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Wednesday, April 15, 2015

Liberty posts P897.14-M loss

What Went Before: Serious illegal detention charge vs Napoles

Manny Pacquiao and Floyd Mayweather Jr. FILE PHOTO

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Floyd Mayweather Jr. of the US reacts accusing Marcos Maidana of Argentina on September 13, 2014 at The MGM Grand, Las Vegas. Mayweather dominated with a 12 round unanimous decision over Maidana retaining his WBA Welterweight Belt and WBC Welterweight and Super Welterweight World Titles. (Photo John Gurzinski / AFP)

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In this Nov. 27, 2009 file photo, a girl plays the Beatles Rock Band video game at Best Buy on Black Friday, in South Portland, Maine. After a five year absence, "Guitar Hero" and "Rock Band" are planning a reunion tour in 2015 on the current generation of video game consoles. AP

After 5-year absence, 'Guitar Hero,' 'Rock Band' to return

MANILA, Philippines–Liberty Telecoms Holdings Inc., a listed provider of high-speed Internet services backed by San Miguel Corp. and Qatar Telecom, closed another year in the red while signaling—for the first time—that mounting losses are casting doubts on its business viability.

Liberty said in its 2014 annual report that net losses for the year amounted to P897.14 million against a net loss of P1.45 billion in 2013, while revenues from its core 4G broadband service launched five years ago also declined.

Liberty also said in the annual report that its deficit ballooned to P9.8 billion in 2014 compared with P8.91 billion a year before.

“These conditions indicate the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern,” Liberty said.

For now, its shareholders said they were “committed” to supporting the company in providing 4G Internet services, the company’s report showed.

“The group’s major shareholders, however, fully understand that these losses are expected,” it said.

Liberty’s internal assessment comes as domestic telecommunication giants like Philippine Long Distance Telephone Co. and Globe Telecom ramp up investments in the mobile Internet business.

Liberty, which is 49.76 percent held by SMC subsidiary Vega Telecom and 32.9 percent-owned by Qtel West Bay Holdings, is due to exit corporate rehabilitation in December 2016, the filing showed. Miguel R. Camus

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MPIC hikes Meralco stake

MANILA, Philippines–Manuel V. Pangilinan-led Metro Pacific Investments Corp. (MPIC) has increased its direct exposure in the power distribution sector after buying shares of Manila Electric Co. (Meralco), the country’s largest electricity retailer, from an affiliate at a 10.9-percent discount.

MPIC, which also operates tollroads, a water utility firm in Metro Manila and the country’s biggest chain of private hospitals, said in a stock exchange filing Wednesday that it had agreed to acquire 112.71 million shares of Meralco, equivalent to a 10-percent stake, for about P235 a share, or a total of P26.5 billion.

The deal will increase MPIC’s direct stake in Meralco to 15 percent and will be mainly funded by P25 billion in “new” 10-year bilateral term-loan facilities, it said.

The acquired shares were held by a special purpose company called Beacon Electric Asset Holdings Inc., jointly owned by MPIC and PLDT Communications and Energy Ventures, a unit of Philippine Long Distance Telephone Co., also chaired by Pangilinan.

That acquisition price, which MPIC said complied with its internal corporate governance code, was at a 10.9-percent discount to Meralco’s closing price before the deal was announced.

Payments to Beacon Electric will be made on a staggered basis: P1 billion immediately, P17 billion by June this year and the balance by July 2016, it said.

“We have previously indicated MPIC’s intention to deleverage Beacon and have concluded the optimum way to achieve this is to acquire more of Meralco from Beacon,” MPIC CEO Jose Ma. Lim said in the filing.

“The deepening of our investment in Meralco is reflective of our expectation of growth in this business, especially from much-needed power generation in Luzon,” he added.

The combined stake of PLDT and MPIC in Meralco stood at about 49.96 percent, the filing showed.

For Metro Pacific alone, its direct and indirect stake in Meralco, which includes its ownership in Beacon, would be at 32.48 percent while PLDT Communications and Energy’s stake will fall to 17.48 percent.

The electricity distributor’s other major shareholders include the Gokongwei family’s JG Summit Holdings Inc. and the Lopez clan’s First Philippine Holdings Corp.

Beacon Electric was established to serve as the holding company for both MPIC and PLDT’s Meralco shares, but recent moves by the former suggest the Pangilinan-led group was gradually changing course.

