PHILDEVFINANCE (old news)

Monday, June 6, 2011

Rural bankers group calls for proportionality in amending RB Act

Proportionality should be a primary consideration in amending the Rural
Bank Act of 1992 which both chambers of Congress are being urged to tackle.

Former Rural Bankers Association of the Philippines (RBAP) president
Tomas Gomez IV stressed this point when interviewed during the 58th
annual convention of the association on the bill proposing the
long-sought amendment to the law governing rural banks.

Provisions of the bill seek to allow foreigners to have a stake in local
rural banks and at the same time strengthening the regulatory oversight
of the Bangko Sentral ng Pilipinas (BSP) on these financial institutions
which are crucial in the development of far-flung communities.

The issue of proportionality as what Gomez had pointed out, has been a
collateral provision that rural bankers are fighting for along with
allowing foreign capital infusion under the amended law.

While rural banks have waited for too long for the amended law, it
should, however, be assured in being carefully crafted to consider the
unique situations among rural banks in the Philippines.

The RBAP is satisfied with the way the BSP thus far had taken great care
to assure proportionality in regulating banks in that its rules do not
apply similarly to all types of banks such as what was stated by BSP
deputy governor Nestor Espenilla's speech during the convention on the
matter of governance at the board level.

Espenilla indicated the BSP may relax rules on rural banks on required
committees in their board because of the fact there are not enough board
members to go around.

Despite the BSP's supportive stance, however, such flexibility for rural
banks should be enshrined in a law.

Among flexibilities that rural banks are seeking under the law are
reduced penalty charges relative to bigger commercial banks, a graduated
approach in capital buildup compared to the Basel II requirement for a
one time implementation for commercial banks, allowing foreign equity to
inject much needed capital in the rural banking sector to expand its
outreach to serve more customers and obtain additional capital to invest
in new technologies, expand infrastructure, improve management, and
improve lending capacity.

Foreign capital will also put rural banks on a level playing field with
its thrift and commercial bank counterparts that are able to take in
foreign partnerships.

The working relationship among rural banks and BSP the regulator is the
envy of other countries and the continuing dialogue that banks have with
the BSP assures an open line of communication between the regulator and
the regulated.

Such a cordial relationship with the regulating agency is becoming more
of a necessity as consolidation becomes more prevalent as a result of
economic dictates or the need for a certain scale to be more effective
that is expected to result to fewer but stronger rural banks.

As of now the rural banking sector is healthy, thanks to the cooperative
work between the RBAP and the BSP. Rural banks, at the moment, has a 19
percent adequacy ratio and continues to be profitable.

From 2000 to 2009 based on figures of the BSP, return on equity of the
rural banking sector is higher than commercial thrifts banks
consistently every year.

The generally robust health of rural banks, in turn, allows them to
offer more services and products.

A healthy and competitive rural banking sector means more services and
sources for banks to reach out to the unbanked sector of the society.

Consolidation would be a natural effect, meanwhile, of rural banks'
pursuit for improved and wider services.

In the meantime, while the rural banking sector exist in the volatile
state of seeking its ideal form, amending the law for it to conform with
current situations will act as a catalyst to speed up its development.

The target right now is for rural banks to be present in at least 30
percent of all municipalities in the country.

Already, rural banks through the use of modern technology as mobile
phones have succeeded in extending banking services to more Filipinos
beyond the physical reach of most banks.

The challenge is, however, for mobile phone banking accounts to
translate to the more formal bank accounts or savings accounts that
would raise tremendously the level of savings in the population which in
the country is currently the lowest in the Asian region.

All of these changes can be spurred with the right amendments to the
rural banking law.
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RECENT WAGE INCREASE IN METRO MANILA, PHILIPPINES HAS RAISED CEILING FOR MICROINSURANCE PACKAGES

RECENT WAGE INCREASE IN METRO MANILA, PHILIPPINES HAS RAISED CEILING FOR MICROINSURANCE PACKAGES

A small thing goes a long way. And in the case of the recent increase in the minimum wage of non-agricultural workers in Metro Manila, Philippines, this means a corresponding increase in microinsurance protection coverage.

Approved last May 9, 2001 and which took effect last May 26, 2011, the new minimum wages are now raised to a range of P389 to P426 per day. It so happened that the ceiling of microinsurance benefit packages in the Philippines is based on the minimum wage of non-agricultural workers in the country's Metro Manila Region.

For this, we will have to go back to Insurance Commission Memorandum Circular No. 9-2006, which was recently amended by Insurance Memorandum Circular 1-2010, dated January 29, 2010. They further redefined microinsurance, as follows:

"Microinsurance" product is a financial product or service that meets the risk protection of the poor, where:

a. The amount of premiums, contributions, fees or charges, computed on a daily basis, does not exceed five (5) percent of the current daily daily minimum wage for non-agricultural workers in Metro Manila, and;

b. The maximum sum of guaranteed benefits is not more than 500 times the daily minimum wage rate of non-agricultural workers in Metro Manila.

The maximum amount of premium and guaranteed benefits shall apply on a per product or per policy basis. In the case of of bundled product, this shall apply to each component of the bundled product..."

Going by the above rules, the daily premiums should not exceed Php 21.30 per day. That is derived by multiplying Php 426 by the factor of 0.05. On the other hand, also going by this rule, the microinsurance product may not exceed Php 213,000 per product. (That is 500 X Php 426 = Php 213,000).

Presently, the common amount of package package amounts to a guaranteed benefit of P150,000. This is based on the daily minimum wage of Php 300. Based on this amount, the resulting daily premium is Php 15.

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Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
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Sunday, June 5, 2011

Philippines urged to stand firm amid expensive start-up costs

Philippines urged to stand firm amid expensive start-up costs
By: Abigail L. Ho

Philippine Daily Inquirer

9:08 pm | Friday, June 3rd, 2011

Instead of complaining about an additional burden, the higher power rates that will result from the introduction of new renewable energy (RE) projects into the power mix should be treated as an investment that will generate additional benefits and jobs for the country over the long term.

Hans-Josef Fell, a member of the German Parliament and a key architect of Germany’s feed-in tariff (FIT) scheme, said getting more RE into the power mix would ease the country’s dependence on coal and oil, which were both predicted to become more scarce and, effectively, more expensive in coming years.

In Germany’s case, he said the introduction of FIT rates cost an additional burden of 8.2 billion euros a year on all power users. Having more RE in the mix, however, also allowed Germany to avoid 7.4 billion euros worth of fossil fuel imports, as well as 15.4 billion euros in external costs associated with such imports.

Also, the 26 billion euros worth of new RE projects generated thousands of jobs: from just 30,000 in 1998 to more than 500,000 jobs last year, he said.
“We didn’t really suffer as a country because of the additional costs. The German economy actually became more competitive when it started using more RE,” he said. “We don’t really feel the rising prices in the conventional energy sector because we’re using more RE. If the Philippines goes into RE, it will become more competitive and the country will no longer have to depend too much on expensive oil and coal.”

