Benchmark rate may reach 6.75% this year — Nomura

March 13, 2023 | 12:33 am

eggs-vendor — A vendor arranges eggs in boxes at a store along Blumentritt in Manila. — PHILIPPINE STAR/WALTER BOLLOZOS

By Keisha B. Ta-asan, Reporter

ELEVATED CORE INFLATION may likely prompt the Philippine central bank to hike its policy rate to as high as 6.75% this year.

In a report dated March 10, Nomura Global Markets Research raised its consumer price index (CPI) forecast for the Philippines this year to 5.8% from 5.6% previously due to persistently high core inflation in the first two months of the year.

This is lower than the Bangko Sentral ng Pilipinas’ (BSP) full-year forecast of 6.1% for 2023, but still above the 2-4% target range.

The projections are contained in a note, “Philippines: Higher inflation for longer” written by Nomura Chief ASEAN (Association of Southeast Asian Nations) Economist Euben Paracuelles and analyst Rangga Cipta.

Headline inflation slowed to 8.6% in February, from the 14-year high 8.7% in January, data from the statistics agency showed.

However, core inflation, which excludes volatile prices of food and fuel, quickened to 7.8% in February from 7.4% in January. This is the quickest rise in core inflation in over 22 years.

“Core inflation is still climbing due to more persistent second-round effects. This, and a still-large current account deficit, suggests more policy rate hikes are on the cards,” Nomura said.

Based on data from the BSP, the current account deficit stood at $5.8 billion in the third quarter of 2022, widening from the $974-million gap seen the year prior.

Given the new inflation forecast and with expectations of further tightening by the US Federal Reserve, Nomura sees BSP hiking policy rates by 25 basis points (bps) each at its next meetings until June, bringing the key rate to peak at 6.75%.

The Monetary Board is scheduled to meet on March 23, May 18, and June 22.

“Beyond that, we still expect BSP to reverse course and start cutting its policy rate, but only from March 2024, in line with our Fed call,” Nomura said.

Since May 2022, the Monetary Board has hiked policy rates by 400 bps, including its recent 50-bp hike last month. This brought the benchmark rate to 6%, the highest in nearly 16 years.

Nomura also expects the fed funds rate to reach 5.5-5.75% by June, 75 bps higher than its previous forecast of 4.75-5%.

The US Federal Reserve raised the fed funds rate by 25 bps to 4.5-4.75% last month. It has hiked rates by a total of 450 bps since March 2022. The Fed’s next policy review will be on March 21 and 22.

Security Bank Corp. Chief Economist Robert Dan J. Roces said the country should continue to watch out for persistently high core inflation.

“The implication of a still-rising core inflation and slowing headline inflation is that policy makers may need to carefully monitor and address the underlying inflationary pressures in the economy, rather than relying solely on headline inflation measures. This could include adjusting monetary policy or implementing other measures aimed at reducing inflationary pressures in the economy,” he said.

Inflationary pressures include rising labor costs, higher prices of raw material and commodities, transport fare hikes, supply chain disruptions, and stronger demand for goods and services, Mr. Roces said.

He said fiscal policies such as government spending, tax policies, and regulations can also contribute to underlying inflationary pressures.

To manage these second-round effects, Mr. Roces said the Monetary Board is likely to continue its tightening cycle, but only by 25 bps more on March 23 before pausing.

“We expect a 25-bp hike by the Monetary Board at its next meeting on March 23. This shall bring the policy rate to 6.25% followed by a possible pause should disinflation begin with base effects kicking in and the foreign exchange market relatively confined to a range,” Mr. Roces said.

“Moreover, the headline rate gives the central bank some leeway to scale back its aggressive tightening policies, which have seen borrowing costs increase by 400 basis points since May last year,” he said, adding that non-monetary measures may help temper inflation in the coming months.

ECONOMIC OUTLOOK
Meanwhile, Nomura kept its 5.5% gross domestic product (GDP) forecast for the Philippines this year, slower than the 7.6% growth in 2022 as household spending is expected to slow amid high inflation and fading pent-up demand.

However, it hiked its projection for the Philippines’ budget gap this year to 6.6% of GDP, from its previous estimate of 6.1%. Still, this is narrower than the fiscal deficit outturn of 7.3% of GDP last year.

“We think revenues will underperform this year, given our nominal GDP growth forecast is lower than in the medium-term fiscal framework. Importantly, we think expenditures will hold up, led by capital outlays under the ‘build back more’ infrastructure program,” Nomura said.

Data from the Bureau of the Treasury showed the full-year deficit in 2022 was lower by 3.35% or P56 billion than the P1.67-trillion shortfall in 2021 as revenue growth of 17.97% outpaced the 10.35% expansion in government spending.

The government aims to reduce the deficit to 6.1% of GDP this year.

Finance dep’t studying feasibility of carbon tax

March 13, 2023 | 12:32 am

The Philippines has committed to reduce its greenhouse gas emissions by 75% by 2030. — PHILIPPINE STAR / MICHAEL VARCAS

By Luisa Maria Jacinta C. Jocson, Reporter

THE FINANCE department is still looking into the feasibility of implementing a carbon tax in the country.

