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Coal to remain dominant energy source for PHL — Fitch Solutions

By Victor V. Saulon
Sub-Editor

COAL-FIRED power plants will remain the country’s dominant energy source in the coming decade, making up more than half of the capacity mix, results of a new research show.

“While the gradually improving environment for renewables present an upside risk to our renewables forecast, coal will still remain dominant in Philippines’ power sector expansion. We forecast coal to make up 59.1% of the total power mix by 2028,” said Fitch Solutions Macro Research in its latest industry report released on Wednesday.

It said coal remains the most practical base for affordable electricity generation at the scale needed to support economic activity.

“Our view is also informed by the government and power producers’ ongoing commitment towards coal,” Fitch Solutions said.

Its analysis matches the stance of Energy Secretary Alfonso G. Cusi that his department would be “technology-neutral” in approval of new power plants. He has also maintained his position that fixed and subsidized rates for renewable energy is over.

Fitch Solutions said the country’s renewable energy sector continues to face “multiple challenges, and will require strong political commitment and more incentives in order to support growth.”

“We expect non-hydro renewables generation to decline slightly to 10.2% of the total power mix by 2028 due to the development of thermal sources,” it said.

Mr. Cusi, earlier this month, reiterated the Department of Energy’s (DoE) technology-neutral approach to building energy capacity to meet rising power demand. In a forum in late July, he told ambassadors, as well as public and private officials the same.

“The technology-neutral approach taken by the DoE since I came into office has seen our generation capacity grow while maintaining our renewable energy mix and reducing our dependence on expensive oil imports,” he said in his speech. “All energy options are considered on the basis of affordability, reliability, security and sustainability.”

Coal power plants accounted for 39% of the country’s 21,241 megawatts (MW) of installed energy capacity last year, followed by renewable energy with 31%, while natural gas and oil-based plants had 16% and 14%, respectively.

Fitch Solutions said improving regulatory support for the renewables follows the recent pronouncement by President Rodrigo R. Duterte during his July 22 fourth State of the Nation Address about his intentions to cut the country’s dependence on coal for power generation with more natural gas and renewables.

Support for renewables include the DoE’s Renewable Portfolio (RPS) and the Green Energy Option Program (GEOP). RPS mandates power distribution utilities to source a minimum portion of energy from renewable sources, thus ensuring a market for it. GEOP empowers consumers who insist that the energy they use is sourced from renewables.

Still, Fitch Solutions said it expects the Philippine government to turn to coal to meet the country’s power demand surge, which is driven by strong macroeconomic and demographic fundamentals, and government goals to achieve a 100% electrification rate by 2022. “Coal remains a cheaper and more reliable option, particularly as resources in the Malampaya gas field depletes with limited scope for exploration success in alternative locations in the country,” it added.

It said while renewable energy costs are falling, the intermittency and low capacity of wind and solar power generation means the sector will only supplement base-load resources in scaling up power generation.

Fitch Solutions said its view is backed by commitment by both the government and the private sector to build more coal power plants. It cited projects that secured DoE certification as “energy project of national significance” such as the 1,200 MW ultra-supercritical coal-fired power plant in Atimonan, Quezon and the 1,336 MW supercritical “clean” coal power plant in Dinginin, Bataan.

“Our growth forecasts for coal is also underpinned by a very strong coal power project pipeline. As of the beginning of 2019, there was around 9.2 GW (gigawatts) of coal-fired capacity recorded in our key projects database, dominating the power project pipeline at 56.7% of all power projects,” it said.

“While growing environmental and social opposition against coal pose an increasing risk to these projects, we still expect a significant amount of coal capacity to be commissioned over the coming decade.”

Senate body sees alcohol tax hike OK in 3 weeks

THE SENATE Ways and Means committee expects to approve the measure increasing excise tax on alcohol products in two to three weeks, its chairman Senator Pia S. Cayetano said.

Ms. Cayetano cited difficulty in approving remaining tax reforms any time soon since the chamber is set to begin parallel hearings on the P4.1-trillion national budget for 2020 in order to ensure it is signed into law by yearend.

“In terms of the pace of the committee, ang goal is to have hearings every week. I just want to be sure that all the stakeholders will be heard on record,” Ms. Cayetano said in a media forum in Manila on Wednesday.

“Next week, I plan to continue alcohol and then go to the e-cigarettes and vapes issue, siguro mga two to three hearings pa ‘yun.”

Its counterpart measure, House Bill No. 1026, principally authored by Albay 2nd District Rep. Jose Ma. Clemente S. Salceda, bagged final approval in the House of Representatives on Tuesday.

Asked whether the excise tax increase for alcohol products can hurdle both chambers by yearend, Ms. Cayetano said “medyo mahirap ‘yun (that will be difficult) only because we have the budget.”

“But kung sasabihin mo lang naman na (if you focus only on) alcohol products, eh di tapos na ako (my committee can approve that) in two weeks, tapos magko-committee report ako,” she said, noting that she also serves as vice-chairman of the finance committee that is in charge of budget hearings.

