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PHL recovery seen lagging region due to high new-infection levels

THE Philippine economic recovery is expected to lag the region due to its poor performance in containing the coronavirus outbreak, Oxford Economics said.

In a Research Briefing issued Friday, Oxford Economics said some Asia- Pacific countries are “moving in the right direction” while others like the Philippines are in a “more precarious” situation.

“We expect other APAC countries, that have made less progress with COVID-19 containment, to lag the upturn,” according to the briefing note, “Asia Pacific: Mixed progress towards recovery from COVID-19.”

It said the Philippines “has been struggling” after recording a growing number of cases.

The note updates a May 12 report in which Oxford Economics concluded that countries that had “convincingly contained” the COVID-19 outbreak could see workplace mobility bouncing back close to normal levels, or would “move in that direction.”

“We expected these economies to lead the economic recovery,” it said, noting that economies where workplace mobility is picking up as restrictions eased include China, South Korea, Taiwan, Hong Kong and Vietnam while those “moving in that direction” are Australia and Thailand.

“The situation is more precarious elsewhere. After having reported a relatively low number of new daily cases for a long time, the Philippines has been struggling with sharply rising caseloads since late May,” it said.

It said the “200-300” daily cases were “relatively modest” laregly due to the strict lockdown in Luzon while the spike in new cases reported by the end of May could be partly due to easing lockdown restrictions earlier that month in some parts of the country.

“The government has also ramped up both its testing capacity and the actual number of tests carried out,” it said.

“The path to sustainable economic recovery is thus more challenging and exposed to risks in these four countries,” it said, saying that the outbreak has not yet been contained in Singapore and Indonesia while infections continue to rise in India as well as in the Philippines. — Beatrice M. laforga

Auto sales plunge 66% in March after dealerships shut down

The automobile industry said auto sales by volume fell 66% year-on-year in March after the Luzon lockdown shuttered car dealerships over the second half of the month.

According to the joint report of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) issued Friday, sales volume in March was 11,029 vehicles, against the year-earlier total of 32,173 units.

Month-on-month, sales volume fell 63%.

Dealerships were shut down startingy mid-March after the government imposed enhanced community quarantine (ECQ) over Luzon, CAMPI President Rommel Gutierrez said in a statement.

“The impact of the COVID-19 pandemic was felt as early as March. We will continue to assess further effects as the community quarantine continues to be in place,” he added.

Volumes recorded in March volume brought year-to-date sales to 64,542 units, down 24%.

Commercial vehicles sold in March totaled 7,879, down 64% from February.

Toyota Motors Philippines, Inc., which had a posted a 39% market share in March, reported a 23% year-on-year decline in volume to 25,696 units.

“Indeed, challenging times ahead for the industry. For now, the industry remains hopeful for the containment of the virus at the soonest possible time while being resilient amid this crisis,” Mr. Gutierrez said. — Adam J. Ang

LGUs, pop-up/mobile markets distribute P5.8 billion worth of produce

LOCAL government units (LGUs), farmers’ cooperatives and associations, and community leaders bought P5.8 billion worth of farm and fishery products that were included in food relief packs or sold in temporary markets to address disruptions in the food supply, the Department of Agriculture (DA) said.

“We commend more than 750 Kadiwa ni Ani at Kita outlets and communities, and 425 LGUs that procured P3.45 billion and P2.38 billion, respectively, of various products from more than 15,000 individual farmers and fishers,” Agriculture Secretary William D. Dar said in a statement.

Mr. Dar said almost P2 billion worth of palay and rice were bought by LGUs to give away to their constituents.

Their produce purchases included P193 million worth of poultry, livestock, and meat products; P94.6 million worth of vegetables, fruit, and other crops; P92.3 million worth of fish and aquaculture products; and P870,000 worth of farm inputs such as corn and seed.

The DA said the LGUs bought directly from 277 farmers and 100 farmers’ cooperatives and associations.

In addition, 14,864 individual farmers and 3,156 farmers’ groups sold 161 million kilograms of assorted farm and fishery produce worth P3.45 billion, through the DA’s Kadiwa outlets, barangays, and communities.

