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BUSINESS
Free trade with Canada eyed By Othel V. Campos
THE Philippines plans to sign free trade agreements with Canada and Mexico, an official of the Trade Department said Tuesday. Trade Undersecretary for international policy Adrian Cristobal Jr. said the Philippines was keen on having free trade agreements with both countries. Cristobal said he recently visited Canada to explore opportunities with the North American country and ahead of President Benigno Aquino III’s visit. “My trip to Canada was in preparation for the President’s
visit. It’s a unique opportunity from our point of view since Canada is a huge new market for us, a source of new investments. We have initial studies that an FTA with Canada will be beneficial to the Philippines,” Cristobal said in an interview. President Aquino is set to fly to the US and Canada on May 6, with trade issues on top of his agenda. Cristobal said Canada was
aware that the Philippines, as an emerging market, is a country of focus in “what they call as development program.” “We both have complementary strategic interests. The FTA and the investment protection agreement are initiatives of both [countries],” Cristobal said. Cristobal said the Philippines would also review the investment promotion and mutual protection agreement it signed with Canada in the 1990s. The Philippines has over 40 investment promotion and mutual protection agreements with different countries. Cristobal said the Philippines
also wanted a free trade deal as well as investment promotion and mutual protection agreement with Mexico. “The purpose of having investment promotion and mutual protection agreements is to provide comfort and confidence to investors of both sides,” Cristobal said. The Trade Department is also working out bilateral trade agreements with Chile, the European Union and the European Free Trade Association. Chile proposed to create an FTA with the Philippines. The Trade Department said it expected to sign the agreement by end2015 or early 2016.
Jobs fair. Labor undersecretary Reydeluz Conferido (fifth from right) leads the ribbon-cutting ceremony during the opening of the job and
livelihood fair on May 1 at the Philippine International Convention Center in Pasay City. With Conferido are other officials of the Labor Department, Philippine Overseas Employment Administration, Federation of Filipino-Chinese Chamber of Commerce and Industry Inc. and Philippine Association of Legitimate Service Contractors.
EDC plans to borrow P5b to finance exploration By Alena Mae S. Flores ENERGY Development Corp., a unit of First Gen Corp., plans to borrow P5 billion to fund geothermal steamfield exploration projects. EDC vice president for corporate finance Erwin Avante told reporters at the sidelines of the stockholders’ meeting the company planned to borrow from local banks to fund exploration for the Bacman geothermal plants and the Mindanao 3 power projects. “We plan to raise financing for the P5 billion within two to three months. The P5 billion is around 70 percent of the project cost,” Avante said. He said once the steamfield exploration showed positive results, EDC would put up new power
plants. “If we proceed with a power plant for Bacman 3, we’re looking a separate facility for that,” Avante said. He said the EDC would have to raise $150 million for the construction of a 30-MW Bacman 3. The Bacman 3 power project is located in Bacon, Sorsogon Province and Manito, Albay. The other Bacman plants are the 120-MW Bacman 1 and 20-MW Bacman 2. “We also continue to explore and develop expansion areas in our existing geothermal sites,” EDC president Richard Tantoco said. He said the Bacman plants helped drive EDC’s revenues which climbed 20 percent in 2014 to P30.9 billion. Tantoco said the company expected modest net income gains this year although revenues would
be higher. “[Net income this year] is better than last year but it’s not realistic to expect similar 40-percent increase than last year,” he said. “We are looking at modest gains.” The company posted recurring net income attributable to EDC of P9.2 billion last year, up 40 percent from 2013. Avante said EDC’s recurring net income attributable to parent might be flat or slightly higher this year “but again, it depends on how we manage our open given that we have several initiatives to typhoon proof our units and continue restoration of those damaged by prior typhoons.” EDC lost P1 billion in revenues last year due to a series of typhoons. The company is now putting in place solutions to miti-
gate the impact of typhoons on its facilities. The company expects revenues of P4.5 billion from the Bacman plants this year while the 150MW Burgos wind project is seen to contribute less than P2 billion. EDC said it expected the Nasulo geothermal power project to contribute around P800 million to P900 million in revenues this year for 20 MW of capacity although its impact to the bottom-line was affected by the lower rates it offered to consumers. Tantoco said the move to offer lower prices to consumers cost the company P911 million in the short term “but will provide stable revenue streams in the future.” EDC’s power portfolio includes geothermal, hydro, wind and solar power projects totaling 1,441 MW as of end-2014.
Pepsi’s net profit rises 41% to P192m By Jenniffer B. Austria SOFTDRINKS maker Pepsi Cola Products Philippines Inc. said first-quarter net income climbed 41 percent to P192 million from P135.6 million in the same period last year, as the company focused on revenue management. PCPPI said in a financial statement filed with the Philippine Stock Exchange gross sales increased 13.5 percent to P7.3 billion in the first quarter from P6.44 billion a year ago, marking the three quarters in a row where revenue growth was ahead of volume expansion. First-quarter net sales climbed 14.7 percent to P6.25 billion from P5.48 billion a year earlier. Net sales from carbonated soft drink amounted to 4.59 billion in the first quarter, up 14.2 percent year-on-year while net sales from non-carbonated beverages hit P1.66 billion, or 13.7 percent higher than P1.46 billion recorded in the first quarter of 2014. Cost of goods sold increased 12 percent in the quarter, driven mainly by volume growth and higher depreciation and amortization. Operating expenses, as a percentage of sales, remained at par with last year’s first quarter. “The company will continue with its long term strategy of sustained distribution and manufacturing investments supported by marketing programs to continue growth momentum,” PCPPI said. PCPPI said it allocated P977 million in capital expenditures in the first quarter primarily on manufacturing, marketing and distribution of assets. PCPPI is a licensed bottler of PepsiCo Inc. and Pepsi Lipton International Limited in the Philippines. It manufactures a range of carbonated soft drinks and noncarbonated beverages that include well-known brands PepsiCola, 7Up, Mountain Dew, Mirinda, Mug, Gatorade, Tropicana/ Twister, Lipton, Sting, Propel, Milkis and Let’s Be. The company also plans to venture into snack food business with the establishment of P650million manufacturing facility to be operational by the second half of the year.