May 2013 – Page 4

Gov’t on track to meeting debt, revenue goals

Economy

May 302013

Gov’t on track to meeting debt, revenue goals

MANILA, Philippines – The government is “on track” to meeting its debt and revenue goals, the Department of Finance (DOF) said, despite the first-quarter data showing new figures were actually lower than their previous year’s levels. Revenue and debt ratios – which are important gauges for credit raters – were released yesterday, following the economic performance report that showed growth hitting 7.8 percent as of March. For the first quarter, state revenues already accounted for 13.7 percent of economic output, lower than the 14.9 percent posted in the same period last year. The target has been set at 14.7 percent. Of these, tax collections were equivalent to 11.92 percent, down from 12.5 percent, but on track to meeting the 13.5-percent target for the year. Revenue and tax efforts gauge how much the government has collected as the economy expanded. Fast economic growth should mean higher revenues – and ratios – and vice-versa. Finance Assistant Secretary Ma. Teresa Habitan, in an interview, downplayed the year-on-year decrease in figures. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “It is too early to tell how our tax effort would turn out for the year based on just one quarter,” Habitan told The STAR. “We are hopeful tax collections would eventually catch up with a buoyant economy,” she added. By way of comparison, the economy grew 7.8 percent during the first quarter, while total revenues only inched up 0.9 percent. Last Monday, the government said it attained a “record-high” budget surplus of P36.803 Read More …

Lopez Group’s P12-B RE projects get BOI tax incentives

Economy

May 302013

Lopez Group’s P12-B RE projects get BOI tax incentives

MANILA, Philippines – A unit of the Lopez Group has secured tax perks for its three renewable energy (RE) projects worth P11.96 billion. “The BOI (Board of Investments) approved this month First Gen Mindanao Hydro Power Corp. (FGMHPC) as RE developer of hydropower energy resources for its three projects in Mindanao worth P11.96 billion with a total energy capacity 62.75 megawatts (MW),” the agency said in a statement yesterday. With the approval of the registration of the three projects, FGMHPC can enjoy incentives such as income tax holidays and duty-free importation of equipment for seven years as provided by the Renewable Energy Act of 2008. RE is listed as a mandatory activity in the 2012 Investment Priorities Plan. The government provides incentives to encourage firms to invest in priority activities or sectors. The first of the three projects is the 23 MW Bubunawan hydropower project worth P5.07 billion, which will be located in Bukidnon. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The project, which will have two units of turbine-generator sets, is estimated to produce an annual average of about 138 gigawatt hours (GWH) of electrical energy with a maximum annual generation capability of about 201 GWH of clean and renewable energy. The project is expected to provide jobs to up to 45 personnel. The second project worth P1.803 billion will be situated within the Cabadbaran town of Agusan del Norte. The project, which will involve the construction and installation of up to three units of 3.25 MW Read More …

Ayala conglomerate raises P3.3B via treasury shares

Economy

May 302013

Ayala conglomerate raises P3.3B via treasury shares

MANILA, Philippines – The country’s oldest conglomerate Ayala Corp. (AC) took advantage of liquidity in the equity market to raise P3.3 billion in fresh capital for its power and infrastructure projects. In a regulatory filing, AC said it completed the sale of 5.18 million common shares held in its treasury. “This raised cash proceeds of approximately P3.3 billion, which AC intends to use to fund existing and potential sizable projects in the infrastructure and power sectors,” AC said. “This new funding will further strengthen our balance sheet to build up our portfolio in these two sectors,” said AC president and chief operating officer Fernando Zobel de Ayala. At P647 per share, AC’s shares were sold at a three percent discount compared with the previous closing price of P667. The conglomerate earlier announced that is looking to invest up to $1 billion over the next five years for the capital intensive but high-yielding power and infrastructure sectors. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 “We hope to be able to contribute in some measure to the development of these sectors and at the same time create future sources of earnings and value for the group,” Zobel said. In the last two years, AC has committed more than $300 million of equity on power projects with roughly 900 megawatts (MW) of gross generating capacity. “It is looking to increase its equity commitment to $500 million to $600 million in the next 12 to 18 months,” AC said. Given its bullishness Read More …

Phl jumps 5 places in competitiveness

Economy

May 302013

MANILA, Philippines – The Philippines saw its competitiveness ranking move up by five places to reach the 38th spot in this year’s IMD (International Institute for Management Development) World Competitiveness Report from the 43rd place last year due to improvements in terms of its economic performance, government efficiency and business efficiency. Citing the IMD World Competitiveness Report which covered 60 countries, the National Competitiveness Council (NCC) said the Philippines’ improved ranking was due to gains seen in three out of four major factors being monitored by the report. In particular, the Philippines made improvements in terms of economic performance (from 42nd to 31st), government efficiency (from 32nd to 31st), and business efficiency (from 26th to 19th). The report noted that the improvement in economic performance could be attributed to big gains in real Gross Domestic Product growth, expansion in export of goods and international trade. In terms of government efficiency, gains in fiscal policy and institutional framework were noted. While the Philippines showed progress in its rankings in three factors, its place in the infrastructure factor dropped to the 57th spot this year from last year’s 55th spot. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Despite the drop in the ranking for the infrastructure sector, the NCC said the government’s move to implement infrastructure projects is expected to result in an improvement in the ranking moving forward. “Increased infrastructure rollouts and improved efficiency in the PPP (public private partnership) rollouts are expected to improve performance in infrastructure,” it Read More …

Peso up from 11-mo slump

Economy

May 302013

MANILA, Philippines – The peso recovered yesterday from its 11-month slump against the dollar as investors cheered the better-than-expected first quarter economic growth rate. The local unit closed 42.32 against the dollar, 12 centavos stronger than the previous day’s 42.44, which was the weakest since June 2012. Dollars traded reached $1.112 billion, up from Wednesday’s $1.057 billion. “Basically, the strength was due to local story of a strong GDP (gross domestic product) growth that was well above market expectations,” a trader at a local bank said in a phone interview. Driven by consumption and investments, the economy grew by a surprising 7.8 percent for the first three months, the fastest in three years, and beating market consensus of just about six percent. The result was also well-above the official six to seven-percent growth goal for the year. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Emilio Neri Jr., an economist at the Bank of the Philippine Islands, said investors would likely continue purchasing the peso, thereby boosting its strength versus the US dollar, “in the near-term.” “The Philippine peso may see some appreciation pressure in the near-term after its sharp slide in the past week as dealers were likely surprised by the strong GDP print,” Neri said in a research note. The peso, Asia’s second best performer last year, has lost more than three percent since the end of last year. This was the second straight day it traded at 42-level versus the greenback this year. While good news Read More …

Growth report fails to lift stock market

Economy

May 302013

Growth report fails to lift stock market

MANILA, Philippines – Massive selldown by fund managers, surprisingly following the announcement of robust first quarter Philippine economic growth, weighed down heavily on the main index, which recorded its largest single-day loss in history. The benchmark Philippine Stock Exchange index (PSEi) suffered a bloodbath yesterday, plunging 3.81 percent or 275.22 points to 6,953.35. It is the largest single-day loss in the bellwether index, eclipsing the 263.84-point drop on Feb. 28, 2007. “Concerns about US Federal Reserve scaling back its quantitative easing overshadowed the surprising gross domestic product (GDP) data,” Freya Natividad, analyst at online brokerage firm 2TradeAsia.com, said in a phone interview. Philippine GDP surged a higher-than-expected 7.8 percent in the first quarter, driven by the construction and manufacturing industries. “A string of negative leads sent global stocks on yet another tailspin only a day after it posted a strong comeback off a four-session slump,” said Justino Calaycay Jr., analyst at Accord Capital Securities. He said there were also questions over European and China’s growth, adding to the gloomy sentiments. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 In the US, Wall St. succumbed to worries that the Fed will pull out its stimulus program given an economic recovery. The Dow Jones industrial average declined 0.69 percent or 106.59 points to 15,302.80 while the broader Standard & Poor’s 500 index slipped 0.7 percent or 11.70 points to 1,648.36. Asian stocks such as Japan’s Nikkei 225 that sank 5.15 percent or 737.43 points to 13,589.03 were also sold down by Read More …

SMC, Lamco groups pay appeal fee for MRT-LRT ticket project

Economy

May 302013

SMC, Lamco groups pay appeal fee for MRT-LRT ticket project

MANILA, Philippines – The Department of Transportation and Communications (DOTC) is set to look into the appeal filed by diversified conglomerate San Miguel Corp. (SMC) and Lamco Consortium that were disqualified from the bidding of the P1.72 billion automated and contactless single ticketing system for the Metro Rail Transit (MRT) and Light Rail Transit (LRT). Michael Arthur Sagcal, spokesperson of DOTC, said SMC and Lamco paid the appeal fee amounting to P8.6 million each as stated under the implementing rules and regulations of the Build Operate Transfer (BOT) law. The non-refundable appeal fee is equivalent to 0.5 percent of the total project cost as provided under the BOT law. Sagcal said Lamco paid the appeal fee last May 27 while SMC settled the amount last May 28. The DOTC has issued Special Bid Bulletin 05-2013 giving disqualified bidders of the Automated Fare Collection System (AFCS) project 15 days from the receipt of the notice of disqualification that were issued last May 7 to file an appeal and pay the non-refundable fee of P8.6 million. Another losing bidder, the MTD-PRLM consortium, failed to pay the appeal fee. The Mega Lucky United Consortium was also disqualified by the DOTC. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 SMC submitted qualification documents to the DOTC last April 12 through San Miguel Transport Solutions Consortium composed of Optimal Infrastructure Development Inc., Catchweight Holdings Inc., Deltacrest Holdings Inc., and Allcard Plastics Philippines Inc. to bid for the project. Its partners include Petron Corp., Philippine Read More …

Motorola to make first US-assembled smartphones

Economy

May 302013

Motorola to make first US-assembled smartphones

AUSTIN, Texas (AP) – Cellphone pioneer Motorola announced Wednesday that it’s opening a Texas manufacturing facility that will create 2,000 jobs and produce its new flagship device, Moto X, the first smartphone ever assembled in the US. The company has already begun hiring for the Fort Worth plant. The site was most recently unoccupied but was once used by fellow phone manufacturer Nokia, meaning it was designed to produce mobile devices, said Will Moss, a spokesman for Motorola Mobility, which is owned by Google. “It was a great facility in an ideal location,” said Moss, who said it will be an easy trip for Motorola engineering teams based in Chicago and Silicon Valley, and is also close to the company’s service and repair operations in Mexico. The formal announcement came at AllThingsD’s D11 Conference in Rancho Palos Verdes, Calif., from Motorola CEO Dennis Woodside. Texas Gov. Rick Perry’s office administers a pair of special state incentive funds meant to help attract job-creating businesses to the state, but Moss said the Republican governor did not distribute any money to close this deal. “Motorola Mobility’s decision to manufacture its new smartphone and create thousands of new jobs in Texas is great news for our growing state,” Perry said through a spokeswoman. “Our strong, healthy economy, built on a foundation of low taxes, smart regulation, fair legal system and a skilled workforce is attracting companies from across the country and around the world that want to be a part of the rising Texas Read More …

Erap must revive Manila

Economy

May 302013

Many have observed that becoming mayor of Manila is Erap’s last hurrah. It may well be just that and because of it, there is a lot at stake in terms of legacy issues in the next three years of Erap reigning supreme at Manila City Hall. Winning the election was the easy part, even if the homestretch proved to be more of a cliffhanger than most people thought. But as Dolphy once said, what do we do after we have won? For someone like Erap who had once been president of the country, vice president, senator and mayor of San Juan for the longest time, there should be nothing more to prove. But the abbreviated term of Erap in Malacañang and the corruption trial and eventual conviction and instant pardon make it necessary for Erap to prove himself all over again. If Erap failed to be the best president we ever had, he now has the opportunity to be the best mayor Manila ever had. If he manages that, maybe all will be forgiven, so to speak. He would have shown the world that what happened during EDSA 2 was undoubtedly a big and terrible mistake. Making something out of this opportunity to revive the City of Manila is a chance of a lifetime for Erap. Not many politicians are given a second chance in this grand manner. The challenges of reviving Manila can be as difficult and complicated as running the country, but maybe not as impossible. The basic Read More …

SMC secures $1-B loan to pay debts

Economy

May 302013

MANILA, Philippines – Diversified conglomerate San Miguel Corp. (SMC) has secured a $1-billion loan from five banks to pay off its existing debts. Another $200 million will be tapped to maximize available funding under a $1.3-billion, five-year loan agreement, SMC said in a disclosure yesterday. “The company availed of a $1.3-billion facility loan agreement, which includes a greenshoe option,” SMC said. “To date, of the total amount available under the facility, the company has drawn $1 billion to pay in full and refinance its existing $1-billion loan,” it added. SMC earlier tapped Australia and New Zealand Banking Group Ltd., DBS Bank Ltd., Deutsche Bank AG, Bank of America Merrill Lynch and Standard Chartered Bank for a loan agreement. “The company intends to avail of an additional $200 million through the exercise of the greenshoe option under the facility,” SMC said. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 The diversified conglomerate has been paring its debts through new loans that offer better terms. In April, SMC generated $800 million from the largest issuance of a dollar-denominated bond by a Philippine company. It forms part of a $2-billion medium-term notes program of SMC. The holding firm is undergoing a five-year, $34.83-billion investment program that will make it the largest investor in the Philippines. The conglomerate said it will spend an average of P283.52 billion every year until 2017. From its core brewery and food business, SMC has expanded into power production (SMC Global Power Corp.), downstream oil sector (Petron Corp.), Read More …

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