Wilcon Depot, the country’s leading home improvement and construction supply retailer,
provided relief assistance to the communities of Naga City and Daraga, Albay who were
seriously affected by the recent super typhoon. With the assistance of the local workforce of Wilcon in coordination with the Local Government Units (LGUs), all relief goods were successfully turned over to the local community of Naga and Daraga on November 6, 2020.
For more updates about Wilcon, you can log onto www.wilcon.com.ph or follow their social
media accounts on Facebook and Instagram at @wilcondepot.ph and subscribe and connect with them on the Viber community at Wilcon Depot PH, LinkedIn, and YouTube.
SHANGHAI – Chinese e-commerce giant Alibaba Group Holding Ltd kicked off its annual Singles’ Day mega-shopping event on Wednesday, looking to cash in on consumers itching for discounts as the economy rebounds from the COVID-19 crisis.
This year’s online shopping extravaganza also comes a week after Alibaba lost almost $76 billion of its market value, following China’s suspension of the $37 billion listing of Ant Group, the financial technology firm Alibaba owns a third of.
Pop star Katy Perry made an appearance at the company’s gala for the first time, albeit via livestream, as travel restrictions on outside visitors remain in place in China.
Alibaba has said it will introduce more than 2 million new products, double the amount last year.
Analysts expect that this year will be a boon for luxury brands, as Chinese consumers accustomed to going overseas to buy high-end goods are now stuck at home.
Andy Halliwell, senior director retail and retail analyst at digital consultancy Publicis Sapient said in a note that “the lack of consumer tourism which has hit European and U.S. stalwarts like Harrods, Galeries Lafayette and Nordstroms will likely see bigger spending locally”.
Alibaba launched the online blitz early this year, with two primary discount periods taking place from Nov. 1 – Nov. 3 and again on the full day of Nov. 11.
According to the company, within the first hour of the event on Nov. 1, its e-commerce sites Taobao and Tmall sold over 110 million cups of coffee, 4.2 million kilograms (9.3 million pounds) of rice, and 2.5 million kilograms (5.5 million pounds) lb) of tea.
The company will calculate Gross Merchandise Volume (GMV) over the full 11-day period, as opposed to the usual 24-hour period.
Alibaba first launched the shopping event in 2009 and has made it the world’s biggest online sales festival, eclipsing Cyber Monday in the United States. Last year, it recorded $38.4 billion in GMV on the day. — Reuters
MANILA – Philippine authorities have ordered thousands of residents in eastern coastal communities to evacuate ahead of the landfall of Typhoon Vamco on Wednesday, only weeks after the country was battered by the strongest cyclone so far this year.
Vamco, which carries sustained winds of 125 kph (78 mph) and gusts of up to 155 kph, is the 21st tropical storm to hit the Philippines this year.
“We are just 1% into our recovery and then here comes another typhoon. We’re now feeling strong wind and rain,” Joseph Cua, the governor of Catanduanes province, told DZMM radio.
The island province of Catanduanes and nearby Albay, both southeast of the capital Manila, bore the brunt of Typhoon Goni in late October, a category 5 typhoon that killed 25 people and left six people missing.
Vamco is due to make landfall in Polilio Island on Wednesday evening and hit rice-producing provinces north of the capital before exiting the Philippines’ main island of Luzon on Thursday, Chris Perez, a state weather forecaster, told DZMM.
Residents in coastal communities, who are expecting up to a three-metre (nine foot) storm surge, were ordered to leave their homes, said Cristina Bosque, mayor of Polilio. But ensuring the prevention of the spread of COVID-19 in evacuation centres remained a challenge, she said.
The Philippines, an archipelago of more than 7,600 islands, sees around 20 tropical storms annually.
After lashing the Philippines, Vamco is forecast to head towards Vietnam. Vietnam’s weather agency is expecting Vamco to arrive in its central region on Sunday, bringing intense rains.
