The Philippine economy may grow “below potential” this year along
with other economies in the Asia Pacific region, according to Moody’s
Analytics.
In a commentary titled “Asia Pacific Outlook: A Slow Start to the
Year,” Moody’s Analytics projected that Philippine gross domestic
product (GDP) growth for 2014 may settle at 5.8 percent.
GDP is the market value of all officially recognized final goods and
services produced within a country in a year, or other given period of
time.
The latest GDP forecast of Moody’s Analytics is way below its earlier
forecast for the year of 6.5 percent and the Philippine government’s
targeted growth range of 6.5 percent to 7.5 percent for 2014.
“Similarly, our 2014 forecast for Asia is broadly unchanged, although
weak first-quarter data have accentuated downside risk. GDP growth for
the full year will be below potential, particularly if the first quarter
undershoots, but we expect growth to accelerate in the third quarter,
nearing potential rates in most of the region by year’s end,” it stated.
The analytical firm also said it expects regional growth to be near 5
percent in the second half of 2014, from just above 4 percent in the
opening half, with most economies reaching their potential growth rates
in 2015.
On the other hand, it said that the rise in inflation later in 2014
will prompt some central banks to tighten monetary policy, adding that
the Philippines’ Bangko Sentral ng Pilipinas will follow a rate hike
among developed world central banks this year and into 2015.
“Rising rates will offset some of the capital outflows triggered by
the US Federal Reserve’s moves to unwind its monetary stimulus, so most
regional Asian currencies should finish the year only slightly weaker
than they began it,” it added.
Moody’s Analytics also said that other risks to regional growth
remain stable, but there has been talk among Southeast Asian central
banks of an emerging housing bubble that would be vulnerable as the Fed
unwinds its quantitative easing.
“Near-term risk appears low, but if house prices continue to rise in
the next couple of years it could become a concern,” it warned.
The firm said that the challenge for all Asian central banks is that
if the broader economy fails to improve enough to warrant higher
interest rates, then these property markets, fanned by low interest
rates, could inflate problematically and may require capital controls or
some other form of macroprudential action.
Moody’s Analytics is a division of Moody’s Corp. and provides
expertise in economic and consumer credit analysis, credit research and
risk measurement, enterprise risk management and structured analytics
and valuation.
source: Manila Times
Thursday, March 20, 2014
Restrictive policies ‘deter investors’
THE Philippines’ restrictive foreign ownership policy remains a major
issue for many foreign companies, including those in Spain who want to
invest in the country, according to the Spanish ambassador to the
Philippines.
Ambassador Jorge Domecq, in a media briefing held at his residence in Makati City, said the Philippines should change some of its policies to attract foreign investments.
“We share the same concern as the other European Union [EU] countries, undoubtedly, that [foreign ownership policy] is an issue for many firms,” he said.
“I understand that it will require a law to enforce it but I think it will help encourage more Spanish investors down the road,” Domecq said.
The House of Representatives has started tackling a resolution that aims to amend certain restrictive economic provisions in the country’s 17-year-old charter. The measure specifically seeks to accelerate economic growth by removing restrictive economic provisions and offering foreign businesses a more conducive investment landscape.
The ambassador however noted that despite the country’s restrictive policies, Spanish firms continue to do business with the Philippines.
He said the first Public-Private Partnership (PPP) project involving the contract for the Daang Hari tollway was awarded to a consortium that includes Spanish engineering company Getina.
There are 10 major Spanish companies present in the Philippines including CEAMSA, the second largest producer of carrageenan, a product derived from seaweeds and used for preserving food.
Domecq announced the visit to Manila of Spain’s Minister of Foreign Affairs Jose Manuel Garcia-Margallo on March 24.
According to the envoy, Garcia-Margallo will meet with President Benigno Aquino 3rd and other key officials and will sign eight agreements between the Philippines and Spain, including the 6th Joint Commission for Technical Cooperation that deals with governance and disaster risk reduction.
“We will also be helping and will continue to support the peace process both with the Moro Islamic Liberation Front in Mindanao and throughout the country,” Domecq said.
Other possible agreements that will be signed during Garcia-Margallo’s visit are pacts on combating transnational crime; a cooperation plan between the University of the Philippines and Ateneo de Manila University and the Ministry of Education, Culture and Sports of Spain; memorandum of understanding on the Development and Promotion of Teaching Spanish Language and Culture between the Department of Science and Technology, Spain’s Ministry of Education and the Cervantes Institute and the Spanish Agency for international development cooperation; memorandum of agreement (MOU) between the National Statistics Office and the Consulate General of Spain in Manila and the MOU between the high council of chambers of commerce, industry and shipping of Spain and the Makati Business Club and the confederation of employers and industry of Spain.
source: Manila Times
Ambassador Jorge Domecq, in a media briefing held at his residence in Makati City, said the Philippines should change some of its policies to attract foreign investments.
“We share the same concern as the other European Union [EU] countries, undoubtedly, that [foreign ownership policy] is an issue for many firms,” he said.
“I understand that it will require a law to enforce it but I think it will help encourage more Spanish investors down the road,” Domecq said.
The House of Representatives has started tackling a resolution that aims to amend certain restrictive economic provisions in the country’s 17-year-old charter. The measure specifically seeks to accelerate economic growth by removing restrictive economic provisions and offering foreign businesses a more conducive investment landscape.
The ambassador however noted that despite the country’s restrictive policies, Spanish firms continue to do business with the Philippines.
He said the first Public-Private Partnership (PPP) project involving the contract for the Daang Hari tollway was awarded to a consortium that includes Spanish engineering company Getina.
There are 10 major Spanish companies present in the Philippines including CEAMSA, the second largest producer of carrageenan, a product derived from seaweeds and used for preserving food.
Domecq announced the visit to Manila of Spain’s Minister of Foreign Affairs Jose Manuel Garcia-Margallo on March 24.
According to the envoy, Garcia-Margallo will meet with President Benigno Aquino 3rd and other key officials and will sign eight agreements between the Philippines and Spain, including the 6th Joint Commission for Technical Cooperation that deals with governance and disaster risk reduction.
“We will also be helping and will continue to support the peace process both with the Moro Islamic Liberation Front in Mindanao and throughout the country,” Domecq said.
Other possible agreements that will be signed during Garcia-Margallo’s visit are pacts on combating transnational crime; a cooperation plan between the University of the Philippines and Ateneo de Manila University and the Ministry of Education, Culture and Sports of Spain; memorandum of understanding on the Development and Promotion of Teaching Spanish Language and Culture between the Department of Science and Technology, Spain’s Ministry of Education and the Cervantes Institute and the Spanish Agency for international development cooperation; memorandum of agreement (MOU) between the National Statistics Office and the Consulate General of Spain in Manila and the MOU between the high council of chambers of commerce, industry and shipping of Spain and the Makati Business Club and the confederation of employers and industry of Spain.
source: Manila Times
Electric companies’ P20-B highway robbery thwarted
There were two big news stories in the past two days affecting the
lives of millions of Filipinos in Metro Manila and adjacent towns, but
which, surprisingly or unsurprisingly, were buried in the inside pages
of mainstream newspapers and reported only as in-the-meantime items.
Except for this paper, that is. It bannered this news, for which I’m
proud to be part of it.
The Energy Regulatory Commission has stopped the Manila Electric Company’s (Meralco) attempt in December and January to overcharge consumers by P20 billion.
Stung by public outrage that it wasn’t doing its job in protecting electricity consumers, the ERC last week ordered the Philippine Electricity Market Corp. (PEMC) that runs the wholesale Electricity Spot Market (WESM) to find out if Meralco’s claims of the high costs of electricity it bought at that market were correct.
Meralco had claimed that the steep rises of its rates for December and January were due respectively to the P33 per kilowatt-hour and P36/kWh price of the electricity it bought from the WESM in November and December.
False prices, PEMC president Melinda Ocampo reported Tuesday, because the power producers violated market rules, resulting in a colossal market failure. (See for clarification my January 5, 2014 column “USAID study: Electricity ‘spot market’ a farce.”)
Ocampo reported that her firm’s investigation showed that the WESM average price should be P6 per kilowatt-hour for November 2013, and P6.24/kWh in December—shockingly less than one-fifth of what Meralco claimed were the prices it paid for.
(The WESM is the market in which companies are required to offer the
power they produce, from which Meralco and other
electricity-distribution firms purchase the electricity they need
whenever the generator firms with which they have long-term supply
contracts are unable to provide them with the power consumers need. )
Energy Secretary Carlos Petilla on Tuesday also pointed out: “The recalculated rates (of WESM) show a big gap.” And, “The (real) rate is a little over P6 per kWh. It’s an average price for both months. Compared to November and December, it’s a big drop,” said Petilla, who also chairs the PEMC.
This means the WESM power it bought in November should have cost Meralco not the P9.5 billion it reported, but just P2.1 billion, for a difference of P7.4 billion. For December, it cost Meralco not P12.3 billion that it claimed, but only P2.1 billion–a discrepancy of P10.2 billion.
The sum of the discrepancies of the two months is a staggering P20 billion.
An Oxford dictionary defines the idiom “highway robbery” as “the fact of someone charging too much money for something.” That’s a good definition as any for what Meralco and the power generators it bought from attempted to do.
This P20 billion cost would have been passed on in December and January to its captive market, the 10 million residents of metropolitan Manila and adjacent provinces, had the Supreme Court not stopped it in response to petitions claiming the rate hikes were illegal. The Supreme Court action, together with exposes by the independent press on the issue, drove the Energy Regulatory Commission and the PEMC to investigate Meralco’s pricing, especially the costs of its purchases from WESM.
Based on the more accurate WESM prices, the ERC yesterday ordered that Meralco adopt the more accurate rates. It should be P5.9/kwh for December, not the P9.1/kwh Meralco had claimed last year, and for January, P6.1/kwh, not P10.2/kwh.
Those false prices mean huge amounts for a consumer. If you consume 400 kilowatts per month, the more accurate computation would cut your bill by roughly P1,280 for December and P1,640 in January.
The necessity to report and explain the issues using per-kilowatt hour figures conceals the suffering — yes the suffering — inflicted by Meralco’s high rates on Filipinos, who have no choice but to get their electricity from Meralco.
A worker would have paid P1,820 for the 200 kilowatt hours he consumed in December, based on Meralco’s original billing. Under the more accurate bill ordered by the ERC, he would pay only P1,180 — P640 less, a boon that he he would use to buy more nourishing food for his malnourished family.
Try visiting a Meralco frontline office: It’s usually crowded as wageworkers and the poor try to beat the deadline to pay their bills. I’ve even seen poor folks begging, crying for more time to pay, and for the lineman to reconnect their electricity.
The P33/kWh and P36/kWh price at which Meralco bought from the market were the highest in WESM prices since July 2007, when it became fully operational. From that date to October 2013, WESM prices averaged only P7.8 percent, which would give the generators reasonable profit.
However , WESM average prices spiked in the 2012 months of March (P16.3/kWh), June (P20.7), and July (P14.7/kWh). These rate spikes however were not noticed at all, since no one complained against these by filing a suit at the Supreme Court.
The very valid question therefore arises: Were these spikes also unreasonable and due to market failures? Shouldn’t the ERC also investigate these to find out if consumers were actually fleeced by Meralco’s rates, pushed up by these “market prices”?
Discovering now that WESM prices in the last two months of last year were wrong, the ERC should fulfill its mandate for protecting consumes by investigating how Meralco’s profits have been zoomed up since 2009, the Indonesian Anthoni Salim’s firms became Meralco’s controlling stockholders. (See table, and also my column Jan.12, “Meralco’s been raking it in: Why?”)
