Regulators approve Cebu Pacific IPO; budget airline to join bourse on May 4

CORPORATE REGULATORS have approved the initial public offering of Gokongwei-led Cebu Air, Inc., allowing the budget airline to secure almost P12 billion in cash from the equities market.

BUDGET AIRLINE Cebu Pacific plans to raise P12 billion from the initial public offering to increase its fleet. -- Crecencio I. Cruz

In an en banc decision yesterday, the Securities and Exchange Commission (SEC) allowed Cebu Air, operator of Cebu Pacific, to list 235.562 million shares on the stock market on May 4. The budget airline will have the stock symbol “CEBU.”

The SEC approved the “offer of [Cebu Air] shares, consisting of up to 125.253 new shares to be issued and offered by the company, and up to 110.309 million existing shares offered by the selling shareholder, and up to 35.334 optional or over allotment shares.”

Cebu Air can offer as much as 164.894 million shares internationally while 47.112 million and 23.556 million shares will be sold to Philippine Stock Exchange brokers and investors, respectively, at a maximum price of P95.00 each.

ATR KimEng Capital Partners, Inc. was tapped as the domestic lead underwriter while the Hong Kong branch of Deutsche Bank AG and J.P. Morgan Securities, Ltd. will be the international underwriters.

Net proceeds from the primary offering were estimated at P11.561 billion.

Last week, Cebu Air said it would use the bulk of funds to be raised from the IPO to buy up to 20 more aircraft within five years.

“It’s going to be for capital expenditures for purchasing airplanes. We have a purchase order from Airbus for 15 Airbus A320 in the period of 2010 to 2015 and an option to buy five more,” said Bach Johann M.

Sebastian, senior vice-president for corporate planning of listed JG Summit Holdings, Inc., in an interview early last week.

Mr. Sebastian said going public was only one option, and that the company could also borrow from export credit agencies. Cebu Pacific can also tap the lease market, he said.

Documents showed the carrier needed to make P9 billion in advanced payments to increase its fleet to 49 by 2014.

The company originally planned to go public in 2008 but postponed the listing due to difficult market conditions.

Cebu Air turned around last year by posting a net income of P3.184 billion, from a net loss of P3.259 billion in 2008. Operating income almost doubled to P3.164 billion from P1.727 billion in 2008.

Shares in parent firm JG Summit Holdings rose to P8.50 apiece yesterday from P8.30 per share on Wednesday.

Source: Businessworld Online

Vista Land sets 22 new projects under Camella brand

MANILA, Philippines - Capitalizing on strong demand for affordable housing, Vista Land & Lifescapes Inc. has lined up 22 new projects this year under the Camella brand, translating to 17,500 new units located all over the country.
In a statement, Vista Land said the move is aimed at further cementing Camella  Homes & Communities’ dominant position in the affordable housing segment and boost its total portfolio to 97 projects nationwide.
Camella president Maribeth Tolentino said these new projects will be put up in various areas in Mega Manila as well as in key provinces and cities outside Luzon such as Cebu, Iloilo, Tacloban, Cagayan de Oro, Davao and Gen. Santos.
“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,” she said.
Tolentino said the company, which has been providing value for money homes in master-planned communities for over 30 years, is targeting overseas Filipino workers who want to buy a house of their own.
Vista Land has earmarked P10 billion for capital expenditures this year for the launch of 30 new projects and landbanking activities. This would bring the group’s total number of projects to 157 , widely dispersed in 19 provinces and 46 cities and municipalities
Vista Land has built the largest number of homes among all local developers, a total of more than 200,000. Other companies under its wing include Brittany, which builds high-end communities; Crown Asia, focusing on the mid-range category; Communities Philippines, which develops projects in the provinces; and Vista Residences, the newly launched company and brand name which consolidates all of the group’s residential condominium projects.

Source: The Philippine Star

San Miguel to exercise Petron option this year

DIVERSIFYING food and beverage giant San Miguel Corp. is looking at pushing through this year with its plan to take a majority stake in Petron Corp.
"I think we might exercise the option this year," Ramon S. Ang, San Miguel chairman and president, told reporters yesterday.

