Today, July 31, is the feast day of St. Ignatius of Loyola who is the founder of the Society of Jesus. As tradition dictated, Jesuit priests celebrated the occasion with a special Mass last Sunday that brought together the entire Ateneo community.
After the communion rite, the newly installed Father Provincial of the Philippine Jesuits, Fr. Tony Moreno SJ, made an announcement that caught the entire congregation off guard.
After relating how many Jesuits are getting older and more ill—thus imposing a heavier financial burden on the religious order—he showed a video of architectural concepts for a new hospital that would rise on the Loyola Heights campus. This multi-story “Jesuit Health and Wellness Center” would serve as an infirmary for aging priests who have dedicated their lives to serving Filipinos. And it would mark a dramatic upgrade from the Jesuits’ current two-room infirmary.
Then the shocker: The shiny new edifice would cost a whopping P120 million.
But not to worry, Fr. Moreno said. The funding source was already secure.
And the donor was … a certain business tycoon named Ramon S. Ang.
In a break with protocol—as the Jesuits are not in the habit of honoring donors during Ignatian Masses—the head of the Philippine Jesuits called Ang onstage for the turnover of the first P60 million for the building. Ang was, of course, honored with a standing ovation. (After the Mass, Ang made another jaw-dropping commitment to Fr. Moreno: “If there’s anything else you need, just tell me.”)
There is now a debate among the Jesuits (and a private joke) on what to call the building. Some worry that naming it the “Ramon Ang Building” might offend Ateneo’s other donor (and Ang’s so-called “frenemy”) Manuel Pangilinan.
So, following the current trend of prefixing the article “the” before establishment names (e.g. The Medical City), the Jesuits are now thinking of doing the same, only in Filipino, for a more subtle billing. The resulting name: “Ang Ospital.” Daxim L. Lucas
Wrong play
Shares of gaming firm Leisure & Resorts World Corp. (LR) sizzled on Monday—trading 15 times more than its usual daily turnover—after the company announced a 40-centavo cash dividend per common share to stockholders on record as of Sept. 28 and payable in Oct. 2013.
Some investors gobbled up shares of the gaming firm to take advantage of the hefty dividend play only to see such “jackpot” going pfft.
It turned out that LR had committed a “typo” error in making the disclosure and the cash dividend would only be four centavos a share, instead of 40 centavos (cash dividends amounting to 4 centavos will be paid in October this year and in February next year). It left investors flabbergasted. By the time LR issued the correction late Monday, some investors had already done trades based on the erroneous cash dividend information.
The PSE originally intended to impose a one-hour trading halt on LR yesterday, but the local bourse decided to impose a trading suspension on the company instead.
We were told that the PSE was swamped with complaints on the matter and, at press time, PSE officials were still looking into this unnerving incident and trying to find a resolution. To preserve the sanctity of corporate disclosures, market players thus think it’s time for the PSE to map out rules on erroneous disclosures.
“This happens every so often,” says veteran stockbroker Joseph Roxas of Eagle Equities. “The exchange should come up with a rule on these things.” Doris C. Dumlao
Unkindest ‘cut’
Government efforts are now under way to secure billions of pesos in sin tax revenues by way of “security strip stamps” to be affixed on the packaging of alcohol and tobacco products.
APO Production Unit Inc.—the BIR’s designated printer for the stamps—has started bidding out the P198-million contract to lease the special printing equipment. But not a few eyebrows were raised upon learning that, instead of insisting on brand-new “rotogravure” machines, APO’s bids and awards committee allowed bidders to supply even “second-hand or refurbished” printing equipment.
Worse, APO insiders claimed the P198-million budget easily allowed APO—a government-owned firm—to purchase brand-new equipment at a third of the budget allocated for leasing purposes.
One Biz Buzz source hinted that this might actually be an old government procurement gimmick. Indeed, why buy when you can lease, said the source. Outright purchase would mean a one-time “cut or commission” while leasing ensures a steady stream of revenue for the favored supplier and those who deal with them.
Computing the cost to the government, the source said a three-year contract for the remainder of President Aquino’s term would cost taxpayers almost P600 million (at P198 million a year) just because APO decided to rent, instead of buy the equipment.
The unkindest “cut” of all—if the government ends up using second-hand machines prone to breakdown—is that it could derail the production of BIR strip stamps worth billions of pesos. Daxim L. Lucas
Birth of ETFs
The Philippines is one of the last markets in the region without an exchange traded funds (ETFs)—a new fast-growing asset class—but the Philippine Stock Exchange hopes this will change very soon.
PSE chief operating officer Roel Refrain, in a recent forum on ETFs, said the PSE’s quest to bring it into this market could be compared to human pregnancy. The PSE is on a nine-month countdown and is very excited to see the baby come out soon.
Refrain vowed that the PSE would “handhold” this baby toward maturity.
The Metrobank group’s First Metro Investment Corp. is the first to launch ETFs with a P1 billion offering and listing planned by September. FMIC has officially filed for the listing, to be known as First Metro Philippine Equity Exchange Traded Fund, which will have an authorized capital stock of P3 billion.
FMIC is, thus, brave enough to be the guinea pig as the country tests the local waters for ETFs. Unlike other markets, Philippine ETFs are required to be structured as a corporation. This means that, like mutual funds, they need to convene stockholders meetings and go to the Securities and Exchange Commission every time they need to hike their authorized capital. For other potential issuers, such structure is a major issue alongside arbitrage and taxation issues.
But as regulations evolve to strike the right formula, more fund managers are bracing to join the game. Doris C. Dumlao
Airports equals shopping
HENRY Sy’s SM Group has insisted that it will stay true to its core banking, retail, mall operations and real estate business. But those closely watching the public-private partnership (PPP) program would have noticed that it is among the contenders for an international airport in Cebu and a smart card system for Metro Manila’s elevated railways.
So, is SM Group also making a big push into transport infrastructure similar to what Ayala Corp. and San Miguel Corp. have done? Well, yes and no, a ranking source within the group said.
SM Group would indeed have greater exposure to these sectors if it wins those bids. But apparently the key motivator remains the same, which is retail synergies with its other businesses.
Take for instance the airport business through the P17.5-billion Mactan Cebu International Airport. Our source told us SM Group was banking on the changing airport business as can be seen in regional or world leaders like Changi in Singapore and Incheon in South Korea, which draw ever bigger returns from retail shops and restaurants. After all, the Sys will not need to operate the airport, as per the bidding requirements, it tapped a foreign operator, Flughafen Zurich AG, in SM Group’s case.
“The model for airports has changed. In Manila, most of the revenues come from serving the aircraft services and fees but now it’s retail. Up to 50 percent of revenues in Changi come from retail,” the source said. “That is the logic from SM’s side.”
The idea is the same for the automated fare collection system for the capital district’s railway lines. SM Group, which owns the Philippines’ biggest bank and chain of shopping malls, could leverage on this network to distribute the train smart cards or integrate these with other SM Group services. Miguel R. Camus
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