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Natural Gas: The necessary step to a decarbonized future

The United Nations calls climate change “the defining issue of our time.” In worst-case scenarios, the consequences of climate change range from shifting weather patterns that would decimate global food production, to rising sea levels that would increase the risk of catastrophic flooding that would literally reshape the world we live in.

Without coordinated drastic action, adapting to these impacts in the future will be both difficult and costly. Scientific research from the UN Intergovernmental Panel on Climate Change (IPCC) concluded that limiting global warming to 1.5°C would require “rapid and far-reaching” transitions in land, energy, industry, buildings, transport, and cities.

Essentially, the net human-caused emissions of carbon dioxide (CO2) would need to fall by about 45% from 2010 levels by 2030, reaching ‘net zero’ around 2050. This is why we need to reduce the carbon intensity of emissions, which is a process known as decarbonization.

Yet, as more developing countries grow, the demand for energy will keep rising. The question is, how can countries like the Philippines continue to prosper without also increasing their reliance on emissions-heavy energy sources like coal and oil? While many will be quick to mention a swift transition to renewable energy (RE), the reality is far more complicated.

“The energy transition is critical to achieving carbon neutrality by 2050 as indicated in the Paris Agreement. According to the Global Carbon Budget report in 2020, our carbon budget to limit temperature increase to less than 1.5 degree Celsius can be used up in less than 10 years,” Francis Giles B. Puno, president and chief operating officer of First Gen Corporation, one of the country’s leading providers of clean and renewable power, said.

“If we go too fast in transition, we will be saddled by unreliable and expensive electricity, which will do untold damage to the economy. If we go too slow, we will be unable to mitigate effectively the effects of climate change, and the damage to the economy will also be devastating as we have seen with the calamities due to extreme weather conditions that have hit the Philippines more frequently in recent years. It is critical that we get this transition right,” he added.

The Philippines is fortunate to have great potential for RE, being rich in geothermal, hydro, and solar energy sources. Yet, to best optimize their use, there remain significant steps that need to be made in order to transition from being powered by fossil fuels to RE.

“There are a lot of factors that need to be considered for the energy transition. This may take time due to the intermittency of renewable energy sources and early stages of development of storage technologies. Recent developments show that we are going in the right direction. The implementation of the coal moratorium, ongoing efforts to craft legislation for natural gas, electric vehicles, green energy auctions, among others will help accelerate the transition,” Mr. Puno said.

While the technology for renewable energy continues to develop, there is a need for a transitory solution that would help wean the country from traditional fuels towards solutions with lower carbon emissions. Natural gas will make that transition smoother.

“Natural gas is a bridge fuel that can provide power when intermittent RE sources, like solar and wind, become unavailable. Because natural gas is flexible, it can quickly provide power at night, or on a cloudy day, or when wind speed is not sufficient, as natural gas plants can start up and provide power in as fast as 15 minutes or even less. At a time when storage technologies are still very expensive and scarce, natural gas fills the crucial role of providing affordable complementary power to these intermittent sources,” Mr. Puno said.

“Moreover, natural gas is clean — unlike alternatives like coal — which would also be hard pressed to be able to provide the same function. In short, natural gas will ensure that we keep the lights on while we undergo this transition,” he added.

First Gen Corporation owns and operates 30 power projects across the country with 3,495.2 MW of installed capacity, as of 2020. Its portfolio consists of renewable energy sources such as geothermal, hydroelectric, wind, solar. These renewables are complemented with flexible natural gas, forming a reliable and clean energy portfolio. In 2020, First Gen’s natural gas plants generated over 11,500 gigawatt hours (GWh) of electricity, which helped avoid almost 7 million tons of carbon dioxide emissions, equivalent to removing about 1.5 million vehicles off the road.

The company has four natural gas-fired plants, which are in the First Gen Clean Energy Complex (FGCEC) in Batangas City, with a combined installed capacity of over 2,000 MW.

Moreover, First Gen Corporation ensures that its natural gas assets are operated responsibly and efficiently, with insignificant amounts of fugitive emissions released into the atmosphere. First Gen employs significant efforts to monitor and minimize emissions of harmful substances to way below than allowable levels.

With the urgency of the issue of climate change, there is a pressing need to take action and move the country towards a decarbonized and regenerative energy system. The benefits of natural gas make it the clear next step towards achieving this goal, and First Gen is committed to leading this transformation by meeting the needs of the energy market with competitive, efficient, and environment-friendly energy and power generation assets with the least impact to the environment.

“Natural gas will serve as a transition fuel to the installation of more renewable energy. The fast ramp-up capability of natural gas plants can address the intermittency of renewables and increase their share in total power generation. Natural gas provides a way to increase the share of renewables without having to worry about losing electricity supply when the sun or wind are not available. Equally important, it enables consumers to have an affordable and clean source of complementary power to solar, wind, and other intermittent RE,” Mr. Puno said.

“It is undeniable that the future will be dominated by RE and other non-carbon power technologies, in fact we support the ambition that eventually the Philippines will be totally dependent on zero-carbon power sources. Similar to the rest of the world, we see that natural gas will play a critical role — as we also continue to find options of decarbonizing this fuel source — towards a truly decarbonized and regenerative future,” he added.

First Gen Corporation is the leader in clean and low-carbon power in the Philippines. It has the largest portfolio of clean energy, making it well-positioned to lead the country towards a decarbonized energy future. Learn more about First Gen’s services by visiting www.firstgen.com.ph.

 

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BSP keeps rates to boost recovery

By Luz Wendy T. Noble, Reporter

THE PHILIPPINE central bank on Thursday kept policy rates unchanged as expected, saying an accommodative stance is key to economic growth that has gained solid traction.

Monetary officials also warned about risks to inflation next year, including typhoons and fare increases.

The Bangko Sentral ng Pilipinas (BSP) left the key rate steady at 2%, as predicted by all 20 economists in a BusinessWorld poll last week. It also kept the overnight deposit and lending rates at historic lows of 1.5% and 2.5%.

“The Monetary Board maintains that keeping a patient hand on the BSP’s policy levers, along with appropriate fiscal and health interventions, will keep the economic recovery more sustainable over the next few quarters,” central bank Governor Benjamin E. Diokno told a news briefing on Boracay Island in central Philippines.

This was the first time journalists were allowed to cover the BSP briefing on the policy meeting physically since the main island of Luzon was locked down in mid-March last year to contain a coronavirus pandemic.

“Economic growth appears to be gaining solid traction, driven by improved mobility and sentiment amid the calibrated relaxation of quarantine protocols and continued progress in the government’s vaccination program,” Mr. Di-okno said.

“Nevertheless, the Monetary Board noted that sustained measures to safeguard public health and welfare remain crucial to facilitate the recovery in investment and employment,” he added.

Aside from typhoons and fare increases, the central bank chief also cited the price risks from a prolonged recovery of domestic pork supply.

The central bank’s decision comes a week after the government released data that showed the economy grew by 7.1% in July to September from a year earlier. Economic growth was 3.8% quarter on quarter.

Economic output shrank by 9.6% last year, one of the worst in Asia and the Philippines’ deepest recession since World War II.

“It’s necessary that you continue policy support and not withdraw this fully until there is very strong evidence of aggregate demand being sufficient,” central bank Deputy Governor Francisco G. Dakila, Jr. told the same briefing.

He added that the BSP has been coordinating with fiscal authorities about monetary policy eventually normalizing because it could affect the government’s pandemic response.

The Philippine economy remains far from its pre-pandemic level, said Alex Holmes, an economist at Capital Economics. He added that last quarter’s growth had come from a low base.

“While growth for the year will probably now eclipse the government’s earlier estimate of 4-5%, the economy will still enter 2022 with huge amounts of spare capacity,” he said in a note. He expects the central bank to keep rates steady for the rest of the year.

Mr. Dakila said the BSP had lowered its average inflation forecast for the year to 4.3% from 4.4% at the previous policy review. Inflation in the first 10 months of 2021 was 4.5%.

Consumer prices are expected to rise by 3.3% and 3.2% in 2022 and 2023, unchanged from the previous forecast.

Mr. Dakila said their updated estimates had considered rising global oil prices and strong third-quarter GDP data.

These had been tempered by slower inflation in September and October, he said, adding that it was possible for November inflation to be within the target.

Headline inflation last month slowed to 4.6% from 4.9% in September amid a slower increase in food prices. Inflation was still above the central bank’s 2-4% target.

Slower inflation in the past months had given the BSP “some breathing room” to keep an accommodative stance in the meantime, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said.

“However, a surprise pickup in economic growth opens the door for possible adjustments down the road,” he said in a note. The BSP’s first rate increase could happen by the second quarter of next year, he added.

The Monetary Board will hold its final policy rate review this year on Dec. 16. Mr. Diokno earlier hinted that he did not see the need to adjust policy settings for the rest of the year.

Senate’s budget debates delayed on COVID scare

By Alyssa Nicole O. Tan and Jenina P. Ibañez, Senior Reporter

SENATE DEBATES on next year’s budget would probably get delayed after some senators and their staff were exposed to the coronavirus by a Cabinet official who tested positive.

“Yes, indeed, there will be a delay,” Senate President Vicente C. Sotto III told reporters in a Zoom Meetings video conference on Thursday. “We will just have to work double-time.”

Senators ended the session at 11:30 p.m. on Wednesday after learning that Defense Secretary Delfin N. Lorenzana, who went to the Senate the day earlier, had tested positive for the coronavirus.

Lawmakers who were exposed to the Defense chief immediately left the plenary as a precautionary measure. The Senate building was immediately disinfected.

A photo provided by Senator Emmanuel Joel J. Villanueva showed Mr. Lorenzana shaking his hand, while Senators Juan Miguel F. Zubiri, Maria Lourdes Nancy S. Binay and Francis N. Tolentino were nearby.

Senator Ronald M. dela Rosa, defended the Defense agency’s proposed budget, was seated in front of Mr. Lorenzana.

Mr. Sotto said a four-day delay was not too bad since the chamber was considering to approve the appropriation bill by the first week of December. “So, it will become the second week of December.”

Congress will take a month-long holiday break starting Dec. 18.

Senators had wanted to finish interpellations this week so they could propose changes by next week. The Senate president said they would try to finish debates by Monday.

“Because of what happened, we will have to try on Monday to finish everything until the wee hours of the morning on Tuesday,” he said. Sessions would be extended up to Friday if debates could not be finished in a day.

Senators still have to discuss the budgets of the Social Welfare, Transportation, Trade, Education and Public Works departments, as well as appropriations for the Presidential Communications Operations Office and Philippine Association of State Universities and Colleges.

Mr. Sotto ruled out a reenacted budget, saying they still have time even for a bicameral committee session.

Senators and congressmen could fast-track agreement on the budget measure as long as the bicameral meeting “does not drag on,” he added.

In an advisory, Mr. Sotto said that all visitors entering Senate premises must present a negative coronavirus test result that will be valid for 24 hours, a medical certificate showing that they do not have symptoms, and a COVID-19 vaccination card.

“We have decided to increase our protocols by requiring all visitors for the Budget deliberation to present a 24-hour RT-PCR report instead of a 72-hour result,” Mr. Zubiri told reporters in a Viber group message. Mr. Lorenzana presented a 72-hour result but he got exposed after that, he added.

The Senate majority leader said the Senate has informed people who were in contact with the Defense chief so they can self-quarantine.

“Unfortunately, the day that the secretary was here was a day of an unusual number of senators present in session as we had an official delegation from the Hungarian Parliament present as well,” he said.

Meanwhile, government agencies’ cash use rate had gone up to 91% in the 10 months to October, according to data from the Department of Budget and Management.

The National Government, local governments and state-owned companies used P3.05 trillion of P3.35 trillion worth of notices of cash allocation issued to them during the period.

The rate was better than 77% a year earlier, while it was 95% as of end-September. The notices of cash allocations are given to agencies to let them withdraw funds from the Treasury to cover their spending needs.

The quick disbursement and use of the budget is typical leading up to the national elections, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

“In some election cycles the increased contribution of these government activities outweighs or perhaps is mirrored in household consumption, suggesting that administrations and politicians on every level are busy attempting to complete as many projects ahead of the polls,” he said.

Government spending on infrastructure had been one of the key economic drivers since the start of the pandemic last year, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.

Projects could be fast-tracked before the election ban on some public works next year, he said in a Viber message.

“Infrastructure would be one of the major pillars for the country’s economic recovery program from COVID as funds are already available to further pump-prime or stimulate the economy to improve economic recovery pro-spects,” he said.

A public works ban will be in effect on March 25 to May 8, 2022 before the elections, according to the Commission on Elections.

The Budget department said line agencies had used 88% or P2.09 trillion of their notices of cash allocations from January to October, leaving P289.9 billion unused.

The Commission on Audit had the highest use rate among these departments at 99%, while the Joint Legislative-Executive Councils used as much as 88%. The Civil Service Commission and Interior and Local Government depart-ment had 97% each.

Budget support for government-owned and -controlled corporations reached 96% usage, while the allotment to local government units had been fully used.

The House Committee on Appropriations on Wednesday night endorsed to the plenary a bill that would extend the validity of funds under this year’s national budget. House Bill 10373 will extend all appropriations until Dec. 31, 2022.

Completion, inspection, and payment of infrastructure projects and maintenance and operating expenses should also be finished by then.

The House approved the proposed P5.024-trillion budget for next year on third and final reading as early as Sept. 30.

President Rodrigo R. Duterte had approved legislation that extended the validity of the 2019 and 2020 national budgets.

The Philippine economy grew by 7.1% year on year in the third quarter, lower than the revised 12% growth in the second quarter, after fresh lockdowns were imposed in Metro Manila to contain a more contagious Delta coro-navirus variant. — with RLCK

Gov’t, private spending may bolster 2022 GDP growth

By Jenina P. Ibañez, Senior Reporter

THE PHILIPPINE ECONOMY could grow by 7.1% next year amid stronger private consumption and government infrastructure spending, according to IHS Markit.

In a report, the London-based market intelligence provider on Thursday said easing coronavirus restrictions would support an economic rebound this quarter.

“Despite the recent COVID-19 Delta wave, the Philippine economy has shown considerable resilience during the third quarter of 2021,” it said.

The economy grew by 7.1% in the third quarter, faster than the 4.7% median estimate by economists in a BusinessWorld poll.

This was slower than the revised 12% growth in the second quarter, as the government placed Metro Manila under a strict lockdown for two weeks in August to curb a Delta-driven surge in infections.

IHS Markit said it expects the economy to grow by 5% year on year in 2021, which will be at the higher end of the government’s reduced 4-5% target. The state expects economic output to grow by 7-9% next year.

The government vaccine rollout was still constrained by low supply, making economic recovery vulnerable to renewed outbreaks, it said.

But the 2022 outlook is positive amid stronger private consumption, higher government infrastructure spending and improving remittance inflows, it said.

IHS Markit said its October manufacturing survey indicated increasing business confidence among manufacturing companies.

“Optimism was underpinned by hopes of greater international and domestic demand in the year ahead,” the information provider said.

IHS Markit earlier said the country’s manufacturing activity inched up to a seven-month high in October as orders stabilized due to easing lockdowns in Manila, the capital and nearby cities.

The Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 51 last month from 50.9 in September. A reading above 50 indicates improving conditions for the manufacturing sector versus the previous month, and below the threshold means the opposite.

The gradual reopening of domestic and international tourism, IHS Markit said, would help support the economy.

Tourism’s share in the gross domestic product (GDP) fell to 5.4% in 2020 from 12.8% a year earlier, government data showed.

“Due to the importance of domestic tourism in the overall contribution of tourism to GDP, the recovery of domestic tourism could be a significant growth driver in 2022,” IHS Markit said.

Meanwhile, remittance inflows to the Philippines could grow by 3.8% this year as it recovers from a decline last year, the World Bank said.

In a report, the multilateral lender said the Philippines has been the fourth-biggest recipient of remittances this year, after India, China and Mexico.

World Bank estimates that remittances received by the Philippines will reach $36 billion this year. At the top of the list is India with $87 billion, followed by China and Mexico with $53 billion each.

Inflows to the Philippines this year are expected to reverse a 0.7% decline last year, according to the World Bank report released on Wednesday.

The United States remained the primary source of remittances for the Philippines at almost 40% last year, it said.

Remittance flows from the United States remained resilient, growing by 7% in the first eight months this year from a year earlier, it added.

Remittance fees in the Philippines were among the lowest in East Asia and the Pacific. The average cost of sending $200 in remittances to the region fell slightly to 6.7% in the first quarter, compared with 6.9% in the fourth quarter of last year.

For the first quarter of 2021, the five lowest-cost corridors in the region averaged 2.7%, with transfers primarily to the Philippines.

The five lowest-cost corridors included remittances sent from Singapore to Indonesia, along with remittances transferred from Singapore, Saudi Arabia, Kuwait and United Arab Emirates to the Philippines.

Data released by the Bangko Sentral ng Pilipinas on Monday showed that money sent home by migrant Filipino workers grew for the eighth straight month in September, with cash remittances increasing by 5.2% year on year to $2.737 billion from a year earlier.

Nine-month cash remittance inflows went up by 5.6% to $21.117 billion. Personal remittances, which include inflows in kind, have risen by 5.7% to $25.699 billion as of end-September.

Remittances to low- and middle-income countries are projected to grow by 7.3% to $589 billion this year, the World Bank said, attributing the growth to migrants supporting their families during the crisis and the economic re-covery in Europe and the US.

“Remittance flows from migrants have greatly complemented government cash transfer programs to support families suffering economic hardships during the COVID-19 crisis,” Michal Rutkowski, World Bank global director for Social Protection and Jobs, said in a statement.

“Facilitating the flow of remittances to provide relief to strained household budgets should be a key component of government policies to support a global recovery from the pandemic,” he added.

Domestic ore processing seen boosting mining share of GDP

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A BILL seeking to require the domestic processing of some ore mined in the Philippines holds the potential to “double or triple” the mining industry’s contribution to gross domestic product (GDP), the Mines and Geosciences Bu-reau (MGB) said.

Juancho Pablo S. Calvez, MGB Metallurgical Technology Division chief, said during on the first day of the MGB virtual stakeholder forum Thursday that the bill, which would limit the export of some ore in order to jump-start a domestic-processing industry, would lead to the capture of more value-added than exporting ore 100%.

“How much can it contribute to the country’s gross domestic product (GDP)? Maybe it will double or triple the (mining contribution to) GDP if we push for (the) processing of our own raw ores,” Mr. Calvez said.

On July 5, South Cotabato 1st District Rep. Shirlyn L. Bañas-Nograles filed House Bill No. 9775, or the proposed Promotion of Mineral Processing and Value-Adding Act, which reduces exports of nickel ore and other raw metallic ores and encourages mineral processing within the country.

“This bill proposes gradual/partial restriction of export of these direct shipping ores as its mechanism to start and drive the mining industry to compel into mineral processing, value-adding, and establishing downstream indus-tries…,” Ms. Bañas-Nograles said in the bill’s explanatory note.

The bill is currently pending at the House Committee on Natural Resources.

“This (bill) encourages the processing of raw ores into value-added products rather than exporting them as unprocessed raw direct shipping ores,” Mr. Calvez said, noting that there are currently two domestic mineral processing plants capable to handling low-grade nickel.

The plants are operated by Coral Bay Nickel Corp. in Palawan and Taganito HPAL Nickel Corp. in Surigao del Sur.

He said that under the bill, mining firms that do not have processing plants can enter into contracts with processors or form consortiums to establish joint processing facilities.

The bill will allow miners five years to establish their processing plants.

Mr. Calvez said he does not expect the bill to pass during the current Congress, but might do so in the next Congress.

“We proposed the bill on partial restriction just a few months ago. I think the bill will not be passed during this Congress,” Mr. Calvez said.

According to the MGB, the value of Philippine metallic mineral output rose 25% year on year to P68.63 billion during the first half.

Nickel and its products accounted for 53.44% or P36.68 billion, followed by gold with 34.84% or P23.91 billion, and copper 10.87% or P7.46 billion. The remainder consisted of silver, iron ore, and chromite, worth a combined P584.75 million.

In June, the MGB said the mining sector accounted for 0.6% or P102.3 billion of GDP in 2020. — Revin Mikhael D. Ochave

PAL losses since bankruptcy filing reach P2.89B

FLAG carrier Philippine Airlines (PAL) ended October, two months since its Chapter 11 filing on Sept. 3, with a loss of $27.87 million, or P1.40 billion, resulting in a cumulative loss of $57.42 million, or P2.89 billion.

The airline’s end-October report to the United States Bankruptcy Court for the Southern District of New York, as signed by PAL Chief Financial Officer Nilo Thaddeus P. Rodriguez, showed it had a gross income of $122.95 million for the month.

However, cost of goods sold reached $119.32 million, resulting in a gross profit of $3.63 million.

PAL reported $6.07 million in selling expenses, $6.69 million in general and administrative expenses, and $1.91 million in other expenses.

PAL filed its October operating report on Nov. 15, according to a copy of the document from the airline’s claims agent Kurtzman Carson Consultants LLC.

To recall, PAL ended September with a loss of $29.56 million, or P1.5 billion. It had a gross income of $91.75 million for the month.

The airline said the cost of goods sold from Sept. 3 to 30 reached $90.42 million, resulting in a gross profit of $1.33 million.

The US Bankruptcy Court for the Southern District of New York is expected to decide next month on either to approve or reject the reorganization plan of PAL.

The deadline for filing objections to the plan is Dec. 10, while the confirmation of the plan hearing will commence on Dec. 17.

PAL hopes to exit the Chapter 11 process before the end of the year.

PAL also expects to exit the recovery phase by the end of 2022, as operating activities “generate more consistent positive monthly cash flow,” it said.

It anticipates to generate an operating income of $220 million in 2022 and $364 million in 2023.

PAL Holdings, Inc. (not included in the Chapter 11 filing) had said that billionaire Lucio C. Tan’s private firm Buona Sorte Holdings, Inc. (BSHI) would inject “fresh and additional capital” amounting to P12.75 billion ($255 million) into the listed parent company of PAL.

BSHI would also provide a five-year loan of $250 million to PAL.

For the nine months to September, PAL Holdings’ attributable net loss was reduced to P21.83 billion from a loss of P28.85 billion last year. Gross revenue went down by 29% to P32.16 billion from P45.29 billion previously. — Arjay L. Balinbin

Bank lending to get boost from reopening, vaccination progress

PROGRESS in the country’s vaccination drive and the gradual reopening of the economy are expected to help boost confidence and spur lending, a central bank official said.

Bangko Sentral ng Pilipinas (BSP) Department of Economic Research Senior Director Zeno R. Abenoja said bank lending rebounded after several months of decline following “the gradual easing of restrictions on the econ-omy, the increase in confidence as the government continue to provide programs and policies to support the economic recovery.”

“With the advancement in the vaccination program, we hope to see greater momentum in terms of bank lending not only to the production sector, but also the household or the consumer loan sector,” Mr. Abenoja said at a virtual BSP media forum on Thursday.

Outstanding loans disbursed by big banks rose by 2.7% year on year in September, marking the second straight month of loan growth.

Despite record low interest rates, lending contracted for eight straight months since December due to risk aversion among lenders and borrowers amid the crisis.

The government aims to vaccinate 70 million Filipinos against the coronavirus by the end of this year. Data from the Johns Hopkins University showed the Philippines has already fully vaccinated 39.4 million or 36.5% of its popu-lation.

Retail borrowings may recover once employment conditions get better, although this may take some time as economic rebound is not yet solid enough, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said.

“As the job market improves and the economy recovers, we can see retail loans move back into black with loans for autos and housing return while salary loans may fade as employees can secure their incomes on time,” Mr. Mapa said in an e-mail.

The unemployment rate increased to 8.9% in September, equivalent to 4.21 million Filipinos. This is the highest this year, matching the 8.9% jobless rate in February. — L.W.T. Noble

Infrastructure CEOs say next gov’t must plan long term, fix delays

THE next government will need to address right-of-way issues, slow permit approvals for infrastructure projects, and prepare long-term plans looking as far ahead as 30 years, industry leaders said Thursday.

“We only have what they call the intermediate or mid-term development plan. It’s only for one six-year term of one administration,” D.M. Consunji, Inc. President and Chief Executive Officer (CEO) Jorge A. Consunji said at a virtual forum organized by the Spanish Chamber of Commerce in the Philippines.

He said business groups have been pushing for the government to approve a 30-year national development plan.

The plan will require “each administration — and hopefully… local government units… to follow a major backbone, and probably you can attach branches to that backbone so you don’t have to keep changing priorities,” Mr. Consunji said.

The House Committee on Public Works and Highways approved in August a substitute bill that seeks to adopt a 30-year national infrastructure plan. It covers major national infrastructure projects in transport, energy, water resources, information and communications technology, and social infrastructure.

It will require the National Economic and Development Authority in coordination with oversight and implementing agencies to draft and implement the 30-year plan, divided into six five-year phases.

EEI Corp. President and CEO Roberto Jose L. Castillo said: “Unfortunately, the people who run our government, go (into) government for themselves and not for the people, and they have to learn this lesson.”

