Eight months after the renegotiation of a new contract for the operation and management of the country’s longest expressway, Subic-Clark-Tarlac Expressway (SCTEx), it seems that the group of businessman Manuel V. Pangilinan (aka MVP) is still nowhere close to getting Malacañang’s imprimatur. The contract has been signed last year but hasn’t taken effect in the absence of such an approval.
During a recent Cabinet meeting, industry sources said the Department of Finance had raised qualms about the SCTEx framework and wanted to seek better terms for the government. In particular, the DoF is seeking a fixed share of the revenue during the life span of the tollroad concession. The 33-year SCTEx concession is based on certain projections on cash flow and capital spending requirements which, in turn, use certain vehicular traffic assumptions but the risks are born by the private sector.
One government source privy to the matter believes the existing contract is already “advantageous” to the state. “The only question is, how advantageous does government want it to be?” the source says.
In any case, our industry sources said the fresh review on SCTEx terms sought by the DoF could mean that toll-road developer Bases Conversion Development Authority and MVP-led Metro Pacific Investments Corp. (which controls Manila North Tollroad, the firm that is supposed to handle the SCTEx concession) may have to return to the drawing board. Rebidding is seen as a remote risk, and so is a courtroom battle.—Doris C. Dumlao
Back in the game
Remember former Tourism Secretary Alberto “Bertie” Lim?
He was one of the staunchest supporters of then Senator Benigno Aquino III during the 2010 presidential campaign and was appointed to the Cabinet, but had to leave after the “Pilipinas Kay Ganda” brouhaha.
Well, he’s back in the government. Biz Buzz learned that Lim was recently appointed by Malacañang to the board of Development Bank of the Philippines. This was confirmed by Lim himself, who told us that he is now handling the bank’s risk management committee.
He replaces Franklin Velarde—son of evangelist Mike Velarde—who “resigned” for some unspecified reason. Of course, Velarde was an appointee of the Arroyo administration, but was reappointed by President Aquino soon after he took office.
The other relative newbie to the DBP board (appointed a few months ago) is lawyer Blas Viterbo who used to be the legal chief of Transportation Secretary Mar Roxas when he was still senator. Viterbo replaced Ronald Llamas (yes, he was on DBP’s board), who is now “busy with other things.”
Should be interesting to see how things at the bank progress henceforth.—Daxim L. Lucas
GT stands for good timing
The “GT” in GT Capital Holdings of course stands for the name of family patriarch George Ty. But First Metro Investment Corp. president Jojo Dispo says this acronym also means “grand tradition” (of competence, professionalism and commitment), “great transaction,” “good timing” and “gains in trading.”
Not only is GT Capital the first to debut on the stock exchange in 2012, it is also the first to do so when the Philippine Stock Exchange index hurdled the crucial 5,000 mark.
During last week’s road show, some investors were taken aback when it was estimated that GT Capital’s initial public offering price range of P415 to P470 per share had valued the holding company at 21 times its earnings in 2011. It turned out that this wasn’t accurate because, based on attributable net earnings, the 2011 price-to-earnings (P/E) ratio was only in the low-teens. And based on an estimate by UBS Securities research (the deal’s global arranger), the price range translates to a 2012 P/E ratio of between 11.9 and 13.4 times, representing a sharp discount to where local stocks and specifically conglomerates are trading at present.
GT Capital’s biggest selling point is its diversified exposure to growing sectors of the Philippine economy like power generation (Global Business Power), banking (Metropolitan Bank and Trust Co.), real estate (Federal Land Inc.), automotive (Toyota Motor Philippines) and insurance (Phil AXA Life Insurance Corp.).
“It’s like investing in a mutual fund. If you don’t want to get into individual stocks, get into the holding firm representing the complete spectrum of the economy,” Dispo says.
But apart from raising fresh funds for group-wide expansion, especially for power and real estate, this stock debut effectively lifts the burden from Metrobank of being the de facto holding company for the entire group (as it has been for years) by consolidating nonfinancial assets into a publicly listed holding firm. That only further strengthens Metrobank’s position in the upcoming era of Basel 3 global adequacy ratio requirements.—Doris C. Dumlao
A different mining meeting
Not a few people were left wondering why the Makati Business Club did not participate in the recent mining forum sponsored by the Philippine Chamber of Commerce and Industry, the Management Association of the Philippines and the Financial Executives Institute of the Philippines.
Indeed, the MBC was supposed to be part of the group but, according to our sources, had pulled out as the date of the highly charged event neared. In fact, some had theorized that MBC’s nonparticipation was due to its longstanding, long-running, silent rivalry with PCCI (both organizations have often found themselves on opposite ends of the political spectrum in recent years, but not of late).
Officially, MBC pulled out of the mining forum because it disagreed with the format to be used.
Well, the MBC finally got to sink its teeth in the controversial mining issue when it hosted a closed-door meeting between pro and anti-mining groups last Thursday at the Asian Institute of Management.
Present during the “no holds barred” meeting were Philex Mining chair Manny Pangilinan (the industry’s new champion) and Nickel Asia president Gerry Brimo, representing the mining sector. The anti-mining groups were represented by, among others, Christian Monsod and World Wildlife Fund country head Lory Tan. The discussions were observed by the government’s representative, former Natural Resources Secretary Elisea Gozun. The meeting was facilitated by MBC chair Ramon del Rosario Jr.
And what was the outcome? Nothing yet, as both sides remained worlds apart on several key issues. There was one positive note, however, which both sides agreed on: to talk again.—Daxim L. Lucas
Catholics and Communists
Speaking of mining, leaders of the Catholic Church at the local level have been vocal opponents of the mining industry, with many priests believing that mining firms are exploiting the environment without giving back enough to the communities they are supposedly exploiting.
But how far is the church willing to go in opposing mining? Some industry leaders are wondering whether their opposition goes to the point of condoning violence against mining firms in the provinces.
In particular, mining industry supporters are wondering why the Church has failed to condemn attacks by Communist rebels on mining operations, like the NPA attack a few months ago on the operations of the Taganito mines of Nickel Asia in Surigao del Norte.
The attack rendered the mines inoperable and resulted in the loss of livelihood for thousands of workers. But not a sound was heard from local Church leaders.
Mining industry supporters point out, in fact, that one Catholic news website called Cathnews has become a bulletin board of sorts for the Left, frequently carrying stories about rebels’ activities.
Well, the Church and Communists may have different views on God (the latter being atheists), but they agree when it comes to mining.—Daxim L. Lucas
Asean coffee for Asian confab
Asean coffee advocates are preparing a special concoction in time for the Manila 2012 meeting of the Asian Development Bank in May.
The Philippine Coffee Board (PCB) is set to serve coffee at the event and is taking advantage of the opportunity to promote not just Philippine coffee but those of other Asean member-countries as well.
Being a member of the Asean Coffee Federation (ACF), the PCB is spearheading the creation of what is conceptually the “Asean coffee blend.”
The idea is to have topnotch beans, sourced from accredited and fairly paid farmers in Asean, represented in each brewed cup. A debut at the high-profile ADB event is expected to provide a boost to the high-quality coffee from Asean, PCB co-chair Pacita Juan said.
Meechai Amornpathanakul, president of the Barista Association of Thailand and ACF’s lead officer on specialty coffee, said the ACF has not yet chosen a name for the Asean coffee blend and could hold a contest to get consumers and other stakeholders involved in naming the regional product.
Talk about perking up regional pride and fair trade.—Riza Olchondra
Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert).