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PNB to complete thrift bank integration by mid-2019

PHILIPPINE NATIONAL Bank (PNB) targets to complete the consolidation of its savings lending arm with the parent lender by mid-2019, as it is still working on regulatory approvals.

PNB Executive Vice-President Chester Y. Luy said the Lucio C. Tan-controlled lender expects to complete its absorption of PNB Savings Bank “before the second quarter…or perhaps first part of third quarter.”

“That is going well. We just need to have all the regulatory approvals in place,” Mr. Luy told reporters following PNB’s press briefing on Tuesday.

PNB announced in September last year that its board of directors approved the full integration of its wholly-owned thrift banking subsidiary into the parent lender.

The merger plan needs to be approved by regulatory agencies such as the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission.

PNB said that the integration will allow the parent bank to “deliver a more efficient banking experience” and “serve a wider customer base,” while PNB Savings Bank clients will have access to the universal lender’s diverse financial services upon full consolidation.

“That is why we’re putting the savings bank back into the bank to allow ourselves to have a very good cover of the consumer finance business locally,” PNB President and Chief Executive Officer Jose Arnulfo A. Veloso said during the press briefing.

He added that the consolidation will also enable its overseas Filipino clients to “have a referral bank of the consumer finance means into the country.”

Thrift lenders like PNB Savings Bank mainly target individual borrowers and small businesses, which are deemed riskier but higher-yielding segments compared with corporate clients which commercial banks usually serve.

Rizal Commercial Banking Corp. is also set to absorb its thrift banking unit RCBC Savings Bank to reduce operating costs and consolidate capital. The merger is expected to be completed in the second half of the year.

The planned integration of PNB Savings Bank into the parent will bring PNB’s total number of branches to 711.

PNB Savings Bank was the sixth-biggest thrift bank in the country in asset terms as of end-2018 with P61.8 billion.

PNB posted a net income of P1.9 billion in the first quarter of the year, up 30% from P1.5 billion posted in the same quarter last year. The bank also posted a P1.03 billion as of end-March, 21% higher year-on-year.

PNB shares stood at P52.50 apiece on Tuesday, up 10 centavos or 0.19% from the previous close. — Karl Angelo N. Vidal

Market seen riding debt rating upgrade euphoria

SHARES are seen to firm up in the remainder of the week as investors cheer the Philippines’ credit rating upgrade from debt watcher S&P Global Ratings late on Tuesday, marking the first such move since 2013 to the highest grade in the country’s history.

The benchmark Philippine Stock Exchange index (PSEi) rose by 0.71% or 55.70 points to close at 7,952.72 on Tuesday.

This marks a 0.4% increase on a monthly basis, as well as the main index’s return to the 7,900 level since April 11.

“We expect investor optimism, particularly from institutional funds, to push share prices and trading volumes higher. Aside from the stock market’s positive reaction, we are also keen on seeing the medium- to long-term impact of this upgrade on the country’s economy and fiscal position,” PSE President Ramon S. Monzon said in an e-mail, reacting to the S&P rating upgrade.

S&P raised the Philippines’ long-term sovereign credit rating to “BBB+” from “BBB” on Tuesday — three notches above minimum investment grade and just a step away from single “A” grade — citing the country’s strong economic growth trajectory supported by solid government fiscal accounts, low public indebtedness and the economy’s sound external settings. The rating was also assigned a “stable” outlook, indicating the country is likely to maintain the grade in the next six months to two years since the economy is expected to remain strong over the medium term.

“I expect the PSEi to react positively to this news, especially now that the Philippines is one notch away from ‘A’ rating,” Timson Securities, Inc. Trader Jervin S. de Celis said in a mobile phone message.

“This should encourage foreign investors to pour in more investments into our market and this might be a reason for the bourse to revisit the 8,000 level this week or early next week.”

Unicapital Securities, Inc. Technical Analyst Jeff See also said the PSEi could retest 8,000 this week since it has been able to hold the 7,800 position.

In a text message, Mr. See also cited as drivers “[m]arket speculation on BSP (Bangko Sentral ng Pilipinas) will cut interest rates and lower bank reserves” when the Monetary Board holds its third policy review for the year on May 9.

“Companies will also be releasing their first quarter 2019 earnings by May.”

BSP Governor Benjamin E. Diokno, who assumed his post in early March, has cited the need to bring down banks’ reserve requirement ratio — which at an already-reduced 18% is still “really high” — and said cutting benchmark interest rates would be just a matter of timing.”

Mr. Diokno said last week that a rate cut will depend on key macroeconomic data, the outlook on El Niño’s impact on farms and oil price movements.

Meanwhile, a number of firms are scheduled to release their first-quarter earnings reports this week, including Metro Pacific Investments Corp., Aboitiz Power Corp. and Aboitiz Equity Ventures, Inc. — Arra B. Francia

Restaurant Row (05/01/19)

Dusit Thani’s special dinner

A SPECIAL six-course Thai dinner, paired with the award-winning wines of GranMonte, will be served on May 3 and 4, 6 p.m., at Benjarong, Dusit Thani Manila. Teaming up are Thaintom Chantharawan of the Michelin-starred restaurant Chim by Siam Wisdom, Visootha Lohitnavy, oenologist and winemaker of GranMonte, and Wathcarapon Yongbanthom, Benjarong Manila’s Thai chef de cuisine. Limited slots are available. For reservations, call 238-8888.

Crimson marks 5 de Mayo

LA RUMBA Cinco de Mayo buffet at Crimson Hotel’s Café Eight.

FROM May 3 to 11, The Crimson Hotel’s Café Eight celebrates Mexico’s Cinco de Mayo with La Rumba, a buffet spread inspired by the rich diversity and vibrant flavors of the Mexican cuisine. There will be flavorsome appetizers such as chicken taco salad, stuffed jalapeño, pork empanada, pinto beans and chili with avocado salsa, and traditional Mexican soups such as pozole and albondigas, while the restaurant’s live and carving stations will serve stuffed beef, tacos el Pastor, Chipotle-marinated dorado, beef chimichangas and fajita sandwiches. The main dishes range from gambas al ajillo and pork carnitas, to vegetable chili lasagna and meatballs enchilada. For desert there’s churros, flan de manga, corn cheesecake with tamarillo, and apple burrito. The buffet is P1,470++ per person and includes the buffet and unlimited Mexican beer. Guests can also avail of the buy-one-get-one-free promo on all Tequila cocktails. For details, visit www.crimsonhotel.com/manila/, or call 863-2222.

Mother’s Day at TWG Salon

MOTHER’S DAY comes early as TWG Tea offers a Mother’s Day Set Menu from May 5 to 26 at all its salons in Greenbelt 5, Shangri-La Plaza, and Central Square. Begin the meal with seared halibut fillet wrapped in a chive crepe with baby potatoes and shallot confit, followed by squid and scampi pasta served with shimeji mushrooms, garlic and parsley infused with Tokyo-Singapore Tea. It is suggested to pair this dish with a warm cup of Geisha Blossom Tea or the French Earl Grey Tea. The meal ends with a heart-shaped gateau of honeycomb layered with strawberries and banana, coated with Silver Moon Tea infused white chocolate topped with dried roses. The TWG Tea’s Mother’s Day Set Menu is priced at P1,250 for a starter, main course, tea, and dessert.

Party with Jose Cuervo

CELEBRATE Cinco de Mayo with Jose Cuervo which is holding three parties in Metro Manila on May 4. The parties will be at Poblacion, Makati City, with select partner bars in Don Pedro and Alfonso St.; at Pop-Up in Katipunan, Quezon City; and The Island in Bonifacio Global City, Taguig. Partygoers can enjoy five shots of Jose Cuervo tequila at partner bars for P300.

Happy Hour at Wolfgang’s

THE newest drinking place in Bonifacio Global City, Wolfgang’s Steakhouse by Wolfgang Zwiener Bonifacio Global City kicks off evening with its Happy Hour Bar menu and specialty cocktails. Happy Hour runs from 3 to 7 p.m. and 9 p.m. to midnight. The bar menu includes katsu steak sandwich, truffle fries, and the Seafood Taster, among others. The specialty cocktails include a rum-based Lemongrass Mojito, gin pomelo Downtown Manila, Jalisco Spike, and Overthyme which combines thyme, oregano and strawberry with Botanist Gin and ginger beer. There are also imported draft beers, classic cocktails, and more.

Catch them if you can: the soaring business of downing drones

AFTER troublesome drones infiltrated London’s Gatwick airport late last year, disrupting passenger flights and costing potentially millions of pounds in revenue, that was the instinctive question posed by the watching world.

But for some businesses, shooting them down is a dangerous and unfeasible answer. They’re starting to tout better ideas: firing a net, jamming the drone, using a bigger drone to scoop it up.

These companies are part of an emerging industry offering myriad solutions, all hoping to solve the problems caused when drones fly where they’re not supposed to fly. The US Federal Aviation Administration announced in early 2018 it had logged more than one million registered drones, and Goldman Sachs Group Inc. predicts that by 2020, there will be 7.8 million shipments of consumer drones — an industry worth $3.3 billion in revenue. But as drones proliferate, major incidents will likely increase, raising questions about how to keep wayward devices in check.

“Laws will not stop drones; only technology will,” said Joerg Lamprecht, chief executive officer and co-founder of Dedrone Holdings Inc., a company that specializes in drone detection. “The race is on; the future is unmanned; and we’ve got to be staying in charge and in control.”

GOOGLE, AMAZON
Drones are becoming cheaper, increasingly accessible and more frequently used in business. An offshoot of Alphabet Inc.’s Google, Wing Aviation LLC, on Tuesday became the first drone operator to receive government approval as an airline, enabling it to begin routine deliveries in US skies.

Amazon.com Inc. has experimented with delivery by drone, and construction companies like McCarthy Building Cos. are using them to survey sites. Drone photography is proliferating and has sparked drone film festivals, and a breed of the devices designed for racing is rapidly gaining popularity. Let’s not forget finance types, who can invest in an exchange-traded fund dedicated to drone-focused stocks.

But when drones become problematic, and require detecting and disabling, it’s too dangerous to just shoot them down, even if that seems like the easiest answer, according to Arthur Holland Michel, co-director at the Center for the Study of the Drone at Bard College in New York. Bullets aimed at drones need to land somewhere, potentially causing damage and harm.

NIMBLE FLIERS
In any event, drones aren’t that easy to hit. Take the example of the DJI Phantom 4, the most popular drone in the US, according to the FAA data, analyzed by Bard. This drone — succeeded now by newer models — has a top speed of about 45 miles per hour, can fly as high as 6 kilometers (3.7 miles), and an almost 30-minute flight time, according to its manufacturer SZ DJI Technology Co.

Drones designed for racing are even more nimble. Their top speeds can reach into the triple digits; they can change direction instantly and have a dangerous tendency to fall out of the sky when their operator signal is cut.

“You cannot simply do it with existing technologies used with shooting regular aircraft,” Holland Michel said.

HAVOC WREAKED
Drones have wreaked havoc on a number of occasions. In the Gatwick case, drone incursions halting travel for more than 120,000 people over 36 hours. In August last year, two drones laden with explosives attacked Venezuelan leader Nicolas Maduro during a military parade.

In 2015, a drone landed on the roof of the office of Japanese Prime Minister Shinzo Abe. Also in 2015, a drone accidentally crashed onto the lawn of the White House, triggering a brief lockdown.

“It’s a large issue, and not just for airports, but for everybody that shares airspace above their head,” said Jim Hall, who is a former chairman at the National Transportation Safety Board.

Companies including Dedrone, OpenWorks Engineering Ltd., Fortem Technologies Inc., DroneShield Ltd. and the non-profit charitable trust Battelle say they have solutions. They’re all developing counter-UAS, or unmanned aircraft system, solutions. The technology is very new — at times so new — its terminology is not yet standardized.

CANNONS, MESH
UK-based OpenWorks sells a shoulder-mounted cannon that fires a net to catch the drone. DroneShield, based in Sydney, offers a large, gun-shaped jammer that when triggered will force a drone to land, or fall out of the sky. Dedrone, based in San Francisco, creates a mesh network designed to detect and identify drones based on how they “talk” to the operator by intercepting signals, feeding this information to a complementary jamming system developed by Battelle, of Columbus, Ohio.

Fortem Technologies uses a specialized radar to detect the drone — and attaches it to a bigger and faster drone. The firm’s DroneHunter can chase the target “like a dog on a leash,” leading to its capture, said the Pleasant Grove, Utah-based company’s Chief Executive Officer Timothy Bean.

OpenWorks says it has deployed hundreds of its devices. DroneShield, which went public in 2016 and trades on the Australian Stock Exchange, signed an accord with STC Specialized, an arm of the Saudi Telecom Company, in March, to cooperate on sales opportunities.

CAREFUL APPLICATION
These technologies have to be carefully applied, and not just used at will. Drones are considered aircraft under federal law — and just like regular aircraft, it’s illegal for citizens to sabotage or destroy them. The penalty can be up to 20 years of prison, said Michael Beylkin, an attorney in the Denver office of Fox Rothschild, a law firm with specialties including laws governing drones used in media and entertainment.

There are no exceptions, unless the aircraft is invading your private space, according to Beylkin. Even then, a drone would have to be dive-bombing a person repeatedly, and the response can only be proportionate, he said.

Devices that aim to jam drones similarly cannot be used outside of strict parameters: They are restricted devices that law permits only federal agencies to use. And with the new technology comes other limitations: Jamming devices don’t discriminate between targets and can disrupt everything from Wi-Fi internet to other planes. Pursuit drones need to be faster and more agile than their targets requiring significant technological innovation.

For the former National Transportation Safety Board Chairman Hall, the answer is better legislation, military-grade technology, and closer cooperation on the issue between authorities and operators. — Bloomberg

Peso to climb after S&P upgrade

THE PESO is seen to strengthen against the dollar for the rest of the week, propelled by the sovereign debt rating upgrade from S&P Global Ratings.

On Tuesday, the local currency barely moved versus the greenback, as market participants stayed on the sidelines ahead of the US Federal Reserve policy meeting.

Michael L. Ricafort, Rizal Commercial Banking Corp. economist, said the peso will likely strengthen after the global debt watcher raised the country’s long-term sovereign credit rating by a notch to “BBB+” from “BBB.”

“The latest credit rating upgrade by S&P…will be positive for the peso and the rest of the local financial markets, as the Philippines’ higher credit ratings will increase international investor confidence and interest to put more money in the country,” Mr. Ricafort said in a text message.

S&P on Tuesday upgraded the Philippines’ debt rating to “BBB+,” two notches above the minimum investment grade. It also assigned a “stable” outlook to the rating, which means it expects to maintain this grade in the next six months to two years.

“We raised the rating to reflect the Philippines’ strong economic growth trajectory, which we expect to continue to drive constructive development outcomes and underpin broader credit metrics over the medium term,” S&P said.

“The country’s latest credit rating upgrade may fundamentally allow a bigger number of international/global funds to increase investment exposures in the country,” said Mr. Ricafort. “This will also increase investor appetite on the Philippines as the credit rating upgrade reduces risk premium, which would lead some easing of local interest rates/bond yields and more price gains in the local financial markets.”

Nicholas Antonio T. Mapa, ING Bank N.V. Manila senior economist, said the upgrade “limits the reliance on interest rate differentials” to push the local unit, as foreign flows are “seen to continue even with less attractive carry trade opportunities.”

“[T]he upgrade also shows that ratings agencies view the external position of the Philippines as favorable with its more than adequate level of gross international reserves and the proverbial “aces up our sleeves” in OF (overseas Filipino) remittances and BPO (business process outsourcing) receipts, two sources of FX (foreign exchange) akin to the Philippine dynamic,” Mr. Mapa said in an e-mail on Tuesday.

Meanwhile, a foreign exchange trader said on Tuesday the peso-dollar move will be dependent on the decision of the Fed’s policy-making body Federal Open Market Committee (FOMC).

“By the time we come in, the FOMC meeting is already out. The FOMC decision will dictate the move,” the trader said in a mix of English and Filipino.

Fed officials are expected to keep interest rates unchanged during its third policy meeting this year, even as US President Donald J. Trump urged the central bank to use available tools to move the economy.

“We have a potential to go…up like a rocket if we did some lowering of rates, like one point, and some quantitative easing,” Mr. Trump said in a series of tweets.

For the rest of the week, the trader expects the peso to move between P52 and P52.25, while Mr. Ricafort gave a P51.80-P52.10 range. — K.A.N. Vidal

How much goods and services can minimum wage earners across regions now afford?

How much goods and services can minimum wage earners across regions now afford?

UST Tigresses claim 2nd seed in Final Four

By Michael Angelo S. Murillo
Senior Reporter

THE UNIVERSITY of Santo Tomas Golden Tigresses enter the Final Four of women’s volleyball in Season 81 of the University Athletic Association of the Philippines as the number-two seed after edging defending champions De La Salle Lady Spikers in four sets, 25-14, 25-23, 23-25 and 25-19, in their one-game playoff for the second spot on Wednesday at the FilOil Flying V Arena in San Juan City.

Afforded an opportunity to claim the second spot when they and the Lady Spikers wound up with identical 10-4 records at the end of elimination play last weekend, the Tigresses took full advantage of it and spiritedly played and came out steadier in the playoff to get the better of La Salle and finish second with the twice-to-beat advantage to boot in the semifinal.

The Tigresses came out galloping to start the contest, racing to a 16-11 lead by the second technical timeout of the first set.

La Salle tried to shoot its way back but UST, on the lead of Sisi Rondina and Eya Laure, would not allow any Lady Spikers comeback as it sped with a 9-3 blast to claim the set and the 1-0 lead.

In the second set the two teams slugged it out early but the Tigresses took early advantage, 8-6.

Rondina And Company then made a ferocious run to extend their lead to eight points, 16-8, midway.

La Salle, however, would respond with a strong run of its own as Des Cheng and May Luna started humming.

They led the Lady Spikers’ 9-1 run to narrow the gap at 18-17.

UST remained undeterred by it and instead of folding it buckled down to work to create another separation, 24-18.

La Salle though was not to go down without a fight, charging back to come within a point anew, 24-23, and angling to pull the rug from under UST.

It efforts were eventually crushed as Laure connected with a kill to close out the set and send the Tigresses up, 2-0.

Unlike the first two sets, La Salle had a fast start to begin the third frame, building a 6-1 advantage.

The Tigresses did not stay down for long, outscoring their opponents, 7-1, to overtake the Lady Spikers and squeak past, 8-7, by the first technical break.

A back-and-forth ensued with UST still managing to stay on top, 16-15, by the halfway point.

The Lady Spikers got an early cushion in the homestretch with Luna taking charge, helping her team to a 21-18 advantage.

Rondina once again would rally her team back, reclaiming the edge, 23-22.

La Salle dug deep after, first tying the count at 23-all before going for two points to win the frame and stay in the contest, 2-1.

The fourth set began nip-and-tuck until the Tigresses made a mini run to take a 16-13 lead by the second technical break. Having the momentum, UST did not relent from there. With Rondina from the firing end, they raced to a 22-16 advantage and never looked back after.

Rondina led UST with 29 points, 27 of which from attacks. Laure backstopped her with 17.

Rookie Jolina Dela Cruz paced La Salle with 12 points.

“We really wanted to win this game. We said to ourselves we have nothing to lose and that we just have to go for it and play,” said Rondina after their victory.

“But there is no relaxing right now. We will continue working and stay on the same page to achieve our goals,” she added.

UST and La Salle will begin their Final Four matchup on Sunday, May 5.

Warriors now up, 2-0

KEVIN DURANT led a balanced attack with 29 points Tuesday night as the Golden State Warriors went up 2-0 in their Western Conference semifinal series against the Houston Rockets with a 115-109 win in Oakland, California.

Both Warriors star Stephen Curry and Rockets star James Harden sustained injuries in the contest.

After a three-day break, the series shifts to Houston on Saturday and Monday.

For the second game in a row, all five Warriors starters scored in double figures, including Curry, who dislocated the middle finger on his left hand early in the game and yet still managed 20 points.

Curry didn’t seem bothered by the injury after returning quickly to the game, but the same couldn’t be said of Harden, who sustained a scratched left eye shortly after Curry’s mishap.

Harden finished with a game-high-tying 29 points but often was seen squinting and rubbing his eye after returning to action.

The Warriors took advantage of 18 offensive rebounds and 24 points off 18 Rockets turnovers to overcome Houston’s 51-33 dominance in points scored off three-pointers.

Durant, who had 35 points in Golden State’s home win in Game One on Sunday, shot 9-for-22 from the field in Game Two.

Klay Thompson added 21 points and Andre Iguodala 16 for Golden State. Warriors forward Draymond Green had another outstanding all-around game with 15 points, 12 rebounds and seven assists.

Chris Paul complemented Harden with 18 points, seven rebounds and six assists for the Rockets, who went 3-0 at home in their first-round triumph over the Utah Jazz.

Eric Gordon had 15 points and Austin Rivers 14 for Houston, while Clint Capela (14 points, 10 rebounds) and PJ Tucker (13 points, 10 rebounds) collected double-doubles.

The Rockets outshot the Warriors 46.8% to 46.2% but attempted fewer field goal attempts.

Curry was the first to head to the locker room just 3:29 into the game, having jammed his finger into the basketball.

X-rays were negative, and Curry, with two fingers on his left hand taped together, was able to return to the game a little more than three minutes later.

Harden was inadvertently swiped in the left eye by Green just before the midpoint of the first quarter.

Harden, who had yet to score in the game, was gone for nearly a full quarter, returning to the game with 7:09 left in the half and Houston trailing 36-31.

The Rockets fell back by as many as 11 before Harden poured in 10 points in the final 4:27 of the half, helping Houston stay within arm’s length at 58-49 at the break.

BUCKS LEVEL SERIES
Meanwhile in Milwaukee, Giannis Antetokounmpo scored 15 of his 29 points in the third quarter and the top-seeded Bucks pulled away for a 123-102 victory at home over the Boston Celtics to even their Eastern Conference semifinal at one game apiece.

The Bucks dominated the third by outscoring the Celtics 39-18 and ended the period with an impressive 24-2 run over the final 7:06.

Antetokounmpo keyed the clinching run by hitting four free throws, a pair of 3-pointers and a tip-in.

Game 3 is Friday night in Boston. — Reuters

Hotshots nab Game One of Philippine Cup finals

By Michael Angelo S. Murillo
Senior Reporter

THE Magnolia Hotshots Pambansang Manok went 1-0 up in their best-of-seven PBA Philippine Cup finals series with the defending champions San Miguel Beermen following a gutsy 99-94 victory in Game One on Wednesday at the Smart Araneta Coliseum.

Banking on a total team effort on both ends of the court, the Hotshots successfully overcame the Beermen, who got a monster game from reigning league most valuable player June Mar Fajardo, to move a step closer to the title of the season-opening Philippine Basketball Association tournament.

The first two quarters had the two teams going back-and-forth with Magnolia bucking early struggles and going on a strong finish led by Paul Lee to claim the opening quarter, 34-30.

In the second it was San Miguel’s turn to make a run after a slow start behind Mr. Fajardo and Alex Cabagnot to go on top, 55-52, at the halftime break.

The third quarter saw the Hotshots making a move to pull away, opening the frame with a 15-4 run in the first five minutes.

San Miguel regained its footing and pulled itself to within one point, 67-66, after two minutes.

But Magnolia would maintain control the rest of the way as Jio Jalalon made his presence felt on offense, building a seven-point lead, 80-73, heading into the final quarter.

The Beermen did not waste much time in trying to gain some headway at the start of the payoff canto.

Their push, however, was met head-on by Magnolia which continued to hold sway, 88-79, with eight minutes to go.

San Miguel then turned to Mr. Fajardo to will it back in the game, with the five-time league MVP obliging with 15 straight points to help the Beermen stay close of the Hotshots, 95-94, with a minute and half left on the game clock.

Ian Sangalang gave the Hotshots further breathing room, 97-94, when he drained a jumper from the top of the key with 1:16 remaining.

The Beermen had chances to level the count after but three-point attempts by Arwind Santos and Marcio Lassiter did not connect.

Mr. Lee made it a five-point lead for the Hotshots, 99-94, with 17 ticks remaining.

It was a hole that San Miguel would not be able to claw itself out from as Magnolia went on to claim the win.

Mr. Lee led six players in double digits in scoring for Magnolia with 18 points, followed by Mr. Sangalang and Mark Barroca with 17 apiece.

Mr. Jalalon had 16 and Rafi Reavis and Justin Melton 12 and 11 points, respectively.

For San Miguel it was Mr. Fajardo who showed the way with 35 points and 21 rebounds.

Mr. Cabagnot had 18 points while Mr. Santos had 13 points and 15 boards.

Game Two of the finals is on Friday also at the Big Dome.

DoE seeks WESM registration for more power generators

THE Department of Energy (DoE) said embedded generation plants, or those that are not directly connected to the power grid but supply electricity to a distinct area, are now required to register with the Wholesale Electricity Spot Market (WESM).

“If they are not participating in WESM activities, then we don’t know when they are in or out, and then suddenly if they are out then WESM has to provide the power,” said Mario C. Marasigan, director of the DoE’s Electric Power Industry Management Bureau, said in a recent interview.

He said there is a need for embedded power generation plants to register to allow the regulator as well as the grid operator to know exactly the existing power demand and the corresponding power supply to meet it.

Embedded power generating units are indirectly connected to the grid — or the interconnected power assets that transmit high-voltage electricity through transmission lines, towers and substations — through the distribution system that supplies power to its host distribution utility.

He said the DoE had issued a department circular providing for the framework governing the operations of embedded generators. That circular had already been published and should be in effect by now, he added.

“Once it’s effective, then they should follow. For example, in Mindanao if I’m a 5-megawatt (MW) embedded generator, I should register now with WESM. If I am below [5-MW], then I need not,” Mr. Marasigan said.

He said the need to register with the spot market comes at a time when power plants had been failing and reducing available supply. If embedded generators similarly fail, the distribution utility they serve would need to turn to the grid to source power.

Mr. Marasigan said if the embedded generator is not participating in the spot market, the DoE will not be able to allocate the required capacity should the generator go into an unplanned outage.

Under the DoE circular, embedded generators that provide at least 5 MW in the Visayas and Mindanao grids are to register with the WESM. In Luzon, the corresponding capacity threshold is 10 MW.

Embedded generators that do not meet the threshold may register in the WESM on a voluntary basis. End-users with generating units exporting power to the grid or distribution system should register in the WESM both as customer and generation company. — Victor V. Saulon

NEDA-Davao calls for expansion of construction labor pool amid slowdown

DAVAO CITY — A worker shortage slowed the growth of the construction industry in the Davao Region to 18.1% in 2018 from 37.9% the previous year, regional economic planners said, citing Philippine Statistics Authority data.

Maria Lourdes D. Lim, regional director of the National Economic and Development Authority (NEDA), said last week at a news conference that the lack of construction workers has been noted across the region, with both government and private sector projects suffering delays due to the shortage of skilled manpower.

Ms. Lim said although the problem “is not that big” yet, skills training programs have to be stepped up even as she recognized ongoing initiatives by both the public and private sectors.

She said the Technical Education and Skills Development Authority should conduct “more capacity-building” activities in key areas of the region to “increase the number of construction workers.”

About two years ago, the Department of Labor and Employment flagged the need for more construction workers to meet the demand for private and public projects.

Several major road projects are being undertaken or lined up in the Davao Region under the government’s Build, Build, Build program, along with the planned phase 1 of the Mindanao Railway System.

Ms. Lim said the construction workers pool should be built up, focusing on local manpower, to sustain the momentum in Davao’ economic growth.

“Priority should be given to local workers in the region,” she said. — Carmelito Q. Francisco

SC ruling to delineate PCC, ERC responsibilities

THE DIVISION of labor between the Philippine Competition Commission (PCC) and the Energy Regulatory Commission (ERC) will be clarified once the Supreme Court decides on a case which was elevated by the power regulator, according to a PCC official.

“We have to afford them the right to seek further clarification from SC. A MoA [memorandum of agreement] will take a while,” PCC Commissioner Johannes Benjamin R. Bernabe told reporters in Makati City last week.

Following the spate of outages that struck some parts of Luzon, the PCC revived proposals to sign a MoA with the DoE and ERC to facilitate market competition and investigations in the power sector.

The PCC and ERC had been tackling ways to coordinate efforts in the competition area of the power sector, with talks first surfacing in late 2016 when several areas of the country were struck with a series of power outages.

Republic Act (RA) 9136, known as the Electric Power Industry Reform Act (EPIRA) of 2001, authorizes the ERC to monitor and penalize any act that constitutes market power abuse and/or anti-competitive or discriminatory behavior by any electric power industry participant.

Meanwhile, RA 10667 or the Competition Act of 2015 authorizes the PCC to implement a national competition policy and ensure the promotion and protection of the competitive market by prohibiting anti-competitive agreements, abuse of dominant position, and anti-competitive mergers and acquisitions.

A resolution the Court of Appeals (CA) issued on May 23, 2018, dealing with a petition filed by Manila Electric Co., which questioned ERC’s jurisdiction over a competition concern related to the Malampaya shutdown in 2013, resolved this, saying the Competition law repeals Sections 43 and 45 of the EPIRA law which gives ERC the function to resolve cases of anti-competitive behavior and other unfair trade practices in the energy sector.

However, the ERC appealed the CA decision before the SC, according to Mr. Bernabe.

Mr. Bernabe added that regulators, specially those with competition mandates like ERC, are still not precluded from conducting their own investigation and factfinding inquiries.

“But when it comes to the period that there is a need for a quasi judicial determination whether there is breach of competition law or competition related laws, then it is the PCC, which has jurisdiction.”

Nevertheless, he added “there is nothing that prevents us from agreeing and reviewing certain other aspects of the MoA, exchanges of information, coordination in factfinding missions, preliminary inquiries and investigations.”

At present, the PCC is also looking into the merits of whether it will launch a probe into the alleged collusion of power plants that announced unscheduled closures, resulting in power outages on Luzon.

“There’s an urgency to address the issue of power outages. Of course, it is important that if there are any breaches of the law, that these should be subject to appropriate proceedings. But of course, we have to ensure that in the process of undertaking those proceedings, the facts and evidence would show that there’s breach of competition law, “ Mr. Bernabe added. — Janina C. Lim

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