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Economic outlook brightens but risks to recovery remain

PHILSTAR FILE PHOTO

THE PHILIPPINES is poised to end the year with a stronger economic growth, after a better-than-expected third quarter, experts said at the BusinessWorld Virtual Economic Forum (BW VEF) on Wednesday.

However, questions remain whether the country’s economic rebound is gaining solid traction as experts cited elevated inflation, growing debt and industry losses as risks to growth.

“Given the new third-quarter GDP (gross domestic product), it looks like growth could be a little bit higher than what we were expecting, so probably somewhere between 5% to 5.5% [this year],” Sagarika Chandra, director for Asia-Pacific Sovereigns at Fitch Ratings said at a panel discussion on the first day of the BW VEF.

Fitch’s latest GDP outlook is more bullish than its 4.4% estimate given in October, and the 4-5% full-year growth target of the government.

Moody’s Analytics Chief Asia-Pacific Economist Steven Cochrane said the GDP forecast for this year “will be up a little bit” from its earlier estimate of flat 4% GDP growth.

“We actually were looking at 2023 [for the GDP to return to its pre-pandemic level. But then the improvement in the third-quarter number has improved the outlook, enough to bring this back to the end of next year,” he said during the same panel discussion.

Iluminada T. Sicat, senior assistant governor at the Monetary Policy Subsector of the Bangko Sentral ng Pilipinas, said the country’s resilient banking industry will help to boost recovery through improved credit activity.

“The banking system is reasonably well-capitalized and well-provisioned. Hence, banks will continue to be in a position to continue lending to support the economy,” she said.

The Philippine economy expanded by 7.1% year on year in the July to September period, beating market expectations. It also rose by 3.8% quarter on quarter.

In a statement sent Tuesday evening, the Finance department cited the wide range of third- quarter GDP growth estimates of 26 private economists it was tracking as a sign of current uncertainty.

The statement quoted Finance Undersecretary Gil S. Beltran, the department’s chief economist, as noting that the analysts’ closest projection of 6.5% was still off by 0.6 percentage point from the third quarter’s actual 7.1%. “The wide range of outlook… shows high level of uncertainties,” Mr. Beltran said.

He said that better management of COVID-19 risks through more directed local lockdowns and increased vaccination “should be able to help in the safe and gradual reopening of the economy and bring back investor confidence.”

The third-quarter growth rate, he added, show “sustained recovery” despite two weeks of strict lockdowns in Metro Manila and adjacent provinces in the same period.

Still, experts warned that it is too early to say if the country is headed for a sustained, solid recovery.

Changyong Rhee, director of the Asia-Pacific Department at the International Monetary Fund, said that medium-term scarring stands out in many emerging and developing economies in Asia.

“The divergence between Asian advanced economies and emerging and developing economies is deeply affected by differences in policy support and vaccination coverage,” Mr. Rhee said in his keynote speech at the BW VEF.

Moody’s Analytics’ Mr. Cochrane said it might take until 2026 for the Philippines to return to its pre-pandemic growth trend, reflecting the economic scars from the pandemic.

Meanwhile, Fitch’s Ms. Chandra said the Philippines saw the steepest decline in terms of investments in the region, which is crucial to economic growth.

In July, Fitch downgraded its outlook to the country’s “BBB” rating from “stable” to “negative,” citing the impact of the prolonged pandemic crisis.

“We’re still a bit cautious on our internal forecasts. It might have just been a bump, just the base effect,” she said.

The economy shrank by a record 9.6% in 2020.

SUSTAINABILITY IS KEY

Meanwhile, some of the country’s top CEOs are optimistic that 2022 will be a better year for the business sector, as they see sustainability as a driver of economic growth and long-term profitability.

“For our business clients, we aim to accelerate their ESG (environmental, social, and governance) awareness and we together we hope to achieve growth and profitability through the adoption of these principles and another E for economic growth,” Bank of the Philippine Islands President and Chief Executive Officer (CEO) Jose Teodoro “TG” K. Limcaoco said at a separate panel discussion at the BW VEF.

“Businesses should be making sure that profitability is not the only thing they are looking out for, it’s making sure that people are taken care of,” he added.

While he has a positive outlook for next year, Mr. Limcaoco noted some caution should still be applied as there are still COVID-19 cases and there is a need for booster shots.

Joseph Sigelman, chairman and CEO of the AG&P Group, said the company is now “above pre-pandemic levels” in terms of infrastructure rollout and construction business.

“I think we see a very, very strong pipeline for all sorts of infrastructure development, which lays the foundation for future growth,” he said.

