Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 1270

Proposed natural gas law seen to lure investors

BW FILE PHOTO

By Sheldeen Joy Talavera, Reporter

THE PASSAGE of the proposed Philippine Natural Gas Development Act may attract investors to the country’s natural gas sector, but ongoing South China Sea disputes over resource-rich zones pose challenges, according to analysts.

“Hopefully, the Senate Bill 2793, once passed, will encourage both foreign and local E&P (exploration and production) companies to look for fossil gas in the Philippines,” Pedro H. Maniego, Jr., senior policy advisor of think tank Institute for Climate and Sustainable Cities, said in a Viber message on Saturday, noting the huge investment required.

The Philippines is under pressure to find other sources of indigenous energy as the Malampaya gas field, the country’s sole natural gas provider, nears depletion.

The Malampaya gas field, which supplies a fifth of the country’s power requirements, is expected to run out of easily recoverable gas using current techniques by 2027.

Upstream oil and gas firm PXP Energy Corp. was ordered to put on hold its exploration activities at the Reed Bank due to tensions with China.

“While the bill may improve the enabling conditions for natural gas sector investments in the Philippines, the sector’s most significant impediment is the country’s ongoing maritime dispute with Beijing in areas within and near identified natural gas exploration zones,” Terry L. Ridon, a public investment analyst, said in a Viber message.

“The dispute will make it difficult for Manila to explore and exploit these areas on its own or with other foreign partners,” he added.

Mr. Maniego said that the Philippines “occupies a low position in the global energy market with its minuscule production of coal, oil, and gas.”

The country’s neighbors in Southeast Asia were able to find substantial deposits in their maritime areas, he noted.

“Finding fossil gas to augment our requirements will raise the country’s standing. Unfortunately, the identified viable deposits are located in the disputed zones in the West Philippine Sea claimed by China,” Mr. Maniego said.

He said that the exploration of fossil fuels requires significant investment and could only be conducted by “companies with ample financial and technical resources.”

Meanwhile, Mr. Ridon said that generation facilities that use indigenous natural gas should still compete with other generation facilities on the basis of price.

This would ensure that the lowest cost of power remains the most important mandate under the Electric Power Industry Reform Act.

“The mere use of indigenous natural gas should not be the basis of priority dispatching in our energy system,” Mr. Ridon said.

‘RIGHT SIGNAL’
Sen. Pilar Juliana “Pia” S. Cayetano, chair of the Senate committee on energy, said the swift passage of Senate Bill No. 2793 would send the “right signal” to investors.

“It seeks to declare that the Philippines is open and will have very clear-cut policies on natural gas and indigenous natural gas development,” she said during the recent interpellation for the bill.

SB 2793, Ms. Cayetano said, would “promote awareness and create an environment that will open up opportunities for investors.”

She noted that legislative efforts to support natural gas exploration have been minimal since its peak in the 1970s, when more than 150 wells were drilled.

“This was when Malampaya was discovered,” she said.

The Philippines, she added, has effectively abandoned exploration of existing natural gas resources.

The proposed measure addresses the gaps in policies, legal support, and incentives for investors to restart their exploration of local gas resources, she noted.

“Natural gas is called a transition fuel, and we have proof that there is, it’s available in the Philippines,” Ms. Cayetano said.

“So by passing this law, it’s like erecting a billboard on EDSA globally and tell them that the Philippines is prioritizing natural gas,” she also said. “If you are an expert in natural gas, you’re welcome to come here. We have good business opportunities.”

Service Contract No. 38 governing the Malampaya gas field has been extended for 15 more years. 

The Malampaya consortium, led by Prime Energy Resources Development B.V., has pledged to drill two new wells to prolong the gas field’s lifespan and generate new gas by 2026. 

Retail outlook still bright despite high vacancies, inroads by e-commerce

RAWPIXEL.COM

By Justine Irish D. Tabile, Reporter

THE RETAIL INDUSTRY is still expected to grow this year despite the rise in vacancies and competition from electronic commerce (e-commerce).

Yukiko Tsukamoto, partner at Bain & Co., said that she is still optimistic about seeing growth in the industry as most retailers have returned to pre-pandemic levels.

“Consumption has remained strong despite inflation. We believe there is significant opportunity as consumer spending grows,” she said.

The Philippine Statistics Authority (PSA) reported that headline inflation increased to 4.4% in July, bringing average inflation in the seven months to July to 3.7%.

Meanwhile, household final consumption, which accounts for over 70% of the economy, rose 4.6% in the second quarter, slowing from 5.5% a year earlier.

Bain & Co. reported in July that the Asia-Pacific lagged its pre-pandemic share of global retail sales growth, averaging 29% between 2019 and 2021.

The Asia-Pacific accounted for 34% of global growth between 2021 and 2023 but remains below the 59% posted in 2017-2019.

Still, Ms. Tsukamoto said Bain & Co. sees significant growth upside for Philippine bricks-and-mortar retailers.

In particular, she sees an opportunity for grocers to increase their market share against wet markets.

“Wet markets remain a major source of fresh groceries for many Filipino households, comprising two-thirds of the grocery market compared to 20-30% in Singapore and 40-50% in Malaysia,” she said.

She added that grocers could also make themselves more competitive by improving the in-store customer experience and capturing data on and analyzing consumer shopping behavior.

For non-grocery retailers, she said the opportunities lie in non-shopping experiences and leveraging data.

“For non-grocers, in-store customer experience with more focus on the non-shopping experience to differentiate against online retailers and capturing customer data and understanding shopping behavior will be essential for growth,” she added.

E-COMMERCE VS BRICK AND MORTAR
Philippine Retailers Association (PRA) President Roberto S. Claudio, Sr. said that brick-and-mortar businesses view the growing e-commerce market as a threat.

“E-commerce has gained a major foothold among consumers, to the detriment of brick-and-mortar stores. Convenience, product availability, and speed contributed to this phenomenon,” Mr. Claudio told BusinessWorld via Viber. 

“Pre-pandemic e-commerce accounted for only 3-5% of total retail sales. In 2023, this figure went up to 20-25%,” he added.

The Department of Trade and Industry (DTI) tallied 86.98 million internet users in the Philippines, with internet penetration at 73.6%.

Citing a report by Google, Temasek, and Bain & Co., the DTI said the Philippine internet economy was $24 billion in gross merchandise value (GMV) last year and is expected to grow to $80-$150 billion by 2030.

“You can see that the growth is very high, and our population is around 111-110 million, many of whom are young. So, the potential of e-commerce is big,” DTI Digital PH Group Undersecretary Mary Jean T. Pacheco told BusinessWorld.

However, she said there remains significant upside opportunity to increase spending online, by persuading the market further of the convenience and security of online platforms.

“There is still an issue of trust, and this is the reason why we are very happy that we have laws like the Internet Transactions Act, which idea is to build trust in e-commerce,” she said.

Mr. Claudio said that the government should focus on the overall retail industry and not just e-commerce by leveling the playing field.

“E-commerce is just one small component of retail; in fact, 75% of the total retail industry is still brick and mortar,” he said.

“And remember, the government is not yet generating income from e-commerce businesses because it does not know how to tax the foreign retailers, since they do not have offices and registrations here,” he added.

Earlier, the PRA raised concerns about the uneven playing field caused by the differing tax regimes each industry operates under.

“We are required to pay a 12% value-added tax. But these retailers who are e-commerce or online are going to pay only 1% withholding tax … For us, in brick and mortar, it’s completely unfair,” he added.

Niks Fojas, TikTok Shop Category Lead for Fast Moving Consumer Goods, said e-commerce platforms allow small brands to compete with larger rivals.

“We have found that small and medium enterprises (SMEs) often find it challenging to compete with established brands in traditional retail spaces,” Ms. Fojas told BusinessWorld via e-mail.

“Through Shoppertainment, we aim to empower SMEs to grow further and contribute to the economy by providing them with a digital storefront to showcase their products and reach a nationwide audience,” she added.

According to Ms. Fojas, there are over two million Philippine businesses on TikTok Shop, mostly SMEs.

“These SMEs have harnessed the power of Shoppertainment to grow their brand and customer base by incorporating digital strategies from TikTok Shop to extend their reach and engage with a broader audience beyond their offline stores,” she added.

RETAIL VACANCY RATES
Aside from threats posed by e-commerce to brick-and-mortar stores, property analyst firm Colliers Philippines said vacancies in the retail property segment have been rising on increased supply.

“If you look at the malls, the vacancies are at about 15%, so this is still an elevated vacancy compared to about 9-10% pre-pandemic,” Joey Roi Bondoc, director and head of research at Colliers, told BusinessWorld in an interview.

He said that the vacancies rose following the closure of many stores during the pandemic, among other reasons.

“Much of the increase is due to the new retail spaces being completed. That is what really drove the 15% vacancy in Metro Manila,” he added.

Colliers reported that the vacancy rate in the first quarter was 15.5%, which it projects to increase to about 17% by the end of the year due to the substantial delivery of new retail space across Metro Manila.

“There will be 160,000 square meters of new retail space every year from 2024 up to 2026. So, that’s still pretty substantial,” he said.

“And, of course, it will take time before that new retail space will be absorbed by the market. Because of that, we’re projecting retail vacancy to increase through 2024,” he added.

However, Mr. Bondoc said that despite ample supply, Colliers remains positive on retail due to an improving economy.

“I think the key indicators are the young mobile workforce, the demographic sweet spot, rising purchasing power, the Philippines as one of the fastest-growing economies in Southeast Asia, remittances, and possible interest rate cuts,” he said.

“One major reason also why malls are very popular in the Philippines is that we don’t have a lot of parks. Our public spaces are our malls … That is why the mall culture here in the Philippines will continue to thrive,” he added.

Fourth Wall Research Director John Brylle L. Bae said that the rise of e-commerce should not be viewed as a threat to brick-and-mortar businesses as the impact varies for each type of product and service.

“The trust factor is crucial for certain purchases, requiring consumers to see the product in person,” he told BusinessWorld via e-mail.

“For example, despite the growth of e-commerce, Filipino consumers, regardless of income class, often prefer buying a brand-new 16-inch television from a mall to ensure quality. Trust is key, especially with high-cost items,” he added.

THE OMNICHANNEL FUTURE
PRA’s Mr. Claudio said that the new retail is “serving the customer in whatever (way) he or she wants,” as many brick-and-mortar retailers are now shifting part of their operations to e-commerce.

“If the customer wants to be served at home, we must extend the best store experience. Omnichannel will be the future of retailing,” he said.

However, he said that malls will have to innovate and become centers for entertainment and community activity as well as shopping to survive.

“People’s quest for social interaction remains. Brick-and-mortar shopping will survive, and e-commerce will simply augment the customers’ options on how to shop,” he added.

TikTok Shop’s Ms. Fojas said that the fundamental shift in consumer-brand interactions stemming from changing consumer needs can be addressed by implementing an omnichannel approach.

“By embracing omnichannel strategies, businesses can provide a consistent and engaging experience across platforms, ensuring they meet customers’ evolving preferences and needs,” she said.

This, she said, is why content is crucial in ensuring that brands build stronger customer connections.

“But even as we continue our efforts to enable businesses to enjoy greater opportunities to build and expand, we are also mindful of maintaining a safe and positive shopping experience,” she added.

Citing the Chef Tony’s Popcorn brand as an example, Ms. Fojas said the popcorn shop posted 48% growth in total GMV during the 6.6 sale in mid-June.

“Notably, its mixed flavors saw a 26.4% GMV uplift, with a triple-digit growth of 307% for other varieties like Jalapeno Cheddar, Golden Caramel, and Sour Cream Jack Cheddar,” she said.

Chef Tony’s Popcorn joined TikTok Shop in October.

Fourth Wall’s Mr. Bae said the future of retail will likely be omnichannel, especially in the Philippines.

“Mall culture in the Philippines is deeply rooted, making it unlikely that e-commerce will completely replace malls. Malls are integral to family bonding in this culture,” he added.

Bain & Co.’s Ms. Tsukamoto said that the shift to omnichannel retailing is inevitable, particularly for non-grocery stores.

“Consumers will expect retailers to understand them well and will expect to shop whenever they want. Shoppers will seek out retailers for the overall experience, not merely for making purchases,” she added.

Mr. Bondoc of Colliers said though e-commerce poses a challenge, some retailers are already complementing it.

“It is not exactly a big challenge. Right now, what retailers and mall operators are doing is complementing their retail spaces with an online presence — an omnichannel strategy,” he said.

“One good example of this is Uniqlo; for example, there are items that are not available online, so you will be really compelled to visit the store,” he added.

He said there has also been a proliferation of pop-up stores for products that were previously only available online.

“So that will also result in retail space take-up. So I think it is a good mix as it is complementing the need for physical mall space,” he added.

The ESG Roadmap: From initial setup to sustained impact and compliance

Vecteezy

The emergence of environmental, social, and governance (ESG) criteria has left employees, investors, and customers growing increasingly concerned with how corporations evaluate the sustainability and ethical impact of investments. With ESG fast becoming a standard in business operations, companies are realizing how they assess their success beyond profit and sales.

Like most causes in life and business, the first step towards an enterprise’s ESG journey is always the hardest. This is because companies and their owners are uncertain about the standard and how it can become beneficial to their businesses in the short and long term.

While their frameworks vary depending on global financial institutions, ESG refers to an investing principle that prioritizes the environment, social impact, and governance at the corporate level. Some investors use these standards to screen organizations’ business practices and performance on various sustainability and ethical issues.

Some of the few benefits of adopting an ESG framework, according to online data plat-form Statista, include enhanced brand reputation; attracting and retaining clients; improved community around buildings; and cost efficiency. In addition, results from the platform indicate that 39% of investors are willing to accept a lower rate of return in exchange for ESG-related benefits.

Embracing ESG

According to global consultancy firm CapGemini, businesses looking to begin their adherence toward an ESG framework must first evaluate their companies qualitatively and quantitatively. Examining an organization’s readiness for change as well as finding out the enterprise’s emissions, wastes, and other data related to ESG are crucial initial steps.

“Once that is understood, an ambition and strategy can be created for how to stand up the program, over what timeframe and resources are required to execute a successful program,” CapGemini Sustainability Lead Greg Bentham explained on a video from the company’s YouTube channel.

Furthermore, choosing the most suitable ESG framework for a company is another way to begin integrating a standard. As some frameworks are more aligned with specific industries, selecting the right ESG criteria can provide a clearer roadmap that helps embed sustainability and ethical practices into a business strategy.

Additionally, Forbes noted that successful ESG programs “start at the top,” with leadership from the boardroom, as it helps the rest of the workforce align with their goals. Forbes also mentioned that modernizing compliance change management may help in tracking ESG regulations and help better manage risks.

Moreover, once a company has started an ESG framework, figuring out how to run the program will be essential to long-term success. Companies would have to decide how they staff the program and how they manage risks from outside factors based on the ESG framework of their business.

Integrating ESG into a business requires a strategic and all-hands-on-deck approach from the boardroom to the workforce. Through the steps mentioned above, companies can begin their journey toward becoming more sustainable and impactful.

Sustaining ESG

Organizations usually comply with their ESG through corporate social responsibilities, business strategies, or practices integrated into their core operations. To ensure that an ESG initiative not only takes root but flourishes, companies would have to check off several boxes that focus on commitments, assessments, data, and long-term strategy.

Mr. Bentham mentioned that securing the commitment of the leadership of the company in the ESG framework and investments along with continuous reinforcements to their employees can help businesses further their ESG plans.

“Furthermore, [we should engage] with the customers as to why we’re doing it so that we gain momentum and we drive accountability from stakeholders as to what we are doing,” he added.

To encourage more accountability within the business, writing an annual report to their consumers, investors, and stakeholders can be an effective way to assess where the company is at in terms of its ESG goals compared to competitors. In the Philippines, publicly listed companies (PLCs) that have a public float of at least 50% are required to submit their annual ESG reports to the Securities and Exchange Commission.

With companies such as Sustainalytics and the Asia Corporate Governance Association keeping track of the ESG scores of businesses, setting goals and milestones based on self and third-party ESG assessments will give businesses a direction to focus their attention on and build a strategy that can get their scores higher.

After receiving feedback, gaining assessments, and setting goals, setting up a long-term ESG strategy based on the data gathered will give companies actionable steps to improve their ESG performance. While compliance systems, regulations, and demands change over time, a well-structured ESG strategy ensures that companies remain adaptable and resilient.

Embarking on and sustaining an ESG initiative can be daunting at the start and difficult to maintain in the process. However, with a clear strategy, strong leadership, and ongoing commitment to sustainability and ethical leadership, companies can overcome these challenges. Ultimately, companies who have integrated ESG into the core of their operations not only ensure compliance but also drive meaningful, long-term impact and create value for all stakeholders. — Jomarc Angelo M. Corpuz

Young entrepreneurs recognized in 2024 RVR Siklab Awards

RVR Siklab Awardees 2024 (L-R): Alvin C. Ong, Victor Mari C. Baguilat, Jr., Ann Adeline G. Dumaliang, Ariestelo A. Asilo, and Rafael Ignacio S. Dionisio

Aside from Ramon V. del Rosario Nation Building Awardee, the late Ambassador Howard Q. Dee, five individuals were honored in this year’s Ramon V. del Rosario (RVR) Awards for having exemplified outstanding corporate citizenship and a fervent commitment to nation-building across various industries — proving that business can indeed be a force for good.

In addition to the Award for Nation Building, the RVR Awards also recognizes promising entrepreneurs for impacting their communities and industries through their businesses or social enterprises with the Siklab Award.

One of the awardees is Ariestelo A. Asilo, co-founder and chief executive officer (CEO) of Varacco, Inc. and the president of ThinnkFarm. ThinnkFarm and Varacco provide livelihood to 400 coffee farmers in Cavite and Mindanao. Mr. Asilo was recognized in 2021 as one of the 50 Best Small Businesses for the United Nations’ “Good Food for All.” His leadership not only empowers farmers, but also inspires the Filipino youth.

Victor Mari C. Baguilat, Jr. is the founder, CEO, and creative director of Kandama Social Enterprise. Mr. Baguilat founded Kandama to empower indigenous Ifugao women weavers by connecting their traditional hand-loomed fabrics to the global market. Kandama has been featured in fashion events in New York, Paris, Melbourne, and Hong Kong. It provides sustainable livelihood while preserving the precious weaving tradition of these communities.

Also among this year’s awardees is Rafael Ignacio S. Dionisio, co-founder and president of Make A Difference (MAD) Travel. MAD Travel partners with the Aeta community to build forests of native and fruit trees in Zambales. MAD Travel creates fulfilling experiences that enable communities to develop sustainable products. The company also supported local farmers and entrepreneurs through and despite the challenges brought on by the COVID-19 pandemic.

Ann Adeline G. Dumaliang, managing trustee of the Masungi Georeserve, co-founded Masungi Georeserve, a conservation area that is home to over 500 species. Her innovative approach combines conservation, eco-tourism, education, and community engagement. Masungi has planted 100,000 native trees and established ranger stations to protect the watershed that benefits millions.

Completing the list is Alvin C. Ong, founder and CEO of Fredley Group of Companies, a food & beverage company behind brands like Macao Imperial Tea and Nabe. Coming from humble beginnings of packing hangers, Mr. Ong built a billion-peso empire of more than 260 restaurants and 3,000 employees all while adopting inclusive hiring practices for differently abled people.

“Our awardees will do this nation an even greater service by telling your stories especially to our young idealistic youth who day-in and day-out are bombarded by negative information giving them less and less reason to be hopeful,” PHINMA Chairman and Chief Executive Officer Ramon R. del Rosario, Jr. said in his remarks during the ceremonies held last Aug. 20 at The Fifth at Rockwell. “We will fill that void with your stories of entrepreneurial peace-building, agriculture and tourism innovation, cultural preservation, environment protection and inclusive growth.”

PLDT group partners with First Gen for renewable energy

PHOTO FROM JGSUMMIT.COM.PH

PANGILINAN-LED PLDT Inc. and its wireless subsidiary Smart Communications, Inc. tapped First Gen Corp. to power their network facilities with renewables.

“We are once again tapping First Gen’s geothermal energy supply to increase the renewable component of the energy mix of our critical facilities in Mindanao,” PLDT Vice-President and Sector Head for Property and Facilities Leo Gonzales said in a media release on Sunday.

Lopez-led First Gen will power the group’s six network facilities in Mindanao with renewable energy (RE), allowing it to reduce its power costs, the company said.

Among the telco facilities that will be powered with renewables is PLDT Ponciano, the company’s regional facility that caters to VITRO Davao, its data center in Mindanao.

“This switch will also make VITRO Davao the first data center of the telco firm to be powered 100% by RE,” it said.

“This enables us to future-proof our facilities, reduce our operational expenses, and support the government’s Green Energy Option Program (GEOP) in the region,” Mr. Gonzales said.

Launched in 2018, GEOP is a voluntary policy mechanism that allows users who consume at least 100 kilowatts to source power from qualified electricity retailers supplying RE.

The expansion of PLDT’s partnership with First Gen allows the company to generate P23 million in savings on energy and operational costs, PLDT said.

PLDT added that it would also allow the company to reduce its greenhouse gas emissions by nearly 13,000 tons per year.

Last year, PLDT and Smart signed a power supply partnership with First Gen to power their network facilities in Cebu, Samar, and Iloilo with geothermal energy.

PLDT said it also expects to further expand its energy supply mix by tapping into other energy sources like solar and wind energy sources.

For 2024, the company plans to shift more facilities to renewable energy, PLDT noted.

“In addition to the transition to RE, PLDT and Smart have been venturing into the adoption of green technologies and various resource optimization initiatives for their network sites, business offices, and key facilities nationwide,” PLDT said.

First Gen is a power generation company with a diversified energy portfolio including natural gas, geothermal, hydro, wind, and solar. It is targeting to grow its RE portfolio to up to 13 gigawatts by 2030.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

Maya named PH’s Best Digital Bank in top global recognitions

Maya has once again earned top global awards for revolutionizing banking for every Filipino, from the unbanked to the unhappily banked.

For the second straight year, Maya was recognized as the Best Digital Bank and Best Mobile Banking App in the Philippines at the World’s Best Digital Bank Awards 2024 by Global Finance Magazine. Recently, it was named the Best Virtual Bank in the Philippines for 2024 by FinanceAsia Awards in Hong Kong and New Virtual Bank in the Philippines at the Retail Banking Awards in Singapore.

Maya also ranked 3rd in the Philippines in Statista and CNBC’s inaugural Best Banks — Asia Pacific 2024 report and made Forbes Magazine’s World’s Best Banks 2024 list for the second year.

Shailesh Baidwan, Maya Group President and Co-Founder of Maya Bank, said, “Every day, we’re driven to make banking simple, intuitive, and useful for everyone. In just over two years, we’ve shown that digital banking with Maya is the fastest and easiest way to boost the financial health of Filipinos. These new recognitions from our peers truly validate our efforts.”

Addressing Banking Challenges

In the Philippines, where banks symbolize upward mobility and financial security, traditional banking is often inconvenient, leaving many without easy access to financial accounts or credit services.

Fintech solutions have stepped up to address these banking woes, helping raise the number of Filipinos with financial accounts from 29% in 2019 to 56% in 2021, thanks to digital payments. Despite these advances, 52% of Filipino adults still save at home, and 57% rely on informal borrowing in 2021, according to the Bangko Sentral ng Pilipinas.  

Maya revolutionized traditional banking with simple, intuitive, and transparent products. With just one ID, Filipinos can save, borrow, spend, invest, and earn rewards all within one app — a first in the Philippines.

Reinventing savings in the Philippines, Maya is the first to offer flexible deposit products, such as time deposit, that allow users to start small and build over time. It is also the pioneering bank to offer higher interest rates the more they use Maya for everyday spending. As of end-June 2024, deposit balance grew by 32% YoY to P32.8 billion.

Recognized as the country’s #1 Digital Bank in the Philippines, Maya holds the largest market share in deposit balances among digital banks at 38% as of March 2024. It also boasts the highest monthly active users according to data.ai and the highest user ratings on major app stores. 

Maya revolutionized unsecured lending by creating an AI-driven credit scoring model that uses payments and other alternative data, allowing it to lend profitably with speed and at scale.

As of end-June 2024, Maya has provided loans to over a million borrowers, with total loan disbursements life-to-date reaching P47 billion. Maya has expanded unsecured credit disbursement to customers, with 59% of its borrowers taking a bank loan for the first time.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.

PHL counting on renewables as energy crisis looms 

FREEPIK

By Sheldeen Joy Talavera, Reporter

WITH the sole indigenous natural gas source responsible for 20% of Luzon’s power needs expected to run dry, the looming energy crisis is sending the Philippines on a mad scramble to adopt renewable energy before the lights start going out.

The Philippines continues to be dependent on coal for baseload power, even after banning new coal-fired power plants. Coal accounted for over 60% of the power generation mix last year, and could continue to make up a significant share with many recently built coal-fired power plants up and running.

Despite the continued reliance on coal-fired power, the government has set ambitious goals to increase the share of renewable energy in the power generation mix. Renewable energy includes wind, solar, biomass, geothermal, ocean energy, and hydropower, which comes from naturally replenishing resources.

State of power plants in the Luzon grid“While this highlights that the Philippines is still heavily reliant on fossil-based commodities, we are also seeing the significant potential for the expansion of renewable energy projects in the country,” Angelo Kairos T. Dela Cruz, executive director of think tank Institute for Climate and Sustainable Cities, said in an e-mail.

Mr. Dela Cruz said the Philippines is moving towards “a more sustainable and resilient energy landscape” under the Clean Energy Scenario (CES) of the Philippine Energy Plan 2020-2040, developed by the Department of Energy (DoE).

Renewable energy currently holds a 22% share of the power generation mix. The CES targets are a 35% share by 2030 and 50% by 2040.

Judging by policy and regulatory improvements, the Philippines has taken great strides in pushing for more new renewable energy capacity, according to Jose M. Layug, Jr., president of the Developers of Renewable Energy for Advancement, Inc.

“The Philippines has leapfrogged its neighbors in ensuring transition to cleaner forms of energy,” Mr. Layug said via Viber.

The DoE has been promoting renewable energy adoption via the Green Energy Auction (GEA) Program, Green Energy Option Program, net metering, and renewable energy portfolio standards.

“These initiatives aim to incentivize investment in renewable energy projects and create an enabling environment for their development,” Mr. Dela Cruz said.

The Energy department is targeting two rounds of the GEA this year, featuring various renewable energy technologies, particularly projects involving integrated renewable energy and energy storage systems.

To date, it has awarded 5.4 gigawatts of new renewable energy capacity via the auction program.

For 2024, the DoE expects more than 4,000 megawatts of renewable and conventional power projects to come online, thereby bolstering the power supply.

Analysts said that there is still a need to consider the limitations of variable forms of renewable energy to ensure stable and reliable electricity.

Mr. Layug said the push towards the renewable energy targets should be “calibrated yet aggressive.”

“While we install more renewable energy plants, the DoE is fully aware of the need for baseload power and ancillary services to address intermittence. We will move forward with (sustainability) and resilience, taking into account the consumer interest,” he said.

The Philippines’ grid planning has traditionally been focused on centralized baseload power plants, “which typically run on fossil fuels,” Mr. Dela Cruz said.

“This approach makes it challenging to integrate variable renewable energy sources like solar and wind into the grid effectively, as instead of baseload facilities, which are inflexible, what we need to complement variable renewable energy is flexible generation,” he added.

Eric T. Francia, president and chief executive officer of ACEN Corp., said that there is a need to recognize the limitations of the system given the intermittency of variable forms of renewable energy.

“The good news is that battery storage costs are improving. I hope to see supportive policies to accelerate the scaling up of energy storage, thereby unlocking the full potential of renewables,” Mr. Francia said via Viber.

ACEN, the energy arm of the Ayala group, currently controls about 4.8 gigawatts of attributable capacity in operation and under construction, as well as signed agreements and successful competitive tenders amounting to over one gigawatt.

The company said it has effectively exceeded its original goal of five gigawatts of renewables by 2025.

Philippines falls in Energy Transition IndexBUILDING THE RENEWABLE ENERGY PORTFOLIO
With the Philippines highly vulnerable to climate change, some companies have integrated renewable energy into their portfolios to reduce emissions of greenhouse gasses and other pollutants.

Renewable energy accounted for most of the committed projects in the pipeline for the year, dominated by solar energy with capacity of 1,720.27 megawatts as of the end of May.

SP New Energy Corp. (SPNEC) is building the P200-billion Terra Solar project which could become one of the world’s largest solar farms.

The solar project in Nueva Ecija and Bulacan consists of a 3,500-megawatt solar power plant and a 4,000-megawatt-hour energy storage system. It is expected to generate more than five billion kilowatt-hours of electricity yearly.

“This will be one of the largest solar projects not just in Asia, but in the world,” SPNEC Chairman Manuel V. Pangilinan has said. “It’s a big project. It has attracted a lot of interest from foreign investors because it’s big. It’s transformative for the Philippines.”

Antonio Miguel B. Alcantara, chief executive officer of Alsons Power Group, said accelerating the shift toward sustainable energy is essential.

“This shift will require building new power plants, improving our electrical grids, and establishing reliable interconnections between islands to facilitate the integration of renewable energy sources and improve overall energy access,” Mr. Alcantara said via Viber.

Alsons Power, the power arm of the Alcantara group, is set to commence with commercial operations of its P5.5-billion hydropower project in Sarangani province in September — its first renewable energy project.

It has a pipeline of nine hydropower projects which the company aims to complete over the next five years.

Currently, Alsons has three diesel power plants and a thermal plant with a combined capacity of 468 megawatts.

“Along with the development, implementation, and operation of our power projects comes our drive to integrate ourselves into our host communities. We do this through our community relations programs that focus on the environment, education, and community development,” Mr. Alcantara said.

Under the Energy Regulation No. 1-94, host communities are ensured to get a reasonable share of the profit from power plants operating in their areas.

ACCESS TO FINANCING
Renewables still face challenges due to limited access to financing and permitting issues that could hinder the industry’s expansion.

“The limited access to financing slows down the development and expansion of renewable energy initiatives due to inability to secure adequate funds,” the DoE said.

Mr. Dela Cruz said that while renewable energy plants require substantial upfront investment, obtaining loans and financing can be challenging, particularly for small industry players.

“Limited access to affordable capital and uncertainty surrounding financial returns can deter potential investors from actively participating in renewable energy,” he said.

The Philippines will need up to P31 trillion to hit its energy targets by 2040, according to the DoE.

Aside from financing, the DoE said obtaining permits remains “complex,” which it is trying to address through the Energy Virtual One-Stop Shop (EVOSS).

“While we have made progress in ease of doing business with EVOSS, there is still room for improving processes and reducing permits needed to build power plants. We need to have vibrant and mutually cooperative government collaboration: national and local,” Mr. Layug said.

Despite the challenges, the Energy department said it is still on track on achieving its renewable energy goal, committing to expand the portfolio.

“We are actively developing waste-to-energy resources, expanding rooftop solar installations, and exploring the potential of ocean and tidal energy, ensuring a diverse and resilient energy mix for the future,” the agency said.

“These efforts underscore our dedication to achieving national renewable energy targets, reducing carbon emissions, and securing a sustainable energy future for all,” it added.

SEC warns vs investing in Modesto Cardano, Super 9 impersonator

THE SECURITIES and Exchange Commission (SEC) warned the public against investing in Modesto Cardano Market Cap Tr3ding Services OPC and an entity posing as Super 9 Shopping Centre, Inc., as they do not have license to solicit investments.

In an advisory on its website, the SEC said that Modesto Cardano is reportedly offering investments to the public.

The entity promises that investors could earn 20% up to 200% depending on the investment. Investors could invest from P500 to P10,000.

In addition, investors can earn a 15% direct referral bonus and 1% multilevel referral commission.

“The transactions stated above are considered ‘investment contracts’ and must be registered with the commission,” the SEC said.

The SEC warned that those acting as salesmen, brokers, and dealers of the entities could face a maximum fine of P5 million, a 21-year imprisonment, or both pursuant to Republic Act No. 8799 or the Securities Regulation Code.

In a separate advisory on its website, the SEC said that individuals or groups representing an entity named Super 9 Shopping Centre, Inc. are “falsely impersonating” the duly registered Super 9 Shopping Centre, Inc.

“Verification also confirms that the legitimate Super 9 Shopping Centre, Inc. has no affiliation with or connection with the fraudulent entity engaged in these illegal investment activities,” the SEC said.

The entity reportedly invites the public via social media platforms into investing their money with the promise of high profits.

It attracts the public via an online job advertisement. Once registered, participants are instructed to accept orders for products from affiliated stores with a promise of earning a commission. Before carrying out any tasks, the participants will be required to deposit a specific amount.

The SEC added that the entity is presenting a copy of its alleged certificate of registration as a way of enticing the public to invest in its scheme. — Revin Mikhael D. Ochave

Working smarter

Specialized drones. The operations and maintenance of AboitizPower’s Cayanga-Bugallon Solar Power facility (pictured) is supported by drone technology, allowing for precision and boosting maintenance efficiency.

Technological innovation in AboitizPower’s power plants

Driven by technology and innovation, smart power plants are bringing in more operational reliability and efficiency amidst the transition to cleaner energy systems.

Operational reliability and efficiency in power generation is crucial to the Philippine energy grid, especially as it is expected to absorb both an increase in electricity demand and variable renewable energy capacities in the coming years.

With lesser downtimes and more proactive maintenance activities, smart power plants figure into the bigger picture of centering energy security — or having a sufficient power supply with reliable access — in the grand journey of the energy transition.

Living out its purpose of Transforming Energy for a Better World and partaking in the Aboitiz Group’s Great Transformation, Aboitiz Power Corporation (AboitizPower) intends to pioneer sustainable energy solutions powered by advanced technologies and human ingenuity.

