Catch-22
Renewable energy (RE) proponents and advocates find themselves in a paradoxical situation where they may have to compromise their steadfast stance against the proliferation of mining projects.
Civil society groups that support RE have questioned the rationale behind opening mines for energy transition minerals, arguing that doing so would exacerbate rather than alleviate the country’s vulnerability to climate hazards.
The Philippines is one of the most mineral-rich countries in the world, ranking second in the production of nickel ore and being a major producer of copper and other minerals essential for the production of batteries used to store energy.
RE’s potential as a baseload energy source relies on the manufacture of efficient batteries.
A 2023 study by the Berlin-based think tank Climate Analytics indicated that the Philippines would need 1,376 kilotons of copper and 29.5 kilotons of nickel to fully transition to 100-percent RE generation, based on 1.5-degree Celsius aligned pathways.
The copper requirement could be met in 4.6 years, while the nickel requirement would take only 1.2 months.
Pro-RE groups attribute the projected increase in demand for transition minerals to the continued prioritization of private over public transport and centralized over decentralized power generation.
According to a 2021 report by the International Energy Agency, the demand for transition minerals like copper, nickel, and cobalt will grow sixfold to achieve net-zero emissions by 2050.
Electric vehicles are the main contributor to the increase in demand, accounting for 77.4 percent of nickel demand, 98.7 percent of cobalt demand, and 21.4 percent of copper demand.
Double your money
Traders continue to bet on a bull market that will last until the end of the year, despite the recent downturn in the index.
When the stock index recently reached 7,500, it became the top performer across the ASEAN region after 27 consecutive sessions of gains. Although it has tapered off lately, the consensus 12-month index target remains at 8,354, based on Bloomberg’s target price compilation.
This was primarily driven by foreign funds, with a total of $411 million flowing into the market during this streak, pushing the year-to-date balance to $87 million compared to a negative $500 million in the first half.
Sensitivity to interest rates and favorable valuations are among the factors that have triggered renewed foreign interest in the local stock market.
The Philippines is one of the markets with positive rate differentials compared to the US but still remains historically low.
Banks and conglomerates top the list of most net foreign-bought stocks during the current streak.
Recently, foreign interest has also been observed in the consumer sector, while there appears to be limited interest in the property sector, with only ALI seeing some net inflows.
Market analysts recall that previous bear cycles and low-growth or recessionary years, such as the 1997-1998 Asian Financial Crisis and the 2008-2009 Global Financial Crisis, were followed by decades of strong growth or bull cycles in the equities market, typically lasting two to four years and resulting in average cumulative gains of 100 percent to as much as 250 percent.