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The Paris Grand Chess Tour

Paris leg, Grand Chess Tour
Paris, France
July 27–August 2, 2019

Final Standings, Rapid

1. Maxime Vachier-Lagrave, 6.5/9, 2. Alexander Grischuk, 6.0/90, 3-4. Ian Nepomniachtchi, Viswanathan Anand, 5.5/9 5-6. Jan-Krzysztof Duda, Fabiano Caruana, 4.5/9, 7. Hikaru Nakamura, 4.0/9, 8-9. Shakhriyar Mamedyarov, Daniil Dubov, 3.5/9, 10. Anish Giri, 2.5/9

Time Control: 25 minutes play-to-finish with a 10 second delay (not increment) starting move 1

Final Standings, Blitz

1-3. Viswanathan Anand, Jan-Krzysztof Duda, Hikaru Nakamura, 10.5/18, 4-5. Ian Nepomniachtchi, Fabiano Caruana, 10.0/18, 6-8. Shakhriyar Mamedyarov, Maxime Vachier-Lagrave, Alexander Grischuk, 8.0/18, 9. Anish Giri, 7.5/18, 10. Daniil Dubov, 7.0/18

Time Control: Five minutes play-to-finish with a three-second delay (not increment) starting move 1

Combined Overall Standings (Rapid results count double)

1. Maxime Vachier-Lagrave, 21.0/36

2. Viswanathan Anand, 20.5/36

3-4. Alexander Grischuk, Ian Nepomniachtchi, 20.0/36

5. Jan-Krzysztof Duda, 19.5/36

6. Fabiano Caruana, 19.0/36

7. Hikaru Nakamura, 18.5/36

8. Shakhriyar Mamedyarov, 15.0/36

9. Daniil Dubov, 14.0/36

10. Anish Giri, 12.5/36

The Grand Chess Tour is comprised of five rapid/blitz tournaments and two classical (Croatia which took place last June and Sinquefield Cup which starts August 15) events. The twelve full tour participants will play in both classical events as well as in three of the five rapid/blitz tournaments.

There have so far been three legs of the Grand Chess Tour: Ivory Coast (Rapid/Blitz), Croatia (Classical Chess) and Paris (Rapid/Blitz). The current over-all standings are as follows:

1. Magnus Carlsen (two events), 33 Grand Chess Tour (GCT) points, total prize winnings, $127,500

2. Maxime Vachier-Lagrave (three events), 25 GCT points, $70,000

3. Wesley So (two events), 22 GCT points, $75,000

4. Ian Nepomniachtchi (three events), 18 GCT points, $42,333

5. Fabiano Caruana (two events), 16 GCT points, $48,000

6. Hikaru Nakamura (three events), 14 GCT points, $40,000

7. Viswanathan Anand (two evens), 13 GCT points, $35,000

8. Ding Liren (two events), 13 GCT points, $29,833

9. Levon Aronian (one event), 11 GCT points, $35,000

10. Sergey Karjakin (two events), 8.5 GCT points, $20,500

11. Anish Giri (two events), 8 GCT points, $24,833

12. Shakhriyar Mamedyarov (two events), 6 GCT points, $17,500

Wesley So is doing well so far. He was fourth place in Ivory Coast rapid/blitz ($15,000) and second place in Croatia ($60,000). Maxime Vachier-Lagrave is currently ahead of Wesley in Grand Chess Tour (GCT) points but he has already played in three events against Wesley’s two.

This August there will be two more legs:

Saint Louis Rapid & Blitz, August 8-15, 2019, Saint Louis, Missouri USA

Sinquefield Cup (Classical), August 15-30, 2019, Saint Louis, Missouri USA

Both events will be hold at the Saint Louis Chess Club in Saint Louis, Missouri. Wesley will not be playing in the Rapid & Blitz but will see action in the Sinquefield Cup. We all hope that Wesley can keep up his good form there.

OK, time now to look at some exciting games from Paris.

Alexander Grischuk played one of the three best games of his career during the rapid section, according to himself.

Caruana, Fabiano (2819) — Grischuk, Alexander (2766) [C54]
GCT Paris Rapid (9.2), 29.07.2019

1.e4 e5 2.Nf3 Nc6 3.Bc4 Bc5 4.c3 Nf6 5.d3 d6

The days of the Petroff and then the Berlin are over — nowadays everybody and their cousin plays the Italian Game and, more specifically, the Giuoco Pianissimo (Giuoco Piano with d3).

6.0–0 a6 7.a4 Ba7 8.Re1 0–0 9.h3 Be6 10.Bxe6 fxe6 11.b4 Nh5 12.Ra2 Qe8 13.Na3 Nf4 14.Bxf4 Rxf4

[14…exf4?! is not so good as it allows 15.d4 which blocks and g1–a7 diagonal and leaves his a7–bishop out of play. If he tries to open up the center with 15…e5 then 16.b5 axb5 17.axb5 Na5 (17…Nd8? 18.Qb3+ Ne6 19.Nc2! the awkward positions of Black’s bishop and knight gain White a piece) 18.Qd3 with both black pieces stuck in the corner the first player is doing very well indeed]

15.Nc4 Qg6 16.b5 Raf8!

Important to get out of the potential pin on the a-file right away. Bad is 16…axb5? 17.axb5 Ne7 due to 18.b6! cxb6 19.Nxd6 Nc6 20.d4! Raf8 21.Nxe5 Nxe5 22.dxe5 White is clearly better.

17.Ncd2

[17.bxc6? Rxf3 18.cxb7 Bxf2+ wins]

17…Ne7 18.d4 Qf6!

Forcing white to open the g1–a7 diagonal.

19.dxe5 dxe5 20.bxa6 bxa6 21.Qe2 a5 22.Rf1 g5 23.Nc4 Ng6

Black is strongly threatening …g5–g4.

24.Nh2 Qg7 25.Qd3

[25.Nxa5? Rxf2 26.Rxf2 Rxf2 27.Qxf2 Bxf2+ 28.Rxf2 Qd7 White’s pieces are too uncoordinated to match up against Black’s queen]

25…Nh4 26.Ng4

Targeting e5, although 26.g3 is also possible: 26…Nf3+ 27.Kg2 Nxh2 28.gxf4 Nxf1 29.f5! White may survive, although I admit it looks scary.

26…h5 27.Ngxe5 g4 28.hxg4 hxg4 29.Qg3 Qg5 30.Re2 Kg7 31.Nd3

White is defending with all his might and he is succeeding so far, but both players were also very short of time here.

31…R4f6 32.Qxc7+ R8f7 33.Qe5?

He should have gone back 33.Qg3!

33…Qh6!!

Threatening 34…Nf3+ 35.gxf3 gxf3 and then one of his rooks goes to the go-file.

34.Qg3 <D>

POSITION AFTER 34.QG3

See if you can spot the winning move.

34…Kh8!

The king has to leave the g-file.

35.Rb2 Nf3+! 36.gxf3 gxf3

If the king was on the g-file this move would not have been possible.

37.Rfb1

[37.Qh2 Rg7+ 38.Kh1 Qxh2+ 39.Kxh2 Rh6#]

37…Rg7 38.Qxg7+ Qxg7+ 39.Kf1 Rh6 40.Ke1 Qxc3+ 0–1

[40…Qxc3+ 41.Kd1 Rh1+ 42.Ne1 Rxe1#]

The modern Benoni is a big favorite of mine, although lately there are only a few elite players who wield it once in a while. In faster time controls though it is very playable for Black. Take a look at the following smooth execution by Caruana.

Mamedyarov, Shakhriyar (2765) — Caruana, Fabiano (2819) [A70]
GCT Paris Rapid 2019 Paris (8.5), 29.07.2019

1.d4 Nf6 2.c4 e6 3.Nf3 c5 4.d5 d6 5.Nc3 exd5 6.cxd5 g6 7.e4 Bg7 8.h3 0–0 9.Bd3 b5 10.a3

A rarity here. The two most common moves are:

10.Nxb5 Re8 (10…Nxe4? is dangerous for Black) 11.0–0 Nxe4 12.Re1 a6 13.Na3 Nf6 with dynamic equality;

10.Bxb5 Nxe4 11.Nxe4 Qa5+ 12.Nfd2 Qxb5 13.Nxd6 Qa6 14.N2c4 Nd7 15.0–0 Ne5 (15…Nb6 16.Nxb6 Qxb6 17.Nxc8 Raxc8 is anothr way to go) 16.Nxc8 Raxc8 17.Nxe5 Bxe5 with some compensation for the pawn.

10…b4 11.Ne2 Re8 12.Qc2 Ba6 13.Nd2 Bxd3 14.Qxd3 Nbd7 15.0–0 a5 16.Ng3 h5 17.Re1 Nb6

Black’s idea is to play …Nfxd5 as the white e4–pawn is pinned against his rook on e1.

18.Re2 Nfd7 19.Nf3

Lots of tactical tricks here. 19.f4 to prevent the Black knight from going to e5 is met by 19…c4! 20.Qf3 (20.Nxc4 Nc5 21.Qc2 b3 the knight on c4 is lost) 20…Nc5 Black is doing very well.

19…Ne5 20.Nxe5 Bxe5 21.Nf1

[21.f4 Bg7 followed by …c4]

21…c4! 22.Qd1 b3 23.Nd2 a4 24.Nf3 c3 25.bxc3

[25.Nxe5 c2 26.Qd3 Rxe5]

25…Bxc3 26.Bg5 Bf6 27.h4 Rc8 28.Qd3 Nc4 29.Rc1 Ne5 30.Nxe5 Rxc1+ 31.Bxc1 Bxe5

Black is clearly winning.

32.g3 Qc7 33.Be3 Rb8 34.f4 b2 35.Qb1 Qc4 36.Kf2 Bd4 37.Bxd4 Qxd4+ 38.Kg2 Rb3 To be followed by …Qc3. White has seen enough. 0–1

 

Bobby Ang is a founding member of the National Chess Federation of the Philippines and its first Executive Director. A Certified Public Accountant, he taught accounting in the University of Santo Tomas for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.

bobby@cpamd.net

Heart and soul

Udonis Haslem has more than 522,000 followers on Instagram, so it’s but typical for him to see his posts draw significant reaction. Still, his latest contribution to the social media app tops the cake. Hitting Cyberspace yesterday, it featured a photograph of the Larry O’Brien Trophy ensconced in his locker-room stall at the AmericanAirlines Arena along with the caption “Too be continued Heat Nation!!!” and hashtags “#og” and “heatlifer.” Netizens pounced on the announcement; in a span of six hours, it drew a whopping 31,000 likes and nearly four figures in comments practically carrying the same message: “Legend.”

Indeed, Haslem is exactly that for the Heat. Since making the National Basketball Association as an undrafted rookie in 2003, he has been a model of hard work and perseverance. For all his supposed lack of talent, he has three championships to his name — including that in 2006, when he was a vital cog for then head coach and current president Pat Riley. He was still crucial to the cause during the LeBron James era, but, by then, it had become clear that he already left his best days on the court behind him.

All the same, the Heat know how much Haslem brings to the table. Off the floor, he’s as valuable as any other player in red and black, bar none. It’s why he has been serving as team captain for the last 11 years, and why Riley didn’t have second thoughts bringing him back for a 17th season. His Instagram post underscores the pride with which he competes, never mind the 228 DNP-CDs to his name. And given the myriad intangibles he brings, the $2.6-million veterans minimum contract he inked is a decided bargain.

Little wonder, then, that Riley, not normally predisposed to handing out praise, described Haslem yesterday as “the heart and soul” of the Heat. And even as, in all likelihood, his deal will be his eighth and last, it signifies his worth to an organization that always strives to win. Ask those who have had the privilege of burning rubber with him. They’re only too glad to have him around. If he talks a big game, it’s precisely because he walks the walk.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

Watch nine Filipino female tech founders pitch their startups

Last weekend, nine female founded tech startups competed for a chance to represent the country on the global stage at She Loves Tech 2019, to be held in Beijing, China. Watch their pitches below:

1Export

1Export was founded by Mel Nava and is a one-stop, end-to-end exporting platform helping MSMEs and farming communities. They carry out this service by matching suppliers with traditional wholesalers and retailers abroad through data analytics, and processing export-compliant documents and labels.

Antipara Exploration Inc.

Antipara Exploration is an underwater 3D geospatial mapping and analytics company. Founded by Cherry Murillon-Cubacub, Laurice Dagum, Engr. Francis Corpuz, and Engr. Aaron Hilomen. it uses its own built underwater towed platform with camera and sonar system to provide maps and relevant information for marine management.

Container Living PH

Container Living provides a sustainable and modular-construction approach to modern building practices by using decommissioned shipping containers that are disaster-resilient and highly customisable. It was founded by Mac Evangelista, Engr. Aly Reyes, Mitch Menez, and John Aguilar.

FHMoms

FHMoms provides a platform which helps women find online jobs. Founded by Maria Korina Bertulfo, Lyra Jewel Decena, Rose Anne Fermocil, and Elisa Javier, their app narrows down employment options based on the results of their skill career matching quiz, and links users to online courses that will equip them with the knowledge and professional skills for their chosen online career path.

Goally

Founded by Gladis Morales and Rachel Jaro, Goally helps employees achieve their financial goals by providing an online dream planner, investment marketplace, and salary deduction facility.

Payo

Co-founded by Liron Gross, Payo is a gateway that manages and simplifies cash on delivery (COD) transaction for online sellers. We provide a full-suite of technological solutions including fraud detection, data analysis and courier optimisation, aimed to empower the merchants with abilities to seize control of the COD process, reduce cancellations and increase revenues.

SmartBride

Founded by Queency Kay Koh and Ira Manalastas, SmartBride is a virtual wedding planner powered by Artificial Intelligence. Their service automatically recommends free customisable wedding packages based on user’s preferences such as budget, location and target wedding date.

StyleGenie

StyleGenie is an online personalised styling service, with over a hundred Fashion Brands and 30,000 users on their platform. Founded by Abbie Victorino, Minrie Macapugay, Steph Oller, and Rhij Sarenas, stylists outfits based on customers’ Style Profiles and provide door-to-door delivery of the corresponding StyleBoxes.

Vesl Pte Ltd.

Founded by Maureen Nova Ledesma, Jessica Manipon, and Yroen Guaya Melgar, Vesl is a financial technology company innovating the trade finance sector by providing a platform that connects trade lenders and businesses to per invoice trade credit insurers, among other specialised insurance products.

Trade deficit narrows to lowest level in fifteen months

The country’s trade-in-goods deficit in June shrank to its lowest point in fifteen months as June imports declined by double-digits.

Preliminary Philippine Statistics Authority (PSA) showed merchandise exports growing by 1.5% to $6.008 billion in June, faster than the one-percent growth in May but slower than the 3.7% growth in June 2018.

On the other hand, the merchandise import bill fell by 10.4% to $8.48 billion in June from $9.469 billion in the same month in 2018. This marked the third straight month of import decline this year.

These flows brought the country’s trade deficit to $2.473 billion in June, which is 30.4% less than the $3.553 billion shortfall in June 2018. The June deficit was the narrowest in fifteen months or since the $2.34-billion trade gap in March 2018.

On a cumulative basis, merchandise exports were down 0.8% to $34.114 billion from $34.397 billion in 2018’s comparable six months. This was below the revised two-percent growth target set by the Development Budget Coordination Committee (DBCC) for 2019.

Year to date, merchandise imports posted a one-percent decline to $53.117 billion from $53.632 billion in January-June 2018, against the DBCC’s revised seven-percent projection for the year.

Cumulatively, the trade deficit declined 1.2% to $19.004 billion compared to last year’s gap of $19.235 billion.

The United States was the Philippines’ top export market in June with a 16.2% share at $974.36 million followed by Japan’s 14.6% ($874.18 million) and China’s 13.7% ($824.85 million) market shares.

The same month saw China as the country’s top source of imports with a 22.8% share at $1.93 billion followed by Japan’s 9.7% ($822.6 million) and Korea’s eight percent ($678.1 million). — Lourdes O. Pilar

Headline inflation rates in the Philippines (July 2019)

INFLATION eased further in July, the Philippine Statistics Authority (PSA) reported on Tuesday, lending support to expectations for the central bank to continue loosening monetary policy. Read the full story.

Headline inflation rates in the Philippines (July 2019)

July inflation slowest in 31 months

INFLATION eased further in July, the Philippine Statistics Authority (PSA) reported on Tuesday, lending support to expectations for the central bank to continue loosening monetary policy.

The PSA reported that the country’s headline inflation rate slowed to 2.4% in July from 2.7% in June and 5.7% in July 2018.

Headline inflation rates in the Philippines (July 2019)

It matched the 2.4% inflation reading in July 2017 and was the slowest in 31 months or since December 2016’s 2.2%.

The July result fell within the Bangko Sentral ng Pilipinas (BSP) Department of Economic Research’s 2-2.8% estimate for the month and matched the 2.4% median estimate in a poll of 18 economists and groups which BusinessWorld conducted late last week.

Headline inflation averaged 3.3% year-to-date, still past the midpoint of the BSP’s 2-4% target band for 2019 and above the downward revised 2.7% full-year forecast average.

Core inflation — which excludes volatile food and energy items in the consumer price index (CPI) — clocked in at 3.2% last month, slower than June’s 3.3% and 4.5% in July last year.

In a text message to reporters, BSP Governor Benjamin E. Diokno said that July’s inflation rate lay at the midpoint of the BSP’s forecast for July, “[h]ence, it is not a surprise at all.”

The PSA attributed the July deceleration primarily to the slower increase in prices of the heavily-weighted food and non-alcoholic beverages component at 1.9% from 2.7% in June.

“Almost all subsectors posted slower price gains than the previous month, save for education, as base effects of last year’s implementation of free tertiary education faded,” said ING Bank NV Manila senior economist Nicholas Antonio T. Mapa in an e-mail to reporters.

“Key to the deceleration trend was the fall in the average retail price of rice in the month of July with the rice tariffication law kicking in,” said Mr. Mapa, adding that lower electricity rates and lower fuel pump prices also contributed to the inflation slowdown.

“It is also worth noting that a stronger peso had a hand in slower inflation for the month of July, helping lower the cost of imported raw materials.”

Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort shared this assessment, saying in an e-mail: “Lower inflation [is] largely due to easing prices of food, especially rice, stronger peso exchange rate, lower global crude oil prices, lower electricity prices, and higher base effects…”

The food-alone index, which accounts for 35% of the average household’s consumer basket, eased to 1.7% in July versus the 2.6% reading in June and 6.8% in July 2018. In particular, rice — which accounts for 10% of the basket — saw its annual rate decline further by 2.9% from a 1.7% contraction in June.

“Rice was among the biggest contributors to the increase in headline inflation in 2018, having added 1 percentage point (ppt). It is now subtracting 0.27 ppt from the headline [inflation rate],” Chidu Narayanan, Asia economist at Standard Chartered, said in an e-mail to reporters.

In a separate note, HSBC Global Research economist Noelan C. Arbis said that the contribution of food, alcoholic drinks and tobacco prices to inflation are at “their lowest levels in nearly three years” or since October 2016, which marked a “sharp reversal” from last year’s trend.

Aside from food and non-alcoholic beverages, slower annual increments in July were also observed in alcoholic beverages and tobacco (8.8% from June’s 9.3%); housing, water, electricity, gas and other fuels (2.2% from 3.0%); furnishing, household equipment and routine maintenance of the house (2.9% from 3.1%); and transport (0.7% and 1.6%).

ROOM TO CUT INTEREST RATES?
Robert Dan J. Roces, Security Bank Corp. Treasury Group assistant vice-president and chief economist, said the inflation downtrend gives the BSP room to continue reversing its 175-basis point (bp) rate hike last year after a 25 bp reduction in May. “[W]e expect BSP to resume cutting rates by at least 25 bps to support and pump-prime economic growth,” Mr. Roces said.

Likewise, ING’s Mr. Mapa said it is “widely expected” that the BSP will be cutting rates when the central bank’s Monetary Board meets on Thursday for its fifth policy review for the year. “[BSP Governor Benjamin E. Diokno] has telegraphed up to 50-bps worth of rate cuts for the balance of 2019 and we believe we will see at least a 25-bp rate cut (with door open for 50 bps) all the more given that second quarter GDP (gross domestic product) is likely to settle below the 6% handle,” Mr. Mapa said.

For HSBC’s Mr. Arbis, the benign inflation trend “opens the door” for further monetary easing. “[W]e expect the BSP to cut its policy rate by 25 bps to 4.25% at its upcoming meeting… and expect an additional 25-bp cut by year-end. Moreover, we expect another 100-bp cut to the reserve requirement ratio (RRR) in [the fourth quarter], bringing it down to 15% by the end of the year,” he said.

For his part, RCBC’s Mr. Ricafort said that the recent decision by the US Federal Reserve to cut interest rates by 25 bps last Wednesday would also “provide some leeway” for other central banks including the BSP to do a corresponding cut on their respective interest rates.

BSP’s Mr. Diokno has cited the July inflation rate, second-quarter GDP growth and “a host of other developments locally and abroad” as key considerations in determining the “appropriate policy stance” for their meeting on Thursday.

The BSP cut benchmark interest rates by 25 bps in its May 9 policy review, partially dialing back a cumulative 175-bp hike last year in the face of successive multi-year-high monthly inflation rates. It also cut the reserve requirement ratio by 200 bps to 16% for big banks and to six percent for thrift banks.

OUTLOOK
The National Economic and Development Authority (NEDA) said in a statement that it expects inflation to settle within the government’s 2-4% target this year.

“We welcome this decelerating trend in prices, but we remain on guard against possible upside risks such as adverse weather conditions, possible entry of the African swine fever, and uncertainty in the global oil market, among others,” Socioeconomic Planning Secretary Ernesto M. Pernia, NEDA’s director-general, was quoted as saying.

HSBC’s Mr. Arbis said: “We expect headline inflation to average three percent in 2019, factoring in possible upside surprises during the typhoon season,” adding that “[o]ur current trajectory indicates that headline inflation is tracking to average 2.7% for 2019 barring any significant shock to food prices due to inclement weather.”

Euben Paracuelles, senior economist for Southeast Asia at Nomura Securities Company Ltd.’s Research Division, likewise expects inflation to ease further. “Our CPI inflation forecast implies CPI inflation will fall to around 2.1% in [the third quarter] and 2.3% in [the fourth quarter] from the year-to-date average of 3.3%, driven by factors similar to those in June and July, and more favorable base effects from excise tax adjustments… last year,” he said in a note. — Marissa Mae M. Ramos and Mark T. Amoguis

Manufacturing’s weakness persists

FACTORY OUTPUT in the country extended its declining streak to seven months in June, the government reported on Tuesday.

Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries (MISSI), showed factory output — as measured by the Volume of Production index (VoPI) — contracting by 10.5% year on year in June versus the revised 9.9% decline in May and the 9.8% growth in June 2018.

Factory output decline averaged 9.6% last semester compared to the 13.5% growth average in 2018’s first half.

The Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) — which uses a different set of considerations — increased that month to 51.3 from May’s 51.2, though it was slower than last year’s 52.9. 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%. Eleven of the 20 sectors registered capacity utilization rates of at least 80%.

ING Bank Manila NV senior economist Nicholas Antonio T. Mapa noted the “sub-performance” of the top five manufacturing subsectors, which drove the overall decline.

“The top five subsectors of food manufactures, chemicals, basic metals, radio-television-communication equipment, and furniture account for 76% of the total manufacturing sector and all these sectors saw contractions in the month of June,” Mr. Mapa said in an e-mail.

Eleven out of 20 subsectors registered declines in June, led by double-digit contractions in petroleum products (-69.3%), furniture and fixtures (-40.5%), and basic metals (-18.3%), followed by those in electrical machinery (-7.2%); machinery except electrical (-6.5%), non-metallic mineral products (-5.1%), tobacco products (-3.8%); textiles (-2.0%), food manufacturing (-1.9%), leather products (-0.9%); and miscellaneous manufactures (-0.2%).

Noteworthy to mention is that food manufacturing, which is the largest subsector in terms of contribution to factory output, has been registering declines for eleven straight months or since August 2018. Of those eleven months, seven showed double-digit declines.

For UnionBank of the Philippines, Inc. (UnionBank) chief economist Ruben Carlo O. Asuncion, the continued negative turnout in factory output can be attributed to the slowdown in government spending on public construction. “Although seven months [of] decline in industrial production growth may be a small sample, there is a correlation between infrastructure development and industrial growth, and thus, production,” Mr. Asuncion said in an e-mail.

However, the economist cautioned that further studies need to be conducted to firmly establish the link between the two variables.

“At this point, domestic production may have been adjusting to domestic price levels and the corresponding response of ‘contractionary’ monetary policy affecting firms’ plans for additional financing for more expansion,” Mr. Asuncion said.

Budget department data show the government spent P1.59 trillion in the first half, 0.84% less than in 2018’s first six months, with infrastructure and capital outlays totaling P311.4 billion, 11.7% less than the year-earlier P352.7 billion.

Analysts and the country’s economic managers blamed the decline in public spending on the four-month delay in the passage of the 2019 national budget. To recall, the government operated on a reenacted 2018 budget from January to April 15, when President Rodrigo R. Duterte signed this year’s national budget into law but vetoed P95.3 billion in funds that were not in sync with state priorities, slashing the total to P3.662 trillion. This meant that new projects were left unfunded for four months.

“The weak MISSI numbers point to another quarter of subdued performance from the manufacturing sector with the economy relying heavily on the services side of the equation gain (given that agriculture is expected to show flat growth), which could translate to a sub-6% print for GDP (gross domestic product),” Mr. Mapa said moving forward.

For UnionBank’s Mr. Asuncion, manufacturing “may still actually grow” albeit at a slower pace compared to the same period last year.

“If the delayed budget is actually spent in all of [the second half of 2019], we may see the slowdown in growth to recover and robustly grow in the coming months,” Mr. Asuncion added.

In a statement released by the National Economic and Development Authority, Socioeconomic Planning Secretary Ernesto M. Pernia said factory output is expected to “remain muted in the near term” amid a “less upbeat” business and consumer outlook for the third quarter of this year, coupled with “seasonal slack” in domestic demand and business activities during the rainy season. — Lourdes O. Pilar

Meralco bills drop for fourth straight month

ELECTRICITY USERS in the National Capital Region and surrounding areas will see lower bills for the fourth straight month, Manila Electric Co. (Meralco) announced on Tuesday.

The distribution utility said rates for the household segment will go down by P0.4176 per kilowatt-hour (/kWh) to P9.5674/kWh this month from P9.9850/kWh in July.

“The fourth straight month of electricity rate decrease represents a total downward adjustment of almost P1/kWh since May 2019,” Meralco said in a press release.

Those using 200 kWh — who make up Meralco’s biggest single household segment — will see their electricity bills go down by around P84, while those consuming 300 kWh, 400 kWh and 500 kWh can expect their monthly power bill to decrease by P125.28, P167.04 and P208.80, respectively.

Meralco said the power generation charge, which accounts for half of the monthly bill, decreased for August as a result of the lower charges from the wholesale electricity spot market (WESM) during the July supply month. It said the generation charge slipped to P4.9620/kWh or by P0.4607/kWh from P5.4227/kWh last month. WESM charges dropped by P6.208/kWh amid improved power supply conditions in the Luzon grid.

The utility said that while the National Grid Corporation of the Philippines (NGCP) placed Luzon on yellow alert in the first half of July — flagging thin reserves — there was no red alert for the whole month. WESM accounted for 11% of the power distributor’s supply.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.

The cost of power from independent power producers (IPP) rose by P0.0911/kWh.

That was despite the peso gaining strength against the US dollar and lower fuel prices after the quarterly repricing of Malampaya natural gas and continued decline in coal prices.

Meralco said the higher IPP costs were largely due to lower average plant dispatch with the scheduled maintenance in July of modules 20, 30 and 40 of First Gas Power Corp.’s 1,000 megawatt Santa Rita combined-cycle natural gas-fired power plant in Batangas City.

It said the increase was offset as cost of power from the power supply agreements (PSAs) slipped by P0.0656/kWh because of lower fuel prices and the peso’s appreciation against the greenback.

“About 67% of PSA costs are dollar-denominated. IPPs and PSAs provided 41% and 48% of Meralco’s supply needs, respectively,” the listed company said.

Meanwhile, transmission charge for residential customers went up by P0.0334/kWh. Taxes and other charges increased slightly by P0.0097/kWh.

Meralco said its distribution, supply and metering charges have remained unchanged for 49 months after their reduction in July 2015. It reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.

Payment for the generation charge is remitted to the power suppliers, while the collected transmission charge goes to the NGCP. Taxes and other public policy charges, including the feed-in tariff allowance goes to the government. — V. V. Saulon

High court upholds P1.8-B fine for MWSS, concessionaires

THE SUPREME COURT (SC) has upheld fines totaling close to P2 billion on the Metropolitan Waterworks and Sewerage System (MWSS) and concessionaires Manila Water Company, Inc. and Maynilad Water Services, Inc. for violations of an environmental law.

SC Public Information Chief Brian Keith F. Hosaka in a statement said the court voted unanimously, 14-0, to uphold the decision of the Court of Appeals that found the regulator and its concessionaires liable for violating Section 8 of the Republic Act No.9275, or the Philippine Clean Water Act of 2004.

Maynilad and Manila Water are each jointly liable with MWSS to pay P921.5 million covering the period May 7, 2009 to Aug. 6, the date of promulgation of the Supreme Court decision.

They are ordered to pay the fine within 15 day upon receipt of the decision.

The court also fined then of the initial amount of P322,102 per day subject to 10% increase every two years until full compliance with RA 9275.

The case stemmed from the fine imposed of P29.4 million by the Department of Environment and Natural Resources (DENR) for non-compliance with the clean water law due to their failure within five years after the law took effect in early 2004 to install and maintain wastewater treatment facilities.

The water concessionaires elevated their case to the Court of Appeals which, in 2012, dismissed their petitions and affirmed the fine imposed by the DENR-Pollution Adjudication Board, saying it correctly ruled that the company violated the clear water law.

Motions for reconsideration were denied for lack of merit in 2013.

Sought for comment, Jeric T. Sevilla, head of Manila Water’s Corporate Strategic Affairs Group and Corporate Communications, said in a mobile phone message that the firm has “yet to receive a copy of the ruling/decision”.

Maynilad Chief Operating Officer Randolph T. Estrellado said via text that his company “has not yet received a copy of the Supreme Court decision, but assuming the news is correct, then we intend to file a motion for reconsideration within the allowed 15 days from receipt of the ruling.”

Metro Pacific Investments Corp., which has a 52.8% interest in Maynilad, is one of three 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 interest in BusinessWorld through the Philippine Star Group, which it controls. — Vann Marlo M. Villegas

2020 national budget OK’d for submission to Congress

PRESIDENT Rodrigo R. Duterte and his Cabinet approved last Monday the proposed P4.1-trillion national budget for 2020, Malacañang announced on Tuesday, after both chambers of Congress moved to prevent a repeat of last year’s delayed enactment that now weighs on overall economic growth.

“We wish to inform the public that President Rodrigo Roa Duterte, together with the members of the Cabinet, approved the P4.1-trillion national budget for Fiscal Year 2020,” Presidential Spokesperson Salvador S. Panelo said in a statement on Tuesday, as a senior official of the House of Representatives appropriations committee said next year’s spending plan will remain “cash-based”, meaning it takes into consideration the historical limited spending capacities of individual departments and agencies.

“We assure everyone that our people’s money — with education receiving the biggest slice of the budget, followed by public works, transportation and health — will be spent wisely to reach a state of vibrant economy that will be felt by the citizenry.”

He said the proposed 2020 national budget, which the Executive branch targets to submit to Congress before its deadline to do so on Aug. 21, “is designed to respond to the needs of the majority of our countrymen longing to be uprooted from the decades of want of basic necessities, inadequate supply of basic services, lack of infrastructures required to spur economic growth, absence of accountability on government coffers, vexing bureaucratic rigmarole, deprived education and unchanged poverty, and geared to achieve a more peaceful and progressive Philippines where the living standards of Filipinos are raised.”

Budget Undersecretary Laura B. Pascua said her department is fine-tuning details, saying in a mobile phone message: “We are still finalizing the budget… It is still moving.”

In a statement e-mailed to reporters, the Department of Budget and Management said it “will be finalizing the FY 2020 National Expenditure Program (NEP) and other budget documents for submission to Congress before the 30-day Constitutional deadline…” after the July 22 state of the nation address.

“Every peso of the proposed P4.1 trillion FY 2020 Budget went through numerous levels of scrutiny and approval, and budget hearings and consultations with the agencies. Every step of the budget process keeps in mind the objective of lifting millions of Filipinos out of poverty and creating opportunities for them,” the department said.

Albay 2nd District Rep. Jose Ma. Clemente Sarte Salceda, vice-chairman of the House appropriations committee, told reporters last Monday that the chamber will target the final approval of the proposed national budget by Oct. 4, before the 18th Congress takes a month-long break.

Mr. Salceda also said the scheme of budgeting for 2020 will be “cash-based.” Under this system, allocated funds have to be spent within a year with a grace period of three months at most.

The government operated on a reenacted 2018 budget from January to April 15, when Mr. Duterte signed this year’s national budget into law but vetoed P95.3 billion in funds that were not in sync with state priorities, slashing the total to P3.662 trillion.

The Development Budget Coordination Committee (DBCC) in its March 13 meeting slashed gross domestic product (GDP) expansion targets for this year (to 6-7% from 7-8% originally) and 2020 (to 6.5-7.5% also from 7-8%), citing constraints from the delayed enactment of the national budget.

In its July 18 meeting, the DBCC retained a budget deficit ceiling equivalent to 3.2% this year, with a targeted P3.536-trillion revenues — consisting largely of P3.332-trillion tax collections — helping to finance programmed expenditures worth P4.214 trillion. — Arjay L. Balinbin

Eagle Cement Q2 earnings jump 39% to P1.7B

Eagle-Cement
EAGLE Cement Corp. remains on track to complete its Bulacan plant’s expansion by 2020.

EARNINGS of Eagle Cement Corp. rose 39% to P1.7 billion in the second quarter of 2019, thanks to higher volumes sold complemented by an increase in selling prices.

In a statement issued Tuesday, the listed cement manufacturer said the strong profit growth was driven by a 22% uptick in net sales to P5.1 billion.

This brought net income for the first half 44% higher to P3.3 billion. Net sales were also higher by 28% to P10.5 billion, as the company benefited from a 21% increase in sales volume.

“Our robust results in the first half of the year reaffirm our positive stance towards the industry. We will continue to leverage on the growing local cement demand led by the private sector and supported by the infrastructure push of the government,” Eagle Cement President and Chief Executive Officer John Paul L. Ang said in a statement.

With first-half results out, the company is optimistic it can post double-digit growth for the entire year.

Eagle Cement remains on track to complete its Bulacan plant’s expansion by 2020, adding 1.5 million metric tons (MT) to its annual grinding capacity. This will bring total annual cement output to 8.6 million MT for the Bulacan plant alone.

Its total cement output is further projected to reach a total of 10.6 million MT by the end of 2021, following the completion of its fourth production line in Malabuyoc, Cebu with two million MT.

The company has also obtained its Special Use Agreement for Protected Areas permit from the Department of Environment and Natural Resources Region VII, which is needed for the construction of a port in the area. This will allow the company to sell cement in the Visayas region by end-2020.

“We remain positive as reflected in our aggressive expansion to reach new growth markets as well as create a strong presence in the south,” Mr. Ang said.

Eagle Cement earlier said it will spend P3.3 billion in capital expenditures this year to continue its nationwide expansion.

Shares in Eagle Cement dropped 2.23% or 32 centavos to close at P14 each at the stock exchange on Tuesday. — Arra B. Francia

Petron earnings plunge 72% in 1st half

PETRON CORP. on Tuesday reported a 72% decline in its first-half net income to P2.6 billion, as sales volume in the Philippines declined due to the implementation of the second tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

In a statement, Petron described the first half financial results as “reflecting modest gains amidst the slump in regional refining margins that penalized Philippine operations by as much as P5 billion during the period.”

“These setbacks are just temporary and are all part of the business. We remain optimistic for the second half of the year given signs of modest recovery from gasoline and petrochemical margins recently seen in the market,” Petron President and Chief Executive Officer Ramon S. Ang was quoted as saying in a statement.

The company, whose local and foreign refining capacity amounts to 268,000 barrels per day, has not yet released its quarterly report.

Consolidated sales during the first six months fell 7% to P254.8 billion. Petron operates about 40 terminals in the region, and over 3,000 service stations where it retails gasoline and diesel.

“While Malaysian sales volume grew by 4 percent and partly offset that of the Philippines, the decrease in Philippine sales reflects decline in volume due to the implementation of the second tranche of TRAIN Law, which brought total fuel taxes to an average of P6.75 per liter equivalent to over P15 billion excise taxes for the first half,” it said.

“Furthermore, such developments encouraged illegal business practices during the period,” it added.

Petron opened 72 stations in the Philippines and 24 stations in Malaysia during the first half.

The listed firm also said it would resume normal operations at its Bataan refinery after completing scheduled repair works, including damage from the April 22 earthquake that hit Central Luzon and Metro Manila.

On Tuesday, shares in the company fell by 1.11% to P5.36 each. — V.V.Saulon

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