Floods and mudslides over the past month have killed at least 160 people in central Vietnam, left dozens missing and damaged 390,000 houses, official data showed. — Reuters
The coconut tree has long been considered as the “Tree of Life” and for good reasons. All the parts of the tree can sustain a human life—the coconut fruit as food, the coconut juice is better than water as it very nutritious, the palms and trunks can be used to make shelter among many more. In short, it can supply man’s basic needs for survival. In fact, even the wastes from coconuts, such as its husks, are important in many people’s lives.
And Senator Cynthia Villar, through the Villar Social Institute for Poverty Alleviation and Governance of Villar SIPAG, has turned coconut wastes into a viable source of livelihood and income for many communities. In doing so has also helped in waste management efforts in the country.
“There are two-fold benefits in turning waste coconut husks into something useful, we got rid of garbage that used to litter our streets and clog our rivers and waterways. Secondly, we helped residents by providing them with livelihood and additional source of income. It’s a win-win for people and the environment,” said Villar who is chairperson of both the Senate Committees on Agriculture and the Environment.
Las PiñasCoconet Factory
Villar SIPAG’s coconet weaving enterprises convert waste coconut husks intococonets, which are used as riprap materials in construction projects to prevent soil erosion. Vista Land buys the coconets for its housing subdivisions.
Extracting of fiber
The workers extract fiber and coco peat from the waste coconut husks using a decorticating machine, which can extract fiber from up to 8,000 husks of coconuts daily. The fibers are then made into twines by women workers. Each twine is eight meters long. Another group of workers weave the loom of twines and within two hours they can weave one roll measuring one meter by 50 meters that can earn for them 200 pesos. The coconets cost 2,000 pesos per roll.
Twinning and weavingCoconet finished products
The coco peat or dusts extracted by the same machine are mixed with household wastes to make organic fertilizers. All the fertilizers produced are distributed all over the country and given free to farmers and urban gardeners. These have become in demand during the pandemic when the popularity of growing one’s food and vegetable gardening dramatically increased.
The people who are involved in making coconets and organic fertilizers have made it a viable source of income. Thus, they are committed to it. “One of my learnings as a social entrepreneur is that we really have to put a income component in our projects for them to be successful or sustainable. Otherwise, people will be hesitant or half-hearted to participate,” cited Villar.
According to Villar, their coco wastes project at also demonstrates how technological innovation can improve people’s lives. In coconet-weaving, it’s the decorticating machine invented by Dr. Justino Arboleda that paved the way for the production of the coconets from waste coconut husks.
“Dr. Arboleda’s invention has won awards. It is a good example of how a simple invention is now the source of livelihood of many families and has helped many cities get rid of wastes cause floods and pollute rivers and waterways,” said Villar.
It was in fact the persistent flooding in her home city of Las Piñas that brought attention to the notorious role of coco wastes in the problem. Villar said when they took a closer look and studied what’s causing the floods, they discovered the culprit—waste coco husks, thrown away by itinerant buko (coconut) vendors.
“Las Piñas River has become a big dumping area of waste coconut husks, which caused the clogging of the riverways. So we thought of controlling the wastes with the people’s cooperation. We designated areas where coconut vendors can bring or deposit waste coconut husks. Then we turned those as raw materials for coconet weaving enterprise that we put up,” the senator said. Besides the coconets, even the coco dust became a raw material mixed with household wastes to make organic fertilizer.
Indirectly, the coconet enterprise is also supporting farmersall over the country because they don’t have to buy fertilizer. It also boosts organic agriculture in the country.Incidentally, November is ‘Organic Agriculture Month’ by virtue of Proclamation No. 1030, which cites organic farming as an effective tool for development, environmental conservation, and protection of the health of farmers, consumers and the general public.
Villar is an active proponent of organic agriculture. In fact, Villar-authored Organic Agriculture Bill has been passed in the Senate on June 1. Senate Bill No. 1318 will introduce the Participatory Guarantee System (PGS), a more affordable and accessible certification system for organic products. It amends Republic Act No. 10068 (The Organic Agriculture Act of 2010) will provide the much-needed impetus to support the growth of organic agriculture in the country.
