MTD targets P10B worth of completed gov’t centers

ALLOYMTD Group of Malaysia, through its local unit MTD Philippines, Inc. and in partnership with local government units, expects to complete about P10 billion worth of regional government centers (RGCs) before June 2016.

“We hope to start building five regional government centers within the next two to three months valued at P10 billion, to be completed before June 2016,” Isaac S. David, president of MTD Philippines, said via text message on Saturday.

Mr. David added that the government centers will be in Bangsamoro, Eastern Visayas, Bataan, Ilocos Norte and Nueva Ecija.

In January 2013, the infrastructure group started the construction of a P2.5-billion Region IV-A Calabarzon regional government center, modeled on Putrajaya, the Malaysian federal government center south of Kuala Lumpur, and is looking to implement similar projects in other Philippine administrative regions.

Under a joint venture agreement with the local government unit, MTD Philippines will finance, design, construct, operate and manage the regional centers, which will house government agency offices, business process outsourcing offices, hospitals, and retail centers.

Mr. David is hopeful that the success of the 70,000-square-meter Region IV-A RGC will be the template for the implementation of more RGC projects in other regions.

“The proposal for an integrated government center for all regional offices is a response to the national government’s efforts to provide convenience to the public and empower regional constituencies by decentralizing government’s powers and functions,” Mr. David explained. --Chrisee Jalyssa V. Dela Paz

source:  Businessworld

JG Summit, Aboitiz, 3 more eye largest PPP project

At least 19 interested bidders are eyeing the Aquino administration's biggest public-private partnership project

 Map of the Laguna Lakeshore Expressway Dike Project. Image from dpwh.gov.ph

MANILA, Philippines – JG Summit Holdings Inc, Aboitiz Group and 3 more companies are interested to bid for the Aquino administration's biggest public private partnership (PPP) project, bringing the total number of bidders to 19 as of end of August.

The 5 companies that bought bid documents for the P123-billion (US$2.8 billion) Laguna Lakeshore expressway dike are the following, according to PPP Center executive director Cosette Canilao:

• JG Summit Holdings Inc
• Aboitiz Group
• Megawide Construction Corp
• PT Star Line
• State Properties Corp

Other interested bidders include:

• San Miguel Corp (SMC)
• Lucio Tan Group
• Ayala Land Inc
• Metro Pacific Investments Corp (MPIC)
• Megaworld Corp
• GT Capital Holdings Inc
• Filinvest Land Inc
• Laguna Lakeshore Consortium led by the Wenceslao Group
• JV Power and Wealth Corp
• Macquarie Capital Securities
• Minerales Industrias Corp

Philippine units of foreign firms Egis SA of France, Leighton Contractors of Australia, and Muhibbah Engineering (M) Berhad of Malaysia are also eyeing the project.

The interested companies are required to submit their pre-qualification documents by October 16, said the Department of Public Works and Highways (DPWH).

Less flooding, faster transport

The Laguna Lakeshore expressway dike was approved by the National Economic Development Authority (NEDA) last June 19.

President Benigno Aquino III promised in his 4th State of the Nation Address (SONA) that it would lessen flooding in towns on the coast of Laguna Lake, specifically those in Southern Metro Manila and Laguna.

It is also meant to improve the environmental condition of the Lake and make travel and transport of goods more efficient.

The reclamation of 700 hectares of foreshore and offshore areas in Taguig and Muntinlupa is also seen to open up opportunities for a new business and residential district.

The project is a 47-kilometer flood control dike topped by a high-speed 6-lane expressway 500 meters from the western shoreline of Laguna Lake. It will feature pumping stations and floodgates.

It will start in Taguig, passing through Muntinlupa and Calamba, and ending in Los Baños where it borders Bay, Laguna.

But some environmental and fisherfolk groups claim the expressway dike will displace fisherfolk who live on the coast of Laguna Lake and pose environmental threats, especially because of the large-scale reclamation the project requires.

The government will roll out 18 major infrastructure PPP projects worth P602.2 billion ($13.8 billion) before June 2015, said Canilao.

The administration has alrady awarded 7 PPP projects worth almost P68 billion. These include the following:

• Daang Hari-South Luzon expressway link road (P2 billion or $45.9 mllion)
• PPP for School Infrastructure Project phase 1 (P8.86 billion or $203 million)
• PSIP-2 (P16.28 billion or $373 million)
• Modernization project for the Philippine Orthopedic Center (P5.98 billion or $137 million)
• Ninoy Aquino International Airport expressway (P15.52 billion $356 million)
• Automated fare collection system project (P1.72 billion or $39 million)
• Mactan-Cebu international airport expansion project (P17.5 billion or $401 million)

Concession contracts for the LRT 1 Cavite extension worth P65 billion ($1.5 billion) and the Cavite-Laguna expressway project worth P35.4 billion ($812 million) will also be awarded soon by DPWH. – Rappler.com

PEZA’s Jan-July investments up 30.77%

A combination of approved export enterprises and IT companies boosted the period’s investments

 INVESTMENTS UP. Investments registered with the Philippine Economic Zone Authority increased by 30.77% in January to July 2014. File photo by Agence France-Presse

MANILA, Philippines - Growth of investments registered with the Philippine Economic Zone Authority (PEZA) rose to 30.77% in the first 7 months of the year from the 27% growth posted as of the first half.

PEZA investments rose to P127.46 billion ($2.91 billion*) from P97.47 billion ($2.23 billion) in the same period in 2013, PEZA director-general Lilia de Lima told members of the Chamber of Real Estate and Builders Association (CREBA) on Thursday, July 31.

"We want to hold on to this until the end of the year," De Lima said.

In July alone, PEZA approved new export enterprises: a Swedish; a Dutch; a Chinese; 3 Japanese companies; a Korean; a Taiwanese; and 4 Filipino firms.

De Lima said the agency also approved 12 new Information Technology (IT) companies were also approved: a Dutch; an Australian; 6 American companies; 2 British firms; a Singaporean; and a Filipino company.

PEZA’s achievements were mentioned in the 5^th State of the Nation Address (SONA) of President Benigno Aquino III, where he thanked De Lima for her efforts and the agency’s achievements.

Of the P2.7 trillion ($61.66 billion) investments since its inception in 1995, 42% or P1 trillion ($22.84 billion) of PEZA’s investments came in during his 4-year term, Aquino said.

“The remaining 58% took 15 years for past administrations to accumulate. We are confident that, before we step down from office, we will be able to match or even surpass this amount,” Aquino said. – Rappler.com

*($1 = P43.79)

5 firms eye P4B ITS-South Terminal project

Interested bidders have until October 6 to submit their offers
INTEGRATED. The country's biggest conglomerates are likely to participate in a project integrating Metro Manila transportation. File photo by Rolex Dela Pena / EPA
 

MANILA, Philippines – Five companies, led by diversified conglomerate San Miguel Corporation and property giant Ayala Land Inc, are set to bid on the proposed P4-billion ($91.64-million) Integrated Transport System (ITS) at the Food Terminal Inc (FTI) compound in Taguig City.

Department of Transportation and Communications (DOTC) spokesman Michael Arthur Sagcal said on Friday, August 29, that San Miguel, Ayala Land, the Filinvest Group of taipan Andrew Gotianun, Filipino-owned Megawide Construction Corporation, and Datem Construction bought bid documents for the public-private partnership (PPP) project which will be up for bids beginning September.

The DOTC has given interested bidders until October 6 to submit bids to finance, design, construct, operate, and maintain the ITS-South Terminal designed to serve passengers coming from Laguna and Batangas.

The terminal would connect passengers from the Laguna and Batangas side to other urban transport systems such as the proposed North-South Commuter Rail of the Philippine National Railways, city buses, taxis, and other public utility vehicles that serve inner Metro Manila.

The project would include a passenger terminal building, arrival and departure bays, public information systems, ticketing and baggage holding facilities, and park-ride facilities.

ITS-Southwest Terminal bid submission moved anew

Meanwhile, DOTC again moved the deadline for the submission of bids for the proposed P2.5 billion ($57.27 million) ITS-Southwest Terminal to late September instead of August 30.

The ITS-Southwest Terminal will be situated in a 2.9-hectare property located at the Coastal Road Terminal along the Manila-Cavite Expressway.

The terminal that would connect passengers coming from Cavite to other urban transport systems such as the future Light Rail Transit line 1 (LRT1) South Extension to Bacoor in Cavite, city buses, taxis, and other public utility vehicles plying Metro Manila.

A total of 11 firms, including the country’s largest conglomerates, are participating in the bid. They include:

• San Miguel Corporation
• Ayala Corporation and property arm Ayala Land Incorporated
• Metro Pacific Tollways Corporation of Metro Pacific Investments Corporation
• Robinsons Land Incorporated of tycoon John Gokongwei
• Filinvest Land Incorporated of tycoon Andrew Gotianun
• Mega-wide Construction Corporation
• D.M. Wenceslao and Associates Incorporated
• Vicente T. Lao Construction
• French-owned Egis Projects Philippines
• State Properties Corporation
• Expedition Construction Corporation

The proponent will finance, design, construct, operate, and maintain the ITS project for a period of 35 years.

The DOTC is also looking at putting up an ITS-North Terminal project to be situated either at the Manila Seedling Bank or near the Trinoma Mall in Quezon City.

The P7.7 billion ($176.65 million) ITS project is among the 7 major infrastructure projects worth P184.2 billion ($4.23 billion) approved on November 21, 2013, by the National Economic and Development Authority (NEDA) Board chaired by President Benigno Aquino III.

The mass transportation intermodal terminals would maximize road usage by reducing vehicle volume and eliminating provincial bus traffic to improve traffic flow along Metro Manila’s major thoroughfares, particularly EDSA. – Rappler.com

*$1 = P43.59

Business optimism falls in Q3 on seasonal factors, controversies

BUSINESS OUTLOOK on the economy turned less favorable this quarter, according to the latest survey of the central bank, which attributed the decline to a mix of seasonal factors, Manila’s logistics bottleneck and the controversy over state funds.

The confidence index fell to 34.4% this quarter in the central bank’s latest Business Expectations Survey (BES) from the 50.7% recorded last quarter and the 42.8% recorded for July-August last year. The latest result was also the lowest since the 34.1% seen in the third quarter of 2011.

The latest BES, conducted from July 1 to August 15, polled representatives of 1,527 firms nationwide drawn from the Securities and Exchange Commission’s Top 7,000 Corporations in 2010 and BusinessWorld‘s Top 1000 Corporations in 2010.

Respondents attributed the dip to expectations of a seasonal slack in demand due to interruption of business activities during the rainy season; lower consumer spending amid higher education fees and tax payments the previous quarter; increase in prices of basic commodities and higher overhead costs of raw materials and utilities; unresolved congestion at Manila’s ports; and “political noise” from the controversy about the Disbursement Acceleration Program and the Priority Development Assistance Fund.

“The sentiment of businesses in the Philippines mirrored the less bullish outlook in the United Kingdom, Canada, Germany, New Zealand, Singapore, Hong Kong, and India but was in contrast to the more buoyant views of those in the US and China,” the BSP said in a statement.

Optimism fell across all sectors, with construction posting the biggest drop 17.9 points to 42.3 this quarter from the previous three months.

“Construction firms’ outlook in the current quarter was less sanguine due largely to the slowdown of construction activities during the rainy season,” the central bank explained.

