“While 2021 will be tough, it will hopefully be better than 2020,” said the LT president and CEO during its stockhodlers’ meeting on May 5
Tan said the enhanced community quarantine (ECQ) in Metro Manila starting late March (which has since been downgraded) would “impact the government’s projected GDP (gross domestic product) growth of between 6.5 percent to 7.5 percent for 2021, that was announced earlier this year.”
“But this is still a reversal from the 9.5 percent contraction of 2020,” said Tan. LTG is doing its part in achieving herd immunity by securing vaccines for all of its 50,000-plus employees and service providers.
Tan said LTG would invest P9.7 billion this year or nearly double its P5 billion capital expenditures in the coronavirus-damned 2020.
More than half of LTG’s capex will be poured into its 57 percent-owned Philippine National Bank.
“PNB will see some more NPLs (nonperforming loans) booked as Bayanihan 1 and 2 that provided a grace period for borrowers ended in 2020, but a better economy should pave the way for the need of more loans,” said Tan.
Tan is also concerned about LTG’s 50-percent owned subsidiary, PMFTC Inc., which could be hamstrung by the new taxes imposed last year.
“PMFTC’s products might still be impacted, as price increases are needed to pass on the annual increase in excise taxes, the last of which was in October 2020,” he said.
President Rodrigo Duterte signed a new round of excise taxes on tobacco products to P45 in 2020; another P50 hike in 2021; P55 increase in 2022; P60 rise in 2023; and additional five percent annually hike from 2024.