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Dollar in doldrums as recovery optimism thrives

SINGAPORE – The U.S. dollar fell to a three-week low on Tuesday, sterling hit an almost three-year high and commodity currencies rose as vaccination progress added to investors’ recovery hopes.

The buoyant mood, and a sell-off in U.S. Treasuries, also dragged on the safe-haven Japanese yen, which fell through its 200-day moving average against the dollar and struck multi-year lows against the euro, Aussie and Swiss franc.

The yen last traded 0.2% weaker at 105.53 per dollar. The dollar index, which measures the greenback against a basket of majors, fell 0.1% to 90.240, its lowest since Jan. 27 and the euro hit its highest since that date.

The dollar traded near milestone lows against other currencies.

The Chinese yuan was on the brink of rising past 6.4 per dollar for the first time since mid-2018. The risk-sensitive Australian dollar hit a one-month high of $0.7802 and the kiwi made a five-week peak of $0.7257.

“It’s a risk-on, weaker-dollar mood taking over,” said Bank of Singapore currency analyst Moh Siong Sim, as investors focus on a global bounce back in growth, inflation and spending.

He said investors were weighing up whether the recovery would be U.S.-led, which could support the dollar, or much broader, and thus negative for the greenback as global trade picks up.

“Things right now reflect greater comfort with the story of a synchronised global recovery, which is why we are seeing a weaker dollar,” he said.

Sterling, which has led the charge, extended gains to hit $1.3946, its highest level since April 2018 as Britain leads the world in per-capita vaccination speed. The currency has gained almost 3% from early-February lows.

The euro crept 0.2% higher to $1.2150 to re-test recent resistance at that level. Rising oil prices lifted the Canadian dollar and Norwegian crown to multi-week highs.

Soaring bitcoin hovered just short of $50,000, as profit-taking arrested a steep rally which has driven the cryptocurrency over 60% higher so far in 2021.

 

YIELDS AND YEN

Besides the dollar, the Japanese yen has been the other casualty of the broad rally in financial markets and it hit a one-week low on Tuesday.

Recent equity gains – global stocks have climbed for a dozen days straight – have been matched by growing expectations for higher inflation, especially as central banks keep promising to keep rates low for a long time.

Those expectations were further boosted by a jump in oil prices this week, as a cold snap shuts Texan wells, and have driven U.S. Treasury yields to their highest since March.

That can affect the yen because Japanese investors are acutely sensitive to any rise in nominal U.S. yields, especially as they extend above anchored Japanese returns.

Benchmark ten-year U.S. yields are now 33 basis points higher for the year so far and the yen about 2% lower.

The yen also hit its lowest since late 2018 against the euro and the Australian dollar and hit a five-year low of 118.80 yen per Swiss franc.

“The yen has been the worst performing currency of 2021, with its negative correlation to U.S. Treasury yields proving to be the biggest dampening factor,” said Francesco Pesole, currency strategist at Dutch bank ING in a note to clients.

“When adding weak safe-haven demand as the global recovery gathers pace, some additional trimming of yen net long positions may be on the cards.”

Ahead on Tuesday, investors are looking to euro zone growth estimates, a German sentiment survey and U.S. manufacturing data to gauge the relative pace of the world’s pandemic recovery. – Reuters

Syringe shortage hampers Japan’s COVID-19 vaccination roll out

TOKYO – Japan is scrambling to secure special syringes to maximize the number of COVID-19 vaccine shots used from each vial, but manufacturers are struggling to ramp up production quickly, raising fears that millions of doses could go waste.

Japan, with a population of 126 million, last month signed a contract with Pfizer Inc to procure 144 million doses of its vaccine, or enough for 72 million people, with the vaccination campaign set to start on Wednesday.

One vial is meant for six shots, Pfizer says, but it takes special syringes that retain a low volume of solution after an injection to extract six doses, while only five shots can be taken with standard syringes that the government has stored up in preparation for the inoculation drive.

