Co-ops pressed on P238 million from universal charge
STATE-LED Power Sector Assets and Liabilities Management Corp. (PSALM) has uncovered up to P238.3 million in universal charge (UC) collected from electricity users by electricity cooperatives but not remitted to the agency, which is the fund’s administrator.
In a statement on Sunday, the Department of Finance (DoF), whose top official chairs PSALM, said final demand letters had been sent to 11 electricity cooperatives “with a stern warning that aside from being liable for interest charges, these cooperatives and their officers will face civil, administrative and criminal charges.”
“Non-remittance of UC collections to PSALM is fraud perpetrated against the consumers who paid for the UC and against the government that is mandated to use the UC in accordance with EPIRA (Republic Act No. 9136 or Electric Power Industry Reform Act of 2001),” PSALM President and Chief Executive Officer Irene Joy B. Garcia said in the statement.
The head of the National Electrification Administration, which oversees the country’s 121 electric cooperatives, as well as the lawyer of the Philippine Association of Rural Electric Cooperatives, the biggest industry group, did not immediately respond when asked to comment on the DoF statement.
Ms. Garcia said PSALM “will continue to relentlessly pursue all efforts to collect what is legally due to it.”
“It will not allow delinquent co-ops to get away with illegal use and misappropriation of the UC collections.”
In the demand letters, PSALM told delinquent cooperatives that each month of non-remittance of UC to PSALM is one count of violation of the EPIRA, punishable by fines and penalties of up to P50 million.
The universal charge is collected monthly by distribution utilities, including cooperatives, from power users to recover so-called stranded debts and stranded contract costs incurred by the National Power Corp. when the country built up its energy assets to meet deficient supply.
Collected funds are supposed to be remitted to PSALM, as administrator, by the 15th of each succeeding month.
PSALM’s demand letter reminded directors and officers who allowed the violation by the cooperatives that they may be liable for imprisonment of up to two years and/or fine of double the amount of damages.
It said refusal to comply with EPIRA requirements may further expose officers to a fine of up to P5 million and/or imprisonment of up to six years.
It also said non-remittance of UC collections is tantamount to estafa by misappropriation under the Revised Penal Code, and thus punishable by imprisonment of up to 20 years.
Ms. Garcia said that, after sending out the demand letters, PSALM will take legal steps against the erring power distributors and their officers and directors without any further notice to them.
In its statement, the DoF identified Camarines Sur III Electric Cooperative, Inc. as topping the list of 11 delinquent co-ops with the biggest unremitted UC collections amounting to P66.281 million.
Another utility in Bicol followed — Albay Electric Cooperative, Inc., with unremitted UC collections totaling P40.6 million.
Abra Electric Cooperative, Inc. came next with P36.886 million.
PSALM also called out co-ops that not only failed to remit, but also refused to submit the required monthly collection reports. The agency said non-submission is a violation of the UC guidelines issued by the Energy Regulatory Commission.
These are Maguindanao Electric Cooperative, Inc., with unremitted UC collections of at least P26.28 million based only on available reports, Ticao Electric Cooperative with at least P9.421 million, Lanao del Sur Electric Cooperative, Inc. with at least P8.685 million, and Siasi Electric Cooperative with at least P2.764 million.
The other co-ops that were sent demand letters were Basilan Electric Cooperative, Inc. with P31.531 million; Cotabato Electric Cooperative, Inc.-PPALMA with P7.428 million, Masbate Electric Cooperative, Inc. with P4.917 million and Romblon Electric Cooperative, Inc. with P3.456 million. — Victor V. Saulon
Auto Nation Group rolls out all-new Mercedes-Benz GLE
Words and photos by Kap Maceda Aguila
MERCEDES-BENZ Philippines fancies the GLE a “trendsetter” in its portfolio of SUVs, and the latest iteration surely adds to this lore as it is packed with “a suite of intuitive safety systems (and) the most advanced technology.”
The all-new, fourth-generation of the mid-size SUV is a “tweener” — bigger than the C-Class-based GLC, and smaller than the GLS (with which it shares a platform).
The GLE’s tech accoutrements are led by the integration of the so-called MBUX or Mercedes-Benz User Experience, which had debuted in the all-new A-Class last year and is slowly rolling out to all new Mercs. The system is able to learn preferences of the driver and such thanks to artificial intelligence.
