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Megawide board approves stock ownership plan for employees 

THE board of listed Megawide Construction Corp. has approved a stock ownership plan for eligible employees to encourage their long-term commitment.

In a stock exchange disclosure on Thursday, Megawide said its board had given the green light on Sept. 13 for the employee stock ownership plan, which is available to those who have been with the company for at least a year.

According to Megawide, it has allocated up to 10 million shares for the stock ownership plan, which is subject to the approval of regulators and the Philippine Stock Exchange.

“This is a type of performance incentive under the company’s performance management system where shares of the company may be awarded as part of the identified employees’ performance bonus,” Megawide said.

Megawide said the objectives of the plan are to “motivate key talents and encourage long-term commitment of key talents who are contributing significantly to the further success, growth, and development of the company” as well as “ to serve as a retention program for key talents.”

The company added that the plan seeks to “provide opportunity and means for the key talents to acquire certain level of equity interest in the company” and to “influence change and behavior and mindset of the eligible employees to being a part owner of the company.”

Megawide said the shares granted under the plan include 50% of the entitlement for the first year and 25% of the entitlement for both the second and third years.

“The share price is with a 10% discount on the 30-day volume-weighted average price upon issuance of the shares under the employee stock ownership plan. The voting, dividend, and transfer or assignment rights shall vest upon the issuance of the shares under the employee stock ownership plan to the employees,” Megawide said.

In the first half, Megawide logged a P363.16 million attributable net income, a reversal of the P125.68 million net loss a year ago, as total revenues rose 52.4% to P11.16 billion.

On Thursday, shares of Megawide at the local bourse rose two centavos or 0.63% to close at P3.17 apiece. — Revin Mikhael D. Ochave 

What is your AI strategy?

The world is moving beyond VUCA (volatility, complexity, uncertainty, ambiguity) to D-VUCAD to reflect the reality of diversity and disruption that need the immediate attention of business leaders to enable them to be ready to meet the challenges this poses. Chief among these disruptions is the integration of artificial intelligence (AI) into the operations of organizations. As CEOs steer their organizations through this digital transformation, it is becoming increasingly evident that a well-defined AI strategy is not just advantageous but a necessity.

One of the primary reasons CEOs should adopt an AI strategy is the potential for substantial gains in efficiency and productivity. AI-powered automation can streamline routine tasks, freeing up human resources to focus on more creative and strategic endeavors. For instance, Amazon, under the leadership of Jeff Bezos, embraced AI to optimize its supply chain management. The company uses predictive analytics and AI algorithms to forecast demand, thus reducing inventory costs while ensuring products are readily available when needed. This not only saves money but also enhances customer satisfaction through faster deliveries.

In today’s data-driven world, organizations that harness the power of AI to make informed decisions likewise gain a competitive edge. CEOs need AI strategies to extract meaningful insights from the vast amounts of data at their disposal. Take Netflix, for example. Reed Hastings, the CEO, implemented AI algorithms to personalize content recommendations for its viewers. By analyzing user preferences and viewing habits, Netflix keeps its audience engaged and satisfied, leading to increased subscriptions and revenue.

AI can also help organizations provide a more personalized and engaging experience to their customers. Mark Zuckerberg, the CEO of Facebook (now Meta Platforms, Inc.), understands this well. Facebook employs AI to curate newsfeeds, ensuring users see content that aligns with their interests. This increases user engagement and, in turn, drives advertising revenue. The success of this strategy is evident in Facebook’s massive user base and robust advertising business.

CEOs also require an AI strategy to foster innovation in product development. Elon Musk’s leadership at Tesla demonstrates this effectively. Tesla’s electric vehicles are not just about sustainable transportation but also about advanced AI integration. Their autopilot feature, powered by AI, is continually improved through over-the-air updates, providing customers with new features and improved safety. This dynamic approach to product development has helped Tesla maintain a strong market position in the electric vehicle industry.

CEOs who fail to adopt AI strategies risk falling behind competitors who embrace it. An illustrative example is the retail sector, where Amazon’s Jeff Bezos disrupted traditional retail models. By employing AI-driven customer insights, Amazon can offer personalized recommendations, competitive pricing, and efficient logistics, making it challenging for traditional retailers to compete.

AI can likewise significantly reduce operational costs while enabling scalability. Sundar Pichai, the CEO of Google’s parent company Alphabet, Inc., recognizes this. Google’s data centers use AI for cooling and energy management, resulting in substantial energy savings. Furthermore, AI-driven cloud services and automation help Google serve millions of users and businesses efficiently, supporting the company’s growth.

