BusinessMirror February 27, 2015

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U.N. Media Award 2008

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DRIVERS INCLUDE OIL STAYING BELOW $60, EARLY START OF ELECTION PERIOD, MANUFACTURING BOOM

Trade chief sees above 8% growth

By Catherine N. Pillas

Hollande visit yields ₧4.7-billion infra deals

T

rade Secretary Gregory L. Domingo is confident that an above 8-percent growth is achievable this year, especially if oil prices would stay below $60 a barrel.

Speaking at the Philippine Retailers Association’s 18th Outstanding Filipino Retailers and Shopping Centers of the Year (OFR-SCY) Awards held at the Crowne Plaza on Wednesday evening, the trade chief gave a rosy outlook for the year—but not without reservations.

“The gross domestic product [GDP] this year could be above 7 percent; but, if oil prices remain below $60 a barrel, we have a fair shot at exceeding 8 percent throughout the period,” Domingo said in his speech at the OFR-SCY Awards gala night.

Light sweet crude oil, the world’s most actively traded energy product, rose to $50.99 a barrel on the New York Mercantile Exchange; while Brent, the global benchmark, rose $2.97 to $61.63 a barrel on ICE Futures Europe.

Asked to expound on his forecast, Domingo said a slew of other factors, other than oil, would drive economic growth this year: the early start of the election period in the second half of the year, the rising GDP per capita, the continued boom of the business-process outsourcing (BPO) sector and strong inflows of investments in the manufacturing sector.

Specifically, the trade chief sees a growth of 10 percent to 15 percent for the manufacturing industry.

In the last quarter of 2014, manufacturing growth was pegged at 7.3 percent to lead the industry sector and close at an annual growth of 8.1 percent.

Continued on A2

By Butch Fernandez & Catherine N. Pillas

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PRA’s President’s Award as the “Pillar of Mixed-Use Developments” at the 18th OFR-SCY Awards.

Megaworld is currently in the midst of its P230-billion capital spending for its five township projects to bring its integrated developments to 20 by 2020.

Last year Megaworld announced that it is spending P230 billion for its existing townships until 2019. This figure is exclusive of the development costs for the five new townships that the company is launching this year.

HE Philippines inked six deals with France worth at least P4.7 billion (€94.24 million), after President Aquino and visiting French President François Hollande exchanged views on pressing regional and global issues.

Thursday marked the first visit of a French president to the Philippines since the establishment of the two countries’ diplomatic relations in 1947.

Hollande, during a meeting with the local business community, said he considers these partnership agreements as significant, as the Philippines is lacking $100 billion in terms of infrastructure funding. The French president said this assessment came out of a discussion with Mr. Aquino during the latter’s visit to France in the third quarter of 2014.

The deals signed by President Aquino and Hollande included the $24-million Muntinlupa Wastewater Treatment Project between Maynilad Water Services Inc. and JE Manalo/Suez Degremont Consortium; the $15-million solar plant in Victoria, Negros, with the companies Urban Solar and Sun Asia with MCB Industries SA; and the $42-million bridge development to cross the Parañaque River on the Naia Expressway between Vertex Tollways of San Miguel Corp. and Mattiere S.A. The agreements also covered the $27-million district cooling system for the facilities between Cyberzone Properties Inc. of Filinvest Alabang Inc. and France-based

See “Megaworld,” A2

See “Hollande,” A2

French President François Hollande walks during arrival honors at the Villamor Air Base in Pasay City on Thursday. Hollande is in the Philippines for a two-day visit, the first by a French head of state, to discuss issues on climate change. AP/Aaron Favila

MEGAWORLD TO BUILD 20 MALLS IN TOWNSHIPS M

By VG Cabuag

egaworld Corp. Chairman Andrew L. Tan disclosed the company’s plan to build 20 new malls, as it ramps up its retail offerings in its township projects.

Tan, speaking during Wednesday’s Outstanding Filipino Retailers’ and Shopping Centers of the Year (OFR-SCY) Awards of the Philippine Retailers Association (PRA), also said the property developer may hike its capital expenditures (capex) for

PESO exchange rates n US 44.1680

TAN: “Today we have around 250,000 residents and 150,000 BPO and office workers in our communities.

The number of BPO workers alone in our communities already comprises around 15 percent of the entire BPO population in the country.”

the next five to eight years. The 20 new malls and commercial centers, Tan said, will be built in Megaworld township projects across the country and will cater to residents and business-process outsourcing (BPO) employees in its developments.

“Today we have around 250,000 residents and 150,000 BPO and office workers in our communities. The number of BPO workers alone in our communities already comprises around 15 percent of the entire BPO population in the country,” said Tan, who received the

n japan 0.3717 n UK 68.5664 n HK 5.6942 n CHINA 7.0558 n singapore 32.6542 n australia 34.5494 n EU 50.1837 n SAUDI arabia 11.7769 Source: BSP (26 February 2015)

News

BusinessMirror

Friday, February 27, 2015

A2

Megaworld. . .

Fed policy. . .

Trade chief sees above 8% growth

Continued from A1

Mall in Eastwood City; Newport Mall in Newport City; Venice Piazza and Tuscany in McKinley Hill and Lucky Chinatown in Binondo, Manila.

There will be new malls in Uptown Bonifacio and McKinley Hill, both in Fort Bonifacio. They are expected to open within the year.

“Condominium residents, for example, need not go far to buy groceries and gifts, or even watch movies. BPO workers, on the other hand, need not take public transportation just to buy food or eat in restaurants. In our communities, everything is just within reach,” Tan said.

Megaworld started its commercial and retail business when Eastwood City was established in 1999.

Eastwood City, the country’s first cyberpark, is now home to almost 25,000 condominium residents and around 70,000 BPO and office workers. It used to be a 16-hectare township but it expanded its land area last year.

“Definitely we will be hiking our five-year capex,” Harold Geronimo, the company’s head of public relations and communications, said.

Tan said its 20 townships will be home to around 600,000 condominium and village residents, and 400,000 BPO and office workers.

“By 2020, we expect to increase our total population by 150 percent in all of our urban townships, which will reach at least 1 million,” Tan said.

Tan said the increase in population in its mixed-use communities “indicates the opportunities that await the company’s commercial and retail partners.”

For more than two decades, Megaworld has built malls and commercial centers in each of its townships to primarily cater to the growing communities within its developments.

Among its malls and commercial centers are the Eastwood Mall, Citywalk 1 and 2, and Cyber and Fashion

Continued from A1

Moreover, the trade chief said that the continued uptrend in GDP expansion would not be a “three-year to five-year trend,” but could be a seen in decades, if key growth factors are in place.

“If we continue to level the playing field, continue reforms and the calibrated liberalization, that could be a multidecade growth,” Domingo said in an interview following the

Yellen. . .

the trigger data to appear, yield-hungry portfolio funds could opt to stay invested in emerging-market economies (EMEs) as to the Philippines.

“That the Fed chairman comments were not clear on the ‘when’ shows the Fed is continuing to veer away from calendar-dependence and reaffirms its datadependence [stance]. As we saw yesterday [on Wednesday], market received the Fed comments as dovish, and encouraged some “risk on” trades,” Tetangco said. “We may therefore see capital moving further to the long-end of the US curve or to EMEs,”he added. On February 12 when the Monetary Board convened again to determine which way interest rates were headed over the next 18 to 24 months ended with the decision to keep the rates frozen for now.

■

event. Domingo noted that any move to liberalize sectors should be done in a gradual manner, as the current fastest-growing sectors are those that have been deregulated over the years, such as manufacturing and the BPO industry.

“These sectors were liberalized in the long term, over the course of the years, so that’s good for the growth and competitiveness of our industries; it [liberalization] cannot be too fast,” cautioned the trade chief.

Continued from A8

below levels that could be expected given population growth and the likely rate of household formation.

The Fed is also dissatisfied with wage growth, though Yellen said it foresees improvement as a healthier economy leads employers to raise pay to fill vacancies. Though the Fed historically tends to worry more about prices rising too fast, it is now concerned that inflation is dipping further below the 2-percent target rate that it sees as consistent with a strong economy.

Continued from A8

“The Federal Open Market Committee’s (FOMC) assessment that it can be patient in beginning to normalize policy means that the committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings. If economic conditions continue to improve, as the committee anticipates, the committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis,” she added.

Tetangco said this points to a US Fed preference to anchor any policy decisions down the line on compelling data rather than a particular day or week in the calendar. In that period when the US Fed scans the economic landscape for

‘Patient’ still the watchword

Because of the tepid pay growth and excessively low inflation, Yellen said the Fed can remain “patient” in deciding when to finally start raising a key interest rate, which it’s kept at a record low near zero for six years.

Yellen repeated an explanation she used last December: That patient means no rate increase for at least two Fed meetings. But she added that even after patient disappears from the Fed’s policy statement, it won’t mean a rate increase is necessarily imminent. Rather, the Fed will

begin to consider a possible rate hike on a “meeting-by-meeting” basis.

Flexibility will remain paramount.

Among the lingering unknowns:

Timetable for rate hike

■

Yellen offered no further clarity on the issue of most importance to investors: When the first rate hike will occur. She did say Fed officials will need to see further improvement in the job market and become “reasonably confident that inflation will move back over the medium term toward our 2-percent objective.”

The requirement for rising inflation may prove the tougher hurdle.

That’s because many economists think inflation is likely to fall further below the 2-percent target in coming months as the effects of lower gas prices and a stronger dollar work their way through the economy. Many economists think Yellen’s testimony has ruled out a rate hike before June. And, some now say the most likely date for the first hike has slipped to September or possibly even later this year. AP

3-DAY EXTENDED FORECAST FEBRUARY 27, 2015 | FRIDAY

TODAY’S WEATHER

FEB 28 SATURDAY

MAR 1 SUNDAY

METRO MANILA

22 – 33°C

23 – 32°C

TUGUEGARAO

22 – 33°C

22 – 32°C

The areas suited for gradual liberalization, Domingo said, are infrastructure, transport and logistics.

On this note, the trade chief, likewise, noted that certain requirements in the retail industry must eventually be relaxed over time.

There is a requirement in the retail industry that foreign investors may only own a retail business with a minimum paid-up capital of $ 2.5 million or more, provided that investments for establishing a store is not

Hollande. . .

LAOAG

LAOAG CITY 23 – 30°C

SBMA/CLARK 23 – 33°C

MAR 1 SUNDAY

MAR 2 MONDAY

22 – 32°C

METRO CEBU

24 – 32°C

24 – 32°C

24 – 31°C

21 – 32°C

TACLOBAN

24 – 30°C

24 – 29°C

24 – 31°C

22 – 31°C

CAGAYAN DE ORO

TAGAYTAY CITY 20 – 29°C

23 – 31°C

22 – 31°C

22 – 32°C

23 – 31°C

23 – 32°C

25 – 29°C

24 – 30°C

24 – 32°C

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24 – 33°C

BAGUIO

15 – 24°C

14 – 24°C

15 – 23°C

SBMA/ CLARK

23 – 32°C

22 – 33°C

23 – 32°C

ZAMBOANGA

TAGAYTAY

20 – 30°C

20 – 30°C

LEGAZPI ILOILO/ BACOLOD 24 – 32°C METRO CEBU 25 – 31°C

TACLOBAN CITY 23 – 31°C

CAGAYAN DE ORO CITY 22 – 31°C

ZAMBOANGA CITY 24 – 33°C

PUERTO PRINCESA

ILOILO/ BACOLOD

23 – 32°C

24 – 32°C

SUNRISE

SUNSET

MOONSET

MOONRISE

6:14 AM

6:03 PM

1:07 AM

12:52 PM

21 – 29°C

LEGAZPI CITY 24 – 31°C

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

renewable energy and education, according to Huang. According to Communications Secretary Herminio B. Coloma Jr., Hollande and Mr. Aquino also signed a “declaration of intent” of the two governments on protection of environment and sustainable development of marine resources.

“France can stand by [the Philippines] should you need to find resources for your development,” Hollande said, adding other areas that President Aquino also mentioned for cooperation is in health and tourism.

This offer of services, technical know-how and assistance is ever more pressing, considering the vulnerability of the Philippines to disasters, a consequence of the changing global environment, Hollande said.

The French president gave highlight to his push for climate-change discussion during his address to the Makati Business Club and top government officials on Thursday, eyeing an “alliance” with the Philippines in view of France’s hosting of the 21st United Nations Climate Change Conference in the latter part of the year.

FEB 28 3-DAY SATURDAY EXTENDED FORECAST

METRO DAVAO

TUGUEGARAO CITY 22 – 33°C

BAGUIO CITY 14 – 25°C

PUERTO PRINCESA CITY 24 – 32°C

Continued from A1

energy solutions provider Cofely.

Two other agreements were memorandum of understanding, whose worth has yet to be revealed. One of these agreements is a “cooperation” deal between Ayala-Metro Pacific Investments Corp. and RATP Dev for the operations and maintenance agreement contract for the Manila Light Rail Transit System 2.

The other is a mutual cooperation agreement for electricity development using renewable-energy sources in the Philippines between PNOC Renewables Corp. and Akuo Energy, Bell Pirie and DCNS. Notably, France-Philippines Business Council Head Anton Huang said a separate agreement from the six already signed on Thursday evening is the one between the Light Rail Manila Consortium and the French firm Alstom Transport.

This deal for the LRT 1 extension project will be signed soon, Huang said, but declined to disclose the partnership’s worth.

Other areas ripe for investment and which France can supply are

MAR 2 MONDAY

less than $ 830,000. For those specializing in high-end or luxury products, the paid-up capital per store should not be less than $ 250,000.

The multidecade growth will also be given a substantial push if investments in two key sectors are maintained: education and infrastructure.

“As we move on to a higher GDP per capita, we have to move up our value chain, and we can only do that if we educate people better and better,” Domingo added.

RIDGE OF HIGH PRESSURE AREA (LPA) AFFECTING NORTHERN LUZON. (AS OF FEBRUARY 26, 5:00 PM)

Ridge of High Pressure Area (HPA) will bring fair weather to the country except for isolated rainshowers and thunderstorms in the afternoon or evening.

METRO MANILA 22 – 32°C

news@businessmirror.com.ph

24 – 31°C

HALF MOON FULL MOON

SOUTH HARBOR

FEB 26

1:14 AM

24 – 31°C

24 – 31°C

24 – 32°C

MAR 6

2:05 AM

CELEBES SEA

0.09 METER

Partly cloudy to at times cloudy with rainshowers

23 – 33°C

23 – 32°C

24 – 33°C

Cloudy to at times cloudy with rain showers and/or thunderstorms

Weekday hourly updates: 6:00 AM on Balitaan, 7:00 AM & 8:00 AM on Good Morning Boss!, 9:00 AM, 10:00 AM, 11:00 AM, 12:00 PM, 1:00 PM on News@1, 3:00 PM, 4:30 PM, and 6:00 PM on News@6

www.panahon.tv

SABAH

12:51 AM

Partly cloudy to at times cloudy with rain showers and/or thunderstorms

Watch PANAHON.TV everyday at 5:00 AM on PTV (Channel 4).

METRO DAVAO 24 – 31°C

LOW TIDEMANILA HIGH TIDE

@PanahonTV

4:54 PM

0.85 METER

Partly cloudy skies

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BusinessMirror Special Feature

Friday, February 27, 2015 A3

Economy

A4 Friday, February 27, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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MRT 3 rehab to begin on Saturday

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By Lorenz S. Marasigan

EHABILITATION efforts for the Metro Rail Transit (MRT) Line 3 have forced the Department of Transportation and Communications (DOTC) to temporarily cut the operations of the ailing train system this weekend.

Rail-replacement works will start from 9 p.m. on Saturday and will end on 12 p.m. on Sunday, hence, the shortened operations during those days.

“As part of our promise to improve and rehabilitate the MRT 3 system, we will conduct the first of a series of rail-replacement works over the coming weekend. We are doing this to enhance safety and minimize glitches, and we chose this schedule to mitigate inconveniences to the riding public,” Transportation Secretary Joseph Emilio A. Abaya said on Thursday.

Newly appointed MRT 3 General Manager Roman Buenafe explained that the rehab works would cover roughly 150 meters of rail replacement.

“We will use 150 meters worth of stabling rails from the depot to replace the more critical portions of the mainline between Taft Avenue and Magallanes,” he said.

Stabling rails are the end-portion of the tracks within the MRT 3 depot, and are intended to be used as parking facilities for light rail vehicles (LRVs) which are not in use.

Coaches run on the stabling rails at less than 5 kilometers per hour (kph) until they come to a full stop, without passengers onboard.

Meanwhile, train cars carrying passengers run on the mainline rails that need to be replaced at speeds ranging from 15 kph to 40 kph.

“Since safety is my priority, this solution is very clear and simple to me. I proposed to switch the wornout mainline rails with the stabling rails in the interest of MRT 3 passengers,” Buenafe added.

The transport chief said his office and the management of the train system will calculate how many more early-close, late-open weekends will be implemented in the coming months based on the time-and-motion study to be conducted during the

actual works this weekend.

“We will firm up our schedule after this weekend and announce it to the public. In the meantime, we would like to reassure our riders that the government is taking the necessary steps to rehabilitate and improve the MRT,” Abaya added.

The transportation department is set to receive the recently procured 7,296 linear meters worth of brand-new steel rails by June 2015. These will be used for further rail-replacement works later this year to better assure the rail-

way’s safety and reliability.

Rail is the No. 1 component of the MRT that is most dilapidated, experts from MTR Corp. Ltd., the operator of the railway system in Hong Kong, concluded last year.

The poor state of the train system’s rails was the culprit on why the MRT management had to lessen the speed of the railway facility from 60 kph to 40 kph.

Every day, passengers complain of long queues caused by the lack of LRVs, an inefficient ticketing system, humid train cars, faulty elevators and escalators.

To address the present woes of the MRT, the government is rolling out a P9.7-billion multiyear venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino.

It is also pursuing a P54-billion takeover of the train system.

Should the buyout be completed in 2016, the transportation agency may then bid out the operations and maintenance contract of the line, thereby tapping private-sector efficiency and customer service orientation for operational needs, while retaining regulatory functions for passenger protection with the government.

On the other hand, the group of businessman Robert John L. Sobrepeña is proposing to do a “quick fix” solution to make the train system safe for public transport.

Together with foreign firms Sumitomo Corp. of Japan and Globalvia Infrastructuras of Spain, Metro Global Holdings Inc. is proposing to “fix” the ailing system through a $150-million investment that involves the procurement of a total of 96 new train cars, and the rehabilitation of the existing 73 coaches, increasing its capacity by fourfold to 1.2 million daily passengers.

Under the proposal, a single point of responsibility will be implemented: meaning the rehabilitation and the maintenance of the line will be handled by a single company.

Separately, Metro Pacific Investments Corp. is proposing to shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity rental payments.

The group of businessman Manuel V. Pangilinan, which earlier entered into a partnership agreement with the corporate owner of the MRT, intends to spend $524 million to overhaul the line.

The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.

It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal.

PHL included in economies seen to lead global growth

E

merging markets in Asia and Africa still reign supreme: They’re at the top of global growth projections over the next two years.

The world is expected to grow 3.2 percent in 2015 and 3.7 percent next year, after expanding 3.3 percent in each of the past two years, according to a Bloomberg survey of economists. China, the Philippines, Kenya, India and Indonesia, which together make up about 16 percent of global gross domestic product, are all forecast to grow more than 5 percent in 2015.

By comparison, the US and the UK, which combined account for about a quarter of global growth, are expected to grow 3.1 percent and 2.6 percent this year, respectively. The euro area probably will expand just 1.2 percent as European Central Bank President Mario Draghi deals with a fragile Greece and embarks on a bond-purchase program to stimulate the region’s growth.

China still remains the fastest-growing G-20 nation, even though the Asian economy is no longer expanding at the pace it did a few years ago.

China’s economy grew 7.3 percent in the fourth quarter of 2014 from a year earlier, and is expected to slow to 7 percent in 2015.

To counter that slowdown, People’s Bank of China policy-makers are boosting monetary stimulus. The central bank cut its benchmark interest rate in November for the first time since 2012. This month officials lowered by 50 basis points the deposit reserve ratio, which is the amount of reserves that banks need to keep on hand.

Nigeria, Africa’s largest economy, is projected to expand 4.9 percent this year, according to the Bloomberg survey. Kenya will probably grow 6 percent in 2015, even as unemployment and poverty remain stubbornly high, with over 40 percent of Kenyans living below the poverty line.

US growth forecasts for 2015 are coalescing around 3 percent even as the dollar soars to its highest level in more than a decade. As growth picks up, the Federal Reserve is weighing whether to raise interest rates for the first time since 2006. Their benchmark federal funds rate has remained near zero since December 2008.

The analysis includes 57 countries, each with 10 or more responses in the Bloomberg surveys. Bloomberg News

briefs mining ‘horrors’ unraveled at forum

Legislators, environmental advocates and grassroots leaders presented harrowing cases of social and environmental impacts suffered by communities and the environment during the two decades of implementation of the Philippine Mining Act of 1995 during a people’s forum held on Thursday at the University of the Philippines Diliman.

These cases, antimining groups said, dispute repeated claims by the Joint Foreign Chambers (JFC) and other mining industry lobbyists that Philippine mining laws provide a “model” framework for sustainable development through its environment and social safety nets.

“The concrete experiences of affected communities and outcomes of independent investigations debunk the preposterous claim of the JFC and the Aquino administration that the large-scale mining regime in the Philippines are socially responsible and environmentally safe. In the two decades of implementation of the Mining Act, there are already a total of 19 major mine spills—not including the slow but continuous outflow of harmful tailings from the facilities of countless mines across the country—have dispossessed communities of their lands and livelihood, and have caused massive pollution and negative health impacts,” said Clemente Bautista, national coordinator of environmental activist group Kalikasan.

The forum, entitled Pagbawi 2015: communities struggling for land, life and rights was organized

by Kalikasan, Defend Patrimony, Center for Environmental ConcernsPhilippines and other nongovernmental organizations.

corrupt practices at l.t.o. blamed for poor air quality

Environmental advocates on Thursday blamed Metro Manila’s poor quality to corruption at the motor vehicle emission testing process at the Land Transportation Office (LTO).

According to the Coalition of Clean Air Advocates of the Philippines (CCAAP), the practice of “no show” and “nonappearance” at private emission testing centers (PETC) accredited by the LTO remains rampant and should be stopped.

Members of CCAAP trooped to the Department of Transportation and Communications (DOTC) and called on Transportation Secretary Emilio Joseph A. Abaya to take immediate action and stop the corrupt practices at PETC. “Eighty percent of air pollution in Metro Manila comes from unabated emissions of motor vehicles and the Philippine Clean Air Act of 1999 requires all motor vehicles to undergo and pass a mandatory emission test before LTO can register them,” Dr. Benito Atienza, a trustee of CCAAP, said in a statement. Jonathan L. Mayuga

napocor to build p800-m power plants in southern mindanao

THE National Power Corp. (Napocor) is planning to build power plants with 5 megawatts (MW) of generation capacity each in the provinces of Basilan, Sulu and Tawi-Tawi.

Napocor President Ma. Gladys Cruz-Sta. Rita said construction will be completed within two-and-a-half years, with the first 2 MW in each of the three provinces to be ready by 2016. All power facilities will cost P800 million.

The Napocor chief, likewise, appealed to the local governments to assist the state firm in securing new areas for the new power plants.

Meanwhile, Sta. Rita urged all electric cooperatives to pay off their debts owed to the state firm. The three provinces owe the Napocor P3.4 billion in unpaid fees. Lenie Lectura

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Friday, February 27, 2015 A5

IT firms offering highest pay to executives

P

By Catherine N. Pillas & Cai U. Ordinario

layers in the information technology (IT) sector, particularly those specializing in software, continue to be the toppaying firms across all position levels, according to online job marketplace Jobstreet.

In Jobstreet’s annual salary report for 2015, the IT sector, with its increasingly specialized requirements, has emerged as the highest-paying sector, giving a competitive compensation package across the three position levels identified by Jobstreet.

The report highlighted the Top 10 best-paying sectors by specialization, according to Rose Lyn Ombao, marketing manager at Jobstreet, with the IT sector topping the list in the junior executive, supervisory and managerial levels.

For the junior executive level, which means one to four years of ex-

perience, the highest salary offered is P37,000 for employees in the IT computer-software development.

For the supervisory level, still in the IT computer-software area, the top salary is at P 67,000. For the managerial position, those in the same sector can fetch a salary of P100,000.

For each level, the second highestpaying specialization is network and database administration, still belonging to the IT sector.

Ombao said that, in this year’s report, data were extracted per specialization and not just per industry to put more focus on the skills and abilities of the

job seeker instead of confining a person within an industry.

The study surveyed 38,000 postings of company-clients of Jobstreet across different industries.

Meanwhile, the country’s information and communication sector booked P229.7 billion worth of value-added revenues in 2012, according to the final results of the 2012 Census of Philippine Business and Industry (CPBI) released by the government on Thursday.

The Philippine Statistics Authority (PSA) said there were 4,862 establishments engaged in information and communication activities in 2012.

“Value added is gross output less intermediate input. Gross output for information and communication is the sum of the total revenue [less interest income, rent income from land, dividend income, royalty income and franchise income], capital expenditures of fixed assets produced on own account and change in inventories,” the PSA explained.

The lion’s share, or 54.7 percent, of the revenues was accounted for by wired telecommunications activities, including wired Internet access service activities, which booked revenues

PENSHOPPE BAGS 2015 GLOBAL RETAILER PLUM

Golden ABC Chairman and CEO Bernie Liu (second from right), the man behind rising international apparel brand Penshoppe, receives the 2015 “Global Retailer of the Year” award from the Philippine Retailers Association (PRA) during the 18th Outstanding Filipino Retailers and Shopping Centers of the Year (OFR-SCY) Awards—considered the “Oscars of Philippine retailing”—gala night held on Wednesday at the Crowne Plaza Manila Galleria in Ortigas. Photo shows Liu with (from left) Trade Secretary Gregory L. Domingo; PRA Chairman Frederick D. Go, president of Robinsons Recreation Corp.; Golden ABC Head for Fashion Retail Alice Liu; Penshoppe Brand Director Jeffrey Bascon; and PRA President Lorenzo “Enchong” C. Formoso, COO of Duty Free Philippines. PRA recognized Penshoppe, a homegrown retailer, for successfully expanding its business internationally and establishing its brand on a global scale. The OFR-SCY Awards, jointly organized by the PRA and the Department of Trade and Industry since 1997, honors the cream of the crop of Philippine retailing. It seeks to honor retailers and shopping centers that epitomize the model of success and good ethical practices in retailing. PRA is now open for nominations for the 19th OFR-SCY Awards next year.

Manufacturing revival boosts industry revenues

By Cai U. Ordinario

T

he double-digit increase in gross revenues in the manufacturing sector boosted the growth of the Total Gross Revenue Index of industries to 9.4 percent in the third quarter last year.

Data released by the Philippine Statistics Authority (PSA) on Thursday showed that the manufacturing industry’s gross revenues increased to 10.8 percent in the third quarter of 2014 from 7.9 percent in the same period in 2013.

The PSA based this on the release of the February 2015 issue of the Quarterly Economic Indices (QEI) of the Philippines. “[The QEI] intends to provide measures of growth in production, gross revenue, employment and compensation in the various sectors of the economy,” the PSA explained.

Apart from manufacturing, other industries that posted double-digit growth in gross revenues were finance, which grew 10.2 percent in 2014, a slowdown from the 17.1 percent posted in 2013.

The PSA also said the real-estate industry posted a growth of 10.1 percent. This was also slower than the 10.8 percent the industry registered in 2013.

“Trade also expanded with a 9.4-percent growth,

albeit a slowdown from its growth of 9.9 percent in 2013. Private services, on the other hand, decelerated to 5.9 percent, from 8.8 percent in the same period last year,” the PSA added.

Meanwhile, the manufacturing sector’s growth in gross revenues translated into an increase in the total employment index, total compensation index and total compensation per employee index.

The total employment index grew 4.2 percent in 2014, from 1.9 percent in 2013. The manufacturing sector posted an increase of 5.8 percent in 2014, from 3.7 percent in 2013.

However, the industry that recorded the highest increase in total employment index was real estate, which posted a growth of 11.6 percent in 2014, from 9.9 percent in 2013.

The sector that posted the highest growth in the total compensation index was finance, which grew 23.1 percent in 2014 from 4 percent in 2013.

Total compensation per employee index accelerated slightly to 3.4 percent, from 3.3 percent registered last year.

The sector that had the highest growth in total compensation per employee index was finance, which posted a growth of 11.7 percent in 2014, from 1.5 percent in 2013.

worth P125.7 billion in 2012.

A far second was computer programming, including consultancy and related activities, with P30.3 billion, or 13.2 percent, of the total. Not far behind was wireless telecommunications activities with P22.7 billion, or 9.9 percent, of the total.

At regional level, Metro Manila accounted for the highest value added, contributing 93.3 percent, or P214.3 billion, of the total.

Central Visayas and Calabarzon followed next with P6 billion, or 2.6 percent, and P1.7 billion, or 0.7 percent, respectively.

Meanwhile, in terms of income generated, the PSA said data showed that the information and communication sector raked in P465.3 billion in 2012.

Establishments over 20 employees booked the largest income worth P445.6 billion, or 95.8 percent. Establishments with less than 20 employees contributed P19.8 billion, or 4.2 percent, of the total income.

The top revenue generator was wired-telecommunications activities, with an income of P198.3 billion, or 42.6 percent, of the total.

This was followed by wireless

telecommunications activities with P78.3 billion, or 16.8 percent, of the total, as well as computer programming, consultancy and related activities with P65.8 billion, or 14.2 percent.

Similar to value added, most of the sector’s income came from Metro Manila with P439.4 billion, or 94.4 percent, of the total.

PSA data showed that this was followed by Central Visayas, which contributed P8.5 billion, or 1.8 percent, of the total, and Calabarzon with P3.3 billion, or 0.7 percent.

The PSA said the 2012 CPBI was conducted between April and July 2013. Total response rate for information and communication sector was 91.9 percent, or 2,786, of 3,032 establishments.

T h i s i nc lude d re ce ipt s of “good” questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Of the total responses, 39 establishments responded online, two sample establishments accomplished e-questionnaires and seven establishments submitted in portable document format through e-mail.

Residents confident of MM’s resilience

A

study conducted by Shell Scenarios team and global research firm Ipsos revealed that the majority of residents in Metro Manila still think that the city is resilient enough to withstand the challenges posed by natural disasters and rapid urbanization.

“While the overall positive perception of Filipinos is truly admirable, it is important that this mental and emotional resilience does not lead to an oversight on important physical and actual resilience,” said Glynn Ellis, strategic energy advisor of Shell corporate strategy and planning.

Of the 1,000 adult respondents surveyed from November 21 to December 19, 2014, 81 percent said they are satisfied with their quality of life.

They cited happy, nice and beautiful places (33 percent), recreational areas (30 percent) and ample job opportunities (21 percent) as positive attributes of living in the metropolis.

On the negative side, they are worried about the problems on peace and order (30 percent), chaos (20 percent) and crowd (16 percent). Roderick L. Abad

Opinion BusinessMirror

A6 Friday, February 27, 2015

editorial Understanding gasoline price movements

T

HE price of crude oil has dominated the global financial news for the last six months. Price movements have been analyzed from every conceivable viewpoint in light of economic and geopolitical considerations.

Here in the Philippines, hundreds of millions of pesos have been saved— and probably spent on other things—with the large drop in gasoline prices.

Between July 2014 and January 2015, the average price of crude oil had fallen by 50 percent.

On December 7, 2014, the newspaper headline was “Oil firms roll back fuel prices by as much as P2.50.”

On February 8, 2015, the headline read “P2.00 hike in fuel prices expected this week.”

When people hear about the price of oil going down, the complaint is that the local oil companies are not dropping the price of gasoline as much or as fast as the price of oil is going down. When gasoline prices are raised, the opposite complaint is voiced.

The problem is, most of us do not understand about crude prices or about gasoline prices.

The price of oil that we usually read about is not the “real” price. What is quoted is the price of crude-oil futures on the US and European commodity markets. This is the price set by the buying and selling of the financial instrument or contract, not the price of the physical oil. In fact, 90 percent of these contracts involve a cash settlement not the actual transfer of barrels of crude oil. These transactions take place between speculators, who are “betting” on the future price of physical oil and can be “pushed” in a particular direction regardless of actual physical supply and demand.

The pump price of gasoline is based about 50 percent on the price of crude oil; the rest on the refining costs. Therefore, crude can be going down, but other costs may be stable or even increasing. Further, the Philippines imports about 50 percent of our petroleum needs not in crude but in finished products, like certain types of fuel and liquefied petroleum gas (LPG).

The price of the finished products is based on the Mean of Platts Singapore, which is the average of a set of Singapore-based oil-product price assessments. So if the LPG price does not fall as much as crude oil, blame the refiners in Singapore.

But pricing has many other inputs. Cushing, Oklahoma, USA, is home to 2,000 residents and is the site of the world’s largest oil-storage facility, and the supply of oil in Cushing helps determine prices on this side of the world.

Global gasoline prices are also moved by the New York Harbor Conventional Gasoline Regular Spot Price. As a major importer, price watchers follow how many oil supertankers or Very Large Crude Carriers are heading to China indicating their demand, which might move prices.

Finding someone to point a finger at for the way gasoline prices move is about the same as finding someone to blame for bad weather.

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Forewarned is forearmed James Jimenez

I

spox

N preparation for the 2016 national and local elections, the Commission on Elections (Comelec) has been conducting public bidding for the lease of Election Management System (EMS) and Precinct-Based Optical Mark Reader (OMR), or Precint Count Optical Scan (Pcos) System, and for the Lease of EMS and Precinct-Based Direct Recording Electronic (DRE) technology. In other words, the Comelec has been accepting bids for the supply of PCOS-like vote-counting machines and touchscreen voting machines, respectively—both for use in the elections next year.

The fact that the bidding for these equipment started in December of 2014 was seen by some quarters as being indicative of unseemly haste by the Comelec, to say the least. The events of last Thursday, however, proved the wisdom of setting an early start.

On February 25, the Comelec Bids and Awards Committee (BAC) declared a failure of bidding for both OMR and DRE, bringing the entire bidding process to a grinding halt.

For the supply of OMR, one of the two bidders submitted a bid in excess of the Approved Budget for the Contract, resulting in the automatic rejection of that bid. The second bidder, on the other hand, submitted what amounted to an incomplete bid. Under the

implementing rules and regulations of Republic Act 9184–the Government Procurement Reform Act–an incomplete bid is considered nonresponsive, and therefore automatically disqualified. As it happened, the bidder with the unresponsive bid also submitted a bid for DRE–the only one to do so; and as with its bid for the OMR, its DRE bid was incomplete, resulting in its immediate rejection.

The two bidders were given three days to file their motions for reconsideration. This means that each bidder has the opportunity to change the BAC’s mind about their bids. If the BAC finds no reason to revisit its declaration of a failure of bidding however, the rules call for a second round of bidding. Both bid-

ders, of course, remain eligible to participate, but there is a possibility that they might not have the field to themselves any longer.

And just to head off the inevitable speculation and doom-saying, negotiated contracts are not being considered at this point.

What is topmost on the Comelec’s mind is, instead, the impact this failure of bidding will have on its timetables. The award of the contracts for both OMR and DRE were initially scheduled for early March, which presupposed a successfully concluded bidding in the last two weeks of February. With the second bidding looming, these expectations have to be revisited.

The second bidding will be a single-stage affair, which means it will most likely take about two months to complete. Assuming that the challenge—and yes, challenges there will be–to last Thursday’s declaration doesn’t drag on too long, it will probably be safe to assume that the next round of bidding will be called by mid-March. Counting two months from that point lands the Comelec in mid-May, presumably less than a year before the next elections, which are scheduled to take place on the 9th of May, 2016. Realistically, this means that the contracts might be awarded sometime in June. Fortunately, a lot of flexibility has been built into the timetables–thanks in no small part to the early start of

the bidding process. Another thing that needs to be appreciated about this whole thing is its scope. Immediately after the announcement of failure was made, some expressed concern about whether elections in 2016 would still be held.

Again, just to head off toxic idle speculation, this turn of events will not result in a return to manual elections or, worse, a no-election scenario. Keep in mind that the bidding in question covered only 24,000 OMR units and 400 DRE voting machines.

This equipment is meant for deployment in the National Capital Region for the OMR, and a small pilot area for the DRE. In the unlikely event that none of these units are actually procured, the Comelec will still be able to use the more than 80,000 Pcos machines that saw action in 2013. The downside to that back-up plan, however, is that it will also require a return to a Pcos-voter ratio of approximately 1:1000–1 Pcos machine for every thousand voters, taking into consideration the expected increase in the number of voters.

The upside is, because the Comelec started the bidding process earlier than it used to, it is seeing all these possible scenarios from a long way off. And as they say, forewarned is most definitely forearmed.

James Jimenez is the spokesman of the Commission on Elections.

Opinion BusinessMirror

opinion@businessmirror.com.ph

The Edsa revolution of 1986 and the Philippine economy

My private Edsa history

EAGLE WATCH

I

was a college freshman in 1986 when the Edsa Revolution happened. I had little knowledge of the intricacies of the economy then, except for the price of galunggong and our struggling bag factory.

The price of galunggong or round scad was used by then Presidential candidate Corazon C. Aquino as a major campaign issue against incumbent Ferdinand Marcos.

The ordinary man’s fish was the basic barometer of the economy then. Almost 30 years later, how has the Philippine economy changed and what has the revolution done to address core economic issues of that time?

Looking back at data, the core indicators of the economy in 1985 actually reflected a severe downturn that affected much of the populace. The downturn started in 1983 after the death of former Sen. Ninoy Aquino spiralling into an economic crisis. For two years, the Philippine economy declined by 7.3 percent. Inflation hit a high of 50 percent in 1984 and 23 percent in 1985 pushing lending rates to about 27 percent in 1984 and 28 percent in 1985. Unemployment rate was hitting 13 percent. The weak economy also experienced capital flight wherein the peso devaluated by 50 percent in 1984 and by another 11 percent in 1985 leaving a foreign exchange of only about $1 billion which can only pay two months of imports. The minimum wage was adjusted 8 times from 1983 to 1984 from 18 pesos per day to 37 pesos per day.

At this state of the economy, people were looking for a way out. We knew families who migrated to other countries. We also saw our own business collapse because of the rising cost of borrowing. We knew some people lost their jobs. In Chinatown, where I grew up, I have observed that while the Filipino-Chinese community continues to do their business they started to talk about politics a lot. This was the economy as I understood it then.

Almost 30 years later, the economy we currently face is so different from the one that I could say facilitated the revolution. When one could not afford basic necessities on the table; when businesses are being hammered by borrowing costs; when one’s job is uncertain of continuing—then a single political tipping event triggered that revolution.

Today, we are still faced with difficult economic issues—we have jobs, but they not are of quality; we have businesses but they are limited to a few sectors; we have growth but they too are limited in coverage. But our macro numbers are so much different today.

From an average growth of just about 4 percent in the last 40 years, we have crossed a higher growth path ensuring that we can grow at a minimum of 5.5 percent per year.

Our inflation rates have hovered around the 3 to 4 percent range pushing interest rates to their lowest levels in the same 40 years. Our reserves have reached all time highs allowing us to cover about 12x our import bill.

PRE-EDSA REVOLUTION 1983 1984

Real GDP Growth (1985=100), Percent Inflation Rate, Percent Interest rates (bank average lending rate) International Reserves Million US$ Unemployment Rate

1.90 10.00 19.30 864.70 10.40

(7.30) 50.30 26.70 886.06 10.40

CURRENT 1985 2013

I

could cound and deal with numbers.

Morong in Bataan was too far a place to go back now that the country was on a brink of change. The Edsa thing was not referred to as a revolution. The label “People Power” had not been clarified yet. The world press had not sacralised that Filipino invention—the notion that People massed and gathered became a power. People was a modifier.

As there was no mobile phone technology then yet, I called the landline of my parents’ home to relate to them what was happening in Manila.

Are you joining it, my brother asked me. I said, No. I would rather listen over the radio and television.

Before I made the call I knew in my heart I would join the rally, the demonstration, the gathering. I felt a bit of a hero in me. There was also a strong sense of foreboding in me that many of us would die at Edsa.

guerillas and the Japanese.

Here was this Edsa revolution that was part-picnic and part-political agenda. The US intervention came first as a joke. Remember the “Hawaii-not-Paoay” story? In our land, everything is a joke, including the banishment of a dictator.

Was there a miracle at Edsa?

Walang himala! Ang himala ay nasa puso ng mga tao. There is no miracle.

Miracle is in the heart of peole. Elsa could have been at Edsa. The Marian images that were utilized by the anti-Marcos were a winner. What images would the conjugal dictatorship use? If it was a battle of symbols, the Good was nearly de-facto on the side of Cory and the generals who went trooping her side. If Cory heard voices, no one questioned that.

She was Joan of Arc to the fullest.

When the tanks rumbled, women and nuns ran to stop them. The tanks did not budge. Something was stopping them. Who it was we would never know. Call it miracle instead.

That was the easiest answer.

When the revolution was over, there was no social upheaval. An elite replaced another elite and the undistinguished masses remained poor.

Thus, I can understand this government declaring the commemoration of those days in 1986 a halfholiday. We are neither here nor there about this revolution as our leaders are.

The Structuralists have a word for our situation: anomalous.

as a potentially subversive threat.

In July, during Ramadan, the state not only prohibited the religiously prescribed fast, but coerced many Muslims to eat. For example, some university students were forced to eat lunch with their professors.

Beards and mustaches have been banned. Women are barred from wearing veils and head coverings in public in much of Xinjiang–including, as of February 1, in the provincial capital, Urumqi.

The crackdown is happening in parallel with the rise of conservative Islam, according to several reports.

It may also be contributing to it.

Only a decade ago, the veil was rare in Xinjiang; these days, it’s become a popular symbol of religious devotion and political disobedience.

Terror is increasingly common, too. In March 2014, knife-wielding Uighurs killed 31 people and injured 140 in a train station in Kunming, 1,500 miles southeast of Urumqi. On Monday, Radio Free Asia reported that a suicide bomber had killed eight in southern Xinjiang the previous week. Government retaliation for attacks has been brutal. In August, Chinese state media reported that police officers had “gunned down 59 terrorists and arrested 215 others” in response to a late July terror attack that killed 37 civilians and injured 13 others.

Many Uighurs are choosing to emigrate. Last month Bloomberg News reported that there were 260,000 Uighurs living in Kazakhstan, driven there from Xinjiang

by a search for religious freedom.

Likewise, the news website Al-Monitor reported that there are “about 6,000” Uighurs living in poor conditions in Turkey.

Among these emigrants are the 300 Uighurs whose destination has been the Islamic State. The Al-Monitor report, for example, highlighted the story of a Uighur family that had gone to live in Islamic State–and then fled back to Turkey when they didn’t like what they found there. They have no plans to go back to China.

That probably won’t reassure Chinese authorities determined to make Xinjiang–and China–safe from the threat of Islamist terror. Other Uighurs who spend time in Islamic State, after all, might take a path that leads home.

annotations

was on a break from my job at a refugee camp when the socalled Edsa Revolution broke. I was set to return to Morong, at the Philippine Refugee Processing Center when I heard the call over the radio from Cardinal Sin to occupy the area fronting the two camps—Camp Crame and Camp Aguinaldo. In the camps, as the news filtered out, were Gen. Fidel V. Ramos and Defense Secretary Juan Ponce Enrile, two of the most feared personas in the history of martial law.

I could not believe the call from the good cardinal. And I would not believe that Ramos and Enrile were withdrawing their support from Marcos.

After Cardinal Sin made the urgent request, Marcos also made his call. It was an order for people to desist from converging at any place.

The dictator was reminding everyone of the many strange laws still in effect under his administration. That was a rumor. Rumor mongering was a crime under the dictatorship. No one knew really what a rumor was.

The dictator was cunning’ he knew where he could hurt most the body of Filipinos. It was in the orality of the nation’s tradition. We were in the mid 80s already the illiterate, nonliterate and innumerate public that we are now. Very few people read.

Very few people wrote down their experiences. Very, very few people

A7

For some reason, I was not scared.

Excited and a bit euphoric, but not fearing for anything.

Maybe then we had reached a boiling point. Maybe, the society then had become so mundane that we needed wild experiences. Marcos was so into politics he forgot the personal psychology of the citizens of the land. Well, not the entire nation, but Metro Manila and those from the nearby towns and cities that were able to join the “revolution.”

I believe I was one of the first casualties of the “revolution.” The streets near Cubao were closed to traffic already. Buses had barricaded the areas near Kamias and, we would find out later, near where the Robinson’s Galleria now stands. In 1986, that was a grassy area.

I was rushing to cross the part of Edsa crossing to Cubao when my other leg hit a shallow hole. I walked the rest of the “revolution” with a sprained ankle.

There was a bloody revolution and all I got was sprained ankle. That thought was fit for a T-shirt design.

If I am to look also for a sophisticated metaphor for the Edsa thing, then a sprained ankle is a good bet.

For, if you remove the complications, the three-day thing is a small narrative in the history of our nation. In the three years during World War II, we lost fathers, brothers, sisters, grandmothers and grandfathers. We lost a nation in a war that was not even ours but for another country that was enjoying its cinemas while our families cowered in fear of the

Tito Genova Valiente

Alvin P. Ang

Friday, February 27, 2015

E-mail: titovaliente@yahoo.com

2014

(7.30) 7.20 6.10 23.10 3.00 4.10 28.20 5.76 5.62 1,087.31 83,187.04 80,785.30 12.60 7.10 7.00

The Edsa Revolution has contributed to this current structure of the economy in many ways. The successive governments used the framework of Edsa 1 to start expanding economic freedom in other sectors. Edsa 1 therefore is a continuing story of economic reforms for the last 29 years. There is no doubt that at current growth rates and economic environment, the country is in a situation wherein it cannot allow a reversal of the reform process. The economy has to be set free from politics so that it can reach a maturity that allows business predictability and competition by the rules.

Current reforms that seek to further level the playing field are already being observed, felt and perceived by foreign investors. The country is actually the most improved participant in many of the competitiveness rankings of countries in various aspects in the last 5 years. The most important testament to this is the Investment Grade bestowed upon us. This has netted about $6 billion in foreign direct investments last year which is way the usual $2 billion we received in the past.

Thus, the next part of the Edsa revolution story is how the Philippines significantly decreased poverty and made good inclusive growth. This will make the next President think twice about reversing many of the reforms already in place and are affecting the country. Whoever will lead us in 2016 is positioned to continue the reform process no matter what. The next challenge that needs to be done is to bring governance reforms at the local levels and make local government units engines of growth. The process of addressing national corruption has started but has not permeated localities. These are where the next revolution story should begin and these are where poverty eradication and inclusive growth can be made real. God bless the Philippines.

Alvin P. Ang is a professor of the Ateneo de Manila University Economics Department and Senior Fellow of Eagle Watch.

China’s fertile ground for Islamic State Adam Minter

BLOOMBERG VIEW

T

HREE hundred Chinese citizens, members of the country’s Uighur ethnic group, have recently traveled to the Middle East to join Islamic State. Those Uighurs are part of a broader Muslim migration, spurred by a government crackdown, away from China’s western province of Xinjiang, where Muslims have lived for over a thousand years. Although they were designed to dampen Islamic separatism, Chinese policies in the region are creating fertile ground for Islamic extremism.

In 1949, 82 percent of the people living in Xinjiang were Uighurs. In the decades since, a government-

sponsored influx of Han Chinese has changed the province’s ethnic makeup. By 2010, Xinjiang’s 10 mil-

lion Uighurs accounted for just 46.3 percent of the population, according to that year’s census.

Uighurs claim that the government favors the Hans when handing out licenses to start businesses or use the region’s natural resource such as coal, oil and gas, and iron ore. Uighur resentments have turned violent.

During the 1990s, and again in the late 2000s, ethnic riots and protests were frequent. Street violence in July 2009 was the deadliest in China since the Cultural Revolution, resulting in the deaths of more than 180 people, mostly Hans.

In response, the Chinese government began a crackdown that has yet to relent. Over the past year, especially, the Chinese government has focused on Uighurs’ practice of Islam

2nd Front Page BusinessMirror

A8 Friday, February 27, 2015

www.businessmirror.com.ph

Meralco, Osaka Gas in talks for $2-B plant B

By VG Cabuag

usinessman Manuel V. Pangilinan on Thursday said the unit of energy retailer Manila Electric Co. (Meralco) is in talks with a Japanese firm to build possibly a $2-billion gas-fired plant somewhere in Luzon.

Pangilinan, chairman of Meralco, told reporters the initial discussions centered on a likely venture with Osaka Gas Co. Ltd. to build a power plant with estimated capacity of 1,200 megawatts (MW) to 1,500 MW. “It’s under discussion. First, they

have to familiarize themselves with the power industry here. They’re relatively new,” Pangilinan said at the sidelines of a briefing organized

by Metro Pacific Investments Corp.

(MPIC). MPIC partly owns Meralco.

Assuming the talks gain ground, he said the project can begin construc-

tion in the next three to five years.

“Capital cost is not as expensive as coal. The capex [capital expenditure] is actually lower than a coal plant per megawatt. But the problem is the higher cost of power. It’s slightly higher than coal,” he said.

“We have to build a re-gas [regasification] facility.

There’s no more gas for that size of plant from Malampaya so we have to build a re-gas...import gas inLNG [liquefied natural gas] form, re-gas it and use that as fuel,” he said.

Meralco’s unit will be carried out by Meralco PowerGen Corp. (MGen).

Meralco this week announced that its powergenerating arm is in talks with possible partners for power-generation projects, including a planned 1,500-MW power plant in Atimonan, Quezon province.

MPIC said MGen is speeding up investments in new-generation capacity to avert or mitigate the looming supply gaps, notwithstanding earlier legal delays.

It said the San Buenaventura Power Ltd., in which MGen has a 49percent interest with a right to nominate a preferred investor for an additional 2 percent, is in the advanced stages of developing a new 455-MW supercritical coal-fired power plant in Mauban, Quezon.

San Buenaventura, a joint venture with Electricity Generating Public Co. Ltd. of Thailand, has filed the power-sales agreement with the Energy Regulatory Commission and is currently awaiting the decision to proceed. The plant is scheduled to begin commercial operations in the second half of 2018.

Following the Supreme Court’s clearance to proceed with the project, MGen’s Redondo Peninsula Energy Inc. joint venture aims to complete the 2x300-MW coal-fired power plant within four years.

Global Business Power Corp., in which Meralco has a 22-percent interest, commenced operations of subsidiary Toledo Power Co.’s 82MW coal-fired power plant last December 2014. Another 150-MW coal-fired power plant is being built in Iloilo City through Panay Energy Development Corp. Equity in this project has been fully funded and commercial operation is expected to start in the third quarter of 2016.

YELLEN CITES STRENGTHS, FLAWS OF U.S. ECONOMY

O

ver two days of testimony to Congress, Federal Reserve (the Fed) Chairman Janet Yellen was grilled on everything from the direction of interest rates to the health of the economy to “Audit the Fed” legislation supported by Republicans.

On some topics, Yellen shed light. On others, she didn’t or couldn’t provide guidance on the Fed’s thinking or likely actions in the months ahead.

Here are the three things we heard from Yellen’s testimony: ■

She sees a steadily gaining economy

Yellen noted the economy’s consistent improvement since she last testified to Congress in July. At 5.7 percent, the unemployment rate is moving close to the Fed’s target range of 5.2 percent to 5.5 percent. She noted that job gains have picked up significantly, to a monthly average of 280,000, compared with 240,000 in the first half of 2014. Other gauges are also showing strength, including a steady drop in the number of Americans who have been unemployed for more than six months.

■

Areas of weakness remain

Yellen pointed to areas of disappointment. She noted that housing construction remains weak, with the pace of building well See “Yellen,” A2

Fed policy signals give BSP space to keep interest rates

By Bianca Cuaresma

T

he latest signals from the US Federal Reserve (the Fed) has given the Bangko Sentral ng Pilipinas (BSP) sufficient space to keep the policy rates at current levels pending more compelling data that warrant a policy shift.

But very quickly, BSP Governor Amando M. Tetangco Jr. expressed apprehension the absence of clear indications as to the timing of the policy shift could only cause more volatility in the local financial markets.

Soon after US Fed Chairman Janet Yellen testified in Congress, Tetangco said the US central bank chief’s comments at the legislative inquiries could impact the Philippines in two ways.

“While the Fed statement gives the BSP room to keep rates steady, recent price action shows we must be mindful that the comments could also spur more market volatility. This increase in volatility bears watching,” Tetangco said in a text message to reporters on Thursday.

Tetangco said this pertained to Yellen’s use of language, particularly on the markets’ interpretation of the word “patient” to mean no rate increase for at least two US Fed meetings as inflation continues to be low and that labor conditions have yet to improve.“The committee judged, in December and January, that it can be patient in beginning to raise the federal funds rate. This judgment reflects the fact that inflation continues to run well below the committee’s 2-percent objective, and that room for sustainable improvements in labor market conditions still remains,” Yellen had said.

See “Fed policy,” A2