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Biz Buzz: PAL airport at CyberBay

Flag carrier Philippine Airlines, now under the management control of diversifying San Miguel Corp., plans to build what could be the country’s biggest and most modern international airport and everyone (especially those who envy the airports they see in other countries) is speculating as to the location of the new gateway.

There is talk that the proposed airport will be somewhere north of Metro Manila, which is very unlikely because (1) SMC’s critical mass of toll roads that can potentially benefit from airport proximity is south of Metro Manila while the north is the bailiwick of the frenemy and (2) if Manila will be Asia’s next gaming hub with the development of Pagcor’s Entertainment City, SMC/PAL will naturally want to put its chip somewhere closer to the location of the tourism epicenter.

Ergo, the most logical location for a prospective PAL/SMC airport is the CyberBay waterfront reclamation project. CyberBay Corp., after all, is chaired by Ramon S. Ang (a.k.a. RSA), who is also the chief executive and now the single biggest stockholder of SMC. The CyberBay project is along the Manila-Cavite Coastal Road, covering the cities of Parañaque and Las Piñas and the municipality of Bacoor, Cavite, but was shelved earlier due to legal complications.

The project was originally envisioned to be a 750-hectare township development but the Supreme Court, in 2002, nullified a joint venture between the state-owned Philippine Estates Authority and Amari Coastal Bay Development Corp., formerly controlled by Ital-Thai consortium. Meanwhile, RSA bought into CyberBay as a personal investment in recent years, even if the remaining assets in its books consisted only of claims against PEA (now the Philippine Reclamation Authority) worth about P11.53 billion as of end-2010 (the reimbursement was for the relocation of informal settlers in the area and funds injected to run the operations of Central Bay from 1995 to 2002). RSA must have seen something else in CyberBay—such as a prospective reincarnation into the country’s main international gateway.

We heard that SMC has indeed been conducting feasibility studies to convert the CyberBay reclamation project into a prospective major airport. From this group’s point of view, it has become very urgent given PAL’s issue with a bird sanctuary beside the existing Naia airport. Our sources said that this might be submitted as an unsolicited proposal to the government next year.—Doris C. Dumlao

 

End of an era

An P80-billion capital raising isn’t easy in this market especially as the biggest equity offering in the market coincided with the so-called “ghost month,” that period in the lunar calendar when some Oriental investors refrain from making big moves, especially in investing. But at the end of the day, it seems that San Miguel Corp. will be able to complete the landmark issue in a single tranche (notwithstanding intrigues among its underwriters). It looks like lead arranger HSBC has beaten the odds to deliver the committed goods, banking sources said.

As of Friday’s closing, a source privy to the offering said close to P60 billion had been taken up as last-minute orders came in. HSBC itself agreed to take up P10 billion for its internal investment portfolio while the residual P10 billion will be distributed to retail investors through the British bank’s local branches.

Banking sources said the bulk of the investors, about 55 percent, flocked to SMC’s preferred series 2A that carries a 7.5-percent annual dividend rate and a step-up rate in five years (redeemable starting on the third year). About 30 percent veered toward the 8-percent/year sub-series with a step-up rate after 10 years (redeemable starting in the 7th year).

But more than the large capital market foray, this signified the end of an era in SMC, which has been historically vulnerable to national politicking (through the stake held by the Presidential Commission on Good Government). After all, SMC will use the proceeds to exercise its option to redeem the old series of preferred shares, most of which are held by the government. The money raised from the offering is thus seen buying out such overhang while P-Noy gets extra earnings to channel to his infrastructure spending as he awaits the government’s much-coveted graduation to investment-grade status.-Doris C. Dumlao

Bloated salaries?

If rumors are to be believed, Philippine Amusement and Gaming Corp. chair Cristino Naguiat is the next target of certain “operators” going after a certain faction of the Aquino administration.

Recently, Naguiat’s name featured prominently on a list of “highest paid government officials” making the rounds of social media sites.

On the list, Naguiat was supposed to be making P11.6 million a month as chair of the state gaming agency, for a total of P140 million a year. Second-highest on the list was Defense Secretary Voltaire Gazmin, who supposedly makes P1.7 million a month, followed by Senior Associate Justice Antonio Carpio, who, if the list is to be believed, makes P1.6 million a month.

Others on the list include BIR chief Kim Henares (P916,666/month), BSP Governor Amando Tetangco Jr. (P883,000/month) and former Solicitor General Anselmo Cadiz (P731,666/month).

According to the list, Social Welfare Secretary Dinky Soliman, PMS head Julia Abad, justice chief Leila de Lima and Executive Secretary Paquito Ochoa all brought up the rear, earning between P117,000 and P137,000 a month.

There’s reason to believe that the list is inaccurate though. Showed the list, Pagcor’s Naguiat was shocked and said that the salary attributed to him on a monthly basis was larger than even his whole year’s wage.

According to our sources, one should expect more brickbats to be thrown Pagcor’s way in the coming weeks.—Daxim L. Lucas

Money trail

After successfully removing Renato Corona from his post as chief justice, word on the street is that Aquino administration officials have begun to move against so-called “second tier” players in the administration of former President Arroyo.

According to our sources, the next level of officials currently being targeted by probes in various offices are those who had somewhat less political clout under the previous dispensation, but were allegedly involved in some high-profile deals.

These officials currently being investigated include a former agriculture secretary, a former public works secretary and a former transportation and communications chief. Similar to the Corona impeachment, the rumor is that the investigating agency of choice for this round is the Anti-Money Laundering Council. How true? Let’s see how it plays out in the coming weeks.—Daxim L. Lucas

Politicians corner Maroon 5 tickets

Having a hard time looking for tickets to the Maroon 5 concert on Tuesday? Lay the blame partly on some of the country’s top politicians who dropped not-so-subtle hints for the sponsors to cough up the tickets so that they and their children can watch Adam Levine and the rest of the chart-topping American band up close and personal.

Maroon 5 is famous for top hits “This Love,” “She Will Be Loved,” “Moves Like Jagger” and “Payphone,” and insiders say that the tickets were sold out as early as August, and the few complimentary tickets available were snapped up by politicos who were not willing to pay thousands for the best seats of the Smart-Araneta Coliseum in Quezon City.

For them, why pay when you can get the tickets for free?—Tina Arceo-Dumlao

Squeeze on China investor

The Philippine government is putting the squeeze on China’s single-biggest Chinese investment in the country amid rising friction on their conflicting territorial claims.

An industry source said that the government has suspended the work permits granted to 16 Chinese engineers brought in by the state-run State Grid of China to oversee the technical operations of National Grid Corp. of the Philippines (NGCP), which owns and runs the power transmission lines in the country.

The source said the Chinese engineers were not able to take over the duties in the company following the suspension of their work permits. Foreigners are required to obtain a 9G work visa from the Bureau of Immigration and a separate Alien Employment Permit issued by the Department of Labor and Employment. Foreigners have to prove that their skills are indispensable to the operation of the company hiring their services.

The source said NGCP officials were taken aback by the sudden withdrawal of the work permits for the Chinese engineers. The source said the Chinese officials refused to blame the growing tension between the Philippines and China on ownership of the Panatag (Scarborough) Shoal and Spratly’s Island for the incident.

Stage Grid has the single-biggest stake in NGCP with 40 percent (the maximum allowed for foreigners) with One Taipan Holdings of retailer and property developer Henry Sy Jr. and Calaca High Power Corp. of businessman Robert Coyiuto Jr. each having a 30-percent stake. The Inquirer got in touch with a spokesperson of the NGCP, who declined to comment on the incident.—Gil C. Cabacungan Jr.

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