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Chinese Foreign Minister to visit Davao City Oct. 28-29

CHINESE State Councilor and Foreign Minister Wang Yi will visit the Philippines on Oct. 28 to 29, the Department of Foreign Affairs (DFA) announced on Friday.
According to the media advisory sent by the DFA, Mr. Wang will meet with Philippine government officials in Davao City, the hometown of President Rodrigo R. Duterte.
Mr. Wang will hold meetings with the economic team, followed by an expanded bilateral meeting with Foreign Affairs Secretary Teodoro L. Locsin, Jr.
Signing of bilateral documents will also follow.
The Chinese official’s visit was originally scheduled last Sept. 16 to 18 but was cancelled due to typhoon Ompong.
The DFA said the official visit is for the Philippines and China to discuss a planned joint exploration in the South China Sea as well as the government’s Build, Build, Build infrastructure program.
Chinese President Xi Jinping is also expected to visit the Philippines in November.
This will be Mr. Wang’s second official trip to the Philippines. — Camille A. Aguinaldo

5 SC justices vie for CJ post

By Vann Marlo M. Villegas
FIVE Supreme Court (SC) justices are vying for the position of chief justice (CJ) vacated by Teresita J. Leonardo-De Castro, now retired.
Four out of five most senior justices who accepted their automatic nomination are associate justices Antonio T. Carpio, Diosdado M. Peralta, Lucas P. Bersamin, and Estela M. Perlas-Bernabe.
The only junior justice who applied for CJ is Associate Justice Andres B. Reyes, Jr.
Associate Justice Mariano C. Del Castillo is the only most senior justice who declined the nomination, citing his short stint as CJ if appointed, due to his impending retirement as well as his heading the 2018 Bar Examinations.
The five will compose the nominees for the top magistrate as no additional applications were submitted before the deadline on Oct. 26 at 4:30 p.m., said Justice Secretary Menardo I. Guevarra, an ex-officio member of the Judicial and Bar Council (JBC), in a text message to reporters.
The application for chief justice was extended from Oct. 15 to Oct. 26.
However, there will be no public interviews to be held for senior justices after the JBC agreed with an SC resolution which stated that senior justices aiming for the top magistrate post should be exempted from public interviews.
Mr. Guevarra said in a previous statement that CJ nominees will be privately interviewed by the JBC.
Mr. Reyes, an appointee in 2017, was interviewed for the top post in August 2018 following the ouster of Maria Lourdes P.A. Sereno as chief justice through quo warranto this year. His previous interview is still considered valid.
President Rodrigo R. Duterte has 90 days to appoint a chief justice after Ms. De Castro’s retirement last Oct. 10 upon her reaching the mandatory age of 70.

BI downgrades Sister Fox’s visa to temporary visitor’s visa

THE Bureau of Immigration (BI) has downgraded the missionary visa of Australian missionary Patricia Fox to a Temporary Visitor’s Visa.
In an order dated Oct. 24, Ms. Fox was given a temporary visitor’s visa valid for 59 days starting from the expiration of her missionary visa last Sept. 5.
BI Spokesperson Krizia Dana Sandoval said in a text message that the temporary visa will expire on Nov. 3.
Also in a statement by the bureau, Ms. Sandoval said Ms. Fox was required to be downgraded to temporary visitor’s visa following the denial of the extension of her missionary visa.
“Downgrading reverted her status to a temporary visitor, and she is given 59 days from the day her missionary visa expired, which was September 5,” Ms. Sandoval said.
The BI spokesperson also said the BI “still needs to wait for the decision before acting (on) her deportation,” referring to the petition filed by Ms. Fox before the Department of Justice last Sept. 3 assailing the BI’s deportation order against her.
She also assured that Ms. Fox was granted the Temporary Visitor’s Visa, “without prejudice to the resolution of her appeal before the DOJ on her deportation.”
On Oct. 15, Ms. Fox, who is seeking the reversal of her deportation order, filed her reply to the comment of the BI on her deportation case and claimed that the bureau has “long prejudged her case and firmly believes that the BI had never been objective in resolving the deportation case.” — Vann Marlo M. Villegas

DoJ appeals denial of motion to arrest Sen. Trillanes

THE Department of Justice (DoJ) filed a motion for partial reconsideration at the Makati City Regional Trial Court (RTC) Branch 148, still seeking the issuance of arrest warrant and hold departure order against Sen. Antonio F. Trillanes IV.
With the issuance of the Proclamation No. 572, the DoJ said in its motion that it is presumed that the President determined the non-compliance of Mr. Trillanes with the requirements for the grant of amnesty.
In affirming that Mr. Trillanes applied for amnesty, the Court “practically disregarded the credible evidence presented by the People, both testimonial and documentary, and took as gospel truth the testimonies of defense witnesses…whose credibility is doubtful, testimonies are biased, and worse, not supported by evidence,” the DoJ said.
Among the witnesses presented by Mr. Trillanes are former defense undersecretary Honorio S. Azcueta and Lt. Col. Josefa C. Berbigal, who received Mr. Trillanes’s amnesty application in 2011.
The DoJ also claimed that the dismissal of Mr. Trillanes’s case on Sept. 21, 2011 is void and is an “exception to the rule on immutability of final and executory judgements.”
“With the revocation of the amnesty granted to accused Trillanes, the Order dismissing the case against Trillanes on Sept. 21, 2011 therefore becomes void, and can never be final and executory,” it stated.
“Necessarily with the void order, the State cannot be deprived of its right to avail of the legal remedies to hold accused Trillanes liable for the crimes he committed,” it added.
Judge Andres B. Soriano of Makati RTC Branch 148 denied on Oct. 22 the motion to arrest Mr. Trillanes in connection with his non-bailable coup d’etat case stemming from the 2003 Oakwood Mutin,y as the case has long been dismissed and “has become final and executory.”
He added that there is no reason “to disturb the doctrine of immutability of a final and executory judgment.”
Despite ruling that President Rodrigo R. Duterte’s Proclamation No. 572 is constitutional as it is an executive act, the factual basis for declaring as void from the beginning the amnesty of Mr. Trillanes was junked.
The order stated that Mr. Trillanes has applied for the amnesty and has admitted his guilt based on the pieces of evidence he presented.
A hearing on the motion for partial reconsideration is set on Oct. 30.
Mr. Soriano’s decision is different from that of Judge Elmo M. Alameda of Makati RTC Branch 150, which handled the rebellion case in connection with the 2007 Manila Peninsula Siege. Mr. Alameda ordered the arrest of Mr. Trillanes, who posted bail on the same day.
Mr. Trillanes along with other mutineers were granted amnesty by former president Benigno S.C. Aquino III.

BSP declares financial system stable, poised for growth

THE financial system is sound and robust and will sustain its growth despite growing external uncertainties, the Bangko Sentral ng Pilipinas’ (BSP) said in a half-year report.
The BSP said that banking system’s assets, loans, investments, deposits, capital accounts and core income, all grew in the double digits.
It said the growth “showcases resilience amid global volatilities and ensures another pillar to support the economy’s progress.”
Even as credit expands, lending remained “prudent” and maintained a “satisfactory” asset quality, with the non-performing loan ratio at 1.9% in the first half, unchanged from a year earlier.
“The Philippine financial system maintained its growth trajectory in the first semester of 2018 on the back of progressive implementation of financial sector reforms, sound governance and risk culture as well as pursuit of financial innovation,” it said.
“While there are lingering volatilities in the external macroeconomic environment, the country’s underlying fundamentals and continued investor confidence supported the steady growth of the domestic financial sector,” it added.
The BSP cited external risks such as the potential faster-than-expected US monetary policy tightening, prolonged global trade tensions, and rising inflation expectations amid the rise in world oil prices.
The banking system accounted for 82% of the financial system’s total resources in the first half. Total resources were channeled mostly to loans than investments, with 58.3% in the former, and 22.1% in the latter.
The BSP said that banks’ preference for interest-based revenue and longer-dated instruments helps them avoid potential mark-to-market losses amid higher interest rates.
Core lending grew 16.7% year-on-year in the six months to June, allocated largely to the real estate, wholesale trade, manufacturing, household, and utilities sectors.
Meanwhile, banks’ capital adequacy ratio improved to 15.2% at the end of June, from 14.4% at the end of 2017, but down from 15.3% a year earlier due to the “faster rise in the accumulation of risky assets compared to banks’ capital expansion activities.”
Nonetheless, the indicator remains well above the 10% standard set by the BSP, and the 8% Basel 3 minimum capital requirement, indicating that banks are “well prepared to withstand shocks to their balance sheets.”
“The financial soundness indicators suggest that the Philippine banking system is stable. Meanwhile, the findings of the BSP empirical studies in this section imply that consequent risks from lending should be monitored especially in the event of excessive uncertainties that could place additional pressures on the banking system in the short and medium run,” the BSP said.
“In particular, intense supervisory engagement with banks should continue to supplement the close monitoring and surveillance activities currently being employed for these types of credit exposure,” it added. — Elijah Joseph C. Tubayan

Costs clobber cement firms’ Q3 results even as sales rise

LISTED cement manufacturers reported lower profits in the third quarter, weighed down by higher fuel prices, power and distribution costs and a weakening peso.
In a regulatory filing on Friday, Holcim Philippines, Inc. said its net profit during the three months to September fell 47.58% to P176.88 million.
Meanwhile, sales during the three-month period grew 3.15% to P8.52 billion versus the P8.26 billion clocked in the comparable period last year.
Earnings before interest, tax, depreciation and amortization was P634.57 million, down 34.79% from a year earlier.
In the nine months to September, net profit fell 24.35% to P1.74 billion while EBITDA totaled P3.4 billion, down 23.42%.
Sales in the nine months rose 6.27% to P27.27 billion.
“Our top line continued to grow positively in the third quarter thanks to our ongoing successful commercial initiatives. Results though were partly impacted by inclement weather tempering demand and pricing pressures. However, our financial performance continued to be affected by the steady rise in the costs of fuel, power and distribution as well as imported production inputs caused by the peso’s depreciation,” John W. Stull, President and CEO of Holcim Philippines, said in a statement on Friday.
“Amid these challenges, we remain focused on sustaining the improvements in plant productivity and lowering our costs to better support the strong construction activity nationwide and deliver profitable growth to our shareholders,” Mr. Stull added.
Holcim’s cement manufacturing facilities are located in La Union, Bulacan, Misamis Oriental, and Davao.
Meanwhile, Cemex Holdings Philippines, Inc. said it booked a net loss of P70 million during the third quarter, against a profit of P202 million a year earlier. EBITDA was P686 million in the third quarter, down 8% and P2.4 billion in the nine months to September, down 15%. It cited increased input costs and “shutdown-related expenses.”
Sales grew 8% to P6.03 billion during the third quarter and also rose 8% during the nine months to P17.9 billion.
In a separate disclosure, CHP President and CEO Ignacio A. Mijares noted that “higher input-cost inflation continues to be a challenge.”
“We are implementing several initiatives to improve our profitability and deliver value for our customers and shareholders,” he said.
Nevertheless, Cemex maintains that domestic cement demand “remains strong and reinforces our commitment to be a partner in the development of infrastructure in the country.”
“In line with this, we recently formalized the agreement with CBMI Construction Company of China for the construction of a new cement production line in our Solid Cement Plant in Antipolo, Rizal which will increase CHP’s cement production capacity by 1.5 million tons,” he said. — Janina C. Lim

Grab plans to appeal PCC’s P12 million fine

GRAB Philippines said on Friday that it will file a motion for reconsideration after it was fined P12 million by the Philippine Competition Commission (PCC) for alleged compliance failures in connection with its acquisition of the Southeast Asian business of Uber.
In a statement, Grab Philippines lead legal counsel Miguel G. Aguila said: “We respectfully disagree with PCC’s decision. Grab completed the transaction legally, and did not violate the interim measures order.”
The PCC earlier said that both companies — Grab and Uber — were fined P4 million for proceeding with the merger during the PCC’s review period, while an additional P8 million was levied on Grab for its failure to maintain pre-merger business conditions for pricing, rider promotions, driver incentives and service quality, among other alleged violations.
Mr. Aguila said the fares of Grab Philippines remained the same until the Land Transportation Franchising and Regulatory Board ordered the suspension of the P2 per minute charge of the transport network company (TNC).
“The supposed increase in price was affected by the higher incidence of surge, which was driven by the low supply of vehicles and high concentration of demand. Fare and surge rates remained within the LTFRB-approved range. Promos and incentives were also maintained but pivoted towards Grab reward platform to address the issues related to considerable imbalance between supply and demand,” Mr. Aguila said.
“In terms of Uber’s equity stake and board seat, we maintain that the deal was already consummated before the issuance of the interim measures order. The interim measures, as worded, should be interpreted to apply prospectively and should not cover acts already consummated before its issuance,” Mr. Aguila added.
“Grab and Uber operations in the Philippines remained separate and without any integration nor was there automatic transfer of passenger and drivers data. Grab did not take over Uber operations and did not do anything to violate the interim measures after they were put into effect,” according to Mr. Aguila.
PCC Chairman Arsenio M. Balisacan said that the parties have until Oct. 29 to file the motion for reconsideration.
“To date we have not yet received a copy of Grab’s motion for reconsideration. The parties have until Oct. 29 within which to file their MR,” Mr. Balisacan said. — Reicelene Joy N. Ignacio

PSE may require independent valuation opinions for tender offers

THE Philippine Stock Exchange, Inc. (PSE) is studying the possibility of independent valuation providers rendering opinions on tender offers, after investors raised concerns over the tender offer by Melco Resorts and Entertainment (Philippines) Corp. (MRP)’s largest shareholder.
“We’ll come out with the formal comment process for that once we get the finer details,” PSE Chief Operating Officer Roel A. Refran said in a briefing at the PSE office in Bonifacio Global City on Friday.
Mr. Refran said the exchange has initiated the comment process after receiving letters from retail investors and brokers in the past four weeks in relation to MRP’s tender offer.
MRP’s largest shareholder, MCO (Philippines) Investments Ltd, previously announced a plan to conduct a tender offer as part of a move to delist from the stock exchange.
Some trading participants interviewed by BusinessWorld however said that the tender offer price of P7.25 per share was unfair, as it was well below MRP’s follow-on offering in 2013 priced at P14, guaranteeing a loss for those who took up the shares.
Shareholders also said should they fail to tender their shares, they will become illiquid once MRP delists.
MCO Investments later withdrew its delisting plan, but noted that it will still conduct the tender offer to increase its stake in MRP. It also maintained the tender offer price of P7.25.
MCO Investments engaged FTI Consulting Philippines, Inc., a PSE-accredited firm, for the valuation and appraisal.
Mr. Refran said the PSE may change the rules on accredited valuation providers, as per PSE Memorandum No. 2011-0104, or the Guidelines for Fairness Opinion and Valuation Reports, after the formal comment process.
“Right now, these are in the PSE rules on accredited valuation providers. That’s what we’ll be changing,” he said.
In 2016, the Shareholders Association of the Philippines also asked the PSE to revisit valuation rules for voluntary tender offers “to minimize doubt of the investing public on the fairness of tender offer prices.” — Arra B. Francia

Belle net declines in Q3 after year-earlier one-time gains

BELLE Corp. reported a net profit of P595 million in the third quarter, down 16.8% from year earlier, as the property developer came off a strong year-earlier performance that was boosted by one-time gains.
Gross revenue during the third quarter fell 7.6% to P1.94 billion, it told the stock exchange on Friday.
In the nine months to September, Belle, which develops tourism and leisure destinations, reported a recurring profit of P2.94 billion, up 19% from a year earlier. Consolidated net profit was P2.68 billion, up 1% from a year earlier.
Belle, whose principal asset is the City of Dreams Manila, said the lower growth rate was “due mainly to one-time gains recorded in 2017 from sales of non-core investments and properties.”
Through subsidiary Premium Leisure Corp. (PLC), the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) from its income share in the gaming operations of City of Dreams Manila increased nearly 30% to P1.84 billion.
PLC has an operating agreement with the Philippine affiliate of Melco Resorts and Entertainment Ltd. (Melco) that gives it a share of gaming revenue or earnings at City of Dreams Manila.
Belle said EBITDA rose from its real estate businesses to P1.79 billion in the first nine months, up 8% from a year earlier.
It said a significant portion of the real estate-related EBITDA at P1.54 billion was derived from Belle’s lease of the land and buildings comprising City of Dreams Manila to Melco.
The balance came from sales of real estate products and property management activities at its Tagaytay Highlands and Midlands residential and leisure complexes south of Metro Manila, it added.
On Friday, Belle shares fell 0.42% to P2.39.

PXP Energy given ‘preferential rights’ to up to 49% of Phoenix LNG project

INDEPENDENT oil company Phoenix Petroleum Philippines, Inc. is granting preferential rights to PXP Energy Corp. to participate and acquire up to a 49% stake in the former’s project to build a liquefied natural gas (LNG) terminal and a gas-fired power plant with a Chinese partner, the oil and gas exploration company told the stock exchange on Friday.
The disclosure follows PXP Energy’s announcement on Thursday that Dennison Holdings Corp. is set to subscribe for 340 million shares in the listed company at a discounted price of P11.85 per share for a total P4.03 billion.
Dennison and Phoenix Petroleum are led by Dennis A. Uy, a businessman who traces his roots to Davao City who achieved national prominence through a series of acquisitions, including a liquefied petroleum gas retailer, a convenience store, and a pastry shop — all in the past two years.
PXP Energy said its board of directors signed the subscription agreement with Dennison on Oct. 26, 2018.
It said a “substantial consideration” for the company agreeing to the subscription is Dennison causing its affiliate or related party Phoenix Petroleum to grant “certain preferential rights” to PXP Energy or to any of its affiliates to acquire the stake in the LNG project.
The preferential rights, which is subject to its board approval and consent of Phoenix Petroleum’s partner China National Offshore Oil Corp. (CNOOC), grants PXP Energy equity, interest or participation in the contemplated joint venture or related agreement for the construction, development, and operation of an LNG terminal and gas-fired power plant in the Philippines.
PXP Energy said after the subscription to the shares, Dennison will be entitled to at least one seat in its board and to nominate the vice-chairman. The subscription price represents a discount of 20% to the 90-day volume weighted average price of its shares. It is payable in two tranches.
PXP Energy also said its affiliate Philex Mining Corp. also signed the subscription agreement for 260 million common shares of the exploration company at P11.85 per share or total amount of P3.081 billion payable in two tranches.
The total subscription of 600 million via private placement will be issued out of PXP Energy’s unissued capital stock of 5.1 billion.
“PXP intends to use the proceeds from the private placement shares to fund its exploration activities and other oil assets within the Philippines and in Peru, and to repay advances from Philex,” the company said.
After the subscription, Dennison will have a total ownership interest in PXP Energy of 14.78%, while Philex Mining will increase its shareholding to 25.91% from 19.76%.
On Friday, shares in PXP Energy rose 2.84% to close at P18.10 each. Those of Phoenix Petroleum slipped 0.19% to P10.70 apiece. Philex Mining gained 0.86% to close at P3.53 per share.
PXP Energy directly and indirectly owns 77.5% of Forum Energy Ltd., a London-listed company whose main asset is a controlling interest in offshore exploration Service Contract (SC) 72 west of Palawan island in the disputed West Philippine Sea. It had held talks with CNOOC to jointly explore the area. — Victor V. Saulon