The SUV showcases two 12.3-inch touchscreens positioned side-by-side for a wide-screen look. Mercedes-Benz says that “the comprehensive touch control concept… combines the functionalities of the touchscreen, a central console touchpad, and touch-control buttons on the steering wheel for less driver distraction and stress.” A Burmeister surround sound system gives expression to audio sources.
An intelligent virtual assistant can be activated with the press of a button in the steering wheel or by saying, “Hey Mercedes” from anywhere in the cabin. It allows users to execute voice commands to control infotainment functions such as destination input, phone call, music selection, climate control, and ambient lighting. Aside from a natural speech recognition program to help it recognize and understand “nearly all sentences from the fields of multimedia and vehicle operation,” the system also features Apple CarPlay for an even heightened hands-free experience.
The cockpit has been rendered sportier, bannered by a stylish dashboard design “capped by 64-colored premium ambient lighting to set the driving and riding mood.” The company says the GLE wheelbase is “considerably longer” compared to the outgoing model. This provides more space, especially for the rear passengers. Speaking of which, the third-row seats are a first for a Mercedes-Benz SUV. These are electronically adjusted and can be folded to accommodate more cargo. A power liftgate can be opened with a kicking motion underneath it.
“(Since 2005, the GLE) has been regarded as an icon of confidence among our discerning customers who want a premium SUV that offers absolutely no compromise,” said Auto Nation Group, Inc. Chief Operating Officer Francis Jonathan Ang in a speech ahead of the unveiling. “This GLE is a new result of generations of design and engineering.” Auto Nation Group is the authorized distributor and service provider of Mercedes-Benz in the Philippines.
The executive added that SUVs are “a major structural pillar in the Mercedes-Benz product portfolio and greatly contribute to the growth of the Mercedes-Benz brand globally.”
A lone variant is available for the GLE, the GLE 300d 4Matic (priced at P5.69 million). This is powered by an in-line, four-cylinder, turbodiesel — mated to a 9G Tronic nine-speed automatic transmission. The system outputs 245hp and 500Nm. The “4Matic” means the GLE is an all-wheel-drive vehicle.
The GLE also heralds the market entry of EQ Boost, the Stuttgart brand’s mild hybrid feature which recovers energy from braking and systematic engine shutoffs for later use as boost “when needed or when eliminating turbo lag.”
The GLE boasts a redesigned, athletic body, complemented by large 21-inch light-alloy wheels. It shares the look of its sedan siblings through chrome accents around the windows. Headlamps are new multi-beam LEDs with Ultra Range beams to aid driving visibility. The rear lights are divided into two sections to enhance width and provide character.
In an interview with Velocity, Ang said that Auto Nation Group extends a two-year, unlimited-mileage warranty for the GLE, and expressed confidence that customers will see the benefits in the vehicle’s “software-hardware integration.”
Meanwhile, Auto Nation Group AVP for Public Relations Joseph Ayllon said, “Mercedes-Benz has been developing a strong line of SUVs since founding the premium SUV segment in 1997 with the launch of the M-Class.” He reported that the German automaker has sold more than five million SUVs globally.
CLA TO ROUND UP 2019 LAUNCHES
Following the recent unveiling of the all-new B-Class and, now, the GLE, Ang shared that the company is not done yet for the year. He disclosed to this writer that the CLA-Class is set to be launched next month. The second-generation CLA-Class debuted last January at the Consumer Electronics Show in Las Vegas. It is a fastback powered by a turbocharged 2.0-liter engine (good for 221hp and 350Nm) mated to a seven-speed dual-clutch automatic. Front- and all-wheel-drive versions are available, but it is unclear what variant the domestically available CLA will be.
Toyota goes on 2nd leg of Hybrid Campus Tour
By Manny N. de los Reyes
TO BOOST its efforts in bringing vehicle electrification closer to the public, automotive leader Toyota Motor Philippines (TMP) established a partnership with De La Salle University (DLSU) and staged the second leg of its Hybrid Electric Vehicle (HEV) Campus Tour in the university’s Manila campus.
The partnership, meant to expand the knowledge of the academe through the latest automotive industry trends and direction, was made possible through DLSU’s Department of Mechanical Engineering. Students and faculty members participated in an educational seminar conducted by Toyota’s technical experts, which focused on the beneficial effects of Toyota hybrid technology to the environment. A brief forum was also opened to discuss common misconceptions about hybrid electric vehicles.
Aside from the seminar, attendees were given the chance to see the Prius model up-close, which was displayed at the school’s Central Plaza. Free vegetarian snacks courtesy of Quorn were also distributed to students throughout the day, in line with the activity’s sustainability theme.
“Our continuous activities on HEVs are geared towards the youth because they are the ones who will benefit most from this technology. With enough support and proper implementation, the untapped potential of hybrids can improve our transportation systems and our environment in the long run,” said TMP First Vice-President Cristina Arevalo. “Toyota is driving the future, one university at a time.”
The DLSU leg of the Hybrid Campus Tour series is part of Toyota’s global initiative to promote vehicle electrification towards sustainable mobility. In the Philippines, Toyota is firm on its stance that HEVs are the ideal transition phase for a greener and more energy-efficient automotive landscape.
Last May, the Toyota Hybrid Electric Technology Conference at the Grand Hyatt Manila was attended by over four hundred guests from different sectors like the government, academe, and environmental organizations. Prior to the conference, Toyota started its Hybrid Campus Tour series by partnering with Mapua University last March.
In order to further widen the use of hybrid technology, TMP is looking to bring electrified versions of its existing models to the Philippines. This business direction is aligned with the Toyota Environmental Challenge 2050, aimed at eliminating the company’s carbon emissions by the next three decades.
“TMP is well on its way to introducing various technologies and features available in other countries, such as the Hybrid Synergy Drive for fuel efficiency and Toyota Safety Sense for human safety,” she added. “This year will be an exciting time for the motoring public as we continue the push for electrification, and customers can definitely expect more options from Toyota if they’re looking to own environment-friendly cars.”
Honda launches City and Jazz Sport Limited Edition
HONDA HAS launched sporty limited edition variants of the evergreen City and Jazz. This offering aims to satisfy the desire of the Filipino car buyers aspiring to own a sporty and fun-to-drive Honda. Customers may now place their reservations at any of the 38 Honda Cars Dealerships nationwide.
NEW HONDA CITY 1.5 SPORT CVT
As one of Honda’s locally produced and best-selling models in the Philippines, the City has established itself as one of the top-of-mind vehicles for customers in the competitive subcompact sedan category, thanks to its powerful and efficient 1.5-liter i-VTEC engine, spacious interior and cargo capacity, and numerous convenience features.
For 2019, the new City 1.5 Sport CVT now comes with a more dynamic appearance enhancing the City’s sporty image. Up front, the new City Sport features LED headlights and LED foglamps for a more aggressive front fascia.
At the side, power folding side mirrors with integrated turn signals and chrome door handles give this variant a sporty yet premium-looking side profile. At the rear, the new City Sport features a ducktail spoiler and Sport Edition emblem to distinguish this City from its siblings.
The new City 1.5 Sport CVT has a retail price of P899,000 and will be available in two colors: Taffeta White and Modern Steel Metallic.
NEW HONDA JAZZ 1.5 SPORT CVT
Together with the City Sport, the Jazz is another Honda nameplate that is well established in the Philippine market. Enjoying a strong following with its hatchback body styling, impressive packaging, and powerful yet fuel-efficient drivetrain, the Jazz has become the best-selling subcompact hatchback in its segment.
The new Jazz 1.5 Sport CVT is equipped with new exterior features derived from the Jazz RS variant, namely 16-inch RS Design black alloy wheels, RS Design tailgate spoiler and black door mirror caps, all of which give this subcompact hatch a more aggressive stance on the road.
To complete the overall sporty image, the new Jazz 1.5 Sport CVT also comes with a Sport Edition emblem at the rear.
The Jazz 1.5 Sport CVT has a retail price of P933,000 and will be exclusively available in Brilliant Sporty Blue. Only 30 units of this Limited Edition variant will be made available nationwide.
For more information on these two new sporty vehicles and other Honda Models, visit Honda’s official Web site at www.hondaphil.com or visit your nearest Honda car dealership today.
LIPAD to take over Clark airport
THE consortium led by JG Summit Holdings, Inc. and Filinvest Development Corp. (FDC) is preparing to take over the operations and maintenance (O&M) of the Clark International Airport by the end of the week.
“By Aug. 16, we’ll be ready to turn over the O&M (of Clark International Airport) to LIPAD Corp.,” Transportation Secretary Arthur P. Tugade said last week.
Luzon International Premier Airport Development (LIPAD) Corp. is composed of JG Summit, FDC, Philippine Airport Ground Support Solutions, Inc.(PAGSS) and Changi Airports Philippines (I) Pte. Ltd.
LIPAD Chief Executive Officer Bi Yong Chungunco said the company will take over Clark airport’s existing passenger terminal building, while the new terminal is still being completed.
“As of now we just take over and see how it goes. We will look at all procedures and things like that. We’ll see what changes will be needed. But as of now, it’s okay,” she told reporters.
The new terminal, which is currently being built by the tandem of Megawide Construction Corp. and GMR Infrastructure Ltd., is scheduled to be finished by 2020. It will expand the capacity of the airport to 8 million passengers annually from the current level of 4.2 million.
“We are ready to open and make operational Terminal 2 of Clark by June at the earliest, July at the latest, of next year,” Mr. Tugade said.
Ms. Chungunco noted once the new terminal opens, LIPAD wants to repurpose the old terminal, citing several possibilities such as a turning it into a convention center.
“We’d like all the airlines to go to the new terminal. And then we repurpose the old terminal… Then once the new terminal maxed out the capacity, we go back to the old terminal. So that’s why we keep it on hold,” she said.
LIPAD, formerly called North Luzon Airport Consortium, was awarded by the Bases Conversion and Development Authority (BCDA) the 25-year O&M contract for the Clark airport in January.
Clark International Airport recorded 2.1 million passengers in the first half of the year, growing 63% from a year ago. It is being positioned as the alternative to the Ninoy Aquino International Airport (NAIA) in Pasay City. — Denise A. Valdez
Chevrolet’s tips for rainy season driving
THE RAINY SEASON has officially begun. Torrential rain presents unique challenges to drivers that can catch them off-guard, including reduced visibility, slippery surfaces, unseen obstacles and flash floods.
With high stance, traction control and stability systems, the Chevrolet Trailblazer midsize SUV and Chevrolet Colorado pickup offer a distinct advantage over smaller cars because they can wade through water as deep as 800mm. Other functions such as auto rain sensors and automatic headlights also allow the driver to focus on driving and pay attention to surrounding situations.
Before the premium SUV and iconic American pickup truck contended with actual monsoon conditions, validation engineers at General Motors subjected the vehicles to extreme water intrusion tests using dunk tanks, water spray booths and flooded trenches.
“Truck and SUV customers around the world expect to get to their destination no matter what’s happening outside the vehicle — be it a flooded road, river crossing or storm,” said Chatchawan Chantaket, general director of Product Engineering, GM Southeast Asia. “When you think of all the sensitive equipment on vehicles these days it is critical to ensure that Colorado and Trailblazer customers will never have to worry about how their vehicle will perform in extreme conditions.”
GM’s dunk tank simulates static water fording, like when customers are idling in deep water during flood conditions like those that frequently occur during Thailand’s rainy season. Water floods into the dunk tank up to the truck’s rocker panel, allowing engineers to examine the effect on underbody and chassis components, such as electrical wires and venting systems. The dunk tank test was inspired in part by the kind of severe flooding that occurs in Southeast Asia every year, impacting millions of motorists.
GM’s universal water test booth helps determine long-term reliability by using 330 nozzles to spray 3,123 liters per minute for eight minutes from the bottom, sides and top. This tests the robustness of a vehicle’s door and window seals to ensure no water leaks into the cabin during a severe rainstorm or other wet conditions. The test also helps ensure that water doesn’t interfere with powertrain venting systems and other underbody components.
The universal water test booth also enables a test that simulates the kind of misty conditions found in places like the northern Thailand. A fine mist can creep into areas of a vehicle that larger drops of water do not, potentially creating a leak by having water wick through weather strips.
GM’s 15-meter outdoor deep fording trough is designed for slow treks through water, like a stream crossing during a camping trip when water intrusion can compromise transmission fluids and powertrain components like the rear exhaust.
GM engineers also use high-pressure sprayers to test charge ports, powertrain vent and fuel system vent systems as well as vehicle air induction systems behind grille openings to ensure that consumers who do the same won’t damage components.
“Hopefully, most of our truck customers will never have to deal with extreme water conditions, but in case they do they can take solace in the fact that we’ve designed our vehicle components to handle it,” Chatchawan said.
DRIVING THROUGH FLOODED ROADS
When driving through flooded roads, there are four things that a driver should always remember:
• Check depth
• Proceed cautiously
• Go slow
• Avoid stalling
Chevrolet recommends never driving through anything you cannot see or walk through, or is deeper than the center of your wheels. Large SUVs and trucks can operate in deeper water, but find out what is the fording depth specific to your vehicle.
Floodwater hides what is underneath. So, if you have to drive through a flooded stretch, make sure the road is still underneath the water and not washed away. Also be wary of unfamiliar roads that may have dips too deep for fording. Alternatively, stop and observe if others can drive through it safely.
If you have to go through a flooded road, aim for the “crown” of the road, or near it, as the water is at its shallowest here. Use high revs and a low gear — first or “L” depending on the type of transmission. Keep a constant speed. Do not take your foot off the accelerator. A decelerating engine may induct water through the exhaust pipe and damage the catalytic converter. You also do not want the air filter in front to ingest water into the engine so drive very slowly. In both cases, damage will be severe and repairs costly.
Ease into the water at no more than 3 km/h, and increase to 6 km/h in the water. This will create a bow wave in front of the vehicle and a depression in water level around the engine bay, reducing the chance of water induction via the air filter and also damage to electrical and electronic components. Speeds higher than this will just push water into the engine bay through the front grille.
Proceed one vehicle at a time so you will not be forced to stop in the middle if the vehicle in front stalls. Also ensure no vehicles are coming the other way, as the wake it creates may drown your vehicle, especially if it is moving at unreasonable speeds.
Once out of the water, apply the brakes gently to dry them. “Ride” the brake with your left foot if you are familiar with this technique. Release when you feel the brake starts to “bite.” Also stop to inspect and ensure nothing such as plastic bags or other debris is stuck in the grille or radiator fins behind it.
Keep this in mind the next time you drive in the wet — 15cm of water will reach the bottom of some passenger cars; most passenger cars will start to float in 30cm of water; 60cm of flowing water can sweep most vehicles — even SUVs — away. It is not the speed of the flow, but the force and volume, so do not take risks.
Style across generations
FOR HER 2019 holiday collection, Criselda Lontok showcases her bold colors and designs for the sophisticated woman.
The fashion show, held at Rustan’s Makati’s The Gallerie, featured gowns and separates were adorned with the designer’s signature elements of nature such as leaves and flowers.
The models including Joy Rustia, Marga Nograles, Jojo Ocampo, Liza Chan Parpan, Penny Lopez, and Ria Fernandez, began the show with vibrant outfits of hot pink, lime green, and royal blue. The designs are fit for everyday wear, special events, or a night out.
The second half of the show was a lineup of Christmas and New Year hues of bold red and green, as well as sparkling silver and gold.
“It’s [about] nature. As usual, I’ve always identified with flowers,” Ms. Lontok told BusinessWorld shortly after the fashion show on Aug. 8, of her undying inspiration for her designs.
Besides her usual clientele, Ms. Lontok has explored styles for the young, with cocktail dresses, bomber jackets, and halter tops.
Much like spirited women she dresses, the new holiday collection is for, as Ms. Lontok puts it: “The usual, but younger.”
Criselda Lontok is exclusively available at Rustan’s Makati, Shangri-La, Alabang, Gateway, and Cebu. — Michelle Anne P. Soliman
S&P expects strong loan growth
DEBT WATCHER S&P Global Ratings sees Philippine banks’ loan growth at double digits this year as the banking sector and the Asia-Pacific region’s stable outlook is seen steady despite headwinds arising from trade tensions between the world’s two largest economies.
Gavin Gunning, S&P senior director and sector lead for Financial Institutions Ratings at S&P, said in a webcast last Wednesday: “Key expectations for the majority of outlooks in the Asia Pacific…the current stable trend is likely to persist. The majority of outlooks are generally stable and we think this trend will continue through the rest of the year.”
“Earnings and capital…are generally supportive of ratings at current levels. We see little ratings upside but we do note there are some downside risks at the credit cycle terms,” Mr. Gunning said.
Mr. Gunning said amid the US-China trade tensions, the cyclical downturn in Asia-Pacific should be “manageable” for majority of banks at current rating levels.
“Systemically-important private sector banks should continue to benefit from government support in most jurisdictions and we believe that will continue over the medium term… Interest rates remain low and central banks are dovish or becoming dovish. This should set the stage for potential deterioration in credit quality especially if there’s a short correction in asset prices and pull back in liquidity,” he said.
ASEAN BANKS SEEN STABLE
For the Association of Southeast Asian Nations (ASEAN), Ivan Tan, director at S&P’s Financial Institutions Ratings, said in the same webcast: “Our credit outlook is one of stability… However, we noticed that loan growth has slowed down basically due to headwinds from the trade war and also geopolitical uncertainty, the escalation of US-China trade tension, particularly in the corporate loans space.”
He noted that corporate loans of the banks in the region have come down sharply.
“The exception — like the countries where domestic consumption is driving the economy — so Philippines stands out,” Mr. Tan said. “The Philippines is not very export dependent. They have…infrastructure push going on. The domestic consumption remains very robust because of the young population.”
He said he expects local banks’ credit this year at a “very healthy double-digit growth jump to 15%.”
Mr. Tan, however, flagged the recent default of Hanjin Heavy Industries and Construction Philippines (HHIC-Phil) as a credit risk but said “this is not sectorial wide or fundamental deterioration in the credit quality per se. These are just one or two idiosyncratic risks…”
The South Korea-based shipbuilder filed for a corporate rehabilitation before an Olongapo court in January, leaving some $412 million in outstanding loans from BDO Unibank, Inc. Metropolitan Bank & Trust Co., Land Bank of the Philippines, Bank of the Philippine Islands and Rizal Commercial Banking Corp. in limbo.
Meanwhile, Mr. Tan said ASEAN banks will likely remain profitable despite the global monetary easing cycle on the back of cost controls.
“In terms of profitability…we expect profitability of [ASEAN banks] to remain quite good notwithstanding the [Federal Reserve] rate cuts…and a lot more economies have signaled their intention for more rate cuts…. What it means is that the interest margins of the banking system will come down,” Mr. Tan said.
“A lot of banks have invested in technologies and fintech and we are starting to see some rationalization in some other banks…even though margins are getting squeezed…we believe will enable the banks to maintain the fairly good net profit profile that they have,” he added.
Among the ASEAN banks S&P covers, loan quality has either stabilized or improved, Mr. Tan noted.
“Generally, with the policy rate cuts means that the servicing costs or repayment ability of the customers will be improved as the banks pass on the lower interest rates to their customers. We are seeing no widespread credit risks in the customers that the banks lend to,” he said.
Banks in the region are also expected to find support from “very good capitalization levels” amid global risks like the ongoing US-China trade war, Mr. Tan said, with lenders’ Tier 1 ratios comfortably above the regulatory minimum.
In its presentation during the webcast, S&P said Philippine banks’ Tier 1 ratio is at 15.4%, compared with Indonesia’s 21.3%, Thailand’s 15.8%, Singapore’s 13.6%, Malaysia’s 13.1%, China’s 11.0%, and India’s 10.8%.
Under the Basel 3 regime, banks’ Tier 1 capital must be at least 8% of their risk-weighted assets.
“All in all, the lower interest rate environment and the very healthy capitalization of the banks, our outlook is one of stability,” Mr. Tan said. — Mark T. Amoguis
Dito finalizing partnerships as it prepares to launch by Q2
DITO Telecommunity Corp. said it is finalizing deals involving the lease of key infrastructure such as cell towers and data centers, as it prepares to launch by the second quarter of 2020.
After receiving its certificate of public convenience and necessity (CPCN) last month, the new telecommunications player said it can now proceed with discussions and finalize partnerships with companies.
“Now, we’re in the final stages of negotiating for the commercial and the legal provisions of our contract, particularly with those that have the resources that we can utilize,” Dito Telecommunity Interim Chief Technology Officer Rodolfo D. Santiago told reporters last week.
“We will be initially doing leasing of resources for transmission, for access and even data center capacity,” he added.
Dito — which is owned by Dennis A. Uy’s Udenna Corp. and Chelsea Logistics and Infrastructure Holdings Corp. and China’s China Telecommunications Corp. — has a tight timeline to roll out its services to 37.03% of the country’s national population by July 9, 2020.
Within the one-year period, the company must also be able to deliver a minimum broadband speed of 27 Megabits per second (Mbps). If it fails to meet these commitments, Dito’s CPCN and radio frequencies will be taken back by the government.
Mr. Santiago said it is crucial for the company to tap existing infrastructure in order to reduce the burden of building a network from scratch.
“We are working very closely with the tower companies that have very solid experience in building. We will be utilizing them as much as possible, so that we can take maximum advantage of local capacity to build towers,” he said.
In March, Dito (then Mislatel) sought common tower proposals to kickstart discussions with tower providers on its infrastructure needs.
Given the population coverage required of the company by July, Mr. Santiago said it must build around 3,000 towers within the year. “We’re confident that if we build about 3,000 towers, we can achieve the 37%,” he said.
Dito has not closed a deal with any of the tower providers yet, but Mr. Santiago said the company has shortlisted about seven or eight from the 19 tower firms that approached it since March.
Until it finalizes deals, Mr. Santiago said Dito is focused on the other aspects of its rollout, with constant support from its Chinese partner in designing the company’s network.
“We’re banking on them in terms of their experience and their technical expertise. (They’re sending) consultants in terms of doing the network design. That’s essentially from them, the network design (of Dito),” he said. — Denise A. Valdez
Subaru introduces XV GT Edition
By Manny N. de los Reyes
I WAS in the Motor Image head office in Singapore earlier this year to interview the world-renowned dog whisperer, Cesar Millan, (who happens to be a Subaru ambassador and was taping his TV episodes there) when I came across a very well-dressed Subaru XV.
Our Motor Image host, CEO Glenn Tan, explained to us that what we were seeing was an almost-production-level special edition XV model. We learned further that it would be called the XV GT Edition and the big boss only smiled when we asked him if it stands for his initials (his staff refers to him as “GT”).
Of course, many car brands name their sportier models with the GT suffix or a variation thereof (i.e. GT-R, GTO, etc.). And this Subaru XV GT was no exception. Under the hood, it has the same engine as the standard XV, but outwardly (and inwardly), the GT Edition is dressed to impress.
And now, Motor Image Pilipinas, Inc. (MIP), the exclusive distributor of Subaru vehicles in the Philippines, has announced the much-awaited availability of the XV GT Edition. Previewed earlier this year in the Manila International Auto Show (MIAS), the special variant of the Subaru XV is now ready to roll out from Subaru showroom floors nationwide.
The sportier version of Subaru’s best-selling crossover is a collaboration between renowned engineering company Giken Co. Ltd. and Masahiko “Jack” Kobayashi, whom we got to meet and have an informal chat with right beside his gleaming handiwork. Kobayashi-san was the former Chief Designer (Head of Global Advanced Design Studio) at Subaru Corporation and the person behind the design language of at least 12 Subaru production models including the Levorg sports tourer and the iconic WRX STI.
This iteration, made especially for Asia, is equipped with dynamic and bold features such as front and rear bumper lip extensions, side skirts, 18-inch bespoke alloy wheels, and a roof spoiler. Inside, you’ll find special leather upholstery inspired by high-performance grand tourers from Europe.
Aside from steering-responsive headlights, where the light beams move in the direction the steering wheel is turned to ensure better visibility, other improvements in safety have also been made. A dual side-view monitor system comes standard to allow easier parking and maneuvering, especially in tight corners or blind spots. The XV GT Edition is also equipped with the X-Mode function, which lets you overcome any challenging weather or roads for added peace of mind.
The Subaru XV GT Edition is priced at P1,768,000. However, MIP is also offering a special price for the first batch of releases of the XV GT at a cool P1,718,000.
Yields on government debt decline on BSP’s rate move
By Christine J.S. Castañeda
Senior Researcher
YIELDS ON government securities (GS) fell across-the-board last week following the central bank’s decision to cut benchmark interest rates by a quarter of a percentage point.
On average, debt yields — which move opposite to prices — went down by 35 basis points (bps) week on week, the PHP Bloomberg Valuation (BVAL) Service Reference Rates as of Aug. 9 published on the Philippine Dealing System’s website showed.
“The bigger week-on-week declines in local interest rate benchmarks (PHP BVAL yields) was largely brought about by the widely expected [25 basis point]-cut in local policy rates on August 8 after GDP (gross domestic product) growth eased to 5.5%…and after inflation further eased to 2.4% in July,” Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort said in an e-mail.
“PHP BVAL yields further eased towards the end of the week after BSP (Bangko Sentral ng Pilipinas) Governor [Benjamin E.] Diokno signalled another possible 0.25-bp cut in local policy rates and another possible one percentage point-cut in RRR (reserve requirement ratio) of banks as early as the next monetary policy-setting meeting on September 26,” he added.
Meanwhile, in a separate e-mail, a bond trader said: “Yields continued to fetch lower after the People’s Bank of China fixed the yuan significantly lower [last] week, signalling to markets that China will utilize the yuan against any untoward actions from the United States.”
“Consequently, the said action prompted the US Treasury Department to label China as a ‘currency manipulator.’ Both retaliatory actions had resulted in further escalation of current tensions between the two major economies,” the bond trader added.
On the local front, the bond trader said: “[M]arket participants remained anchored on expectations of a 25-basis-point BSP policy rate cut, which the local central bank delivered despite some expectations of a stronger cut following the release of weaker-than-expected second-quarter Philippine GDP growth report.”
The BSP Monetary Board decided in its fifth review for the year to cut key policy rates by 25 bps, bringing the overnight reverse repurchase rate to 4.25% and the overnight deposit and lending rates to 3.75% and 4.75%, respectively.
The Monetary Board also decided to cut its inflation forecast for the year to 2.6% from the downward-revised 2.7% adopted in its June 20 review. Next year’s forecast was also revised to 2.9% from three percent previously.
The BSP’s policy-setting body also gave its first forecast for 2021: 2.9% with a tilt “somewhat to the downside” due to prospects of slowing global growth.
Meanwhile, in an interview aired over ABS-CBN News Channel on Friday, BSP Governor Benjamin E. Diokno said another cut in banks’ RRR “can take place some time next month.”
The BSP chief said he is committed to paring the RRR down to “single-digit level” before he ends his term in July 2023.
Hours before the Monetary Board’s policy meeting for the year, the Philippine Statistics Authority (PSA) reported that the economy expanded at its slowest pace in 17 quarters in the April-June period due lower private investments and tempered household consumption and government spending.
GDP grew by 5.5% in the second quarter, slower than the first quarter’s 5.6% and the 6.2% logged in the same period last year. The second-quarter turnout was the slowest expansion since the 5.1% recorded in the first quarter of 2015 and was also lower than the 5.9% median estimate in BusinessWorld’s poll of 15 economists and institutions.
GDP growth averaged 5.5% last semester, slower than the 6.3% in 2018’s first half and the 6-7% target set by the government for 2019.
Separate PSA data showed headline inflation slowing to 2.4% last month, down from 2.7% in June and 5.7% in July 2018. The latest result matched the 2.4% reading in July 2017 and was also the slowest since the 2.2% logged in December 2016.
The July headline figure fell within the Bangko Sentral ng Pilipinas (BSP) Department of Economic Research’s 2-2.8% estimate for the month and matched the median in BusinessWorld’s poll of 18 institutions.
The latest reading brought year-to-date inflation to 3.3%, past the midpoint of the BSP’s 2-4% target range for the year and above the 2.7% full-year forecast average for 2019.
At the secondary market last Friday, yields were lower than week-ago levels across-the-board. The 91-day Treasury bill went down by 44.3 bps to yield 3.375%. The 182- and 364-day debt papers likewise declined by 44.3 bps and 43.2 bps, respectively, to fetch 3.603% and 3.719%.
Rates of the two-, three- and four-year bonds also went down by 45.5 bps (3.857%), 46.3 bps (3.960%) and 41.8 bps (4.063%), respectively. Yields on the five- and seven-year debt papers likewise dropped 34.4 bps (4.159%) and 22.3 bps (4.303%).
Yields on the 10-, 20- and 25-year notes also went down by 20.8 bps, 21 bps and 21.2 bps, respectively, to end at 4.372%, 4.7% and 4.697%.
For this week, RCBC’s Mr. Ricafort said: “The underlying easing trend in Philippine interest rate benchmarks that have been ongoing for most weeks for more than three months already or since May 2019 could still continue especially if the long-term interest rate/bond yield benchmarks in the US and other developed countries continue to ease, largely brought about by the escalation of the US-China trade war.”
For the bond trader: “Local yields might move with a downward bias [this] week, as bets of weaker data on Eurozone GDP and Chinese retail sales might further ignite concerns on slowing global growth and fuel views of more easing moves from local and major foreign central bank.”
“Yields might also fall following the recent BSP policy rate cut and continued safe-haven buying amid escalating US-China trade tension,” the bond trader added.