Biz Buzz: Soon to be evicted
The employees of Philippine Deposit Insurance Corp. probably thought they had seen the last of their former office—a decrepit structure along a flood-prone section of Chino Roces Avenue in Makati City—after they moved to a “better location” a few years ago.
This better location, the Social Security System building on the corner of Ayala Avenue and Rufino Street in Makati City, isn’t too swanky either since it was built in 1966 and is not a modern high rise, but is classified as a “class B” building.
But it does have the benefit of being located in the country’s most expensive address for offices, and… well… employees never have to contend with anything worse than puddles even during heavy downpours.
Unfortunately for the officers and staff of PDIC, the new leadership of the SSS has better ideas to realize greater value from this expensive piece of real estate.
Biz Buzz learned SSS was eyeing a joint-venture deal with a yet-to-be-determined partner to redevelop the 12-story structure into a gleaming high rise building that will maximize the investment value of the property.
And the prospect of building a high rise on the spot is giving SSS investment officials wet dreams because—thanks to the relatively large size of the property—any building that will be built on it can probably have 50 stories (or more) of sellable or leasable space (the PBCom Tower across the street has 52 stories aboveground and seven basement levels sitting on a smaller footprint).
Of course, the most ardent suitor for the right to partner with SSS and develop the property is none other than Ayala Land, we hear, because well… it’s its home turf, Ayala Avenue, after all.
But Biz Buzz learned SSS is playing coy and is entertaining other suitors who may be willing to give it a better deal than the blue-chip Ayala firm. No one knows which way the new SSS leadership is leaning, but the chair of the private pension fund wants nothing less than an “iconic landmark for its members as a sign of stability,” we were told.
SSS chair Amado Valdez is, at present, traveling overseas, but we understand a decision will be made soon on which property developer the pension fund will partner with, so… abangan.
Meanwhile, PDIC officials and employees will sadly have to return to their old digs. The move to Ayala was encouraged by former Finance Secretary Cesar Purisima, who wanted the old office sold, but that plan has since been overtaken by new circumstances.
On the upside, the old PDIC building is being refurbished, inside and out, so that the returning staffers won’t feel like rejects, given the important role they play in bank regulation and supervision.
And most importantly, the Makati City government has repaired the problematic drainage along Chino Roces, so hopefully, no more flooding. That’s something to look forward to, maybe. —DAXIM L. LUCAS
Diesel or geothermal?
Residents of Davao Oriental, a neighboring province of President Duterte’s home city of Davao, are bracing for higher electricity costs, including potential environmental issues should a local cooperative succeed in shifting reliance on diesel power instead of geothermal.
Talk in energy circles indicate that Davao Oriental Electric Cooperative Inc. (Doreco) is inviting participants to a competitive selection process (CSP) for electricity supply and transfer agreement. The deal involves financing, construction, operation and maintenance of an 11-MW bunker-fired diesel power plant within their franchise area.
But Doreco’s move is raising not a few eyebrows. For the past three years, the local power cooperative has been gradually reducing—and allegedly cancelled altogether—a cheaper and more environment-friendly geothermal power supply agreement, citing overcapacity and cost-cutting measures. Local pundits, however, claim that shopping for a new power supply contract hardly qualifies as cost reduction.
Besides, industry experts say that instead of lowering power rates, shifting to bunker-fired diesel power plant would bring the price of electricity to P13 a kilowatt-hour or nearly double the existing P7 to P8-a-kWh rate in the area. In short, residents of Davao Oriental could very well end up paying higher electricity bills should the co-op’s plan succeed.
Facing additional burden, household consumers in the province are planning to ask the Energy Regulatory Commission (ERC) and the National Electrification Administration (NEA) to look into Dorelco’s plan. They claim that if this is how electric cooperatives work, the plight of consumers who pay high electricity rates would never end, hindering economic growth in Mindanao. —DAXIM L. LUCAS
Appetite for PIZZA
As a signal of confidence in this restaurant chain, the Po family—through holding firm Century Pacific Group Inc. (CPGI)—has been buying more shares of Shakey’s Pizza Asia Ventures Inc. (SPAVI) in the open market.
Last month, CPGI—which is also the parent firm of leading canned food manufacturer Century Pacific Food Inc. (CNPF)—raised its interest in SPAVI to 52.26 percent from 52.01 percent. CPGI bought 3.8 million additional shares of PIZZA from a low of P12.86 to a high of P12.98 a share on June 23 and June 27.
Yesterday, SPAVI’s share price rose by 4.86 percent to P13.80 each, giving it a market capitalization of around P20.1 billion. —DORIS DUMLAO-ABADILLA
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