Facebook Instagram Linkedin X Youtube
Home Blog Page 9811

Government spending to soften virus blow — analysts

By Luz Wendy T. Noble
Reporter

HIGHER government spending will probably cushion the effects of a deadly coronavirus outbreak on the Philippine economy, according to analysts.

Improved tax collection would also keep the budget deficit in check and maintain debt levels low amid an outbreak that has killed about 3,000 and sickened 88,000 more, mostly in China, they said.

“The pickup in infrastructure spending in (December) 2019, after a slow start at the beginning of the year suggests strong government commitment towards meeting its infrastructure targets,” Sagarika Chandra, associate director at Fitch Ratings’ Asia-Pacific Sovereigns team, said in an e-mailed reply to questions.

“If the strong pace of infrastructure spending is maintained this year, it would bode well for growth,” she added.

State expenditures in December surged by 57.83% to a record P494.4 billion, while revenue grew by 4.77% to P243.3 billion, according to the Bureau of the Treasury data.

The budget deficit widened to a record P660.2 billion in 2019 as a result of the government spending mainly for infrastructure projects and social protection programs.

The full-year budget gap breached the P620-billion deficit programmed for the year, and was 18.27% higher than the deficit in 2018. The deficit was 3.55% of the gross domestic product (GDP), exceeding the 3.25% limit for the year.

“The unexpectedly large rise in government spending at the end of 2019 provides some comfort that fiscal expenditure can provide a buffer against the negative impact of the coronavirus outbreak on exports, tourism and other sectors of the Philippine economy,” Christian de Guzman, senior vice-president of Sovereign Risk Group at Moody’s Investor Service said in an e-mail last week.

“At the same time, an increase in revenue on the back of higher taxes effective at the beginning of the year helps to ensure that deficits will not widen more significantly, keeping debt levels in check,” he added.

The government collected P2.827 trillion in taxes last year, missing its P2.955-trillion goal. It seeks to collect P3.3 trillion this year.

Socioeconomic Planning Secretary Ernesto M. Pernia on Monday said the budget deficit was likely to settle at 3.5% of GDP this year, adding that “we have to borrow more to accommodate it.”

He added that higher state spending this year could offset the effects of the coronavirus disease 2019 (COVID-19) outbreak on the economy “to some extent.”

The outbreak could dent growth in the next two quarters by an average 0.3 percentage point, the central bank said last month.

Bangko Sentral ng Pilipinas would be re-assessing the impact of the virus as it spreads to more countries outside China including Italy, South Korea and Iran, Governor Benjamin E. Diokno said last week.

The National Economic and Development Authority last month said the tourism sector could lose about P22.7 billion in monthly revenue because of the outbreak.

The Tourism department had estimated P42.9 billion in losses from February to April as flights got canceled and events were postponed.

The government eyes growth of 6.5-7.5% this year after a 5.9% economic expansion last year.

NEDA: Virus fallout could shave 1-pct point off GDP growth

SOCIOECONOMIC Secretary Ernesto M. Pernia on Monday said the economy could take an even bigger hit if the coronavirus disease 2019 (COVID-19) outbreak persists until yearend, estimating a one-percentage point reduction in 2020 gross domestic product (GDP) growth.

On Monday, Mr. Pernia told reporters that the National Economic and Development Authority (NEDA) revised the preliminary estimates of the COVID-19 outbreak’s impact on the economy. Earlier this month, NEDA said it estimated a 0.7 percentage point loss in GDP growth if the outbreak continues until end-2020.

The NEDA chief said the assessments were made based on a scenario where inbound Chinese tourists will be cut by 100% and foreign tourist arrivals will be reduced by 10%, while trade will be “drastically reduced.”

“The impact of travel and tourism as well as trade, assuming that travel and tourism will go down to zero from China and 10% reduction from other countries, and trade will also be drastically reduced, our preliminary estimate is that, just the direct effect, 0.3 percentage point to one (percentage point)… of percentage point of GDP growth,” Mr. Pernia said on the sidelines of an event in Pasay City on Monday.

“That’s direct effect eh, we haven’t taken into account the indirect effect and the multiplier effects, maraming (there are many) multiplier eh, that could still go up.”

NEDA earlier estimated that 0.3% could be shaved off GDP growth this year if the COVID-19 outbreak lasts until June. This only took into account the impact on travel and tourism sector, not the effect on imports and export.

Mr. Pernia said the Development Budget Coordination Committee (DBCC) will meet “soon” to review its macroeconomic assumptions and projections.

The Philippine government is targeting 6.5-7.5% GDP growth this year.

To offset the negative impact of COVID-19, the NEDA chief said the government could increase its spending and accommodate a wider deficit of 3.3-3.5% of GDP.

Asked if higher state spending can offset the negative impact of the virus to the economy, Mr. Pernia said: “To some extent but not entirely.”

To accommodate wider deficit, the government will have to borrow more to offset possible lower revenue collections due to the impact of the virus.

“Our revenue from (the Bureau of) Customs will also go down so we will have less fiscal space to help. Well, I don’t know how it’s going to be done when it comes to cash transfers. Mahirap ang cash transfers (cash transfers are difficult). We will try to scale up domestic tourism (since it) has a higher impact,” Mr. Pernia said when asked on possible plans to help affected sector.

Meanwhile, Philippine National Bank’s (PNB) research unit said the Philippines could suffer a “modest losses” worth $12.2 billion or equivalent to two percent of total production in 2017 due to disruptions in global supply chains by the COVID-19.

“Using production data from the ADB’s input-output tables (2017), we estimate a potential, annual production (not value added) loss of $12.2 billion (2% of 2017 production) assuming we miss out on 100% of China imports (non-oil) and limited substitutes are found,” PNB Research said in a report released on Monday.

PNB Research said the estimated opportunity loss is “modest” and could be offset once COVID-19 abates.

“Unlike a negative shock due to natural disasters, recovery from COVID-19 downside risks does not require infrastructure repair nor capacity restoration,” it added.

PNB Research slashed its growth outlook for the economy this year to 6.2-6.4%, from the 6.6% projection it gave before the COVID-19 outbreak started. — Beatrice M. Laforga

BSP chief not ‘totally’ ruling out another rate cut

BANGKO SENTRAL ng Pilipinas Governor Benjamin E. Diokno said it may be more apt to push for fiscal stimulus rather than monetary easing as the government looks to shield the country against the economic fallout from the spread of the coronavirus disease 2019 (COVID-19), even as he said a policy rate cut may still be on the table this year.

“At this time, maybe the fiscal stimulus is much more effective than monetary stimulus. Kasi if you’re going to stay at home…then you’re not going to spend money, wala masyadong stimulus d’un (Because if you’re staying at home, then you’re not going to spend money. There will be no stimulus from that end),” Mr. Diokno told reporters on the sidelines of his book launch held in Pasay City on Monday.

“On the other hand if…we accelerate the Build, Build, Build program, mas effective ’yun (it will be more effective) to address the slowdown,” he said.

The government targets gross domestic product (GDP) growth of 6.5-7.5% this year, coming from a 5.9% expansion in 2019 which fell short of the minimum six percent goal.

Economic managers have said GDP growth could take a hit from the virus, with the extent of the impact dependent on how long the outbreak persists.

Despite this, Mr. Diokno said another 25-basis-point (bp) cut is still on the table for the year, adding that they will assess anew the impact of the virus on the economy during the Monetary Board’s policy-setting meeting on March 19.

Amid the continued spread of the COVID-19, Mr. Diokno said that they are not “totally ruling out” another cut, but this will depend on their assessment of risks from the virus outbreak.

“The 50 [bps] that I promised last year, we’re done with 25 [bps]. That’s still on the table. And we’re going to meet on March 19. So we’ll see what’s happening,” Mr. Diokno said.

The BSP chief said in December that the BSP is looking to cut rates by 50 bps this year as they continue to unwind the 175 bps in hikes done in 2018 amid rising inflation.

The Monetary Board on Feb. 6 already cut rates by 25 bps as a “preemptive move” as COVID-19 caused fears of a possible economic slowdown in financial markets. This followed the 75 bps worth of cuts done in 2019.

The rates on the BSP’s reverse repurchase, overnight lending and deposit facilities now stand at 3.75%, 4.25%, and 3.25%, respectively.

Mr. Diokno previously said the country has enough fiscal and monetary space, which will allow the government to help soften the blow from the spread of COVID-19.

“To me there are many other things that we can do, like maybe yung (reforms on) ease of doing business… [Those are] the things we need to do with or without the COVID-19 virus,” he said on Monday.

“Let’s do it now habang (while) the whole world is in shambles so that, as I said, when things recover, then we will be stronger,” Mr. Diokno added. — L.W.T. Noble

Virus spurs rise in online English classes

By Jenina P. Ibañez, Reporter

THE online English education industry is experiencing increased demand as students in China stay home due to the new coronavirus disease COVID-19 epidemic.

51Talk, a Beijing-based education platform that works with more than 20,000 Filipino teachers, has seen teaching hours doubled since February.

51Talk Philippine Country Head Jennifer K. Que told BusinessWorld in a phone interview on Friday that teachers now do more than 30 of the 25-minute English lessons for a month, from 15 previously.

“Due to the situation in China most of the students are at home and our students are kids, majority are kids,” she said.

Reports say that Chinese schools have closed, leaving 180 million students studying from home.

Ms. Que said the increased demand did not cause stronger demand for Filipino teachers, as the platform already looks for 2,000 more teachers each month.

51Talk teachers have reported fearing for their students.

“’Yung isang nakakalungkot (A sad part is), these students would say: ‘teacher, now you see me, if you don’t see me again…’” Ms. Que said.

But she said the teachers are also relieved that the students are safer at home.

“They don’t have school right now so the parents are encouraging them to be also productive and our teachers are providing the fun and fruitful distractions to them.”

Ms. Que said the online platform allowed them to adapt quickly.

“As a platform, we learned that things can change abruptly and you have to be adaptable.”

The online nature of the service, she said, means that disasters impacting Internet connection and power could slow down the business.

She added that 51Talk would continue investing in its platform, including materials and teacher training.

51Talk, however, has not invested in psychological support for teachers who have been working with students amid the epidemic.

“I don’t think there’s an intense need for any psychological support right now,” Ms. Que said.

Confirmed infections from COVID-19 has reached more than 80,000 globally, most of which are in China.

51Talk is listed in the New York Stock Exchange under China Online Education Group (COE).

Shares in COE reached a 52-week high of $37.19 on Feb. 27.

More hotels cut rates amid virus

By Arjay L. Balinbin, Reporter

ANGELES CITY, PAMPANGA — More hotels have committed to offer as much as 50% off on their published room rates to help boost domestic tourism amid the coronavirus outbreak, the Tourism Congress of the Philippines said.

Tourism Congress of the Philippines President Jose C. Clemente III said at least 35 properties have joined the domestic tourism fund program that was launched recently to help boost domestic tourism amid the ongoing coronavirus outbreak that has forced the Philippine government to impose a travel ban on China, Hong Kong, Macau and parts of South Korea.

“Out of the 35 hotels, I would say 80% of them offered the 50% discount,” Mr. Clemente told reporters on Friday last week on the sidelines of the AirAsia 2nd Business Assembly held in Angeles City, Pampanga.

The purpose of the domestic tourism fund program, he said, is to convince all hotels in the Philippines to offer discounted rates for as much as 50%.

“What it does basically is we ask hotels around the country to give special rates to customers. We were asking as much as 50% off their published rates,” he said.

“Our intent really is to give the lowest possible rates that we can. It’s for the domestic market. So far, we have about 35 properties that have joined, and then tuloy-tuloy pa rin (more hotels are joining). We are still gathering rates now from other hotels,” he said.

Mr. Clemente, who is also president of Rajah Tours Philippines, Inc., said the special rates being offered by such hotels will be valid until the last day of August this year.

He added that Rajah Tours itself is feeling the brunt of the coronavirus crisis.

“To tell you the truth, we are still in the hemorrhage mode. We are still doing damage control. We are trying to hold on to whatever bookings we had that were done before the coronavirus outbreak. We are doing our part to convince our market to continue coming,” Mr. Clemente said, noting that tourists from Europe and North America are still visiting the country.

The most affected local travel companies, he said, are Chinese and Korean tour operators as they put all their eggs in one basket.

He said local hotels should join the domestic tourism fund program as it will help them keep their businesses profitable in the current situation.

“What will they lose? Anyway, the international market is sort of staying away for now, so what do they have to lose? They have everything to gain and almost nothing to lose except for their margins,” he explained.

Tourism Secretary Bernadette Fatima T. Romulo-Puyat has said the industry could lose P42.9 billion from February to April — P16.8 billion in February, P14.11 billion in March and P11.98 billion in April.

The government wants Filipinos to visit local spots in the face of an international tourism decline because of the outbreak.

The Philippines has confirmed three novel coronavirus cases, all involving Chinese nationals from Wuhan City in China where the virus was first detected. Two of the patients have recovered and one has died, according to the local Health department.

There were 85,403 confirmed global cases of the deadly disease as of Feb. 29, according to World Health Organization data.

More than 79,000 of those cases were from China, followed by South Korea with 3,150 cases and Italy with 888.

Architects’ group wants stricter issuance of building permits

By Bjorn Biel M. Beltran
Special Features Writer

THE United Architects of the Philippines (UAP) reiterated the need for more stringent procedures in the issuance of building and construction permits, particularly in the implementation of ancillary architectural permits as mentioned in the National Building Code of the Philippines.

During a forum with the media on Feb. 18, UAP President Benjamin Panganiban, Jr. said the strict issuance of permits will discourage illegal, unlicensed practitioners from preparing and sealing architectural plans, specifications and other documents.

“It is imperative to have the right professionals who will sign those permits,” he told the press, noting that non-architects pose a significant risk to the public’s safety.

“No other technical allied profession comes close to the learnings and knowledge of the architects. These structures should be developed by the right professionals who are licensed and registered [by the government],” he added.

By implementing concrete measures against illegal practitioners, Mr. Panganiban said there would be more accountability in cases of misfortune, as there are legal protocols in place for identifying those who should be liable in case of a building’s collapse.

“Many people think that being an architect is just about being good at drawing, but it’s more than that,” UAP Secretary General Ronnie Yumang told the media.

“Most people ask an architecture student to draw for them, and then they build their homes using that drawing without seeking the professional expertise of a licensed architect and this puts the safety of people at risk.”

The call is in line with the UAP’s #GetAnArchitect advocacy campaign, which seeks to develop a variety of initiatives to promote architecture as a profession, highlight its spirit in an informative way, and encourage the public to advocate for safer, healthier, accessible homes, businesses, and communities.

Mr. Panganiban said the #GetAnArchitect campaign came into fruition as they looked for opportunities to engage and communicate with the public and stakeholders how architects “work with them, design solutions, transform communities, and strengthen society.”

Meanwhile, the UAP announced its plans for UAP Construction Expo 2020 (CONEX), which aims to gather the country’s construction industry sectors to demonstrate state of the art products and to promote new technologies, equipment, and materials to the Philippine market.

To be held on April 23 to 25 at the SMX Convention Center, the convention will be centered on the theme of “fusion.”

SM Prime sets rates for initial tranche of P100B bond offering

SM Prime Holdings Inc. has set interest rates for the initial tranche of the P100 billion shelf registration approved by the Securities and Exchange Commission (SEC).

The approved shelf registration will be offered for a period of three years.

In a statement on Monday, the listed company said the first tranche will consist of peso-denominated Series K and L, 5-year and 7-year fixed rate bonds. The initial offering is P15 billion, with the option to issue additional amounts up to P5 billion.

The interest rates for the Series K and Series L bonds have been set at 4.8643% per annum and 5.0583% per annum, respectively. The bonds are set to be issued on March 25.

“SM Prime is set to establish further integrated property developments in various developing provincial cities in the Philippines. The proceeds from the retail bond will enable the Company to pursue it expansions plans for its core businesses, primarily of its malls projects, which is one of the main growth drivers of the Company,” SM Prime President Jeffrey C. Lim said.

The SM Prime bonds are due in 2025 and 2027. The offering is the company’s seventh peso-denominated retail bonds to the public.

In an earlier statement, the SEC said SM Prime was expected to net P14.79 billion from the issuance, and an added P4.94 billion if the oversubscription option is used.

The Philippine Rating Services Corporation (Philratings) has given the SM Prime’s Series K and L bonds its highest rating of PRS Aaa.

“This rating is given to long-term debt securities with the smallest degree of investment risk. This also indicates SM Prime’s strong capability to meet its financial commitment,” SM Prime’s statement said.

BDO Capital & Investment Corp. and China Bank Capital Corp. were tapped to be the bonds’ joint issue managers.

They also serve as joint lead underwriters and joint bookrunners, along with BPI Capital Corp., EastWest Banking Corp., First Metro Investment Corp., RCBC Capital Corp. and SB Capital Investment Corp.

SM Prime Holdings, Inc.’s earnings for 2019 rose 18% to P38.1 billion after the growth of its mall and residential network nationwide. — Jenina P. Ibañez

Gov’t upsizes Treasury bill award as rates decline amid virus fears

THE GOVERNMENT upsized the volume of Treasury bills (T-bills) it awarded on Monday as rates mostly continued to decline on investors’ continued flight to safe-haven assets.

The Bureau of the Treasury (BTr) raised P23.2 billion of T-bills yesterday, P3.2 billion bigger than its initial offer of P20 billion as the short-term papers attracted bids worth P60.4 billion.

Broken down, the BTr fully awarded P6 billion in 91-day T-bills out of total tenders worth P12.813 billion. The average rate for three-month papers moved sideways, inching up by one basis point (bp) to 3.013% from 3.003% fetched in the auction last week.

Another P6 billion was raised as planned via the 182-day papers with bids totaling P14.498 billion. The papers were awarded at an average rate of 3.324%, down by 4.1 bps from the previous week’s yield of 3.365%.

For the 364-day T-bills, the BTr upsized the award to P11.2 billion from the original P8-billion program as total tenders for the tenor reached P33.06 billion. The one-year securities fetched a lower average rate of 3.684% against the 3.787% quoted previously.

Prior to the auction, the 91-, 182- and 364-day T-bills fetched rates of 3.093%, 3.402% and 3.777%, respectively at the secondary market on Monday.

National Treasurer Rosalia V. de Leon said the lower rates for the T-bills were due to the rising concerns over the impact of the coronavirus disease 2019 (COVID-19) as well as hints of further monetary policy easing from the central bank.

“The narrative continues: because of the lingering adverse impact of the virus outbreak. And then of course we also have the assurance of the BSP (Bangko Sentral ng Pilipinas) Governor that the policy easing will continue to be able to support and stimulate the economy,” Ms. De Leon told reporters after the auction.

BSP Governor Benjamin E. Diokno said last week that another 25-bp rate cut is possible this year and that he will not “rule out” cuts worth 50-75 bps as the government seeks to cushion the economy from the adverse impact of the COVID-19 outbreak.

The Monetary Board on Feb. 6 trimmed key policy rates by 25 bps, bringing the rate on the BSP’s reverse repurchase, overnight deposit and lending facilities to 3.75%, 3.25% and 4.25%, respectively.

“All these also provided the push to the market in terms of the monetary stance continue to be very accommodating. And there’s still enough liquidity. Of course, everything is still on a wait and see mode also on the impact now that the effect of coronavirus continues to even expand now,” Ms. De Leon said.

Meanwhile, she said they decided to accept more than what was planned for the one-year papers to accommodate lower rates and strong demand, as the tenor was almost four times oversubscribed.

“Under our guidelines we can double it kasi (because) four times ’yung…ng non-competitive (bids) eh. So we accepted, basically because it is also lower than the current rates,” she said.

Sought for comment, a bond trader said the lower rates were within market expectations.

“For the lower rates, one is tracking the movement of global yields na (which are) lower because of generally risk-off sentiment due to the coronavirus,” the trader said via telephone.

Reuters reported that rising concerns on the COVID-19 outbreak drove rates on US government bonds to record lows.

The virus has killed more than 2,900 and infected over 85,000 people across the globe, with majority of which in China.

The World Health Organization recently placed the risk and impact of the new disease, which has yet to have an antidote or vaccine, at a “very high” global level

Today, the Treasury will offer P30 billion via five-year Treasury bonds (T-bonds) with a remaining life of four years and seven months.

“We still that market continues to be liquid and we also expect (lower) rates even for tomorrow’s auction would possible…than the secondary trading levels,” Ms. De Leon said.

She added that the BTr is still monitoring other markets for possible offshore issuances to see if there is still appetite since the virus outbreak has caused risk-off sentiment.

The Treasury has set a P420-billion local borrowing program this quarter, broken down into P240 billion in T-bills and P180 billion via T-bonds.

The government plans to raise P1.4 trillion this year from local and foreign lenders to plug its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Beatrice M. Laforga with Reuters

Reality show merges travel, love

DATING CAN be a daunting proposition for many people but not for the people who are in Travel for Love, a reality lifestyle show from TLC Southeast Asia, featuring five “hopefuls” who will try and find love while travelling through the region.

The show, which airs on Fridays until April 17, follows self-professed Filipina “island girl” Samantha who flies to Kuala Lumpur for a change of scenery, while Parisian fashion designer Honey flies to Bohol for an island adventure.

Also part of the show is Violet Lim, founder of Lunch Actually, a 16-year-old dating service which started in Singapore and aims to deal with the complexity in finding love.

“I found Samantha very attractive because she’s a confident woman who is not afraid to speak her mind. She is also very family-oriented, which is a trait that Asians tend to look out for,” Ms. Lim told BusinessWorld in an e-mail interview. (See related story)

As a woman whose company has arranged dates for more than 120,000 people, Ms. Lim said that she had a lot of fun being part of the show and seeing the cast make connections and dates.

“I do realize as I’m watching the show is that, on dates, people may do or say certain things that, as a pure third party, we would be wondering ‘huh? Why did he/she do or say that? Or even like, oh, they shouldn’t have done that!’ But I think — what we see for our own clients as well — sometimes they don’t realize they’re doing it. And that’s why date coaching is very valuable as well, because just by having a neutral party point it out, and help them make small tweaks, it can make a huge difference,” she said.

Beyond the show, Ms. Lim pointed out that “every generation has their own challenge when it comes to finding a long-lasting and meaningful relationship.”

“In the past, it might be the challenge of choosing your own partner as your parents insist on an arranged marriage, or, just a decade ago, it would be the opportunity to meet up with enough people. Today, with dating apps, it is no longer difficult to meet up with many potential candidates. The challenge is choosing the right one. And some are also reluctant to settle down and choose when there are so many more choices out there,” she said.

“My advice for singles is — know who you are, love yourself first, know what makes you happy. Do not look for love in search of finding someone who will complete you. You need to be complete first. When you are comfortable in your own skin and you know what you want, it is much easier to know who the right fit is when he or she comes along,” she added.

Travel for Love airs every Friday at 9:25 p.m. until April 17 on TLC (Sky Cable CH 32/Cignal TV CH 64/Destiny Cable CH 62 ). Visit the TLC Facebook page for more information and content. — Z.B. Chua

Euro Towers’ Vivaldi Davao ready for turnover by Q4

DAVAO CITY — Euro Towers International, Inc. is in the finishing stage for its first condominium project here and is eyeing to start the turnover of units by the fourth quarter.

Grade T. de Leon, Vivaldi Residences Davao head of sales, told media after a walk-through of the project Friday that the building is structurally 100% complete.

The 36-storey Vivaldi Residences Davao, the company’s first venture outside Metro Manila, has a combined 883 units of studio, one bedroom, and two bedrooms.

“The start of physical turnover to the buyers is by batches. Usually we turn over the lowest floor and we go up,” she said.

The project is about 80% taken, Ms. De Leon said, and they are aiming to have the remaining residential units as well as parking lots and storage units sold by the end of the year.

“We have a mixed market. They are not just end-users but also investors. We have international clients as well. Among the common reasons for investing is we are very near the Ateneo de Davao University,” she said.

Currently the highest building in the city, Ms. De Leon said Vivaldi Residences has been certified by third party consultants as structurally stable after the series of earthquakes in Mindanao last year.

The company said Vivaldi Residences could withstand earthquakes with magnitude 7 to 8.4 as the structural designers computed for safety factors that are higher than the standards set under the National Structural Code of the Philippines.

“Every earthquake, our structural engineers do inspections and they certified us. If there are cracks, those were only hairline cracks and in terms of structural, we don’t have major damages,” Ms. De Leon said. — Maya M. Padillo

SC ‘sticks to facts’ in Iloilo utility dispute

THE Supreme Court (SC) maintained that it sticks to the facts and the law in coming up with a decision, following a call of a congressman to President Rodrigo R. Duterte to intervene in the case between the Razon-led MORE Power and Electric Corp. and Panay Electric Co. (PECO).

Abang-Lingkod Partylist Rep. Joseph Stephen S. Paduano on Sunday claimed that the High Court is biased to MORE after judges inhibited in the case in the lower court.

SC Public Information Chief Brian Keith F. Hosaka noted that the voting at the Supreme Court is based on the majority votes of the members of the en banc or of a division.

“As I said before in previous interviews, decisions of the Supreme Court are always founded on facts, applicable laws, and current jurisprudence,” he told reporters in a mobile-phone message.

“That is how the Supreme Court acts as mandated by our Constitution, and that is why it will always be objective and independent. In the meantime, let us wait for the final resolution of the pending cases,” Mr. Hosaka added.

Mr. Paduano cited the “unusual inhibitions” by four trial court judges handling the expropriation case.

MORE on Friday started taking over PECO’s assets after the decision of Judge Emerald Requina-Contreras of Regional Trial Court Branch 23.

PECO legal counsel Estrella C. Elamparo, on the other hand, claimed that the takeover was “highly irregularly” due to the pending case at the Supreme Court questioning the constitutionality of some provisions in the franchise or MORE.

MORE was granted franchise to supply power to Iloilo City, which was served by PECO for 95 years. PECO’s last franchise for 25 years was granted in 1994. — Vann Marlo M. Villegas

Consunjis’ Semirara business reports 21% slump in income

CONSUNJI-LED Semirara Mining and Power Corp. (SMPC) reported a 20.7% decrease in income last year to P9.6 billion after its coal business segment recorded a profit decline while one of its power plants recorded lower sales.

In a disclosure to the stock exchange, the integrated energy company said its coal output hit a record high of 15.2 million metric tons (MT) last year after registering a 17% growth.

“The record high production is a combination of higher capacities and good weather condition in the current year,” said SMPC, the vertically integrated power producer that mines its own fuel source, allowing it to generate affordable baseload power.

Coal sales also reached record at 15.6 million MT, up 35% from the previous year. Of last year’s coal sales, 34% were sold to domestic users while 66% are sold overseas.

The company said the decline in domestic sales was largely because of the low off-take of its own power units, namely units 1 and 2 of Sem-Calaca Power Corp. (SCPC), which embarked on a “life-extension” program.

“The depressed coal prices brought down average selling price per MT by 22%. The negative impact of the decline in coal prices was mitigated by the record high coal shipment performance,” the company said.

Gross coal revenue rose by 5% to P32.3 billion, although the coal business segment booked lower profits of P7.4 billion, or down by 23%.

Meanwhile, SCPC registered a 54% decline in gross generation to 1,519 gigawatt-hours (GWh) after its two power generation units underwent a life extension program last year.

Unit 1 was shut down on Dec. 30, 2018 and was back online in September 2019. Unit 2 was shut down in October 2019 to give way for its life-extension program, although even when it was operating, its load was de-rated to 200 megawatts (MW) because of condenser issues.

As a result, SCPC’s sales volume fell by 45% to 1,848 GWh. Last year’s composite average price of energy sold went down by 8%, contributing to the 51% decrease in gross energy sales to P7 billion.

Meanwhile, Southwest Luzon Power Generation Corp. (SLPGC) recorded a 51% rise in gross generation to 2,070 GWh. Its plant availability last year was at 83% with a combined average load of 286 MW.

SLPGC’s two units registered an improvement in its capacity factor at 52% last year. In 2018, its unit 1 was shut down because of an accident that resulted in a crack in the rotor starting March 6. During that year, it was down for around six months.

The unit went back to normal operation on the last week of September 2018, after a successful repair of the rotor.

“The insurance claim for material damage and business interruption was already fully paid in 2019,” SMPC said.

Around 76% of the plant’s saleable energy was traded at the spot market as its power supply agreements expired in 2018. SLPGC benefited from the higher market prices last year.

Volume of energy sold went up by 45% to 1,854 GWh, while gross energy revenue climbed by 61% to P8.1 billion with the “significant increase” in volume sold and higher prices at the wholesale electricity spot market.

SCPC core profits fell 161% to negative P758 million. In contrast, SLPGC’s core profits jumped by 182% to P2.8 billion.

Net of eliminations, the business segments coal, SCPC and SLPGC contributed P6.2 billion, P58.9 million and P3.5 billion, respectively, in 2019.

1...9,8109,8119,812...14,244Page 9,811 of 14,244
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube