Budget Secretary Wendel E. Avisado said last week that the agency is working on an executive order directing agencies to reduce nonessential expenses to free up more funds for the government’s pandemic response. — PHILIPPINE STAR/ MICHAEL VARCAS
THE Department of Budget and Management (DBM) has released P3.514 trillion to state offices and local government units (LGUs) as of end-March, and implemented cuts to the Agriculture and Education departments’ budgets, latest data from the agency showed.
The amount released so far accounts for 78% of the P4.5-trillion national budget this year. This leaves P991.596 billion left to be released for the next nine months.
Compared with the same period last year, the allocation rate was roughly similar, with the 78.4% recorded in the first quarter of 2020.
This was based on the allotment releases issued by the DBM to agencies and LGUs, allowing them to incur obligations to fund their programs, projects and activities for the year.
Several adjustments to the agencies’ budgets were made, amid the government’s plan to roll out belt-tightening measures amid the pandemic.
The Department of Agriculture had its budget slashed by P21.72 billion to P46.9 billion from P68.62 billion, originally. The budget for the Department of Education was also cut by P2.93 billion to P554.33 billion, from its initial allotment of P557.25 billion.
Subsidies to government-owned and -controlled corporations were also reduced by P712.26 million to P147.48 billion.
On the other hand, more funds were given to the Department of Public Works and Highways, which received an additional P15.358 billion to bring its total budget to P710 billion. An additional P10 billion was also added under the “special account in the general fund,” bringing the total to P31 billion.
Total allotment releases so far were broken down into P2.297 trillion for line departments, making up 87% of their budgets for the year. Around P1 trillion or 70% of the total was released under automatic appropriations, which includes the internal revenue allotment for LGUs.
The DBM also released P116 billion from special purpose funds, or 26.4% of the total budget.
As of end-March, P99.77 billion under the continuing appropriations from the extended 2020 budget has been released.
Budget Secretary Wendel E. Avisado said last week that the agency is working on an executive order directing agencies to reduce nonessential expenses to free up more funds for the government’s pandemic response. — Beatrice M. Laforga
Construction material prices surged in March, as public and private infrastructure projects got underway. — PHILIPPINE STAR/ MICHAEL VARCAS
WHOLESALE PRICES of construction materials in Metro Manila posted their fastest growth in 17 months in March, the Philippine Statistics Authority (PSA) reported on Wednesday.
These prices, as measured by the construction materials wholesale price index (CMWPI) in the National Capital Region (NCR), rose 2.2% year on year in March versus the growth rates of 2% and 1.6% in March 2020.
The March outcome was the highest reading in 17 months or since the 2.6% logged in October 2019. Wholesale prices reflect bulk buying by large construction firms engaged in major projects.
For the year, the index has grown by 1.8%, slightly up from the 1.7% posted in last year’s comparable three months.
In a text message, Asian Institute of Management (AIM) economist John Paolo R. Rivera attributed the record growth in wholesale construction prices in NCR to the resumption of most construction activities that month which drove up demand.
“This resulted in an upward pressure on [prices of construction materials] given the persistent economic uncertainties that may compel supply constraints,” Mr. Rivera said.
The year-on-year pickup in March was driven mainly by prices of fuel and lubricants, which rose 6.8%, compared with a month earlier when prices of these products declined by 0.3%. This was followed by sand and gravel (4% from 3.5% in February); hardware (1.9% from 1.5%); electrical works (1.5% from 0.4%); plywood (1.2% from 0.4%); doors, jambs, and steel casement (1.2% from 0.5%); painting works (0.9% from 0.3%); and galvanized iron sheets (0.5% from 0.4%).
Meanwhile, year-on-year price growth was unchanged for glass and glass products (14.4%); reinforcing and structural steel (3.3%); lumber (2.8%); tileworks (2.2%); concrete products and cement (1.2%); and PVC pipes (0.6%).
Wholesale prices for asphalt and machinery and equipment rental were flat in March.
Bucking the trend was plumbing fixtures and accessories/waterworks, which saw their prices decline faster at 2.2% from the previous month’s annual contraction of 1.3%.
Asked on how stricter restrictions would affect the construction index in coming months, AIM’s Mr. Rivera said it would depend on whether the lockdown has resulted in the worsening of “supply constraints” currently faced by construction firms.
“If quarantine restrictions will affect supply of construction materials because of difficulty of production/importation/sourcing, then the CMWPI is likely to increase because construction projects are ongoing,” Mr. Rivera said.
“However, in the absence of supply constraints (assuming raw materials sourced domestically and internationally are available on time), there is less pressure for the CMWPI to increase…,” he added.
Metro Manila and the provinces of Bulacan, Cavite, Laguna, and Rizal were placed under enhanced community quarantine (ECQ) — the country’s strictest form of lockdown — from March 29 to April 11. The areas are now under a modified ECQ (MECQ) until April 30, allowing some construction firms to operate to at least 50% on-site capacity.