“We have to change. If Jorge says there should be a 30-year plan, do it, fund it and fix the right-of-way issues because these are a pain in the neck, and it seems that nobody wants to resolve them,” he added.

“Because contractors are there to carry the load, to carry the financial burden, they let us do it. It’s not fair. But I’m telling you, we’re not going to give up… because we need to feed our people. We need to keep them employed.”

Rodrigo E. Franco, president and CEO of Metro Pacific Tollways Corp. (MPTC), said the process for approving projects remains slow.

“Much as we would like to (see) more projects and much as we want to bring in more investors and more developers, a limiting factor is the speed of processing by the government,” he said.

“That needs to be addressed if we want more investments in the infrastructure sector,” he added.

Manila Water Co., Inc. President and CEO J.V. Emmanuel A. de Dios agreed that permitting delays are a major issue because “any new occupant of any office, whether national or local, would have to understand each sector in-depth sitting in the driver’s seat before things can move again.”

“Hopefully we don’t take too long,” he said.

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

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

Udenna defends Malampaya deal

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UDENNA Corp. defended on Thursday its acquisition of the controlling stake in the Malampaya deep-water gas-to-power project, saying similar transactions in the past never went through the same scrutiny nor were imposed the same requirements.

“The government approval was never obtained,” said Udenna President Raymundo Martin M. Escalona in a virtual media briefing to explain why the holding firm of Dennis A. Uy’s diverse investments is poised to become the big-gest shareholder in a vital asset for the country’s energy security.

Mr. Escalona was referring to previous arrangements in which ownership of the Malampaya project changed hands.

“Neither [has] PNOC-EC (Philippine National Oil Co. Exploration Corp.)… exercised their right to first refusal. They never tried to exercise their right to match,” he said, adding that prior government approval and other measures were “simply not necessary nor required.”

State-led PNOC-EC holds 10% of the offshore gas platform. Before the Udenna group’s entry, the local units of two foreign entities held a combined 90%.

In May this year, Shell Petroleum N.V said it had forged a deal with Udenna unit Malampaya Energy XP Pte. Ltd. for the sale of its 100% shareholding in Shell Philippines Exploration B.V. (SPEx), owner of a 45% operating interest in Service Contract 38, or SC 38, that covers the Malampaya gas field.

The deal — valued at a base consideration of $380 million plus additional payments of up to $80 million — is in line with group’s upstream portfolio transition, Shell Petroleum said. The transaction’s effective date started on Jan. 1, 2021.

Udenna unit UC38 LLC also holds 45% of SC 38. UC38 acquired its stake in March last year from Chevron Malampaya LLC.

“Both the Chevron and Shell transactions are private share sales conducted at parent company level with no change in the legal entities’ participating in SC 38 consortium nor any transfer of any rights or obligations,” Mr. Esca-lona said.

He said because of the nature of the deal, the Energy department’s approval is not required. He also said that the transactions followed “highly competitive bidding processes” and “rigorous due diligence.”

He also denied that the transactions were “sweetheart” deal from the government.

“This is certainly not the first time where share sale transfers are done,” Mr. Escalona said. “Prior to moving hands from Shell and Chevron, there were many share transfers in the past.”

Last month, the Philippine Competition Commission (PCC) said it was not notified of the deal between the Udenna and Shell groups. But the PCC said it “found no competition issue” in the Chevron deal.

Mr. Escalona’s defense of the two deals comes a day after Senator Sherwin T. Gatchalian on Wednesday once again described these as “lutong makaw” — referring to a fixed arrangement — “because we have rules and laws that govern this type of transaction.”

“And from the documents that I have seen, the rules were not followed, it was in fact bent towards approving this transaction and this is not in line [with] protecting the interest of the Filipino people,” Mr. Gatchalian said in his office’s transcript of his comments delivered in a forum.

The lawmaker, who chairs the Senate energy committee, described the deal as a “dangerous precedent because Malampaya is only one of its kind and it should be only run by highly qualified [people] in [a] very stable entity.”

Mr. Gatchalian in September said in a Senate hearing that the Malampaya project serves 3.7 million households and supplies 27% of Luzon’s power generation.

Also on Wednesday, the Department of Energy (DoE) came out with a statement on PNOC-EC move not to match the offer of the Chevron and Shell groups.

“Rather than being fixated on PNOC-EC’s decision… we must instead look at the bigger picture,” said DoE Assistant Secretary Gerardo D. Erguiza in a statement.

“There are crucial questions that are being overlooked, and we must not be remiss in asking them. These are: Why did Chevron sell their interest to begin with? Why did Shell choose not to match the offer of Udenna, and why did Shell decide to sell their shares as well,” Mr. Erguiza said.

He said there is double standard in calling Shell’s decision as “prudent” while that of PNOC-EC as “foolish.”

“For PNOC-EC to pounce on Chevron’s shares actually runs counter to their mandate. If acquiring the Chevron shares was so financially lucrative, then why didn’t Shell grab at them at the first opportunity,” Mr. Erguiza said. — Victor V. Saulon

Colliers sees property market recovery next year

PROFESSIONAL services and investment management firm Colliers said property market demand is likely to rise next year amid improving vaccination efforts, growing cash remittances, and expanding economic activities.

In a news release on Thursday, the company said it was “seeing green shoots of recovery in the property market and that demand is likely to start recovering in 2022 especially for office, residential, and retail segments.”

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno shared the same sentiments in his statement on Monday when he said “real estate and construction subsectors have started to recover in the second quarter amid the gradual easing of restrictions on mobility and economic activity after contracting throughout 2020 and the first quarter of 2021.”

As such, Mr. Diokno said the BSP “anticipates that activity in the real estate market will recover in line with rebound in overall economic growth in 2022.”

Colliers said demand for more office space is expected next year as the government ramps up its vaccination efforts against the coronavirus and eases pandemic restrictions, which will enable more workers to physically report to offices.

The recovery of major economies such as the US could also contribute to more demand from outsourcing firms, the company added.

Meanwhile, demand for residential spaces may also increase next year for the same reasons, and with overseas Filipino workers’ (OFWs) cash remittances continuous growth.

BSP data released on Monday showed that OFWs’ cash remittances rose for the eighth straight month in September by 5.2% to $2.74 billion from $2.60 billion in the same month last year, and by 4.9% month on month from $2.61 billion in August.

Colliers added that it expects retail space rentals and purchases to experience a slow growth in the fourth quarter of 2021, which will be sustained until 2022, with increased spending and eased pandemic restrictions during the Christmas season.

“Malls across Metro Manila are seeing an improvement in consumer traffic, with some mall operators saying that foot traffic is now about 50% to 80% of pre-pandemic levels,” the company said. — Bianca Angelica D. Añago

BSP should collect more data from other financial institutions, IMF says

A participant stands near a logo of the International Monetary Fund at the annual meeting in Nusa Dua, Bali, Indonesia, Oct. 12, 2018. — REUTERS/JOHANNES P. CHRISTO/FILE PHOTO

THE International Monetary Fund (IMF) recommended that the central bank should widen the scope of data collected from nonbank institutions to improve its monitoring of the financial system.

“The compilation of financial soundness indicators (FSI) for other financial corporations (OFCs) — with more than P9 trillion in total assets, representing around 25% of total financial system assets — will support macropruden-tial analysis,” the IMF said in its technical assistance report published on Nov. 17.

The technical assistance mission was done from April 30 to May 14. This was the first that focused on FSIs of OFCs.

Nonbank financial institutions include public and private insurance companies, trusts, government financial institutions, holding companies, mutual funds (money market and non-money market), private pension funds, and other intermediaries and auxiliaries.

The IMF said the global financial crisis has shown the need to widen financial sector data to boost surveillance of the financial system.

For money market funds, the IMF recommended the Bangko Sentral ng Pilipinas (BSP) to compile data on sectoral distribution of investments and maturity distribution of investments. It, however, noted this could be given less priority given money market funds are only about 1% of the total financial system.

The BSP was also encouraged to have one of its units track private pension funds and start collecting data on the largest relevant funds for the compilation of FSIs.

A hands-on training was provided for BSP’s data compilers on information about OFCs, the IMF said. — L.W.T. Noble

A hybrid 2021 QCinema film fest

Arthur Harari’s Onoda: 10,000 Nights in the Jungle

WHETHER one misses the experience of watching films on the big screen, or still prefers to enjoy movies through streaming, the QCinema International Film Festival offers both options to moviegoers.

Now on its 9th year, the QCinema International Film Festival returns with a hybrid edition from Nov. 26 to Dec. 5, with theatrical screenings at Gateway Cineplex 10 and online streaming via KTX.ph.

“We’re starting modestly because before we used to have many cinemas all over NCR (National Capital Region), but baby steps now —  we’re just limiting it on in Gateway and KTX,” Ed Lejano, QCinema festival director, said at an online press launch on Nov. 16.

“As late as October, we weren’t sure exactly how to do QCinema this year, even if we had a lineup on films. We had to negotiate for the rights months before. [Then] there was… the announcement for the reopening of theaters in mid-October so that’s when we had the [final answer] that we can go theatrical,” Mr. Lejano said about the decision to pursue a hybrid format for the festival.

“We understand how hesitant some people are still [about] going back to the theaters. But there are protocols in place that will help us make the movie watching experience safe and still enjoyable,” he added.

THEATRICAL SCREENINGS

The 10-day festival officially opens with the theatrical screening of Apichatpong Weerasethakul’s first English language film, Memoria — the Cannes Festival 2021 Jury Prize winner and Colombian entry to the 94th Academy Awards. It stars Tilda Swinton who plays a Scottish woman who begins to hear strange sounds while traveling through the forests of Columbia. The film makes its Southeast Asian premiere with QCinema 2021.

Also screening at the Gateway Cineplex 10 are the films under the Screen International, RainbowQC, New Horizons, and Special Screenings sections.

The films in the Screen International section are Joachim Trier’s The Worst Person in the World, Lorenzo Vigas’ The Box (which won the Venice Film Festival 2021 Leoncino d’Oro Agiscuola award), Audrey Diwan’s Happening (Venice Film Festival 2021 Golden Lion winner), Vengeance is Mine, All Others Pay Cash, by Indonesian auteur Edwin (Locarno International Film Festival 2021 Golden Leopard winner); and Ryūsuke Hamaguchi’s two films, Wheel of Fortune and Fantasy  (which won the Silver Bear award at the Berlinale 2021) and Drive My Car (which won Best Screenplay at the Cannes Film Festival 2021).

QCinema will also screen the Cannes Film Festival 2021 Un Certain Regard Jury Prize winner, Great Freedom by Sebastian Meise under the RainbowQC section; and the Cannes Un Certain Regard Originality award winner Lamb by Valdimar Jóhannsson, under New Horizons section. Meanwhile, films under the Special Screenings section are Arthur Harari’s Onoda: 10,000 Nights in the Jungle and Lav Diaz’s Historya ni Ha.

Onoda: 10,000 Nights in the Jungle is the true story of a Japanese soldier who spent 30 years hiding in the Philippine jungle unaware that World War II was over. The film opened the Un Certain Regard of the Cannes Film Festival in 2021. Filipino actress Angeli Bayani is part of this film. Meanwhile, Historya ni Ha, which stars John Lloyd Cruz, makes its Asian premiere in QCinema. The story follows a heartbroken puppeteer who travels home to a remote island with a sex worker, a nun, and a teenage boy. It had its world premiere at the 65th BFI London Film Festival in the United Kingdom.

Aside from these films, QCinema will also screen select Patrick Alcedo films for free. These are the A Will to Dream, and the short films They Call Me Dax and Am I Being Selfish.

KTX ONLINE STREAMING

The festival is also presenting an online lineup for this year’s film festival.

Under the Screen International section are the coming-of-age-story My Salinger Year by Philippine Falardeau, The Great Movement by Kiro Russo  (Venice Horizon Awards 2021 Special Jury Prize winner), and Miracle by Bogdan George Apetri (Warsaw International Film Festival 2021 Best Film).

In the New Horizons section are Apples by Christos Nikou (Chicago International Film Festival 2020 Best Screenplay winner), Magnetic Beats by Vincent Maël Cardona (Director’s Fortnight of the Cannes Film Festival 2021 SACD Award winner), El Planeta by Amalia Ulman (Buenos Aires International Festival of Independent Cinema 2021 Best Director winner), and Playground by Laura Wendel (Cannes Film Festival 2021 FIPRESCI Prize winner).

The new section called Asian Voices features new films from Asian directors. This section will showcase Yuni by Kamila Andini, and Islands by Martin Edralin.

Yuni is a coming-of-age drama about a high school girl who rejects societal norms. This is Indonesia’s official submission to the 94th Academy Awards. It won the Platform Prize, Toronto International Film Festival 2020.

Islands tells the story of a Filipino immigrant in Canada who has lived with his parents all his life, and quits his job after learning that his father’s health is declining. The film won the Special Jury award at the SXSW Film Festival 2021.

Other films available for online streaming are Ramon and Silvan Zürcher’s The Girl and the Spider under the RainbowQC section; and Bagane Fiola’s Baboy Halas and Sheng Qiu’s Suburban Birds under the Netpac Reloaded section.

SHORTS PROGRAM

For this year, QCinema will host two Shorts programs — #QCShorts and Asian Shorts. Both will have theatrical screenings and online streaming.

The #QCShorts films received production grants worth P600,000 from QCinema. The entries are: Skylab by Chuck Escasa, Ampangabagat Nin Talakba Ha Likol by Maria Estela Paiso; i get so sad sometimes by Trishtan Perez; MIGHTY ROBO V by Miko Livelo and Mihk Vergara; Henry by Kaj Palanca; and, City of Flowers by Xeph Suarez.

Meanwhile, in the lineup for the Asian Shorts are: Dear to Me by Monica Vanesa Tedja, Sunrise in My Mind by Danech San, New Abnormal by Sorayos Prapapa, and Live In Cloud-Cuckoo Land by Vu Minh Nghia and Pham Hoàng Minh Thy. It also includes the Philippine premiere of How to Die Young in Manila by Petersen Vargas, and Filipiñana by Rafael Manuel.

SAFETY FIRST

Quezon City Mayor Joy Belmonte said that the city government made a list of protocols for confined, crowded, and close contact areas, as well as coordinated with building officials to inspect the establishments.

“The theater cannot operate in Quezon City if it doesn’t meet the standards that are set by the building official pertaining to good ventilation,” Ms. Belmonte said.

“We have a Safety Seal. It is a seal that is given to establishments including offices and commercial establishments if they meet certain criteria that we have set forth. And the safety seal is granted also to the movie theater,” Ms. Belmonte explained.

“Last I heard from the building official, they have gone around and checked all of our theaters, and many theaters have already retrofitted and are fit for operations, and definitely Gateway is one of those,” she said.

Health and safety protocols for theater viewing under the ongoing COVID-19 pandemic such as wearing of masks, distanced seating, and the taking of body temperatures will be observed. Moviegoers are to present a vaccination card prior to ticket purchase.

Tickets to the screenings are priced at P150. More details about the festival can be found at qcinema.ph. — Michelle Anne P. Soliman

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