Thursday, September 29, 2016

PSEi rebounds as mining stocks recover

By Iris Gonzales (The Philippine Star) | Updated September 29, 2016 - 12:00am

MANILA, Philippines – Share prices closed higher yesterday, buoyed largely by the recovery in mining stocks, analysts said.
Mining investors cheered the results of the Department of Environment and Natural Resources (DENR)’s audit which cleared some mining companies.
The benchmark Philippine Stock Exchange index (PSEi) gained 29.62 points, or 0.39 percent, to finish at 7,586.96.
Similarly, the broader All Shares index rose 21.48 points, or 0.47 percent, to close at 4,517.41.
All sectoral indices closed in positive territory except for the industrial index, which plunged 11.37 points or 0.09 percent to finish at 11,805.88.
Total value turnover reached P6.40 billion as advancing stocks beat decliners, 116 to 64 while 50 issues were left unchanged.
DENR said 11 mining companies passed the audit. At the same time, it said 20 companies need to “get their acts together.”
The 11 mining companies that passed the audits are Pangilinan-led Philex Mining Corp.; Nickel Asia Corp.,’s Rio Tuba, Nickel Corp., Cagdianao Mining Corp. and Taganito Mining Corp; Atlas Consolidated Mining and Development Corp.; Techiron Resources Inc.; Platinum Group Metals Corp.; Philsaga Mining Corp.; Greenstone Resources Corp.; Apex Mining Co. Inc. and Pacific Nickel Philippines Inc.
During yesterday’s session, the best performers include Bloomberry Resorts Corp., up 6.03 percent; SM Prime Holdings Inc., up 2.22 percent; and Megaworld Corp. up 1.76 percent.

Weaker peso, higher coal prices to hike power rates

By Danessa Rivera (The Philippine Star) | Updated September 29, 2016 - 12:00am

MANILA, Philippines – A weaker peso and higher coal price could pressure electricity rates up in the next billing periods, Manila Electric Co. (Meralco) said.
These are the two factors that could put pressure on generation cost in the coming months, Meralco senior vice president and head of utility economics Larry Fernandez said on the sidelines of a Senate hearing yesterday.
“One is the depreciation of the peso, many of the inputs to generation cost are dollar denominated, so any depreciation of the peso can have an impact on the generation cost,” he said. “Second, we noticed increases in coal price. If this continues, it might affect the generation charge.”
Fernandez said these are factors affected by world events like the exchange rate and coal prices.
The peso breached the 47 to $1 level on Sept. 11 and more recently the 48 to $1 level on Sept. 26, the local currency’s weakest level in seven years.
Meanwhile, Meralco gets 37.1 percent of supply from coal power plants, based on its first half report.
With the volatility in the global scene, the Meralco official said it is still difficult to determine the trend in the coming months, particularly in October, since the power distributor has yet to receive billings from power generators.
“We need to see if they will already compute the foreign exchange effect and the more updated coal prices in their bills to us,” Fernandez said. “But we are continuing to monitor the fuel prices and the foreign exchange rate.”
Currently, Meralco’s overall rates are at record lows. “I think the pressure is to keep it where it is but there are already pressures for a slight increase in generation cost,” Fernandez said.
Meralco recently announced a reduction of P0.0451 per kilowatt-hour (kwh) in overall rates to P8.46 per kwh, lower compared to September 2015’s P8.55 per kwh.
For the period, the lower transmission charges helped offset the higher generation charge caused by instances power supply shortage during the supply month.

Ex-DOE exec faces raps for swindling contractor of P6.59 million

By: Vince F. Nonato 05:30 AM September 29th, 2016

State prosecutors have filed criminal cases with the Sandiganbayan against a former Department of Energy (DOE) executive for allegedly defrauding a contractor of P6.59 million in exchange for a solar street lighting deal that never pushed through.

Dismissed DOE Assistant Secretary Matanog Mapandi, and his consultants Myrna Almonte and Francisco Merilles, were charged with 21 counts of estafa by means of deceit for allegedly taking advantage of CHA Construction & Supply contractor Elizabeth Sibulo in 2009 and 2010.

Mapandi and his consultants allegedly misled Sibulo into thinking they could help her construction firm secure the P50-million project in Magarao, Camarines Sur, according to the charge sheet by the Office of the Ombudsman’s Office of the Special Prosecutor on Friday.

However, it turned out that Mapandi did not have the authority to award the project. The department also ended up shelving the proposal when the administration changed in 2010.

No power
“In truth and in fact and as the accused knew fully well, they had no such power and influence in the approval and release of the P50-million solar street lighting project and that the same was disapproved by the DOE, thus causing damage and prejudice to Elizabeth DS. Sibulo in the amount aforestated,” the charges read.

Prosecutors recommended that bail be fixed at a total of P566,000 for the 21 counts of estafa.

Estafa by means of deceit is punishable by a maximum of 20 years’ imprisonment.

Mapandi was earlier dismissed by the Ombudsman in May 2015 after he held administratively liable for soliciting money from Sibulo.

Miners rap ‘trial by publicity’

Posted on September 29, 2016

THE ORGANIZATION of miners in the country yesterday hit the Environment department’s release ahead of formal notice to companies results of its two-month audit, arguing besides that the government may not yet comprehend the economic impact of its treatment of the industry.

Benjamin Philip G. Romualdez, president of the Chamber of Mines of the Philippines (CoMP), decried what appears to be a “trial by publicity” of mining companies in the way the Department of Environment and Natural Resources (DENR) on Tuesday announced those found deficient even before individual firms were formally notified on Wednesday.

“We haven’t seen the audit results yet; that’s why we’re curious with the results being so public. The results of the audit have been made public before they were even presented to us, so it seems like there is a trial by publicity,” Mr. Romualdez told reporters on the sidelines of an economic forum of the ADR Institute yesterday.

“You haven’t even gotten letters, then there’s a statement of suspension,” he noted.

“We lament the way it’s being handled. We understand the passion of the (Environment) Secretary (Regina Paz L. Lopez), but hopefully we can have more collaborative working relations between the minerals industry and government who is our main partner,” he added.

“We are not the enemy here.”

The department on Tuesday named 20 more metal mines facing suspension due to various violations under a nationwide audit that started in July, among them the lack of tree cutting permit, unregistered treatment facilities, as well as incorrect storage and disposal of tailings.

Those add to 10 other mines suspended earlier.

The additional 20 will be given a chance to explain why their operations should not be suspended and a final decision on their fate could be reached in two weeks, DENR officials had said.

That brings to 30 the total number of mines that risk being shuttered, out of a total of 41 such facilities spread across the country.

Global nickel prices have see-sawed since President Rodrigo R. Duterte announced soon after he took office on June 30 an impending crackdown on mines deemed irresponsible to the environment and host communities. The Philippines is the world’s biggest nickel exporter. Of the 30 mines either facing suspension or whose operations have already been halted, 18 are nickel producers that account for 55.5% of the country’s total output in 2015.

Mr. Romualdez, who sits as president and chief executive officer of Benguet Corp., also questioned audit procedures. Subsidiary Benguet Corp. Nickel Mines, Inc. was suspended in the earlier days of the audit and the parent itself risks the same fate.

“The conduct of audit was a bit suspect even the beginning. The person in charge of audit was actually the Mines bureau director for the past six years so there’s a conflict of interest and a bit of confusion,” Mr. Romualdez also said during the forum, referring to DENR Undersecretary Leo L. Jasareno, who led the Mines and Geosciences Bureau under former President Benigno S. C. Aquino III and who supervised the recent industry-wide audit.

“What we’re wondering today is what was seemingly okay for the past six years is now suddenly not okay?”

Mr. Romualdez likewise questioned the involvement in the audit of civic group Alyansa Tigil Mina (Alliance to Stop Mining).

In a statement sent to journalists yesterday, CoMP separately criticized DENR’s “rash public pronouncements.”

The statement quoted Ronald S. Recidoro, the group’s vice-president for Legal and Policy Division, as saying that ‘[r]eputations have been damaged.”

“To be clear, none of these companies are suspended. But the pronouncements yesterday gave the impression that the companies named have already been suspended.”

He also warned that “[t]he audit findings have serious impact not only on our present mining projects but also upcoming projects,” referring to $22 billion already in the pipeline.

Latest DENR data show that mining has contributed up to 0.7% to gross domestic product, 4.8% to total merchandise exports and up to 0.6% to total jobs, while CoMP itself said the industry employs some 75,000 workers. -- Melissa Luz T. Lopez with J. C. Lim

ERC defers approval of 9 power supply agreements- Due to DENR’s concerns

by Madelaine B. Miraflor September 28, 2016

Responding to the concerns of Department of Environment and Natural Resources (DENR) regarding the issuance of Environmental Compliance Certificates (ECC), the Energy Regulatory Commission (ERC) has delayed the approval of as much as nine power supply agreements and contracts.
A document showed that ERC “resolved to hold in abeyance” the processing of pending applications for approval of power supply agreements without the required ECC from DENR.
“The Commission received a letter from the DENR informing it of the ongoing re-evaluation of the Environmental Compliance Certificates and further requesting that the Commission suspend the process of approvals of any power supply agreements pending before it in light of this re-evaluation,” ERC said in an order.
“The Commission shares the DENR’s concern in ensuring the protection of the environment and is determined to help safeguard the people’s right to a balanced and healthful ecology in accordance with the Constitution,” it added.
In separate files, ERC decided to put on hold the approval of the Power Supply Agreements (PSA) between Mariveles Power Generation Corporation (MPGC) and five companies including Manila Electric Co. (Meralco).
“Relevantly, the initial evaluation of the above-captioned application, together with its annexes disclosed that that the Mariveles Power Generation Corporation has not yet secured an ECC for the power plant subject thereof,” ERC said.
“The foregoing considered, the processing of the instant application is hereby held in abeyance,” it further said.
Other companies that MPGC would like to have separate PSAs and Power Supply Contracts (PSC) with are: Global Luzon Energy Development Corporation (GLEDC), Tarlac I Electric Cooperative, Inc. (TARELCO I), Aurora Electric Cooperative, Inc. (AURELCO), and Pampanga II Electric Cooperative, Inc. (PELCO II).
ERC also didn’t give the green light to the PSA between Palawan Electric Cooperative, Inc. (PALECO) and Delta P, Inc. (DELTA P) as well as between Cagayan Electric Power and Light Company, Inc. (CEPALCO) and Minergy Power Corporation (MPC).
Because of the same reason, ERC haven’t yet allowed Misamis Oriental II Electric Service Cooperative, Inc. (MORESCO II) and Astronergy Development Mindanao, Inc. (ASTRONERGY) to proceed with their Renewable Energy Supply Agreement.
ERC likewise hold its go signal to the Electric Power Purchase Agreement for the Unit 2 between the Iloilo I Electric Cooperative, Inc. (ILECO I) and Palm Concepcion Power Corporation (PCPC).