PHL TO BUY 200,000 MT OF IMPORTED SUGAR By Jasper Emmanuel Y. Arcalas @jearcalas
T
he government has allowed traders to import 200,000 metric tons (MT) of sugar to stabilize the supply and price of the sweetener in the domestic market. The Sugar Regulatory Administration (SRA) issued on Monday Sugar Order 10 (SO-10), which authorized the importation of sugar for crop year (CY) 2017-2018. Of the volume approved by the SRA, 100,000 MT was allocated for bottlers’ grade refined sugar; 50,000 MT, standard grade refined sugar; and 50,000 MT, raw sugar for domestic consumption. “The stakeholders of the sugar industry,
Consumers check out prices at the area for sugar products at a local supermarket in this file photo. NONIE REYES
media partner of the year
United nations
2015 environmental Media Award leadership award 2008
such as planters, planters’ associations/federations and sugar millers and refiners, have written the SRA to express their concerns on increasing prices and demanding the SRA to act decisively with dispatch to contain it, even calling for the importation of sugar in view of the urgency of the supply situation,” the SRA said in SO-10. “The SRA had consultative meetings with the Department of Agriculture, as well as the Department of Trade and Industry, on the current situation in the production for raw and refined sugar and the high prices thereof. The concerned departments agreed that the SRA should adopt additional and responsive measures to ensure domestic supply and stabilize sugar prices,” it added. The SRA said it “made consultation with
majority of the stakeholders of the sugar industry, and the latter submitted their written recommendations, in the adoption of the rules on sugar importation.” Agriculture Secretary Emmanuel F. Piñol said imported sugar “is expected to arrive at the soonest possible time” to arrest the increase in the price of the sweetener. “The sugar is expected to arrive at the soonest possible time because I have instructed them that I don’t want to see abnormally high sugar prices,” Piñol told reporters in an interview on June 11. Industry sources told the BusinessMirror that traders would most likely import from Thailand, the country’s nearest Southeast Asian neighbor. See “Sugar,” A2
BusinessMirror A broader look at today’s business
www.businessmirror.com.ph
n
Tuesday, June 12, 2018 Vol. 13 No. 241
Upbeat on long term: FDI rise 43.5% in Q1 F
By Bianca Cuaresma
@BcuaresmaBM
OREIGN investors continued to show optimism in the Philippine economy’s long-term potential, as foreign direct investments (FDI) rose double-digit in the first quarter of this year.
The Bangko Sentral ng Pilipinas (BSP) on Monday reported a 43.5-percent rise in the aggregate FDI for the first three months of the year, owing largely
to what the Central Bank dubbed as “ investors’ continued positive outlook on the Philippine economy on the back of sound macroeconomic fundamentals
$2.2B
Mindanao’s time has come Manny B. Villar
THE ENTREPRENEUR
M
and robust growth prospects.” The growth in FDI in the first quarter of 2018 resulted in a net inflow of $2.2 billion, higher than the $1.5 billion seen in the same period last year.
indanao will soon play a pivotal role in the current Philippine economic boom. I have seen the construction of several infrastructure projects in Mindanao that will certainly boost further the island’s economy in the near future. The election of President Duterte as the first president from Mindanao has helped in the progress that we are now witnessing in the island. Christians and Muslims and the several native ethnic groups in Mindanao are now more confident of their future, unlike before, when the feeling of helplessness was widespread. This time around, the people of Mindanao feel they are relevant to nationbuilding and represented in the government after being long ignored by past administrations.
See “FDI,” A2
Continued on A6
The net FDI inflow in the first quarter of 2018, higher than the $1.5 billion in the same period last year
ADB giving $7.9B worth of loans in next 4 years
“There is nothing to be alarmed of because compared to April last year, [our April performance this year] is still 5 percent higher. Most important, [our] year-to-date at $11.75 billion [is] still 3.3 percent higher than last year.” —Lachica
@alyasjah
S
EMICONDUCTOR exporters are confident they can hit their target growth of 6 percent this year in spite of the global uncertainty on the future of trade largely due to Washington’s protectionist measures. The Semiconductor and Electronics Industries in the Philippines Foundation Inc. is standing behind its growth projection of 6 percent for the year. Seipi President Danilo C. Lachica said he is optimistic the country’s top exporting sector can withstand the escalation of a trade war between large economies. Seipi is looking to grow the electronics industry by 6 percent this year, following an all-time high exports receipt of $32.7 billion last year. It was also an 11-percent increase from the $29.4 billion recorded in 2016, and contributed 52 percent of the country’s total merchandise exports at $62.87 billion in the previous year. “There is nothing to be alarmed of because compared to April last year, [our April performance this year] is still 5 percent higher. Most important, [our] year-todate at $11.75 billion [is] still 3.3 percent higher than last year,” Lachica said. “We are maintaining our 5 percent to 6 percent growth projection, and that should bring us to about $34.5 billion to $36 billion, notwithstanding all the infractions you hear whether it is [the] China-United States trade war or [the] TRAIN [Tax Reform for Acceleration and Inclusion]. These are challenges, but I think the fact that we are operating in a technology-driven global market, they all use electronic components,” he added. Lachica admitted it is becoming difficult to expand the industry at a time the future of global trade is uncertain, but nonetheless stressed that the sector is in a “very comfortable” position to grow this year. Achieving their target for the year will be crucial for electronics exporters, as they are looking to reach $50 billion
in export receipts by 2030. Apart from this, they are also banked on to lead the exports sector in the government’s objective to hit $122 billion in export receipts—the lower end of a target that goes as high as $131 billion—by 2022. In February the Seipi chief said exporters opted to weather their expectations given the ever-changing nature of global demand. He added it is better they level down their projection and not get too excited after their one-for-thebooks performance. Last year Hong Kong retained its position as the country’s top importer of electronics with a share of 21.56 percent, higher than the 19.47 percent in 2016. On the other hand, the US took over China as the second-largest recipient of Philippine-made electronic products at 12.66 percent and 12.61 percent, respectively. Rounding up the top importers of electronics are Singapore and Japan at 9.97 percent and 8.94 percent, respectively. Germany, Taiwan, the Netherlands, Thailand and South Korea were also among the highest importers of electronic goods from the Philippines. The electronics industry saw its growth projection this year threatened with the US’s decision to impose stiffer tariffs on steel and aluminum. In a March interview with the BusinessM irror, Lachica said “there could be impact” on their sector, as China—the previous target of US duties—“is one of the big export destinations and import origins” of electronic products. However, until the impact is felt, he argued there is no need yet to recalibrate their growth target for the year.
PESO exchange rates n US 52.6500
business news source of the year
P25.00 nationwide | 4 sections 20 pages | 7 days a week
SEMICONDUCTOR EXPORTERS BULLISH ON GROWTH GOALS By Elijah Felice E. Rosales
2016 ejap journalism awards
By Cai U. Ordinario
T WHERE IT BEGAN A man in Kawit, Cavite, walks past the Aguinaldo Shrine, where the Philippine Declaration of Independence from Spain was declared on June 12, 1898. To commemorate the event, now known as Araw ng Kalayaan or Independence Day, a national holiday, the Philippine flag is raised here by top government officials on June 12 each year. The house is now a museum. NONIE REYES
Not yet time to reduce VAT rate, says DBM
T
HE government’s top budget manager wants a broader tax base before tweaking the value-added tax (VAT) to 10 percent from its current 12 percent. In a forum on Monday, Budget Secretary Benjamin E. Diokno said he sees no need to bring down the country’s VAT rate at the moment as the government banks on its fivemonth-old tax-reform program. “But the solution for our VAT rate, before thinking of whether
it should be lowered, is that we should broaden our base, our VAT base, because the bigger the base the better,” Diokno said. “I think we should see how things develop first. Let’s finish all the five tax-reform packages. I think it’s not time to go back to 10 [percent]; that’s only for extreme cases.” The chief of the Department of Budget and Management (DBM) explained the government believes the VAT system remains an effective system than collecting
personal income tax. “VAT is imposed in more than 90 percent of the countries in the world. It is a better tax system than the personal income tax system,” Diokno said. “So we believe that the VAT system is good because it’s a tax on consumption.” He added that China implements a VAT rate as high as 17 percent, higher than the Philippines’s, which enables the Communist-led state to have a sound fiscal standing. See “VAT,” A2
@cuo_bm
HE Asian Development Bank (ADB) is extending $7.92 billion worth of loans to the Philippines in the next four years, according to the National Economic and Development Authority (Neda). In a statement, the Neda said the loans will benefit the government’s “Build, Build, Build” program since many of the projects to be financed will be on infrastructure. “The focus on project investments for infrastructure over the next years is welcome. This makes us more optimistic that the “Build, Build, Build” program will be rolled out without delay,” Neda Undersecretary for Investment Programming Rolando G. Tungpalan said. In a recent meeting at the Neda headquarters, the ADB said its lending pipeline will amount to $945 million for 2018; $2.47 billion for 2019; $2.40 billion for 2020; and $2.10 billion in 2021. For 2018, the Neda said the lending pipeline covers two policybased loans (PBLs) worth $600 million, one results-based loan worth $300 million and two other projects worth $45 million. For 2019, data showed there are See “ADB,” A2
n japan 0.4817 n UK 70.6405 n HK 6.7108 n CHINA 8.2150 n singapore 39.4234 n australia 39.9561 n EU 62.0006 n SAUDI arabia 14.0396 Source: BSP (11 June 2018 )
News
BusinessMirror
A2 Tuesday, June 12, 2018
Roilo Golez: Ex-NSA and solon, trusted voice on WPS, dies
F
By Jovee Marie N. dela Cruz @joveemarie & Rene Acosta @reneacostaBM
ORMER National Security Adviser, Navy officer and veteran lawmaker Rogelio “Roilo” Golez succumbed to heart attack on Monday, stunning those who deemed him one of the authoritative voices in the continuing search for a sound policy in the Philippines’s maritime disputes and the need to modernize the Armed Forces. Reports said he was preparing for an interview when he felt unwell. Incumbent Parañaque Rep. Gus Tambunting, who called Golez his godfather, said in a radio interview he had not known of Golez falling ill, but only noticed he had lost weight. Golez’s son, Parañaque City Vice Mayor Rico Golez, said his father died past 11 a.m. on Monday due
Sugar. . .
Continued from A1
They said sugar imports from Thailand are levied a tariff of only 5 percent and would take only seven days to arrive in the Philippines. Thailand is regarded as the largest producer of sugar in Southeast Asia. Piñol said the country’s total sugar production in the current crop year ending August 31 may fall below the SR A’s estimated output of 2.27 MMT by as much as 200,000 MT. This means that total sugar production may settle at around 2.07 MMT, 17.2 percent lower than the 2.5 MMT produced in the previous crop year. Under SO 10, the SRA required traders to buy the certificates of reclassification rights (CORR) of planters and millers who produced “D” sugar, or those for export to the world market, to participate in the importation program. The CORR contains the corresponding importation volume allocation of a specific planter or miller as computed by the formula provided in SO 10. The price of each CORR would depend on the negotiations between the trader and holder of the CORR. This system, the SRA noted, would allow them “to effectively regulate the importation.” “ The program shall require a certificate of reclassification rights in order to effectively regulate the importation; prov ide d t h at a ny i mp or t at ion must be reasonably profitable to sugar producers, who have been
ADB. . .
Continued from A1
to a heart attack. He was 71. The 71-year-old Golez served as the congressmen of the Second District of Parañaque from 1992 to 2001. He was the national security adviser from 2001 to 2004 or during the term of former President Gloria Macapagal-Arroyo. Golez held a masters in business administration at UP Diliman. A graduate of the US Naval experiencing low prices of sugar for the last two crop years as a result of importation of cheap subsidized high-fructose corn syrup,” the SR A said. Piñol said sugarcane farmers would benefit from this system as they would earn royalty from selling their CORR. The importation program shall be “open and voluntary to natural or juridical persons that are SRAregistered International Sugar Traders, in good standing, for crop year 2017-2018,” according to the SRA. “Reclassfication certificates can be assigned, transferred or consolidated by eligible importers/ international sugar traders or by sugarcane planters or millers,” the agency said. Eligible sugar traders would be given until July 6 for the validation of their reclassification certificates. The SRA will also start accepting application for clearance to release the imported sugar starting June 18 until August 31. “Imported ‘C ’ sugar not appl ied for rec l a ssi f ic at ion to ‘B’ sugar after August 31 shall c au s e t he for f e it u re o f t he Inter nat iona l Suga r Trader’s entire bond and the unreclassified sugar may remain as C sugar indefinitely, as may be determined by the Sugar Board, without prejudice to additional penalties the SR A Board may impose,” it said.
Industrial users’ appeal
Confectionery producers belonging to the Philippine Confectionery Biscuits and Snacks Association (PCBSA) are pressing two PBLs worth $600 million and eight projects worth $1.87 billion and in 2020, there will be two PBLs
Academy in Annapolis, Maryland, the former Philippine Navy officer was one of the most articulate critics of China’s expansion in, and the Philippines government’s “soft” policy in West Philippine Sea. Majority Leader Rodolfo Fariñas Sr. of Ilocos Norte said, “It is with sadness that I post here that [Minority Leader] Danny Suarez just called me with the information that our former colleague, Roilo “Roy” Golez, passed away due to heart attack. May his soul Rest in Peace!”
Military condoles
The military condoled on Monday with the family and other relatives of Golez. “The Armed Forces of the Philippines sincerely condoles with the family and friends of former Congressman and National Security Adviser Roilo Golez for his untimely demise,” the military said in a statement through its spokesman, Col. Edgard Arevalo. “He was a sailor, a patriot and a public servant whose contributions to the Filipino nation and its people
extended throughout his lifetime,” the statement added. “He will be remembered for his keen insights founded on his knowledge of military history and strategy, national security and geopolitics,” said the military statement.
Kiko: He was truly ‘Di ka pasisiil’
Partido Liberal President and Sen. Francis “Kiko” Pangilinan said in a statement: “Sadness and shock overwhelm us with the news of the death of former Representative and National Security Adviser Roilo Golez. “He was a picture of vibrant life and untiring public service until his very last days. He was out of politics, but he continued to touch base not only with his former constituents, but Filipinos all over the country with his journeys to different places. “Rep. Golez is a true freedom fighter, being one of the few solid voices defending the country’s territorial rights.” Pangilinan said Golez’s socialmedia account motto, Di ka pasisiil, truly fits him.
the SRA to temporarily allow local manufacturers to import sugar sans the CORR. PCBSA President Kissinger S. Sy said candy and biscuit makers should not be required to secure the certificate, as this will make the process “complicated and costly” for them. “ T he PCBSA welcomes the reported action of the SR A to allow manufacturers or producers to directly import sugar. In connection with the authority to be given by [the] SR A for confectionery producers to import, [the] SR A should not require them to obtain the so-called certificates of conversion,” Sy said in a text message to reporters. The PCBSA has been pressing the government to allow candy and biscuits producers to import sugar, after reporting that domestic price of the commodity is now at P2,790 per 50 -kilogram (Lkg ) bag. This is twice the landed price of imported sugar at P1,300 per Lkg, according to the group. With the SRA’s decision to allow importation, Sy told the BusinessMirror fears of massive layoffs in the confectionery industry can now subside. “I don’t think we need to remove workers anymore because with the arrival of sugar imports, our production will stabilize,” he said. The PCBSA last week told authorities to permit them to import sugar, as doing otherwise will lead to a loss of P8.5 billion in revenue and a layoff of at least 20,000 workers. Former PCBSA President Reynaldo Y. Go said the industry was
expected to lose big in terms of production output, sales and employment if the government would not allow them to import the commodity. Local confectionery producers contributed around P21 billion in the sector’s total P30-billion sales last year, while the other P9 billion came from impor ted candies and biscuits. However, the domestic price of sugar became so prohibitive it became difficult for manufacturers to keep up, Go said. “We are projecting to lose around P8.5 billion in sales if we are not allowed to import.” As for the PCBSA, Sy said there is no need for farmers to worry about candy and biscuit makers abusing the go signal to import. “ This will be an interim solution and stop-gap measure to address the scarce supply of sugar, especially since the milling season will commence only in October.” “But to allay the fears of millers and planters, the authority to import should be given only to manufacturers who produce food or confectionery items that contain sugar as its main ingredient. A lso, PCBSA members commit not to use the sugar to meet their manufacturing requirements and not to resell the same,” he said. The call to import the sweetener was backed by Trade Secretary Ramon M. Lopez, who, according to Sy, had a dialogue with candy and biscuit makers on Friday about the need to purchase sugar abroad.
worth $600 million and six projects worth $1.8 billion. In 2021 the Neda said there will be two PBLs worth $600 million and seven projects worth $1.5 billion. “Our robust pipeline of projects and programs for the next three years from 2019 to 2021 reflects our seriousness to Philippine development,” said Kelly Bird, country director of ADB in the Philippines. The Neda said the ADB has been providing the Philippines PBLs in the form of budget support for structural reforms and development expenditure programs. Tu ng pa l a n added t h at i nvestment loans provide greater clarity in terms of results, costs and benefits, and time frame of projects. A DB -Ph i l ippines Pr inc ipa l Country Specialist Joven Z. Balbosa said the main features of
the ADB’s proposed operational support are responsive to needed infrastructure investments in the government’s “Build, Build, Build” program. “As we progress from 2019 to 2021, we see that the projects are increasing in terms of numbers and amount,” Balbosa explained. Tungpalan said program loans will be guided by the Philippine government’s overall fiscal programming. For project loans, the Neda Board ’s Investment Coordination Committee vets the viability of proposed projects, while the Department of Finance (DOF) assesses how these will be financed. A memora ndu m of u nderstanding on the ADB’s pipeline of projects is expected to be signed this month by the ADB and the Philippine government through the Neda and the DOF.
With Elijah Felice E. Rosales
www.businessmirror.com.ph
BTr gets mixed results in T-bills auction, tempers rise in rates
By Rea Cu
@ReaCuBM
T
HE Bureau of the Treasury (BTr) received mixed results in its latest offering of Treasury bills (T-bills) on Monday, awarding P12 billion from the P15 billion on offer, with the auction committee tempering the rate increase for the one-year tenor. National Treasurer Rosalia V. de Leon said the auction committee decided to partially award the 363-day tenor with P3.369 billion, from the P6 billion on offer, seeing that rates for the IOU were tending to reach the higher level as compared to internal estimates. “We are trying to temper also the increase in terms of the one year because if you would look [at the situation], the inflation print in May was just 4.6 percent vis-a-vis the expectation of the consensus of 4.9 percent, based also [on] what BSP [Bangko Sentral ng Pilipinas] officials have said that maybe inflation is already tapering off and it might have already reached the peak. So there is basically no need for us, for investors, to ask for higher rates, so we cut it at that level. We are just tempering the increase in the rates right now,” de Leon said. The 91-day IOU was awarded P5 billion, with tenders reaching P8.920 billion; the average annual rate for the security settled at 3.323 percent, which saw a 2.70 basis point increase compared to the previous auction’s 3.296 percent. Bids for the 182-day tenor reached P7.231 billion with the auction committee fully awarding the P4 billion on offer. Its annual average rate settled at 3.714 percent, 3.70 basis points higher than the previous auction rate of 3.677 percent. The 363-day tenor was partially
FDI. . .
Continued from A1
FDI is the type of investment that is often more coveted, as it stays longer in the economy and creates job opportunities for locals. It is also not easily pulled out of the market unlike its shorterterm counter part, the foreign portfolio investments. From the start of the year, optimism has been high for the country’s FDI, as experts earlier said global players are likely to put their money in one of the fastest-growing economies in the region. Just recently, the International Monetary Fund (IMF) expressed its optimism on the country’s ability to raise its FDI over the near to medium term, citing strong domestic reform momentum in the areas of taxation and capital market development. ING Bank Manila Senior Economist Joey Cuyegkeng also earlier said chances remain high that the Philippines will reach the government’s year-end projection as foreign direct investors are “eager to participate in one of the fastestgrowing economies in Asia.” For 2018 the BSP projected $8.2 billion in FDI net inflows. This means that the country must at least be able to attract about $2 billion in FDI per quarter in the next nine months of the year.
Caution on 2nd package
Standard & Poor ’s Globa l
VAT. . .
Continued from A1
“Let’s put it this way, people can evade income tax while people cannot evade the VAT,” Diokno said. “You start with broadening the base first, everything as a rule, because if you have a broad base you can afford to have a lower tax rate.” A form of sales tax, the VAT is a tax on the sale or exchange of goods and services in the Philippines and on the importation of goods into the country. In February this year Finance Sec-
awarded P3.369 billion, from the P6 billion on offer, with bids reaching P7.839 billion. The average annual rate for the security settled at 4.324 percent, higher by 7.80 basis points from the previous rate of 4.246 percent. Meanwhile, de Leon said that the sale of its retail Treasury bonds (RTBs) had a very good reception from the investing public during its offer period, with the Treasury set to issue P121.8 billion worth of three-year RTBs. Following the offer period from May 30 to June 8, the first offering of RTBs for 2018 was met with strong demand from the investing public with the total issue size more than four times higher from the initial planned issuance of P30 billion. “We have a very good reception, so the total amount that we were able to issue was about P121.765 billion, so that’s within our expectation given the rates for the three years that we offered. Of course, even at the onset, we were already saying that we’re not really aiming for the big bang of the very high subscription that we offered last year,” she added. The BTr awarded P66 billion during its rate-setting auction on May 30 and an additional P55.8 billion was raised during the public offer period from May 30 to June 8. The BTr conducted road shows in key cities nationwide to inform interested investors on the terms and benefits of the investment product. The lead issue manager for the 21st RTB offering is the Land Bank of the Philippines, with BDO Capital and Investment Corp., BPI Capital Corp., Development Bank of the Philippines, Metropolitan Bank and Trust Co., and SB Capital Investment Corp. as joint issue managers.
Ratings (S&P), meanwhile, warned in its most recent web cast that the uncertainty around the second tax-reform package could bring down the country’s FDI down in the near term, as investors adapt a wait-and-see stance as to what form the tax agenda package two is going to take. The experts, however, said the tax reform is a “painful” but needed step to boost the country’s productive capacity for the economy to be able to sustain the kind of growth rate it currently has. In March alone, FDI recorded a 27-percent rise to hit $682 million, from the $537 million seen in the same month last year. This was driven by a significant increase in the investors’ net equity capital placements during the month from $51 million in 2017 to $351 million in March this year. According to the BSP, these equity capital infusions came mostly from investors in Singapore, Hong Kong, Japan, the United States and Sweden. Meanwhile, reinvestment of earnings also increased by 12.6 percent to $63 million in March 2018, from the $56 million in March 2017. The increases in these two subsections were more than enough to offset the decline in the foreign players’ investments in debt instruments, as seen in the so called intracompany borrowings. This subsection declined by 36.1 percent to hit $301 million during the month. retary Carlos G. Dominguez III said the government is open to slashing the VAT rate of 12 percent but only if all exemptions are removed. He added that the government needs to collect more funds to fund its massive infrastructure program known as the “Build, Build, Build” program. Dominguez’s proposal echoes a bill filed by Sen. Risa Hontiveros in January and which proposes to slash the VAT rate to 10 percent. The current VAT rate began in 12 years ago, when the government of President Gloria MacapagalArroyo ordered its increase to 12 percent. Rea Cu
A BusinessMirror Special Feature
120TH YEAR OF INDEPENDENCE A Celebration of the Philippines’ Economic History A3
Tuesday, June 12, 2018 | www.businessmirror.com.ph
T
By Marane A. Plaza
HIS 2018, we are celebrating our 120th year of independence since Filipino revolutionary forces under President Emilio Aguinaldo proclaimed sovereignty of the Philippines from Spanish colonial rule on June 12, 1898. However, this proclamation was not recognized by Spain, nor by the USA. Our islands were ceded to the United States by Spain through the Treaty of Paris in 1898. When our nation became under the leadership of the United States, Americans promised to give independence to the Philippines “when they show sufficient capacity to govern themselves”. On January 20, 1899, President McKinley expressed to the first Philippine Commission that they were bearers of the “blessings of a liberating rather than conquering a nation”. He said, “The Philippines are ours, not to exploit, but to develop, to civilize, to educate, to train in the science of self-government.” After decades of “self-government training”, the US granted our independence on July 4, 1946 through the Treaty of Manila, following the end of World War II. July 4 was observed as independence Day until August 4, 1964, when President Diosdado Macapagal signed Republic Act No. 4166, dictating that June 12 as the Independence Day, as opposed to previously celebrated as “Flag Day.” Since we had proclaimed our independence in 1898, and received our seal of approval to govern ourselves in 1946, it is safe to say that the Philippines is still pretty young as a nation. However, if independence has been defined by America as our capability to govern ourselves, then the Philippines had certainly been doing great in 9000s-1565. The country was then composed of different kingdoms and thalassocracies, leading the economy of the islands by overseeing trades with Chinese, Indians, Arabs and Japanese merchants. Let us take a look at the economic status of the Philippines at times when it self-governed itsself.
Pre-Colonial Times
DURING 9000s to early 1500s, international merchants traded for our goods such as gold, rice, pots and other products through the barter system. During the 12th century, the northern Philippines was known for its huge industry centered around the manufacture and trade of “Ruson-tsukuri”, a burnay clay pot used for storage of tea considered among the best storage vessels for preserving tea leaves and rice wine. It had been sought-after in Northeast Asia. Each Philippine kiln had its own branding symbol, marked on the bottom of the Ruson-tsukuri by a single baybayin letter. Filipino natives were also popular as great agriculturists, as Luzon had great abundance of rice, fowls, wine, cotton and colored clothes, wax, honey and date palms, as well as great numbers of carabaos, deer, wild boar and goats. The Wangdom of Pangasinan exported deer-skins to Japan and Okinawa, while the Nation of Ma-i produced beeswax, cotton, true pearls, tortoise shell, medicinal betel nuts and yuta cloth in their trade with East Asia. By the early sixteenth century, Pasig River delta, Maynila and Tondo established a shared monopoly on the
trade of Chinese goods throughout the rest of the Philippine archipelago. The Visayas islands on the other hand, which was home to the Kedatuan of Madja-as, the Kedatuan of Dapitan and the Rajahnate of Cebu, were abundant in rice, fish, cotton, swine, fowls, wax and honey. In Mindanao, the Rajahnate of Butuan specialized in the mining of gold and the manufacture of jewelry. The Sultanate of Maguindanao was known for the raising and harvesting of cinnamon. The Sultanate of Lanao had a fishing industry by lake Lanao and the Sultanate of Sulu had lively pearl-diving operations. The Filipino natives already had a great economy and were considered one of the economic centers in Asia even before teh nSpanish colonized the islands. However, when they unified the islands and introduced Manila Galleon Trade, the economy of the Philippines had skyrocketed.
First Philippine Republic after Spanish Regime (1898- 1901)
DURING the era of the First Republic, the estimated GDP per capita for the Philippines in 1900 was of $1,033.00. That made it the second richest place in all of Asia, just a little behind Japan ($1,135.00), and far ahead of China ($652.00) or India ($625.00).
Commonwealth Era (1935-1945)
THE Philippines was granted the commonwealth status by the USA for ten years. From 1935-1945, the Philippines enjoyed good economy from abaca (a species of banana Janssen), coconuts and coconut oil, sugar, and timber. Numerous other crops and livestock were grown for local consumption by the Filipino people. Manila became one of the most visited cities in Asia alongside Hong Kong. Manila was considered to be the most beautiful city in Asia. This sentiment drew tourists from around the world, helping to boost the Philippine economy. Tourism, industry, and agriculture were among the largest contributors to the economy.
Third Republic of the Philippines
AFTER World War II, the country was left with a devastated city, food crisis and financial crisis. Americans announced our freedom in 1946, and the then-newly elected President Manuel Roxas reorganized the government, and proposed a wide-sweeping legislative program. In an effort to solve the massive socio-economic problems of the period, the Third Republic’s initial year were spent establishing the Rehabilitation Finance Corporation (which would be reorganized in 1958 as the Development Bank of the Philippines), the creation of the Department of Foreign Affairs and the organization of the foreign service through Executive Order No. 18; the GI Bill of Rights for Filipino veterans, and the revision of taxation
laws to increase government revenues. President Roxas also moved to strengthen sovereignty by proposing a Central Bank for the Philippines to administer the Philippine banking system, which was established by Republic Act No. 265.
Marcos- Noynoy Aquino Era (1965-2016)
ACCORDING to the FIES (Family Income and Expenditure Survey) conducted from 1965 to 1985 (Marcos Era), poverty incidence in the Philippines rose from 41 percent in 1965 to 58.9 percent in 1985. This can be attributed to lower real agricultural wages and lesser real wages for unskilled and skilled laborers. Cory Aquino’s leadership in 1986–1992 were directed in reforming the image of the country and paying off debts, as the nation had gone through socio-political disasters during the People Power Revolution where finance and commoditi collapsed. Marcos Era’s debt-driven development began crippling the country, which slowly made the Philippines the “Latin-American in East Asia” as it started to experience the worst recession since the post-war era. By 1991, the political situation stabilized a
bit. With this, the peso became more competitive, confidence of investors was gradually regained, positive movements in terms of trade were realized, and regional growth gradually strengthened. The Ramos administration from 1992-1998 basically became the carrier of the momentum of reform. This administration was a proponent of capital account liberalization, which made the country more open to international relations, foreign trade, investments. Bangko Sentral ng Pilipinas was established which was involved in the reduction of debts. The Philippines also joined the World Trade Organization and other free trade associations such as the APEC. The Arroyo administration from 2001- 2010 economically speaking, was a period of good growth rates simultaneous with the USA, due perhaps to the emergence of the Overseas Filipino workers (OFW) and the Business Process Outsourcing (BPO). Benigno Aquino III’s Administration in 2010–2016 managed foreign debts falling from 58% in 2008 to 47% of total government borrowings. According to the 2012 World Wealth Report, the Philippines was the fastest growing
economy in the world in 2010 with a GDP growth of 7.3% driven by the growing business process outsourcing and overseas remittances.
Higher Employment Rate in 2018
LAST June 5, economy experts released their reports based on the results of the April 2018 Labor Force, stating that 40. 89 million Filipinos are currently employed. This makes up for 94.5% employment rate, a 0.2% percentage points higher compared to the same period last year, and 2.5% percentage points higher than a decade ago, at 92% in 2008. The government credits its “Build, Build, Build” infrastructure program, which is designed to modernize the country’s infrastructures with $36 billion worth of investments and 75 flagship projects, such as structures of worldclass sports centers, airports and “new cities.”
Economic Growth in 2018
AS one of the emerging markets in the world, our country is the sixth richest in Southeast Asia by Gross Domestic Product (GDP) per capita values, after the regional countries of Brunei, Indonesia, Malaysia, Singapore and Thailand. This 2018, it is forecasted that the Philippines could surpass China’s economic
growth of 6.9% growth in 2017, and the World Bank’s forecast of 6.7%, according to Socioeconomic Planning Secretary Ernesto Pernia in April. “The Philippines was next only to China’s growth in 2017. We are expected to do better than China this 2018, next only to India,” Pernia said. He mentioned the GDP could grow between 7-8%, with the help of ongoing major infrastructure projects, and policy reforms such as improving business processes, implementing the national ID system and developing human capital investments. In the Q1 of 2018, the Philippine economy grew by 6.8%, despite higher inflation, slower agricultural output and wider trade deficit. This is the 10th consecutive quarter that the economy grew by 6.5% or better, according to National Statistician Lisa Grace Bersales, even though it missed it the government’s target for the said quarter. Named as one of the Tiger Cub Economies, the Philippines is in the same league as foreign nations Indonesia, and Thailand, economically. The World Bank expects the Philippine economy to “maintain” its growth rate in 2018 and 2019. “The country is expected to benefit from the global recovery during 2018,” the Bank said.
Economy BusinessMirror
A4 Tuesday, June 12, 2018 • Editor: Vittorio V. Vitug
Post-TRAIN solutions set for deliberation this week–solon
S
ix months after the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, the chairmanoftheHouseCommitteeonWays and Means on Monday vowed to provide this week government solutions on issues hounding the implementation of the social benefits provided under the new tax law. Committee Chairman Rep. Dakila Carlo Cua of Quirino said he is set to meet with concerned government agencies on Thursday to discuss the social benefit measures to mitigate the impact of the new tax-reform law. “Our tentative schedule is on June 14. This meeting will help government agencies to help hasten the implementation of social benefit card included in the TRAIN law,” Cua said. “This roundtable with the implementing agencies will discuss the delays and come up with a way forward,” added Cua, admitting that these mitigating measures are already still behind the schedule. According to the lawmaker, the social benefits card envisioned in the TRAIN law will significantly help the situation of Filipinos as there are families who can barely get by and urgently need help from the government. During the deliberations for TRAIN, the economic managers gave Congress their assurance that programs will be in place to help Filipinos cope with rising commodity prices, he said. The lawmaker also reiterated that the committeeisopentosuspendtheimposition of certain taxes in TRAIN law. “In fact, our committee researchers are now studying what are the mechanisms, processes we will use and the limitation of the suspension, as well as what features of the law can be suspended,” Cua said. Jovee Marie N. dela Cruz
DOF reviews rules on common carriers tax to boost PHL’s edge in shipping
T
By Rea Cu
@ReaCuBM
HE Department of Finance (DOF) will review current revenue regulations on the common carriers tax imposed on international air and sea cargo vessels doing business in the Philippines in a bid to improve the country’s competitiveness in the global shipping and air cargo sectors. During a recent meeting with Danish officials, Finance Secretary Carlos G. Dominguez III said the DOF is studying the legislation governing the common carriers tax and how it is being currently implemented in the country. “We are seriously reviewing this and again the goal is to make it fair to everyone and to make it a level playing field for all participating in the business. We are going to review the BIR [Bureau of Internal Revenue] issuances,” Dominguez said. He gave the assurance of the review after Denmark Minister of Industry, Business and Financial Affairs Brian Mikkelsen raised the issue during the meeting. “This is the one topic that gets us worried. We are very interested to know more about this. Looking at the shipping area, this is a very
global business, therefore it is advisable to have a level playing field,” Mikkelsen said. Also with Mikkelsen at the meeting were Danish Ambassador Jan Top Christensen and Tine Nielsen Hertz, the head of Division of the Ministry of Industry, Business and Financial Affairs. Under Republic Act (RA) 10378, international carriers are currently exempted from paying the 3 percent common carriers tax imposed on passengers but not on cargo. “Online international air carriers are exempt from VAT [valueadded tax]. They are liable to the three percent percentage tax on their gross receipts from outbound fares and freight, pursuant to Section 118 of the Code,” said BIR Revenue Memorandum Circular 46-2008.
The DOF said the international carriers wishing to be granted Philippine income tax exemption—on the basis of reciprocity—may file for a confirmatory ruling for such exemption with the BIR’s International Tax Affairs Division. Reciprocity under RA 10378 refers to “an applicable tax treaty or international agreement to which the Philippines is a signatory” or when the home country of an international carrier grants income tax exemption to Philippine carriers. “I think the concern is the enactment of RA 10378, which declares that gross receipts by international air and shipping carriers are subject to common tax and not VAT. We are studying whether a proposal to modify is in order,” Dominguez told financial reporters in a text message. Mikkelsen was recently in Manila to head a business delegation from Denmark, as several Danish firms have expressed interest in partnering with Philippine companies to be able to invest here. “We are very impressed with the achievements of the Philippines,” Mikkelsen added. The finance chief told the Danish delegation that the government is now applying the finishing touches to its web-based National Single Window, which aims to facilitate trade, heighten transparency in customs procedures and improve revenue collection, as part of the reforms that the Duterte administration is undertaking to attract more investments in the country.
www.businessmirror.com.ph
ADB exec cites role of ITS in solving traffic congestion By Cai U Ordinario
@cuo_bm
I
ntelligent transport systems (ITS) can help improve traffic congestion in Asian countries like Metro Manila, according to the Asian Development Bank (ADB). In an Asian Development Blog on Monday, ADB East Asia Department Senior Transport Specialist Susan Lim said ITS refers to technologies, such as Waze, and technologies used by transportation network companies (TNCs) Uber and Grab that allow ride sharing. She added there are ITS or applications that allow cyclists to find better routes, as well as commuters to help them determine train lines that are in service. “ITS tools improve efficiency and productivity. We make more informed decisions about when and
how to travel, which, in turn, mitigate traffic congestion. Having a robust, comprehensive ITS framework boosts economic growth by enabling citizens and governments to better manage their resources,” Lim said. The economies in the region, such as Singapore, Hong Kong and Seoul, she said, have turned to ITS to address congestion issues. Singapore uses ITS to determine congestion pricing schemes; Hong Kong allows cashless spending in public transportation through these technologies; and Seoul provides realtime bus arrival and departure schedules for passengers through ITS. Lim added that in China, the government aims to push ITS penetration by controlling traffic and capitalize on it to create modern, green and livable cities.
4 RTWPBs expected to issue new wage increase orders soon
F
our more regional wage boards are expected to soon issue their new wage orders, according to a labor group. The Associated Labor UnionsTrade Union Congress of the Philippines (ALU-TUCP) said the Regional Tripartite Wages and Productivity Boards (RTWPBs) in Western, Central and Eastern Visayas, as well as the Davao Region are now finalizing their stakeholder consultations for their respective wage orders. “Regions 6, 7, 8 and 11 are already deliberating, and will be ready to is-
sue wage orders,” ALU-TUCP Spokesman Alan Tanjusay said. Tanjusay said the four RTWPBs are ahead of their counterparts in other regions since they have gone past the anniversary dates of their previous wage orders. As of May, the 12-month prohibition period for wage orders in Central Luzon and Zamboanga have lapsed. He said they hope the wage orders to be granted by the RTWPBs in the four regions would be enough to help them cope with rising prices of basic goods and services. Samuel P. Medenilla
The World BusinessMirror
www.businessmirror.com.ph
Editor: Lyn Resurreccion • Tuesday, June 12, 2018
Trump needs a tough N. Korea deal, but not because of Iran
D
onald J. Trump will be under political pressure in Singapore this week to ensure any deal he makes with North Korea is tougher than the one Barack Obama struck with Iran. The comparison may be misleading.
Geography and history make the two negotiations fundamentally different, former diplomats and nuclear disarmament experts say. North Korea’s neighbors have lived with its nuclear arsenal for years now. Iran sits near weak and failed states with fragile borders and histories, as well as Israel, heightening the risk that even the prospect of a nuclear-armed Iran could provoke war.
Geography and neighbors
“It’s all about geography and one’s neighbors,” said Mark Fitzpatrick, a former US diplomat who served both in South Korea and as acting assistant secretary of state for nonproliferation. He now heads the US office of the International Institute for Strategic Studies (IISS). “ The primar y difference is that America’s major ally in the region, Israel, cannot and will not accept a nuclear Iran,” said Fitzpatrick in an interview earlier this month at the Shangri-La security summit in Singapore. “Israel would be all too happy if the US attacked Iran.” North Korea, by contrast, tested its first bomb in 2006. What prompted the Trump-Kim summit in Singapore this week wasn’t Pyongyang’s nuclear breakout more than a decade ago, but last year’s tests of intercontinental ballistic missiles (ICBM) capable of reaching the US mainland. That has made North Korea the bigger and more immediate threat to the US, said Christopher Hill, a former diplomat who headed the US delegation in talks with North Korea from 2005. Pyongyang, unlike Iran, already has a nuclear weapon and “it’s aimed at us,” he said. “I think it’s designed to decouple us from the region.”
Skeptical
Hill is skeptical Trump will be able to achieve the “complete, verifiable and irreversible disarmament” of North Korea he has promised, and worries the US president will give away too much in Singapore. If mishandled, the Trump-Kim meeting risks driving a wedge between Washington and some of its closest allies, Hill said. Senate Democrats also sent Trump a letter last week demanding he accept nothing less than complete nuclear disarmament from North Korea. New York Sen. Chuck Schumer later told reporters the bar was set higher than for the Iran deal, because the threat from North Korea was greater. Getting that kind of deal quickly, however, requires “magical thinking,” according to a report published Monday by the Brusselsbased International Crisis Group. “North Korea’s nuclear and missile complex and production capabilities are far more extensive than Iran’s, and the Joint Comprehensive Plan of Action (JCPOA) took 20 months of near constant highlevel talks to nail down.” Trump pulled out of the 2015 JCPOA with Iran last month, declaring it so weak it was “the worst deal ever.”
Nuclear states
It’s very unlikely, according to Hill, that the US president will get a deal that creates the level of intrusive verification inspections Iran accepted in 2015, or persuades North Korea to ship out large amounts of fissile materials as Iran did. Neither Hill nor other analysts interviewed think Trump should accept North Korea as a nuclear state, or give up on the attempt
A
Xi was taking the podium to criticize what he said were new forms of “unilateralism” and “protectionism.” “We oppose the practice of sacrificing other countries’ security for their own absolute security,” Xi told a gathering of the SCO’s heads of state in the Chinese port of Qingdao. “We need to reject selfish, short-sighted and closed policies, uphold the rules of the World Trade Organization, support the multilateral trading system and build an open world economy.” China’s state-run media had fun with the contrasting images of the feuding democratic states and the orderly proceedings of the Chinaand Russian-led bloc. The English-language Twitter account of the Communist Party’s People’s Daily newspaper posted photos of a tense scene in La Malbaie, Quebec, and another of Xi and Putin smiling, with the caption, “G7 vs SCO: two meetings on the same day.”
briefs
3 Gulf Arab states pledge $2.5 billion to Jordan
RIYADH, Saudi Arabia—Three Gulf Arab states pledged $2.5 billion in aid to Jordan on Monday in an effort to stabilize the US-allied kingdom as it faces its worst protests in years over government austerity plans that included tax increases. The money from Kuwait, Saudi Arabia and the United Arab Emirates (UAE) will go toward a deposit in Jordan’s Central Bank, cover World Bank guarantees for the kingdom, offer budget support and finance other development projects. The hope is the five-year aid package, which mirrors a similar aid package offered by Gulf states in 2011, would help Jordan come up with a new, more-palatable austerity plan to both satisfy international lenders and its public. The money came after an earlymorning meeting in Mecca attended by Jordan’s King Abdullah II, Saudi King Salman, Kuwait’s ruling emir Sheikh Sabah Al Ahmad Al Sabah and Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s vice president and prime minister. Also on hand was Saudi Arabia’s assertive 32-yearold Crown Prince Mohammed bin Salman, though he sat off to the side of a circular table that hosted the leaders. AP
Prince Harry, Meghan to visit Australia, Fiji North Korean leader Kim Jong Un meets with Singapore’s Prime Minister Lee Hsien Loong at the Istana, or presidential palace, on June 10 in Singapore. AP/Wong Maye-E
to pressure Kim into abandoning his nuclear weapons. Yet some believe that so long as Kim agrees to abandon his ICBM program, the region can return to managing a nuclear North Korea, while a much-longer process of disarmament talks gets under way. Even if the two sides agree to freeze North Korea’s missile tests and nuclear fuel production, it would take at least two years to get the whole program inventoried and the pieces in place for any disarmament to begin, according to Daryl Kimball, executive director of the Arms Control Association, a Washington advocacy group. “That isn’t kicking it into the future,” he said. “It’s acknowledging the reality that you need a step by step process.” That should be possible even with an initial agreement that looks much weaker than the JCPOA, because the region is relatively stable. Pyongyang is surrounded by stronger states, including China, Japan and Russia. And however provocative its missile tests and other actions, North Korea largely keeps to itself.
As for South Korea, “it has lived with the threat of war since 1953, but the armistice strangely enough has largely held,” said James Hoare, an associate fellow at the UK think tank Chatham House, who as a diplomat established the British embassy in Pyongyang.
Fragile neighborhood
Iran’s neighborhood is much more fragile. The Islamic Revolutionary Guard Corps-Quds Force is involved in fighting conflicts and supporting militias in Iraq, Lebanon, Syria and Yemen. “Iran is in some ways the more worrisome case,” Kimball said. “The concern about Iran is that it would be even bolder and more expansionist and harder to contain if it had a nuclear weapons capability.” Moreover, Iran’s bitter rival Saudi Arabia has indicated that it will acquire nuclear weapons if Iran does, a more worrying proliferation risk than if Japan or South Korea should decide to acquire their own nuclear deterrents—an unlikely scenario in the short term.
Summit risks
Above all, South Korea—the country most threatened by Pyongyang—has made it clear it would do almost anything to avoid war. That’s because it shares a direct border with its adversary, unlike Israel and Iran, says Fitzpatrick of the IISS. Even before North Korea detonated a nuclear bomb, the South Korean capital Seoul was threatened by massed artillery just a few dozen miles away. So while Iran’s acquisition of nuclear warheads would be a game changer for Israel, for South Korea it was a very unwelcome but ultimately incremental development, he said. The biggest risks from this week’s talks are that Trump either agrees to US troop withdrawals without getting any definitive disarmament in return, or that the talks break down in acrimony and the US and North Korea return to the threats of late-2017, according to Paul Haenle, director of the Carnegie-Tsinghua Center for Global Policy in Beijing. A presidential summit that goes badly would put everyone “in a worse place,” worse than if there’d been no meeting at all, he said. Bloomberg News
China, Russia cementing rising Eastern bloc as Trump rattles G-7 s US President Donald J. Trump left the Group of Seven (G-7) nations in turmoil this weekend, China’s Xi Jinping and Russia’s Vladimir Putin were putting on a very different show on the other side of the world. Last Sunday Xi and Putin toasted the expansion of the Shanghai Cooperation Organisation (SCO), an eight-member bloc designed to coordinate security policies across Asia. The group, which welcomed new members India and Pakistan, as well as the presidents of Iran and Mongolia, pledged to increase cooperation on energy and agriculture and create more favorable conditions on trade and investment. The carefully choreographed affair contrasted with the discord in Canada, as Trump disavowed the G-7’s joint statement and criticized his host, Prime Minister Justin Trudeau. Even as the scope of the breakdown over US tariffs became clear,
A5
We need to reject selfish, shortsighted and closed policies, uphold the rules of the World Trade Organization, support the multilateral trading system and build an open world economy.”—Xi
China’s official Xinhua News Agency published a report titled “The Seven Split Nations, The Lone US” last Sunday, saying that the power of the G-7 was already diminished and the internal divisions will further reduce its influence.
Regional rivalries
The comparison only goes so far. While the 17-year-old SCO has increasingly extended into trade and economic cooperation—the G-7’s central focus—it was founded as a security group. The bloc, which also includes
Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, has rallied around opposition of the “three evils” of terrorism, separatism and religious extremism. The SCO accounts for more than 40 percent of the world’s population versus about 10 percent for the G-7. The bloc has its own tensions lurking below the surface, as China seeks to use the group as a vehicle to promote its “Belt and Road” Initiative, a vast infrastructure-building program that runs through Russia’s strategic backyard. The addition of South Asian ri-
vals India and Pakistan have also raised questions about the group’s long-term cohesiveness. Pang Zhongying, a senior fellow at Pangoal, a Beijing-based research institution, said the SCO faced the same underlying tensions as the G-7 as governments favor unilateral actions over collective ones. “The golden era of multilateralism is over, facing a crisis not only in the G-7, but also in the SCO,” Pang said. “Even though China’s state-owned media touted the socalled rich fruits of the SCO, only a few tangible achievements were, in fact, generated from this summit.” The group demonstrated solidarity in pledging to uphold the Iran nuclear deal, a major source of G-7 contention after Trump’s withdrawal last month. Iranian President Hassan Rouhani, whose country has observer status at the SCO, attended the summit, making his first foreign trip since the US’s decision. Bloomberg News
LONDON—Kensington Palace says Prince Harry, and his wife, the former actress Meghan Markle, will be touring Australia, Fiji, the Kingdom of Tonga and New Zealand this fall. The royal couple, now known as the Duke and Duchess of Sussex, will be making the tour around the time of the Invictus Games in Sydney, which is set from October 20 to 27. Harry, a British military veteran who served in Afghanistan, created the Paralympic-style games as a way to inspire wounded soldiers toward recovery. About 550 competitors from 17 countries competed in 12 sports during the event in Canada last year. The couple joined the pageantry last Saturday of the annual Trooping the Color ceremony in London for the first time since their wedding three weeks ago. The event celebrates Queen Elizabeth II’s official birthday. AP
Iran kills 6 terrorism suspects near Iraqi border TEHRAN, Iran—Iran’s official news agency says members of the powerful Revolutionary Guard have killed six terrorism suspects near the border with Iraq. IRNA’s Sunday report quoted Gen. Mohammad Pakpour, chief of the Guard’s ground forces, as saying that his forces also injured another three suspects in the incident last Saturday. He said the clashes happened at two locations in a Kurdish area as the suspects tried to cross the Iraqi border. The area near Iran’s borders with Iraq and Turkey sees occasional skirmishes with Kurdish separatist groups, as well as extremist Islamic rebels. AP
Trump envoy, Palestinian mediator trade barbs JERUSALEM—President Donald J. Trump’s special Mideast envoy lashed out at a veteran Palestinian official last Sunday, saying his “false claims” and rhetoric haven’t brought peace closer. Jason Greenblatt was responding in Israel’s Haaretz newspaper to an earlier op-ed by Palestinian negotiator Saeb Erekat accusing American officials of acting as “spokespeople” for Israel and criticizing the US for moving its embassy to Jerusalem. The exchange comes shortly before the Trump administration is expected to unveil its Middle East peace plan. Trump has promised to pursue the “ultimate deal” between Israelis and Palestinians. AP
A6 Tuesday, June 12, 2018 • Editor: Angel R. Calso
Opinion BusinessMirror
www.businessmirror.com.ph
editorial
Reducing remittance cost for our OFWs
W
hen overseas Filipino workers (OFWs) get their paychecks, they not only think about how much money they actually made after living expenses and how much they can send to their families back in the Philippines but also how much it will cost to send that money.
Remittances of OFWs are a reliable and steady source of income for a lot of Filipino families, but it seems remitting money isn’t cheap, even today. Way back in 2004, Western Hemisphere leaders at the Special Summit of the Americas in Monterey, Mexico, had called for the cost of sending remittances to be cut in half. This call was echoed by the finance and central bank chiefs of the Group of Seven (the US, the UK, Canada, France, Germany, Italy and Japan), who also declared in 2004 that, “on remittances, we will continue to work on our initiatives to reduce barriers that raise the cost of sending them and integrate remittance services in the formal financial sector.” However, a recent story in this paper (Cut ‘excessive’ transfer fees of banks on OFW remittances–lawmakers, by Jovee Marie N. dela Cruz, June 8, 2018), Partylist Rep. Aniceto D. Bertiz III of ACTS-OFW said OFWs are still seen paying $3.1 billion in bank charges to send home $29.3 billion this year. “A migrant Filipino worker pays an average of $10.57 in bank charges for every $100 wired home,” he said, citing a World Bank study, titled “Remittance Prices Worldwide,” which said the global average cost of a personal cash transfer through bank channels was 10.57 percent in the first quarter of 2018. There’s no reason banks cannot reduce fees, considering that nonbank money transfer agents are already charging as low as 3 percent, he said. Despite the growth of nonbank remittance channels, Bertiz, however, said Filipinos still prefer to send their money home via banks. In the first quarter of 2018, the solon, citing the Bangko Sentral ng Pilipinas, said OFWs remitted $7 billion through the banking system. In 2017 he said Filipino overseas workers wired home $28.1 billion using bank channels, out of a total of $33 billion in personal cash remittances. Only $4.9 billion in remittances last year were coursed outside of the banking system. An average remittance cost of 10.57 percent does seem excessive considering that modern technologies today allow for seamless and cost-efficient money transfers through such platforms as the Internet and international mobile telephone short messaging. Banks should realize that scaling back their remittance costs can win them a larger portion of this multibillion-dollar market. For instance, the fintech sector—short for financial technology—can lower handling fees. One fintech company in the Philippines has rates that go as low as only 2 percent of the transaction amount, without any additional charges to the recipient. For remittances of P1,000, the total cost of sending is only P20. The recipient also gets the entire amount without any additional charges. Any potential savings realized by OFWs from lower remittance charges would surely allow more funds to flow into the Philippine economy. So the Philippine government should combine forces with other top remittance-receiving countries, such as China, India, Mexico and Russia and find ways to step up pressure so that multinational banks would reduce their money transfer fees. The government, through bilateral negotiations, should ask the countries where our OFWs work to have secure and affordable remittance services available; those that can offer significantly lower prices than the regional average, specifically providers who will charge 3 percent or less to send money home to their families here in the Philippines. Despite the rising cost of compliance, even with banks de-risking their operations to curtail remittance service providers’ operations, the cost of sending remittances is bound to fall considerably because of both modern technology and vigorous market competition. We hope this problem of exorbitant remittance prices would be over, sooner rather than later, through the efforts of both public authorities and the private sector to make remittance systems more efficient, transparent and affordable, so that more money can end up where it’s needed the most—in the pockets of our OFWs’ families.
Since 2005
BusinessMirror A broader look at today’s business ✝ Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief Associate Editor News Editor Senior Editors
T. Anthony C. Cabangon Lourdes M. Fernandez
THE Entrepreneur Continued from A1
S
everal factors and developments will lead to that longawaited Mindanao promise. Peace and order, of course, will be the main anchor of Mindanao’s development. Few businessmen or investors will make their bet on Mindanao if it remains mired in conflict. Peace is essential to economic development and businessmen will only locate their operations in the island if the state can guarantee their security. President Duterte is right in giving priority to the resolution of the conflict in Mindanao, where the minority Muslims have fought a bloody war against government forces and sought secession from the Philippines. Duterte has pushed for the enactment of the Bangsamoro basic law (BBL) that will give rise to a genuine autonomous region and bring healing and reconciliation to the historical injustices committed against the Bangsamoro people. The President stressed that the entire Philippines, including the Bangsamoro region, would benefit from the BBL. He said the BBL “embodies our shared aspirations of a
Creative Director Chief Photographer
Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan
BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.
www.businessmirror.com.ph
Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila
peaceful, orderly and harmonious nation” following decades of armed struggle and violence. The proposed Bangsamoro basic law, he said, “puts into life and spirit the constitutional mandate provided in the 1987 Constitution for the establishment of a truly autonomous region in Muslim Mindanao.” The BBL will formalize the peace agreement reached earlier with the Moro Islamic Liberation Front and will lead to the creation of an autonomous political entity named Bangsamoro, replacing the Autonomous Region in Muslim Mindanao. I am confident that both houses of Congress will soon agree on one
The ensuing peace in Mindanao will boost construction activities further and ease the job of the Department of Public Works and Highways, which in January this year secured a $380-million loan from the Asian Development Bank to improve road networks in Mindanao. This ADB loan alone will lead to a frenzy of infrastructure projects on the island. version of the BBL so that President Duterte can sign it and resolve once and for all the conflict in Mindanao. The ensuing peace in Mindanao will boost construction activities further and ease the job of the Department of Public Works and Highways (DPWH), which in January this year secured a $380-million loan from the Asian Development Bank (ADB) to improve road networks in Mindanao. This ADB loan alone will lead to a frenzy of infrastructure projects on the island. My son, Public Works Secretary Mark A. Villar, has reported that the ADB loan from 2018 to 2023 would finance the construction of eight roads in Zamboanga Peninsula with a total length of 277.23 kilometers and additional three bridges in Tawi-Tawi province with a total length of 775 lineal meters. The ADB loan is significant because the DPWH can now use more of its
Are you ‘serious’ or a ‘loser’? John Mangun
OUTSIDE THE BOX
Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos Dennis D. Estopace Ruben M. Cruz Jr. Angel R. Calso
MEMBER OF
Manny B. Villar
Jennifer A. Ng Vittorio V. Vitug
Online Editor Social Media Editor
Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager
Mindanao’s time has come
M
ost financial planners recommend that a portion of a person’s investible funds be placed in the stock market. The rationale for this is because over the longer period of time, the returns on investing in stocks are higher than other investments. The problem, though, is that is not true. It is easy to say that if you bought Apple Corp. stocks in 2013 you would have more than tripled the value of your investment. Likewise, buying Facebook or Amazon stocks at the same time would have been a great investment. But then again, if you had bought Blockbuster—the King of video stores—in 2003, the company was out of business 10 years later. And most people do not invest in the “stock market” (although you can), they invest in individual companies’ stocks. It is all a matter of riding the right horse at the right time.
Assume then that the average investor puts together a portfolio of reliable blue chips issues following the idea of “quality eggs and not all in one basket.” Here again the data shows it is all about timing, and even then the numbers are not great. While the stock market indexes do well over a long enough period, the performance by retail inventors gets worse the longer they hold. If you look at the big money, it does not hold for the long term. The idea that you can put some money in the market every month for the next 20 years and come out ahead is false. If
it happens, you’re lucky and not necessarily smart. The numbers for the New York stock market consistently show that timing is the key. If you happened to buy the stock market at the high in 1970—adjusted for inflation and all market returns, including dividends—it took 24 years to break even. From the high in 2001, the breakeven period was 14 years. Even here on the Philippine Stock Exchange that is the reality. The breakeven period from the 2007 high was three years. Obviously, if you came in at the low in 2009, you are a stock market genius. But then again, if you bought the shares of Universal Robina one year ago, you have lost about 30 percent of your investment. It is all about timing. It is always easy to find someone who made a killing in the market, particularly buying shares of the frequent high-flyers. But for the person who is using the market to save for the long term, this is an unrealistic scenario. How can you make the market work for you over the long term? Understand that there are only two types of people in the stock market: “serious investors” and “losers.”
budget to fund other key infrastructure projects of the government. Three core projects are covered by the loan. These are the 23.69-kilometer Alicia-Malangas Road, the 17.1-kilometer Tampilisan-Sandayong Road and the 37.49-kilometer Lutiman-Guicam-Olutanga Road. The loan is the ADB’s first support for a regional project in the “golden age of infrastructure” under the Duterte administration. The road network expansion is crucial to Mindanao. A wider road network will open up the countryside and Mindanao’s farms, and will result in faster delivery of goods and commodities. Eight of the top 10 exports of agricultural commodities of the Philippines come from Mindanao. These include banana, pineapple, coconut and coffee. We must also remember that Mindanao is the biggest rubber producer in the Philippines because of its rich soil and good climatic conditions. Increased farm and fisheries production, through more community roads and bridges, will raise the income of Mindanao’s countryside. With peace finally close to being a reality, Mindanao will soon deliver its full economic potential and become a major contributor to the gross domestic product. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.
Even some of them who think they are serious investors are losers, and I am going to explain on Saturday how to realize if you are a loser even if you think you are serious. The sad reality is that too many people invest in the stock market as if they were buying lottery tickets. That is, they believe that portfolio performance is not under their control. While knowing that stock prices do not move in a random way as the dice in the casino, they do not take control of the situation, most particularly when the market is going down. That is also the main reason why the number of investors decreases when the market goes down for a relatively long period, and conversely why the number of investors increases during a “bull market.” “Serious” does not mean being smart, experienced 0or working hard. It means that if you do not feel in control of your investment, you are not a serious investor. 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.
www.businessmirror.com.ph
Opinion
Accounting for independence
Wrong policies that keep oil prices and power rates rising
BusinessMirror
Cecilio T. Arillo
database Part Three
Honor all debts
T By Ding I. Generoso
W
eeks before the centennial of independence in 1998, I sent to then-President Fidel V. Ramos some lines I had hoped could become part of his Independence Day speech. Of course, that never happened. It gives me, then, the freedom to resurrect it from my old files in my old computer that still runs on Windows 95 and, for what it is worth, share its message as we mark the 120th year of independence. So here it is: I die without seeing the day dawning on my country.... You who will see it, greet it.... And forget not those who fell during the night. In prison, these words were written, almost 102 years ago, by one man who, with the blood of colonial slaves flowing from his pen, awakened the minds and set aflame the hearts of Filipinos to fight for freedom. The man who wrote these words had long since vanished in the night, fallen by a colonizer’s bullet before dawn in the quiet fields of Bagumbayan. But we dare not erase him from our memories, and the thousands who—with their pens sharpened by the ideals of democracy, with their knives and bolos honed by 300 years of slavery, with their guns loaded with resolve more than bullets, with their hearts hardened by injustice, and their souls battered by oppression—fought the dark forces of colonization and imperialism to set a people free and secure their place in the community of free and independent nations. Without them, without their ideas and their ideals, without their courage and their valor, the Republic of the Philippines would not have seen the light of day. The observance of our 120th year of independence, then, is as much a celebration of freedom as it is a day of reckoning and accounting, a day to give honor and pay homage to the men and women whose blood drenched the plains and the mountains and the valleys of this archipelago—that its people may not only be set free but become one. It is to them that we owe this nation. It is to them that we must first account for our actions and our ways in our time. And on this appointed day, we, the heirs to the first democratic republic in this part of the globe, will stand before a tribunal of willing martyrs and fallen heroes to account for what we have made of their supreme sacrifice. It is to them—more than to ourselves— that we must answer for what this great and blessed land, in our hands, has become. Let us rejoice then in the freedom that June 12 brought, but keep in mind that any observance of independence brings but an empty promise unless, with it, we delight in the fruits that freedom brings. Each June 12 should stand in the flood of time as a celebration of how far we have traveled the path of nationhood and development and how strong we have become as a nation. It is not freedom that matters. It is to what use we put freedom that counts. For man is only as free as he is responsible for the freedom he gains. That responsibility is not just to ourselves but to every fellow Filipino and the Filipino nation. The question then that we must ask ourselves is this: To what national benefit have we put our independence?
The observance of our 120th year of independence is as much a celebration of freedom as it is a day of reckoning and accounting, a day to give honor and pay homage to the men and women whose blood drenched the plains and the mountains and the valleys of this archipelago—that its people may not only be set free but become one. It is to them that we owe this nation. It is to them that we must first account for our actions and our ways in our time. Indeed we are free, but we remain prisoners and slaves. The words of Graciano Lopez Jaena still ring: “[In the Philippines,] where springs of wealth gush out from everywhere and in whose lap beauties and marvels lie hidden, there is certainly no legal slavery, but indeed a form of slavery a hundred times worse…slavery in fact: moral slavery. Slaves are our intelligence and conscience, slaves are our actions, and slave even is our breathing.” We remain prisoners of ignorance of who we are as a people and what we want to become as a nation. We remain slaves to our indifference to the national interest, always substituting personal gain for the good of society. We remain prisoners of divisive thought and slaves to making massive demands on society and government while making minimal demands on ourselves for the sake of society. Independence demands of every citizen—especially their leaders— the higher virtue of taking on the responsibility for the betterment of his country and his countrymen. And when the daily preoccupation of half of our people is the harsh necessities of mere survival, freedom is robbed of its consequence. And for as long as there is a Filipino without roof over his head; For as long as there is a Filipino without food on his table; For as long as there is a Filipino who walks barefoot; For as long as there is a Filipino without work; For as long as there is a Filipino who cannot read and write; The cause of freedom is not served. And for as long as we celebrate independence as Tagalogs and Visayans, as Ilocanos and Capampangans, as Bicolanos and Mindanaonons, as Boholanos and Warays, and not as Filipinos, then we have not reaped the fruits of freedom. The challenge then, as we mark the centennial of our independence, is still the same challenge that our forefathers faced while struggling to be free from foreign grip. This is the challenge of nationhood. To this grand task, June 12 summons us. To this paramount obligation of perfecting our independence, June 12 beckons. To answer this call, and to dedicate every waking moment of our lives to its attainment, this much is asked of each of us. Let not the generations after us indict us for our failure to make a thousand flowers bloom from the blood spilled by the generations before us. Our forefathers won our freedom for us. Let us now win the future for our children.
HE impact of President Corazon Cojuangco Aquino’s deliberate action resulted in endless oil prices and electricbill increases, and a spate of brownouts that continued up to this day in many parts of the country. At that time, the World Bank estimated the cost of daily brownout and unemployment at $1.3 billion.
By June 2003 National Power Corp. (NPC) had $7 billion worth of debt to its name. These debts do not include the $250-million bond partly backed by the Overseas Private Investment Corp. (around $500 million of $7 billion had matured toward the end of 2003) and other sovereign contingent guarantees. As of mid-2004, NPC’s obligations reached more than P1 trillion, P700 billion of which was due the independent power producers (IPPs). NPC’s financial obligations represented at one time almost one-fifth of the P5.39-trillion national debt. This debt eventually rose to more than P6 trillion toward the end of President Benigno S. Aquino III’s regime. Earlier, a government study commissioned by the Credit Suisse First Boston and Arthur Andersen estimated NPC’s net liabilities from obligations to the IPPs at a staggering range between $6.1 billion and $6.77 billion. Worse, these liabilities and obligations continued to grow. The Philippines already had an oversupply of electricity in 1994. But
strangely, the Ramos administration still entered into new contracts with IPPs, many of them enjoyed financial backing from Export Credit Agencies (ECAs) with Philippine sovereign guarantees. In fact, ECAs supported three of the five IPP contracts found onerous by the government Interagency IPP Review Committee. These were the Casecnan Multipurpose Irrigation and Power Project (CMIPP), the Sual Coal-Fired Power Plant and the San Roque Hydropower Project, touted as the country’s biggest hydropower. In these deals, the government committed to pay CMIPP a whopping P80.77 billion, or $1.454 billion, or $72.7 million ($=55.55) a year for 20 years to Cal Energy (CE)—Casecnan whether the US firm actually delivered the contracted water to Pantabangan Dam. Aside from tax exemptions, CE-Casecnan is also assured of P40.4 billion, or $728.00 million, or $36.4 million yearly for the same period, as fees for the hydropower created in the course of delivering the contracted water. There is no
Tuesday, June 12, 2018 A7
assurance whatsoever that CMIPP would generate power monthly. Sovereign guarantee on payments for IPPs expensive power, regardless of actual need and performance, appeared to be the major source of greed. Thus, it set the stage for NPC’s financial ruin. Within a short span of time or by 2000, the principal balance of NPC’s financial debt obligations had surged to $6.77 billion; $1.23 billion of this is owed to various ECAs. But what actually sank the country deeper in financial crisis was, among others, Mrs. Aquino’s naive decision to “honor all debts.” As the country grappled with a shortfall of 1,500 megawatts in programmed additional capacity that triggered eight-to 12-hour daily brownouts, foreign energy investors, deliberately enticed by the government with sovereign guarantees and other incentives without looking at the deleterious effect, quietly came into the picture. Mrs. Aquino actually started the power privatization by issuing Executive Order 215 on July 10, 1987, which opened the electricity-generation sector to private investors and paved the way for the entry of IPPs and ECAs, like the Overseas Private Investment Corp., Export Credit Guarantee Department and the Japan Bank for International Cooperation, which ensured financial backing for the IPPs. Through this directive, President Aquino encouraged private-sector involvement in the country’s economic activities, deeming that the private sector can be a catalyst for nation building. Apart from her act in abolishing the Ministry of Energy, she also made another serious error. For whatever reasons, she hurriedly returned a much larger, more expansive and very profitable Manila Electric Co.
Joint oil exploration in WPS is legal Ernesto M. Hilario
ABOUT TOWN
W
hen President Duterte traveled to Hainan, China, in April to attend the Boao for Asia Forum, he and President Xi Jinping agreed during a bilateral meeting to pursue cooperation in offshore oil and gas exploration in the South China Sea/West Philippine Sea. This agreement in Hainan followed an earlier meeting between Filipino and Chinese officials in Manila, where they agreed to pursue confidence-building measures, such as joint initiatives in the disputed waters, including oil and gas exploration and marine scientific research. Foreign Secretary Alan Peter S. Cayetano said later that both sides are “finding a common legal framework to conduct joint exploration and surveys” in the contested waters. For his part, Chinese Foreign Minister Wang Yi said the two countries will “in a prudent and steady way advance cooperation on offshore oil and gas exploration.” Given the Philippine economy’s growing demand for power and the projected depletion of the natural gas supply in the Malampaya facility by 2030, the government must now redouble its efforts in finding new energy sources. We should, therefore, be able to tap what is believed to be rich oil and gas deposits in the West Philippine Sea for our own benefit. A joint exploration arrangement between the Philippines and China, so long as this is covered by commercial agreement, is legally acceptable. The Constitution allows the government to jointly explore and develop our natural wealth with foreign-owned corporations provided that it retains full control and supervision of these resources. Section 2, paragraph 1 of Article XII of the 1987 Constitution provides that “the exploration, development and utilization of natural resources shall be under the full control and supervision of the State.”
It says the government “may directly undertake such activities, or it may enter into coproduction, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 percent of whose capital is owned by such citizens.... Such agreements may be for a period not exceeding 25 years, renewable for not more than 25 years, and under such terms and conditions as may be provided by law.” Further on, the Constitution allows the President to “enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources.” Our Department of Energy (DOE) acted along this direction when it entered into a contract with a consortium, led by Shell Philippines Exploration B.V., to operate the natural gas facility in Malampaya. This arrangement has proven to be highly beneficial for the country. The Malampaya consortium for the 2002-2013 period alone
has remitted a total of P173.28 billion to the government as its share from the net proceeds from petroleum operations. Acting Chief Justice Antonio Carpio has clarified that even if the use and enjoyment of our EEZ (exclusive economic zone) is reserved exclusively to Filipino citizens, it does not mean that Chinese companies cannot participate in the exploitation of oil and gas in our EEZ, as they can act as technical and financial contractors of the Philippine government or Filipino companies under Philippine law. As long as the constitutional limitations under Article XII are observed, the government can proceed to jointly explore our waters with foreign firms through commercial agreement. As for the constitutional requirement of “full control and supervision by the State,” this is already complied with considering that the petroleum blocks located in the
(Meralco), gratis et amore, to the Lopezes and their business associates. It should be recalled that aside from the transfer of all the electric power generating plants of Meralco to the NPC, the Lopezes and their associates, for financial reasons, also decided to divest themselves of their interest in Meralco. As a consequence, all the shares of stock of Meralco were sold and transferred to the Meralco Foundation, a nonstock and nonprofit foundation. The consideration for this sale and transfer was P872,764,365. The purpose of the transaction was to convert Meralco into an electric cooperative to be owned by all its consumers. Every Meralco electric consumer was, in fact, a recipient of a stock warrant from the Meralco Foundation. The stock warrants issued by the Meralco Foundation bore individual serial numbers, and these were supposed to be exchanged with Meralco shares upon the fulfillment of certain conditions. “President Aquino, it would seem, was never really familiar with the power industry, let alone with the policies involved. Otherwise, she would not have recklessly issued Executive Order 215, which brought the injurious and much-hated purchased power adjustment or PPA into the country,” former Senate President Juan Ponce Enrile said. In spite of Executive Order 215 and the influx of independent power producers, long hours of power brownouts, lasting from 12 to 15 hours a day, went on. This was the condition of the country when Fidel V. Ramos became president.
To be continued
To reach the writer, e-mail cecilio.arillo@ gmail.com.
sovereignty will even strengthen the Philippines’s position on the arbitral award granted by the UN tribunal because we would be exercising our rights gained under the award. The important thing to take into account is to make sure that any commercial agreement we enter with China will not undermine the Constitution and the gains we have made in the UN tribunal. Cayetano has already dispelled concerns on a possible cooperation agreement infringing on the Philippines’s sovereign rights when he earlier gave assurances that the government would consult legal experts to make sure any pact with China would not violate the Constitution or any of our laws. “Whatever we do will not only be in accordance with the Constitution but also the Unclos [UN Convention on the Law of the Sea],” Cayetano said, referring to the international treaty signed by 160 states, includ-
A joint exploration arrangement between the Philippines and China, so long as this is covered by commercial agreement, is legally acceptable. The Constitution allows the government to jointly explore and develop our natural wealth with foreign-owned corporations provided that it retains full control and supervision of these resources. West Philippines Sea are covered by Petroleum Service Contracts (PSCs) entered into by the DOE, on behalf of the Philippine government, with service contractors under the terms provided by the Oil Exploration and Development Act (OEDA). These service contracts are in the nature of technical or financial assistance that is allowed under the Constitution. Such forms of assistance for the large-scale exploration, development and utilization of petroleum may be entered into with foreign corporations as expressly permitted under the Philippine Constitution and the OEDA. In fact, any such joint use or exploration without any issue of
ing the Philippines and China, which allows coastal nations the right to explore, manage and exploit resources within 200 nautical miles from their shores. His latest statement on “finding a common legal framework” with China further allayed concerns over this matter. According to studies, the resource potentials covered by the PSCs in the West Philippine Sea are larger than the Malampaya gas field. If the area covered by the West Philippine Sea PSCs is developed, our economy would certainly benefit and Filipinos would also immediately enjoy lower electricity costs.
E-mail: ernhil@yahoo.com