Power sector staring contest

RAFFY LERMA

In the aftermath of the massive (albeit short, thankfully) power outage that sent Metro Manila and surrounding areas into darkness some three weeks weeks ago, fingers were immediately pointed by energy industry stakeholders among themselves as to whom was to blame for the blackout.

The immediate cause of the one-hour  20-minute outage on the evening of Nov. 15 was initially blamed on the power plants of Lopez-owned First Gen Corp. after Meralco pointed in the direction of the Batangas-based generation plants that tripped automatically as an emergency measure (thus shaving as much as 1,600 megawatts off the power-hungry Luzon grid).

Soon after, however, First Gen—backed by preliminary reports from the Department of Energy—was already pointing at a fault in the facilities of National Grid Corporation of the Philippines (NGCP), which operates the country’s entire electrical transmission system. In particular, it pointed toward a failure in NGCP’s San Jose substation in Bulacan as the reason for the preemptive shutdown of First Gen’s power plants.

So what’s the truth? Based on what Biz Buzz has heard from power sector stakeholders, it would seem there is enough blame to go around.

For one, it is true there was a problem in NGCP’s Bulacan substation. Specifically, one of the four capacitors installed there (to keep voltage levels in the entire grid on an even keel) did burn out. This caused a sudden power fluctuation that, when sensed by the power plants in Batangas, automatically cut off supply to prevent damage to themselves.

Well and good.

As it happened, however, NGCP’s system had a second line of defense that would have kicked in to smoothen out the power fluctuation had the power plants kept pumping out electricity. But this fail-safe mechanism didn’t have the chance to come into play, precisely because the plants— in their eagerness to safeguard the system—had already cut supply.

“This could have been prevented if only both sides were more coordinated,” the Biz Buzz source said. “There needs to be more coordination between the power plants and grid operator.”

Certainly, no one wants to see another major power outage, and certainly not for something as minor as a busted capacitor, especially since a backup safety system was in place. The question now is, who will adjust to whom? Do they adjust to the specifications of the national transmission system? Or does the transmission system adjust to the specifications of the 200-odd power generators around the country? —DAXIM L. LUCAS

The business point of view

Believe it or not, a significant number of business personalities are quite open about expressing their support for the Duterte administration judging by the chatter during the ongoing holiday party circuit.

And if these same businessmen and women are to be believed, 2017 will probably be another good year on the economic front.

These “captains of industry” are not easy to impress, but the pronouncements coming from them is near-unanimous in forecasting a positive picture for the local economy over the near term. More importantly, one ranking international banker Biz Buzz spoke to confirmed that many investors overseas have a positive view of the current administration six months into Duterte presidency. (It’s a little difficult to believe in the light of the local static, but it’s true.)

After initial apprehensions eased, the same business personalities started praising President Duterte for not kowtowing to the US.

Even those who had misgivings about US-Philippine relations turning south are now upbeat after the unexpected electoral victory of US President-elect Donald Trump (and even more so after Duterte and Trump spoke on the phone recently).

There’s also the $50 billion in government and private loans and investments that the President was able to secure during his visit to China, the $2 billion-worth of agriculture deals from Russia and  pledges secured from Vietnam, Thailand, Brunei, Japan, Malaysia and New Zealand.

Of course, there are concerns among business people on the issue of extrajudicial killings, as well as on the political front, especially after Vice President Leni Robredo was removed from the Cabinet (many of them say they aren’t surprised by the move). But, these concerns are shared in whispers (while praise is aired loudly).

So what’s the business community’s main concern? It’s the same as before: the country’s poor infrastructure, and they hope the President’s team will live up to its promise to do something about it.—DAXIM L. LUCAS

Razon on Cha-Cha

Tycoon Ricky Razon has no qualms about amending the Philippine Constitution. “What’s great about it, anyway?” he said at the Pilipinas 2016 Conference on Thursday, eliciting laughter from the audience.

Razon, however, is not too keen on the shift to federalism, which allows greater devolution of decision-making. He prefers a parliamentary system (which ideally, however, requires a strong party system with clear ideological demarcation as opposed to personality-based politics).

Asked whether he’d ever toy with the idea, Razon said said he’d never consider running for Prime Minister under a parliamentary Philippines.  “I’m on the authoritarian side of things,” he said in jest (or maybe not).

On unorthodox president Rodrigo Duterte, Razon said: “I’ve met many leaders in the world. He looks pretty normal now.” —DORIS DUMLAO-ABADILLA

New SEC commissioner

A CPA-lawyer from Mindanao is making a major comeback to the Securities and Exchange Commission as the newest member of its policy-making body.

Zamboanga City-based Emilio Benito Aquino was recently appointed by President Duterte as SEC Commissioner, replacing Manuel Huberto Gaite whose term expired last March 11.

Aquino is no stranger to the corporate watchdog, having served the SEC from 1993 to 2005 in various positions. He headed SEC Davao extension office and SEC Zamboanga extension office and later, director of the prosecution and enforcement department, director of the nontraditional securities and instruments department, and director of the compliance and enforcement department.

Aquino earned his accounting degree from Universidad de Zamboanga (magna cum laude), graduating at the top of his class. He attended the San Beda College of Law and placed 16th in the 1992 bar exams.

Under a government scholarship, he earned his Master’s Degree in Public Management at the Development Academy of the Philippines. He completed the Management Development Program of the Asian Institute of Management and studied at the  University of Sydney where he was conferred a Certificate of Study on Effective Governance. —DORIS DUMLAO-ABADILLA

Lexus’ new star

Lexus Philippines—one of the fastest-growing luxury auto brands in the country—has moved to strengthen its dominance of the high-end compact car segment when it introduced the jaw-dropping 2017 edition of the IS 350 sedan to the local market.

If you think the current year’s model was good, next year’s edition (already available) is even more mouthwatering from all aspects: visually, outside the vehicle; inside, with its luxurious interiors, and under the hood, with its powerful engine.

Lexus Philippines boss Danny Isla is confident the new model can easily surpass the sales figures of the 2016 IS 350 model, which, in itself, is already one impressive vehicle. Company officials disclosed that a total of 442 of these machines have so far been sold in the Philippines and all indications point to the 2017 model doing even better, despite the slight price increase.

According to Isla, the standard IS 350 would go for slightly under P2.7 million, while the fancier IS 350 F Sport version would be sold for a little under P3.2 million—both higher by some P100,000 compared to the earlier year’s model.

Lexus has a ready inventory of IS 350s on hand, and the longest time a buyer would have to wait is about two weeks in case there’s a particular color he’s after.

As a general rule, he said, price increases did not deter Lexus buyers, as evidenced by the strong demand for its highest-end SUV, the LX series. As it stood, buyers of this particular machine already had to endure a long queue, but—to his amazement—the waiting list among its VIP buyers grew even longer after the company raised prices substantially to P7.6 million.  Apparently, its Lexus’ customers know something non-owners don’t. —DAXIM L. LUCAS

Integration goals

It looks like we’re moving closer to a truly integrated payment card platform, the likes of which are seen in more advanced economies. AF Payments Inc., a company backed by Ayala Corp. and Metro Pacific Investments Corp., will launch today a partnership with convenience store Family Mart.

Basically, the deal will allow people to use their Beep cards to buy items at the popular Japanese chain, brought here by the Ayala Group and partner SSI Group.

Of course, the Beep is the “tap and go” card commuters use at all elevated train lines in Metro Manila. It was the product of a successful public-private partnership (PPP) project, the Automated Fare Collection System, bid out under the previous administration.

The vision was to extend the use of the Beep card to other transport and retail platforms, much like Hong Kong’s Octopus card.

That would spell both profit for the company and convenience for the average commuter. —MIGUEL R. CAMUS