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Camp Aguinaldo, military hospital redevelopment to fund pension reform

PENSION reform for the uniformed services will be funded in part by joint ventures to redevelop parts of Camp Aguinaldo and two major military hospitals in Quezon City, Budget Secretary Benjamin Diokno said.

“Part of Camp Aguinaldo will be developed jointly with the private sector,” he said, referring to the Armed Forces of the Philippines headquarters. He also cited the potential for development of the Armed Forces Medical Center on V. Luna Street in Quezon City and the Veterans Memorial Medical Center, also in Quezon City. So the military has lots of assets,” Mr. Diokno told reporters.

He added that pension reform for uniformed personnel will cost “slightly” less than expected, though the government continues to study how to implement the plan before year’s end.

Mr. Diokno said that the Bureau of the Treasury is currently studying the fiscal issues in connection with the plan to set up a contributory fund for uniformed personnel, to be run by the Government Service Insurance System (GSIS).

“It’s with the Treasury, they’re studying it,” Mr. Diokno said, noting that the review started “last month.”

Mr. Diokno has estimated that seed money for the new pension scheme will amount to P7-9 trillion, based on initial actuarial studies on police and military retirees.

“That’s the working number. I think will be slightly less, which is good news,” he said.

He added that the government may release the final estimate “after the Holy Week.”

Asked when the pension reform plans will be ready Mr. Diokno said: “It is our plan to… find a solution before the end of the year.”

“The longer the problem hangs, the bigger it gets. What’s important is that those serving in the Armed Forces should start contributing to the system,” he added.

The reforms will maintain the benefits enjoyed by current pensioners but those still serving will be made to pay monthly contributions. New members of the uniformed services will be placed under a new pension regime.

He said economic managers are negotiating with the GSIS on the initial capital for the new scheme, as well as its management fee.

Asked whether the government has the fiscal space to fund the new pension scheme, Mr. Diokno said: “We have to take a long-term view.”

He added that contribution system will probably be on par with rates paid by civil servants to the GSIS and private-sector workers who are members of the Social Security System (SSS).

Economic managers flagged military pensions in the Development Budget Coordination Committee 2017 Fiscal Risk Statement.

In 2017, payments for military pensions totaled P90 billion, equivalent to about two-thirds of the Department of National Defense’s P134.29 billion budget that year. — Elijah Joseph C. Tubayan

NFA to conduct open tender for 250,000 MT rice shipment

THE National Food Authority (NFA) said that it is preparing for an open tender to select suppliers for a pre-approved shipment of 250,000 metric tons (MT) of rice, which will help replenish its buffer stock.

In a statement, NFA Administrator Jason Laureano Y. Aquino was quoted as saying that the NFA Council, which exercises oversight over the agency, expressed a preference for an open tender even though it may take 45-50 days, longer than the 30 days under a government-to-government arrangement.

Mr. Aquino said the council believes open tender reduces opportunities for corruption.

President Rodrigo R. Duterte authorized the shipment in a meeting with the council on March 19.

According to the statement, Mr. Duterte prefers to take his chances with an oversupply of rice rather than a shortage.

The shipment is expected to arrive by late April or early May.

Mr. Aquino defended the government-to-government procurement method, calling the process “transparent” since it was equivalent to an open tender with supplier countries as the participants.

The corruption allegations are “unfair to those countries with Rice Trade Agreements with the Philippines because it is tantamount to accusing them of participation or connivance in an illegal act,” he added.

“There is competition in G-to-G,” he added. “There is no such thing as a negotiated contract as claimed by some individuals.”

The Philippines has Rice Trade Agreements with Vietnam and Thailand.

The open tender scheme is open to any qualified supplier, though the main risk is delay should potential suppliers be found noncompliant. — Anna Gabriela A. Mogato

GT Capital core profit hits P15 billion in 2017

By Krista Angela M. Montealegre, National Correspondent

GT Capital Holdings, Inc. delivered higher core earnings last year driven by its automotive, banking and infrastructure businesses.

