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Parking income should be properly disclosed

Published on 26 May 2013 [ ]
Most, if not all, mall owners and operators, particularly those in Metro Manila, do not offer free parking spaces. Never mind if they already benefit from their car-owning patrons who buy their services or products.
Since operating parking facilities is profitable, business groups find in them a good and source of income. This could be the reason for the expansion in of parking spaces in malls. The SM group, which is controlled by businessman Henry Sy Sr. and his family, even builds and maintains buildings specifically designed for parking, or expanding the family owned malls parking spaces because this is the business that requires the least capital but generates better returns.
Yet, if you were to go over the financial filings not only of the SM group but those of the other mall owners as well, you would not find any specific amounts defined as “parking” revenues. Perhaps, the amounts could have been hidden somewhere such as in “other income.”
But then, if parking contributes significantly to a company’s revenues and profitability, then why should it not be properly credited for the money, instead of including its participation in the group behind other entries in the financial filings? Don’t mall owners know that properly disclosed, the information could even boost the market performance of their company’s stock, if it is listed on the Philippine Stock Exchange?
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SM Prime Holdings Inc., the subsidiary of the SM group, is no doubt the Philippines’s biggest and most profitable mall owner and parking operator.
In its 2012 financial report, SM Prime said that as of December 31, 2012, SM Megamall already had a parking space that could accommodate 2,792 vehicles. Yet, it is not the company’s mall that has the biggest parking area. SM Mall of Asia has even more. SM Prime counted the parking slots of its mall by the bay at 4,969.
Naturally, the SM group has parking areas in as many malls and stores that they own and operate. Some of them and their parking spaces are: SM City North EDSA’s multi-level car park with a total capacity of 3,511 cars; SM City Southmall’s car park for 2,692 cars; and SM City San Lazaro parking spaces for more than 1,000 vehicles.
By the end of the year, SM Prime, which as of December 31, 2012 had 42 malls in the country, will develop five more this year to bring the total to 48. And all of these, of course, will have parking spaces.
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To illustrate how some numbers are “missing” from audited financial statements, let’s take a look at SM Prime. The mall holding company had three sources of revenues in the consolidated reports in 2012 such as rent, P25.902 billion; cinema tickets, P3.477 billion; and “amusement income and other income, P1.347 billion.”
Sad to say, not one of them shows any amount entered as “parking revenues,” thereby depriving the public even a hint where to start if they would guess the numbers. Perhaps, SM Prime could have “consolidated” parking income under “others.” But then, when has parking a car become a form of, or an item related to, “amusement?”
In fairness to the Gokongwei group, Robinsons Land Corp., does its reporting differently. Over the years, it has been consistently reporting four entries under revenues. In its fiscal year ended September 30, 2012, it reported rental income of P6.690 billion; real-estate sales, P4.105 billion; amusement income, P831.006 million; and others, P504.263 million.
By separating “others” from “amusement,” Robinsons Land offered the public a hint of where to start their search for the hidden numbers that would approximate the amounts that had been habitually hidden from the public .
With only “others” their main guide, should the public conclude that P504.263 million would be Robinsons Land’s parking income? If this would be so, then they would have a reason to buy Robinsons Land in the next market day.
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Parking spaces in malls should have been free when the Senate, after holding public hearings, had ruled so many years ago. However, to Ayala Land Inc., SM Prime, Robinsons Land and Shangri-La Plaza Corp., the Senate’s finding was not acceptable; they joined forces and went to court.
The court battle, with the Office of the Solicitor General taking up the cudgel for the public, reached the Supreme Court where they scored their major victory against the Senate.
With the High Court ruling in their favor, mall operators have since made parking a good source of income. Parking fees have since gone up and continue to go up, because there is no government agency to regulate the increases.
While the court case was still pending, Ayala Land was charging P25 per hour for the first four hours plus P10 for very succeeding hour on weekdays; and flat rate of P25 per day on weekends; Robinsons, P20 for the first three hours and P10 for every succeeding hour; Shangri-La, flat rate of P30 per day; and SM Prime, P10 for outdoors and P20 for indoors for the first three hours and 59 minutes, and P10 for every succeeding hour or fraction.

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