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Peso weakens but comes off lows after stocks rebound

THE peso weakened against the dollar Friday as the market absorbed news of the further spread of coronavirus disease (Covid-19) in the Philippines, but came off its lows after a stock market rebound.

The currency ended trading at P51.03 Friday, following a P50.85 close Thursday, according to data from the Bankers’ Association of the Philippines.

Week-on-week, the peso declined from its March 6 close of P50.64.

The currency opened the session at P51.25., hitting a low of P51.31 and a high of P50.85.

Dollar volumes rose to $1.416 billion from $1.375 billion Thursday.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said that the currency’s decline came on the back of an increase in domestic Covid-19 infections.

“The peso was holding up early part of the week until yesterday morning when it was clear that local transmission of Covid-19 in Metro Manila is escalating,” he said in a text message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the peso close on Friday was weakest in more than two weeks.

The drop came a few hours after the announcement of the community quarantine declaration for Metro Manila “as this could lead to slower economic growth and some stockpiling by households,” Mr. Ricafort said in a text message.

Mr. Ricafort also noted that the peso recovered from its intraday weakest of P51.31 reflecting the positive turnaround in the local stock market.

The Philippine Stock Exchange rose 57.67 points or 1% to 5,793.94 after falling 9.71% Thursday, the biggest decline in 12 years at the height of the subprime mortgage crisis.

President Rodrigo R. Duterte imposed one month of movement restrictions into and out of Metro Manila on Thursday to prevent the further spread of the virus. The restrictions cover domestic land, sea, and air travel to and from the National Capital Region starting March 15.

The Department of Health has registered 52 Covid-19 patients as Thursday, with two deaths reported. — Luz Wendy T. Noble

Ricoh Philippines: Celebrating 20 years, three loves, one growing company

Ricoh Philippines, Inc., the local subsidiary of leading global manufacturer of office automation equipment Ricoh Company, Ltd., recently marked its 20th anniversary in the country with the theme of “Prominence”, which expressed the Company’s appreciation for its hardworking employees and loyal partners through the years.

Guided by “the spirit of three loves”–love your neighbor, love your work, and love country–principles formulated by founder Kiyoshi Ichimura that steers how it conducts business around the world, Ricoh Philippines is stronger than ever, growing its operations as the country’s exclusive distributor of multifunction devices (MFD), printers, production printers such as Direct-To-Garment (DTG) machines, and visual communications software solutions including complete after-sales support.

Ricoh (Philippines), Inc. President and CEO Frederic Sulit is shown acknowledging their partners during his opening remarks.

“Our employees and partners have empowered our Company to go from strength to strength,” Frederic Sulit, President and CEO of Ricoh Philippines, said. “We’re further emboldened by their continued support to face even more challenges which we will turn into opportunities to serve the country through various innovative solutions.”

Shown are Ricoh (Philippines), Inc. past and current leaders (l-r) Eileen Michaela Gallardo, RPH CFO, Cecil Bien Sebastian, Frederic Sulit, RPH President and CEO, and Manuel S. Peralta with RPH Milestone awardees.

Directly reporting to Ricoh Asia Pacific Pte. Ltd, which is based in Singapore and is exclusively owned by Ricoh Company, Ltd, Japan, Ricoh Philippines shares its parent company’s commitment to not only supply but also use the most advanced innovations in the markets it operates in and to invest in practices that promote sustainability.

“Our future lies in being able to use our core strengths to address key issues in our society as our parent company has adopted eight of the United Nations Sustainable Development Goals to create a sustainable economy, a sustainable society, and a sustainable environment,” Sulit said.

Officials of Ricoh Philippines are shown receiving the Award of Appreciation from the Philippine Center for Print Excellence Foundation.

To create a sustainable economy, Ricoh Philippines will provide products and services to its customers that will help improve productivity and eliminate waste.

To create a sustainable society, Ricoh will increase investment in CSR activities as well as in internal health and wellness programs for employees, which will further encourage pursuing a healthier lifestyle.

With its technologies, Ricoh aims to improve the overall quality of life and help customers produce only what they need when they need it to create a sustainable environment.

Sulit believes “Ricoh’s business is not only about being profitable, but also about being relevant.”

Shown celebrating Ricoh’s 20th Anniversary are (l-r) Hannah Castillo, Ricoh (Philippines), Inc. Product Management Head; Eileen Michaela Gallardo, RPH CFO; Frederic Sulit, RPH President and CEO; Irene Santos, RPH General Manager for Sales Division, and Orly Closa, RPH General Manager for Customer Service Division.

PSEi’s 9.71% decline marks its biggest one-day percentage drop since 2008

THE STOCK MARKET on Thursday plunged nearly 10% to its lowest since 2012 as investors headed for the exit amid deepening fears over the coronavirus disease 2019 (COVID-19) outbreak. Read the full story.

PSEi’s 9.71% decline marks its biggest one-day percentage drop since 2008

Stocks plummet on coronavirus fears

By Denise A. Valdez
Reporter

THE STOCK MARKET on Thursday plunged nearly 10% to its lowest since 2012 as investors headed for the exit amid deepening fears over the coronavirus disease 2019 (COVID-19) outbreak.

