While we all know that such a situation exists in our crude import dependent country, this article confirms and emphasize smuggling in the philippines and its impact fiscally. However, with no official data to back up analysis, we can only work on estimates.

Oil smuggling has been a problem not just for legitimate oil players but for motorists as well. We maybe putting off-specs product in our cars just to save some penny. And now, the article emphasizes the forgone revenue we the government could have enjoyed, giving us enough resources to combat the current crisis and stand on our own. This maybe an interim solution for BSP’s call to be less dependent on our export sector.

I just hope that we all accept the truth and take action to fight smuggling in our country.

The Metro Rail Transit ceased its 24-hour operation on Wednesday, June 3, after just two days of implementing the scheme to service commuters working on the graveyard shift, according to the spokesperson of the rail system.

Instead, the MRT will operate on extended hours. The last south-bound train will leave the North Avenue station at 12:10 a.m., while the last north-bound train will leave the Taft Avenue station at 12:30 a.m., said Lysa Blancaflor of the MRT-3 public information officer.  The trains system will open earlier at 4 a.m.

There will be a 30-minute interval between trains between 11 p.m. to 1 p.m. as only two trains per lane will run on those times, Blancaflor said.

Before the 24-hour scheme started last Monday, the MRT-3 operated from 5 a.m. to 11 p.m.

Inquirer

SM Investments Corp’s (SMIC) plan to raise P10 billion in peso-denominated retail bonds has been approved by the Security and Exchange Commission. This will be SMIC’s debut in the local bond market. SMIC usually raise funds through private placements.

The proposed issuance of fixed-rate domestic retail bonds is pegged at a minimum P20,000 investment per transaction. I think this is one of the lowest minimum investment for corporate bonds this year.

The bonds will be issued in two tranches maturing either in five or seven years. The bonds shall be jointly underwritten by BDO Capital & Investment Corp., BPI Capital Corp., China Banking Corp., Union Bank of the Phils., and RCBC Capital Corp., SMIC said. (new from Inquirer)

Story from Inquirer. Isn’t this good news? Now we don’t have to feel scared about going home late after staying late in the office. For me, the MRT is the safest ride out there. No more scary encounters with a taxi or bus holdup gangs. I just hope that this will become a regular thing.

Most of the economists in the Philippines held their breath as the result of the 1Q 2009 national accounts showed that the Philippine economy is in the brink of recession. The first quarter output was pegged at 0.4 percent due to the global financial crisis, the National Statistical Coordination Board. More of the story here .

And I thought we are on our way to recovery as signs of stock market rally was seen in previous week coupled by the appreciation of the peso, although external trade data says we are far from recovery. Would there be a buying spree for blue chip stocks again? Are we yet to see the bottom now? We shall all find out in the days to come

I stumbled upon this article in inquirer about RP economy being able to withstand global economic downturn because two of three of the most important income drivers remain intact. It is no secret that our exports, the first pillar, is getting a beating. However, a certain economist is saying that the two remaining pillars of the economy remain relatively robust. These pillars are Remittances and BPO Services.

This made me look for the latest data on remittances. As of End February, remittances grew only by 4.9% year-on-year, and 2.5% growth year-to-date. While scratching my head, I am quite confused. These numbers are far from robust. Our country used to experience remittance growth of around 20%, which is already on the conservative side. This is actually a deceleration. It only highlights that the economy’s milk cow is running out of milk. While I cannot say am certain, but there is a high possibility that remittances will crumble sooner than we think.

Next on the list is the BPO services. The economist is saying that revenues of business process outsourcing firms are still strong. But there are silent horror stories about lay-offs in the sector. Back offices are also laying off people, as mentioned in this blog before. This is not a good sign since most of employment opportunities are on the BPO now.

So, are we free from the effect of global recession? I think we shall be affected, and only time will tell. But saying that these pillars are still intact is refusing to accept the truth.

Petron Corporation, the country’s top oil refiner, aims to raise upto P15 billion or $310 million via a private placement of fixed-rate notes starting May, according to Eric Recto, the company’s president. Recto said that proceeds of the notes issue will be used to fund the company’s five-year expansion plan worth $700 million to $1 billion. No word yet on the mechanics of the notes issue, or wheather it will be open to small investors.

The company is now fully private, after the government’s stake was sold to Ashmore. Late last year, San Miguel Corporation entered to an agreement with Ashmore, with some SMC executives now occupying key positions in the management of Petron.

