Gearing up frontline and back-end heroes in the new normal

May 21, 2020 | 8:43 am

Technology has proven to be invaluable during the pandemic, allowing businesses to continue operations in spite of rigid quarantine measures through remote work. Those on the frontlines, primarily healthcare workers, public servants, and other essential roles, continue to rely on technology to manage resources, compile medical databases, and keep the country running.

Now more than ever, the availability of reliable solutions and devices is crucial. Global IT brand HP provides solutions designed for remote work–from its notebook series, to display solutions, to a whole ecosystem of accessories, the company has designed its product offerings to help end users make the most of the remote work setup. In addition, HP maintains a global Business Continuity Management (BCM) program that aims to take a holistic, company-wide approach to ensure all aspects of its work, from the beginning of the supply chain to the end-point, continue to operate seamlessly.

“We at HP are committed to providing a safe work environment and ensuring the continuity of our operations even under the most challenging circumstances,” the company said. “Upon news of the initial outbreak in China, we immediately activated our global BCM program. Although the situation remains fluid, we continue to closely monitor the COVID-19 pandemic and have implemented precautionary measures.”

To this end, the company noted, HP follows the guidelines set forth by the Center for Disease Control (CDC), the World Health Organization (WHO), and local and national governments.

Resilience amid the COVID-19 pandemic

Through its global BCM program, HP has fortified its operations to remain resilient in the face of the COVID-19 pandemic, giving organizations and companies uninterrupted access to its products and services.

“We know that millions of people around the globe count on HP, and that the outbreak of COVID-19 has only intensified that reliance. That’s why we’re firmly committed to the assessment and assurance of supplies necessary to maintain our global products and services,” HP said.

Components for HP’s products come from a complex global network of manufacturing sites. Each year, HP conducts a comprehensive supply chain analysis, mapping key sites and documenting recovery and mitigation strategies. Most HP factories in the area heavily affected by COVID-19 are back up and running, and productivity is steadily increasing.

“Our efforts are now focused on continuing to scale productivity in each factory, working closely with our component suppliers and shipping providers to expedite orders as quickly as possible. Order status and potential delays on existing customer orders and/or repairs continue to be reflected in HP systems and are regularly updated, including notifications via email upon order shipment or if an order is delayed,” the company said.

HP’s BCM program takes a holistic, enterprise-wide approach in order to ensure end-to-end continuity across its value chain, with goals to maximize HP’s ability to continue to deliver products and services seamlessly while minimizing the impact to HP’s partners, customers and communities.

The BCM’s collaborative planning process involves identifying critical business processes and operations/activities, assessing risks and potential impacts, and developing strategies to mitigate any disruptions to operations. The entire process takes measures to implement plans and processes for rapid and effective response, management and recovery from events, as well as monitor, review, train staff, exercise and continually improve those strategies and plans.

The BCM program serves as a critical mechanism to gauge HP’s overall preparedness and resiliency, address the continuance of critical business operations, and to provide a solid foundation to address risks on an enterprise-wide basis, even in dynamic situations such as those presented by COVID-19.

Empowering the Filipino HP Community

HP has also gone to great lengths to safeguard its customers and partners while still meeting their business needs.

The company contact centers have cross-trained agents to manage multiple queues, established access to work-from-home technology for agents, and are leveraging chat, social and web support options for customers and partners where needed.

Meanwhile, for on-site services, HP has defined operating health and safety protocols to ensure that technicians are healthy and remain healthy on visits. The company is also collaborating with customers to make sure that onsite visits maximize productivity during the time spent on-site.

For situations that prohibit on-site services due to quarantine, the company has also established an expanded remote-resolve and mail-in process to accommodate customer and partner needs. For remote-resolve services, HP’s Service Engineers will be available to remotely assist customers, with increased customer support operations through our global support website for customers and partners needing assistance during this time. HP also updated its 24/7 Virtual Agent regularly with the latest information. For customer diagnostics and support videos, customers can always leverage Diagnostics for HP PC & printers and HP Support videos.

All resources, services and solutions are available to Philippine customers through authorized HP resellers and partners. Integrated Computer Systems, Inc. is an HP Platinum Partner, servicing customers nationwide. For more information, feel free to talk to your ICS contact person at info@ics.com.ph.

Gov’t open to more solicited PPPs

May 21, 2020 | 12:33 am

By Beatrice M. Laforga
Reporter

THE government is open to more public-private partnerships (PPPs) in infrastructure, as state resources are stretched by the ongoing coronavirus disease 2019 (COVID-19) response.

National Economic and Development Authority (NEDA) Acting Secretary Karl Kendrick T. Chua told BusinessWorld that the government “welcomes” solicited PPPs in the revised list of flagship infrastructure projects.

“We are open to solicited PPPs in the infrastructure flagship program,” he said via Viber on Tuesday.

Mr. Chua stressed the government will consider “solicited” PPPs because these are “better,” but did not elaborate.

PPPs have been touted as the answer to the government’s lack of capacity and funds to develop massive infrastructure projects.

“PPPs always have the potential in advancing critically needed projects in the face of a very dire budget picture. Even before the COVID-19 situation, the government has utilized PPPs as one of the options to finance national and local infrastructure projects,” the PPP Center said in an e-mailed reply to questions sent by BusinessWorld.

The PPP Center said the government will still have to “carefully” assess where the private sector can contribute and deliver services more effectively than the state, while balancing the risks that the private can absorb, especially now that businesses are reeling from the coronavirus fallout.

The government will also have to “solicit private sector interest to participate in carefully structured PPP projects” that have a clear definition of risks and mitigation measures to ensure sustainability.

“We are hoping that there will still be a strong interest from the private sector to participate in PPP projects, especially that we need to address our infrastructure needs amidst the current limited government budget,” the PPP Center said.

In a text message, American Chamber of Commerce of the Philippines, Inc. Senior Adviser John D. Forbes said PPP projects became “more important” now for the country after the government’s national budget and official development assistance (ODA) “are diverted to new and urgent relief and stimulus expenditures” amid the coronavirus pandemic.

Earlier this month, Mr. Chua had said the administration’s flagship infrastructure program is being reviewed anew by the Development Budget Coordination Committee (DBCC) to “reprioritize” the projects and “give more space” to health and digital infrastructure ones.

However, the state budget planners on May 12 slashed infrastructure spending this year to P725.1 billion or 2.8% of gross domestic product (GDP) from the earlier projection of P800.6 billion or 4.1% of GDP, documents showed.

If realized, the infrastructure spending this year will be lower than the actual P1.05 trillion spent in 2019, which was equivalent to 5.4% of GDP.

Finance Undersecretary Gil S. Beltran explained that the reduced infrastructure budget was “temporarily realigned,” until the Budget department is able to generate more savings from other budget items.

Budget data showed the country’s two major infrastructure implementing agencies had their budgets slashed as the government realigned spending priorities for COVID-19 response. The Department of Public Works and Highways (DPWH) saw its budget cut by P121.94 billion, while the Department of Transportation’s (DoTr) was lowered by P8.82 billion.

The economic team is banking on the infrastructure program to help the economy recover in the second half, after the lockdown that started in mid-March halted all construction activity.

“Build, Build, Build, is part of the bounce back strategy, that’s why we need the budget for it,” Mr. Beltran said.

The national government released a revised list of infrastructure flagship projects late last year increasing the number of projects to 100 from the previous 75 items, and including more PPPs.

With a total cost of over P4 trillion, the infrastructure flagship programs around 26 projects will be funded via PPPs, higher than the eight projects included in the initial list with 75 projects.

No need for bicam if Senate passes ‘fiscally sound’ CITIRA — Salceda

May 21, 2020 | 12:32 am

THERE may be no need for a bicameral conference committee if the Senate passes a “fiscally sound” version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), according to House Ways and Means Chair and Albay Rep. Jose Maria Clemente S. Salceda.

“As long as the Senate’s final output is fiscally vetted, and without weird additions that threaten our financial position, we can go without a bicameral conference. We are confident that the House submitted a very reasonable and very sound first draft. As long as they don’t compromise the overall fiscal health of the country,” Mr. Salceda said in a statement on Wednesday.

The CITIRA bill, which is now renamed as the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), is still pending second reading approval at the Senate. Lawmakers are now scrambling to come up with a final version before Congress goes on recess on June 5.

Under CREATE, the corporate income tax (CIT) will be slashed to 25% in July, from the current 30%. The version approved by the House last year had sought to reduce the CIT to 20% over a decade.

“I broadly agree with the amendments. Actually, I proposed that we cut CIT faster to help COVID (coronavirus disease 2019) afflicted businesses even before the changes were made. So, with that critical input considered, it fits what I believe should be the tax policy counterpart of the economic recovery plan,” Mr. Salceda said.

If passed, the measure will save small businesses an estimated P42 billion.

“It’s P42 billion more money in hundreds of thousands of small businesses — wala pang delay sa implementation, kasi instant ang epekto sa bottomline. The cut is effective July 2020, if the Senate can manage to pass it before we go on break this June,” Mr. Salceda said.

CREATE also proposed to extend the net operating loss carry-over (NOLCO) to five years from the current three-year period. This will allow firms to utilize net losses in 2020 as additional deductions to their taxable income from 2021 to 2025.

The Fiscal Incentives Review Board (FIRB), whose functions will be expanded under the bill, will also have the power to recommend the grant of longer tax incentives and non-fiscal incentives to deserving companies.

Upon the recommendation of the FIRB, the President can approve a set of incentives with longer periods of availment if necessary to attract “highly desirable investments that will bring more employment, high level of skills training, and greater value-added to the economy.”

Mr. Salceda is confident that the proposed tax reform can be passed immediately as long as the net revenue impact “makes sense.”

“Pia naman and I have an open line, as well as the economic managers. So, the small details can be ironed out and the House will continue to provide insights. But, if the net revenue impact makes sense, we can adopt the Senate version. Kung ipasa nila bukas, bukas tapos na tayo,” Mr. Salceda said referring to Senate Ways and Means Chair Pia S. Cayetano.

CREATE is part of the recovery stage under the Philippine Program for Recovery with Equity (PH-Progreso).

STATUS QUO INCENTIVES
The Philippine Economic Zone Authority (PEZA) continues to support the “status quo” on incentives, despite the new proposals to immediately cut corporate income tax and lengthen the sunset period for existing fiscal incentives.

“We’ll leave it to the senators (because) they’re the ones who will vote,” PEZA Director-General Charito B. Plaza said about the new proposals in a mobile phone message on Wednesday.

The CITIRA also proposes to rationalize incentives, where companies can retain their existing incentives for four to nine years. The sunset provision was at two to seven years.

Ms. Plaza maintained in a television interview on Wednesday that export companies prefer to retain the existing incentives regime.

“Our incentives package is exactly what attracted our FDIs (foreign direct investments), our exporters to come to the country. Our incentives package is tried, tested, and proven and is globally competitive.”

She said in the mobile phone message that PEZA supports the reduction of the CIT for domestic enterprises.

“Exporters still prefer the GIE (gross income earned) (because) it’s simplified and they don’t have to deal with the LGU (local government unit), BoC (Bureau of Customs) and many other agencies thus, open to red tape and corruption,” she explained in the mobile phone message.

PEZA has been contesting the removal of the 5% tax on GIE paid by locators in lieu of other local and national taxes. Companies have to deal with various government agencies for the various tax payments.

The Philippine Exporters Confederation, Inc. (PhilExport), along with several foreign business chambers, has expressed support for the CIT reduction.

“The drop in CIT is seen to attract investors, increase the country’s competitiveness and help address particularly the cash flow issue of MSMEs. But in this crisis, this tax reform will particularly be relevant especially to small- and medium-sized businesses bleeding from the impacts of the lockdowns and COVID-19 pandemic,” PhilExport President Sergio R. Ortiz-Luis, Jr. said in a statement last week. — Genshen L. Espedido and Jenina P. Ibañez

PCC warns against unchecked price controls

May 21, 2020 | 12:31 am

By Jenina P. Ibañez
Reporter

THE Philippine Competition Commission (PCC) warned against unchecked price controls and “rescue mergers,” as it flagged a possible lessening of competition among companies during the coronavirus disease 2019 (COVID-19) pandemic.

PCC Chairperson Arsenio M. Balisacan said on Wednesday that price controls could deter the supply of essential goods and could be used as a reference point for collusion.

“In the short term, we may see firms exhibiting pricing behavior different from that in normal times. When profits are down, collusive and other forms of anti-competitive behavior that attempt to exploit crisis conditions to raise prices are more likely,” he said in a webinar hosted by the Management Association of the Philippines (MAP).

“Some jurisdictions have already imposed price caps and price ranges. However, the government should use price controls with caution. Imposing price ceilings may be counterproductive since they may deter the entry of other firms to produce more goods, especially essential goods.”

While temporary cooperation among firms could be beneficial in improving efficiency in producing essential goods, Mr. Balisacan said there is a possibility this may lead to price fixing.

“However, there is a significant risk that cooperation might spill over to hardcore restrictions like price fixing since competitors may then regularly obtain information on the other firms’ inventories and pricing strategies. Price fixing or output fixing is welfare reducing because it artificially sets the prices higher or output lower,” he added, noting that this cartel-like behavior may continue after the crisis.

Mr. Balisacan described the effects of the crisis due to the pandemic, noting the market exit of smaller firms due to losses and the increased appetite for “rescue mergers” among larger firms.

He said that there is pressure to approve mergers quickly as some firms are failing due to losses amid the pandemic.

“Our take on that is that if the acquisition involves efficiency, involves improvement that benefits not only the firms but everyone else, then that should not be prohibited. But if the big firm swallows the small firm because it doesn’t want a potential rival or competitor… then surely makes a lot of difference for us in the way we look at the issue,” Mr. Balisacan said.

PCC’s proposed solution is to expedite merger and acquisition evaluation for medical solutions, and review the “failing firm” defense on a case-by-case basis.

Mr. Balisacan added that government’s policy measures, including subsidies and bailouts, come with risks in distorting the business playing field.

He said subsidies should be based on objective criteria and transparent rules and should be applicable to all businesses within an industry to avoid selective policy that distorts the playing field.

Physical distancing will be ‘very costly’ for some firms

May 21, 2020 | 12:30 am

By Marissa Mae M. Ramos
Researcher

COMPANIES that rely on face-to-face interaction are likely to be more negatively affected by the implementation of physical distancing measures than other sectors, as fears over the coronavirus disease 2019 (COVID-19) persist, according to economists from the University of Asia and the Pacific (UA&P).

In an unpublished paper titled “Consumer Fear in a Post Quarantine Economy,” UA&P economists George N. Manzano and Nikka C. Pesa said while the practice of physical distancing is necessary from a public health policy perspective, the practice can be very costly from a business standpoint.

“There are certain markets, especially in the services segment, whereby the very nature of the transaction, makes physical distancing impossible. These are termed ‘high contact intensive’ industries marked by face-to-face interaction between service provider and consumer such as food services, hair salons, and dentists,” they said, adding that firms offering non-essential services are even more vulnerable as consumers are expected to delay making these purchases.

They noted that among establishments with 20 or more workers, firms that provide non-essentials employ around 1.28 million Filipinos, or 28.5% of the country’s total employment, citing the Philippine Statistics Authority’s (PSA) 2015 edition of the Annual Survey of Philippine Business and Industry. On the aggregate, these firms earned approximately P3 trillion that year.

In Metro Manila alone, around 508,000 workers or 24% were employed in this group with total income amounting to P1.8 trillion.

Mr. Manzano and Ms. Pesa’s paper follows the analysis of economist Fernando Leibovici and colleagues at the Federal Reserve Bank of St. Louis in the United States where they distinguished industries that produce essential services during the pandemic such as health services, from those that do not.

Among industries identified as “high-contact intensive” but providing non-essential services were personal care; outpatient healthcare; food and drinking places; amusement and recreation; and tourism-related industries such as transportation and accommodation.

“The fact that workers from these industries are less likely to have possibilities for working remotely will compound the problem… The more obvious case is that cash-strapped customers, recently emerging from the ECQ (enhanced community quarantine), can hardly afford to spend on such services,” the UA&P economists said.

“Even more alarming, people do not want to avail of such services due to fear of infection. As customers shy away, demand is driven downwards leading to even lesser revenues.”

INFORMATION ASYMMETRY
This “fear factor” stems from the problem of information asymmetry, which arises when one party has more information than the other.

“Because reliable information is absent or hard to come by, everyone will suspect that the person — co-worker, client, service provider, etc. — could be a potential carrier. Given the perceived risk, they will forgo the transaction leading to a loss of potential business,” Mr. Manzano and Ms. Pesa said.

One remedy to this problem, they said, is through “signaling.”

“[S]ervice providers can signal the state of their health. A certificate of having been tested and found negative of the virus could be used as an instrument for signaling. Alternatively, a record of thermal scan readings for the past 21 days could likewise be employed,” they explained.

