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Business and life after COVID-19

Since Monday after the President’s announcement of the lockdown, I’ve worked from home — had a video call meeting with business executives from nine Asian countries, conducted my graduate school class using an online collaboration tool, and electronically met with some clients and partners.

Business and life will never be the same after COVID-19. For 30 days from the start of the Luzon lockdown in Philippines, residents of the largest island of the country as well in key cities will be living their lives and conducting their business differently. We’re already seeing how this dire situation is affecting the way we work, communicate, worship, buy, bank, learn, play, and even consult with doctors.

Digital means are obviously the way to go to conduct our lives during these times. Tech companies are leading the way, offering free use of their applications for several months. For a limited period, companies like Microsoft, Zoom, Google, and Cisco are giving away the use of their communication and collaboration tools for workers and employees working from home to still conduct their job functions. Social media is rife with posts showing managers and employees meeting online.

FB Live and IG Live have already witnessed a two-fold increase in usage over the last few days, as told by Mark Zuckerberg in his recent IG Live. He said that health care workers are using FB Live to communicate with patients, doctors, and love-ones of patients.

Technology has also caught up with the way people worship. Catholic bishops responded to the government policy by deciding to set up a live stream of Holy Mass celebrations instead of opening churches’ doors until April 14.

In financial services, local banks have been heavily promoting their digital banking apps in social media. In my company, we have deployed GCash to all of our remote workers for ease of money transfers.

In the area of learning, companies and institutions have stepped up to provide free elearning content and access to learning management systems. US-based elearning firm, Cypher Learning, is making its platform free for 30 to 60 days locally to schools and organizations wanting to convert their traditional face-to-face learning to digital. Another US-based online learning platform, Coursera, is making its 3,800 courses available globally at no cost to any university impacted by COVID-19. More than 700 textbooks have been made freely available online by Cambridge University Press until the end of May this year to help affected students.

Apps for entertainment are likewise seeing huge jumps. First-time installs of Netflix’s app were up more than 50% across the globe according to reports. Other entertainment apps are also seeing tremendous growths in usage.

But the multifold jump in the use of digital platforms and apps all over the world has resulted in the clogging of the internet and telecommunications networks, which are not ready in the crisis we’re facing. This has worsened the already-sorry-state of internet in the country.

But technology itself has its way of addressing such limitations through innovation. One such innovation is from global tech firm, NetFoundry, which renders the slow and tradition virtual private network (VPN) obsolete, by optimizing how work-from-home workers use apps over the internet and cloud. This will usher the world to a new and faster way of communication and collaboration in the age of remote work and elearning.

With improvement in connectivity, lies increased demand and faster improvements in others. Advancements in augmented reality and virtual reality (AR/VR) will accelerate to make virtual meetings and online learning richer and more effective. Organizations will likewise accelerate their move to the cloud to enhance their business continuity plans and access to apps for remote workers. Digital banking, online shopping, and last-mile logistics will become more ubiquitous

In the coming months, people and organizations will forced to adopt digital technologies to conduct their businesses and everyday lives. This will be the new normal.

 

Reynaldo C. Lugtu, Jr. is CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is the Country Representative of the Institute of Change and Transformation Professionals Asia (ICTPA) and Fellow at the US-based Institute for Digital Transformation. He is the Chairman of the Information and Communications Technology Committee of the Financial Executives Institute of the Philippines. He teaches strategic management in the MBA Program of De La Salle University. The author may be e-mailed at rey.lugtu@hungryworkhorse.com

Stuff to do at home

With everyone under enhanced community quarantine for the next four weeks due to the outbreak of COVID-19, here are a few activities to keep you entertained and productive in the comfort of your own homes.

Learn at home with Scholastic

Scholastic is offering free online courses for levels pre-kindergarten to Grade 6. The duration of the courses are approximately three hours per day. The courses include writing, research projects, and virtual field trips. The website is accessible on any device. Visit https://classroommagazines.scholastic.com/support/learnathome.html.

