Written by Fernan Marasigan / Reporter |
Wednesday, 15 April 2009 19:43 |
A “CORPORATE” form of the real estate investment trust (REIT) model, borrowed from Japan by proponents in the Philippine Stock Exchange (PSE), may yet prove to be the sticking point holding passage of the bill, once described by lawmakers as a crucial stimulus in a season of crisis. At hearings this week in the House of Representatives, several solons expressed opposition to the taxation scheme in the REIT bill as proposed by the PSE, saying it will be disadvantageous to the The hearing of the House on ways and means committee on the substitute bill to House Bills 148, 3566 and 4182 or an Act “Providing the Legal Framework for Real Estate Investment Trust,” became the venue for a minute scrutiny of the proposals. Legislators, led by Lakas Rep. Exequiel Javier of Antique, committee chairman, turned down the proposed taxation scheme adopted from a Japanese model because nothing will be left for the government. PSE president and chief executive officer Francis Lim told members of the committee that under the system, where there is a net income, the 90-percent distribution is deducted before the REIT is taxed at the REIT level. “Generally, it is taxable, for example, when it is distributed to individuals under our tax law . . . .The corporate form of REIT is the most successful in Japan,” said Lim. But Javier told Lim that if that is followed, nothing will be left for the government, as 90 percent of the dividends to be distributed will be deducted from the gross income. His view was supported by Liberal Party Rep. Liwayway Vinzons-Chato of Camarines Norte, committee vice chairman. “It will not just be the dividend that will be deducted because you’re talking gross income: You will deduct the 90 percent of the dividend plus allowable deductions. [There will be nothing left on which to base taxes.] I bet you, there won’t be any taxes left. The government may even end up advancing money; you [private business] might even get tax credits,” Chato told PSE officials. Laban ng Demokratikong Pilipino Rep. Juan Edgardo Angara of Aurora, principal author of the substitute bill, said under the proposed taxation system, the government is at the losing end. “At the level of the firm, the government will really lose, because the income tax of REIT will go down to almost nil.” But Angara quickly added, “I think the idea is to look at the big picture. At the level of the economy, the idea is to create some kind of a building room, especially in countries which are developing and which have inadequate infrastructure.” The REIT, he stressed, “will facilitate the creation of offices, of hospitals, of malls—these are things that generate economic activity. I think the PSE has commissioned a study to show that at the larger picture the government is a winner, although at the level of the firm—of the particular REIT company—the government is a loser.” Javier also questioned the proposal for the 30-percent minimum public ownership. By adopting this, the REIT will not be democratizing ownership, supposedly one of the salient features of the measure. The bill should provide that after five years, at least an additional 5 percent should go to public until it reaches more than 50 percent. “Otherwise, it will just be used as a tax shelter for wealthy families,” Javier said. Lim agreed and told Javier, “A staggered approach is acceptable to the PSE. I don’t have any objections to the staggered increase in the minimum ownership.” To this, Javier replied: “Of course, otherwise we will be back to square one, where at present most of these prime properties are owned by a few families. We will not be able to democratize the ownership of land in this country, so I think we should consider the increase of public ownership,” Javier said. At the hearing, Lim appealed to legislators to expedite the immediate passage of the substitute bill because the country has already been left behind the global industry. He cited Japan, Malaysia, Singapore and Hong Kong, which already have in place the REIT system. “The Philippines, unfortunately, does not have a share in this booming industry. The Philippines does not have any industry at the moment; in fact, some of our real- estate companies are now looking to list themselves in the Singapore exchange and other exchanges just to avail [themselves] of the REIT system. That is the reason the PSE is advocating for the REIT system,” Lim said. “In Japan, South Korea, Vietnam, Malaysia and Singapore the REIT system there is already in advanced stages. Even Pakistan and Indonesia are looking for a REIT system.We do not want to be left out in this global industry,” he added. Lim also told legislators that because of very few investment products in the country, a lot of Filipinos are engaging in investment scams. He cited an official estimate which shows that in 2007 there were about P70 billion worth of scams. |
Thursday, April 30, 2009
Solons balk at ‘Japan model’ in REIT bill
The Next Frontier
Written by Noel G. Tulabut |
Thursday, 23 April 2009 01:15 |
One may view this undertaking to be an ambitious project. It may seem to be but it is realizable and doable. The attempt to develop some 10,000 hectares of vast but raw lands in the northern part of the former military reservations in Clark is now on the drawing board. Clark Development Corp. (cdc)—the government corporation with the mandate to oversee the conversion program for this particular baseland—has launched a development program. It has started to draw a blueprint that will usher in a new landscape not only for investments, but also for the Aeta tribes and their communities. The Next Frontier is both a development program and new name for the so-called Sub Zone of Clark. It is located immediately to the north of the main zone (straddling portions of Mabalacat, Pampanga and Bamban, Tarlac) or the Clark Air Base proper—the fenced-in 4,440 hectares which now host commercial, industrial, tourism and aviation firms, including the Diosdado Macapagal International Airport (DMIA). The Next Frontier will develop at least 30 percent of the Sub Zone’s 29,000 hectares of raw land, characterized by hills and valleys. In response to the growing saturation of lands and buildings inside the Main Zone, this will open up new areas for business and investment projects for prospective foreign and local investors. The cost of developing The Next Frontier will require some P11.18 billion for new roads, bridges and utilities to be built in the next 15 years. With the emergence of locators in the area, CDC estimates that business projects inside The Next Frontier will generate about 47,000 jobs. The Next Frontier is being pursued in consonance with the Joint Management Agreement (JMA)—a contract signed on December 6, 2007, by CDC, the National Commission on Indigenous Peoples (NCIP) and leaders of Aeta tribes who have inherent rights over certain areas of the Sub Zone under the ancestral domain claims. CDC president and CEO Benigno Ricafort said while the JMA and The Next Frontier enable CDC to create investment potentials in tourism, housing, commercial, institutional and light industry projects in the Sub Zone, the undertaking also “ensures the recognition and promotion of the overall welfare of the Aeta tribes in the area.”
The Next Frontier, formerly known as Clark’s Sub Zone, will be developed by Clark Development Corp. in an attempt to open more spaces for investment and business projects while building new and modern communities for Aeta tribes inside the 10,600 hectares of rolling terrain along the boundaries of Pampanga and Tarlac provinces.
For the Aetas The Aetas have 12 existing sitios inside the 10,684 hectares. The blueprint will try to maximize land use for investment projects and build a new and modest community for indigenous people. Under CDC’s plans, the sitio will be “clustered” into five “service centers” or something like new villages or barangays. Each service center will have modest housing facilities, schools from nursery to secondary levels, health/medical facilities, multipurpose center, farming area and postharvest facilities, minicommercial centers, churches, recreational parks and utilities including telephony and Internet provisions. The Aetas will receive 20 percent of the total revenues generated from CDC’s hosting of business establishments inside The Next Frontier. This is one of the provisions of JMA. Already, CDC has granted the Aetas’ request and had distributed 13 utility vehicles for the tribes, to help market the products of Aetas, bring children to schools and their sick to the hospitals in nearby Mabalacat and Bamban towns or Angeles City.
The 700-linear-meter Sacobia Bridge connects The Next Frontier with Clark’s Main Zone.
