The National Telecommunications Commission (NTC) is trying to collect
about
PhP1 billion in outstanding fees from two big telecommunication
companies. NTC officials said in a statement yesterday that Smart
Communications, Inc. and its sister firm, Pilipino Telephone Corp. (Piltel),
have unpaid regulatory and licensing fees, some dating back to as far as
1999. The exact amount of receivables is now the subject of litigation.
Smart official Ramon Isberto said in a separate statement that his
company was contesting the issue in court on the basis of computation.
"The matter is already with the regional trial court and is under
dispute," he said. NTC director Edgardo Cabarios said the unpaid fees
include Supervision Regulatory Fees (SRF), which telecommunication firms
must pay to NTC so they could operate. The SRF, he said, is computed
based on paid-up capital, and that payment of this fee is pursuant to a
Commonwealth Act. "So if your paid-up capital is
PhP1 billion, then the SRF you have to pay is
PhP50 million," Mr. Cabarios said.
In Piltel's case, its unpaid SRF reportedly grew because it has not
paid since 1999. The cellular phone firm had been in the red until
recently. In 2003 Piltel tried to settle the outstanding fees by giving
the court
PhP9 million. But NTC disputed Piltel's computation of its total SRF.
"We told them we will receive that
PhP9-million payment, but only as payment for surcharge. I don't
know how much Piltel's surcharge fees amount to, but the principal of
the more than
PhP1 billion in SRF dues is between
PhP600 million and
PhP700 million," Mr. Cabarios said. Leading mobile phone firm
Smart's outstanding fees with NTC involve registration license fees (RLF)
amounting to about
PhP100 million, and Spectrum Users Fees (SUF). These license fees
have been due since 2002. Smart had contended that it was being charged
double by NTC. The pending case in court involves the computation of the
RLF as well. "The NTC computation is, one GSM [global system for mobile
communications] station is equivalent to eight time slots, which is
equivalent to one channel. NTC computation is based on the number of
channels, and not on the number of stations," Mr. Cabarios said. Smart
said NTC assessed its fees according to the number of channels or time
slots of its GSM stations, when in fact the SUF had already been
computed based on the same number of channels.
Raulito Suarez of the Rates Regulation Division of NTC explained that
telecommunication firms usually paid four types of fees with NTC:
- the SRF, computed as 50 centavos for every
PhP100 paid-up capital;
- a permit fee of 50 centavos for every
PhP100> increase in authorized capital or for every increase in
cost of investment;
- the RLF; and
- the SUF.
Mr. Suarez said the payment of permit fees was also pending in court,
as it was opposed by Bayan Telecommunications Philippines, Inc. Other
telecommunication companies like Globe Telecom, Inc. also await the
court ruling in the case. NTC chief Ronald Olivar Solis vowed to resolve
the issue immediately. "I am now awaiting input from our legal
department. If we resolve, if we go by our computation, then we will
send a collection letter to Smart. I'm sure Smart will [appeal] this
matter," he said. -- Beverly T.
Natividad
|
President Gloria Macapagal-Arroyo yesterday announced initial changes
in her official family, ending weeks of speculations regarding an
impending Cabinet revamp. The President confirmed earlier talk that she
would appoint Executive Secretary Alberto G. Romulo to the Foreign
Affairs department, in place of acting secretary Delia D. Albert. To
replace Mr. Romulo, the President named Defense Secretary Eduardo R.
Ermita. Presidential Chief Legal Counsel Avelino Cruz will be the new
Defense chief. Neither was it a surprise that the President named former
House of Representatives members to other Cabiner posts:
- Former Batanes (northern Luzon) Rep. Florencio B. Abad was
appointed Education secretary to replace Edilberto C. de Jesus.
- Former Iloilo City (Western Visayas) Rep. Raul M. Gonzalez, who
chaired the congressional canvassing committee for the last
elections, got the Justice portfolio, in place of acting secretary
Merceditas Gutierrez.
- Former Cebu (Central Visayas) Rep. Joseph Ace H. Durano was
named the new Tourism secretary. The President earlier decided to
move the Tourism department's head office to Cebu, to closely
monitor the thriving tourism industry of the province.
Outgoing Tourism chief Roberto M. Pagdanganan was appointed chairman
and President of Philippine International Trading Corporation. The
President also appointed Vice-President Noli L. de Castro as concurrent
chairman of the Housing and Urban Development Coordinating Council, to
replace Secretary Michael T. Defensor. Mr. De Castro is currently
Presidential Adviser for Overseas Filipino Workers, and co-chairman of
the National Anti-Poverty Commission. Mr. Defensor was appointed
Environment secretary to replace Elisea G. Gozun. Presidential Spokesman
Ignacio R. Bunye was named concurrent Press secretary to replace Milton
A. Alingod, while Regional Development Officer for Western Visayas Rene
C. Villa was appointed Agrarian Reform Secretary, to replace acting
Secretary Jose Mari Ponce. Retiring Philippine National Police Chief
Hermogenes Ebdane, Jr. was named National Security Adviser, while
Anti-Illegal Drugs Task Force chairman Edgardo Aglipay was named as the
new chief of the national police. Mr. Aglipay retires on September 13.
Former Ayala Land Corp. president Francisco Licuanan was named
Presidential Adviser for Clark-Subic Development, while former Davao del
Norte governor and President of the League of Provinces Rodolfo del
Rosario was appointed Presidential Adviser for New Government Centers.
National Housing Authority chairman Edgardo Pamintuan was named
Presidential Adviser for Constituencies. Outgoing chairman of the
Securities and Exchange Commission Lilia Bautista will be the next
Ambassador to Belgium. Appointed to replace her at the commission was
former Energy Regulatory Board chairman Fe Barin.
The other appointees are:
- Thelmo Cunanan, as chairman of the Social Security System;
- Sergio Valencia, as chairman of the Philippine Charity
Sweepstakes Office;
- Reynaldo David, as president of the Development Bank of the
Philippines;
- Energy undersecretary Eduardo V. Mañalac, as President of the
Philippine National Oil Corporation;
- Jose Perez, as president of the United Coconut Planters Bank;
- RPN Channel-9 chairman Cerge Remonde, as Government Media Group
Head;
- Imelda Nicolas, as secretary-general of the National
Anti-Poverty Commission; and
- Former Iloilo Rep. Augusto L. Syjuco, as chairman and
director-general of the Technical Education and Skills Development
Authority.
Mr. Bunye said the appointments would take effect as soon as incoming
officials receive their appointment papers and are sworn in by the
President. There is no schedule yet for the oath-taking. Secretaries De
Jesus and Gozun were not given new posts, as well as those removed from
the helm of government firms. --
Jeffrey O. Valisno
|
Over the past few months, the corporate world witnessed a significant
changing of the guards in several big listed companies. In the case of
SM Prime Holdings, Inc., for instance, the leadership change gives a
glimpse of how major companies distinctly deal with transitions. In a
corporate world dominated by family-owned corporations, naming an heir
to the management throne is usually predictable, especially if the
heir-apparent has become visible of late. Leadership will likely go to
the children or any family member of the patriarch who built the
business. In some cases where the patriarch fails to ensure a smooth
transition, siblings battle each other to get a bigger share of the
fortune.
For 2004, Philippines, Inc. had its share of family feuds and smooth
transfers. Some companies underwent successful transition, given a
carefully planned succession schemes, such as when the successor builds
on the framework of his predecessor, while introducing new ideas in
running the company. An example is Ayala Land, Inc. (ALI), the largest
real estate company, which installed its new president last July 1.
After being controlled by the Zobel de Ayala clan since its creation,
the company has transformed into one that is run by professional
managers. After 15 years of growth in developing real estate projects
for the high-end market under the leadership of Francisco Licuanan III,
the company plans to move towards strengthening its presence in the
middle-income and mass markets under its new president, Jaime I. Ayala.
Mr. Ayala, who holds a Masters in Business Administration (MBA) degree
from Harvard University and an undergraduate degree from Princeton
University, took over from Mr. Licuanan, who was president since ALI was
spun off from its parent firm, Ayala Corp., in 1989. Mr. Ayala had said
he would continue to build on the values that ALI was known for, and
vowed to steer the firm towards new markets, including the expansion of
the middle-income market that started under Mr. Licuanan's watch. He
admitted to being a neophyte in managing a real estate company, but
noted that his 19-year experience with global consulting outfit McKinsey
and Co.'s international operations provided him the training and skills
vital to running real estate firms such as dealmaking, project
management, marketing, and working with economic clusters.
ALI chairman Fernando Zobel de Ayala noted that choosing a successor
for Mr. Licuanan took two years, and that candidates were considered
based on experience, academic background, and age. "Since we have a
mandatory retirement age of 60, we looked for somebody who will give the
company a good run for the next 15 years," he said. Mr. Zobel said Mr.
Ayala was chosen because of his academic background and experience in
dealing with various business sectors. He added that there would be no
change in management philosophies as a result of the leadership
transition.
SCENARIOS
But how the change in management position will be interpreted in the
stock market is a different issue altogether. What will be the impact to
investors and how will this translate to profits are the more pressing
issues. In separate interviews with BusinessWorld, stock market
analysts said the change could translate to various scenarios. Joey
Roxas, president of Eagle Equities, Inc., said the change in leadership
could be interpreted only as good or bad -- better if the new leader was
also trusted and was vouched for by the old leadership. This kind of
change, said Mr. Roxas, would be welcomed by investors and could lead to
a rise in company share price. Jose Vistan Jr., research director of AB
Capital Securities, Inc., said leadership change should be seen
objectively. "If the company is doing well prior to the change,
investors may be rattled. But if the company was not doing well before,
the change would be a welcome development," he said. But Ron Rodrigo,
senior analyst at Accord Securities, Inc., said the impact of any
management change would depend on investor outlook.
CULTURAL DIFFERENCE
At the same time, culture is also crucial to creating investor
perception. While Western companies normally usher in the younger
generation as the patriarchs completely fade out, this is not exactly
the case for an Asian outfit, where the old leadership's presence is
still felt. Such was the recent experience of mall and property giant SM
Prime Holdings, Inc. After growing the company from a single shoe store
along Aurora Blvd. in Cubao, Quezon City to one of Southeast Asia's
largest mall operators, Chinese-Filipino businessman Henry Sy, Sr.
finally turned over the reins of leadership to son Hans, who was then
senior vice-president for operations. Despite the leadership transition,
the elder Sy, who turns 80 this year, remains an integral part in the
decision-making process as chairman. Hans said his father relinquished
the executive post post since he wanted to "focus on directions and
leave the day to day operations" of the company to the next generation.
