IF foreigners base on profitability their choice of listed stocks in
which to invest their dollars, then they would probably place Ayala
Corp. (AC) at the top of their list.
It is consistent profitability that enabled AC to pile up surplus of
P92.37 billion as of September 30, 2013. Filipino investors similarly
measure companies by their audited financial reports and find the
Zobel-controlled AC being among the more reliable.
Incidentally, AC happened to be one of the seven holding companies
listed on the Philippine Stock Exchange included in Due Diligencer’s
choices. If the previous piece took up their retained earnings as of
September 30, 2013, this one would show how they have accumulated their
surpluses.
However, Alliance Global Group Inc. (AGI) and AC registered the
biggest profit increases. AGI had a nine-month net profit of P19.16
billion, up a huge 42.35 percent, or P5.70 billion from P13.46 billion,
while AC’s net income surged 24.92 percent, equivalent to P3.75 billion
in peso term, to P18.80 billion from P15.05 billion in the same period
in 2012.
Of the seven, three reported smaller but billion-profit increases in
the first three quarters of 2013. San Miguel Corp.’s net income dropped
31.21 percent, or P8.02 billion to P17.68 billion from P25.70 billion,
while that of JG Summit Holdings Inc. of businessman John Gokongwei Jr.
declined 13.97 percent, or P2.126 billion to P13.30 billion from P15.46
billion. Aboitiz Equity Inc., on the other hand, reported a net profit
of P20.23 billion, down 10.88 percent, or P2.37 billion from P22.70
billion.
The numbers shown in the table should tell us consumers where our
money went in 2012 and 2013, and how much more those who could well
afford to buy their products spent last year. But these companies never
told us how they made more revenues last year than in 2012. Could it be
because they charged us more for the same products they sold us? That
is, the price increases generated more money, which meant bigger profits
and more dividends for their stockholders. Was it also possible that
they produced more and sold more in 2013 but at 2012 prices? This, of
course, would be impossible. Business operates for profits. The more
money it makes, the better.
As the total shows, the seven of 40 or so listed holding companies
needed only P10.86 billion for their combined revenues to hit a
trillion, an amount which you and I would have difficulty counting. Yet,
we would well understand how much P989.14 billion should mean to big
business that had it so good in 2012 and 2013: the more revenues that we
contribute to their cash registers the bigger their profits that would
accrue to retained earnings, which, in turn, would be distributed as
dividend either in cash or in stock.
esdperez@gmail.com
source: Manila Times Column of EMETERIO SD. PEREZ
Tuesday, February 11, 2014
Thursday, February 6, 2014
ITS Southwest Terminal: Seven firms interested in transport terminal
SEVEN FIRMS have expressed interest in
bidding for a contract to build the P2.5-billion Integrated Terminal
System (ITS) Southwest Terminal, a public-private partnership (PPP)
project aimed at easing traffic in Metro Manila.
PPP Center Executive Director Cosette V. Canilao identified the prospective bidders as San Miguel Corp., Metro Pacific Tollways Corp., Ayala Land, Inc., D.M. Wenceslao and Associates Inc., Vicente T. Lao Construction, Egis Projects Philippines, and Robinsons Land Corp., all of which had bought bid documents.
“The list of bidders could still go down as some of the firms might partner with one another to form consortia,” she added.
On offer is a contract to finance, design, construct, operate and maintain the ITS Southwest Terminal under a 35-year concession. The facility, which will be constructed near the Manila-Cavite Expressway, will connect passengers coming from Cavite to Metro Manila transport systems such as the Light Rail Transit Line 1, city buses, taxis and other public utility vehicles.
Bid documents were made available last Jan. 10 for P150,000. A pre-bid conference is scheduled this coming Monday at the Transportation department. Bids should be submitted no later than May 15 and will be opened that same day.
The winning bidder will receive a notice of award by July and signing of the concession agreement has been set for September. Construction is scheduled to start in October and the terminal should be operational by May 2016.
In another development, Ms. Canilao said the government was now hoping to award the P17.5-billion Mactan-Cebu International Airport New Passenger Terminal Project by next week.
“We are about 70% done in conducting the due diligence. We need to exercise due diligence in really checking and counter check the issues raised,” Ms. Canilao said.
The Filinvest-Changi Airports consortium has asked the Transportation department to disqualify the frontrunner, the Megawide-GMR consortium, due to alleged conflict of interest.
Megawide-GMR last month offered the best bid, which included a P14.4-billion premium, for the project. Filinvest-Changi offered a smaller P14-billion premium. A winner was supposed to have been named early January.
The signing of the concessionaire agreement for the P1.72-billion Automatic Fare Collection System project, meanwhile, will be on February 17, Ms. Canilao said, with a losing bidder deciding not to pursue complaints.
The project was awarded last week to the AF Consortium of Metro Pacific Investments Corp. and Ayala Corp. but questions have been raised by the SM Consortium.
“I heard TV news quoting an SM spokesperson as saying that they have no plans of taking legal actions,” Ms. Canilao said. “I’m glad that based on the spokesperson’s statements they will not file any legal action.”
Confirmation was not immediately available from the SM Consortium.
Reacting to a petition to stop the impending “privatization” of Philippine Orthopedic Center (POC), meanwhile, Ms. Canilao said the P5.70-billion contract awarded to the Megawide Construction Corp.-World Citi, Inc. consortium would benefit the poor.
