Carlos Candal and David Ian on the Manila run of CATS the Musical
Carlos Candal (GMG Productions) and David Ian (David Ian Productions) share their thoughts on the Manila run of CATS the Musical and having Joanna Ampil on board as Grizabella.
Probe under way on troubled brokerage
By Victor V. Saulon, Sub-Editor
THE CAPITAL MARKETS Integrity Corp. (CMIC) has placed R&L Investments, Inc. under involuntary suspension as it continues its probe on the stock brokerage that was forced to stop operating after an employee allegedly stole stocks from the firm worth more than P700 million.
“CMIC continues its investigation of the issues extant in this case, and has initiated the conduct of special audits of the pertinent books and records of the involved parties and/or trading participants,” CIMC President Daisy P. Arce said in a memorandum addressed to investors and trading participants on Friday.
The suspension order, which is in accordance with Article X, Section 7 of the CIMC Rules, means a ban on the party under probe from exercising its trading right as well as deactivation of its access to the trading system of the Philippine Stock Exchange (PSE).
R&L is also denied access to its account with the Philippine Depository and Trust Corp. and cannot avail of clearing services from the Securities Clearing Corporation of the Philippines.
“Further, all trading participants are requested to promptly inform CMIC of all pending transactions and contracts with R&L, if any. All relevant information and/or inquiries may be sent to info@cmic.com.ph,” said the compliance arm of the PSE.
Separately, the Securities and Exchange Commission (SEC) said it would “closely monitor” the issue as CMIC continues its investigation.
In a statement, the SEC said it was aware of the issue while leaving CMIC to investigate the alleged theft that nearly wiped out the position of R&L.
“The SEC expects CMIC to conduct a thorough investigation to unearth the truth behind the transactions in question, identify all parties involved, and uncover the extent of the damage to the stock brokerage, its clients and the overall market,” the corporate watchdog said in a statement.
It said CMIC acts as the independent audit, surveillance and compliance arm of the stock exchange in line with its mandate to reinforce the confidence of the investing public in capital market institutions.
“The investigation should also provide clarity as to how such transactions could have slipped past multiple control measures. For one, the 2015 SRC Rules requires broker dealers to conduct monthly security examination, count and verification to account for discrepancies,” the SEC said.
As a self-regulatory organization, CMIC enforces Republic Act No. 8799, or the Securities Regulation Code (SRC), and the pertinent rules and regulations. Its powers and functions include the investigation and resolution of violations by trading participants of the securities law as well as trading-related irregularities and unusual trading activities involving issuers.
The SEC said it expects the full rollout of the Name on Central Depository (NoCD) facility of the Philippine Depository & Trust Corp. (PDTC) by the first quarter of 2020 to reinforce the controls and deter similar incidents from occurring in the future.
The NoCD facility allows for the recording of securities at PDTC in the name of individual investors. Most securities at present are recorded in “omnibus accounts” that aggregate the holdings of all investors.
“The creation of sub-accounts under the NoCD arrangement will increase transparency in the trading of securities. It will also give investors a means to monitor movements in their accounts through SMS or email notifications,” the SEC said.
The commission said it was also in talks with PDTC for the creation of a mechanism that will allow the latter to provide monthly reports on a stock brokerage’s position directly to the board of directors.
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Ma. Vivian Yuchengco, a director of the bourse and chairman of the Philippine Association of Securities Brokers and Dealers, Inc., said current investigations are trying to determine the extent of the problem.
“The volume is now about P2 billion-plus selling and this is only P750 million that we’re looking at, so there must be some other people involved,” Ms. Yuchengco said in an interview with ABS-CBN News Channel.
“In R&L, there’s only one employee that’s rogue, but there can be other houses where the same thing is also happening. So we’re checking because they used another broker to sell the shares. So we’re checking all the transactions of that broker to see if it’s only R&L or if there are other brokers involved. That’s why we’re asking all the other brokers to check their books,” she explained.
“The reason for this problem of R&L is they entrusted everything to one person,” she noted.
“You cannot do that in a brokerage.”
Sought for comment, Summit Securities, Inc. President Harry G. Liu said it is the responsibility of those with a stock brokerage to have “organization and control” of their business.
