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Dwarfed Philippine stock market eyes more volume amid stumbling blocks

By Denise A. Valdez
Reporter

THREE of the four companies that went public and raised almost P20 billion last year did so in the last quarter, suggesting that the local capital market is maturing, according to the corporate regulator.

“Companies used to ignore the fourth quarter because they’re afraid no one would buy their stocks,” Securities and Exchange Commissioner Ephyro Luis B. Amatong said recently. “But they are doing it now. That tells you the market is still liquid and still very deep.”

“That’s an encouraging sign that we are growing up — that the market is starting to mature and it’s a real market where people can raise funds anytime, regardless of size,” he added.

Thailand and Philippine companies led a regional pickup in initial public offerings (IPOs) last year, spurred by growing investor interest in companies focused on Southeast Asian consumers.

Philippine coconut water supplier Axelum Resources Corp. was one of these listers.

“It’s the best thing that can happen to a company,” Axelum President and Chief Operating Officer Henry J. Raperoga said in an interview last month, referring to the company’s IPO on the Philippine Stock Exchange.

“If you have a stable business and your fundamentals are there, you’ll be able to expand it a lot faster,” he said.

Axelum is a homegrown company that supplies its products to local and international manufacturers, among them All Market, Inc. which sells coconut water brand Vita Coco, The Hershey Co., Nestlé, Unilever, Ferrero, General Mills, Campbell’s, Quaker and ConAgra Foods.

Aside from Axelum, Fruitas Holdings, Inc. — a food and beverage kiosk operator whose consolidated revenue stood at P1.58 billion in 2018 — and home furnishing retailer AllHome Corp. also made their market debut in the last quarter of last year.

Kepwealth Property Philippines, Inc. was the only one that went public earlier than the last quarter of 2019, raising P384.77 million. Compare this with only one company that listed shares for the first time in 2018.

Maturing or not, however, the Philippine capital market is still dwarfed by its peers in the region.

The Southeast Asian nation had the second-lowest market capitalization in the region at $276.2 billion as of February 2019, according to data from the World Bank and World Federation of Exchanges.

The number of companies listed on the bourse was less than 300 — the lowest among 11 countries that include China, Japan, Hong Kong, India, South Korea, Singapore, Thailand, Indonesia, Malaysia and Vietnam.

China, Japan and Hong Kong had a market capitalization of $7.85 trillion, $5.67 trillion and $4.21 trillion, respectively. China had 2,286 listed firms, Japan had 3,655 and Hong Kong had 2,331.

STUMBLING BLOCKS
PNB Securities, Inc. President Manuel Antonio G. Lisbona said the Philippines still has a long way to go before it can compete with its regional peers.

“The biggest stumbling block is financial illiteracy,” he said. “If people are ignorant about the concept of saving and investing, it will be very difficult for them to understand the stock market.”

While there is growing interest in the stock market from the younger generation, regulators need more work to increase traction, Mr. Lisbona said. Among the barriers are restrictions on foreign ownership, reduced flow of foreign funds, corruption and regulatory risks, he said.

“It seems also that some entrepreneurs are hesitant to list their shares on the stock exchange given the seemingly daunting process and requirements,” Mr. Lisbona said. “Another apprehension is that staying listed involves recurring costs and reportorial requirements.”

Japhet Louis O. Tantiangco, a senior research analyst at brokerage Philstocks Financial, Inc., said the Philippines must sustain its growth momentum to keep investors upbeat.

“We’ll have to sustain the growth, better if we can go faster without compromising stability,” he said. “By doing so, business confidence would rise, enticing more companies to raise capital, which in turn could lead to more public offerings in the market.”

PSE President and Chief Executive Officer Ramon S. Monzon last month cited the need to raise the minimum public float requirement.

The SEC has proposed to increase this to 25% over five years, from 20% for companies that listed starting in 2017 and from 10% for the rest.

“We’re supporting that totally because that’s very important,” Mr. Monzon said.

