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NIA, First Gen to develop hydroelectric power project

THE National Irrigation Administration (NIA) has signed a memorandum of understanding (MoU) with Lopez-led First Gen Hydro Power Corp. to develop a hydroelectric power project at the Aya Dam in Pantabangan, Nueva Ecija.

“In line with this, First Gen has requested NIA’s permission to conduct a comprehensive feasibility study of the project, including but not limited to, legal, economic, social, financial, and technical viability, to which NIA has permitted the former to conduct the same,” NIA said in a statement on Tuesday.

The government agency that oversees the development of irrigation systems in the country said the MoU will complement with the existing Pantabangan-Masiway hydroeletric power plant through an acceptable scheme under existing laws, such as the Renewable Energy Act of 2008 (Republic Act No. 9513).

The MoU was signed on Tuesday at its head office in Quezon City. NIA Administrator Ricardo R. Visaya and FG Hydro Vice-President Dennis Michael P. Gonzales signed the deal.

The 132-megawatt (MW) Pantabangan-Masiway hydroelectric power plant complex in Nueva Ecija is owned and operated by FG Hydro. The complex has two components: the then 112-MW Pantabangan hydroelectric plant component that was commissioned in 1977 and the 12-MW Masiway hydroelectric plant portion that was commissioned in 1981.

Both plants are part of a multipurpose hydro complex that supplies irrigation water for the vast rice fields of Nueva Ecija, around 180 kilometers northeast of Metro Manila.

FG Hydro is owned 40% by First Gen Corp. and 60% by Energy Development Corp. — Victor V. Saulon

BPI begins LTNCD offer

BANK OF THE Philippine Islands (BPI) launched a P3-billion offering of long-term negotiable certificates of time deposit (LTNCTD) on Monday to diversify its funding sources and support its expansion plans.

The P3 billion worth of LTNCTDs have a tenor of five-and-a-half years, the Ayala-led bank said in a disclosure to the local bourse yesterday, with the lender having the option to upsize its offer volume.

The offer period for the debt instruments will run until Oct. 16, with the issue and listing dates set for Oct. 25. However, the bank can adjust the timing of the offer if needed, it said.

The LTNCDs carry an interest rate of four percent per annum which will be paid quarterly. The papers can be bought for a minimum investment of P1 million and in increments of P100,000 thereafter.

Hongkong and Shanghai Banking Corp. Ltd. is the sole arranger and participating selling agent of this deal, while BPI Capital Corp. is the sole selling agent for the LTNCDs.

BPI, in a filing on Monday, said the central bank has approved its plan to offer up to P50 billion in LTNCDs.

The LTNCDs will be offered in one or more tranches.

The P3-billion offering it started on Monday constitutes the first tranche of the program.

“The issuance will support BPI’s expansion plans and diversify the bank’s funding sources,” the Ayala-led lender said in the disclosure.

LTNCTDs are like regular time deposits that offer higher interest rates but cannot be pre-terminated by holders.

However, the notes can be traded on the secondary market prior to maturity, making them “negotiable.”

In 2017, the bank launched a P30-billion LTNCD program in a bid to expand its funding sources.

BPI last month issued $300 million in ASEAN green bonds and two-year 100-million Swiss franc-denominated negative-yielding green bonds as part of its $2-billion medium-term note (MTN) program established in June last year.

In its maiden drawdown from the MTN, BPI raised $600 million in August last year via five-year senior unsecured fixed-rate bonds quoted at 4.25%.

The Ayala-led lender posted a net income of P7.01 billion in the second quarter, up 46.8% from a year ago, amid strong interest and non-interest income growth.

This brought BPI’s bottom line for the first semester to P13.74 billion, up 24.6% from the P11.03 billion booked in the same period last year.

The bank’s total revenues for the first half climbed 23.3% to P45.9 billion, brought by the 24.1% year-on-year growth in net interest income, which reached P32.36 billion.

BPI shares closed at P92.20 apiece on Tuesday, dropping 80 centavos or 0.86%. — BML

Rich spend millions on art as Hong Kong protests rage nearby

AS VIOLENCE escalated in Hong Kong over the weekend with protesters starting fires and throwing petrol bombs and police responding with tear gas, a roomful of Asia’s elite gathered to bid on art and wine.

The venue was the city’s convention center near where the protests took place, part of Sotheby’s five-day marathon, which continues through Tuesday. The sales include 20 live auctions and targets more than $336 million.

The highlight of Sunday’s contemporary art auction was a new world record for Japanese artist Yoshitomo Nara, whose painting of a cute but menacing cartoon girl — Knife Behind Back — sold for $24.9 million.

