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AboitizPower aims to boost contracted capacity to contestable customers

By Victor V. Saulon, Sub-Editor
ABOITIZ Power Corp. is targeting to increase its contracted capacity to contestable customers by at least 100 megawatts (MW) this year as it looks to target electricity users with consumption of at least 750 kilowatts, its president said.
“You talk to them, it’s voluntary naman ’di ba. If they’re interested, then you proceed,” AboitizPower President Antonio R. Moraza told reporters on Monday.
He said the company must have contracted last year between 300 MW and 400 MW of its 3,000 MW sellable capacity to contestable customers, or those that have the power to choose where to buy their electricity.
“We’re hoping to increase that by at least a hundred [megawatts] this year again,” he added. “I’d say 400-450 [MW], around that area.”
Mr. Moraza earlier told stockholders of the company that AboitizPower is growing its open access footprint, among other plans this year, which includes the sale of the 8.8-MW biomass power plant in Batangas under its unit Aseagas Corp. for which it took a hit of P3.7 billion.
Under existing rules, consumers whose power usage reached a monthly average of at least 1 MW are required to buy their electricity from retail electricity suppliers (RES).
That threshold was meant to be lowered to 750-kilowatts (kW) but the Supreme Court issued a temporary restraining order (TRO) against the lowering of the threshold.
This was after a number of entities, including educational institutions, questioned the legality of some of the provisions under the rules issued by the Department of Energy (DoE) and the Energy Regulatory Commission (ERC).
Among others, they contested the mandatory nature of the rules. The TRO also put on hold the ERC’s mandate to issue licenses to the retail electricity suppliers.
The DoE has since issued new rules that made the RES contracting “voluntary” instead of mandatory. It has also directed the ERC to issue guidelines on the licenses of the suppliers.
Mr. Moraza said competition among suppliers to corner a bigger share of the 1-MW customers has become stiffer as contracts start to expire. Those consuming at least 750-kW are also hesitant to buy electricity from retail suppliers because the Supreme Court has yet to rule on the legality of lowering the threshold.
“It’s becoming very competitive. Everybody wants to do the same thing,” he said.
However, Mr. Moraza said that the company would go ahead and target the 750-kW market segment despite the TRO.
Luis Miguel O. Aboitiz, the company’s executive vice-president and chief operating officer of the corporate business group, said in an interview that AboitizPower holds about a quarter of the “open access” market.
“We have four RES’s. Together they have a quarter of the market… Three licenses expired,” he said, adding that their customers could be transferred to the one with a valid license.
As of the fourth quarter of last year, 78 contestable customers are in the 750-kW to 999-kW contestability threshold, while 862 customers are in the 1 MW and above level.
Majority or 856 registered customers are in Luzon and the remaining 84 are in the Visayas. Of these customers, 462 registrants are engaged in industrial activities, while 478 are into commercial ventures.
The total registrants are about 59% of the 1,598 electricity end-users that were already issued a certificate of contestability by the ERC, the Philippine Electricity Market Corp. (PEMC) said in a report. PEMC is the repository of data on the retail market.

Thrift banks’ non-performing loans rise at end-March

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FILE PHOTO

SOURED DEBTS held by thrift banks picked up anew in March to outpace the growth in total loans, latest data from the Bangko Sentral ng Pilipinas (BSP) showed.
Non-performing loans (NPLs) held by these lenders stood at P44.633 billion, 11.4% higher than the P40.069 billion in soured debts incurred in March 2017.
The rise in bad loans outstripped the growth in total lending, which picked up by 9.3% to hit P865.484 billion. Outstanding loans stood at P792.147 billion a year ago, according to central bank data.
NPLs refer to unsettled debts for at least 30 days past due date. These are considered as risky assets due to a high risk of default, which would spell losses for the bank.
The soured loans accounted for 5.16% of total loans, taking a bigger share compared to 5.12% in February and from the 5.06% ratio posted a year ago.
Apart from these bad loans, non-performing assets in the form of seized properties amounted to P19.058 billion, roughly the same level from the previous year. This represents the value of land and other assets of value seized from non-paying clients in a bid to settle their outstanding obligations.
Despite the higher stash of problem loans, thrift banks dialled down the reserves for potential credit losses. The figure stood at P26.654 billion as of March, 4.4% lower than the P27.883 billion which was set aside the prior year.
Loan loss reserves can cover 59.72% of the entire NPL stash, dropping from a 69.59% coverage ratio in March 2017.
Thrift banks primarily target retail clients and small-scale firms, which are deemed riskier segments due to bigger chances of default. Consumer lending grew by 19.3% year-on-year, although slower than the 19.9% clocked in February.
On the other hand, deposits accepted by thrift lenders grew to P935.517 billion, 3.9% higher than the P900.147 billion deposits the previous year but at a slower pace compared to the surge in lending.
There are 55 thrift lenders operating in the Philippines as of December. These banks made a cumulative P4.05 billion net income during the first quarter, 7.2% higher than the P3.777 billion raked in during the comparable period in 2017.
The BSP keeps track of the NPL ratios of banks and financial firms in order to monitor asset quality and maintain the soundness of the local financial system.
Fitch Ratings said local banks could see a bigger share of bad loans as they extend bigger credit lines to the consumer and small business segments, but such a risk will remain “manageable” as firms enjoy favorable operating conditions. — Melissa Luz T. Lopez

Keeping heritage churches in focus


WHAT DOES it mean to take photographs of our churches and then exhibit them? Beyond nostalgia, the ongoing exhibition at the Metropolitan Museum of Manila called Up Front: Encountering the Sacred, which features pictures of church facades, wants the audience to look at, and then ponder over and appreciate the structures that make up such a big part of the nation’s heritage.
On view until June 9, the exhibit is part of the ongoing celebration of National Heritage Month, and is presented by the Metropolitan Museum, the Filipino Heritage Festival, Inc. (FHFI), and the National Commission for Culture and the Arts (NCCA).
The photographs were taken by the members of FUNtastic Philippines, a group of photography enthusiasts, and feature churches recognized as either a National Cultural Treasure, a National Historical Landmark, an Important Cultural Property, or a UNESCO World Heritage Site.
Aside from the more popular churches — like Barasoain in Bulacan, the Basilica Menor de Sto. Niño de Cebu, Miag-ao in Iloilo, and Daraga in Albay — the show also features the less well-known churches like Tumauini Church in Isabela, Santa Maria in Ilocos Sur, and San Vicente Ferrer in Nueva Vizcaya.
“Heritage and its importance is part of our group’s primary objective of promoting the Philippines as a prime destination. This year’s exhibit focuses one of the most important aspects of our culture and history: our heritage churches. These churches, which survived numerous political, social, natural, and historical upheavals, provide a deep insight of our country’s history, especially that of the community where they are situated,” Jun Bucao, one of the members of FUNtastic group who participated in the project, told BusinessWorld.
The exhibition looks at engaging the audience in a discourse about heritage churches which goes beyond their facades. From the significance of the unrecognized Filipino craftsmen whose brilliance is seen in the intricacies in their designs and their functions, to the present condition of the structures following efforts at rehabilitation and numerous interventions, the exhibition encourages people to contemplate on the underlying issues that surround the sacred structures.
“Each church has a unique story behind its architecture, its facade, and the every brick that makes up the structure. By understanding the significance of these churches, we gain a deeper understanding of who and what we are as a people,” said Mr. Bucao.
The photographs let the audience not just appreciate the form and ornamentation of the facades, but also the subtexts of political interests, the impositions and persistent resistance that marked Spanish colonial rule and also the acceptance of Christianity in our narrative as Filipinos.
I can raise questions like: What could have happened if we did not embrace Christianity? Could you imagine praying for miracles from the gods and goddesses of trees, flowers, and wind? What would the Philippines look like if it were a Muslim country?
The photographs of the centuries-old structures also let the viewer ponder on the present and the future: How many more earthquakes can they survive? Are they still significant to the modern generation whose definition of “churches” mean religiously going to shopping malls?
Special commemorative stamps that feature the colonial churches were also launched by the Philippine Postal Corp. during the exhibition opening on May 10.
For more information on the exhibit, visit www.metmuseum.ph. — Nickky Faustine P. de Guzman

SEC warns public against investing in Organico

THE SECURITIES and Exchange Commission (SEC) has advised the public against investing in Organico Agribusiness Ventures Corp. due to its illegal investment activities.
In an advisory posted on its website, the commission described Organico as a company with interests in organic farming, poultry and piggery, as well as telemarketing, and construction.
The SEC found Organico to be soliciting investments of at least 10 shares priced at P1,800 each from the public. In return, an investor is promised P450 per share every 15 days, for a total of P2,700 in three months.
The funds are allegedly used to support Organico’s businesses in organic farming and the piggery, among others.
The company was also found to offer a 90-day investment scheme where investors are promised a profit of P7,000 after three months, alongside their initial investment of P3,600. The money is supposedly used to raise a piglet.
“The public is hereby informed that Organico Agribusiness Ventures Corporation is not registered with the Commission as a corporation nor as a partnership under the Corporation Code of the Philippines and is not authorized to offer, solicit, sell or distribute any investment/securities,” the SEC said.
The country’s corporate regulator noted that soliciting investments require the company to secure a secondary license, as per Sections 8 and 12 of the Securities Regulation Code. These sections pertain to the registration of securities with the SEC.
Those found to be salesmen, brokers, dealers, or agents of Organico may also be prosecuted and held criminally liable by the commission. They face fines of up to P5 million, up to 21 years imprisonment, or both.
The SEC will also be submitting the names of people involved will Organico to the Bureau of Internal Revenue for the appropriate assessment of penalties and/or taxes. — Arra B. Francia

Treasuries signal bearish era

FOR global markets, it’s back to life, back to reality.
As the Treasury selloff kicks off in earnest, Citigroup Inc. says investors should prepare for a possible “normalization’’ of risk premiums across credit and emerging markets as the era of monetary distortion unravels.
A bearish breakout in the world’s largest bond market remains an underestimated risk, strategists Mark Schofield and Ben Nabarro wrote in a Monday note. They caution a “structural re-pricing of asset markets” — the like of which hasn’t been seen since the financial crisis — could be brewing.
“Recent dialogue suggests that investors are much more attuned to the scenario in which rising yields and a strong dollar choke off the recovery, bringing yields back down, than they are to a scenario in which we see rates back to pre-crisis levels,” the pair wrote.
Their bearish comments follow a retreat across global debt markets last week that drove the yield on 10-year US notes firmly above its 3.05% resistance level. Investor sentiment remains sanguine, according to the strategists, with bulls arguing Treasury headwinds have been exacerbated by transitory forces like oil and stretched positioning. And the healthy business cycle is seen offsetting a more-restrictive monetary climate, keeping risk premiums low.
The retreat in US debt has been driven by real yields rather than market-derived headline inflation expectations, suggesting an uptick in oil prices isn’t the main culprit behind the selloff, according to Citi.
The US economy’s upward march in concert with a term premium — the extra compensation to hold longer-maturity Treasuries over short-term securities —would justify the 10-year benchmark at 4% to 4.5%, according to Citi.
The strategists don’t necessarily see bond yields heading to such giddy heights. And even if they did, by slamming the brakes on two key drivers of global growth — emerging markets and US expansion — it could create a “self-stabilizing” mechanism that cushions the impact on risk premia by spurring a rally in US bonds.
It all adds up to a complicated picture for investors, but for Schofield and Nabarro that’s not enough to justify why the various Treasury breakout scenarios are priced so “asymmetrically.” That is, why traders judge that Treasury yields are more likely to tumble than continue their upward march. — Bloomberg

Traffic is the problem says CCP’s new chairperson Margie Moran

TRAFFIC, and not the misconception that art is elitist, is the reason why many find the Cultural Center of the Philippines (CCP) to be, literally and figuratively, hard to reach, said the CCP’s new chairperson, Margarita “Margie” Moran Floreindo.
The former president of CCP resident company Ballet Philippines (BP), speaking to the press after her oath taking on May 17, said that the notion that art is snobbish is only a misconception.
“It’s just a perception. For the past years, the CCP has been active in bringing the people here. We’ve been doing that for 10 years in Ballet Philippines, and I am sure the other resident companies are doing the same. It’s just a hallowed perception,” she said.
From 2016 to 2017, the CCP audience grew from 655,000 visitors to 678,000, and the target is to reach one million attendees by 2020.
“The problem here is the traffic. It makes it [a problem] for people from Quezon City, for instance, to come here. I find it so satisfying when we invite public school students to come and watch our shows and they dress up in their best, they look forward to it, and it changes their way of thinking when they are able to witness and experience a show. It’s the same with the young visual artists who come and visit the exhibits — it enriches them,” said Ms. Floreindo.
She was appointed as a member of the CCP’s Board of Trustees by President Rodrigo R. Duterte in January this year, and in April she was elected to head the board.
“I am not just a chairperson, but a chairperson plus something,” said Ms. Floreindo, who succeeded Emily Abrera.
Thanks to her being a household name — many people still remember that she won the Miss Universe pageant in 1973 — she said she’ll use her clout to talk, approach, and influence people to embrace more culture and art activities in the country. After all, it is the mandate for the CCP trustees: to make art and culture accessible to everyone.
“I will just build on what Emily Abrera has done, and she will still be in the Board, anyway. We also have new infusion of young members of the board, which makes it more exciting,” said Ms. Floreindo.
The current member of the board are Arsenio Lizaso, Stanley Borero Seludo, Nestor Jardin, Michelle Nikki Junia, Zenaida Tantoco, Mary Rose Magsaysay-Crisostomo, Anthony de la Cerna, Jaime Laya, and Emily Abrera.
She added that there will be no difference in leadership style. “There will not be any change in vision, we will follow the path that has been set by our predecessors,” she said.
For the coming years, the CCP is preparing for many celebrations like the 50th anniversary of CCP and Ballet Philippines (Kathleen Liechteinstein, an advocate of culture and arts, has taken over Ms. Floreindo’s former post as BP president).
Cinemalaya and Pasinaya — two of the CCP’s best attended events — will also mark 15th anniversaries next year.
Moreover, the CCP will be unveiling new buildings in the next few years — the Black Box Theater in 2019, with the New Artists Center and New Performing Arts Theater to follow.
“It will be a season of edgy and experimental productions that will suit the young audiences,” Ms. Floreindo said of her vision to bring attract more people to visit the CCP.
Many may have known Ms. Floreindo as a former beauty queen, but she has always had an artistic side, taking dance lessons in her youth then joining musicals that were shown at the CCP. She also co-produced the award winning film Bagong Buwan.
As BP president, Ms. Floreindo spearheaded fund-raising campaigns like Art Auctions and Ballet Barbie for BP, which have made the company sustainable.
During her presidency, BP was also able to establish branches of its dance school in SM Aura, the Greenhills Theater Mall in San Juan, and Victoria Sports in Quezon City. — Nickky Faustine P. de Guzman

UK retailer M&S says to shut more than 100 stores

LONDON — British food-to-clothing retailer Marks and Spencer will shut more than 100 “underperforming” UK stores in an ongoing restructuring, it said Tuesday.
The high-street chain has expanded its closure plans as it aims to shift at least a third of sales online, the group announced in a statement.
The London-listed giant did not specify the number of job losses — but thousands of positions are believed to be at risk, according to media.
“M&S will now close over 100 stores in total by 2022, including 21 that have already closed and the 14 stores that are announced today as proposed for closure or set to close,” the company said.
M&S had in November 2016 launched a five-year overhaul of its UK stores amid fierce competition from supermarkets and budget garment chain Primark — as well as online giants like Amazon. The restructuring was accelerated last year.
“We are making good progress with our plans to reshape our store estate to be more relevant to our customers and support our online growth plans,” said Sacha Berendji, M&S retail, operations and property director.
The retailer, which had a total of 1,035 stores at the end of its 2017-2018 financial year, will publish its annual results on Wednesday. — AFP

Wells Fargo to boost auto loans

WELLS FARGO & Co. Chief Executive Officer Tim Sloan said the firm is ready to increase lending for car sales after pulling back last year, and it’s now looking with consternation at the commercial real estate market.
In auto lending, “we’ve pulled back enough and now we’re going to be growing that business again,” Sloan said Monday in an interview with Erik Schatzker on Bloomberg Television. Yet, “there are some markets that we’re a little bit concerned about.”
Some transactions in commercial real estate seem “frothy,” he said, without giving examples. The San Francisco-based firm still likes that business, he noted.
Wells Fargo decided to rein in car financing in mid-2017 and tighten underwriting standards. The decision came as a drop in vehicle resale prices made it harder for lenders to blunt losses by repossessing cars when borrowers default.
The firm previously signaled it could resume growth in that business some time later this year. In February, Wells Fargo said it aimed to complete consolidation of its regional car-loan centers by April, and that lending would then increase within two quarters.
Sales of investment properties in Manhattan, the nation’s largest commercial real estate market, got off to a faster start in 2018 than last year as buyers became more aggressive. There’s also been a surge in prices for a less sexy type of property — warehouses — as e-commerce companies race to build distribution centers across the US to compete with industry leader Amazon.com Inc.
In an investor presentation this month, Wells Fargo Treasurer Neal Blinde said long periods of economic growth and good credit conditions give borrowers more options, putting pressure on banks to compete for financing deals. While some lenders take those risks, Wells Fargo prefers to maintain discipline in that part of the cycle, Blinde said.
Ten-year Treasury yields could rise in coming months after surpassing 3% recently, Sloan said. “Could I imagine us seeing a 10-year at 3 1/2% or 4 sometime in the next six to 12 months? Absolutely,” he said. A swift uptick in rates can damp the economy.
In the wide-ranging interview, Sloan also discussed the bank’s campaign to rebuild customer trust after a series of scandals. The company’s culture is “fundamentally fine,” he said, and its efforts now mostly focus on improving processes and internal systems. This month, Wells Fargo launched an ad campaign called “Re-Established,” reassuring the public that it’s addressing problems and making things right. — Bloomberg

To love it you must know it: the educational role of the Nat’l Museum of Natural History


TO FALL in love with something, one must first know it.
This is how historian Fr. Rene Javellana, SJ, a member of the National Museum Board of Trustees, explained the importance of the newly opened National Museum of Natural History, the third museum of Manila’s National Museum Complex, at a press briefing at its opening over the weekend.
“The first engagement in protecting biodiversity is [that you] fall in love with the land. Kung hindi mo minahal ang isang bagay, hindi mo aalagaan (If you do not love something, you will not take care of it),” he said. “For you to fall in love, you have to know [about it].”
The goal of inculcating an interest in — and perhaps love of — is made possible through new museum’s role as an educational institution which showcases elements of the country’s biodiversity through interactive exhibits for students and guests, as well as holding training sessions for teachers.
“It’s important for us to have a natural history museum because without it, many people would not even know [about] what we have. It’s not even about what makes the Philippines special, but even just what we have. They (guests) will learn that it is special, that it is ours, and, hopefully, they will fall in love with it, and with our country,” National Museum director Jeremy R. Barns told BusinessWorld during the museum’s opening on May 18, which was International Museum Day.
“Not everyone can go into the forest or dive underwater to see the beauty of nature firsthand, so we have to come up with something that will serve as a substitute for that and encourage people to learn and [to] know about the world around us, and, of course, about ourselves within that world,” he said.
Awareness of the country’s biodiversity would lead to more responsible behavior regarding our environment, more sustainable development, and, as a result, greater quality of life for all Filipinos, he noted.
The National Museum will be working closely with public schools and provide teachers with pre-excursion visits and training, “We [will] do teacher tours and training. By targeting teachers, we’re targeting so many people — all the students they will teach. Our teachers lack confidence. We need to give them a boost because they’re so important in our society,” Mr. Barns said.
MUSEUM TOUR
An elevator inside the “Tree of Life” at the building’s atrium ascends directly to the museum’s fifth floor where the narrative of the galleries begin. Guests can immerse themselves in information and displays related to mountains and volcanoes (fifth floor), forests and bodies of water (fourth and third floor), and finish with the living things and elements on land (second floor).
One must note that not all the exhibits are on view at the moment.
Galleries at the first three floors are now accessible. Gallery 9 showcases mangroves, beaches, and intertidal zones, including a display of preserved leaves and other specimen in a set of drawers. Gallery 10 on the marine realm features animal dioramas, preserved corals, and an indoor submarine showing videos on marine life.
Gallery 11 focuses on climate change. Among its features are an activity space for children and a film viewing area where guests learn about the Philippines’ UNESCO world heritage sites and the 300 endangered species found in the country.
Gallery 12 is designated for temporary exhibits — currently on view is The Pioneering Naturalists in the Philippines. The exhibits will be changed every three months.
The skeleton of Lolong — the largest saltwater crocodile in captivity — hangs from the ceiling of the Ayala Hall; while at the ground floor are displays of petrified wood and rocks which guests are allowed to touch.
UPCOMING ATTRACTIONS
In the months to come, visitors can expect to see more exhibits as the museum comes closer to completion.
The skeleton of a sperm whale will be suspended from the ceiling at the main entrance hall; Lolong’s taxidermied body will be displayed at Gallery 1 at the 5th floor, which focuses on an introduction to Philippine biodiversity; and the rest of the galleries — on geology, minerals and energy, life through time, the types of forests, and freshwater wetlands — at the 4th and 5th floors are targeted to open in June.
The National Museum of Natural History is located at T.M. Kalaw St., Rizal Park, Manila. It is open from Tuesday to Sunday, 10 a.m. to 5 p.m. Admission is free. — Michelle Anne P. Soliman

How PSEi member stocks performed — May 22, 2018

Here’s a quick glance at how PSEi stocks fared on Tuesday, May 22, 2018.

Which Philippine regions import/export more?

PUV upgrades to be required for fuel vouchers

THE DEPARTMENT of Transportation (DoTr) said that it is preparing to issue fuel vouchers for public utility vehicle (PUV) drivers and operators affected by higher fuel taxes, and may restrict voucher eligibility to those who have modernized their vehicle fleets.
At the House ways and means committee hearing yesterday on the second package of the tax reform program, legislators raised concerns about inflation they claim was caused by the preceding package, known as the Tax Reform for Acceleration and Inclusion (TRAIN) law. The Finance department has said that the bulk of the fuel price increase is due to higher global crude prices, currently at about $77 per barrel.
Representative Dakila Carlo E. Cua (Quirino), who chairs the committee, requested the immediate implementation of the remaining social benefits program as provided for in TRAIN.
TRAIN provides for increased social spending to compensate for the higher taxes affecting the poorest members of the public, including cash transfers and fuel vouchers.
“I would like to take this opportunity to remind our colleagues in the Executive that the start of TRAIN 2 does not mark the end of TRAIN 1. I reiterate my call for the immediate implementation of the Social Welfare Benefits Program, among other social protection measures of TRAIN 1. With several sectors appealing to halt TRAIN 1, we must first demonstrate that TRAIN 1 works so that we can decisively move forward with TRAIN 2,” he said during the hearing.
Although the government has begun distributing P2.4 billion in cash transfers, the fuel vouchers to transport operators under the Pantawid Pasada program has yet to proceed.
“We’re still preparing the guidelines,” DoTr Undersecretary Thomas M. Orbos said.
He said the department is hoping to avoid a repeat of a previous fuel voucher program where about a third of the 179,000 recipients were found to have been ineligible.
“You have to understand that the modernization program is very integral here,” he said, indicating that operators who buy upgraded vehicles are a good proxy for the list of eligible recipients. “In the past implementations of the Pantawid Pasada program, we were not able to monitor the recipients because of the inaccuracy of the data at that time,” he added.
“There were 30-40% who were supposedly not on the list but availed of the program. It is not fair to those who are legitimate operators,” he added.
According to Finance Undersecretary Karl Kendrick T. Chua, there are about P800 to P900 million worth of allocations for the program under the 2018 budget, valid only until the end of the year under budget rules.
Mr. Orbos said that the department is studying the possibility of making the vouchers conditional upon public utility vehicle (PUV) operators’ participation in the DoTr’s PUV modernization program (PUVMP)
That way, drivers and operators will be incentivized to register under the Land Transportation Franchising and Regulatory Board (LTFRB), and shift to modernized jeepneys with EURO-4 compliant engines.
“We’re looking at a much bigger picture for the PUVMP. If it is simply a one-time assistance given to PUV operators through fuel vouchers, then that would be it. But we want to have value-added support mechanisms by which we would rather incentivize those who want to modernize under the PUVMP rather than having to support those who operate obsolete and highly polluting PUV fleets,” LTFRB Chairman Martin B. Delgra III said. — Elijah Joseph C. Tubayan

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