The ˜Manila Times


B 2


business THURSDAY D e cember 9, 2010 BY KATRINA MENNEN A. VALDEZ REPORTER


longer approve the state-run firm’s proposed bond issuance.


Mel Adriano, HGC director, said the company plans to dispose its seven-hectare complex in Manila that houses Fabella Hospital and


HGC to sell property in lieu of bond sale H


OME Guarantee Corp. (HGC) will sell big-ticket items on expectations the national government would no


Manila City Jail, in lieu of issuing bonds to raise fresh money. On the sidelines of a housing fi- nance forum organized jointly by


the Asian Development Bank and Asian Institute of Management, Adriano said HGC decided to indefi- nitely suspend the bond issuance, an initiative that was announced early this year but turned down by the previous administration. The Aquino government like- wise expressed disapproval as it prefers borrowing on behalf of state-owned firms, rather than providing sovereign guarantee to such undertakings. “We are still getting the approval


of the Department of Finance for our bond issuance. But we may re- sort to disposing of our high ticket items,” Adriano said.


The subject property is worth about P5 billion, or almost the same amount HGC hoped to raise from the bond sale. Adriano said the sale of the said property however is more difficult as this involves relocating 5,000 families who live there.


He said HGC is also looking for companies that are interested to


Group hikes coconut production forecast


UNITED Coconut Association of the Philippines Inc. (UCAP) revised up- wards its forecast this year because of the strong performance of the sector at the beginning of 2010. “The strong performance since the start of 2010 indicates accelerating production than earlier expected. Thus, a revision of the coconut pro- duction forecast for the current crop year was necessary,” Yvonne Agustin, UCAP executive director, told report- ers on the sidelines of the Food and Agri Business Conference.


Agustin said that coconut produc- tion for this year is now projected at 2.9985 million metric tons (MT) in copra terms, or at least 12 percent higher than the previous year. This will be the third straight year of pro- duction growth since typhoons re- duced output in 2007. “This may even break the record high in 2001 at 2.828 million [MT],” the UCAP official said. Export forecast for 2010 is now placed at 2.294 million MT in copra terms, a 51.4-percent climb from the previous year’s 1.515 million MT. “The increment will come largely from coconut oil, which has shown impressive performance during the year owing to improved demand in


the world market as the global economy recovers from the economic slump and amid substantial price dis- count vis-à-vis rival palm kernel oil,” Agustin said.


Coconut oil exports this year are forecast to hit 1.297 million MT, for a 56.9 percent increase from 826,237 MT last year and close to the record high of 1.418 million MT set in 2001. The bulk of this year’s pro- jected shipment was delivered dur- ing the first half, amounting to 723,521 MT, or 55.8 percent of the total volume for 2010. Based on data provided by the Phil- ippine Coconut Authority, coconut oil exports for the first eight months of 2010—pegged at 996,618 MT—al- ready surpassed the 826,237 MT an- nual total for 2009.


The US and Europe remained the major destinations for Philippine co- conut exports. From January to Au- gust, shipments to European coun- tries amounted to 469,090 MT, sur- passing the 347,812 MT set in 2009. Delivery to the US was pegged at


335,306 MT, lower than last year’s 355,032 MT. “Including the unofficial Septem- ber to October figures tallied by UCAP, the cumulative ten months


coconut oil export this year is pegged at 1.180 MT, already surpassing the annual data of previous years begin- ning 2004,” Agustin said. Revenues this year will exceed the $1-billion level, driven by the sharp increase in sales volume and high prices. “The unofficial January to October total based on UCAP preliminary esti- mate show export revenue at $1.023 bil- lion FOB, close to the annual total in 2008 of $1.034 billion, wherein for the first time coconut oil breached the $1 billion mark,” the UCAP official said. Copra meal export is also forecast to reach a record high of 774,636 MT with increased crushing activity, besting an all-time high of 753,082 MT recorded in 2001. The projected volume may reach 93.8 percent, nearly double the total delivery in 2009 at 399,782 MT. During the last five months this year, copra prices have accelerated in the in- ternational market. The average price in October reached P38.88 per kilo, the highest registered this year, and show- ing a marked appreciation by 97.3 per- cent from January’s P19.71/kilo, and 101.9 percent higher than the P19.26 per kilo in October last year. JAMES KONSTANTIN GALVEZ