The jewels, wines, watches and fine art on offer this week — as well as the eye-watering prices — represented a jarring contrast to the events in the streets.

Video footage showed a bloodied taxi driver who was dragged out of his car and stomped by a group of protesters after the vehicle hit some of them. On Friday, a 14-year-old boy was shot and injured — the second such incidence of the week — during a scuffle between a plain-clothes police officer and demonstrators who had attacked his car.

The protests followed warnings from opposition leaders that Chief Executive Carrie Lam’s decision to invoke a colonial-era emergency law banning protesters from wearing face masks would only make matters worse.

Back at the auction, the Nara painting drew six bidders and sold in 10 minutes at a price that was five times the artist’s auction record, according to Sotheby’s. The seven-foot by seven-foot canvas was completed in 2000, when Nara returned to Japan after 12 years in Germany.

On Saturday, Sotheby’s sold a canvas by Chinese émigré artist Sanyu for $25.2 million, with four bidders pushing the painting of a nude female above its $19 million target. In the same sale, Zao Wou-Ki’s 21.04.59 sold for $13.3 million. — Bloomberg

Art, antiques at Leòn’s latest online auction

 

LEÒN XIII, the 13th online auction of León Gallery under the Leonexchange platform, will be held on Oct. 19 and 20 starting at 11 a.m. All bidding will be purely online at www.leonexchange.com.

Among the highlights of the auction are antiques from home of Martin Jesus Tadeo Imperial “Sonny” Tinio, Jr., including tables in all shapes and sizes of valuable hardwood, inlaid with mother of pearl and bone or topped in marble alongside intricately designed mirrors, art nouveau frames, wooden sculptures, and an array of canes embellished with gold, gemstones, and ivory. Tinio designed Casa Manila in Intramuros; restored ancestral homes in Taal, Batangas and Kawit, Cavite; and, is remembered as an antiquarian, collector, genealogist, historian, interior designer, scholar, and writer.

Also to be auctioned are paintings Aleah Angeles; Angelito Antonio, who was among the first batch of CCP’s Thirteen Artists Awardees; Norma Belleza, a feminist proponent of folk art; Dex Fernandez, known for his “Garapata” trademark and an Asian Cultural Council grantee; muralist and designer Froilan Calayag; Zhou Ling, known for her feminist Earth Mother imagery in the Yunnan Art School style; abstractionist Jigger Cruz; and Juvenal Sanso, the Filipino-Spanish master acclaimed for his impressionistic landscapes, among others.

Among the collectibles on the block are crystal and silver pieces, chinoiserie, Filipino period furniture, fine China, coffee table books, and rare photographs.

An exhibition of the pieces up for auction will open to the public on Oct. 14, from 10 a.m. to 6 p.m. at Leòn Gallery in Warehouse 14 La Fuerza Plaza, 2241 Chino Roces Ave. and at the G/F Eurovilla 1 Legazpi corner Herrera St., Legazpi Village, Makati City.

To join the online auction, go to www.leonexchange.com and registering as a buyer. Visit www.leon-gallery.com or contact info@leon-gallery.com or call 856-2781 for more information.

Arthaland incorporates new unit

ARTHALAND Corp. has subscribed to P12.5 million worth of shares in its newly incorporated joint venture firm with Japanese partner Mitsubishi Estate Co., Ltd.

In a disclosure to the stock exchange on Tuesday, the niche property developer said it incorporated Kashtha Holdings, Inc., after which it subscribed to 12.5 million shares worth P1 each.

Arthaland earlier disclosed that its joint venture with Mitsubishi Estate will be buying a 40% stake in its unit Savya Land Development Corp. (SLDC), which in turn is developing Savya Financial Center in Taguig City together with Arcosouth Development, Inc.

This means that Kashtha Holdings will have a 50% stake in SLDC.

SLDC is currently developing Savya Financial Center, a two-tower office development standing on a 5,991-square meter lot in Arca South, Western Bicutan, Taguig City.

Launched last March, the project will have a gross floor area of 59,856 sq.m with a total of 18 floors each. It will offer 332 units sized from 86 to 4,264 sq.m., while also having access to 700 parking slots.

Savya Financial Center will also house 12 units for retail tenants covering a total of 1,545 sq.m. Amenities include a landscaped bridgeway deck garden and a signature lobby.

The building has been designed with sustainable features in mind, including energy efficient air-conditioning system, material recovery facility, efficient waste management system, and dedicated low-emitting fuel efficient vehicle parking provisions.

It has been registered for dual certification in the US Green Building Council’s Leadership in Energy and Environmental Design (LEED) and the Philippine Green Building Council’s Building for Ecologically Responsive Design Excellence (BERDE).

