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NEWS IN BRIEF
P/$ rate closes at P53.67 to $1
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The peso rate closed higher at P53.67 to the US dollar yesterday at the Philippine Dealing System of the Bankers Association of the Philippines from P53.985 the previous day. The weighted average rate appreciated to P53.769 from P53.925. Total volume amounted to $570.5 million.
RBAP, Globe remittance tie up
Rural Bankers Association of the Philippines (RBAP) and Globe Telecoms Inc. have entered into an alliance that would allow RBAP members to go into lucrative remittance business. RBAP President William Hotchkiss III said the partnership will make it convenient to the beneficiaries of overseas Filipino workers (OFWs) to receive money through mobile phone technology, text messaging. Hotchkiss said RBAP, specifically, entered into an agreement with G-XChange Inc. (GXI), a subsidiary of Globe, for the service. The alliance will allow banks to sell mobile phones are extremely low rates through the rural banks, and the bank clients can tap the same bank for a loan to pay for the mobile unit. So far, 129 banking units (43 head offices and 86 branches) have already "enrolled" in the program to market mobile phones. Each unit will cost between P3,000 to P6,000 depending on the unit model. Initially, the units to be distributed are Nokia, Sony Ericsson and Motorola mobile phones. Lizanne Uychaco, Globe vice president for the wireless group said that the units are passed to the rural banks at subsidized prices.
ICTSI tops Guam port bid
International Container Terminal Services Inc. (ICTSI) has emerged as the highest ranked offeror in the recent bidding for the Port Authority of Guam’s 10-year cargo operations contract in the Jose D. Leon Guerrero Commercial Port. In a disclosure to the Philippine Stock Exchange (PSE) yesterday, ICTSI public relations manager Narlene Soriano said that, as preferred bidder, ICTSI will be the first among three bidders to negotiate and agreement with the Port Authority to implement that terms of the proposal it had submitted. Soriano added that ICTSI has formed a new company, Guam International Container Terminal Inc. for this project. She noted that the agreement for the privatization of the commercial port will require the approval of the Guam Legislature. Soriano assured that ICTSI will make a disclosure when an agreement has been successfully negotiated with the port authority and the Guam Legislature has approved it. The Port Authority of Guam is also a client of ICTSI information technology unit Container Terminal Systems Solutions Inc. for its software — the Graphical Tracking System and the General Cargo System.
HI pays P94.6-M cash dividend
House of Investments Inc. said it has declared cash dividends totaling P94.6 million, payable on Jan. 19 next year to shareholders on record as of Dec. 22. The dividends cover the fourth quarter of 2004 and the first to fourth quarters of 2005, the company told the stock exchange.
PhilRatings rates iBank
Philippine Rating Services Corp. (PhilRatings) said it has assigned a rating of "PRS Aa minus" on medium-sized lender International Exchange Bank. It said the rating means the bank has "strong capacity to meet its financial commitments relative to that of other debtors and differs from the highest-rated corporates only to a small degree." iBank earlier announced a plan to issue up to P2.5 billion worth of unsecured subordinated debts and has appointed Deutsche Bank AG as lead manager and sole bookrunner for the issue. PhilRatings said the lender will push through with the offering in the first quarter of next year. PhilRatings said it considered the bank’s sound funding base, its adequate capital in relation to asset quality and the challenges in an industry which has become increasingly competitive, in issuing the rating. iBank is the country’s 20th biggest bank with assets of P51.9 billion as of end-2004. It has an 8.3 percent share of the commercial banking sector’s loan portfolio and 9.1 percent of the industry’s total deposit base. In 2004 it reported net profit of P523 million and its total non-performing assets to total loans stood at 23 percent, slightly above the industry average of 20.8 percent.
PLDT sets preferred dividends
Philippine Long Distance Telephone Co. (PLDT) said its board of directors has approved a P1.00 per share cash dividend on its Series H, L, M and Y 10 percent cumulative convertible preferred shares. The dividend will be paid on Jan 31 to shareholders on record as of Dec. 29. PLDT said it will also pay a dividend of $0.011438 per day for outstanding share of its Series III convertible preferred stock for the Oct. 16-Dec. 19 period. Shareholders on record as of Dec. 14 will receive the dividend on Jan. 2. The company has also declared a P4.675 per share cash dividend on its Series V convertible preferred stock for the quarter ending Jan. 15. It will be paid on Jan. 15 to shareholders on record as of Dec. 20. It will also pay $0.09925 per share to its Series VI convertible preferred shareholders and ¥10.179725 per share to Series VII convertible preferred shareholders as of Dec. 20. Payment will be made on Jan. 15.
SM Prime profit seen21% up
JP Morgan said it maintaining its "overweight" rating for mall operator SM Prime Holdings Inc., with earnings likely to rise 21 percent in next year. "Going into 2006, we continue to be positive on SM Prime’s growth and dividend prospects," JP Morgan said. SM Prime, having opened new malls this year, expects to post 8 percent to 10 percent year-on-year growth in net profit for 2005, after booking P4.6 billion in net profit in 2004. "We forecast 2006 profit growth of 21 percent, while free cash flow should peak in 2005," JP Morgan said in a research note. "Management indicates that our expectation of a 70 percent dividend payout is likely to happen, translating into a yield of 6 percent," it said. SM Prime now operates 22 malls around the country and will open its biggest yet in the first quarter of next year.
The Cityland Group has filed an application with the Securities and Exchange Commission (SEC) to issue P1.332 billion worth of short-term commercial papers (STCPs) to finance ongoing projects and settle maturing obligations.
In separate registration statements filed with the SEC, parent firm Cityland Development Corp. (CDC) proposed to issue P595 million worth of STCPs while subsidiaries Cityland Inc. and City and Land Developers, Inc. proposed to issue P610 million worth of STCPs and P127 million worth of STCPs, respectively.
The Group said proceeds of their commercial paper issuances will be used for operating expenses, project-related costs and payment of a portion of their maturing obligations.
Based on registration statements filed with the SEC, CDC has maturing obligations amounting to P1.22 billion, Cityland has P1.66 billion while City & Land has P438.7 million in maturing obligations.
Considering that the proposed STCP issuance is not more than 25 percent of their networth as of endDecember 2004 and endSeptember 2005, CDC, Cityland and City & Land are not required to have their proposed STCP issuance rated by an accredited rating agency.
Meantime parent company CDC has also filed an application with the SEC to increase its authorized capital stock from P1.2 billion to P1.9 billion. Of the increase of P700 million, an amount of P197.27 million has already been subscribed and paid in full by way of a stock dividend.
BSP seen to raise key interest rates
The Philippine central bank may continue raising its key interest rates early next year when the peso is expected to weaken against the US dollar, DBS Group Research said. "We expect the [central bank] to resume hiking interest rates as soon as the peso starts edging lower. This could happen as early as January next year, " DBS said in a research note. The central bank will hold its monthly policy meeting on Dec 15, its last for the year. It has raised its overnight interest rates three times since April by a total of 75 basis points to 7.50 percent for borrowing and 9.75 percent for lending. DBS said inflation in the Philippines is expected to remain relatively benign in the near term given the sustained strength of the peso against the US dollar and slower economic growth. Consumer prices jumped 7.1 percent in November from yearago levels, a little faster than the 7.0 percent rise seen in the two previous months and exceeding the central bank’s forecast of 6.4 percent to 6.9 percent. The economy grew at a slower-than-expected 4.1 percent year-on-year in the third quarter to September, weighed down by high oil prices, weak farm output and political uncertainties. The peso, however, has been Asia’s best performing currency, having gained around 4 percent since the start of the year. The peso rose to P53.87 to the US dollar in early trade yesterday, its best level in over eight months, still spurred by brisk remittances from Filipino workers overseas.
C&P Homes awaits capital hike OK
Property developer C&P Homes Inc. said it has not yet received the approval of the Securities on Exchange Commission for its planned capital increase. Trading in C&P shares was suspended today pending the company’s clarification of a newspaper report Saturday that said the regulator has given its go-ahead to the plan. The exchange did not say when the trading halt will be lifted. C&P has sought to hike its authorized capital to P7 billion from P500 million to cover the conversion of the company’s long-term commercial paper (LTCP) debts to new shares. C&P plans to issue a total of 3.68 billion shares to holders of LTCPs who have agreed to convert their debt into equity, and the shares will be listed at the stock exchange.
FLI sets P 1.2 B for capex
Filinvest Land Inc., a property concern, 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.
OFW remmitances to hit $10.3 B
The billions of dollars sent back to the Philippines by its huge overseas work force is a major driver for growth in the services sector, a senior official said yesterday. Overseas Filipino workers sent home a record $7.9 billion in the eight months to August, according to the economic planning ministry. Such remittances "are at all-time high and projected to hit $10.3 billion for the whole year. The amount does not include money sent outside the banking system," Economic Planning Secretary Augusto Santos said. Santos said families of overseas Filipino workers appear to be saving more of the funds sent home and while this may have accounted for some of the slowdown in the economy in the third quarter, it bodes well for future demand. Philippine economic growth slowed to 4.1 percent in the three months to September from 6.2 percent in the second quarter, the government said Monday.
VAT slapped on medical services
The Department of Finance said the value added tax on medical and legal services will be implemented strictly and doctors and lawyers who fail to remit the tax will be held liable. Earlier estimates showed that VAT on doctors and lawyers would yield additional revenues of P1.6 billion and P500 million, respectively. However, the DoF will release new estimates soon. The new VAT law, which lifted the exemptions on services rendered in the exercise of medical and legal profession, was implemented last November 1. A week later there were already reports "We require the support of taxpayers in this one," DoF Secretary Margarito B. Teves said yesterday. "Help us indicate the doctors or lawyers who will not pay their tax and those with no receipt." "To ensure that we are pro-active in helping our lawyers and doctors to follow rules, we will have to educate them on expanded VAT. We need to zero in on them so we can mobilize our BIR officers. They are liable if they do not reflect the VAT on their bill," said Teves. "We’re focusing now on making sure that we respond to the concerns of taxpayers," the DoF chief said. The government has been so wrapped up in the new VAT and its mitigating measures that attention to other exemptions has been neglected. The new VAT law lifted the exemptions in the exercise of medical and legal profession to achieve fairness in the VAT treatment across sectors.
Fitch cites RP banks’ woes
Fitch Ratings said yesterday the financial strength of Philippine banks remains constrained in a difficult operating environment, limited by their poor asset quality and weak profits. The banking sector’s consolidation after the 1997 financial crisis and even the higher capital requirements imposed on banks have not done much to strengthen the industry, Fitch said. The government’s fiscal deficit and persistent political uncertainties exacerbate this, it said. Fitch said the central bank may have implemented reforms to improve its regulatory oversight, but the monetary authority’s enforcement capabilities remain hampered "in a sector dominated by large domestic banks majority-owned by prominent Filipino business families wielding significant political influence." Fitch said the asset quality of banks remains poor, highlighting the limited success of and flaws in the Special Purpose Vehicle Act, a law passed in 2002 to address the industry’s high level of bad loans. The high level of non-performing loans and foreclosed assets among banks has continued to undermine their profitability and financial strength, the ratings agency said.
"Tamiflu" not bird flu cure — WHO
Filipinos should not panic and stockpile Tamiflu amid fears that the deadly human strain of avian influenza could infect the Philippines, a World Health Organization official said yesterday. WHO country representative Jean Marc Olive said Tamiflu was not a "dream drug" that can cure bird flu in humans but was rather a preventive drug. "Tamiflu for the moment is not necessary in the Philippines because there is no infection in human nor infection" in birds, Olive said. "We don’t know which virus will come out, so don’t focus too much on Tamiflu," Olive told reporters. Manufactured by Swiss drug maker Roche, Tamiflu eases the symptoms of flu in an infected person by inhibiting reproduction of the influenza virus. The Philippines, whose large forest cover and swamplands attract migratory birds from China, remains free of bird flu and the H5N1 strain lethal to humans that has killed over 60 people in the region since 2003. Local health authorities have warned that it is only a matter of time before the disease strikes the Philippines. Luningning Villa, an expert at the health department, said the government is discouraging people from stocking up on retroviral drugs, including Tamiflu. But she said the government may be purchasing enough "just in case there is a pandemic." (AFP)
BSP evaluates cases against banks
The Bangko Sentral ng Pilipinas is now evaluating cases against banks accused of mismanagement and violation of BSP rules, among other complaints. BSP Deputy Governor Nestor A. Espenilla Jr. said these cases will be arbitrated by the central bank’s in-house hearing panel, currently being set up on the ninth floor of the BSP Building in Malate, Manila. "(The panel) will hear complaints against banks after the MB (Monetary Board) has reviewed it," Espenilla said. "The MB will also deliberate on any appeals or reconsideration." BSP Circular No. 477 Series of 2005 is the basis for these procedures since it contain the rules on administrative cases involving directors and officers of banks, quasi-banks and trust entities. The complaints will be referred to the BSP Office of Special Investigation. In the meantime the entire proceedings will be conducted without necessarily adhering to the technical rules of judicial trials, the circular said. The panel will arbitrate cases faster than local courts normally do which is about ninety days. BSP Assistant Governor and General Counsel Juan de Zuniga said there are at least three cases under OSI review, at the moment. "The hearing panel will recommend these to the MB either for dismissal or filing of a case," he said.
ASB Holdings bares new project
ASB Holdings, Inc. is eyeing robust revenues from its newly launched project St. Francis Square, a bargain mall located in between Henry Sy’s SM Megamall and The Podium at the Ortigas Commercial Center. Edgardo Tenedero, Senior Vice President for Operations of St. Francis Square said the new commercial center is now leased by 950 tenants and will be at full capacity by next month. St. Francis Square has a total leasable space of 18,000 square meters and can accommodate up to 1,300 tenants. Depending on the performance of St. Francis Square, Tenedoro said ASB Realty may also consider putting up more bargain malls in the future. " We hope this(St. Francis Square) becomes a buy word in such a short time," Tenedoro said. The construction of St. Francis Square bargain mall has the prior approval of the Rehabilitation Receiver of ASB Holdings. ASB filed for rehab in the late 90’s due to financial troubles. Meantime in a recent development, ASB Holdings through its subsidiary ASB Realty Corp. entered into a joint venture agreement with Sta. Lucia Realty and Development Inc. for the development of a property in Sto. Tomas, Batangas. ASB Realty, together with Sto. Tomas Agri Farms Inc. (Stafi) and Novoland Development Corp., entered into an agreement with Sta. Lucia to develop a 55-hectare property in Batangas into residential and commercial subdivision. The joint venture has already been approved by the Securities and Exchange Commission. The approval, however, was subject to the condition that ASB Realty will use its earnings from the joint venture to pay its more than 700 unsecured creditors. ASB Realty expects to generate P100 million in earnings from the agreement, which will go to the asset pool of the ASB Group to settle its obligations.
ISP provider has new service
i-Manila, the first ISO-certified Internet Service Provider (ISP) in the country, recently launched iManilaOne, a personal mobile Internet service that offers premium postpaid plan at a prepaid price. The new service offers up to 20 hours of Internet connection for only P200.00 a month and charges P8.00 an hour in excess of the maximum usage, announced i-Manila President Robert Deluria. "We launched i-ManilaOne in response to the need of practical users wanting to manage their Internet expenses," he explained. "What makes i-ManilaOne the right choice for postpaid Internet users are the simple and inexpensive rates, making it ideal for those who want premium Internet service without the hassles of complicated billing schemes and high rates," the President stressed. i-ManilaOne has one email address and is backed by i-Manila’s highly reliable Internet gateway and competent 24/7 customer support. The service now offers free access from 1:00 AM to 6:00 AM daily.( EVA)
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.
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