Aboitiz sees growth amid economic crisis

By Ehda M. Dagooc Updated January 21, 2009 12:00 AM

Cebu-based conglomerate Aboitiz Equity Ventures (AEV) may have been preparing for the (possible) effect of the global economic disaster this year, but the group still sees growth of its businesses, and retrenchment measure is a far-fetch idea.

The entire Aboitiz Group has about 20,000 employees around the country, including those employed by its overseas partners, said AEV president and chief executive officer (CEO) Erramon Aboitiz.

While other companies in the world are doing massive retrenchments to stay afloat amid the economic difficulties, Aboitiz said the Group is in fact, in the “hiring mode”, as most of its businesses are more resilient.

“We have power plants coming on stream, and several of our businesses are on the hiring mode,” Aboitiz said in a press conference.

The power group, for instance, is seeing sustained growth this year, along with other subsidiaries like food (Pilmico Foods Corporation), real estate (AboitizLand of Aboitiz and Company), and banking (Union Bank), among others.

Aboitiz believes that the highly publicized global economic crisis is just a temporary “bump on the road,” and the company is optimistic of its growth, while the Philippines is still maintaining healthy environment for most businesses.

Clearly, some sectors in the Philippine economy are affected like manufacturing and exports but other industries are still expecting growth. “Overall, we still think a little bit of growth this year.”

Aboitiz said the feed consumption, and flour milling demand is still on upswing, real estate demand is strong, so as power.

“At the end of the day, when the dust settles, we’d like to see that there is still growth, although it may be much lower than previous years,” added Erramon, who recently replaced the position of Jon Ramon Aboitiz as AEV’s president and CEO, following Jon’s retirement in December last year.

In fact, the company is allocating a much higher capital expenditure (capex) this year, more than what it spent in 2008. However, Aboitiz refused to divulge the concrete amount, only said that for its power subsidiary Aboitiz Power Corporation (AP), it is going to raise P2 billion to P3 billion from retail market to issue bonds within the year.

Already AP has generated about P3.9 billion from fixed rate it floated last year. This and the other P3 billion it hopes to raise from the upcoming bond issuance, will fund the company’s power generation expansion, including acquisition of power plants, including its interest to bid for the National Power Corporation (Napocor).

“It’s business as usual [for us]. We may expect slowdown this year, but our planning is long term, beyond 2009,” Aboitiz said.

In 2007, the company reported a 54 percent increase in profit or P5.8 billion from P3.8 billion in the previous year.

Strong operating results of the power and banking groups drove AEV’s robust performance, accounting for 61 percent and 23 percent of total income contribution from its business groups, respectively, in 2007.

Cebu seen to lose more coastal areas in 20 years

Updated January 21, 2009 12:00 AM

Cebu - Scientific findings showed that in a matter of five years, there will be a one-meter rise in sea water level in the whole archipelago.

In 10 years, sea level is projected to rise by four meters while recent study shows that in 20 years, almost half of the city of Mandaue and Mactan Island will be wiped out of the map as the sea level once more rises by seven meters --- the alarming effects of global warming and climate change.

“Global warming, let me clarify to everybody is irreversible. All these destructions will happen whether we like it or not,” said lawyer Benjamin Cabrido, environmental law professor of the University of San Jose-Recoletos, representing the academe as well as the civil society during the Metro Cebu Summit on Climate Change.

USAID Office of Energy and Environment chief Daniel Moore confirmed that the country is highly vulnerable to the stakes brought by climate change due to its archipelagic nature.

USAID offered technical assistance to the initiatives of the government to protect the country and its people knowing the situations and problems that the country is facing in the next decades.

To address the current pressing environment concerns which are the air quality deterioration and climate change, the Cebu City government initiated the Metro Cebu Summit on Climate Change and Convening of the Metro Cebu Airshed Governing Board yesterday.

National and local leaders, representatives from other government line agencies, development partners such as government and non-government agencies, the civil society and other concerned individuals attended the event to be updated of the actions that the local government is working on to “prevent or minimize the effects of climate change to the community.”

The summit has been a very significant event in the history of the country as the first convening of the Airshed Governing Board was made possible only in Cebu whose members included Department of Environment and Natural Resources officials, mayors of 11 municipalities and cities of Metro Cebu, other government line agencies, people’s organizations, NGOs and representatives from the private sector.

DENR Undersecretary Demetrio Ignacio and all the stakeholders present during the convention approved and signed the resolution for the creation of the governing board as well as resolutions for additional policies that will strengthen and monitor the development of the group.

The function of the governing board primarily will deal with the formulation of policies that mandate mitigating and eventually adaptive measures of the government to address the impact of climate change to Cebu and its people.

“But we are here not merely to convene but mainly to save the territorial jurisdiction of our place,” Cabrido said pertaining to the loss of lands that Cebu and the whole archipelago will likely experience once the time for it has come.

The Airshed Governing Board will first focus on mitigating measures for a low-carbon economy to attain and maintain the ambient air quality standards.

The job will be devolved to local officials who will take charge of their respective jurisdictions and share the responsibility in the management and maintenance of air quality.

“We only have 10 years to mitigate but after it, we are left with no choice but to shift all our policies that implement mitigating measures to policies that will implement adaptive measures,” Cabrido added.

When that time comes, Cabrido said we can only go until accepting the reality that Cebu will be losing a portion of its land affecting thousands of people living in low-lying areas that will be first hit by the inevitable phenomena.

The Senate is also working on how to address these concerns through the Renewable Act of 2008 which promotes the use of renewable resources as sources of energy. This law hopes to achieve energy sufficiency now that fossil fuels and other non-renewable resources used as energy source are deteriorating.

Representing the Senate during the summit was Senator Miguel Zubiri who believes that government policies should indeed shift away from fossil fuels to renewable resources because these fossil fuels are the main contributors to global warming as these emit more greenhouse gases that warm the atmosphere. – Jessica Ann R. Pareja/MEEV (THE FREEMAN)

Mgt committee sought for BRT

Updated January 11, 2009 12:00 AM

Cebu - The Cebu City government calls on the Department of Transportation and Communications to create a project management committee for the proposed Bus Rapid Transit System.

In a communication sent to DOTC Secretary Leandro Mendoza, acting mayor Michael Rama said it is hoped that there will already be a memorandum for the creation of an overall management committee for the BRT as the mode of urban mass transportation.

This will be the next step in realizing the project which will surely bring convenience not only for Cebu City but for the adjacent local government units as well.

“We likewise reiterate the request for a cooperative and collaborative policy formulation, decision making and management of the proposed system, in as much as this urban public mass transportation is very well a concern of the LGU as it is the DOTC’s,” Rama said.

He said that the city is also reinforcing its original request sent to the department last June 2008 to undertake a feasibility study for the establishment of a BRT in Cebu City.

To support the letter, Rama enclosed a copy of Resolution 08-1430 of the City Council declaring, as policy direction of the city government of Cebu, the establishment of a public urban mass transport system in the form of the BRT.

Rama asked the DOTC to note and consider that the preference is for a BRT and not in the form of a rail-based mass transport system.

The proposed BRT is seen to include the cities of Talisay, Mandaue, and Lapu-Lapu.

City Planning and Development coordinator Nigel Paul Villarete is set to make presentations on the BRT to the said LGUs that he hopes will also pass the same resolution preferring the BRT.

Mandaue City Mayor Jonas Cortes already expressed interest in the project while Lapu-Lapu City government is still undecided.

Talisay City government, on the other hand, is supporting the plan of Cebu first district Rep. Eduardo Gullas, who prefers the light rail transit (LRT).

The proposed LRT will run from Argao in the south to Danao City in the north. — Ferliza C. Contratista/MEEV (THE FREEMAN)

For comments, rejoinders you want to share or inquire, or learn more about Cebu Real Estate Industry, Call..

Realtor SAMUEL LAO, REBL#1341

PAREB-Cebu Realtor's Board Inc. (2nd VP Elect,2009)
RealtyOPTIONS Marketing & Consultancy Inc.- President/CEO
Tel Nos: (+63 32) 5166194 / 2550374
Mobile: (+63 918) 9236123 / 0922.8236123
www.laosamuel.com
www.laosamuelmls.blogspot.com

How to make the most of your real estate investment

Updated October 31, 2008 12:00 AM

While the global economic slowdown is seen to have less direct impact on the Philippine financial system, these times still call for prudence in making high-risk investments.

Filipino Expatriates who especially want to hedge their savings and do not want to invest in the volatile markets overseas may find an answer in hard quality assets, such as Philippine real estate.

According to Dr. Krassimir Petrov of Financial Sense: “Real assets hedge better than paper assets. By definition, real assets have a value of their own. Inflation does not erode their value.”

Meanwhile, Marco Antonio, managing director of Century Properties, points out that while real estate may have an intrinsic value, investors must still choose wisely, using these tried and tested cardinal rules:

Choose a well-located property so you are assured of value appreciation. A property located in central business districts or city centers will maintain high marketability. If you choose not to use it, you can always sell it, rent it out, or have it leased. Century’s The Knightsbridge Residences, for instance, offers the smartest location of the metropolis – in Kalayaan Avenue in the heart of Modern Makati, and within the fully-integrated development Century City.

Choose a reliable developer that has a proven track record of completing its projects on time. Look for a developer that has gained valuable experience and built successful projects even throughout different real estate cycles.

Visit The Knightsbridge Experience on the 2nd floor, high-rise tower of The Pacific Star Building, on the corner of Makati Avenue and Sen. Gil Puyat Avenue, Makati City. For more information, visit www.knightsbridge.com.ph or call 818-9025, 0915-700-2000, +63917-5555-274 (CPI) or + 63917-8486-531.

For comments, rejoinders you want to share or inquire, or learn more about Cebu Real Estate Industry, Call..

Realtor SAMUEL LAO, REBL#1341

PAREB-Cebu Realtor's Board Inc. (2nd VP Elect,2009)
RealtyOPTIONS Marketing & Consultancy Inc.- President/CEO
Tel Nos: (+63 32) 5166194 / 2550374
Mobile: (+63 918) 9236123 / 0922.8236123
www.laosamuel.com
www.laosamuelmls.blogspot.com

Back to basics for RP real estate in 2009

Updated January 02, 2009 12:00 AM

The global financial crisis continues to agitate the major economies of the world. It began with the US which has been experiencing a recession since December 2007. The ripple effect of this financial catastrophe has affected the economic growth of emerging economies such as the Philippines. From an outstanding GDP growth of 7.3 percent in 2007, the economy is now conceding to a lower than expected expansion within the vicinity of 4.5 percent according to economic experts.

There seems to be no relief on the horizon as a widespread decrease in economic activity is expected to set in 2009 for the first time in decades as funds to support business activities across all sectors of the global economy dry up. This is not new to the Asian region, where the Philippines is situated. It’s “déjà vu’ for the Philippines with recollections of the 1997 Asian financial crisis remaining all too vivid for affected sectors of the economy such as banking, real estate and construction.

The question to ask now is how will the global financial investment industry move on from this? “It’s back to the basics for 2009 as the remaining liquid investors flock to traditional investment instruments such as direct investments and ownership of real estate. The way to go is revisiting investment opportunities from bricks and mortar businesses or companies which have a physical presence that offers face-to-face customer experiences,” says Rick Santos, chairman of CB Richard Ellis Philippines.

Moreover, highly populated countries like the Philippines which, among other sources, relies on export revenues, can fall back on its human resources to survive the global financial crisis. The law of supply and demand tells us that if the Philippines’ export sector is on the downturn because of the recession in the export market, it can shift to its huge internal market to compensate a shortfall in exports (i.e. manufacturing for the domestic consumption).

Previously, diversity of portfolio investments lured most equity funds to invest in high-risk and high-yielding liquid assets and financial instruments such as mortgage backed securities, credit derivatives and hedge funds. Now, real estate remains a safe bet for investment.

For comments, rejoinders you want to share or inquire, or learn more about Cebu Real Estate Industry, Call..

Realtor SAMUEL LAO, REBL#1341

PAREB-Cebu Realtor's Board Inc. (2nd VP Elect,2009)
RealtyOPTIONS Marketing & Consultancy Inc.- President/CEO
Tel Nos: (+63 32) 5166194 / 2550374
Mobile: (+63 918) 9236123 / 0922.8236123
www.laosamuel.com
www.laosamuelmls.blogspot.com