Nevertheless, Lim said in the statement that MPIC, for now, “retains its partnership with [ PLDT Communications] for the rest of our investment in Meralco.”

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Asia seen to continue leading global growth

MANILA, Philippines–Emerging markets like the Philippines are urged to focus on pursuing further reforms that address infrastructure gaps and ensure financial stability as preparation for continued instability in global economic conditions.

In its latest World Economic Outlook, the International Monetary Fund said the Asia-Pacific region would continue to lead the world’s growth this year, although China’s slowing expansion might spill over to other markets.

“Asia’s growth is forecast to hold steady in 2015, and the region is expected to continue outperforming the rest of the world over the medium term,” the IMF said in the WEO report released this week.

The multilateral lender said the region would benefit from lower world oil prices, strengthening external demand, and still-accommodative financial conditions despite some recent tightening.

The region’s economies, including the Philippines, still face risks despite the relatively rosy outlook. Elevated household and corporate debt amid higher real interest rates and a strong US dollar could amplify shocks, the IMF said.

“Policymakers should maintain prudent frameworks and build buffers to enhance resilience, and implement reforms to support demand rebalancing and relieve bottlenecks to growth,” the IMF said.

Growth decelerated last year to 5.6 percent, from 5.9 percent in 2013. While growth picked up across much of the region, slowdowns in several large economies, including China, Indonesia and Japan, provided a counterweight.

In 2015, the sharp fall in world commodity prices will support GDP growth across the region.

With the region being a net oil importer, the drop in oil prices will generate a windfall spur to purchasing power of about 1.7 percent of regional gross domestic product (GDP) in 2015, providing support to domestic spending and raising current accounts.

The Philippines is projected to grow by 6.7 percent this year, the IMF said earlier this month. This was slightly better than the IMF’s previous forecast of a growth of 6.6 percent.

As a whole, the Association of Southeast Asian Nations’ (Asean) five major emerging economies, namely Indonesia, Malaysia, the Philippines, Thailand and Vietnam will grow by 6 percent this year, IMF projections show.

The IMF said Asian emerging markets with large infrastructure gaps should consider giving public investment spending priority over easing monetary policy.

It added that strong regulation and supervision, protecting financial stability may also require proactive use of macroprudential policies to tame the effects of the financial cycle on asset prices, credit and aggregate demand.

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Claim of command

Last Tuesday, our leader Benigno Simeon (aka BS) banged the bell at the Philippine Stock Exchange, signaling the start of action on the trading floor.

What was the big deal? It seemed that, since the PSE index hit the 8,000-point level recently, it should be time for a little celebration—care of Malacañang.

The index, a grouping of selected stocks, is an important tool in the securities market to indicate the trends, going toward either investment heaven or financial Ebola.

In his awe-inspiring bell ringing feat at the PSE, our dear leader, BS, noted that in the past five years during his watch, the PSE index has doubled.

Yesterday, or just a day after his bell ringing at the PSE, the index began to show a marked downturn.

I could not be certain if the downturn could just be a plain coincidence or an indication of the trust and confidence of investors in our dear leader, BS, and the boast of his boys about his economic management prowess.

As of lunchtime yesterday, the index already dropped by 129 points, staying below the 8,000-mark.

Again—that index level was the perfect reason for our dear leader, BS, to once again ring the PSE bell, this time to celebrate his leadership and his “Daang Matuwid” slogan.

His popularity ratings seemed going down somewhere there in the vicinity of purgatory.

To think, the “selling” trend at the PSE yesterday chopped off a relatively huge chunk of the PSE index, even as our dear leader, BS, could be the only head of state in the entire universe to use a stock market crystal ball.

In his speech, he reportedly made a forecast on where the stock market should be heading—a PSE index of between 9,000 and 10,000 points by the end of his term next year.

No finance or economic official in his right mind would dare to give even just a little sign language to indicate the vaguest of hints on the possible direction of the stock market.

The reason: such statements could be taken by the public as an official encouragement for everybody to buy stocks.

In this world where market analysis could be regarded as the closest practical application of fortune telling in the real world, nobody would ever dare to forecast the stock market with much certainty. Really, there would always be a caveat!

Even professional market analysts and traders could only talk about “factors” that might affect the market, careful to cite both the rewards and the risks.

As people in the financial sector loved to say, predicting the stock market would always be a task just for a fool or a retardate.

From what I gathered, the celebration at the PSE last Tuesday was actually “suggested” by the Palace bright boys to the PSE chain of command.

Aside from the ringing of the ceremonial bell, he just had to deliver the obligatory speech to trumpet his economic management record and corruption busting illusion.

It was just that our contacts in the financial sector had a bit of reservation regarding our dear leader, BS, and his direct hand in creating active trading in the market.

The comprehensive capital market reform program had its conception during the time of former President Corazon Aquino, which the administration of former President Fidel Ramos implemented relentlessly.

During the time of former President Gloria Macapagal-Arroyo, her cute administration egged the PSE to acquire the latest trading technology from the New York Stock Exchange, and she personally accompanied the PSE officials to seal the deal with NYSE.

And, of course, former President Joseph Estrada gave us the BW price manipulation scandal.

Our contacts wonder whether there is something concrete that our leader, BS, really did for the stock market, except to claim that “confidence” built up in the market under his command.

The last time he rang the PSE bell, which was in 2012, only PSE officials were present plus a handful of Cabinet members such as Finance Secretary Cesar Purisima.

Last Tuesday, he had a high-powered audience. From what I gathered, the PSE called on the biggest of the big names in business to attend the event.

Among them were Teresita Sy-Coson (SM group), Lance Gokongwei (JG Summit), Jaime Augusto Zobel de Ayala (Ayala group), Jonathan T. Gotianun (Filinvest), and Ramon Ang (San Miguel group).

Bank presidents Cezar Consing (BPI) and Lorenzo Tan (RCBC) were also present, and the right hand man of MVP, Jose Lim (Metro Pacific).

Also there were Antonieta Ibe and Teresita Herbosa (SEC), Finance Secretary Cesar Purisima, Trade Secretary Gregory Domingo and GSIS president Robert Vergara.

It never happened before, a group of powerful individuals just sitting idly by while somebody talked about his perceived achievements.

In the stock market, some analysts were already sending warnings of possible correction—meaning the index would drop—even before our leader, BS, talked about the index hitting the 9,000 to 10,000 during his term.

At a current PE ratio of 25 times of Philippine stocks in general, some analysts view the market as overpriced, because the accepted standard worldwide has always been that the PE ratio of 20 times would be a pricey market.

In the local stock market, you could see a PE ratio of 67 times for a well known property company, not to mention a PE ratio of 360 times for some speculative stocks.

Yet our dear leader, BS, could talk about the index hitting 10,000 points next year.

Perhaps the SEC or the PSE could investigate him for market manipulation? You wish!

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EDC bags perks for Burgos wind project

What Went Before: Serious illegal detention charge vs Napoles

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PNP: Only legal wife, children of each slain SAF men entitled to benefits

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Mayweather: Fans will have to decide if fight worth $99.95

After 5-year absence, 'Guitar Hero,' 'Rock Band' to return

MANILA, Philippines–A subsidiary of Energy Development Corp. is all set to get incentives for its 150-megawatt Burgos wind renewable energy project in Ilocos Norte.

Citing a certificate from the Energy Regulatory Commission (ERC), EDC said its unit, EDC Burgos Wind Power Corp., was entitled to the Feed-in-Tariff (FIT) rate of P8.53 a kilowatt-hour (kWh) for its wind project.

EDC Burgos Wind Power Corp. is a wholly owned subsidiary of EDC.

Subject to adjustments as may be approved by the ERC, the project is entitled to the FIT rate for the power produced from Nov. 11, 2014, to Nov. 10, 2034, EDC said.

Distribution utilities all over the country, including the Manila Electric Co. (Meralco) that operates in Metro Manila and nearby areas, are starting to collect FIT allowance from customers as a fixed charge reflected on monthly bills.

Such fees are pooled and will be used to pay guaranteed rates (a form of incentive) to renewable energy developers to encourage similar investments.

The project is EDC’s first foray into the wind energy business and is its single largest investment to date.

A total of $450 million was invested by EDC in the Burgos wind project, including the $315 million in project financing with leading international and local banks led by EKF, Denmark’s export credit agency.

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Remittances seen to give up steam in ’15

AFP FILE PHOTO

MANILA, Philippines–Cash transfers from migrants may be constrained this year as parts of the world where many overseas Filipino workers (OFW) reside face economic headwinds.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said remittance growth in February recovered. The preceding month, growth in money sent home by OFWs grew by just 0.5 percent.

