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Failed 3rd telco bidders file motion for reconsideration

bidding NTC
PHOTO BY DENISE A. VALDEZ

By Denise A. Valdez, Reporter
THE two participants who were disqualified from bidding for the new major telco player have asked the National Telecommunications Commission (NTC) to reconsider its decisions.
Sear Telecommunications Consortium, led by TierOne Communications International Inc. and LCS Group of Companies (Sear-LCS-TierOne), and Philippine Telegraph and Telephone Corp. (PT&T) filed separate motions for reconsideration on Friday after the bidding’s selection committee disqualified over the lack of required documents.
The bid of Sear-LCS-TierOne wasn’t allowed to undergo further evaluation by the selection committee for the lack of a “participation security” worth P700 million. PT&T faced the same dilemma, but for not submitting the NTC certification proving its 10-year experience as a telco provider in a national scale.
“It will avail of the remedy available under the Selection Rules, by filing a Motion for Reconsideration (MR) within the prescribed period. In its MR, Sear will demonstrate its compliance with the requirements, which it hopes will qualify it to participate in the Opening of the Second Submission Documents,” Sear-LCS-TierOne said in a statement late Thursday.
The group also accused the franchise holder of the provisional winner, Mindanao Islamic Telephone Company, Inc. (Mislatel), of breaching a contract with one of its partners, DigiPhil Technology.
“Mislatel is guilty of fraudulent and obstructive practice. For this reason, the selection committee can declare a failure of such selection process…,” it said.
The group composed of China Telecommunications Corp., Dennis A. Uy’s Udenna Corp. and its subsidiary Chelsea Logistics Holdings Corp. had used Mislatel’s franchise as vehicle for its participation in the bidding.
“[T]here is a Damocles’ sword hanging over the NTC, and the new major player selection process would have been for naught… The best option for NTC would be to declare a failure of this process and commence another selection process,” Sear-LCS-TierOne said.
PT&T, on the other hand, argued the bidding terms of reference which required a participant to have operated for 10 years on a “national scale” as including “or particular regions thereof.”
The NTC did not issue a certification to PT&T indicating that it meets this requirement, as it said in an Oct. 11 clarificatory bulletin that the qualifier only applies to foreign companies.
“The interpretation is erroneous because there is no distinction between foreign and local company in the terms of reference insofar as the applicability of the term ‘regional operations’ is concerned. This is clearly discriminatory against Filipino telco companies,” PT&T said in a statement on Friday.
It added that a “mere clarificatory bulletin” should not change what’s written in the final terms of reference, which was published as a memorandum circular and it said thus has “force and effect of a law.”
The selection committee now has three days to review the motions for reconsideration submitted by the participants. Once any of the two are granted, the win of Mislatel Consortium may be tested.
Mislatel Consortium won Wednesday’s third telco bidding after earning 456.80 points out of the maximum 500 points. It committed for its five years of operations a cumulative coverage of 84.01% of the population, total capital expenditure and operating expenditure of P257 billion, and minimum average broadband speed of 27 Megabits per second (Mbps) in its first year and 55 Mbps in succeeding years.