As an environmentalist and social entrepreneur, Villar is continuously searching for ways and means to provide livelihood to Filipinos that also help protect the environment. Besides waste coconut husks, the raw materials used in Villar’s other livelihood projects are all from wastes. These are water hyacinths for the waterlily handicraft-weaving enterprise and the handmade paper factory; kitchen and garden wastes for the organic fertilizer composting facility; and plastic wastes for the waste plastic recycling factory that produces school chairs. The senator has set up over 3,000 livelihood projects nationwide.
Villar believes that there should be greater private sector and public participation in the development waste management programs. Her projects are implemented by Villar SIPAG in partnerships with numerous government departments/agencies, private sector groups and companies. It has established barangay-based livelihood enterprises that are models of proper waste management and good examples of how garbage can be turned into useful end-products.
MOTORCYCLE taxis have been allowed to start providing service again after the government’s task force against the coronavirus issued guidelines on health and safety requirements. Under the guidelines, dated Nov. 4 but released only on the 10th, two-wheeled taxis as well as back-riding in tricycles can operate provided drivers have undergone a coronavirus testing and certified to be in good health by a government-accredited facility. Passengers, on the other hand, must wear their own helmet and fill-up a health declaration form before riding. Other requirements include regular temperature check and vehicle sanitation, and the use of a cashless payment system. Meanwhile, at least 816 traditional public utility jeepneys (PUJs) have also been given the greenlight to resume operations in 16 routes in Metro Manila, according to the Land Transportation Franchising and Regulatory Board (LTFRB). In a memorandum dated Nov. 9, the LTFRB said the operators of the PUJs need not secure special permits to operate but are required to use downloadable quick response or QR codes. They must also implement minimum health standards such as wearing of face mask and regular vehicle disinfection. Almost 34,000 traditional PUJs have been allowed to resume operations in 387 routes, 865 modern jeepneys in 48 routes, 4,499 commuter buses in 35 routes, 387 point-to-point buses in 34 routes, and 6,755 U Express units in 118 routes. — Gillian M. Cortez and Emmanuel Tupas/PHILSTAR
The Philippine economy remained in a recession in the third quarter, as gross domestic product contracted by 11.5%. — PHILIPPINE STAR/MICHAEL VARCAS
THE Philippine economy continued to shrink for a third straight quarter, although at a slower pace compared with the second quarter, as lockdown restrictions were further loosened amid the coronavirus disease 2019 (COVID-19) pandemic.
The economy remained in a recession as gross domestic product (GDP) contracted by 11.5% in the third quarter after the 16.9% plunge in the second quarter, data from the Philippine Statistics Authority (PSA) showed on Tuesday. GDP grew by 6.3% in the third quarter of 2019.
A BusinessWorld poll of 19 economists last week showed a median forecast of a 9.2% decline in the third quarter.
Year to date, the GDP performance stood at -10%. The government expects the economy to contract between 4.5%-6.6% this year.
The government gradually lifted lockdown restrictions starting June, although Metro Manila and nearby areas returned to a strict lockdown for two weeks in August to curb the rise in COVID-19 cases.
Household spending continued to be a drag in the third quarter, contracting by 9.3% year on year in the third quarter compared with the 6% expansion a year ago. However, this was slower compared with the 15.3% fall in the second quarter.
Private investment, which is represented in the data as capital formation, plunged by 41.6% in the third quarter compared with the declines of 53.7% and 0.1% in the second quarter of 2020 and third quarter of 2019, respectively.
The exports of goods and services declined by 14.7% compared with the 1.8% growth last year. However, this was slower than the 35.8% fall in the second quarter. Similarly, imports slipped by 21.7% compared with the declines of 37.9% in the previous quarter and 0.1% in the third quarter of 2019.
Government spending grew at a much slower pace of 5.8% in the third quarter compared with 21.8% in the previous quarter and 8.8% last year.
On the supply side, the services sector recorded a 10.6% decline in the third quarter, slower than the -17% seen in the second quarter and the 7.3% expansion in the third quarter of 2019.
Likewise, the industry sector slid by 17.2% compared with the -21.8% in the preceding quarter and the 5.4% rise a year ago.
On the other hand, agriculture posted a 1.2% growth rate, but was slower than the second quarter’s 1.6% and last year’s 3%.
Gross national income — the sum of the nation’s GDP and net income received from overseas — saw a 13% drop in the third quarter compared with a 5.2% growth in 2019’s comparable three months.
MIXED OUTLOOK The government, however, said the economic contraction has already bottomed out in the second quarter and that the “worst is over.”
“The smaller GDP contraction of 11.5% in the third quarter from a contraction of 16.9% in the second quarter indicates that the Philippine economy is on the mend. The path is clearer to a strong bounce back in 2021,”Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua was quoted in a statement by the National Economic and Development Authority as saying.
In an e-mail, University of Asia and the Pacific Senior Economist Cid L. Terosa said economic performance in the fourth quarter “will be better” owing to easing lockdown restrictions as well as the onset of the holiday seasons that would reinvigorate production and consumption activities.
In a separate e-mail, Colegio de San Juan de Letran Economist Emmanuel J. Lopez said the economy is expected to recover in the fourth quarter.
“[Fourth-quarter] GDP is expected to display a semblance of normalcy… [with a GDP performance] of at least 2-4%,” he said.
On the other hand, some economists were not so optimistic.
“With unemployment still elevated at 10% and business sentiment negative according to the Bangko Sentral ng Pilipinas (BSP), we do not expect a quick rebound in growth with GDP remaining in negative territory until a base effect-induced bounce in [the second quarter of 2022],” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a note.
“Household consumption, which delivers the bulk of economic activity, will be handicapped in months ahead given the challenging labor market while bank lending slowed to single-digit growth, signaling a parallel slowdown in investment momentum,” he added.
Mr. Mapa also noted the “persistent threat” of the coronavirus pandemic, citing the sustained and elevated number of daily infections that may increase from eased lockdowns.
In a separate note, HSBC Global Research Economist Noelan C. Arbis said third-quarter GDP performance “did not look that much different from the second-quarter numbers.”
“Private consumption and fixed investment continued to drag down growth, albeit to a lesser extent, while net exports and government spending contributed positively, similar to the previous quarter,” Mr. Arbis said, adding the economic contraction this year is “likely to exceed” expectations of economic managers.
“The main takeaway perhaps is that [the] numbers suggest… the economic contraction this year is likely to exceed the government’s -6% forecast. We expect full-year GDP to decline by 9.6% in 2020,” he said.
For Capital Economics’ Asia Economist Alex Holmes, Philippine economic output “is unlikely to regain its pre-crisis level until late next year.”
“A large driver of the rebound was the easing of strict lockdown restrictions. But with the virus still not under control, a further scaling back of containment measures will take longer, meaning life is unlikely to return to normal anytime soon,” he said.
“What’s more, the economic scars from the downturn, including business insolvencies, weaker household balance sheets and high unemployment, will weigh heavily on demand for many months to come. On the external front, while merchandise exports returned to growth in September, second waves of the virus in the US and Europe have made the outlook more uncertain. The tourism industry is likely to remain on its knees for some time,” he added.
STIMULUS NEEDED Reacting to the continued contraction in household spending in the third quarter, House Ways and Means Committee Chairman and Albay Rep. Jose Ma. Clemente S. Salceda reiterated his call for another round of direct cash transfers.
“If the disposable income goes down deeply, below expectations, we should be open to a direct, universal cash transfer. There should be some fiscal space left since we outperformed revised revenue targets this year,” Mr. Salceda said in a statement.
