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IAEA unable to determine cause of Zaporizhzhia nuclear plant fire

The International Atomic Energy Agency (IAEA) said late on Monday that its representatives inspected a damaged cooling tower at the Russia-controlled Zaporizhzhia Nuclear Plant in Ukraine but could not immediately determine the cause of a fire there at the weekend.

Moscow and Kyiv have accused each other of starting the fire at the vast dormant nuclear power plant in Ukraine, with Russia blaming a drone attack and Ukraine saying it was likely Russia’s negligence or arson.

The IAEA team found no immediate sign of drone remains and assessed that it was unlikely that the primary source of the fire began at the base of the cooling tower, the IAEA said in a statement on its website.

“The team has not been able to draw definitive conclusions (on the cause of fire) on the basis of the findings and observations so far,” the agency said.

Neither Moscow or Kyiv have reported signs of elevated radiation.

The IAEA said damage was most likely concentrated on the interior of the tower at the water nozzle distribution level, at roughly 10 meters (33 ft) high.

“The team confirmed that there were no significant signs of disturbance of the debris, ash or soot located at the base of the cooling tower,” the IAEA said.

“The nuclear safety of the plant was not affected, as the cooling towers are not currently in operation.”

Russia captured the plant from Ukraine shortly after launching a full-scale invasion of its smaller neighbor in 2022, which it calls a “special military operation”. – Reuters

Seismic data indicates huge underground reservoir of liquid water on Mars

STOCK PHOTO | Image by GooKingSword from Pixabay

WASHINGTON – An immense reservoir of liquid water may reside deep under the surface of Mars within fractured igneous rocks, holding enough to fill an ocean that would cover the entire surface of Earth’s planetary neighbor.

That is the conclusion of scientists based on seismic data obtained by NASA’s robotic InSight lander during a mission that helped decipher the interior of Mars. The water, located about 7.2 to 12.4 miles (11.5 to 20 km) below the Martian surface, potentially offers conditions favorable to sustain microbial life, either in the past or now, the researchers said.

“At these depths, the crust is warm enough for water to exist as a liquid. At more shallow depths, the water would be frozen as ice,” said planetary scientist Vashan Wright of the University of California, San Diego’s Scripps Institution of Oceanography, lead author of the study published on Monday in the journal Proceedings of the National Academy of Sciences.

“On Earth, we find microbial life deep underground where rocks are saturated with water and there is an energy source,” added planetary scientist and study co-author Michael Manga of the University of California, Berkeley.

The InSight lander touched down in 2018 to study the deep interior of Mars, gathering data on the planet’s various layers, from its liquid metal core to its mantle and its crust. The InSight mission ended in 2022.

“InSight was able to measure the speed of seismic waves and how they change with depth. The speed of seismic waves depends on what the rock is made of, where it has cracks and what fills the cracks,” Wright said. “We combined the measured seismic wave speed, gravity measurements and rock physics models. The rock physics models are the same as the ones we use to measure properties of aquifers on Earth or map oil and gas resources underground.”

The data indicated the presence of this reservoir of liquid water within fractured igneous rocks – formed in the cooling and solidification of magma or lava – in the Martian crust, the planet’s outermost layer.

“A mid-crust whose rocks are cracked and filled with liquid water best explains both seismic and gravity data,” Wright said. “The water exists within fractures. If the InSight location is representative and you extract all the water from the fractures in the mid-crust, we estimate that the water would fill a 1-2 km deep (0.6-1.2 miles) ocean on Mars globally.”

The Martian surface is cold and desolate today but once was warm and wet. That changed more than 3 billion years ago. The study suggests that much of the water that had been on the Martian surface did not escape into space, but rather filtered down into the crust.

“Early Mars had liquid water on its surface in rivers, lakes and possibly oceans. The crust on Mars could also have been full of water from very early in its history, too,” Manga said. “On Earth, groundwater underground infiltrated from the surface, and we expect this to be similar to the history of water on Mars. This must have occurred during a time when the upper crust was warmer than it is today.”

Water would be a vital resource if humankind ever is to place astronauts on the Martian surface or establish some sort of long-term settlement. Mars harbors water in the form of ice at its polar regions and in its subsurface. But the depth of the apparent underground liquid water would make it difficult to access.

“Drilling to these depths is very challenging. Looking for places where geological activity expels this water, possibly the tectonically active Cerberus Fossae (a region in the northern hemisphere of Mars), is an alternative to looking for deep liquids,” Manga said, though he noted that concerns about protecting the Martian environment would need to be addressed. – Reuters

J&J has enough support from claimants for $6.5-billion talc settlement, Bloomberg reports

NEW YORK – Johnson & Johnson has cleared a key threshold of support for its proposed $6.5-billion settlement of tens of thousands of lawsuits alleging its baby powder and other talc products caused cancer, according to a Bloomberg report.

More than 75% of claimants voted in favor of the proposal, according to Bloomberg, a hurdle J&J set for a third attempt at placing a subsidiary in bankruptcy protection to resolve the litigation.

Reuters has not independently verified the report, for which Bloomberg cited sources familiar with the negotiations. Sources who spoke with Reuters said the votes are still being tallied.

