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Costa Rica, New Zealand meet for last World Cup place

DOHA — The last place at this year’s World Cup will be decided on Tuesday in Doha when Costa Rica faces New Zealand in their intercontinental playoff.

The match at the Ahmed bin Ali Stadium pits the fourth-placed finishers in the CONCACAF qualifying group against the top team in the Oceania confederation and the winners will play in Group E at the finals in Qatar along with Germany, Japan and Spain.

Costa Rica, looking to qualify for a third successive World Cup, reached the quarterfinals in Brazil eight years ago and having had substantially more competitive matches over the last four years will be favorites to advance.

Since the last World Cup, they have played 30 competitive games compared with five for New Zealand which have all been against low-ranked Pacific island nations.

“Costa Rica have played a lot together and have a lot of caps,” said New Zealand coach Danny Hay, whose side played Peru and Oman in warm-up matches over the last week.

“We don’t really get enough opportunity to test ourselves against top quality opposition.”

Hay admitted the behind closed doors draw with Oman on Friday was not the greatest performance by his team.

“But that said, I think everybody’s got half an eye, if not a full eye, if not two eyes on Costa Rica,” he added.

Costa Rica defender Francisco Calvo warned his side will need to be wary of complacency.

“We have to be focused for the 90 minutes, because they shoot from wherever they can. We’ll have to defend to the death and keep Chris Wood under control,” he told reporters in Doha.

Newcastle United striker Wood is the Kiwis’ key attacker.

“A good team builds on defensive strength, and usually the champion teams are the ones that concede the fewest goals. If we keep a clean sheet, I’m convinced that we’ll score a goal and qualify for the World Cup,” added Calvo.

New Zealand, who competed at the 1982 and 2010 World Cups and lost out in playoffs for the two last tournaments, have concerns over the fitness of captain Winston Reid but Hay said he expected the former West Ham United central defender to play. — Reuters

Warriors, Celtics now best-of-three for NBA title

THE feeling-out process is complete. All even at 2-2 in the National Basketball Association (NBA) Finals, the Boston Celtics and Golden State Warriors now contest a best-of-three for the championship.

Two relatively healthy teams, inspired by previous success on Golden State’s home court and refreshed from having two days off, will duel in Game 5 in San Francisco on Monday night.

“It’s the Finals,” summed up Celtics star Jayson Tatum. “It’s not going to be easy. It shouldn’t be.

“We know we both want it, and we got to go take it.”

The first four games have been about as evenly contested as they get… except the final scores.

The Warriors have outscored the Celtics by a total of just 422-421, belying the fact that no single game has been decided by fewer than 10 points.

Golden State also has slight edges in field goal percentage (44.9-44.2), offensive rebounds (40-39) and fewest turnovers (59-60), while Boston has been a touch better in free throws made (57-50) and total rebounds (171-167).

Each team has made 64 3-pointers.

Stephen Curry has a series-best 25 of the Warriors’ 64 threes, including seven in 14 attempts in a dramatic 43-point performance that drew Golden State even in a 107-97 triumph at Boston in Game 4 on Friday.

“The heart on that man is incredible,” teammate Klay Thompson gushed. “The things he does we kind of take for granted from time to time, but to go out there and put us on his back, I mean, we got to help him out (in Game 5).”

The Warriors did that the last time the clubs met in San Francisco in Game 2. Curry had 29 points, but Jordan Poole chipped in with 17 off the bench, Gary Payton II returned from a fractured elbow to make all three of his shots, and Golden State’s four other starters combined for 43 points, 21 rebounds, 12 assists and six steals in a team effort that produced a 107-88 win.

That came three nights after the Celtics, the top road team in the postseason, temporarily stole home court advantage by getting a similar type of balanced production in a 120-108 series-opening win. Al Horford (26), Jaylen Brown (24), Derrick White (21) and Marcus Smart (18) contributed 89 points to the cause on a night when Tatum struggled to reach 12.

The Celtics have gone 8-3 on the road in the postseason, outshooting their opponents 38.1% to 31.2% on 3-pointers.

The Warriors have gone 10-1 at home, hitting 40.7% of their threes as opposed to 36.3% by the visitors.

The biggest factor in determining winners and losers in the series has been rebounding.

Boston has held the upper hand on the boards 86-70 in its two wins, including 22-18 on the offensive end.

The opposite has been true in Golden State’s two wins, during which it has dominated the glass to the tune of 97-85, including 22-17 at the offensive end.

Having seen rival Curry at his best in Game 4, Tatum believes it’s his turn to play difference-maker.

“I just got to be better,” the only first-team All-NBA performer in the series insisted. “I know I can be better, so it’s not like I, myself or my team is asking me to do something I’m not capable of. They know the level and I know the level that I can play at.

“It’s not too much pressure at all. It’s kind of like my job.” — Reuters

PHL, China sign $350-M loan deal for Samal-Davao bridge

PHOTO FROM AMBASSADOR HUANG XILIAN FACEBOOK PAGE

THE PHILIPPINE government has signed a $350-million loan deal with China for the construction of a bridge linking Samal Island to mainland Mindanao in the country’s south.  

