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Farmers in India wrestle with shift to eco-friendly methods

REUTERS

MUMBAI — Mumbai chauffeur Nutan Pathak is a farmer at heart. Pathak, 44, migrated from his village in eastern Bihar state over two decades ago to work in the big city on the other side of the country, hoping to supplement his family’s income reliant on wheat and rice from their 1.5-acre (0.6-hectare) farm.

His decision to leave paid off. Pathak’s steady salary from the city job kept his family afloat even as crop yields dropped consistently due to the droughts and floods ravaging his farm.

”It either doesn’t rain or it rains so much that it floods. We get just one yield every year. It wasn’t like this when I was growing up,” Mr. Pathak told the Thomson Reuters Foundation. Now he leases his field to villagers who share half of any profit with him.

But he would like to go back to his land if a push towards eco-friendly agriculture helps farmers cope with worsening climate pressures and pays off financially.

Agriculture is India’s biggest employer, supporting the livelihoods of 250 million farmers and informal laborers – but their work is getting harder as climate change makes living off farming difficult, pushing up debt, migration and suicides.

Worries over falling yields have driven up the use of chemical fertilizers that are stripping the soil of nutrients and fuelling agricultural emissions on a warming planet.

In response, green farming projects have taken root in India, where staple crops include rice, wheat, maize, sugarcane, cotton and groundnut.

But experts say the scale and success hinges on how well the approach protects poor farmers’ incomes.

“If you want to sustain agriculture as the biggest employer, and want to bring in sustainable farming, first bring living income to farmers,” said Devinder Sharma, an independent expert on agricultural policy.

“As a nation, we need to move towards agro-ecology but these (sustainable farming projects) will only bring about cosmetic changes until you provide farmers an assured income,” he added.

A government-backed guaranteed price for natural produce, subsidies to cover losses and stronger marketing channels would all help, he said.

Worldwide, rice is a staple food for more than 3 billion people while flooded paddy fields account for 12% of humanity’s methane emissions – equivalent to 1.5% of total greenhouse gas emissions – according to the Asian Development Bank.

Asia-Pacific accounts for the highest emissions from agriculture, partly because of the region’s rising use of synthetic fertilizers in rice cultivation, the bank says.

Farmers’ incomes in India, the second-largest producer of rice globally after China, are wedded to paddy yields. That makes them reluctant to shift away from conventional methods of pumping fertilizers onto fields to raise production.

But farmer Jitendra Singh in northern India has made the switch from high fertilizer use, incentivized by the prospect of extra income from generating carbon credits through lower-emitting methods, which can be traded on international markets.

He no longer transplants paddy seedlings into flooded fields, but directly sows them into the soil. Besides reducing methane emissions, that has cut water use, time needed for sowing and the use of chemical herbicides and fertilizers.

On a rice farm in eastern Odisha state, however, Gurcharan Mahanta seems uninterested in a regional project to promote millet, a long-forgotten crop making a comeback because it is resilient to droughts fuelled by climate change.

Mr. Mahanta, 54, said his high-yielding hybrid rice variety fetched him a good price, which millet would not with a small consumer base. Growing paddy is also less labor-intensive. “I go by the market demand,” he said.

More than 80% of farmers in India own less than five acres – and many keep spending on fertilizers and pesticides, hoping for good yields even though they face a crushing burden of debt.

Nearly 11,000 farmers, cultivators and agricultural laborers took their own lives in 2021, averaging about 30 deaths a day, with bankruptcy the leading cause, according to government data.

In a bid to support these smallholders and make farming more climate-friendly, India is promoting organic and natural farming, encouraging diversification to cut dependence on one major crop and incentivizing solar-powered water pumps for irrigation to reduce the use of fossil fuel power.

At a meeting of the Group of 20 (G20) agriculture ministers this year, Prime Minister Narendra Modi highlighted the disproportionate impact of climate change on agriculture in the Global South and said Indian farmers are taking up natural farming to revive the soil.

“Our policy is a fusion of back to basics and march to the future. We are promoting natural farming as well as technology-enabled farming,” he said in a speech.

Yet agricultural scientists estimate that fewer than 5% of Indian farmers have switched to sustainable farming methods, even though many are aware of the threat of global warming and the rising costs of conventional practices.

“Farmers understand climate change. They worry about rain and droughts. But they will not understand sustainable agriculture until their problems are first understood,” said Vikram Singh, joint secretary of the All India Agricultural Workers’ Union.

