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Lawmakers move to spare infrastructure from poll ban as 2019 budget talks get back on track

By Charmaine A. Tadalan and Camille A. Aguinaldo
Reporters
LAWMAKERS making up the bicameral conference committee now hammering out the final version of the proposed P3.757-trillion national budget for 2019 have committed to ensuring ratification next week, with the measure containing a provision that would spare new infrastructure projects from the 45-day public works ban ahead of the May 13 mid-term elections.
Despite initial disagreements that prompted Senate President Vicente C. Sotto III on Wednesday to threaten to pull out of the talks, House of Representatives Appropriations committee Chairman Rolando G. Andaya, Jr. of Camarines Sur’s 1st district told reporters, when asked on budget ratification timetable: “Feb. 6 is still the deadline, contrary to some rumormongers na magkaka-reenacted tayo (that we will have a reenacted budget).”
Both bicameral committee camps had targeted to approve the proposed 2019 national budget at their level on Jan. 30.
In a statement on Thursday, Senate President Pro Tempore Ralph G. Recto said senators have included a provision under the budget bill’s General Provisions that read: “Notwithstanding the provisions of any law to the contrary, infrastructure projects funded under this Act shall be exempt from the prohibitions against release, disbursement or expenditure of public funds and against construction of public works and delivery of materials for public works.”
The Department of Budget and Management (DBM) had hoped for 2018 year-end enactment of the 2019 national budget in order to front-load spending ahead of the election ban on public works and the rains that usually come in the second semester.
“Both people and progress lose if the building of facilities that they need will stop during the campaign period, more so if the latter coincides with summer — which is the best time, weather-wise, for construction,” Mr. Recto said.
“With the delay in the enactment of 2019 national budget, the above exemption provision is needed for government to catch up with its ‘Build, Build, Build’ timetable.”
The Omnibus Election Code or Batas Pambansa Bilang 881 prohibits the government from disbursing public funds as well as delivering materials for public works 45 days before a regular election. For the May 13 mid-term elections, the ban on public works will run from Mar. 29 to May 12.
Socioeconomic Planning Secretary Ernesto M. Pernia said last Monday that state economic managers will ask the Commission on Elections (Comelec) to exempt new big projects from the public works ban, while Finance Secretary Carlos G. Dominguez III said last week that the budget delay will affect P46 billion worth of projects.
The National Economic and Development Authority (NEDA) expects a reduction of 1.1-2.3 percentage points in full-year gross domestic product (GDP) growth if the 2019 budget is not passed at all. According to the Philippine Statistics Authority, the country’s GDP grew by 6.2% last year, lower than the 6.5-6.9% downward-revised 2018 target of the government. For 2019, the government has kept its 7-8% growth target.
FUNDING NO LONGER FOR A YEAR
In the bicameral conference committee meeting on Wednesday night, Mr. Andaya proposed to do away with the cash-based budget framework for capital outlays and maintenance and other operating expenses (MOOEs) in the 2019 national budget that would have limited funding to procurements that can be done within the fiscal year.
“We are now proposing to abandon the one-year cash-based system, as proposed in the National Expenditure Program,” Mr. Andaya said.
“We proposed that the life of the appropriations cover, be extended to two years, as we usually do for capital outlays and MOOE.”
Senator Loren B. Legarda, who heads the Senate’s Finance committee, and Senate Minority Leader Franklin M. Drilon said in the same meeting that they were “inclined” to accept the proposal in the light of the election ban.
Mr. Drilon said “to adopt a cash-based budgeting this year is extremely difficult because it is an election year, one; and number two, we are delayed in the enactment of the budget.”
“So, if we insist on the cash-based budget, you have barely six months to implement a project and get paid. It’s simply impossible.”
Ms. Legarda likewise, said she is in favor of Mr. Andaya’s proposal. “I want this budget passed and I will not be difficult with the House, but I have to consult with my colleagues to give way completely or to hybrid [sic] it,” she said. “That’s a pending matter which I’m sure will not be a deal-breaker for the budget.”
Senate President Vicente C. Sotto III said in a mobile phone message on Thursday: “I’ll leave that to the recommendation of our Finance chair.”
Ms. Legarda said she will meet with Mr. Andaya on this matter over the weekend.
Sought for comment, University of Asia and the Pacific-School of Law and Governance Professor Natividad Cristina J. Gruet said the proposed shift back to a two-year procurement framework under an obligation-based budget could slow spending that is otherwise “crucial” for President Rodrigo R. Duterte’s “Build, Build, Build” infrastructure development program. “Certainly, it will slow down even further the spending,” Ms. Gruet said in a telephone interview. “As far as the impact on the economy is concerned, we may not be able to feel it immediately just like any other projects, but it will cause further delays and might eventually also create headache for the future administration.”
Also on Wednesday, Mr. Andaya said the case against Budget and Management Sec. Benjamin E. Diokno before the Supreme Court, to force him to implement the remaining tranche of the Salary Standardization Law, may become moot and academic.
“It’s refreshing to know that DBM now will give the fourth tranche of the salary increases, notwithstanding our waiting for the budget to be passed. I think if that pushes through, as revealed by Senator Loren Legarda… that will render our petition for the Supreme Court moot and academic,” Mr. Andaya told reporters in a briefing after the committee meeting.
Ms. Legarda told bicameral conference committee members on Wednesday night that she got DBM’s assurance that funding for the mid-term elections will be taken from the P10-billion unutilized fund and Contingency Fund of the Commission on Elections, while funding for the final salary standardization tranche will come from the miscellaneous personnel benefits fund.
The current 17th Congress goes on a Feb.7-May 19 break and will have its last session days to work on remaining bills on May 20-June 7. Any measure that is not enacted by the end of that period will have to be filed again as a bill in the new 18th Congress that starts on July 22 with President Rodrigo R. Duterte’s State of the Nation Address.

