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Hotel offers investment opportunities

By Mark Louis F. Ferrolino
Special Features Writer

Hotel 101
Hotel 101-Fort is being built on a 1,224-square
meter property in Fort Bonifacio, Taguig City.

DOUBLEDRAGON Properties Corp. is developing a 606-room hotel on a prime 1,224-square-meter (sq.m.) lot in Fort Bonifacio, Taguig City, as part of the developer’s plan to ramp up its hotel portfolio to 5,000 rooms by 2020.

The towering 33-storey Hotel 101-Fort is the second Hotel 101 branch to be launched in the Philippines by DoubleDragon’s subsidiary Hotel of Asia, Inc. The first branch is located at the Mall of Asia Complex.

Hotel 101-Fort will be offering the same type of rooms used in Hotel 101-Manila in terms of size and design. It will house a three-level podium dedicated to specialty retail shops and dining outlets, and a full-amenity floor.

Once completed in 2020, it is envisioned to be a premier business and leisure hotel.

“For business and leisure, the room rate really [gives] value for money. And, it’s also within the proximity of both of the business district and shopping district, so it’s a great location for anyone visiting this area,” DoubleDragon Chief Investment Officer Hannah M. Yulo told BusinessWorld on the sidelines of the project launch last week.

To offer customers with utmost comfort and convenience, the hotel will be equipped with side door entrance, spacious main lobby with a revolving door, and four high-speed elevators.

Keeping in mind the persons with disabilities, the property will be incorporating barrier-free design consideration for ramps, handrails and toilets.

Hotel 101-Fort generates revenues not just through the actual hotel operations, but also through pre-selling of units. As a “condotel,” Hotel 101 offers condominium units with access to hotel facilities.

“We’re actually selling condominium titles — similar to buying any residential unit — except that the condominium [units] will be managed by the hotel management company, which is our wholly owned subsidiary,” Ms. Yulo said.

The pre-selling of Hotel 101-Fort units, priced at P4.95 million, started last Wednesday. Investors, regardless of whether or not their rooms will be used, will get 30% of the total gross room revenues (excluding taxes).

The remaining 70% will go to the hotel management company for taking in charge of the operation expenses, unit repairs and maintenance.

“This is the alternative to that type of investment — that you are holding the same condominium title which you can resell, you can mortgage it like any other property investment — and you get to participate not only in the appreciation of property prices in the area, but you also get to participate in the growth of tourism in the Philippines because it’s a hotel investment,” Ms. Yulo shared.

Aside from this hotel project in Taguig, DoubleDragon is also constructing Hotel 101 branches in Davao City and Boracay in Aklan.

In a statement, DoubleDragon Chairman Edgar J. Sia II said Hotel 101 is poised to become the largest and most recognized hotel chain in the Philippines.

The company also targets to build a portfolio of 1.2 million sq.m. of leasable space by 2020, with 700,000 sq.m. dedicated for community malls, 300,000 sq.m. for Metro Manila office projects, 100,000 sq.m. for its hotel projects and another 100,000 sq.m. for industrial hubs.

AboitizPower implements reorganization plan

THE reorganization at Aboitiz Power Corp. has left its president giving up his previously concurrent position as chief operating officer, while other officers have been given either a bigger role or an expanded one.

“On March 24, 2018, [AboitizPower] approved a reorganization plan, which involves assigning key officers in new roles, or expanding the existing roles of some key officers,” it told the stock exchange on Monday.

Emmanuel V. Rubio will become the company’s new chief operating officer starting on June 1. At present, he is the executive vice-president (EVP) and the president and chief operating officer of the power generation group.

Antonio R. Moraza will remain as president of AboitizPower.

Luis Miguel O. Aboitiz, currently the executive vice president and chief operating officer of the corporate business group, will assume a new role as chief strategy officer effective on June 1.

Robert McGregor, currently AboitizPower’s executive director for business development, will take on a new function — as the company’s executive director-chief investment officer — also starting on June 1.

Christopher B. Sangster will take on an expanded role as executive director for business development and project development and execution effective on May 1.

Beverly B. Tolentino, AboitizPower’s first vice-president and chief finance officer for the power generation group, will be transferring to parent firm Aboitiz Equity Ventures, Inc. effective April 1, assuming the position of first vice-president-CSU finance planning and projects.

AboitizPower also appointed Felino M. Bernardo as the chief operating officer for the generation business group, and Ma. Racquel J. Bustamante as first vice-president and chief finance officer for the same group.

Shares in AboitizPower were unchanged on Monday at P38.80 each. — Victor V. Saulon

Resorts World Manila operator says revenues hit P21B in 2017

THE OWNER and operator of Resorts World Manila (RWM) generated P21.1 billion in revenues in 2017, noting that gaming activities in the casino have picked up since the shooting incident that prompted the closure of an entire gaming floor in June last year.

In a statement, Travellers International Hotel Group, Inc. said revenues translated to an EBITDA (earnings before interest, taxation, depreciation, and amortization) of P3.5 billion.

The 2017 revenues are 23% lower than the P27.49 billion the company reported in   2016.

Travellers International has yet to submit its annual financial report to regulators.

The company was forced to close its casino area for 27 days in June 2017 after an arson attack that left 38 people dead. It suffered around P60 million in lost gaming revenue for each day of closure.

The Resorts World Manila operator said gross gaming revenues in the fourth quarter alone increased by 22% against the quarter before.

“We are pleased to see continuous improvements in our quarterly results and expect to sustain this upward trend, especially with the partial opening of Phase 3 development’s gaming area in the near future. This new facility will be called Grand Wing while the original facility will be called Garden Wing,” Travellers International President and Chief Executive Officer Kingson U. Sian said.

The non-gaming segment grew its revenues by 5% to P4 billion in 2017, driven by hotel and MICE (meetings, incentives, conventions, and events) operations.

The company said the number of people visiting the RWM complex have improved, with foot traffic averaging at 27,000 per day in the fourth quarter, 17% up from the 23,000 average daily visitors in the third quarter.

The average occupancy rate in RWM’s three hotels stayed above 80% during the period, with Holiday Inn Express — formerly called Remington Hotel — almost 90% occupied. The other hotels in the complex are Maxims Manila Hotel and Marriott Hotel Manila.

Travellers International will be adding 940 rooms across three new luxury hotels in the RWM complex this year. The hotels are Hilton Manila, Sheraton Manila Hotel, and Hotel Okura Manila, which will also house gaming and retail spaces, as well as six basement parking decks.

The listed company is a joint venture partnership between billionaire Andrew L. Tan’s Alliance Global Group, Inc. and Genting Hong Kong Limited.

Shares in Travellers International gained eight centavos or 2.02% to close at P4.05 apiece at the Philippine Stock Exchange on Monday. — Arra B. Francia

The Filipinos on 5th season of Sony’s The Apartment

THE FIFTH season of the interior design reality competition, The Apartment: Passion for Design, returns to Sony Channel featuring stylist and interior designer Catherine Arambulo-Antonio as the only Filipino judge of the competition.

“Initially, I was applying to become a contestant. After a while, I hadn’t heard from [the showrunners] but a month or so before the competition, they contacted me and asked me to be one of the judges,” Ms. Arambulo-Antonio told the press shortly before the media preview on March 14 at Century City Mall in Makati City.

The show started airing on March 22 (Thursday), 9 p.m., on Sony Channel.

Used to working behind-the-scenes as a stylist for actresses like Ehra Madrigal, Ms. Arambulo-Antonio admitted that doing the show is an entirely new challenge for her, but is a challenge she is very willing to do.

“When I’m judging, I like to see a person’s personality in their works because that’s what’s going to set them apart from others. I’m looking for their personality to shine,” she said.

Ms. Arambulo-Antonio is joined by New York-based interior designer Tyler Wisler and British interior designer Laurence Llewelyn-Bowen as the show’s judges. The show is hosted by award-winning designer and author Jamie Durie.

There are other Filipinos in the fifth season of The Apartment — Fil-Kiwi model and beauty queen Stephanie Dods, interior decorator Jesy Cruz, and interior designer Eugene del Rosario are competing and trying to follow the third season’s Filipino winners Deankie Latonio and Tiara Sison. The three Filipinos will be competing with nine others for the show’s “biggest award yet,” a deed to a luxurious UMLand apartment at D’Lagoon in Iskandar, Malaysia.

“Filipinos are renowned for their exceptional talent and tend to do really well in reality series where their creativity and survival skills are put to the test under high pressure situations. The Amazing Race Asia and Asia’s Got Talent on AXN are two wonderful examples of Filipinos making the country proud. Now with The Apartment: Passion for Design on Sony Channel, the Philippines will show that the country can also excel in interior design,” said Armi Malaluan, director and business head of Sony Television Networks Asia, in a company release.

The Apartment: Passion for Design airs every Thursday, 9 p.m., on Sony Channel (Cablelink Channel 39, Cignal Channel 120, Destiny Cable Channel 35, G Sat Channel 48, and SkyCable Channel 35.) — Z. B. Chua

Finance department asks BSP to aid Overseas Filipino Bank’s digital shift

THE FINANCE department has asked the Bangko Sentral ng Pilipinas (BSP) to pave the way for the shift to a digital banking system for the Overseas Filipino Bank (OFB).

“We asked Deputy Governor [Maria Almasara] Cyd N. Amador to better check all the regulations in the central bank, and everything that chokes this kind of business to take these out,” Finance Secretary Carlos G. Dominguez III said in a statement yesterday, referring to financial regulations concerning electronic commerce.

Mr. Dominguez said he wants to put up a mobile payment technology system for overseas Filipinos who regularly remit money to the Philippines via the OFB.

“A bank can be operated without any branches. You just operate it through your smartphones. You can open an account for 10 million OFWs (overseas Filipino workers) without them having to go to a branch and opening one up,” said Mr. Dominguez.

“We have already have a good size of potential OFWs abroad and that’s already 10 million, LANDBANK has five million account holders, so why can’t we deal with them through smartphones?” he added.

This comes after Mr. Domingez led a delegation of government officials for a three-day workshop on digital solutions in Alibaba Business School in Hangzhou, China last month.

Mr. Dominguez said the Philippines could emulate the payment system of Alibaba’s financial technology affiliate, Ant Financial, that has over 200 million account holders with combined deposits of $250 billion and has zero physical branches.

“Among the takeaways we had as a group there was that the Philippines has the opportunity of leapfrogging a lot of (digital) applications because we are not too much computerized yet, unlike other countries that have hard investments in hardware which is fast becoming obsolete but they still hang on to them because they invested so much money in them,” said Mr. Dominguez.

OFB, a subsidiary of LANDBANK, was launched in January to provide financial products and services tailored to the requirement of overseas Filipinos such as efficient foreign remittance services.

However, the Finance chief noted supplemental measures to help boost the development of the digital economy in the country, such as the national ID system and a third telecommunications firm.

Digital innovations that have already begun in the country including the BSP’s National Retail Payment System (NRPS) launched in December 2015 to create a safe, efficient and reliable electronic retail payment system in the country.

In November last year, the central bank launched the PESO Net electronic fund transfer payment scheme for individuals and large businesses, which is the first automated clearing house under the NRPS. The BSP is also set to launch this year another automated clearing house called InstaPay, which will enable 24/7, low-value electronic fund transfers. — Elijah Joseph C. Tubayan

Ortigas East to emerge as new lifestyle and business hub

By Francis Anthony T. Valentin
Special Features Assistant Editor

ORTIGAS Center is as dynamic an office property submarket as ever, and it still has plenty of room for growth. Last year, it accounted for 66,900 square meters (sq. m.) of the 852,600 sq. m. office supply in Metro Manila, the “highest annual supply historically” for the region according to property consultancy Colliers International Philippines.

