Biz Buzz: The inside track
Nestor Espenilla Jr. of the Bangko Sentral ng Pilipinas will see his title officially change today from “Deputy Governor” to “Governor” during this morning’s ceremonies to mark the anniversary of the central bank.
As has been done traditionally, the changing of the guard for the country’s monetary authority has always been held during the anniversary of the BSP.
Of course, everyone in the banking community is waiting to see what kind of governor Espenilla will be, with not a few bankers expecting the regulator to clamp down on activities perceived to be risky.
That won’t be a surprise because Espenilla made his mark all these years as the BSP’s proverbial “bad cop”—the one in charge of keeping financial institutions in line—and punishing errant ones—as part of his role heading the central bank’s Supervision and Examination Sector or “SES”.
It remains to be seen how he’ll handle the broader role of managing the economy through monetary policy (basically, the use of interest rates to move inflation and economic growth up or down), and bankers and economists are wondering whether Espenilla will be a “hawk” or a “dove.”
A hawk, of course, is one who prefers higher interest rates to kill off inflation preemptively and this is great for banks and their treasury departments which make a living off high yields on their bonds and fixed-income investments.
A dove, meanwhile, is a regulator who has a bias for low interest rates in order to keep the economy humming along nicely. This is good for loan officers who will be able to entice more borrowers with lower borrowing costs.
And while many in the financial community wonder which philosophy is favored by “Nesting” (as he is known to friends), there is one who probably already knows.
In fact, one banker has known the new BSP governor almost all his life and only tipped his hand very recently.
We’re talking about the president and CEO of United Coconut Planters Bank, Higinio “Joey” Macadaeg Jr.
Executives got the surprise of their lives recently when Macadaeg was selected to introduce Espenilla during the despedida dinner of the Bankers Association of the Philippines (BAP) for outgoing Governor Amando Tetangco Jr., and his speech was quite revealing.
In it, the UCPB chief revealed that he had known Espenilla since their days at the Ateneo High School, although the former emphasized his deference to the latter by pointing out that the incoming governor was a member of the school’s honors class (section A), while he was on the semi-honors class (section B) of Batch 1977. (Another famous batchmate, President Aquino, belonged to Section C.)
He also revealed that Espenilla was a member of Ateneo’s famous high school theater group Dulaang Sibol under the equally famous teacher Onofre Pagsanghan.
And another revelation? Macadaeg knew the names of all of Espenilla’s children and mentioned in his introduction that the BSP governor had four dogs.
Said one banker who attended the event: “If you know how many dogs the person has, you must be REALLY close.”
So, bankers, now you know. —DAXIM L. LUCAS
Treasury musical chairs
After a long hiatus from the banking industry, treasury veteran Raffy Algarra has rejoined the sector where he has made his mark (and presumably, his riches).
Biz Buzz learned that the banker—who left Security Bank in 2015 at the height of the financial institution’s leadership shakeup—has joined East West Banking Corp. as treasurer of the Gotianun family-owned bank.
It will be a reunion of sorts at EastWest Bank where Algarra will rejoin his former boss at Security Bank’s treasury unit, Jesus Roberto Reyes (everyone calls him “Bobby” though) who was named president and CEO of EastWest last May.
And what of EastWest’s chief operating officer Jose “Toto” Hilado, who was rumored to have quit as soon as the shakeup at the bank was announced last March? At that time, everyone in EastWest took great pains to point out that Hilado (who was, at one point, considered to be the next in line for the presidency of the bank) had only gone on leave.
Well, Biz Buzz heard that Hilado will go to Union Bank of the Philippines to be its treasury head and chief financial officer—basically swapping places with Reyes, who left Unionbank for EastWest a few months ago. —DAXIM L. LUCAS
Are you confused yet?
Meanwhile, there’s no word on Algarra’s supposed stake in Philippine Commercial Capital Inc., (PCCI) the investment house that is being revitalized by the owners of the 8990 Holdings mass housing group.
He was supposed to join that venture, but if that plan pushed through, he may have to divest from PCCI to prevent a conflict of interest situation with his new job.
When the dust settles, EastWest will have a leadership team with a heavy background in treasury and trading operations, namely Reyes, Algarra and the bank’s vice chair, Antonio Moncupa.
Expect these three treasury big hitters to make the bank even more active in the treasury and trading scene. As for Hilado, he gets a better deal, basically gaining his own playground after waiting for the top seat at EastWest to be vacated (as had been promised to him when he was poached from RCBC some years back).
So will there be more changes in the ongoing game of musical chairs in the banking system? Count on it. —DAXIM L. LUCAS
Mactan Waterpark
After signing a deal with Thai hospitality group Dusit to open a resort-hotel in Mactan, Cebu by 2019, Gokongwei-led Robinsons Land Corp. still has some 3.5 hectares left to develop in its waterfront AmiSa complex. The property developer has three residential condominium towers in this complex.
As such, RLC is studying the possibility of building a water park next to the upcoming Dusit Thani Resort Mactan. If this project pushes through, this will mark RLC’s debut into theme park business. It won’t be the size of Enchanted Kingdom but one that harnesses the natural beauty of its beachfront setting. It will have themed pools and slides, catering mostly to kids.
RLC can allot around two hectares for the theme park, RLC president Frederick Go told Biz Buzz. “It’s still under discussions,” he said.
The idea came about when a Korean hotel group approached RLC for a potential joint venture on a water park in that area. This didn’t pan out because the Korean group had a change in management that was apparently no longer keen on the project. But as RLC liked the idea, it’s now considering to pursue this development on its own. —DORIS DUMLAO-ABADILLA
Back to Pinoy hands
Architectural glass manufacturer AGC Flat Glass Philippines Inc. is going back to Filipino hands as Japanese global glass manufacturing company AGC Asahi Glass has decided to sell its 100 percent to TQMP Glass Manufacturing Corp. (TQMP), which is led by businessman Paul Vincent Go by the end of December 2017. The sale is subject to approval by the Philippine Competition Commission.
For many years, ACG Flat Glass played an important role as a part of AGC Group’s global strategy in the architectural glass sector. However, intensified competition in the Philippines in the past few years led to a persistent decline in financial performance. The sellout decision was made as part of the Japanese group’s new thrust to place greater emphasis on high value-added products and to divert resources to locations where it has a more competitive advantage over other market players.
The proposed acquisition by TQMP will be funded by a combination of equity and debt financing from Asia United Bank (AUB).
Altus Capital acts as sole arranger and financial adviser to the transaction with Puyat Jacinto & Santos Law as legal adviser to TQMP while Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW) serves as legal adviser. —DORIS DUMLAO-ABADILLA
