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Q3 farm output weighs on overall economic growth with first drop in seven quarters

THE COUNTRY’s agricultural production fell for the first time in seven quarters in the three months to September amid the onslaught of four storms, according to data released on Wednesday by the Philippine Statistics Authority (PSA), showing the sector weighed on overall economic growth for the same period which will be reported Thursday.
Farm output sank 0.83% in value terms last quarter, a reversal from a three-quarter-low 2.32% growth a year ago and the first contraction since the 1.11% drop recorded in 2016’s fourth quarter. Third-quarter farm data brought growth in the nine months to September to a nearly flat 0.15%, compared to 4.64% in last year’s comparable period and the 2.5-3.5% annual target for the sector under the 2017-2022 Philippine Development Plan.
Agriculture production has historically contributed about a tenth to gross domestic product (GDP) and accounted for a fourth of employed persons.
Q2 GDP ESTIMATE REVISED
The PSA on Wednesday also upgraded second-quarter GDP growth to 6.2% from six percent previously, on upward revisions to real estate, renting and business activity, mining and quarrying, and “other services”.
The updated second-quarter growth pushed up last semester’s average economic expansion slightly to 6.4% from 6.3% previously, but that still compared to 6.6% a year ago.
“We expect GDP growth in Q3 to be higher than the first half revised growth of 6.4% — at least 6.5% — due to the 30% growth in NG (national government) expenditures and the 8.8% real growth in manufacturing production. We also expect growth to be investment-led due to the 47% rise in NG capital outlays,” Finance Undersecretary Gil S. Beltran told reporters in a mobile phone message.
CROPS
Production of crops, which contributed 45.58% to total value of agricultural output in the third quarter, fell 3.64% compared to a year-ago 5.24% increase, fueling a 1.38% drop as of September compared to an 8.38% hike in 2017’s comparable nine months.
Weighing particularly on crop and overall farm output was a drop in production of palay, which made the biggest contribution among individual farm segments at 16.17% of total value. Palay production fell by 5.7% to 3.196 million metric tons (MMT) last quarter from 3.39 MMT a year ago. That was bigger than the 1.97% drop projected as of August on a smaller harvest area. The nine months to September saw production of this staple slip by 0.41% to 11.909 MMT from 11.959 MMT a year ago.
“This was attributed to damage brought by typhoons ‘Henry’, ‘Inday’, ‘Josie’ and ‘Ompong’ in the northern Luzon and the delayed planting due to the ongoing rehabilitation of irrigation facilities and late release of irrigation water in Cagayan Valley and CALABARZON (Cavite-Laguna-Batangas-Rizal-Quezon region). There were also reports of movement of planting caused by the late occurrence of rainfall in some part of MIMAROPA (Occidental and Oriental Mindoro, Marinduque, Romblon and Palawan) region,” the report read.
Typhoon Mangkhut, locally called Ompong, alone that ravaged northern and central Luzon’s crop fields on Sept. 15, wreaked P26.77 billion and P7.161 billion in farm and infrastructure damage, respectively, according to Oct. 6 government estimates.
Production of corn, which had the fourth-biggest contribution to total farm output value at 7.58%, saw volume drop 14.83% to 2.205 MMT last quarter from 2.589 MMT a year ago, compared to a 2.74% fall in July-September 2017. That compared to a 15.75% drop expected for the quarter in August. The PSA noted that, besides damage from last quarter’s four storms, corn output fell on delayed planting due to late rains in Cagayan Valley, which also saw a shift from this crop to banana, pineapple, ginger, eggplant, sugarcane and tobacco due to these alternatives’ higher buying prices. Production of this grain dropped 5.08% to 5.966 MMT year to date from 6.286 MMT in 2017’s comparable nine months.
OTHER SECTORS
Production of livestock, which contributed 18.89% to total farm output value, grew 2.15% last quarter compared to just 0.72% a year ago, fueling a two percent year-to-date expansion against 0.81% the past year. Most items under this category increased, except for carabao output which fell 1.63%. Hog production, which made the second-biggest contribution to the total after palay at 15.87%, grew 2.55% to 541,030 MT, against a 0.91% increase the past year.
Growth of poultry output, which contributed 18.44% to the entire sector’s value, picked up to 5.45% last quarter against 3.42% a year ago, driving year-to-date increase to 5.31% against 4.56% in 2017’s comparable nine months. “Output gains were noted for chicken, chicken eggs and duck eggs,” the report read. Production of chicken alone, which had the third-biggest contribution to total farm production value at 13.95%, grew 4.31% to 428,770 MT, against the year-ago 2.52%.
Production of fisheries, which contributed 17.08% to total agriculture output value, slipped by 2.64% compared to the year-ago 4.24% drop. Year-to-date production, however, fell by a bigger 2.21% from a 1.96% drop in January-September last year. “Production of milkfish, tiger prawn, roundscad and yellowfin tuna went down while tilapia, skipjack and seaweed posted output gains,” according to the report.
PRICES BETTER OVERALL
On the average, farmers got a better deal for their produce, with farmgate prices rising 7.71% compared to 3.61% a year ago.
Year-to-date, such prices went up 6.85% compared to 4.08% in January-September last year.
By sector, last quarter saw crop farmgate prices rise by 5.68% (compared to 1.34% a year ago), with rice going up 16.86% (compared to 0.76% a year ago) and corn surging 22.44% (turning around from the year-ago 3.98% drop).
Livestock farmgate prices rose by a slower 6.52% compared to the year-ago 13.81%, with the increase in hog prices alone slowing to 5.96% from 15.46%. Year-to-date, livestock farmgate prices grew 9.24% compared to an 11.24% increase in the nine months to September last year.
Prices of poultry recovered with a 13.03% third-quarter surge compared to the past year’s 7.67% drop, fueling a 4.85% year-to-date increase compared to a 1.79% fall in January-September 2017. Prices of chicken alone went up by 19.14% last quarter, turning around from the past year’s 10.8% drop.
Finally, the increase in fisheries prices picked up to 15.26% last quarter from 8.4% a year ago, driving the year-to-date rise to 10.33% compared to 7.97% in the nine months to September last year. — with R. J. N. Ignacio

Goods trade gap widens further in September

By Janina C. Lim
Reporter
THE CONTINUING surge of merchandise imports and a drop in products sold abroad pushed the country’s trade in goods deficit further towards the $4-billion mark in September, the Philippine Statistics Authority (PSA) said on Wednesday on the eve of its third-quarter gross domestic product (GDP) report.
Foreign sales of Philippine goods that month declined 2.6% to $5.83 billion from $5.99 billion in September 2017. The drop capped three straight months of increases. Year to date, merchandise exports were down 2.08% to $50.755 billion against the government’s two-percent full-year growth target for 2018..
Merchandise imports in September surged 26.1% to $9.75 billion from the adjusted $7.74 billion in the same month last year, taking year-to-date total to $80.665 billion, 16.271% up year-on-year against a nine percent official growth target for 2018.
September flows yielded a $3.93-billion trade deficit that was more than double the year-ago $1.75-billion gap, marking the sixth straight month the deficit hovered past the $3 billion mark.
Year-to-date trade deficit widened by 70.492% to $29.91 billion from the $17.543 billion recorded in last year’s comparable nine months.
Philippine trade year-on-year performance (September, 2018)
ELECTRONICS SHIPMENTS
Electronics as a category was both the country’s biggest merchandise exports and imports.
This group, which accounted for 58.6% of total exported goods in September, saw outbound sales grow 4.17% annually to $3.414 billion that month and by 5.743%to $28.46 billion year-to-date.
September also saw electronic products account for 24.935% of total inbound goods at $2.432 billion, 29.48% from a year ago. This item grew 20.532% to $20,818 billion year-to-date.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa noted that the September trade gap is the “widest in recorded history” and “worse than expected,” notwithstanding weakness of the peso which averaged P53.94 against the greenback September. “Exports continue to underperform, posting a two percent contraction YTD after the -2.6% in September. In turn, the weaker currency may have contributed to imported inflation as now more expensive import costs are passed on to the consumer,” Mr. Mapa said in a note on Wednesday.
The National Economic and Development Authority (NEDA) attributed imports’ surge to growing purchases of capital goods which accounted for 30.2% or $2.95 billion of the import bill in September, sustaining a double-digit increase for six straight months. The segment went up 25.4% from $2.35 billion from the same month last year. Year-to-date, imported capital goods went up to $26.24 billion from $22.55 billion. “The growth in import of capital goods could indicate that firms are making long-term investments,” NEDA quoted its director-general, Socioeconomic Planning Secretary Ernesto M. Pernia, as saying in a statement on Wednesday.
Continued strong acquisition of capital goods and raw materials will drive overall imports “to remain elevated until 2019,” Mr. Pernia said.
NEDA attributed exports’ drop to “weak global growth”, saying: “Downward adjustments in economic growth forecasts signal that global growth may have already peaked. Global growth is seen to remain on the positive but to decelerate and be uneven across countries.”
September saw sales of manufactured goods account for 85% of exports at $4.95 billion, slipping 1.9% from $5.05 billion a year ago.
Outbound shipments for mineral products slid 30.8% to $263.27 million from $380.39 million in the same comparative months.
Rizal Commercial Banking Corp. Economist Michael L. Ricafort expects merchandise trade deficit to breach the $4 billion mark within the year amid government’s aggressive infrastructure spending as well as an anticipated boost in foreign direct investments. “There is a chance for trade deficit to post a new monthly record high beyond $4 billion if the government’s infrastructure spending, especially on mega infrastructure projects (Build Build Build) continues to accelerate in the coming months and if the growth in real estate and construction continues to sustain, leading to higher imports of steel/metals and other construction-/real estate-related inputs,” Mr. Ricafort said in an e-mail, noting that September marked the second straight month that imports posted a record high.
“Continued growth in FDIs could also lead to wider trade deficits due to the need to import more capital equipment and other imported inputs needed to complete production facilities.”
For ING Bank’s Mr. Mapa, “the current account will likely remain in deficit with the Philippine peso looking to structural flows such as remittances ahead of the holiday season and the capital and financial account for support.”

Philippine trade year-on-year performance (September 2018)

THE CONTINUING surge of merchandise imports and drop in products sold abroad pushed the country’s trade in goods deficit further towards the $4-billion mark in September, the Philippine Statistics Authority (PSA) said on Wednesday on the eve of its third-quarter gross domestic product (GDP) report. Read the full story.
Philippine trade year-on-year performance (September, 2018)

SM Investments nets P26B in 9 months

SM Investments Corp. posted a net income of P26.2 billion in the first nine months of 2018.

THE holding firm of country’s richest man Henry Sy, Sr. expanded its earnings by 10% in the first nine months of 2018, as its property, banking, and retail units continued to deliver strong results.
In a statement issued Tuesday, SM Investments Corp. (SMIC) posted a net income of P26.2 billion in the nine months ending September, on the back of a 12% growth in revenues to P307.4 billion.
“The results of the first nine months have been reassuring with the resilient performance of property, banking and retail. Our financial results reflect the ongoing strength of consumer sentiment, even as we continue to monitor inflationary pressures,” SMIC President Frederic C. DyBuncio was quoted as saying in a statement.
SMIC’s property business provided 43% of the company’s total revenues, while banks and retail accounted for 36% and 21%, respectively.
The listed conglomerate’s property unit through SM Prime Holdings, Inc. generated a net income of P23.4 billion in the nine-month period, 17% higher year-on-year. This came after a 15% uptick in revenues to P74.6 billion.
The shopping mall unit boosted SM Prime’s performance, as its revenues rose 12% to P43.3 billion, accounting for 58% of consolidated revenues. Same-mall sales growth stood at eight percent, pushing mall rental revenues 12% higher to P36.8 billion.
Meanwhile, the residential group under SM Development Corp. saw its revenues increase by 23% to P25.3 billion. The unit further recorded a 25% rise in reservation sales to P52.8 billion.
For the banking unit, BDO Unibank, Inc. exhibited a six percent profit jump to P21.5 billion. Gross customer loans reached P2 trillion, higher by 17% from a year ago, while total deposits climbed 12% to P2.3 trillion. Net interest income accordingly went up by a fifth to P71.5 billion.
The country’s largest lender expects to hit a net income of P31 billion for full-year 2018.
SMIC’s other bank, China Banking Corp., has yet to release its financial results for the third quarter.
The retail unit through SM Retail, Inc. reported P227 billion in revenues for the period, 11% higher year-on-year. Bottomline growth was slower at 3% to P7.9 billion.
SM Retail consists of both food and non-food stores, ending September with a total of 2,212 stores consisting of 62 The SM Stores, 1,315 specialty retail stores, 56 SM Supermarkets, 50 SM Hypermarkets, 194 Savemore, 52 WalterMart, and 483 Alfamart stores.
The group opened three stores for The SM Store, located inside its newly opened malls in Urdaneta, Telabastagan, and Legazpi. For the food retail group, SMIC added 13 stores for Savemore, four SM Supermarkets, three SM Hypermarkets, and six Waltermart. Its convenience store chain also opened 135 Alfamart outlets.
“SM’s results are in line with our expectations but it was below consensus forecast,” according to COL Financial Group, Inc. Research Analyst Richard Laneda.
Regina Capital Development Corp. Managing Director Luis A. Limlingan also noted that SMIC’s earnings were in line with targets, saying in a mobile message that “net income was up by double digits boosted by the performance of property and retail segments.”
Shares in SMIC shed 4.35% or P40 to close at P880 each at the stock exchange on Wednesday. — Arra B. Francia

AEV posts P7.2-billion net income in 3rd quarter

By Victor V. Saulon Sub-editor
ABOITIZ Equity Ventures, Inc. (AEV) posted a consolidated third-quarter net income of P7.2 billion, higher by 28% from a year ago in part as the diversified holding company recorded one-off foreign exchange gains to reverse losses in the same period last year.
In a disclosure to the stock exchange, AEV placed the forex gains at P60 million, from last year’s non-recurring losses of P720 million, consisting of net unrealized foreign exchange losses on the restatement of consolidated dollar-denominated debts. It also cited money market placements and pre-termination costs on the refinancing of a subsidiary’s debt as among the one-off items.
Excluding the one-time gains, AEV’s core net income during the quarter was higher by 13% at P7.2 billion.
Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) rose by 14% to P17.6 billion from P15.4 billion recorded during the same period last year.
For the nine months to September, net income reached P17.3 billion, up 9% from P15.9 billion previously, as the firm trimmed its non-recurring forex losses to P407 million from P1.2 billion a year ago. These items represented AEV’s net unrealized foreign exchange losses and pretermination costs on debt refinancing.
Core net income for the nine-month period hit P17.7 billion, up 4% from P17.1 billion a year ago. Consolidated EBITDA at P45.5 billion was 10% higher than the P41.4 billion recorded in the same period last year.
Among AEV’s strategic businesses, the power unit accounted for 72% of the total income contributions, followed by financial services with 17%, food with 8%, real estate with 2% and infrastructure with 1%.
ABOITIZPOWER
Aboitiz Power Corp. Chief Operating Officer Emmanuel V. Rubio said the subsidiary’s “strong” financial showing as of September “was driven by the continuously increasing demand for reliable, affordable, and sustainable power supply.”
AboitizPower’s income contribution to AEV rose by 6% to P12.8 billion from P12.1 billion for the nine-month period.
For the third quarter, the energy company posted a net income of P7.6 billion, 25% higher than the same period in 2017. This brought its nine-month net income to P16.7 billion, up 6% from a year ago.
Among AboitizPower’s business segments, power generation and retail supply contributed P15.3 billion, up 4%, and accounted for 82% of its contribution to the parent firm.
Consolidated EBITDA rose by 11% to P33 billion primarily due to income contribution of Pagbilao Energy Corp. and Hedcor Bukidnon, Inc. Capacity sold during the review period was almost flat at 3,162 megawatts (MW) from 3,158 MW.
The power distribution business accounted for 18% of the income contributions from AboitizPower’s business segments and recorded an income share of P3.3 billion, which was higher by 8% year on year.
Next to AboitizPower, AEV’s banking and financial services business Union Bank of the Philippines was another big contributor, although its share declined by 5% to P3 billion from P3.1 billion a year ago.
On a stand-alone basis, UnionBank and its subsidiaries recorded net income of P6.1 billion, down 5% from P6.4 billion previously as a result of the lower contributions from CitySavings Bank.
AEV’s non-listed food subsidiaries Pilmico Foods Corp., Pilmico International Pte. Ltd., and Gold Coin Management Holdings Ltd. reported a combined net income of P1.5 billion, 26% higher than the P1.2 billion recorded last year.
Its local feeds business recorded a net income of P475 million, down 8%, due to the increased costs of feeds ingredients and the change in the feeds sales mix to low-margin lines.
The flour business segment earned P276 million, 30% higher than in the same period last year because of foreign exchange gains from short-term dollar investments and higher interest income.
Pilmico International reported net income of P252 million, a 415% jump from last year, due to the fresh contribution of Gold Coin Management, which is an expansion in one of its core feed milling businesses. The new contributor mitigated the effects of higher input costs to Pilmico’s international animal feeds and aqua feeds businesses.
AEV’s real estate subsidiary Aboitiz Land, Inc. reported a 19% rise net income to P403 million with the growth in top-line contributions from the industrial, residential and commercial business units. The non-listed unit also maintained operating expenses at levels similar to those in 2017.
For the infrastructure group, Republic Cement and Building Materials, Inc.’s income contribution to AEV amounted to P221 million, a decrease of 12%. The cement firm said the slight improvement in prices due to government infrastructure spending and stable private sector demand was offset by significant increases in fuel and power costs.
Luis A. Limlingan, business development head at Regina Capital Development Corp., said AEV’s performance was below his firm’s estimates.
“Despite improvements in power and food, weaker quarterly earnings from banking and infra unit still weighed on bottom line to miss estimate,” he said.
He said AboitizPower’s performance met expectations as non-recurring losses were pared within the quarter, on top of stable generation and distribution income. But he said, the company’s year-to-date showing might still be weaker from the slide in the first half of the year.
On Wednesday, shares in AEV traded lower by 2.11% to close at P46.40. AboitizPower was also weaker by 2.35% at P33.20 each.

Emperador 9-month earnings up 18%

EMPERADOR, Inc. reported its earnings breached the P5 billion mark in the first nine months of the year, amid strong growth of its premium Scotch whisky business.
In a statement, Emperador said its net income jumped 18% to P5.2 billion during the January to September period, as revenues increased by 11% to P30.5 billion.
“Our performance is brought about by the sustained growth in international expansion. The premium Scotch whisky business continues to show robust growth led by The Dalmore single malt whisky and innovations. The brandy business continues to perform well as well with greater penetration into North and Latin America. We are organically global. Our products are available in more than 100 countries and more than 350 cities in the world,” Emperador President and CEO Winston S. Co was quoted as saying.
Mr. Co said the company is planning to begin exports of Emperador Hotshot to the United States where there is cinnamon whiskey is growing in popularity.
Emperador has been aggressive in expanding its brands such as Emperador Brandy, Fundador Spanish Brandy de Jerez and The Dalmore in the overseas market.
“We have fortified our brandy portfolio to sustain our No. 1 position in Spain, Mexico, Colombia, and the Philippines. We have introduced a super-premium Brandy de Jerez in Fundador Supremo through travel retail channel in Europe and Asia like Hong Kong, Beijing, Shanghai, Korea, etc. The Fundador Supremo is now available in the Philippines with the 18 year-old Oloroso Sherry Cask retailing at P12,800 a bottle,” Emperador Spain Managing Director Jorge Domecq said.
In the Philippines, Mr. Co said the company recently launched The BaR Gin, which is infused with botanicals from Andalucian region in southern Spain.
Emperador owns Emperador Distillers, Inc., Scotch whisky maker Whyte and Mackay Group, and Bodegas Fundador in Spain.

Vista Land profits grow by 16% in Q3

VISTA LAND & Lifescapes, Inc. (VLL) grew its attributable profit by 16% in the third quarter of 2018, boosted by the double-digit increase in both its housing and rental businesses.
In a regulatory filing, the Villar-led property developer posted a net income attributable to the parent of P2.99 billion, better than the previous year’s P2.57 billion in the same period. Revenues stood at P9.91 billion, 15% higher year-on-year.
This pushed the listed firm’s nine-month attributable profit 16% higher to P8.09 billion, on the back of a 16% uptick in revenues to P31.05 billion.
“We are very pleased with our nine-month performance and we are well poised to achieve our revised growth targets for the year,” VLL Chairman Manuel B. Villar, Jr. said in a statement.
The company delivered a 16% increase in real estate revenues to P20.8 billion for the nine-month period, which accounted for 83% of revenues. Sales from the Camella brand contributed bulk of real estate revenues at 80%, followed by Vista Residences, Crown Asia, and Brittany.
Leasing income meanwhile provided the remaining 17% of revenues, rising 19% to P5.2 billion.
VLL’s commercial space hit 1.16 million square meters across 26 malls, 50 commercial centers, and seven offices by end-September.
Reservation sales went up by 17% to P57 billion, which the company noted is faster than its 12% sales growth guidance for the entire year.
“We’re cautiously optimistic about Q4. Based on Q3 we still see the trend continue. Our financial targets, we will track that because we are realizing revenues now that were sales before,” VLL President and Chief Executive Officer Manuel Paolo A. Villar said in a press briefing in Makati on Wednesday.
The company has already spent P34.9 billion in capital expenditures from January to September, from its P50-billion budget for the year.
VLL plans to launch more than P10 billion worth of residential projects in the fourth quarter, in addition to the P38 billion it unveiled in the first nine months.
For its leasing portfolio, the company looks to add another 240,000 sq.m. to its GFA in the final quarter, in order to hit its target of 1.4 million sq.m. this year.
VLL is expecting a 15-17% growth in earnings this year, as well as a 15-17% growth in reservation sales.
Shares in VLL dropped by 1.14% or six centavos to close at P5.20 each at the stock exchange on Wednesday. — Arra B. Francia

