Biz Buzz: Port wars, redux
It should be clear to readers by now that plenty is at stake in the ongoing row between the Bureau of Customs, Philippine Ports Authority and Manila North Harbor Port Inc. (MNHPI) over actions taken in the dying days of the previous administration.
At the heart of the issue is the lucrative international trade in Manila controlled by the International Container Terminal Services Inc.-Asian Terminals Inc. duopoly amid the entry of Manila North Harbor that is now being challenged before the courts.
That entry was apparently allowed under recently enacted laws, led by the Anti-Cabotage Law, and orders from the BOC designating international port status to Manila North Harbor, which used to handle only the domestic side of the business.
Apart from business interests at stake, there is some degree of frustration from members of the duopoly—ICTSI, more specifically—over the turn of events.
The pro-ICTSI camp, speaking to Biz Buzz, said this stemmed from the charge that Manila North Harbor was seeking a slice of their international share, without first meeting its commitments to deliver modernized domestic cargo services, as required in their contract with the government.
Now, the concern is that if Manila North Harbor is given access to international cargo, the domestic side will be neglected further. In the Philippines, that apparently means domestic shippers are free to charge even higher rates. From what we’re told, less than half of Manila North Harbor’s port operations were considered modernized since MNHPI took over six years ago.
Another aspect that peeved them was the fact that they were paying fees and royalties exponentially higher than that paid by Manila North Harbor, since its contract was only for domestic cargo. This contract has yet to be revised to take into account recent events.
The situation bothers ICTSI because of the massive investments, perhaps even “over investments,” that owner and billionaire Enrique Razon Jr. poured into MICT.
A tycoon losing some business might elicit little sympathy from the public, but perhaps the point being made was that Manila North Harbor should also fully modernize services on the domestic side.
The issue, of course, is now with the courts as lawsuits have started to fly.
More recently, we heard MNHPI failed to secure a court injunction over a controversial order issued by previous PPA head Raul Santos barring port offices, harbor pilots and shipping lines/agents from handling foreign cargo at Manila North Harbor.
The legal battle is far from over. What happens next is how the court rules, and ultimately, how the Duterte administration feels about the issue. And that’s always a wild card. Miguel R. Camus
San Miguel vs. PSALM
IF YOU think the dispute between San Miguel’s energy unit and Power Sector Assets and Liabilities Management Corp. is over, think again.
Yesterday, San Miguel Global Power—through South Premier Power Corp. (SPPC)—said PSALM’s claims of the conglomerate having unpaid obligations for the generated capacity of its Ilijan power plant were nothing less than “erroneus.”
In fact, by San Miguel’s reckoning, it had already paid the government P159.7 billion as of April 2016.
San Miguel said this dispute was the reason it sued PSALM last year: “To seek justice from the court, clear the confusion and set the facts straight.”
“We have been diligently paying PSALM what is due them,” the conglomerate said, adding that it didn’t owe the state-run firm a single centavo more.
“SPPC has fully paid all its obligations under its Independent Power Producer Administration Agreement with the government” San Miguel said.
In September last year, San Miguel’s power unit filed a case against PSALM due to “willful breach of contract arising from what SPPC believes is a flawed interpretation of certain provisions related to its generation payments under the Ilijan IPPA agreement.”
The case also sought to stop PSALM from “illegally terminating” SPPC’s Ilijan IPPA and treating it as an “administrator in default.”
So far, the courts have ruled in favor of San Miguel. It first issued a three-day injunction, and then a longer term preliminary injunction preventing PSALM from terminating the Ilijan IPPA deal while the case was pending.
San Miguel warned the illegal termination could lead to higher electricity prices, as PSALM reportedly plans to trade the output of Ilijan on the Wholesale Electricity Spot Market.
Of course, PSALM is chaired by the sitting Secretary of Finance, and it was then Finance Secretary Cesar Purisima who was its head honcho when the dispute erupted. Will both sides have better relations now that Finance Secretary Carlos Dominguez is sitting as PSALM chair? We’ll know soon enough. Daxim L. Lucas
Security Bank on top
AFTER years of naming much bigger banks in the Philippines as the best in the country, London-based publication Euromoney cited Security Bank Corp. as the Philippines’ “Bank of the Year” during the Euromoney Awards for Excellence Asia 2016 held on July 14 in Hong Kong.
The accolade was that much sweeter as it came just a day after Security Bank celebrated its 65th anniversary.
Security Bank was named best bank, “rather than previously dominant BDO Unibank, reflecting the mid-sized institution’s exceptional progress in recent years,” Euromoney said in an article released to its stakeholders.
It topped other Philippine banks in such metrics as return on assets, cost-income ratio, nonperforming loan and nonperforming loans coverage.
Plus, Euromoney decided to make some changes to the categories in the Awards for Excellence to reflect the “dynamic landscape” of the business.
Thus, this year’s winners in the domestic market category were banks that “combined innovation and business strength with a clear plan for dealing with difficult problems around asset quality in the years ahead.” Tina Arceo-Dumlao
Momentum reversal
AFTER being bludgeoned last year by the phenomenal “Aldub” love team of Alden Richards and Maine Mendoza on GMA-7’s “Eat Bulaga,” ABS-CBN’s “It’s Showtime” appears to have stumbled on the antidote to the Aldub fever.
Based on Kantar Media’s national TV ratings covering urban and rural homes, ABS-CBN’s noontime show achieved a rating of 18.2 percent for the entire month of June, beating Eat Bulaga’s 12.9 percent. “Showtime” emerged victorious even against last Saturday’s first anniversary celebration of AlDub, obtaining a rating of 19.7 percent versus Eat Bulaga’s 15.9 percent still based on Kantar data. On the same day, hit singing competition “Tawag ng Tanghalan” introduced veteran singer Jaya as one of its judges.
Kapamilya folks claim not only to have weathered the storm but staging a strong comeback this year. They credit this to efforts by the noontime show to keep segments “fresh, inventive and dynamic.”
In the meantime, ABS-CBN is likewise jubilant that the high ratings of “FPJ’s Ang Probinsyano” had held up even with the much anticipated launch of fantasy series “Encantadia” reboot on July 18. Some skeptics earlier thought the new competitor would gnaw on the ratings of “Probinsyano,” which registers 40 percent ratings on most nights.
However, the rating of this Coco Martin starrer has remained at the top of the heap with a 42.4 percent rating so far versus “Encantadia’s” 21 percent, likewise based on Kantar ratings. (But the AGB Nielsen survey shows a different story: that “Encantadia” was in the lead, at least for Urban Luzon).
So the tide may have turned, but the battle isn’t over. Doris Dumlao-Abadilla
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