All-out airportBy Conrado R. Banal
Philippine Daily Inquirer
Uh-oh, the Ayala and Aboitiz groups are trying to get rid of one of their competitors in the bidding for the P10-billion government contract to build and operate the airport terminal in Cebu.
The inconvenient competitor happens to be not only the largest conglomerate in the country today, but is also said to be the largest food and packaging company in the Asean region: the San Miguel group.
The Ayala-Aboitiz consortium recently tied up with a Canadian company known as ADC & HAS Airport in bidding for the Cebu airport contract. Based on recent news, the consortium would be up against intense competitors in San Miguel and the Metro Pacific group.
In the past several years, media have been playing up the leading figures behind San Miguel and Metro Pacific, namely, Ramon S. Ang (RSA) and Manuel V. Pangilinan (MVP), respectively. They are the fiercest of rivals in many a business deal.
What do you think: The Ayala and Aboitiz groups now want to join the fray?
Anyway, from what I gathered, the Ayala-Aboitiz consortium is on an all-out effort to get the Cebu airport contract, as their people already set in motion an orchestrated drive to oust San Miguel from the Cebu project bidding.
Word goes around in business that the consortium has the backing of a top official of the Department of Transportation and Communications (DOTC), who is in tandem with a leading figure in the Aquino (Part II) administration.
From what I heard, those two minions of our leader Benigno Simeon—aka, BS—already sent word to the Mactan-Cebu International Airport Authority (MCIAA), in rather indistinct terms, that they would want the San Miguel group out of the bidding for the P10-billion contract.
It seems therefore that the two boys of our leader BS, well, are really just favoring—take your pick—either the Ayala-Aboitiz consortium or the Metro Pacific group. Me, I place my bet on the Ayala-Aboitz consortium.
In government contracts, bidders are mostly disqualified for failure to meet the terms and conditions set by a particular government agency. In the case of the Cebu airport, it is the MCIAA, which has yet to lay down the final bidding rules.
Word goes around that the two lovely boys of our leader BS already picked a specific reason for the disqualification of the San Miguel group. And this is, well, “conflict of interest.”
You see, the San Miguel group last year bought into the struggling Philippine Airlines, aiming to inject billions of pesos in fresh capital into the country’s flag carrier that also happens to be the first commercial airline in Asia.
It seems that, under the Aquino (Part II) administration, at least according to the position being rammed by those two DOTC lackeys down the MCIAA throat, being a major stockholder of an airline and, at the same time, being an airport terminal operator—even in a support airport like Cebu’s—should be declared a detestable repugnant despicable abhorrent crime.
Now, the San Miguel group also owns a company called TransAire Development Holdings, which happens to operate the Caticlan Airport, serving the huge tourism market of Boracay.
Based on recent news, the San Miguel group also wants to spearhead the construction of a new international airport—both runway and terminal—to serve Metro Manila.
Question: How do those two clowns of our leader BS propose to deal with San Miguel’s existing interest in an airport operation, not to mention its plan to bring us to the 21st century with a new world-class international airport?
Well, the last time I heard, airport operation is still a strictly regulated business, with governments all over the world always applying kilometer-long lists of rules.
Make no mistake, Jake: There will be a lot of other questions and issues regarding the move to oust San Miguel due to “conflict of interest,” which can only be resolved in court.
Uh-oh, as we all know, court cases can only delay vital infrastructure projects. Take the case of the Naia-3 Terminal—already 20 years in the making and it is still not fully completed.
To think, the Cebu airport needed the new bigger terminal several years ago. Today it handles something like six to seven million passengers a year. The present building has a capacity for less than five million.
* * *
Recent bad news put the international banks HSBC and Deutsche Bank in a bad light, with HSBC opting to part with more than $1.8 billion in connection with money laundering issues in the United States, and the top executives of Deutsche Bank being investigated for some questionable deals in trading of “carbon emission” credits.
Bad news for banking in general!
On the other hand, the world-renowned magazine “The Banker,” published by the Financial Times of London, continues to churn out good news about banking, having just come out with its list of banking awards.
Here in the Philippines, The Banker named as “Bank of the Year” a relatively small bank, at least not in the league of BDO, Metrobank or BPI. The surprise awardee was Security Bank, known as SBC in the stock market.
That should be good news for the Philippine banking sector. See, although size matters in the money business, it is not all about size. To think, the panel of judges in The Banker’s yearly award chooses only one bank in each country. Also, majority of its readers are CEOs or CFOs of the largest companies in the world.
According to The Banker, SBC has been extraordinarily active in the domestic capital markets, which is just starting to develop a huge appetite for infrastructure funding, noting that the bank was involved in a number of big-ticket deals in the Philippines such as the P323-billion bond swap transaction of the government, the P16-billion secondary offering of San Miguel, and the P11-billion notes of South Luzon Tollways.
Oh, and by the way, The Banker also cited SBC for its aggressiveness in lending, with its loan portfolio growing by 24 percent last year, setting its eyes on infrastructure, energy, retail, real estate and mining sectors.
Of course, The Banker must cite the financial performance of the bank: the 25 percent ROE (return on equity), as against the industry average of 12 percent, and the 3.5-percent ROA, versus the industry average of 1.46 percent.
Well, the bank has been performing well in the past few years. Last year, for instance, it was already ranked the top bank among some 500 banks in the Asia-Pacific region for ROA, at least according to another magazine called “Asian Banker.” And in the last three years, its ROE has seen an enviable range of 25 to 30 percent.