THE CASH utilization rate of government agencies slowed at the midyear mark, though the Budget department said it is seeing indications of a spending pickup.

The notice of cash allocation (NCA) utilization ratio in the first half of the year was 94.6%, down from 95.7% a year earlier.

This was however an improvement from the end-May ratio of 88.5%.

An NCA is a cash authority issued by the Department of Budget and Management to government offices to cover their cash requirements.

According to Budget Undersecretary Laura B. Pascua, the slowdown at midyear indicates some agencies are still gearing up to spend their allocations.

“I think it took some time for the departments to get their acts together for the year because of the late appointment of heads and some of the new heads wanted to review their systems and expenditure programs,” Ms. Pascua said in a mobile phone reply yesterday.

The Department of Information and Communications Technology — which was just created last year — got the lowest ratio at 44.2%.

The agencies that recorded the highest usage rates in the first half were the Office of the Ombudsman at 100%, followed by the Civil Service Commission at 99.8%, followed by the Commission on Elections at 99.4%.

Ms. Pascua however said that there is evidence that spending is starting to pick up, following an election year where disbursements were at its fastest.

“2016 was mostly running on momentum. So 2017 started slow but when we saw in May the surge in spending, then we think that spending is back on track,” she said.

The national government logged a 20% increase in spending to P261.7 billion in May — which led to an 89% rise in the fiscal deficit to P33.4 billion.

Emmanuel J. Lopez, chair of the Department of Economics at the University of Santo Tomas (UST), likewise expects spending to continue to gain traction this quarter.

“It’s expected that other areas of interest and gov[ernment] bureaucracy will fast-track government expenditure, not for the sake of spending alone but for prompt delivery of basic services,” Mr. Lopez said in an e-mailed reply.

For the second quarter, NCA utilization was 95.5%, which slowed from 95.8% in the same period in 2016. Cash utilization rose however compared to the first quarter’s 93.4%.

Separate data show that budget releases in the second half so far are at 84.3%, or P2.823 trillion of the P3.35 trillion 2017 budget. This was slower than the released 87.2%, or P2.618 trillion of the P3-trillion budget in 2016. — Elijah Joseph C. Tubayan

NATIONAL Transmission Corp. (TransCo) has approached multilateral lending institutions Asian Infrastructure Investment Bank (AIIB) and World Bank for a loan of between P15 billion and P20 billion to pay renewable energy developers that have yet to receive their share of the feed-in-tariff (FiT) allowance collected from electricity consumers.

“I’m talking to AIIB and World Bank if they can loan us at zero interest,” Melvin A. Matibag, TransCo president and chief executive officer, told reporters.

“I’m looking at P15-P20 [billion],” he said, adding that his proposal is for a zero-interest loan with a repayment period of 30 to 40 years.

TransCo is the designated administrator of the uniform charge billed to all on-grid power users. The collection, called the FiT-allowance in consumers’ electricity bills, is used to pay renewable energy developers for their biomass, run-of-river hydro, solar and wind projects. The tariff is meant to accelerate the exploration and development of clean energy sources and encourage the use of renewable energy to reduce greenhouse gas emissions.

Dinna O. Dizon, manager of TransCo’s compliance monitoring department, said P8.1 billion in FiT remains unpaid after the agency paid out 72% of the P30 billion due to renewable energy developers.

She disclosed TransCo’s proposal on Thursday during the Second Philippine Hydro Summit and Exhibition at the Makati Diamond Residences in Makati City. Both officials attended the event.

Mr. Matibag said he held talks with China’s AIIB and the World Bank for the long-term loan. He said both financial institutions have “untouched” funds set aside for renewable energy projects. He added that TransCo can put up its FiT-allowance collections in the coming years to demonstrate its capacity to pay.

He said the proposal was “approved in principle” by Energy Secretary Alfonso G. Cusi. He also said Finance Secretary Carlos G. Dominguez III “welcomed” the idea.

“I’m preparing the memo. Maybe by the end of the month, I’d be able to finish it,” Mr. Matibag said, when asked about the status of his proposal.

He said the unpaid FiT had accumulated in part after the Department of Energy increased the installation target for solar power projects to 500 megawatts (MW) from 50 MW, leaving more developers billing TransCo for their guaranteed FiT. He said the amount he was planning to borrow allows for some buffer.