Free operas streaming online

OperaWire will host Nightly Met Opera Streams of the Metropolitan Opera for free. The performances begin at 7:30 p.m. EST and will be available to stream for 20 hours. Visit https://operawire.com/metropolitan-opera-to-offer-up-nightly-met-opera-streams/. The Paris Opera is also streaming operas for free beginning March 17. Visit https://www.operadeparis.fr/.

Free films on YouTube

Catch your favorite films for free on the following channels: Regal Entertainment (https://www.youtube.com/user/regalcinema/featured); Cinema One Originals (https://www.youtube.com/channel/UCzggCZVkynvnjNV29L9EccA); and TBA Studios (https://www.youtube.com/channel/UChh0rmwGvToBd3owvN2vRMg).

Free online courses

Take one or more of the 1,500 free online courses leading universities such as Stanford, Yale, Harvard, and other are offering. Download the audio and video courses (from iTunes, YouTube, or university web sites). Topics include archeology, art, finance, writing, law, health, religion, mathematics, and personality development. Visit http://www.openculture.com/freeonlinecourses.

Online yoga classes

YogaPlus offers daily yoga classes via Facebook live. For schedules, visit https://www.facebook.com/yogaplusph/.

Free Broadway shows online

Enjoy your favorite Broadway performances online for a limited time at https://www.broadwayhd.com/.

Virtual tours

Explore museums around the world through virtual tours: the Solomon R. Guggenheim https://artsandculture.google.com/partner/solomon-r-guggenheim-museum?hl=en; the Smithsonian National Museum of Natural History (https://naturalhistory.si.edu/visit/virtual-tour/current-exhibits); the Louvre Museum (https://www.youvisit.com/tour/louvremuseum). View animals such as otters, penguins, turtles, and corals on live camera at https://www.montereybayaquarium.org/animals/live-cams.

Productive approaches for workers during Covid-19 lockdown

Our small business can’t be operated through flexible working arrangements like work from home, especially now that we have an Enhanced Community Quarantine on Luzon. Our workers reside in various areas and the strict implementation of the lockdown makes it impossible for us to continue without workers. Therefore, what would you advise us to ensure that all of us remain productive during the 30-day period? — Anxious Apple.

Any shoe salesman will tell you of one important challenge in selling: “If the shoe fits, the customers wants another color.” That’s because there’s no such thing as one size fits all. Tailor-fitting is as imperative as breathing, eating, playing, working, and of course praying, among other essential things. So, if you think a work from home scheme is not applicable in your case, then so be it.

To a certain extent, you have to take care of your workers in these trying times. Many of them are minimum wage earners. Of course, your management action will be dictated by your company’s capacity to pay adequate compensation to the workers. Before you do anything, be guided by the latest labor advisories issued by the Department of Labor and Employment so that organizations can survive COVID-19 and provide safety nets to the workers.

These advisories are Department Order No. 209 or COVID-19 Adjustment Measures Program (CAMP) that entitles qualified workers to receive P5,000 each and Department Order No. 210 or Tulong Panghanapbuhay sa Ating Displaced/Disadvantaged Workers (TUPAD).

So, what can you do under the circumstances in addition to these labor advisories? As I said, it depends much on what your organization can afford. If the employees don’t have enough leave credits and you would want them to remain productive at home and be paid at the same time so you can display management magnanimity, I am recommending practical and low-cost approaches suited for a small business like yours.

THREE PRACTICAL APPROACHES
Peter Drucker was right: “Until we can manage time, we can manage nothing else.” This means everyone has enough time in their hands now, at least for the next 30 calendar days. Whether it’s good or bad days, let’s think of ways we can make each day productive for the workers and the whole organization.

Ask and answer the following basic question: How do we manage the employees’ time, so they come out motivated, inspired, and refreshed with new ideas when they report back for work? Here are some practical ideas:

One, require all employees to enroll in free online courses. Yes, you read it right. There are many “free” online courses. The Internet offers an ocean of courses that cover almost the entire gamut of disciplines — from business, marketing, technology, even data science. In fact, Harvard University offers free courses via edx.org. These courses are self-paced and the candidates can choose to receive “a verified certificate for a small fee.”

Another institution that I’d like to recommend on free online programs is the Asian Productivity Organization (APO) at eapo-tokyo.org. For your type of business, APO offers an open, sophisticated course on Management of Innovation in SMEs. Aside from that, you may consider topics on Critical Strategic Foresight Tools for Sustainable Productivity and Basic Smart Manufacturing 101 in a Blockchain-driven Era.

However, if you think that Harvard and APO are too high-end, if not too challenging, for your employees, you can recommend online courses through TESDA (Technical Education and Skills Development Authority). TESDA at e-tesda.gov.ph offers free basic vocational courses like automotive, electrical and electronics, entrepreneurship, health care, information and communication technology, among others.

TESDA also offers the latest program on basic competencies in “21st Century Skills” covering Environment Literacy and Workplace Communication.

Two, require employees to identify and solve operational problems. Again, using the Internet, you can find many instructional materials on how people and organizations may solve issues in the workplace. These issues may include poor product quality, low labor productivity, or the high cost of doing business. If you know me from Adam, you may well understand that I am a firm believer in Kaizen, Lean Management and its branded equivalent like the Toyota Production System.

Forget about Six Sigma. It’s a complicated tool for many people. For one, it uses many statistical tools that are frowned on by many. Two, if you follow the Six Sigma approach strictly, you may not be able to complete your projects before the lockdown period.

Using a form like the A3 problem-solving worksheet (a template can be found in the Internet), your management and the employees take a uniform approach to identifying problems and generating solutions. Whatever it takes, you can start or restart doing continuous improvement. And the “best time to practice Kaizen is when we are in crisis mode. Start from the need to survive,” according to Japanese expert Jun Nakamuro.

Last, reward employees who choose one or all of the above options. Whatever one chooses, your management must agree to employee proposals before they are entitled to any reward. Assuming that your employees don’t have enough leave credits, I suggest paying those concerned their one-month salary, at least for their minimum reward. That is, if they can finish the course or courses subject to the condition that they secure the certificate, if not pass the written exam to be administered by your human resource department, in collaboration with Harvard, APO, or Tesda.

Another option is for your employees to design a plan or a road map on implementing their findings for the benefit of your organization. Try to estimate the concrete results that could come out of these programs and recognize your workers accordingly.

BUSINESS CONTINUITY PLANNING
Crises can happen anytime. To a great extent, your reaction will be dictated by the nature of the crisis. However, your organization should always be ready to meet any unforeseen emergencies. This can only happen if you have a dynamic business continuity plan that you can use as a general guide.

It’s important for any organization to have such a plan that can be modified annually depending on actual situations and other emergencies like a super typhoon, mass transport strike, labor strike, a major client’s factory closure, or a pandemic. Once you have a plan that contains general guidelines, it will be easy for your organization to manage any crisis that may come your way.

ELBONOMICS: All good and bad days should always result in higher productivity.

 

Send anonymous questions to elbonomics@gmail.com or via https://reyelbo.consulting

Moody’s affirms LANDBANK credit rating

MOODY’S Investors Service affirmed its credit rating for Land Bank of the Philippines (LANDBANK), citing its “healthy” metrics on solvency and liquidity.

Separately, President Rodrigo R. Duterte said in an executive order (EO) that LANDBANK will have no dividends to the national government from its net earnings for calendar year 2018 to support its liquidity and in the interest of the economy.

In a statement on Thursday, Moody’s said it has affirmed LANDBANK’s domestic and foreign bank deposit ratings of Baa2 /P2, a notch above the minimum investment grade and in line with the country’s credit rating. It also assigned a “stable” outlook to the rating, indicating this is likely to be maintained at its level.

“The affirmation of LBP’s ratings is driven by its healthy solvency and liquidity metrics,” Moody’s said in a statement.

“It also benefits from an expectation that it is

government-backed, given that it is fully owned by the government and fulfills government policy objectives,” it added.

However, Moody’s said the coronavirus disease 2019 (COVID-19) outbreak could pose risks to the lender’s growth outlook and asset quality.

“We regard the coronavirus outbreak as a social risk under our ESG (environmental, social and governance) framework, given the substantial implications for public health and safety,” Moody’s said.