“You need audit — internal, external — you need two signatories. Hindi naman pwedeng isang tao lang (You cannot have just one person) who has all the power,” Mr. Liu said. “Everybody has to follow certain standards.”
He said all aspects of the business should be controlled, while check and balance should be in place, including accounting, internal audit, information technology, backroom operations.
“Then we report to the PSE every month. That should be counter-checked,” he said, adding the report should not be “one and the same — that is standard.”
“Trust is important, but if you start to become lenient, pinapabayaan mo ‘yung kompanya mo, of course, may mangyayari n’yan (you become lax in your company, of course, something will happen). Parang bahay — alam mo naman may magnanakaw, pinapabayaan mong bukas ang pintuan (It’s like your home — when you know there are thieves yet you leave the door open). Of course you are open to mistakes,” he added.
“Something like that is a mistake on the part of the organization of that corporation. That is how I look at it.”
PNB Securities, Inc. President Manuel Antonio G. Lisbona said his firm has “robust safeguards in terms of policies and procedures in place to ensure that our clients are protected.”
“The R&L case is unfortunate, but is not reflective of the PSE nor its trading participants,” Mr. Lisbona said.
“At the very least, in our back office system, we have a ‘maker/checker’ control in place to ensure that no individual can encode, check and approve a transaction. Therefore, there will be several pairs of eyes that will process a transaction. This goes for our parent bank as well.” — with Vincent Mariel P. Galang
MWSS assures Razon firm of action on Wawa dam proposal
THE GOVERNMENT REGULATOR has assured that the Wawa bulk water supply project is up for final approval, Prime Metroline Infrastructure Holdings, Corp. (Prime Infra), the water company led by businessman Enrique K. Razon Jr., said on Friday.
The company said it was told by the Metropolitan Waterworks and Sewerage System (MWSS) that the project, which is supposed to be Metro Manila’s new source of water, remains a major flagship project of the Duterte administration’s water security program.
“We are ready to move forward and have been proactively working with all stakeholders, public and private, to progress this project since 2018. Wawa is the fastest and least expensive water source development and comes at no cost to the government,” Mr. Razon said in a statement.
Prime Infra quoted MWSS Chairman Reynaldo V. Velasco as saying that the Wawa dam “is an integral part of the overall short-, medium- and long-term water flagship projects of MWSS to ensure water security.”
The project is expected to supply an additional 80 million liters per day (MLD) in 2021 and more than 500 MLD in 2025.
The company also said that the former administrator of MWSS had promised that the board of the agency would “tackle and approve” the project to help address the water supply deficit in the eastern zone of Metro Manila under the concession of Manila Water Company, Inc.
Mr. Velasco did not immediately respond when asked to confirm Prime Infra’s statement.
In the past, he had been vocal about supporting the Wawa dam project and had even asked its previous proponent to partner with Mr. Razon’s group, which is now the controlling entity. He had also backed the inclusion of Manila Water in the project.
Prime Infra quoted Mr. Velasco as saying: “We are in a catch-up mode as far as water supply source is concerned. Wawa Dam, which used to be the water source for Metro Manila before Angat Dam was completed on 1967 and became operational, has been identified by water experts as the best potential water supply source for Metro Manila.”
The Wawa bulk water supply project is a joint venture between Prime Infra and San Lorenzo Ruiz Builders and Developers Corp. of Oscar I. Violago. They signed an off-take agreement with MWSS and Manila Water on Aug. 6, 2019.
“Since the signing of the agreement, public consultations have been conducted by the MWSS Regulatory Office. These public consultations gave the public the opportunity to learn about the project details as well as the tariff impact,” Prime Infra said.
It said the changing of the guard at the MWSS contributed to the delay in the development work of the Wawa dam project. It added that final approval is awaited on the supplemental agreement that was submitted to the regulator on Sept. 13.
“It is a necessary document for the agreement on the outstanding issues on penalties, access road responsibility and metering protocol. It is the remaining document to make the project fully effective and enable the project proponent to proceed in the development work,” it said.
Prime Infra said the MWSS received on Nov. 7 the favorable opinion from the Office of the Government Corporate Counsel on the remaining conditions precedent to make the project fully effective. — Victor V. Saulon
VP vows to enforce anti-drug drive within the law
VICE President Ma. Leonor G. Robredo on Friday vowed to enforce the state’s anti-illegal drug campaign “within the bounds of the rule of law.”
“I am all for a strong national policy against illegal drugs and Iam all for a vigorous anti-drug campaign but having said that, I also feel that we need to do things right,” Ms. Robredo said at a briefing streamed on her Facebook page.
“Everything we’re doing should be within the bounds of the rule of law,” she said before meeting with Philippine Drug Enforcement Agency (PDEA) Director General Aaron N. Aquino, her co-head in an interagency task force against illegal drugs.
Ms. Robredo said she would treat the drug problem not only as a crime, but also as a health issue.
The meeting that she called was meant to give her access to data on the drug campaign.
Ms. Robredo again cited the need to re-assess the government strategy against illegal drugs given the rising number of drug dependents.
She said she viewed her appointment by President Rodrigo R. Duterte “as a signal that the president is open to listen to a fresh perspective about the entire campaign.”
Ms. Robredo on Wednesday said she had agreed to head the Duterte administration’s anti-illegal drug campaign, if only to stop the killings.
The vice president accepted the post against the advice of many of her party mates, who said the appointment might be a trap.
She said she had accepted the president’s offer to become his drug czar — even if this could just be politicking — so she could save innocent lives. — Charmaine A. Tadalan
Maguindanao massacre ruling out by December 20
THE Supreme Court has extended the deadline for a ruling on a decade-old case where more than 50 people were massacred in Maguindanao province, Chief Justice Diosdado M. Peralta said on Friday.
“We allowed her to have an extension of one month,” the chief magistrate told CNN Philippines, referring to the trial judge who sought the extension.
Quezon City Judge Jocelyn A. Solis-Reyes asked for 30 more days to rule on the murder case against Datu Andal Ampatuan, Jr. and more than 100 other people, citing “voluminous records.” She was allowed to issue a decision by December 20 instead.
The case records have reached 238 volumes, — 165 volumes of records on the trial, 65 records of stenographic notes and 8 records containing the prosecution’s documentary evidence.
“You know very well that there are so many accused and there are so many victims in that case but we also allow meritorious motions for extension and we understand her predicament,” Mr. Peralta said.
The trial court earlier rejected a plea by Mr. Ampatuan, the primary suspect in the massacre of 58 people, including 32 journalists, in the town of Ampatuan in Maguindanao province on Nov. 23, 2009 to re-open the trial.
The ambush took place when media accompanied then gubernatorial candidate Esmael G. Mangudadatu and his family to the election body where he was to file his certificate of candidacy. Mr. Mangudadatu was then planning to challenge Datu Unsay for governor of the Autonomous Region in Muslim Mindanao. — Charmaine A. Tadalan
Christmas product prices steady, DTI says
THE prices of 134 products that many Filipinos consume during the Christmas holidays have remained stable, the Trade department said on Friday.
In a statement, the agency said prices of so-called Noche Buena products have steadied, while the prices of six products have gone down this year.
These products include keso de bola, cheese, sandwich spread, mayonnaise, pasta spaghetti, elbow and salad macaroni, spaghetti sauce, tomato sauce and creamer products.
The agency issued the statement after reports that prices of at least 92 products have increased.
Trade Secretary Ramon M. Lopez said prices of brands for mass-based markets “do not usually change.” “This is due to their fear of competition and the probability of losing market share in a price sensitive segment,” he said in the statement.
“I advise consumers to choose the products they find value for themselves and their family,” Mr. Lopez said. “It is advised to do the Christmas grocery shopping early and avoid the holiday rush.” — Arjay L. Balinbin
Japanese investors keen on PHL retail, real estate, bankers say
JAPANESE investors are seeking opportunities in Philippine retail, real estate and consumer finance, a Japanese banker said.
At a news conference in Makati City, Mitsubishi UFJ Financial Group Inc (MUFG) managing director and Philippine country head Yuichi Yamagishi said: “The retail, real estate, area, or consumer finance areas and also fast food and infrastructure…these are what Japanese companies are focusing on.”
MUFG’s Philippine strategic partner is Security Bank Corp.
Another official said the main drivers of Japanese interest are the young population and a growing economy, while the negatives are centered on tax policy and infrastructure.
Security Bank Corp. Alliance Segment Head Takahiro Onishi added: “When the Japanese talk about the Philippines, they always talk about how young the population is and how much they’re growing the size of the population… so they’re always counting on the demographics and the population growth and I guess the domestic growth based on consumption. So that’s where the business is.
“Whether they are new to the Philippines or they have already invested here… (the) first (concern) is the issues… especially the manufacturers who are in the PEZA (Philippine Economic Zone Authority) zones… and that is being discussed right now. And that may change (their level of interest) and that is keeping the companies concerned,” he said.
“They are not entirely sure about the policy… (Does) the Philippine government… actually want foreign companies to come in and invest? Or are they prioritizing the prosperity of local companies instead of inviting more and more investment,” Mr. Onishi added.
House Bill 4157 or the Comprehensive Income Tax and Incentives Rationalization Act (CITIRA) — which will progressively reduce corporate income tax to 20% by 2029 from the current 30% and remove tax incentives deemed redundant — has been approved in the House of Representatives. Its counterpart bill is still pending in the Senate.
Finance Undersecretary Karl Kendrick T. Chua has said that Department of Finance (DoF) expects the lower income tax packages to encourage companies to invest their savings in expansion, which has the potential to generate about 1.5 million additional jobs.
Meanwhile, The Department of Trade and Industry (DTI) backs a five-to-seven year transitory period for economic zone locators, as well as a seven to 10-year transition period for companies with at least 3,000 employees.
Infrastructure is a concern, according to Mr. Onishi, because “this would affect logistics, the transportation of their goods, how do they store their goods and maintain the quality of the products both when they’re being stored and when they’re being transported to other places,” he said.
In 2016 MUFG bought a 20% stake in Security Bank and has sought to leverage its relationships to offer business-matching between Japanese and Philippine companies.
Security Bank closed unchanged at P203 on Friday. — Luz Wendy T. Noble
DoF says health education best way to curb salt consumption
DEPARTMENT OF Finance (DoF) officials expressed skepticism about the government’s ability to curb salt consumption via taxation, and said the problem might be better addressed via health education.
“We are studying it but it seems that the best way to do it is through regulation. Promotion of the health aspects, and not from taxation,” Undersecretary Karl Kendrick T. Chua said in a media seminar on tax reform in Tagaytay City Friday.
The government is studying a Department of Health (DoH) proposal to discourage excessive salt consumption, possibly with a tax regime that adds to the cost of buying salty food, an approach that has been applied to sweetened beverages.
“We have a technical working group to study this idea further,” he added. The TWG has representatives from the DoF, the DoH and the Department of Trade and Industry (DTI).
Finance Assistant Secretary Antonio Joselito G. Lambino II said the TWG was created shortly after the release of a World Health Organization finding that Filipinos consume more than double the daily recommended intake of about five grams.
Products made with salt are more difficult to regulate at factory level than sweetened beverages, whose exact formulations are registared with the government. Many salty products are also made by small businesses. Salty foods like dried fish are also widely consumed by poor families, making such a tax politically sensitive.
The DoF has been keen to find funding sources to back Universal Health Care (UHC), which comes into force next year, and also to minimize the costs to the health care system from treating chronic diseases. So far the DoF has gone after sugary drinks, tobacco and e-cigarettes.
“What is our objective here — you know we have Universal Health Care but we don’t want to waste it treating preventable diseases?” Mr. Chua said.
The DoH proposal is not part of the administration’s comprehensive tax reform program, but Mr. Chua said that in 2016, the DoF originally included unhealthy products in its tax plans.
“Our original proposal (in 2016 included) a health package, which covers unhealthy food and variants, like tobacco, alcohol, sugar beverages and, as we mentioned, junk food.”
The Tax Reform for Acceleration and Inclusion (TRAIN) Law, or Republic Act No. 10963, introduced excise tax on sugar-sweetened beverages.
