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Ayala to offer 10-yr P10-billion bonds to public

Roy — Wed, 16 Mar 2011 20:18:40 +0000

Conglomerate Ayala Corp. is planning to sell as much as P10-billion in 10-year innovative bonds via public offering to beef up its cash position. In its disclosure to the Philippine Stock Exchange, Ayala plans to issue at least P6 billion “multiple puttable” retail bonds with an option to increase by P4 billion in case of strong demand.

By being “puttable,” the investment bonds allow the investors to sell their holdings back to Ayala before the bonds reach maturity. This option is given on the fifth and eight year of the investment term. On the fifth year, the “put” option is for the 10-20 percent of the principal amount of the bonds held, while that on the eight year is for up to 80-100 percent of the principal amount of the bonds held.

The bonds will be issued in scripless form in denominations of at least P50,000 each and in multiples of P10,000 thereafter, and will be offered to retail investors. They will be issued at 100 percent of face value. BPI Capital Corp. was chosen by Ayala as the issue manager for the retail bonds whose interest rate will be based on a spread over applicable PDST-R2 benchmark.

Similar “puttable” bonds were issued by Ayala in April last year, its first foray into domestic bond in three years, although their issuance for this year will have a longer term. Last year, it were seven-year bonds with a one-time put option on the fifth year. It was a first in Philippines then that a peso-denominated investment instrument with a “put” option was offered to the public.

Ayala aims to beef up its net cash position, which stood at P29 billion as of the end of 2010, with the proceeds of the bonds. The funds then can be deployed to expand existing businesses, acquire new ones or buy back shares from the stock market if opportunities arise. The company also announced that it has set aside a group-wide capex budget of P79 billion which is 21 percent higher than what it earmarked a year ago.

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Ayala Land mulls sale of Homestarter bonds this year

Roy — Sat, 26 Feb 2011 02:24:24 +0000

Ayala Land Inc. (ALI) is planning to offer P2.02 billion worth of investment bonds, which the company called “Homestarter,” this May. The property giant would like to offer the bonds to retail investors who would like to put up seed money to buy residential units. This will be the fourth time that ALI will be offering the Homestarter bonds and also the largest since they offered it in 2006.

ALI chief finance officer Jaime Ysmael said, “The increased size is intended to support the significant increase in residential launches this year. The bonds are intended to support our sales effort by providing an opportunity for prospective buyers to save up on the equity required for the purchase of residential units.” He added that the bonds will be sold through a general public offering to retail investors.

The company tagged BPI Capital Corp and SB Capital to underwrite the offering, as stated in their disclosure to the Philippine Stock Exchange. The investment instruments will be price d at 100 percent of face value and will mature three years from initial issue date.

ALI will use the proceeds from the sale of bonds for their general corporate purposes. The company has already set aside P33 billion in capital outlays for 2011, the largest capital spending to be committed by a company in a single year.

The Ayala Land Homestarter Bonds were created to boost residential sales while allowing the company to raise fresh funds. With these instruments, investors are required to set aside at least P5,000 a month for the next three years, or a total of P180,000. During the investment period, a bondholder may, at any time, select an Ayala-developed property under various brands, such as the Ayala Land Premier, the Alveo, Avida property or its new brand of affordable housing called Amaia, and apply the bond as payment.

If bondholders forego of the option to use the bonds as payment for properties, cash plus the interest earned will be paid on the maturity date of the instruments.

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High Peso rate is it good sign or bad sign?

PinoyBusiness — Thu, 23 Sep 2010 13:42:48 +0000

Now that the peso has come into its highest rate this year of P43 per $1 the question is is it good or bad for filipino citizens? the answer will be yes and no because yes it may be a sign for a rising economy and no because how about the exporter and overseas Filipino workers that are depending on the dollar exchange?

Export industry may be affected because it will affect thier capital and can lead to the closing of some company. In the part of the overseas Filipino workers (ofw) it can affect their families that are depending from their remitances for example for some that remiting a $100, before the dollar is equivalent to P45 so it is instantly P4,500 if you convert the $100 to Peso. So it has a big affect on the families of the workers abroad.

The registered earnings in revenue last year is $7.3 billion but this year it can be close to $10 billion in revenues and it is more than the target of the government of $9 billion said by the Commission on Information and Communications Technology (CICT) and this can generate more or less 600,000 in the Employment sector.

So that’s only we can expect from the high Peso rate. It either may be bad or good the most important thing is our economy rise up.

