BIZ BUZZ: Reluctant economic manager? | Inquirer Business

BIZ BUZZ: Reluctant economic manager?

/ 02:05 AM September 05, 2022

We were hesitant to believe it, initially, but the rumor simply refuses to die.

We’re referring to persistent talk that Finance Secretary Benjamin Diokno will only be spending a year at the Department of Finance, and that he plans to return to the central bank by the second half of next year.

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Biz Buzz has, by now, heard from several sources that the head of the Marcos administration’s economic team really enjoyed his abbreviated stint at the Bangko Sentral ng Pilipinas (BSP) and wants to end his long government career as the country’s chief banking regulator. Less headaches, plus the pay is better, we’re told. Much better.

We’re also told that Secretary Diokno was initially hesitant to accept the post of Finance Secretary and supposedly hemmed and hawed for a few days before finally saying yes to the President.

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In any case, the prospect of returning to the central bank is made easier by the fact that current BSP Governor Felipe Medalla only has a year in office, since he’s serving Diokno’s unexpired term.

Of course, if Governor Medalla manages to slay rampaging inflation, the President may just put the country’s best legal minds to work to find a way to extend his term or reappoint him to a fresh one (there’s a two-term limit to Monetary Board membership).

How will things play out? We’ll know for sure in a few months. Abangan!

—Daxim L. Lucas

Turning senior

It’s been a busier than usual time for the Ty family’s Metropolitan Bank & Trust Co.

Apart from running the country’s second-largest lender, its managers were occupied with preparations for its 60th anniversary.

That’s right, the banking giant founded by the late taipan George S.K. Ty gets its senior card on Sept. 5.

Kicking off the milestone event was the unveiling of a museum-like exhibit and the service awards for loyal employees in the company’s headquarters, the Metrobank Plaza in Makati City, last Friday.

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Scheduled and concluded in the morning before the bank opened for business, the awards honored 10 outstanding “Metrobankers” and 1,535 employees who have been with the company for the last 10, 15, 20, 25 and 30 years.

Leading the ceremonies were Metrobank board adviser Mary Ty, chair Arthur Ty, vice chair Francis Sebastian, president Fabian Dee and Metrobank foundation president Aniceto Sobrepeña.

The exhibit, meanwhile, is located in the Metrobank branch on the ground floor, allowing its regular customers to view a collection of historical photos and mementos through six decades of banking.

Some of the intriguing items include Metrobank’s first ever annual report—a handbook-sized publication that seemed to have less pages than some COVID-19 contact tracing forms—and original advertising materials from when it introduced its iconic “You’re in Good Hands” marketing campaign in the 1990s.

Metrobank chief marketing officer Digs Dimagiba said the throwback ad, while dated, remains relevant today.

“We’re just refreshing the feel of ‘You’re in Good Hands’,” he said. “It’s still what we stand for.”

Speaking of refreshing, what will become of the 45-year-old Metrobank Plaza?

Dimagiba said there were plans in the works but he refused to divulge any details. As the bank charts its future in the coming decades, all we can say on that note is … abangan!

— Miguel R. Camus

Unlocking Phinma’s value

With a market capitalization of just P5.3 billion versus an annual net profit exceeding P1 billion, Phinma Corp. is one of the most unappreciated conglomerates in the local stock market, despite its high return on equity of 14 percent — the best among its peers.

Lack of trading liquidity is a key reason why the company is overlooked by many. To date, the group’s privately-owned holding company, Phinma Inc., holds 82 percent of the shares. Understandably, the shares do not see much trading and are deemed by those who are now closely looking at the company to be “mispriced” given the quality of the group’s portfolio.

But soon the group will unload treasury shares as part of a restructuring exercise to unlock its intrinsic value, and is engaging its financial advisor, AB Capital, to place out those shares.

Equivalent to 5 percent of the company, the shares will be sold roughly at market price (the board approved a minimum selling price of P19.50 per share), which values the company at just five times this year’s earnings.

Notwithstanding the pandemic, Phinma is enjoying a renaissance of sorts. Unknown to many, its education arm, Phinma Education, has grown to be the country’s largest education provider, serving 94,000 students through nine schools and universities under its management and control. Enrollment this year is projected to hit 120,000 and breach 250,000 in five years. A series of acquisitions accelerated its expansion in recent years and the group has started expanding to regional markets, including in populous Indonesia.

Moving forward, Phinma will likely be an education play, allowing investors to ride on a “defensive” and predictable sector that benefits from the country’s favorable demographics.

Under its construction materials group, its cement comeback (a partnership with Vietnam’s Vissai group)—this time using an “asset-light” model that imports, processes, manufactures and distributes cement under its legacy brand “Union Cement”—has paid off as it now controls a market share of about 8 percent. This is also seen to contribute to the group’s earnings, along with the hospitality (with 15 hotel properties under the Microtel and TRYP by Wyndham brands) and housing businesses.

The placing out of a 5-percent stake may just be the start of Phinma’s thrust to widen its public ownership and catalyze investor interest, especially among foreign players.

—Doris Dumlao-Abadilla INQ

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