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Kiehl’s focuses on student market in new Manila branch

AMERICAN BEAUTY brand Kiehl’s has opened its newest store at Robinsons Manila bringing the total store portfolio to 16.

The 50-sqm store located at the ground floor of the mall is targeted to serve customers in the Ermita district of Manila and its environs.

“Kiehl’s has been looking to expand its doors to a wider customer base. We initially thought to expand outside of Metro Manila but we found there was still opportunity [to expand] in Manila,” Joan Hwang, Senior Product Manager for Kiehl’s Philippines, was quoted as saying in a release.

Kaila Nicdao, Business Unit Director for L’Oreal Luxe, told BusinessWorld during the launch on Nov. 29 that they see their market as being residents of Manila and students attending nearby schools like De La Salle University and University of the Philippines-Manila.

“In the past few weeks since we opened, our staff noticed that compared to other branches, we get more people coming in to do our complimentary skin consultations,” Ms. Nicdao said, noting that many potential customers want to try out their products.

She said that in this store, they chose to promote smaller-sized products because Ms. Nicdao acknowledged that students may not be able to readily buy a full-sized item from Kiehl’s.

“But really, you only need to use a small amount of product regularly to see it work,” she said, adding that their products can last for a considerable amount of time, and thus are a worthy skin care investment.

Next year, Ms. Nicdao said they plan on opening another branch outside Metro Manila and focusing on their new online store. — Zsarlene B. Chua

Stocks to move lower on continued uncertainty

By Denise A. Valdez
Reporter

PHILIPPINE STOCKS are seen to trade lower at the close of the decade as uncertainty continues to loom until after the holidays.

The 30-member Philippine Stock Exchange index (PSEi) closed at 7,773.12 on Friday — up 119.18 points or 1.55% from the day prior. However, on a weekly basis, it shed 104 points or 1.33% due to declines in the industrials, financials and property sectors.

Value turnover last week stood at P10 billion in average, rising 56% from the week prior. Offshore investors became sellers with a foreign net selling of P1.18 billion from a net buying of P76 million in the previous week.

“Local equities took a beating throughout the week, after a plethora of headlines that clipped bulls’ momentum. Towards the end of the week, however, players shopped for bruised shares, ahead of the shortened trading week,” online brokerage 2TradeAsia.com said in a market note.

Heading into this three-day trading week to close 2019, the brokerage said chances are not so high for the local bourse to show an upturn.

“If this past week is of any indication, a widely-quoted line from a poem may offer a succinct answer: ‘Not with a bang, but with a whimper’,” 2TradeAsia.com said in the market note e-mailed Friday.

“Left to a shortened three-day trading week, improved volumes from funds’ window dressing will be balanced against those who will opt to wait out the Yule break,” it added.

2TradeAsia.com noted much of the heavy catalysts of the stock market are happening in 2020, hence some investors may choose to stay on the sidelines during this week’s trading.

In the international scene, it said US markets will continue being on the lookout for the impeachment case of President Donald Trump, which will be heard in a Senate trial in January.

In the Philippines, investors will be waiting for the resumption of session in Congress on Jan. 20, which will decide on key issues such as the raising of bank deposit insurance to P1 million per depositor and the franchise renewal of ABS-CBN Corp.

Other local issues that will be watched are the final implementing rules and regulations on real estate investment trusts and the water concession agreements of Manila Water Co., Inc. and Maynilad Water Services, Inc. These developments are likewise expected to unfold next year.

“As we ruminate on the growth story of the upcoming 2020s, a review of the 2010s reveals to us that stocks with sound revenue-generating models and consistent capital expansion programs, likely — and often — stand the test of time. Buy the dip,” 2TradeAsia.com said.

It put immediate support for the PSEi this week at 7,500-7,550 and resistance at 7,700.

Have a grand and awesome Christmas with GAC Motor

2019 HAS BEEN an awesome year; let’s make it even more exciting with GAC Motor’s Grand and Awesome Christmas Promo! GAC Motor offers unmatched features, modern style, and reliable quality all for an affordable price.

A brand new year deserves a brand new car. After all, you deserve it for all the hard work you put in this year. So, what are you waiting for? Treat yourself to a premium car this holiday season.

Customers can avail of the best deals with low down payment and cash discounts until Dec. 31. Choose from GAC Motor’s full lineup of vehicles: the classy GA4 sedan, versatile GM8 minivan, powerful GS8 SUV, dependable GS4 subcompact SUV, and the newest addition to GAC Motor’s lineup, the sporty GS3 subcompact crossover.

Get the all-new GS3 for as low as P28K, GA4 for as low as P8K, GS4 for as low as P38K, GS8 for as low as P58K, and GM8 for as low as P98K.

Apart from these generous promos, customers can also rely on the after-sales services and assistance. GAC Motor’s all-in promo includes 5-year or 100,000-km warranty (whichever comes first), 1-year free PMS for GA4, GS4, GS8, and GM8, and 5-year free PMS for the newly launched GS3. The Grand and Awesome Christmas Promo also comes with 3-year LTO registration and TPL, 1-year comprehensive insurance, and free chattel mortgage.

Avail of the latest promo at GAC Motor Metrowalk, 1800 Ortigas Avenue, Brgy. Ugong, Pasig City and GAC Motor Las Piñas Alabang-Zapote Road, Pamplona, Las Piñas City.

Stay updated and follow GAC Motor’s social media accounts: gacmotorph (Facebook) and @gacmotorph (Twitter and Instagram). For more details and inquiries, contact (02) 8244-5012 or (02) 8241-7387.

Bills on rural financing, credit quota for farmers among panel’s priorities

QUIRINO REPRESENTATIVE Junie E. Cua, who is also the chairman of the House Committee on Banks and Financial Intermediaries, said last week that the panel is targeting the swift passage of House Bill (HB) 5618 or the Rural Agricultural and Fisheries Financing Enhancement System Act next year.

“Next year, we want to have this (House Bill 5618) passed. And we want not only for it to pass here but also to pass in the Senate. And eventually be signed by the President,” Mr. Cua told BusinessWorld on Dec. 18.

Under HB 5618, all banking institutions, whether government-owned or private, must set aside a credit quota or a “minimum mandatory agricultural and fisheries financing requirement of at least twenty-five percent of their total loanable funds,” except newly established banks which have only commenced operations in five years or less.

Compared to the Republic Act 10000 or the Agri-Agra Reform Credit Act, HB 5618 underscores the need to organize and train farmers in cooperatives with professional managers who can access credit financing from banks.

According to the bill, the cooperatives will be able to provide “ready, low-interest, and flexible financing” for the needs of the farmers.

Complementing HB 5618 are the other priority bills of the committee which seek the mandatory allocation of financial loans to agriculture. These include HB 183 and HB 3437 authored by Deputy Speakers Michael Odylon L. Romero and Maria Rosa Vilma T. Santos-Recto, respectively.

HB 183 seeks to mandate the Land Bank of the Philippines (LANDBANK) to “focus on its Charter to allocate sixty percent (60%) of its total loan portfolio in solely providing support and financing services for farmers and fisherfolk.”

“The bill seeks to promote inclusive growth and improve the quality of life in the countryside. It will foster continuity and expansion of responsive financial and support services to all farmers and fisherfolk,” Deputy Speaker Michael L. Romero said in a press release.

Meanwhile, Ms. Santos-Recto filed HB 3437 to amend the LANDBANK charter by directing it to “focus on the provision of affordable credit to the agriculture sector where most poor Filipinos belong.”

“This bill seeks to restore the original intent for the creation of the Land Bank of the Philippines which is to assist farmers and other agricultural workers and to contribute to the fruition of agricultural development projects” Ms. Santos-Recto said. — G.L. Espedido

Trump EPA finalizes 2020 biofuel rule, corn industry objects

NEW YORK — The Trump administration finalized US biofuel blending requirements for 2020 on Thursday, leaving a key part of the rule unchanged from an earlier proposal that the corn lobby had criticized as inadequate to help struggling farmers.