J&J spokesperson Clare Boyle said the company could not comment as the vote tally was not final. The company has previously expressed confidence that its settlement proposal would ultimately win enough support from plaintiffs to proceed.

J&J faces lawsuits from about 61,000 claimants who alleged that its baby powder and other talc products were contaminated with asbestos and caused ovarian and other cancers. J&J denies the allegations and has said that its products are safe.

The company set the 75% vote percentage, matching a provision in U.S. bankruptcy law, as the benchmark to proceed with another bankruptcy bid, which now is expected in the near future. The deadline for casting votes was July 26.

After being rebuffed twice by federal courts, the healthcare giant is attempting again to end the litigation in a so-called “Texas two-step” bankruptcy.

The “two-step” maneuver involves offloading its talc liability onto a newly created subsidiary, which then declares Chapter 11. The goal is to use the proceeding to force all plaintiffs into one settlement – without requiring J&J itself to file bankruptcy.

But the company needs the votes of 75% of claimants before the subsidiary can ask a bankruptcy judge to impose the deal on all of them.

Bankruptcy judges can enforce global settlements that permanently halt all related lawsuits and forbid new ones. Outside of bankruptcy, any settlement J&J reached with some clients would still leave holdouts or future plaintiffs with the right to sue – and leave the company exposed to potential multibillion-dollar verdicts that encouraged it to use a two-step in the first place.

The company has been engaged in a bitter fight with lawyers opposing its third attempt to settle the litigation through this maneuver.

Andy Birchfield, who represents plaintiffs opposed to the settlement, called J&J’s voting process a “fake bankruptcy election” that would not stand up in court.

“No matter what tally is announced, I expect it will be challenged and eventually rejected so that juries can decide what to do about J&J’s egregious conduct,” Birchfield said.

J&J’s third attempt at a bankruptcy settlement differs from its previous efforts in part because it focuses only on ovarian and other gynecological cancer claims, building on J&J’s previous settlements with state attorneys general and people who had sued after developing mesothelioma, a rare form of cancer linked to asbestos exposure.

J&J’s bankruptcy strategy still faces legal hurdles. The Supreme Court recently ruled in Purdue Pharma’s bankruptcy to narrow the ability of courts to stop lawsuits against people and companies like J&J that are not bankrupt without the consent of the people who have sued.

J&J has said the Purdue ruling does not affect its settlement proposal because U.S. bankruptcy law includes explicit legal protections for asbestos defendants that have not filed for bankruptcy. J&J has said it qualifies for those protections because the lawsuits generally allege that the talc used in its products was mined from underground mineral deposits that also contained asbestos.

Some legal experts have said that J&J may not qualify for those specific legal protections, which were written to encourage settlement payments by insurers with indirect liability for asbestos lawsuits.

J&J’s strategy also faces opposition from plaintiffs’ attorneys who argue that its new settlement should fail for the same reason as its first two. Courts rejected J&J’s first two talc bankruptcies because the subsidiary was not in “financial distress,” and J&J must overcome similar arguments in this bankruptcy attempt.

Congress has proposed legislation that would limit the ability of companies to shield themselves from lawsuits by putting a shell company into bankruptcy. – Reuters

BingoPlus Foundation strengthens target to promote health, resilience and sustainable livelihood

BingoPlus Foundation and volunteers provided emergency relief to 1,000 households affected by the volcanic eruption of Mt. Kanlaon.
BingoPlus Foundation, the social development arm of DigiPlus Interactive Corp. (DigiPlus), is reinforcing its commitment to contribute to the United Nations Sustainable Development Goals of addressing hunger (SDG 2) and promoting sanitation (SDG 6) in the country.
The Foundation distributed 1,000 groceries of food essentials and sanitation supplies to evacuees in the wake of the Mt. Kanlaon volcanic eruption in Negros Occidental, done in partnership with the Municipality of La Castellana, represented by Mayor Alme Rhummyla Nicor-Mangilimutan; and the Nikki Cares Foundation, Inc., represented by founder Dominique Lopez-Benitez.
In support of the “LAB For All” medical program spearheaded by First Lady Liza Araneta Marcos in Bacolod City, BingoPlus Foundation also provided volunteers and logistics support to mobilize the said medical mission, benefitting nearly 8,000 patients in the city.
In Bacolod City, the Foundation further supported the government’s LAB For All medical mission as part of its advocacy to provide accessible healthcare to Filipinos.

BingoPlus Foundation further broadened its impact in General Santos, providing flu vaccination to 500 residents in Purok Mapailubon and initiating the construction of sanitation facilities in barangays. The Foundation further launched a dressmaking training center with Barangay San Isidro, TESDA and DoLE, as part of its KabuhayanPLUS livelihood program.

Apart from efforts to promote the health and sanitation in General Santos, BingoPlus Foundation launched a dressmaking training center to enable sustainable livelihood.
These initiative forms part of the Foundation’s Barangay Bigayan program, which aims to address the most urgent and pressing needs of urban communities in terms of resilience, health and capacity-building education and infrastructure. This seeks to enrich the spirit of giving and togetherness that Filipinos are known for.
“Our Barangay Bigayan initiatives are grounded in our commitment to holistic community support. While healthcare is directly addressed through medical missions and improved sanitation facilities, our resilience efforts go beyond post-disaster presence. We focus on capacity-building programs for emergency preparedness and economic stability, ensuring that our communities are equipped to face any challenge,” said DigiPlus President and BingoPlus Foundation Chairman Andy Tsui.

