2nd Front Page BusinessMirror
A8 Friday, August 7, 2015
DOTC hopeful of new common-station deal
P
By Lorenz S. Marasigan
ARTIES concerned with the construction of a station—or two— that will connect three overhead railway systems in Metro Manila will be forced to double their investment to accommodate the soon-to-be-signed compromise agreement aimed at settling legal issues hounding the much-needed project’s implementation. Transportation Secretary Joseph Emilio A. Abaya said the government is bent on striking a compromise deal with the SM Group to move forward with the implementation of the infrastructure project. In fact, Abaya was scheduled to present the draft trade-off document to the group of billionaire Henry Sy Sr. last night. “Hopefully, it’s the right version they want; so by Friday, we could go to the courts and give them the copy of the compromise agreement,” the transportation chief said. Under the draft settlement deal, the government and the private sector will jointly invest in building two common stations. One will be built near SM North Edsa and another near TriNoma Mall.
ABAYA said the government is bent on striking a compromise deal with the SM Group to move forward with the implementation of the infrastructure project.
The train station near SM will connect the Metro Rail Transit (MRT) Lines 3 and 7, he said, while the one near TriNoma will link MRT 3 and the Light Rail Transit (LRT) Line 1. “Total cost would be somewhere between P2.2 billion and P2.6 billion, which was the original cost of
the original three-in-one station approach,” he said. The cost will be shared by the government, which will shoulder the investment requirements for the station near SM North Edsa, and San Miguel Corp., which will fund the station near TriNoma. Building a single station in TriNoma would only cost P1.4 billion. The compromise deal is aimed at ending the stay order issued by the Supreme Court and move toward the construction of the facilities. To recall, the transportation department decided to change the station’s location from SM North Edsa to TriNoma after several reviews on the project’s technical and financial components. SM Prime Holdings Inc. sought the court’s intervention, as it initially paid P200 million for the naming rights of the station. Abaya said he is confident Light Rail Manila Corp. (LRMC) agrees with his camp’s proposed solution. The private company is the concessionaire for the operations and maintenance, as well as the extension of the LRT 1. It is a joint venture, led by Metro Pacific Investments Corp. and Ayala Corp.
LRMC seeks fare hike
In a related development, Abaya confirmed that the Metro Pacific-Ayala tandem has sought a fare increase for the LRT 1 before it starts to assume operations in September. See “DOTC,” A2
www.businessmirror.com.ph
Malacañang still firm on stand vs Cha-cha By Butch Fernandez
P
resident Aquino remains firm in his position and would not prod Congress to green light private sector-led efforts to amend economic provisions of the 1987 Constitution in a bid to lure more foreign investments to the country, Communications Secretary Herminio B. Coloma Jr. said. “The President believes it is not necessary to amend the Constitution,” Coloma told the BusinessMirror, when asked if Mr. Aquino is likely to reconsider the proposal of business leaders for the President to endorse moves to tinker
with the Charter to relax restrictions on foreign businessmen. Coloma confirmed that Mr. Aquino has not wavered in his belief that Charter change (Chacha) is not the only way to increase investment inflows. “With good governance and sound macroeconomic management, the investment climate is expected to improve further,” Coloma said, explaining where Mr. Aquino was coming from. Earlier, businessmen, led by Shareholders’ Association of the Philippines President Francis Lim, who also served as former president of the Philippine Stock Exchange, expressed their “disappointment” over Mr. Aquino’s indifference to
their Cha-cha initiatives. Lim had suggested that President Aquino ask Congress to amend the economic provisions of the Constitution, pointing out that “despite good public governance for more than five years, we still badly trail behind other Asean countries in attracting much-needed foreign direct investments.” The businessman argued that “good governance alone will not do the trick. Equally important is that the country must liberalize its investment climate.” But Coloma indicated that President Aquino remains unmoved and is not likely to endorse Cha-cha during his term.
$6.5-B debt swap may include new 25-yr bonds
T
he Philippines plans to offer as much as P300 billion ($6.5 billion) of bonds in a debt swap, as it seeks to lengthen maturities amid record-low inflation. The target is to conduct the exchange before the US starts raising interest rates, Treasurer Roberto V. Tan said in a phone interview from Manila on Thursday. New 20- or 25-year notes, and possibly 10-year securities, will be offered to replace shorter-maturity illiquid debt, he said. Futures show a 50-percent chance the Federal Reserve will tighten policy at the next meeting in September and 75 percent odds before year-end. “We want to refinance our short-
term maturing obligations while cleaning up the yield curve and taking away illiquid” securities, Tan said. “This is an opportunity for those that would like to move to longer-term debt.” Philippine consumer prices rose 0.8 percent in July from a year earlier, one of the lowest inflation rates in Southeast Asia, barring those in the midst of deflation. The government’s last debt swap for P140.4 billion of 10-year bonds in August last year, when inflation stood at 4.9 percent, received orders for more than P200 billion. Existing bonds fell on Thursday. The 20-year yield climbed 23 basis points to 4.62 percent, based on
midday data from the Philippine Dealing & Exchange Corp. The yield on the nation’s longest-maturity outstanding notes due in 2037 was at 4.72 percent on Wednesday, according to Tullett Prebon Plc. The Philippines hired Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc. and five local institutions for the swap, according to Roberto Juanchito Dispo, the president of First Metro Investment Corp., which is one of them. The others are BDO Capital & Investment Corp., BPI Capital Corp., state-run Development Bank of the Philippines and Land Bank of the Philippines, Dispo told reporters in Manila on Thursday. Bloomberg News