Off-Grid Renewable Energy is the Way to Go

from 1.3GW in 2008 to 4.3 GW in 2017

Southeast Asia Market Analysis man on boat solar panels

Growth of off-grid renewables in Asia increased to 4.3 GW in 2017 from 1.3 GW in 2008. Photo c/o http://www.irena.org 

The number of people served by off-grid renewables around the world has increased six-fold since 2011 as there are roughly 133 million people enjoying renewables in remote areas in 2016 according to International Renewable Energy Association in its report, Off-Grid Renewable Energy Solutions: Global and Regional Status Trends.

Of the 133 million, there are 100 million who are using solar lights, 24 million solar homes and nine million are connected to a mini-grid.

In terms of capacity, off-grid renewable capacity has also increased three-folds from under two gigawatts in 2008 to 6.5 in 2017.

The report noted that growth came from the Asia and Africa regions with 76 million Asians and 53 million Africans enjoying the benefits of off-grid renewable energy. Asia accounted for the most significant growth over the last decade from 1.3GW in 2008 to 4.3 GW in 2017. The population that’s enjoying RE in the region has increased by eight times, from 10 million in 2008 to 76 million in 2016.

The growth of renewable energy use in remote areas is not surprising since it has long been established that renewable can reduce energy poverty as well as help lower power costs even for isolated areas.

In the Philippines, various studies are concluding that the country will have big savings by using renewables for off-grid locations.

For example, recently, the Access to Sustainable Energy Program (EU-ASEP), a European Union (EU) funded program has said that the National Power Corporation can save as much as Php 2.25 billion, which is the equivalent of Php 4.50 per kilowatt-hour if the agency chooses hybrid technology for its mini-grids.

The EU, through its strategic advisor of the study, Dr. Christoph Menke defines hybrid mini-grid as “combines at least two different kinds of technologies for power generation and distributes the electricity to several consumers through an independent grid.” This means combining renewable energy with a traditional source of power such as diesel power plants as what most off-grid islands use for their energy.

The Php 2.25 billion savings is feasible, our Energy Department confirms in a statement: “Hybridization, in combination with properly maintained generator-sets will enable NPC to save around P2.25 billion annually.”

The EU-backed research is not alone in emphasizing the importance of adding more renewables for off-grid islands in the Philippines.

Similar recommendations were provided by the paper entitled “Electricity-Sector Opportunities in the Philippines: The Case for Wind- and Solar-Powered Small Island Grids,” which stressed that country could save as much as Php10 billion if off-grid islands use RE rather than traditional power sources.

The study also noted that shifting to more use of renewable power will not affect the availability of power in these areas: “Small island grids powered by solar, wind, and other renewable energy could reduce dependence on expensively imported fossil fuel generation without compromising the availability of power and grid reliability.”

Choosing renewables is the best solution to address energy poverty in the country especially when there are some 2.4 million Filipinos homes without access to poverty as of 2014.

Energy Undersecretary Felix William Fuentebella has recently announced that the Energy Department is ready to release a Department Circular named Renewable Portfolio Standards Rules for Off-grid Area, mandating industry players of off-grid and missionary areas to source a part of their needs from renewable sources. The RE requirement or percentage, as well as the yearly incremental RE generation in every off-grid area yet, has to be determined.

The circular could have been released much earlier given that the need to provide access to power and lower energy rates has been there all along. Nevertheless, may this circular help in providing stable and affordable electricity to fellow Filipinos living in isolated areas.

References:
Off-Grid Renewable Energy Solutions: Global and Regional Status Trends IRENA
http://www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Jul/IRENA_Off-grid_RE_Solutions_2018.pdfhttp://www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Jul/IRENA_Off-grid_RE_Solutions_2018.pdf

Electricity-Sector Opportunities in the Philippines: The Case for Wind- and Solar-Powered Small Island Grids. The Institute for Energy Economics and Financial Analysis

https://business.mb.com.ph/2018/09/11/doe-eu-estimate-p2-25-b-savings-in-hybrid-solution-for-off-grid-areas/

https://www.manilatimes.net/energy-circulars-on-uniform-electricity-bill-re-use-inked/438275/

Failing Miserably

According to the Bloomberg New Energy Outlook (NEO), renewable energy will lord over the power mix by 2050.

The NEO notes that since the 1970s, fossil fuels have dominated with 60 to 70 percent of the global power generation, but this would soon come to an end.

By 2050, almost 50 percent of total power globally will come from solar and wind technology. Together with hydro, nuclear and other renewables, the total contribution of zero carbon power will be 71 percent.In contrast, fossil fuels will only account for 29 percent, down from its current 63 percent contribution.

The shift to 50 percent renewable energy power scenario is driven by the falling prices of solar PV, wind, and battery technologies. The average PV plant costs will fall by 71 percent by 2050 according to experts. My own personal experience has shown that. Wind is also expected to drop to 58 percent.

Saltwater-Battery-feature-image

A major shift to renewable energy is possible due partly to falling prices of battery storage. Photo c/o Edgy Labs

Battery capacity will receive a total of $548 billion in investments, which will account for its expected price drop. One of my business partners has invested in the flywheel battery storage technology and is experiencing a surge in demand for his batteries.

Indeed, the world is heading towards greater use of sustainable energy. How I wish we can say the same for our country.

It is no secret that the Philippines seems to be heading towards the opposite direction as one of our senators pointed out recently. In fact, just recently the Department of Energy (DOE) has recommended the importation of dirtier fuel, Euro-2 compliant type of fuels. The Philippines is now importing Euro-4 compliant, a much higher quality fuel. Euro 2 is cheaper because its quality is poorer. You get what you pay for.

Senator Loren Legarda, a staunch advocate of renewable energy, has lamented that the Philippines is failing miserably in implementing the Renewable Energy law passed 10 years ago.

In a speech, she stressed that “While many initially thought that the adoption of the RE law in December 2008 represented a firm and decisive policy position on the country’s shift to cleaner and indigenous forms of energy, stakeholders, to date, continue to grapple with mixed signals from those charged with implementing the RE law.”

Legarda added that the Philippines had increased its coal imports at a yearly average of 12.8 percent from 1989 to 2015.

From 2015 to 2016, coal imports volume was even higher by 16% from 17.3 metric tons to 20 metric tons.

She also lamented the growth of installed capacities of coal-fired plants which climbed by 87% from 3,967 MW in 2005 to 7,419 MW in 2016. Another 10,423 MW is in the pipeline.

In contrast, there has been a decline in the renewables’ share in 2016 from 32% from 33.5% in 2005, while coal climbed from 25% in 2005 to 35% in 2016.

Time and time again, renewable energy advocates like myself openly call out to the government to take serious measures to fulfill what the RE law requires.

Other countries including neighbors such as India are making significant progress in their goals to shift to greater use of renewables. Unfortunately, the Philippines is nowhere near its goal of sourcing 30 percent of power from clean sources.

Legarda said it well when she reminded us that it had taken 18 years to pass the law, but it seems harder to implement it: “It was hard then, but even more so now, to convince naysayers on the importance of renewable energy in the country’s development agenda…To date, those charged with implementing these policy mechanisms seem to want to continue the debate on matters decided upon by legislators ten years ago.”

Hopefully, those in charge see the need of implementing the RE law swiftly. Our recent experience with the monsoon rains in the second week of August, which left Metro Manila and nearby areas flooded should convince us that we need to take care of the environment. This includes following laws intended to spare us from the effects of climate change. Plus, of course, we need renewable power for a more sustainable economic growth.

References:

New Energy Outlook 2018: https://bnef.turtl.co/story/neo2018?teaser=true

http://www.bworldonline.com/legarda-cites-slipping-renewable-energy-share/

Such Folly

sulu pinterest

Modular nuclear plant for Sulu? Renewables is a much better option. Photo c/o pinterest

The local government unit (LGU) in Sulu is said to be looking at putting up a modular nuclear power plant (NPP).

A report by The Inquirer quoted Energy Department’s spokesperson and undersecretary Felix William saying, “Yes, Sulu. It’s actually small. They are looking at a modular facility.” The undersecretary, however, admitted that a modular nuclear plant is a remote possibility.

And Fuentebella is right to say so. After all, the suggestion is a folly.

For one, what we have are outdated legislative and regulatory frameworks to guide us in developing a nuclear power plant. Whoever suggested building a nuclear power plant in Sulu seems to have forgotten that our regulatory framework covering NPPs were created more than 50 years ago. However all these were either repealed or downgraded during President Cory’s time. In particular, Philippine Atomic Energy Commission (PAEC) was downgraded to a Philippine National Research Institute (PNRI). PAEC was regulating the nuclear power development and operations including licensing of engineers.

The existing legislative framework in the regulation of nuclear technology in the country are the Science Act of 1958 and the Atomic Energy Regulatory Act of 1968 or RA 5207 where there are two different regulating agencies in the use of radiation, namely the Philippine Nuclear Research Institute (PNRI) and the Bureau of Health Devices and Technology (BHDT) under the Health Department.

The PNRI is in charge of regulating nuclear and radioactive materials while the BHDT governs the electrically generated radiating emitting devices in all the fields. Unfortunately, our current framework fails to define the regulatory responsibilities of nuclear plants. Neither of these bodies have the competence nor authority to regulate nuclear power.

Who then would issue a license to build and operate the nuclear facility since there is no licensing agency anymore? We need to create a new law that would define the responsibilities of each regulating agency in charge of nuclear power.

And even if we can pass a law quickly, there remains the question of human resources. In the first place, how much expertise do we have on nuclear technology locally? This leads me to my second point.

The Philippines lacks the technical skills for a nuclear power plant. There is a shortage of qualified experts and experienced workers in running an NPP. Those involved in building the Bataan power plant may no longer be around or have retired from work altogether.

This a known fact. The absence of qualified people is a gap that some lawmakers tried to address when they proposed the re-opening of the Bataan Power plant.

For example, House Bill 580 or the “Bataan Nuclear Power Plant (BNPP) Operability Act” filed by the late Senator Mirriam Santiago had a provision mandating the creation and implementation of a training program for the management and operation of all technical aspects of the BNPP.

The same bill also proposed for the University of the Philippines (UP) to form a Nuclear Power Engineering Department under the College of Engineering, which should only be to “offered for enrollment to the top twenty percent (20%) of engineering graduates” of the university. The proposal also called for a separate course in UP that will specialize in nuclear power industry regulation.

The late senator obviously knew what she was proposing. Her senate bill recognized the lack of qualified people to build, run and regulate NPPs in this country and the need to recruit the brightest minds to handle nuclear energy. Up to this day, there remains a shortage of people to run and regulate nuclear power.

In the absence of local experts and experienced personnel, who will then build and run the NPPs? Are we to turn to foreigners and rely solely on their expertise? This raises the question of whether we should entrust the operations of a power plant entirely in the hands of foreigners. Our current laws, unless exempted by another law, prohibits foreigners from practising their profession in the country.

Plus, let us not forget that Sulu remains to be a conflict area where bombings and gunfights are constant. Keep in mind that an accidental release of radioactive material from a nuclear could cause death, acute health effects and even long-term environmental consequences. Putting a nuclear plant in the middle of a war zone may have dire repercussions. The idea of putting a nuclear power plant in a location with persistent bombing and shooting is absurd.

So, where did the suggestion of using a modular nuclear power plant come from? Was this the idea of a person or entity who has yet to hear the benefits of renewable energy? Have we forgotten that the Philippines including conflict areas in Mindanao are well endowed with natural resources that can be utilized to generate power?

We should focus on what is doable. Banking on indigenous renewable energy and distributed generation is the sensible alternative rather than the modular nuclear power plant.

Taking Action

All over the world, calls are being made to shift from traditional forms of energy to more sustainable ones in the hope of saving our environment and making energy available for all. In response, various sectors have taken drastic actions and are making great progress in their shift to renewable energy.

The achievements of the private and public sector in transitioning to greener forms of power in recent years are significant. The numbers for 2017 alone are a testament to both sectors commitment to add and use more renewable energy.

Last year was a record-breaking year as renewable power generation capacity had its biggest annual increase of nine percent with an estimated 178 GW added capacity, according to REN21’s study, Renewables 2018 Global Status Report.

More renewable power was added than fossil fuels as renewables accounted for 70 percent of the overall combined global generating capacity. Investments in RE for 2017 reached $279 billion, up from the recorded $274 billion in 2016 as well.

The figures from corporate buying of renewable energy are admirable, too.

For one, the International Renewable Energy Agency report, Corporate Sourcing of Renewable Energy: Market and Industry Trends showed that firms across 75 countries sourced a total of 463 terawatt-hours from renewables in 2017. This volume is enough to power up a country equivalent to the total demand of France.

The report found out that half of the 2,400 large companies analyzed for the study are voluntarily and actively buying or investing in self-generation of renewable energy for their operations. Plus, 200 of these firms source at least 50 percent of their power needs from renewables. “Renewable energy sourcing has become a mainstream pillar of business strategy in recent years,” IRENA Director-General Adnan Z. Amin stressed.

Environmental and sustainability concerns, social responsibility, reputation management, and economic and financial objectives are the top reasons cited by corporations on why they are making the shift to renewable power. “While environmental concerns initiated this growing trend, the strengthening business case and price stability offered by renewables can deliver a competitive advantage to corporations, and support sustainable growth,” Amin added.

There’s definitely an increased appetite for renewable energy as other countries are also gearing up to accommodate more renewables such as in the case of Vietnam.

Recently, Vietnam Prime Minister Nguyen Xuan Phuc reiterated his country ’s commitment to shift to renewable power in an interview with Reuters.

He announced that Vietnam is set to increase electricity generated from renewable sources to 101 kWh billion by 2020 and to 186 kWh billion by 2030 from 58 billion kWh recorded in 2015. The country also aims to reduce the use of coal and petroleum products by 40 million tons by 2030.

Phuc said that the government has already prepared incentive mechanisms as well as policies to promote local and foreign investments into renewable energy development.

The chief executive stressed that this shift is needed despite the country’s push for more economic growth,“It is important that we will not pursue economic growth at the expense of the environment,” Phuc noted.

turkey

Soma Kolin power plant in Turkey’s western province of Manisa. Survey says more Turkish favor greener forms of energy despite the country’s dependence on coal
Photo c/o: http://www.aa.com.tr

There also seems to be greater awareness and appreciation for renewables among citizens in other countries. Turkish, for example, favor greener forms of energy than coal despite Turkey’s dependence on this form of power. The country sources more than 70 percent of power need from fossil fuels since the government named coal as its preferred fuel for the growing energy demand.

A survey conducted by climate information hub İklim Haber and research company Konda revealed that more than half of its citizen oppose the building of additional coal-fired plants as 75 percent of the participants are worried about climate change.

In the Philippines, our government claims to have the appetite for more renewables in our power mix. But that hunger is not correctly matched by government’s actions. It is highly likely that we will remain starved for cleaner forms of energy for now as we have moved down our renewable energy targets.

The Energy Department had announced the target of sourcing 35 percent of our overall power needs from RE by 2030. This goal, however, has been recently pushed back to 2040. This is not surprising as data from BMI report showed that there would be a 10 percent increase of coal in our energy mix in the next decade from below 50 percent in 2017 to more than 55 percent by 2027.

That is unfortunate since now is an excellent time for the Philippines to add more renewables and to take advantage of the falling costs of renewable power prices. Plus, of course, we need stable energy at reasonable prices as we try to industrialize. But then, again, we will remain hungry for cheaper and sustainable forms of power for now.

References:

Renewables 2018, Global Status Report, http://www.ren21.net/gsr-2018/
http://www.vir.com.vn/vietnam-well-positioned-to-develop-renewable-energy-says-pm-59892.html

http://www.climatechangenews.com/2018/06/05/83-turks-favour-renewable-energy-coal-survey-finds/

http://www.irena.org/newsroom/pressreleases/2018/May/Corporate-Sourcing-of-Renewables-Growing-Taking-Place-in-75-Countries

A Timely Reminder

Three years ago, Pope Francis made a strong appeal to the world to address the growing problem of climate change. In his 180-page encyclical, the pope stressed that “Climate change is a global problem with grave implications: environmental, social, economic, political and for the distribution of goods. It represents one of the principal challenges facing humanity in our day.”

Pope Francis recently made the same appeal with investors, oil executives and Vatican experts during an unprecedented conference at the Pontifical Academy of Sciences.

The pontiff had stressed that climate change must be addressed soon and the world has to use a power mix that will combat pollution, promote social justice, and combat pollution. “But that energy should also be clean, by a reduction in the systematic use of fossil fuels. Our desire to ensure energy for all must not lead to the undesired effect of a spiral of extreme climate changes due to a catastrophic rise in global temperatures, harsher environments and increased levels of poverty,” the pope said.

He reminded his audience that development must not come at the expense of the environment “Civilisation requires energy, but energy use must not destroy civilisation.”

The head of the Catholic Church has never wavered in his appeal to the world to make the planet a better place by saving the environment. His recent plea is also timely as studies and reports show that the world has to do more in fighting the effects of climate change.

The recent United Nation (UN), a yearly report entitled ‘The Sustainable Development Goals Report 2018” concluded that climate change along with inequality and conflict are the primary factors in growing hunger and displacement around the world.

The figures in the report showed that the world has a long way to go in combating the effects of climate change including the health hazards. After all, the World Health Organization once tagged climate change as “the defining issue for the 21st century.”

The UN study revealed that in 2016, around the world, 91 percent of the urban population were breathing dirty air or air that failed to meet the WHO Air Quality Guidelines. What’s worse is that more than half of the said population were exposed to air pollution levels that are at least 2.5 times higher than the safety standard. It is not surprising then that around 4.2 million people died due to high levels of ambient air pollution.

The same report showed that renewable power’s share in the final energy consumption had a moderate increase from 17.3 percent in 2014 to only 17.5 percent in 2015.

That’s a sad figure, especially when the more significant use of renewable energy can save lives. Let us remember that both coal and oil power have greater death prints, or what energy expert James Conca defines as the “number of people killed by one kind of energy or another per kilowatt hour (kWh) produced.”

In fact, the mortality rate of coal, which is derived by dividing the trillion kilowatt hour of use, is 100,000 when we get 50 percent or our energy needs from this source. Likewise, oil has a mortality rate of 36,000 for every eight percent of the energy it supplies.

Apparently, the growth of renewables in the world’s energy mix had been slow and more people are literally dying because of it. Clearly, more must be done to combat climate change, which includes developing and using more cleaner forms of energy.

Let us heed the Pope’s call, shall we?

References:

https://www.theguardian.com/world/2018/jun/09/pope-francis-tells-oil-bosses-world-must-wean-itself-off-fossil-fuels

http://sdg.iisd.org/news/sdg-report-2018-finds-conflict-climate-change-inequality-hindering-progress/

https://www.forbes.com/sites/jamesconca/2012/06/10/energys-deathprint-a-price-always-paid/#16e2ea1b709b

 

 

 

 

Missing Out on Benefits

 

renewable-energy-jobs-in-world

10.3 million people were employed in renewable sector says IRENA. Photo c/o https://constructionplacements.com

Renewable energy as experts has been saying bring many benefits. All over the world, big global brands and governments are making the shift to sustainable sources of power because they to help the environment as well as save on power costs.

 

However, more affordable energy prices and a cleaner environment are not the only benefits of choosing renewable energy. Fortunately, opting to build RE plants has a direct on the economy through job generation.

The International Renewable Energy Agency or IRENA report, Renewable Energy and Jobs Annual Review 2018 showed that in 2017 alone, the renewable energy industry generated more than half a million jobs around the world. This number brings the total number of people employed by the sector to 10.3 million as some 500,000 more jobs were created last year by the industry.

The same report noted that United States, China, Brazil, Germany, Japan and India combined accounted for the 70 percent of the jobs. Asia on the other hand accounted for 60 percent of all the renewable jobs having employed three million workers for solar PV energy alone.

These numbers can silence many naysayers who claim that a shift to greener forms of energy could cost many workers their jobs. In fact, the change to cleaner forms of energy is set to create more employment in the next coming decades as noted by Adnan Z. Amin, Director-General of IRENA. “Fundamentally, this data supports our analysis that decarbonisation of the global energy system can grow the global economy and create up to 28 million jobs in the sector by 2050,” Amin stressed.

Locally, the RE sector can create plenty of jobs for the Filipinos, too.

The  Greenpeace report “Green is Gold: How renewable energy can save us money and generate jobs, in 2013, noted that the Philippines, being a tropical country can generate as much as   4.5 to 5.5 kWh/m2/day. Data collected by the research showed that a 10 MW solar power plant usually employs 1000 people during the construction phase that lasts for six months and additional 100 full-time employees.
And this is just for solar power.

Overall, Greenpeace’s report found that the RE sector in the country can provide as much as 6.3 million jobs by 2030. Plus, renewable power in the Philippines can create some 62,625 jobs for every 7.828 RE projects for development

Unfortunately, unless we can fix the problems in the sector, then we cannot expect to reap the full benefits of RE including providing more employment for the Filipino workers.

Inconsistent and unfavorable policies to developers hinder the sector from reaping the economic benefits of harnessing more power from natural sources. The IRENA report stressed this point when it noted: “Employment trends and patterns are shaped by a wide range of technical, economic and policy-driven factors. Where policies become less favorable to renewable energy, change abruptly or invite uncertainty, the result can be job losses or lack of new job creation.”

The developments in the last few months have been a testament to the uncertainty in the energy sector. Just last December, the Commission on Audit suspended the four commissioners of the Energy Regulatory Commission or ERC.  A bill in Congress is seeking to abolish the commission was filed in the lower house after. By February, the Court of Appeals’ granted a temporary restraining order stopping the suspension. The conclusion of this saga remains to be seen.

Plus, we are also dealing with the cha-cha of our government or back and forth of our government in increasing the shares of renewables in our power mix. The Energy Department had a goal of sourcing 35 percent of our overall power needs from RE by 2030 and later pushed the deadline further to 2040.

In fact, in the next decade, the share of coal is set to increase by 10 percent as noted by Fitch-owned, BMI “The share of coal [is]actually increasing over our 10-year forecast period—from just under 50 percent in 2017 to over 55 percent by 2027,” BMI noted. What’s worse is that the contribution of renewables in our energy mix will likely decrease to 16 percent in 2027 from 20 percent in 2020 according to the study.

These numbers do not reflect our goal to source more power from renewable energy. So, we are unlikely to generate more jobs from the RE sector if this projection materializes.

Aside from missing out on having lower energy costs and helping our environment, the Philippines is likely to miss out on the opportunity of providing additional jobs from the development of more renewable energy plants.

If we can only get our act together, then we can surely reap the benefit of having more jobs from harnessing more power from renewables especially since the Philippines is blessed with overflowing natural resources. Doing so will reduce the burden on Filipino households and provide individuals with more jobs and higher disposable income which Filipinos need and deserve.

References:

Greenpeace report “Green is Gold: How renewable energy can save us money and generate jobs

IRENA report, Renewable Energy and Jobs Annual Review 2018

http://www.manilatimes.net/coal-top-55-ph-power-mix-2027/377594/

CAREER EXPO 2018

College of Economics and Management Career Expo Fair 2018
University of the Philippines Los Baños (UPLB)
June 1, 2018

This morning I woke up to the realization that 2 months ago I turned a new leaf in my life: I became a senior citizen. And nothing would have been more profound as a reminder than the fact that you see me in a T Shirt and jeans instead of the suit I was planning to wear to this morning’s affair.

You see, as I was dressing up to come here, I absentmindedly locked the dressing room of my bedroom. At that very moment my wife, who keeps the key, was 30,000 feet in the air on her way to Davao. So rather than come here naked, I decided to wear what was available outside the dressing room.

This is what I wear everyday: T-shirt with jeans, loafers, and no socks. Throughout most of my professional life I wore nothing but suits and barongs. So when I retired in 1998 from being a professional employee to become an entrepreneur, I decide to just live a simple life with simple clothes.

However, I advise you not to follow my example in your first job interview.

My advise: wear comfortable, inexpensive but decent clothes, and most importantly, wear your passion in your face and in your voice.

Passion? Yes, passion.

Passion is what drives you everyday. Passion is why you do what you do everyday.

Maybe it is serendipity that I locked myself out this morning and I was forced to wear this shirt: the UP Vanguard shirt. When I was a student here in UPLB, I pursued advanced ROTC. So for four years while I was pursuing my Agribusiness degree I was also undergoing military training. This training built me into what I am today and I have since embraced the shibboleth of the UP Vanguard: Duty well performed, Honor untarnished and Country above self.

Country above self: this has been my passion, this has been why I go to work everyday.

Before you embark a career whether it is finance, marketing, or whatever, you should know your “why” – what makes you want to wake up every morning and do something useful with your life. Professionally, this is the only way to become happy with your career, with your professional life.

I started as an financial analyst in Davao City for a financing company. Davao at that time was a war zone but that was probably the reason why I was attracted to that city. As a financial analyst I had to do financial projections on yellow columnar sheets using pencils and calculators. No excel spreadsheets – if after working for 5 hours you find that your balance sheet is not balanced, you would have to redo your entire worksheet, by hand. Today you have Excel spreadsheets with all sorts of sophisticated formula in cells; I am sure you find the “Goal seek” function very useful.

My advise: do not jump into your spreadsheets blindly. Learn first the fundamentals – the link between the P&L, the cash flow, and balance sheet. Learn to differentiate between accounting and finance issues.

As I told you, Davao was then a war zone. And all managers from Manila assigned to Davao inevitably resigned because of the peace and order problem. A grenade exploded right in front of our office that blasted the glass walls of our office. We saw people shot in front of us and in many occasions we were pursued by armed men in the countryside.

So there came a time when our Head Office asked me to be the ACTING TEMPORARY OIC. At 21, when my colleagues were struggling as clerks, I accepted the challenge. I became the head of the branch of one of the biggest financing company in the country. Eventually I ran the Mindanao operations, supporting small and medium enterprises, helping them with credit so that they too can help bring goods and service to the people of Mindanao.

I must have done well because when came back after pursuing my masteral degree abroad, the company made me the head of a development bank in Mindanao. I was 26 then. It is one thing to do credit analysis and then market your loans. What is more challenging is to market for deposits and then matching these with loans that you give out. You need to match the risk profile and cost of your deposits with the risk profile and .revenue from your loans.

Many of you will not have the privilege with being given this challenge. Many of you will work for a bank and will be in one of the departments of that bank. While I urge you to work your way all the way to the top, learn the fundamentals of finance: cost and risks.

My deep understanding of this fundamental relationship between cost and risk helped me immensely when at 36, I was asked by President Ramos to run the largest power company of the country: the National Power Corporation that had the biggest problem of the country as well. The country was experiencing 12 hour brownouts, we were short by roughly 4,000 MW that required over US$5B, the company had no cash and in fact was losing money, the government had no money having just come from a series of coup de etats, and protests were in the streets.

Question: how does an Agribusiness graduate of UPLB become part of the solution to an enormous power engineering problem?

Answer: know your calculus, finance, and accounting well enough to know how to understand the relationship between costs and risks. And be a true iskolar ng bayan by being honest in your work. Your honor untarnished.

Let me ask you: what is more expensive: a power source that costs P5.00/kwh and stays at that level in nominal terms for 25 years, or one that costs P4.50/kwh but is indexed to the price of coal and the forex for the next 25 years. How would you evaluate that?

The answer lies in what you have learned in the four years that you have been here. If you cannot figure that now, either you were absent when that subject was being taught or, you are just a late bloomer.

At this point, I want you to stand up. Look at the people to your right, left, and behind or in front of you. Shake their hands, embrace them, but no kissing. Take your seats.

Remember the names of your friends and classmates, and remember them well. Keep in touch. Be active in the alumni. As you go up through your career you will learn that it is not what you know but who you know that eventually will matter. Some people will tell you that this is a harsh reality: “hindi ako na promote kasi hindi ako sipsip.”

But that is reality.

That is marketing: dapat sumpsip ka sa customers mo.

However there is a caveat: a sincere sipsip cannot be shown unless you have the passion to serve your customers, your market. You cannot serve your market and you cannot be good in marketing unless you know why you are doing what you are doing. And only then can you be good in selling whatever it is you are selling as a person or as a company.

This is my take away: if you want to pursue a career in finance make sure you understand the fundaments of risk and cost. A career in marketing will require you to be passionate about what it is you you so that you can relay that passion to your market in whatever form it may be.

The main message is this: be passionate about what you believe in and let that passion drive you. That way you get to meet people and influence their lives positively with whatever it is that you are passionate about. Conquer the world with you passion!

DUTY HONOR COUNTRY: this is my passion

What is yours?

Good morning and good luck to you all.