Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 6101

Work on China-funded railway to start in March

By Arjay L. Balinbin, Senior Reporter

THE GOVERNMENT is aiming to start the construction of a China-funded rail line from Calamba, Laguna to Daraga, Albay by March next year, the Transportation department said.

The P142.48-billion design-and-build contract of the railway project, also known as the Banlic (Calamba)-Daraga segment of the PNR South long-haul project, is targeted to be awarded in October, the office of Transportation Undersecretary for Railways Timothy John R. Batan said in a statement sent to BusinessWorld on Aug. 26.

The Transportation department said the government of the People’s Republic of China has short-listed three bidders for the contract: China Railway Group Ltd. and China Railway Number 3 Engineering Co., Ltd. & China Railway Engineering Consulting Group Consortium Ltd. Joint Venture; China Road and Bridge Corp.; and Power Construction Corp. of China, Ltd.

Bid documents posted on the official website of the department showed that the 380-kilometer project involves the construction of 23 stations and a depot.

The partial operability segment is from San Pablo, Laguna to Pagbilao, Quezon. It is expected to start operations in the second quarter of 2022.

The full operation of the PNR project is slated for 2025.

In its invitation to bid, the Transportation department said completion of the construction works is required within 36 months.

Bidders should have completed a contract similar to the project within the last 20 years, it added.

“Bidding will be conducted through Limited Competitive Bidding procedures using non-discretionary ‘pass/fail’ criterion,” it added.

Apart from this PNR project, the other railway projects funded by China’s official development assistance are the P81.69-billion Mindanao Railway Project Phase 1 and the P50.03-billion Subic Clark Railway.

Tax effort improves in first six months

THE SHARE of tax collections in the country’s economic output improved to 14.74% in the first half but still below the pre-crisis level, the Department of Finance (DoF) said on Sunday.

In its latest economic bulletin, the DoF said the first semester tax effort, which is the share of tax collections to gross domestic product (GDP), went up by half of a percentage point from 14.19% in the first half of 2020.

However, this is still lower than the pre-pandemic level of 14.86% in the first semester of 2019.

“Tax collections improved partly due to tax reforms which include legislative measures and digitalization of revenue collections’ operations,” the agency said.

The P1.034-trillion taxes collected by the Bureau of Internal Revenue (BIR) between January and June was equivalent to 11.32% of GDP, up from its 11.15% tax effort in the same period last year.

The Bureau of Customs’ tax take of P302.74 billion contributed 3.31% to the overall economic output, higher than 2.95% a year ago.

The country’s two main collection offices saw revenues increase from year-ago levels by 8.11% and 11%, respectively, as economic activity picked up.

Other agencies also reported slightly higher tax effort at 0.11% in the first half from 0.1% the year prior.

Despite this, however, the share of overall state revenues to GDP still declined to 16.35% last semester from 16.94% a year ago due to lower non-tax revenues.

Revenues generated via other non-tax sources slid by 38% year on year to P147 billion during the period. This is equivalent to 1.61% of total economic output, down from 2.75% a year ago.

With a higher expenditure effort at 24.41%, the DoF said the government’s budget deficit widened to 7.86% of GDP in the first half from 6.53% in the same six-month period last year.

Economic managers capped the fiscal deficit at 9.3% of GDP by year’s end.

The DoF said the country should continue adopting fiscal reforms to sustain the upward trend of its tax effort, especially the remaining tax bills pending in Congress such as the proposed Real Property Valuation and Assessment Reform Act and the Passive Income and Financial Intermediary Taxation Act.

“Due to fiscal reforms, the country was able to fund the unprecedented fiscal requirements imposed by the pandemic and, at the same time, protect its strong macroeconomic fundamentals,” it added. — Beatrice M. Laforga

Rates of T-bills, T-bonds likely to move sideways on Fed bets

BW FILE PHOTO
THE BUREAU of the Treasury is looking to raise P250 billion from the domestic market in September. — BW FILE PHOTO

RATES OF government securities on offer this week may drop as the market waits for clearer hints from the US central bank on their plan to taper their bond-buying program.

The Bureau of the Treasury (BTr) is looking to raise P15 billion via the Treasury bills (T-bills) it will auction off on Tuesday, or P5 billion each in 91-, 182- and 364-day debt papers.

On Wednesday, the BTr will offer P35 billion in reissued five-year Treasury bonds (T-bonds) with a remaining life of four years and seven months.

The BTr moved the auction schedules as financial markets are closed today, Aug. 30, in observance of National Heroes Day.

Two bond traders said the average rates of the T-bills could move sideways from their week-ago levels amid ample demand for short-term debt.

Meanwhile, the first trader said the five-year T-bond’s average yield could range from 2.65-2.8% on Wednesday. The second trader gave a narrower forecast band of 2.75-2.85%.

The traders said the market will take their cue from the US Federal Chief Jerome H. Powell’s speech at the US central bank’s Jackson Hole symposium on Friday.

Mr. Powell said there has been clear progress toward maximum employment and that he was of the view that if the US economy evolved broadly as anticipated, “it could be appropriate to start reducing the pace of asset purchases this year,” Reuters reported.

However, he told the Fed’s annual late-August symposium in Jackson Hole, Wyoming, that the timing and pace of tapering does not involve a signal for when interest rates will begin to rise, a message the market perceived as being dovish.

“While there is no specific timetable or signals for tapering of bond purchases, investors may assume that tapering will likely not happen this year and that may drive the demand for notes at the belly of the curve,” the first trader said.

The BTr last week borrowed P15 billion as planned via its auction of T-bills as total tenders hit P50.867 billion.

Broken down, it raised the programmed P5 billion via the 91-day debt papers at an average rate of 1.077%, slightly higher than the 1.066% seen on Aug. 16.

The government also borrowed P5 billion as planned via the 182-day T-bills. The six-month debt was quoted at an average rate of 1.408%, inching up from the week-ago level of 1.407%.

Lastly, the Treasury made a full P5-billion award of the 364-day papers it offered as the tenor’s average rate eased to 1.612% from 1.617% the previous week.

Meanwhile, the last time the BTr offered the five-year bonds on the auction block on Wednesday was on May 6, when it made a full P35-billion award out of P75.716 billion in bids.

The papers fetched an average rate of 3.295% at that auction, lower than the 3.3% coupon quoted for the bonds when they were first offered on April 6.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 1.141%, 1.442% and 1.632%, respectively, while the five-year tenor ended at 2.965%, based on the PHL Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

The Treasury is looking to raise P250 billion from the local market in September: P75 billion via weekly offers of T-bills and P175 billion from weekly auctions of T-bonds.

The government wants to borrow P3 trillion from domestic and external sources this year to help fund a budget deficit seen to hit 9.3% of gross domestic product. — B.M. Laforga with Reuters

Malaya plant’s unit eyed for power reserves

By Angelica Y. Yang, Reporter

THE new owner of the 650-megawatt (MW) Malaya Thermal Power Plant (MTPP) aims to secure an agreement with the National Grid Corp. of the Philippines (NGCP) that will allow the facility’s second unit to provide reserve power to the Luzon grid.

“For now, Unit 2 is targeted for ancillary services… We are applying as an ancillary services plant. As new private owners, we need to work on the transfer of all operating permits and secure an agreement with NGCP. We will be doing that [along with] the repair works,” Fort Pilar Energy, Inc. Chief Executive Officer Joseph Omar A. Castillo told BusinessWorld on Viber last week.

Fort Pilar Energy’s subsidiary, Belgrove Power Corp., completed the purchase of MTPP and its underlying land in Pililla, Rizal last week, according to state-run Power Sector Assets and Liabilities Management Corp. (PSALM).

“Assuming we secure [the] ASPA (ancillary services procurement agreement), we should operate Unit 2 by January 2022,” Mr. Castillo added.

PSALM on Aug. 25 said Belgrove paid a total of around P4.19 billion for the plant and the underlying land. Broken down, the purchase price of the assets totaled about P3.12 billion, while payment for MTPP’s remaining fuel inventory reached P1.06 million.

MTPP has two units: 300-MW Unit 1 and 350-MW Unit 2.

