MANILA – Tycoon Lucio Tan’s LT Group on Tuesday said it was maintaining a “guarded” outlook this year, as the pandemic saps demand for its products.
LT Group which controls Philip Morris-Fortune Tobacco (PMFTC), Asia Brewery, Tanduay Distillers and Eton Properties has been hurt by the 11-week lockdown and a drop in consumer confidence.
"Some plants were not allowed to operate when enhanced community quarantine (ECQ) was declared as the products were considered non-essential. Sari-sari stores that play a big role in reaching consumers, were closed in some areas. There were also liquor bans declared by some local government units (LGUs),” said LT Group president Michael Tan.
With purchasing power affected, demand for consumer goods is seen to be weak, and will affect sales volumes of the products of PMFTC, Tanduay Distillers and Asia Brewery, it said.
Eton Properties is also hit by muted demand for its residential units, as well as tenants that may cut their lease contracts while its banking arm, Philippine National Bank (PNB) will have to contend with higher non-performing loans (NPLs) and slower loans take up.
“Even as the economy restarts under different permutations of the quarantine thereafter, LTG believes it will take a while before the Philippine economy goes back to the normal, or to what it used to be,” said Tan.
LT Group posted a net income of P23.12 billion last year, its highest since a re-IPO on April 2013 while first quarter income was at P6.21 billion up 41 percent on year.
"LTG’s strong 2019 results will give the conglomerate a strong foundation to weather the current crisis. The key to faster recovery would be the availability of a vaccine for COVID-19 which i hope will be sooner than later,” Tan added.
Second quarter gross domestic product is likely to be worst, seen shrinking at 5.7 to 6.7 percent, BSP Governor Benjamin Diokno said earlier.
The Philippine economy shrank in the January-to-March period, a first since 1998 ending over two decades of growth.