Sangley Point airport has location edge, but reclamation costly — official

December 9, 2017 | 12:02 am

AN AIRPORT in Sangley Point, Cavite would have a proximity advantage over Bulacan should the Ninoy Aquino International Airport (NAIA) be permanently closed, but the government will have to deal with reclamation issues, a transportation official said.

Department of Transportation (DoTr) Undersecretary for Aviation Manuel Antonio F. Tamayo said that Sangley and Bulacan, which are proposed as sites for a new gateway to replace the congested NAIA, are feasible and while Sangley is much closer to Metro Manila, major reclamation of Manila Bay will be needed.

NAIA, which has a capacity of 30 million passengers annually, already serves around 42 million.

“In terms of proximity, assuming that the intention is close down the existing NAIA, Sangley is definitely at an advantage because of its distance but it is going to be more expensive because you would have to reclaim,” Mr. Tamayo told reporters on the sidelines of the signing of a memorandum of agreement (MOA) between the DoTr and housing agencies.

“It is just that Bulacan is way ahead in terms of the submissions. They have now the original proponent status. It is now pending with NEDA. So they are ahead.”

San Miguel Corp. (SMC) in October obtained original-proponent status for its unsolicited proposal to build a P700-billion international airport in Bulacan. The proposed project will rise over 2,500-hectares.

Construction of the new airport is expected to be completed in six years after approval by the government.

The DoTr has forwarded the proposal to the National Economic and Development Authority (NEDA) Board for evaluation and final approval. Once approved, it will undergo a Swiss challenge.

The agency likewise previously said it is open to a proposal for developing Sangley Point, currently a naval and air base.

All-Asia Resources Reclamation Corp. (ARRC) plans to build an international airport, seaport, and mixed-use development on reclaimed land off the coast of Sangley Point.

With various proposals pending, the government still has to decide what to do with NAIA.

The government is also preparing Clark International Airport (CIA) as an alternative gateway. The bidding process is ongoing for the upgrade and construction of a new terminal, and bidding for the operations and maintenance will also commence soon. Simultaneously, the government is also evaluating the proposal of Filinvest Development Corp. (FDC) and JG Summit Holdings, Inc. (JGS) consortium for the long-term development of CIA.

International Air Transport Association (IATA) director-general Alexandre de Juniac has said that Clark is “too far” to be an alternative gateway to NAIA. He said that ideally, an alternative airport should be at most 60 kilometers away from the main city or metropolis. Clark is nearly 100 kilometers from Manila. — Patrizia Paola C. Marcelo

Basic Energy eyes up to 20% stake in Japan’s biomass facility

December 9, 2017 | 12:02 am

By Victor V. Saulon, Sub-editor

BASIC Energy Corp. has signed an investment term sheet with a Japanese company for the possible acquisition of at least a 10% stake in a 25-megawatt (MW) biomass power plant in Japan, the company told the stock exchange on Friday.

Vintage Holding Japan Co. Ltd. (VHJ), the Japanese firm, holds full executive rights over the facility in Karatsu City, Saga Prefecture, Japan that is wholly owned and controlled by Innocent Biomass Power GK (IBP).

Basic Energy said the term sheet grants it the exclusive right “to negotiate and finalize the terms of the investment with VHJ. A refundable deposit will be made to begin the due diligence process on IBP and the project.”

The term sheet was approved by Basic Energy’s board of directors during a meeting on Oct. 26, 2017.

“Under provisions of the term sheet, Basic Energy will strive to complete the DD (due diligence) process in 60 days, but may ask for an extension subject to IBP’s consent,” Basic Energy said.

“Upon favorable results of the DD process on IBP and the project, the covering shareholders agreement will then be signed on or before June 30, 2018, during which time Basic Energy can opt to increase its planned investment to up to 20%,” it added.

Basic Energy’s possible participation in the biomass project is in line with its thrust to expand its renewable energy portfolio in the Philippines and abroad.

The signing follows a similar development last month when Basic Energy signed a term sheet with a Thai firm for the possible acquisition of at least a 12.5% stake in two companies that had been awarded the engineering, procurement and construction (EPC) contract of a solar farm in Myanmar.