Units are scheduled to be turned over by December 2023.

In an earlier statement, Arthaland said it will take the lead in managing the property’s operations, while Mitsubishi Estate will help improve the project’s value by providing expertise.

Arthaland’s net income attributable to the parent grew 12-fold to P446.29 million in the first half of 2019, against earnings of P34.55 million in the same period a year ago. This came after gross revenues climbed to P1.08 billion in the same period, from only P210.78 million in the first semester of 2018.

Shares in Arthaland jumped 4.82% or four centavos to close at 86 centavos each at the stock exchange on Tuesday. — Arra B. Francia

Armed Forces and Police General Insurance Corp. to cease operations

THE ARMED FORCES and Police General Insurance Corp. (AFPGen) has ceased its operations as a non-life insurance firm as the business is no longer financially viable, the Insurance Commission said yesterday.

Insurance Commissioner Dennis B. Funa said in a statement on Tuesday that AFPGen has voluntarily surrendered its license to sell non-life insurance products and has applied for a servicing license instead.

While the insurer’s 2018 net income was compliant with the P550-million net worth requirement, Mr. Funa said AFPGen has seen the financial health of its insurance business “continuously erode” in the past years.

“While the company’s net worth as of end-2018 is compliant with the existing P550-million net worth requirement, the company said that it is no longer viable to maintain its insurance business considering that its financial health continuously eroded in the last six years,” Mr. Funa was quoted as saying in the statement.

Under Republic Act 10607 or the Amended Insurance Code of the Philippines, new industry players are required to have P1 billion in paid-up capital, while existing insurance companies need to maintain a paid-up capital of P550 million by December 2016, P900 million by December 2019 and P1.3 billion by December 2022.

Mr. Funa said all of AFPGen’s issued policies prior to its surrender of its license remain valid, existing and binding.

An overseer has been appointed to monitor the company for its compliance with all of its outstanding liabilities to its stakeholders, the official said.

“Now as a servicing insurance company, AFPGen’s operation is limited to servicing its existing policyholders. All insurance contracts and policies issued by AFPGen shall remain to be valid and AFPGen is required to fulfill its obligation under these contracts,” Mr. Funa added.

The withdrawal and cessation of AFPGen’s operations will only be approved by the IC after it has settled al its obligations to clients and the creditors.

According to AFPGen’s 2018 annual report, it has issued 65,568 non-life insurance policies, the bulk of which were for migrant workers and motor cars.

Established in 1977, the company caters to the non-life insurance needs of the country’s military and police organizations. — BML

LRT-1 operator’s ISO certifications renewed

LIGHT Rail Manila Corp. (LRMC), the operator of Light Rail Transit Line 1 (LRT-1), has renewed two ISO certifications of its compliance to international standards in quality management and environmental management systems.

The company said in a statement Tuesday it received an ISO 9001:2015 and ISO 14001:2015 certification from third-party auditor TUV Rheinland.

Receiving an ISO 9001:2015 certification means the company was able to “consistently provide products and services that meet…statutory and regulatory requirements.”

Meanwhile, an ISO 14001:2015 certification means that a company promotes systems that focus on enhancement of environmental performance, fulfillment of compliance obligations and achievement of environmental objectives.

“We are happy to share this achievement because it is a result of our teamwork and commitment to quality. LRMC is committed to pursuing initiatives to modernize and improve LRT-1…,” LRMC President and Chief Executive Officer Juan F. Alfonso was quoted as saying in the statement.

Specifically, LRMC said it was commended for improved passenger queueing, shorter train headway, reduced cycle time and increased daily trips.

“With the privatization of the country’s oldest railway system, we were able to improve the safety, security and cleanliness of the stations as well as the quality and efficiency of services offered to customers,” LRMC Director for Health Safety Environment and Quality (HSEQ) Andrea Mellind C. Madrid said.

LRMC holds the 32-year concession to operate, maintain and develop LRT-1, which it took over in September 2015.

The company is a consortium of Ayala Corp.’s AC Infrastructure Holdings Corp., Metro Pacific Investments Corp.’s (MPIC) Metro Pacific Light Rail Corp. and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.

MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group. — Denise A. Valdez

Record-high dollar reserve level sustainable, seen rising further

THE COUNTRY’S record-high reserves are expected to climb further due to remittances.

THE ALL-TIME HIGH gross international reserves (GIR) posted as of September is sustainable and will continue to rise as remittances are expected to pour in ahead of the holiday season, officials said on Tuesday.