The debt watcher said LANDBANK’s asset quality continues to be healthy as its gross non-performing loan ratio stood at 2.5% as of end-September last year.

“While this is up from 1.3% at the end of 2018, the increase was largely driven by one large corporate exposure that most of the large banks in the system are exposed to,” it said.

Moody’s said economic growth this year will be affected by the virus outbreak, which could pose risks to LANDBANK’s assets and growth.

Despite this, Moody’s said the lender’s profitability will continues to be stable, while internal capital generation will provide sufficient support for loan growth.

“While an increase in credit costs may create some pressure, Moody’s expects this to be offset by higher NIMs (net interest margin) on account of increasing loan-to-deposit ratios,” the credit rater said.

Moody’s noted government funding and liquidity continues to be LANDBANK’s main strength as government-related deposits account for around 74% of the bank’s deposits.

“The bank is also highly liquid, and has the lowest loan-deposit ratio among rated Philippine banks, at around 49% at end September 2019,” it added.

Meanwhile, Moody’s downside risks from LANDBANK’s plan to acquire United Coconut Planters Bank (UCPB) which is “undercapitalized” and could put pressure on LANDBANK’s capital if approved.

According to the credit rater, LANDBANK could get a rating upgrade if there will be an improvement in the timeliness and transparency of its financial reporting and a decline in the concentration of credit from individual borrowers.

On the other hand, its rating could be downgraded if the proposed UCPB acquisition leads to a large reduction in capital ratios below LAND BANk’s current levels.

DIVIDENDS
Meanwhile, Mr. Duterte said in EO 109 that the downward adjustment in the declared dividends was recommended by Finance Secretary Carlos G. Dominguez III to boost “the viability and mandate of the bank, its liquidity, capital position and medium-term plans and programs, in the interest of national economy and general welfare.”

The EO cited Republic Act. No. 7656 which requires all government-owned or controlled corporations (GOCCs) to remit at least 50% of their annual net earnings in forms of cash, stock, or property dividends to the national government.

According to Section 5 of this law, the president can adjust the percentage of annual net earnings declared by a GOCC in line with economic interest and general welfare, upon the recommendation of the finance secretary. — L.W.T. Noble

Aboitiz firms provide supplies to health workers

ABOITIZ companies have donated medical supplies and resources for health and security workers across the country amid the ongoing coronavirus disease 2019 (COVID-19) crisis, the group said on Thursday.

“The Aboitiz Group is one with the government and our brave medical and security frontliners who are working hard to defeat COVID-19. We are committed to supporting the COVID-19 frontliners for the long term. Rest assured, we will continue to find ways to help our fellow Filipinos whose health and lives are at risk due to this pandemic,” said Sabin M. Aboitiz, Aboitiz Group president and chief executive officer, in a statement.

On March 18, N95 masks were turned over to the Department of Health (5,000 masks) and the Research Institute for Tropical Medicine (700 masks), the group said.

Outside Metro Manila, group aims to send surgical gloves, infrared thermometers, folding beds, nitrate and latex gloves, N95 masks, laboratory and disposable goggles, personal protective equipment gowns, and tents.

A portion of these will be turned over to security checkpoints of the Philippine Army and Philippine National Police and to local governments in Cebu, Davao, Iligan City, Capas, Tarlac and other parts of Luzon.

Lone in the time of corona

The Andromeda Strain
Directed by Robert Wise

Best title recommendations when shut up in your house waiting for the all-clear (which will come who knows when)? Escapist fare — musicals, comedies, tales of fantasy, adventure flicks that glorify can-do characters acting in marked contrast to us in our present status: helpless, frustrated, wondering what bleak future is in store.

If on the other hand you’re of darker disposition and don’t need movies like Aladdin or The Lion King to remind you of all the exotic locations you’re never going to visit this year; if you’d rather watch films not to forget your present circumstance but to remind yourself that things could be much much worse — there’s always Robert Wise’s 1971 adaptation of Michael Crichton’s bestselling book The Andromeda Strain.

The narrative itself is simple: a satellite lands in the town of Piedmont, New Mexico, and all its inhabitants are apparently dead. A team of bacteriologists and pathologists has assembled, their mission: to isolate the pathogen and hopefully develop a cure.

The film opens to an eerie image: corpses litter a small town’s streets, the stillness echoing the streets of Rome and Beijing; nothing else moves save vultures — but is that a baby crying?

The US government — unlike the present administration — has a plan in place: the four members of the Wildfire team (the fifth is undergoing an appendectomy) have been assembled at their lab, a gleaming spotless underground complex deep in the Nevada desert. Talk about self isolation — the intent is to decontaminate the team members inside and out, through xenon ultraflash, microbial baths, capsules designed to disinfect the gastrointestinal tract (note: you don’t swallow it), spending a day descending through all four levels to the fifth, where the laboratories are located. The intent is to decontaminate but the unintended visible effect is to increasingly cut the four scientists off from the outside world, bury them deep in this cathedral constructed and dedicated to science — said isolation eventually and inevitably fated to bite these four hapless high priests of knowledge in the ass.

The scientists wear white jumpsuits (they’re paper) and walk past polished metal walls — color coded according to a military study on the effects of color on human psychology, or so the script says (you’re not certain because many of the studies and articles cited Crichton himself invented). From deep red (the color of danger, and blood, presumably of all things contaminated) to yellow (caution) to gray or white (purity; you may safely proceed to your work) — don’t know about that study but director Wise (or his production designer or perhaps Crichton himself) seems to know a thing or two about dramatic progression through color.

Crichton and Wise do well, at least to these inexpert ears, in keeping the technical jargon reasonably coherent; helps that we’re shown early on what’s at stake (a town where only tumbleweeds stroll) so we listen as if our lives depended on it; helps that jazz artist Gil Melle evokes spreading menace through his avant-garde tech score, all percussive electronic pulses, digitized cries, pneumatic puffs, throbbing energies.

When the pathogen is revealed via an electron microscope the image is remarkably symmetrical, machine-like almost, echoing the scientific apparatus surrounding it though with a more elegant emerald demeanor. You look at the creature and think: nanobots. The scientist use the word ‘crystalline’ to describe the structure which only fuels your suspicions: was the Strain a cloud of microscopic robots meant to explore the universe, perhaps collect data or deliver a message? The full discussion was in the novel, cut out of the film for brevity’s sake, but when you gaze at the gem-like vaguely pyramidal shape onscreen the unspoken meaning is crystal clear.

Crichton throws in a nuclear option: if a pathogen ever breaks loose a nuclear bomb is detonated, thoroughly decontaminating the lab and its surrounding areas. The only way to call off the automized procedure (there’s a five minute delay) is for one of the team to insert a key and disarm the device — the writer’s way of fulfilling that long held secret fantasy of literally holding the fate of the world (or at least an entire laboratory) in one’s hand. Nothing so melodramatic in real life, as far as we know — what’s a deadly plague compared to a nuclear explosion? — but we should keep in mind what the film makes dramatically explicit: things change, life mutates, and microbes (because of their brief lifespan and industrial-grade reproduction capabilities) mutate at a breathtakingly accelerated pace.

Not generally a big fan of Wise; he’s a good craftsman with not much personality to his style who, when armed with a good script (Curse of the Cat People, The Haunting) or at least a good idea (this film, is capable of grand entertainment. Crichton uses telegram messages, radio transcripts, excerpts of news articles and textbooks to lend authenticity to his science fiction potboiler; to Crichton’s bag of tricks Wise adds audio transmissions and video and film recordings, not to mention the remarkable special effects of Douglas Trumbull, James Shourt, Albert Whitlock, who did the microbial footage.

The film ends — as most science fiction films do — on an ominous note, with one of the Wildfire scientists testifying before a senate committee: “there’s no guarantee that another ‘biological crisis’ won’t occur again.” He has no answer, neither do we; as the Strain’s very existence demonstrates, things change, life mutates; we maintain the status quo at our peril.

Pru Life UK launches Pulse, an all-in-one AI-powered health app

Pru Life UK, a leading life insurer and the pioneer of insuravest, or investment-linked life insurance products in the Philippines, announces the launch of Pulse, an all-in-one, first-of- its-kind digital app to offer artificial intelligence (AI)-powered holistic health management to consumers in the country. Through cutting-edge tools and real-time information, Pulse empowers consumers to take control of their health and well being anytime, anywhere.

“Since 1996, we have been committed to helping individuals and families in the Philippines secure their financial future. With Pulse, we are significantly expanding beyond our core business of providing financial protection, as well as working to integrate mobile digital health more deeply into the Philippine healthcare system,” says Pru Life UK President and CEO Antonio “Jumbing” De Rosas.

“Across the globe, digital tools are paving the way for better quality, faster, and more accessible healthcare,” De Rosas continues. “These tools are especially critical for nations with underdeveloped healthcare systems,such as the Philippines,which continue to face challenges relating to consumer access, infrastructure, trained professionals and medical costs.”

Photo Caption: Pru Life UK launches the health management app – Pulse. (From left) Pru Life UK Senior Manager and Head of Digital Channels Jomar Mislang; President and CEO Antonio “Jumbing” de Rosas (middle); and Senior Vice President and Chief Customer Marketing Officer Allan Tumbaga (right).

While the Philippines has one of the lowest per-person healthcare spent in Southeast Asia, its medical services are the second-most expensive in the region. This reinforces the need for new, innovative solutions that meet the healthcare needs of its citizens, as well as for healthcare to be more inclusive and accessible.

“Through AI-powered features such as a symptom checker that acts as a digital-first gateway for users when seeking care and a health assessment tool that gives users insight into their long-term disease risks, Pulse enables its users to get a better picture of their health,” De Rosas added. “This will help users better understand any worrying symptoms they might be experiencing and direct them to seek advice from healthcare professionals. By empowering users with smart cutting-edge technologies,they can continue to fulfill their wellness goals and help prevent or postpone the onset of diseases, allowing us to play a role in their journey to better overall health.”

Pru Life UK is working with partners to provide users with innovative offerings through Pulse, such as the Symptom Checker and Health check tools, powered by UK-based healthcare technology and services company Babylon. The app is an evolving platform, to which new partners, tools and value-added services, including telemedicine as well as lifestyle and wellness management, will be added in phases.

Pulse is a regional offering of Prudential and was first introduced in Malaysia in May 2019. Apart from Malaysia and the Philippines, Pulse will be available in nine other markets in Asia.

The launch of Pulse in the Philippines is in line with Pru Life UK’s “We DO” Campaign. Launched in 2019, “We DO” celebrates the drive and optimism of consumers looking to progress in life, and highlights Pru Life UK as a trusted partner throughout this process. Pulse leverages on that commitment through the “Prevent-Postpone-Protect” proposition, which empowers its users to become doers and proactively care for their health and overall
well being.

Pulse is currently available for free download by all users of Android and IOS devices.

How PSEi member stocks performed — March 19, 2020

Here’s a quick glance at how PSEi stocks fared on Thursday, March 19, 2020.


Peso declines versus dollar ahead of BSP rate decision

THE PESO weakened anew against the greenback on Thursday as players anticipated a rate cut from the central bank and amid risk-off sentiment due to the sell-off in the stock market.

The local unit closed at P51.10 per dollar yesterday, depreciating by five centavos from its P51.05 finish on Wednesday, according to the data from the Bankers Association of the Philippines.

The peso opened the session weaker at P51.30 against the dollar. It dropped to as low as P51.38, while its intraday best was at P51.05 versus the greenback.

Dollars traded dropped to $597.08 million from the $712.25 million seen on Wednesday.

A trader attributed the peso’s drop to the market factoring in a rate cut from the central bank, whose decision was due later on Thursday.

“The peso depreciated from market expectations that the BSP (Bangko Sentral ng Pilipinas) might deliver a more aggressive 50-bp (basis point) policy rate cut later [on Thursday],” the trader said in an e-mail.

The BSP Monetary Board’s announcement of a 50-bp rate cut came after financial markets closed on Thursday. This brought the yield on the BSP’s reverse repurchase facility to 3.25%, while overnight lending and deposit rates are now at 3.75% and 2.75%, respectively.

A BusinessWorld poll last week saw 12 out of thirteen economists expecting at least a 25-bp cut, with some economists saying a 50-bp reduction could also be on the table amid heightened economic risks due to the spread of the coronavirus disease 2019 (COVID-19).

COVID-19 cases in the Philippines reached 202 as of Wednesday night.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso’s close was among its weakest performances in more than two months.

“The peso exchange closed slightly weaker after the latest sell-off in the global stock markets that favored the dollar as a safe haven,” Mr. Ricafort said in a text message.

After a two-day trading halt, the Philippine Stock Exchange index saw a heavy sell-off on Thursday and lost 711.95 points, dropping by 13.34% to 4,623.42.

Today, the trader expects the peso to move within the P51.05 to P51.25 levels, while Mr. Ricafort gave a forecast range of P50.95 to P51.25. — L.W.T. Noble

Shares plummet as trading resumes after halt

LOCAL SHARES crashed to historic lows yesterday as the market recorded heavy sell-offs as it reopened after a two-day shutdown.

The benchmark Philippine Stock Exchange index (PSEi) dropped 711.95 points or 13.34% to 4,623.42 yesterday. The broader all shares index likewise gave up 390.21 points or 11.92% to 2,881.58.

The local bourse is now implementing shortened trading hours of 9:30 p.m. to 1 p.m. while Luzon is under quarantine until April 13.

The circuit breaker was again triggered yesterday when the PSEi fell 12.4% at the opening bell. The circuit breaker is a 15-minute trading break when the index drops at least 10%, meant to allow investors to rethink their positions.

The main index dropped to as low as 4,039.15 intraday, an “unprecedented” 24.29% drop, and peaked at 4,751.72 before settling at 4,623.42 at the close.

“As expected, the market promptly triggered the circuit breaker almost immediately on open, as two days’ worth of selling pressure was unleashed,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message.

Value turnover jumped to P9.42 billion with 1.25 billion issues switching hands, compared to Monday’s P6.44 billion with 618.19 million issues.

Foreign outflows ballooned to a net selling of P2.40 billion from P741.72 million in net outflows on Monday.

“Shares plummeted as investors worried about the economic damage from the coronavirus disease 2019 (COVID-19) pandemic,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said.

Wall Street plummeted on Wednesday with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices losing 6.30%, 5.18% and 4.70%. Asian markets were mostly in red territory as well.

“With a number of markets still reeling from the pandemic, we may continue to see volatility as uncertainties abound with recession now being entertained globally,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.

Sectoral indices back home also declined by double digits yesterday. Mining and oil wiped out 802.60 points or 17.74% to 3,720.87; financials dropped 198.24 points or 15.37% to 1,090.95; industrials shaved off 919.47 points or 13.33% to 5,975.43; holding firms cut 669.38 points or 13.11% to 4,435.78; property erased 344.45 points or 12.51% to 2,408.60; and services lost 134.79 points or 11.60% to 1,026.68.

Decliners beat advancers by a landslide, 211 against eight, while 21 names ended unchanged.

“As the local market continues to correct on these uncertainties, investors should continue to be cautious and may continue to accumulate at major support levels on fundamentally sound companies with low valuations especially on market weakness,” Mr. Pangan said. — Denise A. Valdez

Electricity demand drops 30% due to lockdown

POWER demand has fallen about 30% during the Luzon enhanced community quarantine to contain the spread of COVID-19 (coronavirus disease 2019), reflecting the decline in power use by shuttered businesses, the Department of Energy (DoE) said late Wednesday.

Energy-related investments, it said, are also expected to be hindered by the lockdown, which has restricted public transport and forced workers in non-exempt industries to stay home.

“The primordial concern right now is to defeat the (COVID-19) crisis,” DoE Secretary Alfonso G. Cusi said in a statement.

The department asked the energy industry to defer bill collections by 30 days or until after the lockdown period ends on April 14.

On Saturday, the DoE released guidance regarding the continuous delivery of energy, including a pass system and guidance on signage for fuel cargoes to allow them to make it past checkpoints. It has also arranged for fuel imports to land unimpeded.

