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Nuggets beat Spurs in Game 7

LOS ANGELES — Nikola Jokic had 21 points, 15 rebounds and 10 assists, Jamal Murray finished with 23 points, and the host Denver Nuggets beat the San Antonio Spurs 90-86 in Game 7 of a Western Conference quarterfinal series on Saturday night.

The second-seeded Nuggets advance to play the fourth-seeded Portland Trail Blazers in the conference semifinals. Game 1 is Monday in Denver.

Rudy Gay had 21 points, DeMar DeRozan and Bryn Forbes scored 19 each and LaMarcus Aldridge had 16 points and 11 rebounds for seventh-seeded San Antonio.

The Nuggets led the whole way but had to sweat out the ending.

Aldridge sank a layup to make it 84-80 with 4:13 left. San Antonio had a chance to get within one or two, but Forbes lost the ball on a drive to the basket, and Murray and Torrey Craig scored for Denver to make it 88-80.

Forbes hit a 3-pointer before DeRozan split a pair of free throws with 1:10 left to make it 88-84. Forbes dunked after a Denver miss go make it a two-point game with 52.2 seconds left.

Murray drained a floating 14-footer make it a four-point lead, and Craig blocked DeRozan’s drive to the basket with 28.4 seconds left. The Spurs didn’t foul, and Denver was able to run the clock down and hold on.

After a cold-shooting first half, both teams started hitting shots. Denver made five of its first seven shots in the third quarter and built a 17-point lead. The Spurs got within 72-61 heading into the fourth.

The Spurs missed 17 of their first 19 shots and had just four points in the first nine minutes of the game yet trailed by only 13 points. Gay scored the last nine San Antonio points in the first quarter to keep it close.

The teams combined to go 2-for-22 from 3-point range in the first half and made just 28 of 90 shots. The Spurs’ 34 points at halftime matched what they scored in the first quarter of Game 6.

Jokic (15 points) and Gay (11 points) were the only two players to reach double figures in the first half.

RAPTORS WIN GAME 1 VS 76ERS
Kawhi Leonard scored a career playoff best with 45 points and grabbed 11 rebounds as the Toronto Raptors defeated the visiting Philadelphia 76ers 108-95 Saturday night in the opening game of their Eastern Conference semifinals.

Pascal Siakam added 29 points and seven rebounds for the Raptors and Kyle Lowry added nine points and eight assists.

JJ Redick had 17 points for the 76ers. Joel Embiid chipped in with 16 points and eight rebounds, while Tobias Harris had 14 points and 15 rebounds. Ben Simmons also had 14 points with nine rebounds, James Ennis III had 11 points and Jimmy Butler had 10.

The Raptors led by as many as 19 points and took an 11-point lead into the fourth quarter. Leonard’s 14-footer had the Raptors leading by 18 with 7:06 remaining. The lead reached 20 on Leonard’s jumper with 4:17 to play.

The Raptors opened a lead of 14 points during the first quarter but settled for a 39-31 advantage entering the second quarter.

The 76ers continued to chip away and drew within one point when Harris hit a jumper with 8:02 left in the half.

The Raptors then reeled off nine straight points and led by 10 when Leonard made a pair of free throws with 5:44 remaining.

The Sixers pulled back to within seven points, but the Raptors led by 11 with 2:45 to go in the half on Leonard’s running layup.

A cutting dunk by Simmons completed the first-half scoring with the Raptors leading 61-52.

Leonard had 27 first-half points and Siakam had 22.

Harris and Embiid each had 12 first-half points for Philadelphia.

Redick started the second half with a 3-pointer to trim the lead to six points. His fourth 3-pointer of the third quarter cut the lead to four points with 8:48 remaining.

The Raptors pulled away again and Leonard’s 3-pointer had them ahead by 17 with 6:02 left in the third. But Ennis hit a 3-pointer to reduce the margin to 11 at the 4:45 mark. The Raptors pulled away again and led by 19 on Leonard’s pull-up jumper with 1:34 to play before Redick answered with his fifth 3-pointer of the quarter.

The Raptors led 92-81 after three quarters. — Reuters

San Miguel Beermen bullish as they prepare for another finals run

BACK in the finals of the PBA Philippine Cup for a fifth straight time, the San Miguel Beermen feel good about their chances especially with the kind of team they have and the road they took to get where they are right now.

First to book a finals spot after closing out the Phoenix Pulse Fuel Masters in five games in their best-of-seven semifinals in the season-opening Philippine Basketball Association tournament, the Beermen, in search of their fifth consecutive All-Filipino crown, are thankful to be back in the finals but underscored they are not about done.

“We’re so grateful we’re back in the finals,” said San Miguel coach Leo Austria, whose team booked a spot in the championship series after a 105-94 victory over Phoenix Pulse in Game Five of their semifinals on April 25.

It is culmination of a tough journey they had in the earlier rounds where they struggled for consistency and played as the lower seeds in the playoff rounds.

It is a path that they hope to take cue from as they play in the finals.

“We give credit to Phoenix for pushing us to the limit. And in the quarterfinals, we’re up against a very strong team in TnT [KaTropa]. Hopefully, we can learn from these two series going to the finals …,” said the coach of the Beermen, who were seeded fifth in the playoffs.

Phoenix Pulse was the number one team while TNT was the fourth seed.

