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Zara’s latest fashions will be a post-COVID-19 hit

By Andrea Felsted, Bloomberg Opinion

Don’t be fooled by red replacing black as this season’s color at Zara-owner Inditex SA.

The Spanish fast-fashion behemoth reported its first loss since it went public in 2001 after shutting stores during COVID-19 lockdowns worldwide. But nimble retailers will still prosper as economies open back up again, and Inditex is among them. In fact, with a big investment plan to bolster online sales, the company could well emerge even stronger than before the pandemic.

The world’s largest fashion retailer is also aggressively overhauling its store network to focus on more muscular flagships. It has already been closing smaller outlets, while opening fewer, larger stores for the past few years. This will accelerate over the next two years, with between 1,000 and 1,200 stores closed, many belonging to Inditex brands other than Zara, such as Pull&Bear, Oysho, and Stradivarius. The aim is to transfer their profit contributions to bigger shops or online.

There are important costs related to that transformation. The first-quarter net loss of 409 million euros ($465 million) included a 308 million-euro charge for closing stores. And Inditex hasn’t been completely insulated by the retail dislocation. Net sales fell 44% in the three months from Feb. 1 to April 30 due to the coronavirus impact.

But Inditex’s business model came into its own during the pandemic. Most garments are ordered within the fashion season, and the company, which gets about two-thirds of its revenue from Europe, has kept its supply chain tight. About 60% of products come from manufacturers in Spain, Morocco, Portugal, and Turkey.

In early March, the company scaled back purchases when it saw how the pandemic was developing. In early May, it sped them up again to make sure it had enough playsuits and flimsy blouses on hand for June and July. The strategy worked. Inditex actually ended the first quarter with 10% less stock, an impressive feat when other retailers have been saddled with a mountain of unsold spring and summer garments.

At the same time, its online business thrived thanks to efforts including the introduction of radio-frequency-identification technology that tracks where every maxi dress and balloon-sleeve blouse is. This enables online orders to be fulfilled from wherever the stock is, be that in warehouses or stores. As my Bloomberg News colleagues have noted, when shops were closed, Inditex was able to redeploy stock to its digital business. Online sales rose 95% year-on-year in April.

To capitalize on this trend, Inditex will spend 1 billion euros between now and 2022 to bolster its internet sales, and a further 1.7 billion euros upgrading its stores and further integrating them with its digital platform. Shops will become distribution hubs as well as places that customers can browse and buy products in real life. The aim is for more than 25% of sales to come from digital channels by 2022, up from 14% in 2019.

Despite its strengths, Inditex has not been immune from the pre-COVID-19 pressure on the apparel retail sector, with women generally buying fewer clothes and cheaper rivals, such as Boohoo Group Plc and Associated British Foods Plc’s Primark chain, nipping at its heels. That means the strategic blueprint for the next few years is not without risk.

Zara is not the cheapest clothes retailer, and in tougher economic times the chain could prove too pricey for some cash-strapped consumers. What’s more, it could be a tricky time for Inditex to put its faith in big flagships if people emerging from lockdown shun larger stores, malls, or city centers. And rivals are not giving up. Even fusty British retailer Marks & Spencer Group Plc said it aimed to speed up its supply chain, including using factories closer to its UK market.

But thanks to its strong balance sheet, Inditex should be able to stay ahead. The company had net cash of 5.8 billion euros at the end of the first quarter. While COVID-19 has upended retail, some things should stay the same, including Inditex’s superstar status.

Safer after-sales transactions with MG Online Garage Service


BRITISH-BRED auto brand Morris Garages (MG) is exerting the utmost effort to guarantee the safety of both customers and staff as it reopens its dealerships. One of its relevant programs is the MG Online Garage Service. Through this, “clients can now consult with accredited MG after-sales service professionals who can conduct remote vehicle diagnosis over video chat. This service allows MG Philippines’ after-sales professionals to make quick, informed opinions on vehicles, without requiring the client to physically go to a dealership.”

It also lets MG service professionals assess whether or not a client is eligible for the MG Mobile Garage home service, which allows a certified MG technician visit a client to do work on a vehicle right in the customer’s garage. MG said in a release that its technicians “are also trained to practice social distancing and practice safety and hygiene precautions even when making house calls and other such trips outside of dealerships.”

To schedule a video consultation and vehicle diagnosis with the MG Online Garage Service, customers may send a message to reachus@mgmotor.com.ph, call the 24/7 MG hotline at (02) 5328-4664, or send a message through the My MG App.

All MG dealerships nationwide encourage clients to book ahead before visiting by calling or using the My MG mobile app to schedule appointments. “This will ensure that the needs of each client are fulfilled while adhering to the global recommendation to practice safe social distancing and limiting the amount of people in dealerships at any given time,” said MG.

Customs bureau, PayMaya roll out payment system

THE Bureau of Customs (BoC) has teamed up with e-wallet service company PayMaya Philippines, Inc. for an online payment system to collect, transmit and remit Customs fees, charges, duties and taxes.

BoC and PayMaya, along with the Bureau of the Treasury (BTr) and the Development Bank of the Philippines (DBP), inked a memorandum of agreement on Friday allowing the use PayMaya’s digital services for both local and cross-border payments.

In a press release on Sunday, the partners said the services include online checkout using credit or debit cards and payment of bills via PayMaya’s application, One POS terminal, QR (quick response) code and Smart Padala Centers bills payment.

BoC said the partnership also covers the payment of client service fees and the deposit of the collected fees and other payments to the DBP.

All collections and payments made in and deposited by PayMaya will be remitted to a BTr-BoC-PayMaya clearing account.

BoC is then required to submit to the BTr office a list of deposited collections (LDC) on the daily remittance of Customs fees to the clearing account.

“The LDC report shall be prepared by the collection district who issued order of payment and validated by the Bureau of Customs-Revenue Accounting Division, (BOC-RAD) based on the detailed reports generated/submitted by PayMaya using its payment collection service,” it said.

The BoC said it would continue to adopt measures necessary to facilitate and minimize disruption to the supply chain during the crisis.

In October last year, the Bureau of Internal Revenue (BIR) partnered with PayMaya to allow its users to settle tax payments via the application. — Beatrice M. Laforga

Audi holds factory warehouse sale anew


FIRST HELD early last year, the successful Audi Factory Warehouse Sale sales promotion event runs anew until July 31, 2020.

Audi Philippines promises more than P1 million in discounts on select models, as well as huge savings on the rest of the lineup. The company said in a release that this is made possible through the support of Audi AG. Offered in the promo are the Audi A4 1.4 TFSI, A6 2.0 TFSI and A8 3.0 TFSI MHEV sedans; the RS4 Avant TFSI; and the Q2 1.0 TFSI, Q3 1.4 TFSI, Q5 2.0 TDI, Q5 2.0 TFSI and Q8 3.0 TFSI MHEV SUVs. All are 2020 models.

Included with all vehicle purchases made through the Audi Factory Warehouse Sale 2.0 promo is the Audi Clean disinfection package, which assures that all vehicles are thoroughly sanitized with advanced cleaning materials before release customers. The move adheres to Audi Philippines’ implementation of stringent sanitation and safety protocols, which prioritize the health of the company’s clients, guests, and work force.

Among the measures which Audi Philippines has put in place to ensure this are the strict observance of all hygiene and social distancing practices; wearing of PPE suits by sales executives when dealing with clients; appointment-basis showroom and service center visits; disinfection of all vehicles that enter and leave the company’s facilities; and regular and thorough cleaning of the premises. For more information, call 0917-813-9064, 0917-806-2946, or 0917-935-4111.

Peso to drop on second wave fears

THE PESO is likely to weaken this week amid risk-off sentiment due to worries over second wave infections that could affect the economy.

The local unit closed trading at P50.195 against the dollar on Thursday, retreating by 34.5 centavos from its P49.85 finish on Wednesday, according to data from the Bankers Association of the Philippines.

It also depreciated by 39.5 centavos from its P49.80-per-dollar close on June 5.

The peso succumbed to the dollar after the grimmer economic outlook of the US Federal Reserve, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said.

“The peso exchange rate closed weaker after latest signals from the US central bank that the US economic recovery may take realistically much longer,” Mr. Ricafort said in a text message.

Fed Chairman Jerome H. Powell on Wednesday said the economic damage caused by restrictions due to the coronavirus may impede the United States’ recovery for years, Reuters reported.

Mr. Powell said they will use their tools to support the market and economy towards recovery and added they are “not even thinking about raising rates at this point”.

Aside from Fed’s latest signal, there are also heightened fears of a possible second wave of infections, a trader said.

“They’re starting to have fear for second wave of infections. So this creates risk-off sentiment,” the trader said in a phone call.

RCBC’s Mr. Ricafort said investor sentiment this week will be guided by the government’s decision on the quarantine measures to be imposed after June 15 and the spread of the virus.

“Major catalysts would include any further relaxation of lockdowns locally and the trend in local new cases,” he said.

President Rodrigo R. Duterte is expected to announce his decision related to the community quarantine today, the same day the measures imposed on May 15 are set to end.

Areas in the country are currently either under modified general community quarantine or general community quarantine.

Mr. Ricafort added that the remittance data released late Friday will likely affect market sentiment.

Cash remittances from overseas Filipino workers fell by 4.7% to $2.397 billion in March from the $2.514 billion a year ago, central bank data showed.

The 4.7% decrease is the first contraction since the -2.9% in June last year and the worst decline since the -9.8% in March 2018, which was amid high inflation and a weak P52-per-dollar level exchange rate.

The Bangko Sentral ng Pilipinas said in its latest estimates released Thursday that cash remittances will likely decline by 5% this year versus the 2% growth it forecasted in May and the baseline 3% estimate in November.

Aside from the announcement on the lockdown, the trader said investors will also track developments in the US market.

“There is already a risk-off in the US [market] because of worries about the second wave. Will this risk-off sentiment continue?” the trader said.

For this week, Mr. Ricafort said the peso could move within the P49.95 to P50.35 levels versus the dollar while the trader gave a forecast range of P50.00 to P50.50. — L.W.T. Noble with Reuters

Coronavirus casts shadow on bank stocks

By Mark T. Amoguis, Assistant Research Head

ANALYSTS were mixed on the prospects for owning bank stocks as the coronavirus disease 2019 (COVID-19) pandemic puts a damper on earnings.

On a quarter-on-quarter basis, the bellwether Philippine Stock Exchange index (PSEi) declined 31.9% in the first quarter this year from a 0.5% growth in the previous quarter and a 6.1% growth in the first quarter of 2019.

The financial subindex — which included the banks — tanked 34.3% in the first quarter, a stark contrast from a 3.3% growth the previous quarter and a one-percent decline in the first quarter last year.

This double-digit decline was mirrored across all the listed banks’ stock price performance during the period, which was largely brought about by the pandemic that sent the Philippine economy to a standstill. On a quarter-on-quarter basis, share prices were lower by range of 45.1% for Security Bank Corp. (ticker symbol: SECB) to eight percent for the UnionBank of the Philippines, Inc. (UBP).

“A big factor in the first quarter for the banks, as well as the broad market, was the uncertainty… brought about by the COVID-19 pandemic and how long it would last,” said China Bank Securities Corp. Research Director Rastine Mackie D. Mercado.

“Moreover, the implementation of the enhanced community quarantine (ECQ) may have weighed on the listed banks’ performance for [the first quarter] as business disruptions may impact the quality of loan portfolios (i.e., potential increase in nonperforming assets) — putting downward pressure on profitability as credit costs mount (higher provisions),” he added.

Mandarin Securities Corp. Research Analyst Zoren Philip A. Musngi said store closures and reduced business activity during the quarter led to expectations of a rise in loan payment delinquencies and possible bankruptcies.

“As seen in first-quarter earnings, banks have mostly doubled their loan loss provisions,” Mr. Musngi said.

“The sell-off in financial markets also led to losses to many trading desks and portfolios, which affected some banks’ non-interest income side,” he added.

To contain the spread of COVID-19, the government ordered a lockdown for the entire Luzon island in mid-March, effectively closing the majority of businesses and suspending public transportation.

“Despite the pandemic, some mid-size banks were able to have double digit growth in net income, driven by lower funding costs and robust trading gains. This was made possible by the recent cut in policy rates and reserve requirement by the BSP (Bangko Sentral ng Pilipinas),” Philippine National Bank (PNB) Research Department Senior Equity Research Analyst Wendy B. Estacio and Equity Research Analyst Marco R. Mauleon said.

During the first quarter, the BSP slashed key policy rates by a total of 75 basis points (bps) — 25 bps on Feb. 6 and 50 bps on March 19. It fired off another 50-bp cut to interest rates last April 16, bringing borrowing costs to record lows since the BSP shifted to an interest rate corridor in 2016 as well as completely scaling back the 150-bp hike implemented by the BSP in 2018 to arrest rising inflation.

As of this writing, the overnight reverse repurchase rate stands at 2.75%, while overnight deposit and lending rates are at 2.25% and 3.25%, respectively.

The BSP’s Monetary Board likewise slashed the reserve requirement ratio (RRR) of universal and commercial banks by 200 bps in a bid to boost liquidity. The Monetary Board has authorized BSP Governor Benjamin E. Diokno to reduce the RRR of up to 400 bps for this year.

The RRR for big banks now stands at 12%, while those for thrift and rural banks were maintained at four percent and three percent, respectively. Liquidity boost for smaller banks came through the 400-bp reduction in the minimum liquidity ratio for stand-alone thrift and rural banks to 16% until the end of the year.

Meanwhile, the country’s universal and commercial banks booked a P50.44-billion net income in the first quarter, 1.82% higher than the P49.54 billion posted in the first quarter of 2019, BSP data showed.

Net interest margin (NIM) — a ratio that measures banks’ efficiency in investing their funds by dividing annualized net interest income to average earning assets — continued to improve to 3.58% in the first quarter of the year from 3.44% in the final three months of 2019 and 3.29% in the first quarter last year.

Meanwhile, the provision for credit losses on loans and other financial assets ballooned 180.3% year-on-year to P23.35 billion in the first three months of the year.

‘MIXED BAG’
Despite positive earnings performance in the first quarter, prospects for banks remain uncertain according to analysts.

“It’s a mixed bag for banks. For the first two-and-a-half months, banks are doing okay. However, the world drastically changed in the last few days of the quarter due to the “Great Global Lockdown,” I.B. Gimenez Securities, Inc. Research Head Joylin F. Telagen said.

“[O]n conservative note, banks also recognized higher provisions that tempered/affected the bottom line in general,” she added.

Some analysts point to UBP’s and Security Bank Corp.’s (SECB) financial performance during the quarter as both posted double-digit growth in net incomes despite recording higher loan loss provisions.

UBP’s stock performance had outperformed its banking peers and the index so far this year, said Mandarin Securities’ Mr. Musngi.

“We think this can be attributed to the bank’s robust internet/mobile banking app and infrastructure that they have steadily grown over the past years,” he added.

For PNB’s Ms. Estacio and Mr. Mauleon, “Arguably, the ECQ has become an advantage for [UBP] in a competitive standpoint as customers were compelled to embrace digital platforms to address their financial needs. As a result, UBP, being one of the most digitally focused banks in the country, was able to convert its existing customers towards digital platforms and even generate new customers.”

The Aboitiz-led bank’s net income jumped 22% to P2.64 billion during the first quarter from P2.16 billion last year. The potential impact of COVID-19 has also been factored in as UnionBank boosted its provisions for loan losses to P1.3 billion, 7.6 times higher than the P174.6 million it allotted in January to March 2019.

Meanwhile, SECB posted a net profit of P2.89 billion during the quarter, 21% higher than P2.38 billion last year. Its provisioning soared 19-fold to P5.69 billion compared to P295.28 million in 2019’s comparable three months.

