Energy department extends deadline for service contract bids

May 17, 2019 | 8:01 pm

THE DEPARTMENT of Energy (DoE) has extended the deadline for interested entities to submit their bids to secure service contracts for the 14 areas in the Philippines offered by the government for oil and gas exploration.

A notice posted on the department’s Web site said the 180-day application period for the pre-determined areas (PDAs) under the Philippine Conventional Energy Contracting Program (PCECP) had been moved to Aug. 19 from May 21, 2019.

It said the reason for the extension is “in order to provide additional time for applicants and other interested parties to submit their complete application documents.”

Ahead of the extension, DoE officials had been saying that several companies had expressed interest in submitting their application.

They also said other entities were keen on nominating areas outside the 14 PDAs, including offshore areas in the South China Sea where the Philippines has a standing territorial dispute with China.

DoE Undersecretary Donato D. Marcos, who attended local and international road shows to drum up interest in PCECP, did not immediately respond when asked whether the department had received applications for the pre-determined areas or whether areas outside of the identified 14 had been nominated for exploration.

PCECP is the DoE’s initiative to spur exploration by offering areas in the country with potential oil and gas reserves. It is a revised, transparent petroleum service contract awarding mechanism that allows investors to bid for exploration projects through a competitive selection process or by nomination.

These areas are composed of onshore and offshore sites located in the Cagayan Basin (one area), Eastern Palawan (three areas), Sulu (three areas), Agusan-Davao (two areas), Cotabato (one area) and in Western Luzon (four areas).

The application period is 180 days from the launch in November last year. None of the areas is within the waters being contested by China and the Philippines.

Under the PCECP, investors are also given a chance to develop locations other than those on the PDA list by nominating their areas of interest, subject to DoE approval.

Potential applicants may nominate and publish these areas at any time of the year. Their application will be subjected to a 60-day challenge period. — VVS

Proclamation for winning Senate bets, party-list groups possible by Sunday

May 17, 2019 | 8:00 pm

By Charmaine A. Tadalan, Reporter

BOTH the 12 leading candidates in the senatorial race and the leading party-list groups may be proclaimed by Sunday, the Commission on Elections (Comelec) said Friday.

But Comelec Spokesperson James B. Jimenez also said in his press briefing Friday afternoon, “No formal invitation has been issued yet. There are still some matters…to be settled.”

“Again, sobrang tentative pa ang Sunday but as a heads up, sobrang reasonable na window.” (Again, Sunday is still a very tentative date, but it is a reasonable time window.)

He added: “One of the directions that we’re going in is one proclamation for both Senate and party-list winners….So hindi tayo pwedeng magmadali kasi kailangan i-compute muna natin yung party-list.” (So, we can’t rush this because we still have to compute the party-list)

With 145 out of 167 certificates of canvass already counted, the Comelec, convening as the National Board of Canvassers (NBoC), is seen to finish its count soon.

“We have canvassed 145 out of 167, so malapit na matapos (so it’s almost done),” Mr. Jimenez said.

Meanwhile, Tindig Pilipinas on Friday marched to the Philippine International Convention Center (PICC), where the NBoC is canvassing the votes, to urge the Comelec to address alleged irregularities in the midterm polls.

The group cited the 7-hour delay on Monday night in the transmission of election results to the transparency server, corrupted SD (Secure Digital) memory cards, and malfunctioning vote-counting machines, among others.

Human Rights Watch urges accountability on ex-PNP chief winning Senate race

May 17, 2019 | 8:00 pm

ADVOCACY group Human Rights Watch (HRW) on Friday called for a winning senatorial candidate to be held accountable for his leading role in President Rodrigo R. Duterte’s drug war.

“Newly elected senator Ronald ‘Bato’ dela Rosa was Duterte’s police chief when the ‘drug war’ began after Duterte took office in June 2016.” HRW said in a statement credited to researcher Carlos H. Conde of the group’s Asia division.

“Dela Rosa presided over a Philippine National Police that routinely shot and killed drug suspects, claiming without proof they resisted arrest. Investigations by rights groups, including Human Rights Watch, and the media found numerous instances in which the police planted weapons and drugs on victims to cover-up the killings.”

“Dela Rosa was as vociferous in carrying out and defending the ‘drug war’ brutality as Duterte was in justifying it,” HRW also said. “‘If many believe that the number of drug addicts has gone down,’ he told reporters during his Senate campaign, ‘then somehow we are successful.’”

“However one views the election results, it won’t change the fact that victorious candidates implicated in “drug war” crimes shouldn’t receive a get-out-of-jail-free card.”

“Dela Rosa may still have a date with justice. The Duterte government has shown it won’t carry out necessary investigations, but the International Criminal Court (ICC) could. Although the Philippines has officially withdrawn from the ICC, the court, which is conducting a preliminary examination into killings during the anti-drug campaign, can still investigate alleged crimes against humanity that occurred while Dela Rosa was police chief, and any other crimes “occurring in the future in the context of the same situation.”

Mr. dela Rosa was sought for comment. He is currently in fifth place in the ongoing election count, with more than 18 million votes, and was reported by election watchdog Parish Pastoral Council for Responsible Voting as the top choice in the overseas vote.

Puno accepts dismissal, maintains ‘honesty’ in FDA tenure

May 17, 2019 | 8:00 pm

By Vann Marlo M. Villegas, Reporter

DISMISSED Food and Drug Administration (FDA) Director-General Nela Charade G. Puno said she accepts her dismissal by President Rodrigo R. Duterte but maintained that she is “clueless” about the allegations of corruption against her.

Ms. Puno said in a statement she accepts her termination last Wednesday “without any ill feelings” but “takes exception to the mention of so-called ‘corruption allegations.’”

“I have not been charged in any legal proceedings nor am I aware of any official investigations being undertaken in relation to corruption involving me. Of course, if there will be any such allegations forthcoming, I am more than ready to face these in any forum,” she said.

Presidential Spokesperson Salvador S. Panelo on Thursday announced Ms. Puno’s dismissal, saying this was in line with Mr. Duterte’s campaign against graft and corruption.

Ms. Puno also noted that she worked in the private sector before her appointment to the FDA in 2016, which makes her “completely unfamiliar with the political maneuverings in the bureaucracy.”

“I served as the Director General of the FDA for 2 years and 10 months with complete honesty, diligence, dedication, and loyalty,” she said.

“I leave FDA with a clear conscience and what I believe to be a clean record. It is completely unnecessary to sully the personal and professional reputations of people who sacrifice to render public service,” she added.

Ms. Puno also said it was during her tenure the FDA gained recognition and accreditation of regulatory standards in the Association of Southeast Asian Nations.

Healthcare funding gap must be plugged by more sin taxes — DoF

May 17, 2019 | 7:59 pm

THE Department of Finance projects the Universal Healthcare (UHC) Act to have a total funding gap of P426 billion in the first four years of implementation if a fresh tax increase on tobacco and alcoholic beverages is not passed.

“In 2020 — the first year of UHC’s implementation — the program is estimated to cost P258 billion, which the government can cover from its current funding sources from the national budget, the Philippine Amusement and Gaming Corp. or PAGCOR and the Philippine Charity Sweepstakes Office or PCSO, in the amount of P195 billion. Without ‘sin’ tax reform, UHC will be left with a funding shortfall of around P62 billion, Finance Secretary Carlos G. Dominguez III said in a speech at a joint news conference of the Finance and Health departments.

He added: “Without the sin tax reform, the cumulative funding gap by 2024 will stand at P426 billion, about one-third of the total cost.”

Both the DoF and the Department of Health (DOH) urged the 17^th Congress to pass laws further increasing taxes on alcoholic beverages and cigarettes to fully implement the UHC law signed by President Rodrigo R. Duterte in February.

Senate Bill (SB) No. 1599 filed by Senator Emmanuel D. Pacquiao seeks to increase the current uniform excise tax rate on cigarettes and other tobacco products to P60 per pack from the current P35. This will be adjusted upward by 9% per year thereafter.

