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Cusi says non-performing units like PNOC should be abolished

IF IT were up to him, Energy Secretary Alfonso G. Cusi said he would have wanted “non-performing” companies affiliated to his department to be abolished or consolidated.
“I want to abolish mga things that are not performing, mga offices that are not performing like sabi ko nga kay Admiral, mabuti pa isara na natin ang PNOC (Philippine National Oil Co.) kung ganyan ang ginagawa natin (I want to abolish things that are not performing, offices that are not performing, like what I’ve said to the admiral, it would be better if we close PNOC if that’s what we are doing),” he told reporters in an informal gathering with other Energy officials.
Mr. Cusi was referring to retired Admiral Reuben S. Lista, president and chief executive officer of PNOC, who first announced the company’s liquefied natural gas (LNG) terminal project but has yet to find a partner that will provide capital.
Last month, PNOC announced that it had “postponed until further notice” the process of selecting a partner for the LNG terminal project. The company is attached to the DoE, with the secretary as its ex-officio chairman.
Mr. Cusi had envisioned the project to transform the country into a regional LNG hub, saying that it had been performing as one.
In a notice posted on its website dated Nov. 21, 2018, PNOC said it had postponed the pre-eligibility activity that was supposed to be on Dec. 4. It also postponed the submission date of eligibility documents.
Mr. Cusi has expressed disappointment over the performance of PNOC, which lagged behind private entities in advancing the LNG project.
Thus far, Phoenix Petroleum Philippines, Inc. and its Chinese partner China National Offshore Oil Corp. had submitted a proposal with details on technical, financial and legal qualifications.
First Gen Corp. announced earlier this month that it had signed a joint development agreement with Tokyo Gas Co., Ltd. to pursue the joint development of an LNG terminal at the Lopez-led company’s Batangas Clean Energy Complex.
Meanwhile, the local unit of Australia-listed Energy World Corp. Ltd. said it had revived talks with lenders to finance the completion of its 650-megawatt (MW) combined cycle gas-fired power plant.
Mr. Cusi said if it were up to him, he would proceed with the project even ahead of finding a partner with the funding. He said PNOC had no notable accomplishment even if it has funding because its charter requires it to seek congressional approval for funding.
“Sabi ko sa kanila sa board: you know if I were you, if I were PNOC and I own PNOC as a businessman, ibinibigay ang LNG terminal na ‘yan, gagawin ko nalang ‘yan… Kung ako dedesisyunan ko ‘yan. (I told them in the board: you know if I were you, if I were PNOC and I own PNOC as a businessman, and that LNG terminal is being offered, I’d just do it … If it were up to me, I’d decide on it.),” he said.
Mr. Cusi said he would prefer that consolidation of PNOC along with its subsidiaries PNOC-Exploration Corp. and PNOC-Renewables Corp.
“Pero (But) I want to assure, I want to say that it’s not as simple as that,” he said, citing the personnel of the companies who might lose their jobs.
Also, only Congress can abolish a government-led company through legislation. — Victor V. Saulon

Metrobank’s bond reissue yields P18B in fresh funds

METROPOLITAN Bank & Trust Co. (Metrobank) raised P18 billion from the reissuance of its peso-denominated bond program.
In a disclosure to the local bourse Monday, the Ty-led Metrobank said it successfully completed the P18-billion reissuance of its two-year fixed-rate bonds yesterday.
The issuance is part of its P100-billion bond program approved by its board of directors last Sept. 19. The papers issued will mature in two years and carry an interest rate of 7% per annum to be paid quarterly until December 2020.
Due to “overwhelming investor demand” for the instrument, the lender upsized the offer size by more than thrice from the P5 billion it initially intended to offer.
The bonds issued on Monday, along with the P10-billion fixed rate bonds raised last month, brings Metrobank’s total issue to P28 billion, which it said is the largest peso-denominated bond issuance to date.
The bank said robust investor demand and strong credit led to a decline in the overall cost of the bond and credit spread.
“This serves as a significant milestone for Metrobank who has consecutively proven its ability to always be the first to market, and pioneer a reopening following its successful maiden issuance last November,” Metrobank President Fabian S. Dee was quoted as saying in the statement.
Standard Chartered Bank (SCB) acted as the transaction’s sole arranger and bookrunner. It also acted as a selling agent alongside Metrobank and First Metro Investment Corp.
Lynette V. Ortiz, SCB Philippines chief executive officer, said the reissuance proves Ty-led bank’s flexibility and swiftness to tap the local capital markets when the opportunity arises and when market conditions are constructive.
In October, Metrobank also raised some P8.68 billion from the first tranche of its P25-billion long-term negotiable certificates of deposit program. The notes will mature in 5.5 years to be paid quarterly and carry a 5.375% rate.
Metrobank posted a P5.7-billion income in the second quarter, up 55% from the P3.7 billion tallied the previous year on the back of its robust core business.
Shares in Metrobank went down P1.20 or 1.48% to close at P79.80 each on Monday. — Karl Angelo N. Vidal

Astoria Current reopens

ASTORIA CURRENT welcomed tourists once again when Boracay island reopened last Oct. 26.
“The expediency by which Astoria Hotels & Resorts (AHR) complied with the environmental guidelines set forth by the government allowed this resort to reopen 205 rooms with direct beach access. This is currently the most number of such rooms of any property in Station 3,” the company said in a statement.
During Boracay’s closure, AHR built an additional annex with more hotel rooms designed by Atelier Almario and upgraded its function room. Rainbow-colored underwater lights were installed at the saltwater pool, while the famous glass pool and lounge area were repainted.
AHR said its staff, who were reassigned to properties in Bohol, Palawan, and even Plaza in Ortigas Center, returned to work at Astoria Current.

Grammy-winning singer Nancy Wilson, 81

GRAMMY award-winning singer Nancy Wilson, whose hits ranged from R&B to jazz and funk, died at her California home at age 81 on Thursday after a long illness, her publicist said. Ms. Wilson, who came to fame as a torch singer in the 1960s, called herself a “song-stylist” and resisted labeling as a jazz singer for most of her career since she could cross many genres. “She was one of those rare vocalists who could do it all.” longtime publicist Devra Hall Levy told Reuters. “Jazz, blues, pop and even funk. She did it all.” Ms. Wilson’s “How Glad I Am” earned her a Grammy in 1965 for best R&B performance. She won more Grammys in 2005 and 2007 for jazz, along with a 2004 lifetime achievement award, the Jazz Masters Fellowship, from the National Endowment for the Arts. “Nancy gave her all for her fans,” Ms. Levy said. A music critic once called Ms. Wilson the heir apparent to iconic jazz singer Ella Fitzgerald, and she was influenced by Nat King Cole and other legendary vocalists. Her first album, Like in Love, came out in 1959 to commercial success and she frequently topped the Billboard pop charts in the 1960s. Jazz historian and author Ted Gioia told Reuters that the jazz world had lost a music giant whose supple talents brought her songs emotive heights. “She was one of those rare vocalists who could sing any style, cross any genre but still put her unique imprint on the music. Her albums were full of gems,” Mr. Gioia said. — Reuters

BCDA, Villar-led consortium ink water deal for New Clark City

THE BASES Conversion and Development Authority (BCDA) on Monday signed a joint venture agreement with a consortium led by the Villar Group’s Prime Water Infrastructure Corporation (PrimeWater) and Israel’s Tahal Group to deliver smart water and wastewater facilities for New Clark City.
“By offering state-of-the-art water and wastewater services at competitive rates, we are staying true to BCDA’s promise for New Clark City to become the Philippines’ most attractive destination for residences and businesses, and the action-oriented ethos of President Rodrigo Duterte’s administration,” said BCDA President and Chief Executive Officer Vivencio B. Dizon in a statement.
The BCDA inked the deal with PrimeWater, Prime Assets Ventures, Inc., (PAVI), MGS Construction, Inc., and Tahal Group.
Last Nov. 12, the consortium won the tender with its bid of P9.45 per cubic meter charge that applies to water supply only. The same amount will be charged for wastewater services, bringing the total tariff of P18.90 per cubic meter over the first five years of the 30-year joint venture period.
The Asian Development Bank (ADB) was the transaction advisor to BCDA on the water project. The ADB described the winning bid as “highly competitive,” compared to water rates in other cities in the Philippines and other parts of Southeast Asia.
PrimeWater provides water supply and distribution systems to real estate developments of sister company Vista Land & Lifescapes, Inc. such as Brittany, Camella Homes and Crown Asia. It also has bulk water supply projects with partner water districts, according to its website.
Tahal Group, on the other hand, is described as a “leading global provider of sustainable infrastructure development projects in developing countries worldwide.” It is owned by the Kardan Group, which is listed on Euronext Amsterdam and Tel Aviv Stock Exchange.
Located inside the Clark Special Economic Zone in Pampanga, the New Clark City is being touted as the country’s “first smart, green, and sustainable metropolis.” — E.J.C.Tubayan

Tighter watch needed to spot derivatives risks

LONDON — Regulators should scrutinize clearing houses and banks together to spot financial stability threats from the world’s multi-trillion dollar derivatives market, the Bank for International Settlements (BIS) said on Sunday.
Almost two-thirds of interest rate swaps pass through clearing houses like LICH and Eurex, ensuring the safe completion of trades even if one side of a transaction goes bust.
This compares with a fifth in 2009, before new rules were introduced in the aftermath of the financial crisis that require banks to clear trades to improve safety and transparency.
Banks and clearing houses are now regularly “stress tested” on an individual or sector-wide basis to check their resilience to defaults and extreme market stresses, but the BIS paper called for checks to be coordinated.
Clearing has cut risk in the financial system overall, but banks and clearing houses, also known as central counterparties (CCPs), could create a “destabilizing feedback loop” that amplifies stresses in markets, said the BIS, a forum for central banks from across the world.
“Hence, the risks of banks and CCPs should be considered jointly, rather than in isolation,” it said in its quarterly review.
Mandatory clearing has built up large exposures between a small number of banks and CCPs, or what the BIS calls a CCP-bank nexus that regulators should now be studying more closely.
Clearing houses are processing large notional values of interest rate and credit default swaps equivalent to 4.4 times the world’s economic output, up from 2.8 times in 2008 when Lehman Brothers bank went bust.
Rules for clearing houses have already been tightened, and they must now be able to hold enough default funds to survive their two largest members going bust.
“However, given the complex web of incentives, spanning different institutions and markets, what might transpire under some stress scenarios is less than fully understood,” the BIS said.
Only three clearing houses have failed in the past 50 years, though some have come under severe stress.
A Norwegian power market trader racked up losses he could not cover in September, leaving commodities companies part of the Nasdaq clearing house and the exchange itself to plug a €114-million hole in a contingency fund. — Reuters

Agoda founder releases short-term rentals handbook

THE POPULARITY of home sharing around the world has prompted travel industry experts Robert Rosenstein and Peter Allen to write “At Home Around the World,” described as a short-term rentals handbook for guests, hosts, neighbors, and governments.
“Through our conversations with regulators and neighborhood advocates around the world, we realized that governments are struggling with how to understand and anticipate the role that home sharing plays in their cities. As this relatively new industry has emerged, a patchwork of regulations has been created,” Mr. Rosenstein, founder and chairman of online travel giant Agoda Company Pte. Ltd., said in a statement.
Agoda rentals handbook
Agoda is one of the world’s fastest growing online travel booking platforms.
Messrs. Rosenstein and Allen noted that home sharing is contributing significant tax revenues to cities, generating secondary industries and jobs such as cleaning and security services, and boosting earnings of neighborhood businesses.
For instance, the authors estimate the home sharing industry will generate $2 billion in local global tax revenue over the next decade
The book also includes the different government regulations and policies on home-sharing around the world, as well as those being proposed.

Victorias Milling profit jumps 17%

VICTORIAS MILLING Company (VMC) saw its net income rise by 17% to P764 million for the fiscal year ending Aug. 31, as lower production and operating costs offset the decline in prices of sugar and alcohol.
In a regulatory filing, VMC reported gross revenues dropped 24% to P6.6 billion during crop year 2017-2018. The company reported an 11% decline in provincial output, but increased its Negros market share to 23.5% versus 22% in the previous year.
VMC milled 3 million tons of cane, 8% lower than the 3.2 million tons milled last year.
“The significant decrease in the topline was mainly attributed to the decline in volume sold as a result of lower production in 2018 as well as the decline in average prices of sugar and alcohol as compared to the previous year,” the listed company said.
Raw sugar recovery fell to 1.85 50-kilogram bag (LKG) per ton cane milled in 2018, from 1.87 LKG per ton cane milled in 2017, because of the low quality of canes.
Raw sugar output slipped by 9% to 5.5 million LKG, while refined sugar net production rose 13% to 4.6 million LKG. At the same time, alcohol production dropped to 5.8 million liters as compared to 8.6 million liters in 2017 “due to prolonged shutdown from repair and improvements.”
“However, despite the decline in revenue, gross profit increased from 15% to 18% in 2018, which was mainly due to the decrease in costs of cane hauling and lower production costs,” VMC said.
VMC said operating expenses fell by 22% to P615 million, due to decline in repairs and maintenance, labor costs, consultancy fees and taxes caused by the management’s push for cost optimization. — R.J.N.Ignacio