The Department of Budget and Management transmitted the proposed 2020 National Expenditure Program to both chambers on Tuesday. The House is set to hold its first budget hearing on Thursday, beginning with a briefing by the Development Budget Coordination Committee.

The alcohol and e-cigarette excise tax increase was among the bills mentioned by President Rodrigo R. Duterte in his July 22 fourth State of the Nation Address, along with the proposal to cut the corporate income tax to 20% by 2029 from 30% currently, centralize real property valuation and assessment, and simplify the tax structure for financial investment instruments.

Ms. Cayetano on Tuesday led the initial deliberation of Senate Bill No. 383, filed by Senator Emmanuel D. Pacquiao, which adopted the proposal of the Department of Finance and the Department of Health.

The Senate bill proposed to increase the ad valorem tax rate to 25% of the net retail price of distilled spirits from the current 20% and the specific tax rate to P40 per proof liter from 24.33 in 2020. The specific tax rate will increase by P5 annually until it reaches P55 in 2023 and will increase by 10% every year thereafter.

The proposal is expected to generate P33.3 billion in revenues in the first year of implementation, double the P16.6 billion incremental revenue from alcohol products expected under the House version.

“If you ask me — am I inclined to support the position of DoF? Well, I came from the committee on health before and I’m always at the front line receiving the concerns and complaints of our kababayan, who need more health care and I see it myself; so of course, I want to raise more funds for it.”

The House bill will increase the ad valorem tax on distilled spirits to 22% of the net retail price per proof and a specific tax of P35 per liter. The specific tax rate will then increase by P5 every year until it reaches P45 in 2022, after which it will increase by seven percent annually beginning 2023.

The government has so far enacted Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Law, which slashed personal income tax and increased or added levies on several goods and services; RA 11213, the Tax Amnesty Act, which grants estate tax amnesty and amnesty on delinquent accounts left unpaid even after being given final assessment; and RA 11346, which will gradually increase excise tax on tobacco products to P60 per pack by 2023 from the current P35. — Charmaine A. Tadalan

Economists watch for impact of Hong Kong crisis

By Mark T. Amoguis
Senior Researcher

HONG KONG is one of the Philippines’ bigger investment and trading partners, but a recession there — as warned last week — will likely have limited direct impact on the latter’s economy, ranking state as well as private sector economists said in recent interviews.

Reuters reported on Aug. 16 that Hong Kong could be “on the verge of its first recession in a decade” as anti-government protests, which have marked their 11th week, scare away tourists and weigh on retail sales.

“Should Hong Kong fall into a recession given recent developments, it would be difficult to comment on the possible duration of such, while its impact on the Philippine economy will depend for the most part on how deep the recession will be,” Bangko Sentral ng Pilipinas Deputy Governor Francisco G. Dakila, Jr. said in an e-mail.

At the same time, Mr. Dakila flagged potential indirect risks, saying that “overall, while the emerging risk to the Philippine economy arising from the slowdown of the Hong Kong economy may appear manageable over the near term, it remains prudent to continue to monitor possible escalation of the ongoing civil unrest and its potential adverse impact on global and regional sentiment, which may affect prospects for the domestic economy as well.”

Hong Kong’s economy grew 0.5% annually last quarter, revised from the previous estimate of 0.6% and lower than the first quarter’s 0.6% as it reeled from the impact of the US-China trade war and a slowing China economy. On a quarterly basis, its economy was revised to a 0.4% drop in the second quarter from initial estimate of a 0.3% contraction. Two successive quarterly contractions would meet the conventional definition of a recession.

Official growth data have yet to account for the economic effects of confrontations between police and protesters that plunged the Asian financial hub into its worst crisis since it reverted in 1997 to China’s hands from British rule.

“Nonetheless, we see that the main transmission channel of such impact would be on trade, particularly exports,” Mr. Dakila said, saying that Hong Kong has accounted for about 13% of total Philippine goods exports and three percent of total Philippine goods imports.

“Investments will likewise be possibly affected.”

He also noted that Hong Kong accounted for five percent of total gross foreign direct investments (FDI) inflows for the first five months of 2019 and about six percent of total gross foreign portfolio investment inflows last semester.

“Finally, given that Hong Kong is host to a significant number of overseas Filipino workers (OFWs), another possible risk transmission channel would be remittances,” said Mr. Dakila, who oversees central bank’s monetary and financial policy, international monetary affairs, loans and credit, as well as economic and financial literacy.

Over the past five years and last semester, he said, Hong Kong accounted for about three percent of OFW remittances.

National Economic and Development Authority Undersecretary Rosemarie G. Edillon also said that any downturn in Hong Kong’s economy “will not have significant impact” on the Philippines, even as she noted that Hong Kong makes up about 12% of the Philippine export market and brought in $270 billion in FDI net inflows in 2018, following Singapore.