CEOs also need AI strategies to address risks and ensure compliance. In the financial sector, firms like JPMorgan Chase, led by Jamie Dimon, employ AI for fraud detection and risk assessment. By analyzing transaction patterns and customer behavior in real-time, JPMorgan can identify and mitigate risks more effectively, protecting both the institution and its customers.

In addition, AI strategies can aid in talent acquisition and retention, a crucial aspect of organizational success. Microsoft, led by Satya Nadella, uses AI to improve its talent acquisition processes. By analyzing resumés and matching them with job descriptions, Microsoft can identify the most suitable candidates quickly. This not only saves time but also ensures that the company recruits top talent in a competitive tech industry.

In conclusion, the adoption of an AI strategy is no longer optional for CEOs; it is a strategic imperative. From enhancing efficiency and productivity to enabling data-driven decision making, personalizing customer experiences, fostering innovation, and ensuring competitive advantage, AI offers multifaceted benefits that can drive organizational success. The examples provided, from industry giants like Amazon, Netflix, Facebook (Meta Platforms, Inc.), Tesla, JPMorgan Chase, Google (Alphabet, Inc.), and Microsoft, showcase how effective AI strategies have propelled these organizations to leadership positions in their respective sectors. As we move further into the digital age, CEOs must recognize that AI is not just a tool but a transformative force that shapes the future of business. Those who craft and implement robust AI strategies will be the ones who lead their organizations to thrive in this new era.

 

Reynaldo C. Lugtu, Jr. is the founder and CEO of Hungry Workhorse, a digital, culture, and customer experience transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation. He is the chair of the Digital Transformation: IT Governance Committee of FINEX Academy. He teaches strategic management and digital transformation in the MBA Program of De La Salle University. The author may be e-mailed at rey.lugtu@hungryworkhorse.com

India: better late than never

SHRESHTH GUPTA-UNSPLASH

India certainly seems to be making up for lost time. Last May saw it contributing two warships in the India-ASEAN Maritime Exercise. Held within Vietnam’s exclusive economic zone (EEZ) and near the trade routes off the Philippines, it was a certain signal to the region that a new power could be asserting itself therein.

Nevertheless, also palpable was India’s wariness in provoking China. The maritime maneuvers were pointedly held away from the disputed areas, particularly Scarborough Shoal, and came amidst reassuring pronouncements by New Delhi that it prefers peaceful and rule of law-oriented means in settling the continuing issues in that area.

Thus, in the Joint Statement on the 5th India-Philippines Joint Commission on Bilateral Cooperation with Philippine Foreign Affairs Secretary Enrique Manalo, Indian External Affairs Minister Dr. S. Jaishankar emphasized the two countries’ call “for peaceful settlement of disputes and for adherence to international law, especially the UNCLOS and the 2016 Arbitral Award on the South China Sea in this regard.”

Indeed, this is a relationship that should have been more: despite having a trade agreement back in 1979, Philippine-India trade has been quite sluggish, gaining ground only after the latter changed course with its “Look East Policy” and then signing a trade agreement with ASEAN in 2009. Still, despite all that, the Philippines suffers from a $1.2-billion trade deficit with India.

Which makes India’s quite lukewarm presence in the West Philippine Sea a bit puzzling. Considering its large trade surplus with the Philippines, considering further that 55% of its trade (equivalent to $189 billion) passes through our area, India’s previously overly lowkey position, limited to declarations of support for “freedom of navigation and overflight, and unimpeded commerce, based on the principles of international law, … and that disputes should be resolved peacefully,” pales in comparison to the stakes involved.

In fairness, “while India has endeavored to significantly enhance its strategic cooperation with Southeast Asia through its Look East Policy of 1991 and its reinvigorated Act East Policy of 2014, Manila’s leadership within this time frame often overlooked engaging formidably with India in the realm of defense cooperation.” Aside from concentrating on domestic concerns, the “administration of President Gloria Macapagal Arroyo (2001-2010), [saw] Philippine foreign policy centered on the concept of equi-balancing, which entailed maximizing relations with its traditional treaty ally and its largest immediate neighbor, the US and China, respectively.” (“Philippines-India Strategic Relations Poised to Grow,” Institute for Security and Development Policy, April 2023).

Nevertheless, certain developments may have accelerated the coming together of the Philippines and India.

