Biz Buzz: Biggest losers and winners

MINING—which provides revenue to the government amounting to billions of pesos each year, as well as direct and indirect employment to thousands of Filipinos—turned out to be last week’s biggest loser (in the stock market, at least) from last week’s announcement that Gina Lopez would be the country’s next environment secretary.

The biggest winner on the day Lopez announced her acceptance of the post, in contrast, were Lopez group stocks whose values on the Philippine Stocks Exchange (PSE) soared on the very day the values of mining and oil stocks tumbled.

Philex Mining Corp., the country’s biggest mining firm, lost 22 percent of its value, equivalent to P10 billion over two days last week, much to the consternation of its chair, Manuel Pangilinan.

The fear in the mining and oil sector, of course, is that the staunchly antimining Lopez, in her capacity as chief of the Department of Environment and Natural Resources, would make it difficult even for environmentally responsible mining companies to operate in the country.

Also hard hit, indirectly, were members and pensioners of the Social Security System (SSS) since the state-administered pension fund owns 21 percent of Philex. That makes SSS members P2.1 billion poorer since Lopez’ appointment.

Semirara and Nickle Asia lost P11 billion and P4 billion in value, respectively, while Lepanto Consolidated Mining, Apex Mining and Manila Mining Corp. also reported significant losses.

It goes without saying, of course, that mining industry stakeholders believe that Lopez is bad news for them, along with the sector of the economy and thousands of Filipinos who depend on mining.

Also a potential victim is the government which stands to lose billions in revenues should the mining industry grind to a halt under Lopez.

Meanwhile, Lopez family-controlled stocks gained sharply during the same period. First Gen Corp. gained P9 billion while Energy Development Corp. gained P8 billion in market value. Coincidence? Daxim L. Lucas

PTV-4 news chief

VETERAN broadcaster Charie Villa has accepted an offer from incoming Communications Secretary Martin Andanar to become the news head of the state-owned People’s Television Network (PTV-4). This news channel is of course expected to become a very important platform under the term of President-elect Rodrigo Duterte, who has had a turbulent relationship with journalists.

Villa—formerly the head of ABSCBN’s news and online business regional group (a freelancer starting December 2014)—told Biz Buzz that she had accepted the post as this was in line with her advocacy to give Filipino citizens a venue to talk to government. Together with friends Vangge Giorgetti, Mao Olidan, Lester Cruz, Deane Miguel and Melissa Dela Merced, Villa set up taopo.org (“Tao po” is what Pinoys typically say when knocking on doors) in 2010. From Villa’s reckoning, this initiative received lukewarm response from the outgoing administration.

“I told Martin about Tao Po and my hope that this government would be a responsive government,” Villa said, adding that Andanar liked the idea and went on to say that he wanted to rebuild PTV-4 into a real public information hub, like BBC with a mix of reality news like Vice News.

Villa’s idea is to groom PTV-4 into the quintessential public information source which will be funded by people’s money, including license fees, and not relying on advertising revenues. TV owners were required to pay license fees to sustain BBC while the government pitched in funds.

Thus, the dream is for PTV-4 to become a real public news system. “It is something I have longed for: To create informative and useful programs on air and on line not for ratings nor political affiliations, but for the interest of the public,” she said.

Villa, a UP Broadcast Communications graduate, brings to PTV-4 three decades of experience in broadcasting. Apart from working as a Kapamilya, Villa had worked as a senior producer for Reuters News for about eight years. Doris Dumlao-Abadilla

IMI revamp

LONG-TIME Integrated Micro-Electronic Inc. (IMI) president Arthur Tan stepped down as president of the Ayala group’s manufacturing arm on June 23. Based on a disclosure, this was part of an “organizational movement.” John Eric Francia, who leads Ayala Corp.’s infrastructure and energy group, has also stepped down as director of IMI effective the same date.

Based on the disclosure, Tan will be succeeded by Gilles Bernard, who had been global chief operating officer and senior managing director at IMI since early 2014. He also served as CEO and COO of Epiq NV—the Brussels-based company with factories in Bulgaria, Czech Republic and Mexico—which was bought by the Ayala group in 2011.

Why now when IMI is busy with manufacturing deals (particularly the sub-contract to produce KTM motorcycles)? We’ve been hearing about this movement for quite sometime. From what we hear, Ayala has other plans for IMI. This lateral movement, thus, could be a precursor to a major merger and acquisition deal.

Meanwhile, we hear that Tan will be assigned back to parent Ayala Corp. with wider responsibilities, which will still include the manufacturing business under IMI. With the group making a bigger bet on manufacturing and more specifically on the automotive industry, Tan will have a lot more on his plate. Doris Dumlao-Abadilla

Legal battle looms

IT’S ALMOST the first “monthsary” since Globe and PLDT joined forces to acquire San Miguel Corp.’s telco unit but uncertainties still hang over the transaction.

Of course, a lot of that had to do with the Philippine Competition Commission first questioning the manner the transaction notice was filed, before eventually saying it would review the whole deal for any anti-competition violations.

If the matter seems confusing until today, that’s mainly because the parties themselves—PLDT and Globe, as well as the PCC—are approaching this issue from entirely different perspectives.

For one, the telco duo launched the P70-billion acquisition citing the PCC’s own transitory rules, or guidelines covering deals launched after the Philippine Competition Law become effective last year, but before its implementing rules took effect, which was just last week.
Under those transitory rules, the PCC only had to be notified of transactions valued at over P1 billion via a notice, which should contain all the relevant and truthful information.

PLDT and Globe, which wanted to free up SMC’s valuable but unused radio frequencies to improve internet services, say they did just that. So for them, the deal should get automatic approval. They also returned to a portion of the acquired frequencies.
The PCC, on the other hand, has taken a very different view.

PCC Chair Arsenio Baliscan specifically noted that the spirit of the law was very much alive when the SMC acquisition was announced. He told Biz Buzz “it is not an ordinary case” and it was their mandate to look into it given its long-term repercussions. He noted he was also surprised that PCC wasn’t given more time to digest the transaction before it was sealed.

In any case, that’s all the PCC is saying it would do at this point, which is to review the acquisition, which came soon after SMC’s talks with Australia’s Telstra Corp. Ltd. broke down.

Of course, a lot of things have happened since the deal was announced.

Money has changed hands, assets have been sold to finance parts of the transaction in the case of PLDT, and both telcos say they’ve started to utilize the acquired radio frequencies.

Lately, PLDT and Globe have grown frustrated over the PCC’s refusal to enter into a dialogue, although the government antitrust watchdog said it was not time yet for any discussions. That comes after the review, Balisacan said.
With such uncertainly hanging, it won’t be surprising if things soon take a legal turn. We’ll watch this space closely. Miguel R. Camus

Money changers score

THE LOCAL money changing industry took a major hit in recent months in the wake of the $81-million money laundering scandal that swept across the Philippine banking system.

Transaction volumes for many of them shrank to a trickle where there once was a gushing fountain of dollars moving to pesos, and pesos moving to dollars.

But the tide may have turned.

Biz Buzz learned that a Makati court last week handed the money changing industry a win by stopping one of the country’s largest banks from unilaterally severing ties with two large money changers.

We’re talking, of course, about Metropolitan Bank and Trust Co. which last May ordered MG Forex Corp. (owned by the famous Michael Guy) and GAP Forex (of Rolando Medestomas) to close their accounts with the bank.

Well, not so fast said presiding judge Elpidio Calis of the Makati Regional Trial Court. He granted both MG Forex and GAP Forex a writ of preliminary injunction which essentially stopped Metrobank from closing the accounts in question (in exchange for the petitioners posting a P10-million bond, which they did).
What remains to be seen is whether banks and money changers can learn to coexist once more … or if the money laundering scandal has permanently damaged what used to be a mutually beneficial relationship. Daxim L. Lucas

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