Biz Buzz: PH-Korea ‘err’ talks
MEMBERS of the Philippine air panel are set to meet their Korean counterparts in Puerto Princesa starting tomorrow, Nov. 10. On the agenda: Possible expansion of the existing bilateral err—or rather “air”—service agreement between the two countries.
With Korean tourists representing the biggest chunk of foreign visitors to the Philippines, it only seems prudent and logical to further increase available airline seats. Or so we thought.
As it stands, the Philippines and Korea have an existing 4 million seat entitlements a year, but only 3 million of which are actually used. The rest—or about a quarter of available capacity—are just on paper and not yet being “flown” by the carriers of each country.
Even direct or charter flights to secondary gateways like Puerto Princesa can’t be used as justification for increasing seat entitlements. The available 1-million excess seat capacity is more than enough to be used by Korean and Philippine carriers to fly to any point in the Philippines, and vice versa.
Some members of the multi-agency air panel were therefore surprised when new air negotiations was reportedly requested by the Department of Tourism even though no such request was reportedly forwarded by the government of South Korea, its carriers and their local counterparts.
So what gives with this hastily called air talks?
Biz Buzz sources claim that the air negotiations are but a ruse to hide the true intention of further expanding capacity to Manila’s congested and packed-like-sardines main gateway at Naia. But the prospect of getting into South Korea’s good graces is, apparently, a temptation too difficult to resist. After all, South Korea has been repeatedly pictured as one of the biggest poachers of Filipino airline passengers bound for the United States.
Since the early ’90s, South Korea was one of the few countries that aggressively pursued air liberalization with the Philippines. It’s not simply because the archipelago is a favorite destination of Koreans, but more because of the millions of outbound Filipino workers that Korean carriers can make money from.
The ruinous competition allegedly spawned by a series of lopsided air agreements forged by Philippine negotiators in favor of foreigners are putting existing and soon-to-be established Philippine carriers at great disadvantage.
The forthcoming talks are, therefore, another litmus test for the country’s negotiators. But as they say, “to err is human, to forgive divine.” Daxim L. Lucas
Poor planning, poor execution
AS WE are all painfully aware by now, project execution isn’t exactly the forte of the present dispensation.
Not too long ago, the Aquino administration bid out the Ninoy Aquino International Airport Expressway with the stated goal of having the elevated tollroad ready in time for the Asia-Pacific Economic Cooperation (Apec) leaders’ summit.
Well, the Apec summit is upon us and the NaiaEx project is nowhere near completion. According to our sources, the tollroad is now at least a year behind schedule.
The culprit? A lack of of political will on the part of the government to settle the right-of-way issues that is halting construction at several spots along the project’s 7-kilometer route.
What’s worse is that, on top of being unable to deliver right-of-way access from private property owners, the Department of Public Works and Highways is also powerless to take control of a crucial section of Villamor Air Base presently occupied by the Philippine Air Force Museum.
Investors are now wondering why these two government instrumentalities can’t agree on vacating the needed areas.
The Philippine Air Force is also a major roadblock to the progress of another key infrastructure project, the Mactan Cebu International Airport terminal (being built by Megawide Corp. and Indian firm GMR).
For the Cebu project, the air force has refused to turn over their land despite it having been cleared and identified by the government early on. But the government is obligated to identify a suitable relocation site for the large tarmac of the Benito Ebuen Air Base adjacent to the current MCIA—something it has, as yet, been unable to do.
Investors and creditors are now wondering why these issues cropped up only after the projects were awarded (causing long and costly delays).
It’s bad enough that the agencies of the Aquino administration can’t execute properly. Can’t they plan properly, as well? Time is money. Frustrated investors want to know what’s going on. Daxim L. Lucas
THE ALCANTARA family’s Alsons Consolidated Resources Inc. (ACR) was the subject of some speculation in recent weeks leading up to a Nov. 6 board meeting when the potential entry of new investors was supposedly set to be tackled.
Apart from the company’s nine-month earnings results, however, the company had nothing juicy to disclose out of last Friday’s board meeting.
But in the next few weeks, the company is expected to foray into the local debt market by selling as much as P7.5 billion in bonds to selected institutional investors. Dutch financial giant ING Bank is working as bookrunner and underwriter of this offering of corporate notes, which will have a base offer size of P6 billion plus P1.5 billion in overallotment.
For now, ACR is keener to sell debt rather than equity to fund large-scale expansion plans, including those in the power sector. Doris Dumlao-Abadilla
Full blown telco war
ON THE telecommunications front, some readers might have recently been hearing of a certain magical number that will supposedly solve their “slow Internet” woes.
We’re talking about that 700 Megahertz frequency that has been rather prominent in the news, after rivals Philippine Long Distance Telephone Co. and Globe Telecom urged the government anew to give them their fair share of this scarce asset.
We understand the frequency would give them the ability to deliver better and more efficient mobile high-speed Internet services.
The catch, of course, is that most of the spectrum is held by conglomerate San Miguel Corp., which we all know is in serious talks to bring in Australian telecommunications giant Telstra as partner to compete with both incumbents as early as 2016.
Both PLDT and Globe have made statements on how this 700 MHz would benefit subscribers—we don’t doubt that. The timing is just interesting since it came days after executives at Telstra, which has had its fair share of criticism back home, made its own stinging remarks on the quality of telco services here.
We don’t expect government’s policy on the allocation of this key frequency to change anytime soon with everyone busy with the upcoming election season. But if recent events are indicative of anything, that telco war that could be triggered by the entry of a new player may already be underway. Miguel R. Camus
YOUNG actor and athlete Matteo Guidicelli has agreed to lend his popularity to a good cause by becoming the face and voice of the anti-investment scam advocacy launched by the local asset management unit of Sun Life of Canada.
Sun Life Asset Management Co. Inc. (Slamci) president Valerie Pama said during the launch of Slamci’s “slam the scam” campaign last Wednesday that the group handpicked Guidicelli to personify this advocacy because the 25-year-old celebrity “manages and invests his money wisely.” A year before Guidicelli signed up for the project, he was already a client of Sun Life group on the life insurance side of the business and now intends to invest in some of Slamci’s mutual funds as well.
The half-Italian actor stars in a series of educational videos produced by Sun Life that share tips on how to spot an investment scam. Sun Life summed up its battlecry in an acronym “BRIGHT”—the six things that an investor must look for in determining whether an investment firm is legitimate or not. BRIGHT stands for: (B) brick-and-mortar (having physical office like any reputable firm); (R) registered with the Securities and Exchange Commission, (I) has integrity, (G) is grounded on reality (if it’s too good to be true, it must be a scam), (H) honest and (T) trustworthiness.
As earlier reported, one in every 100 Filipinos or about one million hapless Pinoys have already been victimized by various investment scams, mostly in the form of get-rich-quickly pyramiding and Ponzi schemes that have wiped out over P25 billion in hard-earned money to date. Doris Dumlao-Abadilla
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