Metro Pacific says on track to hit P15-billion core profit this year

By Arra B. Francia, Reporter
METRO PACIFIC Investments Corp. (MPIC) is on track to end the year with around P15 billion in core net income, a single-digit increase from year-ago figures due to the expected slower growth in the fourth quarter.
“We’re saying that we think that fourth quarter will be pretty flat, and so you can see our core net income now is about P12 billion. And the last quarter added on to that you’ll get a number that’s roughly about P15 billion,” MPIC Chief Finance Officer David J. Nicol said in a press briefing in Makati City on Wednesday.
If realized, this would be a 6% increase from MPIC’s core net income of P14.1 billion posted in 2017.
“I expect minimal growth in Q4 core net income compared with the same quarter last year. We are working hard but constructively with government to resolve pending issues involving tariffs and rights of way,” MPIC Chairman Manuel V. Pangilinan said in a statement, referring to the government’s inaction on Metro Pacific Tollways Corp.’s (MPTC) pending petitions to raise toll fees and Light Rail Manila Corp.’s (LRMC) move to hike fares at the Light Rail Transit Line 1.
Problems involving right of way acquisition has also plagued some of the company’s infrastructure projects.
MPIC improved its core profit by eight percent to P12.2 billion in the first nine months of 2018, driven by its larger power portfolio, continued traffic growth in its toll roads, and the higher volume growth for its water unit.
System-wide revenues stood at P302.9 billion, 8% higher year-on-year.
The infrastructure conglomerate however noted growth was slower in the third quarter, particularly for the power unit due to weather disturbances. It noted that volume growth for power distributed in Luzon grew by only 2% in the third quarter, versus a 5% year-to-date growth. Meanwhile, power sold in the Visayas dropped by 3%.
Domestic toll road traffic meanwhile inched up by 4% in the third quarter, versus a 7% figure for the first nine months.
“The third quarter has showed a slowing down, or maybe a loss of some momentum… pretty much across the board there has been a reduction in volumes, but still quite strong for the year,” MPIC President and Chief Executive Officer Jose Ma. K. Lim said during the briefing.
“Partly weather disturbances, I think in the case of toll roads as well, because in the case of severe storms in some cases the power supply to a certain community is going to be shut off for safety. Part of it is also cooler temperatures,” Mr. Lim added.
MPIC’s power unit accounted for 55% of its core net income at 55% or P8.5 billion, followed by the toll roads business which provided 21% or P3.3 billion. Water generated 20% or P3 billion, hospitals contributed 4% or P586 million, while the Rail, Logistics, and Systems group posted P26 million.
The company’s power unit consists of the Manila Electric Company (Meralco) and Global Business Power (GBP). Meralco’s core profit went up by 9% to P16.7 billion during the period, thanks to a 5% uptick in energy sales backed by slightly lower tariffs.
Meralco’s better performance offset the 9% decline in GBP’s core net income to P1.9 billion, weighed down by depreciation expenses for its Panay power plant and higher costs, among others.
For the toll roads unit, MPTC recorded a 55% increase in system-wide vehicle entries to 916,169 per day, boosted by the contribution of PT Nusantara Infrastructure Tbk, its investment in Indonesia.
In the Philippines, average daily vehicle entries across the North Luzon Expressway, Cavite Expressway, and Subic-Clark-Tarlac Expressway went up by 7% to 471,634.
The water unit through mostly Maynilad Water Services, Inc. booked a 10% increase to P6.1 billion, backed by a 6% increase in revenues to P16.6 billion.
Meanwhile, the hospital unit benefited from its investments in Jesus Delgado Memorial Hospital in Quezon City and St. Elizabeth Hospital in General Santos City last year. It recorded a 11% increase in out-patient visits and 15% uptick for in-patient admissions.
The railway unit through LRMC increased ridership at the LRT-1 by 5% to 452,892 by end-September.
Papa Securities Corp. Equity Investment Analyst Emille Martin Munsayac noted that MPIC’s earnings result is in line with their full-year estimate at 73%, but is ahead of consensus’ 83%.
“Revenues came in line with expectations but higher financing costs eased the bottomline. MPIC is guiding for minimal growth in 4Q,” Mr. Munsayac said in a text message.
Shares in MPIC slipped by 0.82% or four centavos to close at P4.86 each on Wednesday.
MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls.

Power rates to rise in Nov.

AFTER two straight months of decrease, power rates in November will rise by P0.1135 per kilowatt-hour (kWh) largely because of the higher charges from the wholesale electricity spot market, Manila Electric Co. (Meralco) said on Wednesday.
For those using 200-kWh, which represents the consumption of a typical household, the increase to P10.0901 per kWh from P9.9766 per kWh in October means a rise of P23 in their total monthly bill this month.
The rise comes after an uptick in power demand coupled by a rise in Malampaya gas prices. It also follows the rate reduction in September and October totalling P0.25 per kWh.
Consumers using 300 kWh, 400 kWh and 500 kWh can expect their monthly electricity bills to rise by P34.05, P45.40 and P56.75, respectively. Still, Meralco said since April this year, electricity rates registered a net decrease of P0.46 per kWh.
“From P5.1908 per kWh last month, the generation charge for November went up to P5.2725 per kWh, an increase of P0.0817 per kWh,” the listed company said.
The distribution utility, which serves 6.542 million customers, said the higher generation during the period was due to the P1.3545 per kWh higher charges at the wholesale electricity spot market (WESM).
“WESM charges went up due to higher power demand in Luzon resulting from warmer temperature in October. The share of WESM purchases to Meralco’s total requirement this month was 16.6%,” the company said.
In contrast, the cost of power from independent power producers (IPP) and power supply agreements (PSA) dropped by P0.1450 per kWh and P0.5611 per kWh, respectively.
“A stronger peso offset an increase due to higher Malampaya natural gas prices as a result of the quarterly repricing to reflect recent movement of crude oil prices in the world market,” Meralco said.
Power plants using Malampaya natural gas provided 61% of the distribution utility’s requirements. These are First Gas Power Corp.’s Sta. Rita and San Lorenzo power plants; First NatGas Power Corp.’s San Gabriel plant; and the Ilijan plant under administrator South Premier Power Corp.
For November, the share of IPP and PSA purchases to Meralco’s total requirement is 42.6% and 40.8%, respectively.
During the month, transmission, taxes and other charges also increased. For residential customers, the transmission charge rose by P0.0021 per kWh due to an increase in the ancillary service charges of system operator National Grid Corporation of the Philippines (NGCP). Taxes and other charges increased by P0.0297 per kWh.
“Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 40 months, after these registered reductions in July 2015,” the company said, adding that it does not earn from the pass-through charges, such as the generation and transmission charges.
The payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the NGCP. Taxes and other public policy charges, including the feed-in tariff allowance, are remitted to the government.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon

Sky-high dining

SORRY, but your industrial-inspired restaurants will have to take a backseat this Christmas. BusinessWorld just had a preview of Christmas dinner at Discovery Suites’ Hangar 43, and let me tell you, dining with a view filled with real cranes and cables, and actual buildings and city lights, concrete and exposed pipes won’t look the same anymore.
Because of complications created by towers surrounding the Discovery Suites building in the Ortigas area, the helipad on the 43rd floor of the hotel hasn’t been operational for quite some time. “It’s hard to be innovative these days. Because we have this asset that wasn’t being used, we thought, ‘Why not?,’” said Angela Padilla, marketing communications director for the Hotel.
The helipad has been used at least twice before for Valentine’s Day dinners, but due to numerous requests, the hotel has decided to open it up for Christmas parties and other occasions, the first booking available on Nov. 26.
The helipad, called Hangar 43, is available for a maximum of 35 persons at rates between P90,000 to P110,000 net. Three menu packages are available: Barbecue, Holiday, and Asian, and will include centerpieces, one round of iced tea or soda, a sound system, and complimentary parking for 10% of the guests.
As well, the hotel’s renowned restaurant, 22 Prime, will be offering pop-up dinners at the top floor on all the Saturdays of December (seats are limited).
(For those who still want the view but are uneasy about rooftop dining, the hotel has more function areas at the 41st and 42nd floors which also have great views of the city. And since they are not limited by the edge of the roof, these areas have bigger floor areas and can accommodate bigger groups of up to 120 persons.)
“The view is something you don’t really get anywhere else,” said Ms. Padilla.
Some caveats from us though: the elevators at the building only go up until the 41st floor, so you’ll have to take two flights of stairs to get there. No kids below 15 are allowed, and the venue closes at 10 p.m.; all for safety reasons. For other concerns about becoming a bit too giddy while on the roof of a skyscraper, security officers are posted throughout.
For bookings and inquiries on the Christmas party packages and pop-up holiday dinners, call 719-8888, or visit www.discoverysuites.com. — Joseph L. Garcia

Manila Water posts flat earnings

MANILA Water Co., Inc. reported a 1% increase in net income as of September this year to P4.93 billion from P4.89 billion in the same period last year, the Ayala-led company told the stock exchange on Wednesday.
The growth during the nine-month period comes after the company recorded a 7% increase in revenues to P14.43 billion, and a 45% growth in other income to P944 million.
Manila Water’s other income include its equity share in the net income of associates at P515 million, up nearly 83% from P282 million previously.
The company did not report its separate figures for the third quarter.
Manila Water, which holds the water concession in greater Manila’s eastern side, registered a cost of sales and operating expenses of P5.94 billion, 21% higher compared with the previous year’s P4.90 billion.
Earnings before interest, tax, depreciation and amortization (EBITDA) reached P9.43 billion, up 3% from P9.19 billion. This translates to an EBITDA margin of 65% as against 68% in the previous year.
Manila Water’s report comes after it disclosed last month new projects, including the construction of a water supply system in San Fabian town in Pangasinan province following the grant of a franchise by municipal officials.
The project, which will be undertaken by subsidiary Manila Water Philippine Ventures, Inc., will have a capital expenditure of around P742 million. It is expected to be operational by 2019.
The franchise follows Manila Water’s announcement that the same unit received the notice of award from the Tanauan Water District for the implementation of a joint venture project for the design, improvement, upgrade, rehabilitation and expansion of the town’s water supply and sanitation facilities.
On Wednesday, shares in Manila Water slipped 0.19% to close at P25.80 each. — Victor V. Saulon

Is this the bagoong of the mountains?

By Raymond A. Macapagal
IN MANY coastal communities of the Philippines, bagoong is an indispensable food item. This fermented mixture of salt and seafood (small fish or shrimp) keeps for months, assuring families of a tasty ulam (viand) during the lean fishing season when habagat winds, meaning the southwest monsoon, tear through the seas. Its intense saltiness helps it go a long way — one can eat a plateful of rice with just a spoonful of bagoong! Many weeks of fermentation unlock the umami-rich elements in the briny seafood that served as the flavor enhancer in soups and stir-fries long before the advent of monosodium glutamate powder or vetsin. Bagoong, however, is not unique to the Philippines. We share this fermented seafood culture with many of our neighbors like Thailand (where bagoong is called khapi), Cambodia (pra hok), Vietnam (mam ruoc), Malaysia (belachan), and Indonesia (terasi).
Human ecologist Kenneth Ruddle and cultural anthropologist Naomichi Ishige, in their 2010 article on the fermented fish products of Southeast Asia1, describe two types of bagoong: the shiokara type and the comminuted type. The first type, borrowing a traditional Japanese term, refers to highly salted whole fish like the padas of Pangasinan, which uses juvenile samaral (rabbitfish). The second type refers to the fine or ground-up paste like the ubiquitous bagoong alamang or guinamos, made from tiny shrimp and krill. Indeed, most people know bagoong to be made of seafood. But in the high mountains where fish or shrimp can hardly be found, do the people there also make some sort of bagoong?
The answer might be “no” if we restrict our definition of bagoong to seafood. In 1991, however, Perlito I. Ibarra and his colleagues at the University of the Philippines in Los Baños, successfully made bagoong, and its customary liquid by-product patis, from carabeef. If we expand the scope of raw ingredients to include other terrestrial animals then perhaps the pinayt of Batad may be considered a kind of bagoong.
All throughout the Cordillera mountain range, the indigenous peoples have developed various ways to preserve their meat. Because large animal slaughters only happen on rare occasions, the surplus meat from great feasts must be stored and preserved for the longest possible time. For example, the people of Sagada have the smoked pork jowl called etag. Bontoc has its sundried salt pork inasin. Kiangan has pinunnog, a smoked sausage. Most of these preserved meats are dry, and there is very little fermentation that happens. In Batad, a picturesque rice-terraced village in the province of Ifugao, there is the moist, fermented pinayt. It can best be described as a bagoong made of pork.
In the decade or so that I, a city-dwelling Tagalog, have been doing cultural work in the UNESCO World Heritage Cordillera landscape, I have mostly been used to eating their simple, almost primeval cuisine. There is inlagim, a smoky native chicken soup that derives its flavor from a fiery de-feathering process. But this rudimentary tinola (with no ginger, no chili leaves, no green papaya such as I am accustomed to) is served only on special days. Most of the time, we just eat legumes like balatong (mung beans) and kardis (pigeon peas) boiled with a little salt. I had thought there was nothing more to this ancient rice-centric montane food culture. That is, until one day when my neighbor Tito Juan brought out a thick bamboo tube hidden amongst his heirloom ceramic wine jars. As he carefully removed the banana leaf covering, an overwhelming putrid odor filled the air below his hut where we were drinking cuatro cantos, gin in a four-cornered bottle.
“Mun-akhub?” He asked if it smelled bad. My contorted face answered his question all too demonstratively. He sniffed again, and his contented countenance made me think that this was the odor he was looking for. “Pinayt hete,” he said while emptying the contents onto a basin then rinsing off the slippery liquid, and perhaps more than a few writhing maggots. As he cut the gray-brown meat into cubes, a bright red tocino-like interior was revealed. I picked up a piece to investigate. The meat was falling apart like an over-tenderized, aged, malodorous steak. As Tito Juan boiled the pork with balatong, a familiar scent wafted in the air. It was the smell of my local palengke fish section in San Juan City around noontime, when the market fishmongers open and clean their jars of raw fermented alamang.
Just like shiokara, pinayt is heavily salted chunks of pork that are placed in sealed bamboo containers and left to ferment for weeks. But it is not just any kind of pork. It has to come from naturally raised swine untainted by antibiotics and commercial feeds. Artificial ingredients tend to give the pork an unsavory flavor, or prevent the growth of the desired microbes. The people of Batad prefer their native p’ha-p’huy (pig) fed with giant taro corms and wild banana trunks. While the salting of the meat seems to be a straightforward process, the villagers believe that some people (like Tito Juan, and the noisy old bachelor Pawit) do it better than others. And that there is an art to it. Unlike the everyday bagoong, pinayt is a special dish, sometimes used as offerings in place of culled chickens in rituals. It is neither a side dish nor a condiment; it is given central importance as a viand in a meal. Its strong salty taste also assures that a lot of rice may be flavored with only a small amount of pinayt. Thus, pinayt can be shared with many people during community events and rituals.
As the mung beans cook, the pinayt in the kaldero (pot) all but disintegrates. We ladle a serving of the mushy soup onto our warm rice of the tinawon variety. Just as with the lowland shrimp paste, the raw putrefaction of pinayt mellows into a rich savoriness with some cooking. My palate recognizes that gamey, salty umami in the soup. I then realize that there, in a tiny mountain hamlet hundreds of kilometers away from the ocean, I might just have discovered the bagoong of the mountains.

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