No speculative attack on peso

Bank loans to require ITR

Finance Secretary Cesar V. Purisima is again urging banks to place special emphasis in the borrowers’ income tax returns and make it "sole basis" for approving loans, corporate and individual. "I urge banks to base their lending purely on ITRs rather than second set of books if they really want to live the spirit of their respective corporate governance codes," Purisima said. The DoF chief is on a crusade to improve tax collection and updating data of taxpayers’ profiles to make sure that the government is collecting the correct amount of revenues. Banks now require borrowers to submit ITRs on all loan applications after the DoF, the Bureau of Internal Revenue and the Bangko Sentral ng Pilipinas approved circular in April to implement the requirement. Prior to the new rule, banks only require ITRs for corporate loans. However Purisima wants to put more importance on the ITR and are again asking the banking community to do so. Purisima is also working with the National Development Authority to align regional growth data of each of the nineteen monitored areas with that of the BIR to determine revenue goals and the amount of taxes that should be collected for each region. The DoF will also link up with banks in the regions through the BSP, and determine the exact banking resources in the areas. "We will match up the banking resources data of each regions to taxation or how much tax we can be collected," Purisima said.

Schools get Speed Program funds

As part of its assistance to the small and medium enterprises (SME) sector, the Development Bank of the Philippiunes will formally turn over funding support to jumpstart the operations of business assistance centers (BACs) in DBP partner educational institutions under the Sustainable Partnership for Energizing Entrepreneurship Development (SPEED) program. These educational institutions are: Aklan State University, Benguet State University, Camarines Sur State Agricultural College, Central Philippine University, Foundation University, Mariano Marcos State University, and Pampanga Agricultural College.The SPEED program is designed to contribute to the development of micro, small and medium enterprises through a nationwide delivery system that will facilitate the sector’s access to technology, markets, credit and technical assistance through the BACs.

Market players: Now time to borrow

Market practitioners are pushing the government to now tap the international bond market for new money to complete its 2005 financing program due to improved sentiments by foreign investors on the Philippines. Bank treasury officials were unanimous in saying that "now is the right time" for the government to borrow. HSBC Treasurer Jose Arnulfo Veloso explained current offshore investors’ attitude on the Philippines is very positive, which could result to a relatively cheaper cost of borrowings. "If the national government borrows, now is the right time," said Veloso, citing the lowering of spreads of government debt instruments being traded in the international bond market. Another bank official backed Veloso’s view, stressing that the Philippines should cashin on this latest development offshore. "The spread could be narrower," the bank official, who asked not be named, said. To recall, prices of emerging sovereign bonds, including the Philippines, rallied Friday due to the improved credit worthiness, arising from the first payment by Argentina on its maturing liabilities its moratorium nearly four years ago.

For the Philippines, the investors took positively the strong political commitment of the authorities to address the budget deficit. This resulted to the tightening of premium or spreads of Philippine foreign denominated bonds.

FQ drops 2 business activities

First Quadrant Philippines, Inc. has given its commitment to drop two activities that placed the company under probe by the Securities and Exchange Commission (SEC) and the Department of Trade and Industry. A source from the SEC said the company will issue an advisory to the public claiming it has dropped two activities namely the pairing bonus and direct referral. The SEC official said First Quadrant is issuing the advisory in order to prove that it will no longer earn through recruitment. The recruitment activity of First Quadrant is being questioned by the DTI as a possible pyramiding scheme. Under First Quarant’s Direct Referral Incentive, investors need not to sell a product. They can earn just by referring 2 persons. The Referral Bonus, on the other hand, says that for every pair added under one’s group he or she will be earning non-stop. According to the SEC official, the advisory that First Quadrant will be issuing has already been approved by the SEC in a Commission en Banc meeting held last week. To recall FQPI was issued a Show Cause Order by the SEC for allegedly selling unregistered securities. The show cause order is independent of an investigation conducted by the Trade Department against the firm for allegedly engaging into the illegal pyramiding scheme. During the course of the investigation by the SEC, First Quadrant submitted a business plan to the Commission to show that it has dropped the two activities. The SEC said the firm is trying to legitimize its business. First Quadrant was registered with the SEC in December 2001 primarily to engage in the business of trading goods such as shoes, bags, belts, wallets, garments and others on a wholesale and or retail basis.(AMM)

BEIJING, June 11 (Reuters)—The International Finance Corp., the private sector arm of the World Bank, hopes to issue more than 1 billion yuan ($121 million) worth of 10-year bonds in China this year, while the Asian Development Bank is eyeing an issue around twice that size. China’s cabinet gave the green light to global institutions to issue yuan-denominated loans in June last year. The IFC has since submitted its application to the Ministry of Finance and to the central bank, said Karin Finkelston, IFC’s country manager for China. "It may be a little more than one billion yuan depending on how they do it," Finkelston told Reuters. She said the timing was up to the Chinese government. "We would love to put it out this year." One industry source said the Asian Development Bank, which has publicly stated its intent to issue yuan bonds in 2005, planned to sell 2 billion yuan worth of paper, possibly in September. China hopes the introduction of such bonds will help deepen the country’s fledgling bond market, a move seen as crucial to building a sound yield curve that can help financial institutions better price risk and allocate capital successfully. Finkelston said the IFC would be open to issuing more yuan-denominated bonds in the future. "We would like to use the bond market more innovatively," she said. "We would like to credit-enhance other peoples’ bonds if the market opens up and other private companies come to the market," she said.

CPAC Monier Philippines Inc. (CMPI), manufacturer of CPAC Monier Concrete roof tiles, reported that it has further strengthened its lead in the roof tile segment with a commanding 64 percent market share in 2004 on the back of higher sales volumes as the local construction sector continues to improve. CMPI Marketing and Sales Manager Arnel Nacor said the company posted a 42 percent increase in sales volume in 2004 compared to the previous year, while net sales was also higher by 49 percent year on year. Nacor said the increase in market share from a little over 52 percent in 2003 to 64 percent in 2004 is a solid proof that local developers, designers and homeowners now consider CPAC Monier roof tiles as the best alternative to traditional roofing materials owing to its many superior features. Nacor likewise attributed the continuing success of CPAC Monier roof tiles to the company’s improved distribution channels and the unqualified support of their dealers nationwide. Nacor also noted that while in the past their customer were mostly big developers who wre the first to discover the advantages of CPAC Monier roof tiles, today more and more homeowners are the ones specifying the use of CPAC Monier to their architects. The CMPI official said that the improving construction sector in the country means that the company will continue to perform well this year as it penetrates more markets while increasing production output. Aside from providing superior heat insulation during the summer months and better insulation from noise when it rains. CPAC Monier concrete roof tiles also require little or no maintenance costs at all, thus proving to be more cost-effective in the long term. CMPI is a joint venture company between two world leaders in the construction industry – Lafarge of France and the Siam Cement Group of Thailand. The company manufactures millions of concrete roof tiles annually in its state of the art production plant in Sto. Tomas, Batangas.