Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 5956

NBL: Bulacan books twice-to-beat advantage in QF

EARNEST Efren Reyes of Bulacan attempting a shot.

THE Bulacan Damayang Filipino Republicans clinched a twice-to-beat advantage in the quarterfinals (QF) after defeating the Laguna Pistons in overtime, 117-108, last Saturday in the Chooks-to-Go National Basketball League (NBL) Chairman’s Cup 2021 at the Bren Z. Guiao Convention Center in San Fernando, Pampanga.

Earnest Efren Reyes scored 28 points, grabbed 11 rebounds, and converted a running jumper to send the game into overtime before the Republicans outscored the Pistons, 17-8, in the extra period.

The Republicans rose to 7-3 and, due to the Taguig Generals’ loss to Pampanga Delta, 108-88, in the second game, grabbed one of the twice-to-beat incentive in the quarterfinals that goes to third and fourth ranked teams at the end of the elimination round.

Ryan Operio also played big plays in overtime after finished with 20 points and Joshua Moralejo had 13 points in the Bulacan victory.

The Pistons finished the elimination round with a 4-6 record despite a gallant stand where they came back from 19 points down to grab a 100-98 lead late in regulation. But even without a time out and with 3.8 seconds to work with, Mr. Reyes scored the jumper that extended the game to overtime.

CJ Gania had 16 points, seven rebounds and shot 4-of-8 from threes in the Delta’s 20-point victory over the Generals.

Pampanga cemented the No. 1 position with a 9-1 record and secured one of the two automatic semifinal berth. Taguig goes to 6-4 and in danger of missing the twice-to-beat advantage in the quarterfinals.

Dončić’s 3-pointer as time expires sinks Celtics

LUKA Dončić made the game-winning 3-pointer as time expired and had a game-high 33 points to help the Dallas Mavericks hold off the visiting Boston Celtics, 107-104 on Saturday night.

Dončić dribbled the length of the court before heaving up a fadeaway trey from the corner in triple coverage to win it.

Kristaps Porziņģis added 21 points and seven rebounds in his return after missing the last five games with lower back tightness. Reggie Bullock and Jalen Brunson added 13 points apiece for Dallas, which earned its sixth win in nine games this season. Dončić added nine rebounds and five assists.

Jayson Tatum had 32 points and 11 rebounds to pace the Celtics. Dennis Schröder finished with 20 points and six assists, Robert Williams chipped in 16 points with eight rebounds, and Al Horford scored 14 for Boston.

Boston was without All-Star forward Jaylen Brown, who left the team’s win at Miami on Thursday due to right hamstring tightness.

The loss snapped a two-game winning streak for the Celtics. Dallas was up 57-40 at half time after leading by as many as 19 in the first half. — Reuters

Neymar double lifts PSG to 3-2 win at Bordeaux

BORDEAUX, France — Paris Saint-Germain (PSG) stretched their advantage at the top of Ligue 1 to 10 points after two goals by Brazil forward Neymar and another from Kylian Mbappé helped them to a 3-2 win at Girondins Bordeaux on Saturday.

PSG, who carved out a 3-0 lead before late goals by Bordeaux set up a tense finish, have 34 points from 13 games, ahead of second-placed Lens who beat Troyes 4-0 at home on Friday. Bordeaux stayed 16th on 12 points.

Neymar struck twice in the first half thanks to a pair of sublime assists by France World Cup winner Mbappé, having opened the scoring in the 26th minute with a neat shot past two defenders inside the near post.

Neymar muted his celebrations and took off his jersey to unveil a message on his shirt paying tribute to Brazilian country singer Marilia Mendonca, who was killed in a plane crash in the state of Minas Gerais on Friday.

The second goal was of superior quality as Neymar raced down the left and exchanged a one-two with Mbappé, who set up the Brazilian with a cheeky back-heel for a clinical finish into the bottom corner.

Mbappé made it 3-0 with a simple goal as Georginio Wijnaldum beat the offside trap and squared the ball to the forward who rolled it into an empty net in the 63rd minute, with Bordeaux goalkeeper Benoit Costil stranded.

The home side pulled one back in the 79th minute as striker Alberth Elis held off his marker and beat visiting keeper Kaylor Navas from close range and PSG were forced to hang on after M’Baye Niang netted in stoppage time.

Mbappé acknowledged that an expensively assembled PSG outfit, who were missing Lionel Messi due to a niggling knee injury, were still a work in progress but rebuffed criticism that they are failing to live up to expectations.

“Everyone has the right to an opinion, some people think we are playing badly but I think we are just not playing very well at the moment,” he said.

“We need to improve and we will continue to work hard. Today, we showed our quality as we had spells where we played at a very high level.

“The goals we conceded were avoidable, but in the end we felt comfortable. We try to improve every day and we hope that we will get better and better.” — Reuters

Kamaru Usman defends title over Colby Covington at UFC 268

THROUGH two rounds, the Ultimate Fighting Championship (UFC) 268 main event rematch between welterweight champion Kamaru Usman and Colby Covington seemed ill-conceived.

Usman (20-1), of Denver by way of Nigeria, won their first fight nearly two years ago at UFC 245. And he nearly finished this bout at New York’s Madison Square Garden when he dropped Covington (16-3) twice in the closing seconds of the second round.

Covington, though, showed tremendous tenacity by rallying in Rounds 3 and 4 with crisp striking, putting the fight’s result in question.

That’s when Usman showed championship mettle. He clamped down in Round 5 with crisp striking and a little more in the gas tank, and held on for a unanimous decision in the title bout.

The judges scores were 48-47, 48-47 and 49-46 for the champ.

“I know there’s a lot of trash talk and there’s a lot of bad blood here, and there’s probably still gonna be some after tonight, but this guy is tough as (expletive),” said Usman, who successfully defended his belt for the fifth time.

THUG ROSE
The evening’s co-feature bout was a rematch of a strawweight title bout from seven months ago.

And once again, Colorado’s Rose Namajunas defeated China’s Zhang Weili. But unlike the last time, when Namajunas (12-4) defeated Weili (21-3) with a flash knockout early in the first round to claim the 115-pound belt, this match was a five-round battle of attrition.

Weili clearly won the first round with a takedown and extended control time, and Namajunas did the same with the fifth and final round in a similar manner.

The middle three rounds were all coin flips, with both fighters having moments in tense kickboxing and grappling exchanges. In the end, Namajunas got enough nods from the judges in those rounds to retain her championship.

She earned a split decision on scores of 47-48, 48-47 and 49-46 for her fifth straight win.

“I was pretty confident in the end that I won it,” Namajunas said. “The first couple rounds were pretty close. I wasn’t even too worried about the result, just doing my best.” — Reuters

Westbrook experiment a failure

The Lakers are just 10 games into their 2021-22 campaign, but, already, not a few quarters have seen fit to declare the Russell Westbrook experiment a failure. It isn’t simply that he remains inefficient; that was a given even for the most optimistic supporters of the purple and gold. It’s that he appears to be utterly unable to make the right decisions in the crunch. The “Westbrook needs to be Westbrook in order to succeed” argument will go only so far when the losses keep piling up.

At this point, there can be no turning back the clock and wondering why the Lakers saw fit to overhaul its roster and roll the dice on the National Basketball Association’s most polarizing player. True, he has a sterling résumé; he’s a nine-time All-Star with a Most Valuable Player award to boot. On the other hand, he competes with blinders on; his gaudy stats have come largely with the offense bending to his will — by hook or by crook, for better or for worse.

It’s possible that, with a few favorable bounces here and there, the Lakers will have been owners of a better slate that takes the pressure off their offseason reboot. There’s a reason Lady Luck hasn’t smiled on them, however; the best teams make and carve fortunes, and, try as the pride of La-La Land may, the ones they do have them either stepping back or running in place. And because Westbrook is the new marquee name, the onus is most definitely on him to deliver on his promise — or at least try by adapting.

Perhaps Westbrook will be properly chastened by resident foundations LeBron James and Anthony Davis. For all his supposed strengths, he’s third — maybe even fourth given the outstanding effort of sixth man Carmelo Antthony — in the pecking order. He can no longer act as if he’s first among equals, the way he has to disastrous results.

If there’s one thing the Lakers have going for them, it’s that they have James to count on. The league’s greatest problem solver (arguably in history) should be able to figure things out by the time the matches really count. The flipside is that he has to be on the court to orchestrate the requisite adjustments — an iffy proposition given his spotty injury record of late. Which leads all and sundry to wonder if their aim to reach the stars ultimately won’t get lift off due to self-imposed obstacles too difficult to surmount.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

New consortium submits proposal for Sangley

PHILSTAR

ANOTHER CONSORTIUM has submitted an unsolicited proposal to develop the Sangley International Airport.

In a statement Sunday, the group, composed of Cavitex Holdings, Inc., Yuchengco Group of Companies, MacroAsia Corp., Samsung C&T, Munich Airport International GmbH, and Arup Group, said an unsolicited proposal has been submitted to Cavite Governor Juanito Victor C. Remulla.

Mr. Remulla had yet to respond to BusinessWorld’s request for comment at the deadline.

“The Cavite provincial government recently declared a second failed bidding when it received no bids for the airport project after the Oct. 20 deadline,” the group noted.

The group is proposing to partner with Cavite province for the development, design, financing, construction, operation and maintenance of the Sangley airport project.

The consortium said its member Cavitex Holdings, Inc. “was responsible for the development, design, and construction of the Manila-Cavite Expressway (Cavitex) project.”

Cavitex is a joint venture project of Cavitex Infrastructure Corp. (CIC) and the Philippine Reclamation Authority. CIC has been a Metro Pacific Tollways-managed subsidiary since 2013.

Meanwhile, the Yuchengco Group is engaged in construction, infrastructure development, banking, insurance, and automotive services, among others.

The group said Lucio C. Tan’s  MacroAsia will provide management and technical services for the aviation support and logistics component of the project. The company will be a non-equity member of the consortium.

“Joining the local team… [is] Samsung C&T Corp. of South Korea that built the Petronas Twin Towers in Kuala Lumpur, the iconic Burj Khalifa in Dubai, Terminal 1 of the Incheon International Airport, and the extension of the Changi International Airport,” the consortium noted.

Another foreign member of the group is Munich Airport International GmbH, the management services arm of Munich Airport.

The last international member is the London-based design and planning company Arup Group.

MacroAsia and its partner China Communications Construction Co. Ltd. had negotiated with Cavite for the project last year, but the latter canceled its notice of selection and award in January due to the “various deficiencies in the submission of requirements to conclude the joint venture agreement.”

The province had issued a new invitation for firms to submit joint venture proposals for the airport project but received no bids. — Arjay L. Balinbin

Japan FTA talks stalled on farm product access

THE PROCESS of reviewing the free trade agreement (FTA) between the Philippines and Japan has stalled on the issue of access to Japanese markets for Philippine farm products, according to the Board of Investments (BoI).

Ceferino S. Rodolfo, Trade undersecretary and BoI managing head, said in a recent virtual briefing that the general review of the Philippines-Japan Economic Partnership Agreement (PJEPA) has encountered setbacks.

“(The) Philippines-Japan FTA review and renegotiation has not moved forward particularly because of the Philippines’ insistence on discussing and negotiating for better market access for our agricultural products including tropical fruits,” Mr. Rodolfo said.  

“As PJEPA is the first ever FTA of the Philippines, it is already due for an upgrade to make it still up-to-date and maintain its preferential status vis-a-vis other trade agreements,” he added.

In March, Trade Secretary Ramon M. Lopez confirmed that the Philippines and Japan started the general review of the PJEPA amid the coronavirus disease 2019 (COVID-19) pandemic. The FTA came into force over a decade ago.  

Mr. Rodolfo said one of the priority products is banana, which is currently charged 18% tariff during winter and 8% during the summer.  

“We hope that Japan follows South Korea’s example (in eliminating) tariffs for bananas. We hope Japan will follow that example,” Mr. Rodolfo said.

The Department of Trade and Industry has announced that the tariff rate of bananas will be eventually reduced to zero duty from 30% in five years following recently-concluded FTA negotiations between the Philippines and South Korea.

According to Bureau of International Trade Relations Director Angelo Salvador M. Benedictos, the Philippines has been asking Japan to consider its requests on agricultural access, but talks have not made significant progress.

“As with other countries, Japan is also sensitive when it comes to agriculture, so the discussions have not moved. We want the Philippine products to enter with fewer restrictions,” Mr. Benedictos said.

Mr. Rodolfo said Japan is likely to negotiate for greater access by its industrial products, particularly some tariff lines on petrochemicals and steel.

“Another thing that Japan will negotiate is vehicles below 3,000 cc (engine displacement) since they still have 20% duty. For vehicles 3,000 cc and above, those already have zero duty,” Mr. Rodolfo said.

CARS PROGRAM EXTENSION
Meanwhile, Mr. Rodolfo said the BoI will rework the extension of the Comprehensive Automotive Resurgence Strategy (CARS) program to comply with the provisions of Republic Act No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

The program offers fiscal support to car companies that produce in the Philippines some 200,000 units of high-volume car models over six years.

Mr. Rodolfo said the BoI is harmonizing the extension of the program with a provision of the CREATE Act on temporary measures for exceptional circumstances.  

“The possible extension will match the duration of the state of national emergency. For example, if the state of national emergency spans from 2020 to 2022, then the compliance period will be moved two years. This is because we are looking at the pandemic as a lost opportunity,” Mr. Rodolfo said.  

“The timeline for the extension may spill over next year. We’ll try our best to have the extension released by February of next year. We are checking if the extension does not anymore need an executive order, but will already be sufficient with a board decision,” he added.

Under the program, Toyota Motors Philippines Corp. has a 2024 deadline to produce the Vios small car in the agreed quantities while Mitsubishi Motors Philippines Corp. has a 2023 deadline for its Mirage model. — Revin Mikhael D. Ochave

GOCC September subsidies rise by 28%, led by NHA

PHILSTAR FILE PHOTO

SUBSIDIES extended to government-owned companies grew 28% year on year to P9.16 billion in September, with the National Housing Authority (NHA) the top recipient, the Bureau of the Treasury (BTr) said.

The BTr said government-owned and -controlled corporations (GOCCs) subsidies declined compared to the P42.35 billion seen in August, when P30.61 billion was given to the leading recipient, PhilHealth.

The NHA was given P3.059 billion in September, up 2.24% from a month earlier. It did not receive subsidies in September 2020.

This was followed by the Philippine Crop Insurance Corp., which received P2.24 billion, more than six times last year’s figure. It did not receive subsidies in August.

Other top recipients include the National Irrigation Administration (NIA) at P2.198 billion, the Bases Conversion Development Authority (BCDA) at P735 million, the Philippine Heart Center (PHC) at P147 million, the Civil Aviation Authority of the Philippines (CAAP) at P127 million, and the National Kidney and Transplant Institute (NKTI) at P107 million.

Subsidies are granted to GOCCs to cover operational expenses not supported by their revenue.

Meanwhile, GOCCs that did not receive budget support were the Cagayan Economic Zone Authority, the Development Academy of the Philippines, the Philippine Health Insurance Corp. (PhilHealth), the Philippine Postal Corp., the Subic Bay Metropolitan Authority, the Small Business Corp., the Local Water Utilities Administration, the National Electrification Administration, the National Food Authority, National Power Corp., Philippine National Railways, and the National Home Mortgage Finance Corp.

Total subsidies in the nine months to September declined 8.12% to P145.86 billion, bringing overall subsidies to 98.45% of the P148.2 billion budgeted for 2021.

A total of P76.06 billion went to support PhilHealth’s operations in the year to date, followed by the P27.81 billion granted to NIA along with P14.83 billion to NHA. — Jenina P. Ibañez

Gov’t urged to scale up digitization assistance for MSMEs

BW FILE PHOTO

A HOUSE legislator has asked the government, especially the Department of Trade and Industry (DTI), to provide more assistance to micro, small, and medium enterprises (MSMEs) to help them transition to a more digital economy after the pandemic.

Camarines Sur Rep. Luis Raymund F. Villafuerte, Jr. said adopting digital business models can help MSMEs recover from the losses they incurred during the public health crisis.

“Our MSMEs will be left behind if they cannot effectively transition to the digital economy, more so now that the trend is moving towards online transactions,” he said in a statement.

He cited data a report commissioned by Google Philippines estimating that digital transformation can create up to P5 trillion in annual economic value and make the economy more resilient.

A DTI survey conducted in September indicated that 73% of MSMEs require capacity-building to digitize their operations.

Mr. Villafuerte also touted a bill that will help facilitate digitization efforts, such as House Bill 6924 or the proposed Bangko sa Baryo Act and House Bill 1248, which was substituted for House Bill 6927, or the proposed E-Government Act.

Both of the bills have been approved by the House with counterpart bills at the Senate currently at committee level.

Mr. Villafuerte also filed House Bill 7189 or the proposed Outside Class Learning and Digital Education Act, which seeks to develop the basic education curriculum to integrate other modes of learning such as distance learning.  

The measure is pending at the House Committee on Basic Education and Culture. — Russell Louis C. Ku

Dispute over indigenous consent flagged in Apayao hydro project

A HYDROELECTRIC project in Apayao province that could generate up to 150 megawatts has become the subject of a dispute on whether consent was properly obtained from the area’s indigenous people (IP), Senator Leila Norma Eulalia Josefa M. de Lima said.

“We received reports that the (indigenous people) were not being heard and that their consent was allegedly secured through persons whom they claim do not represent them,” according to Ms. De Lima, who chairs the Senate Committee on Social Justice, Welfare and Rural Development, in a statement Saturday.

“To complicate matters, their leaders are being intimidated and red-tagged for voicing out their rights and concerns,” she added.

Projects on ancestral domain are required by law to obtain the IPs provide free, prior and informed consent.

The hydropower project was approved by the National Commission on Indigenous People (NCIP) in late September after consultation with IPs was deemed adequate. The NCIP, sitting en banc, granted Pan Pacific Renewable Power Philippines Corp. a certificate of precondition to develop the hydropower plant in August.

The Apayao indigenous people, known as the Isnags or Isnegs, “represent the IP group that stands the most to lose in these projects,” Ms. De Lima said. “They inhabit the proposed project location and this project dispossess them of their source of food, water, livelihood, and culture.”

“It is understandable that they be given the widest possible latitude in voicing out their objections and concerns,” she added.

She urged the government to ensure the protection of the IPs’ human rights and welfare. — Alyssa Nicole O. Tan

Building a future-fit board

(Second of two parts)

Businesses continue to explore new ways of working, further spurred on by the pandemic and supported by technology. However, to maintain momentum, boards will need to reimagine their roles to ensure they remain relevant, adaptive and responsive to the needs of this transformative age. Future-fit boards are diverse by nature, inclusive, transparent, and responsive, with the ability to navigate the unexpected and innovate in their oversight of human capital to drive long-term value.

As discussed in an EY article, Setting the pace or keeping up — is your board future-fit?, there are six key areas of action boards must consider for future fitness. In the first part of this two-part article, we discussed how boards will need to revitalize board composition and dynamics, gather insights from fresh perspectives, and increase focus on the long term. In this second part, we discuss how boards must align and communicate purpose with action, align and monitor culture, and enhance risk and compliance oversight.

ALIGN AND COMMUNICATE PURPOSE WITH ACTION
Based on an EY survey, 80% of CEOs around the world agree that public opinion will become as important to companies as their investors in the next five to 10 years. At the same time, surveys also indicate that 76% of the general global population feels that companies are capable of increasing profits and improving the social and economic conditions of the communities where they operate at the same time.

It is interesting to note what global CEO respondents identified as the most significant factors constraining them from being more involved in solving global challenges: board attitudes, composition, skills and leadership. In fact, these factors topped the list for more than half of the CEOs in the survey, surpassing regulation, investors and compensation. This suggests that if it were not for board direction, these CEOs felt they would be more vocal in addressing social issues. This is where future-fit boards can push the idea of their organizations’ purpose, a reason for being and operating that goes beyond making profit, as an essential part of strategy.

By articulating purpose with clarity, companies provide their people an achievable vision that they can contribute to, but this purpose must clearly state who the organization aims to benefit apart from its shareholders, as well as how it will do so. Although purpose alone does not replace strategy, it declares the “why” and intensifies the will behind it. It is also important to impart a clear, mutual understanding of the division of roles for external communications as well as plans for appropriate responses in the event of a crisis. Such crises can range from fraud, cyber-attacks, or environmental destruction. The increased scrutiny from 24-hour news cycles and how easily information can now spread dictates that integrity, clarity and timely responses are imperative for future-fit boards.

However, clarity of purpose is not enough. Future-fit boards need to recognize that companies will fail if they do not align their communicated purpose with action, which is especially relevant to maintaining trust with stakeholders. An EY global survey of CEOs found that a key gap standing in the way of transformation is the “say-do” gap, where action does not match intention. This indicates that, in addition to clearly stating its purpose, an organization’s leadership needs to show their customers and people that they “walk the walk” and not just “talk the talk.” By their actions they can demonstrate their will to follow through on their stated purpose, thus inspiring the buy-in and earning the trust of their stakeholders. Therefore, the future-fit board needs to ensure that purpose both informs strategy and permeates all aspects of operations.

Boards will need to ask themselves how accurately the public understands what their business does, and how their organization contributes to both the economy and society. They have to assess whether they are constraining management from contributing to solutions for global challenges, and whether they are engaging with stakeholders, such as employees, on the most important and pressing issues. In addition, boards must determine their readiness and ability to respond to a crisis, and the assurance that they can stand by their purpose and values.

ALIGN AND MONITOR CULTURE
Culture is a strategic asset, and in the war for talent, culture is a key intangible asset that needs to be protected. Emerging technologies are changing the workplace and impacting culture as well. Both investors and regulators have an interest in how companies leverage talent culture and strategy to enhance viability and accelerate long-term success. How the culture of a company is aligned with long-term strategy can change over time, especially in this transformative age, where strategies must adapt to face new challenges.

Future-fit boards will need to align their long-term strategy with a clear vision of their corporate culture and empower management to embed said culture throughout the company. Monitoring the alignment of culture with strategy and the impact of culture on corporate engagement needs to be conducted using non-traditional metrics, such as employee review sites, turnover rates, exit interview data, training effectiveness, incentive schemes and social media impact. Future-fit boards should encourage management use of big data as well, understanding what behaviors drive performance even when performance is high.

It takes resources and time to drive any cultural shifts. Boards therefore need to ask themselves how effectively they can oversee shifts in culture to build a future-focused workforce that has the skills and resolve to face future challenges. They will need to assess how creative they are in their use of data to build culture, and how clearly they communicate this culture to drive strategy.

ENHANCE RISK AND COMPLIANCE OVERSIGHT
Future-fit boards need to focus on the evolving world of reporting, monitoring and compliance technologies — and the cultural and investment shifts required to enable them. Boards need to employ a pragmatic approach to horizon scanning, gathering external insights and deploying monitoring mechanisms. They also need a broader perspective about indirect and emerging risks and consider deploying automation to monitor such risks and benchmark them against Key Risk Indicator (KRI) tolerance thresholds.

One necessary shift will be to develop new competencies for finance, compliance, and risk professionals, boards and audit committees. As an example, making use of technologies and new sources of data will require strong knowledge of legal frameworks for external data hosting, external and internal data protection risks, and audit procedures across different platforms.

Boards must ask themselves if they are combining smart technology with rich data to power their compliance and risk oversight, and determine what new competencies and skills are necessary at the board and management levels to maximize their data analytics tools. Moreover, they need to treat data as a strategic asset, and ensure that data governance risks are encompassed in board-level risk assessments.

SETTING THE PACE FOR A FUTURE-PROOF BOARD
Boards can seize the future by reshaping their performance and reinventing themselves, aligning values and culture as necessary and re-energizing their risk and compliance mechanisms. By gathering external perspectives, embracing diversity and shedding light on risks and opportunities, they can enhance their decision-making and gain deeper insights to generate long-term value.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

 

Leonardo J. Matignas is a business consulting partner of SGV & Co. and the EY ASEAN risk management leader.

It’s Not Easy Being Green: Balancing energy security and decarbonization for an emerging economy

MACROVECTOR-FREEPIK

It is not often that we can take solace as a lower middle-income country, as we move a few paces behind the developed world’s progress. However, as I sit back and watch the 2021 global energy crisis unfold, I take comfort in knowing that being behind the curve also means having the opportunity to learn from experiences of those ahead of us.

By all accounts, the crisis is a product of many converging factors, resulting in a perfect storm of power shortages and high power prices. In Europe, the closure of coal and nuclear power plants, an unusually low wind season, drier weather conditions, high commodity prices due to supply shortages, and a post-COVID bounce back in economic activity and energy demand seem to all play a role. In Brazil, their worst drought in over 90 years is drying up reservoirs and threatening energy supply across the country. In China, coming from a cold winter drawing down energy stockpiles, heavy rains and floods in mid-year closing down coal mines, local environmental regulations, and high commodity prices seem to be the main culprits. On top of that, colder-than-normal weather is now adding to winter demand as people heat their homes, while ice also wreaks havoc on grid infrastructure.

Now, is there a thread that pulls these contributing factors together? And what implications does it have for our policy decision making in the Philippines, if any? I would like to focus on the energy policy directions that contributed to the situation, so that we in the Philippines can learn and we can chart a better path towards energy security and decarbonization.

I would posit the view that much of the 2021 energy crisis is a result of the choices that many countries have made in the process of decarbonizing their energy systems. And to understand the choices, it is instructive to look at the political climate and how it is responding to the challenges posed by a rapidly changing Earth climate.

Politics responds to social pressure. And with energy, the societal discourse around climate change has been driven by extreme points of views — the climate deniers on the right and the climate alarmists on the left. This has resulted in a reductive discourse that seeds in the uninformed person’s mind that we only have two choices. Either we don’t believe in climate change and stick to our current hydrocarbon-based energy system or we do believe in climate change and therefore must dismantle our current system and invest in electrification and renewables. This conversation does not appreciate the complexity of the problem and it is dangerous because it dismisses solutions that we will need that may not fit neatly into the two boxes at the extremes.

This global conversation and the political policymaking that responds to it today signal to markets that we must invest in renewables and very little else. We see companies in all energy sectors pivot from coal and oil and gas to varying degrees and under different timelines. On the face of it, this may sound like good news for those worried about climate change. However, if you also worry about your ability to earn a living, your ability to support your families, and our ability as a society to move up the development curve towards a more prosperous future, we may want to take a step back and consider the cost of this transition pathway and who should bear it.

Germany provides for an instructive case study on the costs of a transition that takes a renewable at-all-cost and at full-speed approach. In 2010, Germany embarked on a program called Energiewende to decommission their nuclear and coal plants and build renewables in their place. They did this through a combination of subsidies and incentives. This has helped them increase the mix of low carbon (renewables and nuclear power) electricity consumption from around 40% to 56% and to reduce GHGs (greenhouse gasses) from energy by 22% in a 10-year period. This transition however has cost them at least 160 billion euros over the last five years alone and is largely cited as the reason why electricity costs to households have increased 25% from Euro 0.24/kWh to 0.30/kWh over the last 10 years.  Mind you, this is despite Germany being connected to the rest of the European grid, and thus having the convenient and cheap way of managing intermittency that characterizes new solar and wind power, e.g., they feed off the French nuclear power well, et al. when domestic power production is low or demand is high, and export surplus power when their renewable energy sources produce too much or demand is low.

Germany and other first-mover markets have subsidized the rest of the world for a portion of the technology costs of the transition. We can expect it to be less expensive moving forward. However, we should look at how the math adds up and ask the question, is that the best pathway forward for the Philippines?

Complicating the matter further is the question “who should bear the costs of the transition?” Climate equity or justice, which your author will use interchangeably in this article, is a concept that developed to acknowledge and address the inequities involved in tackling the climate crisis. It acknowledges that we all have varying levels of historical responsibility for the current stock of GHGs globally. It highlights that each community, each country has a different capacity and potential to mitigate climate change. Lastly, it points out that each community and country are affected to varying degrees by climate change and need varying levels of adaptation.

The Philippines contributes 0.3% of global GHG emissions today (and a lower share of the historical stock), which is a drop in the proverbial bucket. As a share of the world population, the Philippines is three times this number. To illustrate this further, our per capita carbon footprint is 1.98 tons per capita which is a tiny fraction of that of industrialized countries, with the US emitting 15.52 tons per capita, Germany at 9.44, and China at 7.38.

Arguably, we have lower potential and capacity to mitigate the crisis, given the current technical and commercial limitations to access our renewable energy resources, the relatively low-income levels of our people, our lack of basic R&D infrastructure, and other factors. A key consideration is intermittency of new solar and wind. Given the current state of technology and cost of battery storage, only fossil fuels can provide the Philippine base load capacity needed to drive industry. Especially required now as we try to recover from this pandemic — we need secure and affordable power to attract investment and quality jobs to lift the quarter of our people who are jobless and in absolute poverty.

Finally, we are expected to be hard hit by adverse effects of climate change and therefore will need to invest considerably in adapting to what is a global crisis that we alone cannot solve.

All of this points to the conclusion that we should bear considerably less of the cost of the transition than other countries. To his credit, Finance Secretary Carlos Dominguez III has recently publicly taken developed countries to task on this matter. Ultimately, we all share a common goal but our responsibilities will vary. Let’s learn from the experiences in the developed world and avoid quick-fix pathways and craft an energy transition with the Filipino people in mind and that the Filipino people can afford.

Our power regulators, financial regulators, and other public stewards should be mindful of the tradeoffs and high stakes in climate-related decisions. We all dislike coal and other carbon intensive industries, but we should dislike seeing our people in abject poverty even more.

 

Romeo L. Bernardo is GlobalSource Partners Philippine advisor. He served as finance undersecretary in the administrations of Corazon Aquino and Fidel Ramos. He is an independent director in a leading local power generation and distribution company.

romeo.lopez.bernardo@gmail.com

1...5,9555,9565,957...12,938Page 5,956 of 12,938
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube