NEWS IN BRIEF
P/$ rate closed at P54.94 to $1
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The peso rate closed at P54.94 to the US dollar last Friday at the Philippine Dealing System of the Bankers Association of the Philippines. The weighted average rate stands at P55.049. Financial markets will be closed on Monday, Tuesday and Friday next week for public holidays.
October inflation seen tamer
Lower food prices especially rice might have slowed down inflation growth for October to as low as 6.5 percent from seven percent in September, the Bangko Sentral ng Pilipinas said yesterday. BSP Governor Amando M. Tetangco Jr. gave a forecast range of 6.5 percent to seven percent, also implying a mild deceleration in oil and food prices. In a briefing on the latest BSP Inflation Report, Deputy Governor Diwa C. Guinigundo said the October forecast is lower because rice, which contributes a big weight in the consumer basket, was in "abundant supply" during the month. "October is a high supply season (for rice) and food prices will continue their abatement," Guinigundo said. The full-year BSP forecast is 7.9 percent for this year and 8 to 8.5 percent in 2006. For the first nine months of the year the average inflation rate is 7.9 percent and the BSP said that for the last quarter, inflation will slow down to 6 to 7 percent.
EPCIB must sell EBCI shares
The Monetary Board, Bangko Sentral ng Pilipinas’ policy-making body, has denied the appeal of Equitable PCI Bank to hold on to its disputed 10.84 percent shares in EBC Investments Inc. for another five years. The bank was supposed to dispose of these shares after two years of owning them as directed. The BSP approved the acquisition of the treasury shares in 1999 on the condition that the bank would dispose of the shares within two years. BSP rules state that shares owned by a subsidiary are required to be deducted from capital and be reflected as treasury shares. Treasury shares, by themselves, do not have voting rights. According to the BSP, the MB has resolved the issue of the 10.84 percent EBC Investments equity holdings on its parent bank Equitable PCIB. The MB said it has denied the bank’s request for reconsideration of the MB’s earlier decision that it immediately sell the Equitable PCIB shares, which had not been disposed of within two years as previously directed by the BSP. The decision was made October 21. "The MB directed the bank to sell the shareholdings or unwind the transactions in both books within thirty days from receipt of the BSP advice," the BSP said.
SEC lets BPI buy SMIC bonds
The Securities and Exchange Commission (SEC) has approved the request of Bank of the Philippine Islands (BPI) to participate in the P5 billion note issuance of SM Investment Corporation (SMIC). BPI, as trustee bank of pre-need firm Ayala Plans, Inc. sought the approval of the SEC to allow it to buy a portion of the said bonds as part of the trust fund investments of Ayala Plans. SMIC is issuing the five-year fixed term corporate notes this December but this kind of instrument does not belong to the trust fund instruments which pre-need companies, through their trustee banks can invest in. In seeking for an exemption, BPI said the investment in SMIC corporate notes will allow it to move out of lower yielding investments and improve the trust fund performance of Ayala Plans. Meantime, as approved by the Commission en Banc, BPI has been allowed to invest an amount of P50 million and P90 million for education and pension plans, respectively or five percent of the total trust fund equity of Ayala Plans into SMIC’s note issuance. BPI’s request was granted by the Commission provided that the 10 percent liquidity reserve requirement of the Trust Fund Equity will be maintained.
Manila FAME buyers up 44%
Manila FAME International, the Philippines’ leading showcase event for small and medium enterprises (SMEs) in the home furnishings, gifts, holiday décor and fashion accessories sectors, grew its new trade buyers in its October 2005 edition by 44 percent or 2,048 compared to the 1, 421 total new buyers who attended the show in October 2004. "Buyers are constantly searching for high quality and better designs which the Philippines can offer," said Trade Assistant Secretary Felicitas AgoncilloReyes, executive director of the Center for International Trade Expositions and Missions (CITEM). A total of 3, 587 new and regular buyers attended the Manila FAME October 2005 edition. The October show generated a total of US$63.04 million in sales, a positive sign that buyers continue to see the Philippines as a source of well designed and quality export products. Manila FAME, which began in 1983 and held twice a year, is the Department of Trade and Industry’s platform to entice new export buyers and expand the country’s products and services to new and exciting markets.
