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NGOs call for more aggressive moves to adopt renewable energy

CONSUMER groups said the Department of Energy’s (DoE) plans for renewable energy (RE) need to be reviewed to ensure consistency with the objective of providing competitive rates, adding that the DoE must move more decisively to wean the country away from coal power.

Laban Konsyumer Inc. (LKI) said over the weekend that it was “cautious” on plans by the Energy department to set a “green” rate for renewable energy players.

LKI President Victorio Mario A. Dimagiba was referring to the DoE’s plan to set a ceiling price for new renewable energy firms to attract investors and promote competition in the sub-sector.

“[W]e must focus on what the rate impact will be. DoE should show that there is no subsidy for RE under their proposal. Hopefully this is not an innovation of the Feed-in-Tariff and FIT Allowance power rate scheme, which the consumer group had consistently opposed,” he said in a statement.

Mr. Dimagiba said the DoE should conduct a public consultation on its proposal, adding that the agency already has rules calling for a competitive selection process (CSP).

“There is already CSP, and that is why CSP is put in place. CSP is there to ensure lower rates so now we are questioning the objective of the green rate,” he said.

Separately, Murang Kuryente, which advocates for cleaner and cheaper power sources, said the DoE’s stance on renewable energy does not go far enough in steering the power mix away from coal.

In a statement during the weekend, it noted that although DoE was “encouraged” by President Rodrigo R. Duterte’s favoring renewable energy over coal-fired power plants, “energy security also requires diversification beyond RE.”

In a belated reaction to the President’s State of the Nation Address, the DoE said on Thursday that power plants fueled by liquefied natural gas (LNG) and coal are needed in the transition towards more RE.

“So long as coal remains a fixture in the country’s energy mix, consumers will continue to be gouged by electric companies and hit further with climate change and health issues. There is no transition needed, except to bring RE power plants online and deactivating coal power plants. To do anything otherwise is to deceive both consumers and the President,” said Gerard C. Arances, Murang Kuryente spokesperson.

He said his group was “very wary” of the transition period because the power plants in the pipeline “all slated to operate at least 20 years into the future.”

He questioned why it was difficult for Energy Secretary Alfonso G. Cusi to obey the President, who gave the “marching orders.”

“Secretary Cusi, in creating space for coal, is being insubordinate, at the cost of money and health to the Filipino energy consumer,” Mr. Arances said. — Victor V. Saulon

Isuzu announces landmark PUV-X program

By Manny N. de los Reyes

ISUZU Philippines Corp. (IPC) unveiled its PUV-X program that provides the optimum “Isuzu Advantage” for its public utility vehicle (PUV) stakeholders and users at the recently concluded Philippine Bus & Truck 2019 Expo held over the weekend at the SMX Convention Center, Mall of Asia Complex in Pasay City.

IPC discussed the PUV-X program in detail during the Truckers Forum on July 25 and 26.

IPC’s presentation was a key portion during the 4th Transport Cooperative National Congress, an annual event spearheaded by the National Federation of Transport Cooperatives (NFTC-BKKPPI). Held within the Philippines Bus & Trucks 2019, the Congress gathers inputs from the transportation cooperatives sector to help formulate the needed programs, projects and activities to further update and develop these sectors.

The PUV-X Program enumerates Isuzu’s 10-Point Advantage: 1) Isuzu’s renowned reliability, durability and efficiency; 2) experienced body builders; 3) accredited accessories suppliers; 4) an unmatched 3 years or 150,000-km warranty; 5) nationwide dealership network of 43 outlets and counting; 6) Expert Truck Executives (Truck Elites) to help customers; 7) nationwide parts availability, competent and trained service technicians, technical assistance from Japanese and Filipino engineers, and Isuzu Service Medic vans for roadside assistance anytime; 8) driver and mechanic trainings; 9) extensive fleet management system; and 10) all-around customer assistance.

To aid in the discussion, NLR77 Class 2 PUV and NLR85 ref van were displayed at IPC’s booth. Test drives of the Isuzu PUVs used by the Senate Employees Transport Service Cooperative (SETSCO) were offered during the two days. The SETSCO shuttle also provided free rides to event participants within the Mall of Asia complex.

The annual PhilBus & Truck Show is recognized by the industry as the leading international bus, truck and commercial vehicle exhibition, a business-to-business trade show that prides itself in delivering top-quality trade buyers and decision makers.

By working closely with key trade associations, the expo brings together bus, trucks and commercial vehicle operators, mining and construction companies, leasing and logistics companies, manufacturers, trading, parts and service and repair workshops to see and get updated on the latest range of buses, trucks and commercial vehicles.

French region suspends harvest amid heat wave

PARIS — Farmers have been ordered to stop harvesting in France’s second largest grain producing department Oise after hundreds of hectares of fields caught fire during an intense heat wave.

At least one farmer was killed during when his harvester became engulfed in one inferno, local media reported. Harvesting is in full swing in France, the European Union’s largest grain producer and exporter, where searing temperatures this week broke records in many parts of northern France and elsewhere in western Europe.

Local authorities put an indefinite suspension on threshing in the whole of the Oise department on Thursday, citing the risk of fires and risk to the local population.

Oise is the fifth largest producing department of soft wheat in France, the main grain currently being harvested, farm ministry data showed.

It was the first time ever the authorities have ordered a halt to the harvest in Oise, FNSEA, France’s largest farm union, said.

More than 500 hectares of land caught fire on Tuesday alone in the department, a record, local fire authorities said on Twitter. Several firemen were hurt while trying to put out the fires.

Oise was one of 20 administrative departments this week placed under ‘red alert’ — the highest warning level — in northern France by state forecaster Meteo France. By Friday this had been downgraded to ‘yellow,’ the third highest level of alert. — Reuters

The edgy jet-setter

DARK and bold colors of rock ‘n’ roll are in season once again with the launch of Longchamp’s winter/fall 2019 collection.

For Longchamp creative director Sophie Delafontaine’s second show at New York Fashion Week in February, she focused on the traveler’s free-spirited energy with the La Voyageuse line.

In conjunction with the brand’s 70th year, Ms. Delafontaine also introduced “LGP,” the new signature logo which is inspired by 1920s Bauhaus artists and New York’s maze-like grid plan. The new logo is embroidered on several leather pieces such as coats, skirts, dresses, and bags.

Ms. Delafontaine combines the Parisian bohemian style of wavy silk dresses and embroidered tulle or wool gauze pleated skirts with the New Yorker’s urban aesthetic with geometric patterns and animal prints. Such outfits are paired with edgy red, black, and terracotta crossbody and tote bags that are made in patent, leather, velvet, and jacquard.

“The idea was to take the Parisian attitude and silhouettes and mix it with the New York sensibility, which is more urban and graphic,“ Ms. Delafontaine said in an interview with fashion trade journal WWD.

The prices of bags in the La Voyageuse collection range from P32,500 to P128,000. They are exclusively available at Rustan’s Makati, Rustan’s Shangri-La, Rustan’s Cebu and Greenbelt 5. — MAPS

MG named as official global car partner of Liverpool FC

WHAT BEGAN in 2016 as a regional deal has now evolved into an international alliance, as MG and top-flight English football club Liverpool FC have taken their partnership to the global level. This collaboration is expected to deliver mutual brand growth and awareness for both esteemed parties in several key regions around the world.

“Just like the well-known saying goes: ‘one tree does not make a forest’,” says Michael Yang, managing director of SAIC Motor International Business. “We’re always looking for more people and partners to come together to create great things. The joint cooperation between MG and Liverpool FC will surely do this as we create more great moments together and bring more special experiences to fans around the world.”

Currently, MG branding is featured on the LED screens of Anfield Stadium, Liverpool FC’s home pitch, while other perks include first team player access, signed merchandise, and exposure on the football club’s thriving digital platforms. MG has also created limited-edition Liverpool-branded vehicles, launched a TV commercial, and has invited Liverpool FC legends to attend the Shanghai International Motor Show on behalf of the brand. In addition, the partnership looks to launch engaging, fan-centric campaigns in the future, so it’s best to stay tuned for these. Such promotions may include trips to the UK to watch a Liverpool FC match live at Anfield Stadium, and the chance to be part of exclusive player meet-and-greet/autograph signing sessions.

Billy Hogan, managing director and chief commercial officer of Liverpool FC, says: “MG, an iconic car brand with a rich sporting heritage, has been a valued partner of the club for several years and we’re incredibly pleased to not only be renewing this relationship, but also be expanding it on a global scale. As partners, we have brought some incredible opportunities to our fans and chances for them to get closer to the action. I’m looking forward to seeing what else we can achieve now that our focus becomes global.”

Locally, MG Philippines also dabbles in sports partnerships, inking deals with popular college leagues such as the UAAP and NCAA for basketball and volleyball — arguably the two most popular sports in the country today. Clearly, MG recognizes sports as an effective means to strengthen its youthful, passionate brand image. With its numerous international and regional sports partnerships, MG is primed to score big.

Visit www.mgmotor.com.ph for more information about MG Philippines products and services, and follow MG Philippines on social media: OfficialMGPhilippines (Facebook), @mg_philippines (Instagram and Twitter). You may also call the 24/7 MG Philippines hotline at (02) 328-4664 for more inquiries.

Stocks may climb ahead of Fed policy meeting

LOCAL SHARES may rise in the week ahead as investors await the results of the US Federal Reserve’s policy meeting and amid caution on the onset of the so-called ghost month.

The Philippine Stock Exchange index (PSEi) plunged 1.06% or 88.19 points to close at 8,183.99 on Friday, ending the week with a 86-point decline or 1.04%. The mining and oil and industrial counters pulled down the market, falling 3% and 2%, respectively.

Turnover for the week slowed by nine percent to P6.67 billion on average, on the back of average net outflows worth P3.6 million.

“With the index managing to hold up above its 20-day moving average support at 8,170, possibility for it to go back to its highs at 8,400 still remains alive. Catalyst to watch for [this] week should be the Fed’s meeting where they’re expected to cut by 25 basis points,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail.

The US Federal Open Market Committee is set to meet on July 30-31, with consensus pointing to a 25-basis-point reduction. Officials are seen to consider low inflation and low unemployment rate in coming up with their policy decision.

This will coincide with the meeting between US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer with China’s Vice Premier Liu He, scheduled to start on June 30.

“(T)hat could either support hope or bring about frustration. While positive outcomes are favored, it would be prudent to ride on sentiment swings, given uncertainties on its outcome,” online brokerage 2TradeAsia.com said in a weekly market note.

Apart from these geopolitical issues, investors will look at the earnings reports of index-member firms. BDO Unibank, Inc., Manila Electric Co., Aboitiz Equity Ventures, Inc., Aboitiz Power Corp., Metro Pacific Investments Corp. and Ayala Corp. — or about 23.2% of the PSEi basket — will disclose their earnings for the first half of the year this week.

2TradeAsia.com also pointed out that this week will see the start of the Chinese ghost month, where Chinese investors historically hold off on trading. At the same time, this period is typically when most global fund managers from the US and Europe also take their annual vacation.

“For now, some might be prompted to go on hiatus mode, with the onset of the Lunar calendar’s Ghost Festival (Aug. 1-29). This window presents ripe opportunities to position gradually, timed with an expected pick-up in economic activity in the fourth quarter,” the online brokerage said.

2TradeAsia.com placed the market’s immediate support from 8,070 to 8,100, with resistance at 8,300 to 8,350.

On Wall Street, robust earnings from Alphabet and Starbucks pushed the S&P 500 and Nasdaq indexes to record highs on Friday, with support from data showing US economic growth slowed less than expected in the second quarter. — Arra B. Francia with Reuters

CBTL deal, veto of security of tenure bill drive Jollibee’s stock price

By Christine Joyce S. Casteñeda
Senior Researcher

THE acquisition of California-based The Coffee Bean & Tea Leaf (CBTL) drove Jollibee Foods Corp.’s stock price down to near 52-week lows, with the stock slightly rebounding on Friday following the presidential veto on the bill that looks to impose tighter controls on labor contracting.

A total of P5.707-billion worth of 22.9 million Jollibee shares exchanged hands from July 22 to July 26, making the stock the most active on the trading floor last week, data from the Philippine Stock Exchange (PSE) showed.

Jollibee’s stock price closed at P252 per share on Friday, down 9.9% from its P279.8 finish on July 19. Year-to-date, it is down 14%.

Analysts interviewed by BusinessWorld attributed the stock’s movement mostly to Jollibee’s acquisition of CBTL.

“This posed risks to [Jollibee’s] operating income as CBTL has been a losing company in the past years attributed to high operating costs. In our view, the acquisition would be earnings dilutive in the next three years given the competitive nature of the coffee industry,” said Unicapital Securities, Inc. Research Head Wendy Estacio in an e-mail.

Timson Securities, Inc. equity trader Jervin S. de Celis said investors are worried as CBTL has incurred losses amounting to $26.8 million and $21.1 million in 2017 and 2018, respectively.

“The loss in 2018 is equivalent to 12% of Jollibee’s profits,” he said in a separate e-mail interview. “Since Jollibee is also one of the most expensive consumer stocks in the PSE, CBTL’s drag to [Jollibee’s] profits may not be able to justify its pricey valuations.”

In a disclosure to the stock exchange on Wednesday, the homegrown food giant announced it will acquire CBTL for a total of $350 million. The coffee chain will add 14% to its global system wide sales and 26% to its total store network.

According to Bloomberg data, this marks Jollibee’s largest acquisition to date following the company’s $210.25-million takeover of American fast-food chain Smashburger.

News of the acquisition sent Jollibee’s stock price tumbling down by 8% to close at P251 per share on Wednesday and another 6% down further to P236 per share on Thursday. Bargain hunters took positions the day after, bringing the stock price up by 6.8% on Friday to P252 per share.

“It is not usual for the blue-chip stocks to decline more than 5% in a day, given that blue-chip stocks are fundamentally strong,” said Philstocks Financial, Inc. research associate Claire T. Alviar in an e-mail.

CBTL is owned by International Coffee & Tea Leaf (ICT) in Los Angeles, California. ICT recorded an attributable loss of $21.05 million in 2018, lower than its attributable loss of $26.77 million posted in 2017, Jollibee’s disclosure to the stock exchange showed.

Philstocks’ Ms. Alviar also noted foreign investors dumped Jollibee shares, with PSE data showing net foreign selling of the stock at P1.118 billion last week, 396% higher than the P225.376 million net selling a week prior.

Aside from the CBTL acquisition, Ms. Alviar said that investors were also keeping a close eye on the status of the security of tenure bill for most of the week, explaining that Jollibee was expected to be among those affected by way of higher labor costs if the bill becomes law.

The analyst said that President Rodrigo R. Duterte’s veto of the proposed law strengthening workers’ right to security of tenure last Friday was a factor in the slight rebound in Jollibee’s stock price.

The proposed law bans the practice of hiring workers for five-month stints in order to circumvent the requirement that they be automatically granted regular status on the sixth month of employment.

Jollibee posted a net income attributable to the parent of P1.535 billion in the first quarter of 2019, down 14.7% from the P1.799 billion in the same period last year.

Philstocks’ Ms. Alviar said the company’s net income may reach P8.2 billion this year, citing the higher system-wide sales growth, slowing inflation, and dilution of earnings in acquiring CBTL.

For Timson Securities’ Mr. de Celis: “Income for 2019 may turn out flat at P8.3 billion or lower than 2018’s figure despite the calmer inflation because the newly consolidated Smashburger reported a loss of P380 million, dragging [Jollibee’s] earnings before interest and taxes by double digits.”

“In the short run, Jollibee’s earnings may be dragged by the underperformance of Smashburger and CBTL , but probably in about [three or more] years’ time, these two companies may go breakeven in profits, which will bolster Jollibee’s revenues and widen its presence in several territories to become a global player in the coffee market,” Mr. de Celis added.

Philstocks’ Ms. Alviar pegged the stock’s support at P230 to P240 while resistance is around P280 to P290.

For Mr. de Celis: “For now, we can set the support area at P231 which was [Thursday’s] low. Resistance is at P260.”

For Unicapital’s Ms. Estacio: “Based on our valuation, it’s good to accumulate near the P230-240 per share range, as the stock is now trading below one standard deviation below its five-year historical average price-to-earnings of 36.1 times.”

IC places Loyola Plans under conservatorship

THE INSURANCE Commission (IC) placed pre-need firm Loyola Plans Consolidated, Inc. under conservatorship for failing to comply with capital, trust fund and reportorial requirements.

In a statement on Sunday, Insurance Commissioner Dennis B. Funa said the pre-need company was placed under conservatorship for its “continuing inability” to meet capital and trust fund requirements of pre-need companies under the Pre-Need Code of the Philippines.

The IC said Loyola Plans has a capital impairment amounting to P126 million and a trust fund deficiency worth P149 million.

“Considering that the company has a negative net worth based on the verification on the 2016 Annual Financial Statements, its paid-up capital was found to be impaired by P126 million. The company’s trust fund, on the other hand, is only P932 million as against its total pre-need reserves (liability) of P1.48 billion,” the IC said.

Pre-need firms are required by law to set up a trust fund out of their premium collections. The fund will be used for future delivery of services as provided in the pre-need contracts, separate from the paid-up capital of the firm.

Loyola Plans is now prohibited from selling new plans. However, the firm should still continue to service its clients and pay existing obligations, the regulator said.

“[A]ll plans issued before the conservatorship order remain valid, and the obligation of the company toward its planholders still exists. This means that the company is still required to pay all existing and matured claims,” Mr. Funa said.

The IC appointed Dionne Marie M. Sanchez as the conservator to manage the distressed company.

The regulator called the attention of Loyola Plans as early as 2018 to cover up capital and trust fund gaps based on their 2016 financial statements.

The pre-need plan has yet to submit their 2017 and 2018 financial statements, despite IC’s show-cause order.

“The submission of Annual Financial Statements is important in determining the current financial condition of a pre-need company. However, these reportorial requirements are yet to be submitted to us,” Mr. Funa said.

Despite Loyola Plans’ submission of their plan to address its capital impairment and trust fund deficiency, Mr. Funa said the IC’s evaluation of their plan has not yet been completed due to the non-submission of updated financial reportorial requirements.

“Without these documents, we cannot verify the sufficiency and adequacy of the company’s action plan to generate cash flow to address its deficiencies,” he said.

Loyola Plans is a pre-need firm offering education, life and pension plans. It was founded by the late Senator Gil J. Puyat, Sr. and later on managed by her daughter Jesusa Puyat-Concepcion.

The pre-need company hit the headlines in April 2016 after its policyholders complained of the company’s inability to pay claims on time. The IC said it had a trust fund deficiency worth P238.3 million.

However, Loyola Plans averted being placed under conservatorship after plugging its trust fund gap through cash and non-cash contributions. — Karl Angelo N. Vidal

CTA rejects P24.6 million Carmen Copper refund claim

THE Court of Tax Appeals (CTA) denied for lack of merit the tax refund claim of Carmen Copper Corp. worth P24.6 million representing its alleged excess input value-added tax (VAT).

The P24.6 million in claimed excess and unutilized input VAT attributable to zero-rated sales is part of the initial P47.2 million claim for the first quarter of 2014 before the Bureau of Internal Revenue (BIR) but only the amount of P22.6 million was recommended for refund by the bureau.

In the 23-page decision dated July 23, the court’s second division said the firm failed to prove that its sales are zero-rated.

“In fine, the pieces of evidence show that the total zero-rated sales reported by petitioner in the Amended 1st Quarterly VAT Return for TY 2014 must be disallowed for VAT refund purposes,” the court ruled.

“There being no valid zero-rated sales pursuant to Section 106(A)(2)(A)(l) of the NIRC of 1997, as amended, the claimed input VAT allegedly attributable thereto cannot be refunded,” it added.

According to the Tax Code, A VAT-registered entity claiming zero-rated export sales must present sales invoices, bills of lading or airway bills as proof of actual shipment, and bank credit advice or any other document proving payment.

However, the court said the examination of an independent certified public accountant of the supporting documents submitted by Carmen Copper led to the disallowance of the claimed zero-rated sales.

It ruled that such claimed sales levels cannot be verified by the supporting VAT sales invoice, while the inward remittances had deductions without supporting documents, while the VAT sales invoice supporting the claim of zero-rated sales had a date and amounts that were unreadable.

It also said some export documents showed that the goods were only shipped domestically with zero-rated sales unsupported by proof of foreign inward remittance.

The decision was written by Associate Justice Cielito N. Mindaro-Grulla and Associate Justice Juanito C. Castañeda, Jr. — Vann Marlo M. Villegas

China duck farmers cash in as African swine fever slashes pork output

JIAXIANG, CHINA — On a 30-hectare (74-acre) plot of land in China’s Shandong province poultry hub, more than half a million white-feathered ducks are busy eating, chattering and laying eggs to produce cheap meat for thousands of factory canteens.

With birds already packed into around 60 open-sided buildings, farm owner Shenghe Group is expanding further, aiming to raise output by 30% this year to capture record profits as a plunge in pig numbers shrinks production of pork, China’s favorite meat.

“The market prospects are very good now because of African swine fever,” said Shenghe Chairman Wang Shuhong, whose firm sells about 300,000 ducklings a day for fattening and slaughter.

The deadly pig disease has already reduced China’s hog herd by more than a quarter, according to official data. As many as half of the country’s breeding sows are thought to have died or been slaughtered to cope with disease outbreaks.

Pork production will fall by 30% or about 16 million tonnes, say analysts at Dutch lender Rabobank, pushing prices to new records and leaving a gaping hole in the country’s protein supply.

CHEAP PROTEIN
Higher pork prices — up about 35% in a year — have already fueled a surge in poultry meat demand. Chicken breast is about 20% more expensive than a year ago, while duck breast has nearly trebled in price to 14,600 yuan (1,707 pounds) a ton, according to Shenghe.

This is still only about half the cost of pork, but such prices are unheard of in China, where breast is typically the cheapest part of the bird.

About 80% of the world’s ducks are raised in China, but are traditionally eaten in the south, where fried duck tongues, braised feet and spicy duck neck are popular snacks, and duck intestines make up a hot pot.

In recent years, however, more ducks have been processed for use by cost-conscious catering firms, supplying large canteens feeding schools, factories, businesses and the military.

These buyers are now switching as much pricey pork as they can to duck.

A procurement manager with a catering firm that supplies about 100 large clients around China said he has replaced about 20%-30% of the pork on menus with either chicken or duck meat. He declined to be identified because of the sensitivity of the issue.

“We may switch even more. But our concern is that the poultry price is now going up as well,” he said.

The price of day-old ducklings, sold by farms like Shenghe, has hovered around 6 yuan, three times the usual level, since July last year.

Prices eased last month as farmers held off restocking during hot summer weather, but are rising again and set to go higher, said Dong Xiaobo, China general manager for French genetics company Orvia, the No. 2 supplier of breeding ducks.

Orvia is sold out six months ahead and has even had calls from pig farmers considering raising ducks after losing their hogs to African swine fever.

“I’ve never seen this in our 10 years in this market,” said Dong.

PIG CRISIS, DUCK OPPORTUNITY
As swine fever continues to spread, China’s vice-premier Hu Chunhua has urged poultry farmers to help fill the protein gap to maintain social and economic stability.

Analysts warn the disease could hit some farms more than once, and ratings agency Fitch forecasts pork output will stay below 2018 levels through 2021.

With output of about 5 million tonnes last year, less than half China’s chicken production, duck meat has plenty of room for growth.

The barrier to entry is lower for ducks than broiler chickens and breeding stock is more available, said Pan Chenjun, senior analyst at Rabobank.

Broiler chicken farmers rely almost entirely on imported breeding stock, which has been restricted by China’s bans on imports from key markets because of bird flu outbreaks. Output may expand less than 5% this year, said Pan.

Any rapid expansion carries risks however. In densely stocked farms, diseases like bird flu, several strains of which are circulating in China, spread easily.

And it remains to be seen whether duck farmers can hold on to a bigger share of the meat market when pork output recovers.

Duck farmers were forced out of the industry in droves between 2012 and 2016 when overproduction killed profits, and most people still want more pork dishes than any other meat, said the catering company manager.

But Shenghe’s Wang, who is planning to expand downstream with a slaughterhouse later this year, is not worried.

“Pork output won’t go up in the next three years and will take at least five years to recover,” he said. — Reuters

PetroEnergy unit planning P1.3B Palawan solar farm

PETROENERGY Resources Corp. is preparing to invest up to P1.3 billion to build a utility-scale solar farm in Palawan that can provide 24-hour power to the island’s electric cooperative with the help of stored energy.

“It’s a project of PetroGreen [Energy Corp.],” Francisco G. Delfin, Jr., PetroEnergy vice-president, said, referring to the subsidiary of the publicly listed company.

“[It has] 10-20 megawatt (MW) of installed capacity — 10-20 MW of solar, then with the option or the likely component of battery storage and diesel,” he added.

Mr. Delfin said the ground-mounted solar photovoltaic energy source already has a term sheet and was just awaiting the decision of the island’s power utility, Palawan Electric Cooperative (Paleco).

“We have secured the land. We already own the land. We have completed the technical feasibility studies. We also have an agreement in principle on the financing option,” he said.

He estimated the investment for the project to be “a little over P1 billion, closer to P1.1 to P1.3 [billion].”

Mr. Delfin said PetroGreen holds the service contract for the solar farm issued by the Energy department as early as 2017.

“We have already secured many of the necessary government permits,” he said, enumerating these to include the endorsements from local government units and environment compliance certificates.

“The only thing holding us back from proceeding is the off-take,” he said, referring to the buyer of the energy produced by the solar farm. He said Palawan only has one buyer — Paleco.

“I’m sure you are aware of the problems that Paleco has encountered. I’m sure we’re not the only one looking at the area,” he said.

In December, state-run National Electrification Administration intervened in the management and operation of Paleco to help resolve the power supply woes in the province.

In January, the Department of Energy (DoE) stepped in by requiring the utility to submit an updated power distribution development plan to determine whether the government should continue looking after the provision of electricity in the area.

President Rodrigo R. Duterte last year issued a warning to local officials to solve the energy issues in the island. He gave Paleco until the end of 2018 to address the frequent brownouts or he would install a new electricity provider for Palawan.

“The other track that we are looking at is off-grid solar,” Mr. Delfin said.

He said the group wants clarity the rules governing off-grid solar farms before it goes ahead with a pilot project in the central Philippines.

“We are in the early stages of a pilot study to determine the best markets and the best products for off-grid rooftop solar,” he said, adding that the project will be under PetroGreen.

“We want the rules to be clarified first because there are so many draft rules by the DoE, by the ERC (Energy Regulatory Commission),” he added. — Victor V. Saulon

How PSEi member stocks performed — July 26, 2019

Here’s a quick glance at how PSEi stocks fared on Thursday, July 25, 2019.