“This was attributed to the bank’s strong top-line as NIM expanded by 129 bps year-on-year to 4.68% coupled with higher trading gains,” said PNB’s Ms. Estacio and Mr. Mauleon.

Justin Lawrence J. Tembrevilla, research head at Unicapital Securities, Inc., said all of the banks under its coverage — which includes BDO Unibank, Inc. (BDO), Metropolitan Bank & Trust Co. (MBT), Bank of the Philippine Islands (BPI), SECB, and East West Banking Corp. (EW) — achieved revenue growth amid sustained momentum in core lending and deposit-taking activities.

“[T]heir bottom-line growth tells a different story,” Mr. Tembrevilla said.

“What separated the ‘Big Three’ from their mid-tier counterparts is that BDO, BPI, and MBT needed to book higher provisions to be able to service their heftier portfolio, in stark contrast to the leaner portfolio of mid-sized banks,” he added.

OUTLOOK
For Piper Chaucer E. Tan, client engagement officer and research associate at Philstocks Financial, Inc., the increase in provisions for loan losses puts a dampener for listed banks’ earnings this year.

“This will pull the net income of the banks, thus shrinking its EPS (earnings per share), which is a major consideration of market investors for the profitability portion and valuation of the stock,” he said.

For PNB’s Ms. Estacio and Mr. Mauleon: “We expect higher provisions to drag banks’ earnings this year, particularly those with higher exposure to retail and SMEs segments. However, these may be offset by expansion in banks’ margins due to lower funding costs,” they said.

For China Bank Securities’ Mr. Mercado, “it’s too early to ascertain the extent of loan loss provisioning moving forward.”

“[B]anks that continue to beef up their loan loss provisions are likely to see more tempered bottom line growth rates this year as this is treated as an expense line item for banks. Thus, the larger the provisions are, the bigger its impact down the line,” he explained.

Mr. Mercado added that while the dovish moves from the BSP have provided a positive impact on the banks’ profits, the outlook for the year “will mostly be determined by banks’ guidance on nonperforming loans and credit costs.”

Unicapital’s Mr. Tembrevilla said the latest monetary decisions from the central bank should help banks tread the challenges in the next quarters.

“Trading gains could arise as we are still in a low interest rate regime, giving banks some opportunities to unwind their investment securities portfolio,” he said.

Mandarin Securities’ Mr. Musngi said the impact of the pandemic and the resulting lockdowns on loan demand remains uncertain even with monetary easing, especially as businesses scale down their expansion plans and consumers take a conservative view on spending.

“Banks that have robust Internet and mobile banking capabilities will likely see better results compared to those that are sticking to traditional banking,” Mr. Musngi said.

“We advise clients to stay away from banks for now as it is still uncertain how much the coronavirus pandemic will negatively impact the economy going forward,” he added.

For I.B. Gimenez Securities’ Ms. Telagen: “I’m more generally neutral to bearish/negative to the sector and will change to buy once I see earnings are picking up and the global economy started to recover. Currently, due to uncertainties, I focus on top banks.”

Coronavirus slams West Africa’s cashew market, some crops left to rot

ABIDJAN/DAKAR — Olivier Gore-Bi took out loans to ready his 12-acre cashew farm in Ivory Coast for harvest. He is now leaving some of his crop to rot after the COVID-19 (coronavirus disease 2019) pandemic accelerated a fall in prices in the world’s top cashew-farming region to unprofitable lows.

In the first few months of a normal year, over 55% of all cashews would be harvested by farmers in West Africa, dried and shipped in raw form to Asian processors before being sold to consumers worldwide.

But this year, the pandemic was hitting the sector just as West Africa’s cashew marketing season was meant to kick off.

Prices for raw cashews, which were already under pressure from excess supply in the last few years, tumbled after processing slowed in Asia and border closures in March stopped major buyers flying to West Africa from Vietnam and India.

With the majority of consumers outside the continent, the longer-term outlook for West Africa’s cashew sector will hinge on how key markets recover from the pandemic.

Singapore-based Olam International, the world’s leading raw cashew nut trader, said epidemic-related global supply chain delays and reduced consumer demand had dampened the market.

Olam Cashew President Amit Khirbat told Reuters that global prices are expected to stabilize at current levels for the foreseeable future as lockdown restrictions are lifted and demand gradually returns.

But for farmers like Gore-Bi, “This year is a catastrophe,” he said by phone from the central Ivorian region of Marahoue where he cultivates the nuts that are eaten as snacks or used in curry dishes, and desserts.

Ivory Coast saw international contracts fall to $900, some 35% lower than the start of the season, its cashew board told Reuters, citing a lack of buyers and slowdowns in Asia.

“Nobody is buying so it’s not worth tiring oneself with the harvest,” Gore-Bi said. Four other Ivorian farmers said they felt the same.

Gore-Bi stopped harvesting in late April after his cashews fetched only around 200 CFA francs ($0.34) per kg, less than half of what he was meant to receive as a state-guaranteed minimum.

A dozen cashew farmers, local buyers or government and trade officials in Ivory Coast, Ghana, Guinea-Bissau, Senegal and Gambia told Reuters the COVID-19 crisis had disrupted the market, but the fallout varied across the region.

Continental industry body the African Cashew Alliance has warned that Africa’s raw cashew exports this year could fall up to 30% below 1.2 million tons exported last year, while output may be up to 10% below around 2 million tons produced in 2019 as disillusioned farmers leave some crops unharvested.

Ivorian cashew board director Adama Coulibaly agreed output would be hit, but said it was too early to predict by how much. The country’s 2020 forecast has already fallen 10% to around 720,000 tons due to a lack of rain.

Measures to contain the virus also hampered flows of harvested cashews in the region.

A dusk-to-dawn curfew in Senegal shortened the time available to dry nuts. A new cashew cargo facility at Gambia’s airport idled due to the halt in air traffic and a regional lockdown in Ghana made it harder to deploy workers, according to officials and traders.

Some West African rural communities, whose livelihoods depend on what they earn from cashews during the lean season, are feeling the pain.

In the tiny coastal country of Guinea-Bissau, where cashews account for around 90% of export revenue and are the only source of income for 650,000 households, the government has given emergency funds to banks to support the sector.

Some Bissau farmers are distilling extra rum from unsold nuts, according to the farmers’ association.

But the situation is less gloomy elsewhere. Buying has picked up slightly in Ghana and production is expected to reach the forecast 140,000 tons, agricultural ministry official Anim Jerry Jacob told Reuters.

In April, prices for farmers had fallen over 56% to 3.5 Ghanaian cedi ($0.6140) per kg, he said.

Wayne Tilton, Africa director for Red River Foods, one of the largest cashew importers for the United States, said the crisis’s impact on Ghana’s cashew sector had been less bad than he had feared. Ghanaian farmers are receiving higher prices at the tail end of this season than at the same time last year, he said.

The crisis has warped dynamics on the consumer end in unprecedented ways. The mass cancellation of weddings in India meant demand plummeted for the cashew-based sweets traditionally offered as gifts, said Dhruv Dalmia, whose family’s business exports nuts from West Africa.

Conversely, US cashew imports for consumption jumped 18% year on year in January-April, trade data shows. Panic-buying is credited for the welcome boost, but the trend is expected to reverse in the second half of 2020 given the surge in unemployment to 30 million people.

“Are they going to be running out and buying cashews? Probably not,” Mr. Tilton said.

Red River Foods’ forward US sales for the third quarter are lower than in the same period of 2019, he said, without giving exact figures. — Reuters

Stuff to do at home (06/15/20)

Ang Huling Cha-Cha ni Anita

iWant is streaming a roster of LGBTQ+ films for Pride month. This week’s featured film is Sigrid Andrea Bernardo’s Ang Huling Cha-Cha ni Anita on June 15, 2 p.m. It follows 13-year-old Anita as she goes through puberty and self-discovery. She meets Pilar, a newcomer in town, who becomes the center of her affection. A Q&A session with the director will be held after the screening.