Also having the Beermen upbeat of their chances in this latest finals quest they will be having is how other players are now stepping up for them.

Terrence Romeo, Christian Standhardinger, Von Pessumal and Matt Ganuelas-Rosser played key roles in their road to the finals, providing key support to their solid starting five of June Mar Fajardo, Arwind Santos, Marcio Lassiter, Chris Ross and Alex Cabagnot.

San Miguel sees Mr. Romeo, in particular, as playing a huge role, especially if he is playing with confidence at such a high level like right now.

“Terrence’s confidence should continue to rise in the finals and that’s good for us,” said veteran Santos. “We will be tougher to beat if that’s the case, I’m telling you.”

In the semifinals, Mr. Romeo, an offseason acquisition by the Beermen, averaged 13 points a game.

Mr. Standhardinger has been a steady double-double source for San Miguel while Messrs. Ganuelas-Rosser and Pessumal stepped up in the absence of the hurting Lassiter against Phoenix.

As of this writing, the Beermen are awaiting the winner between the Magnolia Hotshots Pambansang Manok and Rain or Shine Elasto Painters, who were to play in Game Seven of their own semifinal series later yesterday.

Mr. Austria said they have no preference between the two as opponents in the finals as they are expected to make it tough for them nonetheless.

“We have no preference on which team to face. Both of them are competitive teams,” Mr. Austria said. — Michael Angelo S. Murillo

PPL proceeds with season opener; Kaya wins while Air Force, Mendiola draw

By Michael Angelo S. Murillo
Senior Reporter

DESPITE the controversy surrounding its official kickoff, the Philippine Premier League (PPL) went ahead with its season opener on Saturday at the Rizal Memorial Stadium with Kaya FC-Iloilo emerging victorious and Philippine Air Force and Mendiola FC 1991 fighting to a draw.

Reduced to a five-team field after two clubs decided not to participate in the inaugural season of the rebranded league on the eve of the kickoff, the PPL took it and eventually decided to forge ahead with the tournament.

Stallion Laguna FC and Global Makati FC, in an urgent press conference held on Friday, raised some issues, including dissatisfaction over how the league took form in the lead-up (e.g. club licenses and sponsorship) and questioned the capacity of the operators to run the league, which replaced the Philippines Football League, among others.

They then announced that they are not playing in the PPL until all their concerns were satisfactorily answered or a new league, preferably handled by the Philippine Football Federation (PFF), is established.

In their own press conference on opening day, the PPL, through commissioner Bernie Sumayao and tournament director Ritchie Gannaban, reiterated their readiness to handle the league even as they said they have the backing of the PFF and that they hope that those who have issues with the PPL would be willing to sit down with them and talk things over with the end goal of moving ahead united.

The PPL also said it is looking “very closely” at the possibility of adding a sixth club in the league so as not to jeopardize the standing of the league, and Philippine football in general, in relation to participation at Asian Football Confederation tournaments.

OPENING-DAY GAMES
Meanwhile on opening day, Kaya got off its campaign to a solid start with a 3-0 victory over Green Archers United in the televised 7 p.m. game.

Arnel Amita (13’), Joven Bedic (16’) and Yannick Tuazon (79’) accounted for Kaya’s three points in a game that had it dominating from the start.

“The boys really worked hard. The first 20 minutes dictated the whole 90 minutes,” said Iloilo head coach Noel Marcaida after the game.

“The only thing [I’m not happy with] is we weren’t successful in resting some of our players, such as Masanari [Omura] and Darryl Roberts. We needed to introduce Alfred Osei and Marwin Angeles to get control of the midfield, and we weren’t able to take off those players as we had planned,” added the Kaya coach, whose wards will have a short turnaround as they play in the AFC Cup on April 30 against Lao Toyota FC in a key match at the Panaad Park and Football Stadium in Bacolod City.

In the first game at 4 p.m., meanwhile, Air Force and Mendiola fought to a 2-2 draw to open their campaign.

Nimrod Balabat put Mendiola on the board early, scoring in the eighth minute, but Air Force levelled the count in the 39th minute as Rodolf Bebangco connected for his team to force a 1-1 draw heading into the halftime break.

The two teams scrambled to take control in the second half.

Mendiola then went up 13 minutes into the second half after Roberto Corsame Jr. found the bottom of the net.

The Airmen dug deep to claw their way back and were rewarded in the 79th minute with veteran Yanti Barsales on the scoring end.

No goals would be scored after, leaving the count tied as the final horn sounded.

ESPN5 is the official broadcaster of the PPL. Follow the league on Twitter @PhilPremLeague and on Instagram at PhilippinePremierLeague. Search for Philippine Premier League to visit its official Facebook page.

Embiid to play through knee pain

PHILADELPHIA 76ers center Joel Embiid said his left knee, hampered by tendinitis, remains painful but he intends to play more minutes in the second-round playoff series against the Toronto Raptors than he did in the first round.

Embiid played in four of the five games of the series against Brooklyn — he missed Game 3 — and averaged about 24 minutes per game. In the regular season, he averaged 33.7 minutes per game.

“It’s still not there. It’s still trying to get better,” Embiid said about his knee after Saturday’s shoot around, hours before Game 1 of the Eastern Conference semifinals.

“But that’s an issue that’s going to be there at least all playoffs until I actually get some real time to get some rest and work on myself.”

In fact, it’s an issue that forced him to miss a stretch of 14 of 24 games toward the end of the season.

“It’s hard because I’m known for playing through anything and pushing, pushing it,” Embiid said. “And in some situations like Game 3, I couldn’t go because it was too much. But like I said, I just got to keep managing it and see how I feel and then go from there.” — Reuters

James, Lakers top most popular jersey, team merchandise lists

WHILE their 2018-19 NBA campaign was a rough one that saw them missing the playoffs altogether, it was a totally different scenario for LeBron James and the Los Angeles Lakers on the league merchandise front where they were tops.

Citing numbers from NBAStore.com sales since the beginning of the 2018-19 season, the NBA at the weekend announced that James and the Lakers occupied the top spots in the most popular jersey and team merchandise lists, respectively, in end-of-year rankings.

James, who joined the Lakers prior to the start of the current season, dislodged Stephen Curry of the Golden Warriors, who topped the most popular jersey category the previous two seasons. The Lakers, for their part, made significant headway in supplanting the Warriors atop the team merchandise list after finishing sixth in last year’s rankings.

Finishing second to James was Curry with Milwaukee’s Giannis Antetokounmpo coming at third, Boston’s Kyrie Irving at fourth, and Philadelphia’s Joel Embiid at fifth.

Antetokounmpo and Embiid notched their highest ranking ever to date, the NBA noted.

At sixth was Houston’s James Harden, followed by Oklahoma City’s Russell Westbrook, Golden State’s Kevin Durant, Philadelphia’s Ben Simmons and Jimmy Butler.

Rounding out the top 15 were Dwyane Wade of Miami, Paul George of Oklahoma City, Luka Doncic of Dallas, Damian Lillard of Portland, and Jayson Tatum of Boston.

George made his return to the list since being last in it in 2016 while Doncic was the lone rookie to make it to the grouping.

Over at the team merchandise list, finishing second to the Lakers were the Warriors, followed by the Boston Celtics, Philadelphia 76ers and Milwaukee Bucks. The Bucks climbed five rungs after finishing 10th last year.

Completing the top 10 were the Chicago Bulls, Oklahoma City Thunder, Houston Rockets, Toronto Raptors and New York Knicks.

Dropping out of the top 10 from last year’s list were the Cleveland Cavaliers, James’s former team, who were replaced by the Knicks. — Michael Angelo S. Murillo

Return to glory

It took nearly two decades before the San Juan Knights could repeat the feat it once did in the regional basketball scene — and what a way to win it.

Facing tremendous adversities, the Knights battled back from seven points down with less than two minutes left in the game of their do-or-die championship match against host Davao Occidental Tigers before completing a tense 87-86 win to become the MPBL’s first ever national champion.

Prior to conquering Davao, San Juan had to go through several stiff challenges along the way. After losing Game 4, the Knights were having troubles booking a flight to Davao and requesting the league to move the match on Saturday even crossed their minds.

But the team doesn’t want to make any excuses. The Knights rented Governor Chavit Singson’s plane just to get to Davao and they arrived late Wednesday afternoon. They couldn’t even get a practice venue to prepare for the biggest battle of their lives Thursday night and former Senator Jinggoy Estrada, one of the owners of the squad, advised the squad to rest their minds and bodies for the much awaited encounter.

In a championship series, there’s no room for superstition, but San Juan felt there was a Divine Intervention that happened during their do-or-die encounter.

“It rained so hard during the day of the match as if St. John The Baptist had poured water to bless our team,” said team executive Chris Conwi.

When almost everyone is losing hope, some of the faithful supporters of the squad offered prayers and in instant, the Knights wiped out a seven-point deficit and unloaded a telling 10-2 run capped by Jhonard Clarito’s last six points, including the winning basket in the final eight seconds.

“But the game wasn’t over yet. We thought we had already won the game, but Davao was able to advance the ball to the other end. Luckily, they couldn’t come up with a good shot. God really made it happen for us,” said the former senator, who saw his team’s return to glory after winning their first national title in the MBA, a precursor of the MPBL, in 2000.

Estrada had his own biblical cameo role and just like Moses, who shattered the tablet that bears the Ten Commandments, the co-owner of the squad took the seat of head coach Randy Alcantara, grabbed the coaching board and smashed it hard.

Somehow, it has awaken the team and once they got their sense back, the Knights resumed their mission of delivering the entire city of San Juan back to the Promised Land.

It was like a story book ending for the Knights and there were several heroes noted – Clarito, an unheralded forward who worked his way back to the rotation of the team, Mike Ayonayon, who poured in 33 points and was chosen as Finals MVP, and of course, Coach Alcantara, he, too, played a great game.

Battling sickness and stress altogether, Alcantara had been admitted to the hospital midway the series for high blood pressure. He nearly collapsed in one of the games, but his never-say-die spirit kept him going.

Alcantara had gone full circle. He was part of the San Juan Knights champion squad in Year 2000 as a player along with Gherome Ejercito, Estrada, then the Mayor of San Juan, and Jun Usman, former team coordinator who is now delegated as team manager of the current crop of Knights.

The amiable coach also won back-to-back championships. Last season, he was part of the Batangas Athletics champion squad as an assistant coach of Mac Tan.

Truly, the San Juan Knights came home like conquering heroes and were feted by supporters and local folks. It was their way to return to glory.

 

Rey Joble is a member of the PBA Press Corps and Philippine Sportswriters Association.

reyjoble09@gmail.com

Unique Durant

Kevin Durant no longer needs any audition to prove his worth heading into free agency. When he is officially free from his contract with the Warriors in July, he will be fielding offers from the rest of the National Basketball Association. Indeed, he’s that good; outside of — and, arguably, even more than that of — the on-the-decline LeBron James, he has the game that would suit any type of system. He certainly made the two-time defending champions even better with his presence; not for nothing was he named Most Valuable Player in their last two Finals appearances.

All the same, Durant made an outstanding case for himself in Games Five and Six of the Warriors’ surprisingly contentious first round series. With the Clippers refusing to simply roll over and instead using a seemingly unquenchable wellspring of resolve to make what was supposed to be a cakewalk into a competitive best-of-seven affair, they needed him to be at his level best. And he was in closing out their pesky opponents, dropping a cool and effortless 50 markers on just 26 shots. He never veered from their plan, never sought to play hero ball, never thought to be first among equals. But because he was simply himself, he proved to be head and shoulders above his so-called peers all the same.

Considering how the Clippers fought for every possession and in every moment, it’s fair to argue that the Warriors would have encountered more difficulty were Durant not around to serve as a living “Get Out of Jail, Free” card. For all the otherworldly predilections of two-time regular season MVP Steph Curry, the finally sharp end-to-end exertions of Draymond Green, the relentlessness of Klay Thompson, and the still-solid showings of Andre Iguodala, he’s their ace in the hole. He’s their single most potent weapon, the one player in the league who can get off with extreme ease the very shot desired in single coverage.

Certainly, Durant’s uniqueness makes the sensational ordinary. Because things come easily to him, those from the outside looking in tend to devalue the work he puts in to post the numbers he does. When outcomes are on the line, though, the difference he makes is apparent. Even with the Warriors, who already boasted of an unparalleled talent pool before he joined them in 2016, he has become the driver by default. Without him, they could very well have bid goodbye to their hopes for a threepeat. They were shaky from the start of their 2018-19 campaign, and only because of him were they able to find their center prior to the postseason. And, in the first round, the Clippers had every answer for them — except for him.

Under the circumstances, it’s fair to contend that Durant has come, seen, and conquered with the Warriors. He joined them, became one with them, and then headed them. Now, he may want to climb other mountains. Four titles in a row with decided frontrunners? One all-the-way run alongside, and then in front of, James with the Lakers? Or one Larry O’Brien Trophy for the otherwise-dysfunctional Knicks? The NBA will know soon enough. In the meantime, he’s producing masterpieces and getting all and sundry to purse their lips in anticipation.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994.

Earthquake!

But we are already talking about it — what we all can do for the environment. At the Asian Institute of Management (AIM), April 22, the day after Easter Sunday, was a whole-day focus on Mother Nature, in communion with the celebration of World Earth Day.

Fr. Benigno “Ben” Beltran, SVD, lead convenor of the Philippine Sustainability Challenge, asked the Earth Day celebrators, mostly delegate-students of various colleges and universities, teachers, and government environment officers, to be more proactive, and plant trees to clean the air, enrich the soil, and keep the earth together to contain the water that will sustain and nourish agriculture — ultimately for our food supply. Why don’t we start simply? Let us plant bamboo.

Target: one billion bamboo culms by 2030 in the Philippines for one million agricultural and forest lands for earth-friendly enterprises, and one million out of school youth trained in alternative mobile-learning systems for livelihood based on 4th Industrial Revolution ideas! Earl Forlales, Forbes “40 under 40” entrepreneur winner for 2019 presented his do-it-yourself bamboo house for mass housing. Sr. Merceditas Ang (SPUP Programs on the UN SDGs) and President of St. Paul University, who now also heads the UN World Council on Curriculum and Instruction (Phils), stressed the inculcation of environment consciousness and values in our Youth.

Are we not conscious enough of our environment?

At 5:11 P.M., the Fuller Room on the third floor of the AIM started shaking. Earthquake! It was an individual experience, simultaneously felt in group, of one being held by the shoulders and violently shaken sideways, so tight was the angry grip of that invisible force of Nature. It was magnitude 6.1, coming from a depth of 10 kilometers at epicenter 18 kilometers east of Castillejos, Zambales, according to the Philippine Institute of Volcanology and Seismology (phivolcs.dost.gov April 23, 2019). “We are looking at two fault systems, the Iba and East Zambales fault (UNTV News April 23, 2019). Phivolcs also believes that the quake did not trigger a movement of the West Valley Fault as “it is 100 kilometers away” (Ibid.).

But the strong push and pulls were felt to 100 kilometers away, along the broad curve of the 146-kilometer West Valley Fault, which starts from Bulacan in the north and runs through the provinces of Rizal, the Metro Manila cities of Quezon, Marikina, Pasig, Makati, Taguig and Muntinlupa, and the provinces of Cavite and Laguna, ending that in Canlubang in the south. There are 99 private villages and subdivisions inside 80 barangays traversed directly by the fault and endangering 6,331 buildings in a span of 2,964.10 square kilometers (1,144.45 sq mi), where majority are houses with 19 schools included (Malicdem, Ervin: Barangays and Villages Traversed by the Valley Fault System, Aug. 16, 2017).

