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Aboitiz’s Hedcor sees ‘higher reliability’ in hydro plants

Hedcor, Inc. said that the reliability of the overall operations of its hydro plants improved in 2020 as unplanned outages ran for a shorter period despite posting a slightly lower annual generation rate.

In a press release issued on Feb. 4, Hedcor said that it had an unplanned outage factor of 0.73%, which it described as its “best record in the past five years.”

“This emphasizes the steady improvement of Hedcor’s plant reliability as it recorded the lowest number of unexpected shutdowns of its hydropower units in recent memory,” the Aboitiz Power Corp. unit said.

In an e-mail exchange with BusinessWorld, Hedcor explained that the unplanned outage factor is a metric that indicates the fraction of time that a plant or unit is shut down due to an unscheduled outage. 

“The unplanned outage factor of 2020 at 0.73% is lower as compared to that of 2019 at 0.87%,” it said, adding that the lower the figure is, “the higher the reliability of our hydropower plants.”

“While we had to work with a leaner workforce in facility quarantine, we were able to work around the limitations through proper communication, maximization of digital platforms, and simplification of processes,” Assistant Vice-President for Operations in Luzon Rey Rafael was quoted as saying in a statement.

Last year, Hedcor also recorded an annual generation rate of 956 gigawatt hours (GWh). “This is able to power around 400,000 households across the country, year-round,” it said in the press release. 

On e-mail, Hedcor said that its generation rate in 2020 was 8 GWh lower compared with the 2019 level.

“Hedcor’s 2020 generation of 956 GWh is lower as compared to 2019’s 964 GWh. Over 60% of the decrease was due to the insufficient water supply. Some 40% was attributed to planned and unplanned outages,” Hedcor said.

Hedcor said it was able to take a big step towards digital operations by launching its first regional control center in Southern Mindanao. The control center allowed for nine hydro facilities in Davao del Sur and Davao City to be remotely operated.

“For 2021, the main objective is… even safer, more reliable and highly available operations,” Assistant Vice President for Operations in Mindanao Leo Lungay said in a statement.

Hedcor, which manages and operates 22 hydropower plants across the country, supplies the Philippines with a total of 278 megawatts (MW) of clean energy. — Angelica Y. Yang

Fed to include climate risk in bank oversight

SAN FRANCISCO — The US Federal Reserve is beginning to incorporate the impacts of global warming into its regulatory writ, following in the footsteps of its global peers, according to a paper published Monday by the San Francisco Fed.

In a pair of reports issued late last year, the US central bank signaled its intent to measure, analyze, and respond to climate-related risks as part of its oversight of individual banks as well as of the broader financial system.

The paper published Monday laid out the thinking behind the inclusion of climate-related risks in the two reports, one on supervision and regulation, and the other on financial stability.

That included a sharper understanding of the potential effect of climate hazards on bank-held assets, as well as the vulnerability of the overall financial system to abrupt shifts in asset prices if risk perceptions change suddenly.

“The effects of climate change are inescapable and include far-reaching economic and financial consequences for many households and businesses,” San Francisco Fed economist Glenn Rudebusch wrote in the regional Fed bank’s latest Economic Letter.

In response, he wrote, the Fed is moving to incorporate climate risk into both its microprudential and macroprudential oversight of banks, using tools that could include climate scenario analysis and climate stress tests to measure the banking system’s vulnerability to climate-related losses.

The Fed last year joined the Network of Central Banks and Supervisors for Greening the Financial System, after for many years staying on the sidelines as other central banks pushed to use their regulatory and research clout to deal with the effects of global warming.

Some US lawmakers, largely Republicans, have been critical of any moves by the Fed to impose climate-oriented regulations on banks, saying they could make it difficult for oil and gas companies to access capital, and warning that jobs and economic growth could suffer as a result. Meanwhile President Joseph R. Biden has made efforts to fight climate change a pillar of his new administration.