The younger Sy said there would be no drastic deviations from his
father's management style. Under his watch, he said the company "would
be more aggressive" in its expansion, a management trademark of his
father, who grew the single shoe store to 17 malls nationwide, while
diversifying into banking and property development. Henry Sr. also
turned over his board seat at San Miguel Corp. (SMC) to his namesake,
Henry Jr. Analysts said the younger Sy's assumption of the post
signalled SM's "more active participation" in SMC operations. Henry Jr.
handles real estate development projects through SM Development Corp.,
which recently ventured into middle-income condominium projects.
In 2002, SMC and SM said they would tap each other's networks to
improve operations and increase income. Some analysts said that despite
the willingness of some taipans to hand over the reins of power to the
younger generation, they still wield influence behind the scene. And the
effect of such an arrangement on share prices? Slight, they said. An
analyst said the impact of the leadership change has to be considered in
line with various factors, which include how the elders trained their
successors, and the credentials of the new leadership. It matters that
the new set of leaders are from Ivy League schools with an MBA and are
respected by their subordinates. These, said one of the analysts, could
prop up investor confidence and, thus, ensure more returns.
MINER'S STORY
In April, long-time mining executive Gerard H. Brimo also stepped
down as chairman and chief executive officer of Philex Gold, Inc., one
of the largest mining companies in the country. And in line with his
retirement from parent company Philex Mining Corp. in December, Mr.
Brimo turned over the Philex management to Dr. Walter Brown. Philex
officials said that after 11 years of service to the mining firm built
by his father in 1955, Mr. Brimo retired "to pursue other interests."
Mr. Brown was director of a number of Philex subsidiaries prior to
assuming the top post. Almost the same age as Mr. Brimo, the new
president has extensive experience in mining and oil exploration, and
vowed to continue on the projects started by his predecessor. Company
officials said Philex would pursue projects started during Mr. Brimo's
term, including extending the company's corporate life by another 50
years, and undertaking more mining explorations projects.
Philex Mining, a copper-gold mining outfit, was established in 1955
by the elder Brimo. The younger Brimo guided the company through several
mining tragedies as well as the 1997 Asian financial crisis, keeping it
on top of the industry when others had folded up. "If you look at the
large-scale sector in mining here, there's only really two left, that's
Philex and Lepanto. There's nobody else. We've survived. If you go back
30 years, there were probably 20 active companies in operation. There
were probably 15 copper mines here at one time, but the only copper mine
left is under Philex," Mr. Brimo had said.
-- Leilani M. Gallardo and Roulee Jane F. Calayag
|
The Energy Regulatory Commission (ERC) is asking the Court of Appeals
to uphold the former's decision granting Manila Electric Company (Meralco)
a PhP0.17 per kilowatt-hour increase in electricity rates. The Court of
Appeals on July 29 reversed the ERC ruling that allowed Meralco to raise
its electricity price in June last year. The court said ERC should have
first required the audit of Meralco's books and accounts before it was
allowed to break down or unbundle its charges and then to raise them.
Unbundling is the breaking down or detailing of power companies'
charges. Meralco's petition for unbundling was required by the Electric
Power Industry Reform Act or EPIRA. "In view of the foregoing, this
court is of the opinion that a CoA (Commission on Audit) audit before
approval by the ERC of both applications for rate increase and rate
unbundling filed by Meralco is necessary, being an essential aspect of
due process," the decision penned by Associate Justice Martin Villarama,
Jr. said. However, in a 38-page motion for reconsideration filed on Aug.
16 by the ERC before the Court of Appeals, the regulatory commission
said there was no valid reason to set aside the appealed decision as it
considered the CoA audit before granting the Lopez-led firm a
PhP17-centavo increase.
According to the regulatory body, "to charge now that ERC gravely
erred in not involving CoA in the appealed cases is grossly unfair to
it, as it is without any factual basis." "A CoA audit was indeed
conducted in the appealed cases, not to mention the actual assets
inspection undertaken for the purpose of computing respondent Meralco's
appropriate revenue requirement and rate base and determining the
reasonable rates that it is authorized to charge its customers," the
motion stated. As a matter of fact the ERC, in the motion, said Meralco
did not get the tariff adjustment it asked for. It was adjusted
downwards after the ERC considered the operating expense and
disallowances from rate base. Despite obtaining a CoA audit, the ERC
insisted that such audit was not a prerequisite for rate adjustments. In
the motion, ERC said it acted on its own when it requested for an audit.
The assistance CoA provides may not be made obligatory and mandatory, it
said, because no law and jurisprudence sanctioned these.
According to CoA declarations, auditing utilities for rate-fixing
purposes is not one of its principal concerns. In the motion, the
regulatory body said CoA even withheld assistance to the regulatory body
when it asked for help in the validation and verification of certain
accounts. In a letter of CoA assistant commissioner Arcadio B. Cuenco,
Jr. to ERC Chairman Rodolfo B. Albano, Jr. dated April 26, 2004, CoA
said: "We regret to inform you that this office could not extend such
assistance as this is not the mandated functions of this commission." As
such, the regulatory body asked if CoA had "the competence in terms of
personnel and resources, to conduct an audit of all utilities in every
rate case filed with the government regulators." Meralco's unbundled
rates took effect in June last year, after ERC approved its application
for unbundling as well as for a rate increase of 17 centavos per
kilowatt-hour. The increase covered 8.35 centavos per kilowatt-hour for
generation and transmission, and 8.65 centavos per kilowatt-hour for
distribution. -- Ma. Elisa P. Osorio
|
The Department of Finance (DoF) will ask Congress to approve a
measure broadening its powers to investigate corruption within revenue
agencies. One of the highlights of the legislative proposal is a
provision authorizing the DoF to check on the bank accounts of "revenue
agents," under investigation. The proposed "Graft and Revenue Agencies
Act" will likewise provide for "higher penalties" and mandate a "more
stringent reportorial of statement of assets and liabilities," among
revenue agents. It will likewise institutionalize the efforts of the
anticorruption arm of the Department of Finance (DoF) known as the
Revenue Integrity Protection Service (RIPS).
Finance undersecretary Emmanuel P. Bonoan, RIPS head, told reporters
the DoF was finalizing the draft of the bill and hoped to submit it to
Congress by September. Given the billions of revenues being lost to
corruption Mr. Bonoan said there was a need to "institutionalize DoF's
efforts for anti-corruption, after all it affects the economic
performance of the country." Mr. Bonoan added the measure would also
"beef up" the powers of the Ombudsman by allowing it to examine bank
records and confiscate unexplained wealth even if the probe is done at
the administrative level. He noted that several graft cases have been
dismissed due to failure of the complainants to produce hard evidence
against respondents. The Ombudsman, he added has no power to subpoena
bank records unless authorized by the courts. Mr. Bonoan said the DoF
should start with the bureaus of Internal Revenue and of Customs since
bulk of the revenues are collected by them.
The DoF has filed as of January 2004, in tandem with the Department
of Justice, a total of 11 cases with the Office of the Ombudsman against
erring officials of the BIR and BoC. The charges range from malversation,
falsification of public documents to unexplained wealth and violation of
the Anti-Graft and Corrupt Practices Act. The specific investigative
unit of the RIPS at the DoF is the Central Management Information
Office, which is in charge of the systematic and investigative gathering
of evidence against the corrupt government personnel. The RIPS covers
not just the BIR and the BoC, but also DoF itself as well as all its
related bureaus, boards, and offices. -- Karen L.
Lema
|
By IRIS CECILIA C. GONZALES,
Reporter
The Philippines is not likely to head the way of Argentina but
government needs to address problematic areas such reforms in the power
sector, a Bangko Sentral ng Pilipinas (BSP) official yesterday said.
Economists have warned that the Philippines may end up in a fiscal
crisis similar to Argentina where the latter defaulted on its debt
payments. Government officials have rejected the comparison, saying most
of the Philippines' debts have long-term maturities in contrast to
Argentina's mostly short-term loans. The BSP official, however, warned
that both countries share similar factors such as a looming energy
crisis and broken government contracts.
In the Philippines, the government should work to privatize the
money-losing National Power Corp., the official said, adding that in
Argentina, the government has also rejected contracts involving foreign
firms. Furthermore, both countries have dollar reserves of around $16
billion, relatively low compared to other emerging markets. Despite
these similarities, the official said the Philippine situation is still
better than that of Argentina. For example, Philippine banks do not have
negative net worth. Capital inflows continue in the Philippines, in
contrast to Argentina where no capital inflows or new debt are coming
in, the official added.
Meanwhile, the BSP said the Philippines' dollar reserves are the
second lowest among its Asian neighbors, increasing the peso's
vulnerability to shocks. As of end-2003, the Philippines had gross
international reserves (GIR) of $16.9 billion, next only to last-placed
Vietnam's $4.7 billion, the BSP said. Consisting mostly of US dollars,
the GIR comprises the total foreign currency holdings of the central
bank, including gold and special drawing rights, the currency used by
the International Monetary Fund (IMF). A strong GIR level helps insulate
the peso from shocks as it gives the central bank enough of a buffer to
preserve peso's strength. It indicates growing confidence in the
stability of the Philippine currency. The reverse holds in a situation
when dollar reserves are dwindling, indicating the lack of confidence in
the stability of the peso against the dollar and other regional
currencies.
In Asia, China had the highest GIR level at $403.3 billion as of
end-2003, followed by Taiwan with $206.6 billion. South Korea had dollar
reserves of $155.3 billion, while Hong Kong had total reserves of $118.4
billion. Among the Philippines' southeast Asian neighbors, Malaysia had
dollar reserves of $44.9 billion, followed by Thailand with $42.1
billion. Indonesia, meanwhile, had dollar reserves of $36.2 billion.
Only the Philippines and Vietnam had reserves below $20 billion. In
July, the Philippines had a GIR level of $15.90 billion, slightly higher
than the $14-15 billion projection for the year. Meanwhile, the
Philippines' external debt ratio to gross domestic product (GDP) was at
71.44%, still relatively high compared to other countries, according to
2003 data. China had a ratio of 13.76% while Thailand was at 36.08%.
Indonesia, meanwhile, had a ratio of 64.67%. Only Singapore, which has a
ratio of 192.5%, and Hong Kong at 228.1% had higher ratios. The
Philippines, Asia's largest sovereign bond issuer, had a total external
debt of $56.5 billion as of end-March. This compares to Argentina's
nearly $150-billion debt, BSP data show.
|
HONG KONG -- Asian dollar bond spreads tightened across the board
yesterday, with Philippine bonds outperforming the market on bullish
sentiment towards emerging markets from offshore investors. New issues
from United Overseas Bank (UOB), Singapore's third-largest lender, and
South Korea's LG-Caltex were also performing well after being priced
overnight. UOB sold US$1 billion worth of 15-year bonds at a spread of
114 basis points (bps) over US Treasuries on Tuesday, part of a
dual-currency debt issue in which the bank also sold S$1 billion worth
of bonds at a spread of 68 bps over the Singapore dollar 10-year swap
rate. Traders said the UOB dollar bond was being actively traded
yesterday and had tightened a touch to 113/112 bps over Treasuries. The
US dollar tranche attracted orders of about US$2.6 billion, with about
37% of the bond offering being snapped up by Asian investors, 21% by
European accounts and the remaining 42% going to US investors.