NFA, EPCIB sign P 4-B facility
The National Food Authority (NFA) recently inked a P4 billion Omnibus Credit Facility and Security Agreement with Equitable PCI Bank as part of an P8-billion issue where other participating lenders include Philippine National Bank, Development Bank of the Philippines and the Philippines Veterans Bank. The mandated arranger and trustees for this issue was Land Bank of the Philippines while ONL Consultants, Inc. acted as financial advisor. The success and magnitude of this issue is a statement to the support that the NFA continues to enjoy from its partners both in government and the banking sector. This is recognition of the vital role NFA plays in our society and in life of every Filipino. The proceeds of this loan will help the NFA perform further its mandate to provide adequate grains supply and ensure stable prices for both the consuming public and the farmers.
Megaworld sets dividend payment
Property developer Megaworld Corp said shareholders on record as of Nov. 9, 2005 will be entitled to receive its recently announced 20 percent stock dividend. It has yet to announce the payment date. The 20 percent stock dividend on Megaworld’s common shares is covered by an increase of P7 billion in authorized capital from P9.2 billion.
Globelines nationwide directory out
Globelines introduces the first nationwide directoryfollowing the launch of the first and only toll-free NDD scheme for the entire Philippines. Globelines, Innove’s residential and business brand, comes up with the nationwide telephone directory for all its subscribers. With the theme "One Country, One Call Zone, One Book", this integrated nationwide phone book is the first of its kind in the country. Jose Antonio T. Mapa, Jr., Globelines Marketing Head, said the introduction of "one book" is in line with Innove’s goal to bridge the entire archipelago, to create "one country". Innove has already turned the Philippines into a "one call zone" when it launched its Globelines-to-Globelines Toll-Free NDD Call Promo in March this year. "We want an extensive directory that puts all business establishments and suppliers nationwide in one listing. Aside from this, Globelines subscribers can now easily access the numbers of family and friends throughout the country in one book," Mr. Mapa said.He added, "With Globelines subscribers in the Greater Manila Area, Luzon and Visayas and Mindanao all in one directory, they can maximize their toll-free NDD." The new Globelines nationwide directory also includes the advanced and innovative products and services being offered by Innove, such as Globelines Broadband, Worldpass and Globe1, which are all aimed at enriching a Filipino’s life. Globelines’ new directory is now available to its postpaid residential and business subscribers.
The Fair Trade Alliance (FTA) has commended the endorsement made by the Bureau of Customs for the filing of charges against cement importer, Southern Cross Cement Corp. (SCCC). In a statement, Dr. Rene Ofreneo of the FTA commended the BoC action. In particular, Ofreneo commended BOC Commissioner Alexander M. Arevalo for the endorsement made by the Customs Intelligence and Investigation Service (CIIS). The CIIS has recommended for the filing of criminal charges against SCCC for alleged illegal release of its cement imports, falsification of public documents and making misrepresentations. The FTA said the BOC move will promote-standing crusade against harmful imports and unfair trade practices. This will also promote a level-playing field and strengthen our resolve to nurture our local industries and agriculture, Ofreneo said.(BCM)
Trade and Industry Secretary Peter B. Favila has ordered for a special monitoring of candles to ensure reasonable prices and adequate supply in the market as demand for the commodity peaks during the All Souls’ Day period. Favila said that although the DTI monitors candle prices year round, a special monitoring during this time and in times of calamity are required to protect consumers against artificial shortages that could push up prices brought about by unscrupulous practices of some traders. DTI Undersecretary for Consumer Welfare Zenaida C. Maglaya stressed that demand for candles normally picks up in the days leading to November 1. "Demand picks up in the days leading to November 1 which is why we are taking the necessary steps to guard against spikes in prices," Maglaya said. The manufacturers reported a 5 percent increase in some of their products last September due to the significant increase in the cost of imported paraffin wax, the raw material used in candle-making and normally sourced from China. Paraffin wax costs P2,800 per sack, 55 percent up from its price of P1,800 in 2004. "Paraffin wax is largely petroleum-based, and its price is affected by overseas petroleum rates," Maglaya said. Last week, the DTI called for a meeting with candle manufacturers to get an update on the current price and supply situation of candles.
Filinvest Land Inc., a property concern, yesterday said it plans to set aside P1.2 billion for capital expenditure in 2006, more or less in line with its allocation for this year. In a disclosure to the stock exchange, the company said the amount, which is still a rough estimate, will be used to finance land development and construction projects. Filinvest Land President Joseph Yap said funds to support next year’s planned capital spending will be internally generated. Early this year, the company said it was looking to allocate between P1 billion and P1.2 billion for capital spending in 2005. Filinvest Land in August posted lower second-quarter earnings after a decline in real estate sales in the period, despite a stronger showing in the first quarter. The company said net profit in the three months to June fell 20 percent on year to P141.9 million from P176.3 million, as real estate sales decreased 24 percent on year to P485.2 million from P641.4 million. Filinvest Land’s second-quarter performance dragged first-half net profit down 3.2 percent on year to P272.4 million from P281.4 million, even as real estate sales for the January-June period improved 15 percent on year to P1.16 billion from P1.01 billion.
