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8990 to sell P2.4-B receivables

By Denise A. Valdez
Reporter

MASS housing developer 8990 Holdings, Inc. is looking to sell around P2.4-billion worth of contract-to-sell (CTS) receivables, a local debt watcher said.

In a statement over the weekend, Philippine Ratings Services Corp. (PhilRatings) said the listed firm is eyeing to securitize low-cost residential receivables, or convert its illiquid assets into a security through quantitative analysis.

The security will have a senior class and subordinated certificates, or Tranche A and Tranche B, respectively. The Tranche A certificates will amount to P1.8 billion and have a tenor of 10 years, while the Tranche B certificates will amount to P600 million and will be amortized after settling the Tranche A certificates.

PhilRatings disclosed 8990’s plans to announce that it has given the firm a conditional credit rating of “PRS Aa plus” for the Tranche A certificates and “PRS A” for the Tranche B certificates.

A PRS Aa rating means an offer is “of high quality and (is) subject to very low credit risk,” while a PRS A rating means the company making the offer has strong capacity to meet its financial commitments, although it is “susceptible to the adverse effects of changes in economic conditions.”

The ratings were also given a stable outlook, which means PhilRatings expects that the rating would not change in the next 12 months.

“The…ratings are considered conditional until the executed documentation for the transaction has been submitted to PhilRatings for review,” the debt watcher said.

“The conditional ratings were assigned based on draft transaction documents, and will be converted into final ratings once PhilRatings has determined that the representations as stated in the initial documents are also captured in the final signed documents,” it added.

8990 has been selling CTS receivables in recent years as a means to raise funds instead of incurring debt. It said last year its net debt-to-equity as of end-September stood at 0.94x, falling below its covenant ratio of 1.5x.

The company previously said it wants to double its 2019 capital expenditure of P4 billion this year to support its list projects, among which is its condominium building Urban Deca Homes Ortigas.

Earnings of the listed firm grew 23% to P4.21 billion in the first nine months of 2019 amid a 21% rise in revenues to P10.51 billion. Its shares at the stock exchange were flat on Friday’s trading at P14.72 each.

Bentley redefines pre-owned car ownership with ‘Certified by Bentley’ global program

By Manny N. de los Reyes

BRITISH ultra-luxury car maker Bentley recently launched a new global program that sets the benchmark for purchases of luxury pre-owned cars, and which opens the door into the rarefied world of Bentley ownership.

Called ‘Certified by Bentley,’ the program provides discerning clients an exclusive certificate of authenticity on a previously owned Bentley, affording them peace of mind. Included in this certificate of authenticity are evidence of where a particular Bentley was manufactured, a full service history, a detailed Bentley technical inspection, as well as access to Bentley’s retailer network expertise and factory-trained technicians.

The certificate of authenticity is also a guarantee of quality and performance as the document provides extra reassurance about the heritage and exemplary craftsmanship that is the hallmark of every Bentley. Certified by Bentley cars are guaranteed to have been fully serviced, using only genuine Bentley parts. The comprehensive 12-month warranty that comes with it can be further extended, too.

The Certified by Bentley program also gives owners access to a unique and select lifestyle that come with joining the brand’s network of discerning customers. Invitations to exclusive events around the world and to the Bentley Factory Tour are just a few of the exceptional ownership benefits, as well as a subscription to Bentley Magazine.

“When customers select a Certified by Bentley car, they are making an investment in a brand that has always crafted extraordinary vehicles. The exceptional quality of every car means that whether new or Certified by Bentley, owning a Bentley is a wise decision,” said Mark Keeping, head of pre-owned at Bentley Motors.

The executive added that “costs of ownership are lower than might otherwise be expected, making owning a Bentley an option for a wider number of potential customers.”

Few cars on the road are as finely crafted as a Certified by Bentley model. With a heritage stretching back 100 years, every car to bear the Bentley marque has been built to the same exacting standards, with no compromise on luxury or performance. It is estimated that around 85% of all Bentleys built throughout the brand’s existence are still on the road.

In the Philippines, Bentley is presently offering a 2019 Bentley Continental GT W12 which has traveled only 750 kilometers. It is an extraordinary car that comes at an excellent price. This car can be viewed at the Bentley showroom in Bonifacio Global City.

The definitive luxury Grand Tourer Continental GT is a statement of true luxury, marked by a bold, sculptured exterior design. Its interior offers unrivaled refinement that seamlessly integrates natural materials and cutting-edge technology. Designed, engineered and hand-crafted in Britain, the third-generation Continental GT is powered by 6.0-liter W12 TSI engine that delivers 626 hp and 900 Nm of torque.

Tax appeals court cancels URC’s P2-B assessment

By Vann Marlo M. Villegas
Reporter

THE Court of Tax Appeals (CTA) cancelled the P2-billion tax assessment against Universal Robina Corp. (URC) for lack of due date and exact amount in the assessment notices.

In a 23-page decision dated Jan. 14, the court’s first division said the formal letter of demand issued by the Bureau of Internal Revenue against URC lacked definite amount and due date for the payment of its tax liabilities.

It noted that the demand letter stated that the interest “will still be adjusted if paid beyond the date specified therein” but also does not include the due date.

“Correspondingly, the subject tax assessment is void, and thus, bears no valid fruit,” the decision penned by Associate Justice Catherine T. Manahan read.

“In view of the finding that the subject tax assessments are invalid, it becomes unnecessary to address the arguments raised by the parties,” it added.

The court noted a previous decision of the Supreme Court which ruled that a Final Assessment Notice is invalid for lack of definite amount due despite providing a computation because it meant that its liabilities is still subject to modification depending on payment date.

The lack of due date also “negates…demand for payment,” the High Court’s decision read.

URC was questioning its assessed liability for improperly accumulated earnings tax (IAET) for the year ending on Sept. 30, 2010 worth P2 billion.

It was assessed for the alleged deficiency of P2.5 billion, which consists of IAET, income tax, value-added tax, expanded withholding tax, documentary stamp tax, and withholding tax on compensation.

Section 29(B)(1) of the National Internal Revenue Code of 1997 states that IAET applies to “every corporation formed or availed for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation, by permitting earnings and profits to accumulate instead of being divided or distributed.”

URC said it does not have any IAET and that its additional paid-in capital is not earnings or profits. It also said that it is a publicly-held corporation exempt from IAET. BIR contends that it is liable to pay the assessed deficiency.

Presiding Judge Roman G. del Rosario and Associate Justice Esperanza R. Fabon-Victorino concurred in the decision.

Rolls-Royce sells highest number of cars ever in 2019

By Manny N. de los Reyes

BRITISH ULTRA-LUXURY car maker Rolls-Royce Motor Cars has set a new record as it delivered the highest number of cars in 2019 — the highest number of automobiles sold in a year in the storied marque’s 116-year history.

A total of 5,152 cars were delivered to customers in over 50 countries around the world, an increase of a quarter on the previous record set in 2018. With these historic results, Rolls-Royce continues to make a meaningful contribution to the overall performance of its shareholder, BMW Group.

“This performance is of an altogether different magnitude to any previous year’s sales success. While we celebrate these remarkable results we are conscious of our key promise to our customers, to keep our brand rare and exclusive. We are pleased and proud to have delivered growth of 25% in 2019. Worldwide demand last year for our Cullinan SUV has driven this success and is expected to stabilize in 2020. It is a ringing testament to the quality and integrity of our products, the faith and passion of our customers and, above all, the skill, dedication and determination of our exceptional team at the Home of Rolls-Royce at Goodwood and around the world and our dedicated global dealer network,” declared Rolls-Royce Motor Cars CEO Torsten Müller-Ötvös.

WORLDWIDE ACCLAIM
Sales grew across all regions during the year, driven by strong customer demand for all Rolls-Royce models. The company reported significant sales growth in every one of its key global markets. North America retained top status (around a third of global sales) followed by China and Europe (including UK). Individual countries that achieved record sales results included Russia, Singapore, Japan, Australia, Qatar and Korea.

In 2019, Rolls-Royce automobiles were sold in more than 50 countries worldwide through a global network of 135 dealerships. As part of its commitment to long-term sustainable growth, RollsRoyce announced two new dealerships during 2019 — Rolls-Royce Motor Cars Brisbane and Rolls-Royce Motor Cars Shanghai Pudong. Development of the new Rolls-Royce Motor Cars flagship dealership in Berkeley Street, London — more than twice the size of the previous location — is under way and is due for launch later in the year.

The flagship Phantom retains its rightful place as the company’s pinnacle product, with Dawn and Wraith continuing to dominate their respective sectors; strong demand was experienced for all three models during the year. Cullinan, the marque’s new SUV, successfully translated the media plaudits and public acclaim into the largest advance order book and fastest postlaunch sales growth of any Rolls-Royce model in history.

BESPOKE BADDIE — BLACK BADGE
In November 2019, the marque completed its dark, edgy Black Badge family with the addition of Cullinan Black Badge alongside Ghost, Dawn and Wraith variants, all of which were highly sought-after by customers seeking a more individual, rebellious expression of the RollsRoyce brand.

In its first full year of availability, Cullinan exceeded even the highest expectations raised by its successful launch. The world’s preeminent super-luxury SUV has become the fastest-selling new Rolls-Royce model in history.

The fervor throughout the year around the arrival of Cullinan was matched only by the media and public sensation occasioned by the launch of Cullinan Black Badge, ‘The King of the Night’, in November. This completed the Black Badge family of unapologetic, dynamic products created for an emerging generation of super-luxury consumer; people who refuse to be defined by traditional codes of luxury, follow their own path and make their own rules.

GOODBYE, GHOST — UNTIL THE NEXT
2019 also marked the end of Ghost production after 11 years of uninterrupted commercial and critical success. Since its launch at the Frankfurt Motor Show in 2009, Ghost has established itself as an undisputed modern classic. The most popular Rolls-Royce model of the Goodwood era, Ghost attracted a new audience of younger, often self-made, entrepreneurial customers to the Rolls-Royce brand. An extended wheelbase version was introduced in 2011 and an updated Ghost Series II was unveiled in Geneva in 2014. The last Ghost of the current generation left the Goodwood production line at the end of 2019.

Ghost has been a highly successful and vitally important car for Rolls-Royce. Over its 11-year lifecycle — a truly remarkable record for any motor car — it became the biggest-selling Rolls-Royce not just of the Goodwood era, but in the entire history of the marque. The commercial success of Ghost placed Rolls-Royce in a position to scale up its production and make the massive investments that have led to it becoming the truly global brand it is today.

