As early as the third quarter of 2004, motorists plying the route started to enjoy smoother rides plus reduced and more predictable travel time. The project involved the total rehabilitation, expansion and improvement of the 84-kilometer stretch from Balintawak in Quezon City to Sta. Ines in Mabalacat, Pampanga. That’s more than double the length of the entire South Luzon Expressway, from Magallanes in Makati to Calamba, Laguna. Now we learn that there’s even more to look forward to when the new NLEX is finally completed within the next couple of weeks.
The new toll plazas, interchanges and flyovers have all been completed. The new operations and management center has been testing and tweaking every system that forms part of this new state- of-the-art expressway – monitoring, communications, security, electronic and manual toll collection and motorists roadside assistance. The variable message signs informing motorists of road and traffic conditions are likewise in place and ready to serve.
At the risk of belaboring the issue, these improvements didn’t come cheap. Project proponent Manila North Tollways Corp. (MNTC) has invested over P20 billion to ensure that the long-needed rehabilitation of this toll road is done professionally and at world-class standards. That’s not even counting how much more it will take to maintain its current quality in the years to come.
Despite this fact, only a few know that MNTC has not collected even a single centavo from motorists who have been using and benefiting from the expressway which was 92 percent complete as early as October last year. By February however, motorists will contend with an adjusted toll rate estimated to be set at P2.49 per km. But the benefits far outweigh any perceived disadvantages.
A recent study shows that motorists currently plying the nearly-complete NLEX are already enjoying savings on vehicle operating cost of P0.95 per km. or up to P76 for the whole stretch. This means that motorists have to shell out less than what they used to for fuel, brake fluid, vehicle maintenance, etc. It also spells a big difference in terms of travel time, which is now more efficient and predictable.
It should be pointed out that earlier pronouncements of doomsayers claiming that car owners will start paying more than P200 when the NLEX is completed is true, but only if you travel the entire 84 kilometer stretch of the expressway. Based on most recent studies conducted, less than eight percent of all vehicles that enter the NLEX actually travel on it from end to end. The same study also revealed that the majority of users will actually pay less than P75 on the average.
More importantly, we must bear in mind that the toll road concept calls for its users to pay for the maintenance and operations. But in this country, the National Government has technically been subsidizing the operation of the country’s toll roads, with tax-payers money, simply because we have prevented the PNCC from charging what was fare and appropriate over the last 20 years. That was money better off used by government for delivering the basic services the rest of the country has been clamoring for. That’s probably also money of taxpayers from the Visayas and Mindanao who will probably never even see the North or South Luzon Expressway in their entire life.
For the myopic among us, understand that the completion of the NLEX means more than just faster and safer travel as a result of improved road capacity, efficient operation and traffic management, and quality road maintenance resulting savings on vehicle operating costs. This new world-class artery, combined with the logistical advantages offered by Clark and Subic, can be expected to jumpstart investments and expansions in business and industry that have long evaded Central and Northern Luzon.
Sources reveal that PNB’s net income last year will be more than double than that achieved in 2003. From P168 million in 2003, the bank’s bottomline has doubled to more than P336 million. The figure might be minimal for a bank as big as PNB but what is significant is the bank’s having been able to sustain its profitability for more than two consecutive years now, something that is supposed to start happening only this year based on its own five-year rehabilitation program.
According to our source, PNB was even programmed to lose over P800 million last year according to the most optimistic projections of its rehab program. After making a decent profit in 2003, the bank’s senior management decided to be more ambitious and aim for a final income figure of P205 million last year. Based on its final 2004 performance figures, PNB was able to surpass both projections by leaps and bounds. With the way and the speed Lorenzo Tan’s team has carried PNB back to the black, the bank is said to be over P5 billion or, equivalently, three years ahead of the forecasts made in its rehabilitation program and has now been rebuilt into a global Filipino consumer bank.
For what it has achieved so far, it seems Tan’s good bank-bad bank strategy is working perfectly well for PNB. The good bank was the main force that continuously brought in new business to the PNB since it commenced with its rehab in 2002. The strength of the good bank’s performance is largely credited for 2003’s positive bottom figures. The strategy as implemented by the team has so far raised P18 billion in low cost deposits for PNB and raised the profitability of the bank’s international business by P160 million every year. These strengths were further boosted this year by major breakthroughs on the side of the bad bank, which focuses on the management of PNB’s bad loans and assets. Among PNB’s biggest achievements on this end was its having led the National Steel Corp.’s secured creditors in selling the steel plant’s Iligan facilities to Indian-owned Global Infrastructure Holdings Ltd. The sale was able to wipe out over P5 billion worth of bad assets from PNB’s books. Our insider tells us other big-ticket items were likewise successfully restructured or sold last year placing total NPL reductions at about P8 billion.
Seemingly able to do the impossible, PNB managed to keep interest expenses low despite a huge growth in its deposit levels and amid the interest rates that prevailed last year. Bank management was also able to cut costs in strategic areas of operations, enabling it to minimize the growth of administrative and other expenses (which includes compensation and salaries) despite the signing and implementation of a new collective bargaining agreement for rank and file employees and a major upgrade in the bank’s IT system.
Judging from these indicators, there is indeed reason for all of us to believe that PNB is truly well on its way towards reclaiming its position of esteem in the local banking industry. Our hats off to Lorenzo Tan and his team members but, more importantly, to President Arroyo and business tycoon Lucio Tan for professionalizing a bank that has had a government orientation for 82 long years.
The government can perhaps learn a thing or two from PNB’s good bank – bad bank strategy in dealing with the fiscal crisis. Properly identifying the government’s non-performing assets, pricing them rightly and disposing them at the best price seems applicable not just to a recovering bank but to an economy in crisis as well.