SB No. 2197, also proposed by Mr. Pacquiao, seeks to impose excise taxes on alcoholic beverage of at least P40 per liter and impose a unitary tax system on fermented liquor. This is expected to generate P236.6 billion in additional revenue within five years.

The 17^th Congress, currently on a Feb. 9-May 19 break for the midterm elections, can act on bills between May 20 and June 7. Any measure that fails to pass will have to be filed again with the next Congress.

“We don’t have plan B. This is the only plan and it is ready to be passed,” Mr. Dominguez said in the news conference.

“We need to secure sufficient and sustained resources to ensure that the healthcare system will… transform as envisioned in the next 10 years. Now that the President has signed the UHC into law, we need to make sure that this unprecedented investment in Filipino’s health is funded sustainably,” he added.

“We look forward to the support of our counterparts in the legislature, during this crunch time. This is the final round, tapusin na natin ang boksing (let’s finish the match),” Health Secretary Francisco T. Duque III said.

The sin tax law of 2012 was able to curb smoking prevalence to 22.7% in 2015 from 29% in 2012, but Mr. Dominguez said that tobacco product use has started to climb again.

“[R]ecent polling shows that smoking prevalence has again began to increase, reaching 23% in 2018. This is an warning sign. With the rise of incomes and slower increases in tobacco taxes, for the past three years, tobacco has again become affordable to the youth and average Filipinos,” he said.

He added that the 2012 sin tax law failed to increase excise taxes to the satisfaction of finance and health authorities, leading among others to the continued rise in binge drinking among consumers.

“I presented the facts and issues to the President and the rest of the Cabinet. We were given clear and urgent instructions: tax alcohol and tobacco at higher rates than current levels and fund UHC beginning this year,” Mr. Dominguez said. — Karl Angelo N. Vidal

Iloilo’s MORE to source power supply from KEPCO’s Cebu plant

May 17, 2019 | 7:59 pm

MORE Electric and Power Corp. (MORE Power) has signed an interim power supply agreement for 5 megawatts (MW) with KEPCO SPC Power Corp. (KSPC), helping ensure stable electricity in Iloilo City for the one-year term of the contract.

“We are happy to be in partnership with KEPCO SPC as we commit to bring more to the lives of the Ilonggos by delivering cheaper power,” said Roel Z. Castro, president and chief operating officer of MORE Power, in a statement on Friday.

The contract has an option for another 5 MW. It was signed on May 15 at the KSPC plant office in Naga City, Cebu.

MORE Power said KSPC had agreed to supply reliable power to Iloilo City at a much lower rate than the current supplier of the city.

It quoted KSPC President and Chief Executive Officer Jong Ryoon Yoon as saying: “KEPCO SPC is more than willing to assist MORE Power in its journey in giving Iloilo City secure, reliable and affordable power supply. [MORE] can always count on KSPC on these basic criteria of service.”

KSPC operates a circulating fluidized bed combustor coal-fired power plant with two units, each with a capacity of 100 MW. The plant is in Naga City, Cebu.

Under MORE Power’s franchise, or Republic Act 11212, the power distribution utility is allowed to resort to negotiated procurement of emergency power supply under Department of Energy (DoE) Circular DC 2018-02-003.

The DoE circular adopts and prescribes the policy for the competitive selection process in procurement by distribution utilities of PSAs for the captive market.

The emergency power supply contract must not be higher than the latest Energy Regulatory Commission-approved generation tariff for the same or similar technologies in the area. — Victor V. Saulon

GMA unit signs partnership with Singapore Press Holdings/Mediacorp JV

May 17, 2019 | 7:59 pm

GMA New Media, Inc. (NMI) has tied up with Singapore Media Exchange (SMX) Pte. Ltd., a joint venture firm established by two Singapore media groups, to help GMA expand its audience worldwide.

In a statement Friday, the digital media and tech arm of listed GMA Network, Inc., said the partnership is intended to expand the broadcast network’s plan to further its reach across various cultures and territories.

“We are thrilled to work with SMX and see this as an opportunity to leverage the strength of media giants like Singapore Press Holdings and Mediacorp through SMX. This partnership is a significant enabler not just for premium content providers like GMA but for advertisers as well since the synergies it creates will be instrumental to achieving our goals in terms of revenue targets, market penetration, and cost efficiency, among others,” NMI Chief Operating Officer and President Judd Gallares was quoted.

For 2019, GMA has a revenue growth target of 12%, with election-driven revenue and a recurring advertising sales seen accounting for the biggest share.

In a regulatory filing, GMA said its attributable net profit surged 70.7% to P716.08 million in the three months to March, driven by advertisinga.

Consolidated revenue rose 14% year-on-year to P3.8 billion, on the back of political advertisements which accounted for over P300 million in the three-month period.

Meanwhile, SMX, co-owned by Singapore Press Holdings Ltd. and Mediacorp Pte. Ltd., aims to establish itself in the Southeast Asian market via partnerships in the region.

“The expansion offers advertisers a one-stop selection of programmatic brand-safe options to reach top-quality audiences across Southeast Asia, including exclusive access to premium formats,” according to the statement.

SMX is also expected to have more opportunities to combine its own proprietary data with those of its partners to gain a richer understanding of the audience for more precise and effective targeting.

“These regional partnerships I believe will propel SMX towards a strong regional offering that reinforces our ability to provide buyers with rich audiences, precision targeting and innovative ad formats while making the supply accessible with more buying options and across bidders,” SMX Chief Executive Officer Hari Shankar said in the statement.

NMI joins SMX’s new group of partners which consist of media publishers and marketplace platforms that have presence in Southeast Asia. — Janina C. Lim

Sta. Lucia Land buys stake in Uni-Asia for over P40-M

May 17, 2019 | 7:59 pm

Sta Lucia Land, Inc. (SLI) said its board has approved the purchase of LBS Properties Inc.’s stake in Uni-Asia Properties, Inc., thereby gaining access to the latter’s development projects.

In a regulatory filing on Friday, SLI its board, in a special meeting on May 7, approved the P40.487 million purchase of 2,562,490 shares of Uni-Asia’s stock.

The shares were valued at P15.80 each based on Unia-Asia’s net asset value.

SLI said the deal will increase its stake to 4.37% in Uni-Asia which currently develops subdivision projects such as Centro Verde, as well as a township in Iloilo, Hacienda Verde.

SLI ”will benefit from the positive cash flows of Uni-Asia from the expected sales of its new township project in Iloilo,” SLI said.

SLI and LBS Properties are to execute a deed of conditional sale of shares which calls for a down payment of P20.24 million, or half the agreed sum.

The balance will be paid within one year through monthly installments of P1.69 million, secured by post-dated checks.

SLI said its board also approved during the meeting the development of seven sites via joint venture.

The sites, in Sto. Tomas and Lian in Batangas; Davao City, Cavite, Cebu, Iloilo and Bulacan, total some 2.219 million sqm.

The board also approved the formation of joint ventures with Sta. Lucia Realty and Development, Inc. to develop five other sites in Bulacan, Batangas, Cavite, Rizal and Iloilo totaling 135,022 sqm.

The board also authorized the purchase of seven sites in Calamba and Sta. Rosa, Laguna; Davao City; Iloilo; Negros Oriental; Pasig City and Palawan, totaling 627,174 sqm.

The board approved SLI’s plan to apply for an additional P200 million credit line with Maybank Philippines, Inc.’s Trust Department.

SLI fell 4.26% on Friday to close at P1.80. — Janina C. Lim

BDO completes sale of 15% stake in rural bank unit ONB

May 17, 2019 | 7:58 pm

BDO Unibank, Inc. said it completed the sale of a minority stake in its rural banking unit to a Singapore investment firm.

In a regulatory filing on Friday, the bank said it completed on Thursday the sale to Osmanthus Investment Holdings Pte. Ltd. (Singapore) of a 15% stake in One Network Bank, Inc. (ONB).

BDO said in an earlier disclosure that the Osmanthus deal will further strengthen the rural bank’s foothold in microfinance.

The deal was first entered into in October.

Osmanthus is a unit of Singaporean private equity firm Archipelago Capital Partners Pte. Ltd. which invests in small- to mid-market firms in Southeast Asia.

“BDO’s partnership with Osmanthus in ONB is expected to accelerate ONB’s ongoing thrust into the micro-, small and medium enterprise (MSME) market and further extend coverage of the unbanked and underserved markets,” BDO added.

Since 2017, Osmanthus has been helping ONB develop the framework for its MSME loan business, which led to the establishment of initial test sites before the end of 2017.

“We believe in the vast potential of the MSME market in the Philippines and are committed to help ONB achieve a leading position in serving these customers,” Archipelago Capital Partners Chief Executive Officer Jovasky Pang was quoted as saying in a statement in October.

At the end of 2018, ONB was was the biggest rural bank in the country by assets with P27.3 billion, according to central bank data.

ONB operates 120 branches and over 220 automated teller machines, most of which are located in rural Mindanao.

BDO completed its acquisition of ONB in July 2015 from the Consunji group. — Karl Angelo N. Vidal

Peso closes at over seven-week low after RRR cuts

May 17, 2019 | 7:58 pm

THE peso plunged further against the dollar on Friday to its seven-week low, as market participants responded to the 200-basis-point reduction in the reserve requirement ratio (RRR) for big banks.

The peso ended the week at P52.63, against the P52.48 finish on Thursday.

This was the peso’s worst close in more than seven weeks. It closed at P52.75 on March 28.

The peso opened the session weaker at P52.55. It slipped to as low as P52.65 intraday, while its best showing was P52.445.

Trading volume spiked to $1.188 billion from $715.27 million in the previous session.

Foreign exchange traders attributed the peso’s slump to the recent cut by the Bangko Sentral ng Pilipinas to the RRR for commercial and universal banks.

“The peso traded weaker given the RRR cut that was done after the market closed yesterday,” one of the traders said in a phone interview.

The Bangko Sentral ng Pilipinas ordered a series of reductions in RRR. The rate will be reduced to 17% effective May 31, 16.5% effective June 28 and eventually to 16% effective July 26.

Big banks are currently required to keep in reserve at least 18% of deposits — a share considered as the highest in the region. Trimming the RRR will likely unleash about P90-100 billion into the financial system.

Robert Dan J. Roces, Security Bank Corp. chief economist, said on Thursday the injection will cause the peso to “face stronger depreciation pressures” given that more money is circulating in the economy.

“Sharper peso depreciation could stoke inflationary pressures,” he said, although noting that the staggered implementation seeks to arrest this tendency.

“As the RRR cuts are done in a gradual, managed nature, its end goal will be to bring down financial intermediation costs, as well as orienting monetary instruments to become more market-based, thereby leading to better credit growth that goes into capital formation and consumption.”

Apart from the cut in reserve requirement, another trader said the peso declined against the dollar as “trade conflicts between the US and China remain high.”

Reuters, citing official Chinese media, reported that China considers the US to not ne sincere in wanting to resume trade talks.

Trade tensions between the world’s two largest economies simmered anew after both countries imposed levies on each other’s goods.

The US Commerce Department also issued a rule Thursday prohibiting US companies from buying equipment from Chinese firm Huawei Technologies Co. Ltd. — Karl Angelo N. Vidal

PSEi caps five days of losses after BSP’s RRR cut announcement

May 17, 2019 | 7:57 pm

THE PHILIPPINE STOCK EXCHANGE index (PSEi) snapped a five-day losing streak on Friday, with the financial sectoral index gaining the most a day after the Bangko Sentral ng Pilipinas (BSP) announced a 200 basis point phased cut to big banks’ 18% reserve requirements ratio (RRR).

The PSEi gained 108.66 points or 1.45% to finish 7,583.82 — but still marked the second straight weekly fall of 2.05% — while the all-shares index increased by 50.41 points or 1.08% to end 4,713.27.

“Sentiment got a boost from the BSP’s decision to cut the reserve requirement

by 200bps in three stages beginning with a 100bps cut on May 31,” RCBC Securities, Inc. said in a Stock Market Weekend Recap authored by research analyst Fiorenzo D. De Jesus.

Timson Securities, Inc. trader Jervin S. De Celis said the BSP’s latest policy step provided “a cushion for this falling market.”

“This move by the BSP means more liquidity in the economy and more money for banks to lend for growth amid slowing inflation and lower-than-expected [5.6%] GDP [growth] rate in the first quarter,” Mr. De Celis said in a mobile phone message on Friday.

“However, this bounce may not last at all because investors will be rebalancing their portfolio in accordance with the changes in the index weights reported by MSCI.”

Regina Capital Development Corp. Managing Director Luis A. Limlingan said Wall Street’s rise on Thursday in the wake of strong macroeconomic data and bargain hunting at home fueled PSE’s recovery on Friday. At the same time, “… [i]nvestors weighed the latest developments on the trade front after President Donald Trump appeared to target Chinese telecommunications group Huawei with an emergency declaration against threats to US technology,” Mr. Limlingan said in a text message.

Four of the six local sectoral indices gained: financials by 37.35 points or 2.24% to finish 1,700.73, services by 38.37 points or 2.4% to 1,636.59, property by 65.62 points or 1.61% to 4,138.89 and holding firms by 74.45 points or 1.06% to 7,069.9.

Mining & oil fell by 31.28 points or 0.42% to finish 7,256.66, while industrials gave up 32.55 points or 0.29% to end 11,058.42.

Stocks that gained outnumbered those that lost 122 to 72, while 40 issues ended flat.

Trading thinned as Friday saw 935.86 million shares worth P8.207 billion change hands, compared to Thursday’s 2.325 billion shares worth P8.56 billion.

Investors abroad remained predominantly bearish, although net sales slipped to P1.387 billion on Friday from Thursday’s P1.854 billion. RCBC Securities’ Mr. De Jesus noted that the week saw “massive net foreign selling of almost P6 billion”. — J. C. Lim

Inspiring eco-innovation in Aurora, Quirino, and Palawan

May 17, 2019 | 1:26 pm

Spearheading a movement towards environmental conservation this Earth Month, Impact Hub Manila and Forest Foundation Philippines launch a local scaling program for community-based social enterprises.

The Social Entrepreneurship Engagement & Development (SEED) program aims to catalyze growth of the Philippine social enterprise pipeline through providing entrepreneurs in the provinces with the same incubation opportunities that startups in Manila have access to.

However, participants of the program will not only have business profit on their minds. Integral to the development program is its emphasis on ecosystem management. The weavers, farmers, and fishermen will be taught best business practices that support the UN’s Global Sustainable Development Goals.

The research team has conducted research in Palawan and Sierra Madre, immersing in the communities to evaluate the existing social enterprise ecosystems in each. Indubitably, the provinces are teeming with untapped business potential. There is prominent support for community members’ own ventures that ranged from aquaculture to woodcarving. Although the program will reinforce the ecosystems in each community, it will also give entrepreneurs a chance to take things up a notch.

The SEED program will spark eco-innovation within the social entrepreneurs by awarding a grand prize of continuous incubation support from Impact Hub Manila, hoping to ignite the Filipino inventive entrepreneurial spirit. This will feature free one-on-one coaching and consultancy, access to working space, and several opportunities in the global network of industry leaders and business pioneers.

With an ambitious goal of strengthening the country’s social enterprise ecosystem across the regions, the program will also draw support from the dynamic startupsphere of major cities in the Philippines. For those who are interested in sharing important social enterprise insights, Impact Hub and Forest Foundation encourage successful entrepreneurs and startups to become a part of the program by signing up for its mentors pool.

You can learn more about the SEED program on Impact Hub Manila’s site here.

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Isabell J. Kittel is the research officer of Impact Hub Manila, the world’s largest network focused on building entrepreneurial communities for impact at scale.