THE COMMONWEALTH OF THE PHI!LIPPINES
653
The income of the bank is given as P428,970 for 1936 and expenditures at P552,514, an apparent loss of P23,544 from operation. Expe~dit~res include accr~ed interest cre~ited to savings accounts in the amount of '329,627, whIle mcome does not mclude accrued mterest receivable, which is estimated conservatively 路 at P290,000. It is believed therefore that the final figur~ will show a net profit of at least P166,455, increasing the net surplus of the Postal Savings Bank to P1,659,981.
GOVERNMENT COMPANIES The Government investment in railway"S again proved unprofitable. The Manila Railroad Company, entirely government-owned, will apparently show a net loss in bhe neighborhood of Pl,500,000, against '1,840,000 in 1935. The moderate improvement is due mainly to reduced interest charges, as a result of retirement of '16,340,000 of bonds carrying interest charges of ovel 6-1/2 percent, including exchange, through f'13,500,000 at loans, bearing a low interest rate, from the Government and the Philippine National Bank. Railway operating revenues did not increase, despite increased sugar movement and efforts to meet motor competition by decreasing rates. A better showing is hoped tor in 1937. It is possible that the increase in gasoline tax and motor vehicle registration tees may improve the competitive position of the railways. The Philippine Railway Company was again unable to meet bond interest charges and the government, which guarantees interest on the bonds, had to contribute about P500,000 on that aecount. The bonds, due July 1, 1937, and totaling about f'17,000,OOO, are not guaranteed as to principal and no indication has been given as to what action will be taken on them. The Philippine National Bank showed a net profit, after taxes, of P2,697,OOO, of which about P2,000,000 was operating profit, the balance recoveries from debts written off. In 1935, the net profit was P3,966,000, but about half of that was recoveries from debts written off. The reason for the lower amount of recoveries in 1936 was the fact that the balance outstanding of loans to sugar centrals, \vlhich were written off some years ago, was reinstated at full lace value, the amount of the write-up being paid to the Government. Hidden assets of the Bank still include shares of sugar centrals carried at P53,000 and worth nearly '4,000,000 at present values, and a few debts carried at .P1.00, from which some recoveries may be made. In the main, however, the Bank will have to rely on operating revenue in the future and may be expected to show somewhat smaller profits for that reason. The Bank paid a total of about f'9,950,OOO to the Government in 1936, including P6,685,OOO from the write-up of sugar central loans, f'2,023,000 representing 75 percent of the net profit for the year and about '1,250,000 in taxes on income, capital, deposits and circulation. The Cebu Portland Cement Company showed a profit of P450,OOO for the first ten months of 1936, compared with P345,OOO in the same period of 1935. The Manila Hotel had an excellent year and made a profit of P200,000, the best in its history. With its facilities considerably increased by an annex, which will be ready by March or April, 1937 ~ it should show an increased profit in the coming year. The National Rice and Corn Corporation is es. timated to have made a profit of better than 100 percent from its sale of imported!' rice. 1'his is not available for dividends, but will be added to the company's capital and used to further its aim of stabilizing rice prices. Several new Government companies or other organizations were formed during the year. Conunonwealth Act No.2, passed by the National Assembly at its first session, provided for a National Economic Council, evidencing a consciousness of the necessity for an organized study of the industrial needs and possibilities of the count"l'y, in preparation for ul-