THURSDAY: SEPTEMBER 17, 2015
B6
BUSINESS business@thestandard.com.ph extrastory2000@gmail.com
Asean billionaires feel devaluation pain TWO of Southeast Asia’s richest businessmen are experiencing the weight of dollar strength after loading their business empires up with cheap US currency debt.
First Pacific’s main source of income is dividends from subsidiary companies in Indonesia and the Philippines. Salim, 66, is chairman and ultimately controls 45.1 percent. First Pacific’s operating comAnthoni Salim, who controls the “Without prudent foreign ex- panies “have been proactively arFirst Pacific Co. conglomerate, and change risk management, a com- ranging local currency loan fundT. Ananda Krishnan, a major share- pany would have increasing inter- ing,” Sara Cheung, an investor holder of Malaysian mobile phone est payments in local currency, a relations official in Hong Kong at operator Maxis Bhd., are feeling the deteriorating credit profile and ris- First Pacific, said. Its Philippines pinch as the rupiah and the ringgit ing hedging costs,” said Mark Yu, a phone company, PLDT, had reveslump to the lowest since the 1998 money manager at Atlanta-based nues that were either denominatAsian financial crisis. Invesco Advisers Inc., without re- ed in, or linked to, dollars of more The duo’s companies have ferring to any specific Asean bor- than $700 million last year. Indoamong the most foreign-currency rower. Pressure won’t let up in the food also derived $400 million in debt in their respective countries, near term, considering “the Fed is export sales in 2014, she said. with dollar liabilities totaling at going to hike rates, global emerging E-mails and telephone calls to least $3.8 billion for Salim and market economic growth is slow- Salim’s personal assistant based in some $2.3 billion for Krishnan, ing” and a more flexible yuan fix- Jakarta went unanswered. Salim data compiled by Bloomberg ing will increase regional currency is Indonesia’s fifth- richest pershow. volatility, he said. son. Eu Jin Song, a Kuala LumWhile the lessons of the 1998 Since China devalued the yuan pur-based spokesman for Bumi meltdown have prompted both in August, Malaysia’s ringgit has Armada Bhd., one of T. Ananda tycoons to take out currency weakened 7.6 percent, making it Krishnan’s companies, said Buhedges and seek to balance cash the worst-performing currency in mi’s dollar debt is used for projflows and liabilities, concern over Asia ahead of Indonesia’s rupiah, ects secured against long- term their foreign debts is weighing on which is down 6.1 percent. The contracts that generate US dollar the two groups’ shares and bonds. peso has weakened 4.3 percent revenue. Unlike Salim’s compaAlthough Hong Kong-listed this year, 2 percent of that since nies, Krishnan’s foreign debts are First Pacific stock is down 38 per- the depreciation. bank loans. cent this year its bonds are still Hong Kong-headquartered Companies that have strong extrading above par. The pain may First Pacific, with interests rang- port earnings may be less affected, be about to get worse as traders ing from noodle maker PT Indo- according to Shamaila Khan, an price in a 62-percent chance the food Sukses Makmur to Philip- emerging market money manager Federal Reserve will raise interest pine Long Distance Telephone at AllianceBernstein Holding LP, rates by December, with 32 per- Co., had $1.8 billion of dollar-de- which oversees about $485 bilcent saying a rise could come as nominated borrowings as of June lion. early as this week. 30, its interim report shows. “Our view has been for the past three years that we’re going to experience a strong dollar, University of the Philippines Manila The Health Sciences Center so what I’ve been picking are exporters, companies that are BIDS AND AWARDS COMMITTEE 3 solid exporters banking on 2nd Floor, BAC Conference Roon, Damian Hall University of the Philippines Manila the fact global growth is not P.Faura St. corner Ma. Orosa St., Manila going to be fantastic but it’s Telefax # 525-43-22 / 526-22-76 going to be stable,” Khan said, INVITATION TO BID declining to talk about the 1. The University of the Philippines Manila through its Bids and Awards Committee III (BAC 3), two tycoons specifically. invites suppliers/manufacturer/distributors/contractors to apply for eligibility and to bid for the hereunder projects: First Pacific’s $400 million of 2019 bonds have fallName of Project: Supply of Various Laboratory Supply of Various Equipment Laboratory Equipment en from a high this year of Requesting Unit/ NIH - Institute of Molecular NIH – Philippine Eye 108.057 cents on the dollar Location: Biology & Biotechnology Research Institure in April to 105.506 cents curApproved Budget for Php 14,290,000.00 Php 12,280,000.00 the Contract: rently, Bloomberg-compiled Bid Documents Php 5,000.00 & 10,000.00 Php 5,000.00 prices show. They were sold Contract Duration: 120 Days 120 Days to investors at par, or 100 PR No.: NIH-IMBB-15-01 to 03 NIH-PERI-15-02 to 05 cents on the dollar, in June Source of Fund: LRTE 2015 LRTE 2015 2012. Bloomberg 2. Prospective bidders should have experience in undertaking a similar project within the last two (2) years with an amount of at least 50% of the proposed project for bidding. The Eligibility Check/Screening as well as the Preliminary Examination of bids shall use nondiscretionary “pass/fail” criteria. Post-qualification of the lowest calculated responsive bid shall be conducted. 3.
All particulars relative to Eligibility Statement and Screening, Bid Security, Performance Security, Pre-Bidding Conference(s), Evaluation of Bids, Post-Qualification and Award of Contract shall be governed by the pertinent provisions of R.A. 9184 and its Implementing Rules and Regulation (IRR).
4. The complete schedule of activities is listed, as follows:
Activities
Schedule
1
Issuance of Bid Documents
Starting – Sept. 17, 2015
2
Pre-bid Conference
Sept. 22, 2015 – 1:30 pm
3
Opening of Bids
October 6,, 2015 – 1:30 pm
4
Bid Evaluation
Within two (2) weeks after the opening
5
Post-qualification
Within one (1) week after the bid evaluation
6
Issuance of Notice of Award
Seven (7) days after Post-qualification
5.
Bid Documents will be made available only to eligible bidders upon payment of a nonrefundable amount stated above for each project to the U.P. Manila Cashier’s Office.
6.
UP Manila assumes no responsibility whatsoever to compensate or indemnify bidders for any expenses incurred in the preparation of the bid.
7.
The University of the Philippines Manila reserves the right to reject any or all bids, to waive any formality or defects therein, or to accept such as may be considered most advantageous to UP Manila.
8.
All inquiries shall be directed to the BAC III Secretariat at tel. no. 525-4322 / 526-2275. This is also posted at the UP Manila Official Web: http://www.upm.edu.ph/procurement. (SGD) DR. TRISTAN NATHANIEL C. RAMOS Chair, BAC 3
(SGD) ARLENE A. SAMANIEGO, MD Vice Chancellor for Administration
TS-SEPT. 17, 2015)
( T S - S E P T. 17/ 2 4 , O C T. 1, 2 015 )
Changing structure of the Philippine audit industry UNTIL not so long ago Sycip Gorres Velayo & Co. was far and away the leader of this country’s audit industry and the managers of the largest Philippine business establishments almost instinctively thought of SGV when they looked for an external auditor for their businesses. Indeed, SGV was virtually synonymous with Philippine auditing. That has ceased to be the case. SGV is no longer synonymous with Philippine auditing. The structure of this country’s auditing industry has been changing in recent years. There are several explanations for this. One explanation has to be the series of breakaways of senior SGV personnel from the firm that Washington Sycip, Ramon Gorres and Alfredo Velayo founded in 1946. A partner or two breaking away from a firm on an occasional basis is something that happens even to the best of institutions. But the simultaneous departure of several, or a group of, partners from a firm recurrently is not a sign of cohesion and harmony within an organization. And breakaways have been taking place at SGV. The first to break away, many years ago, was senior partner Benjamin Punongbayan who joined Jose Araullo, former president of Philippine Savings Bank, to set up an auditing practice. Punongbayan and Araullo has gone on to become the external auditor of many major Philippine business establishments. Punongbayan was subsequently joined by other senior partners who wanted to find out if there was life after SGV. They apparently all found out that there was. The most recent breakaways from The Firm were Roman Felipe Reyes and Protacio Tacandong, who left with a large number of other senior SGV folk to form the auditing firm that bears their name. Reyes Tacandong & Co., which recently moved into two floors of a pricey Ayala-area building, say that they now have twenty-two principals and partners and a staff of around 500 individuals. That surely is not bad after only a few years away from The Firm. Another explanation for the change in the structure of the Philippine auditing industry is the stronger presence in this country of some of the major players in the world auditing industry. The foreign firm with the highest profile in the Philippines today is undoubtedly KPMG, the successor to the renowned firm Peat Marwick. Other major foreign auditing firms have come in KPMG’s wake but have chosen to maintain low profiles. The talk used to be that SGV had anywhere up to eighty percent of the Philippine external-audit market. What that share is today, after the entry of the KPMGs and the Reyes Tacondongs, it is difficult to say with any degree of certainty. Is the Philippine audit industry’s structure likely to change further with the coming into force next year of the Asean Economic Community, which will make possible the operation in this country of regional auditing firms? That development is virtually certain. But it should be remembered in this connection that SGV once had the largest network of affiliate firms in the whole of East Asia. A third explanation, it must be said, for the Philippine audit industry’s structural shift away from SGV dominance is the departure from The Firm, through death and retirement, of practically all the partners that trained under, and had the longest direct association with, Wash Sycip and Fred Velayo. The Roberto Ongpins, the Rodolfo Jacobs, the Rizalino Navarros and their contemporaries – they are all gone. Despite the change that has taken place in the Philippine audit industry structure, one thing is beyond doubt. SGV remains the industry leader and is likely to stay in that position for some time to come. Unless there are more partner hemorrhages of the Reyes Tacandong kind. E-mail: rudyromero777@yahoo.com