The composition of the Philippine Stock Exchange Index (PSEi) shall be revised effective May 4, 2009 as a result of PSE’s regular indices review. Sectoral indices shall also be adjusted accordingly.

To qualify for the main indices (PSEi), companies are required to meet the following during the review period:
1) Free float level of at least 10%
2) Liquidity or average daily trading value of at least P5 million
3) Volume turnover ratio of at least 10%
4) Tradability of at least 95% of the total trading days
5) Free float market capitalization

On the other hand, to qualify for the sector indices, companies are required to meet the following during the review period:
1) Liquidity or average daily trading value of at least P1 million
2) Tradability of at least 75% of the total trading days

The free float level of all listed companies shall also be updated. The adjustments are based from the companies’ latest public ownership reports as of December 31, 2008 submitted to the PSE by April 3, 2009.

As a result, Petron and Union Bank were dropped from the list of blue chip companies. The two listed companies shall be replaced by Aboitiz Power Corp. and GMA Network Inc.

Petron failed to comply with the 10 percent minimum public or free float level while UnionBank will also be replaced in the index after its average daily value turnover went below the P5 million turnover requisite.

For those following the movement of PSEi, consider these changes on your next stock trading strategy.

The rates of Aboitiz Power’s 3 billion pesos has been set for its offer of three-year and five-year fixed rate bonds. The three-year bonds would carry an 8.0 percent coupon and the five-year bonds an 8.7 percent coupon, or a premium of slightly over 220 basis points against best bids for comparative local Treasuries. The minimum investment is 50 thousand with increments of 10 thousand for additional invesments.

Aboitiz Power will use the offer proceeds to partly finance its acquisition of the Tiwi-Makban geothermal power plant from state-run National Power Corp.

The company has picked BDO Capital & Investment Corp, BPI Capital Corporation, First Metro Investment Corp and ING Bank Manila branch as joint lead managers.

It is good to see that local companies have been tapping local investors for their bond offerings. After Globe and San Miguel, Aboitiz is the latest addition of blue chip companies who is confident that they can source investment requirements domestically. It is also surprising to see these bonds offer minimum invesment of 50 thousand, where an average office employee can put his savings. These bond offerings are selling like hotcakes, and it only shows there is enough liquidity in the Philippine market despite the global economic turmoil. I think it is time for government to issue retail treasury bonds/bills again to source its pump priming activities.

I have been scouting for condominiums for quite some time now. Considerations include AVIDA, Belton, Camella, and Victoria station. However, the steep down payments and monthly dues turn me off as I am just meeting ends. I cannot believe that at my salary, which is equivalent to Director 1 level in most government agencies, cannot still afford even a low income condominium. Low income condominium ranges from 2M to 4M, according to an Ayala agent. Condominium is a very attractive option for me since I am not willing to wake up at 5 and go through traffic to beat our bundy at 8am. With the current economic crisis, expectations are geared toward slow condo sales. I was also expecting that prices may after all fall down due to weak demand, thereby adjusting the equilibrium price. I went to a condo launching event to find out if my theory is correct. The recent addition to growing list of condo projects in Makati is Victoria Station. If your riding MRT, their other project is in EDSA Kamuning. They launched (or re-launched) their condo project on Wednesday. I thought the event was a reception of some sort. There are white tables with people eating while talking to a sales agent. There is also a chocolate fondue but I never got to try it out. Food and drinks are free flowing. The event was held right at the center of the site where the condo shall be built. The sale agent was very accomodating. She tries to answer every question that I throw at her, except for one. I asked her what will happen and how can I get my money back is the project will not push through. She fumbles. She said it will never happen and if on the slightest of possibilities she is sure the developer will be able to return the money. Even at 8PM, the event is still crowded. However, most of the curious would be owners are either retirees or average joe. This is good if the average joe can accomodate the condo. I rarely saw employees on the event. While the event and food are just ok (no programs whatsoever, just straight to business discussion) there is one thing lacking in the site – a showroom! How can they launch a condo project whitout a showroom? People may have a hard time imagining the layout of a bi-level condominium through pictures only. They offered the showrooms of Manila and Fort, but going there is definitely troublesome. What’s more, the agent “threatened” a price increase if I will get the unit after 10am the following day. Reservation is P25k. Thanks but no thanks. I will not decide in a hurry. Investing in a house is the most expensive purchase in my life, and I will not decide in less than 24hrs. Paging AVIDA and Belton. Kindly lower your prices so that I can finally buy my piece of space in Makati…