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John Eduard Franco

Poll cites price lift from fading base effect

By | Property News

NOVEMBER inflation — which the government will report on Dec. 5 — likely picked up on the back of fading base effects from last year’s successive multi-year highs, according to economists asked last week.
A number of the 16 analysts polled also cited upward inflationary pressure from the African Swine Fever (ASF) outbreak that spurred demand for pork substitutes like chicken, an increase in electricity rates and the seasonal consumption boost as Christmas approaches.

Last week’s poll yielded an estimate median of 1.2% for November, right below the midpoint of the 0.9-1.7% range given last Friday by the Bangko Sentral ng Pilipinas’ (BSP) Department of Economic Research.
Those estimates compare to October’s actual 0.8% — which marked the fifth straight month that inflation eased — and November 2018’s six percent that was a slowdown from the nine-year-high 6.7% recorded in September and sustained in October.
The overall rise in prices of widely used goods averaged 2.6% in the 10 months to October.
Easing inflation this year prompted the BSP last month to further trim its full-year 2019 inflation forecast to 2.4% from an already downgraded 2.5%, though still within its 2-4% inflation target range, compared to last year’s near-decade-high 5.2%.
The median of BusinessWorld’s poll for November would yield a 2.49% year-to-date average, while BSP’s estimate would result in a 2.46-2.54% range as of that month.
“Some of the high base effects also started to wear off in November. Inflation likely has bottomed out and may edge up higher in December,” Jiaxin Lu, economist at Continuum Economics, said in an e-mail.
Alex Holmes, Asia economist at Capital Economics, signaled in an e-mail that inflation could pick up further, noting that “[b]ase effects from the spikes in food and fuel prices last year are set to fade over the coming months.”
Analysts also cited the impact of ASF — whose first outbreak in the country this year was confirmed in early September — on prices of substitutes for pork products.
“We did notice a drop in pork prices while substitutes such as beef, dressed chicken and select fish items were pricier as consumers switched to these other forms of protein,” ING-NV Senior Economist Nicholas Antonio T. Mapa said.
“Upside risk to the relatively low inflation include the impact of African Swine Fever as global meat production slows down, causing some uptick in the prices of pork and alternative meat products,” GlobalSource Partners economist Romeo L. Bernardo said.
Other analysts also cited higher electricity tariffs, as the Manila Electric Co. (Meralco) — the country’s biggest power distributor — jacked up the overall rate by P0.4717 per kilowatt-hour due to higher generation charges in the October supply month. “In addition to fading base effects, also a roughly five percent month-on-month increase in Meralco electricity costs over the month [could have spurred inflation],” ANZ Research economist Mustafa Arif said.
For UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion, “[t]he Christmas fever may have already seeped through consumption… as evidenced by the recent successes of online sales initiated by online retail firms like Lazada and Shopee, and it is anticipated that the next online sale, as the Christmas season nears, will eventually rake in more sales and revenues.” — Luz Wendy T. Noble

Senate resolution calls for probe on flagship projects, China funding

By | Property News

A RESOLUTION filed in the Senate calls for an inquiry on the implementation of infrastructure projects under the “Build, Build, Build” program and its reliance on official development assistance (ODA), particularly from China.
In Senate Resolution No. 221, Senator Sherwin T. Gatchalian noted that “the government’s flagship infrastructure program has been hounded by several issues, including delays in project implementation, onerous terms of the loans secured from China, as well as concerns about increased reliance on ODA loans with China.”
Citing National Economic and Development Authority (NEDA) data, the resolution noted that 59 of the 75 flagship projects on the old list were to be funded by ODA, of which 19 — accounting for a fourth or P515 billion — were to come from China.
“Chinese ODA tends to lean towards export promotion rather than welfare and economic growth, and prescribes no less than 50% of total procurement for such loans to be done in China or performed by Chinese companies employing Chinese workers,” the resolution read, arguing further that “Chinese ODA loans deprive ordinary Filipino workers of the opportunity to work and partake of the benefits of the loan that Filipino taxpayers will be paying for.”
Saying she had yet to read the resolution, NEDA Undersecretary Rosemarie G. Edillon said by phone on Sunday: “Of course, we will cooperate (with the inquiry).”
The government has revised its list of flagship projects, increasing the number to 100 from 75 and including more to be funded by public-private partnerships (PPP) — a mode initially relegated by the current administration to local projects, saying that projects under this framework took longer to move from conceptualization to construction.
Twenty-two projects worth P167.95 billion will be funded by the national budget; 49 projects costing P2.31 trillion will be ODA-funded while the 29 others will be PPPs that will cost the government P1.77 trillion. — Charmaine A. Tadalan

Organic rice production named a Mindanao priority program

By | Property News

DAVAO CITY — Organic rice production and exports have been designated a priority program for the southern island next year, the Mindanao Development Authority (MinDA) said.
MinDA’s Technical Working Group on Organic Rice Certification has been staging roadshows on International Organic Standards, with the fourth leg held in the town of Molave, Zamboanga del Sur last week.
Participants included over 200 organic farmers from Lanao del Norte, Misamis Occidental, Zamboanga del Norte, and Zamboanga del Sur.
“These are the projects that we will be intensifying next year as this is also related to poverty reduction. Increasing farmers’ income will also go down to poverty reduction,” Undersecretary Janet M. Lopoz, MinDA executive director, said at the Habi at Kape forum last week.
Olie B. Dagala, MinDA Investment Promotions, International Relations, and Area Concerns director, said the development of the high-value organic rice is also intended to cushion the impact of the Rice Tariffication Law, or Republic Act 11203, which removes restrictions on the volume of imported rice and instead uses tariffs to regulate entry.
“After the rice tariff law, we have been monitoring whether farmers will abandon their farms or convert them,” Mr. Dagala said.
He said organic rice is a niche market with higher margins and export potential.
Currently, he said, organic farms are still small-scale. — Maya M. Padillo

What it takes to become big in Japan

By | Property News

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What it takes to become big in Japan

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The Tokyo showroom of H3O and its founders Jason Coates (L) and Hirohito Suzuki. — WWW.H3OTOKYO.COM

The Tokyo showroom of H3O and its founders Jason Coates (L) and Hirohito Suzuki.

The Flower Mountain set-up at the pop-up trade show, Parallel Culture Tokyo, at The Curve in Bonifacio Global City, Taguig City, which showcased homegrown Japanese brands Name., Vital Material, and Flower Mountain. The three brands will soon be distributed in the Philippines.

JAPAN is a place of many contradictions. It is simultaneously old and young; frighteningly modern and comfortingly aware and compassionate of its past. Its people hold on to who they are, and yet openly takes influences from the West. Several fashion designers call it home, and the easiest names to recall from that region are Rei Kawakubo and Issey Miyake. When it comes to large-scale production meanwhile, Muji and Uniqlo are successful global exports. The Japanese seem to have it all in their own set of islands, and the thought of making it there makes penetrating the Japanese market a worthy, but also daunting prospect. BusinessWorld talked to two stakeholders in the competitive Japanese fashion market to help Filipino designers understand what makes Japanese customers tick, and the steps they’ll have to take in order to make it in Japan.
Earlier this month, the Phx Fashion Conference was held with the cooperation of the Department of Trade and Industry (DTI) through its agency The Philippine Training Trade Center (PTTC) and Fashion Design Council of the Philippines. The conference, held at the PTTC, lasted from Nov. 11 to 14. On the third day, BusinessWorld had the opportunity to talk to Jason Coates, an award-winning Australian fashion director, editor and art director who has been in the fashion and publishing industry for over 20 years, based in Tokyo, Singapore and Dubai. He has styled for Elle, GQ, Oyster, Harper’s Bazaar as well as for international celebrities. Along with his partner, Hirohito Suzuki, a marketing and business administration expert specializing in the marketing of overseas luxury products to the Japanese market, the two have put up H3O.
H3O is a company with multibrand showrooms in both Paris and Tokyo, showcasing new brands that they expect will become a hit in their respective markets. Aside from offering those products as for retail, they also provide assistance for public relations, communications, and brand consultancy. The brands they handle include Hong Kong brand Chance, the swimwear and underwear arms of luxury brands Dsquared² and Moschino, and Brazilian brand Melissa.
“They’re looking for a consistent product, a product that is consistently well-made,” said Mr. Coates about Japanese fashion buyers and end-line consumers. “It’s consistently delivered on time. It’s consistently priced. It has a consistent look and branding. They don’t want something that is one way one season, then the next season it’s completely different.” He gives an example of designers coming up with something new one season, then completely revamping it from season to season. “They don’t want that. They want consistency, and something that they can depend on.”
At the same time, they pursue novelty. “Newness. Japan always wants newness. They always want to be the first, they always want to discover something new, something fresh. It’s that newness.” That could be an advantage for Filipino designers, but Mr. Coates says that the Japanese could be very loyal to their chosen brands, and that fashion buyers work with precise efficiency, keeping meticulous spreadsheets on what sells and what does not. The secret to untangling the contradiction between loyalty and novelty here may be introducing something new, creating enough enthusiasm for that — and then sticking to it. “They want it; they want it again,” Mr. Coates said. He then introduced us to a new word, “teiban,” which a Japanese dictionary defines as “standard, routine, regular, basic, staple.”
“It’s that reoccuring style, that piece that is your very own,” he said. “If it fits well, each season, you’ll buy another one.
“There’s that consistency that big brands really understand,” he said, using Prada as an example. “I think small brands really need to understand it too.”
JAPANESE FASHION WEEK ORGANIZATION
Also this month, BusinessWorld attended Parallel Culture Tokyo, a one-day shopping affair by The Japan Fashion Week Organization (JFWO) at BGC’s The Curve. The event was meant to introduce three new brands about to penetrate Manila, namely Name., Vital Material, and Flower Mountain.
Name. is a bit avant-garde, featuring deconstructed clothing and prints of old advertisements. Vital Material, meanwhile, is a luxury body and home fragrance brand, present in about 40 markets from Asia to Europe. Flower Mountain is a sneaker brand that combines lightness and art with the hardcore science and sport of mountain climbing. JFWO Director Kaoru Imajo, when asked to describe how the brands reflect the buying culture of Japan, said, “Japanese culture is really mixed. What is good about it is how each store… edits it.”
According to him, the Japanese also have an affection for brands that manufacture locally. “Ninety percent of Japanese brands manufacture their clothes in Japan,” he pointed out. By that he meant that the Japanese like brands that are based somewhere, and source their products from that specific place as well (no outsourcing).
BusinessWorld asked Mr. Imajo as well about strategies for Filipino designer labels to enter Japan. “It’s the same thing in all over the world. They (Japanese consumers) buy what’s really luxurious, or T-shirts. Price-wise, you have to think about which way you want to go: luxury or streetstyle.”
It was in that moment that the points of both Mr. Coates and Mr. Imajo reached a convergence. Days before BusinessWorld talked to Mr. Imajo, Mr. Coates said the same thing — which must make it true. “Pricing is really important,” said Mr. Coates. “The pricing will help position your brand.”
His insistence of pricing goes as well with the message of consistency. He cited as an example, a hypothetical designer who might start raking in the cash, the recognition: in short, success. “You start getting a big head. You start thinking that it’s all because of you, and how great you are.” The designer then makes decisions like raising prices and changing looks, alienating a loyal consumer base who have started building brand loyalty. “The whole floor falls out, because you don’t have those foundations anymore.”
Mr. Imajo meanwhile, shared the same sentiments about consistency: “If you go to this [designer], you will know what they make. The buyers have to select what their loyal customers are looking for, each season.”
Going back to Mr. Coates, he says, “It’s really, really important that you make sure that these foundations are very, very strong,” he said about pricing and consistency. “That would be my best advice for anyone, no matter where they come from.”
“These are the things they screw up the most.”
Mr. Coates went over a few cultural points, such as Japanese people not liking prints on the crotch area, or preferring smaller prints to large ones, or preferring a certain lightness. “We can talk for hours about how certain patterns work, or what certain colors look better,” he said. “There are all sorts of things, but that’s kind of next step. It’s so important that you get that kind of consistency, that understanding of where you want to be placed in the market.
A consumer might think that designers revolve around desire: and to a certain point, that’s true. Fashion, after all, is a reflection of our desires, and how we want to be seen, as opposed to who we really are. In the whirl of fantasy in fabric, we forget the details that make these dreams real: a designer’s ability to constantly deliver (consistency), and the consumer’s ability to buy (being in a certain pricing bracket). Said Mr. Coates,
“It sounds boring, but ultimately, it is a business.” — Joseph L. Garcia

CPA Australia: Helping Filipinos build exceptional finance careers

By | Property News

As CFO of California Fitness and Yoga Co. Ltd since May 2011, Filipino Rowell Donato Ng Tan CPA (Aust.), who has been working in Vietnam for many years, does not hesitate when recommending CPA Australia Associate membership to all financial practitioners in the Philippines.
Rowell Donato Ng Tan (Rowell) was already working in Vietnam with Deloitte when he first heard about CPA Australia. He had become a CPA right after college in the Philippines and when Vietnam offered a CPA designation for foreigners, he did the same there. Even so, a lack of global recognition left him unsatisfied.
“As soon as I heard about CPA Australia entering Vietnam, I did not think twice about becoming a member,” Rowell says. “Obtaining my CPA Australia designation allowed me to realise my aspiration of having a prestigious designation that is truly acknowledged internationally.”
Although Rowell was a member before CPA Australia’s collaboration with the Professional Regulatory Board of Accountancy (BOA) and Philippines Institute of Certified Public Accountants (PICPA), he believes it now provides an unparalleled new opportunity for his fellow Filipino CPAs.
“Like me, every CPA in the Philippines can now apply for CPA Australia Associate membership by availing the membership pathway agreement (MPA),” he says.
Importantly, CPA Australia is accredited by the Professional Regulation Commission (PRC) – CPD (continuing professional development) Council of Accountancy as the first foreign CPD provider. It is working closely with regulatory authorities in the Philippines to constantly improve the competencies of accounting and finance professionals in accordance with international standards of practice.
Members of PICPA can now earn selected accredited CPD hours through discounted online courses offered by CPA Australia.
Resources to get ahead
In particular, Rowell notes that being able to access the vast resources available on the online learning platform of CPA Australia, such as various professional tools, templates, accounting-related literature and specialised courses, has added significant value to his auditing and accounting career.
“For example, the business analysis and financial modelling courses, as well as those on valuations, have been very useful in my present position. Such courses can help you to navigate the complexity of expanding a business and carrying out a fair valuation exercise, whereas reading books and accounting guidelines alone will not make you well equipped to carry out such critical tasks.
“The professional resources section of CPA Australia’s web portal normally comes in handy when there is an accounting matter that I need to understand and be able to apply in my day-to-day work. Without question, the tools and resources available have helped me a lot in building my knowledge and skills, which to date have been instrumental to my career achievements and ability to excel further.”
During his spare time, Rowell says he also listens to CPA Australia’s podcasts, which provide a lot of insights and have helped him to stay up to date with important developments in the profession.
Internationally recognised skill sets
“Being a member of CPA Australia comes with a lot of opportunities,” he adds. Indeed, Rowell’s company recently became part of Fitness and Lifestyle Group [FLG], which is the Asia Pacific’s leading health and wellness group, with headquarters in Australia and regional offices across South East and East Asia.
Accordingly, FLG files its financial statements in accordance with Australian accounting standards, and Rowell says his CPA Australia membership has assisted in terms of ensuring compliance with Australia’s stringent reporting requirements.
“The knowledge I have gained has also been fulfilling in my role as CFO of the group’s subsidiary in Vietnam. In addition, it has opened an opportunity for me to be considered by the group to not only work in Australia but also in other parts of the region where [FLG] has a presence.
“While there are many essential benefits of becoming a member, I can encapsulate them into three of the most significant areas,” Rowell says. “Firstly, if you are looking for ways to be recognised internationally and therefore be able to easily find work opportunities outside the Philippines, becoming a CPA Australia member is one of the answers you can count on.
“Secondly, if you want to fast track your career development and stay ahead of the competition, having the CPA Australia designation behind you is definitely a cut above the rest.
“Thirdly, if you want to keep abreast of all the significant accounting developments in the international arena, or even just intending to pursue CPD, there is a good number of accounting databases, references, and courses readily available once you become a member.
“It is a pathway to being heard and to stand out in the accounting profession, so my advice is to become a member of CPA Australia now.”
Find out more about becoming a CPA by visiting the membership pathway agreement.

NEDA Board approves tycoons’ NAIA rehab proposal

By | Property News

By Beatrice M. Laforga
THE National Economic Development Authority (NEDA) Board on Friday approved an unsolicited proposal from the country’s top tycoons to rehabilitate the Ninoy Aquino International Airport (NAIA), as well as five other infrastructure projects and the revised list of infrastructure flagship projects.
Finance Secretary Carlos G. Dominguez III said on Friday that the P102-billion proposal to rehabilitate the NAIA has secured its final approval from the NEDA Board, which President Rodrigo R. Duterte chairs.
With the approval, the NAIA rehabilitation will be subjected to a Swiss challenge.
Under the Swiss challenge, companies are invited to submit counterproposals to the project, which the original proponent may then match.
A “super consortium” composed of seven conglomerates, had offered to rehabilitate and expand NAIA over 15-year period at a project cost of P102 billion. The conglomerates involved are Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc.; and Metro Pacific Investments Corp., had
The NAIA rehabilitation is expected to increase its capacity to handle passengers to 47 million a year in the first two years and further expand this to 65 million after four years.
The international airport has been operating beyond its 30.5-million passenger capacity with 45.3 million passengers last year, 42 million in 2017 and 39.5 million in 2016.
FLAGSHIP PROJECTS
In a phone message on Friday, Bases Conversion and Development Authority (BCDA) President and Chief Executive Officer Vivencio B. Dizon said that the NEDA Board approval of the revised list of infrastructure flagship projects showed how serious the government is in implementing the Build, Build, Build program.
Among the approved projects that are included in the list, Mr. Dizon said, are the proposals for NAIA rehabilitation, the Bohol-Panglao International Airport, Samal Island-Davao City Connector (SIDC) project and the Davao public transport modernization project.
“All these are in the list of 100 flagship projects so this shows how serious the government is in swiftly moving towards the realization of the Build, Build, Build program and allow our people — to use the words of the President — to use use use them in order to live a more comfortable life,” said Mr. Dizon, who is also the presidential adviser for flagship infrastructure projects.
Midway through the administration’s term, the government reviewed and decided to revise its list of infrastructure flagship program to 100 from the previous 75 projects, scrapping those deemed no longer feasible while including “small but game-changing ones”.
OTHER PROJECTS
In a statement released Friday, the NEDA Board has approved a total of seven new projects on Friday with an estimated total project cost of P187.34 billion.
Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in the statement, saying that five out of seven projects will be implemented outside the National Capital Region.
“This shows that the administration is committed to develop growth centers in the regions and maximize the economic benefits of connectivity of communities,” Mr. Pernia said.
Among the projects that secured NEDA Board’s nod are the unsolicited proposal for the new Bohol-Panglao International Airport and the P18.66-billion Davao public transport modernization project of the Department of Transportation (DoTr).
The Davao public transport modernization project will be financed through official development assistance (ODA) loans and is targetted for construction next year through 2023. The project “involves the delivery of a modern, high priority bus system (HPBS) for Davao City,” the statement read.
Three projects of the Department of Public Works and Highways (DPWH) were also approved, namely the P14.97 billion Pasacao-Balatan Coastal Tourism Highway, the P23.04-billion SIDC project and the P9.23 billion Camarines Sur High-Speed Highway.
The Pasacao-Balatan Coastal Tourism Highway is earmarked for implementation next year until 2023 and is expected to be opened by 2024.
The project plans to construct a “four-lane coastal tourism highway along the west coast of Camarines Sur, with a total length of 40.69 kilometers,” as well as the construction of 13 bridges.
The SIDC project aims to construct a permanent road linking Davao City and the Island Garden City of Samal by 2025.
“The Project involves the construction of a toll-free four-lane [two-lane each direction] bridge with an approximate length of 2.80 kilometers, a width of 24.2 meters, and a vertical clearance of 45 meters that can serve around 25,000 vehicles a day,” it said.
Meanwhile, the Camarines Sur High-Speed Highway, a 15.21-kilometer four-lane highway, will provide an alternative route from Legazpi to Caramoan to Manila, and vice versa.
Lastly, Department of Health’s P15.53 billion Development Objective Assistance agreement for improved health for undeserved Filipinos was also approved and is expected to be completed by Sept. 30, 2024.
“The program will respond to the issues on logistics and pharmaceutical management, shortages of qualified health professionals in underserved areas, and inadequate public sector capacity in policy development, financing and private sector engagement. The following are the planned activities under the program: tuberculosis; family planning; and health systems strengthening,” NEDA said.
Also during the same meeting, the NEDA Board said that Investment Coordination Committe-Cabinet Committee approved to increase the cost and change the scope of Mindanao Railway Project: Tagum-Davao-Digos Segment to PhP81.69 billion.
“The NEDA Board also noted the earlier confirmation ad referendum of 20 projects from August 22 to October 9 this year. These include projects from DPWH (9), DoTr (3), Department of Finance (3), Philippine Competition Commission (1), Department of Agriculture (1), Landbank of the Philippines (1), National Irrigation Administration (1), and Metropolitan Waterworks and Sewerage System (1),” the statement read further.

Fruitas rises in stock market debut

By | Property News

By Denise A. Valdez, Reporter
SHARES in Fruitas Holdings, Inc. soared as much as 46% in their market debut on Friday, but closed only 1.79% higher amid overall negative market sentiment.
The food and beverage kiosk operator’s shares opened at P1.82 each, up 8% from its initial public offering (IPO) priceof P1.68 each. It reached as high as P2.45 before ending the day at P1.71 apiece.
Appetite for Fruitas’ IPO was strong. The company offered 533,660,000 primary common shares with an over-allotment option of up to 68,340,000 outstanding common shares, which it said was more than 2.5 times oversubscribed.
Fruitas’ market capitalization upon listing was P3.58 billion.
Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said despite the overall increase in its share price, Fruitas was not able to meet market expectations that were driven by its oversubscription during the IPO.
“Definitely not after reports (that it was almost) 3x oversubscribed. Anyway, a negative market sentiment will always influence the investors,” he said in a text message, referring to the decline of the main index on Friday.
The PSE index fell 29.70 points or 0.38% to close at 7,738.96 on Friday as investors reacted to US President Donald Trump’s signing of a pro-Hong Kong bill, once again raising worries on the country’s trade talks with China.
“It corrected when price could not surpass P2.45/share as local market was down,” Mr. Pangan added, referring to Fruitas shares.
Papa Securities Corp. Sales Associate Gabriel Jose F. Perez shared the same sentiment, saying in an email: “Fruitas had a disappointing IPO after it took back majority of its gains as it closed at P1.71 (from IPO price of P1.68) after reaching as high as P2.45 intraday.”
After the listing ceremony at the PSE Tower in Bonifacio Global City on Friday morning, Fruitas Chief Financial Adviser Calvin F. Chua bared the company’s aggressive expansion plans through 2022.
“We have set aside about P600 million in the next three years… The P600 million covers network expansion as well as store improvement and all the necessary logistics that we’ll need to actually deliver our products to our stores,” he said.
He added the capital expenditure will be supported by an estimate of “around P820 million” coming from net proceeds of around P1 billion from the IPO, and the rest from internally-generated cash.
Fruitas is targeting to open 150 to 250 stores every year in the next three years and to acquire foodservice businesses, introduce new concepts and diversify its distribution channels.
Proceeds from the IPO will also be used for debt repayment, commissary expansion and food park business expansion.
“Ang pangarap namin na ang bawat Pilipino ay tatangkilikin ang isa sa aming mga produkto araw-araw. Yang pangarap na yan… yan ang tatrabahuin namin [Our goal is for every Filipino to patronize at least one of our products every day. That goal… that’s what we’ll work for,” Fruitas President and Chief Executive Officer Lester C. Yu said at the briefing.
Fruitas is the fourth and last company to conduct its IPO in 2019, the others being Kepwealth Property Phils, Inc. in August and Axelum Resources Corp. and AllHome Corp. last month.

BSP: Inflation likely picks up in November

By | Property News

THE overall rise in prices of widely used goods likely quickened in November, the central bank said on Monday, citing higher electricity and fuel costs.
In a statement, the Bangko Sentral ng Pilipinas (BSP) Department of Economic Research pegged November inflation at between 0.9-1.7%.
The range is beyond the 0.8% print in October. However, it is slower than the 6% logged in November 2018.
“The increase in electricity rates as well as higher prices of gasoline, LPG (liquefied petroleum gas) and selected food items are seen as the primary sources of upward price pressures for the month,” the central bank said.
“Meanwhile, inflation could be tempered by lower domestic rice prices and the appreciation of the peso,” it added.
The BSP said will continue to watch evolving inflationary conditions “to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate”.
Year-to-date inflation is at 2.6%, well within the central bank’s 2-4% target range for 2019, but higher than the official 2.5% forecast full-year average.
The Philippine Statistics Authority (PSA) is set to report the official November inflation data on Tuesday, Dec. 3. — LWTN

Energy chief slams NGCP for refusing inspection of control center

By | Property News

By Victor V. Saulon, Sub-editor
ENERGY SECRETARY Alfonso G. Cusi on Friday issued a stronger statement against National Grid Corporation of the Philippines (NGCP), the operator of the country’s transmission system, and the privately owned company’s link to China and the foreign country’s alleged capability to remotely shut down the local power grid.
His statement comes after NGCP earlier this week dismissed talk that the State Grid Corporation of China (SGCC) could cripple the Philippines’ power transmission.
“I wouldn’t say it’s unfounded. It’s a concern that has been raised before. Potentially, I repeat potentially, they can do it (remotely shut down) considering its digital nature,” Mr. Cusi said in a text message to reporters.
“Unfortunately, NGCP has been uncooperative to open itself for an audit to once and for all answer the issue,” he added.
Mr. Cusi said NGCP had prevented and continues to deny state-led National Transmission Corp. (TransCo) from inspecting the power transmission’s control centers “and how they use the other infrastructure under their control.”
“It has always been our position that the Systems Operations should be recovered by the government for the reason that a private company or a private individual should not be given the control over the most critical infrastructure of the state — the transmission grid network — capable of transmitting power and digital data,” he said.
“Systems Operations comprises just about 6% of the whole transmission business. It is not critical to the business of NGCP. It should not have been included in the Concession Contract in the first place. However, it is critical for the existence of the State. It is critical too for making sure it aligns with the operations of WESM (Wholesale Electricity Spot Market),” he added.
Initially, the Energy chief said what he wants is a full independent audit with appropriate agencies of government properly represented. He added that he directed TransCo to write NGCP on the matter.
“After all, they already stated they are now willing to open their systems to the government,” he said.
TRANSCO LETTER
TransCo has written to NGCP President and Chief Executive Officer Anthony L. Almeda on Friday to propose a vulnerability assessment and penetration testing (VAPT) of the transmission network and system, including telecommunications, and its associated applications and software.
In his letter, TransCo President and Chief Executive Officer Melvin A. Matibag also criticized NGCP’s statement that it was an “open book” and was willing to be audited.
He invited the NGCP official to “a meeting at your most convenient time” to discuss national security protocols.
“Moreover, to remove fear of the public as to issue of national security, we also propose representations from the Department of National Defense (DND) and the Department of Information and Communications Technology (DICT). Corollary to the conduct of the VAPT is the conduct of physical inventory of all transmission projects,” Mr. Matibag said.
NGCP did not immediately respond when asked to comment on Mr. Cusi’s statement and Mr. Matibag’s letter.
The company on Wednesday said SGCC has a 40% stake in NGCP, but the controlling 60% belongs to Filipino companies Monte Oro Grid Resources Corp. and Calaca High Power Corp. with 30% shares each.
As such, SGCC has only three nominees who sit as members of the NGCP board of directors, representing the company and proportionate to its capital shares, it added.
“SGCC serves only as the technical adviser of the consortium, but the management and the control of NGCP, including its Systems Operation, are exclusively exercised by Filipinos,” Mr. Almeda said.
He added that Mr. Cusi had inspected the NGCP facilities in August 2017, and that the company had not entered into other businesses, other than those permitted under its concession agreement.
Telecommunication companies use NGCP facilities through co-location agreements, the company said. These deals allow a third-party to “piggy-back” on its right-of-way or existing facilities except tapping into or using the transmission service provider’s fiber optic cables, it said.