“We’re still studying the feasibility (of the tax). Unlikely that it will become a bill within the year,” Finance Undersecretary Maria Cielo D. Magno said in a text message.

The Finance department earlier said it is considering a carbon tax to encourage businesses that emit carbon dioxide to shift to sustainable practices. The country currently does not have any explicit form of carbon pricing.

A carbon pricing scheme in the Philippines could raise up to $7 billion in revenues by 2030, according to an earlier study by the International Monetary Fund (IMF).

Albay Rep. and House Ways and Means Committee Chair Jose Maria Clemente S. Salceda said that the legislature is waiting for the government’s carbon pricing proposal.

“We will take up any carbon tax proposal that comes from the Department of Finance (DoF). So far, there is not yet an official administration version. So, we will wait for that, and our timeline will depend on that,” he said in a Viber message.

The DoF previously said that the carbon tax is one of its priority measures. Revenues raised from carbon taxes are typically used to fund programs that mitigate greenhouse gases and boost sustainability.

A tax on carbon emissions was included in the fiscal consolidation plan proposed by then-Finance Secretary Carlos G. Dominguez III last year. It was part of package 3, which was to be implemented in 2025.

Mr. Salceda said the Philippines “disproportionately suffers” from the impact of carbon emissions, especially from other countries.

“If anything, more advanced countries and major polluters should pay a carbon tax and compensate countries like us for the damage,” he said.

However, Mr. Salceda said the government should prioritize renewable energy instead of a carbon tax.

“We emit around 1.32 tons of carbon per capita versus 4.4 tons per capita worldwide, so I would say an energy transition to renewables is more urgent for the Philippines than a direct carbon tax,” he said.

“The closest we have to carbon taxes is fuel excise taxes and to some degree, automobile excise taxes and the road users’ tax. I support updating the MVRUT (motor vehicle road user’s tax) and fixing our automobile tax system,” he added.

More than half or 52.4% of greenhouse gas emissions in the Philippines are subjected to a positive Net Effective Carbon Rate in 2021, unchanged since 2018, according to the Organisation for Economic Co-operation and Development. In 2021, fuel excise taxes covered 52.4% of emissions.

Analysts said a carbon tax would not just raise revenues but also promote environmental sustainability.

“Carbon taxes are a vital tool to address carbon emissions and also raise revenue that should be plowed back to environmental and climate investments,” Antonio Gabriel M. La Viña, a lawyer, educator and environmental expert, said in a text message.

Ateneo de Manila University Economics Professor Leonardo A. Lanzona said in an e-mail that carbon taxes would also address the problem of climate change and promote green jobs.

Mr. La Viña said the carbon tax should be designed “not to be regressive” and should not be passed to consumers.

“It must be based on the polluters pay principle and consistent with principles of climate justice and a just transition,” he added.

Mr. Lanzona said the government should also ensure revenues will be used to make the shift to sustainable practices easier.

“All of these benefits will not be achieved unless the government uses the tax revenues to create an environment that will make it easier for firms and industries to shift to more environmentally friendly alternatives,” he said.

Mr. Lanzona cited training and education programs for workers to develop skills in green industries, incentivizing energy efficiency industries such as electric vehicle manufacturing, and increasing public investments in renewable energy sectors like solar and wind power.

“Unless the necessary logistics and policies are in place, the tax can be a source of inflation as the tax can be transferred to the consumers in the form of higher commodity prices,” he added.

The Philippines has committed to reduce its greenhouse gas emissions by 75% by 2030.

Nat’l Government gross borrowings drop in 2022

March 13, 2023 | 12:31 am

GROSS BORROWINGS by the National Government declined 16% to P2.16 trillion in 2022, the Bureau of the Treasury (BTr) said.

Data from the BTr showed that total borrowings dropped 16% year on year from the P2.58 trillion seen as of end-December 2021.

However, the P2.16-trillion gross borrowings were below the P2.2-trillion target for the year.

In December alone, total gross borrowings stood at P59.43 billion, versus the net redemption of P196 billion in the year prior.

During the month, local debt accounted for more than half or 55% of total gross borrowings.

Gross domestic debt stood at P32.96 billion in December, a reversal of the P236-billion net redemption in the same month in the previous year.

The BTr raised P57.97 billion from fixed rate Treasury bonds, while Treasury bills resulted in a net redemption of P25.01 billion.

Meanwhile, gross external borrowings in December fell 33.6% to P26.48 billion. This consisted entirely of new project loans.

For the full year, the bulk came from domestic sources, which accounted for over three-fourths or 76% of gross borrowings.

Local gross borrowings declined by 18% to P1.64 trillion in 2022 from P2.01 trillion in the previous year.

Broken down, this consisted of P834.48 billion worth of retail Treasury bonds and P1.19 trillion worth of fixed-rate Treasury bonds. It also included a net redemption of Treasury bills worth P385.8 billion.

Meanwhile, external gross borrowings reached P520.9 billion, 8.4% lower than the P568.67 billion in 2021.

This includes P120.68 billion in new project loans and P136.6 billion in program loans.

It also consisted of global bonds and Samurai bonds, which raised P234.26 billion and P28.55 billion, respectively.

The government borrows from foreign and domestic sources to close its widening fiscal deficit.

In 2022, the budget gap was at P1.61 trillion, bringing the fiscal deficit to 7.33% of gross domestic product (GDP). This was higher than the government’s 6.9% target.

This year, the government plans to borrow P2.207 trillion to fund a budget deficit capped at 6.1% of GDP.

Of the total, 75% or P1.654 trillion will be sourced domestically. The remaining P553.5 billion will be borrowed from external sources. — L.M.J.C.Jocson

SEC readies ‘blue’ bonds framework

March 13, 2023 | 12:11 am

THE Securities and Exchange Commission (SEC) is set to release a “blue” bond framework that could drive funds to support the sustainability of water resources, a commissioner said.

“It’s similar to the green bond framework but it’s more blue-based, meaning more water [and] water resources. That’s something coming up soon,” SEC Commissioner Kelvin Lester K. Lee told BusinessWorld on the sidelines of a press briefing on Friday.

Mr. Lee said the blue bond framework comes as the commission continues to move for wider adoption of sustainability standards.

He said the SEC aims to release the framework by the second quarter of the year. The commission previously set guidelines for the issuance of green bonds, which allowed companies to raise funds for climate and environment projects.

The proposed framework follows the securities regulator’s release of a draft circular adopting the Association of Southeast Asian Nations (ASEAN) Sustainable and Responsible Fund Standards (SRFS), which seeks to align with ASEAN member states in establishing and promoting sustainable and responsible investment funds.

“The point is, in this day and age, sustainability [and] sustainable finances are important already. We want to drive money and flows of funds towards green investments to support the whole net-zero issue,” Mr. Lee said.

The ASEAN SRFS applies to investment companies including the sub-funds of umbrella funds and companies seeking to offer investments locally or across borders in other ASEAN member states.

According to the draft, the commission requires investment companies to be registered under the Investment Company Act and the Securities Regulation Code, and comply with rules relating to sustainable and responsible investment (SRI) funds and ASEAN SRFS.

Additionally, the required payment is P10,000 for local companies and P80,000 for foreign companies, plus 1% of the said fee as a legal research fee.

The SEC’s Memorandum Circular No. 11, Series of 2022, or the Rules on Sustainable and Responsible Investment Funds, provides guidelines for investment companies that qualify as SRIs.

Foreign companies are also required to present proof of their qualifications as an ASEAN SRF. They also need to disclose the percentage of net asset value (NAV) that would be devoted to non-environmental, social, and governance matters.

Companies are also required to submit their strategies and objectives for attaining sustainable investments.

“The ASEAN SRF should primarily invest in securities which are in accordance with its sustainable investment objectives and strategies, with a minimum asset allocation of at least two-thirds of its NAV, at all times,” the SEC said.

A violation of the rules translates to a penalty of between P20,000 and P100,000, depending on the provisions violated. A violator could incur a fine of P400 to P1,200 per day for continued violations.

According to Mr. Lee, the draft circular was released for public dissemination and is set for release in two to three weeks. — Adrian H. Halili

MPIC plans to list units, ‘aggressive’ farm foray

March 13, 2023 | 12:10 am

METRO Pacific Investments Corp. (MPIC) is considering a market listing for some of its subsidiaries after their projects’ completion while aggressively investing in agribusiness in the next five years.

“Yes, for Maynilad [Water Services, Inc.], specifically because it’s part of their franchise,” MPIC Executive Vice-President and Chief Financial Officer Cheryl A. Cabal-Revilla told reporters last week when asked about units that are about ready for an initial public offering (IPO).

“[For] toll roads, we’re just trying to finish all of the capex (capital expenditure) projects that we are working on now,” she said. “For the hospital group, the [IPO] timing is largely driven by KKR & Co. because they own more of MPPHI (Metro Pacific Hospitals Holdings, Inc.) versus us.”

Maynilad, MPIC’s water business, submitted its notices of acceptance of its 25-year legislative franchise on March 21, 2022.

As part of its franchise under the Republic Act No. 11601, Maynilad is required to offer at least 30% of its outstanding capital stock to Filipino citizens within five years of the law’s effectivity. The law was approved by former President Rodrigo R. Duterte on Dec. 10, 2021.

Meanwhile, Ms. Cabal-Revilla said that MPIC is planning to make its agribusiness, Metro Pacific Agro Ventures, Inc. (MPAV), its fourth core business.

“The plan of MVP is to make agri a core pillar of the MPIC group. Over time, it will be as big as Maynilad or the hospital group,” she said, referring to the conglomerate’s chairman, Manuel V. Pangilinan.

“It will depend on the success of the acquisitions that we will make,” she said. “It depends on how fast the acquisitions will be in the next few years. But the target is to aggressively invest in agri in the next five years.”

Ms. Cabal-Revilla said MPIC is investing up to P8 billion this year in the two acquisitions of MPAV.

In June 2022, the unit marked its foray into agribusiness by acquiring Carmen’s Best Group, which is known for its premium ice cream offerings.

In February this year, MPAV acquired a 34.76% stake in listed coconut products maker Axelum Resources Corp. for P5.32 billion.

MPIC is one of three key Philippine units of First Pacific, 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 stake in BusinessWorld through the Philippine Star Group, which it controls. — Justine Irish D. Tabile

Ayala Corp. expects return to pre-pandemic income

March 13, 2023 | 12:09 am

AYALA Corp. expects the return of its net income to pre-pandemic levels as the listed conglomerate projects its core value drivers to further contribute this year.

“We expect our net income after tax to be guided by our core pre-pandemic levels. We expect our core value drivers to continue contributing meaningful levels of income,” the company said in an e-mail response to questions.

Ayala disclosed on Friday that core net income last year rose by 18% to P27.7 billion, due to contributions from its core operations.

“This was mainly due to higher contributions from BPI (Bank of the Philippine Islands) and Ayala Land[, Inc.], both of which benefited from the reopening of the economy,” it said in a media release.

Ayala said BPI’s net income grew by 66% to P39.6 billion due to higher interest and non-interest income.

Other units similarly posted profit growth.

Globe Telecom, Inc.’s net income increased by 46% to P34.6 billion, mainly attributed to higher data service revenues and gains from the sale of properties and assets.

Additionally, ACEN Corp. posted P13.1 billion in net income, more than double the previous year’s profit, due to its acquisition of UPC Australia and contributions from its new domestic and international power plants.

Its parent company AC Energy and Infrastructure Corp.’s net income fell by 50% to P4.6 billion.

The company said that this was due to “one-offs” from the divestment of two coal assets: a write-down from the divestment of South Luzon Thermal Energy Corp. in 2022 and a gain from the divestment of GN Power Kauswagan Ltd. Co. in 2021.

ACEN also reported a 5% drop in earnings before interest, taxes, depreciation, and amortization to P14.3 billion.

“As for ACEN, it has 2.4 GW (gigawatts) of new capacity under construction, 53% of which is coming online in 2023,” the company said in the e-mail.

“Thus, this will help ACEN return to equilibrium and be a net seller in the spot market,” the company added.

Meanwhile, First Metro Investment Corp. (FMIC) Head of Research Cristina S. Ulang said in an e-mail that Ayala is likely to return to pre-pandemic earnings through contributions from its subsidiaries.

“AC is likely to climb its way back to pre-pandemic earnings through likely strong contributions from BPI and the renewable energy arm’s expansion,” Ms. Ulang said, referring to the company’s stock symbol.

Ms. Ulang also said that the company’s telco arm could face “tougher competition amid a matured market.”

This year, Ayala has allocated a capital expenditure budget of P264 billion, which is 5.8% lower than the P280.3 billion spent in the previous year.

On the stock market on Friday, Ayala shares fell by 1.03% or P6.50 to close at P624 apiece. — Adrian H. Halili

New San Jose Builders expects P7B from Malate project

March 13, 2023 | 12:08 am

REAL estate developer New San Jose Builders, Inc. (NSJBI) is expecting to generate P7 billion in revenues from its flagship Manila project, Victoria de Malate, a company official said.

“We already sold around P5 billion. The balance left would be around P2 billion, which is more than 50% of sales,” NSJBI Chief Operating Officer Leo A. Barrosa told reporters at a topping-off ceremony on Friday.

The 45-storey residential condominium, which has a total project of P3 billion, stands on a lot size of 3,480.5 square meters. Each of its unit cost around P3 million to P4 million.

Victoria de Malate’s amenities include a swimming pool, gymnasium, playground, function room, and commercial areas such as shops and restaurants.

“Today’s ceremony represents a major milestone for NSJBI and the future residents of this building. We are very excited about the future as we are for the present. We look forward to the victory of full completion of this project,” Mr. Barrosa said in a speech during the event.

Turnover of the condominium units is set to start by the end of June until December this year. Victoria de Malate is located on Angel Linao St. in Malate, Manila.

Mr. Barrosa said that the company has four projects lined up, including the Victoria Arts & Theater Tower along Timog Ave., Quezon City; Victoria de Hidalgo in Quiapo, Manila; and Victoria Sports Tower in Monumento, Caloocan City. — Sheldeen Joy Talavera

ERC to review Meralco-GNPD power deal

March 13, 2023 | 12:07 am

THE Energy Regulatory Commission (ERC) will review if the emergency power supply deal between Manila Electric Co. (Meralco) and Aboitiz Power Corp.’s GNPower Dinginin Ltd. Co. (GNPD) is reasonably priced, the agency’s top official said.

In a Viber message, ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said the energy regulator will determine the “reasonableness” of the agreed rates under the emergency power supply agreement (EPSA).

“Meralco and GNPD have not filed with the ERC their application for approval of their emergency power supply agreement. Once it is filed, the ERC shall determine the reasonableness of the tariff,” Ms. Dimalanta said.

Ms. Dimalanta said that a refund is possible if the commission determines that the rates imposed are not reasonable as mandated by the Department of Energy’s (DoE) competitive selection process.

“Only the approved rates would be authorized for collection,” she said.

For the February supply period, Meralco secured an EPSA with GNPD covering 300 megawatts (MW) of supply. The deal has a full fuel pass-through structure with an implemented rate of P8.53 per kilowatt-hour (kWh).

In December, Meralco also secured an EPSA for 300 MW with AboitizPower for a rate of P5.96 per kWh from Dec. 15, 2022 until Jan. 25, 2023.

Lawrence S. Fernandez, Meralco vice-president and head of utility economics, said in a press briefing on Friday that the deal contributed to the increase in the generation charge for the March billing.

“It is already included because the PSA with SPPC (South Premiere Power Corp.) has been suspended since December. The replacement contract that we entered to cover the supply that would have been sourced from [SPPC] was already incorporated in the generation charge,” Mr. Fernandez said.

However, Mr. Fernandez said that GNPD did not offer to extend its EPSA with Meralco.

“Meralco has sought offers from other suppliers and this has been submitted to the [DoE] for its consideration and approval,” he said.

To recall, Meralco’s decision to secure an EPSA came after its 670-MW power supply deal with SPPC, the administrator of the gas-fired power plant in Ilijan, Batangas, was subjected to a writ of preliminary injunction issued by the Court of Appeals (CA).

The 670-MW contracted capacity is supposed to be covered by Meralco’s PSA with SPPC, which was agreed upon in 2019 for a period of 10 years at P4.2455 per kWh.

In December, SPPC issued a notice of cessation of its supply to Meralco.

This month, typical households in areas served by Meralco can expect their electricity bills to go up by around P109 due to an increase in the generation charge.

Meralco said that the overall rate this month surged to P11.4348 per kWh compared to P10.8895 per kWh a month ago.

The generation charge went up by P0.4636 to P7.3790 from P6.9154 per kWh in the previous month due to higher supply costs brought by the Malampaya gas-to-power facility’s maintenance shutdown from Feb. 4 to 18.

Households that consume 200 kWh will see their monthly bills increase by around P109. Residential customers consuming 300 kWh, 400 kWh, and 500 kWh will see an increase of P164, P218, and P273, respectively, in their monthly bills.

“This month’s generation charge increase would have been significantly higher, but we took the initiative to cushion the impact in the bills of our customers by coordinating with some of our suppliers to defer collection of portions of their generation costs,” Meralco Head of Regulatory Management Office Jose Ronald V. Valles said in a media release.

Mr. Valles said that around P1.1 billion in deferred cost reduced the generation rate by around 40 centavos per kWh and will be billed on a staggered basis in April and May.

In a statement on Friday, Terry L. Ridon, convenor of think tank InfraWatch PH, called on the ERC to reject any emergency power supply deal in the Meralco franchise area that is priced higher than last year’s rejected agreement with the units San Miguel Corp.

He said the commission “will effectively facilitate profiteering if it allows generation firms to impose higher rates despite lower operating costs compared to last year’s price fluctuations.”

“These coal and gas companies can’t keep treating consumers as a cushion to the high costs of their insistence on selling power using expensive fuels. This is precisely why we have been calling on our energy authorities to mandate means to shield consumers from costs that keep getting passed on to them, foremost of which would be requiring all power contracts to have fixed rates from the get-go,” advocacy group Power for People Coalition said in a media release.

Meralco’s controlling stakeholder, 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. — Ashley Erika O. Jose

Singapore-based AECO Energy starts PHL operations

March 13, 2023 | 12:06 am

SINGAPORE-based energy technology and services firm Asia Energy Co. (AECO Energy) has launched its operations in the Philippines and targets to partner with contestable power users and retail electricity suppliers (RES).

“We are optimistic about the prospects that await us here in the Philippines. I’m sure our 14 years of experience in delivering energy services and solutions in mature deregulated markets will be critical to our success,” Alan Jones, chairman of AECO Energy, said in a media briefing last week.

Contestable customers have reached a power consumption threshold that allows them to buy electricity from their chosen RES under the retail competition and open access (RCOA) program. Their option to switch from a distribution utility is authorized by Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001.

Mr. Jones said AECO Energy’s expansion to the Philippines will bring customer-centric market platforms to Filipinos.

The market and technology solutions company will offer an assisted, end-to-end electricity management service as well as a bidding platform exclusively developed for retail electricity suppliers to automate bidding requests from contestable customers.

“With the understanding that contestable customers’ needs are unique for every organization, our energy experts will work closely with customers to help them reduce their costs, drive efficiency, and make better buying decisions. By providing technology-based, data-led energy technology solutions, we want to create a profound impact on our customers’ business to better position them for sustainable growth in the long-term,” said Debbie Alfonso, general manager of AECO Energy.

RCOA, which introduced retail competition to the energy industry, allows a consumer with a monthly average usage of at least 500 kilowatts over the past 12 months to forge a supply contract with a RES. Energy consumers can also customize their supply contracts according to dispatch, technology, or power plant. — Ashley Erika O. Jose

Honda BR-V 1.5 S CVT: More for less, more or less

March 13, 2023 | 12:06 am

VELO_Page1_KAP02334 — PHOTO BY KAP MACEDA AGUILA

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This SUV/MPV combo serves up all the virtues and values you need

THERE IS MORE than one way to skin a cat — figuratively, of course.

That’s exactly the case in the worldwide obsession with SUVs. This fascination with larger, taller, and more powerful rides has, in turn, given rise to subgenres that — while still hewing closely to the values which have made the category so popular — offer something else.

Today’s embarrassment of riches feature a surfeit of crossovers and people-mover hybrids — more distinctly addressing the evolving tastes of a still-growing number of motorists. In this regard, you could say that brands have clearly adopted the mantra (literally, this time) “go big or go home.”

Repeatedly going to the SUV well has yielded rewards. Take the case of Honda Cars Philippines, Inc. (HCPI), which has three compelling and popular SUV/crossover vehicles here: the CR-V, the HR-V, and the entry-level volume seller that is the BR-V.

The BR-V sits in a price point that is indeed a little more attractive if you’re looking for bang-for-the-buck virtues. Sure, it breaches that psychological (and budgetary) hurdle of a million pesos, but the most affordable S variant (with a manual transmission) sits at a relatively reasonable P1.048 million — certainly perfect if your down payment appetite and monthly allocation allow for its purchase.

Since the first-generation BR-V rolled out locally in the 2016, Filipinos have taken to the model — to the tune of some 23,000 units sold since it debuted here in 2016 (worldwide, the figure is 300,000). The all-new BR-V was launched here in November of last year, and it clearly ups the ante not only for the model line but for its segment rivals.

We got behind the wheel of the S variant — the one with a CVT — and wondered if car browsers would be served well by it.

For starters, it should be known that the BR-V generally gets a bump in size versus the first generation. It stretches longer (4,490mm vs. 4,456mm), wider (1,780mm vs. 1,735mm), taller (1,685mm vs. 1,677mm); it even clears the ground higher (207mm vs. 201mm).

The upsize has resulted in more space within the vehicle as well. With the seatbacks upright, the BR-V gets 244 liters of capacity, up from 223. With the third row stowed, that number grows to 530 liters (from 521); with the second and third seatbacks collapsed, the total is 1,032 liters of goodness waiting to be conscripted for workhorse duty. To be sure, the increased capacity doesn’t only benefit cargo but passengers, too. Even third-row occupants (of reasonable size, of course), should find more than ample room for themselves.

There’s a lot of hard plastic inside, but the cabin and its appurtenances are tastefully executed to look more upscale. I love the simple and consistent black with matte-silver accents, and the intuitive layout. Everything is where it should be.

The all-new BR-V still sports a 1.5-liter power plant, but this time it’s a DOHC that supplants the old generation’s SOHC. Honda says that this results in more frugal fuel economy, despite the fact that the new BR-V is heavier at 1,298kg versus the 1,250kg of old.

It also gets going at lower torque — certainly good news for fuel economy and for more spirited driving. Keeping the S variant’s gearshift at D keeps response reasonable (read: not too quick). For the S CVT variant, HCPI (in partnership with the Automobile Association Philippines) reported a top fuel economy figure of 22.62kpl. This test was run over 128 kilometers of highway driving, with speeds of 60 to 80kph at 1,500-2,000rpm, with air-conditioning at 24°C and lowest fan speed.

My real-world, not-even-trying-to-hypermile test saw the vehicle breach double-digit figures, which means it could really have done much better if I was half-trying to save on the good stuff. So it passes the sniff test on that score.

The best thing about the BR-V, aside from its commodious cabin, is the design. I’m glad that Honda ditched the trapezoidal execution — which gave the previous generation a tall, rather unimposing gait — for a more substantial one. The BR-V now has both heft and poise to more convincingly earn a spot in Honda’s pantheon of SUVs. I’ve said in a previous piece that HCPI is stressing that the BR-V now embraces both SUV and MPV traits. “The all-new BR-V basically combines the SUV value with the MPV value and the driving experience of a Honda,” said HCPI General Manager for Sales Atty. Louie Soriano in past interview with “Velocity,” adding, “The MPV, expressed in the flexible space and seating capacity, meets the need for utility. The SUV aspect is in the high ground clearance, and comfort; then you round it out with the Honda driving experience. It’s practical and prestigious.”

If you don’t want to drive a manual, then the S CVT variant is the most affordable BR-V you can get — setting you back P1.15 million. Up a step is the V CVT, priced at P1.295 million. The more expensive variant gets (among others) a steering wheel wrapped in leather, chrome-hued door handles, silver-painted garnishes, an additional two tweeters on top of the four standard woofers, automatic air-conditioning, and leather-covered seats. If you can live with the differences (and I can’t see why not), then the S CVT should do the trick nicely.

This model certainly punches above its price point — a great option for people looking to upgrade from, say, a smaller sedan or even a more modest MPV or mini SUV. In the BR-V, you’ll tick a lot of the important boxes that make SUVs such a popular category, and end up with a lot of money left in the bank.

IKEA x Marimekko: Inspired by Scandinavia’s sauna culture

March 13, 2023 | 12:05 am

Marimekko-BASTUA-Runway-Model-2-thumb — MARIMEKKO Bastua Tray and Kimono

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By Cathy Rose A. Garcia, Managing Editor

SAUNA culture is an essential part of life in Scandinavia, particularly in Finland and Sweden. So it comes as no surprise that Swedish retail giant IKEA and Finnish design company Marimekko have collaborated on a limited-edition collection inspired by Nordic sauna culture.

IKEA Philippines launched on March 9 the Bastua collection, which features colorful bath towels, kimono robes, a leaf-shaped tray, a mirror, and a sauna bucket.

“The collaboration encapsulates the sensations of endless summers and the simple and aesthetic beauty of Nordic nature in furniture and accessories for the home,” Henrik Most, creative leader at IKEA, said in a statement on the company’s website.

The Bastua collection is the first time that Marimekko has designed a set of prints for any collaboration.

Marimekko is best known for its original and bold prints such as the iconic Unikko (poppy) and Kivet (stones). In recent years, it has collaborated with global brands such as Uniqlo and Adidas.

“Capturing the essence of Marimekko’s Finnish roots and its connection to the historic origins of sauna culture was a fundamental part of the design journey and the creation of the Bastua prints,” Rebekka Bay, creative director at Marimekko, said in a statement.

Marimekko designer Maija Louekari came up with the leaf print (Raparperi), which is inspired by the rhubarb plants that grow near sauna buildings in Finland. She also designed the steam flower (Höyrykukka) and the bar stripe (Pötkö), both of which can be found on the Bastua water bottles.

Designer Sami Ruotsalainen made the woodcarving print (Puuleikkaus), which took its inspiration from the curves of the log walls in traditional sauna cabins. This woodcarving print was used as the pattern for the Bastua towels.

“The IKEA and Marimekko collaboration was a meeting of minds between the creative teams from both brands. More than just both being from the Nordic region, IKEA and Marimekko share the same ideals of making great design accessible for the many people,” Patrick Marcelo, IKEA Philippines Marketing and PR manager, told BusinessWorld. ‘BASTU’ Finland is known as the birthplace of sauna. In 2020, the United Nations Educational, Scientific and Cultural Organization (UNESCO) included Finnish sauna culture in its Representative List of the Intangible Cultural Heritage of Humanity.

The word “sauna” is originally from the Finnish language and is now widely used in English to refer to the traditional bath and bathhouse. The Ikea x Marimekko collection’s name “Bastua” is taken from the Swedish word for sauna or “bastu.”

For Scandinavians, the sauna is a place to relax and spend time with family and friends. It’s not uncommon for houses and even company offices to have their own saunas.

“This (Bastua collection) is a particular pleasure for me since it reminds me of my childhood, Ikea furniture, Marimekko dresses and sauna,” Sweden Ambassador to the Philippines Annika Thunborg said during the launch event in IKEA Philippines on Thursday.

Ms. Thunborg recalled how she used to spend Sundays in a sauna at home with her family. “And when you can’t stand the heat (in the sauna), you take a cold shower, take a roll in the snow or take a dip in the hole in the icy lake. It’s very relaxing and reenergizing,” she said.

“I am glad we can bring a small piece of this rather exotic Nordic culture to the Philippines through the collaboration of two great Nordic companies — Marimekko and IKEA”” SELF-CARE According to IKEA’s Life at Home Report, Filipinos are concerned about their health and well-being, as well as housing. The survey also showed 79% of Filipinos are prioritizing taking care of themselves, physically and emotionally.

“We believe that self-care is for everyone. The (Bastua) collection, although born from the idea of the sauna culture, is all about the little things we do to take care of ourselves, whoever you are and whatever you do to take care of yourself. Not just in the sauna,” Mr. Marcelo said.

Most of the items in the Bastua collection can be used whether you are going to a sauna or just at relaxing at home, such as the bath towels (P990), a candle (P490), trays (P590), a shower curtain (P590), water bottles (P690), and a glass jug (P1,090).

The kimono robe (P1,590) comes in two patterns — the giant rhubarb leaf and black stripes — and is available in two sizes (small/medium and large/extra-large).

The long sauna towel (P790) can also double as a table runner, while the smaller one can be used as a tea towel.

The oversized floor cushion with its eye-catching red and green print would add a pop of color in any living area, while the LED lantern will give a soothing glow to the bedroom. The collection also includes two round trays that perfectly fit the top of the Bastua side table.

The most expensive items in the collection are the wooden bench (P3,990), while the most affordable one is the pink and red striped shopping bag (P90).

However, it seems the most in-demand items are the redesigned Frakta bags in the Bastua prints (P190). The spacious carrier bags were already out of stock at the IKEA Philippines physical store by Thursday afternoon, the same day the Bastua collection was launched. It is also no longer available on the Ikea Philippines online store.

The collection also features IKEA’s first-ever sauna bucket with a ladle (P1,590).

In Nordic countries, it is essential to have a bucket and ladle when going to a sauna. The sauna bucket is filled with water that would create steam during bathing, while the ladle is used to splash water on the sauna rocks.

Some Filipinos may scratch their head at how they can incorporate the sauna bucket in their everyday life, but Mr. Marcelo noted that buckets are a “huge part of Filipino bathing, not just in the sauna.”

Asked if there will be another IKEA and Marimekko collaboration, Mr. Marcelo said: “At IKEA, we always find ways to offer new things to our customers and we love collaborating with brands who have the same ideals as ours. Aside from the collaboration with Marimekko, we also have other new limited collections coming soon, including the ÖMSESIDIG collection — a collaboration with nine Latin American creatives coming in April.”

‘This wants to be driven’

March 13, 2023 | 12:05 am

Jaguar Land Rover President Chris Ward with the third-generation Range Rover Sport — PHOTO BY KAP MACEDA AGUILA

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All-new Range Rover Sport is unveiled, priced from P13.49 million

WHILE THERE is a myriad of good stuff about the third-generation Range Rover Sport, there are two key takeaways that Land Rover wants you to remember: It is a vehicle meant to be driven and, much like its bigger brother Range Rover, it boasts “reductive design.”

All the while, of course, it is said to breathe the same 4×4 ethos that Land Rover has been espousing since 1948. This “breadth of capability,” is a common thread that runs across the model range.

This concept is what the company leads off with as it proffers an impressive video of the stunt driver Jessica Hawkins, who braves the spillway of the Kárahnjúkar Dam in Eastern Iceland aboard the Range Rover Sport. After reckoning a “safe” water level at the spillway, Ms. Hawkins coaxes the vehicle into the onrushing flow and finds a way out of the steep embankment.

We get the point: The Range Rover Sport is up for any challenge, and it’s a driver’s car. “What you need to understand,” asserted Jaguar Land Rover (JLR) Philippines President Chris Ward in an interview with this writer, “is that this is our most dynamic Range Rover.”

He continued, “It’s about on-road performance, and also about comfort and sustainability — since we now have our PHEV (plug-in hybrid electric vehicle) version. This is a Range Rover that people will prefer to drive than be driven in.” At launch, three variants of the 2023 Range Rover Sport were introduced: the SE D300 (priced at P13.99 million), the Dynamic SE D300 (P14.79 million), and Dynamic SE P400e (P13.49 million). All boast electrified powertrains. The D300s have mild-hybrid, straight-six-cylinder diesel power plants, while the P400e is (as its nomenclature suggests) a full-on plug-in hybrid with a gas engine. In 2024, a pure-electric Range Rover Sport is expected to take its place in the lineup.

Touted as most competent away from paved roads, the new Range Rover Sport gets the brand’s Intelligent All-Wheel Drive (iAWD) that “integrates with the latest all-terrain innovations and technologies to ensure its breadth of dynamic capability.” An optional Adaptive Off-Road Cruise Control, the most recent version of the All-Terrain Progress Control, lets the driver set the desired speed and comfort level, “from a choice of four settings, over rough surfaces.” It has the honor of being the first Land Rover to feature this capability.

Meanwhile, Terrain Response 2 “automatically detects the surface and terrain to adapt the chassis to best deal with the situation, prompting and informing the driver via the Pivi Pro touchscreen. It works in harmony with the comprehensive chassis systems to make the most effective progress off-road.”

Continued Mr. Ward in a release, “It is truly the most desirable, advanced and dynamically capable yet. Its design sophistication: having Land Rover’s pioneering flexible MLA architecture delivers the highest levels of dynamism and most powerful performance we have ever seen on Range Rover Sport. MLA Flex Architecture allows the flexibility to manage all powertrains (ICE, PHEV, and BEV) across the life of the vehicle as we transition into a new era of EV motoring.”

With regard to the aforementioned “reductive” design, the Range Rover Sport takes a page from its bigger sibling’s playbook. “We’ve followed the philosophy of the Range Rover,” maintained Mr. Ward. “We’ve cleaned up the body lines; there’s less of them. There’s less clutter in terms of the external styling… we’ve done away with some of the embellishments. The doors have no tops or rubber; they’re flush up to the glass.” The effect is a taut exterior with minute gaps between panels.

A sculpted tailgate with a “full-width feature” bears the Range Rover script, while “uninterrupted LED light graphics introduce surface LED technology to a production vehicle for the first time, providing a crisp and contemporary look at night that is vivid and consistent when viewed from any angle.” The Range Rover Sport’s spoiler is the longest ever fitted onto a Range Rover.

The clean lines, accentuated by flush glazing and door handles, plus a hidden waist rail finisher, also contribute to a lower drag coefficient of 0.29.

“It’s on the same inside — less is more,” added the executive. “There’s a big screen without lots of buttons.” A high, sloping center console and the use of premium materials contribute to a luxurious cabin — as do integrated audio speakers, developed with Meridian, which are unobtrusive.

Exclusively put together at the Solihull Manufacturing Facility in the UK alongside its bigger version, the Range Rover Sport is said to benefit from “a state-of-the-art production line housed in the same building used to produce early series Land Rovers.” The historic location has been recast as a new, ultra-modern center for Range Rover production.

Mr. Ward was quick to clarify his statement about the Range Rover Sport as a car to be driven. “Don’t get me wrong,” he said. “This is also beautiful car to ride in as a passenger — whether you’re going down EDSA or up the road going to Tanay. This is seriously capable.” — Kap Maceda Aguila