Jaime T. Azurin, president and CEO of Meralco PowerGen Corp., noted energy consumption is now nearer the pre-pandemic level.

“In the power generation business, it will take decades for us to be able to switch into a sustainable energy. We have to ensure in just affordable and orderly transition, because investments are huge, and we have to continu-ously provide electricity to a growing economy like the Philippines,” he said.

Raoul Antonio E. Littaua, president and CEO of Insular Life Assurance Co., Ltd., said he hopes the pandemic has made policy makers realize the need to incorporate financial education in schools.

“There’s the threat of new variants and even new pandemics… I think the number one concern next year is to more effectively reach the 90% of Filipinos who are either uninsured or under insured,” he said.

Miguel G. Belmonte, president and CEO of BusinessWorld, in his opening remarks said the road to the country’s full recovery will be “full of bumps and turns (but) experts see many signs of hope, the so-called light at the end of the tunnel.” — Luz Wendy T. Noble

Value of Philippine metals output climbs to P121B on strong prices

REUTERS

By Revin Mikhael D. Ochave, Reporter

THE VALUE of the Philippines’ metallic mineral production jumped by 22.34% to P121.16 billion in the first nine months of 2021, thanks to strong metal prices and higher production of select metals, according to the Mines and Geosciences Bureau (MGB).

“The strong metal price coupled with the better mine production of nickel ore during the review period was the vital factor for this development,” the MGB said in a report on Wednesday.

MGB data showed nickel and its other by-products had the biggest share in terms of overall production value at 58.5% or P70.83 billion. Gold accounted for 31.2% or P37.75 billion, while copper made up 9.7% or P11.74 billion. The combination of silver, chromite, and iron ore accounted for less than 1% or P840.76 million.

Production volume of nickel direct shipping ore went up by 29% year on year to 325,848 metric tons (MT) and was valued at P46.05 billion.

The nine-month average price of nickel rose by 38% year on year to $18,035.15 per MT compared with $13,059.28 per MT last year.

“In terms of mine regional production, Caraga Region, the nickel capital hub of the Philippines, accounted for 76% with 248,001 MT, followed by Mimaropa with 17% or 54,936 MT, while Regions III and VIII accounted for 6% or 18,939 MT and 1% or 3,971 MT, respectively,” MGB said.

Gold production for the nine-month period inched up by 3% year on year to 13,356 kilograms from 12,973 kilograms last year.

MGB noted the average gold price during the nine-month period went up by 3.8% year on year to $1,801.97 per troy ounce versus $1,735.39 per troy ounce in 2020.

Among provinces, the Bicol Region accounted for 40.89% or 5,462 kilograms, followed by Cordillera Administrative Region (CAR) at 15.10% or 2,017 kilograms, and Caraga Region at 14.91% or 1,991 kilograms.

In contrast, copper output dropped by 18% year on year to 38,025 MT from 46,520 MT after the deficit recorded by Philex Mining Corp. and Carmen Copper Corp.

However, the decline in copper production was offset by the 57% year on year increase in its average price to $9,187.81/MT.

“Another optimistic development is the renewal of the Financial or Technical Assistance Agreement (FTAA) of OceanaGold (Phils), Inc. last July 2021. Its re-entry to the production stream will naturally boost not only copper but also gold and silver output,” MGB said.

Silver output also slipped by 5% year on year to 16,875 kilograms, but the average silver price rose by 34.2% to $25.77 per troy ounce.

Production of chromite declined by 59% to 10,816 dry metric tons (DMT) while iron ore output fell 33.5% to 28,474 DMT.

Meanwhile, MGB said the total area covered by mining tenements as of end-October is at 2.48% or 745,685.48 hectares out of the country’s total land area of 30 million hectares.

There are 313 approved mineral production sharing agreements (MPSA) to date, following the issuance of Executive Order No. 130 that lifted the moratorium on new mining projects, the MGB said. These MPSAs cover a land area of 576,482.65 hectares.

“MGB is working diligently on the formalization and declaration of the new Minahang Bayan (MB). At this time, 43 MBs have already been declared all over the country with 170 pending applications,” it said. Of the declared MBs, there are 13 in Luzon, three in Visayas, and 27 in Mindanao.

Sought for industry comment, Chamber of Mines of the Philippines Chairman Gerard H. Brimo said opportunities for the mining industry will continue to outweigh risks in 2022.

“We see opportunities will continue to outweigh risks in 2022 as governments invest in stimulus activities to revive economies battered by the pandemic and as the drive to transition to clean energy alternatives accelerates,” Mr. Brimo said in a mobile phone message.

