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Monday, October 27, 2003
Meralco 9 mths to Sept net profit 640 mln pesos,down 14.3 pct yr/yr
Philippine Meralco Q3 net profit 574 mln pesos, up 103 pct yr-o
Philippine leader moves to stop impeachment of Supreme Court chief
Forex - Philippine peso closes at record low on political concerns
Philippine BIR to achieve 34.0 bln pesos revenue target for October - Parayno
Philippine peso weak due to month-end requirements, politics - Buenaventura
Philippine PSALM to save 3.89 mln usd from renegotiated Conal power deal - DoE
Ex-Philippines police chief to run against Arroyo on anti-corruption plank
Philippine Grand Plaza Hotel cash dividend 0.20 pesos per share
Philippine PCI Leasing buys back 182,000 shares
Philippine T-bill rates rise across the board
Manila shares close slightly lower on further consolidation, weak peso
DATAWATCH-Philippine manufacturing to get further boost in months ahead-GK Goh
Philippines seeking regional, international boost in UN council seat
Spectre of China looms over Philippine electronics exporters
Philippine Premiere Entertainment stockholders approve purchase of Next Mobile
Philippine August manufacturing output volume up 7.00 pct yr-on-yr
Philippine National Bank to sell 40.0 bln pesos worth of bad assets - report
Philippine Security Bank uses ING Bank for 200-300 mln usd debt issue -sources
Manila shares outlook - Mixed to slightly lower on extended consolidation
Philippine Megaworld eyes 25.0 pct stake in Fort Bonifacio Dev't Corp - report
Philippine central bank approves govt's 1.0 bln usd borrowing plans - report
Philippines' Solid Group plans to acquire Destiny Cable
BROKER CALL - Indonesia's Darya a 'hold' after acquisition by Unilab - BNI
Philippines' Grand Plaza Hotel buys back 4.1 mln shares at 50 pesos each
Philippines' Meralco seeks ERC approval for phases III, IV of refund

Friday, October 24, 2003
Philippines' Centro Escolar University cash dividend 0.10 pesos
Philippines' San Miguel to venture into food business in Vietnam
Philippine Philex Sept copper/gold/silver output gross value 285.50 mln pesos
Manila shares close slightly down on consolidation, political concerns
Philippine Globe Telecom 12 mln shares worth 8.16 bln sold in block sales-PSE
Philippine Jan-July current a/c surplus 1.064 bln usd vs 2.466 bln
Philippines' Arroyo says Jemaah Islamiyah a national security threat
Philippines' Salcon Power seeks extension of contract with govt beyond 2009
Philippines' San Miguel to venture into pig farming, feed milling in Vietnam
OUTLOOK -Philippines' Globe Q3 net profit seen at 1.6-2.6 bln pesos vs 1.3 bln
Philippine WG&A extends deadline for transfer of unit's ops to end-Dec
STOCK ALERT - Philippines' PLDT up early on upbeat earnings forecast
Philippine WG&A's board of directors approves stock dividends

October 22 - 23 
October 20 -21 
October 16 - 17 
October 14 - 15 
October 10 - 13 
October 8 - 9 
October 6 - 7 
October 3 - 4 
October 1 - 2 


 

 

Meralco 9 mths to Sept net profit 640 mln pesos,down 14.3 pct yr/yr


     (Correcting headline to show 9 mths profit fell yr-on-yr)
     MANILA (AFX-ASIA) - Manila Electric Co's nine months to September financial results:
      Operating revenues - 98.553 bln pesos vs 89.764 bln
      Operating expenses - 93.453 bln pesos vs 85.022 bln
      Operating income - 5.100 bln pesos vs 4.741 bln
      Other expense - 4.187 bln pesos vs 3.311 bln
      Net profit - 640.110 mln pesos vs 747.175 mln
     Meralco's third quarter to September financial results:
      Operating revenues - 33.131 bln pesos vs 28.988 bln
      Operating expenses - 30.963 pesos vs 27.764 bln
      Operating income - 2.168 bln pesos vs 1.223 bln
      Other expense - 1.337 bln pesos vs 688.35 mln
      Net profit - 574.018 mln pesos vs 281.933 mln
     (1 usd = 55.500 pesos)
     cecille.yap@afxasia.com

 

Philippine Meralco Q3 net profit 574 mln pesos, up 103 pct yr-on-yr


     MANILA (AFX-ASIA) - Manila Electric Co posted a 103 pct increase in its third quarter net profit to 574 mln pesos from 282 mln pesos during the same period last year, on the back of a rate increase implemented in the middle of the year and a modest rise in power sales.
     The country's largest power distributor, however, said its nine months to September net profit dropped 14.3 pct year-on-year to 640 mln pesos due to losses posted in the first quarter.
     Total sales volume for the third quarter stood at 6.157 bln kilowatthours, up 3.8 pct from a year earlier.
     Operating revenues for the third quarter rose 14.3 pct year-on-year to 33. 13 bln pesos, while operating expenses rose by 11.5 pct to 30.96 bln pesos due to the increase in its purchased power cost, Meralco told the Securities and Exchange Commission.
     Sales to commercial customers grew 4.3 pct, while sales to industrial and residential customers improved by 3.6 pct and 3.7 pct, respectively.
     During the quarter, Meralco reported a system loss of 11.42 pct of total power delivered by the distributor to its more than 4.0 mln customers, equivalent to an expense of 414.4 mln pesos. This brought system loss for the January to September period to 11.43 pct or a total expense of 1.6 bln pesos.
     One-time provision for disallowed recoveries amounting to 260 mln pesos was recognized during the quarter.
     The provision represents the potential additional disallowance for Quezon Power Ltd's transmission lines fees of about 106 mln pesos and value-added tax savings of about 154 mln pesos. Meralco added recoverability depends on the outcome of the evaluation of the ERC.
     Capital expenditures for the third quarter declined 13.75 pct to 1.66 bln pesos from 1.92 bln during the same period a year earlier.
     (1 usd = 55.55 pesos)
     cecille.yap@afxasia.com

 

Philippine leader moves to stop impeachment of Supreme Court chief


     MANILA (AFX-ASIA) - President Gloria Arroyo said today she is trying to stop a landmark bid by the Philippines' powerful legislature to impeach a respected top judge, a move that could blow up into a constitutional crisis.
     More than 90 House of Representatives members, mainly from the opposition, last week filed a motion for Supreme Court chief justice Hilario Davide's impeachment for allegedly misusing nearly 48 mln pesos from a budgeted fund.
     In a statement, Arroyo said she had consulted Davide, House Speaker Jose de Venecia and influential San Miguel Corp businessman Eduardo Cojuangco -- from whose opposition party most of the signatories hail -- about the controversy.
     "I do not know where my overtures will lead but I do know that representatives of the three parties have sat down over the weekend to try to find common ground," she said.
     "All I want is for our people to be freed of the anxieties that could adversely affect their work and livelihood, and for our economic and political stability to be secure in the eyes of domestic and international audience," Arroyo pleaded in a statement.
     Davide has rejected the allegations, but if the House endorses the complaint he would go on trial in the Senate, which would decide whether or not to remove him from office, the first time such a move would have occurred.
     Arroyo said she was being called upon "to mediate a controversy that may invite opportunistic destabilization attempts perpetrated by parties outside the dispute".
     Former president Corazon Aquino also called for calm, voicing concern for "a potential constitutional crisis that may arise from this complaint, should this issue not be settled with dispatch and to the satisfaction of the parties concerned".
     Critics say the filing of the complaint may have been motivated by Davide's decisions and actions against opposition figures.
     ( 1 usd = 55.55 pesos)

