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SafePass and SafeForm envision a safe next normal

Earlier in May, Regtech startup UNAWA launched two digital solutions to aid businesses reopen and operate safely post-lockdown. SafePass and SafeForm are envisioned to help SMEs and large enterprises ensure the safety of their physical locations as well as their businesses’ digital data.

SafePass

SafePass is an all-digital, contact-free authorizing, scheduling, and contact tracing platform. The system aims to help companies better manage their physical locations by allowing them to control the number of people in their premises, and by providing contact tracing capacities, notifying their customers should an incident arise from their location.

Among the platforms features are:

 – Scheduling and capacity management – for better implementation of physical distancing rules;
 – Guest reservation – for a more predictable visit for everyone;
 – Visitor health questionnaire – for the collection of health information from every visitor in an all-digital and contact-free way; and
 – Contact tracing analytics – for an improved incident management experience.

SafePass asserts they claim no ownership over the data they process. This information volunteered by users is to be used by the businesses only for contact tracing purposes.

Given the example of a grocery store using this system, UNAWA explains the user experience as follows:

End-users, whether customers (shoppers) or employees, will need to sign up for a SafePass QR from the establishment first. SafePass has a feature called Guest Reservation that will enable end-users (based on the Business’ subscription plan) to “reserve” his / her access to a specific establishment.

The grocery will need not email a health questionnaire, as this feature is built into the SafePass app. The questions include three specific questions related to: having fever over 37.5, experiencing symptoms (e.g. cough, vomiting), and contact with someone that has confirmed diagnosis of COVID-19 or travel to another country.

You will not need to send a SMS to inform them of your preferred shopping time slot, nor will the grocery revert with a confirmation SMS.

Under the Guest Reservation feature, the user will be able to select the time slot to gain access / entry to the grocery, based on the time slots provided by the business. SafePass also allows admin operators (or those who will manage SafePass) to set the capacity per slot that it will define in its settings.

This Capacity Planning feature will help to minimize foot traffic and ease crowds. Scheduling and Capacity Management also help to make business more predictable.

If someone in the facility turns out to be COVID-19 positive or has confirmed diagnosis of COVID19, the system allows businesses to contact those who were in contact with said person provided that the information given is sufficient to trace the contact.

SafePass will be web-based, so will not need to be downloaded. Access via web browser is all that is needed. Once he/she receives a SafePass QR from a specific establishment, they may already be granted access to enter said establishment, given they meet the minimum health criteria.

SafeForm

The firm’s second offering, SafeForm, helps companies “take that next step in digital transformation” by enabling business owners to create digital forms or convert their analog forms to digital platforms. It allows for securing company data and contact-free transactions and processes through:

 – Digitization – transformation of analog forms and information into digital data;
 – Protection – protection of data and compliance with Philippine Data Privacy laws; and
 – Transaction – creation of e-signatures, etc. to make forms legally binding.

As with SafePass, SafeForm will likewise not own any consumer data.

The realities of the next normal

These two systems were born out of the health concerns, mobility restrictions, and the necessary shift to the digital economy. With both platforms, UNAWA aims to enable entrepreneurs to operate effectively in the next normal.

Winston Damarillo, Chief Strategy Officer of UNAWA and Executive Chairman of Amihan Global Strategies, said, “Gusto nating bigyan ng lakas ng loob ang ating mga negosyo para magbukas, at gusto nating bigyan ng tiwala ang ating mga consumers at pumunta at [tangkilikin ang] ating mga businesses.”

[“We want to give our entrepreneurs the courage to reopen, and we want to give our consumers the confidence to go and patronize these businesses.”]

The entry level plan for SafePass is free for one establishment. Scan the QR codes below to book a free demo for either system or email una@unawa.asia.

FHMoms, serving and empowering the nation’s working mothers

MK Bertulfo had had enough of her daily grind as a working mother. Caught between rush hours for a call center job that barely paid the bills and tending to a baby that would cry whenever she left the door, she knew she needed to find a new way to support her family.

One inspired night, she decided to respond to an online job listing from a Canadian tattoo shop looking for email support. To her surprise, she got called for an interview a few hours later. It was the first of many similar, well-paying jobs she would end up taking—jobs she could do from home, earning her the time for her family and financial freedom that she, and so many women in her position, yearned for.

In 2017, one of her friends, who had also worked at a call center, had a baby. Bertulfo knew she had an entire playbook of tips she could share to help her friend out. But, realizing that this struggle they shared was a universal one, she decided to create a Facebook group to share those strategies with all her mommy friends. The small group quickly ballooned to encompass more than 195,000 members from all over the country, all looking to Bertulfo for career advice.

Before long, she was flying out from Metro Manila to as far as Zamboanga every week, holding seminars, with her baby in tow. She even started conducting online training sessions for mothers who lived in far-flung areas.

In the span of two years, Bertulfo ‘s online support group grew into a full-fledged business: Filipina Homebased Moms (FHMoms).

