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NEWS IN BRIEF
P/$ rate at P54.595 to $1
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The peso rate closed at P54.595 to the US dollar last Friday at the Philippine Dealing System of the Bankers Association of the Philippines. The weighted average rate stands at P54.607.
ADB tech aid on power readied
The Philippine government and Asian Development Bank (ADB) have already firmed up work plan on the technical assistance (TA) intended for the strengthening of the regulatory framework to govern the restructuring of the power industry. Energy Secretary Raphael P.M. Lotilla disclosed that a memorandum of understanding (MoU) has been inked by the parties, noting further that "we have made progress as far as negotiations with the ADB for the assistance to the energy sector." For his part, the energy chief interprets such development as a tangible show of continued confidence of the multilateral lending firm on the Philippines’ ability to move forward with envisioned reforms for its electricity sector. "Even the language and the concept have much to show in terms of confidence on the country’s regulatory framework," Lotilla stressed. The ADB has extended a grant of $1.2 million, to be financed by the Japan Special Fund, that would be used in laying the groundwork for the implementation of policy reforms for the power sector, especially in strengthening the industry’s regulatory muscle. If goals are achieved, the bank views that this will usher in faster pace of disposal of the National Power Corporation (NPC) assets which have been set in the auction block as early as three years ago; but private sector takers are adamant to take a grab due to perceived high regulatory risks. The assistance is seen to boost investors’ confidence by enhancing ERC’s efficiency, and provide the necessary financial and technical advice to the Power Sector Assets and Liabilities Management Corporation (PSALM) for the privatization of the NPC assets. (MMV)
BIR steps up receipt drive
The Bureau of Internal Revenue has intensified its campaign to encourage establishments to report their earnings and consumers to always ask for a receipt when receiving services or purchasing goods and products. BIR Deputy Commissioner Kim Henares said the commission would be talking to advertisers after April 15 – the filing of income tax returns, to link up their "Ask For a Receipt" program. "We plan to talk to advertisers so that they would post Ask For A Receipt in their commercial campaign materials," Henares told reporters in a briefing at the Department of Finance. Henares said the BIR will conduct formal talks with officials and members of the Kapisanan ng mga Brodkasters sa Pilipinas or KBP to initiate the ad-post campaign. "We have already started doing this with radio ads, and after April 15, we will go after the billboards," the BIR official said. Earlier the BIR has launched its "Operation Dikit" to remind establishments to report their gross monthly sales via the Internet. The BIR is also actively operating its RATE (Run After Tax Evaders) campaign and the No-Audit Program. President Gloria M. Arroyo also declared the month of April as Tax Awareness Month to "promote, enhance, and instill nationwide awareness and appreciation on the importance and value of taxes to the society."
Ayala Corp. reduces debts
Conglomerate Ayala Corp. said it doesn’t intend to tap the capital markets this year to finance its capital expenditure, having raised enough cash from recent asset sales. The company said debt reduction remains a top priority to ensure it could sustain its financial health. "We have no borrowing plans. The company has a lot of cash at this point in time," Ayala Chief Financial Officer and Treasurer Delfin Lazaro told Dow Jones Newswires following the company’s annual stockholders meeting. Ayala has earmarked P35 billion for capital spending this year, the bulk of which will be for its telecommunications business. The amount is roughly the same as that of 2004. While the parent may not have borrowing plans given its strong cash position, its unit Ayala Land Inc. and affiliate Globe Telecom Inc. may take in some more debt this year to back their respective capital spendings, Rufino Manotok, Managing Director of Ayala Corp.’s Strategic Planning Group, told Dow Jones Newswires last month. Globe has set a P17-billion capital expenditure program, while Ayala Land has set P13.6 billion. During a briefing following the company’s stockholders meeting, Lazaro said the company has pre-paid loans to quicken debt reduction.
Gov’t defends BSP rate hike
The government defended the decision of the Bangko Sentral ng Pilipinas (BSP) to increase key interest rates, stressing that it was a necessary step towards fiscal consolidation. In a statement, Press Secretary Ignacio R. Bunye pointed out the need to sustain the government’s fiscal consolidation program to put the country’s fiscal house in order amid challenges posed by rising oil prices in the world market. "We need these measures to stabilize the economy and shield it from the impact of continuous oil price hikes in the market," Bunye said, referring to the step taken by the BSP. The BSP earlier raised the overnight borrowing rate by 25 basis points from 6.75 percent to 7.0 percent, and the overnight lending rate also by 24 basis points from 9.0 percent to 9.25 percent.
Banks use BSP’s key rates as benchmark in pricing loans. Raising interest rates is resorted to by central banks all over the world as a tool to siphon off excess liquidity, which tends to push up inflation. BSP had earlier reported that money supply grew by 12.2 percent to P2.13 trillion as of end-February 2005, an indication of an overall improving economic trend. Domestic liquidity, the broadest measure of the country’s supply, is the total of all assets in the financial system, including cash at hand, demand deposits, saving deposits and time deposits.
DLSU team wins PSE contest
The Philippine Stock Exchange awarded a team of business management students from De La Salle University-Taft (DLSU-T) the top prize in its first-ever Best Thesis Competition on the stock market. The competition was sponsored by the PSE in cooperation with the Philippine Association of Collegiate Schools of Business (PACSB). The team, composed of Joana Balatbat, Marc Jason Que and Marlo Erwin Zavalla authored the thesis study titled "Study on the Capital Structure Choice of Top 25 Non-Financial Companies in the Philippine Stock Exchange (PSE) from 1998-2003". The winning thesis study discussed the factors that affect the capital structure choice of top 25 non-financial companies listed in the PSE using the three capital structure theories: the Static Trade-Off, Pecking Order and Agency Cost. Findings of the study show the only significant independent variables such as income volatility, investment opportunity and firm size affect the capital structure choice of the firm. The competition, which forms part of the PSE’s investor education and market promotion campaign aims to inform the youth about the stock market through research. The topic of the thesis studies must be related to the stock market or its other aspects such as investors’ behavior, market culture, economic factors affecting the market and market studies. "As part of our investor education campaign, we have taken special interest on reaching out to the young minds since as they say, youth is the trustee of prosperity," PSE President Francis Lim said.
Grepalife Fund hikes capital
The Securities and Exchange Commission (SEC) approved the application of Grepalife Fixed Income Fund Corporation to increase its authorized capital stock. In an application submitted before the Company Registration and Monitoring Department the Fund said it will increase its authorized capital stock from P200 million to P800 million. Of the net increase in authorized capital stock of P600 million, at least 25 percent or P150.62 million have been subscribed and at least 25 percent thereof or P38 million have been paid in cash by Great Pacific Life Assurance Corporation. "The increase of capital stock of Grepalife Fixed Income Fund Corp. from P200 million to P800 million, with subscription price of P151.62 million and partial payment of P38 million , in cash, may be given due course," the SEC said. Also approved by the Commission was the application of Phinma Property Holdings Corp. to also increase its authorized capital stock. Phinma Properties applied to increase its authorized capital stock from P60 million to P860 million. Of the increase, P200.38 million has been subscribed and paid-up, the SEC said. Phinma Properties is majority-owned and controlled by Philippine Investment Management (Phinma), Inc.(AMM)
iBank to pay cash dividend
International Exchange Bank (iBank) said it will pay shareholders on record as of April 20 a cash dividend of P0.30 per share. Payment will be made 10 working days from the record date, the bank said in a statement.
DTI confiscates LPG cylinders
The Department of Trade and Industry (DTI) has confiscated a total of 143 uncertified LPG cylinders as campaigns against unsafe gas tanks intensified during the fire prevention month. DTI assistant secretary for consumer welfare and trade regulation Norman R. Hocson said that of the 143 uncertified LPG tanks, 95 were confiscated from A. Ang Marketing and 48 tanks from Calaanan Gas & Petroleum Supply, both located in Novaliches. Owners of the said establishments are facing administrative charges under Department Administrative Order 2, Series of 2002, for violation of Republic Acts 4109 and 7394, or the Standards Law and Consumer Act respectively. "The DTI does not tolerate such illegal business practices that compromise the welfare of consumers. LPG tanks without the PS Mark may be uncertified and hazardous to life, health and safety," Hocson said. A certified LPG cylinder has undergone and passed inspection based on quality and safety requirements of Philippine National Standard (PNS) for LPG Steel cylinders. Its manufacturer has been granted the PS License that provides him a legal right to sell his products in the market. LPG cylinders are among the 91 products listed under mandatory certification by the BPS. DTI-BPS Director Jesus L. Motoomull added that many of the reported fire cases in the country have been attributed to defective LPG cylinders.
Indonesia gets $81.2 M ADB grant
The Asian Development Bank has approved a total of $81.2 million in loans and grant for clean water and sanitation facilities projects in Indonesia, a bank statement said Friday. The Manila-based ADB said some 1,500 communities, including those affected by the December 2004 earthquake and tsunami disaster in Aceh and NiasNorth Sumatra, will benefit from the programme. The ADB said at least 1.2 million poor Indonesians will benefit from this program. "Although Indonesia has made progress in providing water and sanitation to its people, standards remain below those of its neighboring southeast Asian countries," the bank said in a statement. "Only about 15 per cent of rural households and just 13 per cent of poorest households obtained water from pipe or pump sources in 2002," it added. "The great majority rely on shallow ground water abstraction, rainwater collection or use of water from nearby rivers or springs," the ADB said. The bank said that the inadequate access to safe drinking water and poor sanitation facilities "combined with poor hygiene have resulted in high rates of diseases" such as diarrhea, intestinal worms, skin diseases and other water-related afflictions. "Poor people in remote rural areas, particularly women, children and the elderly, suffer the most," the ADB said. Peter Fedon, ADB director of social sectors division in Southeast Asia, said the project will give the local governments the capacity to plan sustainable investments in providing clean potable water and sanitation facilities. Fedon said the project will also fund hygiene promotion at schools, religious facilities and among communities, in order to maximize the health impact of the program. The project will be financed by two loans totaling $64.7 million and a grant amounting to $16.5 million. It will be managed by the Ministry of Health and will be due for completion around June 2011.
AyalaLand targets 10% profit hike
Ayala Land Inc said it is aiming for an increase of at least 10 percent in net profit this year from 3.0 billion in 2004, taking into account a positive outlook for the property sector and its new projects. "Taking into consideration the improving market prospects and our project launches this year, coupled with progress in our ongoing asset rationalization and receivable sales program, we hope to achieve a moderate growth of at least 10 percent in our net income for 2005," the Philippines’ largest property developer said in a statement to the stock exchange. However, the company said its performance, as well as that of the entire property sector, is "highly dependent on the macro environment, including but not limited to interest and inflation rate movements." Ayala Land posted an 11 percent increase in 2004 net profit from the previous year, backed by strong growth across its businesses. Among projects in the pipeline are a high-end residential resort community on a 320-hectare property in Bataan, north of Manila, owned by Subic Bay Development & Industrial Estate Corp. It has also increased its stake in North Triangle Depot Commercial Corp NTDCC, the owner of a shopping center to be constructed in the depot of the Light Rail Transit Project 3 in Quezon City, to 49 pct after it acquired the Fil-Estate Group’s 30.89 percent interest at the end of 2004.
EPCIB gives P 0.60/share cash dividend
Equitable PCI Bank Inc. said shareholders on record as of April 19 will be entitled to its cash dividend of P0.60 per share, payable on or before May 2. Earlier, the country’s third largest bank in terms of assets, said it will spend a total of P436.2 million to pay the dividend.
BDO delcares cash devidiends
Banco de Oro Universal Bank said its board of directors has declared semi-annual cash dividends on its Series B preferred shares at a rate of 6.5 percent per annum. The dividend declaration is subject to central bank approval, Banco de Oro told the stock exchange.
ADB to raise P 3 B in bond issuance
The Asian Development Bank plans to raise up to P3 billion from the issuance of peso-denominated bonds, the proceeds of which will be lent to state-run National Home Mortgage Finance Corp (NHMFC), central bank deputy governor Alberto Reyes said. The central bank’s policymaking Monetary Board approved the ADB’s issuance of five-year bonds during its weekly meeting last Thursday. The Manila-based lending agency was earlier reported to be planning to sell peso-denominated bonds this year. Reyes said the proceeds of the ADB bonds will be used as loan for a special purpose vehicle (SPV) to be set up by NHMFC, the agency providing cheap housing loans to the urban poor. He said the SPV will take on NHMFC’s non-performing loans, which amounted to about P13 billion as of end-2004.
Kirin pharma products out soon
TOKYO (Dow Jones)—Kirin Brewery Co. said Monday it will start marketing its pharmaceutical products in six member countries of the Association of Southeast Asian Nations, eyeing potential demand in the region. Kirin has launched a wholly owned subsidiary in Singapore and will set up a unit in Thailand by June. It will also sign agreements with local agents to consign sales activities in Malaysia, the Philippines, Indonesia and Vietnam. Kirin said it will start selling its "Gran" medication and an advanced version of its "Espo" treatment with an annual sales target in those countries of Y1.1 billion in calendar 2010. Gran prevents the loss of white blood cells linked to side effects from taking cancer drugs, while Espo treats anemia, increasing the body’s red cell production capacity. Kirin’s pharmaceutical division posted sales of Y62.7 billion last year. It already sells drugs in China, Taiwan, South Korea and Hong Kong.
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