IN BRIEF
First Gen’s ‘18 profit jumped 51% to $243m
FIRST Gen Corp., a member of Lopez Group, reported a net income of $243 million (P12.8 billion) in 2018, up 51 percent from $161 million in 2017, due mainly to the strong contribution of the company’s natural gas business. “2018 was an exceptional year for First Gen as we concretized value from the sizable investment made for the modern 420 megawatt San Gabriel natural gas-fired power plant. This was made in anticipation of the market’s increased electricity demand and the need for new cost-competitive power supply to the grid,” said First Gen president and chief operating officer Francis Giles Puno. First Gen’s natural gas business delivered recurring earnings of $186 million (P9.7 billion) from $120 million (P6 billion) in the previous year. “The 1,500 MW Santa Rita and San Lorenzo natural gas-fired plants continued their reliable performance incorporating the technical upgrades we have invested in over the years that effectively reduced the power rates to consumers,” Puno said. Alena Mae S. Flores
Business
Finance downplays investment decline
THE Department of Finance downplayed the 4.4-percent decline in net foreign direct investments last year, saying it is just “temporary” but admitted there must be vital reforms to lure more foreign investors in the country. “The FDI decline in the Philippines in 2018 mirrors the global FDI decline during the past two years. In 2017, it dropped 6.5 percent to $1.9 trillion. In the first half of 2018, it dropped by a heftier 44 percent to just $432 billion,” the DoF said in an economic bulletin released Wednesday. The DoF said the decline was due to slowdown in the world economy brought about by US-China trade war and Brexit. Citing a World Bank study, the DoF said foreign capital should be attracted to enhance more competition and efficiency in the economy. “The drop in 2018 FDI is just a temporary phenomenon brought about by the uncertain world economic environment. FDI flows will recover when world conditions are better. Meanwhile, the Philippines should implement reforms for a better investment environment,” the DoF said. Julito G. Rada
Car sales rose 0.6% to 26,327 units in February By Othel V. Campos
VEHICLE sales rose slightly in February following a 15-percent decline in January, data from the Chamber of Automotive Manufacturers of the Philippines Inc. and the Truck Manufacturers Association show. The two industry groups said their members sold 26,327 vehicles in February, up 0.6 percent from 26,176 units delivered a year ago. Passenger car sales grew 3.4 percent in February to 8,471 units from 8,192 units a year ago, while light commercial vehicle sales went down 0.7 percent to 17,856 units from 17,984 units. Data showed that on a month-onmonth basis, car sales fell 2.1 percent in February from 26,888 units delivered in January 2019. Sales in the first two months of 2019 went down 8 percent to 53,215 units from 57,821 units in the same period last year. Passenger car sales in the twomonth period declined 5.7 percent to 16,958 units from 17,982 units a year ago while commercial vehicle sales went down 9 percent to 35,257 units from 39,839 units. Among commercial vehicles, Asian utility vehicles posted the sharpest drop of 58.9 percent to 4,637 units from 11,274 units, followed by trucks and buses (category V) which went down 43.3 percent to 191 from 337 units. Other commercial vehicles showed improved sales during the period.
business@manilastandard.net extrastory2000@gmail.com THURSDAY, MARCH 14, 2019
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PLDT bares plan to borrow P28b from local banks By Darwin G. Amojelar
PSBank approves capital hike to P6b
PHILIPPINE Savings Bank, the thrift banking arm of the Metrobank Group, is increasing its authorized capital stock from P4.25 billion to P6 billion to fund business expansion and sustain growth momentum. The bank said in a disclosure to the stock exchange Wednesday its board of directors has approved the increase in the capital stock in a meeting Tuesday. The board in the same meeting approved the issuance of up to P40 billion in peso-denominated bonds in multiple tranches. PSBank has just completed an P8billion stock rights offering on Jan. 11, 2019. The offer to eligible shareholders of 142,856,925 common shares was priced at P56 per share. The rights shares were listed with the Philippine Stock Exchange on Jan. 18, 2019. The P8-billion offer was taken up entirely by the bank’s existing shareholders, with support seen across the shareholder base. The bank said the capital-raising exercise would enable it to sustain its loan growth momentum, supporting its expected asset growth primarily on consumer loans. PSBank in 2018 posted a flat net income of P2.7 billion. Julito G. Rada
Ray S. Eñano, Editor Roderick T. dela Cruz, Assistant Editor
LARGEST FOOD SHOW. Led by the Department of Trade and Industry through the Center for International Trade Expositions and Missions, 25 Filipino producers and manufacturers showcase the country’s top halal-certified food selections and bag over $83 million of export sales from 1,163 foreign buyers in the Gulfood at Sheikh Rashid Hall, Dubai World Trade Centre, United Arab Emirates on Feb. 17 to 21. Participating in the event are (from left) Trixie Fernandez, international business executive of Monde Nissin Corp.; Trade Undersecretary Abdulgani Macatoman, Isaac Chun and Jhasper Reganit of Monde Nissin, Ambassador to UAE Hjayceelyn Quintana, Ambassador to Bahrain Alfonso Ver, Mark Santos of Monde Nissin and commercial attache to Dubai Charmaine Yalong.
Mandaluyong court stops More from taking over Peco By Alena Mae S. Flores
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HE Mandaluyong Regional Trial Court issued a 20day temporary restraining order preventing More Electric Power Corp. from expropriating and taking over the distribution assets of Panay Electric Co. Mandaluyong RTC Branch 209 judge Monique Quisumbing-Ignacio said facts showed “there is no other ordinary, speedy and adequate remedy to prevent the infliction of irreparable injury to Peco except through the issuance of the TRO.” The court directed Peco to file within five days from the issuance of the decision dated March 12 to post a P5-
million bond. It enjoined More from enforcing, implementing and exercising any rights and obligations under Republic Act No. 11212, which granted the company a franchise to establish, operate and maintain a distribution system in Iloilo. The court said the TRO also covered the commencement of the expropriation proceedings against Peco under the assailed provisions, takeover by More of Peco’s distribution assets and issuance by the Department of Energy and the Energy Regulatory Commission of the certificate of public convenience and necessity, provisional authority to operate or any other permits to More. “Petitioner Peco was able to establish that the implementation or enforcement of Sections 10 and 17 of RA 11212 will materially and substantially invade its rights to equal protection under the law, due process and against unlawful taking of property, since respondent More, by invoking Sections 10 and 17 of RA 11212, can easily take away, under the
guise of eminent domain, petitioner Peco’s distribution assets.” The court set the hearing for the conversion of the TRO into a writ of preliminary injunction on April 2, 2019 at 8:30 a.m. More’s franchise under RA 11212 took effect on March 6, 2019, the same day that Peco filed an application for a TRO. “This unexpected development only serves to bolster the urgency of issuing a TRO considering that Section 10 of RA 11212 authorizes respondent More to take immediate possession of petition Peco’s distribution assets after filing of expropriation proceedings, due notice and deposit of the assessed value of the assets in question,” the court said. The court said that More’s CPCN was scheduled for hearing on March 27, 2019 and if granted, “this will give rise to a situation where two companies are operating in the same franchise area since Peco was transitory to operate for two more years under RA 11212.”
Economic managers downgrade 2019 growth target By Julito G. Rada THE interagency Development Budget Coordination Committee on Wednesday downgraded the 2019 growth target to a range of 6 percent to 7 percent from the previous estimate of 7 percent to 8 percent, because of the delay in the approval of the national budget and external risks including the lingering trade war between the US and China. It also reduced the 2020 growth target to a range of 6.5 percent to 7.5 percent from 7 percent to 8 percent, but retained the target for 2021 to 2022 to a band of 7 percent to 8 percent. Economic Planning Secretary Ernesto Pernia said in a briefing late Wednesday afternoon the DBCC factored in the delay in the approval of
the national budget, assuming the delay would last until April this year. “We also considered the onset of El Niño phenomenon, although we expect a mild one,” Pernia said. Finance Secretary Carlos Dominguez III said the DBCC also considered the continuing trade war between the US and China. “Trade wars between our trading partners will impact our own grown possibilities,” Dominguez said. Dominguez said the budget impasse would affect the creation of more jobs that could possibly emanate from the infrastructure projects. He said this would affect the people in general. “We don’t get to spend what we planned to. The early part of the year is the best period to do the construction
of these projects. The delay in budget approval will delay the infrastructure program,” Dominguez said. Economic managers urged Congress to transmit the 2019 national budget soon so that the government could sustain its investments on development priorities. “The longer the budget impasse lasts, the larger the adverse effect to the economy and its people,” they said. The National Economic and Development Authority said a reenacted budget for the entire year could pull down economic growth to 4.2 percent, the slowest since 2011. Neda estimates showed that a reenacted budget until April 2019 would bring down full-year GDP growth to 6.1 percent to 6.3 percent.
PLDT Inc. plans to borrow up to P28 billion from local banks this year to refinance maturing debt and partly fund the 2019 capital expenditures, a top executive said Wednesday. PLDT chief financial officer Anabelle Chua said the country’s largest telecom company was looking at borrowing between P27 billion and P28 billion this year from local banks. “It would be spread over the year for refinancing and capex,” she said. About $391 million worth of PLDT debt is expected to mature this year. The company allocated P78.4 billion for 2019 capital expenditures, higher by nearly P20 billion from last year’s P58.5 billion. The aggressive roll-out is intended to further push the already significant network advantage of PLDT and Smart and support an active campaign for more revenues. PLDT said that by end-2018, the coverage of its fiber-powered network passed 6.3 million homes, up by 57 percent from the 2017 level. Its total capacity reached 2.6 million ports with about one million ports available for sale. PLDT added nearly 70,000 kilometers of fiber cables, expanding its total fiber network to more than 244,000 kilometers. It said that on mobile business, the objective was to build on Smart’s LTE advantage and prepare for the arrival of 5G. Smart increased the number of its LTE base stations by over 86 percent to about 16,200 as of end-2018. It also increased its 3G base stations by more than 17 percent to about 11,500. The massive deployment enabled Smart to meet its commitment to the National Telecommunications Commission to provide mobile broadband in at least 90 percent of Philippine cities and municipalities. PLDT earlier reported a 44-percent increase in net income in 2018 to P19.2 billion from P13.3 billion in 2017. Consolidated core income went down 5 percent to P26.2 billion, as the accelerated depreciation cost arising from PLDT’s aggressive network transformation programs offset gains from PLDT’s loss of control of Voyager and from the sale of Rocket Internet shares. PLDT said that excluding Voyager operations, core income rose 3 percent to P24.4 billion Consolidated revenues, net of interconnection costs, rose 5 percent to P194.4 billion in 2018, excluding P1.1 billion of revenues from Voyager Innovations. Combined revenues from main businesses―home, enterprise and consumer individual―rose 9 percent year-on-year to P137.4 billion.
Ayala Corp.’s income increases 5% to P31.8b By Jenniffer B. Austria CONGLOMERATE Ayala Corp. said Wednesday net income increased 5 percent in 2018 to P31.8 billion from a year ago on strong earnings of core businesses despite the higher borrowing costs. Ayala said in a disclosure to the stock exchange the equity earnings contribution from its business units reached P39.4 billion in 2018, up 10 percent year-on-year. This was led by the strong double-digit growth in equity earnings of Ayala Land, Globe Telecom and AC Energy. The conglomerate said borrowing costs increased as the group funded its investments with new debt, moderating its net profits during the period. “The aggressive growth strategy that we embarked on over a decade ago has been unprecedented for the Ayala group. Over the past 10 years, we spent close to P200 billion in capital expenditure at the parent level alone to support the investment programs of our various business
units, including our new growth platforms in power, industrial technologies, infrastructure, education and healthcare,” Ayala president and chief operating officer Fernando Zobel de Ayala said. “Our profitability has also improved steadily over the past 10 years, growing at a compounded annual rate of 15 percent,” he said. Aside from its real estate, banking, water and telecom businesses, Ayala’s power generation unit AC Energy also delivered positive results for the company. AC Energy’s net earnings expanded 16 percent in 2018 to P4.1 billion, driven by its domestic thermal and renewable assets as well as higher contribution from its Indonesian investments. The strong performance and higher equity stake in GNPower Mariveles, strong wind regime and fresh contribution of its greenfield offshore project, the 75-megawatt Sidrap wind farm in Indonesia and the full-year recognition of SD Geothermal boosted AC Energy’s performance during the year.
CEBU PACIFIC’S INITIATIVES. Cebu Pacific is pushing forward with initiatives to reduce the impact of its operations on the environment. Foremost of these is the carrier’s investment in 32 brand-new fuel-efficient Airbus A321neo aircraft which has demonstrated a remarkable reduction in fuel burn per seat. Speaking at the Routes Asia conference in Cebu, Cebu Pacific vice president for marketing and distribution Candice Iyog (right) said the carrier has placed an ‘ecoplane’ seal on its first A321neo aircraft to highlight its commitment to reduce its carbon footprint. With Iyog are (from left) Siargao Tourism Operations Association president Abe Tolentino and Tourism Undersecretary Art Boncato Jr.