Bank lending seen to pick up

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said bank lending is expected to pick up in the months ahead as banks are encouraged to unload their non-performing loans. He said current BSP regulations make it expensive for banks to keep their NPLs because of the high-risk weights and corresponding capital charges associated with these accounts. Demand for loans, Tetangco added, is also expected to gather steam as economic conditions strengthen and business sentiment improves on the back of buoyant equities and currency markets. "The current trend of growth in private sector credits coupled with the contraction in public sector credits could keep domestic liquidity growth at their current levels," he said. To this end the BSP will continue to monitor the level of domestic liquidity or M3, which as of November last year has reached P2.27 trillion. In the meantime, commercial bank lending rose 1.3 percent to P1.499 trillion as of October.

SLEX proposed loan for approval

The International Finance Corporation (IFC), the private arm of the World Bank, is expected to loan out million for the rehabilitation and expansion of the of the South Luzon Expressway (SLEX). IFC country manager for the Philippines Vipul Bhagat said the proposed loan is now up for approval. He added the World Bank affiliate is also in negotiations with the proponents of the SLEX project which include the Philippine National Construction Corp. (PNCC) and the South Luzon Tollways Corporation (SLTC). The SLEX is a three-phased project which involves the rehabilitation of the Alabang viaduct, the widening of the Alabang to Calamba stretch and the link-up of Slex in Calamba to the Star highway in Sto. Tomas, Batangas. To complete the project, the expressway will be extended from Calamba all the way to Lucena City. The major facelift of the SLEX costs about $ 480 million. SLTC which is tasked to implement the rehabilitation and expansion of the SLEX project is a joint venture between Hopewell Crown Infrastructure Inc. (HCII) and state-owned PNCC. HCII owns 80 percent of SLTC. Just recently, HCII took in a new majority shareholder which is Malaysian firm MTD Capital. Together with the Northeast Development and Acquisitions Corp., MTD Capital now holds controlling stake in HCII. MTD Capital is Malaysia’s second biggest toll operator managing four toll ways in the country and one in Sri Lanka. It is also engaged into highway construction such as the Kuala Lumpur to Karak highway project. It is currently constructing the RM 1.3 Billion Phase I of the East Coast Expressway project in Malaysia.

SEC okays ALI’s bond issuance

The Securities and Exchange Commission (SEC) yesterday approved Ayala Land Inc.’s proposed issuance of R252-million worth of exchangeable bonds. ALI’s bond issuance which is slated for this month will be offered primarily to the low and middle income market segment. The offering, according to ALI, brings opportunity to low and middle income earners to invest in higher yielding instruments which in the future can also allow them to own a real estate property. In a prospectus filed with the SEC, ALI said it will issue the bonds in 36 consecutive monthly series beginning on January 23, 2005 or such other date as may be agreed by the company and its issue manager and underwriter, BPI Capital Corp. ALI has made its bond offering very affordable for the low to middle-income market segment as each investor may invest in a minimum of P5,000 a series equivalent to P180,000 or a maximum of P25,000 a series equivalent to a total of P900,000. ALI expects net proceeds amounting to P242.65 million from this bond offering which will be used for general corporate purposes.

Legacy seeks capital stock hike

Legacy Homes, Inc., a subsidiary of San Miguel Properties, Inc. (SMPI) has filed before the Securities and Exchange Commission (SEC) an increase in authorized capital stock from P4 million to P700 million. Based on documents submitted to the SEC, (SMPI) will be the sole subscriber to Legacy Homes’ increase in capital stock. San Miguel Properties will subscribe P693.46-million worth of shares and will fully pay this by way of conversion of advances into equity. SMPI is the property arm of food and beverage conglomerate San Miguel Corporation (SMC). The company was formerly known as Monterey Farms Corporation (MFC). Meantime, Legacy Homes is one of the two companies incorporated by SMPI in 1995. Legacy Homes was created to engage in the development and sale of low and medium-end residential housing projects. SMPI’s other subsidiary, Excel United Land Resources Corporation, is on the other hand engaged in the development and sale of high-end real estate properties.

The Group’s primary projects include The Legacy in Las Piñas, Maravilla in Gen. Trias, Cavite, Wedgewoods in Silang, Cavite, Buenavista Homes in Jugan, Cebu, Villa de Calamba in Laguna and Primavera Hills in Liloan, Cebu. In a recent development, parent firm SMPI said it will conduct a road show in the Middle East to tap the vast market of overseas contract workers there. Other major activities in the pipeline will also include launch of corporate advertisement and project ads and revision of the existing website.

ADB okays 0-M China loan

BEIJING (XFN-Asia) — The Asian Development Bank (ADB) said it has approved a 0 million loan for wastewater treatment and water quality improvement in the Hai river basin in central China’s province of Henan. The loan will fund construction of facilities to collect and treat wastewater and to deliver clean water to 15 cities around the highly polluted Hai river basin, the ADB said in a statement. The project will also promote institutional and financial reforms and enhanced management, the ADB added. The Hai river basin, one of the three most polluted river systems in China, has been severely affected by domestic and industrial wastewater, the ADB said. Environmental infrastructure has failed to keep up with the region’s rapidly growing economy, and only 34 percent of urban wastewater in the area is being treated, despite water shortages. The project will build sewers, pump stations and treatment centers to increase collection and treatment of urban wastewater to more than 70 percent, the ADB said. The total project cost is about 0 million, half of which will be met by the ADB loan. Local bank co-financing will provide .2 million and central and local government funds will be used for the remaining .8 million. The project should be finished by the end of 2010, the bank said.

TAIPEI (XFN-ASIA) — Over eighty percent of Taiwan’s manufacturers that invested abroad last year put their money in China, a government survey shows. Of all manufacturers who invested overseas in 2005, 81.18 percent chose China as a destination, up from 72.90 percent in 2002, according to a survey conducted by the Ministry of Economic Affairs (MoEA). Respondents were allowed to make multiple choices in the survey as their investments might be in more than one location, the MoEA said. In 2005, some 17.01 percent of outbound manufacturers invested in the US, little changed from 17.14 percent in 2002. Another 15.42 percent invested in the ASEAN (Association of Southeast Asian Nations) region, down from 18.62 percent three years earlier.

SAN FRANCISCO (XFN-Asia) — Colgate-Palmolive Co said it has sold its Southeast Asian heavy-duty laundry detergent brands to Procter & Gamble Co. Colgate said the Procter & Gamble transaction, touching brands marketed in Thailand, Malaysia, Singapore and Hong Kong, includes the sale of Fab, Trojan, Dynamo and Paic. Because of the sale, two detergent dedicated factories will be closed or modified, Colgate said. Colgate said it expects the one-time net gain resulting from the Dec 31 transaction will be fully offset by fourth-quarter restructuring charges under the company’s 2004 plan. Further financial terms were not disclosed. "This sale is part of Colgate’s ongoing strategy to de-emphasize and eliminate low-margin portions of the business while focusing on our high-margin, fast-growing oral, personal and pet care businesses," Reuben Mark, Colgate’s chairman and chief executive, said in a statement. Simplifying the company’s portfolio will increase gross profit margin in the Asia/African division and will enable increased focus on the other businesses, he said.