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Charting a path toward recovery for small businesses

The coronavirus pandemic will long be remembered among the greatest challenges of the modern world, not only because of its long-term impact on the global healthcare system but also because of its effects on the world’s economy.

Estimates of the virus’global impact vary: the Organisation for Economic Co-operation and Development (OECD) predicted that COVID-19 will lower global GDP growth by one-half a percentage point for 2020 (from 2.9 to 2.4%). Bloomberg Economics, meanwhile, warns that full-year GDP growth could fall to zero in a worst-case pandemic scenario.

Worst of all, COVID-19 has an outsized impact on small businesses, many of which have lost revenues to the quarantines imposed by governments worldwide. The same case exists here in the Philippines.

“Of the essential businesses that were allowed to remain open, most of them experienced very low demand, the cost of doing business was higher, their supplies were limited and the personal health risks a constant concern,” BDO Network Bank President Jesus Antonio Itchonsaid in an e-mail.

And for those businesses that were declared non-essential and were not allowed to operate, BDO Network Bank Senior Vice-President and Head of Micro, Small and Medium Enterprises Karen Cua added that the only choice was to shut down their businesses.

“There is now a lot of uncertainty regarding future sales in the new norm, and a recurrence of the lockdown could be possible due to a second wave of infections. Being unable to operate, or else seeing dramatically reduced sales, businesses are now struggling to meet their payment obligations like rent and loans,” Ms. Cua said.

This is why BDO Network Bank has doubled its efforts to meet the needs of Filipino communities. As the country’s biggest rural bank, BDO Network Bank operates more than 220 branches and over 230 automated teller machines across the country. Throughout the pandemic, the bank has kept all of its branches and offices open even during the most challenging periods of the government-imposed community quarantine.

To help their clients during the crisis, Mr. Itchon noted that BDO Network Bank’s account officers have kept regular contact with customers to remain as an accessible avenue for support. This was possible through the support provided by the BDO Group for its employees, such as rapid testing, tele-medical consultation, shuttles, and bonus pay for frontline staff.

“We are fortunate to have been able to keep all of our branches, office and ATMs open during this challenging time. In many of communities where we are located, we are the main provider of financial services. The men and women of BDO Network Bank have endured many personal sacrifices to mitigate the risks and keep the branches and office open to serve the communities. The Bank continues to make significant investments in keeping our workplace safe for our employees and our customers,” he said.

Mr. Itchon added that the bank has been working just as hard to adapt to the environment by promoting alternative banking channels that allow customers to open accounts, avail of loans, administer payroll and other disbursements, as well as manage their accounts. The bank is also ready to make loan repayments much more affordable to ease the burden of its clients and help them recover and restart their businesses.

Bouncing back

 Many businesses, Mr. Itchon pointed out, are still not allowed to operate, and are therefore forced to reassess their strategies to adapt for the uncertain future. Such efforts might need further investments into digitalization, identifying new opportunities, updated business models (as in the case of eateries transitioning to takeout and delivery), and managing their cashflow to remain liquid.

But given his experience in working with Filipino entrepreneurs, he remains confident that they will be able to bounce back.

“The communities we serve are very resilient. Many communities have undergone and survived various crises, such as earthquakes, investment scams, and violence. They have managed to adapt, survive and succeed,” Mr. Itchon said.

“Most successful businesses have found their best opportunities in the most challenging crises. Henry Sy’s own personal account described him making his best investments in the most trying periods of our country’s history. The most resilient, diligent and persistent entrepreneurs willcontinue to find new opportunities.”

Aiding in that path to recovery, BDO Network Bank remains open and ready to serve rural communities affected by COVID-19 by offering its clients continued access to financial services and loan consultations for businesses wishing to restart operations. The bank offers entrepreneurs a reworked installment scheme that can reduce their original installment by up to 65%.

“Successful communities work together well. We are all hoping for a quick recovery, but we are also prepared to see our communities through a longer and more challenging journey towards normalcy,” Mr. Itchon said.

IBM veers away from facial recognition, advocates for racial equity

The brazen arrest and murder of African-American George Floyd by a US police officer has sparked outrage and introspection across America and the globe these past few weeks. His last words—“I can’t breathe”—was heard the world over. Fellow Americans continue to take to the streets, flouting calls for social distancing in a clear signal of their priorities as a nation: Fix racial injustice, pandemic be damned. In response, many companies have since pledged their support for police reform and racial equity, including IBM, which has announced that it will no longer offer, develop, and research facial recognition technology.

Facial recognition software has improved much over the years thanks to artificial intelligence, offering distinct advantages in terms of safety, security, and convenience. Because there is little regulation among the private vendors providing it, however, there are concerns that the technology is vulnerable to inheriting (and further cementing) humans’ racial, ethnic, and gender biases. This, as well as infringe on people’s right to privacy. For these reasons, critics believe the tool may prove unreliable for law enforcement and ripe for wrongful surveillance, profiling, and abuse.

In a letter addressed to US Senators Cory Booker and Kamala Harris, and Representatives Karen Bass, Hakeem Jeffries, and Jerrold Nadler, IBM CEO Arvind Krishna outlined policy proposals to promote racial equality. He also announced that his company has sunset its general purpose facial recognition and analysis products.

Here are some salient parts from Krishna’s letter:

“In September 1953, IBM took a bold stand in favor of equal opportunity. Thomas J. Watson, Jr., then president of IBM, wrote to all employees:

“. . .Each of the citizens of this country has an equal right to live and work in America. It is the policy of this organization to hire people who have the personality, talent and background necessary to fill a given job, regardless of race, color or creed.”

Watson backed up this statement with action, refusing to enforce Jim Crow laws at IBM facilities. Yet nearly seven decades later, the horrible and tragic deaths of George Floyd, Ahmaud Arbery, Breonna Taylor and too many others remind us that the fight against racism is as urgent as ever.”

The letter continued with an offer from IBM to work with Congress in pursuit of justice and racial equity, particularly in policy areas such as police reform through new federal misconduct rules, as well as expanding opportunities through training and education for in-demand skills. It also advocated for technology policies that responsibly protect communities:

“IBM no longer offers general purpose IBM facial recognition or analysis software. IBM firmly opposes and will not condone uses of any technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms, or any purpose which is not consistent with our values and Principles of Trust and Transparency. We believe now is the time to begin a national dialogue on whether and how facial recognition technology should be employed by domestic law enforcement agencies.

Artificial Intelligence is a powerful tool that can help law enforcement keep citizens safe. But vendors and users of Al systems have a shared responsibility to ensure that Al is tested for bias, particularity when used in law enforcement, and that such bias testing is audited and reported.”

“The symbolic nature of this is important,” said Mutale Nkonde, a research fellow at Harvard and Stanford universities who directs the nonprofit AI For the People. Nkonde believes IBM shutting down a business “under the guise of advancing anti-racist business practices” shows that it can be done and makes it “socially unacceptable for companies who tweet Black Lives Matter to do so while contracting with the police.”

Huawei IdeaHub: The intelligent whiteboard for more engaging meetings

Whiteboards are one of the essential items in offices. They are usually useful in meetings as they gather all the information and ideas coming from multiple people in a single area.

What if whiteboards can do more than merely show writings and project ideas, and be transformed into something that makes meetings more engaging?

With Huawei’s latest innovation, the IdeaHub, the whiteboard has finally transformed into a medium for intelligent collaboration within offices and even a more helpful tool for various sectors like education, healthcare, and government.

The IdeaHub integrates intelligent handwriting, high-definition projection, flexiblevideo conferencing, and access to applications in one simple yet dynamic screen.

IdeaHub rethinks the typical whiteboard into a superbly interactive one, with features that enable clearer audio, smoother video, and efficient writing.

It is equipped with professional-grade 4K camera, which enhances the streaming and viewing experience of meeting-goers wherever they are. Also, with its 12 linear microphone arrays, IdeaHub can pick up sound from within an 8-meter radius on a 20-kilohertz full band, enabling attendees to be heard more clearly.

The IdeaHub has a capacity of ultra-low writing latency of just 35 milliseconds, making writing on a screen easy and timely. Moreover, with its intelligent handwriting recognition, one’s scribblings can be translated to text or graphics for better readability. With its built-in NFC chips, It is easy to project content from the phone to the IdeaHub in one tap.

Aside from serving as an intelligent whiteboard, the IdeaHub makes video conferencing more professional by fusing native 4K and AI technologies.