This as the World Health Organization (WHO) on Wednesday officially declared the spread of the coronavirus as a global pandemic.

PSEi’s 9.71% decline marks its biggest one-day percentage drop since 2008

The benchmark Philippine Stock Exchange index (PSEi) gave up 616.99 points or 9.71% to 5,736.27 on Thursday — its biggest single-day decline since the 12.27% drop in Oct. 27, 2008 at the height of the global financial crisis.

Thursday also saw the PSEi close at its lowest since the 5,636.59 finish on Dec. 18, 2012.

The bearish PSEi plummeted by as much as 10.33% to 5,697.13 during the intraday, triggering the circuit breaker and halting trade for 15 minutes until 3:08 p.m.

The circuit breaker, which is activated when the main index drops by at least 10%, was last used on Oct. 27, 2008.

“Calling today a bloodbath would be the understatement of the year,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message. “As selling pressure from investors stampeding for the exits reached a boil, the PSE’s 10% circuit breaker was hit shortly before 3 p.m.”

Value turnover yesterday stood at P7.96 billion with 981.13 million issues switching hands. Net foreign selling reached P773.90 million, a turnaround from Wednesday’s net foreign buying of P350.50 million.

Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said it is harder to deal with the current situation as the core problem isn’t something that can be fixed through fiscal and monetary policies.

“If you’re going to compare it to the past, for example the global financial crisis and the Asian financial crisis, back then those were something that you can resolve through the use of stimulus… This time it’s different. What we really need right now is a cure to the virus,” he said in a phone call.

“We know COVID-19 has already spread throughout the world. Many countries are already affected. There are already threats of an economic slowdown, recessions even. Once these happen, it will likely have a heavier impact on the Philippines than in the past,” he added.

Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said the local stock market “followed the sentiment of the global fears on the epidemic.”

“Its effects are apparently seen in…how it slows down the economic activities of these nations,” he said in a text message. “As we are in the bear market, we could probably expect a slight rebound (today) due to oversold levels… But it may continue to go on a downward bias…depending on the way the government contains this epidemic locally as well as globally.”

For Philstocks’ Mr. Tantiangco, until an actual cure to the virus is discovered, the market is expected to remain on the down side. “The primary backdrop is still the lingering epidemic,” he said.

PNB Securities’ Mr. Lisbona agrees: “The market will be volatile the next few days with bargain hunters coming in to pick up badly beaten names. Selling pressure on the whole will prevail, however.”

President Rodrigo R. Duterte was scheduled to address the public on Thursday night, amid the increasing number of COVID-19 cases in the country.

The Department of Health announced three new coronavirus cases in the country, bringing the total number to 52.

Finance Secretary Carlos G. Dominguez III, who is under home quarantine after contact with a known COVID-19 case, told reporters yesterday the government has “all the tools — medical, financial and monetary — to successfully handle this situation.”

Meanwhile, the peso sank against the greenback on Thursday due to negative investor sentiment as the COVID-19 continues to spread.

The local unit finished trading at P50.85 against the dollar on Thursday, plunging 30 centavos from its P50.55 close on Wednesday, according to data from the Bankers Association of the Philippines.

The peso opened the session at P50.65. The peso sank to the P51-per-dollar level intraday, dropping to as low as P51.05, while its intraday best was at P50.63 against the greenback.

‘Never before seen’:PHL braces for pandemic

By Norman P. Aquino Special Reports Editor
and Vann Marlo M. Villegas Reporter

A 48-YEAR-OLD Filipino worker at the Philippine office of accounting firm Deloitte was confirmed to have been infected with a novel coronavirus on March 5 after traveling to Japan in the previous month. He was the fourth case in the Philippines.

In the next three days, Philippine health authorities confirmed six more infections, including the first local transmission of the virus between a Filipino couple from San Juan City near the capital.

By March 9, the Department of Health had identified 468 people who may have been exposed to the coronavirus disease 2019 (COVID-19) from cases No. 4 to 10. Six people had been isolated by then, according to the agency.

Jaime A. Almora, president of the Philippine Hospital Association, thinks the government has been doing an admirable job in trying to contain the virus.

“We’ve seen their circulars and their orders, and they’re pretty fast in their response,” he said in an interview. Authorities have also imposed travel bans and quarantine procedures in a timely manner, Mr. Almora said.

On March 9, the government reported 14 new cases of the virus in the Philippines, prompting President Rodrigo R. Duterte to suspend classes in Metro Manila for five days to prevent an outbreak in schools.

To date, at least 49 people have been infected in the Philippines, 46 of them just this month.

DoH raised the country’s alert level to code red sublevel 1 — the fourth in a five-level alert system — on March 7 after the first local transmission was reported and as health authorities “prepare for a possible increase in suspected and confirmed cases.” Mr. Duterte declared a public health emergency a day later.

The last and most severe alert level — code red sublevel 2 — will only be raised if there is evidence of widespread “community transmission” that is more than what the government can handle.

The COVID-19 pandemic — so declared by the World Health Organization on March 12 — was first reported in December in the city of Wuhan in central China’s Hubei Province. The coronavirus strain has since spread to at least 121 countries and territories, killing more than 4,000 people and sickening about 118,000 more, mostly in China.

“We have never before seen a pandemic sparked by a coronavirus,” WHO Director-General Tedros Adhanom Ghebreyesus said Wednesday. “And we have never before seen a pandemic that can be controlled at the same time.”

The novel coronavirus may be less deadly than the severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome-related coronavirus (MERS-CoV) at the start of the century and in 2012, respectively. But it is more communicable, as shown by its rapid spread.

SARS killed a tenth of the people who got it, while MERS was even deadlier, killing 34% of patients. Fatal cases for COVID-19 are lower at 3.4%.

Symptoms for the novel coronavirus can be either mild or severe and can include fever, a cough and shortness of breath. It is also possible to be infected without showing symptoms, according to the WHO.

Before last week, the Philippines had not reported any new cases for almost a month, leading the WHO to commend the country for the way it had handled the contagion.

That seems to be changing now, especially after criticisms of slow public announcements about new cases, and after senators found out about the dearth in testing kits.

On March 9, senators criticized health officials for failing to buy enough testing kits for suspected carriers of COVID-19.

The agency only has 2,000 kits and expects to receive 4,500 more from the WHO, Alethea de Guzman, a DoH medical specialist, told a Senate hearing this week.

An imported COVID-19 test kit costs about P6,000.

The department is reviewing a decision it made earlier to limit the use of test kits to travelers from countries with cases of COVID-19, she said.

“I’m a bit concerned because it’s important for us to be able to test as many people as possible, but we only have this limited number of test kits,” Senator Maria Lourdes Nancy S. Binay told BusinessWorld.

Senator Imee R. Marcos said she and her fellow lawmakers “felt a bit nervous” when they learned about the number of test kits available.

“You have a population of 110 million, and you can only test 2,000 people?” she said in an interview.

The Food and Drug Administration (FDA) has since approved COVID-2019 test kits developed by scientists from the University of the Philippines-National Institutes of Health (NIH) to help speed up the diagnosis.

“At least there are now locally made testing kits,” Ms. Binay said. “I hope DoH would be more proactive in addressing the problem moving forward.”

Health Secretary Francisco T. Duque III earlier noted that testing 100 million people was impractical.

ALGORITHM
Rabindra R. Abeyasinghe, WHO representative in the Philippines, has ruled out expanding testing capacity now given a global shortage in testing materials.

“So many countries are doing testing based on the capacity of their laboratory systems and expertise levels,” he told a House of Representatives hearing on March 11.

Mr. Abeyasinghe said there’s an effort on the part of the government to expand capacity, but protocols must be followed to conserve precious resources. “Protocols need to be followed so that we do a risk assessment before testing,” he said.

The WHO representative also said the Health department had developed over the years a “clearly defined algorithm” in evaluating cases and containing infections. That expertise has been shared with the Regional Epidemiology and Surveillance Units of its neighbors, he pointed out.

Mr. Duque said the Philippines is beefing up its testing centers by preparing five more laboratories outside the capital aside from the Research Institute for Tropical Medicine in Muntinlupa City and National Institutes of Health in Quezon City.

“We have expanded our contact-tracing by increasing the number of deployed surveillance teams to respond to the newer cases,” the health chief.

He added that there was a proposal to expand the “surveillance scale” for influenza-like illnesses to “increase the index of suspicion.”

The plan would increase DoH’s surveillance capacity by five times, and it needs a P135-million budget for that, Mr. Duque said.

The agency also needs to level up its management artillery, hospital supplies and equipment, and it’s seeking an additional P2.9-billion budget for the next three months that will be provided by the nation’s charity office and gambling regulator.

DoH is also asking for a separate P2-billion supplemental budget from both Houses of Congress. The House of Representatives approved a lower budget of P1.6 billion before lawmakers went on an almost two-month Holy Week break on March 12.

The Senate might hold a special session during the break to pass the budget bill, Senator Juan Miguel Zubiri said on March 11.

Norman Dennis E. Marquez, associate director of the Health Sciences Department of the Ateneo de Manila University, said health authorities should aggressively test persons under monitoring, not just persons under investigation.

“Asymptomatic individuals may be carriers and infect others,” Mr. Marquez, who said he does not speak for the university, said in an e-mailed reply to questions. “If we can identify them early as positive for the virus, then we can isolate them as well to prevent spread.”

Laboratory testing should also be made available in private hospitals “so we can get results faster,” Mr. Marquez, a medical doctor, said.

FACE MASKS
Aside from test kits, face masks have been missing in most drug stores due to hoarding since January, and the Department of Trade has asked a local manufacturer to increase supply to 4 million face masks a month from 1.6 million, according to Trade Secretary Ramon M. Lopez.

The bulk of the initial volume of 1.6 million had been allocated to health workers and people on the frontline including DoH and Red Cross personnel, he said. “There’s a need to increase allocation to the general public.”

On the other hand, there is enough inventory of alcohol and other types of hand sanitizers, Mr. Lopez said.

The Philippine International Trading Corp. has also found an Indian face mask supplier that can provide 2.5 million pieces more, he said.

Trade personnel are also monitoring supermarkets to ensure retailers don’t take advantage of the situation by unnecessarily raising the prices of basic goods.

“Because of the declaration of the public health emergency, under the Price Act, the prices of basic necessities are frozen,” Trade Undersecretary Ruth B. Castelo said by telephone.

The country’s major retailers including SM, Robinsons, PureGold and Metro Gaisano have assured the government that they have sufficient supply, she said.

Meanwhile, the National Water Resources Board (NWRB) said it would increase the allocation of the Metropolitan Waterworks MWSS from 42 cubic meters per second to 46 cms from Angat Dam effective March 12.

“This is to ensure steady water supply for Metro Manila considering the declaration of the state of public health emergency and the importance of water in undertaking the preventive measures against COVID-19,” NWRB Executive Director Sevillo D. David, Jr. said in a text message yesterday.

“The NWRB is assuring that water will be sustainably available throughout the whole year. The public is similarly asked to avoid wastage and to use water responsibly,” he said.

LOCKDOWN
Lawmakers have also been busy proposing solutions to contain the outbreak.

Quezon City Rep. Precious Hipolito Castelo has filed a bill that seeks to exempt face masks, sanitizers, antiseptics and other personal protective goods from taxes, duties and other charges.

“There is a need to flood the market with these goods so prices would go down and unscrupulous traders would be discouraged from hoarding them and selling them later at deleterious rates,” she said in the bill’s explanatory note.

Meanwhile, Albay Rep. Jose Maria Clemente S. Salceda wants a lockdown for Metro Manila “to isolate potentially undetected cases and to facilitate detection among those who will begin to demonstrate symptoms of the novel coronavirus once the lockdown ends.”

His proposal is for a seven-day lockdown of the capital and surrounding cities, suspending work, school, and other activities where people congregate.

Mr. Salceda estimates that the economy could lose 1.72% to 3.05% if a lockdown was not enforced and mass transmission occurred.

On the other hand, a lockdown now that could delay COVID-19 transmissions could lead to a loss of 0.21% of the gross domestic product, which can be recovered in six months, he said.

“So here’s the deal: Sure massive losses, or a small loss that you will regain anyway? The choice seems simple to me.”

Mr. Salceda is the author of a House bill that seeks to create a public health emergency framework and a local Center for Disease Control and Prevention that he said would have been capable of addressing an epidemic.

“The likelihood of an easy spread is limited from a geographical perspective,” WHO’s Mr. Abeyasinghe said, noting that the Philippines is an island archipelago made up of more than 7,100 islands.

“We cannot 100% confirm that there is no disease outside the National Capital Region,” he said. “But many factors are favoring the fact that what we have is a localized outbreak.”

The Philippine Health secretary could only hope for the best. “We hope that it doesn’t deteriorate,” Mr. Duque said.

“We hope that the number of cases doesn’t escalate, especially if our current social distancing efforts will result in us hopefully blunting the epidemic peak and extending the epidemic period to another few months,” he added. — with Jenina P. Ibanez, Charmaine A. Tadalan and Genshen L. Espedido

Economic growth may fall below 5% this year

MOODY’S ANALYTICS has lowered its 2020 growth outlook for the Philippines to below five percent on expectations the coronavirus disease 2019 (COVID-19) will affect exports and tourism, among others.

“We are expecting COVID-19 will shave one percentage point off Philippines’ GDP (gross domestic product) growth in 2020, bringing it to 4.9%,” Moody’s Analytics economist Katrina Ell said in an e-mailed response to BusinessWorld.

If realized, this would be much lower than the 5.9% growth logged in 2019, which was below the downward-revised 6-6.5% target.

The government targets GDP growth of 6.5-7.5% this year. National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon said earlier this week that they are now looking at a 5.5-6.5% GDP growth in 2020 due to the outbreak, with the impact of the virus now expected to be bigger than initially estimated.

Moody’s Analytics in January had a 6.7% growth outlook for the Philippine economy for this year.

Earlier, Moody’s Investors Service also downgraded its 2020 growth outlook for the country to 6.1% in February from a previous 6.2% estimate.

In a note sent to reporters on Thursday, Moody’s Analytics said the economic cost of the virus will largely depend on the length of time it would take to contain it, as well as the number of confirmed cases.

“While a health epidemic typically brings a strong revival in activity after containment, the COVID-19 outbreak has not reached that point, and the economic toll has increased,” Ms. Ell said in the report.

Moody’s Analytics also downgraded its global growth forecast to 1.9% from its 2.6% estimate in January. Likewise, it cut its outlook for China’s expansion to 4.6% from the 6.2% it gave in January.

TOURISM TAKES A HIT
“The Philippines is exposed to COVID-19 via a number of channels, with a particular hit expected from a loss of service exports, including tourism,” Ms. Ell said.

The NEDA estimates the local tourism industry could sustain foregone gross value of about P93 billion to P187 billion this year on the back of the virus spread. With the country’s top tourism markets China and South Korea being the most hit by the virus, the Philippines may possibly see a 1.42-million reduction in foreign tourist arrivals this year.

“There would also be a blow to remittances from abroad that hurt consumer spending and investment,” Ms. Ell added.

Foreign direct investment (FDI) inflows to the Philippines fell by 23.1% to $7.647 billion last year from $9.949 billion in 2018. The 2019 inflows went beyond the downgraded $6.8-billion target for 2019. This year, the government eyes to secure $8.8 billion worth of FDI inflows.

Meanwhile, cash remittances from overseas Filipino workers (OFW) inched up by 4.1% in 2019 to a record $30.133 billion from $28.943 billion in 2018.

Although analysts have said the COVID-19 outbreak could dampen remittance growth, with a quarter of inflows coming from parts of Asia, they said the diversity of OFW deployment across different jurisdictions could cushion the impact. — Luz Wendy T. Noble

Metro Manila water providers to adjust rates in second quarter

METRO MANILA water concessionaires secured the go signal from the Metropolitan Waterworks and Sewerage System (MWSS) to adjust rates in the second quarter.

In a statement, the board of trustees of the MWSS approved the implementation of the foreign currency differential adjustment (FCDA) for Manila Water Company, Inc. and Maynilad Water Services, Inc.

Customers of east zone concessionaire Manila Water will face lower water bills, while those of west zone concesisonaire Maynilad will see a slight increase in their monthly bills.

Manila Water will implement an FCDA of 1.69% or P0.48 per cubic meter (cu.m.) of its average basic charge of P28.52 per cu.m.

Residential customers of Manila Water who consume 10 cubic meters or less will see their monthly bills reduced by P1.11, while those who consume 20 cu.m. and 30 cu.m.will see a P2.46 and P5.02 reduction in their bills, respectively.

On the other hand, Maynilad will implement an FCDA of negative 0.21% or P0.08 per cu.m. of its average basic charge of P36.24 per cu.m.

This would mean Maynilad residential customers who consume 10 cms or less will see a P0.18 increase in their monthly bills. Customers who use 20 cms and 30 cms per month can expect their bills to rise by P0.69 and P1.40, respectively.

Water concessionaires are allowed to recover losses or give back gains through the FCDA tariff mechanism that factors in the movements of the peso against foreign currencies. The FCDA mechanism has been set because the water concessionaires pay foreign currency-denominated concession fees to MWSS as well as loans to fund service improvement projects that will expand and upgrade water and wastewater services.

Meanwhile, the National Water Resources Board (NWRB) is increasing the current water allocation for the two water concessionaires in Metro Manila, amid the continuous spread of the coronavirus disease 2019 (COVID-19).

In a text message yesterday, NWRB Executive Director Sevillo D. David, Jr. said they would hike the allocation from 42 cu.m. per second to 46 cu.m. per second from Angat Dam effective March 12.

“This is to ensure steady water supply for Metro Manila considering the declaration of the state of public health emergency and the importance of water in undertaking the preventive measures against COVID-19,” he said. — R.M.D.Ochave

PSALM studies SMC prepay offer

THE government is considering the offer of San Miguel Corp. (SMC) subsidiary South Premiere Power Corp. (SPPC) to pay in advance its obligations for administering a 1,200-megawatt power plant in Batangas.

“We will study it,” Irene J. Besido-Garcia, president and chief executive officer of the Power Sector Assets and Liabilities Management Corp. (PSALM), told the House committee on public accounts and the committee on good government and public accountability on Wednesday.

On Monday, SPPC announced that it was willing to pay ahead P22.68 billion representing the accumulated monthly payments to PSALM between this month up to June 2022.

SPPC had said that under its original independent power producer administration (IPPA) agreement with PSALM, the SMC unit is supposed to pay the state firm fixed monthly payments for its right to market the energy capacity from the Ilijan, Batangas power plant.

Administrators of these agreements are qualified private entities that manage the output under the contracts entered into by state-led National Power Corp. with independent power producers. They are appointed through public bidding conducted by PSALM.

SPPC General Manager Elenita D. Go told the two committees on Wednesday that the offer is “without prejudice” to the SMC subsidiary pursuing the case it filed against PSALM in 2015, which is pending with Branch 208 of the Mandaluyong City Regional Trial Court.

The energy firm is contesting the P23.94 billion in alleged debts that PSALM last month said it would run after. SPPC is asserting another formula for computing its payables to PSALM.

Anakalusugan Partylist Rep. Michael T. Defensor and chair of the committee on public accounts said in a statement on Wednesday that the other four companies had also committed to settle their financial obligations to the government.

The companies are Manila Electric Co. (Meralco), which has an indebtedness of P15 billion; Northern Renewables Generation Corp., with P4.6 billion; Filinvest Development Corp. (FDC) Misamis Power Corp., which owes P2.6 billion; and FDC Utilities, Inc., which has a P1.2-billion debt.

“We can collect P15 billion from Meralco because the office of Solicitor General Jose [C.] Calida is willing to withdraw its motion for intervention that has delayed the implementation of the settlement agreement between Meralco and PSALM,” he said.

Mr. Defensor noted that the House hearings prompted the electricity producers and distributors to pay their obligations.

“Since we started the inquiry, there has been a lot of movement in the energy sector. We have to help the government collect the huge indebtedness of P95.4 billion or this would eventually be absorbed by Filipino consumers in terms of higher electricity rates,” he said.

The congressman added that the money can be used to “augment the funds of the Department of Health and government hospitals in containing the spread of the coronavirus disease and in treating patients.”— Genshen L. Espedido

Tom Hanks, wife Rita Wilson test positive for coronavirus

LOS ANGELES — Oscar-winning actor Tom Hanks and his wife, actress Rita Wilson, have both tested positive for coronavirus in Australia, the actor said on Twitter.

“To play things right, as is needed in the world right now, we were tested for the coronavirus and were found to be positive,” Hanks said in the tweet.

The film star said that he and Wilson would be “tested, observed and isolated” for as long as required.

The couple are the first major US celebrities known to have contracted COVID-19. The coronavirus has infected more than 1,000 people in the United States.

“Not much more to it than a one-day-at-a-time approach, no? We’ll keep the world posted and updated,” Hanks tweeted.

Hanks had traveled to Australia to begin filming an upcoming movie about Elvis Presley. He is set to play Presley’s manager, Colonel Tom Parker, in the Warner Bros. production.

“We have been made aware that a company member from our Elvis feature film, which is currently in pre-production in The Gold Coast, Australia, has tested positive for COVID-19,” Warner Bros. said in a statement, without naming the person.

“We are working closely with the appropriate Australian health agencies to identify and contact anyone who may have come in direct contact with the individual.

“The health and safety of our company members is always our top priority, and we are taking precautions to protect everyone who works on our productions around the world,” the studio said.

The Warner Bros. statement did not mention Hanks.

It was not immediately clear if filming on the project would be postponed due to the actor’s illness.

Hanks won best actor Academy Awards for his role in 1994’s Philadelphia, in which he plays a man stricken with AIDS, and Forrest Gump the following year. Wilson has appeared in such films as Sleepless in Seattle and Runaway Bride.

The coronavirus has infected more than 121,000 people in 118 countries while over 4,300 people have died due to the virus, according to a Reuters tally. In the United States at least 37 people have died from the respiratory illness.

AVOIDING RESTRICTIONS
Meanwhile, US rock band Nada Surf decided the show must go on when France, in the grip of the coronavirus epidemic, banned crowds of more than 1,000 people in indoor venues. To get around the ban, they were to play the same Paris concert twice in one evening.

On Tuesday, rock singer Van Morrison also played two shows in Paris’ Olympia concert hall to get around crowd limits.

Nada Surf’s Weber said he expects concerts in London, Manchester, Dublin, and Glasgow in the next four days will also go ahead as planned, but added that he feared that the next leg of the band’s European tour may be affected. In April, the band has scheduled performances in several European countries, including Italy, which has been under lockdown since Monday.

Madonna canceled shows in Paris on Tuesday and Wednesday due to restrictions imposed over the coronavirus outbreak, promoter Live Nation said on Monday.

France has more than 1,600 confirmed coronavirus infections and a death toll of 30, but has no limits on travel.

COACHELLA POSTPONED
The Coachella music festival in the Southern California desert has been postponed for six months until October because of concerns over the coronavirus, organizer Goldenvoice said on Tuesday.

The festival, one of the biggest in the world, brings half a million fans to an open-air site in Indio, east of Los Angeles, over two weekends and was due to take place on April 10-12 and April 17-19. The 20-year-old festival will now take place Oct. 9-11 and Oct. 16-18.

The line-up this year was headlined by Rage Against the Machine, Frank Ocean and Travis Scott.

The producer Goldenvoice said it had also postponed Stagecoach, a country music festival held in Indio, to Oct. 23-25 from April.

The decisions follow the cancellation last week of the South by South West festival of film, music, technology that had been scheduled for March 13-22 in Austin, Texas.

Musicians have canceled concerts in Asia and Europe because of the spread of the virus, and American rock band Pearl Jam on Monday announced it was postponing all of its planned US and Canada dates through the end of April.

MULAN PREMIERE GOES ON
Walt Disney Co. held a red carpet premiere for its action epic Mulan on Monday, pushing ahead with the movie’s rollout even though the coronavirus spread will keep the film out of China, the second-largest film market, indefinitely.

At the moment, film studios have decided the show must go on at movie theaters in most of the world. The major exception is James Bond thriller No Time to Die, which producers moved to November from April.

On Tuesday, Sony Pictures postponed to August the release of Peter Rabbit 2: The Runaway citing disruption in the movie market in Europe. Italy on Tuesday placed the entire country on lockdown and France has banned gatherings of more than 1,000 people in a bid to contain the virus.

