Investing Stocks in Philippines: December 2012

Monday, December 31, 2012

Stock News 2012: More airlines flying to PH if gov’t scraps carriers’ tax—FTIP official

English: Singapore Airlines Airbus A300B4-203 (Photo credit: Wikipedia)

At least seven foreign carriers are set to open, resume or add flights to the Philippines once the government scraps airline levies, industry groups said.

Federation of Tourism Industries of the Philippines (FTIP) interim president Aileen Clemente said in a phone interview that Lufthansa/Swiss Airlines, Singapore Airlines, Cathay Pacific, Delta Airlines, Etihad, KLM, Kuwait Airlines, and Qatar Airlines strongly support the removal of the so-called gross Philippine billings tax (GPBT) and the common carriers’ tax (CCT).

Clemente said these airlines have expressed interest in flying to the Philippines starting early next year once the law abolishing such charges has been enacted.

“The President has issued a certificate of urgency so our legislators only need to reconcile the Senate and House (of Representatives) bills on the removal of these charges. When the charges are removed and given that demand for flights grow, that would give international carriers the incentive to open or add flights to the Philippines,” she said.

Clemente said that, hopefully, the airlines can add more flights by mid-2013 if the taxes have been removed by then.

More international airlines flying to the country would mean higher tourism arrivals, Philippine Travel Agencies Association (PTAA) president John Paul Cabalza said.

“We have seen the dwindling number of seats available to the Philippines because of the GPBT and CCT and this is not good since different parts of the country are largely only reachable by air,” Cabalza said. Various local and foreign groups, including the Board of Airline Representatives, have been clamoring for the removal of such levies.

About 3.5 million tourists are expected to visit the Philippines this year, up 9.18 percent from 2011. The country aims to attract 10 million tourists by 2016.

To meet the target, 15 million seats should be made available, according to data released by the Senate. Currently, the Philippines only has six million seats available with about 369 flights weekly, the second-lowest in Asia and just ahead of Cambodia.

The Philippines is the only country that levies taxes on airlines, the PTAA and FTIP said earlier in a statement.

Studies project that revenue losses from the CCT and the GPBT will be offset by 20 million seats by 2016 and lower airfares by at least eight percent. There is a also a projected strong growth in tourist arrivals from 5.54 million in 2013, 6.75 million in 2014, 8.21 million in 2015, and 10 million in 2016.

Expected jobs to be created are currently seen at six million with revenues to be generated estimated to reach P455 billion by 2016.

The Congress has long passed its version of the bill removing the GPBT and CCT. Last week, the Senate unanimously voted for the passage of a Malacañang-backed bill conditionally waiving the P2.5 billion combined revenues from the GPBT and CCT. The Senate version exempts foreign carriers whose countries likewise give a similar tax exemption to Philippine carriers.

This early, Cabalza said, all tourism-related subsectors should start preparing for the entry of more foreign tourists to the country.

http://business.inquirer.net/99963/more-airlines-flying-to-ph-if-govt-scraps-carriers-tax-ftip-official

Sunday, December 30, 2012

Stock News 2012: Manchester International raises public ownership to 11.84%

Hard Rock Hotel Macau (Photo credit: Wikipedia)

Manchester International Holdings Unlimited Corp. (MIH), the local backdoor listing vehicle of the Melco casino group of Macau, has boosted its public ownership to 11.84 percent, eliminating risks of trading suspension.

MIH, in a disclosure to the Philippine Stock Exchange on Friday, said a substantial stockholder had sold shares in the company, thereby complying with the 10-percent minimum public float required to remain listed on the PSE. Prior to this transaction, MIH had a public float of only 6.79 percent.

MIH complied with the requirement ahead of the Melco group’s tender offer to minority shareholders in early 2013. Melco, through its local holding firms, will make a tender offer at about P3.15 per share for MIH’s class A (open only to local investors) and at about P3.55 for its class B (open to both local and foreign investors) shares.

The tender offer period will run from Jan. 11 to Feb. 11 next year. Minority stockholders who will tender their shares will be paid in cash and in full on settlement date targeted by Feb. 18. The tender offer agent is ATR Kim Eng Securities.

