Friday, April 27, 2012

A powerless government

Friday, 27 April, 2012 Written by Manila Standard Today
THE government’s admission this week that it is powerless to curb the massive importation of pork and chicken that have been crippling the local livestock industry beggars belief.
Yet this is exactly what the director of the Bureau of Animal Industry told hog raisers in a letter that described meat imports as “a decades-long problem,” and that contrary to what local growers were saying, were not affecting the retail price of pork.
Agriculture Secretary Proceso Alcala chimed in that the bureau lacked the “statutory authority to curb unfair market and trade practices.” He added that the government had yet to draw up plans on how to stop the selling of smuggled agricultural products— including meat—in the local markets.
Taken together, the statements are a disturbing indictment indeed of an administration that can—or will—do nothing to help its people.
The fact that smuggling is a decades-long problem is no excuse for the government to throw up its hands in helplessness or shrug its shoulders in indifference. Other crimes, too, have been around for decades, but we hardly expect our leaders to say they are helpless to stop them.
But in the last two years, this government has not even come up with a plan to stop the selling of smuggled meat in the markets, much less taken action against it, if we are to believe Secretary Alcala.
Customs Commissioner Ruffino Rozzano Biazon, in the recently concluded national convention of hog growers, admitted that crooked bureau personnel must have conspired with Agriculture officials to enable importers to bring choice meat cuts into the country as offal, and pay a low 5-percent tariff when they should be paying 30 percent. But outside the issuing of press releases, Biazon has done nothing to stop this practice—not even in his own home turf.
Worse, Biazon had the temerity to complain that the local hog industry had not done its part because it had not assigned experts to help Customs deal with this kind of smuggling. Is the Customs commissioner suggesting that it is now the job of private companies to monitor smuggling and import violations? The last time we looked, that was the job of the Bureau of Customs.
President Benigno Aquino III has famously said that we, the people, are his boss—and this is true in one important way: we pay the taxes that pay for his salary. We also pay for the salaries of his subordinates—including Alcala and Biazon.
In the private sector, when an employee draws a salary and does nothing for two years, he is deadwood and a candidate for firing. The government could benefit from the same policy—but we might end up firing the President, too.
(Published in the Manila Standard Today newspaper on /2012/April/27)   source

Solon sees power shortage as major poll issue in 2013

Friday, 27 April, 2012 Written by John Anthony Concepcion
HOW to address Mindanao’s power shortage will be a major issue in next year’s midterm elections as the people in the vote-rich region will be judging the candidates based on their stand on whether or not to privatize the hydroelectric power plants on the island, Senator Gregorio Honasan said Thursday.
Honasan, a former chairman of the Senate committee on energy, said he will oppose the privatization of the Agus-Pulangi hydroelectric plants.
“I have said it before and I will say it again: My position is that vital and strategic industries such as energy and power should be owned and run by the government,” Honasan told Manila Standard in a phone interview.
“The power sector should be heavily regulated by the government because it directly affects state concerns such as security and the economy.”
Honasan made his statement even as Aboitiz Power Corp. said it was investing P35 billion to add 354 megawatts of power in Mindanao by 2015 to ease the power shortage on the island that results in up to eight-hour blackouts. Mindanao needs around 1,597 megawatts daily but the power plants there were only producing 1,261 megawatts as of this month.
President Benigno Aquino III told a recent energy summit in Mindanao that the residents there must pay more for electricity or continue to suffer rolling blackouts.
Honasan said it was exactly because of the Agus-Pulangi hydroelectric plants that the power rates in Mindanao were still inexpensive as most of the electricity on the island were being supplied through these plants.
“My position is to rehabilitate these plants while initiating long-term programs to increase the sources of power in the region. We should get started on renewable energy as mandated by the RE law,” he said. With Alena Mae S. Flores
(Published in the Manila Standard Today newspaper on /2012/April/27)   source

