PHL business optimism sinks to new low in second half of 2020
ECONOMIC OPTIMISM among Philippine midsized businesses continued to fall in the second half of 2020, as the pandemic continued to weigh heavily on the economy. Read the full story.
MIAA board shuts door to Megawide’s NAIA rehabilitation proposal
By Arjay L. Balinbin, Senior Reporter
THE MANILA International Airport Authority (MIAA) board has junked the appeal filed by Megawide Construction Corp. and its foreign partner GMR Infrastructure Ltd. seeking to overturn the revocation of its original proponent status (OPS) for the Ninoy Aquino International Airport (NAIA) rehabilitation.
“I was not present in that meeting, but I was informed that Megawide’s motion for reconsideration was indeed denied by the MIAA board,” Justice Secretary Menardo I. Guevarra, a member of the MIAA board of directors, told BusinessWorld in a phone message on Monday.
Sought for comment, Megawide said via Viber: “We respect the government’s decision on this matter.”
In a phone message to BusinessWorld on Monday, MIAA General Manager Eddie V. Monreal said it would issue a statement “once an official document is released citing the board’s decision on the matter.”
“The statement shall be publicized in accordance with proper protocol (i.e. resolution is signed, decision was rightfully communicated to all parties concerned),” he added.
Transportation Secretary Arthur P. Tugade and Transportation Undersecretary Manuel Antonio L. Tamayo serve as the MIAA board’s chairman and alternate chairman, respectively. Mr. Monreal serves as vice chairman.
Aside from Mr. Guevarra, the other members of the MIAA board are Office of the President Undersecretary Jesus Melchor V. Quitain, Civil Aviation Authority of the Philippines Director-General Jim C. Sydiongco, Tourism Secretary Bernadette T. Romulo-Puyat, Finance Secretary Carlos G. Dominguez III, and private sector representatives Leoncio Dakila S. Nakpil and Leonardo P. Lopez.
Mr. Dominguez said in a Viber message, “The DoF, as part of the board, is awaiting the proper clearances and protocols regarding board resolutions. Once cleared, we will share the official position on the matter.”
On Jan. 15, the listed builder said it was willing to move on to other projects “that have equal significance” if the MIAA board decides not to reinstate the tandem’s original proponent status (OPS) for the NAIA rehabilitation project.
According to Megawide,the National Economic and Development Authority-Investment Coordination Committee last November asked for the submission of additional requirements that demonstrate the consortium’s capability to undertake the P109-billion project. The Megawide-GMR tandem submitted documents showing its financial capability on Nov. 20.
However, the MIAA board in December revoked the OPS granted to Megawide-GMR.
Gov’t hopes to achieve key development goals by 2022
THE GOVERNMENT’S goal to bring down poverty rate to 14% and lift the economy’s status to the upper-middle income group next year can still be achieved despite the impact of the pandemic, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said.
Mr. Chua, who also heads the National Economic and Development Authority (NEDA), said these key development goals, which the Duterte administration adopted in 2016, will be kept in the updated Philippine Development Plan (PDP) 2017-2022.
“[These goals can still be achieved since] we had advanced progress for both in 2018 and 2020 before the pandemic,” he told BusinessWorld.
Under the PDP, the government aimed to reduce the poverty rate to 14% and to become an upper-middle income economy by 2022.
The coronavirus disease 2019 (COVID-19) pandemic reversed the country’s gains in poverty reduction, with the World Bank estimating 2.7 million more Filipinos have slipped into poverty (living below $3.2 a day) last year due to job losses and lower incomes.
Latest data showed poverty incidence — the proportion of Filipinos whose incomes were below the poverty threshold — declined to 16.7% in 2018 from the revised 23.5% in 2015, or equivalent to 5.9 million Filipinos lifted out of poverty.
The pandemic also derailed the Philippines’ goal to become an upper-middle economy by 2020. Latest World Bank data showed the Philippines remained as a lower-middle income economy with a gross national income (GNI) per capita of $3,850 in 2019, edging up from 2018’s $3,170.
The country’s GNI relative to its population will have to hit the $4,046-$12,535 income bracket to reach upper-middle income status.
The NEDA board, chaired by President Rodrigo R. Duterte, on Jan. 7 approved the country’s revised medium-term economic development blueprint. The full report will be launched on Feb. 4. — Beatrice M. Laforga
Cavite sees ‘infirmities’ in MacroAsia-CCCC’s Sangley submissions
Final decision this week on consortium’s bid for first phase of $10-B airport project
By Arjay L. Balinbin, Senior Reporter
THE Cavite government saw “infirmities” in the required documents submitted by the consortium of MacroAsia Corp. (MAC) and China Communications Construction Co. Ltd. (CCCC) for the Sangley Point International Airport project, the province’s top official said.
This week, Cavite’s public-private partnership selection committee will have to make a final decision as to whether the province should stop or continue to deal with the consortium for the first phase of the $10-billion airport project.
“The selection committee will meet and submit their final recommendation this week,” Cavite Gov. Juanito Victor “Jonvic” C. Remulla, Jr. told BusinessWorld in a phone message on Monday.
“I will abide by their decision,” he added.
On Nov. 25 last year, the governor said MacroAsia and CCCC had formally submitted their consortium agreement.
The next step was to evaluate the validity of the agreement before the province could seal a joint venture deal with the consortium.
Mr. Remulla had expected the joint venture deal signing to take place in December, but it did not happen because the provincial government saw compliance issues.
“There were infirmities with the submissions,” he said on Monday.
He also noted that it is still too early to plan on contingencies. “Let’s wait for the selection committee’s recommendations.”
The consortium had asked the Cavite government thrice to give it more time to complete and submit the final requirements for the project, which were supposed to be submitted 60 days after the group received the notice of award in February last year.
Initially, it was given until the second week of June to process and submit the documents before a joint venture development agreement could be signed, but the consortium members asked for a further 90-day extension.
The tandem missed the deadline for complete submission on Sept. 9, so it was extended for another 90 days.
The province had expected to break ground with its joint venture partner for the first phase of the airport project by the second quarter of 2020.
The first phase of the project, which will cost $4 billion, covers the construction of the Sangley connector road and bridge to connect the Kawit segment of the Manila-Cavite Expressway to the international airport.
Phase 1 also involves the construction of the airport’s first runway. The airport is rated at 25 million passengers yearly, and is intended to help decongest the Ninoy Aquino International Airport.
The airport was initially expected to be fully operational by 2023, with partial operations starting a year earlier. A fourth runway would be opened after six years.
AC Energy to take majority stake in Solar Philippines unit
Ayala-led AC Energy Corp. is set to own the majority stake in a solar farm subsidiary of Solar Philippines Power Project Holdings, Inc. after forging a deal to acquire 99% of the unit’s primary and secondary shares for P619,000, the listed firm told the local bourse on Monday.
The transaction will give AC Energy the chance to earn a stable dividend income from the operations of the solar power project under Solar Philippines Central Luzon Corp. (SPCLC), one of the special purpose vehicles under the holding firm founded by Leandro L. Leviste.
In a regulatory filing on Monday, AC Energy said that it signed a subscription agreement with Mr. Leviste’s holding firm to SPCLC’s common shares for P375,000. The shares are to be issued out its unissued authorized capital stock.
AC Energy said that it had also inked a deed of absolute sale of shares to buy SPCLC’s secondary common shares for P244,000. SPCLC is a special purpose vehicle for the development and operation of projects that harness the sun’s power.
“The acquisition and subscription will allow ACEN (AC Energy’s stock symbol) to have a significant ownership interest in SPCLC and is meant to implement the joint venture between ACEN and SP (Solar Philippines) for the development of solar power projects in the Philippines,” the firm said.
In a separate filing on Monday, AC Energy announced that it had greenlit a proposed joint venture with Solar Philippines for the development and construction of solar projects, the subscription to SPCLC’s primary shares; and the granting of authority to SPCLC to participate in biddings for power supply.
The Ayala firm added that it had signed preliminary binding agreements with Solar Philippines and its affiliate Provincia Investments Corp. for potential joint ventures in developing solar power projects in the Philippines.
AC Energy said it had also allowed to share credit facilities with its wholly owned unit, Santa Cruz Solar Energy, Inc., to participate in electricity supply biddings.
Early this month, Ayala Corp. said that an affiliate of Singapore-based GIC Pte. Ltd. would acquire 17.5% ownership stake in AC Energy for P20 billion. In a previous press release, the listed conglomerate said that its energy arm and the latter’s parent firm AC Energy and Infrastructure Corp. (ACEIC) signed the deal with the GIC affiliate Arran Investment on Dec. 30.
The move is one of the five steps in the AC Energy’s corporate restructuring, according to its President and Chief Executive Officer Eric T. Francia during a media briefing in November. The other steps are: a stock rights offering scheduled in the first quarter this year; GIC’s private placement of 4 billion shares by the end of the second quarter; a follow-on public offering at the local bourse; and the infusion of the international energy assets and the sale of secondary shares to GIC from ACEIC.
Shares in AC Energy shed 0.14% to close at P6.79 apiece on Monday. — Angelica Y. Yang
Cebu Air plans start of $250-M convertible preferred shares offering in Feb.
CEBU AIR, Inc., the listed operator of budget carrier Cebu Pacific, said on Monday it might start its $250-million convertible preferred shares stock rights offering on Feb. 26 as part of its fundraising plan.
In a disclosure to the stock exchange, the airline operator said it intends to use the proceeds to strengthen its balance sheet by providing liquidity to address its financial liabilities, including $100-million allocation for repayment of an advance by JG Summit Philippines Ltd.; $71.3-million budget for aircraft operating lease payments due this year; and $72.3-million budget for principal debt repayments, which are also due this year.
The net proceeds will also cover the $6.4-million budget for general corporate purposes, which are basically for ticket refunds “in case cash inflows from operations become insufficient” due to the pandemic, Cebu Air added.
The offer period is until March 4.
The company said its plans may still change, as they are dependent on the changing market conditions or new information regarding the cost or feasibility.
“The corporation’s cost estimates may also change as actual costs may be different from the budgeted costs,” it added.
Also on Monday, the low-cost carrier announced its latest offering to “boost passenger confidence.”
Cebu Pacific said it offers “COVID Protect,” an upgrade to the airline’s insurance plan, for P270.
“This upgrade, which will cover COVID-related hospitalization and treatments, is timely as the carrier aims to provide more passenger options,” the budget carrier said in an e-mailed statement.
With this insurance add-on, Cebu Pacific travelers who test positive for COVID-19 will get up to P1 million coverage for hospitalization and medical expenses, it added.
It said the insurance coverage starts on the departure date from origin and ends two hours upon arrival back at origin, with a maximum travel duration of 30 consecutive days. — Arjay L. Balinbin
Chelsea to hike authorized capital stock to P3.5 billion
CHELSEA LOGISTICS and Infrastructure Holdings Corp. is seeking to increase its authorized capital stock to P3.5 billion.
In a disclosure to the stock exchange on Monday, the listed company said it had applied for the amendment of its articles of incorporation to hike its authorized capital stock from P2 billion to P3.5 billion.
It is also seeking the regulator’s approval for the change in the feature of its preferred shares from non-convertible to convertible preferred shares.
The Dennis A. Uy-led firm said the application was filed with and received by the Securities and Exchange Commission on Jan. 22.
The increased authorized capital stock will be divided into two classes of shares: the 3.49-billion common shares with a par value of P1 per share and the 10-million non-voting, convertible, redeemable preferred shares with a par value of P1 per share.
The changes are intended “to accommodate additional subscriptions to the shares of the corporation to finance its current and future projects and for additional working capital,” Chelsea Logistics said.
The company recently reported a 2020 nine-month revenue of P3.32 billion, 35.5% lower than the previous year’s figure.
It swung to an attributable net loss of P2.60 billion for the nine months through September 2020, a reversal from the attributable net income of P19.95 million it reported in 2019.
Chelsea Logistics shares closed 1.69% higher at P4.80 apiece on Monday. — Arjay L. Balinbin
Greenergy sets up units for infrastructure, community development
ANTONIO L. Tiu-led Greenergy Holdings, Inc. has approved the incorporation of two wholly-owned units focusing on projects and services related to infrastructure and community development, the listed firm said on Monday.
In a regulatory filing, Greenergy said that its board of directors, who met over the weekend, had authorized the incorporation of wholly owned subsidiaries, namely: Green Tunnel Boring Corp. and Green Communities Development Corp.
Green Tunnel will engage in services with infrastructure developers and local government units, while Green Communities will undertake “transient oriented” community development projects.
The firm did not give further details about its new subsidiaries in its disclosure.
Earlier, the company said that it had discontinued its partnership with RYM Business Management Corp. and some land owners due to the impact of the global health emergency, and the prolonged community quarantine’s effect on real estate property businesses.
Last September, Greenergy ventured into the production of medical cannabis, as it built a new Australian subsidiary with US firm Yakuru — a cannabidiol distributor.
Greenergy is a holding company with interests in renewable energy, agriculture, and real estate development, among others. Some of its subsidiaries are Sunchamp Real Estate Development Corp.; Total Waste Management Recovery System, Inc.; and AgriNurture Development Holdings, Inc.
The listed firm posted a P7.33-million attributable net loss in the third quarter, 21.8% lower than P9.37 million in the same period last year.
Shares in Greenergy improved 13.36% to close at P3.14 apiece on Monday. — Angelica Y. Yang
It’s all in the family in TV5’s new sitcom, John en Ellen
IN WHAT can be called as a tribute to the classic family sitcoms of yesteryears — John en Marsha and Pido Dida, to name a few — TV5 tackles Filipino family comedy with its newest show, John en Ellen starring John Estrada and Ellen Adarna.
“[In the show] we’ll tackle Pinoy family values and family issues in a funny way: conflicts with the in-laws, raising teenage kids who are always online,” Willy Cuevas, the show’s director said during a press conference on January 21 via Zoom.
The show, which airs every Sunday starting January 24, has drawn comparisons to John en Marsha, the popular family sitcom that aired from 1973 to 1990 and saw Rodolfo “Dolphy” Vera Quizon and Nida Blanca as the titular characters.
The comparison is warranted going by the show’s similar titles and initial setup: both Marsha and Ellen are daughters of rich people — Marsha’s mother is called Doña Delilah while Ellen’s is called Don Lucky dela Suerte — and both decided to marry an impoverished man named John much to the dismay of her parents.
Even the surnames of both Johns sound similar: John Puruntong in John en Marsha and John Kulantong in John en Ellen.
While Mr. Estrada described the show as a “modern-day John en Marsha,” he noted during the press conference that the shows, while similar in premise, are different because John en Ellen brings a “different flavor.” He also conceptualized the show with its executive producer, Bong Sta. Maria.
“[The show is] a sitcom about a family and about a struggling father waiting for his break,” Mr. Sta. Maria said.
Aside from Mr. Estrada and Ms. Adarna, the show’s cast includes Ronaldo Valdez as Don Lucky dela Suerte, Ellen’s wealthy father; Long Mejia as Yñigo Tange, Don Lucky’s mischievous chief assistant; Haiza Madrid as Mimi, Don Lucky’s trusted nurse; and Yogo Singh and Angelina Cruz as John and Ellen’s children Valentino Kulantong and Camille Kulantong.
John en Ellen airs every Sunday, 7 p.m. on TV5. — Zsarlene B. Chua
LT Group says PMFTC merging with Philip Morris Manufacturing
LUCIO TAN’S holding company LT Group, Inc. said on Monday that one of its indirect subsidiaries PMFTC, Inc. is merging with Philip Morris Manufacturing Philippines Inc. as part of an internal restructuring effort.
In a disclosure to the stock exchange, the company said PMFTC will be the surviving corporation in the merger, which is scheduled to take effect on June 1, depending on the approval of the Securities and Exchange Commission.
“The merger is part of an internal restructuring process and is not expected to materially affect the operations, earnings and ownership of PMFTC,” the disclosure said.
