Foreign govt buyout to speed up coal exit? By Bernadette D. Nicolas
@BNicolasBM
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HE Department of Finance (DOF) is looking to fast-track the shutdown and repurposing of coal-fired power plants in the country by getting foreign governments to buy out shareholdings of their citizens with a significant stake in the continued operations of these facilities. Finance Secretar y Carlos G. Dominguez III, who broached this possibility in a recent forum, noted that the proceeds from the wouldbe buyout can then be donated to help mobilize funds for the finance vehicle created for the Philippines
under the Asian Development Bank (ADB)’s Energy Transition Mechanism (ETM) initiative. The latter is meant to accelerate the transition from coal to clean energy of Southeast Asian countries like the Philippines. “If we can get the foreign governments to buy out those shareholders and donate the shares of that company to a government—to our government—or to a group, including ADB and other agencies, we can actually shut down that plant. And that foreign government would actually be making a contribution to reducing a coal-fired power plant,” said Dominguez at the recent Green
Tuesday, November 23, 2021 Vol. 17 No. 46
“If we can get the foreign governments to buy out those shareholders and donate the shares of that company to a government—to our government—or to a group, including ADB and other agencies, we can actually shut down that plant.” —Finance Secretary Carlos G. Dominguez III
Finance Session jointly hosted by TIME Magazine Singapore and the Philippine Department of Finance (DOF) in Glasgow, Scotland. Those employees operating coal-fired plants lined up for decommissioning will also be retrained to work in other energy projects, Dominguez said. “First of all, there are not a lot of people actually working in that particular coalfired power plant, or in any coal-fired power plant. So it’s very easy to retrain them to do other projects,” he said. For instance, Dominguez said, a coal plant in Mindanao is among those up for decommissioning under the partnership forged by the Philippines and ADB through the new ETM facility. See “Foreign government,” A2
MONETARY POLICY HIKE IN 2022, SAYS FITCH UNIT w
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By Tyrone Jasper C. Piad
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Duterte raps China’s shoal attack, but cites pandemic role
@Tyronepiad
HE Bangko Sentral ng Pilipinas (BSP) is expected to raise the key interest rates by 75 basis points (bps) next year after keeping them at recordlow for eight consecutive times, Fitch Solutions said.
In a commentary on Monday, the think tank said the BSP will likely start increasing policy rates in 2022, seeing the figure rising to 2.75 percent by end of next year from the current 2 percent. Overnight deposit and lending interest rates stand at 1.5 percent and 2.5 percent, respectively. “The BSP’s decision to maintain its key policy rate at 2.0 percent was widely expected given the Philippines’s economic challenges through 2021. Indeed, despite financial markets becoming increasingly hawkish over the Philippines monetary policy tightening cycle, expectations are for hiking to begin in 2022,” the Fitch unit explained. The think tank noted that keeping the interest rates at the same level has driven the real policy rate into negative at -2.6 percent. Fitch Solutions said the BSP is likely to look past the higher inflation figure for now amid the signs of economic recovery. The report cited the improving mobility data and expansion of the country’s Purchasing Managers’ Index (PMI) in October as indications that the country is doing better amid the pandemic. IHS Markit reported that the Philippines’s PMI in October rose to 51, the highest in seven months, from 50.9 in September. “In addition, we expect credit demand to pick up heading into 2022, reducing the need for the u nprecedented monet a r y accommodation from the BSP,” the report said.
By Samuel P. Medenilla
@sam_medenilla
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AN online meeting of the Asean-China special summit is seen at Peace Palace in Phnom Penh, Cambodia, Monday, November 22, 2021. Despite regional frictions, Chinese leader Xi Jinping says his country will not seek dominance over Southeast Asia or bully its smaller neighbors. Xi spoke at the virtual conference with 10 Asean members, marking the 30th anniversary of relations between the sides. Xi’s remarks followed a water cannon attack by Chinese coast guard ships that blocked two Philippine boats on a resupply mission to soldiers at Ayungin Shoal. President Duterte said: “We abhor the recent event in the Ayungin Shoal and view with grave concern other similar developments. This does not speak well of the relations between our nations and our partnership.” Stories at right, and on page B7. AN KHOUN SAMAUN/NATIONAL TELEVISION OF CAMBODIA VIA AP
‘PHL TO SEE SMALLEST INCOME GROWTH FROM RCEP’ By Cai U. Ordinario @caiordinario
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OINING the Regional Comprehensive Economic Partnership (RCEP) will only increase the country’s income by less than a percent in 2030, according to data released by economists from the Asian Development Bank (ADB). In an Asian Development Blog, economists led by CynYoung Park who is the Director for Regional Cooperation and Integration for ADB’s Economic Research and Regional Cooperation Department said the Philippines will see its income increase by $3 billion or 0.39 percent in 2030 due to the RCEP. Compared to the Asean-5 econom ies, t he Ph i l ippi nes will see the smallest increase in income while Malaysia and Thailand will see the highest
increase at $7 billion each. China, Japan, and Korea will see the largest increase in incomes by 2030. “By 2030, RCEP will increase the income of member economies by 0.6 percent while adding $245 billion and 2.8 million jobs to the regional economy,” the economists said. “This is especially welcome given the pandemic has dampened economic growth and caused job losses in many countries.” RCEP is expected to take effect on January 1, 2022. The economists said the regional trade pact will take effect after at least six Asean members and three non-Asean countries ratify it. They said as of the start of November, six Asean members have already ratified the agreement. These countries are Brunei Darussalam, Cambodia, the Lao People’s Democratic Repub-
lic, Singapore, Thailand, and Vietnam. Further, four non-Asean countries—Australia, the People’s Republic of China, Japan, and New Zealand—have also ratified the agreement. “While further work is needed to match its potential, RCEP holds promise if participating economies are motivated to undertake greater economic liberalization to support the post-pandemic recovery. As the pandemic dissipates, RCEP may well act as a catalyst for greater regional cooperation,” the economists said.
Farm sector
EARLIER, the Department of Trade and Industry (DTI) warned that the local farm sector, which has opposed the RCEP, may miss out on the opportunity to export more products via the world’s biggest trade pact. Trade Secretary Ramon M.
Lopez said in a virtual event on Wednesday that RCEP, which accounts for about 30 percent of the global GDP, will provide the agriculture sector “good market” access for their products. In a recent position paper, representatives of farmers, fishers, workers, civil society organizations and private sector said they were against the ratification of RCEP. (Read related article: Position Paper on the Regional Comprehensive Economic Partnership T rade Agreement,https:// businessmir ror .com. ph /2021 /11 /16/po s it ionpaper-on-the-regional-comprehensive-economic-partnership-trade-agreement/) They said the trade deal was finalized without consultations with the agri-fisheries stakeholders and now, there is “no more opportunity” to possibly suggest revisions.
R ESIDEN T Duter te has called on China to respect international law following the recent attempt of the Chinese Coast Guard to stop the resupply mission for Filipino forces stationed in Ayungin Shoal last week. During his virtual speech at the Association of Southeast Asian Nations (Asean)-China Special Summit on Monday, Duterte did not mince words when he condemned the incident, calling it unacceptable. “We abhor the recent event in the Ayungin Shoal and view with grave concern other similar developments. This does not speak well of the relations between our nations and our partnership,” Duterte said. The Department of Foreign Affairs (DFA) lodged a strong protest with the Chinese embassy and the foreign ministry, when the Chinese coast guard vessels blocked and fired water cannons for an hour on two Filipino supply boats last Tuesday. In response, the Chinese government said it is within its rights to drive away the Filipino sea vessels for supposedly entering its territory. Ayungin Shoal of the Kalayaan Island Group (KIG) is part of the country’s exclusive economic zone and continental shelf, which is also being claimed by China. The KIG is a municipality of Palawan.
Peaceful resolution
DUTERTE rejected the attack by the Chinese Coast Guard and sought the “peaceful resolution of disputes in accordance with international law” instead. “ UNCLOS [United Nat ions Convention on the Law of the S e a] a nd t he 2016 A r b it r a l Award provide legal clarity for all countries that subscribe to the majesty of the law. These two landmark documents are beacons pointing us to a just and fair solution to our disputes,” Duterte said.
See “Monetary policy,” A2
PESO EXCHANGE RATES n US 50.3320
See “Duterte,” A2
n JAPAN 0.4418 n UK 67.7368 n HK 6.4609 n CHINA 7.8809 n SINGAPORE 36.9762 n AUSTRALIA 36.3951 n EU 56.8349 n SAUDI ARABIA 13.4183
Source: BSP (November 22, 2021)