Pacific military chief to visit Philippines tomorrow on
MANILA (AFX-ASIA) - The head of US military forces in the
Pacific is due to visit the Philippines tomorrow to discuss the
two allies' common fight against terrorist groups, a US embassy
Admiral Thomas Fargo will meet with Philippine Defense
Secretary Eduardo Ermita, military chief General Narciso Abaya
and other top officials during his visit on June 28, the
This will be the first meeting of a senior US defense
official since President Gloria Arroyo was proclaimed winner of
a new six-year term on Thursday, after having won a new six-year
term during the bitterly-contested May 10 elections.
Fargo's visit will "emphasize the value of the Philippines'
continued support for Operation Enduring Freedom and the war on
terrorism," the statement added.
Operating Enduring Freedom refers to the US global
anti-terror campaign launched with an attack on the Taliban and
the Al-Qaeda terror network in Afghanistan after the Sept 11,
2001 attacks in the United States.
The statement did not say what issues will be taken up
during Fargo's visit which is part of a tour of Southeast Asia
that also includes stops in Malaysia, Singapore and Thailand.
Philippines' Jollibee eyes expansion in China, Indonesia
MANILA (AFX-ASIA) - Jollibee Foods Corp is eyeing the China
and Indonesia markets and is looking to spend 1.0 bln pesos this
year for expansion both locally and overseas with some 100 new
"With 77 restaurants in China it is considered a small to
medium player in the fast food business with total sales last
year of 24 mln usd," Ysmael Baysa, vice president for corporate
finance and chief finance officer for Jollibee told Agence
"But we are confident China will be a major growth centre
for the company in the coming years."
In March Jollibee took its biggest step overseas when it
acquired an 85 pct stake in Belmont Enterprises Ventures, which
operates the Yonghe King restaurant chain in China, for 11.5 mln
He said the company would be giving priority to Asia,
particularly Indonesia and China.
"Europe is not a priority for us at the moment," he said.
"We believe there is a significant unmet consumer need in
Europe but we will focus on Asia first.
"In Indonesia we have had a team there since last year
doing feasibility work and food development and testing."
He expects the company will open one or two stores there in
But it is in China where Jollibee sees its greatest
"At the moment we are looking at opening 20 stores a year
in the first two to three years," Baysa said.
"So far this year we are on track with 13 opened to date.
Then we plan to open 50 a year in the fourth year and by year
five we hope to be looking at 100 new stores a year.
"But our main priority at the moment is to further develop
the brand, the concept, the store design and the menu."
Jollibee has three outlets in Vietnam. In India the company
is looking further ahead. "I don't envisage anything in India in
the near term," Baysa said.
At the end of last year, Jollibee Foods Corp had 970
outlets in the Philippines including 467 Jollibee chicken and
hamburger outlets. Its nearest rival McDonald's has 240.
Philippines aiming to lure Airbus maintenance ops from Singapore
MANILA (AFX-ASIA) - The Philippines is courting the
European aircraft maker Airbus to set up a regional maintenance
site for Asia at the former US air force base of Clark near
here, a Filipino official said today.
Manila will provide incentives to Airbus Industrie if it
agrees to transfer some of its Singapore maintenance operations
to the Philippines, Clark International Airport Corp President
Adelberto Yap said in a statement.
He did not discuss the offer in detail.
"Given that Airbus is launching a new wide-bodied,
double-decker aircraft in the next three years, it is looking at
sites where it could do some repair and maintenance work aside
from Singapore," Yap said.
The European aircraft maker had earlier denied newspaper
reports it is considering a maintenance hub at the former
military base at Clark.
In a statement, the company had said "Airbus officially
denies being in talks or even considering putting a maintenance
base at the Clark International Airport."
Philippine Swift Foods sees return to profit on higher sales,
MANILA (AFX-ASIA) - Poultry producer Swift Foods Inc is
targeting a net profit of 150 mln pesos this year, a reversal
from last year's loss of 534 mln, Swift president Luis Bernardo
Higher chicken prices and the continued reduction in the
company's operating expenses, coupled with export opportunities
in Japan, will enable the company to return to profit,
Swift Foods is a unit of Concepcion-owned RFM Corp.
Concepcion said Swift signed long-term poultry supply
contracts with two Japanese trading partners, Sumikim Bussan and
Nisho Iwai. Exports to Japan will eventually account for 25 pct
of the company's poultry production and revenues, he said.
The company has so far exported 20 tonnes of chicken
cut-ups for Japanese chicken barbecue dish "Yakitori."
The company will set aside 250-300 mln pesos for capital
spending to further expand its poultry processing capacity. The
spending will be funded through borrowings.
It also intends to lower operating expenses to 211 mln
pesos this year from 409 mln last year, Concepcion said.
(1 usd = 56.005 pesos)
Toledo copper enters option to buy Atlas' 40 pct stake in Toledo
LONDON (AFX) - Toledo Copper Corp PLC (TCC) said it agreed
to acquire the option to buy a 40 pct stake in the Toledo copper
assets owned by Atlas Consolidated Mining & Development Corp.
TCC said it will make payments and loans of as much as 28
mln usd to help develop the copper mine.
On June 22, the BusinessWorld newspaper reported, quoting a
company source, that Atlas may reopen its Toledo copper mine in
Cebu province in two years after securing 28 mln usd in funds
from a UK company.
The mine has been closed for 10 years.
Atlas is quoted on the Philippines Stock Exchange.
Philippines' Banco De Oro eyes debt, share issue to fund
Equitable Bank buy
MANILA (AFX-ASIA) - Banco De Oro Universal Bank plans to
tap the debt market and issue new shares to finance the 8.3-bln
peso acquisition of a substantial stake in Equitable PCI Bank,
the bank's president Nestor Tan said.
Banco De Oro is looking at acquiring a 29 pct stake held by
state-run pension fund Social Security System in Equitable PCI.
"We need to raise money for the purchase of that stake.
We're looking at a combination of debt and rights issue," Tan
told reporters before the company's annual meeting.
Tan reiterated that the Sy-controlled bank is poised to
grow its net profit by 20 pct to 1.8 bln pesos this year.
"We expect some growth in second half of the year. In the
second quarter, people adopted a wait-and-see attitude because
of the election. We expected stronger growth in the second. The
third quarter will be critical," Tan said.
(1 usd = 56.005 pesos)
Manila shares close higher on Arroyo win, window-dressing
MANILA (AFX-ASIA) - Share prices closed slightly higher as
positive sentiment prevailed a day after incumbent Gloria Arroyo
was proclaimed winner of last month's presidential race, dealers
Fund managers were also seen beefing up their portfolios,
The 30-company composite index closed up 5.74 points or
0.36 pct at 1,579. 51 on 1.49 bln shares worth 486.89 mln pesos.
The index moved between 1,572. 76 and 1,580.93.
The broader market's breadth was however negative as losers
outnumbered gainers 32 to 26, while 44 stocks ended unchanged.
There was some profit-taking in second and third-line stocks.
Top-traded Philippine Long Distance Telephone Co gained 15
pesos to 1,140 on 144,310 shares in line with the overnight rise
of its American Depositary Receipts in New York.
Dealers expect investors' interest in selected blue chips
to continue next week on follow-through window-dressing
activities and as investors test the main index's ascent past
the 1,600 level ahead of Arroyo's inauguration on June 30.
However, caution prior to the US Federal Reserve's
policy-setting meeting and fears of mass protests against Arroyo
may limit gains, they added.
Eagle Equities Inc President Joey Roxas said the market is
consolidating after sharp gains in previous sessions. He still
expects further upside until June 30 on first-half
"What people are worried about are possible anti-Arroyo
protests. But other than that, we expect window-dressing to
continue. Concerns of a US interest rate increase and Iraq's
handover have been factored in," Roxas said.
"By early next week, we could perhaps see a confirmation of
whether the market is headed for further upside. Should the main
index break the 1,580-1, 590 level, then we could see possibly a
gain of 100 points for the market in short to medium term,"
Regina Capital Development analyst Gomer Tan said.
