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AC Energy to Build New Power Plants
by Philippine Resources - November 30, 2020
AC Energy Inc., the power unit of Ayala Corporation, may soon build new power plants in Luzon - with a combined capacity of 550 megawatts.
Documents submitted to the Department of Environment and Natural Resources stated that the power unit would develop a 150-MW diesel power plant in Mariveles, Bataan through Ingrid 2 Power Corp. A unit of AC Energy, Ingrid 3 Power, is also constructing a 400-MW diesel power plant project in Calaca, Batangas.
The Mariveles plant is estimated to cost P10 billion while Batangas at P17 billion, based on the documents.
Aside from these, AC Energy is also developing a 150-MW diesel power plant project in Pililla, Rizal, expected to be operational in 2021.
According to AC Energy president and chief executive Eric Francia earlier, they were considering an investment in technologies to complement renewable energy. “We believe the country will need more peaking and reserve, ancillary capacity…especially in a world where you inject more renewables,” he said.
Last November 27, AC Energy issued US dollar-denominated senior perpetual fixed-for-life (non-deferrable) green bonds totalling $300 million.
In a statement, Francia said, “We are very pleased to see the high level of investor confidence in AC Energy and the strong market response to our perpetual green bond, following our maiden green bond in 2019. We believe that this will power AC Energy in its pursuit to scale up renewable investments in the region as we continue the transition to a low carbon portfolio.”
AC Energy remarked it would use the net proceeds from the bonds to fund a tender offer and $400-million senior perpetual fixed-for-life notes callable in December 2022, and the balance to fund eligible green energy projects.
The bonds have a fixed coupon of 5.1 per cent. The issue represents the first Philippine fixed-for-life perpetual bond offering since November 2019. This is also the first public green bond out of the Philippines in 2020.
AC Energy Finance International Ltd, a wholly-owned subsidiary under a 2 billion dollar medium-term note program, issued the company-generated bonds, which the Philippine Securities and Exchange Commission has certified as ASEAN Green Bonds.
“We are grateful to have been met with such a positive reception among bond investors especially given the pandemic. This underscores the continued confidence investors have in AC Energy’s ability to execute in this challenging environment,” said AC Energy chief finance officer Cora Dizon.
AC Energy said the Green Bond Framework puts in place well-defined guidelines for the use of proceeds for renewable energy projects - with reporting commitments and comprehensive monitoring.
Philippine Resources - February 01, 2021
Infrastructure Spending Down In 2020
Spending on infrastructure went down in 2020.According to the data provided by Budget Assistant Secretary Rolando U. Toledo, infrastructure expenses were at P681-billion, 22.7% lower as compared with the previous year.State spending on these projects reached P276.1 billion and that infrastructure spending surpassed P225.5 billion. Toledo said that data included the total spending of the government on infrastructure, including the infrastructure components of transfers to local government units and subsidies or equities to government-owned and -controlled corporations (GOCCs).The realignment of funds last year because of the pandemic caused the government to slash the infrastructure funds. For this year, the budget is expected to reach P1.2 trillion or equal to 5.9% of GDP. “With a multiplier of 2.27, meaning every peso spent creates another P1.27, some 1.7 million jobs can be created to accelerate the recovery. Timely implementation of infrastructure projects will have the biggest impact on our recovery prospects,” said Chua.Emilio S. Neri, Jr., the lead economist at the Bank of the Philippine Islands (BPI), said that the underspending of the government may pose a downside risk to the 2021 rebound. “With businesses still struggling, the lack of fiscal support and public construction may stall the recovery and dampen the demand for capital goods,” Neri said.Oxford Economics said that quarantine restrictions should then be relaxed to allow infrastructure projects to continue.
Philippine Resources - February 10, 2021
DPWH and ADB Sign Agreement on Loan Application for Three Bridges in Marikina City
The Department of Public Works and Highways (DPWH) and the Asian Development Bank (ADB) have signed a Memorandum of Agreement (MoU) for the loan application of the construction of three bridges in Marikina City. Estimated to cost more than P9 billion in total, two of the bridges will be located in Marikina City: the J.P. Rizal–Lopez Jaena Bridge and the Marcos Highway–St. Mary Bridge (formerly J.P. Rizal–St. Mary Bridge). Meanwhile, the third will link Marikina City with Quezon City: Kabayani–Katipunan Avenue Extension Bridge (Marikina–Vista Real Bridge. With a length of 687 metres with a 460-metre main bridge, the J.P. Rizal–Lopez Jaena Bridge will cost P1.61 billion. While the Marcos Highway–St. Mary Bridge spanning 1,477 metres with a 330-metre main bridge will cost P5,74 billion, the Kabayani–Katipunan Avenue Extension Bridge will be priced at P1.81 billion. The latter has a total length of 940 metres with a 485-metre main bridge. According to the DPWH, the Unified Project Management Office (UPMO) Bridge Management Cluster and consulting firm Dasan JV are now working on the engineering designs of these bridges. DPWH also remarked that the local government units are fully supportive of these initiatives.
Philippine Resources - February 26, 2021
New Cebu Port Civil Works to Start Q2 2021
The civil works of the new Cebu international container port will start during the second half of 2021.This was revealed during the online 160th Maritime Forum of the Maritime League, Engr. Romel Pagarom, acting manager of CPA’s Planning and Monitoring Division, said that the groundbreaking of the NCICP is scheduled for August 16.The cost of the project is $118 million (roughly P5.9 billion) with around 35 months or approximately 3 years to build it, he said. But of course, there have been a few delays to the project. The National Economic and Development Authority (NEDA) in 2016 gave CPA, with the Department of Transportation (DOTr) as its lead implementing agency, the clearance to pursue the project. The construction of the project was supposed to start in 2018 but was pushed back to November 2020. Pagarom also added that they face several issues before proceeding with the civil works - Road-Right-Of-Way (RROW) acquisition which will connect the international port to the main road in Barangay Tayud (the MOA has already been drafted), and the need to work on the working visa of the South Korean consultants. Around P132 million is expected to be downloaded to Consolacion’s coffers if the agreement’s implementation would finally push through.“MOA was forwarded by Legal Service to the Office of the Secretary on January 20, 2021, for Sec. (Arthur) Tugade’s approval prior transfer of funds to the LGU of Consolacion. Thus, the PMU (Project Management Unit) will closely monitor the approval of the MOA and preparation of request for fund transfer of P132 million to LGU Consolacion,” said Pagarom.For the working visa of the consultants, project proponents will be sending out a reiteration letter to the Department of Foreign Affairs (DFA). Last January 20, 2020, DOTr issued the notice of award for the US$5.4-million consultancy services for the NCICP project to South Korea-based Yooshin Engineering Corporation.Some of the features of this new facility include a berthing facility with a 500-meter long quay wall that can host two 2,000 twenty-foot equivalent unit (TEU) vessels at the same time; operating facilities and structures for containers; a bridge and an access road; and a dredged waterway and turning basin.This will soon serve international cargoes and the current CIP will be transformed into a domestic port to address the decongestion problems.
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Philippine Resources - April 06, 2021
Philippines Unlikely to Fulfill China's Nickel Ore Requirements
Despite the resumption of many mining operations in the region, the Philippines is unlikely to fulfill China's nickel ore requirements, according to an S&P report. Philippine mined nickel production is expected to increase over the next five years, according to an S&P Global Market Intelligence industry survey, as producers aim to satisfy Chinese nickel ore demand. However, S&P analysts said, “We believe that legislation will remain a major hurdle for restarts and new projects, therefore the Philippines will be unable to meet Chinese nickel ore demand over our forecast period.” Three nickel mines in the world that had been closed due to the coronavirus disease in 2019 were reopened in 2020 when the government turned to the mining industry to help offset the economic effects of the disease (Covid-19). These restarts and demand from current mining facilities, according to foreign analysts, are expected to raise Philippine mined nickel output from 340,000 tonnes in 2020 to 550,000 tonnes in 2025. “However, we believe that existing environmental restrictions on Philippine mining will limit the scope for further mine restarts or additional production from new mining projects in the medium term,” S&P analysts said. “This will prevent the Philippines from meeting China’s nickel ore requirements in Indonesia’s absence, driving Chinese primary output down from an estimated 715,000 tonnes in 2020 to 490,000 tonnes in 2025.” The Philippine Nickel Industry Association (PNIA) previously reported that the country's nickel export value increased by P1 billion from January to September 2020, compared to P24 billion in the same timeframe last year. According to a survey from the Mines and Geosciences Bureau (MGB), the Philippine nickel industry produced 18.5 million dry metric tons (DMT) in 2020, down 14% from the previous year's 21.6 million DMT production. MGB stated that the lower output was primarily due to the increased community quarantine imposed by Covid-19 from March to May 2020, during which mineral product movement was restricted across the world. The increased performance in export value for the nickel industry, according to PNIA President Dante Bravo, was primarily motivated by demand increases in nickel prices. China's consistent demand boosted the world nickel price in 2020.
Philippine Resources - April 06, 2021
Forecasts for PH Development in 2021 Have Been Reduced
Fitch Solutions, a London-based think tank, has slashed its economic growth forecast for the Philippines this year, citing the return to tough lockdown measures in the wake of the COVID-19 outbreak, which is expected to dampen domestic investment in the short term. Fitch Solutions now expects the Philippines' actual gross domestic product (GDP) to rise by 5.8% this year, down from the initial estimate of 7.6%, due to the government's capital spending push being derailed. “The surge in COVID-19 cases in the Philippines in March and lockdown measures imposed reflect the continued risks to the archipelago’s economic outlook,” the think tank said in a research note dated April 1. The government has reimposed curfew policies in Metro Manila and neighbouring provinces, affecting an unprecedented 24 million inhabitants, as it struggles to control the pandemic. Given the continuing increase in cases and the long-term effect on hospital capacity, Fitch Solutions expects the lockout steps to be extended beyond two weeks. “The likelihood of further outbreaks in other regions remains high and given the slow vaccination rollout in the country (less than 1 per cent of the population has been vaccinated as of end-March) we believe the Philippines’ recovery will continue to be hampered by the pandemic,” Fitch Solutions said. Regional outlook The think tank went on to say that its new estimate of 5.8% also had downside risks. It stated that its forecast for a moderate recovery this year was based on the assumption that domestic demand would steadily improve and the government's investment plans would be realized, resulting in a sharp increase in domestic activity. “However, the slow vaccine rollout and recurrent difficulties in containing outbreaks look set to stall the recovery further,” it noted. A survey of economists in the Asean-5 and India found that the Philippines' growth projection was 5.2 per cent, down from 5.9 per cent in the previous poll last December. Although Asian countries that carried out mass vaccination earlier, such as India, Indonesia, and Singapore, saw their near-term economic prospects boost, gradual inoculation tempered economists' growth aspirations for the Philippines, according to a poll released on Monday by the think tank Japan Center for Economic Research (JCER). Economists following the Philippines predicted that GDP will contract by 3.8 per cent year on year in the first quarter, up from 0.7 per cent a year before. GDP will rise 8.4% year over year in the second quarter, 5.6 per cent in the third quarter, and 4.5 per cent in the fourth quarter due to base effects from last year's low. Malaysia and Thailand, including the Philippines, have weaker growth forecasts for 2021. “Most economists see the rollout of COVID-19 vaccination as one of the most significant positive developments over the last three months and all three upward-trending countries have rolled out vaccinations relatively sooner. This may have improved economists’ outlooks. Delays in vaccination and the spread of COVID-19 variants are listed as factors that might damage the economies,” JCER said. Top concerns Faster dissemination of COVID-19 variants and delayed vaccination, or "corona shock," were described as top economic issues in the Philippines, but higher inflation was also identified as a major threat to the country's recovery from the pandemic-induced recession. According to analysts, headline inflation will average 4.5 per cent in the first quarter, 4.8 per cent in the second, 4.7 per cent in the third, and 4.2 per cent in the fourth quarter, averaging 4.5 per cent in 2021, way above the target range of 2-4 per cent. With a 6.1 per cent increase, Singapore is forecast to lead economic growth in the Asean-5 this year, led by Malaysia's 5.3 per cent and Philippines' 5.2 per cent. According to the JCER report, India will rise at a higher rate of 11.2 per cent in 2021. Economists predicted that the Philippines' average GDP growth will be 6% in 2022, up from 5.8% in December but still below the government's goal.
Philippine Resources - April 06, 2021
Estrella-Pantaleon Bridge Expected to Open in June 2021
The Department of Public Works and Highways (DPWH) is concentrating not only on the civil work’s development of the Estrella-Pantaleon Bridge Project but also on keeping the workplace secure and clean. DPWH Secretary Mark A. Villar said, "that at 86 per cent and with just a few more days to fully complete the new Estrella-Pantaleon Bridge, we are mindful that a single case of COVID-19 in the project can lead to an interruption, if not total work stoppage" Secretary Villar recently issued revised guidelines in Department Order #30 for the implementation of ECQ, MECQ, GCQ, and MGCQ infrastructure projects, both public and private, during the public health crisis. "Although the bridge project is being rushed for completion in June 2021, it is critical that construction firms be proactive rather than reactive in dealing with the increased risk of illness from COVID-19," Secretary Villar added. Emil K. Sadain, Undersecretary for Unified Project Management Office (UPMO) Operations, and UPMO Roads Management Cluster 1 Project Manager Benjamin Bautista checked the physical progress of the bridge project on Monday, April 5, 2021, and the contractor's compliance with protocols that cover prevention, detection, and rapid response to maintain construction work continuity as workers who have been living in the barracks resume work after the Lenten season. “Let’s get to work healthy to get the job done”, Undersecretary Sadain reminded the contractor China Road and Bridge Corporation citing the current health situation, particularly in the NCR Plus bubble. In his report to Secretary Villar, Undersecretary Sadain reported that the project is more than 12% ahead of time, having completed all bridge substructure works for abutments A and B on both sides and piers of the Makati approach bridge; the V-shaped piers for the Main Bridge; concrete box girder for the approach bridge; and the V-shaped piers for the Main Bridg; and two (2) prestressed concrete box girder segments using the traditional approach. Post-tensioning and grouting works, formworks and rebar installation for the closure section in the side spans, formworks installation for the 2-meter closure section in the main bridge span, and preparatory works for approach road construction on both sides are now the focus of bridge construction activities. The new 506-linear meter bridge, funded by China and introduced by the DPWH UPMO - Roads Management Cluster 1 (Bilateral), would have a diameter of 21.65 meters, capable of four (4) lanes instead of two (2), and three-meter sidewalks on both sides. The P1.46 billion new Estrella-Pantaleon Bridge, which is scheduled to be completed in the second quarter of 2021, will handle 50,000 vehicles a day and minimize travel time between Mandaluyong and Makati to 12 minutes. The bridge will connect Estrella Street in Makati to Barangka Drive in Mandaluyong, helping to relieve traffic congestion on EDSA by providing an alternative route for motorists.