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Philippine banks seek to collect millions from downturn-hit Hanjin

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ABS-CBN News

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="http://sa.kapamilya.com/absnews/abscbnnews/media/2019/news/01/11/shipping-091016.jpg"/><figcaption>A Hanjin Shipping Co. ship is seen stranded outside the Port of Long Beach, California, US. The Korean&#x27;s shipbuilding unit in the Philippines has sought court-assisted rehabilitation to pay some $412 million in debt. <em>Lucy Nicholson, Reuters</em></figcaption></figure></div><p>MANILA -- Philippine banks are moving to collect some $412 million in debt from Hanjin, as the Korean shipbuilder that is hit by a slowdown in global demand sought court-assisted rehabilitation, officials said Friday.</p><p>The country&#x27;s largest lender BDO Unibank along with Bank of the Philippine Islands and Rizal Commercial Banking Corp confirmed loan exposures to Subic Bay-based Hanjin. The Philippine Daily Inquirer, which first reported on the debt, identified Metrobank and LandBank of the Philippines as among 5 creditors.</p><p>Hanjin, which employs 3,000 people at its shipyard north of Manila, has $2.3 billion in assets and the rehabilitation filing was a &quot;proactive move&quot; to avoid default, said Subic Bay Metropolitan Authority administrator Wilma Eisma.</p><p>The Bangko Sentral ng Pilipinas said Hanjin&#x27;s $412 million in loans accounted for just 0.24 percent of the Philippines&#x27; total gross loans or 2.48 percent of FCDU or foreign currency deposit unit loans.</p><p>Hanjin&#x27;s debt woes will not adversely affect Philippine banks, BSP Deputy Governors and officers in charge Chuchi Fonacier and Diwa Guinigundo said in separate interviews on ANC.</p><p>Shares of BDO, BPI, RCBC and Metrobank fell on Friday along with the entire financial sub-sector. The Philippine Stock Exchange Index was down 1.38 percent at noon.</p><figure class="op-interactive"><div id="IVS_ABS_Body_Video_1_Container"> <ivs-player id="IVS_ABS_Body_Video_1" data-ivs-spid="3001339" data-ivs-key="e8c22c015ca9eafa76f1e3edfa03c603" data-ivs-vid="1394699" data-ivs-floating="1"></ivs-player> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/iframe-parent.js"></script> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/loader.js"></script> </div></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div><p>&quot;Malaki po ang assets, wala lang pong cash,&quot; Eisma told DZMM.</p><p>(They have huge assets, just not enough cash.)</p><p>&quot;They are very forward-looking and they are very responsible. Ayaw nila maghintay na magde-default sila kaya maaga pa lang, they want to come to the table with all the banks and with the help of the court, magkaroon ng usapin paano nila unti-unti pang mababayaran ang pagkaka-utang nila,&quot; she said.</p><p>(They are very forward-looking and they are very responsible. They don&#x27;t want to wait for a default that&#x27;s why this early, they want to come to the table with all the banks and with the help of the court, open discussions on how they can pay their debt.)</p><p>Eisma clarified that Hanjin had not defaulted on loan or interest payments and it was still considered an &quot;investor of good standing.&quot; The company is not saddled with its parent&#x27;s debts, she said.</p><p>In 2016, Hanjin Group approved a 60 billion won ($55 million) bailout plan for its shipping business. At that time, Hanjin Shipping had about 6 trillion won ($5.4 billion) in debt.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/09/10/16/bailout-for-crisis-hit-hanjin-shipping-gets-conditional-approval">Bailout for crisis-hit Hanjin Shipping gets conditional approval</a></li>	<li><a href="https://news.abs-cbn.com/business/09/21/16/doubts-raised-on-hanjin-rehab-plan-as-ships-clog-busan-port">Doubts raised on Hanjin rehab plan as ships clog Busan port</a></li></ul><div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="http://sa.kapamilya.com/absnews/abscbnnews/media/2019/news/01/11/20190111-hanjin.jpg"/></figure></div><div><strong>COLLECTIVE ACTION</strong></div><p>Hanjin&#x27;s creditors are looking at &quot;all kinds of alternatives,&quot; including talking to strategic investors, BPI president Cezar Consing told ANC&#x27;s Market Edge.</p><p>The banks are &quot;in close contact with one another&quot; and a resolution could be reached in a &quot;few months.&quot;</p><p>&quot;I think we will be alright. We&#x27;re actually talking about all kinds of alternatives now. It will be premature to be talk about specifics,&quot; he said.</p><p>BDO president Nestor Tan said the country&#x27;s largest bank &quot;more than adequately provided for potential losses.&quot;</p><p>RCBC said its exposure was &quot;very manageable and the borrowing company&#x27;s business is actually very attractive with a lot of potential.&quot;</p><figure class="op-interactive"><div id="IVS_ABS_Body_Video_2_Container"> <ivs-player id="IVS_ABS_Body_Video_2" data-ivs-spid="3001339" data-ivs-key="e8c22c015ca9eafa76f1e3edfa03c603" data-ivs-vid="1394701" data-ivs-floating="1"></ivs-player> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/iframe-parent.js"></script> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/loader.js"></script> </div></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div><p>Acting as one, even if the Hanjin borrowings were negotiated separately, will be the &quot;best move&quot; for the creditors, Fonacier told Early Edition.</p><p>They will be taking action collectively as a group of creditors.</p><p>&quot;We are aware of this. We are monitoring. There is no cause for worry,&quot; Fonacier said.</p><figure class="op-interactive"><div id="IVS_ABS_Body_Video_3_Container"> <ivs-player id="IVS_ABS_Body_Video_3" data-ivs-spid="3001339" data-ivs-key="e8c22c015ca9eafa76f1e3edfa03c603" data-ivs-vid="1394703" data-ivs-floating="1"></ivs-player> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/iframe-parent.js"></script> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/loader.js"></script> </div></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div><div><strong>FALLOUT BEYOND BANKS</strong></div><p>&quot;Well-capitalized&quot; and with a non-performing loan ratio of &quot;less than 2 percent,&quot; the effects of a possible default on banks will be &quot;very very negligible,&quot; Guinigundo told Market Edge.</p><p>There could be a &quot;knee-jerk reaction&quot; but the Hanjin case is not a &quot;systemic issue,&quot; he said.</p><p>Guinigundo said authorities are monitoring the effects on sectors outside banks, such as Hanjin&#x27;s suppliers.</p><p>&quot;What we need to do is stay on the ground and determine the actual extent of the exposure,&quot; he said.</p><p>&quot;There could be some exposure to suppliers and these are not banks. These are things that we need to understand,&quot; he said.</p><p>There was no immediate statement from Hanjin as of noon Friday. Representatives from the trade and labor departments met recently with company officials in Subic, according to SBMA&#x27;s Eisma.</p><p>She said Hanjin cited a &quot;downturn&quot; in global shipping for its woes. The company builds ships with 6,000-container capacity and those that could carry liquefied petroleum gas and liquefied natural gas.</p><p>At the peak of demand in 2014 and 2015, Hanjin employed up to 33,000 people, she said. Former Hanjin workers are &quot;very highly employable&quot; because of their training, she said.</p><p>&quot;Based sa pag-uusap namin, nangyari ito dahil sa worldwide downturn sa shipping industry. This is something because of supply and demand,&quot; she said.</p><p>(Based on our discussions, this is happening because of the worldwide downturn in the shipping industry. This is something because of supply and demand.)</p><div><strong>EARNINGS HIT</strong></div><figure class="op-interactive"><div id="IVS_ABS_Body_Video_4_Container"> <ivs-player id="IVS_ABS_Body_Video_4" data-ivs-spid="3001339" data-ivs-key="e8c22c015ca9eafa76f1e3edfa03c603" data-ivs-vid="1394672" data-ivs-floating="1"></ivs-player> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/iframe-parent.js"></script> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/loader.js"></script> </div></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div><p>Hanjin&#x27;s creditor banks in the Philippines risk a hit in their earnings this year if they failed to provision for a possible default by the Korean shipbuilder.</p><p>RCBC has the &quot;biggest exposure&quot; to Hanjin and could report a loss &quot;at worst&quot; if the entire debt is unpaid, said China Bank Securities research director Garie Ouano.</p><p>&quot;If it does affect earnings, it&#x27;s likely gonna be seen as a one-off,&quot; Ouano told ANC&#x27;s Market Edge.</p><p>&quot;Fundamentally, the banks are still strong. There&#x27;s no clear evidence that the bankruptcy of Hanjin is a systemic problem so there&#x27;s really no reason to be bearish on the sector for the long term,&quot; he said.</p><p>The financials sector on Friday closed 2.54 percent lower compared to a 1.02-percent decline in the main index.</p><p>RCBC was down 9.12 percent, BPI fell 4.76 percent while Metrobank shed 4.82 percent. BDO closed unchanged.</p><div><strong>-- reports from Cathy Yang, Michelle Ong and Bruce Rodriguez, ABS-CBN News</strong></div>

<p>Hanjin, which employs 3,000 people at its shipyard north of Manila, has $2.3 billion in assets and the rehabilitation filing was a "proactive move" to avoid default, said Subic Bay Metropolitan Authority administrator Wilma Eisma.</p>

Hanjin, which employs 3,000 people at its shipyard north of Manila, has $2.3 billion in assets and the rehabilitation filing was a "proactive move" to avoid default, said Subic Bay Metropolitan Authority administrator Wilma Eisma.