, 18.6% down year on year. This brought the total trade in the seven-month period to $80.771 billion, nearly a fourth lower than the $105.725 billion a year ago.

For the seven months to July, exports fell by 16.4% to $34.135 billion, worse than the Development Budget Coordination Committee’s (DBCC) revised projection of a 16% fall for the year.

Meanwhile, the import bill declined by 28.1% to $46.636 billion, faster than the DBCC’s revised target of an 18% contraction for 2020.

Year to date, the trade balance amounted to a $12.501-billion deficit, narrower than the $24.066-billion trade gap in 2019’s comparable seven months.

Manufactured goods, which made up 83.8% of total sales in July, slid by 8.8% to $4.738 billion from $5.194 billion previously.

Electronics, which made up about 70% of manufactured goods and more than half of the total exported goods, declined by 2.6% to $3.351 billion in July, with semiconductors contributing $2.501 billion, down 1.8%.

Outbound shipments of agro-based products likewise shrank by 21.7% to $342.578 million, followed by forest products which fell by 6% to $29.240 million, and petroleum products which dropped by 92.2% to $258,710.

Bucking the trend were exports of mineral products, which rose 0.1% to $437.853 million.

On the import side, purchases of raw materials and intermediate goods, which made up 41% of the import total, declined by 14.8% to $3.066 billion in July.

Capital goods, comprising 31.5% of the total, fell by 29.8% to $2.358 billion.

Imports of consumer goods fell by 27.3% to $1.227 billion and mineral fuels, lubricant and related materials dropped by 36.2% to $746.962 million.

“The continuous contraction of exports and imports reflect the lethargy of both domestic and world economies due to the seemingly increasing rampage of the COVID-19 (coronavirus disease 2019) pandemic,” said University of Asia and the Pacific (UA&P) Senior Economist Cid L. Terosa in an e-mail. 

In a statement, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the severe contraction in major import commodities reflects “fading domestic demand with the economy in recession.”

The economy plunged into a recession as gross domestic product (GDP) fell by a record 16.5% in the second quarter. For the first half, the country’s GDP decline at 8.6%.

The country’s external trade, while a net negative contributor to the calculation of GDP growth, is still considered an essential growth component. This as exports and purchases of investment goods abroad such as capital goods and raw and intermediate materials are seen to contribute to growth in capital formation and government spending through its “Build, Build, Build” infrastructure program.

Mr. Mapa said the “sustained double-digit contraction” in capital goods and raw materials “point to fading potential output,” increasing the possibility that Philippine economic growth could slow in the next few years.

“The drop in trade performance will constrain economic growth by curtailing domestic production and income-earning activities,” UA&P’s Mr. Terosa said. Many exporters will find smaller and limited world markets while import-dependent industries will encounter some supply bottlenecks.”

“As long as domestic and world markets remain listless, trade performance will continue to be sluggish until the first quarter of next year. Trade activities may start to pick up after that,” he added.

In a phone interview, Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said that while it would be difficult to reverse the decline in exports this year, the recent “established trend” of slower year-on-year declines would hopefully make it possible for export performance to even out by the end of the year.

Philippine trade year-on-year performance (July 2020)

PHILIPPINE international trade further contracted in July as trade activity remains subdued here and the rest of the world, the Philippine Statistics Authority (PSA) reported on Thursday. Read the full story.

Philippine trade year-on-year performance (July 2020)

Business group pushes for satellite access liberalization

By Marifi S. Jara, Mindanao Bureau Chief

THE BUSINESS sector is appealing to President Rodrigo R. Duterte to issue an order that will ease the licensing requirement on satellite access to speed up the delivery of internet services, especially outside major urban areas.

“We are pushing for the signing of a new executive order on satellite access liberalization to effect an immediate, expanded internet coverage and to improve productivity,” Philippine Chamber of Commerce and Industry (PCCI) President Benedicto V. Yujuico said on Thursday.

This means an internet service provider (ISP) can offer broadband connection using satellite technology without getting a congressional franchise.

“We are the only country in the world that requires a congressional franchise to establish a satellite broadband company. We are using outdated regulations that hinder the entry of more players in the broadband industry,” he said during the virtual opening of the Mindanao Business Conference 2020.

Mr. Yujuico said this would benefit areas outside urban centers where the rollout of telecommunication infrastructure is too costly for private companies. 

This change in telecommunication policy, he said, should be made part of the government’s infrastructure development program amid coronavirus disease 2019 (COVID-19) pandemic.

“Our geographical layout as an archipelagic country makes the internet even more crucial to our recovery,” he said.

Mr. Yujuico said many micro, small and medium enterprises (MSMEs), which make up 99.5% of business establishments in the country, were “caught unaware and have not been able to leverage on the internet economy and rising digitalization” prompted by the COVID-19 crisis due to limited internet access.

The Philippines ranked 66th out of 85 nations in the 2020 Digital Quality of Life Index released by information technology firm Surfshark Ltd.

Among Southeast Asian countries, the Philippines trailed Indonesia, Malaysia, Singapore, Thailand and Indonesia in terms of internet affordability and quality.

Under Republic Act 10929 or the Free Internet Access in Public Places Act, the Department of Information and Communications Technology can partner with the private sector to meet and the program’s targets.

Section 6 of the law allows existing ISPs to “acquire and utilize internet connectivity directly from satellites and other emerging technologies to ensure universal coverage, which when used to provide internet connectivity shall be considered value-added services.”

Mr. Yujuico said an expanded opening of satellite access is one infrastructure intervention that the government can do to help ensure business survival and continuity.

“As with agriculture, infrastructure has multiplier effects and economic benefits that are higher than any fiscal intervention.”

Presidential Spokesperson Harry L. Roque, Jr., told an online news briefing on Thursday the PCCI’s proposal requires a comprehensive study.   

“That needs a comprehensive study because as we know, the use of these resources are subject to the grant of a franchise issued by Congress,” he said in mixed English and Filipino.

He added that an executive order could infringe on the powers of Congress. — with inputs from Gillian M. Cortez

Mindanao businesses want gov’t to resume infrastructure projects

THE Mindanao business community wants the government to restart its infrastructure projects in the region as the economy reopens.

Mindanao is transitioning to fewer lockdown restrictions, with 75% of industrial and commercial businesses reopened, the Philippine Chamber of Commerce and Industry (PCCI) said at the 29th Mindanao Business Conference on Thursday.

In its recommendations, the business group urged the government to resume infrastructure projects such as the Marawi rehabilitation shelters,  Mindanao-Visayas interconnection, Mindanao Railway, Panguil Bay bridge, rehabilitation of hydropower complexes, and airport expansion.

The PCCI also asked the Finance department to prioritize funding for road infrastructure development programs to “efficiently transport raw materials from agricultural areas to main processing or manufacturing centers.”

At the same event, Finance Secretary Carlos G. Dominguez III said the government continues to prioritize infrastructure projects in Mindanao.

“Mindanao is at the front and center of the ‘Build, Build, Build’ infrastructure program. The DoF has been able to secure financing for some infrastructure and peace-building projects in the region even amidst the pandemic,” he said in a speech during the conference.

He said the government signed the P18.5-billion loan agreement with the Japanese government in June to finance the Davao City bypass construction project, and a P1.4-billion grant from the European Union for development and peace-building programs in Mindanao.

“These projects also demonstrate the Duterte administration’s commitment to move Mindanao from the margins, and transform it into the center of agriculture and industry,” Mr. Dominguez added.

Meanwhile, PCCI Mindanao also sought faster telecommunication cell tower approvals, and to allow private telcos to secure access to existing tower facilities to improve internet bandwidth.

The business group said the interagency task force on the coronavirus should include regional private sector groups in its discussions of lockdown guidelines.

PCCI Mindanao also asked the government to boost healthcare capacity by establishing more COVID-19 testing labs, and to use digital technologies for contact tracing.

The group also said the Board of Investments and local governments should offer incentives to companies investing in the healthcare sector.

PCCI Mindanao said the Trade department should help assist and financially support local chambers in helping prepare micro-, small- and medium-sized enterprises (MSME) in applying for government loans.

State banks should also restructure loan terms and maturity dates for microfinance institutions to reopen credit assistance to microenterprises in retail or services sectors, they said.

PCCI Mindanao said microenterprises capitalized below P3 million should be exempted from income tax and minimum wage adjustments.

The Trade, Science and Technology and Labor departments should also immediately roll out their retraining programs for MSME workers in sectors considered nonessential, they said. — Jenina P. Ibañez and Beatrice M. Laforga

Pepsi-Cola to delist from local bourse

By Denise A. Valdez, Senior Reporter

PEPSI-COLA Products Philippines, Inc. (Pepsi-Cola Philippines) will be exiting the Philippine Stock Exchange (PSE) after its public ownership dropped below the minimum requirement.

The company told the exchange on Thursday its board of directors had approved the voluntary delisting of shares from the PSE main board due its inability to comply with the 10% minimum public float after a Korean conglomerate bought its shares in June.

Pepsi-Cola Philippines sold a 30.7% stake or 1,132,950,431 shares to Lotte Chilsung Beverage Co. Ltd. for P2.21 billion, which brought down its public float to 2.1%. Breaking the PSE’s 10% threshold for minimum public ownership is a ground for delisting.

“After due evaluation and study of the options available to the company, the board of directors approved and authorized the voluntary delisting of the company’s shares from the PSE,” the company said.

“Considering the level of its public ownership and the prevailing market conditions, it will not be able to comply with the minimum public ownership requirement by Dec. 18, 2020,” it added.

Lotte Chilsung will be doing another tender offer to buy 77,858,236 Pepsi-Cola Philippines shares owned by the public, excluding those currently held by Lotte Corp. and Quaker Global Investments B.V.

The new tender offer will be on Sep. 16. Lotte Chilsung is yet to file its tender offer report with regulators that would contain the conditions for the planned offer.

While the delisting of Pepsi-Cola Philippines may have minimal effect on market movement, some investors may dislike the company’s decision, and lose confidence in the bourse, Philstocks Financial, Inc. Research Associate Claire T. Alviar said.

“Long term investors of Pepsi could be disappointed by the decision of the management since it will be hard for them to liquidate, particularly if they choose not to participate in the anticipated tender offer,” she said in a text message.

“Some people may also lose confidence as the IPO (initial public offering) price of [Pepsi] back then was at P3.50, lower than its current price of P1.70, and there’s a possibility that the tender offer price would also be lower than the IPO price,” she added.

Shares in Pepsi-Cola Philippines stopped trading on June 17, when it closed at P1.70 apiece. Despite its delisting from the PSE, it will remain the exclusive bottler of PepsiCo’s beverage brands Pepsi, Mountain Dew, 7-Up, Mirinda, Mug, Gatorade, Tropicana, Sting and Aquafina in the Philippines.

Ayalas’ AC Energy pulls out of Australian firm Infigen

AN affiliate of Ayala Corp. sold its material stake in an Australian energy firm, which might be delisted from the stock market soon.

UAC Energy Holdings, a 75%-owned company of the Ayalas’ power arm AC Energy, Inc., divested its 20% shareholdings in Infigen Energy, Ltd. for A$0.92 per share to former rival bidder Iberdrola, S.A., the local conglomerate told the Philippine Stock Exchange, Thursday.

“With the potential delisting of Infigen, AC Energy has decided to divest its stake in the company. We wish Iberdrola well on its successful acquisition of the platform,” AC Energy International Chief Operating Officer Patrice R. Clausse said in a statement.

To recall, UAC Energy tried to fully acquire Infigen but later conceded to the Spanish multinational utility. Its old shareholdings were bought for an average price of A$0.794 per share. It previously said that its “offer was not predicated on control.”

UAC Energy’s investment in the Australian company was valued at A$178 million, or about US$128 million, if pegged against Iberdrola’s bid price.

Iberdrola is one of the biggest energy players in the world, having over 55 gigawatts of installed capacity in Spain, the United Kingdom, South America, and the United States. It powers around 34 million consumers worldwide. Presently, it owns three quarters of Infigen’s shares, while it is still accepting more until Sept. 23.

Both Iberdrola and UAC Energy pounced on Infigen, which has a portfolio of renewable projects with 670 megawatts (MW) of capacity, after its share prices dropped with the fall in power prices in the country.

Despite withdrawing investments from Infigen, AC Energy said the joint venture firm will continue to invest in the country with its renewable projects in the pipeline located in four Australian states.

“AC Energy remain[s] committed to invest in Australia as it moves to ramping up construction of its 720 MW New England solar farm in the coming months,” Mr. Clausse said.

It is also developing a 250-MW hydropower plant and 300-MW solar farm in South Australia; a 160-MW solar facility in Victoria; and 1,200-MW renewable energy parks in northwest Tasmania.

UPC\AC Renewables Australia, AC Energy’s joint venture with Hong Kong-based UPC Renewables Group, holds the remaining quarter interest in UAC Energy.

In the first half of 2020, AC Energy commenced the construction of some 700 MW clean power projects in the Philippines, Vietnam, India, and Australia which have a combined cost of A$1.23 billion.

On Thursday, shares in Ayala Corp. fell by 2.23% to close at P700 each. — Adam J. Ang

Mulan, once a sure thing, becomes a problem for Disney

IT WAS supposed to be another $1 billion blockbuster for Walt Disney Co. — a live-action remake of a 1998 animated hit featuring an all-star Asian cast, breathtaking cinematography, and plenty of martial arts.

Instead, the new Mulan is proving to be a political hot potato, reflecting the US’s fraying ties with China, and the choices companies face when operating in the highly politicized, but lucrative environment that is modern-day China.

The $200 million film, which was made available for purchase online in the US and Europe last week and is set to open in China on Friday, has seen a string of controversies — all while the coronavirus knocked out its chances of getting a successful run in theaters.

An online boycott that began last year, when one of the stars spoke supportively of the crackdown on anti-China protesters in Hong Kong, has continued. Now, Disney is facing heat for filming in a part of China where the government has detained as many as 1 million ethnic Uighurs in camps called “voluntary education centers,” and then thanking that region’s authorities in the movie’s credits.

Disney is the latest US business to be embroiled in a political controversy involving China. Last year, the National Basketball Association (NBA) was plunged into turmoil after a team manager tweeted in support of the Hong Kong demonstrators, triggering a backlash and a blackout of games in China. DreamWorks Animation’s movie Abominable stirred up a storm in Asia after the film featured a map reflecting China’s maritime claims disputed by its neighbors.

‘ADDICTED TO CHINA’
Senator Tom Cotton, a Republican from Arkansas, slammed Disney on Twitter Tuesday, saying the entertainment giant is “addicted to Chinese cash and will do just about anything to please the Communist Party.” Another Republican senator, Josh Hawley of Missouri, sent Disney Chief Executive Officer Bob Chapek a letter Wednesday with nine questions, including whether the company would donate any Mulan profits to “organizations dedicated to fighting human trafficking and the other atrocities” in China.

Disney has a lot at stake in the country. The company spent $5.5 billion developing its Shanghai Disneyland resort and has been expanding its smaller park in Hong Kong. The movie market there is also on track to become the world’s largest. But with both Republicans and Democrats focusing on China trade and cultural issues in the run-up to the presidential election, the company could continue to find itself in the political crossfire.

“I wouldn’t be surprised if they’re called before Congress,” said Stanley Rosen, a political-science professor and specialist on China at the University of Southern California.

HIGH HOPES
It certainly didn’t begin this way when Disney started work on the film more than five years ago.

The company sought to address cultural and social concerns about the earlier picture, which featured Donny Osmond and Harvey Fierstein voicing Asian characters. For the new picture, they were replaced with a largely Chinese or Chinese-American cast, including Yifei Liu as the heroine who dresses as a male soldier to save her father, and Jet Li, as her emperor.

Disney chose a female director, New Zealander Niki Caro, because “she has a long tradition of going into very specific communities and telling a story,” said Mulan producer Jason Reed. He pointed to films she had done, such as North Country, about Minnesota iron miners, and McFarland, USA, about a Latino track team in California.

Mulan, which is based on a centuries-old Chinese folk song, incorporates traditional Chinese architecture, costumes and spirituality.

“We spent a great deal of time with scholars, consultants and various creative people really listening to how they look at the world,” Reed said.

CONTROVERSIAL COMMENTS
Then Liu, the film’s star, voiced her support for the mainland Chinese government during Hong Kong pro-democracy protests last year. A #BoycottMulan movement began trending on Twitter.

After the film’s release last Friday, others began to notice that the credits included thanks to local authorities in Xinjiang for letting the company film there. The region is where members of China’s Muslim minority are being held in camps as part of a crackdown that followed a series of Uighur attacks on civilians in 2013, including a flaming car attack in the heart of Beijing: Tiananmen Square.

In 2014, Chinese President Xi Jinping vowed to employ a “strike-first” strategy in Xinjiang. Officials in the region then set up a vast security state along with mass internment camps, which United Nations experts said in 2018 could hold as many as one million Uighurs.

International criticism has been building over the camps for several years, with the US sanctioning officials from the region and European governments condemning the repression of Uighurs. China has sought to defend them by calling them “education” camps that Uighurs attend voluntarily, even though a visit to one last year showed dormitories featuring bars on the windows and doors that only lock from the outside.

Representatives for Disney did not respond to requests for comment.

MARKETING MUSCLE
The financial impact of the controversies on Mulan remains to be seen. The movie already faced a steep climb to profitability because so many theaters were closed by the coronavirus and Disney took the unusual step of releasing it online for $30 on its Disney+ streaming service.

The company also spent tens of millions of dollars marketing Mulan, over and above its production budget. Given the state of the movie-theater business, it will be tough to make back its investment.

Disney hasn’t released numbers on online purchases of the film, although data from third parties suggest there was a lot of interest. Box-office results from China, currently the world’s second-largest movie market, won’t be available until the weekend. Some, like USC’s Rosen, think it will do well there. Chinese theaters have come roaring back from the COVID-19 shutdown since reopening in July, and the film’s stars are popular.

‘SPREADING HATRED’
Meanwhile in China, while many eagerly await the release of Mulan, some users of Weibo, the country’s largest social media platform, touched upon the Xinjiang controversy in their posts and voiced support for the movie.

“The western anti-Chinese forces, Hong Kong and Taiwan independence forces and others are spreading hatred against China’s soft power using Xinjiang,” said one user. Another said, “I seriously don’t understand.”

Rich Gelfond, chief executive officer of Imax Corp., which has a big presence in China, predicts no backlash against US pictures there — even with the trade war and other issues between the countries. The Warner Bros. sci-fi thriller Tenet took in $30 million in China last weekend, the biggest opening for a Christopher Nolan-directed film in the country.

The bigger problems for Mulan could be ones that studios are more accustomed to: piracy, for example, because the movie is already available online. The reviews have also been less than unanimous — 76% of critics and 54% of the audience gave it a thumbs up, according to Rotten Tomatoes.

But the woes for US companies doing business in China aren’t close to being over, said Michael Berry, who teaches Chinese culture at the University of California, Los Angeles.

“Part of this feels like a political pile-on,” he said. “Companies like Disney are faced with difficult decisions when it comes to balancing where they stand with core principles like human rights and access to global markets.” — Bloomberg

SSI targets 20% of sales to come from e-commerce

SPECIALTY retailer SSI Group, Inc. is keen on expanding its e-commerce platforms to contribute 20% of its sales within the next few years.

In the company’s annual stockholder’s meeting on Thursday, SSI President Anthony T. Huang said the coronavirus pandemic is pushing the company to adapt to changing consumer habits.

“Our medium-term vision for e-commerce, in terms of its contribution to our total sales, was 20%. And last year, we were at less than 5% of sales… To date, we’re already at around 12-13%… So, we’re definitely well on our way to meeting our medium-term vision of a 20% contribution,” he said.

The coronavirus pandemic, which has put many local businesses to a halt beginning mid-March and left consumers stuck at home, hit the operations of SSI’s brick-and-mortar stores as reflected in its first-half sales.

SSI swung to a net loss of P476.29 million for January to June, reversing its P345.94-million profit in the same period last year. Revenues dropped 49% to P5.04 billion.

SSI is the Philippine retailer of international brands such as Gucci, Prada, Kate Spade, Zara, Marks & Spencer, Gap, Lacoste, Banana Republic, Muji, Lush, TWG, SaladStop, and Shake Shack.

“Beyond the focus on cutting costs and cash generation, and on emphasizing and communicating the health and safety measures in our brick and mortar stores…, the group’s main focus is on accelerating its e-commerce expansion and on innovating new channels…through which we can reach our customers,” Mr. Huang said.

The company has launched an “at-home concierge service” in May to drive sales from loyal customers remotely. In the next two months, SSI will also be launching a multi-brand site that will gather products across SSI’s brands in one place.

“The group will continue to leverage on its unique brand portfolio and resilient customer base,” Mr. Huang said. “As far as the upper market segment is concerned, which has always historically been a more resilient market, I believe that the recovery for that market segment will be quicker.”

Shares in SSI at the stock exchange picked up nine centavos or 7.63% to close at P1.27 each on Thursday. — Denise A. Valdez

Disney ‘very pleased’ with Mulan, but doesn’t release numbers

WALT DISNEY Co. investors eager to hear early results from the company’s unusual online release of the new film Mulan will have to wait.

Chief Financial Officer Christine McCarthy said Wednesday Disney is happy with the debut of Mulan on its streaming service and that the picture led to an increase in subscribers. But she declined to reveal any sales numbers.

“We are very pleased with what we saw over the four-day weekend — I’ll leave it at that,” Ms. McCarthy said on a Citigroup Inc. conference call. “A four-day weekend is just the beginning.”

Disney will talk more about the release during its next quarterly earnings call in early November, she said. The entertainment giant made the movie available online starting Sept. 4, but customers have to pay an additional $30 — on top of the usual $7-a-month charge.

The decision to release the film online was made after the coronavirus shut down theaters. Ms. McCarthy said only about 68% of US theaters are open and many key markets remain closed, including Los Angeles and New York City. Consumers, particularly older ones and parents, remain skittish about attending theaters during the pandemic, she said.

“Would a family with young kids go? Probably not,” Ms. McCarthy said.

The company said last month that Disney+ had 60.5 million customers. Most of them are in the US and Europe.

“A collateral benefit is what we saw in some additional new subscribers, but that wasn’t the driving force,” Ms. McCarthy said. “We’re certain some people came on the service that had been on the fence before.”

CLOSELY WATCHED
Hollywood executives will closely examine the results from Mulan and compare them to the expected ticket sales from a traditional release, as well as the options for introducing other first-run films in this fashion.

Mulan, a $200 million live-action remake of a 1998 animated hit, was originally supposed to be released in theaters in March. Disney delayed the debut several times because of the COVID-19 crisis. It is releasing the film theatrically in countries where Disney+ isn’t offered. The picture will debut in China, a critical market, on Friday.

The movie, a retelling of a centuries-old Chinese folk story, has generated controversy. Last year, a Mulan boycott began trending on Twitter.com after the film’s star expressed her support for the Hong Kong police during pro-democracy protests there. More recently, Disney has come under fire for shooting some scenes in a region in China where the country’s Muslim minority is oppressed. — Bloomberg

NTC recalls ABS-CBN frequencies

THE National Telecommunications Commission (NTC) has resolved to recall all the frequencies assigned to ABS-CBN Corp. after the House of Representatives in July denied the network’s application for a legislative franchise.

The NTC issued the order on Wednesday recalling the frequencies or channels assigned to ABS-CBN’s 23 radio stations, 42 television stations, and 10 DTTB (digital terrestrial television broadcasting) stations.

“Absent a valid legislative franchise, the recall of the frequencies assigned to the respondent is warranted,” the order said.

The commission cited Section 1 of Act No. 3846 or the Radio Control Law that states: “No person, firm, company, association, or corporation shall construct, install, establish, or operate a radio transmitting station, or a radio receiving station used for commercial purposes, or a radio broadcasting station, without having first obtained a franchises therfor from Congress of the Philippines.”

The House of Representatives denied the network’s application for a franchise renewal on  July 10.

The NTC said all provisional authorities or certificates of public convenience granted to the network are also revoked or cancelled.

“Respondent’s pending applications/petitions before the Commission are hereby dismissed/denied,” said the order as signed by Commissioner Gamaliel A. Cordoba and Deputy Commissioners Edgardo V. Cabarios and Delilah F. Deles.

In 2017, President Rodrigo R. Duterte accused ABS-CBN of swindling after it refused to run political ads he had paid for during the 2016 presidential campaign.

He also criticized the broadcaster for airing news stories about his alleged secret bank accounts. He said he would block the renewal of the company’s franchise if he had his way.

On Feb. 11, the Center for Media Freedom and Responsibility called the case against the network a “dangerous attempt to control and silence free press.” — Arjay L. Balinbin

ABS-CBN films to stream on Singapore TV-on-demand platform

IN A BID to expand the reach of its content worldwide, ABS-CBN will be streaming select films from its library on Singapore’s StarHub TV-on-demand (TVOD) platform.

The move was a partnership between Singaporean telecommunications company StarHub and ABS-CBN’s global subscription television network The Filipino Channel (TFC).

“TFC understands how the ‘new normal’ affects the viewing habits of our audience. Hence, we are growing our premium TVOD with valuable support from our long-term business partners like StarHub and other OTT (over-the-top) partners in the Asia Pacific region,” Raymund Romero, ABS-CBN Global’s head regional marketing head for Asia Pacific, said in a statement.

ABS-CBN Global is the international subsidiary of media giant ABS-CBN and TFC is one of the channels under its wings.

Some of the films that will be shown in StarHub are Unbreakable (2019) directed by Mae Czarina-Cruz, The Hows of Us (2018) by Cathy Garcia-Molina, Finally Found Someone (2017) by Theodore Boborol, My Ex and Whys (2017) by Cathy Garcia-Molina, Clarita (2019) by Roderick Cabrido, and Bride for Rent (2014) by Mae Czarina-Cruz.

ABS-CBN, which was denied a franchise renewal in July, has started focusing on exporting content worldwide — distributing films and TV series to countries in South America, Asia, and Africa. Several of its shows have been moved online.

“This is part of our transformation journey to offer customers greater accessibility and even more content choices. ABS-CBN films are well received by consumers worldwide and we are confident that these films will be hits among our customers,” said Yann Courqueux, StarHub’s vice-president of home product, in the statement. — ZBC

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