A country club I used to frequent during the pre-pandemic life has turned into a ghost town, its life sapped to the last breath. It is now an empty building cordoned off with a yellow barricade tape that looked like a police line, as if a gruesome crime had happened there. Indeed, it might as well be a crime scene, except the killer is a tiny, tiny virus invisible to the naked eye.
The caddies are nowhere to be found, the restaurants are closed, the parking lot is empty. Not a single security guard was around to stop me when I roamed the once busy district. I thought it was open, as quarantine restrictions have eased, but I was wrong.
In the once sleepless Poblacion, the old downtown area of Makati, speakeasies, bars and restaurants are closed, too, as if someone had cast a spell on the lively, hip area, putting it into a deep slumber for until God knows when.
In Pasong Tamo, art galleries, avant-garde hangouts, and dining places that used to be bustling with creativity, art, and artists with infectious chutzpah are now devoid of people and activities; it makes you feel like you just stepped on dystopian land.
The lockdowns have no doubt paralyzed businesses all over Metro Manila and the less stringent modified enhanced community quarantine classification is unlikely to bring back economic activities.
Demoralizing
Just seeing all this is depressing, yet I don’t even have a business. I cannot imagine how difficult it must be for business owners and their employees.
“It must be so demoralizing for businessmen,” I told the chairman of a listed company.
“Bullseye!” he said, “and these are the things you can’t quantify.”
Indeed, on top of the still unresolved COVID-19 pandemic, our economic pains continue.
The good news is that corporates’ second-quarter performance showed improvements from last year. The bad news is whatever little improvement they managed to achieve, even partly due to low base effect, could be wiped out because of the stricter lockdowns this ghost month of August.
Let’s look at some of the numbers.
Conglomerates
Conglomerates’ results were mixed, but many managed to recover.
The Gokongwei’s JG Summit, for instance, recorded a core net income of P1.7 billion in the first half, up 19 percent as its food and banking revenues remained stable. Its snack foods giant Universal Robina Corp. reported a net income after tax of P8.5 billion for the same period, up 42 percent.
The Po family’s Century Pacific Food ended the first half with a net income of P2.7 billion, clocking in a double-digit growth of 21 percent versus the same period last year on the back of strong export sales and resilient local demand.
San Miguel Corp. reported a first-half net income of P29.6 billion, a major turnaround from a net loss of P4 billion last year. All major businesses such as food and beverage posted robust recoveries in the second quarter, SMC disclosed.
Ty-owned GT Capital Holdings, likewise, grew its net income by 143 percent in the first half of the year to P6.7 billion. Core net income rose 83 percent to P5.8 billion, driven by Metrobank and the strong automotive business through Toyota Philippines.
On the other hand, Lucio Tan’s LT Group, Inc. reported a first half net income of P3.73 billion, down by 63 percent or P6.30 billion compared to the P10.03 billion recorded a year ago, but this was due to higher provisioning for credit losses of banking arm Philippine National Bank.
Nicky Franco, head of research at Abacus Securities, said that without the PNB factor, LTG’s recurring second quarter profit was P5.1 billion, up 33 percent, while the first-half figure was P11.6 billion, up 15 percent.
“These numbers still lag consensus, but are certainly much better relative to its conglomerate peers,” Franco said.
Indeed, LTG’s other businesses such as tobacco, liquor and beverage performed well.
Ayala Corp. reported a net income of P10.4 billion in the first half, up 31 percent, but core net income decreased eight percent to P13.3 billion during the period.
Pangilinan-led Metro Pacific Investments Corp. reported a 13 percent increase in first half core net income to P6 billion from P5.3 billion.
Among the smaller listed companies, Fruitas Holdings, the listed food and beverage kiosk chain, returned to profitability in the second quarter and narrowed its first half losses to P9 million from P12 million a year ago.
But how about the smaller, neighborhood businesses or stand-alone restaurants?
Just by looking at their empty tables or closed shops, we know they’re hard up and the problem is worse for the many employees laid off than for the business owners — chefs, waiters, cashiers, errand boys, contractual workers, etc.
For sure, our economic pains will continue and the continued nationwide lockdown — instead of localized lockdowns — will further aggravate the problem.
I won’t be surprised if companies’ third quarter numbers erase whatever little gains were recorded in the second quarter because as I write this, there’s still no telling when the lockdowns, modified or otherwise, will really end.
Iris Gonzales’ email address is eyesgonzales@gmail.com. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com