Mr. Salceda, who also co-chairs the economic stimulus and recovery cluster of the House Defeat COVID-19 Committee, has stressed the need to expand the third round of the Social Amelioration Program in the 2021 budget “to a more universal level.”
“In 2021, stimulus measures will work because mobility restrictions will be less than that of 2020, so we should not be afraid to spend more. I estimate that we have at least P150 billion more in fiscal space for the 2021 budget…,” he said.
The House of Representatives transmitted to the Senate on Oct. 27 its final version of the 2021 General Appropriations Bill, containing P4.5 trillion worth of spending items for next year’s budget. Senate President Vicente C. Sotto III has said the proposed budget will be signed into law before Christmas barring “unforeseen circumstances.” — Michelle Anne P. Soliman with inputs from Kyle Aristophere T. Atienza
The government will revisit its macroeconomic projections, as the pandemic and recent typhoons pummel the economy. — PHILIPPINE STAR/EDD GUMBAN
THE Development Budget Coordination Committee (DBCC) may revise macroeconomic projections once again, after latest data showed the economy is recovering slower than expected.
“The DBCC will be meeting immediately to reassess the latest numbers to see if there is a need to adjust the full-year projections,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a media briefing Tuesday.
Gross domestic product (GDP) slumped by 11.5% in the third quarter, after a 16.9% contraction in the second quarter pushed the country into its first recession in nearly three decades.
In its July 28 meeting, the DBCC projected GDP will shrink by 4.5-6.6% this year, before growing by 6.5-7.5% in 2021 and 2022.
Mr. Chua said GDP is expected to improve in the fourth quarter, as lockdown restrictions have been further loosened to boost economic activity.
“Given the policy changes and the further opening up of the economy and the policy not to revert to more stringent lockdown, I think the trend really is a further improvement in the fourth quarter, and hopefully we will begin to see better figures, or positive year-on-year quarterly growth starting early next year,” Mr. Chua said.
“The programs that we have laid out, the 2021 budget, the CREATE (Corporate Recovery and Tax Incentives for Enterprises) bill, the FIST (Financial Institutions Strategic Transfer) and the GUIDE (Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery) bills are all important elements in ensuring that we accelerate the recovery, alongside our risk management strategy,” he added.
The DBCC has yet to schedule an exact date of the upcoming meeting, said Budget Assistant Secretary Rolando U. Toledo in a Viber message.
Mr. Chua said the DBCC will also review projections on poverty and unemployment rates. The government earlier estimated that the poverty rate may rise to 16%-17.5% (from 16.7% in 2018), and unemployment rate to average 11% by end-2020.
By 2022, the government targets to bring down the poverty rate to below 14% and thejobless rate to 3-5%, as the economy is expected to grow by an annual rate of over 6%.
Also, Mr. Chua said the DBCC will assess the current fiscal program of the government.
Latest data available showed the government expects the budget deficit to hit 9.6% of GDP this year, before narrowing to 8.5% in 2021 and 7.2% in 2022.
For next year, Mr. Chua said the accelerated implementation of the “Build, Build, Build” infrastructure program, seen to generate 1.7 million jobs, and the timely passage of the P4.5-trillion budget will be crucial for a stronger recovery.
“A delay in passage of the budget will be detrimental to our recovery. Each day of delay will result in P1.1 billion not spent,” he said. — Beatrice M. Laforga
THE Philippine economy continued to shrink for a third straight quarter, although at a slower pace compared with the second quarter, as lockdown restrictions were further loosened amid the coronavirus disease 2019 (COVID-19) pandemic. Read the full story.
THE NONPERFORMING LOAN (NPL) ratio of Philippine banks rose for the eighth straight month in September, surging to its highest level in over seven years amid the economic slowdown.
Data from the Bangko Sentral ng Pilipinas (BSP) showed the gross NPL ratio stood at 3.4% as of end-September, up from the 2.15% logged a year ago and the 2.84% seen as of end-August. This was the highest since the 3.42% NPL ratio recorded in May 2013.
Bad loans stood at P364.672 billion as of end-September, 60% higher than the P227.604 billion a year ago, and 20% up from P304.997 billion as of end-August.
Loans are considered nonperforming once they are unpaid for at least 30 days following the due date. These are deemed to be risky assets because borrowers are unlikely to settle these loans.
The industry’s NPL ratio is expected to rise to 4.6% by end-2020, based on BSP projections. It reached 17.6% in the aftermath of the Asian Financial Crisis in 2002.
“Near-record low interest rates have helped slow down any rise in NPL ratio, unlike in the Asian Financial Crisis and shortly thereafter when interest rates were relatively high,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.
The growth of bad loans outpaced the 1.5% year-on-year uptick in the industry’s loan portfolio to P10.73 trillion.
Meanwhile, past due loans stood at P511.39 billion, jumping by 66% from the P307.466 billion in September 2019. This caused the industry’s past due loan ratio to edge higher to 4.77% from 2.91% a year ago.
Restructured loans surged by 197% to P125.459 billion in September, bringing its ratio against the total to 1.17% from 0.4% a year ago.
Banks made up for the deteriorating loan quality by boosting their allowance for credit losses, which climbed 60% to P334.57 billion as of end-September from P209.069 billion a year ago.
Bad loan coverage ratio across the industry, which gauges the allowance for potential losses due to soured loans, stood at 91.75% as of end-September, higher than 91.86% a year ago but lower than the 107.35% logged in August.
The steady rise in bad loans is no surprise as many consumers and businesses struggle amid the economic slowdown, analysts said.
“Recent legislation for the loan grace period could slow this down modestly until it expires. We could see the (NPL) ratio to rise again after that although it will still be difficult to gauge as to when this will peak and this will depend largely on how quickly the economy can bounce back,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said.
Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II) provided for a one-time 60-day loan moratorium following the initial debt relief provided Bayanihan I.
The passage of the Financial Institutions Strategic Transfer (FIST) Bill will also allow banks to free up their balance sheets by unloading some NPLs to asset management companies, Mr. Ricafort said. The bill has been passed in the Lower House and is still pending at the Senate. — Luz Wendy T. Noble
The Philippines received a failing mark in the “control of corruption” indicator in a scorecard by the Millennium Challenge Corp. — PHILIPPINE STAR/MICHAEL VARCAS
A UNITED STATES government foreign aid agency has given the Philippines a failing mark in “control of corruption” on its latest scorecard released on Tuesday.
The latest Millennium Challenge Corp. (MCC) scorecard for the Philippines showed it passed 12 out of 20 indicators used to determine a country’s eligibility for grants under its program, and the “democratic rights” indicator.
However, the Philippines received a failing mark for the “control of corruption” indicator, which means it will be unable to secure any grants next year.
The MCC requires countries to pass at least 10 of the 20 indicators, “control of corruption” indicator and either the “civil liberties” or “political rights” indicator.
“The mandatory passing of either the Political Rights or Civil Liberties indicators is called the Democratic Rights ‘hard hurdle’ on the scorecard, while the mandatory passing of the Control of Corruption indicator is called the Control of Corruption ‘hard hurdle.’ Not passing either ‘hard hurdle’ results in not passing the scorecard overall, regardless of whether at least 10 of the 20 other indicators are passed,” the MCC said on its website.
“While satisfaction of all three aspects means a country is termed to have ‘passed’ the scorecard, the Board also considers whether the country performs ‘substantially worse’ in any one policy category than it does on the scorecard overall,” it added.
However, the government will not tap MCC’s assistance facility for now, Finance Undersecretary Mark Dennis Y.C. Joven, said. Instead, the government will focus on securing grants from the US Agency for International Development (USAID).
“We are not applying for MCC assistance since allocation is not as significant as USAID allocation. We are pursuing USAID as our main US bilateral development partner,” Mr. Joven said in a text message on Tuesday.
USAID has extended P228.8 billion to the Philippines over the past 20 years, including the recent P780 million to fund the country’s pandemic response.
MCC uses its competitive selection process to determine which countries will be eligible for its assistance, which includes the use of a scorecard, while the USAID follows an approach where a development program, that usually covers five years, is created to determine which projects will be funded to help the country become less reliant on foreign aid.
Under the MCC scorecard, the Philippines passed six out of eight “economic freedom” indicators. It scored passing marks in terms of fiscal policy, inflation, regulatory quality, trade policy, gender in the economy, as well as land rights and access. However, it received a failing mark in access to credit and business startup.
The Philippines also passed three out of six indicators under “ruling justly,” namely political rights, civil liberties and government effectiveness. It failed in terms of control of corruption, rule of law and freedom of information.
The country also scored positively in three out of six in “investing in people” indicators, namely: natural resource protection, girls secondary education enrolment rate and child health. However, it failed in health expenditures, primary education expenditures and immunization rates.
In a Sept. 8 report, the MCC considered the Philippines among 68 potential countries that will be eligible for its assistance programs, along with other nations such as Bangladesh, Laos, Pakistan, India, Timor-Leste and Vietnam.
The country was listed under the low-income category for having a per capita income of below the World Bank’s threshold of $4,045 gross national income (GNI) per capita for 2021.
Data from the US foreign aid agency showed the Philippines has a $3,850 GNI per capita with a population of 108.117 million.
The MCC relies on the scorecard to determine a country’s eligibility. The scorecard is the third out of the four-stage selection process followed by the agency: from identification of candidate countries, publication of MCC’s selection criteria and its methodology report, the scorecard, and the actual selection of countries.
The Philippines was eligible for $433.91 million in MCC grants in a previous five-year compact signed in September 2010. The grant expired in May 2016 and since then, the government is hoping the US aid agency will continue its development assistance to the country.
The country used $385.072 million of the MCC’s funds from May 25, 2011 to May 25, 2016 to modernize tax collection by the Bureau of Internal Revenue, expand community-driven development projects and improve governance at the village and municipal levels, as well as rehabilitate a major secondary national road in Samar. — Beatrice M. Laforga
Senators say energy security at stake; DoE says $565-M deal still under scrutiny
LAWMAKERS on Tuesday questioned the technical capability of a subsidiary of Udenna Corp. to participate in the Malampaya offshore gas-to-power project, whose operator signified its intention to sell its stake in the country’s sole natural gas field.
In a Senate hearing, they asked whether Udenna unit UC Malampaya Philippines Pte. Ltd., which is among Davao City businessman Dennis A. Uy’s growing business holdings, possessed the technical requirements and experience in the oil and gas industry.
“It is also an interest to us to understand who will be the new owners, and if the new owners will have the technical capability [and] experience to operate such a complicated asset… This transaction affects the consumers because of its magnitude,” said Senator Sherwin T. Gatchalian, chairman of the Senate energy committee.
In September, Mr. Uy’s holding firm Udenna revealed its plan to fully take over the operations of the Malampaya project located off the coast of northwest Palawan. This came after operator Shell Philippines Exploration B.V. (SPEx) disclosed its plan to sell its 45% interest in the project under Service Contract (SC) 38.
The Davao-based group had said that the remaining consortium members – UC Malampaya and the Philippine National Oil Co.-Exploration Corp. (PNOC-EC) – were the “logical choice” to acquire the SPEx stake to ensure the project’s continued operations. The offshore gas platform supplies around 21% of the country’s electricity needs.
The Udenna unit previously acquired the 45% stake of the Philippine company of US energy group Chevron Corp. through a transaction in October last year which Department of Energy (DoE) Assistant Secretary Leonido J. Pulido III disclosed during the hearing as costing $565 million or around P27.3 billion.
Mr. Pulido said that although UC Malampaya submitted all the requirements, the Energy department is still in the process of evaluating its financial capability based on filings on Oct. 28.
Mr. Gatchalian said that since the DoE has the final say in the deal between Chevron and Udenna, the subsidiary could be “potentially disqualified because of its technical inadequacy.”
In turn, this could affect the country’s energy security because it has a stake in a platform that supplies about a fifth of the country’s power grid, the senator said.
Mr. Pulido said: “We understand the concern regarding the technical capability of the operator, but in this case, the consortium has an operator. So even if, in the event, whether likely or unlikely, the Department of Energy disapproves the sale between Chevron and Udenna, Shell Exploration (SPEx) is still there as the operator so the technical capability remains intact.”
Mr. Gatchalian also questioned the Udenna unit’s experience in the oil and gas sector as its corporate papers showed that it was established only last year.
“This is the first exposure of Udenna in the oil and gas industry, [which is] not an ordinary oil and gas industry but an operating oil and gas industry,” he said.
In the event that the Energy department will not approve of Udenna-Chevron’s share purchase agreement, an official of UC Malampaya said the company would challenge the denial.
“We will challenge it. Despite the change in parent company ownership, Udenna remains true to its vision to ensure that we continue to operate and support the consortium,” said Belinda Racela, the Udenna representative and president of the UC38 LLC, which now has the stake held by Chevron.
“We have submitted all of our technical capability [to the DoE]. They can see that all members of UC38 LLC are technically capable…. Udenna [also] has experience in upstream energy,” she said during the hearing.
Asked about the sources of financing in UC Malampaya’s acquisition of the 45% Malampaya project stake, Ms. Racela said that, to her knowledge, the unit did not secure direct funding from any foreign investor.
In a statement issued shortly before the hearing, Mr. Gatchalian, along with Senate President Vicente C. Sotto III and Senator Panfilo Lacson pointed out that Malampaya faces a number of issues, such as the “lack of direction from the government on SC 38 given its expiration in 2024.”
In March, Udenna announced that its unit completed its acquisition of the 45% stake in the project, which fuels five power plants in Luzon with a combined capacity of 3,200 megawatts. — Angelica Y. Yang
PROFITS of Century Properties Group, Inc. (CPG) surged 74% to P571.48 million in the third quarter due to gains from investment properties and non-recurring losses that were recorded the prior year.
In a regulatory filing on Tuesday, the Antonio-led property developer said its revenues in the three-month period were flat at P3.71 billion, dipping 0.9% from P3.75 billion a year ago.
However, it booked a P398.81-million gain, erased last year’s P43-million foreign exchange loss, and trimmed interest and financing charges by 38% to lift its bottomline.
Compared with the previous quarter, CPG’s P3.71-billion third-quarter revenues grew more than double from P1.7 billion, supported mainly by real estate sales and leasing revenues.
On a nine-month basis, CPG’s attributable net income stood at P1.03 billion, down 2% from the same period last year. Revenues were likewise 16% lower at P8.23 billion.
The company said its earnings were “better than expected” despite falling from year-ago levels. Its high-margin businesses improved 35% year-on-year to record combined contributions of P1.99 billion, making up 25% of total revenues.
“CPG is well-positioned to take on the business challenges in this new normal and navigate through this period while we plan for new launches and continue with our business expansion into our high-margin segments,” CPG Chief Finance Officer Ponciano S. Carreon, Jr. said in a statement.
The company is continuously widening its portfolio with a plan to launch a new 10-hectare affordable housing project in Pampanga this month.
It also recently expanded its office leasing business to a gross leasable area of 137,000 square meters, after it bought the 40% share of its joint venture partner in the Century Diamond Tower in Makati City.
It likewise plans to complete more than 2,000 condominium units by mid-2021, accounting for projects in Quezon City and San Fernando, Pampanga.
Shares in CPG closed at 38 centavos each on Tuesday, up by 1.5 centavos or 4.11% from the last session. — Denise A. Valdez
