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Algo: No to sidesteps: avoiding natural gas Posted: 07 Jun 2021 12:40 AM PDT THE shift away from coal is gaining momentum in recent weeks. At the global level, the United States, Britain, Canada, France, Germany, Italy and Japan collectively agreed to halt funding of coal projects by the end of 2021, and phase out further support for dirty energy. The International Energy Agency recently released the world's first comprehensive roadmap to a net-zero energy system by 2050, which includes a call for no further investments in new fossil fuel facilities. This development is also slowly but surely taking effect in the Philippines. Banks such as BPI and RCBC are announcing their plans to phase out coal from their loans and portfolios within the next few decades. Along with a coal moratorium issued by the Department of Energy last October and the beginning of the full implementation of the Renewable Energy Act after 12 years, the stage is seemingly set for a boom of clean energy in the country. However, a new roadblock is emerging for building the Philippines's energy-secure future: the push for the growth of natural gas. Why not? There is currently lobbying in both houses of Congress for the development of the natural gas industry in two phases: midstream, or the transportation, storage, and wholesale marketing of said fuel; and downstream, which involves its processing, purifying, and selling. The lack of focus on the upstream phase, or exploration and extraction of local sources of natural gas, implies that the current strategy is to rely on imports to enhance the national energy supply. Similar to coal, another fossil fuel, this set-up could result to local electricity rates being vulnerable to volatile prices at the international market. This, in fact, is one of the reasons why Filipinos shoulder the second highest electricity rate in Asia. The Covid-19 pandemic has already exposed the flaws of the current baseload-centric system. Issues such as grid inflexibility, overdependence on soon-to-be-outdated dirty energy, and a failure to account for externalities such as the social costs of pollution on the true cost of coal are not addressed by the bills. Another reason for pushing for natural gas is due to its lower emissions of greenhouse gases (GHGs) than coal, which is beneficial for addressing the climate crisis. As a result, its proponents would view it as a necessary "bridging fuel," or a stopgap during the transition from coal to renewable energy (RE). However, this strategy poses significant problems. Firstly, natural gas still emits more GHGs than any renewable energy source. The World Meteorological Organization reports that global warming could breach 1.5 degrees Celsius within the next five years. This places the Philippines, one of the most vulnerable countries to the climate crisis, in even more potential harm. In an era when climate change impacts become more extreme with each passing year, avoiding further emissions should be a priority for policymakers. Secondly, the Congressional bills as currently written could result in the nation being in prolonged dependence on fossil fuels, which would affect sustainable development. Instead of being a bridging fuel until the further development of the RE industry, there is a lack of a phase-out plan or presence of policies that would prevent the growth of natural gas to the point of hindering RE development. Without measures such as establishing a maximum capacity for natural gas in the country's energy mix, the needed investments and other modes of support for finally fully enforcing the RE Act after a decade-long delay would instead be diverted to natural gas. A longer dependence on fossil fuels, whether it is coal or natural gas, would result in a more costly transition decades from now than if done more urgently. What to do In its first Nationally Determined Contributions (NDC), a self-determined pledge to help achieve the goals of the Paris climate agreement, the Philippines aims to reduce its GHG emissions by 75 percent by 2030. However, there was no stated decarbonization pathway to achieve this target, let alone align with limiting global warming to 1.5 degrees Celsius. Considering this commitment is made with the goals of achieving energy security and sustainable development, the national government must establish targets and timelines for phasing outpower plants, terminals, and other facilities related to natural gas. Doing so would discourage energy developers from simply switching their focus from coal to natural gas, and finally initiate the just transition to RE that is necessary for national sustainable development. This must be complemented by an urgent phase-out of coal, which could be achieved through measures such as a carbon tax to disincentivize both fossil fuels and strengthening the existing coal moratorium to prevent new coal plants from being built. Furthermore, the Department of Energy must lead the coordination among agencies, with inputs from non-government actors, to ensure that all plans and policies related to the energy sector are aligned with the imperative of climate action. If the Philippine government truly wants to bring its citizens closer to sustainability, it must avoid side-stepping through committing to natural gas. Instead, Filipinos need it to lead in taking steps forward towards a healthier and more secure future, fueled by RE. *** John Leo is the Deputy Executive Director for Programs and Campaigns of Living Laudato Si' Philippines and a member of the interim Secretariat of Aksyon Klima Pilipinas. He has been a citizen journalist since 2016. 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Bunye: Preparing for a strong rebound Posted: 06 Jun 2021 09:00 AM PDT SPEAKING before the Regis CEO Roundtable Series last May 18, Fernando Zobel de Ayala (FZA), president and chief executive officer (CEO) of Ayala Corporation, disclosed that "two of Ayala's most cyclical businesses – Ayala Land (ALI) and Bank of the Philippine Islands (BPI) – are priming themselves for a post-pandemic economic recovery. While real estate and banking have been adversely affected by the pandemic, these sectors are also prepared for a strong rebound as the country's vaccination rollout accelerates and the economy fully reopens." As the vaccine rollout gains more ground and cities gear up to regain economic footing, Ayala Land helps to spur recovery through continuous activity in its properties and by planning estates to become less congested, more resilient growth centers. According to Bernard Vincent O. Dy, ALI president and CEO, South Coast City, the 26-hectare development of ALI and SM Prime in Cebu's South Road Properties, will amplify the metropolitan coastal experience unique to the Queen City of the South. Within it is District Square, a prime waterside commercial zone that will be the economic core of the estate and a one-hectare park that will allow for various activities and link the estate's pedestrian network. In Pampanga and Tarlac, ALI is combining economic energy and relaxing suburban pace with the Alviera and Crescendo estates envisioned to epitomize growth outside Metro Manila. Integrating business, leisure, tourism, and education components while respecting nature and the local character of their host provinces, the two estates are expected to benefit from and contribute to Central Luzon's rising economic potential. The Alviera Country Club is a sports and lifestyle membership club with areas for recreation, relaxation and special events. Don Bosco Tarlac in Crescendo plans to offer senior high school in 2023 and technical-vocational education in 2025. Transitioning from response to recovery, Jose Teodoro "TG" Limcaoco, BPI's newly installed president and CEO, laid down five key imperatives that will drive the bank to achieve more for the Filipino people: turn BPI into the undisputed leader in digital banking services, create a greater SME and consumer share in its loan book, close the gap in funding leadership, refocus branches as sales points and not only as service points for customers, and further promote sustainable banking. Another priority for the new BPI head is elevating customer service and experience. He said that a banker needs to "put yourself in the shoes of the customer" to enhance your customer's experience, with digitalization as an enabler to achieve this end. "We need to be very focused on the customer, on their experience with us, through our digital platforms and our branches. We will build on the trust of the clients through every touchpoint they have with us." Meanwhile, Ayala Corporation completed the offer of the first tranche of its P30 billion debt securities, listing P10 Billion bonds at the Philippine Dealing and Exchange Corporation on May 28. The offer, which was 10 times oversubscribed marked the first time that Ayala has tapped the local debt market in four years. It was also the largest five-year allocation among dual-tranche offers during the pandemic, a reflection of the markets confidence in Ayala's long-term stability and credit strength. Ayala Chief Finance Officer Alberto M. de Larrazabal and Treasurer Estelito C. Biacora noted that the offer consisted of P4 Billion Series A Bonds due 2024 at a coupon rate of 3.0260 percent and P6 Billion Series B Bonds due 2026 at 3.7874 percent. FZA said: "The Ayala group has always been and continues to be an active participant of the capital markets. During the health crisis, Ayala Corp, Ayala Land, BPI, Globe, Manila Water and AC Energy raised over P190 billion in combined proceeds from the domestic and international capital markets to allow us to take advantage of opportunities and further solidify our balance sheet during these challenging times." The regulator is very pleased. Securities and Exchange Commission Chairperson Emilio Aquino noted Ayala's role in realizing the "capital market's potential to sustain our economy's expansion and bring growth to every Filipino." Added Aquino: "As issuers, you create legitimate investment opportunities. And through the capital market, you make accessible and thereby allow fellow Filipinos to share with your business success. By pursuing your expansion projects responsibly and sustainably, more of our fellow Filipinos can be employed and will be able to provide for and secure a better future for their families." Antonio Nakpil, president and CEO of Philippine Dealing and Exchange Corporation (PDEX), is also all praises for the Ayala group, led by Ayala Corporation, which Nakpil described as "the longest-standing supporters, constructive contributors, and most active group of issuer participants of the domestic capital market." Parenthetically, the Ayala group's investment banking arm, BPI Capital, headed by Rhoda Huang, has been an active participant in the fundraising activities across the Ayala group and an especially important partner in the group's shift towards sustainable financing. In 2020, BPI CAP helped launch BPI's CARE Bonds and the highly successful AREIT, among many landmark capital raising. Now BPI CAP is all set to help arrange the biggest IPO ever (P40B) for food manufacturer Monde Nissin. Note: You may wish to share the foregoing article via Facebook, Twitter or Linked-In. This posting includes an audio/video/photo media file: Download Now

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