Ms. Edillon added that Hong Kong is a “big” source of cash remittances, albeit less than three percent of the total. Hong Kong was the tenth biggest source of cash remittances last year with $845.147 million. Last semester, money sent home by OFWs in Hong Kong amounted to $412.636 million, the eighth biggest source of such inflows to date.

Last year, Hong Kong recorded the second biggest FDI net inflows of $270.19 million, following Singapore’s $935.62 million. Last semester, it was the eighth biggest FDI source at $17.38 million.

Hong Kong was the fourth largest buyer of Philippine goods at $4.415 billion last semester, while it was the tenth biggest import source as it sold the Philippines $1.658 billion worth of goods.

Jeff Ng, Continuum Economics’ chief economist for Asia, similarly sees “limited impact” on the Philippines from a possible recession in Hong Kong, noting that the Philippines relies more on the United States and the Middle East for remittances.

He also cited Japan, US, China and Singapore as other key FDI sources.

He said that the Philippines trades more with China and Japan (accounting for 20.5% and 10.2% of total trade, respectively), compared to Hong Kong (6.9%).

“Hong Kong may fall into a recession at the worst or a slowdown at best. The Hong Kong slowdown/recession should persist in H2-2019 and 2020. This should have a small impact on the Philippines. Philippines will be more affected by US-China trade war and China slowdown,” Continuum Economics’ Mr. Ng said in an e-mailed response to questions.

For his part, Rajiv Biswas, IHS Markit’s Asia-Pacific chief economist, said in an e-mail: “Due to the impact of the US-China trade war and the political protests, Hong Kong’s economy has been badly hit, with GDP contracting in Q2 2019 and likely to also contract in Q3 2019.”

“This means that Hong Kong will most likely enter a technical recession, which could have some negative impact on Filipino workers in Hong Kong, especially in sectors like hotels and retailing if tourism is significantly disrupted.”

In terms of trade, “[w]ith Hong Kong’s economic growth badly hit this year and the Hong Kong economy likely to be in recession, this will have a negative impact on exports from the Philippines to Hong Kong,” Mr. Biswas said, noting that the territory is an important trade partner for the Philippines, with total bilateral trade exceeding $13 billion per year.

“For remittances,” Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, Inc., said in a separate e-mail, “Middle East sources are still bigger compared to HK remittances”; hence, “[i]f recession hits (Hong Kong), impact (on the Philippines) would be marginal.”

Alex Holmes, Asia economist at Capital Economics, said via e-mail that a Hong Kong recession would probably be a “small negative” for the Philippines and that “the impact is unlikely to be large enough to change the overall outlook for the Philippine economy.”

“Slower growth would obviously weigh on remittance growth from Hong Kong,” Mr. Holmes said.

“But remittances from HK accounted for only about three percent of the Philippines total last year,” he added.

“While HK is a major source of FDI into the Philippines, I doubt a slowdown in Hong Kong’s economy would adversely affect those flows. Capital tends to be mobile and would probably find other routes into the Philippines if Hong Kong conduits suffered disruptions,” he explained.

“Recession/slower growth in HK would have a negative impact on Philippines exports to HK. Exports to HK accounted for roughly 10-15% of the total last year, but this figure probably overstates the actual demand originating from HK, as it is a transshipment hub.”

SMC plans P10-B bond issuance

DIVERSIFIED conglomerate San Miguel Corp. (SMC) plans to raise up to P10 billion from the issuance of five-year bonds by October.

SMC Senior Vice-President and Treasury Head Sergio G. Edeza said they will conduct the offer by late September or early October. The bonds will likely have a tenor of five years, the proceeds of which will be used to refinance existing debt.

“There’s a maturing preferred, so we can use it to refinance. The balance, we can use for refinancing for redenominating certain dollar debt but this is only a small issuance,” Mr. Edeza told reporters on the sidelines of the United Nations Global Compact-Global Reporting Initiative Summit in Pasay Tuesday.

This will be the last tranche of SMC’s P60-billion shelf registration filed with the Securities and Exchange Commission in 2017. Mr. Edeza said they are still awaiting approval for the permit to sell before starting the offer.

The company will hold a briefing for institutional investors on Thursday, Aug. 22, for the issuance.

Asked if they are planning another shelf registration, Mr. Edeza said this will depend on their financing needs.

“There will always be requirement for financing…we have to assess our financing program, and whatever is the need, if there’s a need for shelf (registration), then we will file,” Mr. Edeza said.

SMC was recently awarded the P734-billion Bulacan International Airport project. It will now supervise the project’s financing, design, construction, supply, completion, testing, commissioning, and operation and maintenance.

The Department of Transportation (DoTr) said it expects the company to begin construction by the fourth quarter of the year.

Mr. Edeza declined to disclose details on the Bulacan airport’s financing as they have yet to receive a formal notice from the government.

San Miguel Holdings Corp., SMC’s unit that will handle the project, must submit documentary requirements such as its performance bond and letters of credit from a bank to the DoTr Special Bids and Awards Committee within 20 days after receiving its notice of award.

