The peso rate closed higher at P55.83 to the US dollar yesterday at the Philippine Dealing System of the Bankers Association of the Philippines from P55.875 the previous day. The weighted average rate appreciated to P55.844 from P55.876. Total volume amounted to $262.3 million.
Milk prices rise 5%
Prices of milk and instant coffee have posted a five percent increase due to increases in the world prices of skimmed milk and coffee beans, the Department of Trade and Industry said. According to the DTI Price Monitoring teams, a slight increase in the prices of coffee has been observed for the past three months although the price has started to stabilize in the last month. Café Puro 50g, in fact, went down from
P26 in July to P25 in October. Aside from Alaska powdered filled milk 180g which increased from P38 to P39, retail prices of processed milk did not change in the last three months.
Aussie firm gets approvals
SYDNEY (XFN-Asia) — Climax Mining Ltd said it has gained regulatory approvals to develop its $100 million Dinkidi gold/copper project in central Luzon in the Philippines. It said the Philippine Department of Environment and Natural Resources (DENR) on Thursday issued an effective permit to operate. Climax chief executive Rob Thomson said the approvals will allow the company to complete debt financing and concentrate on off-take agreements, as well as start detailed project design. Thomson said Climax is rapidly advancing discussions with a number of key banking institutions and potential concentrate off-take financing groups in Australia and overseas. He said the groups selected have shown a keen interest in lending to the Dinkidi project and the reemergence of the Philippine mining industry in general. The approval comes after the Philippine Supreme Court ruled earlier this year that foreign companies could own up to 100 percent of mines, allowing legislation that had been on hold since 1995 to be put in place. Once developed Dinkidi is expected to initially produce 160,000 ounces of gold equivalent a year, rising to 200,000 ounces.
Moody’s sees PLDT rate upgrade
Moody’s Investors Service said it has placed the debt ratings of Philippine Long Distance Telephone Co (PLDT) on review for possible upgrade, in view of the carrier’s improving financial risk profile. At the same time, Moody’s assigned PLDT a local currency corporate family rating of "Ba2", and also placed it on review for possible upgrade. PLDT has a "Ba3" foreign currency senior unsecured rating. In a statement, the ratings agency said the review will focus on the sustainability of improvements in PLDT’s operating and financial profile, as well as prospective capital expenditure requirements, particularly any investment in third-generation technology. Moody’s said the review will also take into account "possible structural subordination given debt at subsidiary Smart Communications Inc", PLDT’s exposure to foreign exchange risks, and its investment strategy. Moody’s expects to complete its review by year-end. Moody’s also said PLDT’s plan to seek consent of bondholders to amend certain terms of senior bonds due 2007 and 2012 or the prospective tendering of the bonds will not adversely impact its credit profile. "PLDT is well advanced in its debt reduction program, which is leading to lower interest costs, increased cash flows, and reduced exposure to foreign exchange rate risk," Moody’s said. PLDT is targeting to reduce its debt by $600 million this year, and has already cut its obligations by $550 million so far, Moody’s noted, adding that the company has over $530 million in cash at present.
PMO lowers ISM bid price
The government’s Privatization and Management Office (PMO) has lowered the minimum bid price for a 4.88-hectare property in the financial district of Makati that it plans to sell through auction Nov. 17. PMO said Wednesday that the minimum bid price for the former site of the International School Manila has been set at
P1.18 billion ($21 million), 38 percent lower than the minimum bid price of P1.9 billion when the government tried to sell the property in 2003. The International School property, which the government had been trying to sell in 2002, is being marketed as an information technology center. However, the city government of Makati has yet to change the area’s zoning to make the property available for commercial use. The area is now in a zone considered suitable only for institutions such as schools.
ADB yuan bonds rated ‘AAA’
BEIJING, Oct. 14 (XFN–Asia) — Fitch Ratings said it has assigned a longterm rating of "AAA" to the Asian Development Bank’s (ADB) 10-year senior unsecured bonds of about one billion yuan. "The rating reflects ADB’s high quality shareholders, its protection against credit risk originating from its preferred creditor status and its conservative financial policies," Fitch said in a statement. ADB’s portfolio consists mainly of loans to public entities in countries with low credit quality, the ratings agency said, adding that the bank also bears a relatively high risk with sovereign loans to Indonesia, China and the Philippines. But ADB benefits from its preferred creditor status which ensures that repayment of its loans takes precedence over repayments to commercial banks and other creditors, Fitch said. "Consequently, the quality of the bank’s portfolio is excellent with nonaccrual loans representing only 0.16 percent of the total loan portfolio at end-2004" Fitch added. ADB and the World Bank’s investment arm, the International Finance Corp, both won approval last week to issue yuan-denominated bonds. They are the first two foreign institutions in China to win approval to issue yuan-denominated bonds.
