DoTr weighs options for MRT-3

January 21, 2025 | 12:33 am

By Ashley Erika O. Jose, Reporter

THE Department of Transportation (DoTr) is still considering two options for the planned bidding of the operations and maintenance (O&M) contract for Metro Rail Transit Line 3 (MRT-3), an official from the Transportation department said.

“In terms of MRT-3, the present contract was established through the BOT (build-operate-transfer) system. That contract will expire or will end this July. The DoTr right now is considering its two options,” Transportation Undersecretary for Railways Jeremy S. Regino told reporters last week.

“Our study is already ongoing, and we will have to decide on this within the year.”

In 2024, the Transportation department said that it plans to bid out the concession for the O&M of MRT-3 by the first quarter of this year.

“The study is now ongoing. This is a big project, and we are studying its implications. We are evaluating the best possible options,” Mr. Regino said.

He hinted that it is possible for the MRT-3 contract to lapse first before the DoTr comes up with a decision on the project.

The Sobrepeña-led Metro Rail Transit Corp. (MRTC) is set to turn over the MRT-3 to the government by July once its BOT agreement lapses.

The government said previously that it hopes to privatize MRT-3 before the contract expires this year.

The Transportation department is carefully studying its privatization options for the MRT-3, Mr. Regino said, adding that Asian Development Bank is also helping the agency assess whether it would go the solicited or unsolicited route for the project.

Meanwhile, Public-Private Partnership (PPP) Center Deputy Executive Director Jeffrey I. Manalo said that the DoTr had rejected the unsolicited proposal of Metro Pacific Investments Corp. (MPIC) for the MRT-3 project.

“In a letter dated Dec. 16, 2024, the DoTr informed the proponent of the rejection/return of its unsolicited proposal for the MRT-3 project pursuant to the grounds and procedures under the PPP Code and its IRR (implementing rules and regulations),” Mr. Manalo said in a Viber message to BusinessWorld on Monday.

BusinessWorld sought comment from MPIC but had not received a response as of the deadline.

Last year, the DoTr said the MPIC-Sumitomo Consortium had resubmitted their unsolicited proposal for the MRT-3 O&M contract.

For Nigel Paul C. Villarete, senior adviser on PPP at the technical advisory group Libra Konsult, Inc., a solicited mode would always be a better option and would serve the government’s best interest.

“In the solicited mode, the government determines what it exactly needs and requires, and has full control of the procurement process, and would have the full spectrum of the bidding to select the best offer,” Mr. Villarete said.

“Rail systems operate for a long time; thus, these PPP contracts are also for the long term. It would be in the best interests of the government and of the people if the procurement process is done carefully with the fullest of safeguards because we will be stuck with it for the longest time,” Mr. Villarete said.

Rene S. Santiago, former president of the Transportation Science Society of the Philippine, said the government should opt for an unsolicited scheme for the planned privatization of the MRT-3.

“Accept the unsolicited proposal. It is the most practical, and fastest, option. Potential non-fare revenues are very limited,” he said in a Viber message.

MPIC is one of the three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority share in BusinessWorld through the Philippine Star Group, which it controls.

DoF chief seeks to woo global investors in Davos

January 21, 2025 | 12:32 am

MORE INVESTMENTS would be needed for the Philippines to be able to reach the high end of its growth target, Finance Secretary Ralph G. Recto said.

This week, Mr. Recto is hoping to woo global investors at the World Economic Forum (WEF) annual meeting in Davos, Switzerland.

Mr. Recto, Trade Secretary Ma. Cristina A. Roque, House Speaker Ferdinand Martin G. Romualdez and Ambassador and Philippine Permanent Representative to the World Trade Organization (WTO) Manuel Antonio J. Teehankee are scheduled to hold an economic briefing for global investors in Davos.

“The event will showcase the country’s promising potential as the next big investment destination, especially with the recent enactment of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act,” the Department of Finance (DoF) said in a statement.

CREATE MORE expanded tax incentives and streamlined value-added tax processes in a bid to make the Philippines more attractive to foreign investors.

“In the latest DBCC (Development Budget Coordination Committee), our projected growth is 6% to 8%. It would appear that the consensus would be anywhere from 6% to 7%. But it all depends. We passed CREATE MORE. We’re going to WEF… We will present CREATE MORE, and hopefully we’re able to get more investments,” Mr. Recto told reporters on Jan. 16.

Asked if the 8% growth target is realistic, Mr. Recto said: “It all depends. It really all depends on how much investments take place.”

The DBCC in December widened the gross domestic product growth target band to 6-8% for 2025 until 2028, due to “evolving domestic and global uncertainties.”

The Finance chief is also slated to hold one-on-one meetings with global firms, including banks, manufacturers, and technology companies to discuss possible investment and expansion in the Philippines.

In a separate statement, Ms. Roque said the WEF “presents a unique platform to showcase the Philippines as a dynamic and a resilient economy, driven by innovation and inclusivity.”

“Our participation underscores our commitment to strengthening international partnerships that uplift Philippine industries to thrive in the global marketplace,” she said.

Also joining the economic team in Davos are top executives such as Globe Fintech Innovations, Inc. (Mynt) Chief Executive Officer Martha Sazon; LT Group, Inc. President Lucio C. Tan III; LT Group, Inc. Director and President of Asia Brewery, Inc. Michael G. Tan; Grab Philippines Chief Corporate Officer Sherielysse Bonifacio; and Benguet Corp. Director Maria Remedios Romualdez-Pompidou.

REVENUE COLLECTION
Meanwhile, preliminary figures provided by the DoF on Jan. 16 showed revenue collection hit P4.41 trillion in 2024, 0.59% higher than the P4.38-trillion target.

Broken down, the government collected P3.78 trillion in tax revenues and P625.96 billion in nontax revenues.

“But also because of the excess revenue to fund the unprogrammed appropriations, including Philippine Health Insurance Corp. (PhilHealth) and the Philippine Deposit Insurance Corp. (PDIC), including other dividends, we were able to generate an additional P200 billion so about P450 billion more or less next year,” Mr. Recto said.

State-run firms PhilHealth and PDIC remitted P60 billion and P107 billion in “excess funds” respectively to the Bureau of the Treasury.

DoF data showed Bureau of Internal Revenue (BIR) collections hit P2.83 trillion in 2024.

In a separate statement on Monday, BIR Commissioner Romeo D. Lumagui, Jr. said its collection “will exceed its P2.85-trillion collection goal by the billions,” as it waits for the final numbers to be reconciled by early February.

On the other hand, the Bureau of Customs (BoC) also surpassed its P939.7-billion target by 2.46% to P916.6 billion, while other offices collected P32.39 billion this year.

“Moving forward, I expect the BIR also to hit the target for 2025. The challenge would be a little more for BoC because we increased their target for next year. We want them to grow double digits also for next year,” Mr. Recto said.

For 2025, BIR has been tasked to collect P3.2 trillion, while P1.06 trillion for Customs.

“Assuming they have a shortfall, assuming they don’t hit the double digits, we’re preparing what can we do to ensure that we still collect the revenues so that we don’t increase the deficit by way of nontax revenues and other privatization proceeds,” Mr. Recto said. — A.R.A. Inosante

Elections may help boost consumer goods firms’ bottom line

January 21, 2025 | 12:31 am

supermarket-grocery-shopper — A shopper looks at products at a supermarket in Mandaluyong City in this file photo. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Revin Mikhael D. Ochave, Reporter

LISTED CONSUMER GOODS companies may see a boost in their bottom line this year as demand is expected to increase ahead of the May elections, analysts said.

AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said the likely increase in sales of fast-moving consumer goods during the campaign season would lift earnings of companies such as Jollibee Foods Corp., Puregold Price Club Inc., Universal Robina Corp., and Monde Nissin Corp.

“Historically, we tend to see higher spending on consumer goods during election years,” he said in a Viber message.

“This is more pronounced during presidential elections, but the effect is still there to a lesser extent during midterms,” he added.

Luna Securities, Inc. Research Officer and Market Strategist Annika Gabrielle S. Angeles said other companies also seen to benefit from the May elections include San Miguel Food and Beverage, Inc., Century Pacific Food, Inc., RFM Corp., and Emperador, Inc.

“Elections, both national and midterm, typically serve as a boost to the consumer sector. Power usage is also likely to rise due to heightened campaign activities,” she said in a Viber message.

Midterm elections are scheduled for May 12, when Filipinos will elect senators, congressmen and local officials.

The election period officially began on Jan. 12, but the 90-day campaign period for national candidates will start on Feb. 11. For local bets, the campaign period will begin on March 28.

“Midterm elections tend to boost the economy primarily due to the massive amount of campaign spending,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

“This should benefit a number of listed companies, particularly those in the consumer sector,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that consumer demand will likely get a boost during the election period.

“We could see increased demand for election-related materials such as posters, advertisements, food, beverage, transportation, accommodation facilities, venues, events-related, and other logistical requirements,” he said.

“These would all entail the creation of more jobs and other economic activities that would also translate to higher sales for some local companies,” he added.

Government spending on infrastructure will also likely accelerate ahead of the ban on public works which starts 45 days before the elections. Social welfare dole-outs are also prohibited during the period.

“The possible increase in government spending is also a source of additional growth for the local economy, since the voters look for accomplishments as basis for choosing candidates, both new and incumbent officials running for the midterm elections,” Mr. Ricafort said.

Meanwhile, Ms. Angeles said the outcome of the midterm elections could impact market sentiment.

“The midterm elections can influence broader market sentiment, with investors adjusting their expectations based on potential policy changes, such as tax reforms or infrastructure investments,” she said.

Mr. Colet said the local stock market will keep a close eye on the outcome of the midterm elections and its implications on governance and political dynamics for the second half of President Ferdinand R. Marcos, Jr.’s term.

“A strong win for the Marcos ticket would imply policy continuity and administrative stability, so that should be generally positive for stocks,” he said.

“The momentum of President Marcos’ reform agenda will require a solid coalition in both the Senate and House to ensure the passage of important economic bills and initiatives,” he added.

Marcos pushes for Tesla EV plant

January 21, 2025 | 12:07 am

PRESIDENT Ferdinand R. Marcos, Jr. on Monday urged Tesla, Inc., a multinational automotive and clean energy company, to manufacture electric vehicles (EVs) in the country, citing government efforts to advance the country’s EV transition.

He was speaking at the formal opening of the company’s headquarters in Bonifacio Global City in Taguig City.

“It is our fervent hope that Tesla might one day choose to manufacture its vehicles in the Philippines,” he said, citing the company’s “plans to expand further” in the Philippines.

“Tesla is building a generation of Filipinos equipped to lead in the global shift towards sustainable technologies such as this,” he said.

The Tesla Center Philippines is a 1,900-square-meter showroom, service center, delivery center, headquarters, and main office of Tesla Motors Philippines, Inc., a subsidiary of Tesla.

The subsidiary is responsible for Tesla’s importation, customer support, services, charging infrastructure deployment, and other operations in the Philippines.

Tesla has a market capitalization of above $1.2 trillion, according to a press release from the Presidential Communications Office. Its stock price as of Jan. 20 was valued at $426.50.

Mr. Marcos said Tesla’s entry into the country “will encourage local innovation and drive new investments in the EV sector.”

Tesla’s decision to invest in the Philippines is a recognition of the country’s potential, “underpinned by forward-thinking policies and a collective determination to innovate,” he added.

Mr. Marcos cited advancements in the Philippines’ transition to clean technologies, including the launch in September of the country’s first manufacturing plant for EV batteries.

“With a more conducive and empowering environment now taking shape for the EV industry, I am very optimistic that more companies will seize the opportunity to drive this very vital sector in the coming years,” he said.

Mr. Marcos also cited the removal of excise taxes on battery electric vehicles under the Tax Reform for Acceleration and Inclusion or TRAIN Act, as well as the Electric Vehicle Industry Development Act (EVIDA), which mandated the creation of a strategic roadmap for the country’s EV transition and led to several incentives for users.

The Department of Energy (DoE) in September last year said it was creating guidelines on the construction of EV charging stations in gasoline hubs, in keeping with EVIDA.

Section 19 of the law requires gasoline station owners to install, operate, or maintain a commercial-use charging station for EVs.

The law gives the DoE the power to deny gasoline stations permits if they have no ample space for the EV charging stations.

“What may seem as aspirational today — half of the vehicles in our streets as EVs — will become attainable tomorrow,” Mr. Marcos said.

He said the launch of the Tesla Center Philippines is also a boost to the Filipino workforce, which “will drive this transition forward.”

The Philippines became Tesla’s fourth market in Southeast Asia on Nov. 8, 2024, following Singapore, Thailand, and Malaysia.

“It is a step — a very significant step forward to our long-term transformation towards a more environment-friendly transportation system,” Mr. Marcos said. — Kyle Aristophere T. Atienza

Megawide sets P1.8B for 2025 capex

January 21, 2025 | 12:06 am

Megawide-construction workers — MEGAWIDE.COM.PH

MEGAWIDE Construction Corp. is earmarking P1.8 billion for its capital expenditure (capex) budget this year to support growth in its real estate and construction businesses, its president said.

“About P1.8 billion. Half will be real estate-related, and half will be in construction and transport,” Megawide President and Chief Executive Officer Edgar B. Saavedra told reporters last week.

In comparison, Megawide allotted P3 billion for its capex budget last year.

Mr. Saavedra said Megawide’s topline is expected to grow by 20% to 30% this year, led by the company’s real estate business.

He added that Megawide’s bottom line is expected to grow faster than its topline, without providing specific figures.

Megawide operates in the property sector via its subsidiary PH1 World Developers, Inc.

Mr. Saavedra said Megawide is focusing on the lower segment of the real estate market.

“We’ll focus on the lower market, below P3.5 million, or around P2.5 million, that’s the real backlog,” he said.

However, Mr. Saavedra noted that mid-segment offerings have experienced some softness due to excess supply.

He also said that PH1 may have its initial public offering in three years.

Megawide recently secured a contract from the Office of the Provincial Governor of the Province of Cavite to construct and develop the P1.87-billion Cavite Bus Rapid Transit (BRT) project.

Partial operations of the project are expected to start by September this year.

For the first nine months, Megawide’s net income increased by 69% to P562 million as revenue grew by 7.2% to P16.3 billion.

The construction segment accounted for P15.5 billion or 96% of consolidated revenues due to increased economic activities and the government’s infrastructure buildup.

Megawide shares fell by 1.54% or four centavos to P2.56 apiece on Monday. — Revin Mikhael D. Ochave

Cemex PHL targets profitability in three years

January 21, 2025 | 12:05 am

CEMEX Holdings Philippines, Inc. (CHP) expects profitability in three years as the cement company pushes for a financial turnaround.

“Our target is profitability in three years. There are a lot of things to do. There is room for improvement,” CHP President and Chief Executive Officer Herbert M. Consunji told reporters on the sidelines of an event in Taguig City last week.

“It cannot be immediate because we are coming from a net loss,” he added.

Mr. Consunji said that CHP, the country’s fourth-largest cement producer, is looking to implement operational efficiencies to boost its financials.

