DBM ALLOCATES P1B FOR HOG FUND By Jasper Emmanuel Y. Arcalas @jearcalas
T
HE government has set aside P1 billion to compensate backyard raisers whose pig herd would be culled as part of efforts to control the spread of the African swine fever (ASF), a senior agriculture official said on Wednesday. Agriculture Undersecretary Ariel T. Cayanan made this pronouncement during the House of Representatives Committee on Agriculture and Food inquiry into the country’s ASF outbreaks. Cayanan also revealed that the Duterte administration has approved the creation of the National ASF Task Force (NATF) during the last Cabinet meeting.
The Department of Agriculture (DA) official said the P1-billion indemnification fund for backyard raisers who will be forced to depopulate their farms was greenlighted in the same Cabinet meeting. Cayanan made the disclosure after he was asked by Magsasaka Party-list Rep. Argel Joseph T. Cabatbat if the DA has sufficient funds to address the ASF outbreaks and to compensate hog raisers. ASF is a highly contagious viral disease that is fatal to hogs but is not harmful to humans. “In the activation of the National Task Force, together with it is the budget of P1 billion for indemnification, which is only for backyard raisers,” he said during the hearing. “Backyard raisers produce about 65
percent of the country’s total hog population. The P1 billion could cover only 5 percent [of the total backyard hog raisers],” Cayanan added. He said it was Budget Secretary Wendel Avisado who said that the national government has enough money to provide the P1 billion for the compensation of hog raisers. Cayanan said the indemnification fund would only cover backyard hog raisers since they comprise the bulk of the country’s pork producers and they lack support, particularly in the implementation of biosecurity measures. All of the 14 ASF outbreaks that the DA confirmed took place in backyard farms. See “Hog fund,” A2
Rotary Club Of Manila Journalism Awards
2006 National Newspaper of the Year 2011 National Newspaper of the Year 2013 Business Newspaper of the Year 2017 Business Newspaper of the Year 2019 Business Newspaper of the Year
2018 ejap journalism awards
business news source of the year DEPARTMENT OF SCIENCE AND TECHNOLOGY
2018 BANTOG MEDIA AWARDS PHILIPPINE STATISTICS AUTHORITY
DATA CHAMPION
www.businessmirror.com.ph
A broader look at today’s business n
Thursday, October 3, 2019 Vol. 14 No. 358
DOE orders oil firms to explain pricing gaps T
By Lenie Lectura @llectura & Jovee Marie N. dela Cruz @joveemarie
HE Department of Energy (DOE) has issued show-cause orders to oil companies and LPG (liquefied petroleum gas) dealers to compel them to explain discrepancies in their latest price adjustments, as lawmakers pushed for an investigation into possible predatory pricing. Oil firms were given until Monday (October 7) and LPG dealers until this week to reconcile the gaps —the first time in three years between the private sector’s and the government’s estimates. “In v iew of t he appa rent
difference in the oil price rollback calculations between the Department of Energy [DOE] and oil firms, we issued show-cause orders [SCOs] to 13 oil companies yesterday afternoon [1 October],” the DOE said. “Under the SCOs,
recipients would have until Monday [7 October] to formally respond to the department.” Regulators have kept close watch of fuel pricing since the September 14 drone attacks damaged key oil facilities in Saudi Arabia,
“We were just surprised. Historically, our computations would match. This is the first time over the last three years [that the estimates of private business and the DOE had a big variance].” —Pulido
knocking out 5 percent of global supply and driving up prices of world crude. The Philippines imports nearly all of its crude oil requirements. After imposing a whopping P2.35 a liter price hike days after the Saudi attacks, local oil companies this week reduced gasoline price by P1.45 per liter, diesel by P0.60 per liter and kerosene by P1 per liter. See “Oil firms,” A2
Pork supply dip in PHL to impact inflation
See “Pork supply,” A2
PESO exchange rates n
Surging Asia failing to meet SDG targets Rene E. Ofreneo
laborem exercens
H
as Asia’s century arrived? In 2000 or at the turn of the millennium, Asia was widely predicted to eclipse Europe and North America in economic strength. Led by emergent China, Asia had already then become the world’s factory, able to churn out a galaxy of household and office items, such as furniture, appliances, utensils, toys, office supplies and so on that flooded the world market. Continued on A7
Govt may forge deal with Hanjin white knight by end-’19 By Cai U. Ordinario
T
F
ITCH Solutions, the research arm of Fitch Group, warned of a potential decline in pork supply in the Philippines up until 2020 due to the African swine fever (ASF), and cautioned about the possible effects of the animal disease on inflation. In a research note, entitled “African Swine Fever: SE Asia Food Inflation Risks As Disease Spreads,” Fitch Solutions announced that is has slashed the pork production numbers for 2020 of three Asian countries due to the onset of the ASF. These countries include the Philippines, as well as Vietnam and China. The Philippines, according to Fitch Solutions, will see its pork production fall to 1.6 million metric tons, 1.5 percent lower than the forecast for 2019. Vietnam, however, will see a bigger decline of 3.7 percent to 2.3 million metric tons and China, a projected 5-percent decline to 5.9 million metric tons. “For the Philippines, seven ASF cases have been reported since July 2019 and over 7,000 pigs have been culled,” Fitch Solutions said. “Given that over 60 percent of the country’s pig population are located in backyard farms, where
P25.00 nationwide | 6 sections 54 pages | 7 days a week
VALUES ADVOCACY Education Secretary Leonor Magtolis Briones will be the guest of honor and keynote speaker at the launch today (October 3) of the ninth year of Fortune Life Insurance Company’s Values Advocacy Program. Fortune Life and its partner agencies are, together with Briones, paying tribute to teachers and school officials who have promoted by their works the values of hard work and discipline imparted by the ALC Group of Companies founder, Ambassador Antonio L. Cabangon Chua. Story on page A8.
Automation creates new jobs for tech sphere in PHL By Lorenz S. Marasigan @lorenzmarasigan
W
ITH the Philippines undergoing some sort of baptism of fire under the Fourth Industrial Revolution (FIRE), job automation is expected to be a trend across different industries, a socially painful initiative that may displace 18.2 million employees.
However, according to McKinsey & Co. Managing Partner for Southeast Asia Kaushik Das, this may also present an opportunity for the Philippines to create new jobs in the tech sphere. “Automation has an impact on societies and people, and if you don’t get ahead of this, this could create a huge social unrest. In the Philippines, because of tech trends, around 40 percent
to 50 percent of jobs will be impacted,” he said. The agriculture sector is seen to take the biggest blow, with 6 million jobs at stake. This is followed by retail and wholesale at 3.6 million, manufacturing at 2.4 million, transportation at 1.6 million, administrative and support at 1.1 million, and construction at 900,000 jobs. See “Jobs,” A2
@caiordinario
HE national government will likely reach a deal with a non-Chinese foreign investor for the Hanjin shipyard in Subic, Zambales, by December, the Subic Bay Metropolitan Authority (SBMA) said on Wednesday. In a Senate hearing on Wednesday, SBMA Chairman and Administrator Wilma T. Eisma said the Department of Finance (DOF) and Rizal Commercial Banking Corp. (RCBC) are currently in the final stages of talks with the white knight. If the talks fail, Eisma said Hanjin creditors, which include the government, still have other options, as many foreign firms have expressed interest to operate the shipyard. “Actually, right now negotiations are ongoing between the creditor banks and the proposed white knight. Supposedly, the creditor banks told me, by the end of the year, hopefully they will reach a deal,” Eisma told reporters on the sidelines of the Senate hearing. “It’s not a Chinese company, but a foreign company. Right now, what I know is it’s a shipbuilding company. Right now, [negotiations have been] locked in. If it fails, there’ll be another lock-in with other interested parties in line,” she added. One of the reasons many foreign firms are interested in Hanjin, Eisma said, is that its asset value is close to $2 billion, while its debts only reached $411 million. Apart from this, the land the shipyard stands on is close to 300 hectares. The SBMA official said this is attractive even to firms that
are not into shipbuilding. “There’s a long line of interested firms. A lot of firms have expressed their interest to take over the operations of Hanjin and these are not just in shipbuilding but in various businesses,” Eisma said. She said, however, that if the negotiations with the white knight prove successful, the firm will be able to hire back thousands of displaced Hanjin employees. Also, she said the white knight will benefit from the training former Hanjin employees received, as well as the existing world-class facilities in the shipyard. At its peak, Eisma said Hanjin had 33,000 employees. While it was winding down its operations, the shipyard retained 3,000 workers. Currently, only 300 workers remain in the shipyard. “What’s nice about the Hanjin facility is that it’s world class. The company put up training facilities just for their talents. If another shipbuilder will operate there, which is likely, it will need the talents [developed by Hanjin],” she said. Hanjin filed for corporate rehabilitation in January, as it struggled to pay $412 million in loans to five domestic banks. Since then, three foreign investors have expressed interest in acquiring the country’s largest shipyard. The list of interested parties include Dutch firm Damen Group, French company Naval Group, a consortium of American corporations and two Chinese ship manufacturers. Since 2006, South Korea’s Hanjin invested over $2.3 billion in its Subic shipyard and delivered 123 cargo ships as of the end of 2018.
US 51.8610 n japan 0.4814 n UK 63.8150 n HK 6.6125 n CHINA 7.2813 n singapore 37.4475 n australia 34.7572 n EU 56.7048 n SAUDI arabia 13.8255 Source: BSP (2 October 2019 )