three-time rotary club of manila journalism awardee 2006, 2010, 2012
U.N. Media Award 2008
BusinessMirror
www.businessmirror.com.ph
A broader look at today’s business Saturday 18,June 201430, Vol.2015 10 No. 40 Tuesday, Vol. 10 No. 264
Reserves declined due to forced outages of power plants
Luzon placed on red alert as power supply dwindled By Lenie Lectura
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hinning power reserves, which could result in power outages, forced the Department of Energy (DOE) to place Luzon on red alert on Monday afternoon. Despite this, DOE officials said the island of Luzon—which is home to the country’s central business district and economic zones—was able to avoid brownouts. “ There’s the 340 -megawatt [MW] regulating reserves that the NGCP [National Grid Corp. of the Philippines] was able to tap despite the red alert. This was the reason we did not have any brownout,” Energy Undersecretary Mylene C.
Capongcol said. The red alert was issued from 2 to 3 p.m. Prior to 2 p.m., NGCP issued a yellow alert starting 10 a.m. A yellow alert means thin power reserves. This is issued when power reserves dwindle and fall below 647 MW. “A red alert is issued when there is zero contingency reserve, which is about 647 MW. However, there is another security
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layer, the regulating reserves. This is NGCP’s last card,” Capongcol said. After 3 p.m. on Monday, the alert shifted to yellow. The DOE lifted the yellow alert at 4:30 p.m due to “sufficient operating reserves.” Monday’s yellow alert was the sixth notice issued by NGCP for this month. The same alert was issued on June 3, 15, 17, 26 and 27. In a separate advisory issued at 5 p.m., NGCP said, “Luzon grid was placed on red alert due to zero contingency reserve. Forecast load for 2 p.m. is 8,679 MW, while available capacity is 8,948 MW.” A red-alert notice is issued by NGCP due to forced outages of a number of power plants. The power plants that went on forced outage include Calaca 1 (300 MW), SLTEC 1 (121 MW) and Ilijan Block A (600 MW).
PHL economy seen growing by more than 7% this year on election spending
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he country’s economic growth, measured in terms of gross domestic product (GDP), could still breach 7 percent this year, on the back of “massive” election spending in the second half and the rollout of public-private partnership (PPP) projects. In its latest Market Call report, First Metro Investment Corp. and the University of Asia and the Pacific (UA&P) Capital Markets Research group said the sharp fall in fuel prices would also bolster consumption—one of the main drivers of Philippine GDP. “Expected GDP gains remain strong, as household consumption is supported with lower levels of inflation, more employment and more election spending,” the report read. “Inflation is likely to ease further, as food prices continue to fall or steady with
the revival of supply chains, and as crudeoil prices remain depressed due to oversupply from the Organization of the Petroleum Exporting Countries and North America,” the report added. The report noted that remittances from overseas Filipino workers (OFWs) will continue to remain strong and would boost consumption. Cash remittances, which were coursed through banks by OFWs, rose by 11.3 percent to $2.1 billion in March, the highest recorded in more than five years. Remittances in January to March this year reached $5.8 billion, 5.5 percent higher than the level recorded in the first quarter of 2014. The report noted that the increase in OFW remittances in the first half of the year may settle at 5 percent. The FMIC-UA&P Capital Market Research said the expected recovery in the See “PHL economy,” A8
See “Power supply,” A8
special report
banking sector still beyond the reach of filipino masses By Bianca Cuaresma
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Second of three parts
hile the banking sector continues to display formidable resiliency in managing risks amid the external headwinds, a significant number of municipalities in the country remain out of reach. A good number of Filipinos remain reluctant to own a bank account. According to data from the National Baseline Survey on Financial Inclusion (NBSFI) provided by the Bangko Sentral ng Pilipinas (BSP), 7 out of 10 Filipinos who have savings opt to keep their cash at home, instead of entrusting the money to the banks. The data parallel that of the World Bank’s latest review on global financial inclusion, saying that only 31 percent of all adults in the Philippines own a bank account, and pale in comparison with peer countries in the region. Likewise, in terms of geographical reach, more than a third of the country still does not have a banking presence. The data from the central bank show that 595 municipalities still have no banking presence as of 2014. While this was an improvement from the 611 unbanked municipalities in 2012, this still represented a large proportion of the country’s total 1,490 municipalities. Central bank Governor Amando M. Tetangco Jr. acknowledged that, no mat-
ter the relative success in establishing consumer access to the various financial services in most parts of the country, the BSP recognizes that the unbanked areas in the country remain “significant”. In separate studies, the International Monetary Fund (IMF) and the Asian Development Bank (ADB) said one of the barriers to a more extensive geographical reach by banks is the archipelagic
PESO exchange rates n US 45.1420
nature of the country. Also, as the central bank looks for solutions to the problem of the unbanked in the country, the NBSFI identified eight major reasons behind the Filipinos’ reluctance to open a bank account. The most basic was the lack of money to open a bank account. Other reasons cited include the lack of a need for a Continued on A2
n japan 0.3645 n UK 71.0806 n HK 5.8230 n CHINA 7.2704 n singapore 33.4757 n australia 34.5334 n EU 50.3920 n SAUDI arabia 12.0385 Source: BSP (29 June 2015)