CNN Interview with Mr. Lance Gokongwei, Pres/COO of JG Summit
GDP grew by 5.9% in the 2nd quarter and 6.1% in the 1st half of 2012.
ROBINSONS LAND
- Robinsons Land Upbeat on Newly Opened Magnolia Mall | Aug 19, 2012
- Robinsons Land Net Income up 10% | Aug 16, 2012
- Gokongwei in Talks to Join Okada for Vegas style, $2-B Casino by Bay | Jul 13, 2012
- Solenn Now Endorser of Robinsons Land Corp. | May 27, 2012
- Robinsons Land Earns P2.24B in End-March | May 22, 2012
- JG Summit Earnings Surge by 77% in the First Quarter | May 15, 2012
- JG Summit Reports P21.2B in 2011 Profits | Mar 14, 2012
- Robinsons Land Bags AsiaMoney Award | Mar 02, 2012
- Robinsons Land Profit at P4B | Jan 16, 2012
- Robinsons Land Retains High Rating | Jan 09, 2012
PHILIPPINE ECONOMY
- Aquino's 2 Nation Journey Nets $2B in New Investments | June 9, 2012
- Moody's Unit Ups Phil. Growth Forecast | June 7, 2012
- Philippines Climbs 20 Notches Up in Business Destination Ranking | June 5, 2012
- Economy Grows Faster Than Expected at 6.4% in First Quarter | May 31, 2012
- Moody's Assigns 'Positive Outlook' on PH Credit Rating | May 29, 2012
- Philippines Could Become a 'Breakout Nation' | May 28, 2012
- Aquino Sees Economic Takeoff as Stocks Hit New Record High | Mar 3, 2012
- Philippines on Track for Investment Grade Rating | Jan 19, 2012
- Philippines May Become Key Global Growth Driver | Jan 16, 2012
- Philippines Upgraded in International Property Investors' Report Card | Jan 13, 2012
- American Retirees, The Next Big Business for Philippines | Jan 12, 2012
- BSP Sees Inflation Dipping Below 4% in 2012 | Jan 11, 2012
- Philippine Credit Rating on Track for Upgrade | Jan 4, 2012
- Philippines Raises $1.5B from 25-Year Global Bond Issue | Jan 5, 2012
- PSEi Seen Rising By 13.6% | Dec 31, 2011
- BSP Shrugs Off PH Property Price Bubble Concerns | Dec 26, 2011
ROBINSONS LAND UPBEAT ON NEWLY OPENED MAGNOLIA MALL
Doris C. Dumlao | Philippine Daily Inquirer | August 19, 2012
MANILA, Philippines—Property developer Robinsons Land Corp. sees its newly opened Robinsons Magnolia shopping complex along Aurora Boulevard turning into its fourth-biggest cash cow among the firm’s 32 shopping malls in the country.
The four-level Robinsons Magnolia, which opened last week, forms part of RLC’s four-tower Magnolia Residences development in the area where the Magnolia Ice Cream House once stood.
In the first nine months of the company’s fiscal year, the shopping mall segment was the biggest revenue contributor to RLC with a share of 49 percent, or P5.2 billion, followed by residential development (P3.31 billion) with 31 percent, and office and hotel portfolios, contributing 10 percent (about P1 billion) each.
Arlene Magtibay, RLC general manager for commercial centers division, said Robinsons Magnolia was 96 percent leased out when it opened last week. She said it was expected to be 100 percent leased out by next month.
“Operational is around 60 percent, with the other tenants expected to open within the next three months in time for the Christmas season,” Magtibay said.
“We do expect Magnolia to be our fourth-biggest revenue contributor,” she said.
The top three biggest revenue contributors among RLC’s shopping malls are Robinsons Manila, Robinsons Galleria and Robinsons Metro East.
The new shopping complex is RLC’s third mall in Quezon City and the eighth in Metro Manila. It has a gross floor area of 108,000 square meters, of which 42,000 sqm are leasable.
“We promise to bring a brand-new shopping experience in Robinsons Magnolia, which will house several top brands and retailers and restaurant and food formats,” Magtibay said.
Robinsons Magnolia has one of the fanciest food courts in the metropolis with its island-like setting. It also features landscaped gardens at the back of the mall fronting the Magnolia Residences, which will have al fresco restaurants. She said it would be in this area where the Magnolia Ice Cream House would be “reincarnated.”
The shopping mall is anchored by Robinsons Department Store, Robinsons Supermarket, True Value and Robinsons Appliances. It has four cinemas (including a 3 D Cinema), a food court and parking capacity for more than 1,000 cars.
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ROBINSONS LAND NET INCOME UP 10%
Doris C. Dumlao | Philippine Daily Inquirer | August 16, 2012
Gokongwei-led property developer Robinsons Land Corp. grew its net profit in the first nine months of its fiscal year ending June by 10 percent to P3.35 billion.
The growth was attributed to the increase in the earnings of its shopping mall, residential development, hotel and office leasing businesses.
RLC’s biggest revenue contributor was the shopping mall segment with a share of 49 percent (P5.2 billion). Residential development followed with 31 percent (P3.31 billion), while the office and hotel portfolios each contributed 10 percent (about P1 billion).
All business segments posted growth in revenues for the nine-month period led by shopping malls and hotel businesses, which expanded revenues by 12 percent each. Revenues from residential development and office leasing grew by 6 percent and 8 percent, respectively.
Given the results of its respective business segments, combined real estate and hotel revenues were up by 10 percent year on year to P9.97 billion.
Interest income increased by 13 percent due to higher level of money market placements.
On the expenditure side, real estate cost went up by 11 percent due to higher level of repairs and maintenance for various malls and higher film rentals. Hotel expenses went up by 10 percent due to increases in the cost repairs and maintenance and utilities.
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GOKONGWEI IN TALKS TO JOIN OKADA FOR VEGAS STYLE, $2-B CASINO BY BAY
Gil C. Cabacungan | Philippine Daily Inquirer | July 13th, 2012
The gaming and entertainment mecca rising on a reclaimed area south of Manila is the latest playground of the country’s billionaires.
Taipan John Gokongwei Jr. is reportedly in talks to join the Las Vegas-style project of Japanese billionaire Kazuo Okada, one of the four groups granted a license to operate a casino in the $5-billion recreation project.
Sources in the stock market said Gokongwei’s property arm, Robinson Land Corp., has offered to run the gaming and retail operations of Okada’s Tiger Resorts project, worth $2 billion, in Entertainment City, a 100-hectare property on the edge of Manila Bay.
Tiger has rights to develop 45 hectares, the biggest among the four licensees, in Entertainment City.
An official of the Gokongwei group, who requested not to be named because he was not authorized to speak for the conglomerate, said the group was considering the project.
To beat Wynn Resorts
The sources said the Gokongwei group beat several local businesses, notably the Lopez group, that vied to be a partner of Okada. The Lopezes own media giant ABS-CBN Broadcasting Corp. and property developer Rockwell Land.
Okada, also known as the pachinko king of Japan, broke ground on his casino in Entertainment City on January 26, promising more than 2,000 guest rooms in three hotels, with the planned opening in the first half of 2014.
The groundbreaking came a few weeks before his American partner in Macau and Las Vegas casinos, Steve Wynn, accused him of making improper cash payments and gifts to Philippine gaming regulators.
Okada denied making improper payments.
Wynn sees Okada’s project in Entertainment City as a threat to his casino in Macau.
On his visit to Manila in May, Okada predicted that the center of gravity of the global gaming industry would shift from Las Vegas to Asia, with the Philippines playing a significant part in attracting patrons from around the world.
“My dream is to create the best casino in the world here in the Philippines,” he said. “This is why I’m focusing on Philippine gaming—to make it the best in the world and to beat Wynn Resorts.”
Andrew Tan again
Gokongwei, who owns a shopping mall chain, hotel resorts and the country’s biggest budget airline, Cebu Pacific, would be joined in the project by another Filipino billionaire, Andrew Tan, whose property group would handle the land development side of Okada’s casino project.
Tan, through his listed investment holding firm Alliance Global Group Inc., is also involved in another Entertainment City project, the $1.1-billion, 31-hectare Resorts World Bayshore project of Travellers International Hotel Group, his partnership with Genting Hong Kong Ltd.
Travellers International runs the wildly successful Resorts World, beside Terminal 3 of Ninoy Aquino International Airport in Pasay City.
Gokongwei’s foray into casinos is the latest in a string of billion-dollar transactions involving investors in Entertainment City.
Gokongwei is listed at No. 4 on the Forbes’ list of richest Filipinos with an estimated net worth of $3.2 billion. He was behind Sy (No. 1 with $9.1 billion) and Razon (No. 3 with $3.6 billion), and ahead of Tan (No. 6 with $2.3 billion).