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PHL likely to grow by 6% this year

A vendor waits for customers in Divisoria, Manila. — PHILIPPINE STAR/EDD GUMBAN

By Luisa Maria Jacinta C. Jocson, Reporter

PHILIPPINE gross domestic product (GDP) growth is expected to average 6% this year, at the low end of the government’s 6-7% target, according to analysts. 

Fitch Solutions’ unit BMI lowered its Philippine GDP growth forecast to 6% this year from 6.2% previously, after weaker-than-expected second-quarter data.

“The latest growth outturn clearly showed that we have overestimated the health of the Philippine economy,” it said.

The Philippine Statistics Authority (PSA) last week reported that GDP expanded by 6.3% in the second quarter, quickening from the revised 5.8% in the first quarter and beating the 6% median estimate in a BusinessWorld poll.

BMI had earlier projected 6.5% GDP growth for the second quarter.

For the first half of the year, GDP growth averaged 6%. In order to meet the low end of the government’s 6-7% target, the economy would need to expand by at least 6% in the second semester.

“To reach our previous 6.2% growth projection for 2024, the economy must expand by around 6.4% in the second half, which we think is unlikely,” BMI said.

BMI said that the Philippines’ second-quarter growth print “paints a misleading picture of the economy’s health.”

“Reinforcing our view, the 0.5% quarter-on-quarter expansion recorded was the softest pace since the second quarter of 2023. Much of this weakness stemmed from a poor performance in the external sector, as we had expected,” it said.

On a seasonally adjusted quarter-on-quarter basis, GDP grew by just 0.5%, slower than the 1.1% in the first quarter.

“Indeed, exports contributed just 1.2 percentage points (ppts) to headline growth, halving the strong 2.4-ppt contribution in the prior quarter. Along with a strong pickup in imports, net exports detracted 0.8 ppt from the headline figure,” it added.

PSA data showed that exports of goods and services grew by 4.2% in the second quarter, much slower than the 8.4% growth a quarter ago.

“Against the backdrop of a slowing global economy in the second half, external demand will prove even less supportive over the coming quarters,” it added.

Despite this, BMI noted that domestic demand continues to hold up “pretty well.”

Growth in household consumption slowed to 4.6% from 5.5% a year ago. Private consumption accounts for about three-fourths of the economy.

“Despite a dip in private consumption contribution from 3.4 ppts in the first quarter to 3.2 ppts in the second quarter, the rebound in investment activity more than made up for it,” it said.

Gross capital formation or the investment component of the economy grew by 11.5% in the second quarter, faster than the 0.5% growth in the previous quarter and 0.7% a year ago.

“Contribution from gross fixed capital formation jumped from 0.5 ppt to 2.5 ppts, the highest level in almost two years. We expect imminent rate cuts by the Bangko Sentral ng Pilipinas (BSP) to provide a further lift to domestic activity,” it said.

CITI OUTLOOK
On the other hand, Citigroup, Inc. raised its GDP growth projection to 6% this year from 5.9% previously due to expectations of improving economic conditions.

“While household consumption is likely to only gradually recover, there are supporting factors such as strong employment, as well as the expected lower inflation and interest rates in the coming months,” Citi economist for the Philippines Nalin Chutchotitham said in a report.

Inflation is also seen to continue to ease after the spike in July. “We also agree with the BSP that inflation is projected to decline from August onwards,” it said.

Headline inflation rose to 4.4% in July from 3.7% in June, its fastest pace in nine months.

In the first seven months of the year, headline inflation averaged 3.7%. The BSP expects inflation to average 3.3% this year.

For 2025, Citi sees growth steady at 6%. This would be below the 6.5-7.5% government target.

“We maintain our expectation of 2025 growth at 6%, noting increasing external headwinds from the slowdown in several advanced economies (especially the US), which are the Philippines’ key trading partners and sources of overseas workers’ remittances,” Ms. Chutchotitham said.

EASING TO START
Meanwhile, Citi said that it expects the BSP to commence its easing cycle at its meeting on Thursday.

“We continue to expect a 25-bp rate cut starting at the Aug. 15 policy meeting despite a temporarily high inflation print in July,” Ms. Chutchotitham said.

Citi also expects the Monetary Board to cut rates by 25 bps at its October and December meetings, for a total of 75 bps for the full-year 2024.

“The BSP may, with some small probability, err on the cautious side and stand pat in August, given July’s inflation print at 4.4% year on year amid volatile food and energy prices,” Ms. Chutchotitham said.

A BusinessWorld poll conducted last week showed that nine out of 16 analysts surveyed expect the Monetary Board to deliver a 25-bp rate cut at Thursday’s review. This would bring the target reverse repurchase rate to 6.25% and would be the first reduction in benchmark borrowing costs since November 2020, or during the coronavirus pandemic.

BSP Governor Eli M. Remolona, Jr. last week said they may be “a little bit less likely” to cut rates at its upcoming meeting amid the uptick in July inflation.

At the same time, ING Bank N.V. Research Head and Chief Economist for Asia and the Pacific Robert Carnell said he now expects the BSP to keep rates on hold on Thursday due to recent market volatility.

“Were it me… I probably would leave it this month and wait until the market’s a little calmer,” he said at a briefing on Monday. “The thing that I think makes it more of a coin toss is the volatility of the market backdrop. We have been through a really, pretty hectic and volatile couple of weeks.”

Stronger-than-expected GDP data in the second quarter and July inflation also don’t support the August rate cut, Mr. Carnell said.

“The GDP numbers could have supported that had they been weaker… Having said that, the inflation numbers made it slightly less likely that they’d be easing in August,” he said.

Mr. Carnell also noted that the BSP should wait for other central banks to cut rates first to see how the market reacts.

He expects the Fed to cut by 100 bps this year — a 50-bp cut in September, a 25-bp cut in November and another 25-bp cut in December.

“I just think the optics will look a little bit better in a month’s time, and there’ll also be that sort of safety in numbers at that stage, because we will have the Fed easing by then,” he said.

Aside from its scheduled policy meetings, Mr. Carnell also said that the BSP could still implement an off-cycle rate cut, but this move carries the risk of unnecessarily alarming the market.

Mr. Remolona earlier said that they are “always open” to off-cycle rate cuts.

After its August policy meeting, the BSP only has two meetings in the fourth quarter — Oct. 17 and Dec. 19. — with Aaron Michael C. Sy

Meralco rates to go up slightly this month

Manila Electric Co. workers inspect a post with dangling wires in Intramuros, Manila, Aug. 8, 2024. — PHILIPPINE STAR/EDD GUMBAN

By Sheldeen Joy Talavera, Reporter

RESIDENTIAL CUSTOMERS in areas served by Manila Electric Co. (Meralco) will see a slight increase in their electricity bills this month due to the higher transmission charge.

The overall rate will go up by P0.0327 per kilowatt-hour (kWh) to P11.6339 per kWh in August from P11.6012 per kWh in July, Meralco said in a statement on Monday.

Households consuming 200 kWh will see a P7 increase in their bills this month. Those consuming 300 kWh, 400 kWh, and 500 kWh will see their bills go up by P10, P13, P16, respectively.

“Driving this month’s overall rate adjustment is the P0.1086 per kWh increase in the transmission charge for residential customers due to higher charges of the grid operator for ancillary service, which covers reserves necessary to maintain grid reliability,” the power distributor said.

Ancillary service charges rose by more than 50% as charges for contingency and dispatchable reserves doubled. These are deployed to support the transmission of power from generators to consumers to maintain reliable operations.

Joe R. Zaldarriaga, Meralco’s vice-president and head of corporate communications, said during a briefing that the increase in transmission charge canceled out the five-centavo reduction in generation charge.

Charges from independent power producers (IPPs) went down by P0.2974 per kWh due to higher IPP dispatch and peso depreciation that affected around 97% of the cost that was dollar denominated.

“These were also able to more than offset the increase in Malampaya natural gas price following its quarterly repricing,” Meralco said.

Prices at the Wholesale Electricity Spot Market (WESM) dropped as Luzon’s average peak demand went down by 690 MW last month.

However, the effective WESM charges for the month increased by P0.5940 per kWh as the company added the third of four installments of deferred May WESM costs ordered by the Energy Regulatory Commission (ERC).

Charges from power supply agreements (PSA) climbed by P0.0421 per kWh, driven by higher fuel-related costs.

IPPs, WESM, and PSAs accounted for 33%, 27%, and 40% of the company’s total energy requirement for the period.

Meanwhile, the Universal Charge for Missionary Electrification decreased by P0.0433 per kWh following completion of the recovery of ERC-approved true-up rate. This universal charge is collected from electricity end-users to fund electrification programs of the National Power Corp.

Taxes and other charges rose by P0.0177 per kWh.

“Pass-through charges for generation and transmission are paid to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance (FIT-All) are all remitted to the government,” Meralco said.

Distribution charge has remained unchanged at P0.0360 per kWh since August 2022.

EXPECTED ADJUSTMENTS
Meralco said that there may be a possible increase in generation costs from First Gas – Sta. Rita and San Lorenzo, which use Malampaya gas.

The old gas sale and purchase agreement (GSPA) between First Gas and the Malampaya Consortium had expired in July, so the supply of Malampaya natural gas to San Lorenzo is now governed by the new GSPA, similar to Sta. Rita.

However, the previous pricing formula for both plants continue to be applied, pending regulatory approval of the new GSPA.

“Once the new GSPAs are approved, this will certainly affect the generation charges of Sta. Rita and San Lorenzo,” Mr. Zaldarriaga said.

Meralco also anticipates the possible impact of the remaining 70% of the amount due on reserve market transactions for the March billing month.

To recall, the regulator suspended the billing and settlement on the reserve market in March after significant price increases in reserve power costs.

In a July 30 statement, the ERC ordered the lifting of the suspension. The regulator also ordered the Independent Electricity Market Operator of the Philippines to recalculate the resulting reserve trading amounts for the periods of February and March and adjust the value for the remaining 70% for the March billing month.