“We look forward to further policy pronouncements, such as the lifting of the ban on open-pit mining, which will help maximize the Philippine mining industry’s growth potential and attract more foreign and domestic invest-ments. We also remain hopeful that business and investment policies going forward will be more stable,” he added.

Calixto V. Chikiamco, Foundation for Economic Freedom president, said the mining industry faces a brighter future following the acceleration of economic digitalization amid the pandemic.

“There is increasing demand for electronic products and the metals inside them. Moreover, with most governments pushing for an electronic vehicle (EV) future, there will be an increased demand for metals which are compo-nents of EV batteries. Copper, nickel, lithium, and cobalt are critical for battery production,” Mr. Chikiamco said in a mobile phone message.

“Also pushing up mineral prices are the low interest rates and easy money, which are causing investors to shelter their money from inflation by investing in metals,” he added.

PHL among most exposed to climate change risks

PHILSTAR FILE PHOTO

THE PHILIPPINES is one of the countries most exposed to climate change physical risks, particularly floods and storms, according to Fitch Ratings.

Based on Fitch’s Climate Change Physical Risk Exposure Heatmap rankings released on Wednesday, the Philippines ranked fourth in terms of risks arising from floods and storms.

The Philippines trailed Mozambique (1st), Vietnam (2nd), and Bangladesh (3rd) in the ranking of countries most vulnerable to floods and storms.

In a report, Fitch said climate change will lead to higher physical risks from higher temperatures, intense droughts, storms, floods, rising sea levels, among others.

“As the impact of secular climate change builds and extreme weather events strike, they will have a net negative effect on economic activity and public finances, and may trigger political shocks… Undiversified economies in harm’s way of adverse climate trends, with weak buffers and limited adaptation capacity are most vulnerable,” it said.

Fitch assessed the physical risk exposures using a range of current indicators and climate model projections for 2040-2059 using a scenario that involves a rise in global temperature of 2.4 Celsius above the pre-industrial average by 2100.

Fitch said it expects climate change physical risks to lead to some rating downgrades of the “most vulnerable” sovereigns.

“The climate is changing and this will have an increasing effect on sovereign creditworthiness. Fitch aims to capture this in sovereign ratings, as it does for all factors that it believes are relevant and material for creditworthi-ness,” it said.

Based on the report, the Philippines already had the fifth-highest average annual rainfall from 2011 to 2020, next to Malaysia, Costa Rica, Indonesia, and Guatemala. An average of 20 typhoons or storms hit the Philippines every year.

“Flood risk is complex and reflects many other factors, including peak events within wet months, rainfall in areas upstream of major rivers, storm surges, and the effectiveness of infrastructure, such as flood defenses and drainage,” Fitch said.

The report also showed the Philippines is the second-most exposed to risk of storms, after Japan but ahead of South Korea and China.

“The countries suffering the most damage from storms relative to gross domestic product (GDP) were Mozambique, Jamaica, Oman, El Salvador, the Philippines and Vietnam,” Fitch said.

The Philippines, alongside China, the United States and India, saw the highest number of climate-related natural disasters and extreme weather events in the past 20 years.

By 2100, Fitch warned that risks from climate change could mean losses of about 8% to Philippine GDP per capita.

“Climate change physical risks will have an adverse effect on GDP in some [of the world’s] regions through business disruption, damage and higher cost; a reduction in capital and labor productivity; shifting prices, terms of trade and economic rents; adverse health outcomes; and making some activities such as agriculture unviable,” Fitch said.

Fitch in July downgraded its outlook to the country’s “BBB” rating from “stable” to “negative,” citing the impact of the prolonged pandemic crisis. — LWTN

FMIC, UA&P expect return to pre-pandemic growth in 2022

THE PHILIPPINES will likely return to its pre-pandemic growth track by the end of next year as business confidence improves and the government ramps up infrastructure spending, First Metro Investment Corp. (FMIC) and University of Asia and the Pacific (UA&P) said in a joint report Wednesday.

The stronger-than-expected economic recovery in the third quarter renewed business confidence, FMIC and UA&P said in their November market call.

“Looser COVID-related restrictions throughout the country, especially in Metro Manila+, should add fuel to the warming business and consumer sentiment.”

Third quarter gross domestic product (GDP) rose 7.1% year on year, far exceeding the median growth estimate of 4.7% in a BusinessWorld poll conducted a week before data release.

The third quarter outcome was weaker than the revised 12% growth posted in the second quarter after the government placed Metro Manila under an enhanced community quarantine (ECQ) for two weeks in August to curb a surge in the Delta variant of the coronavirus.

Socioeconomic Planning Secretary Karl Kendrick T. Chua said pre-pandemic nominal GDP levels could be revisited by 2022, “even as early as the first quarter.”

FMIC and UA&P said infrastructure spending will likely increase in the fourth quarter “as election spending simmers with lineups firming up by end of the year.”

Public-private partnerships in infrastructure projects will also likely continue with fewer impediments, the two institutions said.

“The economy will likely get back into its previous growth path by the end of 2022, even as inflation eases especially in (the first quarter of) 2022.”

The improving performance of the manufacturing and construction sectors will add to industrial output gains in the fourth quarter, they said.

IHS Markit on Tuesday said the Philippines Manufacturing Purchasing Managers’ Index was at 51 last month from 50.9 in September. — Jenina P. Ibañez

Bar association calls for cancellation of Udenna’s Malampaya acquisitions

BW FILE PHOTO

THE Integrated Bar of the Philippines (IBP) said Wednesday that the Department of Energy (DoE) must cancel the sale of a 45% stake in the Malampaya project to Udenna Energy Corp. and delay final approval of another 45% sale this year.

“While the Senate investigation is ongoing, (we) call on the DoE to rescind its approval of (Chevron Malampaya LLC’s) transfer of its 45% interest in Malampaya to Udenna subsidiary UC Malampaya (Pte Ltd.), and to hold in abeyance its approval of Shell Philippines Exploration BV’s (SPEx) transfer of its 45% to another Udenna subsidiary, Malampaya Energy XP,” the IBP said in a statement.

It cited the possibility of a buyer with limited technical expertise inviting foreign parties with interests that are hostile to the Philippines to participate in the Malampaya project.

“… a buyer who is not technically and financially capable of operating Malampaya may tap companies from foreign countries having adverse interests in the West Philippine Sea dispute,” the IBP said, adding that such a move will be a threat to the Philippines’ strategic energy resources.

The Senate Committee on Energy is currently reviewing Udenna’s Malampaya deals. The DoE has said that such investigations are delaying the timelines of consortiums participating in developing Philippine energy resources.

Senator Ana Theresia N. Hontiveros filed a resolution Friday urging the Senate Blue Ribbon Committee to investigate the acquisition of the stakes in Service Contract 38 (SC 38), the resource block that includes the Malampaya gas field.

The DoE told BusinessWorld Tuesday that Ms. Hontiveros’s resolution is “speculative.”

In October, a criminal complaint was filed before the Ombudsman against officials of the DoE, Udenna, Chevron Malampaya LLC, SPEx, and the Philippine National Oil Co.-Exploration Corp. (PNOC-EC), which owns 10% of the Malampaya project.

The complaint was filed by concerned citizens alleging that Udenna subsidiaries are financially and technically unqualified to operate Malampaya.

The DoE and PNOC-EC were also alleged to have neglected the option to match the Udenna offer in the buyout of the Chevron Malampaya stake.

The IBP then urged the Office of the Ombudsman to “expeditiously resolve” the criminal complaint, citing the urgency of the matter as the Malampaya field approaches commercial depletion.

BusinessWorld asked Udenna Energy Corp. to comment, but it had not replied at the deadline. The DoE declined to comment.

Malampaya natural gas, which is piped from Palawan to Batangas, fuels power plants servicing 30% of Luzon’s energy needs. The Philippines is expected to rely on imports when the field runs out of gas.

In 2019, Dennis A. Uy’s Udenna Corp. through its subsidiary UC Malampaya acquired Chevron Malampaya LLC’s share in the project for nearly P28.6 billion. In April, the DoE approved the deal.

In May, another Udenna unit, Malampaya Energy XP, bought out SPEx, which had held a 45% operating interest in the Malampaya gas field, for P23.2 billion. — Marielle C. Lucenio

Hybrid of leisure travel, remote work seen aiding in industry’s recovery

Reuters

REMOTE WORK in combination with leisure travel is viewed as a possible new market that will help in the recovery of the travel and hospitality industries, a senior business consultant said.

The work-from-anywhere setup has given rise to a new type of travel during the pandemic, according to Anthony Oundjian, managing director and senior partner at Boston Consulting Group.

“This is opening a new value pool, I would say, for the industry,” he said at the BusinessWorld Virtual Economic Forum 2021 on Wednesday.

“I was recently in Siargao working with some of my team members, and it was interesting to observe like during the day… that with all of these (video platforms) and the internet connection, we had all people working,” he added.

AIM Research Manager Eylla Laire M. Gutierrez told BusinessWorld recently that the so-called “workcation” model is expected to persist as more employees become engaged in this new setup.

As more destinations reopen with the rise in vaccination levels, the Tourism department is hoping to see more travelers in the coming months.

“Boracay experienced a dramatic increase of tourist arrivals in the last two months, with a total of 32,452 visitors in October,” the department said on Nov. 12.

“We hope to see even more visitors, given this positive development, and ensure everyone’s safety altogether now that Boracay’s fully vaxxed tourism workers are at 94%, while its entire eligible population is 70% vaccinated,” it added.

Mr. Oundjian said that domestic travel came to the fore during the pandemic as many countries closed their borders to international visitors to contain the spread of the coronavirus.

“But this may not last because when we ask consumers, they are willing to travel overseas, to go far, so I think for the Philippines, for Thailand, we should expect to have a very meaningful inflow of Koreans, Europeans, and US citizens as soon as they can,” he added.

In its 2022 outlook report, Fitch Ratings said passenger demand for leisure and other personal travel is expected to recover faster than for corporate travel, with domestic travel bouncing back the fastest.

“The ramping-up of vaccinations and availability of booster shots are paving the way for a gradual return to normality for many Asian countries,” it said. — Arjay L. Balinbin

Low rate of plastic recycling seen as a missed opportunity

BW FILE PHOTO

THE PROPORTION of plastics that are recycled in the Philippines is about 30%, with the unrecycled materials that go to waste or downcycled valued at around $1 billion, the International Finance Corp. (IFC) said.

IFC Country Manager Jean-Marc Arbogast said deterrents to recycling include high power costs and cheap landfill disposal fees.

“We estimate that to be around $1 billion every year of value that goes to waste,” he said at the BusinessWorld Virtual Economic Forum Wednesday.

He said more global brands have voluntarily committed to using recycled resins in their products, increasing demand.

But in the Philippines, recycled material suppliers are small- and medium-sized businesses that cannot scale up their operations to meet the needs of global companies, pushing the brands to choose virgin plastic made from crude oil or natural gas.

“The decision here also becomes economic. You have competition from virgin materials, virgin plastic. So if the oil price is low, for example, the decision is very quick, unfortunately. You’ll go with the lower cost,” Mr. Arbogast said.

Landfill tipping fees, or waste disposal charges, are also cheap in the Philippines compared to other Asian countries, which means there is little incentive for local government units or private companies to promote recycling or other circular economy approaches.

“The fees are so low, it’s very hard to come in and make (recycling) profitable,” he said.

“Electricity costs are very high in the Philippines, among the highest in the region. So if you’re running a facility, whether it’s a mechanical recycling facility or chemical recycling facility, it’s very expensive.”

Over 60% of products sold in the Philippines, he added, use packaging that is hard to recycle.

“If we’re able to put in place some regulation or standard that would mandate companies to look at those packaging in a different way, I think it would help a lot.”

He said the government should require companies to have a percentage of recycled material in their packaging and products. Packaging can also be made easier to recycle by limiting the coloring and types of resin, he added.

“In the end, if we really want to make a change, it has to come from the consumers. If the consumers are not there, it won’t happen. If the consumers all together want something, the market’s going to respond to it.”

The House of Representatives in July approved on final reading House Bill No. 9147 or the Single-Use Plastic Products Regulation Act, which would stop the production and sale of single-use plastics. The counterpart measure is still pending at the Senate.

Coca-Cola Philippines in September announced it would phase out its sachet production by next year. — Jenina P. Ibañez

SPNEC prices IPO at P1 each

By Keren Concepcion G. Valmonte, Reporter

SOLAR Philippines Nueva Ecija Corp. (SPNEC) has set the final offer price of its initial public offering (IPO) to one peso per share, which means the company can raise up to P2.7 billion to fund the first part of its 500-megawatt (MW) solar plant.

SPNEC, a wholly owned subsidiary of Leviste-led Solar Philippines Power Project Holdings, Inc. (SPPHI), will be offering to the public 2.7 billion common shares.

“The IPO price has been finalized at P1.00, which was also the initial maximum offer price guidance announced in the preliminary terms of the offer,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message.

“One thing that may have been considered was the improving market conditions in the country, as the index has lingered mostly above the 7,200 area during the past few weeks — brought about by the improving COVID-19 (cooronavirus disease 2019) situation in the country,” he added.

The bellwether Philippine Stock Exchange index (PSEi) rose 17.94 points or 0.24% on Wednesday, closing at 7,419.10.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the pricing “could signal improved market sentiment recently as the economy further reopens with granular lockdowns or alert level system already adopted nationwide.”

“Renewable energy has also become more attractive for investors worldwide amid the need to comply with ESG (environmental, social, and governance) standards as already required by some regulators globally in recent years,” Mr. Ricafort said in a separate Viber message.

The company may net up to P2.59 billion from its IPO, which will be used to fund the first 50-megawatt-direct current (MWdc) for “Phase 1A” of its solar project.

Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said solar power is currently in high demand “due to the harmful effects of climate change which is attributed to carbon-related or fossil fuels.”

“At [its IPO price], valuation is high considering [it] only [has] a par value of 10 centavos per common share without commercial operations and incurring losses. But if it could achieve its Phase 1A goal of commissioning 225 MW for commercial operations by next year then price is justifiable,” Mr. Pangan said in a text message.

SPNEC is the first company to receive approval to list under the Philippine Stock Exchange’s (PSE) Supplemental Listing and Disclosure Requirements for Renewable Energy (RE) Companies approved in 2011, which allows devel-opment-stage project companies to list, subject to certain requirements.

The company previously said the IPO proceeds would be enough to kickstart its 500-MW project as it would secure debt to complete it.

According to its preliminary prospectus dated Nov. 12, the company plans to allocate P1.003 billion of its net proceeds to fund the development of Phase 1A and P200 million will be allotted for the construction of the transmis-sion line of the project.

Meanwhile, P23 million will be for lease expenses over project lands and for the right of way leases and P33 million will be spent for general corporate purposes. SPNEC said “any amount in excess of P1.332 billion will be used for land acquisition for its future expansion.”

“If we do raise the amount of over P1.3 [billion], then we will be able to use those proceeds so accretive in our view that the value of the shareholders’ investment will actually increase more… because we’ll have more to invest for the expansion,” Solar Philippines Founder Leandro L. Leviste told BusinessWorld in a virtual call last week.

The company looks to hold the offer period from Dec. 1 to 7, while its tentative listing date on the main board of the PSE is on Dec. 17 under stock symbol “SPNEC.”

The Nueva Ecija project is said to be the largest among the first 1-gigawatt (GW) projects of Solar Philippines, which is targeted to be operating by 2022.

“We can always go back to the market if we only raise less than the max amount after we construct the first phase of the plant to expand it beyond the initial capacity,” Mr. Leviste said.

“Because this is the company’s first time to tap the capital markets, we really want to show that we can do a lot of good with the proceeds that we raised,” he added.

Solar Philippines’ other projects include an operational 63-MW plant in Batangas in partnership with Korea Electric Power Corp., one in Tarlac with Razon-led Prime Infrastructure Holdings Corp. that is being expanded up to 200 MW, and two more in Batangas and Cavite with a combined capacity of 140 MW expected to be fully operational by 2022.

SPNEC tapped Abacus Capital and Investment Corp. as the issue manager and lead underwriter for the offer, while Investment Capital Corp. of the Philippines is a participating underwriter.

Jollibee looks to launch more stores in China

HONG ZHUANG YUAN opened its first ever in-mall store on September 9. With the restaurant’s new location in Xiyue Sky Street, customers lined up on its opening day to get a taste of Hong Zhuang Yuan’s affordable signature dishes.

JOLLIBEE Foods Corp. (JFC) is planning to launch at least 33 more stores in mainland China by December through its Tim Ho Wan, Yonghe King, and Hong Zhuang Yuan brands.

In a statement on Wednesday, the company said it is expecting revenue growth driven by its expansion efforts in the country. It has so far opened 80 stores under the three brands this year.

“The expansion efforts of these brands will play a huge and important role in generating revenue and strengthening the Jollibee Group’s growth, especially since China is one of the company’s four pillar markets,” JFC President and Chief Executive Officer Ernesto Tanmantiong said.

The company earmarked a record P12.2 billion for its capital expenditures this year. It had planned to concentrate its expansion in Asian countries such as China, as JFC works on its goal to be one of the top five restaurant firms in the world.

Tim Ho Wan now has six stores across Shanghai after launching its first branch in China in September last year. Its stores are located in popular commercial centers, including in MixC Shopping Mall in Minghang District, Sun Palace in Hongkou District, and Cifi Tower in Putuo District.

JFC aims to “aggressively grow.” Tim Ho Wan in mainland China from six to 100 restaurant outlets in the next five years.

Meanwhile, Yonghe King launched 62 new stores in 2021, bringing its store count to 383 across China. It aims to have 1,000 stores in the next five years.

Yonghe King recently launched its first two stores in the Shaanxi Province via Xi’an City. It is also slated to launch its first store in the Hainan province, while 23 more Yoonghe King stores are expected to open by December.

Hong Zhuang Yuan now has 44 stores in Beijing after launching its first mall-based store in Xiyue Sky Street in Southwest Beijing.

JFC said Hong Zhuan Yuan is now looking to launch stores in Beijing’s top 10 shopping malls as well as in other malls outside the city, in an attempt to have 60 stores by the end of this year.

Jollibee shares went up by 1.39% or P3.40 on Monday to close at P248 apiece. — Keren Concepcion G. Valmonte

Airport investment to remain strong next year

BW FILE PHOTO

FITCH RATINGS expects capital investment in airports in the Asia-Pacific region to remain strong in the coming year, owing to the “long-term horizon” for airport business plans that will extend beyond the pandemic.

Airports in the region took decisive steps to maintain financial flexibility by cutting costs during the global health crisis, it said.

“Many airports across major and fast-developing aviation markets such as Australia, China, Japan, Philippines, South Korea, Thailand and Vietnam are continuing with their capex (capital expenditure) plans, given the long-term horizon that goes well beyond the potential duration of the crisis,” the ratings agency said in its 2022 outlook for the industry released Tuesday.

Passenger traffic at Philippine airports increased to 4.02 million in the second quarter of the year, up from 747,999 a year earlier. Traffic remained significantly lower than the pre-pandemic level of 41.95 million, according to data from the Transportation department.

Fitch Ratings has an “improving” outlook on airports in the Asia-Pacific, owing to the resumption of international travel while domestic traffic “rebounds strongly.”

On Nov. 11, the Transportation department said it completed 233 airport projects, including Terminal 2 of Clark International Airport, the Bohol-Panglao International Airport, the second terminal of the Mactan-Cebu International Airport, Bicol International Airport, and airport projects in Calbayog, Kalibo, Tuguegarao, Catarman, and San Vicente, Palawan.

It said 84 more airport projects are being implemented.

San Miguel Corp. is building a P740-billion airport in Bulacan province.

A new consortium recently submitted an unsolicited proposal to develop the Sangley International Airport. The group is composed of Cavitex Holdings, Inc., the Yuchengco Group of Companies, MacroAsia Corp., Samsung C&T, Munich Airport International GmbH, and Arup Group.

“Travel restrictions have been easing, and a few countries have reopened or been set for reopening, which will rejuvenate tourism,” Fitch Ratings said.

The ratings agency expects the overall air traffic in the region to recover further in 2022, as countries achieve high vaccination rates and reopen borders.

“We expect overall air traffic will continue to recover in 2022, although not to reach pre-pandemic levels until 2024,” Fitch Ratings said.

“We believe passenger demand for leisure and other personal travel to bounce back faster than for corporate travel, with domestic travel recovering the fastest,” it added.

Some countries might adopt a “more cautious approach,” delaying the recovery of international traffic. — Arjay L. Balinbin

Business groups, foreign chambers push for ratification of electric vehicle bill

REUTERS

INDUSTRY ASSOCIATIONS called on legislators to expedite the ratification of a bill promoting the adoption of electric vehicles (EVs) and laying out how they are to be regulated to pave the way for the Philippines to become a regional hub for the industry.

They said in a joint statement issued on Nov. 22 that they are confident that the measure will be sent to Malacañang before Congress goes on a one-month recess on Dec. 15.

“Passage of the bill will enable the Philippines to participate in what is becoming an enormous new supply chain of the EV industry, particularly components, batteries, and charging stations,” they said.

The ratification of House Bill 10213 and Senate Bill 1382 would also help the Philippines keep up with other countries in EV development, with the US a potential market after EVs and charging stations featured prominently in a recently-signed infrastructure bill.

A bicameral conference committee in Congress was due to meet to harmonize the two bills on Nov. 23, but the meeting was cancelled.

Pampanga Rep. Juan Miguel M. Arroyo, chairman of the House Committee on Energy, said in a Viber message that the Senate asked to reschedule the session. — Russell Louis C. Ku

Senators are currently busy tackling the 2022 national budget.

The bill will require establishments with 20 or more designated parking slots to dedicate 5% of their space for the use of EVs and provide charging points.

The bill, if passed, also establishes tax incentives for EV manufacturers, entities maintaining charging stations, and research and development centers.

Electric vehicles, charging stations, and materials for their assembly will also be exempt from customs duties and value-added tax for five years from the effectivity of the proposed law.

The bill will establish an Electric Vehicles Advisory Board composed of officials from various government agencies, including the Department of Energy and Department of Transportation, to formulate policy encouraging the de-velopment and commercialization of EVs.

The Comprehensive Roadmap on Electric Vehicles (CREV) will become the national plan to help boost the electric vehicle industry. CREV will be integrated with the Philippine Energy Plan and the National Transport Policy.

The statement was supported by foreign business chambers based in the Philippines, including the American, Australian-New Zealand, Canadian, European, Japanese, and South Korean business councils.

Other groups that backed the statement were the Electric Vehicle Association of the Philippines, the IT and Business Process Association of the Philippines, the Management Association of the Philippines, the Philippine Associa-tion of Multinational Companies Regional Headquarters, Inc., the Philippine Parts Makers Association, Inc., and the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. — Russell Louis C. Ku

Cooking and pairing with booze

With restrictions on gatherings slowly lifting, it seems that holidays with our friends and family during this pandemic might be forthcoming. A pairing menu by San Miguel Foods Culinary Center (SMFCC), coupled with drinks from San Miguel Brewery (SMB), Wine Brothers’ Philippines, and Ginebra San Miguel, Inc. (GSMI), just might hit the spot.

The menu was shown off via a Zoom dinner last week by San Miguel. Crostini with a cheese and pimiento spread (made with Magnolia Milky White Cheezee Spread), topped with cubes of Magnolia Milky White Cheese and sliced green olives marinated in olive oil and Ginebra San Miguel Premium Gin served as the first course; this was followed by crostini with Roasted Garlic Butter (Magnolia Gold), and Purefoods Chorizo Bilbao style and onions, stewed in San Miguel Premium All-Malt Beer. Both of these were paired with San Miguel Super Dry, which gave gravitas to their flavors with the crisp notes of the beer.

Pintxos with San Miguel Super Dry

Ring-shaped dumplings ala tortellini came next, filled with cream cheese and spinach on top of an emulsified butter sauce. The sauce was made with Magnolia Gold Butter, Magnolia Full Cream Milk, red onion, beetroot and Ginebra San Miguel Premium Gin. During the webinar, it was suggested to pair this with a Sweet Lemony Martini made with Ginebra San Miguel Premium Gin (demonstrated by GSMI’s mixologist Tabitha Rice) but we found that the gin alone does the job, its sharp, citrusy notes cutting through the rich cream cheese.

The third course was a Magnolia Free Range Chicken marinated for 24 hours in Ginebra’s 1834 Premium Distilled Gin and a blend of herbs and spices, slow-cooked in olive oil, and seared until crispy and golden brown. This was served on top of mashed squash-potato and a pea puree and drizzled with a balsamic reduction. This was paired with Woomera’s Sauvignon Blanc, which gave a liveliness to the dish.

The heaviest course was the Mini Beef Wellington, made with baked Monterey Beef Tenderloin covered in a layer of Purefoods Honeycured Bacon and mushroom duxelles wrapped in a golden puff pastry. This was served with a rich beer gravy made of San Miguel Super Dry. This was paired with 1834 Premium Distilled Gin, with notes of calamansi and sampaguita flowers. The clean-tasting gin, with some palate-cleansing properties and a smooth mouthfeel, cut through the strong and quite salty flavors of this dish, preventing it from being too overpowering.

Finally, a Moist Chocolate Cake in Sweet Red Dark Ganache made with Magnolia’s Devil’s Food Cake Mix (and infused with Woomera’s Sweet Red Wine) was paired with Cerveza Negra — a match made in chocolate heaven. The Cerveza Negra’s coffee and cocoa notes made the pairing seamless.

PAIRED WITH PALE PILSEN

As San Miguel Pale Pilsen is already a fixture of Filipino life, we asked SMB Brewmaster Alan Sienes what could go with it. It’s simple fare: peanuts, cheese found in the fridge, and barbecue.

Meanwhile, SMFCC Corporate Chef Victor “Viboy” Miranda said it goes with “Anything na pang-pulutan na plain na food natin (Anything you can eat while drinking that’s plain).” From their stable of products, he chose their corned beef and bacon.

“Entertaining this holiday season at home does not need to be difficult,” said Leena Tan Arcenas, Culinary Services Manager for SMFCC. “All you need are great quality beverages matched with ‘Madalicious’ recipes,” she said, pointing to the YouTube channel of SMFCC, Home Foodie, which shows recipes made with San Miguel products with a “Madalicious” (a combination of the word “madali” or “easy” in Filipino, and “delicious”) tag.

Those interested in trying out the dishes, most of the recipes can be found here: https://homefoodie.com.ph/recipes. —  Joseph L. Garcia

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