The move is destined to anger biofuel industry officials and corn-state senators who had pushed hard for changes until the 11th hour, potentially threatening President Donald Trump’s support among farmers ahead of next year’s election.

Under the US Renewable Fuel Standard (RFS), the Environmental Protection Agency is charged with setting biofuel blending requirements for the refining industry to help farmers by boosting demand for corn- and soybean-based fuels, while reducing US dependence on oil.

The finalized rule increases the volume for blending requirements to 20.09 billion gallons in 2020, up from 19.92 billion gallons in 2019. The mandate included 15 billion gallons of conventional biofuels like ethanol, unchanged from 2019.

The point of contention involves a plan the EPA introduced in the rule to compensate the biofuel industry for the agency’s expanded use of exemptions from requirements given to oil refiners.

The Trump administration’s EPA has roughly quadrupled the number of the so-called Small Refinery Exemptions, or SREs, to help refiners in financial distress, which corn farmers and biofuel producers say has undercut demand for ethanol.

First unveiled by the EPA in October, the plan raises the biofuel volumes that some refineries must blend in 2020 based on US Energy Department recommendations for volumes that should be exempted. The rule finalizes the methodology based on the 2016–2018 annual average of DOE recommendations.

The biofuel industry wanted the adjustments to be based on actual volumes waived, since the EPA routinely waives higher volumes than the DOE recommends.

The EPA said the methodology would work, provided DOE recommendations are followed in the future. The EPA said it is committed to following the DOE recommendations.

“We plan on demonstrating our commitment to that as soon as the 2019 SREs, which we anticipate granting relatively early on once they’re all received in 2020,” a senior EPA official said on a call with reporters.

Biofuel advocates, including Iowa Senators Chuck Grassley and Joni Ernst, claim the finalized plan does not reflect an unofficial agreement they reached with the administration this fall.

“EPA had an opportunity to restore the broken trust of farmers and to follow through on the president’s commitment, but it appears they’ve missed the mark… again,” Ernst said after the rule was announced on Thursday. “It’s no wonder trust has been lost.”

The oil industry says the waivers are needed to preserve blue-collar refining jobs and disagrees with the claim that the waivers reduce demand.

Some in the refining industry also were unhappy with the rule. Executives from companies including Ergon, Sinclair Oil Corp. and Calumet Specialty Products Partners sent a letter to Trump this week, saying the EPA’s rule will do “irreparable harm” to small refineries.

“Curtailing small refinery hardship will not increase demand for biofuels. Demand for biofuels will only increase through meaningful actions,” the group said.

Trump and top White House officials directly intervened in discussions about the biofuel requirements this fall in an attempt to appease farmers, whose support Trump is counting on in next year’s presidential election.

“Apparently President Trump doesn’t care about his promise to Iowa’s farmers,” said Iowa Corn Growers Association President Jim Greif. “ICGA will not stop fighting for market access for corn in all forms.”

Renewable fuel credits were little changed following the news. D6 credits for 2019 traded at 12.50 cents each on Thursday. — Reuters

Metro Manila Film Festival 2019

THE 45th Metro Manila Film Festival runs from Dec. 25 to Jan. 7, 2020 in cinemas nationwide.

3Pol Trobol Huli Ka Balbon!

A COP works to prove his innocence after being framed for the murder of his boss. Directed by Coco Martin, the comedy stars Coco Martin, Jennylyn Mercado, and AiAi delas Alas.

MTRCB Rating: PG

Mission Unstapabol: The Don Identity

TO CLEAR his name after accusations that he was involved in a heinous crime, Don Robert Fortun forms a group to retrieve a giant pearl called “Pearl of the Orient” from his brother who is guarding it. Directed by Michael Tuviera, the comedy stars Vic Sotto, Maine Mendoza, Jake Cuenca, Jose Manalo, Wally Bayola, and Pokwang.