Earlier this month, Department of Public Works and Highways Secretary Mark A. Villar issued Department Order No. 30. This allows “all essential public and private construction projects” except “small-scale projects” in areas under ECQ and MECQ to operate at full operational capacity.
A look at the PSA’s national accounts shows that among subsectors, construction was the biggest contributor to the decline in the country’s gross domestic product in 2020. Of the 9.6% contraction last year, the sector contributed two percentage points. — Jobo E. Hernandez
ONLINE delivery service foodpanda Philippines has reached an estimated 70% market share among food delivery mobile apps in the country after demand surged last year, a company official said.
“Suddenly, everyone was locked down, and no one could go out. If you wanted food, you only only really had two to three services you could choose from at the time,” Daniel Marogy, foodpanda managing director, said in an online interview.
The company’s user base grew by eight times from the figure in February last year, after the lockdown led to a surge in demand for delivery services. Its restaurant partners increased by five times and its order count went up by 12 times, Mr. Marogy added.
Bigger market share swung to foodpanda during the lockdown last year, he said, noting that its competitor held more than two-thirds of the pre-lockdown market.
“Because the demand coursing through the main incumbent at the time was so high, it became difficult for them to manage that volume, which caused a large spillover effect into their competitors, the largest of which was us,” he said.
foodpanda, he said, was able to retain the new customers as it had been improving delivery times and assortment of restaurants in the months preceding the lockdown.
App-based food delivery services in the Philippines are offered by companies like Grab Philippines and DBDOYC, Inc. (Angkas). Lalamove Philippines stopped its food delivery business in February.
Mr. Marogy said that market share in the delivery industry could change quickly.
“We’re very, very careful of not just relying on the same sort of approach and business model to sustain our growth into the future,” he said.
This year, foodpanda plans to expand its grocery delivery service, doubling its dozen small warehouses in Metro Manila in the second quarter, with potential further expansion in the second half.
Mr. Marogy said that the company’s grocery service is based on small warehouses close to customers, with around 3,000 to 4,000 goods compared to the 50,000 products in a supermarket.
“If you want a smaller selection but you want it on demand, then our model would be ideal,” he said. “Our focus will really be on the speed element, the quick commerce elements because that really complements our business and our assets, the main one of which is the rider fleet.”
He said that the company’s rider count increased by four times since the start of the lockdown, noting that he does not expect the headcount to shrink even after lockdown restrictions are eased and more people dine in.
“Despite the pandemic, [food delivery services] don’t take more than 12% of total food services, so in terms of the secular trend that will continue over many, many years, there’s an enormous amount of way to go,” he said.
“So I think if we were currently at 80% then suddenly the market opened up for dine in, sure I mean most likely you’d see that fall. But the fact that the penetration is so low at the moment, and there’s such a long way to go until the space is saturated, then I don’t see too much risk on that side,” he added.
foodpanda plans to increase its Philippine markets this year to 150 from just over 100. The Berlin-based company launched its services in the country in 2014.
GRAB Philippines continues to expand its delivery and cashless payment services across the Philippines as small businesses fight for survival amid the public health crisis.
“Grab has been focusing on national expansion in the Philippines since January of 2021 when it introduced GrabFood, GrabExpress and GrabPay to Zamboanga,” the company said in an e-mailed statement on Wednesday.
“Services have since rolled out to Sta. Rosa, Laguna; Concepcion and Capas towns in Tarlac; General Santos City in South Cotabato; Legazpi, Albay; and Butuan, Agusan del Norte,” it added.
Grab plans to expand its services to Subic Bay Freeport Zone in Zambales this month.
“We’re committed to helping as many people as possible leverage our offerings to help them safely and easily purchase and pay for essential items, especially as they continue to face the challenges of the global pandemic,” Grab Cities and Expansion Head Cindy Toh said.
“At the same time, we can empower Filipinos who need to maintain their livelihood by giving them opportunities to earn supplemental wages by joining our community of driver- and delivery-partners,” she added. — Arjay L. Balinbin
ANDREW L. Tan’s Megaworld Corp. reported a net income of P9.9 billion to parent firm equity holders for 2020, down by nearly 45% despite the uptick in the company’s office leasing business.
Revenues for the listed property developer slid to P43.5 billion, declining by 35% from P67.3 billion the previous year. Net income fell by 45% to P10.6 billion from P19.3 billion.
“Our office business is the most stable income generator in our company’s revenue stream with or without this health crisis, and we continue to focus on the expansion of this business in the years to come and further strengthen our leadership in the country’s office property sector,” Megaworld Chief Strategy Officer Kevin Andrew L. Tan said in a statement on Wednesday.
Megaworld Premier Offices posted P10.4 billion in revenues in 2020, inching down from P10.5 billion the previous year.
Some 135,000 square meters (sq.m.) of new office space inventory were rented out in the company’s Iloilo, Quezon City, and Fort Bonifacio townships. Around 145,000 sq.m. was also renewed by company tenants last year.
Megaworld said most of its renters are business process outsourcing companies, e-commerce firms, logistics companies, and finance institutions.
Existing office partners took up 78% of the new leases under Megaworld’s expansion programs. The rest were rented by new clients.
The company noted that office spaces in its Iloilo Business Park is one that piqued market interest.
“Approximately, 20% of new leases have been booked there and we even cemented our dominance in terms of market share in the Iloilo office market,” Mr. Tan said.
The company also completed the construction of an additional 87,000 sq.m. of office space, which includes the spaces being sold in Iloilo Business Park and Cavite’s Maple Grove. The construction bumped up Megaworld’s total leasable office inventory to 1.4 million sq.m. from 1.3 million sq.m.
In the last quarter of the year, the company reported that it saw recovery through Megaworld Lifestyle Malls, Megaworld Hotels, and its residential business as the government eased lockdown restrictions.
“Real estate sales grew 22% in the fourth quarter compared to the third quarter last year with reservation sales up 85% quarter on quarter, while Megaworld Lifestyle Malls and Megaworld Hotels also grew 24% and 25% quarter on quarter, respectively,” the company reported without disclosing specific figures.
Rental income declined to P12.9 billion, 23% lower than the P16.8 billion generated from a year ago. Meanwhile, real estate sales decreased by 42% to P24.9 billion from P42.6 billion.
Despite this, the company was able to launch new projects worth P7.8 billion, which includes those in The Upper East Bacolod, Iloilo Business Park, Capital Town Pampanga, and Hamptons Caliraya in Laguna.
Megaworld Hotels also reportedly generated P1.5 billion in 2020 despite the pandemic’s effects on the hospitality industry.
On Wednesday, shares of Megaworld at the exchange declined by 3.33% to finish at P3.48 from P3.60 each. — Keren Concepcion G. Valmonte
AYALALAND Logistics Holdings, Corp. has acquired Technofreeze, Inc., a cold storage facility located in Laguna Technopark, the listed holding firm disclosed to the stock exchange on Wednesday.
“Technofreeze is an established cold storage facility in Laguna with [a] proven track record of serving companies with diverse products such as processed meat products, dairy and ice cream, and adhesives,” the company said.
The firm will also acquire the land on which the facility stands, which spans 11,800 square meters. The acquisitions will amount to a total of P408.8 million, inclusive of value-added tax.
The cold chain facility is accredited by the Department of Agriculture, allowing it to store fruits, vegetables, meat, fisheries, and aquatic products.
The facility has 17 cold storage rooms capable of keeping temperatures up to -25 degrees Celsius with 4,000 pallet positions and three processing rooms with temperatures ranging from 0 to 25 degrees Celsius.
It also has four dry storage rooms with 1,600 pallet positions, two blast freezers with a combined 25-ton capacity, and several office spaces.
The facility will be operated under AyalaLand Logistics’ cold storage brand ALogis Artico, which is also based in the listed holding firm’s Laguna Technopark.
“This cold facility will complement the warehouse leasing business of the group,” AyalaLand Logistics said.
AyalaLand Logistics, a subsidiary of Ayala Land, Inc., specializes in logistics and warehouse business.
It said the transaction supports the company’s vision “to be the leading real estate logistics and industrial parks developer and operator in the Philippines.”
Shares of AyalaLand Logistics at the stock exchange went up by 8.22% or P0.25 on Wednesday to close at P3.29 apiece. — Keren Concepcion G. Valmonte
ALTUS Property Ventures, Inc.’s net income last year declined by 66% to P21.95 million as its revenues were hit when the pandemic health protocols led to mall closures, the company disclosed to the exchange on Wednesday.
Rental revenues went down to P69.98 million, decreasing by 47.8% from P133.97 million.
“The decrease was due to the temporary and partial closure of mall areas during the community quarantine period, except for areas occupied by tenants that provided essential services such as [supermarkets], banks and pharmacies,” Altus said.
The company generated an EBITDA (earnings before interest, tax, depreciation, and amortization) of P54.8 million, dropping by 47.4% last year from P104.4 million.
Altus’ total comprehensive income fell by 66.4% to P21.67 million from P64.48 million.
Altus engages in selling, acquiring, and developing real estate properties. It debuted on the local bourse in June last year.
JG Summit Holdings, Inc. owns around 60.97% of its total outstanding capital stock. Altus serves as “a new avenue for growth” for future ventures and investments.
On Wednesday, Altus stocks at the exchange went up by 0.51% or P0.10 to close at P19.64 apiece. — Keren Concepcion G. Valmonte
PERHAPS it’s because they’re everywhere that they have become easy to ignore — yet coconut trees are an important part of Philippine foodways. A talk on the Filipino Food Month’s page called “Beyond Buko Pie” explains the intricacies behind the ubiquitous coconut tree, and how it serves as a pillar for both our history, culture, and tastes.
The talk was given by entrepreneur and editor An Mercado Alcantara, who also serves as innkeeper at Casa San Pablo in San Pablo, Laguna, where she holds culinary coconut tours. San Pablo was, and still is, the site of several coconut plantations — but we get ahead of ourselves. Ms. Alcantara begins her talk by discussing how the coconut’s structure (the young green skin is waterproof, while a second, fibrous layer makes it possible to float) helped it travel by sea and propagate itself along shorelines all over the world. This same structure was useful for the long sea voyages taken by the Austronesians who would populate islands in the Pacific (including our own).
A BIT OF HISTORY It was on one of these islands that Ferdinand Magellan landed 500 years ago. His chronicler Antonio Pigafetta, writing from what is now Guam, noted that the locals were able to get bread, wine, oil, and vinegar all from the same fruit. When the Spaniards came to colonize the Philippines, the coconut spread inland, farther away from the seashores that receive them, due to a decree issued by a Spanish Governor-General: that all native “indios” should plant 200 coconut trees in their lifetime. Ms. Alcantara says that the law was put in place for two reasons: one, the colonizers needed more than enough food to keep the locals from having revolutionary fires stoked by hunger; and, two, because the fibrous husk of the coconut was integral to the galleon trade (the husks were used to caulk ships).
Ms. Alcantara, meanwhile, pointed to the American colonizers for the further spread of the coconut. The Americans employed the plantation system in the country, so rows and rows of coconut trees were planted on large tracts of land. Entrepreneur Franklin Baker established a plantation in San Pablo, and many others followed suit, giving the Laguna town a wealthy base. By the 1920s, the US was the biggest supplier of coconut to the world, and a large proportion of it came from the Philippines. Today, Ms. Alcantara says, the glamor of San Pablo’s past is long gone (save for a few heritage houses, pointing to nearby Villa Escudero across the border into Quezon Province as an example of that opulence).
The glamor is gone, she said, “Except for our food.”
THE COCONUT TREE’S EDIBLE PARTS There are more edibles that can be made from the coconut tree than Pigafetta wrote about. The tree has three edible parts: the flowers, the fruit, and the heart.
The sap, collected from the stems of the flowers, ferments into tuba or coconut wine (a process that takes mere hours), which is then distilled into the fiery alcoholic drink, lambanog. Not distilling the tuba would turn it into vinegar in about 30 days, while coco aminos (a substitute for soy sauce) forms when the sap is fermented and mixed with salt. From the sap also comes coconut syrup (when it is cooked) and sugar (when it is cooked until granules form).
Ms. Alcantara poked fun at a few young ones in the audience, whom she said would have a hard time differentiating between a buko and a niyog — the difference is in the age, with the buko being the young fruit. She showed photos of coconuts being cracked, with the mala-uhog buko (a form of young coconut whose “meat” is soft and mucus-like) mixed with juice, then the mala-kanin buko, described as rice-like, which is used for salad and noodles (like in the noodle dish pancit kalabuko). Mala-katad buko is hard, almost like leather, and scraped out and used for buko pie and other baked products.
Niyog, meanwhile, is the mature coconut which also has three forms in stages. The first is alangan, which we suppose could be considered a “pubescent” coconut in between the buko and niyog stages. It has to be grated to be used, and is sometimes candied. Niyog, a full-fledged ripe coconut, is grated out; and then there is the tumbo, a coconut “pearl,” a bit like a shoot, which is eaten candied or fresh.
From the niyog comes grated coconut meat, and dessicated coconut (when niyog is grated, sterilized, and dried — also the source of the aforementioned Mr. Baker’s fortune). Dessicated coconut can be powdered, turning that into flour. Meanwhile, grated coconut is used to extract coconut milk: there’s coconut cream from the first pressing (kakang gata), and coconut milk from the second pressing (plain old gata). As a tip, Ms. Alcantara says that kakang gata, more intense in flavor than its second sibling, is added last to dishes for more of a kick. Even the sapal —the coconut meat left after the milk pressing —can still be used for other purposes. “Walang nasasayang (nothing is wasted),” she said.
The heart of the coconut, finally, is cooked (most famously in lumpiang ubod) or pickled. Harvesting the coconut heart — which is the topmost part of the tree where the leaves sprouts — kills the tree, which is why in some provincial towns, ubod is only served when a tree is past its economic life or has fallen.
COOKING WITH GATA “Every province in the Philippines that has coconut trees have their own versions of gata dishes,”said Ms. Alcantara.
As an example she uses her hometown, pointing to ginataang hipongpalakpakin (shrimps cooked in gata), which can be further processed into pinaete (the same, but pounded, although most modern households would run it through a food processor), and finally, kinilaw which is raw fish “cooked” without fire by using vinegar — coconut vinegar, of course.
In other houses in San Pablo, they make sinugno, a dish of grilled tilapia cooked in coconut milk. There’s also kulawo, a smoked gata vinaigrette.
She then went on to desserts, discussing baked goods like macaroons (no doubt developed through American-era home economics classes). But then there are completely native delights like suman (a sticky rice treat) with coco jam, and a porridge made with coconut milk and glutinous rice balls. You can also sprinkle your champurrado (a chocolate and rice porridge) with gata instead of dairy milk.
In all these examples, Ms. Alcantara reflects on how the coconut is woven deep into our lifestyle, noting that the dishes are made with some form of coconut, plus ingredients that are easily available. (In the case of shrimps, San Pablo is known for its seven lakes as well as its proximity to Laguna de Bay.)
“The dishes,” she said, “reflect the story of our own landscapes.”
LISTED real estate investment trust (REIT) DDMP REIT, Inc. (DDMPR) reported a 24% decline in net income to P5.09 billion last year despite seeing a growth in rental income.
“The company’s portfolio is 97.23% leased out and continues to remain stable,” DDMPR disclosed to the exchange on Wednesday.
Core net income in 2020 increased by 5.9% to P1.32 billion, with rental income growing by 7.6% to P1.91 billion.
The company said the number of tenants in its DoubleDragon Center West increased, while DoubleDragon Center East improved its full-year contribution.
DDMPR also declared a cash dividend worth P365.06 million or P0.02047718 per share for all shareholders as of April 28. The payment date is set on May 10.
“We expect the cash dividend value of DDMPR to start to be most efficient to benefit from the REIT incentives by the second quarter of this year since DDMPR only became a REIT company last month,” DDMPR Chairman Edgar “Injap” J. Sia II said.
The company debuted at the local bourse last month, making it the second REIT listing in the country with some 17.83 billion shares up for trading.
In 2020, the company’s assets grew to P45.35 billion, up by 7.29% from P42.27 billion. Meanwhile, DDMPR’s equity stands at P35.52 billion, improving by 13.28% from P31.35 billion.
On Wednesday, DDMPR shares at the exchange closed unchanged at P2.21 apiece. — K.C.G. Valmonte
THE GLAMOROUS Peninsula Manila is now billing itself as Makati’s only Essential Business Worker’s Hotel. It provides amenities for first responders, workers in the pharmaceuticals and BPO industries, and medical workers.
The Peninsula is accredited by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) and the Department of Tourism to serve as a staycation hotel, and is currently the only accredited staycation hotel in the Makati Central Business District. “Only staycation hotels are allowed to take in essential business workers while the rest are quarantine hotels,” said a statement from the hotel.
The hotel considers anyone on the IATF’s list of Authorized Persons Outside Residence as essential workers that can stay in the hotel. These include, among others, people involved in logistics service providers, priority construction projects, food and essential goods manufacturing, essential retail trade/service establishments, food preparation establishments, telecommunications, internet service, cable TV providers, airline/aircraft maintenance, pilots and crew as well as ships’ captains and crew security personnel, teachers and professors, and lawyers.
To ensure the safety and security of the hotel during these times, the hotel is strictly “adhering to the advice of government authorities, following stringent health and safety guidelines.”
“Our guests know that when they come to The Peninsula Manila, they can feel confident the moment they step through our doors that, in addition to the exceptional service they will experience, that the environment is kept to the exacting standards for which we are known for, including the areas of health and hygiene,” said Grace Lim, the hotel’s Public Relation’s Officer, in an e-mail to BusinessWorld.
“We have also instituted the position of a dedicated Director of Safety. This position, reporting directly to the Hotel Manager and through training, inspection and laboratory testing, is responsible for ensuring the hotel’s high hygiene standards are met, not only in our guest rooms, public spaces, restaurants and bars, spas and gyms, but also in our back-of-house areas, our fleets and any space where our guests and employees are present.”
The amenities available to guests at present include complimentary mandatory on-site Rapid Antigen testing for one, a flexible 24-hour stay, daily in-room breakfast for two, complimentary internet service, and complimentary local landline calls.
“We take pride in offering more than just bedrooms by also providing maximum comfort and all the necessities to make guests feel at home, particularly when it comes to food,” said Ms. Lim. “For now, breakfast (and all other meals) can be enjoyed only through in-room dining or room service, but our menus feature everything — international, continental, and Filipino favorites to signature dishes from our restaurants.” The hotel can handle guest requests through Pen Chat, “a bespoke, 24-hour private messaging service specially designed to deliver smarter, faster, and more intuitive and personalized responses to our guest requests in a contactless manner.” This includes ordering from room service, as well as to check-in or check out.
The Peninsula Manila didn’t have to go through all the bells and whistles — a bed is enough, but as they had always done, they took it a step further.
“Throughout the 45-year history of The Peninsula Manila, we have weathered many highs and lows. We believe it is our strong legacy, resilience, and exceptional heritage which has and will enable us to overcome adversity and emerge stronger,” the hotel statement said. “It is this same drive for excellence and quality that drives us to deliver the full Peninsula experience, whether for essential business workers for now or staycationers when the time comes.”
On a lighter note, they also expressed how it felt to operate again, albeit on a smaller scale. “To be able to operate and be of service to the community at a time like this is humbling and feels us with gratitude,” said Ms. Lim. “It feels very good. We are providing a service to the community while keeping our guests and staff safe. It is also gratifying that we get to take care of our staff and their families. The foundation of our hotel are our employees who tirelessly deliver The Peninsula experience to our guests each and every day. From the beginning of this pandemic, ensuring the safety, security, and livelihood of our employees has remained paramount.”
The Get Back to Business room package starts at P6,300 (inclusive of taxes) and comes with one complimentary mandatory on-site antigen test for one. — J.L. Garcia
THE Department of Energy (DoE) has approved the transfer of Chevron’s Malampaya LLC’s stake in the Malampaya gas-to-power project to a unit of Udenna Corp., the Dennis A. Uy-led firm said on Wednesday.
“Udenna Corp. expressed its appreciation of the DoE’s approval of the transfer of rights and obligations of Chevron Malampaya LLC (now UC38 LLC) to UC Malampaya Pte. Ltd. under Service Contract No. 38,” the firm said in a statement.
The approval comes around a year after Udenna said that its unit completed the acquisition of Chevron Malampaya’s 45% stake in the deepwater project.
In a hearing in November, DoE Assistant Secretary Leonido J. Pulido disclosed that Udenna bought Chevron Corp.’s stake for $565 million.
Mr. Uy, Udenna’s chairman and chief executive officer, said his company is committed to support the Philippines’ agenda of achieving energy security, self-reliance and transitioning to cleaner energy sources.
He said the DoE approval of the transfer of rights “is a welcome progress to reach this end.”
“We are committed to the safe, reliable and sustainable development of the gas-to-power industry in the Philippines through Malampaya,” Mr. Uy added.
He said UC38 continues to be led by a highly qualified team who were previously with Chevron. He said the team is set to provide Udenna with “upstream technical, operational, and commercial expertise based on global industry best practices.”
As a partner in the Malampaya consortium, UC34 works closely with operator Shell Philippines Exploration B.V., which holds a 45% stake, and state-led Philippine National Oil Co.-Exploration Corp., which owns 10%.
The Malampaya field, located off the northwest coast of Palawan, fuels five power plants in Luzon with a combined capacity of 3,200 megawatts.
The DoE previously said that the Malampaya’s reserves are expected to be completely depleted by 2027. — Angelica Y. Yang
CHOOSING between one expensive wine or a few cheaper wines
Would you rather have 20 bottles of the country’s No.1 selling Carlo Rossi California red wine or one bottle of Chateau Kirwan, a Grand Cru 3rd Growth Bordeaux from the Margaux region of recent 2017 vintage? These two options would cost roughly the same amount of money. Of course, there are a zillion choices in between these two brands for the same budget. At first glance, the choice may just be a matter of economics, with the less financially endowed choosing the cheaper alternative —but for wine, it goes way beyond just simply economics. Wine for one is classified as non-essential, so abstinence is the absolute answer for the non-financially capable. So, only when one is capable of indulging in wines, meaning one has the disposable income to spend on such pleasure, can true options on wine spending be really relevant. Below are eight factors that I feel should affect how consumers spend on their wines.
1. LEVEL OF WINE SOPHISTICATION
When I started my wine career in the late 1990s, it was more about a job to fulfil rather than a genuine interest in alcoholic beverages. I did not even drink way back then. I had beer in college but it was more from peer pressure then real preference. My first real introduction to an alcohol which was more acceptable to my palate was with wine coolers, notably Bartles & Jaymes — these were fruit-based, carbonated, low in alcohol, on the sweeter side, and closer to soft drinks than beer.
From there, I graduated to real wines, starting with the American favorite, the White Zinfandel. Then it was towards more aromatic and off-dry whites like Sauvignon Blanc and Chenin Blanc. As I got to drink more wines —and wine is really an acquired taste regardless of what so-called experts tell you — I started gravitating towards dryer and more serious wines, so Cabernet Sauvignon became my go-to varietal. I experimented with generic Northern Californian versions, and eventually got hooked on the Napa style. I also started appreciating fuller bodied dryer reds from Bordeaux, and soon, my curiosity got me to try and enjoy Tempranillo (particularly from Rioja and Ribera del Duero), Nebbiolo (from Barolo and Barbaresco), Syrah or Shiraz (from Hermitage and Barossa) and Sangiovese (from Brunello di Montalcino in particular). We all know good wines are never cheap, but if your level of sophistication calls for it, the preferred option is always to go for quality over quantity, and therefore, if I set aside a finite wine budget per week I would opt to enjoy a Napa Valley Cabernet Sauvignon once a week, over, say, five bottles of entry level Chilean Cabernet Sauvignon four times a week.
2. ECONOMIC STATUS
If you are rich and can afford the best wines available, then it’s just a matter of weighing your utility curve on how much you are willing to dole out for wine. But for most middle to upper middle-class people, the choice of whether to go more premium or not is really very important.
Let us first agree on this premise, in the context of Philippine retail pricing, that wines that are priced at P500 per bottle and above are more often of better quality than those priced below this number. The reason is because those wines above this price would already normally have oak-aging treatment, be from a more specific wine region, and often come in better packaging (like a deeper bottle punt or made with a real cork over a synthetic cork). But the P500/bottle and above is really a huge category. In our country, the sales volume of this range is estimated at just 10% to 12%, but the number of available brands in the market is easily more than three times those in the lower priced segment. Quality levels of P500 and above wines vary too as there are certain wine regions that are just pricier than others, and if you are to taste, say, a Barolo (from Piedmont) for example, you should be willing to shell out a bare minimum of at least P3,000 for a bottle.
3. OCCASION
Champagne (the eponymous French region) is the perfect example here. In weddings, especially among the social elites, champagnes are the de facto sparkling wine drink. This despite the fact that champagnes can easily be five times as expensive as Prosecco (Italian sparkling wine) and four times the price of Cava (Spanish sparkling wine), and multiple times the price of a Cremant (French sparkling wine from a non-Champagne region). Champagnes just seem to have no substitute when it comes to important occasions and celebrations. Credit this to the way the Champagne Houses marketed their drink.
Admittedly champagne is the original sparkling wine, but like most wine regions, not all champagnes are created equal. I have tasted real good Franciacorta (named after the eponymous region in Lombardy, Italy) and modern Cava, made from the same Chardonnay and
Pinot Noir varietals and using the same traditional Methode Champenoise, that are very comparable, if not even better, than many commercial champagne brands. These two examples are more premium in price than standard Prosecco and Cava but are still easily half to one-third the price of champagnes. So, the occasion is important because it’s not that frequent that one occurs that could merit higher value wines.
4. AUDIENCE/DRINKING COMPANY
Wine, as we all know, is a social drink and is best for sharing. A bottle of wine can easily be shared by two to four people. Who you are drinking with is an important consideration. If you are bringing a wine over for dinner at your fiancé’s parents’ house, it is time to shine and not skimp on your wine budget. So, a decent sub-P1,000 wine like a Rioja Crianza or a Marlborough Sauvignon Blanc would do. If your fiancé’s parents are wine enthusiasts, you may have to spend more, like up to P2,000 for a nice second label of a Grand Cru Bordeaux 4th or 5th growth to impress.
Now, if it is with friends who just want to enjoy some alcohol bliss (obviously not friends from your Wine Club), simpler and more affordable wines like commercial brands Hardys VR, Gato Negro, or even a very quaffable Montepulciano d’abruzzo would suffice — all are below the P500 mark, so multiple bottles won’t break the bank.
5. EMOTIONAL ATTACHMENT/BRAND PREFERENCE
This is a wide subject as it encompasses emotions as well as trips down memory lane. I had Dom Perignon when I was a teenager, but it was not exactly game-changing for me. It was when I had multiple Grand Cru Bordeaux during a Bordeaux event in Hong Kong — where I was based in 1997 —that I started to truly appreciate wines.
This was an event at a luxury hotel in the Kowloon side and sponsored by the Conseil des Vins du Medoc (Medoc Wine Council). At that time, I had just started my career working for a huge Californian winery, and I was not very brand conscious, nor was I sold on the Old World, the Grand Cru classifications, or the most renowned wine regions. I was just learning about wines based on my own appreciation level and had just undergone rigid wine-training so I was more attuned to the California style of wines. But at this Bordeaux event, I got my first serious taste of Grand Cru wines which at that time I would not spend money on, and I may not have been able to afford them too. The two wines that appealed to me the most were the Château Lascombes and Château Rauzan-Segla — both happened to be from the Margaux appellation too. This is why Margaux is until now my favorite wine region in Medoc. In a trip to Bordeaux prior to COVID’s existence, I bought a 1988 Château Lascombes that was quite stiff in price as you could imagine, but because I have a fond attachment to this brand I did not hesitate to purchase it — much to the chagrin of my wife when she found out later on.
6. AESTHETIC VALUE
Medoc royalty and first growth Chateau Mouton-Rothschild started the concept of different labels per vintage way back in 1924, with French graphic designer Jean Carlu rendering the wine’s label for their 1924 vintage. But it took two decades before this concept of different art labels per vintage became an annual Mouton-Rothschild tradition, starting with vintage 1945 — a post WWII label created by artist Philippe Jullian that flashed the V for Victory sign used by Allied forces led by the great Winston Churchill. Since then, all Mouton-Rothschild wine labels have featured art on their labels, and the label has been as much anticipated as the newly released wine vintage. The labels have featured some of the most renowned artists in the world including Picasso, Dali, Miro, Balthus, and Chagall.
The aesthetic value of the wine label is one thing, but the external packaging is another. This external packaging comes in the form of the gift boxes that contain the wine. I am here reminded of Seoul. I had been to Seoul around half a dozen times over the last decade, with 2019 being my most recent trip, and I noticed that wine boxes — whether they contain individual bottles or packs of two or three bottles — were quite popular and dominated the wine shelves. Obviously, the cost of the gift box is added into the retail price, but as gift-giving items the boxes are so invaluable, especially for their presentation and face-value factor.
The Chateau Mouton-Rothschild may not be a good example here as each bottle, even from a less than stellar vintage, easily retailed at P30,000 per bottle (so, this probably is covered by factor No. 8), but my point is that aesthetics are value add-ons. Look at the new wines coming to the shelves of late — several have similar artsy labels and others have their own gimmicks. One example is the 19 Crimes wine from Australia that has augmented reality labels that come to life when used with an app. Perhaps aesthetically appealing bottles taste better psychologically?!
7. AWARDS/HIGH RATINGS/MEDIA INFLUENCE
I want to start by saying that there are plenty of wine competitions or contests around the world,
Though obviously there have been fewer during the pandemic. Having said this, if a wine brand joins several of them, it is bound to hit some real high scores and come home with some awards to boot. However, the credibility of the competition colors these awards and quality citations.
It is the same case with wine critics’ ratings. A lot of times, a high score translates to a higher price. It may be the winery jacking up the price, or retailers or online sellers wanting bigger margins after the high scores come out. But the good thing is that there are so many critics and so many high scores given these days that if some wines are just too pricey, you have so many other options to consider.
We are often faced with the dilemma when looking at wine shelves and confused at the wide selection on hand — that is why we may feel more comfortable if we see Gold Medal stickers on the wine label, or make a quick Google search to get wine critics’ scores. If the wine with awards or high ratings is within your budget or even slightly higher, and you feel reassured of its quality and media reputation, then by all means go for it. But learn to trust your taste buds, because if, say, a Mr. Robert Parker gave the wine you purchased 90 points and you did not like it at all, then you do not need to rely on his reference for future wine purchases.
8. AS INVESTMENT (FOR FUTURE CONSUMPTION OR TO SELL)
This one is strictly in the context of being a wine consumer. It may be a bit hard to fathom for those not engaged in the wine business, that the wine you bought for yourself can be an investment solely for “reselling at a profit” purpose. To me it is like buying a Rolex watch. We know Rolex is one of the few watches that appreciates over time (pun intended) for certain models, but if you like wearing this watch, it probably just makes you feel better that your watch is appreciating in value, but it doesn’t mean you are willing to sell it to make money. However, wine has the element of tasting better with age (only in the right storage conditions, though). Most premium wines, especially Bordeaux from the best vintages, are meant for optimum drinking in 10, 20 years or even longer from its vintage. This is the difference maker.
Perhaps by chance, you bought half-a-dozen of a 5th Growth Bordeaux Grand Cru, and it was purchased relatively cheap in 2018 for a 2016 vintage, now considered quite a classic vintage. Wine ratings from renowned critics can also help the appreciation of these wines. This same Bordeaux you purchased is probably now worth 30% higher or more than the price you purchased it — this is your chance to sell a few of these bottles from your stash to your friends and make some profit (… a few bottles, not commercial quantities) and then use the money to move on to your next discovery wine.
Or you may just want to save this same wine to age. If your purpose is to let the wine age as it accumulates higher value over time, then it is the investment in time you are doing. Because if the wine appreciates so much in value, you may no longer be able to afford this very same wine as it gets older and presumably gets better. Again, as a consumer you do not need to approach this like those engaged in the business of Wine Futures and En Primeur — you don’t have to lose sleep over a handful of premium wines since the intention of purchase to begin with was for personal hedonism.
At the end of day, money spent on wines should be solely yours, whether it is for real enjoyment, for flaunting, or for whatever purpose, as wine is not cheap — especially the good ones — and it is your hard-earned money and prerogative to choose how much to spend and what feels appropriate at the right time. But if you are to drink with someone like me, remember factor No. 4! I will be waiting.
The author is the only Filipino member of the UK-based Circle of Wine Writers. For comments, inquiries, wine event coverage, wine consultancy and other wine related concerns, e-mail the author at protegeinc@yahoo.com or via Twitter at www.twitter.com/sherwinlao.