The Easter Monday earthquake was also felt strongly in parts of Bataan, Tarlac City, Batangas and Cavite. The National Disaster Risk Reduction and Management Council (NDRRMC) reported 16 fatalities in the quake: five people killed in the collapse of a four-story supermarket in Porac, seven in different barangays in Porac, two in Lubao and one in Angeles. Phivolcs explained that aside from being a neighbor of Zambales, Pampanga sits on soft sediment and alluvial soil “made up of or found in the materials that are left by the water of rivers, floods among others, (making it) prone to strong shaking during an earthquake (UNTV News April 23, 2019).

crack earthquake

But we have known from the beginning that the soil in our 7,101 islands is soft, except for the natural rock formations in mountains and hilly areas. In particular, Metro Manila or the National Capital Region of the Philippines (16 cities and 1 municipality = 597.47 km2) “used to be a submerged area at one time in the geologic past. Intermittent volcanic activities followed after which, volcanic materials were deposited. Thus, alternating beds and transported sediments became a characteristic feature of the geologic deposit” (Jonathan R. Dungca et. al: Soil bearing capacity reference for Metro Manila, Philippines. De la Salle University College of Engineering, No. 30. 2016). The surface geology of the western and eastern area is composed mostly of quarterly alluvium, a loose type of soil…not capable of carrying heavy loads…using shallow foundations for high rise buildings and other large structures should be avoided or a deep foundation is recommended (Ibid.)

The same study declared “cities with rock formations beneath the surface, such as Quezon City, North Caloocan, and Muntinlupa, have soils with high(er) bearing capacities that are suited for shallow foundations…Nevertheless, caution must be taken when placing structures in these areas, as the Valley Fault System is nearby, making the area prone to earthquakes” (Ibid.).

If we truly tried to understand and respect our natural environment, how did it happen that there are “more than 3,000 structures built along the West Valley Fault” identified by the Philvolcs itself: 1,630 residential structures; 1,392 mixed residential and commercial structures; 58 commercial structures; 52 industrial structures; 24 cultural structures; seven infrastructure and utilities structures; and six recreational structures are exposed to ground rupture in a major earthquake (msn.com April 25, 2019). Based on a 2004 study by the Japanese International Cooperation Agency (JICA), more than 30,000 people could die while over 100,000 others could get hurt when a possible major earthquake dubbed the “Big One” strikes (Ibid.). Arturo Daag, PHIVOLCS’ Chief Science Research Specialist, said the 15-year old study must be upgraded for population increase and “building intensity” (Ibid.).

And there are those cities and provinces not on the fault, but are nevertheless vulnerable to earthquakes because of the nature and level of its geological stratification (and its soil, how many feet below sea level, etc.) and the unpredictability of violent aftershocks and the fatal empirical experience of tsunamis, fissures and “black holes” experienced around the world in recent decades. Remember that the Philippines lies along the Pacific Ring of Fire, which causes the country to have frequent seismic and volcanic activity. Many earthquakes of smaller magnitude occur very regularly due to the meeting of major tectonic plates in the region. This is particularly frightening in the building boom in Metro Manila. As of Jan. 2018, there are 74 high-rise buildings (at least 150 meters [492 ft] tall) and still more than 40 buildings planned to be completed by the end of 2020 (The Skyscraper Center April 24, 2018).

Makati City, by its 2011 report says: “Makati lies within a tectonically active region in the Philippines known as the Philippine Mobile Belt, and has experienced numerous destructive earthquakes in its recorded history. There are six (6) known tectonic earthquake generators affecting the area, namely (MGB, 2003 and Daligdig and Besana, 1993): (1) the Valley Fault System, (2) the Philippine Fault Zone, (3) the Lubang Fault, (4) the Casiguran Fault, (5) the Philippine Trench, and the (6) Manila Trench. The nearest active fault within the City is the West Valley Fault” How has Makati planned to mitigate its vulnerable position and situation against natural calamities like fearsome earthquakes? Makati admits it has 0.01 open space left, and skyscrapers have stomped down the old low-rise structures more adaptable to Makati’s soft and often-flooded soil. Note that the newly opened project, the Makati subway will run from Ayala Avenue, Ospital ng Makati, Circuit Mall, City Hall and Pembo, circling the country’s financial capital. Surely this must have been evaluated vis-à-vis Makati’s geological vulnerabilities.

At the Earth day conference at the AIM, frightened environmentalists scampered to the doubtful safety of the small open space in front of Greenbelt 1 (formerly a park and aviary less than two decades ago). Mother Nature must really be angry.

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Twilight of the rule of law

In liability law, who causes the injury pays. This is the cornerstone of the rule of law. In the case of the 1.134 billion pesos penalty imposed on Manila Water (BusinessWorld, 25 April 2019), MWSS obligates the concessionaire to pay! But if the MWSS is itself the cause of the injury, we are standing the liability principle on its head.

The water crisis exploded because of the shortage of bulk water in Metro Manila. The Figure 1 below shows the trajectories of water of the La Mesa Dam and Angat Dams for September 2017 to March 2018 and September 2018-March 2019.  Note how steeply the water level dropped in La Mesa Dam in the drought-hit period (red) compared to more normal same period last year (purple). Angat Dam water level held up better (blue and green). Drought had taken its toll on the main water source for Manila Water.

Water Levels of La Mesa and Angat Dams

The customer base of Manila Water which stood at three million in 1996 now stands at seven million and with higher average per capita income. But the sources of bulk water are still the same. Why the water crisis?

It’s MWSS incompetence, stupid! No clearer evidence could be provided than the statements of MWSS Chief Regulator Patrick Ty, the government’s main man on water in Metro Manila: “It’s our fault. It’s the government because the Kaliwa Dam, Laiban Dam have been proposed since Marcos and  due to a lot of opposition and accommodations for IPs, from the informal settlers, from leftist group, church group, these projects kept getting moved on….Are you saying it’s our fault? Yes, it’s our fault because we’ve been delaying all these projects…Manila Water has been raising this issue since I took over in 2017 so all this is our problem and we need to fix it.” (PhilStar quotation, 14 March, 2019).  

Honest Mr. Ty may still get the sack.   What are the obligations of Manila Water in respect to raw water provision?  According to the July 1996 Privatization Strategy Report (not explicitly in the concession agreement but part of the preliminary spadework (Lazaro, 2019)), “The concessionaires…will be responsible for the supply of their respective future bulk requirements,” which seems to suggest that bulk water shortfall is the liability of Manila Water alone. But water distribution service in Metro Manila is a regulated activity―this means that any project proposed by Manila Water to improve water security must be approved by the regulator, MWSS. Without MWSS approval, the concessionaire cannot be reimbursed and the project is “drowned in the water”. A case in point―the Cardona Water Treatment plant – evidence many said of the negligence of Manila Water – would have produced additional bulk water from Laguna de Bay for the East Concession customer. This was proposed by Manila Water in 2008 but construction could not start until 2016 because squatter occupied the designated MWSS property. Informal settler clearing is not Manila Water’s mandate. But even had the Cardona Water Treatment Plant been fully operational at 100 mld in early 2019, the shortage would not have been avoided – the shortfall estimated at 160 mld meant that water rationing would still happen. Water treatment plants and groundwater sourcing are short-term remedies; they cannot substitute for new bulk water sources which task MWSS has claimed for its own and at which it has failed. But even the stop gap measures will fail if MWSS foot-drags. In 2013, MWSS delayed the capex applications by Manila Water for Tayabasan East Water Source which it deemed unnecessary; the Long Term East Source and the Kaliwa Low Intake projects were denied because MWSS would itself finance and build those projects. The regulator turning provider?

THE KALIWA DAM PROJECT
The story of Kaliwa Dam with water yield of around 600 mld and would have completely sidestepped the 2019 water crisis is a cautionary tale. In February 2013, a PPP modality was proposed for the 2012-2016 MWSS road map for water security comprising of the Laiban (high) Dam and the Kaliwa (low) Dam on Kaliwa River, Tanay Rizal. The proposal was for a 53-meter Kaliwa Dam with water yield of 926 mld at the cost of Php15 billion  (Tabios III, 11 April 2019).

water droplet

When the NEDA ICC met in October 2013, it changed the plan proposing instead that MWSS implement the project in stages: the Kaliwa Dam first and the Laiban Dam later The NEDA board approved the revised PPP plan in May 2014. Two bids were pre-qualified when Pres Aquino left office in 2016.

The incoming Duterte administration made noises about preferring the ODA modality to PPP and seemed to have entertained the offer of Japanese private firm to build a 7-meter weir on the Kaliwa River. This was to yield 500 mld at the cost of P20b. The administration took its time and finally in 2019 scrapped the Japanese proposal in favor of a Laiban (high) dam to be financed by Chinese ODA. This was to be 73-meters high with water yield of 600 mld and to cost P12b. Unfortunately, these continuing pivots effectively ensured that no work was done and no bulk water flows to Metro Manila from Kaliwa River.

The kindest, but not the only, interpretation of events is that the government was hankering for an ever more perfect plan and violated a common sense adage: “Don’t let the perfect be the enemy of the good.” The March 2019 water crisis is the harvest of unbridled zeal.

The MWSS decision constitutes a rape of the rule of law even if the concessionaires decided to hold their horses. If left to stand, it establishes a precedent that a guilty party can to reap political pogi points by scapegoating a vulnerable party. The scapegoating of Manila Water certainly deflects the conversation from the threatened firing of the MWSS leadership for incompetence. Would that well-meaning lawyer groups will challenge it. Otherwise, it could be the twilight of the rule of law in the Philippines. And progress will, as the Intro to a Sinatra song goes, “…slowly fold its tent and silently slink away.”

 

Raul V. Fabella is a retired professor of the UP School of Economics, a member of the National Academy of Science and Technology and now an Honorary Professor at Asian Institute of Management. Weaving ideas in coffee shops is an integral part of his day.  He gets his dopamine fix from hitting tennis balls with wife Teena and bicycling.

Good news, MORE power plants coming

“Whatever that can go wrong will go wrong.”

— Murphy’s law.

After several power plants that experienced unplanned or forced shutdown went back online, a strong earthquake hit Central Luzon on April 22 and four power plants with combined dependable capacity of 932 MW were isolated, with the Luzon grid going back to yellow and red alerts last week.

A huge problem in the Philippines power sector is that many big power plants are old, above 20 years old, and require frequent or prolonged maintenance shutdowns or experience frequent unscheduled shutdowns (see table 1).

Old power plants with planned, unplanned outage, and derated capacities, March-April 2019

There were also four new plants (below 5 years old) that suffered unplanned outage: Pagbilao U3 by Team (420 MW), Limay U2 by San Miguel (150 MW), SLGPC U2 by DMCI (150 MW), and SLTEC U1 by Ayala (135 MW). And two new plants that experienced derating: Pagbilao U3 by Team (420 to 315 MW) and SLGPC U2 by DMCI (150 to 100 MW).

Now the good news: Six big coal power plants and one gas plant are expected to start commercial operation this year and next year (see table 2).

New big power plants coming

The Senate Committee on Energy held a public hearing about the Luzon grid last Friday, April 26. IEMOP presentation showed that electricity spot prices at WESM have been declining: P5,176/MWH in 2014 to P3,830 in 2015, P2,947 in 2016, P3,349 in 2017, P3,618 in 2018. That’s another good news.

And so private distribution utilities (DUs) and electric cooperatives would purchase their peak hours electricity demand from WESM and not from peaking power plants. There is also price control a.k.a. primary and secondary price caps at WESM.

One result is that no one would invest in peaking power plants. And when those unscheduled outages by old plants come, plus earthquake shaking big plants, WESM cannot produce extra power, nada.

The market-oriented reforms for efficiency (MORE) needed are to (1) encourage investment in new peaking plants aside from more baseload and mid-merit plants, and (2) revise upwards if not abolish price control and price cap at WESM. Let a peaking plant that has zero revenue for 10-11 months straight, yet has fixed operating costs, makes money on a few days in April-May, hot months with high prices. People will be willing to pay high prices for a few days in exchange for zero yellow-red alerts and they can do business regularly without fear of blackouts. This reform will also make the DUs rethink their contracting strategies to possibly include peaking power, for a more stable and reliable power supply.

Blackouts are messy, ugly and costly. The costs are several times higher than increased prices at WESM for few days and hours.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com

Trade deficits and industry competitiveness

Widening trade deficits are usually seen as a policy problem, and understanding the pattern and sources of the deficit is important to help us formulate the correct policy advice. From a macro perspective, deficits are explained partly by economic growth and changes in relative prices measured by real effective exchange rates. Microeconomic factors also play a role, particularly the declining competitiveness of our industries and failure to upgrade and move up the global value chain.

From the 1980s till the 1990s, we embarked on a unilateral trade liberalization policy that reduced tariffs and removed quantitative import restrictions. Towards the mid-1990s, we committed to reduce tariffs through the ASEAN trade schemes. From an import substitution strategy, the thinking then was by removing trade distortions and allowing markets to work through more competition from imports, domestic industries would become more competitive. This was expected to lead to the growth of industries and the shift towards an export-oriented strategy.

However, the structural transformation promised by opening up the economy has remained elusive. As our experience in the last 40 years has shown, the more open the economy is, the higher the trade deficits. The country’s deficits are high even in relation to those countries we signed free trade agreements (FTAs) with.

Two simple measures are often used in analyzing trade deficits: trade deficit/GDP ratio, which measures trade imbalance, and trade/GDP ratio, which measures trade integration. The trade deficit is the difference between exports and imports, while trade is the sum of exports and imports.

Figure 1 shows that in a span of four decades, perennial trade deficits were experienced except in 1999 and 2000. Our trade to GDP ratio rose from 43% in 1980 to 93% in 2004, but started to fall thereafter with some improvement in the more recent years. A positive correlation between the deficit to GDP ratio and the trade to GDP ratio is evident, which implies that as trade integration rises (falls), deficits also increase (decline). For instance, the deficit to GDP ratio increased substantially from -4 percent in 2015 to -14.7% in 2018. Trade openness was also rising from 43.8% in 2015 to 54.7% in 2018.

Figure 1: Trade indicators in %

Table 1 presents our average trade deficit ratios by trading partner. We have trade deficits with FTA partners like ASEAN, Korea, China, and Japan and surpluses with countries such as the US and from the European Union where FTAs have not yet been concluded although both provide tariff preferences to our exports. Our average deficit with ASEAN increased from -0.86% during the 1980s to -6.8% during 2010-2018. In 2018, our deficits reached -US$17.8B.

Trade Deficit/GDP Ratios (in %)

Deficits were present in a wide range of products; the largest were in transport equipment and petroleum. Trade surpluses were few with the most significant found only in special transactions and electrical machinery.

Within ASEAN, Indonesia has been the largest source of deficits amounting to US$5.9B in 2018. Our deficit/GDP ratios with China deteriorated from a small surplus in 2000-2009 to a deficit in 2010-2018. With South Korea, the country’s deficits remained, although a decline in the ratios is observed.

In the case of Japan, trade deficits were sustained from the 1980s till the early 2000s, although these were closed in the recent period. Recently, deficits are again starting to surface from -US$928M in 2017 to -US$1.94B in 2018.

The Philippines has always been in a trade surplus position with the US, although this has been declining substantially from 1.9% of GDP in the 1990s to 0.42% in 2010-2018.

In the last four decades, clothing has been the biggest source of surplus with the US registering an average share of 1.46% of GDP in the 1990s to 1.71% in the early 2000s, but this declined substantially to only 0.35% in the current period. The same declining trend is observed for the other products where we have a surplus with the US.

With the EU, the Philippines has been running trade surpluses from an average of 0.41% of GDP in the 1980s to 3.14% in the early 2000s, but which was not sustained as the average dropped dramatically to only 0.35% in the current period.

Most of the products where we have huge deficits consist of intermediate goods like petroleum, iron and steel, chemicals, and plastic as well as final products such as transport equipment, paper, coffee, dairy, meat, and cereals and cereal preparations. In the same period, trade surpluses were observed mostly in electrical machinery and apparatus, wood and cork manufactures, clothing, fruits and vegetables, fixed vegetable oils and fats, and metalliferous ores.

Philippine manufacturing has been largely dominated by food processing followed by electronics. While manufacturing growth has been quite remarkable from 2010 to 2018 averaging at 7.3%, its average contribution to GDP has remained stagnant at 22.8%. The reasons are:

First, the main orientation has been largely on the domestic market. This is shown by the declining trade/GDP ratio from 2004 to 2015, indicating a less open and more inward-oriented economy as resources went to non-tradable sectors like construction and real estate.

Second, manufacturing has been largely characterized by broken supply and value chains with many of the necessary materials, supplies and intermediate parts missing in the domestic market. With a highly fragmented domestic production system, manufacturers have to depend on imports.

Third, the peso appreciation has made imports much cheaper, thus weakening industry competitiveness.

Fourth, the absence of a strategic industry development program in the past has made it difficult to attract complex and high value exports.

Export expansion requires upgrading our global value chain (GVC) activities. Our current participation in the electronics GVC is mostly limited in the back-end, low value stages of assembly, process, and test. This makes us vulnerable to any shock that raises the cost of manufacturing leading to the transfer of operations to relatively low-cost countries.

In the auto GVC, our role is limited to manual transmission assembly, with parts imported from Japan and exported to regional auto hubs, Thailand and Indonesia. We import the completely-knocked-down packs for Vios from Thailand and Innova and Avanza from Indonesia.

To increase our exports, we need to upgrade our GVC position by diversifying into strategic parts and components manufacturing. We have to produce these at costs much lower than Thailand or Indonesia and attain scale economies in auto production to be assigned as a regional export hub. The Comprehensive Auto Resurgence Strategy Program aims to jump-start the development of the auto industry. Vehicle demand is expected to reach one million by 2027. Without domestic manufacturing, this would be served by imports from Thailand and Indonesia.

An industrial policy is crucial to upgrade our GVC participation, address missing markets and establish a more integrated production system that will reduce our overdependence on imports. Without increasing our exports, the current pattern of rising deficits as we increase our integration with other economies will persist. A carefully crafted industry support scheme that is time-bound, targeted, transparent, and performance-based is necessary given the need to attract investments that will bring in new technologies such as artificial intelligence, robotics, Internet of Things, 3D printing, etc. and will incentivize firms to upgrade and move up the value chain, reskill and upskill their workforce, invest more in R&D, and promote start-up development.

 

Rafaelita M. Aldaba is a Senior Fellow at Action for Economic Reforms and is Undersecretary for Competitiveness and Innovation, Department of Trade and Industry.

Japanese debt watcher raises PHL outlook to ‘positive’

THE Philippines is closer to securing a single-A credit rating from Japanese Credit Rating (JCR) Agency, after the debt watcher raised its outlook on the country to BBB+ positive from BBB+ stable.

In a statement, the government’s Investor Relations Office (IRO) said JCR upgraded the outlook on the Philippines because of the “government’s twin efforts to accelerate infrastructure development and boost revenues through tax reform.”

“JCR’s BBB+ rating with positive outlook is just one notch away from a single-A credit rating… A single A credit rating will place the Philippines on the radar screen of even more portfolio investors, given that some institutional investors have a policy of investing only in bonds issued by A-rated sovereigns or corporate entities,” the IRO said.

The JCR report was quoted as saying “infrastructure development has accelerated under the Duterte administration amid expanding expenditures based on its Public Investment Program and improved budget execution rate brought by budget reforms.”

Under the “Build Build Build” program, the administration has committed to to spend up to P8 trillion on priority infrastructure projects up to 2022, when President Rodrigo R. Duterte ends his six-year term.

The Japanese debt watcher also cited the government’s tax reform efforts. “As part of its efforts to secure the necessary financial resources for such expanding expenditures, the government has been vigorously pursuing its comprehensive tax reform program (CTRP),” it said.

Mr. Duterte has so far signed two tax reforms into law, the Tax Reform for Acceleration and Inclusion (TRAIN) Act and Tax Amnesty Act. Other key tax measures, including the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill, are still pending in Congress.

Finance Secretary Carlos Dominguez III said the JCR’s positive outlook is a “recognition of the Duterte administration’s aggressive yet prudent economic policy of spending big on infrastructure modernization while maintaining fiscal discipline.”

“The Philippines’ robust economy is sustainable over the long haul, in part, because of the BSP’s commitment to maintain price stability and the soundness of the banking and financial system,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

“The BSP will continue to provide an enabling environment for sustainable, robust, and more inclusive economic growth by staying committed to its price and financial stability mandates,” Mr. Diokno added.

JCR also noted that the robust banking system is providing support to sustainability of the country’s economic growth. It cited the banking system’s low exposure to bad debts, with the non-performing loan (NPL) ratio at 1.8%, and sufficient capitalization, with the capital adequacy ratio at 15%, in 2018.

The Philippines currently has investment-grade credit ratings from Moody’s Investors Service, Fitch Ratings and S&P Global Ratings. — RJNI