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New quay cranes at ICTSI’s Manila port now operational

ICTSI PHOTO

RAZON-LED International Container Terminal Services, Inc. (ICTSI) on Wednesday said its three new quay cranes at Manila International Container Terminal (MICT) are now operational, boosting its capacity.

“The acquisition of these new quay cranes represents a significant step forward to MICT’s expansion and modernization. Their addition enables us to handle cargo loads more efficiently, leading to faster vessel turnaround times and better operations overall,” MICT Chief Executive Officer Christian L. Lozano said in a statement.

Operated by ICTSI, MICT is one of the three terminals in the Port of Manila. It has the largest quay crane fleet with 18 units to date.

“The operational efficiencies contributed by the new cranes enable the terminal to better manage peak periods and high cargo volumes, ensuring smoother and more predictable operations for all stakeholders. These improvements enhance the overall customer experience, providing shippers and consignees with more reliable and timely services,” ICTSI said.

It added that the commissioning of the three cranes “underscores MICT’s commitment to providing the highest levels of port services and boosts the terminal’s capacity to handle the increasing demands of modern container shipping.”

Meanwhile, the Manila terminal has also started the second phase of its Berth 8 expansion, which would include the construction of a 300-meter wharf and 10-hectare container yard, ICTSI said.

Once completed, the expansion will increase MICT’s capacity to 3.5 million twenty-foot equivalent units (TEUs), boosting its current capacity by 200,000 TEUs.

The Berth 8 will be equipped with three quay cranes for handling large capacity vessels with a capacity of up to 18,000 TEUs, ICTSI said. The new cranes are expected to arrive in 2027.

Last year, the company said adding a new berth in Manila is expected to cost P15 billion and would allow it to serve more large foreign vessels.

ICTSI operates 33 terminals in 20 countries across six continents.

Its shares rose by P3 or 0.85% to end at P356 apiece on Wednesday. — Ashley Erika O. Jose

Bacolod Rum Fest, a toast to Tanduay’s 170th year

By Chelsea Visto

TOP RUM producer Tanduay Distillers, Inc. marks its 170th anniversary with the return of the Rum Festival at the Bacolod City Government Center from Aug. 10 to 18.

Now in its fourth installment, the festival is a testament to how Bacolodnons love their booze, food, and tunes.

Flairtending competitions, culinary exhibits and competitions, rum masterclasses, parades, and street dancing are in store during the nine-day celebration. There will also be Rum and Music Nights every day at the Food Park of the Bacolod Government Center where most of the events will be held.

The festival highlight is the annual concert, where original Pilipino music (OPM) powerhouses like Sandwich and Ely Buendia have previously performed. This year, Tanduay promises to kick the party up a notch by inviting two headliners to the show — rock band Juan Karlos and hip-hop quartet ALLMO$T.

Bacolod is once again expecting a swarm of tourists, after drawing a record-breaking attendance of 35,000 people during Arthur Nery’s set in 2022.

The rum festival has historically only been staged in Bacolod, the sugar capital of the Philippines. Its province, Negros Occidental, cultivates over 190,000 hectares of sugarcane, the ingredient essential to rum production.  “Bacolod is one of the provinces or cities that has the biggest consumption, compared to all other branches in Visayas and Mindanao,” said City Councilor Em Ang during a press conference announcing the event on July 30 at the Century Park Hotel in Manila.

Today, Tanduay is the best-selling rum brand worldwide, said Lucio Tan III, President and Chief Operations Officer of Tanduay Distillers, Inc., and that is a title they’ve held for seven consecutive years he said. Their consistently high demand has allowed them to expand to other Southeast Asian countries, the United States, and Europe.

“Many rum drinkers do not know that most of the Tanduay rum they drink is produced in Bacolod. For a long time, the rum production in Bacolod has been there. It should be celebrated, just like many other things that we celebrate in the city,” Ms. Ang said.

Much like how the famous Oktoberfest is held yearly in late September through early October, the rum festival is typically slated in August. Thanks to the festival, Bacolod enjoys an economic boost and bustling tourism at that time, said the city’s Chief Tourism Operations Officer Ma. Teresa Manalili during the press conference. “The tourism arrivals now in Bacolod City, year 2023, is around 780,916, contributing to around P7 billion in tourism receipts. That is a bigger impact to our local community, especially with revenues, livelihood, and job generation in Bacolod City,” she said.

Although the rum festival is popular locally, Tanduay aspires to also promote their flagship event to foreign visitors. They hope to achieve the same commercial success as Bacolod’s Masskara Festival, one of the largest festivals in the country, attracting thousands of local and international visitors yearly.

BPI shortens SEED Bonds offer period

BW FILE PHOTO

BANK of the Philippine Islands (BPI) has shortened the offer period for its 1.5-year Sustainable, Environmental, and Equitable Development (SEED) Bonds amid strong investor demand, it said on Wednesday.

“Following overwhelming demand across institutional, high-net worth and retail clients, the Bank of the Philippine Islands has decided to shorten the public offer period for its 1.5-year peso-denominated fixed-rate BPI Sustainable, Environmental, and Equitable Development Bonds,” BPI said in a disclosure to the stock exchange.

“The offer, which was originally set to run from July 19, 2024 to Aug. 2, 2024, will now close early on Aug. 1, 2024. The bank expresses its gratitude to the investing public’s strong support for the offer,” it said.

BPI is looking to raise at least P5 billion through the 1.5-year papers with an option to upsize.

It earlier said that net proceeds from the BPI SEED Bonds will be used to finance or refinance new or existing eligible green and/or social projects consistent with its Sustainable Funding Framework.

It added that it will use the offering as an opportunity to promote projects that contribute to the United Nations’ Sustainable Development Goals.

The Securities and Exchange Commission on July 18 confirmed that the BPI SEED Bonds qualify as ASEAN Sustainability Bonds.

The papers are priced at 6.2% per annum payable quarterly. The bank is selling the bonds for a minimum investment amount of P500,000 and additional increments of P100,000.

BPI will issue the SEED Bonds and list them on the Philippine Dealing and Exchange Corp. on Aug. 9.

The bank tapped BPI Capital Corp. and Standard Chartered Bank as the joint lead arrangers and selling agents for the bond offer.

BPI’s net income grew by 17.5% to P15.3 billion in the second quarter on the back of higher revenue growth.

Its shares dropped by 80 centavos or 0.66% to end at P121.30 apiece on Wednesday. — A.M.C. Sy

​Disclosure of AI use to boost consumer trust in PHL brands

REUTERS

BRANDS’ disclosure of how their data is used for artificial intelligence (AI) is expected to increase consumer trust and revenues, consumer engagement platform Twilio said.

“Their ability to move beyond personalization will lead to greater trust being built in those brands. By default, what should flow from there is increased revenue and profits,” Nicholas Kontopoulos, vice-president of marketing in Asia-Pacific and Japan at Twilio, told BusinessWorld on July 18.

Mr. Kontopoulos said informing users on AI use could signal responsibility and be a differentiator for the brand, as this would build rapport, transparency, and accountability.

Twilio’s 2024 State of Customer Engagement Report showed 77% of Filipino consumers demand transparency on how their data is being used in AI, which was the highest percentage among 18 countries surveyed.

This stems from digital maturity among customers and businesses, which shows the importance of data and how these will affect businesses going forward, Mr. Kontopoulos said.

However, the report showed that only 53% of local brands are meeting this expectation. These brands are also less likely to inform consumers when interacting with AI (41%) and disclose with whom customer data is shared (30%).

Twilio’s study also showed that 33% of consumers surveyed will spend more if AI improves customer service. Meanwhile, 78% reported they are likely to stop using a platform that doesn’t personalize engagement.

Among brands, e-commerce retail store Zalora employs Twilio’s AI-powered customer data platform Segment to provide its users with a personalized shopping experience.

Meanwhile, logistics application Lalamove uses AI in its chat system to connect its delivery drivers with customers without compromising personal data, Twilio added.

For entities planning to disclose their use of AI to consumers, Mr. Kontopoulos said they should also consider how they do it.

“There’s no one-size-fits-all approach, but I would start thinking about developing a framework like the Nutrition AI Guide, making sure a customer is aware that they’re talking to an AI when they’re engaging with a chatbot,” he said.

Firms should also include their AI use policy, he added.

Twilio’s survey covered 4,750 business-to-consumer executives and 6,300 consumers. Its platform is used by over 300,000 global enterprises, digital disruptors, and more than 10 million developers worldwide. — Aubrey Rose A. Inosante

OceanaGold Philippines’ net income down 30.7% in Q2

OCEANAGOLD (Philippines), Inc. saw its net income drop by 30.7% year on year to $14.2 million in the second quarter (Q2) from $20.5 million due to lower ore production.

The company’s revenues dropped 22.1% to $68.8 million in the period from $88.3 million a year prior, it said in a disclosure to the stock exchange.

OceanaGold operates the Didipio gold and copper mine in Nueva Vizcaya.

