Thursday, 1 March 2012

Philippines gets 38 bidders for oil and gas exploration Philippines gets 38 bidders for oil and gas exploration

Emilia Narni J. David

THIRTY-EIGHT firms have signed up as possible bidders for 15 oil and gas prospects in the Philippines, including two exploration sites which China claims as its own, an Energy official said yesterday at the close of submissions.

This comes on top of forty-two firms that expressed interest in the auction of coal exploration sites offered up under the 4th Philippine Energy Contracting Round.

The list of prospective bidders for oil and gas sites includes giants Shell Philippines Exploration B.V., Total E&P Activities Petrolieres, Esso Exploration International Ltd., French gas and power firm GDF Suez, Spain’s Repsol Exploracion S.A. and Italy’s ENI, a list made available to the press showed.

Other bidders include Nido Petroleum Philippines Pty. Ltd., Philex Petroleum Corp. and Mitra Energy.

“What is interesting is that we have attracted new big players in the oil industry,” Energy Undersecretary Jose M. Layug, Jr. said in a briefing.

The Energy department also renewed assertions that all of the 15 areas being offered for oil and gas exploration are within Philippine territory.

Two of these areas, area 3 and 4 are located in northwest Palawan near the disputed Reed Bank area where service contract 72 is located. The Reed Bank area was the subject of controversy last year when two Chinese ships allegedly intimidated a survey vessel of Forum Energy Plc., the operator of service contract 72.

The Chinese government is claiming much of the area surrounding the South China Sea is within their jurisdiction.

Meanwhile, 42 firms have expressed interest to bid for coal exploration sites by yesterday’s deadline, Mr. Layug added.

This, even as some local bans on open-pit mining have recently affected some ventures here.

“All are local firms because of the 60-40 rule but there foreign firms that want to partner with local companies,” said Mr. Layug, referring to foreign equity limits that require Filipinos to own majority of ventures.

He added these companies have nominated some of the 30 areas being offered in the coal contracting round.

The department originally required interested bidders to submit pre-qualification documents by Jan. 31 and bid proposals by March 1. The deadlines were moved to Feb. 29 for pre-qualification and March 30 for bid proposals.

The Philippines is offering 30 areas in the country for coal exploration and in hopes of eventual commercial production.

Firms that have sent letters of interest are Philippine National Oil Co.-Exploration Corp. (PNOC-EC), Empire Asia Mining Corp., Altura Mining Phils., Corp., SKI Mining Corp., Mincoal Recoursus Naturales Development Corp., Philex Petroleum Corp., Bislig Venture Construction and Development, Inc., Mineral Exploration & Geo-Analysis Phils., Inc., Benguet Corp., SJH Coal Mining Development Corp., Guidance Management Corp., MCCI Corp., South Davao Development Corp., DMC-Construction Equipment Resources, Inc., Semirara Mining Corp., Romyraq Holdings, Inc. and Square Resources Holdings, Inc. The department declined to disclose the rest of the firms’ names.

P-Noyconomics 2012

Business Mirror

RARELY in this column will you find much reference to the political arena. I was a diligent student of the subject in college, but found that the real world had little relationship to the theories. What I did discover was that the systems may greatly vary, but the end-result is always the same.
The few rule the many. The few are given or take the power to make decisions for the many.

Perhaps the best illustration of this is found in the works of German philosopher Georg Hegel. While not a political theorist, he summed things up pretty well by writing, “...the State has the supreme right against the individual, whose supreme duty is to be a member of the State...for the right of the world spirit is above all special privileges.”

In other words, we all ultimately belong to the government and the government’s needs come before the peoples’ needs.

Each administration in the last 20 years has created a somewhat unique and individual economic policy based on the circumstances that it had to face. The Cory Aquino administration was the exception, as this transition period was fairly empty of any concrete policy. It might be said that the best that was offered at the time was to create a partial framework for the future. However, as to concrete results, there were very few.

We might best think of the President through the administration as the Chief Executive Officer, not necessarily of the country, but of the largest institution that has so much control over every economic sector. The government is the largest financial entity in the country and what it does affects everything else. It is like the only large factory in a small town. The board of directors must not only make decisions that benefit the corporation but also must consider that all the other businesses in the area suffer or benefit from its choices.

The Ramos presidency was a time of disentangling government from business, both in terms of getting government out of private-sector enterprises as much as possible and creating rules and an environment to allow the private sector to function more freely and efficiently.

President Estrada had little time to push his agricultural reforms. However, the one little recognized accomplishment was that the Bangko Sentral reacted well to the aftermath of the Asian financial crisis.

Every CEO is responsible and has an obligation to manage the financial state of the corporation. President Arroyo might be characterized as having tackled the poor Income Statement (IS) that both the government and the country faced. On the government side, the enactment of the despised value-added tax quickly increased the government’s revenues while helping to slow the growth of borrowing. As a result of the government’s improved income statement, the broader economy was better.