Businesses, consumers, and even the Department of Trade and Industry, had all expressed apprehension over the impending imposition of an additional charge related to RE.

Unlike traditional power sources, the Renewable Energy Act of 2008 provided that a FIT system be put in place for RE project developers.
This scheme assures RE developers of future cash flows, as electricity end-users will be charged fixed amounts to cover the production of energy from renewable sources. With this in place, utilities can spread the cost of clean power among its customers.

The FIT rules are expected to provide an incentive for investors to go into RE development and production, as the mechanism serves as an assurance of stable pricing for energy from renewable sources.

The applicable FITs are based on installation targets for each technology and the timeframes for such installations to be completed. FITs can also be differentiated by means of plant size and whether the plants’ output is dispatched during peak or off-peak periods.

Payment for the use of clean energy will come from a uniform per-kilowatt-hour charge, dubbed Feed-in Tariff Allowance (FIT-All), which will be collected from all electricity end-users.

Saturday, June 4, 2011

New BSP rules allow banks to outsource ATM upkeep

New BSP rules allow banks to outsource ATM upkeep

BANKS CAN now outsource the servicing of their offsite automated teller machines (ATM) to third-party service providers, the Bangko Sentral ng Pilipinas (BSP) said.

Banks may now outsource the servicing of their off-site ATMs.
The central bank released Circular No. 723, dated May 26, amending the Manual of Regulations for Banks to include ATM servicing for offsite units among the services that banks may outsource to third-party service providers.

The Monetary Board has approved the outsourcing of the following services: the replenishment of cash, the monitoring of the online availability of the ATM and the forecasting of cash requirements.

Third-party service providers are also allowed to conduct first-line maintenance, such as troubleshooting, replenishment of paper and toner and the assessment if second-line maintenance is necessary.

Banks, however, remain responsible for the performance of their service providers “to the same extent as it was before the transfer of said activities.”

The outsourcing of activities should also not impede the supervision of the BSP, the circular stated.

The banks are therefore required to ensure that their third-party service providers are registered with the Department of Labor and Employment.

They should also regularly monitor the service providers’ performance and amend their existing Business Continuity Plans to include the risks brought about by the outsourced services.

Should the third-party service provider enter into any sub-contracting arrangement with other businesses, the banks are must notify the BSP in advance.

Lastly, the banks must ensure that the service providers strictly observe the confidentiality of banking information they may have access to in servicing the ATMs.

The BSP earlier reported that the number of installed ATMs jumped by 11% last year compared to 2009, as banks continued to make banking more convenient for clients.

Installed ATMs numbered 9,370 as of December 2010, up from 8,458 a year before. -- Diane Claire J. Jiao

Meralco sets smart grid investment

Meralco sets smart grid investment

By MYRNA M. VELASCO

June 2, 2011, 1:47am

MANILA, Philippines — Smart grid invasion in the electricity system is always hobbled by questions whether the technology or the business trend must come first, but in the investment blueprint being prepared by power utility giant Manila Electric Company (Meralco), it wants to address both side-by-side.

Meralco president and chief executive officer Manuel V. Pangilinan noted that they are working on a rational business model for their smart grid investment – in the sense that the technology can provide convenience and efficiency in usage and that the customer would also want or patronize it.

Advancing into a modern system from an analog grid, according to the company chief executive, forms a key part of their next round of capital outlays.

“We are preparing for the introduction of smart grid…we will have fairly significant capex (capital expenditure) for it,” Pangilinan added, noting that the end-goal would be to have a smart grid system that would work ably both for the utility and the customer service end of the business.

Meralco senior vice president and corporate marketing head Alfredo Panlilio said the company’s venture into smart grid has been envisioned to stimulate Filipino consumers’ awareness on smart homes, automated home systems, intelligent metering and more efficient service that can be made available by their power utility. But he enthused that the utility company must also deal first with the economic realities of setting up a more complex system into its network.

“For the smart meters, we can build a sophisticated system, but what if nobody buys it? So we want to see adoption by customers in economic terms,” he stressed.

Intelligent meters may properly apprise a particular customer on its volume of consumption and which of its appliances are power-intensive; hence, giving the end-user the leeway to plan on the mode and pattern of electricity usage. In terms of monitoring power interruptions, ‘smart grid’ technologies also have innate capabilities to track down affected areas through the installation of a sensor system, thus customer concerns and complaints can be better addressed.

The project blueprint cast by Meralco would also include prepaid metering system; and eventually the integration of electric vehicles into its network. In other countries, smart grids also serve as viable technology support for distributed generation and on the integration of renewable energy into the system.

Having been an affiliate company of the country’s telecommunications giant (Philippine Long Distance Company), Meralco expects beneficial synergy that they can employ for their smart grid project, especially in the area of pursuing “online interface” between the utility and the customer.

Beyond installing the smart meters in homes or establishments, typical features of smart grid delve on having greater automation to make the power system more efficient and the deployment of digital technology to provide customers more information about their usage of electricity

BSP chief urges OFW families to save, invest regularly

BSP chief urges OFW families to save, invest regularly

By Lawrence Agcaoili (The Philippine Star)

Updated May 09, 2011 12:00 AM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is encouraging beneficiaries of remittances from their loved ones working overseas to save and invest regularly to improve the financial condition of the economy.

BSP Governor Amando M. Tetangco Jr. said in his speech during a policy forum on ovearseas Filipinos that there is a need to harness remittances from migrant and overseas Filipinos for economic and social development.

“While consumption generates economic growth, it is the allocation of remittances to savings and investments that will improve the financial condition of households and that of the entire economy in the long term,” Tetangco stressed.

He noted that results of the BSP’s Consumer Expectations Survey for the first quarter of the year indicated that the percentage of households of overseas Filipino workers that set aside money for savings has increased to 41.4 percent compared to only 7.2 percent in the first quarter of 2007 when the first survey was conducted.

However, he said that the percentage of households that used part of their remittance for investments reached only 5.7 percent in the first quarter of the year from 2.3 percent four years earlier.

“We do have a long way to go in terms of fostering investments among OFW households,” he added.

According to Tetangco, there is a need to establish a roadmap that would encourage OFW households to expand from pure consumption to include savings and investing regularly.

The BSP chief pointed out that the central bank has been working on a number of activities to mobilize remittances to fund productive activities and maximize the development potential of remittances.

For one, he said the BSP has encouraged and authorized commercial banks to offer specialized investment products and services to OFWs such as the mutlicurrency retail treasury bonds allowing OFWs to invest in bond instruments for as low as $100 or 100 euros.

In 2008, he explained that the Land Bank of the Philippines and the Development Bank of the Philippines were authorized to promote hedging instruments and long-term negotiable certificate of deposits.

Furthermore, the BSP has conducted 48 financial lectures across the country for about 6,000 dependents of OFWs for the past five years.

It has also conducted 14 financial lectures abroad for nearly 2,000 OFWs in Hong Kong, Singapore, South Korea, Japan, Saudi Arabia, Bahrain, Qatar, Italy, and the United Kingdom.

“Our objective is to empower our migrant workers in partnership with their families to save, invest, and grow their money for the long term,” Tetangco said.

The money sent home by Filipinos abroad are used by households for education, healthcare, purchase of real properties, house improvements, savings, investments, and even for small business.

OFW remittances went up by 8.2 percent to a new record level of $18.8 billion last year and contributed about 10 percent of the country’s domestic output as measured by the gross domestic product (GDP).

The BSP has lowered the growth target for overseas Filipino workers’ (OFW) remittances to seven percent or $20.1 billion instead of eight percent or $20.1 billion this year from 8.2 percent to a record $18.76 billion last year due to the political tensions in Middle East and North African (MENA) states as well as the disaster in Japan.

BSP revises MOU with banks under PCA to ease compliance

BSP revises MOU with banks under PCA to ease compliance

By LEE C. CHIPONGIAN

June 3, 2011, 2:13am

MANILA, Philippines — For banks placed under prompt corrective action (PCA) for capital rehabilitation, the Bangko Sentral ng Pilipinas (BSP) has revised procedures in drafting the memorandum of understanding (MOU) for banks initiated into the PCA, also called BSP’s “ICU,” to make it easier for banks to commit to a recovery plan.

BSP Director Chichi Fonacier of the Supervision and Examination Sector, in a memo, said the standard or basic MOU provisions is being revised to “secure the commitments of banks expediently” and to “implement action plans that will restore banks’ soundness and viability.”

Banks under PCA has to bring fresh capital within three years, of which 30 percent of the required capital should be in within the first year of the PCA period.

Banks initiated into the PCA are required to submit a board-approved PCA plan within 90 days from receiving the notice from the BSP. The PCA plan, mainly, contains the banks’ proposed capital restoration plan, which should detail how they plan to infuse needed capital.

Fonacier said in the memo that the MOU must now contain remedial actions and corrective measures that will “address the specific underlying weaknesses of the bank.”

The PCA plan also includes the business improvement plan and the corporate governance reforms that the banks have to commit to before the BSP approves the rehab proposal.

Under the present system, a bank found in the early stages of distress and non-compliance with standard conditions and ratings is placed under PCA. When all options have failed, the bank is ordered closed by the BSP’s monetary body.

Based on its charter, the Philippine Deposit Insurance Corp. extends financial assistance to banks in order to protect the interest of depositors but the assistance is granted only if there is a viable rehabilitation plan, including capital recovery.

Germany's Bosch Group eyes renewable energy ventures, projects under PPP

Germany's Bosch Group eyes renewable energy ventures, projects under PPP

By LEE C. CHIPONGIAN

June 4, 2011, 1:05am

MANILA, Philippines — German-based Bosch Group is interested in participating in the government’s public-private partnership (PPP) program, in several supply contracts in the renewable energy sector, as well as further growing its electronics operations in the Philippines.

"We are always looking for opportunities in the Philippines and we would like to promote (the country) as an investment (site),” said Joseph Hong, managing director of Robert Bosch Inc. Philippines. “We really have to sell the Philippines because it has a huge domestic market.”

Bosch Philippines is considering looking into some of the Aquino government’s PPP and the RE sector. "It all depends on the set of incentives,” said Hong.

The German company operates an automotive after-market and power tools business locally, and in 2008 it set up a business process outsourcing site. In addition to drives and controls (hydraulics), packaging technology and security systems in the country, Bosch recently added thermo-technology (heating systems) and automotive original equipment (OE) to its local portfolio.

For this year, the company expects to grow by 20 percent, modest compared to 2010’s 23 percent growth. Hong predicts that the global recovery in the automotive industry last year may continue in 2011, especially from sustained demand for power tools and automotive, and the strong market for replacement and maintenance.

Hong said the company is particularly keen on electronics manufacturing as possible investments, to complement existing manufacturing operations in China, Malaysia, Thailand, Japan, Korea and India.

In a press statement, Bosch said its local business generated 16 million euros last year while it first quarter results support sustained growth.

Overall the Bosch Group – a leading global supplier of innovative technologies and services in the areas of automotive and industrial technology, consumer goods and building technology – generated sales of 47.3 billion euros in 2010, up 24 percent year-on-year.

In Asia Pacific, Bosch sales grew by 43 percent to 11 billion euros in 2010, representing 23 percent of the Bosch Group’s sales, and making it the second most important region for sales after Europe.

Last year Bosch Philippines grew by 23 percent, generating sales of 16 million euros in 2010. The company also experienced a strong first quarter 2011 with brisk sales generated through its automotive aftermarket and power tools business divisions, which grew by 19 and 49 percent, respectively.

“The company’s strong growth in the Philippine market during the past year validates the Bosch Group’s long-term strategy for the country,” Hong said. “Diversification through innovative products as well as business lines and our expanded local presence contributed to the very positive development last year.”

SB Corp loan releases reach P5.2 billion as of March

SB Corp loan releases reach P5.2 billion as of March

By Ted P. Torres (The Philippine Star)
Updated June 02, 2011 12:00 AM

MANILA, Philippines - Small Business Corp. (SB Corp.) has released total loans of P5.2 billion under the wholesale microfinance lending program as of the first quarter of 2011. SB Corp. is a government agency allied with the Department of Trade and Industry (DTI).

From January to March this year alone, it released P387 million, doubled from P191 million in the same period in 2010.The loans were channeled through its 148 accredited microfinance institutions (MFIs) all over the country.

SBC president and chief operating officer Benel P. Lagua said loans to the livelihood sector now comprise 50 percent of its total loan releases of P769.17 million in the first quarter.

“This is a clear indication of SB Corp.’s steadfast commitment to intensify efforts for enterprise development among the poor.” Lagua said.

The target end-borrowers of SBC’s wholesale microfinance are pre-enterprise micros, from start-up to graduating micros, with funding needs of not more than P150,000.

From just P16 million in 2002, releases under the program cumulatively reached P5.2 billion in end-March.

“The performance of our microfinance programs vastly exceed our expectations,” Lagua explained.

SBC’s direct lending also increased 82 percent in the first quarter. This is due to the marked increase in enterprise lending by its North Luzon and Mindanao offices.

Overall, SBC has funded P29.8 billion in loans to micro, small and medium enterprises since 2002. It has also taken steps in going beyond financing by offering capacity building programs to both its enterprise clients and bank partners.

As of March 2011, SBC has trained 10 rural banks on the use of its risk-based lending technology and has three newly signed agreements with Country Rural Bank of Taguig, Cooperative Bank of Benguet and Banco Lagawe. It has also trained a total of 105 client and non-client entrepreneurs on enterprise enhancement, business planning and computerized accounting systems.

It likewise opened new desk offices in Palawan, Bacolod and Butuan.

Last year, loan releases reached P4.2 billion, from P2.9 billion in 2009.

In the same period, largest lending portfolio went to wholesale sector or to partner financial institutions (PFIs), which, in turn, lend to microentrepreneurs, small, and medium enterprises. PFIs are mainly thrift and rural banks as well as cooperatives.

Banks seek compromise on law requiring lending to agri-agra sector

Banks seek compromise on law requiring lending to agri-agra sector

By: Michelle V. Remo
Philippine Daily Inquirer

4:14 am | Thursday, June 2nd, 2011

MANILA, Philippines—The Bankers Association of the Philippines maintains its stand against the new and stricter version of the Agri-Agra law, hoping to strike a compromise deal with regulators and legislators in implementing the law.
Alberto Villarosa, president and chief executive officer of Security Bank, an active member of BAP, said BAP officials have been holding discussions with authorities on how the Agri-Agra law could be less adverse to the lending flexibility of banks in the country.

“We want a mutually beneficial solution to the problem,” Villarosa said in an ambush interview with reporters.

He said BAP has been hoping for an outcome that would consider the banks’ concerns.

The Agri-Agra law mandates banks to allocate 25 percent of their loanable funds to the agriculture sector. The old law provides alternative forms of compliance. For instance, lending to education and housing sectors were deemed alternative means to comply to the law.

The new and stricter version, RA 10000 that was enacted in 2010, has scrapped the alternative forms of compliance with the law. It likewise imposes stiffer penalties on non-compliance.

It further states that of the 25 percent allotted to the agriculture sector, 10 percent must be for agrarian reform beneficiaries, while 15 percent should be for agricultural credit, which includes lending to finance purchase of agriculture equipment.

Legislators earlier said the stricter version of the law was meant to help develop the country’s farm sector, particularly by having banks strictly allocate a portion of their resources for lending to the sector.

Legislators earlier said making the Agri-Agra law stricter was necessary in achieving the intentions of the old law.

Alternative forms of compliance stated in the old law kept banks from truly supporting the growth of the agriculture sector, they said.

The BAP, an organization of universal and commercial banks in the country, however, expressed opposition to the new law, saying it would be counterproductive to its members.

According to the BAP, there are banks, particularly rural banks, that actually cater to the needs of the farm sector, but there are also those, like universal and commercial banks, that do not have the expertise in providing agricultural credit.

The organization also said mandated lending would counter the objective of observing prudent lending practices. With mandated lending, BAP said, banks would be forced to extend credit even to borrowers with low credit-worthiness just so they could comply with the provisions of the law.

Villarosa said he would like to see the relaxing of the requirements of the new Agri-Agra law after the talks among BAP representatives, legislators and regulators.

Friday, June 3, 2011

BPI, IFC seal clean energy risk-sharing arrangement

BPI, IFC seal clean energy risk-sharing arrangement

By Daxim Lucas
Philippine Daily Inquirer

MANILA, Philippines—One of the country’s largest banks has teamed up with the private financing arm of the World Bank to set up a risk-sharing facility meant to encourage lending to sustainable energy projects that mitigate climate change.

In a statement, the International Finance Corp. said it had entered into a partnership with Bank of the Philippine Islands to finance projects that promote sustainable and renewable energy.

The agreement—the first such accord to be signed by IFC and a financial institution in East Asia outside of China—comes on the heels of an attempt by nations to negotiate an international agreement to curb carbon dioxide emissions at the United Nations Climate Change Conference in Copenhagen.

“We are taking full advantage of IFC’s support and global experience to help develop our portfolio of sustainable energy loans and leases, and pursue the perceived higher-risk renewable energy market with greater confidence,” BPI chief operating officer Gil A. Buenaventura said in a statement.

In the past, IFC had supported BPI’s lending to energy efficiency projects through its Sustainable Energy Finance Program.

“The partnership between IFC and the Bank of the Philippine Islands is part of our strategy to scale up lending to projects in energy efficiency and renewable energy,” IFC director for global financial markets James Scriven said. “This is essential in enabling market-based approaches in developing countries to address climate change.”

IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets.

Along with its parent, the World Bank, it is seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries, through measures like lending support for sustainable energy projects.

Previous statements made by IFC officials indicated that the facility would be initially worth about $20 million. IFC plans to lend an average of P100 million each to about 20 projects under the scheme.

BPI, for its part, has so far booked about P1.2 billion in loans to at least five firms involved in sustainable energy projects.

So far, BPI has been undertaking project financing for large proponents such as the Aboitiz and Lopez energy firms which function independently of the joint IFC facility

BSP defines microfinance customers

BSP defines microfinance customers

THE CENTRAL bank has come up with new rules specifying who can buy microinsurance at the banks it supervises.

Memorandum No. 27, issued on May 25 and addressed to thrift, rural and cooperative banks, defines microfinance clients as individuals with microfinance loans or microcredit; individuals with microfiance savings deposit accounts or microdeposits; or other existing bank clients classified by the banks as poor or having low-income.

BSP Deputy Governor Nestor A. Espenilla, Jr., in a text message, said the central bank issued the memorandum as “banks wanted practical guidance” in determining who to sell microinsurance.

“Microinsurance... can be offered only to microfinance clients, so we needed to clarify who these are,” Pia Bernadette Roman-Tayag, BSP financial inclusion head, explained in a separate text message.

Circular 623 issued last year allowed thrift, rural and cooperative banks to distribute microinsurance.

P50,000 credit for OFWs approved

P50,000 credit for OFWs approved
By CHARISSA M. LUCI
June 2, 2011, 7:12pm

MANILA, Philippines — The House of Representatives has approved on third and final reading a bill granting credit assistance to overseas Filipino workers (OFWs).

Known as the "Overseas Workers Credit Assistance Act of 2011," House Bill 4539 seeks to mandate the Overseas Worker and Welfare Administration (OWWA) to provide a loan of not more than P50,000 to OFWs to finance their recruitment expenses, as well as the expenses of their families during the first months of their absence.

Under the bill, an overseas worker should have a valid employment contract processed through a licensed recruitment agency accredited by the Philippine Overseas Employment Administration (POEA) to avail himself of the loan.

Aurora Rep. Juan Edgardo Angara, who authored the bill, said the passage of bill “is in recognition of the million and one sacrifices that they have to endure in the search for social and economic redemption which they have failed to achieve at home."

Another author, Iloilo Rep. Augusto Syjuco reminded that it is the government’s obligation to look after the welfare and rights of the OFWs.

"The State shall promote the welfare and interests of the migrant workers and their families. It is the declared policy of the State to protect the interest of the overseas workers by providing them access to credit facilities even before their departure," he said.

Brunei open to reviving Islamic bank in Philippines

Brunei open to reviving Islamic bank in Phl
By Delon Porcalla (The Philippine Star)
Updated June 03, 2011 12:00 AM

President Aquino is briefed by International Container Terminal Services Inc. chairman and president Enrique Razon Jr. during his visit to the Muara Container Terminal in Brunei Darussalam recently. The terminal is operated by a Brunei-registered ICTSI subsidiary, New Muara Container Terminal Services Sbn Bhd.

Secretary Herminio Coloma of the Presidential Communications Operations Office said here yesterday that officials of QAF Brunei Sdn Bhd Co. Ltd. are receptive to the idea of reviving the Al Amanah Islamic Bank that was under the Development Bank of the Philippines.

“We’re asking the support of Brunei in exploring the possible revival of Amanah bank and the response of his royal highness, the prince, is that this could be a vehicle in promoting the Brunei-Indonesia-Malaysia-Philippines-East Asian Growth Area (BIMP-EAGA) investment,” he said.

Among the highlights of the discussions between President Aquino and Prince Abdul Qawi is the cooperation in the promotion of Islamic banking within BIMP-EAGA initiative.

Aquino met the head of QAF Brunei, Prince Qawi, first cousin of the crown prince.

He said the firm is also open to cooperating on halal food certification, aqua culture business, and property development.

“We also want to go significantly into halal food processing but to be able to achieve a breakthrough, we need to tool up and become capable in certification so there will be quality assurance of the products,” Aquino said.

Another proposal raised by the Philippines is aqua culture.

“We have sea urchin development in Bolinao, Pangasinan as well as milkfish development. They (QAF) are also interested in pursuing this,” he said.

Coloma told Manila-based reporters that the President’s meetings with business groups was fruitful, and the Mashhor Group of Companies of Brunei wants to develop the energy infrastructure in the country.

He said the administration is determined to pursue the use of compressed natural gas (CNG) for public transportation because it has available natural gas supply from the Malampaya fields in Palawan.

“We want to develop distribution facilities but this will require massive resources, considering the number of public transport that need to be prepared for conversion to CNG use,” he said, noting that this is the reason why the President approached Mashhor for possible collaboration.

However, Coloma said all the meetings are just initial discussions between the Philippines and Mashhor.

“Although not yet of the scale that we would like to see, this is the reason why this visit is aimed at bringing to the next level the quantum of trade and investment between the two countries,” he said.

Earlier, the President said that energy development in the Philippines is the brightest prospect of the visit.

He said his government wants Brunei to assist in laying the groundwork for a wide use of CNG for public transport since Brunei has been in the business for a long time.

Security Bank acquires Premiere Development Bank

Security Bank acquires Premiere Development Bank

SECURITY Bank announced Thursday its acquisition of 98 percent the outstanding capital stock of Premiere Development Bank (PDB) and its intention to acquire the remaining two percent of outstanding shares.

The transaction was priced at P1.3 billion, or 1.6x book value of Premiere Bank as of December 2010.

PDB is a private development bank incorporated in 1960 by Dr. Procopio C. Reyes under the name of Pasay City Development Bank. Its head office is located at Edsa cor. Magallanes Avenue, Makati City.

The major selling shareholders of Premiere Bank include the Puyat-Reyes family, the Madrigal-Gonzales family and the Rohatyn Group, a New York-based private investment firm specializing in emerging markets with US$3 billion in funds under management.

Security Bank's acquisition of Premiere Bank is part of its strategic plan to expand its branch network, build its loan portfolio and expand its customer base.

"Combining our people and resources, our two banks will continue to grow and provide the exceptional customer service we've always been known for in the banking community," said Security Bank president and CEO Alberto S. Villarosa.

In a separate statement, PDB president and CEO Herminio M. Famatigan Jr. said: "The sale of Premiere Bank to Security Bank marks the culmination of a very effective partnership between The Rohatyn Group, the Puyat-Reyes family, the Madrigal-Gonzales family, and the bank's senior management.

The four-year partnership has grown Premiere Bank by three times in terms of assets and, in the process, produced considerable added value for its shareholders. At this stage of Premiere Bank's development, its shareholders are best served if the bank becomes part of a larger banking franchise."

The acquisition of Premiere Bank will complement Security Bank's existing operations with a loan portfolio estimated at P3 billion and 20,000 loan customers, 37,000 depositors with an estimated P4.5 billion in deposits.

Premiere Bank's branch network is comprised of 21 branches in and around Metro Manila, as well as 17 branches in the provinces of Bulacan, Rizal, Laguna, Cavite and Batangas.

Villarosa said "the purchase of Premiere Bank would immediately expand our branch network by 30 percent to 170 branches and effectively increase our presence and competitive stance in the consumer, small and mid-sized business segments."

The acquisition comes at the heels of Security Bank's recently forged joint venture establishing a leasing company with Marubeni Corp. of Japan.

Security Bank is celebrating its 60th anniversary this year. (PR)

Thursday, June 2, 2011

Charcoal briquettes made of newspapers developed

Charcoal briquettes made of newspapers developed

(The Philippine Star)

MANILA, Philippines - Here’s a new product created out of scrap paper: charcoal briquette.

Briquette is a mixture of charcoal made from various materials molded in various sizes and shapes with the use of a binder or starch.

The new briquette has been named “Don King Uling” by its creator, Florentino Montemayor Jr., a retired official of a multinational corporation and now barangay councilor of Batong Malake, Los Baños, Laguna.

Don King Uling is a take-off from a noted donut because the briquette is shaped like the popular baked product.

It is made of old newspapers, kraft papers, cartolina and other types of used paper except the glossy ones. The materials are soaked in water overnight, shredded and compacted with the use of a pressing machine also devised b Montemayor.

“The product is used as a substitute for wood as charcoal fuel,” he said. “The project is particularly focused on informal settlers and poor barangay residents who use charcoal stoves.”

Since early last year when Don King Uling was conceived, more than a hundred families have been using the briquettes as more pressing machines were fabricated and sold at affordable cost to barangay settlers following the Los Baños Bañamos Festival, which commemorated the historic town’s 394th anniversary last Sept. 17.

Batong Malake officials have been helping sell the pressing machines to further spread its use.

They said, as quoted by Kathleen Lungub, a student at the UP Los Baños College of Development Communication: “With the growing number of briquette users, we do not only help the people save money; we also help in the conservation of forests in the long term.”

At least once a week, the Batong Malake committee on livelihood headed by Montemayor, together with councilor Allan Leron and Janos Lapiz, do house-to-house visits in communities to demonstrate and promote the use of portable, easy-to-operate pressing machine and scrap paper briquette.

One of the technology’s users, Merlie Casipo, 53, said: “Mas magandang gamiting and papel na panggatong dahil mas maningas. Nakatipid ka na dahil mabilis mag-apoy, nakabawas ka pa ng basura.”

A paper briquette is sold at P10 per kilo (eight pieces). One needs only four briquettes to cook a cup of rice.

Don King Uling is cheaper than a kilo of wood charcoal (P20).

The project has been supported by the Los Baños-based Department of Science and Technology-Forest Products Research and Development Institute (DOST-FPRDI).

FPRDI engineer Belen Bisana said: “The advantage of using the paper briquette in cooking is primarily the utilization of waste papers. Using the product is also an economical and practical thing. Briquettes can last for longer period compared to wood fuel.” – Rudy A. Fernandez

Impose total log ban now

Impose total log ban now
By Neal Cruz
Philippine Daily Inquirer
First Posted 05:27:00 02/04/2011

In the Philippines, areas that were not flooded before are now being flooded. The Visayas and Mindanao are right now being drenched with heavy rains. Pagasa said we will have a very wet summer and that more and stronger typhoons will slam into the country during the year. The Philippines is in the midst of a “climate-related creeping disaster,” Pagasa warned.

With the rains come the floods and landslides, and they are occurring so often that they are no longer big news. Among the causes are the bald mountainsides. Thick forests on the mountainsides were able to soak up the heavy rains before. Now, with the mountains bald, the waters rush down to the plains below and take with them soil and rocks in landslides that bury whole villages in their paths.

President Aquino has said he is planning a total log ban, but until now he has not followed that up. Meanwhile, time is running out.

Consumers of wood, such as the makers of furniture and woodcraft, have voiced their opposition to a total log ban. That is to be expected. But the safety and well-being of millions of Filipinos take precedence over the livelihood of wood users.

Wood users can go into tree farming. They can harvest what they plant after five years. In-between, they can import what they need.

The construction industry is also expected to protest a total log ban. The construction industry is the biggest user of wood. The sad part is that most of the wood is wasted. Most of the wood do not become part of a house. They are used as scaffolding and form lumber and end up as firewood after the house is finished.

This is very wasteful of a rapidly depleting natural resource. Modern contractors now use steel as scaffolding. These can be used again and again. And most parts of houses and buildings are no longer wood but steel, concrete and recycled plastic. In the United States, houses are made mostly of plastic. The walls look like wood, with grains and all, or like bricks, stucco, and other building materials. But they are all made of plastic or nylon. Bathrooms come in molded plastic. Toilet bowls, sinks, bathtubs, shower stalls come together in one package, ready for installation.

The beauty of synthetic materials is that they are water-proof, termite proof, and don’t rot and decay like wood. They are also easier and faster to install and much lighter than concrete and wood. Our construction industry should catch up with the times.

Stopping logging does not mean stopping only the big-time loggers with the logging concessions. The biggest destroyers of forest are the illegal loggers, the so-called “carabao loggers.” They enter forests and cut trees undetected. They cut the logs into lumber and then haul them to the lowlands by carabao. Others roll the logs down steep mountainsides to rivers and float them to where they can be hauled over land. Still others leave the logs on the mountainsides and wait for heavy rains and floods to wash them down to the rivers. That is why after a big flood, many rivers are choked with floating logs.

But a big destroyer of forests whom we have overlooked are the charcoal-makers. They cut down even small trees left by the loggers and burn them into charcoal. Charcoal-makers are decimating the trees at the Marikina Watershed Reservation. They have invaded the reforested area planted with Benguet pines in the Tanay area by the Seedling Bank Foundation.

Watersheds are like termite-eaten wood. The loggers and charcoal-makers do not cut the trees surrounding a forest. They cut the trees deep inside. So from the outside, the forests look undisturbed. Inside, however, there are no more trees, as if giant termites have ravished them.

Go into the watershed of Angat Dam or the watersheds of the other dams. You will find the sorry spectacle of the handiwork of the carabao loggers and charcoal-makers.

But where will the thousands of sidewalk barbecue stalls, ihaw-ihaw restaurants, and lechon manok stands get their charcoal? you ask. From farm wastes such as coconut coir and shells, palay husks, hay, sugarcane fronds, wood chips, leaves, cogon and talahib grass—any organic thing can be compressed into charcoal.

What do we do with the palay husks after milling? They are burned at roadsides. What do we do with the rice stalks left standing after a harvest. They are burned. Sugarcane fields are first burned before harvesting the cane. Cogon and talahib stands are routinely burned every summer. Millions of tons of coconut husks are left under the coconut groves after the copra have been extracted. Leaves are swept up and burned in backyards every day.

These are all a waste of energy and contributes to global warming. Carbon dioxide produced by burning rises to the ozone layer that traps sunlight that warms the globe and melts the ice sheets. The melted water raise the ocean levels and submerges low-lying islands and coastal areas. In time, the Philippines will no longer be a country of 7,000 islands. Many of the islands would disappear. So would the beach resorts in the bigger islands, including Boracay.

But the agricultural wastes don’t have to be burned. They can be turned into charcoal. That would provide the ihaw-ihaw stands their charcoal but at the same time save our remaining forests and the villages below them. The technology already exists to do that.

Green charcoal made from water lilies offers an alternative source of fuel

Green charcoal made from water lilies offers an alternative source of fuel

MANILA, 14 November 2008 (IRIN) - Thanks to a local invention, lakeshore communities in the Philippines will soon begin using water hyacinths as an alternative source of fuel and organic fertiliser.

"The world is badly in need of raw materials for biomass fuel that we can grow easily even in places that we don't expect," inventor Gonzalo Catan Jr told IRIN.

The abundance of unwanted water lilies on the shores of Laguna de Bay - one of Southeast Asia's biggest fresh-water bodies - provided an opportunity for Catan to showcase his invention.

The prize-winning technology recycles bio-waste into environment-friendly "green charcoal", a compact solid fuel providing a good alternative to liquefied petroleum gas for cooking and possibly industry.

The technology works by using a "threader machine" to shred the water lilies. Next, enzyme-producing microbes are added and finally, the mixture of treated water lilies is put in the sun to dry.

Organic fertiliser vermicast may also be produced from the lake's organic mud deposits but instead of microbes, earthworms are added to the mix. "Water the mixture twice a week and let earthworms eat them [hyacinths]," Catan explained.

Catan said it was important to produce organic fertiliser. "That is the mistake of many countries, including the US. Production of bio-fuel goes now to feed cars instead of feeding cattle. Agriculture is also important," he said.

Working with communities

Catan's company, Mapecon Green Charcoal Philippines Inc, was backed by the Department of Environment and Natural Resources (DENR) and local governments around Laguna de Bay.

One of Mapecon's community partners is the municipality of Cardona in the province of Rizal. Cardona has eight island villages right at the heart of Laguna de Bay.

According to one village chief, Balibago's Wilijandro Raymundo, the water lilies are especially abundant at this time of the year when the Amihan or cool northeast wind is blowing.

Photo: IRIN
Water-hyacinth "They are very thick. They grow as high as the human waist, and they are very heavy. They must be occupying 100 hectares of Balibago shoreline. It's almost impossible to pass through," Raymundo said.

The water lilies will stay in Cardona's shorelines until April or May when the wind changes direction, Raymundo added.

"Our residents will be able to benefit a lot once we begin producing green charcoal," Cardona's municipal planning officer Janet Ramos told IRIN. She said Catan had shown them an "improvised stove" fuelled by green charcoal instead of the usual liquefied petroleum gas.

The vermicast will also benefit farmers and small-holders, she added.

"We will look for a market for the products. That's part of our partnership. We will help in the marketing of the products that would be developed out of these otherwise nuisance plants," DENR secretary Lito Atienza told reporters during the signing of the agreement with Mapecon.

Nuisance plants

Mapecon's project will also help the lakeshore residents simply by collecting the unwanted plants. Growing so tall and thick, the water lilies make navigation very difficult.

"We cannot go out to fish. The water lilies are blocking our way. It's difficult for our people to report to school or to the offices on the mainland," Raymundo said.

"You can't just push them out of the way using bamboo poles. They have big roots," Ramos added.

As a result, travel time is doubled at this time of the year. The boats' engines are strained and more fuel is needed to reach neighbouring towns.

A report by the Laguna Lake Development Authority — the government agency tasked to protect the lake and its surrounding environmental resources — shows that the accumulation of water lilies on shorelines was causing poor water circulation, destruction of fish pens and fish due to the death and decay of aquatic plants, and increased water loss due to excess transpiration.

Filipino inventor promotes ‘green charcoal’

Filipino inventor promotes 'green charcoal'

ALAMINOS, LAGUNA — Seventy-year-old Filipino entomologist Gonzalo Catan is promoting the use of discarded plant wastes as an efficient and green fuel source.

"Green charcoal will solve the garbage problem and energy crisis in the country, particularly in small and remote communities who are off the power grid and cannot be reached by electricity," said Catan, executive vice president of Mapecon Philippines Inc.

Mapecon's subsidiary Mapecon Green Charcoal Philippines Inc. (MGCPI) produces green charcoal, activated carbon and organic fertilizer from plant waste and a unique set of microorganisms, called MBA 51. Catan developed them after his years of research in the field of entomology.

Green charcoal is environment-friendly because it only uses truckloads of biodegradable waste from water lilies, banana peelings, coconut waste, and other plant wastes.

"Green charcoal can produce heat from 6,500 kilo calories (Kcal) to 7,000 Kcal like a steaming thermal coal so it can run power plants and power an entire city as large as Davao that has 700 tons of waste from fruit peelings," Catan explained.

Dubbed the "father of green charcoal" in the Philippines, Catan started his own pest control company when he was 26. He said that he accidentally discovered green charcoal in 1995, when he was experimenting with organic fertilizer.
He had placed some organic fertilizer in a can. Then, a few days later, someone threw a lit cigarette into the can. Catan noted that the substance "glowed nicely."

Eyeing the potential of creating a slow-burning fuel from organic materials, he mixed up different combinations of plants, pressed the mixture together and dried them to see which combination will burn at a steady temperature.
"I continued the research because I know this invention could help Filipinos who have to walk many kilometers just to buy kerosene for lamps or firewood so they can have light in their homes," Catan said. "At the same time, it would save us money from importing costly fossil fuels that harm the environment."

To market the product, Catan developed a machine called "Organic Kooking," which is a hydrogen fuel generator system that uses green charcoal as its fuel. One of 70 local restaurants that are using the cooking system is Aristocrat's main commissary, shared MGCPI chief operating officer Hector Venzuela.
According to Venzuela, the patented green charcoal generator system only emits oxygen from splitting water components. Gas ranges, on the other hand, emit carbon monoxide and nitrogen dioxide.

The system can supply the power needs of agricultural plantation cooperatives, municipal halls, real estate development and small communities and towns with electricity needs of up to five megawatts.

"The only investment needed is when you buy the generator set (that costs over P1 million) that we exclusively import from a manufacturer in America," added Venzuela, who noted they are open to flexible paying schemes with cooperatives.

He said they will introduce the system to Mindanao agricultural cooperatives as a way to deal with power shortage and blackouts. The agricultural community's organic waste will become a stable source of raw material for manufacturing the green charcoal.

At present, Mapecon has 3.4 hectares of land in Laguna where 40 workers process green charcoal, vermicast fertilizer, and activated carbon.

A kilo of green charcoal costs under P80, which is higher than ordinary charcoal because of the technology needed to produce it. Over time, he eyes more demand will bring down the product prices.

"This (green charcoal) is my contribution to the Philippines and with the looming power crisis, I hope government agencies, cooperatives and private entities will see the benefits of adopting this technology," said Catan.

Organic fertilizer from river mud, 'green charcoal' from water lilies

Organic fertilizer from river mud, 'green charcoal' from water lilies

By Katherine Adraneda (The Philippine Star)

The Philippines is eyeing a revolutionary contribution to the world by turning filthy mud and water lilies into valuable resources that might just address problems on flooding and garbage.

This, as the Department of Environment and Natural Resources (DENR) and Laguna Lake Development Authority (LLDA) signed a 10-year memorandum of agreement (MOA) with a Filipino inventor who discovered that the grimy mud of Pasig River and Laguna Lake, as well as the massive population of water lilies that clog these waterways, can be converted into organic fertilizer and alternative fuel.

Gonzalo Catan Jr., executive vice president of Mapecon Green Charcoal Philippines Inc., said they have proven during earlier research and development efforts that mud taken from Pasig River and Laguna Lake is organic and can be used as component of a mixture to create vermicast, an organic fertilizer.

The latest MOA signed among DENR, LLDA, Mapecon, and the National Committee on Urban Pest Control (NCUPC) was a “supplemental agreement” to an earlier MOA dated July 26, 2006, which facilitated joint research and development on the recycling of water lilies and organic mud from Pasig River and Laguna Lake.

“We have found out that this project to convert an unwanted waste to a valuable and useful resource is workable. We have proven during our first research and development initiative that mud in Pasig River and Laguna Lake is a valuable raw material, as we have proven that it is organic,” Catan said.

According to Catan, organic mud and biomass — in this case, the water lilies — can be combined, and with a “proper mix” of enzymes and microorganisms, can be transformed into an absolute organic fertilizer.

He said 65 to 70 percent of mud from Pasig River and Laguna Lake is organic. Laguna Lake, which has a total area of 92, 000 hectares, has 2.5 meters of mud.

Catan also said that apart from mud, organic fertilizer can likewise be made from yard or market waste that is blended with biomass.

Meanwhile, Catan said water lilies can be a practical resource to produce “green charcoal” — a Philippine patented technology, which he invented and bagged a bronze during the International Invention Contest in Geneva, Switzerland in 1996.

The “green charcoal” bested 30 other finalists in the environment category of the competition.

Catan said water lilies could be processed into “green charcoal” through the introduction of microbes and enzymes.

The concoction would then be sun-dried to form “green charcoal,” which can be an alternative energy source.

Catan said “green charcoal” can be in the form of pellets, powder, briquettes or whatever form depending on the boiler used.

Unlike charcoal from wood, Catan said the emission of “green charcoal” is not dirty, explaining that it only releases hydrogen and not carbon dioxide, which is being blamed as one of the major causes of global warming and climate change.

Catan said water lilies are abundant in Pasig River and Laguna Lake, thus ensuring sustainable production of the alternative fuel.

Aside from water lilies, other materials that can be used to make “green charcoal” are green leaves, sugarcane tops, weeds of coconut, and rice straws.

Dr. Metodio Palaypay, NCUPC executive director, said some 5,500 tons of garbage is being generated daily in Metro Manila alone.

Palaypay said half of the trash generated in the metropolis is organic or biodegradable and can be transformed into “green charcoal.”

“This is to address the serious flooding problem (as well as) garbage problem that we have today. Sustainability of the project is not a problem because we have so much mud and water lilies in Pasig River and Laguna Lake,” Catan said.

For his part, Environment and Natural Resources Secretary Lito Atienza welcomed such green technologies, as he vowed to continue cleaning up water systems in the country.

Philippine President Orders Log Ban

Philippines President Orders Log Ban
Saturday, 19 February 2011 11:11
By Madonna T. Virola

Philippine President Benigno Aquino has imposed a nationwide moratorium on logging, following floods that have affected much of the country and left 70 people dead.

He said excessive logging was making these areas more prone to landslides and flooding.

Nonie Tamayo, an official from the Department of Environment, explains the decision.

“He went to several provinces in the south and Mindanao and he saw the devastating effects. So the executive order he mentioned is an investment for our environment and our future, to give some time for our forest to recover. We know that our country is more or less 30 million hectares and only 24 percent is under forest cover.”

But as Madonna Virola reports while welcoming the move, environmentalists warn this new ban will be extremely hard to implement.

Local environmental groups are gathered at meet Miriam the College in Quezon City.

They are writing the President a letter congratulating him on his executive order or EO to ban logging.

Dr. Nina Galang is a leading local environmentalist.

“We’re commending him for this bold step and we’re thanking him for including reforestation, for the plan to include other stakeholders. We had been advocating for a total log ban throughout the country since the 1980s. Then we’re already saying deforestation will lead to catastrophes. Now, we have global warming and climate change as an added force. We’ve been at the point of hopelessness already because of that situation but this EO gives us new hope .”

Experts have long warned that cutting down too many trees leads to soil erosion, heightening the risk of flooding and landslides.

Franciscan Priest Pete Montallana is President of Save Sierra Madre network.

“I’m happy he realized that we can’t sacrifice anymore the forests for economics. You prioritize the lives of the people over what you earn from the mountain like from cutting trees or even from mining.”

But he warns that this new ban will be extremely hard to implement.

He says big timber corporations are extremely powerful, and in some parts of the country illegal logging is allowed to go unpunished by corrupt officials from the Environmental department or DENR.

“That’s because of the corruption of the local government officials in connivance with the department of environment and natural resources personnel. We have DENR officials who inform loggers that somebody is coming, so all logs are already kept inside, we have local DENR officer who is protecting sawmills and we know for a fact that many illegal logs are being legalized through the connivance of DENR officials. That’s been going on for years and years. Logging means millions of money.”

Father Pete believes it won’t be an easy job even if the President is perceived by the many to be honest.

“Because the corruption goes all the way to the top.”

Under the new moratorium no new timber contracts will be granted for cutting natural forests anywhere in the Philippines.

Existing contracts will be reviewed, and a task force will be created to enforce the policy.

Senior official from the Environment department Nonie Tamayo says they are getting serious.

“In fact, for the past several months, a lot of cases have been filed in court, against our people who’ve been involved in these illegal activities, but you know DENR is more than 17,000 people all over the country.”

This is not the first time a Philippine leader has tried to rein in the loggers. Almost every recent president has tried some sort of ban, with little success.

The last attempt at a ban was in 2004, under the presidency of Gloria Arroyo. The policy had few noticeable results and was lifted after a year.

Environmental Professor Nina Galang says.

“It’s all up to us! Unfortunately in our country, civil society just has to work. That’s the price of democracy and good society-vigilance!”

Last Updated ( Monday, 21 February 2011 11:12 )

Wednesday, June 1, 2011

PNB, Allied Bank merger nearing completion

PNB, Allied merger nearing completion

June 1, 2011, 1:23am

MANILA, Philippines — Philippine National Bank (PNB) and Allied Banking Corp., both controlled by tycoon Lucio Tan, expect to finalize the merger this year following months of close negotiations with US regulators on the disposition of Allied Bank's 28 percent equity in California-based Oceanic Bank.

PNB President Eugene Acevedo is confident that talks with US regulators will yield definitive results in the next months. "We've been talking (with US regulators) in the last 4-5 months and we have had constructive discussions with them (on) what is acceptable. We're hoping to get the show on the road by the end of this year," he said.

The bank is set to spend up to P1.5 billion to fund the merger and once it is completed, the bank expects to save P1 billion from the combined business and services. The PNB-Allied Bank merger had a breakthrough two years ago when an investor expressed an interest to buy the Oceanic Bank shares however negotiations fell through and PNB had to restart talks with the US government on the disposition of equity.

With the merger in sight, Acevedo said PNB will have to focus more on the challenge of operating a bigger bank in terms of resources and assets, and profitablity will be affected. "We will be spending more money when we merge (so) profits will not be as important this year," he told reporters. "It will take two years before we start recognizing gains from the merger (but) this will allow us more than 10 percent savings or P1 billion."

PNB is fifth largest bank in asset size while Allied Bank is 14th biggest of 38 commercial banks. The merger will make PNB the fourth biggest, displacing state-owned Land Bank of the Philippines.

For 2011, Acevedo said they could do better than a five percent increase in net income. "We aim to beat 2010 but we'd rather not say how we will beat it. Our challenge is to build core businesses (and) we want to be less dependent on one-offs. We also have assets to sell and that still is part of our (profits bottomline)." The bank has real and other properties acquired or ROPA of P5 billion for sale this year. "Aside from our significant ROPA sales, we are increasing the amount of predictable income stream," he added.

He also expects corporate loans to grow by 20 percent this year. "We want to diversify this portfolio, we'd like more SME (small and medium enterprises) and consumer loans."

PNB is issuing P5.5 billion of 10-year unsecured subordinated debt as lower Tier 2 this month to pay for maturing loans also worth P5.5 billion in August.

Head of Treasury and Executive Vice President Horatio Cerbero III said they plan to issue the second tranche of P4.5 billion by the end of the year, mainly to fund their expansion program. He said the next issue "is not urgent" and will depend on demand and market sentiments. At the end of 2010, PNB has a capital adequacy ratio of 19.2 percent, better than industry average of 16 percent.

As of the end of the first quarter, the bank registered a decline in net income of 64 percent to P319.78 million due to trading losses. Last year PNB's net income increased by 61 percent to a record P3.54 billion, from P2.2 billion in 2009, mainly from treasury income.

PNB operates more than 325 branches and is set to open 20 more this year. Of its 3.1 milion deposit accounts, 1.3 million are oversead Filipinos and their beneficiaries. (JAL)