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P44-M budget set for 2018 Kadayawan Festival

THIS YEAR’S Kadayawan Festival will have a budget of P44 million, P12 million of which will come from the city government and the rest will be raised by the private sector from sponsorships, according to City Tourism Operations Office Chief Regina Rosa D. Tecson. “The city government will shoulder P12 million for the prizes and the food of the security personnel while the private sector will be the one to raise the remaining amount,” she said in a statement. Ms. Tecson also said they are eyeing 200,000 local and foreign visitors during the almost month-long festivity, higher than last year’s 185,000. Festival Director Renato Gatchalian, Jr. said during the Kadayawan launch last Monday that among those expected to come are 35 tourists from Hong Kong, who will join the “experiential rides” during the float parade. Mr. Gatchalian said they aim to make the 33rd Kadayawan “more engaging” for tourists. “Around 35 visitors from Hong Kong have confirmed their booking for the Kadayawan experiential rides,” he said. The main events are scheduled on Aug. 10-19. The new events that will be introduced this year are the Kadayawan Ball, a fashion competition featuring the culture of the city’s 11 indigenous peoples, and Kosplay Kadayawan, inspired by the popular costume play but focusing on outfits highlighting the Philippine Eagle. — Carmencita A. Carillo

DoE preparing LNG plan B if no private investors emerge

By Victor V. Saulon
Sub-Editor
THE Energy department said it needs to boost its capability to undertake on its own the proposed integrated liquefied natural gas (LNG) import terminal as an energy crisis might ensue if no private investor comes forward to handle the billion-dollar project.
“We need to find a way to do it. If no third-party private investor wants to come in, then you have a looming energy crisis within the next two to three years,” Leonido J. Pulido III, assistant secretary at the Department of Energy (DoE), told reporters in a chance interview during the 6th Philippine Electric Vehicle Summit at the SMX Convention Center, Mall of Asia Complex, in Pasay City.
He said the LNG project is not the only initiative at stake but the supply of energy to the power plants that require the fossil fuel. At present, the country’s natural gas supply comes from the Malampaya gas field off the coast of Palawan province.
Five gas-fired power plants in Batangas province, with a combined capacity of 3,211 megawatts (MW), are the main customers of the fuel source, which is expected to be depleted by 2022 to 2024. That capacity is close a third of Luzon’s peak power demand.
“Remember, it’s 3,200 MW for LNG and you have to take into consideration the price of fuel will most likely increase within the next two to three years because of IMO 2020,” he said. IMO 2020 is an initiative to switch ships over to cleaner fuels, putting pressure on LNG supply.
The International Maritime Organization (IMO) issued a directive setting a global limit for sulfur in fuel oil used on board ships of 0.50% mass by mass from Jan. 1, 2020. IMO is a specialized agency of the United Nations that regulates shipping.
In its website, the IMO said the move “will significantly reduce the amount of sulfur oxide emanating from ships and should have major health and environmental benefits for the world, particularly for populations living close to ports and coasts.”
Mr. Pulido said the shift will have significant effects on the demand and supply of gas oil.
“Most ships right now are using fuel oil — what we call RFO (residual fuel oil) bunker oil, which is the poorer quality, dirtier oil. And if most of these countries will comply, and it would seem that they would, then if you shift from fuel oil to gas oil, the demand and supply dynamics in the world for diesel is going to affect everybody,” he said.
He said the shift would also affect the cost of commodities, especially those being shipped, as traders bearing the impact of rising operating and capital expenses have to recover by jacking up prices.
“A lot of countries are bracing for the potential impact of IMO 2020,” he said.
Mr. Pulido said although 13 or 14 private companies have come forward to express their interest in the project, none has so far submitted a formal proposal.
“I think we’re going to be needing a law where the government can come in and be proactive because we have no guarantees that the private sector would be willing to make a risk for us,” he said.
“We cannot force them to invest,” he added.
Mr. Pulido said he had sought a meeting with Senator Sherwin T. Gatchalian, the Senate energy committee chairman, on certain revisions he would want to propose on the pending legislation covering natural gas.
“Any law being considered by the Senate should have a provision for the government being able to step in,” he said, although he added that he is “very confident” that one or two companies will formally apply to undertake the project.
He placed the cost of the project at roughly $1.5 billion. He said if not an LNG project, the government should have options in place to address the energy supply for the gas-fired power plants such as a floating storage regasification unit or a short-term supply contract with a neighboring LNG importer.
“It’s faster and cheaper to have any of these options than to build new power plants to capture, or to shoulder the loss of the 3,200 MW that are dependent on Malampaya’s LNG,” he said.

Nation at a Glance — (07/12/18)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

DA reviewing royalty process for sugar imports

THE Department of Agriculture (DA) said it will review the royalty system for sugar imports to ensure farmers receive their share.
Agriculture Secretary Emmanuel F. Piñol told reporters on Tuesday that some changes may be in the works to ensure that sugarcane farmers benefit from the importation process, as per cabinet discussions on Monday.
“SRA (Sugar Regulatory Administration) said that whatever is earned is divided among the farmers. However, who would know whether the declared royalty is really the royalty farmers receive?” he added.
Mr. Piñol said that the previous system involves the SRA allocating imported sugar for farmers and planters associations to sell to processors and bottlers.
“I made this clear during my meeting with the stakeholders: How sure are we that the royalty given to the farmers and planters associations really trickles down to the sugarcane farmers?” he said.
“By giving the allocation to planters and farmers’ associations who sell these to traders and processors would mean a markup on the price of imported sugar which defeats the purpose of why we should import sugar, which is to bring down the cost.”
Mr. Piñol also clarified that there is still enough sugar in the market and blamed speculators for rising prices despite a glut in world supply.
The SRA estimates that the prevailing retail price for raw sugar as of July 7 was P50 per kilo, with washed and refined sugar at P52 per kilo and 65 per kilo, respectively.
This is higher than the previous months’ record where the prevailing retail prices for raw, washed and refined sugar were at P48 per kilo, P50 per kilo, and P60 per kilo, respectively.
Prevailing retail prices from a comparative period last year also posted slightly lower or maintained the same prices with raw and washed sugar being only sold at P45 per kilo and P48 per kilo, respectively. Refined sugar was priced at P53 per kilo.
However, Mr. Piñol said that the only sector facing a supply issue is the bottling industry, especially Coca-Cola FEMSA Philippines, Inc. as its suppliers allegedly redirected their sugar stocks to the commercial market.
“I told [the suppliers] in our last meeting to make sure that the volume imported with the intent to supply to the bottlers and processors must be delivered to the processors and the bottlers,” he added.
“If you don’t, the government still reserves the right and has the power to allow these bottlers to import directly,” potentially exposing the traders to losses. — Anna Gabriela A. Mogato

K-12 forces rethink on inexperienced candidates — JobStreet

EMPLOYERS are looking more closely at interpersonal and problem-solving skills and attitude, indicating a new willingness to hire new graduates with no work experience, JobStreet.com said.
In its Philippines Annual Fresh Graduate Report, JobStreet.com said in a statement that “for some employers, the shift comes with a readiness to hire the new batch of K-12 graduates this year.”
“Employers willing to hire K-12 graduates noted that they’d be using similar metrics and factors as what they use with college graduates, to gauge the viability of K-12 candidates. They would primarily focus on attitude and work ethic, interpersonal and communication skills, knowledge of the field and industry, and academic performance as well as (on-the-job training) and internship experience,” JobStreet added.
It said 24% of employers said “they are ready to hire the new graduates.” These employers have confidence that K-12 graduates will be qualified for administrative (47%), customer service (44%), and sales and marketing (40%) positions.
The report covers industries like business process outsourcing (BPO) (21%), manufacturing (16%), professional services (12%) and retail (12%).
On the other hand, 35% of the surveyed employers said they will not hire K-12 graduates, “primarily because a college degree is among their desired qualifications” JobStreet said. The remaining 41% of employers surveyed were indefinite and are still evaluating if they are ready to hire K-12 candidates.
JobStreet’s newest report also showed that Human Resources Personnel “may not be very knowledgeable on the nature of the K-12 program” especially with the “K-12 Work Immersion Program specialized tracks and strands.”
“We believe that the new K-12 program can sufficiently prepare its graduates to be valuable contributors to the future work force,” Country Manager for JobStreet Philippines Philip A. Gioca said.
“We also believe that the education sector has done a great job in creating a valuable curriculum, but it needs to do more to disseminate information to employers about the kind of job candidate that K-12 creates,” Mr. Gioca added. — Gillian M. Cortez

Two Pasig River bridges to start construction next week

THE Department of Public Works and Highways (DPWH) said it is set to begin construction on two China-funded bridges along the Pasig River next week.
DPWH Secretary Mark A. Villar told reporters during an inspection of the site on Wednesday that the department has scheduled for next week the groundbreaking for the Binondo-Intramuros and Estrella-Pantaleon bridges.
“Next week we will be groundbreaking with President Rodrigo R. Duterte. After groundbreaking, construction will commence,” he said.
The Estrella-Pantaleon bridge spans 506.46 meters, while the Binondo-Intramuros bridge is planned for 734 meters.
Mr. Villar said construction of the two four-lane bridges is priced at about $70 million.
“The two China Grant-Aid Bridges are financed by the People’s Republic of China through a bilateral cooperation with the Republic of the Philippines,” DPWH said in a statement.
The DPWH has set a two-year construction period for the project.
“You will observe now that Del Pan and the bridges across Pasig are quite congested. (The new bridges) will ease it up by creating additional access points here in Binondo and Intramuros in Metro Manila,” Mr. Villar said.
He noted this project is part of the Metro Manila Logistics Master Plan that aims to construct 12 bridges in addition to the 30 existing bridges over the Pasig River to decongest roads. — Denise A. Valdez

