Facebook Instagram Linkedin X Youtube
Home Blog Page 9570

Insurance firms seek regulatory relief

By Beatrice M. Laforga
Reporter

INSURANCE COMPANIES are asking the Insurance Commission (IC) to “ease up” on some regulatory requirements to temper the impact of the coronavirus pandemic on the industry.

Philippine Insurers and Reinsurers Association (PIRA) Executive Director Michael F. Rellosa told BusinessWorld member companies have sought the relief to help them cope with the economic fallout.

Investments have declined due to coronavirus-driven volatility in financial markets, while sales have slumped as Luzon and other parts of the country were placed under lockdown since mid-March.

“We think we can survive this, but we have to ease up also on the regulatory regime. Since everybody felt the hit, can they go easy on us first so that we can continue doing what we are doing to help spur the economy,” Mr. Rellosa said in a Zoom call on Friday.

He said the IC should suspend or lower the minimum net worth requirement of P900 million for this year and 2021 after the value of insurers’ assets were eroded by market volatility.

“Investments namin bumagsak (our investments plunged), at the same time, may capital buildup program. So can we put a moratorium on the capital buildup program or can we peg it at specific level, and the RBC or the risk-based capitalization regime that we are also under, pwede bang (can they) i-relax naman nila ’yung levels,” Mr. Rellosa said.

“Marami kaming hinihingi sa regulatory relief (we are asking for a lot in terms of regulatory relief).”

Under Republic Act No. 10607 or the Insurance Code, insurers must have a net worth of at least P900 million by Dec. 31, 2019 and P1.3 billion by Dec. 31, 2022. New players must have at least P1 billion in paid-up capital.

Most insurers complied with the minimum net worth requirement last year, but considering weaker market conditions and the bleak economic outlook, Mr. Rellosa warned the number of nonlife insurance companies could be halved by yearend.

“If they are going to continue with the current levels of requirements, such as net worth requirements, RBC, kung lahat ’yan ipagpapatuloy medyo mahihirapan kami, siguro kalahati mawawala, out of 57, siguro mga 30 na lang maiiwan (if those will continue, it might be difficult for us to comply and around 30 out of our 57 nonlife insurance members could be gone),” he said.

However, he said PIRA still has to consolidate the inputs of its 57 members before submitting a formal appeal to the IC.

In mid-April, the insurance regulator conducted a survey to measure the impact of the coronavirus pandemic on insurance firms. Insurers were scheduled to submit the forms by May 8 and results were not yet available to the media as of writing.

IC chief Dennis B. Funa has said insurance companies are “well-capitalized” to weather the risks of the coronavirus crisis, but their investments and sales will be hurt.

Mr. Rellosa said sales of nonlife insurance companies have declined since most firms were not used to adopting work-from-home schemes, as well as depressed demand for their products.

Despite lower revenues from the business disruptions, he noted companies continued to pay for their usual expenses such as rental costs, utilities and salaries.

“Bagsak ’yung new business nila and ’yung renewals medyo nangalahati (New business is down and the renewals were halved). For different classes of insurance, iba iba ’yung effect but on a whole, medyo masama (the effect varies, but overall, it’s pretty bad). Sales went down,” Mr. Rellosa said.

Meanwhile, Philippine Life Insurance Association, Inc. (PLIA) President Benedicto C. Sison has said life insurers expect their assets to suffer “some drag” due to local equity sell-offs, although equities only make up a small portion of their total assets.

Sales of life insurance products also took a hit in the first month of the lockdown as the mobility of their financial advisors were restricted.

Even with the online availability of some products, Mr. Sison said online sales still could not match the volume sold through licensed financial advisors as most clients still prefer face-to-face meetings before getting a policy.

Mr. Sison noted an uptick in online sales of life insurance products, as more people wanted to get protection amid the coronavirus pandemic.

Sales picked up after the IC allowed advisors to conduct “digitally enabled face-to-face selling” according to Mr. Sison. He added they expect sales to bounce back to their pre-pandemic numbers in the coming months as more Filipinos realize the benefit of life insurance.

As of writing, the IC has not responded to queries on possible regulatory relief.

IC has extended the deadline for submission of audited financial statements for its regulated entities, including life and nonlife insurance firms, to June 30 from the original May 31 deadline.

The regulator also ordered insurance firms and health maintenance organizations (HMOs) to extend for at least 30 days current policies and agreements expiring during the lockdown period.

Meanwhile, several life and nonlife insurance companies have adopted general relief measures for policyholders, such as grace periods for premium payments and the inclusion of COVID-19 under the critical illnesses covered.

The insurance industry’s premiums jumped 2.76% to P224.97 billion as of end-September 2019 from P218.91 billion posted in the comparable nine months in 2018.

The life insurance sector accounted for P172.05 billion of net premiums written in the period, while the nonlife sector contributed 19.56% or P44.02 billion.

PHL unlikely to achieve upper middle-income status this year

THE Philippines is unlikely to reach upper middle-income country status this year, as the coronavirus pandemic takes its toll on the economy.

National Economic and Development Authority (NEDA) Acting Secretary Karl Kendrick T. Chua said he is still hopeful that they could meet the goal this year or in 2021, after the statistics agency began using 2018 instead of 2000 prices as the base for measuring the gross domestic product (GDP).

“I hope [the goal is still] attainable this year or next year with our revised GDP, but COVID-19 (coronavirus disease 2019) might delay it a bit,” Mr. Chua said in a mobile phone message on Saturday.

The Philippine Statistics Authority (PSA) earlier said the rebasing was done to ensure that economic activities of new industries such as information and communication technologies (ICT) and accommodation and food services are captured.

“The GNI (gross national income) was adjusted (during the revision) because of change in the estimation of the compensation inflow to follow the UN (United Nations) system of national accounts,” PSA Chief Claire Dennis S. Mapa said in a text message yesterday.

The World Bank defines an upper middle-income economy as having a gross national income (GNI) per capita of between $3,996 and $12,375. Among those considered as upper middle-income economies are China, Malaysia and Thailand.

The Philippines had a per capita GNI of $3,830, according to World Bank data as of 2018. This falls within the $1,026-$3,995 bracket of lower-middle income economies, which include Vietnam, Myanmar and Timor Leste.

The Philippine economy shrank by 0.2% in the first quarter, amid the Taal Volcano eruption in January and the Luzon-wide lockdown in mid-March. This was a reversal from the 6.7% and 5.7% growth recorded in the previous quarter and in the first quarter of 2019, respectively.

First-quarter data showed GNI — the sum of the nation’s GDP and net income received from overseas — declined by 0.6% compared with 5.8% growth in the previous quarter and 5% in 2019’s comparable three months.

Before the pandemic, then NEDA Secretary Ernesto M. Pernia said the Philippines could graduate to an upper-middle income status by the fourth quarter this year.

Now, the economic team is projecting flat growth or a 1% contraction this year.

However, Mr. Chua, who took over when Mr. Pernia resigned last month, said the plan to achieve this goal faces a “temporary setback” due to the pandemic.

“Dahil sa unexpected crisis natin dulot ng COVID-19, baka ma-delay po ’yan. Lahat ng bansa kasi ay nakikita po natin ’yung economic growth ay humina o nag- contract so I think, temporary setback lang ito so susubukan natin humabol. If not next year, by 2022, ’yan naman po ’yung ating pinangako (Because of the unexpected crisis caused by the COVID-19 pandemic, the plan might be delayed. All countries across the globe are slowing down or are contracting, so I think this is just a temporary setback and we will try to catch up next year or by 2022. That’s what was promised),” Mr. Chua said in a Laging Handa briefing on Saturday.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said any delay in achieving the goal of becoming an upper middle-income economy is “understandable” as the global economy faces a crisis.

“With the improvement to upper middle-income status by then, this would fundamentally give the country a better chance of also moving up further to A credit ratings,” Mr. Ricafort said in an e-mail at the weekend.

The government is eyeing to secure an “A” long-term credit rating by 2022 from its current “BBB+,” while looking to graduate to the upper-middle income status, when the Philippines will eventually lose the concessional loans it now enjoys.

However, even an “A” credit rating looks dim after Fitch Ratings downgraded its outlook for the Philippines to “stable” just three months after it gave a “positive” outlook, citing “deterioration in the Philippines’ near-term macroeconomic and fiscal outlook.”

The credit rater maintained its “BBB” rating for the country and projects a 1% contraction for the economy this year.

“At some point further into the future, especially after recovering from the COVID-19 economic losses, the Philippines may be in a much better economic, fiscal, and credit position to access loans from commercial and multilateral sources even with reduced concessions,” Mr. Ricafort said. — Beatrice M. Laforga

Which segments of the economy contributed the most to the decline in the first quarter?

Which segments of the economy contributed the most to the decline in the first quarter?

Pandemic slashes remittance lifeline as overseas Filipino workers lose jobs

By Charmaine A. Tadalan
Reporter

MELBA ARBOSO, 34, failed to send P6,000 to her family last month after she temporarily lost her job as a spa attendant amid a lockdown in the Kingdom of Bahrain where almost 4,000 people have been infected with the coronavirus.

“I haven’t been able to send money home since we got locked down,” the single mother of a 15-year-old girl back in the Philippines said in a Messenger chat. “I’ve been using my remittance budget to get by.”

Ms. Arboso is just one of about 10 million Filipino workers overseas who have been affected by the novel coronavirus that has sickened nearly four million and killed at least 273,000 worldwide.

The government calls them “modern heroes” because remittances they send home provide a steady stream of foreign exchange to help offset the widening trade gap and limit the current account deficit.

Personal remittances — whether in cash or in kind and capital transfers between households — hit a record $33.5 billion last year, a 3.9% increase from a year earlier and accounting for almost a 10th of the Philippine economy, data showed.

The data only counted money sent home by 2.3 million overseas Filipinos through official channels such as banks and remittance centers.

Now, that money stream is in danger of being choked as Filipino workers abroad lose their jobs amid the pandemic, and as travel restrictions and the closure of some companies overseas cut their deployment.

