Businessmirror August 02, 2018

NEW ZEALAND HAILS B.O.L. SIGNING, TO PURSUE MINDANAO DEVT PROJECTS

By Recto Mercene @rectomercene & Cai U. Ordinario @cuo_bm

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EW Zealand Ambassador David Strachan has called as an “outstanding achievement” the recent signing of the Bangsamoro Organic Law (BOL), as he expressed his country’s intent to continue supporting peace and development in the

New Zealand Ambassador to the Philippines David Strachan fields questions from the media during the BusinessMirror Coffee Club forum in Makati City on Wednesday. ALYSA SALEN

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south, notwithstanding the challenge of rebuilding Marawi and dealing with a fresh wave of terrorism after 11 people were killed by a suspected suicide bomber in Basilan on Tuesday.

“First of all, I want to congratulate the Duterte administration [for] forging this outstanding BOL, which is truly an historic breakthrough for your country,” he said at a BusinessMirror Coffee Club forum on Wednesday, where he was guest of honor.

“It’s not only good for the people of Mindanao, particularly for the Moro people, it’s

good for the stability of your country and for the region as a whole.”

In a separate development, the Asian Development Bank, in a statement also on Wednesday, hailed the BOL’s signing.

The ambassador made the remarks as Philippine authorities stepped up their investigation to unearth the identity of the man who drove an Elf truck that blew up near a military checkpoint and was himself killed. The man spoke neither Filipino nor the dialect, and was believed to be either a Malaysian or Indonesian.

Continued on A2

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Bicameral panel okays coco farmers’ trust fund

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By Jasper Emmanuel Y. Arcalas

@jearcalas

HE coconut-levy trust fund is a step closer to becoming reality after the bill reconciling the differences between the House of Representatives and Senate versions was approved by the bicameral conference committee on Wednesday.

After the bicameral version is ratified separately by the two chambers of Congress, President Duterte is expected to sign into

law within the month the bill, which will be called Coconut Farmers and Industr y Development Act, according to Sen.

Cynthia A. Villar.

“We will just have to write [the bill] with all the bicameral changes and then it is okay. We have ap-

proved it in principle,” Villar, who chairs the Senate Committee on Agriculture and Food, told reporters on August 1.

Speaker Gloria Macapagal-Arroyo said the House is eyeing to ratify the bill on Monday. “Like today, there’s going to be a conference committee on the coco levy, so we hope to be able to finish that tonight, so hopefully it can be ratified on Monday,” Arroyo said.

Under the bicameral-approved bill, the P105-billion coconutlevy fund would be invested in government securities, such as Treasury bills, to earn at least 2 percent to 3 percent annually, according to Villar.

Continued on A2

PHL factories outperform Asean peers despite dip in output

By Bianca Cuaresma

Firm fleeing trade war relocating to PHL soon

By Elijah Felice E. Rosales

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@alyasjah

HE Philippines has netted an international firm fleeing the trade war between China and the United States, and is seen to attract more multinationals retreating from the situation.

Trade Undersecretary Ceferino S. Rodolfo Jr. confirmed to the BusinessMirror an international firm is headed to Manila to build a manufacturing facility.

The firm, popular for its athletic goods and clothing, is locating in the country to escape the string

of protectionist measures being taken by China and the US. “It means they are readying because it is getting worse by the day in China. The country has a labor situation, then the trade war,” Rodolfo said in a mix of English and Filipino. The firm’s products are not yet covered by the tariffs imposed

by China and the US, but Rodolfo argued they will most likely be in the days to come. As the world’s largest economies go at it, multinationals are seeking refuge in neutral countries, such as the Philippines, he added.

Continued on A2

@BcuaresmaBM

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HE drop in consumer demand caused the performance of the Philippine manufacturing sector to slip in July, according to a report released on Wednesday.

Despite this, data from international think tank IHS Markit showed that the Philippine manufacturing sector was the second best performer in Southeast Asia.

IHS Markit announced on Wednesday the latest results of the Philippines Purchasing Managers’ Index (PMI), which showed a notable slowdown to 50.9 in July, from the 52.9 recorded in the previous month.

The PMI is a composite index that gauges the health of the country’s manufacturing sector. It is calculated as a weighted average of five individual subcomponents.

Readings above the 50 threshold signal a growth in the manufacturing sector, while readings below 50 indicate deterioration.

IHS Markit said the growth in both output and new orders “slowed

A Seoul initiative: Building a ‘labor-respecting society’ Rene E. Ofreneo

laborem exercens

T TOYOTA@30 President Duterte receives from Toyota Motor Corp. President Akio Toyoda the keys to 30 Toyota units donated

to the government by the leading car manufacturer to mark its 30th anniversary. Cheering on the turnover are (from left) Executive Secretary Salvador Medialdea, Toyota Motor Philippines Vice Chairman Alfred Ty and Toyota Motor Philippines President Satoru Suzuki. Story on A8. NONIE REYES

he mass media coverage of President Duterte’s diplomatic visit to South Korea last June was overwhelmingly focused on the kiss that the President planted on the lips of a Filipina during an OFW assembly. The Filipina is married to a Korean national and has two children. Like other feminists in the country, Sen. Risa Hontiveros bristled with disgust over the President’s macho behavior, describing it as “a despicable display of sexism and grave abuse of authority.”

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PESO exchange rates n US 53.1600

n japan 0.4753 n UK 69.7938 n HK 6.7729 n CHINA 7.7969 n singapore 39.0624 n australia 39.4766 n EU 62.1547 n SAUDI arabia 14.1752

Source: BSP (1 August 2018 )

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Military doubts IS’s ‘martyrdom operation’ claim in Basilan blast T

Land developer ready to go back to real-estate biz after SC ruling

By Rene Acosta

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@reneacostaBM

he military is still probing whether the bombing in Lamitan City, Basilan, that killed 10 people, most of them members of security forces, was really a handiwork of the Islamic State of Iraq and Syria (ISIS or IS), even as the Armed Forces (AFP) still maintain that the attack may have been perpetrated by terrorists belonging to the Abu Sayyaf Group (ASG).

The investigation is being undertaken as the IS, which is involved in the siege of Marawi City last year, claimed responsibility over the car bombing—and even a possible suicide bombing as the driver of the van was among those killed—saying the powerful blast was a “martyrdom operation.”

Nat iona l Sec u r it y Adv iser Hermogenes C. Esperon Jr. said whether the IS or the ASG was behind the bombing is still the subject of the ongoing investiga-

tion by the government, and the ongoing operations by the government against them, and even other lawless groups in Mindanao will continue.

“It’s very easy to claim the incident, but ISIS or no ISIS, the operation and probe will continue,” he said.

Military Spokesman Col. Edgard A. Arevalo said military officials have reasons to believe that the bombing, which came on the heels on the signing of the Bangasamoro Organic Law by President

Bicameral panel okays coco farmers’ trust fund Continued from A1

The fund will be managed by a

“reconstituted” Philippine Coconut Authority (PCA) instead of a separate committee, Villar added. The reconstituted PCA means that the board would be comprised of four government representatives, one industry representative and six coconut farmers.

The PCA will only be able to use P5 billion of the trust fund annually until the whole amount is wiped out.

“Right now the amount is P105 billion, and if you divide that by P5 billion that is 21 years. But that fund will still earn interest, so it would last about 25 years,” Villar said.

The trust fund will be used accordingly annually: 30 percent for shared facilities; 30 percent for farm development; 15 percent for empower of farmers organizations; 15 percent for scholarship and 10 percent of health benefits of farmers, according to Villar.

Aside from the trust fund, the bicameral version of the bill requires a P10-billion mandatory budget appropriation for the PCA annually.

“The P10 billion that will be given by the government for the coconut industry will be used [as follows]: 20 percent for infrastructure, 25 percent for shared facilities program,” Villar said.

“Then there’s also for planting and replanting [program]; the establishment of nurseries; for intercropping; for research and development and for creation of markets. Those are all indicated in the bill and that should be followed by PCA,” Villar added.

Villar said implementation of the law is expected next year.

The approval of the bill comes after President Duterte, in his third State of the Nation Address (Sona), urged the bicameral conference committee last week to convene as soon as possible to finalize the legislation that would finally allow the utilization of the coco levy fund.

PCA hails approval

PCA Administrator Romulo de la Rosa said they welcome the approval of the bicameral version of the bill despite the fact that “not everyone will be completely happy with it.”

“I’ve been talking with farmers and they are desirous to have the bill passed. It’s been so long and now finally we have it. Now we can already use the money so it is a most welcome development,” de la Rosa told the BusinessMirror.

Some farmer groups have sought the creation of a separate coconut trust fund committee instead of making the PCA the sole handler of the fund, according to de la Rosa.

De la Rosa disclosed that Congress will file a “partner” bill “immediately” that would allow the reconstitution of the PCA. “A partner law will be passed which will mandate the reconstitution of the PCA board. They have to be separate,” he said.

“The agreement earlier at the bicam is that it will be filed immediately because leaving it out would delay the implementation of the [coco trust fund act],” he added.

Firm fleeing trade war relocating to PHL soon Continued from A1

“ There are a lot of firms now inquiring about investing here, and some have existing facilities. It is just a question of expanding the facilities,” the trade official said.

However, the government is cautious about allowing Chinese firms to flood the country, as the US might still block their products from accessing the American market.

“Actually, there are [Chinese firms planning to relocate here]. However, we are more careful on that because if the US gets wind of it, even if they are situated here in the Philippines, even if it has value added, they will

block that,” Rodolfo explained.

“Normally, under [multilateral trading] rules, as long as the product has value added, there is no problem with it. What we are guarding against is transshipment,” he added.

Transshipment is the shipment of goods to an intermediate destination to unload it there, then carried off to another destination. In the case of the trade war, Rodolfo said the government is wary of products created in China, off-loaded here, only to be transported to the US. “It should be partly created here before it is shipped to the US. That is permitted, as long as it has value added from us,” Rodolfo added.

Duterte, has the makings of the ASG, a group that has joined the IS and the Maute Group during the attack of Marawi last year.

“We have persistent reports that point to the Abu Sayyaf as the group responsible to the IED [improvised explosive device] explosion in Lamitan City, Basilan.

Their demand for P50K in extortion money was refused by [the] local government,” Arevalo said in a news statement issued on Wednesday.

“By committing this dastardly and cowardly act, the ASG wanted to reverse the decline in their manpower and firearms; to entice fresh recruits; to portray strength as a force capable of terrorist attack; and to draw foreign funding,” he added.

The military spokesman said the IS, or even any other group, can easily claim responsibility over the attack for whatever reasons, and all these claims are being looked into.

“Any terrorist group or organization can conveniently claim responsibility and ride on the incident for their own glorification.

Jumping into it will be like aiding their narrative and lending themselves [the people] as instruments of terrorists’ propaganda,” he said.

“Nevertheless, we are not discounting the possibility that they [IS] are indeed responsible—just

as there is also a possibility that other group besides the Abu Sayyaf Group could be responsible in that dastardly and cowardly terrorist act,” Arevalo added.

Defense Secretary Delfin N. Lorenzana said it is still early to tell whether the IS or the ASG was behind the bombing, given the investigation that is being undertaken by security forces.

“As we speak, there are several theories circulating regarding the circumstances surrounding the incident. Although we are not discounting them entirely, all of these are just pure speculation at this time and are now the subject of an investigation being conducted by a joint team of the AFP and PNP [Philippine National Police],” the defense chief said.

“As such, I enjoin everyone not to jump to any conclusion and just allow our investigators to do their job,” he added.

Lorenzana condemned the attack, vowing justice for its victims.

“We will do everything within our power to get to the bottom of this incident and we will apply the full force of the law on the perpetrators. I assure the loved ones of those who perished that your government is grieving with you and that we will provide you with all the support that we can possibly give,” he said.

HE camp of property developer Delfin Lee has welcomed the decision of the Supreme Court (SC) that downgraded the criminal charges filed against him and several others from syndicated estafa to simple estafa on accusations that they availed themselves of “ghost loans” from the Home Development Mutual Fund (Pag-IBIG) Fund in 2009.

Lee’s legal counsel Rony Garay insisted that Globe Asiatique (GA) was doing “legitimate” real-estate business prior to the controversy, which, the lawyer said, led to his client’s arrest and detention for four years.

“According to my client, this is the right opportunity to sit down with the new officers of the Home Development Mutual Fund [HDMF]so that they may be enlightened as to the real and true issues behind this legal battle, which adversely affected the homeowners of the Xevera Mabalacat and Bacolor township projects of Globe Asiatique Realty Holding Corp.,” Garay said.

The lawyer added the pronouncement of the SC was just a reiteration of the prevailing jurisprudence on what should constitute syndicated estafa.

Garay explained that in sydincated estafa, the alleged victim, which in this case is the Pag-IBIG Fund, should not be the one that solicited funds from the general public, and that the respondents or the accused should be either owners, officers or employees of the entity or corporation that solicited funds from the general public.

“Globe Asiatique, the company of Mr. Delfin Lee that is embroiled in the fiasco, never solicited funds from the general public,” Garay stated.

“Globe Asiatique is a legitimate real-estate company which responded to the government’s call for active private-sector participation in providing low-cost and quality houses to our people, both with formal employers and self-employed,” he added.

The Court’s decision has paved the way for Lee’s temporary liberty, as it allowed the latter to post bail as a consequence of his criminal case being downgraded.

In its ruling on Tuesday, the SC affirmed the decision issued by the Court of Appeals in 2013, which held that Lee can no longer be prosecuted for a nonbailable charge of syndicated estafa, following the dismissal of charges against two of his co-accused, Pag-IBIG Fund Foreclosure Manager Alex Alvarez and GA documentation head Christina Sagun.

A case of syndicated estafa requires at least five respondents.

The syndicated estafa case against Lee was filed by the HDMF on allegation that it sustained a P6.6-billion damage through a breach of warranty committed by GA in the 2009 memorandum of agreement (MOA) and in the funding commitment agreements (FCAs) the realty firm entered into with HMDF. The businessman maintained that he was innocent of the charges.

In November 2013 the CA Special 15th Division set aside the arrest warrant issued against Lee by the Regional Trial Court of Pampanga City and ordered the dismissal of the syndicate estafa case.

Lee’s camp said it has yet to secure a copy of the SC’s resolution.

Joel R. San Juan

New Zealand hails BOL signing, to pursue Mindanao devt projects Continued from A1

Meanwhile, Strachan told the BusinessMirror for um that New Zealand Foreign Minister (Winston Peters) will extend his congratulations to Foreign Secretary Alan Peter S. Cayetano when they meet in Singapore at this week ’s Ministerial Meeting.

President Duterte signed the BOL, which seeks to bring peace and development in Mindanao, on Thursday, less than a week after it was ratified by Congress.

Poverty reduction

The Asian Development Bank (ADB) believes the passage of the BOL will increase the country’s chances of meeting its povertyreduction goals.

In a statement on Wednesd ay, t he A DB cong rat u l ated the nationa l gover nment for the recent signing of the BOL, which aims to grant autonomy to Mindanao.

Based on the 2015 poverty estimates, the Philippine Statistics Authority reported that among the country’s three major island groups, poverty in Mindanao was the highest at 36.2 percent. Some 8.86 million Filipinos are considered poor in the region.

“The government’s efforts to create stability in Mindanao will usher in more opportunities to end poverty in the region.

The ADB stands ready to as-

sist the government in addressing socioeconomic inequalities in Mindanao and is preparing to roll out initiatives targeting this purpose,” said ADB Country Director for the Philippines Kelly Bird.

The ADB recently increased its efforts to address Mindanao’s development issues by extending a $380-million loan to improve 280 kilometers of national road and bridge networks. It was the f irst Mind anao -specif ic loan granted by ADB in 16 years, as it boosted its support in the region for rural and community-driven development, social protection and road-net work improvement.

The ADB said it is finalizing its 2019–2021 Country Operations Business Plan (COBP) and 2018–2023 Country Partnership Strategy (CPS).

The COBP and CPS aims to include greater support for Mindanao’s development, particularly in the areas of infrastructure, capacity building specifically for local governments, education and skills training, youth employment, and disaster-risk management.

“The passage of the landmark law is a significant step toward achieving lasting peace, which will allow Mindanao to reach its full potential as a key driver of growth and development for the Philippines,” said ADB

Vice President Stephen Groff.

New Zealand assistance

According to the Strachan, meanwhile, New Zealand has contributed about P380 million since 2011 at three projects that has been run by the Food and Agricultural Organization of the United Nations.

One of this is the rural rehabilitation project in Maguindanao and North Cotabato Provinces “and increasingly, if you draw down on our aid program to this country, there’s an increasing focus on Mindanao.”

In a bid to strengthen the poor’s literacy in Southern Mindanao, Strachan said his embassy is “adopting one of the neighborhoods of Marawi to give them a stake in their future by English education.”

Strachan said the challenge of helping rebuild Marawi does not daunt them, but he is saddened by the news of the car bomb that killed at least 10 people.

“That was very sad and disturbing news about yesterday, and you feel very sad for the innocent people, the humble people that died in that attack. And we hope that the perpetrators are brought to justice quickly.”

He said the atrocities “will unify the people of the Philippines,” and those who advocate peace in Mindanao will come toget her more t h a n e ver to

fight these terrorists, that the “moderate people of all persuasions have come together to fight this evil.”

“We’re friends, and we stand together at this time to make sure that outsiders don’t exploit the situation further,” added Strachan, who once served in the Middle East Division of New Zealand’s Ministry of Foreign Affairs and Trade.

Tighter security

Meanwhile a i r por t i m m ig r at ion a ge nt s a re work i n g with Mindanao law enforcers to identify the driver who blew up his truck near the military checkpoint.

Fortunato “Jun” Manahan, acting chief of the BI’s Intelligence Unit, said they are looking at the possibility that “he is a Malaysian or Indonesian.”

Meanwhile, airport chief Ed Monreal said “enhanced security measures” are in place following the directive of Transportation Secretary Arthur P. Tugade.

“There will be tighter screening of vehicles at the checkpoints,” he said.”We advise the public to just go through the usual airport procedures without minding the enhanced security,” which he added “shall not affect flight operations.”

“We appeal to public to cooperate, as their safety is paramount at all times.”

ERC rushing Psalm papers to recover stranded debts, stranded contract costs Continued from A8

PSALM continues to incur SDs and SCCs because the proceeds from privatization of NPC/IPP (independent power producers) generation assets and the revenue generated from the NPC-owned and IPP plants are not enough to pay its contractual obligations with the eligible IPPs and lending institutions.

SCCs and SDs are components used to compute the universal charge (UC) imposed on consumers under the Epira Law (RA 9136).

According to PSALM, the delays have resulted in an additional P34.78 billion of costs to be shouldered by consumers, equivalent to a power rate increase of P0.1973 per kilowatt-hour (kWh).

The senator told ERC representatives at a recent hearing: “After all of your controversies, dadagdagan niyo pa si Juan de la Cruz ng P34 billion in costs dahil sa delay.

This is absolutely unacceptable.

Anong solusyon ang gagawin ninyo [you are adding a burden of P34 billion to Juan de la Cruz because

of the delay. What’s your solution to this]?”

Atty. Krisha Buela of the ERC responded that the regulatory agency was currently reviewing its procedures and process flows to improve their work.

Gatchalian replied: “I’m telling you that there’s a problem in your procedures. It’s a P34-billion problem to be shouldered by the Filipino people.”

After the hearing, the senator reiterated the need to pass the ERC Governance Act (Senate Bill 1490) to foster transparency and accountability in the

deliberations and decisions of the country’s independent power sector regulator.

Substitute version

Gatchalian is expected to sponsor the substitute version of the bill reported out by the energy committee within the next few months. The Senate Committee on Energy is studying the possibility of using the P204-billion Malampaya Fund to reduce the UC paid by end-consumers on their monthly electricity bills, which could result in household savings of as high as P2,033.76 annually.

Economy BusinessMirror

www.businessmirror.com.ph

Govt agencies told: Fill up plantilla positions or else…

By Rea Cu

@ReaCuBM

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he Department of Budget and Management (DBM) is poised to issue a circular next month directing all government agencies to fill up all vacant plantilla positions under their respective offices, or risk losing these unfilled positions altogether.

Budget Secretar y Benjamin E. Diokno told reporters during a news conference on Wednesday at the DBM headquarters in Manila that as of end-July this year, 264,000 authorized positions in the government have yet to be filled, with bulk of the unfilled positions being teaching related.

“I’ll issue the circular soon, maybe end of September is a good time to evaluate the need for these vacant positions,” Diokno said.

He explained that government positions that remain unfilled for a period of five years will be up for abolition. “ T hese a re pl a nt i l l a positions, they have been there, but they have remained unfilled, if you don’t fill this up I am going to abolish these positions,” he added.

DBM data showed that teaching or teaching-related positions account for 125,000 of the total unfilled government positions, followed by general service servants at around 90,000 vacancies, militar y and uniformed personnel w it h more t ha n 34,000, as well as medical and allied medical jobs with around

14,000 vacant positions.

In terms of budget availability for these positions, Diokno e x pl a i ne d t h at some of t he budget are already with some agencies, while the rest can be sourced from the government’s miscellaneous personnel benefits fund.

“They were treated differently, teaching is already in the DepEd [department of Education] budget...but the rest are in the lump sum called the miscellaneous personnel benefits fund… We release the money upon actual hiring,” he said.

Diokno further explained that the DBM expects to create more positions for government employees in 2019 through the 2019 national budget, with around 10,000 new positions for teachers, 10,000 for policemen, 3,000 positions for firemen and 2,000 positions for jail officers.

Broken down by regions, the National Capital Region (NCR) has some 70,000 unfilled positions, Region 3 with 15,000, then Region 4A with 19,000, Region 5 with 14,000, Region 7 at 18,000, and Region 8 with 11,000 vacancies, according to the DBM. He also encouraged Filipinos to take part in the government’s “Job s , Job s , Job s ” c a r av a n , which is slated to take place on August 12. Last month the Bases Conversion and Development Authority, as well as the Department of Transportation, also said it will be holding a job fair on August 12 at the SMX Convent ion Center i n Pa say City.

Group demands public consultation on grant of mine exploration permit

Indie power market operator takes over WESM operations

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By Lenie Lectura

@llectura

fficials of the Philippine Electricity Market Corp. (PEMC) and the newly created Independent Electricity Market Operator of the Philippines (IEMOP) are close to signing an operation agreement (OA) this month, paving the way for the latter to take over the operations of the Wholesale Electricity Spot Market (WESM) by September 26.

“The target execution of the operating agreement is within the month. Right now, there are only few issues need to be settled, and also some revisions to incorporate following the comments we have received. After that, we will present that to our respective boards for final approval, and authority to execute that agreement,” said IEMOP President Francis Saturnino Juan.

The functions and responsibi lities bet ween PEMC and IEMOP will be spelled out in the operation agreement, which has been targeted to be signed on August 25.

Likewise, the OA would formalize the turnover of the use of the Market Management System (MMS) and other trading plat-

forms, as well as the transfer of market operations functions.

“Within August, we will be able to settle all the issues and finalize everything. We will have the execution by August because after the execution of the operating agreement, we would need also to already process and finalize the transfer of employees from PEMC to IEMOP. For us to be able to that, we would need to separate them from PEMC and notify the DOLE. We’re allotting 30 days for that, not later than August 25. Target of assumption of IEMOP is September 26,” Juan added.

On Monday Energy Secretary Alfonso G. Cusi relinquished his chairmanship in the PEMC. “While the DOE has bid its

fond farewell to the chairmanship of the PEMC Board, we are excited about the promising opportunities that await. Finally, 12 years after WESM commenced its commercial operations in Luzon, we have entrusted the governance of our spot market to our industry stakeholders through the PEMC. This brings us a step closer to the final structure of WESM—a transparent market run by an independent market operator that functions within a competitive and level playing field,” Cusi said.

D u r i n g it s re ce nt a n nu a l genera l membership meeting PEMC, elected board members Emmanuel Rubio (SN Aboitiz-

Power), Victor Emmanuel Santos Jr. (First Gen Corp.), Elenita Go (SMC Global Power Holdings Corp.), Juan Eugenio Roxas (FDC Utilities Inc.), Rolando Cagampan (Manila Electric Co.), Allan Laniba (Leyte Electric Cooperative III), Felino Herbert Palpallatoc Agdigos (Ilocos Norte Electric Cooperative), Gilbert Pagobo (Mactan Electric Co. Inc.), Noel Villas Aboboto (Team Energy), Ronald Dylan Concepcion (National Grid Corp. of the Philippines) and Juan (IEMOP).

Fou r new independent d irectors were also elected na mely, R au f Ta n, Osca r A l a, Jesus Lim A r ra n za a nd Peter Wa l l ace.

Finally, 12 years after WESM commenced its commercial operations in Luzon, we have entrusted the governance of our spot market to our industry stakeholders through the PEMC. This brings us a step closer to the final structure of WESM—a transparent market run by an independent market operator that functions within a competitive and level playing field.”—Cusi

Makati lawmaker bares ₧2-B plan 3 House panels endorse creation to revive Pasig River ferry system of new disaster resilience agency

By Jovee Marie N. dela Cruz @joveemarie

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By Elmer Recuerdo | Correspondent

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national coalition of environmentalist groups is asking the Department of Environment and Natural Resources (DENR) to conduct public consultations before it acts on exploration permits of metallic and nonmetallic minerals.

Bata Kita, the civil-society organization representative in the interagency Extractive Industry Transparency Initiative (EITI), issued the appeal for “meaningful” public consultations after the DENR lifted the moratorium on applications for exploration through Administrative Order 2018-13.

Exploration is the initial step to determine an area’s mineral potential, the group said, adding that this can also guide the government in identifying if and how much minerals it is willing to develop.

“Exploration requires consent from local government units and communities. We welcome information that would help stakeholders make evidence-based decisions,” Bantay Kita coordinator Tina Pimentel said.

Pimentel said her group expects that data and documents are disclosed to affected communities so they can arrive at factual and wellinformed conclusions.

“We urge that the consent process be genuinely applied, and decisions made by stakeholders be respected,” she said.

Executive Order (EO) 79 S. 2012, Section 4 allows the grant of exploration permits, despite the moratorium on issuance of mineral agreements. It also states the exploration permit grantee shall be given the right of first option to apply for development of minerals in the exploration site.

EO 79 Section 6 provides that “mining rights and mining tenements over areas with known and verified mineral resources and reserves, including those owned by the government and all expired tenements, shall be undertaken through competitive public bidding.”

“In light of the lifting of the exploration moratorium, we implore the Mines and Geosciences Bureau to prepare the guidelines for competitive public bidding, with emphasis on transparency and citizen engagement at the soonest,” Pimentel added.

Editor: Vittorio V. Vitug • Thursday, August 2, 2018 A3

File photo shows a high-passenger capacity ferry that once traversed the polluted Pasig River. The government is planning once again to relaunch the water-borne commuter-transport service by allocating P2 billion in the 2019 General Appropriations Act, according to Makati City Rep. Luis Campos Jr. Roy Domingo

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he national government has allotted P2 billion to revive the Pasig River ferry system, this time with smaller boats moving through more stations at a faster pace, Makati City Rep. Luis N. Campos Jr. said on Tuesday.

The P2 billion is already in the proposed P3.757trillion General Appropriations Act for 2019, the lawmaker, who has been pushing for the ferry service’s restoration, said in a news statement.

“The new funding will be spent to build 17 new stations along the 25-kilometer river in the cities of Manila, Mandaluyong, Makati, Taguig, Pasig and Marikina,” Campos said.

He added the new stations will be on top of the 12 previously built under the old ferry system which had ceased to operate.

Once fully operational, the new ferry service is projected to transfer some 76,000 commuters every day on water buses—24 air-conditioned boats with 50 seats each moving through 29 terminals in 15-minute intervals, according to Campos.

The previous ferry service ran aground after the private operator insisted on deploying bigger boats with 150 seats each that took a long time to fill. This caused a decline in ridership due to delayed departures and arrivals.

The Metropolitan Manila Development Authority has since been running an improvised ferry service with a limited capacity.

The new Pasig River Ferry Convergence Program is being carried out by 10 agencies led by the Department of Budget and Management (DBM).

“The program is assured of continuous funding since it is led by the DBM no less, which is good,” Campos said. “We expect the government itself to run the new ferry service, should private firms be unwilling to come in,” he said.

The lawmaker said P328 million has also been allotted to help the Pasig River Rehabilitation Commission (PRRC) renew the river to its historically pristine condition conducive to transport, recreation and tourism.

“The PRRC is getting P150 million for the Pasig River Esplanade-Lighting of Bridges Project, plus P178 million to revitalize the river’s esteros and creeks,” he said.

The targets for rehabilitation include the Estero de la Reina in Manila; the East Bank Road, Manggahan Floodway in Barangay Santa Lucia in Pasig City; Ermitaño Creek in San Juan City and the Taguig-Pateros River in Barangay San Pedro in the municipality of Pateros.

he three committees of the House of Representatives on Wednesday endorsed for plenary approval a Duterte administration sponsored measure that will pave the way for the creation of the Department of Disaster Resilience (DDR).

This, after House Committee on Appropriations approved the funding provisions for the consolidated bill on DDR, which was also passed by the House Committees on Government Reorganization and House Committee on National Defense and Security.

The approval of the measure came President Duterte called on Congress during his State of the Nation Address early last week to create a disaster management department. The substitute bill is a consolidation of eight different bills that sought to create departments and agencies for disaster management, resilience, preparedness and rehabilitation.

House Committee on Government Reorganization Chairman Rep. Xavier Jesus D. Romualdo of Camiguin said the consolidated bill has included inputs from stakeholders.

“Speaker Gloria Macapagal-Arroyo directed us to fast-track the passage of the bill and so we worked on it right away and were able to approve it at the committee level,” he said.

“The functions of certain agencies, like Office of the Civil Defense and the Climate Change Commission will be transferred to the new department. Some agencies and offices, such as the Bureau of Fire Protection and the Health Emergency Management Bureau, will be put under the DDR, while Pagasa [Philippine Atmospheric Geophysical and Astronomical Services Administration] and Phivolcs [Philippine Institute of Volcanology and Seismology] will be attached to the new department.

Also when there is an imminent calamity or during an actual calamity, the DDR may exercise command and control over other relevant government agencies,” Romualdo said.

Albay Rep. Joey S. Salceda, one of the principal authors of the bill, said the creation of the advisory council “shall promote a multidisciplinary approach to advance collaborative disaster management.”

“It should be whole-of-government, whole-of-society, whole-of- nation approach to disaster because it is so pervasive, it is so intense, and in fact, it is so critical,” Salceda said.

“We really need a multidisciplinary approach because that is already the best practice in the whole world in addressing the ever increasing complexity and intensity of disaster,” he added.

The funding shall be included in the annual General Appropriations Act (GAA). An amount of P20.2 billion has been allocated for the national disaster resilience fund, while P6.5 billion has been appropriated for the quick response fund under the 2019 budget.

Under the bill, the DDR will be the national government agency primarily responsible for disaster preparedness, prevention, mitigation, response, recovery and rehabilitation.

The bill said the department shall be the primary government agency responsible for leading, organizing and managing the national effort to reduce disaster risk, prepare for, and respond to disasters, recover and rehabilitate and build forward better after the occurrence of disasters.

The present National Disaster Risk Reduction and Management Council, which exercises coordination, integration, supervision, monitoring and evaluation functions, will be replaced by the Department of Disaster Resilience Council, which shall solely be a policy-making and advisory body on disaster risk and vulnerability reduction and management and climatechange adaptation.

The department shall ensure seamless synergy and coordination with stakeholders including civil-society organizations (CSOs), academe, and the private sector, in relation to disaster resilience programs and projects and the development and promotion of research, education and training mechanisms with relevant stakeholders.

A4

TheBroa

Business

Thursday, August 2, 2018

Young population, ICT spur g F

OOT traffic was already ankle deep when Elias Amurao (not his real name) stopped at an intersection on the way to the train station one rainy Friday evening.

He sighed, walked as the crowd did and braced himself for the ride home for an hour inside a cramped train and a jeepney ride. He settled with the thought it would only be school work until Tuesday. Amurao’s a freelancer, one of nearly a million young Filipinos who walk into the cauldron of the labor force every year. Majority of them are under 30. And, as freelancers, most of them form what is called the “gig economy.”

According to Economics Professor Aldrin P. Atienza, the “gig economy is simply the unorthodox way of the economy to grow with the help of temporary or non-fulltime employees in the economy.”

“This may include those workers that [have] other sources of income such as freelancing and parttime work,” Atienza, who teaches at the University of Santo Tomas (UST), said. “In the macroeconomic sense, however, it is greatly influenced by the increase in the purchasing capabilities of the said individuals in an economy.”

For the UST College of Commerce and Business Administration faculty member, “freelancers and part-time professionals are among the most common participants in the gig economy.”

“I’d like to highlight the fact that though they are not working full time in the said job, they are working ‘professionally’ and are finishing multiple tasks as if taking a regular 8-to-5 job,” Atienza added. “Those who are drivers of Transport Network Vehicle Services (TNVS) as well as part-time instructors for universities are considered to be participants of the said gig economy.”

TNVS, BPOs

ATIENZA said, however, that freelancers came before the emergence of drivers for TNVS, e.g., Uber and Grab. He believes freelancers, or “gig” workers for that matter, peaked with the business-process outsourcing (BPO) industry.

“As the Philippines gained more exposure internationally, the higher the cost for hiring a new employee became. Thus, with the rising costs, alternatives to getting menial work done [were] needed,”

Atienza explained. “Part-time employees tend to be more flexible and cheaper than full-time employees.”

He added that most of these employees were young people.

Atienza estimates—sans citing sources—there are at least 1.5 million online freelancers in the Philippines, most of them aged 24 to 35. And with more and more millennials demanding flexibility and independence, most definitely, freelancing will steadily grow, he added.

Atienza said he personally knows individuals whose main source of income is generated from freelance work.

“I think it has the highest flexibility in terms of work and life balance, which makes it even more attractive,” he told the BusinessMirror. “However, as most jobs are, it takes years of experience and hard work in order to make a living as it is in any industry.”

Amurao’s gig

ALREADY in his senior year as a Psychology major in the Polytechnic University of the Philippines, Amurao juggles his time between his studies and a character-designing gig for a parody animation titled “RaPal’s Dark Res.” Two years ago, he worked for a BPO firm located somewhere in Manila.

“I chose to work because we had a financial crisis in the family; to help my mother earn back her business,” he said.

The 19-year-old told the BusinessMirror he dropped the BPO work for a second gig, which he only “tried out as a way of applying my self-learned skills in vector graphics software.”

“In doing the character-designing gig, I worked in my own bedroom. The environment was just the same as when you’re inside [an office],” he said. “There’s no pressure until you see your calendar and you’re a day away from your deadlines. Ha-ha!”

Amurao added: “Usually as a freelancer, I think it really depends who you work for when choosing jobs to work on.”

According to him, he was a

NATIONAL ICT Confederation of the Philippines Inc. President Antonio M. Del Carmen cites the importance of young workers in the information and communications technology sector during the launch of the digitalcitiesph portal on July 20 in Quezon City. BEVERLY DE LA CRUZ

character designer first before going into background design.

“[That] isn’t really my forte but since I am not that assertive I just did what I was asked to do,” Amurao said.

He said it’s difficult when responsibilities in work and at school pile up at the same time.

“I do feel stressed all the time, especially when there are both deadlines to meet at freelance work and at school,” Amurao said.

To cope, he said he goes into binge-watching and “scrolling eternally in social media” after working on both work and school.

Getting younger

ACCORDING to the Philippine Statistics Authority (PSA), the labor force has been getting younger.

In January, the PSA recorded that more than 60 percent of the population 15 years old and over are in the labor force. This means that six in 10 of the population aged 15 years and over were either employed or unemployed.

The data places the labor force participation rate (LFPR) at 62.2 percent.

The country’s total number of employed persons is pegged at 41.8 million. Around 61.7 percent of the total employed persons were wage and salary workers. Those who worked in private establishments made up 48.7 percent, and those working in government and government-controlled corporations were accounted at 8.1 percent.

About 27.7 percent of the total employed persons were self-employed without any paid employee or those who were engaged in selfemployment. The unpaid family workers made up 6.9 percent and the employer in own family-operated farm or business, 3.6 percent, the PSA data reveals.

Two-thirds of the total employed persons are full-time workers comprised of 63.6 percent while the rest, part-time (35.2 percent). The latter are defined as people with a job but not at work (1.2 percent).

Millennials rising

ACCORDING to Atienza, “by definition, freelancers are considered ‘underemployed’.”

The government, by way of the PSA, defines the underemployed as persons “who express the desire to have additional hours of work in their present job or an additional job, or have a new job with longer working hours.”

The PSA data revealed that 44.6 percent of the underemployed worked in the services sector while 32.2 percent were in the

agriculture sector; about 19.2 percent were made up by the industry sector. As of January, the visibly underemployed or the underemployed —persons who work for less than 40 hours in a week—make up more than half (57.1 percent) of the total underemployed. Persons who work more than 40 hours or more in a week made up 41.1 percent.

Atienza considers these persons as forming the bulk of the gig economy that he also sees as growing with the entry of millennials.

“A big influence to this is the rising number of millennials who are looking for a more flexible way of working,” he explained. “The popularity of ‘home-based’ earning as well as the lifestyle of ‘travel and work’ has greatly influenced the desire of millennials to work under the gig economy.”

Growth downside

ATIENZA added inflation is also spurring this phenomenon.

“Also, with the rising costs of basic goods in the country, all individuals are now looking for various means to support the needs of their family.”

But Atienza said the growth of the gig economy is also its downside.

“However, the rise in the number of freelancers would mean a rise in competition, thus affecting prices of projects available in the market,” he told the BusinessMirror. “There are a number of factors that are much needed in order to keep this economy alive.”

Atienza said some of these factors include infrastructure (Internet speed and connectivity), technology (evolution in apps and programs), culture (rise of millennials and zillinials) and government support (issue against TNVS and online lodging sites).

Outside Manila

ACCORDING to Antonio M. Del Carmen of the National ICT Confederation of the Philippines (NICP), the country’s advantage is its youth.

Del Carmen, president of NICP, said in a news briefing late July that compared to other Southeast Asian countries, “we have a very young population and this industry [information and communications technology] needs that type of service.”

“So I think as far as competitiveness is concerned, yes, talent is number one and that is what we should push for,” Del Carmen said. “The Filipinos are good with this industry [ICT] and that is what we want to capitalize on—our talent asset.”

aderLook

sMirror

www.businessmirror.com.ph | Thursday, August 2, 2018

A5

growth of PHL’s gig economy

INFORMATION Technology and Business Process Association of the Philippines (IBPAP) President Rey Untal, Department of Information and Communications Technology Undersecretary Monchito B. Ibrahim, National ICT Confederation of the Philippines Inc. President Antonio M. Del Carmen and IBPAP Trustee and Philippine Software Industry Association President Jonathan D. De Luzuriaga lock hands together to mark the launch of the digitalcitiesph portal on July 20 in Quezon City. BEVERLY DE LA CRUZ

Del Carmen, however, is looking at economies outside Metro Manila.

“Right now, there are 300,000 employees in the industry outside Metro Manila. That is P3.6 billion revenue per month outside the country,” he said during the launch of the digitalcitiesPH portal on July 20.

The portal, according to documents provided by Del Carmen, is a platform where local officials in the country could promote their respective local government unit (LGU) by identifying the capacity of local talents, infrastructure, cost and ease of doing businesses and digital readiness.

“And if you multiply that, in the multiplier effect for other sectors [like] transportation, commerce, housing, that is times seven,” he said. “So [that would have a big] impact in the countryside. So, a city or a town, a sleepy town outside Metro Manila, you now have that opportunity.”

Regional impact

FOR Del Carmen, the growth of the gig economy outside Metro Manila is more important. He compares this to the overseas Filipino workers (OFW) phenomenon.

“I compare it to an OFW situation where our countrymen go outside the country,” he said. “Ang nangyayari naman ngayon [What is happening now is] people in the provinces are coming to Metro Manila.”

He believes the latter leads to depreciation “in the quality of life; the balance of life.”

“If we are able to develop this [regional gig economy] and bring this to the countryside, quality of life will be better for all,” Del Carmen said. “You don’t have to leave your family in the provinces because jobs will be brought to the countryside. I think that is a key component of what we are trying to do. We are bringing jobs to the country.”

JESUSSANZ | DREAMSTIME.COM

Additional rewards

JOSEVY A. TAGUIBAO of the University of Santo Tomas believes not everything about the gig economy is hunky-dory.

“Some people stick to their jobs even if they are not happy because the job satisfies their financial needs or fear of career change,” Taguibao, a Psychology instructor, told the BusinessMirror.

She referred to Maslow’s Hierarchy of Needs. She further explained there are factors affecting job performance of an employee besides flexibility of time: fair compensation, sense of job security and sense of belongingness, among others.

Taguibao said a freelancer may also fail to meet other needs that a 9-to-5 job offers, like interpersonal relationships in the organization and the chance for career growth and recognition. Hence, she said,

a lot of the freelancer’s success is relative to personal motivation.

“Freelancing is okay, especially if it becomes an outlet,” she said citing a close friend, who is a software engineer in an ICT company, as an example.

Taguibao said while her friend works according to a routine, “his chance to grow is limited” if he sticks to one employer.

“But because of his freelance work, like handling the system of a particular company, he gets the chance to widen his experience and explore the other aspects of software development,” she said, adding that the freelance work also generates extra income.

Part-time jobs

STUDENTS with so-called “rackets” also help shape the gig economy.

Mary Joy Bautista, a fourthyear architecture student from the Polytechnic University of the Philippines, currently manages her small arts and design business called Project Dream. Bautista maintains a small store in Quezon City.

She told the BusinessMirror she intends to pursue both her intended college program as a freelance architect and at the same time manage her small business.

“You need to be practical. If I can earn from both, why not?,” Bautista said. “My dreamcatchers are related with arts and design, which are handmade.”

She credits the current K-12 curriculum as one of the factors that helped the growth of the gig economy.

Most businesses today do not require college graduates or undergraduates as employees, according to Bautista.

For Bautista, communication abilities, experience and skills are important in the gig economy as these helped her grow her small business. Still, Bautista plans to obtain a license as an architect and improve her business.

Time choices

AN entrepreneur selling photography services for additional income agrees with Bautista.

The person who requested anonymity said the number of photographers hired is relative to the scale of the event a principal who hires him requires. While managing a photo-printing shop, he also hires extra photographers based on fees.

“Since occasional naman ’yung photo coverages for big events, I tap my nephews or friends,” he said, noting that layout and printing of the photographs are done in the shop. “This way we can cut or reduce costs.”

Sometimes he takes on the project personally for extra income, but sometimes outsources the contract.

“Minsan tulong na lang din sa kanila ’yung pagbigay ko ng raket nila

kasi di ko naman kaya mag-isa na mag-picture sa isang event kahit na isang araw lang [It’s my way of helping others by giving them projects for extra income and, of course, I can’t really work on an event all by my lonesome].”

For Jim Ferrer, a staff of a multilevel marketing company, it’s better to be a freelancer.

“Kasi sarili namin ang boss at sarili namin ang time [We’re the boss and we can control our time],” Ferrer told the BusinessMirror.

“It’s our choice to go part-time and we work with the willing.”

He considers the company’s tack of hiring part-time workers as its advantage.

“These employees could help them grow their business with the help of extra people who are not paid the same amount given to a regular employee,” Ferrer said, noting the part-time workers of the firm are mostly students.

Job dispersal

A STUDY by the United Statesbased Online Labor Index (OLI) reveals that several skills are required in online gig work.

The OLI, the online equivalent of the conventional labor market statistics database, classified these skills into six occupational categories, with software development and technology as the biggest occupational category. Over onethird of the projects belong to this category.

The software development and technology set of skills is followed by creative and multimedia, writing and translation, clerical and data entry, sales and marketing support, and professional services such as accounting and law.

Albeit considered as the smallest category, the latter category of skills is deemed remarkable since these professions “have not always been at the forefront of technology adoption.”

According to Spring Valley Tech Corp. CEO Jonathan de Luzuriaga, “massive digitization is going to happen globally.”

“As industry leaders we are morally obligated to help our nation as well as every location in the Philippines to go through the digital transformation,” Luzuriaga said.

For Monchito Ibrahim of the Department of ICT, however, the gig economy is all about “jobs” and it is good for these jobs to be dispersed outside the National Capital Region.

“At the end of the day it’s all about bringing jobs to where the people are,” he said. “We’d like to reverse the current situation where 70 percent of the jobs are actually profiled in the metropolitan cities—when . . . almost 80 percent of the graduates are actually coming from the countryside.”

Interns Beverly Dela Cruz, Marc Wyxzel Dela Paz and Pearl Anne Gumapos

A6 Thursday, August 2, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Will Congress pass TRAIN 2 on schedule?

T

he country’s economic managers have acknowledged that prudent fiscal management by the current and previous administrations has ensured strong macroeconomic fundamentals. Now they want to move the country from economic stability to inclusive prosperity. They know they have the right vehicle for the journey—tax reform, specifically the TRAIN (Tax Reform for Acceleration and Inclusion) series that they expect Congress to pass on schedule. They said the TRAIN series, when completed, will help create an environment more conducive to high growth and investment, jobs generation and faster poverty reduction.

TRAIN 1, which took effect in January, is projected to boost government revenues in 2018 to 16 percent of gross domestic product. TRAIN 2, barring hitches, will boost revenues to 16.7 percent of GDP in 2019. This means the two TRAINs will help keep Philippine debt at moderate levels despite the rollout of the “Build, Build, Build” program.

The House of Representatives is expected to pass TRAIN 2, which will gradually cut corporate income-tax rates to 25 percent, from 30 percent subject to a streamlining of tax holidays given by different investment promotion agencies. TRAIN 2 also calls for the repeal of at least 30 laws that grant incentives to investors.

The Philippine Association of Multinational Companies Regional Headquarters Inc. has warned legislators that the removal of tax holiday incentives would drive away potential investors. Pamuri also said that thousands of employees in the Regional Operating Headquarters sector will be displaced because of the proposed measure.

Unlike its bigger house counterpart, the Senate looks reluctant to adopt the measure because of the inflationary effects of its predecessor—the TRAIN 1.

Senate Majority Leader Juan Miguel F. Zubiri said no one among the senators wanted to sponsor the bill. The latest word from the chamber was that Senate President Vicente Sotto III had expressed intent to be its reluctant sponsor.

The threat of TRAIN 2 getting derailed at the Senate despite the call of President Duterte to pass it before the year ends prompted Education Secretary Leonor M. Briones—a former national treasurer—to ventilate her concerns. She said: “If Congress passes the budget but does not pass the TRAIN 2, then the government will have a problem because we will have to borrow money.” She recalled the country’s economic situation in the 1980s, when the Philippines was drawn into the global debt crisis and took years to recover.

Furthermore, a recent Bloomberg article cautioned some Southeast Asian countries, including the Philippines, to temper borrowing at a time when interest rates are on the rise. It said this would swell budget deficits and put additional strain on government finances.

Briones said it’s not advisable to cut down on expenditures because of peoples’ rising expectations from the government, such as free college tuition, increased infrastructure, jobs and assistance to the poor. If TRAIN 2 gets derailed, Briones said the adverse effect is obvious—the government would have to borrow and interest rates would be higher. The preferred mode, she added, is to raise taxes because “we want development, we want more schools, we want more roads, we want more allowances for the poor.”

Briones said it was incorrect to blame the TRAIN law for the painful impact of high inflation because there were external factors that played a role, which include the rise of oil prices in the world market and the movement in exchange rates. “The policy objectives of the TRAIN law is acceleration and inclusion, not only spreading the tax net but also inclusion in the sense of making available government services to more and more Filipinos.”

Will Congress be able to pass TRAIN 2 on schedule? The answer, it seems, will unfold in the hallowed halls of the Philippine Senate.

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Stock Market 003: Why the PSE? John Mangun

OUTSIDE THE BOX

C

omprehending the Philippine Stock Exchange (PSE) is as challenging as trying to understand the Philippines and the Filipino. It’s also complicated. But that is not a negative idea.

If the Philippines seems complicated, no wonder there’s confusion over the Department of Tourism slogan, which often changes.

For the local stock market though, maybe the slogan “Show Me the Money” works best. Perhaps even “Mo’ Money” since the local stock market is in the top 10 list of the best-performing stock markets (in local currency) since 2000.

To understand what I’m saying, imagine sitting at your computer halfway around the world. While trying to Google “Phil Collins,” up pops “Phil ippines” instead.

Then you might see “Filipino: Republika ng Pilipinas,” which itself is strange, since isn’t Spanish the national language? Somewhere down the page you might find the

“Philippine Stock Exchange.” Of course, that is one of those “Emerging Markets” like Venezuela or Somalia.

Better get back to Phil Collins.

Why should anyone—foreign or domestic—invest in companies listed on the PSE? Ignore for a moment that the Philippine economy—like the stock market—has been one of the bestperforming economies in the region the past 10 years. The global environment is always changing, particularly now with new US economic and monetary policies. We should also ignore any data showing favorable bits and pieces of the economy.

It is better to look at a thirdparty evaluation as with Thailand’s Bank of Ayudhya index of 24 emerging nations. The index plots a

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been stronger than their peers.” That statement describes the major blue chip firms and most of the secondline companies on the PSE. Foreign investors in particular are concerned about liquidity and trading volumes. The PSE functions almost like two exchanges. The companies with large capitalization can easily handle million-dollar trades and much more. The smaller caps can easily handle million-peso trades and much more. This is an active market.

Unlike domestic investors, foreigners do face currency-exchange risk. Ignoring that there are financial instruments to help mitigate that risk, there is a more important factor.

Unlike in many other countries, the Philippine peso is not manipulated by the Central Bank. Market forces within stable price fluctuation bands determine the rate.

The PSE offers a viable investment alternative with historically higher returns than similar stock markets.

Good companies within a sound economic environment make for better investment opportunities.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

A US lawmaker and the Aquino regime spread fake news to destroy the Marcoses

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combined score based on four indicators: current-account balance, foreign reserves, external debt and inflation. The top 10 ranking is: Taiwan, Thailand, Botswana, Israel, China, Philippines, Malaysia, Vietnam, Peru and India. The purpose is to see which countries are in the best position to manage risks from rising US interest rates, which is on any stock investor’s list of concerns.

However, not all stock markets are the same. What can an investor find at the PSE? One problem that US and European companies have faced is that the managers have only a small financial interest in the company other than salaries and bonuses. A poorly performing corporate president gets fired and moves on. But corporations that are majority owned by one family group cannot do that and have a greater long-term interest.

A Credit Suisse Research Institute report in 2017 said: “The investment case for family-owned companies reveals that they have outperformed broader equity markets in every region and sector since January 2006.

The financial performance of familyowned companies is also superior to non-family-owned peers. Furthermore, family businesses appear to focus more on long-term growth, and their share-price returns have

Part Four

US-Aquino political agenda shifted to blackmail

D

IRTY politics marked the litigation of the Marcoses in America. This became obvious from the remarks of Los Angeles Second District Court Judge Marian Pfaelzer when she issued a freeze order on Marcos assets worldwide: “Undersecretary [Michael] Armacost asserted that the Aquino government will view the United States’s actions on this matter as an important indicator of the future course of our bilateral relations, and stated that it is in the foreign-policy interest of the United States to honor the Philippine government’s request at the earliest possible time.”

The prosecution witness, Timothy Khan, provided the incontrovertible proof of the trial’s political agenda.

He admitted that the suit was used for political leverage when he testified: “Mrs. Aquino said, ‘No prosecution, no bases.’”

Apparently, diplomatic relations between the two nations had shifted

to the level of blackmail.

For the Aquino regime, it wanted to get its hands on the Marcos Estate and wanted the Marcoses to be declared guilty of plunder and human-rights violations by the US courts, and for the US, it wanted its military facilities and strategic interests maintained in the Philippines.

The orgy of sequestration undertaken in the rush to recover “ill-gotten wealth” tempted some of the trackers to launder some of the wealth through a mere change of custody, if not outright ownership.

Libertarian Prof. Renato Constantino wondered: “Will the so-called recovered ill-gotten wealth benefit the people directly? Or will these

sequestered companies, when finally privatized, go to some members of the new oligarchy? Disenchantment is fueled by indications that the latter course is being taken.”

Vice President Salvador “Doy” Laurel, too, had also his doubts as he was being steadily “eased out of Malacañang’s inner circle” in the power struggle between two camps, which he described as “a left-leaning clique bereft of experience in statecraft and the other just as inexperienced but allied with big business.” Although the former got the early upper hand, the latter, better endowed, ultimately prevailed.

Laurel sensed that some of Cory’s “hidden advisers” were also out to monopolize the action insofar as recovering wealth was concerned. He was briefly hopeful after President Aquino, perhaps dismayed by the slow and meager results from the Presidential Commission on Good Government, proposed the creation of another body.

On February 20, 1987, she wrote to Vice President Laurel to ask him to head the Presidential Blue Ribbon Commission. The PBRC was to prosecute the Marcos associates for offenses related to billions of pesos in “behest loans” from government financial institutions and other entities. Laurel accepted, but it took another month for Cory to issue Executive Order 150 (March 19, 1987), which created the PBRC. After another four months, the PBRC

was ready to go to court.

Then came a shocker, said Laurel: “But just as we were about to file the 10 biggest and strongest behest loan cases, the PBRC was abolished by a four-paragraph Executive Order signed by President Aquino and countersigned by Executive Secretary Joker Arroyo!”

Laurel asked Cory to reconsider the abolition of the PBRC. In his letter dated July 21, 1987, he recounted that it was Sen. Teofisto Guingona who had advocated the abolition of the PBRC. Laurel disputed the solon’s role, inasmuch as the PBRC’s functions were executive in character.

Laurel should also question how Guingona was able to make himself officially heard, inasmuch as the new Congress had not yet convened and would not do so until July 27, 1987.

Something was amiss. Inasmuch as Congress had not yet convened, how could Guingona’s chairmanship of the Senate Blue Ribbon Committee have come into play?

How could President Aquino have reached the conclusion that the PBRC would merely duplicate the functions of Guingona’s committee? Under the doctrine of separation of power, the Senate committee could undertake investigations solely “in aid of legislation.”

As Laurel pointed out, the filing of complaints in court for the recovery of

See “Arillo,” A7

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‘Deemed denied’ lives

Bread of eternal life

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Atty. Irwin C. Nidea Jr.

Msgr. Sabino A. Vengco Jr.

Tax law for business

Alálaong Bagá

N my many years in practice, I have seen how the rules in claims for value-added tax (VAT) refund have evolved.

In the early-2000 the Court of Tax Appeals (CTA) was divided on whether the 120-day waiting period is mandatory. Majority of the CTA justices were of the opinion that it is not, i.e., the taxpayer is not required to elevate a claim for refund to the CTA even if the 120-day waiting period has expired, as long as it files the claim within two years from filing of the VAT return. But later on, the Supreme Court (SC) promulgated the Aichi case where it ruled that inaction by the Bureau of Internal Revenue (BIR) within the 120-day period is deemed a denial of a claim for VAT refund.

housands ate as much as they wanted from five loaves of bread and two fish, and they thought of making Jesus their King who would feed them without a sweat. Jesus fled from them. But when the people managed to catch up later with Him, Jesus challenged them to think beyond their stomach and understand the sign He did to reveal the reign of God that makes eternal life available (John 6:24-35).

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Thus, it was made clear that a claim for VAT refund must be elevated to the CTA within 30 days after the expiration of the 120-day waiting period. As a result of this SC ruling, many claims for refund that were filed prior to the Aichi case were dismissed because some were either filed before or after the expiration of the 120-day period.

As regards the former, they were dismissed for having been prematurely filed. On the other hand, as regards the latter, some were filed after 30 days from the expiration of the 120day period. These cases were also dismissed because they were considered as belatedly filed.

It is also worth noting that, before the Aichi case, there was no definite ruling on when the two-year period to file a claim for refund must be reckoned from. Should it be counted from the filing of the VAT return or from the end of the quarter when the sales were made? The SC later on ruled that since the wordings of the law states the latter, then it is the one that should be followed. Of course, this was not without consequence. All claims for VAT refund that were filed using the date of filing as the reckoning point were dismissed for having been filed late.

There is another issue that the court is yet to resolve with finality. When should the two-year period be reckoned from? Is it within two years when the input VAT was incurred or is it within two years when the sales were made? The CTA in many cases use the former, but there are some divisions of the CTA that use the latter interpretation. This issue will also have far reaching implications when the time comes that the SC rules either way.

This brief narration of history will show that the taxpayer is the loser as the interpretation of the law changes over time. When there is a flip-flop of decisions, taxpayers are almost always left in the cold.

The evolution of the law on VAT refund is not yet over. In Tax Reform for Acceleration and Inclusion (TRAIN) 1,

Arillo . . .

continued from A6

“ill-gotten wealth” would be beyond the mandate of the Senate. If Cory the housewife could not draw this distinction, the lawyer Joker Arroyo, as her executive secretary, should have dutifully enlightened her.

Ultimately, it was not even the Guingona Committee that took over the PBRC’s mission. Laurel turned over the PBRC’s records to the new PCGG Chairman Ramon Diaz. And what happened on the cronies and their behest loans? Laurel hinted that some accommodation was reached between

the BIR is only given 90 days to act on a claim. But unlike the old law, where failure to act by the BIR is considered a denial that can be elevated to the CTA, TRAIN 1 is silent in this regard. In fact, there was an express repeal of a similar provision of the old law.

But I think the “deemed denied” principle lives. The CTA rule is enlightening. It provides that, “The CTA shall have exclusive jurisdiction on inaction by the Commissioner of Internal Revenue in cases involving…refunds of internal revenue taxes…where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial.”

Note that TRAIN 1 uses the phrase “the Commissioner shall grant a refund for creditable input taxes within 90 days.” Clearly, there is a specific period of action in the law.

If you reconcile these two provisions, you will come to a conclusion that if there is an inaction of the BIR within 90 days (which is the specific period of action), it will be deemed a denial which must be elevated to the CTA. There have been billions of pesos lost because of the continuing evolution of the VAT refund provision of the Tax Code.

Now that you know your history, as laid down above, it is now up to you to use that knowledge to make a better judgment.

If there is an inaction on your claim for VAT refund after 90 days, should you elevate your claim to the CTA or just pray that the BIR will act on the same and risk forfeiting any judicial relief?

The author is a partner of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of WTS Global.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at irwin.nidea@ bdblaw.com.ph or call 403-2001 local 330. the old and the new oligarchs.

Added Laurel: “Significantly, the issue of behest loans would surface again in the early part of the Ramos administration as many members of the pre-Marcos oligarchy would be increasingly assimilated into the new political configuration.

“Questions that implicated ethical, political and economic problems ultimately cropped up. It was a development which Cory herself allowed to firm up, with full consent.”

To be continued To reach the writer, e-mail cecilio.arillo@ gmail.com.

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Eternal life and the bread from heaven Jesus admonished the crowd not to hanker “for food that perishes but for the food that endures for eternal life.”

It is natural that people be occupied with having food to eat in order to survive. Natural food is a parable of life. As it signifies the human desire for life, it also symbolizes the limitedness of that very life. Whether one has to work or not in order to have food to live, that food is only as good as the hunger that follows next inevitably. Earthly life and earthly food are not forever. Food may have

all the nutrients, but it is as perishable as the human life it nourishes and maintains. The manna the Israelites ate in the desert, special as any food could be, also spoiled and failed to provide everlasting life to the people. It was not the ultimate bread God would want for His people.

The crowd was baiting Jesus to try to equal the manna their ancestors ate, as Jesus Himself pointed out to them: “You are looking for Me not because you saw signs but because you ate and were filled.” In their unstilled hunger for food for the body, they taunted Jesus, “What can You

Bloomberg Opinion

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ow many spies are there anyway? Many Americans were surprised this month by allegations that a Russian woman, Mariia Butina, had infiltrated the National Rifle Association and was having sex with wellplaced men, in the hopes of receiving information for Russia. A recent Politico article noted that Russia and China were significantly stepping up their spying operations in Silicon Valley, to extract useful tech knowledge.

I think Americans underestimate the extent of spying in their midst.

Because we do not know the number of

operating spies, that’s a hard hypothesis to test, but there are a number of reasons to find it plausible.

Our underestimation is partly the fault of movies and television, which give us overly glamorized images of espionage.

Tom Cruise’s Ethan Hunt was described as “hyper-human” in the latest installment in the Mission: Impossible franchise, which was the top performer at the box office this past weekend. We are used to James Bond visiting the British Secret Service technology officer “Q,” and receiving an array of gadgets, such as a specially equipped Aston Martin that can create its own oil slicks. Fewer movies are made about lower-cost,

do?” They were asking for some sign, their sort of sign, so that they could believe in Him as He Himself said that it is necessary to believe in Him as the One Sent. Jesus would remain in their world of food, but food with His meaning and for the life in His sense. “My Father gives you the true bread from heaven.” The life Jesus is concerned with is a gift of God, and is nourished by what comes down from heaven.

From the One Sent

Jesus personified God’s messianic goodwill to errant and hungry humanity. It was on Jesus that the seal of God was set. John testified of Him, “I saw the Spirit come down like a dove from the sky and remain upon Him” (John 1:32). People must believe in and listen to the One Sent

by God, if they are to be involved with God’s works and be a part of His plans. Without faith in the Son of Man, they cannot partake of “the food that endures for eternal life,” the bread of eternal life Jesus offers them. Without faith in Jesus, they do not share in the mystery of eternal life.

Eternal life is symbolized by God’s bread that comes down from heaven and gives life to the world. That life

is from God and the bread for it is also God’s. People are naturally prolife, driven to live, wanting life. “Sir, give us this bread always,” the crowd begged even as they earlier sought Jesus for perishable food for their mortal body. They were clearly intrigued by the mysterious bread Jesus was speaking of. They wanted it for themselves, and they wanted it permanently available to them. How little they knew what Jesus actually would be instituting to give humanity life eternal.

Alálaong bagá, as the Prophet sent by God, Jesus would give a real sign for the people, the Eucharistic sign of His self-offering for the life of the world. Jesus Himself is the bread of eternal life. He is the One Sent by the Father, imparting the perfection of life to anyone who believes in Him. The catechesis Jesus gave the people is needed, too, today, for many do not still know Him as the bread of eternal life and, paradoxically enough, there are also many who approach Him in the Eucharist mainly for perishable goods.

Join me in meditating on the Word of God every Sunday, from 5 to 6 a.m. on DWIZ 882, or by audio streaming on www.dwiz882.com.

A Seoul initiative: Building a ‘labor-respecting society’ Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

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he Presidential kiss overshadowed the news over the bundle of South Korean foreign direct investment (FDI) pledges, official development assistance (ODA) and commitments to enhance trade relations with the Philippines that the Duterte mission brought home.

The diplomatic visit also failed to enlighten Filipinos over the character of Duterte’s host, South Korean President Moon Jae-in, and the social and labor reforms that Moon has been introducing in a country that was once wracked with endless “class conflicts.” President Moon remains an unknown quantity in the Philippines. The most that the Philippine media have shown are pictures of his brotherly embrace of North Korea’s Supreme Leader Kim Jong Un, the welcome he gave to Kim’s sister, and his wide grin after successfully hosting the winter Olympics.

The social and labor reforms of Moon are worth examining for they provide the Philippines useful lessons on how to complete the tasks of a victorious citizen mobilization to curb corruption and topple tyranny. These reforms are a product and a continuation of the “Candlelight Revolution,” which brought down President Park Geun-hye. After 20 or so weekly protest gatherings from late-2016 to early-2017, Park was impeached and found guilty of corruption involving her friend-confidante Choi Soom-sil and a heir of the Samsung chaebol. Held at night by candle-bearing Koreans, the protest movement grew and succeeded

in gathering on the streets in various cities around 16 million Koreans, easily the biggest display of citizen uprising in modern Asian history.

Edsa 1 and Edsa 2 pale in size and duration.

Now who is President Moon and what is his philosophy of governance?

Moon is a human-rights lawyer.

In the 1980s, the young lawyer often took up cases involving labor, civil and student rights issues.

He was one of the student activists who tried to defy the dictator Park Chung-hee, the father of Park Gyeun-hee. The elder Park was instrumental in the rapid industrialization of South Korea in the 1960s-1970s. However, this industrialization was achieved by curtailing the rights of the Korean working population, such as the rights to form union and engage in concerted activities, including strikes.

The long period of outright government suppression of labor rights ended in 1987 when the military dictatorship which replaced Park was toppled by the “Great Labor Offensive” of the trade unions and civilsociety groups, involving months of strikes in various industries, as well as labor-civil protest gatherings in

Spies are more common, and boring, than you think

By Tyler Cowen

Thursday, August 2, 2018 A7

mundane spies, and so Americans are misled. We think of spies as exotic, and so we imagine them as rare rather than commonplace. The recent TV show The Americans also contributes to this false impression.

Furthermore, think about the bureaucratic side of spying. We tend to focus on the cloak and dagger side of the KGB and successor institutions, but they’re also just government agencies trying to boost their budgets and achieve higher status in their home country. In other words, spy agencies play the typical bureaucratic games.

To maintain their status and privileged perch, spy agencies may try to take credit for as many activities as possible.

This emphasis of quantity over quality is a typical bureaucratic response to a political system based on imperfect information. It is hard for national leaders to judge how effective their spy agencies are, so the spy agencies want to pass along good numbers, much as a corporation might try to slant its quarterly earnings report. These incentives encourage spy agencies to maintain arms-length relationships with a large number of potentially connected individuals. They may end up working as part-time or opportunistic spies, but most of the time they hold normal jobs, albeit in sectors that are potentially sensitive.

An example would be the large number of Chinese-born individuals who

major cities. The Great Labor Offensive paved the way for the transition of South Korea from dictatorship to democracy.

Now back to the Candlelight Revolution. One very popular placard in the long protest period read: “Toward a country of equal opportunity!” This is so because social and economic inequality had become so deep. The protest movement was really aimed not only at Park Gyeun-hee but also at the dozen or so family-owned conglomerates, such as Samsung, which received state subsidy and protection from competition and yet were loathe in sharing the fruits of growth with and recognizing the basic rights of the working people. It was an uprising against cozy state-conglomerate partnership.

Thus, when Moon Jae-in was elected in May 2017 as South Korea’s new president, his first executive order was the establishment of a commission to create jobs and combat social and economic inequality.

The enemy is not North Korea. The enemy is within society.

Today, Moon’s government seeks to build a “labor-respecting society.” Under this theme, the Moon administration has introduced two programs that are familiar to those observing the labor policy debates in the Philippines—a program to convert “non-regular” workers to regular, and another to raise the minimum wage. On the issue of regularization, Moon declared that, to begin with, there should be “zero” non-regular in the public sector.

Several principles on the non-regularization process have been adopted, the most significant of which is the conversion of all permanent and continuing jobs into regular employment.

On job creation, the Moon government has created a National Jobs Commission, whose job is to

implement core tasks such as innovative human resources development, revitalization of the social economy, public sector job creation, local job creation and various pumppriming programs to enable industry, especially SMEs, to create more and better jobs.

But there are other programs: narrowing down wage gaps, promotion of work-life balance by reducing work hours to 52 per week, and instituting a system of sustained and productive social dialogue among the parties.

There are also labor-friendly initiatives coming from local governments. The boldest was the one developed by the Seoul Metropolitan Government (MSG). The MSG is implementing a “Seoul-type Living Wage System” that considers the housing prices, education costs and consumer inflation in the determination of what ought to be the living wage that an employee should receive. Thus, the hourly national minimum wage is $6.63, but the living wage for Seoul is determined to be $8.11 hourly.

How is MSG implementing the living wage? It has taken the practical route: to start the program right within the area under its control, that is, the public sector of MSG. And now it is talking to the private sector on how the living wage can be implemented industry by industry.

In the Philippines, the living wage concept is enshrined in the Philippine Constitution, and yet, this has never been raised formally by any administration, for the tripartite system is still bogged down in the debates on what is the minimum wage based on inflation trends.

Clearly, South Korea, after decades of labor suppression, is now on the high road to social and labor transformation. The question is: When will the Philippine transformation happen?

work in the tech sector, some of whom have an open invitation to report useful information back to the spymasters, in return for payments. The spy agency can curry favor by reporting that it has a network of a particular size, operating in many companies and sectors.

In the recent account of Chinese spying in Silicon Valley, it was noted that the NIMBY movement that restricts construction and the resulting high rental prices are a major problem for the spies there.

That, too, suggests that most spies and potential spies lead a rather ordinary existence; they are not lavishly funded by their home governments.

They may simply be working on “spec,”

and steal information opportunistically or perhaps never at all. That, too, is consistent with the number of spies being higher than we might think.

If we look back at American history, whenever foreign spies were caught the reaction of the public was one of surprise or shock. When Ethel and Julius Rosenberg were found to have done nuclear spying for the Soviet Union, the US was caught unprepared. When Jonathan Pollard was caught spying for Israel, that, too, came as news to many Americans.

The McCarthy era in the 1950s seems to be the exceptional period when, perhaps, a large segment of the American public was overestimating the number of spies in the country and government.

2nd Front Page BusinessMirror

A8 Thursday, August 2, 2018

Infra spending for H1 rises 41.6% to ₧352.7B–DBM

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By Rea Cu

@ReaCuBM

HE government’s infrastructure spending for the first half of the year amounted to P352.7 billion, driven by the implementation of projects under the Department of Public Works and Highways (DPWH), the Department of Budget and Management (DBM) has reported.

Such spending for infrastructure projects represented a spike of 41.6 percent in the Januaryto-June period, coming from the P249.1 billion made in the same period for 2017.

The figure is also 4.3 percent higher than the government’s program for the period of P338.3 billion.

Drivers for the uptick included the implementation of road projects by the DPWH, as well as other infrastructure projects undertaken by various government agencies, according to the DBM. Infrastructure spending for June alone amounted to P71.9 bil-

lion, expanding by 38.6 percent from the P51.9 billion recorded in the same month for 2017. Monthon-month, this posted an increase of 23.8 percent from the P58.1 billion in May 2018.

The DBM said projects that pushed infrastructure disbursements for Ju ne inc lude: t he DPWH’s construction, widening, upgrading and preventive maintenance of road networks nationwide; the repair and rehabilitation of classrooms and school facilities under the Department of Education and the state universities and colleges; acquisition of hospital and medi-

“The performance of government spending is unprecedented, because we are ahead of the program for the first time in history. This is a result of the reforms we have implemented in planning and budgeting.”—Diokno

cal equipment of the Department of Health; as well as rail transport projects and purchase of airport security equipment of the Department of Transportation.

The government’s disbursements for the first half of 2018 reached P1.604 trillion, 20.5 percent higher than last year’s P1.330 trillion, also higher by 2.2 percent than the programmed P1.569 trillion set by the government for the period.

“The performance of government spending is unprecedented, because we are ahead of the program for the first time in history.

This is a result of the reforms we have implemented in planning and budgeting,” said Budget Secretary Benjamin E. Diokno.

Total disbursements for June alone reached P278.5 billion, ex-

panding by 2.9 percent from the P270.7 billion made in June 2017.

Month-on-month, disbursements experienced a contraction by 4.6 percent, with May 2018 disbursements at P291.9 billion.

According to the DBM, although disbursements exceeded the program for the first half of the year, revenues collected by the country’s main revenue collection agencies continue to be robust, giving the government enough fiscal space to stay within its target deficit ceiling.

As of end-June 2018, revenues col lected by the gover nment reached P1.411 trillion, expanding 8.1 percent compared to the programmed P1.305 trillion for the period. This also posted a growth of 20 percent year-on-year, with revenues collected for the first semester of 2017 amounting to P1.17 trillion. The deficit for the period amounted to P193 billion, 27 percent higher than the programmed P264.3 billion.

“With the better-than-programmed figures on revenues, spending, and the fiscal deficit, we will continue to spend wisely and promptly to service the huge needs of our people, especially the in public infrastructure and social services,” he added.

Moody’s: PHL risks and opportunities balance each other

By Bianca Cuaresma @BcuaresmaBM

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HE Philippine economy is expected to stay the course this year, as certain risks are balanced by opportunities of

growth for 2018, an international credit watcher said.

In a statement on Wednesday, Moody’s Investors Service said it is optimistic of Philippine prospects for 2018, as the country’s credit profile remains supported by strong

growth and progress on reform.

Earlier this month, the credit watcher affirmed the country’s long-term local currency and foreign currency issuer and senior unsecured debt ratings at “Baa2” and maintained the outlook at stable.

The stable outlook indicates an expectation of an unchanged rating in the next 12 to 18 months.

“Moody’s Investors Service says that the credit profile of the Government of the Philippines [‘Baa2’ stable] is supported by a large and fast-growing economy and continued gains in debt affordability, in part because of revenue reforms,” Moody’s said.

“These positive features are balanced against low per capita incomes and low revenue-raising capacity when compared with other Baa-rated countries,” it added.

The credit watcher further said on Wednesday that it expects the Philippines’s robust economic growth to be sustained over the next few years, as the government’s focus on infrastructure development reinforces the decadelong trend of increasing potential growth.

In its earlier credit action, Moody’s also flagged the rising prices of goods in the country as one of the major risks to the Philippine economy in the near-term.

“The Philippines is buffeted by a number of headwinds that contribute to inflationary pressures.

Based in part on the strong track record of the BSP in maintaining monetary and financial stability, Moody’s expects the rise in inflation since the beginning of 2018 to be transitory,” Moody’s earlier said.

However, significant capacity constraints related to the Philippines’s topography, possibly persistent pressure on the currency and capital inflows, and a currentaccount balance in slight deficit, pose material challenges to policymakers in ensuring that inflation expectations and inflation pressure are contained,” it added.

This prompted the BSP to make stronger monetary-policy hints, with BSP chief Nestor Espenilla Jr. saying they are prepared to pull the trigger on interest rate hikes for the third consecutive time this August.

The Monetary Board is expected to meet on August 9 for their fifth monetary-policy meeting of the year.

www.businessmirror.com.ph

ERC rushing Psalm papers to recover stranded debts, stranded contract costs

By Lenie Lectura @llectura

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HE Energy Regulatory Commission (ERC) said on Wednesday it will fast-track the pending applications of the Power Sector Assets and Liabilities Management Corp.

(PSALM) for the recovery of stranded debts (SDs) and stranded contract costs (SCCs).

ERC Chairman Agnes Devanadera said some of the applications of PSALM to recover SDs and SCCs have yet to completely undergo legal proceedings or hearings, while other petitions that have been processed and up for decision need the commission en banc’s go-ahead to resolve the same.

“With regard to the subject applications of PSALM, the ERC has already issued five decisions [in 2013 and 2017], another one is for the issuance of a decision, while four other cases are still undergoing hearings. I understand the dilemma that PSALM is currently into, but my hands are tied given the nonquorum stature of the ERC,” Devanadera explained.

ERC commissioners were suspended twice by the Office of the Ombudsman. This, she said, provided her with limited authority and restricted her actions to administrative matters. The ERC is still without quorum up to this moment.

According to Devanadera, the

commission will submit its recommendation to fast-track the pending applications of PSALM to the Senate Committee on Energy with the following proposed time frames, provided there is already a quorum: For cases submitted for resolution, a month will be allocated to complete the evaluation and another one month for deliberation and promulgation.

For cases still undergoing hearings, the ERC will prescribe one month to complete the evaluation, upon termination of the hearings, and another month for deliberation and promulgation.

“While waiting to have a quorum in the vommission, I have directed the staff involved to have all the details and documents needed ready to facilitate the resolution of the subject PSALM applications as soon as a quorum is achieved,” she said.

This, after Senate Committee on Energy Chairman Sen. Sherwin T. Gatchalian called the ERC’s attention to the delays in the approval of SCC and SD rate applications.

SDs are “any unpaid financial obligations of the NPC [National Power Corp.] which have not been liquidated by the proceeds from the sales and privatization of NPC assets.”

Meanwhile, SCCs are“excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy.”

Continued on A2

Toyota Motor Philippines marks 30 years

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OYOTA Motor Philippines (TMP) celebrated its 30th anniversary in the country as a manifestation of the company’s three decades of sustained success. Achieved through strong partnerships and linkages, TMP also took the opportunity to acknowledge its stakeholders for the unwavering support.

President Duterte graced the event at the Grand Hyatt Manila at the BGC to acknowledge the company’s significant contribution to the country’s economy. Other distinguished guests were Toyota Motor Corp. (TMC) President Akio Toyoda along with TMP Vice Chairman Alfred Ty and TMP President Satoru Suzuki.

Toyoda expressed his deep appreciation to TMP and the entire dealership network for achieving the No. 1 position for 19 consecutive years.

“Over the years, I have seen the great efforts of everyone to keep Toyota growing in spite of many difficulties. In fact, during the Great Asian

Financial Crisis of 1997, the car market in the Philippines dropped by half. It was during this period that I was assigned to be the Chief Regional Officer for this region. Those were really difficult times, but, I fondly recall how, together with Dr. George SK Ty and Mr. Alfred Ty, Toyota’s future would be built by the Philippines’s motorization.”

Since 1989 TMP has sold over 1.5 million units in the country. This year the leading automaker targets to sell a total of 180,000 units. In a special ceremony, 30 vehicles, to symbolize three decades, were donated to the government. This signifies the government and TMP’s collaboration in revitalizing the country’s automotive manufacting.

Of the 30 locally manufactured units turned over, 20 were the all-new Vios and 10 were Innova.

TMP said it is also committed and will continue in serving the extra mile to deliver “Always Better Cars, Always Better Lives” to its stakeholders.

Randy S. Peregrino

PHL factories outperform Asean peers despite dip in output Continued from A1

noticeably” in July, accompanied by a milder accumulation in input stocks.

Firms were also seen to be reluctant to add new workers and purchasing activity was at a slower rate.

IHS Markit principal economist Bernard Aw said the slowdown raises concerns on the overall health of the manufacturing industry. “New business grew at a much slower rate in July after a solid second quarter, despite a strong pickup in export sales.

“Slowing demand presents a worrying development and raises questions whether the recovery from the rollout of new excise taxes at the start of this year is losing steam,” Aw said.

“Input cost inflation remained marked in the manufacturing sector during July which, in turn, led to further increases in selling prices. Although charges were raised at a notable pace, the rate of increase remained far weaker than that of costs, suggesting pressure

on profit margins,” he added.

Second best performer Despite the slowdown and concerns over the decline in demand, the Philippine manufacturing sector was the second best performer in the region.

The Asean PMI slipped to a fourmonth low print in July to average at 50.4, from 51 recorded in June.

Vietnam led the pack with a 54.9 PMI, followed by the Philippines’s 50.9. Indonesia came in next with 50.5, Singapore with 50.2 and Thailand with 50.1.

The manufacturing sector of Malaysia and Myanmar was in contraction mode during the period, with their PMI at 49.7 and 47.9, respectively.

“The latest Nikkei PMI survey signaled a loss of growth momentum in Asean’s manufacturing sector in July.

Moreover, confidence about longerterm output deteriorated further, painting a worrying development across the region as we move into the second half of this year,” Aw said.