NEWS IN BRIEF; R/$ rate closes at P51.83 to $1. (2024)

The peso rate closed higher at P51.83 to the US dollar yesterday at the Philippine Dealing System of the Bankers Association of the Philippines from P51.98 the previous day. The weighted average rate depreciated to P51.959 from P51.908. Total volume amounted to $605 million.

BSP says no forex intervention

Bangko Sentral ng Pilipinas Governor Amando Tetangco said yesterday the BSP doesnat need to intervene in the foreign exchange market to support the weak peso. "Thereas a good two-way flow in the foreign exchange market and thereas no need for intervention," Tetangco said. Some Manila traders suspected that the central bank sold a small amount of dollars in the spot currency market to smooth foreign exchange volatility. At least two traders estimated that the bank sold around $10 million at R52.10. Tetangco declined to say anything more, but dealers said his statement effectively denied market talk that the authority intervened yesterday.

20-year bonds fetch 10.228%

The government sold yesterday a treasury bond maturing Jan. 19, 2026, at an average yield of 10.228 percent at an auction yesterday. The 20-year bond fetched a coupon of 10.25 percent when it was first issued last month. Tenders for the R4-billion offering totalled R6.273 billion. The government awarded only R2.578 billion, rejecting some of the bids to prevent the yield from rising. National Treasurer Omar Cruz said the government rejected "throw away" bids. "Iam not biting on that. I donat need the money," Cruz said after the auction. Had the government accepted all bids, the 20-year average yield would have risen to 10.306 percent. Cruz said some government securities dealers were probably testing whether the government would allow debt yields to rise after Mondayas blast. Yields should continue easing, given that the market is very liquid with the Bureau of Treasury issuing less debt, Cruz said. The government plans to cancel the auction of R2 billion worth of five-year treasury bonds next Tuesday. It is also considering revising the debt offerings for March, he said. The planned changes are in view of the domestic bond exchange program launched by the government this month to create a more liquid bond market and encourage foreign investors to buy more peso debt.

S&P keeps Meralco aB-a rating

Standard & Pooras Ratings Services said it is maintaining its "B-" rating on power distributor Manila Electric Co. (Meralco), with a negative outlook, despite a recent Supreme Court decision voiding a July 2004 rate increase. But persistent uncertainties in Meralcoas operating environment may eventually result in a downward revision of the rating, S&P warned. "Standard & Pooras considers that this ruling is not expected to further erode Meralcoas weak financial position or its minimal liquidity by a significant level," the rating agency said in a statement. "However, it highlights the uncertain regulatory environment and the low predictability of tariffs charged by the company," it added. Earlier this month the Supreme Court nullified the Energy Regulatory Commissionas order approving an increase in Meralcoas generation charge to R3. 3213 per kilowatthour from R3.1886 per kWh. The court said the rate hike was approved without giving consumers any opportunity to file their comments. "Given its financial position, the companyas ability to withstand even moderately adverse developments in its business and regulatory environment is very low," S&P said.

BSP okays iBankas debt issue

The central bank has approved International Exchange Bankas (iBankas) plan to issue R2.0-R2.5 billion worth of unsecured subordinated debt to increase its capital. In a disclosure to the stock exchange, the medium-size lender also said it has appointed Deutsche Bank AG as sole lead arranger and one of the selling agents, together with Multinational Investment Bancorporation and Unicapital Inc. State-run Development Bank of the Philippines is the issueas public trustee. iBank said the debt issue will be made as soon as all requirements have been met. Earlier, Philippine Rating Services Corp (PhilRatings) said it had assigned a rating of "PRS Aa-" to iBank, which means the lender has a "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."