J.P. Morgan was the global coordinator for the issue. LG-Caltex's new
issue was also seeing good buying interest after South Korea's
second-largest oil refiner sold US$300 million of 10-year bonds at a
spread of 138 bps over Treasuries on Tuesday. The issue closed at
132/125 bps over Treasuries in New York, but widened out a little in
Asian trade and was quoted at 135/127bps over. The deal, rated Baa2 by
Moody's Investors Service and BBB by Standard & Poor's, was lead managed
by Bank of America, Citigroup and Deutsche Bank. Philippine sovereign
bonds were trading around 10 bps tighter as offshore investors look to
the emerging markets for yield. Philippine sovereign bonds due in 2014
were trading at 99.375/99.75 in price, or the equivalent of about 414
bps over Treasuries. The ROP '25s were trading at 111.375/111.875 in
price, or about 436 bps over 30-year Treasuries. Five-year Philippine
credit default swaps -- a type of insurance against default -- were also
trading about 10 bps tighter at 425/445. But traders said that at such
levels there was a strong temptation to take profit. "The momentum seems
good, but in the Philippines whenever you have a strong rally it's
always a good idea to try and take some paper off your books, because
when it comes down it comes down pretty quick," said a trader at a
European bank in Hong Kong. A trader in Manila noted that locals were
already in selling mode.
Hutchison Whampoa Ltd. bonds, among the most liquid of Asian issues,
were also doing well ahead of the release of the company's first-half
results today. "We've seen some positioning ahead of the results. The
Hutch curve is very well underpinned and if anything is trading
stronger," said the trader in Hong Kong. Hutch 13s were trading at
247/244 bps over, comfortably inside the 250 mark, which the bond had
been struggling to break through in recent sessions. Hutch 14s, which
had been running into resistance at around 200 bps over, were trading at
197/193 bps over Treasuries yesterday. "Everyone's taking the position
that the feedback from Hutch on Thursday will be constructive for bonds,
with buying from hedge funds and real money accounts," said the trader.
-- Reuters
|
The Philippine peso weakened by almost seven centavos yesterday as
the US dollar needs of oil companies surged amid rising global crude
prices. "With the rising costs of crude oil, there should be demands to
satisfy their requirements," a trader said. With the strong dollar
buying, total volume of transacted dollars hit $155 million compared
with $85 million the other day. The Philippines imports most of its oil
and fuel requirements. Most Asian countries also import their oil
products but their currencies traded stronger yesterday. The Japanese
yen reached 109.85 at the last count, coming from recent lows at the 110
and 111 yen levels.
The Thailand baht, to which the peso was compared until its
depreciation, also jumped to 41.50 after trailing the 41.60 level. "The
others might have satisfied their requirements already. Some banks were
selling dollars in the morning to keep the peso from slipping but the
demands came in. What happened was a chain reaction," another trader
said. At the Philippine Dealing System, the peso averaged the same as
yesterday at PhP55.722 and reached a high of PhP55.67. Opening at its
intraday high, the local unit hovered within an 11.5-centavo range. It
slipped to as low as PhP55.785 and closed at PhP55.78 against the
greenback. -- Ira P. Pedrasa
|
The local savings bank of US-based American Express Bank has tapped
Dutch financial services group ING to manage its latest trust product
offering. American Express Bank Philippines, Inc. (A Savings Bank), Inc.
president and chairman Ian T. Fish said the bank recently launched an
innovative investment product called Peso Cash Plus that combines the
simplicity and convenience of a savings account with the potentially
higher return of a trust account. "We went out and found out wealth
manager ING. Rather than try and do things ourselves, we felt it is much
better to get a professional fund manager which has a lot of experience
worldwide in managing funds. We appointed them to manage the funds for
us," Mr. Fish told BusinessWorld. "By hiring this professional
fund manager, we think we can provide good yields for our customers. We
are selling these in our three branches. This is the first product to
come from us. It is not managed by our trust department. It is totally
independent. We talk with the fund manager once a month more on a
philosophical aspect. But Amex do not say [to the fund manager], 'We
insist you to buy this and take such and such companies' bonds'," he
said.
A Peso Cash Plus account is a deposit account that provides direct
access to an investment facility that allows for the automatic sweep of
excess funds in savings account beyond the client-designated deposit
threshold into a custody account managed by the bank's trust department
for placement in investments selected by the bank client that can
potentially earn yields that are substantially higher than the
short-term time deposit accounts. Funds in the savings account will earn
a fixed rate while excess funds swept into investments earn the yield of
the investments selected. "At the moment, this is a short-term fund. We
don't touch the Philippine stock market. You want to give consistent,
steady and reliable yields. Maybe one day we can do a stock fund. The
whole philosophy of Amex is you have to tell people upfront [and]
explain to them that there are risks. So our philosophy is you be very
open and upfront with them and tell them this is very safe and stable or
this is very volatile. You may get fantastic returns but you may also
see huge drops in the value. One of the things we do before we open an
account is ask people to answer 10 questions to make sure we understand
what the customer's appetite is. We are not going to sell products to
people that will make them feel nervous, tricked or anything else. We
want to have a long-term satisfied customer. This comes back to Amex. We
are very concerned about consistent performance," he said. Mr. Fish said
the local stock exchange is "fairly small," considering the number of
issues and low trading volume that could lead to volatility. "The
investor must understand he knows what he's getting into. We have
professional people but you may be looking at movements in the price. If
we have a fund for the bonds, then we have to tell people you have to
look at this at a longer period. If somebody say he is not comfortable,
we will say this is not the product for him. Our philosophy is to be
very open and disclose these things so people understand what they are
getting into," he said.
With the bank's plan to come up with a portfolio of products, it may
set up a special management team in the Philippines for its trust funds.
"This is a very skilled area. If it gets to the point where the absolute
sums of money is sufficiently large, then Amex will have a special
management team just to do this," he said. As the banking sector awaits
the release of a new central bank circular that will differentiate
common trust funds from deposits or deposit substitutes, the latest bank
product has been marked-to-market since this will be the direction of
the trust banking business, Mr. Fish said. "It is about openness and
discipline for us. You will see more interesting and innovative good
quality products coming out in the years to come. We are not trying to
be everything to everybody. One of our philosophies is the screening
process. They have to understand what we are offering," he said.
-- Ruby Anne M. Rubio
|
TACLOBAN CITY -- UnionBank of the Philippines is using
high-technology products and services in attracting more clients in
Eastern Visayas. Amado Castaño, Jr., UnionBank vice-president for
Visayas and Mindanao areas, said the use of technology has also improved
the Aboitiz-run bank's financial performance. "People are switching to
our bank because of our high-technology products and services," Mr.
Castaño said. The bank earned
PhP1.1 billion in the first half and targets a 25% increase in
earnings this year, he said. "We are very proud that though we are a
medium-sized bank, we make a lot of money," Mr. Castaño told potential
clients here. He said the bank's "High Tech, High Touch" strategy
provides higher value products with personalized service. Meanwhile,
UnionBank chairman and chief executive officer Justo Ortiz said in a
statement that the firm's financial performance stands on three areas of
strength: funding, investments, and cost management. He said cash
management, private banking and business class priority banking in the
branches have boosted the bank's performance in the last three years.
-- S. Q. Meniano
|
China Bank has launched a deposit and home loan promo in time for its
84th anniversary celebrated on August 16. In a statement, the bank said
the month-long "Birthday Bash promo" offers new depositors surprise
gifts. The promo is open to August-born clients who will open an account
with a minimum deposit requirement of
PhP2,000 for regular savings account and P5,000 for checking
account; and non-August born clients who will open an account with a
minimum initial deposit of PhP5,000 for regular savings account and
P10,000 for checking account. China Bank is also giving an interest rate
of 10% per annum -- fixed for the first year -- for new HomePlus real
estate loan applicants. The reduced rate applies to all new HomePlus
loan applications received on or before October 31, 2004.
HomePlus is available for the purchase of residential properties
--lot, house and lot, townhouse, condominium; construction of
residential units; house improvement or expansion; and refinancing of
existing housing loans with other banks. The bank's consumer banking
group also offers vehicle loan packages through its AutoPlus loans.
Founded in 1920, China Bank has over 140 branches and 170 ATMs
nationwide, offering a complete suite of products and services such as
deposits, international banking, trust and investment management
services, loans and credit facilities, cash management, acceptance of
payments and donations.
|
By ROULEE JANE F. CALAYAG
San Miguel Corp. yesterday said it will issue PhP4 billion worth of
five-year fixed and floating rate notes. Southeast Asia's largest food
and beverage conglomerate told the stock exchange it had signed a
facility agreement with the Hong Kong and Shanghai Banking Corp. Ltd. (HSBC)
and a syndicate of lenders for the notes. HSBC will act as paying agent
and registrar. It did not say what specific project the note issue would
fund, but one company official said proceeds would likely go to general
working capital. The conglomerate recorded strong first semester growth
with consolidated net income up 31% to PhP4 billion, boosted by a 6%
growth in corporate volume and a 13% increase in consolidated sales
revenues which grew to PhP81.3 billion. Consolidated operating income
for the period was up 32% at PhP8.11 billion. San Miguel attributed this
to higher beer volumes, cost cuts at the Coca-Cola Beverage Group,
improvements in the food group and the recovery of beer operations in
the international market. San Miguel, 15% owned by Japan's Kirin Brewery
Co. Ltd., earlier said the volume of its international beer sales for
the first semester rose 17% to $120.1 million. Brisk beer sales in the
run-up to the May national elections led to a 32% increase in
second-quarter profit.
Analysts have said that with a market value of $3.6 billion, the
Philippines' largest company emerged as a winner from election-related
spending. Beer and hard liquor account for about a third of group
revenues. There is strong optimism the conglomerate will perform better
in the second half with earnings expected to rise further although at a
slower pace due to record high crude prices which jack up costs and
dampen outlook. The company ended 2003 with a net debt of about $127
million. Earlier this year, it raised $300 million via a five-year
syndicated loan. In February, Standard & Poor's Rating Services assigned
a BB foreign currency rating to San Miguel's foreign-denominated debt
with a stable outlook. -- with Reuters
|
By BERNARDETTE S. STO. DOMINGO,
Reporter
The government yesterday said it had revised the schedule for the
sale of state-owned National Power Corp.'s (Napocor) assets to give
prospective buyers more leeway in doing their due diligence. Energy
Secretary Vincent S. Perez, Jr., said the new schedule will allow
interested investors to have "breathing space" in conducting due
diligence between privatization schedules. He said he is more optimistic
of meeting privatization targets because of the improved climate
globally. "The energy sector globally is recovering. There are more and
more transactions so we are taking advantage of the increased appetite
in generating companies." "By end-2004, we should have sold about 33% of
the generating capacity in Luzon and Visayas and 50% by June 2005. By
end-2005, we are looking at privatizing 70% of the assets, which is a
major threshold in the EPIRA [Electric Power Industry Reform Act] law,"
Mr. Perez said.
Under the revised schedule, the government is set to sell the
1.2-megawatt (MW) Loboc hydroelectric plant in Loboc, Bohol and the
0.4-MW Cawayan hydroelectric plant in Sorsogon City, and the 225-MW
Bataan thermal plant in Limay, in September. Mr. Perez said the
decommissioned Bataan thermal plant will be sold as scrap, which could
be used as storage or site for liquefied natural gas or liquefied
petroleum gas. He said other decommissioned plants such as the 54-MW
Cebu II in Naga is a potential site for a new power plant while the
108-MW Aplaya plant in Batangas, which would be sold for scrap, is an
ideal expansion site. Cebu II will be auctioned in February, while
Aplaya is set for dispatch in September next year. The 200-MW Manila
thermal plant, for its part, would be sold as a commercial site in
January next year, Mr. Perez said. Mr. Perez said the 850-MW Sucat power
plant, which would be sold in April, is "highly sought after" since it
is located strategically for selling electricity during peak hours.
To date, the government has sold the Talomo mini-hydroelectric power
plant to the Aboitiz Group, the Agusan River facility to the Lopez
Group, and the Barit, Camarines Sur facility to lawyer Ramon Constancio,
for some $2.35 million. For the rest of the year, the government has
scheduled the sale of the 600-MW Masinloc in October this year and the
210-MW Navotas plant the following month. The 620 MW-Limay, Bataan
thermal site is set to be sold by end-2004, Mr. Perez said. In March
next year, the government will sell the 114.7-MW Iligan I and II, the
100-MW Pantabangan, and the 12-MW Masiway plants. The 600-MW Calaca
plant and the 22-MW General Santos City plant are next in line in May,
while the 75-MW Ambuklao and the 100-MW Binga plants will be sold in
June. Also scheduled to be privatized in July are the 275-MW Tiwi and
the 410-MW Makban plants, the 110-MW Pinamucan and 36.5-MW Panay I
plants. The 150-MW Bacman and the 192.5-MW Palinpinon plants will be
sold in August, while the 112.5-MW, and the 22-MW Bohol plants will be
auctioned in November.
In 2006, the government aims to sell the 0.8-MW Amlan and the 360-MW
Magat plants in March while the 246-MW Angat will be sold in April. The
government is gearing for the sale of the 28 power plants as mandated by
the EPIRA. In Singapore, a Reuters report said Thai power producer
Electricity Generating PCL (EGCO) is in talks to buy into CBK Power Co.
Ltd. as it seeks overseas growth to make up for limited domestic
opportunities, a banking source close to the talks said yesterday. He
declined to give any details on the talks. A spokesperson for EGCO in
Bangkok declined comment specifically on CBK, but said EGCO was pursuing
acquisition opportunities in the Philippines and Indonesia.
-- with Reuters
|
A Japanese firm in Lipa, Batangas is expanding its production of
automotive wiring harnesses and will pour in
PhP237.236 million in new investments, documents showed.
Pilipinas Kyohritsu, Inc. wants to produce 1.5 million more wiring sets
annually on top of the existing capacity of 889,795 sets, bringing the
company's total capacity to 2.39 million sets or a 169% increase.
Seventy percent of output will be exported to Japan and the US.
Commercial operations are to begin this month. The project will also
result in 1,491 new jobs at Pilipinas Kyohritsu's plant on Laurel
Highway in Inosloban, Lipa. Pilipinas Kyohritsu was able to get tax
breaks from the Board of Investments (BoI) as a non-pioneer expanding
export producer under Executive Order 226 or the Omnibus Investments
Code. This is the company's fourth expansion, following three other BoI
registrations in 1994, 1996, and 2003. Pilipinas Kyohritsu shareholders
unanimously agreed to expand production "to strengthen [the company's]
position in the automotive industry and due to the increasing demand of
the product here and abroad," government documents said.
The project will involve the installation of additional production
facilities in Lipa as well as building expansion, renovation, and
improvement to accommodate additional production volume. The project
cost of PhP237.236 million also covers machinery and equipment, tools,
pre-operating expenses, and working capital. Pilipinas Kyohritsu is 97%
Japanese-owned, with Kyohritsu Hiparts Co. Ltd. holding a 68% stake and
Sumitomo Wiring Systems owning 29%. Aside from wiring harnesses, the
company manufactures electronic gas injection harnesses, engine room
harnesses, main harnesses, body harnesses, airbag harnesses, instrument
harnesses, and compartment harnesses. The Philippines supplies 20% of
the world's wire harnesses. Exports of ignition wiring sets and other
wiring sets used in vehicles, aircraft, and ships -- the country's no. 5
export earner -- reached $283.978 million from January to June.
-- Felipe F. Salvosa II
|
SM Development Corp. saw net profit in the second quarter decline to
PhP70.02 million from PhP134.61 million last year on weaker revenues. SM
Development generated only PhP123.13 million in revenues for the quarter
from PhP137.79 million in the same period last year. However, costs and
expenses climbed to PhP46.97 million from PhP3.18 million previously.
Operating profit was down significantly at PhP76.16 million from
PhP134.61 million. For the first half, the developer's net profit slid
to PhP124.82 million from PhP167.89 million while revenues rose to
PhP235.18 million from PhP175.19 million in 2003. Costs and expenses
reached PhP98.74 million against PhP7.30 million in the same period last
year, while operating profit fell to PhP136.44 million from PhP167.89
million. SM Development is the real estate arm of the SM Group.
SM Development said in April that it was just waiting for the
government to complete the main highway access in Nasugbu, Batangas
before it starts constructing the multibillion-peso Hacienda Looc
leisure complex in the area. It is also pursuing two other residential
projects to complement its condoville venture. --
R.J.F. Calayag
|
Semirara Mining Corp., the country's largest mining coal producer,
said operating profit in the second quarter rose to PhP259.07 million,
marginally higher than the PhP237.99 million posted a year ago. This,
although sales grew to PhP1.20 billion from PhP597.89 million. It cited
costs and expenses which climbed to PhP941.83 million from PhP359.89
million previously. Included in the costs and expenses were the cost of
coal sold; shipping, loading and hauling costs; government share; as
well as general and administration expenses. Pretax profit soared to
PhP128.57 million from PhP104.08 million for the second quarter last
year. Earnings per share (EPS) rose significantly to PhP5.14 from a
meager PhP0.06.
Semirara managed to replicate its performance for the first half with
operating profit at PhP388.54 million, an improvement over PhP252.53
million last year. Pretax profit was up 275% at PhP183.77 million over
the PhP49.03 million earlier. Sales stood at PhP1.85 billion against
PhP1.06 billion in 2003. Costs and expenses for the period was up at
PhP1.46 billion from only PhP810.78 million previously.
-- R. J. F. Calayag
|
Nasdaq-listed PSi Technologies expects a 10% revenue growth this
quarter as its plant in China starts production. Chairman and Chief
Executive Arthur J. Young, in a statement, said PSi's facility in
Chengdu is expected to commence delivery to clients such as Philips this
month. PSi is the first local electronics company to put up a plant in
China. Others have just representative offices there. "The forecasts of
our major customers continue to remain supportive of continuing sales
growth. Nonetheless, some customers have tempered their growth
expectations. On the balance, we anticipate 8% to 10% sequential
increase in third-quarter revenues. Revenue contribution from China is
anticipated to add to quarter-to-quarter sales growth during the third
quarter," Mr. Young said.
The 4,000-square meter assembly and test facility at the Chengdu
Export Processing Zone in the Sichuan province could operate at about
three-fourths current costs here. Sichuan is about two hours by air from
Hong Kong. PSi registered revenues totaling $21 million in the second
quarter. Although the top line was 11.1% higher than the $18.9 million
in the first quarter, it was 5.5% lower than the $22.2 million it earned
for the second quarter of 2003. -- Cecille S. Visto
|
By ROULEE JANE F. CALAYAG
No immediate respite seemed to be in sight for the Philippine stock
market which tumbled anew yesterday. Instead of overcoming earlier
losses, the Philippine Stock Exchange composite index (Phisix) slid
further as it slumped 10.46 points or 0.67% to 1,556.37 on 1.3 billion
shares worth PhP463 million. It reached a high of 1,569.54 and a low of
1,553.23.
CONSOLIDATION
Consolidation ruled the market as expected. After almost breaching
the 1,600 resistance level, the market swung to the other end of the
pendulum, wiping off a gradually growing optimism among investors.
Investors cashed in on earlier gains as worries on oil price increases
and slow economic developments plagued the market which continued to
wallow in negative territory. But Joey Roxas, president of Eagle
Securities, Inc., said this trend usually goes on from July to
mid-September, months considered unlucky by Chinese investors who
consitute a large part of participants in the market. "This is the time
when prices slump because it is part of the unlucky period among
Chinese. New positions are not taken and old positions are not
liquidated," said Mr. Roxas. As if the ghost month was not enough to
scare away investors, the spectre of oil price increases still hangs
above the market even after four small oil firms decided on Tuesday to
slash their oil prices by PhP0.05 per liter from PhP0.35 a liter
earlier. "The oil price increases continue to be a dampener which
affects the spirits of investors," said Mr. Roxas.
Although small oil players heeded the government's appeal to cushion
the impact of the price hikes, some groups said that was only a
temporary measure as global oil prices remain vulnerable. It is feared
that the price increases will spark off an economic domino effect that
could throw prospects for corporate profits out the window. While some
dealers point to slow economic developments as the culprit behind the
lackluster performance of the stock market, Mr. Roxas noted that this
does not greatly affect the movement of share prices. He said investors
are less concerned with forecasts on slower economic growth because
these are already factored in the stock market equation. "Investors are
more concerned on individual issues that are about to explode," he said.
Another factor that pulled down the market was the decline in the
American Depositary Receipts (ADRs) of telecom giant Philippine Long
Distance Telephone Co. (PLDT) which dropped $0.70 to $22.67.
INDICES
The stock exchange closed mixed with four counters down, three up and
one unchanged. The banks and financial services index firmed up 3.06 to
451.82. The commercial-industrial trudged southward, shedding 16.11 at
2,485.81. Property joined the ranks as it lost 12.14 at 505.05. Mining
went up 22.77 to 1,894.48. Mr. Roxas earlier said it was imperative for
the government to act fast in spurring activity in the mining sector. He
stressed that policy change is not enough to strengthen the sector which
promises inputs in dollars from local sources. Analysts said the
Philippines, rich in mineral resources, could tap this wealth to pay off
a mounting public debt. If properly developed, the mining sector is
expected to generate $1.2 billion worth of mineral exports annually and
$21 billion in revenues. Still reeling from oil price hikes, the oil
index was down 0.03 to 1.54. The all shares headed north, up 4.44 to
1,001.01.