Colliers projects Ortigas Center will add 98,000 sq. m. of gross leasable area (GLA) to the regional stock this year, 23,700 sq. m. next year, and a staggering 421,600 sq. m. in 2020.

“In the long run, Ortigas has the potential to re-emerge as a key business district given the planned buildings due for completion in 2020,” the firm said. “Approximately 44% of total supply for the same year will come from Ortigas CBD (central business district).”

Anticipation is building for nearby projects, including the P50-billion redevelopment project of Ortigas & Company, called Ortigas East (formerly Frontera Verde) in Pasig City, bounded by Ortigas Ave., C-5 and Dona Julia Vargas Ave. Touted as the “natural extension” of Ortigas Center, this mixed-use property occupies roughly 16 hectares of land, just about as big as Greenhills Shopping Center in San Juan, which Ortigas & Company also developed.

“Ortigas East is designed to bring connected living in a progressive urban neighborhood. Complemented by an improved road network and transportation access, Ortigas East is going to be metro east’s prime residential, business, lifestyle, and entertainment hub,” Jaime E. Ysmael, president and chief executive officer of Ortigas & Company, said in a statement.

The development will be built in three phases. The first phase will see the construction of office, retail and residential properties; the second a park and more residences; and the third some more office and retail structures, as well as a hotel.

In a press conference held last March 15, Mr. Ysmael revealed that 40% of the total area will be reserved for open spaces.

The Glaston Tower, a 34-storey office building, will be the first to be built in Ortigas East. The 349 units to be made available, with sizes ranging from 76.88 sq. m. to 141.88 sq. m., are aimed at traditional offices and start-ups.

“It is appropriate to introduce a new product that we believe the market requires,” Mr. Ysmael said, noting that they had been hearing clamor for new office space. He added that they are pursuing a Leadership in Energy and Environmental Design certification for the tower, whose construction may take three to four years to finish.

A planned regional mall in the development will have a GLA of 104,000 sq. m. and house a mixture of global and local brands. Mr. Ysmael said once the office tower is completed, work on the mall and the residential component will commence. The first phase of the Ortigas East development, estimated to cost around P18 billion, is expected to continue through 2025.

Considered an adult comedy format, this stand-up show is meant for the children

FILIPINOS love to laugh — whether at themselves or at others — and it’s a trait that is cultivated since they are very young. Young Filipinos, specifically those ages four to 10 years old, will have a chance to laugh when Scottish comedian Chris Henry performs in a show that is specifically tailored to them.

Mr. Henry will be performing Balloonatics — an interactive stand-up comedy show for children (and their adult companions) — on April 7, 3 p.m., at Johnny B. Good in Glorietta 3, Makati City.

“It’s one hour of balloon tomfoolery for the whole family and there’s a lot of jokes for the adults as well,” said Mr. Henry in a video message posted on the Prime i Events Facebook page.

Mr. Henry, who has been a comedian since he was 18, is known for two shows: Balloonatics, which was inspired by his brother’s kids, and Fuck Tinder, which chronicles his hilarious experiences using the infamous dating app.

“I wanted to create a show [my brother’s kids] would want to go to,” he said.

Described as a “man who enjoys tackling issues you ordinarily wouldn’t discuss with your Gran around the dinner-table,” Mr. Henry is renowned for his exuberant brand of mischievous humor.

“We are always on the lookout for new and interesting ideas and concepts to bring in. This allows kids to enjoy their time, appreciate and experience entertainment that is unique to them,” Saira Budhrani, co-owner of Prime i Events, said in a press release.

She explained that Mr. Henry was introduced to them by Eleanor Conway, who headlined in the company’s previous production, Walk of Shame.

“Eleanor just raved about him and we liked what we saw and felt kids would have a lot of fun watching his show, so we want to give this a shot,” she said.

The show is also a good way to bond with one’s family, said Dilip Budhrani, co-owner of Prime i Events.

“We all are so busy with various things in our daily lives, work is both challenging and stressful and time is never enough, but we all need to give quality time to our family and keep them and ourselves away from gadgets. Look around you, people are so hooked on all the technology and this is the new drug that is creeping into society,” he said.

Anticipating that this show would be a hit, Ms. Budhrani said they are preparing for more family friendly comedy shows in the near future as they “strive to provide entertainment for all segments of the market,” she told BusinessWorld in an e-mail on March 20.

Aside from Balloonatics, children will also have several activities including a live story-telling of The Little Prince presented by Make Believe Productions.

The doors at Johnny B. Good (formerly Hard Rock Cafe), Glorietta 3 open at 3 p.m. for activities, while Balloonatics commences at 4 p.m.​

Tickets cost P1,500 for the children (including meals and activities) and P1,000 for adults. The show is limited to 60 kids only. For tickets and other inquiries, call 0920-971-7055 and 0917-570-3057. — Zsarlene B. Chua

ECB acts to ensure glitch-free ride to bond-buying conclusion

THE EUROPEAN Central Bank (ECB) is making sure its bond-buying program doesn’t run into any problems in Germany in the final stretch.

Six months before purchases are currently set to expire, the ECB added seven German regional development agencies to the list of institutions whose debt is eligible for quantitative easing (QE). The expansion was done at the request of the Bundesbank, which under rules linking QE to the size of national economies is responsible for the largest share of the euro area’s purchases.

The decision suggests that while ECB President Mario Draghi repeatedly says QE isn’t running into shortages, there may well be risks unless tweaks are made. Monetary officials are scouring the market for €30 billion ($37 billion) a month under the program — a core plank of stimulus measures to revive inflation — and holdings will top more than €2.5 trillion by September. With price pressures still weak, the scheme might yet be extended again.

“The ECB can always play with numbers and parameters to make QE last a little longer,” said Frederik Ducrozet, an economist at Pictet Wealth Management in Geneva. “What they did, can at least at the margin help them to postpone the binding constraints — the day when they see those constraints kicking in.”

One of those limitations is a self-imposed commitment to hold less than 33% of a single country’s outstanding debt. That’s primarily aimed at shielding the ECB from accusations it’s financing governments, but also at maintaining a functioning market for QE-eligible securities.

Germany’s economic size, the government’s commitment to not issue new debt and the role of its bond-market as a haven for banks seeking quality assets makes the country a particular concern. ECB Executive Board member Benoit Coeure said last month that less than 10% of the outstanding stock of German bunds might currently be in the hands of private investors.

Rising bond prices in the past two months have pushed yields on 5-year German debt back below zero. The 10-year has dropped to around 0.5% from 0.8% over the same period.

Another sign that the Bundesbank is operating in a tight market comes from the failure of so-called reverse auctions. Since March, the German central bank invited sellers to offer bonds with the intent of buying as much as €450 million, but €8 million worth of assets eventually traded hands as price expectations diverged.

The additional wiggle room the Bundesbank gained with the expansion of the pool of assets will probably be small, said Pictet’s Ducrozet.

“It’s not a game changer — it’s not enough for them to extend QE in any meaningful way into 2019,” he said. “But it could help at the margins to smooth the collateral damage, and the market impact from the end of the program when they will come closer to those constraints.” — Bloomberg

Supreme Court affirms CA’s 2006 ruling upholding PAL retrenchment program

THE SUPREME COURT en banc voted 7-2 to favor Philippine Airlines (PAL) in its 20-year dispute with the Flight Attendants and Stewards Association of the Philippines (FASAP) over the flag carrier’s retrenchment program.

In a 55-page resolution penned by Associate Justice Lucas P. Bersamin, the SC affirmed an Aug. 23, 2006 Court of Appeals (CA) ruling that upheld the airline’s retrenchment program in 1998.

The High Court also denied the motion for reconsideration filed by the FASAP in 2012, and set aside the resolutions in 2008 and 2009 issued by SC divisions, which favored FASAP and directed the flag carrier to reinstate the laid-off employees.

The Supreme Court en banc said PAL implemented a valid retrenchment program, after establishing it had incurred serious financial losses.

“After having been placed under corporate rehabilitation and its rehabilitation plan having been approved by the SEC on June 23, 2008, PAL’s dire financial predicament could not be doubted,” it said.

The court said it used fair and reasonable criteria in selecting the employees to be retrenched, as provided for under the collective bargaining agreement.

“We hold that for as long as PAL followed a rational criteria defined or set by the CBA and existing laws and jurisprudence in determining who should be included in the retrenchment program, it sufficiently met the standards of fairness and reason in its implementation of its retrenchment program,” the decision read.

The SC also ruled that the release and quitclaim signed by the affected PAL employees had satisfied the basic contents of valid and effective quitclaims and waivers.

“A quitclaim is invalid or contrary to public policy only: (1) where there is clear proof that the waiver was wrangled from an unsuspecting or gullible person; or (2) where the terms of settlement are unconscionable on their face. Based on these standards, we uphold the release and quitclaims signed by the retrenched employees herein,” it said.

To recall, FASAP claimed the airline illegally dismissed around 5,000 employees, of which 1,400 were cabin crew personnel in 1998.

PAL, for its part, argued the retrenchment program was necessary to ensure the airline’s survival following financial difficulties in the aftermath of the 1997 Asian crisis.

Seven justices concurred, including Mr. Bersamin, Diosdado M. Peralta, Estela M. Perlas-Bernabe, Samuel R. Martires, Noel Gimenez Tijam, Alfredo S. Caguioa, and Alexander G. Gesmundo.

Only justices Marvic F. Leonen and Andres B. Reyes, Jr. dissented.

In his dissenting opinion, Mr. Leonen said: “This (was) an extraordinary case… Like in the Book of Revelation, it involves a miraculous resurrection of the dead; in this case, a dead case.”

Five justices inhibited themselves from the case, namely Antonio T. Carpio, Presbitero J. Velasco, Jr., Teresita J. Leonardo-De Castro, Mariano C. Del Castillo and Francis H. Jardeleza.

Chief Justice Maria Lourdes P.A. Sereno, who is on indefinite leave, was unable to take part. — DAME

New Clark City: How project is challenging conventional urban planning

CLARK, PHILIPPINES — He may never set foot in New Clark City, but taxi driver Edgard Labitag hopes the Philippines’ first green, disaster-resilient, high-tech metropolis will ease the pressure on Manila — meaning fewer hours stuck in traffic and more time with his children.

On a sweltering Sunday afternoon, the 42-year-old at the wheel bemoaned another shift spent inching along the infamously congested streets of the capital city of 13 million people.

“Crowding, pollution and traffic — this is what people say about Manila,” he said, gesturing at the gridlock.

“But luckily the government has a plan… and (President Rodrigo) Duterte is the right man to see it through.”

That plan is New Clark, a 9,450-hectare city that government officials say will be bigger than New York’s Manhattan by the time it is completed in 25 to 30 years — with an expected population of more than 1.2 million.

The aim is to build a city equipped to deal with climate shocks in one of the world’s most cyclone-affected regions, and to promote healthy, eco-friendly and sustainable living by putting nature at the heart of development, urban experts say.

Reflecting a rising trend from Japan and India to the United States, New Clark seeks to challenge conventional urban planning by uniting government, developers, business and the public — and proving that green and resilient cities can be cost-effective.

“The objective is not simply to build a disaster-resilient city, but rather a successful, innovative and economically competitive city that is also disaster-resilient,” said Benjamin Preston, a researcher at RAND Corp., a global think tank.

New Clark is still in its infancy, but officials say Duterte is fast-tracking the project as the Philippines, one of Asia’s fastest-growing economies in 2017, seeks to boost spending on infrastructure to create jobs and attract more foreign firms.

Yet even as the government races to build New Clark and tackle Manila’s booming population, density and congestion, it must plan the new city with care and avoid past mistakes, says the state-run Bases Conversion and Development Authority (BCDA).

“We need to strike a balance between fast-paced development that maximizes value for the private sector, and protecting open spaces and making the city walkable, green and resilient,” said Vince Dizon, president of the BCDA, which oversees the project.

“Traditional development cannot overwhelm or overpower the area,” he told the Thomson Reuters Foundation. “For New Clark City, here lies the challenge.”

GREEN AGENDA
Situated about 100 kilometers north of Manila in Tarlac province near Clark International Airport, one of the country’s busiest hubs, New Clark will be home to several government departments, an agro-industrial park and a huge sports complex.

Yet despite the range of planned infrastructure, only a third of the $14-billion city’s land will be developed, with two-thirds reserved for green spaces and agriculture, the government said.

Houston in Texas and nearby Singapore have provided inspiration on how to plan the city in an integrated manner where water management and green spaces are linked closely to all urban systems, according to Dutch architect Matthijs Bouw.

By focusing on nature and allowing plenty of open space along rivers, for example, New Clark can benefit beyond protecting itself from floods, said Bouw, who has worked on the master plan for the city with the government.

“Putting green areas on the agenda not only helps with water storage and drainage, but creates community spaces and guides street design in a way that benefits pedestrians and bikes… so social resilience also gets strengthened,” Bouw said.

Yet the rapid pace of development and large number of actors working on different structures and systems means some aspects could “fall through the cracks resilience-wise,” he warned.

MAKING THE CASE
Another challenge in designing and developing such a city is changing the mind-sets of officials used to traditional planning approaches, who may be wary of going green, urban experts say.

“How do you do this in a regional context in Asia where there is massive and widespread corruption, and where elected representatives change in the short term?” asked Harini Nagendra, an author and academic based in southern India.

The answer: convince politicians and bureaucrats that making a city stronger and safer against modern-day threats will not slow down development, and will save their governments money in the long run, said Oesha Thakoerdin of the Asian Development Bank (ADB), which is backing the New Clark project.

Economists at RAND are seeking to demonstrate the social, environmental and economic gains from building resilience and are developing a business case to prove that green urban planning is not only an option for wealthy economies.

“Increasingly we are seeing middle-income countries realize that planning and investing in green areas in cities is critical for their development — and cost-competitive,” Thakoerdin said.

INFRASTRUCTURE GAP
Urban experts say New Clark City could not only set a shining example for Southeast Asia in terms of balancing rapid economic development with social and environmental policies, but may also mark a turning point closer to home.

“(It) has the potential to take pressure off Manila so that Manila can also invest in building a more resilient future,” said Lauren Sorkin, director for Asia Pacific with 100 Resilient Cities, a network backed by The Rockefeller Foundation.

Manila is one of the world’s densest cities, with 14,500 people per square kilometer, almost triple London’s level, UN data shows. Congestion could cost the capital $155 million a day in lost productivity by 2030, a Japanese government study found.

Cities across the Philippines generate more than 70% of gross domestic product, while the percentage of urban dwellers is set to rise by 2050 to 65% — representing 102 million people — up from 45% today, the World Bank said.

While New Clark has been hailed for its vision, experts warn the push for resilience in Asia may be sacrificed in the rush to invest the $1.7 trillion per year through 2030 the ADB estimates is required to keep up with the region’s infrastructure demand.

“We’re facing a huge infrastructure gap… and a rapidly growing urban population,” Sorkin said.

“It’s going to be enormously difficult to make up deficits, and plan for and meet emerging needs at the same time.” — Thomson Reuters Foundation

Investment fund acquires 5% stake in Phinma Energy

PHINMA ENERGY Corp. told the stock exchange on Monday that a Cayman Islands-based investment fund had acquired a 5.005% stake in the company.

The investment fund, Motus Fund Ltd., purchased 244,723,560 shares of the power producer and supplier.

Motus, which has the power to dispose and to vote for the stake, acquired the shares during five transactions this month — March 1, 9, 12, 19 and 20 — at the price of P1.53 each.

Shares in Phinma Energy, formerly Trans-Asia Oil and Energy Development Corp., added one centavo or 0.67% to close at P1.51 apiece on Monday.

The transactions were done days after parent Phinma Corp. told the stock exchange about its plan to buy back up to 10% of the holding firm’s issued and outstanding shares until Dec. 31, 2019 through the trading facilities of the Philippine Stock Exchange.

Also on Monday, Phinma Corp. released its information statement in which it described the subsidiary as looking forward to “greater participation in the retail electricity market using its existing portfolio of generating plants.”

“The company remains poised to develop additional conventional and renewable energy projects as market and regulatory conditions merit, as it pursues its vision to be the preferred electricity supplier of choice, serving the energy supply requirements of its customers as its contribution toward nation building and making lives better,” it said.

The parent company said Phinma Energy “will enter into the downstream oil industry, initially catering to the fuel requirement of its own diesel plants,” through subsidiary One Subic Oil Distribution Corp.

It added Phinma Petroleum and Geothermal, Inc. is ready to resume operations “once conditions permit.”

“Moving forward, Phinma Energy recognizes the need to diversify its generating portfolio, particularly in light of an oversupply in baseload coal plants foreseen over the next several years,” it said.

Phinma Energy is studying projects that will diversity its generation portfolio to include gas and hydropower. Three projects under study are combined cycle gas turbine (CCGT) plants, including the 383-megawatt (MW) Sta. Ana CCGT power plant in Port Irene, Sta. Ana, Cagayan; the 383-MW Sual CCGT floating power plant in Brgy. Baquioen, Sual, Pangasinan; and the 138-MW Argao floating CCGT power plant in Brgy. Bulasa, Argao, Cebu.

A fourth project under study is the 21.6-MW Ilog hydroelectric power plant in Mabinay, Negros Oriental.

“The projects, all in the pre-development stage, have been cleared by the DoE (Department of Energy) for conduct of grid impact studies, and further development shall proceed as merited by market conditions,” the firm said. — Victor V. Saulon

BPI SRO plan ‘credit positive’

MOODY’S INVESTORS Service said the P50-billion stock rights offering (SRO) to be conducted by the Bank of the Philippine Islands (BPI) is credit positive as this will bolster the lender’s capital buffers.

“Based on our estimates, the rights issuance would add about 380 basis points to the bank’s common equity Tier 1 (CET1) ratio of 11.8% as of December 2017,” Moody’s said in its credit outlook published March 22.

This improvement, the debt watcher said, would bring BPI’s CET1 ratio well above the capital of other Philippine banks, as well as the 10% minimum requirement of the Bangko Sentral ng Pilipinas.

Moody’s said the rights issue will support BPI’s credit growth while strengthening its capital buffers against risks, adding that the capital raising activity will be efficient to support credit growth of about 20% over the next three years ending 2020.

“Thereafter, the bank’s CET1 ratio will decline to 12%-13% as the growth of risk-weighted assets outpaces the growth of retained earnings,” the credit rater said, adding that this may leave the bank in need of new capital because its internal capital generation capacity lags its credit growth.

On March 16, BPI said in a disclosure that it obtained approval of the Philippine Stock Exchange to conduct an SRO that would raise up to P50 billion, which will fund the lender’s business expansion.

The pricing for the issue will be announced today, while the offering will be conducted from April 26 to 25.

Aside from BPI, Metropolitan Bank & Trust Co. and Rizal Commercial Banking Corp. have also announced plans to conduct SROs expected to raise fresh capital worth P60 billion and P15 billion, respectively.

Last year, BPI booked a net income of P22.42 billion, up by 1.7% from the same period in 2016.

Shares in the Ayala-led bank closed at P109.30 apiece on Monday, up two centavos or 0.18%. — Karl Angelo N. Vidal

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