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First Gen chooses two foreign firms for LNG carrier tender

A wholly-owned unit of First Gen Corp. on Friday said it has picked two foreign firms for the final stage of a tender for the supply of a floating storage regasification unit (FSRU) for its liquified natural gas (LNG) import terminal in Batangas.

In a disclosure to the stock exchange, First Gen said FGEN LNG Corp. is set to select BW Gas Limited or Hoegh LNG Asia Pte. Ltd. as its FSRU provider by the end of the month.

Norway-based BW Gas and Hoegh both specialize in the global market of transportation and LNG floating regasification services.

“The Project will allow FGEN LNG to accelerate its ability to introduce LNG to the Philippines as early as Q3 2022, to serve the natural gas requirements of existing and future gas-fired power plants of third parties and FGEN LNG affiliates,” the listed company said.

An FSRU, which typically has a storage capacity of between 125,000 and 170,000 cubic meters, has an onboard regasification plant which can turn LNG back into gas, and supply it directly into the gas network.

In October, FGEN LNG chose McConnell Dowell Philippines, Inc., the local unit of an Australian contractor, for the LNG terminal’s engineering, procurement and construction contract.

At present, First Gen and Japan’s Tokyo Gas Co., Ltd hold a joint cooperation agreement for the design, development, testing, commissioning, construction, ownership, and operations and maintenance of the interim offshore gas project.

Shares of First Gen slipped 4.38% or P1.35 to finish at P29.50 apiece on Friday. — Angelica Y. Yang

Alcantara’s ACR profit doubles in 2020

Alcantara-led Alsons Consolidated Resources Inc. (ACR) said on Friday that its net income attributable to the parent more than doubled to P325 million in 2020 from the previous year.

In a statement, ACR attributed the higher profits to the full operations of its power plants in Mindanao.

The listed company of the Alcantara group reported a consolidated net income of P1.87 billion last year, nearly twice the P974 million posted in 2019.

“Our power facilities have continued to dispatch power to our customers in order to ensure that the people of Mindanao have access to a reliable and steady supply of electricity in these difficult times,” ACR Executive Vice President Tirso G. Santillan said in a statement.

The firm’s consolidated revenues in 2020 surged to P9.47 billion from P6.8 billion in 2019.

“This year will see us continuing to pursue our new power projects in Sarangani Province, Zamboanga City, Zamboanga del Norte and Negros Occidental. This is our own contribution to the economic recovery of our country by helping create new jobs and stimulate the local economies in these areas,” Mr. Santillan said.

ACR is building a 14.5-megawatt (MW) run-of-river hydroelectric power plant in Maasim, Sarangani. The company said it is scheduled to begin its commercial run by early 2022. The hydro project will be ACR’s first venture into renewable energy.

The firm is planning to focus on renewables with at least seven other run-of-river hydro plants in various stages of development.

ACR also has two hydro facilities in the pipeline – the 22-MW Siayan (Sindangan) hydro plant in Zamboanga del Norte and the 42-MW Bago hydro plant in Negros Occidental.

Earlier this year, ACR announced that it has allotted around P6.54 billion as capital expenditures (capex) for four projects under development, including three hydro projects and one baseload thermal plant.

ACR shares in the local bourse improved 0.78% or 0.01 centavo to close at P1.29 apiece on Friday. — Angelica Y. Yang

3G usage drops as Globe customers shift to 4G LTE

Globe Telecom Inc. said that 3G (third generation) technology use for internet connection has dropped by almost half since May last year as more of its customers shifted to faster network technology.

The company in a press release on Friday said that the number of its customers using 3G dropped by 47.4% from May 2020 to January this year.

In that same period, the number of customers using LTE (Long Term Evolution) technology increased by 34%.

Globe Senior Vice President for Program Delivery, Network Technical Group Joel Agustin said that more of the company’s customers turned to 4G LTE to connect their devices for work and school during the lockdown.

“We have been anticipating the decline in 3G users as more customers are realizing the benefits of using 4G LTE for better data experience and faster internet speed,” he said.

The company expects 4G LTE use to increase further as it expands its network.

Globe Telecom shares closed at P1,870 apiece on Friday, down P70 or 3.61%. — Jenina P. Ibañez

Average spot market price up in March due to demand and generator outages — IEMOP

THE AVERAGE spot market price hit P4.23 per kilowatt hour (kWh) this month, nearly twice the February level, due to an increase in power demand and generator outages, the Independent Market Operator of the Wholesale Electricity Spot Market (IEMOP) said on Friday.

The IEMOP said in a press release that the rise was largely attributed to the “gradual surge in demand as the economy continues to recover from the restrictions brought about by the COVID-19 pandemic and as changes in the weather ensue due to the approaching dry season.”

It added that generator outages also contributed to this month’s increase in the spot market price. Based on IEMOP data, the operations of 13 generators were halted as of March 10.

In a media briefing on Friday, IEMOP Manager for Market Simulation and Analysis Division Trading Operations Department John Paul S. Grayda said that spot market prices were particularly high during the first week of March.

“Prices are projected to increase during the summer months relative to the WESM (wholesale electricity spot market rate) rate of P2 per kilowatt hour for the past five months,” Mr. Grayda said, noting that the P2 level might increase in the coming months.

The projected increase for the next few months will reach P 2.22 per kWh for April and P2.69 per kWh for May, subject emergency outages, government response to the pandemic, and occurrences of other force majeure, the IEMOP said, referring to its estimates based on the “base case supply and base week demand from April to June 2021.”

The market operator also announced that the commercial operations of its five-minute WESM is targeted to go live by June 26. — Angelica Y. Yang

PCC approves joint venture for Manila Waterfront City reclamation project

THE Philippine Competition Commission (PCC) has approved the joint venture between Waterfront Manila Premier Development, Inc. and the City Government of Manila that will build the Manila Waterfront City reclamation project.

The commission said in a decision signed on March 15 that the transaction does not substantially lessen competition, noting that it creates a new market.

“The transaction is a new area of investment formed for the creation of a residential and commercial real estate development project,” the decision said.

“This will expand the existing market and likely create an opportunity for the emergence of new markets for commercial and residential real estate within the City of Manila.”

The Manila Waterfront City reclamation project is a 318-hectare mixed-use development south of the Manila South Harbor.

Real estate developer Waterfront Manila will contribute capital and expertise, while the Manila government hands over rights over the municipal waters on which the project will be developed.

“The resulting unincorporated joint venture shall be governed by a sharing arrangement with 51% for Manila City Government and 49% for Waterfront Manila,” PCC said.

Noting that customers or commercial activity in the relevant geographic market will not be affected, the commission said it will take no further action. — Jenina P. Ibañez

Less than half of mining firms disclosed beneficial ownership information in 2020

MORE THAN HALF of mining firms in the country did not disclose their beneficial ownership as of end-2020, which is part of the country’s commitment to international standards, Finance Assistant Secretary Maria Teresa S. Habitan said on Thursday.

“As of Dec. 29, 2020, 29 extractive companies or about 44% of those that had been requested to disclose their beneficial ownership information complied with the requirement,” Ms Habitan said in an online forum.

“The other companies have either declined publication or have missed the deadline due to roadblocks in securing the necessary board resolution,” she added.

Ms. Habitan said beneficial ownership disclosure is part of the country’s commitment to the Extractive Industries Transparency Initiative (EITI), Open Government Partnership, and the Financial Action Task Force. It requires extractive industries to publish information related to beneficial ownership, including names of politically-exposed persons.

“To emphasize, beneficial ownership information publication was optional or voluntary. Those that declined publication faced no sanctions,” Ms. Habitan said.

Among local extractive companies, 37% did not participate while 18% complied partially.
Ms. Habitan said while some companies welcomed providing information related to beneficial ownership for the EITI report, they raised data privacy concerns.

“These companies gave PH-EITI a copy of their beneficial ownership declaration forms but refused to have this published,” she added.

EITI reports started in 2014 and have been used by policymakers to determine the payments the government can generate from the mining sector.

Heightened transparency in the industry is seen to increase payments made by extractive firms commensurate to their impact on the environment.

Ms. Habitan said authorities decided in February that policies related to reporting beneficial ownership will continue to be applicable for the 2021 and 2022 EITI reports in the absence of any regulation that would make it mandatory. — L.W.T. Noble

PCA Board creates transition committee to develop coconut industry

THE Philippine Coconut Authority (PCA) Board said on Friday that it has created a transition committee to be chaired by the Trade department, which aims to ensure a coordinated approach in developing the country’s coconut industry.

The Department of Agriculture (DA) said in a statement that the transition committee will later be absorbed into the PCA’s executive committee.

DA Secretary William D. Dar said the committee is tasked to help the ExeCom in “transitional matters, including governance and management arrangements, and initial program of work.”

“We are jumpstarting the process that will modernize and industrialize the country’s coconut sector, and greatly improve its export earnings with more value-added products,” Mr. Dar said.

“This is a huge game-changer, where all our efforts making use of the billion-peso coconut levy fund will lift our small coconut farmers and their families from abject poverty,” he added.

The creation of the committee was tackled by the PCA Board during a virtual meeting on Monday.

The board, which is currently made up of six government representatives, also approved on Monday the nomination and selection process of three coconut farmer leaders from Luzon, Visayas and Mindanao, PCA Administrator Benjamin R. Madrigal, Jr. said.

The PCA board is made up of the secretaries of Agriculture, Finance, Budget, Science and Technology, and Trade, as well as the PCA administrator.

During the meeting, Mr. Madrigal also presented other projects for approval, including the completion of the coconut farmers’ registry within 90 days and the crafting of the Coconut Farmers and Industry Development Plan, which will be submitted to President Rodrigo R. Duterte for approval within 120 days, among others.

Mr. Madrigal assured coconut farmers that the PCA is “committed to meeting the deadlines to ensure the timely delivery of the benefits they deserved.”

Mr. Duterte last month signed Republic Act 115421 or the Coconut Farmers and Industry Trust Fund Act which lets poor coconut farmers benefit from taxes collected from them decades ago, which now amount to around P76 billion.

The act also seeks to declare coconut levy assets as a trust fund. — Angelica Y. Yang

Central bank fully awards short-term bills

THE BANGKO SENTRAL ng Pilipinas (BSP) sold P70 billion in one-month securities on Friday despite the uptick in accepted yields as demand remained high.

Bids for the 28-day bills offered by the BSP on Friday reached P96.2 billion, higher than the P70 billion on the auction block as well as the P77.45 billion in tenders seen the previous week.

Accepted yields for the one-month debt papers ranged from 1.85% to 2.0499%, a narrower range compared to the 1.84% to 2.15% band seen a week ago. This caused the average rate of the papers to settle at 1.963%, higher by 1.86 basis points (bp) from the 1.944% seen at last week’s auction.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the rise in the yields of the BSP’s short-term bills reflected the trend seen in the US government bonds.

“The 28-day BSP securities auction yield continued to go up amid the latest rising trend in the benchmark 10-year US government bond to new 14-month highs after the Fed estimated higher inflation,” Mr. Ricafort said in a text message.

Yields on US Treasury bonds picked up on Thursday, with the 10-year note’s rate rising to 1.754% from 1.7099% previously.

At home, yields on other government papers have also been rising in the past weeks. The Bureau of the Treasury’s three-month, six-month, and one-year papers saw their average rates pick up by 9.3 bps, 21.1 bps, and 13.8 bps, respectively, at this week’s auction.

Meanwhile, the central bank’s seven- and 14-day term deposits logged average rates 13.07 bps and 2.95 bps higher than the previous auction. — LWTN with Reuters

BPI expects recovery in demand for auto loans

BANK OF THE Philippine Islands (BPI) expects demand for auto loans to pick up this year amid a heightened need for mobility amidst the coronavirus pandemic.

“Our initial projection is a flat or same as 2020 levels to as much as…10%, which is in line with the industry’s [projection],” BPI Retail Loans Group Head Dennis T. Fronda said during the online launch of the bank’s new loan and auto insurance scheme on Friday.

BPI Family Savings Bank (BFSB) President Maria Cristina L. Go said the automobile industry’s sales dropped 40% to about 245,000 in 2020 from the year earlier. She said the bank financed close to 17,000 vehicles, declining 31% from the previous year.

Amid the pandemic, Ms. Go said BFSB’s auto loan portfolio decreased 4%, lower than the 7.9% industry-wide contraction in 2020.

“This clearly tells you that the bigger concern is reduced demand rather than lower risk appetite,” Ms. Go said.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed household loans dropped 6.9% year on year in January, partly due to the 5.8% contraction in motor vehicle loans.

The central bank has said the decline in lending was due to both the risk aversion of lenders that have tightened their credit standards as well as a slump in demand as borrowers felt the economic impact of the pandemic.

The bank said it is bullish that 2021 will be a year of recovery and growth for both vehicle sales and financing as Filipinos see the benefits of owning a car, as they can travel securely and with reduced worries over catching the virus.

“We understand the aspiration of our clients to own a car has become even more critical during the pandemic given the lack of public transport and the need to safely traverse the Metro without the fear of being infected,” Ms. Go said.

During the same event, BPI launched its BPI Auto Loan Multiyear Protect which combines monthly installments for insurance with loan amortization payments. Mr. Fronda said the product gives customers flexibility to manage their cash flow into gradual and fixed payments per month while easing their worries about sudden car repair expenses due to accidents.

BPI’s net income fell 25.7% to P21.4 billion in 2020 as it allotted more loan loss provisions amid the crisis.
The Ayala-led lender expects to complete its merger with BFSB by 2022.

BPI’s shares closed at P84 apiece on Friday, down by P1.95 or 2.27%. — L.W.T. Noble

Peso rises vs dollar as oil prices correct

THE PESO appreciated versus the greenback on Friday following a downward correction in global oil prices.

The peso closed at P48.62 per dollar on Friday, gaining six centavos from its P48.68 finish on Thursday, data from the Bankers Association of the Philippines showed.

However, it weakened by 16.5 centavos from its P48.455-a-dollar close on March 12.

The peso opened Friday’s session at P48.66 against the dollar. Its weakest showing was at P48.71 while its intraday best was at P48.60 versus the greenback.

Dollars traded dropped to $588.6 million on Friday from $748.3 million on Thursday.

The peso strengthened following a continued decline in oil prices, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

Reuters reported that oil prices dropped for the fifth day in a row on Thursday amid growing worries caused by the increasing coronavirus cases.

Prices of Brent futures declined by $4.72 or 6.9% to $63.28 per barrel. Meanwhile, US West Texas International (WTI) crude fell $4.60 or 7.1% to $60 a barrel.

The five-day losing streak is the longest for WTI since February last year and since September for Brent.

Mr. Ricafort said the peso also strengthened following the downward correction of the dollar after dovish signals from the US Federal Reserve.

Fed Chairman Jerome Powell said after the latest policy-setting meeting of the Federal Open Market Committee that the US central bank will keep rates low despite the recent uptick in US inflation. — LWTN with Reuters

BSP boosts ties with Bank of Mauritius

THE BANGKO SENTRAL ng Pilipinas (BSP) has inked a deal with Bank of Mauritius (BOM) for possible cooperation on the development of payment systems, cybersecurity, and sustainable central banking.

The central banks signed a memorandum of understanding on March 1, the BSP said in a statement on Thursday.

“The Memorandum of Understanding presents an opportunity to work with our central bank partners on initiatives that support banking and payment system development and digitalization. These are the key elements in the Philippines’ drive towards sustainable and resilient economic recovery,” BSP Governor Benjamin E. Diokno was quoted as saying.

Through the agreement, the two central banks may establish an arrangement for the exchange of information, capacity building, and collaboration in key areas.

“The cooperative ties with the BSP will certainly be mutually beneficial, especially from a supervisory perspective. This latest Memorandum of Understanding underlines the Bank of Mauritius’ focus on consolidating its capabilities and processes through closer interaction with overseas regulatory institutions, especially in the Asian region,” BOM Governor Harvesh Kumar Seegolam was quoted as saying. — LWTN

Seoul ends mandatory coronavirus testing for foreigners after outcry

SEOUL – Authorities in the South Korean capital of Seoul will scrap a controversial order for all foreign workers to be tested for coronavirus, they said on Friday, after an outcry sparked complaints by embassies and a human rights probe.

The move came after the headquarters of the nation’s pandemic control effort said it had asked the city to withdraw the order and improve testing policies to eliminate discrimination or rights violations.

“The request is to prevent anti-COVID-19 efforts from causing any discrimination or human rights violations against citizens and foreign nationals,” the headquarters said in a statement.

City authorities still recommended testing for both foreign and Korean workers in “high-risk” workplaces, however.

The reversal came as the National Human Rights Commission confirmed it was investigating if the policies of several local governments for all foreign workers to be tested were discriminatory.

Seoul and the neighbouring province of Gyeonggi are among the local government bodies to have ordered such tests, drawing criticism from South Korean lawmakers, university officials, and foreign ambassadors.

Gyeonggi, where the order is in force until Monday, said it had dropped a separate requirement for negative tests by foreigners being hired for jobs.

Health officials had defended the measures as necessary to blunt a surge in infections among foreign residents, saying they were not discriminatory as tests had also been ordered for those linked to outbreaks in churches, nightclubs, and elsewhere.

On Friday the U.S. embassy said it had raised concerns with senior authorities and was strongly urging fair and equitable treatment of all its citizens.

The independent human rights commission said it launched an investigation after several complaints, such as one from the British ambassador, who said the rules were “not fair, they are not proportionate, nor are they likely to be effective”.

Commission chief Choi Young-ae said she was concerned the policies could lead to discrimination, especially through the use of demeaning language toward undocumented workers.

“This act has made the word ‘foreigners’ look like ‘those suspected of diagnosis for COVID’ or ‘criminals who have done something illegal,’ which led to hate comments online,” she said in a statement.

Seoul National University, one of South Korea’s most prestigious, had threatened to seek an injunction if the city did not drop the policy, Koo Min-gyo, its dean of student affairs, told Reuters. – Reuters

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