“The government still has control over the POC through the contract,” she noted. “The project’s aim is to improve the services to the public, especially the poor.” -- LCSM
source: Businessworld
PPP Center Executive Director Cosette V. Canilao identified the prospective bidders as San Miguel Corp., Metro Pacific Tollways Corp., Ayala Land, Inc., D.M. Wenceslao and Associates Inc., Vicente T. Lao Construction, Egis Projects Philippines, and Robinsons Land Corp., all of which had bought bid documents.
“The list of bidders could still go down as some of the firms might partner with one another to form consortia,” she added.
On offer is a contract to finance, design, construct, operate and maintain the ITS Southwest Terminal under a 35-year concession. The facility, which will be constructed near the Manila-Cavite Expressway, will connect passengers coming from Cavite to Metro Manila transport systems such as the Light Rail Transit Line 1, city buses, taxis and other public utility vehicles.
Bid documents were made available last Jan. 10 for P150,000. A pre-bid conference is scheduled this coming Monday at the Transportation department. Bids should be submitted no later than May 15 and will be opened that same day.
The winning bidder will receive a notice of award by July and signing of the concession agreement has been set for September. Construction is scheduled to start in October and the terminal should be operational by May 2016.
In another development, Ms. Canilao said the government was now hoping to award the P17.5-billion Mactan-Cebu International Airport New Passenger Terminal Project by next week.
“We are about 70% done in conducting the due diligence. We need to exercise due diligence in really checking and counter check the issues raised,” Ms. Canilao said.
The Filinvest-Changi Airports consortium has asked the Transportation department to disqualify the frontrunner, the Megawide-GMR consortium, due to alleged conflict of interest.
Megawide-GMR last month offered the best bid, which included a P14.4-billion premium, for the project. Filinvest-Changi offered a smaller P14-billion premium. A winner was supposed to have been named early January.
The signing of the concessionaire agreement for the P1.72-billion Automatic Fare Collection System project, meanwhile, will be on February 17, Ms. Canilao said, with a losing bidder deciding not to pursue complaints.
The project was awarded last week to the AF Consortium of Metro Pacific Investments Corp. and Ayala Corp. but questions have been raised by the SM Consortium.
“I heard TV news quoting an SM spokesperson as saying that they have no plans of taking legal actions,” Ms. Canilao said. “I’m glad that based on the spokesperson’s statements they will not file any legal action.”
Confirmation was not immediately available from the SM Consortium.
Reacting to a petition to stop the impending “privatization” of Philippine Orthopedic Center (POC), meanwhile, Ms. Canilao said the P5.70-billion contract awarded to the Megawide Construction Corp.-World Citi, Inc. consortium would benefit the poor.
“The government still has control over the POC through the contract,” she noted. “The project’s aim is to improve the services to the public, especially the poor.” -- LCSM
source: Businessworld
Wednesday, February 5, 2014
The unwritten rule in DOTC biddings
“Kung ayaw, maraming dahilan; kung gusto, maraming paraan.” That
Filipino adage is the unwritten rule in project biddings at the Dept. of
Transportation and Communications (DOTC). Foreign investors are
learning the hard way its meaning: “If unwilling, many whys; if willing,
many ways.” A string of them unwittingly have wasted time and money for
ignoring the rule.
The latest “victim” is Korean conglomerate Hanjin. A veteran of 70 contracts in the Philippines, it didn’t expect this kind of rat in the Puerto Princesa Airport Development Project. The work, to be financed by the Korean Export-Import Bank, was open only to Korean firms. The DOTC hired Korea’s Incheon International Airport Corp. as consultant for the bidding and design-structure. The bidding was not just for the lowest price the government would pay, 30 percent of the grade, but also best technical (design-building) plan, 70 percent.
Aside from Hanjin, only one other Korean giant joined, Kumho. The rivals submitted the financial bids last October, then presented their credentials in November. Within that regulation period Hanjin protested Kumho’s conflict of interest. It turned out the latter was a partner of Incheon Airports in another ongoing DOTC bidding — for the Mactan-Cebu International Airport Project.
Hanjin asked the DOTC to rule on the matter swiftly. Relatedly, it sought clarification on how the DOTC and adviser Incheon Airports would evaluate the technical side. Rightly so, for Incheon Airports would be in a position to cause any bidder to win, no matter what price or technical plan.
The DOTC bidding officers agreed that a ruling needed to be made fast; the legal staff agreed that there indeed was conflict of interest. Anti-graft laws define and penalize such situations. The bidding rules further required disqualification of any bidder that is related to another or to a third party in the bidding process. More so if, that relationship gives it access to information, and influence over the bid of a rival or the outcome of the bidding.
The DOTC did not rule on the matter. Instead it proceeded with the opening of bids last Dec. 12. Hanjin gave the lower bid, $82,923,000, against Kumho’s $83,257,000. Yet the DOTC disregarded the difference of $334,000 (P15 million). As well it disregarded Hanjin’s many letters up to January seeking a ruling on Kumho’s conflict of interest. No amount of cautioning by Malacañang has made the DOTC do right. One excuse it gave was that it was still seeking the Korean EximBank’s stand. Yet the bank had stated since Jan. 6 that it would let the DOTC rule on the issue. More so since, the bank knows, the DOTC’s bidding and legal staffs already rendered opinions against the conflict of interest.
Incidentally the DOTC opened also last Dec. 12 the bids for the Mactan-Cebu airport project. Confirmed was that Kumho and Incheon Airports truly were participating partners. Back to the Puerto Princesa works, word inside the DOTC is that Incheon Airports has given a higher grade to partner Kumho’s technical plan. That, of course, is to put it ahead of Hanjin’s lower bid in the 70-30 evaluation.
Megawide-GMR was expecting to sign the contract last Jan. 6, and start work a month later. But then an unfunny thing happened on the way to the signing. The loser, way past the allowable period in Oct.-Nov. to raise issues, gave the DOTC papers about the winner. Supposedly GMR had reneged on an airport contract in the Maldives, for which it slipped financially, so incapable to undertake the Philippine project. The Indian firm retorted that it was the one suing the island-state for $800 million, for rescinding its contract in a coup d’état. The case was in fact among its documentary submissions in compliance with transparency rules.
Instead of disqualifying the belated complainant, the DOTC entertained the belated complaint. Pending any findings, the project lies in limbo.
The DOTC is accused of fudging its own rules in the P3.85-billion bidding for vehicle license platemaking. Midway into the process, it split the contracts for car and motorcycle plates. This was to accommodate two bidders who lacked financial track records for the combined amount. The DOTC also imposed a US quality-standards test that no longer exists, yet junked a newer one taken by only the lowest bidder. This was to make “compliant” the two favored though higher bidders.
For one, it’s a takeoff from the Broadway hit musicale, “Rock of Ages,” this time adopting songs of the hot local rock band of the ‘80s-’90s, Aegis. For another, the time-place setting is so familiar, the Great Flood in Metro Manila from Super Storm Ondoy of 2009, repeated elsewhere in Luzon, Visayas, and Mindanao. For yet another, it highlights not only the resiliency of the Filipino to rise from calamity, but also the need for political leaders to answer for the disaster unpreparedness.
Starring Isay Alvarez, Robert Seña, Aicelle Santos, Joan Bugcat, and Kalila Aguilos. Directed by Maribel Legarda, written by Liza Magtoto. Matinees and regular shows run Fridays to Sundays till Mar. 9, at The PETA Theater Center, #5 Eymard Drive, New Manila, Quezon City. Tickets available at the box office, or call PETA (02) 7256244 or (0917) 5765400, or Ticket World (02) 8919999.
source: Philippine Star Column of Darius Bondoc
The latest “victim” is Korean conglomerate Hanjin. A veteran of 70 contracts in the Philippines, it didn’t expect this kind of rat in the Puerto Princesa Airport Development Project. The work, to be financed by the Korean Export-Import Bank, was open only to Korean firms. The DOTC hired Korea’s Incheon International Airport Corp. as consultant for the bidding and design-structure. The bidding was not just for the lowest price the government would pay, 30 percent of the grade, but also best technical (design-building) plan, 70 percent.
Aside from Hanjin, only one other Korean giant joined, Kumho. The rivals submitted the financial bids last October, then presented their credentials in November. Within that regulation period Hanjin protested Kumho’s conflict of interest. It turned out the latter was a partner of Incheon Airports in another ongoing DOTC bidding — for the Mactan-Cebu International Airport Project.
Hanjin asked the DOTC to rule on the matter swiftly. Relatedly, it sought clarification on how the DOTC and adviser Incheon Airports would evaluate the technical side. Rightly so, for Incheon Airports would be in a position to cause any bidder to win, no matter what price or technical plan.
The DOTC bidding officers agreed that a ruling needed to be made fast; the legal staff agreed that there indeed was conflict of interest. Anti-graft laws define and penalize such situations. The bidding rules further required disqualification of any bidder that is related to another or to a third party in the bidding process. More so if, that relationship gives it access to information, and influence over the bid of a rival or the outcome of the bidding.
The DOTC did not rule on the matter. Instead it proceeded with the opening of bids last Dec. 12. Hanjin gave the lower bid, $82,923,000, against Kumho’s $83,257,000. Yet the DOTC disregarded the difference of $334,000 (P15 million). As well it disregarded Hanjin’s many letters up to January seeking a ruling on Kumho’s conflict of interest. No amount of cautioning by Malacañang has made the DOTC do right. One excuse it gave was that it was still seeking the Korean EximBank’s stand. Yet the bank had stated since Jan. 6 that it would let the DOTC rule on the issue. More so since, the bank knows, the DOTC’s bidding and legal staffs already rendered opinions against the conflict of interest.
Incidentally the DOTC opened also last Dec. 12 the bids for the Mactan-Cebu airport project. Confirmed was that Kumho and Incheon Airports truly were participating partners. Back to the Puerto Princesa works, word inside the DOTC is that Incheon Airports has given a higher grade to partner Kumho’s technical plan. That, of course, is to put it ahead of Hanjin’s lower bid in the 70-30 evaluation.
* * *
The Mactan-Cebu airport works are also delayed, this time due to DOTC
overindulgence. The bidding, to build and operate for 25 years a new
passenger terminal, was for the highest toll to be paid the government.
The consortium of Filipino Megawide Construction Corp. and Indian GMR
Infrastructure Ltd. gave the highest offer, P14.404 billion. Giant
Filipino developer Filinvest and its Arab partner came in second, with
P13.999 billion (see Gotcha, 8 Jan. 2014).Megawide-GMR was expecting to sign the contract last Jan. 6, and start work a month later. But then an unfunny thing happened on the way to the signing. The loser, way past the allowable period in Oct.-Nov. to raise issues, gave the DOTC papers about the winner. Supposedly GMR had reneged on an airport contract in the Maldives, for which it slipped financially, so incapable to undertake the Philippine project. The Indian firm retorted that it was the one suing the island-state for $800 million, for rescinding its contract in a coup d’état. The case was in fact among its documentary submissions in compliance with transparency rules.
Instead of disqualifying the belated complainant, the DOTC entertained the belated complaint. Pending any findings, the project lies in limbo.
* * *
The DOTC is embroiled in yet another bidding storm — over the
single-fare system for Metro Manila’s three railway lines. The SM-led
consortium says it gave the superior bid of P1.008 billion, to be paid
to the government up-front. But the DOTC is awarding the deal to a
consortium of Ayala Corp. and Metro Pacific. The latter’s bid was only
P103,000 more than SM’s. But it would pay the government only P279
million initially, with the P800-million balance to come in tranches
after reaching the 750-million quarterly ridership. That would be in
10-11 years.The DOTC is accused of fudging its own rules in the P3.85-billion bidding for vehicle license platemaking. Midway into the process, it split the contracts for car and motorcycle plates. This was to accommodate two bidders who lacked financial track records for the combined amount. The DOTC also imposed a US quality-standards test that no longer exists, yet junked a newer one taken by only the lowest bidder. This was to make “compliant” the two favored though higher bidders.
* * *
Why’s everybody talking about PETA’s theater season opener, the comedy-musicale “Rock of Aegis”?For one, it’s a takeoff from the Broadway hit musicale, “Rock of Ages,” this time adopting songs of the hot local rock band of the ‘80s-’90s, Aegis. For another, the time-place setting is so familiar, the Great Flood in Metro Manila from Super Storm Ondoy of 2009, repeated elsewhere in Luzon, Visayas, and Mindanao. For yet another, it highlights not only the resiliency of the Filipino to rise from calamity, but also the need for political leaders to answer for the disaster unpreparedness.
Starring Isay Alvarez, Robert Seña, Aicelle Santos, Joan Bugcat, and Kalila Aguilos. Directed by Maribel Legarda, written by Liza Magtoto. Matinees and regular shows run Fridays to Sundays till Mar. 9, at The PETA Theater Center, #5 Eymard Drive, New Manila, Quezon City. Tickets available at the box office, or call PETA (02) 7256244 or (0917) 5765400, or Ticket World (02) 8919999.
* * *
Catch Sapol radio show, Saturdays, 8-10 a.m., DWIZ (882-AM).source: Philippine Star Column of Darius Bondoc
The TPLEx dilemma
THERE’S NO DENYING that building roads
translate to more favorable votes come election time. Over the past
holidays, no less than the President himself inaugurated the Paniqui
junction of the TPLEx, adding another 10 kms. to the initial 13 kms. of
dual carriageway opened just last Halloween. It was good news copy as
all the frenzy of mass crucifixions of corrupt public officials and
political enemies can make everyone headline weary. Judging by the
northbound SCTEx to TPLEx traffic the past holiday seasons should put to
rest doubts as to the commercial viability of North Luzon tollways. The
break-even point of 25,000 vehicles per day should soon be weekend and
perhaps daily reality.
But with this success comes the major traffic jams at the Tarlac SCTEx temporary toll plaza at San Miguel. Palliative measures like prepayment of the Tarlac exit toll at the Mabalacat entry have been a great help, but this heavy traffic situation could have been avoided if the Palace acted three years ago.
As early as 2009, the BCDA, owners of the SCTEx and MNTC, NLEx long term operations and maintenance contractors and interim O&M contractors of the SCTEx, already anticipated the buildup in traffic once the TPLEx opens, even in initial single carriageway form. Plans were laid for a big toll plaza in Tarlac. And if long term integration with NLEx operations was to be approved, the Dau and the so-called Clark Logistics or Mabalacat toll plazas were to be eliminated, reducing toll queues twice over. The upgrading of several interchanges in Tarlac and north Pampanga were in the cards to adjust to new exits and entries.
Even the reconfiguration of the Pasig-Potrero viaduct into several more bridge spans to replace the earth fill approaches was planned. If this was done three years ago, the damage to this scenic viaduct wrought by typhoon Maring would not have happened. Today, this span is traversed by temporary bailey bridge.
When TPLEx construction started, PIDC, the project proponent, was hamstrung by the absence of financial backing by JICA, which earlier gave generous terms to build the SCTEx. PIDC broke ground during the last year of the Arroyo administration but the pace of work for the TPLEx only accelerated when San Miguel Infra came in as a financially muscular partner. SMC’s later partnerships with Citra for the Skyway and SLEx, plus its investment in the STAR tollway, gave it the nous and gravitas in tollway operations and maintenance. This helped SMC win the PPP bid for the NAIA expressway extension.
With SMC on board, the total 89.0 kms of TPLEx all the way to Rosario, La Union may finish in 2015, three years ahead of schedule. Moreover, the TPLEx will, from the very start, operate as a limited access dual carriageway instead of the initial piecemeal plan of operating as a single carriageway until revenues can pay for further construction. As a dual carriageway, north bound motorists will face reduced risk of headline-grabbing head-on collisions, which bedevil the two-lane Lipa to Batangas segment of STAR.
No less than President Aquino was impressed with the speed at which the TPLEx progressed ever since SMC’s entry. So much so that at his inauguration speech of the Paniqui interchange last December, he called SMC’s Ramon S. Ang “idol”. But the President could do better than return the favor by alleviating traffic at the Tarlac toll plaza connecting the SCTEx to the TPLEx. All the Palace has to do is approve the O&M contract between the BCDA and MNTC, which has been pending since 2009 .