The company signed the investment term sheet with Vintage Engineering Public Co. Ltd. (VTE) of Thailand, which owns Vintage EPC (VEPC) and Vintage International Construction Co. Ltd. (Vinter).

The document covers the non-binding intention of the company to invest in VEPC, its successor or designated assignee, and Vinter.

On Friday, shares in Basic Energy rose 1.36% to 22.3 centavos each.

BDO raises $150-M in first ‘green bond’ float

December 9, 2017 | 12:02 am

BDO Unibank, Inc. (BDO) completed on Friday the issue of “green bonds” to the World Bank’s private investment arm International Finance Corp., to help the bank expand lending to climate change-mitigation projects.

In a disclosure, BDO raised $150 million, which is intended to finance renewable energy projects, green buildings, and energy-efficient equipment, among others, from sole investor IFC.

This is the first green bond issued by a commercial bank in the Philippines, as well as IFC’s first green bond investment in a financial institution in East Asia and the Pacific.

The bank said that the deployment of the proceeds is expected to help save 93,000 tons of carbon emissions annually by 2022, and will contribute to the Philippines’ goal to reduce carbon emissions by 70% by 2030.

“Climate change is a very real concern in the Philippines. It is one of the most vulnerable countries globally to the impact of such changes. This bond demonstrates our corporate commitment to come up with business solutions to address the challenges of sustainability,” BDO president and chief executive officer Nestor V. Tan said.

“This also aligns with our goal of growing BDO’s climate business, and ultimately, fostering the nascent climate finance market in the country. We are glad to partner with IFC, a global expert in green finance,” he added.

IFC Director for East Asia and the Pacific Vivek Pathak said: “The issuance is an example of BDO’s leadership in developing climate finance in the country. By building on our long-term partnership with BDO, we aim to create a vibrant green bond market in the country and stimulate private sector investment in renewable energy and energy efficiency.”

“Further, by setting the standard and the benchmark for green bonds issued in accordance with the Green Bond Principles which IFC helped develop, we hope to pave the way for other issuers and investors to access financing through this product, at a time when demand for green infrastructure and other sustainable investments are high,” added Mr. Pathak.

The issuance is a culmination of an advisory engagement on sustainable energy finance between IFC and BDO that started in 2010, and helped establish sustainable energy finance as a core part of the bank’s sustainability strategy.

The bank said that it expanded its climate-smart portfolio from zero to over $500 million, which made it the country’s market leader in climate financing.

IFC is a global development institution belonging to the World Bank Group.

It is one of the world’s largest backers of climate-smart projects for developing countries. Since 2005, IFC has invested $18.3 billion in long-term financing on its own account, and mobilized another $11 billion through partnerships with investors for climate-related projects.

IFC has issued a total of $7.25 billion in green bonds in 12 currencies, which are all part of a its global strategy to develop the green bond asset class in emerging markets.

BDO reported a net profit of P20.4-billion in the nine months to September, up 5%.

BDO closed at P148 on Friday, up P2 pesos or 1.37%. — Elijah Joseph C. Tubayan

After declaring Reds ‘terrorists,’ Duterte open again to talks

December 9, 2017 | 12:02 am

PRESIDENT Rodrigo R. Duterte on Friday, Dec. 8, said his labor secretary, Silvestre H. Bello III, may revive peace talks with communist rebels “at some other time,” provided that their armed wing, the New People’s Army (NPA), will stop imposing revolutionary taxes.

He expressed anew this openness towards reviving the talks, three days after issuing Proclamation No. 374, which officially brands the rebels as terrorists, and two weeks after Proclamation 360 which formally ended the government’s peace negotiations with the Communist Party of the Philippines-New People’s Army-National Democratic Front (CPP-NPA-NDF).

Speaking at the 84^th anniversary of the Department of Labor and Employment in Malolos, Bulacan, Mr. Duterte said insurgency will not end without the peace talks, but the rebels “have to agree to stop…impos(ing) revolutionary tax.”

He added: “Ako na ang mag-gastos but you have to stop. Kasi ang problema, ang mga negosyante o ‘yang mga sundalo, they cannot just, you know, sabihin sa ‘kin, ‘Mayor, ‘wag mo kaming pigilan diyan kasi eh inuubos na kami.” (I’ll just be the one to spend but you have to stop. Because the problem is, the businessmen, the soldiers, they cannot just, you know, they’ll tell me, Mayor, don’t stop us because we’re being finished.)

“So I have to stop the talks with the NPAs. Bebot (Mr. Bello) and company can always resuscitate it at some other time. ‘Yan lang ang requirement ng Pilipino (That’s the only requirement of the Filipino),” Mr. Duterte also said.

The president said that if there is an open rebellion in Mindanao, the ISIS can enter the country.

For his part, Armed Forces of the Philippines (AFP) spokesperson Maj. Gen. Restituto F. Padilla Jr. laid the blame on the failure of the talks squarely on the insurgents — whom he also accused of exploiting the talks to step up their attacks and even recruiting the indigenous peoples (IPs) to their side.

In his press briefing at Malacañang on Friday, Mr. Padilla Jr. cited the combined threat of the NPA as well as the various terrorist groups in Mindanao’s western area in explaining the AFP’s recommendation to extend martial law in this southernmost region of the country.

Martial law’s enforcement until Dec. 31 will need congressional approval anew for a second extension, if sought by President R. Duterte upon the recommendation of both the AFP and the Philippine National Police.

“(I)ncreasing violence initiated by the Left is something to watch out for and something that we have to prepare for and confront. That’s part of the reason why martial law may be needed to cover other areas where potential terrorists are in hiding,” Mr. Padilla said in the briefing, transcripts of which the Palace sent to the media.

He cited the considerable rise in “violent incidents perpetrated by the NPA,” attributing to the group “a total of 617 incidents for the whole of the year(,) 382 of them…committed in the Eastern Mindanao Command area and 18 in the Western Mindanao Command area.”

“The Left themselves did not want to pursue the ceasefire and just wanted to fight than talk,” Mr. Padilla said, adding that “it was during that period (of the peace negotiations) when many of the violent incidents reached its height.”

He also accused the communists of exploiting the IPs.

“So, sa bawat apat na armadong miyembro ng NPA, tatlo dun lumad. ‘Yan ay batay sa aming pag-aaral,” Mr. Padilla said. (So, for every four armed members of the NPA, three of them are [from the] lumad [indigenous peoples]. This is based on our observations.)

He added: “Ang rason kaya ‘yang bilang na ‘yan ay nakikita natin ay dahil mas mainam nilang nare-recruit ang mga katutubo natin dahil mas madali nilang lokohin.” (The erason why we’ve come to that figure is because it’s better for them to recruit our natives because it’s easier for them [the NPAs] to fool.)

“Karamihan sa ating katutubo, maaaring hindi masyadong mataas ang kanilang pinag-aralan at nasa kabundukan sila at malayo sila sa kabihasnan kaya hindi sila masyadong sanay sa mga galaw na maaaring ginagawa nitong mga Kaliwa.” (Many of our natives perhaps have not gone that high in their education, and they’re in the mountains and far from civilization, that’s why they’re not accustomed to the movements probably being made by the Left.)

“Kaya mas mainam nilang nare-recruit itong mga vulnerable na katutubo natin. (So it’s better for them to recruit these vulnerable natives of ours.) So that is what we have in the statistics now.”

“They will try to entice, they will make our indigenous peoples in the mountain go down to the city centers as evacuees and confront local governments and national governments and give demands, which they have been doing ever since.”

Mr. Padilla also emphasized that an encounter in Batangas province late last month between government forces and NPAs, which led to 15 of the latter killed, including a number of activist youths, “is a legitimate military operation.”

“Now, all the incidents that we have had by far with the NPA have been legitimate and deliberate military operations that have targeted known members of the NPA,” he said.

“And if the CHR (Commission on Human Rights) wishes to investigate, yes, by all means, please do so. So that the truth will come out,” he added. — with Minde Nyl R. Dela Cruz

Roque to ICC: Don’t be a venue to destabilize governments

December 9, 2017 | 12:01 am

PRESIDENTIAL spokesperson Harry L. Roque, Jr. told an assembly of the International Criminal Court (ICC) on Thursday, Dec. 7, that it should “resist attempts by some sectors to treat the Court as a venue to pursue political agenda to destabilize governments and undermine legitimate national authorities.”

Citing also the principle of “complementarity” between the ICC and its party states, Mr. Roque also warned that a “violation of (this) very basis for our consent…will constrain us to reassess our continuing commitment to the Court and the Rome Statute,” the 1998 treaty on which the ICC was established.

Mr. Roque delivered his remarks at the United Nations Headquarters in New York on the occasion of the General Debate of the 16^th Assembly of States Parties to the Rome Statute of the International Criminal Court.

“The Philippines reaffirms its support for the principles of the Rome Statute and the Court, including efforts to have candid dialogue and consultations to address allegations of inequality and unfairness in the work of the Court,” Mr. Roque said in his speech, adding:

“In reaffirming our commitment to the Rome Statute and the Court, we are also reminded that the Court is a court of last resort.”

“The States Parties to the Rome Statute envisioned a court with a complementary, not primary, jurisdiction for the prosecution of the persons most responsible for the most serious crimes of international concern.”

“Ongoing national proceedings in relation to these crimes must therefore be respected, consistent not only with our sovereign right and responsibility to prosecute crimes committed in our territory, but also with the principle of complementarity that has been the basis for the Court’s mandate.”

Mr. Roque said the Philippines “anchored its consent to be bound by the Rome Statute on the principle of complementarity.”

“(A)ctions…that politicize and dilute the Court’s mandate,” he said, “ultimately undermine national efforts to punish and prosecute crimes covered by the Statute and derail current efforts to achieve universality of the Rome Statute.”

Mr. Roque added that the recent siege in Marawi City “serves as a crucial reminder” of the “intimate and indisputable link between terrorism and the illegal drug trade.”

The spokesperson also said the Philippines is “prepared to act, as we have always so acted, to bring to bear our national criminal justice system upon those who violate our laws and pose a threat to our national security.”

In its response to Mr. Roque’s speech, Human Rights Watch said in a statement: “(Mr.) Roque is correct that under the ICC’s statute, the court may only step in when national authorities are unable or unwilling to do so.”

“Yet his assertion that the Philippine government has been willing and able to investigate those deaths has simply not been true. The government has made no genuine efforts to seek accountability for drug war abuses. There have been no successful prosecutions or convictions of police implicated in summary killings despite compelling evidence of such abuses,” the New York-based advocacy group also said. — with Minde Nyl R. Dela Cruz

South Korea offers to train ASEAN countries in tax administration

December 9, 2017 | 12:01 am

SOUTH KOREA has offered to host the Association of Southeast Asian Nations’ (ASEAN) training program for tax policy and administration, the Department of Finance (DoF) said in a statement.

This was after “substantial progress” was made on regional taxation agreements among the 10-member states, during the ASEAN Forum on Taxation-Working Group (AFT-WG) on Oct. 24-25 in Panglao, Bohol, the body’s second meeting this year.

The initiatives include a strategic action plan and a set of annual priorities to move ahead on harmonizing the withholding tax rates among the ASEAN member-states and the exchange of information and a training program for tax policy and administration in the region.

Finance Undersecretary Gil S. Beltran said that the Kookmin Institute of South Korea offered to host and shoulder the costs of the training program.

The Philippines in 2016 had a tax effort of 13.7%, representing tax collections as a percentage of gross domestic product. This is only half of the 34.3% average in OECD (Organization for Economic Co-operation and Development) countries.

The Philippines chairs the AFT until 2019, and will conduct the next meeting on March 2018 to discuss results of global financial advisory firm Deloitte’s proposed study on the withholding tax structure in ASEAN.

Also expected to be discussed in the meeting are the regional bloc’s assessment of the training by the Kookmin Institute, and the progress on the completion of the double-taxation agreements.

The AFT serves as platform to address tax-related impediments to regional economic integration as well as to support regional dialogue on taxation issues.

Current efforts of the group include the establishment of the network of bilateral agreements on avoidance of double taxation. — Elijah Joseph C. Tubayan

Bourse slips back above 8,300 line on bargain-hunting, tax reform optimism

December 9, 2017 | 12:01 am

THE PHILIPPINE STOCK EXCHANGE Index (PSEi) ended the week higher on bargain-hunting, with sentiment buoyed by progress made in reconciling the House of Representatives’ and Senate’s tax reform legislation at the bicameral conference committee stage.

The benchmark index closed at 8,304.70 on Friday, up 129.77 points or 1.59%, while the all-shares index finished 4,858.86, up 58.27 points or 1.21%.

The PSEi last ended in 8,300 territory last Nov. 27, finishing 8,361.69.

Week-on-week, the index gained 1.97% on the back of Friday’s broad-based rally.

“The Index finished the week strong today after 27 out of the 30 stocks rose as investors sought stocks that were oversold in the past few days. Index heavyweights such as SMPH and ALI have found support levels above P35 and P41 per share respectively,” Jervin S. de Celis, equities trader at Timson Securities, Inc., said in a text message of SM Prime Holdings, Inc. and Ayala Land, Inc.

“Ayala Corp. and URC (Universal Robina Corp.) surged well today after a breakout from short-term downtrend lines. I think market sentiment was buoyed mainly by cheaper prices, with bargain-hunting in stocks that have been steadily keeping above their support levels.”

RCBC Securities, Inc. said in its Dec. 8 Stock Market Weekend Recap that “[t]he PSEi joined its regional peers in a strong market rally today”, while Luis A. Limlingan, managing director of Regina Capital Development Corp. said in a mobile phone message that “[t]he Philippine market tried to establish new trading ground breaking past 8,200 as part of the Christmas rally alongside regional peers.”

Wall Street itself finished stronger on Thursday, with the Dow Jones Industrial Average and the the S&P 500 Index each gaining 0.29% and the Nasdaq Composite Index closing up 0.54%.

Most of Asia joined the rally, with Japan’s Nikkei 225 and TOPIX index, Hong Kong’s Hang Seng Index, South Korea’s KOSPI, Jakarta Composite Index and the MSCI AC Asia Pacific gaining 1.39%, 0.98%, 1.19%, 0.08%, 0.40% and 0.41%, respectively.

RCBC Securities said further that gains by the House and Senate sitting in bicameral conference in harmonizing their conflicting provisions provided lift to the market. “It may also have helped that Congress expressed confidence that they will be able to reconcile the House and Senate versions of the tax reform bill by Monday and have already agreed on a compromise excise tax on sugar-sweetened beverages, which was closer to the lower rate proposed by the Senate,” RCBC Securities, Inc. said in its report.

Senator Juan Edgardo M. Angara, who heads his chamber’s Ways and Means committee, had said on Thursday that the bicameral conference committee harmonizing the Tax Reform for Acceleration and Inclusion versions from the two chambers had by that time agreed on “85-90%” of the legislation.

Most sectoral indices rose except for mining and oil, which closed at 11,482.37, down 213.36 points or 1.82%.

Financials closed at 2,110.33, up 24.13 points or 1.15%; industrials at 11,015.32, up 182.49 points or 1.68%; holding firms at 8,425.88, up 144.88 points or 1.75%; services at 1,605.48, up 6.20 points or 0.38% and property at 3,867.80, up 68.49 points or 1.80%.

Friday’s list of 20 most actively traded stocks showed those that gained led by Universal Robina Corp., which added 5.88% to P144 apiece; GT Capital Holdings, Inc., which went up 3.98% to P1,175; JG Summit Holdings, Inc., which increased by 3.68% to P69; Ayala Corp., which rose by 3.00% to P1,030 and Ayala Land, Inc. which climbed 2.14% to P43 each.

Those on the same list that lost were led by Rizal Commercial Banking Corp. which ceded 2.77% to finish P54.50 apiece and Semirara Mining and Power Corp. that dropped 2.76% to end P36.95 each.

A total of 1.02 billion shares worth P6.703 billion changed hands, compared to Thursday’s 877.69 million shares worth P5.946 billion.

Stocks that gained outnumbered those that lost 121 to 66, while 50 others were unchanged.

Offshore investors remained predominantly sellers for the sixth straight trading day, though Friday’s P37.284-million net foreign selling was the smallest amount in that period. — P. P. C. Marcelo

PetroEnergy’s geothermal project cleared for WESM

December 9, 2017 | 12:01 am

By Victor V. Saulon, Sub-editor

PETROENERGY Resources Corp. on Friday said its geothermal power unit had secured approval to participate in the wholesale electricity spot market (WESM), paving the way for its commercial operation.

Philippine Electricity Market Corp. (PEMC), which operates the spot market, gave its nod on Dec. 7, 2017 for Maibarara Geothermal Inc. (MGI), which sought the registration of its 12-megawatt (MW) expansion of its geothermal facility in Sto. Tomas, Batangas.

PEMC earlier included Maibarara-2 in its market network model, allowing the facility’s dispatch to be accurately monitored in the spot market.

“The completion of these two critical WESM and grid connection requirements is a significant milestone for MGI as these are technical prerequisites for eventual commercial operations.” MGI President F. G. Delfin, Jr. told the stock exchange.

MGI is a joint venture of PetroGreen Energy Corp. with a 65% stake, Phinma Energy Corp. with 25%, and PNOC Renewables Corp. with 10%. PGEC is the renewable energy holding company of publicly listed PetroEnergy.

Dave P. Gadiano, PetroGreen head of energy trading, said the WESM registration of Maibarara-2 clears the way for the facility to export power to the grid during the commissioning stage.

“The testing and commissioning of Maibarara-2 is estimated to start by middle of December. Export of power to the grid is expected soon after commissioning starts,” he said in a statement.

PetroGreen’s power output comes from three renewable energy plants — the 20-MW Maibarara-1 geothermal plant in Sto Tomas, the 36-MW Nabas-1 wind project in Aklan, and the 50-MWDC Tarlac-1 solar facility in Tarlac City.

MGI’s expected commissioning of the Maibarara-2 unit will bring the field’s total gross capacity to 32 MW. Maibarara-1 started commercial operation on Feb. 8, 2014.

The recent PEMC approvals came after MGI successfully installed and tested, with power grid operator National Grid Corp. of the Philippines (NGCP) the remote terminal unit and SCADA (supervisory control and data acquisition) system of Maibarara-2 on Nov. 15.

On Nov. 18, MGI completed with Japan’s Fuji Electric Co., Ltd., the target plate testing of Maibarara-2’s steam, a pre-commissioning activity in which the quality of the steam that will pass through the turbine blades is assessed.

Pedro G. Callos, MGI steamfield manager, said test had shown that the supply steam for Maibarara-2 complies with Fuji Electric’s standards.

On Friday, shares in PetroEnergy gained 0.67% to P6.04 each.

Peso stronger amid progress on tax reform

December 9, 2017 | 12:01 am

THE peso rose against the dollar on Friday on the back of positive developments in the tax reform program in Congress.

The peso ended the session at P50.50, strengthening from the P50.65 finish on Thursday.

The peso opened weaker at P50.69, the low for the session. The intraday high was P50.49.

Trading volume was little changed at $703.1 million, against $706.6 million on Thursday.

Traders said on Friday that the peso’s gains were mainly due to positive sentiment arising from the tax reform package making progress in the legislature.

“There was optimism that the tax reform bill will be reconciled by the bicameral committee by Monday,” a trader said in an email.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, concurred, saying that “positive market sentiment prevailed amidst the possible passage of the tax reform bill before the end of 2017.”

In a social media post on Thursday, Sen. Juan Edgardo M. Angara said the bicameral conference committee has agreed on at least 75 key provisions in the tax reform package.

“It seems that we are close to concluding this landmark measure,” Mr. Angara said.

Meanwhile, another trader noted that the dollar was also well-supported despite the peso’s momentum.

Mr. Asuncion said the the US currency benefited from measures to head off a US government shutdown. — Karl Angelo N. Vidal