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Biz Buzz: ‘Overpriced’

/ 12:16 AM January 05, 2015

After reports emerged late last year that Manny Pacquiao was selling his sprawling North Forbes home for more than P700 million, the high society crowd immediately got excited by the rumor.

This was especially since a done deal at that price would automatically raise property values in the exclusive Makati enclave the way the boxing champion’s 2011 purchase did.

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To recall, Pacquiao bought that property from banker Lorenzo Tan for P388 million—a price which was then already significantly higher than the last transacted price in that area. The current rumored asking price of P708 million would see the purchase price almost double in less than four years.

But no sooner had the rumor made its first round when doubters emerged. In the first place, there were already doubts among the upper crust of society that the sale was being prompted by his snooty neighbors’ frowning upon his working class guests.

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“It’s a good story,” said one resident in the area. “But that’s not the real story.”

And what’s the real story? Apparently, the upkeep on the home is quite expensive, considering that its acquisition was funded partly by a loan from RCBC (which is run by the home’s former owner, Tan). That loan, alone, costs P7 million in monthly amortization. That amount supposedly makes up almost half of the boxing champion’s monthly expense of—brace yourselves—P15 million, for the upkeep of his household, his charitable work, the expenses for his … uhm … entertainment, and the salaries for his large entourage.

And, according to our source, the real asking price is nowhere near P708 million. Those that his camp have approached for a potential sale have received a more “reasonable” offer: P500 million.

In any case, Pacquiao’s financial condition is supposedly enjoying some relief with his camp’s decision to hold his last two fights in Macau.

You see, the prize money from fights held in Las Vegas are taxed by US authorities at 40 percent of the gross amount.

In Macau, the tax rate is … zero.

That doesn’t mean it’s tax-free, however. He still has to contend with local taxes slapped by the Bureau of Internal Revenue of about 32 percent. Ouch. Daxim L. Lucas

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‘Open wallet’ policy

As the Benitez family and businessman Eusebio Tanco-led STI wrestle for control of the Philippine Women’s University over a heated campus “commercialization” debate (with each party pointing to the other as the proponent of such), the STI group has vowed to invest “whatever amount is needed” to shore up the quality of PWU education and facilities.

“PWU has been in the decline in all respects. The main campus in Manila is a testament of neglect, with leaking roofs, flooding and poor laboratory facilities,” STI president Monico Jacob said.

He said PWU’s college student population had slid to 2,000 from a peak of more than 12,000 at one time which he cited as the major reason why PWU lost P115 million in 2009 and 2010, while net losses since the start of the school’s operations reached P374 million as of May 2010.

Jacob said it was only the bailout from STI that allowed PWU to continue operating and gave it a “healthier cash flow” moving forward.

To fulfill the students’ dreams of a better school and better education is the “bottom line of PWU’s legacy,” he said. “We have the resources and the expertise to succeed where the previous owners failed.”

If STI did not bail out PWU in November 2011 for failing to pay its bank loan, it would have been foreclosed, and the Benitezes would have been ousted, Jacob added.

He said the collateral was the school and its properties, including the JASMS (Jose Abad Santos Memorial School- PWU’s basic education arm) campus in Quezon City.

The Benitezes were also required by the bank to sign undated resignation letters as owners and board members that would take effect upon default.

“We bought the debt from the bank and became the creditor. So we helped the Benitez group keep control of PWU. But last month its key members asked for the rescission of its agreement with STI without offering to pay us a single centavo. Since they were actually in default with us just days after we bailed them out, we called in their resignations,” Jacob said. Doris C. Dumlao

Makati Diamond launch

The property arm of San Miguel Corp. is getting ready to make its presence felt in the Makati central business district with the launch of the Makati Diamond Residences in February.

SMC head honcho Ramon Ang told Biz Buzz that after a short delay—about four months by our count—the 28-story serviced apartment project was set to open around the Chinese lunar new year, which falls on Feb. 19, 2015.

The building will have 400 rooms of varying sizes to cater to both long- and short-term occupants, several function rooms, and—perhaps most importantly in the increasingly busy Makati commercial area —as many as 500 parking slots in a multilevel basement.

The project started as a joint venture with the Government Service Insurance System which initially owned the property, but the state pension fund has since been bought out of the deal.

Ang said he opted not to sell the units to buyers similar to what was done for the Ayala-owned Raffles Residences (where the units form part of a rentable pool when owners are not using it), because such a set up would be cumbersome once the time came to redevelop the property. Hence, he opted for the more expensive—but less problematic—mode of funding the project internally.

Finishing touches are now being applied to the building both inside and out, and the tycoon has already hosted a number of dinners in the building over the holidays, we’re told.

In any case, Makati Diamond is situated along Legazpi Street (across Greenbelt Mall), and is flanked on both sides by two properties (Eton Residences and Charter House) of Ang’s former Philippine Airlines partner, Lucio Tan.

Interesting neighborhood. Daxim L. Lucas

Azalea in Boracay

Outside of flagship 8990 Holdings (HOUSE), businessman Januario Jesus Gregorio “JJ” Atencio III is building a tourism-oriented portfolio under the Azalea brand.

For now, however, the hotel property is kept distinct from the purely mass housing portfolio because Atencio prefer to keep the HOUSE business simple.

Azalea Residences is described as a “premier vacation club that aspires to give its members holiday ownership with world class facilities at the fraction of the cost.”

It aims to open family-oriented hotels and resorts in various key tourist destinations.

At present, Azalea has an existing property in Baguio City. But by March this year, Atencio said Azalea would open a 200-room hotel-resort on Boracay Island.

“We hope to be ready in time for summer,” he said. Doris C. Dumlao

Awarded

Mike Toledo had not even warmed his seat yet upon joining Philex Mining Corp. when he was sent to work overtime on a crisis for several months straight.

With that crisis now behind the company, the lawyer and former press secretary of former President Estrada is now being recognized for his work.

Now the head of the MVP group’s media bureau (in addition to being Philex’ head of corporate affairs unit), Toledo has been given the CEO Excel award by the International Association of Business Communicators (IABC) Philippines.

“With this honor, we welcome you to the select group of outstanding national and industry leaders who epitomize management competence and excellence in communication at a strategic level,” the IABC Philippines said in its letter to Toledo, who is an alumnus of the London School of Economics and the University of the Philippines’ College of Law. He finished his Masters in International Law under a full scholarship awarded by the British Government.

The CEO Excel Awards has been granted annually since 2005 to business executives and organization leaders from the private, government, academic, and nonprofit organizations.

IABC Philippines is the first country-chapter established outside the United States by the San Francisco-based IABC, one of the world’s largest business communication organizations, with about 14,000 members in over 70 countries. Daxim L. Lucas

E-mail us at bizbuzz@inquirer.com.ph. Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert).

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TAGS: Benitez, Boracay, Business, economy, Manny Pacquiao, News, PWU, San Miguel, STI
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