CDC officials say The Next Frontier is “consistent with national agenda for indigenous peoples, as well as for investment and employment generation.” Under this program, CDC hopes to achieve optimal use of ancestral lands inside the Sub Zone as covered by JMA. Of the total land area of 10,684 hectares covered by JMA, CDC has targeted a net area of 2,010 hectares, which it calls “buildable for business and investment projects.” The current CDC management has identified six priority projects until December 2010 for The Next Frontier. These include finalizing lease contracts with Korean firm Donggwang for an ecotourism project; with the Philippine Tourism Authority for a wakeboarding resort, and the establishment of a Taiwan Ecozone. Also in the pipeline are the construction of east and spine roads, paving of a west road (which will create more accessibility to remote parts of the hilly areas), completion of plans for settlement clusters, completion of ground surveys and detailed engineering, feasibility studies for utilities. Gaining ground With plans for The Next Frontier on the drawing board, CDC has been simultaneously working on The Next Frontier will also be presented to the Regional Development Council, after which it will be taken to Malacañang before the end of this month. |
Sandari Batulao reemerges as tourism hub
Written by Ruben Terrado and Ira V. Panganiban |
Wednesday, 29 April 2009 21:00 |
LONG before the days when Metro Manilans needed to board a plane to go on a vacation, a short trip to Batangas was the best option. Nasugbu town, in particular, with its hilly terrain and cool weather shared with adjacent Tagaytay City, its rich shoreline for beach fanatics, was known until the late ’80s as the perfect getaway for those who wish to rest from the hustle and bustle of Metro Manila. The government, never losing sight of its potential, had, in fact, declared Nasugbu a special tourism zone through an executive order issued by President Arroyo in 2007. Nasugbu is on its way to its reemergence as a tourist haven with the recent groundbreaking of Sandari Batulao, a master-planned mountain resort and leisure community. Located in barangay Caylaway at the foot of Mount Batulao and Mount Talamitam, along the Nasugbu-Batangas National Road, Sandari Batulao promises to become the premier mountainside development in Nasugbu. It will rise on gently rolling to gradually sloping grounds 300 to 600 feet above sea level. The 800-hectare property is being developed by Citystate Properties and Management Corp. as a joint venture with Group Developers Inc. and Batulao Bio-Loop Farms of the Puyat family. JC Rodriguez Construction Corp. and Pro-Construct Corp. are also involved in the project. Citystate Properties is a member of the business organization organized by Ambassador Antonio L. Cabangon Chua, which also includes the Fortune Insurance Group and Eternal Group of Companies, among other business entities. At the groundbreaking ceremonies on April 24, J. Wilfredo A. Cabangon, Citystate Properties executive vice president and general manager, forecast that Sandari Batulao will boost development in cities and towns south of the metropolis. “This project is envisioned to become one of the more popular out-of-town, self-sustaining communities, as it is located right in the midst of a tourist destination. It should spur further growth for Nasugbu and other nearby towns of Batangas, which is the goal of Sandari Batulao,” he said. “Nasugbu used to be the destination of choice during Holy Week or long breaks by Manila folks, but after its beaches were not taken care of and the other provinces caught up, we were kind of forgotten,” said Ramon Tuazon, head of a local tourism revival team that seeks to restore the town of Nasugbu to its old place as a leading tourist destination. Sandari Batulao, he added, will restore Nasugbu to its old glory and spur the decadelong efforts of local officials to rehabilitate the town. “We encourage developers like CityState Properties to put a stake in Nasugbu simply because it is the most logical place to come to for a short break from Manila since it is near and economical,” added Nasugbu Mayor Antonio Barcelon. Architect Noel Saratan said Sandari Batulao will be the first of its kind in the country. Its architectural style will be comparable with similar mountainside developments in Bali, Indonesia and Chang Mai, Thailand. “As far as I’m aware of, this is the first time there will be a residential resort with a mountain theme in the Philippines,” Saratan said. “Right now, all residential resorts that are sprouting are on the beach. This time, Robie Sandoval, president of Proconstruct Corp. and project manager of Sandari Batulao, agrees with Saratan. “It is unique because I think this is the first time that we are going to have a project with this terrain. Nobody has also built this kind of project here,” Sandoval said. “There are also mountainside developments in Baguio. But they are plain residential. Here, we try to make it a point that it is a mountain resort,” said Saratan. Sandoval said the 800-hectare project will be done in three phases, with the first phase further broken down into three stages to cover 30 hectares. Construction of the first part of Phase One is now ongoing. “Phase 1-A started on March 15 and its target completion is in September,” he said. The Calamias River, which is situated in the property, offers another great potential for attracting leisure travelers and guests. With all its offerings showing nature at its finest, Sandari Batulao promises to hasten the revival of Nasugbu as a tourist destination in Southern Tagalog. IN PHOTO -- ROBERTO SANDOVAL(top left), president of Pro-Construct Corp; Teodoro Rodriguez, president of JC Rodriguez Construction Corp.; Milagros Puyat, landowner of Group Developers Inc. and Batulao BioLoop Farms; J. Wilfredo A. Cabangon, executive vice president and general manager of Citystate Properties and Management Corp.; Arch. Noel Saratan, architectural consultant; Nasugbu Mayor Antonio Barcelon; and Arch. Art Butac, project technical head of Citystate Properties. |
Land ownership not sure draw for FDIs
Written by Max V. de Leon / Reporter |
Thursday, 30 April 2009 23:53 |
DOMESTIC manufacturers are not sold on the idea that allowing foreign investors to own land will boost foreign direct investments (FDI), pointing out that China and Vietnam are attracting huge FDIs even if they do not allow land ownership. “They may be prescribing the wrong medicine,” said Jesus Arranza, president of the Federation of Philippine Industries (FPI). Instead of revising the Constitution to give foreigners the right to own land, the FPI said efforts should be focused on improving the business climate through stability in policies, better infrastructure, lower power rates, and better peace and order, among others—the same factors foreign and local critics have been urging for years if not decades. Arranza quoted a Chinese saying—“Business will come despite all the risks as long as they can make a profit”—in buttressing his group’s suggestions and to explain the strong inflow of FDI in locales where danger and risks exists much greater than in the Philippines. If foreigners are allowed to own lands without restrictions, the resulting escalation of real property prices would disturb the market and make it even harder for Filipinos, even those in the middleclass, to acquire properties, he added. If foreigners are ever allowed to own land, however, he said they should only be limited to the actual lots on which their manufacturing and processing plants stand. That means no land for development. “We already have our experts in that field,” he said, pointing to Ayala Land, Robinson Land and SM Properties. In the area of agribusiness, Arranza said foreigners should also be barred from owning plantations but only the lots occupied by their processing plants. But he said their group still maintains the best is not to give ownership of land to foreigners because “it is to the best interest of the Filipino people.” “It is a crazy argument to say that ‘the foreigners, anyway, will not be able to bring with them the lands that they would buy when they leave.’ When they leave the country, the foreigners will surely not just give back the ownership of the lands for free, but would be selling or leasing them at much higher prices,” he said. |
PDIC charter doubles deposit insurance
Written by Jun Vallecera / Reporter |
Wednesday, 29 April 2009 22:17 |
THE Philippine Deposit Insurance Corp. (PDIC) finally has a charter that allows it to douse financial fires among troubled banks before they become a financial conflagration. President Arroyo signed into law the amended PDIC charter or Republic Act 9576, on Wednesday, which not only doubled the deposit insurance cover to P500,000 but puts more teeth into its regulatory powers, as well. The PDIC is now empowered to determine which, and prescribe rules, on deposit products covered by insurance, and exclude those products that are deposit-insurance schemes. The PDIC is also now authorized to conduct independent special examination of banks and may even inquire into or examine deposit accounts to limit the risks to PDIC’s deposit-insurance fund arising from the fraudulent creation of deposit liabilities or manipulation of deposit records. The most infamous of the manipulative schemes were those allegedly resorted to by the Legacy group of banks under Celso de los Angeles where the splitting of deposit accounts magnified the insurance liabilities of the PDIC. Under the new charter, splitting of deposit accounts within 120 days prior to bank closure are no longer covered by the mandatory insurance cover. “Rampant splitting of accounts under the Legacy-linked banks accounted for the fact that very few depositors PDIC president Jose Nograles said they are now also allowed “to look into bank deposits facing threatened or impending closure.” Exactly what the phrase means in practice is the subject of an ongoing effort to capture the letter of the law and codify it through development of an implementing rules and regulations, according to him. BSP Governor Amando Tetangco Jr. said this new PDIC power has to have “prior Monetary Board approval” before the corporation can do it—examine a bank account. He added that under the law, only the Monetary Board has the authority to order the closure of any bank and only appoints the PDIC to institute receivership or even liquidation of assets as required. |
Cebu holds its breath as two political giants fight over progress
Written by Willy Rodolfo III Reporter |
Thursday, 30 April 2009 23:15 |
IN 2004 Gwendolyn Garcia was elected the first woman governor of Cebu province by a hairline. One of the first who greeted her was Cebu City Mayor Tomas Osmeña, who embraced Garcia despite her defeating his own nephew in the gubernatorial race. It was seen as a new age in Cebu politics, two aggressive and strong chief executives holding the provincial and city posts. Progress seemed unstoppable. Several years after, the two chief executives are in a war of attrition, firing one-liners at each other from City Hall and the Capitol sitting on both ends of Osmeña Boulevard. The mayor called Garcia the “queen of darkness,” among others, while she called him a “temperamental erratic bully.” Amid the headlines, the two camps are girding for a long war in Congress, in the courts and in the media, especially with the 2010 elections approaching. Meanwhile, multibillion-peso projects that Cebuanos have been waiting for decades are left in the balance, and the fate of 5,000 urban poor families pinned in the middle of the conflict continues to hang in the balance. The past two weeks, the conflict escalated. The governor together with her father, former governor now Rep. Pablo Garcia (Cebu, 2nd district) and younger brother Rep. Pablo John Garcia (Cebu, 3rd district), unleashed their “Constitutional storm” against the city and its P25-billion joint-venture deal with Filinvest Land Inc. over a fifth of the 250-hectare reclaimed South Road Properties. Pablo John, in a privileged speech at the House of Representatives, called on Congress to hold an inquiry on the deal. A scrutiny, he said, was in the interest of Cebu residents, even though he and the Capitol have no formal jurisdiction over Cebu City. He challenged Vice Mayor (acting mayor) Michael Rama to a public debate over the deal and threatened to go to court to stop the Filinvest deal. Mayor-on-leave Osmeña, recovering from several chemotherapy sessions and a surgery to remove cancer in his bladder, balked from his hospital bed in Texas in the US and challenged Capitol to file charges in court instead of in the media. He vowed to get well and face Congress if the inquiry pushes through. The city then fired back, with the City Council set to pass a rezoning ordinance—turning province-owned properties in the city into residential areas, effectively blocking any plans of Capitol to clear the lots of informal settlers reported to be turning it into money-making enterprises. It also puts in jeopardy plans of recovering and developing some 250 hectares of province-owned property in the city, including Camp Lapulapu of the Armed Forces Central Command. Moratorium on development Meanwhile there’s a moratorium on development projects in the city’s northern corridor, where Capitol projects are located. The Capitol’s own P1.2-billion joint-venture project with a Hong Kong and Filipino group for Spanish-era mall is, at the moment, shelved. “This conflict is counterproductive and feeds on nothing but hubris,” Cebu Business Club president Gordon Alan Joseph told the BusinessMirror. “I really think it’s time to stop thinking parochially and think of the welfare of the entire province of Cebu—of which Cebu City is necessarily an integral part.” Cebu’s boasted brand of mature and high-level politics, sealed away from business and progress, has been breached. And the two kingpins of local politics are bent on stopping each other’s pet projects to prove a point and to prove who’s stronger. Roots of conflict The conflict started in 2005, when an unprecedented plan between the city and the province to swap lands collapsed at the last minute. The city was offering its vacant lot at the North Reclamation area, in exchange for province-owned properties inside the city occupied by 5,000 families of informal settlers. Everything was set when the discussion suddenly shifted to a value-for-value swap instead of land size-for-size. With the two groups disagreeing on the exact value of their properties, the deal got botched. Governor Gwen claims she wants to ensure the financial stability of the province by making revenues out of their properties, while Mayor Tomas said he wants to protect the welfare of his voters. Both claim to have the moral obligation to fight each other. According to Rama, the anointed successor of Osmeña in 2010, the city still believes it has to protect 25,000 of its residents who could lose their homes if Capitol recovers its properties. He said any further resolution to the conflict should be based on the security of the residents who are Cebu City voters, not provincial voters. But he believes the Capitol’s motives are more than just making revenues. He said there are bigger political plans at stake. He did not discount the possibility of the Garcia family planning to wrest control over the city. “We can sit down [with Capitol] because we are here to fulfill a vision for Cebu City and not to feed the ambitions of a few,” he told the BusinessMirror. “My fear is by 2010, one family will claim to have control over Cebu and sell Cebu to national politicians.” Rama said Capitol’s interference in SRP is anti-Cebuano and is a form of economic sabotage. Since 1995, City residents have been paying for the loan amortization for the SRP to Japan, of up to P800 million a year—nearly half the city’s annual budget. The loan payments, set to run up to 2020, have sacrificed services while city residents and officials endured criticisms and even claims by neighbor Talisay City, whose officials suddenly said the completed SRP encroached on their territory and therefore should be theirs. “This deal [Filinvest] will wipe out the city’s liquidity problems. If they [province] are interested in the welfare of the people, they should sit down with us and help complete this project,” Rama said. “Let them show me a better deal and I will look at it. But they have not. They want to stop the project and sacrifice the residents of Cebu City.” Filinvest, other deals in limbo The city’s deal with Filinvest, awarded early this year, is comprised of a straight purchase of some 10 hectares of prime SRP land worth P2 billion, and a profit-sharing scheme over development revenues of the remaining 40 hectares. Rep. Garcia said the deal was questionable. In his privileged speech he asked why the reclamation project was done without authority of Congress; why Filinvest will get titles of the lot even without completing the whole purchase payment and despite what he called an attempt to avoid government bidding requirements by entering into a sale/joint venture hybrid deal. He also questioned the need to have the city spend for the road network and shoulder the costs of registration and transfer of ownership. “Never have I seen a relationship where one party is as committed to bleeding the other dry, and the other doesn’t complain, but calls it unconditional love,” Garcia said in his privileged speech. Rama questioned why the Capitol posed as a bidder-challenger to Filinvest’s unsolicited proposal if they seriously believed the terms of the contract are dubious. But Garcia said that as Capitol was a bidder, they have an interest in the project. “Beyond that, I think all Cebuanos should take an interest in this contract. It is precisely because of the perceived lack of interest on the part of Cebuanos in the deal that these highly anomalous and illegal provisions were given the opportunity to be inserted,” Garcia told the BusinessMirror. With the Filinvest deal on the chopping block, other wholesale deals with the SM and Ayala groups, who have been reported to have informally divided the SRP and agreed to complement each other and with Filinvest, is on indefinite limbo. So is the vision of an SRP with 80,000 jobs, a bustling mini metropolis and a complex of skyrises to rival our Asian neighbors. Political rezoning Political insiders see an attempt to return the Garcia family into Cebu City politics, nine years after the downfall of the governor’s cousin, former mayor Alvin Garcia, in the hands of his former mentor Tomas Osmeña. Rama, who will be most affected when the Garcias mount a comeback, is unfazed. “Let the politics of Cebu City be left for the people of Cebu City,” Rama said. “It’s free to dream, but I trust the people of Cebu City will vote for people who have protected their cause and share their vision.” He said a Rama administration will only continue the good things and long-term vision of Osmeña and the local party he leads. Even Rama, with all his friendliness and amiability, is being doubted by some Osmeña loyalists to have cozied up to the Garcias. Rama, after all, is the most viable successor to Tomas—whether he sticks with his party with Tomas as the leader or jumps into the Garcia family wagon with Gwen as the boss. The 2010 elections will not only define the continued existence of the country’s oldest political clan—the Osmeñas—and the apex of the rise of the Osmeñas’ former lawyers and lieutenants, the Garcias. It will also define the direction of Cebu City, one of the most progressive cities in the country, whose progress has been defined by the “architecture” and long-term plan set by Tomas and his local party BO-PK. Strongman Tomas is the last of the Osmeñas in politics and with no clear successor from the family. His son Miguel is too young and wife Margot too uninterested in politics. His brother, former senator Sergio III, has health issues, while cousins former senator John Henry and his brother former governor Emilio said they have retired. John’s son John Gregory seems far from making a comeback with a string of drug chemical charges against him and without the support of his own father. Tomas himself is still fighting cancer in Texas as of the present. The Garcias, in contrast, have more options: aside from the governor who has one more term in 2010, and two congressmen, there’s still the governor’s brother Winston who is GSIS president—himself a former Cebu province board member—as well as several more potential candidates from the family of former mayor Alvin. The governor’s younger brother insists the family has no interest in Cebu City politics and they do not have an intention of going head-on against Osmeña in anything and everything. “The ideal scenario is where the mayor and governor respect each other. They don’t have to love each other. Just respect. You can’t have the mayor calling the governor ‘Queen of Darkness.’ That’s ungentlemanly and counterproductive,” Garcia said. “The family has repeatedly stated that we have no interest in Cebu City politics. If we were [interested], then I would have run in the city when Tomas Osmeña asked me to be his councilor,” he added. “But we will always be interested in how the city is being run because that is the right thing to do.” |
Tatang Sy’s advice to children
Written by Honey Madrilejos-Reyes / Reporter |
Thursday, 30 April 2009 23:50 |
IT may be said that the various crises this country has experienced—some of them caused by internal difficulties and some from setbacks originated abroad—are battles all won by the SM Group, founded by the Philippines’ richest man, Henry Sy Sr. And even if countries worldwide are battling the impact of the global recession, the group, which owns the largest chain of shopping malls here, is still seeing opportunities in these tough times and stays confident about ending the year with a double-digit growth in profit. BUSINESS lessons are shared by Henry Sy Sr. (top left) with his six children, three of whom are shown here— Tessie, Hans and Harley. While the older Sy still sits as chairman of SM Investments Corp. (SMIC), the group’s holding firm for investments in shopping malls, financial services, retail merchandising, real-estate development and hotel and entertainment, it is now his children, led by eldest daughter Tessie Sy-Coson, who run the empire. The BusinessMirror this week got a rare chance to talk to three of Mr. Sy’s six children—Tessie, Hans and Harley—what advice their father gave them in dealing with the current crisis. Tessie, who chairs the country’s biggest bank BDO Unibank, Inc., says, “Patience and prudence. But remain aggressive when opportunity arises.” Hans, who heads SM Prime Holdings in charge of mall development, adds, “My father just tells us there’s always time for opportunity, but nevertheless he still reminded us not to chew more than what we can swallow. I guess that’s what brought us to where we are today. Be very prudent, be very practical and be very realistic about the situation.” Youngest son Harley, who sits as president of SMIC, imparts, “Basically, what my dad said is to work harder.” Mr. Sy’s three other children, Henry Jr., Elizabeth and Herbert, head the group’s property development, hotel and entertainment and supermarket operations, respectively. The SM group celebrated last year its 50th anniversary, marking the growth of the company that started from one shoe store in Carriedo, Manila to a well-built conglomerate with current market capitalization of P144.8 billion. And this accomplishment, says Mr. Sy’s children, owes much to their father’s determination, guts and grounded optimism. “He has been through many challenging times and seen many economic and political changes in the country. But he has been fortunate to be able to move his business on the uptrend throughout the changing times. He has maintained a low profile until recently when his company had become public. He knew long ago that his journey in business would take a thousand steps. He has already climbed several hundred steps and now, he expects us to continue the climb to the thousandth step,” they said. On Wednesday, the country’s retail king received the Lakan ng Kalakalan Award from the Employers’ Confederation of the Philippines (Ecop). The award was handed out by President Arroyo, Ecop chairman Miguel Valera and Ecop president Sergio Ortiz Luis in rites at the Manila Hotel. The man called “Tatang” by employees is considered iconic in Philippine business because his saga mirrors in many ways the ups and downs of the country’s economy—only, he almost always makes the right gamble when things are pretty low, investing in big projects despite economic gloom. Call it instinct, business savvy or faith, or a combination of all, says one observer, adding, “maybe that’s why the company’s jingle says “we’ve got it all for you.” |
Tourism offers real estate growth areas
Tuesday, April 28, 2009
TO be able to contribute on the region’s development, the Chamber of Real Estate and Builders Association Inc. (Creba) wants to attract more foreign direct investment and tourists to Cebu.
Citing the report of the Department of Tourism on visitor arrivals in the country, Creba Manila chairman Jimmy Cura said that of the more than three million visitors in the Philippines from January to December 2008, “75 percent (visited) Cebu.”
But then, he said, “we ought to be doing better” as a tourist hub given the tourist destinations, the rich cultural heritage and people who are conversant in English.Cura spoke during a forum hosted by Creba-Cebu, which held the induction of its new officers, trustees and members last Friday.
As a tourist destination, Cebu can attract more foreign direct investments by exploring and improving the information and technology sector, said Cebu Investments and Promotions Center managing director Joel Mari Yu.
Advantage
More tourists are expected to arrive in Cebu with the opening of new resorts in Mactan.
Yu said the real estate industry can take advantage of the expected growth in tourism—as well as in retirement tourism—by promoting Cebu as the “best place to do business” and as a “second home.”
He stressed, though, that the right infrastructure has to be in place first.
Efrain Pelaez, Coral Point Development Corp. president, said Cebu is “missing a lot of tourism infrastructure.”
He cited the need for concrete roads to Cordova and around Mactan Island, in general.
Pelaez also lament the lack of drainage facilities and presence of slum dwellings on the island.
“How can we have an island paradise (if it is) a garbage pit?,” he asked. (Katrina G. Coloso, UP Mass Comm Intern)
Housing as econ stimulus
THE national chapter of the Chamber of Real Estate and Builders Association Inc. (Creba) proposed to the National Government to come up with a national housing program that will not just address the housing backlog in the country, but also create more jobs.
Creba director Jimmy Cura said that if the government will consider the multiplier effect of real estate development, the industry would be able to provide stable sources of income to a number of unemployed Filipinos.
Cura led a panel discussion participated in by government agencies and private companies during Creba Cebu’s induction of officers last Friday evening.Based on a formula used by real estate developers, every house that is constructed would mean 60 jobs, Cura said.
“The (housing industry) can be an economic stimulus,” he added.
But to help the government, Cura also encouraged players in the real estate industry to actively participate in the local planning board. He said that with their participation, the industry would be able to positively influence the planning processes of the local government.
“You can also help develop the mentality of ‘first things first’ in the planning process,” he said.
Cura also said the government should invest more on infrastructure projects that would allow tourists to access “the many gems” in the country.
“Infrastructure (for tourism) is woefully lacking,” he said.
If the needed infrastructure—like airports, bridges and roads—are in place, Cura is confident that the country would have 10 million tourist arrivals in a year.
He said that compared to its neighboring countries, the Philippines being an island nation, is at a disadvantage because the country is unable to enjoy border tourism like Malaysia and Thailand.
Malaysia, he said, also gets 60 percent of tourists that are originally bound for Thailand because the two countries can easily be traveled by land.
Aside from infrastructure that will provide easy access to destinations, Cura said government also needs to ensure ample supply of clean water and electricity in tourist spots. (DME)
Osmeña: Political and business cycles in Cebu
Antonio V. Osmeña
Estatements
AFTER a 35-year rule in Philippine national politics, then President Sergio Osmeña suffered his first defeat in 1946, in the hands of Manuel Roxas.
Politics in Cebu in the early 40s and 50s was ruled by Vicente del Rosario and Manuel Cuenco. It was only in the late 50s that the second generation Osmeña, Serging Jr, got involved in Cebu politics.Meanwhile, the Gaisano clan ruled the merchandising business in Cebu, along with a few others that were the most popular establishments on Magallanes Street—Sen Hiap Heng and United Merchant.
In the real estate subdivision development, the Osmeñas, Gochan, Limkaking and Gonzales ruled the housing business for four decades until the declaration of martial law.
In shipping, entrepreneur William Chiongbian pushed others to make Cebu the center of the shipping industry. The shipping industry has made Cebu the center of trading in the Visayas and Mindanao.
SUPPLY-DEMAND. The greater intensity of real estate booms and depressions, as well as the longer life of the cycle span, are a direct effect of the inflexible and peculiar economic characteristics of real estate that influence its supply and demand.
Once an oversupply of housing saturates the real estate market, economic inability to adjust the supply to active demand creates abnormal vacancy ratios and competitive pricing conditions, upon which real estate depressions have fed in the past.
Basically, real estate cycle is, in fact, a composite of the general business and housing or construction. But obviously today, those who enter the real estate market have also to contend with forces that affect real estate as a commodity, such as political wrangling among local elected officials due to the absence of a comprehensive long-range real estate development planning and peace and order condition of the community.
CEBU POLITICS. The political cycle in Cebu started with Gov. Manuel Cuenco in the early 50s.
The political cycle of the Cuencos will end with Rep. Antonio V. Cuenco’s term next year. The political cycle of the Osmeñas will end with Mayor Tomas next year unless Rogelio, third generation of Sergio, runs for mayor. Councilor Richard, a fourth generation of Sergio is still too much of a neophyte for the mayorship.
What about Serge and Georgia, brother and sister of Mayor Tomas? During the term of Gov. Lito Osmeña, the 40-hectare of provincial lot occupied by the Club Filipino golf was bidded out to the Ayalas, triggering other real estate investments to come to Cebu.
Most of the residential subdivision developments in Cebu is no longer under the monopoly of true-blooded Cebuanos.
Real estate requires large capital outlays, a fact that edged out local players.
RP BPOs urged to attract EU
THE country’s business process outsourcing (BPO) industry should now start to work on getting European companies to outsource its services to the Philippines, especially when most companies are now looking for ways to cut on costs after suffering losses caused by the global financial crisis.
Opportunities from Europe are also considered to be “endless,” ranging from engineering, architecture, graphic design, procurement, human resource administration, accounting and financial services and other back office services, said Henry Schumacher, executive vice president of the European Chamber of Commerce of the Philippines (ECCP).
“The (country) should export designs, not designers,” he added during an interview with reporters yesterday.Schumacher also referred to Europe as a “large BPO market,” even larger when compared to the United States.
But based on data from the Business Process Association of the Philippines (BPAP), out of the $6.8 billion worth of exported services by BPOs in 2008, only 10 percent were from European companies.
At present, European companies outsource to India, not because it is the biggest outsourcing destination, but it has successfully made itself visible to the European market, Schumacher said.
Visibility in Europe is among the concerns that Schumacher wants to be addressed by the Filipino BPO industry.
Aside from this, the country should also work on “successfully branding the professional Filipino.”
“With eight million Filipinos outside (the Philippines), somebody must have been touched by a Filipino in one way or another,” he said.
Schumacher also stressed that there is a need to create a European champion who can talk about how the Filipinos helped his or her business.
Even if ECCP has committed to help address these concerns, Schumacher said industry players should not expect the results “to be delivered on a silver platter.” “I need to see some hard work here,” he added.
Schumacher also observed that various sectors in the Philippines have been “neglecting” the European market for “the longest time.”
“The (Philippines) have always looked East, because at the end of the rainbow, there is the American dream,” he said.
Schumacher launched the “Look West” campaign, which aims to encourage BPO players to look at Europe.
‘Cooperate, link with rest of Asia’
A GOVERNMENT research institution engaged in independent and non-partisan research recommended that the Philippines cooperate and coordinate with other East Asian countries to accelerate intraregional trade and investment to cope with the global financial crisis.
The Philippine Institute for Development Studies (PIDS) pointed out that these investments will not only create job opportunities in the region but also boost the growth potential of promising industries, like business process outsourcing and tourism.
Speeding up intraregional trade and investment will encourage the Philippines to reduce its dependency on the US, especially in terms of export, and to increase reliance on neighboring countries.In yesterday’s forum on non-tariff measures, global financial crisis and the Philippine outlook for 2009 organized by PIDS and the Cebu Chamber of Commerce and Industry, PIDS president Dr. Josef Yap said that the country will need a stimulus plan to contribute to investor confidence and help prop up the economy amid the global economic slowdown.
The Philippine Government passed its version of a stimulus package in the form of a P330-billion economic resiliency plan—P100 billion of which is for infrastructure projects and P30 billion for social protection programs.