The government also passed RA 11346, which increased the excise tax on tobacco products and introduced levies on electronic cigarettes.
The 18th Congress is currently tackling measure which will further increase rates on tobacco products, e-cigarettes and other vapor products as well as alcohol products. — Charmaine A. Tadalan
TIEZA to offer Bohol resort, Intramuros golf club to JV partners
THE Public-Private Partnership (PPP) Center on Friday said the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) Board has identified two assets in Bohol and Manila which will be developed and managed by the private sector.
In a statement emailed by the PPP to reporters on Friday, the TIEZA Board identified Balicasag Island Dive Resort in Bohol and the Club Intramuros Golf Course in Manila “to be developed and managed by a private sector partner (PSP) through a Joint Venture (JV).”
TIEZA approved joint-venture guidelines for private sector partnerships on Aug. 29.
The PPP said Balicasag Island Dive Resort, in Panglao, Bohol, has an estimated area of 1.5 hectares while the Club Intramuros Golf Course covers approximately 23 hectares.
TIEZA will be selecting the two projects’ private sector partners “through competitive selection,” the PPP Center said.
The PPP Center said it is now assisting TIEZA in preparing the selection and tender documents for the publication of the said projects.
Asked regarding the value of the projects, the bidding schedule, and the possible interested parties, PPP Center Director Jomel Anthony V. Gutierrez said via email Friday: “As of now, the details are not yet available because these are still under development.”
TIEZA JV guidelines stipulate that joint venture partners will be chosen via competitive selection, with investors responding to a solicited proposal from the agency.
They can also be chosen through a negotiated competitive challenge, whereby investors may propose a project for TIEZA-owned or controlled properties that will, in turn, be open to challenge by other parties.
The guidelines note that “the party that submitted the unsolicited proposal is accorded the right to outbid any superior offer given by a comparative private sector participant.”
TIEZA will form a Joint Venture Selection Committee to select and evaluate proposals. — Arjay L. Balinbin
DENR campaign touts ‘development’ opportunities from mining
THE Department of Environment and Natural Resources (DENR) said it has launched a responsible mining information campaign which it hopes will promote “pro-people” business practices while clearing up the public’s “misconceptions” about the industry.
“Our goal is to harness this mineral wealth for progress and development and the key to that is responsible mining,” Environment Secretary Roy A. Cimatu said in a statement.
“It will have a contributory effect siguro (maybe) but ang the key really is for the mining companies to be able to show that they are capable to undertake responsible mining… It’s really to come up with a more positive or balanced perspective of what mining is,” Analiza R. Teh, undersecretary for climate change and mining concerns at the DENR, said in a chance interview during the launch of the campaign in Quezon City Friday.
She was asked whether the campaign would lead to the resolution of the current moratorium on approving new permits and the ban on open-pit mining.
“This is part of the campaign because there are still a lot of hurdles… we hope that by communicating to the general public and especially the decision-makers… (to support the) mining industry… because it is a contributor to the economic development of any country,” Mines and Geosciences Bureau (MGB) Director Wilfredo G. Moncano said in a news conference after the launch.
The mining and quarrying industry contacted 4.9% in the third quarter, widening the year-earlier contraction of 1.3%, due to the 18.4% decline in nickel mining.
The #MineResponsibility campaign seeks to create a clearer and more factual image of the mining industry, the DENR said, and hopes to reverse misconceptions about the industry.
“Increasing awareness on the dynamics about our policies, the reforms that we are undertaking, the contribution of the sector, and (mining companies’) efforts to be compliant,” Ms. Teh said. — Vincent Mariel P. Galang
Fitch sees telcos turning to debt to fund capex, 5G prospects still limited
THE Philippine telecommunications sector is expected to spend more than it can generate internally over the next 18 months, with telcos turning more to debt to fund their future capital expenditures, Fitch Ratings said.
In a statement Thursday, Fitch said: “We forecast average capex intensity for the sector to stabilise at 35%-37% in 2020, resulting in negative free cash flow (FCF) which we expect to be debt-funded.”