According to the DA, the Kadiwa marketing program has benefited around 1.3 million households nationwide, adding that the products sold under the program are cheaper than those sold in public markets.

“The increasing sales of Kadiwa shows that more farm and fishery producers are participating in our cause to address the food requirements of consumers,” Mr. Dar said. — Revin Mikhael D. Ochave

NEA loans to rural utilities hit P293-M in first 5 months

The National Electrification Administration (NEA) said it released around P293 million worth of loans to utilities operating in the countryside during the first five months of 2020.

Some P135.53 million suported capital expenditure projects and working capital requirements of electric cooperatives.

Meanwhile, calamity loans extended to 12 power cooperatives totaled P103.08 million.

These were used to rehabilitate distribution lines and facilities of utilities in Mimaropa (Mindoro, Marinduque, Romblon, and Palawan), Bicol, and Eastern and Western Visayas Regions hit by typhoons Tisoy and Ursula in 2019.

Northern Samar Electric Cooperative, Inc. availed of the largest calamity loan worth P20.51 million, followed by Sorsogon I Electric Cooperative, Inc., which borrowed P18.35 million.

The loans run over 10 years with a one-year grace period and interest of 3.25%. — Adam J. Ang

BSP ‘extreme scenario’ for banking system is 10% rise in provisions

The Bangko Sentral ng Pilipinas (BSP) said its “extreme scenario” for the banking system is a 10% rise in loan-loss provisions in the wake of the pandemic, which it expects major banks to survive.

In a working paper, “COVID-19 Exit Strategies: How Do We Proceed,” the BSP said simulations show that larger banks can weather the “extreme scenario” of a 10% rise in loan loss provisions alongside write-offs of interest income and income from fees and commissions over four months.

It said it expects the banking system to be “destabilized” if loan loss provisions rise 20%, bringing many insttutions below the regulatory minimums for Capital Adequacy Ratio (CAR).

“Since total loans of the banking system account for 59% of its total resources as of end-December 2019, additional loan loss provisions on total loans would significantly pull post-shock CARs to below the minimum requirement,” it said.

The banking industry has an overall CAR of 15.4% and 16.4% on stand-alone and consolidated bases, respectively, according to BSP data. The minimum regulatory requirement is 10%.

The BSP said that liquidity support and regulatory relief measures will still be put in place but subject to review as the country moves into more permissive forms of quarantine.

Since February, the BSP has rolled out regulatory relief for financial institutions to help them deal with the impact of the African Swine Fever outbreak and the coronavirus disease 2019 (COVID-19) pandemic. These measures included authorization to stagger the booking of allowances for credit losses, a waiver of penalties for legal reserve deficiencies, and clearance to defer the classification of some accounts in default as past due.

The BSP has since tweaked reserve rules to allow banks to comply by counting as reserves their lending to small businesses, and eased the credit requirements for micro, small, and medium enterprises (MSMEs).

“The withdrawal of measures to ease financing constraints would be contingent on the ability of the financial institutions to sufficiently supply credit to the credit-worthy corporate sector,” it said.

The central bank said strains on the financial system will become more apparent now that economic activities have resumed.

“Postponement or cancellation of investment and expansion decisions, reduction in workforce and work hours, and changes in the capacity to pay off creditors may have adverse balance sheet and employment effects,” it said.

“Given interlinkages across sectors, these may have significant financial stability implications,” it added. — Luz Wendy T. Noble

DBP Q1 net profit falls 7% amid more than 30% rise in lending

Development Bank of the Philippines (DBP) said net profit fell 7% year-on-year in the first quarter after the state-owned bank raised its provisioning level for possible loan losses and mobilized its resources to lend more in aid of the government’s economic revival program.

In a statement Friday, DBP President and CEO Emmanuel G. Herbosa did not project the extent of the expected loan losses, saying only that the bank’s net profit of P1.46 billion in the three months to March was accompanied by a 30.6% increase in its loan portfolio to P371 billion.

Mr. Herbosa said 45% of its portfolio funded the infrastructure and logistics sector, while 20% was allocated to social services while 11% supported environmental projects.

Lending to micro, small and medium-sized enterprises (MSMEs) totaled P27 billion.