Chinese Ambassador to the Philippines Huang Xilian made the announcement on Monday through a post on his official Facebook page, saying “This project will break ground before long.”   

The 3.86-kilometer, four-lane bridge was proposed years before President Rodrigo R. Duterte was elected as the country’s chief executive. It was included in the Duterte administration’s priority infrastructure program.   

The project links Samal, a popular tourist island destination, to the President’s hometown Davao City.   

“On behalf of the Chinese side, today I exchanged with Finance Secretary (Carlos G.) Dominguez the signed Framework Agreement and Loan Agreement for the Samal Island-Davao City Connector Project,” Mr. Huang wrote.    

“The Chinese government will provide a concessional loan of approximately 350 million US dollars to the Philippine government to finance the project.” 

In January 2021, the Philippine’s Department of Public Works and Highways and China Road and Bridge Corporation (CRBC) signed a P19.32-billion design and build contract for the project, which was a prerequisite for the loan agreement application with China. — MSJ

Center for ex-Abu Sayyaf members to be built in Sulu

BANGSAMORO INFORMATION OFFICE

A FACILITY dedicated to assisting former members of the Abu Sayyaf will be built in Patikul, Sulu, a known former stronghold of the kidnap-for-ransom group. 

The P25-million “reformation center” is funded under the Bangsamoro Autonomous Region in Muslim Mindanao’s (BARMM) budget, the regional government said in a statement on Monday. 

“This facility is part of the commitment we’ve made to the (military’s) Western Mindanao Command and the local government unit of Patikul as we joined them in rebuilding the lives of Abu Sayaf Group members who returned to the fold of law,” Bangsamoro Minister for Interior and Local Government Naguib G. Sinarimbo said during the groundbreaking ceremony last Friday.

Mr. Sinarimbo, also the spokesperson of the BARMM government, said the center is envisioned as a “safe space” that will provide skills trainings as well as forums on ideological reorientation. 

“We believe that the long term solution is providing them a new (correct) perspective of the interpretation of their religious belief,” he said. 

Patikul Municipal Administrator Nasser E. Hayudini said the facility will be an important infrastructure in the reintegration of former insurgents.

“This (center) is important in terms of allowing us to strengthen our guidance of the returnees in their journey towards a new life in society and boosting their trust in government,” Mr. Hayudini said in Filipino.

Commander Benjamin G. Batara of the 1103rd Infantry Brigade based in Sulu said there are already planned interventions for the former armed fighters that could be immediately rolled out at the center.

Since 2017, the Joint Task Force Sulu has recorded 823 Abu Sayyaf returnees. — MSJ 

Senator bats for increased production, use of organic fertilizers

BSWM.DA.GOV.PH

SENATOR Cynthia A. Villar is pushing for increased production and use of organic fertilizers amid global supply problems on chemical fertilizers and to ensure healthier soil in farm areas.   

In a video message during the 71st anniversary of the Bureau of Soils and Waste Management last week, she said there are enough agricultural residues that could be used for making organic fertilizer.  

“We only need to collect and convert them into organic fertilizers or compost which can be used by our farmers,” said Ms. Villar, who chairs the Senate Agriculture, Food and Agrarian Reform Committee.  

“Most especially now that fertilizers are very expensive, and sometimes, they are not available for our farmers.”  

She added that compost materials could also be collected from residential areas.  

“It is important that we give Composting Facilities for Biodegradable Waste to our farmers and local governments in the whole country,” the senator said. 

Replacing inorganic fertilizers would also help address the 38% soil degradation in the country, she said.

“It is really important that we take care of our soil to have productive harvest and lower hunger, food insecurity in our country.” — Alyssa Nicole O. Tan 

Laudiangco stays on as Comelec spokesperson   

PHILIPPINE STAR/ MICHAEL VARCAS

THE COMMISSION on Elections (Comelec) has maintained its acting spokesperson after lawmakers bypassed the appointment of its chairman and other commissioners appointed by President Rodrigo R. Duterte.  

Acting Comelec Spokesperson John Rex C. Laudiangco will continue his duties until a new chairperson is appointed, acting Comelec Chair Socorro B. Inting said in a memo dated June 10.  

The Commission on Appointments, in the absence of a quorum on June 1, bypassed the appointments of Saidamen B. Pangarungan as Comelec chair and George Erwin M. Garcia and Aimee S. Torrefranca-Neri as commissioners.  

Lawmakers said President-elect Ferdinand R. Marcos, Jr. should be the one to appoint new heads of constitutional commissions and other government bodies, not Mr. Duterte.  

Mr. Laudiangco is the director of the Comelec law department.  

He earlier replaced Comelec Director James B. Jimenez as spokesperson, who was under investigation for his involvement in a controversy surrounding the cancellation of the supposed final round of presidential and vice-presidential debates for the May 9 elections.  

Ms. Inting was named as acting election body chief on June 2 following the vacancies left by the election officials.  

She previously served as acting Comelec chairperson from February to March after three commissioners and its chairman retired.  

Comelec has six members and one chairman. Its two divisions have three members each. Decisions issued by the two divisions are eventually appealed to the seven-member en banc.   

The election body is now left with four commissioners until Mr. Marcos Jr. appoints replacements. — John Victor D. Ordoñez 

What now for transitional justice?

RACOOL_STUDIO-FREEPIK

Transitional justice is a variety of processes and strategies where a society comes to terms with mass atrocity crimes that happened in the past, usually during armed conflict or period of authoritarian regimes.

According to Mayesha Alam (2014), it comes into a time when a state or society is in transition, “emerging out of mass political violence and socioeconomic upheaval, undertaking transitional justice initiatives can have transformative effects on the state’s political institutions, social cohesion, rule of law, and even economic viability.” For the International Center on Transitional Justice (ICTJ), transitional justice is “a response to systematic and widespread violation of human rights” and “seeks recognition for the victims and to promote possibilities for peace, reconciliation, and democracy.”

NATIONAL TRANSITIONAL JUSTICE INITIATIVES
The Philippines in 1986 was a transitional justice moment with the ouster of then President Ferdinand Marcos. Thereafter, President Corazon Aquino came out with Proclamation No. 1 where she pledged “to do justice to the numerous human rights violations” of the Marcos Martial Law regime. As such, a new constitution was crafted with one of the longest human rights provisions in the world along with the creation of the Commission on Human Rights (CHR). Other transitional justice initiatives were the establishment of the Presidential Committee on Human Rights, Office of the Ombudsman, and the Philippine Commission on Good Governance (PCGG); the passage of the Comprehensive Agrarian Reform Program (CARP); and reactivating the peace negotiations. These were just some institutional measures to advance the guarantee of non-recurrence pillar of transitional justice.

In light of the right to reparation pillar, the Philippines saw the passage of Republic Act 10368 or “An Act Providing for the Reparation and Recognition of Victims of Human Rights Violations during the Marcos Regime, Documentation of Said Violations, Appropriating Funds therefor and for Other Purposes” (“Human Rights Victims Reparation and Recognition Act of 2013”). This law created the Human Rights Victims Claims Board (HRVCB) tasked, among others, to “receive, evaluate, process and investigate applications for claims” under RA 10368. The HRVCB supposedly received around 75,000 plus applications and of which, 11,000 plus were awarded claims of human rights violations. Another institutional body created under the law was the Human Rights Violations Victims’ Memorial Commission (HRVVMC) mandated for “the establishment, restoration, preservation, and conservation of the Memorial/Museum/Library/Compendium in honor of the HRVVs during the Marcos regime.” Supposedly, a museum for this purpose would be constructed in the University of the Philippines Diliman.

For the right to truth/know pillar, there were documentation of human rights violations during Martial Law by various civil society organizations. Unfortunately, judicial mechanisms and criminal prosecution for human rights violations did not materialize. Needless to say, no one seemed to have been held accountable for these violations. And with the current political leadership configuration in the country, what can we realistically expect on the matter of transitional justice?

LESSONS FROM THE BANGSAMORO
The Bangsamoro in Mindanao can be said to have experienced armed conflict atrocities, particularly during the reign of Martial Law in the 1970s. It comes under the purview of transitional justice precisely because of atrocity crimes that happened during the armed conflict. Its transitional justice discourse falls under the context of armed conflict situations.

The concept of transitional justice was part of the Framework Agreement on the Bangsamoro (FAB) between the Government of the Philippines (GPH) and the Moro Islamic Liberation Front (MILF). Under the provision on normalization, it stated that the “Parties agreed to work out a program for transitional justice to address the legitimate grievances of the Bangsamoro people, correct historical injustices, and address human rights violations.” Of all of the peace agreements negotiated and signed, only the FAB and the Comprehensive Agreement on the Bangsamoro (CAB) specifically provided for transitional justice.

The Transitional Justice and Reconciliation Commission (TJRC) was the body borne out of the CAB under the Annex on Normalization. It was mandated by the peace panels to “undertake a study and to make recommendations with a view to promote healing and reconciliation of different communities that have been affected by the conflict.” The TJRC Report, launched in March 2016, presented their key findings and analysis on legitimate grievances, historical injustice, human rights violations, and marginalization through land dispossession. They also recommended the Dealing with the Past (DwP) framework that relates transitional justice with the rule of law, ending impunity, and conflict transformation.

The passage of the Bangsamoro Organic Law (BOL) and the establishment of a government in the Bangsamoro were also transitional justice measures. The GPH and MILF likewise have agreed on a transitional justice roadmap. Those measures that are implemented by the government itself are undertaken by the Inter-Cabinet Cluster Mechanism on Normalization (ICCMN).

At the national legislative front, we saw the filing of House Bill 4003 and Senate Bill 1913 in the 18th Congress.

WHAT NOW FOR TRANSITIONAL JUSTICE?
We cannot return to the 1986 moment but surely, we can create a new moment.

A moment that may begin with an acknowledgement and public apology of atrocities of the past. A moment that can take its cue from the Bangsamoro experience of creating a mechanism to study what are the transitional justice issues and concerns in the country. A moment that can produce a national transitional justice framework and not just piecemeal mechanisms that do not connect with one another. A moment that can produce a societal dialogue on transitional justice measures from below. A moment where a nation acknowledges its hurts and remembers its own failures.