Mr. Rudebusch’s paper Monday made the case that the economic and financial fallout from climate change is already in train, in the form for instance of destructive storms and sea level rise eroding the value of coastal real estate, and of threats to the profitability of the energy sector as governments and businesses move to reduce carbon dioxide emissions.

“The bottom line is that every future scenario includes climate-related financial risk, though the level and form of the underlying uncertainty vary,” he wrote, adding that central banks, including the Fed, have made progress on identifying and managing those financial risks. — Reuters

House approves GUIDE bill

THE HOUSE of Representatives approved on final reading a proposed law that will provide state-run banks P10 billion to lend to distressed micro, small, and medium enterprises (MSMEs).

In their plenary session on Tuesday, lawmakers approved House Bill 7749 or the proposed Government Financial Institutions Unified Initiatives (GFI) to Distressed Enterprises for Economic Recovery or GUIDE Act.

If enacted, the GUIDE Act will give government banks Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP) funding to expand their loan programs for qualified MSMEs affected by the coronavirus disease 2019 (COVID-19) pandemic.

Some P10 billion will be appropriated from the National Treasury to help boost the unified initiatives of both state-run lenders, broken down into P7.5 billion for LANDBANK and P2.5 billion for DBP.

The measure also authorizes LANDBANK and DBP to invest in or enter a joint venture agreement with a special holding company to rehabilitate Strategically Important Companies (SICs).

SICs should be investee companies that have high economic returns or job generation potential in industries such as construction, education, food industry, healthcare, infrastructure, low-cost and socialized housing, manufacturing, power and energy, product distributor/retailer, services, tourism and hospitality, transportation and logistics, and water and sanitation.

Gabriela Women’s Party Rep. Arlene Brosas said during the session that the passage of this bill does not provide real remedies to affected businesses, especially if the funds allocated to the two banks will only fund loans and not actual financial assistance.

“Bakit natin popondohan pa ang dagdag na puhunan sa mga malalaking korporasyon gayong higit na kailangan ang dagdag na ayuda sa mga manggagawa at mamamayan (Why would we fund the additional funding of big corporations especially now that we need additional funding for aid to workers and citizens)?” she said during her explanation of her negative vote.

Marikina 2nd District Rep. Stella Luz A. Quimbo also was among the lawmakers who voted against the measure, saying the bill does not provide fair competition since it exempts the special holding company from the provisions of the Philippine Competition Act for three years for the acquisition of the assets of the investee company.

“While I understand that such provisions expedites acquisitions of special holding companies for business continuity, I believe that such an objective must be backed by the  balanced longer term objective of promoting and preserving market competition,” she said. — Gillian M. Cortez

 

How much goods and services can minimum wage earners afford?

How much goods and services can minimum wage earners afford?

Nigerian artist creates rotting exhibit as coronavirus warning

LAGOS — Nigerian artist Olufela Omokeko carefully arranges fresh peppers on wooden boards hanging in a bare room. Instead of providing spice in a meal, he wants them to encourage people to obey measures that will stop the spread of the coronavirus.

His pieces, made of red, yellow, and green peppers mounted on boards and tomatoes hanging from nets, will rot during the lifespan of the exhibition in Lagos. The decay reflects the food wasted during lockdowns last year, said the 30-year-old artist.

“I created this art space as a reflection of the scarcity… and numerous challenges that we experienced at the early stage of the pandemic,” Mr. Omokeko said.

Lockdowns were imposed from late March until early May last year in Lagos, Nigeria’s commercial hub, and the capital, Abuja. The restrictions, coupled with a ban on nationwide interstate travel, disrupted supply chains which led to widespread hunger, while food rotted in fields or at depots.

“I don’t want us to go back to that stage again and my only advice is for the masses to use their face masks just to avoid another lockdown,” he said.

He fears authorities may enforce more restrictions as the country grapples with a second wave of coronavirus disease 2019 (COVID-19) infections that has seen the number of cases rise sharply in recent weeks.

Public health officials have repeatedly warned that Nigerians are failing to heed guidance on observing social distancing and wearing masks. Many opt to wear masks around their chin, rather than over their mouth and nose.

Mr. Omokeko hopes the sight of his rotting peppers, oozing liquids and giving off a pungent smell, will provide a visceral warning of what may happen if safety advice is ignored.

“I’m not wasting this material,” he said. “I’m using it to raise the consciousness of the masses.” — Reuters

How PSEi member stocks performed — February 9, 2021

Here’s a quick glance at how PSEi stocks fared on Tuesday, February 9, 2021.

Palace lukewarm on Bayanihan III; funds limited

THE third Bayanihan stimulus law proposed by Congress is not necessary for now, the President’s spokesman said, noting the need to allow previous economic packages to run their course as well as the uncertainty of funding another multi-billion peso revival measure.

“Sa totoo lang po ang passage ng bills ay also dependent on the availability of funds. So titingnan po natin kung kailangan talaga ‘yan at may possible fund sources (The truth of it is that all bills are dependent on the availability of funds, so we will need to study whether a new round of stimulus is necessary and can be funded),” Spokesman Herminio L. Roque, Jr., said at a televised briefing Tuesday.

Speaker Lord Allan Q. Velasco and Marikina Representative Stella Luz A. Quimbo earlier filed House Bill No. 8031, which if passed will become the Bayanihan to Arise as One Act (Bayanihan III). It provides for a third round of stimulus measures worth P420 billion, significantly larger than the amounts eventually approved for Bayanihan I, signed in March, and Bayanihan II, which became law in September.

Mr. Roque called the current stimulus measures sufficient, including the P4.5-trillion national budget, which is focused on reviving the economy. 

He also noted that President Rodrigo R. Duterte extended the effectivity of Bayanihan II, more formally known as Republic Act No. 11494 or the Bayanihan to Recover as One Act. The package, worth up to P165 billion to fund the response to the pandemic, had originally been due to expire on Dec. 19.

Separately, the head of the government’s vaccine procurement and distribution effort, Secretary Carlito G. Galvez, Jr., said he welcomed measures that facilitate the procurement and import of vaccines.

“Iyong mga kailangan po natin na mga law na maipasa para matulungan po tayo na mapabilis po ‘yung pagpunta po dito ng vaccine (What we need right now are laws that expedite the arrival of vaccines),” he said at a televised meeting of Cabinet officials late Monday, in remarks quoted by a Palace statement, in which he thanked Congress for the effort to legislate Bayanihan III. 

He specifically cited provisions in the Bayanihan III bill to indemnify vaccine recipients that suffer from side effects after being administered their shots and to grant vaccine imports tax and duty exemptions. — Kyle Aristophere T. Atienza

Speaker says third stimulus enjoys broad support in House

A MAJORITY of the membership of the House of Representatives supports the proposed third Bayanihan economic stimulus package worth P420 billion, Speaker Lord Allan Jay Q. Velasco said.

In a statement Tuesday, Mr. Velasco said House Bill No. 8628 or the proposed Bayanihan to Arise as One Act is backed by 162 members, including those belonging to the supermajority, minority and independent blocs.

The proposed P420-billion package is designed to help the economy recover from the coronavirus disease 2019 (COVID-19) pandemic. It was filed last week by the Speaker and Marikina City 2nd District Representative Stella Luz A. Quimbo.

Among the bill’s supporters is Albay 2nd District Rep. Jose Ma. Clemente S. Salceda, who cited the bill’s provisions aiding businesses and individuals.

“In the pursuit of an economic rebound, restoring public trust and confidence in social and economic institutions is essential… Thus, it is important that the government take the lead in promoting business confidence and social welfare through increased, well-targeted spending,” he said in a statement.

Deputy Speaker and Ilocos Sur 2nd District Rep. Kristine Singson-Meehan said in a statement that the bill addresses the needs of sectors whose recovery is crucial.

“The sectors that will benefit from the interventions provided for in the bill are well-targeted, which provides an assurance that the proposed funds won’t go to waste and… will surely help the economy recover from COVID-19,” she said.

The third Bayanihan package includes P108 billion for social amelioration program assistance to families affected by the pandemic; P100 billion for capacity-building of establishments from critically impacted industries; P70 billion for capacity-building for workers in the agriculture; and P52 billion for subsidies to help small businesses retain their employees.

The fund also lists P30 billion for the labor department’s programs for the unemployed; P30 billion for internet expenses for educational institutions; and P5 billion for the rehabilitation of typhoon-affected areas.

The first Bayanihan package, the Bayanihan to Health as One Act, was signed on March 2020. It gave President Rodrigo R. Duterte special powers to realign the 2020 budget for programs worth P275 billion to address the government’s immediate needs in response to the initial lockdown, including assistance to poor families. The second Bayanihan law, the Bayanihan to Recover as One Act, was signed in September and was valued at P140 billion, supplemented by about P20.5 in additional funding subject to availability.

Separately, 30 legislators signed House Resolution No. 1558, which called for an investigation into the use of Bayanihan II funds. AAMBIS-OWA Party-list Rep. Sharon L. Garin said only P76.2 billion from the second package was released as of November. She called further delays in utilizing the funds a “disservice” to the country.

“The pandemic is now only a month shy from reaching its first year and the country is still reeling from the impact of an economic nosedive. If we don’t act on this, the economic revival we all hope for will not materialize,” she said. — Gillian M. Cortez

China demand for PHL nickel strong if Indonesia ban stays

DEMAND FOR Philippine nickel ore will remain high in China if Indonesia maintains its nickel export ban, industry officials said Monday.

“As long as Indonesia keeps its nickel export ban, demand for Philippine nickel ore from China’s NPI (nickel pig iron) plants will remain strong,” Chamber of Mines of the Philippines (COMP) Vice-President for Communications Rocky G. Dimaculangan told BusinessWorld in a mobile message.

Indonesia banned nickel ore exports last year to help develop a domestic processing industry, which would allow it to capture more value-added from ore rather than exporting the ore to be processed in China.

As early as April 2020, S&P Global Market Intelligence noted that China had grown more dependent on the Philippines to supply nickel laterite ore for its NPI producers in the “absence of nickel ore from Indonesia.”

According to Mr. Dimaculangan, the main driver of nickel prices will be electric vehicles, with the global price benchmark set at the London Metal Exchange (LME). 

“Given the growing demand for nickel from the electric vehicle market, LME nickel prices (are) expected to remain strong,” he said. 

On Tuesday, COMP said it expects gold prices to “remain close to or even above 2020 levels” this year. 

“We anticipate central banks and governments to sustain their high monetary and deficit-spending stimulus programs even as economies slowly recover from the COVID pandemic following the worldwide vaccinations,” Mr. Dimaculangan said. — Angelica Y. Yang

Import quota panel backs plan to increase pork, hog imports 

THE Department of Agriculture (DA) said Tuesday that a council which helps determine quotas for imports entitled to tariff rates under the minimum access volume (MAV) system has backed its plan to import more pork.

It said the MAV Advisory Council “endorsed” the DA’s plan to raise import volumes entitled to MAV tariff rates, as the government scrambles to increase the pork supply and contain inflation following drastic reductions to the domestic hog population in Luzon due to an outbreak of African Swine Fever.

Agriculture Secretary William D. Dar said at a briefing that the council recently endorsed expanding the MAV allocation for pork to 388,790 metric tons (MT) from 54,000 MT, more than double than the DA’s original proposal of 162,000 MT.

Imports beyond MAV quotas must pay a 40% tariff, or 10 percentage points more than the imports within the quota.

The advisory council’s endorsement has yet to be discussed by the MAV management committee, which is chaired by the DA with representatives from the Departments of Trade and Industry, Finance, and Agrarian Reform, Mr. Dar said. 

Any increase in the import quota would authorize traders and hog raisers to import both live hogs and pork products, he said. 

Mr. Dar said a proposal to further lower tariffs on pork for one year is now pending at the Tariff Commission.

Samahang Industriya ng Agrikultura Chairperson Rosendo O. So, who was invited to speak at the briefing, said: “There is no reason to lower the tariff on pork imports” because “importers can make money with the current tariffs.”

“Even with cold storage fees and delivery fees, importers can make money,” he said, noting that importers have no complaints about the current tariff.

Mr. Dar said the DA is currently extending zero-interest working-capital loans to vendors’ associations in public markets in the National Capital Region, to help them deal with the surge in pork prices.

The market vendors’ financing program allows vendors’ associations to borrow up to P5 million, payable in three to five years. 

The program, which will be administered by the DA’s Agricultural Credit and Policy Council, will enable vendors to buy hogs directly from hog raisers in the countryside “and sell these at reasonable prices to consumers in Metro Manila,” Mr. Dar said in a statement. — Kyle Aristophere T. Atienza

Hospitality industry seeking gov’t clearance to stage weddings, events

HOSPITALITY-INDUSTRY professionals are asking the government to loosen its restrictions on events like weddings, noting that hosting such events would help make up for the weak rates which the industry is currently charging.

The Organization of Hotel Sales and Marketing Association (HSMA) said establishments like hotels need the additional revenue sources to survive the lockdown.

“Occupancy percentage levels may be high for some hotels but this should not be construed as a (positive) situation. Rates extended to this market segment (are) way below the usual rate — some almost just break even,” the group said in a letter to the Tourism department Saturday.

“Total revenue generated may just be enough to sustain operating costs of the hotels and pay the salaries of our employees,” the group said.

The government currently allows restaurants and other venues within hotel premises to host such events, subject to restrictions, though standalone event venues and hotels used as quarantine facilities may not do so. Venues that are allowed to hold events are limited to activities like workshops, seminars, and trade shows up to 30% capacity.

Hotels have been suffering from the loss of business due to the quarantine, with the most prominent casualty so far, the Makati Shangri-La Hotel, which announced a temporarily shutdown beginning this month.

HSMA proposed health and safety guidelines to facilitate the staging of more events, including the segregation of guests in quarantine accommodations from event guests via separate access to public areas, elevators, and entrances.

HSMA also said many venues have large spaces that would allow for physical distancing.

The World Health Organization last year said that organizers of small public gatherings should brief guests about precautionary measures, choose outdoor spaces when possible, minimize crowding by staggering arrivals, and provide hygiene supplies.

“Cancelling a planned event is an option that should always be considered, especially in case of non-essential events or when precautions cannot be implemented or adequately communicated,” it said.

HSMA members represent 150 hotels. — Jenina P. Ibañez

Accreditation proposed for auto repair shops, freight forwarder, DTI says

AUTO REPAIR shops and freight forwarders may be required to seek accreditation as a consumer protection measure, the Department of Trade and Industry (DTI) said.

The DTI held an online hearing last week to consider the proposal, which contemplates the issuance of “seal of approval” signage on the premises of such businesses.

In a statement Tuesday, the DTI said the signage could feature a government logo and a quick response code.

The potential rule would apply to freight forwarding services and motor vehicle repair and services.

The rule could apply to businesses servicing heavy equipment, electrical, air-conditioning and refrigeration equipment, medical and dental equipment, other consumer mechanical and industrial equipment, and engines, as well as engineering services businesses.

One segment that could be required to seek accreditation is businesses servicing consumer products, as defined by the Consumer Act of the Philippines.

DTI Fair Trade Enforcement Bureau Director Ronnel O. Abrenica said that the signage, also known as a “plate of recognition,” can be taken by consumers as a sign that the service provider underwent government accreditation.

“This will also help business establishments in promoting fair and quality service to consumers while building consumer confidence in the area,” Undersecretary Ruth B. Castelo said. — Jenina P. Ibañez

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