Focus
“Given this condition (crisis), the government should act appropriately by putting up well-structured plans and reforms, avoiding leakages to corruption, and ensuring that programs and investments employ the most people and focus in areas that are likely to be hardest hit by the slowdown,” Yap said.
He lamented that the Philippine Government has not been putting up enough investments in the country, as shown in the continuous decline in new investments’ contribution to the gross domestic product (GDP).
However, it managed to cushion itself from effects of the crisis due to stable remittances in peso terms, contained slowdown in manufacturing and the continuation of public investment programs.
Yap expressed worry, though, that the country might not be able to sustain its capacity and fiscal revenues to cushion itself if the global financial crisis continues next year, an election year.
For East Asia to weather the global financial storm as a region, PIDS also called for a coordinated stimulus package in East Asia—a package that is expected to boost consumer demand in individual countries while eliminating the perception of trade protectionism.
Yap expressed hopes that part of China’s CNY4 trillion-fiscal stimulus package, for instance, will benefit the Philippines with China investing here.
PIDS senior research fellow Dr. Gloria Pasadilla said the country should also determine what sort of investments it wants to attract and help build.
CHI posts ‘all-time high’ revenue
CEBU Holdings Inc. (CHI) posted new all-time high revenue records for its 2008 performance, despite the decline of the company’s share prices that closed at P1.56 per share from P3.60 at the end of 2007.
In an interview with reporters yesterday, CHI president Francis Monera, however, did not attribute the 57 percent decrease of its stock prices to any particular factor.
Instead, he said it was “more of a general trend” of the overall market.
He added that even with the decline, CHI still came out strong compared to the 333 percent decline of the whole Philippine Stock Exchange (PSE) index or the property index decline of 461 percent.
In his report during CHI’s annual stockholders meeting, Monera said the company was able to register P4.3 billion in total stockholders equity and declared cash dividends amounting to P134 million at P0.07 per share last November 2008.
Last year, CHI’s consolidated revenues reached P1.5 billion-—its highest ever—while net income was at P399.5 million, 59 percent higher compared to its 2007 performance.
Forty-nine percent of the total consolidated revenues were generated from the sale of commercial and residential lots, including the 1.6-hectare property within the Cebu Business Park (CBP).
During the early part of 2008, six remaining lots at Asiatown IT Park were also sold.
Income from the lease of office and retail spaces accounted for 44 percent of CHI’s combined revenues, which was
attributed to a higher demand from the outsourcing and off-shoring industry.
Around 55,500 square meters of office space will be added at the CBP upon completion of new developments that include three Lexmark buildings, Chinabank and Creativo.
Meanwhile, Ayala Center Cebu’s The Terraces has also increased its leasing portfolio by 8,500 square meters, bringing the total leasable space to 90,000 square meters.
Prudence
The opening of The Terraces and The Walk—a retail complex located at the Asiatown IT Park—registered P593 million in revenues last year, higher by 10 percent compared to 2007.
For its real estate undertaking, CHI’s Amara launched its north phase last October and a total of 45 lots were sold and it also booked three reservations to date.
“With this, Amara has maintained its market leadership with 54 percent of relative market share,” Monera said.
At present, total assets of CHI stand at P5.7 billion. This six percent increase from the 2007 level, said Monera, was a manifestation that the company has operated with “financial prudence.”
“Despite higher investments due to retail expansion, total liabilities as of end of 2008 were maintained at around P1.4 billion and bank debt is at P330 million only,” Monera told share holders.
Remaining revenues, accounting for about seven percent, represent equity earnings from interests and other income.
Yesterday, CHI also announced that Antonino Aquino, former president of Manila Water Co., will be replacing Jaime Ayala as chairman of CHI.
Ayala will be transferring to the Ayala Corp. where he will sit as a member of the board.
Investment plan to be signed soon
By Ma. Elisa P. Osorio Updated April 30, 2009 12:00 AM
MANILA, Philippines - The Investments Priorities Plan (IPP), one of the tools the government is using in order to discourage businesses from laying off workers, is expected to be signed by the President very soon, Trade and Industry Secretary Peter B. Favila said.
According to Favila, he has already signed the IPP and the final nod of the President is the only thing that is keeping it from being implemented. Favila said he expects the approval of the IPP to happen very soon.
The IPP should have been ready last March. However, consultations with various industry groups have delayed the proceedings.
The 2009 IPP is very important because not only will it encourage investments to come in the country by giving tax breaks, the new feature of the IPP likewise gives incentives to firms that will not remove workers.
The 2009 IPP will be similar to the one passed in 2008 except for the job saving/job creation projects.
“This is an option to existing firms on how they can avoid laying off workers,” BOI Undersecretary Elmer C. Hernandez said. “These are difficult times and extraordinary measures are needed,” he added.
Hernandez said that under the law, firms that will not have additional investments do not qualify for income tax holidays. However, because these are extraordinary times, Hernandez said the government will give additional deduction for labor expense. This would bring their taxable revenues down thus reducing tax payments to the government.
Philippines, it's our turn to 'dream a dream'
ASK GONEGOSYO By Joey Concepcion Updated April 30, 2009 12:00 AM |
The first time I watched Susan Boyle in YouTube, I said to myself, what a perfect comparison to the Philippines and its people. If only through this example, Filipinos will start to realize that we have prejudged our own country, then maybe this could spark a change in attitude and bring about greater confidence and ‘malasakit’ for the future of this country.
Last week’s column, I dreamed a dream for the Philippines, was one of the most interesting columns I have managed to write. A fellow columnist in Star, Babes Romualdez, sent me a note, saying that it was a great column. I got a call from Peter Favila. He was with PGMA at that time, and they congratulated me for the column. So many others also extended their congratulations. This is why I thought it would be best to turn the column into an advocacy ad. Through this, I would like to try to see if we can bring about people to give their thoughts on the Philippines’ turn to dream a dream.
For the past four years of our advocacy, we have been sharing the advocacy of an attitude change with our viewers on TV and the audience who attend our caravans, teaching sessions, forums, and summits. We have long campaigned for a change in attitude among many kababayans. We basically teach the GoNegosyo mindset change, which is to be enterprising. Not everybody can become entrepreneurs, but everybody can become enterprising in whatever they do. To be enterprising, one must love his country. An enterprising individual must be an optimist, must have the passion, must be hard working and must be persevering.
While the whole world faces an economic recession, the Philippines has somehow performed much better than the rest. Although our budget deficit seems to be increasing, I guess we can allow some leeway, as most governments around the world are spending more to stimulate demand and help cushion the recessions in their respective countries. The key though is how the money is spent. For as long as it is spent for projects that create a multiplier effect in creating more negosyo opportunities, then it serves its purpose. For example, money is best spent in airports set in areas that have the best tourism potential or more roads that will enhance not only tourism but will also give access to farmers to have products transported to the markets at lower costs. I believe PGMA is trying to do this. It would be great for them to keep advising the people on the progress of each project.
This weekend another dream may be fulfilled. Who would have thought that Manny Pacquiao – an amateur boxer from GenSan – would reach this level of stardom? The Pacquiao-Hatton fight reminds me of the Ali-Frazier ‘Thrilla in Manila’. I was just in my teens when I watched that fight in Araneta Coliseum. This time, I will get the chance to witness Manny’s next fight as I take my family on our annual vacation this month. Manny Pacquiao is our endorser for Vitwater. He has indeed been an inspiration to many Filipinos. He has actually helped create awareness for the Philippines, as he achieves milestones in his boxing career. Hopefully, people will now know that we do not live in trees. Win or lose, Pacman would achieve his dream. This is important for many Filipinos. We should dream, even how impossible it may seem.
Let the movement for an attitude change bring about a more enterprising Filipinos. This is what GoNegosyo wants to achieve. Join us in spreading the good news on positive change. Send me your inspiring story or that of your friend’s. These stories are sources of strength and hope that our dreams may be achieved one day…
Tuesday, April 28, 2009
Property developer keeps optimism on Cebu market
Updated April 29, 2009 12:00 AM
CEBU, Philippines – Maria Luisa Properties remains bullish of Cebu’s real estate market and continues to develop more projects despite the gloomy global economy.
Maria Luisa Properties general manager Annabelle O. Aboitiz said in an interview that the global financial crisis has been really tough for the real estate players especially that it prompted consumers to be very cautious on their investment decisions.
Added to that is the unstable price movement of construction materials, which has been drastically moving up and down for the past months, which in turn prompted the company to sell lots only instead of the initial plan of selling house and lot packages in its latest project in Pulangbato, Talamban, the Redstone Village.
“Cement, gravel prices have soared really high in the previous months especially when we were starting the development. Since we were deeply burdened by the price increases of construction materials we decided to sell out lots only after we have finished the construction of four model houses,” said Aboitiz.
Redstone Village is a one-hectare property composed of 75 raw lots with a 95 to 100 square meter cut and with price per square meters ranging from P7, 500 to P8, 000.
She said the crisis developed resistance among real estate buyers considering the uncertainty of the economy and the negative news concerning other investment options.
However, despite the slowdown, Aboitiz said the company still believes in Cebu’s market potential and they continue to look forward to developing more future projects here.
“Based on our prior experiences with the market, we noted that despite the hard times, more and more people still favor Cebu as a place to invest and to live in so we foresee that Cebu will later on become a really big market for the real estate industry. At this point, developers are still developing properties and buyers are still buying,” said Aboitiz.
She said that with Pag-Ibig’s continued support in the loan financing as well as the aggressiveness of banks to give out loans, real estate buyers are still given the privilege to invest for their homes.
In fact, Maria Luisa Properties already has an upcoming project in the pipeline which will be another lot only subdivision called The Heritage in Jagobiao, Mandaue City.
Maria Luisa Properties started with a 10-hectare high-end Maria Luisa Estate Park in 1965. — Rhia de Pablo
Cebu beats other cities for Bombardier facility
By Rhia de Pablo Updated April 29, 2009 12:00 AM
CEBU, Philippines – Cebu City was chosen, among 62 metropolises around the globe, as one of the two locations for the global finance shared services center for accounting and reporting of the multi-national transportation company Bombardier Transportation.
In a recent ceremony, Bombardier Transportation formally opened its Global Finance Shared Service Center for Accounting and Reporting here in Cebu at the 14th floor of the new TGU Tower in Asiatown IT Park with 20 employees that is expected to grow by 150 in 2014.
Bombardier Transportation is a world leading manufacturer based in Canada engaged in innovative transportation solutions from commercial aircraft and business jets to rail transportation equipment, systems and services.
Bombardier general manager and director for finance accounting and reporting Heiko Kafer said that after months of training their local based accountants, Bombardier Transportation will migrate transactional activities in Cebu for the English speaking countries and Asian countries this October while the other one located in Cluj, Romania will service European countries requiring different language capabilities.
He said that the primary objective of moving to a Finance Shared Service Approach is to better focus on internal customers, enhance business support, improve and standardize processes, centralize accounting expertise, improve competitiveness and ensure increased quality of balance sheet and financial results delivered to the market.
Meanwhile, the company’s VP Finance Shared Services, Accounting and Reporting Olivier Guitton underscored that their Finance Shared Service center in Cebu will be sustainable and successful because people are the basis of their excellent delivery of services.
“Cebu was chosen among the 62 cities because in Cebu there is an availability of highly qualified accounting staff at competitive cost who are used to a shared service mentality so we can ensure excellent delivery of services and support for our business for the worldwide market,” said Guitton.
Kafer said that the search for the location of their two Finance Shared Service centers started in August of last year and they have searched cities from all over Europe and Asia.
Among the shortlisted countries included Chinea in India and Kuala Lumpur in Malaysia but Cebu was chosen because of its customer-oriented and service oriented culture.
Governor Gwendolyn Garcia said the launching stressed that the choice of Bombardier to locate one of its global financial center here in Cebu shows the continued confidence of foreign investors to Cebu as an area of growth.
The presence of Bombardier Transportation in the country has been started since 1996 as the company landed contract for the signalling system of the Metro Railway Transit (MRT) and now they are targeting several projects in Manila which includes the Line 8 project which runs from North Avenue to the East of Manila for rolling stock or the trains itself and the signalling systems.
They have also supplied Q400 and Q300 commercial aircraft to Philippines Airlines’ low cost segment PAL Express.
Bombardier Transportation has presence in over 60 countries and has so far installed base of over 100, 000 vehicles worldwide.
It offers the broadest range of product portfolio and is recognized as the leader in the global rail sector as well as the aerospace industry.
Its revenues for the fiscal year 2008 was at $17.5 billion in which $9.7 billion or 55 percent was gotten from its aerospace segment and $7.8 billion or 45 percent from its total revenues was taken from its transportation segment.
Bombardier Transportation is traded in the Toronto Stock Exchange and is listed as an index component to the Dow Jones Sustainability World and North America Indexes.
Results of SRP technical study "very promising"
Updated April 29, 2009 12:00 AM
CEBU, Philippines – The Asian Development Bank through the Cities Development Initiative for Asia submitted yesterday the results of the six months technical study it made on several needed infrastructures at the South Road Properties.
Foreign consultants led by Peter Cumming, CDIA-SRP team leader, said that the results of the initial study are very promising as these entail provisions from both technical and organizational aspects.
“The results really are promising, it’s the nuts and bolts recommendations which are up for the city to take,” Cumming, the one responsible for the master plan of Dubai City, said.
CDIA, he also said, is negotiable for further planning, engineering and financing.
“Now is the time that developers are starting to make a commitment at the SRP, so it is best to have these provisions from roads, to water to power,” Cumming added.
He said that their recommendations include an open space for parks and the green technology like the dual water system and the district cooling.
Cebu City administrator Francisco Fernandez said that in the next two weeks, the city government will decide which among the recommendations will be considered.
As to the organizational structure, Fernandez said it is included among the recommendations to be considered.
He said the SRP Project Monitoring Office is “applicable for today”.
“Who knows in the next 20 years, so we may consider a private entity or a corporation to look after the SRP,” Fernandez said.
He also said that the city is just grateful that they had availed of world-class advices from world-class consultants.
In the next months, the city may opt to proceed with CDIA’s Phase II, involving detailed studies prior to the implementation stage.
Last year, the City Council authorized Mayor Tomas Osmeña to sign the Technical Assistance Agreement with the CDIA.
Osmeña was authorized by the Council through SP Resolution No. 08-329 dated August 13, 2008 to seek assistance from the ADBank through its CDIA for project development and financial structuring of the SRP.
On August 26, CDIA approved the request for technical assistance in the amount of $499,000. - Ferliza C. Contratista/MEEV (THE FREEMAN)
Filinvest Land to roll out 29 new projects
By Zinnia B. Dela Peña Updated April 06, 2009 12:00 AM
MANILA, Philippines - Filinvest Land Inc., one of the leading residential property developers owned by the Gotianun family, is ready to roll out 29 new projects and phases this year with an estimated sales value of P7.4 billion.
In a filing with securities regulators, FLI said it has a sizeable landbank of 2,511 hectares which will be enough to ensure its continued expansion and meet demand across all market segments.
In the pipeline is The Linear, FLI’s first high-rise residential building which is targeted to open before the end of the year. Situated in Makati City, the project will have two 23-story L-shaped buildings and a commercial component.
Last year, FLI launched 25 new projects with an estimated sales value of P6.6 billion. This brought to 71 the number of ongoing projects FLI had as of the end of 2008.
Among these projects include FLI’s first project in Butuan City, Agusan del Norte, called Filinvest Homes Butuan, as well as a new MRB (medium-rise building)project called Bali Oasis Marcos Highway.
Over the past two years, the company has expanded into other high-growth regional centers to provide an alternative to buyers who do not want the daily commute to and from Laguna or Cavite but cannot afford the high prices of high-rise condominium projects within Metro Manila.
Aside from expanding geographically, FLI has also ventured into new segments of the market which include beach resort develoment via Kembali Coast on Samal Island, Davao.
Kembali Coast is a 50-hectare Asian-Balinese inspired island resort residential development with a 1.8-kilometer beachfront as one of its main attractions and amenity.
FLI likewise branched out into the development of condotel units through Grand Cenia Condotel in Cebu.
The company posted a net profit of P1.87 billion last year, 28 percent higher than the previous year. Total revenues rose nine percent to P4.77 billion, 67 percent of which accounted for real estate sales.
Rental income likewise grew 11 percent to P1.135 billion.
Despite the difficult business climate, FLI’s core business of residential housing for the socialized, affordable and middle-income markets, continue to remain robust.
Total residential sales reservations reached a record P6.6 billion in 2008, up 32 percent from the year earlier level.
Ayala Land, Federal Land eye big Fort Bonifacio projects
By Ma. Elisa P. Osorio Updated April 28, 2009 12:00 AM
MANILA, Philippines - Two local property giants Ayala Land Inc. and Federal Land Inc. have expressed interest to compete with developer MegaWorld for the development of an 8.38-hectare government property that is expected to bring in investments of up to P15.6 billion.
In a press conference, Bases Conversion Development Authority (BCDA) president and chief executive officer Narciso L. Abaya said they hope to dispose of two big Fort Bonifacio lots this year.
These are the 8.38-hectare property known as North Bonifacio Lots and a 35-hectare expanse that used to be occupied by the Joint United States Military Assistance Group (Jusmag). Of the two, Abaya said the Jusmag property is expected to bring in more revenues.
The minimum bid price for the North Bonifacio Lots is P2.789 billion while the minimum bid price for the Jusmag Lot is still undetermined.
For the North Bonifacio Lots, Andrew Tan’s Megaworld submitted an unsolicited proposal to buy the property for P33,283.88 per square meter, same as what Metro Pacific paid BCDA some years back for another property at Bonifacio.
The proposal of Megaworld will be used as the minimum bid price for the land which will now be up for a competitive challenge, better known as a Swiss challenge. Under the rules, BCDA can invite other developers to submit their own proposals. Megaworld has the right to match the proposal of other firms.
Abaya said Ayala Land and Federal Land have shown interest in developing the land. Likewise, BCDA said they will invite Chinese developer Shimao to bid. The Shimao Group initially showed interest in investing in the area.
Megaworld’s proposal for the North Bonifacio Lots is a mixed use development of more than 500,000 sqm of gross floor area and is predominantly residential. Investment commitments will reach at least P15.6 billion.
For the Jusmag lot, Abaya said Ayala Land has submitted an unsolicited proposal for the development of the area. He said Ayala submitted its project proposal last year.
However, they have not acted on the proposal because they are waiting for the master plan of the Jusmag property to be completed. Abaya refused to reveal the proposed investment of Ayala.
BCDA vice president for business development Aileen Zosa said the current market price of the Jusmag property is P10,000 to P15,000 per square meter. Zosa said they expect the market price to increase once the study is completed.
“By end of 2009, we would have disposed Jusmag,” Abaya said.
According to Abaya, the procedure for disposing Jusmag will be the same as the North Lots as per the guidelines released in May 2008 by the National Economic and Development Authority (NEDA).
SMDC rolling out P15-billion new projects
By Zinnia B. Dela Peña Updated April 28, 2009 12:00 AM
MANILA, Philippines - Upbeat on the property sector, SM Development Corp. (SMDC) is rolling out four new projects estimated to cost around P15 billion as part of efforts to further boost sales.
At the same time, SMDC president Rogelio Cabunag said the firm’s first quarter net earnings reached P400 million this year, more than 28 times the P14 million reported the previous level. This was driven by a 109-percent jump in sales to a little over P1 billion.
“We’re quite bullish that’s why we have lined up new projects this year,” said SMDC vice-chairman Henry Sy Jr. in a press briefing following the company’s stockholders’ meeting yesterday.
Sy said the company will continue to beef up its landbank to further strengthen its hold in the highly-competitive industry. The company currently has 1.4 million square meters of undeveloped land. “As we see the market continuing to strengthen, we keep developing and buying properties to ensure continued growth.
Cabunag said the four high-rise residential projects include Princeton Residences, Tree Residences, Wind Residences in Tagaytay and Jupiter Residences.
Princeton Residences, a 37-story condominium building located in a 2,400-square meter property along Gilmore St. in Quezon City, is estimated to cost P1.5 billion. Construction will start this year and is slated for completion in 2012. A total of 1,088 units will be offered to the public.
Tree Residences, on the other hand, will involve the development of eight 12-story mid-rise buildings, costing around P2 billion. The project, offering a total of 2,420 units, will rise on a 5.4-hectare pro-perty on Imelda Ave. in Cainta, Rizal and is targeted for completion in 2012.
Wind Residences, meanwhile, is expected to cost P4.3 billion and will make available a total of 2,300 units. Completion of the project is set for 2015.
Situated in Jupiter and Reposo streets in Makati, Jupiter Residences comprises six 40-storey towers with a total of 5,224 units costing around P7.2 billion.
The company has earmarked P7.2 billion for capital expenditures this year or 40 percent higher than the 2008 level. Around 80 percent of the capital budget will be sourced from internally generated funds while the remaining 20 percent will come from borrowings
Following the success of Mezza Residences in Sta. Mesa, Manila, SMDC will launch Mezza Residences 2 consisting of two buildings with 38 storeys offering 1,353 units.
Other projects in the pipeline will be located in Taft Ave., Manila, España corner Mayon in Quezon City and another project in near the MRT Boni Station in EDSA.
“These projects are products of SMDC’s winning combination of prime location that offers convenience and accessibility to homeowners, upscale look and appeal, first rate amenities and affordable payment plans,” Sy said.
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