Melco is a developer and owner of integrated resort facilities focused on the Macau market. Its “City of Dreams” complex is a highly successful project that houses a gaming facility, an upscale retail operation, restaurants and bars, and hotels such as Crown Hotel, Grand Hyatt Hotel and Hard Rock Hotel. The complex is also known for “The House of Dancing Water” show.

The Macau casino group—which is co-owned by Lawrence Ho Yau Lung, son of casino mogul Stanley Ho Hung Sun and Australian billionaire James Packer—is building its second integrated resort in Macau called “Studio City.” The group sees its experience in developing world-class integrated resorts such as the City of Dreams in Macau to allow it to take advantage of the anticipated growth in the leisure and tourism industries in the Philippines.

http://business.inquirer.net/100031/manchester-international-raises-public-ownership-to-11-84

Saturday, December 29, 2012

Stock News 2012: DOTC moves to address San Miguel-MIPC row

200 px (Photo credit: Wikipedia)

The Department of Transportation and Communications (DOTC) has come out with a compromise solution to the issue on the funding of the shared portion of two separate roads that will link highways north and south of Metro Manila.

The issue had put two of the country’s top conglomerates—San Miguel Corp. and Metro Pacific Investments Corp.—on a collision course that threatened to delay the implementation of their respective projects both seen as cornerstones of the Aquino administration’s economic agenda.

San Miguel Corp., through subsidiary Citra Metro Manila Tollways Corp. (CMMTC), plans to extend the Metro Manila Skyway from Buendia, Makati to Balintawak, Quezon City, creating a nearly-seamless link with North Luzon Expressway.

MPIC, for its part, has a pending proposal to connect the NLEx with the Skyway via an alignment that follows the existing Philippine National Railways line from Tondo, Manila to Makati.

MPIC, through Metro Pacific Tollways Corp., holds the concession to NLEx, while CMMTC holds the concession to the Skyway.

Transportation Secretary Jun Abaya this week said the compromise deal would be incorporated in CMMTC’s revised concession for the Skyway. The deal will also be part of the Department of Public Works and Highways “Swiss” challenge for MPIC’s proposed connector road.

CMMTC’s planned project is part of its original concession deal for the Skyway. MPIC’s project, however, is an unsolicited proposal to the government and will, therefore, have to undergo a “Swiss” challenge, where other interested parties will be given the chance to submit better offers.

Abaya declined to give further details on the compromise deal. Officials from both CMMTC and MPIC were not available for comment to confirm if the concerned parties had accepted the government’s compromise proposal.

Worth about P7 billion, the 5-kilometer extension will be shared by Citra and MPIC, before their respective connectors veer off to their separate alignments.

http://business.inquirer.net/100041/dotc-moves-to-address-san-miguel-mipc-row

Friday, December 28, 2012

Stock News 2012: UBS buying shares in Purefoods

Three keys logo by Warja Honegger-Lavater. (Photo credit: Wikipedia)

European investment bank UBS AG is buying 2.5 million shares of San Miguel Pure Foods Co. Inc. in exercise of the “overallotment” option provided under the food company’s recent equity offering.

In a disclosure to the Philippine Stock Exchange on Friday, UBS said it had recently exercised the option to take up more shares in Purefoods, which a month ago placed out 25 million secondary common shares erstwhile held by parent company San Miguel Corp. at P240 per share to boost its public ownership.

The P6-billion equity deal widened PureFoods’ public ownership to 15.08 percent from a meager 0.08 percent, meeting the requirement for continuing listing on the local stock exchange. The share sale was arranged by Maybank ATR Kim Eng Financial Corp., Standard Chartered and UBS.

UBS was given the option to take up more shares as the “stabilization agent,” which is mandated to temper price fluctuations. The 2.5 million “overallotment” shares account for about 1.5 percent of the food company’s total oustanding shares.

In line with this, UBS said it had so far purchased 752,780 shares pursuant to price stabilization.

Apart from eliminating the risk of trading suspension and eventual delisting from the PSE for Purefoods, the transaction allowed parent SMC to unlock fresh funds for its expansion.

http://business.inquirer.net/100007/ubs-buying-shares-in-purefoods

Sunday, December 23, 2012

Stock News 2012: Malaysian gaming firm threatens to sue PCSO

Philippine Gaming Management Corp. (PGMC), the local gaming unit of Malaysian conglomerate Berjaya, has accused the state-run Philippine Charity Sweepstakes Office (PCSO) of working relentlessly to bring down the Malaysian-led company.

PGMC legal counsel Jose Bernas accused the PCSO management of favoring a rival local lottery equipment provider at PGMC’s expense.

Bernas cited in particular the PCSO move to allow rival Pacific Online Systems Corp. to enter what it deems to be PGMC’s “exclusive” Luzon territory without any bidding being conducted.

He said the PCSO has been “relentless in its efforts to bring PGMC down, demanding [that we] reduce the rental rates on the lotto equipment we provided PCSO by as much as 50 percent, but giving Pacific Online, our competitor, better deals at our expense.”

All-out legal battle

In such a situation, PGMC said the Bejaya unit was ready to go on an “all-out” legal battle against the government agency.

Bernas accused the PCSO, led by chair Margarita Juico, of putting “in jeopardy” the Malaysian group’s investments through various “illegal measures.”

“We have all the documents to prove our allegations and we are now prepared to go all-out to expose what PCSO has been doing against a foreign investor and its local shareholders. We are doing this after exhausting all means to resolve these issues with the present PCSO,” he said.

PCSO general manager Ferdinand Rojas II explained that the reduction of the rental rates was based on a directive from the Senate blue ribbon committee.

On the “exclusivity” debate, he said the PCSO had its own position on the matter but would leave it to the courts to decide the case. As the case is now pending in court, he said a discussion on its merits would be sub judice.

Last October, PGMC filed a court petition to cite the PCSO in contempt for disregarding a writ of preliminary injunction issued in relation to a dispute on lottery operations in Luzon.

An injunction is an extraordinary remedy reserved for special circumstances in which the temporary preservation of the status quo is necessary.

Favored firm

PGMC is wholly owned by listed holding company Berjaya Phils., a unit of Malaysia’s Berjaya Group.

Pacific Online, the company that Bernas accused the PCSO of favoring, is led by businessman Willy Ocier and is the lottery equipment provider for the Visayas-Mindanao territory.

PGMC said that in 1993, it won the bidding for the entire Philippines to provide PCSO with lottery equipment. However, it said the government decided to award the Visayas-Mindanao territory to the losing bidder, now known as Pacific Online. PGMC was given only Luzon as its exclusive territory.

It noted that PGMC’s current contract with PCSO will end in August 2015 while Pacific Online’s contract will expire in March 2013.

Since Pacific Online has been allowed to install at least 600 terminals in Luzon since June, Bernas said the PCSO has effectively awarded Luzon, PGMC’s exclusive area, to Pacific Online and extended the latter’s contract without any bidding.

http://business.inquirer.net/98813/malaysian-gaming-firm-threatens-to-sue-pcso

Saturday, December 22, 2012

Stock News 2012: Palace OKs proposed gov’t takeover of MRT-3

Manila MRT-3 Train (type Tatra RT8D5) approaching Ayala Station in Makati City. Self-taken. (Photo credit: Wikipedia)

President Aquino has approved the Department of Transportation and Communications’ plan to take over the Metro Rail Transit Line 3, which was estimated to cost the government roughly $1 billion.

“It was approved yesterday (Monday) by the President and consented by the concerned Cabinet secretaries present in the meeting,” Transportation Secretary Jose Emilio Abaya said in a briefing on Tuesday.

Abaya said the President and the members of his Cabinet discussed and approved in principle the DOTC’s plan to buy out the private sector’s stakes in the commuter train system. Abaya said the “de-privatization” plan would cost the government about $1 billion.

The DOTC said the state takeover of the facility would spare the government from covering the 15-percent return on investment guaranteed to the MRT concessionaire.

MRT concessionaire Metro Rail Transit Corp. (MRTC), the consortium that built MRT-3, is controlled by Metro Pacific Investments Corp., the listed holding company in the Philippines of Hong Kong-based First Pacific group.

Although the government owns 80 percent economic interest in MRTC, through Land Bank of the Philippines and Development Bank of the Philippines, its voting rights are less than those held by the private concessionaire.

The consortium operating MRT-3, through special purpose vehicle MRT II Funding Corp., earlier raised funds via the issuance of MRT bonds. The bonds were bought by private corporations but were later bought back by DBP and LBP.

“We will be buying the bonds from DBP and LBP. It’s like retiring the bonds,” Abaya said. He added that the $1 billion estimated cost included the cost of buying back the bonds.

The buyout will take place next year, he said.

In the meantime, Businessman Manuel V. Pangilinan said his group would not stand in the way of the government’s planned buyout of the MRT line.

In an interview, Pangilinan said he would respect the government’s decision and would continue to support the administration’s infrastructure program.

The Pangilinan group, through Metro Pacific Investments Corp. (MPIC), owns the majority of the voting shares in MRT Corp., the private sector consortium that holds the train line’s concession contract. Despite controlling MRTC’s board, MPIC only holds a fraction of the MRT line’s economic benefits.

http://business.inquirer.net/98791/palace-oks-proposed-govt-takeover-of-mrt-3

Friday, December 21, 2012

Stock News 2012: PLDT selling SPi Global

The PLDT Logo (Photo credit: Wikipedia)

The largest Filipino-owned business process outsourcing (BPO) firm, SPi Global Holdings Inc., is set to be acquired by a foreign group as the former’s parent, Philippine Long Distance Telephone Co., looks to pare down its debts.

PLDT chairman Manuel V. Pangilinan said the company had found a preferred buyer to acquire 80 percent of SPi Global, which has over 18,000 employees in the Philippines and four other countries.

“It’s an excellent business and (SPi Global CEO Maulik Parekh) has done an excellent job increasing its value,” Pangilinan said in an interview on Tuesday.

“The decision to sell came when we were still negotiating to buy GMA 7. That deal never happened, but we decided to push through with the sale of SPI,” he told reporters.

Pangilinan said the buyer would acquire an 80-percent stake in SPi, while PLDT would keep the remaining 20 percent.

Pangilinan said the PLDT group was also willing to contribute to SPi’s future expansion.

The PLDT group also recently sold its 27-percent stake in PhilWeb Corp., a gaming firm controlled by the group of Roberto V. Ongpin, for $101 million.

“We already identified a preferred buyer and we are in the final stages of documentation,” Pangilinan said, adding that the buyer was a foreign private equity fund with existing investments in the BPO business. He, however, declined to reveal other details.

He said that while he believed SPi was a financially strong company, its impact on the PLDT group’s overall bottom line or share price was never significantly felt.

The PLDT group expects to post a P37-billion net income this year. PLDT is also the most valuable firm listed on the Philippine Stock Exchange.

Proceeds from the sale of SPi would be used to pay debts.

http://business.inquirer.net/98779/pldt-selling-spi-global

Thursday, December 20, 2012

Stock News 2012: Ayala seals Valenzuela land deal

English: Blank map of Valenzuela city in the Philippines divided into its legislative districts (district 2) (Photo credit: Wikipedia)

Property giant Ayala Land Inc. and the Gatchalian family have finalized a deal to develop 17 hectares of the latter’s “Plastic City” estate in Valenzuela City, envisioned to be redeveloped into a mixed-use urban complex in northern Metro Manila.

Philippine Estates Corp. (PHES), the Gatchalians’ property development arm, disclosed to the Philippine Stock Exchange on Tuesday the signing of an agreement with ALI’s Avida Land to develop the company’s properties in Valenzuela.

This deal comes about a week after the signing by PHES of a memorandum of agreement with ALI’s low-cost residential unit, Amaia Land, to likewise develop the former’s property in Cavite into a residential or subdivision project.

PHES is one of the owners of the property that Avida proposes to develop in Valenzuela. “The agreement signed is an initial step to move forward planning and developing the area,” a spokesperson from ALI said.

The 17 hectares covered by the deal is part of the Gatchalian family’s 60-hectare former plastics manufacturing hub, but ALI president Antonino Aquino said the Ayala-controlled real estate firm was interested to develop the entire area under a mixed-use masterplan.

But Aquino said the plan would be to pursue the development in parcels.

The Gatchalian’s Plastic City Industrial Corp. (PCIC) has long ceased its plastics manufacturing and commercial operations due to continued losses, but its subsidiaries have leased out its warehouse and building facilities in the estate.

ALI had been in talks with the Gatchalians for over a year for the development of the property in Valenzuela, which has a lot of spending power especially because it has a number of large industrial manufacturers as locators.

Through these property deals with the Ayala group, the Gatchalian family, for its part, seeks to unlock more values from its real estate assets, taking advantage of the robust property market in the country.

It was earlier reported that the redevelopment planned by the Gatchalians for Plastic City would include an educational complex envisioned to be a smaller version of the UP technohub in Quezon City. It also aims to build office space that will attract business process outsourcing (BPO) companies, banking on expectations that more and more BPO locators will move outside the main central business districts in search of other hubs around Metro Manila.

Part of the proposed master plan is likewise to put up a new hospital to serve Valenzuela City. The residential portion is envisioned to offer townhouses and condominiums for different market segments.

http://business.inquirer.net/98799/ayala-seals-valenzuela-land-deal

Wednesday, December 19, 2012

Stock News 2012: Meralco sees 7% sales growth

Meralco Bolts logo (Photo credit: Wikipedia)

Manila Electric Co. (Meralco), the country’s biggest power distributor, expects its electricity sales to grow by 7 percent this year, faster than the 1 percent posted a year ago.

For 2013, however, Meralco has set a more conservative sales growth target of 4 to 5 percent, which approximates the average yearly growth of the utility, according to Meralco president Oscar S. Reyes.

Reyes said the expected growth in 2012 was largely boosted by the “healthy pickup of [electricity] demand by industrial consumers,” particularly the semiconductor sector, construction related industries like steel and plastic, and the food and beverage industry.

“There’s a clear indication that industrial growth is healthier now than it was last year,” Reyes explained.

“Commercial demand has also been quite healthy and that’s a result of, I think, the continuous building of new malls and entertainment centers,” he added.

The electricity demand of Meralco’s residential customers, according to Reyes, posted a “decent” growth, due to the healthy inflows of remittances from overseas Filipino workers and increase in private consumer spending.

With the projected growth in sales, Meralco expects its 2012 net income to hit P16 billion.

For 2013, Reyes noted that the 4 to 5 percent growth target was based on the fact that the “fundamentals are there for the continued robust growth of the economy because there’s over P21 billion in OFW remittances, over P13 billion in BPO remittances, and we have private direct investments, on top of portfolio money flows.”

“[Those inflows] drive both private consumption spending and capital investment,” he said.

The elections next year are likewise expected to help perk up electricity demand, he added.

Reyes, however, noted that more than just the growth targets, the main concern right now should be the ability of the country to meet the rising demand for electricity.

http://business.inquirer.net/98449/meralco-sees-7-sales-growth

Tuesday, December 18, 2012

Stock News 2012: Philodrill sees P2B profit

The Terra Nova Oil Project (Photo credit: Wikipedia)

Exploration firm The Philodrill Corp. is targeting to breach the P2-billion net income mark in two to three years’ time as it anticipates higher revenues from the doubling of oil production at the Galoc oil field in offshore Palawan.

Philodrill executive vice president Francisco Navarro said the second phase of development for the Galoc field would not only extend the life of the field to 2020, but also more than double the daily oil production to anywhere between 10,000 and 12,000 barrels of oil a day (bopd) from the current 5,000 bopd.

For the second leg of development, the members of the consortium operating Service Contract 14C-1, which operates the Galoc field, are investing a total of $188 million (about P7.5 billion). Of the amount, Philodrill is spending a little over 7 percent, or $13.16 million (or about P526 million).

“We have funding already available. We’re not borrowing. The drawing down of funds has already begun because the long lead items needed for the drilling are being acquired earlier. We expect drilling to start by the third quarter of next year,” Navarro said.

The Phase II development for the Galoc oil field involves the drilling of two subsea wells, which will be tied back to the existing floating production, storage and offloading (FPSO) facility. There is also an option to drill a third well on the Galoc North prospect following the completion of the two development wells.

For 2012, Navarro disclosed that Philodrill expected its net income to hit only P300 million to P400 million, about 60 percent lower than the P1.04 billion in net profit it posted in 2011. The decline was attributed largely to the shut-down of the Galoc oil field. Field operator Galoc Production Co. had shut down its operations at the Palawan oil field late last year for an upgrading work and was able to resume production only in the first week of April.

Philodrill, however, was expected to further increase its income next year to about P1 billion, which it might double by either 2014 or 2015 with the new wells at the Galoc already producing at optimum levels, Navarro added.

http://business.inquirer.net/98499/philodrill-sees-p2b-profit

Monday, December 17, 2012

Stock News 2012: Robinsons Magnolia Is ‘Green Mall’

Fotoloco Smart Parenting @ Robinsons Magnolia Grids 245 (Photo credit: FOTOLOCO!)

Robinsons Magnolia Mall, which was opened recently, has been certified as a green infrastructure by the local government of Quezon City, making it the “First Green Mall Building” in the country’s most populous city.

In a statement, the Gokongwei-led Robinsons Land Corp. said the four-level retail complex was awarded the certificate in ceremonies in City Hall. It was found to have strictly adhered to the stringent standards set under the city government’s Green Building Ordinance of 2009, which requires the design, construction or retrofitting of building, other structures and movable properties to meet minimum standards of a green infrastructure.

The awarding of the green building certification now makes the Robinsons Magnolia Mall, located along the bustling corner of Aurora Boulevard and Hemady Street, a showcase of sustainable development practices.

According to Arlene G. Magtibay, Robinsons Malls’ General Manager, “We are very glad that Robinsons Magnolia has been certified as Quezon City’s first Green Mall Building. We have always been concerned that our developments work with and not against the environment, and we are happy that the QC government shares the same vision and has recognized our efforts towards this common goal.”

Magtibay said that RLC’s 32nd mall was installed with skylight and glass curtains that allow natural lighting, a move that is expected to rake in huge energy savings for the company.

To further reduce its carbon footprint, Robinsons Magnolia Mall used the more energy efficient colored LED (light emitting diode) light fixtures for the façade.

Compared with normal high wattage metal halide lamps, the LED lighting saves 50 percent in energy consumption.

In the interior, the mall resorted to high efficient light fixtures that saves energy by 30 percent.

Robinsons Magnolia likewise treats the wastewater coming from its sewage treatment plant (STP) and recycles the wastewater for use in cleaning, flushing toilets and irrigation. It has installed rainwater collectors which help reduce its usage of fresh water.

http://www.mb.com.ph/articles/384175/robinsons-magnolia-is-green-mall#.UMKGS-Smj3w

Sunday, December 16, 2012

Stock News 2012: BDO Keen On PNB Acquisition

Philippine National Bank (Photo credit: Wikipedia)

The SM group of companies is making a bid for the acquisition of a stake in Philippine National Bank and its possible merger with BDO Unibank Inc. as talks between PNB and Bank of the Philippine Islands remained inconclusive.

In an interview SM Investments Corporation chief finance officer Jose Sio said they are in discussions with PNB’s principal shareholder Lucio Tan for a possible investment in PNB.

“We are always interested in making investments for as long as it will help us grow,” Sio said adding that BDO chairperson Tessie Sy has a good relationship with Tan.

However, Sio laughed off market talk that BDO has offered to acquire a stake in PNB at R150 per share. “Well I heard market talk saying we offered R200 per share,” he countered. PNB last traded at R92.70 per share.

Sio said the price will have to be determined after they look into the quality of PNB’s assets although he noted that the bank has a good land bank of prime properties. The SM group is also in real estate, particularly malls and residential buildings.

Bank of the Philippine Islands and PNB have earlier asked the Philippine Stock Exchange to suspend the trading of their shares as they disclosed that their principals are in discussion for a possible merger.

However, the banks eventually asked the PSE to lift the trading suspension since no deal has been made.

It was reported that PNB may have received counter-offers from other banks since a merger between BPI and PNB may translate to market leadership, dislodging BDO as the top bank and Metrobank as the second largest lender in the country.

Analysts had said that a merger between BPI and PNB would have triggered a new wave of merger and acquisitions (M&As) in the local banking industry.

Once a merger between BDO and PNB pushes through, this would further cement BDO’s position as the country’s biggest bank.

COL Financial research head April Tan Lee noted that, in the 1990s, there was a wave of M&As after Equitable Bank merged with PCI Bank.

“I think what happened was that Metrobank bought all these banks afterwards to maintain its number one position,” Lee said adding that, “The question today is, will that trigger more consolidation from big names because they want to maintain their lead?”

http://www.mb.com.ph/articles/385912/bdo-keen-on-pnb-acquisition#.UMKFQuSmj3w

Thursday, December 13, 2012

Stock News 2012: New sin tax measure

English: A few bottles of Koval distilled spirits, from Koval Distillery in Chicago, Illinois, USA. (Photo credit: Wikipedia)

Members of the Senate and House of Representatives to the bicameral conference committee on Tuesday morning signed the sin tax reform measure that aims to bring more government revenues estimated at P 33.96-billion in 2013.

Sen. Franklin Drilon, acting chairman of the Senate ways and means committee chairman, said the total incremental revenue for the first year of implementation of the tax measure would be P23.4 billion from tobacco products and P10.56 billion from alcohol or a total ofP33.96 billion.

As of press time, the House representatives of the bicameral committee who have signed the report were House majority leader Neptali Gonzales II and Representatives Henedina Abad, Jocelyn Limkaichong, Eric Singson, Luis Villafuerte, and Arnulfo Fuentebella.

The senators who have signed were Drilon, Sergio Osmena III, Panfilo Lacson, and Pia Cayetano.

Lawmakers agreed that for cigarettes packed by hand, the tax that will be imposed by January 1, 2013 will be P12/pack; P15/pack by 2014; P18/pack by 2015; P21/pack by 2016 and a unitary rate of P30/pack by 2017.

The four percent increase of the P30/pack rate will kick off by 2018, and every year thereafter.

For cigarettes packed by machine, there is a cut off for net retail price (NRP) for prices of P11.50 and below and those priced P11.50 and above.

For P 11.50 and below, the excise tax that will be imposed will be P12/pack effective Jan. 1, 2013; P17/pack by 2014; P21/pack by 2015; and P25/pack by 2016.

Effective January 1, 2017, there will be a unitary rate of P30 per pack, and the four percent increase will kick off on January 1, 2018.

For fermented liquors such as beers, the two-tier rate will be based on an NRP of P50.60 or less that will have a tax of P15/per liter; and P50.60 and above, P20/per liter in 2013.

By 2014, fermented products priced at P50.60 or less will be imposed with P17/liter; P19/liter in 2015; P21/liter in 2016. By 2017, all beer regardless of NRP will have a single rate of P 23.50 per liter.

For distilled spirits, a specific tax of P 20 per proof liter and P15 of NRP, per proof liter in ad valorem tax will be imposed effective January 1, 2013. By 1025, there will be a 20 percent increase of NRP per proof liter, depending on the bottle. By 2017, ad valorem taxes for distilled liquor will increase as the NRP increases.

http://philstar.com/headlines/2012/12/11/884842/senators-congressmen-sign-new-sin-tax-measure

Wednesday, December 12, 2012

Stock News 2012: Manulife premiums up 60%

Insurance (Photo credit: Christopher S. Penn)

Manulife Philippines has reported a 60-percent growth in total premiums and deposits in the first nine months of 2012.

Total funds under management ballooned to a record P58.5 billion, while wealth sales increased 169 percent.

Total premium income reached P4.98 billion in 2011 based on data coming from the Insurance Commission (IC). That implies that premium income, including deposits, is around P7 billion end September this year.

The Asia Pacific Bond Fund (APBF) contributed significantly to the insurer’s AUMs despite having been launched in October 2011.

As of end-September 2012, APBF turned out a 7.06-percent return year-to-date – an impressive feat relative to similar funds. This is also much better than time deposit rates offered by most banks at currently below one percent.

APBF is available through Manulife Philippines’ dollar-denominated single pay (Affluence Max/Affluence Max Gold) and regular pay (Affluence Builder series) variable life products.

As of end-September 2012, total subscriptions amounted to $26 million for the fund.

According to Manulife Philippines president and chief executive officer Indren Naidoo, insurance sales in the third quarter were stimulated by the availability of new endowment and whole life products.

Endowment and whole life products are protection products that usually result in recurring business as payments are generally paid over a long period of time, in contrast to onetime or single pay premium products.

“The enhanced anticipated endowment are the Freedom series for the agency channel and MoneyMax series for the bancassurance channel, and whole life or the Seasons 100 for the agency channel and Legacy Protect 100 for the bancassurance channel products with financial protection coverage and guaranteed benefits,” Naidoo explained.

Total policies-in-force stood at nearly 400,000.

The Manulife Philippines chief executive said that the insurer expanded close to 4,000 agents primarily due to its rapid and aggressive branch office expansion throughout the country.

http://philstar.com/banking/2012/12/11/884484/manulife-premiums-60

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Thursday, December 13, 2012

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Wednesday, December 12, 2012

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