The Arroyo administration deferred approval of this contract with MNTC in deference to the incoming Aquino government, which promptly cancelled it. Within a year, there were no other qualified takers for the interim operation and maintenance of the SCTEx. Understandably so, as O&M contracts entail huge investments that should have at least a 10- or, ideally, a 20- or even 30-year term. It is not a security agency contract that one can cancel on a whim as there are gazillions of other options out there. Not so with outfits experienced in tollway O&M.
So its back to the original BCDA MNTC contract, by which time MNTC was already absorbed by Metro Pacific Tollways. After three years and three further sweeteners, the DoF finally endorsed the contract to the Palace and that is where it sits, gathering dust as traffic to the TPLEx piles up.
Its only natural for the officials in power to have their favorites, specially when the performance of such favorites enhances their prestige. By extension, those who are not in the inner circles, deserved or not, won’t be able to count on favorable treatment. Metro Pacific’s Maynilad water utility, which heavily invested in greatly improving the city’s water supply, was not allowed by the MWSS a price hike as per contract. It was even imposed a price cut. Metro Pacific’s Meralco, hard hit by the shutdown of the Malampaya gas field, couldn’t even get a compensatory power rate hike from the ERB as mandated by the EPIRA law. Instead, the Supreme Court issued a restraining order while other administrative arms want to investigate the members of the Energy Regulatory Board. The DoE, bowing to populist pressure and other powerful interests, is again “open” to having Congress review the EPIRA law. Metro Pacific’s MRT has been prevented from investing in new trains, new tracks, signaling equipment and maintenance contracts but the DoTC has not yet bought out Metro Pacific and other private investors in the MRT.
Tactically and strategically, it is always good populist ad copy to be against price increases to try to please the masses as the alleged “bossings” of this administration. So it’s tough being a business conglomerate that owns and funds power, water and rail infrastructure and not be in the inner circle of favorites and idols.
Prejudices aside, the delay in approving the long term SCTEx O&M contract that integrates it to the NLEx is prolonging the agony of those heading for the TPLEx. The private sector, idol or otherwise, has put in a lot of time and money to realize a fully functioning TPLEx three years ahead of schedule. It would be a tragic irony if this administration fails to improve traffic flow by having delayed the SCTEx O&M integration with the NLEx. But if we believe the hype that we are the “bossings” -- us motorists stuck in long toll queues at San Miguel Tarlac temporary toll plaza heading for the TPLEx -- then we hope the Palace gets the integration contract going. That way, there is, at least, a semblance of a “level playing field”. Even just for appearances sake. What, indeed, are we in power for?
source: Businessworld's Column of Tito Hermoso
But with this success comes the major traffic jams at the Tarlac SCTEx temporary toll plaza at San Miguel. Palliative measures like prepayment of the Tarlac exit toll at the Mabalacat entry have been a great help, but this heavy traffic situation could have been avoided if the Palace acted three years ago.
As early as 2009, the BCDA, owners of the SCTEx and MNTC, NLEx long term operations and maintenance contractors and interim O&M contractors of the SCTEx, already anticipated the buildup in traffic once the TPLEx opens, even in initial single carriageway form. Plans were laid for a big toll plaza in Tarlac. And if long term integration with NLEx operations was to be approved, the Dau and the so-called Clark Logistics or Mabalacat toll plazas were to be eliminated, reducing toll queues twice over. The upgrading of several interchanges in Tarlac and north Pampanga were in the cards to adjust to new exits and entries.
Even the reconfiguration of the Pasig-Potrero viaduct into several more bridge spans to replace the earth fill approaches was planned. If this was done three years ago, the damage to this scenic viaduct wrought by typhoon Maring would not have happened. Today, this span is traversed by temporary bailey bridge.
When TPLEx construction started, PIDC, the project proponent, was hamstrung by the absence of financial backing by JICA, which earlier gave generous terms to build the SCTEx. PIDC broke ground during the last year of the Arroyo administration but the pace of work for the TPLEx only accelerated when San Miguel Infra came in as a financially muscular partner. SMC’s later partnerships with Citra for the Skyway and SLEx, plus its investment in the STAR tollway, gave it the nous and gravitas in tollway operations and maintenance. This helped SMC win the PPP bid for the NAIA expressway extension.
With SMC on board, the total 89.0 kms of TPLEx all the way to Rosario, La Union may finish in 2015, three years ahead of schedule. Moreover, the TPLEx will, from the very start, operate as a limited access dual carriageway instead of the initial piecemeal plan of operating as a single carriageway until revenues can pay for further construction. As a dual carriageway, north bound motorists will face reduced risk of headline-grabbing head-on collisions, which bedevil the two-lane Lipa to Batangas segment of STAR.
No less than President Aquino was impressed with the speed at which the TPLEx progressed ever since SMC’s entry. So much so that at his inauguration speech of the Paniqui interchange last December, he called SMC’s Ramon S. Ang “idol”. But the President could do better than return the favor by alleviating traffic at the Tarlac toll plaza connecting the SCTEx to the TPLEx. All the Palace has to do is approve the O&M contract between the BCDA and MNTC, which has been pending since 2009 .
The Arroyo administration deferred approval of this contract with MNTC in deference to the incoming Aquino government, which promptly cancelled it. Within a year, there were no other qualified takers for the interim operation and maintenance of the SCTEx. Understandably so, as O&M contracts entail huge investments that should have at least a 10- or, ideally, a 20- or even 30-year term. It is not a security agency contract that one can cancel on a whim as there are gazillions of other options out there. Not so with outfits experienced in tollway O&M.