Smart conventional power plants

Project Arkanghel. (L-R) AboitizPower Thermal COO Celso Caballero III and Chief Finance Officer Sandro Aboitiz with SCGC Chief Operations Officer Mongkol Hengrojanasophon and REPCO NEX Managing Director Chakorn Kraivichien formalize the partnership between their companies to develop Project Arkanghel.

Under “Project Arkanghel,” AboitizPower has set a goal to transform its existing coal-fired power plants to become smart power plants. The 340-megawatt Therma Visayas Plant in Toledo City, Cebu and the 300-megawatt Therma South Plant in Davao City will serve as pioneer models.

The plan is to establish a Unified Operations Center (UOC), which includes digital twin technologies, anomaly detection and early warning systems, and an “end-to-end” fully integrated live asset health monitoring system. This empowers engineers to predict potential issues and optimize plant operations.

In effect, the UOC will improve plant reliability and efficiency by enabling operators to collect insights and make data-driven decisions to predict equipment failures and plan necessary repairs and actions, thus helping to reduce the number of forced or planned plant outages.

Through digital transformation, operators can also better identify alternative combustion processes and different fuel formulations. They can also predict the output of variable renewable energy and prepare the smart power plant to anticipate the movements in supply and demand.

By upgrading the capabilities and efficiencies of its baseload capacities, AboitizPower believes that it is helping manage the integration of more variable renewable energy sources into the power system. Dependable and reliable power will be needed by a growing Filipino population and economy.

In developing “Project Arkanghel,” AboitizPower has partnered with Thailand-based company REPCO NEX Industrial Solutions.

Smart renewable energy facilities

National Operations Control Center. AboitizPower’s investments in technology include its National Operations Control Center, which allows for the operation and monitoring of 26 renewable energy facilities all from one location.

AboitizPower’s investments in technology include its National Operations Control Center (NOCC) — the first of its kind in the Philippine power generation sector — which allows for the operation and monitoring of 26 renewable energy facilities all from one location.

This means that even if the power generation facility is thousands of kilometers away, NOCC engineers can observe, make decisions, and control its operations from their computer. Monitoring and data collection are also streamlined, making it easier to consolidate data for strategizing and meeting regulatory requirements.

With operational control and data collection being centralized in the NOCC, operators utilize data analytics, data science, and artificial intelligence for better resource management, leading to more efficient operations and dispatch of the hydropower and solar facilities integrated in the system. The NOCC also allows for faster communication of detected plant anomalies within its regulated ecosystem, contributing to minimized downtime and losses.

Consequently, the NOCC enables higher power generation output from the renewable energy power plants.

At the same time, in some of AboitizPower’s hydropower and solar power plants, specialized drones are being deployed to make maintenance and rehabilitation activities more efficient.

Power plant operators would no longer have to manually visit and inspect each solar panel, conveyance line, or any other component of a renewable energy facility if a drone can do it for them.

Using drones makes inspections quicker, saving AboitizPower a lot of resources since it initially takes significant time and effort for a person to check on the Company’s assets given the sheer size and scope of its facilities.

Outfitted with high-resolution cameras and other onboard sensing equipment, the drones diagnose maintenance requirements faster, resulting in less downtime and more reliability in clean power generation.

The drones have empowered the operators to take preemptive measures, preventing costly breakdowns and ensuring the power plant’s capability to generate electricity. The data collected through drone inspections served as the foundation for a thorough evaluation and design process leading to focused maintenance activities and improvements in the infrastructure.

AboitizPower

AboitizPower is one of the largest power producers in the Philippines. It is continuously expanding its renewable energy portfolio to at least 4,600 megawatts, with over 1,000 megawatts of disclosed energy projects in solar, hydro, geothermal, wind, and energy storage systems already in development.

The Company also has thermal power plants in its generation portfolio to support the country’s baseload and peak energy demands.

The Aboitiz Group launched its Great Transformation campaign in 2022 to become the Philippines’ first Techglomerate, leveraging resources and cross-company synergies to deliver more stakeholder value and help tech-up the Philippine economy.

By trailblazing technologies that support the operational reliability and efficiency of its generation portfolio, AboitizPower is helping strengthen energy security amidst the Philippine energy transition. By doing so, it is also contributing to a “human transition” of powering the economy to support the social mobility of Filipinos.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.

Federal Land and Nomura Real Estate: Elevating urban living with Japanese ingenuity & Filipino design innovations

The Observatory, situated in Mandaluyong City and across the river from BGC, presents a modern retreat in a strategically advantageous locale. (Artist’s Perspective)

Due to changing market preferences and the increasing demand for modern and convenient living spaces among Filipinos, partnerships between developers and real estate innovators have become more prevalent in meeting the evolving needs of the market.

FNG, the joint venture between Federal Land, Inc. and Nomura Real Estate Development Co., Ltd., combines the expertise of two real estate giants to reshape the urban landscape of the Philippines with modern, sustainable, and community-focused developments.

Federal Land, Inc., with over five decades of experience in the Philippine real estate market, has significantly contributed to reshaping cityscapes through its pioneering residential, commercial, and integrated community projects. As a subsidiary of GT Capital Holdings, its influence spans multiple sectors, further strengthening its ability to drive large-scale urban transformation.

On the other hand, Nomura Real Estate Development Co., Ltd., one of the biggest real estate developers in Japan, brings Japanese innovation to the table with its residential, commercial, and industrial developments. Committed to sustainability and quality, Nomura Real Estate Development Co., Ltd.’s influence ensures that every project under FNG is designed with a long-term vision, blending aesthetics with functionality to meet the growing needs of urban living.

FNG incorporates Japanese design principles into its projects, emphasizing the seamless integration of nature and prioritization of client needs. The company also integrates cutting-edge design, architecture, and features, ensuring residents enjoy a seamless and comfortable lifestyle. Most importantly, FNG actively seeks partnerships with local and global brands to enhance the lives of its future communities.

FEDERAL LAND, INC.: A MODEL FOR INTEGRATED URBAN DEVELOPMENT

Architectural trends and community living standards influence the real estate sector as property developments focus on integrated, mixed-use urban planning, aiming to foster vibrant, self-sustaining communities.

Riverpark, envisioned as the “Next Gen City of the South,” is a self-sufficient community integrating residential, commercial, and recreational spaces. This 600-hectare development aims to enhance residents’ quality of life while supporting the broader urbanization goals of General Trias, Cavite.

Seventy hectares of the development are dedicated to parks and green spaces, including a 16-hectare Central Park, which serves as a green highway connecting the northern and southern ends of the township. This expansive parkland features trekking and jogging paths, Japanese gardens, and a bamboo forest inspired by Kyoto’s Arashiyama Bamboo Grove. These are coupled by a 1.8-kilometer bike trail, called Riverpark Trails. Riverpark also features a 4-hectare mixed-use space with commercial lots ranging from 1,000 to 2,400 square meters; as well as Yume at Riverpark, the first horizontal residential project within the township, which exemplifies the innovative approach to urban living that Riverpark promises.

In addition, Federal Land, Inc., in partnership with SM Prime Holdings, recently held its groundbreaking ceremony for the construction of SM City General Trias, their 8th mall in Cavite that will serve as a retail anchor for the community. A new logistics facility by UNIQLO is also under development to support the growing needs of businesses in the area.

YUME AT RIVERPARK: BRINGING PREMIER JAPANESE-INSPIRED COMMUNITY TO CAVITE

Yume at Riverpark, located in General Trias, Cavite, is a Japanese-inspired neighborhood nestled within Riverpark North. (Artist’s Perspective)

Inside Riverpark, FNG brings Japanese-inspired living to a new residential neighborhood with Yume at Riverpark.

Aiming to capture the spirit of imagination and aspiration as reflected in its name that mean “Dream” and “Vision” in Japanese, the 18-hectare Yume at Riverpark offers a serene yet dynamic environment that integrates the best of modern design with traditional Japanese elements.

Yume at Riverpark offers 296 lots in a variety of lot sizes ranging from 300 to 527 square meters, providing families with the flexibility to create the home that suits their dreams and lifestyles.

These living spaces come in a diverse range of residential options, spanning expansive lots and vertical developments, ensuring everyone finds their ideal home within Riverpark’s thriving community. The expansive grounds and well-thought-out clustering of homes are also made to ensure privacy, security, and a sense of community for all residents.

This development also features amenities such as a grand clubhouse, wellness spa, swimming pool, multipurpose court, and beautifully landscaped Japanese gardens. Pocket parks, jogging paths, and fitness stations are available to the community, encouraging a vibrant and active lifestyle amid lush green spaces.

Yume at Riverpark is scheduled for completion by May 2026.

REFINING CITY LIVING WITH THE OBSERVATORY

FNG also aims to redefine the essence of city living in Metro Manila with its transformative mixed-use development, The Observatory.

Outdoor amenities and open area at The Observatory. (Artist’s Perspective)

Strategically situated in Mandaluyong City, The Observatory offers a modern urban retreat that combines the dynamic culture of the metropolis with unparalleled comfort and convenience. It is located at the crossroads of three major central business districts—Makati, Bonifacio Global City (BGC), and Ortigas Center—and boasts seamless connectivity to the greater metro via EDSA and the BGC-Ortigas Link Bridge.

The development is also set to offer a neighborhood of residential towers, extensive retail facilities, and office spaces, all interconnected through walkable and open areas, ensuring that residents have easy access to essential establishments, premier shopping centers, top-tier schools, and world-class healthcare facilities.

Named after the Japanese word for “sky,” Sora Tower will be the first residential building in the planned township, which aims to provide a luxurious yet practical urban living experience. The residential tower will feature 650 units, ranging from studio apartments to expansive penthouses, with sizes varying from 28 to 205 square meters.

Each of these living spaces are meticulously crafted with Japanese efficiency and functionality in mind, featuring user-friendly fixtures, modular storage solutions, and advanced security systems, ensuring comfort and peace of mind for every homeowner.

Sora Tower emphasizes efficient use of space, with features like the Genkan, a traditional Japanese entryway designed to keep outdoor items organized. Modular storage solutions and adjustable kitchen shelves further enhance space utilization, reflecting a commitment to functionality and adaptability.

Security and convenience are also key aspects of the design. With features such as key card access, multiple elevators, and direct retail access, the tower ensures a safe and convenient living environment. This focus on integrated design and convenience is increasingly common in urban developments, aimed at improving residents’ quality of life.

Amenities in Sora Tower include a garden lobby, a children’s playroom, a co-working center, and a fitness gym. Outdoor facilities such as a swimming pool, pet park, and garden enhance the living experience, creating spaces for both relaxation and recreation.

The Observatory takes inspiration from the vibrant cities of Japan, offering amenities that cater to a dynamic urban lifestyle. From the co-working spaces and fitness gym to outdoor lounges and swimming pools, residents will find spaces that resonate with the energy and vibrancy of iconic Japanese districts like Shibuya. Each element is designed to support a balanced and fulfilling lifestyle.

BUILDING TOWARDS ECONOMIC DEVELOPMENT

The influence of real estate on urban development extends beyond building construction. Projects like those spearheaded by FNG stimulate local economies, create jobs, and improve infrastructure.

The development of Riverpark in Cavite, for example, aligns with the industrial growth in the South Luzon region, bolstered by improvements in transportation infrastructure such as SLEX, CAVITEX, and CALAX. These enhancements make the area more accessible and will further drive economic activity. Ongoing construction of residential, commercial, and industrial facilities within the township is creating thousands of jobs, contributing to the local economy’s vitality.

The UNIQLO logistics facility, in particular, highlights the importance of real estate in supporting industrial operations. FNG, in partnership with Fast Retailing Philippines, designed the hub as a human-centric and environmentally sustainable facility that integrates advanced technologies and green practices to optimize logistics operations.

Riverpark’s strategic location near key infrastructure projects and the Cavite Economic Zone enhances its appeal as a prime investment destination.

FNG’s overall developments include a mix of horizontal and vertical residential projects, commercial lots, offices, and institutional facilities. The company’s mixed-use township approach is not only shaping the physical landscape but is also creating self-sustaining communities that foster economic growth and social interaction.

For more information visit FNG.ph.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.

Water-energy efficiencies: Catalyst to semiconductor sustainability

REUTERS

By Eric Lai

FUELED by the explosive growth of emerging markets like AI and electric vehicles, the semiconductor industry — which manufactures the essential materials that power these technologies — is poised to grow into a massive trillion-dollar industry by 20301.

At the very heart of this growth lies Southeast Asia, as markets in the region actively pursue opportunities to capture higher value-add positions within the burgeoning global industry. In fact, the Philippines’ semiconductor market is expected to grow up to 15% annually2, bolstered by the government’s strategic push to strengthen its capabilities in this sector.

However, despite the semiconductor industry’s immense potential for economic growth, its notorious thirst for water and energy stands at direct odds with Southeast Asia’s climate ambitions, wherein most countries across the region have committed to carbon neutrality by 2050.

How can the growth of semiconductor manufacturing be reconciled with these climate targets to achieve balanced and sustainable long-term development?

THE WATER-ENERGY NEXUS IN SEMICONDUCTOR MANUFACTURING
Intensifying climate events around the globe have brought the semiconductor industry’s immense resource consumption to the fore. Growing concerns about global water shortages have placed the sector’s water usage under scrutiny, while its substantial electricity consumption remains a focal point of concern.

However, discussions about these resources tend to occur in silos, with limited focus on the water-energy nexus — which refers to the interdependent relationship between both resources. For instance, considerable energy is required to treat and move water in semiconductor fabrication plants (fabs); conversely, water is critical for the energy generation processes that power these facilities.

To truly drive sustainability in this sector, there needs to be a concerted effort to move beyond traditional energy reduction to target the energy-intensive water processes central to the water-energy nexus.

Firstly, all fabs require mammoth volumes of ultra-pure water (UPW) to cleanse their silicon chips. In fact, estimates show that an average fab uses about 37.8 million liters of UPW daily to ensure the quality of their output3. To obtain UPW, however, fabs undergo a rigorous purification process that consists of energy-intensive steps like reverse osmosis and distillation, which contribute significantly to the plant’s overall energy consumption.

Furthermore, producing high-quality chips demands a significant cooling capacity. This involves effectively managing the flow of water throughout the manufacturing process. It’s not just the cleanrooms that require strict control over temperature, pressure, and humidity. Many processes and dedicated machines within the plant generate a substantial amount of heat during operation, for instance, in wafer fabrication, etching, and deposition. Cooling towers play a crucial role in regulating the temperature of the circulating cooling water for these processes and machines, ensuring optimal performance and efficient heat dissipation.

A THREE-PRONGED APPROACH TO ACHIEVING WATER-ENERGY EFFICIENCIES
When optimizing equipment processes, engineers typically focus on overall equipment effectiveness (OEE)4, which looks at an equipment’s overall productivity and efficiency — an approach that tends to deprioritize energy consumption metrics. To drive water and energy efficiencies, there first needs to be a mindset shift that encourages prioritizing energy efficiency from the get-go, rather than focusing solely on OEE.

For existing plants, conducting a comprehensive, measurement-based analysis of current processes and performance can uncover the critical areas that offer the most potential for energy savings, ensuring that any changes enacted are targeted and effective in driving impact.

Additionally, digital solutions are a pivotal avenue for manufacturers to attain operational efficiencies, as they enable us to understand demand and intuitively manage supply, ensuring we only use what we need. The good news is that these technologies already exist — manufacturers just need to make the switch to achieve improved water and energy efficiencies.

For instance, Grundfos has helped manufacturers across various industries optimize their cooling systems and towers by implementing real-time monitoring and automating adjustments to pump speeds and fan operations, resulting in up to 60% energy savings and 20% reduction in water loss.

Ultimately, creating more water and energy-efficient processes are not just beneficial for sustainability purposes; they are also a strategic business priority that allow companies to minimize operational costs and align with the growing demand for environmentally responsible supply chains.

By prioritizing environmental impact as they seek to establish themselves in the global semiconductor arena, Southeast Asian countries can find a way to harmonize their economic ambitions with their climate goals to chart the path for a sustainable future.

1 McKinsey (April 1, 2022). The  semiconductor decade: A trillion-dollar industry  https://www.mckinsey.com/industries/semiconductors/our-insights/the-semiconductor-decade-a-trillion-dollar-industry

2 YCP Solidiance (February 2024). Accelerating Growth of the Philippine Semiconductor Sector https://ycpsolidiance.com/article/semiconductor-philippines-market-trends-2024#:~:text=The%20Philippine%20Semiconductor%20Industry%20is%20expected%20to%20grow%2010%2D15,demand%20for%20semiconductors%20and%20electronics

3 FDI Intelligence (Aug. 10, 2023). Thirsty chip facilities under scrutiny in water stressed areas https://www.fdiintelligence.com/content/feature/thirsty-chip-facilities-under-scrutiny-in-water-stressed-areas-82810

4 McKinsey  (May 17, 2022). Sustainability  in semiconductor operations: Toward net-zero production https://www.mckinsey.com/industries/semiconductors/our-insights/sustainability-in-semiconductor-operations-toward-net-zero-production

 

Eric Lai is the senior regional sales director for industry APAC at Grundfos.

BDO backs sustainable and responsible growth for PH conglomerates

MRT-7 is expected to significantly enhance urban mobility in the country.

BDO Unibank, Inc. (BDO) actively partners with leading Philippine conglomerates like San Miguel Corporation (SMC) to promote growth that benefits the economy, society, and environment.

SMC, a key player in the Philippine economy and the only Filipino company to make it to the top ten of Fortune Magazine‘s first-ever Southeast Asia 500 list in 2024, owns market-leading businesses — from food and beverage to infrastructure, packaging, energy, fuel and oil, cement, and property — contributing about 6% to the national GDP.

Committed to sustainability and nation-building, SMC drives innovative initiatives across its various businesses. Under its slogan “Your World Made Better,” SMC focuses on projects that help protect the environment (kalikasan), support communities (kalinga), and drive economic progress (kasaganahan).

BDO served as the anchor lender to San Miguel Global Power Holdings Corporation’s (SMGP) Battery Energy Storage System (BESS), one of the largest integrated battery energy storage systems globally. SMGP’s 32 BESS facilities nationwide provide a combined capacity of 1,000 MWh, enhancing power quality and stability by addressing the intermittency of renewable energy sources. This supports the development of other renewable sources, aligning with the Philippines’ goal of generating 35% of its energy from renewable sources by 2030.

A BESS technician in Masinloc, Zambales diligently performs comprehensive maintenance on facilities and equipment to ensure efficient operations.

SMC is also at the forefront of major infrastructure developments like the Metro Rail Transit 7 (MRT-7), designed to ease Metro Manila’s traffic and cut down commuter travel time. As one of the 194 high-impact Public-Private Partnership projects under the administration’s “Build Better More” program, this project, with BDO as the primary lender, is expected to vastly improve mass transportation in the country. 

Other projects financed by BDO, including the Metro Manila Skyway (MMS) Stage 3 and the Tarlac Pangasinan La Union Expressway (TPLEX), create jobs and stimulate economic activities, showcasing BDO’s role in advancing the country’s infrastructure. 

BDO Capital was honored at The Asset Triple A Sustainable Infrastructure Awards for its key role in financing major projects. The company received the Renewable Energy Deal of the Year award for leading and organizing the PHP 40-billion Syndicated Term Loan Facility for San Miguel Global Power’s Battery Energy Storage System (BESS) project. It also earned the Transport Deal of the Year award for its role in arranging and managing the PHP 100-billion Syndicated Term Loan Facility for SMC’s MRT-7 project. In addition, BDO Capital recently won the Best Project Finance Deal and Deal of the Year for SMC’s MRT-7 Project Finance Loan at the 9th Investment House Association of the Philippines (IHAP) Awards 2024.

BDO’s ongoing support is crucial as SMC pursues environmental targets alongside its socioeconomic goals. The company aims to achieve a fully sustainable supply chain by 2040 and net-zero emissions by 2050.

“At SMC, we are committed to building a future where the environment, our people, and the economy collectively thrive. With BDO’s invaluable support, we are able to advance projects that are at the forefront of nation-building, ensuring a better future for every Filipino. We are grateful for partners like BDO, who share our vision for a sustainable, progressive Philippines for all,” SMC Chairman and CEO Ramon S. Ang said.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.

1...1,2691,2701,271...12,798Page 1,270 of 12,798
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube