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YEARENDER: ISSUES CREATE SHOCKWAVES FOR ENERGY SECTOR
[ALSO OPPED BY DUBAI OF SE ASIA; 80 reclamation projects listed]
DECEMBER 27 -ENERGY CHIEF CUSI Shockwaves were felt in the energy sector in 2016, from the change in leadership to various controversies. Solar FIT At the start of the year, solar players were scrambling to beat the March 15 deadline to qualify for the second round of feed-in tariff (FIT-2) for solar, which needs only 450 megawatts (MW) in new capacity to meet the 500-MW installation target. With numerous developers eyeing the P8.69 per kilowatt (kwh) fixed rate for 25 years, the solar capacity overshot the installation target, leaving over 300 MW without the much sought set of incentives. READ MORE...ALSO, OPPED BY DUBAI OF SE ASIA; 80 reclamation projects listed...
ALSO: Typhoon Nina incurs P400M in agriculture damage
[ALSO YEARENDER: Tourism sector sustains upward trajectory -INCLUDES FOREX EXCHANGE AS OF DECEMBER 29, 2016)]
DECEMBER 27 -Residents clean the road a day after Typhoon Nock-Ten (local name Nina) hit Mabini township, Batangas province, Philippines on Monday, Dec. 26, 2016. The powerful typhoon slammed into the eastern Philippines on Christmas Day, spoiling the biggest holiday in Asia's largest Catholic nation but weakened slightly on Monday as it roared toward a congested region near the country's capital, officials said. They said that Typhoon Nock-Ten had cut power to five provinces as well as displacing thousands of villagers and travelers in Asia's Catholic bastion. AP/Bullit Marquez The cost of damage to agriculture in areas affected by Typhoon Nina has reached almost P400 million with the crops sector sustaining the most damage, the Department of Agriculture (DA) said. Initial damage report from the DA showed that agricultural damages have amounted to P386.5 million covering 317,956 hectares of agricultural areas. In the Bicol Region alone, an estimated 87,800 hectares of rice areas and 6,000 hectares of corn areas have been affected. Loss in value is pegged at P295 million for rice and P85 million for corn. READ MORE...ALSO, YEARENDER: Tourism sector sustains upward trajectory...
ALSO: November govt spending jumped
[RELATED: Govt prepares auction for LRT-1 rail coach deal]
DECEMBER 29 -DUTERTE PHOTO POSTED in Philippine Daily Inquirer / 05:08 PM June 03, 2016 The administration of President-elect Rodrigo Duterte plans a further hike in infrastructure spending to up to 7 percent of the economy this year, higher than the 5 percent target of President Benigno Aquino III’s government, as the incoming budget chief laments the present sorry state of infrastructure. The government incurred a budget deficit of P19.1 billion in November, as expenditures jumped 33 percent, outpacing the 18-percent growth in revenue collection. This brought the total budget shortfall in the first 11 months to P235.2 billion, the Bureau of Treasury said Wednesday. Data showed the November deficit was a reversal of the P6-billion budget surplus recorded in the same month last year. It was also wider than the P2.3-billion deficit recorded in October, according to the latest cash operations report of the Treasury. The 11-month deficit also escalated from the P46.5-billion shortfall posted in the same period in 2015. Netting out debt interest payments, the government posted a primary surplus of P400 million in November. READ MORE...RELATED, Govt prepares auction for LRT-1 rail coach deal...
ALSO YearEnder: Budget freebies come w/revenue challenges in 2017 [ALSO: Duterte clears Tetangco of corruption; not AMLC]
DECEMBER 29 -Dominguez (left )and Diokno A few days after the 2017 budget was signed into law, Finance Secretary Carlos Dominguez gave both an assurance and a warning on government revenue prospects for next year. “We are confident that the deficit will remain within three percent of gross domestic product,” Dominguez told The STAR in an e-mail. “(However), a delay in tax reform will result in delays in infrastructure projects,” he said. That could serve as a dose of reality as people in and out of the government cheered all the “freebies” that come with the so-called budget for “real change” worth P3.35 trillion. The public applauded three new welfare programs, amounting to P18 billion, dangled by Budget Secretary Benjamin Diokno. READ MORE...ALSO, Duterte clears Tetangco of corruption; not AMLC...
ALSO: China says it will shut down ivory trade by end of 2017
DECEMBER 31 -In this file photo taken Friday, Sept. 30, 2016, an elephant walks through the bush at the Southern African Wildlife College on the edge of Kruger National Park in South Africa. The Chinese government said in a statement released on Friday Dec. 30, 2016, it will shut down its official ivory trade at the end of 2017 in a move designed to curb the mass slaughter of African elephants. AP FILE PHOTO JOHANNESBURG — China says it plans to shut down its ivory trade by the end of 2017 in a move designed to curb the mass slaughter of African elephants. The Chinese government will end the processing and selling of ivory and ivory products by the end of March as it phases out the legal trade, according to a statement released on Friday. China had previously announced it planned to shut down the commercial trade, which conservationists described as significant because China’s vast, increasingly affluent consumer market drives much of the elephant poaching across Africa. READ MORE...
ALSO: Most Pinoys have fulfilling personal relationships
NOVEMBER 28 -(From left) TV Talk show personality Tonipet Gaba, Pru Life UK president and chief executive officer Antonio De Rosas, Relationship expert Rose Fres Fausto, Ipsos Philippines managing director Marie Lee, Pru Life UK assistant vice president for Brand and Communications Anna Gizelle Camua answer questions about the Pru Life UK Relationship Index from media guests. Filipinos' relationship with their partners, family, children and friends fulfilled 79 percent of their desired relationship needs, the second highest among 10 Asian countries, a survey conducted by Pru Life UK showed. Pru Life UK's Relationship Index, the first in Asia, was based on more than 5,000 interviews conducted in the Philippines, Cambodia, China, Singapore, Hong Kong, Indonesia, Malaysia, South Korea, Thailand and Vietnam to understand the state of personal relationships in the region. The index measures how satisfied Asians are with their primary relationships – with partners, children, family and friends – and what can be done to improve them. Based on the results of the survey, the Philippines has a relationship satisfaction score of 79 over 100. This means that on average, Filipino respondents’ primary relationship fulfilled 79 percent of their relationship needs, second only to Vietnam with a score of 83 over 100. READ MORE...
ALSO: EDITORIAL - Abusing the budget
DECEMBER 30 -President Rodrigo Duterte described the 2017 expenditure program as an “era of budget credibility” and vowed to protect it from abuse. The General Appropriations Act, now reaching over P1 trillion, is a powerful tool that the government can use in furthering its socio-economic objectives, including generating jobs, reducing the poverty incidence, funding social welfare programs and providing education. Abusing the budget or deviating from its original purpose, however, will not accomplish Mr. Duterte’s socio-economic agenda. The national budget has been abused in the past, especially by powerful politicians seeking to perpetuate their term by financing pet projects just to please their constituents and assure their reelection. READ MORE...
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YEARENDER: Issues create shockwaves for energy sector
DECEMBER 27 -ENERGY CHIEF CUSI
MANILA, JANUARY 2, 2016 (PHILSTAR) By Danessa Rivera December 27, 2016 - Shockwaves were felt in the energy sector in 2016, from the change in leadership to various controversies.
At the start of the year, solar players were scrambling to beat the March 15 deadline to qualify for the second round of feed-in tariff (FIT-2) for solar, which needs only 450 megawatts (MW) in new capacity to meet the 500-MW installation target.
With numerous developers eyeing the P8.69 per kilowatt (kwh) fixed rate for 25 years, the solar capacity overshot the installation target, leaving over 300 MW without the much sought set of incentives.
Solar players, led by the Philippine Solar Power Alliance (PSPA), have long been seeking for transparency in the validation process and a thorough investigation on those that supposedly qualified for FIT perks.
The previous administration came out with a list of eligible solar power plants wherein 17 projects with a total capacity of 417.05 MW were endorsed to receive incentives in the second round for solar under the FIT scheme.
This was disputed by solar developers who were not in the list over questions in qualifications.
“I think it’s not a question of who is excluded, because if you really should be excluded, you should be excluded if you did not make it to the parameters set. What we need to work on are the parameters that were the basis of their decision. The parameters has to be very clear,” PSPA president Maria Theresa Capellan had said.
With the change in government, the DOE launched an investigation on the controversies surrounding the solar FIT-2 race.
An investigating committee was formed in September to thoroughly study the implementation of the solar FIT-2 following complaints lodged by solar companies.
But DOE Secretary Alfonso Cusi also wrote to the Energy Regulatory Commission (ERC) to continue the process under the FIT mechanism since the endorsements were made before his term.
But if there are problems arising from ERC’s evaluation, the DOE will work on addressing the issue, the energy chief said.
The DOE may have failed to get former the approval of former president Benigno Aquino III and Congress for special powers but it received overwhelming support from the private sector to avert any chance of power outage in the Luzon grid during summer, especially during the May national elections.
Private companies pledged to participate in the Interruptible Load Program, wherein commercial and industrial customers voluntarily use their own generators, instead of getting supply from the Luzon grid, to ease the strain on the grid.
All power players also complied with the DOE directive not to conduct maintenance shutdowns a week before and after the May 9 to give way for the whole election process.
The DOE also set up the Power Task Force Election (PTFE) 2016 to ensure it’s all systems go for the power sector.
Former DOE Secretary Zenaida Monsada assured the power situation in the country is stable with enough power reserves and low demand since election day is a national holiday.
The May 2016 elections proceeded smoothly, with no major power outage as feared previously, due to sufficient supply in the power grid.
During election day, only minor glitches and isolated power issues hit several polling precincts, which were immediately addressed with contingency measures to ensure smooth election process, according to the PTFE.
Change in leadership
With the landslide win of Duterte, he started naming his Cabinet secretaries and for the DOE, it was Alfonso Cusi, the vice chairman of Partido Demokratiko Pilipino-Lakas ng Bayan, Duterte’s political party.
Originally from the transport sector, Cusi was connected with the Aboitiz Group handling the family’s maritime transportation business in the 80s. He left sometime in the 90s, and formed his own shipping line, Batangas-based Starlite Ferries Inc.
Meanwhile, his experience in government started during the Arroyo administration, holding top positions such as the chief of Manila International Airport Authority, Philippine Ports Authority and Civil Aviation Authority of the Philippines.
Cusi said he did not really have any plans of going back to government, but Duterte offered him to be the DOE Secretary and obliged.
“Somebody has to work also to help the President deliver the change that is required,” he said.
Considered an outsider, the DOE chief has a lot of learning to do especially with a long list of issues in the sector, power players said.
Under his term, he promised the DOE will do everything to ensure the country will have enough power supply to meet growing demands, as well as lower power rates to the benefit of consumers who are paying one of the highest electricity tariffs in the world.
But just within six months into his term, Cusi faced numerous instances of yellow and red alerts and at least two major power outage incidents in Luzon which he dubbed as his “baptism of fire.”
A yellow alert status means that contingency reserves are below the minimum level set by the regulator but does not necessarily lead to power outages while a red alert means there is severe power deficiency.
In Aug. 5, certain parts of Luzon suffered from up to three-hour power outages yesterday due to severe power deficiency in the grid.
The insufficient power supply was caused by the sudden outage of four power plants and six power plants under scheduled maintenance.
Cusi has ordered for an in-dept audit on all power sectors—generation, transmission and distribution – to prevent such incident from happening again.
But just recently, the Luzon grid experienced power interruption lasting up to nearly two hours because of grid system fault which caused eight power plants to trip last Nov. 15.
The energy chief has then ordered to review the concession agreement of National Grid Corp. of the Philippines (NGCP) to make sure the grid operator is meeting all its responsibilities as stipulated in the deal.
In 2008, NGCP won a 25-year concession to run the country’s transmission network after it took over the management of the country’s national transmission network from the state-owned National Transmission Co. (TransCo).
New energy mix
Apart from reviewing the whole power sector, the DOE has laid down a new energy mix that will not put a limit on any technology to foster competition so that the country will have adequate and reliable electricity supply moving forward.
Cusi announced recently an energy mix in the form of 70 percent baseload, 20 percent mid-merit and 10 percent peaking.
Baseload power plants can provide the minimum level of demand in a power grid over 24 hours while mid-merit plants are those that can fill the gap between baseload and peaking plants which run during peak hours.
“What we see is we want it to be competitive so we’re not putting a quota per technology,” Cusi said.
The previous administration has set an energy mix in the form of 30 percent coal, 30 percent natural gas, 30 percent renewable energy and 10 percent other fuels.
Cusi garnered support from industries and consumer groups for a no-cap energy mix policy.
The Federation of Philippine Industries (FPI)—composed of 34 industry associations and 120 corporation manufacturing members— lauded the government’s plan to remove the cap on the power generation mix as this will promote competitive power pricing, benefitting consumers as well as the industry sector.
“Secretary Cusi’s pronouncements are consistent with FPI’s stand on certain issues, especially on supporting industrial growth by ensuring stable baseload power supply,” FPI chairman Jesus Lim Arranza said.
Meanwhile, consumer group Citizen Watch expressed its approval on the shift the energy mix policy to ensure a reliable power supply and lower the price of electricity.
“We support the DOE’s new direction on the energy mix policy promoting competition among generation companies and will ultimately result in cheaper electricity prices for consumers,” Citizen Watch secretary-general Paco Pangalangan said.
ERC official’s death
It was a big shock for the industry when the late ERC director Francisco Villa Jr. committed suicide at the comfort of his own home last Nov. 9.
His death opened a Pandora’s box for the ERC, as his suicide letters revealed corruption activities in the agency.
Sen. Sherwin Gatchalian dubbed the ERC as “the Supreme Court of the power industry,” since it has the power to grant several types of permits necessary for power industry players to operate and to adjust rates as applicable.
Created under the Electric Power Industry Reform Act (EPIRA) of 2001, ERC is an independent and quasi-judicial five-man regulatory body which ensures that the objectives of power reform such as greater competition, improved services, customer choice and lower power rates are achieved.
The DOE was quick to call of an investigation, tapping the National Bureau of Investigation (NBI) to look into the allegations as stated in Villa’s suicide letters. Both houses of Congress also made their plans to conduct hearings on the incident.
As soon as he heard of the terrible news, President Duterte immediately ordered ERC officials to resign or else he will abolish the agency. But the ERC officials did not oblige the President’s call as this will hurt the power sector, given the agency’s mandate.
Instead ERC chairman Jose Vicente Salazar went on a one-month break, giving in to calls to take a leave until investigation on the alleged corruption in the agency is finished.
“I have taken this step in order to focus on helping in the ongoing and planned inquiries regarding issues related to the Energy Regulatory Commission (ERC), particularly those allegedly raised by the late director Francisco Jose “Jun” Vila, Jr. prior to his recent death,” he said.
This was a huge blow for the power industry, which is already facing the slow processing of permits for new power projects, according to some industry players.
With no manpower enough to handle all the backlog of cases, plus the allegations of corruption within the agency, there is the overwhelming concern that permitting could take longer.
Regulatory approvals can take as much as three years, as the ERC is still processing cases such as complaints from consumers on the side.
“There’s regulatory – that also can be improved. Our main complaint is the time it takes to get an approval. So we’re not for its abolishment,” Alsons Consolidated Resources Inc. executive vice president and COO Tirso Santillan said.
RELATED FROM MALAYA BUSINESS INSIGHT
OPPED BY DUBAI OF SE ASIA; 80 reclamation projects listed By Irma Isip December 23, 2016
The Philippine Reclamation Authority (PRA) yesterday reported 80 reclamation projects are in the pipeline topped by a resurrected project languishing for the last 25 years.
This is the ambitious commercial business district that will rise in Manila Bay, that is touted to be the next “Dubai of Southeast Asia”.
The “next Dubai” project however has been opposed by different organizations since it will block the drainage system of the city of Manila that will worsen flooding during the rainy season.
PRA chairman Alberto Agra said most of the 80 reclamation in various stages of development are mostly in Visayas and Mindanao.
“This is a priority of the President to bring progress, to create more communities, ease traffic and reduce poverty,” Agra said.
President Duterte’s last act as mayor of Davao City was to sign a joint venture agreement last June for the P39-billion port and coastal development project in the city.
The multi-billion, state-of-the-art Solar City, a new tourism, commercial and residential district in Manila Bay is to be constructed by Manila Goldcoast Development Corp. (MGDC) which won the contract with the city back in 1991.
Other reclamation works in the pipeline include the 635.14-hectare Las Piñas-Parañaque Coastal Bay project; Mactan North Reclamation and Development project in Lapu-Lapu City, Cebu; Aklan Beach Zone Restoration and Protection Marina Development Project in Malay, Aklan; and the 108-hectare reclamation venture of Bacolod Real Estate Development Corp. in Bacolod City.
PRA said the project proponents have assured that Solar City will be built perpendicular and not parallel to the world-famous bay.
The reclamation project entails creation of three islands totaling 148 hectares in the Manila Bay, where business centers, residential and commercial properties, and tourism facilities, including an international cruise ship terminal, will be put up.
The project aims to be a new gold standard for cities in the Philippines. Designed to be green, self-sustaining and innovative, Solar City will be the first of its kind in using renewable energy from solar, wind and biomass sources; utilizing urban farming; and capitalizing on a modern waste management system to dramatically reduce organic waste.
PRA added designers of Solar City envision dedicated walkways and a monorail system to reduce the need for cars and bring tourists and visitors around hotels, convention centers, and even an artificial beach to make Manila good enough to be dubbed the “Dubai of Southeast Asia”. Agra said the city government is almost finished processing the applications for permits and clearances of the project.
Solar City, he pointed out, is a rich revenue source for the city government as it is projected to generate up to P17 billion in taxes every year on top of the P10 billion in real property taxes.
It is also expected to generate 100,000 jobs during the construction phase and up to 500,000 more once it becomes operational, which city officials believe would help Manila’s unemployment situation.
Typhoon Nina incurs P400M in agriculture damage By Louise Maureen Simeon (philstar.com) | Updated December 27, 2016 - 5:21pm 0 2 googleplus0 0
Residents clean the road a day after Typhoon Nock-Ten (local name Nina) hit Mabini township, Batangas province, Philippines on Monday, Dec. 26, 2016. The powerful typhoon slammed into the eastern Philippines on Christmas Day, spoiling the biggest holiday in Asia's largest Catholic nation but weakened slightly on Monday as it roared toward a congested region near the country's capital, officials said. They said that Typhoon Nock-Ten had cut power to five provinces as well as displacing thousands of villagers and travelers in Asia's Catholic bastion. AP/Bullit Marquez
MANILA, Philippines — The cost of damage to agriculture in areas affected by Typhoon Nina has reached almost P400 million with the crops sector sustaining the most damage, the Department of Agriculture (DA) said.
Initial damage report from the DA showed that agricultural damages have amounted to P386.5 million covering 317,956 hectares of agricultural areas.
In the Bicol Region alone, an estimated 87,800 hectares of rice areas and 6,000 hectares of corn areas have been affected.
Loss in value is pegged at P295 million for rice and P85 million for corn.
The DA said field validation remains ongoing as to the extent of damages on rice and corn.
Damage to fisheries is also still being validated.
"Some areas are unpassable and flooded especially in Camarines Sur. Close monitoring is being undertaken by our deployed field personnel and LGU (local government unit) partners," DA said.
The Calabarzon Regional Office, moreover, reported a total of 224,156 hectares affected amounting to about P6.5 million in terms of value loss and 429.7 metric tons in production.
Agriculture Secretary Emmanuel Pinol also reported that of the 33,130 hectares of abaca in Catanduanes, a total of 27,936 hectares was heavily damaged.
The department is already preparing its resources to replace damage crops as early as possible and reminded affected farmers to acquire certifications from municipal agriculturists for them to receive replacement seeds.
The DA said buffer stock of 1,500 bags of palay seeds, 1,400 bags of white corn seeds, 2,100 bags of yellow hybrid corn seeds and 9,500 packs of vegetable seeds are available for distribution in the Bicol Region.
"In addition to the buffer stocks available for distribution, DA-Regional Field Office 5 has 300 kilograms of assorted vegetable seeds for repacking," the department said.
Combine harvesters were already deployed to nearby municipalities in Bicol and repacking of relief goods is ongoing for the evacuees.
The DA said complete damage assessment and validation caused by Typhoon Nina remains ongoing and will soon be released.
ALSO FROM PHILSTAR
YEARENDER: Tourism sector sustains upward trajectory By Mary Grace Padin (The Philippine Star) | Updated December 30, 2016 - 12:00am 0 2 googleplus0 0
In an interview, Tourism Undersecretary for development planning Benito Bengzon said visitors from various key, strategic and opportunity markets continued to flock to the country to enjoy the unique experience the Philippines offers. STAR/File photo
MANILA, Philippines - The year 2016 is shaping up to be another banner year for the Philippine tourism industry, which has sustained its growth momentum.
In an interview, Tourism Undersecretary for development planning Benito Bengzon said visitors from various key, strategic and opportunity markets continued to flock to the country to enjoy the unique experience the Philippines offers.
Given this, the Department of Tourism expects to hit its six million foreign tourist arrivals target this year. Tourism receipts, on the other hand, are seen to reach $6 billion.
Bengzon said the tourism sector’s contribution to GDP (gross domestic product) is estimated to reach 8.5 percent by the end of the year.
“This will be another banner year for Philippine tourism. As you are all aware, six million would be a record figure for the Philippines in terms of foreign visitor arrivals,” Bengzon said.
Foreign visitor arrivals to the country have already reached 4.46 million as of the end of September this year, just 1.5 million short of this year’s goal.
Employment generated by tourism-related enterprises is seen to reach 4.5 million by the end of the year, bulk of which will come from the transport sector, followed by the accommodations sector.
Bengzon likewise noted the increasing share of tourism activities in emerging destinations in the country.
“We’re seeing a wider distribution of tourism activities around the country. And this is particularly significant because this is aligned with the 10-point agenda of the President, as well as the policy statements of the tourism secretary, which both call for more sustained development in the countryside,” the tourism official said.
He said more foreign tourists are going to Davao, Siargao, Palawan and Iloilo, among others.
Some tourism products and segments have also started to exhibit more potential for growth in the past year, Bengzon noted.
For one, he said diving enthusiasts all over the world are starting to appreciate the Philippines as a choice marine dive spot.
Just recently, the DOT assisted in organizing two major diving events in the country. These include the Diving and Resort Travel Expo Philippines 2016 held last September, as well as the fourth Anilao Underwater Photo Competition Festival.
This year’s DRT expo saw more exhibitors and delegates, proving the growing interest in the Philippines as a premiere diving destination, Bengzon said.
He added foreign divers have also expressed their fascination for the Philippines’ marine resources and diving spots during the DOT’s participation in other diving expos worldwide.
“You can see that we’re making a lot of headway and people are starting to take a closer look at the Philippines as a diving destination,” the undersecretary said.
Another segment that has exhibited immense potential in the past year is cruise tourism. The DOT has completed its National Cruise Tourism Development Strategy due to the growing demand for cruise calls in different parts of the country.
Bengzon described the completion of the roadmap as one of the major accomplishments of the DOT this 2016.
The master plan, according to Bengzon, identifies the Turquoise Triangle, which includes Manila, Boracay, Northern Palawan and Subic as some priority areas for cruise development.
He said the private sector’s interest to invest in cruise port infrastructure, as well as the demand of passengers to visit different tourist spots in the country reflect the growth potential of this particular segment.
Identifying cruise tourism as a priority area for growth, the DOT has intensified its presence in various online platforms, such as Seatrade Cruise.
“This is one area where we feel we have been successful with – marketing and promoting the Philippines as a cruise destination,” the tourism official said.
As of the end of October this year, a total of 19 cruise ships, carrying 24,712 passengers had already made calls to the Philippines.
Accessibility is a key element for any tourism destination. It is one of the government’s thrusts to make sure destinations, particularly in the rural areas, get as much access to roads and transport facilities as possible.
According to Bengzon, the DOT’s convergence program with the Department of Public Works and Highways and the Department of Transportation continued to reap benefits in the past year.
The DOT-DPWH Tourism Road Infrastructure Program, for one, developed 235 infrastructure projects with a total allocation of about P22.48 billion. The purpose of the program is to make tourist destinations more accessible to visitors through the construction of roads and bridges.
From 2013 to 2016, the government has finished close to 3,000 kilometers of roads leading to the different tourism hot spots around the country.
Bengzon likewise cited the opening of the Ninoy Aquino International Airport Expressway, which cut the travel time to and from the various terminals of the gateway.
This also connected the airport to the bay area, particularly the 100-hectare Entertainment City in Parañaque City, an emerging tourist destination known for its world class integrated resorts.
In terms of air connectivity, data acquired from the DOT showed seven international airlines opened eight new direct flights to and from Manila and various secondary gateways.
These included Xiamen Airlines, which mounted three Xiamen-Cebu flights a week starting March, Emirates with its Dubai-Cebu-Clark flights, and China Eastern Airlines’ Chengu-Cebu and Chengdu-Manila flights, among others.
Some foreign airlines have also increased the frequency of their direct flights, such as Silk Air, who launched three additional Singapore-Davao flights this year.
Meanwhile, local carriers Philippine Airlines, Cebu Pacific and Air Asia collectively opened 13 new international routes.
The direct flights mounted by both foreign and local carriers contributed a total of 888,056 additional seat capacity per year.
Bengzon said there has been an evident increase in the number of flights and passengers using secondary gateways as points of entries in recent years.
Bulk of foreign passengers or approximately 75 percent still enters through NAIA. About 15 percent goes through Cebu, while the rest enter through other international gateways, such as Clark and Caticlan.
“This is part of our thrust to disperse tourism activities,” Bengzon said.
“This will also mean that the infrastructure agencies would have to step up the development of our airports because the arrival experience that one has in a major gateway like Manila and Cebu is the same experience one will look for in secondary destinations, at least as far as the facilitating the entry and service standards are concerned,” he added.
Another landmark for the DOT and its attached agency, the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), is the grant of incentives for tourism enterprise zones (TEZ).
“This is good news because now we can finally go full blast with our tourism investment promotions and tell the world we are open for business,” Bengzon said.
He said the DOT and TIEZA are now pushing for an intensified tourism investment promotion by conducting more road shows in different markets.
The year also saw more tourism investments following President Rodrigo Duterte’s state visit to China and Japan.
Tourism stakeholders from these countries have signified their interest to expand to the Philippines and bring in more of their travelers to the country.
A lot of these investments went to the accommodations and airline business.
For one, Japanese low-cost carrier Vanilla Air agreed to introduce the Tokyo-Cebu route, while charter operators from China have started to mount more flights to Laoag and Cebu.
Prospects for 2017
Bengzon said 2017 is looking “very positive” for the tourism sector as many tourism related infrastructure are set to open.
“A lot of the infrastructure projects will be completed by 2017 and 2018, including the (expansion of) Mactan-Cebu International Airport, as well as the (opening of) airports in Puerto Princesa and Panglao,” he said.
The DOT just recently completed the draft of its National Tourism Development Plan (NTDP) for 2016 to 2022, which will set the sector’s direction in the remaining years of the current administration.
The master plan is expected to be finalized in the first quarter of 2017 which the DOT seeks to align with the National Economic and Development Authority’s Philippine Development Plan and AmBisyon Natin 2040.
November govt spending jumped posted December 28, 2016 at 09:00 pm by Gabrielle H. Binaday
DUTERTE PHOTO POSTED in Philippine Daily Inquirer / 05:08 PM June 03, 2016 The administration of President-elect Rodrigo Duterte plans a further hike in infrastructure spending to up to 7 percent of the economy this year, higher than the 5 percent target of President Benigno Aquino III’s government, as the incoming budget chief laments the present sorry state of infrastructure.
The government incurred a budget deficit of P19.1 billion in November, as expenditures jumped 33 percent, outpacing the 18-percent growth in revenue collection.
This brought the total budget shortfall in the first 11 months to P235.2 billion, the Bureau of Treasury said Wednesday.
Data showed the November deficit was a reversal of the P6-billion budget surplus recorded in the same month last year. It was also wider than the P2.3-billion deficit recorded in October, according to the latest cash operations report of the Treasury.
The 11-month deficit also escalated from the P46.5-billion shortfall posted in the same period in 2015.
Netting out debt interest payments, the government posted a primary surplus of P400 million in November.
Revenue collection increased 18 percent in November to P209.2 billion, bringing the 11-month tally to P2.03 trillion.
The Bureau of Internal Revenue collected P156.8 billion in November, up by 20 percent from a year ago. BIR collections grew 9 percent year-on-year to P1.45 trillion in the first 11 months.
“Adding back P500 million in tax refunds further increase the collection to P157.3 billion. Inclusion of tax refunds heightens the year-to-date total to P1.5 trillion for an increase of 10 percent over the previous year,” the Treasury said.
The Bureau of Customs posted a 15 percent year-on-year increase in November collections of P40.2 billion. Customs raised P361.7 billion in 11 months, up by 10 percent from a year earlier.
Treasury collections also jumped 35 percent year-on-year in November to P4.2 billion, bringing its total haul in 11 months to P95.3 billion.
Collections from other offices (non-tax) declined 22 percent to P6.5 billion in November, with the cumulative collection reaching P107.2 billion in 11 months.
Government spending escalated 33 percent in November, the fastest in nearly two years, or after the 35-percent spending growth in April 2015.
Expenditures hit P228.4 billion in November, or P56.9 billion higher than P171.4 billion in the same month a year ago.
Government spending in November brought year-to-date expenditures to P2.265 trillion, up by 14 percent from P1.992 trillion in the same period last year.
Debt interest payments in November grew 34 percent year-on-year to P19.6 billion, leading to a cumulative of P285.4 billion, or 1 percent-lower than a year ago.
RELATED FROM THE MANILA STANDARD
Govt prepares auction for LRT-1 rail coach deal posted December 30, 2016 at 08:20 pm by Darwin G. Amojelar
The Transportation Department has invited Japanese companies to bid for the P30-billion contract to supply 120 brand-new light rail vehicles for the oldest metro rail transit in Southeast Asia.
The agency said in an invitation to bid the project would be funded through a loan extended by the Japan International Cooperation Agency. The Philippine government and JICA signed the loan agreement on March 27, 2013.
The Transportation Department said only engineering, procurement and construction companies of Japanese nationality were eligible to participate in the bidding pursuant to the rules for official development assistance funding.
LRT Line 1
The winning bidder will cover the coaches design, production, verification, delivery, testing, commissioning, technical support materials associated with the operation and maintenance of the vehicles and training for maintenance staff, engineers and operators.
The agency said interested parties can buy bid documents for the supply contract from Dec. 28 to April 13, 2017. The submission and opening of bids are set on April 13 next year.
The 120 LRVs will be configured in 30 four-car train sets to allow the rail line to accommodate up to 750,000 passengers daily.
The Transportation Department in March declared the bidding for 120 LRVs a failure after no offers were received by the agency from Japanese firms.
Marubeni Corp. and Sumitomo Corp. earlier expressed interest to participate in the auction for the procurement of 120 brand-new cars for LRT Line 1.
The government allocated P30 billion for the 120 new coaches for the LRT Line 1 under the P64.9-billion LRT Line 1 Cavite extension project, which was awarded to Light Rail Manila Corp.
LRMC will construct the Cavite extension over the next four and a half years, making the entire line operational by the fourth quarter of 2020.
LRMC, a joint venture between Ayala Corp. and Metro Pacific Investments Corp., has been operating and maintaining the existing LRT-1 system since the functions were handed over by Light Rail Transit Authority in September last year.
LRTA remains the regulator of the railway while the Transportation Department is the implementing agency of the 32-year public-private partnership concession agreement with LRMC.
The consortium would spend over P40 billion to rehabilitate and expand LRT Line 1.
Eight new stations will be provided with three intermodal facilities across Pasay City, Parañaque City, Las Piñas City and Cavite.
YearEnder: Budget freebies come with revenue challenges in 2017 By Prinz Magtulis (The Philippine Star) | Updated December 29, 2016 - 12:00am 2 10 googleplus0 0
Dominguez (left )and Diokno
MANILA, Philippines – A few days after the 2017 budget was signed into law, Finance Secretary Carlos Dominguez gave both an assurance and a warning on government revenue prospects for next year.
“We are confident that the deficit will remain within three percent of gross domestic product,” Dominguez told The STAR in an e-mail.
“(However), a delay in tax reform will result in delays in infrastructure projects,” he said.
That could serve as a dose of reality as people in and out of the government cheered all the “freebies” that come with the so-called budget for “real change” worth P3.35 trillion. The public applauded three new welfare programs, amounting to P18 billion, dangled by Budget Secretary Benjamin Diokno.
On Jan. 1, 2017, the budget will give P8.3 billion for free college education in state universities and colleges for the first time, expand the free hospitalization and medicine program with an allocation of P7 billion to cover not only poor families, but also non-indigent ones, and provide irrigation to farmers at no cost through a P2-billion funding program.
“We need to invest in the education of our youth...free irrigation is intended to boost the agriculture which is both pro-poor and pro-growth. Universal healthcare will be truly universal as it covers 100 percent of potential beneficiaries,” Diokno said.
But just like Dominguez, Diokno did not answer directly how revenue would catch up with the new government’s planned budget pump priming, which for now looks balanced on welfare and infrastructure, but may slide more into becoming populist in the coming years if government revenue falls short.
“Welfare spending assumes a lot of tax revenues and moderate borrowing to sustain,” said Alvin Ang, economist at Ateneo de Manila University, in an e-mail.
Hard to take away
The 2017 outlay, up around 11 percent from this year, embodies President Duterte’s promise – that of making years of strong economic growth felt by most people.
That has been the global trend last year.
Duterte was being lined up with the likes of US president-elect Donald Trump and UK Prime Minister Theresa May, who both ran on the platform of responding to people’s need for better services, which they felt were neglected despite years of economic prosperity.
“It really depends on the priority of the sitting government,” Ang said.
But for Maria Fe Villamejor-Mendoza, dean of the National College of Public Administration and Governance at the University of the Philippines, people’s expectations should still be “managed” to properly allocate the government’s meager resources.
Sustainability of welfare programs could be difficult, she said, which would partly explain why Dominguez warned of a cut on infrastructure spending instead. “That’s easier to take,” she said.
“It’s really hard to reduce or take away all the free stuff because these become entitlements, meaning, people feel they are entitled to them,” Mendoza said in a phone interview.
“I think for some programs, like free college education, people’s expectations should be managed in a sense that you make them realize that not all are bound to benefit,” she said.
For instance, Mendoza said emphasis should be given on the fact that free tuition in SUCs would be subject to stringent qualifications of students. The Commission on Higher Education (CHED) had said it is drafting implementing rules for the P8.3-billion funding which would be shared by 113 SUCs with around P73 million each.
Diokno agreed. “DBM and CHED will tighten rules on scholarships in SUCs,” he said.
Qualifications may likewise be needed for free irrigation services, which Mendoza said had been naturally contentious in recent years. “That was always the question. You are providing water and farmers cannot pay it, yet the government also has limited resources, so who should pay?” she said.
On the other hand, universal healthcare, which was started by the previous administration, is similarly under threat from populist measures. A bill that aims to reverse a 2012 law that generated roughly P40 billion in additional revenues every year just passed the House of Representatives and will now be heard in the Senate. The law channeled the bulk of incremental revenues to healthcare.
House Bill 4144 aims to retain the two-tier excise tax on cigarettes, which the Department of Finance said would widen disparity on tobacco products and prompt manufacturers to shift to cheap cigarettes to prevent paying higher taxes. That will come on top of possible health repercussions.
“Legislating unpopular tax policies to fund populist programs will be the biggest challenge to this administration,” Bank of the Philippine Islands lead economist Emilio Neri Jr. said.
“The populist spending programs could lead to a return to our profligate past or a failure to stick to our deficit targets,” Neri said.
Dominguez admitted “tax administration is quite difficult” if a two-tier tax system is retained, but said there is no stopping the unitary rate under Republic Act 10351 of 2012 from taking effect next year, for now.
Higher interest rates
As if that was not enough, interest rates tied to government borrowings used to bridge the budget gap between revenue and spending, are bound to rise next year, National Treasurer Roberto Tan said.
Theoretically, revenue increases every year as the economy expands. The only period when revenue declined recently was during the global financial crisis. In recent months, however, revenue agencies had been underperforming, which may leave the government no choice but to borrow more.
Take the Bureau of Internal Revenue, for instance. For the first five months under President Duterte, average growth rate hit 6.4 percent, slower than the economic growth of 6.9 percent in the third quarter.
The Bureau of Customs, meanwhile, had performed better, even beating its collection target for November. But that came on the back of a weakened peso that slumped more than P2 against the dollar from 47.06 to $1 in 2015. Earlier, Diokno said every peso depreciation earns the government P9.2 billion.
“The Treasury is confident that we will be able to successfully navigate market conditions and raise necessary funding for government’s program,” Tan said.
“Even though there is upward pressure in interest rates, the Treasury, as in the past, is equipped...to minimize the effect or rising borrowing costs,” he said.
Indeed, borrowings are programmed to decline 9.2 percent next year, although no law stops the government from borrowing more as needed. It fell below its borrowing plan for 2016.
Neri said revenue challenges could impact the country’s credit ratings.
“Our sovereign ratings are at stake and a downgrade could make public infrastructure financing far more challenging for the government and higher cost of credit less supportive of private sector capacity expansion,” he warned.
Both Neri and Ang agreed the landmark tax reform should be passed to help raise additional revenues. The first package of the reform, poised to generate P200 billion, had been stuck unnumbered at the House ways and means committee.
The plan was to originally pass it at the committee level this year. The package will cut personal income taxes and exchange this with higher excise tax in oil and removal of some value-added tax exemptions.
Dominguez said it “remains on track.” But committee chair Dakila Cua said the current version would not get enough support, prompting him to draft a “compromise” measure that would divide into phases the planned oil tax hike into three to five years, delaying potential additional revenues.
“We are still finalizing (it),” Cua said.
ALSO FROM THE MANILA TIMES
Duterte clears Tetangco of corruption; not AMLC BY LLANESCA T. PANTI, TMT ON DECEMBER 31, 2016 BUSINESS
PRESIDENT Rodrigo Duterte is not accusing Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. of corruption, but declined to clear the rest of the Anti-Money Laundering Council (AMLC), which Tetangco heads .
The President made the clarification in an interview with ABS-CBN News a week after he demanded the resignation of BSP officials and accused the AMLC of non-cooperation in his government’s fight against money laundering.
Tetangco sits as AMLC chairman in his capacity as BSP governor.
“I don’t have a problem with BSP Governor Tetangco. I have a problem with AMLC. I think some people in AMLC are corrupt,” Duterte said.
The President, however, did not elaborate on such corruption and disclosed that the AMLC already gave the Justice department the information that it needs to pursue those who are involved in illegal drugs and benefiting from drug money.
PHOTO FROM ABS-CBN DEC 30, 2016 -BSP Governor Amando Tetangco Jr. MANILA - President Rodrigo Duterte said on Thursday he is considering extending the term of current Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr., but the law does not allow it. Tetangco is set to step down as central bank governor when his second term expires in July next year, but Duterte said he may appoint him to an unprecedented third term. "I am looking into the possibility if I can appoint him again,” Duterte said in an exclusive interview with ABS-CBN News' Lynda Jumilla in Malacañang. ABS-CBN
“The AMLC already gave me the things I need,” Dutere added.
Asked whether he would keep Tetangco in his post, Duterte noted that Tetangco is barred by law from a third term as central bank governor. The President added, however, that he would look into such possibility.
In remarks after signing the 2017 national budget last December 22, Duterte described the BSP and AMLC officials as a bunch of crooks who were still “hungry” for money despite their fat salaries, but did not name names.
“You guys there are all corrupt, bantay kayo sa akin [I’ll keep an eye on you]. I will bring you down. [Tetangco] is about to retire. Better prepare there because I’ll give you a whack. You are all, you are all corrupt and serving [a]master. You are not supposed to engage in politics, God damn it,” the President said.
On the same day, Justice Secretary Vitaliano Aguirre 2nd clarified that Duterte was only asking for the resignation three AMLC officials, two of them embattled Sen. Leila de Lima’s “fraternity brothers.”
“The President was referring to the people implementing the law. The one in the office of the executive director, the deputy, and the head of investigation,” Aguirre told reporters in a chance interview in Malacañang.
The AMLC’s executive director is lawyer Julia Bacay-Abad. Its compliance and investigation group is headed by Vencent Salido, also a lawyer. Roland Villaluz, another lawyer, heads the legal services group.
China says it will shut down ivory trade by end of 2017 Associated Press / 09:45 AM December 31, 2016
In this file photo taken Friday, Sept. 30, 2016, an elephant walks through the bush at the Southern African Wildlife College on the edge of Kruger National Park in South Africa. The Chinese government said in a statement released on Friday Dec. 30, 2016, it will shut down its official ivory trade at the end of 2017 in a move designed to curb the mass slaughter of African elephants. AP FILE PHOTO
JOHANNESBURG — China says it plans to shut down its ivory trade by the end of 2017 in a move designed to curb the mass slaughter of African elephants.
The Chinese government will end the processing and selling of ivory and ivory products by the end of March as it phases out the legal trade, according to a statement released on Friday.
China had previously announced it planned to shut down the commercial trade, which conservationists described as significant because China’s vast, increasingly affluent consumer market drives much of the elephant poaching across Africa.
“This is a game changer for Africa’s elephants,” said Aili Kang, the Asia director for the New York-based Wildlife Conservation Society.
China, which has supported an ivory-carving industry as part of its cultural heritage, said carvers will be encouraged to change their activities and work, for example, in the restoration of artifacts for museums. More efforts will be made to stop the illegal trade, the statement said.
China has allowed trade in ivory acquired before a 1989 ban on the ivory trade by the Convention on International Trade in Endangered Species of Wild Fauna and Flora, which seeks to regulate the multi-billion-dollar trade in wild animals and plants.
China also permits trade from a one-time, CITES-approved purchase by China and Japan of an ivory stockpile from several African countries in 2008.
Conservation groups say China’s illegal trade has since flourished and that criminal syndicates have used the legal Chinese market as cover for their illicit business in tusks.
The number of Africa’s savannah elephants dropped by about 30 percent from 2007 to 2014, to 352,000, because of poaching, according to a study published this year. Forest elephants, which are more difficult to count, are also under severe threat.
PHILSTAR 'BUSINESS AS USUAL' SECTION
Most Pinoys have fulfilling personal relationships By Mary Grace C. Padin (The Philippine Star) | Updated November 28, 2016 - 12:00am 0 0 googleplus0 0
(From left) TV Talk show personality Tonipet Gaba, Pru Life UK president and chief executive officer Antonio De Rosas, Relationship expert Rose Fres Fausto, Ipsos Philippines managing director Marie Lee, Pru Life UK assistant vice president for Brand and Communications Anna Gizelle Camua answer questions about the Pru Life UK Relationship Index from media guests.
MANILA, Philippines – Filipinos' relationship with their partners, family, children and friends fulfilled 79 percent of their desired relationship needs, the second highest among 10 Asian countries, a survey conducted by Pru Life UK showed.
Pru Life UK's Relationship Index, the first in Asia, was based on more than 5,000 interviews conducted in the Philippines, Cambodia, China, Singapore, Hong Kong, Indonesia, Malaysia, South Korea, Thailand and Vietnam to understand the state of personal relationships in the region.
The index measures how satisfied Asians are with their primary relationships – with partners, children, family and friends – and what can be done to improve them.
Based on the results of the survey, the Philippines has a relationship satisfaction score of 79 over 100. This means that on average, Filipino respondents’ primary relationship fulfilled 79 percent of their relationship needs, second only to Vietnam with a score of 83 over 100.
Among the 10 countries, China placed lowest, with a relationship satisfaction rate of 54 percent.
"Given the importance of relationships to our wellbeing, we wanted to offer real understanding and insight into human relationships. What are their dynamics that we can study? What makes them stronger? Can make them better?" Pru Life UK president and chief executive officer Antonio De Rosas said.
However, De Rosas said the findings in the Philippines are "cause both for celebration and concern."
"Celebration in that we Filipinos value relationships grounded on important attributes, such as partnership, companionship, respect and honesty," he said. "However, gaps are also present in the level of relationship satisfaction with family demands, financial uncertainty and technology causing rising tension and stress."
According to the survey, 84 percent of Filipinos appreciate partners who enjoy doing things together and respect their partner's individuality.
About 82 percent of respondents also said they are honest with their partners, while 79 percent said they make each other laugh and smile, and 78 percent are easy to get along with.
Results of the survey also showed that Filipinos express their love for each other more than anyone else in Asia. About 87 percent of Filipino couples tell their partners "I love you" once a week, with the same percentage most likely to share intimate moments, as well as laughter with their partners than anyone else in the region.
Despite being among Asia’s most expressive in showing love, Filipino couples argue with their partners the most in the region, at 35 percent.
Money is typically the main source of arguments, according to 46 percent of survey respondents. The respondents said they usually argue who makes financial decisions and who controls everyday spending.
Forty-eight percent of married men during the interviews said they make most of the major financial decisions in the family, but only 13 percent of married women said they agree with them.
On the other hand, 57 percent of married women control day-to-day spending in the households.
Technology is also a main cause of argument for couples, the survey showed. About 41 percent of the respondents said they argue due to lack of attention, while 37 percent fight when their partners spend too much time on their phone or computer.
"We are often distracted by phones and computers to the extent that we sometimes fail to be present in the company of our families and friends. We need to pause every now and strengthen the relationships that really matter," De Rosas said.
Majority or 94 percent of respondents said they would consider giving up technology for a day to spend more time with other people.
Meanwhile, the study also found that Filipino adults are mostly generous with each other when it comes to finances.
Almost all adults in the country were said to provide some financial support to at least one other person.
They also rely on family members for expenses during emergency, with 80 percent thinking that their parents would support them, and 67 percent trusting other family members would help.
Married couples are also highly involved in each other's finances. The survey said 76 percent of them plan their finances together, while 84 percent often talk about their plans for the future.
According to the study, Filipino parents have the strongest ties with their children in Asia.
Majority of Filipino parents said they give advice to their children on a weekly basis.
They also give emphasis on spending quality time with their children. Eighty-five percent of the respondents said their children express their love for them, and another 85 percent said their children make them laugh and smile.
Almost 80 percent said they enjoy doing things together, while 76 percent said they frequently interact with each other.
Majority of Filipino parents are also highly involved in the education of their children, according to the survey.
"It is my hope that the Pru Life UK Relationship Index will start discussions and be used as a lens to help us reexamine our relationships further strengthening the positive aspects and helping us bridge current gaps to make our relations stronger and even more fulfilling," Anna Gizelle Villaruel Camua, Pru Life UK assistant vice president for Brand and Communication, said.
MANILA STANDARD EDITORIAL
Abusing the budget posted December 30, 2016 at 12:01 am
President Rodrigo Duterte described the 2017 expenditure program as an “era of budget credibility” and vowed to protect it from abuse.
The General Appropriations Act, now reaching over P1 trillion, is a powerful tool that the government can use in furthering its socio-economic objectives, including generating jobs, reducing the poverty incidence, funding social welfare programs and providing education.
Abusing the budget or deviating from its original purpose, however, will not accomplish Mr. Duterte’s socio-economic agenda. The national budget has been abused in the past, especially by powerful politicians seeking to perpetuate their term by financing pet projects just to please their constituents and assure their reelection.
Mr. Duterte knows well that certain quarters can sabotage the budget as it has been done in the past when it was vulnerable and open to abuse. He ordered all agency heads in his budget message “to exercise political will and avoid any trace of influence from other branches of government in the implementation of programs, activities and projects.”
Agency and department executives may find it hard to resist pressure from politicians and other interest groups to tweak the expenditure program. But as their oath of office requires from them, government executives must toe the line or quit their job.
Mr. Duterte also reminded government agencies that any increase in appropriations and new budgetary items should carry with them “corresponding increases in the respective outputs and improved outcomes of the agencies concerned,” and called on his fellow public servants to extend their full commitment “in making this budget a tool for genuine change.”
Government executives should treat the national budget as an inviolable document after careful scrutiny by both houses of Congress. The budget, for one, laid out certain economic targets that must be met to keep the economy going. Veering away from these macro-economic assumptions or targets will have adverse consequences on the overall economic objectives. This could mean less job generation and government’s failure to make a dent in the fight against poverty.
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