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Ayala-led ACEN issues guarantees for subsidiary’s $320-M loan

ACENRENEWABLES.COM

LISTED ACEN Corp. has committed to take responsibility for the repayment of its subsidiary’s $320-million loan in the event that it is unable to fulfill its obligations, the Ayala-led energy company announced on Monday. 

“This loan obtained by ACEN Cayman [will] be used to redeem the redeemable preferred shares held by AC Energy Finance International Limited (ACEFIL) in ACEN Cayman,” the company told the stock exchange. 

Philippine National Bank and Rizal Commercial Banking Corp. are the lenders for ACEN Cayman, the energy company’s offshore investment holding firm, providing $140 million and $180 million, respectively. ACEN said it had executed guarantees on Jan. 12 in favor of the lenders.

“The proceeds will in turn be used by ACEFIL to redeem its maturing green bonds,” the listed company said.

ACEFIL is a subsidiary of AC Energy and Infrastructure Corp., which is directly owned by Ayala Group.

“As a guarantor, ACEN becomes legally obligated to repay the $320-million loan if ACEN Cayman defaults,” Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message. “This essentially puts ACEN’s own financial resources on the line for its subsidiary’s debt.”

“ACEN’s strong credit rating and financial standing serve as additional security for the lenders, making the loan more attractive and potentially lowering the interest rate for ACEN Cayman,” he added.

ACEN has received the highest rating, PRS Aaa, from the Philippine Rating Services Corp. for its P10-billion green bonds, it said in a July 2022 disclosure.

“It’s crucial for ACEN to closely monitor ACEN Cayman’s financial performance and ensure it stays on track to fulfill its debt obligations,” Mr. Arce said.

To date, ACEN has around 4,430 megawatts of renewable capacity spread across the Philippines, Vietnam, Indonesia, India, and Australia.

On Monday, shares of the company rose by six centavos or 1.39% to P4.39 apiece. — Sheldeen Joy Talavera

Art at the South Park Center

In Her Future Memories at the outer wall of Ayala South Park grabs the attention of passersby.

GRACING the outer walls of Ayala South Park, a corporate center in Muntinlupa filled with shops, restaurants, and government offices, is a colorful mural that both beautifies the area and serves as a reminder of its identity.

This is the conclusion of Avida Land’s South Park District Mural Design Competition held in 2023. On Jan. 12, the mural by the winning artists from Marahuyo Studio was unveiled.

South Park District commissioned the chosen group to create a mural with the theme of “Part City, Part Nature, Pure South,” to draw passing art lovers to the outdoor area including commuters, office workers, visitors to the mall, and residents of the two Avida properties in the district.

Towering at 20 meters above the ground, In Her Future Memories is the biggest outdoor mural in the South.

“As part of the Ayala Group of Companies, we are in a position to support artists. It is important for us to dedicate open spaces for art. This is a big area and we could have added more towers to maximize investment, but instead we have an area where people can convene, walk, and breathe fresh air,” Avida Land’s Marketing Head Tess Tatco told BusinessWorld at the launch.

Ms. Tatco said that they have also championed Filipino culture and creativity for years through partnerships, one of which is Tunog Natin, an album of OPM songs by local musicians from a decade ago, available on Spotify.

For the mural, the goal was to transform South Park district into a canvas that would attract art enthusiasts and allow them to explore the open space.

Jhocel “Anthony Marahuyo” Malicsi, the lead artist, noted that the mural’s center features a cyborg, which is the “perfect representation of the union between city and nature.” A cyborg, he said, “is partially mechanical and partially human,” which describes what Filipinos have become.

“This is why we strongly incorporated floral designs that are naturally flowing against the straight lines of the city in the mural,” Mr. Marahuyo added.

“She is seeking the memories she has lost and realizing that what we are looking for is actually where we’re from. This is how we should approach the future living in the city,” Mr. Marahuyo said.

He and the artists on his team completed it in just 12 days.

In Her Future Memories was designed by Mr. Marahuyo and brought to life by 13 fellow artists: Rheydene Luca Ortega, Rhealhet Luca Ortega, Laurence Sebolino Gutierrez, Ma. Aleilyn Joyce Domingo Botin, John Roland Alipis, Ainafer Rupal Arena, John Alexis Rupal Arena, Roma Nieves Huet, Rica Permejo, Mia Jormalyn Astrera Balaoro, John Lenarrd Soriano Barua, Michael Grospe Autos, and Jefferson Panghulan Parajas.

On board to handle logistics for the team were Jerome Edianel Carandang, Charmaine Abiado Camba, Paul Denvir Delmonte, and John Carlo Decrepito. The paint was provided by Davies Paints, who said that the mural will last up to five years.

The mural can be seen at the South Park District, National Road, Alabang, Muntinlupa City. — Brontë H. Lacsamana

Are board directorships just for the old and retired?

FREEPIK

Looking for an alternative career? Eager to approach retirement? One usually asks these questions as we reflect upon the New Year and what it will bring. Not a few people have asked me: What do I do when I reach retirement age? My reply: You have to keep yourself busy. One of the ways to be busy but not doing the usual 9-to-5 grind is to be a board director. The next question is: But I have no idea about finance or risk management. Well, being a director does not mean you have to be a finance whiz or an audit expert. Directors have to be from varied backgrounds and preferably have had experience in a field which the rest of the Board may not have.

Myth: Directors of Boards have to be old and senior.

Fact: Boards now also look for younger people who may have expertise in technology or media to be able to contribute new thinking to an otherwise old Board.

Myth: You need to be a good auditor.

Fact: Boards prefer to have experts in every field relevant to the business, such as the usual fields like Marketing and Audit, and the new fields like ChatGPT, Artificial Intelligence (AI) or even Cryptocurrency.

Myth: Only men are allowed in Boards.

Fact: Publicly listed company Boards are now made up of 17% women. There even is a global group and institute for Women Corporate Directors (www.womeninboards.com) and a local chapter called NOWCD or NextGen Organization of Women Corporate Directors (www.nowcd.com).

Diversity of members is very much encouraged in Board compositions, not just because global studies show diversity as being one of the secrets to profitability, but also to avoid the danger of groupthink or producing “yes-men” or “yes-women” who rubberstamp a family patriarch’s wishes vs what is good for the company’s sustainability plans. The first diversity marker, on many occasions, is gender diversity. Boards used to be composed of an all-male team in black suits, who served as well-paid directors until they croaked or left only to move to another Board directorship. Yes, this is a job or career path for ex-CEOs, ex-COOs, and ex-government officials because names must be impressive in an annual report.

But the younger set should also investigate training for a Board Director seat. Usually, heirs-apparent are given training by their parents by seating them in company Boards. They listen and learn and soon may take over leadership of the company or conglomerate. What if you were not born with the proverbial silver spoon? No worries. You can hone your skills in a field that is relatively new, as there is a big chance that old male directors have no time to study the ever-changing sector called Digital Technology and the Industrial Revolution 4.0.

Firms who are borrowers of foreign banks and lending institutions, and companies with international joint venture partners also look for a Balanced Scorecard, Environmental, Social and Governance (ESG) as qualities, and will actually require a Board that is diverse in gender, age, and experience. This is an opportunity for younger officers and corporate people to raise their profiles in Linked In, for example, so they can be discovered by headhunters and those looking to refresh their corporate Boards.

When I was asked to serve in a non-profit some 15 years ago, I learned from them as they also learned from my humble experience as an entrepreneur. Sometimes, non-profits have to look at sustainability through an entrepreneur’s eyes and not through a donee’s perspective alone. It also helps to serve in non-profit organizations where you learn from more experienced co-directors who are humble enough to let you speak from your own career or history, and see how your sharing can help the organizations.

It also helps to serve in family boards as members can be more forgiving. Even while you are learning from each other’s mistakes (and sometimes it can cost the family a small fortune), you and the other directors might also miss the mark you have set for yourselves to reach. There can be opportunities lost, but serving as a director gives you a holistic approach to problem-solving and forward planning, even for small family corporations. The only secret is for the head of the family to be open-minded to suggestions and “out of the box” thinking.

I was fortunate to have served on a Board at the young age of 18, listening to how board meetings were conducted and per diems were given. As you learn the other theories in school, you add your practical experience and voila you now can speak up, suggest and train to be a more professional director.

I then enrolled in the Professional Directorship Program (PDP) of the Institute of Corporate Directors (www.icd.ph) where you learn from the masters of governance, and where you get exposed to professional corporate and independent directors. It also helps to attend conferences, such as those of the Global Institutes of the Women Corporate Directors (WCD) which were held in Singapore and Tokyo in pre-pandemic years. During the pandemic, workshops and conferences continued online, to the convenience of all who wanted to further hone their skills in being independent directors without the cost of travel.

Finally, learn to also serve in private boards and wear your independent hat as an astute expert in your field, or even just to give your “two cents” to solve what seems easy to you but seems like an insurmountable challenge to the others. You will be surprised at how exposure and experience (not just formal education) can help you come up with a creative solution to most issues.

Manifest and it will come. But make a conscious effort to open your career to other opportunities. Imagine all the wealth of information a manager like you has gathered over time. Your experience and knowledge can benefit other groups — non-profit, for profit, and even publicly listed companies. And let us change the image of the corporate director — they can be youthful, female, and progressive. Not just another sleepy guy in a black suit.

 

Chit U. Juan is a member of the MAP Committee on Diversity, Equity and Inclusion. She was AWEN chair from 2016-2018 and is now a PHILWEN trustee and member of AWEN’s Advisory Council. She is also first vice-president of the ASEAN Coffee Federation.

map@map.org.ph

pujuan29@gmail.com

FEU says Sept.-Nov. income down 6% to P665M

BW FILE PHOTO

LISTED educational institution Far Eastern University, Inc. (FEU) saw a 6% decline in attributable net income for the second quarter of its fiscal year that ends May, driven by higher operating expenses.

In a regulatory filing on Monday, FEU said its attributable net income for the September to November period fell to P664.71 million from P707.35 million in the previous fiscal year.

FEU’s revenues rose 8.7% to P1.59 billion from P1.46 billion previously.

The institution’s operating expenses, however, increased 4% to P880.73 million from P847.21 million in the previous year.

FEU’s operating expenses include depreciation and amortization, insurance, and real property taxes incurred by the organization in relation to investment properties.  

For the first six months, FEU said its attributable net income fell 3.5% to P591.62 million from P613.36 million the previous year.

Revenues  for the period rose 14% to P2.16 billion compared to P1.88 billion, led by the 6% increase in student population as well as higher tuition fees.

The jump in revenues also resulted in a 9% increase in operating expenses to P1.54 billion from P1.41 billion previously.

FEU also expressed optimism that it would sustain its “strong financial position” and “sound operating results” for the remainder of the school year 2023-2024.

“With an increase in group-wide student population during the first semester, the group is positive that it will maintain its enrollment base for the incoming second semester,” FEU said.  

The institution added that it maintains a “conservative outlook” on the national economy.

“With this, the management will continue to be prudent in the implementation of its operations, investment, and business continuity plans, both at the corporate and the academic levels, to mitigate any foreseen negative impacts on the overall operations,” it said.

Shares of FEU at the local bourse were last traded on Jan. 11 at P594.50 apiece. — Revin Mikhael D. Ochave

Not even Taylor Swift can bring back CDs

AMAZON.COM

VINYL snobs, unclench: Reports of the compact disc’s resurrection are greatly exaggerated. Contrary to claims that CDs are making a comeback on the back of Gen Z interest, its long fadeout has, at best, been interrupted. Not even the kiss of life from the industry’s reigning princess charming is likely to revive the fortunes of music’s most unloved format.

The figurative smooch from Taylor Swift, who released albums in both formats last year, pushed CD sales up just a scooch from 2022’s 35.87 million to 36.83 million albums, not enough to match 2021’s dead-cat-bounce of 46.7 million albums. On the other hand, sales of long- and extended-play records continued an 18-year growth streak to 49.61 million albums in the US — again, with a solid assist from Swift.

To be clear, all these numbers are dwarfed by streaming. According to Luminate, the music data tracking firm, there were 1.2 trillion (no typo) on-demand audio streams in the US last year, up 12.7%. Morgan Wallen’s One Thing At A Time was the US chart topper of the year, with 6.36 billion audio streams; Swift’s Midnights was a distant second at 2.86 billion.

Still, the contest between physical album formats is significant, vinyl overtook CDs in sales in 2022 for the first time in a quarter of a century; not coincidentally, it was also the year Swift sold more vinyl records than CDs, with her Midnights becoming the first album to accomplish that feat since the 1980s.

And the older format looks likely to widen the gap. Vinyl sales ended 2023 on a high, with over 2 million units sold in the week ending Dec. 21, the third largest since 1991.

This is, on the face of it, somewhat counterintuitive. Vinyl’s steady growth since 2005, and its especially strong performance since streaming platforms became the main mode of music consumption, is usually attributed to fans’ desire for a physical representation — an artifact — of their passion. A record is not only more tangible than a song list, it also conveys a sense of greater commitment: Whereas an average Swiftie might satisfy themselves with a T-shirt or hoodie from the merch table at one of her concerts, a superfan would demonstrate a higher devotion by purchasing an album.

You’d think that CDs would allow more Swifties to aspire to super-Swiftie status. After all, they are much cheaper, running from $12.89 to $18 per album on the singer’s website. Her vinyl offerings start from $29.99. And yet, look at the 2023 annual report from Luminate and you’ll see that five Swift vinyl albums topped 300,000 units in sales, compared to only one of her CDs. All of the top five vinyl records sold in the US were Swift albums, with 1989 (Taylor’s Version) becoming that rarest of things — an album that moved more than a million vinyl units. The CD version sold 800,000.

But then, forking out 30 bucks for something you can have for less than half the price is the whole point of superfandom, and not just in its Swiftie variant. This writer has, over the years, bought half a dozen vinyl variants of AC/DC’s Back in Black — the first album I ever acquired, and still my all-time favorite — including a tribute version in a hideous translucent curacao color that set me back more than $50. (Will the friend who “borrowed” it kindly give it back?)

Alert readers will have noticed that I avoided discussion on the relative sonic merits of vinyl records and CDs. Having been a passionate debater on this topic during my misspent youth, when I was a vinyl snob myself, I have long since concluded that the dichotomy was ever false. For all the scorn heaped on them by purists and vinyl partisans, CDs — which turned 40 last year — became the dominant format of the late 1980s and ’90s because they were cheaper and easier to store.   

Those qualities seem to matter less to those who buy physical albums these days, so the pendulum has swung the other way. There may be room for both formats on merch tables, but there’s no denying which is the fan favorite. — Bloomberg Opinion

REITs expected to do better in 2024

PHILIPPINE STAR/ MICHAEL VARCAS

By Sheldeen Joy Talavera, Reporter

THE OUTLOOK for real estate investment trusts (REITs) is more positive this year on the back of rate cut prospects and attractive dividend yields, analysts said.

“REITs are expected to do better in 2024 as interest rates start to decline on the back of a dovish pivot in monetary policy,” Juan Paolo C. Colet, managing director of China Bank Capital Corp., said in a Viber message.

Mr. Colet said a much better interest rate environment and a “more buoyant” stock market could open the door to more REIT initial public offerings (IPOs).

The Bangko Sentral ng Pilipinas (BSP) has kept the policy rate at a 16-year high of 6.5% at its last meeting in December as inflation remains elevated. From May 2022 to October 2023, the Monetary Board raised borrowing costs by a cumulative 450 basis points to tame inflation.

However, the market anticipates the BSP will loosen monetary policy once the US Federal Reserve begins its easing cycle.

Toby Allan C. Arce, head of sales of Globalinks Securities and Stocks, Inc., said the outlook for REIT listings “appears more promising” this year.

“REITs possess hybrid characteristics combining equity and fixed-income features, making them more attractive to investors amid the prevailing uncertainties,” Mr. Arce said in a Viber message.

China Bank Securities Corp. Research Associate Lance U. Soledad likewise said in a Viber message that they are bullish on the REIT sector due to its relatively attractive dividend yields compared to prevailing benchmark rates.

However, Mr. Soledad said another spike in inflation and “persistent weakness” in the office sector may hurt the outlook for REITs.

The REIT sector’s performance was weak in 2023 due to elevated interest rates and declining occupancy rates.

“This [2023] was a lackluster year for REITs in terms of price performance, with most of them trading below their IPO prices and even below where they were at the end of 2022,” Mr. Colet said.

Mr. Soledad noted that challenges in the office segment have affected the REITs’ price performance in 2022, as most REITs are exposed to office assets.

“Investor sentiment may have also been affected by negative reports concerning vacant downtown office spaces, a consequence of the widespread adoption of remote work,” Mr. Arce said.

The Philippine REIT market has grown since Ayala-led AREIT, Inc. listed on the Philippine Stock Exchange in August 2020.

There are currently eight REITs in the country, namely AREIT, DDMP REIT, Inc., Filinvest REIT Corp., RL Commercial REIT, Inc., MREIT, Inc., VistaREIT, Inc., Citicore Energy REIT Corp., and Premier Island Power REIT Corp. The REITs’ portfolio includes office buildings, hotels, malls, land, renewable energy and infrastructure.

Data collated by Colliers Philippines showed that six out of the eight REITs had prices that are lower than their IPO prices as of Nov. 28.

“In our view, the Philippine REIT market is primed for further diversification and developers should be on the lookout for other assets that can be divested into their REIT companies,” Colliers said in a report.

Sy-led SM Investments Corp. last year deferred the record $1-billion REIT IPO of its real estate unit SM Prime due to unfavorable market conditions.

More suggestions on movies with historical themes

FREEPIK

The success of the movie GomBurZa prompted me to suggest in my last column the production of more movies about our national heroes, like Marcelo del Pilar, Graciano Lopez Jaena, Emilio Jacinto, Melchora Aquino alias Tandang Sora, Gregoria de Jesus, and other less celebrated patriots. The remarkable success of the 49th Metro Manila Film Festival (MMFF) as a whole now prods me to suggest the production of more motion pictures not only about personages but about organizations, events, and places with historical significance.