The central bank said efforts by banks to expand their overseas reach through new offices or partnerships with other institutions also continued to make it easier for overseas workers to send home money.

“The steady deployment of OFWs remained the key driver in the sustained inflows of remittances,” the BSP said Wednesday.

In February, remittances rose by 4.2 percent to $1.88 billion. For the first two months of the year, remittances were up by 2.4 percent.

Main sources of money were the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Hong Kong and Canada. Citing data from the Philippine Overseas Employment Agency (POEA), the BSP said that, from January to February, job orders for Filipinos reached 164,525.

Apart from being the country’s major source of foreign exchange income, remittances from overseas Filipino workers accounted for at least 8.5 percent of domestic output in 2014. Officials expect remittances to grow by 5 percent this year.

In a note to clients this week, Standard Chartered bank doubted whether the strength of remittances would hold up in the coming months, given the weaknesses in parts of the world.

“Remittances from Asia have contracted for three consecutive months, reflecting consolidating growth momentum in the region,” the bank said.

Growth in remittances from Europe declined for eight consecutive months, it said, adding that transfers from the Middle East could also ease if low oil prices were to impact employment prospects and wage growth for overseas workers.

A significant portion of the Philippines’ eight to ten million migrants work in the Middle East, a region that relies heavily on revenues from oil.

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Toyota building plants in Mexico, China; seeks growth again

In this March 15, 2013 file photo, Indonesian workers assemble passenger cars at the new Toyota plant in Karawang, West Java, Indonesia after Toyota officially opened their second manufacturing plant in the country. AP

TOKYO— Toyota plans to build new auto assembly plants in Mexico and China, ending a self-imposed 3-year break from expansion due to quality concerns due to massive recalls.

Toyota Motor Corp. announced Wednesday it will invest $1 billion in the plant in Guanajuato, Mexico, creating 2,000 jobs to make the Corolla compact car, the company’s second-biggest seller in the U.S.

Production is to start in 2019, with annual output estimated at 200,000 vehicles. That will consolidate Corolla production for North America in that plant and Toyota’s plant in Blue Springs, Mississippi.

Toyota will stop producing Corollas at its plant in Ontario, Canada, which will instead focus on more expensive mid-size vehicles. Toyota did not give specifics. The plant now produces Lexus models, the RAV4 sport-utility vehicle and the Matrix hatchback, in addition to the Corolla.

Separately, Toyota is adding a third assembly line next to its plant in Guangzhou, China, investing 52.5 billion yen ($440 million). The line is to be completed by 2017, for a model it declined to disclose.

Annual production capacity will go up by 100,000 vehicles. The new line won’t create new jobs because the existing two lines will become more efficient, reducing the number of workers needed, according to Toyota.

A Toyota executive, briefing reporters in Tokyo over a video connection from Nagoya in central Japan, said Mexico and China were chosen because they are two markets where auto demand is expected to rise in coming years.

Toyota has been working on a strategy for growth called Toyota New Global Architecture, or TNGA, based on a more widespread sharing among models of platforms, or the basic parts on which cars are built, as well as other components.

The “architecture” is based on a leaner, smarter approach to production, to become as competitive and as fail-proof as possible in quality. The first cars under the system are to roll out later this year.

Acknowledging the company had grown too fast, Toyota President Akio Toyoda put on hold for the past three years any plans for new plants after the recall fiasco which began in 2009.

More than 10 million Toyota vehicles were recalled around the world for faulty brakes, sticky gas pedals, ill-fitting floor mats and a range of other defects.

Toyota is still embroiled, along with other automakers, in a recall involving air bags made by Takata Corp. of Japan which can deploy and rupture with enough force to cause injury or death.

It has been eager to put the recall woes behind it, but Toyoda has repeatedly stressed future growth must be “sustainable” and ensure quality.

“An increase in production does not mean an undisciplined pursuit of more,” he said in a statement Wednesday.

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usd and usd

Wednesday, April 15, 2015

Liberty posts P897.14-M loss

Get Inquirer updates while on the go, add us on these apps:

Related Stories:

MPIC hikes Meralco stake

Asia seen to continue leading global growth

Claim of command

EDC bags perks for Burgos wind project

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Remittances seen to give up steam in ’15

Toyota building plants in Mexico, China; seeks growth again

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