Security Bank to raise P50 billion via bonds

SECURITY BANK Corp. is set to raise P50 billion via peso-denominated bonds to raise fresh funds.
In a regulatory filing Monday, Security Bank said its board of directors approved at its regular meeting on Dec. 14 the establishment of a local currency bond program of up to P50 billion.
Security Bank said the funds will be used “to diversify the funding sources of the bank and to support future lending activities.”
Banks can now raise fresh funds through corporate bonds with greater ease as new rules do away with having to secure approval from the Bangko Sentral ng Pilipinas as part of its reforms to deepen capital markets.
UnionBank of the Philippines, Bank of the Philippine Islands as well as Metropolitan Bank & Trust Co. recently raised P11 billion, P25 billion and P10 billion through peso fixed-rate securities. Meanwhile, BDO Unibank, Inc. also announced its intention to raise more capital by establishing a P100-billion local currency bond program.
A number of banks have been conducting various fund-raising activities ahead of tighter risk management requirement by the central bank which will take effect next year under the international Basel 3 standards.
In September, Security Bank went to the offshore market to raise $300 million through a senior unsecured note drawdown to expand funding base and extend term liabilities. The issuance marks the maiden tranche of its $1-billion medium term note program.
In April, the lender also raised P5.8 billion through long-term negotiable certificates of time deposit.
Security Bank booked a P2.25-billion net income in the July-September period, up 5% from the same quarter last year, on the back of a surge in consumer loans and deposits. Shares in the bank closed at P160 apiece on Monday, down 20 centavos or 0.12%. — K.A.N. Vidal

Janet Jackson gets Rock Hall of Fame place on Brit-heavy list

LOS ANGELES — Janet Jackson finally won her place in the Rock and Roll Hall of Fame on Thursday when the pop singer was named as one of seven music acts to be getting a place in music history. Ms. Jackson, 52, the younger sister of the late Michael Jackson, will join Fleetwood Mac singer Stevie Nicks and five British bands — Def Leppard, Roxy Music, Radiohead, The Cure, and The Zombies — as the latest inductees, the Rock Hall announced. Billboard magazine said it was the biggest British line-up in the 33-year history of the Cleveland-based Rock and Roll Hall of Fame. Janet Jackson, a five time Grammy Award winner, had been nominated twice previously, but never made the cut with the 1,000 artists, historians and members of the music industry who select the inductees. “We did it u guys. Thank U for all your love and support,” Ms. Jackson tweeted on Thursday. Ms. Nicks, 70, a two-time Grammy winner known for her haunting vocal style, was inducted into the Hall 20 years ago as a member of the popular 1970s group Fleetwood Mac. She will be inducted this time for her solo career. All seven acts will be formally inducted at a ceremony in Brooklyn, New York on March 29. Artists must have released their first recording at least 25 years ago to be eligible for induction. “What a way to wrap up an incredible year,” tweeted Glam metal band Def Leppard, which formed in 1977 in northern England and toured North America and the UK in 2018. The Zombies, formed near London in 1961 and best known for their hit singles “She’s Not There” and “Time of the Season,” were part of the British invasion of pop music that made it big in the United States in the 1960s along with The Beatles, The Rolling Stones and The Kinks. “I know it’s fashionable in some circles to say, ‘I don’t mind whether I get into the Rock and Roll Hall of Fame or not,’ but that is not how I’ve ever felt,” Zombies co-founder Rod Argent posted on the band’s Instagram account. — Reuters

How PSEi member stocks performed — December 17, 2018

Here’s a quick glance at how PSEi stocks fared on Monday, December 17, 2018.

 
Philippine Stock Exchange’s most active stocks by value turnover — December 17, 2018

PHL eggs, poultry in line for possible export to Singapore

AGRICULTURE Secretary Emmanuel F. Piñol said the Philippines is being considered as a source of eggs, chicken, vegetables and high-value rice by Singapore.
According to Mr. Piñol, Singapore officials will visit in March to inspect Philippine processing facilities. Philippine produce is expected to fill the void left by Malaysia when it stops exporting poultry to Singapore.
“The Singapore Ambassador Kok Li Peng was very happy in fact she really appreciated the fact that I came to her and see… to ask if we could supply the eggs and the poultry needs of Singapore,” Mr. Piñol told reporters in Pasay.
“During the meeting, we agreed that the AVA of Singapore (Agri-Food and Veterinary Authority) will be visiting the Philippines in March to conduct inspection of the facilities,” Mr. Piñol added.
Mr. Piñol said that Dante Palabrica, director of farm operations at Universal Robina Corp., was present at the meeting, and expressed a willingness to participate in the export trade for poultry and eggs, as well as pork.
“The other thing that Singapore is interested in is vegetables we will be producing from Bukidnon. Because right now we are developing our vegetables in Bukidnon,” Mr. Piñol said.
“The items they are looking at right now are pork, eggs, chicken, high-value rice (including brown rice and organic rice), shrimps and vegetables from Mindanao,” he added.
Mr. Piñol said that he is not worried about the supply situation for these items.
“I told the Singapore ambassador that concerns on food safety will be addressed by mid-next year because we will have that irradiation facility in Davao. That could be our clearing house for our food exports. Everything will pass through that,” Mr. Piñol noted.
According to news reports, Malaysia may stop exporting eggs to ensure sufficient domestic supply. Malaysia is the top supplier of eggs to Singapore. — Reicelene Joy N. Ignacio

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