BPI sees rise in loans

Sun.Star Cebu <> July, 31, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

AMID a lot of margin compression and lower trading gains due to higher interest rates, the Bank of the Philippine Islands (BPI) is optimistic that it will be able to increase its loans portfolio by 15 percent this year.

This exceeds the expectations of the Bangko Sentral ng Pilipinas (BSP), which is counting on banks to do their share in improving the country’s slow economy by increasing their loans by 10 percent this year.

With a lot of investments driven by the ability to be financed, banks help transform savings into funding for investors and capital formations, explained BPI senior vice president and consumer banking head Nabbie Alejo.

Apart from company expansions, proceeds from loans are also spent by individuals to buy cars or houses.

The increase in spending creates job opportunities and increases corporate profits.

Strong demand

“We expect that the demand for loans will continue to be strong. We projected at the start of the year to increase our loans portfolio by 15 percent and see our (overall) growth beyond 15 percent this year. Even if there will be a slowdown towards the third and fourth quarter, we think we can meet or exceed our target,” she said.

This optimism is attributed to the bank’s proper and active risk management, market analysis and fine-tuning of its products portfolio that have cushioned the company from the effects of the rapid rise of interest rates.

Despite the “very difficult interest rate environment,” BPI, for its part, reported an increase in customer flow as well as in loan volume, particularly by individual consumers who bought houses and cars, in the first quarter this year.

Alejo commented, though, that the interest rates were relatively low double-digit figures compared to the ones in the 1980s when they reached as high as 20 percent.

Filed under: Business , Bangko Sentral ng Pilipinas, bank loans, Bank of the Philippine Islands, inflation

BPI launches new look, to give better services

Sun.Star Cebu <> July, 31, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

REALIZING that a “generic” product cannot differentiate a bank from its competitors, the Bank of the Philippine Islands (BPI) is embarking on a nationwide brand revitalization campaign that promotes its “pro-active” way of engaging its customers.

Part of the campaign is the bank’s new bright red signage and redesigned logo, which were unveiled yesterday in its branch on Osmeña Blvd., Cebu City and is the first of its more than 800 branches nationwide to carry the fresh look.

The bank’s interiors were also spruced up to express BPI’s identity as an “approachable, affordable, and trustworthy financial advisor.”

BPI senior vice president and consumer banking head Nabbie Alejo also explained that the revitalization project is in response to the changing times and needs of the market rather than for competition.

She declined to disclose the investment cost of the campaign, saying it is not a “small amount.”

The 157-year-old BPI has 827 branches nationwide, including regular branches, kiosks, BPI Express Teller outlets and BPI Family Savings Bank branches. There are 37 BPI branches in Cebu.

Accessible

“Our branches are enough (for now) but we are still (continuing) to look at locations where it will be more convenient and accessible to the people,” Alejo said.

She said that BPI is the biggest bank in the country in terms of branch network and market capitalization, second biggest in deposit base, and third biggest bank in terms of assets.

Alejo added that the bank would also train its employees and encourage clients to give feedback so they could improve their services.

“The changes are more than cosmetic. Our focus will be more towards the customer while continuously developing and providing the best banking services and products possible. Our new look will provide a more convenient and more pleasant banking experience. That is what taking you farther means to us,” added BPI senior vice president and preferred banking head Dada Trillo.

BPI will celebrate its 157th anniversary next month.

Filed under: Business , Bank of the Philippine Islands

Duty Free opens outlet in mall

Sun.Star Cebu <> Thursday, July 31, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

TO reach more overseas Filipino workers and tourists, Duty Free Philippines (DFP) opened a 1,800 square meter outlet—its second biggest store in the country after Fiesta Mall in Paranaque City—in the Northwing of SM City Cebu.

But if plans to close the DFP store at the Waterfront Cebu City Hotel and Casino by the end of August will push through, there will still be two outlets in Cebu.

With Cebu fast becoming a major tourist attraction and the opening of a Sofitel Hotel near SM City Cebu, DFP went into talks with the SM Group about a year ago on opening up the outlet in the mall.

The store, which was completed in two weeks, was worth an investment of at least P20 million and has a staff of 14.

“We feel that the market can be serviced by this store,” DFP general manager Michael Christian Kho told reporters during the opening Tuesday.

The other DFP outlets are located at the Mactan Cebu International Airport, a couple in Davao City and four at the Ninoy Aquino International Airport.

Historically, Cebu’s DFP outlets accounted for 15 percent of the total annual nationwide turnover or roughly $27 million out of $170 million it made since the 1980s.

Recently, Cebu’s DFP outlets were making a combined annual turnover of $9 million. Kho said they are hoping to raise the sales with the establishment of the new branch.

Kho said DFP’s dollar revenues have grown considerably since 2006 because of the increase in overseas Filipino workers as well as the province’s strengthened tourism sector.

Products

But its peso revenues are “actually flat” with the strengthening of the peso against the dollar.

Perfumes, cosmetics, liquor, tobacco and confectionery are among the sought-after duty-free items.

Still, DFP is optimistic that its combined revenues for all of its stores nationwide will increase by at least 10 percent to 15 percent this year.

“We see a potential in the Visayas market and we believe that this store will be able to tap that market. We want to establish our base and earn revenues before looking at other areas for expansion. It is worthy to note that Cebu is the only one in the Visayas that has an international airport that services international flights. We want to (complement) that service,” Kho said.

No other outlets are in the pipeline this year after DFP’s aggressive expansion in the 1990s that caused the management some difficulties.

SM Supermalls president Annie Garcia said that the DFP store in SM City Cebu completes their selection of merchandises that cater to the class A and B market.

Tourism Undersecretary Phineas Alburo added that the outlet is a “welcome development” to Cebu as more international flights are being arranged.

He reported that from January to May this year, Cebu posted an 8.2 percent increase in tourism arrivals compared to the same period last year.

Filed under: Business , Annie Garcia, Christian Michael Kho, Duty Free Philippines, Overseas Filipino Workers, SM Supermalls, tourism, Tourism Undersecretary Phineas Alburo

Delivery of new cars take longer

Sun.Star Cebu <> Wednesday, July 30, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

VEHICLE dealers in Cebu have reported delays in the delivery of new cars as a result of the grounding of Sulpicio Lines Inc. vessels.

Hyundai Cebu president and chief operating officer Edward Onglatco said it now takes the dealership about a week or more to deliver a new vehicle to a buyer.

“If we close a deal now, we have to tell a customer that his order will come in a week, or a week and a half, instead of three days,” he said.

Suzuki Cebu president Brian Chua said that the grounding of some Sulpicio vessels has caused the dealership to transfer to other shipping companies.

Sulpicio’s cargo vessels have been allowed to operate again, but its passenger ships are still grounded. Some of Sulpicio’s passenger ships are roll-on roll-off (Roro) vessels, which also transport cargo.

But with other shipping companies, Chua said the delivery of about 50 to 60 vehicles only occurs four times a month; with Sulpicio, the same number of vehicles were delivered three or four times a week.

To remedy the situation, Chua and Onglatco said they have to plan their shipments well and sell whatever vehicles they have in their stockyard to ensure prompt delivery to customers.

“Now, it’s (becoming normal) because we have adjusted,” said Chua.

But even then, Onglatco said it was easier for the auto dealers to ship with Sulpicio as they could make transactions with a simple phone call. With other shipping companies, though, the car dealers have to book shipments a week before the shipment date.

Hyundai and Suzuki are members of the 10-member Cebu Auto Dealers Association, which is supporting the call of businessmen to resume the operations of Sulpicio’s vessels.

The organization earlier reported that its members failed to receive a total shipment of 400 vehicles a month from Manila to different parts of Visayas and Mindanao after the government grounded Sulpicio’s fleet.

Filed under: Business , Hyundai Cebu, Sulpicio Lines Inc., Suzuki Cebu

Consumer bill of rights

Sun.Star Cebu <> Wednesday, July 30, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

SM Supermalls welcomes the proposal of President Arroyo in her State of the Nation Address (Sona) last Monday to come up with a consumer bill of rights to address the need for a more stringent law that will protect consumers against corrupt trade practices.

“We will always embrace whatever it is that is good for the consumers.

Whatever is good for them is also good for us. It brings good business. It makes people like us responsible for the market that we are servicing,” said SM Supermalls president Annie Garcia in an interview with Sun.Star Cebu.

Garcia stressed that retailers should understand laws and ordinances not only to protect consumers but to show their respect to the market.

Doing this would entail working with the government and with nongovernment organizations, as well as getting feedback from consumers to expand one’s market, she said.

“The (proposed) consumer bill of rights will need a lot of thought. What is important is that at the end of the day, consumers patronize us. If they are not happy, we must learn from what they desire,” Garcia said.

Meanwhile, Garcia revealed that SM has received comments from consumers to extend its mall hours and open more
stores.

“But we have to study these. Extended hours would be really good as it will make us reach out more to the working
consumers,” she said.

“But we like to practice what is fair and reasonable to everyone. If we do extended hours, there will be extended costs as well that we need to justify so that we won’t pass them on to consumers. We want to remain affordable to them,” she added.

As it remains optimistic about the Cebu market, Garcia said the SM Group will strengthen its presence in the province by opening up two more SM Supermalls in the future.

But she did not reveal when and where these future malls will open.

Filed under: Business , Consumer Bill of Rights, SM Supermalls, State of the Nationa Address 2008

Business stakeholders in Visayas to discuss issues, pass resolutions

Sun.Star Cebu <> Tuesday, July 29, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

CONCERNS ranging from improvement of infrastructure to rising prices of fuel to food security are some of the pressing issues that might be taken up in the upcoming 17th Visayas Area Business Conference (VABC).

The VABC, which will be held on Aug. 14 to 16 this year at the Cebu International Convention Center, is an annual meeting of business and public leaders that is meant to enhance ties among chambers of commerce. It is also a venue where members of the business community discuss current issues and government policies that affect the industry.

Jose Ng, Philippine Chamber of Commerce and Industry (PCCI)-Visayas vice president, told reporters that issues to be discussed during the conference are urgent in nature.

Since VABC is only for one day, participating chambers are urged to discuss separately issues among their respective members, come up with draft resolutions and submit these during the event. These resolutions from each chamber will form as basis for collective resolutions that will be passed during the VABC, which will then be submitted to the PCCI.

Policy-making

After PCCI has reviewed the resolutions, these will be submitted to the National Government for consideration and, eventually, policy-making.

Last year’s VABC was hosted by the Metro Bacolod Chamber of Commerce and Industry Inc.

In the conference, participating chambers pushed for an informed review and assessment of the government’s Comprehensive Agrarian Reform Program (Carp) and its implementation by the Department of Agrarian Reform. The chambers proposed that an independent body, like the Congressional oversight committees, review the implementation of the Carp.

This year’s VABC will be hosted by the Mandaue Chamber of Commerce and Industry and organized as part of the Mandaue Business Month (MBM) 2008 that will kick off next month.

At least 200 delegates coming from the 16 active chambers in the Visayas-Western Visayas, Central Visayas, and Eastern Visayas-are expected to attend the VABC.

MBM 2008 organizers foresee more guests and more tourists to come due to the “convenient location” of Cebu being in the center of Visayas region. They also expect a bigger budget—from P8 million to P10 million—for the MBM this year due to the VABC.

Among those who have been invited to speak during the conference are Cebu Gov. Gwendolyn Garcia, Tourism Secretary Joseph Ace Durano and PCCI chairman emeritus Donald Dee.

Ng, however, said this year’s VABC may be the last as the PCCI is “strongly encouraging” satellite business conferences to be jointly organized by all chambers of commerce of a certain area every year.

Filed under: Business , 17th Visayas Area Business Conference, Cebu International Convention Center, Mandaue Chamber of Commerce and Industry

Tax rules, new financial reporting standards need to be reconciled

Sun.Star Cebu <> Thursday, July 24, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter with LIBERTY A. PINILI

WHILE the adoption of International Financial Reporting Standards (IFRS) may pose a challenge to the Bureau of Internal Revenue (BIR), the IFRS was designed to ensure more transparency in financial reporting and encourage more investors to the country.

This was explained by Wendell Ganhinhin, branch manager of Punongbayan and Araullo, a company of certified public accountants.

Ganhinhin said the IFRS, whose implementation in the country is known as the Philippine Financial Reporting Standards (PFRS), was adopted worldwide to prevent a repeat of financial reporting controversies, like the Enron scandal in the United States.

He said under the new standards, foreign investors will also find financial reports of Philippine companies easier to analyze and their adoption, therefore, is meant to attract more investors to the country.

“It (adoption) also came as a result of globalization,” he said in an interview yesterday.

But he admitted that the PFRS also raises the need to reconcile the new standards of financial reporting with tax rules.

Ganhinhin said that under the PFRS, a company’s assets and liabilities will be valued according to fair or market value. But under existing tax rules, the same assets and liabilities will be valued based on actual cost.

If not reconciled, he said, the taxpayer and the BIR would end up quarreling.

He cited the case of a building that is built at a cost of P1 billion but has a fair value that is less the said amount. Under the PFRS, the fair value of the building will be stated in the financial report of the company that owns the structure. However, for tax purposes, the BIR will take into consideration the cost of the building not the fair value.

In assessing a company’s taxes, the BIR requires the submission of an income tax return and a financial report.

“The BIR and the taxpayer have to know the differences in the PFRS and the tax rules so these (differences) will be stated in the reconciling items (under the income tax return),” he said.

The challenges in reconciling the PFRS with existing tax rules prompted the BIR 13 Cebu City to ask Punongbayan and Araullo to give the tax agency’s personnel an update on the new financial reporting standards last Monday.

“We have to keep up with the times. This is one way to avoid conflicts with the taxpayers. We want to contact companies in the right and legal way,” said BIR Regional Director Jose Tan.

Not all companies are mandated to adopt the PFRS, however.

Ganhinhin said the adoption of the PFRS is only compulsory to companies that are publicly listed, have assets amounting to P250 million and above or liabilities of P150 million and more.

Filed under: Business , BIR Regional Director Jose Tan, International Financial Reporting Standards (IFRS), Punongbayan and Araullo, Wendell Ganhinhin