Ghost’s successor is due for launch in mid-2020 after five years in development. With market availability from the fourth quarter, the successor will elevate the Ghost name, and the company itself, to new heights of excellence and ambition in design, engineering, materials and driving dynamics.

BESPOKE: GOODWOOD’S JEWEL IN THE CROWN
Global demand for Rolls-Royce Bespoke reached a new peak in 2019. The Bespoke Collective at the Home of Rolls-Royce in Goodwood, West Sussex, comprises several hundred creative designers, engineers and craftspeople. These highly talented men and women take enormous pride in fulfilling unprecedented levels of customer requests for Bespoke personalization and delivering on beautiful individual commissions such as the Rose Phantom. Undisputed global leaders in their pursuit of perfection, the Bespoke Collective captured the imagination of customers, enthusiasts, media and fans alike in 2019 with some of the most spectacular Collection Cars ever created in the history of the brand.

Among the year’s Bespoke highlights was the Zenith Collector’s Edition of Rolls-Royce Ghost. Limited to just 50 examples, this masterpiece was created to mark the end of Ghost’s remarkable 11-year reign.

A DIVERSE AND EXPANDING FAMILY
At more than 2,000 strong, with 50 nationalities represented, the work force at the Home of Rolls-Royce is now at its largest since the opening of Rolls-Royce’s Global Centre for Luxury Manufacturing Excellence, in 2003. During 2020, 50 new jobs were created to meet expanded global demand.

This year’s intake of 26 new entrants on the company’s highly successful Apprenticeship Program included the first-ever Sir Ralph Robins Degree Apprenticeship candidates. Named after the ex-CEO of Rolls-Royce plc, Sir Ralph has served as a Non-Executive Director of Rolls-Royce Motor Cars since its inception in 2003.

Since the launch of the Apprenticeship Program in 2006, almost 200 participants have completed a combination of hands-on practical training alongside skilled Associates and vocational training at local colleges. A number of these remarkable men and women have gone on to hold important technical and supervisory roles within the company.

BULLISH IN BESPOKE
The year saw significant new investment in the manufacturing plant at the Home of Rolls-Royce at Goodwood, reaffirming both the company’s commitment to its UK operations and its buoyant outlook for the years ahead. Projects included further refinements to the already world-class manufacturing facilities, equipment and processes, to maximize efficiency and ensure the highest levels of quality as demanded by Rolls-Royce customers. A new two-storey development, due for completion in the first quarter of 2020, will add more than 1,000 square meters to the ground floor Assembly Hall, and create additional first-floor office space.

“There is no other company like Rolls-Royce Motor Cars: we are all conscious of what a privilege it is to design, build and deliver the best car in the world for our customers. PersonalIy, I continue to feel honored and humbled to have led this great company for the past decade,” Mr. Müller-Ötvös concluded.

Implementing rules on real estate investment trust ready for signing

THE government is set to sign today the amendments to the implementing rules and regulations (IRR) of the Real Estate Investment Trust (REIT) Act, which is expected to draw up REIT registrations from listed property firms.

The Securities and Exchange Commission (SEC) announced through a media invitation on Friday the joint signing ceremony for the REIT guidelines with the Department of Finance (DoF), Bureau of Internal Revenue (BIR) and the Philippine Stock Exchange, Inc. (PSE) today.

Republic Act No. 9856 or the REIT Act was released by the government in 2009 as part of “(promoting) the development of the capital market, …broadening the participation of Filipinos in the ownership of real estate…, (and using) the capital market as an instrument to help finance and develop infrastructure projects.”

While the REIT Act requires the publication of the IRR within 90 days from the law’s effectivity, disagreements on a number of its provisions such as the minimum public ownership requirement delayed the release of the guidelines by more than a decade.

In October last year, the SEC released its draft IRR which reduced the minimum public ownership requirement for REITs to 33% from the current 40% within one year and 67% within three years, and required all income generated from REITs to be invested back to the Philippines.

But SEC Commissioner Ephyro Luis B. Amatong said in November that conflicting rules with the BIR is another thing that the SEC has to settle before the release of the IRR.

“Unless the BIR changes the revenue regulation to be in line with the proposed change in the SEC’s regulation lowering back the minimum public float requirement for a REIT to 33%, there will be potential confusion among issuers. SEC will be prescribing a lower threshold, and if the BIR does not amend its rules, the tax benefit will not come in unless we get 66%. So we’re coordinating with the Department of Finance in order to make sure that the regulations are aligned,” Mr. Amatong said then.

The release of the IRR is expected to result in REIT listings from private firms such as Ayala Land, Inc. and DoubleDragon Properties Corp. Other firms such as Megaworld Corp., Robinsons Land Corp. and Century Properties Group, Inc. have also expressed interest in REITs.

The PSE also sees the REIT rules as one of the growth drivers for the local bourse this year, in line with expectations of investment banking arm First Metro Investment Corp. and brokerages Philstocks Financial, Inc. and 2Tradeasia.com. — Denise A. Valdez

Nissan relaunches Pasig dealership with Autohub Group

IN LINE with the brand’s commitment to make Nissan products and services more accessible to more people in the country, Nissan in the Philippines together with the Autohub Group relaunched the Nissan Pasig dealership in a new location along Eulogio Rodriguez Jr. Ave. (C5 Ave).

The 1,400-sq.m. dealership can house up to nine display and has two Nissan Express Service bays. The dealership is also connected to a bigger 3,000-sq.m. service center with ten service bays located in a nearby area.

“The relaunch of the Nissan Pasig dealership is part of the long-standing partnership between Nissan and the Autohub Group. This new location enables us to offer an improved Nissan Customer Experience by providing better access and more reliable services to our customers in the Pasig City area,” said Nissan in the Philippines President and Managing Director Atsushi Najima.

At the dawn of UHC, private hospitals brace for long struggle

By Denise A. Valdez, Reporter

THE HOSPITAL UNIT of Metro Pacific Investments Corp. (MPIC) came close to staging a massive initial public offering (IPO) this year worth P83.3 billion — right on the eve of implementing the Universal Health Care Law (UHC).

Asian Development Bank Senior Health Specialist Gerard Servais found it to be an indication of the health sector’s growth potential, as “it proves that the private sector is vibrant, because they need money.”

Metro Pacific Hospital Holdings, Inc. (MPHHI) was raising cash to invest in building additional hospitals, cancer centers, clinics and new health care businesses. It would have boosted the company’s network of 14 hospitals then (15 now) and several cancer care centers, clinics, laboratories and medical schools.

The offer was widely anticipated — up until it was cancelled. MPIC announced a month before the scheduled offer period that it is deferring the IPO and instead took in a P35.3-billion investment from Kohlberg Kravis Roberts & Co. (KKR) and Singapore’s GIC Pte Ltd., the city-state’s sovereign wealth fund. The deal was finalized in December.

Is the decision to postpone going public an indication of MPHHI’s concerns about cash flow on the eve of UHC — a landmark government program that would demand much from private hospitals?

Maria Corazon C. Consunji, president and chief executive officer of Makati Medical Center (Makati Med), which is part of the MPHHI network, said this was not exactly the case.

“It was always in the discussion with the investors that putting that aside was not because of UHC but because there was a nicer proposition,” she said in a Dec. 12 interview, referring to MPHHI’s IPO delay.

But she added that although MPHHI did not do the IPO, there are indeed worries about cash flow under UHC.

“It’s a little bit alarming for (investors) because there’s a lot of unknowns,” Ms. Consunji said. “They see your cash flows and everything, but they don’t know what will happen when UHC comes… That’s a big challenge for investors. So they just have to take the risk.”

Under UHC, the government would require private hospitals to allocate at least 10% of their beds for basic or ward accommodation, as indicated in Section 29.7 of the law.

It would also get rid of the “co-payment,” or the differential between a private hospital’s rate and what the government pays through Philippine Health Insurance Corp. (PhilHealth). Ms. Consunji said under UHC, private hospitals would have to absorb the co-payment costs.

The cash flow concern alarms other private hospitals too, such as St. Luke’s Medical Center. Senior Vice-President Benjamin S.A. Campomanes said UHC would increase the base of active PhilHealth members by about 80%, meaning the volume of bad debt may increase by a proportional amount.

“With an 80% increase in potential bad accounts, private hospital profits will likely fall, especially since healthcare providers generally have low margins,” he said at the Hospital CEO Forum in Makati City last Dec. 12.

Mr. Campomanes noted it also does not help that PhilHealth already has years worth of payables owed to private hospitals because of technical problems with its claims system.

According to the Private Hospitals Association of the Philippines, Inc. (PHAPi), 170 hospitals are owed P3.4 billion worth of receivables from PhilHealth as of Nov. 18, 2019. To some of these hospitals, the receivables date as far back as 2014.

PHAPi President Rustico A. Jimenez said this concern is what is prompting about 600 hospitals to withdraw their PhilHealth accreditations by 2020.

“During the last (PHAPi) convention (in November), about 600 hospitals were present and signified their intention not to accredit with PhilHealth pending the payment of receivables,” he said in a Nov. 26 interview.

Mr. Jimenez said unlike bigger hospitals such as Makati Med and St. Luke’s which can survive when unpaid by PhilHealth, smaller private hospitals run the risk of losing operating cash if receivables are delayed for months.

“We are not against Universal Health; we want to cover all patients. But they should consider that private hospitals do not have funding from the government. Where will we get the funds to support Universal Health if they will not pay us on time? Chances are these hospitals will go bankrupt,” he said.

UHC has an ambitious dream for free healthcare, from check-ups to accommodation. Ms. Consunji, Mr. Campomanes and Mr. Jimenez all agree the government is going in the right direction in wanting to increase access to healthcare.

But for them, timing is important for pursuing a big revolution such as UHC, as it would demand much from both the public and private sectors in terms of reshaping how healthcare works. Primarily, the law wants healthcare to be preventive rather than reactive by promoting primary care and assigning a primary care provider for every Filipino.

Yung prevention na sinasabi ng UHC (The promotion of prevention that UHC wants is) very good. But I think there are a lot of things that need to be changed. The only challenge is the quickness of this, because this is a few (months). February they signed (the law), then October (they released the implementing rules and regulations). You can’t change a system in six months or even one year,” Ms. Consunji said.

Mr. Jimenez added: “We are telling them, ‘Do not implement it immediately. Talk to us.’ Because all the amendments that were supplied by us were not included in the IRR. So what will happen to the implementation if you do not follow our suggestions? You will fail, definitely.”

Jeremy Lim, co-director of Leadership Institute for Global Health Transformation at the National University of Singapore School of Public Health, said there a “political price to pay” for UHC to be sustainable.

Speaking at the Hospital CEO Forum on lessons on UHC implementation in Asia, he said it is “unfortunately the karma of any funding agency like PhilHealth to struggle.”

“The first rule of health economics is scarcity. There will always be much more demand than there will be supply. And that, unfortunately, is the reality moving forward. The financier will always have this challenge of how to balance. We see almost everyone has stumbled here and there,” he said.

He also said hospital CEOs will have to figure out a way to deal with cash flow challenges and pricing pressures as “these will not go away.”

“No matter the economic volatility… UHC implementation and sustainability, from a political point of view, will always remain. There is no country in the world other than America that has walked into UHC and wanted to walk out… Every other country has embraced UHC and said it is morally and nationally the right thing to do,” Mr. Lim added.

PhilHealth acknowledges it has to work to repay private hospitals for the years of receivables it has not distributed to claimants.

Speaking at the Hospital CEO Forum, PhilHealth Area Vice-President for South Luzon and NCR Gregorio C. Rulloda said the agency is committed to “craft settlement of our obligations to our partner hospitals.”

But PhilHealth President Ricardo C. Morales, in a briefing in October, noted it is a “cheap stunt” to threaten withdrawing from accreditation as it is “putting the public in a predicament which they don’t deserve.”

Despite the uncertainty about what will happen once UHC is in full effect, some private sector entities are positive about how it will change healthcare in the Philippines. For instance, Ayala Healthcare Holdings, Inc. (AC Health) has become more bullish on the industry because of UHC.

“I think it’s made us more excited to invest in the space… Anytime there’s an industry that has enabling regulatory frameworks… when you’re opening up an industry for more awareness and more utilization, it’s always good for private sector participants,” AC Health President and Chief Executive Officer Paolo Maximo F. Borromeo said in a Nov. 21 interview.

Operating as the health unit of Ayala Corp. with 70 FamilyDoc clinics and pharmaceutical operations, AC Health is looking to increase its investments moving forward in light of UHC.

“It’s an industry that is very exciting for us as a group. We think it has very big long-term potential. And so I think we’ll look to continue investing where we can help address gaps in the system,” Mr. Borromeo said.

But it doesn’t ignore the fact that beyond just money, there’s a need for a lot more beds and medical professionals for UHC to take effect. PhilHealth’s Mr. Morales agrees with this, thus the government’s decision to do a “gradual rollout” for UHC to cover 33 sites first by 2020.

Mr. Campomanes of St. Luke’s believes the government has to work closely with the private sector for an efficient implementation of UHC. “There are few hospital beds. Some cities and towns would have only a private hospital. So what happens then if someone gets sick? You need to admit,” he said.

Makati Med’s Ms. Consunji also said what the private hospitals can do is rationalize expenses to increase absorptive capacity for bad debts. “Decrease your costs because there’s no other way… Then maybe in the future, capital expenditure in terms of machinery. Maybe you’ll have to be more careful in buying,” she said.

But to give stakeholders a sense of “solidarity” in the midst of all the uncertainty, Mr. Lim said almost all countries that implemented UHC are struggling with it, and that is the normal thing to happen.

“The good news about UHC is there are no real experts. Everyone is struggling. There is a lot of solidarity, a lot of comfort in that the whole world is struggling with you. And we will continue to struggle until the end of time because UHC will never be finished,” he said.

“It is a journey, and it is important to appreciate that in this journey, the secret is not to not fall, but to fall forward. Because we will definitely fail in some areas, but we have to fail quickly, learn, and move forward in the right direction.”

Alsons starts building small hydro-power plant, lines up more

THE power group of Alsons Consolidated Resources, Inc. (ACR) has started the construction of its 14.5-megawatt (MW) run-of-river hydroelectric power plant at the Siguil River basin in Maasim, Sarangani province, it said on Sunday.

Alsons expects the P4.5-billion project to begin operations in 2022 to provide power to Sarangani, South Cotabato, and General Santos City.

“In the next few years, in terms of the number of power facilities, renewable energy will constitute the largest segment in Alsons Power’s portfolio,” said ACR Chairman and President Tomas I. Alcantara in a statement.

Alsons, which claims to be Mindanao’s first and most experienced private sector power generator, plans to develop at least seven more run-of-river hydro-power facilities in different parts of Mindanao and Negros Occidental.

It said the next two hydro-power facilities in the group’s pipeline are the 38-MW Sindangan hydro-power plant in Zamboanga del Norte and the 42-MW Bago hydro-power plant in Negros Occidental.

Once completed and operational the hydro-power plants will make up the bulk of the company’s power facilities.

Aside from the hydro plants another project in Alsons power’s pipeline is the 105-MW San Ramon Power, Inc. baseload coal-fired power plant in Zamboanga City, which is set to begin operations in 2023.

“SRPI will soon select the plant’s engineering procurement and construction contractor,” the company said.

Alsons’ power group operates four power facilities in Mindanao with a total generating capacity of 468 MW serving more than 8 million people in 14 cities and 11 provinces. — VVS

MinDA taps Filipino-Americans for high value exports to US

DAVAO CITY — The Mindanao Development Authority (MinDA) is tapping Filipino-American communities in the US to help expand the market for Mindanao agricultural products.

MinDA, in a statement over the weekend, said the plan was hatched following a visit last week by representatives of the Davao Association USA (DAUSA), led by the group’s president, Fernandico Gonong Jr., and the Filipino-American Community of Los Angeles (FACLA).

“We have to identify potential MinDA coordinating officers based in LA (Los Angeles) who are willing to represent the interest of Mindanao, as well as to promote our products in various trade and business activities there,” MinDA Chair Emmanuel F. Piñol said.

MinDA’s International Relations and Investment Promotions team and the Department of Trade and Industry (DTI) will map out how carry out the plan.

Among the identified products that could be initially exported are frozen bangus, frozen durian, and tablea.

Among the Mindanao agricultural goods already being exported to the US are cacao products such as chocolate and coconut products.

“We have the largest concentration of Filipinos in the US and this bayanihan for Mindanao products is really promising,” Mr. Gonong was quoted as saying in the statement.

The export program, he said, will need to have “a strong e-business platform in addition to the house-to-house delivery.”

Mr. Piñol, in an earlier interview with BusinessWorld, said one of MinDA’s priority initiatives is helping farmers and manufacturers expand their markets.

“We need new markets that will welcome our products at premium prices,” he said. — Carmelito Q. Francisco

Celebrate Chinese New Year with the three-pointed star

STEP INTO the world of Chinese New Year, a world of generosity, festivity and family — and a world of amazing offers! Celebrate the Year of the Rat with a brand new Mercedes-Benz.

C-CLASS: BRIMMING WITH TECHNOLOGY, BOOMING WITH POWER
The Mercedes-Benz C-Class has been highly regarded as one of the iconic vehicles of Mercedes-Benz brand. The new C-Class boasts an impressive blend of style and smarts with an added dose of speed, with more horses, agility, strength and confidence to match the beauty of its well-toned body. The new C-Class is available in petrol guise and comes with a 9G-TRONIC 9-speed transmission providing exceptional response and sportiness.

On a visual level, the C-Class adopts a progressive approach with its clear, dynamic design and its high-class interior. It’s equipped with standard new multi-element LED headlamps that offer brighter, more natural illumination by night, and eye-catching design by day.

CLA: SEDUCTIVELY ENGINEERED COMPACT EXECUTIVE CAR
A dream car you can drive. The new CLA lets you express your style and impress everyone else. More intelligent, sportier and progressive than the predecessor, the seductive character is showcased not just in the shape but more so in its overall features.

The exterior shows off an exceptionally aerodynamic built packaged in a sleek and taut body further adorned with enticing curves from all angles. The modern look is sealed by the expressive sculpting, frameless door glass, and confident stance. With its brilliant diamond radiator grille, muscular shoulders and sculptured rear end, the CLA’s styling lets you shine.

Under the hood, its powerful engine generates more power even while consuming less fuel and incurring less emission. Furthermore, the CLA is equipped with the standard ECO Start/Stop that facilitates seamless shift to fuel economy. The DYNAMIC SELECT feature makes it possible for the driver to choose among three drivetrain modes to suit driving moods and requirements.

GLC: STRENGTH IN BEAUTIFUL FORM
The new GLC is beautifully sculpted and undeniably intelligent. Certainly a well-rounded SUV with its outstanding performance on city streets and off-road terrains, to its captivating shape and comfort within. The GLC is outfitted with the latest generation of intelligent driver assistance technology, including Adaptive Brake and ATTENTION Assist System.

The GLC also revels in the latest interactive technology with the Mercedes-Benz User Experience multimedia system (MBUX). The intelligent voice control allows you to explore its intuitive logic and state-of-the-art interface using the “Hey Mercedes” prompt, while the center console provides a multifaceted touchscreen elevating your convenience.

What a better way to welcome the new lunar year with a brand new Mercedes-Benz car? Head to any of the showrooms located at EDSA Greenhills, BGC, Alabang, and Cebu City to test-drive, and catch the smart offers exclusively available in celebration of the Chinese New Year.

T-bills, T-bonds to fetch higher rates on GDP data

YIELDS ON THE government securities on offer this week will likely inch up ahead of the fourth-quarter gross domestic product (GDP) data which will be released on Thursday.

The Bureau of the Treasury (BTr) will issue P20 billion worth of Treasury bills (T-bills) on Monday, broken down into P6 billion for 91- and 182-day papers and P8 billion for 364-day securities.

On Tuesday, the BTr will also attempt to raise P30 billion via seven-year reissued Treasury bonds (T-bonds) which have a remaining life of six years and 24 days.

Sought for comment, a bond trader said on Friday that the rates of the T-bills on offer will likely go up by around 10 to 15 basis points (bps), while the seven-year T-bonds may also fetch higher rates.

At the T-bill auction last week, high rates across the board prompted the Treasury to award just P16.875 billion out of the P20-billion program. Specifically, the three- and six-month papers fetched average rates of 3.328% and 3.587%, respectively, while the one-year securities’ yield was at 3.896%.

Meanwhile, the bond trader said the seven-year papers may fetch rates between 4.575% and 4.65%, higher compared to the 4.322% quoted when the tenor was last offered in Oct. 29.

“We think the rates (of T-bills) will go up by 10-15 bps ahead of the fourth quarter GDP for 2019. [For the T-bonds,] we see it at 4.575%-4.65%. [The market is pricing in the release of] fourth- quarter GDP [data] for now and also to take positions, hence the higher rates, so they can position themselves now, in January,” the trader said via phone.

At the secondary market on Friday, the three-month, six-month, and one-year T-bills fetched yields of 3.298%, 3.489% and 3.825%, respectively, according to the PHP Bloomberg Valuation Service Reference Rates. Meanwhile, the seven-year bonds were quoted at 4.626%

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort shared the same sentiment, saying the market will look out for the release of GDP data this week.

“Government securities auction yields for this coming week could go up, after local benchmark yields in the secondary market mostly went up by as much as +0.10 week-on-week,” Mr. Ricafort added.

The Philippine Statistics Authority will report on Thursday fourth-quarter and 2019 GDP data.

Socioeconomic Planning Secretary Ernesto M. Pernia last week said the economy might have expanded by around “6.6-6.7%” in the fourth quarter to boost the full-year average and hit the 6-6.5% official target.

If realized, fourth quarter’s performance will outpace the previous quarter’s print of 6.2% and will also be faster than the 6.3% recorded in the last three months of 2018.

An at least 6.6% GDP growth print will be the fastest expansion rate in more than two years or since the seven percent logged in the third quarter of 2017.

The economy grew by 5.6%, 5.5% and 6.2% in the first, second and third quarters of 2019, respectively, bringing the average GDP growth to 5.8% for the nine-month period.

The Treasury has set a P420-billion local borrowing program this quarter, broken down into P240 billion in T-bills and P180 billion via T-bonds.

The government plans to raise P1.4 trillion this year from local and foreign lenders to plug its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Beatrice M. Laforga

It takes a village — and more — to raise disaster resilience

IN UNDER a minute of the earth’s shaking, the people of Balutakay, a coffee-farming village at the foot of Mt. Apo, saw their homes, warehouse, and processing center sustain severe damage.

It was Oct. 31, 2019 and the magnitude 6.5 tremor that struck that day was the third strong one for the month after a 6.6 just two days prior and 6.3 on the 16th.

The 170 families in Balutakay, many of them members of the Balutakay Coffee Farmers Association (BACOFA), evacuated.

And there is no going back as their community has been declared by authorities as a no-live zone.

Among them is Marivic Dubria, the BACOFA manager who would have considered 2019 one of the best years ever as she represented the country in April at the Specialty Coffee Exposition in Boston after topping the Arabica Category of the year’s Philippine Coffee Quality Competition (PCQC). In 2018, she ranked 2nd.

At a media forum in Davao City after her PCQC award, Ms. Dubria talked excitedly about promoting the community’s coffee to a global audience, the value of contributing to local industry, and inspiring fellow farmers to aim for superior produce that will fetch higher prices.

Joji Felicitas B. Pantoja, founder and chief executive officer of social enterprise Coffee for Peace, Inc., which has been working with BANOFA since 2013, said the enterprise is as heartbroken as the people in the village that they have seen work hard and grow.

In an interview with BusinessWorld, Ms. Pantoja narrated the grief and worry of the families, who set up temporary shelters around the nearby Malipayon processing center of Coffee for Peace.

“Nanay Teresing, one of the community leaders and also among the top 10 champion farmers, looked really dazed and worried. They don’t know what will happen to them. Can they go back to the farm? Because the coffee (trees) are there,” she said, speaking in mixed English and Filipino.

Jobelyn Basas, field network director of Peacebuilders Community, Inc., a partner organization of Coffee for Peace, said local officials allow the BACOFA members, in small groups and only during daytime, to go back to the area to harvest as there are abundant quantities that are ripe for picking.

“So far they have not declared it a no-farm zone,” she said, although some of the farmers are too traumatized to take the risk.

Ms. Basas also noted that aside from the Balutakay residents, another 450 families from the neighboring Bagobo-Tagabawa indigenous community, mostly with members who are trained and involved in the coffee post-harvest process, have also been affected.

These over 600 families from Davao del Sur province are among the more than 71,000 affected by the October earthquakes, which were felt in most parts of Mindanao and left Cotabato province, the epicenter area, the hardest hit.

As of end-November, data from the national disaster management council show over 13,000 families are still in 107 evacuation centers while almost 25,000 others who have been displaced but are not in the temporary shelters are also being given assistance.

DISASTER DEPARTMENT
The Mindanao earthquakes —which came after similarly strong tremors last year in the Batanes islands in July and in Central Luzon in April, alongside the average 20 typhoons that sweep through the country every year — have prompted the Senate to make the proposal to create a Department of Disaster Resilience (DDR) a priority.

Lyndon L. Ancajas, administrative training chief of the Davao City Disaster Risk Reduction Management Council (CDRRMC), said whatever final version of the proposed law will be passed, what is crucial is improving access to national funding for local governments, particularly small towns.

“I read a few versions and it looks good… especially the funds in store for those municipalities that have a very small budget for DRRM,” he said.

In the case of a big city like Davao, which is also a pioneer in a centralized response system through its 911 hub, Mr. Ancajas said what the city has been working on is expanding and strengthening an even more localized response system to “ensure that all bases are covered.”

“Various offices of the city government are encouraged to create their own disaster action team… This is to enhance and intensify disaster preparedness,” he said.

Cotabato Vice-Governor Emmylou T. Mendoza, who previously served as governor for three terms and was acting governor when the earthquakes struck, said the creation of a DDR should mean having a “more focused approach for interventions and coordination.”

“In our experience, for as long as we follow the disaster protocol and line of command, there will be no overlap (in functions),” she said, citing how the various national agencies helped Cotabato through the National Disaster Risk Reduction Management Council (NDRRMC).

“This is okay pa naman (so far), maybe we just need to strengthen it. But of course, I can’t speak for the experiences of the other LGUs (local government units) or areas hit by calamity,” Ms. Mendoza said.

Peacebuilders President and Chief Executive Officer Daniel A. Pantoja — who has been on the ground for the earthquake relief assessment and was involved in past post-calamity activities such as in super typhoon Haiyan in the Visayas, typhoon Pablo (Bopha) in Mindanao, and the Marawi City siege — said he can attest to how disasters are often “politicized,” usually at the local government level, which is at the front lines of emergency response.

“Hopefully the DDR will be able to transcend local politics,” he said.

“And hopefully the DDR will not lead to ‘disaster capitalism,’” he added, referring to how rehabilitation programs for both natural and man-made calamities, in many cases, leave the most vulnerable victims even more marginalized.

An official of the Department of National Defense’s Office of Civil Defense, which serves as the implementing arm of the NDRRMC, has cautioned legislators about a DDR that would end up with “overwhelming” functions.

OCD Undersecretary Ricardo B. Jalad, at a Nov. 11 Senate panel meeting on the proposed new department, noted that disaster management involves many aspects, from preparedness to response to reconstruction.

“That would be a very big function to be placed under one department,” Mr. Jalad said, and suggested that the DDR focus on the planning aspect.

“Lead role can be assigned to the department. For the implementation, it would still rely on the lead agencies,” he said.

DATA-BASED MODEL
The National Resilience Council (NRC), a private sector-led initiative launched in October 2017, recognizes the primary role of LGUs in overall disaster management.

The NRC, with its goal of strengthening public-private sector collaboration and building up LGU capacity, has named Iloilo City as its first model locality on developing disaster resilience.

NRC President Ma. Antonia Yulo-Loyzaga said Iloilo was chosen because of the existing strong collaboration between the LGU, the private sector, and the science and technology community.

“Iloilo has a very good foundation for how evidence-based risk governance can actually be part of the sustainability of the city,” she said in an interview in the city.

The three-year Adopt-a-City program for Iloilo is a multi-sector endeavor involving the academe, particularly various universities in the Visayas, national agencies, private companies, and foreign experts.

On Dec. 2, the city government signed a memorandum of cooperation with the NRC, Taiwan’s National Science and Technology Center for Disaster Reduction, and the Manila Observatory for the establishment of the first locally-based disaster information system.

On the same day, an agreement was also signed for the Smart Sensor Network, which also involves national agencies, alongside the universities, and private firms Alliance Global Group, Megaworld Iloilo, and SM City Iloilo.

“Today’s agreements are complementary to the science and technology as well as leadership and governance goals of our Local Government Systems Program for Iloilo City. What we’re trying to do is provide a system of environmental monitoring, a way to gather data through the networks and equipment both for climate, weather, and earthquake events,” Ms. Loyzaga said.

Manila Observatory Executive Director Gemma T. Narisma said data is important, especially for developing cities, to address the increasing risks of climate change and disasters.

“Things are changing not only in terms of the hazards but also in terms of hazards and vulnerabilities as the city continues to develop, so even now it is important to have this data… We should look at them, study them and try to see what development pathways should Iloilo do so that it will lead to a more resilient future,” she said.

Iloilo CDRRM Office head Donna P. Magno said the disaster resilience program is not just about the local government’s readiness and capacity, but having an informed and prepared population.

“We are frequently exposed to many hazards such as typhoon, flooding, fire, storm surge, and earthquakes; that is why we are stepping up our efforts to reduce the risk of the disasters and improve the competencies of the residents,” Ms. Magno told BusinessWorld.

Mayor Jerry P. Treñas said apart from residents, disaster resilience is also about protecting investments in the city.

“We need to be resilient not only to make sure that our people will be safe but also investors,” he said.

Ms. Magno said a DDR would be most welcome as another partner “to achieve our dream of becoming a resilience model,” and at the same time noted that disaster management ultimately starts with ‘self help.’”

“Since the first level of disaster management is ‘self-help’… we are really aggressive in terms of our community education programs,” she said.

BACOFA, a community proud of its achievements and full of optimism in the continued growth of the coffee venture, is getting sufficient relief and short-term help from private sector partners, including its network of foreign buyers, according to Ms. Pantoja.

But its future — where the residents will be relocated, the timeframe for setting up new houses, the fate of the farms, the site for rebuilding the coffee processing facilities — rests largely on decisions that will be made by the government.

Ms. Pantoja said given the public sector’s poor track record in implementing rehabilitation programs, the people of Balutakay feel insecure about what lies ahead.

“They ask, ‘Ano na (Now what)?’”

She said it is possible having a DDR would improve the system. And should there be one, she said it must be “pro-people” above anything else.

“Human dignity,” Ms. Pantoja said, must be at the core of disaster resilience. — Marifi S. Jara, Maya M. Padillo, and Emme Rose S. Santiagudo