Transparency, drug suppression touted as key achievements pre-SONA

THE GOVERNMENT’s governance and human development clusters yesterday presented their achievements in the past year, ahead of the State of the Nation Address (SONA) of President Rodrigo R. Duterte.
The Participatory Governance Cabinet cluster, chaired by Department of Interior and Local Government Officer-in-Charge, Secretary OIC-Secretary Eduardo M. Año, reported that 136,129 drug personalities were arrested with over 1.2 million surrendered since the new government took over.
It was also able to enact 237 Office of the Ombudsman decisions on public servants, with 186 local officials withdrawn from police deputation. It also investigated 57 complaints against local officials.
“LGUs (local government units) have to have frequent and inclusive dialogues to immediately address and provide for the people’s needs,” said Mr. Año.
Budget Secretary Benjamin E. Diokno, meanwhile, said that the government has enhanced transparency “across all levels of government,” through continuing the Transparency Seal and the Full Disclosure Policy for national and local governments; reaching more communities for their concerns through Open Government Townhall Sessions; implementing the 8888 hot line; setting up the Citizen Participatory Audit,eased access for government transactions through the National Government Portal; implementing the Freedom of Information (FoI) Law; and complying with the Extractive Industries Transparency Initiative, among others.
Mr. Diokno noted that all national government agencies have submitted their FoI manuals, while 84% of government-owned and -controlled corporations, 90% of state universities and colleges (SUCs), and 34% of local water districts have done the same.
He said the 8888 hot line has an average resolution rate of 93.2% of all the 180 legitimate transactions, “making it a very effective facility that allows citizens to give feedback to government that are acted upon on time and facilitates better public service delivery to our people.”
“Moving forward, we will strongly push for the passage of our priority legislative measures as well, such as the Freedom of Information Act, National ID System Act, and most especially the Budget Reform Bill. The bill aims to institutionalize necessary ingredients of a modern budget system, budget disclosure, and citizen participation in the budget process,” said Mr. Diokno.
“We put strong emphasis on ensuring that participatory governance is at the front and center of the Duterte administration change and reform agenda,” Mr. Diokno added.
This follows the first pre-SONA forum last week where the government’s economic development and infrastructure Cabinet clusters presented their achievements.
The government conducted pre-SONA forums to allow President Rodrigo R. Duterte flexibility to speak about “whatever he wants.”
The National Disaster Risk Resiliency cluster and the Security cluster and the Justice and Peace cluster will lead the third and final pre-SONA forum next week.
The Human Development and Poverty Reduction Cluster, headed by Department of Social Welfare and Development (DSWD) Acting Secretary Virginia N. Orogo, meanwhile, said that 4 million of its 4.9 million total Pantawid Pamilyang Pilipino Program were enrolled in schools.
“There were over a 1.3 million increase in enrollees in secondary education and enrolled more than 900,000 in 112 state universities and colleges,” she said.
Ms. Orogo said that the DSWD is also fast-tracking unconditional cash transfers for the bottom 50% of families affected by the tax reform law.
“A unified national ID system is currently being studied to facilitate the delivery of the cash transfers,” she said.
“We will work to improve access to credit and financial assistance, land, water, and other necessary assets, technology and machineries, and markets and services,” she said.
The government hopes to bring down poverty rate from 21.6% in 2015 to 14% by 2022. — Elijah Joseph C. Tubayan

Now online: SEC company registration

“At last!” I exclaimed in relief twice. First, upon hearing last year about the plans for online registration to be implemented the Securities and Exchange Commission (SEC), and then again upon the signing of Republic Act (RA) No. 11032 or the Ease of Doing Business Act recently.
The SEC online registration system was launched late last year even before the signing of the RA which aims to streamline the procedures and requirements in establishing a business and renewing business permits or registrations.
Prior to the enactment of the RA, the government agencies had been trying to make business registration more efficient by rationalizing the processes through an integrative approach, one of which was the so-called Integrated Business Registry System (IBRS). Under the IBRS, the SEC issues a Unified Registration Record containing the newly registered company’s SEC registration number, pre-issued tax identification number and the corresponding pre-issued employer membership numbers with the three social agencies, the SSS, PhilHealth and Pag-IBIG.
In November, the SEC launched the Company Registration System (CRS), a portal which allows applicants to submit requirements online. To access CRS, applicants are required to open an account through the SEC’s web portal at crs.sec.gov.ph.
The CRS aims to minimize personal appearances at the SEC offices by requiring submission of documents via online upload. Thus, the SEC no longer accepts manually filed applications since the CRS became fully operational. This zero-contact approach likewise limits interactions between examiners and applicants within the CRS network and is in line with the zero-contact policy of the Ease of Doing Business Act.
To contextualize how the CRS works, below is a discussion of the step-by-step registration/licensing process for corporations/partnerships, as well as an explanation of how these steps have been integrated in the new system, and how the CRS compares with its precursor.
The first step in registration is to verify whether the proposed name of the new entity is allowed or available. With its integration in the CRS, this online feature is most convenient since it spares the public from the previous long queues just to pay the name reservation fee.
Once the name reservation has been successfully verified, the applicant has four days to comply with the requirements in the CRS. In the event that the name reservation expires prior to proceeding to the subsequent process, the applicant may log in and redo the process. The fee for name reservation shall be paid together with the registration fees at the tail end of every successful CRS process.
In case the name verification result is denied, and if the applicant wishes to appeal, an appeal letter has to be uploaded in the CRS. This is an improvement from the former practice of physically filing the appeal letter with the SEC office. The applicant will be notified of the result of the appeal via the e-mail address enrolled in the applicant’s CRS account.
After completing the required information in the CRS, applicants may adopt the pre-generated incorporation/registration documents such as the Articles of Incorporation/Partnership and By-laws by downloading them from the CRS or use their own prepared versions.
Once the applicant has completely encoded the required information and uploaded the registration documents, a notification shall be sent to the applicant’s CRS account confirming receipt of the documents, and thereafter, furnishing the results of the SEC examiner’s evaluation. If there are deficiencies, the applicant has to comply via CRS. Once favorably evaluated, an order of payment will be sent to the applicant’s CRS account.
The Payment Assessment Form must be secured from the SEC office upon presentation of the printed order of payment. Thereafter, the applicant can proceed to pay the registration fees through the payment facility options in the CRS. Once paid, the receipt must be uploaded in the CRS before personally proceeding to the SEC office to file the original copies of the registration documents. Finally, an e-mail will be sent notifying the applicant when to drop by the SEC office to claim the Certificate of Incorporation/Registration/Authority/License.
The CRS seems promising in automating the registration process. However, like all other attempts to integrate technology to an age-old process, there have been challenges/birth pains in its implementation. From a personal perspective, here are some difficulties applicants have encountered under the new system and the downside of the CRS vis-a-vis its manual counterpart:

• The assignment of applications to an SEC examiner and the review process take longer in the CRS than in the old manual system. The turnaround time to receive the initial comments of the examiner is one month. In contrast, the application under the old manual process was immediately assigned to an examiner; thus,the applicant receives the examiner’s comments on the same day of submission or the day after, allowing the applicant to immediately rectify the deficiencies, if any.

• For efficient connectivity, the CRS requires a stable Internet connection. Due to the influx of transactions as the CRS accepts applications any time of the day, the system’s operating capacity is running slow. In the previous manual system, the SEC only accepts applications during office hours; hence, the volume of transactions was controlled and managed.

• The CRS experiences errors which sometimes require the applicant to restart or re-encode deleted information due to system failures.

• For payment of registration fees, there is an additional step requiring the applicant to upload a copy of the receipt on the CRS.

• Due to delays and uncertain waiting time, the zero-contact policy is not yet fully achieved; applicants still flock to the SEC to personally follow up their applications.

• The CRS is designed only for standard or pro-forma articles or by-laws.

Like all innovations, initial stages are often peppered with lapses. However, trial periods are but temporary phases in any systems process. Given the SEC’s upbeat stance for change, there are high hopes, that after the pilot year, CRS will soon operate efficiently and effectively as programmed.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
 
Cyril B. Pestilos is a Senior Consultant at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.
+63 (2) 845-2728
cyril.b.pestilos@ph.pwc.com

Much work but not much time

The 17th Congress resumes on July 23rd with President Duterte opening it with his third State of the Nation Address (SONA). At this point, with 11 days to go until the event, his people should be busy putting the finishing touches on his speech. Unless, given the recently reported “drop” in his ratings, they have actually chosen to recast and recalibrate what he is scheduled to deliver.
I am very curious as to what the President has to say this time around, particularly with respect to legislative agenda, economic direction, and general plans and programs for the next four years. Curious developments have occurred since his last SONA in 2017, and there are no clear indications as to how these would impact on his administration in the next four years.
For one, in the second quarter of 2018, the President registered his lowest net satisfaction rating to date. He dropped to “good” from “very good” in the second quarter of this year, as polled by Social Weather Stations (SWS) from June 27 to 30. The survey showed that 65% of adult Filipinos were satisfied with Duterte’s performance, five points lower from his March 2018 gross satisfaction rating of 70%. SWS said this resulted in a new personal low of +45 net satisfaction rating for the President, down from +56 rating last March.
Incidentally, soon after this, Vice-President Leni Robredo reportedly agreed to lead and be the voice of a “united” opposition, which is now reportedly preparing a list of candidates for the May 2019 senatorial elections. The list, uncertain if indicating a full ticket of 12 candidates, is expected to be released in September. Filing of certificates of candidacy is in October.
Second, the President will be delivering his third SONA with people grappling with a bearish stock market, high fuel prices, significantly higher consumption taxes, consumer price increases, and with clamor from labor for an end to “contractualization” and higher wages. Transport groups have also been asking for adjustments in transport fare.
Items 1 (drop in satisfaction) and 2 (economic troubles) above become significant in light of what may be seen as a potential tipping point, which theoretically can occur during the convergence of economic and political dissatisfaction. People who are hungry are more prone to anger, while those who are economically satisfied tend to be more compliant.
Third, the march to Federalism is under way. A draft constitution has been completed and is now making the rounds for comments and opinions. While Congress is yet to set a timetable for the draft’s revision and consideration, the initial spadework for constitutional changes has been done.
For sure, there will be some words from the President in this regard.
Fourth, Senator Koko Pimentel is no longer Senate President. He resigned as Senate chief in May and elected in his place was Senator Tito Sotto. From June 2016 until recently, the President, the Senate President, and the House Speaker were all from Mindanao. This is no longer the case. Sotto, who has been in politics in the last 30 years, comes from a family that hails from Cebu. He is the third member of his family to become senator, after his grandfather and namesake Vicente, and his grand uncle, Filemon.
Fifth, Justice Maria Lourdes Sereno is no longer Chief Justice of the Supreme Court. In fact, by the President’s third SONA, the Supreme Court will not have a Chief Justice. To date, Senior Associate Justice Antonio Carpio serves as chief magistrate in an acting capacity. It is uncertain if the President can appoint a new Chief Justice in the next 11 days. While Sereno was born in Manila, her father is actually from Siasi, Sulu in Mindanao. And her husband is from Davao City.
Sixth, Rolando “Bato” dela Rosa is no longer chief of the Philippine National Police (PNP). He was replaced by Oscar Albayalde as Director General of the PNP last April. Bato was President Duterte’s first PNP chief appointee. Bato is also from Mindanao, having been born in Sta Cruz, Davao Del Sur. He also served in Mindanao, particularly Davao City. Albayalde, on the other hand, is from San Fernando, Pampanga, and had never served in Davao City or Davao Region.
Of course, these personalities all matter particularly with respect to the presidential line of succession.
Under the law, the line of presidential succession follows the order of Vice-President, President of the Senate, and then Speaker of the House of Representatives. In case of death, permanent disability, or inability of these officials, Congress shall, by law, provide for the manner of selection of the person who is to act as President until a President or Vice-President shall have qualified.
In the event of a vacancy, maintaining peace and order amidst political confusion remains the mandate of the national police. The institution must remain intact and united under a legitimate leadership. Meanwhile, all constitutional and legal questions regarding succession and process are to be ultimately resolved by a Supreme Court headed by a Chief Justice.
With the filing of certificates of candidacy scheduled for October, Congress will have a relatively short runway to work on a legislative agenda that can produce needed political and economic reform measures. Come October until after the May 2019 elections, legislators’ attention will be divided. Politics can get in the way of law-making.
The focus on the legislative agenda in the next two months will depend largely on the requests and guidance to be put forth by the President in his SONA. Loyalty checks and loyalty changes may be in the offing, and new political lines may be drawn come October, which will just provide unnecessary distraction to lawmakers. They need to hit the ground running if they hope to get any work done.
 
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council
matort@yahoo.com

Lessons from the Energy Policy Development Program

Next week, the Energy Policy Development Program (EPDP), a USAID-funded project implemented by the UP Economics Foundation, will have its last lecture and the launch of a book that incorporates conferences, lectures, and seminars the program has sponsored over the last four years.
Among the EPDP lectures that I enjoyed — all held at the UP School of Economics (UPSE) — were those given by the private sector players. Here are some key points they made followed by my comments.
1. “Natural gas: Addressing the energy trilemma and powering our energy needs” by Mr. Giles Puno, First Gen, August 2017.
“Government support [is] crucial for LNG development… (1) Holistic and defined energy mix to direct planning and investments, (2) Incentivize LNG through fiscal and non-fiscal policies, (3) Secure LNG Off-take, similar to how Malampaya was underpinned.”
The first two points sounded like they were seeking special treatment from government and this is wrong. Setting the energy mix should be done by the market, not government. Government should stay out of building or financing or guaranteeing the construction of the LNG terminal and let interested private players put their money where their mouth is.
2. “Retail Competition and Open Access (RCOA): The Power of Choice” by Mr. Miguel Aboitiz, Aboitiz Power, Sept. 14, 2017.
“Benefits of RCOA for contestable customers: (1) they have more choices with respect to pricing and contract structure, (2) they are not subsidizing other customers, (3) they can choose the type of power they want or they can even decide to contract with a financial entity instead of a power plant owner, (4) they can choose from a variety different contract structures, (5) they are in full control of their generation costs.”
True. RCOA is among the best provisions of the EPIRA law of 2001. It liberalizes and allows the contestable customers to move away from geographical monopolies (private DUs or electric cooperatives) and allow them, to choose from three dozen or so retail electricity suppliers (RES).
3. “Enhancing Fair and Economic Competition” by Dr. Francisco L. Viray, Phinma Energy, Oct. 5, 2017.
“SUPPLY = DEMAND + LOSSES.
Above must be balanced in real time for the power system to be stable (Power System Stability), and it is consistent with ‘Causer’s Pay Principle.’”
The above equation is a big and explicit warning to advocates of “renewables only” lobbyists, activists, and developers. Demand is high in the Philippines with its 106 million population that expands 1.7 million a year, net of death and migration. Losses from scheduled maintenance shutdowns and unscheduled shutdowns can be substantial, especially if the power plants are old and aging. So high demand plus high losses would require high supply at stable, predictable capacity.
4. “Optimization of Supply” by Mr. Chrysogonus F. Herrera, MGen, Oct. 26, 2017.
“Where do we go?
(1) Let the market under EPIRA sort itself out (after all, it is working and gestating new investments); (2) A mandated “Generation Mix Policy” is a straitjacket to be avoided. It does not help reduce rates; (3) Coal is indispensable in keeping rates low and supply reliable; (4) Cheap and reliable power secures economic development and global competitiveness.”
Amen to Chris’ points. The EPIRA, the Wholesale Electricity Spot Market (WESM), and RCOA are all working and running full steam.
A government-mandated power generation mix is wrong and often cronyism-inspired. Let the electricity consumers decide what is good and desirable for them. Make sure that cheaper and reliable electricity supply is available.
5. “Delivering Clean and Green Energy to the Philippines” by Mr. Stewart Elliott, Energy World Group (EWG), Nov. 23, 2017.
“Pagbilao LNG Hub Terminal and 650MWCCGTpowerplant…”
Throughout his presentation, Mr. Elliott never mentioned things like “government fiscal and non-fiscal incentives for LNG terminal and development” at all. He just wants stable long-term policies not subject to arbitrary changes midway. Amen to this kind of investment attitude.
6. “Optimal Investment Decisions in Generation” by Mr. Eric T. Francia, Ayala Energy, Feb. 8, 2018.
“Investment Imperatives: (1) Diversify portfolio, (2) Further expand coal plants for baseload needs, (3) Explore gas/diesel for intermediate, peaking and ancillary, (4) Continue investments in renewables and build capabilities in storage, (5) Geographic diversification, (6) Strengthen balance sheet and multiple sources of funding, (7) Ensure cost competitiveness.”
This is practical advice from one of the country’s biggest business conglomerates, the Ayala Corp. It recognizes the practicality of coal and gas while pushing their corporate advocacy for renewables with storage.
7. “Cheap Electricity for a First World Philippines: The 24/7 Solar-Storage Revolution” by Mr. Leandro Leviste, Solar Philippines, Feb. 22, 2018.
“Solar is now the least cost for all peaking, mid-merit, and baseload requirements, and will thus comprise the vast majority of additional power generation capacity from hereon in the Philippines.”
Far out. If solar is indeed the “least cost,” we should have abolished the feed-in-tariff (FIT) scheme of guaranteed high price for 20 years for solar, from P9 to P10+/kWh when coal-gas prices are only P4-5/kWh and can be reduced to P2/kWh at off-peak hours.
The continued demonization of coal — articulated explicitly by Mr. Puno and Mr. Leviste in their presentations — is based on emotionalism and desire for government partiality, for two reasons.
One, our coal use until 2017 remained small compared to our Asian neighbors, only 13.1 mtoe or less than 1/2 of Vietnam, only 1/3 of Taiwan, 1/4 of Indonesia, 1/7 of South Korea, 1/9 of Japan, and 1/144 of China. And yet that small coal consumption provided 50% of total electricity production in the Philippines in 2017.
Two, even in developed and “green” Asian economies like Japan, South Korea, and Taiwan, solar and wind energy production remains very small, which speaks of their non-reliability and non-dependability and may even be part of economic underdevelopment, if pursued to the max (see table).
Energy Consumption in select Asia economies
The market and the consumers, not government, not the environmental activists and renewables developers, should set the appropriate energy mix. This is one of the important lessons, explicit or implicit, that one will derive from attending or reading the various lectures at EPDP.
 
Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.
minimalgovernment@gmail.com.

China’s Silk Road isn’t so smooth

By Mihir Sharma
YOU MAY not have noticed, what with the outbreak of trade war with the US and all, but China’s economic diplomacy has had a bad few weeks. The country’s flagship Belt and Road Initiative (BRI) is dealing with ever-greater resistance, slowing a momentum that once seemed unstoppable. In fact, I’d argue that the BRI is stalled.
The clearest sign of this, perhaps, was the news that Malaysia had halted Chinese projects worth $22 billion, including a controversial rail link along the country’s east coast. The decision looked inevitable after May’s elections. One of the pillars of Prime Minister Mahathir Mohamad’s successful campaign to unseat Najib Razak was the charge that Najib’s close links to China had bred corruption and bad decisions. Mahathir’s associates linked the scandal at the 1MDB development fund to BRI financing, while Najib’s associates doubled down, putting Chinese President Xi Jinping on their party posters. One Malaysian politician complained visitors might’ve thought Xi himself was on the ballot.
In many ways, China’s stumbles in Malaysia are exactly what BRI skeptics had always warned would happen in countries across Asia. Projects that might be easy to execute in China would run into delays and cost overruns in less-regimented countries; growth in debt, deficits and Chinese immigration would spark political opposition; and, when a new political leadership canceled those projects, bilateral and multilateral tensions would spike.
Malaysia is only the most high-profile example. To the north, Myanmar’s Planning and Finance Minister Soe Win told Nikkei this week that his government would demand that a new port on the Bay of Bengal be “slimmed down.”
For China, the port is pivotal — the shortest way to get oil from the Indian Ocean to southern China, avoiding a strategic chokepoint at the Straits of Malacca. But Myanmar now owes 40% of its external debt to China, which, as Soe Win pointed out with gentle understatement, is “not recommendable.”
Myanmar’s leaders can hardly be blamed for scaling back, especially given “lessons learned from our neighboring countries,” as Soe Win put it.
In Sri Lanka, an overindulgence in Chinese finance has already pushed one government out the door and left its successor saddled with expensive white elephants.
Great Wall China
Interest payments on Chinese loans — about $11 billion a year — would’ve consumed almost all of the island nation’s tax revenue. (Chinese infrastructure finance doesn’t come cheap — Sri Lanka reportedly pays six percent.) That prompted the new government to grant a Chinese company a controlling share of the big, empty port at Hambantota in a debt-for-equity deal, and panicked India enough to explore buying the world’s emptiest airport 20 kilometers away — also Chinese-financed, naturally — just to ensure it stays out of Chinese hands. Negotiators began talks this week on a price.
Even in Pakistan, which had embraced the China-Pakistan Economic Corridor (CPEC) as an effective antidote to dependence on an increasingly unfriendly West, policy makers are having second thoughts. Expensive Chinese machinery imports have pushed the current account deficit — and the rupee — to the wall. Pakistan’s central bank only has enough reserves to cover a couple of months of imports — and that’s after the country borrowed nearly $4 billion from the Chinese last year.
Pakistani officials have reportedly warned the Chinese that they’d better keep lending or Pakistan would turn to the International Monetary Fund, and then “we would have to make full disclosure of the terms on which China has agreed to build the CPEC.”
Pakistan’s voters, going to the polls shortly, should perhaps be asking themselves why a full disclosure of these terms would be so embarrassing. China’s leaders will shortly learn a lesson the US learned ages ago: Pakistan is the only country in the world that negotiates with a gun to its own head. My guess is that China will pay up this time, but that won’t make the CPEC any more sustainable financially.
And while all this was happening, China’s Premier Li Keqiang was in Sofia meeting with the leaders of Central and Eastern Europe for the annual “16+1” forum — a meeting notably lacking in enthusiasm compared to previous such conclaves. The European leaders will have noted that big infrastructure investment hasn’t exactly been turning up on time from China — and, for that matter, where it has, as in Athens’ Piraeus port, it may also have opened the door to criminality and fraud.
When the Belt and Road was first announced, it must have felt like a gift from heaven for embattled governments trying to raise money for the infrastructure their voters wanted. But, the truth is that China’s cash came with onerous conditions — high interest rates, procurement guarantees for Chinese companies, imported workers. Nor was China really prepared for the hurdles faced by big-ticket investments in countries with messy, more accountable politics.
Can the initiative be salvaged? Perhaps. After all, China has a capital surplus that needs to go somewhere. But, if it wants its investments to be sustainable, China will have to behave in these countries a lot more like the Western capital it seeks to displace. That means being cautious, cooperative with local capital and civil society, and respectful of political sentiment, even from dissidents.
In other words, the Chinese state would have to behave like the private sector. And we know how tough an ask that is.
 
BLOOMBERG

Having more fun helps in the daily recovery from work

By Irene de Pater
We’ve been told often times that technology shortens working hours to give us more free time. Yet, more often than not, we feel we are not only working harder but also leaving work later to squeeze more into the day.
In an effort to get ahead, many of us skip the gym or a stroll in the evening and instead log on to check e-mails and WhatsApp messages from colleagues, barely having time to eat dinner and catch the latest episode of Big Bang Theory.
But what if the key to being effective at work is to actually spend more time doing the abovementioned pleasurable activities in the evening?
While taking time off may seem counterintuitive to those who are conditioned to press on with work into the evening, our research shows that taking up enjoyable evening activities can significantly boost your recovery after work.
Although past studies have demonstrated that employees can improve recovery by detaching from work, relaxing, challenging themselves through mastering new skills or feeling more in control, they have not studied how pleasure gained through these off-work activities can help employees reduce stress and recover from the working day.
In a study with Madelon van Hooff from Radboud University in The Netherlands, we wanted to find out if it was not just taking a break from work in the evening that restores energy, but also whether the pleasure employees derive from their off-work activities helps them generate mental and emotional renewal during and after the experience.
PLEASURABLE OUT-OF-OFFICE ACTIVITIES ARE THE MOST RESTORATIVE
We followed a group of 84 people working in full-time jobs in a broad range of industries to measure how well employees recover from daily work through pleasurable activities. We then measured their well-being and recovery through daily diaries, looking at the relationship between the pleasure employees experienced during the evening after work and their recovery state that evening and at various times during the next workday.
While we expected to see pleasure playing a pivotal role in restoring employees’ energy, we were intrigued to find that experiencing pleasure contributes to recovery above and beyond the effects of other restorative experiences such as disengaging from work, relaxing, mastering new skills or gaining a sense of control.
When choosing an evening activity — for example, playing sport, having a massage or learning to cook — people should look for something that brings them pleasure to help them recover.
Why?
A pleasurable activity can enhance the production of hormones in the brain’s ‘pleasure reward’ system to regulate the stress response and promote recovery.
We also found that the pleasure which employees experienced not only helped them recover that evening — its beneficial effects also continued into the next working day. This is vital as the ultimate aim of recovery is to help employees tackle the demands of the next working day in an optimally recovered state.
Our study showed that on days when employees had expended considerable energy and were fatigued at the end of the workday, they experienced lower levels of pleasure during that evening after work. Paradoxically, employees who would benefit most from experiencing pleasure during the evening seem least able to obtain it.
What are the implications for both employees and organizations? Employees will not recover effectively, potentially leading to decreased work performance over the long term.
MAKING TIME FOR PLEASURE
For many people working in increasingly demanding jobs, the idea of spending time visiting friends, watching a film or taking a stroll in the park after work, does not seem like the best way to become more effective at work. When we’re under pressure we have the urge to work later and power through rather than pursuing pleasurable activities. But that doesn’t necessarily make us more productive.
Our energy is not infinite and we need to restore it through activities we enjoy outside work. When staying late becomes the norm it is unlikely to be sustainable and may undermine one’s performance.
Being mentally strong is about having the fortitude to seek out pleasurable activities in the evening that will allow you to be happier and more successful at what you do.
Our research challenges the traditional mind-set in many Asian workplaces, where employees are typically rewarded for working the longest hours. In Japan, for instance, office workers work for long hours. Last year, a Japanese woman died from overwork after clocking in 159 hours of overtime.
Fortunately, organizations have realized that there are diminishing productivity gains from employees working longer hours. For instance, nurses and health workers are now given shorter hours by the government.
Giving staff time to pursue enjoyable activities means they can return to work rejuvenated, and the resulting energy boost these employees gain is important in driving sustainable productivity.
 
Irene de Pater is an Assistant Professor in the Department of Management and Organisation at the National University of Singapore (NUS) Business School. The opinions expressed are those of the writer and do not represent the views and opinions of NUS.

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