“At least to go above water. We have a lot to fix in the operations,” he said when asked about CHP’s target this year.

Mr. Consunji said that CHP hopes to reduce its losses this year amid recent cost-cutting initiatives.

“A lot will be removed, such as expenses, royalties, and so on. Although the interest costs are high again. We will try everything,” he said.

Following the announcement of CHP’s acquisition, DMCI Holdings, Inc. Chairman and President Isidro A. Consunji said in April last year that the cement manufacturer is expected to have a financial turnaround this year, led by stronger demand and the government’s infrastructure program.

On Nov. 29, CHP completed the sale of its shares in foreign reinsurance unit Falcon Re Ltd. to Torino Re Ltd. for $3 million.

CHP also previously sold its entire stake in Swiss-based Cemex Asia Research AG to Cemex Innovation Holding AG for $900,459.

On Dec. 2, Consunji-led companies DMCI Holdings, Inc., Semirara Mining and Power Corp. (SMPC), and Dacon Corp. finalized the purchase of Cemex Asian South East Corp. (CASEC), which owned 89.86% of CHP.

The deal was valued at $272 million and marked the Consunji group’s entry into the cement manufacturing business.

DMCI clinched a 51% effective stake in CHP, while Dacon Corp. and SMPC accounted for 29% and 10%, respectively, at the financial close of the transaction.

For the first nine months, CHP increased its net loss by 131% to P2.87 billion due to lower cement prices, higher financial expenses, and higher income tax expenses year-over-year.

Revenue declined by 9.4% to P12.21 billion due to intense industry competition and lower cement prices.

CHP shares fell by 1.12% or two centavos to P1.77 apiece on Monday. — Revin Mikhael D. Ochave

LANDBANK and DBP recapitalization: How feasible (or can this IPO fly?)

January 21, 2025 | 12:04 am

AS A FOLLOW UP to my piece on October 2023 about the negative impact of the equity investment into the Maharlika Investment Corp. (MIC) on the capital ratios of Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP), my “Introspective” piece on Jan. 6 this year showed that after one year, the DBP remained slightly below the 10% regulatory minimum for Common Equity Tier 1 (CET1) through 2023, while the LBP’s numbers were already above minimum and significantly improved during 2023.

This writer has come upon new information that shows that the LANDBANK and DBP capital ratios are actually better than earlier computed. BSP Circular No. 781 series of 2013 (Part II, Item 9) — also published as Annex 59 of the Manual of Regulations for Banks (MORB) of 2021 — provides that “Any asset deducted from qualifying capital in computing the numerator of the risk-based capital ratio shall not be included in the risk-weighted assets in computing the denominator of the ratio.” Credit to LANDBANK President Lynette Ortiz and her Controllership group for pointing out Circular 781.

Based on the accompanying table, the DBP’s adjusted CET1 ratio by end 2023 was at 9.47%. If the DBP just records the same income for 2024 as it earned in 2023 (no profit growth) and its Risk weighted assets (RWA) grows minimally instead of contracting again, my estimate of its adjusted CET1 ratio of 10.35% will have met the 10% regulatory minimum. Hence, DBP President Michael de Jesus was correct in saying that “DBP… will meet the minimum capital ratios based on the results of 2024.”

In contrast, the Department of Finance (DoF) statement citing healthy Capital Adequacy Ratio (total CAR) for LBP at 16.42% and DBP at 14.78% as of November 2024 (https://tinyurl.com/2csrrx6o) is misleading on two counts — first, it refers only to the total CAR not CET1, and, second, the number does not account for capital deduction from the Maharlika Investment Fund (MIF) equity investment. The correct number is the CET1 adjusted for MIF equity.

RECAPITALIZATION OR IPO
This writer called out the recent IMF call for the immediate recapitalization of both government financial institutions (GFIs) so they could exit regulatory relief as half-wrong and one year late. Based on the updated/adjusted figures, the IMF was wholly wrong, since even the DBP would already be compliant by the end of 2024.

At the start of his term as Secretary of Finance, Secretary Ralph Recto announced the possibility of an initial public offering (IPO) for LBP and DBP to bolster their capital ratios. (“IPO seen to strengthen Land Bank, DBP,” Philippine Daily Inquirer, Feb. 23, 2024). This followed his announcement of the scrapping of the merger of LANDBANK and the DBP as proposed by his predecessor, Ben Diokno.

Bills were filed in Congress to amend the GFIs respective charters — Senate Bill 2804 (Senators Mark Villar and Francis Escudero) and House Bills 10720 (Rep. Bernadette Escudero) and 10817 (Rep. Wowo Fortes) for the DBP, and Senate Bill 2760 for LBP (Senator Escudero).

This piece discusses whether the proposed amendments to the charters of the LBP (RA 3844, as amended) and the DBP (RA 8523 amended by EO 81) are supportive of their recapitalization, and whether it can lead to a successful IPO.

The critical factors are the increase in authorized capital, the building blocks in governance structures necessary for a successful public listing, and whether market conditions are favorable for such a public listing.