Gold ore production fell by 28% to 23,100 ounces in the second quarter from 32,200 ounces. Copper output likewise dropped by 18% to 2,800 tons from last year’s 3,400 tons.

Production was affected by the lower ore grade mined during the period, OceanaGold said. It also pushed back the extraction of the higher-grade ore body to the third quarter due to a fatality at the company’s mine site last month.

Meanwhile, the company’s gold sales totaled 18,900 ounces, a 42% drop from 32,700 ounces a year ago. Copper sales fell by 37% to 2,200 tons from 3,500 tons.

The average price for gold during the period was at $2,531 per ounce, while copper prices averaged $4.58 per pound.

“The company sold 33% of the second quarter’s total gold doré to the BSP (Bangko Sentral ng Pilipinas),” it added.

Under the company’s Financial or Technical Assistance Agreement, 60% of its net revenues go to the Philippine government.

The company’s net revenues amounted to $11.4 million during the quarter, down from last year’s $39.7 million. This put the government’s share at $6.9 million.

Meanwhile, for the first semester, OceanaGold’s net income declined by 40% to $25.7 million from $42.6 million the same period in 2023. Its revenues fell by 11% year on year to $160.9 million.

“We expect gold production to increase in the second half of the year as we access higher grade ore and increase mining rates from the underground,” OceanaGold Philippines President Joan D. Adaci-Cattiling said.

“We are also continuing to invest in exploration, both near-mine and regionally, and look forward to sharing results in the future.” Ms. Adaci-Cattiling added.

OceanaGold earlier said it expects to produce 120,000-135,000 ounces of gold and 12,000-14,000 tons of copper this year. It is spending $2 million this year on drilling and exploration for an ore body in Nueva Viscaya.

OceanaGold shares fell by 2.32% or 32 centavos to close at P13.48 apiece on Wednesday. — Adrian H. Halili

The Tantocos return to the grocery game

But this time they are going artisanal

THE TANTOCOS are going back to the grocery game, and who better to help them than a long-missed family member?

In 2018, the Tantoco family sold the Rustan’s Supermarket and Shopwise brands to the Gokongwei family’s Robinsons Retail Holdings, Inc. Joel’s Place marks their return to that business, but as Donnie Tantoco — its Chief Executive Officer (and concurrent Rustan’s chair) — makes clear, “We’re perfecting this, it’s very new.”

There are currently two branches: the newest one in Glorietta which opened this month, and the first one in Rockwell, which opened late last year.

“Once we find our stride, we’re going to roll out more Joels. Every Joel is better than the previous one,” said Mr. Tantoco.

WHAT’S IN A NAME?
The place is named after the late Jose Luis “Joel” Tantoco, Mr. Tantoco’s brother who passed away in 2007. Asked why, Mr. Tantoco said in an interview with BusinessWorld on July 30, “One serendipitous reason.” Project Joel was a codename they used when he was conceptualizing the project. Then, a British branding company they consulted drew up a list of first names to christen the place, and out of 50, “They said the best one was Joel.”

“In hindsight, it really makes a lot of sense,” he said.

The concept was borne out of trips to Paris, where Mr. Tantoco observed La Grande Épicerie de Paris, as well as smaller stores in the capital of chic. “That was Joel’s favorite place on Earth. That’s where he discovered his dignity, his confidence, his identity. He was very shy until he discovered Paris,” said Mr. Tantoco of his brother.

“We want this to be like second family; a second home of all our customers — including our employees,” he said. “I wanted our company to be an ark in this more tumultuous world.”

MORE THAN A GROCERY STORE
Joel’s Place is several things: it’s a grocery, but it also has a lunch counter with ready-to-eat meals, a deli, a bakery, and it even has a gelato counter with creations by renowned chef Miko Aspiras.

We toured the aisles of the Glorietta branch of Joel’s Place when it opened on July 18: think local produce straight from Filipino farmers, but also luxurious selections like artisanal olive oils, and European butter and meat.

We saw some familiar names (and more incognito ones) at the lunch counter, buying things while wearing tsinelas (but they were Gucci). “Basically, we’re a replacement for cooking at home. We want to be an extension of your kitchen,” said Mr. Tantoco.

During our visit to the Glorietta branch we got to taste some of the lunch counter offerings. We had the salmon bowl, a combination of a croissant and an empanada, and a probiotic soda. The croissant cost less than P100, and was quite filling and delicious on its own (filled as it was with beef stew). The salmon bowl, made with several grains and garnished with several vegetables, had the same quality, but with a hint of refinement. It cost less than P400. That amount can get you to a lot of places in Glorietta, for sure, but few will have the quality that Joel’s Place has to offer.

“We deal direct,” said Mr. Tantoco. “We don’t concession, we run and own everything. We break through the layers that add to the cost.”

At the grocery, this writer saw French brands and Italian ones, and vegetables we wouldn’t have found anywhere else (fresh artichoke hearts, when everybody else has them canned).

FOOD WITH SOUL
“We wanted to work with artisans. We wanted to provide the space where people that are really into their craft, that are really passionate about their product… there’s a soul. We wanted to be that place, whether it’s European, American, Australian, or a Filipino dairy from Bukidnon,” said Mr. Tantoco. “These people aren’t transactional. This is their calling.”

“We’re in the food business, but it’s an aspiration that people have, on so many levels. Gourmet that’s healthy, that’s accessibly priced,” he said. “That’s the world we’re in. We’re not going to go into the commercial, mainsteam side of grocery that we used to do. It’s really all about making these relationships, and creating an ecosystem that works.

“At the heart of it, it’s a community.”

Joel’s Place in Glorietta 4, Makati is open Mondays to Thursdays from 9 a.m. to 9 p.m. and Fridays to Sundays from 9 a.m. to 10 p.m. — Joseph L. Garcia

Central bank amends electronic payment settlement rules for InstaPay, PESONet

BW FILE PHOTO

ANY planned changes to the settlement of electronic payments coursed through InstaPay and PESONet will now require regulatory approval, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.

The Monetary Board has approved amended guidelines on the settlement of electronic payments under the National Retail Payment System (NRPS) Framework under Circular No. 1196, the BSP said in a statement.

The changes are “part of ongoing efforts to ensure integrity and efficiency of the payment system,” the central bank added.

“Issued under Circular No. 1196 on June 27, the revised guidelines provide operational flexibility to Automated Clearing Houses (ACHs) organized under the NRPS Framework,” it said.

“The Circular requires prior BSP approval for new rules or enhancements to the settlement of e-payments under the Manual of Regulations for Payment Systems. This ensures that all enhancements to the settlement guidelines of ACHs are thoroughly reviewed and approved by BSP prior to implementation,” the central bank added.

The two ACHs organized under the NPRS Framweork are InstaPay and PESONet. InstaPay is a real-time, low-value electronic fund transfer facility for transactions up to P50,000 and is mostly used for remittances and e-commerce, while PESONet caters to high-value transactions.

“Under the policy, ACHs may now lodge requests with the BSP when they deem that adjustments are necessary to enable more settlement cycles, support faster settlement, and improve the overall efficiency of e-payments,” the central bank said.

“For instance, subject to BSP approval, an ACH may recommend the use of a particular demand deposit account (DDA) maintained with the BSP when settling e-payments, instead of separate DDAs. This can be requested in view of evolving circumstances, or when there are new use cases.”

The latest data from the BSP showed the value of transactions done through InstaPay and PESONet surged by 34.6% to P7.98 trillion as of June.

In terms of volume, transactions done via both clearing houses jumped by 66.1% year on year to 660.7 million.

The BSP, Philippine Payments Management, Inc. and PESONet Steering Committee on July 8 activated the third settlement cycle for PESONet transactions, the central bank announced on Wednesday. 

The PESONet Multiple Batch Settlement facility now has a midday schedule, increasing its batch settlements to three cycles per banking day from the previous two cycles done in the morning and afternoon.

“The roll out of “PESONet 3MBS” shortens clearing intervals within a banking day, improves user experience by enabling faster crediting of funds to recipients’ accounts, and facilitates easier cash flow management for businesses,” the BSP said.

“It likewise enables PESONet participating banks and electronic money issuers to better manage settlement risks as settlement of PESONet transactions are now divided among three batches in a banking day,” it added.

In 2023, digital payments made up 52.8% of the volume of retail transactions. In terms of value, 55.3% of retail transactions last year were done online.

The BSP wanted at least 50% of the volume and value of retail transactions done online by end-2023 under its Digital Payments Transformation Roadmap.

The central bank wants online payments to make up 60-70% of the country’s total retail transaction volume by 2028. — L.M.J.C. Jocson

Microsoft says Azure apps outage began as a DDoS cyberattack

MICROSOFT CORP. said an outage of Azure cloud applications was triggered by a distributed-denial-of-service (DDoS) cyberattack.

The DDoS attack began early Tuesday and an error in Microsoft’s automated protection mechanisms worsened the impact rather than mitigating it, the company said in a status update.

Customers were affected in multiple regions, including services running on Azure. For example, mobile ordering at Starbucks Corp. was disabled for hours because of the issues affecting Azure, according to a person familiar with the matter.

Denial-of-service attacks direct internet traffic at a website in mass volume to disrupt it or shut it down. The incidents have become a persistent annoyance for financial institutions, causing intermittent downtime and forcing security staffers to repel the activity.

Reports of outages on Azure and Microsoft 365 began to spike shortly after 7 a.m. in New York and comprised hundreds of complaints at the incident’s peak, according to user reports compiled by Downdetector. Microsoft said the incident was fixed by about 5 p.m. in New York.

The issue also affected multiple Microsoft 365 services and features, Microsoft said in a post on social network X. Microsoft 365 includes common productivity applications like Outlook, Word and Excel.

Mobile ordering for Starbucks had largely been restored by about 1 p.m. in New York. The company was working to address limited interruptions that continued, a Starbucks spokesperson said.

Earlier this month, some eight million computers running on the Windows operating system crashed after the cybersecurity firm CrowdStrike Holdings, Inc. released a flawed software update. In addition, Microsoft has also been grappling with the fallout from a series of cyberattacks that prompted the US government to issue a scathing report calling for company-wide changes.

Microsoft Chief Executive Officer Satya Nadella touted progress in the company’s cybersecurity products during a conference call Tuesday after the company reported quarterly earnings. He said the company has more than 1.2 million security customers.

“We continue to prioritize security above all else,” Mr. Nadella said. — Bloomberg

Wilcon Depot profit falls 10% in Q2

By Revin Mikhael D. Ochave, Reporter

LISTED home improvement and construction supplies retailer Wilcon Depot, Inc. saw a 10% decline in net income to P770.41 million in the second quarter (Q2) from P855.77 million a year ago due to higher operating expenses related to expansion and one-off charges.

In a statement, Wilcon President and Chief Executive Officer Lorraine Belo-Cincochan attributed the profit drop in the second quarter to the one-off charge of P98 million for inventory allowances and loss due to fire.

In April, a fire hit the Wilcon depot branch in Baliwag, Bulacan.

Wilcon Depot’s latest financial statement showed net sales increased by 2.9% to P8.88 billion in the April to June period from P8.62 billion in the same period last year.

The company opened two new Wilcon Depot branches in the second quarter.

“The improved second-quarter performance was partly due to the timing of the long holidays but we also rolled out programs focused on contractors and professionals and best deals promotions to increase turnover,” Ms. Belo-Cincochan said.

Operating expenses, including lease-related interest, rose by 10.2% to P2.61 billion due to expansion-related expenses.

For the first half, Wilcon said its net income fell by 16.9% to P1.51 billion from P1.82 billion last year.

In January to June, net sales rose by 0.2% to P17.18 billion due to the sales from five new stores. Same-store sales in the first half fell by 4.6%.

Wilcon Depot branches saw a 1% decline in net sales to P16.47 billion, while smaller Do-It-Wilcon format stores recorded a 39.1% rise in sales to P488 million. Project sales to institutional accounts increased by 41.5% to P227 million.

Including lease-related interest, operating expenses rose by 8.6% to P5.08 billion.

“We are looking forward to a better second half as we continue to push for higher sales while realigning resources deployed with the current market demand,” Ms. Belo-Cincochan said.

She said the company is planning to open more stores to reach its 100-store target by end-2024.

As of end-June, Wilcon had 95 branches.

Wilcon shares fell by 2.23% or 40 centavos to P17.50 each on Wednesday.

Food for sport as British enlist performance chef

INSTAGRAM.COM_ PRO.PERFORMANCE.CHEF
INSTAGRAM.COM_ PRO.PERFORMANCE.CHEF

MARSEILLE, France — Britain has hired “performance chef” Bryony Johnson to fuel its sailors, serving up dishes such as honey chipotle salmon, rice and black beans and tahini coleslaw with mint and jalapenos.

Ms. Johnson said this was one of the most popular meals among the Olympic sailors so far.

“It’s not just about fuelling somebody, but how it makes them feel,” Ms. Johnson, 39, told Reuters from the team’s base in Marseille, where she is catering for 47 people.

“There was such a big disconnect between the food that people felt they should be eating and what they wanted to eat,” she says of her mission to encourage alternatives to chicken, broccoli, and boiled rice.

“One thing that they absolutely love are the dark chocolate brownies, with almonds for extra protein,” Ms. Johnson said.

Ingredients such as black beans, Ms. Johnson said, are rich in polyphenols, which are an antioxidant.

Among the big sporting names she has cooked for, Johnson lists Roger Federer, boxer Anthony Joshua, and British sailor Ben Ainslie.

Ms. Johnson has to cater for a range of demands, with some athletes looking to gain weight and others want to shed kilograms.

“You give them control over how they want to eat,” said Johnson, adding that she separates carbohydrates from vegetables so that they can pick and choose.

“Because they have worked with nutritionists, they know what works for them individually.”

Ms. Johnson also offers snacks which include rice balls with Oreo biscuits, which has been “an absolute fave.”

While empty plates are the norm, Ms. Johnson said, appetites can wane if an athlete suffers from pre-race nerves. — Reuters

That maddening sight

MAGAT DAM

Almost like clockwork at around this time of the year, we are treated to the spectacle of tons of water overflowing or released from dams every time rainstorms strike.

These events always leave death in their wake (39 fatalities from the recent floods unleashed by storm-enhanced monsoon rains as of this writing), as well as infrastructure and property damage, while floods erode production of rice, corn, and high-value crops.

I don’t know about you, but that seasonal scene always leaves me with a mix of exasperation and dismay, coming as it does this year right in the wake of six months of drought (ok, some bureaucrats balk at that term and prefer the milder term, “dry spell”) that dries up fields as well as taps in parts of Metro Manila. You just never get used to it.

So, we reel from a lack of water in the first half of every year (a “dry spell” serious enough for Catholic bishops to ask the faithful to pray for deliverance from drought and record heat), and from an excess of it in the second half. It is almost a comic situation were it not for the deaths, infrastructure and property damage, as well as other dire consequences to households (and, by inference, to every inconvenienced factory and service worker, teacher and student) and to agriculture, which contributes nearly 9% (used to be a tenth about a decade or so ago) to the overall economy.

For a calamity that can be expected to strike almost to the month each year, one would hope that the government had a solution by now.

Well, at least we no longer hear bureaucrats extol the “resilience” of the ordinary Pinoy every time public services fail big time — an official mantra which more and more citizens now regard as an insulting smoke screen for government incompetence.

And so I await the next public hearing which the Senate will hold any day now on the government’s funding for flood control projects under the Department of Public Works and Highways (DPWH), totaling some P556 billion since the start of this administration in 2022, including about P244 billion just for this year (compared to P182 billion last year, P128 billion in 2022, P101 billion in 2021, and over P90 billion in 2020, according to a Senate statement a few days ago).

SEEKING MODELS
Back to the scene of overflowing dams, which for some reason evokes the image of the Chinese character for “crisis,” consisting of the word “wei” (“danger”) and “ji” (“inflection point,” which the West very loosely — some experts say, erroneously — interprets as “opportunity”): is there opportunity staring us in the face there?

In the wake of the recent calamity, netizens cited examples of how other nations have dealt rather successfully with floods.

Worth noting in Asia are the likes of Japan and Singapore, which prevent floods from overwhelming existing drainage infrastructure through integrated systems that include surface and underground water retention structures that then release the excess runoff slowly into surrounding canals and other bodies of water when floods recede.

Singapore, which had grappled with severe floods from the 1950s (well, it secured its independence in August 1965) to as late as the early 2000s, has built flood management infrastructure that include an 8.9 hectare “pond” on Jurong Island with a capacity equivalent to 50 Olympic-sized swimming pools. There, accumulated stormwater gradually seeps into the aquifer and drains slowly into the sea. And slated to be completed in the third quarter of 2025 is the massive underground Syed Ali Detention Tank that will temporarily hold excess water during heavy rain.

What does this tell us? That even advanced economies like Singapore — which has the wherewithal to plan and execute projects and programs efficiently and effectively — are hard-pressed to keep coping with climate challenges.

NATURAL FLOOD PLAIN
And what of the Philippines?

Civil and environmental engineers (like those of the University of the Philippines who were interviewed on TV after the latest floods) tell us that water always seeks the lowest point, and that the land on which Metro Manila sits has always been a natural flood plain that drains excess waters from surrounding mountains into Manila Bay (oh, great). Blocking that natural flow with manmade structures simply forces floodwaters to find another route through surrounding areas to try to drain into the bay — or else collect like stagnant ponds in the capital region.

My home is perched atop a hill overlooking the Marikina Valley, and I recall watching, back in the 1970s to 1980s, the water from the Marikina River spill amid storms into the adjacent forests… all of which have been replaced completely by subdivisions and commercial establishments.

While it will be interesting to check the components of the DPWH’s flood control program, what is clear from this month’s experience is that rainstorms can overwhelm the capacity of our existing drainage pumping stations. Even a layman can see that our flood-control systems — which should be upgraded or tweaked as regularly as those of our neighbors — have been sorely inadequate. Something more — or even something else — needs to be done.

Pinoys’ general lack of garbage discipline (just note how many times in a week one has seen someone in an SUV throw food wrappers out of the window or how much trash is left on tables or seats in public areas at any given time — even with near-empty garbage bins in plain sight) and local governments’ poor waste disposal systems worsen the problem. But they are not primarily to blame.

THE WAY TO GO
We need not look just to our neighbors for other readily available remedies. By now, many of us are aware that Bonifacio Global City (BGC) has been spared the floods that regularly inundate much of Metro Manila, since it benefits from a big water detention tank lying under Burgos Circle. That facility, reportedly about five-storeys deep, can hold enough stormwater to fill up eight Olympic-sized pools. That water is pumped out to the Pasig River once the floods in Metro Manila recede.

A few days ago, I had the privilege of chatting briefly with Rogelio L. Singson, who had served as Public Works and Highways secretary from 2010 to 2016, president/chief executive officer (CEO) of Maynilad Water Services, Inc. from 2007 to 2010, and president/chairman of the Bases Conversion Development Authority from early 1998 to early 2002, among others. He is currently non-executive director at the Metro Pacific Investments Corp., which has a 51.27% controlling stake at Maynilad Water Holding Co., Inc. (the others being DMCI Holdings, Inc. with about 27.19%, and Marubeni with 21.54%), as well as president/CEO of Metro Pacific Water and Metro Pacific Tollways Corp.

Mr. Singson has always advocated for the construction of more water detention tanks like that of BGC, which was built in the early 1990s as Fort Bonifacio was privatized.

“It isn’t that costly,” he insisted, and in a television interview before the pandemic he said that the BGC facility cost about P65 million. Now, compare that to the DPWH’s own billions of pesos in annual flood control projects that have failed to measure up to the challenge. We have enough money to do several of these dams, water impounding or regulating ponds,” he said.

MORE THAN FLOOD CONTROL
And we are no longer talking just of flood control here, mind you.

As I said, where there is crisis, there may be opportunity. Hence, I was glad to read that President Ferdinand R. Marcos, Jr. himself said last week that the government is now looking for sites outside Metro Manila for big water impounding projects that can also serve irrigation needs.

Water impounding is not a new technology for us, since the United Nations’ Food and Agriculture Organization has been helping the government for quite some time now in putting up small water impounding facilities for far-flung communities nationwide that do not have ready access to potable and irrigation water.

So this is tantamount to hitting three birds with one stone — flood mitigation, irrigation, and household water.

Mr. Singson had also proposed a similar facility in other flood-prone areas like Pampanga, where he said a 200-hectare water-impounding pond can be put up in the Candaba swamp (taking up just a tenth of the entire area.) The idea was opposed by some officials there.

In any case, he said, water impounding can be considered a “medium-term” solution, to Metro Manila’s worsening water supply. The establishment of new dams like Kaliwa in Tanay, Rizal — which has languished for more than two decades — remains the long-term solution to Metro Manila’s worsening water supply woes as Angat Dam, which provides more than 90% of the capital region’s supply, has increasingly fallen short of demand. Metro Manila’s water service concessionaires — Metro Pacific’s Maynilad and Ayala’s Manila Water Co., Inc. — estimate their supply-demand gap is more than 1,500 million liters per day each, with supply remaining relatively stable even as the capital’s congestion worsens.

Both concessionaires have been looking for ways to augment their supply. Maynilad, for example, has allocated some P686 million to transform the four lagoons in the La Mesa Compound in Quezon City, where sludge from water treatment is disposed, into an impounding reservoir for raw water from the Angat-Ipo Dam system. When completed in the fourth quarter of 2025, the six-meter-deep reservoir will store about 200 million liters of raw water. This, Maynilad said the other week, should help address reduced water supply when a “dry spell” forces a lower allocation from Angat.

Mr. Singson said that water impounding may even be better planned and executed at the local level, with local governments and even subdivision and economic zone developers — which know their needs better than the National Government — taking the lead. It may even be a regulatory requirement for new subdivisions to include such floodwater detention tanks in their plans, he said, noting that DPWH flood control drains are designed to accommodate only excess water from major roads and not from subdivisions.

Of course, the devil is always in the details, and if there is one thing that can derail even a well-designed and -planned project, it is the approval of affected communities (just recall the Kaliwa project’s history). Every project, it must be remembered, requires an environmental compliance certificate that has the green light of affected households as a prerequisite. Would folks be amenable to the ground being dug up from under their feet to accommodate such a massive structure? Or would such an inbuilt facility affect the attractiveness of subdivision projects?

But even if communities’ opposition were to pose a significant hurdle to this option, local governments can still choose to locate such structures under public spaces.

Perhaps it would help if the floodwater in these tanks could also be processed into potable water. Is such technology available to us? Of course it is! Maynilad’s New Water Treatment Plant in Parañaque City, for instance, uses water from a sewage treatment plant and converts it into potable water that meets the 2017 Philippine National Standards for Drinking Water. For now, two barangays in the city have been benefitting from this new technology. Elsewhere in Southeast Asia, groups in flood-prone countries like Thailand have developed solar-powered modular facilities that purify floodwaters for household use.

KEY QUESTIONS
So, with all these possibilities on the table, what could pose as major hurdles to moving forward in Metro Manila’s quest for less floods and more potable water?

Asked this, Mr. Singson posed his own three questions, which I guess lawmakers could cover in their upcoming inquiry:

• Are these the right projects?

• Do they have the right cost?

• Do they have the right quality (properly executed according to established technical standards)?

Tatlong tanong lang ’yan; napakasimple nyan (Those are just three simple questions),” he said, explaining that the three points are interrelated, i.e., flawed pricing after anomalous project bidding will affect the quality of materials used. “Sagutin lang nila ’yan (They should just answer those questions). I’ll be as direct as that.”

He declined to elaborate with a chuckle, but one can put two and two together by reading between the lines there.

Water security and a worsening climate are intertwined, and the Philippines has constantly figured as one of the countries worst hit by climate change. Hence, both the government and private sectors have their work cut out for them in figuring out a way towards a more sustainable water supply.

Told in a legislative hearing some years back on Metro Manila’s recurring water crisis that desalination would be too costly an option, one lawmaker replied: “Ang pinaka mahal na tubig ay ’yung walang tubig” (The most expensive water is the water you do not have).

 

Wilfredo G. Reyes was editor-in-chief of BusinessWorld from 2020 through 2023.

Higher capital requirement for HMOs to ensure ample coverage for clients, IC chief says

BW FILE PHOTO

THE PROPOSED higher minimum capitalization requirement for health maintenance organizations (HMOs) could cause “a few” providers to halt their operations but is unlikely to affect larger firms, the Insurance Commission (IC) chief said.

“We studied it and only a few will be hit. If I remember correctly, around seven providers will be affected, but they only have small coverages. What we might do is limit the number of those who have lower capitalization. We’re still open to suggestions,” Insurance Commissioner Reynaldo A. Regalado told reporters on Tuesday.

Mr. Regalado said he hopes to immediately implement the new capital rules as these would help ensure that HMO clients can be adequately covered by their providers.

The IC last month issued an advisory seeking industry comments on a possible increase in HMOs’ minimum paid-up capital requirement, which will be implemented over 10 years.

Under the proposal, from the current P10-million requirement, existing HMOs will need to have at least P50 million in paid-up capital by end-2024, while new HMOs will need to put up at least P100 million in capital.

By end-2025, all HMOs should have at least P100 million in capital. This will be increased to P200 million by end-2028, P350 million by end-2031, and to P500 million by end-2034.

Most of the bigger firms are already compliant with the increased capital requirement as some life insurance companies are setting up or have established their own HMOs, which ensures they have enough buffers, Mr. Regalado said.

Meanwhile, the IC has already closed two HMOs and could close two more, due to their inability to meet the current minimum capital level, he noted.

Mr. Regalado said they will help find ways to keep existing HMOs from being closed down when the higher capital requirements are implemented, including facilitating mergers.

“We’re very open because they have existing coverages already. We have to take care of the public, so the adjustments have to be clearly set out,” he added.

The HMO industry swung to profit in the first quarter amid higher revenues despite increased benefit payouts, IC data showed.

The industry booked a combined net income of P6.8 million in the first three months of 2024, a turnaround from the P319-million net loss incurred in the same period last year, IC data based on the financial statements of 24 licensed HMOs showed.

Only five out of the 24 licensed HMO companies recorded net losses in the period, according to the report, with all firms meeting the current P10-million capital requirement. — A.M.C. Sy