Livin’ La Vida Imelda

CATCH the late Carlos Celdran’s one-man show Livin’ La Vida Imelda, directed by Ralph B. Peña, for a limited free streaming from June 17 to 30 at the Ma-Yi Theater Company’s website (www.ma-yitheatre.org).

Zsazsa Zaturnnah ze Muzikal on CCP Online

CARLO Vergara’s musical Zsazsa Zaturnnah ze Muzikal will stream on the Cultural Center of the Philippines’ YouTube channel (bit.ly/CCPOnlineYT) on June 20, 3 p.m., The show stars Eula Valdez in the title role. It will be online for one week.

PETA’s Storytelling Sundays

THIS month, PETA family-oriented Storytelling Sundays focuses on Father’s Day on June 21 with Russell Molina’s Tuwing Sabado and Ano’ng Gupit Natin Ngayon?, two stories about fatherhood that tell how, in so many ways, fathers and father-figures influence who we are, how we think, and what kind of persons we could be. To watch, visit PETA’s Facebook page www.facebook.com/petatheater and YouTube Channel www.youtube.com/petatheateronline.

The EU film festival


THE first EU Film Festival movies are still accessible via Festival Scope until June 18. The 11 full-length films come from European countries such as Austria, Croatia, Czech Republic, Cyprus, Denmark, Germany, Finland, Romania, Netherlands, Slovenia, and the United Kingdom. These films range from comedy to drama and all are multi-awarded and have never been shown in the Philippines. The films are streaming for free and subtitled in English. To sign up for passes, visit bit.ly/EUff2020.

Royal Opera House

As part of its #OurHouseToYourHouse series, the Royal Opera House showcases La Fille Mal Gardée on its official Facebook page (https://www.facebook.com/royaloperahouse/). The comic ballet in two acts is inspired by Pierre-Antoine Baudouin’s 1765 painting La réprimande/Une jeune fille querellée par sa mère. The show stars Marianela Nuñez and Carlos Acosta.

Enchanted Kingdom’s virtual rides and attractions

WHILE waiting for Enchanted Kingdom’s reopening, thrill seekers can still enjoy the park through its virtual rides at its official Facebook page (www.facebook.com/enchantedkingdom.ph). Enjoy the Space Shuttle, Jungle Log Jam, the story of Enchanted Kingdom, and excerpts from the EK Story Musicale. For more information, visit www.enchanted kingdom.ph.

The Madness of King George III

THE UK National Theater will stream its adaptation of Alan Bennett’s The Madness of King George III at its YouTube channel (https://www.youtube.com/channel/UCUDq1XzCY0NIOYVJvEMQjqw) this weekend. Mark Gatiss stars as King George III while Adrian Scarborough plays the Prince of Wales, Debra Gillett is Queen Charlotte; and Sara Powell is Lady Pembroke. The show is available until June 18.

TP’s Mabining Mandirigma

TANGHALANG Pilipino, through the Pantawid ng Tanghalan fundraising project, presents the award-winning steampunk musical Mabining Mandirigma from June 12 to July 12 on iWant. To donate, visit https://bit.ly/KTXPantawidNgTanghalan. For more information, visit https://www.facebook.com/tanghalangpilipino/.

Ayala Museum online

THE Ayala Museum and the Filipinas Heritage Library extends its commemoration of the Declaration of Philippine Independence beyond June 12. The museum offers Spotify playlists, virtual tours and online exhibitions about the battles of past generations for independence. For more information, visit https://www.facebook.com/ayalamuseum/. For more online content, visit ayalamuseum.org/online-resources.

Virgin Labfest online

THE Cultural Center of the Philippines (CCP), Tanghalang Pilipino and Writers’ Bloc present the special online edition of Virgin Labfest (VLF), the theater festival of untried, unstaged and untested works, from June 10 to 28. Dubbed VLF 2020 Kapit, 10 main featured plays, as well as staged readings and revisited plays will be performed live online during the first week of the festival. Live performances are free to view on CCP Facebook live. The recorded versions will then be streamed on Vimeo website and/or app from June 14 to 28. For the full schedule, visit the CCP website (www.culturalcenter.gov.ph), CCP official social media account in Facebook, Instagram and Twitter and the Tanghalang Pilipino and VLF pages. There are also free sessions of the Playwright’s Fair and CoLab, the discussions with collaborators (including festival directors, designers, stage and production managers, and directors). Join the online Tambayan (Hangout place) at Facebook (https://www.facebook.com/groups/VLFTambayan/) for conversation or interaction with the VLF artists and staff. To create a Vimeo account, go to vimeo.com/ondemand and join. Once the account is set up, search for Cultural Center of the Philippines or VLF Kapit, and browse through the page to read the full description, watch the trailer, and make a purchase.

4 exhibits at Vinyl on Vinyl

AFTER being shut for three months, Vinyl on Vinyl reopened on June 6 with four new exhibits. Because of the ongoing COVID-19 pandemic, viewing is by appointment and the gallery will only allow three to four people to enter at a time. On view are Denis Bato’s exhibit A Line Starts and Ends with a Point; For/Ages by Anjo Bolarda, which features an army of human-faced spoons; Forest of Agencies by Isola Tong, where the artist considers the relationship between queerness and the forest; and Faye Pamintuan’s gestural paintings in oil on canvas in Ugh. The gallery is at the La Fuerza Compound 1, Chino Roces Ave., Makati. For details contact info@vinylonvinylgallery.com.

New show at BenCab Museum

JOHN Frank Sabado’s solo show, Distinction, which is up at BenCab Museum’s Gallery Indigo until Aug. 2, can be viewed online at the museum’s exhibit Facebook page (https://web.facebook.com/pg/bencabmuseum/photos/?tab=album&album_id=3113556848702650). The exhibit features Mr. Sabado’s new series of intricate pen and ink drawings that take a deeper look into the distinct ethnic markers of the peoples of the Philippine Cordillera.

Silverlens’ online show

SILVERLENS gallery is holding an online exhibition, Anticipating the Day, which is on view until June 20. Instead of installing the works in the gallery, they are installed in the artist’s studios, in-situ. Showing a more raw, but also more alive and organic part of the process, the show is a melding of what the gallery showed during lockdown through its social media #athomewith series, and works that the artists have been making while on lockdown. It features works by Martha Atienza, Frank Callaghan, James Clar Chati Coronel, Nicole Coson, Corinne de San Jose, Patricia Perez Eustaquio, Dina Gadia, Gregory Halili, Mit Jai Inn, Pow Martinez, Wawi Navarroza, Elaine Navas, Renato Orara, Gina Osterloh, Bernardo Pacquing, Gary-Ross Pastrana, Hanna Pettyjohn, Norberto Roldan, Ryan Villamael, and Eric Zamuco. To view Anticipating the Day, visit www.silverlensgalleries.com.

PPO holds online ‘Instruments Petting Zoo’

THE Cultural Center of the Philippines presents the Philippine Philharmonic Orchestra (PPO) in a Musical Instruments Appreciation Series for Children and Families, a virtual “instruments petting zoo” to be held on Sundays, starting June 21 at 4 p.m., in celebration of Father’s Day. The series focuses on a different instrument every Sunday. Its maiden session will feature the violin with PPO violinist Christian Tan. The series will see one to two members of the PPO per session who will discuss their musical instrument and demonstrate how it is played. The series aims to promote an appreciation for the individual instruments of the orchestra and its music among children and families. The program is open to the public via Facebook live through the PPO Facebook page.

Ballet Manila online

BALLET Manila present’s Lisa Macuja-Elizalde’s favorite roles from her Swan Song Series for streaming at its official social media pages (www.facebook.com/balletmanilaofficial) and (www.youtube.com/c/balletmanilaofficial). New ballets are uploaded on Saturdays at 6 p.m. and are available for a week.