INCREASE IN AUTHORIZED CAPITAL
To pay for the additional paid-in capital called for by proposed charter amendments, the National Government has to infuse a total of P66.5 billion in paid-in capital to both GFIs, broken down as follows:

1. LBP, P50 billion. The proposed increase in authorized capital from P200 billion to P1 trillion (Section 6, SB 2670), means an increase of P800 billion. Under the Revised Corporation Code (RCC), 25% or P200 billion of this increase in authorized capital has to be subscribed. And 25% of the incremental subscription is P50 billion. This amount is exactly the P50 billion taken out of LBP for investment in Maharlika.

2. DBP, P16.562 billion. Authorized capital from P35 billion — of which P32 billion currently paid up — to P300 billion, or an increase of P265 billion (Section 7, SB 2804 and HB 10720, HB10817). Incremental subscription of 25% amounts to P66.25 billion; the corresponding additional paid up 25% of subscribed is P16.5625 billion. This additional paid-in capital of P16.562 is less than the P25 billion transferred to Maharlika.

The idea of the National Government having to recapitalize LBP and DBP to the tune of P66.5 billion raises a most basic question — why did they have to take out the capital from both GFIs in the first place?

How will the National Government infuse the additional paid in capital?

Option 1. Infuse cash. Very unlikely, given fiscal constraints such that DoF even had to resort to “sweeping” the so-called “excess funds” from various GOCCs — including PhilHealth and Philippine Deposit Insurance Corp.

Option 2. Extended “Dividend relief.” Most likely, both GFIs will be exempted from RA 7656 requiring them to declare 50% of their net income as dividends, until their capital build up meets the target amount. At current rates, this could take two to three years for the LBP and three to four years for the DBP. This “dividend relief” is completely separate from “regulatory relief” from minimum capital ratios, which is no longer an issue by end 2024 for DBP and was never an issue for LBP.

BUYING SHARES
Will the investing public be allowed to buy LBP and DBP shares? Yes.

Their original charters provide that only the National Government can own their shares. The proposed amendments now allow them to issue common and preferred shares (DBP Section 6, item k; for LBP Section 3 item n). The National Government will retain majority ownership of 70% while Government-Owned and -Controlled Corporations (GOCCs) can buy non-voting preferred shares of both GFIs.

THE MISSING INGREDIENTS
The following are missing in the proposed charter amendments:

1. No provision for an independent external auditor aside from the Commission on Audit (CoA). This is an important governance element if the goal is to attract local and foreign investors and strategic partners. This provision for a third-party independent external auditor (on top of the CoA audit) was incorporated in the House version and RA 11954 creating the Maharlika Investment Fund. (Thank you, Congressman Joey Salceda for adopting this suggested amendment to the bill.)

2. No clear provision for the timely filing of audited financial statements (AFS) with the local stock exchange. A third-party external auditor would improve this timeline significantly towards global standards. The best practice under the ASEAN Corporate Governance Scorecard (ACGS) is to file the audited financial statement (FS) within 90 calendar days from end of the calendar year — March 1 or Feb. 29 (for leap years). In contrast, the CoA-audited FS 2023 for the DBP became available only in June 2024 while that of the LBP in September 2024 (October 2023 for the 2022 AFS). This late filing/disclosure would be unacceptable to private investors, as it would mean a very late annual stockholders’ meetings.

3. No provision for an annual stockholders’ meetings (ASM), at which the management and the board of directors report to the shareholders — with new stockholders (local and foreign, institutional and retail) — the results of the prior year and secure stockholders’ ratification for the acts of the board and management. The declaration of dividends is announced at the ASM, following an approved dividend declaration policy. The appointment of the third-party external auditor is also approved by the stockholders upon recommendation of the board and its audit committee.

This is what Foundation for Economic Freedom President Calixto “Toti” Chikiamco meant in his statement supporting the announced IPO that “apart from strengthening their balance sheets, being publicly listed will help in bank governance as the boards and managements must answer not only to the government but also to private investors.”

Even if all the building blocks for an IPO are in place, will the shares of the LBP and the DBP be attractive to investors? The short answer is NOT AT THE PRESENT TIME.

1. Investors expect an IPO company to have a track record of consistent and solid returns which underpins their expectations of dividends and stock price appreciation. Both GFIs need several years to establish this track record. They also need to get past the historical narrative of having to request for regulatory relief and dividend relief, and having been receptacles for “behest” loans in the past.

2. Market conditions not favorable. As of the end of December 2023. only three banks listed in the Philippine Stock Exchange have share prices above book value — Banco de Oro, Bank of the Philippine Islands, and China Banking Corp.(disclosure: this writer was head of investor relations for China Bank for 27.5 years until retirement three years ago). The rest of the listed banks are trading below book despite delivering return on equity of 15-16% in the previous few years.

In conclusion: the proposed charter amendments are steps in the right direction, but a few crucial elements are still missing. Once enacted, the revised charters (hopefully revised to fill in the “missing ingredients”) will be a good foundation for a successful IPO. The increase in paid-in capital has to happen first, which will boost their capacity to perform at a higher trajectory. Thereafter, a good track record and favorable market conditions augur well for a successful IPO.

