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Top eight energy news of 2017

This should have been a “Top 10” list but due to space constraints, I limited it to only eight, divided into four news stories each for global and national.

GLOBAL
1 “Non-news” to many media outlets but good and big news to me: NO major energy catastrophes in 2017. No major oil spill, no gas blowouts, no reactor meltdowns, no major infrastructure destroyed by natural disasters, and energy prices did not rebound to their 2014-2015 levels.

2 In June 2017, the British Petroleum (BP) Statistical Review of World Energy 2017 was released and among the highlights of that report are: (a) China and US remain the planet’s biggest energy consumers, (b) increases in oil, natural gas, nuclear and renewable energies (REs) but decline in coal use, (c) for big Asian economies, coal use remain very high especially in China, India, Japan, South Korea and Indonesia (see chart).

Top eight energy news of 2017

3 In September 2017, the US Energy Information Administration (EIA) released its “International Energy Outlook 2017” and among its projections are (a) In 2040, fossil fuels (oil, natural gas and coal) and nuclear will supply about 83% of global total energy consumption; 8% from hydro and 9% combined from wind, solar, geothermal, other REs, and (b) coal use is projected to be stable until 2040 and declines in China to be offset by increased use in India.

4 In November 2017, the “America First Energy Conference” was organized by the Heartland Institute in Houston Texas to analyze US President Trump’s pronouncement of US global “energy dominance”. “Energy dominance” is defined on two key goals: (a) meet all US domestic demand and (b) export to markets around the world at a level where they can “influence the market.” The important lessons from the papers presented are that (i) the US can have energy dominance in oil, natural gas and coal, but (ii) US cannot and should not aspire to have dominance in nuclear and REs. It was a very educational conference and I was the only Asian in the conference hall.

NATIONAL
5 Hike in excise tax for oil products and coal under TRAIN but zero excise tax for natural gas even if it is also a fossil fuel. Diesel tax will increase from zero in 2017 to P2.50/liter in 2018, P4.50 in 2019, and P6.00 in 2020. Gasoline tax will increase from P4.35/liter in 2017 to P7 in 2018, P9 in 2019, and P10 in 2020. Coal tax will increase from P10/ton in 2017 to P50 in 2018, P100 in 2019, P150 in 2020. There was successful maneuver by some senators, a known economist and some leftist organizations to spare natural gas from higher taxation, benefitting a big energy gas firm.

6 The feed-in-tariff (FiT) or guaranteed high price for 20 years for wind-solar and other renewables keeps rising, from only 4 centavos/kWh in 2015, became 12.40 centavos in 2016, 18 centavos in mid-2017 and petition for 22 centavos by late 2017 not granted. A pending 29 to 32 centavos/kWh by early 2018 is awaiting approval by the Energy Regulatory Commission (ERC).

7 Continued exemptions from VAT of the energy output of intermittent wind-solar and other renewables but stable fossil fuel sources were still slapped with 12% VAT under TRAIN. Government continues its multiple treatment of energy pricing: High favoritism for wind-solar, medium-favoritism for natgas, and zero favor for oil and coal.

8 Supreme Court issuance of TRO in the implementation of Retail Competition and Open Access (RCOA) provision of the Electric Power Industry Reform Act (EPIRA) of 2001. In particular, the SC TRO covered five ERC Resolutions from June 2015 to November 2016, affecting the voluntary participation of contestable customers (CCs) for 750-999 kW and many Retail Electricity Suppliers (RES) with expiring licenses cannot get new ones yet, reducing potential competition. Data from the Philippine Electricity Market Corporation (PEMC) show that as of Nov. 26, 2017, there were 28 RES, 12 local RES, 862 CCs for 1 MW and higher, and only 78 CCs for 750-999 KW. There should be thousands of CCs in the lower threshold, there should be several dozens of RES nationwide to spur tight competition in electricity supply and distribution.

Overall, EPIRA of 2001 was a good law that introduced competition, broke government monopoly in power generation, broke private geographical monopolies in power distribution. The RE law of 2008, SC TRO 2017 and TRAIN 2017 are partly reversing the gains of EPIRA.

 

Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network Asia.

minimalgovernment@gmail.com

‘Alphabet Series’ author Sue Grafton, 77

LOS ANGELES — Sue Grafton, the prolific author of the bestselling “Alphabet Series” mysteries featuring private investigator Kinsey Millhone, has died at the age of 77.

Grafton died on Thursday after a two-year battle with cancer, her daughter Jamie said on the author’s Facebook page.

Grafton was best known for her mystery series with alphabetical titles.

The first book in the series, A is for Alibi came out in 1982 and the latest, Y is for Yesterday, in August of this year.

Her daughter said that would be the last.

“Sue always said that she would continue writing as long as she had the juice,” her daughter wrote on Facebook.

“Many of you also know that she was adamant that her books would never be turned into movies or TV shows, and in that same vein, she would never allow a ghost writer to write in her name,” she said.

“Because of all of those things, and out of the deep abiding love and respect for our dear sweet Sue, as far as we in the family are concerned, the alphabet now ends at Y.”

Kinsey Millhone, the main character in Grafton’s “Alphabet Series,” is a former police officer who left the force and became a private investigator.

The books are set in Santa Teresa, a fictionalized version of Grafton’s southern California hometown of Santa Barbara.

Grafton’s books have been translated into 26 languages, according to her Web site. — AFP

Home prices in 20 US cities increase by most since 2014

WASHINGTON — Housing prices in 20 US cities accelerated more than forecast in October, rising by the most since mid-2014 as lean inventories continued to prop up values amid steady demand, S&P CoreLogic Case-Shiller data showed on Dec. 26.

Among the highlights:

• 20-city property values index increased 6.4% year over year (est. 6.3%), the biggest gain since July 2014;

• national home-price gauge rose 6.2% year over year, the most since June 2014;

• and seasonally adjusted 20-city index advanced 0.7% month over month (est. 0.6%);

A lingering shortage of previously owned homes is keeping housing prices elevated. That has allowed homeowners to recover the equity lost during the housing collapse and recession a decade ago.

Sales, meanwhile, are strengthening as the labor market remains robust and borrowing costs stay close to historically low levels.

For those looking to buy for the first time, conditions are less favorable. Growth in property values is outpacing wage gains and limiting affordability, representing a headwind for the market.

“Home prices continue their climb supported by low inventories and increasing sales,” David Blitzer, chairman of the S&P index committee, said in a statement.

But that climb may be interrupted by the Federal Reserve hiking interest rates next year, he said.

“Since home prices are rising faster than wages, salaries, and inflation, some areas could see potential homebuyers compelled to look at renting.”

Other details of the data show that:

• all 20 cities in the index showed year-over-year gains, led by a 12.7% increase in Seattle and a 10.2% advance in Las Vegas

• After seasonal adjustment, Las Vegas had the biggest month-over-month rise at 1.4%, followed by San Francisco with a 1.2% increase;

• and home prices rose 0.1% in Miami from the prior month, marking the smallest advance of all cities. — Bloomberg

41,164 business permits up for renewal

THE Business Bureau urges business owners to avoid the rush and penalties by renewing their business permits within the renewal period beginning today until Jan. 20. “We have released a total of 41,164 business permits this year so that is also more or less the same number of business permits we expect to renew in 2018,” lawyer and Business Bureau chief Marissa M. Torentera said in an interview. Applications will be accepted on Jan. 3-5 from 8 a.m. to 7:30 p.m., and on Jan. 8-12 and Jan. 15-19, from 8 a.m. to 9 p.m. Applications submitted on Saturdays and Sundays during these periods will be accepted between 8 a.m. and 5 p.m. But the last day of renewal on Jan. 20 will be until midnight. Representatives of business owners should present a Special Power of Attorney (SPA) while corporate secretaries are required to present certificates plus IDs of their principals and a certified list of their employees. From today until Jan. 20, applicants will also be required to submit barangay clearance, latest cedula for 2018, a valid fire inspection certificate and other documents that depend on the nature of the business. — Carmencita A. Carillo

Veteran male rock ’n’ roll acts had biggest 2017 world tours

LOS ANGELES — Veteran, white male rock stars raked in the most cash from world tours in 2017, according to an annual list released on Thursday, while the highest-ranked women — Celine Dion and Lady Gaga — failed to make the top 10.

Irish band U2 grossed a leading $316 million from its 30th anniversary, 50-date Joshua Tree tour. It was followed by hard rock band Guns N’ Roses which took in $292.5 million, according to trade publication Pollstar’s ranking of the Top 20 worldwide tours of 2017.

British band Coldplay came in third, with $238 million, on a list where Bruno Mars, 32, of Puerto Rican and Philippine descent, was the only musician of color in the top ten. Mars grossed $200 million. Ed Sheeran, 26, was the youngest singer in the top ten, pulling in $124.1 million.

At a whopping $1,500 average, Bruce Springsteen’s limited Broadway run had the highest ticket prices and grossed $87.8 million to give the “Born to Run” singer 14th place.

In 11th place, Dion was the top female act with $101.2 million, while Lady Gaga’s Joanne tour grossed $85.7 million for 15th place.

The touring numbers mark a strong contrast with US music sales and streaming preferences, where hip hop and R&B music this year became the most consumed music genre, according to a July Nielsen Music report.

The top 20 tours grossed $2.66 billion in 2017, a record high and an increase of more than $264 million from 2016, Pollstar said.

Pollstar’s ranking is based on ticket sales data and does not include revenue from merchandise which can add a sizable chunk to tour earnings. — Reuters

Anand is Rapid King

World Rapid Chess Championship
Riyadh, Kingdom of Saudi Arabia
Dec. 25-30, 2017

Final Top Standings

1-3 Viswanathan Anand IND 2758, Vladimir Fedoseev RUS 2771, Ian Nepomniachtchi RUS 2780, 10.5/15

4-9 Bu Xiangzhi CHN 2654, Magnus Carlsen NOR 2908, Alexander Grischuk RUS 2813, Boris Savchenko RUS 2685, Rauf Mamedov AZE 2695, Gadir Guseinov AZE 2714, 10.0/15

10-18 Peter Svidler RUS 2743, Wang Hao CHN 2770, Yu Yangyi CHN 2752, Vladimir Onischuk UKR 2748, Vladislav Artemiev RUS 2687, Ding Liren CHN 2734, Penteala Harikrishna IND 2687, Sergey Grigoriants RUS 2572, Zhao Jun CHN 2600, 9.5/15

Total of 134 participants

Time Control: 15 minutes play-to-finish with 10 seconds added after every move starting move 1.

Viswanathan Anand defeated Russia’s Vladimir Fedoseev 1.5-0.5 in the blitz playoffs to win the title of World Rapid Chess Champion. This victory should be particularly sweet for the “Tiger from Madras” — I wonder how many people recall that this title was first introduced in 2003 Cap d’Agde, France, and that the very first “Rapid Champion” was Vishy Anand! In recent years though his speed chess powers have allegedly declined and his name is nowhere in evidence among the last 5 winners.

2012 Sergey Karjakin

2013 Shakhriyar Mamedyarov

2014 Magnus Carlsen

2015 Magnus Carlsen

2016 Vassily Ivanchuk

Also, Anand has not had a lot of successes lately — in the St. Louis Rapid tournament last August he finished next to last. In the following event, the Tbilisi FIDE World Cup, a knockout event, he was famously eliminated by an unknown, GM Anton Kovalyov (formerly Latvia now representing Canada) in the second round. Our BW readers might recall that in the very next round Kovalyov took himself out of the tournament when the organizers found the shorts that he was wearing to be unacceptable attire — they asked Kovalyov to put on a pair of paints and he responded by walking out. Anand must have viewed this turn of events with mixed feelings — apparently Kovalyov had been wearing the same pair of shorts for the entire event and if the organizers had noticed earlier then there would not have been an Anand-Kovalyov match.

Anyway, in the last leg of the Grand Chess Tour, the London Chess Classic, Anand finished last — he was winless with six draws and three losses, including a last-round loss on his birthday, Dec. 11, to Wesley So.

Here in Riyadh Anand showed no signs of poor form. This can be a real killer in rapid chess — in a normal classical tournament there is only one game a day so poor form can cost you a game and then you can go to bed early that night and perhaps draw one or two games in the succeeding days to try to get your rhythm back. In a rapid tournament you can have a moment of weakness and lose five games in a single afternoon, completely knocking you out of medal contention.

At the beginning it was Fedoseev who jumped to the lead with an unbelievable 6.5/7 (performance rating of 3018!) which included wins against Zoltan Almasi, Vidit, Boris Savchenko and Tigran Petrosian. Then came a fighting draw against Grischuk (always a difficult opponent in any time control) and two wins against Baadur Jobava (who until then had 4.5/5 — he could not recover after this loss) and Yury Kuzubov.

Fedoseev’s games usually follow the same path — he would advance all over the board, never retreat, followed by a big tactical confrontation and then he wins, usually because he sees much further than his opponent. See how he brought down the red-hot Georgian no. 1.

Fedoseev, Vladimir (2718) — Jobava, Baadur (2690) [D11]
WCh Rapid 2017 Riyadh (6.2), 27.12.2017

1.d4 d5 2.c4 c6 3.Nf3 Nf6 4.Qc2 Na6

You never know what Jobava is going to throw at you in the opening.

5.e3 Nc7 6.b3 Bg4 7.Ne5 e6 8.Nxg4 Nxg4 9.h3 Nf6 10.Bd3 g6 11.0–0 Bg7 12.Ba3 Bf8 13.Bb2 Bg7 14.Nd2 0–0 15.b4 Nd7 16.f4 a5 17.bxa5 Rxa5 18.c5 Ra7 19.a4 Qe7 20.a5 Rfa8 21.Nb3 f5 22.g4 Nf6 23.g5 Ne4 24.h4 Kf7

White has only two possible pawn breaks, on a6 or h5. Fedoseev chooses h5.

25.Rf3 h6 26.Kg2 Rh8 27.Rh1 hxg5 28.hxg5 Rxh1 29.Kxh1 Ra8 30.Rh3 Na6 31.Bc3 Nc7 32.Be1 Qd7 33.Qh2 Kg8 34.Nc1 e5!

An excellent move, clearing the e6 square for his knight.

35.dxe5 Ne6 36.Bb4 N4xc5 37.Qc2 Ne4 38.Kg2 c5 39.Be1 Qc6 40.Bxe4 fxe4 41.Ne2 Rd8 42.Ng3 Qb5 43.Rh1 Qd3 44.Qxd3 exd3 45.Kf3 Rf8 46.Kg4 d4?!

