Price war

Did you know 1: When Peter Favila became bank president of Philippine National Bank, he used to say in jest that his middle initial might as well be "S" as in Singson instead of "B" as in Baltazar. At that time, Gabriel Singson was governor of the Bangko Sentral ng Pilipinas and a distant uncle of Mr. Favila.

Now that Mr. Favila is Trade Secretary, some people are now saying that his middle initial might as well be "DV" as in De Venecia. As everybody knows, House Speaker Jose De Venecia Jr. has been very helpful in Mr. Favila’s career in recent years.

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Did you know 2: The Insurance Commission hasn’t had this much excitement in years! It seems there was some sort of, uhm, physical confrontation in the Office of the Commissioner between two individuals and chairman Benjamin Santos saw it all.

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Did you know 3: Zesto Corp.’s Freddie Yao has been roiling the soft drinks industry, pricing the revived RC brand – well, he did buy the brand rights about a year or two ago – at half of the regular P8 price per bottle of Coke, the market leader. Mr. Yao, of course, used a similar pricing strategy (coupled with popular products such as dalandan soda) in building the Zesto brand in the fruit juice segment.

The talk is RC now has two-percent share of the P50-billion soft drinks market.

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As the bidding of 67 percent of Philippine National Bank nears, the focus is on Lucio Tan, who is selling his stake together with that of the National Government as part of the bank’s rehabilitation program.

You see, the overall consensus is Mr. Tan wants majority and effective control of the bank. What is being debated is the maximum price he will be willing to pay for the shares, given that:

• he may be the richest man in the country but not necessarily the most liquid since a large part of his wealth is in real estate;

• he paid as much as P120 per share for some of his holdings, raising the average cost to him of his PNB shares; and

• he has a high regard for his fellow directors – starting with former Citibanker and current chairman Florencia Gozon Tarriela and her predecessor Francisco Dizon and management team who have turned around the bank ahead of schedule.

Naturally, government intends to jack up the price to as high as it can, in part because it can use the money to help shore up its deficit.

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Here’s an interesting decision dated May 5 and made by the Office of the President.

The complaint was lodged by the Presidential Anti-Graft Commission against former Trade and Investment Corp. of the Philippines president Joel Valdes.

Basically, the Office of the President reversed an earlier decision dated April 14 and exonerated Mr. Valdes of any misconduct, citing, among others, a report made by the Commission on Audit.

This means Mr. Valdes, who now heads the Philippine and Vietnam operations of Ernst and Young, can get whatever benefits were due him as Tidcorp head and, should he wish to, is qualified to work in government again.