He said 150 actively traded listed stocks are better than 268 listed ones in which less than half are actively traded, failing to increase the volume.

The stock exchange targets to generate P150 billion from its fund-raising activities this year, higher than P95.22 billion last year.

The bourse expects investors to return to the local equity market this year after most of them went to the fixed-income market last year.

Imported car firms report slight sales drop in 2019

By Jenina P. Ibañez, Reporter

IMPORTED vehicle sales steadied in 2019 as the number of passenger cars and light commercial vehicles sold dipped only slightly compared with the previous year, according to the Association of Vehicle Importers and Distributors, Inc. (AVID).

In a report released on Tuesday, AVID said full-year 2019 sales slipped 0.5% to 87,984 from an updated 88,430 units the year before.

In 2018, the drop in imported car sales was deeper at 16.8% with the impact of high inflation rates and new tax hikes on the industry.

Combined with sales figures from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA), the automotive industry breached its sales target of 410,000 with 457,925 vehicles sold last year.

AVID President Ma. Fe Perez-Agudo said sales in December, which went up 12% to 8,089 compared with the same month in 2018, bodes well for the automotive industry in 2020.

“The continued easing of inflation rates, lower fuel prices, and increased government spending will only bolster sales for the group. We will complement these positive indicators with new models, value-packed service offerings, and easier ownership schemes,” she said.

Passenger car sales in 2019 declined 0.5% to 30,726 units from 30,876 cars in 2018. Light commercial vehicle sales dipped 1.1% to 56,351 units in 2019, from 56,999.

Commercial vehicle sales jumped 63% to 907 units last year, led by sales of Hyundai trucks and buses.

In December alone, passenger car sales grew 5% to 2,608 units sold, while light commercial vehicle sales jumped 16% to 5,362 units. Commercial vehicle sales grew 2% to 119 units.

In an e-mail, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said that road vehicle sales continued to struggle in 2019 due to subdued demand for cars.

“The subdued demand for cars and durable equipment in general was what defined 2019 GDP growth and was one of the main reasons why Philippine growth slipped below target and below potential,” he said.

He said durable equipment purchases helped support an investment boom in the country. But recent rate hikes from the central bank to rein in inflation expectations slowed capital formation.

According to the consumer expectation survey of the Bangko Sentral ng Pilipinas (BSP), 17.9% of Philippine households considered the fourth quarter of 2019 a good time to buy motor vehicles, from 16.2% in the same quarter of 2018.

“Going forward, the 2019 BSP policy reversal bodes well for car sales and investment activity in general, as Governor Benjamin E. Diokno looks to unwind some of that 175 bps (basis points) rate hike from 2018. Already dialing back 75 bps worth, Diokno will likely cut policy rates gain by 25 bps in February, to help bolster loan demand and rekindle the Philippine investment momentum,” Mr. Mapa said.

AVID said that the industry expects to gain traction after the approval of the P4.10 trillion national budget in 2020.

“With the public works and highways department having one of the largest shares of the budget, it is expected that industry performance will gain traction in the new decade with the help from its importers bringing in more models that meet the requirements of various markets for the Filipino people,” the statement said.

3rd judge inhibits from PECO-MORE case

ANOTHER JUDGE at the Iloilo Regional Trial Court (RTC) has inhibited herself from the expropriation case filed by new player MORE Electric and Power Corp. (MORE Power) against Panay Electric Co., Inc. (PECO), citing ties with the latter’s owners.

“Owners of PECO, Mr. Jose Mari Cacho and Sandra Cacho are very close friends of the undersigned since they are members of an organization called ‘Beyond I Do’ wherein its regular meetings are usually held in the house of Mr. Cacho,” Judge Ma. Theresa Enriquez-Gaspar of RTC Branch 33 said in an order issued Jan. 24.

The judge added that she is a medical patient of Mr. Cacho’s wife.

Ms. Gaspar further said that the clerk in charge of civil cases in her court is related to an employee of MORE Power.

“The head of the PDM-Substation Project Development and Management Department of MORE, Mr. Wilmar J. Gonzaludo, is the husband of the clerk in charge of civil cases in this Court, Ma. Wienna Gonzaludo,” she said.

The expropriation case was first assigned to Branch 37 under Judge Yvette Marie D. Go, who inhibited from the case after granting MORE Power’s petition for a writ of possession.

PECO has filed an appeal.

Next to handle the case was Judge Daniel Antonio Gerardo S. Amular of Branch 35, who inhibited from the case after seeking advice from RTC Executive Judge Victor E. Gelvezon.

“Notwithstanding that the Presiding Judge performs his duties in accordance with the conscientious dictate of his conscience and the applicable provisions of law, it has come to a point that whatever judgment the Presiding Judge would render in the case would not be accepted by either the plaintiff or the defendant or maybe tainted with bias,” Mr. Amular said.

Mr. Amular also suggested the transfer of the expropriation case outside of Iloilo, describing the proceedings as having become “too politicized.”

PECO’s has petitioned the Supreme Court to move the legal proceedings, but was denied.

PECO’s renewal application for its franchise, which expired last Jan. 19, was denied by Congress. A new franchise was granted to MORE Power under Republic Act 11212.

PECO is currently operating under a provisional authority issued by the Energy Regulatory Commission on May 24, 2019, a day before the expiration of its certificate of public convenience and necessity.

PECO filed and won a case before a Mandaluyong RTC questioning the constitutionality of MORE Power’s franchise, but the Supreme Court has issued a temporary restraining order against the implementation of the decision. The case is under appeal. — Emme Rose S. Santiagudo

Steven Tan named president of SM mall management unit

SM PRIME Holdings, Inc. has appointed Steven T. Tan as the new president of its mall management unit, Shopping Center Management Corp.

In a disclosure to the stock exchange Tuesday, the Sy-led integrated property developer said Mr. Tan was promoted from his previous role as chief operating officer of SM Supermalls.

“His new position underscores the rapid and dynamic changes in the Filipino consumer behavior. Mr. Tan’s focus on building meaningful shopping experiences consistently throughout his career prepares him for this next phase,” SM Prime President Jeffrey C. Lim was quoted in the statement as saying.

Mr. Tan is noted for leading the launch of several premium malls under SM Prime’s portfolio such as SM Mall of Asia in Pasay City in 2006 and SM Aura Premier in Taguig in 2013.

As chief operating officer and senior vice-president, he was tasked to handle the company’s mall properties in both the Philippines and China. He joined SM in 2004 when he took charge of mall operations for The Podium.

Before joining the company, Mr. Tan was part of the team that formed Barcelo Grand Hotel in Shanghai, China. He also worked at Howard Plaza Hotel in Taipei, Taiwan from 1990 to 1998.

When he returned to the Philippines in 2001, Mr. Tan worked as regional director of marketing and communications at FilBarcelo Hotels and Properties Management Corp. and took charge of its external affairs.

Mr. Tan completed his Masters in Business Administration at the Paris School of Management. He took up Business Management at the University of Santo Tomas for his undergraduate studies.

As of end-September 2019, SM Prime had 73 shopping malls in the Philippines and seven shopping malls in China.

Other businesses of the company are in residential projects, commercial properties, hotels and convention centers.

Revenues from SM Prime’s mall business grew 7% to P46.43 billion in the first nine months of 2019, pushing total revenues up 14% to P85.03 billion. Earnings during the period rose 18% to P27.6 billion. — Denise A. Valdez

Art Fair PH 2020: Going beyond visual arts to attract more goers

FOR the 8th installment of Art Fair Philippines (AFP), the focus will be on the process of creating art.

“For this year, we have concentrated on processes on how art is made. We’re focusing on under-the-radar artists who we believe work differently, who look at how they make art, rather than the outcome,” AFP co-founder Trickie Lopa told BusinessWorld, shortly after fair’s press launch on Jan. 21 at Raffles Makati.

The Link carpark in Makati will again be transformed into an art space for the fair, which runs from Feb. 21 to 23.

This year, AFP — which will have 61 exhibitors — introduces a workshop and film section, and will hold a collaboration with the Italian Embassy in Manila.

WHAT’S NEW
In line with the focus on creation, one of the new activities is the ArtFairPH/Open Studios — a series of workshops and demonstrations facilitated by practitioners in the arts.

“The reason we are doing this is so that we can provide people with a peek into the artists’ creative processes — how he does it, and how he thinks about it,” AFP Co-founder Lisa Periquet said during the press launch.

The section will present a two-day workshop on photography with Paco Guerrero; lighting techniques for photographers with Neal Oshima and Mark Nicdao; making wooden furniture with Benji Reyes; a demo on watercolor painting techniques with Claude Tayag; a cyanotype workshop with Alexis Oshima and Angela Silva; rubber-cut workshop with members of the Association of Pinoyprintmakers; and a sculptural planter-making workshop with Rita Gudiño of Tahanan Pottery.

Meanwhile, as part of the celebration of Philippine cinema’s 100 years, the art fair is introducing the ArtFairPH/Film section. Its inaugural cinema program, curated by Erwin Romulo, Philbert Dy, and Teddy Co, explores the possibilities of the film for the next hundred years. A selection of the best feature-length and short films, narrative and experimental, documentary and animation will be screened to showcase the diversity of Philippine cinema.

This section will also feature a special exhibition titled Self-Portrait by Lyle Nemenzo Sacris which allows visitors to sit and be filmed to be a part of 7,107 portraits. The film program will also have a special outdoor cinema from Feb. 14 to 16, with films projected at the ceiling of the entrance of the former Philippine Stock Exchange building on Ayala Avenue.

Then there is ArtFairPH/Incubators which will focus on creative spaces outside the gallery format. In this section, art/n23 will showcase an beehive-designed virtual reality piece titled Doon (Over There) by Issay Rodriguez. Other exhibitors include Giatay, Limbo, Loadnadito projects, Project 20, and Signum.

AND THERE’S MORE
The ArtFairPH/Projects section will again feature commissioned works — “interactive and/or thought-provoking installations by internationally established Filipino visual artists.” The special exhibits this year focus on Salvador Joel Alonday, Perry Argel, Jaime De Guzman, Roedil Joe Geraldo, Jellyfish Kisses, Gene Paul Martin, and Neil Pasilan. This section will also include an exhibit of works by Carlo Villafuerte, the 2020 recipient of the Karen H. Montinola Selection, a private grant created in homage to art patron Karen Montinola. Meanwhile, Hublot will present new works by Rodel Tapaya.

Also part of the ArtFairPH/Projects section is a special exhibition of drawings by the late artist Onib Olmedo, done in cooperation with the artist’s estate. A panel featuring artists Elmer Borlongan and Allan Cosio, and moderated by Carlomar Daona, will also discuss the works of the expressionist painter as part of the ArtFairPH/Talks.

Works of American artist Sol Lewitt, who is known for his conceptual art and minimalist style, will be shown during the fair, as curated by New York-based art historian Carina Evangelista.

This year, ArtFairPH/Photo will highlight the works of Filipino contemporary artist Poklong Anading.

Aside from the panel discussion on Onib Olmedo, the lecture series ArtFairPH/Talks — done in partnership with the Ateneo Art Gallery and Museum Foundation of the Philippines this year — will see Italian ambassador to the Philippines Giorgio Guglielmino discussing his book, The Originals, about 30 artists that made a difference in the art scene.

The local participating exhibitors are: 1335 Mabini/GMJ, Altro Mondo Gallery, ARCHIVO 1984, Art Cube, Art Underground, Art Verité, Artery Art Space, art/n23, Association of Pinoyprintmakers, Avellana Art Gallery, bio | trans | forms, Boston Art Gallery, CANVAS, Denise Weldon | Tom Epperson Photographs, District Gallery, Eskinita Art Gallery, Galerie Roberto, Gallery of Fine Arts, Galerie Stephanie, Giatay, J Studio, Kaida Contemporary, León Gallery, Limbo, Loadnadito projects, Luzviminda, Mariyah Gallery, METRO, Mono8, Orange Project, Paseo Art Gallery, Pintô Art Museum, Project 20, Salcedo Private View, Secret Fresh, Signum, Silverlens, Strange Fruit, Tarzeer Pictures, Tin-aw Art Gallery, Tropical Futures Institute, and Ysobel Art Gallery.

The foreign galleries that are taking part in this year’s art fair are Art Porters Gallery, Gajah Gallery, Mind Set Art Center, and Yavuz Gallery, all from Singapore; Artemis Art and G13 Gallery from Malaysia; ENERGY FIELD, Gallery Kogure, Hanada Gallery, Kobayashi Gallery, SHUKADO, and YOD Gallery + Asian Art Center from Japan; Nunu Fine Art and GALERIE OVO from Taiwan; La Lanta Fine Art and Number1 Gallery from Thailand, Cayón from Spain, and Vin Gallery from Vietnam. The Italian embassy is also bringing Galleria Tiziana di Caro, an art gallery from Naples, Italy.

This year the art will not be confined only to the various floors of the carpark but will also be found at various sites around the Makati Central Business District.

Now on its third year, the 10 Days of Art initiative — a series of events around the city held by galleries, museums, bars, restaurants, and retail establishments — will run from Feb. 14 to 23. For the schedule and updates, visit www.10daysofart.com.

“The energy is so dynamic. It’s so different, working with a lot of young artists pushing boundaries. And that’s what we hope the fair will feel like,” Ms. Lopa told BusinessWorld.

“We feel that we’ve managed to do that. And we hope to continue doing that,” she added.

In the past two years, Art Fair Philippines has welcomed 30,000 visitors to the carpark. The most number of visitors who visited the art fair was in 2017 when 40,000 people explored the various exhibits.

As for this year’s expected foot traffic, Ms. Lopa said: “We just hope we maintain the numbers.”

Fair tickets can be purchased in advance at www.artfairphilippines.com. Tickets will also be available at the reception area. For more information, visit the Art Fair Philippines website (artfairphilippines.com) and follow Art Fair Philippines on Instagram (@artfairph) and Facebook (www.facebook.com/artfairph). — Michelle Anne P. Soliman

AboitizPower to issue nearly P10B in fixed rate retail bonds

THE board of directors of Aboitiz Power Corp. (AboitizPower) has approved the issuance of up to P9.55 billion in fixed-rate retail bonds out of the P30-billion bonds registered in 2017 under the shelf registration program of the Securities and Exchange Commission, it told the stock exchange on Tuesday.

It said subject to market conditions, the fourth tranche bonds “is expected to be offered to the general public in the second quarter of 2020.”

AboitizPower, the energy arm of Aboitiz Equity Ventures, Inc., said the proceeds of the offering “will be used to finance planned acquisitions, future investments, and/or other corporate requirements.”

The company issued the first tranche out of the shelf-registered bonds on July 3, 2017 amounting to P3 billion. The second tranche was issued on Oct. 25, 2018 amounting to P10.2 billion, and the third on Oct. 14, 2019 amounting to P7.25 billion.

It said the bonds would be listed with the Philippine Dealing and Exchange Corp. “as and when issued.”

AboitizPower said its board had delegated to the company’s management the final determination of the issue amount, interest rate, offer price, tenors, and other terms and conditions of the bonds, including the parties that will manage or be involved in the offer.

In the same board meeting that took place on Tuesday, the board approved the appointment of Danel C. Aboitiz to replace Mikel A. Aboitiz as member of the board audit committee of AboitizPower.

On Tuesday, shares in AboitizPower slipped by P0.55 or 1.66% to close at P32.65 each. — VVS

Blind Bulgarian artist finds a way to keep painting

PLOVDIV, Bulgaria — Stamen Karamfilov bends low over a canvas, adding the finishing touches to a woodland landscape — no mean feat considering the Bulgarian artist is almost totally blind.

He initially gave up all hope of painting again when he suddenly lost his sight in 2015, and at one point contemplated suicide.

Then, after the initial crisis passed, he discovered there was still a way he could put paint to canvas.

“Great experience and intuition — that’s the secret,” said the 76-year-old, grinning in the middle of his studio in the southern city of Plovdiv, surrounded by vibrant treescapes and abstracts.

He found he could still just about see the difference between blocks of color, between light and dark, through his left eye. For the rest he relied on the instinct, skill, and memories built up over his long career as an artist and church icon restorer.

“I only paint on black canvases, because I can recognize the warm colors — orange, red, light green… I go out (painting) when it’s bright and sunny, because I can ‘see’ the shadows. When it’s dark and grey, I can’t.”

In the early stages, he stands a few centimeters away from the canvas and breaks down the image in his head into small squares.

“Then I connect it — small square to small square.” After that he coats the surface with melted, transparent wax — a classical technique that gives a smooth finish and lets him feel the lines and blocks of the image underneath.

“I can feel the relief with the touch of my fingers and I can recognize if it is a tree or the sun.” He uses a blowtorch to melt the wax and listens out for the change in the noise the flame makes when it reaches the edge of the canvas.

His work has been shown in Germany, Greece, Turkey and several Bulgarian cities. He is now preparing for the 33rd exhibition in his career and hoping to pass on the enkaustikos wax technique to an apprentice.

“Why not?,” he said. “I’ll turn 77 this year, so the 33rd exhibition doesn’t sound too bad.” — Reuters

ATI posts double-digit rise in Batangas cargo volume

ASIAN Terminals Inc. (ATI) said it handled more than 310,000 twenty-foot equivalent units (TEUs) at the Batangas Container Terminal (BCT) in 2019, up 25% from the previous year.

In a statement on Tuesday, the listed port operator said: “Capping 2019 year on a record note, BCT handled over 310,000 teus of international boxes for economic locators and other businesses based mainly in Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon).”

The latest cargo volume recorded is about 20% higher than 2018’s volume, ATI said.

This keeps BCT’s “double-digit” cargo growth over the past six years, the listed company added.

ATI attributes its performance to its “growing customers” and the support it gets from its partners.

It said its expansion program for the BCT in 2019 resulted in “higher capacity and greater efficiency” for port users in the region.

ATI has said that its capital expenditure last year was set at $300 million (about P15.6 billion), where more than P2.5 billion would be spent in expanding BCT.

The listed port operator opened the BCT’s Berth 2 in April last year.

ATI said the additional berth would almost double BCT’s capacity to about 500,000 TEUs from the previous 350,000 TEUs. — Arjay L. Balinbin

BDO sells majority stake in its leasing subsidiary

BDO UNIBANK, Inc. is selling its controlling stake in its publicly listed subsidiary BDO Leasing and Finance, Inc. (BDOLF), to a third party for about P5.451 billion as part of the restructuring of its leasing business.

In a filing with the local bourse on Tuesday, BDO said it has entered into an agreement to sell its equity stake worth 88.54% of BDOLF.

The bank said the amount of consideration is equivalent to the sellers’ pro-rata share in the net asset value of the firm as of the closing date which is estimated to be at P5.451 billion. Apart from this, a premium of P400 million shall also be paid upon closing of the transaction.

BDO said so far, the purchasers already paid on Jan. 24 a total P65 million as downpayment for more than 1.9 billion shares in BDOLF. The balance shall be paid at closing.

“The restructuring of BDO’s leasing business is being undertaken to optimize the financial needs of clients in light of new accounting regulations covering lease transactions,” the bank said in the filing.

In January 2019, International Financial Reporting Standards or IFRS 16 — which requires leases to be recognized on-balance sheet just like a loan facility — took effect.

“This makes lease transactions a less attractive option to corporate borrowers compared to the past,” BDO said in a statement last Friday.

BDO said the sale was approved by its board of directors on May 25.

“We wish to reassure BDOLF clients that their financing requirements will continue to be serviced, and there will be no effective change in their existing lease arrangements that will be assumed by BDO Finance,” BDOLF President Roberto E. Lapid said in a statement on Friday.

Under the sales agreement, BDOLF will adopt a new name while its Articles of Incorporation and By-laws shall be revised based on its new business direction.

Moreover, a tender offer will also be done by the buyer as a regulatory requirement. This will provide minority shareholders a chance to sell their BDOLF shares.

As part of BDO’s restructuring of its leasing business, the parent bank incorporated its new, privately held finance firm BDO Finance Corp. to give customers access to lease products and services. BDO Finance will also assume current lease transactions booked by BDOLF.

BDO’s net income climbed by 43.35% to P11.967 billion in the third quarter of 2019 from P8.348 billion in the comparable year-ago period, buoyed by higher recurring core revenues.

This brought its income in the nine months to September to P32.1 billion, improving by 49.3% from the P21.5 billion seen in the same period of 2018.

The bank’s shares closed at P153.50 apiece on Tuesday, down by 1.60% or 2.50 centavos from Monday’s finish. — LWTN

Artist paints images of volcanic devastation using ash

TANAUAN — Ash from the rumbling Taal volcano has inspired an artist and instructor to paint watercolors using the gray powder that had covered the plants in her backyard.

Janina Sanico, who lives in the town of Tanauan, Batangas near the volcano, collected the ash, mixed it with water and binder, and started painting images, some of them depicting the devastation caused by the small but dangerous volcano.

“So that was the pain that I felt. So when I saw the animals, that’s where I got my inspiration for my paintings”, said the 24-year-old Ms. Sanico.

More than 140,000 people evacuated after Taal, one of the country’s most active volcanoes, erupted on Jan. 12, blanketing homes, schools, and farms with ash.

Sanico, a promoter of natural pigment water colors, said she has been selling her paintings and donating the profits to help thousands of people who had been displaced.

“Since this ash came from the earth, I experimented and I studied. Then when I posted my artwork on social media, I found that it was widely received by people,” said Ms. Sanico.

She has used different mediums such as coffee for painting before, but ash, she said, surprisingly worked well enough as long as it had enough water.

Volcanologists have lowered the danger level of Taal at 4 out of a possible 5, allowing people to return to their homes around the volcano except for those within a seven-kilometer danger zone.

At just 311 meters high, Taal is one of the world’s smallest active volcanoes. It killed more than 1,300 people in an eruption in 1911. — Reuters

Meralco unit Spectrum to double its installed power capacity this year

THE renewable energy subsidiary of Manila Electric Co. (Meralco) is targeting to double its installed capacity this year and reach a total of 40 megawatts (MW), as more residential customers turn to solar rooftop systems to power their homes.

“We’re close to 20 MW already of installed capacity for Spectrum,” Victor S. Genuino, president and chief executive officer of Meralco unit MSpectrum, Inc. told reporters after the launch of a solar rooftop project on Monday.

He said the company has a “big target” this year, including the expansion of its microgrid facilities on Isla Verde and Cagbalete islands.

“I think [for this year], we’re gonna aim to double. Some of it kasi are PPAs (power purchase agreements), ’di ba we have our existing PPA contracts, and then the others we will just add. So we’ll carry on the PPA for the following years,” he said.

“Maybe we wanna add an additional 20 MW this year. That would be good,” he added.

MSpectrum, or the Spectrum trade name it uses, is behind the power microgrid system in Cagbalete, a fishing island village and an expanding tourism spot in Quezon province.

In July last year, the system was launched after the completion of a hybrid generating plant that features 60 kilowatt-peak (kWp) solar photovoltaic system, 150-kWh battery energy storage, and two units of 30 kW diesel generators.

Initially, the microgrid will provide 24/7 power to around 200 households in Cagbalete, which Meralco described as a 1,795-hectare water locked island with two barangays. The island falls under the distribution utility’s service franchise.

Meralco previously launched a hybrid generating power facility in Isla Verde in Batangas province.

“We’re exploring a lot of different projects now. Think of it as anything off-grid,” said Mr. Genuino, who is also Meralco first vice-president and head of customer retail services and corporate communications.

“There are off-grid communities that still are unserved outside of our franchise area. There are different commercial establishments that don’t have access to direct power — resorts, for one, mining communities, agricultural farms. These are all target opportunities for microgrid,” he said.

He said what was committed by Spectrum this year is to expand the capacity of the Isla Verde project and to complete the second phase of the Cagbalete project. He said the initial phase covered the provision of power generation sets, but the second phase will be to put up solar panels and the batteries.

“We’re targeting no later than maybe the middle of this year, that should be completed already,” he said.

“Siguro less than 1 [MW] each,” he said, when asked about the resulting installed capacity in the islands.

Mr. Genuino said that he was hopeful that other industries would open in the two islands once power supply becomes stable.

He said Spectrum would also be offering more residential solar rooftop systems, including “big customers” that would be coming soon.

“I think this year we will see a lot more residential customers and small businesses adopt to solar,” he said. “We can go nationwide.”

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon

Rediscount rates increased

BSP
THE RATES have been raised following new rules from the Monetary Board. — BW FILE PHOTO

RATES APPLICABLE for the central bank’s peso rediscount facility this month as well as dollar or yen-denominated loans have been increased after the adoption of a flexible term premium which was approved by the Monetary Board.

“Such amendment in the rediscount rates is part of the broader reforms of the BSP (Bangko Sentral ng Pilipinas) to bring its policies in line with its lender of last resort function and to ensure that rediscounting policies remain relevant to the present and future demands on monetary management,” the BSP said in a statement on Tuesday.

In a previous circular letter, BSP Governor Benjamin E. Diokno said the yield on the peso rediscount facility will be the overnight lending rate which is currently at four percent to be added to a spread depending on the term of the loan.

“The appropriate spread for each term of the loan may change periodically to complement changes in the BSP’s monetary policy goals and to reflect movements in the market interest rates,” the central bank said.

With this, January peso rediscount rates as of Jan. 28 for loans with tenors of up to three months and up to six months are now at 5.4465% and 6.393%, up from the previously posted 4.5625% and 4.625%, respectively.

On the other hand, for the Exporters Dollar and Yen Rediscount Facility (EDYRF), computation for the yields will continue to be based on the 90-day London Inter-Bank Offered Rate plus the spread depending on the tenor of the credits, the BSP said.

For the dollar credit lines that form part of the EDYRF, increased rate for loans maturing from one to 90 days is at 4.85488% from (3.90838%); those with a tenor within a 91-180 day time frame will have a yield of 5.80138 (from 3.97088%); and those with a term of 181 days up to a year have a rate of 7.69438% from the initially posted 4.0338%.

Meanwhile, rates for yen loans have been increased to 2.89917% (from 1.95267%) for one to 90-day loans; 3.84567% (from 2.01517%) for credits with a maturity period of 91-180 days; and 5.73867% (from 2.07767%) for loans that will mature within 181-360 days.

The central bank lets banks access additional money supply by posting their collectibles from clients as collateral through the rediscount window.

This gives lenders the opportunity to use fresh cash — which could be in peso, dollar, or yen — to disburse more loans for corporate or retail clients and service unexpected withdrawals.

In 2019, peso rediscount loans totaled P122.167 billion. Banks did not avail of the peso rediscount facility in the last two months of the year as successive reserve requirement ratio (RRR) cuts from the BSP provided them additional liquidity.

The RRR for big banks now stands at 14% while that for thrift and rural lenders are at five and three percent, respectively after a total of 400 basis points reductions from the BSP last year. — L.W.T. Noble

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