Biz Buzz: Race to the skies
Promptly after San Miguel Corp., led by president Ramon S. Ang, hatched an “agreement in principle” with taipan Lucio Tan to buy into Philippine Airlines, corporate rival Manuel V. Pangilinan of the First Pacific group offered to top whatever RSA was willing to pay for control of the national flag carrier by a certain attractive percentage, our industry sources said.
MVP, after all, was at one point thought of as the front-runner in this race to the skies. Even if he’s coy about such interest in public, MVP was seriously gunning for PAL and, unknown to many, even had two teams separately negotiating with Kapitan’s people (at times jostling each other) to seal the PAL deal.
But RSA has likewise been quietly studying PAL for a long time, awaiting such time when Kapitan is ready to let go—which apparently is now.
Going back to MVP’s counter-offer, our sources say the Kapitan has assured RSA that he will keep his word of honor. What suddenly turned the tide against MVP in the battle for PAL is uncertain (apart from some $300-million difference between bid and offer prior to SMC’s bombshell), although some theorize that the Kapitan may have been wary of MVP’s newfound friendship with another taipan, John Gokongwei, who leads rival airline Cebu Pacific.
As such, Tan has made it a condition from the start that whoever takes over PAL may never resell to (or collude with?) another taipan. So for now, it will probably take more than a price war to preempt RSA’s take-off in PAL.—Doris C. Dumlao
Bloomberg text brigade
If one were to believe one particular text message blast being circulated last week, everything is fine and dandy in the Philippines and the country is the hottest investment destination in the world.
Or so it seems, according to a widely circulated SMS that went: “Just heard from Bloomberg here in Hong Kong. The Philippines is the economy to watch. The fundamentals are strong; no overlending by banks; no real estate bubble; BPO [business process outsourcing industry is] booming; overseas remittances [are] strong; [the] Aquino administration doesn’t want to commit mistakes of past; Filipinos [have] confidence in themselves and the new leadership.”
Wow. What a nice way to start 2012, huh?
Not a few people who received the message had raised eyebrows though (including the staff of the local Bloomberg office, who tried—in vain, of course—to validate its contents).
More importantly, the messages were sent from prepaid mobile phone numbers reminiscent of the “text brigade” operations during the 2010 elections or those being used nowadays against Chief Justice Renato Corona.
According to one informed source, the message originated from a former government official who recently had a casual conversation with someone in Hong Kong, and proceeded to send a 160-character summary to his friends.
This was then seized upon by some good news-hungry operators working for the current administration who proceeded to disseminate the message via text brigade.
Hey, if you can’t have good economic numbers, you can at least try to make people believe things are good, right?—Daxim L. Lucas
Daang Hari troubles
The government took its time in bidding out its Public Private Partnerships (PPP) projects in an effort to ensure that all outstanding issues would be ironed out once the process has started.
And so, as promised, they bid out the first of the PPP deals late last year—the Daang Hari connector road—which was won by the Ayala conglomerate. Nicely done.
Here’s the thing though: Our source tells us that government planners overlooked a key element in the project’s technical aspect, which could have an adverse impact on the project’s viability.
According to our source, the area envisioned for the connector road’s link to the South Luzon Expressway side is actually a high-speed zone (one of the fastest for vehicles in the entire SLEx, in fact), which makes it difficult for incoming traffic to merge with vehicles on SLEx.
To avoid frequent smashups, we’re told Ayala may have to either change the alignment of the 4.5-kilometer road or maintain the current alignment but invest more money in a significantly longer entry ramp. Either option will cost more money.
Hang on: Didn’t the government say they took their time in bidding out PPPs so that things would be smooth-sailing once they began?—Daxim L. Lucas
‘Balikbayan’ director
Washington-based technocrat and recreational vocalist Rico Alfiler, a former high-ranking executive of the Bangko Sentral ng Pilipinas, will more often be seen in town these days as he agreed to sit in the board of Philippine National Bank, which is pursuing a merger with Allied Banking Corp, this year. Alfiler became an independent director of PNB effective January 1, taking the post vacated by Feliciano Miranda Jr.
Alfiler is joining PNB in very exciting times as the bank is expected to finally execute a much-awaited merger with Allied Bank this year.—Doris C. Dumlao
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