MOA expansion to be completed by end-2017

August 28, 2017 | 12:04 am

The SM GROUP targets to finish the expansion of the SM Mall of Asia (MOA) before the year ends, which would make it the largest shopping mall in the country.

SM Prime Holdings, Inc. started the expansion of MOA for its 10^th year anniversary in 2016, in a bid to add around 250,000 square meters (sq.m.) more of floor space to the current 407,000 sq.m.

“They’re trying to hit late this year, if not early next year. That’s a major expansion, and also they’re upgrading a lot of facilities,” SM Investments Corp. (SMIC) Senior Vice-President for Investor Relations Corazon P. Guidote told reporters at the sidelines of the Economic Journalists Association of the Philippines forum in Manila last Friday.

When it opened, SM MOA was the largest shopping mall in the country at the time. However, it was soon overtaken by SM City North EDSA and SM Megamall, which also underwent expansion.

The SM MOA expansion forms part of SM Prime’s plan to add five more malls under its network in 2017. To date, the listed firm owned by the country’s richest man Henry Sy, Sr. has already opened three of the planned malls, namely SM Cagayan de Oro Downtown Premier, S Maison at Conrad Manila in Pasay, and SM Cherry in Antipolo, Rizal.

SM Prime is set to open another mall in Puerto Princesa, Palawan by the second week of September, which will have a total gross leasable area of 65,073 sq.m.

Asked how many more the company plans to add, Ms. Guidote noted the annual expansion target is usually five to six malls.

“But I think next year mas marami (there will be more) because they’re opening smaller malls. I think we’ll be closing around 10 malls next year. But in addition, they’re also expanding existing malls,” she added.

The company’s store network now stands at 63 shopping malls in the Philippines and seven in China, totaling 1.3 million sq.m.

By 2018, SM Prime targets to have 75 malls as part of a five-year road map that looks to double both earnings and revenues by 2018. The company earmarked P50 billion in capital expenditures this year to support the expansion plan.

SM Prime’s net income attributable to the parent rose 14% to P14.39 billion in the first six months of 2017. Consolidated revenues picked up 10% to P43.25 billion, 60% of which came from mall operations which amounted P21.75 billion. — Arra B. Francia

Yields on Treasury bills to move sideways amid lack of catalysts

August 28, 2017 | 12:03 am

By Janine Marie D. Soliman,
Reporter

YIELDS on Treasury bills (T-bills) on offer tomorrow may move sideways amid the lack of fresh leads offshore and at home, even as strong appetite is expected for the shorter-termed papers.

The government plans to raise as much as P15 billion in its auction of T-bills on Tuesday: P6 billion in 91-day debt papers, P5 billion in 182-day notes and P4 billion in 364-day papers.

A bond trader said in a phone interview over the weekend that the offer of the shorter-termed securities is expected to fetch steady to lower rates across the board compared to the previous T-bills auction.

“Yields would probably fall five basis points (bps) lower or at par, same levels compared to the previous auction,” the trader said. “We are expecting that this T-bills auction will be fully awarded.”

The government fully awarded the T-bills it auctioned off on Aug. 14 after rates requested by financial institutions slipped amid market preference for shorter tenured debt instruments brought about by geopolitical tensions abroad.

The Bureau of the Treasury raised P15 billion as planned, with investors wanting to lend as much as P32.3 billion, more than double the volume of debt papers placed on the auction book.

The 91-day T-bills were fully awarded at P6 billion, after total offers reached P16.196 billion and with the papers fetching a rate of 2.161%.

Likewise, the 182-day securities were fully awarded at P5 billion, with total bids reaching P6.179 billion. The papers were quoted at 2.677%.

Lastly, the government raised P4 billion from its 364-day debt notes after banks wanted to buy as much as P9.917 billion. The securities fetched a yield of 2.946%.

At the close of trades in the secondary market on Friday, the three-month, six-month, and one-year papers were last quoted at 2.1624%, 2.9371%, and 2.8610%, respectively.

Asked what factors would cause rates to go lower at tomorrow’s auction, the trader said: “We see demand on the short-end of the curve focused there, especially on the one-year T-bills.”

The trader said the three-month papers could be twice oversubscribed, while the 364-day debt notes may end up 1.5 times oversubscribed. However, the trader said the six-month securities could see demand at only three-fourths of the volume offered.

The trader added that the Economic Symposium in Jackson Hole, Wyoming last Friday would also have an impact on tomorrow’s auction of T-bills.

“Another factor market players are looking at is the Jackson Hole meeting. Everyone is focused on [European Central bank President Mario] Draghi and if he would stop their asset purchase,” the trader said. “Should they decide not to continue its asset purchase or reduce its assets, most likely we would see markets adjusting and higher yields globally.”

Reuters reported Mr. Draghi primarily talked about solid global recovery during last Friday’s symposium, despite some analysts expecting mentions of the strong euro zone currency.

The trader added that mixed data in the US as well as geopolitical uncertainties involving US President Donald J. Trump are also driving yields and demand on domestic and offshore treasuries.

“We have seen mixed data in the US lately and that’s more of what’s driving treasuries as well as what’s happening with Trump, where there’s not much support internally,” the trader said.

Reuters reported Mr. Trump had decided to disband the American Manufacturing Council and the Strategic and Policy Forum, raising questions on the US President’s ability to organize the business community.

Meanwhile, another trader said they see yields at tomorrow’s auction moving sideways following the peso’s recent recovery.

“We see sideways movement on yields since the dollar-peso improved and at the same time there’s a bit liquidity from the market, “ the trader said.

The peso ended at P51.08 versus the dollar on Friday, a bit lower from Thursday’s P51-to-the-dollar finish on Thursday but a rebound from its P51.49 close last Aug. 18.

“There’s demand since the market is liquid, we see all papers to be twice oversubscribed,” the trader added.

The government plans to borrow up to P180 billion locally this quarter — P90 billion each of Treasury bills and Treasury bonds — steady from the previous quarter.

Palace vows law to ‘take due course’ on Kian delos Santos killing

August 28, 2017 | 12:03 am

MALACAÑANG ON Sunday, Aug. 27, vowed anew that justice will be served in the case of Kian Loyd delos Santos, the teenager picked up by police and slain amid an anti-drug operation in Caloocan City. In his statement, Presidential Spokesperson Ernesto C. Abella said: “Kian Loyd delos Santos has been laid to rest. A criminal complaint against the Caloocan policemen involved in the incident has already been filed. Investigation is now in the process. Let us allow the law to take its due course.”

Dominguez seeks to deter unqualified bidders

August 28, 2017 | 12:03 am

THE government’s economic managers are considering adopting nationwide a rule for government contractors requiring them to complete half of a project before first billing.

Finance Secretary Carlos G. Dominguez III said that he has revised the terms of reference for small projects under his department, such as office renovations, to avoid implementation delays.

Asked whether this would be applied to all national government projects in the future, Mr. Dominguez told reporters: “That’s what [Budget Secretary Benjamin E.] Diokno is thinking about.”

“I didn’t hear any opposition. (Awards to unqualified contractors are) generally [happening] in small jobs, but it’s so irritating,” he added.

In the implementing rules and regulations of Republic Act. No. 9184, or the Government Procurement Reform law, the government is mandated to award projects to the lowest bidder, and is allowed to grant them advanced payments of up to 15% of the contract at any point.

Mr. Dominguez noted instances that some bidders will commit to handling the project, but will then be found to be incapable of finishing it.

“By the rules you have to give it to the lowest bidder. Obviously some are incapable of executing. A contractor can say he will finish it in four months, but it can take over a year to finish it,” he said.

“So we’re saying that we have to get contractors who can carry out the project without any advances from us. If not, they are defrauding the government,” he said.

“So what we are going to do now is implement a very low deposit for mobilization, then we say the first time that you can bill us is when you finish 50% of the work. At least we know that they have enough money to finish (until) 50%,” he added.

The scheme is expected to deter unqualified contractors from participating in bids.

“You have to stand the delay because you are in there already and you cannot get out, so they trap us into those things and I don’t want that to happen again,” Mr. Dominguez said. — Elijah Joseph C. Tubayan

Soul issues and business concerns

August 28, 2017 | 12:03 am

The Arangkada Forum is the yearly culminating event of the Joint Foreign Chambers of Commerce of the Philippines (JFC) for its Arangkada Philippines Project (TAPP). The JFC focuses on the “Seven Big Winner Sectors” (agribusiness, creative industries, infrastructure, manufacturing and logistics, mining and tourism) identified as key to more rapid economic growth in the Philippines. Thus was “Arangkada” chosen as project name — “arangkada” in Filipino means “acceleration” or a revving-up of the engine (of growth). Arangkada has done in-depth empirical research on constraints to more rapid economic growth, and has actively advocated for reforms to create a better business environment and investment climate in the Philippines.

“Implementing the Ten-point Agenda” is the theme of the Arangkada 2017 forum on Sept. 14 (Marriott Hotel), where Socioeconomic Planning Secretary Ernesto M. Pernia will speak on the Philippine Development Plan and Ambisyon 2040, and Budget and Management Secretary Benjamin E. Diokno will talk on the “Build, Build, Build” infrastructure projects of the Duterte administration. From this forum, the JFC will release a new summary Arangkada document with pro-business and investment policies, and with updated comments and recommendations for that revving-up of the Philippine economy.

At the pre-event press briefing held last week for Arangkada 2017 the first question asked was, “How about peace and order, as it impacts the Philippine investment climate? Will this be discussed?”

Mr. Julian Payne, president of the Canadian Chamber of Commerce pointed out that “all business looks to a peaceful, secure investment climate. As long as this is being addressed, it’s OK for business.”

Mr. Guenter Taus, president of the European Chamber of Commerce declared that “we can live with risk. But we cannot live with uncertainty, which is intangible and cannot be measured. We hesitate if we do not know what we are getting into. We need to market ourselves worldwide — we just go somewhere else.”

Mr. Taus pointed out that business process outsourcing (BPO), one of JFC chosen Seven Big Winner Sectors has enabled the middle class to rise. We also need to move forward in agribusiness, he stressed. The average age of farmers is 57 years old — the youth has to take over. Why is the political governance not pushing the Seven Big Winner sectors enough, he asked?

Mr. Bruce Winton, president of the American Chamber of Commerce (and Cluster manager for Marriott International Hotels in Manila and Iloilo) concurred that “business investment is a big decision. But generally, tourists are not too concerned about peace and order.” Mr. Winton said that hotel occupancies and tourist arrivals have not waned.

Mr. Ho Ik Lee, president of the Korean Chamber of Commerce agreed that tourists are not noticeably afraid of the peace and order situation. He said that the number of Korean tourist arrivals in the Philippines has reached 1.5 million/year, and is still increasing.

But Mr. Ho worried that Korean businesses are leaving the Philippines and moving to Vietnam because the costs here are almost three times higher than Vietnam’s. This higher cost is killing manufacturing because logistics cost is too high here and the government, BoC (Bureau of Customs), and the others are also another point,” he said.

Mr. Payne (Canada) reverted to the impact of peace and order on business, saying that “the Chambers (JFC) need balanced media reporting — but more of good news and less of the bad news…Thailand has problems but does not advertise it in the headlines,” Mr. Payne noted. A murmur rose in the audience of media people, who clearly remember the headlines in Thai news about corruption scandals in government, and the bloody coups that established successions of military rule.

Whereupon a statement had to be made in defense of the Philippine press, and in reminding of the basic ethic of journalism: to tell the true story, to inform accurately, whether news is good and heartening or bad and ugly. When there are soul issues in a society, these are priority versus making money. Soul issues — like graft and corruption in government and the maniacal end-justifies-the-means that has killed thousands in the blind fury of a drug war — these cannot NOT be mentioned, as if these did not exist. Peace and order by its name, comes from the integrity of laws and rights.

At the ASEAN World Economic Forum (WEF) in Cambodia, Socioeconomic Planning Secretary Ernesto Pernia underscored the importance of peace and order for the economy to thrive (The Manila Times, 05.29.2017).

“It’s not a 10-point agenda. To remember this, it’s a zero to 10-point agenda, socioeconomic agenda and the zero is precisely peace and order,” Pernia said. “Fighting criminality, fighting corruption, fighting smuggling and peace and order. And that’s because zero is the origin of the 1 to 10 points socioeconomic agenda. It’s the bedrock that has to be addressed,” he added (Ibid.).

“President Duterte is addressing that main bedrock of the 10-point economic agenda so that the [agenda] can materialize. Without this bedrock, then it will be difficult for the economy to thrive and flourish and for the country to prosper,” according to Pernia.

When Secretary Pernia speaks at the Sixth Arangkada forum — will he explain how and why the government’s economic plan is not “The Ten-point Agenda,” but the “Zero to 10-point Agenda,” as he so vehemently distinguished?

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Police arrest 2nd man after Buckingham sword attack

August 28, 2017 | 12:03 am

LONDON — Police investigating Friday’s sword attack outside Buckingham Palace in London arrested a second man on Sunday, a statement said.

Britain — Police officers stand guard at a police cordon next to Buckingham Palace following an incident where a man armed with a knife was arrested outside the palace following a disturbance in London on August 26, 2017. — AFP

“The man was arrested on suspicion of being involved in the commission, preparation or instigation of terrorism at 10:15 hours (0915 GMT) today and he has been taken into custody,” the statement said.

Counter-terrorism police questioned on Saturday a man who assaulted police officers with a four-foot sword outside Queen Elizabeth’s Buckingham Palace residence shouting “Allahu Akbar” (God is greatest).

Two unarmed officers suffered slight cuts as they detained the man, who drove at a police van on Friday evening, then took the sword from the front passenger foot-well of his car, London’s Metropolitan Police said.

It was too early to say what the man was planning to do, said Commander Dean Haydon, the head of the Met’s Counter Terrorism Command.

“We believe the man was acting alone and we are not looking for other suspects at this stage,” he said. “It is only right that we investigate this as a terrorist incident at this time.”

Europe has been on high alert following a string of militant attacks, including four this year in Britain which killed 36 people. The country’s threat level remains at severe, meaning an attack is highly likely.

No members of the royal family were present in the palace, which is a magnet for tourists in Britain’s capital in the peak August holiday weekend.

“I want to thank the officers who acted quickly and bravely to protect the public last night demonstrating the dedication and professionalism of our police,” Prime Minister Theresa May said in a message on Twitter.

SUSPECT FROM LUTON
The suspect was initially arrested on suspicion of grievous bodily harm and assault on police. He was then further arrested under Britain’s Terrorism Act.

Police said they were investigating a 26-year-old man from the Luton area, an ethnically diverse town 35 miles (55 km.) north of London where police have carried out investigations linked to other militant attacks, including one earlier this year on London’s Westminster Bridge.

“My partner saw a sword… as well as a policeman with blood on him, looking like his hand or chest was injured. The police officer had it in his hand, walking away with it,” said an unnamed witness quoted by The Times newspaper, who said tourists were running away from the scene.

“Something happened before, which is why the people ran away. I’m not sure what this was. But people were already scared and I saw the policeman pull the man from the car” the witness said.

The suspect was treated at a London hospital for minor injuries, and there were no other reported injuries.

“This is a timely reminder that the threat from terrorism in the UK remains severe,” Mr. Haydon added. — AFP and Reuters

Star Hotshots gear up for possible finals entry with Pingris return

August 28, 2017 | 12:03 am

AFTER TWO semifinals stints in the past two conferences, the Star Hotshots have once again put themselves in a good position to make it to the playoffs — and possibly a championship entry under coach Chito Victolero.

Star Hotshots gear up for possible finals entry with Pingris return — Marc Pingris’ return will solidify the Star Hotshots’ title aspirations in the Governors’ Cup. — *REY JOBLE*

For four games, the Hotshots had been unbeaten and with veteran Marc Pingris back in harness, the old Purefoods franchise is making a solid push all the way in the ongoing PBA Governors’ Cup.

“Our mind-set is to win every game. As much as many wins we can get,” forward Allein Maliksi told BusinessWorld. “It’s important we get in a good position first, which is the top four to get as a twice-to-beat advantage. Hopefully, we’ll learn from our past experiences.”

Under Mr. Victolero, Star went a game away from making it to the championship round, losing to Barangay Ginebra in Game 7 of their Philippine Cup semifinals series in what was Mr. Pingris’ last game before being sidelined by a hip injury.

Playing without Mr. Pingris in the Commissioner’s Cup, the Hotshots still managed to make it to the top four and this time, they went on to face the San Miguel Beermen, who defeated their sister team in four games of their best-of-five semis series.

Now that Mr. Pingris has returned, the many-time All-Defensive team member is slowly but surely being integrated in the scheme of things, more importantly on the defensive side, his best contribution in the squad.

“Even though I already knew our defensive schemes, I’m still studying it to refresh my memory. I knew I can contribute more on defense,” said Mr. Pingris.

His teammates, Aldrech Ramos and Mark Barroca believe Mr. Pingris will make great contributions in their finals aspirations.

“In our first game, he was able to contribute well, even though he played for only two minutes,” added Mr. Ramos. “I don’t think he will disrupt our chemistry once he comes in. He’s the leader of this team and he knows where he can contribute.”

Mr. Barroca, who teamed up with Pingris in the five-championship run the team had, including a rare grand slam in 2014, thinks having the “Pinoy Sakuragi” back in action means they will only solidify their chances of making it all the way to the championship round.

“We’re a strong team once our line up is complete even during the time of Coach Tim (Cone). Whenever some of us or one of us is down with an injury, we’re having a hard time. But with Pingris back, our target is really to get into the finals. But we believe we have to earn it and work hard for it. We’re happy now that we’re complete. Not anyone from the squad is playing heavy minutes. We’re happy because that’s an advantage for the senior statesmen of the squad. This will keep us fresh moving forward,” added Mr. Barroca. — Rey Joble

Colliers International sees demand for hotels in Bacolod, Davao, Bohol

August 28, 2017 | 12:03 am

HOTEL DEVELOPERS should target projects in key destinations outside Metro Manila as more Filipinos travel around the country, Colliers International said.

“Hotel developers should zero in on the rising number of domestic tourists and the growing popularity of staycations by building two- to four-star hotels particularly in Iloilo, Cagayan de Oro, Bohol, Bacolod, and Davao whose regional airports are up for expansion and modernization,” Colliers International said in a report dated Aug. 22.

Colliers released the report titled “Infra-led GDP to buoy property,” a week after the government announced the Philippine gross domestic product (GDP) accelerated by 6.5% in the second quarter.

The property consultancy noted that domestic travelers have continued to drive hotel demand. Philippine Statistics Authority (PSA) data showed the other services segment, which covers restaurants and hotels, grew by 5% in the second quarter of 2017.

“PSA data also reveal that Filipino households’ hotel and restaurant spending has been growing by 7.3% annually over the past seven years, faster than the increase of other household spending subsectors such as food and beverage (7.3%), education (4.8%), and clothing and footwear (1.4%),” Colliers said, adding this shows more Filipinos are spending more of their income on leisure-related activities.

Also, Colliers said Department of Tourism data showed local travelers made more than 90 million trips from April to September 2016.

By destination, only 15% of the trips were made in Metro Manila. Other top destinations included Negros Occidental (7%), Pangasinan (4.6%), Cavite (4.3%), Quezon Province (4.1%) and Bohol (4.1%), and Cebu with 3.7%.

“Given the continuously rising domestic travel market buoyed by millennial spending and rising popularity of staycations, we recommend that developers put up more affordable hotels in the preferred destinations outside of Manila,” Colliers said.

Colliers identified Bacolod, Bohol, Cagayan de Oro and Davao as attracting hotel and leisure investments, as their regional airports are being expanded and modernized.

“These projects, once completed, should result in the mounting of more direct flights to these provincial hubs,” the report said.

The government’s plan to construct infrastructure projects outside of Metro Manila and into the provinces could also result in increased domestic tourism in the future.

This year, the tourism department targets to attract a total of 7 million tourists, higher by 17% than the 6 million tourist arrivals recorded in 2016.

In the January to May period, foreign arrivals were up by 14% to 2.88 million. The growth was driven by the department’s marketing efforts alongside the arrival of delegates for the Association of Southeast Asian Nations summit last April.

Colliers said the increase in tourist arrivals will sustain the growth of the hotel sector, which is set to add around 1,700 hotel rooms during the second half of 2017. This will include the opening of the 460-room Grand Hyatt Manila in Fort Bonifacio in Taguig City, the 200-room TRYP by Wyndham Manila in the Mall of Asia complex, and units in I’M Hotel in Makati City and Seda Vertis North in Quezon City.

The report showed occupancy rates are expected to stay within the range of 65% to 70% in the next six months, lower than the 71% recorded in the first half of the year. — A.B. Francia

DLI’s Davao condo project nearly sold out

August 28, 2017 | 12:02 am

DAVAO CITY — Damosa Land, Inc. (DLI) said it has nearly sold out all the units of the Seawind, a six-building condominium project in the northern part of the city.

Of the 1,161 units, DLI said only 129 units at the Seawind’s six towers remain unsold.

DLI Vice-President Ricardo F. Lagdameo said it will inaugurate Tower 1, and turn over 165 units to owners today (Aug. 28).

Meanwhile, Tower 2 is expected to be completed in September this year.

DLI said construction of Tower 3 has started and is targeted to be completed by the third quarter of 2018.

The low-rise condominium development is located on 2.86-hectare property in Km. 11 Sasa, facing the Davao Gulf and the Island Garden City of Samal.

Each Seawind tower has eight floors, with units ranging from studio to three-bedroom types. It also has a clubhouse, a pool, parks, play areas, and a commercial strip, along with a public transportation terminal.

Aside from the Seawind condominium, DLI is also currently completing its first horizontal venture, the upscale Damosa Fairlane subdivision, located in a seven-hectare area within the central part of the city.

DLI is the real estate and property development arm of the Anflo Group of Companies. It is responsible for developing business and lifestyle-oriented commercial center Damosa District that houses the Anflocor Corporate Center, Damosa Gateway, Damosa Market Basket, Damosa Business Center, and the Philippine Economic Zone Authority-accredited Damosa IT Park. — Maya M. Padillo

PhilPaSS transactions up

August 28, 2017 | 12:02 am

By Melissa Luz T. Lopez,
Senior Reporter

MORE FILIPINOS are tapping formal channels to transact money under the central bank’s payments and settlements system, with total value breaching P700 trillion over the past year alone, its chief said.

Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said they have observed a spike in volumes that go through the Philippine Payments and Settlements System (PhilPaSS), showing signs of greater reliance on the financial platform.

The BSP chief said total transactions from July 2016 to June 2017 alone surged to over three million, with total value reaching P757.2 trillion over that year.

PhilPaSS is the central bank’s real-time gross settlement system. It allows high-value payments between banks through the deposit accounts they maintain with the central bank. It is one of six major payment, clearing and settlement systems in the country which is managed by the BSP.

Remittances sent by overseas Filipino workers accounted for over a third of total volumes settled under PhilPASS during the second quarter, latest central bank data showed, followed by interbank transactions.

Between April-June this year, amounts that went through PhilPaSS totalled P65.894 trillion.

Among the other payments and fund transfer schemes processed under PhilPaSS include check clearing, customer payment instructions, the purchase and sale of government securities, revenue collections for the Bureau of Internal Revenue and the Bureau of Customs, and the withdrawal of excess reserves with the BSP.

All banks and quasi-banks use the PhilPaSS as its main clearing platform since 2002, where they transact with fellow lenders, government offices, and the central bank.

“The continued increase of the volume and value of PhilPaSS transactions reflects the public’s faith and confidence in the country’s payments and settlements system and the underlying health of the economy,” Mr. Espenilla said in a speech on Friday.

The central bank has been asking Congress to enact a payment systems act to formalize the BSP’s authority to oversee all settlement platforms operating in the Philippines.

The fresh request for the measure comes amid plans to set up two new clearing houses for digital transactions, as part of an industry-wide shift to online financial services.

Espenido: I can stop Cebu drugs

August 28, 2017 | 12:02 am

THE CONTROVERSIAL chief of the Ozamiz City police is confident he can solve the drug problem in Cebu if he is assigned here. Speaking to reporters yesterday, Chief Insp. Jovie Espenido said his knowledge of the place and its people will be an advantage in addressing the problem of illegal drugs. He, however, refused to answer questions relating to self-confessed drug lord Franz Sabalones and alleged drug lord Peter Lim. He said he is willing to be assigned here if opportunity allows. — The Freeman

See full story on https://goo.gl/Rf42Yu

JICA-funded P10-M biodiesel fuel plant in Davao is PHL’s first

August 28, 2017 | 12:02 am

By Carmencita C. Carillo,
Correspondent

DAVAO CITY — The city officially opened Friday the country’s first biodiesel fuel plant that can convert used oil to environment-friendly biodiesel fuel.

Biodesel conversion machinery provided by Japan at a cooking oil recycling plant in Davao City. — *CARMENCITA A. CARILLO*

The plant is located at the City Environment and Natural Resources Office (CENRO) composting facility in Ma-a.

The biodiesel fuel plant project is being implemented by the city government along with Biomass Japan, Inc. and Shinozaki Transport Warehouse Co., Ltd in cooperation with the Japanese government and Japan International Cooperating Agency (JICA).

“This facility which (converts) used oil to biodiesel fuel is a welcome development especially as waste management is one of the key priorities of the city of Davao,” Mayor Sara Duterte-Carpio said. Also present at the event were Japanese Minister for Foreign Affairs Kazuyuki Nakane.

“With this project, we hope to encourage all Dabawenyos to take on a more active role in preserving the environment,” she said. “With this facility, we can at least reduce the repercussions of modernization.” she added.

Assistant City Administrator Tristan Dwight Domingo said the project is worth P10 million.

Mr. Domingo said used oil causes water pollution and clogs rivers and sewer systems. But conversion to biodiesel fuel, he added, makes the waste product useful in lowering vehicle emissions.

“The project becomes sustainable then it is possible that vehicles using this environment-friendly biodiesel will no longer be required to undergo emission testing before the registration of their vehicles,” Land Transportation Office Davao Region Director Gomer J. Dy said in an interview.

The plant is capable of converting used cooking oil yielding up to 90% end-product. The byproduct is mainly watery which can be easily disposed of in the drainage since no toxic or hazardous chemical is used to convert used cooking oil to biodiesel fuel

President Rodrigo R. Duterte, while still mayor of the city, issued Executive order No. 32 series of 2015, which mandated the proper storage, treatment, transport, export, processing, reprocessing, recycling and disposal of used cooking oil, with CENRO as the lead implementing agency. The EO is pursuant to Republic Act 6969 also known as the “Toxic Substances and Hazardous Nuclear Wastes Control Act of 1990.”

Consul Tomoko Dodo of the Japanese Consulate in Davao earlier said: “We have done it in Japan and we are confident that this can also be done in Davao City. And if it is good then we want to expand to the other areas.”

She said Japan also faced with the problem of the dumping of used cooking oil into canals and drains. This is very dangerous, she added, but Japan was able to preserve its water systems with the conversion of used cooking oil to biodiesel fuel.

MyClimate Japan was contracted to conduct the feasibility study for the project last year. Shigeto Mizumoto, MyClimate Japan analyst, said an initial interview with street food vendors indicated that each vendor generates up to two liters of used cooking oil per day. Most of them revealed they bring the used cooking oil home and dispose of it in the drains.

CENRO Chief Engineer Eliza P. Madrazo said the facility has processed 1,800 liters of biodiesel fuel for the inauguration. The fuel was used to power three public utility jeepneys and the agency’s trucks and vehicles during the inauguration. CENRO’s dump trucks, however, have used the processed biodiesel fuel for a month now for garbage collection operations with no problems reported.

“Per day we can process 1,000 liters and out of that 10% is waste but it can be used for compost,” Ms. Madrazo said.

Mr. Domingo said the efficiency of the biodiesel fuel will be tested for three months using 30 jeepneys. During this time, the implementing agencies will also conduct emission and fuel efficiency monitoring.

The implementing agencies previously studies on the sustainability of the project given the existing supply of used oil in the city. Shigeto Mizumo of Biomass Japan, Inc. said one finding was that the city can supply enough used cooking oil to make the project sustainable.

Biodiesel will cost P16 per liter which is cheaper than regular diesel fuel. Mr. Mizumo said the project will seek to expand collection of used oil for further testing on PUJs.

The plant uses MAX premium machinery manufactured by Biomass Japan, Inc. The machinery uses a dry processing method which does not need waste water treatment.