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Chinese firms scout Philippine prospects in Cebu summit By Richmond Mercurio (The Philippine Star) Updated April 5, 2017 – 12:00am http://www.philstar.com/business/2017/04/05/1687653/chinese-firms-scout-philippine-prospects-cebu-summit MANILA, Philippines – More Chinese companies want to take part in the country’s growing economy as close to 100 investors will participate in the 12th ASEAN Finance Ministers’ Investors Seminar in Cebu this week to scout for opportunities in the Philippine infrastructure, manufacturing, insurance and e-commerce sectors. The original commitment was for 150 Chinese investors to participate in the event but schedule, transportation and accommodation problems trimmed the number to 95, according to Bank of China (BOC) country head Deng Jun. BOC, the fourth largest bank in the world, was invited by the Department of Finance to attend and bring its clients to the ASEAN Finance Ministers’ Investors Seminar. Deng said 70 percent of the potential Chinese investors are corporates involved in various industries while 30 percent are into finance, including 13 fund managers with $40 billion worth of total assets under management. “We will like to take this opportunity to promote the ASEAN countries as an attractive destination and also support the economy of ASEAN,” Deng said in a briefing yesterday. “This is also a good time for the Chinese investors and companies to know the Philippines,” he added. According to Deng, most of the 95 participating investors are part of big Chinese private companies and state-owned corporations which have no presence yet in the Philippines. “Obviously they would want to invest in the Philippines, especially if you see the GDP growth rate of the country which is the highest in ASEAN. In terms of infrastructure development, there is also a great opportunity here and also e-commerce is a booming market here,” he said. “So this is a great opportunity for the Chinese investors to do business in the Philippines. Business is business and obviously, they want to make money by doing business with Filipino companies, not only for trade but also for investment,” Deng added. LandBank buying Postbank By: Ben O. de Vera Philippine Daily Inquirer 12:04 AM April 05, 2017 http://business.inquirer.net/227367/landbank-buying-postbank State-run Land Bank of the Philippines is firming up its acquisition of Philippine Postal Savings Bank (Postbank) alongside plans to pilot its first overseas Filipino worker (OFW) center in Dubai. LandBank president Alex V. Buenaventura told the Inquirer last week that due diligence on and valuation of Postbank was ongoing and would be completed next month for submission to the LandBank board. Buenaventura said LandBank’s acquisition of Postbank would be completed by the end of September. LandBank will acquire 100 percent of Postbank, including the 57-percent equity of Philippine Postal Corp. and the government’s share, he said, adding that there was no immediate need for capital infusion into Postbank. LandBank is acquiring Postbank in line with President Duterte’s promise to have a bank serving OFWs. “The strategy adopted by (Finance) Secretary (Carlos G.) Dominguez (III) to comply with that commitment is for LandBank to acquire Postbank and transform it into a fully owned subsidiary. It will not be merged with LandBank,” Buenaventura explained. He said Postbank would be renamed either “OFW Bank” or “Bank for OFWs” and would serve OFWs’ banking needs. LandBank will set up ‘OFW centers’ and the first will be in Dubai, he said. Buenaventura said the OFW centers would not be bank branches but service centers that would serve the banking requirement of OFWs. “OFW Bank will run the OFW centers, that’s the plan,” he added. The pilot OFW center will be located within the Philippine consulate in Dubai. Buenaventura said that while LandBank had yet to determine how many OFW centers would be established within the year, it would put up such offices in areas where OFWs were concentrated, including other parts of the United Arab Emirates, Riyadh in Saudi Arabia, Japan, the United States and Italy, among other European countries. PH 7-Eleven operator nets P1.18B By: Doris Dumlao-Abadilla 07:00 AM April 05, 2017 http://business.inquirer.net/227383/ph-7-eleven-operator-nets-p1-18b The country’s leading convenience store operator Philippine Seven Corp. (PSC) booked a 16.6 percent growth in net profit last year to P1.18 billion as retail sales were boosted by the opening of new stores and a modest growth in same store sales. PSC, the local licensee of 7-Eleven convenience stores, saw a 23.2 percent increase in system-wide sales to P31.8 billion. The increase was attributed to the higher number of operating stores alongside a 1.2 percent increase in same store sales during the whole year. Store count by last yearend reached 1,995, expanding by 393 stores or 24.5 percent from the level in the previous year. There were 1,633 7-Eleven stores in Luzon, 808 of which are in Metro Manila while 255 are in Visayas and 107 in Mindanao. Franchisees control 55 percent of total stores while the remaining 45 percent are corporate-owned stores. “We continued to dominate the convenience retail sector by opening new stores all throughout the country. We capitalized on our first-mover advantage and economies of scale in widening our lead against competitors. The capacity building expenditures we made in the form of establishing new distribution centers and regional headquarters are starting to produce favorable results,” PSC said in a disclosure to the Philippine Stock Exchange. “We aim to further expand our product offering, remodel existing stores and implement our market development plan over the next five years to enable us to achieve new milestones. We shall take advantage of the improving economy and changing consumer preference towards innovation and convenience, and this shall serve as our guide in the continued pursuit of our vision of becoming the best retailer of convenience for emerging markets.” PSC’s full-year cash flow increased by 20.6 percent to P3.11 billion. On the other hand, average net margin eased to 4.1 percent last year from 4.5 percent in 2015. For the fourth quarter of 2016 alone, net margin stood at 7 percent compared to 7.4 percent in the previous year. For the fourth alone, PSC’s net profit increased by 8 percent year-on-year to P532.1 million. System-wide sales expanded by 20 percent year-on-year to P8.75 billion for the quarter. For this year, PSC has budgeted capital expenditures amounting to at least P3.5 billion to support its store expansion strategy. Bulk of the amount is allocated to new store opening, store renovation and equipment acquisition. PSC acquired from Southland Corporation (now Seven Eleven Inc.) of Dallas, Texas the license to operate 7-Eleven stores in the Philippines in 1982. The retailer debuted on the Philippine Stock Exchange in 1998. Congress wants casinos under AMLA coverage (The Philippine Star) Updated April 5, 2017 – 12:00am http://www.philstar.com/business/2017/04/05/1687650/congress-wants-casinos-under-amla-coverage MANILA, Philippines – Congress will most likely include casinos in the coverage of the Anti-Money Laundering Law (AMLA). There is consensus in the Senate and the House of Representatives to include casinos among institutions covered by the law in the wake of the recent cyber theft of $81 million in Bangladeshi funds, Eastern Samar Rep. Ben Evardone said yesterday. Evardone, who chairs the House Committee on Banks and Financial Intermediaries, said the inclusion of casinos will enhance the country’s competitiveness and transparency of financial transactions. “This will also improve the image of the local gaming industry and enable it to attract more players,” he said. Evardone said the Senate is scheduled to tackle the bills including casinos in AMLA coverage when Congress reconvenes on May 2 after a six-week Lenten recess. Senate President Koko Pimentel said the bill was the product of the recent Senate inquiry into the diversion to bogus accounts in Rizal Commercial Banking Corp. of $81 million in funds of the government of Bangladesh. Chinese and North Korean hackers are allegedly involved in the cyber theft. Evardone’s committee earlier approved in principle the inclusion of casinos in AMLA. It created a panel to consolidate several related bills. “The only issue that remains to be resolved has to do with the threshold amount that would trigger the filing of a suspicion transaction report with the Anti-Money Laundering Council (AMLC),” he said. One proposal is to set the trigger amount at P500,000, the same level of transaction that requires banks, insurance companies and other covered institutions to file a report. Another proposal is to fix the threshold amount at P5 million, he added. The Senate version fixes the amount at P3 million, according to Pimentel. Evardone said the House, in moving to include casinos in the coverage of AMLA, “aims to protect the gaming industry from illegal activities so it can grow and attract more gamers and investors.” Mindoro Occidental Rep. Josephine Sato, who authored one of the bills to be consolidated, said the February 2016 diversion of Bangladeshi funds by hackers to RCBC and eventually to local casinos “exposed the vulnerability of gaming establishments to illegal activities.” “There is a need to amend the law to protect our casinos from money laundering by crime syndicates,” she said. The Financial Action Task Force (FATF) has reiterated its recommendation for the inclusion of casinos in AMLA following the $81-million Bangladeshi cyber heist. Only $15 million of the amount has been recovered. According to former senator Serge Osmeña, who chaired the Senate Committee on Banks in the last Congress, some senators and the Philippine Gaming and Amusement Corp. had lobbied against the inclusion of casinos and real estate companies in the coverage of AMLA in previous Congresses. AEV investing P12B in Davao water project By: DORIS DUMLAO-ABADILLA Philippine Daily Inquirer 12:06 AM April 05, 2017 http://business.inquirer.net/227373/aev-investing-p12b-davao-water-project Conglomerate Aboitiz Equity Ventures Inc. expects to invest some P12 billion in a new bulk water project in Davao City, aiming to break ground in July and complete the much-needed water infrastructure within three years. AEV chief finance officer Manuel Lozano said the “Apo Agua” project, a partnership with the Davao City Water District (DCWD), would provide 300 to 350 million liters of potable water per day using Tabugan River as water source. The project—touted as the largest private bulk water deal in the country—was a result of an unsolicited proposal submitted by the AEV group. It was awarded to the group after a price challenge. “Our goal is to give water by the end of 2019,” Lozano said. “Davao really needs water. Only 63 percent of franchise areas have access to water, so they are always looking for new sources of water,” Lozano said, adding that deep wells were the only source of water of some households. Apo Agua Infrastructura Inc., a 70-30 percent joint venture between AEV and J.V. Angeles Construction Corp. (JVACC), signed the bulk water supply agreement with the DCWD in 2015. JVACC would be the engineering, procurement and construction contractor. It had taken time for the project to break ground because of the tedious preparations, such as getting the right-of-way clearance and other permits, Lozano said. The group expects to build at least 30 to 52 kilometers of pipes to bring the water from the river to the water treatment plant, he noted. The agreement also involves the construction of a fully renewable energy-powered water treatment plant. “It’s not that hard to build but it needs coordination with DPWH (Department of Public Works and Highways), until it gets to the water treatment plant,” Lozano said. But now, Lozano said all of the agreements had been signed and the project financing obtained. “We’re just finalizing a couple some permits and it’s ready to go,” he said. The project will take at least 2.5 to three years to be completed. Submitting an unsolicited project proposal, Lozano said, was definitely the fastest way to build infrastructure “We like rail, airports, water. Water is a bit challenging because you have to find a source,” Lozano said. On airports, Lozano said AEV was still keen on bidding for the unbundled five airport projects and now searching for a foreign partner who would be willing to take on a smaller project. In 2015, AEV teamed up with France-based airport infrastructure provider Vinci Airports to bid for five regional airports offered under the government’s public-private partnership (PPP) framework. But now that the government is bidding each airport separately, Lozano said the economics of the project changed and the previous foreign partner had backed out. EVAP inks partnership with Korean counterpart By Richmond Mercurio (The Philippine Star) Updated April 5, 2017 – 12:00am http://www.philstar.com/business/2017/04/05/1687660/evap-inks-partnership-korean-counterpart MANILA, Philippines – The Electric Vehicle Association of the Philippines (EVAP) has signed an agreement with its counterpart in Korea to help in the development of the local electric vehicle industry. Under the partnership, EVAP president Rommel Juan said its Korean counterpart would help EVAP in building a prototype electric vehicle with Korean parts and components for Philippine use. The Korean electric vehicle group will supply Korean-made electric vehicle parts and components such as motors, controllers, chargers, batteries and battery management systems to EVAP. Through the agreement, Juan said the local market would have a bigger base of better and cheaper sources for its electric vehicle parts and components. “We are very excited to work with our Korean counterparts headed by chairman Kim of the Global Electric Vehicle Network. His energy and passion inspires everyone to further our cause of promoting electric worldwide,” Juan said. “We see a lot of potential with some possible collaborations and joint ventures with our Korean counterparts as they are now leading in the electric vehicle battery technology and have numerous electric vehicle products to offer,” EVAP vice president Edmond Araga added. EVAP sent a delegation to the recently-concluded International Electric Vehicle Expo held at the Jeju Island in Korea. EVAP is currently preparing for the first ever ASEAN Electric and Hybrid Vehicles Summit slated in June at the World Trade Center in Pasay City. The event, which is being co-organized with the Board of Investments and the Manila Electric Co., aims to promote the use of electric and hybrid vehicles in the region. EVAP member companies are set to feature the latest electric vehicles and technologies in the country as well as hybrid vehicles from the local automotive manufacturers and assemblers. 2GO deal cost SMIC $124.5M By: Doris Dumlao-Abadilla Philippine Daily Inquirer 12:09 AM April 05, 2017 http://business.inquirer.net/227377/2go-deal-cost-smic-124-5m SM Investments Corp. has paid $124.5 million to acquire a 30.47-percent stake in leading logistics provider 2GO Group Inc. through its privately-held parent firm Negros Navigation Co. Inc. In a disclosure to the Philippine Stock Exchange, SMIC said it had acquired a 34.5-percent stake in Negros Navigation. As Negros Navigation owns 88.31 percent of 2GO, SMIC’s effective ownership in the logistics firm is 30.47 percent of the listed logistics provider. SMIC said the shares were bought from China-Asean Marine B.V. for $124.5 million. The deal was priced at a “fair market value,” the disclosure added. The rationale for the transaction was “to invest in a fast growing, dynamic logistics business,” SMIC said. 2GO is the country’s largest integrated supply chain operator whose businesses include shipping, freight forwarding, warehousing and express delivery services. The logistics firm is now valued by the stock market at about P34 billion. Shares have spiked since SM announced the deal. SMIC is expected to team up with the group of businessman Dennis Uy to form the controlling shareholder bloc in 2GO amid a shareholder squabble that has been referred to arbitration. Through holding firm Udenna Investments, Uy earlier acquired a 21-percent stake in 2GO by buying the stake held by Dutch firm KGL Investment B.V. (KGL-BV) which has a beneficial ownership of about 60 percent of KGLI-NM Holdings Inc. which, in turn, controls Negros Navigation. 2GO has three core business units, namely: 2GO Freight, which handles commercial and personal shipping needs; 2GO Travel, which integrates passenger ships and fast ferries through land and sea multimodal transport linkages, and 2GO Supply Chain, which handles logistics, distribution, warehousing and inventory management. As of end-2015, 2GO and its subsidiaries had a total fleet of 23 operating vessels, of which 19 are company-owned ships. It has four direct subsidiaries, namely, 2GO Express Inc., The Supercat Fast Ferry Corp., NN-ATS Logistics Management & Holdings Co. Inc. and Special Container and Value Added Services Inc. The company also owns 33 percent of MCC Transport Philippines Inc. Late last year, a local court has directed the group of Uy and the Tagud family-led Negros Holdings Management Corp. (NHMC) and KGLI-NM Holdings Inc. to proceed to arbitration to resolve their dispute. The dispute arose from Udenna’s petition to enforce its rights as a shareholder of defendant KGLI-NM. The Tagud group had been contesting Uy’s entry as a shareholder. SMC Global revives IPO bid By Danessa Rivera (The Philippine Star) Updated April 5, 2017 – 12:00am http://www.philstar.com/business/2017/04/05/1687646/smc-global-revives-ipo-bid MANILA, Philippines – SMC Global Power Holdings Corp., the power arm of conglomerate San Miguel Corp., is eyeing to list on the stock exchange in the third quarter of 2017, according its top official. The company has set the IPO within the third quarter despite volatility in the stock market and tight competition in the power business segment, SMC president and COO Ramon Ang said. “Whatever price or whatever outlook, SMC Global Power will go for IPO,” he said. Ang said the power business has not maintained a bullish outlook unlike before amid the drop in electricity prices. “But because we promised, we will conduct an IPO,” he said. In 2011, the company was approved by the Securities and Exchange Commission (SEC) to conduct an IPO. It was expected to raise between P12.76 billion and P27.335 billion from the maiden offer of 290 million to 385 million shares at a price range of P44 to P71 each. However, SMC Global decided to defer its IPO later that year due to bleak market conditions. SMC Global Power is one of the country’s  largest power companies controlling 2,903 megawatts (MW) of combined contracted capacity as of end-2015. It accounted for 17 percent of the power supply of the national grid and 22 percent of the Luzon grid. Currently, it is working on a 4×150-MW coal plant in Malita, Davao and a 2×150-MW plant in Limay, Bataan. The Malita facility is a four-unit coal-fired power plant each with a capacity of 150 MW, although plans for the last two units have yet to be finalized. In all, the Davao project is scalable to 600 MW. Last year, the company announced it is looking to build five new power plants, three of which are to be located in three industrial estates in Mindanao with a capacity of 300 MW each and two more power plants in Luzon – the Central Luzon Premiere Power Corp. (CLPPC) and Mariveles Power Generation Corp. (MPGC) at 600 MW each. It is also transforming itself into a diversified energy company by investing in renewable energy projects to help ramp up the country’s clean energy capacity. Atok infuses additional $2 million into Forum By Danessa Rivera (The Philippine Star) Updated April 5, 2017 – 12:00am http://www.philstar.com/business/2017/04/05/1687649/atok-infuses-additional-2-million-forum MANILA, Philippines – Listed mining firm Atok-Big Wedge Co. Inc. has infused an additional $2-million capital in London-listed Forum Energy Ltd. to remain as the second biggest shareholder in the oil and gas exploration firm. In a disclosure yesterday, Atok said its wholly-owned subsidiary Tidemark Holdings Ltd. subscribed to 6,666,667 new shares of Forum at $0.30 per share. Prior to the acquisition, Tidemark held a 27.14 percent stake in Forum. “Together with the subscription simultaneously made by the other major shareholder of Forum, this new subscription will result in the company owning 20 percent of Forum,” the disclosure said. “At 20 percent, it remains a significant shareholder and the second biggest shareholder,” it added. The other major shareholder is PXP Energy Corp., the Pangilinan-led upstream oil and gas firm, which also subscribed to 39,350,920 new ordinary shares of Forum. Following the acquisition, PXP now has a total direct and indirect interest in Forum of 77.5 percent, up from 67.5 percent. Forum holds the license to Service Contract (SC) 72, an 8,800-square-kilometer area west off Palawan (Recto Bank) and is estimated to contain prospective resources of natural gas and oil. PSEi breaches 7,400 mark on favorable economic outlook By: Doris Dumlao-Abadilla Philippine Daily Inquirer 12:00 AM April 05, 2017 http://business.inquirer.net/227361/psei-breaches-7400-mark-favorable-economic-outlook The local stock barometer breached the 7,400 barrier yesterday as investors bet on the country’s favorable economic prospects. Outperforming mixed regional markets, the Philippine Stock Exchange index racked up 104.84 points or 1.43 percent to close at a six-month high of 7,446.49. This marked the PSEi’s best finish since Oct. 26 last year, when it ended at 7,494.41. The index also saw its biggest single-day gain since Feb. 16 this year. Joseph Roxas, president of local stockbrokerage Eagle Equities Inc., said investors were emboldened by the government’s upbeat forecast on the domestic economy. It was reported on Tuesday that Economic Planning Secretary Ernesto Pernia expected the country’s first-quarter gross domestic product (GDP) growth coming in at about 7 percent, suggesting a sustained high-growth trajectory that, in turn, would provide a good backdrop to corporate earnings. “It’s a breakout,” Roxas said, noting that investors were also emboldened by the steady fiscal assessment from Fitch Ratings alongside the release of market liquidity following last Friday’s listing of Wilcon Depot. For many weeks, the PSEi had been trading within a range of as low as 7,100 to as high as 7,400. After breaking out of the 7,400 resistance, the index will now test the 7,700 level, Roxas said. “The market broke out of its trading range today. This is in contrast to other Asian markets, which were mixed. The index should stay above 7,400 and establish a new support level at that area, otherwise the old trading range will pull the index back to it,” said Manny Lisbona, president of PNB Securities. All counters advanced, led by the property counter, which gained 2.43 percent, while the financial, holding firm and services counters also rose by more than 1 percent. Value turnover for the day was heavy at P11.94 billion. There was relatively heavy net foreign buying amounting to P4.08 billion for the day. There were 114 advancers that edged out 79 decliners while 42 stocks were unchanged. Ayala Corp. gained 3.06 percent while BDO Unibank, PLDT, SM Prime, DMCI Holdings and Semirara all increased by more than 2 percent. BPI, Metro Pacific, Globe Telecom, Metrobank, JG Summit and Security Bank all firmed up by more than 1 percent while URC, SM Investments Corp., Jollibee and Puregold also contributed gains. On the other hand, GT Capital bucked the day’s upswing, declining by 1.23 percent. Outside of the PSEi, Shell Philippines slipped by 0.55 percent. Manila Water completes pilot project in Myanmar By Louise Maureen Simeon (The Philippine Star) Updated April 5, 2017 – 12:00am http://www.philstar.com/business/2017/04/05/1687652/manila-water-completes-pilot-project-myanmar MANILA, Philippines – Ayala-led Manila Water Co. Inc. has completed its pilot project in Myanmar. Manila Water and partners Mitsubishi Corp. and Yangon City Development Committee (YCDC) have reduced non-revenue water in Yangon City from 54 percent to 14 percent after the completion of the project. Non-revenue water refers to water produced and lost which can be due to leaking pipes, illegal connections, or inaccurate metering. The pilot project included the formation of district metering areas, technical and non-technical surveys, system loss reduction and management, among others. Water recovered was brought back in the system, increasing water pressure by two per square inch (PSI) and improving access to water supply of the estimated 4,000 residents of the project areas. Registered billed volume has also doubled with the replacement of water meters, increasing revenues for the YCDC which is the administrative body responsible for water management, infrastructure, pollution-control, and many others in Yangon. “YCDC is interested in co-developing a plan under PPP (private-public partnership) to address further reduction of non-revenue water on a larger scale and deliver piped potable water supply at reasonable cost to the public,” Manila Water Asia Pacific president and chief executive officer Virgilio Rivera Jr. said. The pilot project is part of the memorandum of understanding signed by the three parties in 2014 to address the needs of the city’s water system. Locally, the company has reduced eastern Metro Manila’s system loss to 11 percent from 63 percent during the start of its concession period. Manila Water caters to the East Zone which encompasses parts of Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, most parts of Quezon City, portions of Manila, as well as several towns in Rizal. Asia resilient to sub-par growth – BSP By Lawrence Agcaoili (The Philippine Star) Updated April 5, 2017 – 12:00am http://www.philstar.com/business/2017/04/05/1687657/asia-resilient-sub-par-growth-bsp MANILA, Philippines – Asia, including the Philippines, is resilient enough and would likely defy the sub-par growth experienced in advanced economies, according to the Bangko Sentral ng Pilipinas (BSP). In his opening remarks during the BSP – Official Monetary and Financial Institutions Forum (OMFIF) BSP Governor Amando Tetangco Jr. said Asia is set to become a pillar of growth for the global economy in the coming years. “Asia, like the rest of the world, suffered significant impact from the global financial crisis. But it proved to be resilient,” Tetangco said. Relative to the rest of the world, Tetangco said the output decline in Asia was smaller by almost three percentage points and the cumulative output loss was lower by 11 percent of annualized gross domestic product (GDP) in the third quarter of 2008. Asia’s resiliency during the GFC was an offshoot of the key financial, structural and institutional reforms that defined Asian economies after the 1997 Asian financial crisis, according to Tetangco. “With a mindset that macroeconomic policies, including strong financial and external positions are equally important to sustain economic resiliency, policymakers in Asia adopted a more proactive and rigorous approach to banking supervision,” he said. The BSP chief added macroprudential policies became staples in the arsenal of Asian central banks in addressing emerging systemic risks in the financial sector. Furthermore, many Asian central banks accumulated foreign reserves because of more flexible exchange rates to provide buffers against a sudden reversal of capital flows. He said key initiatives including the Association of Southeast Asian Nations (ASEAN) Surveillance Process, ASEAN+3 Economic Review and Policy Dialogue, Chiang Mai Initiative, and Asian Bond Market Initiative were established to strengthen the region’s capability to prevent and manage future financial crises. March inflation seen rising to 3.6% By Mary Grace Padin (The Philippine Star) Updated April 5, 2017 – 12:00am http://www.philstar.com/business/2017/04/05/1687648/march-inflation-seen-rising-3.6 MANILA, Philippines – Inflation likely accelerated to 3.6 percent in March due mainly to higher food, power and fuel prices, the Department of Finance said yesterday. According to the latest economic bulletin prepared by DOF Undersecretary Gil Beltran, consumer prices may have picked up to 3.6 percent in March faster than the 3.3 percent recorded in February, and 1.1 percent in the same month last year. It is also within the estimate of the Bangko Sentral ng Pilipinas at around three percent to 3.8 percent for March, as well as the two percent to four percent whole year target. Beltran attributed the faster inflation to the normalization of global petroleum prices from low levels in 2016. “Higher inflation is due primarily to base effects, as petroleum prices are normalizing from low levels set last year. Net of base effects, inflation should be three percent,” Beltran said. Based on Beltran’s report, the DOF estimates that prices of food and non-alcoholic drinks in March may have gone up by 4.5 percent, higher than the 4.1 percent in February. The DOF said the price increase of alcoholic drinks and tobacco may have also jumped to 6.5 percent from six percent. Cost of housing, utilities and fuel are also seen to rise 4.1 percent in March from 2.9 percent in the previous month. Prices of clothing and footwear are also seen to go up 2.9 percent, up from 2.8 percent in February. Health cost is also seen to pick up at 2.8 percent from 2.6 percent. On the other hand, inflation for transport likely slowed down to 1.9 percent from 2.8 percent. Price increase in restaurants and other miscellaneous services also dropped to 1.8 percent from 2.1 percent. Meanwhile, inflation for furnishings and household equipment (2.3 percent), recreation and culture (1.8 percent), education (1.8 percent), and communication (0.2 percent) are expected to remain steady. Last month, Manila Electric Co. (Meralco) announced that its March rate increase for a typical household amounted to P0.66 per kilowatt hour, bringing overall rate to P9.67 per kWh from February’s P9 per kWh. Overall generation charge also rose by P0.58 per kWh to P4.9 per kWh. Beltran said the average price of diesel in Metro Manila among the big three oil companies, meanwhile, slightly decreased to P31.1 per liter from P31.3 per liter in the previous month. This is, however, higher than the P22.5 per liter charged in the same month in 2016. Average price of gasoline during the month also dropped to P46 per liter from P47.7 in February, but higher than the P37.6 per liter in the same month last year.