Greenergy ends MoA with South Korean group

July 16, 2019 | 12:01 am

GREENERGY Holdings, Inc. has terminated its memorandum of agreement (MoA) with a Korean group that was supposed to develop for the listed company a number of ventures, including a transport hub and “smart” property projects.

The holding firm, led by businessman Antonio L. Tiu, told the stock exchange that the MoA was off because of the failure of TheBizlink Co. Ltd. and its local unit TheBizlink Philippines, Inc. to comply with its obligation within the prescribed period.

Greenergy said it had received a letter from the TheBizlink group saying that it was “still in the process of negotiating with several financial companies and investors for the initial investment in the project contemplated” in the MoA dated Jan. 30, 2019.

Greenergy said TheBizlink was also requesting for “additional period of time to conduct its due diligence.”

In reply, Greenergy sent a letter expressing its gratitude and appreciation for the support, but has decided to terminate the agreement.

Under the MoA, TheBizlink group was supposed to develop a transport hub, smart-farming agriculture area, smart-city commercial and/or mixed-use developments and other related developments.

Within 90 days from the execution of the agreement, TheBizlink was to provide Greenergy a funding facility in the initial amount $350 million provided that the legal, financial and technical due diligence on the project to be conducted by the group does not result in any material adverse findings involving the project.

On Monday, shares in Greenergy fell by 7.75% to close at P2.38 each. — Victor V. Saulon

How PSEi member stocks performed — July 15, 2019

July 16, 2019 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, July 15, 2019.

Domestic market capitalization of select stock exchanges in Asia Pacific (June 2019)

July 16, 2019 | 12:00 am

Gov’t drafting executive order to address high shipping costs

July 15, 2019 | 10:44 pm

THE government is drafting an executive order (EO) for the Palace addressing high shipping costs, Trade Secretary Ramon M. Lopez said.

In his speech at the 2nd Logistics Services Philippines Conference on Monday, Mr. Lopez said he plans to reconvene the technical working group that issued a joint administrative order (JAO) on the matter to work on the EO.

Mr. Lopez said measures require more “teeth,” with the EO expected to “really allow us to implement with greater force the provisions of the JAO.”

Mr. Lopez said that the target date for a draft is one month.

In a news conference at the same event, Mr. Lopez said, “The executive order will specify… the agency that will really be accountable for… the setting of shipping rates.”

The JAO, issued by Departments of Trade and Industry (DTI), Transportation (DoTr) and Finance (DoF), sought to regulate shipping costs and introduce port reforms to address inefficiencies.

The JAO will be replaced by the EO upon its effectivity.

The JAO is awaiting the signature of the DoF. Mr. Lopez said the DoF is legal issues such as which agencies will be responsible for enforcing certain provisions, and international shipping rates.

“On port congestion, wala nang issue don dahil BoC (Bureau of Customs), malinaw kanila iyon at nagawan na nga nila ng solusyon (there’s no issue on port congestion because it’s clear that the BoC has to take the lead there and they have come up with solutions), so that’s been addressed. So we’re now looking into the area (of) shipping rates.

Mr. Lopez said rates are freely set at the moment, and the government is looking at how , they can be managed to avoid overcharging.

“Kaya nga maingat kami dun sa pag-issue lang nung provision (that’s why we are careful in issuing the provisions), that particular part on the international shipping rates, ano ang (what are) allowable, and ano ang (what are the) parameters.”

According to a study conducted in 2017 by the World Bank, “An Assessment of Logistics Performance of Manufacturing Firms in the Philippines,” logistics costs as a percentage of sales were estimated at 27.16%, compared with Indonesia’s 21.4%, Vietnam’s 16.3% and Thailand’s 11.11%.

Mr. Lopez said the target is to lower the cost ratio to at least 20% by the end of year. — Katrina T. Mina

E-cigarette industry given until October to register with FDA

July 15, 2019 | 10:43 pm

E-CIGARETTE and vaporizer (vape) businesses will have until October to register their establishments and products before the Food and Drug Administration (FDA) or face possible seizure of their goods.

Speaking to reporters, FDA Officer-in-Charge Rolando Enrique D. Domingo said that businesses who currently involved in the sale, distribution, manufacture, import, and export of Electronic Nicotine and Non-nicotine Devices, the government acronym for which is END/ENNDS, will have to register with the FDA in order to obtain a license to operate. The agency will be giving these businesses a three-month transition period to do so since the Department of Health (DoH) issued DoH Administrative Order (AO) 2019-0007 last week.

