Biz Buzz: Tipped toward one company
A government agency that is responsible for regulating the prices of imported products to ensure fair trade recently issued a ruling favorable to a local corporation that has been losing market share to imported products (the latter being cheaper and of better quality, we’re told).
Of course, the mandate of this government agency is to protect local industries from potentially unfair trade practices by foreign governments. But what if the party seeking the agency’s protection is not a local industry but a single local corporation? Yes, this local corporation is a virtual monopoly in its field. Despite being a virtual monopoly, however, it has incurred millions of pesos in losses in recent years, to a large degree due to poor business decisions (including an investment in a field far from its supposed core competence).
In any case, when local manufacturers started buying from overseas suppliers, this company saw an opening and used the imports as an excuse to run to the government for relief.
The company was in luck for it apparently won over the head of the agency, we’re told.
During public hearings to determine what policy the state should take, many observers noted that the head of the government agency tipped his hand one too many times, for all to see and hear which side he was on (despite having to be impartial because of the nature of his job).
To the chagrin of buyers of this particular imported raw material, the head of this agency was heard practically lawyering for the petitioner, cutting off witnesses who were supporting the importers. At one point, the agency head even blurted out something to the effect of “do you want this company to die?”
The head of this agency should protect the public interest (and believe us, the public’s interest is being hurt by this agency’s decision), not just the interest of one inefficient monopolistic firm.–Daxim L. Lucas
Changing of the guard
The new taipan Lucio Co is now headhunting for a new president/chief executive officer for his bank, Philippine Bank of Communications (PBCom), following the retirement of consumer banking veteran Nina Aguas.
“Nina has indicated early on that when the transition is done, she would have to retire because in her mind, most of what she could contribute she had already contributed,” a well-placed banking source said.
After building the organization and making the business plan, sources said, Aguas could not be prevailed upon to stay longer.
Banker Henry Uy was appointed acting president for the transition period.
What PBCom is looking for now is a permanent CEO with a strong consumer background. But the bank is still far from finding a suitable candidate. PBCom, as earlier reported, is repositioning itself as a commercial bank for small and medium enterprises (SMEs), aiming to unlock synergies from the flagship retailing business of Co’s Puregold group. Apart from linking up with about 3,000 SME suppliers of Puregold, the bank sees a gold mine in consumer banking from the grocery chain’s over 300,000 customers.
Also, PBCom’s executive vice president and chief trust officer Patrick Cheng has also stepped down. The idea of building a strong trust business would have made sense if PBCom wanted to focus on the corporate market. But it did not seem to be aligned with the bank’s new focus. It has long been rumored that Co isn’t too keen on the off-balance sheet trust business.
For his part, Cheng joined China Bank of the Sy family as deputy group head of the trust group effective March 2. At PBCom, the vacancy was filled by Filemon Cabungcal.–Doris C. Dumlao
Done deal
Speaking of Co, the Chinoy businessman has finalized the deal to acquire the 34-story Tower 6789—formerly Alphaland Tower—from the consortium of British fund Ashmore and businessman Eric Recto. People in the know said the deal was done at a fair price for both buyer and seller.
“Walang nalamangan (terms are not one-sided),” a source privy to the transaction said.
The office property was built by property developer Alphaland Corp. led by Marcos trade minister Roberto V. Ongpin. It was one of the assets transferred to Bedfordbury Development Corp., the joint-venture company of Recto and Ashmore as part of a dispute settlement.
The speculation in the market is that the deal was priced below P7 billion. The sources added that Co did not use any of his publicly listed firms to close the deal.
After taking over the building, Co is sticking to the developer’s original plan for the building—lease out office space and generate recurring income.
Tower 6789, the newest among the six Grade-A towers at the heart of the Makati CBD, has 48,000 square meters of office space. Designed by Hong Kong-based architectural and engineering firm Wong & Ouyang, the ground and second levels of the tower are intended as prime commercial space while the building has a three-story penthouse with its own rooftop gardens and lounge areas. Each level has a floor space of between 1,100 and 1,600 square meters.–Doris C. Dumlao
Somewhere in the middle
Lawmakers have yet to finalize the joint resolution seeking to grant President Aquino special powers, allowing him to deal with the looming power crisis. One of the major sticking points is, whether the government must pay for the cost of coping mechanisms.
The main measure, called the Interruptible Load Program (ILP), was reported to cost P651 million for three months. The House of Representatives wants the Malampaya fund to cover the cost, whatever the final amount would be, but the Senate is keen on making it a pass-on cost.
Energy Secretary Carlos Jericho Petilla, meanwhile, appears to be caught in the middle.
“Our original proposal was to subsidize only the incremental cost and not the entire cost of ILP. However, this is really down to what the Senate and the House will agree on,” Petilla said.
Lawmakers said the sticking points may not be smoothed out until Monday. Many fingers are crossed, hoping that the resolution and the implementing rules will be done in time for the critical period from mid-March to around mid-April.
Petilla said the Department of Energy would leave nothing to chance, at least for its part of the work. It has already made a draft IRR or implementing rules and regulations, he said.
“While waiting, we made it so that we just need to fill in the blanks, and pick from the multiple choices to finalize,” Petilla said.–Riza T. Olchondra
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