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Wednesday, May 29, 2013

Cebu Pacific cancels launch of Cebu-Taiwan flights amid row

5:52 am | Thursday, May 30th, 2013

Cebu Pacific said Wednesday, May 29, 2013, it had canceled the planned launch of a new Taiwan route because of tensions over a Taiwanese fishermen being killed by the Filipino coastguard. AFP FILE PHOTO

MANILA, Philippines—One of the Philippines’ biggest airlines said Wednesday it had canceled the planned launch of a new Taiwan route because of tensions over a Taiwanese fishermen being killed by the Filipino coastguard.

Cebu Pacific had been scheduled to begin flights between Cebu, the Philippines’ second-biggest city, and Taiwan’s capital, Taipei, in July but this week indefinitely suspended the route, an airline spokeswoman told AFP.

“It would be a bit difficult to start it with the current tension… some passengers (had) already requested refunds or travel changes,” spokeswoman Candice Iyog told AFP.

However, she said an existing route between Manila and Taipei would be kept.

Coastguard officers shot dead a 65-year-old Taiwanese man on May 9 who they said was aboard a boat fishing illegally in Philippine waters.

Taiwan’s government, which said the incident took place in its exclusive economic zone, reacted with fury, issuing a “red alert” against traveling to the Philippines and imposing economic sanctions.

The zones claimed by the two sides overlap in some areas.

It rejected repeated apologies from the Philippine government, and demanded that criminal charges be brought against those responsible for the killing.

Philippine tourism department spokesman Benito Bengzon said the travel alert had started to have an impact, and a strategy was being put into place to try and make up for the fall from Taiwan by attracting tourists from other markets.

Budget carrier Zest Airlines said last week it had canceled flights between Taiwan and Kalibo, a gateway to the popular beach resort of Boracay.

Taiwan has also frozen the hiring of overseas Filipino workers, and an invitation for the Philippine national basketball team to play in a regional tournament in Taipei was rescinded.

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Short URL: http://business.inquirer.net/?p=124449

Tags: Airline , Cebu Pacific , Diplomacy , Philippines , Taiwan , Tourism

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PH jumps 5 notches in competitiveness ranking

Philippine Daily Inquirer

4:34 am | Thursday, May 30th, 2013

CRANES OVER MAKATI CITY With an economy growing at a robust pace and an efficient workforce to boast of, the Philippines jumped by five notches in this year’s World Competitiveness Ranking. EDWIN BACASMAS file photo

MANILA, Philippines—With an economy growing at a robust pace and an efficient workforce to boast of, the Philippines jumped by five notches in this year’s World Competitiveness Ranking.

From 43rd last year, the Philippines landed 38th in this year’s global survey on competitiveness conducted by international business school IMD. There are 60 countries covered by the annual survey.

A country’s ranking results from queries to respondents, mostly from the business sector, focused on four main categories: economic performance, government efficiency, business efficiency and infrastructure.

In the area of economic performance, the Philippines improved its ranking by 11 notches from 42nd last year to 31st this year.

This came about following its encouraging growth performance last year, when its economy grew by 6.6 percent, surpassing the government’s target of 5 percent to 6 percent.

In this year’s survey, the United States gained the top spot, while Switzerland landed second.

Other countries in the Top 10 are: Hong Kong, Sweden, Singapore, Norway, Canada, United Arab Emirates, Germany and Qatar, which landed on the 3rd to the 10th spots, respectively.

The countries at the Bottom 10 are: Brazil, Slovenia, South Africa, Greece, Romania, Jordan, Bulgaria, Croatia, Argentina. They landed on the 51st to the 60th spots, respectively.—Michelle V. Remo

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Short URL: http://business.inquirer.net/?p=124443

Tags: Competitiveness , economy , Philippines , World Competitiveness Ranking

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Bank deposits paying less

3:57 am | Thursday, May 30th, 2013

Savers in the country continued to earn a miniscule amount from keeping their money in banks, with the average annual interest rate on savings accounts averaging only 1.04 percent in March.

MANILA, Philippines—Savers in the country continued to earn a miniscule amount from keeping their money in banks, with the average annual interest rate on savings accounts averaging only 1.04 percent in March.

This marked a decline from the already modest 1.44 percent recorded in the same month last year, data from the Bangko Sentral ng Pilipinas showed.

Nonetheless, the latest figure represented an increase from the all-time low of 0.97 percent recorded in February this year.

Furthermore, interest earnings from bank deposits are charged a 20-percent creditable withholding tax, which even reduces the net yield even more.

The low-interest rate environment in the country is being influenced by the existing monetary policy of the Bangko Sentral ng Pilipinas, which said this policy has its advantages.

BSP said low interest rates, which mean bank loans are cheaper, help encourage people and businesses to borrow to fund consumption and investment activities.

Last year, the BSP cut its key policy rates—which influence commercial interest rates—four times by a total of 100 basis points.

A cut in the central bank’s key policy rates affects not only the interest rates on savings accounts, but also the interest rates that banks charge on loans.

The BSP said bank lending in the country has been growing robustly, thanks to higher demand for borrowings brought about partly by low interest rates.

It reported earlier that outstanding loans from universal and commercial banks in the country reached P3.22 trillion as of the end of March, up by 14.2 percent from P2.82 trillion as of the same period last year.

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Short URL: http://business.inquirer.net/?p=124437

Tags: bank deposits , Banking , Interest Rates , savings deposits

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PSEi back above 7,200

Philippine Daily Inquirer

2:31 am | Thursday, May 30th, 2013

The local stock barometer rallied back to the 7,200 mark on Wednesday, riding on buoyant Wall Street sentiment arising from upbeat US consumer confidence and housing data.

The main-share Philippine Stock Exchange index jumped 115.35 points, or 1.62 percent, to close at 7,228.57, rising for the second straight session. A string of favorable US economic data encouraged investors to reenter the market after a recent bout of profit-taking.

All counters ended in positive territory but the day’s upswing benefited the mining/oil counter (+4.86 percent) the most. The new revenue-sharing scheme governing the sector is expected to be submitted to the newly elected Congress in July.

Value turnover amounted to P9.64 billion. There were 114 advancers that overwhelmed 49 decliners while 40 stocks were unchanged.

The day’s biggest gainers among index stocks were Jollibee (+9.42 percent), Globe (+6.08 percent) and AEV (+5.02 percent).

Benefiting from election spending, Jollibee’s first-quarter core income of P895 million (+33 percent year on year) was much higher than market expectations. Globe announced on Tuesday a network sharing deal with ABS-CBN while AEV disclosed Wednesday a partnership with a major construction firm for a bulk water supply project in Davao City.—Doris C. Dumlao

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Short URL: http://business.inquirer.net/?p=124429

Tags: Finance , Philippines , Stock Activity , stocks

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Rockwell Land to enter ‘affordable’ property sector

New subsidiary to launch first project in June

By Doris C. Dumlao

Philippine Daily Inquirer

2:29 am | Thursday, May 30th, 2013

Upscale property developer Rockwell Land Corp. is considering to raise funds from a follow-on equity offering alongside plans to break into the affordable residential property development and diversify to new areas outside Metro Manila.

In a briefing after the company’s stockholders’ meeting on Wednesday, Rockwell president Nestor Padilla said he expected a sustained increase in profitability this year, setting a bottomline guidance of P1.4 billion to P1.5 billion against a net profit of P1.1 billion in 2012. Sales growth is projected at 25-30 percent this year.

Padilla said that since the company listed by way of introduction last year, it had been invited—and convinced—by investment bankers to conduct overseas road shows such as in Hong Kong, Singapore and Thailand.

“I think at the right time, we will be doing a follow-on offering. At this time, we’re happy with what we have now,” Padilla said. Asked whether a follow-on offering (also known as a re-IPO [initial public offering]) could take place this year, Padilla said it was a possibility. “What will dictate it is when we have a clear use of proceeds,” he said.

For 2013, Rockwell has budgeted P12 billion for capital spending. However, it has a number of big-ticket projects in the pipeline for the next few years, including the P26-billion five-tower Proscenium.

This year, Rockwell will draw up plans to broaden its market share and offer more affordable products through a new subsidiary, Primaries Development Corp. Padilla told Rockwell stockholders that Primaries would launch by June this year its first project—a mid-rise residential project in New Manila called 53 Benitez.

For 53 Benitez, Primaries has master-planned a mid-rise medium-density project with two towers and 364 units for both towers. These will offer two- to three-bedroom units designed for starter homes.

Selling price for 53 Benitez will start at P86,000 to P90,000/sqm, which suggests that the units will be priced at between P5.1 million and P8.55 million.

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Short URL: http://business.inquirer.net/?p=124425

Tags: follow-on offering , fund raising , property , re-IPO , Real Estate , Rockwell Land

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Vulcan’s transformation into retail play seen in Q1 ’14

By Miguel R. Camus

Philippine Daily Inquirer

2:28 am | Thursday, May 30th, 2013

National Book Store, the country’s largest books and office supplies chain, is set to complete its backdoor listing via Vulcan Industrial & Mining Corp., by the first quarter of 2014, which will pave the way for Vulcan’s transition from a minerals explorer into a “pure” retail play.

Adrian Ramos, director and treasurer at Vulcan, told reporters that auditor SGV and Co. was helping in structuring the deal with National Book Store and other financial advisers. Vulcan and National Book Store are both owned by the Ramos family.

Vulcan, which has been unsuccessful in getting its various mining projects off the ground, partly due to regulatory issues facing the sector, obtained the approval of shareholders on Wednesday to allow the entry into the company of the National Book Store Group, the increase in its capital from P600 million to P4 billion and the change in its primary focus to retail.

Shareholders also approved the spin-off and possible sale of Vulcan’s mining assets.

“The main reason we really want to divest of the mining assets is that people want a clean retail story,” Ramos told reporters at the sidelines of the company’s meeting on Wednesday.

What will emerge will be the only book store chain to be listed on the Philippine Stock Exchange.

The Ramos family is betting that continued economic growth will likewise boost the business of National Book Store, which has more than 160 stores nationwide. It ended 2012 with sales of about P10 billion, up 5 percent year on year, Ramos said.

“There is huge potential for us to be able to grow this business in accordance with the growth of the country,” Ramos said, estimating that sales of National Book Store may grow by about 10 percent this year.

The company derives about 60 percent of its sales from office and school supplies, with the remainder coming from books. The latter segment, however, is being threatened in other parts of the globe as consumers turn to digital products like e-books.

Ramos said National Book Store was preparing its own “digitization” strategy although he declined to give specific details.

“We believe that in the near future there will still be a need for the traditional form of books. However, we continue to explore our own entry into digitization as may be required by the business,” he said.

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Short URL: http://business.inquirer.net/?p=124421

Tags: backdoor listing , Mining and quarrying , Philippine Stock Exchange , Philippines , Ramos family , Retail , Vulcan Industrial & Mining Corp.

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Lafarge Republic investing in new cement mill

By Doris C. Dumlao

Philippine Daily Inquirer

2:27 am | Thursday, May 30th, 2013

Cement maker Lafarge Republic Inc. (LRI) is putting up a new cement mill at its plant in Teresa, Rizal. The new mill, which will have a capacity to produce 850,000 metric tons of cement, is expected to start commercial operations in 2015.

LRI president Renato Sunico, in a recent report to stockholders, said the company’s board had approved the investment in a new mill at its plant in Barangay (village) Dulumbayan, Teresa, Rizal. However, the amount of investment was not disclosed.

In the meantime, Sunico said various productivity improvement projects were expected to start delivering additional capacity this year to meet the rising demand for the commodity in the country.

The aim is to increase its capacity by one million metric tons starting this year, which will be achieved by beefing up capacity utilization of existing mills and the reopening of its Danao facility.

The company has started operating its new feeding systems for refuse-derived fuel (RDF) in its Bulacan, Norzagaray and Teresa plants.

RDF is produced by separating the combustible components of municipal solid waste, which is then processed into shredded and plastic-wrapped bales that can be used as alternative fuel for its manufacturing plants.

This year, LRI is targeting to supply an additional 200,000 metric tons of cement per year in Luzon, 650,000 metric tons in the Visayas and another 100,000 metric tons in Mindanao.

The company was reported to have production capacity of 7.7 million metric tons as of early 2011.

An affiliate firm of international building materials leader Lafarge, LRI posted a net profit of P1 billion in the first quarter, up by 35 percent year on year. This was on the back of P6 billion sales in the first three months.

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Short URL: http://business.inquirer.net/?p=124417

Tags: Business , Cement , Investment , Lafarge Republic Inc. , new cement mill

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