Biz Buzz: ‘Midnight energy policy’
SOMETHING is afoot at the Department of Energy.
At least that’s what a number of energy industry stakeholders believe amid the seeming rush by outgoing Energy Secretary Zenaida Monsada to proceed with the approval of what is called the Renewable Portfolio Standard (RPS).
RPS is basically a rule that will effectively require that renewable energy make up no less than 35 percent of the country’s power mix at a future date (to be escalated incrementally over a few years until the desired level is achieved).
That’s great news, right? Well, not necessarily, according to some industry players who want the decision on RPS deferred until the new administration steps in.
You see, to meet the 35-percent renewable energy goal for the entire country, about 50 percent of all new applications for power projects will have to be in the form of renewable energy. The effect will be sharply higher electricity costs for everyone in the country, even for consumers who use zero renewable energy (because they will be subsidizing the consumption cost of others being serviced by renewable power sources).
“This will cause havoc on power rates,” said one industry stakeholder, who called the proposed DOE policy a “clear midnight deal.”
These stakeholders complain that they were only notified about Thursday’s consultative meeting that was hosted by the DOE at the Shangri-La Hotel at Bonifacio Global City one day ahead. The draft of the proposed policy was sent to them only the evening before, giving them almost no time to review the document and prepare their positions.
When they got to the consultative meeting on Thursday, one witness noted that almost half of the invited guests came from the renewable energy sector, practically ensuring that more favorable opinions will be heard.
All these will have to be processed, approved and published within the last 14 days before this administration relinquishes power to incoming President Duterte.
“The right thing to do regarding a policy this significant is to just wait for the next administration to decide on it,” said one official of an energy company. “We’re talking about just two weeks. What’s the rush?”
Well, apparently, the rush is that a large company which is heavily invested in renewable energy wants this policy set in stone … for its own benefit, of course.
And that’s not all. Biz Buzz heard the present DOE dispensation is trying to rush at least three more policies, before incoming Energy Secretary Alfonso Cusi takes over the helm of the department. Tsk tsk. Daxim L. Lucas
Gaming Play
SOMETHING is brewing with Bloomberry Resort Corp.’s hotel-casino operations in Jeju Island, which has recently been a drag on its financial profile. And this is why shares of Bloomberry have sizzled in the stock market, sending positive tidings to other local gaming peers.
On Thursday, Bloomberry shares surged by 7.36 percent. According to the grapevine, Bloomberry is in the thick of discussions to sell the Jeju business, thereby eliminating the drag on its operations. But selling could just be one of the options available to plug the financial hemorrhage from South Korea. During the company’s recent stockholders meeting, Bloomberry chair Enrique Razon Jr. had said the group was hoping the Korean operations would be profitable within the year. Indeed, bets have risen that favorable change is coming for Bloomberry’s Korean venture.
Even as China continues to crackdown on the flow of dirty money, the surge in gaming stocks may also indicate expectations of rosy second quarter earnings outlook for Bloomberry, developer and operator of Solaire Resorts & Casino. Meanwhile, Melco Philippines—which owns half of the operations of City of Dreams Manila – also gained by 4.84 percent on Thursday while Resorts World Manila operator Travellers International Hotel Group Inc. rose by 0.89 percent.
Is gaming back for good? A lot will depend on how the incoming President Rodrigo Duterte will address the diplomatic chill with China, the region’s biggest source of VIP/junket players. Doris Dumlao-Abadilla
Bread shortage?
THE ENTIRE Panay island, which includes the provinces of Iloilo, Aklan, Antique and Capiz, and parts of Negros and Cebu are facing a possible bread shortage if flour deliveries in the area will be delayed.
Local bakers in Bacolod told Biz Buzz that their flour inventory will be severely affected unless quick deliveries are made by local distributors.
Ironically, the anticipated short supply is not because of hoarding or a global flour shortage. It was due—believe it or not—to a severe port congestion in Iloilo City. The long queue reportedly prevents a huge foreign vessel from docking and quickly unloading more than 25,000 metric tons of wheat destined for milling and distribution in Western and Central Visayas.
The same sources say a lot of finger pointing has been going on in the Port of Iloilo. Talk in port circles indicate that officials of the Philippine Ports Authority (PPA) have remained indifferent to the snail-paced unloading of cement in the pier which has led to long queue of wheat and grain vessels waiting for a chance to dock. In the meantime, these foreign ships were forced to drop anchor and have been waiting for almost two weeks at sea for their turn to approach the berthing area.
Local agriculture officials opine that food items always take a higher priority in port unloading over construction materials. But the way things are going at the port of Iloilo, it seems the other way around. Unless something drastic is done to hasten the unloading of flour and other food products at the Port of Iloilo, incoming President Rodrigo Duterte would have to face hungry and angry Visayans by the time he takes over the helm of government on July 1. Daxim L. Lucas
Wanted: a more luxurious presidential suite
IT COST the SM group the handsome sum of P6.5 billion, but the retail conglomerate is not quite done yet with its newest project in the tourism space, the 347-room Conrad Manila.
The six-star hotel—managed by Conrad Hotels and Resorts, the high-end brand of the Hilton Worldwide group—was originally slated for soft opening as early as March of this year.
But Biz Buzz learned from no less than Hans Sy that they had to push back the launch date of the newest hotel in the Manila Bay area because he wanted some aspects of the project redone.
Specifically, Sy—who heads SM Prime Holdings Inc., the real estate arm of the SM group—felt they could do a better job in the poshest part of the hotel, the presidential suite.
“When I saw it, I said we should improve it further,” he told Biz Buzz during Thursday’s opening ceremonies. “The presidential suite is the flagship product of a hotel, and I felt we should have the best to reflect our market position.”
And so the presidential suite was redesigned to make it even more upscale. In fact, the remodeling work is not yet done, but they decided to launch the hotel anyway, since market anticipation was already running high since late 2015.
According to Sy, he has no doubt that it will be the best presidential suite in that part of the metropolis once it is completed. That’s a tall order given that Solaire Resorts and Casino and the City of Dreams complex are situated nearby, both with luxury hotels boasting of their own presidential suites.
Apart from the avant garde architecture (also a departure from the traditional SM designs), Conrad Manila boasts of its own upscale mini mall at its lower levels, filled with stores offering luxury brands.
In any case, last Wednesday’s ribbon cutting ceremonies were a relatively low-key affair in what was a departure from the usual practice of inviting VIPs to grace the opening. There were no ranking government officials present either, much less President Aquino, whom conglomerates usually invite to the launching of big undertakings.
Who knows? Maybe after June 30, the new President can inaugurate the new presidential suite and enjoy all of its 400-square meter luxury, right? Daxim L. Lucas
Underground insurance
LIKE how some people tend to self-medicate instead of seeing a doctor, some companies—typically those with a smaller, looser corporate structure—tend to self-insure.
This was uncovered as early as 2010 during the term of the late Insurance Commissioner (IC) Eduardo Malinis, who reported that there were private entities including non-profit organizations registered with the Securities and Exchange Commission providing insurance products and/or undertaking informal risk protection schemes to their clients/members without the required certificate of authority from the IC.
Self-insurance or informal insurance schemes without the requisite authority are deemed exposed to certain risks, especially as these organizations may not have the actuarial expertise to do such financial services on the side. As such, all entities involved in microinsurance are required to secure a certificate of authority from IC before they offer their employees any insurance-like protection.
In IC circular dated May 27, 2016 addressed to all insurance companies and mutual benefit associations (MBA), the IC seeks to find out whether the earlier crackdown on informal insurance had been effective. After all, the deadline for termination of informal insurance and insurance-like activities was on Dec. 31, 2011.
All insurance companies and MBAs doing business in the Philippines were thus enjoined to submit a list of organizations they insure, the type of insurance products (against death, injury and illness, loss of property and other contingent events) as well as the number of members or clients covered.
“It is the intention of the Insurance Commission, Cooperative Development Authority and Securities and Exchange Commission to obtain an update on the effectiveness of all circulars concerning the formalization of all informal insurance activities,” the new circular said.
The message is clear: it’s time to see a professional. Doris Dumlao-Abadilla
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