Cityland to issue P
595-M STCPs
Cityland Development Corp., a real estate concern, said it plans to raise
P595 million through the issuance of short-term commercial papers. Proceeds from the issue will be used to cover the funding requirements of the company, said Cityland in a disclosure to the stock exchange. Cityland said it will seek a renewal of its application to issue short-term commercial papers with the Securities and Exchange Commission for the capital raising plan. This is a standard requirement under SEC rules for companies seeking to issue commercial paper.
ICTSI forges Aussie joint venture
International Container Terminal Services Inc. (ICTSI), is setting up a corporate vehicle to pursue projects in Australia. In a disclosure to the Manila stock exchange, ICTSI said the establishment of Australian International Container Terminal Ltd. is still in process. "It is a corporate vehicle that will be used to pursue projects in Australia. This corporate vehicle will be activated only when a project is obtained," said ICTSI. The port operator said that, at this time, it has yet to enter into any binding agreement for proposed projects in Australia. ICTSI expects to spend an estimated A$200 million pursuing projects in Australia. But the company said: "This amount has not been allocated at this time." ICTSI said the joint venture’s primary targets will be Sydney’s Port Botany, the Port of Melbourne, and the Port of Fremantle in Western Australia. It said the company is prepared to invest in excess of A$200 million as a "first phase" investment wherever it can secure port land.
PSE: Teach securities in schools
The Philippine Stock Exchange (PSE) is advocating for capital market, securities and investments to be made as a required subject in the business curricula of colleges and universities in the country. PSE President and Chief Executive Officer Francis Lim explained this would improve not only the competency of prospective capital market practitioners but also would increase investment awareness and develop an investment-conscious culture among the Filipinos, and in the process, contribute to the country’s economic development. Lim noted less than 1 percent of the Philippine population actively invests in the stock market. There is strong perception that the stock market is only for the chosen few and that only big investors can gain from investing in the market, he said. There is therefore a pressing and imperative need to dispel this notion, assist in improving the stock market’s image as well as promote investing in the market through an intensive education program, Lim said in his speech during the induction of the first set of officers of the newly-formed Capital Market Institute of the Philippines (CMIP) last week.
Investments in environmental goods and services hold huge promise in Asia and the Pacific as governments in the region tighten pollution control laws, the Asian Development Bank (ADB) said. The region accounts for just $37 billion of the $600 billion global market for environmental goods and services, but its fast growth rate of 8 percent to 12 percent should triple the size of the market by 2015, according to an ADB study. The ADB’s Asian Environment Outlook 2005 report said that now governments have taken notice, it is time for the private sector to follow their lead. "We now see that governments across our region — from India to Thailand, to the People’s Republic of China — are increasingly ready to take on environmental challenges," said Nessim Ahmad of the ADB’s environment and social safeguards division. "Enforcement of pollution control laws is tightening, budgets for environmental protection are increasing, and judiciaries are taking tougher stances," he added. "The improved environmental quality demanded by the public will require investment in wastewater treatment, solid waste management, sustainable public transport and clean, renewable energy systems — all of which are critical to the economic and environmental future of the region." Ahmad said Asian consumers are now also demanding products that are greener and friendlier to the environment.
Three conduit financing institutions have secured
P33.8 million in loans from the state-owned Development Bank of the Philippines (DBP). Under the bank’s financing program for micro-enterprises, the three institutions that got the assistance were the Center for Agriculture and Rural Development (CARD) (P30 million), BMS Rural Bank (P1.94 million) and First Macro Bank, Inc. (P1.9 million). DBP president and chief executive officer Rey David said these loans demonstrate that microfinance remains to be a significant development strategy of DBP as it endeavors to contribute to the empowerment of the disadvantaged sectors in the fight against poverty. The DBP financing program for micro-enterprises facilitates the access of poor and low-income households to formal credit and banking services to develop their small businesses. The program may be accessed through the microfinance institutions by micrenterpreneurs engaged in manufacturing, agri-business and similar livelihood projects. Housing and electrification are also eligible loan purposes. CARD, Inc. was ranked the sixth best microfinance institution in the global microfinance category for outreach and sustainability by the Consultative Group to Assist the Poor (CGAP) of the World Bank. BMS Rural BAnk has been operating for the past 40 years. Its microfinance program includes livelihood loans, consumption and emergency loans, deposit generation and insurance and pension benefits. First Macro Bank has been cited by DBP for being an active microfinance partner towards energizing the growth of micro and small enterprises.
Manila Electric Co (Meralco) said residential consumers here and in neighboring provinces will pay more for their power, while commercial and industrial consumers will pay less once the interclass subsidy among its customers is reduced next month. However, the country’s largest power distributor said the higher charges for residential users should be partially offset by the complete removal of intra-grid subsidies in transmission charges, also scheduled next month. In a statement, Meralco vice-president Ivanna de la Pena said the net effect on residential consumers of the cuts in these two subsidies will be an additional
P0.15 per kilowatt-hour on their bills. But her statement gave no details of the overall effect on the bills of commercial and industrial consumers. She said the Energy Regulatory Commission (ERC) has ordered the removal of the inter-class subsidy among Meralco’s commercial, industrial and residential customers in two stages — the first next month and the second in November next year. De la Pena said said the two-stage removal of the inter-class subsidy will mitigate the impact on the currently subsidized residential sector. Residential consumers who use little electricity will continue to enjoy the subsidies, she added. She said getting rid of the intra-grid subsidy will reduce transmission charges for residential customers by P0.06 per kilowatt-hour and for commercial and industrial users by P20.42 per kilowatt-hour next month.
SINGAPORE (XFN-Asia) — United Industrial Corp said it has appointed Merrill Lynch as independent financial adviser to advise the board regarding the takeover bid made by Philippine conglomerate JG Summit last week. JG Summit is offering to buy the rest of UIC for S$1.09 each to comply with Singapore takeover rules after its stake rose above 30 percent last week as a result of purchasing additional UIC shares. Under Singapore rules, shareholders accumulating more than 30 percent of listed companies are required to make a mandatory takeover offer. UIC said Merrill Lynch will make its recommendation 14 days after JG Summit financial adviser CIMB-GK despatches the offer document to UIC shareholders. "In the meantime, shareholders of the company are advised to refrain from taking any action in relation to their shares in the company which may be prejudicial to their interests," UIC said.
Shell IPO tied to refinery move
Pilipinas Shell Petroleum Corp., a unit of the Royal/Dutch Shell group , said its planned initial public offering would hinge on the review of its refinery operations in the Philippines. Pilipinas Shell, the Philippines’ second largest oil refiner, said it hoped to finish by the end of next year the review on whether to shut down or expand its 110,000 barrels-per-day (bpd) refinery. "We are in the midst of conducting a comprehensive review of our refinery operations here," Shell external affairs general manager Roberto Kanapi told reporters. "The study may indicate if we will expand or shut down our refinery business so we cannot decide on the IPO yet," he added. Under the oil deregulation law passed in 1998, an oil refiner is required to list 10 percent of its shares in the local stock exchange. Pilipinas Shell has repeatedly asked the government to allow it to defer its IPO, partly due to poor market conditions. Under the law, Shell should have gone public in 2001.
PETPlans appoints CEO
PETPlans announced recently the appointment of Lorenzo T. Ocampo as chief executive officer (CEO). Ocampo is currently the president of PETPlans where he has been chief operating officer since 1992. As CEO, Ocampo will be responsible for setting the overall strategic direction of PETPlans. As chief executive, he takes over the post of his late father, Adrian V. Ocampo who was also chairman from 2003 until his death in August of this year. The company also announced the election of Rev. Edmundo M. Martinez, S.J., as Chairman of its Board of Directors. Fr. Martinez is a member of the faculty of the Asian Institute of Management (AIM) and will be assuming his position as Associate Dean of the Center for Development beginning October, 2005. He has been a Director of the PETPlans’ Board since 1988. He replaces the late Adrian V. Ocampo who served as Chairman from 2003 until his death in August of this year. As president of PETPlans, the young Ocampo continues to serve PETPlans in various capacities. He is also the president of PETNET, a money transfer agent of Western Union with the largest network in the Philippines of over 3,000 outlets. Prior to PETPlans, Ocampo was a product manager of Unilever Philippines, where he stayed for close to five years. Ocampo attended Georgetown University in Washington, D.C. where he obtained a Bachelor of Science degree in Business Administration majoring in Finance. He also attended the Strategic Business Education Program of the University of Asia and Pacific in 1995. He is a registered internal quality auditor. Outside of his official functions, Ocampo is a director of the Philippine Federation of Pre-Need Plan Companies, Inc. (PFPPCI) and was the president of the Rotary Club of Makati West.