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AQUINO'S 2 NATION JOURNEY NETS $2B IN NEW INVESTMENTS
Daxim L. Lucas | Philippine Daily Inquirer | June 9, 2012
WASHINGTON—President Benigno Aquino III’s weeklong trip to the United Kingdom and the United States has secured for the Philippines at least $2 billion worth of fresh investments from foreign businessmen eager to participate in the country’s growth story.
In a briefing on Thursday evening (Friday morning, Philippine time), a Palace official said Mr. Aquino secured the commitment of power generation firm GN Power Ltd. for a $1-billion investment in two coal-fired power plants in Bataan province.
“The plants should be operational by 2015,” Presidential Communications Secretary Ricky Carandang told reporters, explaining that it takes three years to complete a power plant, on the average.
Mr. Aquino also secured the commitment of US-based research and development firm Underwriters Laboratories to put up a global research center in Metro Manila.
Carandang said the investment for this project was small in dollar terms but would hopefully result in “some kind of knowledge transfer to local workers.”
On top of this, another $1.03 billion worth of investments was sealed in the United Kingdom, he said.
Mr. Aquino will meet with officials of Citigroup on Friday morning (late Friday night, Manila time) and additional initiatives may come out of the discussions, including support from the US financial giant for the government to develop a mobile phone-based payment system, according to sources familiar with the issue.
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MOODY'S UNIT UPS PHIL. GROWTH FORECAST
Lawrence Agcaoili | The Philippine Star | June 07, 2012
MANILA, Philippines - Moody’s Analytics Inc., a unit of New York-based Moody’s Corp., upgraded its gross domestic product (GDP) growth forecast for the Philippines to 4.7 percent instead of four percent this year after a stronger-than-expected economic expansion in the first quarter of the year.
In a study entitled “Philippines Outlook: Braving Global Headwinds,” Moody’s Analytics economist Katrina Ell said the upgrade could be attributed to the reforms being undertaken by the Aquino government that continue to attract foreign investment and boost growth prospects.
The National Statistical Coordination Board (NSCB) reported late last month that the country’s GDP growth zoomed to 6.4 percent in the first quarter of the year from the revised four percent in the fourth quarter of last year amid the robust domestic demand, higher government spending, and recovering exports.
“The Philippines kicked off 2012 at a blistering pace. In the first quarter, the economy grew 6.4 percent year-on-year, the strongest GDP growth in Southeast Asia and the second strongest in Asia behind China,” Ell stressed.
The GDP growth of the Philippines was faster that Indonesia’s 6.3 percent, Vietnam’s four percent, Singapore’s 1.6 percent, and Thailand’s 0.3 percent but slower than China’s 8.1-percent expansion in the first quarter of the year.
The growth in the first quarter was higher than the expansion of 5.2 percent projected by the Aquino government and the full-year target of five percent to six percent set by the Cabinet-level Development Budget Coordination Committee (DBCC).
“We are more bearish than the government, which targets growth of five percent to six percent, as we are skeptical that the economy will maintain its blistering first quarter growth pace,” Ell explained.
According to her, the ongoing global headwinds would continue to weigh on the GDP growth from the second quarter onward and that the Philippines economy needs both exports and remittances to be growing solidly to lift GDP growth above five percent.
She pointed out that global headwinds would continue to drag on growth but recovering exports and robust remittances from overseas Filipino workers (OFWs) would help fuel economic growth.
“But global headwinds continue to threaten the Philippines economy given its large reliance on exports and remittances from Filipinos working abroad,” she said.
Ell explained that the 5.4 percent growth in OFW remittances from January to March boost household consumption while exports improved a little amid weak global demand.
Likewise, she added that the government has stepped up spending and is expected to grow in the run up to the general elections in May 2013.
On the other hand, Moody’s Analytics said infrastructure spending is expected to increase further as the Aquino government aims to make extensive use of public_private partnerships (PPP) program.
Moody’s Analytics also cited the government’s anti_corruption push as well as the tightening regulations to avoid tax avoidance coupled with the plan to raise the excise tax on alcohol and tobacco products to help lift revenue collections.
“These twin policy arms, lifting infrastructure and reducing corruption, should also help to shore up both domestic and foreign direct investment, lifting the economy’s long_term growth prospects,” she added.
The Philippines has so far received six upgrades from international credit rating agencies in the first half of his six-year term that would end in June of 2016.
London-based Fitch Ratings rate the country’s sovereign debt at one notch below investment grade on a stable outlook while New York-based Moody’s Investors Service as well as Standard and Poor’s rate the country’s sovereign debt at two notches below investment grade on a positive outlook.
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PHILIPPINES CLIMBS 20 NOTCHES UP IN BUSINESS DESTINATION RANKING
Amy R. Remo | Philippine Daily Inquirer | June 5, 2012
MANILA, Philippines—The Philippines has improved its standing as a business destination, particularly in terms of market access, ranking 72nd out of 132 countries on the World Economic Forum’s enabling trade index.
According to “The Global Enabling Trade Report 2012,” the Philippines climbed by 20 notches up the index from the previous 92nd spot in 2010, reflecting what was perceived as a reduction in trade barriers.
The Global Enabling Trade Report 2012 measures the factors, policies and services that facilitate the trade in goods across the borders of 132 countries. It includes the areas of market access, border administration, transport and communications infrastructure, and business environment. Each area consists of pillars and indicators that assess the different aspects of a country’s trade environment.
The Philippines, in particular, showed a remarkable improvement in the area of market access, where it jumped 50 notches to No. 14 from being No. 64 in 2010.
The market access sub-index measures the extent to which the policy framework of the country welcomes foreign goods into the country and enables access to foreign markets for its exporters, according to the report.
In terms of efficiency of import-export procedures, the country took the No. 48 spot, also an improvement from the No. 55 position posted in 2010.
The Philippines, however, fell six places to No. 62 out of the 132 countries, in terms of efficiency of customs administration, from its previous record of No. 56 in 2010. Based on the trade report, among the most problematic factors for trade in the Philippines included access to imported inputs at competitive prices; identifying potential markets and buyers; and corruption at the border, among other concerns.
The country continues to lag in terms of transparency of border administration, ranking a dismal 117th out of the 132 countries. This was, however, an improvement compared with the 119th position of the Philippines back in 2010. This particular pillar was measured in terms of irregular payments in exports and imports and Corruption Perceptions Index.
Meanwhile, Trade Secretary Gregory L. Domingo, in a statement issued on Tuesday, assured the public that the government would continue its efforts to reduce trade barriers and further improve the business environment in the Philippines.
“It’s been a long time coming, we’re happy with the results, it shows that all our efforts this past two years are starting to pay off,” Domingo said in response to the results of the 2012 Global Enabling Trade Report.
The trade chief attributed the country’s improvement in rankings to the Department of Trade and Industry’s efforts to facilitate trade across borders such as the Doing Business in Free Trade Areas (DBFTA), an awareness campaign that has aimed to help various stakeholders understand the emerging and new markets, as well as instruments such as free trade agreements (FTAs).
More DBFTA sessions will be held in key cities in the country this year, and each session will include presentations on market opportunities, including non-tariff measures, country’s FTA markets, tariff rates of top exports for sectors under the FTAs, rules of origin, an open forum, as well as business testimonials.
Help desks would also be made available after each session to provide assistance to interested exporters and importers, he said.
Other initiatives are already in place to bring down trade barriers, according to Domingo, who cited the Asean Single Window (ASW)—a component of the progressive schemes on customs development shared by the 10-member Asean bloc. It is tasked with the formulation and implementation of rules and procedures for trade facilitation.
Recently, the Philippines was chosen to chair the Asean Single Window Steering Committee to supervise ASW’s upcoming projects and activities. The DTI is also pursuing reforms to improve the ease of doing business in the country through the Philippine Business Registry (PBR) and the Business Permits and License Streamlining (BPLS) program for the local governments.
The Philippine Business Registry was launched last January to speed up the business registration process in a matter of hours as against the weeklong wait under the previous system.
The streamlining of business permits and licensing systems, on the other hand, is a joint project of DTI and the Department of Interior and Local Government (DILG), which targets to reduce the number of days, steps, documents and signatures required to get a permit from the local government units.
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ECONOMY GROWS FASTER THAN EXPECTED AT 6.4% IN FIRST QUARTER
Cheryl M. Arcibal, The Philippine Star, May 31, 2012
MANILA, Philippines - Stable consumer prices and improvement in the manufacturing sector and services boosted the Philippine economy to grow faster than expected in the year's first three months, the government said Thursday.
