HOPE AT LAST / FOREIGN INVESTORS FLOCK TO RP DUE TO STRONG PESO
MANILA, JANUARY 14, 2008 (STAR) HIDDEN AGENDA By Mary Ann Ll. Reyes - We got word last Friday from our sources in the financial community that the memorandum of agreement for the refinancing of the government’s EDSA MRT obligation has finally been signed last Thursday.
The signatories to the agreement were Finance Secretary Gary Teves and Transportation Secretary Leandro Mendoza for the government, and a senior officer of the Metro Rail Transport Corporation (MRTC) for the private sector consortium that built and funded the construction of the EDSA MRT in the 1990s.
Good news, at last!
Hope at last for the nearly one million masses who commute daily along the country’s busiest thoroughfare.
And at last, a visible sign that President Arroyo has heeded the call of the public for a refinancing plan that will generate $480 million or so savings for the government that can be used to upgrade and extend the present EDSA MRT line.
And now the work begins. The financial community is excited over the government’s move, but it knows that it will take another month or two before the actual consummation of the refinancing agreement.
A quick review so we can better appreciate the impact of this move by President Arroyo.
When the Ramos administration tapped a private consortium to construct the EDSA MRT using the build-operate-transfer mode, it incurred a huge dollar denominated obligation at the cost of about 15 to 17 percent per annum.
The obligation is supposed to be paid back over a 25-year period during which the government would also be subsidizing the fare of the users of the line.
The positive economic atmosphere under the current administration generated opportunities for that obligation to be prepaid under terms that are highly advantageous to the government and the public, and at rates that reflect the positive economic atmosphere.
Happily, the President and the finance department saw those opportunities and set the refinancing plan in place. The move coincided with the clamor of EDSA commuters for a further improvement of the system and its extension up to Monumento where it can interconnect with the oldest LRT line.
That clamor was aired nearly one year ago. And a month before the celebration of EDSA People Power, President Arroyo has responded.
For sure, there will be more details to be ironed out and more documents to be signed regarding the refinancing agreement.
We hope there will be no further unnecessary delays, nor unwarranted kinks.
Last Thursday’s signing of the MOA by the MRTC and Secretaries Teves and Mendoza give us hope that things will be smooth from here on.
In the meantime, this column joins the EDSA para sa MASA and all other beneficiaries of the EDSA MRT line in enjoying the hopeful atmosphere triggered by last Thursday’s MOA signing.
This column covered the unfolding of that clamor and the ensuing process with which President Arroyo tried to respond to it. We hope to be part of its fitting conclusion when the remaining work in the refinancing plan is completed.
A board member of the Philippine Mining Development Corp. (PMDC) is currently in the hot seat and there is reportedly a growing clamor within the board to have him expelled.
• This director is said to have written President Arroyo last Nov. 23 informing her that the PMDC board had decided to appoint chairman Heherson Alvarez as concurrent chief executive officer during the board’s Nov. 16 executive session meeting.
While the PMDC board said that it authorized this director to notify the President about what transpired during the meeting, the members emphasized that Alvarez was not named CEO as shown by the minutes of the meeting but instead, action on the matter was deferred due to several issues that need to be resolved first.
One of the issues was the “lack of appropriate guidance and information on the intents of PMDC by-laws” on the matter of appointing a CEO other than the PMDC president.
The real consensus reached by the PMDC board, according to a source, was to seek the guidance and even the decision of President Arroyo on who should be PMDC CEO.
The President would surely not take any misinformation sitting down.
Our informers say that reading through the minutes of meeting, it was all too apparent that what the PMDC board arrived at was a suggestion that in the absence of a resolution on the matter coming from the Office of the President, the PMDC board may designate the PMDC chair as CEO and create the position of chief operating officer (COO) to be assumed by PMDC president Oliver B. Butalid.
But according to the PMDC board, it cannot just take this option since the normal procedure under their by-laws is for the PMDC president to be named concurrent CEO.
The board acknowledged that while it may designate the chair as CEO, such a course will require more than its approval, but also the amendment of the by-laws, the approval of stockholders and the concurrence of the Securities and Exchange Commission (SEC).
Thus, PMDC insiders had been wondering how come this director misread the true intent of the board. Some are wondering if it was intentional.
Foreign investors flock to RP due to strong peso By Perseus Echeminada Sunday, January 13, 2008
The decline of the dollar against the peso has drawn foreign investors to the country seeking to pour their money in mining, power and information technology, a top official of the Bangko Sentral ng Pilipinas (BSP) said.
BSP Deputy Governor Diwa Guinigundo told reporters during the weekly Kapihan sa Sulo hotel in Quezon City that the entry of foreign investors is among the positive results of the continuing decline of the dollar against the peso.
“The market sentiment is in favor of the Philippines. Investments are coming,” he said.
He said the strong peso is triggered by the weakening of the dollar resulting from a fiscal deficit brought by the costly invasion to Iraq which is bleeding the US economy.
Guinigundo said since the decline of the dollar is due to supply and demand, the government cannot do anything except to provide financial management advice to affected sectors, particularly the OFWs.
He said the BSP is conducting a series of lectures to help OFWs manage their financial resources earned from their employment abroad.
He said one advice to OFWs is to refrain from buying expensive cell phones and other electronic gadgets that will just put to waste their hard earned money.
Instead, OFWs are advised to invest in income generating projects that will expand the value of their money and help them cope with the daily needs of their families.
Chief News Editor: Sol Jose Vanzi
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