Meanwhile, customers may seek relief in the next two months as the collection of the deferred WESM amounts will end in September.

“Nakikita natin na pagpasok ng October, malaki ang posibilidad na mayroon na tayong pagbaba sa singil ng kuryente (We are seeing a huge possibility of a decrease in electricity bill in October),” Mr. Zaldarriaga said.

Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

Consumption may further weaken if inflation not addressed

A rice vendor waits for customers at the Paco Market in Manila, March 13, 2024. — PHILIPPINE STAR/RYAN BALDEMOR

By Beatriz Marie D. Cruz and Kyle Aristophere T. Atienza, Reporters

THE PHILIPPINE government should focus on managing persistent inflation in the coming months to support household spending growth, analysts said.

University of Asia and the Pacific Senior Economist Cid L. Terosa said elevated inflation was the “culprit” for muted consumption seen in the second quarter.

“Consumption will start to pick up towards the last quarter of the year, but it might remain muted if inflationary pressures persist and potential risks manifest,” he said in an e-mail.

The Philippine economy grew by 6.3% in the second quarter as higher construction and investment growth helped offset slower consumption.

Household final consumption expenditure grew by 4.6% in the second quarter, slowing from 5.5% a year ago.

Headline inflation accelerated to 4.4% year on year in July, mainly driven by a spike in electricity rates and food costs. This was the fastest inflation print in nine months.

In the first seven months of the year, headline inflation averaged 3.7%, above the central bank’s 3.3% full-year forecast.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the slowdown in consumer spending could largely be attributed to high inflation.

Increased borrowing costs reduce the purchasing power of consumers, “forcing some of the poorest of the poor and some people from the middle class to save and prioritize basic necessities such as food, shelter, utilities, transport fares, among others,” he said in an e-mail.

The Bangko Sentral ng Pilipinas (BSP) has kept policy rates at a 17-year high of 6.5% since October 2023. From May 2022 to October 2023, the BSP hiked borrowing costs by a total of 450 basis points to tame inflation.

Diwa C. Guinigundo, GlobalSource Partners’ Philippines analyst and former central bank deputy governor, said well-anchored inflation expectations could help provide additional incentives for higher consumption.

In an e-mail, he cited the need to improve households’ access to credit by easing lending standards without compromising standards.

“[Household spending] can be encouraged by ensuring better access by households through a better, more efficient system of the banks in being able to know their customers,” he said.

Emy Ruth Gianan, who teaches economics at the Polytechnic University of the Philippines, said targeted subsidies for various sectors may be needed in the short term to address anemic household spending.

“Note that households are most likely tight on spending because they do not see prices going down any sooner,” she said. “If we give them a signal that they can spend even at a fraction of the cost, then maybe we could boost consumption.”

FOOD INFLATION
Filomeno S. Sta Ana III, coordinator at Action for Economic Reforms, called on the government to come up with a strategic plan to boost agricultural productivity and address rising prices of food, which constitute around 43% of total household expenditures.

“Government’s reduction of food import tariff, particularly rice tariff, provides some alleviation, but is a temporary solution,” he said.

President Ferdinand R. Marcos, Jr. in June signed an executive order which slashed tariffs on rice imports to 15% from 35% previously, until 2028.

Security Bank Corp. Chief Economist Robert Dan J. Roces said the government should focus on addressing the challenges facing the agriculture sector.

“While the economy is on a solid footing, challenges such as the agriculture sector’s continued weakness and potential global economic headwinds require careful management,” he said in a Viber message. “This could indicate challenges in food production or rural economic activities.”

In the second quarter, agriculture and fisheries output contracted by 3.3%, worsening from the 1.2% decline a year earlier, reflecting the impact of El Niño.

Farm damage caused by El Niño reached P15.3 billion, according to the final estimate issued by the Department of Agriculture.

HEALTHCARE COSTS
Meanwhile, Mr. Sta Ana said inadequate social services, especially for healthcare, “make the situation all the more distressing for the population” amid high food prices.

He noted that out-of-pocket expenses for health are equivalent to 46% of total current health expenditures.

“A World Bank figure shows that a previous trend of decreasing out-of-pocket expenses as a percentage of current health expenditure has recently been reversed,” he said.

Aside from healthcare, education is also one of the most expensive items among household expenses.

“To the extent that more public money is made available to expand such public services, the way this is done in other jurisdictions, that would be most helpful to households,” Mr. Guinigundo said.

Ms. Gianan said concerns over the affordability of healthcare and the lack of access to it force households to plan well ahead for future expenses.

“Young people tend to spend more than their elderly counterparts, and spending smooths out throughout the life cycle as people save more for their retirement and other life needs,” she said in an e-mail.

“This is compounded by the fact that we have underdeveloped social services which compels people to really look out for themselves,” she added.

27 new PPP projects added to gov’t pipeline

A man is seen working on the rehabilitation of a portion of Commonwealth Avenue in Quezon City. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

TWENTY-SEVEN public-private partnership (PPP) projects, including the P77.22-billion Bataan Harbour City project, have been added to the government’s pipeline as of end-July, government data showed.

PPP Center data obtained by BusinessWorld showed that the 27 new projects have an estimated total cost of P114 billion.

This brought the total number of PPPs in the pipeline to 164 valued at P3.24 trillion as of end-July, it said.

The latest count included 20 solicited projects and seven unsolicited projects.

New additions to the list include two projects for the Bases Conversion and Development Authority and Clark International Airport Corp. — the Entertainment and Events Hub Package 1 (Convention Center, Sports Arena, Clark Airport Mall) valued at P21 billion, and Package 2 (Multi-modal Mobility Terminal) with an estimated cost of P4 billion. Both projects are currently at “under conceptualization” status. 

Also added to the list was the P1.26-billion Lung Center of the Philippines’ Medical Arts Building project.

Fourteen solicited PPP projects under Central Mindanao University (CMU) in Bukidnon were also included in the list. All projects are still “under conceptualization.”

These include a P930-million industrial park or agri-industry development project, a P120-million business promotion center project, and the rehabilitation and renovation of the CMU Market with an estimated cost of P38 million.

Other proposed PPP projects at CMU include four dormitory buildings, an agricultural experimental center and agronomy farm laboratory, and an animal production research and development center.

Data from the PPP Center also showed seven unsolicited PPPs undergoing negotiations and will be implemented by the Bataan local government unit (LGU).

These projects include the construction of the Bataan Harbour City (P77.22 billion), Bataan Emerging Gateways City (P4.94 billion), Bulk Water Supply System (P1.6 billion), Bataan Rooftop Microgrid Project (P274 million), Solar Rooftop Project (P43.5 million), Mariveles Dialysis Center (P39.5 million), and the Digitized Traffic System (P12 million).

DELISTED PROJECTS
On the other hand, four PPP projects were removed from the pipeline.

The Metro Manila Bike Share Project was delisted after the Department of Transportation’s (DoTr) confirmation on June 25.

The DoTr also requested the removal of the proposed PPP for the operations and maintenance of the Bicol International Airport.

The PPP Center also delisted the proposed redevelopment of the Pasig City Hall Complex due to a reported “failure of negotiation.”

The proposed establishment of a hemodialysis center at the Ospital ng Lungsod ng San Jose del Monte was also removed from the PPP’s list as requested by its LGU.

Meanwhile, the PPP updated the pipeline status of the P16.88-billion Tarlac-Pangasinan-La Union Expressway (TPLEX) Extension Project to “under implementation,” it said.

It also lowered the project cost of the rehabilitation, operation, maintenance and expansion of Puerto Princesa International Airport to P10.24 billion from P11.22 billion previously.

The PPP Center also updated the respective project costs of the San Mateo Railway Project (P77.6 billion), National Food Hub Project (P8.5 billion), Cavite Bus Rapid Transit System (P1.87 billion), and the Urban Renewal and Heritage Conservation project (P1.5 billion).

PPP Center data showed that 205 projects valued at P3.58 trillion are currently under implementation, while 56 have been concluded or terminated.

The government partners with the private sector in the form of PPPs to plug funding gaps in its different infrastructure and development needs. — Beatriz Marie D. Cruz

JG Summit sees 43% profit surge on margins, equity earnings, merger gains

GOKONGWEI-LED conglomerate JG Summit Holdings, Inc. saw a 43% increase in its first-half attributable net income to P14.8 billion from P10.38 billion a year ago, driven by margin improvements in core businesses, higher equity earnings from investments in Manila Electric Co. (Meralco), and gains from the merger between the Bank of the Philippine Islands (BPI) and Robinsons Bank.

First-half consolidated revenue rose by 15% to P187.8 billion from P163.4 billion last year on rising demand for tourism and recreation, along with increased petrochemical operations, as well as higher food and beverage sales volumes, JG Summit said in a statement to the stock exchange on Monday.

JG Summit doubled its core net income after taxes to P18.1 billion.

“We continue to post overall top line growth despite the lingering effects of inflation which dampened consumer sentiment. We have seen a divergence of results from our operating units with the strong demand for travel and leisure benefiting our air transport and real estate businesses,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said.

“Our food and beverage unit continues to deliver higher sales volumes, but product mix has changed into lower price point categories, while increased plant utilization in our petrochemicals unit pulled up revenues in the first half. Coupled with our initiatives to drive productivity and better operating leverage, we have now seen improvements in margins,” he added.

Mr. Gokongwei said the conglomerate is aiming to sustain momentum in the remaining months of the year.

“As we move to the second half, we hope to sustain this momentum with the expected decline in inflation that in turn could ignite the sequential rebound in consumer demand,” he said.

“We will continue to execute our commercial strategies to drive top line growth while implementing overall operational discipline to ensure we sustain the year-on-year recovery in core net income and margins,” he added.

The food segment, Universal Robina Corp., had a flat first-half net income at P6.6 billion on lower foreign exchange gains and higher impairment losses. Revenue rose by 3% to P80.7 billion as business units saw higher sales volumes.

Core profits grew by 5% to P6.3 billion as higher tax provisions watered down the improvement in operating profits. The food and beverage company recently decided to exit its business in China to redeploy its resources to higher-growth markets.

On the real estate and hotels business, Robinsons Land Corp. (RLC) saw a 9% increase in first-half net profit to P6.5 billion due to the increase in minority share in its real estate investment trust company, RL Commercial REIT, Inc., following a block placement in April.

Revenue rose by 8% to P20 billion as the rental incomes of the property developer’s malls, offices, hotels, and logistics outpaced the decline in the recognized revenues for the residential segment.

RLC’s malls division maintained its occupancy rate at 93%, while the offices business improved to an 86% occupancy rate with the expansion of existing business process outsourcing tenants.

The airline business led by Cebu Air, Inc. recorded a 5% drop in its first-half net income to P3.5 billion due to foreign exchange losses as well as the absence of the mark-to-market gains recognized last year on convertible bond derivatives. Cebu Air operates budget carrier Cebu Pacific.

Revenues grew by 18% to P51.4 billion while earnings before interest, taxes, depreciation, and amortization climbed by 39% to P13.3 billion as fuel prices were steady during the period.

“Cebu Air also solidified its domestic market leadership at 54% share, while international routes saw 32% more passengers in the first half compared to the previous year. These were accomplished through aircraft upgrades, additional routes, and increased flight frequencies,” JG Summit said.

The petrochemicals business led by JG Summit Olefins Corp. (JGSOC) posted a P7.4-billion net loss for the first half on higher financing costs and additional depreciation from the completed plant expansion project.

Revenue surged by 80% to P25.5 billion on increased plant operations and higher sales volumes across all products, as well as more targeted selling and more disciplined pricing.

“JGSOC continues to work on its business-wide transformation project, with initiatives already producing various wins such as higher premiums on booked volumes, continued strong sales momentum, more strategic spending on maintenance, and a reduction in spare part inventories,” JG Summit said.

JG Summit saw a mixed performance across its core investments.

The share of JG Summit in Meralco’s income rose by 26% to P5.8 billion led by higher sales volume on commercial activities and residential demand due to higher temperatures.

Equity earnings from Singapore Land Group grew by 15% to P1.3 billion as the hotel business posted a robust performance, led by the full operations of the Pan Pacific this year, along with increases in the company’s rental income.

Dividends received by JG Summit from PLDT Inc. for the first half declined by 22% to P1.1 billion on the lack of special dividends declared in 2023.

Following the effectivity of the merger between BPI and Robinsons Bank at the start of the year, JGS received its first cash dividends from BPI at P1.98 per share, totaling P373 million.

On Monday, JG Summit shares were unchanged at P25.20 per share. — Revin Mikhael D. Ochave

Utilities, toll roads boost MPIC’s profit to P12.5 billion

PANGILINAN-LED Metro Pacific Investments Corp. (MPIC) recorded a 23% increase in its first-half net income to P12.5 billion from P10.2 billion last year on higher contributions from its utilities and toll roads subsidiaries.

First-half operating revenue rose by 22% to P35.76 billion from P29.37 billion last year, MPIC Chief Financial, Risk, and Sustainability Officer Chaye A. Cabal-Revilla said in a media briefing on Monday.

MPIC’s first-half consolidated core net income rose to a new record high of P12.5 billion compared with P9.9 billion a year ago.

Among businesses, the power segment took up P10.1 billion of total net operating income, followed by the toll roads segment at P3.2 billion, and the water segment at P2.5 billion.

Better financial and operating results from MPIC’s holdings generated a 20% increase in contribution from operations to P14.8 billion, driven by strong growth in energy sales at Manila Electric Co. (Meralco), billed volumes at Maynilad Water Services, Inc., and traffic on the toll roads complemented by higher tariffs.

“Our power, toll roads, and water business continued to deliver double-digit growth in earnings on the back of strong volumes and the impact of long-overdue tariff adjustments,” MPIC Chairman, President, and Chief Executive Officer Manuel V. Pangilinan said in the briefing.

On the power segment, Meralco grew its first-half net income by 26% to P22.4 billion. Revenue increased by 6% to P237.5 billion as energy sales rose by 9% to 26,954 gigawatt hours.

For the toll roads business, Metro Pacific Tollways Corp. (MPTC) saw a 25% increase in core net income to P3.4 billion. Toll revenue rose by 18% to P15.4 billion, led by a combination of toll rate increases and traffic growth in all markets.

During the first half, average daily vehicle entries in the Philippines rose by 7% to 693,175, while Vietnam also saw a 1% increase to 78,390.

Average daily vehicle entries of MPTC’s operations in Indonesia declined by 1% to 1,203,631.

On the water business, Maynilad recorded a 29% increase in first-half core net income to P5.6 billion. Revenue increased by 23% to P16.4 billion, reflecting 4% growth in billed volumes and a 19.8% adjustment in tariff in early January.

Meanwhile, Ms. Revilla said the entire Pangilinan group has a capital expenditure budget of about P221 billion, of which P122 billion is earmarked for MPIC.

“The budget for MPIC is about P122 billion (this year). That does not include the planned acquisition for Metro Pacific Health, that’s about P45.5 billion. If you want us to include PLDT Inc., Philex Mining Corp., that’s P221 billion budget for 2024,” she said.

In July, MPIC’s Metro Pacific Agro Ventures announced its entry into agreements to acquire Universal Harvester Dairy Farms, Inc., which operates under the Bukidnon Milk Co. brand. The company produces fresh milk, flavored milk, yogurt, and cheese products, with presence primarily focused on key cities in Visayas and Mindanao.

Meanwhile, Mr. Pangilinan is expecting to sustain MPIC’s performance for the second half.

“With MPIC continuing to maintain a low cost of capital in a rising interest rate environment, the company is poised to maintain its strong growth trajectory for the rest of the year,” Mr. Pangilinan said.

“The job for the second half is to exert our efforts to substantially achieve the same kind of earnings we’ve seen in the first half,” he added.

MPIC is one of the three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority share in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

Manila Water subsidiary enters P1.4-B bulk water partnership

MANILA Water Philippine Ventures, Inc. (MWPV), a Manila Water subsidiary serving areas outside Metro Manila, said it has partnered with Canlubang Sugar Estate (CSE) for a P1.4-billion bulk water supply project aimed at enhancing water accessibility across additional towns in Laguna.

“We are committed to delivering this crucial project with unwavering integrity, efficiency, and a steadfast focus on enhancing the quality of life of customers within our Laguna Water concession area,” Manila Water Chief Operating Officer and MWPV President Melvin John M. Tan said in a statement on Monday.

The 25-year bulk water supply project aims to deliver 17 million liters per day of potable water from Matang Tubig Spring to Laguna Water, MWPV’s concessionaire in Laguna province.

The project involves the rehabilitation of the Matang Tubig Spring (MTS) as a water source and the construction of a 13-kilometer water transmission line that will link the MTS Source Upper Box to the Laguna Wellfield Reservoir in LTI Annex, Biñan.

The project will be implemented by MWPV’s construction arm, Manila Water Infratech Solutions, and will be managed and operated by its unit Estate Water.

The start of operations is expected two years after the start of construction, which is set for this year.

“The importance of water cannot be overestimated as an essential and finite resource for the people and nation, and this must be protected and made sustainable. And this is our responsibility,” CSE President Jose Ramon Yulo said.

“With the partnership of the Manila Water group and their expertise, and in partnership also with the community, the government, and the Yulo family, we strive to bring this project to fruition,” he added.

Manila Water President and Chief Operating Officer Jose Victor Emmanuel A. de Dios said that Laguna Water is working hard to replicate the company’s best practices in the east zone and offer the same quality of service to customers in Laguna.

“We will make this work. We always strive to ensure water reliability to areas we serve within and outside Metro Manila,” Mr. De Dios said.

Manila Water serves the east zone network of Metro Manila, covering parts of Marikina, Pasig, Makati, Taguig, Pateros, Mandaluyong, San Juan, portions of Quezon City and Manila, and several towns in Rizal province.

MWPV houses the 20 domestic subsidiaries of the Manila Water Group. — Sheldeen Joy Talavera

First Gen’s Q2 income falls 2.5% to $75.26M amid higher expenses

LOPEZ-LED First Gen Corp. reported a 2.5% decrease in its attributable net income to $75.26 million for the second quarter (Q2), driven by higher expenses and lower contributions from some of its business units.

First Gen’s gross revenues increased by 7.4% to $682.05 million from last year’s $634.78 million, the energy company said in a regulatory filing on Monday.

Gross expenses, on the other hand, went up by 14.8% to $552.09 million from $481.12 million in the previous year.

For the six months ending in June, First Gen’s attributable net income fell by 7.4% to $154.08 million compared to $166.44 million the previous year. Gross revenues declined by 0.8% to $1.28 billion from $1.29 billion a year ago as a result of lower volumes of electricity sold during the first half “across all platforms except for the hydro platform.”

First Gen reported additional sales volumes from the 165-megawatt (MW) Casecnan Hydroelectric Power Plant following its turnover in February.

Natural gas accounted for the majority of First Gen’s revenue at 66.8% or $853.72 million, followed by geothermal, wind, and solar at a combined 30.2% or $386.44 million, while the remainder is for its hydro at 0.7% or $8.77 million.

For the first half, the company’s expenses increased by 4% to $997.93 million versus the $959.18 million previously. First Gen’s natural gas business unit posted a 26% increase in its earnings for the first half to $115 million.

The company said that the 420-MW San Gabriel, 1,000-MW Sta. Rita, and 500-MW San Lorenzo power plants delivered higher operating income “due to savings in operating expenses, and high spot market prices in the case of San Gabriel.”

Avion Power Plant recorded a decrease in net income due to lower kilowatt-hour sales and higher operating expenses.

Earnings from First Gen’s renewable energy unit, Energy Development Corp. (EDC), excluding hydro’s, declined by 42% to $44 million brought about by lower revenues.

“The geothermal power plants under EDC generated lower sales and operating income due to a reduction in electricity prices and electricity sold, and higher operating expenses from steam field maintenance and work-over activities,” the company said in a statement.

The unit also incurred higher interest expenses from new debt, it added.

Contributions from First Gen’s hydro platforms were at $5 million, with Casecnan Hydroelectric Power Plant accounting for $1-million earnings for its four months of operations in the first half.

First Gen has a total of 3,668 MW of installed capacity, accounting for 20% of the country’s gross generation.

At the local bourse on Monday, shares in the company rose by 2.53% to close at P17 each. — Sheldeen Joy Talavera

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