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NGCP readies new power transmission projects ahead of proposed regional grid

PRIVATELY owned National Grid Corporation of the Philippines (NGCP) said on Tuesday that it had lined up at least four power transmission interconnection projects to add to those nearing completion, including the P 51.7-billion Mindanao-Visayas Interconnection Project that is scheduled to be finished in December 2020.

“The only way to forward this vision of a fully interconnected and integrated transmission system is to keep investing in the transmission grid. These projects will greatly benefit the country, energizing the entire archipelago even up to the farthest islands,” NGCP said in a statement.

“This will also prepare the entire Philippine grid for the integration to the proposed ASEAN Power Grid, promoting power sharing and optimization of generation capacity within the region,” it added.

NGCP said the projects are aimed at building what it called “One Grid Philippines,” its vision of a fully interconnected and integrated power grid using state-of-the-art technology.

It identified the future projects to include those interconnecting Batangas and Mindoro; Bataan and Cavite; Bataan and Pasay; Palawan and Mindoro; and the Laray-Cordova 230-kilovolt (kV) transmission line.

“With over 7,600 islands in the Philippine archipelago, energizing and connecting major islands to the grid was a challenge that confronted NGCP when it took over from government,” said the company, which is led by businessmen Henry T. Sy, Jr. and Robert G. Coyiuto, Jr.

Among the first interconnection projects completed by NGCP is the first stage of the P6.1-billion Cebu-Negros-Panay submarine cable component, which increases the transfer capacity of the existing corridor.

The project’s second phase is an additional submarine cable for N-1 contingency, which will allow the transmission grid to withstand a major system disturbance with minimal disruption to the system between Negros and Panay islands.

NGCP said several interconnection projects are in the works, including the P47.8-billion stages two and three of the Cebu-Negros-Panay interconnection project, which will have a 230-kV backbone to accommodate the transmission of excess power from Panay and Negros towards the rest of the Visayas.

The company said pre-construction activities were set for the P8.5-billion Nabas-Caticlan-Boracay transmission line project that will address the growing demand in Boracay Island by providing additional capacity to support its development.

Also in the pre-construction phase is the P2.4-billion Panay-Guimaras 138kV transmission line.

NGCP is also building the P1.9-billion Cebu-Lapu Lapu 230kV transmission line project to maintain the continuous transmission of power towards the major load centers in Mandaue and Mactan during N-1 condition. It now in the middle of a survey and right-of-way activities for the project.

It said another interconnection is the P19.8-billion Cebu-Bohol 230-kV project, which will address overloading issues and enable sharing of power between the two islands once completed. It will form part of the Leyte-Bohol 230-kV loop system. — VVS

Art & Culture (01/15/20)

Duemila kicks of 2020 with Josephine Turalba show

GALLERIA DUEMILA starts the New Year with Josephine Turalba’s exhibit High Wire High Seas, curated by Angel Velasco-Shaw. Turalba is an interdisciplinary artist who explores issues of divide and convergence within a volatile geo-political world order. She has a nomadic relation to various forms of media, including performance, installation, experimental video, photography, tapestry, and painting, which allows her to explore her obsessions with socio-political narratives, myths, and personal histories. Her second solo exhibition with Galleria Duemila showcases her musings regarding the shifts of international powers amidst intriguing political and economic current events. Turalba holds an MFA in New Media from Transart Institute New York (USA) and Donau Universität Krems (Austria). She has served as Dean at the School of Fine Arts and Design at Philippine Women’s University and received numerous art grants. Her works have been exhibited at ICA Singapore, the London Biennale, the European Cultural Center (held concurrently with the 56th Venice Biennale), the 12th Cairo Biennale, Arter Space Istanbul, the VII Tashkent Biennale of Contemporary Art, the Malta Contemporary Art Center, and the Cultural Center Philippines. The exhibit is ongoing until Feb. 29 at Galleria Duemila, 210 Loring St., Pasay City. The gallery is open Monday to Saturday, 10 a.m. to 6 p.m.

Atlantis is auditioning kids for Oliver!

ATLANTIS THEATRICAL will be holding open call auditions for the children’s roles in the award-winning musical classic, Lionel Bart’s Oliver! They are looking for boys and girls aged seven to 14 who can sing, act, and dance. Auditions will be held at the Zobel de Ayala Recital Hall, Maybank Performing Arts Center, BGC, Taguig City, from 10 a.m. to 5 p.m. on Jan. 18, Saturday. Registration closes at 4 p.m. Children must come prepared to sing one musical theater song and bring with them sheet music, a 3R headshot, their birth certificate, and a parent or guardian’s written consent. A parent or guardian must accompany each child and must be prepared to fill out a registration form upon arrival. Rehearsals for the show begin April 27, with performances from June 19 to July 19. Based on Charles Dickens’ novel Oliver Twist, Oliver! tells the story of a half-starved orphan in search of a home, family, and love. After being sold to an undertaker, Oliver flees to London and is welcomed into a group of street urchins led by the sly Fagin. When Oliver is falsely accused of a theft he did not commit, a wealthy and kind gentleman, Mr. Brownlow, takes him in. Fearing the safety of their hideout, Fagin and his associate, the violent Bill Sikes, plot to kidnap Oliver, threatening his chances of discovering the true love of a family. This all-new revival of the award-winning family musical is presented through a special licensing agreement with Cameron Mackintosh Ltd. and MTI. For further casting inquiries, call 8650-5144, 0917-838-1534, or e-mail casting@atlantistheatrical.com.

Concerto de Aranjuez for MSO finale

THE Manila Symphony Orchestra (MSO) will perform Concerto de Aranjuez and Shostakovich’s Symphony No. 5 for its 2019-2020 Season finale. The concert will feature guitar virtuoso Jacob Cordover performing Concerto de Aranjuez with the MSO. The orchestra, under the baton of Marlon Chen, will open the concert with a performance of Russian composer Dmitri Shostakovich’s Festive Overture and close the season with his Symphony No. 5. The concert will be on Feb. 5, 7:30 p.m., at the Tanghalang Nicanor Abelardo, Cultural Center of the Philippines, CCP Complex, Pasay City. Tickets are available at the CCP Box Office (8832-3704), Ticketworld (889-1999), or the MSO (e-mail info@manilasymphony.com).

MCAD presents group show Constructions of Truths

THE Museum of Contemporary Art & Design (MCAD) present the group exhibit Constructions of Truths from Feb. 6 to April 12, with the official opening on Feb. 8, 5 p.m. The show asks the audience to reflect on the truths of images which populate everyday life and how these affect how we view the world. Artists in the show present work using the projected image as a metaphor for how images are projected on us as viewers and how artists, through formal, aesthetic and narrative spaces, question these constructions. The participating artists are: Martha Atienza, Minerva Cuevas, Luay Fadhil, Ramin Haerizadeh/Rokni Haerizadeh/Hesam Rahmanian, Shuruq Harb, Ho Tsu Nyen, Thao Nguyen Phan, Maria Taniguchi, and James N. Kientiz Wilkins. The show is presented by MCAD in partnership with the Han Nefkens Foundation. MCAD is at the De La Salle College of Saint Benilde, School of Design and Arts Campus, Dominga St., Malate, Manila.

Fed on hold, but will financial risks matter?

US FEDERAL RESERVE officials are in agreement that rates are unlikely to change soon, but differed on how they assessed financial risks. — REUTERS

US FEDERAL RESERVE officials may be in broad agreement that interest rates are unlikely to change soon, but they differed Monday on how concerned they are about developing financial risks in assessing when a rate hike might be appropriate.

Atlanta Federal Reserve Bank President Raphael Bostic said that for him there is a “high bar” for any rate increase until inflation moves convincingly to the Fed’s 2% target, and that evidence of excessive borrowing or financial instability in the economy would have to be “systemic” for him to think otherwise.

“It is going to be a pretty high bar for us to make policy more contractionary,” Mr. Bostic said in remarks to the Rotary Club of Atlanta. “We are going to want to let the economy run and run hot enough to where inflation starts to move and gets us to a place where we are comfortable that level is not a threat to expectations.”

Expectations among businesses and households that inflation will fall is considered a precursor to weak prices and slow growth of the sort that has beset Japan.

After roughly eight years in which the pace of price increases has been below the central bank’s 2% target, Fed officials say they take seriously the risk that they could lose public confidence.

However Boston Federal Reserve Bank President Eric Rosengren argued Monday that the central bank needs to stay on guard both to an inflation surprise and to the possibility that continued cheap borrowing costs could overinflate asset values, particularly in real estate, and set the stage for a collapse.

Mr. Rosengren last year dissented against the Fed’s three rate cuts. He noted Monday that even if inflation seems currently weak, the Fed has little experience analyzing the economy when unemployment and interest rates are both abnormally low.

“Central bankers do not have much historical experience with extended periods where interest rates are running below the estimated equilibrium level while unemployment rates are, simultaneously, historically low,” Rosengren said in a speech in Hartford, Connecticut. “So we want to be alert to any potential risks emerging.”

Neither Mr. Rosengren nor Mr. Bostic have a vote on monetary policy this year.

ASSESSING FINANCIAL RISK
Deciding how to analyze financial risks and how much weight to put on them will be a key point of debate in coming months at the central bank.

At a recent economics conference, former Fed Chair Janet Yellen called for the Fed to develop alternate tools to address financial stability concerns so that interest rate decisions could be based on the behavior of unemployment and inflation — the Fed’s two congressionally mandated responsibilities. In the current environment that would likely mean leaving rates low in order to encourage businesses and households to spend, and thus support continued job growth.

After cutting rates three times last year, Fed officials say they are indeed unlikely to raise or lower borrowing costs again unless there is a significant change in the direction of the economy. While that is the consensus view, there are those, like Rosengren, who argue that higher rates might be appropriate to guard against a worse outcome down the road by preventing risky borrowing.

Mr. Bostic said he agrees that is a concern. But in conversation with bankers and investors in his district, he says any trouble spots still seem isolated.

“What I ask every day: Are you seeing concentrations of risk taking? Is there something going on I need to be worried about?” he said. “Almost all say it is, like, one neighborhood in one city but nothing that seems to be bleeding across.” — Reuters

Fast-track your finance career with the CPA Program

Singapore-based Jared Majaba CPA (Aust.) is confident the CPA Australia designation will continue to further his career, and will do the same for many finance practitioners in the Philippines.

Jared Majaba CPA (Aust.) describes himself as always up for a challenge. In 2010, on joining the audit practice of a mid-tier accounting firm in Singapore, it became clear that if he was to climb the career ladder he would need to not only become professionally recognised in the city-state, but internationally.

“My peers had either completed their own international licence or were in the process of doing so while working at the firm,” Jared recalls. “I was very determined to progress my career, and with the recommendation of a CPA Australia member, who was also my mentor partner, and with the full support of my previous firm, I decided to pursue the CPA Program.”

That was in 2012. Jared joined Deloitte in Singapore in 2016, and is currently a Senior Manager with Deloitte Global Tax Center Asia Pte Ltd.

Achieving global recognition

“In my previous firm, having an accreditation recognised in Singapore was a requirement to get into a management position,” he says. “The CPA Australia designation helped me to achieve that requirement, and definitely opened up opportunities for me at Deloitte.”

Having risen to the challenge and completing all six subjects in the CPA Program – achieving a distinction in three – Jared now works with a cross-section of  senior regional and global clients, all of which are leaders in their industries.

“The CPA Program has empowered me to understand clients better, and by using a holistic approach, I am able to deliver solutions that address their needs by creating value,” he says.

Jared credits the CPA Program with enabling him to think like a senior regional and global leader – significantly widening his understanding of key issues and how to look at them on a much larger scale.

“I have grown from being a deliverer and producer to having a business and strategist mindset,” he declares.

Acknowledging that the CPA Australia designation has been pivotal in fast-tracking his own career, Jared believes it can do the same for many Filipino finance practitioners.

Become a CPA Australia member via the MPA

Indeed, although Jared enrolled before CPA Australia’s collaboration with the Professional Regulatory Board of Accountancy (BOA) and Philippine Institute of Certified Public Accountants (PICPA), the Member Pathway Agreement (MPA) between CPA Australia and PICPA has created a new window of opportunity for Filipino CPAs to achieve the CPA Australia designation, with benefits and potential exemptions for BOA licence holders and PICPA members.

“The Philippine economy is one of the major developing economies in Asia,” Jared notes. “To support and sustain growth, it needs people equipped with the right mindset and open to globalisation. Filipino finance professionals should aim to enhance their capabilities to ensure they have the proper skills, mindset, and tools to cope with the change.”

He firmly believes that the CPA Program can open doors and assist Filipino finance practitioners to cope with the challenges of the global marketplace by becoming better decision-makers, strategists and leaders.

Learn new skills online

In this respect, Jared has found CPA Australia’s My Online Learning platform particularly beneficial.

“As a CPA currently in public practice, I need to keep updated on both the technical and innovation aspects of the profession,” he says. “The online learning platform provides access to various courses that can enhance technical, strategic, leadership, and even soft skills.”

In terms of the CPA Program itself and the impact it has had on his career, Jared singles out the subject ‘Global Strategy and Leadership’ as being one of the most interesting and personally rewarding.

“It made me realise the importance of thinking outside the box and taking a wider view.  I have seen the real value of this subject while speaking to clients. I understand their concerns and can assist them to resolve some of the issues they face in the Asia-Pacific or globally.”

With the practical experience he has gained and CPA Australia’s globally recognised designation, Jared sees himself progressing to an even more strategically oriented leadership role.

“The designation allows me to work with multinationals in a complex setting and adapt to the needs of the global environment,” he says. “It opened up opportunities to me in the past and will surely open more doors going forward.”

Find out more about becoming a CPA by visiting our Member Pathway Agreement

How PSEi member stocks performed — January 14, 2020

Here’s a quick glance at how PSEi stocks fared on Tuesday, January 14, 2020.

 

Barangay Ginebra goes for dominant 3-1 lead vs Meralco

By Michael Angelo S. Murillo
Senior Reporter

THE BARANGAY Ginebra San Miguel Kings enter today’s Game Four of their best-of-seven Philippine Basketball Association Governors’ Cup final series with the Meralco Bolts looking to notch a commanding 3-1 lead.

Thrust themselves back into the driver’s seat, 2-1, with a 92-84 win in Game Three on Sunday, the Kings seek to bury the Bolts further and move closer to the title of the season-ending PBA tournament.

Barangay Ginebra broke the game open in the third frame of Game Three, led by guard Stanley Pringle.

And while Meralco showed resilience to get back in the game after, coming to within five points, 87-82, with a minute to play, it still fell short in its comeback bid, and now find itself needing to win in today’s match to keep in step with the Kings.

Import Justin Brownlee led the Kings in the Game Three win with 24 points, nine rebounds and nine assists. Japeth Aguilar had 23 points and seven blocks.

Mr. Pringle finished with 21 points, 17 coming from their telling third-quarter run, while backcourt mate LA Tenorio had 11 markers.

For the Bolts, it was Chris Newsome who top-scored with 24 points to go along with six rebounds, four assists and two blocks.

Import Allen Durham had 23 points, 13 rebounds and seven assists while Bryan Faundo came off the bench to fire off 10 points.

Big man Raymond Almazan finished with two points and two rebounds before leaving the game midway into the opening quarter from an apparent knee injury.

His status for today’s game is still unknown as of this writing.

“I think defensively we did better in this game (Game Three). We got to control what we needed to control. We got our rhythm going, In the first two games we had a hard time in it but in this game we got our rhythm, especially in that third quarter,” said Barangay Ginebra coach Tim Cone of what he think it did for them in the last game.

But the multi-titled coach underscored that they are still up against a formidable opponent in Meralco despite the latter expected to play undermanned sans Mr. Almazan.

“Two days till the next game. And professional players are expected to bounce back. We still expect it to be a ping-pong match. Nothing will come easy,” Mr. Cone said.

For the Bolts, adjustments are the order of business after losing Game Three and possibly playing without Mr. Almazan.

“Because of what happened we will try to adjust as much as we can just in case we play without him (Almazan) and be ready in the next game,” said Meralco coach Norman Black.

Game Four of the PBA Governors’ Cup finals is set for 7 p.m. at the Smart Araneta Coliseum.

Astros fire Hinch, Luhnow following MLB suspensions

LOS ANGELES — Houston Astros owner Jim Crane fired manager A.J. Hinch and general manager Jeff Luhnow on Monday after both received one-year suspensions from Major League Baseball in the sign-stealing scandal.

“Neither one of them started this, but neither one did anything about it,” Crane told reporters. “We need to move forward with a clean slate.”

Commissioner Rob Manfred also fined the team the maximum allowable amount of $5 million and took away the Astros’ first- and second-round draft picks in 2020 and 2021.

“I find that the conduct of the Astros, and its senior baseball operations executives, merits significant discipline,” Manfred said as part of the nine-page ruling. “I base this finding on the fact that the club’s senior baseball operations executives were given express notice in September 2017 that I would hold them accountable for violations of our policies covering sign stealing, and those individuals took no action to ensure that the club’s players and staff complied with those policies during the 2017 postseason and the 2018 regular season.

“The conduct described herein has caused fans, players, executives at other MLB clubs, and members of the media to raise questions about the integrity of games in which the Astros participated. And while it is impossible to determine whether the conduct actually impacted the results on the field, the perception of some that it did causes significant harm to the game.”

In November, reports first surfaced in The Athletic that the Astros had stolen signs using a center field camera during the 2017 regular season. Former Houston pitcher Mike Fiers was the whistleblower.

Former Astros bench coach Alex Cora was identified as the mastermind of the scheme. Cora, now the manager of the Boston Red Sox, was not disciplined, but the report indicates he could still face penalties when MLB concludes its investigation into allegations of sign-stealing by the Red Sox in 2018.

Hinch’s suspension is the longest for an MLB manager since Pete Rose accepted a lifetime ban in 1989.

“I appreciate Commissioner Manfred’s unwavering commitment to upholding the best interests of baseball,” Hinch said in a statement. “I regret being connected to these events, am disappointed in our club’s actions within this timeline, and I accept the Commissioner’s decision. As a leader and Major League Manager, it is my responsibility to lead players and staff with integrity that represents the game in the best possible way.

“While the evidence consistently showed I didn’t endorse or participate in the sign-stealing practices, I failed to stop them and I am deeply sorry.”

The commissioner’s report revealed no evidence that Mr. Crane was aware of the sign-stealing.

“Crane is extraordinarily troubled and upset by the conduct of members of his organization, fully supported my investigation and provided unfettered access to any and all information requested,” Manfred said.

Luhnow released a statement Monday saying that he accepted responsibility for the rules violations on his watch and issued an apology to the organization and its fans, although he denied knowing rules were being broken at the time.

“I am not a cheater,” Luhnow said. “Anybody who has worked closely with me during my 32-year career inside and outside baseball can attest to my integrity. …

“I did not personally direct, oversee or engage in any misconduct. The sign-stealing initiative was not planned or directed by baseball management. … I am deeply upset that I wasn’t informed of any misconduct because I would have stopped it.”

On Monday, Crane said he would oversee Houston’s baseball operations department for now.

In addition, former Astros assistant GM Brandon Taubman was suspended for one year for making insensitive and offensive comments to a group of female reporters during the 2019 American League Championship Series.

The MLB suspensions of Hinch, Luhnow and Taubman are effective immediately and end on the day following the completion of the 2020 World Series. — Reuters

Ceres advances to next round of AFC Champions League prelims

By Michael Angelo S. Murillo
Senior Reporter

CERES-NEGROS FC advanced to the next round of the preliminaries of the AFC Champions League 2020 after holding on and defeating visiting Shan United FC of Myanmar, 3-2, in a round 1 match on Tuesday night at the Rizal Memorial Stadium.

An early goal by forward Robert Lopez Mendy got the “Busmen” going as they set the pace for much the contest.

The win pushed the three-time Philippines Football League champions to a showdown in preliminary round 2 of the continental club tournament with Port FC of Thailand in an away match on Jan. 21.

Mr. Lopez Mendy broke through for Ceres in the fifth minute, converting a cross from teammate Pika Minigeshi to make it 1-nil for the home team.

Ceres continued to put the pressure on Shan United’s defense after, with Bienvenido Maranon and Mike Ott having near ones in the 24th and 31st minute, respectively.

The Busmen eventually doubled up on their opponents in the 41st minute when Mr. Maranon found the bottom of the net off a pass from OJ Porteria.

The count remained at 2-0 at halftime.

Ceres picked up where it left off in the opening half, getting four chances at a goal in the first four minutes of the reboot which unfortunately it could not complete.

In the 56th minute, Mr. Maranon had an opportunity to make it two goals for himself but his attempt hit the upper post of the net.

Shan United took jabs at a goal in the next six minutes but Ceres’ defense proved to be up to them.

But the resilience of the visitors paid off in the 73rd minute when Zin Min Tun scored to narrow the gap, 2-1.

Mr. Lopez Mendy and the rest of the Busmen tried to steady the ship after.

They would create further distance anew in the 79th minute as Mr. Porteria connected to make it a 3-1 lead for them.

Shan United scrambled to get some real estate back and got a goal in the 87th minute care of Djawa M. to close in anew, 3-2.

It continued its charge back all the way to the four-minute added time.

But Ceres would dig deep and stand its ground to hang on and preserve the win.

Gov’t adopts more ambitious poverty reduction target rate

THE government has officially adopted a new target poverty rate of 11% by the time it steps down in 2022, from 14% previously, the National Economic and Development Authority (NEDA) said, after the more ambitious target was cleared by economic managers.

The adjustment “was approved in the previous meeting of the Development Budget Coordination Committee (DBCC),” it said in a statement released yesterday.

The DBCC had its 177th meeting on Dec. 11, during which it slashed economic growth projections and revised some macroeconomic assumptions.

The Philippine Statistics Authority reported that poverty incidence dropped to 16.6% in 2018 from the revised 23.3% in 2015, the equivalent of 5.9 million Filipinos lifted out of poverty.

This translated to an average of a 2.23 percentage point drop yearly up to 2018, “making the previous target achievable by mid-2022,” NEDA said.

According to Socioeconomic Planning Secretary Ernesto M. Pernia, the new target, if realized, will be “the first time in history that the poverty rate will be halved in just six years, a significant contribution and achievement of this administration.”

Mr. Pernia has said that the economic managers will review and adjust the poverty reduction target, which could eventually range between 10% and 12%.

“Inclusive, job-generating growth and better-targeted programs helped increase the incomes of the poor. For those in the bottom 30% of the population, mean per capita income increased by 31.9%, outpacing the income growth of those in the top 20% of households,” Mr. Pernia was quoted as saying.

“The government must continue to generate more quality jobs, increase the income of the poor, reduce the vulnerability of the poor through social programs and financial literacy, and the intensified implementation of the National Program on Population and Family Planning (NPPFP),” he added. — Beatrice M. Laforga

Infrastructure financing seen complicated by water dispute

GLOBALSOURCE Partners said rising regulatory risk in government contracting may soon affect public-private partnership (PPP) deals for infrastructure projects, as the President continues to insist on modifying water contracts for Metro Manila while declaring his intent not to support a major broadcaster’s franchise renewal.

“The continuing rants cannot but put these business groups in a somber mood, especially given the President’s strong one-sided demands,” according to a report by the emerging-markets consulting firm sent via e-mail over the weekend by Romeo L. Bernardo, country analyst for the Philippines.

He was referring to President Rodrigo R. Duterte’s unilateral decision to renegotiate the water contracts with Manila Water Co., Inc. and Maynilad Water Services, Inc. after finding allegedly “onerous” provisions in their contracts. He has also threatened to block the franchise renewal of ABS-CBN Corp., which expires around March, after it declined to broadcast some of his campaign ads during the 2016 elections.

Mr. Bernardo said investors and creditors will continue to monitor the regulatory environment and noted the need to be “more watchful of political and regulatory risks in long-term infrastructure projects.”

He said the uncertainty surrounding contracts could cause loan rates to rise and parent firms under pressure to provide more robust guarantees on project loans, which will not be favorable for PPP projects and the government’s efforts to develop infrastructure.

“Higher risk assessments that lead to larger risk premia on lending and/or stronger parent firm guarantees to secure credits would spell bad news for PPP projects and government efforts to build up the country’s infrastructure, something that would extend well beyond the term of this administration,” Mr. Bernardo said in the report.

Fitch Solutions Macro Research reported last month that the government’s move to revise its concession deals with the two water distributors pointed to “high regulatory risk” for private firms contracting with the government.

However, it said investor confidence may recover over the long term as the country continues to improve its PPP frameworks.

Meanwhile, GlobalSource Partners’s Mr. Bernardo noted that the concessionaires may not be able to accept all the “10 or so” revisions to the allegedly onerous provisions drafted by the government without the water companies “facing problems financing future investments.”

“Hence, we cannot totally rule out the dreaded wild card, i.e., nationalization of water distribution services.”

Mr. Duterte last week said that the government had completed drafting new contracts for the two water firms.

However, the President also issued a threat to nationalize the country’s water system and charge those who negotiated the water deals on behalf of the companies and the government with plunder or fraud.

In its revised list of 100 infrastructure projects, the government included more PPP-funded projects. From an initial list of nine PPPs out of 75 projects, the current list now consists of 26 PPPs out of 100.

Of the total flagship project value of P4.2 trillion, projects to be funded through PPP will cost around P1.77 trillion.

OTHER RISKS
Meanwhile, the report also flagged the uncertainty generated by the pending corporate income tax bill and unstable global oil prices, which are posing downside risk for the Philippines’ growth outlook this year.

Mr. Bernardo said that despite the Finance department’s wish to pass the bill by the first quarter to protect investment sentiment, he warned that further delays to the bill’s approval may dampen investment.

“We continue to think that Congress needs to move faster on this measure as the reform window narrows. Too, further delays risk more losses in investments, especially in footloose export sectors, e.g., semiconductors and BPOs (Business Process Outsourcing),” he said.

Currently, the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) is still pending with the 18th Congress.

The bill aims to gradually lower corporate income tax to 20% from the current 30% and rationalize tax perks by making them more time-bound and performance-based.

Overseas, Mr. Bernardo said unstable global oil prices due to the US and Iran tensions may also affect fuel prices, as will the implementation of the another set of increases on petroleum product excise taxes due to the The Tax Reform for Acceleration and Inclusion (TRAIN) Act.

The third tranche of excise tax increases on petroleum products under TRAIN took effect on Jan. 1.

Higher global oil prices, however, have not affected inflation so far, he said.

“So far, increases in world oil prices do not pose a threat to our inflation forecast, especially with corrections of late. However, with heightened geopolitical risks, we expect the BSP (Bangko Sentral ng Pilipinas) to be more watchful of price pressures from this source and may take a more cautious approach to planned monetary easing.”

Nonetheless, he said with the P4.1-trillion budget signed within the first month of the year, the firm expects government spending to rebound especially in the first half and recover from last year’s “poor performance” that was dragged down by the delayed passage of the 2019 budget.

“We expect to see much higher growth in government spending especially in the first semester of the year considering last year’s poor performance.” — Beatrice M. Laforga

Port expected to make Palawan a major cruise destination — DPWH

THE Department of Public Works and Highways (DPWH) expects Palawan to become a major cruise destination with the construction of a P1.5-billion cruise port, whose third and fourth phases are targeted for completion this year.

In a statement Tuesday, the DPWH said: “The Puerto Princesa City Cruise Port Facility Project, whose phases 3 and 4 are on-going, is soon (to) put the scenic Province of Palawan in the list of popular international cruise destinations.”

The P1.5-billion project is being implemented by the DPWH’s Region IV-B office.

The project has seven phases, which include the “construction of 500-meter wharf, docking facility, passenger terminal and access road,” the DPWH added.

DPWH Region IV-B Director Wilfredo S. Mallari said that once completed, the facility can accommodate “up to 10,000 passengers.”

The DPWH noted that Puerto Princesa City is home to a UNESCO World Heritage Site, the Subterranean River National Park, also known as the Underground River.

It said the city also serves as a gateway to other tourist destinations like El Nido, San Vicente, and Taytay.

The Department of Transportation (DoTr) said last week that it will formally inaugurate this month the newly-developed Salomague Cruise Port in Cabugao, Ilocos Sur.

The cruise port, which is already in use, serves as an alternate cruise port for Region I as it is located near attractions and beaches in the Ilocos provinces.

Bloomberry Cruise Terminals, Inc. (BCTI), in collaboration with the Philippine Ports Authority (PPA), facilitated the completion of the Salomague cruise port’s terminal facilities.

According to the 2019 Annual Report of the DoTr, the administration has completed a total of 317 commercial and social or tourism port projects.

“The improvement of the nation’s ports (will) boost connectivity and mobility, as well as spur regional growth in trade and tourism,” the DoTr said.

Among the projects completed last year are Davao del Sur’s Malalag Port, General Santos City’s Makar Port, Davao City’s Sasa Port, Bohol’s Tubigon Port, Southern Leyte’s Limasawa Port, and Misamis Oriental’s Opol Port. — Arjay L. Balinbin

Consumption-led boom seen continuing into 2020 — FMIC

CONSUMPTION will remain the economy’s main prop amid global headwinds and calamities, with investment remaining clouded due to uncertainty surrounding corporate tax reform and regulated industries like water, participants at a First Metro Investment Corp. (FMIC) briefing said.

At FMIC’s Economic and Capital Markets Briefing, the firm’s chairman Francisco M. Sebastian said: “What held us together last year is consumption,” adding that the next few years could be the “great decade of Filipino consumers” due to lower unemployment, underemployment and poverty rates.

The Philippine Statistics Authority (PSA) said the poverty incidence among families dropped to 16.1% in the first half of 2018 from 22.2% three years earlier, bringing it closer to a poverty rate of about 14% targeted by the government when its term expires in 2022. This target was recently adjusted to 11%.

Unemployment and underemployment rates are also at record lows of 4.5% and 13%, respectively.

FMIC, the investment banking unit of the Metro Bank Group, estimates gross domestic product (GDP) growth of 6.2-6.6% in 2020, supported by the government’s plan to bring infrastructure spending to the equivalent of 5.7% of GDP, as well as robust consumption.

This forecast estimate compares to the 5.6% average growth in the first three quarters of 2019 and the 6.2% seen for the full year 2018. The forecast also fits well within the 6.5-7.5% target growth of the government until 2022.

“We have seen the acceleration in the national government spending expanding in the third quarter and we are also seeing actual bigger-ticket items are going full steam ahead,” University of Asia and the Pacific professor Victor A. Abola said.

Mr. Abola said he expects price movements in major commodities in 2020 “to remain very close” to the 2.5% average inflation level seen in 2019. FMIC has a forecast range of 2.5-2.8% for this year, also well within the central bank’s forecast range of 2-4%.

“(Bangko Sentral ng Pilipinas) Governor (Benjamin E.) Diokno spoke of the Goldilocks economy, which is an economy that is growing without inflation,” he said.

Mr. Abola said foreign direct investment (FDI) likely declined in 2019 based on data available as of October.

Preliminary BSP (Bangko Sentral ng Pilipinas) data show that FDI net inflows fell 32.8% to $5.79 billion during the 10 months to October.

He said FDI was pressured by uncertainty due to the lack of finality surrounding a major tax reform bill, known as CITIRA (Corporate Income Tax Incentives Rationalization Act).

“It’s a pity because we are seeing a lot of FDIs moving from China towards Vietnam and Indonesia,” he said, noting that Vietnam’s nine-month total edged up to $25 billion.

Asked about the government’s contract dispute with its water service providers and its possible impact on FDI, Mr. Sebastian said: “I think the questions surrounding the concessions will get more people more thoughtful on how contracts will be written in the future…”

“We think that over the long run, these public-private partnerships are very attractive. I think in the end, we’re optimistic that a solution will be found,” he added.

In November, the BSP downgraded its FDI target for 2019 to $6.8 billion from the initial $9 billion target released in May.

Mr. Abola said the ongoing activity at Taal Volcano is unlikely to result in a major hit to the economy.

“I compare it to the typhoons that hit us. And the fortunate thing here is that it’s very localized, compared to typhoons which cover many provinces,” he said.

Mr. Abola added he is positive that the tensions between the US and Iran will not escalate, containing the risk from higher oil prices.

“(There was an initial) knee-jerk reaction in the markets after the killing of the (Iranian) general. Of course it creates tension in the area but there are many willing producers like for example Russia,” he said, noting that a worst-case scenario of $90 per barrel of crude is unlikely.

Mr. Abola said that an upgrade to the sovereign credit rating may only happen once growth is sustained at 7%.

“For us to think of this… within a couple of years, I think maybe our energies should (go into) addressing real issues that could accelerate our growth beyond the 7%,” he told reporters on the sidelines of the briefing.

In May S&P Global Ratings raised the country’s long-term sovereign credit rating to “BBB+” from “BBB,” bringing it one notch away from an “A”-level rating.

The government is targeting another credit rating upgrade to offset the loss of access to concessional financing rates as the Philippines is reclassified as an upper middle-income country sometime this year. — Luz Wendy T. Noble

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