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PSE approves REIT listing rules.txt

Roy — Sun, 27 Jun 2010 13:30:56 +0000

The Philippine Stock Exchange (SEC) has approved and issued the listing rules for real estate investment trusts (REIT), thus giving way for a new investment instruments. According to the SEC, the rules should spur interest from the investing public. REIT will use pooled capital of investors to buy and manage income-generating property and mortgage loans.

Val Antonio B. Suarez, chief operating officer of the PSE, said “We are optimistic that the launch of REITs in the Philippines will generate significant interest from investors both here and abroad as real estate prospects are looking good given that the economic recovery is expected to promote commercial activity and restore investor confidence.”

In the approved rules by SEC, a REIT company is required to have 1,000 shareholders holding 50 shares each and a minimum of P300 million in capital. Suarez said the property market will benefit from low inflation “that will keep the prices of goods stable and keep the patronage of retail malls steady.” “The residential property market shall also remain upbeat due to the steady increase in remittances of overseas Filipinos,” he added.

The listing procedures for REIT state that:

-   REIT company must be a stock corporation with income-generating real estate assets;
-   It must also have a dividend policy of distributing annually at least 90% of profits to shareholders;
-   At least 75% of the deposited property of the REIT must be invested in, or consist of, income-generating real estate; and
-   At least one-third of the board of directors of a REIT must be independent directors.

Many property investment companies have already expressed interest to raise funds through the REIT, including property giant SM Prime Holdings, Inc. which said it was looking to raise as much as $600 million through REIT.

The REIT listing rules, however, will still be endorsed to the Securities and Exchange Commission (SEC) for approval.

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$500 million OFW bonds launched for the government

Roy — Fri, 09 Apr 2010 15:24:12 +0000

The sale of $500 million in retail treasury bonds (RTBs) has been launched by the government. This investment instruments are intended for overseas Filipino workers. They are the Fixed Rate Multicurrency Retail Bonds and they will be auctioned on April 20 and will be offered to investors on the same day until April 27, according to Roberto Juanchito Dispo, executive vice-president of First Metro Investment Corp. (FMIC), one of the issue manager.

BPI Capital Corp., Development Bank of the Philippines, PNB Capital & Investment Corp., and BDO Capital & Investment Corp. complete the list of issue managers for the Fixed Rate Multicurrency RTBs.

Initially, the issue size is $500 million. Depending on the demand of investors, the government has the option to increase the size to $1 billion as approved by the Bangko Sentral ng Pilipinas (BSP). Roberto Tan of National Treasure is optimistic that the demand for the RTBs would be strong. “I expect it to be successful because Filipino communities abroad and embassies said there is strong demand,” he said.

The bonds would come in three and five year multicurrency which would comprise $400 million in dollar-denominated bonds and 75 million in euro-denominated bonds. Of the $500 million issue size, 20 percent would be intended for retail investors and the rest would be for institutional investors. To be considered retail, the amount is anywhere from $100 to $100,000.

Tan will conduct a series of “financial literacy seminars” to discuss the benefits of investing the so-called OFW bonds. He will be leaving with a team of government officials and some representatives from the issue managers for various overseas Filipino centers in different countries to conduct the seminars. Their itinerary includes the Middle East, United States and Hong Kong, among others.

As an incentive for OFWs who would invest in the bonds, the government will be exempting them from the 20 percent tax levied on such investment. This is in line with the government’s efforts to provide overseas Filipinos an investment facility for their earnings.

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Vista Land to launch more affordable housing projects this year

Roy — Sun, 21 Mar 2010 04:57:09 +0000

Vista Land & Lifescapes Inc. has 22 new affordable housing projects lined up this year. The housing projects are all under the Camella brand, and will add 17,500 new units all over the country. The company said this is all part of cementing further Camella Homes & Communities dominant position in the affordable housing segment and boost its total portfolio to 97 projects nationwide.

The new projects, according to Camella president Maribeth Tolentino, will be put up in different areas in Mega Manila, as well as in key provinces, like Cebu, Iloilo, Tacloban, Cagayan de Oro, Davao and General Santos.

Tolentino said, “We are leveraging the bigness of Camella, in terms of geographical reach, land banking contribution to group sales, number of houses built and other key attributes, to achieve two aims more effectively. One is to be the first choice of home buyers on the basis of long-term satisfaction based on enduring quality and value. The other is to achieve higher levels of financial and operational efficiencies, and thus profitability.”

The company targets overseas Filipino workers (OFWs) who wants to buy a house they can call their own, by providing value-for-money-homes in master-planned communities.

An amount close to P10 billion has been earmarked by Vista Land for its capital expenditures this year for the launch of its 30 new projects and landbanking activities, bringing to 157 the total number of projects it has started which are widely dispersed in 19 provinces and 46 cities and municipalities around the country.

Among all local developers, Vista Land has built the largest number of homes with a total of more than 200,000. Aside from Camella Homes, Vista Land is also the owner of companies such as Brittany, which cater to high-end communities; Crown Asia, which focus on the mid-range category; Communities Philippines, whose projects are mostly in the provinces; and Vista Residences, which is the newly launched company and brand name aimed in consolidating all the groups’ residential condominium projects.

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Ayala Corp looking to investment in different sectors

Roy — Mon, 16 Nov 2009 07:29:25 +0000

With P26.4 billion in cash as of September, with half of which is “readily deployable for investment,” according to the firm’s managing director John Eric Francia, the holding company of Ayala group is looking for more business acquisitions in different sectors where it can make an “impact.”

Francia said, “Investing in new businesses is definitely on top of the list.”

“It has to be meaningful to Ayala and meaningful in terms of making an impact in that sector,” he added when asked for details of targeted sectors.

If and when the company decides to make any acquisition, Francia explained further, scale will be a primary consideration. He said the firm would like to be at least “No. 1 or No. 2” in its local business. Just like LiveIt Investments, he continued, the group would like to see its business process outsourcing acquisitions overseas to be among the top five companies in their sectors.

Another consideration is “buybacks,” similar to what the company did when it purchased P3.5 billion worth of shares from its partners in listed utility Manila Water Co. Inc., where Ayala Corp.’s interest rose from 31.7 percent to 43.3 percent.

Meanwhile, Ayala’s core business units continued to achieve robust earnings growth. The Bank of the Philippine Islands (BPI) net income in the first nine months of 2010 grew by 38% to P7.3 billion with revenues up 16%.

This was said to be contributed by the increase in the bank’s average asset base coupled with a 13-basis point improvement in spreads. The bank’s average loans were also up by 8% driven by the middle-income market and consumer clients.

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P1.5 Billion ethanol-production facility to be set up next year

Roy — Sun, 13 Sep 2009 08:43:19 +0000

â€œWe will replicate what we have with the San Carlos Bioenergy Inc (SCBI) Itâ€™s much easier so we will incur lower costs. We have three identified areas but we donâ€™t want to reveal.â€ These were the words of SCBI chair Jose Maria T. Zabaleta as he announced that Bronzeoak Philippines will be investing P1.5 billion to construct a second ethanol production plant on June next year.

British firm Bronzeoak Ltd. established Bronzeoak Philippines in 2003 together with the Zabaleta group. According to Zabaleta, Bronzeoak would still be the developer of the proposed facility and was considering partners for the project.

SCBI established the first integrated fuel ethanol distillery and power cogeneration facility in the country last year. The plant has a capacity of 30 million liters a year, and it is one of the only two companies that produce ethanol locally, the other one being Leyte Agri Corp.

The facility is said to displace 15% of the countryâ€™s imported petroleum, based on a 5% blending mandate to be implemented from 2009 to 2011.

Zabaleta said the second proposed facility would be having an estimated capacity of 40 million liters a year and would include putting up a cogeneration power plant that would produce around megawatts of electricity. He added that they are looking to tap financing from the Development Bank of the Philippines.

SCBI, together with the Leyte Agri Corp. facility, has a combined 39 million liters a year production, which is still a far cry from the local demand of 208 million liters.

The Biofuel Law requires all oil companies to pre-blend 5% ethanol in gasoline-fueled vehicles starting February 2009. This would then be increased to 10% by 2011. Most oil companies however, have already began pre-blending 10% ethanol in their gasoline products as early as May 2008, which is way ahead of what the law required.

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Penalties imposed on late filing of pre-need companies

Roy — Sun, 06 Sep 2009 13:51:48 +0000

The Securities and Exchange Commission (SEC) is imposing a basic fine on pre-need companies on the late submission of annual and interim financial statements to ensure compliance with its reportorial requirements.

According to SEC spokesperson Gerard Lukban, the fine also covers even the inactive pre-need companies. This involves a basic fine of P10,000 that will be meted out on pre-need firms who will fail to file financial reports on time. It will be the first time that such penalty on the late submission of financial statements of pre-need companies will be imposed by SEC.

An additional P500 per day for continued non-submission of financial reports will be imposed by SEC to erring pre-need companies, aside from the basic fine. This move by the SEC is in line with its efforts to tighten its supervision on pre-need companies following the collapse of leading players in the industry as the global economic crisis caused a massive meltdown in financial markets.

Last month, the SEC issued a directive which requires all pre-need firms to raise them minimum deposit in the industry trust fund, to further safeguard the interest of the investors. At present, there are 22 companies who are licensed to sell new plans, which are the educational, pension and memorial.

The companies included in this list of 22 licensed pre-need firms are: AMA Plans, Ayala Plans, Caritas Financial Plans, City Plans, Cocoplans, Danvil Plans, Destiny Financial Plans, Eternal Plans, First Country Plans, First Union Plans, Grayline Plans, Himlayang Pilipino Plans, Loyola Plans Consolidated, Manulife Financial Plans, Mercantile Careplans, Paz Memorial Services, Philam Plans, Provident Plans International Corp., St. Peter Life Plan, Sun Life Financial Plans, Transnational Plans and Trusteeship Plans.

The move by the SEC, followed with a strong political will can really help protect the interest of investors. This should have been done long time ago.

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Watch out for SMEC’s IPO

Roy — Sat, 05 Sep 2009 03:53:38 +0000

The energy investment arm of food and beverage giant San Miguel Corp., the San Miguel Energy Corp. (SMEC), will be conducting an initial public offering (IPO) within the next three years. This has been confirmed by San Miguel president Ramon S. Ang who said that they will definitely keep a 51% interest in SMEC in spite of the IPO. The proceeds of the IPO will be used to fund the activities and work programs of the energy company, Ang said.

SMEC has just recently acquired an independent power producer administrator (IPPA) contract â€“ the 620-megawatt combined cycle power plant in Limay, Bataan, through a negotiated sale from Power Sector Assets and Liabilities Management (PSALM) Corp.

Currently in the thick of expansion and conversion plans for its recently acquired power generation asset, Ang said SMEC will invest at least $350 million in converting the plant into a compressed natural gas (CNG)-fired facility. Currently, the company is in talk with several CNG suppliers from Indonesia, Malaysia, Qatar and Middle East.

In the same week in acquired the Bataan plant, SMEC also bagged the contract to manage the independent power producer (IPP) contract for the 1,000-MW Sual coal-fired power plant in Pangasinan, through a bidding conducted by PSALM.

Ang said the company is focusing on its energy and power business. It aims to increase the contribution of its power and energy investments to 25 percent of the parent firmâ€™s annual earning. Earnings from its food business should now be about 10 to 20 percent of the total, while telecom should be 30 percent. â€œWe want to be the top conglomerate, the most diversified with the biggest sales revenue,â€ he said.

â€œFor our power business, as much as possible, we want it to run on renewable energy. However, for the Sual (facility) which is a coal-fired plant, the question is how to make it environmentally friendly,â€ Ang added.

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Australian outsourcing firm to set up BPO hub in RP

Roy — Thu, 20 Aug 2009 21:00:00 +0000

Call Design, an Australian-based outsourcing firm is looking to make the Philippines its central hub in delivering contact services to its clients all over the world. Specializing in contact center technologies, Call Design announced it entered into a deal with local outsourcing firm Transcom, which currently employs 4,000 workers in Manila and Bacolod.

Miles Stanton, managing director of Call Design, said the company is keen on making the country its central hub because of the positive growth in the local business process outsourcing (BPO) industry.

Stanton said â€œCompared to other Asian countries, the Philippines has the strongest teams in the business process outsourcing space. Teams that understand the marketplace and use technology to resolve issues.â€

The services of the company, according to Call Design, are focused on enhancing productivity of contact center agents. Stanton said, â€œIn the BPO space, call center agents determine the success of companies.â€

The Aussie firm currently serves clients in 25 countries. The companyâ€™s goal, according to Stanton, is to encourage more companies in Australia to outsource instead to the Philippines.

He also said that local contact centers should learn from India, where many Australian firms pulled out outsourcing ties due to â€œbad pressâ€ on the performance of call center agents.

Local country Jaime Sese said, Call Design also plans to invest people in training while expanding its operations in the country.

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International Investing 101

PinoyBusiness — Thu, 06 Aug 2009 05:57:37 +0000

Investors always want to find the best way for their money to grow. Some may consider international investing and below are things that experts feel you need to know before starting on international investment.

First, international investing can boost your returns. America may have the worldâ€™s biggest stock market, but it does not always perform best. There are several other markets around the world which deliver better returns. Do not limit your search to just one country so you will not miss out other great investment opportunities.

Second, global diversification can reduce risk. International investing is often perceived as risky. This is true if you put your entire savings on a single investment. It is important to diversify. Studies show that adding a well-diversified group of international stocks to your portfolio reduces instability as foreign markets behaves the opposite way US market does.

Third, itâ€™s never been easier for small investors to participate. International investing has been made more accessible for individual investors as new international funds, exchange traded funds (ETFs) and American Depositary Receipts (ADRs) are now available. International investing is no longer just for professional investors.

Fourth, do not forget about currencies. When you buy shares of a company in your home market, your returns depend on the change in the stock price and the dividends you receive, if there are any. But if you invest in another country, you also need to watch the value of that countryâ€™s currency. A significant change in the exchange rate may hugely affect the performance of your investments, and your portfolio.

Lastly, all investing is global. With globalization, it has become difficult to differentiate foreign and domestic investing. Old American companies like Coca-Cola and IBM, now produce more than half of their sales outside the US. Even if you choose to invest in your home country, you still need to be aware of what is going on in the international market and get the global picture.

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Filipinosâ€™ Eagerness to Investing in Guam

PinoyBusiness — Sat, 18 Jul 2009 21:42:03 +0000

With the moving of about 40, 000 military personnel from the US together with their dependents, and other civilian workers to Guam over a five year period, more Filipino businessman are foreseeing the island as a potential investment area.

During the Guam Trade Mission conference, that attracted about 172 Filipino executive and businessmen, a Guam-Philippine Business Council has been formed. The objective of the said council is to boost and further strengthen the relationship of the two parties in terms of business and trade.

Among the attendees of the conference was the former president of MERALCO (Manila Electric Company), Jesus Francisco. Francisco is now the chairperson of MIESCOR (Meralco Industrial Engineering Service Corp.) which is a subsidiary of Meralco. According to Francisco, he is glad to attend the conference because he is interested to look at the opportunities in Guam in terms of electro-mechanical, power plants, building transmission lines and other which the MIESCOR could engage in.

The statement of Francisco was in relation to the statement of Gov. Felix Camacho, governor of Guam in a briefing prior to the conference who said that with the moving of US military personnel and their dependents to Guam from Okinawa, Japan, Guam will be needing to build a 200- mw power plant that will meet the increase in power requirements once the military starts to transfer.

The opportunities in Guam in term of information technologies, especially in terms of conversion of data are also being investigated according to the president and CEO of 1 Document Corp. He also said that the island is an ideal investment area for Philippines because of its proximity to the Philippines along with the similarities of its people to the Filipinos in culture and history.

David John who is the president of ASC Trust Corp. which is based in Guam said that with the buildup of military in Guam, Philippines and Guam both will have an increase in two-way business traffic. He said that more businesses will come here in Manila while those businesses here in Manila will have an opportunity to go to Guam.

By 2010, about 8, 000 military personnel together with their 9, 000 dependents who are now based in Okinawa will transfer to Guam. The transfer will run over a 5-year period. With these, Camacho took note of numbers of opportunities for Filipino investors specially those who are in real estate, agriculture and aquaculture, financial services and captive insurance, and even retails in food products.

The transfer of the military personnel will necessitate construction and improvement of infrastructure of the island like bridges, roads, health and recreational facilities and housing. An estimated $15 billion is expected to be spent by Japan and US as relocation fund. According to Camacho, the bottom of line of this is that the island will be needing additional workers to about 12, 000- 15, 000 who will support the military buildup. And with the initiative of private sectors, it is expected to even reach to 25, 000 workers.

Other jobs opportunities that will be opened to the Filipinos aside from skilled construction workers will include occupational therapist, engineers, physicians, architects, nurses and the like. Guam has been exempted from the â€œHâ€ visas or the US wide quotas for immigration which will take effect beginning November of this year, in order to support the military buildup. The exemption from the â€œHâ€ visas will last up to the last day of 2014 and would cover not just Filipinos but all nationalities.

Workers from the Philippines will only be given temporary working visas which mean they will need to return home when their contracts are up. But those working with â€œH-1Bâ€ visas â€“ visas given for professional or specialty workers and those who have a US masterâ€™s degree can apply for a green card during their stay on Guam.

The chairman of the Guam Economic Development Authority, Ricardo DueÃ±as revealed the putting up of a liaison officer in Guam by the Philippine Overseas Employment Agency Administration (POEA) to assist in the hiring of workers from the Philippines for the projects.

Peter Sgro, president and chairman of a consulting firm in Guam, the International Group Inc., and who is among the primary organizers of the Guam Trade Mission to Manila which is composed of 20 man said that the conference had exceeded their expectations. He added that the interest in investing on Guam is clearly indicated by the attendance of representatives coming from the executive level.

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The Sun Life Prosperity Dollar Abundance Fund

Roy — Tue, 23 Jun 2009 21:28:32 +0000

The Sun Life Prosperity Dollar Abundance Fund (SLP DAF) has been re-launched by the Sun Life Asset Management Co., Inc. (SLAMC), from a dollar-denominated fixed income or bond fund to a balanced fund. This, while more and more domestic mutual funds has been focusing on the foreign-currency funds.

Ben Thomas P. PaÃ±ares, chief operating officer of SLAMC said, â€œThe value of dollar savings in the Philippines reported amounts to some $20 billion, and it fair to say that we want a piece of that.â€

As April 2009, the total value of all foreign-currency denominated mutual funds, which are managed by various fund managers, was P10.2 billion. Assets under management (AUM) within the mutual fund industry has a total value of P61.8 billion as of end of April.

There are 10 foreign currency-denominated mutual funds at present, 8 of these are US dollars denominated, while 2 are euro-denominated. With the exception of SLF DAF, all foreign currency-denominated funds are bond funds.

The difference is that bond funds, or fixed income funds, have lower risk yet a lower return on investment too. Balanced fund, on the other hand, are a mix of bond funds and equity funds, which make it a high return, high risk investment.

Mutual funds that are foreign currency-denominated, are invested mostly in dollar denominated ROPs.

SLAMC’s SLF DAF is the first foreign currency mutual fund in the country that is a balanced fund. Which means that, 60 percent of the fund is invested in dollar-denominated bond funds, and the 40 percent in dollar-denominated equity funds.

PaÃ±ares said that they are expecting to US dollar to perform better than peso ultimately. The forecast is an exchange rate between P51 to P53 to $1 by end of 2009. He added that local investors could see it (SLF DAF), as a medium to diversity their dollar-denominated portfolios from ROPâ€™s to dollar-denominated investments from foreign mutual funds.

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Special Development Account (SDA) Investment

PinoyBusiness — Tue, 23 Jun 2009 05:36:23 +0000

Have you ever thought of on how will you invest your money if ever you will have half a million of pesos? There are several options on where to invest, there are bank deposits, mutual funds, government and corporate bonds, or you can even buy stocks. With this several options, the problem would be on deciding on where to invest. Of course, you wouldnâ€™t want to risk your money so you will definitely try to figure out which is the least risky from the choices. In addition, you may also want to determine which investment will give the best return. Before deciding, you must always think of the rule of thumb that is, in order to compensate any erosion in the worth of your money, the return must be higher than the inflation rate.

From these different options, the safest choice will be the deposits because an insurance of up to P250, 000 are given. This insurance could even rise up to half a million pesos if ever the legislators from the House of Representatives will be successful in passing the bill raising the maximum amount of deposit insurance.

Aside from the options cited above, there is also the Special Development Account which was fortunately opened by the Bangko Sentral ng Pilipinas or BSP both to government and trust institutions. If ever you decide to choose this option,all you need to do is to go to banks where SDA is offered because not all banks offer this kind of deposits.

In 2006, trying to surpass inflation without raising its overnight borrowing and lending rates, as well as to get through excess liquidity in the financial system, the BSP introduced the SDA. However, before you can deposit in SDA, you must have at least P100, 000. According to Land Bank of the Philippines Investment and Trading Department Head, Josefino P. Cerin, the facility is deemed to be very profitable due to high interest rates that it offers. And with the central bank as its counter party, it is considered to be very safe. Cerin also added that at present, only 14-day and 30- day windows are available.

An interest of 5.265% for 14-day SDA and 5.875% for 30-day SDA is offered as of December, 2008. These interest rates are fastened on the central bankâ€™s overnight borrowing rate. A 20% withholding tax is subject to the interest income.

Backed by the BSP and with better offer rates to compare to deposits, SDA is a secure investment!

You may contact Bangko Sentral for more information at:

Bangko Sentral ng Pilipinas
A. Mabini St. cor. P. Ocampo St., Malate Manila
Phone : (02) 524-7011, Fax: (02) 523-6210
E-mail: bspmail@bsp.gov.ph
Web: www.bsp.gov.ph

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Lending Business: How to Start

PinoyBusiness — Mon, 22 Jun 2009 08:36:55 +0000

In time of economic crisis like the recession that is happening worldwide, the industry of lending flourish. To deal with the crisis, people branches to sidelines, put up small business like sari- sari stores or work abroad. Some simply tighten their belt in order to fit into their budget. If thereâ€™s no more way, people simply try to lend money. Instead of going to banks which usually offers higher interest rates and longer processing time, they prefer to go to lending firms. In addition to this, lending firms are not that strict when it comes to requirements. These are some of the reasons for entrepreneurs to grab the opportunity and start a lending business.

Using the words â€œlendingâ€ or â€œfinanceâ€ in the name of your business can only be used if it is a corporation. But, you can also start a lending business with just a partner or being the sole owner, though there are some advantages if it would be a corporation.

Lending business requires at least 1 million pesos as starting capital. Documents and permits like the Mayorâ€™s permit, certification from the Bureau of internal Revenue and a registration from the Securities and Exchange Commissions (SEC). You will need at least three man power assigned for releasing the loans, collecting payments, and bookkeeping so Social Security System, Pag-Ibig, and Philhealth will also be necessary for your employees.

Upon starting the business, you can lend money ranging from 5,000 pesos to 15,000 pesos. Monthly interest is from 3-5 percent with a mode of payment of two to six months. To make up for the operating cost, an additional of 5 percent should be charged. Operating cost charge can be added to the interest rate or be deducted upon the release of the lent money. Payment schemes can be daily or weekly basis.

Usually, micro lending caters to sari-sari store owners, market stallholders, and employees or pensioners; with whom you can set the payment once a month or every pay day. You can also cater to overseas workers (OFW) which requires bigger loan amounts usually at a minimum of 50,000 pesos. Partnering with human resource or accounting department of the targeted company is another option to have more clients. To endorse your business to their employees, you can give them an incentive or commission.

For loans amounting to 50,000 or higher collateral is needed. Anything the borrower owns which has a value can be used as collateral like vehicles, real estate, or even jewelries. If the thing being used as collateral is owned by other person, not the borrowerâ€™s himself, an authorization letter or special power of attorney is needed. Meanwhile, for borrowers of small amount, a promissory note and other documents like certification of employment are the only requirements.

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Poll automation on 2010 election will push through

Roy — Thu, 11 Jun 2009 12:13:52 +0000

The Commission on Election (COMELEC) has granted Smartmatic and its Philippine partner Total Information Management Inc. the winning vote in their bid to provide 80,000 vote counting machines at a cost of $152 million.

The automation of the countryâ€™s national elections next year will be a first for the Philippines, and COMELEC officials hope it can help eliminate cheating in elections.

In previous elections, voters are required to write the names of their chosen candidates, and they are then counted manually, in a system that is very much open cheating and oftentimes marred with violence.

With the new system, COMELEC head of the bidding committee Ferdinand Rafanan said, votes are tallied and transmitted electronically. â€œThis is a turning point in Philippine elections,â€ Rafanan said.

In the old system, winners were not known even weeks after the balloting, because of the tedious manual process.Â Â With the new poll automation, counting of votes will be quicker, and it will curb if not totally prevent cheating. Bu skeptics think otherwise, they say it could in fact be easier to manipulate by tinkering with the machines or the program.

In the 2004 presidential election, actor Fernando Poe Jr. was defeated by President Gloria Macapagal Arroyo, but the opposition said she cheated, and have tried, albeit unsuccessfully, in theÂ years that followed to prove it or unseat her.

Antonio Mugica, Smartmatic CEO, said that his company is confident that it can handle up to 50 millions. Based on the companyâ€™s experience with electronic voting in other counties, 80 percent of the results were made available within five to six hours after polls close. Smartmatic Sales Director Cesar Flores said all the results will be in within a day or two.

Smartmatic, as confirmed by Rafanan, will be providing a technical staff of at least 40,000 nationwide, and it will have an emergency power supply units and an additional 2,200 machines to replace any that break down.

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Another company sets eyes on renewable energy

Roy — Mon, 08 Jun 2009 23:28:37 +0000

More companies are getting interested in the renewable energy industry. The latest to test the waters in this industry is the Conal Holdings Corp, a subsidiary of the Alcantaraâ€™s Group whoâ€™s planning to invest at least $35 million in mini hydro-electric projects in Siguil River, Saranggani province.

Luis R. Ymson Jr., CFO of Conal Holdingâ€™s parent firm Alsons Consolidated Resources Inc. said â€œWe want to build small hydro projects near our 200-megawatt coal fired power plant in Saranggani.â€ He said the mini hydro facility would have a capacity of only 17 MW as this would be the run-off-the-river type.

Ymson said the venture would only entail minimal investments since it is only a small-scale hydro power project and it does not call for the construction of a dam. The company was however seeking project financing, both from private and government financial institutions.

â€œThis may be funded easily as this can qualify as a renewable energy project, which a lot of financial institutions may be interest and willing to finance. We are also checking if the DBP (Development Bank of the Philippines) has a specific facility for these types of projects,â€ Ymson added.

He further said that the company is also looking at two more mini hydropower projects. One is located in the Negros area, where they were already in talks with prospective partners, while the other one is located in South Cotabato.

Ymson also said that the companyâ€™s interest at present is only in mini hydro power projects. He said they have no intention of tapping into other renewable energy sources such as wind, ocean or biomass.

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LandBank was able to build P6.9B fresh funds from Tier 2 notes

Roy — Mon, 08 Jun 2009 11:42:22 +0000

The Land Bank of the Philippines (LandBank) initially intended to offer only P3 billion of unsecured subordinated notes in order to raise additional capital. But because of strong demand, the bank increased the deal size from the initial figure to the maximum amount allowed by the Bangko Sentral ng Pilipinas (BSP) to raise.

And from the increased volume of notes, the state-owned LandBank was able to raised P6.9 billion in fresh capital, more than double of what it had initially offered to investors. The notes carry a coupon rate of 7.25 percent per annum, 75 basis points above the benchmark rate, which was at 6.5417 percent at pricing date. Said notes will be issued on June 9.

LandBank president and chief executive officer Gilda Pico said, â€œWe are extremely please with the outcome of the transaction, as it provides us with new capital and augments our lending programs in fulfillment of our mandate towards countryside development.â€

Executive vice president for institutional banking and subsidiaries sector Cecilia Borromeo said the offering was a huge success in the current market conditions and despite competing offers from other corporate borrowers.

The proceeds qualify as Tier 2 and will increase the bankâ€™s capital adequacy ratio to 17.3 percent from 14.9 percent currently. It is said to be the largest Tier 2 notes issuance so far this year.

Acting as sole arranger and selling agent for the transaction was Deutsche Bank AG-Manila branch, who was also the arranger in previous $150-million Tier 2 notes offering by LandBank in October 2006. Other selling agents for the transaction were Development Bank of the Philippines and Multinational Investment Bancorporation, which also acted as the market maker for secondary sales.

LandBank currently ranks fourth-biggest bank in terms of assets, loans and deposits. It posted a net income of P1.7 billion for the first quarter, 40-percent higher than the P1.2 billion income for the same period last year.

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BSP approves $75-million loan of Globe Telecoms

Roy — Mon, 18 May 2009 06:44:24 +0000

The Monetary Board of Bangko Sentral ng Pilipinas (BSP) has approved the $75 million loan by the Globe Telecom. The Ayala-owned company said the loan would be used to pave the way for the companyâ€™s network expansion program.

BSP said Globe would acquire three separate loans from Citibank and two European development financial institutions. According to Deputy Governor Diwa Guinigundo of BSP, $25 million of Globeâ€™s loan will come from Citibank, which will mature in five years including the 1.5 years of grace period. Citibank will be charging Globe an interest based on six-month LIBOR plus 2.65 percent.

Guinigundo also said that the $50 million would be coming from the Deutsche Investitions-und Entwicklungsgesellsschaft mbH (DEG), which is a member of Germanyâ€™s KfW Bankengruppe (KfW banking group) and the Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), the bilateral development bank of the Netherlands.

BSP has also approved earlier a foreign loan by Globe Telecom Inc. worth $50 million, which would finance its acquisition and installation of equipment to improve its services. Globe planned to borrow earlier from the Export Development Bank of Canada, this was approved by the BSP Monetary Board in March.

The central bank said that Globeâ€™s foreign loan was approved because its project was eligible for foreign financing under the digital infrastructure component of the governmentâ€™s Medium Term Development Program.

The Loan from Canadaâ€™s EDB had a three-year maturity including a six-month grace period, the interest charge for the said loan is a rate equivalent to 300 basis-points over US dollar LIBOR.

Currently the second largest telecom company in the country, Globe said earlier it was also planning to issue P3 billion ($64 million) worth of three and five-year bonds to raise the funds it needs for operations.

The bonds maturing on February 2012 will carry a coupon rate of 75.5 percent, payable quarterly, while those maturing on February 2014 would have a coupon of eight percent, Globe said in its report to the Philippine Stock Exchange.