Philippine Daily
Inquirer
/ 05:07 AM May 01, 2017
There is a brewing
dispute in the energy sector between a private behemoth and its government
counterpart that could shake things up in this otherwise sleepy industry.
We’re talking about the
growing tension between the state-owned National Transmission Corp. (Transco)
and the privately run National Grid Corporation of the Philippines (NGCP) as
evidenced by an exchange of stern letters in recent weeks about the use of the
country’s power grid.
The first salvo was
fired by Transco and its newly appointed president and CEO Melvin Matibag when
he wrote NGCP president and CEO Henry Sy Jr. asking the latter to explain why
telecommunications firms Globe Telecom and Smart Communications were allowed to
set up facilities inside NGCP’s substations.
According to the
pro-Transco camp, Globe and Smart were using NGCP facilities for their internet
broadband services (the so-called “broadband over power” scheme where
fiberoptic cables are laid down alongside power cables).
Transco’s point is that
it technically still owns the facilities that NGCP is now operating courtesy of
the contract it entered into with the government in 2008. As such, Transco’s
permission should first be sought before anyone else uses the facilities.
A letter sent by
Matibag—a longtime associate of Energy Secretary Alfonso Cusi from their
President Arroyo-era days running the Manila International Airport Authority—to
NGCP included a collection of photographs of air-conditioned shipping container
that allegedly housed telco facilities within NGCP’s premises.
A terse reply from NGCP
a few days later, meanwhile, denied the allegations, saying these were “untrue
and unfounded.”
Nonetheless, an NGCP
insider offered this analogy: “When you rent a house, you are free to make
improvements like installing air-conditioning or cable TV. And you’re free to
invite guests over for dinner, as long as they don’t destroy anything, right?”
Who’s right? Who’s
wrong? Watch this space, folks because friction between the two parties is just
starting to build up. —DAXIM
L. LUCAS
Eastwest COO ‘on leave’
Gotianun-family owned
Eastwest Banking Corp. announced a major shakeup of its top brass last month,
including the appointment of a new president and CEO—a move widely believed to
be related to the ongoing suspense thriller gripping the business community
about whom President Duterte will appoint as the country’s next central bank
governor.
But it seems the
shakeup was not limited to the promotion to vice chair of Eastwest head honcho
(and rumored candidate for the Bangko Sentral ng Pilipinas governorship)
Antonio Moncupa or the appointment of veteran banker Jesus Roberto Reyes as the
new president.
Biz Buzz learned that
Eastwest’s chief operating officer Jose “Toto” Hilado has gone “on leave” last
Thursday for reasons that are yet unclear. It could very well be just a well
deserved two-week vacation, after all, he does work hard. But what caused the
eye of many of his peers is that his leave coincides with the entry of the
bank’s new president. Normally, one would like to be at the office when the new
boss arrives, but clearly not in this case.
To recall, Hilado was
poached from the Rizal Commercial Banking Corp. in 2014 into Eastwest with the
promise that he would be the bank’s next CEO when Moncupa retired. But things
didn’t happen that way and subsequent deviations to the plan left many bankers,
especially those within the tightly knit community of bank treasurers,
surprised with the mid-course changes made to the plans for him.
And so when Eastwest
announced last month that Moncupa would be promoted and that a new CEO would be
hired (starting today, May 1), the industry already began to wonder what Hilado
would do next.
Well, the answer came
last week. No, he has not resigned. He’s just on leave. But whether that’s the
final state of things—especially with the governorship of the central bank,
where Moncupa is a candidate, still undecided—the situation remains, shall we
say, “dynamic.” —DAXIM L.
LUCAS
No IPO, no problem
It may have had
experienced a hiccup in its bid to go public, but everything else seems to be
looking up for logistics firm LBC Express Inc.
That’s because the
oldest cargo and freight forwarder in the country—originally known as “Luzon
Brokerage Co.” when it was founded in 1945 by Carlos Araneta—reported a sharp
increase in its earnings for the previous fiscal year.
How sharp? According to
LBC, the operating company reported a net income of P920.2 million for 2016,
representing a 117-percent increase over the P424.7 million it reported the
previous year. The company attributed this jump to the rising demand for air
and courier services, alongside “improved cost” (meaning cheaper) air and sea
freight.
It was also a good year
for the firm’s shareholders as its parent firm, LBC Holdings, declared a
P313.7-million cash dividend in the fourth quarter of 2016. At 22 centavos per share,
this represents a whopping 36-percent payout ratio.
According to the
company, it serves Filipinos in more than 20 countries with a network of over
1,200 in addition to 5,300 partner agents. All told, this network of 6,500
outlets offers convenient and reliable options for express delivery.
The firm also has three
key cargo hubs, specifically in Manila, Clark and Cagayan de Oro, and 78
delivery hubs, with a team of 1,410 delivery associates and more than 6,000
employees nationwide.
Now all this would have
been a compelling investment story for an initial public offering, had the
Securities and Exchange Commission been less skeptical of the company (due to
LBC’s failure to declare certain material information in its proposed initial
public offering prospectus about its past legal issues).
These legal issues
included one raised by the central bank against a shuttered sister firm (LBC
Bank), which supposedly extended advances to the logistics business. That was
raised in 2011, and today—six years later —the logistics arm is showing that
it’s doing very well, thank you very much, without any financial assistance.
There are those who
believe that LBC’s chances with the corporate regulator may have been hurt by
the mere family name of the company’s owners, making them distant cousins of
former First Gentleman Jose Miguel Arroyo. And the bulk of SEC’s officials are
appointees of the previous administration, of course. But whether the
speculation is true or not is anyone’s guess.
In any case, at the
rate LBC is going—especially with the logistics industry booming as the
Philippine economy grows—it may not even need a P1.2-billion IPO anymore. That,
or it may come to an understanding with the SEC going forward. Abangan. —DAXIM L. LUCAS
SMC’s RE play
Conglomerate San Miguel
Corp., in a major foray into the renewable energy space, said it would push
forward with a tidal power project, the first in the Philippines when
completed.
SMC president Ramon Ang
said the company envisioned a 20,000-megawatt project over a decade, which
would help bring down the cost of electricity while cutting reliance on less
environment-friendly power options.
Details remained scant
at this stage. But based on the timing, SMC wanted to move fast on the project.
Ang said they would submit a proposal to the Department of Energy “in the next
few weeks.” By year-five, SMC should be producing 4,000-MW from its tidal power
project.
Tidal energy is a form
of hydropower where electricity is produced from the change in water levels
from high tide and low tide. Since there are limited sites around the world
where a big enough water surge occurs (the US Department of Energy said it
should be more than 16 feet), tidal energy projects are less common. France,
South Korea, China and Russia are among those with tidal power plants.
Ang said he was unable
to name their technology partner at this stage. But he noted the conglomerate’s
plan has even attracted the interest of Vietnam’s trade minister.
He noted the
Philippines would come first. “This project is not a maybe-we will do this in
the Philippines,” Ang said. —MIGUEL
R. CAMUS
Hotel for millennials
Recognizing the
increasing purchasing power of young people, Gotianun-led Filinvest Development
Corp. (FDC) plans to create a new “hip and cool” hotel brand specifically
targeting the millennials.
The first of such hotel
for millennials will be put up in Cebu and later in other areas as part of
FDC’s plan to build a 5,000-key hotel portfolio by 2020. The upcoming brand
will offer accommodations priced at around P3,000 to P4,000 a night, FDC
president Josephine Gotianun-Yap said in a press chat.
Having said that, FDC
expects that the biggest bulk of its hotel business will still come from the
traditional market, that which caters to “MICE” (meetings, incentives,
conferences and events), local businessmen, domestic tourists and families.
This year, FDC is set
to open in Boracay its third hotel under the deluxe Crimson brand. Crimson
Boracay will be offering close to 200 rooms, adding to existing accommodations
offered in Mactan, Cebu and Alabang.
FDC also has other
projects in the pipeline, including another in Mactan, Cebu, alongside new
hotels in Puerto Princesa, Tagaytay, Clark and Cubao. Tourism, after all, is
widely seen to be the next big thing in this country. —DORIS DUMLAO-ABADILLA
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