And moment where we can transition to healing and reconciliation and be citizens that our country deserves. We must not miss the moment ever again.

 

Ma. Lourdes Veneracion-Rallonza, Ph.D. is an associate professor at the Department of Political Science, Ateneo de Manila University. She is also director of the Asia-Pacific Center for the Responsibility to Protect-Philippine Office.

mrallonza@ateneo.edu

Making the Agri-Agra Law work

JCOMP-FREEPIK

Some implementable proposals

The Agri-Agra Law has been a frustration of regulators and farmers alike. The banks who find it inconvenient to comply just opt to pay the penalties. The penalties are not even prohibitive because the Central Bank implementors themselves (they will not admit it though) are unconvinced about the efficacy of the law so they do not make it too costly to not comply. There is a not-so-obvious regulatory forbearance in that sense. The banks who comply are those that are into agricultural lending in the first place. They would have done that sort of lending with or without the Agri-Agra Law.

In short, the Agri-Agra Law does not really generate “new funds” that become available for farmers. The whys and the wherefores of non-compliance by banks is a long conversation in itself but the more useful discussion is how to make the law achieve its objectives. Much of it though has to do with the saying that “you can bring a horse to the water but you cannot make him drink.”

The relevant question therefore is how do you make banks pour money into agriculture and agrarian reform? Here are some suggestions:

1. First, forget about making banks do production loans. It is just too risky for any private financial institution. None of the risk management algorithms support it. The math doesn’t justify it — period. You hear cooperatives and social development organizations talk about approaches that they claim to have worked but all their successes are obviously not commercially replicable and scalable. Why? What many people overlook is that it is not just about repayment. It is, probably more so, about administrative costs and loan margins. You can get good repayment but see all your lending margins disappear because it took massive resources (ergo costs) to get the repayment you wanted.

2. Make banks go into inventory finance. While they are totally clueless when it comes to production finance, they are masters of asset-based finance. Look at how great they are with auto finance, jewelry finance, condo finance, etc. How do you make them do inventory finance? Make them feel comfortable about the inventory that they finance. Make them feel that it will not disappear or lose value before the loan that financed it is liquidated. Let’s take palay (unmilled rice) and corn as an example. There are so many National Food Authority (NFA) warehouses nationwide. They are no longer needed because the government has already applied tariffs to rice imports. Why not make NFA operate as a warehousing entity whose mandate is to ensure that everything stored in its warehouses is reasonably protected and cared for during storage? Then, these warehouses can issue receipts to farmers who store their palay and corn.

These farmers can then go to banks and borrow against these receipts. The banks will lend if the government will guarantee, NOT THE REPAYMENT OF THE LOAN, but the sanctity and integrity of these receipts. This makes the warehouse receipt a tradable instrument because it has guaranteed value. This is even better than floor stock financing that banks do for automotive dealers. All that’s needed is for the government to guarantee that when a holder of a warehouse receipt for high-grade palay goes to the NFA warehouse to redeem the high-grade palay, he will get it.

Warehouse receipts, more popularly known as quedans, have been extensively used in the Philippines but their integrity has always been suspect because the very issuers of warehouse receipts are owners of the commodities supposedly stored in these warehouses.

3. Make banks go into capex finance. If entities other than the NFA want to go into the warehousing business, let them do so but prohibit them from going into trading of commodities that are stored in these warehouses. Why? The integrity of a warehouse receipt becomes suspect when the issuer of the warehouse receipt himself owns the commodities stored in the warehouse. Make it a serious crime to engage in trading while holding a warehousing license. But make warehousing a profitable business by itself. How? If you want to encourage the creation of more warehouse capacity, you need to guarantee the throughput or capacity utilization. Be ready to subsidize those who are experiencing low-capacity utilization during the pre-harvest season.

Is it bad economics to do it? That is debatable. What’s inarguable is that it is not bad public policy to subsidize a private endeavor that supports an essential good. Just look at the iron-clad power purchase commitments given to private parties that invested in new power generating capacity when the country urgently needed power. Look at the subsidy given by the Department of Education to private schools that invested in new classrooms to accommodate new K-12 enrollees that public schools couldn’t take in. With throughput guaranteed, private warehouses will become profitable. If they are profitable, banks will finance them.

How does that help the small farmers? If there are independent warehouses (i.e., not owned by the commodity owners themselves) and if warehouse receipts are sacrosanct (and are therefore bankable), farmers can choose to store their produce instead of selling at bargain basement prices during harvest season when supply is plenty. If they need liquidity in the meantime, they can go to the banks and borrow against these warehouse receipts. Dry warehouses are just one form of capex. We can talk about cold storage facilities too. The same principle applies.

4. Securitize private investment in agricultural infrastructure and make the banks buy the resultant securities. It is clear to everyone that we lack essential agricultural infrastructure. Everyone mouths it: farm-to-market roads, transport systems and equipment, processing facilities (as rudimentary as drying and shelling, etc.), and storage. Throw in food terminals and town-center agricultural exchange marketplaces. Throw in online platforms enabled on phones. All these can be done by the private sector. But, unless there is a clear agreement on throughput protection by the government, private entities will not go into these projects. When I speak of throughout protection, I’m not talking about the messy type of arrangements, such as those in MRT 3. I’m talking about arrangements as neat and unequivocal as the purchased power deals with power generation companies. If these deals are present, private entities will invest and the banks will finance.

5. Use technology to enable agricultural trading. Online trades are transparent. Banks will be able to easily verify deals done on neutral platforms and can therefore finance both spot and forward purchases of agricultural commodities (i.e., forward means purchases today for delivery at a later time, say 90 days). This is no different from PO financing which banks are so familiar with. It is not even that much different from salary loans. Of course, there is the risk of non-delivery, especially in cases of force majeure. Therefore, we need an honest-to-goodness crop insurance system. This is a job for the government. There is no need to go blind on risks like the Philippine Crop Insurance Corp. is doing today. We have weather and disaster data spanning probably a century. We can use that data to inform and enrich the risk algorithms that will be the basis for insurance tariffs. If there is credible insurance cover for delivery failure, banks will lend against forward deals. They are well-positioned to do this because they have good control of the cash tunnel, being the ultimate settlement institutions in any online platform.

There are practical ways of making banks channel money into agriculture in magnitudes bigger than any mandatory asset allocation, such as the existing coercive Agri-Agra Law, can ever do.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.

 

Joey A. Bermudez a former president of MAP. He is chair of Maybridge Finance and Leasing, Inc.

map@map.org.ph

joeybermudez@yahoo.com

Inflation, cement importation, and electricity concerns

Three different topics here, we go straight to them.

RISING PHILIPPINES INFLATION, BIDENFLATION
The Philippines saw a big jump in its inflation rate last month, from 3% in January-February to 5.4% in May. Big increases in May happened in transport (14.6%), housing, water and electricity (6.5%), and alcoholic beverages and tobacco (6.8%).

In the US, “Bidenflation” continued to wreak havoc in ordinary American households. The US inflation rate was only 1.4% in January 2021 when Trump left the White House; it jumped to 7.5% in January 2022 or 12 months into the Biden presidency and before the Russian invasion of Ukraine, and went up to 8.6% in May, the highest rate in 40 years.

Germany’s inflation of 7.9% in May was highest perhaps in about six decades, while the United Kingdom’s 9% in April was the highest in 40 years. The industrial economies of America and Europe are limping from high inflation (Table 1).

The west’s “war on fossil fuels” is a big reason why this happened. High oil-gas-coal prices mean a higher cost of manufacturing, and higher commercial and household electricity bills. Underinvestment in oil refining also contributed to low fertilizer output and high fertilizer and food prices.

CEMENT IMPORTATION AND THE CONSUMERS
I recently received many materials on “Cement Anti Dumping” presented by the Cement Manufacturers Association of the Philippines (CEMAP). They believe that cheaper imported cement, mainly from Vietnam, is bad for the economy because it adversely affects the revenues of their member-companies, their capacity expansion and job generation. Their argument is summarized in one report in BusinessWorld, “Cement group seeks safeguard for local manufacturers” (June 9).

Free trade means the consumers are the main beneficiaries of trade. Cheaper cement, steel, and other construction materials means poor people who otherwise would have weak wooden or bamboo houses can have concrete houses that can better protect them from strong typhoons and flash flooding, helping save lives and properties. And CEMAP think this is bad, that cheaper imported cement should be penalized with high tariffs to make it more expensive for consumers. Bad lobby.

I checked the Philippine Statistics Authority (PSA) data — the construction materials price index and price changes from 2020 to April 2022 — and it shows that concrete materials and cement has low or small price changes compared to overall construction materials and national inflation. In 2021, Philippines inflation was 3.9%, inflation for all construction materials was 3.2%, and inflation for cement was 1.5%. In the first four months of 2022, Philippines inflation was 3.7%, all construction materials 6%, cement 4.1% (see Table 2). This means cement liberalization is working for the consumers and if CEMAP will have its way, cement inflation should rise higher — at a time when higher inflation is causing more social and economic stress on Philippine households and businesses.

The Tariff Commission (TC) should consider the interests of consumers and not just the cement manufacturers, importers, and traders. Free trade is pro-consumers.

ELECTRICITY CONCERNS
These recent reports in BusinessWorld are interesting.

1. “NGCP starts new transmission line for Bataan capacity expansion” (May 26),

2. “Meralco seeks ‘sound’ policies to cut power costs” (June 1),

3. “Razon firm ‘poised’ to control Malampaya project” (June 3),

4. “Prime Infra unit plans world’s largest solar farm” (June 9),

5. “Gov’t imposes sanctions on two electric cooperatives” (June 9),

6. “Meralco power rates to rise in June” (June 10).

Report No. 1 is somehow good because the National Grid Corp. of the Philippines (NGCP) has a record of frequent delayed delivery of the needed transmission lines between new power plants and distribution utilities. The report refers to the Mariveles to Hermosa, Bataan line, which should have been finished much earlier. And NGCP should have finished the Hermosa, Bataan to San Jose, Zambales line by June 30 as the delayed transmission line there chokes 818 MW of power (GN Power Dinginin Unit 2 with 668 MW and SMC Mariveles Unit 1 with 150 MW) that can expand supply in the Luzon grid. This is far from happening yet. See Table 3 of this column on May 16, https://bit.ly/Oplas051622.

Reports Nos. 2 and 6 are related: Meralco has no choice but to raise electricity rates because the generation cost has increased. The price of coal (Newcastle) this June was $390+ per ton which is three times higher than a year ago when it was $175+ per ton. Even the price of domestic Malampaya gas is pegged to Dubai crude’s price and thus is also rising. Good thing that Meralco is able to keep its distribution charge flat, with no increase since about 2015.

Reports No. 3 and 4 show further expansion of Mr. Razon’s Prime Infra in energy. Its planned 2,500-3,500 MW solar plants will have a big impact on competition for land use because that will require about 4,000 to 5,500 hectares of land. In addition, more intermittent renewables with priority dispatch to the grid mean they can discourage other investments in coal, oil, gas, and nuclear as they are a lower priority in the grid. For instance, if coal and gas plants offer power at P5/kwh and solar offers P6/kwh, the latter will still be prioritized. Discouraging investments in conventional thermal plants can lead to the threat of blackouts in the future, and this is happening now in Europe, the US, and even Japan.

Report No. 5 is about Maguindanao Electric Cooperative, Inc. (Magelco) and Lanao del Sur Electric Cooperative, Inc. (Lasureco). They respectively owe P3.8 billion and P12.9 billion — a total of P16.7 billion — to the state-owned Power Sector Assets and Liabilities Management Corp. (PSALM). These two electric cooperatives (ECs) could be the reason why PSALM asked for P16 billion in budgetary support for 2021 and 2022. So, taxpayers from Zamboanga to Visayas to Luzon are subsidizing these ECs as they extract more “free electricity” from PSALM. Wow. This is one more reason why the National Electrification Agency (NEA) that supervises all ECs should go, and all ECs should become private distribution utilities, supervised and monitored by the Securities and Exchange Commission (SEC) and not by a political agency like the NEA.

Meanwhile, Department of Energy (DoE) data show that in 2021, the Philippines produced 103,448 gigawatt-hours (GWH) of electricity, more than 2020’s 101,800 GWH but still lower than 2019’s 106,000 GWH. Coal’s share in installed capacity is still at around 35% of the total but contributed 57.5% in actual power generation in 2021.

Malampaya gas generation is declining, from 19,500 GWH in 2010 and 2020 to 18,300 GWH in 2021. The shares of geothermal and hydro are increasing slightly, and wind-solar’s contribution is only 2.6% of total generation in 2021, still insignificant even if the Renewable Energy law was enacted in 2008 and feed-in tariff (FIT) or assured high prices for 20 years was granted in 2012 or a decade ago (Table 3).

I am hoping that the Ferdinand Marcos, Jr. administration will realize that energy rationing, giving unnecessary priorities to intermittent renewables and discouraging investments in thermal power generation, will be counter-productive economically. The right energy mix should be done by the consumers themselves, not by government’s Executive or Legislative branches, nor by environmental and climate lobby groups.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Japan’s assertive foreign policy can start in Southeast Asia

SPDEL-FREEPIK
SPDEL-FREEPIK

“UKRAINE today may be East Asia tomorrow,” Japanese Prime Minister Fumio Kishida told an international security gathering in Singapore, a catchphrase that speaks to the harsh lessons learnt over the past few months. Better deterrence and response capabilities, he told a room packed with defense officials and diplomats, will be “absolutely essential if Japan is to learn to survive in the new era and keep speaking out as a standard-bearer of peace.” Cranking up rhetoric, though, is the easy part.

Russia’s invasion of Ukraine has jolted the pacifist nation into making bigger promises on spending, security, and a foreign policy that relies on more than economics — welcome news for allies eager to have a muscular Japan discouraging provocations from its nuclear-armed neighbors. Tokyo now needs to overcome what remains of domestic resistance, free up funds, and strengthen alliances, and fast. But this “courteous power” can already use diplomatic tools to do more for the “rules-based free and open international order” that Kishida talked up at the Shangri-La Dialogue on Friday. He could do worse than to start in Southeast Asia. It’s a region that, like much of the emerging world, has largely distanced itself from allies’ response to President Vladimir Putin’s aggression, and where Japan has more credibility than most.

Ukraine has made even Tokyo’s most ardent pacifists realize that a totally unprovoked war is not a distant prospect. It’s a tough neighborhood: North Korean missiles, Russian saber-rattling around islets it says are part of its Kuril chain and Japan calls its Northern Territories, and tensions in the East China Sea — never mind the dramatic consequences of a Chinese invasion of Taiwan. Joint military exercises by Russia and China have done little to ease nerves. Little wonder that even if an overhaul of Japan’s constitutional article forbidding “land, sea, and air forces, as well as other war potential,” remains unlikely, public opinion is shifting, and limits are becoming more flexible, with counterstrike capabilities now up for discussion. Even Kishida, whose family hails from Hiroshima and is less hawkish than others in his party, is pledging a substantial increase in defense spending, a step further from the pacifist mindset of recent decades.

Even so, it will be challenging to move quickly at home. Kishida gave no specifics, but an increase in the defense budget to 2% of gross domestic product, or NATO levels, as his party has proposed — roughly doubling the current share — may be a tough sell in practice, given post-pandemic demands and already stretched public finances. Kishida can still add manpower to the Self-Defense Forces, as Japan’s military is known, bolster missile defense and cybersecurity (a major concern), while working on strengthening the alliance with America — though Kishida has, for now, pushed aside nuclear sharing, or the possibility of hosting US nuclear weapons on Japanese soil.

But Japan, which has already broken with precedent by accepting refugees and sending bulletproof vests to Ukraine, can take other steps to protect not just itself but the rules-based order it depends on, with more forceful diplomatic efforts to help widen the alliance of nations condemning Russia’s aggression and pushing to isolate its economy. Southeast Asia is a good place to begin.

With the exception of Singapore, which has imposed unilateral sanctions for the first time in more than four decades, the region has largely sought to remain neutral in the conflict. That’s due in equal parts to the power of Russian weapons exports, deep-seated anti-Western sentiment, Soviet-era ties, disinformation — and of course diplomatic disengagement on the part of the wealthy world, not to mention sheer distance. Just a day after Kishida addressed the Singapore gathering, Indonesian Defense Minister Prabowo Subianto, whose country has refused Ukraine’s request for weapons, defended what he called strategic neutrality, with a reference to former South African leader Nelson Mandela’s comment when asked in a US interview about Cuba’s Fidel Castro: “Your enemy is not necessarily my enemy.” It’s a position Russia is exploiting as the food crisis worsens, which will be used to weaken support for Ukraine as the war grinds on. And it’s an issue the West is not doing enough to tackle.

Southeast Asia is important, not just as a grouping of important emerging economies but because this year, it has the global spotlight: Indonesia chairs the G20, which will meet in Bali in November, and Thailand will host the Asia-Pacific Economic Cooperation’s economic leaders summit. So it matters when Cambodia, the current chair of ASEAN, joins with Indonesia and Thailand to issue a statement on their respective meetings that skirts the small matter of  a war of conquest entirely, in favor of working “with all partners and stakeholders.”

Japan is already engaged with the region and in his first months, Kishida has visited Cambodia, Vietnam, Indonesia, Thailand, and Singapore, and welcomed Malaysia’s prime minister in Tokyo. It’s also the region’s most trusted partner, not to mention a leading investor. But as with its investment, diplomatic efforts have been patient and understated, and far more is needed. There is an uncomfortable colonial past and officials will be dealing with reluctant and distracted governments — Indonesia, for one, is already beginning to look ahead to a 2024 election. It will also have to steer away from values conversations around political systems. Singapore’s defense minister is right that there will be “few takers for a battle royale on that basis.”

But stronger economic ties will help, as will military supplies to reduce dependence on Russia, not to mention coordinating food aid and support where needed as the conflict in Ukraine fuels a surge in prices and hunger. Persistent diplomacy too. Avoiding another aggressor trampling over smaller neighbors demands it.

BLOOMBERG OPINION

SM Foundation: Creating ripples of social good

The 2021 SMFI Primer (cover)

SM Foundation (SMFI), the corporate social responsibility arm of the SM group, underscores how the power of doing social good, even to a single beneficiary, creates a ripple effect wherein more Filipinos can benefit from.

Since its establishment in 1983, SM Foundation’s wide array of programs has generated positive impacts to its host areas — uplifting the lives especially of those living in grassroots communities. SMFI shares some of its beneficiaries, who are now spreading social good themselves in their own unique way.

Creating work opportunities

A 2010 SM scholar graduate, Darmae Tan, who finished a computer science degree from the University of the Philippines-Cebu, is now managing her own software development company, MYT SoftDev Solutions, Inc. and her latest venture, ErrandBoy.PH.

SM Scholar Darmae Tan

ErrandBoy.PH provides on-demand help such as courier service, purchase service and bills payment service for people who are either too busy or have limited mobility because of the government-imposed restrictions to contain the spread of COVID-19. The first employees Ms. Tan hired for her new company were displaced workers, mostly from the hospitality industries, affected by the pandemic. Ms. Tan envisions ErrandBoy.PH as a tool in helping people have time for more important things in life like time for their families.

“This is exactly how SM Foundation helped me. Aside from the financial help that they extended for my college education, they also helped me develop myself and figure out what I wanted my future to be like — which is to extend a helping hand to others and spread social good,” Ms. Tan said.

“Not everyone is given the same opportunity, and I am very grateful to SMFI not only for the chance to have a quality college education but also for providing me with learning opportunities through various enrichment activities when I was still a scholar,” Ms. Tan further added.

Sharing his knowledge on farming

Another SMFI beneficiary under its Kabalikat Sa Kabuhayan (KSK) on Sustainable Agriculture, who now shares his knowledge on farming to his community, is Jeffrey Toleran of Davao Cty. He is a High School Teacher at Emilio Ramos National High School designated as Gulayan Sa Paaralan Coordinator. With just a little knowledge on farming, Mr. Toleran exerted efforts to equip himself with the skillsets needed to run their school’s gardening initiative — that’s when he joined SMFI’s KSK training program under Batch 211 in 2019.

KSK farmer-graduate Jeffrey Toleran

With what he has cemented in their school in terms of their Gulayan sa Paaralan project, it’s no surprise that Teacher Toleran was recognized not just at the school level but also on the regional level. While continuing what he has started at their school, he also expanded his platform and established the Barangay Angliongto Organic Practitioner Association (BAOPA) in his community.

“Ang BAOPA ay naglalayong makatulong sa ibang tao na mabigyan ng ideya sa pagtatanim at mahikayat na gawin ang home gardening na maaari nilang pagkunan ng pagkain para sa kanilang hapag-kainan. Ang BAOPA ngayon ay rehistrado sa City Agriculture ng Davao City. Natutuwa ako na makitang hindi na ako nag-iisa sa pagtupad ng aking mga layunin. Mula sa ‘ako’, ngayon ay naging ‘kami’ na dahil sa asosasyong ito,” he concluded.

The stories of Darmae and Jeffrey are just a few among the thousands of SMFI beneficiaries, who are now making their own way to help others — fully embracing SMFI’s principle of people helping people.

To know more about the various social development impacts and social good stories of SM Foundation, read and download 2021 SMFI Primer: https://bit.ly/3xp7Z0u.

 

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Beijing tests millions over COVID cluster at 24-hour bar

PEOPLE walk past a sign of the Heaven Supermarket bar, where a coronavirus disease (COVID-19) outbreak emerged, in Chaoyang district of Beijing, China, June 13. — REUTERS

BEIJING — Authorities in China’s capital Beijing on Monday raced to contain a COVID-19 outbreak traced to a raucous 24-hour bar known for cheap liquor and big crowds, with millions facing mandatory testing and thousands under targeted lockdowns.

The outbreak of nearly 200 cases linked to the city center Heaven Supermarket Bar, which had just reopened as curbs in Beijing eased last week, highlights how hard it will be for China to make a success of its “zero COVID” policy as much of the rest of the world opts to learn how to live with the virus.

The re-emergence of COVID infections is also raising new concerns about the outlook for the world’s second-largest economy. China is only just shaking off a heavy blow from a two-month lockdown of Shanghai, its most populous city and commercial nerve center, that also roiled global supply chains.

Dine-in service at Beijing restaurants resumed on June 6 after more than a month in which the city of 22 million people enforced various COVID curbs. Many malls, gyms and other venues were closed, parts of the city’s public transport system were suspended, and millions were urged to work from home.

“We have to test every day now. It’s a bit of a hassle, but it’s necessary,” said a 21-year-old resident surnamed Cao, who runs a convenience store in Beijing’s largest district Chaoyang, where the bar cluster was discovered. “The virus situation has hurt our business a bit, it’s down about 20-30%.”

Chaoyang kicked off a three-day mass testing campaign among its roughly 3.5 million residents on Monday. About 10,000 close contacts of the bar’s patrons have been identified, and their residential buildings put under lockdown, and some planned school reopenings in the district have been postponed.

Queues snaked around some testing sites on Monday for more than 100 meters, according to Reuters’ eyewitnesses. Large metal barriers have been installed around several residential compounds, with people in hazmat suits spraying disinfectant nearby.

‘IN VAIN’
Last week, as dine-in curbs were lifted, Heaven Supermarket Bar, modeled as a large self-service liquor store with chairs, sofas and tables, reclaimed its popularity among young, noisy crowds starved of socializing and parties during Beijing’s COVID restrictions.

The bar, where patrons check aisles to grab anything from local heavy spirits to Belgian beer, is known among Beijing revelers for its tables plastered with empty bottles, and customers falling asleep on sofas after midnight.

With the almost 200 COVID cases linked to the bar since June 9, authorities described the outbreak as “ferocious” and “explosive” — people infected live or work in 14 of the capital’s 16 districts, authorities have said.

Officials have not commented on the exact cause of the outbreak, nor explained why they are not yet reinstating the level of curbs seen last month.

The bar cluster was caused by loopholes and complacency in epidemic prevention, state-backed Beijing Evening News wrote in a commentary piece on Monday.

“At a time when … normality in the city is being restored, the fall of Heaven Supermarket Bar means the hardship and effort of countless people have been in vain,” the newspaper wrote.

If the outbreak grows, “consequences could be serious, and would be such that nobody would want to see,” it added.

Heaven Supermarket Bar, and other businesses nearby, including the Paradise Massage & Spa, were under lockdown, with police tape and security staff blocking the entrances.

A handful of customers and staff at the parlor would be locked in temporarily for checks, authorities said.

In all, Beijing reported 51 cases for Sunday, versus 65 the previous day, in line with a national trend of falling cases.

Shanghai, which completed mass testing for most of its 25 million residents at the weekend after lifting its lockdown and many of its curbs at the start of the month, reported 37 cases, up from 29.

As Beijing authorities wrestled with new COVID cases in April, retail sales in the capital shrank 16% year-on-year, while property sales nosedived 25%. Data for May, due later this month, is expected to be dire as well.

Before the bar cases, there had been high hopes for a rebound in June. — Reuters

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