However, even this may prove problematic if signals are not credible.

“If the reliability of the current testing procedures in detecting asymptomatic carriers at all times is questionable, then the certificates of testing may not be very useful as a signaling instrument… In addition, if the service provider cannot assure that integrity of the ecosystem where he or she operates… is ‘safe’, then possessing test certificates of health may not be very convincing signaling instruments,” they said.

“In the absence of a credible signaling instrument, that could mitigate the fear factor, the high-contact service sectors would face a very difficult path to recovery. These service sectors would therefore need government assistance. That a good number of these sectors are micro, small, and medium establishments, which are more fragile during lockdowns, makes the call for assistance more urgent.”

The country’s gross domestic product (GDP) shrank by 0.2% in the first quarter — the first time in 21 years or since the fourth quarter of 1998.

The services sector contributed 0.81 percentage point (ppt) to GDP performance during the period to partially offset the negative contributions of agriculture and industry at minus 0.04 ppt and minus 0.93 ppt. Nevertheless, this paled in comparison to its contribution of 4.16 ppts in the first quarter last year when the economy grew by 5.7%.

The cabinet-level Development Budget Coordination Committee now expects GDP to shrink by 2% to 3.4% this year, lower than the -1% to zero growth forecast made in late March.

‘High contact intensive’ firms stand to lose from new normal as personal interaction becomes health risk

May 21, 2020 | 12:30 am

AC Health allots P300M for virus response

May 21, 2020 | 12:10 am

By Denise A. Valdez, Reporter

THE healthcare unit of Ayala Corp. (AC) is looking to take a bigger part in the country’s battle against the coronavirus disease 2019 (COVID-19) pandemic, allotting up to P300 million for initiatives to support testing and triaging.

In an online media briefing on Wednesday, Ayala Healthcare Holdings, Inc. (AC Health) said it had committed to build five biosafety laboratories across the country that would process 3,000 COVID-19 tests every day.

This is aside from previous initiatives of partnering with hospital operator QualiMed to build a COVID-19 referral facility in its Nuvali, Sta. Rosa branch, and opening FamilyDoc and Healthway clinics to serve as triage points for suspected COVID-19 cases.

“Within AC Health specifically, our program to date is about P300 million in investments and donations towards building out, for instance, Qualimed Nuvali, building out the biosafety labs, and investing in testing in general,” AC Health President and Chief Executive Officer Paolo Maximo F. Borromeo said.

AC Health will be opening next week a testing lab in Makati City in partnership with the Tropical Disease Foundation. In the coming weeks until June, it will be opening the other four testing labs in QualiMed Sta. Rosa, Batangas, Bulacan and Iloilo.

“With the network of five labs, we will be able to contribute significantly to the government’s goal of 30,000 tests per day by the end of May. We’re also looking to establish partnerships with other lab providers and hospital providers, including in big cities such as Cebu,” Mr. Borromeo said.

He said the government had been able to conduct 11,000 tests every day, but a lot has to be done involving the private sector to reach the target of 30,000 tests by month’s end.

One of the ways AC Health hopes to improve the process is by procuring automated extracting machines. Mr. Borromeo said this would raise the number of tests conducted daily to 800–1,000 tests versus 100–200 tests with manual labor.

AC Health currently offers COVID-19 rapid testing services at select clinics in Metro Manila at P1,600 for walk-in clients. Corporate rates are also available for companies that want to tap the company for testing their employees.

As the situation pushes most hospitals to focus efforts on the COVID-19 crisis, Mr. Borromeo said AC Health is finding opportunities to plug gaps in the healthcare sector, such as by advancing telemedicine and improving its pharmaceutical services.

The company launched in April a telemedicine platform, HealthNow.ph, in partnership with Globe Telecom, Inc.’s 917 Ventures. It is handled by AC Health’s technology arm Vigos and allows people to digitally get in touch with a pool of about 80 doctors every day from Healthway and FamilyDoc.

HealthNow is currently accessible through its website for free. By next month, Vigos Chief Executive Officer Christian Besler said the initiative will have its mobile application, which will allow doctors to offer paid consultations.

By July, HealthNow will link with Generika drug stores to have medicine delivery capabilities, and by the third or fourth quarter, will incorporate corporate healthcare facilities through FamilyDoc.

Mr. Besler said the goal is for the platform to become an all-around service provider to address various public health-seeking behaviors. Healthway, FamilyDoc and Generika are all brands handled by AC Health.

“For the Ayala group, I think the pandemic has shown how vital the healthcare sector is to nation building. For us at the group, it’s renewed our own commitment to the sector,” Mr. Borromeo said.

“I do think moving forward, it needs massive support and will require continuous investments from the private sector, both in terms of capacity building and capability building. So I think you’ll see more investments from us, from the private sector into the healthcare industry,” he added.

AC Health has long been planning to have a cancer network in its portfolio, with an initial goal of groundbreaking a P2-billion cancer hospital this year. Mr. Borromeo said this has been delayed because of the pandemic, but the project is still alive, together with plans to have a network of cancer clinics.

“Hopefully after the lockdown, we are able to build stand-alone cancer clinics… Our goal is to build a cancer network,” he said.

AC Health is one of AC’s newest investments which it projects as a long-term value driver to the company. Its primary businesses are in real estate, banking, telecommunications, power and water.

Earnings of AC in the first quarter fell 17% to P6.7 billion due to a decline in its property, banking and industrial segments. Its shares at the stock exchange gained P15 or 2.31% to P665 each on Wednesday.

PAL further bleeds as last year’s losses more than double to P10B

May 21, 2020 | 12:09 am

THE listed operator of flag carrier Philippine Airlines reported a net loss of P10.31 billion last year, more than double the attributable losses to equity holders recorded a year earlier.

In a regulatory filing, PAL Holdings, Inc. placed revenues in 2019 at P154.54 billion, higher by 2.7% than the previous year’s, but expenses and other charges piled up.

PAL said financing charges had increased by P6.76 billion or 128.4%, mainly after it adopted the new lease accounting standard, or PFRS 16, and chalked up additional aircraft financing.

“There were also more charges incurred during the year and significantly less one-off gains compared to 2018 where it booked income from reversal of provision for contingency for the Flight Attendants and Stewards Association of the Philippines (FASAP) case, reassessment of the carrying values of asset restoration obligations for certain aircraft and credit memos received from various aircraft manufacturers,” it also said.

Last year’s topline number was driven by a 4.2% increase in passenger revenues as there were additional frequencies and new routes, but these were partly offset by lower cargo and ancillary revenues at 8.2% and 5%, respectively.

Although consolidated expenses last year decreased by 3.1% to P151.66 billion, the company was weighed down by financing charges of P12.03 billion and other charges of P2.04 billion.

“The main contributors for the decrease were flying operations and passenger service expenses, which were partly offset by the increase in aircraft and traffic servicing expenses,” it said.

For 2020, PAL said the coronavirus pandemic could have a material impact on its financial results this year and even periods after.

PAL President and Chief Operating Officer Gilbert F. Santa Maria said in a recent virtual conference that the current crisis is “a great time of turmoil” for the company.

“But we have been around for almost 80 years, so we are not giving up. We will be around for a while longer,” he added.

He noted that there had been “reluctance” among people to travel, but the company is now carrying out measures to build their confidence to fly again.

On whether the prices of flight tickets would go up, he said: “You are asking if ticket prices are going to be up? The quick answer is somewhat.”

“You understand that in airlines, the CAB (Civil Aeronautics Board) will not allow us to raise prices…. But within the airline itself, there are different classes of seats, so we will charge different prices for promotions and different prices for standard and regular seats, and so we will work within that framework to allow us to fly economically but safely,” he said further.

On Wednesday, shares in PAL inched up by 0.14% to close at P6.95 apiece. — Arjay L. Balinbin

Mid-market focus boosts FDC net profit by 23%

May 21, 2020 | 12:08 am

FILINVEST Development Corp. (FDC) recorded a 23% earnings growth to P12 billion in 2019, lifted by higher profits from its banking and property segments as it focused on the middle market.

In a statement on Wednesday, the Gotianun-led holding company said its consolidated revenues last year rose 15% to P74.85 billion. Gross expenses also climbed 14% to P59.86 billion.

Primary drivers of growth were FDC’s banking and property units. East West Banking Corp. contributed P6.1 billion in net income, 45% higher than the level in 2018.

The property segment, which includes both real estate and hospitality businesses, made up “more than half of FDC’s bottomline.” The exact contribution of the property segment was not disclosed, but Filinvest Land, Inc. (FLI) said in a statement on Monday it booked a 7% earnings growth to P6.28 billion last year.