The first is greater awareness amongst Filipinos of the foreign threat to its territories: a recent national survey (OCTA, published August 2023) showed that 70% of Filipinos demand its government defend Philippine territory, while 65% declared their willingness to fight militarily to defend it, with 61% wanting to modernize and strengthen the armed forces.

Another is a more diversified approach to foreign policy under the Marcos Administration: the 2023-2028 National Security Policy (NSP) put “National Sovereignty and Territorial Integrity” as its first priority, unlike the 2017-2022 NSP (which logged “Territorial Integrity” merely fourth amongst National Security Interests), signaling a change in military outlook from domestic to the external, and making a stand for “multilateralism and rules-based international order.”

The NSP rightly makes mention of Philippine values and principles. While it is oft-repeated that foreign policy is merely contingent on passing national interests, nevertheless, it is very much to the country’s interest that its foreign alliances be based not merely on economic and short-term considerations but also whether such country partners are aligned with the Philippine’s democratic values, including that of the rule of law and human rights. This framework puts India as a necessary and obvious partner.

The war between Russia and Ukraine is another factor: with a prolonged conflict, Russia’s military might is perceived to have weakened. A China flexing its muscle will likely entail an attempt to isolate Russia from India. This necessitates India making a 180-degree pivot in terms of its alliances, as well as a balancing act of strengthening relations with the US while maintaining its ties with Russia.

Finally, there is demographics and here India would be right to see an opportunity: amidst an expected aging global population (with 2.37 billion individuals older than 65 years by 2100), China is forecast to halve its population by 48% or 732 million at century’s end, allowing India to overtake it (with an expected population of 1.09 billion, as well as Nigeria, 791 million). Incidentally, this will also likely have the effect of making China revert to second place to the US economically by 2098.

So, while a partnership between the two countries has been a long time coming, considering, as the Joint Statement pointed out, the “complementarities the two countries share as vibrant, youthful democracies and fast-growing economies in the Indo-Pacific region,” it seems that — specially for foreign policy — things can fall into place at the right time.

(This is the text of my recorded video comments in the Sept. 12 forum “Maritime Cooperation in the Indo-Pacific: The Role of ASEAN and its Dialogue Partners,” organized by the Stratbase ADR Institute)

 

Jemy Gatdula is a senior fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence

https://www.facebook.com/jigatdula/

Twitter  @jemygatdula

Auto Sales (August 2023)

AUTOMOBILE SALES in the Philippines registered a double-digit annual growth in August but saw a month-on-month sales decline amid elevated inflation. Read the full story.

Auto Sales (August 2023)

How PSEi member stocks performed — September 14, 2023

Here’s a quick glance at how PSEi stocks fared on Thursday, September 14, 2023.


Peso drops further following faster Aug. US consumer inflation

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THE PESO declined further against the dollar on Thursday as the US consumer price index (CPI) continued to pick up in August.

The local currency closed at P56.765 versus the dollar on Thursday, weakened by 4.50 centavos from Wednesday’s P56.72 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Thursday’s session stronger at P56.665 per dollar. Its intraday best was at P56.65, while its weakest showing was at P56.78 against the greenback.

Dollars traded went up to $1.17 billion on Thursday from the $1.02 billion on Wednesday.

The peso was dragged down by faster-than-expected August US consumer inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso weakened after US core inflation came in hotter than market expectations,” a trader likewise said.

US consumer prices increased by the most in 14 months in August as the cost of gasoline surged, but the annual rise in underlying inflation was the smallest in nearly two years, likely giving the US Federal Reserve cover to leave interest rates unchanged next Wednesday, Reuters reported.

The mixed report from the Labor Department on Wednesday was published a week before the Fed’s policy meeting and followed data this month showing an easing in labor market conditions in August. Economists, however, believe officials at the US central bank will continue to signal an additional rate hike this year given the stickiness in services inflation.

The US CPI went up by 0.6% in August after rising by 0.2% in the last two months.

In the 12 months through August, consumer prices picked up by 3.7% after rising by 3.2% in July.

For Friday, the trader said the peso could rebound ahead of a potentially softer US retail sales report.

The trader sees the peso ranging from P56.60 and P56.85 a dollar on Friday, while Mr. Ricafort expects it to move from P56.65 to P56.85. — AMCS with Reuters

Stocks up on bargain hunting, Fed pause hopes

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PHILIPPINE SHARES rose on Thursday on bargain hunting and as markets expect the US Federal Reserve to keep rates steady next week, even after US consumer inflation picked up in August.

The benchmark Philippine Stock Exchange index (PSEi) went up by 59.22 points or 0.96% to end at 6,208.40 on Thursday, while the broader all shares index increased by 22.50 points or 0.67% to close at 3,353.31.

“Stocks rebounded as bargain hunters came in when the local equities market became technically oversold,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

“Aiding market sentiment was the hope that the US Fed is unlikely to raise their benchmark rate this month. This, despite higher August inflation reported last night,” he added.

Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message that investors saw bargain-hunting opportunities after the PSEi dropped to the 6,100 level on Wednesday.

“Helping in the climb were the expectations that the Federal Reserve would keep policy rates unchanged in its next meeting after the US August core inflation rate continued to decline to 4.3% from 4.7% in the preceding month,” he said.

US consumer prices increased by the most in 14 months in August as the cost of gasoline surged, but the annual rise in underlying inflation was the smallest in nearly two years, likely giving the Federal Reserve cover to leave interest rates unchanged next Wednesday, Reuters reported.

The mixed report from the Labor department on Wednesday was published a week before the Fed’s policy meeting and followed data this month showing an easing in labor market conditions in August. Economists, however, believe officials at the US central bank will continue to signal an additional rate hike this year given the stickiness in services inflation.

The US CPI went up by 0.6% in August after rising by 0.2% in the last two months.

In the 12 months through August, consumer prices picked up by 3.7% after rising by 3.2% in July.

“At home, many cheered the local banking industry’s nonperforming loan ratio for July as it remained steady at 3.43% on a month-on-month basis and was lower than the same period of last year’s 3.57% despite a high interest rate environment,” Mr. Plopenio added.

All sectoral indices went up on Thursday. Holding firms rose by 84.75 points or 1.44% to 5,942.05; mining and oil climbed by 108.42 points or 1.04% to 10,502.07; services went up by 14.14 points or 0.93% to 1,523.15; property increased by 19.99 points or 0.78% to 2,566.62; financials gained 5.68 points or 0.31% to end at 1,795.72; and industrials added 26.23 points or 0.29% to close at 8,843.82.

Value turnover declined to P3.81 billion on Thursday with 411.99 million shares changing hands from the P4.73 billion with 740.94 million issues seen on Wednesday.

Decliners and advancers ended at 92 each, while 35 names closed unchanged.

Net foreign selling dropped to P11.74 million on Thursday from P436.53 million on Wednesday. — SJT with Reuters

Singapore investors invited to co-finance with Maharlika

RTVM

PRESIDENT Ferdinand R. Marcos, Jr. on Wednesday urged Singapore businesses to explore projects co-financed by the Maharlika Investment Fund (MIF).

He made the remarks at a business roundtable in Singapore, during which he also urged investors to look into the Philippine renewable energy industry.

“We look forward to exploring co-financing opportunities with foreign investors, with multilateral institutions, and with other sovereign wealth funds around the world,” he was quoted as saying in a Palace statement on Thursday.

“To our partners in Singapore, I offer you the assurance of our greatest efforts in supporting businesses as we work together in achieving our economic agenda and making the Philippines your destination of choice for investment,” he added.

In the question and answer position of the 10th Asia Summit hosted by the Milken Institute in Singapore earlier in his visit, Mr. Marcos said he considers the MIF fund a pathway towards reducing dependence on foreign loans.

“We… started to worry about borrowing,” he said. “Although our borrowing in terms of GDP (gross domestic product) is not as high as maybe our neighboring countries, we are at about 62.3% up to 63% of GDP… for us that is high.”

He said the wealth fund could drive “economic development through strategic investments both domestically and overseas.”

Philippine debt as a share of GDP stood at 61% at the end of the second quarter, above the 60% threshold considered by multilateral lenders to be manageable for developing economies.

Mr. Marcos also assured that Maharlika will be run not by “politicians” but by professional fund managers.

Rent-seeking by politically connected groups is among the biggest risks to the MIF, Enrico P. Villanueva, a senior lecturer at the University of the Philippines Los Baños, said in a tweet.

Mr. Marcos signed the Maharlika bill into law in July, amid concerns raised by economists over its financing and management.

The fund will be managed by the Maharlika Investment Corp. (MIC), which will have authorized capital of P500 billion.

Some P125 billion worth of funding will come from the National Government (P50 billion), Land Bank of the Philippines (P50 billion) and the Development Bank of the Philippines (P25 billion).

The National Government will source its P50-billion contribution from 100% of the dividends of the Bangko Sentral ng Pilipinas for the first two years, and a 10% share of Philippine Amusement and Gaming Corp.’s income for five years. 

It will also take 10% of the revenue from the gaming operations of other government-owned gaming operators and regulators; proceeds from the privatization of government assets; and other sources such as royalties and/or special assessments for five years.

Mr. Villanueva urged the public to remain vigilant, asking for a review of the implementing rules and regulations and monitoring of the impact of fund transfer from government financial institutions to the MIC.

The public should also subject the MIC Board to scrutiny, track news and activities of the MIC, and closely monitor its financial and governance reports, he added.

At Wednesday’s roundtable discussion with Singapore businessmen, Mr. Marcos also encouraged investment in the Philippines’ renewable energy industry, innovation economy, and infrastructure.

He highlighted the raising of the foreign investor ownership limit to 100% in the exploration, development, and utilization of solar, wind, hydro, and ocean energy resources.

“The policy change comes as the Philippines seeks to attract foreign investment to boost the renewable energy sector and to meet our long-term climate targets,” he said.

“With this development, I encourage our Singapore partners to consider the Philippines and take part in the country’s goal of increasing the share of renewables in power generation and offering lower-cost and cleaner energy to the general public,” he added.

He also called for investment in financial technology to help the Philippines achieve its goal of 50% digital retail transactions by the end of 2023. — Kyle Aristophere T. Atienza

Raw sugar prices expected to remain stable, SRA says

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THE Sugar Regulatory Administration (SRA) said it expects the farmgate price of raw sugar to remain stable after starting to decline in February 2022.

“Since February 2022, farmgate prices for raw sugar have declined to P60 per kilogram and it has maintained (its price) to date,” Administrator Pablo Luis S. Azcona said in an Laging Handa briefing on Thursday.

“Thursday is our bidding day and hopefully (the farmgate price) remains at P60 per kilo,” Mr. Azcona added.

He said that retail prices for refined sugar have remained stable since February last year at P80 per kilo to P110 per kilo in supermarkets.

“For now, we are pushing to improve production; since farmgate prices are already stable, we have seen an increase in area (planted to sugar) in various places, which is a good sign.

According to the regulator’s Sugar Order No. 1, raw sugar production was estimated at 1.85 million metric tons (MT) during the 2023 to 2024 crop year.

Mr. Azcona has said that this would mainly be driven by a 3,000 hectare increase in total area planted to sugar, which would mean a 50 thousand MT jump in output for the year.

“Input costs for fertilizer have also increased. Farmers are now spending more since they are hopeful for a stable farmgate price,” he said.

He added that the SRA is continuing its block farm program, in which it organizes smaller farmers tilling one to two hectares into consolidated farms of 30 hectares of more.

“We also hand out cash assistance for their startup capital, as well as new tractors… That’s all to improve small farmers’ mechanization and production levels,” he said.

The regulator has received 80 tractors and other farm equipment from the Japanese government’s Non-Project Grant Aid.

It will hand out 51 tractors to sugarcane farms in the Visayas, with Negros Occidental getting 24 units, Negros Oriental 11, Iloilo six, Leyte four, and Cebu and Capiz three each.

The SRA also received 48 sugarcane planters, 48 lateral flail mowers, and five power harrows. — Adrian H. Halili

BoI-approved investments hit P725.93B, nearing 2022 total

THE Board of Investments (BoI) said registered projects in the year to date hit P725.93 billion, with the total close to exceeding the P729 billion worth of investments tallied over the full year of 2022.

The BoI said the estimate for approved projects covered the January to Sept. 12 period, with foreign investors accounting for P426.04 billion.

Ceferino S. Rodolfo, BoI managing head and Trade undersecretary, said in a Viber message that around 80% of the projects involve renewable energy, while the remainder mostly have to do with telco infrastructure.

“What is really strong now are game changers related to sustainability and digitalization,” Mr. Rodolfo told  BusinessWorld.

The electricity, gas, steam, and air conditioning industries accounted for P557.84 billion of the total, while the information and communication industry generated P95.51 billion worth of investment.

Around 35,086 jobs are expected to be generated from the projects, 22,016 of which are in administrative and support service activities.

The Western Visayas captured the larger slice by project value with P307.14 billion worth of projects, while investments in Region 4A or Cavite, Laguna, Batangas, Rizal, and Quezon amounted to P165.5 billion.

The BoI said there were no approved projects in the Bicol Region or Region 5 which comprises the provinces of Albay, Camarines Norte, Camarines Sur, Sorsogon, Catanduanes and Masbate.

At the deadline, the BoI had not replied to a query regarding its confidence in achieving its investment registration targets for the year.

In February, Trade Secretary Alfredo E. Pascual raised BoI’s investment target by 50% to P1.5 trillion.

Mr. Pascual told reporters last week that he is confident that the BoI will be able to achieve and even surpass its P1.5-trillion investment target. — Justine Irish D. Tabile

Five ACEN floating solar projects set for expedited ‘green lane’ processing

THE Board of Investments (BoI) said it endorsed five ACEN Corp. floating solar projects for “green lane” treatment, gaining access to an expedited application and licensing process for investments that are deemed strategic.

The five projects are to be built on Laguna de Bay.

Green lane processing is authorized by Executive Order No. 18 or Constituting Green Lanes for Strategic Investments.

ACEN’s SolarAce4 project will be built on 100 hectares of the lake’s surface off Santa Cruz, Laguna and is expected to produce 140 megawatt peak (MWp) of clean energy.

The 200-hectare AC Laguna Floating Solar Power Plant will be built off Victoria and Pila, Laguna and will generate 280 MWp.

AC Subi will occupy 200 hectares off Victoria and Santa Cruz, Laguna, and is expected to produce 280 MWp.

GigaWind1 Floating Solar Power Plant will be built on 200 hectares off Kalayaan and Paete, Laguna and will generate 280 MWp.

The Ingrid Floating Solar Power Plant will be built on 100 hectares off Lumban, Laguna. It is expected to produce 140 MWp of clean energy.

The BoI said that ACEN’s five RE projects “are consistent with the Philippine government’s mission to accelerate the growth of eco-friendly investments.”

Ayala group’s ACEN specializes in renewable energy with solar and wind farms across the Philippines, Australia, Vietnam, Laos, and India.

It aims to be the largest listed renewable platform in Southeast Asia and is hoping to build 20 gigawatts of renewable capacity by 2030. — Justine Irish D. Tabile

Electricity spot prices fall in Luzon, Visayas in early September

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ELECTRICITY spot market prices fell in Luzon and the Visayas in early September as power demand declined, the Independent Electricity Market Operator of the Philippines (IEMOP) said, while prices in Mindanao increased.

“This decline is primarily attributed to ample supply margins and tamer demand compared to the summer months,” the IEMOP said in a statement.

In a virtual briefing, Isidro E. Cacho, Jr., IEMOP’s head of corporate strategy and communications, said that the average spot market price in Luzon declined to P4.12 per kilowatt hour (kWh) in the first two weeks of September, from P5.53 per kWh in August.

In September so far, average supply increased 3.72% to 13,394 megawatts (MW), while demand fell 3.80% to 9,119 MW.

In the Visayas, the average electricity spot market price likewise fell to P5.93 per kWh in September from P6.18 per kWh previously.

Supply levels hit 2,329 MW, down 2.92%. Demand dropped 1.18% to 1,850 MW.“Meanwhile, in Mindanao, a decrease in the average supply margin of 358 MW, attributed to the deration and outage of some generators, led to a price increase from P4.82 per kWh in August to P5.81 per kWh in September,” it said.

The spot market serves as the venue where energy companies can buy power when their long-term contracted power supply is insufficient for their customers’ needs.

“We foresee that, if those predicaments or situations of supply and demand continues… then we expect the prices to be sustained in the current level, if not lower. Hopefully, that’s what will prevail,” Mr. Cacho said.

As of the first half, Mr. Cacho estimated more than 4,000 identified contestable customers from the Retail Competition and Open Access (RCOA) and the Green Energy Option Program.

“If we pegged it at 4,000, we are seeing that half of the expected contestable customers are already participating in the RCOA or competitive retail electricity market,” he said.

Meanwhile, Mr. Cacho said that the trial period for the reserve market is still ongoing and targeted for completion by the end of the month.

In June, the Department of Energy directed the IEMOP to commence trial operations for the reserve market, while awaiting for the approval of the price determination method from the Energy Regulatory Commission.

“Although the marching orders to us is to ready it anytime… until the end of the year, we will (undertake) final preparations. Hopefully, we get to launch it before the year ends,” he said referring to the commercial launch. — Sheldeen Joy Talavera