Biz Buzz: 38 billion reasons

THE DEPARTMENT of Foreign Affairs’ drive to make the production of Philippine passports more efficient faces a fresh set of delays, no thanks to efforts by parties from the private sector and—surprise, surprise—within the government to derail the system.

Biz Buzz has learned that the new policy of shifting passport printing operations to the government-owned APO Production Unit Inc. has been facing strong headwinds in Congress, courtesy of some party-list lawmakers who have been rather sympathetic to the previous private contractor, Oberthur Technologies Inc.

Oberthur lost the multibillion-peso deal earlier this year after the DFA decided not to renew its passport printing contract and instead chose to have the passports produced by APO, which has a new secure facility in Malvar, Batangas—the same one that produces tax seals for the Bureau of Internal Revenue and was recently inaugurated no less by President Aquino.

And now, these critics of the DFA-APO deal are blaming the new arrangement for the backlog of passports of anywhere from 70,000 to as much as 250,000 booklets—something that was already existing before the contract was transferred to the government agency (which is now working to clear this inherited backlog).

It’s understandable, of course, why anyone who isn’t a party to this deal would be upset and try to wrest it from the current holders. Biz Buzz learned that the passport printing contract is actually worth P38 billion over the next 10 years.

To complicate matters, APO seems to have another saboteur working against it from within the Aquino administration—or from one faction of it, to be more accurate. You see, APO and its sister firm, the National Printing Office, are both under the ambit of the Presidential Communications Operations Office (PCOO) run by Secretary Herminio “Sonny” Coloma. (Sec. Coloma, of course, belongs to “one side” of the Aquino administration and not the “other side”).

Anyway, Biz Buzz learned that, for the last three years, the Department of Budget and Management has been submitting to Congress a draft national budget omitting a key provision mandating that only Recognized Government Printers (RGPs) can print official “accountable forms” of national government agencies and local government units.

You heard it right. For some reason, DBM always “forgets” to include this key provision on RGPs, without which any private printer —capable or not, secure or not—can be tasked with printing accountable forms (and oh what a nice racket that would be).

Not even President Aquino’s imprimatur for this project can save it from internal saboteurs, it seems. And every year, APO has to expend valuable time and resources lobbying Congress just to reinstate that key provision that keeps being omitted “by accident,” we hear.

Well, we don’t blame them. P38 billion makes for a compelling argument. Daxim L. Lucas

Expensive village stickers

AYALA Alabang Village has jacked up the cost of its car stickers and nonresidents, especially those whose children are studying in schools inside the exclusive subdivision, are rightfully enraged.

A Buzzard told us that the Ayala Alabang Village Association (AAVA) recently tripled the cost of entering the subdivision’s gates to P2,500 per car from P850 previously. Since the village also enforces a strict color-coding system, a non-resident would have to buy two stickers to pick up their children in the village every day of the week.

There are seven schools inside Ayala alabang: De La Salle Zobel, Maria Montessori Foundation, Paref-Woodrose School, The Learning Child Advancement Inc., Institute for Child Development, Virgin Mary Immaculate School and Philippine Christian of Tomorrow.

Although the AAVA sticker increase is partly aimed at controlling the volume of outside vehicles going into the village, the move also presents a big windfall for the village association. De La Salle Zobel alone has more than 4,000 students in school year 2014-2015, of which close to 80 percent live around “Alabang gilid” or middle-class subdivisions in the area.

Aside from students, members of the Alabang Country Club are also expected to get a big hit from the prohibitive increase in car passes, according to our Buzzard.

Parents and club members are asking the Housing and Land Use Regulatory Board (HLURB) to investigate whether the village association was justified in its sticker price increase.

The Buzzard noted that Barangay Ayala Alabang regularly received a slice of the tax collections of Muntinlupa residents that it could have used to build wider roads to accommodate non-resident, middle-class families whose children were enrolled in schools inside the village. The Buzzard noted that most of the families inside the village send their children to more expensive schools such as Brent International School outside the village.

Barangay Ayala Alabang was formed 33 years ago by then President Ferdinand Marcos. Its first Barangay chair was the late Don Enrique Zobel with Gumersindo Leuterio, Benito Araneta, Edgardo Gatchalian, Mario Torcuator, Jaime Matias and Iñigo Zobel as the first council members. Gil Cabacungan

Merger called off

IT SEEMS to be the season for scuttled corporate mergers as of late. Biz Buzz has learned of a recent merger attempt between two retail giants that would have changed the complexion of their industry. These two giant brands are convenience store chains 7-Eleven, run by publicly listed Philippine Seven Corp., and Ministop Philippines, owned by the Gokongwei family.

According to our source, both local parties already agreed to the terms of the merger, which would have created a much larger chain of convenience stores. This comes amid the recent entry of Japanese convenience store chain FamilyMart.

Convenience stores play a vital role in the life of many urban dwellers. Situated in between big supermarkets and neighborhood sari-sari stores, convenience stores are popular among office workers, particularly those employed in the business process outsourcing (BPO) sector.

The 7-Eleven-Ministop merger would have involved a share swap between both parties. So what happened? From what Biz Buzz was told, either one or both of the foreign owners of both parties— 7-Eleven’s from the US and Ministop’s from Japan—refused to green light the deal. As far as we know, there were no billion-peso deposits involved unlike the scuttled GMA7-Ramon Ang talks, so at least for now, both camps can continue their rivalries with civility. Paolo Montecillo

Bigger colorum operator

THE INTERNET is on fire about the Land Transportation Franchising and Regulatory Board’s planned Uber/Grabcar crackdown, with a higher-than-average number of “open letters” circulating about. Our quick take on the issue is that rules are rules and they should be followed to the letter. But this item is not about Uber or Grabcar but another type of “colorum” operation.

It seems the government’s enforcement initiatives are coming up short in terms of curbing colorum UV Express operations south of Metro Manila. In fact, Biz Buzz sources in the industry—meaning legitimate UV Express operators—say one big group has been seizing a lot of business in the south, including the busy Lawton, Manila-Dasmariñas, Cavite route.

From how it’s described to us, it’s a pretty sophisticated operation worthy of a Mission Impossible-style enemy-syndicate—which could be why they have evaded lawmakers so well. It starts with dispatchers who gather passengers, then call in a van to load them in within a matter of minutes. As an added layer of protection, “spotters” onboard motorcycles do continuous patrols to monitor police movements and tip off the drivers. That sounds like a lot of overhead—not to mention whatever added “expenses” need to be paid along the way—but we hear this particular group operates hundreds of vans a week. Those revenues, plus the fact that they’re unregistered, means they have more than enough to cover their costs.

Apparently, this group has a preference for heavily tinted white vans, which are identified by a small, triangular sticker at the back. We hear that sticker, which is changed every now and then, has either a picture of a “Tiger” or that word spelled out so we’re calling them the Tiger group for this piece. It’s not only the south where this type of operation exists —up north is another operation known as the Smiley group, presumably because of the markings they use. How that name came about, we cannot imagine, but safe to say they’re laughing all the way to the bank. Miguel R. Camus

Book for shutterbugs

SOME very big names in business, the arts and politics are coming together for—you’d never guess: A book commemorating the 87th anniversary of the Camera Club of the Philippines (CCP).

Entitled “Intimate Images”, the book will carry pictures taken by contributing photographers, among them Jaime Zobel de Ayala, BenCab, Juvenal Sanso and former President Fidel Ramos.

Of course, CCP is the oldest and the only camera club in the country with a pedigree. Its members comprise a conglomeration of people from various backgrounds—students, professionals, executives, businessmen, doctors, lawyers, professional photographers—who consider photography not just a hobby, but a way of life. It is a club where religion and politics do not and will never pose a hindrance.

According to the group, “Intimate Images” is an ode to cultural accommodation, translation, transition and innovation. The photographs were taken using a variety of equipment, including large format cameras, rangefinders and DSLRs.

It is a collection of more than 200 photographs showing the Philippines as a nation in cultural metamorphosis. The images were taken by some of the country’s most talented photographers and prominent personalities from business and government. A portion of the book sales will be donated to the Philippine Cancer Society, thereby upholding the club’s philanthropic goals.

“A challenge in photography is to catch in one fleeting moment the excellence and nobleness of the human spirit. In that one instant, the photographer initiates an intimate image of understanding. It is that process of deep fathoming that this collection of photographs present,” said Felice Prudente Sta. Maria, project adviser, in describing the commemorative book that explores the value of affection.

Founded in 1928, CCP has weathered wars, the ever-changing political climate and the great camera migration from film to digital. Unlike other clubs, which have withered under these constricting environments, CCP managed to keep itself abreast with the times.

The book will be launched on Aug. 19 at the Hotel Intercontinental in Makati City. Interested parties can contact Karen Pamandanan at 0917-4293857 or drop by the CCP Center on the 5th Floor of Waltermart in Makati City. Daxim Lucas

More money, please

DFNN chair Tony Lopa says that the P27 million being considered to settle the dispute between his firm and the Philippine Charity Sweepstakes Office (PCSO) was not an offer made by the state lottery agency, but an award ordered by an arbitration panel, “which found PCSO to have illegally terminated DFNN’s equipment lease agreement.”

This amount is now the subject of a “petition for correction” before the Makati regional trial court—meaning DFNN wants a lot more—and, as such, “PCSO is not in any position to dangle the said award as a settlement offer to DFNN.”

To recall, DFNN made a pitch a few years ago to operate a mobile lotto betting platform for PCSO, which would solve the problem of long queues at lotto betting stations that extend to hundreds of meters (with long waiting times), especially when the prize money grows to the hundreds of millions of pesos. Had DFNN and PCSO seen eye to eye on this project, just about anyone with a mobile phone could make lotto bets on his or her phone instead of spending an hour waiting in line.

Lopa pointed out that DFNN’s contract was terminated by PCSO unilaterally in 2005 and not by the Aquino administration (though the present management and board of the lotto agency remains firm on its decision to have no dealings with DFNN in this regard).

For DFNN’s trouble, it wants PCSO to pay it not just P27 million, but a staggering P310 million in damages.

Lopa says that DFNN has consistently been upheld by the courts during this long dispute.

Finally, Lopa also says that he would never use his blood ties with his nephew, President Aquino, to sway the government’s decision in favor of his firm, and any suggestion that he will use his connections this way is an “unnecessary commentary and an unfair insinuation” that is “an affront” to him.

So, will PCSO be swayed by the arguments of the publicly listed firm? Let’s see. Daxim L. Lucas

Unification jitters

AFTER getting the consent of an overwhelming majority of shareholders of the Philippine Dealing System group on a takeover deal, there are two conditions that must be fulfilled for the Philippine Stock Exchange to be able to close the transaction. And it seems that getting them won’t be a breeze.

At the crux of the matter is for the Securities and Exchange Commission (SEC) to issue an exemptive relief order for the PSE to be able to acquire a controlling stake in the PDS Group. After all, the implementing rules of the local securities law prescribe that no single industry group can have more than 20 percent interest in a registered self-regulatory exchange and that no single person can own 5 percent. In this unification process with the PDS, the PSE is expected to get 94 percent of PDS (including the block held by Singaporean bourse SGX.) As such, it can only do so if the SEC will issue this exemptive relief.

The other condition is for the transaction to be cleared in line with the newly passed Fair Competition Act. Remember that the fixed income platform under PDS, Philippine Dealing and Exchange Corp. (PDEx) itself has a pending case at the Supreme Court on “monopolistic” concerns. There is no implementing framework yet for this new law but nonetheless, the PSE wants to be assured that this deal—which will lead to the unification of the capital market infrastructure—won’t be hounded by similar concerns later on.

Of the two, the first condition has become a tougher nut to crack, said people familiar with the transaction. The SEC—whose chief is one of the respondents to the lawsuit on PDEx—while supportive of the unification process, is weighing it carefully. As of now, it seems that a lot more explaining will have to be done by the PSE to get that exemptive relief. Doris Dumlao-Abadilla

Mövenpick enters Boracay

BUSINESS magnate Alfredo Yao’s Boracay resort Sol Marina will be rebranded as Mövenpick Resort Boracay as the Zest-O founder signed up the international upscale hotel management firm Mövenpick Hotels & Resorts to manage the beachfront property.

Yao, who is also a partner in budget carrier AirAsia Zest Philippines, said this was a “new exciting era” for the resort, citing Mövenpick’s “formidable reputation as one of Asia’s top resort operators.” This will be the second Philippine property to be managed by the international chain after businessman Manny Osmena’s property on Mactan Island, Cebu.

The beachfront property in Boracay is located northwest of the island on idyllic Punta Bunga Beach, famed for its white powdery sand and aquamarine waters.

Mövenpick Resort Boracay will comprise a cluster of three buildings nestled around the lagoon pool with most of the resort’s rooms and suites boasting sea views. It will have meetings and events facilities and a ballroom that can accommodate up to 450 guests for a seated dinner, three multifunction rooms and a boardroom.

The upscale 333-key resort property will start welcoming guests in December 2015. Doris Dumlao-Abadilla

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