Is this due to Meralco’s efficiency, to the skill of its new management, especially the purported management genius, its CEO Manuel Pangilinan?
Or is it due to ERC’s failures by allowing the utility company to raise its rates every year, a case of what has been called in economic literature as “regulatory capture”?
Indeed, Indonesian-owned First Pacific Co., Ltd that effectively controls Meralco reported in its 2011 annual report that Meralco’s core income rose to $344 million that year (from $270 million) “due largely to higher tariffs.” In 2012 when its core EBITDA* margin fell, the firm’s report said it reflected “a decrease in (Meralco’s) distribution charge.” (*EBITDA: Earnings before interest payments, taxes, depreciation and amortization.)
What I find outrageous is that even as we have been suffering higher electricity rates since the Indonesian tycoon took over Meralco, his corporate vehicle First Pacific, right after it gained control of Meralco, has jacked up its dividends from it, totaling $128 million from 2009 to 2012.
I’m afraid we’ve lost the capacity to be outraged.
tiglao.manilatimes@gmail.com
www.trigger.ph and www.rigobertotiglao.com
source: Manila Times
The Energy Regulatory Commission has stopped the Manila Electric Company’s (Meralco) attempt in December and January to overcharge consumers by P20 billion.
Stung by public outrage that it wasn’t doing its job in protecting electricity consumers, the ERC last week ordered the Philippine Electricity Market Corp. (PEMC) that runs the wholesale Electricity Spot Market (WESM) to find out if Meralco’s claims of the high costs of electricity it bought at that market were correct.
Meralco had claimed that the steep rises of its rates for December and January were due respectively to the P33 per kilowatt-hour and P36/kWh price of the electricity it bought from the WESM in November and December.
False prices, PEMC president Melinda Ocampo reported Tuesday, because the power producers violated market rules, resulting in a colossal market failure. (See for clarification my January 5, 2014 column “USAID study: Electricity ‘spot market’ a farce.”)
Ocampo reported that her firm’s investigation showed that the WESM average price should be P6 per kilowatt-hour for November 2013, and P6.24/kWh in December—shockingly less than one-fifth of what Meralco claimed were the prices it paid for.
Meralco’s profits zoomed up in 2009, when the Indonesian tycoon Anthoni Salim’s firms took control of it.
Energy Secretary Carlos Petilla on Tuesday also pointed out: “The recalculated rates (of WESM) show a big gap.” And, “The (real) rate is a little over P6 per kWh. It’s an average price for both months. Compared to November and December, it’s a big drop,” said Petilla, who also chairs the PEMC.
This means the WESM power it bought in November should have cost Meralco not the P9.5 billion it reported, but just P2.1 billion, for a difference of P7.4 billion. For December, it cost Meralco not P12.3 billion that it claimed, but only P2.1 billion–a discrepancy of P10.2 billion.
The sum of the discrepancies of the two months is a staggering P20 billion.
An Oxford dictionary defines the idiom “highway robbery” as “the fact of someone charging too much money for something.” That’s a good definition as any for what Meralco and the power generators it bought from attempted to do.
This P20 billion cost would have been passed on in December and January to its captive market, the 10 million residents of metropolitan Manila and adjacent provinces, had the Supreme Court not stopped it in response to petitions claiming the rate hikes were illegal. The Supreme Court action, together with exposes by the independent press on the issue, drove the Energy Regulatory Commission and the PEMC to investigate Meralco’s pricing, especially the costs of its purchases from WESM.
Based on the more accurate WESM prices, the ERC yesterday ordered that Meralco adopt the more accurate rates. It should be P5.9/kwh for December, not the P9.1/kwh Meralco had claimed last year, and for January, P6.1/kwh, not P10.2/kwh.
Those false prices mean huge amounts for a consumer. If you consume 400 kilowatts per month, the more accurate computation would cut your bill by roughly P1,280 for December and P1,640 in January.
The necessity to report and explain the issues using per-kilowatt hour figures conceals the suffering — yes the suffering — inflicted by Meralco’s high rates on Filipinos, who have no choice but to get their electricity from Meralco.
A worker would have paid P1,820 for the 200 kilowatt hours he consumed in December, based on Meralco’s original billing. Under the more accurate bill ordered by the ERC, he would pay only P1,180 — P640 less, a boon that he he would use to buy more nourishing food for his malnourished family.
Try visiting a Meralco frontline office: It’s usually crowded as wageworkers and the poor try to beat the deadline to pay their bills. I’ve even seen poor folks begging, crying for more time to pay, and for the lineman to reconnect their electricity.
The P33/kWh and P36/kWh price at which Meralco bought from the market were the highest in WESM prices since July 2007, when it became fully operational. From that date to October 2013, WESM prices averaged only P7.8 percent, which would give the generators reasonable profit.
However , WESM average prices spiked in the 2012 months of March (P16.3/kWh), June (P20.7), and July (P14.7/kWh). These rate spikes however were not noticed at all, since no one complained against these by filing a suit at the Supreme Court.
The very valid question therefore arises: Were these spikes also unreasonable and due to market failures? Shouldn’t the ERC also investigate these to find out if consumers were actually fleeced by Meralco’s rates, pushed up by these “market prices”?
Discovering now that WESM prices in the last two months of last year were wrong, the ERC should fulfill its mandate for protecting consumes by investigating how Meralco’s profits have been zoomed up since 2009, the Indonesian Anthoni Salim’s firms became Meralco’s controlling stockholders. (See table, and also my column Jan.12, “Meralco’s been raking it in: Why?”)
Is this due to Meralco’s efficiency, to the skill of its new management, especially the purported management genius, its CEO Manuel Pangilinan?
Or is it due to ERC’s failures by allowing the utility company to raise its rates every year, a case of what has been called in economic literature as “regulatory capture”?
