The peso rate closed higher at P54.565 to the US dollar yesterday at the Philippine Dealing System of the Bankers Association of the Philippines from P54.71 the previous day. The weighted average rate appreciated to P54.646 from P54.706. Total volume amounted to $293.5 million.
7-year bond fetches 11.372%
The government yesterday reissued a treasury bond due Apr. 28, 2012 at an average yield of 11.372 percent, down from the 11.50 percent coupon the bond fetched when it was first issued last month because of excess liquidity. Total tenders for the
P4.5 billion bond offer, which was awarded in full, reached P7.63 billion. National Treasurer Omar Cruz said excess liquidity in the financial system and positive sentiment spurred by steady progress in fiscal reform had helped soften domestic interest rates. Earlier Tuesday, President Gloria Arroyo signed into law revisions to the country’s value-added tax, the largest among revenue-raising measures proposed by the government to reduce public sector debt and balance the budget by 2010. The removal of most exemptions to VAT starting July will raise at least P27 billion this year. Next year, the new law will increase corporate income tax to 35 percent from 32 percent and the VAT rate to 12 percent from 10 percent to boost additional revenue to at least P97 billion. "The financial situation is improving and the outlook is positive with the implementation of the VAT this year," said Cruz. "Looking into 2006, the outlook is even better." Despite the oversubscription of the seven-year bond at yesterday’s auction, Cruz said the National Treasury doesn’t intend to open its tap facility because at "the moment treasury is still ahead of its borrowing program."
Firm sells Hopewell Crown
Crown Equities Inc. has sold its 70 percent stake in Hopewell Crown Infrastructure Inc., the firm contracted for the extension of the South Luzon Expressway, to MTD Equity Sdn Bhd. for a total transaction value of
P398 million. Crown vice president Eugene Macalang said MTD is a wholly-owned unit of MTD Capital Berhad, one of the leading highway construction and toll road operation groups in Malaysia listed in the Kuala Lumpur Stock Exchange. The agreement will allow the sale of all the present 70 percent shareholders of CEI in HCII totalling 175.135 million shares for P250 million and the reimbursement of CEI’s advances to HCII amounting to P128 million. On top of this, CEI will be paid P20 million by Northeast Development and Acquisitions Corporation from the termination of the agreements for the sale of the shares entered into by CEI and NDAC in 2004. Macalang said the entire transaction value of P398 million, less P50.06 million which has already been received by CEI, is payable over a period of 15 months, subject to the fulfullment of certain conditions. In addition, CEI has the option to subscribe up to five percent of HCII’s capital stock when HCII’s highway project attains financial close. HCII had signed a joint venture agreement with the Philippine National Construction Corporation (PNCC) to undertake the rehabilitation, expansion, operation and maintenance of the South Luzon Expressway from Alabang to Sto. Tomas, Batangas. (JAL)
Ayala reverse stock split okayed
The Securities and Exchange Commission (SEC) has approved Ayala Corporation’s one-for-50 reverse stock split and an increase in the par value of its shares from
P1.00 to P50. The move is intended to align Ayala Corp’s stock price to trading levels more comparable with largecap listed conglomerates, the company earlier said. In a disclosure to the stock exchange, Ayala Corp said it will soon release a guideline to stockholders. Separately, the stock exchange said the change in par value and the corresponding adjustment in the price and number of Ayala Corp’s outstanding shares will not yet be reflected on the exchange’s computer system pending the company’s disclosure of its procedure for updating old stock certificates bearing the new par value. Last December, the conglomerate said its total number of shares would be reduced to 380 million from 17 billion by the reverse stock split. It said the share consolidation will have the effect of increasing Ayala Corp.’s stock price by a factor of 50.
Meralco helps BIR tax taking
Manila Electric Co. (Meralco) said it will withhold taxes on behalf of the Bureau of Internal Revenue (BIR) for taxes arising from the refund of overcharges to Meralco’s commercial and industrial customers. The refund program is the result of a Supreme Court ruling directing Meralco to return to its customers amounts by which they have been overcharged since 1994. The company expects the total amount of the refunds to reach more than
P30 billion, of which P18.67 billion would be paid to commercial and industrial clients. In a statement, Meralco vice president for corporate communications Elpi Cuna said the BIR has issued a revenue regulation requiring Meralco to withhold a 25 percent tax on refunds due to industrial and commercial customers with active accounts.
Meanwhile, refunds for customers in the same class but whose accounts are already terminated would be subjected to a 32 percent tax. "There is no intended delay on the part of Meralco in remitting to the BIR taxes yet to be withheld," Cuna added.
Porsche raises prices 2.8%
FRANKFURT (Reuters) — Porsche will raise prices in all markets for specific models by up to 2.8 percent this year due to strong demand for its lineup, the German luxury car maker said on Friday. Starting June 1, Porsche will charge 2.8 percent more for the Cayenne S offroader, although customers will continue to pay the same amount for the Cayenne base version and the Cayenne Turbo. Two months later, the price for the entry-level Boxster will rise by 0.5 percent and for the more powerful Boxster S by 1.8 percent. The next-generation 911 sportscars, also known as the 997, will also cost more starting Aug. 1. Buyers will have to add on 2 percent to the current base price to get their hands on a 997-generation 911. The news further demonstrates that while most other carmakers need to resort to incentives to sell their products, Porsche’s iconic image helps it to improve its pricing power even in the midst of a difficult market. This comes despite Wednesday’s news that its quality continued to be rated among the worst in the industry according to a J.D. Power survey. Porsche’s poor ranking, 32 out of 36 surveyed brands, remains linked to complaints from US buyers relating to its Cayenne sports utility vehicle. A spokesman for Porsche said late on Thursday that customers were unhappy with the Cayenne’s harder suspension compared to other rivals and had also reported problems with its radio remote control functions, which are now being analysed.