As Don Artes, chairman of the Metro Manila Development Authority, which runs the film festival, said last week, “We received reports that moviegoers watched multiple films while others watched films repeatedly. Hopefully, we can sustain this beyond the festival so that our film producers can offer quality movies all year round. We also encouraged filmmakers to create better films for the MMFF’s 50th edition.”

No movie about the secret revolutionary organization Katipunan has been produced, although there was a TV docudrama on it. The film, Bonifacio: Ang Unang Pangulo, a 2014 action drama about the life of Andres Bonifacio, founder of Katipunan, touches on it. Movies about La Liga Filipina, the group formed by Rizal to unite all Filipinos into one society; La Solidaridad, the organization created in Spain by Filipino liberals and students to make Spain aware of the needs of Filipinos in the homeland; and the Katipunan would inspire greater love for country.

GomBurZa made hundreds of thousands of Filipinos learn about the previously unknown Padre Pedro Pelaez. Movies about La Solidaridad, La Liga Filipina, and Katipunan would make Filipinos know more about Marcelo del Pilar, Lopez Jaena, Juan Luna, Mariano Ponce, Antonio María Regidor, Jose Alejandrino, Isabelo de los Reyes, Pedro Paterno, Ambrosio Salvador, Deodato Arellano, Melchora Aquino, Gregorio de Jesus, Procopio Bonifacio, the Brains of the Katipunan Emilio Jacinto, and many others about whom little is written in history books.

The depiction in motion pictures of the Cry of Pugad Lawin on Aug. 23, 1896, the Declaration of Independence from Spain on June 2, 1898, the opening of the Malolos Congress on Sept. 15, 1898, and the Battle of Manila on Feb. 4, 1899 that marked the beginning of the Philippine-American War, would exemplify Filipino bravery and dedication to independence, instilling in the current generation of Filipinos a love of country and devotion to liberty.

The movie about the massacre of Filipinos by American troops in September 1901, Balangiga, The Howling Wilderness, put in proper perspective in the mind of those who saw the picture America’s part in Philippine history. A drama film about the clashes between then Undersecretary of the Interior Jose P. Laurel and Governor-General Leonard Wood in 1923, and the consequent mass resignation of the Filipino members of the Cabinet would give local moviegoers a clearer understanding of Philippine-US relations.

Movies can be about places. There was a movie produced in 1937 called Zamboanga starring Fernando Poe, father of FPJ, and Rosa del Rosario, the original Darna. It was a fictional love story with no connection to historical events. The British film Metro Manila was another fiction film without historical content. The 1964 movie Intramuros, the Walls of Hell dramatizes the desperate stand Japanese troops took during the liberation of Manila in 1945. A movie on the history of Intramuros would draw sizable crowds. Intramuros as it is now, is a major tourist destination.

A film on how Binondo, the oldest Chinatown in the world and the country’s center of commerce during the American colonial period, came about would be a bigger blockbuster. Other places that are potential themes of future films are Fort William McKinley, now Bonifacio Global City, and Fort Stotsenburg, now the Clark Special Economic Zone. Both were established during the Philippine-American War by the US Expeditionary Force to the Philippines — Fort William Mckinley in 1901 as home of the 31st Infantry Regiment, and Fort Stotsenburg in 1902 as the base of the 5th Cavalry. Fort Stotsenburg was converted into an airfield in 1919 and re-named Clark Field, subsequently Clark Air Base, to host the 13th Air Force of the US Army Air Forces.

The movies need not be heavy dramas like GomBurZa or action pictures like Heneral Luna. They can be horror films like Mallari, about Fr. Juan Severino Mallari, a serial killer during the 1800s, or a musical like Broadway’s Here Lies Love, a musical on the life of Imelda Marcos.

Speaking of musicals, a good subject for a musical is the music composed by Julian Felipe, composer of the music of the Philippine national anthem. All the songs he composed could be sung in the movie. Felipe was a patriot himself. He fought against the Spaniards during the Philippine Revolution. He was captured and jailed.

Another possible musical with historical content is an adaptation of the musical play Walang Sugat. The play was originally a zarzuela, which the Oxford Dictionary defined as a “lyric-dramatic genre that alternates between spoken and sung scenes, the latter incorporating operatic and popular songs, as well as dance.” It was written by playwright Severino Reyes in 1896 and first performed in 1902. The music for the original version of the play was composed by Fulgencio Tolentino. The play is about the injustices Filipinos suffered under the Spanish rulers and the cruelty inflicted by Spanish friars on Filipino prisoners.