He said the bank’s 30 lending units were “aggressive” in handing out loans, as the government mobilized state-owned banks to extend support to battered companies that could not operate during the lockdown.

Gross income rose 9.5% to P8.45 billion in the three months, while deposits rose 25.5% to P559.68 billion.

The capital adequacy ratio was 13.03% at the end of March.

Assets rose 20% year-on-year to P763.24 billion at the end of the quarter.

“DBP is currently reviewing its financial targets in light of this global pandemic. The bank is calibrating its programs to support the national government’s efforts to stimulate the economy after quarantine restrictions were relaxed,” Mr. Herbosa said in the statement.

The government’s economic team proposed to add at least P50 billion to the capital of state-owned banks including DBP and Land Bank of the Philippines. They are being positioned as wholesale banks, buying up loans from small banks to clear their books and make room for more lending.

“We are ready to provide the necessary funding support for key businesses and industries in order to stave off possible recessional effects of this pandemic,” Mr. Herbosa said.

Currently, the bank has 129 branches, 11 branch-lite units and 837 automated teller machines. — Beatrice M. Laforga

Metrobank raises P10.5-billion from 3% notes

Metropolitan Bank & Trust Company said it raised P10.5 billion from a peso-denominated note issue paying out 3% per annum, noting that the offer period was cut short due to strong demand.

The 1.25-year issue pays out quarterly, the bank said in a filing with the bourse Friday.

“Initial offer period of June 3 to 16 was cut short and closed within a day on strong investor demand from both institutional and retail clients, indicating the market’s continued confidence in the bank amidst the current economic situation,” Metrobank said.

The offering represents the sixth tranche of Metrobank’s P100 billion bond and commercial program.

The notes are set to be listed at the Philippine Dealing and Exchange Corp. on June 24.

Joint lead arrangers for the issue were First Metro Investment Corp., ING Bank-NV Manila, and Standard Chartered Bank.

Metrobank has issued P70.5 billion worth of bonds since November 2018.

The bank’s net profit fell 9.33% to P6.1 billion in the first quarter as it increased loan-loss provisioning due to the pandemic.

Gross operating revenue rose 13% to P27.6 billion.

Metrobank shares closed at P41.50 Friday, down P1.50 or 3.49%.

Peso enters P49/dollar territory, strongest in nearly 3 years

The peso strengthened to a nearly three-year high against the dollar Friday on increased confidence in an economic recovery as businesses gradually restore operations across the world.

The peso closed at its high of P49.80 to the dollar, after closing flat at P50 Thursday, according to the Bankers Association of the Philippines.

Week-on-week, the peso gained 81 centavos from its P50.61 finish on May 29.

The peso opened the session at P49.93. The low was P50.05.

Dollar volume was $1.01 billion on Friday, well above the Thursday level of $602.2 million.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s gains reflect improving risk sentiment for emerging market currencies as more economies re-open.

“The peso closed (at its strongest) in nearly three three years or since the P49.63 on June 15, 2017 amid improved global market risk appetite that led to gains in emerging markets,” he said in a text message.

Most of the Philippines transitioned to a more relaxed form of quarantine starting June 1 while Metro Manila and nearby provinces were under slightly more restrictive conditions, which nevertheless allowed businesses to reopen.

Meanwhile, a trader who asked not to be identified said the peso was supported by weaker appetite for the dollar on expectations of weak US economic data.

“The peso appreciated (due to) the waning appeal of the dollar ahead of likely downbeat US labor reports overnight,” he said.

Reuters reported that the US unemployment rate is likely to climb to almost 20% in May due to the pandemic, which would be a new record for the postwar era.

US Labor Secretary Eugene Scalia said on Thursday that the jobless rate may recover to below 10% by the end of 2020 as some workers who applied for unemployment benefits return to work. — Luz Wendy T. Noble

Globe, Innove sustain increase in tax payments in 2019

Globe and Innove Communications Inc.’s tax payments continue to rise for the fifth consecutive year. For fiscal year 2019, Globe paid over P20.7 billion in taxes, P3-Billion or 20% higher than the previous year’s remittance.

The company has remitted to the government close to P80 billion in taxes over the last five years.

“We regard the company’s increasing tax payment as a testament to our efficient operations even as we give our customers better service. This will further help the government in its efforts to manage the impact of COVID-19 to our economy and the people hardest hit by the pandemic,” said Rizza Maniego-Eala, Globe CFO and Chief Risk Officer.

Innove, on the other hand, settled at least P4.8 billion in taxes for 2019, a nine percent increase compared to its payment in 2018

Globe and Innove were recently cited by the Department of Finance (DOF) as among the big companies in the top 500 corporate taxpayers that filed their income tax returns (ITR) ahead of the extended deadline. They were among the top 11 companies which complied early with their tax obligations even when the deadlines were extended twice.

Also included in the DOF Top 500 list are the Bank of the Philippine Islands (BPI), Manila Water Company, Inc. and BPI Capital Corp., which are part of the Ayala Group of Companies.

Megawide Construction Corp. sets virtual annual stockholders’ meeting on June 30

NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

To the Stockholders of MEGAWIDE CONSTRUCTION CORPORATION (“Megawide”):

Notice is hereby given that the Annual Stockholders’ Meeting of Megawide will be held on June 30, 2020, at 2:00 p.m. The meeting will be conducted via remote communication and can be accessed through the following link: Please click here

The agenda of the meeting is as follows:

1. Call to Order

• The Chairman will call the meeting to order.

2. Proof of Notice and Quorum

• The Corporate Secretary will certify that notices of the meeting have been duly sent to stockholders of record date as required by the By-Laws. He will also attest to the attendance at the meeting and whether a quorum is present. Except as otherwise provided by law, a quorum shall consist of stockholders owning majority of the outstanding capital stock, (exclusive of treasury stock), in person or represented by proxy.

3. Approval of the Minutes of the Annual Stockholders’ Meeting on July 2, 2019

• The Minutes of the Annual Stockholders’ Meeting will be submitted for approval. It contains the following matters: (a) approval of the minutes of the Annual Stockholders’ Meeting on July 2, 2018; (b) Chairman’s Address and President’s Report; (c) Election of Directors; (d) Approval of the 2018 Audited Financial Statements; (e) Appointment of External Auditor; and (f) Ratification of all acts of Management and the Board of Directors. A copy of the Minutes is available in Megawide’s website.

4. Chairman’s Address and President’s Report

• The Chairman and President will give a welcome address and give the operational highlights of 2019.

5. Election of Directors

• The stockholders will approve the election of the regular and independent directors to hold office until the next Annual Stockholders’ Meeting and until their respective successors have been elected and qualified. The nominees were evaluated on the basis of all qualifications required by By-Laws, the New Manual on Corporate Governance and that no provision or disqualification would apply to them. The profile and qualifications of the nominees are available in the Definitive Information Statement and Annual Report.

6. Amendment of the Articles of Incorporation to Increase Authorized Capital Stock (“ACS”) for Preferred Shares.

• The increase in Megawide’s ACS for preferred shares will be submitted for the approval of the stockholders.

7. Approval of the 2019 Audited Financial Statements

• The 2019 Audited Financial Statements (2019 AFS) will be submitted for approval of the stockholders.

8. Appointment of External Auditor

• The stockholders will approve the appointment of Punongbayan & Araullo as external auditor.

9. Ratification of all acts of Management and the Board of Directors

• For ratification of the stockholders are the acts of Management and the Board of Directors in the ordinary course of Megawide’s business. A list of such acts is too voluminous to be included in the Information Statement. These acts pertain to obtaining government permits and clearances, execution of contracts, availment of services from banks, and other acts necessary for various construction projects of Megawide.

10. Other Matters

• The floor will be open for questions from the stockholders.

All stockholders of record at the close of business on May 13, 2020 are entitled to notice of and vote at the annual meeting and at any adjournment thereof. The stock and transfer books of Megawide will be closed from end of business day on May 14, 2020.

Please refer to Exhibit “1” of the Definitive Information Sheet (available at the PSE EDGE website) or visit Megawide 2020 ASM for the full details on the submission of proxies, procedure for voting, and participation in the Annual Stockholders’ Meeting of Megawide.

Quezon City, Philippines, June 2, 2020.

 


ANTHONY G. TOPACIO
Corporate Secretary

ARTHALAND’s Notice of 2020 Annual Stockholders’ Meeting

 NOTICE OF ANNUAL STOCKHOLDERS’ MEETING

NOTICE is hereby given that the 2020 annual stockholders’ meeting of ARTHALAND CORPORATION will be held on 26 June 2020, Friday, at 8:30 A.M. and will be conducted through remote communication.

The Agenda for the meeting is as follows:

1. Call to Order
2. Secretary’s Proof of Due Notice of the Meeting and
Determination of Quorum
3. Approval of Minutes of the Annual Stockholders’ Meeting
held on 28 June 2019
4. Notation of Management Report
5. Ratification of Acts of the Board of Directors and Management
During the Previous Year
6. Approval of the Proposed Amendment of the By-laws
7. Approval of the 2020 Stock Option Plan
8. Election of Directors (including Independent Directors)
9. Appointment of External Auditor
10. Other Matters
11. Adjournment

Only stockholders of record at the close of business on 04 June 2020 are entitled to further notice of and to vote at this meeting. The electronic copy of the Information Statement which includes the manner of conducting the meeting and the process on how one can join the same, as well as vote in absentia, among other relevant documents, is available in www.arthaland.com and in the Electronic Disclosure Generation Technology of the Philippine Stock Exchange (PSE EDGE).

WE ARE NOT SOLICITING YOUR PROXY. However, if you cannot personally attend the meeting or participate through remote communication but would still like to be represented thereat and be considered for quorum purposes, you may inform the Office of the Corporate Secretary with contact details indicated below or through (+632) 8 403 6910 or investor.relations@arthaland.com not later than 19 June 2020 (Friday). You will be advised the following business day of any further action necessary on your part, which may include accomplishing a proxy.

Taguig City, Philippines.

RIVA KHRISTINE V. MAALA
Corporate Secretary

 

ARTHALAND CORPORATION
Head Office, 7F Arthaland Century Pacific Tower
5TH Avenue corner 30TH Street, Bonifacio Global City
1634 Taguig City, Philippines

Job losses swell in April

THE LATEST official labor data showed the jobless rate shot up to double-digits, as millions of Filipinos became unemployed, the Philippine Statistics Authority (PSA) reported earlier this morning.

Preliminary results of the PSA’s April 2020 round of the Labor Force Survey put the country’s unemployment rate at 17.7%, up from the 5.1% recorded in the same survey round last year. This was the highest since the government adopted new definitions for the LFS in 2005.

This is equivalent to around 7.25 million jobless Filipinos,  up by 4.98 million from 2.27 million in April 2019.

Likewise, the underemployment rate –  the proportion of those already working, but still looking for more work or longer working hours – worsened to 18.9% from 13.4%. This translates to 6.39 million underemployed Filipinos, up from 5.61 million previously. Among the April rounds of the LFS, this year’s result was the highest since the 19.2% underemployment logged in April 2013.

The size of the labor force was approximately 41.02 million out of the 73.7 million Filipinos aged at least 15 years old, yielding a labor force participation rate (LFPR) of 55.6% from 61.3% in April 2019, equivalent to 44.02 million Filipinos. According to the PSA, the latest LFPR was the “lowest in the history of the Philippine labor market.”

The employment rate, which is the proportion of the employed to the total labor force, dropped to 82.3% in April from 94.9% the previous year. This is equivalent to approximately 33.76 million Filipinos, 41.76 million fewer than the 41.76 million employed in April 2019.

By major economic sector, services still made up the largest share of the employed population. In April, the employment share in that sector shrank to 57.1% from 58.9%.

Industry accounted for 17% of employed Filipinos in April, down from last year’s 19.4%.

Agriculture employed 25.9% of the workers, up from 21.7% previously.

As of the April LFS round, there were 19.28 million people employed in services, down by 5.34 million from 24.61 million in April 2019. For industry, there were 5.74 million employed in the sector, down from 8.08 million. Agriculture, meanwhile, has 8.74 million – down from 9.06 million. – Marissa Mae M. Ramos

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