MTRCB Rating: PG

The Mall, the Merrier

SISTERS Moira and Morrissette feud over a mall they inherited. Then mysterious and crazy events occur upon the arrival of Aunt Moody. Directed by Barry Gonzalez, the comedy stars Vice Ganda, Anne Curtis, and Dimples Romana.

MTRCB Rating: PG

Culion

THE FILM follows three women with leprosy (Hansen’s disease) who struggle to find a cure for it. The story is set in the 1940s in Culion island in northern Palawan which was once the world’s largest leprosy colony. Directed by Alvin Yapan, this drama stars Iza Calzado, Merryl Soriano, and Jasmine Curtis-Smith.

MTRCB Rating: PG

Miracle in Cell No. 7

A REMAKE of the 2013 Korean film, the movie follows a mentally deranged father who is accused of murdering a young girl. Directed by Nuel C. Naval, this drama stars Aga Muhlach, Bella Padilla, Joel Torre, Jojit Lorenzo, Soliman Cruz, Mon Confiado, and JC Santos.

MTRCB Rating: G

Sunod

TO PAY for her sick daughter’s medical expenses, Olivia decides to work at a call center in an old building in Manila. There she finds herself haunted by a girl named Nerissa who has a history with the building. Directed by Carlo Ledesma, the movie stars Mylene Dizon, Carmina Villaroel, and JC Santos.

MTRCB Rating: R-13

Mindanao

A MUSLIM woman named Saima cares for her cancer-stricken daughter Aisa in a temporary home for children. While there, Saima awaits her husband Malang, a combat medic deployed in southern Philippines. Directed by Brillante Mendoza, the drama stars Judy Ann Santos, Allen Dizon, and Yuna Tangog.

MTRCB Rating: PG

Write About Love

A YOUNG female writer teams up with a seasoned male writer to finish a love story, and the film is a story (the film they are working on, starring Joem Bascon and Yeng Constantino) within a film. Directed by Crisanto B. Aquino, it also stars Rocco Nacino and Miles Ocampo.

MTRCB Rating: G

Packwell subsidiary’s Davao plant to partly replace China operations

By Carmelito Q. Francisco
Correspondent

PANABO CITY — NP Changs, Inc., the Philippine subsidiary of Japan-based Packwell, Inc., will start moving some of its China operations to Panabo City, Davao del Norte next year with the expected completion of its manufacturing plant at the Anflo Industrial Estate (AIE).

“The cost (of running a plant in China) is getting higher and higher,” Anqi Chang, NP Changs sales director, said at the sidelines of the project groundbreaking ceremony last week.

She added that there is a possibility in the future that the entire China operations will be transferred in Panabo, where the company is investing P1.3 billion.

Japan-based Packwell makes packaging products, mainly for luxury items such as Godiva gourmet chocolates, with an output of about 20 million various boxes annually, according to Ms. Chang.

The local subsidiary is setting up a plant on a 1.6-hectare lot within the 63-hectare AIE owned by Anflo Industrial Estate Corp. and managed by Damosa Land, Inc. (DLI).

DLI First Vice-President Ricardo F. Lagdameo said with NP Changs and 13 other locators, AIE is slowly helping boost Davao Region’s manufacturing sector.

“This is a welcome development because other investors have slowly considered the (industrial) zone as the probable area for their investments,” Mr. Lagdameo told BusinessWorld.

About 200 workers are expected to be hired at the packaging plant, some of whom will be sent to China for training and become local trainers.

Ms. Chang said they already have about 40 Filipino workers in their China plant, who will be given the option to stay or move to the Davao operations.

“(Filipino workers) are very smart, they are fast learners in terms of acquiring new skills,” she said, noting that this was a factor for considering the Philippines as a site for a new plant.

Ms. Chang said they are also looking at expanding their customer base to include Philippine companies that have a growing demand for higher quality packaging, especially for export goods.

