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More and higher-quality jobs in July

LATEST LABOR data show more Filipinos have entered the labor force as well as a decline in the ranks of those employed but who were seeking more work.

According to the Philippine Statistics Authority, preliminary results of the July 2019 round of the Labor Force Survey showed the country’s unemployment rate at 5.4%, steady from the figure in the same round last year.

This is equivalent to 2.43 million jobless Filipinos compared to 2.33 million in July 2018.

The increase in the number of unemployed despite the steady unemployment rate can be explained by the increase in the labor force participation rate (LFPR), which is defined as the percentage of the total number of persons in the labor force to the total population 15 years old and over.

In July, the country’s LFPR stood at 62.1%, more than 60.1% a year ago. This is equivalent to 45.38 million Filipinos in the labor force out of the 73.13 million Filipinos 15 years and older.

Similarly, the employment rate remained steady at 94.6% in July albeit the number of employed Filipinos increased to 42.95 million from 40.65 million previously.

Meanwhile, the underemployment rate – the proportion of those already working, but still looking for more work or longer working hours – improved to 13.9% from 17.2%.

By economic sector, services made up the majority of the employed population at 57.8%, more than 57.5% in the same period last year.

Meanwhile, employment share for the agriculture sector edged up to 23.5% from 23.1%.

On the other hand, the employment share for the industry sector went down to 18.7% from 19.4%.

Factory output declined for eighth straight month in July

Manufacturing output once again declined in July, extending its contracting streak to eight straight months, the government reported this morning.

Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries, showed factory output — as measured by the volume of production index — declined by 8.1% year on year in July, slower than June’s revised 11.6% contraction but a reversal from last year’s 10.1% growth.

Manufacturing production has been registering a decline since December 2018.

“The slowdown was mainly due to the annual decreases in six major industry groups with petroleum products and furniture and fixtures registering the highest annual decrements of 75.8% and 24.8%, respectively,” the PSA said in a statement.

In comparison, the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) improved that month to 52.1 compared to June’s 51.3 and July 2018’s 50.9, marking the strongest improvement in six months or the 52.3 logged in January.

A reading above 50 signals improvement in business conditions from the preceding month, while a score below that point indicates deterioration.

Average capacity utilization — the extent by which industry resources are used in the production of goods — was estimated at 84.3%. Twelve of the 20 sectors registered capacity utilization rates of at least 80%. — Mark T. Amoguis

August Inflation slowest in three years

Inflation softened at its slowest pace in three years in August, the Philippine Statistics Authority reported this morning.

Headline inflation, which denotes the general increase in prices of widely used goods, was at 1.7% in August, slower than the 2.4% print in July and 6.4% in August 2018.

The August reading matched the 1.7% logged in September 2016 and was the slowest in three years or since the 1.3% inflation rate in August 2016.

Last month’s inflation fell at the midpoint of the Bangko Sentral ng Pilipinas’ (BSP) 1.3%-2.1% forecast for the month. It was, however, lower than the 1.8% median estimate in BusinessWorld‘s poll of 12 economists late last week.

Year-to-date, inflation is at 3%, which is within the BSP’s 2-4% target range for 2019, albeit still above the BSP’s 2.6% forecast for the entire year.

Core inflation, which strips commodities prone to volatile price swings, cooled to 2.9% in August from 3.2% in July and 4.8% in August 2018. — Mark T. Amoguis

Nickel output growth seen ‘subdued’

PHILIPPINE production of nickel is expected to continue “modest growth” in the next few years as a negative policy environment and falling ore grade offsets the effect of mines restarting after a 2017 crackdown on environment law violations, Fitch Solutions Macro Research said in a Sept. 3 industry trend analysis e-mailed to journalists on Wednesday.

“We expect the Philippines to see modest growth in nickel mine production in 2019 due to restarting mines and gains from current operations,” Fitch Solutions said in its note, titled: “Philippine nickel mining outlook showing upside potential.”

At the same time, it clarified: “We maintain our subdued nickel mining growth outlook for the Philippines over the medium to long term, underpinned by the country’s stringent environmental regulations and policy uncertainty that will undermine investment into the Philippine’s thin nickel project pipeline.”