Meralco net profit surges 58% in Q1

By Neil Jerome C. Morales (The Philippine Star) Updated April 27, 2012 12:00 AM

MANILA, Philippines - First quarter consolidated earnings of power utility giant Manila Electric Co. (Meralco) surged 58 percent to P3.37 billion on the back of higher sales from a record number of consumers.
Core net income, which strips out currency and derivatives-related items, rose by five percent to P3.42 billion from a year ago.
Amid favorable results in the first three months of the year, the country’s largest power distributor is maintaining its P15-billion core profit guidance for this year that is higher than the P14.9 billion a year ago, Meralco president and chief executive Manuel V. Pangilinan said.
“Consolidated electric revenues for the three months that ended March 2012 was at P65.1 billion, a 16-percent increase over the same period in 2011,” Meralco said.
Energy sales in the first quarter jumped 9.9 percent to 7,687 gigawatt-hours compared with the same period last year, said Meralco chief operating officer Oscar S. Reyes.
“Our net income went up mainly due to higher sales volume and customer count,” said Meralco chief financial Officer Betty Siy-Yap.
Meralco added 40,000 new customers in the first quarter, bringing the total to a record 5.07 million as of end-March.
Meralco, which is indirectly controlled by Hong Kong-based First Pacific Co. Ltd. and partly owned by San Miguel Corp., said industrial energy sales were driven by the businesses that are into food and beverage, steel and cement, and plastic and plastic products.
The commercial segment improved because of hotels, restaurants, schools and communications, while residential sales were driven by slightly warmer temperature and higher residential count, Reyes said.
Meanwhile, the company is maintaining its profit guidance this year as it waits for more development.
“I think it is too early to tell... April appears to be a good month but beyond that it is difficult to say. We are staying with the guidance of P15 billion for the moment,” Pangilinan said.
But Pangilinan said the approval of Meralco’s plan to recover local franchise taxes it paid will have favorable impact on earnings this year. Last month, the Energy Regulatory Commission approved as much as four centavos per kilowatt-hour in additional charge for Meralco’s local franchise tax payments.
For first half, sales might increase by around 10 percent but the rise might be tempered in the second half, said Alfredo S. Panlilio, senior vice-president of Meralco.  source

No power shortage in Negros Oriental

Sunstar Dumaguete
By Victor L. Camion
Friday, April 27, 2012
BOTH power producer and distributor issued an assurance that there will be no power shortage in Negros Oriental.
Energy Development Corporation (EDC) public relation officer Noreen Bautista told Sun.Star that they will continue to operate the power plants 24 hours, seven days a week.
EDC is a sister company of the Green Core Corporation owned by the Lopezes Group of Companies.
EDC is operating the geothermal energy while Green Core is operating the power plants formerly owned by the National Power Corporation (Napocor).
Meanwhile, a top official of the Negros Oriental Electric Cooperative II (Noreco II) said that aside from Green Core Corporation, they have a contract between the Cebu-based power producers Kepco.
Noreco II general manager Dionefred Macahig said in case Green Core will meet power shortage, Kepco can produce power that can be distributed to power subscribers.
Macahig issued an assurance following apprehension that Negros Oriental has experienced power shortage after the series of brownouts in the huge part of Noreco II’s area of jurisdiction.
He explained that the power interruption experienced by the Noreco II consumers is not due to power shortage but due to the problem met by the National Grid Corporation of the Philippines (NGCP).
The transmission line of the NGCP in Amlan-Siaton connection was toppled down after a bamboo pole tumbled down the cooper wire causing the brownout.
An almost an hour brownout affected the residential and industrial consumers from Amlan, Sibulan, Dumaguete City, Bacong, Valencia, Dauin and Siaton.
Another round of brownout was experienced by Noreco II consumers in Dumaguete City on Wednesday afternoon.

Aboitiz invests P35B to increase capacity

By Nelson C. Bagaforo
Friday, April 27, 2012
ABOITIZ Power Corp. is bent on increasing Mindanao's power capacity by 354 megawatts (MW) in the next three years to help address the criticial power shortage on the island.
The power company, according to its president and CEO Erramon Aboitiz, will pour in a total investment of P35 billion until 2015 to achieve this.
"More investments and a competitive environment will ultimately lead to adequate, reliable and reasonable power supply needed to power Mindanao's growth," Aboitiz said in a briefing Thursday.
He said the additional capacity, which is expected to fill Mindanao's large power deficit, will come from the proposed 300-MW clean coal facility of Therma South Inc., which will be set up at the boundary of Binugao in Davao City and Inawayan in Sta. Cruz, Davao del Sure, and 54-MW of run-of-river hydro plants of Hedcor Inc.
Therma South and Hedcor are wholly-owned AboitizPower subsidiaries.
"There is an urgent need to implement a viable power strategy for Mindanao that will attract long-term investments in power, diversify the power sources and create a competitive supply market. Let us learn from the past and not provide band-aid solutions or even worst, solve the problem with expensive solutions that will hound us in the future," Aboitiz said.
Mindanao currently needs around 1,597 MW daily, but existing capacities produced by power sources on the island can only produce 1,261 MW as of April.
More than half of the power plants in Mindanao source their energy from the Agus and Pulangi hydro stations, which are no longer capable of generating power based on their original installed capacity.
Aboitiz said the biggest challenge for Mindanao is its heavy dependence on hydro sources of energy. He said there is a need to diversify Mindanao's power sources and lessen its dependence on hydro power.
"We think what needs to be put in place is a competitive and transparent environment where new capacity will complement the existing hydro plants of the NPC (National Power Corporation)," he said.
To cushion the effects of the current crisis, Aboitiz Power subsidiary, Therma Marine Inc. (TMI), is running its 200-MW oil-fired power barges moored in Nasipit, Agusan del Norte and Maco, Compostela Valley in Davao. It provides 192 MW to 23 electric cooperatives, distribution utilities and industrials on the island.
According to Aboitiz, TMI is the cheapest and the most efficient oil-fired power facility in Mindanao today with an average rate charged to its customers at P8.29 per kilowatt-hour.
He said 90 percent of TMI's rates are for fuel and other consumables, which are not retained by the company.
The remaining 10 percent of its revenue is used to pay for fixed costs, such as salaries, insurance, repairs and maintenance, and debt service, with any residual amount representing the company's return on its investment.
"Our long-term investments in both power generation and distribution in Mindanao are a testament to our commitment to be part of the economic development of the region. We have been in Mindanao since the 1930s and want to continue to be part of its future growth," Aboitiz said.
"Aboitiz Power is committed to support this growth by providing reliable, reasonable and responsible power supply," he added.
Published in the Sun.Star Davao newspaper on April 27, 2012.  source

APC to put up 4 Mindanao plants worth P35B

But exec warns power supply crunch still criticalBy: Amy R. Remo
Philippine Daily Inquirer

Aboitiz Power Corp. is investing P35 billion in four new power generation facilities that can add another 354 megawatts (MW) of power to the Mindanao grid by 2015.
The move is expected to ease the critical power supply crunch on the island, APC president and CEO Erramon I. Aboitiz said in a briefing Thursday.
The additional capacity, which is expected to fill Mindanao’s large supply deficit, will primarily come from the 300-MW clean coal facility of the company’s subsidiary, Therma South Inc., Aboitiz explained.
The remaining 54 MW will come from the 14-MW Tudaya, 12-MW Tamugan and 28-MW Sita-Simod hydropower projects, which will be undertaken by another wholly owned subsidiary, Hedcor Inc.
“Our long-term investments in both power generation and distribution in Mindanao are a testament to our commitment to be part of the economic development of the region. We have been in Mindanao since the 1930s and want to continue to be part of its future growth,” Aboitiz said.
But he warned that Mindanao’s power supply woes would continue until 2015, when the company’s power projects, among the other committed power projects lined up in Mindanao, have started commercial operations.
Currently, Mindanao needs around 1,597 MW daily. But existing facilities on the island can only provide 1,261 MW as of April this year. More than half of the electricity requirements in Mindanao are being provided by the Agus and Pulangi hydropower facilities, which are only generating 641 MW out of the original installed capacity of 982 MW.
This was why Aboitiz stressed the need to put in place several “medium-term solutions to solve medium-term problems,” or within the next three years, and to start implementing long-term solutions to ensure sustainable and adequate power supply in Mindanao.
“There is an urgent need to implement a viable power strategy for Mindanao that will attract long-term investments in power, diversify the power sources, and create a competitive supply market. Let us learn from the past and not provide band-aid solutions or, even worse, solve the problem with expensive solutions that will hound us in the future,” Aboitiz said.
For the medium-term solutions, Aboitiz suggested for the government to rehabilitate and transfer to Mindanao the three power barges currently moored in the Visayas; rehabilitate and operate the Iligan diesel power plant, which can generate 60 MW to 100 MW; and rehabilitate the Agus and Pulangi hydropower plants as well.
For the long-term solutions, Aboitiz said the government must ensure a conducive business environment that would enable a competitive and transparent power landscape; build more coal plants to secure baseload capacity and to diversify the island’s power sources; and connect the Visayas and Mindanao grids to enable the transport of electricity across the country. source

Forum Energy seeks partners

Philippine Daily Inquirer
Forum Energy PLC is shopping around for potential partners in the exploration and development of the Recto Bank, which is estimated to hold about 16 trillion cubic feet of natural gas.
In a briefing Thursday, Philex Mining Corp. chairman Manuel V. Pangilinan said there was a need to tap more experienced companies as it would require billions of dollars, expertise and marketing power to be able to bring the Recto Bank into commercial production.
Philex Mining, through its subsidiaries FEC Resources Inc. and Philex Petroleum Corp., holds 64.45 percent of the issued capital of Forum Energy.
Forum Energy, meanwhile, holds a 70-percent stake in Service Contract 72, which covers Recto Bank. The remaining 30 percent is held by Monte Oro Resources Energy.
Forum Energy recently announced an increase in the estimated reserves within its contract area to 16 trillion cubic feet from previous estimates of 3.4 trillion.
Such a huge reserve is enough to supply the country with natural gas for the next 100 years, according to Energy Secretary Jose Rene D. Almendras.
Pangilinan, however, admitted that pursuing exploration and development work would be a challenge.
“There’s always that possibility [of delay] because of political concerns. Issues are being raised between Philippines and China, and there are other claimants as well so that has to be sorted out. There’s a possibility of delay if Chinese gunboats appear on the horizon,” Pangilinan said.—Amy R. Remo   source

Recto Bank: ‘black gold’ mine said worth $26.3t

Friday, 27 April, 2012 Written by Alena Mae S. Flores
An air force commander who conducted a study on the amount of oil deposits in the Spratly group of islands said the area was a “gold mine of untapped hydrocarbon deposits” with an estimated value of $26.3 trillion.
Brig. Gen. Eldon Nemenzo, deputy commander of the Philippine Air Force’s 3rd Air Division, said the oil deposits were mostly contained in the Recto Bank, also known as Reed Bank, and the Mischief Reef in the Kalayaan group of islands in the West Philippine Sea  known as the Spratly’s.
“The Philippines is like a blind beggar sitting on a mountain of gold,” said Nemenzo whose research was submitted as a thesis requirement for an advance course in the Air Force’s Command and Staff College.
The Spratly’s  is a group of more than 750 reefs, islets, atolls, cays and islands that lie off the coast of the Philippines and Malaysia. They contain less than four square kilometers of land area spread over more than 425,000 square kilometers of sea.
China, Vietnam, Taiwan, Malaysia, Brunei and the Philippines claim ownership of the area. Other than the vast reserves of oil and natural gas, the Spratly’s is a rich fishing ground.
Nemenzo said the deposits were mainly located within the 200 nautical-mile Exclusive Economic Zone and the Philippine continental shelf, but the country could not tap into the deposits because of its dispute with other countries.
“Investors were hesitant because the government could not guarantee security,” Nemenzo said.
The oil deposits in the Spratly’s could reach 17.1 billion barrels, and the same figure was contained in a report made by China’s Ministry of Geology and Mineral Resources, he said.
A local company, Forum Energy, has made preparations for exploratory drilling in the Recto Bank, which officials said was scheduled to start this year or early next year.
Manuel Pangilinan, chairman of Philex Mining,  the majority shareholder of Forum Energy, said the company was open to talks with Chinese companies for a possible partnership in the development of the Sampaguita gas field.
The gas field refers to the area awarded by the government to the company known as SC 72, which covers 8,800 square kilometers in the west Palawan offshore.
Pangilinan said extracting oil and gas at the Recto Bank would require an investment of about $2.5 billion, which explained why they were looking for an investor with expertise and marketing power.
“That is a solution. I think we should be talking to Chinese companies,” Pangilinan said when sought for commend on Thursday.
He said their exploratory drillings might be delayed because of the on-going tension between the Philippines and China.
“There’s always that possibility [of delay] because of political concerns. Issues are being raised between the Philippines and China, and there are other claimants. There’s a possibility of delay if Chinese gunboats appear on the horizon,” Pangilinan said.
Pangilinan said the rigs and survey ships they used for their exploration work were owned by other countries “and they don’t want to get involved in any kind of regional conflict, so they may leave.”
“We’d like to stick with our work program and schedule. We need to build up our resources as soon as possible. It takes a while to develop a gas field, like six to 10 years, so any delay will push that schedule back,” he said.
Energy Secretary Jose Rene Almendras said the Philippines started drilling five wells in the area in 1976 and “it was only in 2007 that other countries started asking questions.”
“We have records and proof, and that is precisely why we call the place Sampaguita,” Almendras said. -- Ben Cal
(Published in the Manila Standard Today newspaper on /2012/April/27)   source