SMC plans Aussie unit IPO

San Miguel Corp. said yesterday it was studying proposals to list its businesses in Australia. "The company confirms that it has received proposals for possible listing of its Australian businesses," the company told the Philippine Stock Exchange in a disclosure statement. "The company is currently studying the proposals and has not made any decision yet," it added. No other details were given. The Australian Financial Review has reported San Miguel is studying a possible A$1.3 billion (US$959.4 million) public float of 49 percent of the merged National Foods-Berri dairy and fruit juice business combined with some Asian dairy assets. The daily on its online edition said Morgan Stanley is advising the Philippine company on the plan. The Australian assets were acquired amid a debt-fuelled acquisition binge launched by San Miguel to bulk up its global profile.

RP sovereign bonds ease

HONG KONG, Feb 21 (Reuters) a" Philippine sovereign dollar bond prices eased on Tuesday as political tensions ran high on coup fears and ahead of an expected mass opposition protest. A Manila-based trader said Philippine sovereign debt was a quarter point to threeeighths of a point weaker "on political noise.". Philippine 2016 bonds were priced at 106.75/107, while long-dated 2031 bonds were at 99.75/100. But Singapore-based Tim Condon, head of Asian financial market research at ING, said price dips presented a buying opportunity. "Investors are conditioned to see politics-induced price weakness a buying opportunity and our base case is that this time will prove no different," Condon said in a note. "Still, this is shaping up as an exciting week." Tensions are running high after the government said last week there was a fresh plot to overthrow and possibly kill President Gloria Macapagal Arroyo, whose popularity has waned since she survived an impeachment attempt last year over allegations of vote-rigging and corruption. The tensions drove the peso to a three-week low earlier on Tuesday before suspected dollar sales by the central bank helped the currency recover some ground. Five-year Philippine credit default swaps, which offer protection against debt default or restructuring, were unchanged at 201/205 basis points (bps).

VCO maker enters world market

A local producer of virgin coconut oil (VCO) which was believed to help cure the acquired immune desificiecny syndrome (AIDS), has penetrated the world market. CocoArk Inc., maker of "Wild Country" and "Don Pedro" brands of VCO, expects the shipments of its products to the United States and Australia to go full swing by Aprl. CoCoArk president Joey Villa disclosed that the firm is now in its final stage of negotiations with American and Australian firms that will distribute the two brands in their respective countries. "The potential of VCO to become another Philippine export winners is simply tremendous. CocoArk, for instance, is now in talks with distributors in the US and Australia for the sale of VCO in their markets," he said. Villa said the company has already shipped out some 20 dozens of VCO samples to a US firm. Aside from the US and Australia, Villa hinted at the possibility that CoCoArkas VCO may also reach Europe. The firm recently inked a deal with Rodzon Marketing Corp., (RMC) to distribute its Don Pedro VCO brand in leading supermarkets nationwide. RMC is a subsidiary of Samuya Corp. which manufactures Ludyas peanut butter and Coco Jam.

Lorenzo Shipping Corp said its board has approved an increase in the companyas authorized capital stock to 1.0 bln pesos from 700 mln pesos. The new capital will be divided into 700 mln common shares and 300 mln preferred shares, each with a par value of 1.00 peso. At present, its 700 mln-peso capital is divided into 400 mln common shares and 300 mln preferred shares. It said the capital increase will be funded through the declaration of a 25 pct stock dividend to common shareholders as of a yet-to-be-determined record date. The stock dividend will be paid in full out of Lorenzo Shippingas unrestricted retained earnings at the end of last year. The capital increase and stock dividend declaration will be submitted to shareholders for approval at its annual general meeting on June 6.

Conglomerate JG Summit Holdings Inc said in a statement it has sold an additional 21.8 mln common shares in unit Universal Robina Corp. The shares sold were covered by an over-allotment option in connection with Universal Robinaas recent primary and secondary offering. Separately, Universal Robina said Express Holdings Inc and Robinsons Supermarket Corp also agreed to sell their 53.6 mln shares and 12.2 mln shares, respectively, in Universal Robina. No other details were given. Universal Robinaas 282.4 mln primary shares and 352.4 mln secondary shares were sold to institutional investors globally earlier this month at 17 pesos each. The funds raised from the sale will be used to finance expansion of Universal Robinaas food and beverage businesses here and abroad, and improve the companyas public float.

Singapore tops Asian rents

SINGAPORE (Dow Jones) a" Prime office rents in most Asian cities rose during the last three months of 2005, led by Singapore where rents were 12.8 percent higher compared with the third quarter, according to a report by real estate consultancy Jones Lang LaSalle Inc. (JLL). Manilaas Makati followed closely with rents rising 10.8 percent on quarter, while Hong Kongas Central and Shanghaias Central Puxi region recorded gains of 6.9 percent and 6.2 percent, respectively. "With the majority of Asian economies exhibiting better-than-expected growth rates in 2005, the office market in Asia was characterized by tight supply, net new demand and expansions across most of Asia," JLL said in a statement. Only Beijing, Seoul and Jakarta showed negative growth. Rents in the Chinese capital fell 1.0% on quarter due to the large number of buildings completed during the year. Looking ahead, JLL said the thriving Asian economies would continue to support firm demand for prime office space in 2006, helped by a lack of new quality supply and continued low vacancy levels.

TPG files petition for rehabilitation

Professional Financial Plans (TPG Corporation) has filed a petition for rehabilitation with the Makati Regional Trial Court in an attempt to implement its STEP-UP Program ( Scholarsa Trust Fund with Equitable Pay-outs for Unified Preservation) at the soonest possible time. STEP-UP Program calls for preserving the companyas trust fund and reserving a portion of scholarsa availment benefits as equity in a financial holding company that will have interests in a diverse portfolio of financial services. Part of TPGas STEP-UP Program is to transform itself from a purely pre-need company into an investment holding company. This conversion will diversify TPGas business portfolio to include micro-financing and thrift banking. According to TPG, the first step in the proposed program is to preserve the companyas trust fund. It said the trust fund is preserved by redefining pay-outs where open-ended educational plan benefits will be converted into equivalent fixed value plan benefits. As the trust fund is preserved, a portion of the redefined benefits shall then be given in the form of non-cash returns. The proposed investment holding company will invest in diversified areas involving banking, financial services and others. Lastly, TPG said the planholders will then be rewarded as they will participate in the profits of the newly transformed company. In a statement the company said it is imperative for it to adopt measures now to ensure the orderly settlement not only of its present liabilities, but more so of its future obligations to planholders. "We also have to consider the welfare of waiting planholders who comprise the majority of our constituents," company Chairman and Chief Executive Officer Francisco J. Colayco said in a statement. " Our decision to seek court mandate for STEP-UP implementation became the necessary step to ensure that we achieve the objectives of STEP-UP," Colyaco added.

ADB allots $1-M for rice technology

The Manila-based Asian Development Bank (ADB) is making available a $1 million technical assistance grant to Southeast Asian countries including the Philppines for the development of water-saving rice technologies in the drought-prone and water-short region. Current rice production systems consume a high amount of water. It takes about 3,000 liters of water to produce one kilogram of rice. Irrigated non-agriculture areas, which provide 75 percent of total Asian rice production, consume 50 percent of all freshwater diversions. "This profligate usage of water in irrigated rice production is unsustainable, given the increasing demand for freshwater due to growth in rice demand and growing competition from other sectors," says Tumurdavaa Bayarsaihan, an ADB Senior Agricultural Economist. "With the present rate of water usage, even maintaining productivity in many currently irrigated areas will be difficult unless more water-efficient rice production technologies suitable for irrigated areas are developed." It was estimated that by 2025, 12 million hectares of irrigated rice may suffer from severe water shortage, with serious effects on the food security and social stability of the region. The Philippines-based International Rice Research Institute (IRRI) estimates that a 10 percent reduction in water use for rice irrigation would free 150 billion cubic meters, or 25 percent of the total freshwater used in Asia for nonagricultural purposes. The technical assistance will support the development of new water-saving rice production technologies based on improved varieties at IRRI, that will be distributed to national agricultural research centers in Bangladesh, India, Nepal, and Pakistan. These centers will further refine, evaluate, and then disseminate the developed varieties, validating them at selected target fields with the participation of farmers.

Go NeGosyo Summit slated Feb. 23

Presidential Consultant for Entrepreneurship Jose Concepcion III said that enterprises related to the services sector appear to be the easier sector that a start-up business can enter into because this is still a sunrise sector of the local economy. Concepcion said at the launch of the twin activity of the Philippine Center for Entrepreneurship (PCE): Go NeGosyo Summit and Go NeGosyo Expo this month. "But it really depends on their capital and skills," he said although he noted that enterprises such as internet cafes and others that relate to call centers are good proposition. He also noted other services industries such as the massage therapy business and other home service enterprises like plumbing are getting a fair share of attention. Such enterprises only require between P10,000 to P15,000 in capital. The Go NeGosyo Summit to be held on February 23 aims to demystify and popularize the essentials of entrepreneurial success while bringing together educators and successful entrepreneurs in one venue. The summit will feature the countryas award winning entrepreneurs. On the other hand, the Go Negosyo Expo to be held on February 24-25 is expected to showcase over a hundred business ideas, entrepreneurship shools, NGO-led programs, microlending facilities, awardwinning business plans, marketable inventions and free seminars for would-be entrepreneurs.(BCM)

Smuggling of ceramic tiles exposed

The Federation of Philippine Industries (FPI) has uncovered a disparity in the countryas imports of ceramic tiles from China as against the record of Chinaas exports of the same commodity to the Philippines. In a statement, FPI president Jesus L. Arranza said documents showed a wide disparity in the figure for the period 20022004.In 2002, the Bureau of Customs registered a total volume of imports of only 638,864 square meters of ceramic tiles for the year 2002 whereas the data obtained from China indicated a total exports to the Philippines of 3,629,355 square meters or a disparity of 2,990,491square meter of ceramic tiles. In 2003, a trend appeared when Customs registered only 397,345 square meter of ceramic tiles: Chinaas records indicated a steep high of 4,380,000 sqm or a disparity of 3,982,655 sqm of ceramic tiles. In 2004, Arranza said a dramatic change occurred because of the domestic industryas vigilance and continued networking with the BoC through the FPI. Customs registered a total of 4,359,586 sqm of ceramic tiles compared with what China actually exported to the country at 6,601,301 sqm of ceramic tiles. The trade disparity was down to 2,241,715 sqm of ceramic tiles."Citing the above trend in the importation of ceramic tiles from Chinadoes prove only one thing and that is, the validity of the IMFreport," Arranza said.

SITEL opens Eastwood City facility

SITEL Customer Care Philippines Inc. (a division of SITEL Corporation), a leading global provider of outsourced customer support services, recently opened one of its showcase facilities in Eastwood City. DTSI, (Diversified Technology Solutions International, Inc.), a leading onshore and offshore systems integrator and technology solutions and services provider, assisted in the determination of the best possible location for SITELas call center as well as managed the construction of the office space and installation of furnishings. DTSIas integrated processes and close partnerships with premiere service providers assured SITEL of the best and easiest way of building their showcase facility in the country. "DTSI was extremely well versed in dealing with vendors and getting the best deals. They chose the best price and the brightest people," said Connie Cornelius, SITEL VP for Special Projects. "I was only able to visit the site twice during the build-out. DTSI worked extremely well with remote supervision." SITEL began evaluating the Philippines for business opportunities during the last quarter of 2003 with the intent of providing a cost effective contact center model for the English speaking clients from around the world. They needed a local team that could move quickly and above all protect SITELas best interest. An estimated 25 percent savings on capital expense within the Philippines was gained by SITEL by partnership with DTSI.

Cebuana Lhuillier Services, Corp., provider of domestic remittance service Pera Padala (www.perapadala.com), continues to expand its reach as it formally forged a partnership with global money transfer service provider MoneyGram and Equitable PCI Bank (EPCIB). The partnership supports the three companiesa common thrust of providing fast, safe and reliable remittance service to its customers. MoneyGram, a leading global payment service company and an S & P MidCap 400 company, has approximately 89,000 global money transfer agent locations in 170 countries and territories. Together with EPCIB, Moneygram boasts of a strong initial customer base of overseas Filipino workers (OFW). Pera Padala on the other hand, is available in Cebuana Lhuillieras nationwide network of branches, which is open 7 days a week, has extended operating hours and has a name synonymous to stability and reliability. Attended by no less than MoneyGramas Regional Director Nick Cunnew, Business Development Manager for Asia Pacific Remas Ho, Senior Vice President Richard So, Cebuana Lhuillier Services Corporation (CLSC) President Jean Henri Lhuillier and Vice President Andre Lhuillier, the contract signing reinforces the respective companiesa commitment of quality service to customers especially to the more than seven million Filipinos working abroad. "MoneyGram customers can now benefit from the additional access points for their money remittance needs now that Cebuana Lhuillier, through Pera Padala, is a part of the MoneyGram network in the Philippines. The network of Cebuana Lhuillier provides a channel that can give fast, safe and affordable remittance service all over the country," Jean Henri Lhuillier said.

Q-Logic, one of the most dynamic, legitimate and fastest-growing direct selling companies in the country, is expanding its wings in 2006. It will open more stores all over Metro Manila and nearby provinces to address the growing needs of its active members. Q-Logic Incorporated has branches in Farmeras Plaza-Cubao, Metropolis Mall in Alabang, Starmall in Mandaluyong and three (3) more outelts in Iloilo, Davao and General Santos City. Fueled by its commitment to provide worldclass products and a decent livelihood to thousands of its members, QLogic is serious in its bid to be more competitive and at par with the "giantsa" in the industry. The company is engaged in manufacturing high-quality leather products and has been considered as trendsetter in consumer direct marketing. Established in October 2003, Q-Logic opened its flagship store in Retiro Street, Quezon City which also houses the marketing, product development, show room and logistics departments. The firmas huge warehouse is located in Bulacan where most of QLogicas leather products are manufactured and stored. The firm is backed up by two respected retailing companies that have become symbols of quality and dedication in the field of leather shoes, bags and colorful apparel.

NEW YORK, Feb. 12 (Reuters) a" US investment bank Morgan Stanley on Friday named a new chief executive for its businesses in Asia, among the fastest-growing markets for Wall Street firms. In an internal memo from Chief Executive John Mack and Co-President Zoe Cruz, the bank named Hans Schuettler, an executive who led its expansion in Europe, as chief executive of Asia. Schuettler, based in Hong Kong, will report to Morgan Stanley Asia Chairman Alasdair Morrison and Cruz. Schuettler has served as the bankas country head for Germany and more recently as co-head of investment banking in Europe. Franck Petitgas will become sole head of investment banking in Europe, while handing off his responsibilities as head of global capital markets to Colm Kelleher, the bankas co-head of fixed-income in Europe since March 2005. Kelleher will relocate to New York Morgan Stanley also said Sean Notley will now become sole head of fixed income in Europe in addition to co-head of the bankas global interest rate and currency group.

Local exporters of wood packaging materials (WPM) would be affected by new debarking requirements imposed by the the European Council (EC). WPMs imported into EU must be made from bark-free wood free from pests and signs of pests, must either be heated or fumigated with methyl bromide following the directive of ISPM 15, and must be officially marked per ISPM 15. The EC also requires WPMs to have a declared moisture content expressed as a percentage of dry matter of less than 20 percent achieved at the time of manufacture. The debarking requirement is optional in the international standard, but it will give the EU an even better protection against the introduction of plant pests and diseases. It is also in keeping with the International Standards for Phytosanitary Measures (ISPM) No. 15 on Guideline for regulating wood packaging material in international trade. The impetus for the new requirements is in the ECas desire to protect European forests from destructive foreign insect pests. There are also exemptions from the requirements. The exemptions include raw wood that is 6mm or less thick and processed wood such as oriented strand, board, particle board, plywood or veneer created using glue, heat and pressure or a combination of any.

The Manila International Airport Authority (MIAA) has sought to engage a private valuation party to assess the value of the Ninoy Aquino International Airport Terminal 3 (NAIA 3) in relation to the compensation that it has to settle with its investor, the Philippine International Air Terminals Co. (PIATCO) and eventual commercial operation. According to Favila, MIAA General Manager Alfonso Cusi has sought approval from a policy group to engage the services of an independent assessor for NAIA3. Trade and Industry Peter B. Favila said a valuation of the facility is necessary because there are still minor components that have yet to be completed. The valuation of the asset must also be done as the government is mandated by the Supreme Court to pay the developer of NAIA-3 for a "just compensation". Favila said that government is doing its best to facilitate the opening of the facility. He said the arbitration case is going on and recently the government witnesses went to Washington to attend to the case filed by Fraport Services AG, the major investor in PIATCO, against the Philippines. Favila, on the other hand, gave assurance to both the public and the business community that NAIA-3 would be in commercial operation.

Philippine Savings Bank said it expects net profit to rise to P800 million this year from P640 million in 2005 as the lender extends more consumer loans. Last yearas profit translates to earnings per share of P3.57. It also told the stock exchange in a disclosure that its non-performing loans ratio improved to 5.8 percent at end-2005 from 6.1 percent in 2004. The lender said it increased provisions for probable loan losses last year, resulting in an improved NPL coverage of 89.1 percent at end-2005 from 57.6 percent in 2004.

The Department of Trade and Industry (DTI) is investigating 50 retailers from six Metro Manila wet markets who were found selling basic necessities and prime commodities way above their estimated prevailing prices. This developed as DTI intensified its daily price monitoring as part of the crackdown on unscrupulous businessmen who are unreasonably raising the prices of basic goods because of the additional 2 percent in VAT. Trade and Industry Secretary Peter B. Favila said the 50 retailers have been summoned to explain the reason for their high selling prices when other stalls in the same market are able to sell at more reasonable prices. "We are not denying from these businesses their right to a fair return of investment. But if we find that their selling prices are unreasonable and unjustifiable, then they will be penalized for violating the Price Act," Favila said. Favila has mobilized the entire DTI to monitor prices nationwide. "We will penalize unscrupulous retailers who are taking advantage of the RVAT, and we will not hesitate to implement the law to protect the welfare of the consuming public," he warned. Undersecretary for Consumer Welfare Zenaida C. Maglaya said that DTI has already intensified its coordination with local government units, through the Local Price Coordinating Councils, for assistance in monitoring the price situation in all cities and provinces nationwide.

SEC exempts MWCas ESOP

The Securities and Exchange Commission (SEC) has exempted from its registration requirements the proposed issuance of 25 million common shares by Manila Water Company, Inc.. The shares, which will be offered at P6.50 per share, form part of the companyas proposed Employees Stock Ownership Plan (ESOP). This plan is being implemented and administered as a significant aspect of MWCas long-term merit system. According to MWC, the ESOP is only a privilege, not a right, extended to the companyas managers whereby the company allocates a percentage (not more than 3 percent) of its authorized capital stock for subscription by said personnel under certain terms and conditions stipulated in the Plan. The grantees under ESOP Plan are the employees and officers of the company ( with rank if Manger 1 and up) who may be given allocations pursuant to the companyas incentives and rewards program. The total number of employees and officers of the company who are eligible to participate in the Plan is approximately 160. MWC has two other Stock Option Plans namely: Employees Stock Option Plan (ESOP) and Executive Stock Ownership Plan (Executive SOP). MWC issued 120 million common shares under its ESOP and 23.6 million shares under its Executive SOP. Both issuances were earlier exempted from the registration requirements of the SEC. The exemption give by the SEC was in line with Section 10.2 of the Securities Regulation Code. It provides that the Commission may exempt other transactions, if it finds that the requirements of registration under this Code is not necessary in the public interest or for the protection of the investors such as by reason of the small amount involved or the limited character of the public offering.