Despite the challenges, sustainable farming has brought some success stories, including young people who have given up city careers in tech or pharmaceuticals to return to family farms.

But the wins are patchy — and, in some cases, the eco-friendly switch has added to farmers’ stress. In the southern Indian state of Telangana, for instance, millers are turning away from genetically modified BT cotton in response to rising global demand for sustainable organic cotton.

But organic seeds are rare in India where BT dominates and cotton-processing infrastructure is designed for large volumes.

Addressing issues like these — and ensuring that sustainable methods boost crop yields and incomes — will be key to bringing would-be farmers like Mr. Pathak back to the land they love.

Wrapping up his day driving through the manic Mumbai traffic, Mr. Pathak said he pined for the clean air of his village, his jute bed and the farm-fresh gooseberries he enjoys on his annual vacation back home.

He hopes to return to that traditional rural life if the economics stack up and local markets for naturally grown produce thrive. He suggested farmers could find other income sources too like selling milk to dairies with village networks, helping them earn between harvests and protecting them from climate extremes.

Shiraz Wajih, president of the nonprofit Gorakhpur Environmental Action Group, urged farmers and agricultural scientists to work together to create solutions on the ground.

Local production of inputs for natural farming can cut costs and dependence on outside markets while creating jobs, he said. And fine-tuning farm processes suited to each region’s ecology would boost acceptance of greener methods, he added.

Wajih said most farmers do not want to leave their land, as seen during COVID-19 lockdowns when migrant factory workers returned to their farms to keep them going in tough times.

“People are aware of job options that can pay them better. But land is always the permanent address of farmers,” he said. — Thomson Reuters Foundation

Philippines ranks 69th in 2023 network readiness list

The Philippines ranked 69th out of 134 economies with a score of 47.24 (out of a possible 100) in the 2023 edition of Network Readiness Index (NRI) by the nonprofit research organization Portulans Institute. The index assesses the application and impact of information and communication technology (ICT) in economies around the world based on four pillars: technology, people, governance, and impact. The country was the fourth lowest in the region, ahead of Mongolia (83rd), Cambodia (108th), and Laos (109th).

How PSEi member stocks performed — November 24, 2023

Here’s a quick glance at how PSEi stocks fared on Friday, November 24, 2023.


Peso to move sideways as market waits for leads

FREEPIK

THE PESO will likely trade sideways against the greenback this week as market players await fresh leads, such as the month-ahead inflation forecast of the Bangko Sentral ng Pilipinas (BSP). 

The local currency closed at P55.38 versus the dollar on Friday, appreciating by a centavo from Thursday’s P55.39 finish, data from the Bankers Association of the Philippines’ website showed.

This was the peso’s best close against the greenback in more than three months or since the P55.19-a-dollar finish on Aug. 2.

Week on week, the peso likewise gained 29 centavos from its P55.67 close on Nov. 17.

The local unit opened Friday’s trading session stronger at P55.35 per dollar. Its worst showing for the day was at P55.49, while its intraday best was at P55.30 versus the greenback.

Dollars traded rose to $1.19 billion on Friday from the $1.07 billion recorded on Thursday.

The peso was a tad stronger on Friday amid hawkish signals from the central bank chief, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

BSP Governor Eli M. Remolona, Jr. on Friday said monetary policy will remain “hawkish for a while,” reiterating that the Monetary Board could still resume tightening if inflation picks up anew.

“If the inflation rate doesn’t go down as projected, we have no choice,” Mr. Remolona said. “But what we are watching more than the inflation rate itself is the expectations; if they get de-anchored, we’ll have to do something.” 

At its Nov. 16 policy meeting, the BSP kept its target reverse repurchase rate at a 16-year high of 6.5% amid easing inflationary pressures following an off-cycle hike of 25 basis points (bps) last month.

The Monetary Board has now raised borrowing costs by a total of 450 bps since it started its tightening cycle on May 2022.

It will hold its final policy meeting for this year on Dec. 14.

Meanwhile, the dollar slightly eased versus major global currencies on Friday amid lower global crude oil prices, providing support to the peso, Mr. Ricafort said.

This was due to possible delays on further oil production cuts by members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), he said.

OPEC+ has delayed a ministerial meeting expected to discuss oil output cuts to Nov. 30 from Nov. 26 as producers struggled to agree on production levels and hence possible reductions, OPEC+ sources said, Reuters reported.

Three OPEC+ sources said this was linked to African countries. OPEC+ said after its last meeting in June that the 2024 output quotas of Angola, Nigeria and Congo were conditional on reviews by outside analysts.

Sunday’s meeting of the OPEC+ had been expected to consider further changes to a deal that already limits supply into 2024, according to analysts and OPEC+ sources.

For this week, the peso may move within the P55.20 to P55.70 range amid the lack of major catalysts, Security Bank Corp. Chief Economist Robert Dan J. Roces said.

Potential trading drivers this week include data such on the country’s budget balance in October (Nov. 29), October bank lending (Nov. 30) and manufacturing activity for November (Dec. 1), as well as the BSP’s month-ahead inflation forecast for November (Nov. 30), Mr. Ricafort said.

Markets are also pricing another pause from the US Federal Reserve next month, he said. 

The US central bank held borrowing costs steady at 5.25-5.5% for the second straight meeting earlier this month after it hiked policy rates by 525 bps from March 2022 to July 2023. 

Mr. Ricafort expects the peso to range from P55.15 to P55.65 per dollar this week. — Keisha B. Ta-asan with Reuters

Local stocks climb on peso’s rise, auto sales data

REUTERS

PHILIPPINE SHARES closed higher on Friday as the peso sustained its strength against the dollar last week, and amid data showing higher vehicle sales for October that signaled stronger economic activity.

The Philippine Stock Exchange index (PSEi) climbed by 23.30 points or 0.37% to close at 6,269.50 on Friday, while the broader all shares index rose by 20.21 points or 0.6% to finish at 3,348.22.

“The local bourse gained by 23.30 points to 6,269.50, thanks to the strengthened peso against the dollar. This positive momentum was further fueled by robust auto sales in October, indicating resilient consumer demand despite high inflation and elevated interest rates,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

On Friday, the peso closed at P55.38 versus the dollar, rising by a centavo from Thursday’s P55.39 finish, data from the Bankers Association of the Philippines’ website showed.

This was the peso’s strongest close against the greenback in more than three months or since the P55.19-a-dollar finish on Aug. 2.

Meanwhile, a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) released last week showed new vehicle sales increased to 38,128 units in October from 32,146 units in the same month a year ago.

However, car sales declined by 1.3% from 38,628 units sold in September amid elevated inflation.

For the first 10 months, CAMPI-TMA members sold 352,971 units, up by 25.9% from 280,300 units a year ago.

“Overseas, the temporary pause in the conflict between Israel and Hamas also contributed to a more optimistic market sentiment,” Ms. Alviar added.

“Philippine shares traded quietly, [but investors] became bargain hunters as investors were optimistic that the US economy would get a boost following Black Friday,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Back home, sectoral indices were mixed at the end of Friday’s trading. Property climbed by 31.36 points or 1.18% to 2,689.88; services went up by 9.66 points or 0.63% to 1,521.29; and holding firms rose by 28.58 points or 0.48% to 5,976.28. 

On the other hand, industrials fell by 21.17 points or 0.23% to 8,926.32; financials retreated by 1.44 points or 0.08% to 1,745.72; and mining and oil declined by 5.39 points or 0.05% to 9,660.30.

Value turnover reached P2.68 billion on Friday with 445.73 million issues switching hands, higher than the P2.33 billion with 453.55 million shares traded the previous day. 

Decliners outnumbered advancers, 94 versus 78, while 51 names ended unchanged.

Net foreign selling stood at P123.04 million on Friday versus the net buying worth P85.63 million net foreign inflows recorded on Thursday. 

Philippine financial markets are closed on Monday due to a public holiday for Bonifacio Day. — R.M.D. Ochave

MRT-3 fare hike seen approved next year

PHILSTAR

METRO RAIL TRANSIT Line 3’s (MRT-3) fare hike petition will likely be approved by next year, the Department of Transportation (DoTr) said. 

“It will go ahead but not right away. It is still being reviewed, maybe by next year,” Transportation Secretary Jaime J. Bautista told reporters on the sidelines of a forum last week. 

The fare hike increase is for a P2.29 in boarding fare, or a 21-centavo increase per kilometer.  Once the proposal is approved, the boarding fare will become P13.29, while the distance fare will be P1.21 per kilometer.  

In July, the DoTr said the MRT-3’s fare hike petition was refiled after a technical lapse in its previous filing.

The Transportation department had denied a previous proposal, noting that the MRT-3 management had failed to issue a notice of public hearing.

Currently, the boarding fare at the MRT stands at P11, while the distance fare is a peso per kilometer.

The fare hike petition will be approved before a private entity takes over the operations and maintenance of the MRT-3 by 2025, Mr. Bautista said.

The DoTr has said it is studying its options for the privatization of the MRT-3 once its build-lease-transfer contract lapses in 2025.

In September, the DoTr said it is reviewing the rules governing the handling of multiple unsolicited proposals after receiving a second bid to operate MRT-3. — Ashley Erika O. Jose

Palawan manufacturing ecozone under study

PHILSTAR FILE PHOTO

THE Philippine Economic Zone Authority (PEZA) said it is studying a major public economic zone (ecozone) within the Iwahig Prison and Penal Farm in Puerto Princesa, Palawan.

“It is still under study; it is a mega ecozone. If you notice, that is the trend right now in ASEAN. They are able to bring in big-ticket projects or large and high-value projects because they have thousands of hectares to offer to investors,” PEZA Director General Tereso O. Panga told reporters last week.

He said the targeted locators are  manufacturers, particularly car and electric vehicle companies.

“We are talking with the Bureau of Corrections for the 26,000 hectares of land. I think car manufacturing and electric vehicles would be ideal in this area,” he said.

“We want this ecozone to be self-sustaining, so that all their power and water needs will all be developed within that area. That’s the idea.  It will use renewable energy and be sustainable,” he added.

Mr. Panga said talks are entering their final stages with the Bureau of Corrections, which will result in the signing of a memorandum of agreement (MoA) for the use of the property.

“We will start with due diligence; within a month or so the MoA might be signed,” he said.

He said that the study will determine how much PEZA will spend on development, as well as how the development will be phased.

“There are a lot of modalities; we can always offer land as our equity. …we (may) not really have to spend that much,” he added.

He said that a similar scheme was used in some of the PEZA ecozones like Camp John Hay in Baguio City.

“Although we did not put in money to develop it, the locators offered to develop at their expense,” he added.

Asked why PEZA wants to develop a public ecozone he said: “There are no more large areas of land — big enough to accommodate big-ticket projects — in the Philippines that are privately owned.”

“We want to develop the whole supply chain… If there’s anything we want to highlight, we want to see… an area where the ecosystem can be developed to facilitate the whole supply chain of manufacturing,” he said.

There are four public ecozones, in Cebu, Baguio, Cavite and Pampanga

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the initiative will help stimulate economic growth and development.

“The area will primarily be attractive for tourism, so investments by both local and foreign investors would be another source of economic and other business activities which will also creating more jobs or livelihood,” Mr. Ricafort said.

He said that the creation of jobs and businesses in the area will help maximize the potential of Palawan.

“This will also help the area to become more self-sufficient by producing more rather than importing from other areas around the country via ship, being a separate group of islands relatively far from mainland Luzon, Visayas, and Mindanao,” he added. — Justine Irish D. Tabile

PEZA says most wish list items addressed in CREATE MORE

THE Philippine Economic Zone Authority (PEZA) said the proposed amendments to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act contained in a bill approved by the House of Representatives last week addressed most of its concerns about the law.

“Almost everything that was requested by PEZA was sustained by Rep. Jose Ma. Clemente S. Salceda. So, we are happy with the version of the House,” PEZA Director General Tereso O. Panga told reporters last week.

The House approved the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill Tuesday, which gave investment promotion agencies (IPAs) the authority to grant tax incentives.

“Basically, it will restore all powers of all IPAs — the authority to grant incentives to registered projects without having to go through another layer,” Mr. Panga said.

The CREATE MORE bill amended the CREATE law’s Section 292, or Extent of Authority to Grant Tax Incentives. Previously, IPAs were delegated authority by the Fiscal Incentives Review Board (FIRB) to grant tax incentives. The proposed amendments allowing IPAs to grant incentives as long as the registered project or activity is listed in the Strategic Investment Priority Plan. 

Mr. Panga said that under the CREATE MORE bill, the FIRB, which formerly had to review all projects worth P1 billion or more, will serve as a policy-making body.

“The FIRB will be concerned with policy making. Let’s say we want to attract niche industries or emerging technologies, they can come up with new incentives packages which they will endorse to the IPAs,” he said.

The bill also allowed registered business enterprises in the information technology-business process outsourcing (IT-BPO) sector to be entitled to incentives even if they conduct business under alternative work arrangements, as long as they are compliant with the on site requirements set by the IPAs.

Mr. Panga said this amendment also covers PEZA which previously requested to allow its locators to implement work-from-home (WFH) arrangements, in order for it to have “equal footing” with the Board of Investments, which can provide incentives for IT-BPOs with up to 100% WFH arrangements.

Prior to the amendment, Section 9 of the CREATE law required a qualified registered project or activity under an IPA administering an economic zone to operate exclusively within the geographical boundaries of the zone, with non-ecozone activities not entitled to incentives.

Mr. Panga has said that by allowing PEZA to provide incentives to IT-BPO registered businesses while implementing hybrid arrangements will support IT developers putting up IT centers.

PEZA allows 70% on-site and 30% WFH activities for locators seeking to enjoy incentives. — Justine Irish D. Tabile

Zero-tariff bill for imported built-up EVs filed in House

EREN GOLDMAN-UNSPLASH

A BILL seeking to impose zero tariffs on imports of completely-built electronic vehicles (EVs) has been filed in the House of Representatives, with the measure proposing to run until 2029.

The measure proposes to amend Republic Act No. 11697 or the Electric Vehicle Industry Development Act (EVIDA).

Under the current law, imports of completely-built EVs are eligible for incentives under the Tax Reform for Acceleration Inclusion (TRAIN) law.

House Bill No. 9573 also seeks to include specify both two-, three-, and four-wheeled vehicles under the definition of EVs.

“Limited interpretations of the EVIDA have effectively denied two-wheeled electric vehicles access to fiscal incentives granted to electric vehicles,” Albay Representative Jose Ma. Clemente S. Salceda, who wrote the measure, said in its explanatory note.

He noted that 60% of EVs are two-wheeled, which meant that majority of EVs do not benefit from tax incentives.

Electric motorcycles are also considered more affordable and will have less of an impact on congestion, according to Mr. Salceda. 

He said the measure would help the Philippines comply with the Paris Agreement, which seeks to to limit global warming to 1.5°C by cutting greenhouse gas emissions by 43% by 2030.

Mr. Salceda added that some 99.77% of cars are still powered by fossil fuels.

Legislators have filed a separate measure seeking to regulate the use of EVs to ensure road safety and traffic management.

The Department of Energy said in August that it expects EV registrations to rise 30% each year. — Beatriz Marie D. Cruz

Makati Business Club urges ARTA to organize private-sector advisory group

THE Makati Business Club (MBC) said that the Anti-red Tape Authority (ARTA) needs to create a private sector advisory council to help guide its ease of doing business initiatives, akin to the Private Sector Advisory Council (PSAC) organized by the national government.

“ARTA can set up a group from the private sector that can actually provide input to ARTA,” said MBC Chairman Edgar O. Chua told reporters last week.

“It could be like what the government has done with the PSAC. They set up PSAC to provide advice to the government to know which sectors should be focused on, although that is more geared for investment and some policies also,” he added.

He said the council will help ARTA improve the process of doing business, which he said needs more streamlining and standardization.

“On the top of the list is to simplify all the requirements both at the national and local level, because most of the problems are at the local level,” Mr. Chua said.

He said that the requirements differ in each province, municipality and even barangay. 

“So even if I was able to get a permit from the national level, if I go to the site where I will put up the project, I will be asked for many permits and that process should be simplified,” he said.

Asked on the success of ease of doing business efforts, he said: “It’s not successful yet because it is not going to happen overnight. It covers a lot of things. And the problem is each municipality, even each barangay, is a kingdom in itself.”

“We have not standardized the requirements all over, that is why when you go to a barangay in a different province, they will have different requirements.  So, we should standardize and simplify,” he added.

Separately, ARTA on Sunday urged the public to participate in the Report Card Survey (RCS) 2.0 which is set to enter the first phase of implementation from the third week of November to March 2024.

“ARTA strongly encourages the public to let their voice be heard by answering this survey. Their feedback is very important to us, and we need everyone’s cooperation as we strive to improve the ease of doing business in the country,” said ARTA Secretary Ernesto V. Perez in a statement.

RCS 2.0 evaluates the service delivery of government offices nationwide through feedback from the transacting public regarding the agencies’ adherence to the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.

The first phase will ask selected clients of the 860 covered government agencies around 40 questions to gauge their satisfaction.

A survey questionnaire which can be accomplished on-site or by phone interview and inspection checklist will also be conducted and accomplished by ARTA’s third-party survey contractor Philippine Dynamics, Inc. (PDI) with pre-identified agencies on unannounced dates and times.

