Banks: BSP to set uniform loan pricing benchmark this year. The central bank of the Philippines (BSP) is reportedly going to set a uniform market-based benchmark to price loans and will issue a circular within the year. The new benchmark is said to be similar to the UK’s LIBOR which is the average interest rate for banks’ overnight transactions. The proposal is currently under review as the BSP waits for comments from banks. At present, lenders use different benchmarks such as the 91-day Tbill which at the last auction was at at 1.2%, or the SDA rate, pegged at 2.25%.
Consumer durables: Vehicle sales jump 25% in 1H14. Data from the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association showed that in 1H14, vehicle sales jumped 24.9% YoY to 108,957 units. Passenger car sales surged 44.9% to 40,609 units while commercial vehicle sales went up 15.5% to 68,348 units. For June alone, vehicle sales grew 27.8% to 19,622 units. Passenger car sales soared 100% to 8,278 units while commercial vehicles sales rose 12.2% to 11,344 units. Toyota Motor Philippines, a subsidiary of GT Capital Holdings (GTCAP – HOLD), remains the market leader with 44.5% market share with sales of 48,512 units in 1H14. Strong demand for passenger cars was evident amid aggressive product launches and marketing for vehicle brands. For FY2014, CAMPI is looking at industry sales of 230,000 units.
Cement: HLCM, LRI mulling over combination of businesses. Holcim Philippines Inc (HLCM – BUY) and Lafarge Republic Inc (LRI – BUY) disclosed their respective board of directors authorized the exploration, study and consideration of the combination of their businesses to avail of the resulting synergies and opportunities and subsequently determine optimal structures to implement such combination. It is contemplated that LRI’s Bulacan and Norzagaray cement plants together with their respective related assets, and LRI’s interest in its subsidiary Lafarge Iligan Inc be excluded from the combination and considered for divestment to interested third-party buyers. This is in relation to the earlier announcement by the firms’’ respective parent companies Holcim Ltd and Lafarge SA in April that they are considering merging their respective operations.
Ports: ICT cancels contract for KCT in India. International Container Terminal Services Inc (ICT – HOLD) cancelled its container port agreement with L&T Shipbuilding Ltd. for the management and operation of the Kattupalli Container Terminal (KCT) in Tamil Nadu, India. ICT says the cancellation of this contract has no effect or influence on any of ICT’s other operations and it will continue to actively search for opportunities in India. ICT will be reimbursed for the license fee it paid to operate the terminal.
-ATR Kimg Eng
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