LEADING mass-housing firm 8990 Holdings Inc. has come up with an enviable growth strategy that, if successful, could partially solve the Philippines’s housing backlog, which now stands at 4 million units. This strategy involves a “halfway house” concept, which seeks to uplift the living conditions of working people in Metro Manila who are either renting bedspaces, living in dormitories or sharing apartment rooms.
8990 Holdings President and CEO Januario Jesus Gregorio B. Atencio III told me recently that the listed company, whose earnings grew by a staggering 74 percent from P580 million in the third quarter of 2013 to P1.02 billion in the same period this year, is planning to build condominiums in the metropolis that would allow members of the working class to transform their “present rental expense into a monthly amortization toward the ownership of a unit that is cleaner, more convenient, newer, more secure and more flood-free.”
Atencio even has a slogan for the halfway-house concept: From urban decay to urban Deca (the company’s brand name). He’s so enthusiastic about it that he is thinking of marketing the inexpensive housing units that he and other company officials have envisioned through social media.
8990 Holdings has been electrifying the investing world lately, with Malaysian sovereign wealth fund Khasana Nasional Berhad and top American fund manager Texas Pacific Group each putting P2.9 billion into the housing firm. In fact, Atencio went to Singapore over the weekend to conduct a presentation to an investor, who wanted to look at the company’s investment model, which has a social-enterprise component.
One hundred percent of those who buy 8990 Holdings’s housing units (each costs less than P1 million) are “gainfully employed and earning at least P30,000,” said Atencio, who zealously attends all of the Ateneo de Manila University basketball team’s University Athletic Association of the Philippines games. The reason for the takeup? Those who buy just switch their current rental expense into amortization for the units they would eventually own. That is what the company offers, Atencio said with a smile on his face.
Globe’s challenge for PLDT
ANOTHER battlefront has emerged in the country’s telecommunications war. This time, it’s on domestic Internet protocol (IP) peering, wherein the need for domestic Internet traffic to go out of the country first before going back in is eliminated. Unfortunately, that is not happening in the telecommunications infrastructure of the Philippine Long Distance Telephone Co. (PLDT), according to Globe Telecom.
Francisco Claravall IV, Globe vice president for product development and management, recently told PLDT not to allow Internet traffic to be diverted out the country first before letting it back in if the connection is only between one domestic point—say, Dagupan City in Pangasinan province—and another (Zamboanga City, for example). He said that, if the telecommunications giant does this, it would greatly impact Internet speed.
“Even the Department of Science and Technology supports this position,” Claravall said, “as it allows Internet exchange through the Philippine Open Internet Exchange [PHOpenIX], the only Internet-exchange facility operated by a neutral organization—in this case, by the government. In the middle of this year, Globe challenged PLDT to make good on its claim of supporting IP peering by connecting to PHOpenIX.
Citing a report that the National Telecommunications Commission shared during a Senate hearing on the subject, the Globe official said that, in Singapore and South Korea, Internet traffic is mostly generated internally, thanks to their effective IP-peering policies. As a result, Internet speed is enhanced.
“In fact, the issue has fired up even ordinary customers, as they have become interested in [such] a technical subject as IP peering,” Claravall said.
It would be interesting to see how PLDT would respond to Globe’s challenge in light of the government’s findings that domestic IP peering offers benefits to the public.
RFM’s Q3 performance disappoints
CONCEPCION-LED RFM Corp. has disclosed disappointing financial results for the third quarter (Q3), which the listed company is blaming on the recent cargo congestion at the Port of Manila (the result of the Manila city government’s daytime truck ban), and the red tape at Bureau of Customs, which needlessly held up shipments.
RFM’s net income grew by only 10 percent for the first nine months of the year, posting earnings of P578 million. This falls far short of the P1 billion that company officials had projected to get by year-end.
RFM may have reason to blame the cargo congestion as the reason for its underwhelming Q3 performance, but, still, stock-market pundits are certainly not happy about it.
Image credits: Benjo Laygo