Presidents Report 2011
PRESIDENT'S REPORT - 2011
Time flies, it has been another year since we met in this hotel for our last annual stockholders’ meeting. Allow me to welcome you, the valuable shareholders of Mabuhay Holdings Corporation, to this annual gathering of our company.
Every year, I start my report by showing you the picture of the world economy. I regret to say that at this time, I do not believe I have much good things to say about that. We all know that the three major economic leaders of the world, namely, the United States of America, the European Union and Japan, are all encountering serious financial and economic problems.
Several countries in the European community are facing critical economic upheavals. Currently, Greece is confronting the serious crisis of a possible default of her sovereign debts. A few other countries are also lining up to receive the urgent assistance of their big brothers in the European Union and the International Monetary Fund. While curbing the financial and economic difficulties, Europe is also experiencing problems of social unrest. A good and effective solution to the European economic problem is still very remote.
Japan used to be another economic superpower that stimulated the worldwide economic activities. But the earthquake and tsunami that occurred in northeastern Japan earlier this year and the consequent nuclear leakage of the power plant had caused so much damage to Japan that until this moment, this economic superpower has not yet recovered from the panics of the disasters. Worse, the political arena in Tokyo is so chaotic that makes the present government administration very unstable. We cannot expect Japan to be of help to the world economy within a short period of time.
The economic situation in the United States is no better, if not worse. USA is so seriously debt-ridden that she has hit the debt ceiling set by its Congress. Until this moment, the US Congress has yet to reach a compromise on the increase of federal debt ceiling, failing which the Americans will also face possible defaults in her sovereign debt for not being able to pay the interest on bonds issued. We do not foresee fast recovery of the US economy in the near future. The United States will survive only by issuing more debt instruments and printing more new money. In effect, the so-called Quantitative Easing program of the US government has temporarily rescued the American economy, but at the same time, triggered an international inflation.
Only this week, the oil price has gone back to over a hundred US dollars per barrel. Gold price has shot up to a historical high of over US$1,600 per ounce. The hot money from the over-printing of US green bucks has caused serious inflationary effects in all parts of the world, noticeably among the fast developing countries like India, Vietnam and China. Inflation continues to be a nightmare of the leaders of all nations.
Although the whole international economic community looks gloomy, we are nevertheless much more optimistic with our own Philippine economic situation. As I mentioned in my reports to you in the previous years, our country is a blessed land. The Philippines is the country least affected by the global financial chaos. The structure of our economy enables us to stand firm against the odds in the international crisis.
We cannot be spared from the international inflation. The sharp increase of oil price has also seriously affected our daily life. However, the worldwide inflation has brought up the market prices of minerals. As our country is rich in natural resources and we are an exporter of mining products, our balance of payment has improved with the rise of prices of gold, copper, nickel, coal and other minerals. We also observe that Business Outsourcing companies continue to flock into our land, taking advantage of our lower labor cost and the proficiency of our people in the English language. At the same time, the Filipino overseas workers continue to remit billions of dollars to their home towns. Despite the worldwide economic troubles, the remittances of our OFW’s have been increasing steadily.
All these factors have immensely contributed to the economic stability of our country. We believe that with the stable situation we enjoy under the present government, and with the committed eradication of graft and corruption of this administration, more foreign investors will be coming to our shores in the near future, thus making more job opportunities available for our people. The Philippine economy is currently in a healthy shape, and further development is predictable.
Now let us come back to our own company. As I reported to you last year, the main business thrust of Mabuhay Holdings Corporation at the present stage is to fully support and energize Interport Resources Corporation, in which we have substantial investments. Interport had entered into a joint venture for the development of low-cost housing projects. I am happy to inform you that no less than Vice President Binay had graced the occasion to inaugurate the first batch of our houses in Binangonan last May 22. Vice President Binay also officiated the laying of the cornerstone of Interport’s condo project, the Eastridge Residences project.
Allow me to proudly announce that for the first time in many years, the external auditors of Interport, Isla Lipana Price Waterhouse, had declared the company a “going concern” and did not make any statement in the financial reports that the company is under observation as in the previous years. Mabuhay will definitely benefit from the business successes of Interport.
We are also looking into the possibilities of entering into a joint venture for the development of our land in Tagaytay City. We have already made initial contacts and will push through with the discussions. Over this year, we had sold the property in General Santos City owned by our subsidiary, Mindanao Appreciation Corporation, thus removing the problem of administering a small property far away and difficult to control.
Our prime land in Tagaytay facing the Taal Lake has been occupied by squatters. We have made headways in the legal proceedings, and we are expecting the demolition of the illegal squatters to be carried out by this coming September. I hope to report to you good developments on this matter in our next shareholders’ meeting.
Once again, I would like to assure you that the management of Mabuhay Holdings Corporation will diligently monitor the changing conditions in the domestic and international business communities, and we will continue to explore growth opportunities for our group.
Allow me to reiterate our gratitude and appreciation for the continued support and trust that you, the valued shareholders of the corporation, have given to the management. Let us look forward to a better year for all the shareholders of Mabuhay Holdings Corporation.
Thank you and Mabuhay.
Esteban G. Peña Sy
July 28, 2011