San Miguel Corp. president and chief operating officer Ramon Ang said economic recovery may be delayed to 2023 because of rising COVID-19 cases unless a massive vaccination rollout takes place.
“The economy this year and next year will not improve yet unless the promised vaccine arrives,” Ang said.
He said the power and oil industry sector were still recovering from the low demand brought about by the coronavirus pandemic, which restricted the movement of people.
“The [energy] industry looks sad…power demand is low, fuel demand is very low. We thought our lives would improve this year. This year would not really improve compared to last year,” Ang said in a virtual briefing.
San Miguel owns several power plants and operates Petron Corp., the country’s biggest oil company.
“Because of the rate of infection and summer demand is low, I don’t think 2021 will be a good year,” he said.
Both the power and oil sectors are consumer-driven and COVID-19 resulted in billions of pesos in losses in the oil sector, he said.
SMC Global Power Corp., the power arm of San Miguel, posted a net income of P18.87 billion last year, up 31 percent from P14.364 billion in 2019.
Ang said, however, that the first two months of 2021 were affected by low demand and the outage of the 1,200-megawatt Sual coal-fired power plant.
“First two months, we suffered losses because of low consumption and Sual was down for a long time,” he said.
San Miguel posted a net income of P21.87 billion in 2020, down 55 percent from P48.57 billion in 2019 as the economy plunged into recession amid the pandemic.
“San Miguel as a group has no problem. Our balance sheet is solid. We have a strong business but the problem is, most of the public could earn only enough and if they are affected, demand will be affected. Food, services, everybody will be affected by the crisis,” Ang said.
Ang said Petron would likely continue to incur a net loss this year although this could be lower than in 2020.
Petron incurred a net loss of P11.4 billion in 2020, coming from a net income of P2.3 billion in 2019. It also shut down its Bataan refinery.
“Travel will not likely happen up to next year. So if nobody can travel, even next year, demand will still be low—power demand, fuel demand,” Ang said.
Meanwhile, Ang said San Miguel decided not to participate in the sale of the 45-percent stake of Shell Philippines Exploration B.V. in the Malampaya gas project.
“We did not submit [an offer] for Malampaya. Originally, we wanted to submit but after we studied it, we decided not to submit,” Ang said.