Tailor-fitted learning

Today, FHMoms has expanded beyond a simple support group, now offering market research services for brands looking for insights from working mothers. They also offer recruitment services, partnering with a BPO looking for call center agents among the group’s members.

But staying true to its original purpose, FHMoms is still primarily an e-learning platform for mothers, offering courses including:

– social media marketing,
– local and international e-commerce,
– photo and video editing,
– writing
– and basic SEO.

“We wanted them to choose the online course that they like,” Bertulfo said. “The idea is like it’s school where you only focus on one field, unlike other e-learning platforms that offer courses in bundles.”

“Our trainers are also mommies, so it’s more personal and they can relate [to their students],” said Bertulfo. “And our courses and platform are designed for busy moms… That’s why they like [the courses], because once they’re done with their chores at home, for example, they’re more encouraged to study.”

For those unable to take advantage of their online courses, FHMoms also does on-site training sessions.

Keeping mommies at heart

But beyond new revenue streams and the better lifestyles that come with it, Bertulfo shared that it’s the sense of pride and dignity that the members of her community—many of whom were never able to finish school—have really come to appreciate. For one member, a single mother and PWD, her life changed when she was able to secure a post as a virtual assistant. For another, her nine-year stretch of unemployment finally came to an end with a writing gig she secured through the community.

“When I started this, all I had in mind then was my officemates, my friends,” said Bertulfo, believing her personal connection with her community has been instrumental to her success. “Because of that, I was able to create a culture and environment for the community that was more genuine, that wasn’t too focused on business and money.”

“It was such a big help that my market represents who I really am. So it wasn’t hard to solve the problems because I understood them, I had experienced them, and I was able to come up with these solutions myself.”

Factory activity slide eases in May

The Philippines manufacturing purchasing managers’ index (PMI) saw a softer decline in operating conditions in May, according to IHS Markit. — REUTERS

FACTORY activity remained in contraction for a third straight month in May, but at slower pace than April’s crash, as the lockdown continued to disrupt manufacturing firms’ operations.

IHS Markit on Monday said the Philippines manufacturing Purchasing Managers’ Index (PMI) improved to 40.1 last month from April’s record low of 31.6, as “easing of measures in some regions helped the rate of contraction in production soften from April.”

“Despite the improvement, the reading still pointed to a sharp deterioration in operating conditions across the manufacturing sector, the third in as many months,” IHS Markit said in a statement.

A PMI reading below 50 signals deterioration in operating conditions compared to the preceding month, while a reading above 50 denotes improvement.

The headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).

Manufacturing purchasing managers’ index of select ASEAN economies, May (2020)

Manufacturing conditions in countries across the region all rebounded in May from the record lows recorded in April, but still remained below 50. Malaysia reported a marked improvement to 45.6 last month from 29 in April, followed by Vietnam’s 42.7, Thailand’s 41.6 and Myanmar’s 38.9.

As of press time, data for Indonesia and Singapore are not yet available.

IHS Markit attributed the muted production levels in the Philippines to lockdown measures that continued through May in some parts of the country, including Metro Manila and Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon). Other provinces shifted to a more relaxed quarantine, which allowed more businesses to reopen.

“Yet conditions have still not recovered, with restrictions in the capital and other cities broadly the same since April, in part leading to another sharp fall in new order volumes,” David Owen, an economist at IHS Markit, was quoted as saying.

“Only the lifting of measures in rural areas helped to slow the decline. Employment continued to drop amid excess capacity, further hampering demand conditions,” he added.

IHS Markit said capacity of factories was still “lower than normal” in May as companies implemented physical distancing measures. Companies were also reluctant to increase output as new orders remained weak.

“Demand for manufactured goods continued to fall during the month, with the latest decrease softer than that seen in April but still the second-sharpest since the series began in January 2016,” it said.

Firms reported weaker sales here and abroad due to the lockdown, forcing companies to cut back buying activities and reduce inventories.

“That said, the drop in inventories of raw materials and semi-finished items eased as some manufacturers raised holdings in anticipation of a nationwide lifting of lockdown measures,” IHS Markit said.

With travel bans and checkpoints around the country, deliveries of materials continue to be delayed with lead times rising “substantially and for the tenth month running.”

Employment fell for the fourth time in five months in May, as companies operated with only skeletal workforce.

“The fall in new orders meant that capacity to complete backlogs remained sufficient, although outstanding work dropped only marginally and at the softest pace in over four years,” it added.

IHS Markit noted the manufacturers reported a rise in input costs in May due to more expensive raw materials, although lower fuel prices cushioned the impact.

“Price pressures began to inflate in May after marked decreases during March and April. Raw material prices rose slightly as reductions in global supply started to outweigh weaker demand and lead to difficulties in acquiring inputs,” Mr. Owen said. “Output prices also increased, but firms tried to keep charge inflation low, hoping this would encourage an improvement in sales once demand conditions have returned to normal.”

IHS Markit said it saw improvement on the “degree of sentiment regarding output in a year’s time” as firms were encouraged on partial lifting of lockdown and cases of coronavirus disease 2019 (COVID-19) “being kept under control.”

“Firms hoped that the introduction of new products would also drive activity higher,” it said.

According to think tank Capital Economics, the PMI readings across Emerging Asia, which includes the Philippines, may “not accurately reflect the change in industry conditions last month, but they are still indicative of the fact that output remains very depressed.”

Meanwhile, Capital Economics said in a note that conditions in the manufacturing sector “worsened from April to May” as readings were below 50.

“While PMI readings are unusually hard to interpret this month, the bigger picture remains the same — the region’s manufacturing sector is in a deep recession. Industry is likely to have seen an initial jump from the easing of lockdown restrictions. And things are likely to continue improving very gradually over the coming months as external demand recovers,” the think tank’s economist Alex Holmes said.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the improvement in factory activity in May is still a “welcome sign” that output and new orders rebounded from the low April levels, which could signal a “start of the recovery and one step towards expansion.”

“With some parts of the country allowed to restart limited manufacturing in mid-May, output improved from April’s lows where almost 70% of the economy was shuttered as we sheltered in place. New orders also picked up, offering us clear indications that June activity will post a second month of improvement as lockdown measures were eased in NCR, hopefully in expansion territory as we look to salvage the year,” Mr. Mapa said via e-mail.

Capital Economics said output will likely still settle below normal levels “for many months to come” as demand both locally and globally will remain “very depressed.” — Beatrice M. Laforga

Manufacturing purchasing managers’ index of select ASEAN economies, May (2020)

FACTORY activity remained in contraction for a third straight month in May, but at slower pace than April’s crash, as the lockdown continued to disrupt manufacturing firms’ operations. Read the full story.

Manufacturing purchasing managers’ index of select ASEAN economies, May (2020)

Gov’t adds more stations to Metro Manila subway

By Arjay L. Balinbin, Reporter

THE Metro Manila subway will now have 17 stations, after the Transportation department decided to expand the original plan to include more stations.

Transportation Assistant Secretary Goddes Hope O. Libiran told BusinessWorld the new stations will be located in East Valenzuela, Lawton, Senate, Ninoy Aquino International Airport Terminal 3 and Bicutan.

She said the Lawton and Senate stations have replaced the Cayetano Boulevard station, located in Taguig, in the initial plan. The new Senate complex, located in Fort Bonifacio, is expected to be completed by July 2021.

The East Valenzuela station will be located at the subway’s depot site in Barangay Ugong, Valenzuela, Ms. Libiran said.

Bicutan will be the location of a “common station” for both the Metro Manila Subway and the proposed Philippine National Railways Calamba line under the North-South Commuter Railway, she said.

The subway project’s existing stations include Quirino Highway, Tandang Sora, North Avenue, Quezon Avenue, East Avenue, Anonas, Katipunan, Ortigas (previously called Ortigas North), Shaw (previously called Ortigas South), Kalayaan Avenue, Bonifacio Global City, and FTI.

Asked if the added stations will need the approval of the National Economic and Development Authority (NEDA), Ms. Libiran said: “We’re going back to NEDA after the JICA (Japan International Cooperation Agency) Design Team finishes the updated designs and cost.”

Ms. Libiran said the NAIA Terminal 3 station will no longer require the go signal from the NEDA because when its board approved the subway project in September 2017, “one of the conditions was to include an airport station.”

The Metro Manila subway is one of the administration’s flagship projects funded by official development assistance (ODA) from Japan.

As the coronavirus pandemic disrupted all economic activity, the government extended the deadline for submission of bids for the contracts to provide train sets, electrical and mechanical (E&M) systems and track works that are part of the subway project’s phase 1.

The first phase also covers the first three underground stations, tunnels and depot construction, depot equipment and buildings.

According to a general bid bulletin from the Procurement Service of the Department of Budget and Management (DBM-PS) posted on the Transportation department’s website, the bids submission deadline for the rolling stock package has been extended to June 30 from March 17.

Bids for the train sets should be submitted along with a ¥600-million bid security at the DBM-PS office in Manila.

For the E&M systems and track works, the new deadline for submission of bids, along with an ¥800-million bid security, has been moved to July 17 from March 24.

In January, Transportation Undersecretary for Railways Timothy John R. Batan said the contracts will be awarded to the winning bidders “by the middle of this year.”

The government broke ground for the first three stations in February last year after the Transportation department signed a P51-billion deal with the Shimizu Joint Venture, which consists of Shimizu Corp., Fujita Corp., Takenaka Civil Engineering Company Ltd. and EEI Corp.

The Philippines and Japan signed in March 2018 the first tranche of the P355.6-billion loan for the project.

In February, BusinessWorld reported four Japanese firms, namely: Sumitomo Corp., Mitsubishi Corp., Mitsui & Co. Ltd., and Marubeni Corp., purchased bidding documents for the contract to provide E&M systems and track works.

Two Philippine-based firms — construction giant D.M. Consunji, Inc. and KDDI Philippines Corp. — also bought bidding documents for the E&M systems and track works contract package.

Hitachi Ltd., along with Sumitomo and Mitsubishi, bought bid documents for the design, execution and completion of 30 train sets consisting of eight electric multiple units or a total of 240 train cars.

Sumitomo is one of the maintenance service providers of Metro Rail Transit Line 3 (MRT-3), along with Mitsubishi Heavy Industries Engineering, Ltd. and TES Philippines, Inc.

D.M. Consunji has been involved in various railway projects in the country, which include the Light Rail Transit (LRT) Line 1 North Extension, North-South Commuter Railway (NSCR), and LRT Line 2 East Extension with Marubeni.

Marubeni’s other projects in the country include the improvement and modernization of Commuter Line South Project and the first and second phases of the LRT-1 capacity expansion project.

The contracts for the E&M systems, track works and rolling stock will go through international competitive bidding in accordance with JICA procedures.

Based on the Special Terms for Economic Partnership of Japanese ODA Loans, the primary contractor should be from Japan, while sub-contractors can be from other countries.

The government unveiled in February parts of the Japanese-supplied tunnel boring machines which will be used to build the country’s first subway line.

The Transportation department targets to begin tunneling works within the year.

While the public will have to wait until 2025 for full operations of the 17-station subway, the government targets partial operations — covering the first three stations — by 2022.

Big business scrambles for revival plan as coronavirus rewrites its future

By Denise A. Valdez, Reporter

WHILE the economic consequences of the global coronavirus crisis remain unclear, this black swan is shaking up both corporate and consumer behavior in a big way. It has precipitated massive changes across industries, showing that not even the world’s corporate giants are immune to the pandemic.

In the Philippines, a number of blue-chip companies have cut capital spending and suspended expansion plans this year, some of them laying off workers to stay afloat. Some of these big companies were forced to shift their focus to their main businesses, ruling out investments in new ventures.

While big companies make up less than 1% of Philippine enterprises, they provide about 3.33 million jobs, or more than a third of the country’s workforce, based on 2018 data.

“I think it is best to be financially prudent,” Manuel V. Pangilinan, chairman of the MVP Group of Companies that has interests in water, power, telecommunications, tollways and healthcare, said at an online media briefing last month.

“We believe that the focus of management has got to be on the existing operations and existing business portfolio of Metro Pacific Investments Corp. (MPIC),” he said, adding that MPIC had “no energy” to invest in new projects, especially overseas.

MPIC, the listed investment company of the MVP Group, is halving its 2020 capital expenditure to P80 billion as it cuts investments in new ventures such as hospitality and logistics. Earnings plunged by 47% in the first quarter from a year earlier to P1.9 billion after the main Philippine island of Luzon was locked down in mid-March to contain the pandemic.

President Rodrigo R. Duterte suspended work, classes and public transportation, ordering Filipinos to stay home except to buy food. He extended the strict quarantine twice for the island and thrice for Metro Manila, where infections are mostly concentrated.

The metro lockdown has been relaxed since June 1 and some businesses have been allowed to reopen with minimal workforce.

“We all say let’s get to the next few months and see where things shake out, because the whole world is second-guessing what recovery may look like,” MPIC Chief Finance Officer David J. Nicol said by telephone on May 24. “Everybody talked of V-shaped and U-shaped recovery, and now I see people talking about a long L. You know, none of us know.”

Fastfood giant Jollibee Foods Corp., which has given McDonald’s Corp. a run for its money in the Philippines, is cutting capital spending to P5 billion from P14 billion.

Property developer Ayala Land, Inc. told stockholders on April 22 it was reducing spending to P70 billion from P110 billion, while port operator International Container Terminal Services, Inc. told the stock exchange on April 24 it was trimming its capex to $100 million from $400 million.

“One thing that we’ve realized during this crisis after some quick self-reflection is, it is very difficult to plan long-term in an environment like this,” Ayala Corp. Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala told stockholders at a virtual meeting on April 24.

NO PLAYBOOK
Earnings of Ayala Corp., the parent company of Ayala Land that has interests in property, banking, telecommunications and water utility dropped by 17% to P6.7 billion in the first quarter after profit at its property, banking and industrial segments fell.

“There is no existing playbook for this kind of situation,” Mr. Zobel said. “We will be monitoring consumer behavior, market behavior, industry regulatory issues and just make an assessment of how the world has changed for us.”

Cebu Air, Inc., which was forced to stop operating budget carrier Cebu Pacific on March 19 due to travel restrictions worldwide, is likewise preparing for a new environment once the situation stabilizes and lockdown measures are eased.

“We are assessing our recovery plan, as the situation remains fluid,” Alexander G. Lao, vice- president for commercial planning at Cebu Air, said in an e-mail. “For now, we are planning for a gradual introduction of our network, but it depends on how things progress.”

He said one key challenge is how travel patterns would change after the quarantine. “While we believe leisure travel will rebound, some other segments will change. Business travel will probably be less as people get used to online meetings.”

The airline operator posted a net loss of P1.18 billion in the first quarter after making a profit of P3.36 billion a year earlier. Passenger revenue went down by more than a quarter to P11.39 billion.

The airline industry has sought support from the government through emergency credit lines, waiver of fees and wage subsidy. Lawmakers have drafted measures including capital infusion to support some industries such as airlines and tourism.

Cebu Air parent JG Summit Holdings, Inc. cut its capital spending this year to P58 billion from P82 billion.

During a stockholders’ meeting on May 14, JG Summit President and CEO Lance Y. Gokongwei said Cebu Air was renegotiating payment and delivery schedules for its aircraft orders. Before the pandemic, the company had planned to replace its older aircraft and expand its fleet to 83 aircraft by 2022 from 75 last year.

Meanwhile, Aboitiz Equity Ventures, Inc. has also cut its spending to P47 billion from P73 billion.

“During the Asian financial crisis, our decision to remain financially prudent (we did not hold any debt) bid well for the company,” said Sabin M. Aboitiz, president and CEO at the listed holding company that has interests in power, banking, food, infrastructure, property and construction.

“We expect the same approach to benefit us as we face the COVID-19 crisis,” he said in an e-mail.

NEW NORMAL
Aboitiz Equity’s net income fell by 42% to P2 billion last quarter, dragged by a 43% drop in contributions from its power unit.

During the pandemic that has sickened more than 18,000 and killed almost a thousand people in the Philippines and in which as many as 10 million people could get laid off, workers at bigger companies are more likely to keep their jobs, Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc. said in a May 21 e-mail.

“Since these companies are huge and well-capitalized, they are poised to overcome the challenges of an economic crisis due to the pandemic, and they can even lend direct support to government efforts directly related to the containment of the virus,” he added.

Cutting capital spending may be the only way for companies to stay afloat, Jervin S. de Celis, a trader at Timson Securities, Inc. said in a mobile phone message. “While this may negatively affect the labor and employment conditions in the country for now, these companies have to survive so they can hire back people when the pandemic is over.”

Talks of a “new normal” have never left boardrooms, but Mr. Asuncion thinks some sectors will find it difficult to adjust until a COVID-19 vaccine is found.

Those offering essential goods and services are expected to recover within months, while nonessential ones such as travel and tourism may take longer.

The Philippine Stock Exchange index (PSEi) has remained volatile, trading between 5,400 and 5,900 since April.

The bourse has since recovered after falling to a record 4,623.42 points on March 19, but foreign investors have been net sellers for 49 out of 52 days from March 12 to May 29.

“The stock market has not digested the full information and may have to wait until earnings results come out,” Mr. Asuncion said. “It will have to adjust soon enough, taking into account potential losses, spending and earnings decline,” he added.

The stock index is likely to end the year at 6,200 to 6,600 points, according to estimates from brokerages BPI Securities Corp. and First Metro Investments Corp.

Mr. Nicol of MPIC said it might take a while before the company goes back to the level it was at when the year started.

“There could be a very sharp contraction in the second quarter,” he said. “The third and fourth quarters will still be below where we were last year. But there will be a distinct uptick trajectory each quarter.”

House passes P1.3-trillion stimulus bill on 2nd reading

By Genshen L. Espedido, Reporter

THE House of Representatives on Monday approved on second reading a P1.3-trillion stimulus package that the government hopes will boost economic growth amid the coronavirus crisis.

Under House Bill 6815 or the Philippine Economic Stimulus Act (PESA), P568 billion will be allocated in 2020 for mass testing (P10 billion); wage subsidies (P110 billion), cash-for-work program (P30 billion); assistance to students (P15 billion); loans for micro, small and medium enterprises or MSMEs (P50 billion); zero interest loans by Land Bank of the Philippines and Development Bank of the Philippines (P50 billion) and loan guarantees (P40 billion).

This year’s allocation also includes assistance to various sectors such as MSMEs (P10 billion); tourism (P58 billion); industry and services (P44 billion); transportation (P70 billion); and agri-fishery (P56 billion) and funding for the National Development Corp (P25 billion) to “minimize permanent damage to the economy.”

For 2021, P80 billion will be allocated for further mass testing (P10 billion), loans for MSMEs (P25 billion), loan guarantees (P20 billion) and additional funding for the National Development Corp. (P25 billion).

Meanwhile, a P650-billion budget for the “Build, Build, Build” program will be spread over three years starting 2021 covering infrastructure projects supporting universal health care, education, and food security.

An estimated 4.1 million employees from the MSMEs are expected to benefit under the economic stimulus package.

The bill also requires the National Economic and Development Authority (NEDA) to submit to Congress a long-term plan for building economic resilience within six months after the lifting of the various forms of quarantine. It also creates an Economic Stimulus Board (ESB) to identify the components of the fiscal stimulus package, and monitor the delivery of each intervention.

A joint Congressional oversight committee will be created to monitor the implementation of the stimulus package. The committee will be comprised of the co-chairpersons of the House economic stimulus cluster, and chairpersons of the Senate committees of Economic Affairs, Ways and Means and Finance.

The bill also authorizes the President to reallocate and realign the General Appropriations Acts of 2019 and 2020, and allocate cash, funds and investments held by any government-owned or -controlled corporations or any national government agency to provide funding support.

The Secretary of Finance is also authorized to direct the National Treasurer to borrow in the form of bonds and loans to fund the provisions of the bill.

“What we badly need is fiscal stimulus to ensure that liquidity is not trapped. With more government spending, business confidence can return, animal spirits are awakened, and bullish markets can eventually return. Kailangang kumilos ang gobyerno para siguradong makautang ang maliliit na negosyo at gamitin ang utang sa tamang paraan (The government has to act to ensure that small businesses can get loans and use these in the right way),” Marikina Rep. and co-chair of the Defeat COVID-19 Committee’s economic stimulus cluster Stella Luz A. Quimbo said during her sponsorship speech on May 27.

During the House plenary, the measure was amended to require the government to give preference to products, materials and supplies made in the Philippines when making procurements to implement relevant provisions of the bill.

The bill was also amended to define mass testing as “testing of all individuals…who are at high-risk of contracting COVID-19 infections.”

The bill will still have to be approved on third reading, before it will be transmitted to the Senate.

Meanwhile, the Joint Foreign Chambers of the Philippines (JFC) urged Congress to approve the PESA bill as soon as possible.

“We encourage the House plenary to approve the historical measure on 2nd Reading on June 1 and 3rd Reading on June 4 before its scheduled recess. The Senate is considering six stimulus bills given the very large amounts being considered and the forthcoming recess we ask the Congress to approve the final legislation soon after resuming session in late July to provide very needed funds for economic recovery,” the JFC said in a statement.

The statement was signed by the American Chamber of Commerce of the Phils., Inc., Australian-New Zealand Chamber of Commerce Phils., Inc., Canadian Chamber of Commerce of the Phils., Inc., European Chamber of Commerce of the Phils., Inc., Japanese Chamber of Commerce & Industry of the Phils., Inc., Korean Chamber of Commerce of the Phils., Inc. and the Philippine Association of Multinational Companies Regional Headquarters, Inc.

Meanwhile, the House of Representatives also approved on 2nd reading House Bill 6865 which seeks baseline COVID-19 testing for the vulnerable members of society.

It also approved on third and final reading House Bill 6505 which seeks to grant full insurance coverage to all qualified agrarian reform beneficiaries of the Comprehensive Agrarian Reform Program.

Phoenix swings to loss in volatile market

By Adam J. Ang

PHOENIX Petroleum Philippines, Inc. (Phoenix) reported a P215 million net loss in the first quarter, reversing its P415 million net income recorded in the same period in 2019, as overall revenues and volume declined on volatility in the oil market.

In the first three months of 2020, the fuel company saw its total volumes down 5% despite “strong” growth in its retail and liquified petroleum gas (LPG) segments, while its overall revenues went down by 9% as average selling prices followed that of the decline in global oil prices.

“We were not spared but we were able to navigate the downturn better because of our earlier investments in strategic, higher-margin areas such as retail and LPG,” Phoenix Petroleum Chief Executive Officer Dennis A. Uy said in a statement.

The listed independent oil firm noted a 39% increase in LPG volumes in the January-March period, while its retail volume also went up by 9%, building on the progress of its network expansion last year.

“Our portfolio today is more diversified, with LPG particularly thriving in this pandemic. From a non-essential item in the kitchen, LPG became an essential household product, especially during the Enhanced Community Quarantine (ECQ),” Mr. Uy said.

“Despite the healthy performance of its LPG and Retail segments, the downturn in Commercial business and the unfavorable global oil environment pushed [Phoenix] into reporting a loss of P-215mn for the quarter,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.

By March, Phoenix runs 660 fuel stations in the country.

The oil company’s first-quarter performance was “challenged” by the Taal Volcano eruption in January and the global coronavirus disease 2019 (COVID-19) pandemic, along with the government’s lockdown measures, according to Philstocks Financial, Inc. Senior Research Analyst Japhet Louis Tantiangco.

“The said factors have led to lower oil demand as seen in the decline in the sales volume of the company. This, coupled with the lower average selling prices, led to a 9% decline in consolidated revenues,” he said.

The company has kept its inventory levels to half of terminal capacity, alleviating the burden on its working capital.

It has cut cash requirements by P2.3 billion this year, P1.5 billion of which is from capital expenditure reduction and the remaining P800 million is from savings from marketing, advertising, and travel, as it shifted to digital channels.

During Phoenix’s annual stockholders’ meeting last Friday, shareholders approved the company’s initial P57 million capital provision for its upcoming road transport business unit.

They also supported its P4.9-billion investment in Duta, Inc., Phoenix’s property holding subsidiary, over the next three years.

“Moving forward, with the longer quarantine periods in the [second] quarter, together with the depressed international oil prices including the plunge in April, we may see further weakness in [Phoenix’s] upcoming financial results,” Mr. Tantiagco said.

Separately on Monday, Phoenix named Henry Albert R. Fadullon as its new president, a position previously held by the company’s founder Mr. Uy.

Mr. Fadullon has served as Phoenix’s chief operating officer since 2017. Mr. Uy will become the chairman of the board and chief strategy officer.

Phoenix also sought to amend its corporate term to a perpetual existence from 50 years previously.

On Monday, shares in Phoenix fell by 1.91% to close at P11.28 each.

House panels want Lopez in ABS-CBN franchise hearings

By Genshen L. Espedido, Reporter

TWO panels at the House of Representatives are calling on ABS-CBN Corp.’s Chairman Emeritus Eugenio Gabriel L. Lopez III to attend the next hearings on the franchise renewal of the media network.

“I saw the agenda and I think we will discuss the issue of citizenship. I think there are questions that are personal to him. I would not know how to deal with this, Mr. Chair, if he is not present,” Deputy Speaker Rodante D. Marcoleta said during the joint hearing of the House committees on legislative franchises, and good government and public accountability on Monday.

After Mr. Marcoleta’s manifestation, Palawan Rep. and House committee on legislative franchises chair Franz E. Alvarez ordered the secretariat to send an invitation to Mr. Lopez. The two committees will convene again on Wednesday morning to resume their deliberations on the network’s franchise.

ABS-CBN Chief Executive Officer Carlo Joaquin Tadeo L. Katigbak said that Mr. Lopez is a natural born Filipino citizen given that his parents are both Filipinos.

“Totoo po na may US passport si Mr. Lopez. Ito ay dahil ipinanganak siya sa America, at sa batas ng America, kahit hindi Amerikano ang magulang mo, kapag ipinanganak ka sa US, automatic po na may hawak ka rin na American citizenship,” he said during the joint hearing.

(It’s true Mr. Lopez has a US passport. This is because he was born in America, and under its laws, even if your parents are not American, if you’re born in the US, you automatically hold American citizenship.)

“The fact that he holds a US passport does not negate in any way his Filipino citizenship from birth,” Mr. Katigbak added.

Meanwhile, Solicitor General Jose C. Calida said he was not at “loggerheads” with Congress on the issue of the media network’s franchise.

“I only cautioned the NTC (National Telecommunications Commission) of its possible encroachment on the legislative power in issuing a provisional authority without a law authorizing such action. I never mentioned the name of Speaker (Alan Peter S.) Cayetano and any congressman in my advisory letter to the NTC or in any of my subsequent press releases,” he said.

The two House panels called on Mr. Calida last week to join the hearings on ABS-CBN’s franchise, noting that they would “resort to compulsory processes” if he failed to join the succeeding meetings.

During the hearing of the House committee on legislative franchises on March 10, the NTC told lawmakers that it would issue a provisional authority allowing ABS-CBN to operate while Congress hears its franchise renewal.

On May 5, the commission issued a cease-and-desist order against the media network instead, forcing ABS-CBN to stop its broadcast operations.

Fruitas plans debt cut, holds back foodparks

Fruitas Holdings, Inc. (Fruitas) is postponing plans to expand its foodpark business to invest P25 million from its initial public offering (IPO) proceeds in debt repayment.

In a stock exchange disclosure Monday, the food and beverage kiosk operator said its board of directors approved tweaking the previously announced allocation of its P820 million proceeds from last year’s public offer.

The P150-million allocation for debt repayment, which was already disbursed in 2019, will be increased to P175 million as it takes the budget originally allocated for foodpark expansion.

“Since there is no immediate funding requirement for its foodpark business, the company’s board decided to re-allocate the funds to further reduce the debt level of the group, which will also reduce its interest expense,” it said.

Allocations for other projects will remain as is: P470 million for store network expansion and improvement, P40 million for commissary expansion, and P135 million for acquisitions and introduction of new concepts.

Specifically, P147 million of the P470 million budget for store network expansion will be disbursed to Fruitas subsidiaries through new equity or advances this year. “While the subsidiaries await full deployment of the funds, this will be used by the subsidiaries as working capital,” it said.

The P40-million budget for commissary expansion will be used to upgrade Negril Trading commissaries, the buko water commissary in Quezon City and a Cebu commissary within the year. Fruitas also previously said it bought a property in Sasa, Davao City to be used as office and warehouse.

The P135-million budget for acquisitions and introduction of new concepts will be disbursed from 2020 to 2021. Fruitas has so far completed four acquisitions since its IPO in November.

The company earlier said it was setting aside P270 million for capital expenditures this year. “Fruitas is cognizant of potential changes in the market and may update and/or re-allocate its 2020 capex budget accordingly,” it told the stock exchange on May 29.

“The store network expansion and store improvement program for 2020 will cover establishment of new stores, and improvement of existing stores, including expansion or conversion of some stores into potential CocoDelivery hubs. This also includes an allotment for the purchase of delivery vehicles to support the expanded network and reach our customers more efficiently,” the company added.

Shares in Fruitas at the stock exchange ended flat on Monday at P1.25 apiece. — Denise A. Valdez

Shakey’s net profit falls 35% on store closures

SHAKEY’S Pizza Asia Ventures, Inc. (Shakey’s) posted a 35% drop in net income for the first quarter as operations in its restaurant chain were halted by the Luzon-wide lockdown in March.

In a statement Monday, the restaurant chain operator said its net income fell to P114 million in the three-month period as gross revenues ended flat at P1.83 billion.

It noted it was recording a 21% systemwide sales growth in the first two months of the year, but it dropped in the following month with the implementation of quarantine restrictions in relation to the coronavirus disease 2019 (COVID-19) pandemic.

Only 9% of Shakey’s network of 290 stores were operational in the second half of March, and these stores were only servicing delivery and carry-out customers. Shakey’s ended the quarter with systemwide sales of P2.3 billion.

“The temporary closure of a significant number of our stores, combined with the impact of operating leverage and various fixed costs, dampened our bottom line during the period. We expect the second quarter to be worse, possibly the most challenging I’ve experienced in my career, as we feel the full effects of limited operations and incremental costs due to the crisis,” Shakey’s President and Chief Executive Vicente P. Gregorio was quoted in the statement as saying.

But he noted the company has made efforts to gradually reopen its store network. Some 256 stores or 91% of Shakey’s network have already resumed operations.

“We are grateful that our multi-channel and multi-format approach…has allowed us to weather through the challenges… We were able to re-open stores located outside malls early into the quarantine period, and our existing delivery and carry-out platforms gave us a strong base from which to build and support the growth in in-home food consumption,” Mr. Gregorio said.

“All these, I believe, put Shakey’s in a good position to bounce back, macro environment permitting,” he added.

Shakey’s stores that are not located in malls make up 46% of its store network. Sales from delivery and carry-out services made up 37% of its total sales for the period.

“We are… taking a more prudent approach over the next few months… In the meantime, we will continue to enhance and invest in existing delivery, digital, and carry-out platforms — building on what we have, as well as introducing new and exciting innovations,” Mr. Gregorio said.

Shares in Shakey’s at the stock exchange grew 27 centavos or 4.66% to P6.07 each on Monday. — Denise A. Valdez

AllHome doubles 2019 net income to P1.1 billion

VILLAR-LED AllHome Corp. (AllHome) doubled its net income in 2019 to P1.1 billion as revenues surged on the back of an aggressive store expansion.

In a statement Monday, the listed home development retailer said its 2019 performance marked a banner year for the company, as revenues shot up 68% to P12.1 billion.

“Together with AllHome’s debut in the stock market, 2019 was a milestone for the company also in terms of operations as we registered strong growth in both topline and bottomline numbers… We are very pleased with the company’s solid performance in achieving our full year target,” AllHome Chairman Manuel B. Villar, Jr. said in the statement.

The company attributed its robust performance last year to the opening of 22 new stores across the Philippines. This raised AllHome’s total assets to 45 stores, comprising 22 large mall-based, 10 large free-standing and 13 specialty stores.

AllHome President Benjamarie Therese N. Serrano said the company’s plan is to introduce new store formats to expand AllHome’s customer base.

“We will launch the first phase of AllHome which will be carrying majority of our Hard categories, to areas where it’s still in the early stage of housing construction with a plan to eventually expand it to a regular AllHome once home buyers ‘start to move-in’,” Ms. Serrano said.

AllHome said the coronavirus disease 2019 (COVID-19) pandemic has been posing a threat to its supply chain. But it said the proceeds from its stock market listing last year gives the company a layer of financial security to continue store expansion.

“We believe that the home improvement industry will bounce back as soon as the lockdown is lifted as there will be pent-up demand after staying at home for almost three months,” AllHome Vice-Chairman Camille A. Villar said.

AllHome has started reopening its store network as quarantine restrictions have started to ease. But as the COVID-19 pandemic still lingers, it will be maintaining safety protocols in stores such as requiring face masks and temperature checks and maintaining physical distancing of one to two meters for customers.

The company has also opened an online shop to accommodate customers without having to go to its physical stores.

Shares in AllHome at the stock exchange fell five centavos or 0.93% to P5.31 each on Monday. — Denise A. Valdez

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