Global job losses that the International Labour Organization (ILO) had estimated to reach 25 million this year is turning the $715-billion global remittance industry upside down.

Global remittances are expected to fall by 20% this year due to the economic crisis induced by the COVID-19 (coronavirus disease 2019) pandemic and shutdown, according to the World Bank.

The projected decline, which would be the sharpest in history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country, it said in a report last month.

‘VITAL SOURCE’
Remittances to low and middle-income countries are projected to fall by 19.7% to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households.

Remittance flows to the East Asia and Pacific region, which includes the Philippines, are expected to fall by 13% this year from $147 billion in 2019.

“Remittances are a vital source of income for developing countries,” World Bank Group President David Malpass said last month. “The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies.”

More than 89,000 Filipinos overseas had either been displaced or were on a no-work, no-pay status due to lockdowns and slowdown of businesses in host countries, according to the Philippines’ Department of Labor and Employment.

“The resulting lockdowns are meant to better contain the COVID-19 outbreak, which could have far greater costs to the global economy if left unchecked,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. in Manila, said in e-mailed comments late last month.

He said a sharp decline in most economies around the world, with some risk of recession especially in the biggest host countries could cut the demand for Filipino workers overseas.

Plunging global oil prices could also slow Middle Eastern economies that host millions of Filipinos.

“The most appropriate monetary and fiscal policy measures, interventions and responses worldwide are needed immediately to prevent this health issue from evolving into something that is more economic and financial in nature,” Mr. Ricafort said.

The Philippine government has repatriated almost 25,000 Filipino workers during the health crisis, mostly seafarers displaced by the pandemic, according to the Foreign Affairs department.

The Tourism department earlier said it had secured more than 11,000 hotel rooms to house some of the Filipino workers from abroad during quarantine.

Some of them have been harassed and discriminated against along with frontline health workers after they were barred from entering supermarkets or evicted from their rented homes for being alleged virus carriers.

The government has approved about 86,000 applications for a one-time P10,000 financial aid for overseas Filipinos who lost their jobs due to the coronavirus pandemic, the Overseas Workers Welfare Administration said last month.

The agency also said it had released P207 million worth of aid to 20,739 workers who returned.

WAITING IT OUT
Camille Jazul-Salita, a 28-year-old beauty adviser for Qatar Airways where she earned as much as P70,000 a month, was one of those who came home.

“I was planning to resign in August but I did it earlier because of the coronavirus disease 2019,” she said in a Messenger chat, citing the grave outbreak in Qatar where more than 17,000 people have been infected.

“I prefer to be with my family during times like this,” the newlywed from Imus, Cavite province said, adding that she plans to enrol in a baking class at a state-owned technical school while in the Philippines.

The government should create a registry of overseas Filipinos who came home and identify industries that can employ them, Rene O. Ofreneo, professor emeritus at the University of the Philippines, said by telephone.

“The government should find a way to provide jobs for them,” said the former UP School of Labor and Industrial Relations dean. “There should be a registry of skills and know-how.”

The Labor department has said it seeks to offer a million jobs in the next three months including in infrastructure in the provinces.

Ms. Arboso, the spa attendant, chose to wait it out in Bahrain, where the lockdown was expected to end on May 7.

She’s almost out of leave credits, which her company had been converting to ensure a steady income flow to its workers. “It might be gone once my leave credits are exhausted,” she said.

Ms. Arboso has no plans to come home anytime soon even if the outbreak in Bahrain worsens. “It’s easier to find jobs here. It’s faster to get back on our feet here than in the Philippines.”

Fashion during and after the pandemic:Chic PPEs for grocery shopping, stylish pajamas for the home, clothes that last a lifetime

A PANDEMIC has forced us to hole up in our homes in little better than T-shirts and robes. In this stagnation, it’s easy to think that fashion isn’t important — but how can something not be important when it sits right on your skin?

A webinar series by the Fashion Design Council of the Philippines (FDCP), PhX Fashion Conference, and the SoFA Design Institute called “Fashion Forward Dialogues” talked to three different designers last week about how they’re dealing with the pandemic, and how they plan to bounce back in the future. The first session featured Vice-President of the FDCP and designer Rajo Laurel, the co-founder of clothing brand Plains and Prints Roxanne Farillas, and FDCP President, SoFA co-founder and Executive Director, and designer Amina Aranaz-Alunan.

Mr. Laurel makes a case for the importance of fashion even in the midst of a global crisis. “Fashion is, by nature, a means to protect ourselves: whether it be physically or mentally.” This opens up the topic of what he’s doing now, and where he plants to go: protective garments. “Never in my life would I have imagined that instead of wedding gowns or evening gowns, I’m doing surgical gowns.”

“But that’s what you need to do,” he said. In the week after the lockdown, Mr. Laurel and his smaller-than-usual workforce (those who were unable to go back to their provinces when the lockdown was announced, about 25 people out of the 500 under his employ) had been able to produce 500 personal protective equipment (PPE) units, and as of the time of writing, were producing 2,500 more. “We’re restructuring our factory, our management force, and all of our existing stores… it’s really not going to be the same,” he said. Mr. Laurel broadcast his answers on the webinar from his summer home in Batangas, giving himself a preview of what the future may hold. “This has taught me a lot in terms of how to conduct our business in the future. Everything was done through devices,” he said. “We all must learn. I believe that in order to survive… we need to adapt to what’s next.”

And what’s next is apparently a line of attractive but protective outfits. “What we’re doing right now is creating an immediate collection for people to feel safe to go out of their homes, slowly. That will still have to be comfortable, fashionable, and washable.” He describes them as “not medical grade protective garments.”

“It’s very difficult to look chic in a bunny suit,” he said, describing the PPEs. “We need to rethink that. How will my client feel good when she’s doing the groceries?”

Mr. Laurel is also looking into clothes for the home — but not the way Filipinos see house clothes. “What’s next? Maybe it’s comfortable pajamas.” Meanwhile, he added quite wryly, “I don’t foresee anybody coming to me for a ballgown in the next 18 months.”

Ms. Farillas plans to do the same, and is currently working on masks and protective attractive equipment (which really should have its own acronym at one point), calling them multipurpose outerwear. “They want to feel good. They want to feel inspired. Fashion is inspiration,” she said. “They’ll start dressing up. When they start dressing up, they’ll feel better.” On an optimistic note, she said, “After that, we will still go on with our normal collections.”

Meanwhile, Ms. Aranaz-Alunan has been busy with her attempts to restructure SoFA to make it adaptive to a post-pandemic world. “We see this crisis as a challenge.” As for her work in design, Ms. Aranaz-Alunan reported that some of the export orders for her bags had been cancelled, leaving her with excess stock.

“We really need to evolve. We can’t expect that we’re going back to the old way of doing things, producing the same products that we do.” She acknowledges the changes that will have to occur, citing for one: “What we do is handmade. That interaction between people is really important. We really have to think about the social distancing measures in the factory — even the fact that the materials we get come from different parts of the country.”

In a season of loss, we tend to hold on to the things that we really deem important — or using the catchphrase of the season: “essential.”

“We used to do three collections a year. Now, all I want to do is just maybe one, and spread it out. That was the mindset of our industry. We’re very excessive,” said Mr. Laurel. “Half our friends and half our clients have enough already in their closets. Now is the time to really evaluate — how can we make really special items that are really needed by our clients?”

“We’re not selling fast fashion; we’re not selling things that you wear for one season,” said Ms. Aranaz-Alunan. “We really can start creating things that hopefully last a lifetime.” — Joseph L. Garcia

PSEi seen to rise past 6,000

By Denise A. Valdez
Reporter

THE Philippine Stock Exchange index (PSEi) is projected to end the year above the 6,000 level, down from earlier estimates of closing within the 8,600-8,900 range, as an effect of the coronavirus disease 2019 (COVID-19) pandemic.

A capital markets research for April 2020 prepared by First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said the recovery of the stock market is expected to begin by the second half of 2020.

“Equity investors may take time to get back into the market given the huge losses they have suffered and the need to prepare for a more secure future. We think, however, that the situation would start normalizing (of sorts) in H2 (second half) and we see PSEi ending the year above 6,000,” it said.

UA&P Senior Economist Victor A. Abola, who was one of the authors of the research, said in a mobile message that the second half would have to signal resumption of businesses in several sectors.

“By H2, the economy would have gone into recovery mode (although not even 90%),” he told BusinessWorld. “A lot of the uncertainty that exists today — reopening of the entire country to full economic activity, health protocols, and investor sentiment in general should improve significantly from the lows and we have seen up to this point.”

“Below 6,000 is an aberration for our stock market,” Mr. Abola added.

The PSEi has dropped to an eight-year low on March 19, falling 13.34% to 4,623.42, when the COVID-19 crisis started resulting in lockdowns both locally and abroad.

FMIC’s research noted the main index suffered the region’s biggest loss of 21.6% in March. Since then, the PSEi has been trading within the 5,342-5,946 range in April, and has sustained the 5,500-5,600 level in the first week of May.

The main index closed at 5,621.94 on Friday, down 31.22 points or 0.55% from the previous session.

However, FMIC’s previous outlook for the PSEi to end 2020 within 8,600-8,900 would have to adjust as recovery may not be as fast as desired.

“With millions of people left jobless and global supply chains in disarray, COVID-19’s dreaded economic impact can only be negative and the future uncertain,” FMIC said.

The Philippines has implemented localized quarantines since the middle of March, covering initially the island of Luzon, which accounts for about 70% of the country’s gross domestic product.

Easing of the quarantine started on May 1, but Metro Manila and its nearby cities remain under quarantine until May 15.

An announcement on the extension or lifting of the Metro Manila lockdown is expected early this week.

Bain sees private equity deals

By Denise A. Valdez
Reporter

THE Philippines is seen able to close at least two private equity (PE) deals this year despite a regional slowdown due to challenges brought by the coronavirus disease 2019 (COVID-19) pandemic.

United States-based management consulting firm Bain & Co., Inc. said the Philippines might benefit in global efforts to diversify supply chains and focus on business process outsourcing (BPO) to cope with the economic decline.

“I think there’s going to be a slowdown [in PE deals] in 2020, but possibly, we’ll come out of this year with a couple or three deals in private equity in the Philippines and possibly go back up from there in 2021,” Bain Partner Alessandro Cannarsi said in a phone interview last week.

“I don’t think the deal flow will completely dry up. In fact, we’ve seen that in the past five years, private equity firms that generated the best returns were those that kept investing during the down cycle,” he added.

Despite 2019 being a challenging year for PE firms in Southeast Asia, with deal value slipping to $12 billion from $14 billion a year ago, Mr. Cannarsi said the COVID-19 pandemic may change the situation in favor of countries like the Philippines.

“The Philippines is one of the few countries in the world, that according to the IMF (International Monetary Fund), can still pull off a positive GDP (gross domestic product) growth in 2020, which is good,” he said.

The IMF said last month that the Philippines could record a 0.6% GDP growth this year, better than its projections for Thailand (-6.7%), Malaysia (-1.7%) and Indonesia (0.5%).

Aside from GDP, Mr. Cannarsi also said the Philippines is poised to benefit from the growth of technology-driven industries and the diversification of global supply chains after the COVID-19 pandemic.

“If you think about it, we’re going through a large experiment in doing things remotely,” he said. This is expected to result in the growth of sectors like online shopping and digital healthcare where the Philippines can take a role in.

“Sectors that have revenues in markets like the US such as BPO, IT (information technology) services, where the Philippines is strong, could get a leg out in attracting private equity investments interest,” Mr. Cannarsi said.

The other element is the increasing tension between US and China, and Japan’s plans to pull out companies in China.

“[The Philippine has] a flourishing services sector, which is strategically well-located to diversify some of the supply chain for western and Japanese companies. And because of the high English communication skills in the Philippines compared to other Southeast Asian countries, it is very advertised in the west,” Mr. Cannarsi said. “I think it’s a candidate for actually benefitting from some diversification of the supply chain.”

In order to attract PE firms into the country, Mr. Cannarsi said the Philippines can work on enhancing corporate governance standards, on the company level, and increasing transparency on deal flows, on the country level.

He said it matters that there are fair and strict but also encouraging regulations to make it easy for funds to do buy-outs or raise capital to increase the growth of Philippine companies.

With these in place, Mr. Cannarsi said “you will make it easier for private equity funds globally to look at Filipino companies and invest with confidence.”

Repertory, MSO postpone performances to next year

TWO major cultural groups have announced the cancellations of their performance seasons due to the ongoing COVID-19 pandemic.

Repertory Philippines (Rep) will resume its theatrical productions in 2021, Rep’s Board of Trustees announced in a statement published on Facebook on May 7. Meanwhile, the Manila Symphony Orchestra (MSO) has also said that it is cancelling its 2020-2021 season due to the pandemic.

“We had no choice but to take this step to comply with the government’s regulations on mass gatherings and to ensure the safety of the MSO community and supporters,” the MSO said in a statement released to the press.

“Despite the current situation and limitations, we remain committed to bringing fine orchestral music to you,” said the MSO. “We are finding other ways to continue serving you through performing music that provides comfort and solace during these difficult times. We have recently created videos while in quarantine which we have dubbed ‘Tagpi-Tagping Damdamin: MSO in quarantine video series.’’ The videos are available on the MSO YouTube channel.

So far, the video series includes a performance of Ennio Morricone’s “Nella Fantasia” (https://www.youtube.com/watch?v=ceKQHi-9OKQ); “Tifa’s Theme” from Final Fantasy: (https://www.youtube.com/watch?v=Yls4gqDNkdw); and the Beatles song “Let it Be” (https://www.youtube.com/watch?v=wA33vfMIYMU).

The Rep Theater for Young Audiences (RTYA) production of Snow White and the Dwarfs, which was originally scheduled to run from Sept. 12, 2020 to Jan. 10, 2021, has been postponed for September 2021.

“[The] Department of Education (DepEd) and Department of Health (DoH) have deemed it unsafe for students to go out on field trips and tours this year, even after the resumption of classes this September. Since [the] majority of the RTYA audiences are students, Rep will duly hold off this production to next year,” the announcement said.

Rep’s production of the musical Carousel, which was originally scheduled for May 1 to 24, has also been pushed back to February 2021 as the opening production of its 84th season.

Meanwhile, this year’s Workshop for the Performing Arts is also canceled. Online workshops will be offered to interested students in July.

Rep will stay connected with audiences online through REPisodes, a series of digital shows on its Facebook page (https://www.facebook.com/repertoryphilippines/).

The second REPisode, titled “Stage Kiss and Tell,” features the cast and production team of Rep’s production of “Stage Kiss” — this year’s season opener — on May 11 (8 p.m.). Participants in the behind the scenes roundtable discussion include director Carlos Siguion-Reyna; set designer Ohm David; and cast members Missy Maramara, Tarek El Tayech, and Jamie Wilson. The project is in support of the Open House fundraiser (https://www.facebook.com/OpenHouseFundraiser/) which gives aid to displaced performing arts workers during the COVID-19 crisis. To donate, visit http://bit.ly/DonateOpenHouse.

