Wednesday, January 26, 2011

San Miguel wants steep premium for share sale

Share sale eyed within Q1

MANILA, Philippines - San Miguel Corp. plans to price a share offer in the first quarter at a steep premium to the current market price, its president said, setting it at a level that would raise more than P200 billion.

The issue would be priced at more than P200 ($4.5) per share, 20% or more above Wednesday's closing price, San Miguel president Ramon Ang said.

In December, Ang said the sale would be at least 1 billion shares.

San Miguel shares fell as much as 2.2% on Wednesday before erasing its losses to end flat at P160.5.

They have more than doubled since late October, and hit a peak of P189.5 early this month.

"Definitely," Ang said when asked about a share price of more than P200. He had said last year the shares may be sold at P150 to P200 apiece.

Given Ang's estimate, the offer would raise more than P200 billion ($4.5 billion) for San Miguel, dwarfing the country's biggest initial public offer in dollar terms, a listing of just over $600 million by Cebu Pacific last October.

San Miguel said the money would help fund further investments in power, infrastructure, mining, telecommunications -- the areas it has entered into in the past 3 years or so as it diversifies away from its traditional food and beverage businesses.

It is not clear how the sale would be organized.

The offer is seen to increase San Miguel's public float, which is below the 10% minimum threshold. The low free float level triggered San Miguel's removal from the roster of blue chip firms making up the benchmark Philippine Stock Exchange (PSE) index.

The PSE has said it was giving listed companies one year to comply with the minimum public float rule without incurring penalties.

Amid price hikes, Aquino open to amending Oil Deregulation Law

MANILA, Philippines - President Aquino is open to amending the Oil Deregulation Law amid the almost weekly price increases by most oil companies.

“I think it was in my first term [that] I first mention that I really was wondering, how come they all increase their prices to the same level and roughly at the same time?" he told reporters on Jan. 26.

"There should have been different efficiencies that would have produced the price factors. So that is, I guess, an aspect that I want to really study further,” Aquino said after attending the Tenth Biennial Conference of the International Council of Universities of St. Thomas Aquinas (ICUSTA) at the University of Santo Tomas campus.

He also said he is open to a suggestion for the Palace to sit down with private oil firms for a possible 30-day 'waiting period' before implementing a price hike.

"That seems to be a good suggestion. We will have to consult the oil companies. As you know, [the] price of oil in the world market -- by information -- keeps on increasing. So perhaps that can be a formula that can meet their needs and also meet our desire to keep the prices more reasonable," President Aquino told reporters

In a statement on Jan. 25, Sen. Ralph Recto said the 30-day 'waiting period' "would give motorists and other oil-dependent sectors some breathing space before another price shock hits them."

“The weekly price increases are now taxing the patience and wallets of the public. The government could temper the accumulating national outrage by appealing to oil companies to do their increases every 30 days,” wrote the Senate ways and means chair and energy panel senior member.

The senator also noted that the waiting period coincides with the first-in-first-out policy in accounting for oil inventory. This means that oil stocks bought at lower prices or before any upward global price movement should be the first stocks to be sold to the public.

Analysts have warned that continuous oil price hikes will soon impact cost of goods and services in the country.

The oil price hikes hit consumers after the Aquino administration gave its nod to other transportation-related increases, such as toll rates and train fares.

The government targets an inflation rate within the 3% and 5% range in 2011.

Thursday, January 20, 2011


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Tuesday, January 18, 2011

UN forecasts 2011 Philippine growth at 4.6%

MANILA, Philippines - The economic growth of the country will likely slow to 4.6% this year before picking up to 5.1% in 2012 as a global deceleration continues, the United Nations on Jan. 18.

The country forecasts, contained in the UN’s World Economic Situation and Prospects 2011 report released on Tuesday, are lower than the government’s 7-8% target and the 5% assumed in this year’s budget.

It is also lower than World Bank’s 5% and 5.4% outlooks for 2011 and 2012, respectively, that were announced last week.

The UN, which expects the Philippines to have grown by 6.8% last year -- above the 5-6% target -- said East Asian economies should expect growth to moderate this year as external demand weakened. The region’s exports, which rebounded last year, could "slow down markedly in 2011."

Growth forecasts for the region were set at 7.2% and 7.4%, respectively, for this year and the next, while those for the world were set at 3.1% for 2011 and 3.5% for 2012.

"Weaknesses in major developed economies continue to drag the global recovery and pose risks for world economic stability in the coming years," the UN said.

While East Asia had managed to rebound from the global economic crisis, downside risks exist in the form of rapid short-term capital inflows.

"These capital flows lead to exchange-rate pressures, while also increasing the risk of asset price bubbles and of accelerating inflation," the report said.

International coordination, the UN said, is needed to avert a renewed downturn. Five policy challenges were identified: continued and coordinated stimulus, a redesign of fiscal policy, more effective monetary policy and the need to address global spillover effects, access to funding for the Millennium Development Goals (MDGs), and concrete and enforceable targets.

A sidebar in the report noted that the Philippines needed to spend 1-1.5% of its GDP annually between 2010 to 2015 to meet the MDG goals for education, health and basic social services.

The report also forecast higher inflation of 4.2% this year and in 2010, from 3.9% last year -- the full-year figure is actually 3.8%. Unemployment was expected to have hit 7.4% last year.

Sought for comment, NEDA Deputy Director-General Augusto B. Santos claimed the country was not as export-dependent compared to neighbors such as South Korea and Taiwan.

"While our exports may decline... I don’t think we will be much affected," he said.

A slowdown, however, will still occur this year, said Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr.

"We are projecting a growth of 11% as compared to more than 30% in 2010," he said.

BSP sees no need to raise rates

MANILA, Philippines - The central bank sees no need at present to raise interest rates or tighten other policy settings, with inflation seen moderate in the near term despite rising global fuel and food costs, Governor Amando Tetangco said.

Emerging price pressures, such as in food and energy, prompted the Bangko Sentral ng Pilipinas's (BSP) to raise its inflation forecast for 2011 to 3.6% from 2.35% at a policy review last month, when it left its key interest rate at a record low of 4%.

"There is no urgent need for the BSP to raise interest rates at this time because the inflation outlook continues to be within the inflation target for the next two to three years," Tetangco told Reuters in an interview on Tuesday.

The revised central bank inflation forecast is consistent with the government's target range of 3% to 5%.

"Right now, the way we see it, the situation is manageable and the potential spillover will continue to be limited, and inflation expectations are still consistent with the medium-term inflation target of 3% to 5%," Tetangco said.

Food inflation has risen to the top of the agenda for many policymakers with memories still fresh of the 2008 food crisis, when soaring prices sparked riots in several countries, high inflation and in several cases deep trade deficits.

Governments around the world have been taking measures to tackle soaring grain prices, with China dumping plans to import several million tonnes of expensive corn, and South Korea cutting import tariffs on some products.

Inflation pressures

The Philippines on Thursday said it would suspend import duties on wheat and cement imports.

Tetangco said monetary policy could not address supply-side factors that were generating inflation pressures, noting that in 2007 and 2008, the BSP had not responded to first-round effects of rising food and fuel prices.

"If there are second-round effects that are beginning to emerge, such as the possibility of increase in wages, then I think there is scope for monetary policy to consider a change in the stance if there is a threat to meeting the inflation target."

In 2010 inflation was 3.8%, at the low end of the government's 3.5% to 5.5% target range. A Reuters poll last month found analysts expect inflation of 4.2% in 2011.

The Philippines is one of few countries in the region not to have raised rates since the end of the global financial crisis and says it can continue to do so as long as inflation is benign.

But with the economy having gathered steam and price pressures expected to grow, analysts believe the central bank will start raising rates towards the middle of the year.

BIR closes down 475 stalls in 5 malls

MANILA, Philippines (UPDATE) - The Bureau of Internal Revenue (BIR) on Tuesday broke the record for single-day closures under its Oplan Kandado (OK) Program after it shut down 475 stalls in 5 popular malls in Manila due to various tax violations.

The government's main tax agency said it closed down 208 shops in Binondo, including 85 stalls in the 168 Mall, 108 in the 999 Mall, and 15 in the 1188 Mall.

In Tondo, a total 267 business establishments -- 160 at the Tutuban Center and 107 at the New Divisoria Mall -- were padlocked.

The 475 businesses were shut down mainly because of their failure to register their operations with the BIR in spite of having been served notices.

BIR Deputy Commissioner for Operations Nelson Aspe, who signed the closure orders, said some shops were not issuing official receipts and paying the value-added tax.

“This should serve as a strong warning to all recalcitrant business operators. As long as they do not comply with the requirements of the Tax Code, we will spare no one from being closed under the OK Program of the BIR. This will go on until everybody has learned their lessons," Aspe said.

BIR Deputy Commissioner Estela Sales echoed the same sentiment. "This is just an administrative remedy (closures). If we find compelling reasons like substantial underdeclarations in their income/sales, we will file the necessary charges in court under our Run After Tax Evaders (RATE) Program. So heed our call and be spared of the dire consequences of non-compliance with our requirements.”

The BIR has estimated it was losing P100 million to P200 million in yearly revenues from the 475 shops alone.

Mall owners, meanwhile, welcomed the BIR's move to weed out non-compliant tenants. They assured that they would coordinated with the tax bureau regarding such efforts.

The BIR said it would be inspecting all malls throughout the country as pursuant to the OK program under the leadership of BIR Commissioner Kim Henares.

Friday, January 14, 2011

5 found guilty of graft in megadike case

MANILA, Philippines - Former Public Works Secretary Florante Soriquez and 4 other DPWH engineers were found guilty of graft for alleged criminal negligence in connection with the failure of a section of the P38.29 million Pampanga Megadike on August 3, 1996 that buried 3 towns under water and lahar.

In an 80-page Decision penned by Associate Justice Roland B. Jurado, the Sandiganbayan Fifth Division on Friday sentenced Soriquez and project supervising engineers Rey S. David, Ulysis Manago, Juan M. Gonzales and Gil A. Rivera to 6-9 years imprisonment with perpetual disqualification from holding public office.

They were also ordered to indemnify the government in the amount of P12.7 million corresponding to the cost of the construction of the megadike section that collapsed.

Associate Justices Teresita V. Diaz-Baldos and Napoleon E. Inoturan concurred with the ruling.

Soriquez was program director of the Mt. Pinatubo Rehabilitation – Project Management Office (MPR-PMO) when the megadike failed.

“The prosecution was able to prove that accused Soriquez, and DPWH engineers were inexcusably negligent in implementing the megadike project. Obviously, accused program director and DPWH engineers and inspector failed to comply with these rules (on construction specification). If they had so complied, they would have known the volume of lahar and floodwater it could contain, the structure’s stability or whether or not seepage may occur,” the court declared.

Private defendants Ariel T. Lim, chief executive officer of contractor Atlantic Erectors Inc., and his co-officials Neil Allan T. Mary, Alberto Teolengco and Remigio Angtia Jr. were acquitted for lack of evidence.

Prosecutors questioned why the MPR-PMO, the agency tasked to oversee the project, released payment of P12.7 million to Atlantic Erectors despite the contractor’s non-compliance with structural standards.

But in a separate decision last October 13, the graft court’s First Division acquitted DPWH Bureau of Design director Bienvenido C. Leuterio; Engineers Gregorio O. Carillo, Gilberto S. Reyes, Pedro P. Tercino, Raymundo G. Adawag and Darius F. de Guzman; DPWH-BoD Hydraulic Division chief Sofia T. Santiago; and Design Section officer-in-charge Ramon F. Velasquez, saying it is more inclined to believe that the damage was caused by faulty construction rather than poor design.

Plunder complaint vs Ampatuans filed

MANILA, Philippines - Seven relatives of victims of the Maguindanao massacre filed a plunder complaint on Friday against 25 members of the powerful Ampatuan clan.

Included in the complaint filed at the Ombudsman are former Maguindanao Governor Andal Ampatuan Sr., massacre primary suspect and former Datu Unsay Mayor Andal Jr., former Autonomous Region in Muslim Mindanao Governor Zaldy and their wives and siblings.

Others named in the complaint are: Sajid Ampatuan, Anwar Ampatuan, Yacob Ampatuan, Akmad Ampatuan, Rebecca Ampatuan, Jehan-Jehan Ampatuan, Laila Ampatuan, Baibon Shahira Ampatuan, Bai Farida Ampatuan, Ameera Ampatuan, Michelle S. Ampatuan, Alibai Ampatuan, Shaydee Ampatuan, Bai Zandra Ampatuan, Bai Honee Ampatuan, Lady Sha-Honey Ampatuan, Bhanarin Ampatuan, Soraida Ampatuan, Zandria Sinsuat-Ampatuan, Michael A. Sulaik, Joemar Ayunan Olimpayan, And Kuzberi Lumenda Ampatuan,

The complaint is based on the investigative report of journalist Carol Arguillas who works for MindaNews in Davao.

The complainants are Ramonita Salaysay, Editha Mirandilla Tiamzon, Juliet Palor Evardo, Ma. Cipriana Gatchalian, Arlyn Lupogan, Catherine Nuñez and Myrna P. Reblando.

The complainants are seeking that the Ombudsman charge the named members of the Ampatuan clan for violation of the application provisions of Republic 7080 or Anti-Plunder Law, Republic Act 1379 or Forfeiture Law and Republic Act 3019 or Anti-Graft and Corrupt Practices Act among others.

Listed in the complaint are 35 mansions owned by the Ampatuans in Davao alone. Eight of these are reportedly owned by Andal Sr., 16 by Andal Jr., and two by Anwar. Sajid and Rebecca own 3 houses each.

While the Davao City Assessor’s office has no record of Zaldy owning any house, it is believed he owns a mansion in Juna Subdivision. Zaldy's wife, Bongbong, owns two houses in Davao.

The properties are estimated to be worth P110 million.

Arguilles also discovered that the Ampatuans have 121 vehicles.

Fifty-three are new models of luxury cars, including 3 Hummers, 3 Land Rovers, 2 Suburbans, and 1 Humvee, a military vehicle.

Twenty-six of the vehicles are registered under the name of Andal Sr. but more than half of the cars found in the warehouse of Andal Sr.’s mansion in Maguindanao last December 2009 are not registered with the Land Transportation Office.

The Ampatuans' properties and vehicles combined could be worth P200 million.

The complaint does not include the Ampatuans' assets in Maguindanao, Cotabato City, Sultan Kudarat and Manila.

The victims' relatives who filed the complaint want the government to freeze and retrieve the Ampatuans' assets.

This is not the only plunder case the Ampatuans will have to face. Another group of victims' relatives is also preparing another case.

BIR to tax listed firms below 10% public float rule

MANILA, Philippines - The Bureau of Internal Revenue (BIR) is imposing the capital gains tax on stock transactions involving publicly listed firms that do not comply with the minimum public float rule.

On Friday, stock market players were informed belatedly of the BIR’s move in a notice posted on the Web site of the Philippine Stock Exchange (PSE). The Securities and Exchange Commission (SEC) got the letter from the BIR on Dec. 28, and forwarded it to the PSE on Jan. 3. The date stamp showed the letter was received by the bourse only last Jan. 5.

The BIR said it wanted to collect the capital gains tax beginning Jan. 1, pointing out that many PSE firms could no longer be considered publicly listed, and therefore no longer entitled to tax perks. The PSE required listed firms to maintain their public float, or the level of public ownership, at 10%, late last year, and gave those that did not meet the threshold a grace period of one year.

"In order to qualify as a publicly listed company, initial public offering (IPO) requirement is set between the range of 10% to 33% depending on the market capitalization, as such all listed companies should maintain nothing less than their initial public offering as continuing listing requirement," the BIR said in its letter to the SEC.

Currently, the PSE requires firms seeking to go public to have a 33% float or P50 million worth of shares, whichever is higher, for companies with a market capitalization not exceeding P400 million. The minimum float is 25% or P100 million worth of shares, whichever is higher, for those with market capitalization of more than P400 million up to P1 billion; 20% or P250 million worth of shares, whichever is higher, for those with market capitalization of more than P1 billion up to P5 billion; 15% or P750 million worth of shares, whichever is higher, for those with market capitalization of more than P5 billion up to P10 billion; and 10% or P1 billion worth of shares, whichever is higher, for those with market capitalization of more than P10 billion.

"Listed companies should continually maintain, if not surpass their IPO requirement to continually enjoy the preferential tax rate of 1/2 of 1% of gross selling price of gross value on money on disposals by stockholders of publicly-listed shares through the exchange," the BIR said.

Erring companies will be subject to the 5-10% capital gains tax, the BIR said.

The capital gains tax is defined by the BIR as the tax imposed on "gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets located in the Philippines."

The BIR said it would strictly impose the rule starting Jan. 1. This will provide liquidity to investors, ensure fair prices, guard against manipulation of prices, and serve as a "tool for redistribution of wealth in the general public," the BIR said.

The tax agency also told the SEC that 50% of the value of the outstanding capital stock of listed firms should not be held by less than 20 individuals.

Moreover, since SEC rules require that independent directors occupy 20% of a listed firm’s board seats, the public float should be at a minimum 20%. This is in conflict with the existing 10% public float requirement of the PSE.

The PSE, the country’s only stock exchange, has 253 listed firms and 133 active trading participants. Forty companies have yet to comply with the 10% public float rule.

Belle taps Resorts World for $1-B gaming complex

MANILA, Philippines - Upscale leisure developer and gaming firm Belle Corp. and Leisure Resorts World Corp. (LRWC) formalized on Jan. 14 their partnership with the signing of an agreement.

The agreement mandates LRWC to operate and manage the gaming component of a planned $1-billion integrated resort complex along Roxas Boulevard to be called Belle Grande Manila Bay.

In a briefing, Belle vice-chairman Willy N. Ocier said the management contract with AB Leisure Global Inc., a subsidiary of LRWC, is good for 10 years and renewable by consent of the two parties.

When asked about the revenue sharing, Belle executive vice-president and chief finance officer Manuel Gana said LRWC shall get 15% of net income or 50% of EBITDA (earnings before interest, taxes, depreciation and amortization), whichever is higher.

Sources said Belle is seen to post around P1.5 billion in net income next year with the first full year operations of its planned multi-billion peso casino complex, which is expected to be almost double the size of Resorts World Manila, a luxury casino resort located in Newport City across the Ninoy Aquino International Airport.

Belle wholly owns Premium Leisure & Amusement Inc. (PLAI), which was granted a provisional license by the Philippine Amusement & Gaming Corp. to establish a casino to be located within the reclaimed Manila Bay.

For the past three years, Belle has been earning P300 million to P400 million in net income a year from Highlands Prime, plus equity earnings from Pacific Online Systems Corp., the exclusive online lottery equipment provider in Visayas and Mindanao.

Slated for soft opening in the fourth quarter this year, the casino complex will make available 15,000 to 20,000 square meters of gaming space in the next three years with a total of 1,600 slot machines, 300-320 tables and 1,500 hotel rooms.

Ocier said the group is still looking for a partner to operate the hotel as part of its plan to lure more gaming enthusiasts in the country.

He said Macau-based gaming consultancy firm Asia Pacific Gaming (APG) will provide management expertise.

APG has extensive experience managing casinos and hotels in Macau and throughout the Asia Pacific region. It has been engaged by clients in South Korea, China, Macau, Philippines, Australia, New Zealand, Vanuatu, Tahiti and the United States.

Belle is considering tapping the debt market or equities market to fund the construction of Belle Grande Manila Bay. It earlier obtained a P5.6-billion loan from Banco De Oro.

Together with the SM Group, Belle has committed to inject $1 billion into the project over a 25-year period. The SM Group will be in charge of non-gaming developments which include hotels, a sports arena, museum and an oceanarium.

Friday, January 07, 2011

PNoy to tap Mar as 'chief troubleshooter'

MANILA, Philippines - President Benigno Aquino III will tap the services of former Senator Mar Roxas in an official capacity when the one-year ban against appointing losing candidates in the elections ends.

The president did not name the exact position he will give to Roxas, saying the defeated vice-presidential bet will serve as one of his top “troubleshooters.”

“I-the-thresh out pa ang details. It will take effect June 30, yung end of the ban. Pero I will really be tapping his expertise on so many aspects. He might be one of my chief troubleshooters. If there’s something that needs more intense attention, I might ask him to do that, if he is willing,” President Aquino told reporters after hosting the traditional New Year’s vin d’ honneur in Malacañang.

Roxas has been serving in the Aquino administration in an unofficial capacity.

Interviewed by ABS-CBN in September, Roxas said he helps the President whenever he is asked. “Kung ano ang iutos [ng Pangulo],” he said in an interview.

Moody's upgrades Philippines outlook to positive

MANILA, Philippines (UPDATE) - Moody's Investor Services upgraded the outlook on the Philippines' foreign and local-currency bond ratings to positive from stable on Thursday, a day after the government sold $1.25 billion of global peso bonds.

A rating upgrade would depend on the government's commitment to fiscal consolidation in an improving economic environment, the ratings agency said in a statement.

"Most likely, this will require continued expenditure restraint and improved revenue performance," Moody's said, noting the government had made a "notable turnaround in fiscal management" in its first 6 months in office.

Moody's rates the Philippines at Ba3, 3 rungs below investment grade. An investment grade rating would lower the costs of borrowing and servicing debt for the country, and would also widen the pool of potential investors in its bonds.

The Philippines, Asia's largest sovereign issuer of foreign currency debt, sold $1.25 billion of 25-year global peso bonds on Wednesday.

Strong economic fundamentals

Moody's cited a strengthening external payments position, well-anchored inflation expectations and improved prospects for economic reform as behind the outlook upgrade.

"Foreign exchange reserves continue to accrue at record levels on the back of robust overseas foreign worker remittances, services exports, and sizeable capital inflows," said Christian de Guzman, an Assistant Vice President at Moody's and its lead sovereign analyst for the Philippines.

"The BSP's (central bank) inflation targeting regime has gained traction and has contributed to macroeconomic stability," he added.

Prospects for greater political stability following the unambiguous outcome of the May 2010 national elections also added momentum to resilient economic growth by encouraging more foreign direct investments and boosting domestic consumer confidence.

De Guzman said the government also posted a turnaround in fiscal management in the first semester of 2010, but its debt stock remains large compared with its rating peers.

Gov't hopes for rating upgrade

Meanwhile, the Aquino administration welcomed Moody's outlook upgrade, saying it came at a time when the outlook for many other economies was more cautious.

"Moody's action reflects the international markets' recognition of the improving fiscal and monetary conditions in the country," Presidential Communications Strategy Secretary Ricky Carandang said.

"The Aquino administration is encouraged by this development and is continuing its efforts to improve the environment for both portfolio and direct investments," he added.

Carandang, along with National Treasurer Roberto Tan, said the government was looking forward to an actual rating upgrade from Moody's.

"We hope with this favorable outlook change, an upgrade is forthcoming in the near future," Tan said.

In November, another debt watcher, Standard & Poor's, raised the Philippines' foreign currency rating to BB, 2 notches below investment grade. Fitch Ratings also rates the country 2 notches below investment grade.

Lower budget deficit

The government has said the budget deficit for 2010 would be lower than a forecast of P325 billion, or 3.9% of GDP. It has forecast the deficit will fall to 2% of GDP by the end of 2013 and then be maintained at that level.

Before the change was announced, Finance Secretary Cesar Purisima said the Philippines deserved a ratings upgrade.

"I think it's a matter of time that, so long as we continue to focus on the fundamentals, good things will happen," he told reporters.

"As far as I'm concerned... the market is giving us already a rating that is much higher, so I really leave it up to them."

Hyundai posts 82% jump in 2010 auto sales in Philippines

MANILA, Philippines – Hyundai Asia Resources Inc. (HARI), the official distributor of Hyundai automobiles in the Philippines, reported an 82% growth in sales to 20,172 units in 2010.

However, a month-on-month comparison showed a decline. December sales dipped when compared to November figures due to stock availability of the Tucson. For December, passenger car sales was at 689 units while light commercial vehicles (LCV) was 787 units.

HARI president Fe Perez-Agudo credited the outstanding sales of passenger cars to Accent and Getz and the introduction of Sonata. The light commercial vehicle figures were backed by the strong sales of Grand Starex, Tucson and Santa Fe.

“Last year, our country was quick to recover from the global financial crisis in 2009, thanks to renewed confidence in the government. This helped pave the way to invigorate the economy thereby increasing consumer spending and strengthening the purchasing power of the middle class,” Agudo said.

“Thanks to the creation of new job opportunities especially in the BPO and information technology industries the continuing success of OFW’s whose contribution to the economy thru their remittances continue to help strengthen the country’s GDP,” Agudo added.

“With its stellar sales in 2010, Hyundai looks forward to 2011 with even greater confidence, and a boldness that stems from its heightened passion to bring the uniquely refined motoring experience closer to more customers,” Agudo said.

“With that said, Hyundai enters the New Year, not just with a bang, but with an explosive doggedness – and undeniably, the best is still to come from Hyundai,” she added.

Data showed that Hyundai’s December 2010 sales evidently surpassed its December 2009 record with a solid 63.8% growth, keeping its market presence as upbeat as ever in time for the New Year.

For passenger car, sales of Hyundai grew by 128.1%. As for month-on-month sales, Hyundai’s December 2010 PC sales also lead by a huge margin from its December 2009 sales – an outstanding 90.3% growth.

Sunday, January 02, 2011

New Year's treat: Discount lane for PUVs at Shell stations

MANILA, Philippines - To cushion the impact of rising oil prices, Pilipinas Shell will offer a P0.50 per liter discount on diesel for jeepneys and buses beginning January 1, 2011.

The discount will be made available under Shell's "Pepeng Pasada Loyalty Rewards Programme" for public utility vehicle drivers, and may be availed at special lanes in 15 Shell gas stations across Metro Manila.

"We hope that through this discount, we are able to help cushion the impact on the transport sector," Shell vice president for communications Roberto Kanapi said in a statement.

The Department of Energy (DoE) met with several transport groups on Wednesday and the discount lane for PUVs was one of the mitigating measures being proposed to soften the impact of higher fuel prices.

The DoE said high demand from Asian countries have pushed international fuel prices up, prompting local oil companies to implement a string of price hikes.

Transport groups have already filed a fare hike petition with the Land Transportation Franchising and Regulatory Board.

Local auto development program hits bumpy road in 2010

MANILA, Philippines - The auto industry was supposed to receive a boost this year as the government crafted a new Comprehensive Motor Vehicle Development Plan (CMVDP). The plan was simple enough – encourage more firms to manufacture vehicles locally rather than sell completely built imported units. After endless consultations, the Arroyo administration signed the CMVDP, one of the last executive orders of the previous administration.

Even with the change in government, things are expected to go as planned because the only thing left to do was craft the implementing rules and regulations (IRR). The IRR which was supposed to be finished last August got pushed back until finally Trade and Industry (DTI) Secretary Gregory L. Domingo said he is not sure if the CMVDP is enough to make the local auto industry truly competitive.

Domingo is not alone in criticizing the CMVDP. A new industry group calling themselves the Alliance of Vehicle Importers and Distributors (AVID) led by Hyundai Asia Resources Inc. surfaced. From the day the group was conceptualized, AVID expressed its dismay over the CMVDP because it does not give car importers any incentives. This was immediately shot down by Board of Investments (BOI) managing head Cristino L. Panlilio who said that the CMVDP is for manufacturers and not pure importers. Panlilio said that manufacturers should be given incentives because they put in investments in hard infrastructure in the country and they provide employment.

The automotive industry has already highlighted the importance of crafting the IRR of the CMVDP as soon as possible because it is vital in the investment decision process of local car firms.

“There is a sense of urgency to finish the IRR,” Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) president Elizabeth H. Lee said in a telephone interview.

“Our current MVDP is already outdated. There is a need to implement the new one now because our neighboring countries have good investment packages for automotive firms,” Lee said.

Lee said that the industry appreciates the move of the BOI to make the IRR for the MVDP as industry friendly as possible. In fact, the BOI has even asked the industry to give specific inputs for the IRR.

Lee said that aside from attracting more potential investors in the country, the MVDP will also help existing players decide on whether or not they will expand their operations in the country. “These are low hanging fruits that we can easily access but we need to take care of them,” she explained

She admitted that the industry has unused capacity. This means that the auto manufacturers can produce more here in the Philippines but they choose not to because it is not economically viable.

On the upside, Lee said it is not too late to implement a regulation that will help make the country an attractive destination for auto firms but said that because our neighboring countries like Thailand and Indonesia have a strong incentive package for firms the Philippines may lose out on possible investments if no incentive package is implemented.

“We really have to act now because we don’t want to lose out on other countries that are very aggressive in trying to lure investors,” Lee said.

Panlilio said that the government and the private sector must work together to push the local car manufacturing because the industry’s manufacturing plants are operating 60% below capacity.

Panlilio has been pushing for the creation of a supplement to the MVDP. Panlilio has earlier revealed that he would like to make an MVDP which will cater specifically to exporters. However, approval may take longer given that the consent of the House of Representatives is necessary because higher incentives will be given to exporters.

The DTI said they are looking at crafting a better strategy to help the local automotive industry. “Right now I cannot see the light. I need to see the bigger picture and craft a better strategy,” Domingo said. “What I’ve seen so far doesn’t give me confidence,” he added when asked about the MVDP.

According to Domingo, the industry may be worse off in the future if a good plan is not put in place. Domingo said he will meet with the players of the auto industry next year in order get a better feel of the industry.

“We will work with the industry players and clarify their plans,” Domingo said. Although he refused to directly confirm if a new MVDP will be issued, Domingo said that the IRR will not be released this year. The IRR was supposed to have been issued in August.

In fact, it is possible that the government will no longer come out with the IRR for the MVDP given all the pressure that the DTI specifically the BOI is receiving.

A ranking government official said the DTI is already receiving a number of inquiries both from industry players and senators for the IRR. The official said that it is possible that an IRR may no longer be issued.

Domingo admitted that the importation of second hand vehicles is one of the areas they are having trouble with in the IRR.

In a separate interview, Panlilio admitted they are having trouble with the IRR but denied that they will no longer come out with one. Instead, he said that they might come out with different IRRs for different subsections. The subsectors are automobiles, motorcycles, trucks and e-cars and Philippine Utility Vehicles (Phuv).

Panlilio said that they might be able to come out with the IRR for the motorcycle and its parts earlier because it is not “contentious.” “The auto and the truck may take some time,” Panlilio conceded.

Domingo said he has not yet approved the IRR and thus it is still not ready to be presented in a public hearing. A public hearing is needed before the IRR can be implemented.

Domingo admitted that one of the issues that is being closely reviewed is the importation of second hand vehicles. Earlier, an official who refused to be named said that four senators have already called the Board of Investments (BOI) because they are worried that the new MVDP will not allow the importation of second hand imported vehicles.

7 killed in Star Tollway accident

MANILA, Philippines (UPDATED) – Seven people were killed while 4 others were injured in a vehicular accident along the Star Tollway in Batangas province on Sunday.

The accident involved a jeepney, a bus, and a car at the tollway in Ibaan town around 12:30 p.m.

Initial investigation disclosed that a Gasat bus heading to Iloilo from Manila tried to overtake a car in front of it.

The bus then tried to cross the other lane but hit a jeepney that carried a family heading back to Manila from a reunion in Batangas.

Seven of the jeepney’s 11 passengers, including the driver and 3 minors, were killed.

The drivers of the bus and the car are now under police custody for investigation.