In fact, Walang Sugat had been adapted into a film twice — in 1939 and in 1957. The 1939 version starred Rosa del Rosario and Leopoldo Salcedo, and the 1957 version, directed by Lamberto V. Avellana, had in its cast Rosa Aguirre, Miguel Anzures, Tony Dantes, Joseph de Cordova, Oscar Keese, Mario Montenegro, Charito Solis, and Jose Vergara. None of the actors in the two versions were singers. If a third version is produced, the cast should be composed of the current crop of talented actor-singers, like Darren Espanto and Jhoanna Robles.

As for comedy films, they can be based on the huge collection of funny stories told by the Thomasites, the American teachers who came to the Philippines in 1901 to assimilate young Filipinos into the American culture. About 600 teachers, men and women, were sent all across the country. There was culture shock on both sides. The teachers kept a daily diary of their experience in the course of their own assimilation into the local culture.

 

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, management professor, and an avid reader of Philippine history.

DoE receives over 24 recommendations for 10th port in offshore wind dev’t study

UNSPLASH

By Sheldeen Joy Talavera, Reporter

THE Department of Energy (DoE) has received more than 24 recommendations for the 10th port to be studied for repurposing for offshore wind development, an official said on Monday.

“We are deliberating on the 10th port, taking into account the recommendations of the offshore wind developers, also the proximity to the service contracts,” Energy Undersecretary Giovanni Carlo J. Bacordo told BusinessWorld.

“Medyo nahirapan kami (We’re having a bit of difficulty determining) the 10th port because… the developers submitted… more than 24 (recommendations),” he also said.

The DoE is studying the upgrade of ports to support the development of offshore wind projects in the Philippines, with technical assistance from the Asian Development Bank, which requires 10 ports to be included in the study.

Nine ports have already been identified, including the Port of Irene in Sta. Ana, Cagayan; Port of Subic; Port of Currimao in Ilocos Norte; Port of Pulupandan in Negros Occidental; Port of Tabaco in Albay; and Bulalacao Port in Oriental Mindoro.

The list also includes the International Container Port Complex in Iloilo; the Energy Supply Base port facility of the state-run Philippine National Oil Co. in Batangas; and the port facility of the International Container Terminal Services, Inc. in Bauan, Batangas. 

Mr. Bacordo said that the submission of the proposed 10th port location is expected no later than February.

The study results are expected to be ready by October 2024.

“We are requesting the owners or the operators of these ports for their cooperation to allow the people who will be conducting feasibility study access to their ports, to furnish them with whatever available information,” he said.

The nine identified ports are the areas with the highest wind potential and also the areas where there are clusters of offshore wind service contracts.

To date, the DoE has awarded a total of 82 offshore wind energy service contracts, with a potential capacity of about 63 gigawatts (GW).

Under the Philippine Offshore Wind Roadmap, the Philippines has an estimated potential capacity of 178 GW in offshore wind resources.

This is expected to help the country reach its aim of increasing the share of renewables to 35% by 2030 and 50% by 2040.

“Right now, we have 82 offshore wind energy service contracts. If we just have these 10 ports, I’m sure that these 10 ports will not suffice for the mobilization of these 82 service contracts,” Mr. Bacordo said.

The pre-feasibility study forms part of the ports development plan of the Transportation department and the Philippine Ports Authority, he said.

“If it’s a government port but not included in the budget, maybe we can go into PPP (public-private partnership) agreements with the private sector,” Mr. Bacordo said.

“For private ports, we are hoping that the private owners who develop these ports… can go to a joint venture with another private firm for the repurpose of ports for offshore wind,” he said.

How DiCaprio shaped ‘twisted’ love story in Killers of the Flower Moon

LOS ANGELES — The unusual relationship of a married couple in historical drama Killers of the Flower Moon could have been left as just a small part of the Martin Scorsese movie about a dark time in American history.

Star and executive producer Leonardo DiCaprio said that he alongside fellow producers decided to center the film around the “twisted” but true love story of Ernest Burkhart, a white man, and Mollie, the Osage woman that he married, to help drive home the human toll.

“When we made the shift to making Ernest and Mollie the centerpieces of the story … it seemed like a dynamic shift,” Mr. DiCaprio, who plays Ernest, told Reuters.

“We flipped the whole story on its head,” the Oscar winner added. “We got to not only explore this very twisted relationship, we got to explore the Osage and the Osage community and how they were affected by all of this.”

Killers of the Flower Moon debuted in cinemas in October and just began streaming on Apple TV+.

In the film, Mr. DiCaprio’s Ernest gets caught up with the machinations of his Uncle William (Robert De Niro). As part of his uncle’s plans, Ernest begins poisoning his wife, Mollie (Lily Gladstone), while also acting as her nurse and protector.

Producers listened to input from Osage members, including descendants from that era, and often changed narratives based on their opinions, Mr. DiCaprio said.

“The Osage community really, they talked in great detail about that relationship, and even though it was an incredibly bizarre, twisted love story, there was love between them,” Mr. DiCaprio said. — Reuters

Ernst & Young: Philippines improves in RE attractiveness

The Philippines went up a notch to 32nd out of 40 markets in the 62nd edition of the biannual Renewable Energy Country Attractiveness Index (RECAI) by Ernst & Young (EY). The index ranks the attractiveness of a country in renewable energy (RE) investment and deployment opportunities. With a score of 56.1 (out of a possible 100), the Philippines remained the third lowest amongst its peers in the East and Southeast Asia region, only ahead of Vietnam and Thailand.

 

Ernst & Young: Philippines improves in RE attractiveness

Gov’t fully awards T-bills at higher rates

BW FILE PHOTO

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday at higher rates, even as investors are pricing in that the Bangko Sentral ng Pilipinas (BSP) has finished its tightening cycle and is ready to cut borrowing costs this year.

The Bureau of the Treasury (BTr) raised P15 billion as planned via its offering of T-bills on Monday as total bids reached P43.188 billion, or nearly three times the amount on the auction block.

Broken down, the Treasury made a full P5-billion award of the 91-day T-bills as tenders for the tenor reached P13.752 billion. The three-month paper was quoted at an average rate of 5.226%, 12.4 basis points (bps) higher than the 5.102% seen for the P7-billion award last week. Accepted rates ranged from 5.193% to 5.25%.

The government also raised P5 billion as planned from the 182-day securities as bids for the tenor reached P13.06 billion. The average rate for the six-month T-bill was at 5.685%, up by 10.3 bps from 5.582% seen for the P7 billion raised from the tenor last week, with accepted rates at 5.668% to 5.7%.

Lastly, the BTr borrowed the programmed P5 billion via the 364-day debt paper as demand for the tenor stood at P16.376 billion. The average rate of the one-year T-bill went up by 2.6 bps to 5.999% from the 5.973% quoted last week. Accepted yields were from 5.985% to 6%.

At the secondary market on Monday, the 91-, 182-, and 364-day T-bills were quoted at 5.337%, 5.5956%, and 5.9734%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data provided by the BTr.

The government made a full award of its T-bill offer amid strong market demand for the securities, a trader said in a Viber message.

“We continue to see good demand as bid-to-cover [ratio] remains above two times… Looks like the market is quite convinced that the period of policy tightening may end this year,” the trader said.

BSP Governor Eli M. Remolona, Jr. earlier said the central bank will likely keep rates higher for longer and would only consider cutting borrowing costs once inflation settles firmly within the 2-4% target.

Headline inflation slowed to 3.9% in December from 4.1% in November and 8.1% a year ago.

However, the 2023 inflation average stood at a 14-year high of 6%. This was above the 5.8% in 2022 and marked the second straight year that average inflation breached the BSP’s 2-4% target.

Meanwhile, Monetary Board member and former Finance chief Benjamin E. Diokno last week said the central bank may cut borrowing costs by as much as 100 bps later this year to keep a healthy rate differential with the US Federal Reserve and amid expectations of easing domestic inflation.

The BSP raised borrowing costs by a cumulative 450 bps from May 2022 to October 2023 to help bring down elevated inflation, bringing the policy rate to a 16-year high of 6.5%.

The Monetary Board will hold its first policy meeting for this year on Feb. 15.

T-bill rates rose on Monday amid a healthy correction after yields went down significantly late last year, tracking secondary market movements, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

“The core US consumer price index and producer price index data eased further. That could still support or justify possible Fed rate cuts in the latter part of 2024,” Mr. Ricafort added, noting the US central bank’s policy easing could be matched locally.

Financial markets still see more than a 60% chance of a rate cut at the Fed’s March 19-20 policy meeting, according to CME Group’s FedWatch Tool, Reuters reported.

The Fed has hiked its policy rate by 525 bps to the current 5.25%-5.5% range since March 2022.

It will hold its first policy review for 2024 on Jan. 30-31.

On Tuesday, the BTr will auction off P30 billion in fresh seven-year Treasury bonds (T-bonds).

The Treasury plans to raise P195 billion from the domestic market this month, or P75 billion via T-bills and P120 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.1% of gross domestic product this year or P1.39 trillion. — Luisa Maria Jacinta C. Jocson with Reuters

Madrid’s new business district aims to learn from rivals

A view shows the Chamartin Train Station rail tracks around and over which the Spanish capital’s ‘Madrid Nuevo Norte’ new business district is set to be built, in Madrid, Spain, Oct. 24, 2023. — REUTERS

MADRID — Madrid has broken ground on a new business district three decades in the planning, but with similar zones in London, Paris and New York struggling as more people work from home, critics see a risk the project could become a giant white elephant.

With a first phase due to be completed by 2035, Madrid Nuevo Norte (MNN) will add 1.6 million square meters (17 million square feet) of office space to the capital, including Spain’s tallest skyscraper.

The plans also include 10,500 new homes and a large park, while Chamartin station will be upgraded to become Madrid’s hub for high-speed and local trains.

Wary that areas like London’s Canary Wharf are losing tenants as remote working grows, developer Crea Madrid Nuevo Norte has tried to future-proof by studying 16 similar projects.

That informed the decision to mix offices with housing, shops and restaurants, head of strategy Miguel Hernandez said.

“Today people want to work, to live, to have leisure, to have retail in areas that are not completely empty by night,” he told Reuters.

Crea Madrid Nuevo Norte is a consortium made up of Spanish bank BBVA, real estate investment trust Merlin Properties and constructor Grupo SanJose.

It is working with Madrid’s mayor’s office on the project, which was snarled up by legal challenges for almost 30 years.

MNN will also seek to attract a more diverse range of tenants than business districts that have relied heavily on the financial sector to fill their offices. These include health sector companies, to take advantage of their location next to one of Madrid’s largest hospitals, Mr. Hernandez said.

The vacancy rate in New York’s financial district has almost doubled since the pandemic, when remote working surged, to 21% in the third quarter of 2023, according to real estate data provider CoStar Group.

Vacancies at Paris’ La Defense soared to 19.7% in the first half of 2023 from 6.7% at the end of 2018, while Canary Wharf has lost 1 million square feet in demand for its offices since the pandemic, according to CoStar.

HSBC is set to leave Canary Wharf for a smaller office in central London, while Barclays is reducing its footprint there. Credit Suisse’s long-running presence is also uncertain after its takeover by UBS, which plans to axe thousands of jobs.

Canary Wharf Group is seeking to adapt and diversify by developing a giant life sciences campus and building more flats, restaurants and bars. Canary Wharf Group did not respond to a request for comment.

LESS COMMUTING
Spaniards embraced working from home during the pandemic more loosely than some neighbors. They attend the office an average of 2.6 days a week compared to the European average of 1.8 days, a study by CBRE — one of the world’s largest real estate investment managers — released last week showed.

Merlin Properties CEO Ismael Clemente said that factor, and a shorter commute than to Canary Wharf or La Defense, made him confident there would be demand for office space.

“If it takes you 20 minutes to get to work, why the hell are you going to work from home?” Mr. Clemente said.

But some analysts argue that Madrid, which already has the AZCA and Four Towers business parks nearby, really needs more residential, not commercial property.

PwC estimates that Madrid will need 11,000 new homes per year to meet demand while a study by Gesvalt found the city has a shortfall of 214,000 affordable homes.

According to EY, the city had 1.7 million square meters of empty offices in the first half of 2023 and an office vacancy rate of 11%, up from 9.3% in 2020.

Javier Garcia-Mateo, EY’s head of strategy and transactions for the real estate sector in Spain, said MNN should reduce its planned office space by 500,000 square metres and build 15,000-20,000 additional homes instead.

“Why are you going to develop offices when what you need there is residential?” Mr. Garcia-Mateo said.

But some local residents have campaigned against the project because they fear it will eventually become a giant upmarket suburb that marginalizes its working class neighbors.

“When they don’t have demand in the market the developers will convince the government to allow them a change of classification so that instead of offices in 20, 30 years they’ll be homes — luxury ones, of course,” said Vicente Perez, who led one such campaign. 

The mayor’s office did not reply to a request for comment. Crea Madrid Nuevo Norte´s Mr. Hernandez said it would be difficult to change the classification now the project is underway.

Merlin’s Mr. Clemente said the project will take as much as 40 years to complete, drip-feeding offices into the market to avoid flooding it.

Advocates for the development say it will help attract more international companies to the Spanish capital.

Paloma Relinque, director of capital markets at CBRE in Spain, said Madrid lacks prime offices that meet the sustainability standards they demand. The Grade A office vacancy rate in the area where MNN will be built is around 0.7% compared to 7.8% for all offices, according to CBRE.

Jose Ramon Iturriaga, a fund manager at Abante Asesores in Madrid, which holds shares in Merlin, drew parallels with a recent surge in luxury hotel construction in the city.

“If you don’t have this kind of premium office space, certain high-end business hubs won’t come,” he said. — Reuters

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