San Miguel in December 2008 signed an option agreement with Petron’s owner, UK investment firm Ashmore Group, for a 50.1% stake in the refiner via the purchase of Ashmore unit SEA Refinery Corp. The option, which cost San Miguel $10 million, expires in December this year.

Exercising the option, Mr. Ang said, would be followed by a tender offer.

Ashmore currently owns 91% of Petron but last year already allowed San Miguel to join the refiner’s board.

Ashmore first bought into Petron in March 2008 by taking Saudi Aramco’s 40% stake for $550 million. The investment firm later that year raised its interest to 51% via a tender offer, then capped the year by purchasing the government’s 40% stake for P25.7 billion. At the time of the government stake sale Ashmore said it could turn around and resell to another party.

Mr. Ang’s statement sent Petron share prices to as high as P6.20 yesterday. The firm closed the day at P5.60

Source: Businessworld Online

GMA inks land titling, tax info sharing laws

TWO LANDMARK LAWS -- one allowing the sharing of taxpayer information with foreign entities and another making it easier for Filipinos to secure land titles -- have been signed into law by President Gloria Macapagal Arroyo.
Approval of Republic Act 10021, or the Exchange of Information on Tax Matters Act of 2009, was prompted by the Organization for Economic Cooperation and Development’s (OECD) blacklisting the country as a tax haven last year.

"It is the declared policy of the State to promote and pursue tax environment that contributes in sustaining a favorable international investment climate and instills confidence in the adequacy and capacity of the country’s tax administration to comply with its commitments under existing international conventions or agreements on tax matters," Section 2 of the new law, signed by Mrs. Arroyo last March 5, states.

It allows the Bureau of Internal Revenue chief to inquire into bank deposits and other related information held by financial institutions following a requests by a foreign tax authority.

The new law likewise allows a foreign tax authority to examine the income tax returns of taxpayers in the country.

Local authorities had previously said they could not comply with the international tax information standard given bank secrecy laws, among others.

While the Philippines was quickly put on by the OECD on a "grey" list last year after local officials committed to pass relevant laws complying with an international tax standard, France last month said the country was on its list of tax cheat-friendly states.

Mrs. Arroyo, meanwhile, also signed into law Republic Act 10023, otherwise known as the Act Authorizing the Issuance of Free Patents to Residential Lands, last March 9.

It amended Commonwealth Act 141 or the Public Land Act.

The new law states that Filipinos who occupy untitled residential lands for at least 10 years -- down from the previous requirement of 30 years -- may apply for titles.

It also makes it easier for landowners to apply for titles as they simply have to apply for one at the Department of Environment and Natural Resources without the need to hire the services of a lawyer.

Landowners, however, will only be given titles as long as the land will be used for commercial purposes.

Banks are expected to benefit from the new law as the land titles can be used as collateral to secure loans from banks.

"This will boost lending since the landowners will now have collateral for borrowing," Chamber of Thrift Banks Executive Director Suzanne I. Felix said in a text message yesterday.

Source: Businessworld Online

BSP encourages banks to put up branches in less developed areas

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is encouraging banks to expand their operations outside the National Capital Region and other developed areas as part of the central bank’s effort to make financial services more accessible in less developed areas.
BSP Deputy Governor Nestor Espenilla Jr. said in an interview with reporters that there is a need to make banking and financial services accessible throughout the Philippines.
“The distribution seems to be heavily concentrated in NCR, then Calabarzon, Region III, and then there are pockets in Cebu and in other cities,” Espenilla stressed.
He pointed out that the concentration in these areas show that banks follow centers of economic activity and population.
 “In an archipelago like ours, there are very well defined centers of economic gravity and banks are basically profit-driven enterprise so of course you go where the business is,” he added.
He pointed out that the density of banking offices to population in the Autonomous Region in Muslim Mindanao (ARMM) is one banking office for 40,000 person per area.
“We have totally lifted banking restrictions outside NCR. We are really sending a signal to put branches outside so that you can better service the public,” Espenilla said.
Latest data showed that the number of banking institutions (head offices) fell further to 797 as of end-September 2009 from the year-ago level of 835, indicating the continued consolidation of banks as well as the exit of weaker players in the banking system.
By banking classification, banks (head offices) consisted of 38 universal and commercial banks, 73 thrift banks, and 686 rural banks.
Meanwhile, the operating network including branches of the banking system increased to 7,914 from 7,811 reflecting mainly the increase in commercial and rural banks’ branches.