The backlog was also worsened by the delay in the approval of the rate of FiT-allowance collected from electricity users, which TransCo applies for yearly. The Energy Regulatory Commission (ERC) has yet to approve TransCo’s application for a 22.91-centavo per kilowatt-hour (kWh) FiT-allowance for 2017.

Ms. Dizon said TransCo’s application for 2017 is subject to change.

“Our updated calculation based on more recent billing data, generation data, the amount that came out is 27-28 centavos per kWh, but it’s up to ERC to appreciate that,” she said. “As far as I know, more or less they will come out with the decision three months after the last hearing date. We have the final hearing next week.” — Victor V. Saulon

ELEVEN exporters, mostly from Vietnam and Thailand, have expressed interest to participate in the government auction for the tax-free importation of 250,000 tons of rice, with the National Food Authority (NFA) still inviting more potential bidders.

“The intention of the NFA Council is for more private sector participation, not to allow shipments to be cornered by one supplier,” NFA Deputy Administrator and Special Bids and Awards Committee Chairman Tomas R. Escarez said during the agency’s pre-bidding conference on Thursday in Quezon City.

The NFA Council, the governing body that has the final say on the guidelines for rice importation, has divided the shipments into eight lots — six with a volume of 25,000 tons and two of 50,000 tons. The specification is for well-milled long-grain white rice with a broken rate of 25%.

Prospective bidders may bid for any of the lots as long as the maximum quantity to be awarded per supplier cannot be higher than 50,000 metric tons.

“Eleven are interested. But we want more. From now, until the bid day, we can still accept applications,” Special Assistant to the NFA Administrator Rachel Miguel, a lawyer, said during the briefing.

The exporters that have so far expressed interest in the auction are Olam International Ltd., Ponglarp Co. Ltd., Thai Hua Co. Ltd., Vietnam Southern Food Corp. II, Gentraco Corp., Gia International Corp., Louis Dreyfus Company, Vietnam Northern Food Corp. (Vinafood I), Capital Cereals Co. Ltd., Asia Golden Rice Co. Ltd., and Thai Granlux International, Inc.

The bid deadline is 10 a.m. on the day of the auction, July 25.

The government has a budget of P5.6 billion for the procurement exercise, which is intended to reinforce rice inventories during the lean months.

However, Mr. Escarez said the grains agency will be paying an additional cost of 35% of the landed price.

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

On the issue of private sector-led importation which was approved earlier by the NFA Council, Mr. Escarez said the council has not approved a timetable but the arrival of the shipments under the minimum access volume (MAV) scheme is proposed to arrive between December and February.

“We have a regular council meeting every third week of the month. We haven’t received a notice yet. Probably next week.” Mr. Escarez added.

The Philippines has an 805,200 ton MAV commitment for rice to the World Trade Organization with a 35% tariff within the quota, corresponding to the Asean Trade in Goods Agreement, and 40% out-of-quota. — Janina C. Lim

SN ABOITIZ Power-Magat, Inc. (SNAP-Magat) is on track to finish its 8.5-megawatt (MW) run-of-river hydro-power facility in Ramon, Isabela in November, well within the deadline set by regulators for projects availing of the guaranteed rate under the feed-in-tariff (FiT) system.

“Right about now, we’re probably at 90% completion. That’s the technical part and installation. They’ve been managed very very well by the team,” said Joseph S. Yu, president and chief executive officer of SNAP, the joint venture between SN Power of Norway and Aboitiz Power Corp.

“Then we begin our dry commissioning and the wet commissioning,” he told reporters on the sidelines of the Second Philippine Hydro Summit and Exhibition at the Makati Diamond Residences on Thursday.

The $47.1-million project, SNAP’s first greenfield venture, will generate power from the water flowing from the Maris reservoir into the south main diversion canal. The facility is in Barangay Ambatali, which is downstream of SNAP’s large Magat hydroelectric power plant.

“There will always be surprises; that’s the only certainty in the project execution,” Mr. Yu said.

He said commissioning should begin in September. The project broke ground in 2015.

Separately, AboitizPower told the stock exchange that the project was 85% finished and would start commercial operations in November. Mr. Yu said the quoted completion date was for June 2017.

“This is our first project to come through our greenfield pipeline so we are very excited. We have been working hard to ensure we finish on time and within budget, as well as within safety, social, and environmental standards. Barangay Ambatali is also now our host barangay, a welcome addition to what we hope would be a growing number of SNAP host communities,” AboitizPower quoted Mr. Yu as saying.

Mr. Yu also gave an update on the 390-MW Alimit hydro project in Ifugao, which he described as “making very good progress.” The multi-facility complex is made up of the 20-MW Olilicon hydro, 120-MW Alimit hydro and the 250-MW Alimit pumped storage.

“We’ve conducted informational and education campaigns, built up a fair bit of trust in the communities. I think early on we struggled with communicating what the project is and the value of the project to the community,” he told reporters.

The Alimit complex also requires a 42-kilometer 230-kilovolt transmission line to transmit power from the plant to the grid.

“There’s a little bit of firming up that we will need to do, but that shouldn’t take a lot of time. The biggest thing for us for Alimit is to make sure that it has the right sociopolitical acceptance in the community,” he said.

He said the “three big hurdles” for the project are the free prior informed consent from the National Commission on Indigenous People, the environmental compliance certificate from the Department of Environment and Natural Resources and the endorsement of the local government units.

The project encompasses four ancestral domains in the municipalities of Aguinaldo, Lagawe, Lamut and Mayoyao.

SNAP owns and operates the 360-MW Magat hydro-power plant on the border of Isabela and Ifugao. It also has the 105-MW Ambuklao and the 140-MW Binga hydro plants in the province of Benguet.

Under the FiT system, qualified developers of emerging renewable energy sources are paid a fixed rate per kilowatt-hour (kWh) of their exported electricity, but excluding the energy for their own use.

For run-of-river hydropower, the Department of Energy set a target of 250 MW with a FiT rate of P5.90 per kWh.

As of May 2017, only four projects have been built with a total capacity of 28.70 MW. The rate has been degressed this year to P5.8705 per kWh as called for by the FiT rules. The incentive scheme ends this year. — Victor V. Saulon

ABOUT FOUR in every 10 Filipino households has experienced poverty at least once in the previous three years, with two Mindanao regions leading the country in households vulnerable to poverty, according to a study by a state think tank.

Philippine Institute for Development Studies (PIDS) researchers Christian D. Mina and Celia M. Reyes said that 37.7% of the sample households fell below the poverty line once during the period, using data from 2003 to 2009.

However, it also said that eight in every 10 or 77.4% of poor households were classified as vulnerable — those threatening to slip below the poverty threshold.

The study noted that the Caraga region and the Zamboanga Peninsula had the highest proportion of vulnerable households.

The never-poor households meanwhile were mostly from the National Capital Region, and neighboring regions such as Central Luzon and Calabarzon.

“This study found that vulnerable households, regardless of whether poor or not, were more susceptible to unobservable idiosyncratic than covariate shocks,” the paper read.

Idiosyncratic shocks are those that specifically impact individuals or households such as injuries, accidents, while covariate shocks are those that can affect the entire community or a larger geographical unit such as natural disasters and a human or animal epidemia.

The researchers explained that they were more vulnerable to idiosyncratic shocks “probably because of the latter’s direct and more specific impacts.”

“Covariate shocks have indirect and varied impacts across households. This could point to the imperfect risk-sharing among households, poor functioning of the insurance mechanism within communities, and the difficulty of anticipating idiosyncratic shocks,” the research paper said.

To address this, the researchers said that the government should continue to increasing investment in education through the Pantawid Pamilyang Pilipino Program, and the Unified Student Financial Assistance System for Tertiary Education law.

It also recommended to raise the competitiveness of the agriculture sector — where its workers are less-educated individuals — to boost labor demand.

“One way to enhance the sector’s competitiveness is by promoting agricultural diversification and market consolidation. The government should remove bias toward traditional food crops (rice and corn) and increase support to more profitable high-value commodities,” the research said.

The researchers likewise batted for capacity-boosting programs such as the Go Negosyo Act.

“Stronger implementation of laws promoting entrepreneurship (e.g., Go Negosyo Act) and provision of technical and financial assistance to budding entrepreneurs are also worthwhile strategies,” they said.

“The government should examine the Social Security System (SSS) pension system to improve its provision of pension for its retirees, similar to the Government Service Insurance System (GSIS). In addition, emergency assistance programs, such as loans during calamities provided by GSIS and SSS, can serve as buffer during times of emergency,” they added. — Elijah Joseph C. Tubayan