While it can deliver H.265 HD video, 1080p conferencing, and 30 fps smooth projection, the IdeaHub can also easily switch from one live view to another through SVC multistream.

AI technologies integrated into IdeaHub brings more focus on the meeting and its speakers. Its acoustic baffle feature, for instance, blocks unnecessary noise from outsidethe meeting area; while its intelligent speaker tracking can automatically focuses on the person speaking. The IdeaHub can also automatically frame the conference view based on the participants

The IdeaHub also has a prosperous cloud ecosystem that supports multiple apps, both those pre-enabled in the screen and those which can be downloaded from the Huawei appGallery.Through this ecosystem, it can also create an up-to-date enterprise profile for digital marketing and promoting corporate culture, as well as a HiBoard with a customizable background source—perfect for welcoming guests or celebrating a significant occasion.

All these interesting and timely features are all enclosed on a sleek, user-centric, and elegant design.

The IdeaHub currently has three variants, namely the IdeaHub S, IdeaHub Pro (both of which come in Jade White), and the IdeaHub Enterprise, which comes in Titanium Gray.

Huawei’s strategy for all-scenario smart offices

Aside from embodying intelligent collaboration, the IdeaHub is an integral part of what Huawei calls the “1 + 3 + X” strategy. It is Huawei’s strategy to enable smart offices where professionals can engage with collaborators anywhere, anytime, and in any way.

The “1” in Huawei’s formula refers to office digitization of enterprises, made possible by cloud and AI, in particular Huawei’s Cloud WeLink, its intelligent work platform for enterprises.

“3” refers to three types of smart collaboration devices, namely Huawei’s telepresence series for professional conferences; the newly-launched IdeaHub series for team collaboration; and the smart desktop series for personal offices, which will be launched soon.

“X”, meanwhile, refers to open cooperation and ecosystems for software and hardware, where Huawei works with ecosystem partners to serve customers in various industries.

Huawei’s timely innovations, including IdeaHub and future products, all aim to digitally transform offices into smart and more productive ones.

Enable your offices with intelligent and more efficient collaboration with the Huawei IdeaHub. Learn more about the product by visiting e.huawei.com/ph/products/cloud-communications/ideahub

Philippine capital to remain under relaxed lockdown

By Gilian M. Cortez, Reporter

Manila and nearby cities, where the coronavirus is largely concentrated, will remain under a relaxed lockdown until June 30, President Rodrigo R. Duterte said late last night.

In a televised address, the President also said the cities of Cebu and Talisay in central Philippines would revert to stricter quarantine measures starting June 16 after a spike in infections.

Cebu City was placed under an enhanced community quarantine, while Talisay will be under a modified enhanced quarantine.

Mr. Duterte made the decision based on recommendations from an inter-agency task force made up of Cabinet secretaries.

Aside from Metro Manila, also kept under a general quarantine were the northern provinces of Cagayan, Isabela, Nueva Vizcaya, Quirino, Santiago City, Aurora, Bataan, Bulacan, Tarlac and Olongapo City.

Joining them were the provinces of Cavite, Laguna, Batangas, Rizal, Quezon, Occidental Mindoro, Bohol, Cebu, Negros Oriental, Siquijor, and the cities of Mandaue, Lapu-Lapu, Davao and Zamboanga.

The rest of the country, where the coronavirus has sickened more than 26,000 and killed at least 1,098 people, remains under a modified general community quarantine, presidential spokesman Harry L. Roque said.

Car sales plunge during lockdown

Car sales slumped in April and May, as the lockdown continued in Metro Manila. — REUTERS

AUTOMOTIVE sales plunged to just over a hundred units in April, before recovering in May as lockdown restrictions began easing around the country.

Data from the joint report of Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) showed total vehicle sales plummeted 99.5% to 133 units in April from the 25,799 vehicles in the same month last year.

Vehicle sales slightly recovered in May, with 4,788 units sold. However, this is still 85% lower than 30,998 units sold in May 2019.

Car dealerships were shut from mid-March to mid-April due to the Luzon-wide lockdown. Some dealerships started reopening in mid-May after lockdown restrictions were relaxed.

For January to May, car sales slumped 51.1% to 69,463 units, compared to 142,185 units in the same period last year.

CAMPI President Rommel R. Gutierrez said in a statement the industry expects low demand to continue in the coming months because vehicles are considered big-ticket investments.

However, he said the industry projects a gradual recovery in the fourth quarter.

“While May figures are still way below the industry’s monthly average sales performance, we welcome any positive signs of recovery amid the pandemic and this season of new normal where dealerships have resumed operations at a reduced level and stringent safety protocols are being implemented at all times,” he said.

Commercial vehicle sales, accounting for 70% of auto sales, slid 84.5% to 3,399 units in May from 21,945 in the same month last year. However, this was still a significant improvement from the 107 units sold in April.

Broken down, Asian utility vehicle sales dropped 79.4% year on year to 659 units in May, while light commercial vehicle sales slipped 85.8% to 2,511 units.

On the other hand, passenger car sales in May declined 84.7% to 1,389 units. In April, only 26 passenger cars were sold.

Year to date, commercial vehicle sales slumped 49.4% to 50,262 units, while passenger vehicle sales fell 55.2% to 19,201 units.

Toyota Motor Philippines (TMP) remained the market leader with 50.77% market share, while sales tumbled 82.5% year on year to 2,431 units in May. In April, TMP sold 36 vehicles.

Mitsubishi Motors Philippines’ sales sank 88% to 608 units in May, giving it a 12.7% share. It sold 22 vehicles in April.

Ford Motor Co. Philippines clinched 10.57% market share, with sales declining 72.5% to 506 units. Isuzu Philippines sold 302 units in May, 75% lower year on year but enough to give it a 6.3% market share.

Fifteen companies reported no sales in April, while eight continued to report zero sales in May.

Car manufacturers including Toyota Motor Philippines have launched digital tools in an effort to reach customers as their dealerships reopen. TMP introduced digital tools for service maintenance booking and an online car showroom. Honda Cars Philippines also plans to launch an online dealership platform.

Toyota also launched its new Wigo model online on June 15. TMP President Atsuhiro Okamoto said in the online press conference that they plan to sell 8,000 Wigo units for 2020, or around 1,400 per month.

As sales dried up during the lockdown, some dealerships have been permanently shut.

The Yuchengco-led House of Investments in May announced that it was closing four Honda and one Isuzu dealership in Metro Manila to “ensure overall greater efficiency.” These outlets represent almost half of its 11 dealerships. — Jenina P. Ibañez

MerryMart shares soar in PSE debut

By Denise A. Valdez, Reporter

SHARES in grocery operator MerryMart Consumer Corp. rose by 50% on Monday on its first day of trading at the Philippine Stock Exchange (PSE), as investors were optimistic over the country’s first initial public offering (IPO) for the year.

The company led by businessman Edgar “Injap” J. Sia II, which offered 1.59 billion shares to the public at P1 each, closed its maiden trading session at P1.50 per share.

MerryMart shares were listed on the small, medium and emerging board of the PSE.

MerryMart’s P1.6-billion IPO was two times oversubscribed and its market capitalization stood at P7.59 billion. PNB Capital and Investment Corp. was its lead underwriter, issue manager and bookrunner for the offering.

“MerryMart surprisingly hit its ceiling price of P1.50 on its debut, with almost none posting to sell shares. We think that traders were on its excitement phase since this is the first company to list this year,” Philstocks Research Associate Claire T. Alviar said in a text message.

Most companies have delayed their IPO plans this year as the market volatility remains high. The PSE index started the year at 7,742.53 on Jan. 2, hit a low of 4,623.42 on March 19, and has since started recovery. It closed at 6,163.82 yesterday.

During MerryMart’s listing ceremony streamed live on Monday morning, Mr. Sia said he believes doing an IPO in the middle of the coronavirus disease 2019 (COVID-19) pandemic shows the economy “is alive and ready to begin bouncing back.”

“(M)any of the most successful businesses around the world was either started during a crisis, or has deepened its market grip during the crisis period. Because actually, during a highly challenging period like where we are now, the large established players’ huge size and heaviness, suddenly becomes a disadvantage, and natural to a major crisis comes the repositioning of elements, such as, a major change of customer behavior, which suddenly, the pile of money alone, can not solve,” Mr. Sia said.

“This is the reason why we continued to conduct an IPO during this global pandemic. Because this is such a rare window for the company to compete well. A rare chance for a new player to quickly grow in a shorter span of time than during good times,” he added.

MerryMart has plans to put up 1,200 branches across the country by 2030, where the first hundred branches would be open as early as the fourth quarter of 2021. It believes it will be resilient despite the crisis as its business is in the non-discretionary basic essential retail category.

PSE President and CEO Ramon S. Monzon said he hopes MerryMart’s IPO encourages more entrepreneurs to do the same. He noted 7.78% of MerryMart’s IPO shares were availed by 3,473 local small investors, which is the biggest number of local small investors that subscribed to an IPO to date.

Finance Secretary Carlos G. Dominguez III, who attended the listing ceremony at the PSE Tower, said MerryMart’s IPO is a good sign for the Philippines’ economic recovery.

“This initial public offering signals trust in our good economic prospects. It shares in the optimism that, notwithstanding the global downturn engulfing us today, the Philippine economy has the fundamentals to rise quickly from the devastation wrought by the pandemic,” Mr. Dominguez said.

Aniceto K. Pangan, equity trader at Diversified Securities, Inc., said the performance of MerryMart on its debut also shows investor confidence in Mr. Sia and his team.

MerryMart is under Injap Investments, Inc., which is the founder of Mang Inasal Philippines, Inc. and a key shareholder of DoubleDragon Properties Corp.

“With their proven track record in franchising thru (Mang) Inasal and property leasing at DoubleDragon, investors see that they could carry on this business with success as they have synergies with their other businesses,” Mr. Pangan said in a text message.

But Philstocks’ Ms. Alviar warned MerryMart is at risk of profit taking after Monday’s surge in share price.

“[R]isk of profit taking has increased so traders must cautiously trade this stock. But as long as demand remains, there’s still a potential upside. And we still think that fundamental value would take over in the long run,” she said.

‘Indulgent’ purchases seen to recover as quarantine eases

CONSUMERS may soon start buying “indulgent” products as lockdown restrictions ease around the country, Nielsen Philippines Managing Director John Patrick Cua said.

Nielsen, which interviewed partner-retailers on their experiences during the lockdown, noted their challenges in procuring ample stocks and in shipping goods to rural areas.

Mr. Cua in a webinar on Thursday said more consumers are shifting to shopping online and in nearby neighborhood stores, as movement of people was restricted and public transportation was unavailable during the lockdown.

“People will, if they can, they will shop less often and they will prioritize things for their safety. So rubbing alcohol, household cleaners, air fresheners. That’s what’s in their basket at the start of the (lockdown),” he said, noting that consumers focused on buying shelf-stable food and non-essential personal care products.

As the lockdown eases, consumers are expected to indulge in some retail therapy.

“We are coming out of lockdown and what we’re seeing in the other markets is slowly the indulgent products will recover and the other personal care will eventually recover because the consumer will look to reward themselves,” Mr. Cua said.

He said that retailers need to understand how shopping habits have changed due to the lockdown.

“Before, we always think it’s the head of the household, the mother that goes to shop. But during the time, kung sino ang may quarantine pass. It could be the father or the male shopper. We usually have the female shopper,” he said.

Mr. Cua said that supermarket shopping frequency has also changed, shifting from weekly shopping to payday or bi-monthly shopping.

He said retailers must improve supply chain inventory and digital presence, including on social media and Google Maps.

“Communicate that their store is safe for people to go,” he said.

Shopping mall operators have ramped up their health and safety protocols to reassure consumers who are still wary of going outside out of fear of getting the coronavirus disease 2019 (COVID-19).

Philippine Amalgamated Supermarkets Association President Steven T. Cua in May noted the strong demand for baking and cooking goods, as well as rubbing alcohol, disinfectants, and hair trimmers, during the lockdown.

He said inventories had been improving after initial logistics challenges as the transport of goods was hampered at checkpoints at the start of the lockdown. — J.P.Ibañez

Record debt bill pushes firms back to bond market

THE biggest companies in the Philippines need to repay the most debt ever next year, and they’re lining up for fresh funds while interest rates are still low.

Three corporate groups — Ayala Corp., JG Summit Holdings, Inc. and San Miguel Corp. — are looking to raise a total of $2.5 billion with bonds, based on regulatory filings. They are among the first firms to return to the debt market after a lockdown caused issuance to plunge to a four-year low of $540 million in the second quarter, Bloomberg-compiled data show.

Philippine firms are set to join the global rush to borrow funds as they prepare for a massive debt bill: about $8.3 billion in corporate bonds and loans will mature in the second half of the year, before that pile climbs to a record $16.4 billion in 2021, according to data compiled by Bloomberg.

They are keen to borrow while rates are still low, amid signs the central bank is moving to absorb excess funds as the economy gradually reopens this month.

“We expect to have a very busy next couple of months, and hopefully the second half of the year will retain the momentum,” said Ryan Martin Tapia, president of China Bank Capital Corp., one of the country’s most active bond arrangers. Still, lingering pandemic uncertainty is making tenors shorter and credit spreads wider, he said.

In the latest possible Philippine debt deal, PLDT, Inc. hired Credit Suisse Group AG and UBS Group AG for a series of investor calls starting June 15. They may be followed by an offering of 10- and 30-year dollar bonds, the telecommunications company told the stock exchange on Monday.

Port operator International Container Terminal Services, Inc. priced $400 million of 10-year bonds on June 10, one of only two Philippine debt issuers in the second quarter along with a peso deal by Rizal Commercial Banking Corp., Bloomberg-compiled data show. Developer Robinsons Land Corp. also has notes in the pipeline.

Falling interest rates may spur increased demand for Philippine corporate securities.

Peso-denominated five-year government bond yields dropped to a seven-year low this month after policy makers pumped cash into the market. The virus outbreak caused the nation’s economy to shrink for the first time since 1998 and its unemployment rate to rise to a record.

“With interest rates moving down, some investors will be thinking of locking in their yields,” said Robert Ramos, chief investment officer at East West Banking Corp. “Of course, this will be dependent on investors being satisfied with the credit spreads over the government benchmark.”

The easy money won’t be around forever.

In a move to mop up extra funds in the market, the Philippine central bank said on June 8 it would gradually resume offering term deposits to financial firms and increase the volumes in its reverse repurchase facility. An estimated P1.1 trillion ($22 billion) were released into the financial system, equivalent to about 25% of the first quarter’s gross domestic product, through a series of steps including cuts in the benchmark interest rate and the reserve requirement ratio. — Bloomberg

SM Prime allots P100M for e-commerce

By Denise A. Valdez, Reporter

SM Prime Holdings, Inc. is investing P100 million to enhance its online platforms as it faces changing consumer behavior brought about by the coronavirus disease 2019 (COVID-19) pandemic.

“We acknowledge the growing popularity of e-commerce, especially during this pandemic, and SM Prime is allocating up to P100 million to accelerate our online presence with our e-commerce platform,” SM Prime President Jeffrey C. Lim said in the company’s annual stockholders’ meeting held virtually Monday.

The company will start by boosting its “Click & Collect” digital platform, which allows mall tenants to meet with customers virtually.

“We see e-commerce as a strategy to complement our malls business and connect our retail tenants to our customers,” Mr. Lim said.

SM Prime earlier said it was maintaining an P80-billion budget for capital expenditures (capex) this year despite a weaker performance in the first quarter. Its earnings slid 5% to P8.3 billion due to mall closures both in the Philippines and China.

In a phone call over the weekend, SM Prime Chief Financial Officer John Nai Peng C. Ong told BusinessWorld the company expects a bigger decline in its bottomline for the April-to-June period.

“We are still moving towards quarter end, but yes,” Mr. Ong said when asked about expecting the company’s profits to fall deeper.

“The quarantine started March 16 and significantly affected the second quarter. All of our malls were closed during that period… So you can have a sense kung ano ‘yung magiging financials natin (how our financials will look like),” he said.

Revenues from malls, which make up 86% of SM Prime’s total revenues, dropped 18% to P12.24 billion in the first quarter. Consolidated revenues stood at P12.78 billion, 14% lower from a year ago.

Despite this financial backdrop, SM Prime Chairman Henry T. Sy, Jr. said he expects SM Prime to maintain consumer demand in the coming weeks, especially with the easing of quarantine restrictions.

“SM, in the past, has faced a lot of challenges… During these times, we always see a trend in customer response. People continue to go to SM due to our flight to quality. We see the same trend today, even during the quarantine period,” he said in Monday’s meeting.

“Today, we are more prepared, responsive and resilient because we have people who continuously strategize for business growth. So as we face the new normal, we will provide facilities such as stronger Wi-Fi and safer malling areas. These will be suitable for the safety of our shareholders, and this will improve our business for the years to come,” Mr. Sy added.

The P80-billion capex this year will focus on projects that are ongoing and near completion, while projects in the pipeline will be subject to review, Mr. Ong said. SM Prime is also looking at an opportunistic land-banking for possible expansion.

While other companies have started a so-called workforce rightsizing to adapt to financial challenges, Mr. Ong said SM Prime’s direction is to support its employees and contractual partners.

“I think you can see yung ginagawa ng management (what the management is doing) is really to take care of, internally, employees, and externally, our partners. That has been the drive up to this point,” he said about the topic.

SM Prime and its subsidiaries have 11,695 regular employees as of end-2019. The whole SM Group, which includes SM Markets, BDO and the SM Store, reported some 157,288 employees in its 2019 sustainability report.

Shares in SM Prime at the stock exchange fell P2.60 or 7.82% to P30.65 each on Monday.

PLDT’s proposed US-dollar bonds gets S&P’s BBB+ rating

PLDT Inc. (PLDT) is proposing to issue US dollar-denominated senior unsecured notes, which S&P Global Ratings gave a BBB+ long-term issue rating.

On Monday, the telecommunications company told the stock exchange that it was offering investors 10- and 30-year dual tranches of the senior bonds subject to market conditions.

“We expect the company to use the proceeds to refinance debt maturing in 2020 and 2021, prepay outstanding loans, and partially finance capital expenditure,” the credit rating firm said.

As of end-March, PLDT has P205.3 billion worth of unsecured debts.

About 40% of these are held at the subsidiaries’ level. “This is below the 50% priority debt ratio threshold, over which we consider senior unsecured lenders at the parent level may be disadvantaged in the event of financial stress,” S&P noted.

With the credit rating, S&P sees a “limited” rating headroom for PLDT.

Capital expenditure is seen to remain elevated over the next few years as the company improves its network coverage, capacity to support higher mobile data traffic, and last-mile connectivity for home broadband services.

Moreover, S&P noted an increased competition in the Philippine telecommunications scene with the upcoming entry of a third-player, Dito Telecommunity Corp., in the first half of 2021.

The listed company tapped Credit Suisse and UBS as joint lead managers and joint bookrunners to arrange the investors’ call on June 15.

Meanwhile, PLDT’s enterprise group launched its latest package of connectivity and digital solutions for businesses resuming operations in the so-called “new normal.”

Beyond Fiber is a set of curated digital tools ranging from productivity and collaboration tools to e-payments and e-commerce solutions, coupled with premium fiber Wi-Fi service.

“Digitalization has now become critical for businesses that want to survive and thrive under the challenging conditions created by the COVID (coronavirus disease 2019) pandemic,” Jovy I. Hernandez, ePLDT president and chief executive officer, said in a press statement.

He said Beyond Fiber was designed “to equip businesses with digital solutions tailor-fit to the growing needs of today’s enterprises.”

The business package offers a fiber link with speeds of up to 50 megabits per second. Customers can avail of two Wi-Fi routers for both business and private use.

It also offers productivity tools by Microsoft 365, collaboration tools via MS Teams, and appointments scheduling through MS Bookings.

Moreover, Beyond Fiber protects work devices from cyberattacks through ePLDT’s Endpoint Advanced Security and provides secure and private connections via Cisco Meraki Z3. It also enables online payments through PayMaya.

The new service package is priced at P2,500 a month.

“We will have more in the months to come,” Mr. Hernandez said about the solutions initially lined up under Beyond Fiber. — Adam J. Ang

Acciona turns over treatment plant to Maynilad

SPANISH FIRM Acciona, S.A. (Acciona) has turned over a water treatment plant worth $127 million to its client, west zone concessionaire Maynilad Water Services, Inc.

In a statement on Monday, Acciona said it turned over the P6.38-billion Putatan II drinking water treatment plant located in Muntinlupa to Maynilad, after being involved in the design, construction, operation, and maintenance for the first 12 months.

The new plant treats 150,000 cubic meters of raw water per day from Laguna de Bay through advanced reverse osmosis technology, and aims to provide clean and potable water to nearly 1.5 million people in the country.

Acciona Country Manager Ruben Camba said that one of the company’s goals is to supply clean drinking water to as many households as possible.

Meanwhile, Acciona said it had clinched another contract with Maynilad on the construction of a water plant with similar requirements in the Laguna Lake area

The firm said it had previously won a contract to build a 650-meter Cebu-Cordova cable-stayed bridge that will provide a faster connection between Cebu’s industrial zone and Mactan International Airport and to Cordova’s new urban developments on Mactan Island. — Revin Mikhael D. Ochave

PHL seen to benefit from falling solar power cost

By Adam J. Ang

THE falling cost of solar energy development leading to cheaper electricity may help the Philippines, where the cost of electricity remains to be among the highest in Southeast Asia, to move further away from fossil fuel use, according to renewable energy developers.

With the growing demand for power and the present climate crisis pushing the country to shun coal and gas, there is no doubt that the Philippines need to seek clean and cheap energy sources for energy security, according to leading solar manufacturer Trina Solar Ltd.

“There needs to be more solar farm developments in the Philippines to meet the country’s growing electricity needs and to reduce the country’s dependence on fossil fuels,” Trina Solar Asia Pacific Senior Sales Director Jun Heong Ku told BusinessWorld.

He cited the technical advancements and growing operational efficiencies of industries, which brought down prices of solar equipment, like modules, mounting systems, and inverters.

The renewable energy projects in the country still lag behind the development of coal and gas-fired power facilities, which are expanding at a “faster” pace, United States-based engineering firm Black & Veatch noted.

“The Philippines has enormous potential for renewable energy but the development of coal and gas-fired power stations in the Philippines is growing at a faster pace than the development of renewable energy, such as solar,” Mitesh Patel, director of Black & Veatch Asia’s renewables business, said.

He added that the lowered cost of putting up solar energy infrastructures allows it to be “financially attractive,” even without support from feed-in-tariffs (FiT), a component of power charges that boosts the development of renewable energy.

About 23 solar projects with a total capacity of 526 megawatts (MW) were endorsed by the Department of Energy (DoE) to the Energy Regulatory Commission for FiT eligibility. Among these is the 133-MW Cadiz Solar Power Plant, which is powered by Trina Solar’s modules.

The share of renewables sources in the country’s power generation mix dropped by 20% since it last peaked at 36% in 2006, Trina Solar noted.

Solar farms, Mr. Ku said, are “much quicker” to build than fossil fuel-fired plants. It also creates high-skilled jobs and may help the country power more off-grid communities through solar-powered microgrid systems.

Black & Veatch estimated an additional 3,700 MW in solar installation to power the country by 2024.

The solar business in the country, it said, will stay afloat with recent progress on the implementation of the renewable energy market rules, the DoE’s Green Energy Option Program, and the Bangko Sentral ng Pilipinas’ rules on sustainable finance.

The adoption of net metering, or the billing mechanism which credits solar panel users for contributing excess energy into a grid, as well as the use of energy storage systems or batteries, are yet to be promoted in the country to further secure its energy needs, Mr. Ku said.

Also, solar energy adoption may be bolstered with the recent creation of bifacial modules, which generate electricity from the front-side and the back-side of the module. These are coupled with trackers that help in maximizing the amount of light the modules absorb by moving the module to follow the movement of the sun.

“It is important for the Philippines to develop renewable energy sources, so it can be more energy independent and be less dependent on overseas [sources] for the supply of fossil fuels. This will in turn help to ensure energy security,” the senior official said.

Philippine energy companies are making efforts to cut back on fossil fuel and to roll out more renewables projects.

For example, Ayala-led AC Energy, Inc. has promised to divest from coal by 2030. In the next five years, the energy company aims to add 5,000 MW in its portfolio, with half of the generated power to be coming from renewable sources.

“To meet their sustainability targets, energy companies are tapping on industry leaders with global best practices and regional execution to rebalance their energy portfolio,” Mr. Patel noted.

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