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New reimbursement payment scheme to be adopted by Philhealth

Roy — Mon, 09 May 2011 10:27:19 +0000

A new payment system that will replace the present “fee for service” scheme in reimbursing hospitals will be adopted by the Philippine Health Insurance Corp. (Philhealth) and hopes to implement it next month.

The Philhealth plans to adopt a new system called the “case payment” system which will have fixed rates for medical services and surgical procedures to reimburse hospitals for treatment of Philhealth members.

Senior manager of benefits and development and research department of Philhealth Dr. Israel Francis A. Pargas said the case payment system will cover both medical and surgical procedures. He said the board discussion on the new scheme is almost over.

Pargas presented a draft during the recent annual convention of the Philippine College of Physicians (PCP), of the proposed amounts that can be reimbursed by hospitals on specified surgical and medical cases.

Among the fixed rates for service and procedures are: hemodialysis, P4,000; radiotherapy, P3,000; caesarian section, P15,000; Medical Care Plan (MCP), P8,000; appendectomy, P26,000; hysterectomy, P30,000; cholecystectomy, P31,000; dilation and curettage, P11,000; mastectomy, P22,000; herniorrhaphy, P21,000; and thyroidectomy, P31,000. For other diseases, reimbursement for essential hypertension case will be P9,000 and typhoid fever is P14,000.

Pargas said, “The new case rates shall be the new reimbursement for all the specified cases. It will apply to all claims by eligible Philhealth members and dependents admitted in accredited facilities.” He noted that the new scheme will moderate the financial risk to Philhealth and will provide high financial protection to beneficiaries and members and would mean less administrative cost for hospitals and Philhealth because it will not need any itemization.

According to Pargas, under the current reimbursement scheme which is the fee-for-service method, there is a high risk to payors, Philhealth and members and is also incentive for fraud. The present system also results in high administrative cost for hospitals.

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JG Summit earmarked $700 M for its 2011 expansion

Roy — Fri, 06 May 2011 01:00:57 +0000

JG Summit Holdings Inc. is earmarking $700 million for the planned expansion this year. Most of these funds are allocated for its petrochemical and airline businesses.

JG Summit president Lance Gokongwei said the petrochemical business will be the company’s priority in the next three years. JG Summit also has stake in a property developer and may expand into power generation.

With sale of its stake in Digital Telecommunications Philippines Inc. (Digitel) to Philippines Long Distance Telephone Co. (PLDT), the company will also be able to cut its debt by $600 million, giving it “more room” for fund-raising. Also the asset sale is said to be “strategically good for JG Summit because it frees up capital that the company can invest in ventures that potentially will pay a higher return.”

Gokongwei said after the sale of its Digitel stocks to PLDT, “We will be very lightly leveraged. We will have a very good balance sheet.” According to data compiled by Bloomberg, JG Summit has bonds and loans worth P69 billion.

Last December, JG Summit said it may sell 31 percent of its stake in Cebu Air Inc. to fund expansion and pay debt, however, after the Digitel-PLDT deal, the company will have “no immediate” need to sell shares. JG Summit is the majority owner of Cebu Air, the country’s biggest budget carrier.

Gokongwei said JG Summit will invest about $200 million in a naphtha cracker plant worth $700 million that may start operations by 2013, snack and iced-tea maker Universal Robina Corp. may spend $80 million to $90 million, property unit Robinsons Land Corp. will spend as much as $200 million on capital expenditure this year, while Cebu Air will spend around $200 million.

JG Summit also plans to bid for airport projects that the government will be opening to companies for investment, and is mulling to build a power plant for its petrochemical business, said Gokongwei.

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8 companies eyeing the right operate MRT and LRT 1 lines

Roy — Thu, 05 May 2011 05:51:12 +0000

Eight companies are vying for the operations of major Metro Manila train lines. Conglomerate Ayala Corp., San Miguel Corp., and Pangilinan-led infrastructure giant Metro Pacific Investments Corps. are the local groups planning to bid for the P15-billion contract, while five foreign companies have also acquired bid documents worth P500,000 each for the project, according to the Department of Transportation and Communications (DoTC).

The DoTC said that the bidding schedule has been set on July 11. Interested bidders may purchase bid documents until July 11.

The contract being eyed by the bidders involved a five-year operations and maintenance contract for the Metro Rail Transit (MRT) and Light Rail Transit (LRT) line 1. This is the first project under the administration’s public-private partnership (PPP) infrastructure program.

US-based Abratique & Associates, London Stock Exchange-list Serco Group, multinational Jorgman Construction and Development, and Japanese companies Sumitomo and Marubeni completes the list of eight groups bidding for the said license. A total 44 companies, most of which are from abroad, have expressed interest in the project.

But the DoTC kept on trimming down the list by telling companies it deemed not likely to stand a chance to win the contract not to bother joining the bidding. Companies were screened in terms of their financial capability and technical expertise. Companies that were affiliated with other potential bidders were also disqualified from the bidding.

The winner in the bidding process will get the contract to operate and manage both train line for four years with an option extend it for another year.

The DoTC hopes that by bidding out a single contract for the LRT1 and MRT train lines would lead to the integration of the train line. The lack of connectivity between the two lines has been causing inconvenience for the one million passengers that use both train lines every day.

The LRT line 1 runs along Taft Avenue from Baclaran in Pasay City to Roosevelt, Quezon City, while MRT runs from Taft Ave. to North Avenue along EDSA.

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New CDC head assumes post

Roy — Wed, 04 May 2011 18:39:14 +0000

Antonio B. Remollo, former mayor of Dumaguete City, is the new head of the Clark Development Corp. (CDC) replacing Benigno Ricafort, Ateneo law school dean Cesar Villanueva assumed post as CDC chairman, replacing Rizalino Navarro.

Ricafort left to Remollo’s charge a Freeport hosting some P77 billion worth of investments of foreign and domestic firms. He also reported that Clark now employs 60,000 personnel, which is a far cry from the average 24,000 Filipinos employed by the Americans before they left the former US Air Force base.

Ricafort started as CDC board member in 1993 until former president Gloria Macapagal-Arroyo appointed him CDC head in 2008.

Meanwhile, Remollo had been mayor of Dumaguete City in Negros Oriental from 1998 to 2001. In an interview, Remollo said he would keep the current vice presidents of the CDC although they would be under probation for six months to one year. He said he would retain those proven efficient and dedicated to their work.

Remollo disclosed that he is eyeing enough area in Clark for the construction of a “new Malacañang” as well as buildings to accommodate national government offices. He did not confirmed though if it was motivated by President Aquino, although there were other sectors, both private and public, who wanted to move the country’s government seat to Clark.

One of the top priorities of Remollo, he said, would be the development of Clark as a major tourism destination. “Tourism here could be developed to the maximum also by hosting sports activities as well as promoting medical tourism. We should have a really attractive theme park here,” he said.

Remollo is eyeing particularly the 300 hectares of land by the Philippine Air Force (PAF). The area include a resort with an Olympic-sized swimming pool, an “officers’ club” building with conference rooms, a hotel, and a football field. Said facilities have been noted to be underutilized and deteriorating under the management of the air force.

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Chinatrust applies for unibank license

Roy — Mon, 02 May 2011 07:30:07 +0000

The Chinatrust Commercial Bank Corp. is seeking to upgrade its current status and authority from a commercial bank to a universal bank. Chinatrust made a request to the Bangko Sentral ng Pilipinas (BSP), asking it to convert its banking license to “unibank” at the end of last year to allow it to implement globalization plans.

With a unibank license, it will be possible for the bank to have a bigger role in onshore capital market through corporate issuances underwriting and the distribution of securities to institutional investors. Aside from having an authority to operate as an investment house, unibanks are also allowed to invest in non-allied enterprises, such as infrastructure projects.

According to the BSP, Chinatrust is planning to have a more active role in debt and equity underwriting. The bank currently operates 24 branches in the Philippines and they plan to use their branch network for the distribution of securities.

A subsidiary of Taipei-based Chinatrust Commercial Bank Ltd., Chinatrust (Philippines) is targeting top-tier clients, such as conglomerates and companies into utilities and power-generation, and some middle-income industries such as the business process outsourcing (BPO) sector.

The request for the banks license upgrade has been forwarded to the Monetary Board for approval as Chinatrust is qualified and meets requirement. The foreign-affiliated bank has a capital base of P5.26 billion, exceeding the minimum capital requirement. The BSP requires all unibank to have a minimum capital of P5 billion and for commercial banks, the minimum capital requirement is at least P2.5 billion.

Established in 1995, Chinatrust is listed in the Philippine Stock Exchange. The BSP, before granting it a unibank license, wants the bank to offer at least 10 percent of the required minimum capital for public offer before December 31 of this year.

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Clark airport to get a boost from US lawmakers

Roy — Mon, 02 May 2011 04:20:52 +0000

During their visit to the Clark airport, president and CEO of Clark International Airport Corp. (CIAC) Victor Jose I. Luciano asked the two US senators for help in the transformation of Clark airport into an “aerotropolis” that will bring in investors from the United States.

US Senators Daniel Inouye of Hawaii, President Pro Tempore of the US Senate, and Thad Cochran of Mississippi, both members of the committee on appropriations, were at the CIAC corporate offices recently and made a quick tour at the expanded Terminal 1 of the Clark International Airport.

Luciano made a presentation to the two senators at the CIAC Boardroom where he pointed to them the development of a logistics and services hum in the Clark airport area which was patterned after the logistics hub in Dallas Forthworth, Texas where the development of two cities created an “aerotropolis.”

Luciano said, “The airport-driven economic powerhouse brought in hundreds of companies around the airport in Dallas. This is where we would like to seek the US government to help us plan to make the Clark Civil Aviation Complex an aerotropolis.” He asked the two senators to help promote Clark to American investors.

Senator Inouye said Luciano should join the APEC meeting in Hawaii this year to make a pitch for the development of Clark airport and make same kind of presentation he showed to them. This year’s annual APEC Leader’s Meeting will be held in Honolulu, Hawaii in November.

The two US Senators visited the Philippines to look into the transformation of the two former US military bases, the Clark Air Base in Pampanga and the Subic Naval Base in Olongapo, and see how they were turned into productive civilian use.

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Transport firm to pioneer electric buses in the Philippines

Roy — Sun, 01 May 2011 14:57:44 +0000

Local transport firm Green Frog Zero Emission Transport Corp. dared to take the huge risk in the electric vehicle industry and expressed interest to buy some 3,000 electric buses in the next seven years, with the initial 38 units coming in from China within the year.

Green Frog director Philip Apostol said the 36-passenger buses will be fielded in Makati City with an P8 fare trip. The first 10 buses arriving midyear will ply the Buendia line while the 28 units will take other routes. The buses will initially ply a route that goes along Buendia from EDSA to the South Luzon Expressway (SLEX). Eventually, they will be available to commuters with the whole of Makati.

“The plan is to implement to project within 90 days after the signing of the MOA (memorandum of agreement) with the Makati LGU. This is a PPP (Public-Private-Partnership) with Makati,” he said. Apostol admits that cost of the e-buses was high, but hopes that the government “would work” with them.

He did not disclosed the cost of the electric buses but said that normally, the bigger electric buses would cost $300,000 (P13.5 million) each. Green Frog’s buses, however, will be smaller and would cost less.

The company is seeking tax perks, among other incentives, and a pioneer status from the Board of Investments, to make the project economically viable.

Negotiations by the company with banks and government financial institutions have been started, seeking for the best financing package. It also seeks some guarantees from the Philippine Export Import Credit Agency (PhilExim) to get lower interest rates.

Apostol said the half of the revenues will be coming from advertising income to help keep fares at reasonable levels during the initial roll-out.

Another Green Frog director, Servillano Batac, said talks were also ongoing between government and financial institutions for the mechanics of a “tap-and-go” system for the electric buses. “The idea is that you will be able to use your MRT (Metro Rail Transit) cards to pay our electric buses, just like in other countries,” he said.

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Trans-Asia stock rights offer approved by PSE

Roy — Sat, 30 Apr 2011 06:19:03 +0000

The Trans-Asia Oil and Energy Development Corp.’s plan to raise fresh fund for power generation via stock rights offer was approved by the Philippine Stock Exchange (PSE).

The Phinma-led company got the nod from PSE when the latter posted a memorandum on Friday saying that its board has approved the listing of 1.16billion additional common shares to be issued by Trans-Asia to cover an equity offering to all shareholders. Each eligible shareholder is entitled to subscribe to seven right shares for every 10 existing shares held as of record date of May 18.

The offer price of P1 per share represents a discount of 21.9 percent on the market price of Trans-Asia as of March 21, which was the date the stock rights offer was approved by the board of Trans-Asia.

The net proceeds from the stock rights offer, based on the memorandum, would be used to partly finance Trans-Asia’s equity investment in the planned 135-megawatt clean coal plant in Calaca, Batangas and its investment in Maibarara geothermal power plant.

Trans-Asia tapped on the services of ATR KimEng Capital Partner Inc. to be the underwriter of the stock rights offering which would run from May 30 to June 3 this year.

The Phinma group, which is composed of Philippine Investments Management Inc. and Phinma Corp., the principal stockholders of Trans-Asia, pledged to subscribe to any shares not taken up by other eligible shareholders.

Trans-Asia was originally into petroleum exploration, and later diversified to other industries like cement manufacturing, coal trading and power generation. This year, the company expects to generate a net profit of P482.23 million, which is a considerable increase from the P14.74 million it posted a year ago. Revenue is projected to rise to P1.7 billion from P894 million in 2010.

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San Miguel eyeing NAIA 3

Roy — Mon, 25 Apr 2011 14:41:08 +0000

San Miguel Corp. said it is interested in taking over the operations of the Ninoy Aquino International Airport Terminal (NAIA) 3. San Miguel said it will join in the bidding for NAIA 3 should the government open it for privatization.

In its disclosure to the Philippine Stock Exchange, the company stated, “The company may participate in the privatization of the NAIA 3 in the event the government conducts a public bidding for the said infrastructure-related project.” It added, “As we have previously disclosed to the exchange, the company intends to actively pursue the Public-Private Partnership (PPP) programs initiated by the government.”

The conglomerate has already sent earlier an offer to privatize the NAIA 3, through unit Philco Aero Inc., its joint venture with Korean partners. San Miguel directed its privatization plan to President Aquino and the Manila International Airport Authority (MIAA).

The company now effectively adds NAIA to the list of airport investment it wants. San Miguel has a stake in the developer of Caticlan airport off the famous Boracay Island and has a pending offer to operate the Terminal 2 of the Diosdado Macapagal International Airport in Clark, Pampanga.

San Miguel has been effectively diversifying away from its core food and beverage business, and into heavy and high-growth sectors including telecommunications, oil refinery, power and infrastructure. The company last week sold $900 million worth of equity and convertible bonds to help fund infrastructure investments.

Meanwhile, NAIA 3 was expected to open in 2002 but was mothballed for 6 years due to a legal dispute with the Philippine International Airport Terminal Co. (Piatco), the consortium that built the terminal. The Supreme Court, however, cancelled Piatco’s contract in 2003, resulting in arbitration proceedings filed by Piatco and German shareholder Fraport AG, in Singapore and the US.

The International Center for Settlement of Investment Disputes ruling dismissed Fraport’s arbitration bid in 2007. But the said decision was reversed last year which prompted Fraport to revive its $425-million compensation claim against the Philippine government.

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Isuzu Philippines temporarily shuts down production operations

Roy — Fri, 22 Apr 2011 10:22:00 +0000

Isuzu Philippines Corp. (IPC) temporarily stopped its operation, starting from April 18 and will resume production on May 2. The work stoppage was due to the shortage in parts and components supply which are coming from Japan. The country’s all-commercial vehicle assemble is still optimistic though that it would be able to sustain its 17 percent growth target for the year in spite of what happened to Japan.

IPC executive vice-president Yuki Kato said during the exclusive Isuzu Truck show dubbed “On the Right Truck to a Better Future” held recently at the World Trade Center, the temporary work stoppage will not lead to layoff but the 300 production workers will be asked to take this opportunity to avail of their leave credits.

IPC is the latest among local car firms who have announced a temporary shutdown of operations as an aftermath of the Japan disasters that disrupted the supply chain for the auto sector globally. The others were Ford Group Philippines, Honda Cars Philippines Inc. and Toyota Motor Philippines.

The company official stressed that their work stoppage would only be limited to eight working days, since there’s no work on Maundy Thursday and Good Friday, IPC does not work on weekends and that May 1, being Labor Day, is a holiday.

Kato further explained that they cannot yet go back into full commercial operation even if they resume production on May 2 because Japan has a week-long holiday on the first week of May. “Perhaps, we will have a clearer picture on the second week of May,” he said.

The work stoppage would effectively translate to a 50-percent reduction in production volume of IPC for the month of April because they would be operating only for two weeks for the month. The average production volume of the company is between 900 units to 1,000 units of various IPC commercial vehicles.

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Ayala invests in hydro-electric power

Roy — Fri, 22 Apr 2011 05:33:57 +0000

Another venture that the Ayala group is breaking into is the hydroelectric power generation partnership. The conglomerate, through its wholly owned subsidiary Michigan Power Inc. (MPI) has entered into a joint venture agreement with Sta. Clara Power Corp., an independent power producer specializing in run-of-the-river power plants. Ayala Corp managing director John Eric Francia confirms this as stated in the company’s disclosure to the Philippine Stock Exchange.

MPI and Sta. Clara will be developing a run-of-the-river (ROR) hydroelectric power projects across the Philippines. MPI will take a 70-percent stake in the venture and has committed an initial equity infusion of about P600 million.

A run-of-the river hydroelectric power plant operation involves “borrowing” some river water to turn its kinetic energy into electricity and returning the same unpolluted water back into the river. Francia said, “It is considered as green because it does not produce harmful emissions. Like other renewable power technologies, it is economical as it depends on the free energy of nature as fuel.”

Speaking on the joint venture agreement, president and chief operating officer Fernando Zobel de Ayala said, “This venture builds on our current portfolio of renewable energy assets, which focuses on solar, wind and hydro power technologies. This is an important component of our plan to create a portfolio of power assets over the medium term that blends conventional and sustainable energy sources and contribute to the country’s energy requirements.”

The Ayala group has ventured into power generation as a key platform for future growth especially as demand for electricity is expected to rise in the years ahead. And since the company has yet to build its expertise in the industry, part of its strategy is forging partnership with other institutions.

In the next five years, the conglomerate plans to build a portfolio of power generation assets that will include both renewable and conventional with a capacity of 1,000 megawatts. Francia said that it is all “in line with Ayala’s campaign to augment the country’s power supply primarily through renewable and clean energy.”

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Ayala Corp. allots P79 billion for its capex

Roy — Tue, 19 Apr 2011 04:51:18 +0000

Giant conglomerate Ayala Corp. allots a record-high P79 billion for its capital expenditures this year. The company said it is in an excellent position to delve into various investment opportunities. It is particularly eyeing the power and infrastructure sector.

During the annual stockholders’ meeting, chairman Jaime Augusto Zobel de Ayala said that while the company is quite successful in its traditional markets which continue to grow, the favorable economic environment has “also ushered a renewed interest to invest in sectors that are critical to sustaining and raising the country’s growth trajectory, particularly with the government’s emphasis on increased private sector participation in the infrastructure and power sectors.”

He added that the group’s ultimate goal is to broaden its customer to reach and diversify its portfolio in a manner that creates developmental impact and economic value both for the corporation and the society as a whole.

The company first took a plunge in the power industry in 2010. It is now aiming to build its power portfolio using both renewable energy sources and traditional fossil fuels. “We are in the process of developing focused platforms across various technologies such as solar, wind, both large-scale and mini hydro, as well as thermal energy with the intent of balancing cost of energy delivery with sustainable practices,” Zobel said. The group aims to put up power facilities that can generate over 1,000 megawatts of electricity over the next five years.

The conglomerate remains on the lookout for opportunities apart from the power industry, like in the transportation infrastructure space, particularly whose which may have strategic value with other business units.

The company is bidding for a contract to operate and maintain the 17-kilometer Line 3 of the Metro Rail Transit (MRT3), which has an estimated cost of P6.3 billion. The MRT3 is one of the infrastructure projects being offered by the government under the public-private partnership (PPP) program.

Meanwhile, president Fernando Zobel de Ayala, for his part, said the highly diversified conglomerate has a healthy cash level, which stood at P29 billion as of end-December last year. “We maintain a highly flexible funding position that allows us to make sizable investments in new sectors moving forward without impairing value-enhancing initiatives such as our ongoing buy-back program, dividend payouts and meeting our funding requirements.”

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Metro Pacific bids to run and maintain LRT and MRT

Roy — Sat, 16 Apr 2011 09:01:55 +0000

The Department of Transportation and Communications (DOTC) sent invitations to qualified parties to submit an expression of interest for the interim contract (4+1 years) of the operations and maintenance of Light Rail Transit (LRT) 1 and Metro Rail Transit (MRT) 3 system.

One of those who submitted a letter of intent was the subsidiary of Metro Pacific Investments Corp. (MPIC), Metro Pacific Light Rail Corp. (MPLRC). The MPLRC filed its expression of interest for an interim contract to undertake the operation and maintenance of both the LRT1 and MRT3.

According to MPIC, its proposal submitted is more comprehensive as it includes, among others, a long term O&M, capacity and rehabilitation of MRT3 and its integration to LRT as one system. In support to the government’s public-private partnership (PPP) program, the company agreed not to interpose any objection to the bidding of the interim O&M contract for LRT1 and MRT3 on the undertaking that in line with government’s transparency policy and in accordance with MPIC’s rights as a stakeholder in the Metro Rail Transit Corp. (MRTC), the rights of the latter over MRT3 will be fully disclosed in the terms and reference of the bidding for the said interim contract.

The company also stressed that it has not withdrawn its proposal to expand MRT3 which it submitted to the DOTC last January 17. The MPIC said it maintains its position that the private shareholders of MRTC have the legal right to assert MRTC’s rights over the maintenance of MRT as well as the expansion rights over MRT, both contained in the existing build-lease-transfer (BLT) agreement.

Likewise, the MPIC will not object to the bidding of the LRT1/MRT3 O&M contract provided that the maintenance and expansion rights in the existing BLT agreement are recognized and disclosed in the TOR for said bidding.

The MPIC controls about 64.07 percent of MRTC after acquiring the 28.04 percent interest of the Sobrepeña-led Fil-Estate group as well as the interest of other shareholders such as Anglo Philippine Holdings Inc., DBH Inc. and Railco Investment Inc.

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SMC prepares for its foray in the telco industry

Roy — Wed, 13 Apr 2011 01:35:54 +0000

The corporate food and beverage giant San Miguel Corp. (SMC) is seriously mulling entry into the highly competitive field of telecommunication. The company plans to create a holding company for all its telecommunications interest as the conglomerate prepares for its grand entry in this field, according to a top official of the company. SMC president and COO Ramon S. Ang confirms “That is the intention, to create a holding company for our telco business.”

The company have already invested P9 billion so far in the local telecommunications business and plans to put in even more in order to build what it describes as a “next generation” network that will provide the best service and cheapest rate in the country. Ang emphasized that their business model for telecommunications guarantees one that will be better than what the other companies are giving.

SMC, at present, owns 41.5 percent of Liberty Telecom, 100 percent of Bell Telecom and 40 percent of Easter Telecom. Ang assured that they will not be wasting money, time and effort to establish a complete network that will just copy what is being offered in the market right now. “It will be a next generation, long-term evolution, mobile broadband, which is still being planned by others in the industry,” he said.

What is important right now, Ang noted, is to have a level-playing field in the telco industry. “But what I can assure you is that our service will be the best, no dropped calls, and very affordable rates. We will not waste resources if we will not do it right,” he said.

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IT company might shut down its services to LTO

Roy — Tue, 12 Apr 2011 12:11:55 +0000

Stradcom Corp., the exclusive IT service provider for the Land Transportation Office (LTO) warns of a possible shutdown of the database and computer system it operates for the agency if the LTO continues to refuse remitting payments to the private firm. Stradcom provide and maintains LTO’s information technology facilities, including its database and licensing functions.

The IT company has demanded P1.171 billion from LTO for unpaid services rendered since September last year. Company spokesperson Margaux M. Salcedo said, “Since September, payment has been withheld. As of today, it has amounted to P1.171 billion in payables.” Salcedo said the amount represents services that have been delivered.

Stradcom says if the LOT continues the withholding of payments, it could be used as a “force majeure” or a situation beyond its control that Stradcom could invoke to shut down its operations. When that happens, Salcedo said, “LTO employees will be unable to process manually the combined average of 300,000 daily transactions that computerization allows.”

“The process of registering vehicles and drivers licenses will once again take weeks to months instead of being achieved in one hour, as has been made possible by computerization. Criminals will be emboldened. Expect the proliferation of ‘fixers’ as well as ‘carnappers,’” she added.

Earlier, the Department of Transportation and Communication (DOTC) said payments to Stradcom have been withheld due to an ongoing intra-corporate dispute between the company’s current chairman Cezar Quiambao and a group led by Bonifacio Sumbilla and Alderito Yujuico. The LTO has filed an interpleader case with the Quezon City Regional Trial Court Branch 95 to determine the authorized group in Stradcom.

Meanwhile, Salcedo presented three memoranda from the DOTC that directed LTO to pay Stradcom. The first one dated February 22 and was signed by Secretary Jose P. de Jesus ordering LTO to pay Stradcom P751.79 million.

The memorandum read, “To ensure that LTO will not be in default of its contractual obligations under the Build-Own-Operate Agreement dated March 26, 1998, as amended, payment of all amounts due Stradcom should be effected immediately in accordance with the proper procedure agreed upon by the Department, LTO and Stradcom under said agreement.”
The succeeding memoranda, dated March 10 and March 16, were a reiteration of the February 22 issuance.

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PNOC-EC prepares for public offering of its stocks

Roy — Sun, 10 Apr 2011 00:58:14 +0000

The PNOC Exploration Corp. is already starting its preparations for a public-offering of its shares after its directors finally gave the go-ahead. However, the board deferred to give its decision on the actual date so as to be able to pinpoint the proper timing and conditions, according to PNOC-EC chair and CEO Gemiliano C. Lopez Jr., to ensure the highest market price for the shares.

Lopez said, “We hope to ensure the best price for the offering so the board has not fixed the actual date for its float. Timing is important. We would like to assure everyone that the best condition will be obtained for the offering so that our company will get the best and highest price possible in the global market.”

PNOC-EC needed to hold a public float of at least 10 percent of its shares of stock, which is required for a publicly listed company. The government, through PNOC, has 99.71-percent stake in PNOC-EC while the public owns only 0.29 percent. Lopez said the preparations of the documents from the start up to the end of the float could take six to eight months.

The company has not appointed any lead underwriter yet. It is still choosing among the eight prospective financial advisers it has been in talks with. It will send out invitations for interested and potential parties in the next couple of days.

It will be the company’s 35th founding anniversary celebration next week and President Aquino will be its guest of honor and principal speaker. During the said celebration, Lopez will officially turn over to the national government the P3 billion in cash dividends earned in 2010. PNOC-EC earned P2.42 billion last year, up 34 percent from the previous year’s P1.8 billion.

This year, the company allocated P5.25 billion for the exploration and development of prospective petroleum and coal resources within its service contracts. Among PNOC-EC’s priority exploration and production projects are the Malampaya gas project in Palawan, the planned power plants in Isabela province and Malangas in Zamboanga Sibugay, and the Lumbong coal project in Zamboanga Sibugay.

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Trans-Asia signed supplier deal with SEM-Calaca Power plant

Roy — Thu, 24 Mar 2011 06:27:48 +0000

Trans-Asia Oil and Energy Development Corp., a publicly listed firm, recently signed a contract with SEM-Calaca Power Corp. for the purchase of Trans-Asia of power generated from the Consunji-led Calaca Power Corp. Trans-Asia, in its disclosure submitted to the Philippine Stock Exchange (PSE) said it signed on Wednesday the contract “to purchase generated energy,” which will be valid for three years.

Trans-Asia President Francisco L. Viray said the company was buying the generated output as a retail electricity supplier (RES). He did not indicate though, how much of the plant’s output The company would buy from SEM-Calaca. Earlier, Trans-Asia was awarded a RES license by the Energy Regulatory Commission (ERC)

ERC chairperson Zenaida Ducut said that a RES license holder like Trans-Asia will be able to actively participate in the electricity market once open access and retail competition are put in place. Under an open access environment, large power users will have the option to choose their own power suppliers. Under the status quo, power users, whether big or small, are limited to the suppliers with jurisdiction over their areas.

SEM-Calaca Corpopration, is company formed by DMCI Holdings and Semirara Mining Corporation to Handle the Calaca coal facility, which was previously owned by the government through National Power Corp. The investment of SEM-Calaca in the Batangas coal facility was earlier estimated at $483.6 million which includes the acquisition cost of $361.7 million. The remaining $121.89 million will go to the rehabilitation and working capital requirement of the said power plant.

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PDIC begins inventory of Banco Filipino assets

Roy — Wed, 23 Mar 2011 16:28:51 +0000

While it is still processing the payment of deposit insurance to its depositors, the Philippine Deposit Insurance Corp. (PDIC) also started in its inventory of the assets of the closed Banco Filipino Savings and Mortgage Bank.

Officials of the closed bank, however, insists that it is not insolvent. It even went into having full-page advertisement in newspapers claiming that it has an inventory of valuable real estate properties that were acquired through foreclosures from way back in the 1980s.

The list of bank’s properties include:

an 82-hectare prime property along Daang Hari
a 78-hectare property in Quezon City
a 102-hectare property in San Jose Del Monte and Norzagaray areas
a 42-hectare property in Naga City
a 38-hectare property in Pagudpod Beach in Ilocos Norte
and several properties in Las Piñas and Parañaque.

Banco Filipino said that the BSP’s Monetary Board (MB) was fully aware of the valuable assets held by the bank that is worth more than its liabilities. “These assets have an aggregate value of at least P30 billion while total deposits are only P15 billion,” the bank said in its notice.

The bank also claims that all of its loans granted to its clients are fully secured by real estate properties whose aggregate values are much more now than at the time the loans were drawn. It said, “The Monetary Board had no basis for its action which caused the heavy withdrawals. The bank had enough collateral to cover the bank’s immediate requirement and the situation should not have been magnified.”

Banco Filipino was ordered closed by the BSP last March 17 and placed it under receivership by the PDIC after it failed to reopen for three straight days as the liabilities of the overwhelmed its assets by P8.4 billion.

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Big 3 raised diesel price by P0.60 a liter

Roy — Tue, 22 Mar 2011 20:46:00 +0000

As some small players reduced their prices of gasoline by P1 a liter last Monday, the big 3 oil firms in the country raised their diesel. Chevron Philippines, Pilipinas Shell Petroleum Corp., and Petron Corp. raised their by P0.60 per liter their diesel prices as of 6:00 a.m. on Tuesday.

However, just like their small players counterparts, the “Big Three” oil firms also reduced the price of their regular gasoline by P1 per liter too. As of March 15, gasoline was sold at P52.25 to P57.96 per liter, while diesel was sold at P44.65 to P46.65 per liter.

Meanwhile, in a separate report, the Petron Corp. assured the public that it will be investigating the alleged liquefied petroleum gas leak on Monday at one of its AutoLPG dispersing pumps in Sta. Cruz, Manila. In a statement issued on Tuesday, Petron said, “We immediately dispatched our safety and environmental team onsite. Our service stations are equipped with several safety features including an automatic shut off of the pipelines once there are changes in pressure along the line. This safety feature was immediately triggered and shut down the LPG pipeline.”

Petron Corp. followed a standard operating procedure (SOP) by cordoning off the area where the leak was reported. It also shut down all possible sources of ignition, like the electrical light. The company’s personnel have already coordinated with Bureau of Fire Protection and Philippine National Police regarding the matter.

“The leak was contained immediately. Our engineers have detected the source of the leak and is in the process of replacing the defective pump. There is no longer any danger to people and property. We wish to assure the public that we will fully investigate the incident,” Petron said

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Nenaco optimistic to hit a P1B income this year

Roy — Thu, 17 Mar 2011 15:36:20 +0000

The Negros Navigation Co., Inc. is expecting to end up with a net income of P1 billion for 2011. A complete turnaround from its previous result last year when it ended up with loss of half a billion.

Nenaco president and chief executive officer Sulficio Tagud said that this is on the back of projected consolidated revenue this year of P15.5 billion, up from around P14 billion last year. To be able to do that, he said the company would need to spend P2.5 billion to expand its logistics business under the brand 2GO, which is under Aboitiz Transport Systems Corp. (ATS). Tagud said, “There’s a still a lot of potential for growth in that area.”

Cargo and passenger shipping rates are also expected to rise this year, according to Tagud, as companies try to cope with the steady increase in oil prices. He noted that several shipping companies implemented discounts for cargo and passenger clients to maintain market share last year.

“Members of the Philippine Ship Liners Association have reduced the discounts they gave for cargo and passenger rates last year. That the same this we have to do if fuel costs continue to spike,” Tagud said. He said the current rates are 40 percent below the tariffs approved by the Maritime Industry Association (Marina). ‘’The discounts were given as a function of a competitive market,” he added.

This gives the shipping companies the space to adjust their rates without having to apply for increases with the regulator. “Fuel prices are still manageable because we can still adjust rates,” Tagud said.

At present, Nenaco is the largest shipping group in the country after buying out its chief competitor ATS, from the Aboitiz family, for over P14 million. “ATS is five times bigger than Nenaco in several aspects such as revenues, capacity and asset base,” Tagud noted.

Nenaco’s acquisition of ATS then was funded by equity infusion by state-run China-Asean Marive BV, which now owns 40 percent of Nenaco. KGLI-NM, a joint venture between Kuwaiti Gulf Link Investments and Negros Holdings and Management Corp., owns the remaining 60 percent.