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BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

OFWs IN UK: NO DENT IN REMITTANCES OVER BREXIT, SAYS HSBC
[RELATED: World Bank president expresses concern over Brexit]


JUNE 28 -“You have to take everything into consideration and with that, in terms of impact, you might just even see a very small or none at all,” said Harold van der Linde, equity head for Asia-Pacific at Hong Kong and Shanghai Banking Corp. (HSBC).
The historic exit of the UK from the European Union (EU) may have little to no effect on the flow of overseas Filipino remittances, an investment bank said yesterday. “You have to take everything into consideration and with that, in terms of impact, you might just even see a very small or none at all,” said Harold van der Linde, equity head for Asia-Pacific at Hong Kong and Shanghai Banking Corp. (HSBC). If there is any, however, remittances may be affected through less Filipinos finding jobs in the UK, thus losing capacity to send more money to their families back home. However, there may be a “counterbalancing effect” coming from a stronger US dollar, Hong Kong-based van der Linde told reporters in a briefing in Makati City. According to central bank data, cash remittances from the UK accounted for 5.4 percent of total money sent home by Filipinos abroad as of April. Specifically, $466.74 million of the $8.67 billion total remittances came from the UK. Inflows are denominated in dollars, which HSBC forecast will get stronger after Brexit. READ MORE...RELATED, World Bank president expresses concern over Brexit...

ALSO: Tax reform, Real Estate InvestTrust review in first six months - DOF
[RELATED: BIR's new chief nixes Henares's orders on his first day]


JULY 1 -Finance Secretary Carlos Dominguez III (L) says he will submit tax reform measures to Congress by September. Christopher Bong Go/Facebook, File photo
A tax reform package and possible lower public float and tax for real estate listing are targeted within six months by new economic team chief, Finance Secretary Carlos Dominguez III. "We don't measure this administration within 100 days. In the case of the president, he wants to lower the crime rate in three to six months so why would I have a different time table?" he told reporters on Friday. Dominguez, 71, officially took the reins of the Department of Finance (DOF) from Cesar Purisima at a turnover ceremony. Topping his priorities is a "package" of tax reform measures which he intends to submit to Congress for action by September. Under it, there would be lower personal and corporate income tax rates, adjustments of income brackets, indexation to inflation and a review of value-added tax (VAT) exemptions. The Aquino government has rejected proposals to lower income taxes, one of the highest in Southeast Asia, saying it could erode revenues and affect the country's credit ratings. Dominguez, in his speech watched by Purisima, criticized this anew. "A major reason why our people decided to vote out the old and vote in a new administration is that certain sense that government has lost touch with its citizens," he said. "We save and refuse to spend to shore up our credit ratings, long after it has become unnecessary to do so," he added. Aside from tax reform, a review of the Real Estate Investment Trust (REIT) will also be undertaken with the end in view of reviving the dormant capital market exercise. READ MORE... RELATED, BIR's new chief nixes Henares's orders on his first day...

ALSO: Emergency powers for Duterte will solve clash of laws on traffic
[RELATED: Drilon bill to give Duterte emergency powers to fix traffic]


JUNE 27 -Edsa Kamuning ( MB FILE- John Jerome Ganzon) The eyed emergency powers to incoming President Rodrigo Duterte is one possible solution to the “clash of laws” concerning traffic in the metropolis, the Metropolitan Manila Development Authority (MMDA) chief said. MMDA Chairman Emerson Carlos said that giving emergency powers to President Duterte would open the way for rationalization of the different traffic laws implemented by the agency and 17 metro local government units (LGUs) in their respective localities. Carlos cited the clearing of Mabuhay lanes as an example. While the agency is relentless in clearing illegally parked vehicles on identified alternate routes, some LGUs would say they are enforcing a separate parking rule, Carlos said. “Some parked vehicles are allowed by a city ordinance to park for a fee. So clash happens between MMDA men and LGU personnel,” said Carlos, who is set to vacate the MMDA post on June 30. According to Carlos, there should be one policy that should be adopted by all concerned, especially barangay leaders. “Removing the obstacles in traffic problems should be a Metro-wide effort of all leaders,” said Carlos. Up to now, Duterte has not appointed anyone for the MMDA post, several days before he take his oath of office. READ MORE...RELATED, Drilon bill to give Duterte emergency powers to fix traffic...

ALSO: Duterte to Cabinet - Ease transactions with gov't, honor existing contracts
[RELATED: Neda’s Pernia seeks more growth for poor regions]
[RELATED(2): Diokno back at DBM - Old spending habits must go]


JUNE 30 -President Rodrigo Duterte strictly ordered his Cabinet members to remove redundant requirements and refrain from revising and bending the rules of the government contracts. Malacañang Photo Bureau/Released MANILA, Philippines – After being sworn in as the country's 16th president, Rodrigo Duterte on Thursday ordered his Cabinet to make it easier for the public to deal with government by easing requirements and by being firm with honoring contracts. In his inaugural speech, Duterte strictly ordered his Cabinet members to remove redundant requirements and refrain from changing and bending the rules of the government contracts. “I direct all department secretaries and the heads of agencies to reduce requirements and the processing time of all applications from the submission to release. I order all department secretaries and heads of agencies to remove redundant requirements and compliance with one department or agency shall be accepted as sufficient for all,” Duterte said in his speech delivered at Malacañang's Rizal Hall. “I order all department secretaries and heads of agencies to refrain from changing and bending the rules of government contracts transactions and projects already approved and awaiting implementation,” he added. READ MORE..RELATED, Neda’s Pernia seeks more growth for poor regions... RELATED(2) Diokno back at DBM: Old spending habits must go...

ALSO: 'CHANGING OF RULES WRONG’ - DU30 DECLARES WAR ON RED TAPE[RELATED: PLDT, Globe welcome Duterte’s move to cut red tape]


JULY 1 -President Duterte’s first marching order, which is to ease doing business in the country, was hailed by the business sector as a strong message that he means business and would encourage investments into the country.
Baring his economic policies in general terms, Duterte in his inaugural speech told the audience to read between the lines as specifics will be supplied in due time.
But he said there are certain policies and specifics “which cannot help wait for tomorrow.”  “I direct all department secretaries and the heads of agencies to reduce requirements and processing time of all applications from submission to release. I order all department secretaries and heads of agencies to remove redundant requirements and compliance with one agency shall be accepted as sufficient for all,” Duterte said. He went on to order all department secretaries and heads of agencies to refrain from changing and bending the rules of government contracts, transactions and projects already approved and awaiting implementation. “Changing the rules when the game is ongoing is wrong. I abhor secrecy and instead advocate transparency in all government contracts, projects and business transactions from submission of proposals to negotiation to perfection and finally, to consummation,” he added. “Do them and we will work together; do not do them we will part sooner than later,” Duterte said in a stern warning to his Cabinet who would refuse to cooperate. Sergio Ortiz-Luis, president of the Philippine Exporters Confederation Inc., said by making his first orders to his Cabinet to cut red tape and to respect the sanctity of contracts show that Duterte’s pronouncements during the campaign and during the business forum sponsored by the business community were no idle words. READ MORE...RELATED, PLDT, Globe welcome Duterte’s move to cut red tape...

ALSO: By Babe Romualdez - MMDA ‘new rules’ will lead to hell, not heaven [ALSO: Avoiding a power supply crisis by Boo Chanco]


JUNE 28 -By Babe G. Romualdez No doubt about it, traffic is now one of the most serious challenges to be faced by the administration of president-elect Rodrigo Duterte, so much so that various business groups are ready to support proposals to grant emergency powers to the incoming president. Even before his now viral interview with blogger Mocha Uson, Duterte already said there is no silver bullet to solve the traffic mess in Metro Manila, with commuters and drivers spending four to six hours travelling to work and going back home, and estimates placing economic losses at P3 billion per day due to traffic.
As a matter of fact, text messages are being passed around about the “new” traffic rules MMDA will supposedly start enforcing by July 1 – and these include the implementation of an odd-even scheme (instead of number coding) with no window hours for exception; opening up of subdivision gates at certain hours (presumably during rush hours); enforcement of the “no car, no garage” policy; banning of provincial buses from EDSA; denial of registration for vehicles that are more than 15 years old; turning of unused big vacant lots into pay parking areas by LGUs; relocating bus stops 100 meters away from malls and train terminals; confiscation and cancellation of LTO registration for colorum and out-of-line vehicles; and prohibition of parking along sidewalks by patrons of commercial establishments (like restos in Timog and Maginhawa in Quezon City); and others. A lot of the above are actually still proposals and recommendations, but talk about giving emergency powers to the incoming president to solve the traffic problem has revived them – and these are sure to meet resistance among affected Filipinos. For instance, opening up subdivision gates is driving fears that security within private enclaves could become compromised. The same goes for the “no garage, no car” policy, with critics saying this curtails an individual’s right to obtain property. Owners of cars older than 15 years also disagree with the prohibition, saying old vehicles that are well maintained will not cause obstruction. They also point to an earlier administrative order issued by the MMDA that limits the use of vintage vehicles (those with year models earlier than 1975) to weekends and holidays only. After meeting strong objection from vintage car owners who said the AO is a violation of people’s constitutional right to own and enjoy property, the MMDA rescinded the order. READ MORE...ALSO: Avoiding a power supply crisis by Boo Chanco...


READ FULL MEDIA REPORTS HERE:

No dent in remittances over Brexit, says HSBC


“You have to take everything into consideration and with that, in terms of impact, you might just even see a very small or none at all,” said Harold van der Linde, equity head for Asia-Pacific at Hong Kong and Shanghai Banking Corp. (HSBC).

MANILA, JULY 4, 2016 (PHILSTAR) By Prinz Magtulis  June 28, 2016 - 12:00am - The historic exit of the UK from the European Union (EU) may have little to no effect on the flow of overseas Filipino remittances, an investment bank said yesterday.

“You have to take everything into consideration and with that, in terms of impact, you might just even see a very small or none at all,” said Harold van der Linde, equity head for Asia-Pacific at Hong Kong and Shanghai Banking Corp. (HSBC).

If there is any, however, remittances may be affected through less Filipinos finding jobs in the UK, thus losing capacity to send more money to their families back home.

However, there may be a “counterbalancing effect” coming from a stronger US dollar, Hong Kong-based van der Linde told reporters in a briefing in Makati City.

According to central bank data, cash remittances from the UK accounted for 5.4 percent of total money sent home by Filipinos abroad as of April.

Specifically, $466.74 million of the $8.67 billion total remittances came from the UK. Inflows are denominated in dollars, which HSBC forecast will get stronger after Brexit.

READ MORE...

He added lower UK remittances may be offset by those coming from other territories, recalling the same thing happened when Middle East inflows were affected by oil price drop.

The Bangko Sentral ng Pilipinas forecast remittances, tagged as a primary economic driver that boosts consumption, to rise four percent this year. They are up 3.1 percent as for the first four months.

“Risk aversion will continue and as a result flight to quality will persist,” van der Linde said, adding the greenback, dollar, Japanese yen and Swiss franc may perform well.

Other inflows are seen to perform also well despite Brexit.

For equities, Cheuk Wan Fan, Asia investment strategy head, said HSBC “overweight” in the Philippines, Singapore, Indonesia and China.

That is a better positioning from the bank’s “neutral” stance for the entire emerging Asia.

“We still like Asia. We believe Asia will stay relatively resilient and will withstand the turmoil with cushion in terms of market drawdown,” Cheuk said.

“We believe the three domestically driven economies (Philippines, Indonesia, China) will withstand external headwinds,” she said.

Van der Linde agreed, saying the Philippines, in particular, has a current account surplus that shields it from capital outflows. He however warned against risk aversion.

They both declined to provide specific forecasts for the peso and stock market performance.

“In general, what you will see in the near-term is risk aversion and it will affect anyone,” he said.

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RELATED FROM PHILSTAR

World Bank president expresses concern over Brexit By Ashok Sharma (Associated Press) | Updated July 1, 2016 - 12:00am googleplus


World Bank President Jim Yong Kim

NEW DELHI — The World Bank president said Thursday that India had shown resilience in the situation created by Britain's decision to exit from the European Union, but it will be affected "if there were more events creating more uncertainty."

Jim Yong Kim told reporters that the British decision has caused a shortage of capital for developing nations like India and money was flowing into safe havens like gold and U.S. treasury bills.

Urging countries to embrace multilateralism and multilateral institutions, he said he was a very strong believer in multilateralism, and the European Union was one of the greatest examples of an attempt to achieve that.

"That's my very strong belief as president of the World Bank Group. And so what I hope, is that the European Union will come out of this stronger," he said.

On a visit to India, he met with Prime Minister Narendra Modi and signed an agreement with the Indian-led International Solar Alliance to boost solar energy in developing countries by mobilizing $1 trillion in investments by 2030.

A statement by the group said the agreement established the World Bank as a financial partner of the alliance. The agreement was signed by Kim and Indian Power Minister Piyush Goyal.

The alliance was launched by India and France at the U.N. Climate Change Conference in Paris last November and includes about 120 countries that support the promotion of solar energy.

As part of the agreement, the World Bank will work with other multilateral development banks and financial institutions to develop financing for solar energy development, the World Bank said.

In addition, it plans to provide more than $1 billion to support India's initiatives to expand solar power generation through projects including solar rooftop technology, infrastructure for solar parks and transmission lines for solar-rich states, it said.

"India's plans to virtually triple the share of renewable energy by 2030 will both transform the country's energy supply and have far-reaching global implications in the fight against climate change," Kim said in a statement.

Also Thursday, the World Bank and the Indian government signed an agreement for a $625 million loan to finance the installation of at least 400 MW of solar panels that will help reduce greenhouse gas emissions by displacing thermal generation.


PHILSTAR

Tax reform, REIT review in first six months - DOF By Prinz Magtulis (philstar.com) | Updated July 1, 2016 - 4:34pm googleplus


Finance Secretary Carlos Dominguez III (L) says he will submit tax reform measures to Congress by September. Christopher Bong Go/Facebook, File photo

MANILA, Philippines — A tax reform package and possible lower public float and tax for real estate listing are targeted within six months by new economic team chief, Finance Secretary Carlos Dominguez III.

"We don't measure this administration within 100 days. In the case of the president, he wants to lower the crime rate in three to six months so why would I have a different time table?" he told reporters on Friday.

Dominguez, 71, officially took the reins of the Department of Finance (DOF) from Cesar Purisima at a turnover ceremony.

Topping his priorities is a "package" of tax reform measures which he intends to submit to Congress for action by September.

Under it, there would be lower personal and corporate income tax rates, adjustments of income brackets, indexation to inflation and a review of value-added tax (VAT) exemptions.

The Aquino government has rejected proposals to lower income taxes, one of the highest in Southeast Asia, saying it could erode revenues and affect the country's credit ratings.

Dominguez, in his speech watched by Purisima, criticized this anew. "A major reason why our people decided to vote out the old and vote in a new administration is that certain sense that government has lost touch with its citizens," he said.

"We save and refuse to spend to shore up our credit ratings, long after it has become unnecessary to do so," he added.

Aside from tax reform, a review of the Real Estate Investment Trust (REIT) will also be undertaken with the end in view of reviving the dormant capital market exercise.

READ MORE...

Enacted in 2009, Republic Act 9856 or the REIT law encourages investors to invest in property projects like condominiums and hotels, instead of companies, and earn from their sustained revenue stream.

Firms, however, have neglected REIT after DOF raised the public ownership requirement to 51 percent from 33 percent, and levied a number of taxes on its earnings.

"There has been some discussions about the IRR basically being written in such a way that it really discourages the REIT. Issues of equity, we will certainly look at that very closely," Dominguez said.

Securities and Exchange Commission chair Teresita Herbosa said she already had orders from Dominguez on public float, but that the Bureau of Internal Revenue (BIR) should take care of the tax treatment.

"We will probably keep it at the minimum as provided in the law. At least 40 percent," Herbosa said in a separate interview.

"I hope that if we review the minimum float required, relatedly, we will also review the tax treatment so then the prospective REIT issues will not have any excuse," she added.

Sought for comment, BIR commissioner Cesar Dulay said he will review REIT tax rules.

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RELATED FROM PHILSTAR

BIR's new chief nixes Henares's orders on his first day By Prinz Magtulis (philstar.com) | Updated July 1, 2016 - 6:50pm googleplus


Bureau of Internal Revenue Commissioner Cesar Dulay issues a memorandum order revoking two circulars issued by Kim Henares. File photo

MANILA, Philippines — The new commissioner of the Bureau of Internal Revenue (BIR) just gave taxpayers his welcome gifts.

True to his pronouncements, BIR chief Cesar Dulay suspended all tax probes, revoked two of his predecessor's orders and restricted implementation of others issued last month on his first day.

"I just signed today three orders," Dulay told The STAR in a phone interview. The orders will not take effect until published.

Under Revenue Memorandum Order (RMO) 38-2016, the tax chief said he revoked two circulars issued by Kim Henares laying out tax investigation rules against property buyers and sellers.

RELATED: A month before stepping down, Henares runs after property buyers, sellers

Issued June 7 and 13, respectively, RMO 24-2016 and 25-2016 stated that real estate purchasers and sellers might get investigated if they could not prove financial capacity for owning their assets.

"I am recalling those orders as what I stated during our conference in Davao," Dulay said, pertaining to the workshop with the business community last June 20.

Industry group Tax Management Association of the Philippines (TMAP), which opposed the rules, welcomed the news. "Is it Christmas today?" said TMAP President Benedict Tugonon.

Dulay also signed Revenue Memorandum Circular (RMC) 69-2016 that suspends all Henares's orders from June 1 to 30, a transition period as argued by TMAP.

"These are preventive reviews after listening to the players. Initially, only those in June will be covered, but I may consider others," the tax chief said.

He also issued RMC 70-2016 that suspended all letters of authority (LOA) and instructing all revenue offices to provide him an inventory of these orders by July 16.


Henares (left) and Dulay

BIR gives LOA to taxpayers under investigation or audit.

"I will review them and will clear the valid ones, one by one," Dulay said.

Tugonon said he is "very happy" with Dulay's "quick action" on their concerns. TMAP and Dulay met on the sidelines of the conference in Davao City.

In particular, TMAP blasted Henares for issuing rules weeks before she stepped down last Thursday. The former BIR chief justified this saying she was merely doing her job.

"This is what we have been asking and advocating for. These rules and regulations are not consistent with the law which could tax compliance very difficult," Tugonon said in a phone interview.

"These are conflicting interpretations of rules," he said, pertaining to RMO 24- 25-2016.

Dulay said he will meet with TMAP soon to hear their concerns. Tugonon said TMAP will submit a list of other orders it wants to get repealed.


MANILA BULLETIN

Emergency powers for Duterte expected to solve clash of laws on traffic by Anna Liza Vilas-Alavaren June 27, 2016 Share281 Tweet1 Share2 Email0 Share334


Edsa Kamuning ( MB FILE- John Jerome Ganzon)

The eyed emergency powers to incoming President Rodrigo Duterte is one possible solution to the “clash of laws” concerning traffic in the metropolis, the Metropolitan Manila Development Authority (MMDA) chief said.

MMDA Chairman Emerson Carlos said that giving emergency powers to President Duterte would open the way for rationalization of the different traffic laws implemented by the agency and 17 metro local government units (LGUs) in their respective localities.

Carlos cited the clearing of Mabuhay lanes as an example. While the agency is relentless in clearing illegally parked vehicles on identified alternate routes, some LGUs would say they are enforcing a separate parking rule, Carlos said.

“Some parked vehicles are allowed by a city ordinance to park for a fee. So clash happens between MMDA men and LGU personnel,” said Carlos, who is set to vacate the MMDA post on June 30.

According to Carlos, there should be one policy that should be adopted by all concerned, especially barangay leaders.

“Removing the obstacles in traffic problems should be a Metro-wide effort of all leaders,” said Carlos.

Up to now, Duterte has not appointed anyone for the MMDA post, several days before he take his oath of office.


Jim Paredes on Tweeter


 by in Politics -Chito Di has recently started a petition in Change.org to make award-winning broadcaster Ted Failon as MMDA Chairman under the Duterte administration.

Here is Chito Di’s petition:

"Mayor Rodrigo Duterte says he wants to appoint the best and the brightest in his administration. Ted Failon is the best and the brightest critic of the government for its inefficiency in handling the problems of Metro Manila. Let him put his money where his mouth is and request Mayor Duterte to appoint him as MMDA Chairman and let us see if his solutions will really solve the problems of the Metropolis.

This petition will be delivered to: President of the Philippines RODRIGO DUTERTE"

4,643 people have already signed to this petition. 357 more to go to reach the required 5,000 signatures to reach the office of President-elect Duterte.

If you want to sign the petition, hop into this page.

-------------------------------

RELATED FROM GMA NEWS NETWORK

Drilon bill to give Duterte emergency powers to fix traffic Published July 1, 2016 1:52pm

Senate President Franklin Drilon on Friday filed a bill seeking to grant President Rodrigo Duterte emergency powers to address the perennial traffic problem not only in Metro Manila but also in other major urban areas as well.

Under Senate Bill 11 or the proposed Transportation Crisis Act of 2016, the President will be authorized to adopt alternative methods of procurement for the construction repair, rehabilitation, improvement or maintenance of transportation projects aimed at the reduction of traffic congestion in Metro Manila and other urban areas.

These include limited source bidding or selective bidding, direct contracting or single source procurement, repeat order, shopping, and negotiated procurement.

“In all instances, the President shall ensure that the most advantageous price for the government is obtained and that the procedure is undertaken in a transparent manner,” the bill states.

No TROs

It added that no court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government or any of its officials or any person or entity acting under the government direction to restrain, prohibit, or compel in the acquisition, clearance, and development of the right of way; and bidding or awarding of any transportation project identified by the President, among others.

It also states that the Metropolitan Manila Development Authority and Department of Transportation (DOT) shall be the urban traffic management authority in the National Capital Region and other urban areas. The two agencies will also absorb some functions currently being performed by the Land Transportation Franchising and Regulatory Board, Land Transportation Office and Local Government Units.

The bill will likewise allow the President to reorganize the DOT and its attached agencies, LTFRB and LTO, and the MMDA.

The bill, which will be valid for two years after its effectivity, sought to get the necessary funds from the proceeds from the Motor Vehicle User’s Charge Fund, the Philippine Amusement and Gaming Corporation and current budget of the agencies involved.

A necessity

Drilon said the emergency power will capacitate Duterte in addressing the horrendous traffic situation within and outside Metro Manila.

“The emergency power is already a ‘necessity’ given the magnitude of the transportation crisis that not only impedes the mobility of people, goods and services, but also threatens the livability of our cities,” he said in a press statement.

Drilon said he believes poor traffic management woes are mainly due to the poor enforcement of traffic rules and the overlapping functions of government institutions like Department of Transportation and its attached agencies.

He said that traffic congestion resulted in an estimated productivity loss of around P2.4 billion a day ($54 million), more than P800 billion ($18 billion) a year.

“If the traffic congestion continues to be unabated, the traffic cost is expected to increase to P6 billion a day,” Drilon said, citing a study conducted by the Japan International Cooperation Agency in 2014.

He said that aside from the cities in Metro Manila, various urban areas such as Metro Cebu and Cagayan De Oro are also experiencing horrible traffic congestions, hampering growth and development. —Amita Legaspi/KBK, GMA News


PHILSTAR

Duterte to Cabinet: Ease transactions with gov't, honor existing contracts By Rosette Adel (philstar.com) | Updated June 30, 2016 - 2:42pm 2 24 googleplus0 0


President Rodrigo Duterte strictly ordered his Cabinet members to remove redundant requirements and refrain from revising and bending the rules of the government contracts. Malacañang Photo Bureau/Released

MANILA, Philippines – After being sworn in as the country's 16th president, Rodrigo Duterte on Thursday ordered his Cabinet to make it easier for the public to deal with government by easing requirements and by being firm with honoring contracts.

In his inaugural speech, Duterte strictly ordered his Cabinet members to remove redundant requirements and refrain from changing and bending the rules of the government contracts.

“I direct all department secretaries and the heads of agencies to reduce requirements and the processing time of all applications from the submission to release. I order all department secretaries and heads of agencies to remove redundant requirements and compliance with one department or agency shall be accepted as sufficient for all,” Duterte said in his speech delivered at Malacañang's Rizal Hall.

“I order all department secretaries and heads of agencies to refrain from changing and bending the rules of government contracts transactions and projects already approved and awaiting implementation,” he added.

READ MORE...

During his previous press conferences and speeches, Duterte repeatedly said he hates seeing the public complain over queuing. He earlier vowed to end this long queues and extortion to obtain government permits and documents.

“Changing the rules when the game is ongoing is wrong. I abhor secrecy and instead advocate transparency in all government contracts projects and business transactions from submission of proposals to negotiation to perfection and finally to consummation,” Duterte said.

“Do them and we will work together, do not do them and we will part sooner than later,” he added.

---------------------------

RELATED FROM PHILSTAR

Neda’s Pernia seeks more growth for poor regions SHARES: 132 VIEW COMMENTS By: Ben O. de Vera @BenArnolddeVera Philippine Daily Inquirer 01:27 AM July 3rd, 2016


Ernesto Pernia. INQUIRER FILE PHOTO Ernesto M. Pernia. INQUIRER FILE PHOTO

With some 25 percent of Filipinos living in poverty, the biggest challenge for Socioeconomic Planning Secretary Ernesto “Ernie” M. Pernia is to significantly slash this figure to just 16 percent of the population by the end of President Duterte’s term in 2022.

In recent interviews, Pernia, 73, emphasized the need to distribute economic growth to benefit the countryside—not surprising given his extensive background and specialization in development economics.

The soft-spoken professor emeritus of economics at the University of the Philippines Diliman also counts demographic economics as well as human resource economics among his fields of interest. This might explain his advocacy of the reproductive health law to slow down population growth and allow better redistribution of resources among families.

Consumption-driven

At the recent “Sulong Pilipinas: Hakbang Tungo sa Kaunlaran” consultative workshop held in Davao City between business leaders and President Duterte’s economic managers, the director general of the National Economic and Development Authority (Neda), cited the need to shift from a consumption-driven economy to an investment and export-driven one to achieve growth. At present, consumer spending accounts for about two-thirds of the economy.

The agriculture and manufacturing sectors should be supported as well to create more jobs even for the less-skilled members of the labor force, Pernia said, while the share of services in the economic output may have to be reduced even as it is now a huge contributor to economic growth.

The Duterte administration also wants “to make overseas employment an option, not a necessity,” the Neda chief added.

“We will try to generate more jobs here so the desire to go abroad will be lessened,” Pernia said.

Pernia earlier told the Inquirer that the Duterte administration will prioritize poverty reduction, regional and rural development as well as quality education and healthcare.

Cutting red tape

He also noted several steps that the government will undertake to bring about a “much-improved” investment climate, among them cutting red tape, easing constitutional restrictions on foreign direct investment and putting in place a competitive tax system. Along with better infrastructure and an improved law and order situation, these initiatives are expected to bring in more investments that will create more jobs and ultimately reduce poverty.

The Davao consultative meet with business leaders also spelled out Mr. Duterte’s 10-point socioeconomic agenda, which includes the continuation of current macroeconomic policies, among them fiscal, monetary and trade policies, and increasing annual infrastructure spending to account for 5 percent of gross domestic product, with public-private partnerships playing a key role.

Mr. Duterte’s socioeconomic agenda also focuses on ensuring security of land tenure to encourage investments; investing in human capital development, including health and education systems; promoting science, technology and the creative arts to enhance innovation; improving social protection programs, among them the conditional cash transfer program to protect the poor against instability and economic shocks, and strengthening the implementation of the responsible parenthood and reproductive health law to enable couples to make informed choices on financial and family planning.

Metro Manila dominance

“Speedy and efficient action on the [proposed socioeconomic agenda] will result in significant poverty- and inequality-reducing economic growth,” Pernia said in May when his appointment was announced.

In his most recent output at the UP School of Economics, a discussion paper titled “Do Regions Gain from an Open Economy?” that he penned with then Ph.D. candidate Janine Elora M. Lazatin, the Neda chief noted “the dominance of Metropolitan Manila in the national economic landscape, albeit spread effects into adjacent regions are increasingly apparent.”

The paper noted that “regional gains appear to be uneven with regions (seen to be) lagging at a disadvantage; by extension, the welfare effect on the poor appears unequal, as well.”

Given such realities, Pernia would have to translate his long years of academic and research experience into actually reducing poverty, unemployment and underemployment while sustaining robust economic growth.

Philosophy degree

Pernia obtained his Ph.D. in economic demography from the University of California, Berkeley, in 1976, and his MA in economics from the University of Bridgeport, Connecticut, in 1969.

He obtained his economics degree from the University of San Carlos in 1967 and graduated with a bachelor’s degree in philosophy, magna cum laude, from San Carlos Major Seminary in Cebu in 1963.

He was also cum laude when he took his bachelor’s degree in theology from the University of Santo Tomas Central Seminary.

According to Pernia’s curriculum vitae posted on the UP School of Economics website, he also worked as economist and researcher at the Manila-based multilateral lender Asian Development Bank, the International Labor Organization’s regional office in Bangkok, Thailand, and the East-West Center in Honolulu, Hawaii.

Pernia also authored or took part in the publication of at least 10 books and monographs, 35 journal articles and reference papers, as well as discussion papers and articles on a wide range of topics, including development planning, population and urbanization. TVJ

RELATED STORIES

Tax reform, aggressive housing program pushed

Pernia expects GDP growth to reach 6.5% in 2016

------------------------------

RELATED(2) FROM PHILSTAR

Diokno back at DBM: Old spending habits must go SHARES: 886 VIEW COMMENTS By: Ben O. de Vera @BenArnolddeVera Inquirer Business 01:16 AM July 3rd, 2016


Ben-Diokno Department of Budget and Management Secretary Benjamin E. Diokno. SCREENGRAB FROM THE UNIVERSITY OF THE PHILIPPINES SCHOOL OF ECONOMICS WEBSITE

New Department of Budget and Management (DBM) Secretary Benjamin E. Diokno, 68, plans to reprise his role as a keen guardian of the government’s purse, vowing to correct past spending habits as he heads the agency that formulates and releases the annual budget under the Duterte administration.

Diokno headed the budget department during the Estrada administration, but stepped down in 2001 when then Vice President Gloria Macapagal-Arroyo took power. He then taught economics at the state-run University of the Philippines, where he was also a sought-after academic commenting on public finances.

At a recent workshop for businessmen and economic managers in Davao City, Diokno told reporters that the government planned to review the proposed 2017 national budget, even as he stressed there would be no reenacted budget in the next six years.

P3.5-trillion budget for next year

“We have enough time to review the budget to make sure that the 2017 budget is President Duterte’s budget,” Diokno had said. The administration of former President Benigno Aquino III has already started to formulate the proposed P3.5-trillion budget for next year.

Diokno said the annual budget of the Duterte administration would prioritize higher public expenditures on vital infrastructure, equivalent to 5-7 percent of the gross domestic product.

“The Duterte administration will not spend money for spending’s sake. The economy is deficient in all types of infrastructure—highways and bridges, ports and airports,” Diokno said.

And in a recent e-mail to the Inquirer, he vowed to end underspending on public goods and services, which tempered the country’s growth potentials in the past two to three years.

“First of all, I will put a lot of effort in budget preparation. I know that underspending is partly due to poor budget preparation. Many programs and projects are included in the annual budget, yet they are not ready to implement. Some departments ask for a budget that they are unable to implement: they bite more than what they can chew,” Diokno said.

Noting that underspending is due to the “ineptness or incompetence” of some department chiefs, Diokno said he would ask secretaries and undersecretaries to undergo retraining, while a program to boost project monitoring would also be strengthened.

He said he would also do away with the practice of allowing fiscal planners to “play around with the slacks in the budget” to finance projects not authorized by Congress, in a controversial practice by the past administration that became known as the Disbursement Acceleration Program, or DAP. The Supreme Court in 2014 ruled DAP was unconstitutional.

SC DECISION ON DAP

“This practice has to stop. President Duterte’s 2017 to 2022 budgets will be compliant with the Supreme Court decision on the DAP,” Diokno said.

Moving forward, he said the annual budgets to be proposed by the Duterte administration would prioritize the following: higher infrastructure spending of 5-7 percent of the GDP; investment in human resources (education, healthcare and nutrition) in order to develop a dynamic and nimble work force; agriculture modernization and rural development in order to make growth inclusive; raising rural incomes; and making food available and affordable.

Diokno, however, said the new administration would follow the Aquino government’s move in adopting the General Appropriations Act (GAA) as release document. The DBM adopted the GAA as a release document in 2014, scrapping the special allotment release order system.

“This is not novel. I did this 16 years ago when I adopted the ‘what-you-see-is-what-you-get’ budget execution system. However, this was forgotten by [former President Gloria] Arroyo during her entire term and [President] Aquino during his first [few] years in office,” Diokno said.

AQUINO 'BUB' SCHEME

Diokno also said that on his watch, the DBM will “revisit” the bottom-up budgeting (BUB) scheme, another program introduced by the Aquino administration that allows local governments as well as civil society and community groups to pitch the priority poverty-reduction projects to be bankrolled by the annual national budget.

Also, the Duterte administration “will revisit the CCT [conditional cash transfer] program with the intention of minimizing the leakages (giving benefits to those undeserving and not giving benefits to the deserving) and minimizing the administrative costs,” Diokno said, referring to the Pantawid Pamilyang Pilipino Program or “4Ps.”

“We will adopt economic measures so that a bigger part of the budget will be used for projects that will truly benefit the Filipino people,” he said.

During his first tenure as budget chief, Diokno initiated reforms that included strengthening of the public expenditure management system. He also imposed a moratorium on the creation of new state universities and colleges, and pushed for the abolition of several agencies.

And to improve strategic budget planning, he initiated a joint public-private sector consultative group called the Budget Dialogue Group.

Among his specializations is public economics focusing on governance, tax reform and policies, expenditure analysis. He has also given policy advise on transitional economies in Southeast Asia. In resource management, he specialized on public policy concerning oil and water resources.

He served as budget undersecretary to President Corazon Aquino until March 1991, during which he was involved in the creation of the 1986 Tax Reform Program that significantly improved collection. He was also involved in drafting the Local Government Code of 1991.

Diokno obtained a public administration degree from the University of the Philippines in 1968. But he is a holder of five postgraduate degrees, including a Ph.D. in economics from Syracuse University’s School of Citizenship and Public Affairs, and a master’s degree in political economy from Johns Hopkins University.


MALAYA

'CHANGING OF RULES WRONG’ : DUTERTE DECLARES WAR ON RED TAPE By Irma Isip July 01, 2016


President Duterte’s first marching order, which is to ease doing business in the country, was hailed by the business sector as a strong message that he means business and would encourage investments into the country.

Baring his economic policies in general terms, Duterte in his inaugural speech told the audience to read between the lines as specifics will be supplied in due time.

But he said there are certain policies and specifics “which cannot help wait for tomorrow.”

“I direct all department secretaries and the heads of agencies to reduce requirements and processing time of all applications from submission to release. I order all department secretaries and heads of agencies to remove redundant requirements and compliance with one agency shall be accepted as sufficient for all,” Duterte said.

He went on to order all department secretaries and heads of agencies to refrain from changing and bending the rules of government contracts, transactions and projects already approved and awaiting implementation.

“Changing the rules when the game is ongoing is wrong. I abhor secrecy and instead advocate transparency in all government contracts, projects and business transactions from submission of proposals to negotiation to perfection and finally, to consummation,” he added.

“Do them and we will work together; do not do them we will part sooner than later,” Duterte said in a stern warning to his Cabinet who would refuse to cooperate.

Sergio Ortiz-Luis, president of the Philippine Exporters Confederation Inc., said by making his first orders to his Cabinet to cut red tape and to respect the sanctity of contracts show that Duterte’s pronouncements during the campaign and during the business forum sponsored by the business community were no idle words.

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This pronouncement, Ortiz-Luis said, “will be the foundation of a stable relationship with business and foreign investors. It’s very reassuring and will put to rest whatever doubts they have.”

Edgardo Lacson, president of the Employers Confederation of the Philippines, said Duterte’s pronouncement is a most welcome message from government to business.

“The Duterte government has started on the right footing as it issued a strong support to its partner, the business sector, in the economic development of the country,” Lacson said.

Duterte’s message, he added, will finally remove the decades-long single obstacle to investments which has stunted the growth of business and employment.

Lacson however noted that easing doing business must fully address the opening, transferring of office or factory site, as well as closure and cessation of business operations.

Peter Perfecto, executive director of the Makati Business Club (MBC), said the group is encouraged by the statements of both Duterte and Vice President Leni Robredo and their call for unity.

Robredo, sworn in earlier yesterday at the Quezon City Reception, said she will spend her first 100 days going around the country and will attend to the needs of Filipinos in alleviating hunger, giving them access to education and health and empowerment.

“We laud President Duterte’s first order to all cabinet secretaries to reduce requirements and processing time of all applications across agencies and remove redundancies in these requirements and to respect the sanctity of contracts. We further laud his statement that the country will honor all existing treaties and international obligations,” Perfecto said.

Perfecto added the MBC is encouraged as well by his call for inclusivity in the ongoing and other peace processes, particularly of indigenous peoples.

“We are pleased to hear that both President Duterte and Vice PresidentRobredo have called for the nation to work together and set aside personal interests to reach our shared vision for the nation. In response to their calls, we reiterate our commitment to work closely with the new government to make people’s lives better, safer and healthier,” the MBC said.

As well as taming crime, voters will be looking to Duterte to fix the country’s infrastructure, create jobs and lift more than a quarter of the 100 million population out of poverty.

Duterte says he wants to spread wealth more evenly.

But he has also said he will continue Aquino’s economic policies, which focused on infrastructure and fiscal efficiency, to push growth up to 7-8 percent, and analysts say they are encouraged that he plans to delegate this to experienced hands.

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RELATED FROM PHILSTAR

PLDT, Globe welcome Duterte’s move to cut red tape By Louella Desiderio (The Philippine Star) | Updated July 3, 2016 - 12:00am 2 4 googleplus0 0


“Our commitment to the Duterte administration is to improve internet services in one year. We can do this if we have the full support of the LGUs and other government agencies in fast-tracking the permits in our rollout,” Castelo said. STAR/File photo

MANILA, Philippines - Telco players PLDT Inc. and Globe Telecom Inc. welcome the new administration’s commitment to improve the business environment by cutting red tape as this would enable them to deliver improved internet services.

“At this point, the specifics of this major initiative have still to be worked out. But we are hopeful that this will help us expedite our network rollout by simplifying and facilitating the issuance of permits and clearances,” Ramon Isberto, PLDT and Smart Communications Inc. public affairs head, said in a text message.

He said the simplified issuance of permits and clearances for deployment of the necessary infrastructure would be a win-win situation because faster rollout means communities and businesses would benefit faster from improved connectivity.

Globe also welcomed the new administration’s commitment to improve government services by reducing bureaucratic red tape.

The Ayala-led telco is optimistic the new administration’s efforts would lead to the standardization of local government units (LGU) permits and fast track the approval process of securing permits to build cell sites and right-of-way.

“We are optimistic that the policy direction made by President Duterte will be immediately implemented and thus shorten the permitting process for cell sites and right-of-way,” Globe general counsel Froilan Castelo said.

Globe has been pushing for the reduction of the number of permits necessary to build cell sites.

At present, there are 25 permits needed to build cell sites with the process taking at least eight months.

“Our commitment to the Duterte administration is to improve internet services in one year. We can do this if we have the full support of the LGUs and other government agencies in fast-tracking the permits in our rollout,” Castelo said.


PHILSTAR (COMMENTARY)

MMDA ‘new rules’ will lead to hell, not heaven SPYBITS By Babe G. Romualdez (The Philippine Star) | Updated June 28, 2016 - 12:00am 1 139 googleplus0 1


By Babe G. Romualdez

No doubt about it, traffic is now one of the most serious challenges to be faced by the administration of president-elect Rodrigo Duterte, so much so that various business groups are ready to support proposals to grant emergency powers to the incoming president.

Even before his now viral interview with blogger Mocha Uson, Duterte already said there is no silver bullet to solve the traffic mess in Metro Manila, with commuters and drivers spending four to six hours travelling to work and going back home, and estimates placing economic losses at P3 billion per day due to traffic.

As a matter of fact, text messages are being passed around about the “new” traffic rules MMDA will supposedly start enforcing by July 1 – and these include:

-the implementation of an odd-even scheme (instead of number coding) with no window hours for exception;

-opening up of subdivision gates at certain hours (presumably during rush hours);

-enforcement of the “no car, no garage” policy;

-banning of provincial buses from EDSA;

-denial of registration for vehicles that are more than 15 years old; turning of unused big vacant lots into pay parking areas by LGUs;

-relocating bus stops 100 meters away from malls and train terminals;

-confiscation and cancellation of LTO registration for colorum and out-of-line vehicles; and prohibition of parking along sidewalks by patrons of commercial establishments (like restos in Timog and Maginhawa in Quezon City); and others.

A lot of the above are actually still proposals and recommendations, but talk about giving emergency powers to the incoming president to solve the traffic problem has revived them – and these are sure to meet resistance among affected Filipinos.

For instance, opening up subdivision gates is driving fears that security within private enclaves could become compromised. The same goes for the “no garage, no car” policy, with critics saying this curtails an individual’s right to obtain property. Owners of cars older than 15 years also disagree with the prohibition, saying old vehicles that are well maintained will not cause obstruction.

They also point to an earlier administrative order issued by the MMDA that limits the use of vintage vehicles (those with year models earlier than 1975) to weekends and holidays only. After meeting strong objection from vintage car owners who said the AO is a violation of people’s constitutional right to own and enjoy property, the MMDA rescinded the order.

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Studies show Metro Manila lacks about 3,000 kilometers of road networks (MMDA says there are only 5,000 kilometers).

The real solution to this gargantuan traffic problem is not adding more roads but minimizing the number of cars on the roads.

According to local car manufacturers, the Philippines is poised to become a major car market by 2020 with an estimated 500,000 units to be sold – up from the 168,000 units sold in 2010.

Over the years, the number of cars sold has exponentially increased with 269,000 units sold in 2014 and 310,000 units sold last year.

This year, the Chamber of Automotive Manufacturers of the Philippines project vehicle sales to reach a record high of 350,000 units – especially since car companies make it so easy for millennial professionals to own a car with low down payments and easy financing.

One of the reasons why people want their own car is to have more mobility since taking the bus or the MRT has become a discouraging option.

Clearly, opening up more roads is not the answer.

Simply put – more roads means more cars, period! You can even build a road straight to heaven and chances are more cars will follow – since no one wants to take the road going to hell. People caught in traffic already experience hell every day. The only answer is to cut down the number of vehicles on the road by improving our public transport system.

The way to discourage people from bringing their cars is by “congestion pricing,” a scheme implemented in major cities like London and Singapore where cars pay high fees to use certain roads during “congestion hours.” New York is also looking at congestion pricing to ease traffic on the streets.

Even an article published last February by The Economist points to rising car ownership as a major reason why roads continue to be clogged. Interestingly, the article said. “Even with a perfect transport plan, Manila would probably have a problem. The population of the entire capital area rose from 18m to 23m between 2000 and 2010.”

In any case, the government has to come out with efficient transport systems to convince people – event the rich ones – to leave their cars at home.

Right now, the P2P (point-to-point) bus service from Alabang to Makati (and vice versa) launched by the DOTC last April seems to be successful, with more and more passengers from Alabang (and even Cavite) taking the air-conditioned buses that leave every 30 minutes at designated pickup points in Alabang Town Center and Greenbelt 1 in Makati. The P2P experiment started in Quezon City and more routes will be added now that more car owners are shifting to the air-conditioned bus service, our sources at the DOTC said.

Shuttle service program

Many also laud the launch of the Ateneo shuttle service program by the MMDA and the Ateneo – aimed at reducing the number of vehicles plying the perennially gridlocked Katipunan Avenue in Quezon City.

While the initial run only had a few students taking the buses (with pickup points in Temple Drive, SM Marikina, UP Ayala Techno Hub), many are confident the project will pick up steam and help decongest Katipunan since the feedback has been positive, with students saying it only took them 20 minutes to get to school instead of the usual hour-and-a-half spent idling on the road due to traffic.

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ALSO FROM PHILSTAR BY BOO CHANCO

Avoiding a power supply crisis DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) | Updated July 1, 2016 - 12:00am googleplus


BOO CHANCO

Today is the first day of the Duterte administration and there is a mountain range of high expectations. The past administration is leaving behind a number of crisis situations and new ones seem to be erupting every day.

Over the last month, there had been five instances when NGCP declared a yellow alert in the power supply of the Luzon Grid. That means we were in danger of having power outages because a number of large power plants conked out at the same time.

Luckily, we managed to avoid the blackouts but our electricity bills may go up because the rates at the electricity supply spot market went up following the law of supply and demand. Maybe the higher rate is not as bad as having no power. Still, the yellow alerts show how precarious our power situation is.

Early this week, Indonesia ordered a ban on Indonesian vessels going into Philippine waters. That’s because a number of Indonesian sailors are being held hostage for ransom by the Abu Sayyaf.

Indonesia supplies 70 percent of the country’s coal import needs. Coal is 45 percent of our electricity generation mix.

This problem shows very clearly how peace and order directly affects our economy. No Indonesian coal means massive power blackouts for the Philippines. Indonesian officials say the ban will remain until we secure our waters.

Two things come out with this development.

First, we have to vastly improve our level of energy independence. When I was working with PNOC and the Ministry of Energy in the early ’80s, the problem was our heavy dependence on oil imported from the politically volatile region of the Middle East. Now it is coal.

It is surprising that Indonesia, an ASEAN country, is effectively restricting supply now because of our inability to resolve the Abu Sayyaf piracy problem. Indonesia and Malaysia were very helpful in assuring our energy supplies during the energy crisis years of the ’80s. We have emergency energy supply agreements with them that gave us a good level of comfort during those unpredictable times.

I think the DOE is whistling in the dark when it tried to downplay the dangers of this emerging crisis.

DOE said the government is looking at Australia, Russia and Vietnam as sources of coal after the Indonesian ban. But it takes time to negotiate new supply contracts and organize the logistics of delivering to our power plants.

I hope DOE has the right numbers when it declared the availability of a 20-30 days inventory of coal at the power plant sites. They can also use vessels of other countries to deliver Indonesian coal here, but again it takes time to make alternative arrangements.

More significant is the assurance of Semirara Coal chairman Isidro Consunji that they are ready to divert 700,000 tons of their monthly exports for local use. An energy expert I used to work with in the old days commented to me that the Indonesian ban makes it imperative for us to expand local coal production soonest.


Semirara Coal chairman Isidro Consunji PHOTO FROM BULLETIN FILE

But, he pointed out, only Semirara is in a position to effect a substantial expansion. In Mindanao, the Daguma coal project of the San Miguel group can be developed into another major coal mine, if the provincial board of South Cotabato lifts its ban on open pit mining. That’s not likely to happen any time soon, specially with a tougher DENR Secretary who isn’t fond of mining, and much less coal mining.

But don’t blame our dependence on coal instead of renewables. Our power rates are among the highest in the region. For now, coal has become the default fuel of choice so as not to raise rates too much.

The price of renewables is expected to go down but we are already paying an additional P8.65 per kwh to use solar energy. That’s the subsidy called FIT or Feed in Tariff. The subsidy varies according to energy source, with solar, wind, mini hydro and biomass enjoying different rates.

Sure, let us have a program to phase out coal in favor of renewables. But for now up to the next five or even 10 years, it is still going to be coal.

But good news is on the horizon with solar. Leandro Legarda Leviste, the entrepreneurial son of Sen. Loren Legarda is saying solar is now competitive with coal. New technology, efficient design and low interest rates have all combined to bring down the cost of solar electricity.

Lean reports that last month, the world’s lowest priced solar was bid in Dubai at P1.345 per kilowatt hour. Other bids have resulted in P1.575 in Mexico, and P1.741 in the United States by Warren Buffett’s Berkshire Hathaway.

This happened, Lean explained, because of a 90-percent decrease in panel costs over the past decade, low interest rates, and high levels of sunlight — making solar in those places significantly cheaper than fossil fuel.

Because of this, Lean says that in the Philippines, where coal averages at P4, gas at P6, and diesel at P8, solar is competitive even without the FIT subsidy. The problem with most of the current local solar projects, Lean explains, is that these have been built inefficiently.

Lean promises to change that and cut the cost by up to 50 percent. He pointed out our market has now gained economies of scale. The Philippines had a total four megawatts of solar in 2013, but it has reached 900 MW by mid-2016.

But the problem, he said, is that few companies integrate development, investment, and construction all in-house. Lean thinks that as the market matures, agents, middlemen, and subcontractors will struggle to compete. Local companies investing in solar must vertically integrate to lower costs, he emphasized.

Lean says local projects previously avoided technologies like trackers that follow the sun and increase yield by 20 percent because they were more interested in meeting a deadline for the FIT. Now that they are in, they can sit back and collect the subsidy over 20 years (at 16 percent p.a. guaranteed return) even if, as Lean reveals, costs are more than competitive with coal and other fossil fuels. Economic rent-seeking has shown its ugly head as always.

Lean sneers at this attitude of early solar investors who think keeping prices high for the consumer is in their best interest. Lean rightly believes that if the entire industry lowered prices, solar would grow from a small subsidized market of just one percent of energy demand to 100 percent of the Philippines.

The other thing that will enable solar to effectively compete with fossil fuels is the fast pace of developments in storage technology. Solar needs storage to displace more than just daytime generation and stabilize output.

Lean explains that “today, you can roughly assume that batteries add around P2.50 per kwh to the cost of solar energy; based on current trends, this should drop to P1.25 by 2020, at which point solar and batteries will compete with coal.

“But even with present battery prices, solar can replace all gas, oil, and diesel in the Philippines, saving the Filipino consumer almost P100 billion a year, lowering our generation costs by up to 20 percent.”

Lean cites his solar installation at SM Mall of Asia that is supplying power at 30 percent below utility rates. It’s worth noting that cost-savings are even greater for rooftop, which also saves transmission, distribution, and other charges.

Lean promises to prove the competitiveness of solar in a solar farm in Tarlac, which will be the world’s largest unsubsidized solar farm, replacing expensive gas, oil and diesel.

I checked out Lean’s claims with an energy expert I trust. He said there is no doubt the cost of solar is going down. But he cites the added cost of storage that is needed for 24/7 operation. Anyway, he believes storage cost will go down within the next five years. “Tesla is leading this effort and I have no doubt they can achieve that, maybe even sooner.”

For now my expert friend says solar must be blended with other technologies like natgas/LNG. “This is done in the US and cost is driving out coal plants (together with the environmentalists). Henry hub price is 2 to 5 $/mmbtu compared to Malampaya at 9 $/mmbtu from a high of 14 $/mmbtu.”

So there… the new Energy secretary must learn all these technical stuff quickly so he can provide the strategic vision in a Duterte Energy Plan. I hope Al Cusi is up to the challenge.


Chief News Editor: Sol Jose Vanzi

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