CAST Recording

CAST Recording’s third radio drama: Arnold Bennett’s A Question of Sex is now on Spotify (https://open.spotify.com/show/5bLSOsJPkZnIaEFDfSSHbl?si=ndUICgUUQj-UKIjxEGbW6w&fbclid=IwAR06k5DEB0zRa4b1jCqeglmtENl3lTwCAwlcOiLltwcNGjg84r8qHdhmL-M). Directed by Nelsito Gomez, the reading features Reb Atadero, Sarah Facuri, Cathy Azanza-Dy, and Jeremy Domingo.

National Museum of the Philippines

THE National Museum of the Philippines has released a new coloring set with Larry Dianco’s illustrations of endemic orchids such as the waling-waling. To download, visit https://www.facebook.com/nationalmuseumofthephilippines/photos/a.195151237175869/3282991451725150/?type=3&theater.

Landers online workshops for kids

LANDERS Superstore’s Mommy Club, in partnership with Child’s Home Educational Center, is offering free weekly online workshop classes this month. It is open to children of Landers members who are aged four to seven. Kids can learn about nature, science, animals, and health. The classes will have storytelling, arts and crafts activities, science experiments, and games. The workshop classes will be held every Tuesday, Thursday, and Friday at 11 a.m. and 4 p.m. and will run throughout June. Each class will be 45 to 60 minutes long and will be facilitated by two preschool teachers from Child’s Home Education Center. Participants are required to have a stable internet connection, as well as a phone, tablet, or laptop with the Zoom app. They will receive the Zoom meeting ID and list of materials needed on the day of their kid’s scheduled class. Sign up at https://www.landers.ph/lofcustomermembership/buy. After signing up, go to the Landers Mommy Club Facebook page @LandersMommyClub and join the group. Only 15 kids will be accepted for each class and registration is on a first-come, first-served basis. For more information, visit https://www.facebook.com/LandersPH/.

J.K. Rowling’s The Ickabog

Best-selling author J.K. Rowling is releasing her new children’s novel The Ickabog online. Ten chapters are currently available, with more chapters to be released over the next seven weeks. The book is set for full release in November. Read the chapters for free at https://www.theickabog.com/.

Swans for Relief

Thirty-two premier ballerinas from 22 dance companies in 14 countries — including Ballet Philippines’ Denise Parungao and Jemima Reyes — dance in a video of Le Cygne (The Swan) to the music by Camille Saint-Saëns, performed by cellist Wade Davis. The video was done in support of Swans for Relief, a fundraising program organized by dancers Misty Copeland and Joseph Phillips. Funds will be distributed to participating dance companies as a COVID-19 relief fund. To watch performances, visit https://www.youtube.com/watch?v=PT14o5Wq7gE/ To donate, visit https://charity.gofundme.com/o/en/campaign/swansforrelief.

NCCA online

The National Commission for Culture and the Arts (NCCA) presents The National Artists series of Sagisag Kultura TV at the NCCA Youtube (https://tinyurl.com/NationalArtistSeries). Premiering episodes include videos of National Artist for Literature Nick Joaquin, National Artist for Dance Leonor Orosa-Gocquinco, and National Artist for Music Lucrecia Kalisag.

Tanghalang Pilipino’s Pantawid ng Tanghalan

Tanghalang Pilipino (TP) launches the Pantawid ng Tanghalan fundraising project to sustain its commitment to providing the public with artistically excellent and socially relevant productions during the pandemic. Until June 30, TP will be streaming six of its original plays through iWant. The streaming plays are Lam-ang: An Entho Epic Musical; Mabining Mandirigma; Coriolano; Pangarap sa Isang Gabi ng Gitnang Tag-araw; Der Kaufmann; and Sandosenang Sapatos. To donate, visit https://ktx.abs-cbn.com/events/25444/pantawid-ng-tanghalan.

NHCP Museums

LEARN about Philippine history by visiting various National Historical Commission of the Philippines museums across the country online. To do so, visit https://www.facebook.com/historymuseumsPH/photos/a.474072142988822/769005046828862/?type=3&theater.

Foo Fighters at the Wembley Stadium

THE Foo Fighters’ concert film Live at the Wembley Stadium is now available online at the band’s YouTube channel (https://www.youtube.com/watch?v=jcwBsntqjmY&feature=emb_title). The show features guest performances by Jimmy Page, and John Paul Jones of Led Zeppelin.

Jerrold Tarog’s Senior Year

WRITTEN, directed, edited and scored by Jerrold Tarog, the film Senior Year (2010) is now streaming on Vimeo (https://vimeo.com/404089376). Set in a Catholic school the story follows the struggles and anxieties of students during their final year in high school.

Dulaan UP’s Adarna

DULAANG UP’s play Adarna (2013) is now streaming online. Adapted by Vlad Gonzales and directed by José Estrella, the story is based on the narrative poem about three princes’ quest to save their ailing father by capturing the Adarna bird which is believed to have curative powers. To watch, visit https://www.youtube.com/watch?time_continue=1&v=hV2UPXi1wMA&feature=emb_title.

National Library of the Philippines

THE National Library of the Philippines offers free scholarly eResources including research related to COVID-19. The list of resources come from the National Emergency Library, Cochrane Library (Medical & Health Science), De Gruyter — Journals (Multidisciplinary), and more. To view access links to eResources, visit https://www.facebook.com/NLP1901/photos/a.375779479606724/912930019224998/?type=3&theater.

Guggenheim artbooks

THE Solomon R. Guggenheim Museum offers downloadable items from its archives for free. Titles include modern and contemporary art books about Vincent Van Gogh, Pablo Picasso, Vassily Kandinsky, Gustav Klimt and more. The archive is searchable by artist, year, medium and artistic style or movement. Visit the archives, https://archive.org/details/guggenheimmuseum.

BioBalance Wellness consultation

THE BioBalance Wellness Institute offers the following services and features: free online consultation with its clinical nutritionist and nurse practitioners, wellness expert psychologist; online health and immunity risk assessment; and more payment options for availed services and products. For more information, contact 0917-521-4860 or concierge@biobalanceinstitute.com.

IkotMNL tour from home

THE Museo de Intramuros, Ayala Museum, and Presidential Museum and Library in Malacañang Palace have partnered with Google to put their works online. Learn new things at home and visit the museums through a virtual tour: https://artsandculture.google.com/partner/malacanang-presidential-museum-and-library; https://artsandculture.google.com/partner/ayala-museum; and https://artsandculture.google.com/partner/intramuros-administration.

Film masterclasses

LEARN film concepts through interviews and film retrospectives from more than 60 directors, producers, writers, and actors including Bong Joon-Ho, Abbas Kiarostami, Agnès Varda, Spike Lee, Werner Herzog (with Roger Ebert), Jane Campion, Jodie Foster, Todd Haynes, Ang Lee, Jessica Lange, and Clint Eastwood. To watch, visit https://walkerart.org/magazine/series/dialogues-film-retrospectives.

Radiohead Concerts

BRITISH rock band Radiohead has been uploading some of its concerts via its official YouTube page (https://www.youtube.com/user/radiohead). Fans of the Rock and Roll Hall of Fame band, known for songs like “Creep” (1992) and “Fake Plastic Trees” (1995), can watch the concerts Live from a Tent in Dublin (2000) and Live in Berlin (2006).

David Guetta: United at Home

FRENCH DJ David Guetta, the man behind the song “Titanium” (2011) featuring singer SIA, held a live concert fundraiser inside his Miami home benefiting the World Health Organization and other charities. The two-hour concert is currently available on his YouTube page (https://www.youtube.com/user/davidguettavevo).

Frank Lloyd Wright virtual tours

THE Frank Lloyd Wright Building Conservancy, in partnership with the Frank Lloyd Wright Foundation and Unity Temple Restoration Foundation is offering #WrightVirtualVisits every Thursday (1 p.m. Eastern/10 a.m. Pacific time) in participating sites. Check the participating sites at https://savewright.org/news/public-wright-sites-swap-virtual-visits/.

Color Tolkien characters

THE official Facebook page of the late author J.R.R. Tolkien has uploaded an illustration of Smaug the Magnificent from The Hobbit Movie Trilogy Colouring Book. Download the coloring sheet at https://bit.ly/2wKY3lp.

Print & Play activities for kids

KEEP kids entertained with new curated Print & Play activities from HP. The activities from craft making, mazes, dot-to-dot drawing and puzzles are suitable for ages 2 to 12. With HP Print & Play, parents can choose from a range of activities that are best suited to their children’s needs to achieve the best possible learning outcomes. To try the activities, visit https://www8.hp.com/ph/en/printers/printandplay/index.html?jumpid=va_u19mhncewr.

Harry Potter exhibit online

THE British Library’s Harry Potter: A History of Magic exhibition is available online through Google Arts and Culture. Its features include video clips and sketches, a Q&A with exhibit curator Julian Harrison. To view, visit https://artsandculture.google.com/project/harry-potter-a-history-of-magic.

Hogwarts online

HOGWARTS Is Here, an online version of the Harry Potter series’ magical school by Harry Potter fans that allows visitors to take courses like the characters from J.K. Rowling’s book series. Various courses include Astronomy, Herbology, History of Magic, and Transfiguration. The website also includes a forum, groups, and library feature. Visit http://www.hogwartsishere.com/.

Color Manolo Blahnik designs

MANOLO Blahnik shares a selection of his original sketches for coloring. The shoe designs are downloadable at https://www.manoloblahnik.com/gb/smile.html.

Podcasts on Philippine crime

STORIES After Dark features podcasts on Philippine true crime and mystery stories. It currently has 14 episodes including The Maguindanao Massacre (2009), The Ozone Disco Fire (1996), and Pepsi Paloma: Rape or Publicity Stunt? Suicide or Murder? (1982/1985). To listen, visit https://www.facebook.com/storiesafterdarkph/.

Palacio de Memoria virtual tour

ART and history enthusiasts can now go on a virtual tour of Palacio de Memoria, the resplendent Colonial Revival mansion, and marvel at its luxurious facilities and hundreds of Euro-Filipino paintings, sculptures, art displays, and historical pieces online. It features the showroom of Palacio de Memoria’s auction house, Casa de Memoria or the Casa, which houses the Lhuilliers’ unrivalled collection of antiques, the Mosphil Lounge, and a passenger plane that was refitted to be a lounge for special occasions. To view the complete Palacio de Memoria’s virtual tour, visit https://www.palaciodememoria.com/tours. For more updates, follow @thepalaciodememoria on Facebook and @palacio.de.memoria on Instagram.

E-coloring books

THE Getty Museum and the Getty Research Institute of Los Angeles offers the Color Our Collections edition for 2020. To view, visit http://library.nyam.org/colorourcollections/page/11/.

OUTLIER: BDO Unibank investors take profit as gloomy prospects linger

By Marissa Mae M. Ramos, Researcher

ECONOMIC uncertainty brought about by the pandemic’s “new normal” prompted investors of BDO Unibank, Inc. to take profit, making it the fourth most actively traded issue last week.

A total of 15.09 million BDO shares worth P1.62 billion were traded from June 8 to 11, data from the Philippine Stock Exchange showed. Financial markets were closed on June 12 in observance of the Philippine Independence Day holiday.

The share price of the Sy-led lender closed at P105 apiece, down 7.9% from June 5’s closing price of P114 apiece. Since the start of the year, the bank’s share price has slipped 31.8%.

“[T]he activity of BDO stock, in particular, is a result of taking profits of investors as the optimism for the economy dissipates…,” Philstocks Financial, Inc. Client Engagement Officer and Research Associate Piper Chaucer E. Tan said in an e-mail.

Mr. Tan said reopening of the US and the Philippine economies even with rising coronavirus disease 2019 (COVID-19) cases as well as the impact of the “new normal” on the global economy worried investors.

He said the continuing uncertainty led investors to shy away and move to safe-haven instruments such as commodities and fixed income.

For Unicapital Securities, Inc. Technical Analyst Cristopher Adrian T. San Pedro: “A cash dividend of P0.30 with an ex-date of June 11, prompted the investors and short-term traders to profit take before the Independence Day long weekend.”

Both analysts also noted the activity as influenced by foreign exit with net foreign selling for BDO last week amounting to P168.38 million.

Restrictions for one of the world’s longest lockdown were eased on June 1, putting the National Capital Region, Cagayan Valley, Central Luzon, Calabarzon, Pangasinan, Albay and Davao City under general community quarantine which allowed most businesses to operate at 50% of full capacity.

However, data from the Department of Health show new COVID-19 cases are still hundreds each day with the total reaching 25,392 as of June 13 and more than a thousand Filipinos dying because of the disease.

“The bank is well-capitalized to withstand the impacts of the COVID-19 pandemic particularly when it comes to nonperforming loans (NPLs). They have enough buffer when it comes to liquidity, asset quality, and solvency,” said Mr. San Pedro, who expects the bank to post a net income of P46 billion this year.

He said the lender’s income would depend largely on the impact of the local and global market conditions to its portfolio, adoption of digital payments through its e-money platforms, the extended lockdown that dragged credit activity, as well as the expected spike in NPLs.

Philstocks Financial’s Mr. Tan has the same assessment but noted that BDO and other banks would remain resilient as the sector would not experience a “full stop” like tourism and transportation.

“The measure of the banks right now is to increase the provision for losses to mitigate the effects of an increase in bad loans, but as far as listed banks are concerned, most especially BDO, strong and prudent balance sheet can weather this pandemic together with monetary easing,” he said.

Mr. Tan sees BDO logging a P34.26 billion net income this year.

In a disclosure to the bourse on June 1, the bank said it would set aside an additional P20 billion for its loan loss provision, which is on top of the P2.1 billion it set aside in the first quarter. The bank said it was anticipating the “expected disruptive economic impact” of the pandemic and the lockdown imposed by the government.

The lender’s NPL ratio was at 1.3% and NPL cover was at 151.4% in the first quarter. Its attributable net income dropped 10.2% to P8.77 billion.

Moving forward, Mr. Tan sees “primary resistance of BDO pegged at P116.2 and secondary resistance at P140.1. As for the primary support [it] is spotted at P100 and its secondary support is at P86.5.”

Mr. San Pedro, meanwhile, forecast a support and resistance range of P97.85 to P114 in the short term.

“It needs to stay above P114.00 to establish a potential trend reversal with a target of P120.00 and P130.00 resistance levels,” he said.

Shares likely to decline as momentum runs out

By Denise A. Valdez, Reporter

THE LOCAL MARKET may continue to be full of profit takers this week as the main index undergoes correction and investor optimism starts to wane.

The bellwether Philippine Stock Exchange index (PSEi) closed on Thursday at 6,476.24, higher by 36.87 points or 0.57% from a day ago. The market was closed on Friday in observance of Independence Day.

On a weekly basis, the PSEi is up 0.17% as investors “took a breather after consecutive days of rally,” online brokerage 2TradeAsia.com said.

Value turnover slipped 0.97% to an average of P8.55 billion, while net foreign buying was slashed 92.6% to an average of P42.63 million.

“(The PSEi) hovered around the 6,500 level all week but struggled to climb as investors have started to secure profits after several weeks of substantial gains… Majority of investors are still optimistic and are trying to make the most of this recent rally,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a market note.

He added last week’s performance shows the market rally over the past two weeks “has run out of momentum,” and therefore may “start to pull back and test a stronger support level.”

2TradeAsia.com said investors will be awaiting the next announcement from the government whether it will change the current quarantine status in Metro Manila and other major cities. The relaxed lockdown currently in place will expire after June 15, and it may be tightened, maintained or further relaxed after that.

“The (more relaxed lockdown), being the penultimate phase before the ‘new normal’, is the most ideal, at least from capital markets’ perspective,” it said. If the government goes this direction, 2TradeAsia.com said it would bode well for short-term cash flows of companies in the dining, accommodation, entertainment and sporting sectors.