Now we come to what might be called P-Noyconomics.

In any company, once revenues stabilize or are even rising, the next step is to attack further IS problems and have a balance sheet that shows the assets and liabilities. President Aquino’s administration has done an excellent job of improving both. But this has come, using corporate terms, at the sacrifice of profits.

A company increases revenues to lower borrowing to pay expenses. Then it reduces spending for expansion or improvement to better its balance sheet. It is now financially stronger but it is not growing.

That is the situation that the country is in right now.

But the problem is that government improves its financial statement at the expense of the private sector. That is what happened in 2011 and looks to happen in 2012.

Total gross domestic product is about $216.1 billion, over P9 trillion. The government expects to collect P1 trillion in taxes. That, in effect, takes 10 percent out the total producing economy and gives it to the government.

The banking, power, and real-estate sectors will contribute P195 billion. Which sector, the private or the government, could more effectively spend that P195 billion for national economic growth?

If P-Noyconomics does not move soon to the next step of improved profitably for the nation, 2012 will actually be worse than 2011.

A single conversation across the table with a knowledgeable man is worth a month’s study of books—Chinese proverb. On a personal note, I will conduct a stock-market trading seminar on March 24. I will discuss how to make money in the market and how to avoid losing. This seminar is for everyone. If you have never invested, learn why and how you should. If you are having success problems, learn how to change that. If you are a successful investor, learn some new profit-making ideas. Send me an e-mail at for details.

E-mail to and Twitter @mangunonmarkets. PSE stock-market information and technical-analysis tools provided by Inc.

Tuesday, 28 February 2012

What’s your stock-market strategy?

Business Mirror

TRADE your money in the stock market, and people tend to look at you like you’re a member of some strange alien cult. Never has anyone said to me, “Gee, that’s something I always wanted to do.” The least sympathetic opinions center on investors being a part of the Old Boys’ Club or that stock-market investing is just another casino gamble.
In 2010 I officially became a member of the Old Boys’ Club; at least that’s what the birth certificate says. Having played professional poker for a few years, I know about the inside of casinos and the Philippine Stock Exchange is not a casino; no free food and drink, among other things.

However, there are several things that a stock investor must do and not do in order to increase the likelihood for success just like in every other money-making venture.

Stock trading is a personal exercise. Rarely are trading decisions reached through a consensus of opinion even at the institutional fund level. Most often, and usually always with individual traders, it is a single person who makes the investing decisions and pushes the buy or sell button.

And it is the “button pusher” who must avoid the trading mistakes.

Every book on stock-market trading is going to tell you to have a clear and definite plan on what price to take profits, when to cut loss, and to have the discipline to strictly adhere to that plan.

Every book on being healthy is going to tell you not to smoke, drink only a little, and eat your vegetables and to have the discipline to strictly adhere to that plan.

While the trading plan is crucial and sticking to it is a must, most traders lose money because their basic strategy often put in their plan is wrong.

The most popular and foolish strategy is “averaging down.” That is, buying more shares at a lower price as the stock goes down. The idea is that your cost basis is reduced. This strategy is almost a guaranteed loser.

Say you buy at P10 and the price goes to P8. That’s only 20 percent you say and since the price is lower, you double up bringing the net cost down to P9. But now the price has to appreciate 25 percent just to bring you back to break even. Going down 20 percent is easier than going up 25 percent.

And think about it logically. Why would you want to buy a stock that is going down? “But eventually it will stop going down!” I hope you are right, but why not wait until it stops going down and buy when it starts going up?

Every stock investor struggles with the concept and process of cutting a losing position. How do you know when to cut a loss? Attend my seminar and I will show you.

But in the meantime, use a simple risk/reward formula.

Would you cross a busy street with cars whizzing by just to get to the other side? No, you would wait for a break in the traffic because the risk, getting hit by a car, is greater than the reward, crossing the street.

Would you cross a busy street with cars whizzing by if someone was chasing you with a knife? Maybe. Because the risk/reward equation has changed.

The odds of a stock going up or down are 50/50, no matter what your research says. It’s either up or down. Therefore, if your profit target is 15 percent, you do not allow a 20-percent or 30-percent loss. That makes no sense.

Did you wake up this morning, look over at your spouse, and think whether or not you wanted to be married today? Probably not. Relationships deteriorate over time.

But that is what you need to do with your stocks. You own stock XYZ. Ask yourself, if I didn’t own it, would I buy it today at today’s price? If the answer is no, sell. If yes, hold it.

Too many losing investors are found to be married to their stocks, holding on as the price goes lower and lower like a bad relationship. You can easily press the “sell” button and stop the financial pain quickly.

On a personal note, I will be conducting my seminar, “Your Money: Preservation and Profits—A Stock Trading Seminar,” in Manila on March 24. If you would like the details including an outline of what I will be speaking about, please e-mail me at Let me know if you would prefer a Makati or Ortigas venue location. I promise you this will not be an academic lecture. This is real world how to pick them and how to trade them profitably.

E-mail to and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by Inc.

Malacañang Okays $500-M IMF Credit

Manila Bulletin

MANILA, Philippines — Malacañang has informally granted approval for the Philippines’ proposed $500-million contribution to the International Monetary Fund's New Arrangements to Borrow (IMF-NAB) facility, signaling the country’s participation as a reserves-strong creditor with enough resources to provide supplementary funds to the IMF.

The $500-million contribution in the IMF’s currency or Special Drawing Rights is equivalent to SDR340 million, the credit floor requirement to join in the NAB.

A source said the proposed participation in the IMF lending facility has been given an unofficial nod from President Aquino. The central bank and the government are currently waiting for the IMF to complete its procedural process for the NAB.

In a statement last week, the BSP said that it hopes to soon join the IMF’s NAB which would allow it to be creditor or lender in an arrangement between the IMF and any IMF member countries or institutions coping with financial problems.

The Philippines is already a participant as creditor to the IMF’s Financial Transactions Plan and Use of Borrowed Resources since 2010. The BSP has contributed the maximum amount of $330 million, equivalent to SDR207 million and about $251.5 million have been accessed by borrowing countries including Ireland, Portugal and Greece.

In its proposal to join the NAB, the BSP in a report said it has the “financial capacity to join because of healthy GIR (gross international reserves).” The Philippines is one of the 13 emerging markets qualified to join. NAB currently has 26 member countries.

According to the BSP proposal, the NAB will enable the central bank to strengthen international cooperation with IMF members, especially in efforts to prevent financial crisis of a global scale. Member countries are usually represented by central banks.

Sources said the Department of Finance and the National Economic Development Authority have already given their support for the BSP’s $500 million contribution to the NAB.

The central bank in its study of the NAB said contributing $500 million, technically a loan to the IMF, will have no significant impact on the country’s reserves.

The BSP said all claims under the NAB will retain their full and immediate encashability in case of balance of payments need and it will be treated as reserve assets.

As for cost, the participation in the NAB involves a commitment to release reserves when a credit arrangement is required in the future. "There is no cash out for the BSP until credit arrangement is called, however, once called, the BSP is required to promptly provide resources to the IMF which can be in the form of a loan to the IMF," explains the BSP. Another way of releasing the funds, aside from it being a loan, is to buy IMF notes.

In 2006, the BSP prepaid all outstanding debt from the IMF amounting to $219.7 million, ending 45 years of IMF tutelage and the exit from its post-program monitoring arrangement.

The National Government's last arrangement with the IMF was in August 2000 with a loan of $783.23 million, mainly to supplement balance of payments which was in a deficit, and to aid in fiscal consolidation.

On-Line Business Registration March 1

Manila Bulletin

MANILA, Philippines — Registering a new business can be done by any Filipino in the comfort of their homes or offices in any province in the country by March 1 this year, the Philippine Information Agency (PIA) reported Sunday.

Director Linda O. Boniao of the Department of Trade and Industry (DTI) of Northern Mindanao during an episode of “Ang Rehiyon Karon (ARK)” radio program over DXIM Radyo Ng Bayan announced the on-line registration of business names with the DTI.

In fact, Boniao said online registration for a business with the DTI, tax identification number with the Bureau of Internal Revenue (BIR), Social Security System (SSS), Pag-Ibig and PhilHealth can be done in one sitting for anyone who has access to computers.

She said that this is now possible under the automated Philippine Business Registry System (PRBS). Launching was done last January 27, but initial coverage was limited to Metro Manila.

In Northern Mindanao, test run was done this week, Director Boniao shared.

Meanwhile, ARK is a program of the Regional Development Council (RDC)-Region 10’s Communication Advocacy Program Task Force (CAP TF) that talks about Northern Mindanao’s development and takes a regular one-hour airing from 3 p.m. to 4 p.m. every last Friday of the month, with the PIA as regular host.

Following will be a five-step guide on how owners of new businesses can use the system.

First, an applicant must create a Philippine Business Registry (PBR) user's account at

Second: Log-in and fill out the PBR online application form.

Third: Applicant's (Taxpayer Identification Number (TIN) is required to proceed with the PBR number (PBN) which is based on the TIN. If there is an existing TIN, PBR will validate against records. If there's no TIN yet, PBR will generate one for the client.

Fourth: Pay for Business Name (BN) application fee through GCash. Submit application for employer's registration number (ERN) to SSS, PhilHealth, and Pag-Ibig. ERN from SSS, Pag-ibig, and PhilHealth are then generated and reflected on the owners PBR account dashboard.

Fifth and last stage: Applicant may now proceed to the said agencies to get certificate of employer's ID. Just present the PBR account dashboard. (Philippine Information Agency Region 10)