Source: The Philippine Star

Net hot money inflow hits $308.7 million in January-February

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) reported a net portfolio investment inflow of $308.7 million in the first two months of the year or almost 14 times the inflow of $22.6 million registered in the same period last year due to higher export earnings and additional government borrowings.
Data released by the central bank showed that BSP-registered foreign portfolio investments increased $286 million from January to February this year after the country’s merchandise exports jumped 42.5 percent in January.
“Net inflows were sustained due to news on higher export earnings, inspite of jitters about the coming elections and recent sovereign debt concerns in some European countries,” the BSP stressed.
Inflows surged 53.9 percent to $1.076 billion in the first two months of the year from $698.92 million in the same period last year. Major sources that accounted for about 83 percent of the total portfolio investments in January and February included the United Kingdom, the US, Malaysia, Luxembourg and Singapore.
On the other hand, gross foreign portfolio investment outflows climbed 13.5 percent to $767.73 million in the first two months of the year from $676.3 million in the same period last year due to withdrawals from interim peso deposits.
For the month of February alone, foreign portfolio investments posted a net inflow of $139 million, a complete reversal of the $198.73 million net outflow registered in the same month last year.
Portfolio investment inflows surged 154.2 percent to $500.39 million in February from $196.85 million in the same period last year.
Investments in shares being traded at the Philippine Stock Exchange (PSE) accounted for about 74 percent of the total inflows, followed by government securities with 18 percent, and peso bank deposits with minimum maturity of 90 days with eight percent.
On the other hand, outflows retreated 8.5 percent to $361.81 million in February from $395.58 million in the same month last year.
Registration of inward foreign investments with the BSP is voluntary. It entitles the investor or his representative to buy foreign exchange from authorized agent banks or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of dividends/profits/earnings that accrue on the registered investment.
The Philippines shrugged off the global recession and posted a portfolio investments net inflow of $388.02 million in 2009, a complete reversal of the $1.784 billion outflow posted in 2008.
Inflows, the BSP data showed, amounted to $6.335 billion last year or 23.8 percent lower than the $8.321 billion inflows registered in 2008 while outflows fell 41 percent to $5.947 billion from $10.105 billion.

Source: The Philippine Star

BSP sees OFW remittance growth of 6% in January

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) believes that the amount of money sent home by Filipinos from abroad in January grew by more than the full year growth target of six percent due to high demand for skilled Filipino workers abroad.
BSP Governor Amando M. Tetangco Jr. told reporters Friday that overseas Filipino workers’ remittances likely grew faster in January than the full-year growth of six percent based on preliminary data.
“This year we are projecting six percent for the whole year, but for the initial data I have seen, it looks like the figure for January could be in excess of the projection for the year,” Tetangco stressed.
The BSP sees OFW remittances growing by six percent to a new record level of about $18.1 billion this year.
Last year, remittances went up by 5.4 percent to a new record level of $17.348 billion last year from $16.426 billion and exceeded the revised four percent growth forecast set by the central bank due to the sustained demand for skilled Filipino workers overseas particularly engineers, medical practitioners, and teachers.
This, after the money sent home by overseas Filipinos surged by 11.4 percent to hit a new monthly record high of $1.567 billion in December 2009 from $1.407 billion in December 2008.
The amount eclipsed the previous monthly record high of $1.531 billion registered last October.
Major sources of remittances last year included the US, Canada, Saudi Arabia, United Kingdom, Japan, Singapore, United Arab Emirates, Italy, and Germany.
The remittance level accounted for about 10.8 percent of the country’s gross domestic product (GDP) that expanded by 0.9 percent last year from 3.8 percent in 2008.
The stronger-than-expected growth could also be traced to the decision of the government to conduct bilateral talks with host countries that continue to open up new employment opportunities abroad for Filipinos and to facilitate the hiring of displaced workers who were affected by the global economic difficulties.
Authorities also cited the continued expansion of remittance transfer facilities that has helped capture a large share of the global remittance market.
Commercial banks’ established tie-ups, remittance centers, correspondent banks, and branches or representative offices abroad increased to 4,192 as of 2009 from 3,015 as of 2008.
Data from the Philippine Overseas Employment Administration (POEA) showed that the government processed about 41.6 percent or 221,548 of the total job orders that reached 532,214 last year. These jobs comprised mainly of service, production as well as professional, technical, and related job categories in Saudi Arabia, Qatar, UAE, Kuwait, and Hong Kong.
The POEA reported that Middle East countries particularly Saudi Arabia continue to absorb a significant number of deployed OFWs including those that have been displaced elsewhere.
The BSP was originally looking at a zero growth last year but later revised the outlook to a growth of four percent due to the steady deployment of Filipino workers abroad and the increase access to formal remittance channels.
OFW remittances are expected to grow faster at six percent next year especially with the signing of a memorandum of agreement between the BSP and member banks of the Association of Bank Remittance Officers Inc. (ABROI).
The agreement calls for the use of the central bank’s Philippine Payments and Settlements Systems (PhilPaSS) to send the remitted money to the beneficiaries’ accounts in other banks.
OFW families are expected to save at least P92 million to as high as P922 million due to the faster and cheaper delivery of remittances to the beneficiaries at a lower rate of P50 per transaction instead of the current range of between P100 and P550 per transaction.

Source: The Philippine Star

PAL still reigns with 43% market share

CEBU, Philippines - Despite discount rates offered by main rivals in the industry, Philippine Airlines continues to dominate the various air routes in the country retaining a lion’s share of 43% of the total passenger traffic led by its Cebu operations, which accounts for the highest share of 42% of the total market.
And as the country’s premiere flag carrier celebrates it 70th year in March 2011, PAL country manager Genaro “Bong” Velasquez said they want to make it big and share the airline’s milestone to the customers by commencing the year-long celebration with a series of promotional events.
Velasquez yesterday announced during a press briefing held at Laguna Garden Café that 70,000 free seats will be given away through a series of promo initiatives including a grand seat raffle, a “Philippines Free” international campaign, a major discounted promo, and a loyalty program targeting the youth market dubbed as the Y Flyers.
The promotions will be formally announced during the 69th anniversary celebration of PAL on March 15, 2010 at the Century Park Hotel.
The Grand Seat Raffle covers all PAL revenue tickets purchased in the Philippines and through PAL’s website. Travel

period must be between March 16 and December 31, 2010.
The raffle draws will span for nine months wherein 16,000 winners will be chosen to win free tickets equivalent to those purchased and flown. And on the day of the 70th anniversary of PAL, 3,000 passengers will have the chance to travel for free.
Meanwhile, the “Anniversary Fare Special” fares promo will offer discounted rates on all domestic routes served by PAL. One-way flights from Manila to any point in Luzon or Visayas will be pegged at a flat rate of P700, while flights to and from Mindanao will be offered at P1,700.
Moreover, the “Philippines Free” campaign will offer free travel to the Philippines from 18 international destinations. The sale period is between March 15 and April 7, 2010.
And those who will be celebrating their 70th birthday between March 15 and April 15, 2010 will receive a free domestic ticket, provided that a companion purchases a ticket for travel on the same route and date. Travel date must be within May 15 and August 20, 2010.
PAL likewise initiated a promo for the younger flyers dubbed as the Mabuhay Miles “Y Flyer” which will start on March 15, 2010.
The “Y Flyer” promo gives 10% discount off published fares to passengers between the ages two and 21 years. Current members of Mabuhay Miles are automatically qualified as Y Flyers.
Y Flyers will also get a chance to grab a ticket to the “Changing Lives: Timbaland Shock Value II” concert on March 27 in Manila, which will feature Justin Timberlake and Jojo. PAL will be giving away 50 concert tickets.