So its back to the original BCDA MNTC contract, by which time MNTC was already absorbed by Metro Pacific Tollways. After three years and three further sweeteners, the DoF finally endorsed the contract to the Palace and that is where it sits, gathering dust as traffic to the TPLEx piles up.
Its only natural for the officials in power to have their favorites, specially when the performance of such favorites enhances their prestige. By extension, those who are not in the inner circles, deserved or not, won’t be able to count on favorable treatment. Metro Pacific’s Maynilad water utility, which heavily invested in greatly improving the city’s water supply, was not allowed by the MWSS a price hike as per contract. It was even imposed a price cut. Metro Pacific’s Meralco, hard hit by the shutdown of the Malampaya gas field, couldn’t even get a compensatory power rate hike from the ERB as mandated by the EPIRA law. Instead, the Supreme Court issued a restraining order while other administrative arms want to investigate the members of the Energy Regulatory Board. The DoE, bowing to populist pressure and other powerful interests, is again “open” to having Congress review the EPIRA law. Metro Pacific’s MRT has been prevented from investing in new trains, new tracks, signaling equipment and maintenance contracts but the DoTC has not yet bought out Metro Pacific and other private investors in the MRT.
Tactically and strategically, it is always good populist ad copy to be against price increases to try to please the masses as the alleged “bossings” of this administration. So it’s tough being a business conglomerate that owns and funds power, water and rail infrastructure and not be in the inner circle of favorites and idols.
Prejudices aside, the delay in approving the long term SCTEx O&M contract that integrates it to the NLEx is prolonging the agony of those heading for the TPLEx. The private sector, idol or otherwise, has put in a lot of time and money to realize a fully functioning TPLEx three years ahead of schedule. It would be a tragic irony if this administration fails to improve traffic flow by having delayed the SCTEx O&M integration with the NLEx. But if we believe the hype that we are the “bossings” -- us motorists stuck in long toll queues at San Miguel Tarlac temporary toll plaza heading for the TPLEx -- then we hope the Palace gets the integration contract going. That way, there is, at least, a semblance of a “level playing field”. Even just for appearances sake. What, indeed, are we in power for?
source: Businessworld's Column of Tito Hermoso
Monday, February 3, 2014
Aquino claims classroom lack now erased
PRESIDENT Benigno S. C. Aquino III yesterday claimed his administration has filled the classroom shortages in public schools left by his predecessor, former President Gloria Macapagal-Arroyo.
“Today (yesterday), we witnessed the ceremonial turn-over of
66,813 new classrooms which also erased the backlog we inherited from
the past administration,” Mr. Aquino said in a speech at the Carmona
National High School in Cavite.
Mr. Aquino said the Arroyo administration left a backlog of 66,800 classrooms, each costing an estimated at P800,000. His government’s public-private partnership program, the president added, had helped address part of the need.
Two groups -- the Citicore-Megawide and BF Corp.-Riverbanks Development Corp. consortiums -- won the P16.42 billion PPP for School Infrastructure Project Phase 1 (PSIP-I), involving around 9,300 classrooms, in 2012.
An update is expected to be released today.
The second phase, portions of which were awarded last year, involves the construction of an additional 4,370 classrooms.
Communications Secretary Herminio B. Coloma, Jr. said the Department of Education (DepEd) has also added over 62 million textbooks to address backlogs. He claimed the government saved as much as 40% as the materials were purchased a lower price.
The DepEd has also addressed a school chair shortage of 2.5 million and added 103,000 teachers, he said.
“We can see here that DepEd has made meaningful accomplishments and this serves as basis in the social development program of our government,” Mr. Coloma said.
Asked to comment, Kabataan party-list representative James Mark Terry L. Ridon said: “I am certain that the President has been misled” with regard to the classroom backlog having been addressed.
“All it takes is to go around the schools to determine that our kids still have no adequate classrooms over their heads,” the legislator said.
Mr. Aquino said the Arroyo administration left a backlog of 66,800 classrooms, each costing an estimated at P800,000. His government’s public-private partnership program, the president added, had helped address part of the need.
Two groups -- the Citicore-Megawide and BF Corp.-Riverbanks Development Corp. consortiums -- won the P16.42 billion PPP for School Infrastructure Project Phase 1 (PSIP-I), involving around 9,300 classrooms, in 2012.
An update is expected to be released today.
The second phase, portions of which were awarded last year, involves the construction of an additional 4,370 classrooms.
Communications Secretary Herminio B. Coloma, Jr. said the Department of Education (DepEd) has also added over 62 million textbooks to address backlogs. He claimed the government saved as much as 40% as the materials were purchased a lower price.
The DepEd has also addressed a school chair shortage of 2.5 million and added 103,000 teachers, he said.
“We can see here that DepEd has made meaningful accomplishments and this serves as basis in the social development program of our government,” Mr. Coloma said.
Asked to comment, Kabataan party-list representative James Mark Terry L. Ridon said: “I am certain that the President has been misled” with regard to the classroom backlog having been addressed.
“All it takes is to go around the schools to determine that our kids still have no adequate classrooms over their heads,” the legislator said.
Monday, January 13, 2014
Splitting the pie: PEZA ITH or 5% GIT
IS YOUR company one of the more fortunate
enterprises enjoying PEZA (Philippine Economic Zone Authority)
incentives? If it is, then you are enjoying either the Income Tax
Holiday (ITH) incentive or the 5% Gross Income Tax (GIT) regime.
As provided under Republic Act 7916, PEZA-registered enterprises may be entitled to ITH of four to six years, depending on whether the firm has been granted pioneer or non-pioneer status. After the expiration of the ITH period, they shall be subject to the 5% GIT, in lieu of all national and local taxes to which the enterprise is directly liable.
Under the law, the 5% GIT shall be split as follows: 3% to the national government, and 2% to the Local Government Unit (LGU) where the enterprise is located.
So, how do these PEZA enterprises remit the above taxes to the Bureau of Internal Revenue (BIR) and the LGU? Are they required to prepare and file two separate tax returns -- one for the BIR and one for the LGU? What if the enterprise is located in two or more cities/municipalities? How will the 2% share be split?
Under Revenue Regulations No. 01-00, a PEZA-registered enterprise under the 5% GIT regime shall still be required to file only one quarterly and final income tax return. However, after filing the income tax return with the BIR, the taxpayer should submit a copy of the filed return to the LGU for payment of the 2% share.
In case the enterprise is located in more than two sites, the said enterprise shall also submit together with its quarterly/annual income tax return a separate schedule showing (1) the “gross income earned” for the quarter without, however, showing the details on how the same has been computed; (2) the 5% special tax due thereon; (3) the 3% tax share of the National Government; and (4) the share of each city/municipality from the 2% tax share of cities and municipalities.
As provided in the PEZA implementing rules and regulations, the share of each city/municipality covering the area where the enterprise is situated shall be computed based on the ratio of the area of the city/municipality included in the lot occupied by the ecozone-registered enterprise to the total area occupied by the establishment. On the other hand, in case of IT enterprises that have different sites in different cities/municipalities, the share of the different LGUs where the sites are located shall be computed on the taxable income attributed to such sites.
Considering the above rules, it is then very important for PEZA enterprises to make sure that only the 3% share is remitted to the BIR. Any 2% LGU share erroneously paid to the BIR cannot be considered equivalent payment of that due to the LGU/s.
Nonetheless, in case an error has already been committed, the company may opt to apply for refund from the BIR.
In a recent Court of Tax Appeals (CTA) case (CTA Case No. 8465), where both the 3% share of the National Government and 2% of the LGU in the 5% preferential tax rate were remitted to the BIR, the overpayment representing the 2% share of the LGU was considered an erroneously paid tax. Hence, this entitled the PEZA-registered enterprise to a claim for cash refund or issuance of tax credit certificate.
The CTA noted that, unlike with a VAT refund, there is no specific regulation enumerating the documents needed to be presented when filing an administrative claim for refund of erroneous payment of the 5% special income tax for PEZA-registered enterprises. It thus held that so long as a taxpayer is able to fully substantiate the amount to be refunded, as well as show its entitlement for the refund, the taxpayer should be entitled to refund of its overpaid taxes.
In support of its claim for refund, the PEZA-registered enterprise submitted its duly accomplished application for tax credit/refund, BIR certificate of registration, PEZA registration, and pertinent quarterly and annual income tax returns. The CTA deemed the documents sufficient to determine the validity of the taxpayer’s claim for tax refund; hence, the taxpayer was entitled to a refund of its erroneously paid tax.
OTHER LGU REQUIREMENTS
The Jan. 20 deadline for LGU registration renewal is just mere days away.
PEZA law and circular explicitly provides that, regardless of the tax regimes, PEZA enterprises are exempt from the payment of any and all local government imposts, fees, licenses or taxes. However, as we all know, there are still some cities and municipalities that require PEZA-registered entities to obtain local government permits and pay the corresponding permit fees and other regulatory fees, such as zoning fee, garbage fee, and fire safety inspection fee, among others. Hence, we would like to take this opportunity to remind PEZA enterprises to assess their obligation to renew their LGU registration and ensure their compliance.
The author is a manager with the tax advisory and compliance division of Punongbayan & Araullo. P&A is a leading audit, tax, advisory and outsourcing services firm and is the Philippine member of Grant Thornton International Ltd.
source: Businessworld
As provided under Republic Act 7916, PEZA-registered enterprises may be entitled to ITH of four to six years, depending on whether the firm has been granted pioneer or non-pioneer status. After the expiration of the ITH period, they shall be subject to the 5% GIT, in lieu of all national and local taxes to which the enterprise is directly liable.
Under the law, the 5% GIT shall be split as follows: 3% to the national government, and 2% to the Local Government Unit (LGU) where the enterprise is located.
So, how do these PEZA enterprises remit the above taxes to the Bureau of Internal Revenue (BIR) and the LGU? Are they required to prepare and file two separate tax returns -- one for the BIR and one for the LGU? What if the enterprise is located in two or more cities/municipalities? How will the 2% share be split?
Under Revenue Regulations No. 01-00, a PEZA-registered enterprise under the 5% GIT regime shall still be required to file only one quarterly and final income tax return. However, after filing the income tax return with the BIR, the taxpayer should submit a copy of the filed return to the LGU for payment of the 2% share.
In case the enterprise is located in more than two sites, the said enterprise shall also submit together with its quarterly/annual income tax return a separate schedule showing (1) the “gross income earned” for the quarter without, however, showing the details on how the same has been computed; (2) the 5% special tax due thereon; (3) the 3% tax share of the National Government; and (4) the share of each city/municipality from the 2% tax share of cities and municipalities.
As provided in the PEZA implementing rules and regulations, the share of each city/municipality covering the area where the enterprise is situated shall be computed based on the ratio of the area of the city/municipality included in the lot occupied by the ecozone-registered enterprise to the total area occupied by the establishment. On the other hand, in case of IT enterprises that have different sites in different cities/municipalities, the share of the different LGUs where the sites are located shall be computed on the taxable income attributed to such sites.
Considering the above rules, it is then very important for PEZA enterprises to make sure that only the 3% share is remitted to the BIR. Any 2% LGU share erroneously paid to the BIR cannot be considered equivalent payment of that due to the LGU/s.
Nonetheless, in case an error has already been committed, the company may opt to apply for refund from the BIR.
In a recent Court of Tax Appeals (CTA) case (CTA Case No. 8465), where both the 3% share of the National Government and 2% of the LGU in the 5% preferential tax rate were remitted to the BIR, the overpayment representing the 2% share of the LGU was considered an erroneously paid tax. Hence, this entitled the PEZA-registered enterprise to a claim for cash refund or issuance of tax credit certificate.
The CTA noted that, unlike with a VAT refund, there is no specific regulation enumerating the documents needed to be presented when filing an administrative claim for refund of erroneous payment of the 5% special income tax for PEZA-registered enterprises. It thus held that so long as a taxpayer is able to fully substantiate the amount to be refunded, as well as show its entitlement for the refund, the taxpayer should be entitled to refund of its overpaid taxes.
In support of its claim for refund, the PEZA-registered enterprise submitted its duly accomplished application for tax credit/refund, BIR certificate of registration, PEZA registration, and pertinent quarterly and annual income tax returns. The CTA deemed the documents sufficient to determine the validity of the taxpayer’s claim for tax refund; hence, the taxpayer was entitled to a refund of its erroneously paid tax.
OTHER LGU REQUIREMENTS
The Jan. 20 deadline for LGU registration renewal is just mere days away.
PEZA law and circular explicitly provides that, regardless of the tax regimes, PEZA enterprises are exempt from the payment of any and all local government imposts, fees, licenses or taxes. However, as we all know, there are still some cities and municipalities that require PEZA-registered entities to obtain local government permits and pay the corresponding permit fees and other regulatory fees, such as zoning fee, garbage fee, and fire safety inspection fee, among others. Hence, we would like to take this opportunity to remind PEZA enterprises to assess their obligation to renew their LGU registration and ensure their compliance.
The author is a manager with the tax advisory and compliance division of Punongbayan & Araullo. P&A is a leading audit, tax, advisory and outsourcing services firm and is the Philippine member of Grant Thornton International Ltd.
source: Businessworld
Thursday, January 9, 2014
Oil discovered in Cebu close to shore
MANILA, Philippines -- A new oil discovery in Cebu declared by the Department of Energy is expected to augur well for the Philippines, which is heavily dependent on imported oil.
Australian firm Gas2Grid formally announced the approval by the Energy Department of its application to declare the Malolos-1 oil well on the shore ofCebu as an "oil discovery."
"The company advises (announces) that the Philippine Department of Energy has formally recognised Malolos-1 as an oil discovery and approved an extension of SC [Service Contract] 44 in order to conduct oil production with the aim of establishing a commercial oilfield," Gas2Grid said in an announcement.
Earlier Gas2Grid managing director Dennis Morton said application for declaration of an oil discovery is the first step in appraising and developing the Malolos oilfield.
Commercial production
"When approved by the DOE it will provide an additional minimum period of 12 months to flow test the well and establish commercial production. Following the completion of that work and with the DOE's approval of commercial status, the Malolos oilfield will enter a 25 year production phase.
Morton added that available technical data also indicated the possibly that Service Contract 44 "is much larger Malolos oilfield than initially assessed."
Service Contract 44, covers 750 square kilometres in central Cebu.
Gas2Grid successfully perforated and flow tested two oil bearing sandstones in Malolos-1.
"Oil was produced on short term test at indicative production rates of between 100 to 200 barrels of oil per day (bopd) ... Previously drilled wells, Malolos-1 and Malolos-4, recorded oil bearing sandstones over a 496 metre (1,627 feet) vertical interval. The recent oil test production rates (between 100 - 200 bopd) confirm Malolos-1 as an oil discovery well.
"We are confident that further testing of Malolos-1 will result in commercial oil production from a much larger Malolos oilfield than currently assessed," Gas2Grid said.
Although measurements and testing in Malolos-1 proved that the well can produce oil at rates between 100 to 200 barrels per day, "initial assessment of the oil volume potential within the Malolos oilfield is a 'Contingent Resource' oil in place in the two oil productive sandstones in the range of between a 'Low Estimate' (1C) of 4 million barrels and a 'High Estimate' (3C) of 42 million barrels, with a 'Best Estimate' (2C) of 12 million barrels of 'Total Oil Initially in Place'."
Land proximity
Another advantage of the onshore Malolos oilfield is its proximity to land which makes transporting its products and establishing a pipeline highly feasible and commercially viable. Most of the oilfields in the country are located far offshore and required relatively bigger investments in terms of infrastructure.
Little is known publicly concerning the discovery but a July 18, 2013 service contract for Malolos 1, provides the following description: "The Malolos Oil Field is located some eight kilometres by road from the Cebu's western coast.
Oil transportation options from the Malolos Oil Field include road transport by a new, all weather, concrete road from the well site to coastal port options at nearby Aloguinsan (8 kms - less than 10 minutes by road) or the larger, established port of Toledo (32 kms - 30 minutes by road). One option would be to load the oil onto marine transport for sale either to one of two oil refineries located in Batangas, Philippines (approximately 500 kms north) or in Singapore."
source: ABS-CBN News
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