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Singapore digital bank hopefuls must prove they can profit

GRAB HOLDINGS, Inc. and gaming company Razer, Inc. will need to demonstrate how their millions of users can help them generate profits if the two technology firms are to win one of Singapore’s coveted virtual banking licenses.

That’s because the Monetary Authority of Singapore (MAS) is putting more emphasis on profitability and strong capital requirements than some other regulators inviting fintech firms into banking. Both Grab and Razer have expressed interest in submitting separate bids for one of the five digital banking licenses on offer, part of a government strategy announced earlier this year to strengthen competition in financial services.

“The Singapore requirements on digital banks will mean that profitability will have to be a key consideration” for potential applicants, said Zennon Kapron, managing director of Singapore-based consulting firm Kapronasia. In order to succeed “they will need to achieve scale very quickly,” he added.

That’s a particular challenge for Grab and Razer, two of the highest profile technology firms interested in the licenses. Razer and Grab’s Singapore ride-hailing unit have consistently reported losses in recent years.

In its guidelines, the MAS said financial projections that show a consistent or increasing trend in net losses won’t meet its requirement of demonstrating “a path to profitability.” It said it may consider favorably any applicant whose financial projections show an earlier break-even year.

The UK requires new banks to present a plan setting out their business viability and how they will make money. But digital banks in the UK have been more focused on acquiring customers than generating profits, Kapron said. London-based Monzo Bank, for example, reported a net loss of 47.1 million pounds ($62.6 million) for the 12 months to end February, four years after it was founded, compared with losses of 30.5 million pounds previously.

Singapore will be looking at the profitability of the core businesses as well as of the new banking operations, said Varun Mittal, an associate partner with the consultancy firm EY in Singapore.

Though Grab doesn’t release financial statements for its Cayman Islands-based holding company, accumulated losses of its Singapore ride-hailing unit GrabTaxi Pte reached S$228.9 million ($169 million) in 2018, according to the latest filings to Singapore’s Accounting and Corporate Regulatory Authority. Hong Kong-listed Razer reported accumulated losses of $225.3 million as of June 30.

The MAS is also stricter than some other regulators in its capital requirements, which could pose another challenge for the business models of tech firms trying to get into digital banking. The MAS plans to award two full bank licenses and three wholesale licenses limited to serving corporate clients only — the first category requires capital of S$1.5 billion, the second S$100 million.

Hong Kong has set HK$300 million ($38.5 million) as the minimum for virtual banks. In the UK, it can be as low as 1 million pounds.

PROFITABILITY PATH
“The profitability path can be difficult, especially when that comes on top of the MAS’s very stringent regulatory capital requirements,” said Andrea Choong, a banking analyst at CIMB Securities Pte in Singapore. The new digital banks will also face margin pressures from the need to attract customers by offering more attractive deposit and lending rates than the incumbent banks, she added.

Though it’s unclear which type of licenses Grab and Razer are seeking, any applications could be helped by cementing partnerships with other larger firms with a track record of profits, Mittal said.

Grab has been discussing the formation of a consortium with Singapore Telecommunications Ltd. and insurance firm Great Eastern Holdings Ltd., Bloomberg reported last month. Another consortium under discussion involves local tycoon Ron Sim’s V3 Group Ltd., stored-value card maker EZ-Link Pte and property giant Far East Organization Pte, according to a separate Bloomberg report.

Grab’s other advantage is the share of payments transactions it has built up under its GrabPay brand from ride-sharing users and local merchants, according to Valerie Law, an analyst who publishes on the Smartkarma platform. GrabPay and other financial operations are likely to be folded into the digital bank if the company gets a license, she said.

“Our super app platform has put us on a path to sustainability,” Grab said in response to questions from Bloomberg, referring to the company’s strategy of providing a plethora of different services under one app. Grab can use its so-called super app to offer different services to each customer, the company added.

Grab doesn’t disclose the number of its users but said its app has been downloaded onto more than 166 million mobile devices. Razer Pay’s e-wallet had 1 million registered users in Malaysia as of June 30; it started testing in Singapore earlier this year, according to the company’s interim report.

A representative for Razer said the firm is still exploring a virtual bank license application, but declined to comment further.

SINGAPORE CONNECTION
Any partnerships with strong local firms like Singtel might also help Grab or Razer meet MAS criteria for full digital bank licenses. The MAS has said it will only consider applicants “who are anchored in Singapore, controlled by Singaporeans and headquartered in Singapore,” for the full permits.

Grab, which started out as a taxi booking app in Kuala Lumpur in 2012, has since moved its base to Singapore and taken steps to polish its local credentials. In March, it announced a new headquarters building in the city, and Chief Executive Officer Anthony Tan revealed plans to double local staff to 3,000. Born in Malaysia, co-founder Tan has taken up Singapore citizenship, according to an ACRA filing.

Razer, which has headquarters in San Francisco and Singapore, has been trumpeting its local identity ahead of the deadline for license applications. It has also announced a seven-story office in Singapore.

The company plans to double Singapore headcount to over 1,000 staff in coming years, CEO Tan Min-Liang said in a September Facebook post. “While I founded Razer in the US, I’m still a Singaporean citizen,” he said. — Bloomberg

Prosecco on the rise

BY NOW, everybody who knows and drinks wines, would have heard of Proseccos. Prosecco is the Italian sparkling wine produced from Veneto and Friuli Venezia Giulia regions in northwest Italy, made primarily from glera grapes (minimum of 85%), and named after the village of Prosecco. Other varietals that are allowed to be blended with glera for Prosecco are: chardonnay, pinot bianco, pinot grigio, pinot noir, perera, bianchetta trevigiana, and verdiso. Glera is a very high yielding varietal that has good acidity, but rather dull flavor with faint tropical fruits.

Prosecco is normally produced using the Charmat method, where the second fermentation occurs in a stainless-steel tank and the sparkling wine is bottled under pressure — a much faster process versus Champagne. Champagne, on the other hand, uses the Classic method or Methode Champenoise in which the secondary fermentation occurs in the bottle and takes at least 15 months before commercial release. Prosecco can be produced in as little as 30 days. For the past few years, Prosecco has already surpassed Champagne as the most saleable sparkling wine in the world. Production and export volume of Prosecco has risen to more than double that of Champagnes, with export accounting for over 70% of total Prosecco production. Export of Prosecco has in fact grown five-fold in the last 10 years, to around 500 million bottles last year (2018). The obvious allure of Prosecco is the price, as on average it is just a fraction of the cost of Champagne and is also priced lower than Spain’s own sparkling wine version, Cava.

PREMIUM VERSION: THE PROSECCO SUPERIORE
I have been drinking Prosecco for several years now, but I admit to drinking it basically in the absence of Champagne or even Cava during occasions and events. In my experience, Prosecco quality does vary quite a lot, but nothing so far from the ones I tried have really made a good impression on me, though some were indeed very decent.

At the recent Borsa Vini event in Singapore, I was introduced to the more premium DOCG version of this Italian sparkling wine by Dr. Umberto Cosmo, from his family owned Bellenda. Prosecco has been a DOC (Denominazione di Origine Controllata), but only by 2009 was Prosecco Superiore created with two specific regions promoted to DOCG (Denominazione di Origine Controllata e Garantita). These are the Conegliano Valdobbiadene Prosecco Superiore DOCG, which can only be made in the hills between the towns of Conegliano and Valdobbiadene north of Treviso, and the Asolo Prosecco Superiore DOCG from the town of Asolo (amended in 2014) which was originally called Colli Asolani Prosecco Superiore DOCG in 2009.

BELLENDA
Bellenda started in 1986 and is a family owned winery with vineyards and production based in Carpesica, Vittorio Veneto, on the east-north side of the Prosecco DOCG area.

Bellenda has been a great representation of the Conegliano Valdobbiadene Prosecco Superiore DOCG with several premium and high quality Proseccos in its portfolio. I was extremely impressed by the Bellenda Prosecco Superiores I tasted. Dr. Cosmo, from the family that runs this winery, was a very affable guy. His charming manners and sleek bow-tied outfit reminded me of Wolf Blass from Australia. Aside from tasting two of the best Proseccos I have ever tried — the Bellenda San Fermo Brut and Bellenda Miraval Extra Dry — what caught my interest most was the Bellenda Sei Uno Brut, which was the lone Prosecco done in classic method ala Champagne in the lineup brought to this Singapore fair. All these three Proseccos are classified Conegliano Valdobbiadene Prosecco Superiore DOCGs. According to Dr. Umberto, Bellenda was the first Prosecco producer to release a classic method version in 2007 for its 2004 vintage Sei Uno when everyone else in this sparkling wine region was just using the traditional Charmat method. Now there are more Prosecco producers going into this classic method. Aside from the Bellenda Sei Uno Brut, they also make two other classic method versions: the Bellenda SC 1931 Conegliano Valdobbiadene Prosecco Superiore DOCG and their own blanc de blanc 100% Chardonnay Bellenda Saiph Metodo Classico non-DOC prosecco.

CUSTOMARY TASTING NOTES
I tasted three of the Bellenda Prosecco Superiore DOCG wines, all of which are made from 100% glera grapes, and here are my tasting notes:

• Bellenda San Fermo Conegliano Valdobbiadene Prosecco Superiore DOCG Brut 2018: San Fermo is the name of the church adjacent to the vineyard where the glera grapes come from; “subtle peach notes, yeasty, persistent bubbles stream, good acid backbone, with very crisp, clean and mineral finish.”

• Bellenda Miraval Conegliano Valdobbiadene Prosecco Superiore DOCG Extra Dry 201: Miraval is the name of the vineyard where the Glera grapes come from for this particular Prosecco; “nose of green apple, white petal, lots of flintiness and depth in the palate, and ends with very dry citrusy notes.

• Bellenda Sei Uno Conegliano Valdobbiadene Prosecco Superiore DOCG Brut 2017: Sei Uno which means “You are One” was also the name of the first wine the family made for their personal enjoyment in 1961, long before establishing Bellenda in 1986; this is the same wine that pioneered the use of the Methode Champenoise in Prosecco making in 2007; “lovely nutty nose, fresh tropical fruits, fine and relentless streaming bubbles, rich texture on the palate, with long and racy finish.”

I seriously enjoyed all the Bellenda DOCG Proseccos I tasted, and with the added bonus of speaking to one of the Bellenda owners himself, Dr. Umberto Cosmo. My only slight issue on the premium Proseccos may be on how long and how tough it is to say Conegliano Valdobbiadene Prosecco Superiore DOCG (over 10 syllables), as opposed to a simple Prosecco DOC. I will no longer scorn the idea of being served Prosecco this holiday season…. Prosecco is on the rise, and I am finally a fan!

The author is a proud member of the UK-based Circle of Wine Writers (CWW). For comments, inquiries, wine event coverage, wine consultancy and other wine related concerns, e-mail the author at protegeinc@yahoo.com.

Lucio Tan’s grandson appointed as Tanduay president, COO

THE grandson of tycoon Lucio C. Tan and son of the late Lucio “Bong” K. Tan, Jr. is entering the family business, assuming his father’s roles at the Tan group of companies.

In a disclosure to the stock exchange, LT Group, Inc. (LTG) said Lucio “Hun hun” C. Tan III was appointed on Monday as director, president and chief operating officer of Tanduay Distillers, Inc. (TDI), taking over the posts of his late father. The 27-year old Hun hun was also elected as director at LTG, replacing his father. In a separate disclosure, PAL Holdings, Inc. (PHI) said the younger Tan was elected as board of director, as well as in its subsidiaries PAL and APC, and in listed MacroAsia Corp. — another firm owned by his grandfather. MacroAsia did not disclose any such announcement yesterday.PAL Holdings said Hun hun obtained his Master’s Degree in Computer Science from Stanford University in 2017, and his Bachelor’s Degree in Electrical Engineering from the same university in 2015. Hun hun was also elected as director of Air Philippines Corp. Meanwhile, Michael G. Tan, Lucio’s son and LTG president and chief operating officer, has resigned from the board of PAL Holdings. He was replaced by his brother John G. Tan, who was director at TDI from 2015 to 2018 and vice-president for operations at PAL from 2009 to 2012. For Philippine Airlines (PAL), Lucio’s wife Carmen K. Tan has been appointed as vice chairman. Former central bank governor Amando M. Tetangco, Jr., who resigned as independent director earlier this month, was replaced by Mark C. Chen.

PAL and Air Philippines Chief Finance Officer Celeste C. Mutuc also resigned from her posts due to health and personal reasons. She will be replaced by Nilo Thaddeus P. Rodriguez as acting CFO, based on a statement by PAL yesterday. Mr. Rodriguez was CFO at SGV & Co. from 1990 to 1992 and held finance positions at Hilton Nagoya, Benguet Corp. and Accenture Philippines. Following the announcements, shares in LTG at the stock exchange slipped 0.22 points or 1.88% to P11.50 each, while shares in PHI were unchanged at P7.40 apiece. — Denise A. Valdez

PHL leads in promoting financial inclusion: EIU report

THE PHILIPPINES is among the leaders in promoting financial inclusion in the world, according to a study.

Despite its slip by one spot to place fifth with an overall score of 71 in the Economist Intelligence Unit’s (EIU) Global Microscope Report 2019, which assesses the enabling environment for financial inclusion of 55 countries, the Philippines is still the leading country in Asia alongside India in the promotion of financial inclusion, the Bangko Sentral ng Pilipinas (BSP) said in a statement on Wednesday.

Among the report’s five standard categories, the country logged its highest score as third placer in terms of stability and integrity domain that looks into the regulation, supervision, and monitoring of financial service providers that are geared for low and middle-income populations.

“Bangko Sentral ng Pilipinas has created a support institution to focus on digital financial technology for reaching the underserved,” the report said.

“We are happy to see continued recognition of BSP’s lead role in the National Strategy and financial inclusion efforts including work on fintech,” Pia Bernadette Roman-Tayag told BusinessWorld in a text message.

The report noted the institutionalization of the Financial Inclusion Steering Committee (FISC) in 2016 which serves as the governing body that streamlines strategic direction, guidance, and oversight in the implementation of the National Strategy for Financial Inclusion (NSFI).

“The Philippines has increased its focus on digital financial inclusion, with the launch of a biometric national identification system and a programme to provide a one-stop shop for online government services,” the report said.

Meanwhile, the country’s lowest ranking (23rd) was for consumer protection which also includes privacy regulation and enforcement capabilities.

According to the report, the country’s strength where it scored first place was with credit portfolio for middle and low-income customers, market entry, and the ongoing requirements for products.

On the other hand, the study said that the Philippines still has room to improve in commitment to cyber security, connectivity, and emerging services.

“We also note the areas for improvement such as credit information and consumer protection particularly for digital financial services. We are working on these areas,” Ms. Roman-Tayag said.

The Global Microscope is a yearly assessment by the research arm of The Economist Group of 55 countries on their respective initiatives and provides information on global trends and issues in financial inclusion.

For 2019, rounding out the top five, in descending order, were Colombia, Peru, Uruguay, Mexico, and the Philippines and India, which were tied at fifth place. — L.W.T. Noble

SoftBank’s Son makes a pitch for Japan-led artificial intelligence superpower

SOFTBANK Group Corp. founder Masayoshi Son has a solution to Japan’s decades-long economic malaise. Not surprisingly, it involves artificial intelligence (AI).

Japan can boost growth by joining with India and Southeast Asian countries in creating a common AI platform, Son told scientists and government bureaucrats who gathered in Tokyo on Tuesday for the government’s Moonshot symposium. He envisions Japan taking a leading role and believes the combined populations and markets could give the countries a fighting chance against the behemoths of China and the US, which share the lead in AI, he said.

“This is the moonshot,” Son said, drawing laughter with a slide that showed a graph of Japanese gross domestic product climbing steeply to exceed those of China and the US “If we can achieve this, the result will be amazing.”

As the first country to confront intractable problems of an aging society, Japan should focus on autonomous driving and DNA-centric medicine as solutions to rising traffic accidents involving the elderly and soaring medical costs, Son said. Southeast Asian countries should join Japan in creating a shared data bank and developing an “AI engine,” he said. Son didn’t explain what he meant by that nor say why developing countries would want to help the wealthy neighbor with its first-world problems.

“If we create Asia’s number one platform, that is a big potential,” Son said.

While many venture capitalists view Son’s sermons about the coming AI age as nothing more than marketing, the billionaire is already pushing his own companies to prepare for the future where every industry is redefined by the technology. Last month, SoftBank announced plans to combine its Yahoo Japan internet business with Line Corp., Japan’s biggest messaging service. The complex deal on his home turf is supposed to create a national champion that can more effectively compete with global rivals like Google and Amazon.com Inc.

Son is as bullish as ever on AI even as his investment strategy has come under fire. SoftBank’s Vision Fund had to write down the value of its ride-hailing portfolio, which includes China’s Didi Chuxing Inc., India’s Ola and Singapore’s Grab Holdings Ltd. after Uber Technologies Inc. fell more than 30% following its listing in May. Son also lost billions of dollars after pouring money into WeWork, a company that has no discernible AI technology but plenty of hurdles as it tries to turn a profit.

The hype around self-driving cars has died down recently after a number of deadly crashes in cars on AI autopilot made it clear that true autonomy may be many years away. Still, Son said robotaxis can already do better than senior citizens. He played a video of an autonomous vehicle from Cruise, a General Motors Co. self-driving unit where SoftBank has invested $2.25 billion, navigating San Francisco’s crowded streets.

“If you are still doubting the capability of autonomous driving, this is already today,” he said.

Son said the answer to rising medical costs is more DNA analysis, putting a spotlight on one of his portfolio companies, Guardant Health Inc. Shares of the cancer-detection company, one of the Vision Fund’s more profitable holdings, have climbed about fourfold since its stock market debut last year. Son also mentioned Karius Inc., a blood-testing startup in which SoftBank has no reported stake.

Shifting gears, Son said AI should be a subject on college entrance exams in Japan. Earlier this month, he announced a collaboration with the University of Tokyo in opening the Beyond AI Institute, designed to accelerate the transition of AI research from the theoretical to the applied. SoftBank in May named renowned AI expert and Deepcore adviser Yutaka Matsuo to its board, enlisting a specialist in the field for the first time. Matsuo is the president of the Japan Deep Learning Association, which offers certification exams for AI engineers.

“Japan has lost the past,” Son said, and if it doesn’t act swiftly to embrace and capitalize on AI, it “may be losing the future.” — Bloomberg

Which industries are projected to generate the most jobs among approved third-quarter investments?

Which industries are projected to generate the most jobs among approved third-quarter investments?

How PSEi member stocks performed — December 18, 2019

Here’s a quick glance at how PSEi stocks fared on Wednesday, December 18, 2019.

 

House passes latest SSL bill on third reading

THE House of Representatives approved on third and final reading a bill covering the fifth phase of government employee salary increases.

With 187 affirmative votes, five negative and zero abstentions, the chamber passed House Bill 5712 or the Salary Standardization Law (SSL) V.

If the bill is signed into law, public-sector employees at Salary Grade (SG) 1 will receive a P2,000 increase overall or P500 each year starting from 2020 until 2023. SG 1 employees who currently receive P11,000 will receive P13,000 by 2023.

The measure covers all civilian personnel in the Executive, Legislative, Judicial Branches, Constitutional Commissions and other Constitutional Offices, and government-owned and controlled corporations.

Representative Stella Luz A. Quimbo of the second district of Marikina said that the bill “promotes efficiency in the delivery of government services” adding that “increases in wages predict increases in labor productivity.”

President Rodrigo R. Duterte has issued a certificate of urgency on the legislation.

Passing a new Salary Standardization Law to increase the wages of government employees was one of the priority bills outlined during Mr. Duterte’s 2019 State of the Nation Address (SONA).

On Monday, the Senate approved its version of the measure on third and final reading. The urgency certification allowed senators to do away with the three-day rule between readings. — Genshen L. Espedido

ARTA targets nearly 50-place climb in World Bank ranking

THE Anti-Red Tape Authority (ARTA) said it is hoping for a climb of nearly 50 places for the Philippines in the 2021 World Bank Ease of Doing Business report, to a rank of 47th.

The Philippines rose to 95th in the 2020 report released this year, from 124th place a year earlier, among 190 economies. The Philippines improved its overall score to 62.8 points from 60.9 points.

ARTA Director-General Jeremiah B. Belgica at a forum on Wednesday said that the authority will be focusing on streamlining program called Project NEHEMIA (National Effort on the Harmonization of Efficient Measures of Inter-related Agencies), to reduce 52% of costs, requirements, and processing times in 52 weeks for identified sectors.

“The program NEHEMIA targets the five identified sectors of society which (have) the highest and most profound impact in the 10-point socioeconomic agenda of our president,” he said, identifying power, telecommunications, food and pharmaceuticals, logistics, and housing.

He said the estimated cost of red tape in the housing industry was more than P140 billion, according to a 2017 study.

The costs come from duplicated requirements, including fees and applications.

Meanwhile, ARTA is also urging the Food and Drug Administration (FDA) to deputize local government units (LGU) to inspect micro, small, and medium-sized enterprises such as bakeries to reduce inspection backlogs.

“Local government is already inspecting them for sanitary purposes… Give a list of what you want to ask (the businesses) and deputize the local government,” Mr. Belgica said in English and Filipino during a news conference at the forum.

Trade Secretary Ramon M. Lopez said that the FDA inspections are sanitary and location-based requirements.

“These (businesses) are already being attended to and inspected by the LGUs. It’s an example of redundancy. (FDA will) offload maybe 90% (of its workload) considering the number of enterprises, SMEs in the country,” he said in English and Filipino.

LGUs are also subjected to the maximum processing times imposed by law: three working days for simple transactions, seven working days for complex transactions, and 20 working days for highly technical applications.

“We are also asking the local government units to reconsider some of their requirements,” Mr. Belgica said, including locational clearance requirements for shops that are already inside the malls.

He said ARTA will release a memorandum on the practice, for implementation in January. — Jenina P. Ibañez

BOT law amendments being drafted; may address rate-setting — PPP Center

PPP CENTER FACEBOOK

THE Public-Private Partnership (PPP) Center said Wednesday that an executive branch proposal amending the build-operate-transfer (BOT) law, which could include a tariff-setting feature, is currently being prepared for submission to Congress.

In a news conference in Quezon City, PPP Center Director Jeffrey I. Manalo said: “The executive is coming up with a version of the bill (amending the BOT law) that will be endorsed to both the House and Senate. It’s for one last cabinet committee meeting, the infrastructure committee meeting of the National Economic and Development Authority (NEDA) Board. Once approval is obtained, then it will be endorsed to both houses.”

As for the key features of the proposed measure, Mr. Manalo said: “Essentially the PPP Act version of the executive would tackle accelerating infrastructure development. That means deleting unnecessary requirements that could hamper the fast-tracking of projects; there are good governance mechanisms, particularly in ensuring competition in the process; and the transparency mechanisms, for example contracts disclosures; institutionalization of the good practices that have been experienced under the program for the last 20 years; and the enhancement of the unsolicited proposals framework.”

He cited some “vague” rules in the existing BOT law, saying: “For example, what is exactly a direct subsidy equity or guarantee? These are not clearly or explicitly defined in the law. So with the PPP Act, the objective is to clearly define these so that during implementation plantsado na ‘yung mga definitions na ito (these definitions are ironed out).”

PPP Center Executive Director Ferdinand A. Pecson said adding a tariff-setting feature to the law is also being considered, but discussions on the matter may take some time as there are many stakeholders involved.

“This will take quite some time. There are many parties that have to come together,” he said.

Asked if the tariff-setting feature will be applied to past PPP projects, he said: “It will not affect past projects, but this is forward-looking. What we are trying to include here is the robustness of agreed tariff adjustments or initial tarrifs for concessionaires’ agreements, just like variations which are governed by rules found in the IRR (implementing rules and regulations of the (BOT) law, so we don’t have such rules yet on tariff setting and even for regulation of PPP contracts.”

He said that with the tariff-setting feature, it will be easier for private proponents to prepare their proposals.

“If we have this tariff-setting feature in the law, maiiwasan din natin na iniisa-isa natin ‘yung kontrata na tingnan kasi meron tayong basehan eh (we will avoid having to go through contracts one by one because they will all be based on this model),” Mr. Pecson said.

President Rodrigo R. Duterte has ordered the Office of the Solicitor General and the Department of Justice to review all government contracts to ensure they do not have “onerous provisions that might be detrimental to Filipinos.”

“Right now it’s all by contract. Every contract can have a different way of computing (rates). For example the water concessions are based on rate rebasing, so kino-compute ‘yung capital cost ng private sector for the past five years (it needs a computation of five-year capital costs for the private sector). Sa ibang kontrata depende sa inflation. Pagtumaas ‘yung inflation, tataas din ‘yung tariff. ‘Yung iba, fixed increase, 10% every two years. So right now ang status quo natin, iba-iba siya per contract (Others are indexed to inflation, while others call for fixed increases like 10% every two years, So right now the status quo is that the mechanism varies by contract)” Mr. Manalo said.

PPP deputy executive director Eleazar E. Ricote said the PPP Center intends to respond to more projects from tourism and information and communications technology (ICT)-related proponents and other “new sectors” from 2020 onwards.

“The program will respond to new sectors, new areas, new infrastructure projects that the private sector can initiate doing through unsolicited proposals, so we will see more of that sa mga susunod na taon.”

Asked what sectors are being eyed by the program, he said: “Tourism, maraming ICT-type of development projects ang lumalabas (many ICT-type of development projects are emerging); also, for LGUs (local government units), solid waste management, water sanitation, and some property development kind of PPPs.”

Deputy Executive Director Mia Mary G. Sebastian said that as of December, there are 56 PPP projects in various stages of development, procurement, and approval. She said 32 of these projects are unsolicited while 24 are solicited. — Arjay L. Balinbin

TUCP backs Saudi worker deployment slowdown

A MAJOR UNION has come out in support of the Department of Labor and Employment’s (DoLE) plan to slow the deployment of overseas workers to Saudi Arabia amid a back pay dispute, saying that it protects workers’ interests.

In a briefing Wednesday, Trade Union Congress of the Philippines (TUCP) Vice-President Luis M. Corral said that the organization supports the move in order to protect the rights of Overseas Filipino Workers (OFW) in Saudi Arabia.

“That has to be done… Otherwise what will happen? Our workers will continue to be abused and they will continue to violate their rights,” Mr. Corral said.

On Tuesday, DoLE announced it will “scale down” deployment of OFWs in Saudi Arabia starting next year. This is a response the Riyadh’s inaction in settling 300 unpaid claims of OFWs employed by a contractor of government-run oil firm Saudi Aramco. This is on top of the 9,000 OFWs who also have yet to receive their unpaid salaries.

Saudi Arabia is the top destination for OFWs with 3 million total Filipino workers in the kingdom.

The Philippine Overseas Employment Administration (POEA) will determine which industries will be affected by this deployment decrease. It will also stop processing Overseas Employment Certificates (OEC) for newly-hired OFWs going to Saudi Arabia.

TUCP Partylist Representative Raymond C. Mendoza said he will summon Labor Secretary Silvestre H. Bello III next year when Congress resumes on Jan. 20 to elaborate on its plans to scale down worker deployments to Saudi Arabia.

TUCP said that the DoLE should improve its management of deploying workers. Mr. Corral said that any questionable provisions in contracts can be easily detected by POEA personnel if it had more manpower.

“What they have to do is there are 7,000 workers deployed daily… How many people are checking the contracts of the 7,000 workers? Only five personnel in the POEA. So DoLE should really increase the personnel component in doing this,” he said. — Gillian M. Cortez

Palay output estimated to rise to 7.70 MMT in fourth quarter

PRODUCTION of palay, or unmilled rice, in the fourth quarter is estimated at 7.70 million metric tons (MMT), up 7.6% year-on-year, the Philippine Statistics Authority (PSA) said.

In its Palay and Corn estimates report for the quarter, PSA said palay output is expected to exceed the 7.16 million MT recorded a year earlier. However, the estimated total is 0.4% lower than the palay production estimate made in October of 7.73 million MT.

The agency noted that “(h)arvest area may increase by 1.5% from 1.847 million hectares in 2018,” while yield per hectare may fall to 4.11 MT from 4.12 MT.”

At a briefing in November, Agriculture Secretary William D. Dar said that palay production for 2019 is projected to hit 18.49 million MT. This is 15% short of the country’s annual requirement, which will be supplemented by 3.72 million MT imported rice expected to arrive by the end of 2019.

The corn production estimate in the fourth quarter was 1.68 million MT, down 6.8% from the actual year-earlier total. This is also lower than the estimate issued in October of 1.69 million MT.

“Harvest area may decrease to 561,470 hectares from 611,800 hectares in 2018. Yield per hectare may increase to 3 MT from 2.95 MT,” PSA noted.

In a separate report, the PSA said that the average farmgate price of palay, or unmilled rice, continued to rise in the fourth week of November, increasing 0.3% week-on-week to P15.57 per kilogram (kg).

In its weekly palay and corn price update, the average wholesale price of well-milled rice fell 0.1% week-on-week to P37.30 per kg. Retail prices were stable at P41.56.

The average wholesale price of regular-milled rice decreased 0.3% week-on-week to P33.12 per kg, while retail prices dropped 0.2% to P36.67.

Palay prices have been on a downtrend since early 2019, following the implementation of the Rice Tariffication Law, which liberalized imports of rice, with a 35% tariff levied on Southeast Asian grain.

On a year-on-year basis, the palay price in the fourth week of November fell 22.3%.

The average farmgate price of yellow corn grain fell 0.5% week-on-week to P11.90 per kg. The average wholesale price fell 0.3% to P20.96. The retail price fell 0.1% to P25.64.

The average farmgate price of white corn grain fell 0.2% week-on-week to P13.31 per kg. The average wholesale price fell 0.9% to P16.95. At retail, prices fell 0.3% to P26.70. — Vincent Mariel P. Galang

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