ACTIVE STOCKS
Of the 108 issues traded, advancers were outnumbered by decliners,
26-34, with 48 issues sticking to their previous prices. Total foreign
buying was at PhP148.7 million while foreign selling amounted to
PhP281.5 million. The market had its fair share of ups and downs
yesterday. Some listed firms hit home run with positive reports while
others lagged behind. The stock exchange yesterday lifted the suspension
on the trading of shares of Fil-Estate Corp. after the company submitted
reportorial requirements and paid the fines. Shares of PLDT remain the
most actively traded, although its price tracked the decline of its ADRs
in New York. PLDT was down PhP30 at PhP1,245 with 78,150 shares valued
at PhP97.86 million. Mall developer and operator SM Prime Holdings, Inc.
slid PhP0.20 at PhP5.60 as it traded 12.86 million shares valued at
PhP72.59 million.
Five out of the top 10 actively traded stocks were down. Only prices
of port operator International Container Terminal Services Inc. (ICTSI),
DMCI Holdings, Inc., Pilipino Telephone Corp. (Piltel) and "A" shares of
San Miguel Corp. went up. ICTSI rose PhP0.35 to PhP4.05 with 7.82
million shares traded for PhP31.3 million. San Miguel A climbed PhP0.50
to PhP40.50 on 107,900 shares worth PhP4.36 million. DMCI Holdings
advanced PhP0.08 to PhP1.30. Its value turnover was PhP22.7 million.
Meanwhile, Trans-Asia Oil and Energy Development Corp. told the exchange
that its 10%-owned Atlas Cement Corp. expects to earn PhP3.2 billion
from the sale of its shares in Union Cement Holdings Corp. Atlas is a
subsidiary of Bacnotan Consolidated Industries Inc. On Aug. 12, Bacnotan
and unit Atlas completed a $214 million share purchase agreement
involving their combined 51% stake in Union Cement Holdings Corp. (UCHC)
with Cemco Holdings Inc., 40% of which is held by Holcim Ltd. of
Switzerland.
|
Four small oil firms yesterday gave way to a government appeal and
agreed to cut their fuel prices by five centavos per liter, after
raising them by 35 centavos just two days ago. The cut was in response
to Energy Secretary Vincent S. Perez, Jr.'s call for oil companies to
limit price increases, the four members of the Independent Philippine
Petroleum Companies Association (IPPCA) said in a statement. "Mr. Perez
made an appeal and we heeded that call. This rollback is also consistent
with an agreement between us and the Energy department to implement more
frequent but smaller adjustments," IPPCA chairman Fernando L. Martinez
said. But the 50-centavo increase in the price of kerosene stays, he
added. IPPCA members include Eastern Petroleum Corp., Flying V, Seaoil,
and Unioil Philippines. Last Monday, they increased their gasoline and
diesel prices by 35 centavos per liter, claiming that increases were
overdue given world oil prices hitting all-time highs. Other IPPCA
members are Castrol, Filpride Energy Corp., Liquigaz Philippine Corp.,
Oilink International Corp., 3n2J Shipping and Trading Services Inc.,
Pryce Gases, PTT Philippines Inc., Rambi Development Corp., and Subic
Bay Distribution Inc.
INSIGNIFICANT
IPPCA said oil importers like its members have yet to recover diesel
costs and were making only small margins on gasoline. Also yesterday, an
economist said the recent price increase should have little effect on
the economy, considering that IPPCA members accounted for only 15%
market share. The effect of their price increases would not even be felt
in many areas nationwide, said Dr. Peter Lee U, head of the Industry
Group of the School of Economics at the University of Asia and the
Pacific. "I don't think they can have abig effect, unless they have a
bigger market share or at least 25%. They have weak presence in the
Visayas and Mindanao," he told BusinessWorld. "They are bigger
now than when they started, but I think they'll mostly be price
followers other than price leaders," Mr. U said. But while
"unilaterally" having little effect, these increases should not be taken
in isolation, he said. "I would expect that big players would also react
and follow. But if they don't, the small ones will probably have to
retreat," he added. For his part, economist Bienvenido Oplas, Jr., of
Think Tank, Inc. said the overall effect of price increases was
negative, but the economy would learn to adjust eventually. "Over the
long term, people will have to learn to conserve. This might even result
in cleaner air in the future, because people will start using less fuel,
which is becoming more and more expensive," he said.
Meanwhile, research group Ibon Foundation Inc. proposed ways to halt
escalating oil prices. "Government must now design and at once implement
a set of contingency measures to soften the impact of impending drastic
increases in oil prices on ordinary consumers as well as the national
economy," Ibon said in a statement. The group urged the government to
suspend the implementation of the oil deregulation law; institute a
"price control mechanism" on socially sensitive petroleum products like
diesel, gasoline, and liquefied petroleum gas; and require oil companies
to disclose their inventory, to determine how much oil they have and at
what price did they purchase it. It added the suspension of the oil
deregulation law would allow policy makers to rethink the deregulation
policy and to look for viable alternatives. Deregulation, Ibon claimed,
allowed huge foreign oil companies and their local subsidiaries such as
Petron Corp., Pilipinas Shell Petroleum Corp., and Caltex Philippines,
Inc., to monopolize the local oil market and impose unreasonable prices.
For his part, businessman Raul T. Concepcion urged oil refiners not
to increase gasoline prices and apply margins against losses in diesel.
IPPCA on Monday scored Mr. Concepcion's allegedly "misleading"
statements on overpricing by its members. Also yesterday, Total
Philippines Corp. said its diesel, gasoline and kerosene prices would go
up by 30 centavos per liter starting today because of rising world
market prices. Mr. Perez said oil companies must remain sensitive to the
impact of high prices on the commuting and motoring public.
-- Bernardette S. Sto Domingo
|
A special presidential team investigating the fraudulent use and sale
of tax credits will ask the Department of Finance (DoF) to probe the
dismissal of 14 collection cases filed by the Bureau of Customs in
court. Alan S. Ventura, executive director of Special Presidential Task
Force 156, told reporters the investigation would determine the
circumstances that led to the dismissals. He said Finance undersecretary
Innocencio P. Ferrer, Jr. has directed Customs to explain why it failed
to secure favorable court rulings. Meanwhile, a Justice official said
the dismissals covered only collection or civil cases, and not the
criminal cases against companies and executives accused of trading
allegedly fraudulent tax credit certificates. The cases were reportedly
dismissed because of Customs' alleged lack of interest in pursuing
complaints against companies accused of using or selling fraudulent tax
credit certificates. But this was denied by Customs Deputy Commissioner
Gil A. Valera. In his report to Mr. Ferrer yesterday, Mr. Valera said
eight of the 14 cases were dropped only because summons could not be
served on respondents -- either they could not be found or their
declared addresses were fictitious. The eight cases "were dismissed
without prejudice of being re-filed," he added.
These eight collection cases were against:
- Master Color System (PhP22.69
million);
- Integrated Multi-Cotton Mills (PhP147.38
million);
- Nikko Textile Mills (PhP2.4
million);
- Express Colour Industries (PhP44.11
million);
- FLB International Fiber Inc. (PhP64.31
million);
- Tex Asia Inc. (P 24.52 million);
- Kultura Knitex (PhP41.53
million); and
- Fiber Technology Corp. (PhP87.39
million).
As soon as Customs gets records of ownership of companies that were
granted the original tax credits, it would amend and refile the
complaints, Mr. Valera said. The complaints would then "include the
stockholders of record, and hopefully convince the court to pierce the
veil of corporate entity and be able to local some of these declared
stockholders," he added. Customs has amended the complaints against
Kultura Kintex and Fiber Technology Corp., which were re-filed
yesterday. "Hopefully, some of the summons can be served on the declared
stockholders so that the cases can proceed," Mr. Valera said. Six other
cases -- against companies that sold or transfered allegedly fraudulent
tax credits -- had been dismissed for lack of jurisdiction. Except for
collection cases against AR Packaging Corp. (PhP10.83
million) and Kultura Knitex (PhP6.02
million), which were dismissed because the court sheriff could not
validly serve summons, the courts also dismissed three cases against
Pilipinas Shell Petroleum Corp. and one case against Solid Mills Corp.
-- all for lack of jurisdiction. Trial courts have said the Court of Tax
Appeals had jurisdiction over the collection cases. Mr. Valera said
Customs would take the necessary action and refile the cases at the tax
court. As for the cases against Kultura Knitex and AR Packaging Corp.,
these would be amended and refiled "once we are able to determine the
owners of these two transferee corporations...," he said. "There is not
a single cent that has been finally lost in our pursuit" of cases
against these corporations, he added.
'NOTHING HAS HAPPENED'
Meanwhile, the Senate wants to investigate the dismissal of the tax
credit cases. Senator Juan Ponce Enrile said the government's failure to
prosecute these cases was enough ground to turn down new tax proposals.
"Why should we pass new taxes? I don't think you can pass any tax law
under this condition. We should initiate an investigation on the tax
credit scam in aid of legislation," Mr. Enrile said in a privilege
speech. He noted that the Senate Blue Ribbon Committee should lead the
investigation of stagnating tax credit cases. In response, Blue Ribbon
Committee chairman Joker P. Arroyo said the controversial issue should
be handled by a Congressional Oversight Committee. This prompted Mr.
Enrile to move for a division of the Senate to resolve the issue. But
Senate president Franklin M. Drilon ruled to hold the motion in abeyance
for further study.
In an interview before the session, Mr. Enrile urged President Gloria
Macapagal Arroyo to axe government officials liable for the dismissal of
the cases. "They do not know how to handle these cases. They ought to be
kicked out from service," he said. The opposition lawmaker added that
during his stint as the chairman of the Senate ways and means committee
during the 11th Congress, the tax credit issue was
investigated. He said the committee noted that out of
PhP54 billion in tax credits,
PhP5 billion were sold using fake manufacturing establishments,
import entries, and bank documents. "I investigated it and we
recommended certain measures to be taken three years ago. But it seemed
that nothing happened. The government has not recovered a single
centavo," Mr. Enrile said. "If I were the president, I will kick people
out from the service. They do not deserve their pay with what they have
done. Money is the problem of the country. These people are exercising
their power out of tax money and they goof in collecting the money for
the government," he added.
Senator Richard T. Gordon, for his part, said the investigation of
the tax credit scandal should be handled by the Senate committees on
Justice, and Human Rights. Mr. Gordon noted that the failure to
prosecute the cases could be attributed to the inefficiency in the
Justice system. "It could be that the government dived, or the lawyers
are weak of the judges are buyable," he told a news conference. Also
yesterday, the Malacañan presidential palace vowed to go after tax
evaders and tax cheats. "The government is determined to prosecute tax
evaders to the hilt and has mustered the best legal support it can from
the official ranks and from volunteers," Presidential Spokesman Ignacio
R. Bunye told reporters in a press briefing. "A strong drive against tax
cheats is being waged alongside our program to raise more revenues," he
added. He also said, "Tax litigation is at times costly, tedious and
lengthy. But our prosecutors will be relentless in their efforts to go
after tax evaders." -- Karen L. Lema
and Carina I. Roncesvalles with reports from J.
O. Valisno and E. P. Osorio
|
By MA. ELOISA I. CALDERON
Ambassador Roberto Romulo yesterday announced that International
Container Terminal Services, Inc. (ICTSI) head Enrique Razon has offered
that his Dubai office be used as a base for Philippine contractors and
exporters to tap projects in the region. The United Arab Emirates-based
ICTSI office, the chief of the Public-Private Sector Task Force which is
responsible for coordinating reconstruction projects in Iraq with
Philippine firms, would bring Philippine companies closer to Iraq and
its neighboring countries. "The UAE itself is bidding to become the
financial and leisure center in the Middle East and so there is a
massive infrastructure buildup going on. The Palm Island Development in
Dubai alone is worth billions of dollars is unprecedented in vision and
scale," Mr. Romulo added.
Aside from the port terminal company, Mr. Romulo said the Philippine
Contractors Association and the Filipino-Chinese Chambers of Commerce
and Industry of the Philippines have signified their support to work on
marketing Filipino workers in the region and accrediting local
contractors. Mr. Romulo, however, admitted that local firms would remain
to face difficulties until the security situation in Iraq becomes
stable. "Because of the unstable conditions in Iraq and poor contract
management, only a small percentage of these funds have actually been
spent. What these numbers indicate is that Iraq still offers a huge
potential for Philippine contractors and exporters. But this can only
happen when the situation on the ground improves," he said.
Based on a 2003 joint study by the World Bank and the United Nations,
the fund requirements for the restoration of infrastructure in Iraq is
an estimated at $55 billion. Donor countries had so far pledged up to
$13 billion at a conference in Madrid while the US Congress has
allocated $18 billion for the rebuilding of the war-torn country.
However, only $600 million, which is just 3% of the total fund, had been
utilized. Mr. Romulo said the task force was still cautious about
involving more local subcontractors in Iraq as the government has yet to
lift its deployment ban on the sending of workers. "Although there are
some 4,000 Filipino workers in Iraq employed by various subcontractors,
the hazardous peace and order situation has prevented the implementation
of the bulk of the reconstruction effort," he said. The 4,000 Filipinos
in Iraq are employed by American firms, mainly by Kellogg, Brown and
Ruth and are deployed in US military camps based in the war-torn
country.
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By IRIS CECILIA C. GONZALES,
Reporter
The government needs to bite the bullet and address ten crucial
reform areas if it wants continued access to the debt market and attract
foreign investors, credit rating agencies have said. A survey conducted
by the Bangko Sentral ng Pilipinas (BSP) among international credit
rating agencies showed the Philippines' sovereign debt rating remains
low because of the lack of reforms. Corazon Guidote, executive director
of the BSP's Investor Relations Office, yesterday presented the results
of the survey, conducted a few months ago among ratings agencies such as
Standard and Poors, Moodys, Fitch Rating Services Inc. and Japan Credit
Rating Agencies. Number one in the list is the need for the government
to broaden the tax base to boost revenues. Other concerns are the need
to sustain and improve the ratio of public revenues to gross domestic
product (GDP) and reduce the ratio of external and government debt to
GDP. Debt watchers also want the government to improve the regulatory
environment; and institute effective integration of the financial
sector.
The money-losing operations of National Power Corp. (Napocor) also
needs to be addressed, a concern that has been repeatedly raised by
local and foreign businessmen. Credit rating agencies underscored the
need to privatize Napocor to prevent a looming power crisis which could
further slow down economic growth and keep investors away. They said the
government should help boost the competitiveness of the country's export
sector by addressing key issues that dampen growth such as the high
costs of labor and power. On the political front, rating agencies
stressed the need to improve political stability, saying there is still
too much bickering in the government. "Another concern is the need to
strengthen democratic institutions," Ms. Guidote said yesterday.
Finally, the ratings agencies also want the government to improve
internal security, citing threats by bandit and insurgency groups. They
said addressing these reforms could help the Philippines achieve a
higher credit rating, which would reduce borrowing costs and lead to
improved investor sentiment.
At present, Philippine credit ratings range from below investment
grade to stable. The BSP gave assurances that the government is doing
what it can to help improve the country's credit ratings and investment
climate. Ms. Guidote cited efforts of the Department of Finance to
improve government's fiscal position but added that the government needs
to meet its targets, particularly that of balancing the budget by 2009.
In a related development, a government official yesterday said the
Philippines may face a fiscal crisis in one to two years if the Napocor
issue is not resolved. The state-owned Napocor is saddled with
PhP500 billion worth of debts which government wants to absorb.
The Electric Power Industry Reform Act, however, only allows government
to absorb up to
PhP200 billion. The official said although the Philippines is
much better off compared to Argentina, which defaulted on its debt
payments, a crisis is not far off if government is unable to privatize
Napocor. "Addressing Napocor is really crucial," the official said. The
official also underscored the need to pass new tax measures. "Congress
must act fast because every delay in the passage of new tax measures
result to losses for government," the official said.
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By JUDY T. GULANE, Reporter
A high population growth rate impacts negatively on economic growth
and poverty reduction efforts, results of a recent study on the links
between population, the economy and poverty showed. The study, "The
Economy-Population-Poverty Links: A Quantitative Assessment," also
showed that the Philippines had a total foregone growth of under 1% per
year between 1975 to 2000 because of population growth. Average income
in 2000 would have been 22% higher had the issue been addressed. The
study was conducted by economists Arsenio Balisacan, Charisse Tubianosa,
Dennis Mapa, Leonardo Lanzona and Rosemarie Edillon. The study said that
if the Philippines were to have a similar population growth path as that
of Thailand, where the working population is larger than the young,
dependent population, poverty incidence would have been lower by 5.5
percentage points. With poverty incidence now at 40% of the Philippine
population, Mr. Balisacan said the reduction would have meant that 3.6
million poor Filipinos had been brought out of poverty.
The study essentially compared the Philippines with Thailand for the
two were considered "twins" in the 1960s for their similarities in
population growth path and density, strong dependence on agriculture and
orientation towards exports. Thailand's economy, however, took off in
the late 1980s, while the Philippines now ranks near-bottom. Only
Indonesia has a lower per capita gross domestic product (GDP). The study
noted that Thailand and the Philippines had a similar population growth
path in 1975, where the majority belonged to the young, dependent
population. Twenty-five years later, Thailand's young population had
matured, enlarging the working population that fuels that country's
economy. The Philippines' population structure essentially remained the
same, however, with the young, dependent population comprising the bulk
of the population. The study said "workers' population growth has a
positive and significant impact on economic growth." Worker population
growth in Thailand and the Philippines are almost similar with 2.5% for
the former and 2.8% for the latter. The Philippines' youth population
growth, however, is higher at 1.7% while Thailand is at -0.3%. Total
population growth is also higher at 2.36% versus Thailand's 1.6%.
The Philippines now has a population of 84 million while Thailand has
a population of 62 million. Total fertility for Filipino women is three
to four children. For Thai women, the average is two children. Aside
from reducing poverty incidence, rural poverty would have been addressed
if the Philippines followed a similar growth path with Thailand. Poverty
in the Philippines is mainly a rural phenomenon, Mr. Balisacan said.
"Two out of every three persons are located in rural areas and they are
dependent mainly on agriculture," he expounded. "Urban poverty is
largely a spillover effect of rural poverty, as the rural poor migrate
to urban areas." Slower population growth in the rural areas, he said,
will result in savings in the provision of basic education and health
services. These savings will be channeled to agriculture, for example,
and research and development, irrigation, farm-to-market roads, among
others. Estimated savings -- and these are conservative figures, Mr.
Balisacan said -- are
PhP128 billion over 10 years from basic education and
PhP52 billion over 10 years from basic health. He stressed that
the country's economic problems will remain unaddressed if the issue of
high population growth is not be confronted. Sources of future
population growth for the Philippines, he pointed out, are: unwanted
fertility (16%), wanted fertility (19%) and population momentum or the
proportion of young population who will contribute to population growth
(65%). To slow population growth, he recommended that the government
provide access to contraception; provide employment opportunities for
women and compulsory basic education to children; and lower infant
mortality to delay wanted fertility. To address population momentum,
later-age marriage and wider birth spacing should be promoted, Mr.
Balisacan added.
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The Bangko Sentral ng Pilipinas (BSP) is keeping its yearend
inflation target even as economic planners said soaring oil prices may
push inflation beyond the 4.0-5.0% goal. The BSP called on government
agencies such as the Departments of Trade and Industry and Agriculture
to establish interventions such as increasing the supply of goods in the
market. "We can still keep the target but there should be appropriate
response from key government agencies," BSP Assistant Governor Diwa G.
Guinigundo yesterday said. He said monetary policy will not be effective
in addressing inflationary pressures -- such as rising oil prices -- as
these are mostly from supply-side. Supply-side pressures may be
addressed by increasing supplies in the market which would in turn
stabilize prices of basic goods and commodities, he added.
On Monday, the National Economic Development Authority (NEDA) said
oil prices could mean that inflation target may be breached. "The main
reason for this is the oil price increases. We never really expected the
price of oil to move up to more than $40 per barrel," NEDA assistant
director Scholastica D. Cororaton said. Mr. Guinigundo said the BSP
originally factored in an increase in Dubai crude price of up to $35 per
barrel but prices have soared to at least $38 per barrel this week.
However, he said the BSP expects price increases to slow down later this
year or early next year on expectations that oil exporting countries
will fulfil commitments to increase production. "We can expect some
slowing down in the increase in oil prices later on but for now we just
have to roll with the punches," he said. The NEDA sees inflationary
pressures easing in 2006 due to projections that supply will start to
normalize.
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Given continued increases of world oil prices, the Department of
Energy (DoE) yesterday backed a Senate bill promoting the use of ethanol
as an alternative transport fuel. The DoE announced that a major oil
firm has signified interest in determining standards for the use of
ethanol as an alternative transport fuel as well as the viability of
mandating its use. Senate Bill 1677, sponsored by Senator Aquilino Q.
Pimentel, Jr., aims to establish the National Fuel Ethanol Program. The
bill also appoints the DoE as the lead implementing agency. "Promotion
and widespread utilization of ethanol as a fuel for the transport group
supports President [Gloria Macapagal] Arroyo's goal of increasing the
country's energy self-sufficiency level to 60% by 2010," Energy
Secretary Vincent S. Perez, Jr., said. The proposed bill is also
expected to alleviate the plight of the sugar industry, the DoE said, by
generating employment, enhancing the country's technological and
engineering position and providing a continuous flow of purchasing power
to rural areas.
Ethanol is produced from crops such as corn, grain sorghum, wheat,
sugar and other agricultural feedstocks. It can be used as a fuel in
three ways -- as a blend for gasoline, as a component of reformulated
gasoline, or a primary fuel with gasoline as blend. "While the country
has steadily reduced its reliance on imported oil as energy source, our
transport sector is still heavily dependent on imported oil," Mr. Perez
said. "So far, we have introduced compressed natural gas, liquefied
petroleum gas and coco methyl ester as alternative transport fuels. We
want to explore other options to further lessen our oil imports," he
said He noted that the country attempted to implement a similar program
to use ethanol in the mid-1980's. The program, however, did not
progress. "The advances in technology and the worldwide call to promote
the use of alternative fuels should only spur us to look for ways and
means to tap other energy sources, which are environment-friendly and
renewable," Mr. Perez said.
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By IRA P. PEDRASA
The government will issue at least
PhP5 billion worth of five-year zero coupon Treasury bonds on
August 31. It said this would be the first ever for the local bond
market. "The demand for this is coming from retail investors as
presented by underwriters," National Treasurer Mina C. Figueroa told
reporters yesterday. Underwriters for the offering are Land Bank of the
Philippines and Citibank N.A. Zero coupon bonds pay no interest but are
offered at a deep discount to their face value. Ms. Figueroa also
announced that starting August 24, the maturity of its longer-termed
Treasury bonds will be shortened to four years from the current five. In
September, the Treasury is also planning to shorten the tenor of one of
its seven-year T-bond issues. Two seven-year issues were originally set
for next month. The Philippines issues debt in local and foreign markets
to raise funds for its budget deficit, which it aims to cap at
PhP197.8 billion this year or 4.2% of gross domestic product.
Earlier, traders said the market was not too enthusiastic about some
bond issues as these were more risky compared with short-term papers.
"The measures came in too late. They know for a fact that the market
appetite was for [short-term] papers," a trader said. In yesterday's
auction, the government's seven-year Treasury bond fetched a
yield-to-maturity rate of 12.48%, higher than the 12% premium risk rate
reached when they were last issued on July 20. Indicating weak market
appetite, tenders reached only PhP2.759 billion against a PhP4.5-billion
public offering. The auction committee accepted only
PhP1.454 billion worth of bids. "The risks are already there.
We're expecting a gloomy economic future ahead of us, even up to next
year what with the rising costs of crude oil prices, and even its impact
on the inflation data," a trader said. "Even the tax laws the government
wants to implement is not yet clear, and we're talking about fending off
revenue slumps," another trader added. The other day, T-bill rates rose
across all maturities even as the Bureau of the Treasury affirmed its
position to keep debt yields steady. "At this point, they should have
rejected [bids for the seven-year bonds] because it's most ideal, but
then again, they also need that much liquidity," a trader said.
The 91-day T-bill rate rose to 5.8 basis points to 7.183% from
7.125%. The 182-day T-bill rate also went up to 2.2 basis points to
8.208% from 8.186%, and the 364-day paper fetched 9.281% or a rise of
10.5 basis points from 9.176%. Total tenders reached PhP13.78 billion
against the public offering of PhP11 billion. The auction committee
accepted
PhP9.91 billion worth of bids. Ms. Figueroa said, however, that
"[the longer tenor] is for insurance companies. Banks are bidding for
their positions and they have to raise the rates just to make sure na
di sila lugi [that they will not lose] when they turn it around."
PESO
Meanwhile, the Philippine peso only range-traded yesterday against
the US dollar, closing almost two centavos stronger from the previous
day as the market "saw no clear direction whether it was convenient to
take huge positions," a trader said. At the Philippine Dealing System,
the peso averaged weaker by six centavos to PhP55.722 from PhP55.662
previously. Opening at PhP55.73, the peso further slipped by a centavo
to reach its intraday low of PhP55.74. Hovering within a 4.5-centavo
range, the local unit settled at PhP55.715 against the greenback. Total
volume of transacted dollars dropped to $85 million from $147 million
the other day. -- with Reuters
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Yuchengco-led Rizal Commercial Banking Corp. and its subsidiaries'
net earnings registered a 13.33% growth at
PhP1.19 billion during the first six months of the year from
PhP1.05 billion a year ago. Reversing a decline during the first
quarter, the bank's profits accelerated in the April-June period by
70.5% to PhP832.14 million from PhP488.05 million. "The bank's overall
performance continued to show marked improvement from a year ago.
Likewise, it reflected the gains achieved from its efforts to strengthen
its balance sheet, improve efficiencies and concentrate on profitable
market segments," RCBC said in a statement. Net interest income rose
9.54% to PhP2.45 billion during the first semester from PhP2.241 billion
due to better market yields and higher volume of deposits available for
earning loans and other investments. Interest income from investment
securities posted a 44.89% growth to PhP1.1 billion from PhP763.14
million. This comprised 12.96% of total revenues compared with 8.79%
last year. A drop in deposit balances maintained with banks led to lower
interest on deposits to PhP69 million, down by 14.54% from PhP80
million.
TRADING INCOME
The decline in trading income due to last year's realized gains from
the sale of zeroes and higher volume of traded securities resulted in a
19.51% decrease in the bank's other income to PhP2.8 billion. This
represents 32.83% of total revenues. "This evidently showed the bank's
shift in revenue sources and focus from non-traditional sources to net
revenue from funds this year," RCBC said. For the said period, the bank
and its consolidated subsidiaries have set aside provision for probable
losses amounting to PhP781.46 million, down by 44.31% from PhP1.4
billion. "In spite of lower provisioning year on year, total
provisioning set aside by the bank already exceed the recommended levels
of the Bangko Sentral ng Pilipinas," RCBC said. Total operating expenses
increased by 10% to PhP3.91 billion because of the hike in taxes and
licenses at PhP296 million from PhP128.04 million as the gross receipt (GRT)
tax was reimposed. RCBC said provision for income tax was higher this
semester at PhP533.24 million from PhP279.38 million on account of the
shift to GRT. As a result of net loss incurred by credit card company
Bankard Inc., minority interest in net income of consolidated
subsidiaries substantially declined to a loss of PhP99 million from
PhP11 million last year. -- Ruby Anne M. Rubio
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Earnings of Prudential Bank dropped 47% to
PhP125.12 million during the first semester from PhP236.12
million a year ago. In a report filed with the Securities and Exchange
Commission, the bank said its gross income increased by only 2.63% to
PhP2.01 billion while operating expenses grew by 12.18% to PhP1.81
billion. "Contributing to the slight increase in revenues for the period
ended June 30 is the good performance of the bank's treasury services
[which] boosted the income from investment in government securities by
25.03% to PhP805.9 million in spite of the 13.13% slack in commissions,
exchange profits and other income at PhP719.17 million," Prudential Bank
said. Expenses were driven by higher interest on deposits and borrowed
fund, which increased by 22.24% to PhP763.68 million on account of the
bank's payment of loans to foreign banks. "The bank paid bigger taxes
this year due to the reimposition of the gross receipt tax on banks
which is now being charged as expense unlike last year wherein value
added taxes were passed on to clients. As a result, taxes and licenses
advanced by an increment of 27.17% during the six-month period,"
Prudential Bank said.
Nonperforming assets, or those classified as real estate and other
properties owned or acquired, was significantly higher at PhP1.13
billion from PhP86.69 million from end-2003 due to dacion en pago
on mortgaged properties. The bank's bad loan ratio was at 26.24%, up
from 24.17% in end-2003. Bracing for tougher times, Prudential Bank
earlier projected a modest 5% earnings growth this year through a more
active participation of its treasury unit in the bond market. Prudential
Bank reported a 21% spike in net income last year to PhP575.61 million
from PhP475.87 million in 2002. -- R. A. M. Rubio
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By JENNEE GRACE U. RUBRICO, Senior
Reporter
Media company GMA Network, Inc. will pay
PhP1 billion in debts up to next year through internally
generated funds. Ronnie Mastrili, vice-president for finance, said GMA
will pay
PhP500 million this year and another
PhP500 million due next year. "All of these will be sourced from
internally generated funds. We don't need to refinance or restructure
our loans," he said. He said the company "religiously" pays its loans as
they fall due, and that GMA is "very optimistic" that it would meet its
plan to be debt-free by 2005. GMA has been seeing an increase in its
profits, posting a net income of
PhP751 million for the first half of the year, up 33% from the
same period last year. This is due to strong revenues, which increased
20% to
PhP3.62 billion from
PhP3.01 billion last year, the company said. GMA said, however,
that operating expenses also increased 20% to
PhP291 million due to increased production costs, advertising and
promotion, amortization of program rights and salaries and allowances.
But Mr. Mastrili said election-related spending contributed
"significantly" to the increase, and added that "this is way within the
programmed spending for the year. The company has prudently planned the
expenditures up to the end of the year." The company is expecting to
increase its profits by 50% this year. Mr. Mastrili said the target is
attainable given the company's strong performance in the first half.
"The company is right on track in hitting its 50% net income growth
target for the year The first half performance can be sustained, if not
exceeded, in the second half barring any major economic downturn," he
said. GMA said it expects to see a growth in revenues from television
and radio operations as from its international channel, which would be
launched "in a few months."
An analyst said that being debt-free would help GMA in its plan to go
public by next year. "This should reflect a strong balance sheet, and
should be good especially that less debt burden means less interest
expense and good potential for earnings and growth subject to its
industry." GMA earlier said it is "just waiting for the right timing"
for its initial public offering. The media firm has a network of 45 VHF
and two affiliate stations and 31 radio stations nationwide. The company
plans to reopen its UHF channel and to produce movies again. From
January to June, GMA's average total day ratings reached 16.2% against
rival ABS-CBN Broadcasting Corp.'s 15.9%. For the first quarter, GMA
posted
PhP251 million in net income, up 57% from the same period in
2003. In end-2003, the company posted a record-breaking net profit of
PhP1.05 billion, 162% or
PhP650 million higher than its income of
PhP402 million in 2002.
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By ELLEN P. RED, Correspondent
CAGAYAN DE ORO CITY in Northern Mindanao -- Infinite Forest Co. Ltd.,
the local unit of Korean Resort Co. (Koresco), is set to build a 50-room
international leisure hotel in this city's Pueblo de Oro Township.
Rodolfo Meñes, vice-president and general manager of Pueblo de Oro
Development Corp., a member of the Investment and Capital Corp. of the
Philippines Group, said Infinite Forest recently bought about half a
hectare of prime property in the Pueblo de Oro Golf Estates. Mr. Meñes
said the groundbreaking for the hotel's construction is set late this
month. He said the construction would take about a year. The hotel is
expected to be operational next year. Koresco is a leisure property
developer with more than a dozen condominiums and hotels in South Korea,
Mr. Meñes said. Aside from hotel and condominium development, he said
Koresco is also involved in condominium building and membership club
time-sharing services.
In putting up the hotel, Mr. Meñes said, Koresco expects to cater to
about 40,000 individual members in its condominium building and
membership club time-sharing services. Of the 40,000 individual members,
10% are ardent golfers, Mr. Meñes said. Pueblo de Oro said the hotel
would be constructed on a 5,354-square meter lot overlooking the driving
range and the golf course. The proposed hotel is said to have four
stories and a basement. It features 42 deluxe rooms, seven royal suites,
one presidential suite, banquet, seminar rooms and a restaurant.
Amenities include an outdoor swimming pool and a 30-car parking area.
The Korean group's entry to Cagayan de Oro, Mr. Meñes said was a result
of two trade missions to South Korea last year led by Mayor Vicente
Emano and local business executives.
The official publication of the office of the city council, reported
that Suk Koo Ko, chairman of Infinite Forest, is set to apply for the
city's tax perks. Incentives provided by the city's include exemption
from local licenses, fees, and dues within three years from the date the
business starts operation. The registered investor under the ordinance
shall be fully exempt from the following fees: mayor's permit, business
manager permit, building permit, health certificate, sanitary, garbage,
fire inspection, tax on billboard, tax on delivery van and tax on weight
and measures. For a period of not more than six years from the date of
approval of their application, the registered investor under the
ordinance shall be exempted in business tax from gross sales/receipts.
Also, the registered investor shall be exempt from real property tax for
a period of not more than six years from the date of approval of their
application.
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By CARMELITO FRANCISCO,
Correspondent
DAVAO CITY in Southern Mindanao -- The government is urged to revive
the Philnico Nickel Refinery and Special Economic Zone on Nonoc Island,
Surigao del Norte. In a resolution passed last month, the Caraga
Business Council, represented by Leonel Santos, Philippine Chamber of
Commerce and Industry regional governor for Eastern Mindanao, asked
President Gloria Macapagal Arroyo to direct the Regional Development
Council, the Department of Trade and Industry and the Board of
Investments to fast track moves to revitalize Philnico by adopting the
model used in resurrecting National Steel Corp. in Iligan City. The
resolution also urged that all groups in the region must join hands in
revitalizing the company which was closed in 1986. It said the revival
of Philnico will boost the mineral industry and the regional economy.
"The mineral exploration and mining industry can generate considerable
wealth to areas with potential for environmentally sustainable mineral
development in Mindanao, providing jobs, supporting local industries,
improving infrastructure," it added. It added that since the Caraga
Region is known for its mineral deposits, the government should exert
efforts in tapping these resources because these will help in propelling
economic development of the region.
Nonoc Island is known for its large nickel deposits that, along with
logging, once made Caraga region the "hotbed" of economic growth, it
added. But the closure of Philnico in 1986 resulted in loss of some
4,000 jobs, about $600 million in investments and $300 million in annual
export earnings. Last year, the business sector also passed a resolution
calling on the government to find ways to reopen the nickel plant.
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Listed holding company NextStage, Inc. is buying information
technology firm First Advanced Multimedia Entertainment, Inc. (FAME) for
PhP113.507 million, in a bid to firm up its grip on the
multimedia gaming industry. NextStage board has approved the
acquisition, the firm said in a disclosure. The board also approved the
issuance of 49.949 million shares from the firm's authorized but
unissued capital stock. NextStage directors approved the issuance of
113.507 million shares at PhP1 per share in exchange for the full
outstanding capital stock of FAME. FAME operates internet and mobile
intermediate platform, and provides support to multimedia gaming.
In line with the acquisition, the Philippine Stock Exchange (PSE)
yesterday suspended the trading of NextStage shares until it submits to
the exchange other documents pertaining to the purchase. "The Exchange
shall suspend the trading of the company's shares pending compliance
with the requirements set forth [in the disclosure for substantial
acquisitions and reverse takeovers]," said PSE Senior Vice-President for
operations Jurisita M. Quintos. NextStage will seek the approval of
stockholders as of Aug. 30 on the board's decision to hike its
authorized capital stock to
PhP170 million from
PhP100 million. NextStage was incorporated as Pacemco Holdings,
Inc. in 2001 to act as a holding firm. Prior to the change in its
corporate nature, NextStage was known as Pacific Cement Corp. with
investments in the cement industry supplying Visayas and Mindanao.
-- A. B. L. Lorenzo
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Food and beverage giant San Miguel Corp.'s multi-product beverage
brewery in Indonesia posted a 16% increase in operating income to $1.9
million in the first half of the year due to higher sales. In a
statement, San Miguel said its PT Delta Djakarta brewery posted a 15%
increase in its sales volume to contribute to the recovery of San
Miguel's international beer operations. It said the higher sales were
"spurred by a strategic marketing and distribution scheme." PT Delta,
one of Indonesia's largest breweries, manufactures Anker Bir and Anker
Stout, which San Miguel said enjoy a significant share of the country's
beer market. San Miguel's presence in Indonesia started in 1976 when it
snagged a licensing agreement. It started its brewery operations in the
country in 1993 when it bought into PT Delta Djakarta, which now
operates its brewery in Bekasi Province, West Java. The brewery started
operations a few months ago as part of San Miguel's plan to expand its
operations in the Asia-Pacific region.
San Miguel is the country's largest publicly listed food, beverage,
and packaging firm. In the past four months, the firm acquired assets in
Thailand, Indonesia, Vietnam and Australia as part of its thrust to
boost international business. The firm said its international business
would increase its contribution in the revenue mix in the future to 30%
to 40% from less than 15% at present. In the first half, San Miguel
posted a consolidated net income of
PhP4 billion, up 31% from last year. Consolidated sales revenue
increased 13% to
PhP81.28 billion, while consolidated operating income amounted to
PhP8.11 billion, a 32% increase over last year.International beer
sales volume went up 17% for the first semester with sales revenue
reaching $120.1 million. -- Jennee Grace U. Rubrico
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By ANNA BARBARA L. LORENZO,
Reporter
Profit-taking at the Philippine Stock Exchange (PSE) gobbled up the
market's gains in the past two weeks. Analysts said the traders gave in
to the selling pressure amid lingering uncertainties, particularly over
expected oil price increases which could eventually lead to inflation
and even interest rate hikes. The PSE Composite Index (Phisix), the
benchmark for the performance of Philippine stocks, slumped to a
two-week low at 1,566.83 points, 28 points or 1.76% lower than Tuesday's
closing level. The broader all-shares index slipped 5.52 points, or
0.55%, to 996.57. "Investors chose to pocket gains from the previous
sessions. There are still uncertainties such as the possibility of a
higher inflation because of the oil price adjustments," a research head
of a brokerage firm said. "Eventually, the interest rates may also catch
up to cover for the inflation," the research head added. After major oil
players pumped up prices early this month, smaller oil firms are set to
follow suit with an increase of 35 centavos per liter for diesel and
gasoline, and 50 centavos per liter for kerosene. Because of the price
hikes, the National Economic Development Authority said inflation in
August may reach 6.1% to 6.3%. Last month, inflation stood at 6%, while
the year-to-date rate is at 4.3%. The market's drop was also expected as
stock prices have already gone up in the previous sessions, said SB
Equities' Monique Lecaros. "The weakness is expected because a lot of
issues have gone up last week, particularly [those] in the mining
sector," Ms. Lecaros said.
MINING
Selling dominated the mining sector, which has experienced sell-offs
since it reached its peak in almost four years at 2,258.49 on August 6.
The mining index yesterday tumbled 94.24 points, or 4.79%, and closed at
1,871.71. As much as 1.984 billion shares were traded within the mining
sector alone, boosting the total trading volume for the day to 2.413
billion shares. Since the share prices of mining stocks range from less
than one peso to PhP3.25, activity in the sector contributed only
PhP30.07 million to the total trading value of PhP682.172
million. Ms. Lecaros said mining stocks have been in the limelight of
late due to the government's plans to revive the industry. She added
that while investors are excited about prospects in mining, traders
still opted to continue cashing in their gains since nothing concrete
has been made on the proposals for the sector. Ms. Lecaros also said
investors trading mining stocks are usually referred to as "market
players," or those who are just into short-term transactions. Most of
the selling were concentrated on the A and B shares of Manila Mining
Co., both of which lost 0.2 centavos to close at 1.6 centavos and 1.8
centavos, respectively.
TELECOM STOCKS
Telecom stocks also succumbed to the selling pressure yesterday after
hefty gains in previous sessions. Globe Telecom, Inc. pulled down the
Phisix by 8.14 points. It lost PhP40 to close at PhP875 per share. Globe
was the third most active stock for the day with an 11.63% market share.
Telecom leader Philippine Long Distance Telephone Co. (PLDT) surrendered
PhP25 to profit-takers as it dropped to PhP1,275. PLDT captured 21.16%
of the transactions yesterday, making it the most active stock during
the session.
OTHER ACTIVE STOCKS
Holding firm DMCI Corp. yesterday fell 16 centavos to PhP1.22,
following reports that investors of its subsidiary Universal Leisure
Corp. has threatened to go after its assets if their investments were
not returned. Investors suing Universal Leisure accused DMCI of being
the mastermind in luring them to buy shares amounting to PhP2 billion
for a project gone sour. Meanwhile, Jollibee Foods Corp., which was
reported to have closed down two restaurants abroad, dropped 75 centavos
lower at PhP24.75. Only International Container Terminal Services, Inc.
(ICTSI) and First Philippine Holdings Corp. went against the bandwagon
and posted gains in share prices yesterday. ICTSI reported a net income
of PhP446 million for the first half, 101% higher than the
PhP222-million profit it made for the same period last year. It
attributed the growth in income to improved performance from the Manila
International Container Terminal and its foreign subsidiaries.
First Holdings, in the meantime, said its net income for the first
half climbed 2.6% to PhP1.98 billion from PhP1.93 billion last year. The
local brokerage research head said investors could be keeping their
money in the firm due to dividend prospects. With the dominance of
selling in the market yesterday, decliners outnumbered advancers, 69
against 13, while 39 out of the 121 traded stocks closed unchanged. Ms.
Lecaros said August is generally a weak month for the market, but added
that investors may seize the opportunity of buying shares at lower
prices. "We are taking it [weakness] on a positive note since the bouts
of weakness would open windows for positioning for issues which are
expected to do well in the second half," she said.
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