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WHEN
owners and managers of a company take the initiative to
explain a law that could reduce profits, then they are
engaged in a civic duty that makes their corporation a
good corporate citizen with a corporate conscience. This
is what a restaurant chain controlled by businessman
Martin Lorenzo is doing at the expense of its
profitability: it gives 20-percent discount, as provided
for in the Senior Citizens Act, to senior citizens even
those who don’t have identification cards issued by the
mayor of the city or town where they reside. The chain
includes Pancake House, Dencio’s Grill, Teriyaki Boy and
Singkit, which are all operated by Pancake House Inc.,
the only restaurant listed on the exchange.
The
discount, as a result of this transparency, is bound
also to adversely affect Pancake House Holdings Inc. (PHHI),
the majority corporate stockholder of Pancake House, the
company that owns Pancake House, Teriyaki Boy, Dencio’s
Grill and Singkit. In the thick layers ownership,
Lorenzo appears as the majority stockholder of PHHI in
which he holds 73.43 percent of outstanding capital
stock.
****
Lorenzo
makes complying with the law easy. He and his people
simply tell the public that the law simply requires a
senior citizen to show proof of being at least 60 years
old to avail himself of the benefits to which he is
entitled. This means any ID that shows he is 60 years
old or over. The law does not say anything about the
limit.
If
Pancake House informs its senior diners that they can
enjoy the benefits under the law even without
mayor-issued IDs, why can’t other business
establishments covered by the law do the same?
Despite
the discounts, Pancake chain has been making money. Its
profitability has enabled it to give out dividends:
P0.06 per share, or P11,318,181.84, paid on June 30,
2006; P0.040 per share, or P7,545,454.56, paid on
December 29, 2006; and P0.05 per share, or
P9,431,818.20, paid on April 30, 2007.
After
all these dividends, which add up to P28,294,454.60,
Pancake House still had retained earnings of P77,821,413
as of June 30, 2007.
****
Here is
the provision of the law on “identification document”
which a senior citizen should know or should carry with
him if he does not have a senior citizen ID.
“Identification document,” says the law, “shall refer to
any document or proof of being a senior citizen which
shall be used for availment of benefits and privileges
under the law such as the following: a) ID issued by the
city or municipal mayor or Office of Senior Citizens
Affairs (OSCA) or of the barangay captain of the place
where the senior citizen or the elderly resides; b) the
passport of the elderly person or senior citizen
concerned; and c) other documents that establish the
senior citizen or elderly person as a citizen of the
Republic and who is at least 60 years of age.”
There is
a problem though when it comes to disabled persons.
Pancake House and other covered entities want to know up
to what extent of disability should one be suffering
from to entitle him or her to 20-percent discount on
services and products, etc.
****
Philippine Long Distance Telephone Co. has been doing
well in the market, even breaching P3,000. On October 3,
2007, it closed at P3,040 after opening at P2,970 and
hitting a session’s high of P3,065. It closed at a
30-month high of P3,100 on October 5, 2007, up 22.529
percent from P2,530 on August 24, 2007.
There
must be a reason for PLDT’s surge. In a filing dated
October 5, 2007, lawyer Ma. Lourdes Rausa-Chan,
corporate secretary of Philippine Long Distance
Telephone Co., told regulators that Pilipino Telephone
Corp. and Smart Communications Inc. “had approximately
28.3 million cellular subscribers and Smart Broadband
had 260,000 wireless broadband subscribers as of
September 30, 2007… While it is possible to reach 30
million subscribers by the end of the year, we cannot
guarantee the attainment of this goal.”
This
disclosure, despite the negative approach, sends to
investors a positive implication on PLDT’s bottom line,
particularly when one looks at the effects of the
filing—the number of subscribers—on the financial
performance of Piltel, which is now profitable. As of
June 30, 2007, it has piled up retained earnings of
P3.5655 billion against a deficit of P22.241 billion as
of end-2006. On October 5, 2007, Piltel hit a 30-day
high of P7.50, up from a month’s low of P6.40. |