"After four quarters of lackluster performance, the Philippine economy is off to a rousing start in the year of the water dragon as GDP (gross domestic product) grew by 6.4 percent in the first quarter of 2012 compared to an upwardly revised growth of 4.9 percent last year," the National Statistical Coordination Board said in a statement.
The government is seeking to boost the country's economy between five and six percent this year.
Meanwhile, owing to strong remittances from overseas Filipinos, the country's gross national product rose 5.8 percent from 3.5 percent in 2011.
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MOODY'S ASSIGNS 'POSITIVE OUTLOOK' ON PH CREDIT RATING
Michelle V. Remo | Philippine Daily Inquirer | May 29, 2012
MANILA, Philippines—The Philippines got another boost in its credit-worthiness with Moody’s Investors Service revising its outlook on the country’s rating from “stable” to “positive,” indicating likelihood of a ratings upgrade within the short term.
In a statement on Tuesday, Moody’s cited the Philippine government’s declining debt burden, improving revenue collection, and comfortable level of foreign-currency liquidity in its decision.
The “positive” outlook is assigned to the country’s existing Ba2 rating, which is two notches below investment grade. Said outlook normally is followed by an actual upgrade in the credit rating should existing macroeconomic trends are sustained.
“The government of the Philippines has continued to demonstrate prudence in its fiscal management, as characterized by low budget deficits relative to its rating peers and a steadily declining level of debt relative to GDP (gross domestic product),” Moody’s said.
“Such outcomes are the result of expenditure restraint and improved revenue performance,” it added.
Moody’s said favorable macro-economic indicators would help increase investments, which would accelerate the overall growth of the economy. From over 80 percent of GDP in the early 2000s, the government’s debt now is equivalent to just about 55 of GDP.
Last year, the government posted a budget deficit of nearly P198 billion. This was equivalent to 2 percent of the country’s GDP, better than the 3.2-percent targeted ceiling.
Moreover, the country’s gross international reserves reached $76.5 billion as of end-March, which was equivalent to over 11 months’ worth of the country’s imports.
“This positive rating action is welcome and is a sign that Moody’s is seeing the fruits of good governance on all fronts— fiscal, monetary, and external (liquidity),” Governor Amando Tetangco Jr. of the Bangko Sentral ng Pilipinas said.
Tetangco is one of the government officials pitching for an investment grade for the Philippines. Economic officials are saying the country’s macro-economic fundamentals are comparable to those that already enjoy investment grade.
They said an investment grade for the Philippines has long been overdue, citing how the international capital market has been pricing the country’s bonds. They said Philippine sovereign bonds have been fetching yields that have been as low as the yields carried by bonds issued by countries with investment grade.
Moody’s and other credit-rating agencies, however, said further improvements in the Philippine government’s fiscal standing and the country’s economic performance should be realized for it to deserve an investment grade.
Standard & Poor’s assigns the Philippines a credit rating that is two notches below investment grade and a “positive” outlook. Fitch assigns a rating that is just a notch below investment grade and a “stable” outlook, which indicates the likelihood that the rating will remain the same at least within the short term.
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PHILIPPINES COULD BECOME A 'BREAKOUT NATION'
Judy T. Gulane | Business World | May 28, 2012
IN A NEW economic era of crises and risk-averse investors, not all emerging markets will succeed in sustaining the high economic growth notched in the past decade, a Morgan Stanley executive said.
Only a few will turn out to be "breakout nations," distinguished by their ability to beat widely held growth expectations for their income class, said Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley and author of Breakout Nations: In Pursuit of the Next Economic Miracles published recently.
The Philippines is "among the countries expected to do better than expectations," said Mr. Sharma, speaking by phone from Singapore yesterday, as long as the country focuses on reforms.
To qualify as a "breakout nation," the Philippines has to rise above its 5% growth potential and achieve a higher economic growth average in the next three to five years -- and over a decade.
Mr. Sharma explained that emerging market economies cannot be expected to post the high growth rates seen in a decade ago because the "easy money" that came in the wake of central bank rate cuts, and which drove growth higher, had dried up.
The prior decade was also marked by these emerging markets’ playing catch-up with the bigger economies after they were racked by crises in the 1980s to 1990s.
"The last decade is not likely to be replicated," Mr. Sharma said. "Not everyone will be able to grow rapidly and the challenge is to identify which countries can do better than the rest."
While interest rates in the United States and Europe are at historical lows at present, money is not going rapidly to emerging market economies because of risk aversion.
Banks there are also either "keeping money at home or bringing money back home" to repair balance sheets or comply with capitalization requirements. The situation is compounded by the ongoing euro zone debt crisis.
Indeed, net foreign portfolio investments to the Philippines fell 11% to $4.08 billion in 2011 versus the previous year while data as of May 11 showed "hot money" at a little over $1 billion, roughly half the previous year’s level. Foreign direct investments was at a minuscule $1.1 billion in 2010.
Emerging market economies will have to compete for the slow-flowing foreign capital and those that succeed are those that are able to demonstrate high growth vis-a-vis peers.
In the case of the Philippines, its peers include other lower-middle-income countries such as Indonesia, India, Nigeria, Pakistan and Sri Lanka. Lower-income-countries, based on the World Bank grouping, are those with $1,006 to $3,975 in per capita income.
The Philippines’ other neighbors, Malaysia, Thailand and China belong to the upper-middle-income grouping with $3,976 to $12,275 in per capita income. So do Turkey, Brazil and Russia.
"Indonesia looks good, Thailand looks good, also Turkey and Poland," Mr. Sharma said. "Frontier markets look decent from Nigeria to Sri Lanka."
"Likely to disappoint" are Brazil, Russia and China, whose growth rates have already fallen. It’s a "mixed view" for India, which has room to catch up in terms of per capita income, but whose government has "done little reforms or back-pedaling on reforms."
Increasing revenue and raising investments put the Philippines on the right track, said Mr. Sharma, noting how the country dashed expectations previously.
"It had a very high per capita income in the 1960s, but every other country surpassed it… Korea and Taiwan in the ’70s, Malaysia and Thailand in the ’80s, China in the ’90s and Indonesia in 2009. It was getting to be a joke," he said.
"When I came to the Philippines [in 2010], I saw signs of change with [President Benigno S. C.] Aquino [III]. There was a reform momentum, it was getting the investment cycle going again."
He also sees pluses in the country’s young population and the fact that more Filipinos are living in cities.
"Urbanization is better for productivity," he said.
The government, he said, can hit its medium-term 7-8% growth target as long as it keeps its reform momentum going.
"At the end of my book, I referred to a proverb that went ‘If there is no wind, row,’" Mr. Sharma said.
"The easy global conditions in the past decade are not there, there are no tailwinds to ride on, so emerging markets must invite the capital."
Politics and cronyism, however, can stall the Philippines’ momentum but "hopefully, changes ... [will be] for the better."
At Morgan Stanley, Mr. Sharma oversees $25 billion in assets. Half of this is invested in Asia, of which about $500 million to $1 billion is invested in Philippine assets, mostly stocks.
The amount might look small, "but for the size of the Philippines, it’s quite big," he said.
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SOLENN NOW ENDORSER OF ROBINSONS LAND CORP.
The Philippine Star | May 27, 2012
Solenn Heussaff: I would want to live in a place that suits my personality.
MANILA, Philippines - Solenn Heussaff is the new celebrity endorser of Robinsons Land Corp.
The Filipina-French actress was chosen not only because of her looks but also because she embodies the brand.
Solenn comes from a good family, her French father is a former French Navy Seal while her Filipino mother was a Bayanihan dancer. She is well-educated, having been schooled in Philippine and French institutions. She is fluent in English and French and speaks Filipino. She loves the arts and studied fashion design and makeup and cosmetic artistry in Paris.
Solenn is not someone who wakes up late, goes to a salon, shops, goes to the gym and attends parties in the evening. She is well-spoken and articulate. She and her family, which includes sister Vanessa and brother Erwan, love to travel. Solenn also has a good heart. The proceeds of her planned exhibit of paintings, which will feature celebrities as the subjects, will all go to the charity.
Even before she joined Survivor Philippines, Solenn was already designing clothes for Lulu Tan Gan’s label. She is a makeup artist who studied cosmetic artistry, including body painting and prosthetics, at two of the most prestigious schools in France. She also studied fashion at Studio Bercot in Paris, one of the Top 50 fashion schools in the world. She is a free spirit who once said when asked if she didn’t mind being in a bikini all the time in Survivor Philippines, “I’m French, that’s not really a big deal to me.” She’s classy but friendly and is quite eloquent. Solenn is the type of girl who can talk to any person.
Solenn’s career is at its peak and she is one of the country’s hottest personalities. In the past year, she has done four films, a best-selling CD and a sold-out two-night concert. Solenn still continues to design clothes and paint.
“I can’t be acting or singing forever and I don’t expect that the offers will always be there. I knew when I entered show business that this is something temporary for me,” says Solenn.
She will be living at Fifth Avenue Place, one of Robinsons Land’s projects in Bonifacio Global City.
“I looked at all the projects of Robinsons Land and I realized Fifth Avenue is perfect for me not only because of its convenient location. It’s near my parents’ house and just a few minutes away from where my brother lives. I also like that the condominium is located in a very respectable and quiet neighborhood,” shares Solenn.
She is excited at finally having a place of her own and decorating it according to her taste.
“It will be modern, of course. But French inspired. My home will be done in such a way that my family members and friends will be at ease when they visit. I want it to have beautiful interiors but not like a museum where people would be afraid to touch anything,” says Solenn.
She also likes the idea of having a fabulous skyline view.
“I’ve always wanted to live in a high-rise. I always dreamed of owning a condominium unit and I knew, even before, that once I moved out of my parents’ house, I would live in one,” she shares.
Being the image model of Robinsons Land Corp. is a job that Solenn believes is tailor-made for her.
“I’m not just a singer or a TV host or a model or a makeup artist. I have many roles in life. I’m a daughter, a sister, a girlfriend, a public figure.”
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ROBINSONS LAND EARNS P2.24 B IN END-MARCH
Zinnia B. Dela Peña | The Philippine Star | May 22, 2012
MANILA, Philippines - Gokongwei-led Robinsons Land Corp. (RLC) posted a net income of P2.24 billion in the first half of its fiscal year ending September this year, up 10 percent from P2.04 billion in the previous period, on steady growth in sales.
In a financial report submitted to the Philippine Stock Exchange, the property developer said unaudited revenues from October 2011 to March 2012 grew 13.6 percent to P7.11 billion while EBITDA (earnings before interest, taxes depreciation and amortization) rose seven percent to P3.93 billion.
Combined real estate and hotel revenues rose by 12 percent to P6.68 billion from P5.94 billion.
Interest income grew 37 percent due to higher level of money market placements.
Costs and expenses, however, climbed to P4.28 billion from P3.68 billion due to higher level of repairs and maintenance for various malls, higher film rentals, and higher cost of sales from residential division, among others.
The commercial centers division contributed 49 percent or P3.5 billion to total revenues, posting a 15-percent growth.
Amusement revenue went up 21 percent to P396 million.
RLC’s residential division accounted for 32 percent of total revenues or P2.26 billion, up 15 percent year-on-year due to higher level of realized sales based on project completion.
Meanwhile, the office buildings division pumped in 10 percent or P698.8 million, an increase of nine percent.
Lease income is derived from eight office buildings – Galleria Corporate Center, Robinsons Equitable Tower, Robinsons Summit Center, Robinsons Cybergate Centers Towers 1, 2 and 3, Cybergate Plaza and Cebu Cybergate.
Revenues from the hotels division reached P679.9 million, an increase of nine percent. Crowne Plaza Galleria Manila, Holiday Inn Galleria Manila, Summit Circle Cebu (formerly Cebu Midtown Hotel), Summit Ridge Hotel, Go Hotel Cybergate, and Go Hotel Palawan posted occupancy rates of 83 percent, 81 percent, 48 percent, 40 percent, 90 percent and 37 percent, respectively.
As of end-March, RLC’s total asset base stood at P72.4 billion.
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JG SUMMIT EARNINGS SURGE BY 77% IN THE FIRST QUARTER
Cliff Harvey C. Venzon | Business World | May 15, 2012
PROFITS OF JG Summit Holdings, Inc. surged by 76.7% to P4.91 billion in the first quarter of the year, propelled by the strong performance of subsidiaries and gains from its stake in the Philippine Long Distance Telephone Co. (PLDT), a disclosure to the local bourse yesterday showed.
“[This] includes the net income from discontinued operations of Digital Telecommunications Philippines, Inc. (Digitel) of P397.76 million,” the disclosure read.
“Dividend income from our investment in PLDT amounting to P1.90 billion mainly contributed to the higher net income for the period,” it added.
Regulators last year approved PLDT’s takeover of Digitel, which operates Sun Cellular.
Consolidated revenues went up by 13.9% to P33.48 billion from P29.41 billion “due to the strong performance of all business units.”
Food and beverage arm Universal Robina Corp.’s net income attributable to equity holders more than doubled to P2.2 billion in the first quarter on the back of strong domestic and international sales.
“The company generated a consolidated sale of goods and services of P18.20 billion for the three months ended Dec. 31, 8.7% higher than the revenues posted in the same period last year,” the disclosure stated.
Profits of Robinsons Land Corp., the property unit, grew by 13% to P1.5 billion,
“Real estate and hotel revenues were up by 12% to P3.36 billion against last year’s P3.01 billion,” the disclosure read. “Interest income increased by 30% due to higher level of money market placements during the period.”
But its air transportation subsidiary Cebu Air, Inc., which operates budget carrier Cebu Pacific, booked just P962.40 million in January to March, 19.8% down from the same period last year due to higher expenses.
Its banking unit Robinsons Bank Corp. recorded a 272.3% profit growth while JG Summit Petrochemical Corp. widened its losses to P78.23 million in the first quarters.
JG Summit Holdings’ cost of sales and services for the first quarter, meanwhile, went up by 17% to P23.77 billion. Shares slid by 1.69% to P32 apiece when the stock market closed yesterday.
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JG SUMMIT REPORTS P21.2B IN 2011 PROFITS
Doris C. Dumlao | Philippine Daily Inquirer | March 14, 2012
MANILA, Philippines—JG Summit Holdings Inc. posted a record-high net income of P21.59 billion last year, up by 32 percent from the previous year, as extraordinary gains from the Digital Telecommunications Philippines Inc. (Digitel) deal compensated for the decline in core earnings.
Profits from the sale of Digitel to Philippine Long Distance Telephone Co. amounted to P13 billion while profits from regular operations dipped by 45 percent to P8.56 billion from the previous year which JG Summit attributed to high input costs, forex movements and capital markets volatility.
JG Summit said in a disclosure to the Philippine Stock Exchange on Wednesday that the company’s core earnings before taxes, excluding the extraordinary gains from sale of Digitel and the effects of foreign exchange and market valuation losses, declined by 9 percent to P16.27 billion in 2011 from the previous year.
Consolidated revenues grew by 17 percent to P122.9 billion as all subsidiaries posted decent revenue growth. Equity income from associates and joint ventures, however, declined by 20 percent to P2.22 billion due to the lower contribution from Singapore-based affiliate, United Industrial Corp. Ltd. Where JG Summit owns a 36 percent stake.
The operating units performed as follows:
Universal Robina Corp.’s net profit declined by 41 percent to P4.64 billion for the fiscal year ending September compared with the previous year as high input costs gnawed at margins. This unit was the largest contributor to JG’s net income at 35 percent in 2011.
Cebu Pacific’s net income for 2011 fell by 47 percent to P3.62 billion as expenses grew faster than revenues due to high aviation fuel costs. This was so even as passenger volume expanded by 14 percent.
Robinsons Land Corp. grew its net profit for the fiscal year ending September by 11 percent to P3.97 billion due to the strong performance of all of the company’s business units. The residential segment posted the biggest year-on-year jump in revenues at 41 percent on the back of robust sales take-up for its new projects and increased sales for its existing projects.
Robinsons Bank posted net earnings of P368 million in 2011, up by 23.3 percent year on year, due to higher interest income and trading gains.
JG Summit Petrochemicals Corp. incurred a higher net loss of P384 million in 2011 compared with P102 million a year ago due to inventory write-offs as well as higher volume consumed and prices of bunker fuel.
JG Summit’s consolidated cash flow for the year dropped by 11 percent to P25.2 billion due mainly to the high commodity prices which eroded margins of URC and Cebu Pacific.
Meanwhile, JG Summit’s net financing costs and other charges (net of interest income) decreased by 42 percent to P2.04 billion as the level of borrowings declined after the settlement of a syndicated loan from the cash proceeds of the PLDT shares option sale as well as higher average value of the company’s investment portfolio for the year.
Mark-to-market valuation of financial assets for the year amounted to a loss of P655 million versus a gain of P1.7 billion for the same period in 2010, part of which was due to fuel hedges of Cebu Air arising from volatility in global financial and commodity markets. The group also recognized foreign exchange losses of P241 million against forex gains reported last year of P1.94 billion.
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ROBINSONS LAND BAGS ASIAMONEY AWARD
The Philippine Star | March 02, 2012
MANILA, Philippines - Robinsons Land Corp. (RLC), one of the country’s largest property developers, was recently awarded Asiamoney magazine’s Best Managed Company Small-Cap category in the Philippines in 2011.
Asiamoney, a leading financial publication based in Hong Kong, said RLC earned the award [because of the sensible way management has run the company’s operations.”
“We are honored and happy that our efforts to steer the company amid these challenging times have been recognized by such a prestigious publication as Asiamoney,” said RLC president Frederick Go.
“The Philippines’ second-largest builder and operator of malls has continued to grow revenues and profits,” noted Asiamoney.
RLC posted a 10 percent growth in net profit for the fiscal year ending Sept. 30, 2011 to P3.97 billion from the P3.59 billion earned in fiscal year 2010 on stronger leasing revenues and residential sales.
It generated total gross revenues of P13.34 billion for fiscal year 2011, an increase of 18 percent from P11.30 billion for fiscal year 2010. EBITDA amounted to P7.14 billion this year, up by 11 percent from the previous year.
“RLC’s plans for the future also look steady,” said Asiamoney, citing the firm’s plan to build three new malls per year, develop two new office properties in the Ortigas district, roll-out its Summit Hotels and gohotels.ph brands and launch P8-billion worth of residential projects.
A leading real estate conglomerate in the Philippines, RLC has built landmark property developments that include 29 malls, 5 hotels, 8 office buildings, 57 residential condominiums, and 31 affordable housing subdivisions throughout the country.
“We will open three new shopping malls, expand two existing malls, continue to complete several office buildings, residential condominium buildings, and housing subdivisions in the region. We are also very excited with this year’s opening of four gohotels.ph in Puerto Princessa, Tacloban, Dumaguete and Bacolod,” added Go.
Asiamoney is a monthly financial magazine that has been an important source of intelligence and information for corporate executives and the investment community in Asia since 1989. It is a division of the Euromoney Institutional Investor Plc, a respected global media group.
The Best Managed Company Awards are industry recognition awards given by
Asiamoney to the top small, medium and large cap companies in major countries across Asia where companies are measured against a list of criteria including profitability, market leadership and innovation.
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AQUINO SEES ECONOMIC TAKEOFF AS STOCKS HIT NEW RECORD HIGH
Norman Bordadora | Philippine Daily Inquirer | March 3rd, 2012
President Benigno Aquino III
CALAPAN CITY—With local stocks hitting a new record high and finally closing above the psychological 5,000-point level on Friday, President Benigno Aquino III sees this as an indication that the country is indeed poised for an economic takeoff.
“The stock market is the clearest indicator and fastest reacting business indicator to show business confidence,” said the President, who was also in the city for the ceremonial switching on of electricity to 45 sitios (sub-villages) in the area.
The main Philippine Stock Exchange index (PSEi) surged 1.57 percent, or 77.69 points, to close at an all-time high of 5,016.30 Friday.
On Thursday morning, the PSEi rose more than 2 percent to an intraday of 5,011.09 before paring down gains and closing at 4,938.61.
“We’re happy that it has been breached. I hope the day closes that it’s still at 5,000,” Mr. Aquino said.
Cure for sick man of Asia
Speaking to reporters after inaugurating a 2.1-megawatt mini-hydroelectric plant, Mr. Aquino said the PSEi could have breached the 5,000 level much earlier had it not been for the political tension in the Middle East and the financial crisis in Europe.
“There have been many articles written by foreign media sources that say we are about to take off. One article appears to describe me as saying, ‘I may have the antidote, or the cure, for the sick man of Asia,’” he added.
The President noted that the 4,000 index couldn’t be reached before he took office. “We’ve already passed that point and we stayed above 4,000,” he said.
“To tell you the truth, they have been promising to reach 5,000 since last year but the tensions in the Middle East happened, the European crisis happened and it has yet to be solved,” he added.
Local stocks hit an all-time high on Thursday on expectations that the Bangko Sentral ng Pilipinas would cut interest rates to boost the economy.
As expected, the BSP cut its main policy rate by 25 basis points after the market close to a record low of 4 percent to help cushion the domestic economy from the global slowdown.
Bank shares saw strong gains on hopes lower rates would boost demand for loans and spur earnings growth.
Top lender Bank of the Philippine Islands ended Thursday nearly 5 percent higher and second-ranked Metropolitan Bank & Trust Co. rose 3.7 percent.
“The market anticipated another rate cut and we’ve seen a lot of buying into banks,” said Ira Ganhin, an analyst with BPI Asset Management.
Expecting credit upgrade
“The level of bad loans has fallen while loan growth is also increasing. So, everything seems to be going right for the banking sector,” he said.
Ron Rodrigo of DBP-Daiwa Securities told Dow Jones Newswires there were expectations that the Philippines may soon get a credit rating upgrade.
This helped sustain positive sentiment, he said, a day after the BSP trimmed its key interest rates.
Asian markets’ upward trend since the start of the year continued on Friday as optimism was boosted by a fresh set of upbeat US data and positive news from the eurozone.
In Europe, ministers agreed on measures linked to a Greek debt restructuring and the beleaguered country was expected to be given the all clear for its second bailout next week.
Adding to positive sentiment was news from the US Department of Labor that new claims for unemployment insurance, a key indicator of the pace of layoffs, fell slightly last week.
To electrify 36K sitios
Mr. Aquino also called on Filipinos to support the government in its bid to provide electricity to more communities in the country during the inauguration of the mini-hydropower plant in Calangatan village in San Teodoro town.
The facility in Oriental Mindoro is the first renewable energy project in the Philippines being constructed by an electric cooperative following the passage of the Renewable Energy Act of 2008.
Mr. Aquino also led the ceremonial switch-on of electrification of 45 sitios under his administration’s sitio electrification program.
“This is no joke. We will electrify 36,000 sitios. We can accomplish that … but if we help each other, why wouldn’t we accomplish that faster? You have the capability,” Mr. Aquino said in his speech before officials of the Oriental Mindoro Electric Cooperative (Ormeco) and beneficiary-residents.
Primary source of electricity
The President said there might come a time when electricity generated from diesel could be a secondary supply of power with the development of natural sources.
“Diesel might soon be used only to augment but would no longer be the primary source of electricity,” he said.
The Ormeco-owned Linao Cawayan mini-hydro plant-lower cascade facility is located in Sitio Ariguy.
The 2.1-megawatt lower cascade is a portion of the whole 5.1-megawatt LCMHPP. The remaining 3-megawatt upper cascade is now being constructed 6 kilometers away.
Ormeco finished the energization of the lines servicing the 45 sitios in 90 days since September 2011. The last energized sitio received power in December 2011.
The electrification benefited an initial 978 families, who finally had a “bright Christmas holiday season.”
The total cost for the energization lines for the 45 sitios reached more than P21 million. With reports from AFP and Reuters
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ROBINSONS LAND PROFIT AT P4B
Franz Jonathan G. de la Fuente | Business World | January 16, 2012
PROPERTY DEVELOPER Robinsons Land Corp. reported a double-digit boost to its net income for the 2011 fiscal year versus the previous year on the back of growth in all its business segments, documents filed with the Philippine Stock Exchange showed yesterday.
The Gokongwei-led firm hiked its net profits by 10% to P3.97 billion in the fiscal year ending September last year versus P3.60 billion for 2010, buoyed mainly by robust revenues from the company’s residential and commercial developments.
This result mirrored the Robinsons Land’s 10% net profit growth in fiscal year 2010 over P3.27 billion in fiscal year 2009.
Total gross revenues for the period rose by 18% to P13.34 billion from P11.30 billion year-on-year, while total costs and expenses grew by 21% to P8.49 billion from P7.03 billion.
The company’s commercial centers division, which accounted for 47% of Robinsons Land’s total profits, hiked its revenues by 8% to P6.23 billion versus P5.74 billion last year.
“Rental escalations and strong take up of leased areas of the company’s mall space after renovation and expansion work of existing malls increased the rental revenues.
Robinsons Land expects that the revenues and operating cash flows generated by the commercial centers business shall continue to be the driver for the company’s growth in the future.” Robinsons Land said.
Meanwhile, the company’s residential division -- contributing 34% of total profits -- realized a 41% increase in revenues to P4.56 billion versus P3.22 billion in 2010, covering the Luxuria, Residences, Communities, and Homes brands.
Higher completion rates of existing projects such The Fort Residences, East of Galleria and Woodsville Viverde, as well as higher take-up of realized revenues from new projects such as Trion Tower 1, Sonata 1 and Amisa 1 and 2 fueled this growth, Robinsons Land said.
On the other hand, revenues from the office buildings division climbed by 14% to P1.35 billion compared to P1.18 billion in the same period in 2010, mainly due to new leasable office space in Robinsons Cybergate Tower 3 and the recent completion of Cybergate Plaza.
“The company has secured a number of major customer call centers and BPOs (business process outsourcing) as long-term tenants in its office building space and has focused on attracting their business, including custom-designing its office space with call center and BPO design requirements in mind,” the firm said.
The hotels division, Robinsons Land’s smallest business segment, saw its revenues leap by 5% to P1.21 billion from P1.15 billion in 2010, anchored on the strong performance of the company’s Go Hotel in Mandaluyong City, which registered an 88% average occupancy rate in the fiscal year.
“Although the hotels division is an important part of Robinsons Land’s business, the company considers its primary value to be as a complement to its other developments. It is studying plans to increase its presence in this market segment with its Go Hotels and the possible expansion of its Summit Hotels,” Robinsons Land said.
Moving forward, the company has allotted P13 billion for capital expenditures for the 2012 fiscal year -- nearly equal to P13.9 billion for the 2011 fiscal year -- to be sourced through cash operations and debt.
More than 60% of the funding will go to malls, office buildings, and hotels, while the remainder will be earmarked for residential condominiums and housing units, the company said.
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PHILIPPINES ON TRACK FOR INVESTMENT GRADE RATING
Michelle V. Remo | Philippine Daily Inquirer | January 19, 2012
The Philippines’ chances of getting another credit-rating upgrade toward investment status remain intact even with the recent cuts in the ratings of nine economies in the eurozone.
This was according to Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr., who said that, although events in Europe influence the performance of the Philippine economy through various channels, the impact of their problems in terms of the country’s credit standing is almost nil.
“I don’t think that [eurozone’s woes] will impact our own credit standing,” Tetangco told reporters Wednesday. He said the creditworthiness of the Philippines is improving despite problems of major Western economies.
Last Friday, Standard & Poor’s cut the credit ratings of nine countries in the eurozone amid the prolonged debt crisis in the region. The move stripped France and Austria of their long-held AAA credit ratings.
The seven other countries that were downgraded were Italy, Spain, Portugal, Cyprus, Malta, Slovakia and Slovenia.
The downgrade of the ratings of these countries came amid expectations that the debt crisis in the eurozone would likely persist through 2012 as the region has yet to unveil a firm plan toward resolving the turmoil.
Economists said the debt woes in the West may have dampening effects on the Philippine economy. This is because the eurozone serves as one of the biggest export markets, is host to many overseas Filipino workers, and is a source of foreign direct investments and official development assistance.
Meanwhile, BSP Deputy Governor Diwa Guinigundo said the ongoing impeachment trial of Chief Justice Renato Corona should not affect the Philippines’ chances of improving its credit rating as long as economic targets will continue to be pursued.
He said the government should simply not lose focus on accelerating economic growth by boosting public spending, regardless of developments on the political front.
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PHILIPPINES MAY BECOME KEY GLOBAL GROWTH DRIVER
Michelle V. Remo | Philippine Daily Inquirer | January 16, 2012
The Philippines has the potential to become one of the top 10 countries that can greatly contribute to global growth within the decade, Goldman Sachs said.
According to the investment bank, the Philippines is among the N-11 [Next 11] economies that are likely to advance to the stage of “growth countries,” or nations that account for at least one percent of global gross domestic product.
The N-11 economies are Mexico, Korea, Indonesia, Turkey, Iran, Egypt, Nigeria, Bangladesh, Pakistan, Philippines and Vietnam.
Goldman Sachs said that, except for Vietnam and Bangladesh, all N-11 economies could advance to the “growth” classification.
The investment bank’s projection is anchored on the relatively low incomes observed of most N-11 economies in the past. As a result, the countries have much room for growth and may improve their economic fundamentals significantly.
The nine economies from the N-11, along with the so-called BRICs (Brazil, Russia, India and China), are expected to contribute the most to global growth from 2011 to 2020.
“Growth markets have the potential to be among the top ten contributors to global growth over the next decade,” Goldman Sachs said.
The Philippines grew by 3.6 percent in 2011. In the past decade, it posted an average growth of close to 5 percent.
Goldman Sachs said the growth rate of N-11 countries and BRICs could accelerate further in the decade to 2020, driving much of the global economy.
For 2012, the investment bank expects the global economy to grow by 3.4 percent. Over the next eight years, the growth rate may average at 4.3 percent, led by the N-11 nations and BRICs.
“Average growth rates suggest that global growth is likely to be much stronger in the current decade, at 4.3 percent, than in the past 30 years. This is due to the impetus from the BRIC economies and the other growth markets,” Goldman Sachs said.
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PHILIPPINES UPGRADED IN INTERNATIONAL PROPERTY INVESTORS' REPORT CARD
Tessa R. Salazar | Philippine Daily Inquirer | January 13, 2012
How time flies, and circumstances change. In 2011, the local property industry received sobering news that Manila had been ranked “below fair” to “abysmal” by foreign property investors, according to the Emerging Trends in Real Estate Asia Pacific 2011 survey conducted by the prestigious Urban Land Institute (ULI). Global real estate investors then gave Manila 4.56 points out of a possible 9.
But in the latest report, the ULI Emerging Trends 2012 Asia Pacific upgraded Manila from the bottom of the list to No. 18 in Investments.
The 2012 ULI study said Manila’s progress in commercial investment prospects boosted its ranking from 20th place in the 2011 survey to 18th place (out of 21) for the 2012 report. It also said that “a new government and a surge in foreign investment in the business process outsourcing (BPO) market—back office and call centers, for the most part—have helped the commercial real estate market, boosting the city’s 2012 investment prospects.”
Included in the survey are 360 international renowned real estate professionals, including investors, developers, property company reps, lenders, brokers and consultants.
Simon Treacy, the South Asia head of the Urban Land Institute, told Inquirer Property that several factors were instrumental in the two-place improvement, including the new leadership in government—the promise of change, skilled people, opening up of markets and the “very exciting” demand in the business process outsourcing (BPO) market.
He said, “The world is starting to understand that the Philippines is back in the game.”
Fast-emerging market
The ULI study is a publication of ULI and Pricewaterhouse-Coopers. It described the Philippines as a “fast-emerging market.” Part of the report read, “In the past, perceived problems with bureaucracy and corruption have deterred foreign investment—‘The Philippines is on our do-not touch list,’ one fund manager commented—but a recent change in government has now improved political stability and created a more pro-business environment. Rapid growth in the BPO sector—currently responsible for 90 percent of office take-up in the country, according to investment bank CLSA—has led to mushrooming demand for office space. According to one locally based investor, ‘The Philippines is doing 300,000 square meters per year, and we’re thinking maybe 360,000 may not be unachievable.’”
The report also said, “As with most developing markets, foreign investment in real estate is regulated. Foreigners are barred from taking a majority interest in land, although (unlike in India) they may own buildings or leaseholds relating to it. Banks are willing to provide 60 to 65 percent LTVs, and interest rates are described as ‘very livable: fixed-term five-year money is available at something like 6.5 percent to 7 percent.’
“Bureaucracy continues to be an issue, but interviewees compare the Philippines favorably to other emerging markets in terms of transparency and, perhaps most significant, the availability of options for existing investments in the rapidly evolving BPO sector, which in the voice segment is now larger than that in India.”
The ULI study about the Philippines concludes: “The fact that so many multinationals are now setting up their own in-house facilities increases opportunistic possibilities because ‘if you have a multinational-profile tenant roster, then you can attract (core) funds.’ Investors are looking for returns of 20 percent plus, according to one fund manager, whereas ‘if you buy the building from me and it’s 100 percent or 95 percent occupied, you might be looking at a 10- to 12-percent return.’”
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AMERICAN RETIREES, THE NEXT BIG BUSINESS FOR PHILIPPINES
J.J. Reyes | Philippine Daily Inquirer | January 12, 2012
The United States experienced a rapid population growth after World War II with 78 million children born from 1946 to 1964.
All those children are now middle-aged or older. The first of the American baby boomers turned 65 on January 1, 2011. The boomers have started to retire at the statistical rate of 10,000 per day.
Yes, 10,000 per day!
This retirement phenomenon will continue for another 19 years. And
immediately in front of the boomers are more than 35 million already-retired American seniors.
Looking at closer neighbors, Japan has the highest proportion of elderly citizens with 21 percent over the age of 65.
