Paris-inspired condo to generate P3.5B sales

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October 21, 2024

MEGAWORLD Corp. said it expects to generate P3.5 billion in sales from its Pampanga project Saint-Marcel Residences.

The fourth condominium project in the 35.6-hectare Capital Town in San Fernando, Pampanga, the 17-story Saint-Marcel Residences boasts of 361 smart home units in varying types with sizes ranging from 24 square meters (sq.m.) for a studio unit to a 103 sq.m. three-bedroom unit.

A Parisian-inspired residential condo, Saint-Marcel Residences will rise at the corner of Wilshire and Chelsea Streets in Capital Town, an area the company said is more private.

“It will be surrounded by a vibrant commercial strip, a sprawling plaza, and a soon-to-rise transport hub, while also being just about a two-minute walk away from the township’s sprawling rainwater park,” the company added.

Eugene Lozano, Megaworld senior vice president for sales and marketing for Pampanga, noted the strong demand for themed residential developments in Capital Town that encouraged the company to build Saint-Marcel Residences.

“We envision Saint-Marcel Residences to be an appealing address for young, well-traveled Kapampangans who want to immerse themselves in the beauty of their community,” he said.

All units at Saint-Marcel Residences will come with wireless smart home systems that can be accessed remotely using a dedicated phone app, which gives residents the ease and convenience of controlling several unit features, including lighting fixtures and other smart appliances in the living, kitchen and dining areas as well as the bedroom.

Aside from this, the condo will also have various sustainability features, such as low flow rate fixtures, occupancy sensors at hallways, energy-efficient equipment, rainwater harvesting facility, and materials recovery facility, Megaworld said.

Saint-Marcel Residences is set for turnover in 2030.

D&L’s head office bags LEED gold certification

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Ruelle Castro

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October 21, 2024

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D&L Industries Inc. said has obtained LEEDv4 Gold certification for LBL Building, the company’s head office in Quezon City.

The certification was given by Barone International and is the company’s second Leadership in Energy and Environmental Design (LEED) building after its Batangas plant, Central Hub.

The LBL Building certification is for the operation and maintenance (LEED v4.1 O+M), D&L said.

The LEED certification requires a 12-month performance monitoring and evaluation of key environmental aspects which include greenhouse gas (GHG) emissions, energy efficiency, water efficiency, ozone protection, location and transportation, waste management, environmental impact, and indoor environment quality, it added.

NEDA board okays P65B projects, changes in IFP process

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Ruelle Castro

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October 18, 2024

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Photo courtesy of NEDA

The National Economic and Development Authority (NEDA) Board has approved P65 billion projects, one in transportation and the other in health.

The NEDA Board on Wednesday also approved proposed amendments in the procedures on infrastructure flagship projects (IFPs) to include those led by private sector.

In a statement yesterday, NEDA said the board approved the P37-billion Mindanao Transport Connectivity Improvement Project (MTCIP) and the P27.92-billion Health Systems Resilience Project (HSRP) Phase 1 of the Department of Health.

NEDA said the MTCIP is proposed to be financed by an official development assistance (ODA) loan from the World Bank (WB).

The project, submitted to the government’s Investment Coordinating Committee in July, will connect Regions 10, 11 and 12 by upgrading and ensuring the long-term maintenance of the Cagayan de Oro-Davao-General Santos Corridor. This includes road sections encompassing 277.4 kilometers (km) from Cagayan de Oro to Davao and 150.8 km from Davao to General Santos City.

MTCIP also involves the upgrade of three local roads totaling 129.86- km Link Road 1 from Sayre Highway (Patulangan) to Cawayan-Kibenton in Bukidnon; Link Road 2 from Fatima Malabog Road to Saloy-Bantol-Davao-Bukidnon Road to Panabo City; and Link Road 3 from the National Highway Junction in Poblacion Malungon to Sta. Maria Road, Davao Occidental.

“The project will enhance capacity, climate resilience, road safety, capacity building, institutional development, project management, and contingent emergency response measures,” NEDA said.

“Through the MTCIP, we anticipate significant economic growth in Mindanao’s outlying regions as improved transportation will make travel more accessible and ease the delivery of agricultural goods and services,” said Arsenio Balisacan, NEDA secretary.

The P27.92-billion HSRP Phase 1, meanwhile, aims to help the country generate savings from reduced hospitalization and reduction in premature mortality from non-communicable diseases by strengthening the local health system.

The project, also to be funded through an ODA from the World Bank, will help avert costs in disability reduction due to reduced infections through the strengthening of emergency prevention, preparedness and response.

“The HSRP is expected to result into savings due to improved productivity of healthcare workers and avert costs due to a reduction in medical errors through health sector digital transformation,” NEDA said.

The HSRP prioritizes investments in 11 regions to strengthen service delivery and health emergency initiatives, particularly in geographically isolated and disadvantaged areas that currently lack access to primary care facilities.

The NEDA Board also approved initiatives submitted by the Committee on Infrastructure.

One initiative is the proposed amendments to the 2023 guidelines for the formulation, prioritization and monitoring of the government’s infrastructure flagship projects (IFP) to incorporate the selection process for including purely private projects in the IFP list.

The proposal aims to ensure private sector entities’ (PSEs) commitment to government monitoring should their projects be included in the IFP list.

“The inclusion in the IFP list is expected to encourage, incentivize, and facilitate private sector investments in critical sectors in the country. PSEs may benefit from the advantages and incentives associated with being on this list, particularly in securing clearances, permits, and licenses, leading to a quicker implementation,” said Balisacan.

The NEDA Board also approved the proposal to rationalize and target allocation of available resources to expedite improvement and expansion of water supply and sanitation services and promote leveraging of market-based financing, as well as leveraging grants/subsidies from the national government.

Impact of policy easing on banks’ NIM mixed

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Ruelle Castro

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October 18, 2024

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Colfinancial.com expects a contraction in net interest margins (NIM) of some banks by the middle of next year following Bangko Sentral ng Pilipinas’ (BSP) policy easing since August.

“Given that interest rates typically operate with a lag, we expect to start seeing the impact on NIM by the middle of next year,” it said, noting the varying impact of rate cuts across the sector.

Colfinancial said banks that carry large proportions of consumer loans should enjoy a positive impact on NIM.

“Since consumer loan yields are less sensitive to changes in the policy rate, these banks should see spreads increase as funding cost goes down,” it said.

Banks with heavier reliance on time deposits for funding, meanwhile, are expected to benefit from lower rates, the online stockbroker said.

“In contrast, banks which benefited from having substantial low-cost deposit bases as rates went up would be more likely to see NIMs decline as their loan portfolios reprice with lower yields,” it said.

However, Colfinancial said the negative impact of rate cuts on those banks’ NIM would likely be lessened by the change in the banks’ balance sheets since the rate hike cycle began in 2022.

“We would highlight the build-up of the banks’ investment securities with high yields as a mitigating factor against NIM contraction,” it said.

Colfinancial said with the economic expansion as a result of the rate cut, the dent on NIM can be offset by the potential increase in loan volumes.

This is very likely given the BSP’s plan to further cut banks’ reserve requirement ratio (RRR) this month, it added.

The RRR of universal and commercial banks (U/KBs) will decrease by 250 basis points (bps) to 7 percent, while the RRR for digital banks will be cut by 200 bps to 4 percent.

Thrift banks and rural and cooperative banks will both see a reduction of 100 bps, bringing their respective RRRs to 1 percent and 0 percent.

“According to BSP Governor Eli Remolona, the central bank is considering further reductions to bring the RRR down to 5 percent in the coming years,” Colfinancialsaid.

The stockbroker estimates a 250 bps cut will introduce to the banking system P400 billion worth of additional liquidity.

“From a big picture perspective, the decrease in RRR frees up funds that were not generating income for the bank. Thus, the release of these deposits to be lent out to clients or invested in other interest-earning assets provides an incremental tailwind for bank earnings,” Colfinancial. said.

“More specifically, for the largest three banks, we are expecting to see 3-5bps improvement in NIM for every 100bps reduction in the RRR, equivalent to 7.5-12.5bps benefit for the 250bps cut. For the smaller banks, we estimate that NIM could increase by 5bps or slightly more for every 100bps RRR cut,” it added.

TecPlata handles Argentina’s 1st carbon-neutral containers

By

Ruelle Castro

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October 18, 2024

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TecPlata is the first Argentine port to handle carbon-neutral containers.

International Container Terminal Services Inc. (ICTSI) said its operation in Argentina, through TecPlata S.A., is now handling carbon-neutral containers, the first in that country.

“The latest achievement marks a significant step forward in the company’s commitment to sustainability, reinforcing its position as a leader in innovative logistics solutions,” ICTSI said in a statement yesterday.

The fete follows the TecPlata’s carbon neutral certification in August. It is also the first port in Argentina to obtain carbon neutral certification.

“Through the collaboration with Petrocuyo, LOGIN, and Carbon+, TecPlata successfully implemented practices that prioritize environmental responsibility while ensuring operational efficiency. TecPlata’s carbon neutral port logistics initiative not only sets a new standard across the industry, but also demonstrates the company’s dedication to fostering a greener future,” ICTSI said.

“As the first Argentine port to achieve carbon neutrality, TecPlata is committed to driving sustainable practices in the logistics sector and generating a meaningful impact on the environment,” it added.

TecPlata is the fifth port under ICTSI’s portfolio to achieve carbon neutral certification, after Contecon Guayaquil in Ecuador, Contecon Manzanillo in Mexico, Rio Brasil Terminal and Tecon Suape in Brazil.

ICTSI said the certification underscores TecPlata’s commitment to reduce its carbon footprint, promoting responsible resource use, and offsetting unavoidable emissions through certified carbon credits, which support the development of renewable energy sources.

ICTSI said TecPlata’s greenhouse gas (GHG) emissions will be monitored annually.

Juan Pablo Trujillo, TecPlata chief executive officer, said TecPlata’s certification also aligns with the ICTSI Group’s decarbonization objectives, working towards a greener, cleaner future, and fostering opportunities for innovation and growth.

“ICTSI’s global mission includes creating a positive impact on its partner communities, leading environmental and social development programs. Through the Comprehensive Climate Change Initiative, TecPlata supports ICTSI’s efforts to reduce GHG emissions from its operations (Scope 1) and purchased electricity (Scope 2) by 26 percent per container movement by 2030 (using 2021 as the baseline). This is a significant step toward achieving carbon neutrality for Scopes 1 and 2 by 2050,” Trujillo said.

In October 2008, TecPlata S.A. was granted a 30-year concession to build and operate an all-purpose port terminal in the greater Buenos Aires area in Argentina by the Consorcio de Gestion del Puerto La Plata.

Built with an investment of $450 million, TecPlata is Argentina’s most modern container terminal with an initial capacity of 450,000 twenty-foot equivalent units (TEU) capacity, and capable of being extended of up to 1 million TEUs in the second phase.

NEXT CUT EXPECTED IN DEC: Central bank trims rate by 25 bps

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Ruelle Castro

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October 17, 2024

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Promising a “baby step” in steering the country’s monetary policy direction for the rest of this year and for next year, the Bangko Sentral ng Pilipinas (BSP) cut its policy rate by another 25 basis points (bps), pegging the target reverse repurchase (RRP) rate to 6 percent.

This adjusts the central bank’s rate on overnight deposit and lending facilities to 5.5 percent and 6.5 percent, respectively.

“These will take effect 17 October 2024,” said Eli Remolona, BSP governor, in a prepared speech Wednesday.

Remolona said the Monetary Board’s decision was based on the assessment that price pressures “remain manageable.”

In particular, Remolona noted risk-adjusted inflation forecast for the year has eased to 3.1 percent from 3.3 percent in the previous meeting.

“However, the risk-adjusted forecasts for 2025 and 2026 have increased slightly to 3.3 percent and 3.7 percent, respectively. Nevertheless, this outlook is safeguarded by well-anchored inflation expectations,” he said.

“The balance of risks to the outlook for 2025 and 2026 has shifted toward the upside owing mainly to potential adjustments in electricity rates and higher minimum wages in areas outside Metro Manila. Meanwhile, downside factors continue to be linked to the impact of lower import tariffs on rice,” he added.

Remolona said the Monetary Board expects domestic economic growth to continue to be “strong” reflecting “improved prospects for household income and consumption, investments, and government spending, which are supported by the start of the monetary easing cycle in August and the announced reduction in reserve requirements in October.”

“On balance, the within-target inflation outlook and well-anchored inflation expectations continue to support the BSP’s shift toward less restrictive monetary policy. Nonetheless, the monetary authority will continue to closely monitor the emerging upside risks to inflation, including geopolitical factors. Looking ahead, the Monetary Board will maintain a measured approach in its easing cycle to ensure price stability conducive to sustainable economic growth and employment,” Remolona added.

Remolona said a 25 bps cut by December is still on the table and the central bank is still looking at a 100 bps “somewhat dovish” cut for next year.

Ruling out a hard landing in the US, Remolona said the BSP is likely to do “baby steps” of 25 bps cut at a time, though “not necessarily every quarter and not necessarily every meeting.”

“We don’t try to cut ahead of the Fed. We just cut where we feel we need to cut based on our data. So what the other central banks do also feeds into our calculations. There is no effort to cut ahead of others. That’s when our data says we should cut,” he said.

The BSP is looking at a neutral rate of 5 percent, he added.

Zeno Ronal Abenoja, BSP assistant governor, said inflation is likely to pick up in 2025 and 2026 though “still within target,” attributed to higher global oil prices and base effect.

Inflation is seen to average 3.2 percent next year and 3.4 percent in 2026.

“Again, all of them showing that inflation will average within the target for 2024 until 2026,” Abenoja said.

Infrastructure spending to drive regional office property market

By

Ruelle Castro

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October 17, 2024

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Property consultant KMC Savills has expressed confidence on the continued expansion of office spaces in the provinces amid spending of the government to improve infrastructure.

Joe Curran, KMC Savills chief executive officer, said in a briefing yesterday this expansion will enable the business process outsourcing industry, the biggest user of office spaces, to tap the talent pool available in the provinces.

KMC Savills in a statement Wednesday said the regional office market saw significant improvement in the first half of the year with the Visayas demonstrating strong growth.

Iloilo received 105,200 square meters (sq.m.) of new office space, bringing its space stock to 262,000 sq.m., KMC Savills noted.

Cebu, however, is expected to surpass Iloilo with 143,800 sq.m. of office space coming online by the end of 2025.

The property consultant said Davao’s office market posted a net take-up of 12,400 sq.m., while Bacolod posted a net take-up of 3,700 sq.m.

Net take-up in Metro Cebu hit 39,000 sq.m., while Metro Clark recorded a 19,000 sq.m. take-up for the period.

“Rental rates in Iloilo and Bacolod have dropped, reflecting rising vacancies, while Metro Cebu, Clark, and Davao saw increases driven by strong demand,” KMC Savills said.

Iloilo’s rents dropped 8.68 percent to P574.4 per sq.m. per month due to rising vacancies. KMC Savills said it expects the trend to persist.

Metro Cebu had the largest rent increase, with a rise of P7.5 to P552.7 per sq.m.

“Davao observed a slight increase in rental rates due to strong demand and limited supply,” KMC Savills said.

Iloilo’s vacancy, meanwhile, was recorded at 28 percent.

DMCI Holdings declares dividend

By

Ruelle Castro

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October 17, 2024

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DMCI Holdings Inc. said it is declaring a P0.48 per share special cash dividend for shareholders as of October 30, 2024.

“Ex-dividend date has been set on October 29, 2024 while payment will be made on Nov. 15, 2024,” the company told regulators.

DMCI said the special cash dividend is on top of the P0.72 per share regular and special dividends declared in April.

“With this October declaration, DMC’s total dividend payout for 2024 reached P1.20 per share or P15.9 billion, which represents 65 percent of the company’s core net income in 2023,” it said.

DMCI Holdings has a dividend policy that commits to a dividend payout ratio of at least 25 percent of the preceding year’s consolidated core net income.

The total payout translates to 10 percent in dividend yield, based on DMC’s October 15 closing price of P11.72.

PSC sets P6B expansion

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Ruelle Castro

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October 17, 2024

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PHILIPPINE Seven Corp. (PSC), the exclusive licensee for convenience store 7-Eleven in the Philippines, is looking to spend around P6 billion to fund its expansion next year by 500 more stores.

Lawrence De Leon, PSC head of finance and accounting services, said the this year alone, the company will open 450 stores.

The company expects to close the year with 4,100 stores.

“We are very encouraged with the sales performance of the new stores. We are aiming to open 450 stores this year. We’re already more than half of that as we already opened 270 stores at the end of the first three quarters. We expect to end the year with 4,100 stores all over the Philippines,” de Leon said.

“We have a lot of stores in the pipeline, so we are confident we can achieve that 450 new stores target. This year, most of the stores are located in the residential clusters since the pandemic changed consumer behavior,” he added.

Jose Victor Paterno, PSC president, said the company is focused on expanding outside Metro Manila.

“(Visayas and Mindanao) are a quarter of our total stores. We’re scrambling to build fast enough, looking for contracts, sending people out, and hiring more people,” he added.

RAISES P15B: Conglomerate to scale up new businesses

By

Ruelle Castro

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October 16, 2024

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Ayala Corp. member of the Board of Directors Fernando Zobel de Ayala and president & CEO Cezar Consing (fourth and fifth, respectively), are shown at the listing ceremonies at the PSE on Oct. 15, 2024.

AYALA Corp. is looking to scale up its newer and smaller businesses.

Speaking at the company’s listing of its P15- billion reissued preferred shares Tuesday, Cesar Consing, Ayala president, said growing the smaller businesses “to scale” will have a “positive impact on the lives of a significant number of our countrymen.”

“The P15- billion preferred shares issue that we list today will help us continue to build businesses that enable people to thrive. Our bigger and better- known businesses, real estate, banking, telecommunications, renewable energy, have been beneficiaries of our ability to raise funding at the holding company level, but perhaps as important are our newer, less well known businesses in healthcare, logistics, infrastructure, education, fintech, electric, mobility. These too will benefit from our ability to raise funding,” Consing said.

“Our objective is to grow these to scale so that even these relatively newer businesses can have positive impact on the lives of a significant number of our countrymen. We often ask ourselves, will our companies make for a better Philippines? We really hope they do, because our 109th year history alone will not ensure relevance and longevity,” Consing added.

Ayala priced the preferred shares’ coupon at 6.0538 percent. It sold 7.5 million shares, divided into a firm offer of 5 million and another 2.5 million for the oversubscription option at an offer price of P2,000.

The share sale’s order book was two times the final upsized amount, according to Consing.

The company used the proceeds to redeem what is left of the original Class B preferred shares due on November 29.

Ayala tapped BPI Capital Corp. as sole issue manager, with BDO Capital & Investment Corp., China Bank Capital Corp., PNB Capital and Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp. joining as joint lead underwriters and bookrunners.

Consing noted that Ayala companies account for 18 percent of all outstanding preferred shares listed in the Philippine Stock Exchange.

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