Business Meralco seeks bids for lower solar rates By Alena Mae S. Flores MANILA Electric Co., the biggest retailer of electricity, has issued two invitations for a price challenge to supply a combined 100 megawatts of solar power. Meralco said it issued the two separate price challenge invitations as part of the compliance to the rules of the Energy Regulatory Commission on the competitive selection process. The first invitation asked interested and qualified parties to participate in the price challenge to the offer of P5.39 per kilowatt-hour from PowerSource First Bulacan Solar Inc., subject to a two-percent annual escalation and one-time foreign exchange adjustment. PowerSource’s proposed power plant is located in Barangay Labne, San Miguel, Bulacan or in an alternative sit within Meralco’s franchise area. The contract covers 20 years, with the start of commercial operations is set on August 2018. Meralco issued the second price challenge to the offer of Solar Philippines Tanauan Corp. for 50 MW at P5.39 per kWh, also subject to escalation and foreign exchange adjustment. Solar Philippines is putting up power plants with a capacity of 25 MW each in Batangas and Cavite provinces. Solar Philippines offered to supply Meralco starting in February 2017 for 20 years. “Any offer made by the price challenge should be under the same terms and conditions of the power supply agreement provided by Meralco, except for the financial proposal,” the power distributor said. Meralco said it would declare a failure the price challenge if it did not receive any expression of interest on Oct. 3. Meralco senior vice president and head of utility economics Lawrence Fernandez said the agreements with the two solar developers reflected the company’s support to renewable energy.
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MONDAY, OCTOBER 3, 2016 extrastory2000@gmail.com
‘PH to weather volatilities’ By Gabrielle H. Binaday
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HE Philippines can ride out the current volatility in the financial markets as the US Federal Reserve moves closer to normalization, the Department of Finance said over the weekend. Finance Undersecretary Gil Beltran said in his latest economic bulletin the Philippine stock market remained strong despite recent weaknesses, ranking fourth among 11 Asian bourses, and the country’s foreign reserves were at very healthy levels. “The country’s strong reserve position, its healthy banking system and profitable corporates
should help the country avoid the deleterious effects of financial volatility from the Fed normalization,” Beltran said. “Economic reforms should continue to be implemented to boost growth and the country’s fundamentals should continue to be protected to sustain investor confidence,” he added. Beltran said the Philippine Stock
Exchange Index had gained 11.7 percent to date, almost thrice the 4.4-percent average rise of 11 countries, behind Indonesia (19.12 percent), Thailand (16.57 percent) and India (12.09 percent). The PSEi also performed better compared with China (-13.86 percent), Japan (-13.03 percent), Malaysia (-1.74 percent), Singapore (-0.89 percent), Vietnam (4.28 percent), South Korea (4.92 percent), and Hong Kong (9.24 percent), Beltran said. The Bangko Sentral ng Pilipinas’ gross intentional reserve are high at $85.9 billion as of end-August this year, which can cover 10.5 months’ worth of imports of goods and payments of services and income.
“The BSP’s current reserve level also stands very comfortable than other Asian central banks,” said Beltran. Indonesia’s foreign reserves can only cover 3.9 months’ worth of import duties; Malaysia, 5.4 months; and Singapore, 6.3 months. South Korea has 6.1 months of buffer; Taiwan, 1.5 months; India, 6.9 months; and Vietnam, 2.3 months. Beltran said “the country’s GIR is also better compared to the Asean-6 with 6.5 months buffer, and Asean-5’s 5.7 months. He said the Bangko Sentral could take the peso depreciation as an opportunity to further boost its current reserve holdings, while sustaining the com-
FCDU loans rose slightly in 2nd quarter By Julito G. Rada
YUANTA SAVINGS BANK. Yuanta Financial Holdings subsidiary Yuanta Bank announces the official name change of its first overseas
subsidiary bank to Yuanta Savings Bank Philippines Inc. Yuanta Commercial Bank Taiwan president and CEO Dan T.Y. Chang (third from right) leads the ribbon cutting rites to signify the change in the bank’s identity. He is joined by (from left) Rocey Shen, president and CEO of Yuanta Savings; Seimon Huang, president of Taiwan Association; Teodora San Pedro, director of Bangko Sentral ngPilipinas; Dr. Gary Song-Huann Lin, Taiwan/ROC Ambassador; and Allen Wu, executive voce president of Yuanta Commercial Bank at the Yuanta Savings Bank head office at the ground floor of Chatham House in Salcedo Village, Makati City.
Global trade slowdown to dampen PH shipping volumes A SLOWDOWN in global trade and weak demand for Philippine exports will combine to dampen shipping volumes to and from the Philippines, which could be aggravated by problems in the international container-line industry triggered by the collapse of South Korean giant Hanjin Shipping Co. Ltd. The Asian Development Bank said in its Asian Development Outlook Update that among the threats to sustained economic growth for the Philippines this year would be weaker-than-expected demand from major mar-
petitiveness of exports. “As of September 22, the peso weakened to 47.85 against the US dollar from P47.15 at endDecember last year owing to the normalization of interest rates in the US and the economic slowdown in China,” he said. The peso has fallen 1.47 percent to date, trailing gains of 5.2 percent in Indonesia’s rupiah, 3.5 percent in Malaysia’s ringgit, 3.92 percent in the Thai baht, 4.78 percent in Singapore’s dollar, 6.11 percent in Korea’s won, and 0.85 percent in Vietnam’s dong. Asian currencies on average rose 2.8 percent with five of 13 countries showing depreciation rates ranging from 0.1 percent for Hong Kong to 9.9 percent for China.
kets for Philippine exports. ADB raised the forecasts for the gross domestic product growth this year to 6.4 percent from its March projection of six percent. But for 2017, growth is seen to dip slightly to 6.2 percent although still above the previous forecast of 6.1 percent. The World Trade Organization also reduced its global trade forecast, warning that anti-globalization rhetoric and Brexit were pushing trade growth to its slowest pace since Britain’s financial crisis. The WTO said global trade
was now estimated to expand by just 1.7 percent this year, compared wit its April projection of 2.8 percent. The new figure is a far cry from the year-ago growth projection of 3.9 percent. The WTO said growth in trade had fallen to its slowest pace in around seven years when the global financial crisis hit. It warned that “creeping protectionism,” coupled with lacking trade liberalization and perhaps the growing role of the digital economy and e-commerce might help explain the recent declining ratio of trade growth to
GDP growth. Think tank Economic Intelligence Unit said the fall of Hanjin Shipping, the world’s seventh largest container line, was an evident sign that the industry had hit a crisis point, and a massive transition would be needed to turn profitability around. The Hanjin Shipping debacle for now has little effect on the country’s trade since local exporters said they do not extensively use Hanjin vessels. But a study by SeaIntel cited by the EIU report showed an instant capacity reduction of six to eight
percent on trans-Pacific trade and a five to six percent reduction on the Asia-Europe trade as a result of the debacle. “Hanjin also has major stakes in the ports of Busan and Osaka, which will most likely see highcapacity disruptions, and impaired profitability, as these ports will lose ship calls from Hanjin,” according to the EIU report. It added ports had also denied access to Hanjin vessels, amid fears the company would not be able to pay the fees to dock and store its containers, leaving most of Hanjin’s ships stranded at sea.
Period of Consequences: An Inconvenient Truth CHARMINE C. CANITES
GREEN LIGHT GLOBAL warming is one of the major issues everybody must act upon. Unfortunately, this concern has been taken for granted for many years now, probably because we really do not feel the impact until everything gets worse. Now that I’m in my 20s, I’m personally experiencing the rapid change in the environment. The temperature in the Philippines has been warmer and more humid now compared to last decade. Ten years ago, I was able to walk down the road without having any form of protection from the sun (e.g. sunblock, umbrella, cap, etc.). Now, umbrella is a necessity, and I do not let myself be exposed under the sun at its peak. I appreciate the sunblock now more than ever, because of the visible effects of the extreme temperature on my skin. Low budget priority Here in the Philippines, I am quite disappointed that DENR gets the second to the last priority in terms of
budget allocation. I understand that the Philippines has a lot of more serious and immediate concerns, however, in the long run, all these are irrelevant when we no longer have the Earth to live in. Unfortunately, the environment and natural resources have been sacrificed and compromised in exchange of embracing development and progress of a nation. Real talk: a lot of trees were cut down to give way to modernization (buildings, houses, roads, other structures), and as the population rises, natural resources become more scarce. Weather reports can no longer accurately predict the start and end of rainy and dry season in the Philippines as a result of global warming. Our rainy season has become almost all-year round. Our country has been hit by various typhoons and super typhoon that almost wiped out an entire city. Dear Mayor Estrada With these realities, I am ending this article with a letter to Mayor Joseph Estrada. As a resident of Manila for 25 years, I am alarmed about global warming. As such, I would like the city to focus on three things that would help our city:
waste management, smoke belching, and green buildings. Implement strict waste management I believe one of the reasons why Manila is easily flooded because of clogged drainage caused by improper garbage disposal. It would be beneficial for all of us if there would be a strict implementation of waste management such as complete ban of plastics and start using eco-friendly materials such as eco bags and paper bags, just like what other cities have been doing now (i.e. Pasig, Makati). It would also help if Manila Bay will be totally garbage-free to serve as our city’s protection in times of typhoon and tsunami. It is true that discipline should come from ourselves first, but having an effective local government will make a big difference. Stop smoke blechers Jeepneys are the most common mode of transportation in the city. However, this also contributes to the vehicular emission that causes air pollution. Investing on the improvement of LRT and putting up bus stops all over Manila would lessen the dependence of commuters to jeepneys. However, there may
be ethical issues here for the loss of jobs of the jeepney drivers. Addressing unemployment concerns, on the other hand, is another issue. Build more green buildings Most buildings and establishments in Manila have been existing for more than three decades now, given that Manila was once the major business district in the Philippines. Therefore, these buildings undergo retrofitting nowadays. I would suggest that developers better start using eco-friendly materials and start building and rebuilding in favor of the environment. It would save much cost in the long run, and it would promote a more conducive environment. The author is an MBA student at the Ramon V. del Rosario College of Business. This essay is part of a journal she kept in fulfillment of the requirements of the course, Lasallian Business Leadership with Corporate Social Responsibility and Ethics. Visit her blog at https://mincanites. wordpress.com/. The views expressed here are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.
FOREIGN currency-denominated loans granted by local banks as of end-June 2016 increased $64 million to $12.1 billion from the end-March level, Bangko Sentral ng Pilipinas said over the weekend. The regulator said while gross disbursements grew 19.7 percent, repayments increased 16.5 percent. Outstanding loans to resident borrowers declined 0.3 percent to $8.42 billion from $8.44 billion in the second quarter and represented 69.8 percent of total. The sectors and industries that benefitted from the loans were merchandise and service exporters (24.9 percent); towing, tanker, trucking, forwarding, personal and other individuals (20.6 percent); public utility firms (9.7 percent); producers/manufacturers, including oil companies (5.7 percent); and management/ holding and stock brokerage (2.5 percent). The $0.8 billion balance went to other borrowers, including the public sector. Gross disbursements during the quarter rose 19.7 percent to $11.2 billion from $9.4 billion. About 95.4 percent of loan releases had short-term maturities, or those with original maturities of up to one year. Outstanding FCDU loans were mostly medium- to longterm (or those payable over a term of more than one year), representing 70.7 percent of the total, while short-term accounts comprised 29.3 percent. FCDU deposit liabilities increased slightly from $34.66 billion in the previous quarter to $34.68 billion in June 2016. The bulk of deposits (97.3 percent) are held by residents. The overall loans-to-deposit ratio increased to 34.8 percent from 34.6 percent.
Two Binondo stores yield fake cigarettes TWO big Binondo warehouses in Manila were raided by a team from the National Bureau of Investigation before the weekend, yielding 169 master cases or boxes of counterfeit cigarettes smuggled from China. At least 69 master cases of fake Winston brand and 100 master cases of fake Camel brand were seized during the anti-illicit trade operation. The seizure translates into 85,000 fake and untaxed cigarette packs valued at P2.2 million. The government lost about P2.5 million in excise taxes from the fake cigarettes. Under the sin tax law, a cigarette packs pay a tax of P29 per pack. The fake cigarettes were subsequently seized by elements of the Intellectual Property Rights Division of the NBI. The NBI team, acting on the warrant issued by Branch 48 RTC Manila under Judge Nimfa Vilches, said the Binondo warehouses in Asuncion and San Fernando Streets were allegedly owned or operated by Qingchang Zhou alias Jopay Lim, who eluded arrest. Representatives from Winston and Camel, who have been coordinating with authorities before the raid, confirmed the seized cigarettes were counterfeit versions of their brands. Authorities and tobacco representatives said it was highly possible the Binondo warehouses were serving as transshipment points for most counterfeit cigarettes being supplied to some parts of Mindanao and Western Visayas.