“We hope we will have new customers in the Philippines because for now, we don’t have customers in the Philippines,” she said, citing the local chocolate industry as an example.

“I think the chocolate (industry) in the Philippines is getting bigger and bigger and becoming more famous all over the world and it might need better packaging.”

Officials of NP Changs, Inc., a subsidiary of Japan-based Packwell, Inc., together with representatives of Anflo Industrial Estate Corp. and the Panabo City government, take part in the ceremonial groundbreaking of the company’s manufacturing plant on Dec. 19. — BW/CQFRANCISCO

How PSEi member stocks performed — December 20, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, December 20, 2019.

 

Eligibility for perks latest wrinkle in water suppliers’ contract saga

THE water companies supplying Metro Manila will need to firm up their concession contract extensions before they are eligible for investment incentives, Trade Secretary and Board of Investments chairman Ramon M. Lopez said.

The two concession holders, Manila Water Co., Inc. and Maynilad Water Services, Inc., are currently involved in a contentious contract review process amid government claims that their privatization deals contain “onerous” provisions. The two firms also obtained extensions to their original concession agreements, which were due to expire in 2022, but the extensions are now subject to renegotiation also to remove onerous provisions.

Mr. Lopez told reporters at a media event Friday: “Of course ngayon, may consciousness na, may awareness na may issue ‘yung contract — I’m sure i–re-require ng government in general kailangan nasasaayos ‘yung contract. (Now that there is an awareness of the issues with the contracts, I’m sure government will require them to modify the contract),” he said.

He said the two water firms may be considered for incentives under the assumption that their contracts have been revised.

“We won’t give incentives the way it is right now.”

The President said earlier this month that the water providers enjoy “onerous” provisions in their deals, such as an undertaking that the government not interfere in the rate-setting process, and the ability to pass on the cost of income taxes to consumers.

The water industry’s regulator, the Metropolitan Waterworks and Sewerage System, said Friday said that it gave the two water companies a chance to renegotiate their contracts, and initiated discussion with the firms to remove the criticized provisions.

The Board of Investments had granted additional and extended income tax holidays (ITH) to Maynilad and Manila Water for new investment projects.

Mr. Lopez said it is not the BoI’s function to examine the companies’ contracts while assessing their eligibility for incentives granted in the past.

“Hindi kami involved sa contract. ‘Yung project ang tinitingnan namin. (We’re not involved in the contract. We look at the project),” he said.

Mr. Lopez added that the concerns surrounding the water companies are not likely to impact investor confidence, noting that not all government contracts have provisions similar to those flagged in the water companies’ contracts. — Jenina P. Ibañez

Unemployment, underemployment decline in 2019

THE unemployment rate declined to 5.1% in 2019 from 5.3% a year earlier, while underemployment — an indicator of job quality — also fell to their lowest levels in 14 years, the Philippine Statistics Authority (PSA) said.

The PSA, citing the preliminary results of its 2019 Annual Labor and Employment Estimates — which is based on the average of the four rounds of PSA’s Labor Force Survey (LFS) — defines underemployment as the proportion of those working but looking for more work or longer working hours.

Both the unemployment and underemployment rates in 2019 were the lowest recorded since 2005, the year the government adopted new definitions for the LFS.

In 2019, the size of the labor force was estimated at 44.7 million out of 72.9 million Filipinos at least 15 years old. This is equivalent to a higher labor force participation rate of 61.3% in 2019, compared to 60.9% in 2018.

The employment rate, which is the proportion of the employed to the total labor force, also improved to 94.9% in 2019 from 94.7% last year. This translates to around 42.4 million employed, from 41.2 million previously.

This suggests that around 1.3 million jobs were generated this year, exceeding the government’s annual target of 900,000-1.1 million.

Meanwhile, the 5.1% unemployment rate this year is near the upper end of the 4.3%-5.3% target set in the Philippine Development Plan 2017-2022 for this year.

The services sector accounted for the biggest proportion of the employed population with a 58% share in 2019, up from 56.6% a year earlier. Industry accounted for 19.1%, little changed. The share of those employed in the agriculture sector fell to 22.9% from 24.3%.

Wage and salary workers accounted for 64.2% of the work force in 2019 from 63.8% in 2018. Self-employed individuals without any paid employees consisted of 27.1% (from 26.9%), unpaid family workers 5.8% (from 5.6%), and employers in their own family-operated farm or business 2.9% (from 3.6%).

Meanwhile, working hours averaged 42.1 per week in 2019, unchanged from a year earlier.

Full-time workers — those who worked for at least 40 hours in a week — increased to 68.8% from 68.4%. Part-time workers accounted for 30.3% of employed persons from 30.8%.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed these improvements to the economy’s “growth momentum.”

“Robust economic growth has continued to (have an impact on) the economy’s labor market challenges,” Mr. Asuncion said in a mobile message.

“However, there is so much to be done. This year, the clear challenge was execution on the part of the government. But even though the 2019 budget was delayed, economic growth was still respectable compared to regional economies,” he added.

Gross domestic product (GDP) growth averaged 5.8% as of the third quarter. The economy grew 6.2% in the third quarter, the highest level so far this year following the weaker-than-expected 5.6% and 5.5% growth rates in the first two quarters due mostly to the spillover effects of the budget delay that stymied government spending.

Fourth-quarter and full-year growth data will be reported by the PSA next month.

“With 2020, both unemployment and underemployment are expected to further decline. If execution becomes better in 2020, labor market improvement is definitely expected,” Mr. Asuncion said. — Marissa Mae M. Ramos

Rating upgrade targeted before ODA dries up

ECONOMIC MANAGERS are counting on a credit rating upgrade in the medium term to offset lost access to low-cost loans as the Philippines moves up the ranks of middle-income nations.

Finance Secretary Carlos G. Dominguez III said in a news conference Friday that the road map to an A-level sovereign credit rating is currently being drafted by an interagency body, consisting of the Department of Finance (DoF), the Bangko Sentral ng Pilipinas (BSP), the Bureau of the Treasury (BTr) and the National Economic and Development Authority (NEDA).

The Philippines is expected to become an upper middle-income country next year, which will limit its access to loans which charge lower-than-market rates.

“We mean to address the need for us to improve our credit rating because we’re going to lose our special interest rates since we will be graduating to upper-middle income status so we have to make sure that the differentials in the interest rates will be lessened by the credit upgrade,” Mr. Dominguez told reporters.

Socioeconomic Planning Secretary Ernesto M. Pernia said the faster approval of infrastructure projects will give the country more time to secure concessional loans before it graduates to upper middle-income status.

“Given that we’re going to be an upper middle-income country next year, we really have to fast-track the approval of the projects, especially in terms of funding so we can avail of concessional rates, I think we have only up to 2022-2023 to do that, so that’s one motivation in terms of rushing, getting more ICC (Investment Coordination Comittee) meetings to get projects going,” Mr. Pernia said.

In the latest NEDA ICC Cabinet Committee meeting Friday, 12 big-ticket projects with a total cost of P626.11 billion were approved.

NEDA Undersecretary Rosemarie G. Edillon said last week that the country is hoping to obtain an A-level credit rating by 2022 with the help of the road map the interagency committee is drafting.

Mr. Dominguez said passing the remaining packages under the tax reform program will help in the credit rating upgrade as it will increase the tax revenue as a percentage of gross domestic product (GDP).

So far, the government has passed Republic Act (RA) No. 10963, which reduced personal income tax rates and increased or added levies on several goods and services; RA 11213; the Tax Amnesty Act of 2019, which granted an estate tax amnesty and an amnesty on delinquent accounts; and RA 11346, which will gradually increase the excise tax rate on tobacco products to P60 per pack by 2023 from P35 currently.

Last week, Congress ratified the tax measure that will raise the excise tax on alcohol products, electronic cigarettes and vapor products, which will go up for President Rodrigo R. Duterte’s signature.

Mr. Dominguez said the government needs to ensure that it maintains a healthy debt burden in relation to its growing economy; hence, the debt ratio to GDP is capped at 42%.

The road map for the credit rating upgrade was first announced in May, days after credit rater S&P Global Ratings raised the country’s long-term sovereign credit rating to “BBB+” from “BBB,” one notch away from an “A”-level rating.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said an A-level credit rating promotes a favorable business environment as it allows wider access to financing both for the government and the private sector.

“An A-credit rating for the country would be the first ever of its kind. The country’s bonds would be more attractive in international markets, allowing government to access more financing for economic development. This rating upgrade would also allow the country’s top firms get more access to financing, giving them opportunities to expand business. A higher credit rating almost always means positive for any firm or sovereign country,” Mr. Asuncion said in a phone message Sunday. — Beatrice M. Laforga

LNG storage backers tout Lucio Tan, JG Summit companies as gas users

A CONSORTIUM of potential users of liquefied natural gas (LNG) fronted by Lucio C. Tan’s conglomerate is asking the Department of Energy (DoE) to issue a notice to proceed with their proposed floating LNG storage facility.

“Meron na. Naga-apply sila… nasa level ko na (There is an application. They have applied, it has reached me for approval),” Energy Undersecretary Donato D. Marcos told reporters last week when asked whether other entities had applied to build a facility to receive imported LNG.

In its application, the consortium goes under the name “Batangas Clean Energy” and proposes to distribute LNG to industrial users from Lucio Tan-controlled companies as well as those belonging to JG Summit Holdings, Inc. from a floating storage regasification unit (FSRU).

“Ang captive market (Its captive markets are) JG Summit, Tanduay, Eton, Asia Brewery,” according to Mr. Marcos, the DoE official who recommends LNG-related project proposals for approval by the Energy Secretary.

JG Summit is controlled by the Gokongwei family and operates companies in the food, agro-industry and commodities, real estate and hotel, air transportation, banking, and petrochemicals industries. It also has investments in telecommunications and power generation and distribution.

Tanduay Distillers, Inc. is the parent firm of Absolut Distillers, Inc., which in 2018 laid down its P1.3-billion expansion plan for the next two to three years covering investments in at least 10-megawatts of renewable energy and a capacity increase for bioethanol production.

Asia Brewery, Inc. and Eton Properties Philippines, Inc. are subsidiaries of LT Group, Inc., Mr. Tan’s listed holding company with investments in diversified industries, including beverages, tobacco, property development, and banking businesses.

“It’s an FSRU,” Mr. Marcos said about the proposed facility.

The floating facility will allow backers to receive LNG shipments ahead of the expiration of the Malampaya gas contracts in 2024.

The offshore Palawan gas discovery is the country’s only find so far. The consortium that holds the service contract had applied for a contract extension, which the DoE has yet to act on.

First Gen Corp. has DoE approval to put up an FSRU. The Lopez-led rival project is considering an LNG storage ship with an onboard regasification plant capable of converting the liquefied fuel back into its gaseous state. The gas can then be supplied directly to some or all of the company’s existing power plants.

Mr. Marcos said he was not familiar with the members of the consortium led by Mr. Tan.

“Ang kanilang (Their) business model, or captive market, to assure viability (are) Tanduay, Asia Brewery, Eton, JG Summit and others,” he said.

“Sinasama din nila ‘yung Pilipinas Shell refinery, sabi ko ‘di mo puwede angkinin ‘yan kasi at the moment, naka-contract ‘yan sa banked gas ng Malampaya at PNOC (They were including Pilipinas Shell Petroleum Corp., but I told them they can’t assume that because at the moment, it is under contract to take up the banked gas of Malampaya and Philippine National Oil Co.),” he said.

Mr. Marcos said the DoE has been going over the consortium application for about two months. He did not say when the agency could complete its evaluation nor the expected issue date of the notice to proceed. — Victor V. Saulon

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