DoE issues ban on new coal plants

THE Department of Energy (DoE) will no longer accept new endorsement applications for the construction of greenfield coal power plants, pending a review of the country's energy needs.

In a statement on Tuesday, Energy Secretary Alfonso Cusi said the DoE's the periodic assessment of the country's energy requirements prompted them to declare a moratorium on endorsements for greenfield coal power plants.

Greenfield coal plants refer to those power facilities that are yet to be constructed.

In a message to reporters, Energy Undersecretary Felix William Fuentebella said the moratorium covers new applications and the ban will last until such a time the Energy department determines the need for additional supply from baseload plants or plants that provide uninterrupted power supply.

"Actually, we are guiding our investors in advance. As the DoE makes periodic assessments, we can see the balanced way forward," Fuentebella said, adding a detailed discussion will follow.

According to Cusi, the agency's most recent assessment revealed the need for the country to shift to a more flexible power supply mix.

"This would help build a more sustainable power system that will be resilient in the face of structural changes in demand and will be flexible enough to accommodate the entry of new, cleaner and indigenous technological innovations," he said.

At the same time, the DoE chief announced the Philippines is now allowing 100-percent foreign ownership in large-scale geothermal exploration, development and utilization projects. Large-scale geothermal projects are those with an initial investment cost of about $50 million capitalization through Financial and Technical Assistance Agreements (FTAAs).

FTAAs may be entered into between foreign contractors and the Philippine government for the large-scale exploration, development and utilization of natural resources, and are signed by the President.

"We need to prepare for the influx of RE (renewable energy) under the recent policies issued by the DoE. Hence the need for more flexibility," Fuentebella told reporters.

But Laban Konsyumer Inc. President Victorio Mario Dimagiba it was the Energy Regulatory Commission that made renewables "too expensive" in the country.

"We have a competitive selection process approved by the Supreme Court. Let that policy mature and to enable power plants and distribution utilities to provide least cost to consumers. Renewable energy was made too expensive by no less than ERC," he said in a message.

Cusi said he signed last October 20 a department circular providing the guidelines for the third Open and Competitive Selection Process (OCSP3) in the awarding of RE Service Contracts.

"From an investment perspective, OCSP3 allows for 100-percent foreign ownership in large-scale geothermal exploration, development, and utilization projects," he said.

Cusi also reiterated his commitment to promote RE, as he expressed hope that in time, renewables will figure prominently in the country's energy future.

"As the Philippine Department of Energy reevaluates the appropriateness of our current energy mix vis-a-vis our energy goals, I am optimistic that this would lead to more opportunities for RE to figure prominently in our country's energy future," he said.

Cusi noted that as of 2019, the Philippines still had the highest RE share in the total primary energy supply from among countries within Southeast Asia.

"Despite this, I am determined to accelerate the development of our country's indigenous resources. We are also pushing for the transition from fossil fuel-based technology utilization to cleaner energy sources to ensure more sustainable growth for the country," he added.

‘Buy at low, sell at high’

Rafael dela Cruz Consing is senior vice president, chief finance officer and compliance officer of International Container Terminal Services Inc. (ICTSI). On Aug. 12, 2020, he sold 20,000 common shares different prices: 1,000 at P107.70 each, 1,000 at P107.80 each, 260 at P107.90 each, 740 at P108 each, 2,000 at P108.20 each, 3,000 at P108.30 each, 1,000 at P108.40 each, 3,000 at P108.50 each, and 8,000 at P108.60 each. On Aug. 13, 2020, he sold 20,000 common shares: 6,000 at P108 each, 2,000 shares at P108.10 each, and 12,000 shares at P108.20 each. On Aug. 14, 2020, he sold 29,000 common shares: 25,000 shares at P108 each, 2,000 shares at P108.50 each, 2,000 shares at P108.70 each, 2,000 shares at P108.80 each, and 2,000 shares at P109 each. On Aug. 17, 2020, he sold 16,593 common shares: 1,000 shares at P107.90 each, 2,000 shares at P107.80 each, 8,000 shares at P107.50 each, 2,590 shares at P107.40 each, 1,000 shares at P107 each, 1,000 shares at P106.60 each, and 3 shares at P106 each.

On Aug. 12, 2020, ICTSI opened at a session high of P109, dropped to P107.50 and closed at P108.60. On Aug. 13, 2020, it opened at P108; hit a session high of P108.50, dropped to P106.50 and closed at P108.20. On Aug. 14, 2020, it opened at P108.20, hit a high of P109.30, dropped to P104 and closed at P108. On Aug. 17, 2020, the stock opened at P107, hit a session high of P108, dropped to P105.10 and closed at P107.50.

ICTSI peaked at a 30-day high of P109.70 on Aug. 11, 2020 when it opened at P105.90, hit a session high of P109.70, dropped to P103.10 and closed at P109. It fell to a 30-day low of P91.55 on Aug. 3, 2020 when it opened at P95, climbed to P91.50 and closed at P94.

Jerry Liu, a Taiwanese, is the chairman of the nine-man board of Cirtek Holdings Philippines Corp. (TECH), which has 419,063,353 outstanding common shares that are all listed on the Philippine Stock Exchange (PSE). As of June 30, 2020, he indirectly owned 183,488,559 Cirtek common shares or 43.785 percent of 419,063,353 outstanding common shares, according to the company's public ownership report (POR) as of June 30, 2020. It attributed to public stockholders their ownership of 200,676,712 common shares, or 47.887 percent.

On Aug. 17, 2020, Liu sold 14,377,767 TECH common shares at P5.75 per share and another bloc also of 14,377,767 at P5.75 each. In filing his "statement of changes in beneficial ownership of securities," he totaled his remaining TECH shares at 155,510,791 common shares or 37.109 percent.

Cirtek peaked at a 30-day high of P8.45 on July 8, 2020 when it opened at a 30-day high of P8.45, dropped to P7.60 and finished trading at P8.37. It fell to a 30-day low of P5.07 on July 27, 2020 when it opened at session high of P5.42 and closed at 30-day low of P5.07.

Omico Corp. (OC), according to its 2020 general information sheet (GIS), has 2 billion authorized capital stock (ACS) with P1 par value. Of the ACS, Filipinos and foreigners paid for 1,050,461,673 common shares. Filipino-owned common shares totaled 976,643,131 or 92.973 percent while foreigners paid for 73,818,542 common shares or 7.027 percent.

PCD Nominee Corp. were listed as Omico's top stockholder. It held 921,921,576 common shares or 87.763 percent of 1,050,461,673 outstanding common shares, according to the GIS, and another bloc of 72,891,082 common shares or 6.93 percent.

Co Ann, according to OC's public ownership report, directly owned 110.605 million common shares or 10.529 percent. In the same filing, Omico credited the public with 902,016,823 common shares or 85.869 percent, making them majority stockholders without board seats in the seven-man board.

Omico peaked at a 30-day high of 0.475 on Aug. 11, 2020 when it opened at P0.390, dropped to P0.390 and closed at P0.390. It fell to a 30-day low of P0.350 on July 7, 2020 when it opened at session high of P0.360 and closed at 30-day low of P0.350.

Will ICTSI continue surging? Just asking.

Psalm to 2 firms: Pay P671M arrears

The Power Sector Assets and Liabilities Management Corp. (Psalm) is demanding two firms to settle their long overdue obligations of at least P671.16 million combined, according to the Department of Finance (DoF). In a statement on Tuesday, the Finance department said Psalm sent separate final demand letters to First Bay Power Corp. (FBPC) and Abra Electric Cooperative Inc. (Abreco). Copies of the letters — both dated August 24 this year — were furnished Finance Secretary and Psalm Chairman and Energy Secretary Alfonso Cusi.

In the letters, Psalm President Chief Executive Officer Irene Besido Garcia and acting Vice President for Finance Manuel Marcos Villalon 2nd were quoted as saying that FBPC has a long overdue financial obligations to Psalm amounting to P35.15 million. Meanwhile, they added that Abreco has arrears of P599.13 million on its power account and another P36.89 million in unremitted universal charge (UC) collections plus all other unremitted UC collections for the months not covered by its submitted UC reports.

The Psalm officials explained that Abreco's overdue power account as of July 31, 2020 covered a period of 10 years, consisting of restructured account, interest and penalty, value-added tax (VAT) and Energy Regulatory Commission (ERC)-approved power rate adjustments. FBPC, on the other hand, incurred arrears covering a seven-year period as of July 31, 2020. Its long overdue obligation of P35.15 million includes its power bill, interest and VAT, and ERC-approved power rate adjustments, they added.

THE closure of Petron Corp.'s refinery in Bataan is imminent if all industry players will not be accorded a level playing field, its top executive said on Tuesday.

"Kailangan maging level playing field. Kung hindi maging level playing field ang Petron refinery with the importers, magsasara na rin kami sigurado. Kailan iyon? Very soon (We should be on a level playing field. If Petron will not have a level playing field with the importers, we will close our refinery for sure. When? Very soon)," Petron President and Chief Executive Officer Ramon Ang said in a virtual briefing.

Ang told reporters the listed oil company "will go to that direction" if the same situation persists.

Energy Secretary Alfonso Cusi said the Department of Energy (DoE) is yet to receive a notification from Petron on its supposed plan to permanently close its refinery in Limay town.


Nonetheless, the agency will closely monitor the developments.

In a statement, Cusi said, "whatever business measures Petron will arrive at in the course of its discussion with the concerned parties, we at the DoE will respect the management's decision."

Double tax hits refinery biz

The point of contention, according to Petron's top executive, is the double imposition of taxes: one on the imported crude oil upon its arrival and another on the finished product.
On the other hand, importers are taxed once for selling petroleum products.

Sought for comment, Finance Secretary Carlos Dominguez 3rd said the refinery business is "a supply chain issue rather than a tax issue."

But for Laban Konsyumer Inc. President Victorio Mario Dimagiba, the imposition of fuel excise taxes under the Tax Reform for Acceleration and Inclusion law makes refinery operations in the country no longer viable.

"We note that in the refinery, there might be market and timing issues including the importation of crude at a high price, then after refining the world crude prices might be lower, thus, refining margins could be lower," Dominguez said in a message to reporters.

"On the other hand, an importer, who imports finished products can sell these products right away, making him less vulnerable to oil price movements," he added.

Dominguez explained the excise tax (and duties) on importation of finished products is imposed upon importation and on locally refined products, it is imposed upon removal from place of manufacture.

So, at the time of marketing or sale, the excise tax in both instances should have already been paid, he added.

"Petron and Shell should have read this in 2018 that Train was not equitable tax policy at their end of the business," said Dimagiba, a former Department of Trade and Industry undersecretary, referring to the Tax Reform for Acceleration and Inclusion law.

The 180,000 barrel-per-day oil refinery in Bataan, inaugurated in 1961, is now the lone refinery in the Philippines.

In August this year, Pilipinas Shell permanently shut its refinery in Tabangao, Batangas that would be transformed into a full import and storage terminal for finished products.

Chevron was the first to close its refinery in Batangas in 2003 and was subsequently converted into a finished-import terminal.

Should Petron decide to halt operations of the Bataan refinery for good, the country "will be at the mercy of foreign suppliers," according to Petron.

Dimagiba shares the same sentiment, saying this "will make the country make us dependent to foreign supply and prices."

Amendment of tax law key to level playing field

Ang said the only way to achieve a level playing field is to go to Congress and have the existing tax laws amended even though this is a long and tedious process.

"The only way to save this is if we can go to Congress at ma-level playing field," Ang said, adding all questions to be raised by legislators have to be addressed.

But Dominguez thinks otherwise.

"We don't need to change our tax on this. It's happening worldwide, refinery margins are getting squeezed. Big oil companies have been shutting down their refineries in various parts of the world," he said.

Ang said, "iyong refinery business today nakapahirap talaga. Makita mo sa buong mundo marami na ang nagsasara (it is difficult to manage a refinery business today. Around the world, a lot of refineries have already shut down)."

Cusi said the Energy department is looking into the taxation concerns raised in coordination with the Department of Finance. "At the same time, we are also evaluating how a closure scenario would impact pricing, as well as the country's energy security."

Dimagiba is proposing that the government should mull buying back Petron, which he said was once a state-owned entity through Philippine National Oil Co.

"The environment where Covid-19 (coronavirus disease 2019) will linger should be a driving criteria. We should offer to buy back Petron from Ramon Ang," Dimagiba said.

Petron shares tumbled by 0.62 percent to end at P3.20 each on Tuesday.

Filipinos want better public transportation amid pandemic

Filipinos are demanding a more comprehensive plan from the Duterte administration to address transportation woes amid the coronavirus disease 2019 (Covid-19) pandemic, a study conducted by data analytics firm WR Numero showed.

GETTING READY
Workers disinfect a train of the Philippine National Railways on Aug. 18, 2020 in preparation for the resumption of public transportation on Wednesday. PHOTO BY MIKE ALQUINTO
Quarantine controls have been eased since the past weeks as the government hopes to revive the Philippine economy, but workers continue to face problems from the country's mass transportation system.

"As Filipinos adjust to the demands of the national health situation, they are also demanding for the government to do more to solve transport issues during the pandemic," said WR Numero Research Chief Executive Officer Robin Michael Garcia during a briefing on Tuesday.

"They are expecting the government to adopt better policies and that these should be implemented properly," he added.

The study titled "Public Transportation Amid a Pandemic: Digital Perceptions and Sentiments" touched issues on reopening of more routes for public utility vehicles (PUVs), boosting passenger capacity in train networks, including financial assistance to jeepney drivers.

Twenty-five percent of the respondents wanted the Department of Transportation (DOTr) to open more routes and increase public transport supply, while 26 percent called for the return of provincial buses.

As of early October, the government has allowed the operation of the following PUVs in Metro Manila: 27,016 units of traditional public utility jeepney (PUJ) plying 302 routes; 845 units of modern jeepneys with 48 routes; 4,016 units of public utility buses plying 34 routes; 387 units of point-to-point buses with 34 routes; 286 provincial buses with 12 routes; 3,263 units of UV Express with 76 routes; 40 units of modern UV Express with two routes; 24,356 units of transport network vehicles; and 20,927 units of taxis.

This month, the DOTr also increased train ridership ranging from 13 percent to 18 percent, to 30 percent.

Last week, the government also gave the go-signal for the resumption of the motorcycle taxi pilot run.

WR Numero Research said it used Tangere, a mobile app-based survey form to conduct a survey to 5,000 adult respondents nationwide.

Unique proprietary digital listening and sentiment analysis software called Pathos was also used to collect and process millions of digital data, specifically Facebook data including posts, engagements and sentiments.

Profit taking snaps PSEi’s six-day rally

The main index ended its six-day rally as investors took profits on Tuesday.

The benchmark Philippine Stock Exchange index (PSEi) declined by 1.17 percent or 76.11 points to close at 6,415.08, while the wider All Shares lost 1.07 percent or 41.25 points to finish at 3,818.11.

Philstocks Financial Inc. research associate Claire Alviar said the local market dipped amid profit taking as it is approached the resistance level of 6,570.

She added the negative result is only a correction and local shares would find support, which is seen at 6,000 to 6,100 levels.

Meanwhile, Alviar noted there is still negative sentiment from the extension of the general community quarantine (GCQ) in Metro Manila as some restrictions remain in place and the economy is not fully opened yet.

President Rodrigo Durterte, in a recorded speech aired Tuesday morning, said Metro Manila will remain under GCQ until November 31.

The provinces of Batangas and Lanao del Sur, along with the cities of Iloilo, Bacolod, Tacloban and Iligan, will also remain under GCQ until the end of November.

Alviar also said the sell off Wall Street experienced overnight spilled over to the local bourse amid the recent surge in coronavirus disease 2019 cases in the United States and uncertainties over the stimulus package.

The Dow Jones, S&P 500 and Nasdaq slumped by 2.29 percent, 1.86 percent and 1.64 percent, respectively.

The local sectors also ended in the red with holding firms leading the shedding at 1.4 percent.

Total volume turnover was at 6.49 billion shares valued at P8.02 billion
Decliners edged out advancers at 117 to 79, while 64 securities were unchanged.

LandBank: Over 2M farmers, fishermen assisted at end-Sept

In line with its special focus to serve the needs of the country's agriculture sector, the Land Bank of the Philippines (LandBank) reported that it had assisted over 2 million small farmers and fishermen (SFFs) nationwide.

As of end-September, LandBank has assisted nearly 2.4 million SFFs, exceeding its full-year target of 2 million and more than double the 1 million it supported in 2019.

About 1.63 million, or 68 percent of the total, were provided assistance through the bank's regular loan offerings and lending programs jointly implemented with the Department of Agriculture (DA) and the Department of Agrarian Reform (DAR).

Included here were the 716,897 small farmers assisted through the Rice Farmers Financial Assistance and Financial Subsidy to Rice Farmers Programs of the DA. The remaining 48,760 were supported through the Financial Literacy Training Program of the LandBank Countryside Development Foundation Inc. conducted in unbanked municipalities nationwide.

"Three months before the end of 2020, LandBank already surpassed its yearend target of assisting 2 million small farmers and fishers nationwide. This accomplishment attests to our continuing commitment that https://atozmarkets.com/brokers/deltamarket/ , together with the Department of Agriculture and the Department of Agrarian Reform, remains steadfast in its support to the agriculture sector," LandBank President and Chief Executive Officer Cecilia Borromeo said in a statement.

In terms of its continued expansion in lending, LandBank said outstanding loans to the agriculture sector  grew by P5.68 billion to P230.34 billion in September from P224.66 billion in August.

Of the latest amount, P34.97 billion were lent to small farmers and fishermen, and cooperatives and farmers associations, rural financial institutions and other conduits, while P195.36 billion were provided to other players in the agribusiness value chain.

LandBank expects to further expand its agricultural loan portfolio to P245 billion by the end of the year.
With the Philippines remaining under varying degrees of quarantine due to the coronavirus disease 2019 (Covid-19) pandemic, a new Economist Intelligence Unit study for TransUnion finds businesses' shift to digital could be permanent.

The report titled "New Dimensions of Change: Building Trust in a Digital Consumer Landscape," released on Tuesday included responses from 1,610 executives in Brazil, Canada, Chile, China, Colombia, the Dominican Republic, Hong Kong, India, the Philippines, South Africa, the United Kingdom and the United States, including 115 Philippine executives.

The research uncovered how technologies like artificial intelligence (AI), national digital identification (ID) systems, and super-apps can help overcome hurdles and possibly create new challenges to building digital trust.

Results of the study showed that digital adoption is generally perceived as rising faster in the Philippines compared with the global average mainly due to the large adoption of social media and a growing e-commerce market.

The report noted that nearly 84 percent of Philippine executives surveyed as part of the study said they believe smooth transactions are "essential to business survival" rather than merely a competitive edge during and after the pandemic.

The report, however, said that despite the fast adoption, removing barriers to building bilateral digital trust is a must.

"Covid-19 has dramatically accelerated digital transformation with 78 percent of Philippine executives surveyed as part of our study saying their organization has changed their digital transaction process due to the pandemic," said Pia Arellano, TransUnion Philippines president and chief executive officer.

"But all of this digital progress will be wiped out if we can't remove these barriers to building bilateral digital trust. For instance, 70 percent of Philippine executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches," she added.

Approximately 92 percent of Philippine executives say biometrics are likely to be used to authenticate the vast majority of payments in the next 10 years.

About 46 percent of Philippine respondents, meanwhile, noted that improved fraud detection and security is the greatest benefit to using AI.

The report further said that 84 percent Philippine respondents think national digital IDs will help fraud prevention in consumer transactions.

About 77 percent in the Philippines believe a national digital ID gives low-income groups access to consumer services they would have previously been excluded from.

The Philippine Statistics Authority (PSA) has started the pre-registration process for the Philippine national ID. As of October 20, more than 1 million Filipinos have taken the first step in registering with the national ID system.

"Ensuring consumer trust starts with preventing fraud. Our research overwhelmingly showed that biometrics, AI and national digital IDs aren't just a fad for consumer fraud prevention. They are key for trusted commerce for the foreseeable future," said Arellano.

According to the report, 82 percent of Philippine executives believe consumers are comfortable sharing personal data with private companies while 79 percent of the respondents think consumers are comfortable sharing personal data with governments.

"Technological innovations like AI, biometrics and national digital IDs paired with proven fraud prevention methods like device intelligence can provide a more convenient and inclusive way for consumers to transact that still protects security and privacy," Arellano said.