Davao-based businessman Dennis Uy’s Phoenix Petroleum Philippines Inc. said it had largely settled dues to some suppliers, refuting allegations of mounting debt to the tune of multimillion dollars.
Phoenix Petroleum told the local bourse it “has substantially settled some of these obligations and continues to do so until [their] completion.”
The oil company issued the clarification in response to claims that it had fallen short of paying dues to bioethanol suppliers run by some tycoons amounting to $12 million or about P647 million.
Under Republic Act No. 9367, also known as the Biofuels Act of 2006, all liquid fuels for motors and engines sold in the Philippines should be blended with biofuels.
The Uy-led company said “the matter with the concerned suppliers have progressed and negotiations are either ongoing or have been completed by the company with the parties.”
“Debt is necessary in any business in order to expand and grow it. Just like any other company, Phoenix has its own liabilities that were incurred to fuel and propel its growth,” said Phoenix Petroleum senior vice president Raymond Zorrilla.
And like other businesses in the country, Phoenix Petroleum said it had experienced its share of challenges that stemmed from the slowdown of economic activities amid the prolonged COVID-19 pandemic.
“Subsequently, operations were likewise adversely affected by geopolitical issues, specifically the war between Ukraine and Russia, that drove extreme volatility in global crude oil prices,” the firm said.
“These negative effects are felt not only by Phoenix Petroleum but all other businesses in the country and in fact, globally with no exception,” it added.
These are among the “real challenges” that all companies nationwide “has had to endure in the last two and half years.”
Loss-making
As a result, Phoenix Petroleum incurred a net loss of P466.2 million in 2021, a reversal of the P62.6-million net profit a year ago. The company booked losses despite almost doubling its revenues to P132.3 billion.
In its quarterly report, Phoenix Petroleum posted a first-quarter net loss of P262.7 million against the P121.3-million net income booked in the same period last year. Revenues climbed to P36.5 billion.
For the first three months of 2022, total assets stood at P89.5 billion while total liabilities amounted to P69.4 billion.
Phoenix Petroleum said recovery was underway, albeit slowly. Amid the dismal financial performance, it expressed hope it would “overcome the headwinds like the rest of the businesses in the country.”
“It has been set back by the emerging threats of a recession in developed markets fanned by sharply rising prices across the world and prevailing geopolitical risks,” it added.
In recent days, debt default fears escalated as creditors issued a default notice to Clark Global City Corp., a subsidiary of Uy-led Udenna Corp. This was after missing P274 million in lease payments for the Clark Global City project. The arrears have been settled since then, averting a debt crisis for the group, which has rapidly expanded during the term of former President Rodrigo Duterte.