Biz Buzz: ‘Window dressing’
Remember how the new management of Development Bank of the Philippines proclaimed a new era at the government-run financial institution, remitting “record-high” dividends of P4 billion?
Many officials within the bank were initially puzzled at how they were able to achieve that feat, of course. But as it turned out, the accomplishment may have been due to window-dressing aimed to burnish the image of the new management.
Remember that government-owned and -controlled corporations are required to remit at least 50 percent of their net income to the national government each year—something that the GMA [Gloria Macapagal Arroyo] era officials had done faithfully.
Well, DBP reported a net income of P4 billion last year … and remitted P4 billion in dividends.
“No wonder they had record high dividends. They remitted everything!” exclaimed one insider, adding that this was the first time in the bank’s history where 100 percent of net income was remitted, leaving nothing behind to buttress DBP’s books.
To do this, the bank had to reduce provisions for reserves from the previous year’s level, which, according to bank insiders, was lower than the industry standard to protect against potential losses.
Without the reduction in provisions, the bank’s net income should have only come in at P3.5 billion—way below the target of P3.8 billion for 2011.
What’s worse was that the bank apparently booked substantial revenues from treasury income from investments, securities trading, foreign exchange transactions and some P1.6 billion in income from the MRTC bonds—the very same ones that the new management has been criticizing the previous management for.
Taking credit for things you’ve been criticizing? They have a word to describe this.—Daxim L. Lucas
Pagcor City pioneer
Apparently, it will be business magnate Enrique “Ricky” Razon Jr. who will raise the curtains at Pagcor City on Roxas Boulevard with his $1-billion hotel-casino project “Solaire Manila.”
Construction of both Solaire Manila and Belle Grande Manila Bay is now in full swing but this early, Belle is no longer vying for the bragging rights of opening the first gaming complex in the metropolis’ future entertainment hub. “We have decided to allow Razon’s casino the honor of being the first to open in Entertainment City,” Belle vice chair Willy Ocier told Biz Buzz. And why is that so? Ocier said Belle would extend this courtesy because Razon’s dad was the partner of Stanley Ho in the early days of Pagcor during the Marcos era. “They are a pioneer,” Ocier said.
But this lead won’t likely be too wide. Belle’s soft opening for its casino might happen a mere one week after Razon’s debut, Ocier said.
Razon’s Pagcor City complex—via Sureste Properties Inc. and gaming unit Bloomberry Resorts and Hotels Inc.—earlier stated plans to open before the year ends. Belle’s debut is set for early 2013 but it plans a soft opening before the end of this year as well.
And even as their casinos have yet to open, both Bloomberry and Belle are now making plans to acquire additional sites in Pagcor City. “Our country is actually aiming to beat Las Vegas in annual gaming revenues. That’s why we are negotiating early for a second site,” Ocier said.—Doris C. Dumlao
Belle’s BFF
Meanwhile, Belle’s big boss also laughed off rumors that Leisure & Resorts World Corp. (or “LR”) would be dropped off from the company’s second casino in Pagcor City. There were rumors that Henry Sy Jr.—the property chief of the SM group, which owns majority of Belle—was now keen on dealing directly with Macau’s Galaxy group for the second casino venture. Ocier said it must be short-sellers spreading false rumors. “LR will be involved in both,” he said. “BFF kami (We’re best friends forever).”—Doris C. Dumlao
A new ballgame
After Eton Properties founding president Danilo Ignacio retires on February 29—five years after nurturing the Lucio Tan group’s publicly listed property development venture—he will enter an entirely new ballgame. At 62, he says he’s old enough to stop working but still young enough to pursue other dreams.
Apart from vacationing in South America right after his retirement, an immediate priority is for Ignacio to manage a collegiate basketball team pro bono. The property veteran plans to volunteer at his alma mater, Mapua Institute of Technology.
If given the chance, he says he likes to help beef up Mapua’s team in the NCAA and make it more competitive versus top contenders San Sebastian and San Beda, and join the UAAP, eventually. After Atoy Co and Alvin Patrimonio, Ignacio laments that Mapua has not produced any more prominent professional cagers and that he intends to change that.
And his dreams go beyond collegiate basketball. Ignacio, who travels overseas just to watch the Philippine team’s basketball games, also says his ultimate dream is to help search far and wide across the archipelago for the first Filipino basketball player who can be an international superstar and make it to the NBA.—Doris C. Dumlao
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