Pagcor bites the bullet

After a year of deliberations, gaming regulators are close to finalizing a framework to neutralize the adverse impact of a mandated shift in the tax regime on the gaming industry from the 5-percent franchise tax on gross gaming revenues to a 30-percent tax on corporate net income.

Sources from the gaming industry said the state-controlled Philippine Amusement Gaming Corp. (Pagcor) may soon announce a 10-percentage across-the-board reduction in the license fees slapped on the gaming industry, thereby easing fees to be collected as a percentage of gross gaming revenues from the VIP and mass gaming segments.

The gaming industry is satisfied with this solution, which is now only awaiting official Pagcor board approval.

The imposition of the regular income tax has a retroactive effect but in the case of gaming firms like Bloomberry Resorts Corp., which still has a lot of net operating loss carry over (Nolco), the Razon-led firm still doesn’t have to pay income taxes on its first-quarter earnings.

The framework took shape months ago but to ensure that this can withstand legal scrutiny, Pagcor had to seek a legal opinion from the Office of the General Corporate Counsel and the like.

While it’s only a matter of money going from one pocket (Pagcor) to another (Bureau of Internal Revenue) within the bureaucracy, it took time to process the paperwork.

Pagcor is seen biting the bullet, of course, but it will get brownie points from investors for upholding its commitment to the gaming industry. Doris C. Dumlao

Hustler

A lot of treasury people at some of the country’s biggest banks are talking about this senior executive from one of the biggest property companies.

Why? Well, it seems like Mr. Real Estate Official likes getting his way, especially when it comes to keeping the funding costs for his principals low—apparently, at levels that can only be described in banking circles as “too ambitious.”

During a recently concluded bond sale, our banker friends say this guy wasn’t too happy with the rate that his company got. As such, he chose not to sell the full amount at all because the yield on the bond issue would have been 38 basis points higher than what he was aiming for.

At the rate he was wiling to pay, his company would have been able to raise only about P1 billion from banker-creditors, which is a mere fraction of the announced bond offer size. So to save face, the real estate firm’s official tried swinging a deal for the entire amount (which is to say, many billions of pesos more) at a quarter-point higher. Surprise, surprise. The banks still wouldn’t budge.

So who ended up giving way? Mr. Real Estate Official eventually relented—an unusual situation for any official belonging to firms of this conglomerate—and got more than half of the planned bond sale at a yield that’s about 125 basis points over the going rate (ouch!) for a slightly shorter maturity. After all, everyone knows that interest rates are headed northward. Or maybe he hasn’t been reading the central bank comments over the past month, the bankers chuckled. Daxim L. Lucas

Spotlight on Hyundai

South Korean carmaker Hyundai has zoomed past its Japanese competitors as it was chosen as the “official mobility partner” for two upcoming international summits that are seen to put the spotlight on the Philippines as an emerging economic powerhouse.

According to local distributor Hyundai Asia Resources Inc. (Hari), 11 Grand Santa Fe SUVs will serve the region’s top finance officials during the Asean Finance Ministers’ Investor Seminar 2014 on May 20.

For the much-anticipated Philippine hosting of the World Economic Forum on East Asia slated May 21-23, meanwhile, 52 Grand Starex luxury vans will transport delegates in style.

Hyundai brags it “clearly has the edge for the job ahead,” citing that a Grand Starex fleet conveniently transported delegates to the 45th annual meeting of Manila-based lender Asian Development Bank’s board of governors in 2012.

“We are more than thrilled to contribute in our small way to the critical decision-making that will take place as the Philippines takes center stage for the World Economic Forum on East Asia,” Hari president and CEO Maria Fe Perez-Agudo says.

“Having the movers and shakers in global finance and business scene experience up-close the premium features of our two powerhouse vehicles, the Grand Santa Fe and the Grand Starex, is already a remarkable step for the brand. However, what is more brilliant is the fact that as the Philippines tells the world of its amazing growth track, Hyundai will be there to tell its own story of how it shaped the Philippine auto industry,” she adds.

Hari is the third-largest car seller in the country, making Hyundai the top Korean brand in a market still dominated by Japan’s auto giants. Ben O. de Vera

Security Bank magnet

Filipinos’ penchant for beauty pageants and beauty queens has been helping attract more customers to Security Bank, which just last February tapped the Filipina Miss World winner, Megan Young, to be the face of its rebranding campaign.

Even public investors of the listed bank were being drawn, as one stockholder noted during last week’s stockholders’ meeting that there were more attendees than the usual, making Security Bank chair Frederick Dy quip that perhaps they’re hoping to see the beauty queen-endorser up close and personal (alas, she wasn’t there).

With the bank putting much more effort into its retail banking business these days, the endorsement of a widely followed and, of course, beautiful celebrity like Young provides a big boost.

“Megan Young is the perfect embodiment of the bank’s transformation to a more customer-focused financial institution. Like Megan Young who deserves only the best, clients of Security Bank could expect only unparalleled service,” says retail banking segment head Maki Tingson. Ben O. de Vera

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