Among the firms surveyed, both importers and exporters were less optimistic as a result of an expected seasonal fall in demand, as well as disruption of business operations caused by the truck ban and port congestion in Manila.

BETTER NEXT QUARTER
Business sentiment for the quarter ahead, however, hit 52.9% -- the highest since the 60.0% logged in the third quarter 2013 survey.

“Respondents’ more positive outlook in Q4 was due to expectations of brisker business in view of the expected increase in consumer spending during the holiday season; expansion in retail trade, infrastructure, power and telecommunication, education, and healthcare businesses; higher exports of garments and metals with the recovery of global markets; and increase in orders for manufacturing products leading to higher volume of production,” the BSP said.

In addition, expectations of steady growth of overseas Filipinos’ remittances, surge in investment inflows, and roll-out of major public-private partnership projects boosted business confidence for the last three months of the year.

Moreover, while firms that expected tighter financial conditions continued to outnumber those that said otherwise, they also believed financial requirements can be met with available credit.

The central bank also noted that, for next quarter:

• respondents expect an overall increase in the number of new employees to be hired -- particularly for industry, as well as wholesale and retail trade; while

• percentage of businesses with expansion plans rose to 34.2% from 30.0% in the second quarter survey and 32.1% in the third quarter of 2013, driven particularly by manufacturing; electricity, gas and water; as well as agriculture, fishery and forestry; but weighed by mining and quarrying.

Finally, respondents who expected inflation to pick up this quarter and the next increased compared to the previous quarter’s survey, though expectations were still “well-anchored” at 4.2% for the third and fourth quarters -- compared to 4% and 4.1%, respectively, in the past survey -- hence, still within the central bank’s 3-5% full-year target. -- D. E. D. Saclag

source:  Businessworld

A second look at the BRT

Proponents of the Bus Rapid Transit (BRT) project in Cebu City cheered when President Benigno Aquino III finally gave it the green light in his State of the Nation Address (SONA). An idea that saw first light in the 1990s finally got serious attention. Despite arguments from other Cebuano legislators to pursue a light railway transit (LRT) system instead, the BRT is seen as a better, more environment-friendly, cost-sensible mass transport system to address traffic which has gotten worse over the years. The scheme, if done right, would replace small-capacity jeepneys with larger buses traveling along dedicated lanes. Passengers would fall in line in elevated terminals, then step on to buses whose floor height matched the stopover. The LRT and MRT are massive, overburdened systems that Metro Manila can keep. Cebu can learn what not to do just looking at the trains in the capital which are heavily subsidized. What’s not clear are vital details of the BRT project and its P10.5 billion cost. A new wrinkle emerged after urban planners who have been closely watching the BRT project and attending briefings of the proponents, renewed their questions about the choice of bus routes. Their observations, raised in a letter of the Movement for a Livable Cebu (MLC) to Cebu City Mayor Michael Rama, underscore the need for citizens to be vigilant and ensure that the project is executed right. How can the BRT route, which runs through Osmeña Boulevard and Fuente Osmeña on to Escario Street, and on to Talamban, be efficient when it doesn’t pass through densely populated areas, they asked. Who decided that course in the first place? It seems that the question is coming late in the game. The BRT was almost scrapped from the President’s agenda following his disappointment over the mayor’s fixed position against flyovers. When the route was first questioned two years ago, a foreign consultant was candid enough to say the BRT’s original champion Tomas Osmeña was instrumental in keeping the route inside Cebu City. It even passes through three flyovers, an obvious giveaway that the plan was conceived during Osmena’s term, whose ally Rep. Raul del Mar, envisions a network of flyovers in the city. There are objections worth looking into – that the route would create chokepoints of traffic, spoil the vista of historic Osmena Boulevard and affect one third of Fuente Osmena’s roads, aside from require removing more than 2,000 trees. An alternative route passing through Imus and MJ Cuenco Avenue was proposed by the MLC, proving the gruop doesn’t just criticize, it offers a well-studied option. But is there time to change project details at this stage when the national government is about to tap a World Bank loan for the project? 
source:  Cebu Daily News

By the numbers: GDP growth and the private sector

WE generally expect well-run private companies to outperform the economy. At times of high economic growth, we assume (correctly) that corporations are growing even more rapidly. With the Philippines currently in a high-growth phase, having just posted GDP growth of 6.4% for the second quarter, it seems like a worthwhile exercise to quantify the extent of corporate outperformance, and to tease out any insights from those instances when they do underperform.

The question is not an idle one. The current government’s One Big Idea is to leverage the strengths of the private sector in order to close the infrastructure gap. This has the advantage of getting projects done without actually needing to mobilize public funds -- a consideration surely not lost on a government determined to defend its credit rating. It does bear mentioning that this process of shifting responsibility for the country’s infrastructure away from government became politically acceptable only because of the staggering record of corruption and inefficiency accompanying public projects.

To help answer these questions, we tapped the BusinessWorld Top 1,000 Corporations database for the leading companies’ revenue performance between 2002 and 2012 and compared them with the corresponding GDP growth rates for the same period. What we found was that corporate growth did indeed outperform the economy during periods of stability or expansion. That is likely because during stable periods, when conditions are more or less predictable, companies are free to optimize their operations to suit the prevailing conditions - how much debt to take on, how much to invest in capital goods, how many people to hire, and so on.

During downturns, however, the revenue growth of private corporations tends to plunge to well below the rate of economic expansion. The top 1,000 corporations are more volatile than the broader economy, and the top 10 are even more volatile than the top 1,000. This seems to suggest that the higher you go up the corporate league tables, the more professional the management, and therefore the more operations are finely optimized for stable economic conditions. It takes a truly disruptive event to expose the flaws in the business plans of the best-run companies -- as the events of 2008 demonstrated.

The government appears committed to the idea of privately-funded infrastructure, which has already raised questions about the inclusiveness of its brand of growth when corporations are allowed corner the market for public goods. The growth figures appear to point to one more thing to ponder: how will these flagship projects fare during a downturn? - Agbayani P. Pingol II and Virgil S. Villanueva


source:  Businessworld

ECCP bats for simpler investment registration process

THE EUROPEAN Chamber of Commerce of the Philippines (ECCP) is pushing for the rationalization of the registration process for foreign investments, noting that bottlenecks in such procedures dampen the country’s business climate.

In a position paper submitted to the Senate and dated Aug. 18, ECCP Executive Director Henry J. Schumacher said: “We agree that the documentary requirements for registration and doing business by foreigners here in the country need to be streamlined.”

“The pervasive bureaucratic red tape persists to discourage and ward off potential investors,” Mr. Schumacher said.

“For instance, while we need to secure power generation plants, build energy capacity and foster competition, we are weighed down by compliance with 162 permits and signature of officials,” he noted.

He added that this “bureaucratic pathology has no social redeeming value” noting that it is only centered on rules, regulations and procedure.

Senator Paolo Benigno “Bam” A. Aquino IV backed this proposal, saying that there’s a need for a one-stop-shop that will administer the whole business registration process.

“We really need a ‘one-stop-shop’ or an overarching [body] to ensure the management of the whole process because if we will send them (investors) to each agency that has their own paces and queues, we are not making it easy for them. We want to make it easy for investors to come to the Philippines,” Mr. Aquino told BusinessWorld in an interview after Senate’s inquiry on the procedure of registration of foreign investments in the country last week.

The ECCP cited in its position paper the World Bank and International Finance Corp.’s Doing Business index for 2013, in which the Philippines ranked 138 out of 185 economies.

“The first top five criteria where the country ranked low were in starting a business, registration of property, paying of taxes, getting credit and protecting investors,” Mr. Schumacher quoted the report on the index.

He noted that business registration in the Philippines is a “slow process,” with corporations and partnerships required to register with the Securities and Exchange Commission (SEC), and, sole proprietorships, with the Department of Trade Industry (DTI).

“After the requisite registration, the investor is left with the other layers of requirements for the availment of the incentives under the pertinent laws,” he added.

Mr. Schumacher cited Uganda and Vietnam’s successful streamlining of business registration, which he said has attracted more business entrants to the local economy due to reduced costs.

It was in this context, Mr. Schumacher said, that the ECCP drafted a bill on the creation of the Office of Investor Facilitation and Protection, which will be considered as a Cabinet-level body that will protect the country’s investors.

According to the ECCP, the draft proposed measure will be pitched to Senator Sergio R. Osmeña III.

“Rest assured that we will support any action that shall streamline the maze of the myriad of documentary requirements, permits, endorsements, certificates, etc. And delays,” Mr. Schumacher noted.

Meanwhile, Mr. Aquino said the Senate will also look into the National Competitiveness Council’s (NCC) functions in line with business registration.

“I know that their (NCC) processes are mostly for the local. I am not sure if they have a version that also tackles the Bureau of Immigration and DoLE [Department of Labor and Employment] processes for foreign nationals. So we will take a look if they are also working on that or not,” Mr. Aquino said.

“But we are hoping that if an agency will focus on this, we can really come to a point where it is really more fun to do business in the Philippines. We will not make it hard for those investors who wanted to create jobs in the country,” he added. -- A.D. Galura
source:  Businessworld

Two PPP projects up for NEDA Board okay

TWO MORE public-private partnership (PPP) projects are now up for approval by the National Economic and Development Authority (NEDA) Board after securing the go-ahead from the NEDA-Investment Coordination Committee-Cabinet Committee (ICC-CabCom) last week.

Transportation Secretary Joseph Emilio A. Abaya said in a text message that the NEDA-ICC-CabCom, in its Aug. 22 meeting, approved two projects: the Davao Sasa Port and the Motor Vehicle Inspection System (MVIS).

The Department of Transportation and Communications (DoTC) is the implementing agency for both initiatives.

PPP Center Executive Director Cosette V. Canilao likewise confirmed via text message that the two projects were approved by the NEDA-ICC CabCom.

According to the PPP Center Web site, the Davao Sasa Port project involves the construction and modernization of the port’s infrastructure, including the construction of a new apron, linear quay, container yards, warehouses, the expansion of its back-up area, and the installation of ship-to-shore cranes and rubber-tired gantry.

“The development of the Davao Sasa Port into an international-standard container terminal is expected to significantly increase operational performance, reduce vessel waiting times, and attract direct calls of large foreign container vessels, in turn reducing shipping costs for import/export cargos to and from Mindanao,” the Web site said.

The project has an estimated cost of P17.46 billion and will be implemented under the build-transfer-and-operate (BTO) scheme. It will involve a 35-40-year cooperation period.

The MVIS, meanwhile, involves the creation of testing centers for heavy duty, light duty and two-wheeler vehicles across the country.

These centers shall include vehicle lanes with standalone structure and automated inspection equipment, an administrative area, a parking area and test driving lanes, a boundary wall and utilities, an IT system to automate the entire process and enforce sufficient security measures, and an optional area for future expansion. The project will be implemented under the BTO scheme, according to the PPP Center Web site. It is estimated to cost P19.30 billion and will involve a 12-year cooperation period, inclusive of design and conceptualization.

These two new green-lit initiatives brings to seven the total number of NEDA-ICC CabCom-approved projects so far.

The other five PPP initiatives previously okayed by the body are the operation and maintenance (O&M) contracts of the Iloilo, Davao, Bacolod, and Puerto Princesa airports, and the upgrading of Regional Prison Facilities.

The four projects involving the O&M of the airports were approved by the NEDA-ICC CabCom in a June 30 meeting. Meanwhile, the Regional Prison Facilities project was approved in the body’s Aug. 5 meeting.

Having obtained NEDA-ICC CabCom approval, the seven projects are now up for approval by the NEDA Board chaired by President Benigno S. C. Aquino III.

Socioeconomic Planning chief Arsenio M. Balisacan was not available for comment on the date of the next NEDA Board meeting.

With NEDA Board approval, implementing agencies can bid out the initiatives to interested private sector partners.

PPP projects form part of the Aquino administration’s infrastructure program for speeding up the country’s economic development.

To date, the government has rolled out seven PPP projects: the Daang Hari-South Luzon Expressway Road Link Project, the PPP for School Infrastructure Project Phases I and II, the Modernization of the Philippine Orthopedic Center, the Automatic Fare Collection System, the Mactan-Cebu International Airport Passenger Terminal Building and the Ninoy Aquino International Airport Expressway project.

Last month, the PPP Center said a measure amending the Build-Operate-Transfer Law is expected to be passed by Congress in the first semester of 2015. The said amendment, it noted, is expected to help ease bottlenecks in the current PPP program. -- B.C.P. Balaoing

source:  Businessworld

Railway PPP project clears major hurdle

SAN MIGUEL Corp. (SMC) is a step closer to starting work on its planned P62.7-billion Metro Rail Transit Line 7 (MRT-7), after the Finance department approved the state’s guarantee for the project, a cabinet official said recently.

“Performance undertaking has been signed by Finance Secretary (Cesar V.) Purisima. We have signed our implementing guidelines, so it is a matter of calling them (San Miguel) and giving it to them,” Transportation Secretary Joseph Emilio A. Abaya said at the sidelines of a press conference in Mandaluyong City last Aug. 14 when asked for updates on the project.

Mr. Purisima said in a text message yesterday that he “signed the performance undertaking on July 23, after receiving authority to do so by the President.”

San Miguel officials were not immediately available for comment.

“Once the performance undertaking is given, San Miguel should commence financial close. I’m urging them [sic] to do it sooner than 18 months, but they are saying they could do advanced works once they get the green light,” Mr. Abaya had explained when asked on the next step, adding that he expects work on MRT-7 to start “before next year.”

MRT-7 -- a project that will extend one of the rail systems now servicing Metro Manila -- will consist of a 22-kilometer (km), six-lane asphalt highway that will connect North Luzon Expressway to an intermodal transport terminal in San Jose del Monte City, Bulacan, as well as a 22-km largely elevated railway with 14 stations that will stretch from San Jose del Monte City to the integrated Light Rail Transit Line 1-MRT 3-MRT 7 station at the northern part of EDSA.

MRT’s extension to Bulacan could be completed by mid-2018 at the earliest, assuming construction starts within the year, according to the 2013 annual report of San Miguel, which had then noted that the project “has... secured necessary government approval to proceed with construction” and was, at that time, just “awaiting the release of the performance undertaking.”

The Finance department had said last February that it had endorsed such guarantee to Malacañang, which was to give the final green light for the project.

“From there, the processing of the financial closure can immediately be initiated and is expected to be received by 2014,” San Miguel had said in its annual report.

“Construction of the... road-and-rail transportation (system) will begin immediately after this, and will take an estimated 42 months to complete.”

Japan’s Marubeni Corp. had bagged the project’s engineering procurement contract.

San Miguel, through subsidiary San Miguel Holdings Corp., has a 51% interest in Universal LRT Corporation Ltd., which in turn holds a 25-year concession for the railway-cum-road project.

Seven public-private-partnership (PPP) projects have been awarded, so far, since the program’s 2010 launch: P2.01-billion Daang Hari-South Luzon Expressway Link Road; P15.52-billion Ninoy Aquino International Airport Expressway; P16.42-billion first phase of the PPP for School Infrastructure Project (PSIP); PSIP’s P8.80-billion second phase; P5.69-billion Philippine Orthopedic Center modernization; P1.72-billion Automatic Fare Collection System; and P17.52-billion Mactan-Cebu International Airport Passenger Terminal Building. -- C. J. V. Dela Paz

source:  Businessworld

Onshore oil potential in the Philippines

HOPES of a path towards energy independence in the Philippines are gathering pace, thanks to encouraging steps forward at the Malolos-1 onshore well in Cebu. Australian oil firm Gas2Grid said in July that it is in the process of applying with the Department of Energy (DoE) in order to increase production for a full appraisal of the field.

Early tests show that the well is capable of producing 200 barrels of crude daily, a production level maintained for short periods, according to the explorer. Thus far, estimates put total reserves at 20.4 million barrels.

But while the country’s offshore reserves are most often cited as the highest-potential energy reserves available, recent offshore developments have been less promising. London-listed Dragon Oil confirmed in July that Baragatan-1 offshore well in the Palawan basin, in which it has a 40% stake, was incapable of producing commercial hydrocarbons.

WORTH PURSUING
Earlier testing at Malolos had shown that the field’s lower and upper oil-bearing sandstone were both able to produce oil individually, but the well’s oil production rate had been lower than officials had hoped. The company announced later in June that measures to repair the pipeline had significantly improved the field’s sustained oil flow rate.

Although work on the field has been suspended while the company waits for approval from the DoE, Gas2Grid’s managing director, Dennis Morton, told local media in July that he expects the field will produce oil at commercial rates. “This is a resource well worth pursuing,” he said. This is the first positive development since the DoE confirmed in January that Gas2Grid had found oil in the Malolos-1 fields. At the time, the firm estimated initial costs of the development to be between $500,000 and $1 million.

FOSSIL FUEL DEPENDENCY
Despite moves to develop and enhance renewable energy, the Philippines remains dependent on fossil fuels, with oil and mineral fuels comprising 22% of imports between January and September 2013 and representing the third-largest category after raw materials and capital goods.

Oil consumption increased 5.5% year-on-year to reach 298,000 barrels per day in 2013, according to the BP Statistical Review of World Energy 2014. However, a lack of new production has led to decades of decline in domestic output, which stood at 8.57 million barrels in 1979 but fell to less than 2 million by 2012.

NEW ACTIVITY
The DoE reported that 1.44 million barrels of oil were produced between January and September 2013, compared to 1.64 million barrels in all of 2012, while five exploratory wells were drilled during the year, including sites at Malampaya, drilled by Shell Philippines Exploration, and new wells at the Galoc offshore oilfield. Onshore developments included Malolos-1, as well as Duhat-2 in Onshore Leyte, which is estimated to contain 88 million barrels of oil -- although safety concerns led Australia’s Otto Energy to abandon its exploration efforts in 2013.

New exploration activities have been high on the government’s priority list. The DoE reported in its 2013 Energy Sector Achievement Report that the country’s 16 sedimentary basins have a combined potential of 4.77 billion barrels of fuel oil equivalent, or 689.8 million tons of energy of oil and gas reserves.

In May, it launched a tender for exploration rights in 11 oil and gas blocks, with most of the blocks located near the Philippines’ main island of Luzon while one lies in a disputed area of the South China Sea. The DoE estimates that the area 7 block -- located near Palawan -- holds a resource potential of 165 million barrels of crude and 3.5 trillion cubic feet of natural gas.

The Galoc field, located off the northeast coast of Palawan, remains the most productive reserve, with Otto Energy reporting the field produced 1.8 million barrels in 2013. Production has been supplemented over the years by output from the Nido, Matinloc, and North Matinloc fields, while Nido Petroleum announced in March that its revised estimate of proved developed reserves in Galoc had increased by 1.57 million barrels, to 11 million barrels in total.
source:  Business World / Oxford Business Group