SMC keeps power supply deals with Meralco B L L @llectura
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ONGLOMERATE San Miguel Corp. (SMC) did not terminate the power supply deals with the Manila Electric Company (Meralco), but said on Tuesday it will exhaust all legal remedies to continue supplying power to the utility firm while fulfilling its responsibilities to its shareholders. “We will do everything we can to make sure Meralco’s energy supply is not disrupted. Despite the present challenges, we will never withhold our available power capacity to the detriment of the country and the consumers,” SMC Global Power Holdings Corp.
said. SMC Global Power’s two units and Meralco were not allowed by the Energy Regulatory Commission (ERC) to temporarily implement an upward adjustment in their previously approved power rates. SMC had warned earlier that it would be forced to terminate starting October 4 the power supply deals (PSAs) entered into with Meralco should the ERC deny the joint plea, as it had been absorbing billions in losses. A day after the ERC announced its decision, SMC said it regretted the agency’s denial of the joint petition for temporary relief on their 2019 PSAs, “not so much for our own interest but more for the consumers.”
However, it said, “given the circumstances, we will continue to explore other legal remedies to allow us to sustainably provide for the increasing power needs of our country while meeting our obligations to our various stakeholders.” The joint petitions involved a temporary and partial cost recovery relief only for the losses incurred by South Premiere Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) from January to May 2022, to be amortized over a period of six months. They initially pegged the temporary adjustment to only 30 centavos per kilowatt hour (kWh). SMC Global Power said the temporary relief would have
enabled it to preserve a few of the last remaining fi xed-rate PSAs of Meralco that are responsible for keeping power rates in Metro Manila low compared to other parts of the country, amid surging global fuel prices. Based on Meralco’s own computation—validated by ERC’s Regulatory Operations Office— SMC Global Power stressed that the interest of the consumers would have been best served with the approval of the petition. “The ERC-ROS itself confirmed that the commission does not have any other data or information that could contradict or disprove the computations and simulations C A
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Thursday, October 6, 2022 Vol. 17 No. 363
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Food supply boost key to cooling inflation—DOF
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@caiordinario
ILIPINOS have not seen the worst in high commodity prices as the government said the headline inflation rate may not have reached its peak yet and food is expected to become even more expensive, according to the Philippine Statistics Authority (PSA).
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To this, the Bangko Sentral ng Pilipinas (BSP) said it is “prepared to take policy actions” to cool inflation. The latest inflation print, however, was within the Central Bank’s forecast for September. On Wednesday, PSA said inflation averaged 6.9 percent in September. This was faster than the 6.3 percent posted in August 2022 and 4.2 percent posted in September 2021. The PSA September data is the C A
SKYSCRAPERS pierce the skyline at the Ortigas central business district in Mandaluyong City. The Philippine Statistics Authority reported on Wednesday that inflation accelerated to 6.9 percent in September from 6.3 percent in August, with food and energy costs mainly driving the increase in commodity prices. NONIE REYES
INANCE Secretary Benjamin E. Diokno said the government will ramp up its efforts to boost food supply either via local production or importation in order to temper the country’s accelerating inflation. “To manage inflation, the continued timely implementation of government measures is crucial in mitigating the impact of persistent supply-side pressures on food and other commodity prices,” Diokno said in a statement on Wednesday when September inflation was reported to have accelerated to 6.9 percent from 6.3 percent in August. “The government intensifies its measures to help increase the domestic supply by ramping up local production, ensuring timely importation of goods, fertilizers, and raw materials, and improving distribution efficiency,” he added. Diokno pointed out that the country must “produce” and “import” its “needed” commodities. “Given regional production and price disparities, it is equally important that these goods are efficiently distributed. The government is already looking at regions where inflation is high and which goods are driving inflation to address any bottlenecks,” he said. Diokno said inflation is “expected” to “remain elevated’’ in the last quarter of the year,given the recent fare hike and the impact of Supertyphoon Karding on the country’s food supply. “However, inflation is still seen to fall within the 4.5 percent to 5.5 percent assumption of the Development Budget Coordination Committee [DBCC] for 2022,” he said. Jasper Emmanuel Y. Arcalas
Neda: There are winners, losers in weak peso B C U. O @caiordinario
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HE National Economic and Development Authority (Neda) remains unfazed by a further peso depreciation, saying there are winners and losers with a weak peso. In a virtual press briefing, Neda Assistant Secretary for Policy and Planning Sarah Lynne S. DawayDucanes said a weak peso benefits 20 percent of households since these are the ones that receive remittances from Overseas Filipino Workers (OFWs). Other sectors that would potentially benefit are exporters, since the weak peso will allow them to earn more from their locally-
made products. Daway-Ducanes said buying Filipino would be good for the export sector. “Even though imported goods are becoming costlier for ordinary Filipinos, we can minimize this by substituting imported goods with local products and thus patronize our own; that way, we also help local industries,” Daway-Ducanes said. Daway-Ducanes said, however, that “losers” include those who import products from abroad and those who are used to purchasing imported products at home. The weak peso is ultimately making these products more expensive. Despite this, some reprieve is expected. The Neda official said holiday remittances are expected to stem a further peso depreciation.
Furthermore, recent legislative amendments such as on the Public Services Act, Foreign Investments Act, and Retail Trade Liberation Act are expected to make the country more attractive for investments and stabilize the peso, the official added. “We expect that with the inflow of remittances in the last quarter, this can help stabilize the value of the peso versus the dollar,” DawayDucanes said. “Historically, these are the periods when remittances from overseas Filipinos reach their peak as they send their loved ones more funds for the Christmas holidays,” she added. On Monday, the peso closed at P59 to the greenback, another new low for the Philippine currency. The
peso lost P0.375 centavos from the close of P58.625 on the last trading day of September. In September, the BSP hiked its rates for the third consecutive month to anchor the rise of consumer prices and inflation expectations. The Monetary Board decided to raise its interest rates by 50 basis points to 4.25 percent. Accordingly, the interest rates on the overnight deposit and lending facilities were raised to 3.75 percent and 4.75 percent, respectively. This was the third consecutive month that the BSP hiked its benchmark rates: first in an offcycle hike in July of 75 basis points, and another one in August, 50 basis points.
PESO EXCHANGE RATES US 58.8560 ■ JAPAN 0.4081 ■ UK 67.5314 ■ HK 7.4983 ■ SINGAPORE 41.3547 ■ AUSTRALIA 38.2564 ■ SAUDI ARABIA 15.6615 ■ EU 58.7677 ■ KOREA 0.0416 ■ CHINA 8.2651
Source: BSP (October 5, 2022)