The Philippines — which is the world’s second biggest supplier, next to Indonesia, of the metal that is used to make stainless steel and which is estimated to account for a fifth of global mined nickel supply — saw “declining nickel mine production over the past few years,” with volume falling to 340,000 tons last year from 554,000 tons in 2015, Fitch Solutions noted, citing data from the United States United States Geological Survey.

Fitch Solutions particularly blamed the government’s environmental crackdown on mining operations in 2017.

“Following a round of mine audits in 2018 to determine which operations should be allowed to continue, many of the operations had passed the set standards,” the note read.

“As mines begin to restart over 2019, we believe there is room for an aggregate increase in production when factoring in the increased production at current operations already.”

It cited data from the Department of Environment and Natural Resources’ (DENR) Mines and Geosciences Bureau showing that nickel ore production edged up by 2.5% year-on-year to 2.969 million dry metric tons in the first quarter.

Fitch Solutions noted that major producer Nickel Asia Corp.grew ore sale volume by about 2.1% annually to 9.08 million wet metric tons last semester on output increases at its mines in Cagdianao, Dinagat Islands and Hinatuan, Surigao del Sur that offset declines at its other operations.

At the same time, DMCI Mining Corp.’s Zambales Diversified Metals Corp. is still awaiting DENR’s green light to resume operations “despite the firm stating it has met the necessary requirements to do so,” according to the note.

“Over the coming years, we are maintaining a subdued growth forecast, held down by declining ore-grades and strict environmental regulations that could result in mine closures. Despite some mines receiving clearance to re-open this year, since 2016, a number of mining operations, including nickel, have been ordered to shut down due to environmental concerns, which has kept production growth subdued,” Fitch Solutions said.

The industry looks forward to lifting of a moratorium on new permits that has been in place since 2012, but that will happen only after enactment of a new fiscal regime that will give the government a bigger share in mining revenues. Such a measure had been proposed in the 16th and 17th Congresses but failed to bag approval. It has been reintroduced in the current 18th Congress that began last July.

“We expect the country’s path of increasingly strict policies towards miners to undermine investment potential into projects from new players, thus keeping growth subdued,” Fitch Solutions said, adding that “declining ore-grades at mines will continue to strain growth.”

One development that could spur growth of Philippine nickel production is Indonesia’s plan — announced last Monday — to stop nickel ore exports from January 1, 2020, two years earlier than first intended, as it pushes local producers to process more ore at home.

“We believe nickel smelters in China, which currently import the majority of their ore from Indonesia, will likely look to the Philippines as an alternative source of supply, due to its proximity and substantial nickel mining capacity,” Fitch Solutions said.

“This sudden increase in demand could lead to an acceleration of nickel mine development and increased investment into current operational projects, aimed at increasing production in 2020.” — Vincent M. P. Galang

Metro Pacific hospital unit plans P83-B IPO

METRO PACIFIC Hospital Holdings, Inc. (MPHHI) is embarking on an P83.3-billion maiden share sale to expand its hospital network and as part of parent Metro Pacific Investments Corp.’s (MPIC) efforts to sell down assets.

In a registration statement filed with the Securities and Exchange Commission (SEC) on Wednesday, the company said it intends to offer up to 417.09 million common shares, consisting of up to 35.82 million new common shares as part of the primary offer, priced at a maximum of P182 each.

The remaining 381.27 million existing common shares will be sold by selling shareholder, MPIC. This will include up to 40.771 million shares for the over-allotment option.

The final offer price will be announced by Nov. 14, depending on when the firm secures the green light from the SEC and the Philippine Stock Exchange.

This will be followed by the offer period from Nov. 18 to 22. Its shares are expected to be listed on Dec. 2 under the ticker HOSP.

MPHHI expects P5.95 billion in net proceeds from the primary offer, about 67% of which will be spent on additional hospitals, cancer centers, clinics and new health care businesses. Around 24% will go to additional investments in its existing hospitals, while the remaining eight percent will be used for general corporate purposes.

The company also expects up to P75.1 billion in net proceeds from the secondary offer, assuming the over-allotment option is fully exercised. MPHHI will not get anything from the sale of MPIC’s shares.