The Bulacan airport, also known as the New Manila International Airport, is seen to serve as an alternative to the Ninoy Aquino International Airport. It will have four to six parallel runways projected to have an annual capacity of 100 million passengers.

The company has engaged three foreign firms to design and build the project, namely Groupe ADP (Aeroports de Paris), Meinhardt Group and Jacobs Engineering Group.

SMC’s net income attributable to the parent rose 38% to P7.52 billion in the second quarter of 2019, even as sales slipped 2% to P258.57 billion.

For the first half, attributable profit grew 3.5% to P13.23 billion, while sales added 2% to P509.495 billion. — Arra B. Francia

Nickel miner eyes new site as Tawi-Tawi mine nears depletion

By Vincent Mariel P. Galang, Reporter

SR Languyan Mining Corp., a top exporter of high-grade nickel ore, is eyeing a new site in the Bicol Region, as its Tawi-Tawi mine site nears depletion of ore deposits.

“Bago mahinto ’yung operations namin nagpa-Plan B na kami. Humanap na kami ng alternative na area para ’yung tao namin, dahan-dahan naming ililipat [Before our operations stop, we already have a Plan B. We already looked for an alternative area so that we can gradually transfer our employees],” Hamba Bara Loong, port manager of SR Languyan, told BusinessWorld in a phone interview earlier this week.

Mr. Loong said the company is currently conducting exploration activities at a site in the Bicol Region. He did not disclose the exact location, but said the site spans 5,000 hectares and has an estimated mine life of 50 years.

As for the Tawi-Tawi site, Mr. Loong said its ore deposits are likely to be depleted by the end of the year.

“May depletion ang area, so malapit nang mag-deplete… Mga end of this year maybe. Mga 10% na lang (deposits), so most probably end of this year [There is already depletion in the area, it is nearing depletion… Maybe by end of this year. There are only 10% deposits remaining, so most probably end of this year],” he said.

Reuters earlier reported that the closure of SR Languyan will slash the Philippines’ monthly exports of nickel ore to China by 300,000 to 400,000 tons, quoting estimates by the Mines and Geosciences Bureau (MGB). Jaynul Ali Sambaranu, head of the mines and geosciences services of the Ministry of Environment and Natural Resources of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), said that they will conduct a mine audit on all active mining companies, including SR Languyan, in Tawi-Tawi next week to assess the level of ore deposits. He noted that SR Languyan is exporting a monthly average of 500,000 tons to China, the world’s top metals consumer.

Once SR Languyan’s operations end, Mr. Sambaranu said BARMM will feel the biggest impact on cash remittances.

“Unang-una cash remittances ng SR Languyan sa BARMM, syempre ’yung area iiwanan din. Pero ang pinaka malaki talaga sa cash remittances (First, it’s the cash remittances of SR Languyan to BARMM, and also the area that they will leave. But the biggest impact is really on cash remittances,” he said. SR Languyan is one of the top nickel ore producers in the country, and China’s second-biggest supplier of nickel ore which are used in stainless steel and battery production.

The company was given a mining permit in 2010 which covers 3,483 hectares of land in Languyan, Tawi-Tawi.

SR Languyan’s impending shutdown comes amid a nickel ore shortage and Indonesia’s possible ban on nickel ore exports.

Indonesia, the world’s top nickel ore supplier, is crafting mineral ore export rules, which might include a ban on exports of unprocessed mineral ores to be implemented from 2022.

Taking the Philippines’ tiangge experience to Europe’s shoppers

By Chris Buono

ONE of the biggest draws for European tourists coming to Southeast Asia are the night markets — with their incredible food, lively atmosphere, and of course, the mind-boggling array of products on sale from kitsch keyrings and exotic souvenirs to woven goods and wooden handicrafts.

The Philippines’ own unique version of the night market, which never fails to delight, are the tiangges, vibrant informal shopping destinations where street vendors set up stalls and sell locally designed and manufactured product selections.

According to the latest statistics, ASEAN saw 10.9 million visitors from the European Union (EU) in 2017, with more than 550,000 visiting the Philippines specifically. As of February 2019, that ranks the EU as the 5th of all arrivals in the country.

There is an undeniable opportunity in using e-commerce to bring unique aspects of the tiangge experience — along with its distinctive products — directly to European shoppers who have experienced the joys of tiangges. Research commissioned by UPS has shown that seven out of 10 European online shoppers have purchased from an international retailer. Within this group, 33% explained that the reason they bought products from international retailers is because they were after something “unique” — so why not take the tiangge online and showcase the best that the Philippines has to offer in handicrafts and gifts?

For the SMEs that make up more than 99.6% of businesses operating in the Philippines, taking the leap into the world of e-commerce can sometimes be daunting. Here are the main things enterprises looking to sell online in Europe need to first consider.

1. KNOW TRADE DEALS
The EU has either finalized, or is currently in the midst of negotiating, several bilateral trade deals with ASEAN nations including Malaysia, the Philippines, Singapore, and Vietnam. At present, none of these trade deals are in effect, but that doesn’t mean there isn’t more work to be done.

Entrepreneurs in countries with free trade agreements (FTA) in the pipeline should pay close attention to their impending implementation and strategize accordingly. In particular, business owners should look into whether the deal outlines any prohibited products, or whether there are any categories of products that have had import duties removed or reduced.

The importance of FTAs in driving growth and international expansion for online businesses was one of the key themes in a recent workshop that UPS Philippines organized for the members of the European Chamber of Commerce of the Philippines.

Entitled, “Exporting to the EU 101,” the workshop gathered Filipino businesses across different industries that are interested in doing business with EU markets but don’t have the technical know-how and experience in international trade.

For those doing business with countries without FTAs on the horizon, don’t worry; oftentimes currency differences and the cost of producing goods in the Philippines means you can still offer competitively priced products.

2. CHOOSE RIGHT PLATFORM/S
For many smaller businesses considering selling online, developing an entire website from scratch is simply unfeasible. Particularly so, when you consider the fact that there are online marketplaces — like Lazada or Shopee — that provide a simple, ready-made platform where merchants can sell their wares. In fact, according to UPS research, 96% of EU shoppers have already purchased goods from online marketplaces, making them ideal to reach new customers in Europe.

Before committing to any marketplace, it’s a good idea to do some research as there isn’t one platform that reigns supreme. While Amazon is active in several European countries, there are in fact many country-specific platforms that are leaders in their respective markets.

An exporter may choose to build a strategy around multiple platforms in order to maximize their chances of getting their product in front of consumers. One thing that should be noted, however, is that marketplaces will have differing requirements and regulations that pertain to sellers, so it’s important to do your research.

3. UNDERSTANDING ‘CUSTOMS’
One of the fundamentals to getting shipping right is being able to offer customers a “landed cost” — the cost of the purchase including the sale price, shipping, and any customs duties that need to be paid. In fact, UPS’s research found that 72% of European online shoppers consider this to be one of their top priorities when purchasing from international sellers.

Each EU state has its own set of trade rules and barriers to entry, so it’s important to understand each individual country’s trade regulations before you start doing business.

When a certain commodity reaches a customs territory of the EU, the owner of the commodity may face different national tax regulations, prohibitions and restrictions, as well as government agencies of different member states. Therefore, business owners must pay the correct import tariffs and taxes ensure accuracy of invoices and obey laws of each state.

Many logistics providers offer tools, called APIs, that calculate these additional costs before the customer makes a purchase, preventing sticker shock from unexpected fees when their delivery arrives.

The speed and cost of shipping is also important; again, our research found that 62% of EU online shoppers list speed of shipping as a main concern when buying internationally. Offering a range of shipping options with varying delivery speeds and prices will allow Philippine businesses to meet the needs of most customers.

While setting up an online shop undoubtedly takes work, European consumers are generally globally minded and are willing to make online purchases from anywhere in the world, as long as two key conditions are met: payment security and the total cost of the order including duties and fees. If your business plans carefully, it will soon be enjoying the benefits of a new revenue stream beyond your domestic market, as it begins to bear fruit from the other side of the world.

Chris Buono is the managing director of UPS Philippines.

Mynt partners with Greenhills mall operator

GLOBE Telecom, Inc.’s mobile wallet arm GCash has recently been tapped by Ortigas & Co. to offer its quick response (QR) payment services to merchants at Greenhills.

In a statement Tuesday, GCash operator Globe Fintech Innovations, Inc. (Mynt) said it has entered a partnership with the managing firm operating Greenhills, Ortigas Malls, to start rolling out QR code payments at several retailers at Shoppesville and V-Mall.

“We think that them (merchants) being able to accept cashless payments via GCash QR will bring more convenient and more efficient transactions. We’re looking forward to 100% of Greenhills being able to accept cashless payments,” Ortigas Malls Head of Leasing Catherine Duenas was quoted in the statement as saying.

Greenhills currently has more than 2,000 merchants in its 16-hectare mixed-use space in San Juan, Manila. Businesses range from tiangges, apparel stores, dining establishments and a grocery.

The partnership covers the deployment of QR codes to merchants that shoppers may scan through their mobile phones to pay for products. Mynt said the tie-up with the mall giant helps its cause in promoting cashless payments across the country.

“GCash’s vision is to have a cashless society leading to finance for all. A part of this means being able to settle transactions with just your mobile phone,” Mynt President and Chief Executive Officer Anthony Thomas said in the statement.

As of end 2018, GCash said it had 15 million registered users on its platform, with monthly active users recording a 3.5 times growth.

Aside from Ortigas & Co. for Greenhills, Mynt had previously signed partnership deals with Ayala Malls, Robinsons Malls and SM Stores.

Mynt is jointly owned by Globe, its parent company Ayala Corp. and billionaire Jack Ma’s Ant Financial Services Group, the owner of online payment service Alipay. — Denise A. Valdez

PHL telcos seen having edge in 5G launch race

By Denise A. Valdez
Reporter

NETWORK providers in the Philippines have an edge against their regional peers to launch fifth generation (5G) technology faster, technology firm Ericsson, Inc. said.

“The Philippines is in a good position from a spectrum point of view,” Ericsson Country Head for the Philippines Martin Wiktorin said in a media interview Thursday last week.

“Normally, spectrum is a limitation… But in the Philippines, the situation is very beneficial,” he added.

Mr. Wiktorin noted that in the country, telco firms PLDT, Inc. and Globe Telecom, Inc. are awarded by the government their own spectrum bands. Having these assets readily available allow companies to choose their own timeline for launching any type of network, such as 5G.

“In all other countries in Southeast Asia, the spectrum is not assigned yet. It has to be made available, then it has to be assigned to the service providers. While today, in the Philippines, the service providers already own spectrum for 5G,” Nunzio Mirtillo, Ericsson senior vice-president and head of Southeast Asia, Oceania & India, said.

“So they could launch tomorrow, which is an advantage compared to other countries,” Mr. Mirtillo added.

Last June, Globe Telecom, Inc. launched its 5G network for home subscribers-setting the record as the first to make the technology available in the Philippines and in Southeast Asia.

Its rival PLDT, Inc. is targeting to follow soon, with a goal of launching 5G to home and enterprise customers by early 2020.

“The technology and the regulatory framework makes that possible. Of course, it’s a decision for the operator when they want to do that. But the environment is very, very good in the Philippines,” Mr. Wiktorin said.

The practice of spectrum allocation is different from country to country. In the Philippines, the government assigns companies their own frequency bands, which cannot be recalled by the regulator without facing a court case. In other countries, the government puts a cap on a telco’s use of spectrum — whether in terms of number of frequency bands it is assigned or the years when one could own it.

“You have spectrum available already today, so the service providers, both Smart and Globe, already have spectrum on the middle band,” Mr. Mirtillo said. “So if they decide to go 5G, they can do it tomorrow. While in other countries, (that) is not available yet.”

5G network is the latest cellular network technology which promises higher speeds with lower latency. Ericsson estimates the technology could open a new revenue stream worth “billions of dollars” for telco firms.

“We are talking about opportunity to grow the revenue by at least 25% to 40%. So it’s big,” Mr. Mirtillo said.

New Davao hospital eyes soft opening this year

DAVAO CITY — The Lanang Doctors Hospital, the medical facility component of Megaworld Corp.’s Davao Park District township, is targeted for soft opening this year with the completion of the building expected soon.

“Probably the whole building will be completed but the operation will be partial and will be on the lower ground floor. We’ve just done our topping off last week and we are looking at the possibility to do the soft opening this year,” Lemuel R. Podador, chairman and chief executive officer of Lanang Premiere Doctors Hospital, Inc. (LPDHI), said in an interview over the weekend.

Mr. Podador said they are looking at initially opening 100 beds out of the total 250-bed capacity.

He added that medical equipment have already been ordered and they are just waiting for the delivery.

Mr. Podador said the hospital’s pool of doctors will have varied specializations and they aim to provide service to “all walks of life.”

“I have instructed our medical board that we will give our patients the best rate and service,” he said.

Apart from the 14-storey main building, another five-floor building will be constructed for doctor’s clinics.

Mr. Podador said they are also positioning the hospital as a medical tourism facility.

He said the total investment is seen to reach up to P6 billion, including top-of-the-line medical equipment.

The full opening is planned for July 2020.

CONDO UNDER CONSTRUCTION
Meanwhile, Suntrust Properties, Inc. (SPI), a wholly owned subsidiary of Megaworld, said they are targeting to complete the structural component of the township’s condominium complex, One Lakeshore Drive, by August next year.

SPI President Harrison M. Paltongan, in an interview during the topping-off Saturday, said contractors for the finishing work on the first building are coming in soon.

Mr. Paltongan, however, said there is no definite date yet for the turnover of units.

“When we talk about turnover, it is done by floor… There are external factors other than structural such as the electrification, and all other elements,” he said.

The four towers, with 19 floors each, will have a combined 1,200 units ranging from 28 to 53 square meters each.

Three floors will be allocated for parking and commercial units, and the rest would be residential.

“They are all connected on the third level,One Lakeshore Drive is connected to each other,” he said.

The condominium buildings will occupy a 7.2-hectare (ha) area within the 11.2-ha Davao District Park, which will also have an office/business process outsourcing building and school. — Maya M. Padillo

Meeting Martha

By Joseph L. Garcia, Reporter

THIS reporter was trying to figure out what made Martha Stewart so special.

Sure, she built a billion-dollar empire and became the first self-made female American billionaire when her company went public in the late ’90s. Her fingers are in every pie: household linens, home decor, books, TV shows — name it, she has probably done it (even modeling for Chanel, back in her college days). But what Martha offered was more than that: it was an emotional core, a sense of stability. Martha served as an anchor to the ideal of a quiet home, an idea eroded by a world that sometimes moved too quickly.

When life wasn’t perfect (and it never is), Martha, with her upper-crust East Coast drawl that sometimes softened to a loving coo, was there. Martha’s show aired in the afternoons in Manila until 2004, and, after 2005, in the evenings, on the Lifestyle Network. Martha’s shows opened a window to a world of quiet solitude, where everything could be fixed and made lovely with the correct, tasteful choice: whether it was for dinner, or for the birdhouse. Martha showed, through the way she made and did things, that life could be better. She herself said, “Nobody has balance anymore. It’s a crazy upside-down world, and to find that balance is really difficult. You have to make a good life, and whichever way it ends up, it’s a good life.”

Martha Stewart is in town this week (she’s going shopping on Thursday) for the ANC Leadership Series, held at Sofitel on Tuesday. Previous guests of the ANC Leadership series include Virgin Group founder Richard Branson, and former US Secretary of State Madeleine Albright.

CRAFTS, COOKING, CANNABIS
Born on August 3, 1941, Martha Stewart received her education from Barnard College of Columbia University, graduating with a double major in history and art history. She began her career as a stockbroker, but later founded a catering company and made her first million in the 1970s. Through the parties she organized, she met people in the publishing industry, which led to her first book, Entertaining, in 1982. She has since written more than 90 books, and, in the ’90s, she began the Martha Stewart Living magazine, which expanded into Martha Stewart Living Omnimedia — the company we know today.

Martha Stewart’s homes, which she showed during her presentation, serve as a microcosm of her own empire. Her homes in the East Coast serve as her laboratories for her ideas, and reflect more than a little bit of the personality that created the empire. She pointed to her craft room, an attic with low ceilings and green desks. “Notice how organized the drawers are,” she said, showing a photograph of scissors arranged on trays within drawers. “I love organization and I love seeing this where they belong, so that you can find them when you leave them. You know what I mean?” she said. “I just don’t like messiness. It’s not about tidying up. It’s about being organized.”

“I like to take care of things, I like to make things pretty,” she said.

As we’ve mentioned, Martha has her finger in every pie — even the cannabis oil industry. She partnered in a TV show with rap star Snoop Dogg (who has made many references to marijuana in his work), and earlier this year, partnered with a Canadian company for a line of products that incorporate Cannabis oil. “Are we allowed to talk about cannabis in this audience?” she said, probably referencing the government’s brutal stance on illegal drugs. “I read all about it. I don’t even want to go there. I want to go home.”

“I have no cannabis on me, by the way,” she said, prompting laughs and cheers from the audience.

‘WOMEN SHOULD RULE THE WORLD’
Dressed in a simple beige shirt dress accented with baroque pearls, she also said, “As an entrepreneur, you just can’t get too sloppy. You also have to have that appearance, no matter what. You always have to make sure that you look good.”

The sense of appearance of course also bleeds into her business, which encourages a beautiful way of life. “If you start making things that are ugly, people are not going to want them. They don’t want stuff in their home that’s ugly, and you don’t want them to have anything that’s ugly.”

While her company kicked off and went public in the ’90s and started an advocacy for elegant and fun living, Martha Stewart’s world would seemingly crumble in 2004 for a conviction in insider trading. She was incarcerated for months, and she references the episode during her talk. “Not everybody survives a debacle like I had to go through. That’s when people were being sent to jail for infractions that were not really infractions, if you want to put it that way. It was a very, very tough time. First of all, I had most fabulous company, and I had a very serious sense of self-worth. Being sure of yourself, and believing in what you do and who you are, really helps. Plus I had a supportive family around me.”

It’s interesting how Martha weaponized her femininity: she lived in a masculine world of bankers and brokers and lawyers. But Martha parlayed her skills at what many consider to be the most feminine of pursuits: lifestyle and domesticity, and built an empire from there — one that has bested and outperformed many others. “I think women should rule the world,” she said. Of course, there were some trade-offs: while responding “Nope” to a question if she had any regrets, she did say, “I think my marriage suffered terribly as a result. But I think I also had a very creepy husband.” The audience applauded.

“Living is such a vast subject. It’s limitless,” she said of her brand. “It was a big enough idea to make a business out of it.” While her business isn’t as big as Steve Jobs’s Apple, she says that “it’s as far-reaching.” Showing another photograph from her presentation, one of herself holding a basket of linens, she said, “Homekeeping isn’t about housekeeping, it’s not a chore. Homekeeping is an art form.” No less than Steven Spielberg agreed with her, she recalled in a story. “A home can change season to season, it can change year to year… but keeping it vital to your own interpretation of what a home should be is something we can all pay attention to.”

BSP may issue new rules after OFBank business model review

THE CENTRAL BANK wants to review Overseas Filipino Bank’s (OFBank) business model first and then issue new regulations if needed as the lender seeks to go digital, a senior official said.

Land Bank of the Philippines (LANDBANK) President and CEO Cecilia C. Borromeo earlier said the lender is “in close coordination” with the central bank as it seeks to transform its subsidiary OFBank into a “branchless digital bank” expected to be launched in June next year.

She said this could be the first domestic digital bank, hence the need to coordinate with the BSP for regulations.

Referring to it as the “Beta Bank,” Ms. Borromeo said OFBank will offer other financial services such as insurance and digital payments aside from lending, which will be tailored according to overseas Filipino workers’ (OFW) needs.

BSP Deputy Governor Chuchi G. Fonacier said the central bank’s existing regulations can already cover digital banks.

“The proponent digital bank should present to the BSP its business model. So, depending on the business model, that’s how the BSP would evaluate taking into account existing regulations,” Ms. Fonacier said in a text message.

The official said discussions between the BSP and OFBank are still ongoing.

“The OFBank as a digital bank will be a good addition to the country’s digital banking. It will be able to contribute to the shift to more digital banking services,” Ms. Fonacier added.

Finance Secretary Carlos G. Dominguez III earlier said OFBank will have around 10 million OFWs as potential customers, and going digital will make it easier for the lender to reach its clients.

“It just makes sense to do that because the potential customers of the OFBank, overseas Filipinos lang, more than 10 million na yan (overseas Filipinos alone, that’s already more than 10 million). Now if you’re going to go to the traditional way of doing banking, of setting up a branch, getting permission from the different countries to set up a branch, it’s going to take you forever. It’s better to spend time on doing it digitally. That’s easier to reach all your potential customers,” Mr. Dominguez said.

Ms. Borromeo said OFBank’s move to digital banking will not entail a huge investment as LANDBANK’s digital platform can handle the shift.

“Actually, [the budget allotment] won’t be much because the IT platforms of LANDBANK is very robust… It can handle that, we just need to tweak it,” she said.

OFBank was launched in January last year — four months after the transfer of Philippine Postal Bank shares to LANDBANK from the Philippine Postal Corporation and the Bureau of the Treasury — through Executive Order No. 44 to provide financial products and services tailored to the requirement of overseas Filipinos such as efficient foreign remittance services, with its main headquarters at the Liwasang Bonifacio in Manila.

The bank also has a representative office at the Philippine consular office in Dubai where Filipinos abroad can inquire about OFB’s banking services including peso automated teller machine savings, time deposits, and checking accounts, loan products, investment products such as unit investment trust funds, payment services, and remittance services.

Mr. Dominguez said in March 2018 that the Finance department wants OFBank to go fully digital, with plans to put up mobile payment technology system for overseas Filipinos who regularly remit money to the Philippines via the bank.

In June last year, the Finance department said it has sought technical support from the World Bank Group on setting up a digital banking system for OFBank, as it seeks to privatize half of the lender in the future. — B.M. Laforga

Netflix to hold creative and digital workshops in Philippines, ASEAN

NETFLIX last week signed a pledge to partner with the World Economic Forum’s Digital ASEAN working group to the region develop creative and digital skills for the Fourth Industrial Revolution via a series of trainings workshops.

The company said in a statement that the pledge is part of the World Economic Forum’s ASEAN Digital Skills Vision 2020 program, a private-public project that seeks to train up 20 million workers in digital skills by 2020.

Netflix will work with various partners to hold workshops and trainings, which will initially be carry throughout the next six months in Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, with more under consideration in the future, it said.

“As Netflix grows, we are partnering with Southeast Asian governments and industry players to support the development of digital creative skills needed in a fast-developing internet entertainment landscape. We believe having the necessary skills for the creative industry; being equipped for online safety and digital literacy; as well as understanding the principles for an agile governance framework will be integral to the success of initiatives like the ASEAN Connectivity Master Plan,” Yu-Chuang Kuek, managing director of Netflix Asia-Pacific, was quoted as saying in the statement.

Netflix said its pledge involves initiatives focused on three areas.

First, Creative Industry 4.0 Skills Development will focus on the skills required to produce content for the internet entertainment industry, including writing, production, and post-production.

Meanwhile, the area of Online Safety and Digital Literacy aims to equip consumers with knowledge and tools to enjoy online entertainment in a safe and secure way. Initiatives will be rolled out in partnership with industry experts, consumer advocacy groups, as well as regulators, Netflix said.

Lastly, under the area of Agile Governance 4.0, workshops and trainings will be held in partnership with stakeholders to help regulators navigate changes in the fourth industrial revolution and to keep pace with technological advancements, it said.

“Key public-private partnerships like this play a vital role in ensuring societies and governments across the region are equipped with the necessary skills and not left behind in the wake of this technological revolution,” said Justin Wood, Head of Asia Pacific and Member of the Executive Committee at the World Economic Forum.

“This program is delivering significant impact. In its first eight months, the initiative has already secured commitments to train 8.9 million workers at SMEs, as well as to provide 30,000 internships,” Mr. Wood said.

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