Biz Buzz: From enemies to friends
“There are no permanent friends or enemies, only permanent interests,” as they say in politics. But this old adage seems to have been spreading, slowly but surely, from the political arena into the business scene in recent times.
Note for example the surprisingly cozy ties between former mortal enemies UST law dean Nilo Divina and Cebu businessman-politician Winston Garcia.
Just a decade ago, the two gentlemen found themselves on opposing sides for the control of what was then the country’s third-largest bank, Equitable-PCI Bank. Divina was then the bank’s corporate secretary allied with its previous owner Antonio Go, while Garcia was the head of the Government Service Insurance System, which had allied itself with the SM group’s hostile takeover bid for the bank (back then crippled by a P30-billion bank run in the wake of the scandal surrounding the impeachment of then President Estrada).
As the bank’s corporate secretary, Divina was on the frontline of the Go family’s defenses against the takeover. After all, a corporate secretary controls board and stockholders’ meetings by determining who can and cannot vote. Garcia, on the other hand, controlled billions of pesos in government pension funds which could tip the boardroom battle to whomever he sided with.
Needless to say, Divina and Garcia found themselves in verbal sparring episodes before the media at the height of the controversy.
But what a difference a decade makes.
Today, Divina— who runs the Divina Law firm in Makati in addition to wearing his UST law dean hat — is the lawyer for the pugnacious Garcia in the latter’s case with the Sandiganbayan over the controversial GSIS ATM cards issued to members in 2005.
The unlikely Divina-Garcia team won that case a few months ago when the Sandiganbayan ruled that government prosecutors simply took too long to file a complaint over something that happened a decade ago.
The Sandiganbayan pointed out that despite there being complete records of the deal between GSIS and Unionbank for the ATM cards, it took investigators from the Ombudsman six years to move the case forward, with no activity happening in between.
And just a couple of weeks ago, Divina and his 48-lawyer team recently won another round for Garcia when the Sandiganbayan threw out the prosecutors’ appeal, thus cementing the win of the Cebu politician.
The win also seems to have further cemented ties between the two gentlemen as Divina recently acquired prime property on Mactan Island in Cebu at the invitation of his former nemesis, Garcia.
And speaking of former nemeses, the fast-growing Divina law office also acquired its Makati office space at “friendly rates” from another former boardroom enemy — the SM group.
Truly, there are no permanent friends or enemies. Only permanent interests.Daxim L. Lucas
Staying put
BRITISH banking giant HSBC has been doing business in the Philippines for 140 years, being one of the first foreign banks to set up shop here. But it hasn’t been spared from occasional rumors that it might abandon this market.
There were such rumors in 2012 which resurfaced a few days ago when a wire report identified the Philippines—notwithstanding its new bragging right as the region’s fastest growing economy (now beating even China)—as among the markets that HSBC would allegedly divest from (along with Algeria, Bangladesh, Brazil, Brunei, Lebanon, Macau, Sri Lanka, Turkey and Uruguay).
We asked HSBC country chief Wick Veloso about this and he vehemently denied it, adding that the group had even beefed up onshore retail banking operations.
“HSBC is not exiting its retail banking operations in Philippines. In fact, we have recently appointed our new head of retail banking and wealth management, Kris Werner, who brings with him a broad range of experiences, having managed the retail banking and wealth management business in Qatar and Vietnam,” Veloso said.
“Kris will focus on the very promising Philippine market. With over 140 years of presence in the Philippines, HSBC remains committed to the Philippines. Our retail banking business is a key competitive strength at the heart of our strategy.” Doris Dumlao-Abadilla
Speaking of which…
HSBC recently concluded a “new and improved” version of a credit card promo that gave the bank nightmares back in 2012, and cost a number of their marketing team members their jobs.
Yes, we’re talking about the UK-based banking giant’s tie up with Hong Kong’s Cathay Pacific. Basically, HSBC cardholders who spend at least P70,000 during the promo period will be entitled to P1,000 in SM gift certificates; those who spend P85,000 will get P2,000 in SM gift certificates; those who spend P100,000 will get a Manila-Hong Kong-Manila roundtrip ticket via Cathay Pacific, and those who spend at least P120,000 will get two Hong Kong roundtrip tickets.
From all indications, the promo was a success. It encouraged more people to sign up for HSBC credit cards, and also encouraged existing credit card holders to spend more in order to avail themselves of the prizes (which were computed electronically, and relayed to winners via SMS with a corresponding code that had to be scanned at the Cathay Pacific office for the prize to be redeemed).
Contrast this “new and improved” system to the poorly designed original in 2012 where the bank required cardholders to simply present credit card receipts with at least P10,000 in charges to qualify for the promo. Some cardholders promptly asked merchants to break down the billing receipts for big ticket transactions into denominations of P10,000 each (for example, five separate receipts for a P50,000 appliance purchase). The result was a massive additional expense for HSBC which had to pay for their cardholders’ trips on Cathay Pacific not just to Hong Kong, but also to the US and Europe (ten P10,000 charge slips was enough for a US trip).
Thankfully, HSBC learned its lessons well, and this year’s promo was guarded tightly against “enterprising” cardholders. Despite the tightened control regime, Biz Buzz learned that “thousands” of HSBC cardholders managed to avail themselves of the free Hong Kong trips… but legitimately, this time.
Next up, we hear HSBC will expand the program to include other destinations served by Cathay Pacific. But like this recently concluded promo, cardholders looking to take advantage of loopholes are still not welcome. Sorry, guys. Daxim L. Lucas
Baptism of fire
TEN years ago, then neophyte Sen. Antonio Trillanes IV—together with the soldiers facing coup d’état charges in connection with the 2003 Oakwood Muntiny—stormed out of the courtroom and headed toward Manila Peninsula to call for the ouster of then President Gloria Macapagal-Arroyo.
It was on that same day of the infamous Peninsula siege that the first ING-Financial Executives Institute of the Philippines (Finex) “CFO of the Year” award was launched.
As Sen. Trillanes and Brigadier Gen. Danilo Lim entered the Peninsula Hotel Manila at 11 a.m. on Nov. 29, 2007, hotel guests had to vacate using the employees’ gate. All events in the hotel were cancelled, including a dinner wedding reception which had to be hastily rebooked in another hotel. Due to the Peninsula stand-off and heightened political tension (which some people feared then could turn violent), the first CFO of the Year Award ceremony that was booked at the nearby Shangri-La Hotel Makati was likewise called off by mid-afternoon.
But by 6 p.m. that day, Trillanes and company surrendered to the authorities. Only then did Globe Telecom CFO Delfin Gonzalez give the go-signal for the awards ceremony to push through that evening. Family, friends and guests of Gonzalez (the first ING-Finex CFO of the Year awardee) and Finex members had to pass through several military checkpoints on the way to Makati City.
This annual search for the “CFO of the Year” — which aims to put outstanding chief finance officers (CFOs) on the spotlight and make them more conspicuous role models — has since become the longest running award of its kind in the Philippines. It has so far produced an exemplary pool of nine CFO awardees, who represent companies with combined market capitalization of more than P3.3 trillion.
Nomination for the 2016 award was formally opened last June 15 and will end in September. The award ceremony will be held on Nov. 23 at Makati Shangri-La… the very same venue where it had its baptism of fire.Doris Dumlao-Abadilla
Steel prices start falling
WHEN news that some 5,000 metric tons of steel bars from China were ordered released in Subic — after paying the correct duties and passing quality tests, of course — contractors noted a sharp drop in the price of reinforcing steel bars, particularly in the 12 mm category.
Talk in construction industry circles indicate that from the regular price of P34-P32 per kilo up until May, the price of rebars dropped to as low as P24-P25 per kilo in June, just as the China steel bars were released from the Bureau of Customs’ custody.
The price slash was a welcome relief for contractors and consumers. They took it as a sign that competition is truly healthy and beneficial to end-users. However, the market elation was short-lived. While there was an almost 30-percent decline in 12 mm rebar prices coinciding with the arrival of imported steel, contractors noted a spike in the price of other rebar sizes in the local market.
Conspiracy theorists believe there were “unseen hands” behind the seemingly predatory price drop to slay industry newcomers, while the general consensus seem to favor the view that it is simply market forces at work.
Whatever the reason for the market’s seemingly cartel-like pricing behavior, bulk rebar users look forward to happy days ahead with the anticipated arrival of more imported steel. After all, it is a generally accepted economic principle that more competition = better prices = happy consumers. Daxim L. Lucas
Change is coming… to PPP
AS the Inquirer reported, the man being eyed by the Duterte administration to head the Public-Private Partnership (PPP) Center is former Holcim Philippines executive and UP engineering alum Ferdinand “Boyet” Pecson. But Biz Buzz sources confirmed that former acting Justice Secretary Alberto Agra was supposedly also lobbying to become PPP Center executive director.
Agra, who served as interim DOJ chief under former president Gloria Arroyo, had marketed himself in the past as a PPP specialist. But our sources noted that no less than Neda Director-General Ernesto Pernia had said that “he’ll put his guy” in the Neda-attached agency.
Also, sources were curious if Agra would agree to settle for a non-Cabinet position.
“PPP Center executive director is undersecretary rank. [Agra] may want to amend EOs 8 and 136 to raise the rank to Secretary level. But if the executive director is Secretary level, it will be weird if he reports to the Neda Secretary. They might as well transfer the PPP Center under the Office of the President,” a source noted.
When asked who will be the next PPP Center chief, Pernia told Biz Buzz: “I’m still deciding,” with the announcement likely “after” President Duterte’s State of the Nation Address.
As for former PPP Center head Andre Palacios, he sent reporters a thank you note over the weekend as his short term ended last June 30.
“My successor is now onboard, and I have accomplished my task to help with the transition… Thank you for your support to the Philippine PPP program. It was a pleasure to work with you, and an honor to lead the PPP Center during the closing months of the Aquino administration. I will continue to support the Philippine infrastructure program, especially the proposed PPP Act,” said Palacios.
Asked by Biz Buzz what he would do after his stint at PPP Center, Palacios said he would teach at UP College of Law starting next month while also practicing law and doing consultancy work. Ben O. de Vera
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