Philex Mining to raise stake in PXP Energy to nearly 26%

PHILEX Mining Corp. said on Friday that it signed and executed an agreement in relation to its subscription for 260 million common shares of PXP Energy Corp. at P11.85 each or a total of P3.081 billion.
The subscription price represents a 20% discount to the 90-day volume weighted average price (VWAP) of Philex Mining’s shares for the period ending Oct. 22, 2018, which is payable in two tranches.
According to Philex Mining, it will fund the subscription from a combination of proceeds from PXP’s repayment of Philex Mining’s advances, and cash. Philex Mining will increase its shareholding in PXP from 19.76% to 25.91% after the issuance of the shares.
A similar deal was signed and executed between PXP and Dennis A. Uy’s Dennison Holdings Corp. The latter subscribed for 340 million common shares amounting to P4.03 billion equivalent to P11.85 per share, representing a 20% discount to the 90-day VWAP of PXP shares for the period ending Oct. 22.
The subscription consideration will also be satisfied in two tranches.
The deal gives Dennison the right to at least one seat in PXP’s board of directors and nominate the board’s vice chairman. PXP can now also acquire up to 49% of the equity, interest or participation in the construction of a planned liquefied natural gas (LNG) terminal and gas-fired power plant of Phoenix Petroleum Philippines Inc, and China National Offshore Oil Corp (CNOOC).
However, it is still subject to board approval by CNOOC.
According to PXP, the total subscription of 600 million shares with Dennison and Philex will be issued out of its unissued capital stock.
Dennison will have a total ownership interest in PXP of 14.78% after the subscription.
PXP said that it intends to use the proceeds from the private placement shares to fund its exploration activities and other oil assets within the Philippines and in Peru, and to repay advances from Philex.
Philex Mining closed at P3.53 while PXP closed at P18.10.
Philex Mining is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Metro Pacific Investments Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls. — Reicelene Joy N. Ignacio

Alsons lists P100 million worth of commercial paper

ALSONS Consolidated Resources, Inc (ACR) listed on Friday P100 million worth of commercial paper, the first portion of its P2.5-billion debt program, to cover the initial funding for its venture into renewable energy.
The funds raised from the issuance will partly fund the development of its P4.25-billion run-of-river hydroelectric power project at the Siguil River basin in Maasim, Sarangani province.
“We’re looking to add up to 145 megawatts of renewable energy from the eight run-of-river hydro power facilities that we will be developing in various locations in Mindanao and Negros Occidental,” said ACR Executive Vice-President Tirso G. Santillan, Jr. during the listing ceremony.
“This facility will give us the ability to bridge the financial requirements of our projects under development,” he added.
The hydropower plant is expected to start commercial operation in 2021 and will power Sarangani province, General Santos City and some municipalities in South Cotabato.
Mr. Santillan described the issuance as a “high point” in the company’s efforts to tap the short-term capital market for its working capital.
He said the company is also looking to add more run-of-river hydroelectric projects in Negros Oriental, Sarangani, Davao Oriental, Zamboanga del Norte, the two Agusan provinces, and Surigao del Sur.
ACR’s commercial paper is due on Oct. 21, 2019 and carry a discount rate of 6.38%.
ACR’s power group claims to be Mindanao’s first and most experienced independent power producer. It operates four power facilities on the island.
Aside from the Siguil project, ACR is also developing a 105-MW San Ramon Power, Inc. coal-fired power plant in Zamboanga City, which is expected to begin operating in 2022.
The group also runs the Southern Philippines Power Corp. in Alabel, Sarangani and Western Mindanao Power Corp. in Zamboanga City.
It also operates the 103-MW Mapalad Power Corp. diesel plant in Iligan City and the first 105-MW section of the 210-MW Sarangani Energy Corp. baseload coal-fired power plant in Maasim, Sarangani province.
The Sarangani plant’s second 105-MW section is expected to begin commercial operations in the first quarter of 2019.
On Friday, shares in ACR slipped 0.79% to close at P1.26. — Victor Saulon

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