This is where Jobava starts going wrong. 46…c4 was better intending Ne6–c5–e4.

47.Bd2 c4 48.exd4 Nxd4 49.Ne4

Black’s central passed pawns have been neutralized. The initiative goes back to White.

49…Nb3 50.Bc3 Rd8 51.f5 gxf5+ 52.Kxf5 Nd4+ 53.Kg6 Nc6 54.Nf6+ Kf8 55.e6 Ne7+?

Better was 55…d2! 56.Rd1 Rd3 and it is still a game. The problem with 55…Ne7+ is that it forces White’s King to go to h7, which was where it wanted to be in the first place, for now white threatens Nd7+

56.Kh7 Bxf6 57.gxf6 d2 58.Bb4 d1Q 59.Rxd1 Rxd1 60.Bxe7+ Ke8 61.Bc5 Rf1 62.Kg7 1–0

Anand was only a point behind though, himself being undefeated with victories over Varuzhan Akobian, Peter Leko, Anton Demchenko and Luke McShane to go with three draws. The former world champion’s games were also impressively aggressive and to the point.

Anand, Viswanathan (2782) — Demchenko, Anton (2660) [B69]
WCh Rapid 2017 Riyadh (4.5), 26.12.2017

1.e4 c5 2.Nf3 d6 3.d4 cxd4 4.Nxd4 Nf6 5.Nc3 Nc6 6.Bg5 e6 7.Qd2 a6 8.0–0–0 Bd7 9.f4 Be7 10.Nf3 b5 11.Bxf6

Got to be careful about move orders here, for example you have to exchange first on f6 before playing Kb1, the reason being that 11.Kb1 b4! 12.Bxf6 Bxf6 13.Ne2 Be7 Black has a much-improved version of this opening because his kingside pawn formation is still solid.

11…gxf6 12.Kb1 b4 13.Ne2 h5 14.f5 e5 15.Rg1 Qb6 16.g4 Qf2 17.Qd3 hxg4 18.Rxg4 Nd8 19.Rg2 Qc5 20.Ng3 a5 21.Nd2 Nb7 22.Qf3 a4 23.Bc4 Rc8 24.Rc1 Bf8 25.Nh5 Ke7 26.Qg4 Bh6? <D>

POSITION AFTER 26…BH6

27.Nxf6! Bxd2

[27…Kxf6 28.Qh4+ Bg5 29.Qxg5#]

28.Nd5+ Ke8 29.Qg8+ 1–0

After a series of four draws Fedoseev lost to world champion Magnus Carlsen in the 12th round to allow Magnus to take the lead at 9/12 with himself, Anand, Svidler and Wang Hao half a point behind. Anand and Fedoseev both scored 2/3 in the closing rounds to finish tied for 1st. Magnus Carlsen lost in the last round to Alexander Grischuk and found himself out of the top 3.

At the end Anand, Fedoseev and Nepomniachtchi tied for first. Based on the rules the two higher tie breaks, Anand and Fedoseev played two blitz tie breaks to determine who gets the title of World Rapid Champion. The 1st-3rd place cash prizes were split among the three, so they each received $150,000.

Grischuk had a lot to do with the final medal standings in the final three rounds — he lost to Anand and beat Carlsen. Anand vs Grischuk was a clinic. Take a look.

Anand, Viswanathan (2782) — Grischuk, Alexander (2772) [C65]
WCh Rapid 2017 Riyadh (14.2), 28.12.2017

1.e4 e5 2.Nf3 Nc6 3.Bb5 Nf6 4.d3 Bc5 5.Nbd2 d6 6.c3 0–0 7.0–0 a6 8.Bxc6 bxc6 9.d4 exd4 10.cxd4 Bb6 11.Qc2 c5 12.d5 Re8 13.b3 Bg4 14.Bb2 Bh5 15.Rae1 Bg6 16.Bxf6!

Counter-intuitive, why would White want to give up his powerful bishop on the long diagonal? We discover the answer soon enough — Black’s knight, bishop and rook are putting pressure on e4 so the white knight on d2 has to stay where it is. With the knight on f6 eliminated it can now go to c4 to lock out the black bishop on b6 from the game.

16…Qxf6 17.Nc4

We all know from our beginners’ books that in closed positions the knights are more effective than bishops. Anand is going to show us how to do it.

17…Ba7 18.Qd3 h6 19.Re3 Rad8 20.g3 Bh7 21.Rfe1 g5 22.Qe2 Kg7 23.Rd1 Qg6 24.Re1 Qf6

Anand is trying to figure out the best time for the e4–e5 break.

25.Kg2 g4 26.Nh4 Qg5 27.f4 gxf3+ 28.Qxf3 Qf6 29.Qe2 Qg5 30.Rf1 Kg8 31.Nf5

The threat now is 32.h4 Qg6 33.e5! and the Black position collapses.

31…Rxe4

Trying to muddy the waters. Grischuk is notoriously difficult to defeat even in losing positions because he always comes up with tactical resources that, if you are not careful, will turn the tables. Anand is up to the task.