The demographic projection for Japan is an increase to 25.6 percent by 2030. Taiwan’s elderly population is near 2.5 million, or 10.63 percent out of 23.12 million.
South Korea has similar numbers.
According to data by Statistics Korea, the number of Koreans in the senior age group is 5.36 million, or 11 percent.
Chairman Mao Zedong, the founder of the People’s Republic of China, encouraged a high birth rate because he believed a large population would give China military and economic power.
The government later reversed the policy to one-child per couple. Some economists believe that China’s current prosperity can be partially attributed to the population bubble created by Chairman Mao. As their citizens begin to age, under the one-child policy, China will be confronting an enormous challenge. The eventual result, according to Dean Cheng, a research fellow at the Heritage Foundation, is the “4-2-1” phenomenon.
Four grandparents and two parents will be supported by one child.
The Philippine Retirement Authority (PRA) was created more than 25 years ago in 1985 by virtue of Executive Order No. 1037 signed by then President Ferdinand E. Marcos.
According to its website, “PRA is mandated to attract foreign nationals and former Filipino citizens to invest, reside and retire in the Philippines with the end-view of accelerating the socio-economic development of the country, contributing to the foreign currency reserve of the economy and by providing them the best quality of life in the most attractive package.”
With the large number of retirees in Asia and the US, why has the program experienced limited success? Although there are no official numbers published on its website, my understanding is only 30,000 Special Resident Retiree’s Visas (SRRVs) have been issued.
Most applicants are Chinese, followed by Koreans, Japanese and Americans.
By now, the Philippines should have retirement villages for Americans because English is widely spoken. Instead, Americans are going to Spanish-speaking Mexico.
US Census 2010 estimates approximately 2.5 million citizens and legal permanent residents of Philippine ancestry.
One nongovernment survey claims 200,000 Fil-Am senior citizens would really like to retire in the Philippines, but they won’t.
Unlike Social Security, which you can take anywhere, Medicare stops at the border. Fil-Ams are afraid to return home without medical insurance. Another survey calculates that more than one million American seniors have homes in Mexico. The popularity of Mexico as a retirement destination is because you can simply cross the border back to the US for medical treatment.
The Fil-Am community is asking the federal government to make Medicare portable.
Fil-Am retirees would then have continued coverage under Medicare if they decide to return to the Philippines. While I am a strong supporter of the petition drive, the chances of a policy change are very slim. The American healthcare industry has a very powerful, well-financed lobby in Washington, DC. Any changes to Medicare will be contrary to their business interest.
To attract American retirees, the PRA, which is under the Department of Tourism, needs to partner with the Department of Health and offer medical insurance comparable to Medicare. It could be a program similar to PhilHealth, but instead of P100 to P750 in monthly premiums, American retirees might pay P4,000, provided the quality of medical care is commensurate to paying a higher premium.
The amount suggested is arbitrary and for purposes of discussion only. P4,000 was selected because most American retirees are paying $99.90 a month for the optional Medicare Part B.
The potential revenue stream from 200,000 retired Fil-Ams is P800 million a month. The amount increases to P4 billion a month if you can attract one million American retirees just like Mexico. This is just for medical insurance. It does not include what retirees will spend living in the Philippines.
The SRRV program requires proof of retirement income. The minimum is $1,500 a month. Wealthier retirees might spend $5,000. The annual inflow of foreign exchange from one million Americans living overseas in the Philippines can range from $18 to $60 billion. Millions of jobs will be created at this level of expenditure. It could be the next big business for the Philippines.
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BSP SEES INFLATION DIPPING BELOW 4% IN 2012
Michelle V. Remo | Philippine Daily Inquirer | January 11, 2012
MANILA, Philippines—The Bangko Sentral ng Pilipinas expects inflation to average below 4 percent in 2012, saying the benign increase in consumer prices should help encourage higher spending by individuals and enterprises.
In an ambush interview with reporters, BSP Governor Amando Tetangco Jr. said moderate inflation expected in 2012 would help boost domestic growth, particularly through the spending channel, and thus mitigate the ill-effects of the continuing debt and economic problems in the eurozone on the Philippines.
“Inflation has started to trend down, and the expectation for this year is that it will be below the midpoint of the target range,” Tetangco said.
The official inflation target for this year is between 3 and 5 percent.
The central bank chief added that moderate inflation will complement plans of the government to boost spending.
He said the economy could grow faster in 2012 than in 2011 should inflation expectation and spending plans materialize.
In the first three quarters of 2011, the economy grew by 3.6 percent. While economists said the rate was respectable, it made the full-year target of at least 4.5 percent difficult, if not impossible, to achieve.
The slower-than-desired growth in 2011 was blamed partly on the economic woes of the eurozone and the United States, which are two of the biggest export markets. The problems in the West led to declines in export incomes of emerging Asian economies, including the Philippines.
The slow growth last year was also attributed to underspending by the national government. Finance officials, however, earlier vowed to reverse this year the underspending last year. They said pump-priming will be a focus of the government’s fiscal program for 2012.
“With both fiscal and monetary-policy support, growth of the economy may be boosted and the impact of the slower export growth may be mitigated,” Tetangco said.
He said the low-inflation environment gave the BSP the flexibility to cut interest rates.
The BSP has signaled it may cut its key policy rates, which influence commercial interest rates, in the first quarter of this year. Monetary officials said lower interest rates should help boost demand for loans, and thus help accelerate rise in consumption and investments.
“We have room for possible easing [of interest rates] this quarter given the favorable inflation outlook,” Tetangco said.
The BSP’s key policy rates currently stand at 4.5 percent for overnight borrowing and 6.5 percent for overnight lending.
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ROBINSONS LAND RETAINS HIGH RATING
Zinnia B. Dela Peña | The Philippine Star | January 09, 2012
MANILA, Philippines - Robinsons Land Corp. retained its highest rating of PRS Aaa from local credit rating agency PhilRatings for its outstanding P10 billion bonds maturing in 2014.
Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligations is extremely strong.
RLC, the property arm of Gokongwei listed flagship firm JG Summit Holdings Inc., is engaged in the development and operation of shopping malls and hotels, and the development of mixed-use properties, office and residential buildings, as well as land and residential housing projects located in key cities and urban areas nationwide.
“Considering current market developments and conditions both globally and locally, RLC is now investing more in malls, office buildings and hotels, while taking a more conservative stance in relation to the development of residential real estate projects. This move signifies that RLC is expected to have a more stable and strong recurring rental and lease revenue base from investment properties while at the same time, pursuing opportunities through its residential development businesses,” PhilRatings said.
Sustained robust OFW remittances, the increase in consumer spending, as well as an expanding BPO business are expected to boost demand for residential space going forward and will continue to support growth in the commercial centers business, PhilRatings said.
The completion of the ongoing development and expansion projects (which include new malls in Calasiao, Pangasinan; Puerto Princesa, Palawan; Magnolia in Quezon City; expansion of Robinsons Bacolod and Robinsons Tacloban; as well as the Phase 2 redevelopment of Robinsons Metro East) within the second semester of 2011 up to the first half of 2012, are expected to expand the net leasable area of RLC’s commercial centers division to approximately 911,800 square meters.
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PHILIPPINE CREDIT RATING ON TRACK FOR UPGRADE
BSP expects investment grade status within a year
Ronnel W. Domingo | Philippine Daily Inquirer | January 4, 2012
The Philippines’ global credit rating may be raised to investment grade within a year following five “positive actions” from credit watchers in 2011, according to the central bank.
Diwa Guinigundo, Bangko Sentral ng Pilipinas deputy governor, said Wednesday that in six months to a year, it is possible for the country to attain an upgrade of “a notch or two,” especially after Standard and Poor’s improved its outlook on the country from “stable” to “positive” last month.
For borrowings from foreign lenders, Moody’s Investor Service and S&P rate the country “BB” and “Ba2,” respectively, both indicating two notches below investment grade.
But Fitch Ratings marks the country with “BB+,” which is just a step away from the level where a country’s capacity to pay off its debts is perceived to be “adequate.”
A two-notch upgrade would bring Moody’s and S&P ratings to investment grade, as a one-step uptick will do with Fitch ratings.
“If the direction of the country’s economy stays on course, I think we have sufficient basis to be confident that we shall receive a credit upgrade that we deserve,” Guinigundo said.
He said the domestic economy continued to grow in 2011 despite problems elsewhere in the world that affect the Philippines, such as the fiscal predicaments of the United States and certain countries in the European Union.
He also said that the inflow of funds from abroad remained strong with remittances from overseas-based Filipinos reaching some $16.5 billion in the 10 months to October and gross international reserves hitting $76 billion.
Guinigundo said the Philippines had been accorded “two slots” for a possible upgrade, which a positive outlook—such as that of S&P—makes all the more seemingly attainable.
“Fitch was almost immovable but they moved,” he added. “Whatever improvement from the current (ratings) is welcome, but we deserve investment grade based on our assessment.”
A credit rating upgrade would mean lower borrowing costs for the country, which would translate to easier access to funds for companies and individuals.
Last December when S&P changed its Philippine outlook to positive from stable, company analyst Agost Bernard said the move was meant to reflect the assessment that the Philippines’ external vulnerability had diminished.
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PHILIPPINES RAISES $1.5B FROM 25-YEAR GLOBAL BOND ISSUE
Ronnel W. Domingo | Philippine Daily Inquirer | January 5, 2012
MANILA, Philippines—The Philippine government has raised $1.5 billion from the issuance of 25-year global bond registered with the US Securities and Exchange Commission, the Department of Finance said Thursday.
Maturing in January 2037, the bonds were priced at par with a yield of 5 percent.
Finance Secretary Cesar V. Purisima said in a statement that the yield was 1.962 percent higher than the benchmark US debt paper.
The latest global bond float carries “the lowest yield for a new 25-year benchmark dollar-denominated offering by the Philippines,” Purisima said.
“We are very pleased to have once again been able to extend the [government’s] maturity profile.”
The Philippines’ most recent foray into the global debt market involved the same amount but with a shorter tenor of 15 years.
Wednesday’s offering is the fourth such sortie of the Aquino administration, which raised P44.1 billion, or $1 billion, through its initial issue of 10-year global peso-denominated bonds in September 2010.
In January 2011, the Treasury also raised about P54.77 billion, or $1.25 billion, through the sale of 25-year global peso bonds.
Officials said book-building for the offering took some 15 hours, with a quarter of allocations going to investors based in the Philippines, another quarter to those in parts of Asia, 35 percent from the United States, and 15 percent from Europe.
“Positive investor reception for this transaction allowed us to achieve our funding objectives in support of our fiscal program,” National Treasurer Roberto B. Tan said.
Deutsche Bank and Standard Chartered Bank were appointed joint global coordinators.
They were also named joint bookrunners along with Citi, Credit Suisse, Goldman Sachs, HSBC, JP Morgan, and UBS.
The amount raised was the upper limit that the government was authorized to raise from the bond float.
With plans to borrow a total of $2.25 billion from commercial lenders, this means that the government has $750 million more to borrow.
The government plans to borrow a total of $4 billion from foreign lenders in 2012, of which $1.75 billion will come in the form of official development assistance from foreign governments and multilateral institutions.
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PSEi SEEN RISING BY 13.6%
Robinsons Land Added to CLSA’s Picks for Next Year
Doris C. Dumlao | Philippine Daily Inquirer | December 31, 2011
Investment group CLSA Asia-Pacific Markets sees the main-share Philippine Stock Exchange index surging by about 13.6 percent to end at 4,900 next year.
This was based on expectations that corporate earnings will be aided by resilient domestic consumption, increased government spending and monetary easing.
In a research dated Dec. 9 titled “Looking Good in 2012,” which was written by head of research Alfred Dy, CLSA added Robinsons Land Corp. to its list of favored stocks. Other companies in its “conviction picks” are SM Investments, Ayala Corp., Metro Pacific, Cebu Pacific, and Philippine National Bank.
“In spite of a tough global macro backdrop which is expected to continue in 2012, we remain positive on the Philippines. For one, the Philippines is one of the few countries around which has a relatively low export-to-GDP (gross domestic product) ratio of 25 percent, suggesting that the fortunes of the economy is not really that linked to what is happening in Europe and the United States,” Dy said.
Dy said domestic consumption should continue to do well given favorable demographics and $3.245 billion in recurring cash inflows from overseas Filipino remittance, business process outsourcing and tourism.
The government, which has been widely criticized for the fiscal contraction in 2011, should have a better year next year in terms of infrastructure spending, privatization and monetary easing, he said.
“Sectors to watch out for are consumer, banking, infrastructure, construction, and gaming,” Dy said.
More PPP projects
Dy expects a couple of public-private partnership contracts to be awarded. Aside from the P2-billion Daang Hari-South Luzon Expressway, he expects the awarding of the P17-billion Connector Road (between North and South Luzon Expressway and the Department of Education’s project involving the construction of 10,000 classrooms in regions I, III and IV-A.
“Like the power privatization program in recent years, a couple of awarded contracts could snowball to more contracts in the coming years,” he said.
Dy said there would likewise be a couple of property deals given renewed corporate interest in assets like the Food Terminal Inc., Cebu Airport and parcels of land in Fort Bonifacio. “Of course, increased government spending and successful PPP launch should be positive for the construction sector,” he said.
Stock picks
RLC was added to CLSA’s “conviction picks” given its significant presence in shopping malls, hotels, office, and residential development.
“Among the property companies in our coverage, RLC has the biggest recurring revenue base at 72 percent followed by Filinvest Land at far second at 26 percent. In terms of earnings, RLC also has the biggest recurring earnings base at 80 percent which is followed by Ayala Land at 35 percent,” Dy said.
The key drivers seen for RLC’s earnings in 2012 were office rentals and hotels which were expected to grow in the mid-teens followed by residential development expected to grow by 10 percent.
Upbeat on RLC
“Given its presence in the shopping mall and hotel industry, RLC is also one of the best ways to play the country’s emerging tourism sector where tourist arrivals are expected to double from 3.5 million tourist in 2010 to 7 million tourists by 2017,” noting that the property company’s stock valuation was likewise very “compelling.”
On the banking side, CLSA expects the sector to remain “buoyant” but sees loan growth moderating at 12-14 percent compared with the growth over 20 percent in 2011. “Unlike in 2011 where we saw net interest margins (NIMs) contracting by 50bps, we expect NIMs to stabilize in 2012,” Dy said.
Apart from the Philippine National Bank-Allied Bank merger finally happening by the second half of 2012, CLSA believes that Bank of the Philippine Islands (BPI) is the best positioned among the big three banks in the Philippines to do a major acquisition given its relatively high tier one and capital adequacy ratios. CLSA also noted that Banco De Oro had intimated that it was open to do “bite-size” acquisitions that could add 50 to 100 branches to its existing 750 branch network.
Outside of the banking and property sectors, we expect some M&A (merger and acquisition) action in the ports and mining sectors. For ports, we understand that ICTSI continues to be on the prowl for new ports in the Mediterranean and Africa. In mining, we understand that Philex is open to do some acquisitions,” Dy said.
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BSP SHRUGS OFF PH PROPERTY PRICE BUBBLE CONCERNS
Michelle V. Remo | Philippine Daily Inquirer | December 26, 2011
Although condominiums have mushroomed throughout the metropolis amid rising demand for residential property, the danger of an asset price bubble forming is remote, the Bangko Sentral ng Pilipinas (BSP) said.
According to BSP Governor Amando Tetangco Jr., there is an actual, not speculative, demand for property. He explained that bubbles would usually arise from too much speculation.
“There is still no sign of a property bubble,” Tetangco told reporters.
He noted that current prices of residential property are actually much lower in real terms compared with the prices just before the Asian financial crisis struck in the late 1990s.
Prior to that crisis, demand for real estate soared, boosted partly by speculators who wanted to take advantage of projections that asset prices would continue to increase. The speculators were buying assets, thereby increasing prices, with the intention of selling once prices are actually higher.
But when prices became too high, demand steeply declined, leading to huge losses even for banks that were financing the purchase of property. As a result, the banking sector underwent a crisis. This phenomenon affected several economies throughout Southeast Asia.
But Tetangco said that the situation today was far from that observed in the late 1990s.
Apart from the fact that there is actual demand for housing, current real estate loan portfolio of banks is within manageable levels, Tetangco explained. Banks are not overly exposed to the real property sector.
Data from the BSP showed that outstanding residential real estate loans from banks amounted to P198.4 billion as of end-June this year, up by 14 percent from P173.7 billion reported in the same period last year.
Although growth stood at a double-digit pace, the central bank said loans that supported residential property purchases account for a manageable 6 percent of banks’ total loan portfolio.
Data also show that current land values in Metro Manila are still over 30 percent lower in real terms than those seen in the late 1990s.
Still, the BSP is strictly monitoring home prices as well as exposure of banks in the real property sector, Tetangco said.
Strict monitoring is necessary to avert a crisis similar to that which affected the United States in 2007. The world’s largest economy fell into a recession in 2009 due to subprime concerns.
“We are monitoring that to make sure liquidity and prices are just in the right levels,” Tetangco said.
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