The COVID-19 pandemic has ravaged many economies over the past year. To this day, it continues to do so, and its impact to the Philippine economy is far from over. As the global pandemic spread throughout the country, the Philippine economy plunged by 9.5%, the sharpest decline in recorded history and the first decline since 1998.
At the beginning of the crisis, there was uncertainty as unemployment rose not only in the country but also globally which also affected the livelihood of our Overseas Filipino Workers (OFW). The decline of overseas remittances was fortunately muted with a 0.8% decrease, ending 19 years of growth. People’s instincts were to conserve cash and be as liquid as possible. This affected discretionary spending which in turn affected sales of non-essential goods, which also affected the revenues of many mall tenants. Strict health protocols and quarantine periods were imposed that limited access to malls, forcing a large number of mall tenants to remain closed or to operate in limited capacity. Major purchases such as properties were impacted, more so in the luxury and higher-end market segments.
Fortunately, the Bangko Sentral ng Pilipinas (BSP) implemented a more accommodative monetary policy such as cuts in the reserve requirement that released a significant amount into the banking system. The BSP also increased the real estate loan limit of universal banks. These allowed property developers to raise funds and strengthen their balance sheet at low interest rates. The passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law that lowers the corporate income tax also provides a fiscal relief and will facilitate recovery of businesses. CREATE also finalized the incentives available to investors, which removed the cloud of uncertainties especially for BPOs.
Filinvest Land, Inc. was not spared from the adverse effects of COVID-19. We saw our residential option sales, real estate revenues, as well as our mall rental revenues significantly affected. Nevertheless, your Company has proactively managed the crisis by putting into action its Business Continuity Plan (BCP). The BCP has enabled your Company to operate efficiently despite the limitations imposed during the quarantine periods. Despite the difficult operating environment, your Company was able to face the hurdles by implementing its BCP. The BCP laid out the processes necessary to ensure that your Company is able to operate within the crisis period. It covers health and safety, cash flow management, customer transactions, construction protocols and supplier payments. Your management assures our stakeholders that the long-term prospects of your Company are preserved.