MPIC disclosed last May plans to unload a portion of its 85.6% stake in the hospital business to reduce debt, as its aggressive expansion over the years have caused their liabilities to grow substantially.

The infrastructure conglomerate has P215 billion in interest-bearing debt that will mature towards 2035. Of this amount, P11.61 billion will mature that year.

Foreign firms have reportedly expressed interest to buy a stake in MPHHI as well, such as buyout firms KKR, Blackstone and CVC, according to a Reuters report.

MPHHI hired UBS AG Singapore Branch to be sole global coordinator for the transaction. It will join Merrill Lynch (Singapore) Pte. Ltd., CLSA Limited, and J.P. Morgan Securities plc as joint international bookrunners.

First Metro Investment Corp. has been appointed lead domestic coordinator. The company will work with BDO Capital & Investment Corp and BPI Capital Corp as joint domestic lead underwriters.

MPHHI operates 14 hospitals with more than 3,200 beds across the country, including Makati Medical Center and Cardinal Santos Medical Center.

It joins the roster of firms that plans to go public this year. On Tuesday, electronics manufacturer Cal-Comp Technology (Philippines), Inc also filed for a P10.68-billion IPO. Axelum Resources Corp. (P7.695 billion) and AllHome Corp (P20.7 billion) have also been cleared for their maiden share offerings this October.

MPIC is one of three Philippine units of Hong Kong-based 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 interest in BusinessWorld through the Philippine Star Group, which it controls. — Arra B. Francia

SEC tells listed firms to submit policies on related party transactions

By Arra B. Francia
Senior Reporter

THE SECURITIES and Exchange Commission (SEC) has ordered listed companies to submit their policies on “material” related party transactions (RPT) by Oct. 28, according to a notice posted on its Web site.

“This is based on the memorandum circular on material related party transactions before,” SEC Commissioner Kelvin Lester K. Lee said in a mobile phone message.

The country’s corporate regulator last April released SEC Memorandum Circular No. 10, Series of 2019, which requires all listed firms to adopt a group-wide material RPT Policy.

Meanwhile, companies listed after the memorandum circular was issued will be given six months from their listing date to submit the report.

The RPT policy must then be posted on the company’s Web site within five days after it is submitted to the SEC.

“This particular requirement is a welcome development for us. The idea here is to strengthen further the corporate governance structure of listed companies and at the same time provide more transparency on transactions between and among related parties,” PwC Philippines Assurance Partner Zaldy D. Aguirre said in a telephone interview yesterday.

The policy should include identification of related parties, coverage of the RPT policy, identification and prevention or management of potential or actual conflict of interest that may arise, and whistle blowing system.

Under the circular, RPTs are defined as “transfer of resources, services or obligations between a reporting… and a related party, regardless of whether a price is charged.”

Transactions are considered material when they amount to at least 10% of a company’s total assets. The company’s board is allowed to lower the threshold should it determine that the RPT could cause damage to the company and its shareholders.

Related parties pertain to listed firms’ directors, officers, substantial shareholders, as well as their spouses and relatives within fourth civil degree of consanguinity or affinity.

Related parties also include a “company’s subsidiaries, affiliates, and any party — including their subsidiaries, affiliates and special purpose entities — where the company exerts direct or indirect control or which exerts direct or indirect control over the company.”

Mr. Aguirre added that a RPT policy protects investors.

“If you are an investor, you would know how the transaction is done, whether they are at arm’s length… in other words there’s no special accommodations or discounts given to any of the parties involved,” he explained.

“So, in a way, you will have that benefit of knowing and ascertaining for yourself as an investor whether the company is actually acting on the best interest of the investors.”

The SEC will impose a basic penalty of P10,000 should a listed company fail to submit its RPT Policy, in addition to a monthly penalty of P1,000 until such time that the company submits its report.

The commission said the policy requirement will help improve the Philippines’ performance in the World Bank Group’s annual Ease of Doing Business survey, particularly on the indicator of Protecting Minority Investors.

Forum: Reforms key to attracting investments

THE PHILIPPINES has been catching the eye of prospective foreign investors due to tax reforms pushed by the administration of President Rodrigo R. Duterte, but more needs to be done to make it easier to do business in the country according to speakers at a forum on Wednesday.