“We are still trying to secure these special syringes,” Chief Cabinet Secretary Katsunobu Kato said on Tuesday.

He did not directly answer questions when asked last week whether the shortage meant the number of shots Japan can administer would be reduced.

Both a Pfizer Japan spokeswoman and a Japanese health ministry official declined to say whether the contract to supply Japan with 144 million doses of vaccine by the end of the year is based on six doses being taken from each vial.

Inoculating its population swiftly is a top priority for Prime Minister Yoshihide Suga’s government as he is determined to hold the Tokyo Olympics this summer after the Games were postponed for a year due to the coronavirus pandemic.

In an bid to minimize the amount of vaccine left unused in syringes and vials, the government is asking medical equipment manufacturers to boost output of the low dead-space syringes, but there are doubts whether that can be done quickly enough.

Nipro Corp, which runs a Thailand plant capable of making 500,000 units a month, said it planned to boost its monthly capacity to a few million, but that it would take up to five months to reach that goal.

“We are getting a request from the health ministry and we need to take some steps. But it’s not something we can do overnight. It’s another four to five months before we can ramp up sharply,” a Nipro spokeswoman said.

Another major Japanese medical gear maker Terumo Corp said it had started developing syringes fit for extracting six doses from a vial, but that it was too early to say when it can start commercial output.

Although daily cases have been in decline in recent weeks in Japan after peaking in early January, Tokyo and nine other prefectures are still under the coronavirus state of emergency.

Japan has seen cases total around 418,000, with 7,042 deaths, according to public broadcaster NHK. – Reuters

Malaysia to get first batch of Pfizer-BioNTech COVID-19 vaccines on Feb. 21

KUALA LUMPUR – Malaysia will get its first batch of COVID-19 vaccines produced by U.S. and German drugmakers Pfizer and BioNTech on Feb. 21, and kick off its inoculation drive five days after that, Prime Minister Muhyiddin Yassin said on Tuesday.

Mr. Muhyiddin said he will be the first to receive a dose of the vaccine when the campaign starts on Feb. 26.

“This comprehensive programme is aimed at ensuring herd immunity in the community so that we can stop the spread of COVID-19 infections and bring an end to the pandemic,” Mr. Muhyiddin said at the launch of the vaccination programme handbook.

Malaysia has seen a sharp spike in coronavirus infections in recent weeks, after having largely reined in the epidemic for most of 2020. It has reported a total of over 260,000 COVID-19 cases, the third highest in Southeast Asia after Indonesia and the Philippines, and 975 deaths.

The Southeast Asian country has said it aims to cover at least 80% of its 32 million population within a year and has secured more than enough vaccines to reach the target.

Apart from its deal with Pfizer and BioNTech , Malaysia also has supply agreements with Britain’s AstraZeneca, Russia’s Gamaleya Research Institute, and China’s Sinovac Biotech Ltd and CanSino Biologics .

Mr. Muhyiddin said earlier this month that the first phase of the vaccine rollout from February to April will involve 500,000 frontline workers, followed by 9.4 million high-risk individuals who will be vaccinated between April and August.

A third and final phase will involve more than 16 million adults aged 18 and older, and will run from May to February next year.

The government has said it will extend its free COVID-19 vaccination programme to all foreigners residing in the country, but that priority will be given to Malaysians. – Reuters

Homes that take care of your loved ones

For nearly a year now, staying home has been a habit for everybody. As families remain cloistered in their houses for time indefinite, they also get more creative in celebrating the year’s most meaningful events. From birthdays, anniversaries, Christmas, New Year, and even Valentine’s Day—all these moments had to be celebrated at home.

Camella Freya

With social spaces limited due to health restrictions, each family members’ creativity was tested to make these occasions as memorable as possible.  Instead of celebrating and eating out in malls and restaurants, couples scour the ends of online sites and delivery services for Valentine’s Day. Kids spruce up the balcony for a surprise al fresco dinner for mom and dad. Young couples prepare for a more laid-back movie night at home. The common denominator in all of them? A safe sanctuary to spend time in.

As the future remains uncertain and families do their best to adapt to a new normal, it is crucial to have a safe home where one could rest and get a sense of normalcy. While families adjust, it also pays to have a dwelling space that can cater to their dynamic needs. With over forty years of experience in home- and township-building, Camella brings just that.

Camella believes that finding comfort at home is the best gift anyone can have this year. The brand is continuously working on bringing premium lifestyle experiences to make each member of the family feel cared for. By considering its residents’ needs and wants, Camella’s romantic gesture pays attention to the smallest details of every family’s dream home and community.

Proving its authority as the pioneer in creating townships, Camella continues to expand its product features to take care of its families. With its newest line of SmartHomes, Camella prepares its residents for a safer future with the power of technology. For more information on the brand’s latest upgrades, visit www.camella.com.ph.

Camella is the flagship brand of the country’s largest homebuilder, Vista Land & Lifecapes, Inc. Visit www.vistaland.com.ph for more information.

Overseas Filipinos’ cash remittances (Dec. 2020)

REMITTANCES slipped by 0.8% in 2020, the first annual contraction in two decades, as some overseas Filipino workers (OFWs) lost their jobs while others tightened their belts amid the pandemic. Read the full story.

Overseas Filipinos’ cash remittances (Dec. 2020)

Remittances dip as OFWs feel the pinch

Cash remittances coursed through banks stood at $29.903 billion in 2020. — REUTERS

By Luz Wendy T. Noble, Reporter

REMITTANCES slipped by 0.8% in 2020, the first annual contraction in two decades, as some overseas Filipino workers (OFWs) lost their jobs while others tightened their belts amid the pandemic.

Cash remittances coursed through banks stood at $29.903 billion last year, slightly lower than the record $30.133 billion in 2019, according to data released by the Bangko Sentral ng Pilipinas (BSP) on Monday.

Remittances saw its first annual contraction since the -0.3% seen in 2001 and the worst since the -18.3% logged in 1999. However, the decline was better than the 2% contraction forecast by the central bank for the full year.

For ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa, remittances may have shrank steeper than BSP data when adjusted for exchange rate movements.

“In peso terms, remittances have actually contracted by 4.8% despite OFWs struggling to find a way to send home more dollars to pay for fixed peso expenditures such as tuition or mortgage payments,” Mr. Mapa said in a note.

In 2019, the peso hovered beyond the P50-per-dollar level and even reached P52 a dollar. By 2020, the peso appreciated to reach the P48-a-dollar level, which means OFWs needed to send more to provide for their families during the crisis.

The BSP said inflows from economies such as Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates (UAE), Germany, and Kuwait declined last year.

On the other hand, money sent home by OFWs in the United States, Singapore, Canada, Hong Kong, Qatar, South Korea, and Taiwan increased.

This difference showed the “disparate effects” of policies of fiscal support in host economies in relation to the ability of OFWs to continue supporting their families in the Philippines, Security Bank Corp. Chief Economist Robert Dan J. Roces said.

“For instance, the fiscal support injection in the US allowed OFWs based there to continue sending that contributed to it as the country with the largest source. Contrast this to other traditionally strong origin countries — such as Saudi Arabia — which faltered as lockdowns forced work stoppage and sent workers home,” Mr. Roces said in a text message.

BSP data showed the United States had a 39.9% share of total remittances in 2020. Inflows from the US, along with Saudi Arabia, Japan, United Kingdom, United Arab Emirates, Canada, Hong Kong, Qatar, and South Korea made up 78.6% of the total.

In December alone, cash remittances dipped 0.4% to $2.89 billion from $2.902 billion a year earlier. Inflows, however, reached a 12-month high.

Money sent home by land-based OFWs fell by 0.7% to $2.297 billion, while those employed in ships remitted $593.2 million, up 0.8%.

Personal remittances, which include inflows in kind, dropped by 0.8% year on year to $33.194 billion in 2020. In December alone, personal remittances slipped 0.3% to $3.205 billion.

This year, the BSP projects cash remittance to grow by 4% on the back of an expected global economic recovery.

Mr. Mapa said remittances will see a “moderate growth this year” as the peso strengthens and more sea-based workers are deployed.

“With vaccination rollouts ongoing across the globe, job prospects may brighten for OFWs in the coming months which will be crucial in supporting sagging domestic incomes due to severe job losses and poor consumer confidence,” he said.

Latest data from the Department of Foreign Affairs showed more than 351,000 OFWs have already been repatriated since the outbreak in February last year.

“It [number of OFWs retrenched] sends a strong signal that authorities should offer an alternative source of income to those affected,” Colegio de San Juan de Letran Graduate School Dean Emmanuel J. Lopez said in an e-mail.

Overseas Filipinos’ cash remittances (Dec. 2020)

PHL dollar reserves slip in January

The Philippines’ gross international reserves (GIR) settled at $108.8 billion as of end-January. — REUTERS

THE Philippines’ gross international reserves (GIR) dipped in January as the National Government paid its foreign debt obligations and the central bank adjusted the valuation of its gold holdings.

Data from the Bangko Sentral ng Pilipinas (BSP) released on Monday showed the foreign exchange buffers decreased by 1.19% to $108.799 billion as of end-January, from the record $110.117 billion as of end-December.

This was still, however, 25% bigger than the $86.868-billion level a year ago and also exceeded the BSP’s $102-billion projection by end-2021.

“The month-on-month decrease in the GIR level reflected outflows mainly from the foreign currency withdrawals of the national government from its deposits in the BSP to pay its foreign currency debt obligations and revaluation adjustments from the BSP’s gold holdings due to the decrease in the price of gold in the international market,” the central bank said in a statement.

Partially offsetting factors were inflows from the BSP’s foreign exchange operation and income from investments abroad.

Last year, the government borrowed P2.64 trillion, sourced from both local and foreign entities to support its pandemic response.

Ample foreign exchange buffers protect the country from market volatility and ensure the country is capable of paying its debts in the event of an economic downturn.

At the end-January level, the country’s dollar reserves is enough to cover around 11.6 months’ worth of imports of goods and payments of services and primary income, the BSP said.

It is also equivalent to about 9.4 times the country’s short-term external debt based on original maturity and 5.1 times based on residual maturity.

During the month, the value of the gold reserves dropped 7.86% to $10.692 billion from $11.605 billion as of end-December. It was also 33% higher than the $8.015 billion a year ago.

Gains from investments abroad, which made up the bulk of the GIR, also dipped by 1.2% to $92.527 billion from $93.644 billion a month ago but increased by 24.4% from  the $74.364 billion a year earlier.

On the other hand, foreign currency deposits reached $3.532 billion, rising by 25% from the $2.821 billion in the prior month and by 30% from the $2.723-billion level as of end-January 2020.

Special drawing rights, or the amount the country can tap from the International Monetary Fund (IMF) was maintained at $1.232 billion for the second straight month.

Meanwhile, buffers kept with the IMF slightly rose 0.03% to $813.4 million from $813.1 million as of end-December and jumped 38% from the $587.9 million logged a year earlier.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said GIR may again reach a record high in the coming months as the pandemic drags on.

“Proceeds of foreign borrowings and other fund-raising activities amid near record low interest rates by the country’s biggest companies/conglomerates could add to the country’s GIR,” Mr. Ricafort said in a text message.  — Luz Wendy T. Noble

GDP growth may return to the pre-pandemic level by Q4 2022

THE Philippine economy is expected to post the second-highest growth in Southeast Asia this year, according to data and analytics company GlobalData. — PHILIPPINE STAR/MICHAEL VARCAS

THE Philippines may continue to see a lackluster economic recovery, returning only to pre-pandemic gross domestic product (GDP) level by the fourth quarter of 2022, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said on Monday.

In a briefing on Monday, Mr. Mapa said the central bank is likely to provide continued support for the economy by being accommodative and avoiding any further policy actions this year, before going for a 50-basis-point rate cut in 2022.

This year, he said the economy may grow by 5.1% but mainly due to base effects from the 9.5% contraction in 2020. This is a less optimistic forecast than the 6.5% to 7.5% growth outlook by economic managers.

“COVID-19 wiped out three years of economic gains and now we’re sort of operating at that base. The real question will be: What will be the growth trajectory after 2021 when the base effects have been washed out?” Mr. Mapa said.

With the job market still “not looking rosy,” consumption, which fuels 70% of the economy, is unlikely to see hefty recovery. Mr. Mapa said it will be “difficult to expect a strong bounce back” when unemployment remains high.

The jobless rate in October stood at 8.7% representing about 3.813 million unemployed Filipinos.

In terms of capital formation, the decline in bank lending suggests investments may likely to bounce back soon, Mr. Mapa said.

For the first time in over 14 years, outstanding loans by banks declined 0.8% in December following the already tepid 0.5% in December.

“Even though the BSP has cut the borrowing cost, [rates] have not really followed suit in 2020. This has been tied to banks being a little more circumspect in giving out loans as there’s a lot of risks out there,” he said, noting bank lending may remain tepid in the next couple of months.

However, Mr. Mapa said government spending could be a saving grace, but fiscal measures, including the P4.5-trillion national budget, have been modest.

“Yes, it’s the biggest budget in history, however, maybe not commensurate to the drop in GDP,” he said.

On the monetary side, Mr. Mapa is pricing in a pause for the rest of 2021 before the central bank likely goes for a 50-bps rate hike next year.

“This pause allows them to provide stimulus given the low rates but sort of at the same time achieving their inflation targeting price stability mandate,” Mr. Mapa said.

The central bank maintained the key policy rate at a record low of 2% last week.

REBOUND YEAR
Meanwhile, the Philippine economy is expected to post the second-highest growth in Southeast Asia this year, data and analytics company GlobalData said.

In a statement, GlobalData said Philippine GDP is projected to grow by 8.4% this year, after a 9.5% GDP contraction in 2020.

This would be the second-fastest GDP growth among nine ASEAN countries tracked this year.

Sought for further details, GlobalData did not respond to queries as of press time.

GlobalData expects the broader Association of Southeast Asian Nations (ASEAN) region to grow by 6% this year, as the coronavirus infections taper off and international trade picks up.

Fatality rate due to COVID-19 in Indonesia and the Philippines have fallen to 2.7% and 2.1%, respectively as of February. Meanwhile, the death rate in Malaysia, Thailand and Singapore are near zero percent.

“Due to the implementation of non-tariff measures on essential goods among the ASEAN nations, trade is expected to increase in 2021. Trade windows are set to open for ASEAN nations with the signing of Regional Comprehensive Economic Cooperation (RCEP) in November 2020, which will further spur economic integration,” Gargi Rao, an economic research analyst at GlobalData was quoted as saying.

Ms. Rao expects a “sharp recovery” happening in the second half.

Aside from improving the trade environment, she said the region’s manufacturing sector will also bounce back this year given a stronger health sector, the global vaccine rollout and a steady recovery in demand and production.

In the Philippines, factory activity surged to a two-year high in January with a Manufacturing Purchasing Managers’ Index (PMI) of 52.5.

Vietnam is still poised to lead the economic growth this year, according to GlobalData with a projected 8.5% expansion in 2021 from a 1.7% estimated uptick last year.

“GlobalData forecasts Vietnam to be the fastest-growing economy with a real GDP growth of 8.5% in 2021. Vietnam’s growing trade with the EU and its robust fiscal policies have helped the economy to witness an uptick in manufacturing and service sectors growth,” the statement read.

For the rest of the region, Malaysia is estimated to grow by 7.1% this year, Cambodia by 6.7%, Singapore by 5.8%, Myanmar by 5.4%, Indonesia by 5.2%, Thailand by 4.4% and Brunei by 2.5%.

“Increasing investment and recognizing open trade are key to put ASEAN economies on a steady growth path, along with effective vaccination for COVID-19 in 2021. An uptick in retail trade and growing demand for e-commerce will bring in new capital to spur growth,” Ms. Rao said. — Luz Wendy T. Noble and Beatrice M. Laforga

Cavite gov’t invites firms to bid for Sangley airport project

By Arjay L. Balinbin, Senior Reporter

THE Cavite provincial government is once again inviting firms to submit joint venture proposals for the Sangley international airport project, less than a month after it canceled an earlier deal with MacroAsia Corp. and China Communications Construction Company (CCCC).

In an announcement published on Monday, the Cavite government said the project feasibility study including schedules and updates, instructions to candidate joint venture partners, and the draft joint venture and development agreement will be available for distribution to interested parties from Mach 1 to March 30.

Interested parties should first submit an intent letter, sign the nondisclosure agreement, and pay the non-refundable participation fee of P1 million or $20,000 before they could obtain copies of the bid documents from the Cavite government, which serves as the implementing agency for the project.

Among the responsibilities of Cavite’s joint venture partner is to provide the necessary equity investment, debt financing, and credit enhancements.

The selected partner should also secure or perform engineering, procurement, and construction services for the land and airport development components of the 1,500-hectare Sangley airport project.

The Cavite provincial government said the deadline for the submission of the proposals is on May 4.

“Under the terms of the project’s no objection clearance from the Department of Transportation, no sovereign loan or National Government guarantee will be granted,”  it said.

In a phone message to BusinessWorld, Cavite’s Public-Private Partnership Selection Committee Legal Officer Jesse R. Grepo said: “As of now, we haven’t received any formal inquiries yet.”

He noted there were some groups who expressed their intent, but did not submit bids.

“I can’t assume if the same are still interested now,” he added.

Only the MacroAsia-CCCC tandem submitted a proposal to develop the Sangley airport in 2019. Other groups that bought bid documents for the project were Metro Pacific Investments Corp. (MPIC); Prime Asset Ventures, Inc.; Philippine Airport Ground Support Solutions, Inc.; Langham Properties, Inc.; and Mosveldtt Law Offices.

“If still interested, previously registered entities that bought the request for proposals (bid documents) during the first competitive selection process launched in October 2019 would have to submit a new written expression of intent, update their registration details, and pay the renewal fee of P25,000 or $500,” the Cavite provincial government said.

The provincial government reserves the right to accept or reject any proposal, or to discontinue the second competitive joint venture selection process.

Cavite informed the MacroAsia-CCCC tandem on Jan. 26 of its decision to cancel the notice of selection and award for the Sangley airport project it had issued on Feb. 12, 2020.

Cavite Governor Juanito Victor “Jonvic” C. Remulla, Jr. said the “various deficiencies in the submission of requirements to conclude the joint venture agreement” led to the province’s decision.

MPIC Chairman Manuel V. Pangilinan and MacroAsia Chief Financial Officer Amador T. Sendin had yet to respond to BusinessWorld’s requests for comment.

MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group.

Trade department mulls order vs installment-only vehicle payment schemes

Motorcycle ownership has increased in recent years. — PHILIPPINE STAR/MICHAEL VARCAS

THE Department of Trade and Industry (DTI) may draft an order against installment-only payment schemes for vehicles, including motorcycles.

Consumers must have the choice to pay either the full amount in cash to avoid interest or by installment, Trade Secretary Ramon M. Lopez said during a Senate hearing on Monday.

The DTI has received reports that dealers are encouraging consumers to buy vehicles only on an installment basis, he said. Mr. Lopez added that vehicle dealers should inform the buyers of other options.

In a separate mobile message to reporters, Mr. Lopez said the DTI will conduct a legal review on the matter, after which it could issue a department order or circular, depending on what the law allows.

Mr. Lopez said it is possible that dealers get incentives from financial institutions for insisting on installment-only payment schemes.

“Also, installment facilitates the easier acquisition of motorcycles or even cars,” he said.

Senator Richard J. Gordon said during the hearing the dealers implement installment-only schemes to compete against other dealers that use the same process.

“Bakit ayaw tumanggap ng cash? Babayaran ng tao. Karapatan ba ng dealer na ’di tatanggap ng cash? Ibig sabihin may pinaplanong masama ’yan, (Why won’t they accept cash that people would pay? Is it the dealer’s right not to accept cash? This means they’re planning something bad),” Mr. Gordon said, explaining that those who pay by installment and are unable to pay are forced to restart the payment process.

Those who are willing to pay by cash and in full should be able to do so, the senator said, and should not be required to pay by installment.

The DTI’s fair trade enforcement bureau has received 3,060 consumer complaints relating to motorcycles, Mr. Lopez said, citing reports about defective units and vehicle sales under installment-only schemes.

Around 287 of the consumer complaints have been resolved through mediation, he said. The bulk of the complaints, including those on delays in releasing receipts and certifications relating to plate numbers or transfer of registration or insurance, have been raised with the Land Transportation Office.

Mr. Gordon on Monday led the Senate Blue Ribbon Committee hearing on Alleged Malfeasance and Nonfeasance in the Implementation of the Motorcycle Crime Prevention Act, which probes an alleged delay of the law’s implementation.

Republic Act 11235 was passed in 2019 to protect citizens against crimes done by people on motorcycles by making number plates larger and more readable by witnesses, even from a distance. — Jenina P. Ibañez

Home buyers now looking for smart, interconnected properties

By Patricia B. Mirasol, Reporter

TO MEET the lifestyle demands of the new normal, experts said real estate and telecommunications firms should work together to offer properties and communities that are “smart” and interconnected.

Digital connectivity is a must and can be leveraged as a differentiator among property buyers, they added.

“The intention is to enable property developments that are digital savvy and future proof,” Michelle Y. Ora, head of strategic property of Globe Telecom, said during a Feb. 11 roundtable discussion on intelligent homes organized by Lamudi, an online real estate marketplace.

“Today, property buyers look for power, water, and internet connectivity. Having a strong and reliable connectivity in a development is one of the things that make customers decide to buy,” she added.

In the “A Forecast on Philippine’s Residential and Commercial Real Estate in 2021” report, Lamudi said the property sector may be well on its way to recovery as economic factors and investor attitude improve. The general demand for residential and commercial real estate in the country is expected to bounce back this year.

Lamudi also noted that apartments experienced the greatest growth in the number of listings from the first quarter to the last quarter of 2020. This may be in response to the growing number of property seekers either looking for affordable housing solutions near the workplace, or investment opportunities.

“We’re seeing a demand for smart buildings, homes, and condominiums,” Joey R. Bondoc, associate director for research of Colliers International Philippines, said during the same forum. “One of our recommendations for buyers is to look for projects that are adaptable to the work-from-home scheme.”

Colliers believes most companies will continue to implement work-from-home schemes.

“Investors, especially first-time residential investors, should look at structures where it is possible for employees to support their job requirements moving forward. This is something developers can leverage, especially with new projects,” Mr. Bondoc said.

Colliers also noted the modernization of warehouses and the conversion of vacant mall spaces into fulfillment centers and logistics facilities.

“There has been a rising demand for e-commerce even pre-pandemic,” Mr. Bondoc said. “To be able to tap this demand for logistics, developers have been modernizing their existing warehouses.”

The country’s consumer-driven economy and the prolonged lockdown have further increased the demand for in-mall facilities, particularly in Metro Manila. “Many of the deliveries happen in Metro Manila. Mall operators are doing what the market requires at this point,” he said.

Fiber is the basic requirement for telecommunications infrastructure, Ms. Ora said. Such infrastructure has to be planned three to four years before the completion of a building.

“Be ready for whatever customers need in the future,” she added. “When we partner with [property developers], it’s to help build with brand equity. That can be the differentiator offered to buyers.”

There is a need to update the National Building Codes — which were written in the 1930s — in order to enable widespread connectivity. “In other countries, it’s the government that deploys the fiber infrastructure on the road,” said Ms. Ora. “Telcos don’t have to worry about right of way and red tape.”

Ayala unit secures funding for Australia solar farm

THE Ayala group and its Australian partner have secured AU$619 million, or around P23.1 billion, in bank financing for a 400-megawatt (MW) solar farm project in New South Wales.

In a press release on Monday, listed firm AC Energy Corp. said Australian banks Westpac and Commonwealth Bank of Australia, along with Bank of China, will provide debt financing for the initial stage of the project.

The financial closure for the project’s first stage would cover 400 MW of alternating current out of a combined 720 MW of solar power and 400 MW-hour (MWh) lithium-ion battery storage.

“This is the product of a fruitful partnership with UPC and our local Australian team. We look forward to helping Australia achieve and exceed its long-term decarbonization goals by continuing to develop and construct more renewable energy projects in the country,” said Patrice R. Clausse, chief operating officer of AC Energy International, in a statement.

He described the venture as AC Energy’s “major milestone” as it marked the firm’s first project in Australia.

AC Energy said that it had committed $320 million (P15.32 billion) of equity for the project, New England Solar Farm, which is under UPC\AC, a joint venture between AC Energy Infrastructure Corp. (ACEIC) and UPC Renewables Australia.

Ayala Corp. unit ACEIC holds majority interest in AC Energy.

The solar farm is seen to significantly contribute to AC Energy’s target of reaching 5,000 MW of renewables capacity by 2025, in line with its goal to become the largest listed renewables platform in Southeast Asia.

It is targeted to connect to the grid and initially start producing energy by July next year. The rest of the project is projected to begin operations around the end of 2023, AC Energy said.

The listed firm said that it is also planning to install a 400-MWh lithium-ion battery storage facility in the area, which would help in ensuring grid stability and provide energy at peak periods. The first 50 MWh of the facility, which is supported by the NSW Emerging Energy Program, is expected to become operational by the middle of next year.

Once completed, the solar farm would produce enough energy to power up around 250,000 typical households in New South Wales per year, and help fill in the gap left by the expected closure of the AGL Macquarie’s 2,000-MW Liddell Power Station by 2022.

The project is also seen to bring in 500 construction jobs, and will generate employment opportunities for locals in Uralla, NSW, and the region.

Green Light Contractors Pty. Ltd, the local subsidiary of Spanish-listed contractor Elecnor, S.A., is in charge of constructing the solar farm.

AC Energy said it expects the solar farm to participate in the NSW Electricity Infrastructure RoadMap bidding process, which aims to deliver lower energy prices to consumers.

“The New England Solar Farm is the first project within our large portfolio to reach financial close and we are very excited about building our first project in Australia,” UPC Renewables Executive Chairman Brian Caffyn said.

“This is a very large energy project even for Australia and we are proud to be associated with the New England Solar Farm and the local community and helping to transition NSW towards a clean, lower cost energy future,” he added.

Around two weeks ago, AC Energy President and Chief Executive Officer Eric T. Francia told reporters that the company is setting its sights on a new renewable energy target for 2030, where local and foreign projects would have a 50-50 portfolio mix.

On Monday, shares in AC Energy inched down 2.67% or 0.21 centavos to close at P7.66 apiece. — Angelica Y. Yang

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