ADB okays $1-M health grant
The Asian Development Bank has approved a US$1 million technical assistance (TA) grant to support the government’s health sector reform agenda (HSRA). The HSRA was established in 1999 to improve the efficiency of the country’s public health service delivery system by integrating health care promotion and prevention, expanding referral links, reducing the need for hospitalization, and improving the allocation and use of resources. To support the HSRA, the TA will help the Department of Health to streamline policies and refine monitoring systems, and will assist local government units (LGUs) in initiating and carrying out these reforms. It will help give HSRA a head start in 15 selected provinces by streamlining policies and developing guidelines, concepts, and administrative orders for the health sector in these LGUs. HSRA implementation in up to five of the 15 provinces will also be accelerated by the TA. "The primary challenge facing the country’s health sector is identifying ways to improve the efficiency and effectiveness of health service delivery," says Karima Saleh, an ADB Senior Health Economist. The technical assistance is expected to treamline mechanisms in core referral hospitals to improve performance and improve the quality of public health provision by introducing cost-effective interventions, clinical practice guidelines in health facilities, and piloting programs for public health interventions in LGUs.
Petron complies with BoI rules
Petron Corp. said it has complied with Board of Investment requirements that would entitle the company’s more than P9 billion worth of petrochemical projects to tax incentives and other perks. Earlier, the BoI approved Petron’s application as a new export producer of benzene, toluene and mixed xylene and as a new domestic producer of propylene. The approval was subject to certain terms and conditions, which Petron said it has already complied with. Incentives Petron would be entitled to include income tax holidays and lower duties on imported capital equipment, the company said in a statement. "Our entry into petrochemicals supports our strategy of investing in higher margin businesses which will increase our presence in the regional market," Petron president and chief executive officer Khalid Al-Faddagh said. "Our focus in the next five to 10 years is to develop our refinery assets to capture the unique opportunities presented by developments in the petrochemical industry. Petrochemical demand is projected to grow at an annual pace of 5 percent between 2005 to 2015, and command better regional and local prices than petroleum products, the company said. In the six months to June, Petron’s export sales contributed nearly a third of its P2.31 billion net profit, the bulk of which came from exports of mixed xylene.
PAL starts Beijing flight on Nov. 11
Philippine Airlines (PAL) said it will start regular flights from Manila to Beijing on Nov 11, returning to the Chinese capital after a 16-year hiatus. In a statement, PAL said it will fly to Beijing and back three times a week and will use Airbus A330-300 aircraft for the first two flights, on Nov 11 and 13, to accommodate the expected number of passengers. It will soon after switch to Airbus A320s, which seat 150 passengers. PAL flew to Beijing from 1979 to 1989, when services were suspended for commercial reasons. PAL said Beijing provides a bigger platform from which to access a growing tourism market. Beijing will be the Philippine carrier’s third destination in China. It already flies to Xiamen and Shanghai.
To date, the International Container Terminal Services, Inc. (ICTSI) has invested USD$65 million on its Suape Container Terminal (SCT) in Pernambuco, Brazil and is on track in its goal to make the port achieve hub status. Recently, ICTSI spent some USD$17 million to acquire new container handling equipment and improve the terminal’s infrastructure. Subsidiary Tecon Suape, S.A. (TSSA), manager and operator of the SCT bought two new postPanamax quay cranes (QCs) and two rubber tired gantries (RTGs) manufactured by Shanghai Zhenhua Port Machinery Co. of China. In addition, the company constructed a 30,000-square meter storage area. In all, TSSA has invested USD$65 million since 2001 when it started operating the SCT. Key areas of the investments were infrastructure, equipment, information technology and manpower development. "We are commissioning new container handling equipment at the SCT to better accommodate the surging volumes in the terminal," announced Enrique K. Razon Jr., ICTSI chairman and president. "Our export boxes were up to 20 percent in August compared to the same period last year. Before the end of the year, we are expecting to handle 185,000 TEUs, a 35 percent increase from 2004," he elaborated. "We are also preparing the SCT to be the next hub port not only in Brazil but in the South Atlantic," added Sergio Kano, TSSA chief operating officer. The equipment will be operational in mid-November, making SCT the most modern in Brazil. Even now, "The terminal is fast becoming a hub for the region’s EuropeanLatin American trade," he concluded
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