Saturday January 17, 2004
Philippine banks end-Nov total loans at 1.49 trln pesos, up 4.3 pct yr-on-yr
Philippines' Atlas plans capital infusion to address deficit
Philippines expresses concern over US inaction on telecom executives
Philippine Swift Foods' 39,795 shares to be delisted Jan 19 - PSE
Philippines may further reduce cement import duty
Philippine National Bank's 2.2 bln-peso notes issue under review - Moody's
Philippines' Metrobank to pay 0.40 peso cash div not later than Feb 16
Philippines' PLDT to list 4,242 common shares Jan 19 - stock exchange

Friday January 16, 2004
Philippines' Piltel expects to return to profitability in 2004
STOCK ALERT - Philippines' SM Prime firmer on technical bounce
Philippines' PCI Leasing, Interphil Laboratories buy back shares on Jan 15
Philippines' APC Group details plan to turn negative equity to positive
STOCK ALERT - Philippines' PLDT firmer on bargain-hunting, ADR gain
STOCK ALERT -Philippines' Meralco B up on easing of rate rollback worries
Philippine National Bank raises 40 mln pesos via asset sale -report
Philippines' RCBC plans to expand Europe remittance service - report
Philippines' PSi blames lack of govt support for shift to China - report
Philippine exploration projects attract 14 foreign bidders - Energy Dep't
Philippines bans poultry imports from Vietnam, Japan due to bird flu

January 14 - 15
January 12 - 13  
January 8 - 9 
January 6  -  7
January 04 - 05


Philippine banks end-Nov total loans at 1.49 trln pesos, up 4.3 pct yr-on-yr

     MANILA (AFX-ASIA) - Outstanding loans of Philippine commercial banks grew 4.3 pct year-on-year to 1.49 trln pesos as of end-November from 1.43 trln at end-October on the back of increased business borrowings and other commercial activities ahead of the holiday season, the central bank said.
     The recovery in bank lending was also accompanied by acceleration in the growth of domestic liquidity which grew 4.6 pct as of end-November from a 2.5 pct year-on-year rise in October.
     "The growth in bank lending to the manufacturing, community, social and personal services, and financial services sector, which account for a combined share of 68 pct of the outstanding loans, accelerated in November," the central bank said in a statement.
     The increased demand for loans was supported by improved activity in the real sector, the central bank said.
     The National Statistics Office earlier reported that the average capacity utilization of manufacturing firms in October rose to 78.9 pct, better than the 77.7 pct in September.
     Registered electricity sales in November also improved 3.6 pct year-on-year after two months of almost flat growth.
     (1 usd = 55.54 pesos)


Philippines' Atlas plans capital infusion to address deficit

     MANILA (AFX-ASIA) - Atlas Consolidated Mining and Development Corp said it is considering fresh capital infusion and equity investments to reduce substantially, if not wipe out entirely, its capital deficiency.
     The company said its debt reduction program is also at an "advanced stage" and is expected to help address the deficit issue.
     It has decided to re-open the Toledo copper mine in Cebu in central Philippines with the help of new investors. This will require funding of around 75 mln usd.
     "To attract prospective investors, we have to present a balance sheet showing the company can operate as a going concern," Atlas corporate secretary and treasurer Noel del Castillo.
     In a letter to the Philippine Stock Exchange, he said that 25 pct of the Toledo mine funding will be by way of equity.
     Atlas also maintains an interest in nickel deposit in Palawan, which it plans to develop this year.
     The company is also engaged in a water dam and reservoir project in Cebu, which will also involve equity infusion, most likely through the sale of new shares, he added.
     Atlas is now in talks with financial institutions, which del Castillo did not identify, for these projects.
     Talks are "actively progressing", he said.
     He said the issuance of new shares to cover the equity requirements is supported by a recent move of the company to raise its authorized capital.
     Part of the plan to reduce or wipe out its capital deficiency is its agreement with Alakor Corp in Oct 2000 authorizing the latter to settle Atlas obligations, with Alakor to be re-paid in the form of shares of stock at par value.
     Alakor settled Atlas liabilities worth 1.69 bln pesos.
     Atlas said negotiations with other creditors are at an advanced stage, and that this, along with the issuance of shares to Alakor, is expected to reduce its deficit to only 160.0 mln pesos by the middle of this year from the current 7.06 bln.
     "The board plans to rehabilitate the company and its assets at the earliest possible time, particularly now that copper and nickel prices have recovered. In this context, the directors have high hopes that the company's balance sheet will swiftly be restored to a positive level," del Castillo said.
     (1 usd = 55.50 pesos)


