Some bankers were surprised at the recent move by Phoenix Petroleum, the flagship of billionaire Dennis A. Uy, towards its creditors. That’s because Phoenix has roughly 3 billion pesos worth of bonds due in a few days, with many personal lenders counting themselves as holders of those debt securities. Bankers told Biz Buzz that a number of these personal lenders have received love letters from Phoenix regarding the company’s due commitment. No, that’s not bad news, but it raised some eyebrows nonetheless. That’s because Phoenix, in its love letter, offered to pay these lenders nice returns if they don’t reclaim their money when the bonds mature later this month, but instead agree to extend the commitment for a few more months. On the surface, any love letter recipient who agrees to keep their money with Phoenix for another six months receives an interest rate of 7 percent (billed annually), while those who agree to extend the debt for a full year an even better interest rate of 7.5 percent. It’s a tempting proposition given that interest rates in the Philippines are now at all-time lows thanks to the central bank’s attempt to revive the economy with ultra-loose monetary policy. In contrast, a 7 percent return is extremely tempting and hard to find these days. There is a catch, however. And that’s what gets on bankers’ nerves. In the love letter, creditors interested in rescheduling are asked to contact Phoenix directly and inform them of this intention. This is slightly different from the common practice of corporate borrowers going through financial intermediaries such as banks and investment houses when trying to raise money from outside founders, be it at the wholesale or retail level. What Phoenix is basically doing is eliminating the middlemen and going straight to the source of the funds. Some banks now fear that their wealthy clients who agree to the tempting offer may do so without the expert advice of their investment advisors. More importantly, a number of banks also fear that those customers who agree to transfer Phoenix’s debts (via promissory notes) will do so without the protection (including against possible default) that ordinary bondholders provide enjoy. Most importantly, these bankers are wondering how Phoenix can issue these promissory notes – essentially debt – to potentially hundreds of retail customers without getting approval from the Securities and Exchange Commission. Based on the 19 Lender Rule, all debt instruments with at least 20 lenders must be registered with the corporate regulator. Ask questions. Are they ever answered? Abangan! —Daxim L. Lucas Best Bank Security Bank has given its bigger competitors the battle for their money and won the “Philippines’ Best Bank” award from the London financial magazine Euromoney at the Euromoney Awards for Excellence 2021. “In the competitive landscape of Filipino banking, the best response to COVID-19 came not from the largest banks, but from a rising star, Security Bank. From the start, Security Bank took a protective stance: itself, its employees, its customers and its community. It is proof of the bank’s policies that not only have they stayed strong but have grown, ”said Euromoney. The release cites the bank’s record revenue of 50.4 billion pe ($ 1.05 billion) in 2020, a 48 percent year-over-year increase, an operating profit before deployment of 30.7 Billion pesos, which is an increase of 85 percent. “The Security Bank used its connections to the MUFG to establish a strategic partnership with the Bank of Ayudhya in Thailand, another member of the MUFG extended family. The two will work together on consumer finance, with digitization a priority. A cash management contract was also concluded with MUFG. Elsewhere in the bank, the wealth management business has grown impressively, ”added Euromoney. MUFG, the largest bank in Japan, provided Security Bank with fresh capital of 36.9 billion pesetas in exchange for a 20 percent stake in 2016. Sanjiv Vohra, president and CEO of Security Bank, the eighth largest private local universal bank, said 2020 was one of the toughest years for many industries, including banking. “We would like to thank our customers, partners and employees for their continued trust in Security Bank, which made this recognition possible. The award as the best bank in the Philippines is what drives us to achieve our goal of being the most customer-centric bank in the Philippines, ”he said. “This recognition confirms our commitment to ‘Better Banking’ towards our customers. We invest massively in what is important to them so that they can adapt quickly and find growth paths, ”added Vohra. The Euromoney Awards for Excellence, established in 1992 and now presented for the 29th time, seek the “best of the best” in all countries that offer banking services. The latest award makes Security Bank’s 70th anniversary even more meaningful this year. His other quotes are: “Best for HNWs (High Net Worth Clients)” in the Philippines in 2021 by Asiamoney and “Best Retail Bank in the Philippines” in 2021 by Alpha Southeast Asia. —Doris Dumlao-Abadilla Milk Tea Boom Aside from the recent surge in the supply of alternative meat products, the ongoing COVID-19 pandemic has also increased the demand for milk tea as consumers prefer healthier drink options. Even at the height of lockdowns last year, we heard that some retailers like Macau Imperial Tea did well, especially on the delivery side. Fruitas Holdings also sees a great opportunity to grow its Tea-Rex brand. Fast food giant Jollibee Foods Corp. recently acquired the right to exclusively sell and market the popular Taiwanese bubble tea brand Milksha in its restaurants. Milksha products are planned to be sold in Chowking stores initially, but Jollibee could be rolled out to other local restaurant brands in the future. Shakey’s Asia Pizza Ventures recently added R&B Milk Tea, one of Singapore’s leading brands in this category, to its portfolio. So far, the brand has been introduced in 133 Shakey’s and Peri-Peri Chicken stores. In addition to the usual soft drinks, iced tea and fruit juices in local restaurants, consumers are increasingly being offered more options, be it for eating, to take away or to have home delivered. —Doris Dumlao-Abadilla INQ Read on Don’t miss any news and information. Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer and other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4 a.m. and share articles on social media. 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