Alexander C. Escucha is president of the Institute for Development and Econometric Analysis, Inc. (IDEA), and chairman of the UP Visayas Foundation, Inc. He is a fellow of the Foundation for Economic Freedom and a past president of the Philippine Economic Society. He is an international resource director of The Asian Banker (Singapore).

alex.escucha@gmail.com

Chinese forms of expression at the 19^th Spring Film Festival

January 21, 2025 | 12:04 am

A WIDE variety of Chinese films and other creative endeavors — like dance, traditional music, and calligraphy — will be in the spotlight for this year’s Spring Film Festival at the Shangri-La Plaza Mall in Mandaluyong City.

The 19^th edition of the film festival will run from Jan. 29 to Feb. 2, during which time four Chinese films will be screened for free.

One is Foo Sing-Chong’s 2015 3D-animated comedy Where’s the Dragon?, which features a star-studded voice cast including Zhang Ziyi. It follows a 10-year-old girl who goes on an adventure with the animals of the Chinese zodiac in search of the missing dragon.

Those looking for a bittersweet romance can watch Somewhere Winter (2019) by Wang Weiming. The story is based on a novel by Rao Xueman, where young love blooms between a Chinese student and a Taiwanese photographer and this love is put to the test by familial pressures.

Find Your Voice (2020) by Adrian Kwan is a drama about a renowned conductor in the United States returning to his native Hong Kong to mentor a choir of pessimistic students. With Andy Lau in the lead role, the film aims to show how music can inspire.

For those who enjoy comedy-drama, One More Chance (2023) by Anthony Pun promises humor and redemption for its flawed main character. Here, Chow Yun-fat plays a compulsive gambler who must step up to support his son with autism.

Admission to the screenings throughout the five days is free. Tickets are given on a first-come, first-served basis.

DANCE AND CALLIGRAPHY
Aside from watching films, visitors can partake in several other activities.

There will be a calligraphy workshop on Feb. 1 at the mall’s Grand Atrium, where an instructor will talk about the art of Chinese calligraphy. On Feb. 2, a Chinese music concert will feature performers who will stage traditional songs and dances.

From Feb. 1 to 2, there will be a cultural bazaar offering Chinese snacks and items also at the Grand Atrium.

The film festival, which will be held at the Red Carpet Cinemas of the mall, is organized by the Ateneo Ricardo Leong Center for Chinese Studies in partnership with Ateneo de Manila University’s Chinese-Filipino organization Celadon, and in cooperation with the Film Development Council of the Philippines.

For the full screening schedule and more information, visit the Spring Film Festival and Shangri-La mall social media pages. — Brontë H. Lacsamana

PSE acquiring more PDS shares

January 21, 2025 | 12:04 am

THE Philippine Stock Exchange, Inc. (PSE) is increasing its stake in the Philippine Dealing System Holdings Corp. (PDS) to 88.44%.

The market operator is buying 250,000 PDS common shares held by AIA Philippines Life and General Insurance Co. Inc., equivalent to a 4% stake, under a share purchase agreement.

“With this acquisition, the company will own a total of 88.44% of PDS, inclusive of the company’s existing 20.98% equity interest,” the PSE said in a regulatory filing on Monday.

“The acquisition is subject to customary closing conditions such as the required corporate approvals and delivery of closing certificates,” it added.

The PSE also previously entered into a share purchase agreement with the Financial Executives Institute of the Philippines Research and Development (FINEX) Foundation to acquire 96,388 common shares of PDS, equivalent to a 1.54% stake.

In December, the PSE secured a P2.32 billion deal with various shareholders to acquire their stakes in PDS as part of unifying the local capital markets.

The deal consisted of 3.87 million PDS shares at P600 apiece, equivalent to a 61.92% stake.

The PSE signed term sheets with the Bankers Association of the Philippines (BAP) for its 28.83% stake, as well as with Mizuho Bank Ltd. for its 0.08% stake.

The market operator also signed share purchase agreements to acquire Singapore Exchange Ltd.’s (SGX) 20% stake, Whistler Technologies, Inc.’s (WTSI) 8% stake, San Miguel Corp.’s (SMC) 4% stake, the Investment House Association of the Philippines’ (IHAP) 0.65% stake, and Golden Astra Capital, Inc.’s 0.36% stake.

The PDS owns fixed income exchange operator Philippine Dealing and Exchange Corp., as well as the equities and fixed income securities depository Philippine Depository & Trust Corp.

The PSE said the acquisition of PDS will provide investors with a facility to trade fixed income, equities, and other products in a unified marketplace.

“These signed agreements bring us a step closer to achieving our objective of consolidating the equities and fixed income exchanges and realizing the synergies and efficiencies from this unified setup,” PSE President and Chief Executive Officer Ramon S. Monzon said.

“This will also allow us to be instrumental in the growth and development of the Philippine capital market with the introduction of new products for various stakeholders as well as the implementation of risk management processes,” he added. — Revin Mikhael D. Ochave

Gov’t upsizes T-bill award as yields drop further

January 21, 2025 | 12:04 am

THE GOVERNMENT hiked the volume of Treasury bills (T-bills) it awarded on Monday as rates dropped further on market preference for shorter tenors and amid expectations of a rate cut by the Bangko Sentral ng Pilipinas (BSP) next month.

The Bureau of the Treasury (BTr) raised P27.6 billion from the T-bills it auctioned off on Monday, higher than the initial P22-billion plan, as total bids reached P93.89 billion, more than four times as much as the amount on offer. This was also slightly higher than the P93.776 billion in tenders seen on Jan. 13.

The strong demand led the Treasury to double the accepted non-competitive bids for the three- and six-month T-bills to P5.6 billion each, it said in a statement.

Broken down, the Treasury borrowed P9.8 billion from the 91-day T-bills, higher than the programmed P7 billion, as tenders for the tenor reached P34.41 billion. The three-month paper was quoted at an average rate of 5.165%, falling by 42.3 basis points (bps) from the 5.588% seen at the previous auction, with accepted rates ranging from 5.048% to 5.244%.

The government likewise made a P9.8-billion award of the 182-day securities, above the P7-billion program, as bids stood at P30.25 billion. The average rate of the six-month T-bill stood at 5.503%, dropping by 13.5 bps from the 5.638% fetched previously, with accepted bid rates at 5.423% to 5.58%.

Lastly, the Treasury raised P8 billion as planned via the 364-day debt papers as demand for the tenor totaled P29.23 billion. The average rate of the one-year debt decreased by 5.1 bps to 5.84% from 5.891% last week, with bids accepted carrying rates of 5.82% to 5.845%.

At the secondary market before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.4973%, 5.6265%, and 5.8954%, respectively, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data provided by the Treasury.

“Treasury bill average auction yields declined for the third straight week after the latest week-on-week decline in most short-term PHP BVAL yields to the lowest in two to three months on a possible local policy rate cut as early as the first BSP rate-setting meeting in 2025,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The government upsized its T-bill award as rates of the debt papers continued to drop amid strong demand, a trader said by phone. “A lot of investors are repositioning in the shorter tenors for the start of the year.”

The Monetary Board will hold its first policy meeting for this year on Feb. 20.

BSP Governor Eli M. Remolona, Jr. this month said the central bank still has room to continue cutting interest rates as inflation is well within its annual goal, adding that current benchmark borrowing costs remain “restrictive.”

He previously said 100 bps worth of cuts this year may be “too much” amid inflation concerns.

The Monetary Board has slashed benchmark borrowing costs by a total of 75 bps since it began its easing cycle in August, bringing its policy rate to 5.75%.

Expectations of further monetary easing by the US Federal Reserve this year following the release of soft economic data also caused T-bill yields to decline, Mr. Ricafort added.

On Tuesday, the BTr will offer P30 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of nine years and 14 days.

The Treasury is looking to raise P213 billion from the domestic market this month, or P88 billion via T-bills and P125 billion through T-bonds.

The government borrows to help fund its budget deficit, which is capped at P1.54 trillion or 5.3% of gross domestic product this year. — A.M.C. Sy

Damosa’s Bridgeport Park condo seen completed by 2028

January 21, 2025 | 12:03 am

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DAVAO-based property developer Damosa Land, Inc. (DLI) expects to complete the construction of its Bridgeport Park condominium by 2028, according to its chief executive officer (CEO).

“For Bridgeport Park, which is our condo project there, there are four buildings, with a total value of about P2.3 billion,” Damosa President and CEO Ricardo F. Lagdameo said in an interview with BusinessWorld.

“We launched that two years ago, and it is currently under construction. We’ve sold out probably close to 85% of that project already,” he added.

The project is within Bridgeport, a 13-hectare mixed-use development inspired by the architectural style of the United States East Coast area.

It is located in Barangay Caliclic, Samal Island, Davao del Sur, offering scenic views of the Davao Gulf and Mount Apo.

The first tower within Bridgeport Park, Azure, will be completed by April this year, with the turnover of units on track by the second quarter.

The second tower, called Sapphire, is targeted for completion by the first quarter of 2026.

Meanwhile, the third (Royal) and fourth (Navy) towers will be finished by early 2027 and 2028, respectively.

As of Dec. 31, DLI has sold 228 out of the 274 target units within Bridgeport Park. The average price of a unit is around P200,000 per square meter (sq.m.).

Main doors in all Bridgeport Park units will have a smart lock that allows owners to enter via RFID key tag, passcode, or through their mobile app, according to the company.

Road networks within Bridgeport Park have been “substantially completed,” and all underground utilities are fully installed, the company noted.

The construction of its hiking path and sewage treatment plant is underway, while the clubhouse is likely to be completed by the second quarter of 2025.

Also near Bridgeport Park is about 18,000 sq.m. of open space for road networks, parks, green spaces, and exclusive amenities.

Bridgeport is also home to a gated subdivision called the Harborview Estates, a lighthouse, and a marina managed by the Davao Boat and Leisure Club.

The development also features a 1,200 sq.m. exclusive events place called The Shipyard, which can cater to up to 500 guests. — Beatriz Marie D. Cruz

Management excellence for a progressive Philippines

January 21, 2025 | 12:03 am

employee-organization — KATEMANGOSTAR/FREEPIK

(This was lifted from the Inaugural Address of the author as the 77^th President of the Management Association of the Philippines.)

As in the past, the Management Association of the Philippines’ (MAP) activities this year will be guided by a theme.

For 2025, we will once again build on MAP’s legacy, its strengths, while forging forward to a relevant and progressive future.

For MAP’s 75^th Year — our Diamond Anniversary — we have chosen a theme aligned with MAP’s mission of promoting management excellence for nation-building. The MAP Board of Governors has chosen the theme: “Management excellence for a progressive Philippines.”

To continue and sustain the noteworthy projects that were initiated or implemented by last year’s Board, MAP will continue to pursue the following four thrusts:

1. Member Engagement,

2. Country Competitiveness,

3. ESG and Shared Prosperity, and,

4. Investing in the Youth.

Last year, there were five thrusts. This year, these were merged into four. Last year’s Cluster on Innovation, Technology and Digitalization has been merged into the Cluster on Country Competitiveness, not so much because there is less to do, but because our hope is that in focusing, we sharpen the impact.

It will be a bottom-up process, where we will work with the committees with all their initiatives, and these will be presented to the Board.

MEMBER ENGAGEMENT
We will continue to ensure the relevance of the topics and issues covered in the MAP general membership meetings or GMMs in order to engage the membership in a more meaningful way. We will cover relevant topics and developments so as to benefit the members, their companies, and the economy.

We will hold two to three GMMs outside Metro Manila (MM), so we can engage our members in the Visayas and Mindanao. Through technology and its proactive application, we will continue enabling virtual participation of members outside MM in our various activities. This will enable MAP to help expand business and economic development benefits to the rest of the country.

COUNTRY COMPETITIVENESS
We will continue to push for vital policy reforms, through executive or legislative action, that will eliminate corruption, improve the ease of doing business, ensure food security through agricultural productivity, and sustain an enabling business environment for local and foreign investors. The aspiration is to attract greater and more diverse job-creating investments for more Filipinos to be gainfully employed.

ESG AND SHARED PROSPERITY
We will continue advancing Environmental, Social, and Governance (ESG) principles and fostering Shared Prosperity as a key strategic thrust for the year. By integrating sustainable practices, promoting ethical leadership, and driving inclusive growth, we aim to create long-term value for MAP members and all other stakeholders. We will continue pushing for the discourse and activities to champion responsible business, uplift communities, and contribute to a resilient and equitable future for the Philippines.

INVESTING IN THE YOUTH
We will continue the Campaign Against Malnutrition and Child Stunting or CAMACS and we will continue advocating for government and the private sector to pursue relevant education, health and wellness programs, particularly for the youth. The objective is for the youth to become productive members of society, with competitive skills and capacity that will ensure a progressive economy of the future.

MAP MEMBERS’ TOP 7 CONCERNS FOR 2025
We did a survey late last year, and we will certainly address the top seven concerns of MAP members:

1. Corruption

2. Education

3. Economy

4. Ease of Doing Business (EODB)

5. Climate Change

6. Cybersecurity

7. Dealing with LGUs

Please note that all your top seven concerns will be directly addressed by the four thrusts that I have explained.

To address Corruption and EODB, we will continue to participate actively in the programs of the Anti-Red Tape Authority (ARTA).

MAP COMMITTEES UNDER FOUR CLUSTERS
In general, we will build on MAP’s ongoing activities that benefit our members and other stakeholders.

While focusing on the four main thrusts, we will continue to pursue other advocacies and programs to adapt to developments in the domestic and global landscape.

Your 2025 Board will work with the 25 MAP committees which shall be grouped according to our four main thrusts for 2025:

1. The Member Engagement group will be headed by yours truly, VP Mike Toledo and Noel Bonoan.

2. The Country Competitiveness group will be headed by Rene Almendras and Gil Genio.

3. The ESG and Shared Prosperity group will be led by Rex Drilon II.

4. The Investing in the Youth group will be handled by Paolo Borromeo and Maan Hontiveros.

MAP’S 75^TH ANNIVERSARY ACTIVITIES
As I mentioned earlier, MAP is turning 75 this year and we have lined up the following activities, among others, to commemorate this very important landmark in the history of our Association:

1. We will have an Anniversary Dinner-Concert with the Manila Symphony Orchestra in July.

2. We will develop an updated MAP video that can be used in succeeding years, regardless of who the next MAP President will be. So, it will be a timeless video for the association. We hope to launch the new MAP Video during the Anniversary Dinner.

We will certainly have other activities in celebration of this milestone. And definitely, we will announce all these in due time as we are able to develop the said programs.

Before I close, I’d like to assure everyone that on our Diamond Year, we will not just commemorate the past — we will fortify and lay the seeds in shaping the next 75 years and beyond.

We, in the Board — hand in hand with each one of you, our MAP members, particularly all the Committee Chairs and Vice-Chairs — know that with your active participation and support, 2025 will see the realization of these goals into real change and meaningful impact.

Thank you for your trust, your passion, and your commitment. Let’s make 2025 a year of progress — not just for MAP, but for the Philippines.

Aside from being the 77^th President of the MAP, Alfredo S. Panlilio is also the Chair of Maya Bank.

map@map.org.ph