For Mr. Mangun, the decline in global equities last week over the US Federal Reserve’s decision to maintain interest rates may also dampen sentiment in the local market this week. But he believes more money may go into the stock market as investors keep looking for profit.

“At the moment, economic fundamentals remain strong despite the setback caused by the pandemic. Our economy is still seen to perform better than most as it recovers from the damage caused by the lockdowns. Investors are still watching how well the government is handling the eradication of the virus as well as its relief response,” he said.

Both 2TradeAsia.com and Mr. Mangun said investors will have their eyes on MerryMart Consumer Corp. which will list its shares at the market today. The company is the first to do an initial public offering this year.

2TradeAsia.com is putting immediate support within 6,000-6,200 and resistance within 6,500-6,600. Mr. Mangun is setting support within 5,950-6,350 and resistance within 6,800-7,200.

Pag-IBIG Fund in the time of COVID-19 (A Q&A with Pag-IBIG Fund)

Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti

By Lourdes O. Pilar, Researcher

THE NEED for a national savings program and affordable home financing for working class Filipinos led to the creation of the Home Development Mutual Fund, or more known as the Pag-IBIG (Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno) Fund on June 11, 1978.

More than 40 years later, Pag-IBIG Fund members can tap various loan products aside from housing loan packages. There is the multi-purpose loan, which active members can use to fund various needs, such as minor home improvement, tuition expenses, health and wellness, and small business capital, among others. Meanwhile, there is also the calamity loan, which Fund members in calamity-stricken areas can avail of for immediate financial aid with below-market interest rates.

With the uncertainties brought by the coronavirus disease 2019 (COVID-19) pandemic, Pag-IBIG Fund has offered two other programs for relief on loans: the mandatory grace period of 30 days on loan payments brought about by the Bayanihan Law and the three-month moratorium on all loans, which the agency initiated during the enhanced community quarantine (ECQ). It also expanded its home construction fund to P10 billion from P2 billion to support the country’s housing market and help revive the economy.

With these in mind, BusinessWorld interviewed Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy P. Moti for his thoughts on the future of the institution and how the agency balances sustainability and profitability amid the “new normal” brought by the ongoing pandemic.

Below are excerpts of the interview.

Would you say that Pag-IBIG was prepared for the COVID-19 pandemic? How was this different from other exogenous shocks that led to an increase in demand for loans (or deferred loans)?

I don’t think there is any single corporation, may it be private or government-owned, that is fully prepared for the effects of this pandemic. But for Pag-IBIG Fund, we have been updating our stress-testing… We had our strategic planning last February and based on our assumptions, Pag-IBIG would still be okay should there be a black swan event.

We were lucky to have run our stress-test a few weeks before the declaration of the ECQ. We made certain assumptions on loans and if there is a huge drop in its availment. For example in Metro Manila, we lost two and a half months that we will not recover so we are now looking at around a 20% reduction in our expected business for the year. We are expecting for a decline in our home lending or housing availment.

The silver lining though is that, usually, when there are natural or man-made calamities (this time, a pandemic), there is a huge availment on calamity loans. We expect a large demand for calamity loans and multi-purpose loans, but as far as housing mortgages are concerned, we are looking at 15-20% drop.

We have done our environmental scanning recently and a many of our partner developers are saying the same thing— that it will take them a long time before they can restart and resume full operations. For the first two months of the year, we were on track to hit our numbers. We were supposed to finance a P100 billion worth of mortgages, but now we are only looking at P75-P80 billion until the end of the year. This is at par with our home loan releases in 2018, which was one of our record-breaking years.

You provided two programs (three-month Moratorium and 30-day Grace Period) to defer loan payments of members to assist them during the pandemic. How did these come about?

Immediately after the declaration of ECQ, the Pag-IBIG Fund Board decided to offer a three-month moratorium program for all our loan borrowers— both for housing loan borrowers or short-term loan (STL) borrowers. This program is optional and will run until June 15. Members only need to go to the website of Pag-IBIG and key-in their housing loan account number or membership identification number. There is around 80% of applications received that we expect to be approved immediately.

Knowing the deep impact on the members’ finances caused by the pandemic, moratorium applications for example of our minimum-wage borrowers and low-wage earners are immediately approved — regardless of the loan status, even if the account is undergoing foreclosure. We relaxed our loan programs during this pandemic, as we know that our members would badly need the help of Pag-IBIG.

The beauty in this moratorium… is that the next payment, for say a member with updated payments who availed of the moratorium, would be after June 15. The three months are deferred and even the loan term would be extended by three months, without interest. That is our three-month moratorium.

And when Republic Act (RA) No. 11469, otherwise known as Bayanihan to Heal as One Act, came into law, it implemented a 30-day grace period for all loans due within the ECQ period. In our case, all of our members are covered. What we at Pag-IBIG did is, we made the assumption that all borrowers would avail of staggered payments (on accrued interest on loan payments during the ECQ), such being to their best interest, and thus will not be included in the amount due on their next due date. For example, most of our almost four million STL borrowers would have a due date of June 15. The said interest portion will be set up as accounts receivable but will not be interest-bearing. We will not oblige our members to pay this portion of their loan, but members who want to pay can still do. We will still accept it and post it accordingly.

Both programs are available to our members. After the grace period, members can still avail of the three-month moratorium.

What is not known in the industry is that our penalty policy, comparing it with the penalty policies of various banks, is more member-borrower friendly. (In banks), when you have a loan, say P1 million, and your account defaults or you miss more than 3 months of your payment, the whole loan becomes due and demandable. Then you will get charged a penalty of about 18% of the whole loan amount. In Pag-IBIG Fund, our penalty policy charges 18% only on the missed payments.

While other universal banks have a rather punitive policy, in Pag-IBIG Fund’s case, it is not, because the Fund is owned by the members. There is a penalty, but it’s not 18% of the total outstanding balance, but 18% of missed payments so it is easy to recover for members who borrowed from Pag-IBIG Fund. This penalty policy was not highlighted thoroughly, but I am hoping that the lenders, especially the banks, would extend all the help they can extend to their borrowers, to avoid the number of foreclosures.

Could you describe the traction for the Calamity Loan and the Multi-Purpose Loan programs in terms of applications in the weeks during the ECQ ? How many have so far applied for these loans? How much of these loans were approved as of the latest data available?

When Metro Manila was placed under lockdown, we allowed our members to file calamity loan and multi-purpose loan applications via email. So far, the total number that has been released during the ECQ period reached almost P2 billion and helped almost 130,000 members. While Pag-IBIG Fund has extended a lot of help the past months, we still expect a huge increase in our calamity and multi-purpose loan applications after the lifting of the ECQ.

How quick are the loan applications being processed (average waiting time from application of loan)? Given the anticipated increase of email applications due to the pandemic, how does Pag-IBIG ensure that backlogs are at least minimized?

We have been seeking the understanding of our members during the ECQ and MECQ (modified ECQ) period because we were not allowed to send many of our employees to our offices. Now that the country has been placed under a more relaxed lockdown, the processing time for loan applications will slowly return to normal. We used to process loans in less than two days. When you file an application and if everything is in order, it will only take two days or less for you to receive your loan.

Our Online STL filing is only available for members with valid cash cards used by Pag-IBIG Fund. If a member has any of those cash cards, they can go online instead of going to our branches. Just take a picture of the application form (front and back), a picture of one valid ID and take a photo of yourself or a selfie, in other words. The application then goes straight to our database. When the processors open the system, applications will be seen immediately. This is certainly better and safer, than queuing in line in Pag-IBIG branches to file an application. With our online application, the loan is in fact pre-processed as it goes straight to our database and hence, the processing time is faster.

Housing is one of your agency’s mandates. How were you able perform this despite the times? Just recently, Pag-IBIG Fund released P10 billion for its House Construction Financing Line (HCFL). Why was this done and what are your expectations with this move?

In Pag-IBIG, we have twin mandates: one is to encourage members to save, and second to deploy up to 70% of our funds for home financing. Under our housing loan program, we processed P12 billion in the first two months of the year.

Unfortunately, during the month of April, we only processed P880 million because of the lockdown. From the average of P6 billion in the first two months, it went down to P3.8 billion in March, and then to P882 million in April.

So why did we announce the increase in our developmental loan from P2 billion to P10 billion? That was to send a strong signal to the housing industry, especially to the socialized and low cost housing industry where most of our accredited developers are in, for them to start building socialized and low-cost housing units which would also send a signal to other developers that they have to start to operate again. The P10-billion construction funding acts as a bridge financing facility for them through our HCFL.

HCFL is one of our loan products available to accredited developers with good standing in the Fund. Its main objective is to provide a financial source for our developers that will encourage them to construct units in their developed lot so that there is ready inventory of affordable housing units for our members. These developers can borrow a loan up to 70% of the collateral value.

The P10 billion we have set aside for this is Pag-IBIG Fund’s contribution to stimulate the economy. It is also a means for socialized and low-cost housing developers to restart business even if there is fear in the market. We know that there is a 6.5-million housing demand. If we don’t support the developers, the housing business will collapse, especially those small- and medium-sized developers with P15-million to P100-million-a-year businesses. So at least there is that pump-priming of the socialized and low-cost housing industry courtesy of Pag-IBIG Fund.

How will the COVID-19 pandemic affect Pag-IBIG Fund’s bottom line this year?

There is going to be a huge impact. At the very least, since we lost 2.5 months, if we divide it by 12 months, there would be a 20% reduction. Based on the three scenarios when we did the stress test, for all scenarios, we at the Pag-IBIG Fund will still record tens of billions of pesos of net income, but it will not be a P30-billion income for the year 2020.

If last year we reported a P34-billion net income, this year it would probably be nearing P20 billion — still sizeable but is a 30-40% drop. Pag-IBIG Fund will still record decent net income by end of the year, but it will not be as good as the previous years, but otherwise we are still good. We have been doing a lot of interventions to help our members especially those who have been religiously paying their loans and only now started to miss their payments— and we know those members, so we will take care of all of them.

In the post-COVID-19 environment, would some features of these programs be retained in your other programs? If so, what would they likely be?

We got a glimpse of the new normal during the lockdown. Last December, we launched our Virtual Pag-IBIG. Of course, we did not know that there was going to be a pandemic coming this March. Regardless, Pag-IBIG Fund believes that our members will shift towards the digital platform.

Virtual Pag-IBIG is a virtual branch for every member’s disposal. Before, if you want to know the status of your loan or contributions, you have to go to the branch or you have to call. Now, if you have created a Virtual Pag-IBIG account, you can easily monitor the transactions you have done such as your payments, your savings, loan application status, the dividends you have earned, etc. That is how visible the Virtual Pag-IBIG is. It also has a chat service operating 24/7 for our members, especially our Overseas Filipino Workers (OFWs), with queries with a service agent from the Philippines ready to give an answer.

Pag-IBIG Fund has done a number of digitization and automation that are now proving to be very wise investments. As far as we are concerned, we are ready, the things that we have worked on over the years have paid dividends even more so now that we are in the new normal.

What were the lessons that Pag-IBIG can draw from this experience? What developments can we expect in terms of improvements or new offerings?

It validates our multi-year projects when we were envisioning how the members in the future would transact with us. Before, we were so focused on serving the millennials—a workforce with high technology culture who may not be too excited to wait a long time just to avail of our services. That was the challenge— how to properly serve that sector that forced us to invest digitization and automation projects.

Pag-IBIG Fund will soon push through with our two remaining phases of the Virtual Pag-IBIG. When we launched the Virtual Pag-IBIG last December, we have been working on three versions:

The first is the Virtual Pag-IBIG for Members, which covers all transactions that a member would do in a physical branch.

The second is the Virtual Pag-IBIG for Employers, with transactions in this phase to include remittances of employers, certification for employees availing of loans and Pag-IBIG Fund billing statements.

The third one is the Virtual Pag-IBIG for Developers wherein our partner developers can verify if a member is eligible for a home loan, and will then send via short message service to confirm if that member is interested to buy or reserve a certain unit. If that member says yes, it cuts the process drastically because there is less need for documentation.

One realization is that, we have to work hard to make sure that we get to deploy these phases at the soonest possible time. That is one of the silver linings of the pandemic, we were forced to think of alternative ways with much higher capacity for the whole industry in the long run.

We would also like to encourage borrowers who are capable of paying their loan obligations with the Pag-IBIG Fund to pay, because the interest-rate pricing of Pag-IBIG Fund is mainly driven by the efficiency of the collection. Since the time I was made the head of home lending operations in 2012, our interest rates have always gone down; from 11.5% it lowered to 8%, now it’s down to as low as 5.375% and was never re-priced upward.

So if borrowers could help Pag-IBIG Fund, if they want to help us retain the rates, please continue to pay their loan obligations so we can also re-lend the money that we will be collecting.

We are all about sustainability more than profitability. It was a balancing act between keeping the rates low while being able to give our members, especially the savers and the pure savers, a decent return of their savings in the form of dividends.

Fewer Filipinos die of COVID-19 as local infections near 26,000

PHILSTAR/MIGUEL ANTONIO DE GUZMAN

FEWER FILIPINOS infected with the novel coronavirus are dying compared with the rest of the world, an academic health expert said on Sunday.

The Philippines has a fatality rate of about 4% compared with the global average of 5.6%, John Wong, a professor at the Ateneo de Manila University’s School of Medicine and Public Health said at an online news briefing.

“Over time, our case fatality rate has continued to go down,” he said. Back in May, the death rate was 5.5%.

Still, the country’s fatality rate is higher than its Southeast Asian neighbors excluding Indonesia.

In contrast the United States reached a milestone after its COVID-19 death rate passed 340 per million residents, more than 100 times the rate in China (3.32 per million), according to Time Magazine.

The US has the most coronavirus cases and the most deaths of any country in the world. The two hardest hit states have been New York, which had almost three in 10 US deaths, and New Jersey with one in 10 deaths.

The Philippine Department of Health (DoH) reported 538 new coronavirus infections yesterday, bringing the total to 25,930.

The death toll rose to 1,088 after 14 more patients died, while 248 more patients have gotten well, bringing the total recoveries to 5,954, it said in a bulletin.

Of the new cases, 366 results were reported in the past three days, while 173 were reported late, DoH said.

There were 18,612 active coronavirus cases in the country — 349 did not show any symptoms, 18,138 were mild cases, 63 were severe and 17 were critical cases.

A team of researchers from the University of the Philippines Diliman earlier said infections could reach 40,000 by the end of June.

President Rodrigo R. Duterte is expected to announce on Monday his decision on whether to further ease the lockdown in Manila, the capital and nearby cities.

DoH has been reporting fewer deaths of late.

Health Undersecretary Maria Rosario S. Vergeire told the same briefing that of the reported deaths this month, most were from the previous months because of late validation.

Mr. Wong said death reporting has improved to a seven-day delay from 22 days.

Ms. Vergeire said the public must remain vigilant and continue observing physical distancing, wear masks and wash their hands frequently.

Health Undersecretary Maria Rosario S. Vergeire on June 11 said Health Undersecretary Francisco T. Duque III had approved the guidelines for expanded targeted testing.

The expanded testing will now cover frontliners in quarantine facilities, village health emergency response teams, prison and jail employees and social workers.

Pregnant women, people who undergo high-risk operations, detainees, institutionalized people, those undergoing dialysis, chemotherapy and radiotherapy and those with immuno-compromised conditions like people with HIV will also be prioritized.

Other frontliners would only be tested if they had close contact with probable and confirmed patients, while those who are at risk of getting the virus would be tested only upon doctors’ recommendations, Ms. Vergeire said.

She also said the test need not be repeated before a patient can be sent home.

The coronavirus has sickened 7.9 million and killed more than 432,000 people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization.

About four million people have recovered from the disease, it said. — Vann Marlo M. Villegas

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