Shell Philippines Exploration B.V., which has a 45% stake in the Malampaya Deep Water Gas Field, was allowed by the DoE to continue deliveries and allowed free movement for its employees.

Energy Development Corp., which operates 61% of the Philippines’ geothermal capacity, said in a statement that it is maintaining its generating operations to support key industries like hospitals, the pharmaceutical sector, and food manufacturers.

AC Energy Philippines, Inc. disclosed to the Philippine Stock Exchange (PSE) that it has adequate fuel inventories for the duration of the lockdown.

The Batangas power plants of Semirara Mining and Power Corp. are also up and running, the company said.

Aboitiz Power Corp. said its fuel supply chain for its power plants remains open, and it is arranging for imported parts to be delivered promptly.

The Manila Electric Co. said it has experienced delays in the delivery of essential parts sourced from China, affecting its operations and maintenance activities.

PetroEnergy Resources Corp. reported that as a result of travel restrictions, its scheduled power plant maintenance by third-party foreign suppliers could be affected.

Greenenergy Holdings, Inc. told the PSE that it has informed the supplier of its solar products to defer shipments to after the quarantine period. — Adam J. Ang

All-industry revenue growth eases in 4th quarter

REVENUE across all industries grew in the fourth quarter, but growth slowed compared to year-earlier levels, the Philippine Statistics Authority (PSA) said.

According to the PSA’s Quarterly Economic Indices (QEI) report, the total gross revenue index, which measures sales generated by all companies, rose 3.5% in the three months to December.

The fourth-quarter reading was the slowest year-on-year growth since the adoption of the 2016 base year.

Four out of eight industries expanded in the fourth quarter but at a lower rate of growth compared to a year earlier. These were trade (7.6% from 12.6%); electricity, gas and water supply (5.2% from 14%); transportation, storage and communication (3.9% from 4.1%); and real estate (5.5% from 8.7%).

Meanwhile, two sectors posted declines during the period: mining and quarrying (-1.6% from -1.7%); and manufacturing (-2.2% from 10.7%).

Bucking the trend were financial and insurance activities and other services, where growth accelerated to 13.7% (from 8%) and 7.3% (6.9%), respectively.

Employment declined 0.2% in the fourth quarter compared to the 3.1% growth logged a year earlier.

Sectors posting growth in employment during the period were: electricity, gas and water supply (0.5%); trade (2%); transportation, storage and communication (1.7%); financial and insurance activities (3.8%); and real estate (2.4%).

Declines were noted in mining and quarrying (-2%); manufacturing (-3.3%); construction (-0.3%); and other services (-0.5%).

Compensation growth accelerated to 4.7% in the fourth quarter from 4.2% a year earlier, led by financial and insurance activities (9%); manufacturing (8.5%); real estate (7%); mining and quarrying (3.9%); electricity, gas and water supply (3.8%); trade (3.8%); other services (2.6%); and construction (2.5%).

On a per-employee basis, compensation grew 4.8% from 1.1% a year earlier.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the slowdown “may be largely brought about by the global economic slowdown” due to the US-China trade war as well as “some spillover effects” of government underspending caused by the delay in the approval of the 2019 national budget.

“The slower global economic growth reduced global trade, including some Philippine exports that, in turn, caused some reduction in local manufacturing and other production activities,” Mr. Ricafort said.

“Reduced government spending especially on infrastructure… may have reduced the sales of local businesses especially those that are part of the supply chains of the various infrastructure projects… that suffered some delays,” he added.

Asked about the accelerated growth in per-employee compensation, Mr. Ricafort said unemployment and underemployment rates have been the lowest in nearly three decades.

In the first quarter of 2020, revenue “could still pick up” with government spending as the major growth driver of the economy for this year.

On the other hand, he noted businesses that scaled down production in view of the enhanced community quarantine in Luzon “could experience some reduction” in revenues, as well as result in some reduction in incomes by some workers in adversely-affected industries.

“The supply of food, agricultural products, groceries, and other basic necessities are exempted. Thus, revenue of these exempt businesses could still continue to grow, as an offsetting factor,” the economist said. — Lourdes O. Pilar

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