The holding firm of tycoon George S.K. Ty, the country’s sixth richest man, said in a disclosure to the stock exchange on Wednesday GT Capital saw a 29% rise in core net income to P15 billion last year from P11.7 billion in 2016.

Consolidated revenues increased 19% to P239.8 billion in 2017 from P202.1 billion a year ago on the back of strong unit sales from Toyota Motor Philippines Corp. as well as improved performance from associates Metropolitan Bank & Trust Co. (Metrobank), AXA Philippines, and Metro Pacific Investments Corp.

“Our full-year 2017 results show encouraging growth momentum, with core net income up by 29%. GT Capital’s key sectors continue to be in the sweet spot, in line with our country’s stage of economic development, reaping demographic dividends,” GT Capital President Carmelo Maria Luza Bautista was quoted in a statement as saying.

Toyota Motor Philippines grew its net income by 11% to P13.4 billion last year from P12.1 billion in 2016 on the back of a 19% growth in consolidated revenues to P185.3 billion in 2017 from P155.8 billion in 2016.

The automotive company hit retail sales volume of 183,908 units last year, garnering a 16% improvement from 158,728 units in 2016, to corner an overall market share of 39%.

Real estate firms Federal Land, Inc. and Property Company of Friends, Inc. reported an aggregate net profit of P2.1 billion after booking a combined 5% growth in consolidated revenues to P18.2 billion from P17.3 billion in the year prior.

AXA Philippines’ total life insurance sales in annualized premium equivalent in 2017 climbed 27% to P6.3 billion from P5.0 billion boosted by the expansion in regular and single premiums of 29% and 20%, respectively.

The insurance company generated consolidated life and non-life net income of P2.5 billion for 2017. For the stand-alone life insurance segment, AXA Philippines achieved a 42% growth in net income to P2.4 billion from P1.7 billion in 2016.

Metrobank earlier disclosed consolidated earnings of P18.2 billion in 2017, up 10% on a core basis, following the growth in loans and deposits that resulted in improved margins and better operating leverage.

Metro Pacific reported a 17% rise in consolidated core net income to P14.1 billion from P12.1 billion after deepening its presence in the power industry as well as robust traffic growth on all roads held by Metro Pacific Tollways Corp. and continuing growth in the hospital group.

Shares in GT Capital added P6 or 0.52% to close at P1,169 apiece on Wednesday.

Duterte: Peddlers of fake medicines to be charged with economic sabotage

By Arjay L. Balinbin

PRESIDENT Rodrigo R. Duterte has ordered Philippine National Police (PNP) Chief Director-General Ronald M. dela Rosa to arrest all persons “who manufacture, import, trade, administer, dispense, deliver, distribute fake drugs and charge them with economic sabotage,” Chief Presidential Legal Counsel Salvador S. Panelo said.

“They will be charged with economic sabotage, because those acts undermine not only the economy — the law of supply and demand, the prices — but also threaten the security of the nation….That is why to the President’s mind, these people should be arrested and charged (with) economic sabotage,” Mr. Panelo told reporters on Wednesday, March 28.

The President’s order, Mr. Panelo said, was given “last night,” March 27.

He also said the Food and Drug Administration (FDA) has “issued a warning to the public to beware of fake drugs, especially Paracetamol.”

Mr. Panelo also issued a statement saying in part: “The scale at which the pharmaceutical industry of the Philippines may be affected can also result in considerable loss of government revenues, specifically in the form of taxes.”

In its public advisory dated March 16, the FDA advised the public “against the purchase and use of the verified counterfeit drug product Paracetamol (Biogesic) 500 mg tablet.”

The FDA likewise warned that “the importation, selling or offering for sale of a counterfeit drug product is in direct violation of the Republic Act No. 9711 or the Food and Drug Administration Act of 2009, and Republic Act No. 8203, or the Special Law on Counterfeit Drugs.”

All local government units and law enforcement agencies, the FDA also said, are “requested to ensure that the counterfeit product is not sold or made available in their localities or areas of jurisdiction.”

DTI says tax reform impact minor as mispricing incidents rise

THE Department of Trade and Industry (DTI) said tax reform is being used by vendors as a pretext to raise prices beyond authorized levels, as confirmed incidents of mispriced goods rose sharply compared with a year earlier.

It added however that those caught doing so quickly readjust their prices to conform to the suggested retail price (SRP) for basic consumer goods, and maintained that the overall impact of mispricing is small.

Trade Undersecretary for Consumer Protection Ruth B. Castelo said that the implementation of the first package of the new tax law, known as Tax Reform for Acceleration and Inclusion (TRAIN), has brought about more cases of sellers exceeding the SRP.

“We find some establishments that have higher prices than the SRP and they blame the price increase on the TRAIN law,” she added.

“We called their attention and they immediately changed their prices. There have been slight increases because of the TRAIN law but we can correct it.”

The DTI said price increases beyond SRP levels for basic goods were found to be in the range of 4-25 centavos.

“The increases that you see now are caused by other factors such as foreign exchange rates, the price of raw materials [and] the price of crude oil,” Ms. Castelo said.

“The price of crude oil has increased in the international market not just the selling price in the Philippines,” she added.

In the first quarter of 2018, 47 establishments were found to have been selling above SRP, against 16 in the first quarter of 2017.

She said increased complaints were also fielded by the 8888 hot line and the DTI call center, as well as field monitoring in areas like Antipolo, Bulacan, Metro Manila, and Leyte.

Ms. Castelo said her group will be conducting monitoring and enforcement activities in Coron, Palawan; Cavite, Davao, and Laguna soon.

The Bureau Assistant Director for Consumer Protection and Advocacy Lilian G. Salonga said that based on field monitoring data, prices remain little changed.

“Basic necessities and prime commodities are stable based on our weekly reports… when comparing the prevailing prices last week and a month ago, prices didn’t move much. The only notable increases come from processed milk and powdered milk,” she added.

“We also saw a decrease in the weekly comparison of prices for bottled water and [condensed] milk and candles.” — Anna Gabriela A. Mogato

ABS-CBN targets 6 million TVplus boxes sold by 2018

By Arra B. Francia, Reporter

ABS-CBN Corp. looks to end 2018 with at least six million TVplus boxes sold, in a bid to expand coverage among households in the country.

“We hope to hit at least six million. Technically it covers probably already the bulk or a big part of Metro Manila. So that solves a lot of signal issues for ABS-CBN and for households that are probably not watching ABS-CBN because of bad signal,” ABS-CBN Chief Financial Officer Aldrin M. Cerrado told reporters last week.

The Lopez-led company launched TVplus digital box products as part of its Digital Terrestrial Television (DTT) business in 2015. The product gives customers access to free-to-air channels such as ABS-CBN and ABS-CBN Sports+Action, as well as premium channels including CineMo!, YeY!, Knowledge Channel, and DZMM Teleradyo.

As of end-2017, the multimedia company said it has sold 4.3 million TVplus boxes, or an average of 167,000 boxes every month.

“With DTT boxes in their homes, then it should help grow the business of the channel,” Mr. Cerrado added.

The company is also testing on adding Wi-Fi services to the TVplus boxes.

“In testing, pero wala pa (but there’s nothing yet)… It will still be a DTT box, but this time it’s a WiFi-ready DTT box… We’re still testing all the products,” Mr. Cerrado said.

ABS-CBN earlier said that it is scheduled to conduct pilot tests for the TVplus boxes in Cebu and Davao, which will boost its presence in the provinces.

TVplus is currently available in Metro Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, Nueva Ecija, Tarlac, Pangasinan, Benguet, Metro Cebu, Davao, Iloilo, Bacolod, and Cagayan de Oro.

ABS-CBN booked P3.16 billion in net income in 2017, 10% lower year on year due to the absence of election-related advertising. Revenues meanwhile dipped 2% to P40.7 billion last year.

Shares in ABS-CBN gained P1.50 or 5.19% to close at P30.40 each at the Philippine Stock Exchange on Wednesday.

Duterte vows passage of BBL in meeting with MILF, other Moro leaders

By Arjay L. Balinbin

PRESIDENT Rodrigo R. Duterte said he would use his “residual powers” to fulfill his promise to the Moro people should Congress fail to pass the proposed Bangsamoro Basic Law (BBL), Presidential Peace Adviser Jesus G. Dureza said.

The President, according to Mr. Dureza, made these remarks during his meeting with leaders of the Moro Islamic Liberation Front (MILF) in Davao City on Tuesday night, March 27.

Besides Mr. Dureza, other officials who joined the President were Presidential Legislative Liaison Office (PLLO) Secretary Adelino B. Sitoy and Special Assistant to the President (SAP) Christopher “Bong” T. Go.

The meeting took place a day after Mr. Duterte invited the Moro leaders for a dialogue on issues pertaining to the proposed BBL.

In his speech in Patikul, Sulu on Monday, Mr. Duterte said he was hoping to sit down with Moro leaders to “find solutions” to the armed conflict in Mindanao.

“This is part of the previously agreed arrangement that there will be periodic and regular meeting(s) of both sides as efforts for the eventual passage of the BBL are underway in both the House of Representatives and the Senate,” Mr. Dureza said in a statement on Wednesday, March 28.

He added: “President Duterte reiterated to them his continuing and consistent desire and commitment to install the enhanced government structure and governance that will hopefully solve the root causes of the Moro rebellion and address the historical injustice suffered by the Bangsamoro over generations.”

Mr. Duterte likewise said he would “assist even to the extent of relaying to both chambers of Congress his determination to help push for the passage of the BBL that is compliant with the comprehensive agreement of the Bangsamoro and as close as possible to the new draft law submitted by the Bangsamoro Transition Commission (BTC).”

In the event the BBL fails to hurdle Congress, Mr. Dureza said the President stressed that he “would go to the extent of even exercising his residual powers through administrative directives to fulfill” the said commitment.

Mr. Dureza also reported that former president Gloria Macapagal-Arroyo, in a phone conversation, “committed to support the BTC-drafted version that House Speaker Pantaleon D. Alvarez authored.”

Ms. Arroyo said “she would withdraw authorship of her previously signed bill to fast-track the approval of the new version,” Mr. Dureza added.

He further disclosed that Senate sub-committee chair Juan Miguel F. Zubiri, then in London, also committed to have the Senate “act on the bill before Congress adjourns sine die on May 15 this year.”

Mr. Dureza in his statement also quoted MILF Chair Al-Haj Murad Ebrahim as saying: “If this does not get done during the presidency of President Duterte, we seriously doubt if we can do it at all, in the future. President Duterte is now our only and last card.”

Domestic trade volume rises in Q4, value declines

THE volume of domestic trade in goods rose in the fourth quarter of 2017 but declined in terms of value, the Philippine Statistics Authority (PSA) said.

Volume was 6.476 million tons during the quarter, up 4.2% from a year earlier, according to preliminary data, while the tally for value was P176.393 billion, down 2.9%.

The domestic commodity flow indicator measures the regional flow of goods through the water, air, and rail transport systems. Some 99.9% of trade traveled by water.

Four out of the 10 commodity categories monitored by the PSA reported an increase in volume. Food and live animals — which accounted for the biggest share of trade in terms of volume — rose 72.5% by volume to 2.501 million tons. by value, the category fell 6.1% to P41.709 billion.

Coming in second were “manufactured goods classified chiefly by materials,” which rose 48.7% by volume to 1.024 million tons. By value, the category rose 7.4% to P21.250 billion.

On the other hand, “crude minerals, inedible except fuels” declined 70.8% by volume during the quarter to 323,615 tons. Value, on the other hand, rose 20.6% to P4.198 billion.

The National Capital Region was the top source of commodities, with outflows amounting to P33.263 billion. The region had a domestic trade surplus of P6.879 billion.

The Bicol region was the top destination of commodities, with total inflows amounting to P29.132 billion and a trade deficit of P25.323 billion.

“The increase in the volume of domestic trade was expected given the country’s upbeat domestic demand. Likewise, the deceleration to 4.2% [in the fourth quarter of 2017] from the 25.8% in 2016 was also expected due to the normalization in consumer spending following the 2016 elections,” said Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (LBP).

Mr. Dumalagan said the decline in value was due to the lower prices of food and live animals, which accounted for about 38.6% of domestic trade in terms of quantity.

“The drop in value might probably be attributed to the strong performance of the agricultural sector during the period. In the fourth quarter of 2017, the agricultural sector posted growth of 2.2%, a rebound from the 1.09% drop in the same period a year earlier,” Mr. Dumalagan said, citing the fourth quarter results of the PSA’s farm output report.

“Upbeat agricultural production likely kept prices low, despite firm domestic demand.”

Michael L. Ricafort, economist at the Rizal Commercial Banking Corp. (RCBC) concurred, “The increased supply of domestic goods that are heavier in tons but with relatively lower values… [led] to a decline in prices on a year-on-year basis.”

Cheaper foreign imports such as cement “may have led to lower prices of other locally traded goods and the corresponding increase in their trade volumes,” Mr. Ricafort said.

George N. Manzano, an economist at the University of Asia and the Pacific, said excess supply of these commodities may explain the movements in volume and value.

“The numbers [volume and value] do not add up because we have inflation and peso depreciated during the quarter,” Mr. Manzano said.

The economist also expected the prices during the period to have gone up on account of the increased demand brought by the year-end holidays.

“If this is not the case, then it is possible that supply has exceeded demand, which lowered prices during the quarter,” he said.

Economists expect both domestic trade volume and value to pick up this year on account of the increase in household disposable income brought by the Tax Reform for Acceleration and Inclusion (TRAIN) law and business expansion nationwide.

“Higher government spending and lower personal income taxes will keep domestic demand firm, and consequently fuel domestic trade. The impact of these positive factors, however, might initially be overshadowed by some disruption in spending due to higher inflation brought about the imposition of added excise taxes,” LANDBANK’S Mr. Dumalagan said.

“The value of trade is expected to pick up due to elevated inflation amid the recently implemented TRAIN law. [This] despite potentially upbeat agricultural production this year, which could weigh down on the costs of agricultural products.”

RCBC’s Mr. Ricafort added, “Domestic trade [will continue] to grow in the coming quarters of 2018. The major Philippine nationwide chains, especially retailers, have continued their expansion in the key localities outside Metro Manila.”

“Furthermore, real estate projects and construction activities, including infrastructure projects, also continued to pick up as the biggest real estate companies have continued to expand in key localities outside Metro Manila… As a result, the domestic trade has increased among different regions in the country, especially with Metro Manila and with other key trading hubs,” he added. — Carmina Angelica V. Olano

3 ride-sharing firms apply for LTFRB accreditation

By Patrizia Paola C. Marcelo, Reporter

THE LAND Transportation Franchising and Regulatory Board (LTFRB) is currently processing the applications of three transport network companies (TNCs), which are expected challenge the dominance of Grab Philippines.

LTFRB Board Member Aileen Lourdes A. Lizada on Wednesday said there are three ride-sharing companies or TNCs that have applied for accreditation with the LTFRB. The three companies were identified as Lag Go, Owto, and Hype.

“So if you say that there is no competition, soon there will be, and any competition is good for any industry because it benefits the riding public,” Ms. Lizada said in a press conference.

If granted franchises, the vehicles of the accredited TNCs will be part of the common supply base of 65,000 transport network vehicle service (TNVS) in Metro Manila.

Indonesian ride-hailing and online payment company Go-Jek earlier said the company aimed to set up operations in the Philippines this year.

Uber announced on Monday it was selling its Southeast Asian businesses, ride-sharing and food delivery, to Singapore-based rival Grab.

Ride-hailing app users have expressed worry that Grab, as the surviving entity, will monopolize the market and raise fares.

Grab Philippines, however, assured the public that its merger with Uber Philippines will result in a drop in surge pricing, better waiting times and more car rides.

“With the increase of supply base under one app, you should see allocation times get better because the density of cars across the map gets better. So it’s easier to allocate. So if it’s easier to allocate, the surge would not be as frequent as before,” Grab Philippines country head Brian P. Cu said said in a press conference.

Grab has already started the processing of applications of unique Uber Philippines drivers who will be transferring to the Grab system.

Mr. Cu said they expect around 20,000-24,000 drivers from the Uber system, based from the master list of the LTFRB. The total merged number is estimated at 55,000-65,000 if all drivers from the Uber system transfers to Grab.

MEETING WITH PCC
Grab Philippines public affairs manager Leo Emmanuel Gonzales said the company will be meeting with the Philippine Competition Commission (PCC) next week.

“Grab has already taken the initiative to reach out to the PCC. As a matter of fact, we will have a meeting with them very very soon, next week,” Mr. Gonzales said during the press conference.

The antitrust body requires mandatory notification of merger and acquisition deals, setting the threshold for the size of person at P5 billion and the size of transaction at P2 billion.

PCC Commissioner Johannes Benjamin R. Bernabe said the commission will see whether there is a basis to conduct a review of the Grab-Uber deal.

“You see two of the dominant players merging into one, and we will see whether there is a basis for us to conduct a review,” he said in a phone interview.

“[If PCC reviews transaction] Under the law, the parties can volunteer to have certain conditions for the transaction. Similar to the case of SM and Goldilocks, the two volunteered to address the anti-competitive terms. Alternatively, the PCC can impose conditions,” Mr. Bernabe added.

Earlier, PCC Chairman Arsenio M. Balisacan said even if the Grab-Uber transaction does not meet the thresholds, it can still review and possibly block the deal if they deem it to be anti-competitive.

5 arrested for illegal sale of Boracay forestland

By Dane Angelo M. Enerio

THE National Bureau of Investigation (NBI) has arrested five individuals suspected of “illegally selling inalienable lands in Boracay island,” according to a statement.

NBI Anti-Organized and Transnational Crime Division (AOTCD) agents on Tuesday, March 27, apprehended suspects Jacqueline B. Yao, Gina Y. Talapian, Lorelei G. Tarrosa , Jason Lacson, and Chaulin Yan in an entrapment operation at a hotel in Pasay City. They will be charged with syndicated estafa in connection with the sale of Lot No. 598-A in Barangay Balabag, Boracay Island, with a total area of 7,988 square meters.

The area is protected by Proclamation 1064 classifying some parts of Malay, Aklan as inalienable forestland. Barangays in Boracay belong to that municipality.

NBI Deputy Director Ferdinand M. Lavin said this kind of land “cannot be surrendered by the government, therefore, this cannot be titled to any person or individual.”

Ms. Tarrosa allegedly introduced herself to the complainant, an entertainment and hotel company that requested anonymity for security reasons, “as one of the heirs of the said real property, offered said property,” but after leasing the lot, the complainant “found some issues involving Estate tax…that had not been settled,” said the statement.

It was revealed through records from the Department of Environment and Natural Resources (DENR) and the Provincial Environment and Natural Resources Office (PENRO) that the land was declared as an inalienable forestland.

“Realizing this, the complainant-corporation discontinued giving installments starting September 2017,” the statement further read.

Mses. Tarrosa and Talapian, however, allegedly still demanded payment for the lease, prompting the complainant to seek the NBI’s assistance.

“By then, the complainant-corporation (had) already paid on several occasions a down payment totaling P38,500,000,” said the NBI statement.

The NBI clarified this case will be investigated further.

The suspects remained silent when sought for comment.

Gov’t debt rises at end-Feb on foreign loans, weak peso

THE NATIONAL government’s outstanding debt rose in February as foreign loans increased while the peso depreciated, the Bureau of the Treasury (BTr) said.

Total debt stood at P6.82 trillion at the end of February, up 1.4% from a month earlier and up 9.8% from a year earlier.

Some 64.95% or P4.43 trillion of the debt was locally sourced.

Domestic debt rose 0.02% from the end of January.

“The slight decrease in domestic debt was due to the net redemption of government securities amounting to P1.28 billion which were partially tempered by peso depreciation that increased the value of onshore dollar bonds by P0.36 billion,” the BTr said.

The peso weakened to P52.07 against the dollar at the end of February, from P51.341 a month earlier.

Domestic debt consisted of government-issued securities worth P4.43 trillion, and loans of P948 million.

The total rose 11.2% from the end of February.

Meanwhile, foreign debt rose 4.2% at the end of February, from P2.3 trillion a month earlier.

“The growth in external debt was driven by net availments on foreign loans and bond issuances as well as forex fluctuations,” the BTr said.

It added that the peso’s depreciation raised the value of dollar-denominated debt by P32.59 billion, and third currency-denominated debt by P4.76 billion.

Dollar bonds amounted to P1.29 trillion, while peso global bonds totaled P126.68 billion. Yen bonds, on the other hand, amounted to P48.81 billion.

The government borrows from local and foreign sources to fund its budget deficit, which for this year is capped at 3% of the country’s gross domestic product.

This year, it has set a 74-26% borrowing mix in favor of domestic creditors, and plans to borrow a total of P888.227 billion. — Elijah Joseph C. Tubayan

First Gen still keen on run-of-river hydro projects

By Victor V. Saulon, Sub-Editor

FIRST GEN Corp. is not giving up on its plan to build run-of-river hydroelectric power plants as the Lopez-led company is now “strengthening its expertise” in the construction and development of such facilities.

The preparation is aimed at starting the construction of the 32-megawatt (MW) Bubunawan run-of-river hydro power project “subject to clarity in the Philippine market and regulatory regime,” First Gen said in an information statement submitted to the stock exchange on Wednesday.

“The project is located in Mindanao,” the company said, adding that it has licenses to develop “at least four” other run-of-river hydro projects in Mindanao, including the 33-MW Tagoloan and 30-MW Puyo facilities. It cited a project in Cagayan, although no capacity was mentioned.

In May last year, First Gen announced that it was putting on hold plans to develop run-of-river hydro projects after the Department of Energy (DoE) decided not to extend the feed-in-tariff (FiT) for the technology. The FiT scheme offers a guaranteed payment for the electricity produced by such facilities for 20 years.

Early this year, however, the DoE said it was inclined to extend the scheme for run-of-river hydro plants by another two years starting this year, although it has yet to issue a circular to formalize such move.

Aside from the hydro facilities, First Gen said it has “projects in the pipeline at varying degrees of development.”

“[The company] continues to pursue and employ its pioneering efforts for natural gas by developing an import and regasification LNG [liquefied natural gas] terminal by 2023. Its planned construction and operation is in preparation for the eventual exhaustion of the Malampaya gas field and also to support the development of the Philippine gas industry,” First Gen said.

The company continues to work on various development activities “to be able to advance the project and make a final investment decisions.”

The LNG terminal’s front end engineering design has been completed and is now going through a tender for the engineering, procurement and construction contract. The initial phase of the planned site development has also been completed.

First Gen said it was also evaluating the construction of two 450-MW natural gas-fired power plants, which it named Santa Maria and Saint Joseph.

“The commissioning of the plants will be planned in coordination with the progress of the development of the LNG terminal,” the company said.

First Gen also said it had secured five geothermal projects through the execution of renewable energy contracts with the Department of Energy.

“Surveys and resource assessments of these projects are being finalized,” it said.

The company has 10 wind energy service contracts, nine of which are undergoing feasibility studies. It also has six solar energy service contracts, four of which are undergoing feasibility studies.

In 2017, First Gen reported a net income attributable to equity holders of the parent company of $134.42 million, 33% lower than the $199.59 million generated in the previous year.

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