Banco De Oro Universal Bank was up 0.25 at 18 on 2.47 mln
shares. The bank is due to hold its annual meeting this
Jollibee Foods was up 0.50 at 25 on 1.34 mln shares.
Bank of the Philippine Islands shed 0.50 to 42.50.
ABS-CBN Holdings was up 0.75 at 22.25.
Meralco B, available to foreigners, gained 0.50 to 30.
Meralco A, restricted to locals, was unchanged at 18.75.
The all-shares index was down 1.70 points at 1,006.24.
The commercial-industrial index was up 11.29 at 2,460.49.
Property was up 4.43 at 539.63, while mining shed 14.02 to
Mining was up 14.02 at 1,572.75.
Oil shed 0.25 to 1.90, while banking and finance retreated
2.38 to 472.50.
(1 usd = 56.01 pesos)
STOCK ALERT - Philippines' Jollibee firmer on robust earnings
MANILA (AFX-ASIA) - Jollibee Foods Corp was firmer in early
trade on the back of an expected 25 pct growth in net profit
this year, dealers said.
Jollibee was top-traded, up 1.00 peso at 25.50 on 259,300
Its president and chief executive officer Tony Tan Caktiong
said the fast food chain's 2004 net profit could reach analysts'
projection of at least 1. 57 bln due to the company's strong
first quarter performance.
Its 2003 net profit stood at 1.25 bln pesos.
(1 usd = 55.99 pesos)
Philippines' Victorias Milling sells 94.8 mln pesos worth of
MANILA (AFX-ASIA) - Sugar producer Victorias Milling Corp
said it has sold 94.8 mln pesos worth of assets since Aug 2002.
Assets sold include farm tractors, cargo trucks, floating
vessels and other machinery, it added.
Victorias, which also cans sardines and meat products,
earlier said it planned to sell 180 mln pesos worth of non-core
assets to help in its financial recovery.
(1 usd = 56.035 pesos)
Airbus denies plan to set up maintenance hub in Philippines' air
MANILA (AFX-ASIA) - European aircraft maker Airbus has
denied newspaper reports that it is considering a maintenance
hub in the former US military base in Clark, Pampanga.
In a statement, the company said "Airbus officially denies
being in talks or even considering putting a maintenance base at
the Clark International Airport."
Major dailies, quoting Clark International Airport
president Adelberto Yap, reported that Airbus was "seriously
considering Clark as an alternative maintenance hub." He however
said discussions were very preliminary and exploratory at this
The former US military air base sits on a 2,750-hectare
complex with a two-parallel, 3.2-kilometer runway that can
already accommodate large aircraft.
It has a passenger terminal building that can serve 500
passengers an hour or 1.5 mln passengers a year.
Philippine wage board approves 20 peso daily wage increase in
MANILA (AFX-ASIA) - The National Capital Region wage board
has approved a 20 peso increase in the daily salary of workers
in metropolitan Manila effective July 10, Acting Labor Secretary
Manuel Imson said.
The increase brought the daily minimum wage in the
metropolis to 300 pesos from the current 280.
It will be reflected only in the workers' emergency cost of
living allowance (ECOLA), and as such will not be included in
the computations for overtime pay, 13th month pay, bonuses and
other benefits such as retirement, or separation pay and leave
"Acting upon the petitions filed by organized labor, the
board found a need to provide for an increase in the daily ECOLA
to alleviate the plight of the workers and employees in the
private sector without impairing the viability and
competitiveness of business and industry," Imson said.
Labor groups had asked for an increase of between 65-125
pesos, records showed.
The last time the ECOLA was increased in metropolitan
Manila was in Nov 2001 when an additional 30 pesos was given to
minimum wage earners.
Imson said the wage board took into account the recent
increase in transport fares and higher inflation in the wage
hike order, which came hours after incumbent Gloria Arroyo's
proclamation as winner of the May 10 presidential election.
(1 usd = 56.035 pesos)
Philippine Salcon Power may pay 2.6 mln usd penalty for plant
MANILA (AFX-ASIA) - Salcon Power Corp said it may pay an
estimated 2.6 mln usd in penalties for the shutdown of one of
its thermal power plants in Cebu province due to a crack at the
thrust collar of the plant's turbine rotor.
"If the said penalty is finally determined to be imposable,
the estimated amount of penalty, based on an August 15 return to
operation is 2.6 mln usd," Salcon told the stock exchange.
The power producer tapped US-based serviced company
TurboCare Inc for the repair after the crack was found.
Total repair cost is placed at 841,000 usd.
Salcon said it is expected to exceed the annual outage
allowance under the contract it has signed with state-run
National Power Corp.
"The replacement shaft arrived on June 19 and repair is
scheduled to be completed by mid-July 2004," Salcon said.
The projected amount of penalty is equivalent to 11 pct of
the company's annual revenue for the period ending July 2003.
(1 usd = 56.035 pesos)
Philippines end-March foreign debt 56.7 bln usd, up 2.1 pct
MANILA (AFX-ASIA) - The national government's total
outstanding foreign debt stood at 56.7 bln usd at end-March, 2.1
pct higher than a year earlier, the central bank said.
Compared to the end-2003 level, the country's foreign debt
dropped 700 mln usd or 1.2 pct in the first quarter, it said.
"While net inflows of more than 1.3 bln usd from external
debt transactions were realized during the first quarter, the
debt stock declined due to the availability of more data on
residents' holdings of Philippine debt papers, which increased
by more than 2 bln to 9.076 bln usd," central bank governor
Rafael Buenaventura said.
(1 usd = 56.07 pesos)
Philippines to export 2.75 bln usd worth of auto parts by 2007
MANILA (AFX-ASIA) - The Philippines plans to export 2.75
bln usd worth of auto parts by 2007, the Department of Trade and
The country also aims to expand production and sales of
completely-built-up units (CBUs) to 200,000-250,000 by 2007 in a
bid to make the Philippines as ASEAN's auto parts manufacturing
hub, the department said.
"The market prospects for Asia's motor vehicles are
positive and we expect to double our 2003 export of auto parts
of 1.35 bln usd to 2.7 bln by 2007," Trade and Industry
Secretary Cesar Purisima said in a statement.
"We aim to capture a big portion of Asia's motor vehicle
market by strengthening the supplier base of our automotive
Investors in the automotive industry and the government
drafted a plan to enhance the country's automotive supplier base
for exports to ensure the industry's steady growth in the next
There are 256 auto parts makers in the country, fewer
compared to Thailand's 1,700 firms and Malaysia's 350. The
Philippines' export base is also limited to such products as
auto wiring harness, auto transmission and alloy wheels, the
trade department said.
Over 90 pct of these auto part firms are small and medium
The auto part sector's roadmap covers four major areas.
These include strengthening the country's auto policy
environment, implementing productivity and competitive programs,
addressing industry value chain gaps and establishing an auto
technology excellence center.
(1 usd = 56.07 pesos)
Philippine San Miguel Jan-May net profit up 32 pct yr-on-yr on
MANILA (AFX-ASIA) - Food and beverage conglomerate San
Miguel Corp reported a January-May net profit of 3.29 bln pesos,
up 32 pct year-on-year, on the back of higher sales and lower
In a statement, San Miguel said its five-month consolidated
operating income rose 39 pct year-on-year to 6.65 bln pesos due
to combined higher volume sales of beer and the control of fixed
costs of the Coca-Cola Beverage Group.
Significant bottom-line improvement of the food group
business also boosted the conglomerate's performance, it added.
Consolidated sales revenue was up 15 pct year-on-year at 68
In the five months to May, operating income of its domestic
beer business rose 27 pct year-on-year to 3.53 bln pesos. Total
revenue rose 24 pct to 15.7 bln, while volume growth was up 20
pct from last year.
International beer sales rose 19 pct in volume, while sales
reached 99.5 mln usd.