lease the 192,748 square meters of airspace along the tracks of the Phil- ippine National Railways from Tutuban in Caloocan to Makati. Adriano said that some of the companies are interested in appro- priating the airspace, amid the gov- ernment’s plan to connect the North Luzon Expressway to the South Luzon Expressway. “We are trying to hasten the sell- ing of assets. Actually there is no timetable, but on the business sense we have to dispose it as soon as pos-


ING said it has agreed to sell its investment man- agement activities in the Philippines to the Bank of the Philippine Islands (BPI).


In a statement, the Dutch financial firm said it earlier decided to separate its bank- ing and insurance/investment management businesses and divest the latter before the end of 2013. This was part of the agreement with the Euro- pean Commission in October 2009, the bank said. At end-September, ING Philippines booked a profit of P1.134 billion. Its investment management business in the Philippines has P78.4 billion in assets under


sible,” the official said.


He said that the agency has about P12 billion in non-performing as- sets.


Earlier this year, HGC planned to issue P5.5-billion worth of bonds to refinance its maturing debts. HGC is mandated to operate a credit guaranty program in support of the government’s effort to pro- mote home ownership. Last year, the firm incurred a net loss of P1.77 billion, wider than P1.19 billion it booked in 2008.


ING sheds investment management


management at end-September. Its investment management activities are conducted through the Trust Department of ING Bank Manila, which holds a trust license. As a consequence, ING can no longer conduct


investment management activities in the Philip- pines through ING Bank Manila.


ING will continue to be active in the Philip- pines through ING Bank, the lender said. BPI is the largest bank in the country in terms of market capitalization and second largest in asset management and trust with total assets under management of P458 billion at end-September.


LAILANY P. GOMEZ S&P assigns first rating to Naga City


DESPITE its sound budgetary performance and transparent administration, Naga City’s credit profile is hampered by its low tax base and the Philippines’ weak intergovernmental system, Standard & Poor’s (S&P) said. In a statement, S&P said it assigned its ‘BB-’ issuer


credit rating to the city in Albay. A “BB-” rating means the rated entity is “less


vulnerable to nonpayment of debt due but with ongoing uncertainty.”


S&P said the outlook on the city is stable. This is the first local and regional government


rating the firm has assigned in the Philippines. Although the country is considered as Asia’s largest debt issuer, its local cities or provincial governments have yet to tap the capital markets for their funding needs, S&P said. “The issuer credit rating on the City of Naga


reflects the very weak intergovernmental system under which the city operates. We also took into account the city’s narrow tax base stemming from a low income local economy, and the administra- tion’s lack of institutionalized policies,” the agency’s credit analyst YeeFarn Phua said. Despite this, Naga’s has a strong liquidity position, sound budgetary performance and low debt because of prudent fiscal management. “The predictability in the Philippine intergovern- mental system is low and the central government has


a history of passing on unfunded mandates to local government units. Central monitoring and oversight over LGUs is weak, in our opinion,” Phua said. “The lack of institutionalized policies at the city’s


own level also affects the ratings on Naga. Nevertheless, the city administration has maintained a disciplined fiscal approach. This has resulted in sound budgetary performances despite the lack of an explicitly stated fiscal framework,” the S&P analyst said. Among its domestic peers, Naga’s administration also stands out in terms of transparency, Phua said. But its financial management capacity is still


underdeveloped compared with international best practices in key areas such as long-term capital and financial planning, and expenditure management, the analyst said. The city’s local economy is predominantly engaged in small-scale trade and retail. Its small population and low per capita income has impeded efforts to diversify the local economy so the resultant narrow tax base has constrained the city government’s revenue flexibility, S&P said. Naga’s balance after capital accounts averaged surpluses of 16 percent of total revenues in 2007 to 2009, and free cash and liquid assets reached a high of 122 percent of operating expenses in 2009. The city’s low debt burden, compared with peers, is also considered a credit strength. KATRINA MENNEN A. VALDEZ


DENR launches wildlife conservation


THE Department of Environment and Natural Resources (DENR) launched on Wednesday a wildlife conservation project to engage the private sector in species protection. The project, “Piloting Conservation Stewardship Program for the Protection of the Philippine Tarsier in Bohol, Samar and Leyte,” was launched under the DENR Adopt-a-Wildlife Species (AAWS). The AAWS Program allows for the adoption of non- threatened species upon approval of the DENR. Priority is given to adoption of any of 21 insects, 53 amphibians, 27 reptiles, 137 birds, 86 mammals and 873 plant species specified under the Administrative Order 2010-16 Annex A, or the List of Priority Species for AAWS. These include the well-known Philippine eagle, Philippine crocodile, the Tamaraw and the Waling-waling orchid, as well as lesser-known endemic species that have been classified endangered, threatened or vulnerable. During the launch, the DENR-Protected Areas Wildlife Bureau (PAWB), CEMEX Philippines Foundation Inc. and Conservation International (CI)-Philippines signed a memorandum of agreement to protect the Philippine tarsier (Tarsius syrichta).


Under the accord, CEMEX, as the adopting entity, is committed to participate in the AAWS Program, particularly for the in-situ (or onsite) conservation of the Philippine Tarsier in the island provinces of Bohol, Samar and Leyte. It is also expected to provide all the financial resources necessary in the implementation of the project and is entitled to avail of tax exemptions for its contributions. CI-Philippines, as the implementer, will take the lead in carrying out the project, including developing a work plan, as well as receiving and managing project funds from CEMEX. The DENR, through its regional offices in Central and Eastern Visayas, will facilitate the issuance of necessary permits, monitor and evaluate the implementation of the project, assist in the development and dissemination of education materials or articles concerning the Philippine tarsier. Mundita Lim, PAWB director, said the project will entail determining tarsier population distribution and seriously- threatened habitats, pilot testing a Conservation Stewardship Program in a model site and replicating it in critical areas, and establishing partnerships among the academe, local non- government organizations and government agencies in the sharing of information and lessons in tarsier conservation. In a statement, DENR Secretary Ramon Paje expressed hope that the project will spawn similar partnerships with other potential partners. “The Philippines, although one of the 18 most diverse countries in the world, is also a hotspot in terms of biodiversity. The AAWS Program is a perfect opportunity for local government units and other organizations to assist us in promoting the conservation of our highly diverse floral and faunal population,” he said.


JAMES KONSTANTIN GALVEZ


DMCI ups stake in 2 units


DMCI Holdings Inc. has executed a deed of assignment that would pave the way for the acquisition of additional stakes in its mining and power units held by coal subsidiary, Semirara Mining Corp. In a disclosure to the Philippine Stock Exchange, the Consunji-led holding firm said it would acquire P150 million worth of shares in DMCI Power Corp. and P177.09 million worth of shares in DMCI Mining Corp. On Monday, DMCI Holdings’ board of directors approved the acquisition of Semirara shares in the mining and power companies. DMCI Holdings already owns 78 percent of DMCI Mining and 78 percent of DMCI Power. Last month, A Brown Co. Inc. announced that its wholly owned unit, Palm Thermal Consolidated Holdings Corp., would buy 100 percent of the outstanding capital stock of DMCI Concepcion Power Corp. from parent firm DMCI Power. A Brown’s other subsidiary


Panay Consolidated Land Holdings Corp. will also acquire 30 hectares of land from DMCI Power. A Brown had said the deal


would only take effect once DMCI Power has complied with certain conditions precedent, including obtaining the requisite corporate and regulatory approvals and after the conduct of satisfactory due diligence. In the first nine months, DMCI Holdings’ earnings rose 79 percent to P5.8 billion from P3.2 billion last year.


DMCI Holdings shares rose from P36.25 on Tuesday to P36.60 each on Wednesday. KRISTA ANGELA M. MONTEALEGRE


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