JG Summit profit falls in Q3

JG Summit Holdings, Inc. saw its attributable profit drop by a fourth in the third quarter of 2018, as the weak peso weighed on its petrochemicals, food, and airline businesses.
In a regulatory filing, the Gokongwei-led conglomerate reported a net income attributable to the parent of P4.96 billion, lower than the same quarter a year ago’s figure of P6.60 billion. This came amid a six percent increase in revenues to P72.23 billion for the period.
On a nine-month basis, the listed holding firm said attributable profit went down by 30% to P14.80 billion, after revenues inched up by seven percent to P217.52 billion.
“JG Summit has a diversified portfolio with a combination of defensive and cyclical businesses. Our airline and petrochemical divisions are more susceptible to the volatility in oil prices and the weaker peso but the effect on earnings has been partly cushioned by our other core businesses in food, real estate and banking,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said in a statement.
JG Summit’s food and beverage business through Universal Robina Corp. (URC) was hit by the inflationary environment, which resulted to lower demand for ready-to-drink (RTD) beverages. This offset the improved sales in the branded consumer foods segment (BCFG) and coffee.
URC’s international BCFG also posted flat results, as sales in Thailand and New Zealand weakened despite the recovery in Vietnam.
With this, URC’s attributable profit fell by 17.2% to P6.8 billion in the nine-month period, after a 3.4% uptick in sales to P95.53 billion.
Earnings of Cebu Air, Inc. dropped by 36.5% to P2.78 billion during the January to September period, even as it booked a 7.4% increase in revenues to P54.4 billion.
The operator of budget carrier Cebu Pacific saw its expenses go up by 15.8% to P49.9 billion, primarily due to higher fuel prices. It noted that average prices based on the Mean of Platts Singapore (MOPS) stood at $85.37 per barrel from January to September, versus $62.89 per barrel in 2017. The weaker peso further pushed up the company’s expenses.
Meanwhile, the group’s property unit through Robinsons Land Corp. (RLC) improved its nine-month attributable profit by 43% to P6.55 billion, following higher sales of residential properties and better rental income. Revenues grew by 31% to P21.89 billion during the period.
RLC attributed its growth to its mall division, as it opened its 50th mall and recorded higher cinema box office receipts for the period. Its office leasing business also sustained its momentum thanks to the business process outsourcing sector, while residential revenues also went up due to higher demand from overseas buyers coupled with new product launches.
The petrochemicals group delivered earnings of P1.9 billion from January to June, 61% lower year-on-year due to unexpected plant shutdowns, generally weak demand across the region in the third quarter, higher financing costs, and foreign exchange losses. Average selling prices however increased, resulting to a 6% increase in revenues to P32.4 billion.
For Robinsons Bank Corp., net income jumped by 23% to P293 million, following a 32% increase in revenues to P4.3 billion due to higher interest income from its loan portfolio.
“Given our long-term view, we plan to continue investing wisely for growth as well as transform/strengthen our organizational capabilities so we reap the benefits when the cycle turns more favorable,” Mr. Gokongwei said.
Shares in JG Summit slumped 3.83% or P1.85 to close at P46.45 each. — Arra B. Francia

PAL operator trims losses in Q3

THE operator of Philippine Airlines (PAL) trimmed its attributable net loss by 15% to P2.54 billion in the third quarter.
In a regulatory filing, PAL Holdings, Inc. said its revenues grew 22% to P36.94 billion during the July to September period, on the back of an “increase in number of passengers as a result of additional flight frequencies and introduction of new routes.”
However, third quarter expenses still rose 21% to P39.73 billion, due to rising jet fuel prices.
“(The growth in expenses is) mainly due to the increase in jet fuel prices, aircraft lease charges, and number of flights operated. This was offset in part by the decrease in maintenance and repairs and general and administrative expenses,” the listed firm said.
PAL’s spending for jet fuel surged 54% as the average price grew by 34% to $96.38 per barrel from only $71.7 per barrel last year. Fuel consumption also rose as it added more flights during the period. “Lease charges likewise increased by 28.0% or P1.00 billion due to additional aircraft deliveries in 2018,” it added.
For the nine-month period, PAL cut its attributable net loss by 8% to P3.921 billion from P4.263 billion in the same period last year.
PAL said its total revenue in the first three quarters of the year is 16% higher at P112.07 billion, due to increased passenger and cargo revenues.
“The increase was brought about mainly by higher passenger and cargo revenues generated during the current period as a result of the increase in number of passengers and flights operated,” it said.
Total expenses jumped by 17% to P115.30 billion during the first nine months of the year, fueled by a 27% rise in flying operations expenses to P63.26 billion.
In September, PAL was allowed by the Civil Aeronautics Board (CAB) to implement a fuel surcharge for international and domestic flights to help it recover losses from the rising price of jet fuel.
PAL filed an application with the regulator earlier this year, saying it has been taking a hit from the global trend of costlier aviation fuel.
The International Air Transport Association (IATA) said the price of jet fuel is $89.90 per barrel as of Nov. 2, 22.8% higher from in the same period last year. — Denise A. Valdez

Mixed results for Entertainment City’s casino operators

OPERATORS of integrated resorts and casinos along Entertainment City reported mixed results for the third quarter of 2018.
Bloomberry Resorts Corp. — the operator of Solaire Resort and Casino — saw a 39% drop in attributable profit to P1.13 billion in the third quarter of 2018, due to lower VIP hold rates alongside higher interest expenses.
Third quarter revenues were flat at P9.81 billion, up by two percent year-on-year. The gaming segment accounted for bulk of revenues at P9.05 billion, while the food and beverage unit generated P494.24 million.
Gross gaming revenues (GGR) rose by 1.9% to P11.71 billion, as VIP hold rate stood at 1.91%, lower than the 2.83% seen in the same period a year ago. With this, revenues from the VIP segment slipped by 26% to P3.98 billion. The mass table tempered this decrease, after booking a 37.8% revenue uptick to P4.14 billion.
Its operations in Korea through Jeju Sun and Hotel Casino meanwhile grew its GGR by 28.1% to P193.5 million due to “an increased level of play in the VIP segment as a result of the highly competitive marketing programs of Jeju Sun.
On a nine-month basis, Bloomberry’s attributable profit went up by 8.45% to P6.47 billion, after revenues improved by 14% to P31.91 billion.
Meanwhile, Melco Resorts and Entertainment (Philippines) Corp. (MRP) said net revenues went down by four percent to $141.7 million in the July to September period, versus $148.2 million recorded in the same period a year ago.
The operator of City of Dreams Manila said the decline was mostly due to a shift in accounting standards.
“The decrease in net revenue was primarily attributable to higher commissions reported as a reduction in revenue upon adoption of a new revenue recognition standard issued by the Financial Accounting Standards Board, partially offset by improved gross gaming revenues,” the company said.
Without the change in accounting standards, MRP said net revenues would have been at $167 million, around 13% higher from the same period a year ago.
Rolling chip volume reached $3 billion-unchanged from year-ago figures- with a win rate of 2.7%. Mass market table games generated $204.9 million, with a hold percentage of 32.4%. Meanwhile, gaming machine handle rose to $935 million, with a win rate of 5.3%, lower than 5.6% in the third quarter of 2017. — Arra B. Francia

Cebu Air swings to P518M loss in Q3

CEBU AIR, Inc. swung to a P518.4-million net loss in the third quarter from a P42-million profit a year ago, amid the continued rise in fuel prices and weakness of the Philippine peso against the US dollar.
In a regulatory filing, the operator of budget carrier Cebu Pacific said third quarter expenses grew by 19% to P16.8 billion, outpacing the 10% growth in revenues to P16.2 billion.
The bulk of expenses came from flying operations, which surged 35% in the July-September period to P7.4 billion due to higher jet fuel prices and a weaker peso.
For the first nine months of 2018, Cebu Air said its net income dropped 36% to P2.781 billion. Revenues grew by 7% to P54 billion, but expenses swelled by 16% to P49.9 billion.
Flying operations expenses rose 24% to P22 billion for the nine months ending September, driven by a 28% increase in aviation fuel expenses to P18.721 billion.
Cebu Air said this was due to “the increase in jet fuel prices as referenced by the increase in the average published fuel MOPS price of $85.37 per barrel in the nine months ended September 30, 2018 from $62.89 per barrel in 2017.”
“The increase in fuel cost was further augmented by the weakening of the Philippine peso against the U.S. dollar as referenced by the depreciation of the Philippine peso to an average of P52.51 per US dollar for the nine months ended September 30, 2018 from an average of P50.24 per US dollar last year based on the Philippine Dealing and Exchange Corporation (PDEx) weighted average rates,” the Gokongwei-led company said.
It was only in September when the Civil Aeronautics Board (CAB) approved the implementation of fuel surcharge for airlines to help them recoup losses from the rising world prices of jet fuel.
Cebu Air posted 28% higher net foreign exchange losses of P421.47 million in the third quarter, bringing the nine-month loss to P2.006 billion due to the depreciation of the peso against the dollar.
Rising interest rates also weighed on the company. Cebu Air recorded a 49% increase in interest expenses to a P591 million in the July to September period. This pushed the nine-month interest expense 47% higher to P1.55 billion.
Cebu Air said its average air fares went up by 5% to P2,617 for the January to September period, from P2,483 average fare during the same period a year ago.
Passenger volume inched up 1.6% to 15.106 million in the first nine months of 2018, versus 14.87 million a year ago. — D.A.Valdez

D&L on track to meet P3.4B income target

By Arra B. Francia, Reporter
D&L Industries, Inc. (DNL) said it remains on track to book a P3.2-billion profit for 2018, after net income by end-September rose by 13% year-on-year.
In a statement issued Friday, the listed plastics and oleochemicals manufacturer said net income reached P2.4 billion during the January to September period. For the third quarter alone, net income climbed 13% to P874 million.
“We really had a good third quarter this year,” DNL President and Chief Executive Officer Alvin D. Lao said in a press briefing in Makati on Friday.
Revenues however slipped by four percent in the third quarter to P6.91 billion, bringing the nine-month figure to P20.17 billion, higher by one percent year-on-year. The 26% increase in revenues from aerosols products tempered the seven percent decline seen in food ingredients. Revenues from specialty plastics and oleochemicals meanwhile grew by 19% and six percent, respectively.
Mr. Lao said the sales performance was dampened by lower prices of raw materials.
“Many of the raw materials we worked with like coconut oil, palm oil, prices are down significantly. Prices of coconut oil were down over 40%, palm oil prices are down 16% compared to last year, that had a negative effect on selling prices for products that use raw materials,” Mr. Lao explained.
Despite the flat revenues, the company grew volumes of high margin specialty products (HMSP) by eight percent, driving net income margin by 11.9%.
HMSPs account for 63% of the company’s revenues, while the remaining 37% came from the commodity business.
“The growth in the high margin side of the business is a reflection of our investments in R&D which allow us to increase our market penetration and to develop more complex and customized products for our customers,” the company explained.
DNL noted that 23% of its revenues for the nine months ending September were from exports, bulk of which are food ingredients.
The company delivered a free cash flow of P4.3 billion during the period, which it will be used to pay up debt.
“We’ve paid down our debt by a lot, and that’s timely because interest rates have been going up… Our interest expense for the first nine months of the year has actually gone up from last year, so despite the lower level of debt, our interest expense level has still gone up. It’s really a reflection of higher interest rates,” Mr. Lao said.
Shares in DNL were unchanged at P10.96 each at the stock exchange on Friday.

Phoenix Petroleum 9-month core profit jumps 27%

PHOENIX Petroleum Philippines, Inc. grew its core profit by 27% in the first nine months of the year, driven by higher volumes of petroleum products sold.
The listed company led by businessman Dennis A. Uy said core net income reached P1.32 billion from January to September, as revenues doubled to P64.96 billion. The volume of petroleum products sold jumped by 51% to 2.02 billion liters, with market share steady at 7.1% based on the Department of Energy’s report in the first half of the year.
Phoenix Petroleum’s domestic business increased its volumes by 21%, boosted by an 11% uptick in fuels and 23% for LPG. Its trading operations overseas through PNX Petroleum Singapore Pte. Ltd. accounted for more than a fourth of consolidated volume sales after selling more than 500 million liters during the nine-month period.
Its recently acquired convenience store chain, Philippine FamilyMart CVS, Inc. delivered average daily sales of 21% post-acquisition. The firm attributed the growth to the launch of its Generation 2 stores, which features more food selections and larger dining areas to attract more consumers.
The company currently operates 71 FamilyMart stores, with five more stores to be opened before the end of the year. Four of the operating stores are located on board Starlite Ferries vessels, with a full store on Starlite’s MV Salve Regina plying the Batangas to Caticlan route.
“In this highly dynamic operating environment, we continue to recognize opportunities. We are broadening our products and services — fuels, LPG, convenience stores, payments, and soon, asphalt — developing credible and compelling offers that create value for our consumers, partners, and shareholders,” Phoenix Petroleum Chief Operating Officer Henry Albert R. Fadullon said in a statement.
The company plans to issue up to P10 billion worth of commercial papers this year to finance the importation of fuels and lubricants, and to repay short-term loans with BDO Unibank, Inc., Asia United Bank Corp., Robinsons Bank Corp., United Coconut Planters Bank, and Development Bank of the Philippines due in December.
Shares in Phoenix Petroleum went up by 0.73% or eight centavos to close at P10.98 each at the stock exchange on Friday. — Arra B. Francia

Imelda Marcos found guilty of graft

THE Sandiganbayan on Friday found former first lady and Ilocos Rep. Imelda R. Marcos guilty on seven counts of graft during the Marcos regime.
In a statement, Ms. Marcos, who is 89 years old, said she plans to file a motion for reconsideration.
“(Retired Court of Appeals Justice Manuel “Lolong” M. Lazaro), who has previously appeared as counsel in this case, will act as my counsel in the interim. He is presently studying the decision and has advised us that he intends to file a Motion for Reconsideration,” she said.
In its decision released on Friday, the Sandiganbayan 5th Division said Ms. Marcos is “guilty beyond reasonable doubt” for seven charges of graft over the bank transfer of $200 million in public funds to Swiss foundations that the family created.
“She is sentenced, in each of these cases, to suffer the indeterminate penalty of imprisonment from six (6) years and one (1) month as minimum to eleven (11) years as maximum, with the perpetual disqualification to hold public office,” the anti-corruption court said.
Ms. Marcos was not present during the hearing on Friday.
The Sandiganbayan also ordered the issuance of an arrest warrant against Ms. Marcos. As of press time, the arrest warrant has not been issued.
Assistant Special Prosecutor Ryan Quilala said the Sandiganbayan decision isn’t final and executory yet as the former first lady can still file an appeal.
“Di pa po final. May mga remedies si congressswoman under the law (It’s not yet final. There are still remedies for the congresswoman under the law),” he said.
Under the Sandiganbayan’s rules, Ms. Marcos has 15 days from promulgation of the ruling to file an appeal. The court has 30 days to decide on the appeal. She may also elevate the case before the Supreme Court.
The graft charges were filed against Ms. Marcos in 1991. She was not charged with plunder because the Anti-Plunder law did not exist then and the offenses were committed in the 1970s and 80s while she was still Minister of Human Settlements and member of Interim Batasang Pambansa.
Under the law, graft is a bailable crime.
Philippine National Police (PNP) Chief Oscar D. Albayalde said the PNP will not arrest the former first lady not until they are given instructions by the court to do so.
Presidential Spokesperson Salvador L. Panelo said the decision is “a good reminder to all public servants that public office is a public trust and that we are all accountable to the people we serve.”
“This latest development underscores that our country currently has a working and impartial justice system that favors no one,” Mr. Panelo said in a message to reporters on Friday. — Gillian M. Cortez

Honasan accepts DICT post

SENATOR Gregorio B. Honasan II on Friday said he is accepting President Rodrigo R. Duterte’s offer to become the next chief of the Department of Information and Communications Technology (DICT).
“For a better Philippines, a better government, for the Filipino People, and for a better future for our most precious children, I have decided to accept the offer of the President to help lead the DICT,” Mr. Honasan said in a phone message to reporters.
Mr. Honasan’s second term at the Senate ends in 2019. He is the second senator of the 17th Congress to leave the Senate to join Mr. Duterte’s Cabinet, after Senator Alan Peter Cayetano who was tapped to head the Department of Foreign Affairs.
For its part, Malacañang expressed confidence that Mr. Honasan will be able to provide a ”good direction” for the DICT.
“With the entry of a provisional new major player in the telecommunications industry, we are confident that the senator would provide good direction and sound management to the DICT, consistent with the President’s priority programs beneficial to Filipino consumers in the areas of information, communications and technology,” Presidential Spokesperson Salvador S. Panelo said in a statement.
He added that the Office of the President has yet to provide the formal appointment paper of Mr. Honasan. “For now, we congratulate Senator Honasan and wish him all the best as he undertakes genuine reforms in the DICT,” he said.
In a phone message to reporters, DICT Acting Secretary Eliseo M. Rio, Jr. said he hopes that the President will give him “a few more weeks to finalize the entry of a third telco player.”
“I would not understand why I have to be changed in midstream of a very important activity that would finally bring a significant improvement in the telecommunication industry. I see no urgency in Senator Honasan taking over, at least until I fully finish this job on the third telco, which I promised the President it would be done before Christmas,” Mr. Rio also said.
The government earlier this week declared the Mislatel Consortium, composed of China Telecommunications Corp., Dennis A. Uy’s Udenna Corp. and its subsidiary Chelsea Logistics Holdings Corp., as the provisional winner of the auction for the Philippines’ third major telco. — Arjay L. Balinbin

ASEAN leaders to push for ‘early conclusion’ of RCEP talks — DFA

THE Department of Foreign Affairs (DFA) on Friday said the leaders of the Association of Southeast Asian Nations (ASEAN) will push for the “early conclusion” of negotiations on the Regional Comprehensive Economic Partnership (RCEP) during the 33rd ASEAN Summit and Related Summits in Singapore from Nov. 13 to 15.
In a Palace press briefing on Friday, Nov. 9, DFA Assistant Secretary Junever Mahilum-West said the heads of the ASEAN member-states and other stakeholders “will look into the progress in the negotiations of this very important document” during the second summit on the RCEP next week.
The RCEP is the proposed free trade agreement between the ten ASEAN member-states and the six ASEAN free trade agreement partners (Australia, People’s Republic of China, India, Japan, Republic of Korea, and New Zealand).
“We were hoping that the RCEP would be concluded by the time of the summit, but it seems that we’ll have to wait a little bit longer. But…during the summit, the leaders would express their commitment to conclude the negotiations because this is very important for the region, especially in view of the rising trade developments, tensions…[and] unilateral actions, and we expect the leaders to call for the expeditious conclusion of the RCEP,” Ms. West said.
She added that the “leaders won’t say that [they] will finish [the negotiations] by this year,” but they “will call on all parties to make sure that we have an early conclusion of the agreement.”
The DFA official also announced that President Rodrigo R. Duterte “will be participating in this summit at the invitation of Singapore Prime Minister Lee Hsien Loong.”
“This is the second and last summit of ASEAN for the year. Apart from their own meeting, the ASEAN leaders will have summits with leaders from dialogue partners in the format of the Plus One Summit. They are going to meet individually with Australia, China, India, Japan, Republic of Korea, Russia and the United States. At the ASEAN-Plus Three Summit, that means ASEAN 10 with the leaders of China, Japan and the Republic of Korean; and in the East Asia Summit, which includes Australia, China, India, Japan, New Zealand, Republic of Korea, Russia and the United States,” she explained.
She added that regional and international issues on peace and security, particularly in the Korean Peninsula and the South China Sea, may be tackled.
According to Ms. West, during the event, “Singapore will symbolically hand over the Chairmanship of ASEAN to Thailand, and Thailand will assume as Chair at the beginning of 2019.” — Arjay L. Balinbin

NEDA ICC-CabCom approves increase in North-South Commuter Railway project cost

Philippine National Railways (PNR)
BW FILE PHOTO

By Melissa Luz T. Lopez, Senior Reporter
THE NATIONAL Economic and Development Authority (NEDA) raised the project cost for the long-haul commuter line of the Philippine National Railways (PNR) by nearly double to buy more trains and build elevated tracks.
In a statement, the NEDA said that the Investment Coordination Committee-Cabinet Committee approved a P777.551-billion total project cost for the North-South Commuter Railway (NSCR), a 76.4% mark-up from P440.881 billion previously.
The railway system will combine the NSCR Phase 1 linking Malolos, Bulacan to Tutuban in Manila, the PNR South Commuter Railway from Solis to Calamba, Laguna, and the Malolos-Clark Railway Project. The project entails building a 147-kilometer stretch of an elevated, double-track railway with 36 stations.
These form part of the priority infrastructure projects under the “Build, Build, Build” program of the Duterte administration.
The approval was given during the committee meeting on Tuesday, Nov. 6.
“The increase in project cost is attributed to three factors as determined by the detailed engineering designs,” the NEDA said on Friday.
Among the major changes behind the bigger project price include the construction of elevated viaducts for the trains, veering away from ground-level structures to “improve operational efficiencies” and safety. Existing PNR rail systems are currently built right on the ground.
Other changes include the adoption of standard gauge tracks versus the previous narrow-gauge plan. The higher price tag will likewise cover the purchase of more trains as well as the use of double tracks for the Malolos-Clark line, the NEDA said.
The additional costs will also provide for the resettlement of 12,901 families who will be displaced by the construction of the new train lines.
Still, the new train line will be financed through official development assistance from the Japan International Cooperation Agency (JICA) and the Asian Development Bank.
The railway project is expected to be partly operational by 2022 and will service 340,000 passengers daily. The trains will be fully operational by 2023 and can carry up to 550,000 people daily.
The NSCR system will also be linked to the existing Light Rail Transit lines 1 and 2, the Metro Rail Transit 3, and the planned Metro Manila Subway also funded by JICA.
The government will provide a P5 billion subsidy each year to cover the capital, operating and renewal costs of the project, the NEDA said.
The higher project cost and new railway design will still have to be approved by the NEDA Board, which is chaired by President Rodrigo R. Duterte.

IPPCA opposes increase in diesel biofuel component

THE Independent Philippine Petroleum Companies Association (IPPCA) opposed the plan of the Philippine Coconut Authority (PCA) to increase the biofuel component in diesel to B5 from B2.
“With Euro 4, there is no compelling reason to add or increase the biodiesel blend, given that the current diesel standard is already very clean,” IPPCA said in a statement sent to BusinessWorld.
“At the same time, increasing the blend will have an impact on the price of diesel to go up. Thus, why should motorist made to subsidize another industry?,” according to IPPCA.
Department of Agriculture (DA) Secretary Emmanuel F. Piñol earlier said the PCA board of governors has passed a resolution addressed to President Rodrigo R. Duterte to direct the National Biofuels Board (NBB) to raise the biofuel requirement from B2 to B5 to help the copra industry.
Mr. Piñol said fuel prices will rise by about P0.30 once the shift to B5 from B2 is implemented, while noting this would mean cleaner air and more mileage for vehicles.
Sherwin T. Gatchalian, chair of the Senate committees on energy and economic affairs, also expressed concerns over the proposed measure, saying this will put consumers at a disadvantage given that fuel prices are already rising even without such a shift.
“Based on our in-house computations, diesel pump prices will go up by P2.48/liter,” Mr. Gatchalian said when sought for comment regarding the PCA’s resolution.
“At this present situation of elevated petroleum prices due to external factors, it is not advisable to increase the biodesiel blend to B5 at this time. Magiging triple whammy yan para sa consumers natin: 1. Tax reform 2. Elevated global prices 3. Increase to B5 pa,” Mr. Gatchalian added. — R.J.N. Ignacio

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