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Signals of recession and recovery

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FINEX Folio — By J. Albert Gamboa-125

FINEX Folio

The Philippine economy’s performance in the third quarter was worse than expected. Contracting 11% year on year, the country’s gross domestic product went into negative territory for the third consecutive quarter.

Among the hardest hit by the COVID-19 crisis is the downstream petroleum sector. Its biggest player, Petron Corp., suffered a net loss of P12 billion in the first nine months of 2020 compared with its P3.6 billion in earnings during the corresponding period last year. Based on the latest industry report, it has also lost a considerable share of the liquefied petroleum gas (LPG) market where it used to be the dominant player.

Petron’s ranking in the LPG industry went down to third place during the third quarter, having been overtaken by Liquigaz Philippines Corp. (LPC) and South Pacific, Inc. (SPI). Compared with their 2019 market share, Petron declined by 6.2% from the July-September period vis-à-vis LPC’s 1.8% uptick and SPI’s 4.2% growth.

Locally owned SPI has come a long way since it started commercial operations in 2015. Under the leadership of founder Arnel Ty and CEO Jun Golingay, it has continuously grown in terms of sales volume by maximizing the use of its own truck fleet while maintaining three terminals in Pampanga, Batangas, and Cebu. Up against much larger players, SPI plans to construct five more terminals in the Visayas and Mindanao.

Mr. Golingay attributes SPI’s resilience to its mostly household retail clientele, while its rivals focused on industrial and commercial accounts, majority of which were temporarily closed in the early stages of the health crisis. Because of its huge storage capacity, supply was consistently stable despite worldwide quarantines and travel restrictions. Its jetty facilities made possible the delivery of refrigerated cargo from very large gas carriers, giving SPI the most competitive gas costs in the country.

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In contrast, other businesses were paralyzed by the pandemic due to the series of lockdowns in many regions. But according to Petron CEO Ramon Ang, “while the oil industry continues to face major challenges, we are beginning to see signs of recovery.”  It seems the economy already bottomed out in the second quarter when the GDP plunged to -16%. As more and more businesses reopen across the nation, the outlook for 2021 has somewhat improved — signaling the start of a much-awaited reversal.

‘WE WIN AS ONE’
Taking inspiration from the theme of the 30th Southeast Asian Games (SEAG) hosted by the Philippines in December 2019, the slate of Rep. Abraham Tolentino emerged victorious in the recent election for the executive board of the Philippine Olympic Committee (POC). Now the dust appears to have settled on the high-profile mudslinging waged by his adversaries. The 30-22 winning score gives him a fresh four-year mandate to manage the parent organization of the country’s 54 national sports associations (NSAs).

Former House Speaker Alan Peter Cayetano, who chaired the Philippine SEAG Organizing Committee (Phisgoc), recognized the crucial role played by Mr. Tolentino in the successful multisport event. “His reelection signifies the vote of confidence of the leaders of the NSAs, and we hope that the POC leadership will continue to inspire and provide our athletes with the support they need during competitions,” said Mr. Cayetano.

However, the success of Messrs. Tolentino and Cayetano in organizing the international event was met with accusations of irregularities from Phisgoc’s detractors. The POC election results should thus put to rest these allegations and give the winning ticket a clear path to implement the turnaround of the country’s sports program.

Among the winners in last week’s election was Al Panlilio, president of the Samahang Basketbol ng Pilipinas (SBP) and incoming first vice-president of the POC. He disclosed that the Philippines has offered to host the FIBA Asia Cup qualifiers in February 2021 after the Gilas Pilipinas team resoundingly beat Thailand at the Bahrain “bubble” over the long weekend.

For the hastily assembled national team composed of collegiate level players who only started practicing three weeks ago, it was an amazing feat for the Gilas cadets to demolish the all-professional Thai squad twice in a row. Kudos to Mr. Panlilio along with the coaching staff headed by Jong Uichico and SBP program director Tab Baldwin.

This only goes to show that when sports officials get their acts together, our athletes not only prevail but also succeed in imbibing the Olympic values that foster patriotism and genuine sportsmanship.

 

J. Albert Gamboa is CFO of the Asian Center for Legal Excellence and chairman of FINEX Publications.

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