Philippines expresses concern over US inaction on telecom executives

     MANILA (AFX-ASIA) - Philippine officials expressed concern today over the US government's failure to help settle a dispute stemming from a Honolulu grand jury summons of Filipino telecommunications executives.
     President Gloria Arroyo has called on government agencies to "exhaust all diplomatic and legal means" to assure that the Filipino executives are being treated fairly and would be allowed to return home as soon as possible.
     Local newspaper reports said the Filipino executives have been barred from leaving the country until after they submit to grand jury questioning.
     The foreign justice and communications ministers met the chief executives of affected telecom companies on the issue.
     "Up to now, the US government has not addressed the serious concerns we raised with them regarding this case," Foreign Secretary Delia Albert said.
     "The government finds common cause with the concerns of the Philippine telecommunications industry in this matter," Albert assured the chief executives at the meeting.
     Justice Secretary Merceditas Gutierrez said she will "get in touch immediately with my counterpart in the US Department of Justice and we will coordinate with them to find out why this investigation is being conducted."
     The 30 Filipino executives were attending a telecoms conference in Hawaii at the weekend when Federal Bureau of Investigation agents handed them summonses to appear as witnesses before a Honolulu grand jury this week.
     The inquiry apparently focuses on an accusation US firms made last year that several Filipino companies had unfairly raised rates on calls coming from the US.
     Albert said: "Our own inquiries on the decision of the US Department of Justice to initiate this grand jury investigation causes us even further concern."
     She said she was particularly dismayed over the action as the Philippine and American telecommunications firms were already in the process of "settling the matter amicably with the the assistance of both governments" when the executives were summoned.
     US embassy spokesmen could not be reached for comment.
     The surprise summons embarrassed the Filipino executives and the Philippine government, prompting President Arroyo to demand an apology over the alleged mistreatment of the executives.


Philippine Swift Foods' 39,795 shares to be delisted Jan 19 - PSE

     MANILA (AFX-ASIA) - Swift Foods Inc will see 39,795 of its preferred shares de-listed from the Philippine Stock Exchange's official registry on Jan 19 as holders redeemed them between Dec 11 and Dec 31, the PSE said.
     In a circular for brokers, the PSE said the redemption put the number of Swift Foods' outstanding preferred shares at 150.36 mln.
     Swift Foods has given holders of its convertible preferred shares until Feb 27 to exercise their put option.


Philippines may further reduce cement import duty

     MANILA (AFX-ASIA) - Trade and Industry Secretary Cesar Purisima said the government may reduce by another 5.00 pesos the safeguard duty imposed on imported cement following the rise in domestic cement prices.
     Should this proceed, the 20.60-peso "safeguard" duty on imported cement would be cut by a total of 10 pesos per 40-kilogram bag.
     "We are seriously bothered by this development as increases in the price of cement will definitely affect the completion of various programs of government in housing and other infrastructure-related projects. If the increases will continue, we'll consider adding another 5-peso reduction in the additional tariff," Purisima told reporters.
     The prevailing price of local cement in the National Capital Region stood at 125 pesos per bag, up 5 pesos from 120 in December, while cement sold in other provinces nationwide posted higher price increases.
     Former Trade Secretary Manuel Roxas II ordered the first 5-peso reduction in the 20.60-peso per bag safeguard duty on cement in December.
     "We will impose the full force of the law against retailers and suppliers found violating the provision of the Price Act," Purisima said.
     (1 usd = 55.50 pesos)


Philippine National Bank's 2.2 bln-peso notes issue under review - Moody's

     MANILA (AFX-ASIA) - Moody's Investors Service said it has assigned a Ba1 rating to Philippine National Bank's proposed 2.2 bln-peso subordinated notes issue on the condition that no material changes are to be made to the terms and conditions of the notes reviewed.
     However, Moody's said it has placed PNB's new subordinated debt rating under review for downgrade in connection with the downgrade review on the country's sovereign ratings.
     "The Ba1 rating recognizes PNB's systematic, albeit declining, importance as one of the Philippines' largest indigenous banks by assets as its strong franchise in overseas remittance and its function as the government's depositary institution," Moody's said in a statement.
     It added that "the predictability of the strong support enjoyed throughout its history may have have diminished in the past several years with the ongoing industry consolidation."
     PNB, a semi government-owned bank, is now on its third year of rehabilitation.
     Its board of directors earlier gave management the go ahead to issue up to 2.2 bln pesos worth of subordinated notes. The 2.2-bln peso tranche shall form part of the original 140 mln usd unsecured debts issue, which the central bank approved late last year.
     The proposed issue is callable with a step-up feature in 2009.
     Moody's other ratings on the bank include a foreign currency senior debt rating Ba1, a foreign currency long-term deposit rating of Ba2 and domestic currency long-term/short-term deposit ratings of Baa3/Prime-3, all under review for possible downgrade.
     It has also been assigned a foreign currency short-term deposit rating of not-prime and a bank financial strength rating of E, which both carry a stable outlook.
     (1 usd = 55.516 pesos)


Philippines' Metrobank to pay 0.40 peso cash div not later than Feb 16

     MANILA (AFX-ASIA) - Metropolitan Bank & Trust Co said it will pay stockholders a recently declared cash dividend of 0.40 peso per share not later than Feb 16.
     Entitled are those who are on record as of Jan 30.
     The central bank has approved the dividend declaration.
     (1 usd = 55.50 pesos)


Philippines' PLDT to list 4,242 common shares Jan 19 - stock exchange

     MANILA (AFX-ASIA) - Philippine Long Distance Telephone Co is to list 4, 242 common shares, taken up and fully paid for under its executive stock option plan, on Jan 19, the stock exchange said.
     In June 2000, PLDT gained the exchange's approval to list an additional 1. 289 mln common shares, with a par value of 5.00 pesos each to cover its executive stock option plan.
     PLDT closed up 10.00 pesos at 920.00 on volume of 429,980 shares.
     (1 usd = 55.49 pesos)


Philippines' Piltel expects to return to profitability in 2004

     MANILA (AFX-ASIA) - Pilipino Telephone Corp (Piltel) said it expects to return to profitability in 2004 and post a net profit of 402.4 mln pesos, after a projected net loss of 3.33 bln in 2003.
     It reported a net loss of 21.8 bln pesos for 2002.
     Piltel, partly owned by Philippine Long Distance Telephone Co (PLDT), expects its GSM subscriber base to grow to 3.68 mln at the end of this year from 2.78 mln as of end-2003.
     The company's strategic direction and financial projection, which it filed to the Philippine Stock Exchange (PSE), forecast a return to a position of positive equity by 2013.
     The PSE ordered Piltel, which had a negative equity position of 19.09 bln pesos as of end-2002, to submit a plan detailing activities it intends to undertake to turn its shareholders' equity to positive from negative.
     Piltel provides mobile phone services under the Talk N' Text brand.
     Under its action plan, the company said it will continue to target the lower market segments as the main source of revenue growth as it maintains its "differentiation strategy" in handset pricing, airtime pricing and value-added services.
     Piltel also plans to pursue its strategy of providing affordable handset models as it penetrates provincial areas, where much of the growth is expected to come from.
     A projected net profit of 402.4 mln pesos in 2004 is based on assumptions that the peso will depreciate 5 pct versus the US dollar this year and that the company will obtain no additional external financing to pay off its debts.
     Piltel expects the peso's average to drop 5 pct year-on-year to 57.15 in 2004 from 54.31 to the US dollar last year, while peso borrowing rates are seen at 9.00 pct.
     (1 usd = 55.50 pesos)


STOCK ALERT - Philippines' SM Prime firmer on technical bounce

     MANILA (AFX-ASIA) - Mall operator SM Prime Holdings was firmer in mid-trade on a technical rebound after recent losses, dealers said.
     SM Prime was up 0.30 at 6.50 on 15.5 mln shares.
     The stock's price rose to as high as 7.00 pesos on Jan 6 on expectations that increased consumer spending during the Christmas and New Year holidays boosted the company's revenues.
     Dealers said bargain-hunters are taking advantage of the market's continuing volatility.
     (1 usd = 55.50 pesos)


Philippines' PCI Leasing, Interphil Laboratories buy back shares on Jan 15

     MANILA (AFX-ASIA) - PCI Leasing and Finance Inc said it bought back from the market a total of 463,975 shares at 1.32 pesos each on Jan 15. The value of the shares was 612,447 pesos.
     Interphil Laboratories also purchased 37,000 of its A shares and 191,000 of its B shares at 1.90 each or for a total of 433,200 pesos.
     (1 usd = 55.497 pesos)