Hollywood studio executives are closely watching the spread of the coronavirus and the upcoming film calendar. Summer blockbuster season is scheduled to kick off May 1 with Disney’s Marvel adventure Black Widow, followed by a new Fast and Furious spectacle from Comcast Corp.’s Universal Pictures, a Top Gun sequel from ViacomCBS Inc’s Paramount Pictures, and other big-budget action flicks.

If the coronavirus keeps people at home or shuts more theaters, it would threaten box office receipts during Hollywood’s most lucrative season. Movie theaters are closed across China and Italy and in part of France.

The situation puts movie studios in “uncharted waters,” said Jeff Goldstein, president of domestic distribution at AT&T Inc.’s Warner Bros. studio.

Warner Bros. has not delayed any film openings, Goldstein said, “but we have an open mind. We will have to look at everything and see how it unfolds.”

Mulan, a $200 million live-action remake of Disney’s animated classic, has been expected to rank as one of the company’s biggest hits of the year.

The movie was tailored to appeal especially to the Chinese market. The story features a Chinese heroine and an all-Asian cast, and parts were filmed in China. The central character is played by Yifei Liu, a film and TV actress well known in China.

It was unclear when Chinese movie theaters will re-open. The movie is set to debut in the United States on March 27.

K-POP HALTS SHOWS
Japan’s travel restrictions on South Koreans over the coronavirus epidemic have spurred cancellations of a string of K-pop concerts scheduled in Japan, threatening to hurt the Korean entertainment industry in its most lucrative market.

Japan said starting Monday, people arriving from South Korea will be quarantined for two weeks. Tokyo also suspended visa waivers and the validity of existing visas for Koreans, followed by a similar move by South Korea, rekindling a diplomatic feud between the neighbors.

South Korean boy band Super Junior called off its tours scheduled to take place on March 25 and 26 in Japan, citing the Japanese government’s measures to “curb immigration.”

South Korea’s entertainment firm CJ ENM followed suit, postponing its annual K-pop festival KCON in Japan. KCON in Japan last year drew more than 88,000 fans, according to CJ ENM.

Japan’s travel restrictions are a fresh blow to the entertainment industry in the wake of a fast-spreading virus. K-pop events have also been canceled or postponed elsewhere in the world because of the epidemic.

A Korean music festival in Los Angeles, originally planed for April 25, was postponed due to “travel restrictions in Asia.”

At home, boy band BTS canceled its scheduled April concert in Seoul, amid growing concerns of the new coronavirus outbreak, its music label, Big Hit Entertainment previously said. — Reuters

Ayala Corp. net income up 11%

AYALA CORP. (AC) posted an 11% increase in earnings in 2019, lifted by gains from divesting in its education and energy businesses and higher consumer demand from its property, telecommunications and banking segments.

In a statement yesterday, the conglomerate said its attributable net income last year rose to P35.28 billion, as revenues climbed 4% to P295.26 billion. Costs and expenses stood at P222.10 billion, 3% up from a year ago.

The bulk of its profits came from its property segment, through Ayala Land, Inc. (ALI), which recorded a net income increase of 13% to P33.20 billion. This was driven by the growth of sales from office lots (up 12%) and commercial and industrial lots (up 46%), along with 33% higher revenues from commercial leasing to P39.30 billion.

The banking segment, operated by Bank of the Philippine Islands (BPI), added P28.80 billion in net profits to jump 25%. The rise was due to an 18% increase in net interest income to P65.90 billion, a 9% loan growth to P1.48 trillion, 7% growth in deposits to P1.70 trillion and a 25% rise in fee-based and securities trading income to P28.40 billion.

Globe Telecom, Inc., which operates AC’s telecommunications business, had a net income of P22.30 billion, rising 20% year on year. Higher demand for data-related products and services lifted service revenues last year by 12% to P149 billion.

Power unit AC Energy, Inc. added P24.60 billion in net earnings, fueled by returns from its solar projects in Vietnam, tamer costs from tweaking operations in power plants, and gains from divesting some of its thermal assets.

Water business Manila Water Co., Inc. saw a 16% decline in profits to P5.50 billion, mainly due to the shortage of water supply last March. The company also waived bills in April due to the drop in water availability at the La Mesa dam. Costs and expenses last year for Metro Manila’s east zone concession jumped 32% to P6.40 billion.

Posting a net loss was AC Industrials, which handles AC’s electronics manufacturing and automotive business. Its losses stood at P2.40 billion primarily due to a global, industry-wide decline in the electronics manufacturing services and global auto industries business. Under AC Industrials are Integrated Micro-Electronics, Inc. and AC Motors, which both saw a net loss of $7.80 million and P337 million, respectively.

“The events of the past year have challenged the stability of our corporate momentum over the last decade. However, Ayala has proven its resilience across multiple business cycles over the 186 years that we have been in operation,” AC Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala said in the statement.

“Notwithstanding the challenges faced by our water and global manufacturing businesses in the past year, our real estate, banking, telco, and power units continue to serve as engines of growth. This validates the strength of a diversified portfolio and the expansion strategy we put in place a decade ago,” AC President and Chief Operating Officer Fernando Zobel de Ayala added.

