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Megaworld to add 54,000 square meters of retail space this year

MEGAWORLD Corp. is scheduled to open 11 commercial properties this year, as it continues to expand its network of lifestyle malls in the country.
The listed property firm said in a statement on Tuesday that the new retail spaces will cover a gross floor area of about 54,000 square meters (sq.m.), bringing its commercial retail footprint to around 771,000 sq.m. by the end of the year.
The new retail spaces will be located across its malls in Iloilo Business Park in Mandurriao, Iloilo City, Alabang West along Daang Hari in Las Piñas City, McKinley Hill and Uptown Bonifacio in Taguig City, Arcovia City in Pasig City, Boracay Newcoast in Boracay Island, Aklan, and Davao Park District in Lanang, Davao City.
Megaworld Chief Strategy Officer Kevin Andrew L. Tan noted that bulk of the new retail spaces will be located in Uptown Bonifacio, where they will be unveiling a new row of retail establishments in front of Uptown Mall and Uptown Parade.
“Every mall that we build has curated spaces that evoke the character of the township where it is located. We want to create commercial properties that are not just for shopping and dining, but those that help drive tourism,” Mr. Tan was quoted as saying in a statement.
Megaworld has been beefing up its commercial properties in line with its goal to generate P20 billion in rental revenues by 2020, when the company expects to have a total of 28 malls.
The firm ended 2018 with 17 malls, with the latest being the P2.2-billion Festive Walk Mall in Iloilo Business Park which offers around 90,000 sq.m of retail spaces.
It also opened three new community malls, with one in Alabang called the Village Square, and two in Makati — Three Central in Salcedo Village and San Lorenzo Place in EDSA corner Chino Roces Street. These community malls cover a total of 26,500 sq.m.
Aside from malls, the company is also banking on its office towers to contribute to its P20-billion rental revenue goal. By that time, the company expects total rental space to reach 2.5 million sq.m.
Megaworld has allocated to spend P65 billion in capital expenditures this year, in a bid to ramp up its residential, office, retail, and leisure tourism properties.
The company saw its attributable profit grow by 13% to P11.29 billion in the first nine months of 2018, following a 13% uptick in revenues to P41.76 billion.
Shares in Megaworld dropped by 0.57% or three centavos to close at P5.20 each at the stock exchange on Tuesday. — Arra B. Francia

Russia expects to recover far less from ‘bad bank’ assets — sources

MOSCOW — Russia will dramatically cut its estimate of the sum it expects to recover from a “bad bank” set up after the collapse of three major lenders, according to three sources familiar with new calculations being prepared for the central bank.
The central bank has spent over $40 billion bailing out Otkritie, B&N and Promsvyazbank since 2017. It had hoped to recover between 40% and 60% of the value of their 2 trillion roubles ($30.45 billion) assets that were transferred to Trust Bank, the bad bank, in the rescue deal.
But the central bank now expects to receive only 20% of the value, according to the calculations being put together by the managers of Trust Bank, the sources said. The estimate is being downgraded because the assets were overpriced in the initial calculations, they said.
The central bank is Trust Bank’s main shareholder. It hopes to recover the money through asset sales and loan repayments.
A Trust Bank spokeswoman told Reuters that the recovery rate was still being discussed. The central bank did not reply to a request for comment. It is not clear when the revision will be announced by the central bank.
“The real recovery rate will hardly exceed 20%. It will likely be lower,” said one of the sources, who is familiar with the central bank’s new calculations. “These assets were initially overpriced.”
A second source said he expected the recovery rate to be between 10% and 20%.
Central bank officials have already said publicly it was aware that most assets, which include real estate and agricultural loans, were overvalued when they were transferred to Trust Bank.
But a downward revision to the estimate could erode public trust in the central bank. It could also point to more weakness in the banking sector, suffering from the fallout of Western sanctions over Moscow’s annexation of Crimea from Ukraine in 2014 and the sharp fall in oil prices.
As part of the rescue of Russia’s three largest private lenders, the central bank split the assets into “good” and “bad.”
Most of the troubled assets from the three banks were transferred last year to Trust Bank, which was formerly part of the Otkritie banking group.
B&N and Otkritie’s healthy assets were merged and became FC Otkritie, which the central bank plans to sell in the next two to three years. Promsvyazbank kept its good assets and was repurposed as a bank for the defence sector.
Russian Direct Investment Fund, the country’s sovereign wealth fund, became a minority shareholder in the “bad bank,” with the goal of preparing its assets for sale.
The central bank had been aware of the assets’ overpricing when they were added to Trust Bank’s balance sheet, deputy governor Vasily Pozdyshev said.
“When these assets were added to the balance sheet, we immediately said that many of them had been overpriced by three or four times,” Interfax news agency quoted him as saying in December.
“We nonetheless added them to the balance sheet because it’s better to have assets, even overpriced, than not accepting anything on the balance.” — Reuters

RBNZ may be next central bank to turn dovish as worries grow

NEW ZEALAND’S central bank may acknowledge the rising risk of an interest-rate cut when it delivers its first policy decision of the year.
While Governor Adrian Orr is expected to hold the official cash rate at a record-low 1.75% on Wednesday and signal no change for some time, he could concede there’s an increasing possibility of looser policy as global growth concerns mount. Traders have ramped up bets on a rate cut and are now pricing a 90% chance of one by November, swaps data show.
“The RBNZ will reaffirm a data-dependent ‘watch and wait’ stance, though the ‘worry’ element is growing,’’ said Sharon Zollner, chief New Zealand economist at ANZ Bank in Auckland. “When global growth slows, the New Zealand economy inevitably feels the chill, and the data flow out of both China and Australia, who together take 40% of our goods exports, has turned rapidly south.’’
The RBNZ will publish its decision at the new time of 2 p.m. in Wellington as it prepares for the formal introduction of an enlarged policy committee later this year. Orr holds a press conference an hour later.
Globally, central banks are growing more wary of raising rates amid slower expansion and risks such as the US-China trade dispute and Brexit. The US Federal Reserve has paused its rate increases, while Australia’s Reserve Bank this month abandoned its tightening bias as a slumping property market damped the inflation outlook.
The RBNZ may follow suit after New Zealand’s economy slowed in the second half of last year, jobs growth stuttered and the housing market cooled. The nation’s benchmark 10-year bond yield dropped to a record low of 2.08% last week, leading an Asian bond rally as investors turn to less risky assets.
While the RBNZ is unlikely to adopt an explicit easing bias, economists think it may move to a neutral stance by pushing its forecasts for higher rates further out into the future.
Westpac Banking Corp. chief New Zealand economist Dominick Stephens said he expects the RBNZ’s new OCR forecast to be flat through mid-2021. In November, the central bank projected rates would start to rise from the third quarter of 2020. Westpac itself forecasts no change in rates until 2022.
“That is as far as the proverbial eye can see,’’ said Stephens. “What we are really saying is that the OCR outlook is evenly balanced for the foreseeable future, with risks on both sides.’’
Kiwibank chief economist Jarrod Kerr went further.
“Rather than push out our call for hikes like most, we’re evaluating the very real risk of rate cuts,’’ he said. “We need to see how key developments offshore play out in coming months, including US-China talks and Brexit. For now, interest rates are more likely to fall than rise.’’
ANZ’s Zollner, who is already forecasting the RBNZ will cut rates in November, said there’s no urgency for the bank to alter its stance because inflation is near its 2% target and the economy continues to grow.
“It isn’t a necessary component of our November cut call that the RBNZ jumps on the dovish bandwagon so soon,’’ she said. “But we believe the RBNZ will want to clearly signal that it is cognizant of the emerging risks to the growth and inflation outlook.’’ — Bloomberg

Singapore’s Zilingo raises $226M to expand fashion site

ZILINGO PTE, a Singapore-based online fashion marketplace, raised $226 million to fund an expansion into the Philippines, Indonesia and Australia.
Investors in the series D financing included Sequoia Capital, Temasek Holdings Pte, Burda Principal Investments, Sofina and EDBI, the company said on Tuesday without disclosing a valuation. The start-up is valued at $970 million, according to people familiar with the matter who asked not to be named because the information is private.
Zilingo, founded by Ankiti Bose and Dhruv Kapoor, started as a fashion and lifestyle marketplace in 2015 to help small merchants build scale. It developed software and other tools allowing vendors to access factories from Bangladesh to Indonesia and also helped with cross-border shipping and inventory management. Listings are provided for free with the company charging a commission of between 10% and 20% on orders, helping drive a fourfold increase in revenue in the past 12 months.
“Ankiti and team have rapidly transformed their original ideas about Zilingo into a platform company that serves fashion consumers, merchants, retailers, brands and manufacturers,” said Shailendra Singh, managing director of Sequoia Capital (India) Singapore, which has backed Zilingo.
Ms. Bose, 27, is chief executive officer of Zilingo after previously working at Sequoia and McKinsey & Co. in India. She came up with the idea after a visit to Bangkok’s popular Chatuchak market, which features more than 15,000 booths selling goods from across Thailand.
Ms. Bose and Mr. Kapoor, who serves as chief technology officer, realized that many small merchants suffered from a lack of access to technology, capital and economies of scale.
The latest funding brings its total capital raised to $308 million. Zilingo currently has offices in eight countries with more than 400 employees, including about 80 engineers in Bengaluru, India. — Bloomberg

Kundiman stalwart Armida Siguion-Reyna, 88

ENTERTAINMENT industry stalwart, patron of the arts, actress, singer and promoter of the kundiman, Armida Siguion-Reyna took her final bow on the afternoon of Jan. 11, passing away at the age of 88 at the Makati Medical Center after a battle with cancer, according to her sister, Irma Potenciano.
Her love for the arts could be said run in the family as her mother was soprano Purita Liwanag and her aunt Carmen Concha was one of the first female Filipino film directors. Her involvement in film started early — in 1939, at the tender age of eight, she starred in the film Yaman ng Mahirap alongside Tita Duran. The film was directed by her aunt.
Ms. Siguion-Reyna, born on Nov. 4, 1930, was the daughter of lawyer/politician Alfonso Ponce Enrile and, along with her sister Irma, was raised in Malabon. She was the half sister of Senator Juan Ponce-Enrile.
In 1950, after returning from the United States, she met lawyer Leonardo Siguion-Reyna whom she married a year later.
The union produced three children including film director Carlos Siguion-Reyna, known for films including Hihintayin Kita sa Langit (1991), and magazine editor and TV producer Monique Siguion-Reyna.
In her 2015 biography by Nelson Navarro, Armida: The Singer and the Song, it said that her engagement with Mr. Siguion-Reyna was announced on the eve of Ms. Siguion-Reyna’s opera debut as Lucia Lamermoor in the Far Eastern University Auditorium. She was a coloratura soprano.
Ms. Siguion-Reyna, before agreeing to marry her husband stipulated one condition: that she be free to pursue her passion for the arts, and she did so with much gusto as she starred in several operas including Rigoletto, The Merry Widow, La Traviata, I Pagliacci and the zarzuela, The Mestiza.
It was in 1970 that she launched one of her biggest and most memorable projects — the musical TV show, Aawitan Kita, which ran for 35 years and is recognized for reviving the kundiman (traditional Filipino love songs) and balitaw (Visayan love songs).
Among the many performers who sang in Aawitan Kita were Rachel Alejandro, Robert Natividad, Gamaliel Viray, Aurelio Estanislao, Fides Cuyugan-Asencio, and Robert Seña.
A few decades later, in 1991, Ms. Siguion-Reyna ventured into another art form, this time film production with her own outfit, Reyna Films.
The company produced 12 films (it closed in 2000) including Carlos Siguion-Reyna’s Hihintayin Kita sa Langit and Ligaya ang Itawag Mo sa Akin (1997).
Aside from producing films, Ms. Siguion-Reyna also starred in a few of them including Ligaya.
After her childhood debut in Yaman ng Mahirap she acted in numerous films as an adult, including Kakabakaba Ka Ba? (1980) by Mike de Leon, Salome (1981) by Laurice Guillen, and Tahan na Empoy (1977) by Lino Brocka for which she won a Filipino Academy for Music and the Arts (FAMAS) award for Best Supporting Actress.
Ms. Siguion-Reyna was given the Gawad CCP para sa Sining Award in 2015.
She became the chairperson of the Movie and Television Review and Classification Board from 1998 to 2001, during which time she was her known for her stance against censorship.
Singers and actors went on social media to reminisce and to say goodbye to a mentor and a friend.
“I’m probably paraphrasing what she said terribly but GR Rodis and I recall Tita Midz once saying that if you produce a lousy movie, you could lose money and end up with nothing. But if you make a beautiful movie, even if you lose money, you have something you can be proud of forever,” said singer Rachel Alejandro in a Facebook post, referring to Ms. Siguion-Reyna by her nickname. “I’ll never forget this, Tita Midz. Thank you for taking me under your wing and changing me as a person, as a performer. To me, you are never gone. You live on.”
“You were one of the distinguished influencers in your time, a Tigress as they say but you Tita Mids left a soft spot in my heart and memories. She speaks her mind and she fights for you. You were the one who gave my first confidence in this Kaleidoscope like world of Show business. How can I not love you? My respect for you Tita Mids never withered a bit since I have met you so Its hard to bid goodbye,” wrote actor John Arcilla.
Ms. Siguion-Reyna was known for her unbending will, straightforwardness, and unwavering dedication to the arts. She is survived by her three children and grandchildren, some of whom followed in her footsteps including actors Cris Villonco and Rafael Siguion-Reyna.
Her wake is being held at the Heritage Memorial Park until Feb. 15, 11 p.m. — ZBC

How PSEi member stocks performed — February 12, 2019

Here’s a quick glance at how PSEi stocks fared on Tuesday, February 12, 2019.

 
Philippine Stock Exchange’s most active stocks by value turnover — February 12, 2019.

Ex-technocrats push Duterte to sign rice tariffication bill

THE Foundation for Economic Freedom (FEF) urged President Rodrigo R. Duterte to sign the rice tariffication bill to help resolve various issues afflicting the rice industry, including smuggling, uncompetitive production costs, and corruption.
“We, the Foundation for Economic Freedom, urge President Duterte to sign the bill on rice tariffication immediately. The bill… will be the most far-reaching reform in the history of rice policy. For decades, the interventionist strategy has been tried, tested, and has repeatedly failed,” the FEF said in a statement issued on Monday.
The FEF’s members consist of retired technocrats. Its chairman is former Finance Secretary Roberto F. de Ocampo.
Business groups also made a similar call to the President in January.
The rice tariffication bill has been passed by both chambers of Congress — Aug. 13 in the House of Representatives and Nov. 14 in the Senate. It was transmitted to Malacañang on Jan. 15. It is expected to lapse into law by Feb. 17 unless signed or vetoed by the President.
The bill amends Republic Act No. 8178 or the Agricultural Tariffication Act, removing the government from the role of importing rice and allowing the staple to be imported more freely by the private sector while implementing a minimum tariff rate of 35% for rice shipped in from elsewhere in Southeast Asia.
The legislation proposes a 35% duty on imports from within the Association of Southeast Asian Nations (ASEAN) and higher rates for imports from non-ASEAN countries.
The FEF said the proposed measure would solve the root cause of the problems besetting the rice industry, which they said was “unwarranted government intervention.”
“By liberalizing the industry the syndicate controlling the value chain will now be nullified by free entry and competition — including entry and competition from foreign rice suppliers,” the group said.
“By leaving trading and storage in the hands of traders, competing actively in a free market, investors can best judge when to buy low and sell high — curing the problem of gluts during harvest, and releasing stocks during lean periods,” they added.
FEF also allayed concerns of those who are against the bill, saying that the proposed measure has put in place safeguards to manage the effects of the new tariffication system.
The Federation of Free Farmers (FFF) has warned that the government will be left “practically powerless” when rice prices turn volatile with the passage of the rice tariffication bill, because it removes the National Food Authority’s (NFA) importing role and restricts it to maintaining a minimum rice inventory.
FEF said the proposed tariff rates would afford protection for the industry and the proposed rice competitiveness fund of P10 billion offers safety nets for farmers.
The FEF also noted that the task of dealing with anti-competitive practices will be left to the Philippine Competition Commission (PCC).
“The time for timid half-measures is over. It is now time for bold and confident steps. Change is coming for the rice industry, Mr. President. The sooner you make it happen, the better,” the FEF said.
Malacañang said last week that the signing of the measure is “forthcoming.”
Agriculture Secretary Emmanuel F. Piñol on the other hand has said that Mr. Duterte is open to changes to the bill following concerns raised by farmers.
The government’s economic team has also noted that they are preparing for a “quick and smooth transition” to the new import tariff regime with the expected enactment of the bill. The bill is touted as among the measures that will help reduce inflation, which hit 4.4% in January. — Camille A. Aguinaldo

Singapore delegation inspecting PHL farms

SINGAPORE’s Agriculture and Veterinary Agency (AVA) has begun its 10-day on-site inspection of farms in the Philippines which it might tap to supply the small island republic with vegetables, fruit, hogs, poultry and eggs, agriculture officials said.
In a social media post, Agriculture Secretary Emmanuel F. Piñol said the Singapore authorities are inspecting, among others, Gemsun Marketing, an egg farm in Batangas; Novoagri, Inc., a Batangas egg processor; the Pilmico Layer Farm in Tarlac; the Robina Farm No. 23 in Naic, Cavite; Ana’s Breeder Farms in Davao City; and Matutum Meat Packing Corp. in Gen. Santos City.
Malaysia cut back on its exports of agriculture products to the island, leaving Singapore to search for alternative suppliers.
Singapore has expressed interest in high-value vegetables and fruit, pork and processed pork products, dressed chicken and eggs, and seafood including white shrimp.
“Last year, following reports that Malaysia was scaling down its exports of poultry and eggs to Singapore, the Department of Agriculture (DA) immediately reached out to the then Ambassador of Singapore to the Philippines, Kok Li Peng, to make a formal offer to supply (its) food requirements,” Mr. Piñol said.
“Ambassador Kok immediately arranged for the visit of an inspection team right after the Chinese New Year so that the proposed production areas of the commodities for export could be inspected,” Mr. Piñol added.
Chicken exports to Singapore from the Philippines are also expected to address oversupply conditions in the Philippines. — Reicelene Joy N. Ignacio

DoF expects improved performance in 2020 economic freedom index

THE Department of Finance (DOF) said it expects the country’s Index of Economic Freedom (IEF) performance to improve next year with the implementation of fiscal reforms elevating the Philippine score in various sub-indices.
In an economic bulletin, Finance Undersecretary and Chief Economist Gil S. Beltran said the country’s IEF performance is “expected to improve significantly” in the 2020 index year.
“The signing of the Personal Property Security Act will improve the score on property rights. The signing of the rice quota tariffication bill into law will also reduce the penalty for non-tariff barriers in the computation of trade freedom index,” Mr. Beltran said in an e-mail.
The IEF is compiled by the Heritage Foundation, a conservative US think tank. The index purports to measure the degree to which economies allow individuals the freedom to pursue their own economic interests, modeled on principles laid down by Adam Smith.
In August, President Rodrigo R. Duterte enacted the Personal Property Security Act, which provides micro-, small and medium enterprises better access to lending.
Meanwhile, the rice tariffication bill that seeks to lift quantitative restrictions on rice imports in exchange for a 35% tariff is expected to make the industry competitive and lower prices for the staple grain.
The tariffication bill is now up for Mr. Duterte’s signature, after it was ratified by both chambers of Congress in November.
“We recognize that government should not stand in the way of private sector participation in the economy. That is why TradeNet.ph, for example, should already be made operational to cut red tape in the processing of trade-related documents by 76 trade regulatory agencies,” Mr. Beltran added.
The Finance Department recently urged the Bureau of Customs to activate TradeNet, an online portal which allows traders to apply for permits online, and enable government agencies to receive the forms and send feedback.
In the 2019 IEF, the Philippines fell nine places to 70th out of 186 economies, from the previous year’s ranking of 61st, after weaker performances in the sub-indices of monetary freedom, government integrity, trade freedom and tax burden, among others.
“The absence of entrepreneurial dynamism thwarts development. Despite the adoption of some fiscal reforms, deeper institutional reforms are needed in interrelated areas: business freedom, investment freedom, and the rule of law,” the Heritage Foundation said.
Meanwhile, Mr. Beltran flagged some issues with the study, which he claims ”leaves out important details.”
He said the study penalizes a country for increasing state spending, whether an economy is industrialized or developing.
“But a developing economy may require greater government involvement in the economy as in the provision of infrastructure and social services such as basic education, health, and social protection,” Mr. Beltran said.
On the issue of tax burden, Mr. Beltran also noted that a lower score may be incurred due to higher tax effort, or the tax collected in relation to the country’s gross domestic product, resulting from improved tax administration.
The IEF also did not take into account the equity issues of a progressive tax system, as well as corrections made for bracket creep which “benefited millions of salary workers.”
The Heritage Foundation had not replied to a request for comment at deadline time. — Karl Angelo N. Vidal

Sugar industry lobbying for revival of Philsucor

THE sugar industry is batting for the revival of the Philippine Sugar Corp. (Philsucor), a government company abolished by President Rodrigo R. Duterte last year.
“(Stakeholders) passed a resolution to revive the Philippine Sugar Corp. because they said they are having difficulty in accessing loans from Land Bank,” Agriculture Secretary Emmanuel F. Piñol told reporters on the sidelines of the second day of the Sugarcane Stakeholders Summit in Quezon City on Tuesday.
“They feel that Philsucor was more responsive to their needs and was faster in releasing funds,” Mr. Piñol added.
In October 2018, Mr. Duterte through a memorandum order, abolished Philsucor, noting that the company was no longer effectively performing its duties and that its functions overlap with the responsibilities of the Sugar Regulatory Administration (SRA).
Mr. Piñol added that funds from the Sugar Industry Development Act (SIDA) are not being utilized properly.
“We came up with measures and I would like SRA to amend this. Instead of bidding for tractors, the funds should be turned over to the farmers instead, guided by agency estimates on how much a tractor costs. It should just be released to the farmers’ association so that they can buy their own equipment, and no longer have to go through the long bidding process of the government,” Mr. Piñol said.
Mr. Piñol even noted that specific funds were allocated for fertilizer to farmers in Cagayan Valley in 2016, with procurement still ongoing after three failed bids.
“If that is the case, then we are depriving people of services from the government. In 2019, we will start with the immediate and direct turnover of funds to farmer associations,” Mr. Piñol said.
Mr. Piñol said that these measures were deemed necessary by stakeholders who are opposing the liberalization of the sugar industry.
In a position paper, the Confederation of Sugar Producers (CONFED) said a majority of sugar farmers are Agrarian Reform Beneficiaries (ARBs), and pushing for liberalization will only increase their poverty.
“It is ironic that the government, after providing the opportunity for these former sugar workers to become producers through the agrarian reform law will — through these economic managers — consign them once more to poverty by concocting this liberalization plan from the comforts of their air-conditioned offices,” according to the position paper.
Food processors have been asking the government to allow the removal of quantitative restrictions (QR) on sugar importation, claiming that prices of food and beverages using sugar will rise without alternatives to expensive domestic sugar.
“We call on the beverage companies to moderate their greed and have some heart for an industry that is also part of their consumer chain. Last year, these beverage companies publicly acknowledged that they are ‘partners’ of the sugar industry and that ‘the small farmers are the most vulnerable and in need of support,’ thus their desire to help ‘improve their lives and provide better opportunities for our farmers and their families.’ However, these sentiments are belied by their lobbying to liberalize imports,” CONFED said. — Reicelene Joy N. Ignacio

National minigrid franchise could conflict with RE law — NREB

THE National Renewable Energy Board (NREB) said granting a franchise to a single entity to build and operate minigrid systems nationwide could result in possible conflict with the provisions of the Renewable Energy Act of 2008.
“The original intention for the franchise created under House Bill 8179, was to provide affordable electricity access to unserved and underserved areas, as determined by Department of Energy (DoE). The franchise bill must provide definitions or guidelines on how these areas are to be determined, to avoid duplication of facilities that provide the same distributive service,” NREB said in a position paper.
The board’s position is in response to House Bill 8179, an act that seeks to grant Solar Para Sa Bayan Corp. a franchise to construct, install, establish, operate and maintain distributable power technologies and minigrid systems throughout the country. The bill is supposed to improve access to sustainable energy.
“The franchise bill in its current form may also have some inconsistencies with other provisions or mechanisms of the RE Act. In this regard, it is respectfully requested to have such amendments to align with the policies of the RE Act, such as Renewable Portfolio Standards, and the Green Energy Option Program,” it added.
NREB, which serves as an advisory body to the DoE on issues relating to renewable energy, said it believes RE developers and other stakeholders should have the space to articulate their concerns regarding the franchise bill and to propose changes to the bill in its current form.
The board said the RE Act, or Republic Act No. 9513, does not discriminate among any of the renewable energy technologies, but the name of the proposed grantee itself “may provide solar an undue advantage over other RE technologies.”
It said Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA), was promulgated to promote competition in the sector in order to provide affordable electricity to end users.
NREB said renewable energy developers are currently forced to compete with non-RE developers in the captive and retail electricity markets by following policies on competitive selection process (CSP) or retail competition and open access (RCOA).
“The franchise bill will further create a separate RE sector for the grantee, which prevents the grantee from undergoing CSP or complying with the requirements of RCOA, seems to be an unfair advantage of the grantee over other functionally similar RE developers,” it said.
CSP requires power supply agreements between distribution utilities and power developers to be opened up to challengers that can offer a lower electricity rate. RCOA allows electricity users who have reached a pre-set threshold to buy power from retail electricity suppliers, which may offer lower rates than franchised distribution utilities.
“In view of this, NREB respectfully requests the Senate to modify the franchise bill to remove any undue advantage the franchise grantee may have over other RE developers,” the board said. — Victor V. Saulon

Government to divest from Metro Pacific tollways unit

THE government is divesting its stake in a tollway subsidiaries of Metro Pacific Investments Corp. (MPIC), disposing of the shares in an auction next month.
In a bulletin published in a newspaper on Tuesday, the Privatization and Management Office (PMO) of the Department of Finance (DoF) invited bidders to participate in an auction for 76,000 common shares in MPIC’s Tollways Management Corp. (TMC).
The shares, which are currently held by the government, have a minimum base price of P2.578 billion. Interested participants must submit a financial bid not less than the indicated price.
While the competitive auction is open to all parties, shareholders of TMC have right of first refusal in the auction. TMC is a subsidiary of Metro Pacific Tollways Corp. (MPTC), the tollways unit of MPIC.
MPTC President Rodrigo E. Franco said in a text message that the group has not yet decided what action to take in the auction.
“No position yet on bidding for the shares. We have right of first refusal anyway,” he said, adding that the group has been advised of the auction by the DoF.
TMC is the MPTC subsidiary in charge of the operations and maintenance at the North Luzon Expressway (NLEx) and Subic Clark Tarlac Expressway (SCTEx).
Mr. Franco noted that the government is only selling its stake in TMC and continues to hold shares directly in NLEX Corp., another subsidiary of MPTC.
The pre-qualification stage of the auction is March 15. Participants are required to submit a letter of intent, a notarized confidentiality undertaking and a P100,000 non-refundable participation fee to the PMO TMC shares disposition committee.
MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

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