the Outsider - PSE Points to Ponder

We’ve been blogging for free. If you enjoy our content, consider supporting us! RFM Corporation’s December 16 press release reads like a classic year‑end confidence note: ₱22.2B in full‑year 2025 sales , a targeted ₱1.6B net income , and a headline‑friendly ₱1.5B cash dividend program capped by a ₱500M payout scheduled for Dec. 19 . Management also leans on a comfort phrase investors love—“very liquid”—and highlights that the parent company carries zero loans , a rarity in consumer goods. The message is clear: profits are steady, cash is ample, and dividends are part of the identity. But when you put that upbeat narrative beside the company’s 9M 2025 SEC 17‑Q , a more nuanced picture emerges—one that many income investors learn the hard way: profits and operating cash flow are cousins, not twins . Through September 30, 2025, RFM posted ₱1.252B in net income, yet net cash generated from operations collapsed to ₱141M, down sharply from ₱1.304B in the prior-year  period. In other wor...

We’ve been blogging for free. If you enjoy our content, consider supporting us! When Benpres Holdings Corp. (now Lopez Holdings Corp.) exited PCIBank in 1999, management sold the transaction as a strategic reset: redeploy capital toward “communications and utilities” and fund an emerging convergence play spanning broadcast, cable, telecoms, and infrastructure. Benpres later said outright that it sold PCIBank to focus on these core businesses, booking a one-time gain that helped cushion other one-off charges in the group’s portfolio. But the market’s memory of what came after the bank exit is less tidy. Two of the headline investments that stood to benefit most from the pivot— Bayan Telecommunications (Bayantel) and Maynilad Water Services, Inc. —both later entered court-supervised rehabilitation (and, in Maynilad’s case, a concession breakdown and arbitration that effectively ended the original operating path under the earlier shareholder group). That history matters again today as t...

  We’ve been blogging for free. If you enjoy our content, consider supporting us! What a 4.375% coupon reveals about confidence, currency, and the “gold standard” bank. BDO Unibank recently priced USD 500 million of 5‑year fixed‑rate senior notes with a 4.375% coupon , a deal the bank said was more than 3.2x oversubscribed —a tidy headline in any market cycle.  Now hold that number up against the Philippine government’s peso borrowing benchmarks. On the Bureau of the Treasury’s published snapshot, T‑bill auction averages sit roughly in the high‑4% range (with posted averages around 4.759% for 91‑day, 4.873% for 182‑day, and 4.962% for 364‑day in the displayed auction results), while the 5‑year reference yield shown is around 5.564% .  At face value, it looks like a private bank is borrowing at a lower stated rate than the sovereign—an optics-rich contrast that invites the easy conclusion: BDO is “safer” than the government. But capital markets are rarely that simpl...

We’ve been blogging for free. If you enjoy our content, consider supporting us! In conglomerate finance, the most effective hedges are not always derivatives. Often, they are portfolio choices —owning a defensive, cash-generative asset that can steady the ship when a cyclical business turns against you. JG Summit Holdings (JGS) offers a timely example. While its petrochemical unit has endured a punishing global downcycle, JGS’s long-held stake in Manila Electric Co. (Meralco, MER) has acted as a stabilizer through recurring dividends , a large mark-to-market value , and a demonstrated ability to raise cash via block sales when needed. The contrast is stark. Petrochemicals are exposed to global supply additions, feedstock spreads, and demand swings—variables that can remain unfavorable for years. JGS itself acknowledged that “unfavorable polymer margins” continued to weigh on JG Summit Olefins Corp. (JGSOC) even as the group posted stronger consolidated revenues in 2024. Market repor...

We’ve been blogging for free. If you enjoy our content, consider supporting us! Vista Land & Lifescapes (VLL) has always been a story of two engines: the cyclical churn of homebuilding and condo turnovers on one side, and the steadier cadence of rental income from commercial assets on the other. In the first nine months of 2025, both engines did their job—barely. Consolidated revenues rose a modest 2.2% to ₱28.399 billion , supported by real estate sales (+~3%) and rental income (+~3%) . But the quarter’s real headline isn’t the topline. It’s the bill that arrives after the sales and rent checks clear: financing cost . A decent earnings print—until you look at the interest line VLL reported net income of ₱9.462 billion , up ~4.3% year-on-year (9M 2024: ₱9.076 billion), with EPS rising to ₱0.668 (from ₱0.627). On paper, that’s a clean, incremental improvement—especially in a market that’s still juggling buyer affordability, selective demand, and uneven project completion cycles....

We’ve been blogging for free. If you enjoy our content, consider supporting us! Philippine National Bank’s return to the peso bond market would normally be filed under “good news”: strong demand, a sizeable PHP 15.7 billion raise, and a clear promise to funnel proceeds into eligible projects under its Sustainable Financing Framework. But markets don’t grade banks on deal headlines—they grade them on spread , the narrow space between what a bank earns on assets and what it pays for money. And that spread is now facing a two-sided pincer: a fresh BSP rate cut that can pull loan yields down , and new fixed-rate bond funding that doesn’t reprice lower .  A bond deal priced for yesterday’s rate environment PNB’s issuance came in two tranches: Series A (3-year) at 5.4877% and Series B (5-year) at 5.7764% , for a combined PHP 15.7 billion . Those are clean, tradable coupons investors like because they are predictable. For the bank, however, predictability cuts both ways: these rates are...

We’ve been blogging for free. If you enjoy our content, consider supporting us! The Bangko Sentral ng Pilipinas (BSP) delivered another 25‑bp rate cut today, bringing the policy rate to 4.5% —its fifth trim in this easing cycle and a clear signal that officials are leaning dovish to cushion a year of weaker growth and benign inflation. For listed Philippine companies, that shift unlocks a new pecking order of beneficiaries: property developers and REITs at the top, banks close behind, and telcos and power names improving their free‑cash‑flow math as borrowing costs slide.  Property: The immediate, broad‑based winner Lower policy rates translate swiftly into cheaper mortgages , lower hurdle rates for new projects, and improved valuation multiples —a trifecta for developers. Industry analysts have already framed BSP easing as a catalyst for residential demand and commercial activity: more affordable homeownership, revived pre‑selling momentum, and better leasing economics as ...