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Galunggong imports to be suspended as fishing season opens

THE Department of Agriculture said that it is planning to suspend the importation of round scad, or “galunggong,” as the fishing season for the species opens.

“Open season na ng isda ngayon [It’s the open season for the fish now]. In fact, we’re intending to suspend the importation kasi sagana na yung isda [because the domestic supply is ample],” Agriculture Secretary Emmanuel F. Piñol told reporters recently.

When asked when the suspension will be implemented he said, “Baka pagbalik ko, after the Holy Week (Possibly when I return from the Holy Week holidays).”

Bureau of Fisheries and Aquatic Resources (BFAR) National Director Eduardo B. Gongona told BusinessWorld in a text message: “Since last year we have allowed the importation of about 117,000 metric tons of fish. Primarily round scad for the wet markets. About 17,000 metric tons ordered in the last quarter of 2018 were delivered. The 100,000 additional (has been) allocated to qualified importers.”

In terms of local production, he said he has no final information yet, though the prospects are positive. “There is more local fish production, so suspension of fish importation may happen. It depends on the suspension. For now we are not issuing any more import permits,” he said.

Early this year, the BFAR called for the protection of municipal waters to help the regeneration of the round scad fishery.

Fisheries output declined 1.13% by value in 2018, narrowing from the previous year’s 1.73% fall.

In August, ahead of the closing of the fishing season, the DA and the fisheries industry agreed to a plan to import round scad, a major source of protein for low-income Filipinos and a possible driver of inflation if supply is short.

Mr. Piñol later amended the administrative order permitting the imports, allowing their direct sale to wet markets. The original order allocated the imports to food processors.

According to the Philippine Statistics Authority (PSA), fisheries production volume in 2018 was 4.35 million metric tons (MMT), up 0.92% year on year.

Round scad production fell 8.15% year on year. Milkfish, or bangs, fell 3.9%; yellowfin tuna fell 11.91%; and tiger prawn fell 2.76%. On the other hand, production of seaweed, skipjack, and tilapia rose 4.45%, 4.33%, and 3.25%, respectively. — Vincent Mariel P. Galang

Russian company orders 2 tons of mangoes a week from Guimaras growers

THE Department of Agriculture (DA) said a Russian company has placed an order of 2 metric tons of mangoes a week with growers in Guimaras.

“The Exim Pacific company… has initially placed an order of 2 metric tons of Guimaras mangoes every week as soon as the farmers are able to export,” Agriculture Secretary Emmanuel F. Piñol told reporters this week.

“It’s a major breakthrough for us in the Eastern European market. We’re hoping that this will be the beginning of our entry into the European market,” he added.

The mangoes will be shipped to Russia via Bangkok pending the development of more direct shipping links.

The DA has said that it is expecting mango imports to Russia to start as early as April. Foreign demand for mangoes has been building up in the past two years pending development of sufficient capacity in the Guimaras mango industry and other key growing areas like Zambales, Pangasinan, Cebu, Iloilo, the Davao Region, the Zamboanga Peninsula, and Cotabato.

The DA has said that it learned that mangoes are selling in Russia for about P1,000 each, mainly varieties imported from Thailand, India, and Pakistan.

According to the Philippine Statistics Authority (PSA), mango output in the fourth quarter of 2018 rose 0.5% year on year to 27,620 metric tons (MT). Zamboanga Peninsula accounted for 26% of total output, while Caraga and Northern Mindanao accounted for 24.1% and 15.4%, respectively.

The Carabao mango was the top variety, accounting for 22,560 MT or 81.7% of the total.

Aside from mangoes, the DA is also looking into exporting coconut oil, banana, and shrimps to Russia.

Meanwhile, Mr. Piñol said that the Philippines will be joining the Bel-Agro Festival in Belarus in June to further explore the Eastern European market. — Vincent Mariel P. Galang

Palay prices remain under pressure on prospect of cheaper imports

THE AVERAGE farmgate price of palay, or unmilled rice, remained on a downtrend in late March as domestic producers remained under pressure due to expected competition from cheaper foreign rice brought in more freely under the terms of the Rice Tariffication Law.

The price of palay, the form in which rice is sold by farmers, fell 0.16% week-on-week to P18.80 per kilogram (kg) in the fifth week of March, according to the Philippine Statistics Authority (PSA).

The average wholesale price of well-milled rice fell 0.30% week-on-week to P40.49 per kg. At retail, the average price of well-milled rice fell 0.34% week-on-week to P44.07.

The average wholesale price of regular-milled rice fell to P36.73 per kg from P36.88 a week earlier.

The price declines come even amid pressure on domestic supply caused by El Niño losses. According to PSA data, first quarter palay output is estimated to fall 1.3% year-on-year to 4.56 million metric tons (MT).

The standing crop in January had been estimated to yield 4.65 million MT.

The average farmgate price of yellow corn grain rose 0.29% week-on-week to P13.91 per kg.

The average wholesale price of yellow corn grain was P18.48 per kg, down 0.70% week-on-week. At retail, the price declined 0.66% from a week earlier to P23.92.

The average farmgate price of white corn grain was unchanged at P15.29 per kg during the week, while rising 1.46% week-on-week to P22.99 at wholesale.

At retail, the average price of white corn grain rose 0.89% week-on-week to P29.38 per kg.

Separately, the National Food Authority (NFA) said Wednesday that it was able to exceed the 2 million-bag mark for domestic palay procurement.

In a statement, the agency said that as of April 17, palay procurement was 2.12 million bags, with 845,891 bags purchased in the first two weeks of April, accounting for 66.65% of the 1.26 million bags bought in the first quarter of the year.

The NFA’s mission has been refocused away from imports to maintaining a buffer stock with purchases from domestic farmers, and its purchases reflect the attractiveness to farmers of its buying price.

Previously, the NFA price represented the floor of the market as the buyer of last resort, with private traders tending to corner the harvest.

As of April 2, El Niño crop damage mainly for rice and corn was estimated at P5.05 billion, on lost volume of 276,568 metric tons (MT) and affecting 177,743 hectares and 164,672 farmers.

Damage to rice was estimated at P2.69 billion on lost volume of 125,590 MT, affecting 111.851 hectares and 108,845 farmers. Damage to corn was reckoned at P2.36 billion on 150,978 MT of lost production, affecting 65,892 hectares and 55,827 farmers. — Vincent Mariel P. Galang

NGCP activates new facilities serving Bataan, Pampanga

THE NATIONAL GRID Corp. of the Philippines (NGCP) said it energized an expanded substation and transmission line in Bataan, ensuring more reliable transmission of power in the province.

The privately-owned grid operator said the facilities, which are components of the 230-kilovolt (kV) Bataan grid reinforcement project, include transmission line 3 for the Hermosa, Bataan combined cycle power plant, and its substation bay 81.

It said the facilities strengthened power transmission and the dispatch of the full capacity of existing and incoming generating plants.

“With the continuous load growth to service the rising demand for power in Luzon, particularly in Bataan and the nearby province of Pampanga, there is a need to increase the capacity of the existing 230-kV corridor to improve transmission services in the area,” the company said in a statement on Wednesday.

It said the energization of the Bataan 230kV grid reinforcement project allowed the system to meet demand and enabled the more stable and reliable power distribution to its customers.

NGCP, which is in charge of operating, maintaining, and developing the country’s power grid, said the project aims to accommodate the connection of the 600-megawatt coal-fired power plant in Limay, Bataan.

The project has an approved cost of P3.3 billion from the Energy Regulatory Commission (ERC). It is included in the list of energy projects of national significance (EPNS) in January 2019 of the Energy Investment Coordinating Council, which is led by the Department of Energy (DoE).

“This project will help address low voltage concerns in Luzon, if any, and improve the quality of power transmitted to distribution utilities, industries, and businesses which we serve in the area,” NGCP said.

NGCP said the project complies with the “N-1 standard” set by the Philippine Grid Code, which is the grid’s ability to withstand a major system disturbance with minimal disruption.

The other components of the Bataan 230-kV project, such as the Limay substation and San Rafael substation are up for completion by the third quarter of 2019, it said.

“We continue to appeal for the support and cooperation of the public, especially the local government units, to help us achieve our target energization for these projects which will greatly benefit our customers by ensuring the stable and uninterrupted transmission of power across the grid,” NGCP said.

NGCP, which is controlled by majority shareholders Henry T. Sy, Jr. and Robert G. Coyiuto, Jr., has 29 projects designated as EPNS by the DoE-led council.

In all, the projects have a total ERC-approved cost of P90.291 billion. They will enjoy a faster permitting process, including immediate and automatic approval of applications within five working days. — Victor V. Saulon

PCC seeking authorization to review completed mergers

THE PHILIPPINE Competition Commission (PCC) said it intends to form a task force that will look into previously-approved mergers and acquisitions to review how the deals developed amid fast-evolving regulations and industry structures.

PCC Chair Arsenio M. Balisacan said the proposal is being studied by the Office of the President as well as to the Department of Budget and Management.

It forms part of a broader proposal to seek a restructuring of the commission.

“We really need to do that because as you know we approved so many mergers. We need to also review what happened to these mergers and acquisitions,” Mr. Balisacan told BusinessWorld last month in Quezon City.

“It’s possible that policies have changed, regulations have changed and even the structure of the industries has changed. We need to see what happened to these,” he added.

The task force to review the progress of approved deals will be controlled by the PCC’s enforcement division.

The PCC was created by Republic Act 10667, or the Philippine Competition Act of 2015, to review mergers and acquisitions and ensure that such deals do not result in a substantial lessening of competition.

The PCC has the power to review completed deals on its own authority, or motu propio, if it finds evidence or reasonable ground that the deal, even if it falls below the notifiable threshold values, is anticompetitive.

The commission has conducted a motu proprio review on only one transaction so far: the Grab-Uber deal which resulted in Grab Holdings, Inc’s unit MyTaxi. PH Inc., taking a dominant position in the transport network vehicle services market, with the market power to raise prices and reduce the quality of its services.

To date, PCC has approved 169 out of 179 merger transactions by Filipino and international companies. The approved transactions are worth a combined P2.83 trillion. — Janina C. Lim

4 energy projects classified ‘of national significance’

By Victor V. Saulon, Sub-Editor

THREE hydroelectric power projects, including those of the Aboitiz group’s in north Luzon, and one wind farm have been certified as energy projects of national significance by the Department of Energy (DoE) this month.

DoE data show the addition of the SN Aboitiz group’s Olilicon hydropower project and Alimit pumped storage had secured the certification as of April 10, 2019, along with Rio Norte Hydro Corp.’s 19.7-megawatt (MW) Ilaguen 3A hydropower project and Rizal Wind Energy Corp.’s 600-MW Rizal wind power project.

SN Aboitiz Power (SNAP), a joint venture of Norway’s SN Power AS and Aboitiz Power Corp., is developing the hydroelectric power plant in Alimit, Ifugao province through SN Aboitiz Power-Ifugao, Inc.

The Alimit hydropower complex is composed of three facilities: the 250-MW Alimit pumped storage project, the 120-MW Alimit hydroelectric plant, and a 20-MW Olilicon hydro power plant, which would bring in a total 390MW of electricity to the grid and help in securing power supply. The proposed facilities are in the municipalities of Aguinaldo, Lagawe, Lamut and Mayoyao.

In an interview in October 2018, SNAP President and Chief Executive Officer Joseph S. Yu said the company’s application was submitted in late September, making it among the latest addition to the hundreds of applications so far received by the DoE since the President signed Executive Order 30 in June 2017.

EO 30 intends to establish a simplified approval process and harmonize the relevant rules and regulations of all government agencies involved in the permitting process.

SNAP was issued the renewable energy service contract for the project in 2014. The signed agreement brings the renewable energy company and Ifugao a step toward building the first hydro power facility in the province.

On Oct. 4, SNAP and the municipal governments of Aguinaldo, Lagawe, and Mayoyao signed a framework agreement on the proposed Alimit hydropower complex to be located in Ifugao province.

The agreement outlines the cooperation, collaboration and obligations between and among SNAP as project proponent and the municipalities as hosts during the development and operation phase of the project.

Rio Norte Hydro Corp., a subsidiary of Citicore Renewable Energy Corp., is developing its run-of-river hydro-power project in Brgy. San Miguel, Echague along the Ilaguen River.

The hydro project is expected to supply 85 million kilowatts of energy yearly to the cities of Cauayan and Santiago, and the municipalities of Alicia, Angadanan, Cabatuan, Cordon, Echague, Jones, Luna, Ramon, Reina Mercedes, San Agustin, San Guillermo, San Isidro and San Mateo.

Aside from lower power rates, the community is also expected to benefit from the project’s socioeconomic development and infrastructure programs.

Data on the Rizal wind warm are not readily available at the DoE except for its proponent, which is Rizal Wind Energy Corp.

Rockwell earnings jump 21% in 2018

ROCKWELL Land Corp. saw its earnings jump by a fifth last year, driven by higher leasing income from the Power Plant Mall’s expansion and sustained reservation sales for its residential projects.

The Lopez-led property developer reported its attributable net income rose 21% to P2.55 billion last year from P2.14 billion in 2017.

Consolidated revenues ended the year at P15.68 billion, up 9.7% from P14.30 billion in the previous year.

The residential development segment contributed 86% of Rockwell Land’s revenues. Residential sales increased by 7% to P13.4 billion last year was “largely influenced by higher construction accomplishment for Edades Suites and Rockwell Primaries’ The Vantage as well as higher bookings of 32 Sanson, Grove and Vantage.”

Reservation sales grew by 30% to P14.9 billion, thanks to Proscenium, Arton and Aruga Resort & Residences — Mactan, which was launched in 2018.

Rockwell Land’s commercial development segment saw revenues surge 40% to P2 billion last year.

“Leasing Income, which accounts for bulk of the segment revenues, grew from P1 billion to P1.5 billion due mainly from the mall expansion and RBC (Rockwell Business Center) Sheridan,” the company said.

Retail operations generated P1.2 billion in revenues, 26% higher than in 2017 as the Power Plant Mall in Makati City added 5,600 square meters of leasable space. Cinema operations posted P277.7 million in revenues as the company opened six new cinemas at the mall.

For the office leasing segment, Rockwell Land said revenues more than doubled to P451 million due to a higher demand for occupancy in RBC Sheridan and 8 Rockwell. The Rockwell-Meralco BPO venture likewise added P701.4 million, up 2% year on year.

Hotel operations fell 9.3% to P283.5 million, after Aruga at the Grove was shuttered in September 2017. Rockwell Land is building Aruga Hotels Makati, which is expected to open by 2020. The Aruga Resort Mactan, located in Punta Engano, Lapu-Lapu City in Cebu, is currently in the planning stages.

“The Company spent a total of P12.7 billion gross of VAT for project and capital expenditures in 2018. Bulk of the expenditures pertained to development costs of Proscenium, Aruga Hotel in Makati, Aruga Resort and Residences — Mactan and final payments for new retail and office projects in 2018,” Rockwell Land said.

Rockwell Land is a subsidiary of First Philippine Holdings Corp., which owns a 86.58% stake as of end-December 2018. — Denise A. Valdez

MacroAsia books P1-B profit

By Denise A. Valdez, Reporter

MacroAsia Corp. recorded a 3% increase in its bottom line, as elevated costs dampened the sustained revenue growth of its in-flight catering units.

The listed firm owned by tycoon Lucio C. Tan said its attributable net income stood at P1.05 billion in 2018, from P1.02 billion in the previous year.

Revenues were up 22.5% to P3.6 billion, but was outpaced by a 29% increase in total direct costs to P2.77 billion.

“The increase in the current period is due to the higher labor costs of our ground-handling and catering subsidiary, driven largely by increases in manpower count due to the growth in business volume…,” it said in a regulatory filing.

MacroAsia said its ground-handling business is preparing for the opening of Terminal 2 in the Cebu airport.

The company’s main source of revenues continued to be its in-flight catering services, accounting for 46% of the total. Revenues from in-flight catering grew 8% to P1.66 billion in 2018, driven by the larger volume of meals served to its airline clients. It served 3.6 million meals in 2018 versus 3.5 million in 2017.

The ground-handling and aviation segment added P1.46 billion to the total revenues, 42% higher than the P1.03 billion it recorded in 2017.

“The growth is due to continuous passenger and ramp services for the domestic and international flights of PAL and PAL Express,” it said, adding it took over the ground-handling services for new foreign clients last year increasing the number of flights handled by 30% to 120,862.

MacroAsia’s water business jumped 90% last year to P271.04 million, on the back of its acquisition of Summa Water Resources, Inc. and revenues from Naic Water Supply Corp. (NAWASCOR) and Solano Water.

“Management remains confident about the Group’s future and its ability to grow profits. (Lufthansa Technik Philippines, Inc.) stands to benefit from a robust growth in its line maintenance business, as the planes for servicing from its core client which stood at 61 aircrafts at the end of last year, has currently grown to 79 aircrafts as of the year ended,” MacroAsia said.

The company operates five subsidiaries namely: MacroAsia Catering Services, Inc. (MACS); MacroAsia Airport Services Corp. (MASCORP); MacroAsia Air Taxi Services, Inc. (MAATS); MacroAsia Properties Development Corp. (MAPDC); and MacroAsia Mining Corp. It also has two associated companies, Lufthansa Technik Philippines, Inc. — a joint venture with MacroAsia Corporation (LTP), and Cebu Pacific Catering Services, Inc (CPCS).

Shang Properties income falls

SHANG Properties, Inc. (SPI) reported a 10% drop in net income attributable to shareholders to P3.01 billion last year on lower condominium sales.

In a regulatory filing, the listed property developer saw a 15% decline in turnover to P12.65 billion in 2018 from P14.8 billion a year ago. Turnover consists of sales of condominium units, and revenues from rental, cinema and hotel operations.

Sales of residential condo units slumped 39% to P4.99 billion in 2018 from P8.192 billion in the previous year “due to fewer available units for sale due to completed projects.”

Revenue from commercial leasing and cinema operations rose by 2% to P2.961 billion to P3.017 billion in the same period as higher rental yields from The Enterprise Center in Makati City offset the losses from the seven-month closure of Shangri-La Plaza Mall cinemas for renovation.

Shangri-La at the Fort’s hotel operations generated P3.2 billion in revenues, versus last year’s P2.6 billion on higher occupancy.

SPI’s projects include The Shang Grand Tower Project and The Rise Makati — both in Makati City; and Shang Residences at Wack Wack in Mandaluyong City. — VMPG

ALI’s Cebu unit grows profit by 14%

CEBU Holdings, Inc. reported a 13.8% increase in net income attributable to equity holders of the parent firm to P857.11 million in 2018 from P753.45 million a year earlier as the property company reported a strong growth in revenues.

In its annual report submitted to the stock exchange, the company said it had maintained favorable revenue growth at 20.4% to P3.72 billion from P3.09 billion in 2017. Net income reached P970.03 million, higher by 19.3% from P813 million previously.

“The bulk of the increase in revenues was primarily contributed by sale of commercial lots at Seagrove Estate, higher leasing income from office buildings, higher interest [and] other income and equity in net earnings from affiliates. The company’s other revenue contributors include leasing income from the mall, sale of residential lots at Amara, and sale of condominium units [and] club shares,” the company said.

Cebu Holdings, a 70.43%-owned subsidiary of Ayala Land, Inc., is engaged in subleasing of commercial spaces, food courts and entertainment facilities through subsidiary Cebu Leisure Co., Inc.

Cebu Leisure’s total revenue of P192.1 million was 4% lower than the same period in 2017 while net operating income stood at P64 million, the firm said.

Cebu Holdings’s operations consist of six types of activities, including strategic land management, mixed-use development, real estate business, commercial business operations and management, hotel development and operations, and proprietary sports club shares sales.

The holding firm owns and manages the Cebu Business Park, a 50-hectare business and commercial subdivision in Cebu City. The business park is the single largest operating IT economic zone in southern Philippines.

Cebu Business Park has 40 buildings in it, and has 10 ongoing constructions. Locators include Ayala Center Cebu, the shopping and lifestyle destination of the region.

The firm said Ayala Center Cebu recorded total revenue of P1.30 billion, 4% lower compared with the same period last year. It posted a net operating income of P 571 million.

The center’s overall gross sales performance of P7.6 billion for the period was 32% lower than the earlier year. It ended the fourth quarter with an occupancy of 96% and a lease out rate of 98%.

“The mall closed for twelve days due to the fire incident at Metro Gaisano last January 05, 2018 which resulted to the decrease in sales,” it said.

On Wednesday, shares in the company were up 2.52% at P6.50 each. — Victor V. Saulon

Yields on one-week term deposits drop

YIELDS on the one-week term deposits eased on Wednesday as the central bank lowered the volume of its facility to a record low.

Tenders for the term deposit facility (TDF) amounted to P30.15 billion on Wednesday, much lower than P50.321 billion in tenders received a week ago but more than thrice the P10 billion the Bangko Sentral ng Pilipinas (BSP) placed on the auction block.

Still, the decline in bids came as the TDF auction volume was cut to the lowest on record, with the BSP not offering 14- and 28-day papers this week.

Compared with the total tenders for the seven-day tenor last week, demand climbed a tad from April 10’s P29.696 billion.

Banks sought lower returns for the seven-day term deposits, with accepted yields ranging between 4.75% and 4.8% from the previous week’s 4.85-4.97% spread.

This led to an average rate of 4.7764%, lower than 4.8943% fetched in the previous TDF offering.

The TDF stands as the central bank’s primary tool to shore up excess funds in the financial system and to better guide market interest rates. Through the weekly auctions, the BSP wants to bring loan and interbank rates within their desired 4.25-5.25% range.

BSP Deputy Governor Diwa C. Guinigundo has repeatedly stressed that any perceived tightness in money supply is “temporary,” as financial firms continue to sit on piles of cash largely from deposits.

Next week, the central bank will offer eight- and 14-day term deposits worth P10 billion each.

“Offered tenors were adjusted in view of the regular public holidays on May 1 and June 12 which fall on a Wednesday,” the central bank said. — Karl Angelo N. Vidal

Risks to inflation “evenly balanced”

INFLATION RISKS are seen “evenly balanced” this year, even with the rise in prices expected to settle firmly within the government’s target, the Bangko Sentral ng Pilipinas (BSP) said.

“The risks to future inflation were seen to remain evenly balanced for 2019 while downside risks to the outlook were projected to dominate in 2020,” read the minutes of the central bank’s policy meeting held March 21, which were released on Wednesday.

The BSP said among the main upside risks to inflation for this year are pending petitions for electricity rates and fare adjustments, as well as proposed excise taxes levied on alcohol beverages.

The potential impact of a weak El Niño could also stoke inflation, the central bank said, as it “could lead to droughts in the first semester of 2019 and subsequently affect domestic production of rice and other agricultural commodities.”

“The onset of the El Niño phenomenon presents a potential upside risk to food inflation in the near term,” it said.

“Meanwhile, slower global economic growth due to protectionist policies in advanced economies as well as geopolitical tensions and the potential renegotiation for lower tariff rates on meat products continue to be the main downside risks to inflation,” the BSP added.

At its March 21 meeting, the BSP’s policy-setting Monetary Board voted to keep benchmark interest rates unchanged, citing the need to stay cautious given risks to economic growth even as inflation is steadily dropping.

Policy rates were kept within the 4.25-5.25% range, with the key rate of 4.75% still at a decade-high.

During that review, the central bank trimmed its 2019 inflation forecast to three percent from 3.1% previously on the back of the lower-than-expected February print and with the downward path seen to continue for the rest of the year. Meanwhile, the 2020 forecast was kept at three percent. Both are well within the BSP’s 2-4% full-year target range.

Headline inflation eased for the fifth straight month in March to 3.3% — the slowest since January 2018’s 3.4%. This is slower than the 3.8% print in February and 4.3% in the same month last year.

Year-to-date, inflation averaged at 3.8%, within the BSP’s target range for 2019. The BSP’s next rate-setting review is on May 9. — RJNI

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