Power unit FDC Utilities, Inc. (FDCUI) added P2.5 billion in net income, up 20% year-on-year.

“The year 2019 was a banner year for FDC. We met our goals for our core businesses, gained further traction in the new businesses and achieved record financial results,” FDC President and Chief Executive Officer L. Josephine G. Yap said in the statement. “This was done through our continued focus on the delivery of products and services to the dynamic yet underserved middle market.”

Broken down, EastWest Bank saw a 21% growth in revenues and other income to P36.4 billion last year. This was due to a 12% increase in net interest income and a 16% rise in non-interest income.

“EastWest Bank recorded its most profitable year in 2019 following a consumer-led loan portfolio that expanded remarkably well. It also maintained its top-tier position in profitability with a return on equity of 14%,” FDC Chairman Jonathan T. Gotianun said in the statement.

Real estate arm FLI increased its lot, condominium and residential unit sales by 5% to P21.5 billion. Rental revenues from FLI and Filinvest Alabang, Inc. likewise rose 21% to P7.5 billion due to the expansion of its leasing portfolio.

Hotel operations, which is under FDC’s property segment, recorded a 24% growth in revenues to P3.3 billion after it opened new facilities in 2018 and 2019. Filinvest Hospitality Corp. now has six properties in its portfolio.

FDCUI had a 17% climb in revenues to P10.1 billion. This was due to an increase in sales volume from higher customer demand and gains from selling replacement power to other power generators.

This year, FDC said the coronavirus disease 2019 (COVID-19) pandemic has led to operational disruptions that may slow its businesses down.

“The COVID-19 pandemic…has put an unexpected pause to our 2020 plans. Our attention was diverted as we worked closely with the public and private sectors to mobilize resources towards health care, testing and community assistance,” Ms. Yap said.

“Nevertheless, the Filinvest group is in a solid position to address the forthcoming challenges posed by this crisis,” she added.

FDC and its subsidiaries have committed P100 million in fighting the COVID-19 pandemic through its foundations.

Shares in FDC at the stock exchange slipped 18 centavos or 2.20% to P8.02 each on Wednesday. — Denise A. Valdez

SMC starts COVID-19 tests on employees

May 21, 2020 | 12:07 am

SAN Miguel Corp. (SMC) has started doing coronavirus disease 2019 (COVID-19) tests to its employees as they prepare to return to work.

The diversified conglomerate said in a statement on Wednesday it had begun swabbing in key facilities while waiting for its dedicated testing lab to finish construction.

“We are prioritizing, first, our security and other maintenance staff, as they are the ones who take care of our workplace. After them, we test our colleagues whose duties require them to report to the office,” SMC President and Chief Operating Officer Ramon S. Ang said.

“Initially we are looking at only 20% of our head office population to report for work. Majority will still continue to work from home,” he added.

The government has eased quarantine restrictions over the weekend, which prompted several sectors to resume operations starting this week.

SMC said aside from testing employees in key facilities, the company will conduct testing to nearly 8,000 manufacturing, operations and management frontline staff. This would include plants in Cavite, Visayas and Davao in the coming weeks.

“We are doing this in phases. The success with which we can quickly test a large percentage of our employee population over the next few weeks will be a key consideration in the timelines of our overall return-to-work plan,” Mr. Ang said.

“Currently, we are working with partner laboratories to process the tests, but once our lab is up, we expect to be able to process more tests quickly so we don’t burden the system and we can take care of our employees,” he added.

Before it conducted tests for its employees, SMC committed to support local government units in conducting regional testing, donating swab booths and about 34,000 testing kits.

It said it will donate more kits to help the country achieve its goal of conducting 30,000 tests daily by the end of May.

SMC recorded flat earnings of P48.57 billion in 2019 due to lower sales from its oil and food units. Its shares at the stock exchange closed flat on Wednesday at P96.40 apiece. — Denise A. Valdez

Roxas Holdings cuts losses in second quarter

May 21, 2020 | 12:06 am

ROXAS Holdings Inc. (RHI) trimmed its losses attributable to equity holders to P92.75 million during the second quarter of its fiscal year ending March in part after the company reduced some of its expenses.

The net loss in the three-month period, which was lower by 44% compared with the previous year’s, was due to lower sugar production and weather disturbances.

Including non-controlling interests, the company’s net loss was at P96.15 million, wider by 42.3% than the level in the same period last year, its financial report submitted to the stock exchange on Wednesday showed.

The company attributed the net loss due to “unfavourable weather conditions, the eruption of Taal Volcano, and increased cane competition in the Batangas area.”

RHI’s revenues for the second quarter fell by 8.03% to P2.52 billion.

In the first half of its fiscal year, RHI recorded a net loss of P92.43 million, 74.6% lower than the P364.12 million loss in the same period in 2019.

RHI President and Chief Executive Officer Hubert D. Tubio said that the company was crafting a roadmap for interventions that would increase its annual output of sugar.

Mr. Tubio added that profit from RHI’s bioethanol segment fell as feedstock costs increased during the first half of the crop year.

“The high price of molasses affected the ethanol segment’s operations, resulting in lower production volume,” he said in a statement.

RHI Executive Vice President and Chief Finance Officer Celso T. Dimarucut said that the company’s focus is on its efforts to “de-risk” the business.

“Despite the many challenges we face, especially with the onslaught of COVID19, RHI has continued to manage its cash flow to ensure continuous manufacturing operations and is exploring all opportunities to reduce debt,” Mr. Dimarucut said.

On the other hand, the company’s ethanol group is exploring the commercial production of ethyl alcohol to assist in the country’s battle against the coronavirus disease 2019 (COVID-19) pandemic.

Described as the largest integrated sugar and ethanol producer in the country, RHI manages sugar miller Central Azucarera Don Pedro, Inc.; Central Azucarera de la Carlota, Inc.; ethanol producers Roxol Bioenergy Corp. and San Carlos Bioenergy, Inc.; and RHI Agri-business Development Corp.

On Wednesday, shares in RHI fell by 0.78% or P0.01 to close at P1.28 apiece. — Revin Mikhael D. Ochave

Personal SM shoppers and more on MyKuya

May 21, 2020 | 12:05 am

ON-DEMAND service app MyKuya announces that its users can now use the app to shop in SM Supermalls as quarantine measures “inspired [the company] to continue expanding its horizons for the comfort of the Filipino people,” a statement read.

“In terms of demand [it’s now] 700% than it was before the pandemic and before the quarantine,” Shahab Shabibi, founder of MyKuya, said in an online conference on May 12.

The addition of enterprise partners, he said, was a response to demand for more variety as it allows customers to buy items from shops inside SM malls.

“By partnering with SM, we are able to provide our customers the convenience and safety that they seek during these difficult times when it comes to getting their desired food and other products,” he said in a release.

Among the services the app provides are messenger services, personal shopper service, grocery delivery, and other errands. The app has also partnered with Ministop, Ayala Malls, and Lucky Chinatown Mall.

How it works is a user first clicks on the kind of service they want, indicates where the delivery will be made to, and how long the task will take. The fee depends on the distance and the time it will take to finish the job. The app promises to connect the customer to a service provider within two minutes or get P50.

Payment for the services and goods can either be made once delivery is completed if it’s under P1,000 or the “kuya” or “ate” (“older brother” and “older sister,” as the app calls its service providers) can first go to the customer’s residence to get cash or the customer can send the money via GCash.

In March, the three-year-old company noted a 300% increase in service bookings and added more than 5,000 individuals to provide services on the app. At the time, most of the bookings were for grocery deliveries. A month later, it announced that it was ready to accept 15,000 more individuals.

“Before the quarantine period, our services were quite evenly distributed, and from the moment that the quarantine began, about 80% of our orders became about grocery deliveries,” he explained.

Now that the country is more than two months in some version of quarantine and some cities are loosening up restrictions, Mr. Shabibi noted that they have seen demand for other services such as handyman, technician, and other specialized services. He said they will have those services soon on the app.

While many industries have paused their expansion plans because of quarantine restrictions to control the COVID-19 pandemic, for MyKuya, it sped up its growth.

“It has been war mode for us. Our team has been working seven days a week, double shift, since Day One of the quarantine. And the reason this happened is because we listened to our customers and we saw they need the service more than ever,” Mr. Shabibi said.

“So we had to definitely realign, and we had to work a lot harder to grow a lot faster and to be able to kind of take in and rapidly bring a lot of these pieces of our service community on board,” he added. — Zsarlene B. Chua

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