 

Forex - Philippine peso closes at record low on political concerns


     MANILA (AFX-ASIA) - The peso closed at a record low against the US dollar on political concerns related to the impeachment case against Supreme Court Chief Justice Hilario Davide and as companies scrambled to accumulate more of the US unit for their month-end financing requirements, dealers said.
     The peso closed at 55.500 after trading between 55.350 and 55.550 on volume of 204.00 mln usd. It closed at 55.330 yesterday.
     "There doesn't seem to be any good news lately and investor sentiment on the currency has remained weak because of Davide's impeachment," a local bank dealer said.
     Davide, a key figure in the impeachment trial and eventual ouster of former President Joseph Estrada, was impeached by the House of Representatives last week for alleged misuse of public funds. The complaint will be turned over to the Senate for final decision.
     President Gloria Arroyo said she is seeking a "principled solution" to the conflict between the legislative and the judiciary, while House Speaker Jose de Venecia said the parties concerned have been negotiating for a "final settlement" of the conflict, which various sectors say could lead to a constitutional crisis.
     "The market will wait and see whether a compromise would indeed be reached," another dealer said.
     Dealers said the peso is seen easily testing this year's intraday low of 55.600 posted in August, and perhaps the record intraday low of 55.750, which was registered during the height of the impeachment trial against Estrada.
     cecille.yap@afxasia.com

 

Philippine BIR to achieve 34.0 bln pesos revenue target for October - Parayno


     MANILA (AFX-ASIA) - Bureau of Internal Revenue commissioner Guillermo Parayno said the agency is expected to achieve its 34.00 bln pesos revenue target for October, a turnaround from the shortfall it recorded a month earlier.
     "October is looking good. It looks like we are going to meet the October target," Parayno said, adding the agency had already managed to collect half of its targeted amount in the first two weeks of the month.
     He said, however, the BIR expects November to be a tough month for collection after realizing it had set a "very high" collection goal of 41.00 bln pesos for the month.
     Also, the BIR had earlier transferred the collection of excise taxes on imported petroleum products, at roughly 1.30 bln pesos per month, to the Bureau of Customs.
     (1 usd = 55.484 pesos)
     cecille.yap@afxasia.com

 

Philippine peso weak due to month-end requirements, politics - Buenaventura


     MANILA (AFX-ASIA) - Central bank governor Rafael Buenaventura attributed the peso's prevailing weakness to the month-end dollar requirements of companies, exacerbated by recent "political noise" related to the House of Representatives' recent impeachment of Supreme Court Chief Justice Hilario Davide.
     The peso averaged 55.488 at the end of the morning trade, from Friday's close of 55.33, on volume of 167.50 mln usd.
     "This will come to pass...It is the usual (market) overreaction to the political noise. Once this is resolved, (the peso) will go back to normal," Buenaventura told reporters.
     He said the central bank is not in the market today.
     cecille.yap@afxasia.com

 

Philippine PSALM to save 3.89 mln usd from renegotiated Conal power deal - DoE


     MANILA (AFX-ASIA) - The Power Sector Assets and Liabilities Management Corp (PSALM), the residual company of the National Power Corp, expects to save about 3.89 mln usd or about 214 mln pesos from the renegotiation of Napocor's contracts with independent power producer Conal Holdings Corp, the energy department said.
     Conal operates four power facilities in the island of Mindanao.
     The energy department said Conal has agreed to waive its receivables from Napocor and the 5.0 pct "overnomination" of the Iligan II power plant.
     
     It did not elaborate.
     (1 usd = 55.484 pesos)
     cecille.yap@afxasia.com

 

Ex-Philippines police chief to run against Arroyo on anti-corruption plank


     ---- by Cecil Morella ----
     MANILA (AFX-ASIA) - An opposition senator and ex-police chief said today he hopes to beat President Gloria Arroyo in the May 2004 Philippines presidential election on a strong anti-corruption and law and order platform.
     Senator Panfilo Lacson, 54, said he had the backing of the ethnic Chinese business community, whom he said were fed up with graft and kidnappings.
     "So much has been lost to corruption," Lacson told the Foreign Correspondents Association here. "It's really corruption that's killing us."
     Lacson pulled down Arroyo's popularity rating this year with allegations that she was laundering millions of dollars in election campaign funds through secret bank accounts held by her husband Jose Miguel Arroyo using a fictitious name.
     Arroyo has rejected the charges, and government prosecutors have filed murder charges against Lacson for his alleged role in the killing of 11 members of the so-called Kuratong Baleleng gang of bank robbers while in police custody in 1995.
     A lower court threw the case out in 1995 after key state witnesses retracted their evidence but state prosecutors revived the case in 2001 saying they had found fresh leads.
     Lacson challenged the government to come up with evidence to back allegations that he is himself a drug dealer and kidnapper, saying he had refused bribes from gambling lords when he was the police chief. "I never pocketed a single peso or centavo," he said.
     He said that if elected president, his first act would be to have himself and members of his cabinet "sign a waiver excluding themselves from the coverage of the Bank Secrecy Act" so that investigators would have free access to information regarding any ill-gotten wealth deposited in their bank accounts.
     He said he "would not lift a finger to influence the courts or even the prosecutors" handling the corruption cases against his patron, former president Joseph Estrada.
     Estrada was toppled in a military-backed popular revolt in January 2001, which also ended Lacson's term as police chief. Estrada could face life in prison if convicted of plundering an 80 million-dollar fortune in his 30 months in office.
     "We're looking at a three-cornered fight in May 2004," Lacson said. "Arroyo, myself and former senator (Raul) Roco," an estranged Arroyo ally.
     He downplayed opposition concerns that the criminal case against him would hobble his candidacy.
     "The moment things get clearer I think campaign contributions will come in and the funders will choose who among the candidates will be more viable, " he said.
     "The Filipino-Chinese community is one group that is wholly and wholeheartedly supportive of my efforts," Lacson insisted.
     Both Lacson and Arroyo have consistently polled below Roco in recent independent national surveys, but Lacson considers the incumbent as his main rival.
     He insists voters would remember Arroyo as somebody who failed to crack down on corruption as well as somebody who went back on her word not to contest the 2004 vote.
     After declaring in December last year that she was not running, "the events that led to her announcing (her candidacy) would show that she has no word of honor," Lacson said.
     Raul Locsin, a legislator and publisher of the Today newspaper, says that in the 2004 vote, "what counts is less who are the most popular than who are ready and willing to stake everything on the outcome and throw everything into the fight." Among the field, Lacson and Arroyo are "the only two really serious protagonists whose lack of popularity pales before their savage resolution to prevail at all costs."

 

Philippine Grand Plaza Hotel cash dividend 0.20 pesos per share


     MANILA (AFX-ASIA) - Grand Plaza Hotel Corp has declared a cash dividend of 0.20 pesos per share to be paid to shareholders on record as of Nov 10.
     Payment is set on Nov 28.
     The company, in a disclosure to the stock exchange, said the total cash dividends amount to 16.52 mln pesos.
     (1 usd = 55.484 pesos)
     afxmanila@afxasia.com

 

Philippine PCI Leasing buys back 182,000 shares


     MANILA (AFX-ASIA) - PCI Leasing & Finance Inc said it bought back 182,000 shares from the market on Oct 24.
     The shares were bought at 1.32 pesos each, for a total of 242,240 pesos.
     (1 usd = 55.484 pesos)
     afxmanila@afxasia.com

 

Philippine T-bill rates rise across the board


     MANILA (AFX-ASIA) - Treasury bill rates rose across the board on full award for the 182-day and 364-day tenors at today's auction, the Bureau of Treasury said.
     The government tempered the rise of the bellwether 91-day rate by resorting to a partial award.
     Earlier, National Treasurer Sergio Edeza said the rates are expected to increase given government's intention to align T-bill rates, particularly the 91-day rate, with the central bank's key overnight borrowing rate of 6.750 pct.
     The 91-day rate averaged 5.966 pct, compared with 5.629 pct previously, with bids ranging from 5.749 pct to 6.000 pct. The government awarded 2.195 bln against its 4.000-bln peso offer. Total tenders reached 2.950 bln.
     The 182-day rate averaged 7.055 pct versus 6.763 pct previously with bids ranging from 6.915 and 7.350. The government awarded a full award of its offer of 3.000 bln on total tenders of 3.901 bln.
     The government awarded in full its offer of 2.500 bln pesos worth of 364-day bills, with the rate averaging 7.884 pct, compared with 7.336 pct previously with bids ranging from 7.625 pct and 7.950 pct. Tenders totalled 3. 825 bln pesos.
     (1 usd = 55.484 pesos)
     cecille.yap@afxasia.com

 

Manila shares close slightly lower on further consolidation, weak peso


     MANILA (AFX-ASIA) - Share prices closed slightly lower on extended consolidation, with profit-taking in selected blue chips led by Ayala Corp and Globe Telecom weighing down the market, dealers said.
     Some investors have in the meantime also opted to stay away from the market due to the continued weakness of the peso and ahead of more third quarter earnings results.
     The composite index closed down 5.23 points, or 0.38 pct, at 1,358.17 on 184.42 mln shares worth 343.76 mln pesos. It traded between 1,352.90 and 1, 368.81.
     Losers beat gainers 39 to 17, with 39 stocks unchanged.
     The peso averaged 55.488 against the US dollar, from Friday's close of 55. 33, on volume of 167.50 mln usd, at the end of morning trade.
     Dealers said recent political developments, such as the impeachment of Supreme Court Chief Justice Hilario Davide by the House of Representatives, have also kept investors on the sidelines.
     Various sectors - including former President Corazon Aquino and former Manila archbishop Cardinal Sin - have expressed support for Davide, who was a key personality in the ouster of former President Joseph Estrada.
     "Technically, the market is on extended consolidation in line with the global market. Unfortunately, this consolidation is magnified by recent political concerns," Citiseconline.com Mark Alan Canizares said.
     Asiasec Equities analyst Oliver Plana said the market has moved sideways, although with a negative bias, in the absence of "market-moving" leads.
     Ayala Corp was top-traded, but down 0.05 pesos at 4.95 on volume of 14.52 mln shares.
     Globe Telecom was flat at 745 on 56,370 shares.
     Philippine Long Distance Telephone Co shed 15.00 pesos to 725 on 45,970 shares.
     Ayala Land was up 0.10 at 6.60 on 4.87 mln shares.
     Bank of the Philippine Islands ended flat at 44.50 on 689,600 shares.
     Filinvest Land shed 0.02 to 1.06 on 21.6 mln shares.
     San Miguel B, open to foreigners, was down 0.50 pesos at 62.50 on 238,100 shares. San Miguel A was steady at 56.50 on 66,800 shares.
     SM Prime shed 0.10 to 6.90 on 1.37 mln shares.
     Meralco B, open to foreigners, was up 0.25 at 20.00 on 384,500 shares. Meralco A rose 0.25 to 13.50 on 105,400 shares.
     The all-shares index closed down 2.19 at 821.00.
     The commercial-industrial index was down 13.35 at 1,986.15, while property was down 1.10 at 608.09.
     Mining dropped 28.84 to 1,576.84, while oil gained 0.02 to 1.32.
     Banking and financial services gained 2.48 to 438.61.
     cecille.yap@afxasia.com

 

DATAWATCH-Philippine manufacturing to get further boost in months ahead-GK Goh


     MANILA (AFX-ASIA) - The manufacturing sector will likely record further growth in the months ahead in line with the much-anticipated global economic recovery and on the back of an expected surge in Christmas holiday orders, GK Goh economist,Song Seng Wun, said.
     The National Statistics Office today reported manufacturing output in August rose 7.00 pct year-on-year in volume terms from 4.50 pct in July.
     August manufacturing sales volume also improved 9.30 pct year-on-year from a modest year-on-year rise of 1.40 pct recorded a month earlier.
     Song however said the robust growth was largely because manufacturing output in August 2002 suffered its worst contraction during the year, down 11. 40 pct year-on-year.
     "While the low base does exaggerate the extent of the rebound, it nevertheless points to a certain degree of stability," Song said.
     He said he expects production to peak in September and October on the back of an expected increase in demand locally and overseas.
     The average capacity utilitization rate of the manufacturing sector stood at 78.60 pct in August, relatively steady from 78.80 pct in July.
     Song took note of the lower merchandise exports recorded on the same month, saying the discrepancy between higher manufacturing data and lower export receipts suggests "the manufacturing sector could be producing more, but is selling for less."
     The National Statistics Office earlier reported exports fell for a second straight month in August, down 2.20 pct year-on-year to 2.966 bln usd, fueling worries the third quarter will see weak growth for the economy.
     Economists believe that the government's full-year exports growth forecast of 5.00 pct for exports is now unrealistic.
     (1 usd = 55.484 pesos)
     cecille.yap@afxasia.com

 

Philippines seeking regional, international boost in UN council seat


     UNITED NATIONS (AFX-ASIA) - The Philippines is hoping for both a political and economic boost from its election as one of the 10 non-permanent members on the UN Security Council last week, Agence France-Presse reported.
     UN ambassador Lauro Baja said the council seat, which he will hold for a two-year term beginning Jan 1, was a sign of renewed international faith in the country, which has not been on the council since the 1980s.
     "It represents a new era of Philippine engagement in global diplomacy," Baja said in an interview with AFP at UN headquarters in New York.
     "Whether you are in the administration or the opposition, the Philippines' being in the Security Council puts us in an elevated status."
     Baja said that with investors worried about stability and terrorism, and regional crises like North Korea's nuclear programme simmering, the vote was a welcome shot in the arm for President Gloria Arroyo and her administration.
     Arroyo hailed the election in a national address Friday after the Philippines was selected along with Algeria, Benin, Brazil and Romania to replace five countries whose council term ends this year.
     She called it a "recognisation of the Philippines' firm stand against terrorism."
     Ambassador Baja echoed her remarks and noted the country would not automatically follow the lead of the United States, which has given military and financial aid to the Philippines as part of its anti-terror drive.
     He said the dominance of the world's remaining superpower was unavoidable on the council -- which was set up by the UN charter to oversee peace and security -- but stressed that did not mean bending to Washington's will.
     "We will sit on the council and vote on the council bearing in my mind, always, our national interests," said Baja, adding that he believes the clout of the elected 10 members is perhaps underestimated.
     He downplayed suggestions that the council or the United Nations, after failing to reach consensus on the war in Iraq, has proven to be irrelevant in the face of the new global realities.
     "At the moment of danger or intended conflict, the first thing that comes to the mind of leaders or comes to the mind of the nation is to go to the UN," said Baja, former Philippine ambassador to both Italy and Brazil.
     "For the organization to be effective, it must strive also to keep the United States engaged in the UN. It must keep the United States interested."
     He said criticism of US policy was often "too brutal" in the open forum of the world body, and suggested that many nations were grandstanding to benefit their political constituencies back home.
     "If there is a total divorce and separation between the US and UN, the result is a catastrophe," he said.
     In addition to the permanent five -- Britain, China, France, Russia and the United States -- 10 nations rotate through two-year terms, five of them moving on in alternate years.
     Because all resolutions need nine votes to pass, the "Elected 10" could have the power to stop resolutions and help smooth out some of the differences among the famously divisive permanent five, he said.
     "The E-10 is a powerful voice on the council and we hope that we could contribute to a unified E-10," Baja said.
     "We also have this vision of being a bridge for the P-5 on certain issues."
     Baja said that one of the trickiest issues facing the council in the months to come is the standoff with Pyongyang over its nuclear programme.
     "The DPRK (North Korea) is one of the most intractable situations which the international community is facing, simply because we do not really know what they have in mind," he said.

 

Spectre of China looms over Philippine electronics exporters


     MANILA (AFX-ASIA) - Fear of growing competition from China has unnerved the Philippine electronics exports sector, which is already struggling with a downturn in recent months, industry leaders said.
     In addition, many of the electronics businesses in the Philippines complain that the government is not doing enough to address their concerns even though the industry has been the keystone of the country's economy for years.
     Their main complaints are the high cost of power, the poor infrastructure and the shaky security situation that has sent potential foreign electronics investors looking elsewhere.
     The industry association, the Semiconductors and Electronics Industries in the Philippines Inc (SEIPI), complained to the government this month that unknown gunmen had been "hijacking" trucks that bring electronics products to ports or airports for shipment abroad.
     "All is not lost but if we don't do something about it, we are heading down a disastrous slope," warned Arthur Young, chairman of PSI Technologies Inc, in a recent industry forum.
     "Not all of us are surviving here. Many companies have shut down and moved to China," said Dan Lachica, president of First Sumiden Circuits.
     Electronic exports have been one of the few success stories for the beleaguered Philippine economy.
     Semiconductors, components and other electronic items now make up more than 60 pct of the country's exports, easily displacing such traditional commodities like coconut products and metallic ores.
     From January to August this year, total Philippine exports hit 23 bln usd, of which 65 pct consisted of electronics products.
     But exports have also been falling for much of the past year, due partly to the weakening demand for electronic products overseas.
     In a report to SEIPI, Norberto Viera, president of Texas Industries Philippines Inc, said that the industry had a weak opening in 2003 due to fears over the Severe Acute Respiratory Syndrome (SARS) outbreak and the impending war in Iraq.
     But he expressed optimism that exports would improve in the balance of 2003, but added that he was "expecting a below average growth (this) year with an improving outlook for 2004."
     He cited statistics showing that the economies in the developed countries that buy electronics goods were starting to pick up, boosting local demand.
     What worries the local industry is that low labor costs and improved technology and infrastructure in China could eventually lure companies away from the Philippines.
     Young, of PSI Technologies, said the government must be "more flexible" to react to changes in the market in order to attract investors.
     It should also act swiftly to keep the local industry competitive by trying to bring down power rates, said Mike Petrucci, president of Amkor Technology Philippines Inc.
     "I don't look at China as the threat. The threat is in the Philippines itself," he said during a SEIPI dialogue last week.
     Economic Planning Secretary Romulo Neri said the government was addressing the problems but said it could do little, for example, in the short-term to bring down power rates.
     "You'll have to live with it," he said at the dialogue, remarking that government could only "whittle down" the obstacles.
     Most of the electronics companies operating in the Philippines affirm that their productive, well-trained, English-speaking work forces are more than a match for the low-wage workers in China.
     "Bluntly speaking (Filipino) labor is excellent," said Ippei Futaki, president of Toshiba Information Equipment Philippines.
     "Efficiency and quality is the key," he advised.
     "China will always be a manufacturing haven but it can't be everything," said Art Tan, president of Integrated Microelectronics Inc, advising that the Philippines can find its own niche in electronics.
     Steve Leece, managing director of Moog Controls Corp, maker of airline components, said that his company has found success selling higher-value products.
     "We're not interested in competing with China in plastic Christmas trees, " he said.
     Citing his own high-end airline components, Leece said "we're selling to China, not buying from them."

 

Philippine Premiere Entertainment stockholders approve purchase of Next Mobile


     MANILA (AFX-ASIA) - Premiere Entertainment Productions Inc said its stockholders have approved the company's acquisition of a controlling stake in Next Mobile Inc, which is engaged in the management and operation of the Nextel Radio-Phone Network.
     In a disclosure to the stock exchange, Premiere Entertainment said its stockholders also approved the change in the company's primary purpose to telecommunications, and its change in name to "Net Communications Inc."
     Shareholders have also given their go-ahead to the decrease in the company's authorized capital stock to 500 mln pesos from 1.0 bln, by reducing the par value of common shares to 0.50 pesos from 1.00 pesos each.
     The company, as approved by shareholders, will then increase its authorized capital stock to 7.0 bln pesos from 500 mln, divided into 14.0 bln common shares at a par value of 0.50 pesos each.
     "In relation to the amendments, the stockholders approved the acquisition of a controlling interest of about 97 pct of Next Mobile in exchange for shares of stock of Premiere Entertainment to be taken from the increase in capital stock," Premiere Entertainment said.
     (1 usd = 55.427 pesos)
     cecille.yap@afxasia.com

 

Philippine August manufacturing output volume up 7.00 pct yr-on-yr


     MANILA (AFX-ASIA) - Manufacturing output in August rose 7.00 pct in volume terms after revised growth of 4.50 pct year-on-year in July, the National Statistics Office said.
     Manufacturing sales in August, meanwhile, increased 9.30 pct year-on-year in volume terms after a revised gain of 1.40 pct year-on-year in July.
     The NSO had earlier reported July output rose 4.40 pct year-on-year and sales grew 0.60 pct year-on-year, both in volume terms.
     In value terms, manufacturing output in August rose 11.90 pct year-on-year, while sales increased 16.10 pct year-on-year.
     In July, output rose a revised 13.10 pct year-on-year and sales rose 10. 30 pct year-on-year, both in value terms.
     The average capacity utilitization rate of the manufacturing sector stood at 78.60 pct in August compared with 78.80 pct in July.
     The NSO said manufacturing output by volume picked up in August mainly due to increased production in basic metals, wood and wood products, non-electrical machinery, petroleum products, miscellaneous manufactures and textiles.
     Month-on-month, manufacturing output in volume terms in August rose by 1. 80 pct, with tobacco and electrical machinery sectors as major contributors.
     August sales in volume terms were higher due to double-digit growth in non-electrical and electrical machinery, wood and wood products, basic metals, petroleum products, non-metallic mineral products, textile, publishing and printing and miscellaneous manufactures, the NSO said.
     In value terms, manufacturing output jumped significantly in August from a year ago as double-digit increases were recorded in basic metals, petroleum products, non-electrical machinery, miscellaneous manufactures, textiles and paper and paper products.
     On a month-on-month basis, August sales in value terms declined 0.5 pct from July due to the sluggish performance of leather and chemical products.
     (1 usd = 55.33 pesos)
     cecille.yap@afxasia.com

 

Philippine National Bank to sell 40.0 bln pesos worth of bad assets - report


     MANILA (AFX-ASIA) - Philippine National Bank is planning to sell 40.00 bln pesos worth of bad assets through a special purpose vehicle (SPV), the BusinessWorld newspaper reported, quoting PNB executive vice president Federico Cadiz.
     Cadiz said the bank is studying plans to sell 20.00 bln pesos worth of foreclosed assets and another 20.00 bln pesos of non-performing loans through interested SPV investors.
     He added the bank is not limiting its strategy to the SPV and is also weighing the advantages of disposing of properties through joint ventures and selling to portfolio investors looking for specific products such as office properties.
     (1 usd = 55.33 pesos)
     cecille.yap@afxasia.com

 

Philippine Security Bank uses ING Bank for 200-300 mln usd debt issue -sources


     MANILA (AFX-ASIA) - Security Bank Corp has appointed ING Bank as lead underwriter for its planned issue of 200.00-300.00 mln usd of unsecured subordinated debt that will boost its existing capital base, market sources said.
     ING Bank beat Rizal Commercial Banking Corp and Deutsche Bank to handle Security Bank's debt issue, they said.
     Security Bank is the latest local commercial bank to try to increase its capital base under the Tier 2 capital arrangement. Tier 2 capital enables banks to meet capital requirements without diluting the shareholder base.
     (1 usd = 55.33 pesos)
     cecille.yap@afxasia.com

 

Manila shares outlook - Mixed to slightly lower on extended consolidation


     MANILA (AFX-ASIA) - Share prices are expected to open mixed to slightly lower, with the market likely to consolidate further ahead of more third quarter earnings reports and in the absence of fresh leads, dealers said.
     Last Friday, the composite index was down 1.04 points, or 0.08 pct, at 1, 363.40 on 276.4 mln shares worth 8.53 bln pesos, with turnover value boosted by block sales.
     "The market will continue to consolidate with a downward bias (this) week. We don't think we're going to see a big sell-off, but there's probably not that much more upside," AB Capital Securities research director Jose Vistan Jr said.
     Technically, a correction from perceived overbought levels should be good to allow stocks to advance to "healthier levels," Vistan added.
     BPI Securities, in its daily note to investors, said third quarter releases would most likely affect specific issues while the market remains in consolidation.
     "Long-term prospects for the market, however, have clouded given recent political events. Investors may opt to adopt a more cautious stance, particularly as we near elections next year," BPI said.
     Movie action star Fernando Poe Jr, a strong contender to the presidency, disappointed supporters when he did not announce his political plans during a rally Saturday.
     Another political concern is the House of Representatives' recent impeachment of Supreme Court Chief Justice Hilario Davide Jr, dealers said.
     If the House endorses the complaint, Davide would go on trial in the Senate, which would decide whether or not to remove him from office.
     (1 usd = 55.33 pesos)
     cecille.yap@afxasia.com

 

Philippine Megaworld eyes 25.0 pct stake in Fort Bonifacio Dev't Corp - report


     MANILA (AFX-ASIA) - Listed property developer Megaworld Corp is interested in acquiring a 25.0 pct stake in Fort Bonifacio Development Corp (FBDC), developer of the Fort Bonifacio Global City in Taguig, from the state-run Bases Conversion Development Authority (BCDA), the Philippine Daily Inquirer newspaper reported.
     "We are studying it. It's interesting. We're waiting for more details, guidelines, terms, price, etc," Megaworld investor relations officer Luke Tan was quoted as saying.
     BCDA earlier said it expects to generate around 7.0 bln pesos from the sale of its 25.0 pct stake in FBDC.
     The state-run agency owns 45.0 pct of the 214-hectare prime property in the Bonifacio Global City, which used to be a former military camp.
     Ayala Land Inc and Evergreen Holdings earlier acquired Bonifacio Land Corp's 50.4 pct in Fort Bonifacio for 90.0 mln usd.
     (1 usd = 55.33 pesos)
     cecille.yap@afxasia.com

 

Philippine central bank approves govt's 1.0 bln usd borrowing plans - report


     MANILA (AFX-ASIA) - The central bank has approved in principle the national government's plan to raise another 1.0 bln usd from the international bond market either within this year or early next year to advance government's borrowing requirement for 2004, the Philippine Daily Inquirer newspaper reported, quoting central bank governor Rafael Buenaventura.
     "We have discussed the idea and we have approved it in principle. It is better if they could raise the money before the end of the year because it is hard to tell what could happen next year. There are too much political noises already," Buenaventura was quoted to have said.
     The government has just completed a 1.5-bln usd global bond offer that will cover its remaining 225.00 mln usd funding requirements for this year, as well as some of its 1.80-bln usd requirement for 2004.
     Interest rates are expected to rise in the run up to the presidential election in May.
     Meanwhile, the report said the central bank would return to the syndicated loan market to raise 500 mln usd in five-year funds after next year's elections to pay obligations that will fall due next year.
     The central bank has to settle 830 mln usd in maturing loans in 2004.
     (1 usd = 55.33 pesos)
     cecille.yap@afxasia.com

 

Philippines' Solid Group plans to acquire Destiny Cable


     MANILA (AFX-ASIA) - Solid Group Inc said it is pursuing a plan to acquire Destiny Cable Inc, a move its shareholders approved earlier.
     "We're in consultations with our lawyers as to how to structure the acquisition in consideration of the foreign ownership restriction on companies engaged in mass media business," Solid told the stock exchange.
     It gave no further details.
     Solid is engaged in the manufacture and wholesale distribution of consumer electronics products in the Philippines.
     edelacruz@afxasia.com

 

BROKER CALL - Indonesia's Darya a 'hold' after acquisition by Unilab - BNI


     JAKARTA (AFX-ASIA) - BNI Securities recommends a "hold" on pharmaceutical firm PT Darya Varia Laboratories due to its high price volatility amid a better outlook after its acquisition by the Philippines' United Laboratories (Unilab).
     Analyst Rohma Fitri said BNI Securities' 12-month price target for Darya is 850 rupiah a share. Darya closed today up 75 at 800.
     She said BNI's recommendation on Darya was the first after Unilab acquired First Pacific Co Ltd's entire 89.5 pct in the company in December 2001.
     Unilab purchased the shares through unit Far East Drug Ltd for 35.00 mln usd from the Salim Group, which owns First Pacific.
     "The new owner appears to be more serious in running Darya as a pharmaceutical company," Fitri said.
     However, Darya is still in consolidation after Unilab's entrance, she said, pointing to its weaker sales for the first half to June.
     Sales dropped 31.50 pct year-on-year to 213.40 bln rupiah due to the divestment of distribution unit PT Wigo Distribusi Farmasi. Wigo was sold to Zuellig Pharma Holdings for 6.4 mln usd.
     The divestment, however, improved Darya's gross and operating margins.
     Fitri expects Darya to maintain a full-year operating margin of 20.00 pct in 2003, higher from last year's 13.00 pct.
     Darya may become a debt-free company by next year as it plans to repay its outstanding foreign debt of 2.80 mln usd, she added.
     On the downside is Darya's price volatility, which makes the stock a high risk investment, Fitri said.
     "Given a potential price appreciation of only 17.00 pct for the stock and its high risk category, we can recommend only a 'hold'," she said.
     Darya makes up to 75.00 pct ethical products, while the rest are over the counter (OTC) items. Its main ethical brand is Super Tetra, while the popular OCT brands include Enervon C and Decolgen.
     (1 usd = 8,458 rupiah)
     berni.km@afxasia.com

 

Philippines' Grand Plaza Hotel buys back 4.1 mln shares at 50 pesos each


     MANILA (AFX-ASIA) - Grand Plaza Hotel Corp said it bought back a total of 4.1 mln shares at 50.00 pesos each, or a total purchase price of 205.24 mln pesos.
     The shares represent 88.48 pct of the maximum 4.63 mln shares covered by the company's buy-back offer, it told the stock exchange.
     Some 31 shareholders availed themselves of the company's offer to purchase one share out of every 20 shares held by each stockholder on record as of Sept 30.
     (1 usd = 55.33 pesos)
     edelacruz@afxasia.com

 

Philippines' Meralco seeks ERC approval for phases III, IV of refund


     MANILA (AFX-ASIA) - Manila Electric Co said it has sought approval from the Energy Regulatory Commission to implement the third and fourth phases of the Supreme Court-ordered refund of overcharges to customers.
     The company proposes to undertake the third phase in two years and the fourth phase in five years, it added.
     Meralco has submitted to the ERC its proposed guidelines and procedures for the refund's third and fourth phases, which will cost the utility some 23. 40 bln pesos.
     The phase III refund, which Meralco intends to undertake from March 2004 to Feb 2006, will cost 4.91 bln pesos, it said. It will cover residential and general service customers, who consumed more than 300.00 kilowatthour (kWh) in their April 2003 bill.
     The company expects to refund as much as 18.53 bln pesos under phase IV, which is the last and covers commercial and industrial customers.
     Meralco intends to undertake the refund to its major customers from July 2005 to March 2010, either through a financial instrument incorporating a liquidity mechanism or fixed credit to bills, depending on the gross refund amount.
     "The financial instrument will provide the customers the ability to liquidate their 'refund coupons' whenever they want and, at the same time, give Meralco the time to recover from its cash flow difficulty and normalize its credit ratings," the company said in its proposal to the ERC.
     "Processing of the refunds through the financial instrument would be completed by June 2004."
     Meralco said it will submit to the ERC a separate proposal on the procedures involving the financial instrument mode.
     For terminated accounts, the refund period is set for March-May 2010 under Meralco's proposal, based on customer groupings to be submitted later, the company said.
     "The refund (for terminated accounts), whether through a financial instrument or a check, will be net of arrears," it said.
     Meralco refunded some 2.12 bln pesos under phase I and expects to return as much as 4.56 bln under phase II, both of which cover clients who consumed up to 300 kWh a month.
     The Supreme Court earlier upheld its Nov 2002 ruling, which was based on a 1998 decision of the defunct Energy Regulatory Board ruling that Meralco had over billed customers from Feb 1994 due to its treatment of income tax as operating expense, which the company used as basis in computing its tariff.
     (1 usd = 55.338 pesos)
     edelacruz@afxasia.com

 

Philippines' Centro Escolar University cash dividend 0.10 pesos


     MANILA (AFX-ASIA) - Centro Escolar University said it will pay a cash dividend of 0.10 pesos per share to holders on record as of Nov 10.
     Payment is set for Dec 4.
     (1 usd = 55.338 pesos)
     afxmanila@afxasia.com

 

Philippines' San Miguel to venture into food business in Vietnam


     MANILA (AFX-ASIA) - San Miguel Corp said it has acquired 100 pct of TTC (Vietnam) Co Ltd, a company engaged in pig farming and feed milling operations in Vietnam, for 35.50 mln usd.
     The acquisition was finalized in a share sale and purchase agreement that San Miguel signed yesterday with Taiwan Tea Corp for the purchase of the latter's 100 pct stake in TTCV Investment (BVI) Co Ltd.
     "Effectively through this transaction, San Miguel will own 100 pct of TTC (Vietnam)," the company told the stock exchange.
     The Philippines' largest food and beverage conglomerate said TTC Vietnam is its first acquisition of a food business in that country.
     It expects to complete the purchase by Oct 30.
     In a separate statement, San Miguel said it intends to continue running the Vietnam firm with a majority of its 500-strong Vietnamese workforce, supported by a core management team to oversee a smooth integration.
     San Miguel said, with TTC Vietnam as springboard, it aims to speed up its entry into that country's basic and processed meats market, while creating a stronghold in the acquired company's growing animal and aquatic feeds market.
     The purchase includes all assets and facilities on a 234-hectare leased property located in Binh Duong, said to be the fastest growing province in Vietnam.
     "The facility serves mainly Ho Chi Minh City, which is Vietnam's most progressive city today," San Miguel said.
     San Miguel earlier disclosed plans to set up food and beverage complexes in at least seven Asian markets, Thailand, China, Vietnam, Indonesia, Australia, Malaysia and Taiwan, as part of its regional expansion.
     It earlier announced an agreement with Thai developer Amata City Co Ltd for the purchase of an industrial complex in Amata City, Rayong, in Thailand for 20.00 mln usd.
     The business in Thailand will involve manufacturing beverage products, such as packaged water, carbonated soft drinks, carbo-natural drinks, juice, tea and energy drinks, as well as snack and feed mill operations.
     San Miguel said it intends to invest 100.00 mln usd in each of the seven markets it is looking at, and expects sales there to boost the company's annual revenue by 300.00 mln usd.
     At 10.25 am, San Miguel B, available to foreign investors, was untraded after closing previously at 62.50 pesos, while San Miguel A was unchanged at 56.50.
     (1 usd = 55.338 pesos)
     edelacruz@afxasia.com

 

Philippine Philex Sept copper/gold/silver output gross value 285.50 mln pesos


     MANILA (AFX-ASIA) - Philex Mining Corp said it produced in September 1.71 mln kilograms of copper, 236,169 grams of gold and 257,071 grams of silver with an estimated gross value of 285.50 mln pesos.
     The company earlier reported an output with a value of 261.30 mln pesos for August.
     Shipments of copper, gold and silver in September were valued at 196.74 mln pesos, Philex told the stock exchange.
     (1 usd = 55.337 pesos)
     cecille.yap@afxasia.com

 

Manila shares close slightly down on consolidation, political concerns


     MANILA (AFX-ASIA) - Share prices closed slightly lower on an extended consolidation due to recent political concerns, although gains in Philippine Long Distance Telephone Co limited the decline, dealers said.
     Investors have also chosen to stay on the sidelines due to the peso's weakness and to await more third-quarter corporate earnings results, they added.
     The composite index was down 1.04 points, or 0.08 pct, at 1,363.40 on 276. 4 mln shares worth 8.53 bln pesos. It traded between 1,357.52 and 1,363.70.
     Block sales in Globe Telecom boosted the market's turnover.
     Losers beat gainers 45 to 16, with 35 stocks unchanged.
     PLDT was top-traded and rose 15.00 pesos to 745 on volume of 95,460 shares amid expectations it will meet its full-year net profit target of 9. 00-10.00 bln pesos.
     Its president and chief executive officer Manuel Pangilinan yesterday expressed confidence the earnings goal will be achieved, despite the company's huge one-off provisions.
     Some dealers said the snowballing impeachment proceedings against Supreme Court Chief Justice Hilario Davide Jr may have dampened investor sentiment, although there are those who argue the investing community does not seem to care about the issue given recent Supreme Court decisions were "anti-business. "
     "The impeachment case against Davide has overshadowed the good news that the Philippines has been elected to the United Nations' Security Council... This, coupled with other political developments, seems to indicate to investors they are looking at a government that is politically unstable," Regina Capital Development analyst Gomer Tan said.
     AB Capital research director Jose Vistan Jr, however, said the business community is largely unaffected by the recent developments on the political front.
     "I don't think the business community minds. Lately, the Supreme Court made decisions that have ben anti-business and unpopular," Vistan said.
      Davide, who presided over the botched impeachment trial against former president Joseph Estrada, has been impeached by a third of the House of Representatives -- mostly members of the opposition block -- for alleged misuse of public funds.
     The complaint will now be submitted to the Senate, which will be converted into an impeachment court to rule on the case. Davide is the first chief justice to be impeached in Philippine history.
     Some attributed the market's slight weakness to jitters arising from reports that another action movie star will run in and likely win next year's presidential race. Action star Fernando Poe Jr will reportedly announce his decision in the next few days.
     "It is somewhat unfair to attribute the market's decline to Fernando Poe's running. If people want him, then so be it. This is a democratic country. Why pull him down this early?" Vistan said.
     Bank of the Philippine Islands was down 0.50 pesos at 44.50 on 1.16 mln shares.
     Globe was unchanged at 740 on 41,650 shares. A total of 12.00 mln Globe shares worth 8.16 bln pesos were sold in several block sales before the close of the session.
     The shares were sold at 680.00 pesos each with UBS Securities Philippines, Deutsche REGIS Partners, ING Barings, Philippine Equity Partners, BPI Securities and CLSA Philippines handling the transactions.
     Early this week, Globe Telecom said it would close the deal to repurchase 12.00 mln of its shares from Deutsche Telekom AG unit DeTeAsia Holdings GmbH today.
     The shares Globe bought back represent 7.90 pct of its total outstanding common shares.
     Filinvest Land closed 0.08 pesos lower at 1.08 on 16.9 mln shares.
     Ayala Corp was up 0.10 pesos at 5.00 on 4.02 mln shares, while unit Ayala Land was unchanged at 6.50 on 1.36 mln shares.
     First Holdings was unchanged at 18.00 on 999,400 shares.
     Metrobank was down 1.00 peso at 26.50 on 393,000 shares.
     The all-shares index closed down 5.78 at 823.19.
     The commercial-industrial index was up 7.18 to 1,999.50, while property was down 3.23 to 609.19.
     Mining dropped 36.65 to 1,605.68 and oil fell 0.04 to 1.30.
     Banking and financial services retreated 6.99 to 436.13.
     (1 usd = 55.337 pesos)
     cecille.yap@afxasia.com

 

Philippine Globe Telecom 12 mln shares worth 8.16 bln sold in block sales-PSE


     MANILA (AFX-ASIA) - Globe Telecom's 12.0 mln shares worth a total of 8.16 bln pesos were sold in several block transactions in late trade, data from the Philippine Stock Exchange show.
     The shares were sold at 680.00 pesos each. The transactions handled by UBS Securities Philippines, Deutsche REGIS Partners, ING Barings, Philippine Equity Partners, BPI Securities and CLSA Philippines.
     No other details were available.
     Early this week, Globe Telecom said it will close its deal to repurchase 12 mln of its shares from Deutsche Telekom AG unit DeTeAsia Holdings GmbH today.
     The shares bought back by Globe account for 7.90 pct of its total outstanding common shares.
     (1 usd = 55.338 pesos)
     cecille.yap@afxasia.com

 

Philippine Jan-July current a/c surplus 1.064 bln usd vs 2.466 bln


     MANILA (AFX-ASIA) - The country recorded a current account surplus of 1. 064 bln usd in the seven months to July, substantially lower than the year-earlier period's surplus of 2.466 bln, the central bank said.
     Earlier, it reported that the country's balance of payments (BoP) deficit in the seven months to July narrowed to 239.000 mln usd from 616.000 mln usd in the first half to June.
     The central bank expects this year's BoP to hit a deficit of 1.130 bln usd, while the current account surplus is seen at 1.700 bln, lower than the original target of 2.400 bln, after it lowered its 2003 export growth assumption to 3.00 pct from 5.00 pct.
     (1 usd = 55.325 pesos)
     cecille.yap@afxasia.com

 

Philippines' Arroyo says Jemaah Islamiyah a national security threat


     MANILA (AFX-ASIA) - Philippine President Gloria Arroyo said the Jemaah Islamiyah (JI) has replaced local insurgent groups as the country's top security threat with a capability to sow far-reaching terror attacks.
     "We are elevating the JI into our official national threat spectrum," Arroyo said in a statement.
     "We are going into a more focused campaign against the JI, complete with a new order of battle and targets for domestic and transnational intelligence in concert with our allies," she said.
     Recent arrests of top JI leaders in the Philippines have exposed that the group's plans "are both deadly and far-ranging" and could threaten the stability of the region, Arroyo said.
     The statement came a day after Arroyo announced the arrest of Taufek Refke, a 23-year-old Indonesian who is allegedly the JI's number two man in the southern Philippines.
     Refke, who was arrested in the south early this month, is believed to have trained under JI bomb expert Fathur Rohman al-Ghozi. Al Ghozi earlier escaped from a Manila police jail but was subsequently gunned down by security forces in the south.
     Officials said some 40 other JI militants, most of who are believed to be Indonesian, are on the loose in the southern island of Mindanao, where a massive manhunt has been launched.

 

Philippines' Salcon Power seeks extension of contract with govt beyond 2009


     MANILA (AFX-ASIA) - Salcon Power Corp said it is seeking to extend its 15-year power purchase contract with the government beyond its expiration in 2009.
     This is in exchange for the buy-out of Salcon's contract to operate two land-based gas turbine units with a combined capacity of 54 megawatts by the government, through the National Power Corp.
     "The buy-out of the contract forms part of the offer made by SPC to NPC in support of the government's call to the independent power producers (IPPs) to assist in lowering the cost of electricity in the country," Salcon Power senior vice president Alfredo Ballesteros said.
     Salcon made the disclosure to the stock exchange following a statement by the Power Sector Assets and Liabilities Management Corp (PSALM) that it has re-negotiated the terms of the government's power purchase contract with Salcon, which will result in savings of about 3.0 bln pesos for the government.
     The government has sought to restructure the contracts with IPPs to cut costs that are eventually passed on to consumers.
     Salcon said the contract buy-out is limited only to the two gas turbine units and not the entire 203.8-MW power plant units comprising the Naga Power Plant Complex in the central Philippines.
     Salcon said it has not yet been officially informed of the acceptance by the government of its offer.
     It did not say how long it wants its contract extended.
     (1 usd = 55.30 pesos)
     edelacruz@afxasia.com

 

Philippines' San Miguel to venture into pig farming, feed milling in Vietnam


     MANILA (AFX-ASIA) - San Miguel Corp said it has acquired 100 pct of TTC (Vietnam) Co Ltd, a company engaged in pig farming and feed milling operations in Vietnam, for 35.5 mln usd.
     The acquisition was finalized in a share sale and purchase agreement that San Miguel signed yesterday with Taiwan Tea Corp for the purchase of the latter's 100 pct stake in TTCV Investment (BVI) Co Ltd.
     "Effectively through this transaction, San Miguel will own 100 pct of TTC (Vietnam)," San Miguel told the stock exchange.
     The Philippines' largest food and beverage conglomerate said TTC Vietnam is its first acquisition of a food business in that country.
     It expects to complete the purchase by Oct 30.
     No further details were provided.
     San Miguel earlier disclosed plans to set up food and beverage complexes in at least seven Asian markets -- Thailand, China, Vietnam, Indonesia, Australia, Malaysia and Taiwan -- as part of its regional expansion.
     It earlier announced an agreement with Thai developer Amata City Co Ltd for the purchase of an industrial complex in Amata City, Rayong in Thailand for 20.00 mln usd.
     The business in Thailand will involve manufacturing beverage products such as packaged water, carbonated softdrinks, carbo-natural drinks, juice, tea and energy drinks, snacks and feed mill operations.
     San Miguel intends to invest 100 mln usd in each of the seven markets it is looking at, and expects sales in these markets to boost the company's annual revenue by 300 mln usd.
     At 10.25 am, San Miguel B, available to foreign investors, was untraded after closing previously at 62.50 pesos. San Miguel A was unchanged at 56.50.
     (1 usd = 55.299 pesos)
     edelacruz@afxasia.com

 

OUTLOOK -Philippines' Globe Q3 net profit seen at 1.6-2.6 bln pesos vs 1.3 bln


     ---- by Enrico dela Cruz ----
     MANILA (AFX-ASIA) - Globe Telecom Inc is expected to report a net profit of 1.60-2.60 bln pesos in the third quarter to September, exceeding the year-ago profit of 1.30 bln, on the back of sustained gains in the wireless business, analysts said.
     This means Globe's nine months to September net profit will be in the range of 6.0-7.0 bln pesos, up from 4.30 bln in the same period last year, they said.
     While Globe maintains its dominance in the postpaid wireless market, they said the company is also exerting efforts to widen its prepaid segment by introducing its own cheap prepaid reload service -- a strategy that has helped boost earnings of rival Smart Communications Inc.
     Globe may report its results next week or early November.
     AB Capital Securities research director Jose Vistan Jr said he expects Globe's third quarter net profit to come in at "more or less" 2.0 bln pesos.
     He said Globe has been aggressively promoting its brand and new services, and has begun to focus on the bigger and more profitable prepaid market.
     This was after Globe saw its its subscriber base increasing by only a little higher than 400,000 in the second quarter, while Philippine Long Distance Telephone (PLDT) added almost a million subscribers during the period.
     At end-June, however, Globe's share of the combined postpaid market of Globe and Smart stood at 74 pct.
     Globe has introduced its own lower-denominated electronic reload service, similar to Smart's cheap over-the-air prepaid reloads. But Globe's lowest denomination of 50 pesos is more expensive than the cheapest 30 pesos worth of credit offered by Smart, a unit of PLDT.
     Pilipino Telephone Corp, which is also part of the PLDT group, also offers as low as 30 pesos worth of electronic reloads for its Talk N' Text mobile brand.
     "In a market like ours, venturing into this kind of marketing strategy really helps," Vistan said.
     Vistan sees Globe's full-year net profit at 8.70 bln pesos, a big jump from 6.80 bln in 2002.
     In the first half of this year, the company reported a net profit of 4.40 bln pesos after booking provisions against unit Islacom's equity investments in C2C Holdings Pte Ltd.
     Barring any further provisions in the third quarter, Westlink Global Equities research head James Lago said Globe may report a net profit of 1.8-2. 0 bln pesos for the period.
     With the fourth quarter normally stronger than the third due to seasonal factors, Lago said the company's full-year net profit could come in at "roughly 8.0 bln pesos."
     Ron Rodrigo, a research consultant at Accord Capital Equities, said he expects Globe to report a net profit of 1.60-2.60 bln pesos for the third quarter and 8.30 bln for the whole year.
     The company added new wireless subscribers during the period, he said, bringing its total subscriber base to around 8-9 mln by end-September.
     As of end-June, Globe's subscribers totalled almost 7.3 mln, up 34 pct from last year.
     Rodrigo noted that Globe and its rivals have also been aggressively penetrating the rural areas, a market that has not fully enjoyed landline service despite the de-monopolization of the industry some years back.
     Analysts believe the country's penetration rate for wireless service could still rise in the coming years. The growing use of mobile phones has been fuelled by the popularity of short message and value-added mobile services, which are considered an affordable means of communication.
     The love affair of Filipinos with cellular phones has also encouraged television and radio programs to launch games and promotional gimmicks through text messaging.
     In a note in late September, ING Financial Markets said it sees the Philippines' penetration rate to rise to 25.6 pct by end-2003, and further to 32.8 pct by end-2005, from 22 pct as of end-June.
     "Due to the success of cheaper reloads introduced by Smart in May 2003, we have once again increased our mobile market penetration forecasts," it said.
     And with the decision of Globe's major shareholders Ayala Corp and Singapore Telecommunications, and Globe itself, to acquire the 24.8 pct stake of Deutsche Telecom AG unit DeTeAsia Holdings GmbH in Globe, analysts said the potential overhang on the issue of ownership and control of Globe has been avoided.
     Following the purchase this month, Ayala Corp and SingTel will each hold 42.70 pct of Globe, while the shares bought back by Globe will account for 7. 90 pct of its total outstanding common shares.
     (1 usd = 54.26 pesos)
     edelacruz@afxasia.com

 

Philippine WG&A extends deadline for transfer of unit's ops to end-Dec


     MANILA (AFX-ASIA) - William, Gothong & Aboitiz Inc said its board of directors has extended the transfer of the shipping operations of unit Cebu Ferries Corp to the parent firm to December 31 instead of an earlier November 1 deadline.
     The extension will give th firm enough time to complete the integration process, the company said in a disclosure to the stock exchange.
     Cebu Ferries operates five vessels, which it charters from WG&A.
     The integration of the wholly-owned unit is part of the group's efforts to improve operational efficiency.
     cecille.yap@afxasia.com

 

STOCK ALERT - Philippines' PLDT up early on upbeat earnings forecast


     MANILA (AFX-ASIA) - Philippine Long Distance Telephone Co rose in early trade, recovering from losses in the previous days, after its president and chief executive officer Manuel Pangilinan expressed confidence its full year net profit target of 9.00-10.00 bln pesos would be met, dealers said.
     Investors shrugged off the extended decline of its American Depositary Receipts, which ended down 0.12 usd at 13.38 last night, they added.
     At 9.41 am, PLDT was top traded, up 10.00 pesos at 740 on 17,320 shares.
     Pangilinan said PLDT would still book new provisions in the third quarter, but nevertheless expects to end the year well within its net income goal.
     He said PLDT's mobile phone subsidiary Smart Communications Inc will continue to fuel growth.
     Analysts AFX-Asia polled expect PLDT to report a third quarter to September net profit of 2.50-3.70 bln pesos on the back of sustained robust growth in its wireless business.
     The forecast represents an earnings increase of as much as 164.00 pct over the 1.40 bln pesos posted in the third quarter of 2002, but does not, however, take into account any one-off provisions.
     (1 usd = 55.24 pesos)
     cecille.yap@afxasia.com

 

Philippine WG&A's board of directors approves stock dividends


     MANILA (AFX-ASIA) - The board of directors of WG&A Inc has approved the declaration of stock dividends in the form of common shares out of the company's existing additional paid-in capital.
     Every four common shares will be issued one common share.
     The board also approved to increase the company's authorized capital stock to 3.12 bln common shares from 1.625 bln to accommodate the shares to be issued upon the declaration of the stock dividend.
     "The additional new shares shall be used by the company to finance its future expansion programs, when appropriate," WG&A said in a statement.
     A special stockholders' meeting will be held on December 18 to approve the stock dividends.
     (1 usd = 55.24 pesos)
     afxmanila@afxasia.com

 


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