Philippines' APC Group details plan to turn negative equity to positive

     MANILA (AFX-ASIA) - Investment and management firm APC Group Inc has set a two-pronged strategy to transform its negative equity position to positive and to avoid being de-listed from the stock exchange.
     APC's business plan involves preventing unit Philcom Corp from further recurring operating losses and after that converting the advances of APC's major shareholder Belle Corp into equity.
     In a disclosure, APC said Philcom's management is in a "very advanced stage" of negotiations to turn over the operating management of its Mindanao local exchange operations to Philippine Long Distance Telephone Co (PLDT), with the discussions seen concluded within the first quarter of this year.
     PLDT will manage Philcom's facilities and connect its telecom infrastructure to PLDT's backbone in Mindanao.
     "Under the business plan being prepared jointly by PLDT and Philcom for Philcom's Mindanao operations, this company is expected to reduce or stop hemorrhaging because of improved traffic volumes which PLDT will direct to this facility and improved operating efficiencies," APC said.
     APC's shareholders are also contemplating the sale of Philcom's local exchange carrier (LEC), Philcom Corp, and are optimistic PLDT will consider the purchase seriously, particularly if the sale of Philcom's unit can be done through a debt-for-asset swap.
     "The sale of Philcom LEC will result in substantial accounting profits arising from the reversal of previously equitized losses of Philcom in the books of APC," APC said.
     Philcom's equitized losses appearing in APC's books stood at 2.959 bln pesos.
     Philcom also intends to sell its 1,200-square meter lot along Paseo de Roxas in the Makati business district, proceeds of which would be used to fully pay off its loans.
     Meanwhile, APC said its major shareholder Belle Corp - which owns 23.3 pct of APC, will consider a conversion of its advances to equity after the Philcom divestment and downsizing proves successful. Belle has 3.692 bln pesos in advances to Belle.
     "With the Philcom problem contained to manageable proportions, Belle sees APC as a viable company, concentrating on its present businesses (outsourcing) and entering new businesses," APC said.
     It expects all the Philcom deals to be concluded by 2005.
     The action plan is seen reversing APC's negative equity of 6.55 bln pesos to a positive equity of 662.3 mln pesos at the end of 2005 after the two-pronged strategy has been carried out.
     (1 usd = 55.493 pesos)


STOCK ALERT - Philippines' PLDT firmer on bargain-hunting, ADR gain

     MANILA (AFX-ASIA) - Philippine Long Distance Telephone Co (PLDT) was firmer in early trade, attracting bargain-hunters who are taking advantage of the market's volatility, dealers said.
     Buying in PLDT also followed the 0.16 usd overnight rise in its American Depositary Receipts in New York to 16.60, they added.
     PLDT was up 15 pesos at 925 on 70,730 shares.
     Yesterday, the country's dominant carrier said its wireless group's total subscriber list of about 13 mln as of end-2003 includes the 10.08 mln customers of unit Smart Communications Inc and 2.87 mln of affiliate Pilipino Telephone Corp (Piltel).
     Piltel earlier said the subscriber base of its Talk N' Text wireless brand stood at 2.54 mln at end-September, while Smart had over 9 mln subscribers at end-September.
     PLDT, which expects to announce its 2003 full-year results towards the end of February, is confident it hit, or even exceeded, its 10-bln peso net profit goal, after provisions, thanks to Smart's sustained robust performance.
     It sees net profit before provisions at around 14-15 bln pesos.
     Net profit came in at 3.1 bln pesos in 2002.
     (1 usd = 55.50 pesos)


STOCK ALERT -Philippines' Meralco B up on easing of rate rollback worries

     MANILA (AFX-ASIA) - Manila Electric Co's B shares, which are available to foreign investors, rebounded in early trade from recent sharp losses on expectations the company will be able to justify its tariff increase that has been suspended by the Supreme Court, dealers said.
     They added that the earnings outlook for Meralco in 2004 remains positive given the expected economic upturn that will require increased electricity output and translate to bigger demand.
     Meralco B was up 0.50 peso at 31 on 409,600 shares.
     Meralco A, however, was unchanged at 19.50.
     Meralco parent First Philippine Holdings also bounced back, up 0.25 at 24. 75.
     The power distributor said it will comply with a Supreme Court order to suspend the 0.12 peso per kilowatthour rate increase provisionally granted by the Energy Regulatory Commission. The rate hike took effect Jan 1.
     The company has 10 days from receipt of the court notice to justify the rate hike.
     In an interview with AFX-Asia, Meralco president Jesus Francisco said the company expects electricity sales to grow 5 pct this year on the back of the economy's much-anticipated recovery.
     This follows last year's projected year-on-year growth of at least 4 pct.
     (1 usd = 55.50 pesos)


Philippine National Bank raises 40 mln pesos via asset sale -report

     MANILA (AFX-ASIA) - Philippine National Bank raised an estimated 40 mln pesos from yesterday's auction of idle properties, the BusinessWorld newspaper reported, citing CB Richard Ellis associate director Jojo Salas.
     CB Richard Ellis is PNB's consultant for the disposal of its bad assets, which the bank expects will boost revenues.
     The report said PNB raised 135 mln pesos from the sale of idle assets last year.
     (1 usd = 55.50 pesos)


Philippines' RCBC plans to expand Europe remittance service - report

     MANILA (AFX-ASIA) - Rizal Commercial Banking Corp (RCBC) is studying the possibility of expanding its money remittance service in Europe, the BusinessWorld newspaper reported, citing bank senior vice president and head for TeleMoney Market Division Articer Quebal.
     He said RCBC is in talks with financial institutions in Germany, Austria and Ireland. The bank currently offers its service to Filipinos in the Netherlands, Italy, Spain and Switzerland.
     RCBC's remittance business is estimated to account for 11-12 pct of the overseas Filipino workers (OFW) market.


Philippines' PSi blames lack of govt support for shift to China - report

     MANILA (AFX-ASIA) - The lack of government action on industry problems prompted chip testing and packaging firm PSi Technologies to shift to China for expansion, the BusinessWorld newspaper reported, citing company chairman and chief executive officer Arthur Young.
     The Nasdaq-listed company was earlier reported to be planning to shift half of its production to the mainland.
     Young, however, said PSi will keep its two manufacturing plants in the Philippines, as well as its 3,700-strong workforce.
     PSi, which supplies assembly and test services to companies such as Infineon Technologies and Texas Instruments, reportedly signed a deal with the government of the southwestern Chinese city of Chengdu to set up a 4,000 square meter factory.
     The first phase of the project, estimated to cost 20 mln usd, is expected to be completed early next year.
     "We will continue to grow our business in the Philippines but unfortunately, the government continues to ignore our calls for improved infrastructure and lower power rates, among other things. We have to go where cost drives us, and where our customers want us to go," Young was quoted as saying.


Philippine exploration projects attract 14 foreign bidders - Energy Dep't

     MANILA (AFX-ASIA) - At least 14 foreign companies are expected to participate in the first round of bidding for the country's petroleum exploration contracts in March, the Department of Energy (DoE) announced.
     The firms have expressed interest in contracts to explore oil and gas in at least 46 sites in the country, said Energy Undersecretary Eduardo Manalac.
     Firms that are expected to participate in the first Petroleum Contracting Round (PCR) include BHP Billiton, TOTAL, Scott Oil of Norway, Norsk Hydro, Malaysia's Genting Oil, PetroVietnam, Chevron Texaco, Amerada Hess, Hunt Oil, Occidental Petroleum, Marathon Oil Corp, and Exxon Mobil, the DoE said.
     They have until March 2 to submit bids.
     The DoE will award the contracts to winning bidders in May.
     "Interest in PCR-1 was generated after its launch in Manila last August and the subsequent international promotional tour that we completed in October," Manalac told reporters.
     The country has an average recoverable petroleum resources equivalent to at least 8.9 bln barrels of oil, the DoE said. Of this volume, about 85 pct has yet to be discovered.
     The reserves include natural gas, crude oil, and condensate.
     The country's daily output currently stands at 500-600 barrels for oil, 250-260 mln cubic feet for natural gas and 25,000 barrels for condensate.


Philippines bans poultry imports from Vietnam, Japan due to bird flu

     MANILA (AFX-ASIA) - The Philippines has banned imports of poultry products from Vietnam and Japan as a precautionary measure to prevent the entry of bird flu, an agriculture official told Agence France Presse today.
     This will expand a ban on the import of poultry from South Korea imposed last month after bird flu was detected there, animal industry director Jose Molina said.
     The ban is to take effect tomorrow, but will likely have no effect on supply. The Philippines gets most of its poultry imports from the US, Canada and Australia.