Speaking at the Ayala-FINEX (Financial Executives Institute of the Philippines) Summit 2019 at Fairmont Makati, Stephen Au Yeung, an EY Advisory Practice Partner, said that he observed clients growing more curious about the Philippine market.

“A lot of companies consider the effective tax rate they need to pay… Having an incentive from a tax perspective will be able to attract companies to invest in a new economy,” Mr. Au Yeung said.

Amid concerns about Metro Manila’s worsening congestion, he added that the Philippine government can study Indonesia’s effort to designate a new national capital on Borneo island. He noted that development of more than one megacity in a country has been a key trend not only in Asia but also elsewhere.

“Actually, we do see that if we only rely on one megacity, [it] will actually slow down growth. So definitely, I think it should be something to consider…” Mr. Au Yeung explained.

Last week, Indonesian President Jokowi Widodo bared his administration’s $33-billion plan to move the national capital to Kalimantan in Borneo, noting that Jakarta has become “too heavy”, with some of its areas sinking as much as 20 centimeters per year. Mr. Widodo said, however, that Jakarta will remain a key commercial and financial center.

Mr. Au Yeung urged businesses to be more innovative as they face evolving market conditions. He said the finance industry will be more digitally driven, embracing data analytics and blockchain increasingly for its businesses.

HELPING START-UPS
Minette B. Navarrete, president of Ayala-owned venture capital firm Kickstart Ventures, Inc., cited opportunities from Southeast Asian growth, which is still among the fastest in the world.

Seven years after it was spun out of Globe Telecom, Inc., Ms. Navarrete said venture capital firm has invested in 42 start-ups in seven countries.

While many are in the Philippines, the others are in the United States, Canada, Singapore and Malaysia.

She said Kickstart Ventures has already witnessed its first successful startup exit, with mobile wallet Coins.ph acquired by Indonesian ride-hailing app GoJek after a three-year incubation.

Like Mr. Yeung, Ms. Navarrete cited public policy as a key factor affecting the Philippine startup ecosystem which she said is still in its nascent stage.

“In Singapore, you get a company set up in 30 minutes,” she said, comparing it to the Philippines where businesses face a registration process that takes around three months to complete.

Ms. Navarrete said that she has met with some government officials to urge them to make business policies easier.

Compared to Indonesia, which clinched $407 million worth of startup deals in 2018 according to startup news Web site e27, Philippine startups booked $300 million worth of deals last year.

Ms. Navarrete observed that fintechs are taking a big chunk of startup funds in Southeast Asia. “Frequently in emerging markets, it’s because it’s a payments problem. Not enough people have credit cards so that shows up quite a lot,” she explained, noting that startups focused on other financial services like loans and insurance are also attracting investors and are beginning to show up.

She further mentioned that healthtech startups are gaining traction especially in the Philippines and in China.

The talks were followed by a panel discussion with some industry leaders such as Antonio G. De Rosas, president and chief executive officer (CEO) of Pru Life UK; Antono C. Moncupa Jr., vice-chairman and CEO at EastWest Bank; Francis Giles B. Puno, president at First Gen Corp. and Jaime E. Ysmael, president and CEO of OCLP Holdings.

On its fourth installment, the Ayala-Finex Summit went with the theme “Innovating Businesses for a Better Tomorrow”, with discussions on how businesses could keep up and leverage technology to improve their operations. — Luz Wendy T. Noble

MPIC unit bags Dumaguete deal

A WATER unit of Metro Pacific Investments Corp. (MPIC) is partnering with the Dumaguete City Water District (DCWD) to rehabilitate and expand its existing facilities for P1.62 billion.

In a stock filing Wednesday, MPIC said MetroPac Water Investments Corp. (MPW) has signed a joint venture agreement with DCWD for the rehabilitation, operation, maintenance, and expansion of the latter’s existing water distribution system and the development of wastewater facilities.

MPIC pegged the initial equity investment at P700 million. The two parties will establish a joint venture corporation to implement the 25-year project. It will also be given the right to bill and collect tariff for the water supply and wastewater services provided to customers in DCWD’s service area.

DCWD supplies 38 million liters of water per day (MLD) of potable water to over 32,000 customers in Dumaguete City and parts of the Municipalities of Valencia, Sibulan, and Bacong. The population of DCWD’s service area is about 165,984, and is seen to rise to more than 242,000 by 2044.

This project will be added to MPW’s installed capacity of up to 393 MLD in the Philippines and up to 660 MLD in Vietnam. These projects have yet to be completed.

MPW also said it has another 430 MLD of projects under negotiation and awaiting final award in the country.

While MPW’s contribution to MPIC’s earnings is still immaterial, it expects to become a major profit contributor once they are completed.

So far, MPW has started operations for Metro Iloilo Water, its joint venture with city’s water district, last July. The 25-year project aims to improve the delivery of treated water in the service area, reduce non-revenue water to 35% from 50%, and upgrade the billing and collection systems.

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

The infrastructure conglomerate’s net income attributable to the parent dropped 9% to P8.11 billion in the first half of 2019, amid an 11% uptick in gross revenues to P44.62 billion.

Shares in MPIC rose 1.84% or nine centavos to close at P4.99 each at the stock exchange on Wednesday. — Arra B. Francia

Urban crocodile

HUMANS are arguably the world’s most successful predator, occupying a space atop the food chain. On this pedestal, we have been made free to consume every type of animal there is.

In the wild, of course, it’s a different story. The savannah has the lion, the seas have the shark, and in the swamps and marshlands, the crocodile rules the roost, feasting on their kill.

The innocuously named Urban Café, found in many Wilcon Depot branches around the city, gives you a taste of what it is to be a real apex predator — imagine feasting on the king of the swamps, solidifying your place in nature — and at affordable prices too: a steak costs about P250, though a steak was not available during BusinessWorld’s tasting at the Libis branch, because the crocodiles bred for the purpose had not yielded tails big enough for the steak.

Rest assured that the crocodiles have not been caught in the wild, and have been instead been bred in a farm, thus ensuring their sustainability, and are all compliant with environmental and food regulations. Winnie Arceo, Operations Manager for Urban Café and its sister, Hero Deli (which sells the crocodile meat as sausages and other deli meats) says that the crocodile meats are byproducts of the very lucrative crocodile leather industry.

Okay, so that might raise some eyebrows, but a report from the International Union for Conservation of Nature (IUCN) says, “The sustainable use of crocodile skins is highly responsible and one of the greatest conservation success stories on Earth.” The report argues that farming actually helps in conserving species, because the animals are cared for thanks to their economic value in places where they would normally be seen as a danger or a nuisance.

Anyway, back to the food. BusinessWorld had the Salisbury steak, almost comforting with the gravy laced with black pepper, and had an excellent, silky texture, removing all the toughness associated with the reptile. Meanwhile, the crocodile sisig was very fragrant and had a robust, solid taste — by this I mean that the flavor, akin to pork, perhaps, was assertive, but never overpowering.

Ms. Arceo agrees, saying that in her experience, the meat tastes either like pork or chicken. “It depends on the dish that you’re cooking,” she said. “The beauty of croc meat is, it can easily blend with any dish that you would prepare.”

She also points to the health benefits of crocodile meat: literally as she pointed at the Urban Café signage where bullet points listing the health benefits are printed. “Croc meat is a good source of protein. The fat of crocodiles are rich in Omega 3, 6, and 9, which is good for the heart. Low cholesterol, low calories,” she said. Traditional Chinese medicine also believes that crocodile meat can be used for respiratory ailments and as an aphrodisiac.

Asked about why crocodile meat can still be seen as taboo, Ms. Arceo said, “It’s our culture. In Pampanga, they eat crickets… to them, it’s okay. In more urbanized places, it’s just beef, pork, chicken. I think it’s a lack of knowledge about the quality of meat alternatives.”

Urban Café can be found at the Wilcon branches in Pasong Tamo, Quirino Ave., Antipolo, Commonwealth, Alabang-Zapote Road, Alabang Filinvest, Balintawak, and Libis. — Joseph L. Garcia

CHP seeks shareholder approval for capital hike

By Arra B. Francia, Senior Reporter

CEMEX Holdings Philippines, Inc. (CHP) looks to secure shareholder approval to increase its authorized capital stock next month, amid plans to raise up to $250 million through a stock rights offering.

In a disclosure to the stock exchange Wednesday, the listed cement manufacturer said it will conduct a special stockholders’ meeting on Oct. 16 to obtain approval for the authorized capital stock increase.

CHP seeks to raise its authorized capital stock to P18.310 billion consisting of 18.310 billion shares with a par value of P1 each, from the current P5.195 billion.

The capital hike will allow the firm to hold a stock rights offering of up to $250 million. Proceeds from the transaction will be used to fund the expansion of its Solid Cement Plant in Antipolo, Rizal, as well as to improve its capital structure and provide flexibility to its balance sheet.

“Given CHP is currently operating at already high utilization levels, the Solid Cement Plant expansion is especially critical in allowing CHP to maintain its market position and continue to benefit from the Philippines’ long-term favorable demand outlook,” the company said.

The company said it will spend a total of $235 million to boost Solid Cement plant’s capacity by 1.5 million metric tons (MT), from the current 1.9 million MT. This will increase the firm’s overall capacity by 26%.

It targets to start operations for the new production line by the fourth quarter of 2020, with the products to be sold in the National Capital Region and Southern Luzon.

“The expectation is that the Solid Cement plant should be free-cash-flow accretive approximately during the second half of 2021.”

Analysts previously expressed concern over CHP’s stock rights offer given its dilutive effect on shareholders.

“CHP would also highlight that the proposed rights offering would be fair, transparent, and equitable to all shareholders,” the company said, adding that it will secure the necessary approvals from both the Securities and Exchange Commission and the Philippine Stock Exchange.

The company swung back to profitability in the first half of 2019 with an attributable profit of P802.32 million, against an attributable loss of P584.71 million in the same period a year ago. Gross revenues also improved to P12.356 billion, 4% higher year on year.

CHP is the local unit of Mexican cement and construction materials company Cemex S.A.B. de C.V. Its cement products are sold under three brands, namely Island and Rizal for Luzon, and APO for the Visayas and Mindanao.

Shares in CHP fell 7.67% or 23 centavos to close at P2.77 each at the stock exchange on Wednesday.

Franco-Asian flavors at Solaire

SCALLOP Har Gow appetizer

CONTINUING its Culinary Masters Series, Solaire Resort and Casino brings Singapore’s top celebrity chef Justin Quek and his signature Franco-Asian dishes to the restaurants Red Lantern and Lucky Noodles.

“The Culinary Masters Series is another example of providing the best experience to our guests that is distinctly Solaire. By bringing in renowned and internationally decorated chefs from all parts of the globe, Solaire gets to share the fascinating ingenuity and creativity that are behind some of the best gastronomic creations that have garnered praise and recognition, and at the same time, widen the culinary horizon of our patrons,” said Knut Becker, Solaire’s Vice-President for Food and Beverage, in a press release. Mr. Quek honed his mastery of French culinary techniques while training in Paris for a year from 1991 to 1992. He then returned to Singapore and was appointed as the personal chef of the French ambassador to Singapore. Mr. Quek also cooked birthday dinners for the late Singaporean leader Lee Kuan Yew for 21 years beginning in 1993. He has previously opened restaurant businesses in Shanghai, China and Taiwan. In 2010, Mr. Quek returned to Singapore and established Sky on 57, a 240-seat fine-dining restaurant at Marina Bay Sands.

Prior to coming to the Philippines, Mr. Quek gathered insights from his Filipino colleagues about Pinoy food preferences. With this information in mind, the chef decided to introduce a mix of meat, seafood, and good sauces.

“When I cook something, I don’t want to spoil the product. It should taste the natural taste,” Mr. Quek told BusinessWorld shortly after the media lunch at Red Lantern in Solaire on Sept. 3.

Mr. Quek’s culinary creations will be available in curated menus, as well as special lunch and dinner offers on Sept. 7 and 8.

Red Lantern will serve a special dim sum lunch buffet featuring Mr. Quek’s Ngoh Hiang or prawns and pork fritter rolls, Lap Mei Fan with black truffle in lotus leaves, and the chef’s trademark duck foie gras Xiao Long Bao.

The restaurant will also offer a week-long premium à la carte menu that includes Scallop and uni Har Gow in crab bisque, mushroom cappuccino soup, wok-fried Wagyu beef short ribs, and a baked pineapple tart with salted Gula and Java ice cream.

Lucky Noodles will also have selected items from Mr. Quek’s roster of signature dishes on its à la carte menu for the entire week until Sept. 8.

As for his culinary philosophy, Mr. Quek values simplicity. “The food that you eat, you must be able to understand,” he said, adding that he is not a fan of “complicated things.”

“You want to serve food that people could eat every day, and people would remember,” he said.

For inquiries and reservations, call 888-8888 or e-mail restaurantevents@solaireresort.com. — Michelle Anne P. Soliman

First Gen looking to expand reach of FSRU to Visayas, Mindanao

FIRST GEN Corp. is looking to expand the reach of its planned floating storage regasification unit (FSRU) for natural gas to the provinces, including those in the Visayas and Mindanao, a company official said on Wednesday.

“We want to make sure that we can walk before we run. We’ve been focusing on first of all, working on the base case. Now we’re very focused on the early introduction of LNG (liquefied natural gas) and in parallel, we’re looking at how we can already start to bring LNG, in a small scale, for the provinces,” Jonathan C. Russell, First Gen executive vice-president and chief commercial officer, told reporters on the sidelines of Powertrends 2019 at the SMX Convention Center in Pasay City.

He said the move includes construction of power plants, providing the means to deliver LNG in smaller scale vessels to the islands, and even road tanker deliveries within the country’s main island of Luzon where the First Gen Clean Energy Complex is located.

In May, First Gen broke ground on its planned LNG import terminal project in the same complex in Batangas City. It followed the signing in December 2018 of a joint development agreement with Tokyo Gas Co., Ltd., which is taking a 20% participating interest in the project.

On Monday, the Lopez-led company announced the selection of Japan’s JGC Corp. as the project’s engineering, procurement and construction (EPC) contractor. It said the immediate focus of the partners is to complete a detailed study on modifications that can be made to the group’s existing jetty that would allow the facility to receive large- and small-scale LNG vessels, and to continue to receive liquid fuel.

First Gen will then look to start building the modified jetty “as soon as possible.” The early completion of this work will allow bringing in an FSRU on an interim basis during the Duterte administration.

The FSRU or LNG storage ship has an onboard regasification plant capable of returning the liquefied fuel back into a gaseous state. The gas can then be supplied directly to some or all of the company’s existing power plants.

Mr. Russell placed the capacity of the FSRU “probably in the range of 170,000 cubic meters, that’s the standard.”

“The beauty of LNG is it’s modular so it can be scaled in different sizes. But in the islands the demand is a bit less,” he said, adding that the capacity of a power plant could range from 20 megawatts (MW) to 50 MW.

“But it really depends on what the demand is. There’s no point trying to force a particular plant on a particular location. All you need to do is identify what the need is, and then build something that is suitable for that particular location, which can then be scaled so you can always increase its capacity,” he said.

With the proposed FSRU, First Gen expects to receive LNG as early as 2021 or way ahead of the expiration in 2024 of the Malampaya contracts, the country’s only source of natural gas for the 3,200-MW power plants that run on that fuel.

“It will take a bit longer for the plants,” he said, comparing the completion to the 2021 entry of imported LNG. “It’s something we need to look at a bit further.”

Asked whether the reach could go as far as the Visayas and Mindanao, he said: “I believe so, yes. I think there’s a need throughout the Philippines, which currently doesn’t exist.”

“If you want to build power plants in the Visayas today, natural gas is not an option. But with small-scale LNG it now becomes an option that doesn’t exist before,” he said.

Mr. Russell said First Gen is currently negotiating for short-term LNG supply.

“We’re not ruling anybody out. We’re talking to all of the main LNG supply companies, both portfolio players, national oil companies and even traders. We’re just trying to find which of those entities can provide the supply which is sort of most fitting for the Philippines’ needs as a new buyer, especially maximizing the flexibility,” he said. — Victor V. Saulon

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