AC spent P215 billion for capital investments last year, of which P109 billion went to ALI and P51 billion to Globe. Some P30 billion were parent-only capital expenditures, which are investments in the company’s newer businesses.

Shares in AC at the stock exchange lost P40.50 or 6.32% to close P600 apiece on Thursday. — Denise A. Valdez

Moira chosen for Mulan song

SINGER Moira dela Torre has been chosen by Disney Philippines to sing the country’s version of the Mulan anthem, “Reflection,” for the reimagined version of Mulan screening on March 25.

“I became very emotional [when I was told I was going to sing ‘Reflection’] because ‘Reflection’ is very special to me. It’s the first-ever song I performed in public, and also the first full song that I learned on my own. It basically launched my love for music,” Ms. Dela Torre said during a launch party on March 3 at the Shangri-La at the Fort in Bonifacio Global City, Taguig.

The ballad, which represents Fa Mulan’s yearning to be her own woman, on her own terms, was written by Matthew Wilder and David Zippel for the Disney animated film, Mulan. The song’s movie version was sung by Lea Salonga while another version was recorded by Christina Aguilera.

The story is based off of the Chinese folk tale, “Ballad of Mulan” by Guo Maoqing in the 6th century, which tells of the titular character fighting off northern invaders despite being a woman at a time when women were not allowed to serve the army.

While the new Mulan film will not be a musical, the film’s producer Jason Reed noted in an interview with Collider.com in February that “there are a number of songs that are iconic for the movie and tell a great version of the story and they are very helpful to us in how we’re putting the movie together.”

“We made the decision that we wanted to keep the world — even though it’s a fantasy — more grounded, more realistic so those emotions really played and the threat is very real. So we are using music in a slightly different way,” he added.

The song was Ms. Salonga’s second Disney princess song after singing Aladdin’s (1992) “A Whole New World.” The local version of “A Whole New World” for the Aladdin live-action remake in 2019 was sung by Darren Espanto and Morrisette Amon.

“It’s funny how it speaks about self-doubt and questioning who you see in the mirror every day. That’s basically me, but every time I feel that happening now, I feel braver. This song came back at a perfect time in my life, and I could only happy and grateful,” she added.

Her rendition of “Reflection” and its accompanying music video will launch on March 20. Ms. Dela Torre said that the video felt like a homecoming because “the video was shot in an auditorium and my first music video was also shot in an auditorium.” Her debut single was “Love Me Instead” from 2004.

Mulan is set to hit Philippine screens on March 25. Liu Yifei plays Mulan while Jet Li plays the Emperor of China. Other cast members include Jason Scott Lee, Donnie Yen, and Gong Li. The film is directed by Niki Caro. — Zsarlene B. Chua

SMC reports flat earnings as fuel, food units slip

SAN MIGUEL CORP. (SMC) posted flat earnings in 2019, dragged by a decline in earnings from its oil and food businesses.

In a presentation to investors yesterday, the listed conglomerate said net income last year was steady as sales ended flat at P1.02 trillion.

Consolidated operating income dipped 1% to P115.72 billion, which it traced to lower returns from Petron Corp. and San Miguel Foods.

Petron posted a 67% drop in net income last year to P2.3 billion, as sales likewise fell 8% to P514.36 billion. This was driven by cheaper average selling prices, lower consolidated volumes, an oversupply situation and a temporary shutdown of one of its refineries.

“Petron faced many challenges throughout the year: volatile international prices that resulted to significantly weaker margins, a major shutdown of its Bataan Refinery due to an earthquake, the implementation of the second tranche of the excise tax increase, and the continued proliferation of white stations,” SMC said in a statement.

San Miguel Foods, a division of listed San Miguel Food and Beverage, Inc. (SMFB), also saw a 41% decline in net income to P3.45 billion despite a 5% growth in net sales to P139.46 billion. SMC attributed it to the lower poultry prices in the first half of 2019, the spread of the African Swine Flu and expenses from opening new facilities.

But SMFB closed with a 6% rise in net income to P32.28 billion, lifted by the improved performance of its beer and spirits businesses, which climbed 6% and 14%, respectively. Consolidated revenues also grew 9% to P310.79 billion.

SMC’s power business, through SMC Global Power Holdings Corp., saw a 73% jump in net income to P14.36 billion. Sales likewise increased 12% to P135.06 billion.

“(SMC Global Power) ended the year with consolidated off-take volume of 28,112 gigawatt hour, 18% higher than in the same period last year. This was the result of higher bilateral sales volumes and longer operating hours for the Sual and Ilijan power plants,” the company said.

“The full year operation of Unit 2 of the Malita, Davao plant and Unit 3 of the Limay plant, along with added capacity from Unit 4 of Limay, also boosted the power unit’s performance,” it added.

SMC Infrastructure, which operates toll roads across the country, added P23.41 billion in sales in 2019, down 5% year on year.

Shares in SMC at the stock exchange shed P9.50 or 7.95% to close P110 each yesterday. — Denise A. Valdez

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