Huge volcanic eruption in Philippines 'could happen in days'



LEGAZPI // The Philippines' most active volcano could have a huge eruption within days, officials warned today, after detecting a drastic surge in earthquakes and eerie rumbling sounds in surrounding foothills. Tens of thousands of villagers have been evacuated as a precaution. Scientists raised the alert level for the Mayon volcano after 453 volcanic earthquakes were detected in a five-hour span Sunday, against more than 200 on Saturday, said Renato Solidum, chief of the Philippine Institute of Volcanology and Seismology.

The five-step warning system was raised to level four, meaning a hazardous eruption "is possible within days". Level five is when a major eruption has begun. Army troops and police will intensify patrols to enforce a round-the-clock ban on villagers moving within an eight-kilometre danger zone around the 2,460-metre mountain, said Joey Salceda, governor of Albay province, 340 kilometers southeast of Manila.

More than 40,000 villagers have been moved to school buildings and other emergency shelters, but some have still been spotted checking on their farms in the prohibited zone. Mr Salceda said about 5,000 more villagers were being evacuated away from the volcano. The cone-shaped volcano began emitting red-hot lava and puffing columns of ash last week. It belched a plume of greyish ash nearly a kilometre into the sky Sunday, and lava has flowed about 4.5 kilometers down the mountainside, Mr Salceda said. A major eruption can trigger pyroclastic flows, superheated gas and volcanic debris that can race down the slopes at very high speed, vaporizing everything in their path. There can be more extensive ejections of ash, which can drift toward nearby townships.

In Mayon's major eruptions in recent years, such pyroclastic flows have reached up to six kilometres down from the crater on the volcano's southern flank, a farming region where most residents have been evacuated, Mr Salceda said. Army checkpoints have been set up and patrols have been intensified to ensure residents will not sneak back to check on their homes and farms, as some have done in recent days, Mr Salceda said. "I have set a very high bar, which is zero casualty," Mr Salcedasaid. "If there's a lull and you step back into the danger zone, you'll immediately be escorted out."

The evacuations were unfortunate, coming so close before Christmas, but authorities will find ways to bring holiday cheer to displaced villagers in emergency shelters, he said. Mr Saleda said residents are used to playing a "cat and mouse" game with Mayon, a popular tourist attraction because of its near-perfect cone shape. Residents who briefly returned to their homes within the danger zone this morning to check on their belongings reported hearing eerie rumbling sounds. Some were seen by journalists tending to their farms within the prohibited zone near Guinobatan township.

In 1991, Mount Pinatubo exploded in the northern Philippines in one of the world's biggest volcanic eruptions of the 20th century, killing about 800 people. Mayon last erupted in 2006, when about 30,000 people were moved. Another eruption in 1993 killed 79 people. The first recorded eruption was in 1616 but the most destructive came in 1814, killing more than 1,200 people and burying a town in volcanic mud. The ruins of the church in Cagsawa have become an iconic tourist spot.

* AP

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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