Also, over the next 18 months, capex for 5G technology is likely to be limited due to “lack of applications and the absence of a robust ecosystem of customer devices,” it added.
Philippine telcos are expected to be still dependent in the next three years on existing 4G technologies amid growing demand for data.
Fitch noted that both PLDT, Inc. and Globe Telecom, Inc. are positioned to increase their financial flexibility to raise more debt to fund future capex.
It also said it expects “intensified” competition with the entry of China-backed DITO Telecommunity Corp., which hopes to corner nearly a third of the market in two to three years.
“However, the newcomer’s pledge to provide coverage for 37% of the population by July 2020 (with 27Mbps minimum broadband speed) and up to 84% by 2024, suggests limited coverage in the short term,” Fitch added.
Fitch said PLDT, which it rates at BBB with a stable outlook, had a “stronger recovery” in the third quarter as it entered into its “third consecutive quarter of growth in wireless revenue, underscoring a firmer recovery for the sector.”
It noted that PLDT’s quarterly wireless revenue increased 12% year-on-year, which is higher than the 9% posted Globe Telecom, Inc. (BBB-/Stable), adding that network quality and coverage have substantially improved for both telcos because of their capex over several years prior to the entry of Dennis A. Uy’s DITO.
Globe posted an attributable net income of P5.63 billion in the three months to September, up 17% from a year earlier, driven by strong growth in all its data-related products and services.
Meanwhile, PLDT’s attributable profit fell 16% in the third quarter, as higher revenue from wireless was offset by lower earnings from its fixed-line and other businesses. It posted a net income attributable to the parent of P3.79 billion, as revenue slipped 5% to P42.45 billion. Data and broadband account for 66% of PLDT’s total service revenue, growing 20% to P76.7 billion in the first nine months. — Arjay L. Balinbin
Nickel Asia profit falls 43% in first 9 months on weak prices
NICKEL Asia Corp. said net profit fell 43% in the nine months to September due to weak nickel prices as well as a stronger peso and investments in loss-making processing plants.
In a disclosure Friday, the miner said it booked a P1.917 billion in its preferred form of reporting profit — net income attributable to equity holders — against P3.366 billion a year earlier.
It said earnings before interest, tax, depreciation, and amortization (EBITDA) declined 24% to P4.60 billion.
“The drop in the company’s earnings is mainly due to a combination of a weaker average nickel ore price, a stronger peso and the company’s share of losses from its investment in both the Coral Bay and Taganito processing plants,” Nickel Asia said.
It owns 10% of the two processing plants and its total share of losses amounted to P85 million, after recognizing P617 million worth of earnings a year earlier. The plants reported losses after the price of cobalt fell to $16.46 per pound from $39.05 a year earlier. Cobalt is a by-product of both plants.
The company sold 15.29 million wet metric tons (WMT) of nickel ore in the first nine months, down from 15.55 million a year earlier.
Of the total ore shipments, 7.47 million WMT was saprolite ore, down 12% year-on-year, and 7.82 million WMT was limonite ore up 11%, which included 6.34 million WMT delivered to both Coral Bay and Taganito plants, which was up 9%, year-on-year.
“The company was not able to fully benefit from the effect of higher prices during the period under review as the run-up in ore prices only started in the latter part of the third quarter,” Nickel Asia President Martin Antonio G. Zamora said.
The appreciation of peso to dollar also led to foreign exchange losses of P105 million from gains of P647 million reported in the same period last year. Realized peso to dollar exchange rate for ore sales was P51.89 from P52.89, year-on-year.
It realized an average price of $5.96 per pound of payable nickel ore shipments to both processing plants in the period, according to London Metal Exchange (LME) reference prices. A year earlier, the average price was $6.21.
In terms of exports, the company realized a higher average price of $21.49 per WMT from $20.79 a year earlier. The average price generated from the sale of saprolite and limonite ores fell 6% to $15.84 per WMT.
“The company expects a strong performance for the remainder of the year due to the higher prices contracted on its remaining shipments coupled with the anticipated return to profitability for the two processing plants,” Mr. Zamora said.
Nickel Asia fell 1.53% to close at P3.86 on Friday. — Vincent Mariel P. Galang