Indeed, Indonesian-owned First Pacific Co., Ltd that effectively controls Meralco reported in its 2011 annual report that Meralco’s core income rose to $344 million that year (from $270 million) “due largely to higher tariffs.” In 2012 when its core EBITDA* margin fell, the firm’s report said it reflected “a decrease in (Meralco’s) distribution charge.” (*EBITDA: Earnings before interest payments, taxes, depreciation and amortization.)
What I find outrageous is that even as we have been suffering higher electricity rates since the Indonesian tycoon took over Meralco, his corporate vehicle First Pacific, right after it gained control of Meralco, has jacked up its dividends from it, totaling $128 million from 2009 to 2012.
I’m afraid we’ve lost the capacity to be outraged.
tiglao.manilatimes@gmail.com
www.trigger.ph and www.rigobertotiglao.com
source: Manila Times
12 airports up for upgrades
THE GOVERNMENT plans to upgrade 12
airports, including Manila’s dilapidated main international airport, as
it seeks to attract 10 million foreign tourists by 2016 and help fuel
one of Asia’s fastest growing economies.
Three of the projects have a combined cost of up to P54.6 billion while costs for others are still being finalized.
Half of the planned projects will be done through the Public-Private Partnership (PPP) scheme, Cosette V. Canilao, executive director at the agency overseeing the program, told reporters on the sidelines of an investors’ forum in Manila.
Ms. Canilao also said operations and maintenance of these airports could be "bundled" into one tender, which will be offered to investors later this year.
Transportation Undersecretary Rene K. Limcaoco said the government was looking at building a new terminal for the Ninoy Aquino International Airport (NAIA) in Manila, the Philippines’ main gateway, which is also undergoing repair.
The Puerto Princesa Airport on Palawan island, southwest of Manila, and Clark International Airport in Pampanga, north of the capital, are included in the list of gateways which the government wants to modernize and upgrade.
The planned upgrades will "ease our logistic costs, alleviate our traffic congestion and support the target of the Department of Tourism to achieve its 10 million tourists for 2016," Mr. Limcaoco said at the forum.
The Philippines attracted 4.7 million foreign tourists last year, 300,000 short of its goal, state data showed.
President Benigno Aquino wants to make the tourism sector one of the key drivers of the economy. The economy grew 7.2% in 2013, the second fastest in Asia after China.
Rehabilitation of NAIA Terminal 1 will be completed by early 2015 at the latest, while the airport’s Terminal 3 will be fully-operational in July this year, said Mr. Limcaoco.
He also said the Department of Transportation and Communications (DoTC) is sticking with its end-March target to award the P17.52 billion ($391 million) PPP contract for the Mactan-Cebu International Airport Terminal (MCIA).
‘WE WILL NOT BE BULLIED’
The consortium of GMR Infrastructure Ltd. and Megawide Construction Corp. (GMR-Megawide) has made the highest bid, P14.4 billion, for the MCIA project.
Awarding has been delayed two months, however, due to conflict of interest allegations by a rival bidder, the consortium of Filinvest Development Corp. and Singapore’s Changi Airports International (Filinvest-Changi).
There was also a Senate hearing earlier this month on GMR-Megawide’s ability to finance the project, which consortium officials assured in a press conference yesterday.
"The funds are ready. If we’re given the award, we’ll present the check," GMR Deputy Chief Executive Officer Andrew Acquaah Harrison said at the press conference in Cebu yesterday.
Mr. Harrison said "very advanced talks" are being held with three local banks. The Asian Development Bank, International Finance Corp. and Standard Chartered Bank have also issued testimonial letters on GMR-Megawide’s good financial standing, he added.
Manuel Louie B. Ferrer, Megawide chief marketing officer, said BDO Unibank, Inc., which also funds other Megawide projects, heads the consortium of local banks willing to support the airport projects. He added that the same group of local and foreign banks had also financed around 70% of the P14.4-billion upfront payment.
"We believe this [contract] is rightfully ours. We will not be bullied into retreating. We believe we have the financial and technical capability [to undertake the project]," Mr. Ferrer added.
CONFLICTING REPORTS
In a related development, Senator Sergio R. Osmeña III yesterday chided Ms. Canilao for purportedly announcing that the MCIA contract would be awarded to GMR-Megawide.
A newspaper had reported on its Web site on Tuesday that the PPP Center official had said the DoTC was keeping to its target to award the contract to the consortium by the end of March.
"It is highly irregular that Ms. Canilao has taken it upon herself to speak with authority that the DoTC is set to award the project to GMR-Megawide before the end of the month, even prior to the PBAC’s (Prequalification Bids and Awards Committee) submission of its findings and recommendations to the MCIA Board," Mr. Osmeña said in a press release yesterday.
Asked for comment, however, Ms. Canilao denied ever disclosing that the DoTC would do so.
"I don’t know where he [Mr. Osmeña] got the information that I said that. I did not [announce anything]," Ms. Canilao told BusinessWorld in a text message yesterday.
Mr. Osmeña, in turn, cited the said news report.
For his part, DoTC Spokesman Michael Arthur C. Sagcal told BusinessWorld in a separate text message that the department is still evaluating GMR-Megawide’s qualification requirements.
"We’re in the post-qualification stage, specifically financial evaluation." Mr. Sagcal said. -- Reuters with inputs from Marites S. Villamor in Cebu and M.L.V. Angeles in Manila
source: Businessworld
Three of the projects have a combined cost of up to P54.6 billion while costs for others are still being finalized.
Half of the planned projects will be done through the Public-Private Partnership (PPP) scheme, Cosette V. Canilao, executive director at the agency overseeing the program, told reporters on the sidelines of an investors’ forum in Manila.
Ms. Canilao also said operations and maintenance of these airports could be "bundled" into one tender, which will be offered to investors later this year.
Transportation Undersecretary Rene K. Limcaoco said the government was looking at building a new terminal for the Ninoy Aquino International Airport (NAIA) in Manila, the Philippines’ main gateway, which is also undergoing repair.
The Puerto Princesa Airport on Palawan island, southwest of Manila, and Clark International Airport in Pampanga, north of the capital, are included in the list of gateways which the government wants to modernize and upgrade.
The planned upgrades will "ease our logistic costs, alleviate our traffic congestion and support the target of the Department of Tourism to achieve its 10 million tourists for 2016," Mr. Limcaoco said at the forum.
The Philippines attracted 4.7 million foreign tourists last year, 300,000 short of its goal, state data showed.
President Benigno Aquino wants to make the tourism sector one of the key drivers of the economy. The economy grew 7.2% in 2013, the second fastest in Asia after China.
Rehabilitation of NAIA Terminal 1 will be completed by early 2015 at the latest, while the airport’s Terminal 3 will be fully-operational in July this year, said Mr. Limcaoco.
He also said the Department of Transportation and Communications (DoTC) is sticking with its end-March target to award the P17.52 billion ($391 million) PPP contract for the Mactan-Cebu International Airport Terminal (MCIA).
‘WE WILL NOT BE BULLIED’
The consortium of GMR Infrastructure Ltd. and Megawide Construction Corp. (GMR-Megawide) has made the highest bid, P14.4 billion, for the MCIA project.
Awarding has been delayed two months, however, due to conflict of interest allegations by a rival bidder, the consortium of Filinvest Development Corp. and Singapore’s Changi Airports International (Filinvest-Changi).
There was also a Senate hearing earlier this month on GMR-Megawide’s ability to finance the project, which consortium officials assured in a press conference yesterday.
"The funds are ready. If we’re given the award, we’ll present the check," GMR Deputy Chief Executive Officer Andrew Acquaah Harrison said at the press conference in Cebu yesterday.
Mr. Harrison said "very advanced talks" are being held with three local banks. The Asian Development Bank, International Finance Corp. and Standard Chartered Bank have also issued testimonial letters on GMR-Megawide’s good financial standing, he added.
Manuel Louie B. Ferrer, Megawide chief marketing officer, said BDO Unibank, Inc., which also funds other Megawide projects, heads the consortium of local banks willing to support the airport projects. He added that the same group of local and foreign banks had also financed around 70% of the P14.4-billion upfront payment.
"We believe this [contract] is rightfully ours. We will not be bullied into retreating. We believe we have the financial and technical capability [to undertake the project]," Mr. Ferrer added.
CONFLICTING REPORTS
In a related development, Senator Sergio R. Osmeña III yesterday chided Ms. Canilao for purportedly announcing that the MCIA contract would be awarded to GMR-Megawide.
A newspaper had reported on its Web site on Tuesday that the PPP Center official had said the DoTC was keeping to its target to award the contract to the consortium by the end of March.
"It is highly irregular that Ms. Canilao has taken it upon herself to speak with authority that the DoTC is set to award the project to GMR-Megawide before the end of the month, even prior to the PBAC’s (Prequalification Bids and Awards Committee) submission of its findings and recommendations to the MCIA Board," Mr. Osmeña said in a press release yesterday.
Asked for comment, however, Ms. Canilao denied ever disclosing that the DoTC would do so.
"I don’t know where he [Mr. Osmeña] got the information that I said that. I did not [announce anything]," Ms. Canilao told BusinessWorld in a text message yesterday.
Mr. Osmeña, in turn, cited the said news report.
For his part, DoTC Spokesman Michael Arthur C. Sagcal told BusinessWorld in a separate text message that the department is still evaluating GMR-Megawide’s qualification requirements.
"We’re in the post-qualification stage, specifically financial evaluation." Mr. Sagcal said. -- Reuters with inputs from Marites S. Villamor in Cebu and M.L.V. Angeles in Manila
source: Businessworld
Saturday, March 15, 2014
Megawide, partner confident of getting Cebu airport project
MANILA, Philippines - The tandem of Filipino-owned Megawide Construction Corp. and Bangalore-based GMR Airports is confident of bagging the P17.5 billion contract to expand the Mactan-Cebu International Airport.
In a statement, Louie Ferrer, chief marketing officer of Megawide, said the group is optimistic that it won the bidding conducted by the Department of Transportation and Communications (DOTC) last December for the expansion of the country’s second largest international gateway.
“We participate in PPP projects because we believe in President Aquino’s Daang Matuwid system. We are a young company, idealistic, and we want to build a good brand for Megawide,” Ferrer said.
He pointed out that the tandem of Megawide and GMR Airports would be guided by President Aquino’s vision of integrity and world standards in its infrastructure projects under the public-private partnership (PPP) program.
Ferrer issued the statement after DOTC Undersecretary Jose Perpetuo Lotilla confirmed that the agency’s bids and awards committee would finally issue a notice of award for the project before the end of the month.
The awarding of the project has been delayed due to the allegations made by the Filinvest Group on the conflict of interest committed by the Megawide-GMR Group in violation of the bidding rules.
Ferrer reiterated that the allegations of the Filinvest Group are baseless and far-fetched.
“All companies were pre-qualified based on strict guidelines set by the DOTC’s bid and awards committee. GMR-Megawide followed the process to the letter and passed all financial and operational criteria for the project,” he explained.
He added that the Megawide-GMR Group has already disclosed all relevant information to the DOTC pertaining to possible conflict of interest issues.
Contrary to allegations made during the Senate hearing on Tuesday, GMR Group maintains that it is in a financially healthy position and that the company makes operational and cash profits as it has done for the past six years.
Belying Filinvest’s claims, GMR stressed it is a BBB+ rated investment-grade company and they have never defaulted in any interest or debt payments throughout their history, and have raised more than $10 billion in debt for its various other projects.
“There is no ground for anyone to question GMR’s financial capability and we are confident that this is a non-issue with respect to the results of this bid,” Ferrer said.
The Megawide-GMR Group submitted the highest bid of P14.404 billion for the project last Dec. 12 followed by the Filinvest – CAI Consortium with P13.999 billion, and Premier Airport Group of SM Group of retail magnate Henry Sy with P12.5 billion.
Wednesday, March 5, 2014
Govt eyes probe of ‘Salim empire’
be enough evidence for such investigation to push ahead.
“If our Constitution or any law was violated, of course it is the
government’s duty to investigate and hold the culprits liable. That’s
why if there’s information about that, it should be brought to the
attention of the government,” Coloma said.
The Palace official was reacting to a series of articles written by The Manila Times columnist, former Ambassador Rigoberto Tiglao, detailing how Salim built his business empire in the Philippines, using the influence of businessman Manuel Pangilinan.
“Pangilinan owns only 0.09 percent of Salim’s flagship firm Metro Pacific Investments, and 1.4 percent in the parent company, First Pacific. The Indonesian tycoon’s holding companies own in those firms 56 percent and 45 percent, respectively, with the rest of the shares dispersed to thousands of stock market investors,” Tiglao said in his column.
“For his huge role in building up Salim’s empire, Pangilinan has no share at all in any of the three offshore firms, which at the end of the corporate layering ultimately own the empire,” he added.
The Times column further revealed that “according to Hong Kong-based First Pacific Co. Ltd. in its 2012 annual report, Salim’s holding and ‘command’ firm, profits from its Philippine operations now exceed those in the magnate’s home country, Indonesia, by about $200 million.”
Salim’s firms in the Philippines include the Manila Electric Co., the Philippine Long Distance Telephone Co., telecommunication companies Smart and Sun, and several other utilities and media outfits.
Coloma, meanwhile, said the issues should be made clear first by anyone who would formally accuse the businessmen of breaking the law and the Constitution itself.
“We should know the issue. It is the job of government to implement the law if particular complaints are raised by any group,” he stressed.
It was further alleged that Salim’s lieutenants are the ones pushing for the economic Charter change being espoused by no less than House Speaker Feliciano Belmonte Jr.
Pangilinan is known to have an interest in Belmonte’s Star Group of Companies that publishes, among others, The Philippine Star.
source: Manila Times
The Palace official was reacting to a series of articles written by The Manila Times columnist, former Ambassador Rigoberto Tiglao, detailing how Salim built his business empire in the Philippines, using the influence of businessman Manuel Pangilinan.
“Pangilinan owns only 0.09 percent of Salim’s flagship firm Metro Pacific Investments, and 1.4 percent in the parent company, First Pacific. The Indonesian tycoon’s holding companies own in those firms 56 percent and 45 percent, respectively, with the rest of the shares dispersed to thousands of stock market investors,” Tiglao said in his column.
“For his huge role in building up Salim’s empire, Pangilinan has no share at all in any of the three offshore firms, which at the end of the corporate layering ultimately own the empire,” he added.
The Times column further revealed that “according to Hong Kong-based First Pacific Co. Ltd. in its 2012 annual report, Salim’s holding and ‘command’ firm, profits from its Philippine operations now exceed those in the magnate’s home country, Indonesia, by about $200 million.”
Salim’s firms in the Philippines include the Manila Electric Co., the Philippine Long Distance Telephone Co., telecommunication companies Smart and Sun, and several other utilities and media outfits.
Coloma, meanwhile, said the issues should be made clear first by anyone who would formally accuse the businessmen of breaking the law and the Constitution itself.
“We should know the issue. It is the job of government to implement the law if particular complaints are raised by any group,” he stressed.
It was further alleged that Salim’s lieutenants are the ones pushing for the economic Charter change being espoused by no less than House Speaker Feliciano Belmonte Jr.
Pangilinan is known to have an interest in Belmonte’s Star Group of Companies that publishes, among others, The Philippine Star.
source: Manila Times
The newest media mogul to take control of Star
Fourth of a series on the Salim Empire in the Philippines.
And what—or who—is that emerging Philippine media giant?
It’s Philippine Long Distance Telephone Co., controlled by Indonesian tycoon Anthoni Salim, through its subsidiaries MediaQuest, Inc. and Hastings Holdings.
Hastings Holdings Inc., a wholly owned PLDT subsidiary, is poised to take control this month one of the three largest broadsheets in the country, The Philippine Star.
As in the case of its TV-5 television network, it could be a booster rocket for Philippine Star if PLDT throws its advertising funds to the newspaper.
PLDT is a firm that is 64 percent controlled by foreigners, the Supreme Court itself had ruled in 2012. The biggest bloc of shares there, 27 percent, is held by Salim’s corporate vehicles under his First Pacific Co. holding company based in Hong Kong.
Manuel V. Pangilinan, who is the managing director and CEO of Salim’s Hong Kong-based holding firm First Pacific Co., is chairman of PLDT. He has token shares of of only 0.1 percent of the company. Its president is Napoleon Nazareno, the only other director, though a non-executive one, in First Pacific’s board.
Philippine Star president Miguel Belmonte confirmed to this writer that Hastings Holdings is set to buy “an additional 31 percent of Philippine Star’s shares from the Belmonte family “to bring its stake to 51 percent.”
“The Belmonte family [headed by Speaker Feliciano Belmonte] will remain as minority shareholder with 20 percent,” he said. The next biggest shareholder is the estate of the late publisher and distinguished columnist, and nationalist, Max Soliven.
What the PLDT firm will be controlling is actually the newspaper’s corporate vehicle PhilSTAR Daily, which owns a printing press and three tabloids (Pilipino Star Ngayon, PM: Pangmasa, and Banat News). It also owns the venerable broadsheet Freeman, the first and oldest newspaper in Cebu established in 1919. (Freeman is actually the country’s third oldest newspaper, with Manila Times the oldest, followed by The Manila Bulletin.)
Belmonte explained that the sale to the PLDT firm has been agreed on, and all the documents are being finalized. “But the sale is not a sale, until we’re actually paid,” he said.
How much? “Much more than P2 billion,” Mr. Belmonte said. My sources claimed that the ballpark figure for the purchase is P5 billion.
The purchase will give Salim, through PLDT, full control of two national newspapers, the Philippine Star and business newspaper BusinessWorld. Also through Hastings Holdings, Salim has a minority—18 percent–stake in Star’s rival The Philippine Daily Inquirer..
Salim’s executives have recently moved to take full control of BusinessWorld, appointing their editor in TV5, Roby Alampay, whose career has been mainly in an NGO in Thailand, as the business paper’s editor-in-chief.
Another PDLT firm, MediaQuest, owns two major broadcast media companies. One is the Nation Broadcasting Corp. bought way back in 1998. It has six FM stations in the country’s six major cities and a commercial UHF television station (NBC-41), called AksyonBalita.
The second broadcast media outfit, is ABC Development Corp., which operates television network TV-5, the radio station Radyo5 92.3 News FM, satellite television channels Colours, Hyper and Weather Information Network, and media portals Kristn.com, Balut Radio and News5 Everywhere.
It also owns the news website interaksyon.com, which converts the broadcast entity’s content including its news videos to be accessed in cyberspace. The firm also owns Cignal TV, the “direct-to-home” satellite television service provider.
The Salim-PLDT media complex could become the most powerful one in the country, since it can combine the strengths of television, print (both broadsheet and tabloid), radio, the Internet, mobile telephony (which PLDT through Smart and Sun dominates)—and of course the financial resources of PLDT as well other major firms under the Salim empire.
Media survives not by subscribers, but by advertisements. And what companies are among the biggest advertisers in the country?
PLDT’s mobile phone firms Smart and Sun, which have a combined advertising budget of P5 billion annually. Meralco has P2 billion, which is included in the expenses of the firm on which it bases its electricity charges.
Already, TV-5’s lifeline—which explains its endurance despite its losses allegedly of P5 billion since MediaQuest bought it in 2010—has been getting about P900 million annually of PLDT’s advertising funds of since 2010. PLDT disclosed this in its March 26, 2013 “SEC Form 17-A”:
“In 2010, PLDT and Smart entered into advertising placement agreements with TV5 a subsidiary of MediaQuest Holdings Inc. for the airing and telecast of advertisements and commercials of PLDT and Smart on TV5’s television network for a period of five years. Total prepayment under the advertising placement agreements amounted to Php893 million each as at December 31, 2012 and 2011.”
“The MVP group foresees synergized media operations, wherein the reporting pool of BusinessWorld, PhilStar and TV5 [the PLDT Group’s broadcasting network] will be serving as content providers while Cignal Digital TV will serve as the interactive media platform. Cignal just recently marked a milestone, reaching the 500,000 subscriber mark in just four years of its operation.”
What Mr. Romuladez missed is the immense reach the news content of Salim-PLDT’s news outfits could have through the companies’ mobile phones. Already, TV 5 is claiming in its ads: “Get fresh news daily straight on your mobile. Just text “News on” to 5353.” Smart and Sun operates that service, and they’ll get P1 for each news item it sends.
I doubt though that Salim and Pangilinan are really that interested in the income from such mobile phone based news delivery.
What if on the eve of elections in 2016, news article—even if a fabricated one—in Star or BusinessWorld comes out that Presidential Candidate B has fallen sick? And then this is sent to the 5.5 million subscribers of Smart and Sun?
Why has Salim gone into a crowded industry, whose profits would never be really stellar because of the Philippines’ small market, where the country’s richest tycoons like Henry Sy, John Gokongwei, and Jaime Augusto Ayala don’t dare go into?
Think about it. Now, do you still wonder why most Filipinos, even the elite have never heard of the Indonesian magnate Salim, even if the companies he owns are the ultimate beneficial owners of the biggest public utility firms? (See my article March 3)
Or is it that media, as one publisher said, are a “gun in the holster.” “A politician or a company would hesitate to shoot you, if you have a gun the holster,” he said.
But hold on, how can Salim get into media? Doesn’t the Constitution’s Article 16, Section11, totally ban any foreign participation in media?
If you think that it is so outrageous that a foreigner can control strategic industries in the country, you will be shocked how clever Salim has been—with the help of that renowned Filipino ingenuity in finding loopholes in any restriction—in going around that constitutional ban. That topic on Friday.
What kind of country have we become?
Our constitution is brazenly disregarded by a foreigner by exploiting regulatory loopholes, with the help of the best and brightest Filipinos. An Indonesian magnate is in an industry reserved to Filipinos.
The late Star publisher Max Soliven, one of my idols in our industry, would have undoubtedly remarked, “Sanamagan!”
tiglao.manilatimes@gmail.com
www.trigger.ph or www.rigobertotiglao.com
And what—or who—is that emerging Philippine media giant?
It’s Philippine Long Distance Telephone Co., controlled by Indonesian tycoon Anthoni Salim, through its subsidiaries MediaQuest, Inc. and Hastings Holdings.
Hastings Holdings Inc., a wholly owned PLDT subsidiary, is poised to take control this month one of the three largest broadsheets in the country, The Philippine Star.
As in the case of its TV-5 television network, it could be a booster rocket for Philippine Star if PLDT throws its advertising funds to the newspaper.
PLDT is a firm that is 64 percent controlled by foreigners, the Supreme Court itself had ruled in 2012. The biggest bloc of shares there, 27 percent, is held by Salim’s corporate vehicles under his First Pacific Co. holding company based in Hong Kong.
Manuel V. Pangilinan, who is the managing director and CEO of Salim’s Hong Kong-based holding firm First Pacific Co., is chairman of PLDT. He has token shares of of only 0.1 percent of the company. Its president is Napoleon Nazareno, the only other director, though a non-executive one, in First Pacific’s board.
Philippine Star president Miguel Belmonte confirmed to this writer that Hastings Holdings is set to buy “an additional 31 percent of Philippine Star’s shares from the Belmonte family “to bring its stake to 51 percent.”
“The Belmonte family [headed by Speaker Feliciano Belmonte] will remain as minority shareholder with 20 percent,” he said. The next biggest shareholder is the estate of the late publisher and distinguished columnist, and nationalist, Max Soliven.
What the PLDT firm will be controlling is actually the newspaper’s corporate vehicle PhilSTAR Daily, which owns a printing press and three tabloids (Pilipino Star Ngayon, PM: Pangmasa, and Banat News). It also owns the venerable broadsheet Freeman, the first and oldest newspaper in Cebu established in 1919. (Freeman is actually the country’s third oldest newspaper, with Manila Times the oldest, followed by The Manila Bulletin.)
Belmonte explained that the sale to the PLDT firm has been agreed on, and all the documents are being finalized. “But the sale is not a sale, until we’re actually paid,” he said.
How much? “Much more than P2 billion,” Mr. Belmonte said. My sources claimed that the ballpark figure for the purchase is P5 billion.
The purchase will give Salim, through PLDT, full control of two national newspapers, the Philippine Star and business newspaper BusinessWorld. Also through Hastings Holdings, Salim has a minority—18 percent–stake in Star’s rival The Philippine Daily Inquirer..
Political force
Salim and his top executive Pangilinan, sources say, are on a tack
this year of strengthening and expanding the conglomerate’s media
outfits, in order to be a major force in the 2016 presidential
elections. Last year, MediaQuest amassed a war chest of P8 billion for
this, and made a move, unsuccessful, to take control of GMA-7, the
second biggest television network.Salim’s executives have recently moved to take full control of BusinessWorld, appointing their editor in TV5, Roby Alampay, whose career has been mainly in an NGO in Thailand, as the business paper’s editor-in-chief.
Another PDLT firm, MediaQuest, owns two major broadcast media companies. One is the Nation Broadcasting Corp. bought way back in 1998. It has six FM stations in the country’s six major cities and a commercial UHF television station (NBC-41), called AksyonBalita.
The second broadcast media outfit, is ABC Development Corp., which operates television network TV-5, the radio station Radyo5 92.3 News FM, satellite television channels Colours, Hyper and Weather Information Network, and media portals Kristn.com, Balut Radio and News5 Everywhere.
It also owns the news website interaksyon.com, which converts the broadcast entity’s content including its news videos to be accessed in cyberspace. The firm also owns Cignal TV, the “direct-to-home” satellite television service provider.
The Salim-PLDT media complex could become the most powerful one in the country, since it can combine the strengths of television, print (both broadsheet and tabloid), radio, the Internet, mobile telephony (which PLDT through Smart and Sun dominates)—and of course the financial resources of PLDT as well other major firms under the Salim empire.
Media survives not by subscribers, but by advertisements. And what companies are among the biggest advertisers in the country?
PLDT’s mobile phone firms Smart and Sun, which have a combined advertising budget of P5 billion annually. Meralco has P2 billion, which is included in the expenses of the firm on which it bases its electricity charges.
Already, TV-5’s lifeline—which explains its endurance despite its losses allegedly of P5 billion since MediaQuest bought it in 2010—has been getting about P900 million annually of PLDT’s advertising funds of since 2010. PLDT disclosed this in its March 26, 2013 “SEC Form 17-A”:
“In 2010, PLDT and Smart entered into advertising placement agreements with TV5 a subsidiary of MediaQuest Holdings Inc. for the airing and telecast of advertisements and commercials of PLDT and Smart on TV5’s television network for a period of five years. Total prepayment under the advertising placement agreements amounted to Php893 million each as at December 31, 2012 and 2011.”
Synergized media
In his column last year when news of PLDT’s plans to take control of
Star broke out, Jose Manuel “Babe” Romualdez, a Star columnist and
personal friend of Mr. Pangilinan, wrote:“The MVP group foresees synergized media operations, wherein the reporting pool of BusinessWorld, PhilStar and TV5 [the PLDT Group’s broadcasting network] will be serving as content providers while Cignal Digital TV will serve as the interactive media platform. Cignal just recently marked a milestone, reaching the 500,000 subscriber mark in just four years of its operation.”
What Mr. Romuladez missed is the immense reach the news content of Salim-PLDT’s news outfits could have through the companies’ mobile phones. Already, TV 5 is claiming in its ads: “Get fresh news daily straight on your mobile. Just text “News on” to 5353.” Smart and Sun operates that service, and they’ll get P1 for each news item it sends.
I doubt though that Salim and Pangilinan are really that interested in the income from such mobile phone based news delivery.
What if on the eve of elections in 2016, news article—even if a fabricated one—in Star or BusinessWorld comes out that Presidential Candidate B has fallen sick? And then this is sent to the 5.5 million subscribers of Smart and Sun?
Why has Salim gone into a crowded industry, whose profits would never be really stellar because of the Philippines’ small market, where the country’s richest tycoons like Henry Sy, John Gokongwei, and Jaime Augusto Ayala don’t dare go into?
Think about it. Now, do you still wonder why most Filipinos, even the elite have never heard of the Indonesian magnate Salim, even if the companies he owns are the ultimate beneficial owners of the biggest public utility firms? (See my article March 3)
Or is it that media, as one publisher said, are a “gun in the holster.” “A politician or a company would hesitate to shoot you, if you have a gun the holster,” he said.
But hold on, how can Salim get into media? Doesn’t the Constitution’s Article 16, Section11, totally ban any foreign participation in media?
If you think that it is so outrageous that a foreigner can control strategic industries in the country, you will be shocked how clever Salim has been—with the help of that renowned Filipino ingenuity in finding loopholes in any restriction—in going around that constitutional ban. That topic on Friday.
What kind of country have we become?
Our constitution is brazenly disregarded by a foreigner by exploiting regulatory loopholes, with the help of the best and brightest Filipinos. An Indonesian magnate is in an industry reserved to Filipinos.
The late Star publisher Max Soliven, one of my idols in our industry, would have undoubtedly remarked, “Sanamagan!”
tiglao.manilatimes@gmail.com
www.trigger.ph or www.rigobertotiglao.com
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