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TDF yields pick up as offer still undersubscribed

By Melissa Luz T. Lopez,
Senior Reporter

YIELDS under the term deposit facility (TDF) picked up yesterday as the trimmed auction volumes went undersubscribed, even as banks wanted to park more funds under the month-long instruments offered by the central bank.

Total bids received for Wednesday’s auction stood at P139.271 billion, picking up from the P127.333 billion tenders the previous week, as market players crowded the 28-day term deposits.

Offers for the seven-day tenor dipped to P37.829 billion from the P42.918 billion tallied last Sept. 6 and lower than the P40 billion which the central bank placed on the auction block. As a result, the average yield climbed to 3.3484% from 3.3334%.

On the other hand, demand for the 28-day term deposits jumped to P101.442 billion yesterday from just P84.415 billion which banks wanted to leave with the Bangko Sentral ng Pilipinas (BSP) last week, but still short of the P110-billion offering.

Still, average rates sought by the lenders inched higher to 3.495% against last week’s 3.491% average, as the bids ranged within 3.45% to 3.5% which hovered close to the central bank’s ceiling rate.

The TDF is currently the central bank’s main tool to arrest excess money supply in the financial system, where banks can park idle funds — or those which are not deployed for loans or reserves — for a small return.

This week also marks the second time that the BSP auctioned off P150 billion in term deposits, lower than the P180 billion they offered over the last nine months.

Sought for comment, BSP Deputy Governor Diwa C. Guinigundo said market liquidity remains ample despite yesterday’s auction results, pointing out that rates moved generally sideways.

He added that while the market still prefers short-termed papers, some investors are now taking chances with longer tenors amid rising expectations that interest rates in the United States as well as global yields will remain steady for the rest of 2017.

“The situation continues to be very fluid. I believe the market still prefers short tenors although with the probability of a US Fed[eral Reserve] funds rate increase diminishing this year, some segments may test longer than 7 days,” Mr. Guinigundo said in a text message to reporters, noting that market appetite is also “bound to change” once the  government issues more bonds to support its P8.44-trillion infrastructure spending plan.

“What is important at this point is that the interest rate dynamics is broadly steady, interest rate volatility remains manageable,” the central bank official added.

The US Federal Reserve is getting more dovish in the face of weak inflation data, reducing the likelihood of a third rate hike this year, which traders already see as very unlikely.

Three Fed policy makers earlier this month expressed doubts about further rate hikes, with one influential policy maker calling for a delay in raising US interest rates until the Fed is confident inflation will rebound.

Mr. Guinigundo said last week that the monetary authority is considering to introduce new tenors for the TDF which may be announced later this year, with their decision to depend on the feedback from banks that vie for the weekly auctions.

Next week, the BSP will again try to sell P150 billion in term deposits, split between the seven-day tenor worth P40 billion and the 28-day papers worth P110 billion. — with Reuters

Modi, Abe get India’s first bullet train going as ties deepen

NEW DELHI — As India’s premier Narendra Modi and his Japanese counterpart Shinzo Abe prepare to break ground on the country’s first bullet train project Thursday, experts say the collaboration could signal a massive leap for its overburdened and deadly railways.

India’s colonial-era rail network carries some 22 million passengers daily, making it one of the busiest in the world. But it is also among the most dangerous.

A government report published in 2012 said almost 15,000 people were killed every year in rail accidents, describing the deaths as an annual “massacre” due mainly to poor safety standards.

Mr. Modi has pledged to invest billions of dollars to modernize the country’s crumbling railway infrastructure, which is plagued by delays, and the bullet train was one of his key election promises ahead of a landslide victory in 2014.

As New Delhi and Tokyo seek to forge closer ties to combat China’s growing regional influence, the project offers a diplomatic and economic boost.

The premiers will lay the foundation for the bullet train network in the western city of Ahmedabad — connecting Mr. Modi’s home state of Gujarat with India’s financial capital Mumbai.

Japan is a pioneer in high-speed rail transport — with its Shinkansen bullet train ranked among the fastest in the world.

With projected top speeds of up to 350 kilometers (217 miles) an hour — more than double the maximum speed offered by the fastest trains operating in India — it will reduce travel time between the two cities from eight hours to at most three-and-a-half hours.

The new train, which will have a capacity of 750 passengers, is also expected to be safer than the country’s creaking rail network, the world’s fourth largest by distance.

Mr. Modi recently replaced his railway minister after a series of derailments, including one last month in which at least 23 people were killed in northern Uttar Pradesh state. Nearly 150 died in a similar accident in November.

The agreement for the 508-kilometer network was signed in 2016, with plans to make it operational by December 2023.

Nearly 85% of the total project, which costs $19 billion, will be provided by Tokyo in soft loans, with repayment over 50 years.

‘BALANCE CHINA’S HEGEMONY’
Mr. Abe’s visit to Ahmedabad comes ahead of Mr. Modi’s 67th birthday on Sunday and many have dubbed it as part of his practice of “birthday diplomacy.”

The right-wing Hindu nationalist leader hosted Chinese President Xi Jinping in Gujarat on his birthday in 2014.

“India’s relation with Japan is designed to balance China’s hegemony,” Rajrishi Singhal, a Mumbai-based independent policy consultant, told AFP.

The two countries have close security ties and hold regular joint military exercises.

A proposed joint investment of billions of dollars in Africa is set to be the cornerstone of the relationship, Mr. Singhal said.

“India truly values the relationship with Japan and we look forward to further boosting our bilateral ties in a wide range of sectors,” Mr. Modi tweeted Tuesday.

There are more than 1,500 Japanese companies in India, including auto major Suzuki, the largest car maker in the country.

The success of Suzuki and others transformed India’s auto industry, which employs millions today.

Experts are pinning similar hopes on the bullet train project.

“Just like Suzuki changed India’s car market and brought millions of jobs, the bullet train will change the entire industry,” Mr. Singhal said. — AFP

EDC independent directors describe tender offer price as ‘fair’

INDEPENDENT directors of Energy Development Corp. (EDC) described as “fair” the voluntary tender offer price of P7.25 per share proposed by the local unit of a Dutch company to acquire around 31.7% of the Lopez-led renewable energy company.

EDC submitted to the stock exchange a statement signed by its independent directors that cited a report of an independent financial advisors and a separate fairness opinion report by another entity.

“After carefully considering the information available to the Board, including the information set out above, we are of the view that the tender offer price of PREHC (Philippines Renewable Energy Holdings Corp.) is fair,” said EDC independent directors Francisco Ed. Lim, Edgar O. Chua and Manuel I. Ayala.

The statement, issued to EDC shareholders, followed EDC’s disclosure on Aug. 3 that PREHC offered to buy through a tender offer between 6.6 billion and 8.9 billion common shares of the company.

PREHC is a wholly owned subsidiary of Philippines Energy Markets B.V., a company organized under the laws of the Netherlands.

The sale is expected to deliver proceeds of around P14 billion to First Gen Corp., EDC’s parent firm which entered in the agreement with the bidder.

EDC said the tender offer price represents a 21.8% premium over the last closing share price of P5.95 per share on Aug. 2. It is also 21.5% higher than the three-month and six-month volume weighted average price of the company’s shares.

PREHC had engaged Punongbayan & Araullo (P&A), an independent financial advisor and an affiliate of Grant Thornton, to give a fairness opinion on EDC even though a fairness opinion is required only for mandatory tender offers.

The advisor placed the range of value of EDC’s common shares that is fair from a financial point of view at between P5.97 and P7.11 per common share as of March 31, 2017. The tender office price is above that range.

EDC said it had also hired BPI Capital Corp. “to opine on the reasonableness” of the tender offer, the methodologies and approaches used by P&A.

It said BPI Capital “has expressed an opinion that… the various approaches and valuation methods applied by P&A in determining the fair value of EDC are reasonably appropriate.” It also said BPI Capital’s conclusion that “the computations carried out by P&A in the various valuation methods… resulted in values that are arithmetically correct.”

BPI Capital also said the P5.97 to P7.11 per common share of EDC is fair and that the P7.25 per share offer price offers a premium of 2% to 21% over P&A’s range of values.

Once complete, the deal will result in EDC continuing to be controlled by First Gen, as it would retain a 60% voting stake in the company.

“The tender offer provides First Gen with an opportunity to realize part of its investment in the country’s largest renewable energy company,” the holding firm previously said.

On Wednesday, shares in EDC closed 2 centavos or 0.29% up at P6.91 each, while those of First Gen added 32 centavos or 1.8% to close at P18.12 each.

EDC also told shareholders that PREHC will be owned and held by a consortium of investors comprising funds managed by Macquarie Infrastructure Management (Asia) Pty Ltd. and Arran Investments Pte Ltd., by up to 60% and 40%, respectively.

Red Vulcan Holdings Corp., a wholly owned subsidiary of First Gen, will not participate in the tender offer and will continue to hold the controlling interest in EDC.

First Gen and its wholly owned subsidiary Northern Terracotta Power Corp. are entitled to, and will participate in the tender offer. They will tender a total of 1,978,119,700 common shares held by them, which collectively amounts to 10.6% of EDC. — Victor V. Saulon

P33.5-B ARMM budget hurdles House, set for Senate committee deliberation on Sept. 18

THE P33.469-billion proposed budget of the Autonomous Region in Muslim Mindanao (ARMM) for 2018 was approved late Tuesday by the House of Representatives and is set for committee-level deliberation at the Senate on Monday, Sept. 18. “We are proud of what we have accomplished in the ARMM and we have answered all queries sufficiently during the pre-plenary hearings. The House has shown yet again that it trusts the regional government,” Gov. Mujiv Hataman said in a statement. ARMM’s economy rebounded by 0.3% in 2016 from a contraction of 0.4% the previous year, boosted by expansions in both the industry and services sectors. Agriculture, hunting, forestry, and fishery continued to be the biggest contributor to the economy at 56.3%, followed by services at 38% and industry at 5.7%. — BW Mindanao Bureau

NFA looking at Q1 rice imports to minimize domestic price impact

THE National Food Authority (NFA) hopes to time rice imports for early 2018, in order to stabilize inventories after the rainy season, with an eye towards not distorting prices realized by domestic rice farmers.

“Early next year we may make that recommendation. It’s the pre-harvest period so the local market price will not be affected,” NFA Grains Marketing Operations Director Rocky L. Valdez said.

The NFA has said it may need to import 580,050 metric tons (MT) of rice in 2018.

The volume, according to Mr. Valdez, is the projected “production shortfall” for next year and will help buoy rice stocks after the rainy season.

He added that the volume may be imported under a government-to- private scheme as the NFA Council proposed in the last rice importation round opened July this year in which the 250,000 MT volume was divided into eight lots.

“It may come as one time or in tranches,” he added, noting that the latter is the more viable option in order for government to schedule deliveries optimally.

Mr. Valdez said that the plan has yet to be elevated to the NFA Council, the governing body that has the final say on rice import decisions.

This year, the government ordered 250,000 MT from six bidders, mostly from Vietnam, to supplement the rice supply during the lean months from July to September.

The shipments are expected to arrive in tranches during the lean months; 120,000 tons by last month and the remaining 130,000 tons in September.

Also, last month, the government opened up the private-sector importation channel for 805,200 MT of rice.

As of Sept. 11, Mr. Valdez said the NFA has received about 30 applications, mostly from farmers cooperatives, amounting to 200,000 MT.

The deadline for the submission of letters of intent to import is on Sept. 27. — Janina C. Lim

Apple unveils iPhone X in bid to regain innovation lead

CUPERTINO, CALIFORNIA — Apple, Inc. on Sept. 13 rolled out its much-anticipated iPhone X, a glass and stainless steel device with an edge-to-edge display that Chief Executive Tim Cook called “the biggest leap forward since the original iPhone.”

The launch contained few surprises, with leaked details on the phone and other products including an updated Apple Watch proving largely accurate. But the iPhone X’s $999 price still raised eyebrows, and its Nov. 3 ship date prompted questions about possible supply constraints ahead of the holiday season.

The iPhone X has wireless charging, an infrared camera and hardware for facial recognition, which replaces the fingerprint sensor for unlocking the phone. The home button is also gone, and users instead tap the device to wake it up.

The screen on the iPhone X is about the size of the current iPhone 7 plus, though the phone is smaller. It features richer colors thanks to a new screen technology called OLED that other vendors are also rolling out.

But in an embarrassing moment for Apple senior vice-president Craig Federighi, the face ID unlocking did not work on his first attempt during the on-stage presentation.

PHONES AT MANY PRICES
Apple executives also stressed the phone’s capabilities in augmented reality, in which digital images are overlaid on the real world. But their remarks suggested that the phone does not have the full panoply of 3D-sensor chips that some had expected.

Apple also introduced the iPhone 8 and iPhone 8 Plus, which resemble the iPhone 7 line but have a glass back for wireless charging. The company said it was working on a new device, called the Airpad, that would charge all newer Apple products.

The wireless charging uses a standard called Qi, also used by Samsung Electronics Co. Ltd., which will likely solidify that technology as the industry standard.

The new phones all feature Apple’s first proprietary graphics processor, which provides greater speed, improved cameras and some features for augmented reality apps.

The company had previously used graphics chips from Imagination Technologies Group Plc, which put itself up for sale earlier this year after Apple said it would make its own technology.

Apple is moving to design more of the internal components of the iPhone, squeezing some suppliers but giving Apple control.

The cheapest of the iPhone 8 models have 64 gigabytes of memory, up from 32 gigabytes in previous models, and will sell for $699 and $799. Apple also noted that for budget-conscious shoppers, there is now a $349 iPhone SE, similar to the iPhone 5.

The bump-up in memory for the new phones should help suppliers of memory chips, and Apple is now angling to own a piece of the memory-chip business being sold by Toshiba Corp.

The new Series 3 watch will cost $399 and support a range of third-party apps.

Apple has never released numbers on watch sales, but analyst Gene Munster with Loup Ventures forecast the company would sell 26 million in 2018. — Reuters

Joint exploration prospects improve amid warming relationship with China — BMI

IMPROVING ties between the Philippines and China have increased the prospect for joint exploration in the resource-rich South China Sea, offering better prospects for local oil and gas output, a research firm said.

“Locating new crude oil and natural gas sources continues to be of paramount importance for the Philippines as output from its sole producing Malampaya field rapidly declines,” said BMI Research in its production outlook for the Philippine oil and gas sector.

“Improving bilateral ties with China increases the prospect for joint exploration in the potentially resource-rich South China Sea, and offer upside to our long-term oil and gas production forecasts,” the Fitch Group unit said.

It said finding new oil and gas sources is crucial for the country as the Malampaya gas and condensates field is near the end of its production cycle. The offshore Palawan gas project is expected to be depleted around 2022 to 2024, industry officials had said.

“With no new significant projects in the pipeline, the Philippines’ need to explore for additional oil and gas is clear,” BMI Research said.

Thus far, exploration in the country’s most prospective petroleum blocks, particularly those in the South China Sea has made minimal progress because of the maritime dispute with China.

“However, we believe improving bilateral ties between the two countries increase the chances of joint exploration in the disputed waters,” the research firm said.

It added that the view of its country risk team noted “greater scope for cooperation between Manila and Beijing” as President Rodrigo R. Duterte has taken a “more conciliatory approach towards China and the former’s growing need for energy.”

“The Philippines has repeatedly stated its openness to joint ventures in the area with foreign entities, provided that such activities comply with the Constitution of the Philippines,” it said.

The Constitution states that the exploration, development and utilization of Philippine marine wealth must be reserved for the exclusive use and enjoyment of Filipinos.

BMI Research said a breakthrough in the longstanding maritime impasse would allow companies such as PXP Energy Corp. to resume drilling in Service Contract 72’s Sampaguita gas discovery.

It said the 2011 gas find holds up to 4.6 trillion cubic feet of natural gas 115 million barrels of crude oil.

“This in turn, improves our outlook on the Philippines’ upcoming oil and gas licensing round,” it said.

In July, the Department of Energy said it was planning to hold in December the sixth Philippine Energy Contracting Round, or PECR 6, a competitive system of awarding service contracts for petroleum and coal prospective areas.

 “The round will include blocks in the disputed South China Sea, along with offshore blocks in the Sulu Sea, Palawan and those that did not receive offers under the previous licensing round,” BMI Research said.

“Although access to the Philippines’ fast-growing consumer market may appeal to potential investors, the success of the licensing round will hinge on whether the country is able to diffuse geopolitical risks in the area,” it said.

“This is especially important with low oil prices weighing on firms’ appetite for high-risk, frontier exploration. These same risks have previously restricted interest in PECR 5, which only attracted three bids for the 11 oil and gas blocks that were offered,” it added. — Victor V. Saulon

Juami Tiongson relishes new role at NLEX Road Warriors

WHEN one door closes, another opens. Such is the case of Juami Tiongson, an up-and-coming point guard who nearly gave up playing professional basketball and embark in another career.

Last season, Mr. Tiongson, who was in the final year of his three-year deal with Blackwater, was bought out of the Elite.

“They already had four point guards. They even drafted Ael Banal,” Mr. Tiongson told BusinessWorld.

Mr. Tiongson wanted to continue playing in the PBA, but with no other takers, he brought his wares to AMA Computer College in the D-League. At 29, he felt this could be a make or break for him.

That changed until Mr. Tiongson got a call from the NLEX Road Warriors camp.

Under head coach Yeng Guiao, Mr. Tiongson was able to gain more confidence as he was given more opportunities to play. Proof of that was his steady plays as he became an instant contributor to the Road Warriors, who had made a turnaround in the Governors’ Cup, winning seven of their nine games to stay in contention for the top four.

Mr. Tiongson couldn’t be more thankful for the opportunity of a lifetime.

“I’m speechless. Not long ago, I was playing in the D-League along with the AMA players. Who would have thought? I nearly quit after what happened to me in the PBA. I’m thankful to coach Yeng (Guiao) and boss Ronald Dulatre for this opportunity. I would have quit basketball and do something else if it not for them. I don’t want to be stuck in the D-League at 29, until I got this opportunity,” added Mr. Tiongson.

With NLEX, Mr. Tiongson knows he has to compete with the minutes in the same way that he has competed with guards better than him, including Kevin Alas and Alex Mallari.

But the former Ateneo guard is ready for the challenge.

“It’s a big thing when you play them everyday in practice. You’re playing against one of the best guards in the PBA. When I went up against them in practice, my confidence gets higher as well. I’m thankful to coach Yeng because of this opportunity. If it weren’t for him I wouldn’t be here in the PBA. He always gives me chances. Whether I do bad or I do well, he always brought me back in the game. It raises my confidence,” said Mr. Tiongson.

Whether it’s garbage time or crucial situations, Mr. Guiao was able to utilize Mr. Tiongson more, giving the exposure he needs to toughen him up.

“I want to play my role. With coach Yeng, he’s not asking too much from his players. Mostly, play with a lot of heart, play with a lot of effort. When I’m in the court, I play with a lot of effort,” he added. — Rey Joble

Cathay Life Insurance buys more RCBC shares

TAIWAN-BASED Cathay Life Insurance Co. Ltd. raised its stake in Rizal Commercial Banking Corp. (RCBC) this month as it bought new shares worth P416.397 million, the bank announced yesterday.

In a disclosure to the Philippine Stock Exchange, the Yuchengco-owned lender said that Cathay Life’s stake is now at 23.35% from 22.71% last year.

This came after the Taiwanese firm bought additional shares in the bank on Sept. 6 worth P390.647 billion and on Sept. 7 worth P25.75 million. These acquisitions were priced at P51.25 and P51.50 per share, respectively.

Following the transaction, Cathay Life now holds 326.929 million shares in RCBC.

Cathay Life, a subsidiary of Cathay Financial Holdings Co., bought into RCBC with an initial 20% stake in 2015 priced at P17.92 billion (approximately $402 million) as it purchased shares at P64 apiece, well above the P46 trading price at that time.

In December that year, Cathay Financial said the company’s board had already approved the option to raise its stake in RCBC up to 30%.

RCBC previously said that the fresh capital infusion will count toward its high-quality capital, which rose to 14.17% from 11.83% previously following the deal. This is well above the 6% minimum ratio prescribed by the central bank.

The investment proceeds will also support the grant of fresh loans particularly to the consumer and small business segments.

Cathay Life acquired 5.8 million additional shares in RCBC in March 2016, even after the listed lender found itself in the middle of the $81-million cyber heist which saw stolen funds from the Bangladesh central bank transferred to fake accounts held under the bank’s branch along Jupiter Street in Makati City.

Arnold Kan, executive vice-president at Cathay United Bank (CUB), said the Taiwan-based financial firm continues to support RCBC as part of their “strategic” and “long-term” investment strategy.

CUB is a Taiwan-based lender operating in Manila, which has scaled up from a representative office into a licensed commercial bank since October 2015. — Melissa Luz T. Lopez

Returning Florida evacuees stunned by Irma’s wreckage

ISLAMORADA, FLORIDA — Hurricane Irma evacuees began returning to the storm-ravaged Florida Keys on Tuesday to find homes ripped apart and businesses coated in seaweed amid a debris-strewn landscape where an estimated 25% of all dwellings were destroyed.

The death toll from Irma, previously ranked as one of the most powerful Atlantic storms on record and the second major hurricane to strike the US mainland this season, climbed to more than five dozen. Of those, 43 were killed in the Caribbean and at least 18 in the Southeastern United States.

Twelve Irma-related fatalities were confirmed by Florida emergency management officials on Tuesday, while authorities in Georgia and South Carolina each reported three deaths from the storm and its immediate aftermath.

Destruction was widespread in the Keys, a resort island chain stretching southwest from the tip of the Florida Peninsula into the Gulf of Mexico and connected by a single, narrow highway and a series of bridges and causeways along a route of nearly 100 miles (160 km).

“I don’t have a house. I don’t have a job. I have nothing,” said Mercedes Lopez, 50, whose family fled north from the Florida Keys town of Marathon last Friday and rode out the storm at an Orlando hotel, only to learn their home was destroyed, along with the gasoline station where he worked.

“We came here, leaving everything at home, and we go back to nothing,” Ms. Lopez said. Her and three other families from Marathon planned to venture back on Wednesday to salvage what they can.

Initial damage assessments found 25% of homes in the Keys were destroyed and 65% with major damage, according to Federal Emergency Management Agency administrator Brock Long.

“Basically every house in the Keys was impacted,” he told reporters.

The islands were largely evacuated by the time Irma barreled ashore on Sunday as a Category 4 hurricane with sustained winds of up to 130 mph (215 km/hour).

‘SAILBOAT IN OUR YARD’
Authorities began allowing reentry to the islands of Key Largo, Tavernier and Islamorada two days later for residents and business owners only. The extent of the devastation took many by surprise.

“I expected some fence lines to be down and some debris,” said Dr. Orlando Morejon, 51, a trauma surgeon from Miami as he hacked away at a tree blocking his Islamorada driveway. “We were not expecting to find someone else’s sailboat in our backyard.”

The walls of nearby trailer homes were left ripped wide open, exposing insulation and the sodden interiors of bedrooms and kitchens to the elements.

At the Caloosa Cove Resort and Marina, concrete pilings meant to hold the dock in place had been knocked sideways, and three manatees lolled in the water, drinking from an outflow pump spitting water from the dockside.

Marilyn Ramos, 44, spent the morning cleaning sand and seaweed that had covered her Cuban restaurant Havanos when she arrived early Tuesday.

“I’m trying to stay calm and see how we can work through this,” Ms. Ramos said. “It’s devastating.”

A short distance away, the scent of decaying seaweed hung heavy in the air as Brooke Gilbert, 15, stood with her younger sister staring at the jumble of concrete and twisted metal left from the three-story condo that was their family’s getaway home.

“There’s the couch right there,” she said. “I recognize the clothes in that closet. They belong to my grandmother.”

At the end of Islamorada, roughly the halfway point of the Keys, police at a checkpoint turned around returning residents seeking to travel farther south and waved through utility crews, law enforcement and health care workers.

Authorities said they were barring reentry to the remainder of the Keys to allow more time to restore electricity, water, fuel supplies and medical service. US officials have said some 10,000 Keys residents stayed put when the storm hit and may ultimately need to be evacuated.

LINGERING OUTAGES, FLOODING
Some 5.8 million homes and businesses were still without power in Florida and nearby states late on Tuesday, down from a peak of about 7.4 million on Monday. Florida’s largest utility, Florida Power & Light Co, said western parts of the state might be without electricity until Sept. 22.

One of the chief hardships endured by many Floridians in the storm’s aftermath was difficulty staying cool in the absence of air conditioning, ice and even natural shade from trees knocked down or stripped bare of foliage.

“I just pour water on my head a few times a day,” said Lydia Grondin, 29, of Fort Lauderdale.

Florida’s largest city, Jacksonville in the northeastern corner of the state, was still recovering from heavy flooding on Tuesday.

While damage across Florida was severe, it paled in scope to the devastation wrought by Irma in parts of the Caribbean, which accounted for the bulk of Irma’s fatalities. — Reuters

Additional P5.67-B budget allocated for BRT

ALLOCATION FOR the bus rapid transit (BRT) project in Cebu City is now P16.3 billion after the approval of an additional P5.67 billion, mainly for right-of-way costs. Rafael Christopher L. Yap, head of the BRT Project Implementation Unit, said he was informed by Transportation Assistant Secretary Arnold Fabillar that the National Economic and Development Authority (NEDA) Board approved the additional funds during a meeting in Malacañang on Tuesday. “This is the final approval, so BRT Project is really a ‘GO’ project,” reads part of Mr. Fabillar’s text message to Mr. Yap. “The Board’s approval signifies a confirmation of BRT’s viability for Cebu City despite recent criticisms leveled against its implementation. It also signifies the commitment to the Duterte administration’s “Build, Build, Build” program of infrastructure development which the Cebu BRT project is part,” Mr. Yap said. He explained that the increase in project cost was due to the passage of Republic Act 10752 or The Right of Way Act, which requires government implementing agencies to offer the market value of properties to be acquired for infrastructure projects. Meanwhile, the Cebu City council passed several resolutions on Tuesday relating to the traffic situation, including the submission of a copy of the BRT feasibility study. Councilor James Anthony R. Cuenco, in a privilege speech, said he found out that the feasibility study has been marked “confidential.” He stressed that it should be made public and that the council members should have access to it for review. — The Freeman

S. Korea’s Hyundai Motor says India tax reforms a ‘setback’

NEW DELHI — South Korean auto giant Hyundai Motor says that fresh changes to India’s new national tax had shaken industry confidence in the country with firms already struggling to boost sales.

The Indian government launched a new national goods and services tax in July to replace more than a dozen separate levies and transform the $2-trillion economy into a single market for the first time.

The goods and services tax (GST) sets out four different rates of between five and 28% for businesses instead of the one originally envisioned.

However, the government has made several changes to the tax regime regarding some products including sports vehicles, and luxury and hybrid cars, which auto makers complain have forced them to alter their pricing strategies.

“The recent rolling back to multiple rates with pre-GST classification has come as a setback to the industry, shaking the confidence of auto manufacturers,” Hyundai said in a statement.

“We expect the coming festive season (Diwali) will witness low customer sentiment on new purchase decision.

“Further, in the absence of consistent and long-term policy the investment for new products and new technology will be adversely impacted,” it added.

India’s economic growth slumped to 5.7% in the first quarter of the financial year owing to a controversial ban on high-denomination notes in November as well as the GST rollout.

Auto makers have also complained about a recent government push to switch cars to electric by 2030.

This would require them to make massive fresh investment and manufacturing plans including setting up new plants and supply lines. AFP