Two years in a row

We just learned from friends in the international financial community Security Bank Corp.’s wholly-owned subsidiary, SB Equities, has been recognized for the second year in a row as one of the Philippines’ best local brokerage houses by leading financial publication, The AsiaMoney magazine.

In the most recent AsiaMoney Brokers Poll, the company was voted as one of the country’s top three local brokerage houses by chief investment officers, senior fund managers, senior investment analysts and wealth management houses in Asia-Pacific, Europe and North America.

The annual survey focuses on the performance of equity companies in terms of overall sales, trading and execution and reveals how clients view financial service providers against their peers. And the award evidently underlines SB Equities’ expertise in dealing and trading transactions.

One thing going for SB Equities is it has the advantage of leveraging further strengths from its affiliates, SBC and SB Capital Investment Corp. This unique alliance allows SB Equities to provide top-class professional service, managerial expertise, wider market reach and in-depth research capabilities.

President Warren Sy, SB Equities’ low key president, attributes the success to both its track record as well as relationships established through the years, resulting in P73.2 billion worth of value turnover in 2007 - 330 percent higher than what they posted in 2006.

It is evident that the focus of Security Bank president Abet Villarosa in doing everything right the first time continues to pay off both in terms of operating performance and global industry recognition.

Interim measures

In order to stabilize rice prices, government is looking at reducing import tariffs and opening up rice imports to the private sector.

These proposals, which are now being worked out by Agriculture Secretary Arthur Yap  and Finance Secretary Gary Teves, have received the backing of economists like former socioeconomic planning chief Felipe Medalla who believes this solution will stabilize prices and drive away hoarders and profiteers.

Rice imports are currently slapped a 50 percent duty to protect domestic farmers. According to reports, Malacañang plans to reduce the tax to between 10 and 40 percent to encourage traders to import the grain.

Without admitting it, economists like Medalla who propose the liberalization of rice imports agree that the current concerns over rice do not stem from lack of supply, but from pricing distortions triggered by external factors beyond government’s control.

Supply is not the problem. The problem is how to stabilize rice prices to keep the staple affordable for low-income and middle-class families.

In addition, Yap has requested the National Bureau of Investigation (NBI) to conduct a comprehensive audit of all import licenses issued by the NFA since he took over as DA chief in October 2006, to determine which traders had actually imported what volumes and where such imports had been delivered or sold.

This hopefully will help the DA crack down hard on unscrupulous grains businessmen hoarding stocks and switching NFA-subsidized stocks into more expensive commercial or premium varieties.

Yap’s directive was an offshoot of President Arroyo’s order to the DA to revoke the passbooks of some 10,000 licensed NFA-accredited grains traders and millers to flush out hoarders and other unscrupulous businessman abusing their trading privilege. The government expects that by compelling grains traders to undergo a reaccreditation process, only those engaged in legitimate trading practices will be issued new licenses to sell the staple.

The DA secretary has also directed the NFA to engage in direct or supervised selling not only of NFA-subsidized stocks, which are sold at P18.25 a kilo, but also of the medium-priced varieties at a range of P24-P25 a kilo, for the benefit of low- and middle-income families alike.

In tandem with the NBI and the Philippine National Police (PNP), the DA is likewise staking out NFA’s 500 warehouses and private warehouses nationwide to make sure that government-subsidized rice are not diverted to wholesalers or retailers and then sold as more expensive commercial stocks.

As per Yap’s order, the NFA will also deliver stocks directly to retail outlets in lieu of its standard practice of allowing accredited traders to pick them up in NFA warehouses. Yap expects this new practice to prevent switching or mixing of commercial stocks by unscrupulous traders.

One clear proof that there is no rice shortage is the ample supply of rice in retail outlets. The absence of long lines in retail outlets and the wide variety of rice offered by sellers show that there’s enough rice for the rest of the year.

The DA’s twin-pronged strategy of boosting production and securing imports also guarantees an abundant supply of rice in the months ahead.

The government has secured commitments from Vietnam, the United States and elsewhere to import as much as 2.8 million metric tons of rice.These commitments are on top of the contracted imports by the NFA totaling 1.2 million MT.

Given the continued financial backing by Malacañang for the DA’s intervention programs, Yap expects to even surpass 2007’s historic peak of 16.24 million metric tons of rice production with a projected yield of 17.32 million MT this year.

Yap is confident that the DA will likely meet this target, given the optimistic projections by the Bureau of Agricultural Statistics (BAS) that owing to the unmatched spending by President Arroyo on farm production, local farmers will harvest some 7.1 million MT during the April-June dry season alone. This is already higher than the 6.7 million tons harvested during the same period last year.

Moreover, the DA aims to plant palay in 2.54 million hectares during the wet or main planting season this year in order to harvest over 10 million MT and meet its all-time high 2008 target of 17.32 million MT.

However, with a high population rate, even record production volumes will not enable us to attain our food sufficiency goals overnight. Government has to resort to adequate imports in the meantime, to guarantee stable rice supplies in the domestic market.

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