(1 usd = 56.07 pesos)
FOCUS - Philippine markets cheer Congress' proclamation of
---- by Cecille Yap ----
MANILA (AFX-ASIA) - Philippine shares held onto yesterday's
strong gains and the peso recovered lost ground after Congress
today proclaimed President Gloria Arroyo winner of the May 10
Economists and analysts said the proclamation is expected
to ease the political tension and uncertainty the country has
endured since the start of the election season.
Arroyo's victory has also given the US-trained economist a
clear six-year mandate to continue with her key reform programs,
suggesting stability in the priorities and policies of the
government, they said.
The 30-company composite index today held onto the strong
gains posted yesterday, as it closed marginally up at 1,573.77
-- a new seven-week high -- on 734.9 mln shares worth 489.4 mln
The equities market held the victory party yesterday, when
the benchmark index rose by 30.65 points or 1.99 pct at 1,573.47
on 721.2 mln shares worth 666.6 mln pesos, ahead of the formal
declaration by Congress.
The peso also rose today, averaging 56.079 to the US dollar
at the end of the morning trade from yesterday's close of
56.225. It fell to a record low close of 56.43 Friday last week
as the tally of votes from the May 10 polls dragged on.
"Investors welcome President Arroyo's proclamation not only
because she was the market's favored candidate, but largely
because it removes a major uncertainty," AB Capital Securities
research director Jose Vistan Jr said.
Arroyo beat her main rival, movie star Fernando Poe, by
over a million votes. Poe's camp has accused Arroyo of massive
cheating, although it is silent on whether formal complaints
will be filed with the Supreme Court electoral tribunal.
The full six-year term awaiting Arroyo, whose inauguration
is set for June 30, should be devoted addressing the country's
deteriorating fiscal performance, economists said.
"She could use her mandate to take measures to improve the
public finances. Details of the May budget deficit are not
comforting. Not only was spending excessive, the Bureau of
Internal Revenue continued to underperform, " ING Financial
Worries on the budget has made Philippine debt paper
unattractive in the international market, it added.
The government recorded a budget deficit of 12.7 bln pesos
in May, pushing the cumulative deficit for the first five months
to 77.4 bln, or only about 2 bln below the first-half ceiling of
Economic managers said election-related spending and lower
collection on the part of the BIR, which accounts for over 80
pct of revenues, pushed the deficit higher.
"If she can rise above charges that she lacks a mandate
because of her narrow victory in an unfair election, (Arroyo) is
in a position to drive the legislative agenda," ING added.
Economic managers have lined up several proposals to
enhance revenue, including a controversial plan to tax text, or
the short-messaging system offered by mobile phone companies.
Lawmakers have however opposed the proposal due to fears of
Tom Byrne, vice-president and senior credit officer of
Moody's Investors Service, said trimming the budget deficit and
reforming the power sector are key for the Philippines to
prevent a further downgrade in sovereign ratings.
"Arroyo will need to demonstrate administrative
effectiveness to prevent a further downgrade," said Byrne in a
briefing on Asian sovereign ratings outlook.
Its success in these measures, on the other hand, could
earn the country a rating with a positive outlook, Moody's said.
Early this year, Moody's lowered the Philippines' sovereign
foreign and local currency ratings to "Ba2" due to fiscal
problems and political uncertainties. The outlooks for the
ratings and ceilings remain negative.
Moody's Byrne said privatizing state-run National Power
Corp (Napocor), the country's main producer of electricity, has
been a major challenge for the Arroyo administration especially
amid a looming power crisis in about two to three years time.
The bankrupt firm has also been a major drag on
government's finances since government borrows in its behalf.
Early this month, the Arroyo administration announced a
plan to absorb as much as 500 bln pesos in Napocor's debts to
pave the way for the power firm's privatization.
Economists warn that the amount, which is more than double
the 200-bln peso limit set by law, is seen worsening the
government's deficit woes.
"The government had set an ambitious timetable for itself
in the past as far as the power sector reform was concerned, but
not much progress had been made. I believe this will still be
among the major challenges of the Arroyo administration today,"