Source: The Freeman Cebu

French oil giant to invest P400 million for Cebu stations

CEBU, Philippines - French oil giant, Total (Philippines) Corporation (TPC) announced its P400 million investment plan for Cebu in the next three years.
This plan includes the installation of five more stations in Metro Cebu this year, which will incur an investment of P120 million.
In an interview with TPC president and managing director Ernst Wanten, he said that Cebu’s vibrant economy presents a growth opportunity for TPC.
Since its entry to the Philippines in 1998, Total has already installed 133 stations mostly in Luzon. This year, the company has decided to explore the Southern Philippine market, through a stronger presence in Cebu.
As part of its expansion program, the company opened a fuel depot in the province, which has a capacity of two million liters. It also currently upgraded its waterborne fleet with the acquisition of MT Camille, a 3,651 deadweight ton double-hulled vessel classified by the Korean Register Shipping as accredited by the International Association of Classification Societies (IACS). The depot will serve both retail and wholesale consumers.
Total’s strong entry in Cebu will not only provide wider options for consumers to get their fuel requirements, but it also offers business opportunity for entrepreneurs who may want to partner with the Total.
The company offers two packages for entrepreneurs for partnership these are via Company-Owned-Dealer-Operation (CODO) and Dealer-Owned-Dealer-Operated (DODO) options.
Of the total 133 gasoline stations installed by Total in the Philippines, 97 of which are DODO, and 36 are CODO.
In Cebu, Wanten said the company will build the infrastructure, which means the physical gasoline stations, and partnership will depend on the negotiations of interested entrepreneurs.
The first Total station in Cebu is located along Plaridel Street in Mandaue City. It has four pump islands and also has a Bonjour convenience store and Café that offer a wide selection of quality snacks and sundries. It is run by a staff of a 25 personnel.
“Our forefront service crew and Bonjour staff have been trained on the Total brand of customer service, which is what differentiates us from our competitors,” he said.
The Total big boss was here in Cebu to attend the Petro/World Forum held last March 9 to 12 at the Shangri-La Mactan Resort and Spa in Mactan Island.
In the next three years, the company plans to build at least 20 Total gasoline stations around the Cebu Metropolis.
“Cebuanos are different clientele. They are interesting,” Wanten said describing Cebuano customers as more demanding and critical. He said this is what makes it challenging for Total to establish its brand here.
With the quality and competitive products and prices offered by the company, Wanten is confident that Total will be able to hit the taste of the “Cebuano market”.
Total is the fifth largest publicly-traded integrated oil and gas company in the world. It reported sales of 179,976 billion Euro in 2008.

Source: The Freeman Cebu

BPI eyes slower remittance growth this year

Ayala-led Bank of the Philippine Islands (BPI) expects the growth of money sent home by Filipinos through its 19 remittance centers abroad to slow this year.

The bank, which recently opened its newest branch in Madrid, Spain, expects remittances to grow by 11 percent to $5 billion this year. Last year, remittances went up faster at 15 percent to $4.5 billion despite slower inflows from the US.

BPI Senior Vice-President Teresita Tan said three-quarters of the remittances had come from land-based workers, and the balance from seamen.

"There was a slowdown of remittances from the US but it remains large in terms of volume," she told reporters.

The growth in money sent home by Filipinos in the Middle East, Europe and other Asian countries was steady.

According to a central bank ranking, BPI had the second biggest remittance volume in 2008, with a 23-percent market share.

The central bank expects remittances to grow by 6 percent this year after actual growth exceeded the target last year.

Data showed remittances coursed through banks rose by 5.6 percent to $17.3 billion last year — better than the 4-percent goal — due to sustained demand for Filipino workers abroad.

The remittance level accounted for about a tenth of the country’s economic output, supporting local consumption amid the global economic slump.

The major sources of remittances last year were the US, Canada, Saudi Arabia, Britain, Japan, Singapore, United Arab Emirates, Italy and Germany.

Source: GMA Business News