Dec. growth of money supply picks up, bank lending eases

MONEY SUPPLY grew faster in December amid the holiday cheer even as the pickup in bank loans eased anew, the Bangko Sentral ng Pilipinas (BSP) reported on Thursday.
M3 — the broadest measure of money circulating in an economy — expanded by 9.2% year-on-year to P11.612 trillion, faster than the upward-revised 8.5% recorded in November.
Money supply went down by 0.2% on a month-on-month seasonally adjusted basis. Still, that was the fastest pace clocked since September.
Credit demand fueled faster growth of money supply in the local financial system, the central bank said in a statement.
Domestic claims grew at a steady 14.6%, matching the previous month’s pace, as more private firms secured loans from banking sector, while net claims on the national government surged by 16.4% in December versus the previous month’s 12.2% climb.
Net foreign assets expressed in pesos edged up by 1.3% year-on-year, turning around from a 3.2% decline recorded in October. This was largely due to an increase in the BSP’s dollar reserves, which ended the year at $78.461 billion.
On the other hand, banks’ foreign assets declined anew from a year ago due to higher loans and investments in debt papers.
The faster liquidity growth came amid the holiday season, and as the Monetary Board kept interest rates steady at the 4.25-5.25% range after five consecutive hikes meant to temper inflation expectations.
Some market players noted that money supply was “tight” late last year, but central bank officials said that the tightness was temporary and that there are enough funds in circulation.
SOFTER LENDING
Bank lending growth decelerated anew in December amid softer demand from both consumer and corporate borrowers.
Outstanding loans grew by 15.6% that month, sliding from a 16.8% pace in November. Month-on-month, total lending still climbed by a modest 0.3%.
Computed to include reverse repurchase agreements, bank lending growth softened to 14.7% from 15.4%.
Production loans still accounted for bulk of credit at roughly 88.8%, even as growth slowed to 15.8% from 17.2% the prior month.
Loans for construction still posted the biggest rise at 35.9%, followed by financial and insurance activities (30.6%); wholesale and retail trade, repair of motor vehicles and motorcycles (15.2%); and manufacturing (13.1%). Other industries received bigger loans during the period, the BSP said.
Growth of consumer loans also slowed to 13.5% from November’s 13.8%. This came on the back of a decline in salary-based borrowings and other types of retail credit, together with a slower pickup in motor vehicle loans. At the same time, credit card loans went up during the period.
The BSP said that monetary authorities will continue to ensure that credit and liquidity growth will prop up economic activity.
The government targets overall economic growth to reach 7-8% this year, following a disappointing 6.2% finish in 2018. — Melissa Luz T. Lopez

ISM mulls follow-on offering this year

By Arra B. Francia, Reporter
ISM Communications Corp. said it may conduct a follow-on offering within the year depending on market conditions, following the entry of Davao-based businessman Dennis A. Uy’s group that would transform the firm into Udenna Holdings Corp.
“This year is definitely a possibility…. if the market were accepting of issuance, then the probability will be higher,” ISM Chairman and Chief Executive Officer Eric O. Recto told reporters after the company’s special shareholders’ meeting in Makati on Thursday.
Shareholders of ISM approved during the meeting the share swap between ISM and Mr. Uy’s Udenna Corp., wherein ISM will issue 24.07 billion shares at P3 each to the shareholders of Udenna, in exchange for a 100% equity interest in the latter.
They also approved the proposal to change the company’s corporate name to Udenna Holdings. It will then serve as Mr. Uy’s holding firm for his businesses in fuel and oil, logistics, real estate, infrastructure, education, and food.
The same meeting saw the approval of ISM’s proposal to increase its authorized capital stock to P75 billion, consisting of 75 billion common shares with a par value of P1 each.
After the share swap, Mr. Recto said the company’s public float would hit around 10%, which is currently the minimum public float for listed firms.
Asked whether they will target to increase the company’s public ownership, Mr. Recto said they are targeting between 15-20%.
“Anywhere from 15 to 20% should be a comfortable public float but that all depends on follow-on, etc. If the market is very buoyant at the time we decide to go out, then we may decide to float it and issue more shares,” Mr. Recto explained, adding that it would still depend on regulators’ approval.
The ISM executive said that the company had been in discussions with other potential partners before finally choosing Udenna, noting that it had “the most exciting set of prospects.”
“I personally have seen the prospects that the various businesses that Udenna Corp. presents, that have been very, very compelling,” Mr. Recto said.
A known ally of the president, Mr. Uy has been on an acquisition spree ever since President Rodrigo R. Duterte assumed his role in 2016. Mr. Uy, who also owns Phoenix Petroleum Philippines, Inc., was able to list his shipping and logistics firm, Chelsea Logistics Corp., in 2017.
He has then gone on to acquire hospitality and culinary school Enderun Colleges, the local unit of convenience store chain FamilyMart, and Conti’s Bakeshop and Restaurant.
Mr. Uy’s latest venture is in the telecom industry, after the Mislatel consortium — Udenna’s partnership with China Telecom — won the spot for the third telco provider in the government’s bidding process late last year.

A Valentine from Ogie and Mr. C


FOR SONGWRITERS, experience is an essential ingredient when composing a great love song.
OPM singer-songwriter Ogie Alcasid and composer and National Artist for Music Ryan Cayabyab will take audiences back to some romantic memories such as their first date, first kiss, or wedding day, in a Valentine’s Day concert.
“Our work is our life and vice versa. So, whatever we go through is reflected in our work,” Mr. Alcasid said about songwriting.
Likewise, Mr. Cayabyab — who joins the concert as musical director — agreed. “The best thing is for the writer to have experienced a little bit of that,” he said. For those who have little experience in love, he said: “We turn to our friends or we write stories based on those.”
On Feb. 14, Mr. Alcasid will perform his romantic classics in a concert called Master of Love at Resorts World Manila’s Newport Performing Arts Theater in Pasay City.
“When I do Valentine’s concerts, I really want to do other stuff but people keep asking for the same thing… They want to hear old tunes [and] familiar tunes,” Mr. Alcasid at last week’s press conference at the Newport Mall in Pasay City.
“I think it’s more than the music. Meron siyang (it has) additional entertainment package. This guy is so funny and spontaneous,” Mr. Cayabyab said referring to Mr. Alcasid’s style of performing.
“Every time I work with Ogie, it’s Ogie who chooses his materials. Nagbabatuhan lang kami ng (we just throw at each other the) style of arrangements,” Mr. Cayabyab told BusinessWorld shortly after the press conference.
Aside from Mr. Alcasid’s popular hits, the concert’s repertoire includes hits from Basil Valdez, Hajji Alejandro, and the late Rico J. Puno.
The Ryan Cayabyab Singers, Mariel de Leon, Lara Maigue, and Tanya Manalang are special guest performers.
Tickets to Master of Love are available at TicketWorld (www.ticketworld.com.ph) and the RWM Box Office at Resorts World Manila’s Newport Mall. For inquiries, call 908-8833.— Michelle Anne P. Soliman

Solid Cement gets BoI go signal

A UNIT OF Cemex Holdings Philippines, Inc. (CHP) has secured the Board of Investments’ (BoI) approval as a new cement manufacturer.
In a disclosure to the stock exchange on Thursday, CHP said the BoI recognized its wholly-owned subsidiary Solid Cement Corp. as a new producer of cement, giving its new integrated cement production line in Antipolo City, Rizal pioneer status but with non-pioneer incentives.
The Antipolo facility has a capacity of 1.5 million metric tons per year.
The BoI declares a preferred area of investment as pioneer when it involves the manufacturing of processing of goods or raw materials that have not been produced in the country on a commercial scale; when it uses a design, formula, scheme, method, process or system which is new and untried, and conforms to the annual investment priorities plan, among others.
Meanwhile, getting non-pioneer incentives indicates that the company is exempted from paying income taxes for four years from the scheduled start of operations.
The listed cement manufacturer announced in 2018 that it will be spending about $235 million for the construction of the new production line. It engaged China’s CBMI Construction Co., Ltd. for the procurement, construction, and installation of the project.
The new production line is expected to increase CHP’s cement capacity by 26% in the country. Operations are scheduled to commence by the fourth quarter of 2020.
Solid Cement currently has an annual capacity of 1.9 million metric tons, serving the cement requirements of the National Capital Region and Souther Luzon.
CHP is the local unit of Mexican cement and construction materials company Cemex S.A.B. de C.V. The company’s cement products are sold under three brands, namely Island and Rizal for Luzon, and APO for the Visayas and Mindanao region.
The company booked an attributable loss of P604.7 million in the first nine months of 2018, versus a net income attributable to the parent of P687.98 million during the same period a year ago. It attributed the losses to higher input costs due to inflation and shutdown-related expenses.
Gross revenues stood at P17.91 billion, eight percent higher year-on-year. — Arra B. Francia

Jon Santos: Politics, entertainment, and more


OFTEN newspapers and online news outlets carry the president’s careless remarks on national issues which the Palace then dismisses as a joke. Last year, impersonator and comedian Jon Santos expressed used these issues to perform political satire, and this year he’s at it again.
I Can DOTHIRTY! Da Jon Santos Thirtieth Anniversary Show, an original satirical live act which Mr. Santos co-wrote with Enrico Santos and Joel Mercado, and which is directed by Michael Williams, will be staged at Resorts World Manila’s Newport Performing Arts Theater in Pasay City on Feb. 13.
The show will feature Mr. Santos as “MacDonald Trump” and “Digong Duterthirty-hari.”
TRYING OUT DIGONG JOKES
Ditching his colorful costumes, Mr. Santos went onstage in an all-black casual outfit topped by a fedora hat during the press conference at the Newport Mall’s El Calle Food and Music Hall. He proceeded to perform a stand-up comedy spiel which ran for 23 minutes, a sampling of the voices of the personalities in government.
He recalled taking the risk of mounting a show of political satire about the current administration, Trumperte, with last year. It had performances in May and October.
“Tignan natin kung pwede akong mag-Digong jokes ng May 12. Kung sa 13 buhay pa ako, that means okay lang. (Let’s see if I could do Digong jokes on May 12. If I’m still alive on the 13th, then it’s okay). Let’s do this again,” Mr. Santos said during his spiel.
It took him two years after the 2016 elections to work up the courage to comment on the current political climate. “Ang confidence level ko to tackle these two very controversial characters leveled up. I had a feeling that the country was so divided,” he added, saying that when he does these shows, half of the theater is angered by jokes while other half is laughing. “Matindi ang pagka-opinionated ng both sides (both sides are so opinionated).”
For the Feb. 13 show, he will also do his impersonations of Mocha Uson, Senator Leila de Lima, and former First Lady Imelda Marcos in order to make funny commentaries on the Philippine political landscape.
Joining Mr. Santos are comedians Eric Nicolas and Marissa Sanchez who will do impersonations of popular entertainment figures and celebrate the lighter side of Pinoy pop culture.
The show is meant to be both entertaining and relatable since issues such as inflation, immigration, and peace and order resonate with the audience. “You will realize that there is something that unites us… [kahit] saan man panig ka (regardless which side you’re on), you have feelings about it,” said Mr. Santos.
“Doon lang lumakas ang loob ko nung na-realize ko na may common ground na tatawanan nating lahat (Only then did I work up the courage, when I realized that there is common ground that we can all laugh about).”
Tickets to I Can DOTHIRTY! are available at TicketWorld (www.ticketworld.com.ph) and the RWM Box Office at the Newport Mall, Resorts World Manila. For inquiries, call 908-8833. — Michelle Anne P. Soliman

Aboitiz unit secures P206-million contract

THE CONSTRUCTION arm of Aboitiz Equity Ventures, Inc. has secured the P206-million contract to design and construct an overhead transmission line for another Aboitiz-led company, Lima Enerzone Corp.
In a statement issued on Thursday, Aboitiz Construction, Inc. (ACI) said the 69-kilovolt transmission line will be for the Lima Technology Center, and will span 64 kilometers across Batangas City up to Lipa City.
The project is seen to increase reliability, ensure continued power supply, mitigate unwanted power outages, and address systems losses, according to Lima Enerzone Chief Operating Officer Dante T. Pollescas. He noted that it will ultimately benefit the locators in the industrial zone.
“We are excited to partner with ACI, which committed to finish construction before the target date,” ACI quoted Mr. Pollescas as saying in a statement.
Lima Enerzone operates the distribution system of Lima Land, Inc., an economic zone in the Lipa-Malvar area registered under the Philippine Economic Zone Authority. It is one of four electric distribution utilities under Aboitiz Power Corp. that operate the distribution system of a specific economic zone.
ACI President and Chief Operating Officer Albert A. Ignacio noted that the project will expand the firm’s foothold in the power construction market. The Lima project will allow ACI to undertake the entire scope of work — starting from design to construction of the substation, switchyard, and maintenance-related work of high and low voltage power lines.
“We thank Lima Enerzone for the trust and confidence. This has actually opened doors for us and as we speak, we are talking to potential client for a bigger transmission line project. What we have here is a synergy of two companies that can go a long way,” Mr. Ignacio said in a statement.
ACI started efforts to expand its geographic reach and services last year, with the incorporation of an international subsidiary called Aboitiz Construction International, Inc.
The company earlier said it was in talks with some Chinese engineering, procurement, and construction companies. It looks to be engaged as either joint venture partners or major subcontractors for the projects the Chinese firms will be developing in the Philippines.
ACI projects in the pipeline also include a power plant in Sarangani, a petrochemical plant in Bataan, a shopping mall called The Outlets in Lipa, Batangas, and fabrication works for a Korean and Japanese firm, among others. — Arra B. Francia

Hotel Sogo targets to have over 50 branches by 2020

HOTEL SOGO is expanding its branch network.

HOTEL SOGO aims to have more than 50 hotel branches in the Philippines in 2020, according to its parent company.
Maria Suzette Geminiano, marketing director of Global Comfort Group Corp., said on Monday the company is planning to widen the hotel’s footprint in the country to 55-60 branches by 2020. There are currently 39 Hotel Sogo branches.
While there are plans to expand overseas, she said the company will pursue these after the Philippine expansion.
“Actually, ‘yung [in] 2020, we are really targeting 55 hotels to 60, Philippines lang [only]. May ibang plans for Asia Pacific [There are different plans for Asia Pacific], pero [but] after 2020. We are already strengthening our backbone, ‘yung tinatawag na [the one called] skeletal force… kasi [because] we really want to be available globally, but that will come after,” Ms. Geminiano told BusinessWorld after the company’s press conference at Eurotel Vivaldi in Cubao, Quezon City.
Aside from Hotel Sogo, Global Comfort Group also operates brands such as Icon Hotel and Eurotel.
Among its corporate social responsibility programs is Doctor on Wheels, which was started in late 2015. The company provides medical assistance such as medical consultations, and laboratory examinations.
Ms. Geminiano said more than 5,700 families in provinces such as Iloilo, Bicol, and Cagayan De Oro have benefitted from its Doctor on Wheels program.
“If you want to invite Doctors on Wheels in your barangays… we can accept request from the barangay through our branches nationwide. You can pass the letter of request to the hotel manager… [who] will endorse the letter to us and we will be the one to have it approved in the management,” Joana Balitaan, CSR supervisor of Hotel Sogo, said during the press conference. — Vincent Mariel P. Galang

Goodbye Hello: Unseen Beatles footage becomes movie project for Peter Jackson

LONDON — Lord of the Rings director Peter Jackson is making a movie about The Beatles with previously unseen studio footage, the band’s website said on Wednesday — 50 years to the day after the Fab Four performed live together for the final time.
The Oscar winner will work with some 55 hours of never-released video of John, Paul, George and Ringo as they worked on their Let It Be album in January 1969.
The footage, plus 140 hours of audio, “ensures this movie will be the ultimate ‘fly on the wall’ experience that Beatles fans have long dreamt about,” Mr. Jackson said in a statement.
“It’s like a time machine transports us back to 1969, and we get to sit in the studio watching these four friends make great music together.”
Mr. Jackson last year released a World War One documentary using decades-old frontline footage, to rave reviews.
The Let It Be album and film were released in May 1970, after The Beatles broke up, and the unseen footage had originally be planned for a television program.
“Sure, there’s moments of drama — but none of the discord this project has long been associated with,” said Mr. Jackson, whose WingNut Films Ltd. announced the project in a statement with the Beatles’ Apple Corps Ltd.
“Watching (them)… work together, creating now classic songs from scratch, is not only fascinating — it’s funny, uplifting and surprisingly intimate.”
The band performed live together for the last time on Apple’s offices London rooftop on Jan. 30, 1969. They officially split a year later. — Reuters

German program for nurses promises free work visas, language training

PHILIPPINE Overseas Employment Administration (POEA) Administrator Bernard P. Olalia said qualified nurse applicants to Germany will be entitled to free work visas, German language lessons and other perks under the agency’s partnership with the German government.
In an interview with BusinessWorld, Mr. Olalia said German demand for nurses is high. He added that he hopes interested parties will consider applying under the Triple Win Project (TWP), an undertaking of the POEA, the German Federal Employment Agency (BA) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH to avoid the expense of qualifying to work in Germany.
“The airfare is free, the work visa is free, plus the German language training after the first batch qualifies is free,” Mr. Olalia said.
Mr. Olalia said German wages are high compared to other markets.
In a statement on Thursday, the Department of Labor and Employment (DoLE) announced that participants in the TWP program can receive wages of between 2,000-2,400 euros a month, depending on qualifications.
According to the Bureau of Local Employment (BLE), the starting salary of nurses in the Philippines is P8,000 to P13,500.
Currently, there are 400 available slots under the TWP. Those interested in applying should be Filipino citizens, graduates of a nursing course, should have passed the board exam, and have a minimum of two years’ professional experience as a nurse.
Qualified applicants can register at eservices.poea.gov.ph and more information will be posted regarding other requirements for personal submission at the POEA. The deadline for submission is Feb. 28, 2019. — Gillian M. Cortez

Universal is the first big Hollywood studio to sign the female-director challenge

UNIVERSAL PICTURES, part of Comcast Corp., became the first major movie studio to commit to the “4% Challenge,” a bid to rectify the lack of female directors in Hollywood.
As part of the campaign, which refers to the percentage of films directed by women over the past decade, the studio said it plans to work with at least one female director on a feature film in the next 18 months. The challenge was kicked off at the Sundance Film Festival this year by producer Nina Jacobson and director Paul Feig, among others.
The move is part of a broader push by the entertainment industry to diversify its ranks, long dominated by white men. But the progress has been particularly slow in Hollywood’s directors chairs. This year, no women were nominated for the best directing Oscar by the Academy of Motion Picture Arts & Sciences.
Universal Pictures’ pledge was backed by the head of production, Peter Cramer; Peter Kujawski, chairman of its Focus Features division; and DreamWorks Animation President Margie Cohn.
While hiring one woman in 18 months may not seem like a huge step, it’s a sign of progress in an industry where movies are planned years ahead of time.
“This is big,” Melissa Silverstein, founder and publisher of Women and Hollywood, said on Twitter after Universal’s announcement. “This is a studio pledging to work with women.” — Bloomberg

LANDBANK gives PSE up to March 15 to decide on PDS offer

By Karl Angelo N. Vidal, Reporter
THE Philippine Stock Exchange (PSE) will get one more month to decide on the offer of Land Bank of the Philippines (LANDBANK) to buy out the remaining shares in the Philippine Dealing System Holdings Corp. (PDSHC).
In a text message, LANDBANK President and Chief Executive Officer Alex V. Buenaventura said the state-owned lender is giving the PSE until March 15 to make a decision on its offer “due to request for extension from many PDSHC shareholders.”
LANDBANK previously extended the offer period to purchase the remaining shares in the fixed-income bourse to Jan. 31, 2019, from the earlier deadline set at end-2018.
The proposed acquisition placed the value of PDSHC shares at P215 apiece or for a total of P281.96 million, “subject to terms and conditions.”
The current offer price is 40% lower than the offer initially approved by the LANDBANK board last year, priced at P360 per share or a total of P472.11 million.
The extended offer period came three days after the PSE clarified it has yet to make a final decision on the offer of LANDBANK to buy its shares.
“Management was tasked to further study matters related to the offer. The Company will be guided by the timelines indicated in the offer by (LANDBANK) and make the appropriate communications at the appropriate time,” the PSE said on Monday.
Based on the shareholder structure found in its website, the PDS Holdings is 21% owned by the PSE. The biggest shareholder group, with a 28.9% stake, is made up of members of the Bankers Association of the Philippines and institutions.
LANDBANK sought to take over the fixed-income exchange after continued delays in the planned merger of PSE and PDS Holdings that began in 2013.
The PSE had already secured a 72% ownership of PDS Holdings in early 2018, but since it failed to obtain exemptive relief from the Securities and Exchange Commission to waive the 20% single-industry ownership limit, its share purchase agreements with various stakeholders lapsed in March.
The application was rejected because the PSE did not meet a requirement to dilute broker ownership in the equities exchange to less than 20%.
LANDBANK stepped in, saying it could improve its financial position, and at the same time expedite the development of the capital markets.

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