“After the grace period, kailangan na ’yung nagtitinda, nagma-manufacture, nag-i-import, at nagtitinda ng retail ay may license to operate at kailangan ang products nila i-register (those who sell, manufacture, import, and sell at retail need to have a license to operate and also have their products registered),” he said.

The DoH AO 2019-0007 provides guidelines on the conduct of business for the ENDS/ENNDS industry. According to the guidelines, the sale of nicotine shots and concentrates is prohibited.

If businesses fail to follow the AO, Mr. Domingo said that the FDA will issue warnings ordering the establishments to comply. If these businesses continue to be non-compliant despite the warning and advisory, the FDA will issue a seizure order to remove all their products from the market.

As part of the AO, the DoH will also release rules that will govern refills for ENDS/ENNDS products. Mr. Domingo, who is also a Health Undersecretary, said, “Within the next three months we are going to have a complete list. What we don’t want are flavors that appeal to children.”

In a separate statement, the Health department said that there are studies affirming that e-liquids used for ENDS/ENNDS have some ingredients that put users at risk. The Health department also rejected the argument that ENDS/ENNDS products are a healthier alternative to tobacco products since more long-term studies need to be produced in order to prove these claims.

“The Department cautions the public regarding harmful chemicals in these devices such as nicotine, ultra-fine particles, carcinogens, heavy metals, and volatile organic compounds. Results generated from peer-reviewed studies show that e-cig juices contain high levels of addictive nicotine, which can result in acute or even fatal poisoning through ingestion and other means, “ DoH said in a statement on Monday. — Gillian M. Cortez

CoA cites Agriculture dep’t over P4.88B in unliquidated fund transfers

July 15, 2019 | 10:43 pm

THE Commission on Audit (CoA) said the Department of Agriculture (DA) had about P4.88 billion worth of unliquidated fund transfers to various agencies and nongovernment organizations in charge of implementing several projects for the department.

According to the 2018 CoA audit report, various offices of the DA had a total of P5.71 billion in fund transfers to implementing agencies and NGOs.

“Audit of 16 DA offices showed that funds transferred to IAs (implementing agencies) and NGOs during the year for the implementation of DA projects amounted to P5,714,851,478.71. Of the said amount, P4,883,115,478.07 or 85.45% of the funds transferred were not liquidated,” the state auditor said.

CoA added that P16.6 billion of the prior year’s balance of P23.7 billion remain unliquidated — or lack supporting documents showing how the money was spent.

CoA recommended that the DA send follow-up demand letters to the concerned implementing agencies and NGOs.

“(The Management agreed to instruct all DA offices to) adopt an effective monitoring scheme to enforce submission of liquidation reports of the concerned NGOs/IAs, as well as the progress reports,” CoA said.

It added that DA offices concerned should “conduct ocular inspections or visits to the available addresses or location of the grantees to validate the implementation of their projects and validate the existence and legality of concerned NGOs.”

Asked to comment, Agriculture Secretary Emmanuel F. Piñol said that he has yet to see the report.

“That would not be unusual though because we do transfer funds to other agencies, including LGUs (local government units). There is a certain period set for the liquidation of the transferred funds,” Mr. Piñol said in a text message to BusinessWorld. — Vince Angelo C. Ferreras

NEDA subcommittee approves doubling in Mindanao rail cost

July 15, 2019 | 10:42 pm

THE National Economic and Development Authority’s board said its Investment Coordination Committee-Cabinet Committee (ICC-CabCom) approved major upgrades in the estimated cost and scope of the ongoing Mindanao rail and Metro Manila bridge projects.

In a statement, NEDA said the authorized cost of the Mindanao Railway Project Phase 1-Tagum-Davao-Digos Segment (MRP-TDD) has been raised to P82.9 billion, more than doubling the 2017 estimate of P35.9 billion.

It said the new authorized cost covers additional structural and construction spending and the construction of an additional Davao Satellite Depot.

The other new costing is for the Metro Manila Priority Bridges Seismic Improvement Project is P7.9 billion from P4.3 billion. NEDA said the cost changes are due to the use of different technology for improvements to the Guadalupe Bridge across the Pasig River, the temporary detour bridges, and additional work shifts to ensure a shorter construction period.

The bridge project has also been granted an extension of one year and eight months, to August 2023, including a one-year defects liability period.

The ICC-CabCom also cleared the inclusion of the project management consultant at a cost of P14.39 billion, inclusive of VAT and contingencies, in the scope of works for the Philippine National Railways South Long Haul Project.

“We see changes in scope and cost as opportunities to optimize the project components and update the estimates. The government aims to speed up implementation while ensuring quality,” said Socioeconomic Planning Secretary Ernesto M. Pernia, who co-chaired the meeting with Finance Secretary Carlos G. Dominguez III.

LTFRB firm on June 2020 deadline to complete jeepney modernization

July 15, 2019 | 10:42 pm

THE government is intent on completing the jeepney fleet modernization program as scheduled, after the initial stages of the project started in 2017 resulted in only 4,000 modernized jeepneys taking to the roads.

The Land Transportation Franchising and Regulatory Board (LTFRB) said yesterday that the modernized jeepneys that are operational according to its latest count is well below the 170,000 units the government had targeted for modernization by mid-2020.

“Ang deadliest deadline nyan, June 30, 2020. Mawawala na lahat ng mausok at bulok na sasakyan, jeep, basically (The “deadliest deadline” for jeepney modernization is June 30, 2020. By then, all smoke-belching and dilapidated jeepneys will be phased out),” LTFRB Board Member Ronaldo F. Corpuz said in a briefing yesterday.

The government launched the PUV Modernization Program in June 2017, requiring operators to decommission units of a certain age, for replacement with modernized units.

For jeepneys, the requirement is to phase out units that are 15 years or older within three years from the launch of the PUV Modernization program, or by June 2020.

But two years into its implementation, some transport groups are still not on board with the government’s modernization initiative.

Yesterday, the Alliance of Concerned Transport Organizations (ACTO) and Pinagkaisang Samahan ng mga Tsuper at Operator Nationwide (PISTON) staged protests against the PUV Modernization Program, citing difficulties experienced by the drivers and operators in complying with the terms.

They asked the government to review the modernization scheme and withdraw plans to phase out older jeepney units that have been properly maintained and roadworthy.

The LTFRB said it is open to dialogue to discuss any concerns transport groups may have in the process of fleet modernization, but will remain firm on the new standards for Public Utility Vehicles (PUVs).

“Willing naman kami makinig… Doon sa nagsasabi na sumasang-ayon naman sila, subalit may mga hindi sila gusto sa proseso, pwede naman namin silang pakinggan doon (We’re willing to listen. Those saying they agree with the PUV Modernization Program but have questions on parts of the process, we will listen to them),” LTFRB Technical Division Head Joel D. Bolano said.

The agency also said it believes the remaining time for the June deadline is sufficient to achieve refleeting.

“Ugali nating mga Pilipino, kung kelan last hour, tsaka bibira (Filipinos are in the habit of doing things at the last hour),” Mr. Corpuz said. — Denise A. Valdez

Sugar output rises 0.23% in late June

July 15, 2019 | 10:42 pm

SUGAR production as of the third week of June rose 0.23% year-on-year, the Sugar Regulatory Administration (SRA) said.

By the third week, the agency reported that sugar production was 2.069 million metric tons (MMT), up from 2.064 MMT a year earlier. This is equivalent to 41.39 million 50-kilo bags, compared with 41.29 million a year earlier.

The crop year for sugar starts every September and ends in August.

Demand for raw sugar declined 17.63% to 1.68 MMT.

Total sugarcane milled decreased 8.01% year-on-year to 21.72 MMT.

Refined sugar output fell 8.39% year-on-year to 788,671.75 MT.

The millgate price fell 23.25% to P1,513 per 50-kilo bag. The retail price was stable at P45 to P50 per kilo, but was lower from P46 to P64 year on year.

Government economic managers are looking at liberalizing sugar imports to help lower high domestic prices and improve the competitiveness of the food industry. Finance Secretary Carlo G. Dominguez III has estimated that sugar costs are about double the world market price.

The sugar industry has countered that liberalizing imports along the lines of the Rice Tariffication Law puts at risk about 5 million jobs. — Vincent Mariel P. Galang

Palay output Q2 estimate pointing to 5.6% decline

July 15, 2019 | 10:41 pm

PRODUCTION of palay, or unmilled rice, for the second quarter has been initially estimated at 3.86 million metric tons (MMT), down 5.6%, the Philippine Statistics Authority (PSA) said.

In its Palay and Corn estimates report for the quarter, PSA said domestic palay production from a year earlier was 4.09 MMT.

Its estimate for corn production in the second quarter was 1.15 MMT, down 10.2% from the year-earlier production of 1.28 MMT.

The price of palay, the form in which most domestic farmers sell their crop, has been on a downtrend due to the threat of competition from cheap foreign grain. The Rice Tariffication Law, which freed up rice imports by private traders who must pay a 35% tariff on most of their shipments, particularly on rice from Southeast Asia, is pressuring farmers to sell their harvest for less while also depressing future planting intentions.

Early July, the Bureau of Customs reported that it collected a total of P5.9 billion in tariffs from P1.43 MMT of rice imported by private traders flowing the implementation of the Rice Tariffication Law.

The average farmgate price of palay, or unmilled rice, fell 0.3% week-on-week during the fourth week of June to P17.85 per kilogram (kg), the PSA said.

The PSA said the average wholesale price of well-milled rice fell 0.1% week on week to P39.30. At retail, it fell 0.2% to P42.92 per kg.

The wholesale price of regular-milled rice fell 0.2% week on week to P35.39 during the period. At retail, the price decreased 0.3% to P38.56.

The farmgate price of yellow corn grain during the period declined 0.1% week-on-week to P13.98 per kg. The average wholesale price fell 1.2% to P18.30 and the retail price decreased 1.2% to P23.68.

The average farmgate price of white corn grain was stable week on week at P16.25. The average wholesale price fell 2.1% to P22.40, and the average retail price declined 1.4%% to P28.82. — Vincent Mariel P. Galang

DoE touts new funding for indigenous communities hosting power projects

July 15, 2019 | 10:40 pm

THE Department of Energy (DoE) said the guidelines for indigenous communities to derive financial benefits from hosting of power generation plants and projects will soon take effect, and encouraged these communities to make appropriate preparations.

In a statement Monday, Energy Secretary Alfonso G. Cusi said the issuance of the guidelines is a “symbolic way” to mark the 25^th year of implementation of the Energy Regulation (ER) 1-94 Program.

He said the DoE “recognizes the right of our tribal and indigenous communities to optimize available social development opportunities and preserve their critical role as the stewards of our energy resources, particularly where the power plants and/or the energy resource development projects are located.”

The Department Circular DC2019-06-0010 prescribes the “Administrative Operating Guidelines for the Availment and Utilization of Financial Benefits by the Indigenous Cultural Communities/Indigenous Peoples, pursuant to DoE Department Circular No. DC2018-03-0005.”

Under the circular, the National Commission on Indigenous Peoples (NCIP) is to endorse all legitimate indigenous cultural communities/indigenous peoples (ICCs/IPs) beneficiaries to the DoE within 30 days from receiving from them all the necessary requirements.

The DoE will then notify the concerned generation company and/or energy resource developer of the inclusion of the host ICCs/IPs for the remittance of their financial benefits. The policy enables the host to use the funds for social development projects.

Mr. Cusi said the arrangement with the ICCs/IPs further strengthens the DoE’s commitment “to boost their participation, cooperation and sustained partnership in power development projects.”

The DoE circular was published on July 12, 2019 and will take effect 15 days from its publication date.

Under the ER 1-94 Program, communities hosting power generation facilities or energy resources are entitled to one centavo per kilowatt-hour of the total electricity sales of generation companies or energy resource developers.

One of the major changes introduced by the guidelines is the direct remittance of financial benefits to host communities for their immediate utilization. The move to streamline the release of funding was meant to eliminate the bureaucratic process that hampers socio-economic development of the communities hosting the power plants. — Victor V. Saulon

Law signed deploying social workers attachés to major OFW markets

July 15, 2019 | 10:40 pm

PRESIDENT Rodrigo R. Duterte has signed into law a bill requiring the presence of social welfare attachés in foreign labor markets with high concentration of Overseas Filipino Workers (OFWs).

Malacañang released to reporters on Monday copies of Republic Act No. 11299, which Mr. Duterte signed on April 17.

The new law amends Republic Act No. 8042 or the Migrant Workers and Overseas Filipinos Act of 1995, by adding a provision that requires the Department of Social Welfare and Development (DSWD) to deploy social welfare attachés to such labor markets.

The deployment sites will be determined in consultation with the Department of Foreign Affairs (DFA) and the Department of Labor and Employment (DoLE).

The social welfare attachés will “manage cases of OFWs and other overseas Filipinos in distress needing psychosocial services, such as victims of trafficking or illegal recruitment, rape or sexual abuse, maltreatment and other forms of physical or mental abuse, and cases of abandoned or neglected children.”

Their functions include to “respond to and monitor the resolution of problems and complaints or queries of OFWs and their families.”

The funding source for the law is the annual General Appropriations Act.

“The DSWD, in consultation with the DFA, DoLE, Department of Health, Philippine Overseas Employment Administration, Overseas Workers Welfare Administration and other relevant stakeholders, shall, within 60 days after the effectivity of this Act, formulate the necessary rules and regulations for its effective implementation,” according to the law.

The law takes effect 15 days after its publication in the Official Gazette or in a newspaper of general circulation. — Arjay L. Balinbin