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Biz Buzz: A billion per letter

/ 09:57 PM June 07, 2011

Philippine National Bank, once the country’s largest in terms of assets, has hired a big-time foreign consultant to work on a rebranding program.

The bank, after all, will soon merge with sister firm Allied Banking Corp. and celebrate its centennial in 2016.

But the Singapore-based consultant had proposed certain changes that PNB’s controlling shareholder, tycoon Lucio Tan, found unpalatable.


Some insiders said the suggestions were so radical that the tycoon couldn’t help but mouth something to this effect: “You know how much I had invested in PNB? As many letters as there are in its name.” (There are 22 letters in its fully spelled out name.) Ergo, he wanted everything left as is.

The junking of the consultant’s suggestions (which of course didn’t come free) doesn’t mean, though, that PNB isn’t working hard to regain its former glory in the banking industry. Under the leadership of PNB president Eugene Acevedo, who assumed the post a year ago, branches are being spruced up, the consumer and middle-market lending portfolios being beefed up to boost recurring earnings, and more idle assets being unloaded.—Doris C. Dumlao

Purisima’s big day

Today (Wednesday) is a big day for Finance Secretary Cesar Purisima. He is scheduled to face the Commission on Appointments this morning for what could be the most closely watched confirmation hearing of any Cabinet member of this administration.

Purisima—who was bypassed by the same body a couple of months ago—is counting on the backing of his allies in the Senate to deflect the usual attacks against him regarding his alleged failure to file income tax returns in previous years, along with questions over some unpopular policies and his penchant for rubbing people the wrong way.

Overall, though, allies of the de facto economic managers’ chief believe he already has his confirmation “in the bag,” thanks to some “strategic agreements” made with key personalities in recent weeks.

Purisima’s confirmation may be welcome news for the business community, which is counting on him and newly appointed Transportation Secretary Mar Roxas to add ballast to the current disposition in Malacañang.

The only unknown element remaining, according to our sources, is one NoyBi-allied senator who they fear may still spring a surprise by way of a veto.


In any case, Purisima’s luck seems to be holding up. On his Twitter account on Tuesday, the finance chief tweeted profuse thanks to Singaporean cab driver Ricky Song, who returned his iPhone within an hour of him leaving it—and all the Philippine state secrets it held—in a taxicab.

Regardless of today’s CA hearing outcome, Purisima will fly back to Singapore tomorrow to join his wife for a routine medical trip.—Daxim L. Lucas

‘Not in business’

During the annual stockholders’ meeting of San Miguel Corp. on Tuesday, a shareholder asked SMC chairman Eduardo “Danding” Cojuangco Jr. what could be done to make the group’s basketball franchises more competitive (Barangay Ginebra Kings recently lost to corporate rival Talk N’ Text Tropang Texters as the latter lorded over the PBA for the second straight year).

“Bayaan ninyo na silang manalo sa basketball, huwag lang sa negosyo (Let them win in basketball, just not in business),” was Cojuangco’s reply. Whoa.—Doris C. Dumlao

SMC once more, with feelings

After Goldman Sachs, Credit Suisse First Boston and ATR KimEng issued buy recommendations last week for San Miguel Corp.—all saying that the conglomerate’s stock was massively undervalued at P110 per share—it is now the turn of Standard Chartered Bank to echo this feeling.

According to StanChart, SMC’s share price should be trading at least P136 apiece, representing a 17-percent premium over the stock’s closing price of P116.10 on Tuesday.

According to StanChart, SMC has completed an “impressive transformation from a beer and food powerhouse to a leading diversified conglomerate, and enhanced its growth profile in the process” over the last three years.

In addition, the stock price is trading at a 40-percent discount to its estimated net asset value level for 2011, the bank said.

StanChart also pointed out that SMC “is a direct play on attractive Philippine growth” since it is “one of the leading conglomerates in the country with interests across nearly the entire breadth of the economy.”

StanChart’s target price was, of course, broadly in line with the price targets set by Goldman Sachs and CSFB—fellow underwriters of SMC’s recent equity issue. But the price is well below the P168 a share target set by ATR KimEng. Why? Given its trading activities before SMC’s share sale, ATR still has some making up to do, say our sources.—Daxim L. Lucas

Happy middleman

When news of Transportation Secretary Jose “Ping” de Jesus’ resignation broke last week, the Private Emission Test Center Operators Association (Petcoa) expressed its elation that “real reforms” could finally start at the Department of Transportation and Communications.

Petcoa, headed by businessman Tony Halili, earlier criticized De Jesus for allegedly “siding” with Stradcom Corp., the Land Transportation Office’s (LTO) information technology provider, on several issues.

Halili said Stradcom was guilty of several violations in its contract with the government. Whether the allegations are true, of course, is another story. But what motive would Halili, a strong supporter of controversial LTO chief Virginia Torres, have to want Stradcom’s contract terminated?

A former ranking LTO official told Biz Buzz that, apparently, Halili used to own a company that collected data from emissions testing centers before sending these to the Stradcom database.

But when Stradcom implemented its more efficient “direct connect” system—which, as the name suggests, allowed emission testers to send their data directly to Stradcom—it effectively “cut out the middleman.”

The middleman, of course, was Halili’s company. Whether this had anything to do with his critical position against Stradcom and De Jesus, only Halili knows.—Paolo Montecillo

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TAGS: Allied Banking, appointments, Banking, Business, Cesar Purisima, Conglomerates, mergers, Ping de Jesus, PNB, San Miguel Corp., Stradcom, transportation
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