Before the end of the year, PDI targets surveying 215 agencies, while the remaining agencies will be finished by March 2024. — Justine Irish D. Tabile

Chinese trade show orders led by durian, banana, coffee, pineapple

CITEM

DURIAN, banana, specialty coffee, and pineapple were the top-performing commodities from the Philippines at the China International Import Expo (CIIE), the Department of Trade and Industry (DTI) said.

The Philippine delegation consisted of 16 food and beverage businesses, head of delegation Ceferino S. Rodolfo, Trade Undersecretary and Board of Investments (BoI) Managing Head said in a Viber message.

Sales booked include purchase agreements signed prior to the opening of the trade show, which totaled $876.63 million, and were turned over and signed during the event.

“More than $226 million was recorded under booked sales, sales under negotiation, retail sales, and business matching activities after the six-day trade exhibition,” the BoI said in a statement over the weekend.

Aside from the 16 food exhibitors, the Philippine delegation was also joined by four other Philippine businesses supported by the International Trade Centre from the food, consumer, and services sectors.

Separate from the overall export sales at the Chinese expo, business matching activities led by the Export Marketing Bureau of the Department of Trade and Industry also generated sales of $3.4 million.

The business matching activities were done in partnership with the Bank of China, the BoI said.

“The CIIE has become an important platform for the country to showcase its best-selling food products and attract potential investors in China, creating new business opportunities and boosting the economy,” Mr. Rodolfo said at the event.

“The Philippine government is keen on exploring opportunities for partnerships with Chinese enterprises to increase its export capacities to China by enhancing the entire value chain,” Philippine Trade and Investment Center — Shanghai-based Commercial Counselor Glenn Peñaranda said.

DURIAN EXPORTS
During the event, the BoI said the Philippine pavilion hosted tastings of the main durian export variety, known as Golden Puyat.

“Chinese consumers who have tasted the same have likened the homegrown durian to Malaysia’s own variety, ‘Musang King,’ which is currently the most expensive durian in the Chinese market,” it added.

The Philippines started durian exports to China in April.

After a few months of market access, the BoI said that China has become the major export destination for fresh durian, accounting for 3,481.29 metric tons out of 3,916.36 metric tons in durian exports in the 10 months to October.

“This year, the focus on durians at the CIIE is celebrated and supported, especially for hundreds of small farmers who will benefit from these exports,” the BoI said.

“This signals a promising future for the Philippines’ local agricultural communities as it is also expected to generate at least 10,000 direct and indirect jobs,” it added. — Justine Irish D. Tabile

ERC may not set price ceiling for geothermal auction

MINDANAO geothermal facility located in Kidapawan City — EDC

THE Energy Regulatory Commission (ERC) said it expects to set price parameters for the geothermal auction by next month for the third round of the Green Energy Auction (GEA), and maintained the option of not setting a ceiling at all.

“We are currently studying the pricing parameters for geothermal. Our target with that is it should be finished by December… after that, discussions with DoE (Department of Energy),” ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said on the sidelines of the ASEAN Clean Energy Week last week.

The ERC determines the green energy auction reserve (GEAR) prices, or the maximum price in peso per kilowatt-hour that will serve as the ceiling price in GEAs.

The GEA program aims to promote renewables as a primary source of energy through competitive selection of renewable energy output.

Ms. Dimalanta said last month that the ERC is considering setting no ceiling prices for the upcoming round of GEAs.

Currently, she said that instead of GEAR prices, the DoE  has requested the setting of pricing parameters.

She said regulators want to be “clear as possible” on the steps to be followed by bidders across the entire process.

“We’re open to not having a GEAR for geothermal and pumped storage hydro because we recognize the business model there is different. The funding requirements are different so it’s very hard to set out that number and make them bid,” Ms. Dimalanta said.

“Second, for geothermal and pumped storage hydro, there are only limited players so there’s really no auction to speak of. But for solar, there are so many players so it’s really a prime condition for an auction with a set tariff,” she added.

Asked about concerns GEAR prices may be too low, she said: “We’re open to reviewing the rates. What our market operation service will do is to conduct another discussion with the developers and see what else may be adjusted.”

“We’re also cautious about it because it may be unfair to those who have submitted bids before and took that risk of bidding at those rates so we’re reviewing that.”

GEA-3 may be conducted in the first quarter of 2024, she said, after an original timetable of the fourth quarter of 2023.

In GEA-2, the DoE opened for bidding a total capacity of 11,600 megawatts (MW).

It said in July that the auction resulted in bids to provide 3,580.76 MW, later reduced to 3,440 MW after some participants failed to comply with auction requirements. — Sheldeen Joy Talavera