Philippines orders 240 Japanese train cars for first Manila subway for $556 million USD

 

Sumitomo and JR East's $556m contract follows 2019 commuter rail deal

Philippines orders 240 Japanese train cars for first Manila subway

Japanese trading house Sumitomo Corp. and an East Japan Railway unit announced Monday that they won a 57.5 billion yen ($556 million) order for train cars that will serve Manila's first-ever subway system. 

President Rodrigo Duterte's Build Build Build program highlighted the Manila's first-ever subway public transport system which idea was rejected by all previous Philippine Presidents due to their belief that subway train system could not withstand in the Philippines due to flooding issues ignoring the suggested engineering intervention that could protect the project from floods. 

Sumitomo and JR East subsidiary Japan Transport Engineering signed the contract on Dec. 15, 2020 according to the news release. The order covers 240 subway cars, with the final delivery date set for March 2027.

The subway will span 36 km and 17 stations in the Greater Manila region. The line will connect Quezon City in the north to the city of Paranaque in the south.

The subway project is the centerpiece of the "Build, Build, Build" infrastructure initiative being led by President Rodrigo Duterte's government. The Japanese government is providing foreign development assistance for the undertaking.

The contract comes on the heels of last year's order for 104 cars that will run on a north-south commuter railway serving Manila. The line is expected to fully open in 2025.

Japan Transport Engineering is making both the subway and commuter cars, which will be similar. The company owns the largest share in Japan's commuter-rail-car market.

The cars run on Tokyo rail lines operated by parent company JR East, also known as East Japan Railway. The Manila subway line will be modeled after Tokyo's subway system. Read more at Asia Nikkei

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₱778 Billion Railway 95 KM Connecting Connecting Manila to Clark will open on 2022

 

Philippines awards final two contracts for Malolos – Clark line

PHILIPPINE National Railways (PNR) and the Philippines Department of Transportation (DOTr) have awarded the two remaining construction contracts for the 53km Malolos – Clark section of its North-South Commuter Railway (NSCR) project.

The contracts, designated packages 2 and 3, cover a total of 28 km of viaduct and six stations in the northern province of Pampanga, and have a combined value of ₱56.47 billion Php ($1.17 billion US Dollars ).

Package 2, worth ₱ 33.7 illion Php, was awarded to a joint venture of Acciona Construction Philippines and Daelim Industrial, and covers the construction of 16km of viaduct and stations in Minalin, Santo Tomas and San Fernando.

Package 3, worth ₱22.77 billion Php, was awarded to Italian-Thai Development, and covers the construction of 12km of viaduct and stations in San Fernando, Angeles and Mabalacat.

The contracts are the last two of five packages for the section. Package 1 was awarded to a Hyundai-led consortium on September 18, and Packages 4 and 5 were awarded on August 1. Package 4 was awarded to a partnership of EEI and Acciona, and 5 to Posco, Korea.

Construction on the Malolos – Clark line is scheduled to begin in November, with the section currently expected to begin partial operation in 2022. When completed, the new railway will connect Malolos, Bulacan, to Clark International Airport in Mabalacat, offering end-to-end journey times of 30-35 minutes, compared with journey of 1h 30min.

The section is part of the larger 148km NSCR project, which is expected to cost around ₱777.55 billion, and is co-financed by the Asian Development Bank (ADB) and the Japanese International Cooperation Agency (Jica).

Philippines awards contract for Malolos – Clark project

$573 million US Dollars contract to construct a section of the Malolos – Clark Railway project was ararded to a Hyundai-led consortium.

The Package 1 contract, which was awarded on September 18, covers the construction of 17km of viaduct northwest of Manila, and two elevated stations in Calumpit and Apalit.  

The consortium, led by Hyundai Engineering and Construction, which holds a 57.5% controlling share, also comprises Dong-ah Geological Engineering, Korea, and Megawide Construction, Philippines.

The contract is part of the planned 53km Malolos – Clark Railway, which will connect Malolos, a city north of Manila, with Clark International Airport and economic zone.

Package 1 follows the awarding of contracts for Package 4 to a partnership of EEI and Acciona Construction Philippines, and Package 5 to Posco, Korea. The contracts cover the construction of 6.3km of main line and 1.6km of depot access line, as well as Clark airport station, a depot at Mabalacat, an operations control centre (OCC) and other buildings.

Contracts for two packages have yet to be awarded. These are:

* Package 2, which covers construction of 16km including San Fernando station, and

* Package 3, which covers 12km of line including Angeles station.

Malolos – Clark is the second of three phases in the country’s broader 148km North-South Commuter Railway (NSCR) project, which will run between New Clark City, Pampanga, and Calambra, Laguna and cost around ₱777.55 billion ($15.8 billion US Dollars) when completed.

The NSCR is currently scheduled for completion is 2025, and is intended to reduce congestion across the Manila metropolitan area.

The project is partially funded through financial support from the Asian Development Bank (ADB) and the Japanese International Cooperation Agency (Jica). Read more from Rail journal page 1 and two 

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European Investor to Pour €4 Billion Euros to Revive National Steel Corporation in Iligan City

Iligan City — A new, state-of-the-art fully integrated steel mill is poised to rise again in this once touted as the industrial city of the south.

Iligan City Mayor Celso Regencia has acknowledged last week the intent of a foreign-funded consortium in the amount of 4B euros for the rebirth of the new National Steel Corporation.

The development came as a big surprise after a series of failed investment proposals — mostly from Chinese groups — were presented before the pandemic to Mayor Regencia for the plan to rebuild the defunct NSC.

Mayor Regencia had expressed optimism the latest investment proposal would push through as it were considering the seriousness of the consortium to proceed amid the growing threat of Covid-19.

“We are bullish with the development to re-construct the mothballed NSC as this would place Iligan City once again in the country’s industrial map”, Regencia said.

The reconstruction phase is set to start late this year by a European supplier of equipment and physical plants to the metal industry.

National Steel Corporation (NSC) was the Asia's Largest Steel Factory before it was sold by former President Fidel V. Ramos to Malaysia and was become so controversial for the alleged Corruption but Ramos denied the accusation. 

Read related article: - Ramos Killed NSC Asia's Biggest Steel Factory in ILigan City to allow China Dominates the Philippines 

The 400-hectare property of the old NSC is now owned by the city government of Iligan after undergoing a series of legal battles with bank liquidators.

Settlement for the buy-out of the property is now in the last ditch of negotiations with the consortium group.

As a driver of economic growth, the new NSC is expected to generate thousands of jobs to the people of Iligan and the rest of the region.

The country has lost its presence in the steel industry sector after the old NSC had experienced a series of downfalls, latest of which was in the hands of Global Steel, a Malaysian manufacturing group.

With the revival of the old NSC into a modern steel making plant, the economy of Iligan City and the rest of Mindanao will definitely shoot up to an unprecented level of progress, Regencia added.

From Ruffy Magbanua of Mindanao Daily News

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The Philippines Per Capita GDP Has Reached An All-Time High Under Duterte

Erik De Castro | Reuters
Philippine President Rodrigo Duterte

The average Filipino is doing better under Duterte.

When it comes to Per Capita Gross Domestic Product (GDP), that is. That’s a measure of the total output of a country divided by the number of people in that country.

The Philippines’ Per Capita GDP was last recorded at an all-time high 2891.36 US dollars in 2017, according to Tradingeconomics.com. That’s well above the average of 1627.98 USD for the period 1960-2017.

Also, Filipinos are doing better under Duterte when Per Capita GDP is adjusted by purchasing power parity (PPP). That measure, too, reached a record 7599.19 US dollars in 2017, well above the average of 4969.71 USD for the period 1990-2017.

Source: Tradingeconomics.com 10/26/2018

To be fair, comparing Per Capita GDP in USD for different time periods is a tricky exercise. Numbers can be distorted by population growth and currency fluctuations. For instance, the climb in the Philippines per capita GDP has been helped by a slow-down in population growth. It's also an ongoing trend that can be traced back to the Aquino administration, which brought macroeconomic stability to the country.

“Aquino is delegating power to competent technocrats and seems to understand what needs to be done to get the lights back on,”  wrote Ruchir Sharma in Break Out Nations (W.W. Norton Company, 2012).

Macroeconomic stability has helped the Philippines economy demonstrate a great deal of resilience in recent years. At the end of 2017, it grew at an annual 6.9% in the September quarter. That’s the strongest growth since the third quarter 2016. And the Philippines’ economy was still growing at 6% at the end of 2018.

Tracing Per Capita GDP growth back to the Aquino period certainly raises the question: who should take credit for the record Per Capita GDP, Aquino or Duterte?

Meanwhile, a recent McKinsey Global Institute (MGI) study places the Philippines among the few emerging market economies that are well-prepared to achieve sustained growth over the next decade.

That's thanks to a rise in Gross Fixed Capital Formation (investment). It reached 695414.08 PHP Million in the second quarter of 2018 from roughly 450,000 PHP Million in July of 2015--well above the 303138.16 PHP Million for the period 1998 until 2018, and an all-time high.

Still, the Philippines’ per capita GDP is equivalent to 23% of the world's average, which makes Filipinos poor. And a resurgence in the cost of living in recent months makes things worse for them. The Philippines' annual inflation rate rose to 6.7% in September of 2018 from 6.4% in the August, and compared to market expectations of 6.8%.

That’s the highest reading since February 2009, thanks to soaring food, transportation and utility prices.

Inflation, together with revolution and corruption, has suspended Philippines economic progress before, and it will do it again, if they aren’t addressed effectively.

So rather than celebrating record per capita GDP, Duterte’s administration should keep an eye on the price of bread and rice.


Panos Mourdoukoutas
Contributor

I’m Professor and Chair of the Department of Economics at LIU Post in New York. I also teach at Columbia University. I’ve published several articles in professional journals and magazines, including Barron’s, The New York Times, Japan Times, Newsday, Plain Dealer, Edge Singa...

My recent book The Ten Golden Rules Of Leadership is published by AMACOM, and can be found here.

Read more at FORBES

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Bloomberg: Philippines' Inflation Negative; Weak Peso Benefits Economy

Source: Bloomberg Business Week 

Negative Rate Signals Philippines Still Behind the Curve

The second rate increase  in two months isn’t going to help the beleaguered peso

The Philippines stands out as the only country with a negative inflation-adjusted benchmark rate among Asian peers that have raised borrowing costs this year. The second rate increase by its central bank in two months isn’t going to help the beleaguered peso much given the low real yields and current-account deficit, said Mitul Kotecha, a senior emerging markets strategist in Singapore at TD Securities. The monetary authority will likely have to raise interest rates in the months ahead with the next clue coming from the release of inflation data on July 5, he said.

Weak Peso Benefits Philippines Economy, Finance Chief Says

Philippine Finance Secretary Carlos Dominguez said a weak peso is benefiting the economy, and a widening in the trade deficit and faster inflation are signs of strong growth.

Carlos Dominguez in Tokyo on June 21.Photographer: Akio Kon/Bloomberg
The depreciation in the peso, Asia’s worst performing currency that’s lost more than 6 percent against the dollar this year, is boosting the repatriated income of about 10 million Filipinos working overseas as well as the earnings of exporters and call center operators in the $305 billion economy, Dominguez said in an interview with Bloomberg Television’s David Ingles in Tokyo. The trade gap is partly fueling a slump the currency, he said.

“The trade deficit is a sign of strength of our economy because we are importing not Birkin bags or luxury goods” but factory equipment and infrastructure materials, the finance chief said on Thursday. “Rather than look at the trade deficit as an albatross around our neck, we look at it as an opportunity. Inflation also is a sign of a growing and robust economy.”

A contraction in exports in April alongside a 22 percent jump in imports widened the trade deficit to $3.6 billion, prompting the central bank to expect a bigger shortfall in the current account this year of $3.1 billion. Foreign outflows and the perception by some analysts that the central bank was slow in raising interest rates despite inflation climbing to a five-year high pushed the peso to a 12-year low this month.

Philippine Finance Secretary Carlos Dominguez said a weak peso is benefiting the economy, and a widening in the trade deficit and faster inflation are signs of strong growth.

The depreciation in the peso, Asia’s worst performing currency that’s lost more than 6 percent against the dollar this year, is boosting the repatriated income of about 10 million Filipinos working overseas as well as the earnings of exporters and call center operators in the $305 billion economy, Dominguez said in an interview with Bloomberg Television’s David Ingles in Tokyo. The trade gap is partly fueling a slump the currency, he said.

“The trade deficit is a sign of strength of our economy because we are importing not Birkin bags or luxury goods” but factory equipment and infrastructure materials, the finance chief said on Thursday. “Rather than look at the trade deficit as an albatross around our neck, we look at it as an opportunity. Inflation also is a sign of a growing and robust economy.”

Philippine Finance Chief Says Inflation 'Absolutely' Under Control

Philippine Finance Secretary Carlos Dominguez talks about inflation and the local currency.

A contraction in exports in April alongside a 22 percent jump in imports widened the trade deficit to $3.6 billion, prompting the central bank to expect a bigger shortfall in the current account this year of $3.1 billion. Foreign outflows and the perception by some analysts that the central bank was slow in raising interest rates despite inflation climbing to a five-year high pushed the peso to a 12-year low this month.

Dominguez said an abrupt exchange rate movement is disadvantageous because it could fan inflation and encourage speculation.

“We are comfortable with what happened last year and we just don’t want people to get excited,” he said. “We are using our tools to make sure that any change is gradual and that the economy can actually handle it.”

The Philippines on Wednesday raised its key interest rate by 25 basis points to 3.5 percent, becoming the latest emerging market to tighten monetary policy. Governor Nestor Espenilla said the central bank is prepared to take more action if needed. The peso rose as much as 0.2 percent on Thursday before trading little changed at 53.48 per dollar at 2:36 p.m. in Manila.

Philippine Finance Secretary Carlos Dominguez said a weak peso is benefiting the economy, and a widening in the trade deficit and faster inflation are signs of strong growth.

Carlos Dominguez in Tokyo on June 21.Photographer: Akio Kon/Bloomberg
The depreciation in the peso, Asia’s worst performing currency that’s lost more than 6 percent against the dollar this year, is boosting the repatriated income of about 10 million Filipinos working overseas as well as the earnings of exporters and call center operators in the $305 billion economy, Dominguez said in an interview with Bloomberg Television’s David Ingles in Tokyo. The trade gap is partly fueling a slump the currency, he said.

“The trade deficit is a sign of strength of our economy because we are importing not Birkin bags or luxury goods” but factory equipment and infrastructure materials, the finance chief said on Thursday. “Rather than look at the trade deficit as an albatross around our neck, we look at it as an opportunity. Inflation also is a sign of a growing and robust economy.”

Philippine Finance Chief Says Inflation 'Absolutely' Under Control

Philippine Finance Secretary Carlos Dominguez talks about inflation and the local currency.

A contraction in exports in April alongside a 22 percent jump in imports widened the trade deficit to $3.6 billion, prompting the central bank to expect a bigger shortfall in the current account this year of $3.1 billion. Foreign outflows and the perception by some analysts that the central bank was slow in raising interest rates despite inflation climbing to a five-year high pushed the peso to a 12-year low this month.

Dominguez said an abrupt exchange rate movement is disadvantageous because it could fan inflation and encourage speculation.

“We are comfortable with what happened last year and we just don’t want people to get excited,” he said. “We are using our tools to make sure that any change is gradual and that the economy can actually handle it.”

The Philippines on Wednesday raised its key interest rate by 25 basis points to 3.5 percent, becoming the latest emerging market to tighten monetary policy. Governor Nestor Espenilla said the central bank is prepared to take more action if needed. The peso rose as much as 0.2 percent on Thursday before trading little changed at 53.48 per dollar at 2:36 p.m. in Manila.

Read: Philippines Raises Key Rate for a Second Month Amid Peso Rout

Dominguez also made the following comments on Thursday

On inflation that he said is stabilizing: “A large portion of that inflation was due to unexpected increase in price of fuel worldwide, which has apparently started moderating and is now mid- to low-$60s per barrel” and the other factor is peso weakness

On government debt sales: “The fact that our revenues are up 20 percent that means to say that we’re not desperate for debt. And we are the only country in this region that actually passed a tax reform law to increase our revenue and to be able to fund our Build, Build, Build. Of course, we can’t fund it all ourselves, so we’re going to the debt market.”

On trade war: “In the short run, we will actually gain from a trade war. We are building a lot of infrastructure, and that’s a lot of steel. But that’s very short-term thinking. We’re concerned that our two biggest trading partners, China and Japan, might be vulnerable, by the way, so is the U.S. So we’re watching it very very carefully.”

— With reports from Lilian Karunungan, Cecilia Yap, and Andreo Calonzo

Read more in Bloomberg Business Week  / BloomBerg

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Vietnamese Ship Runs Aground in Philippines, Damages Artificial Reefs

Sarangani Bay. Photo: Wikipedia
A Vietnamese cargo ship has run aground off Sarangani Bay in Mindanao the southern Philippines, damaging more than 200 artificial reefs that were built more than 10 years ago by environmental conservationists, authorities said Wednesday.

The ship, the HTK Energy, was carrying a cargo of rice when it hit the artificial reefs just off the coast along the bay on Monday, said Omar Saikol, assistant superintendent of the Sarangani Bay Protected Seascape, a government body tasked with protecting the local marine environment.

The damaged reefs served as a habitat for various fish species, Saikol said, adding that authorities had arranged for divers to check the extent of the destruction.

“There is an ongoing investigation. We’re getting video footage of the damage to facilitate the proper assessment and imposition of possible penalties or fines,” he told reporters in General Santos City on Wednesday.

The Vietnamese cargo ship HTK Energy is pictured shortly after it ran aground off Sarangani Bay in the southern Philippines, June 18, 2018.

The artificial reefs, located just 20 meters (66 feet) near the shore, were constructed more than a decade ago by environmentalists as part of efforts to protect local biodiversity, said Katherine Lopez Bitco, a marine management specialist.

“The damage is quite extensive and the area could reach 100 to 200 square meters [1,076 to 2,153 square feet],” Bitco said.

In January 2013, a minesweeper owned by United States, the USS Guardian, ran aground on Tubbataha Reefs in the Sulu Sea, a protected marine sanctuary in southern Philippine waters considered a World Heritage Site by the U.N.

The U.S. Navy hired a Singapore-based company to dismantle the minesweeper piece by piece so it would cause no further damage. The ship’s commanding officer and navigator were subsequently relieved and the U.S. government was fined at least U.S. $1.4 million for the damage.

Reported by: Benar News, an RFA-affiliated online news service.

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Business World: $24-billion stock wipeout attracts top fund to the Philippines

THE PHILIPPINE Stock Exchange index has slumped around 18% from February to May. — PHILSTAR/KRIZ JOHN ROSALES

AFTER losing $24 billion in value from its January peak, Philippine stocks are ready for a comeback.

That’s according to Alan Richardson, an investment manager at Samsung Asset Management Co., whose fund has beaten 95% of peers over the past five years. The country’s benchmark equity index slumped about 18% from February to May and has finally reached a bottom, he said in an interview.

“It has already priced in all the negatives on capital markets caused by US liquidity tightening,” Mr. Richardson said. “Just mean reversion on getting less worse is enough to make 10% or more.”

Foreign outflows have reached almost $1 billion this year and the benchmark index has slipped 9.6% through yesterday’s close, making it the Asia’s worst performing stock market in 2018.

Mr. Richardson upgraded Philippine shares to overweight from underweight, two weeks after he did the same with Indonesian stocks. The Jakarta Composite Index has gained 1.9% since he went public with his bullish stance.

The Philippine Stock Exchange Index has rebounded 3.5% from a 14-month low on May 30. Analysts at Credit Suisse Group AG said the gauge has neared bottom in a report published June 7, but emphasized that “remaining headwinds should limit any bounce in shares,” citing slowing earnings growth, rising US bond yields and risks to headline inflation.

Still, Mr. Richardson thinks Philippines stocks will rally. He prefers local banks such as Bank of the Philippine Islands and Metropolitan Bank & Trust Co., as well as companies that have low valuations with the potential for earnings to recover like DMCI Holdings, Inc., GT Capital Holdings, Inc. and Semirara Mining and Power Corp.

“What is there not to be positive about? Growth is still 10%, markets have fallen on US liquidity tightening, which is not going to get any worse, and fundamentals haven’t been impacted,” he said. — Bloomberg

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To Rise $14 Billion USD "Pollution Free" Hi-tech City of New Clark, Philippines' 95 Km Sq size

New Clark's developers, BCDA Group and Surbana Jurong, plan to start construction in 2022. - BCDA Group

The Philippines is planning a $14 billion 'pollution-free' city that will be larger than Manhattan

Manila, the hyper-dense capital of The Philippines, is known for its traffic jams. In a 2016 survey, navigation company Waze ranked Manila as having the "worst traffic on Earth."

The city's reliance on cars also exacerbates its growing air-pollution problem.

As a possible solution to Manila's smog and gridlock, the country plans to build an entirely new, more sustainable city called New Clark.

Plans for the $14 billion development — which will be larger than Manhattan — call for drones, driverless cars, technologies that will reduce buildings' water and energy usage, a giant sports complex, and plenty of green space.

A rendering of New Clark, a planned city for the Philippines. BCDA Group

BCDA Group Source: CNBC

Over the next three decades, the Philippines aims to build out New Clark about 75 miles outside Manila.

According to the development's plan, the city will eventually stretch 36 square miles — a land area larger than Manhattan — and house up to 2 million people.

BCDA Group Source: The Inquirer

New Clark will be divided into five districts, each with a specific function: government, business, education, agriculture, and recreation.

BCDA Group

While New Clark's exact design is not fleshed out, developers say the urban plan will prioritize environmental sustainability and climate resilience.

BCDA Group

With a minimum elevation of 184 feet above sea level, the city will likely not see much flooding.

BCDA Group

To reduce carbon emissions, two-thirds of New Clark will be reserved for farmland, parks, and other green space.

BCDA Group - Source: Reuters

The buildings will incorporate technologies that reduce energy and water usage.

BCDA Group 

Driverless cars, running on electric energy rather than CO2-emitting gas, will roam the streets.

BCDA Group 

Additionally, the city will feature a giant sports stadium and an agro-industrial park.

BCDA Group 

New Clark's developers, BCDA Group and Surbana Jurong, plan to start construction in 2022.

BCDA Group 

A new railway line could reduce the travel time between the two cities in half.

In late May, BCDA started the bidding process for companies to design, build, finance, operate, and maintain power and water systems in New Clark City.

BCDA Group 

The Philippines also struggles with economic development, and building an eco-city from scratch will come with a hefty price tag.

BCDA Group 

According to Wong, public-private partnerships will help finance the project.

BCDA Group 

In recent years, countries around the world — especially China — have unveiled plans for pie-in-the-sky urban developments.

BCDA Group 

Building cities from scratch rarely solve existing problems, but designing them can help urban planners imagine what's possible.

The fate of this project is still in the hand of the Duterte Administration as Budget is always required, though this project is feasible but priorities are also queuing.

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FINALLY: LTFRB asks UBER to pay discounted ₱190 Million to lift the remaining 2 weeks Suspension

Drivers and operators of UBER System Inc., gather and meet outside its main office in Mandaluyong City, August 15 2017, a day after the Land Transportation and Franchising and Regulatory Board suspended its accreditation and operation. Photo: Manila Bulletin 

The LTFRB late Friday night (25th August 2017) announced granting Uber’s appeal to lift the one-month suspension and pay instead a fine to make up for repeatedly violating the regulatory body’s order not to accept new drivers.

Rejecting the suggestion of the Kilusan sa Pagbabago ng Industriya ng Transportasyon (KAPIT) chairman Vigor Mendoza II that UBER should pay ₱6 Billion pesos, LTFRB finally decided a discounted amount that UBER should pay to lift the remaining 2 weeks of suspension.

“The Board thus rule to grant the prayer of respondent (Uber) to lift the suspension imposed in its order of 14 August 2017; in lieu thereof, imposes a fine of ₱190 million Philippine pesos,” the order, signed August 25, 2017, read.

In addition to the fine, Uber was told to remit ₱20 million as assistance to its 36,367 transport vehicle network service (TNVS) operators who were active in the last 28 days before the suspension order was issued. The ride-sharing company should show the LTFRB a certification from its depository bank as proof of its compliance.

 “The lifting of suspension will depend on the payment of fine and remittance of financial assistance,” LTFRB spokesperson Aileen Lizada told reporters in a text message..

Lizada said the ₱190 million fines was based on the average ₱7-10 million Uber earns from its 150,000 ridership per day, multiplied by the remaining days of suspension which was supposed to be effective until  September 14, 2017.

After facing off with LTFRB officials in a dialogue at the Senate, Uber on August 17, 2017 filed an appeal to the LTFRB to revoke its suspension, proposing that it pays a fine of greater amount than the ₱5 million earlier imposed on it for continuing to accept and activate TNVS operators under its platform despite the July 26, 2016 moratorium.

The regulator halted Uber’s operations for a month from Aug. 14, 2017 for disregarding a directive to stop accepting new driver applications.

Uber, which said it did not process those applications, later told the LTFRB it could pay a fine of ₱10 million Philippine pesos to get the suspension lifted.

The Uber freeze has attracted public attention because many Philippine commuters regard the ride hailing app as more reliable and competitive than mainstream transport services (TAXIs).

Like and share: Grab, Uber and U-Hop Philippines' Drivers and Operators group

Uber recently said it had nearly 67,000 Philippine drivers.

The dispute with the Philippine regulator is the latest setback this year to Uber (USA based firm), a firm valued at more than $60 billion US Dollars.

Its Philippines suspension caused a spike in demand for rival Grab, and long queues near offices and malls and some disgruntlement about reverting to using regular taxis.

Philippine Senator Grace Poe, a prominent advocate for improving transport services, tried to bring Uber and LTFRB officials together to work out a compromise. An executive of Uber apologized for its "misunderstanding".

Poe on Friday said the hefty fine should "make Uber rethink its actions and re-evaluate its strategy in testing the extent of government regulations."

The LTFRB last year suspended applications for ride-share operators, to work out how best to regulate the industry. It said Uber was "irresponsible" for challenging that order.

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UBER Asked to pay LTFRB ₱6 Billion to avoid 1-month suspension: Too much

Uber Philippines asked to pay ₱6 Billion to avoid 1-month suspension. Photo: Tech Wire Asia

A transport group leader on Wednesday claimed that Transport Network Company (TNC) Uber Systems Inc. should pay a fine of P6 billion—and not ₱10 million as ordered by the government—in place of its one-month suspension.

Kilusan sa Pagbabago ng Industriya ng Transportasyon (KAPIT) chairman Vigor Mendoza II made the suggestion in a hearing before the board members of the Land Transportation Franchising and Regulatory Board (LTFRB).

Mendoza noted that under the rules, drivers without a 45-day provisional authority (PA), which allows them to accept fares until they are issued a franchise, will have to pay a fine of up to ₱120,000 each if caught.

The lawyer said since Uber has sround 50,000 "colorum" vehicles, or those operating illegally, the company should then pay the government ₱6 billion.

"A ₱ 10-million fine would only mean that Uber is operating 84 colorum vehicles," Mendoza said.

Like and share: Grab, Uber and U-Hop Philippines' Drivers and Operators group

'Too much'

However, LTFRB board member Aileen Lizada said that it would be "too much" for the board to impose a ₱6-billion fine.

"I believe that is too much. I believe billions would be too much. We do listen, reasonable naman tayo," Lizada told reporters.

She added that Uber's appeal to convert the one-month suspension into a fine will be resolved as soon as possible.

"On the part ng board, considering 'yung urgency ng matter, we will do out best to resolve this the soonest as possible time, para we put to rest already itong issue na ito and we will be able to meet our deadline for September namin na technical working group, what we promised Congress and Senate," she said.

"We will be crafting and revising MCs (Memorandum Circulars) and we will be coming for the number of both TNCs if we see na we will be able to renew the respective accreditation," she added.

Uber, on August 17, asked the LTFRB if it could just pay a ₱10-million fine instead of serving its one-month suspension.

The LTFRB suspended the accreditation of Uber after it continued to accept new drivers into their platform. — MDM/BM, GMA News

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First Batch of Qatari & Saudi investors Arrive the Philippines for Palawan, Visayas and Mindanao Million Dollar Projects

MOUs worth amounting to US$ 206 million were signed this afternoon between Qatari local companies and the Philippines Economic Zones Authority (PEZA) Photo: Asian Telegraph Qatai

1st batch of investors from Qatar, Mideast visit Philippines

The first batch of investors from Qatar and the Middle East has visited the Philippines to study the locations identified by the Philippine Economic Zone Authority (Peza) for investments in several sectors.

Peza director general Charito B Plaza posted on her Facebook page that investors from the Middle East “are ready” to invest on agro-industrial economic zones, including a 1,000-hectare area for poultry and vegetable crops.

Other projects, according to Plaza, include the development of five islands in the southern part of the Philippines where investors are planning to build a resort, retirement village, and other tourism destinations.

The first batch of Middle East investors is among the 13 companies that signed letters of intent (LoI) with Peza during Philippine President Rodrigo R Duterte’s state visit to Qatar in April.

Speaking to Gulf Times during Duterte’s Qatar visit, Plaza had said Mindanao would be home to most of the $206mn (P10.3bn) worth of investments Peza signed with Qatari investors. She said the investments are expected to generate 5,870 new jobs in the country.

The investments range from retirement village projects, hotel and tourism ecozones, IT services and digital marketing, ecozone management services, poultry and halal food processing, as well as agro-industrial farming, and hospital and medical tourism economic zones, among others.

Plaza said, “While waiting for the Peza board’s approval of their application, we can already start looking for areas and economic zones where the investors can establish their industries. Vast islands in Palawan, Mindanao, and the Visayas are awaiting development.” According to Plaza, Peza had achieved 64% of its $1bn target from its initiatives in Saudi Arabia, Qatar, and the UAE, which Duterte visited in April.

“Thanks to the good economic climate and favorable conditions of the Arab investment market, I am confident that Peza can easily exceed its $1bn target earmarked for the Middle East,” she pointed out.

She also said the Philippines would be an ideal distribution hub for Qatar in fields such as defense, manufacturing, and food processing due to its “strategic location” in Asia and the Pacific.

Plaza also emphasized on the need for economic zones with logistics hubs, seaports, and airports, which are under the helm of the Philippines’ Department of Transportation.

“These logistics hubs must have special economic zone services such as warehouses, cold storage, and container yards so that we have abundant facilities to stock goods while waiting for ships to arrive,” Plaza said. She added, “All types of economic zones can be built in the Philippines depending on the potential and the type of land. Agro-industrial, agro-forestry, paper making, aquamarine, eco-tourism, medical tourism, and export manufacturing remain to be the most popular.”

PEZA & Qatari Investors Sign MOUs of US $ 206 m Investments in Philippines Economic Zones

A number of Qatari business community members and their representatives had one to one detailed meeting with Chairman and accompanying members of Philippines Economic Zone Authority today.

On the sideline of President Duterte visit to Qatar, a number of MOUs worth amounting to US$ 206 million were signed this afternoon between Qatari local companies and the Philippines Economic Zones Authority (PEZA).

Ramon M. Lopez, Secretary (Minister) Department of Trade & Industry of Philippines was also present on the occasion and witnessed the MOU ceremony. On behalf of PEZA, Brig. Gen. Charito Booc Plaza, Director General PEZA signed the MOUs.

PEZA local representatives Joseph Rivera, Greg Loayon and Adel Sa’adeh assisted in organising the signing ceremony.

Philippines Trade minister and PEZA authorities are part of official delegation of President Rodrigo Duterte, who is on his official visit to State of Qatar.

Read more at Gulf Times and Asian Telegraph Qatar

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Philippines Rejects EU $278 Million USD Remote Control Fund Loan Grant

Philippines rejected EUROPEAN UNION $278 Million USD Remote Control Fund Loan Grant for 2017

Philippines Rejects European grants

The Philippines will no longer accept grants from the European Union, the EU delegation to Manila said Thursday, following repeated tirades from President Rodrigo Duterte over its criticism of his deadly drug war.

"The Philippine government has informed us that they (will) no longer accept new EU grants," the delegation said in a brief statement.

The decision will affect grants worth 250 million euros ($278 million), according to Franz Jessen, the EU's ambassador to Manila.

Philippine government officials did not immediately comment, with the finance department saying a statement would be issued later on Thursday.

Duterte, 72, has repeatedly criticised European lawmakers and the EU for condemning his drug war, which has claimed thousands of lives and led to warnings from critics of a crime against humanity.

In comments last year, he used vulgar language and raised his middle finger in a response to a European parliament statement expressing concern over the killings.

The German government also expressed concern after Duterte last year drew parallels between his drug war and Nazi Germany leader Adolf Hitler's Holocaust.

"Hitler massacred three million Jews. Now there are three million drug addicts (in the Philippines). I'd be happy to slaughter them," Duterte said, underestimating the number of people killed in the Holocaust.

Duterte later apologised for the Hitler reference but said he was "emphatic" about wanting to kill addicts.

Duterte easily won presidential elections last year after promising to end crime by killing tens of thousands of drug traffickers and addicts.

Police have reported killing about 2,700 people since Duterte took office at the end of June and immediately launched his war on drugs.

Unknown assailants have killed more than 1,800 others, while about 5,700 other violent deaths are under investigation, according to police data.

Partly in response to American criticism of the drug war, Duterte has also loosened the Philippines' ties with traditional ally the United States.

He has instead embraced China, which has supported his drug war and sought to deepen economic ties by providing billions of dollars worth of investments and aid to the Philippines.

Duterte, a self-described socialist, has also forged warmer relations with Russia, and will travel to Moscow next week to meet President Vladimir Putin.

Read more at Sources: AP & SBS  

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DuterteNomics Unveiled First Subway in The Philippines, Completion of 4 railways in 2022 New Airports, Seaports, Railways, Roads & Bridges

Slide presented at the "Dutertenomics" forum on Tuesday, April 18, 2017 where President Rodrigo Duterte's top officials introduced planned construction projects. DOTr/Released

DuterteNomics blueprint unveiled the build, build, and build for the “golden age of infrastructure,” in the Philippines.

• ₱227 Billion - First Subway in the Philippines for Quezon City to Taguig City a 25 kilometer underground railway system to finished year 2024
• ₱225-million PNR North Rail systems, 100-kilometer Tutuban - Clark to be completed in 2021
• ₱55.478-Billion – First Mindanao Railway (Circumferential) project, a 2,000 kilometer railway to finished 2021
• PNR South Rail that would connect Manila with Calamba and Los Baños in Laguna, and the Bicol region to be completed by the fourth quarter of 2021
• Manila International Airport – Quezon City – Clark International Airport Bullet train system interconnecting the first Subway in QC to finished before 2021
• ₱23.3 billion North Luzon Expressway-South Luzon Expressway connector road, which starts from C3 Road in Caloocan through Manila, crossing Espana towards PUP, Sta. Mesa connecting Metro Manila Skyway Stage 3.
• The completion of the SLEX-NLEX connector road, projected to take place in 2020, is expected to reduce vehicle congestion along EDSA, C5 Road and other major thoroughfares, and cut the travel time between NLEX and SLEX to 15-20 minutes from more than an hour.

First Metro subway's first phase to link Quezon City, Taguig

Transportation Secretary Arthur Tugade said at a forum on Tuesday that the subway system, pegged at an initial ₱227 million for the central section, will pass Mandaluyong City and Pasig City.

The transport system, the first subway project the country will undertake, is foreseen to accommodate around 300,000 commuters daily, Tugade said.

The proposed subway stems from an ongoing Japan International Cooperation Agency's feasibility study, which will be subject to the approval of President Rodrigo Duterte and his officials. The study is expected to be completed in July this year.

The Japanese agency's proposal aiming to ease road congestion includes an expansion of the subway to start from San Jose del Monte in Bulacan to Dasmariñas City in Cavite to be completed by 2024.

Economic, Development  Blueprint

President Rodrigo Duterte's economic managers made the announcements at an event hosted by the Department of Finance and the Presidential Communications Operations Office (PCOO) at the Conrad Hotel, Pasay City.

According to the PCOO, DuterteNomics includes the current administration's main governance and fiscal policies, comprehensive big-ticket infrastructure programs and upgraded social services targeted to accelerate growth. The economic and development blueprint also aims to transform the Philippines into a "high middle-income economy" by 2022.

Executive Secretary Salvador Medialdea said the economic and development plan is anchored on the 10-point socioeconomic agenda of the Duterte administration that focuses on "the production of a progressive tax reform package and measures designed to bring about increased competitiveness, accelerated infrastructure spending, and improved social amelioration and development programs."

Finance Secretary Carlos Dominguez, in a keynote speech, said the Philippines had trailed behind other countries with good economy, but stressed that it is about time to rebuild the country’s competitiveness by pushing for programs such as tax reform package and infrastructure projects. "An investment-led growth pattern creates job and opens more economic opportunities for our people," he said. "We must build a truly inclusive economy. To do so, our economy should be investment-led, creating new jobs and opening opportunities for all." 

Dominguez said the government is also looking forward to what has been called a "demographic sweet spot," as the populations of some of the more mature economies in Asia begin to age. He said that the administration has to invest in the Filipino youth.

Ongoing projects are being implemented by the Department of Public Works and Highways (DPWH) that are either locally funded, with Official Development Assistance (ODA), or through Public-Private Partnership (PPP) projects, the following: 

1. Mandaluyong Main Drainage Project (Phase II)
2. Central Luzon Link Expressway, Phase I,
3. Tarlac-Cabanatuan, Nueva Ecija; Integrated Disaster Risk Reduction and Climate Change Adaptation Measures in the Low Lying Areas of Pampanga Bay
4. Tarlac-Pangasinan-La Union Expressway (Binalonan-Rosario Section)
5. Flood Risk Management Project (FRIMP) in Cagayan de Oro River
6. Sen. Gil Puyat Ave.-Paseo De Roxas / Makati Ave. Vehicle Underpass Project
7. Bonifacio Global City-Ortigas Center Link Road Project
8. UP-Miriam-Ateneo Viaduct along C-5/ Katipunan
9. Metro Manila Priority Bridges Seismic Improvement Project (Guadalupe Bridge and Lambingan Bridge
10. Widening/Improvement of Gen. Luis St.-Kaybiga-Polo-Novaliches
11. Cavite-Laguna Expressway
12. NLEX-SLEX Connector Road
13. Metro Manila Interchange Construction Project VI
14. Davao City By-Pass Construction Project (South Section (Road) and Center Section (Tunnel)
15. Panguil Bay Bridge, and Phase 1 of the Metro Manila Flood Management Project

PPP awarded projects

1. Integrated Transport System (ITS) Project
2. South Terminal
3. Integrated Transport System (ITS) Project
4. Southwest Terminal
5. LRT Line 1 Cavite Extension and Operations and Maintenance
6. Contactless Automatic Fare Collection System
7. Mactan Cebu International Airport Project
8. MRT Line 7

PPP projects that are either undergoing or about to undergo bidding

1. The Development, Operations and Maintenance of Bacolod-Silay, Davao, Iloilo, Laguindingan and New Bohol (Panglao) Airports;
2. LRT Line 2 Operations and Maintenance;
3. Road Transport Information Technology Infrastructure (Phase II);
4. LRT Line 6;
5. Philippine National Railways – South Line (previously, the North-South Railway Project – South Line);
6. NAIA Development

The DOTr, through a combination of ODA and PPP, is implementing and developing a total of 23 rail projects which will greatly expand the country’s rail system from the current 77 kilometers to over 1,750 Km.

The 10 ongoing rail projects includes the following:

1. PNR North (Manila-Malolos),
2. PNR South Commuter PPP Project (Manila-Los Banos),
3. PNR South Long Haul PPP Project (Los Banos-Legaspi,Matnog,Batangas Port),
4. Line 1 Cavite Extension PPP Project (Baclaran-Niog),
5. Automated Fare Collection System PPP Project (Beep Card),
6. Line 2 O&M PPP Project,
7. Line 2 East Extension (Santolan-Masinag),
8. Line 2 West Extension (Recto-Pier 4),
9. Line 6 PPP Project (Niog-Dasmarinas),
10. Line 7 PPP Project (San Jose Del Monte-North EDSA).

Rail projects are being developed by DOTr

1. Mindanao Railway (Circumferential),
2. Cebu Railway (5 lines),
3. Panay Railway,
4. Line 4 (Taytay-Manila) PPP Project,
5. Line 5 (Pasay-Makati-Taguig) PPP Project,
6. Line 8 (Quezon City-Manila) PPP Project,
7. PNR North Phase 2 (Malolos-Clark),
8. Mega Manila Subway Project,
9. Subic-Clark Railway

DOTr 3 Bus Rapid Transit (BRT) systems:

1. Cebu Bus Rapid Transit (BRT)
2. The Quezon Avenue Bus Rapid Transit (BRT)
3. The Central Corridor (EDSA) Bus Rapid Transit (BRT).

Other DPWH projects:

1. Panay-Guimaras-Negros Link Project
2. EDSA-Taft Flyover
3. Central Luzon Link Expressway, Phase II
4. Cabanatuan-San Jose, Nueva Ecija
5. Flood Protection Works in the Marikina River including Retarding Basin
6. Dalton Pass East Alignment Alternative Road Project

FUNDING FOR THESE PROJECTS

The government is spending 5.3 percent of the country’s gross domestic product in 2017 to finance the building, Finance Secretary Carlos Dominguez said. This will be raised to 7.1 percent by 2022.

This is higher than the 2.6 percent annual average of the past six administrations in the last 50 years, he said.

“In the decades when we neglected our infrastructure, we lost out on competitiveness,” Dominguez said.

“This is the time to move decisively. Fortunately we have a leader capable of much audacity.”

Budget Secretary Benjamin Diokno said the government under Duterte would spend P8.4 trillion for infrastructure.

A government portal (www.build.gov.ph) was also launched to help the public guard the infrastructure projects against corruption.

Presidential spokesperson Ernesto Abella said the website would be regularly updated to reflect the progress of every project.

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China, Japan, Korea, Russia compete for $2 Billion Nuclear Plant, LNG Philippines Gas project

Russia Floating Nuclear Power Plant Technology. illustration: popsci.com

China, Japan compete for $2bn Philippine gas project

China and Japan are competing for a $2-billion liquefied natural gas (LNG) project in the Philippines, Energy Secretary Alfonso Cusi told the Nikkei Asian Review.

Over 20 companies from eight countries have proposed partnerships with state-owned Philippine National Oil Corp. for an LNG receiving terminal at the southern part of Luzon Island. Cusi said his team is still reviewing funding and technology options.

"We are talking to China [and] Japan," he said. "We are looking at which can offer the best in terms of funding. It's too early to say who is more advanced -- there are so many things to look into."

Countries that offer the best financing options usually pick their own domestic contractors. Cusi said Tokyo Gas, Osaka Gas, and a number of Chinese state-owned and private companies have shown interest.

Cusi is vice chairman of President Rodrigo Duterte's PDP-Laban party. He has traveled to Beijing and Tokyo this year to solicit energy investments for the Philippines, which runs into alerts and price spikes for electricity whenever the country's lone LNG facility undergoes maintenance.

Cusi said he plans to travel to South Korea and Russia, and does not favor any particular power-generating technology. He said Malampaya, the only source of natural gas in the Philippines, is expected to be exhausted by 2024. The gas field operated by a consortium led by Royal Dutch Shell provides 40-45% of Luzon island's power requirements. Luzon accounts for two-thirds of gross domestic product in the Philippines.

The proposed terminal could import LNG from other countries while alternate Philippine resources are being developed. These include gas fields in the South China Sea in dispute with China. The terminal's plant will initially generate around 200 megawatts, but can expand to 800MW. Cusi hopes to find an investor this year.

Duterte is targeting total household electrification before he leaves office in 2022. As of December, over 90% of households had access to energy. Cusi also said he is studying the possibility of activating a $2 billion nuclear power plant on the Bataan peninsula. The project, initiated under President Ferdinand Marcos in the 1970s but never activated, is located near an earthquake fault line.

Sulu Province of Southern Philippines could have the first ever operating 100 MW Nuclear Power Plant this year according to the report (see here) - Nikkei Asian Review

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Philippines to Build First Operational 100 Megawatt Nuclear Power Plant in Sulu this Year

Modern Nuclear Power Plant Diagram

Department of Energy considering Sulu as site for nuclear plant this year

Sulu Archipelago in western Mindanao is non-typhoon and non-earthquake prone areas with almost Zero fault line an is among the areas being eyed for a modular nuclear power plant as the Department of Energy (DOE) targets to complete a nuclear energy program within the year.

The Nuclear Energy Program Implementing Organization (NEPIO) is currently studying the nuclear program of the country and has scheduled scientific visits and capacitating programs to come up with a national policy, Energy Undersecretary Donato Marcos said.

“Within this year, we will come up with a comprehensive report. Of course it will be presented to the Office of the President,” Marcos said.

NEPIO was created by the DOE to unify the conduct of various studies and research on nuclear energy development in the country.

It was designed to work in three phases, starting with a comprehensive study on the overview of the country’s energy needs which will lead to forming a policy decision on nuclear.

Phase 2 calls for the preparatory work for the construction of a nuclear power plant while Phase 3 pertains to the activities to implement the said power facility.

The study is expected to undergo a long process to iron out every detail for the country’s nuclear program, Energy Secretary Alfonso Cusi said.

“What makes it longer is process because of course, a due process for everybody…So we have to go through the process every step of it. Unlike when you have a country that is willing or a host province that would be willing to do it, then the process will be faster,” he said.

Cusi said there is still a lot of opposition to  the operation of the Bataan Nuclear Power Plant (BNPP), which has been mothballed since the 1980s.

$2.3 Billion USD Dollar Mothballed Nuclear Power Plant in Bataan. Bataan Nuclear Power Plant is a nuclear power plant, completed but never fueled, on Bataan Peninsula, 100 kilometers west of Manila in the Philippines. It is located on a 3.57 square kilometre government reservation at Napot Point in Morong, Bataan. 

“We are going in to the process of resolving all the concerns that are being raised against it,” he said.

Sulu province has been very aggressive in pitching to host a nuclear power facility, Marcos said.

“They usually visit the secretary and proposing that they will be hosting a SMR, a small modular reactor, so they can finally have stable, secured, predictable and reasonably priced electricity in the region,” Marcos said.

Since it’s modular, it can have a capacity of 100 megawatts (MW) at most, the DOE undersecretary said.

Putting up a nuclear modular reactor in other provinces is also part of the study.

“As long as the provinces are willing. That’s why were forming a national policy… Once it is in place, and there is a host province, we can do it,” Cusi said.

If materialized, Sulu, Mindanao could be the first province in the Philippines to have the operational nuclear powerplant after the mothballed Nuclear Powerplant in Morong, Bataan in Northern Luzon.

Western countries are promoting the Nuclear Power Plant as clean, cheapest and safest renewable source of energy.

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Smartphone boom driving jump in digital payments in the Philippines

A motorist pays toll at the North Luzon Expressway with a PayMaya-issued card. PayMaya offers a smartphone app that allows users to create a "virtual" credit card, without needing a bank account.PHOTO: PAYMAYA


In the Philippines, cash is still king.

Just one in 10 Filipinos transact online via their bank accounts, although half the nation's population of 102 million are already using the internet.

Out of 2.5 billion bank payments worth US$74 billion (S$105 billion) each month, only 1 per cent, or about US$740 million, are electronic and most payments involve small amounts. This equates to roughly US$60 a month for the 11 million people who make online payments via their bank accounts. The vast majority of bank transactions, by value, are still by cash or cheque.

"It's more 'cashlite' than 'cashless' in the Philippines," said Ms Nick Wilwayco, head of communications at e-commerce firm PayMaya.

A boom in mobile phone use, though, could soon change things.

The Philippines is the fastest-growing smartphone market in South-east Asia. There are currently 40 million Filipinos with smartphones and that number is forecast to hit 90 million by 2021.

"Filipinos are more adept at mobile. It is easier for them to discover and to use it," said Ms Wilwayco.

Using Apple, Android and Facebook apps, as well as "digital wallets", mobile phone users can open credit and debit accounts that they can use to transact online, without needing a bank account or even an internet access; just the SIM card.

Voyager Innovations, a unit of telco Smart Communications, currently has over 11 million customers using its smartphone apps to pay for internet and in-store purchases, transfer money, and even secure loans. They declined to give exact growth figures, only saying they were in the "triple-digits".

For Ms Geraldine Rodriguez, 47, a freelance writer, going cashless has meant convenience and peace of mind, even though only a fraction of her daily transactions are online.

She pays about 1,650 pesos (S$46) worth of phone and internet bills each month online via her bank account, and uses a prepaid card when taking the MRT. Most of her bills she still has to pay at a centralised payment centre, though.

With less cash on her, there is less anxiety that she may get mugged or her wallet snatched.

"Is it convenient? Very," said Ms Rodriguez.

Banks have long been a hurdle to greater take-up of online payments. Only three in five Filipinos have bank accounts and among these are the 11 million who pay their bills, order takeout and buy plane tickets, gadgets, clothes, and fashion accessories online, using their ATM, credit and debit cards.

Many still worry about security and privacy.

In a report released in July last year (2016), internet security firm Trend Micro said the Philippines is the third most affected country when it comes to online banking fraud.

Which is why smartphone apps have proved so appealing because it frees up people from having to use bank accounts to make payments or indeed even having a bank account. by rdancel@sph.com.sg StraitsTimes

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Wilcon to raise ₱7 Billion Php in Philippines’ 1st IPO this year

Wilcon Depot San Pablo. Photo: Inquirer

WILCON Depot, Inc. is raising ₱7 billion in the first initial public offering (IPO) this year after pricing the deal at the low end of its target range.

In a statement released on Friday, First Metro Investment Corp. (FMIC) Executive Vice-President Justino Juan R. Ocampo said the IPO price of the home improvement and construction supplies retailer was set at ₱5.05 per share, giving the company a market capitalization of more than ₱20 billion after listing.

“We convinced Mr. Belo to price at lower end to ensure discount to comparables and give upside to investors,” BDO Capital & Investment Corp. President Eduardo V. Francisco said in a separate mobile phone message, referring to Wilcon Chairman William T. Belo.

Wilson had earlier set a price range of ₱5-₱5.68 apiece.

The offering was more than three times oversubscribed on the back of strong demand from “quality” institutional investors and offshore investors attracted to the strong prospects of the country’s construction and housing industry, FMIC said.

“The success of Wilcon’s IPO demonstrates the investment community’s continued confidence in the Philippine retail market. As disposable income of Filipinos increases, a lot more people are now buying houses or improving their existing homes,” Mr. Belo said in the same statement.

Proceeds from the IPO will be used to bankroll store network expansion, debt retirement and general corporate purposes, according to Wilcon’s prospectus.

Since opening its first store in 1977, Wilcon has transformed itself into a one-stop shop for construction supply and home improvement. It has 37 depots and small format stores across the country, 17 of which are in Metro Manila, 16 more in Luzon, 2 in Visayas, and 2 in Mindanao, with over 2,000 employees.

Wilcon is banking on the continued expansion of its store network to sustain double-digit growth in sales and earnings. In the first nine months of 2016, it booked a 10% year-on-year increase in net sales to ₱11.73 billion and netted 50% more or ₱483 million.

Wilcon kicks off the domestic tranche of the maiden share sale on March 20, with its debut on the Main Board of the Philippine Stock Exchange slated on March 31. The equity offer is selling 34% of its outstanding capital to the public.

FMIC was tapped as the issue manager and bookrunner, with BDO Capital also acting as joint lead underwriter for the IPO. RCBC Capital Corp. and Penta Capital Investment Corp. were mandated as co-lead underwriter and participating underwriter.- Business World Online

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Solar Philippines Breakground $150 Million USD Solar Farm in Tarlac

At the ceremonial groundbreaking of the 150-MW Tarlac solar farm, with the first ‘Made in the Philippines’ panels by Solar Philippines are (from left): Energy Secretary Alfonso Cusi, Solar Philippines president Leandro Leviste, Tarlac Governor Susan Yap and Concepcion Mayor Andy Lacson Photo: PhilSTAR

Solar pioneer starts 150-MW Tarlac solar farm

Solar Philippines has kicked off the construction of its 150-megawatt (MW) solar farm with battery storage here, its largest solar power project to-date, which can provide the province’s requirements in six months time, its top official said yesterday.

The whole solar farm will start operating as a merchant plant in the third quarter of the year, Solar Philippines president Leandro Leviste said during the ceremonial groundbreaking of the project.

“The output of the 150 MW plant that will be operating here by the second half of 2017 will be able to power the entire Tarlac province with cheap renewable energy,” he said.

The company official said this will heed Energy Secretary Alfonso Cusi’s call to put up more merchant power plants – or those generating facilities selling their output to the wholesale electricity spot market (WESM) – to further spur competition in the electricity spot market.

“What we want is to make this fast…(because) solar is now cheaper than coal and therefore get this online within 2017. And that’s why even without the contract finally approved by regulators, we’re doing this for most of the plant’s capacity,” Leviste said.

The Concepcion solar farm will comprise close to 450,000 solar panels and over 150 hectares, with room to expand as demand for solar with batteries increases.

Leviste said the cost to put up the solar farm is equivalent to $1 million per megawatt, or roughly $150 million for the entire project.

“With the battery… it can be an additional 20-50 percent of the cost of the project. But we’re not doing all the batteries all at once, it’s going to be phased incrementally,” he said.

Solar Philippines is the developer, investor, contractor and supplier for its projects – a strategy which the company believes is the key to making solar cost-competitive.

“Why do we expect lower price? One is vertical integration, by doing solar panel manufacturing in-house as well as the construction. the development, the financing will definitely lower the cost. Second is the economies of scale,” Leviste said.

Once completed, the power plant will have many firsts in its name - philSTAR

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ASIA: China's Yuan Top, 2nd: Philippine Peso - Real effective exchange rate S&P Rating

China's Yuan and Philippine Peso - leading currencies in the Asia Pacific

China’s yuan strongest real effective exchange rate, PHL peso second

The Chinese currency rose as the strongest in terms of real effective exchange rates among nine Asia-Pacific countries, followed by the Philippines peso, Standard & Poor’s Global Ratings said in a report.

“In terms of real effective exchange rates, another indicator we studied, the Chinese yuan rose 45.0 percent over the past 10 years – the strongest performer in our sample. It was also the strongest performer since the Asian Financial Crisis,” S&P said in “Who’s A Currency Manipulator Now in Asia-Pacific? The Indicators Don’t Point To China.”

"The Philippine peso was second with 29.9 percent,"  the global debt watcher noted.
“The Chinese government has been loosening its control over the Chinese yuan to bring the currency closer to its fundamentals. This might be the reason why the yuan strengthened significantly,” Guian Angelo Dumalagan, market economist at the Land Bank of the Philippines, told GMA News Online.

“As for the Philippines, the country has grown tremendously in the past decade. The proportion of the country's foreign debt declined making the country less affected by external headwinds,” Dumalagan noted.

The Philippines has also accumulated a sizable amount of foreign reserves, giving it added buffer from external risks. “These have contributed to the peso's strength,” the LandBank economist said.
The International Monetary Fund defines real effective exchange rate (REER) as a measure of the value of a currency against a weighted average of several major currencies and adjusted to the effects of inflation.

In its study, S&P examined three external indicators of currency manipulation – REER, current account balances, and official (foreign) reserves – and found that China showed the least evidence of currency manipulation.

Given the reemergence of currency manipulation in the US policy debate, the debt watcher said it examined three external indicators of manipulation over a 10-year period to see how the nine economies stack up.

"The big surprise is that China came in last place, showing the least evidence of currency manipulation," Paul Gruenwald, Asia-Pacific chief economist for S&P Global Ratings, said.

"This result derives from its having a sizable decline in the current account-to-GDP ratio; the strongest real effective exchange rate; and a relatively sharp decline in reserves,” Gruenwald added.

According to S&P, current account balances, the first indicator, have trended downward over the past decade for most of the nine economies, with Malaysia and China showing the largest declines.

"This suggests that the Chinese authorities allowed their currency to adjust more than any other economy in the region," Gruenwald said.

The level of official reserves is the most direct indicator of currency intervention, and a rising level is usually considered as evidence the central bank is in the market intervening to prevent the currency from appreciating.

Taiwan and Thailand, with the two largest reserves, saw their reserves-to-GDP ratios rise most over the past decade, S&P noted.

Two economies saw sharp declines in their reserves-to-GDP ratios over the past decade – Malaysia (-19 percentage points) and China (-12 percentage points), it said. — See more at:  VDS, GMA News

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Seven Japanese trading houses investing $3.9b in Philippines

Sumitomo Farming Technology

Seven major Japanese trading houses are looking at investing up to $3.9 billion (₱198.5 billion) in different industries in the Philippines.

After his recent trip to Tokyo, Department of Trade and Industry (DTI) secretary Ramon Lopez disclosed on Monday (March 13) that the Japanese companies who made the commitment (to invest in the country) were Mitsubishi Corp, Mitsui and Co Ltd, Sumitomo Corp, Itochu Corp, Marubeni Corp, Toyota Tsusho, and Sojitz.

Others present in the dialogue were Transportation Secretary Arthur Tugade, and Philippine ambassador-designate Jose Laurel — who got together with representatives of Japanese companies with a broad range of business activities.

Lopez noted Marubeni is willing to invest in additional coal power plants worth ₱75 billion over the medium term; Itochu and Sumitomo (through Philippines subsidiaries Dole and Sumifru respectively) willing to invest an additional ₱12.9 billion through 2018 to expand their integrated farming projects in Mindanao; Sumitomo, Sojitz, and Mitsui jointly invested in Coral Bay Nickle Corp and Taganito High Pressure Acid Leaching (THPAL) Nickle Corp in Surigao and Palawan, at a cost of ₱80 billion.

Mitsubishi, Sojitz, Mitsui, and Toyota Tsusho, and, all the seven trading houses are supporting the Philippines’ Comprehensive Automotive Resurgence Strategy (CARS) Program created in 2015 to attract new investments, stimulate demand and effectively implement industry regulations that will revitalize the Philippine automotive industry, and develop the country as a regional automotive manufacturing hub.

All the Japanese firms also expressed interest in the Philippines’ so called “Golden Age of Infrastructure,” like the railway and subway projects, the Clark Green City project, the Expanded Port and RoRo Building programs, and the Airport Development projects.

The Japanese trading houses were also encouraged to use their expansive business systems to help in planning an efficient set of economic infrastructure, such as farm-to-market roads, bridges, seaports, airports, railways for cargo, passengers and RORO vessels, and service providers.

“The fundamentals are there in terms of a fast-growing economy, a 109-million population base, standing trade agreements, and a young, talented, and dedicated work force,” Lopez said. - Tomas S. Noda III of Deal Street Asia

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