At the time of the plant’s turnover to Belgrove, both of the units were on outage, according to Mr. Castillo, as the first unit housed a damaged turbine, and the second unit had a damaged air pre-heater.

“For Unit 1, we will conduct a feasibility study first [before doing any repair works]… We are prioritizing Unit 2 for immediate repair. Our timeline for bringing back Unit 2 online is 12 weeks,” the Fort Pilar Energy executive said.

Unit 2 was built in 1978 and its last overhaul was done more than 20 years ago. Mr. Castillo said the plant will be undergoing overhaul works and preventive maintenance on all systems used in this unit.

“Unit 2 should be ready for testing and commissioning by November 30,” he said.

Earlier, Mr. Castillo said that once MTPP is repaired, it will be able to “supply electricity to the Luzon grid and help ensure sufficient electricity supply in anticipation of the upcoming 2022 national elections.”

The Department of Energy previously said that PSALM would pursue a negotiated sale for the plant, citing high maintenance costs and following years of failed auctions. It added that PSALM had shelled out an average of P1.2 billion a year to maintain the thermal facility from 2010 to 2019.

In a statement issued last week, PSALM’s President and Chief Executive Officer Irene Joy Besido-Garcia described the sale and turnover of MTPP to Belgrove as a “major milestone” since the state-run entity had been trying to privatize the asset for years.

“The amount of P4.19 million will be used by PSALM to settle the remaining financial obligations that PSALM absorbed from the National Power Corp.,” she said.

How to hold a wedding in a pandemic

PHOTO COURTESY O F TEDDY MANUEL

WITH the capital and its nearby provinces under Modified Enhanced Community Quarantine until Sept. 7, and with continuing uncertainty over whether there will be further hard lockdowns in the future, it’s getting harder to celebrate anything. Still, finding true love and binding it with a ceremony is always a cause for celebration, despite restrictions on physical gatherings. So, Themes & Motifs, an events planning company specializing in weddings, gave tips to make online celebrations special.

On Aug. 28, Sharon Fabian, Themes & Motifs managing director, together with Ronna Bonifacio, editor-in-chief of the events company’s magazine Inspirations.ph, presented “Lockdown Love: How to Give Your Online Guests a Special Wedding Experience” over Facebook Live.

“It’s as if they feel that they are there with you,” said Ms. Bonifacio, citing the goal of a successful online celebration.

Here were some of their tips:

• CREATE A FACEBOOK GROUP AND CONTENT PLAN

“I know couples have used Facebook Groups even before the rise of intimate weddings,” said Ms. Bonifacio, it is particularly useful nowadays. Here, one can post wedding countdowns that have information about the couple, announcements, dressing guidelines, and other information. One can also post videos and photos, which she noted, “are things we normally have in the reception.” Ms. Fabian said meanwhile, “This can be your community and support group through this difficult time,” with Ms. Bonifacio adding that, “It’s easier for us to create a Facebook group than it is to create a wedding website.”

• BE OPEN TO PRE-WEDDING PARTIES

Friends and family used to throw bridal showers or stag parties, but due to pandemic restrictions, these might be going out of fashion. Ms. Bonifacio said, “Gatherings right now are not allowed, but we’ve seen so many fun Zoom bridal showers.” For these, Ms. Bonifacio says one can have an e-numan (a drinking session online), or play online or trivia games with the rest of the party.

• SEND ONLINE GUESTS BOXED MEALS OR TREATS

While online weddings don’t actually require food, Ms. Bonifacio says, “They’ll feel not just that they were there at your wedding. It’s really just a personal touch; being able to reach out and say ‘thank you so much for making time.’” One of their suggestions was Bizoom by caterer Bizu, which even has vegan offerings (as well as their classics, namely the roast beef and the salmon). Ms. Fabian added that due to the online nature of the celebrations, “You can have as many guests as you want,” citing a wedding they did recently with 170 online guests enjoying 170 packed meals (impossible in real life under IATF pandemic guidelines).

• CONSIDER PRE-RECORDING SPEECHES

Speeches from family and the bride and groom are still the norm for weddings, but both suggest that to smooth over technical glitches, and prevent program interruptions, all parties with speeches can send a recording instead.

• DON’T UNDERESTIMATE VENUE TRANSFORMATION

Because one might discount celebrating physically anyway, one might think that the traditional flowers and swags of fabric can be dispensed with. “It’s good also to invest in decor,” said Ms. Fabian. “That sets the tone for your celebration.”

She suggests having a focal point in the venue (it could be a house, or, in one of her clients’ cases, a warehouse) that can be a backdrop for the wedding reception program. — JLG

Banks told to tighten controls as carnapping cases increase

THE BANGKO SENTRAL ng Pilipinas (BSP) told banks to tighten their Know Your Customer protocols amid a rise in cases involving carnapping syndicates that acquire vehicles through these financial institutions’ credit facilities under fake identities.

Memorandum No. M-2021-047 signed by BSP Deputy Governor Chuchi G. Fonacier reminded BSP’s supervised financial institutions to strengthen their controls and follow anti-money laundering (AML) regulations to prevent these criminal activities.

It said lenders should tighten their guard via strengthening procedures such as customer identification and verification, ongoing monitoring of customers and their transactions, and suspicious transaction reporting.

The BSP also told banks to ramp up their continuing AML training programs, including those focused on controls for partners and accredited car dealers.

“Carnapping syndicates may sometimes resort to identity theft, using an actual person’s name, address, and company profile, but with a different photo. These may be prevented by reinforcing the conduct of, among others, customer identification and verification procedures as part of the customer due diligence,” the memorandum said.

The BSP memorandum mentioned common schemes done by syndicates, based on information from the Philippine National Police-Highway Patrol Group.

Among these is the rent-pawn or rent-selling scheme, where a vehicle is obtained through a rent or lease contract. The culprit, or the lessee in this case, pawns or sells the vehicles using falsified documents without the consent of the lessor or the registered owner.

Another method is the pasalo scheme, where the culprit, using fake documents, sells a vehicle to a buyer who will assume the remaining obligations for the vehicle.

There is likewise a modus operandi dubbed as “labas casa scheme,” where a person will pretend to be a buyer of a vehicle and get an auto loan from a car dealership using counterfeit papers. The perpetrators will find a buyer for the vehicle using fake documents. — LWTN

First Gen plants to run on liquid fuel when Malampaya is out

FIRST Gen Corp. said three of its natural gas-fired plants in Batangas will be running on liquid fuel in October when the Malampaya offshore gas-to-power project shuts down for maintenance works.

These facilities are the 1,000-megawatts (MW) Santa Rita, the 500-MW San Lorenzo, the 97-MW Avion plants.

The Lopez-led firm added that its other gas plant — the 420-MW San Gabriel — will be switched off during the gas field’s temporary closure from October 2 to 22 since it can only run on natural gas.

“Santa Rita and San Lorenzo will operate using liquid fuel (condensate), which will be competitively sourced and imported to ensure their continued availability and operations despite the absence of Malampaya natural gas supply,” First Gen Executive Vice-President and Chief Commercial Officer Jonathan C. Russell told BusinessWorld through the firm’s communications department via e-mail over the weekend.

“Avion will also operate using competitively sourced liquid fuel (diesel) in the absence of natural gas supply from Malampaya,” he added.

During the gas field’s temporary shutdown, the three plants will provide 1,300 MW of available capacity. Broken down, around 750 MW will come from Santa Rita; 500 MW from San Lorenzo and 50 MW from Avion.

Mr. Russell said that the firm will be conducting scheduled preventive maintenance works on one of Santa Rita’s four units, which has a capacity of about 250 MW, during Malampaya’s 20-day closure in October.

“[However], San Gabriel can only run on natural gas and, and therefore, during the Malampaya shutdown, will not be available to run during the outage period,” he said.

He said liquid fuel in the form of condensate and diesel may be more costly than gas sourced from the Malampaya field but using these “will reduce the likelihood of yellow and red alerts” that cause price spikes in the power spot market.

“The onset of these yellow and red alerts due to a significant loss in generation supply leads to WESM (wholesale electricity spot market) price spikes that can be two to three times more expensive than running power plants on condensate and diesel. The use of these alternative fuels to keep Santa Rita, San Lorenzo, and Avion available during the Malampaya shutdown is beneficial to consumers by limiting what could otherwise be larger WESM price spikes,” Mr. Russell said.

First Gen’s Santa Rita, San Lorenzo, and San Gabriel plants deliver baseload power to the grid, while Avion provides peaking power.

Both the Santa Rita and San Lorenzo facilities sell their output to distribution utility Manila Electric Co. (Meralco) under a 25-year power purchase agreement with an 83% take-or-pay “minimum energy quantity” arrangement.

Meralco Head of Utility Economics Lawrence S. Fernandez told BusinessWorld on Viber last week that during the Malampaya maintenance shutdown, the distribution utility will work with the operators of Santa Rita and San Lorenzo plants to ensure that they will continue to provide their 1,500 MW of capacity to the grid, by running on liquid fuel.

Santa Rita is operated by First Gas Power Corp. while San Lorenzo is operated by FGP Corp.

Mr. Fernandez said Meralco also sources a portion of its power for distribution from the 1,200-MW Ilijan natural gas plant in Batangas, which is operated by South Premiere Power Corp. (SPPC), a subsidiary of SMC Global Power Holdings Corp.

“Meanwhile, for South Premiere-Ilijan, Meralco’s PSA (power supply agreement) with them has no outage allowance, so that Ilijan will continue to supply Meralco at contract rates during the Malampaya shutdown,” he said.

Asked about what consumers can expect come November, he said that their monthly power bills would depend on the power supply situation during the period.

BusinessWorld reached out to San Miguel Corp., which owns SMC Global Power, on how SPPC is preparing the Ilijan plant for Malampaya’s 20-day shutdown but has not received a reply from the firm as of deadline time.

“While past maintenance shutdowns have led to adjustments in the generation charge, a lot would still depend on the generation supply situation. If levels of supply and reserves remain comfortable, this will help mitigate the rate impact from the Malampaya maintenance,” Mr. Fernandez said.

According to the latest forecast of the Independent Electricity Market Operator of the Philippines, the Luzon and Visayas grids will have an average supply margin of 3,875 MW during the October billing month.

Average supply in October will reach 15,038 MW, while average demand will be 11,162 MW, the market operator said in a briefing on Aug. 20. — Angelica Y. Yang

Chanel buys up more jasmine fields to safeguard famous No. 5

PHOTO FROM CHANEL.COM/

PEGOMAS, France —  Wary of disappearing flower crops used in its best-selling perfumes, fashion and beauty firm Chanel has bought up more land in southern France to secure its supplies of jasmine and other varieties, harvested by hand in a delicate annual ritual.

The luxury group said it had bought up an extra 10 hectares (100,000 square meters) of land, adding to the 20 hectares it already exploits in partnership with a local family near the town of Grasse, known for its surrounding flower fields.

On a sunny late August morning before the heat reached a peak in nearby Pegomas, dozens of workers were busy with this year’s jasmine harvest, the key ingredient for Chanel’s 100-year-old No. 5 perfume, created by late designer Gabrielle “Coco” Chanel.

Chanel struck a deal with the Mul family in the late 1980s to anchor its production of five flowers in the region. Some local producers began selling their land at the time, drawn in part by property deals in the region close to Nice and the French Riviera.

“There was a time when there was a threat because jasmine production was starting to move to other countries,” said Olivier Polge, who followed in his father’s footsteps to become Chanel’s head perfumer in 2013.

The jasmine grown in Grasse has a specific scent. The region became a flower and fragrance hub in the 17th century, when local leather tanners began to perfume their wares.

Fabrice Bianchi, who runs the Mul family’s production, said operations were not overly affected by the coronavirus disease 2019 (COVID-19) pandemic, with pickers able to work outside. The virus causes some sufferers to lose their sense of taste and smell —  a particular problem for perfumers, known as “noses” in the business.

“For sure, it was a pretty peculiar year,” Mr. Polge told Reuters. “But in many ways it was the same for me as for everyone, even though I’m a nose —  we all tried not to get it.”  —  Reuters

Marvel at the shield

The trunk space on the G4 stays at a capacious 450 liters. — PHOTO FROM MITSUBISHI MOTORS PHILIPPINES CORP.

The new Mitsubishi Mirage G4 gets in on the brand’s Dynamic Shield fun — and more

THE IMPOSITION of the enhanced community quarantine following an upsurge of COVID-19 cases pushed the media launch from Aug. 12 to Aug. 26, and the public reveal to last Saturday. But surely, that postponement merely served to heighten the excitement over the local unveiling (albeit digitally) of the refreshed Mirage G4 — one of the best-sellers of Mitsubishi Motors Philippines Corp. (MMPC).

The current (sixth) generation of the storied Mirage nameplate has not only proven popular (with an excess of 92,000 units sold) here since its 2013 launch, but additionally plays an important role in helping spur the local economy. In 2017, MMPC commenced producing the Mirage G4 locally. The company reported in a release that “more than 54,000 cars” have rolled out of its 23-hectare Sta. Rosa, Laguna plant since.

It is significant to note that MMPC is one of only two car makers (the other being Toyota Motor Philippines) participating in the government’s Comprehensive Automotive Resurgence Strategy (CARS) seeking to spur the growth of the local manufacturing industry. Among the salient points of the commitment is the production of a minimum of 200,000 vehicles over six years (ending in 2023 for MMPC). The program is envisioned to create “direct and indirect jobs in auto manufacturing, parts making, distribution, and ancillary services,” as well as serve as an impetus for corollary industries.

Of course, the pandemic, which has dragged on for a year and a half now, has negatively impacted businesses and industries — including all things automotive. The Inter-Agency Committee (IAC) on Automotive Industry Development is said to be lobbying to extend CARS for another three years, without prejudice to the original 200,000 unit output each for the two manufacturers. MMPC enrolled the Mirage under the program.

A recent BusinessWorld article penned by Jenina P. Ibañez reported that the two car companies “have manufactured just over a third (or a total of about 147,000) of their target as of May,” according to the Department of Trade and Industry. Again, Mitsubishi presently has until 2023 to meet its Mirage production target.

Replying to a question from “Velocity” during the Mirage G4 media launch, MMPC Vice-President for Planning and Development Xavier Eyadan said that the company “cannot disclose yet the current situation with CARS,” but conceded that the pandemic “had an effect on (the company’s) performance.” He added, “However, we are continuously (asserting) our commitment to reviving our auto industry.”

Although MMPC officials were reluctant to share sales projections, the unveiling of the new Mirage G4 is certainly expected to boost sales in this affordable segment.

The most significant update to the G4 was undoubtedly the one done to its front fascia. It now sports the familiar Dynamic Shield — better aligning it with the rest of the Mitsubishi portfolio. Mitsubishi Motors Corp. Head of Design Division Seiji Watanabe said that this imbues a wide and bold character to the vehicle, “with a certain coolness.” A sense of greater width is also lent by the arrangement of lamps and a larger grille — also giving it what he called a “game face.” An edge-to-edge rear bumper also serves to enhance the illusion of width, as well as facilitate airflow in aid of aerodynamics.

Mr. Watanabe asserted that the Dynamic Shield “unifies the Mitsubishi design identity across the lineup.” The grille is fringed by new sporty headlights; the taillights are also new, as are 15-inch alloy wheels and foglamps.

The G4 instrumentation has been made more legible, and receives a carbon fiber motif. The fabric-covered seats, on the other hand, feature dynamic geometric shapes. The trunk still boasts a 450-liter capacity.

Powering the vehicle is the familiar 1.2-liter L MIVEC engine mated to an INVECS-III CVT transmission for “dependable power and exceptional fuel efficiency.” The top-spec GLS gets “convenient features such as keyless operation system, push start button, electric power steering, auto climate control, audio mounted controls and seven-inch Smart Phone Link Display Audio (SDA) touchscreen multimedia system.” Its infotainment system is now Apple CarPlay- and Android Auto-compatible.

Anti-lock brakes with electronic brakeforce distribution, reverse camera, and foglamps are standard fitments on the GLS CVT trim. Across all three variants, the Mirage G4 gets a Reinforced Impact Safety Evolution (RISE) body, dual SRS air bags, and Isofix tethers, and automatic-off headlights.

Still assembled at Santa Rosa, the new Mirage G4 comes in the following colors: Red Metallic (for GLX CVT and GLS variants), Titanium Gray Metallic, Cool Silver Metallic, and White Gold (for advance order of GLX CVT and GLS CVT variants only).

The new Mitsubishi Mirage G4 is priced as follows: P769,000 (GLX MT), P819,000 (GLX CVT), and P899,000 (GLS CVT), and is available in all 57 MMPC dealerships nationwide. Buyers until Nov. 30 get two years/25,000-km free preventive maintenance service. For more information, visit www.mitsubishi-motors.ph or contact a dealership.

MinDA to aid LGUs in acquiring solar-powered water systems

THE MINDANAO Development Authority (MinDA) said it will help local government units (LGUs) adopt solar-powered water systems for drinking and irrigation.

MinDA Chairman Emmanuel F. Piñol said each solar-powered water generation system unit can provide irrigation water for up to 100 hectares of farm area, depending on the water source, and also for drinking.  

“It saves farmers from the high cost of diesel fuel which they need for their water pumps. Using solar panels to power water drawing engines, the solar-powered irrigation system could source water from deep rivers, creeks, water impounding areas and even wells,” Mr. Piñol said in a social media post over the weekend.

According to Mr. Piñol, MinDA will help Mindanao LGUs develop schemes to recover the initial investment in solar-powered irrigation and solar-powered water systems.

He added that MinDA will seek the help of the Development Bank of the Philippines to offer low-interest loans to LGUs. 

“Since it relies on solar power, the solar-powered irrigation system is ideal for dry-season planting, including periods of drought when even the regular irrigation systems of the National Irrigation Administration (NIA) cannot provide water,” Mr. Piñol said.  

“The Mindanao Water Supply Program… aims to provide every community in Mindanao with safe potable water and irrigation water to improve agricultural production,” he added.

Mr. Piñol said solar-powered irrigation system will cost about P120,000 per hectare against P450,000 in NIA systems. Solar-powered systems can be built in less than six months and the coverage area can be expanded by constructing a bigger reservoir and laying additional pipe.

He added that LGUs should fund their own solar-powered irrigation and water systems with their higher share of internal revenue allotment starting next year due to the Supreme Court Mandanas ruling. — Revin Mikhael D. Ochave

ECB out-doving US Fed to boost euro’s allure

JACKSON HOLE sharpened the contrast between a Federal Reserve telegraphing an end to stimulus and a dovish European Central Bank (ECB). For the euro, that means its status as a preferred funding currency just got a boost.

The discount on the overnight rate to borrow the common currency instead of dollars rose earlier this month to the most since 2020. That juiced up returns on carry trades funded by the euro, which have been some of the best performers this year.

That trend got extra legs on Friday after Federal Reserve Chairman Jerome H. Powell said it could be appropriate to start scaling back its $120-billion-a-month bond-buying program this year, though the central bank won’t be in a hurry to begin raising rates thereafter. That approach is miles ahead of the ECB, which said large-scale bond buying will continue next year, even after emergency asset purchases end.

“If the ECB was to persist in dovishness versus other central banks over the next few years, this would increase the attractiveness of the euro as a funder,” said George Saravelos, global head of FX research at Deutsche Bank in London.

EURO FUNDING
Against this backdrop, Brandywine Global Investment Management says it’s using the common currency instead of the dollar to finance purchases of emerging-market currencies. Nordea Investment Management sees it as a trend that’s bound to gain traction.

Traders are able to finance positions in higher-yielding assets using the euro at a rate of minus 0.48% overnight versus 0.09% for equivalent dollar funding, often seen as the default option for investors in the developing world.

What’s more, they can rest easy that their investments are less likely to get derailed by a sudden shift in outlook. ECB officials are still erring on the side of more stimulus even as they signaled last week that their latest shift in forward guidance doesn’t necessarily mean a longer period of low interest rates.

“We’re not using the dollar as a funding currency — it’s really the euro and the yen,” said Jack McIntyre, a Philadelphia-based money manager at Brandywine Global Investment Management, who has an underweight position in the common currency to finance purchases of emerging-market crosses.

Already this year, volatility-adjusted carry trades funded with euros delivered positive returns for 17 out of 23 emerging markets tracked by Bloomberg. The same measure for those funded by the greenback have delivered losses for 15 of them.

While a bulk of that performance can simply be explained by the euro’s weakness — it has dropped about 5% against the dollar since the beginning of the year — it also underscores the impact of the widening policy divergence across the world’s biggest central banks.

It’s a rift that’s poised to remain wide — according to market pricing — as Mr. Powell cited the US economy’s progress toward the Fed’s inflation objective, even as he indicated a careful assessment of incoming risks related to the COVID-19 delta variant.

Indeed, the discourse in financial markets is already beginning to shift away from when the Fed will start tapering its asset purchases, to how quickly they’ll wrap up the operation.

‘RELATIVE MARGIN’
“Since the Fed is sounding relatively more hawkish, it brings the relative margin of policy to the forefront,” Brandywine’s Mr. McIntyre said. He is betting that the global economy gets past the delta variant relatively unscathed, that the US continues to experience robust growth into 2022 and that China adds stimulus to its economy.

That backdrop would lead to a payoff for riskier currencies such as the Chilean peso, the Mexican peso, the Brazilian real, the Malaysian ringgit and the ruble, he said.

Traders are betting the Fed will hike interest rates 25 basis points by the beginning of 2023, while the ECB isn’t expected to increase the deposit rate until 2024.

“Short-term, this Fed-ECB divergence is quite disruptive as it contributes to tightening global monetary conditions via a stronger dollar,” said Witold Bahrke, a senior macro strategist at Nordea Investment Management.

But over the medium term, the euro should continue to “gain attraction” as a funding currency, since the ECB will stick with its ultra-easy policy, he said. — Bloomberg

CA backs SEC’s cease-and-desist order against Planpromatrix

THE Court of Appeals (CA) upheld the Securities and Exchange Commission’s (SEC) cease-and-desist order (CDO) against Planpromatrix Online Co. for its unlicensed investment solicitation activities.

“In a 17-page decision dated July 19, the CA Special 10th Division affirmed the [CDO] issued by the SEC against Planpromatrix for perpetrating fraud and causing grave injury to the investing public,” the commission said in an e-mailed statement on Friday.

The commission en banc issued the order against Planpromatrix in July 2019 after receiving complaints from the public. The commission issued an advisory against the entity in February 2018 for offering investment schemes ranging from P600 to P1,850 where an individual can apparently earn from an e-loading business, data entry job, and advertising package.

“The SEC Markets and Securities Regulation Department, Corporate Governance and Finance Department, and Company Registration and Monitoring Department issued certifications that Planpromatrix had neither a secondary license to solicit investments from the public nor the requisite registration statements,” the SEC said.

Planpromatrix filed a motion to lift the order, however, the SEC denied the motion and ordered a permanent decision via a resolution dated Nov. 11, 2019.

The entity then filed a petition for review before the CA, assailing the validity of the SEC’s CDO, resolution, and the commission’s findings against Planpromatrix.

However, in the July decision, the CA said there is “wisdom in the issuance and continuance of the CDO” against Planpromatrix.

“There can be no debate on the authority of the SEC to issue the subject CDO, provided that the conditions therefore, i.e. that fraud has been perpetrated and grave injury is likely to be caused to the public,” the CA said.

Further investigation by the Enforcement and Investor Protection Department (EIPD) with the SEC Legazpi Extension Office revealed that Planpromatrix also lacked the required business permit.

The CA also noted the implied admission made by Planpromatrix President and Chief Executive Officer George Naval for not disputing the contents of the advisory issued by the SEC in February 2018 when it met with the commission’s EIPD.

The CA also said that the commission did not violate due process for issuing the CDO, which was not final and could have been refuted with evidence.

“[T]he subject CDO was not cast in stone that its efficacy and application are beyond challenge… Petitioner had the opportunity to cause the recall of the CDO; it availed of the opportunity to cause the recall of the CDO; it availed of the opportunity; and with that, it was accorded due process,” the CA said. — Keren Concepcion G. Valmonte

1...6,1006,1016,102...12,754Page 6,101 of 12,754
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube