200-MW Shortfall Seen In Mindanao

The starvation of the province, Mindanao from electricity is in danger, suffering from another 200-megawatt (MW) shortfall for the succeeding years due to high demand and continues lacking of generation capacity.

It is said that the Department of Energy (DOE) is already banking on power charges and diesel-fired power plants to upsurge the available power in the region next year.

Energy Secretary, Jose Rene Almendras, mentioned that, “If we do not have additional generation in Mindanao by the dry season next year, we will have a shortage.”

“I am looking at least 100 MW, almost 200 MW. It also depends on the rainfall next year,” Almendras added.

Up to the present time, the hydroelectric power plant is responsible for 53 percent of the total power supply in Mindanao.

The Mindanao network, according to the National Grid Corporation of the Philippines, which is in need of at least an average of 1,300 megawatt (MW) during peak hours, lacked 50 MW to 300 MW, resulting in two to four hours of rotating blackouts in the first quarter.

“In Mindanao, the situation has significantly improved. What is being reported to us is that there are no more blackouts,” Almendras said.

As an update, last week, there was still no power outage in Mindanao which follows the completed repair of the 200 megawatt (MW) Pulangi IV hydropower plant in Bukidnon.

The DOE released a circular outlining effort last March needed from numerous government agencies and private firms to lessen power outages in Mindanao.

But, Almendras said that Mindanao is running on bare requirements and is without any emergency reserves. A failure in any of the power generation equipment will thus automatically result in a shortfall and blackouts.

Almendras said that the situation might worsen next year when demands increases and there is insufficient rainfall for the hydropower plants.

The DOE recommends that the resumption of operations and rehabilitation of the 100 megawatt (MW) Iligan diesel power plant and the rehabilitation and transfer of 120 megawatt (MW) of privately owned power barges, and the transfer to Mindanao of the 96 megawatt (MW) of power barges presently operated by National Power Corporation (NAPOCOR), in order to solve the power supply concerns.

The DOE is in talks with private firms for the transfer of several power barges, Almendras said.

The Commission on Audit (COA) review is ongoing regarding the Iligan plant issue.

“The COA has requested for some additional documents from the local government unit and from the bidder to substantiate their offer, their process and pricing,” Almendras said

The 100-MW plant, which was last operated in 2010, was sold to Alsons Consolidated Resources Inc. (ACR) subsidiary Conal Holdings Corporation after the local government acquired it due to tax delinquency.

However, the power plant also needs COA clearance before it can be sold to ACR and resume operations.

Almendras said that the DOE wants the plant to start operations within the year for it to reach the maximum capacity ahead of the dry season next year.

Lastly, DOE is reviewing its plans following the failed bidding of four 32-MW power barges of Napocor.

The bidding of the Power Sector Assets and Liabilities Management for the diesel-fired Power Barges 101-104 failed last week as only one of seven qualified bidders submitted an offer.

Under the bidding rules, winning firms should immediately transfer these power facilities to Mindanao and would have to stay there until 2014.

The DOE has been giving some warnings last 2010 with regards to Mindanao that it needs additional baseload generating capacity through private investor participation.

But the DOE said there were delays in securing permits from local government units.

For instance, Aboitiz Power Corporation, Sarangani Energy Corporation, and San Miguel Corporation are planning to put up coal-fired power plants in Mindanao but host communities opposed these plans due to environmental concerns.

No Chinese Travel Ban Vs Phl – Palace

Malacañang explained yesterday that there is a travel advisory but clears out that it is not a ban on Chinese citizens planning to visit the Philippines.

Deputy presidential spokesperson, Abigail Valte, stated in her weekly radio interview over state-run dzRB, that she used as a basis the statement of Foreign Affairs Secretary Albert del Rosario that the travel advisory is not related to the Scarborough Shoal standoff.

“It’s not a travel ban, it’s just an advisory, which is normal when they feel that they have to give their citizens warning about a certain event,” she said.

Presidential spokesman, Edwin Lacierda said that more Filipino tourists are going to China than Chinese tourists coming to the Philippines. “Ironically, this is the year of friendly exchanges,” he said.

“That’s why we say it is unfortunate that this happened. But if the decision of tour operators in China is true then we will just have to work hard on the other markets.”

India, the second largest populated country in the world after China, Russia and among others are the other potential markets, Valte said.

Valte added that the Philippine government has not received any official communication about it, while the travel advisory may have been reported in media.

Shirley Lai, a representative of a travel agency, said at the Ninoy Aquino International Airport that the most affected when it comes to the declination of Chinese tourist arrivals are the chartered flights from Beijing, Shanghai and Xiamen bound for Boracay.

Regular flights are not yet affected, she added.

Lai said that the airlines affected are the chartered flights of Air Philippines, Cebu Pacific, and Zest Air.

She handles about 20-50 Chinese tourists a day, she added.

Lai said that she was expecting Chinese tourists to arrive on May 10, 11, and 12 and proceed to Boracay but they canceled their travel.

She expressed hope that kinks in the issue will be ironed out soon because a lot of revenues were lost with the cancelled tours.

ADB Official Cites PH Development Path

The Asian Development Bank (ADB), the country director for the Philippines mentioned last Wednesday that the Philippines is one of the good examples of countries taking path of development from an agricultural economy to one that is largely supported by services.

Neeraj Jain said at a briefing, that the traditional path is to move from agriculture to industries and then to services.

“This is happening amid the revolution in telecommunications in the Philippines, and experts are now raising the question of whether economies like these are conducive to growth that is inclusive or employment-friendly,” he said.

Also, the ADB official said that the Philippines financial market would need to acquire long-term instruments to help government efforts in encouraging investments in infrastructure.

Improved infrastructure

He stated that improved infrastructure would help efforts in the Philippines to move up to higher value-added activities, particularly the manufacturing and services sectors.

An example that Jain said as an example for the better infrastructure is that it can help in the push for the business process outsourcing sector to develop service offerings other than voice-based call centers.

He said longer-term loans had to be made available for undertakings such as public-private partnership (PPP) projects.

Funding for PPP

“Banks are now providing (loans) that mature in 10 or 12 years,” he said, adding that longer intentions will provide a greater boost to infrastructure projects.

The ADB announced last month the funding support for the PPP initiative “to help sustain the positive reform momentum.”

On the other hand, Australia, through the means of the Australian Agency for International Development, has set aside $15 million for the project development and monitoring facility (PDMF) that the ADB administers. The amount was on top of the $7 million provided to the facility last year.

Jain said the additional fund would mean that the PDMF would be able to support the preparation of more PPP projects than what was previously expected as doable.

With the additional fund, it is estimated that at least 12 PPP projects would be implemented or ready by 2016, more than twice the government target of five projects by the end of 2013.

Luxury Vehicle Sales Decline 30%

Sales in the market of luxury vehicles in the 1st quarter dropped by an unreasonably 30 percent as buyers, mostly upwardly mobile middle class, have become extra careful not to attract the fanatical eyes of the Bureau of Internal Revenue (BIR).

One of the officials of one of the luxury car companies in the country said 3 luxury car brands namely BMW, Mercedes Benz and Lexus only sold 264 units in the January – March period this year or 30 percent lower than the same period last year.

“Because of the heightened campaign of the BIR, buyers are scared, especially that most of our buyers are middle-class businessmen, who can now afford to upgrade their lifestyle,” the source said.

On the other hand, even the corporate clients and legitimate businessmen have cancelled their plans to buy luxury vehicles on the capture that they could face because of the undue inspection from the tax agency.

Among the 3 luxury car brand models, Mercedes Benz, having the biggest decrease with a reduction of 40 percent negative growth.

BMW, a German vehicle brand, posted the highest sales but still had a dropping off about 37 percent, while Lexus’ decline a modest 2 percent decrease.

Lexus sold a total of 75 units and is eyeing to sell a total of at least 300 units this year from 264 units last year.

Lexus Manila is set to introduce major model changes this year including its best selling RX, which is priced for P1.3 million.

Meantime, the hybrid models of Lexus have not really picked up as hybrids still account for a very small portion of total industry sales.

Lexus hybrid models have sold only 50 units so far.

Its hybrid cars are GT 200, GS450H, RX450H, LS600H with GT model accounting for 40 percent of sales being the most affordable at P2.3 million to P2.8 million.

There have been a good number of hybrid vehicle brands in the country but only Toyota has full hybrid models, the others are “mild” hybrid brands.

“We need to educate the market because hybrid is still little percentage of vehicle sales,” an official said.

Aside from the lack of awareness, the price of hybrid vehicles has remained very prohibitive because of the huge tax burden imposed on these imported cars.

The robust sales of hybrid vehicles in the US, Malaysia and Singapore have been largely attributed to the duty-tax treatment and other perks given to these vehicles.

For instance, a Lexus car in the US could sell for $200,000 with all the taxes but ends up only at $100,000 a unit because of the removal of taxes.

In the Philippines, hybrid vehicles are slapped with import duty, excise tax, vat vat and sales tax and 4 percent municipal tax.

Without these taxes, a P2.3-million hybrid could sell at considerably lower price of P1.6 million.

Airlines Seek Customs Overtime Padding Probe

Airline industry is willing to cooperate with the Ombudsman in investigating a complaint filed by airport Customs examiners against their immediate seniors for apparently stuffing their overtime claims with airline companies, and pocketing, instead of distributing properly, the money that is being collected.

The spokesman for the Board of Airline Representatives (VBAR), Mr. Bayani Agabin, mentioned yesterday that the complant supports “our longstanding suspicion of overcharging and abuse of this overtime arrangement. We are thankful that the present administration has decided to do away with the backward practice of a single shift from 8 in the morning to 5 in the afternoon plus overtime, and instead operate 24/7 on three shifts at key ports as is done worldwide.”

Airlines paid airport Customs approximately P2 billion since the early 1990s until 2005, unfortunately when they decided to stop paying, airport Customs sought them to double their charges.

There about 200 Customs employees at the airport. Which then the airlines challenged the overtime practice in court, arguing that Customs employees are government staffs, not theirs.

The complaint before the Ombudsman was filed in August 2009 by some examiners who did not get their share.

Agabin said that it will send a strong message to stumbling civil servants and that the resolution of this case would resound across the government.

Agabin also mentioned that the Ombudsman should find out if the check payments from individual airlines were deposited to the government accounts and it is properly accounted and distributed, whether the recipients professed that these are part of their taxable compensation income.

“If they encashed the checks and divided it among themselves, then this constitutes malversation which carries a maximum penalty of life imprisonment,” he said. “This may also amount to a violation of Civil Service Commission rules on double compensation, Commission on Audit rules on accounting and disbursement of funds, and tax laws on payment of taxes on income.” Agabin added.

According to the complaint, Customs collectors prepare two sets of payroll.

One is presented to the airline that shows the complete list of examiners even if some are actually absent, on leave or had been transferred, while the other is the “final payroll” where those actually absent were taken off the list and their share is allegedly pocketed by the superiors, the complaint said.

The airport Customs personnel is also been abused this overtime practice by adding meals and transportation allowances to their billings, and charging four times if four planes land for the same hour they serve, he said.

‘Justice Is Alive In The Philippines’

This was the principal emotion of Filipino citizens on the Supreme Court’s final decision ordering the distribution of almost 5,000 hectares of land to Hacienda Luisita farmer-beneficiaries.

Hacienda Luisita became a trending topic on Twitter on Tuesday after the ruling was released.

Twitter user Marin Jabin said, “Justice has finally served the people who deserve her!”

User Lar T tweeted, “Hacienda Luisita finally to be distributed to its rightful owners. Buhay ang hustisya sa Pilipinas (Justice is alive in the Philippines).”

While, Twitter user Stephanie Lim said she was happy for the farmers. “I hope that the distribution will happen as soon as possible.”

Television personalities also shared their thoughts through Twitter.

Actress Assunta de Rossi, who is married to Negros Occidental Representative Julio “Jules” Ledesma IV,  said, “Finally, Hacienda Luisita farmers will get what they deserve. Yes to land distribution! No to greed!”

“So happy for the farmers of Hacienda Luisita. Well deserved!” Claudine Trillo tweeted.

Posts on social networking site Facebook also praised the high court’s ruling.

‘Yellow men’

“After a lengthy war, the farmers finally get a taste of vengeance,” said Facebook user Ian Kim P. Gahoy.

“JUSTICE,” said Facebook user Gabriel Borlongan.

Facebook user Jom Pineda said, “The SC justices voted 14-0 for Hacienda Luisita land distribution. Rejoice to Luisita farmers!”

There were also users who were skeptical about the decision.

Twitter user Dinz Francisco said, “Luisita finally to be distributed but I don’t think the yellow men will agree. They will bend all the rules to take it back.”

Hoping for no flip-flop

The sprawling sugar-estate is owned by President Benigno Aquino III’s Cojuanco clan.

Chief Justice Renato Corona has said his impeachment “is a revenge and a shameless attempt to stop the distribution of Hacienda Luisita lands.”

“If this is really the end of this case, just how long will it take to distribute the land to the farmers? 1 year, 5 years, 20 years? In the Philippines, the law moves slower than a Carabao,” said user Jon in a comment on INQUIRER.net.

“Hope the SC won’t flip-flop on this. Congrats to the farmers. Use the land wisely,” said user magsasakasanayon in another comment on the Inquirer website.

In the articles of impeachment against Corona, Article 3 refers to the lack of probity, integrity and independence resulting in flip-flopping decisions.

PAL Leaves Mediation Offer In Labor Row To New Management

The flag carrier, Philippine Airlines (PAL) refused to comment whether they will accept the offer that the Court of Appeals (CA) offered, to mediate in the labor argument caused by the early retirement of some 2, 300 workers last year.

In its place, the decision will be left to the new management led by San Miguel Corporation, President Ramon Ant, whose group will reportedly fill some $500 million to fund the struggling airline’s re-fleeting and modernization program.

“We are in the transition phase, so it’s best for the new leaders to decide regarding legal issues,” Vice president for corporate communications of PAL, Joey de Guzman said.

The Court of Appeals (CA) tenth division asked PAL and the PAL Employees Association (PALEA) in a resolution dated March 27, if they are prepare to bring the issue before the Philippine Mediation Center-Court of Appeals for “a final opportunity to explore the possibility of coming up with an amicable settlement of their dispute.”

It almost took 8 months for the appellate court to came up with the suggestion to end the labor row after Malacañang found it admissible for PAL to outsource its catering, ground handling and call center reservation units among losses in the past years.

Compensation packages, which floated between P120, 000 and P2.4 million, were dispersed weeks following the takeover of new service providers in October 1 last year.

But the union endured the firm in its bid to fight the spinoff program as it considered the Court of Appeals’ mediation offer as an opening to end the dispute despite attacks on its campout and spending the Christmas holidays at the picket lines.

Last Friday, PALEA submitted its reply of affirmation to the Court of Appeals.

Philippines Ignores China Demand To Quit Shoal

Declaring “that’s our territory” and giving a warning to Chinese vessels to back off, the Philippine officials last Wednesday disregarded China’s demand to remove Filipino vessels from Panatag Shoal.

BRP Edsa, a Philippine Coast Guard search and rescue vessel, along with an archaeological survey mission aboard the MY Sarangani and a fishing boat was remained in the area, facing off two Chinese maritime surveillance vessels and a fishing boat.

Last Monday an order was demanded by China that all Filipino vessels should be out or clear the area, which then calls Huangyan Island and which is known internationally as Scarborough Shoal, and also sent an aircraft to buzz a Philippine fishing boat in the second, such incident happened since Saturday.

According to Communications Secretary Ricky Carandang, “We’re also telling their ships to do the same,” he told the reporters.  “That’s our territory and we’re also saying the same thing to their ships.”

Carandang said talks between the Philippines and China were continuing. “Tensions have not degenerated,” he said, and the fact “that not a shot has been fired is already a sign that the situation is not deteriorating.”

Arbitration call ignored

Philippines and China have decided to settle the argument diplomatically but have both asserted on their ownership of the shoal, extending an eight-day deadlock on the high seas.

Last Tuesday, Foreign Secretary Albert Del Rosario, asked China to bring the debate to the International Tribunal on the Law of the Sea for negotiation. The Chinese embassy, though, disregarded the proposal and asked the Philippines to extract its vessels from the shoal “and restore peace and stability there.”

The latest standoff between Manila and Beijing over disputed islands in the West Philippine Sea (South China Sea) began on April 8 when a Philippine Navy plane spotted eight Chinese fishing boats in Panatag, a cluster of reefs and islands around a lagoon.

BRP Gregorio Del Pilar, the Philippine Navy flagship was transmitted to the area on April 10 and its officials boarded the fishing boats, but Chinese maritime surveillance vessel interposed. The fishing boats glided last Friday night.

The argument is just one of a countless claims over islands, reefs and shoals in the South China Sea that quarry china against the Philippines, Vietnam, Brunei, Malaysia and Taiwan.

Conflict has increased in the past 2 years over worries that China is becoming more aggressive in its claims to the sea that overlaps shipping lanes between East Asia and Europe also the Middle East.

Even though supplicant countries have vowed to fix the territorial gaps peacefully, the arguments have vented in violence in the past which includes the 1988 when China and Vietnam collided in the Spratly Islands in a defiance that killed 64 Vietnamese soldiers. Many fear the disagreements that became Asia’s next flash point for armed conflict.

Vietnam held a maritime ceremony last Monday near the area where the event happened to remember the dead soldiers, state-controlled media reported.

Numerous rounds of talks have failed to end the impasse at Panatag, which is 872 kilometer from Hainan province, China’s next-door territory to the shoal.

Ancient Chinese shipwreck

Zhang Hua, Chinese embassy spokesperson, acknowledged that the UN Convention on the Law of the Sea, or Unclos, permits countries to claim an exclusive economic zone but was then reported that Philippines could not exercise sovereignty on areas within those waters that are owned by other countries.

One ancient Chinese shipwreck could be found at Panatag, but the Philippine research ship has no right to rescue it, Zhang said. “We urge the archaeological vessel to leave the area immediately,” Zhang said in a statement.

‘We will not leave’

In an interview with the reporters last Wednesday, Defense Secretary Voltaire De Gazmin called on Filipinos to come together and let the world know that ”we are being bullied” by China.

Also on Wednesday, Bayan Muna Representatives Teodoro Casiño and Neri Colmenares filed a resolution condemning China and calling for an inquiry into the government’s failure to assert sovereignty over the shoal.

“We also do not want to go to war, but we must assert our sovereignty, through whatever means we can,” Casiño said.

On Tuesday, Gazmin said, “We will fight for what is ours. We are in the area and we will not leave while we continue the talks” between the DFA and Chinese authorities.

BIR: No More Deadline Extension

Respective individuals and corporations received a reminder coming from the Bureau of Internal Revenue (BIR) that they have only until today to file their 2011 income tax returns (ITRs).

Ms. Kim S. Jacinto Henares, BIR Commissioner, provided specific instructions to all revenue deputy and assistant commissioners in supervising the tax filing operations on the regional and district levels, mainly those in Metro Manila where a lot of taxpayers are based.

Including the 25% surcharge and 20% interest per year, she highlighted that April 16 is the deadline and will not be extended, if so, fines will be obligatory on late filers.

BIR chief uttered that in case of purposive or intentional neglect to file a return, the present surcharge will be increased to 50 percent of the tax due.

Whether single or married, an individual taxpayer is allowed of the basic personal immunity of P50,000 plus P25,000 for each dependent child but not exceeding four. Only the other half reporting income can get the personal immunity.

The supplementary exemption for children shall be obtained by the husband, unless he waives his right in favor of his wife.

In the case of legally separated spouses, the supplementary exemption shall be claimed by the spouse who has safekeeping of the dependents.

Required to file ITRs are Filipino citizens residing here, Filipinos residing abroad but earning income here and foreigners residing and deriving income from the country.

An individual is excused from filing an ITR if his revenue does not surpass his total personal and additional exemptions and whose income has been subjected to final withholding tax.

Also exempted from this are the minimum wage earners and Overseas Filipino Workers (OFW) as far as their earnings from such employment are concerned.

An OFW is however required to file return and pay taxes if he derives income from sources within the country, say operating a grocery store and apartment houses.

An individual is not required to file ITR but may voluntarily submit one for purposes of loans and foreign travel requirements.

MERALCO Rates Up This Month

The power distributor, Manila Electric Railroad and Light Company (MERALCO), announced yesterday that their customers would have to shoulder higher electricity rates for this month.

Compared from the previous month of having P5.33 per kilowatt-hour, MERALCO’s generation charge will be P5.66, an increase of 33 centavos per kilowatt-hour for the billing month of April.

“Charges from WESM, which contributed seven percent to MERALCO’s power requirements, were higher by P2.46 per kwh compared to the level in the previous month,” the power distributor said.

“The output of hydroelectric plants declined last month, prompting the grid to rely on more expensive oil-based power plants to meet power requirements,” MERALCO added.

A data from MERALCO showed that there was a peak demand for the Luzon grid and rose by more than 300 megawatts (MW) at the beginning of summer.

MERALCO uttered that temporarily the power generation charge of IPPs went up by 24 centavos per kilowatt-hour after a mechanical difficulty that limits the utilization of the 460 megawatts (MW) Quezon Power coal plant.

IPPs interpreted a 44% of MERALCO’s power requirements for the supply month of March.

The price increase wasn’t able to offset due to the nine-centavo per kilowatt-hour decline in the generation charge of National power Corporation, which accounted for 49% of the total supply.

The electricity bill’s biggest component, which is the generation charge, accounts for 56% of the customer’s average monthly power bill. This charge goes directly to MERALCO’s power suppliers.

MERALCO said that the cost of power traded by generating companies could change monthly, based on several external factors such as the supply-demand situation, foreign exchange rate and furl prices.

The consumers need to be efficient in using energy among traditionally higher consumption during the summer season.

Power usage typically rise in dry seasons as appliances work doubly hard in this conditions and more household members are just staying indoor during the summer period.