Rep is also exploring possibilities of showcasing full length shows online.

The theater company also announced that season passes for the 83rd season may be refunded or applied for use for the 2021 season. For more information about this, e-mail marketing@repphil.org or repphilfoundation@gmail.com.

For more updates on the MSO, visit its Facebook page at https://www.facebook.com/manilasymphony/.

Investors keen on MPIC as stocks rise after Duterte apology

By Marissa Mae M. Ramos
Researcher

METRO Pacific Investments Corp. (MPIC) was among the companies whose stocks saw renewed investor interest after President Rodrigo R. Duterte’s apology to Manuel V. Pangilinan and the Zobel brothers over his remarks about the businessmen’s companies in recent months.

Data from the Philippine Stock Exchange showed a total of 533.84-million MPIC shares worth P1.48 billion being traded last week, making it the fourth most actively traded stock in the local bourse that time.

Shares in the Pangilinan-led company closed higher by 11.3% week-on-week to P2.86 apiece from P2.57 apiece on April 30. Year to date, the stock is down 14.9%.

“The biggest driver [last] week was the reconciliatory message of President Duterte to MPIC’s principals (the Pangilinan Group) and the Ayala Group,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in an e-mail.

The apology, according to Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco, “deescalated the tensions” between the government and two of the country’s biggest water concessionaires — MPIC’s subsidiary Maynilad Water Services, Inc. and the Ayala-led Manila Water Co., Inc.

“The move has lowered the perceived regulatory risks and has brightened the prospects on negotiations, tilting its direction towards a favorable water concession contract for both parties,” Mr. Tantiangco said in a separate e-mail.

Mr. Duterte apologized to the Zobel brothers and Mr. Pangilinan in a speech last Monday, which he said was triggered by the businessmen’s assistance during the coronavirus disease 2019 (COVID-19) crisis. MPIC’s per-share price gained 13.5% the next day.

Mr. Duterte also said he was open to drafting new contracts for the water concessionaires.

Late last year, Mr. Duterte threatened to file economic sabotage cases against Maynilad and Manila Water over allegedly onerous provisions in their contract with the government.

As of December 31, 2019, Maynilad is 52.8% and 27.19% owned by MPIC and DMCI Holdings, Inc., respectively.

Members of the so-called “MVP Group” have been actively working with the government in building quarantine sites and providing necessary medical equipment and other basic needs for frontline workers.

In the first quarter, MPIC reported a lower core net income — the first in its history — brought by the adverse effects of the enhanced community quarantine (ECQ) in mid-March to contain the spread of COVID-19. Core net income in the first three months dropped by 6% to P3.4 billion while net attributable income declined by 47% to P1.9 billion.

“[T]he decline in its core net income could get deeper this second quarter amid the longer period of the ECQ in mainland Luzon…,” Philstocks’ Mr. Tantiangco said.

He said the company’s light rail segment would be “one of the most heavily hit segments” as its operations were halted during the ECQ and will be expected to operate at a limited capacity once Metro Manila transitions to a general community quarantine.

Earnings of MPIC will still be driven by its segments on power and water albeit hit by weaker economic activities in commercial and industrial properties, Mr. Tantiangco said.

He added that “toll operations are still expected to be weighed by reduced toll road traffic amid the restrictions inland travel brought by the quarantine.”

For PNB Securities’ Mr. Lisbona: “It is likely also that the implementation of toll rate hikes will be deferred to the latter part of the year, another factor that will weaken toll road earnings,” he said, adding that they expect the company’s utility and healthcare businesses to “remain resilient but not pick up the slack.”

Both analysts pointed out the company has been preserving its cash position by postponing share buy-back operations.

“Currently, MPI’s current ratio is at 1.37 times, which shows that it has ample liquidity in meeting short-term obligations. Debt-to-equity ratio, meanwhile, is at 1.04 times, higher than its 5-year average of 0.78 times. This means that the company is getting more tilted to debt financing,” Philstocks’ Mr. Tantiangco said.

“MPIC’s fundamentals are currently challenged and this is expected to weigh on its share price movement. On the upside, however, the share could get a boost if there will be further positive developments on the negotiations between the government and Maynilad,” he added.

Mr. Tantiangco placed MPIC’s support at P2.50 and resistance at P3.

PNB Securities’ Mr. Lisbona said the company “has since regained some composure” since the peak of panic selling on March 23 when it closed at P2.28 apiece.

“We see support at P2.28 and P2.40 and resistance at P3.00 to P3.18 for the short-term,” he said.

MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group, which it controls.

WFH during the ECQ: BAVI’s Ronald Mascariñas

FORCED to do much of his work at home with the enhanced community quarantine in effect in the National Capital Region and nearby provinces, Ronald Mascariñas, Bounty Agro Ventures Inc. (BAVI) president and general manager, said that the setup is not much of an adjustment to him as he had been working from home on occasion even before the coronavirus disease 2019 (COVID-19) pandemic rendered outside movement limited.

He, however, said the current situation has been a challenge to the poultry company as a group, forcing them to recalibrate their business approach and taking into account the lessons and opportunities the situation presents.

BusinessWorld reached out to Mr. Mascariñas online where he got to share his experience working from home (WFH) and how COVID-19 would affect their business moving forward.

The interview has been lightly edited.

HOW MUCH OF AN ADJUSTMENT IS WORKING FROM HOME FOR YOU?

WFH is not new to me. I normally go to the office only for meetings or to sign documents which is about three times a week. I find no sense going to the office [and] open my laptop when I can do exactly the same from home (in Laguna) without throwing away three hours of driving.

A MONTH OR SO INTO THE ECQ, WHAT ARE THE UPSIDES AND DOWNSIDES YOU HAVE OBSERVED FROM DOING WFH IN RELATION TO WHAT BOUNTY AGRO VENTURES INC. WANTS TO ACHIEVE? ANY CHALLENGES YOU HAVE ENCOUNTERED IN DOING SO (E.G. SLOW INTERNET CONNECTION, DIFFICULTY REACHING YOUR OFFICERS, ETC.?

Communication was never a problem. My management team is used to getting e-mails, Facebook messages or phone calls from me from home. Globe installed some type of aerial antenna in my house many years ago so signal for voice calls is very strong.

WHAT IS YOUR PREFERRED MODE OF COMMUNICATION WITH YOUR PEOPLE (SKYPE, ZOOM, MESSENGER, E-MAIL, TEXT MESSAGE AND PHONE)?

In order of priority: 1. E-mail because I want communications organized in a folder; 2. Messenger; 3. Text message; 4. Phone

WHERE IS YOUR WFH OFFICE?

It is usually in the library but every now and then I do work at the patio.

HOW DO YOU START YOUR DAY FOR WFH? WHAT TIME DO YOU START WORKING? DO YOU DRESS UP FOR IT? UNTIL WHAT TIME DO YOU USUALLY WORK FROM HOME?

I usually start at 8 a.m., take my precious 30-minutes nap, and work until 11 p.m.

DO YOU TAKE BREAKS WHILE AT IT? IF SO, WHAT DO YOU DO?

My usual break is reading and answering comments from my over one million followers on my (Facebook) page. While I have a full-time page admin answering the comments, I need to guide her on how to answer FAQs for every new post I make. This gives me a real-time update on the pulse of my market. I watch one or two episodes on Netflix before going to bed. On Netflix I like House of Cards, Race to the White House and Bolivar. You should watch them.

ANY MEMORABLE EVENTS WHILE WFH?

We discovered two new strong trade channels during the quarantine. I am excited that we will come out stronger after this.

One of the new channels are the rolling stores, which we will continue even after the quarantine and another one is expanding our product offering, carrying basic products from other companies as none of the major companies organized to bring their products close to the locked-out communities.

For the second one, products we have carried to date were from sister companies Holly Farms for pork products and Bounty Farms for table eggs. Virginia Foods for processed meat products like hotdogs. Gardenia bread. We’re still finalizing which cooking oil to carry.

We have also relaunched our fresh produce business which we shelved 10 years ago. Clear opportunity from agricultural produce rotting in the countryside because they do not have a way to bring it to the consumers. This industry is bigger than the poultry industry.

WHAT ARE THE KEY POINTS YOU USUALLY TACKLE WHEN WFH? IS IT ANY DIFFERENT WHEN YOU ARE IN YOUR REGULAR OFFICE IN ORTIGAS?

Monitoring and reinforcing execution of the new trade channels. Management direction is very different since our traditional trade channels have been shut off by the quarantine restrictions. Our farms continue to produce the usual volume of chicken and we need to quickly find new markets for that.

APART FROM BAVI’S REGULAR BUSINESS, CHOOKS-TO-GO IN PARTICULAR, YOU ALSO ARE INVOLVED IN OTHER CONCERNS AS WELL, AMONG WHICH ARE 3X3 BASKETBALL AND THE MAHARLIKA PREMIER BASKETBALL LEAGUE. HOW DO YOU BALANCE THINGS SO EVERYTHING WILL BE COVERED?

I rely on my key personnel for execution. Once we agree on what needs to be done, I do not want them to bother me with day-to-day concerns. They message or call me only if it is urgent, otherwise they update me weekly by e-mail.

WITH HOW THINGS STAND RIGHT NOW, WFH WILL BE PART OF THE “NEW NORMAL” FOR THE IMMEDIATE FUTURE AT LEAST, HOW ARE YOU PREPARING FOR IT? IS IT BAVI READY FOR IT?

From Day One of the ECQ announcement, my stance was for a worst-case scenario that this will last up to the end of the year. While we lost close to 50% of sales from our traditional trade channels in the first week of ECQ, we are improving every week and are behind by just a little over 10%.

WHAT IS YOUR MESSAGE TO THE BUSINESS COMMUNITY AMID COVID-19 AND ECQ AND MOVING FORWARD?

We cannot just wait and watch until this is over. If we do, there might be no business left after the ECQ. — Michael Angelo S. Murillo

Exporters group seek fast passage of stimulus bill, more farm funds

By Jenina P. Ibañez
Reporter

PHILIPPINE exporters are calling for the immediate passage of the government’s economic stimulus bill, while requesting for increased funding for the agriculture industry and improved loan distribution for small businesses.

Their plea is in a letter dated May 5 through the Philippine Exporters Confederation, Inc. (Philexport) to Albay Representative Jose Ma. Clemente S. Salceda, who heads the Economic Response Stimulus Package cluster of the Defeat COVID-19 special committee in Congress, along with representatives Stella Luz A. Quimbo and Sharon S. Garin.

The House is currently legislating the proposed Philippine Economic Stimulus Act (PESA), which would inject P475 billion into the economy in the first year of its 2020 to 2022 coverage to help businesses recover from the effects of the coronavirus disease 2019 (COVID-19).

“Because of the urgent nature and impact of this bill, we strongly call for the bill to be passed in a month’s time especially for the benefit of our MSMEs (micro, small, and medium-sized enterprises) and their stakeholders, which account for some 60% of the country’s employment and 30% of our GDP,” Philexport President Sergio R. Ortiz-Luis Jr. said in the letter.

Philexport said it supports the position of the Philippine Chamber of Commerce and Industry, which called for more farming aid, public transport subsidies, and loans flexibility for MSMEs. Philexport proposed that the P10-billion budget for agri-fishery be at least doubled to help address productivity, technology, and climate change issues.

The export business group said the lending scheme from SB Corp. is welcome, but also proposes that Negosyo Centers be deputized to accept and review applications, especially in provinces.

“This function may also be delegated to industry associations also as a form of vetting. Likewise, anticipating the huge number of applications, we recommend that loan proceeds be distributed via bank transfers to lessen people movement and facilitate the release,” it said.

The group also said the digitization of government functions should be fast-tracked to improve trade facilitation and ease of doing business.

They also said that availing grants and loans from PESA should not disqualify businesses from availing of other forms of relief measures.

Philexport also asked for clarity on certain provisions, such as the application of PESA in Luzon businesses affected by the enhanced community quarantine (ECQ). The group recommended that PESA be applied to all businesses that have been critically affected by the pandemic nationwide.

Exporters also asked for clarity on the wage subsidy coverage for two months of payroll for critically impacted business, suggesting that the two months include the period covered by the ECQ and the month after its lifting.

“There should also be a provision stating the minimum requirements, at most Certificate of Employment and Compensation from the employer with just the latest payroll slip. Proceeds may be coursed through the employers who already have the payroll system to facilitate the disbursement,” Philexport said.

PESA is currently being discussed at committee level.

Casa de Memoria holds charity fundraising online auctions

CASA DE MEMORIA, Palacio de Memoria’s auction house, celebrates its fourth anniversary with two online auctions.

The two auctions — Primero auction and the Segundo anniversary auction — will be held at the official website (www.casadememoria.com) at 2 p.m. on May 30 and 31, respectively.

The auctions will showcase a curated selection of historical artworks, antiquities, and heirlooms of European-Filipino provenance.

The items for sale at the Primero auction include a rare “Islas Filipinas” map by mapmaker Francisco Coello and Antonio Morata; an ivory and bronze art sculpture by Louis Barthelemy of ethical provenance; an art nouveau lamp and a glass vase by Émile Gallé; and two 20th century Murano goblets.

For the Segunda anniversary auction, items for sale include paintings, furniture, sculptures and centerpieces, and religious antiques.

Segundo’s selection of paintings reflect the cultural richness of Europe during the 18th to 20th centuries, such as Pablo Picasso’s Sala Gaspar, and Betsy Westendorp de Brias’ Summer Nights in Madrid. The furniture on auction include a 19th century sofa, and a six-piece set of Carlos IV side chairs which are carved, painted, and gilded beech. Decorative art pieces include a cup-shaped centerpiece in rose quartz, an intricately decorated French amphora, a Peruvian altar piece by Manuel Palomino, and a Baroque-style golden reliquary of the virgin martyr Saint Euphrasia.

Proceeds from both auctions will go to funding the emergency quarantine facility (EQF) in Sta. Ana Hospital Manila for COVID-19 patients. Designed by WTA Architecture and Design Studio, the EQF can accommodate 15 beds, a testing box, sanitation and disinfection areas, and a nurse’s lounge.

“Our current situation, while it may be difficult, has taught us the value of helping one another. These two auctions are special for us as we enable ourselves to reach out to our community while showcasing the beauty and legacy of the illustrious past,” said Palacio de Memoria general manager Camille Lhuillier said in a press release.

Registration for both auctions is through bit.ly/CDMPrimero20. Absentee bids can also be placed prior to the live auction.

For more details, call 8253-3994 or e-mail hello@casadememoria.com. For more information, visit https://www.casadememoria.com/ or follow @thecasadememoria on Facebook and @casadememoria on Instagram. — MAPS

1...9,5699,5709,571...14,244Page 9,570 of 14,244
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube