Developments in actualizing the country’s future electric power sector masterplan

January 24, 2020 | 9:00 am

Last year, several yellow alerts and occasional red alerts were issued in the Luzon grid, causing unexpected shutdown of power plants and eventually great inconvenience in home and lost revenue in businesses. These alarming occurrences, along with several households still found to lack access to electricity, makes power shortage an issue that should be seriously dealt with.

The Department of Energy (DoE) back in 2016 formed a blueprint for the future of the country’s electric power industry through the Power Development Plan (PDP). With an outlook stretching as far as 2040, the PDP projects the demand and supply requirements in the Luzon, Visayas, and Mindanao grids. Moreover, it lays out the power sector roadmaps encompassing the generation, transmission, distribution, and supply subsectors, together with market development and institutional support mechanisms. It also has electrification road maps to increase energy access down to households, off-grid and missionary areas.

Years after the plan was set, how far has the department reached? The DoE’s latest annual report gives some indications on the progress of fulfilling its PDP.

One of the pursuits of the PDP, specifically in the subsector of generation, is to facilitate the declaration of power projects as Energy Projects of National Significance (EPNS). In 2017, a year after the PDP was set in place, Executive Order No. 30 was signed by President Rodrigo Duterte. The order has streamlined regulatory procedures that affect the timely implementation of energy projects.

Since EO 3O was issued, more than a hundred projects have been certified as EPNS. This includes the P52-billion Mindanao-Visayas Interconnection Project, which was the first project to be granted this approval. Among the projects plotted in the department’s Transmission Master Plan, DoE considers this as one of the country’s priority projects in terms of transmission infrastructure development. It is targeted to be completed by December this year by the National Grid Corporation of the Philippines.

In a BusinessWorld report published last year, the DoE said it had issued EPNS certificates to 140 projects as of mid-August 2019, the latest of which include a geothermal project, a hybrid power facility, a geothermal brine optimization plant, and an exploration field.

In terms of building resilient energy infrastructure and securing such facilities in times of emergencies and disaster, the DoE has aptly complied with the issuance of the Energy Resiliency Policy (ERP).

“The ERP aims to strengthen existing infrastructure facilities, incorporate mitigation improvements into their reconstruction and rehabilitation plans, improve operational and maintenance standards and practices, and develop resiliency standards,” read the DoE’s report.

The Task Force on Energy Resiliency (TFER) handles the enforcement of the ERP. As of its 2018 report, it has received 124 Resiliency Compliance Plans from energy industry participants. These RCPs serve as the basis for all activities concerning the ERP.

The TFER has also monitored and responded to natural calamities such as tropical cyclones. In fact, upon the eruption of the Taal Volcano earlier this month, the task force has been on full alert, providing energy situation updates on affected areas.

The PDP also seeks to explore new and emerging technologies for power generation, such as fuel cells, ocean thermal energy conversion, and nuclear technology.

DoE has begun revisiting nuclear technology by institutionalizing the Nuclear Energy Programme Implementing Organization (NEPIO) in 2016 and submitting to the Office of the President a draft position recommending the inclusion of nuclear energy in the current energy mix in 2018, which still awaits the President’s signature.

More recently, DoE, in a statement last November 2019, said it has met with the International Atomic Energy Agency (IAEA) to prepare the framework of the Integrated Work Plan (IWP) that “explores the inclusion of nuclear power in the Philippine energy mix”. This is after the IAEA, through its Integrated Nuclear Infrastructure Review (INIR) Mission, submitted its official report “which contained observations and recommendations that would further assist the country in addressing the 19 infrastructure requirements needed before embarking on a full nuclear energy program.”

Under the current administration, DoE has stressed its commitment to achieving full electrification of unserved and underserved areas across the country by 2022. This is also one of the notable goals of the PDP.

From conducting initial public consultations on total electrification, DoE has been pushing on meeting the 100% electrification target by creating Task Force E-Power Mo (TFEM).

Aside from overseeing the Total Electrification Program under the chairmanship of DoE Senior Undersecretary Jesus Cristino P. Posadas, the TFEM has identified three electrification strategies: household electrification, grid electrification, and off-grid electrification.

According to the DoE’s 2018 report, the Philippines has reached 88.3% household electrification. In particular, Luzon has a 94.8% electrification level, Visayas is at 88.2%, while Mindanao is 70.8% energized. — Adrian Paul B. Conoza

Philippines’ gross domestic product performance (2019)

January 24, 2020 | 12:32 am

THE PHILIPPINE ECONOMY grew by 6.4% in the fourth quarter, its fastest pace for 2019 on the back of robust household spending and a rebound in government spending, but was not enough to hit the full-year goal, the Philippine Statistics Authority (PSA) reported yesterday. Read the full story.

GDP growth falls to 8-year low in 2019

January 24, 2020 | 12:32 am

The October-December outcome was higher than the revised six percent in the third quarter and 6.3% in the fourth quarter of 2018.

This brought the full-year gross domestic product (GDP) growth to 5.9%, slower than 2018’s 6.2%. This matched the median estimate in a BusinessWorld poll last week, but missed the downward-revised 6%-6.5% set by the government for 2019.

The latest full-year reading was the slowest in eight years or since the 3.7% in 2011. It also broke the economy’s seven-year streak of at least six percent growth.

“Compared with other major economies in the region that have already released their GDP growth in the fourth quarter, the Philippines likely ranked second only behind Vietnam’s seven percent, and higher than China’s six percent growth rate in the fourth quarter,” Socioeconomic Planning Secretary Ernesto M. Pernia said in the press conference yesterday.

“On the demand side, growth was driven by the ramping up of government spending after the budget delay in the first half of 2019. Public construction significantly increased by 34% in fourth quarter 2019, with the completion of projects of the Department of Public Works and Highways, payment for the acquisition of right-of-way, and construction of government buildings,” he added.

Amid the backdrop of a slowing global economy, the 5.9% GDP growth in 2019 was “still impressive,” said Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno in a text message.

Household spending grew 5.6%, faster than the 5.3% in the fourth quarter of 2018. It logged in a full-year 2019 growth of 5.8% versus 2018’s 5.6%.

Government spending went up 18.7% in the fourth quarter from 12.6% in 2018’s comparable three months. However, its 10.5% growth in 2019 was slower than the 13% expansion recorded in 2018.

Private investment, represented in the data as capital formation, posted a 0.4% growth during the quarter compared to 4.9% previously. For 2019, it declined by 0.6% compared to a 13.2% growth in 2018.

Exports of goods and services rose by two percent in the fourth quarter (full-year 2019: 3.2%), slower than 14.4% in the fourth quarter of 2018 (2018: 13.4%). Imports likewise slowed, growing by 0.3% in the fourth quarter (2019: 2.1%) compared to 12.4% in the fourth quarter of 2018 (2018: 16%).

On the production side, the industry sector grew by 5.4% in the fourth quarter, slower than the 6.6% recorded in the final three months of 2018. For the year, it grew by 4.9% compared to 6.7% in 2018.

Agriculture, hunting, forestry and fishing grew 1.5% in the fourth quarter from 1.8% in the same three months in 2018. This brings the sector’s full-year growth at 1.5%, faster than 2018’s 0.9%.

Mr. Pernia, who is also director-general at the National Economic and Development Authority, noted production declines in corn, sugar, and banana “primarily because of delayed planting and harvesting due to the El Niño phenomenon” in the first six months of 2019.

“Livestock growth also moderated, following the strict implementation and monitoring of movements of live animals across provinces as local government authorities worked to avert the spread of the African Swine Fever,” said the Cabinet official.

Services remained the main engine of growth as it grew by 7.9% in the fourth quarter, faster than the 6.8% recorded in the same period in 2018. For full-year 2019, it grew by 7.1% versus 2018’s 6.8%.

In a Q&A with the media, Mr. Pernia said “a full percentage point” in growth was lost due to last year’s budget delay.

“[W]e could have hit, close to, if not right smack, seven percent GDP growth…,” Mr. Pernia said.

Prior to the fourth quarter’s 6.4% expansion, growth in the last year’s three quarters averaged 5.7% with analysts blaming the nearly four-month delay in the approval of the 2019 national budget which left new projects unfunded and stymied government spending.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion noted the spending catch-up by the government as doing the “heavy lifting” in the country’s GDP growth performance. He noted, however, that the absorptive capacity of government agencies and local government units “has continued to be a development challenge.”

“Government may continue to disburse funding but the actual spending and project implementation takes too much time to be realized,” Mr. Asuncion said in an e-mail.

In an e-mail to reporters, ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa cited capital formation as the “missing link” in the country’s growth performance last year.

“Investment in durable equipment, previously an integral part of the growth run, contracted for three quarters to weigh on overall GDP momentum. With capital formation absent in 2019, growth emanated from household consumption and belated government spending. The run to 6% was definitely out of reach with capital formation struggling,” Mr. Mapa said.

OUTLOOK
Meanwhile, Finance Secretary Carlos G. Dominguez III said he expects GDP growth to pick up this year.

“The pickup in growth in the fourth quarter of 2019 resulting in part from the government’s catch-up spending following anemic expansion in the year’s first semester will gain speed in 2020, with the domestic economy firing on all cylinders as a result of even more vigorous investments in infrastructure and human capital development for the entire year ahead,” Mr. Dominguez said in a statement.

Mr. Dominguez cited the downside risk to growth this year to include the “possibly lingering impact” of the US-China trade war, a possible re-escalation of tensions between the US and Iran that could induce volatility in global oil prices; and “depending on its intensity,” a Taal Volcano eruption that could impact Metro Manila and neighboring regions.

For UnionBank’s Mr. Asuncion: “Capital formation and trade are expected to continue its recovery as downside risks from the external environment have largely subsided, particularly with that of the signing of the US-China phase one trade deal. Geopolitical issues, however, may continue to be a threat as Middle East unrests continue to unfold adding to downside risks.”

Mr. Asuncion estimates growth in the first quarter of 2020 to be at 6.3%. “However, this may be lower than expected because of calamity-related disruptions,” he said.

Alex Holmes, Asia economist at Capital Economics, said the 6.4% fourth-quarter GDP growth last year “will be as good as it gets.”

“[W]e don’t think the economy will continue to pick up speed. For one thing, the spike in government spending in [the fourth quarter] will prove temporary, as distortions relating to the delayed 2019 budget fade,” Mr. Holmes said in a research note.

For ING Bank’s Mr. Mapa, monetary policy is “likely needed” in order to stimulate growth this year, noting the time delay for last year’s rate hikes by the BSP “will take some time to fully feed into the economy.”

“With growth momentum apparently still sluggish, the need for additional stimulus from both the fiscal and monetary authorities is now even more apparent. We continue to price in a rate cut by the BSP in February, followed up by further easing in May to help rekindle the now-scuttled new Philippine growth story,” Mr. Mapa said.

In a note sent to reporters on Thursday, HSBC Global Research Economist Noelan Arbis expects the economy to grow by 6.4% this year.

“[T]here remains risks for the Philippine economy in the year-ahead. Slow implementation of the government’s infrastructure agenda could impinge on growth. The Philippines also continues to lag far behind its regional peers in attracting FDI (foreign direct investments), so passing long-awaited tax reforms (particularly corporate tax reform) are necessary to lift policy uncertainties from investors,” Mr. Arbis said.

For BSP’s Mr. Diokno, a GDP growth of seven percent “looks attainable this year.” — Jobo E. Hernandez with inputs from Luz Wendy T. Noble and Beatrice M. Laforga

Philippines drops in global corruption index

January 24, 2020 | 12:31 am

By Jenina P. Ibañez

THE Philippines slipped 14 spots in a global corruption index released on Thursday by Transparency International, which said “a staggering number of countries are showing little to no improvement in tackling corruption.”

In the Corruption Perceptions Index (CPI) 2019, the Philippines was tied with El Salvador, Kazakhstan, Nepal, Eswatini and Zambia for 113^rd place out of 180 countries and territories.

The Philippines scored 34 out of 100 in terms of perceived levels of public sector corruption according to experts and businessmen. This was lower than the country’s score of 36 in the CPI 2018, where it ranked 99^th.

The CPI uses a scale of zero to 100, where zero means “highly corrupt” and 100 is “very clean.”

Scoring below the global average of 43, Transparency International said countries with scores like the Philippines have weak election campaign transparency and political power concentrated on the wealthy few.

“When policy-makers listen only to wealthy or politically connected individuals and groups, they often do so at the expense of citizens,” it said.

“Countries with lower CPI scores also have a higher concentration of political power among wealthy citizens. Across the board, there is a concerning popular perception that rich people buy elections, both among some of the lowest-scoring countries on the CPI, as well as among certain higher-scoring countries.”

Around two-thirds of the countries scored below 50.

Denmark and New Zealand tied for first place with a score of 87, indicating a perceived low level of corruption. Finland came in second with a score of 86, followed by Singapore, Sweden and Switzerland which all had a score of 85.

The average score of Asia Pacific stood at 45, only marginally better than the global average.

In Asia Pacific, the Philippines lagged behind New Zealand (87), Singapore (85), Australia (77), Hong Kong (76), Japan (73), Taiwan (65), Brunei (60), South Korea (59) and Malaysia (53).

“Despite the presence of high performers… the region hasn’t witnessed substantial progress in anti-corruption efforts or results. In addition, low-performers like Afghanistan (16), North Korea (17) and Cambodia (20) continue to highlight serious challenges in the region,” Transparency International said in the report.

Transparency International noted that some governments in the region “continue to restrict participation in public affairs, silence dissenting voices and keep decision-making out of public scrutiny.”

“Given these issues, it comes as no surprise that vibrant economic powers like China (41), Indonesia (40), Vietnam (37), the Philippines (34) and others continue to struggle to tackle corruption,” it said.

NOT MUCH IMPROVEMENT
University of Asia and the Pacific professor Ramon N. Cabrera said in a mobile phone message that the two-point dip in the Philippines’ CPI score meant that “there’s not much improvement in tackling corruption.”

He said the steep change in rank despite the marginal score change means that other countries are doing better at addressing corruption than the Philippines.

“The decline in corruption perception can be attributed to concerted efforts by the executive to curtail press freedom and the acquittal of high-profile politicians accused of corruption,” Mr. Cabrera said.

University of the Philippines political science professor Maria Ela L. Atienza said in an e-mail that the ranking is based on perceptions during an election year for the Philippines.

“Perhaps, respondents noted that political parties and candidates were not very truthful in submitting their statements of campaign contributors and expenses. In particular, the administration candidates have spent quite a lot in the campaign and many of them won. It is not clear if they benefitted from government resources,” she said.

University of Santo Tomas political science professor Marlon M. Villarin said some reports and surveys show “public awareness that there is a possible abuse in the way how government manages its war on drugs.”

Ms. Atienza added that there is also a growing perception that the president and his administration are not open to genuine consultations.

“They attack those labelled as opposition and critics, and tend to favor supporters, even in franchises and awarding of contracts,” she said.

CONCERN
Foreign chambers also expressed concern over the Philippines’ low ranking.

“This is a disappointment that the country is rated lower than the other five large ASEAN economies for corruption,” Joint Foreign Chambers of Commerce of the Philippines (JFC) Senior Adviser John Forbes said in a mobile phone message.

“For most foreign investors, a reputation for corruption is a negative factor. However, our companies located in PEZA and ecozones rarely experience corruption,” he said.

European Chamber of Commerce President Nabil Francis in a mobile phone message said integrity and transparency is a priority for the country’s economic development.

“We express support for efforts to promote and improve good governance. We deem anti-corruption and transparency measures as strong determinants in terms of sustaining economic growth and making the Philippines a more attractive investment destination over the coming years.”

To improve its corruption perceptions score, Ms. Atienza said the government should have transparent consultations for public transactions and decision-making, adding that the passage and proper implementation of the Freedom of Information Law would help.

“It is necessary for the Duterte Administration to manage its political conflict of interest but distancing himself from Congress and maintain and reinforce sound check and balance relationship with the legislative and judicial department,” Mr. Villarin said.

For its part, Transparency International said governments should prevent opportunities for political corruption and maintain the integrity of political systems by controlling political financing, managing conflicts of interest, regulating lobbying activities, among others.

Duterte vetoes provision of new sin tax law

January 24, 2020 | 12:30 am

PRESIDENT Rodrigo R. Duterte on Wednesday signed into law the measure increasing the excise tax imposed on electronic cigarettes and alcohol products, but vetoed a provision seen to curtail the power of the Bureau of Internal Revenue (BIR) to conduct raids as part of its efforts to clamp down on illicit trade.

House Ways and Means Committee Chairman Jose Ma. Clemente S. Salceda said the new “sin” tax law or Republic Act (RA) No. 11467 is expected to generate P17-billion revenues in the first year of implementation, which will help fund the government’s universal health care program.

Executive Secretary Salvador C. Medialdea also answered in the affirmative when sought for confirmation, while Senator Pia S. Cayetano, ways and means committee chairman, broke the news in a social media post late Wednesday evening.

RA 11467 amends RA 8424 or the National Internal Revenue Code of 1997.

Mr. Salceda said President Duterte vetoed the provision to remove the court order requirement, which Finance Secretary Carlos G. Dominguez III earlier flagged.

“’Yung court order requirement,” Mr. Salceda said in a phone message Wednesday evening. “It was the intent of the bicam to delete it pero di nailagay sa report.”

The bill, as approved in the bicameral conference committee, provided that internal revenue officers may only raid a house, building or any place upon the order of the court.

In his veto message, Mr. Duterte said the provision curtails the power of the state to collect taxes as well as the search and seizure powers of the BIR, which is in line with its mandate to counter illicit trade.

Mr. Duterte also noted that this restriction is not imposed on other taxable products.

The law was signed on Jan. 22, but Mr. Dominguez said: “The BIR will implement the new law with new rates on alcohol and e-cigarette effective Jan. 1, 2020 as the law clearly says Jan. 1 is when the new rates apply.”

The newly signed law will increase the ad valorem tax to 22% of the net retail price of distilled spirits from the current 20%, and the specific tax to P42 per proof liter in 2020 from P23.40 in 2019. The specific tax will increase to P47 per proof liter in 2021, P52 in 2022, P59 in 2023, and P66 in 2024.

It will also levy a P50 per liter single rate on all types of wines. This is a departure from the previous tax structure that varied according to the wine type, price and alcohol content. The rate will be increased by 6% every year, effective Jan. 1, 2021.

In the previous system, sparkling wines costing up to P500 and those costing more than P500 are levied P316.33 and P885.72, respectively, while still wines and carbonated wines are charged P37.96 for bottles with up to 14% alcohol content and P75.92 for those with more than 14%.

Meanwhile, excise tax on fermented liquor will be at P35 starting this year from P25.42 per liter in 2019. It is set to increase by P2 every year until it reaches P43 in 2024, and will increase by 6% every year effective Jan. 1, 2025 via BIR revenue regulations issued by the Finance secretary.

E-CIGARETTES
The law also increases the levies on electronic cigarettes introduced in RA 11346 that was enacted in July last year, which are at a P10 per pack on heated tobacco products (HTPs) for 2020 and a P10 rate for 10 milliliter vapor products, P20 for 20 ml, P30 for 30 ml, P40 for 40 ml, P50 for 50 ml and so on.

Under the new law, the tax rate on HTPs will be raised to P25 per pack in 2020, P27.50 in 2021, P30 in 2022 and to P32.50 in 2023.

Vapor products with salt nicotine will be charged a P37 per milliliter specific tax in 2020, which will increase by P5 annually until it reaches P52 in 2023; while vapor products with conventional nicotine will be taxed P45 per 10 ml in 2020. This is set to increase by P5 annually until it reaches P60 in 2023. All these rates will be increased by 5% every year effective Jan. 1, 2024.

Other tax reform packages still pending in Congress are measures that seek to reduce corporate income tax and overhaul fiscal incentives; provide a uniform framework for real property valuation and assessment; and simplify the tax structure for financial investments.

Besides RA 11346, which also increased excise tax on tobacco products to P45 per pack beginning 2020 from P35 in 2019, the government has so far enacted RA 10963, which slashed personal income tax rates and increased or added levies on several goods and services — the main component of the tax reform package — and RA 11213, which grants estate tax amnesty and amnesty on delinquent accounts left unpaid even after being given final assessment. — Charmaine A. Tadalan

Netflix membership up 20% in 2019 despite heavy competition

January 24, 2020 | 12:09 am

AMERICAN streaming service Netflix reports its membership grew by 20% in 2019 with its fourth quarter earnings growing by 31% year-on-year on the back of viewership of its original series such as The Witcher and You.

Membership in the Asia Pacific region grew by 1.75 million in the fourth quarter, bringing the total to 16.23 million. The company said in a release that this is the “highest growth quarter of the year.”

In all, Netflix said that 95% of its membership growth came from countries outside the US.

Total membership is currently at 167 million.

Fourth quarter revenues came in at $5.5 billion with operating income up 62% to $2.6 billion.

The growth comes despite the introduction of the Walt Disney Company’s own streaming service Disney+ and Apple’s Apple TV late last year, the company said.

“Netflix has an enormous opportunity ahead as audiences shift from linear TV to internet entertainment. New competing services will accelerate the shift from linear to on-demand — just like when audiences moved from broadcast to cable,” said the release.

Growth outside the US may be optimistic but back home Netflix may be facing its toughest year yet with the US and Canada market bringing in only 3 million new members in 2019, lower than the 9 million it brought in the year before.

The company said the slowdown is due to price hikes and increasing competition.

“We are working hard to improve our service to combat these factors,” Netflix said in a letter to shareholders as quoted by Bloomberg.

2020 PLANS
This year, Netflix is planning on “investing heavily to expand the variety and diversity of our shows,” said the release.

The company is expected to release more than 100 seasons of local language programming in 2020.

In particular, the service is “investing heavily in Korean stories,” as “K-content is also popular globally,” and has inked deals with South Korean media companies, JTBC and CJ ENM’s Studio Dragon.

A Bloomberg report noted that the company is expected to increase spending by 20% to bring its programming budget to $12 billion on a profit-and-loss basis.

“These deals will enable us to bring more K-dramas to fans all over the world,” the company said.

Aside from producing more original content, Netflix said that it is currently experimenting with pricing plans in Asia as it has started rolling out in 2019 mobile-only plans in India, Malaysia, and Indonesia.

“We expect the mobile-only plan to be revenue-positive which will allow us to further invest in content to be enjoyed by our members,” Netflix said.

“After several years of unchecked dominance in the US streaming video industry, Netflix faces high-profile new streaming rivals. Yet the breadth of its content and a compelling value proposition will make it hard for new entrants like Disney+ to unseat the company,” Geetha Ranganathan, a Bloomberg intelligence analyst, said in the Bloomberg report.

POPULAR CONTENT
The service noted in particular that the fourth quarter content slate “was strong” with the second season of thriller You netting an audience of 54 million and The Witcher drawing in 76 million, making it “the biggest first season of a series yet,” a company release said.

(Netflix counts views by number of accounts choosing to watch at least two minutes of a series, movie, or special)

The Witcher is a fantasy drama series produced by Lauren Schmidt Hissrich based on the book series of the same name by Andrezj Sapkowski. The eight episode first season stars Henry Cavill in the lead role of Geralt of Rivia.

Other popular series in the fourth quarter were The Crown by Peter Morgan and Spanish crime drama Casa del Papel by Alex Pina.

Season three of The Crown was watched by more than 21 million people, up 40% from the last season.

Netflix films like Michael Bay’s 6 Underground and Martin Scorsese’s The Irishman were some of the most popular films in the service, having 83 million and 64 million views, respectively.

The Irishman was nominated for Best Picture and Best Director alongside eight other nominations at the 92^nd Academy Awards scheduled in February. — Zsarlene B. Chua with a report from Bloomberg

Street party, floats mark Chinese New Year in Manila

January 24, 2020 | 12:08 am

CELEBRATE Chinese New Year with a bang as the City of Manila, together with the Filipino-Chinese General Chamber of Commerce Inc. (FCGCCI), is holding a street party in Chinatown’s San Lorenzo Ruiz Plaza on Jan. 24 which will include performances from top Original Pilipino Music (OPM) acts including Sponge Cola and Parokya ni Edgar.

“This is the first time the chamber is handling the celebrations for the New Year. [Previously], the celebrations were simple, now it’s a grand celebration,” Dr. James Dy, chairman emeritus of the FCGCCI, said during a press conference on Jan. 21 at the Universal Records offices in Quezon City.

The celebration — stretching over two days until Jan. 25 — will includes the aforementioned street party which is expected to draw a crowd of 10,000, will also see a float parade on Jan. 25.

“The parade will start from Plaza Lawton and end at Lucky Chinatown Mall,” Mr. Dy said.

Performers at the street party include Gloc-9, Shanti Dope, Ex-Battalion, Darren Espanto, Angeline Quinto, and Janine Berdin among others. Aside from the musical performances, the party will also include traditional Chinese performances from cultural groups and a dragon dance to herald the new year.

A 30-minute fireworks display over at Jones Bridge will cap off the night’s celebrations.

“This can be called one of the biggest Chinese New Year celebrations out there,” Ramon Chuaying, President of the FCGCCI, said before adding that they managed to pull off the preparations despite being given “less than 20 days” to prepare.

“We were told that the Mayor wanted us to handle the celebrations in early January,” he explained.

And because of the celebrations, Mr. Chuaying said that several streets in Binondo will be closed including Quintin Paredes and Juan Luna. He advises motorists to take alternate routes via Escolta and side streets.

The Chinese New Year street party is on Jan. 24 from 7 p.m. to midnight. Admission is free for both the party and the parade. — ZBC

MRT-3 ticket sales, rider count further fall as repairs continue

January 24, 2020 | 12:07 am

By Arjay L. Balinbin, Reporter

METRO RAIL Transit (MRT)-3’s number of passengers and collection from ticket sales fell further in 2019 as the railway system undergoes rehabilitation to increase its capacity by July 2021.

Collection from ticket sales fell by 7.7% to P1.91 billion last year while ridership in the Baclaran-North Ave. line dropped by 7.1% to 96.93 million, latest data from the Department of Transportation (DoTr) show.

The figures were provided to BusinessWorld on Thursday by the office of Timothy John R. Batan, the department’s undersecretary for railways.

In 2017, ridership reached 140.15 million, higher by 4.6% from the previous year, while revenues hit P2.78 billion, up 3.7% from the collection in 2016.

On Tuesday, Mr. Batan said in an interview that MRT-3’s passenger count had gone down to a workday average of 300,000 to 320,000, or significantly lower compared with the more than 620,000 passengers ferried daily in August 2012.

“It’s a combination of [factors]. Some of them are riding the buses; some of them, instead of working far, are now working near their houses… I mean the 300,000 did not just disappear from the face of the earth; they must have found another way of traveling,” he said.

He said the goal of MRT-3 now, with its Japanese service provider Sumitomo Corp., Mitsubishi Heavy Industries Engineering, Ltd., and TES Philippines Inc. (Sumitomo-MHI-TESP), is to restore the 600,000-passenger-per-day capacity of the railway system by 2021.

“The goal is to fix it to how it is supposed to be,” he said.

Mr. Batan said the maximum number of trains that ran last year was 15, with seven to 10 minutes gap between two trains or what is called the “headway.”

“Remember the system is supposed to operate 20 trains per hour. We went down to… worst was six or seven in early 2018, so we have gradually restored that,” he added.

In a statement posted on its website in August 2019, DoTr-MRT-3 explained that since the government’s transition team temporarily took over the maintenance of the railway system after the termination of the deal with Busan Universal Rail, Inc. (BURI) in November 2017, “measures have been taken to only deploy trains that are safe and reliable.”

DoTr-MRT-3 added that “revenue maximization is not its primary objective,” and it “does not condone gambling with passengers’ safety in exchange for higher revenues.”

“This means that since 2018, MRT-3 only deploys trains that are not likely to break down during operations, because breakdowns result not just in passenger inconvenience, but more importantly, breakdowns expose passengers to safety risks, especially in cases of unloading incidents between stations,” it said further.

The DoTr data also showed that unloading incidents fell 50.9% to 28 in 2019 from 57 in 2018.

Mr. Batan said that when Sumitomo-MHI-TESP took over the system in May 2019, “we’ve seen the gradual increase of our capacity again.”

He said when the government’s contract with Busan Universal Rail was terminated, “a lot of capacity issues” emerged, which resulted in the decrease of MRT-3’s ridership in 2018. “But the transition team was able to stabilize that again within that year.”

On what the public can expect from the completion of the railway system’s rehabilitation by July 2021, Mr. Batan said: “From 15 to 20 operational train sets, from the current 30 kilometers per hour up to 60 kilometers per hour, and from 7 minutes to 10 minutes headway down to 3.5 minutes. So more trains, faster trains and shorter time gap between trains; we are looking at going back to the previous 600,000 capacity from 300,000 now.”

Under the rehabilitation project, the DoTr said, Sumitomo-MHI-TESP “will undertake the overhaul of all of MRT-3’s 72 Light Rail Vehicles (LRVs), replace all mainline tracks, rehabilitate power and overhead catenary systems, upgrade signaling, communications and CCTV systems, and fix all of MRT-3’s escalators and elevators, among other system repairs and improvements.”

K-pop’s Tiffany Young has QC concert on Saturday

January 24, 2020 | 12:07 am

TIFFANY YOUNG will perform in Quezon City on Jan. 25.

AMERICAN SINGER and K-pop star Tiffany Young is set to perform solo for the first time in the Philippines on Jan. 25 at the New Frontier Theater in Quezon City as part of her ongoing Open Hearts Eve Part Two tour.

“It’s been a while since I’ve seen you guys and I’m so excited to have the show there and sing and dance the night away with you,” Ms. Young said in a video greeting to promote the concert.

Ms. Young (real name Stephanie Young Hwang) was born in 1989 and was raised in California. At the age of 15, she was discovered by South Korean talent agency SM Entertainment which prompted her to move and train in South Korea for two years. In 2007, she debuted as part of Girl’s Generation, arguably the biggest girl group in the country at the time.

The group, which originally had nine members, spawned several chart-topping hits in its home country including its debut single, “Into the New World.”

Some of the group’s hits include 2009’s “Gee” and “Genie” and 2013’s “I Got A Boy” whose music video won Video of the Year at the inaugural Youtube Music Awards.

Girl’s Generation previously performed in the Philippines in 2013 and 2015. Another Girl’s Generation member, Kim Hyoyeon, is set to perform as a DJ in Manila on Feb. 8 at House Manila in Resorts World Manila, Pasay City.

Ms. Young, as one of the group’s main vocalists, made her solo debut in 2016 with I Just Wanna Dance. The following year, she ended her contract with SM Entertainment to move back to Los Angeles to pursue acting and a solo music career.

She released her extended play (EP) album, Lips on Lips, in 2019 which included the singles “Born Again” and “Lips on Lips.” The album debuted at the 9^th spot in Billboard’s Heatseekers Albums chart and 30^th on its Independent Albums chart.

Lips on Lips went on to be certified Platinum in South Korea a week after its release.

In the same year, Ms. Young won Best Solo Breakout Artist at the 2019 iHeartRadio Music Awards.

She is currently signed with Transparent Arts in the US.

Ms. Young’s Open Hearts Eve Part Two tour commenced in 2020 after finishing an 18-city US Tour to promote her new single, “Magnetic Moon.”

Tiffany Young’s Open Hearts Eve Part Two concert is set is on Jan. 25, 6:30 p.m., at the New Frontier Theater in Quezon City. Tickets are available via ticketnet.com.ph. Ticket prices range from P14,000 (MVP) to P4,500 (Balcony). — ZBC

Online gaming seen to lure more into real estate

January 24, 2020 | 12:06 am

By Denise A. Valdez, Reporter

THE Philippine real estate industry is projected to attract more investors this year due to the continuous rise in demand from online gaming operators, relatively cheap leasing rates compared to other countries and new catchments from regional peers.

In a briefing on Thursday about its real estate market overview and outlook, consultancy firm Jones Lang LaSalle (Philippines), Inc. (JLL Philippines) said 2020 is a good time for investors to come in given the maintained momentum of online gaming, slowdown in residential prices, new laws concerning the industry, and lifestyle trend of shared spaces.

“We do think the Philippines will be a good investment destination for 2020, and we’re seeing that now in terms of [increase in] clients who inquired: a lot of foreign investors and a lot of local players who are diversifying; not just major real estate developers, but also first time developers who are diversifying their portfolio,” JLL Philippines Head of Research Janlo de los Reyes said.

He noted the robust growth of the Philippine offshore gaming operator (POGO) industry — which grew the fastest in office take-up last year at 52.3% — is seen to continue this year with demand reaching outside Metro Manila to the cities and municipalities of Cavite, Laguna, Clark and Cebu.

Residential prices are also seen to grow at a slower pace to an annual average growth of 3.1% this year, which Mr. de los Reyes attributed to condominium developers’ “testing” of the market, whether it still has the appetite to absorb rising price points.

Another expected driver of the industry’s growth, he said, is greater focus from buyers on building resiliency and sustainability, following the earthquakes in Davao last year and the eruption of Taal volcano earlier this month.

The trend of co-living, co-working and co-storage spaces is also expected to affect the approach of developers in new projects.

New policies from the government such as the guidelines for real estate investment trusts (REITs), the pending tax reform bill and proposed amendments to the Retail Trade Liberalization Act are also seen to be big influences to the industry.

Amid the uncertainties from a regulatory perspective, Mr. de los Reyes said there’s “a lot of opportunities in the Philippines [in 2020].”

“For the office, I think we’re still relatively cheap in terms of the rents… For residential, again we’re also cheaper than other markets still… The retail, hopefully the Retail Trade Liberalization Act pushes through so we can find more retailers. For industrial, I think it’s a heavily underserved market,” he said.

He added the conflict in Hong Kong and the banning of online gaming in Cambodia may push locators to consider investing in the Philippines. “I think we still have good fundamentals. And I guess that’s what’s really pushing the growth further into its extended run.”

In JLL Philippines’ City Momentum Index 2020, Manila was ranked eight most dynamic city in the world, moving up its 12^th spot last year. This list covered 130 city-regions around the globe and were ranked based on “short-term economic and commercial real estate momentum.”

“The remarkable dynamism in the emerging Asian economies is proof that economic reforms, business growth and infrastructure investment can drive the expansion of industry, significantly in the tech sector, and facilitate a start-up culture,” Jeremy Kelly, director of cities research at JLL, was quoted as saying in a statement.

Mr. de los Reyes said this is one of the reasons JLL Philippines is optimistic about real estate growth in the country in 2020.

Topping JLL’s City Momentum Index 2020 are Hyderabad and Bengaluru in India, Ho Chi Minh City in Vietnam, Nairobi in Kenya and Chennai in India.

Annual Angel Walk for Autism set at SM MOA on Jan. 26

January 24, 2020 | 12:06 am

THE THIRD week of January is officially the Philippines’ National Autism Consciousness Week, as per Proclamation NO. 711, signed by former president Fidel V. Ramos. As part of the celebrations, SM Cares, the Corporate Social Responsibility arm of SM Supermalls, and the Autism Society Philippines (ASP) will be holding the annual Angels Walk for Autism on Jan. 26 at the Mall of Asia (MOA) Arena in Pasay City, with gates opening at 6:30 a.m.

The Angels Walk for Autism will start at the MOA Arena and will end at the SM MOA Music Hall. The SM MoA complex has been hosting the event since 2007, and the number of participants — consisting of families, professionals, supporters, employees from the different business units of SM, and advocates from the public and private sectors —has grown from 200 in 2007 to 24,000 last year.

“There was a concerted effort from both SM Cares and the Autism Society Philippines to reach out to as many communities as possible, with the aim of raising awareness and acceptance, and promoting inclusion for persons with autism,” said SM Cares Assistant Vice-President, CSR Marketing Chito Bauzon in an e-mail to BusinessWorld. “Since SM started hosting Angels Walk, and the malls have become a second home for Filipinos, these activities that are held within the business environments of SM have allowed hundreds and thousands of shoppers to know more about autism.

“There also was a strong internal campaign of SM Cares, to its employees, so the advocacy became very visible, and common knowledge for all,” he said.

“Lastly — and most importantly — the drive to care for persons with disabilities has been very apparent from the leadership of Mr. Hans Sy, SM Prime Holdings Chairman of the Executive Committee. His leadership with a heart serves as an inspiration for Management and employees in supporting PWDs especially in communities where we are present.”

“Our ultimate goal is to achieve a completely autism-friendly Philippines,” said Mona Magno-Veluz, National President of Autism Society Philippines said. “We have made great strides in making Filipinos more accepting of those with autism and we hope that through events like the Angels Walk for Autism, we can continue to make the Philippines a place where every individual that has autism is valued, loved, and treated with dignity.”

In connection to that, Mr. Bauzon discussed the partnership between SM Cares and the ASP: “SM Cares supports ASP, amongst many other PWD organizations, in our bid to make every SM Mall, a mall for all. And a mall for all means inclusivity for everyone, including persons with disability (PWD). SM advocates for a barrier-free and disability inclusive environment so that everyone can enjoy the same fun and leisure as anyone would do. We offer our malls and other business establishments as a venue for ASP and other sector partners, as a channel for awareness, for discussion and to create opportunities for inclusion. Aside from Angels Walk happening at the Mall of Asia Arena, it also happens in other SM Malls across the country. You get more people aware — you get more people to talk about the advocacy.”

Simultaneous autism walks are also scheduled in SM City Bacolod, SM City Cebu, SM City Lucena, SM Olongapo Central, and SM City Davao.

“Our advocacies include programs on PWDs, the environment, senior citizens, women, breastfeeding mothers, and the youth,” Mr. Bauzon said, discussing other projects with which SM Cares is involved. They also partner with the Down Syndrome Association of the Philippines and host their annual Happy Walk for Down Syndrome (also held in several malls across the country). They also hold special movie screenings for blind and deaf students, using films with audio description and closed captioning.

They’re also responsible for the Emergency Preparedness Forum for PWDs and Senior Citizens.

Going past the walk and the special weeks and days designated to promote awareness to PWDs, can SM say that it provides a PWD-friendly environment in its facilities for the rest of the year? Mr. Bauzon said, “We ensure that our malls have facilities and features that make our business environments accessible and safe for PWDs. Our malls have striven to go beyond compliance to the Accessibility Law, which gave us the Hall of Fame recognition by the Apolinario Mabini Awards. On top of the physical attributes, SM has been training its mall frontliners — security guards, maintenance personnel, tenants and employees — on how to interact and handle persons with special needs. The bid for inclusivity goes beyond the physical structure, but is well embedded in the company culture. We all take inspiration from our Founder, the late Henry Sy Sr., and his son, Mr. Hans Sy, Chairman of the Executive Committee of SM Prime Holdings, who place a lot of premium in serving the Filipino people.”

“SM supports communities and does its best to serve every Filipino. Serving the public means serving everyone, including those who have physical or mental challenges. We see our malls as having a unique position and opportunity for the community to know about social issues. For most, if not all, SM has become a community center where families and friends gather, celebrate and enjoy life. This has now become a staple in Filipino culture — which all the more means that we should do our part as a member of the community — to promote inclusivity. It would be great if we get more citizens and companies to move together in a unified direction in promoting inclusivity, appreciation and acceptance of PWDs,” said Mr. Bauzon.

To know more about the event, visit www.autismsocietyphilippines.org. To register for the walk, visit https://www.eventbrite.ca/e/asp-angels-walk-for-autism-2020-tickets-77643546939. — JLG

Start-up incubator QBO Innovation Hub plans to take in nearly 150 new innovators this year

January 24, 2020 | 12:05 am

By Jenina P. Ibañez

QBO Innovation Hub plans to take on board nearly 150 new start-ups in 2020 to address a shortage in the number of job-generating innovators, an official of the start-up incubator said.

“We noticed that there’s just not enough start-ups in the ecosystem,” QBO Operations Head Natasha Dawn S. Bautista told BusinessWorld on the sidelines of a media event on Wednesday.

Ms. Bautista said the current quantity and quality of start-ups are not enough to sufficiently make an impact, including spurring a significant rise in job creation in addition to developing convenient services.

“Imagine if we had a Grab [ride-hailing app] that’s Philippine made, and the impact to our economy, to job creation, to helping improve the lives of our Filipino families — so I think that’s what we’re looking for,” she said.

At present, there is no database that sufficiently counts the number of start-ups in the country, she said. Public-private initiative QBO currently works with 367.

“We hope by the end of the year we have 500… It’s a mix of both creating start-ups and looking for [existing] start-ups,” Ms. Bautista said.

Out of each hundred start-ups QBO works with, five to 10 are estimated to have been created through their programs, she said.

Many of the start-ups the company works with are in education, agricultural, and logistics technology.

Funding for QBO’s programs comes from an ongoing two-year P33-million grant from the Department of Science and Technology, along with private sector partnerships.

This year, QBO is working on several programs to attract more start-ups, including roadshows, start-up incubation programs, and corporate partnerships.

“I noticed that corporates here in the Philippines, they have their own little bubble… and they still have this thinking of ‘there’s a solution out there, or there’s competition out there, I’m gonna build it myself’ — but that’s not the thinking anymore,” she said.

Ms. Bautista said the quality of start-ups is improving, but developing experience will take time.

“Developing our start-ups, that’s what we’re trying to do — to have them at par with the rest of the world when it comes to their skillset,” she said.

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