BIGGEST FOOD CHAINS, OTHERS HIT BY INFLATION / PHL DEBT SWELLS P25B MORE

MANILA, APRIL 14, 2011 
(TIMES) By Darwin G. Amojelar Senior Reporter & Krista Angela M. Montealegre, Reporter - HIGHER fuel prices have begun nibbling at corporate incomes, with the operator of the main toll way leading north from the Philippine capital reporting a slowdown in traffic volume ahead of the summer season, and the country’s biggest fast-food chain warning of weaker sales in the first half of the year.

In a briefing, Ramon Fernandez, president and chief executive of Metro Pacific Tollways Corp. (MPTC) told reporters that vehicle traffic volume in first quarter of this year inched up by one to two percent at the North Luzon Expressway (NLEX).

This was weaker than the five percent growth seen in the same three-month period in 2010.

The company’s average traffic volume, as measured by vehicle entries, stood at 160,000 per day so far this year.

Fernandez blamed the slowdown on costlier fuel and higher toll rates, both discouraging motorists from using the NLEX.

“The traffic is still growing, but the growth is tempered. Normally, we expect higher volume traffic in the second quarter because of the summer season,” the executive said.

“We’re confident that the traffic volume will grow this year despite the higher oil prices and toll rates,” he said.

Despite the weaker growth, MPTC unit Tollways Management Corp. said traffic along the NLEX would still go up at a rate of 15 to 20 percent from the daily average of vehicles during Holy Week.

MPTC earlier said it expects revenues to climb to P7.8 billion this year from P5.9 billion last year. In 2010, the company posted a core net income of P1.47 billion compared with the previous year’s P1.22 billion. The company’s shares were last traded at P7 apiece on April 6.

The price of benchmark Dubai crude oil has risen to levels last seen in September 2008, when the price of fuel hit a record high. Costlier oil has pushed up the price of other commodities.

Cost increases more significant In a regulatory filing, Jollibee Foods Corp. (JFC) said it expects slower growth in the first six months as it feels the pinch of rising raw materials prices and costlier operations.

Ysmael Baysa, JFC chief financial officer, said the cost increases seen last year have become more significant this year in the markets where the Jollibee group conducts businesses, putting pressure on its profit margins and on consumers’ purchasing ability.

“Our profit growth in the first half of 2011 will not likely be strong due to more appreciable rise in raw material and operating costs coupled with increasing interest expense as the company borrows more money to fund its capital expenditure and acquisition,” Baysa said.

JFC reported an audited net income of P3.2 billion last year, a 20-percent increase from the P2.67 billion in 2009.

On Tuesday, JFC announced it entered into agreements with two banking institutions to borrow P3.9 billion to fund its capital expenditure and acquisitions.

The company recently announced the closure of its budget eatery chain, Manong Pepe. This came months after JFC acquired Mang Inasal.

JFC is the largest food service network in the Philippines, operating under the brands Jollibee, Chowking, Red Ribbon, Manong Pepe Karinderia, Caffe Ti-Amo and Mang Inasal. It also operates Yonghe King and Hong Zhuang Yuan in China.

As of February 28, it had 1,932 stores in the country and 405 stores abroad for a total of 2,337 stores worldwide.

Its shares fell to P93.75 on Wednesday from P95 on Tuesday.

More borrowings, weak peso swell govt debt

MANILA TIMES: THE national government’s debt stock surged in January because of more borrowings and a weaker peso.

Data from the Bureau of Treasury showed that the government’s debt stood at P4.741 trillion, or P23 billion more than the end-December level.

Based on the Philippines’ population estimate of 94 million, the country’s debt would translate to each Filipino owing the country’s creditors some P50, 427.

Of the total outstanding debt, 44 percent is owed to foreign creditors while 56 percent is due domestic creditors.

The Treasury said the foreign component of the debt increased by P66 billion from the end-December level because of P55-billion in net availment and the P11 billion impact of the peso’s depreciation against the dollar.

The government also sold the equivalent of $1.25-billion worth of global peso notes in January.

The domestic component of the debt fell by 43 percent from the end-December level because of the net redemption by the sovereign of outstanding Treasury papers.

The government paid more due and demandable debt than the amount of Treasury bills and bonds issued during the period.

The government’s contingent debt—comprised mainly of guarantees it issued —was unchanged from the previous month’s P550 billion.

The government earlier said the debt stock would breach the P5-trillion mark by the end of the year as it intends to borrow on behalf of government-owned and -controlled corporations.

Last month, the government tapped the global financial markets for the second time when it floated $1.5-billion worth of 15-year dollar-denominated IOUs to lengthen the country’s debt profile and reduce interest costs.

The projected P5.135-trillion outstanding debt by year-end would be equivalent to 55 percent of the country’s economic output as measured by its gross domestic product (GDP).

Last year, the country’s debt-to-GDP ratio stood at 55.4 percent, down from the previous year’s 57.3 percent.

The country’s economic managers aim to reduce this ratio to 43 percent by the end of the Aquino administration’s term in 2016.

The government relies heavily on foreign and domestic borrowing to plug its budget deficit, which is programmed to hit P300 billion this year. Katrina Mennen A. Valdez

 


Chief News Editor: Sol Jose Vanzi

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