Asked whether the GIR level — which hit $86.163 billion as of September — will be sustainable, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno told reporters on the sidelines of The Asset’s Philippine Forum: “Yes. Hindi pa nga tayo December e. Nagpi-pick up ‘yun kasi nagpapadala ng mga remittances ‘yung mga OFWs (overseas Filipino workers). (We haven’t even reached December yet. GIR will pick up by then because of the remittances sent by OFWs).”

During the same event, Department of Finance Secretary Carlos G. Dominguez said the all-time high figure is a positive development.

“It’s good. Better than the other way. This will go along to make people confident that the currency is stable,” Mr. Dominguez said.

“Parang (It’s like) that’s our first line of defense as a buffer. So anybody who speculates against the peso, they should consider that,” Mr. Diokno told reporters.

The country’s foreign reserves strengthened to a record high at end-September as the national government’s bigger foreign currency deposits offset payments for servicing foreign exchange obligations, the BSP reported on Monday.

The end-September GIR was equivalent to 7.5 months worth of imports of goods and payment of services and primary income, the central bank said.

It was also equivalent to 5.4 times external debt falling due within 12 months and 3.9 times such short-term debt plus principal payments on medium- and long-term loans of the public and private sectors falling due within 12 months.

“The more than ample store of GIR will help build credibility in the BSP’s ability to provide dollar liquidity in times of need,” ING Bank NV-Manila Branch senior economist Nicholas Antonio O. Mapa said in an email. “The current level of GIR is more than five times our short term foreign currency debt, which should serve notice against would be currency speculators.” — L.W.T. Noble

Arts & Culture (10/09/19)

Recycling trash into art

THE Goethe-Institut in partnership with IFA (Institut für Auslandsbeziehungen), and the Vargas Museum in UP Diliman presents Pure Gold — Upcycled! Upgraded!, an exhibition that highlights re- and upcycling in design. Composed of 76 pieces by 53 designers from seven regions in the world, Pure Gold is currently touring the world and will count Manila as one of its stops this year. The exhibit with the theme of upcycling — the re-use of raw materials that have already been processed to create new objects of greater value — aims to raise awareness of alternative production techniques, while simultaneously pointing up contemporary European and non-European design developments. The exhibit opens on Oct. 23, 6 p.m., with its curator Volker Albus present. Admission is free for the opening. On Oct. 24, Mr. Albus will give a talk about upcycling in Europe and about Pure Gold followed by a curator walkthrough of the exhibit from 10 to 11:30 a.m. Interested participants can contact James Tana at +63915-817-5314. The exhibit will be on public view from Oct. 24 to Nov. 23, 9 a.m. to 5 p.m., at the Vargas Museum, Roxas Avenue, University of the Philippines Diliman Campus, Diliman, Quezon City. The admission fee is P30, with discounts for students, seniors and PWDs.

West Gallery’s current exhibitions

WEST GALLERY has several exhibit which are ongoing until Oct. 26. There is Fractured Perfection, featuring works by brothers Olan and Manok Ventura, which looks at the myriad ways in which the Internet and digital technology affect our visual experience and encounter of images, their circulation and reproduction. All their pieces are derived from the canons of the Renaissance and Baroque. There is also Submerged Narratives, in which artist Keiye Miranda returns to the theme of water; and Small Doses of Palatable Poison in which Efren Madlangsakay paints variations of this modern-day addiction to sugar as ice-cold, fizzy drink, caramelized popcorn or soft, gummy bears. These are interspersed with cross-sections and close-ups of body parts, of the organs used to consume and partake of these food items. Meanwhile, the gallery’s existing seven-digit landline numbers with area code 02 will be migrating to the new eight-digit landline numbers. The gallery’s new landline numbers are: +63 2 3411-0336 and +63 2 3411-9221.

WSK X: WSK Festival of the Recently Possible

A DECADE-OLD platform that aims to advance artistic positions reflecting on the impact of new technologies on people and culture, WSK is celebrating the 10th edition of Festival of the Recently Possible with a diverse set of events that showcase the cross-sectional relationships between art, sound, and technology with artists from across the globe, from Oct. 15 to 28 at multiple locations in Manila. This year, WSK X partners with Nusasonic, a creative collaboration between YES NO KLUB (Yogyakarta), WSK Festival of The Recently Possible (Manila), Playfreely/BlackKaji (Singapore), CTM Festival (Berlin). Nusasonic is a multi-year project that will review a broad spectrum of experimental sound and music cultures in Southeast Asia, enabling dialogue not only within the region but also with Europe. Nusasonic is an initiative of Goethe-Institut Southeast Asia. WSK X will kick off with Stay: Sine Wave Orchestra Exhibition, a participatory installation open to the public, which will be held at the Areté on Oct. 15. WSK X will be holding a series of concerts, residencies, hacklabs, exhibitions, workshops, forums, and open art science projects. For details visit website wsk.io and www.facebook.com/WSK.io/.

How PSEi member stocks performed — October 8, 2019

Here’s a quick glance at how PSEi stocks fared on Tuesday, October 8, 2019.

 

Domestic spending seen as key to surviving trade war fallout

THE Philippines is starting to feel the impact of the US-China trade war but can manage the turbulence by increasing domestic spending, Finance Secretary Carlos G. Dominguez III said.

Speaking to reporters on the sidelines of The Asset Philippine Forum in Taguig, Mr. Dominguez said demand for Philippine products is falling due to the trade dispute between Washington and Beijing.

“It’s unfortunate that the trade war is creating a drop in demand for our products… People are cautious about making investments because they don’t know where they’re going. Our biggest strategy is to accelerate our domestic spending but (maintaining a) reasonable deficit,” he said.

When asked about the pace of government spending this year, he said the first six months’ performance has been “lousy,” due to the delay in the 2019 budget, which dampened disbursements, as did the spending ban that came with the midterm elections.

“But as I said, we are not driving a Ferrari. When we step on the gas, it doesn’t go from 0-60 in three seconds. It takes a bit of time for bureaucracy to get going, but it’s on the right track,” he said, adding that National Treasurer has informed him that government spending picked up in recent months.

National Treasurer Rosalia V. De Leon also told reporters yesterday of the improvements in government spending in recent months.

“It’s really been picking up in the past two months. So even for October, first week we’ve seen very high disbursements, so if this trend continues, then we see… the deficit levels (heading in the direction of) 3.2%” as a proportion of gross domestic product (GDP), Ms. De Leon said, adding that the Treasury has seen “double-digit growth” in spending in September and early October.

According to the Treasury, expenditure rose 8.78% year-on-year to P282.2 billion in August, after a 13.61% climb in primary expenditure, which excludes interest payments.

In his keynote speech at the forum, Mr. Dominguez said that the government’s three-pronged strategy focuses on “prudent fiscal and stable monetary policy” to bolster growth, while raising spending on infrastructure modernization and human capital development, and implementing the remaining packages of the Comprehensive Tax Reform Program (CTRP).

Mr. Dominguez said that the Philippines has obtained some investment deals as a result of President Rodrigo R. Duterte’s visit to Russia, although he provided no details.

“We don’t know exactly how much the investment deals are but they’re quite significant. And you have to remember that we don’t really have a big relationship with Russia and I think the trip of the President opened up avenues for increased contact with the Russians like tourism investment. They’re very interested to look at our infrastructure projects, particularly in power,” Mr. Dominguez said. — Luz Wendy T. Noble

DoF says faster corporate tax reduction a risk to credit rating

THE Department of Finance (DoF) has warned against reducing corporate income taxes “too quickly” to avoid worsening the deficit and increasing the risk of a credit rating downgrade.

Finance Secretary Carlos G. Dominguez III said the current proposal to reduce corporate taxes over 10 years is a “long period” which is necessary if the government is to maintain the deficit at a little over 3% of Gross Domestic Product.

“I agree that it’s a long period but we have a choice here… If we drop the rates too quickly, we are going to balloon our deficit and ballooning our deficit is going to probably mean a credit downgrade,” Mr. Dominguez said during the The Asset’s 14th Philippine Forum in Taguig City yesterday, when asked about the possibility of shortening the time frame for reducing corporate income tax.

“If a credit downgrade happens, everybody’s interest rate goes up so what’s the use of it?” he said.

Under the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill, the corporate income tax rate will be gradually reduced to 20% by 2029 from the current 30% while removing redundant tax incentives.

He also said that streamlining incentives will not drive away foreign investors since incentives are only part of the decision-making process.

“I believe that when foreigners make investments they want to see stability in policy… fairness of the legal system they want to see safety of their personnel, they want to see improvements in the infrastructure and lower cost and finally, they want to see what incentives there are,” he said.

Mr. Dominguez said studies by several multilateral banks showed that investors do consider tax perks but they will not be the sole basis for making an investment.

CITIRA has hurdled final reading at the House of Representatives while its counterpart legislation is pending at the Senate.

Meanwhile, he clarified that the government is not against the Philippine Offshore Gaming Operator (POGO) industry but is mainly interested in its compliance with tax law.

“The law says, everybody who works in the Philippines whether they are foreigners or domestic workers have to pay taxes… Follow the law, withhold the taxes as required by law… If I were the landlord, pay your taxes or else you’re going to be shut down,” he said. — Beatrice M. Laforga

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