By James A. Loyola
LT Group Inc. (LTG), the flagship of taipan Lucio Tan, is maintaining a guarded outlook for 2020 amid the impact of the COVID-19 pandemic.
During the firm’s Annual Stockholders’ Meeting, LT Group President Michael G. Tan noted that, despite expected challenges, he hopes their strong 2019 results will give the conglomerate a strong foundation to weather the current crisis.
The firm already felt the effects of COVID-19 in the first quarter, starting mid-March, when the Government declared an Enhanced Community Quarantine (ECQ), particularly by the Bank, tobacco and the alcoholic and non-alcoholic beverage businesses.
“Some plants were not allowed to operate when 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),” he said.
Tan said government estimates that the economy will contract by 2 percent in 2020, but some economists expect a higher deceleration.
With purchasing power affected, he said demand for consumer goods is expected to be weak, and will affect the sales volumes of the products of PMFTC Inc., Tanduay Distillers, Inc. and Asia Brewery, Inc.
Eton Properties Philippines, Inc. will also be affected as some tenants may end their lease contracts while demand for residential units will be weak.
Meanwhile, Philippine National Bank will have to contend with higher non-performing loans (NPLs) as well as slower demand for loans.
“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. The key to faster recovery would be the availability of a vaccine for COVID-19 which it hopes will be sooner than later,” Tan added.
For the first quarter of 2020, LTG’s attributable net income amounted to P6.21 billion, 41 percent more than the P4.42 billion reported for the same period last year.