PMFTC is an indirect subsidiary of the LT Group, through Fortune Tobacco Corp., while Philip Morris Manufacturing is one of PMFTC’s shareholders.
“As a result of the merger, PMFTC’s articles of incorporation will be amended in accordance with the articles of merger and plan of merger,” LT Group said.
During the third quarter of 2020, LT Group posted a 10.9% increase in its net income to P6.08 billion despite lower gross revenues.
The company’s gross revenues for the quarter fell 2.8% year on year to P22.87 billion.
For the January-to-September period, LT Group posted a 9% increase in its attributable net income to P16.10 billion, with its tobacco business accounting for three-fourths of the total, at P12.12 billion.
On Monday, shares in LT Group at the stock exchange rose 0.46% or six centavos to close at P13.20 apiece. — Revin Mikhael D. Ochave
US talk show host Larry King, 87
LARRY KING, who gained renown for quizzing thousands of world leaders, politicians and entertainers for CNN and other news outlets in a career spanning more than six decades, has died aged 87, his media company said in a statement on Saturday.
Mr. King had been hospitalized in Los Angeles with a coronavirus disease 2019 (COVID-19) infection, according to several media reports. He died at Cedars Sinai Medical Center, Ora Media, a television production company founded by Mr. King, said in a post on Twitter.
“For 63 years and across the platforms of radio, television and digital media, Larry’s many thousands of interviews, awards, and global acclaim stand as a testament to his unique and lasting talent as a broadcaster,” it said.
Millions watched Mr. King interview world leaders, entertainers and other celebrities on CNN’s Larry King Live, which ran from 1985 to 2010. Hunched over his desk in rolled-up shirt sleeves and owlish glasses, he made his show one of the network’s prime attractions with a mix of interviews, political discussions, current event debates and phone calls from viewers.
Even in his heyday, critics accused Mr. King of doing little pre-interview research and tossing softball questions to guests who were free to give unchallenged, self-promoting answers. He responded by conceding he did not do much research so that he could learn along with his viewers. Besides, Mr. King said, he never wanted to be perceived as a journalist.
“My duty, as I see it, is I’m a conduit,” Mr. King told the Hartford Courant in 2007. “I ask the best questions I can. I listen to the answers. I try to follow up. And hopefully the audience makes a conclusion. I’m not there to make a conclusion. I’m not a soapbox talk-show host… So what I try to do is present someone in the best light.”
PRESIDENTS AND PRIME MINISTERS
Mr. King’s guests included US presidents dating back to Gerald Ford, international leaders such as Palestine Liberation Organization (PLO) Chairman Yasser Arafat, Israeli Prime Minister Yitzhak Rabin, British Prime Minister Tony Blair, and Soviet President Mikhail Gorbachev, and entertainers ranging from Bob Hope to Snoop Dogg.
King never hid his old-fashioned proclivities and liked to reminisce about performers such as Frank Sinatra and Arthur Godfrey. In 2006 he admitted to a guest that he had never searched the internet, saying: “What do you do — punch little buttons and things?”
But by 2012 King was on the internet himself with his Larry King Now show on Ora TV, and later Hulu’s streaming service. He also was a regular presence on Twitter, promoting his interviews and tossing out random thoughts — “I have no desire to eat an artichoke,” “My favorite flavor of Jell-O is lime” and “I love to say ‘sacre bleu!’” — in what was essentially an online version of the column he had once written for USA Today.
Mr. King was an established radio talk-show host when he made his first television broadcast for CNN from Washington on June 3, 1985, five years after Ted Turner started the network.
Larry King Live would become one of CNN’s highest rated shows. He left CNN amid falling ratings in 2010 after 25 years with the news network, but stayed busy with his Ora TV show.
“I’ve known a lot of people who were experts in six or 12 things but Larry seems to be an expert in everything,” Don Hewitt, creator of 60 Minutes, told the Hollywood Reporter. “He’s also never confrontational, which is majorly important. In an age when so many people are miserable, he seems to be one of the happy ones.”
RADIO BEGINNINGS
Mr. King was born Lawrence Harvey Zeiger on Nov. 19, 1933, in the New York City borough of Brooklyn. He said at age 5 he knew he wanted to be on the radio and in 1957 he moved to Miami, which he had been told had a burgeoning radio market.
Mr. King started doing odd jobs at a Miami station and one day was asked to fill in for an announcer who walked off the job. Before he went on the air, the station manager urged him to change his last name to King because it was easier to pronounce and less ethnic than Zeiger.
Mr. King became a fixture in Miami but as his reputation grew, so did his troubles.
In 1971 he was arrested on a grand larceny complaint filed by Miami financier Lou Wolfson, who had been in trouble with the Securities and Exchange Commission. Mr. Wolfson allegedly paid Mr. King in hopes of gaining influence on the administration of then-US President Richard Nixon.
The charge against Mr. King was dropped because the statute of limitations had expired, but the scandal knocked him off the air for some three years. He did public relations work for a Louisiana racetrack until station WIOD in Miami hired him.
Mr. King rebounded and the Mutual radio network gave him a nationwide audience in 1978. He relocated to Washington, a move that led to the CNN job.
He suffered a heart attack and had bypass surgery in 1987, prompting him to start the Larry King Cardiac Foundation a year later. He had surgery in 2007 to clear a blocked artery, was treated for prostate cancer in 2010 and said in 2017 that he had been treated for lung cancer.
Mr. King was married eight times to seven women, most recently to singer Shawn Southwick, who was 26 years younger. He had five children, two of whom died in 2020. — Reuters
Gov’t hikes Treasury bill award as yields drop across the board
THE GOVERNMENT hiked the volume of Treasury bills (T-bills) it awarded on Monday and opened its tap facility again as yields fell across the board on the back of strong investor demand.
The Bureau of the Treasury (BTr) borrowed P22 billion in T-bills on Monday, higher than the programmed P20 billion, after accepting more bids for the six-month papers from the non-competitive sector.
The auction attracted total tenders of P112.2 billion, making the offer over five times oversubscribed. This prompted the Treasury to open its tap facility to offer another P10 billion in 364-day debt.
Broken down, the Treasury raised P5 billion in 91-day T-bills as planned from P17.33 billion in bids. The three-month debt fetched an average rate of 0.969%, down 1.5 basis point (bps) from the 0.984% logged last week.
The government also accepted P7 billion in bids for the 182-day T-bills, higher than the P5-billion program, as tenders hit P31.527 billion. The average yield of the six-month papers went down by 2.5 bps to 1.323% from 1.348% a week ago.
Lastly, the Treasury made a full P10-billion award of the 364-day securities on offer, with total bids reaching P63.355 billion. The one-year instruments were quoted at an average rate of 1.542%, down 4 bps from the 1.582% seen last week.
National Treasurer Rosalia V. de Leon attributed the strong bids to huge maturities this week worth P67 billion.
“The market is overflowing with liquidity with bias on the front end of the curve,” Ms. De Leon told reporters after the auction via Viber.
A bond trader said P49.89 billion in three-year bonds matured on Monday, while another P18 billion will mature on Wednesday.
“People (are also) waiting for the February auction schedule for any indication if the government will start extending the tenor or increasing the volume,” the trader said via Viber.
Any increase in the Treasury’s borrowing program for next month would prompt the players to reposition, the trader said.
Excluding the result of the tap facility auction that was due to close later on Monday, the BTr raised P201.575 billion from the local debt market this month, backed by strong demand for government securities, especially shorter tenors, and overflowing liquidity in the market.
This is more than the P140 billion programmed for January after the Treasury hiked its awards of T-bills and also opened its tap facility every week.
Broken down, the government sold P111.575 billion in T-bills and P90 billion in Treasury bonds (T-bonds), higher than the initial plan to just raise P80 billion via the short-term debt and P60 billion via the longer tenors.
The government is looking to raise P3 trillion this year from domestic and external lenders to help fund its budget deficit seen to hit 8.9% of the country’s gross domestic product. — Beatrice M. Laforga