NEWS IN BRIEF
P/$ rate closed at P53.42 to $1
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The peso rate closed at P53.42 to the US dollar last Friday at the Philippine Dealing System of the Bankers Association of the Philippines. The weighted average rate stands at P53.449.
EPCIB weighs pension funds stake
Equitable PCI Bank is considering dilution of shares worth $300-$400 million held by pension funds, banking sources said. They said bank’s board of directors would discuss this move next week to address the need to boost capital. After disputes over control and management of the bank, the Go family sold its shares to retail tycoon Henry Sy and now insiders are saying that the next to be disposed of are government shares. The Sy group now owns the Go’s 24.7 percent in the bank. Sources said the Equitable PCIB wants to raise more capital as the industry shifts to stiffer accounting and Basle 2 capital adequacy rules. If there is a capital call, state-owned equities held by Government Service Insurance System and the Social Security System might be induced to sell. But insiders said this move would trigger criticisms, especially from politicians. At the moment the pension funds are the single biggest stockholder in the bank with a 29 percent control.
Exporters crating needs eased
Exporters can now get the wooden crates they use in packaging export products fumigated or treated at least 48 hours before shipment even if there is no Bureau of Plant Industry (BPI) quarantine inspectors to witness the procedure. The ruling was announced by Aniano G. Bagabaldo, Executive Vice President of the Philippine Exporters Confederation, Inc. (Philexport), during the general membership meeting of the federations Cebu chapter. Bagabaldo told the Cebu exporters that the Export Development Council (EDC) has made representations with officials of the BPI on behalf of exporters to solve the shipment delays caused by the shortage of BPI inspectors in the Central Visayas. In response, BPI has given the green light for exporters to simply allow accredited fumigators to do their job so they can comply with global requirements that all wooden packages for export goods must undergo treatment or fumigation. The new ruling was formalized through a resolution passed this week by the Export Development Council, the semi-government body on top of export development.
Cable piracy remains alarming
Cable piracy in the country has reached an alarming level at a ratio of 1:1, or one pirate subscriber to every single legitimate subscriber, with the Philippines being ranked as second biggest in cable piracy in the region, a regional cable industry association bared. In a teleconference, Cable & Satellite Broadcasting Association of Asia (CASBAA) vice president John Medeiros said there were 650,000 pirated programming last year with an estimated cost of R3.9 billion. This equaled to the number of 650,000 declared legitimate subscription. This year, the number has grown to 835,000 pirated cable connections as against 750,000 legitimate ones. "The ratio is now 1:1 ratio, meaning 1 pirated cable subscriber to every legitimate subscriber," Medeiros said. Among the countries in the region, Medeiros said the Philippines also ranked second biggest in cable piracy. The first is Thailand and Vietnam is ranked third. But CASBAA chief executive officer Simon Twiston Davies said the Philippine situation is unique because while Thailand and Vietnam are in the top three their domestic cable industry is improving. "The Philippines is underperforming both in terms of the number of legitimate subscribers, the revenues into the Philippines and investments are also falling with the local industry going backwards," Davies said.
India hopeful on Asean FTA
KUALA LUMPUR, Dec. 11 (AFP) — India said Friday that a free-trade agreement (FTA) being hammered out with Southeast Asian countries would start in 2007, and that "sensitive" questions on agriculture and textiles would not hold back the deal. "There are concerns on both sides, there are sensitivities on both sides. It’s very natural," Commerce and Industry Minister Kamal Nath told reporters on the sidelines of the ASEAN meeting here. "There’s the issue of some textiles, the issue of some agricultural products. These are there but these are being ironed out," Nath said. "There’s no stumbling blocks or road blocks — let me put it that way." Nath said the trade agreement between India and the bloc would come into effect on January 1, 2007 and was expected to include over 1,000 products. "Negotiations are on the verge of completion," he said. India and the Association of Southeast Asian Nations (ASEAN) signed a comprehensive cooperation agreement in October 2003. Nath said trade between Southeast Asian nations and India was expected to expand by 30 percent annually for the next few years after the agreement was in place. The agreement was expected to create a large market of 1.5 billion people, with a combined present GDP of $1.2 trillion, and would cover investment and services, in addition to trade in goods.
PRULife’s credo of "listening and understanding our customers’ needs." The relocation, facilitated by the Pronove & Associates, a real estate service provider, was finalized at a contract signing recently.
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)
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.
TOKYO (AP) — Nissan’s new car paint repairs its own scratches and scrapes. Minor scruffs disappear like magic in about a week if your car has Scratch Guard Coat, a newly developed clear paint that the Japanese automaker developed with Nippon Paint Co., company spokesman Kiyoshi Ariga said Monday. The coating, which Tokyo-based Nissan Motor Co. says is the first of its kind in the world, contains elastic resin, similar to a rubbery surface, and can bounce back to repair itself of slight scratches caused by car-washing, off-road driving and fingernails. Car-washing machines account for most car surface scratches, according to Nissan, which showed before and after photos of a car with scratches on the hood and one with no scratches a week later. The coat lasts about three years, Nissan said. The scratch-proof paint job will be offered only in some Japan models of the X-Trail sport-utility vehicle, planned for sale soon, and overseas plans are still undecided, Ariga said. It may be offered in other models, but no decision has been made, he said. In terms of costs, Nissan would only say Scratch Guard Coat costs "a few tens of thousands of yen" (hundred dollars) extra.
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.
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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