32.Nxh6+

Amazingly enough, 32.h4! can still be played, but there is no need for that as this simple move keeps the win in hand.

32…Qxh6 33.Rxe4 Bxe4+ 34.Qxe4 Kf8 35.Re1 Qf6 36.Re2 Bb6 37.h4 Kg7 38.Rf2 Qg6 39.Rf5 Kf8 40.h5 Qh7 41.g4 Re8 42.Qf3 Kg8 43.Kh3 Re1 44.Qf4 Kf8 45.Qg5

There is an even quicker win with 45.Nxb6 cxb6 46.Qxd6+ Ke8 (46…Kg7 47.Rg5+; 46…Kg8 47.Qd8+ Kg7 48.Rg5+) 47.Qb8+ Kd7 48.Qb7+ Kd6 49.Qc6+ Ke7 50.d6+. But that’s the big difference between games played at quicker time controls against classical games. The usual rule is that when you see a good move sit on your hands first and look around for there may be a better one. In fast time controls when you see a win you go straight for it or you might find yourself down on time.

45…Qh8 46.Rf3 Qg7 47.Qxg7+ Kxg7 48.g5 Rd1 49.Ne3 Rh1+ 50.Kg4 c4 51.Nf5+ Kf8 52.bxc4 Rg1+ 53.Rg3 Rc1 54.g6 fxg6 55.hxg6 Rxc4+ 56.Kh5 Bd4 57.Rg4 1–0

Theoreticians have to review the opening moves very carefully — where did Black go wrong?

We will continue our coverage on Thursday.

 

Bobby Ang is a founding member of the National Chess Federation of the Philippines (NCFP) and its first Executive Director. A Certified Public Accountant (CPA), he taught accounting in the University of Santo Tomas (UST) for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.

bobby@cpamd.net

N. Korea’s Kim says ‘open to dialogue’ with South

SEOUL — Kim Jong-Un on Monday warned the United States that he has a “nuclear button” on his desk ready for use if North Korea is threatened, but offered an olive branch to South Korea, saying he was “open to dialogue” with Seoul.

After a year dominated by fiery rhetoric and escalating tensions over North Korea’s nuclear weapons program, Mr. Kim used his televised New Year’s Day speech to call for lower military tensions on the Korean peninsula and improved ties with the South.

“When it comes to North-South relations, we should lower the military tensions on the Korean Peninsula to create a peaceful environment,” Mr. Kim said.

“Both the North and the South should make efforts.”

Mr. Kim said he will consider sending a delegation to the Winter Olympics Games to be held in Pyeongchang, South Korea, in February.

“North Korea’s participation in the Winter Games will be a good opportunity to show unity of the people and we wish the Games will be a success. Officials from the two Koreas may urgently meet to discuss the possibility,” Mr. Kim said.

South Korean President Moon Jae-in has said North Korea’s participation will ensure safety of the Pyeongchang Olympics and proposed last month that Seoul and Washington postpone large military drills that the North denounces as a rehearsal for war until after the Games.

Rather than encouraging US measures that “threaten the security and peace of the Korean peninsula,” Seoul should instead respond to overtures from the North, Mr. Kim said.

‘REALITY, NOT A THREAT’
A spokesperson for Mr. Moon’s office said they were still reviewing Mr. Kim’s New Year’s Day speech.

Asked by reporters to comment on Mr. Kim’s speech, US President Donald Trump simply said “we’ll see, we’ll see,” as he walked into New Year’s eve celebration at Mar-a-Lago, his elite resort in Florida.

The US State Department did not immediately respond to a request for comment on Mr. Kim’s New Year’s address.

North Korea tested intercontinental ballistic missiles and conducted its sixth and most powerful nuclear test in September last year in defiance of international warnings and sanctions, raising concerns about a new conflict on the Korean peninsula.

After testing what Pyongyang said was its most powerful intercontinental ballistic missile (ICBM), capable of delivering a warhead to anywhere in the continental United States, at the end of November, Mr. Kim declared his nuclear force complete.

He continued that theme in his New Year’s address, announcing that North Korea would focus on “mass producing nuclear warheads and ballistic missiles for operational deployment” in the coming year.

This, Mr. Kim said, made it impossible for the United States to start a war against North Korea.

“The entire United States is within range of our nuclear weapons, and a nuclear button is always on my desk. This is reality, not a threat,” he said, while emphasizing that “these weapons will be used only if our security is threatened.”

ECONOMIC GAINS
Mr. Kim’s customary New Year’s speech is closely watched for indications of the policy direction the unpredictable and reclusive leader is likely to pursue in the coming year.

Beyond listing military accomplishments, Mr. Kim also outlined economic gains as part of his two-pronged policy of developing his country’s economy and military.

Despite increased international sanctions imposed over the weapons program, North Korea made progress in areas like fabrics, shoes and tractors, Mr. Kim said.

While Mr. Kim is keen to declare his weapons program a success, he is unlikely to completely end his contentious testing regime, said Scott LaFoy, a ballistic missile analyst at the website NK Pro, which monitors North Korea.

“I’m still very skeptical of the ‘complete’ thing they’ve been talking about, if only because we’ve seen so much activity in regards to the submarine launched ballistic missile program,” he said.

“I think a slowdown (in testing) is very realistic, though.”

Mr. Kim seems likely to tone down his weapons testing at least ahead of the Olympics, said Nam Sung-wook, a North Korea expert at Korea University in Seoul.

“What North Korea is most afraid of is being forgotten in the international arena,” he said.

“Without launching missiles and conducting a nuclear test, North Korea will be in the spotlight just by attending the Winter Olympics.” — Reuters

DBP expanding retail business in bid to reach out to unbanked

THE Development Bank of the Philippines (DBP) will expand its retail banking business as the lender intends to introduce more unbanked Filipinos to the financial system.

DBP President and Chief Executive Officer Cecilia C. Borromeo said the state-owned bank will focus on small depositors living in rural areas as they try to lure more people into the formal banking system.

“We’re looking at one million new depositors in the next five years translated to six new depositors per branch per day,” Ms. Borromeo was quoted as saying in a statement sent to reporters on Friday.

In an earlier with BusinessWorld, Ms. Borromeo said 70 million of the country’s population still do not have any access to formal banking products and services. “As a development financial institution, if we could get one million new depositors, who have never had any experience dealing with a bank, that would be a feat.”

She noted that the lender’s aggressive plan to reach the unbanked, as well as an expected growth in corporate and government deposits, will help the bank’s retail sector to expand and make up 30% of the bank’s business from the current 25%.

“I think the retail segment would be at 25% and we want to grow that. I would be very happy to reach 30%,” Ms. Borromeo said, adding that the share of its retail segment is not as significant compared with the other banks due to its limited number of branches.

For this year, the lender is eyeing to open six more branches to penetrate underbanked areas, which will be added to its current roster of 125 branches.

“In 2018, we will not be as aggressive as like having 15 to 20 more branches in 2018, but we have identified areas where we should establish a branch,” Ms. Borromeo said, adding that DBP opened 12 new branches last year.

“[I]t’s a good mix of commercially viable areas and underserved towns to support the national agenda of financial inclusivity. We take that to heart — we’re willing to invest in areas where other banks are shy to invest [in].”

Aside from opening new branches, Ms. Borromeo said DBP will enhance its Internet and mobile banking systems and harness agent banking.

Agent banking entails a network of individuals equipped with technology to perform basic banking services such as opening accounts, applying for a loan and checking for balance, among others. The agents will be deployed to areas where banks are absent.

Meanwhile, Ms. Borromeo added that DBP will establish new lending centers in 22 provinces, which will cater solely to small and medium enterprises. “The heads of the lending centers will have [the power] to approve at a certain level the loans so that the processing time will be reduced,” she said. — Karl Angelo N. Vidal

Year of the Earth Dog

Happy New Year! It only seemed like yesterday when we were greeting 2017. Where did time go? Why does it feel like we’re on a hypersonic jet plane blown throughout by a tailwind hurtling toward the unknown?

2017 was a year of turmoil on the planet. Terrorism and syndicated crimes like plunder, drugs and smuggling of all kinds brought widespread grief, death and destruction. We were not spared. Marawi went the way of Mosul, Aleppo, and Raqqa where the Daesh ran amuck in Iraq and Syria. But it also revealed the heroism of our soldiers and citizens who came together to liberate a city, save lives, and lift our shattered spirit.

The NPA rampaged in all three island groups prompting the cancellation of peace talks and its being labeled a terror group. They ambushed, raided, extorted, assassinated and burned brutally and carelessly, not unlike rogue uniformed personnel who did the same for money, protected by criminal organizations operating within and outside the government. Drug syndicates continued to pose a clear and present danger to the nation’s safety and security.

Two regional superpowers — Iran and Saudi Arabia — are going head-to-head across the Middle East. e.g, Yemen, Iraq, Syria and Lebanon. Two other regional superpowers — Russia and China — oppose their containment by the US prompted by their expansionist thrusts in the Ukraine and in the Indo-Pacific theater. Iran and North Korea are their surrogate states with nuclear capabilities. It appears headed for a hot conflict that could go nuclear. Bad for our OFWs, economy, and national security.

Natural calamities — fire, rain, wind, slides, quakes — were unusually vicious. Global warming and climate change, aggravated by human irresponsibility, spawned widespread death and destruction as well. Politics, governance and social behavior in the West, as here, continue to slide down a slippery slope. Global poverty and deprivation is at an all-time high, as countries spend and invest on wrong priorities. Social conflicts are anticipated to rise and spread.

Over here, was there a let-up in wrongdoing in response to presidential calls for restraint and reform? Was there sufficient punitive action to demonstrate political will? Is the government aligned on national security? There are silver linings though. The economy’s doing great; the stock market’s at a new high; and misdeeds are being dealt with lifting hopes for justice at last. But will there be closure? No closure, no peace.

All those seem to be setting the stage for 2018. What does the Year of the Earth Dog have in store for us Filipinos here and around the world? Are we being primed for something better or for worse this year? My instincts tell me things will worsen before life gets better. It’s time to pray, play safe and prepare for the worst while working for better outcomes. It brings to mind Ecclesiastes 3:1-22.

“There is a time for everything, and a season for every activity under the heavens:

A time to be born and a time to die, a time to plant and a time to uproot, a time to kill and a time to heal, a time to tear down and a time to build, a time to weep and a time to laugh, a time to mourn and a time to dance, a time to scatter stones and a time to gather them, a time to embrace and a time to refrain from embracing, a time to search and a time to give up, a time to keep and a time to throw away, a time to tear and a time to mend, a time to be silent and a time to speak, a time to love and a time to hate, a time for war and a time for peace.

What do workers gain from their toil? I have seen the burden God has laid on the human race. He has made everything beautiful in its time. He has also set eternity in the human heart; yet no one can fathom what God has done from beginning to end.

I know that there is nothing better for people than to be happy and to do good while they live. That each of them may eat and drink, and find satisfaction in all their toil — this is the gift of God.

I know that everything God does will endure forever; nothing can be added to it and nothing taken from it. God does it so that people will fear him. Whatever is has already been, and what will be has been before; and God will call the past to account. And I saw something else under the sun: In the place of judgment — wickedness was there. in the place of justice — wickedness was there.

I said to myself, ‘God will bring into judgment both the righteous and the wicked, for there will be a time for every activity, a time to judge every deed.’

I also said to myself, ‘As for humans, God tests them so that they may see that they are like the animals.’ Surely the fate of human beings is like that of the animals; the same fate awaits them both: As one dies, so dies the other. All have the same breath; humans have no advantage over animals. Everything is meaningless. All go to the same place; all come from dust, and to dust all return.

Who knows if the human spirit rises upward and if the spirit of the animal goes down into the earth? So I saw that there is nothing better for a person than to enjoy their work, because that is their lot. For who can bring them to see what will happen after them?”

In 2018, I wish that we: rise above adversity to live, laugh and love every day as if it was our last; look out for each other in facing risks, emergencies and crises; we become better Filipinos for a better Philippines; love Mother Earth because she’s our only home. May God’s peace and mercy be upon us all.

 

Rafael M. Alunan III is an Eminent Fellow of the Development Academy of the Philippines; Chairman, Harvard Kennedy School Alumni Association of the Philippines; and chairs the Committee on National Security of the Philippine Council for Foreign Relations.

rmalunan@gmail.com

Shares rise to new high in shortened trading week

SHARES jumped despite having only three trading days last week, allowing the main index to climb further and close the year at its 14th all-time high, as investors continued to express confidence in the government’s tax reform and infrastructure programs.

The bellwether index climbed for the fifth straight day last Friday, gaining 0.27% or 23.33 points to 8,558.42. The market was also able to record a new intraday high of 8,640.04. On a yearly basis, the market jumped 25.1%.

Week on week, the Philippine Stock Exchange index (PSEi) rose 1.5%, with a value turnover of P17.26 billion.

“Philippine equities ended 2017 on a cheerful beat, as investors turned to prospects for the upcoming year following the passage of the tax reform program and encouraging leads overseas,” online brokerage firm 2TradeAsia.com said in a weekly market note.

Sectors that pushed the market up were financials, up 3.3% week on week; property which gained 1.9%; and mining and oil which saw a 1% uptick.

Foreigners turned buyers for the week, with net inflows ballooning to P1.13 billion against the P290-million average the week prior.

“We end the month of December up 3.7% while we end the year up 25.11%. Institutions traded bank stocks the most [last] week with BDO [Unibank, Inc.] up 6.8%, MBT (Metropolitan Bank & Trust Co.) up 3.5% and BPI (Bank of the Philippine Islands) up 2%. On the other hand, retail investors were very active in 2nd tier real-estate companies like IDC (Italpinas Development Corp.) up 31.1% and HOUSE (8990 Holdings, Inc.) up 5.5%,” Eagle Equities, Inc. Head of Research Christopher Mangun said in a weekly market note.

On the other hand, there were no fireworks on Wall Street for the last trading day of the year, as US stocks closed out their best year since 2013 on a down note, with losses in technology and financial stocks keeping equities in negative territory for the session.

Major indexes hit a series of record highs in 2017, lifted by a combination of strong economic growth, solid corporate earnings, low interest rates and hopes for a tax cut from US President Donald J. Trump’s administration.

The Dow Jones Industrial Average fell 118.29 points or 0.48% on Friday to close at 24,719.22; the S&P 500 lost 13.93 points or 0.52% to 2,673.61; and the Nasdaq Composite dropped 46.77 points or 0.67% to 6,903.39.

The local market is closed until today, Jan. 2, as per Malacañang’s order to suspend government work and offices on the day following New Year’s Day.

When the market resumes trading on Jan. 3, all transactions will be charged a stock transaction tax of 0.60% of the gross selling price or gross value in money of the shares of stock sold, bartered, exchanged, or otherwise disposed. This increase, as stipulated under the newly implemented tax reform program, is set to yield an additional P1.7 billion in revenues annually. — Arra B. Francia with Reuters

Add ‘Learn to shuck oysters’ to your resolutions

By Justin Fox, Bloomberg View

EARLY one sunny Saturday morning this past November, I visited the waterfront farmers market outside San Francisco’s Ferry Building. Fall vegetables and big piles of persimmons were the main things on offer, but there was also the stand where Hog Island Oyster Co., the regional mollusk juggernaut, sells oysters by the dozen. They used to also shuck oysters for people to eat right there but apparently decided that wasn’t worth the hassle. On the day I visited, there was still a table with oyster knives and gloves, though, so the guy manning the stand and I figured out a combination of six oysters that added up to an even dollar amount, he threw in a seventh, and I started shucking.

As I blissfully shucked and slurped my second breakfast of the day, I reflected that extracting oysters from their shells is by far the most important new skill I have acquired in the past 15 years. This hasn’t exactly opened grand new horizons for me, but it did change my life a little bit for the better that morning. As it did a few days later on Thanksgiving, when I shucked and grilled oysters on the roof of a friend’s apartment building, and then on Christmas Eve, when fresh-shucked oysters have become a family staple over the past decade.

Now we are approaching the new year — on the eve of which I will again shuck a few oysters — and people are making all sorts of resolutions aiming at changing their lives for the better. Most will fail, mainly because they’re too ambitious, too vague or both. Specific and achievable are good, then. What can be more specific and achievable than learning to shuck oysters? So that’s my New Year’s resolution suggestion for you: Learn how to shuck.

You have to actually like eating oysters for this to make sense, and to live in a place where good oysters are readily available. But with the rise of oyster farming in recent decades, led by Hog Island on the West Coast and Island Creek Oysters on the East, there’s really no place in the US where you can’t at least get excellent oysters shipped to you. Oysters are also a wonderfully sustainable foodstuff; they clean the waters in which they are grown. Some argue that, because of their lack of a central nervous system, they’re effectively plants, and thus downright vegan. They’re still not kosher, although apparently consuming ground-up oyster shell as a calcium supplement is.

As for the shucking, it’s frustrating at the very beginning, but it really doesn’t take long to get the hang of it. After seeing oysters for sale one day at my local farmers market, I bought an oyster knife in the kitchenware section at Zabar’s, watched a few videos, hacked up a few oysters and was off. This video tutorial from Rich Vellante of Boston-based Legal Sea Foods seems familiar, although I thought I had started shucking before 2008, when it came out. In any case, it’s an excellent, no-nonsense introduction:

YouTube: How to shuck an oyster

There’s another method, called the “Chesapeake stab,” that seems imprudent for a beginner or even an intermediate. For the equipment, I’ve found that the no-frills stuff you see people using in restaurants and seafood shacks is better for the job than what’s on offer from name-brand kitchenware manufacturers such as Oxo or Zyliss. I use a three-inch bent-tip “New Haven style” oyster knife from Morty the Knife Man that I bought at a seafood market in Massachusetts. It currently has a manufacturer’s suggested retail price of $8.95. (Whatever you do, don’t buy a combination clam/oyster knife. These are abominations, not great with oysters and almost entirely useless at opening clams.) I also have a metal mesh glove that I got for Christmas for a few years ago, but when it comes time to replace it, I’ll probably get one of the rubber ones. Beyond that, all you really need is a dish towel to rest the oyster on while you shuck it, although some people prefer an oyster clamp.

If the oysters you’re trying to shuck keep falling apart, it’s probably the oysters’ problem, not yours. Also, some varieties of oysters are just much easier to open than others. So it’s worth experimenting to see what works best. For me right now that’s oysters from Duxbury, Massachusetts, sold by New York online grocer Fresh Direct.

If you want to try shucking clams, too, you’ll need another knife for that (this one looks good). You’ll also need to watch lots and lots of videos; it takes a while to figure out the secret.

Seriously, though, this seems like the perfect New Year’s resolution. A real skill that 1.) will make life a little bit better and 2.) can actually be learned in a few hours at most. Now I just need to find something else like that. Tying knots, maybe?

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of The Myth of the Rational Market. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

LPA off Caraga

A LOW pressure area (LPA) was spotted early on Monday around 300 km east of Surigao City. “This weather system will bring cloudy skies with moderate to heavy rains and thunderstorms over the Bicol Region, Visayas, and Mindanao, particularly in the regions of Eastern Visayas, Caraga, and Davao,” read a subsequent advisory on Monday morning. The advisory also said a possible tropical depression is expected before landfall over the Caraga Region on Monday night at the earliest or by this morning.

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