Philippines Update: Duterte Announces Temporary Suspension of Anti-Drug Campaign

Philippines Update | February 9, 2017
Authors: Riley Smith, Elizabeth Magsaysay-Crébassa, and Evelyn Mariano
 
LOOKING AHEAD
 
 

February 10: Country Briefings with the Council's Regional Representatives (Singapore)

February 13: Energy Committee Quarterly Call

February 14: First Planning Call For the Mission to the 2017 ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM)

February 21-22: 2017 Business Mission to Cambodia

February 22: Roundtable Discussion with U.S. Congressional Delegation (Singapore)

February 23: Malaysia Committee Quarterly Call

March 6-9: 2017 Business Mission to Vietnam

 
THE COUNCIL'S TAKE
 
 

Duterte Announces Temporary Suspension of Anti-Drug Campaign
The recent decision by President Rodrigo Duterte to suspend his government’s sprawling and violent anti-narcotics crackdown and focus on rooting out corruption in the Philippine National Police (PNP) could be beneficial for the overall business environment, but only if the government is serious about tackling corruption.  However, it remains unclear how the announced official suspension, if actually enacted, will affect the vigilante killings that have come to characterize the crackdown.  Director-General of the Philippine National Police (PNP), Ronald “Bato” dela Rosa, announced on January 30 that, on the orders of Duterte, the country’s anti-illegal drug campaign would be temporarily suspended as focus turned towards rooting out corruption in the PNP.  All anti-drug units of the PNP would also be abolished, while authority to carry out narcotics-related operations would be transferred to the much smaller Philippine Drug Enforcement Agency (PDEA).  The National Bureau of Investigation would also be prohibited from participating in activities associated with the crackdown.  That same day at an earlier news conference, Duterte admitted that corrupt police officers were using the government’s crackdown on narcotics as a pretext to commit extortion and other crimes.  Later, he announced his intention to draft an executive order that would allow “only a select few” from the Armed Forces of the Philippines to assist the PDEA in the anti-illegal drug campaign, but attempted to calm concerns over the move by reiterating that he saw no need to declare martial law for the task, even though he has called narcotics a national security threat.  Even with the temporary suspension, which Dela Rosa anticipated would last for about a month, there is little indication that the vigilante killings that accounted for nearly two thirds of the 7,080 people killed between July 1, 2016—Duterte’s first full day in office—and January 31, 2017 will drop significantly.  Duterte also undermined the announcement about the suspension by once again extending the duration of the crackdown—this time from the already extended nine months to the full six years of his term.

Nevertheless, the announcements by Duterte and Dela Rosa are worth noting, especially given that during and after the presidential campaign Duterte repeatedly said that he would protect police officers who killed suspects in the course of the anti-narcotics crackdown.  While the Catholic church has taken to more vocally criticizing the government’s crackdown on drugs, including a searing denouncement read out at all Sunday Masses on February 5, Duterte has already expressed his disdain for the influential church multiple times.  Nor does the potential of a public backlash seem to be the reason for the temporary suspension; the public credits the anti-drug campaign with reducing the rate of petty crime, even as a December 2016 poll by Social Weather Stations showed that 78% of those polled expressed worries that they could end up as victims of the crackdown.  Rather, the reversal is a direct consequence of the murder of South Korean businessman Jee Ick-joo, whom prosecutors allege antinarcotics officers kidnapped last October and then strangled to death at the PNP’s headquarters at Camp Crame in Manila.  Following Jee’s death, his kidnappers demanded and received P5 million (US$100,233) in ransom from his wife, claiming that he was still alive.

Jee’s murder has proved to be a serious embarrassment for the President, who has often been combative in the face of criticism.  In addition to Duterte’s admission that police were likely using the crackdown as a cover for criminal activity, the President has also apologized to the South Korean government.  This is because, unlike other incidents during the crackdown, which has disproportionately affected poorer communities in the Philippines, according to non-governmental organizations focusing on human rights issues, Jee’s murder has the potential to seriously damage the government’s assertion that the anti-drug campaign would not affect the business environment for foreign investors.  Even though Jee lived and worked in Pampanga, the optics of a foreigner being falsely accused and targeted under the auspices of the crackdown risk undermining the government’s attempts to assuage foreign investors’ concerns over the President’s signature law and order initiative.  However, the decision to shift responsibility for the anti-illegal drugs campaign to the smaller PDEA may afford greater oversight for how the crackdown is implemented.  Also, the shift to rooting out corruption in the PNP could prove beneficial for rule of law and, consequently, the business environment, but only if the government is serious about these efforts.      

Philippine Competition Commission Targets Contractor Licensing Requirements to Open Up Construction Sector
Recent actions by the Philippine Competition Commission (PCC) indicate that it is seeking to help accelerate infrastructure development in the country by targeting the nationality requirement for the licensing of contractors for construction projects.  At the end of last month, PCC Commissioner El Cid R. Butuyan commented that the commission had reached out to the Department of Trade and Industry about possibly revising the requirement.  Butuyan’s comments followed the PCC’s filing of an amicus curiae brief (friend of the court brief) with the Supreme Court of the Philippines last December 19 for a case involving the Manila Water Company, Inc., and the Philippine Contractors Accreditation Board (PCAB).  In the brief, the PCC argues that section 3.1 of the implementing rules and regulations (IRR) for Republic Act 4566, which is also referred to as the Contractor’s License Law, is anti-competitive and should be nullified because it allows for local contractors to seek a license for construction activity over the course of a year while requiring foreign contractors to get a license for each new construction project.  At issue is the difference between a Regular license and a Special license, both of which the PCAB issues.  Domestic contractors are eligible for Regular licenses, which are valid for an entire year.  On the other hand, joint ventures, consortia, and foreign contractors must get a separate Special license for each contract activity, meaning that foreign firms face significantly higher costs than domestic firms when securing licenses from the PCAB.  To support its contention that the “nationality requirement puts a substantial barrier to entry of foreign contractors in the construction industry” and is therefore anti-competitive.  The PCC pointed to PCAB data showing that only 20 out of 1,600 Special licenses issued in 2015 went to foreign firms.  Even worse, only four special licenses were issued to joint ventures and consortia that involved foreign firms over the same period of time.  

The PCC is not the only organization that has singled out the nationality requirement as a hindrance to the entry of foreign firms in the Philippines’ construction sector.  The Joint Foreign Chambers (JFC) have also criticized the requirement and have gone so far as to say that the PCAB has “undermined fair competition” in the Philippine construction sector.  In addition to the different classes of licenses for domestic and foreign firms, the JFC specifically points to the 60-percent Filipino-equity requirement for foreign contractors in the sector as a deterrent for their participation.  

This recent talk of opening up the Philippines’ construction sector comes as the government is looking to spend P847.2 billion (nearly US$17 billion) on infrastructure projects nationwide in 2017 in a bid to jump start what it hopes will be a “golden age of infrastructure development.”  The allocation accounts for approximately 25% of the 2017 national budget, and represents a nearly 14% increase over that in the 2016 budget.  Secretary of Budget and Management Benjamin Diokno has said that the government expects the reformed IRR of Procurement Act 9184, also called the Procurement Law, to help accelerate construction, but until the barriers to foreign entry in the construction sector are addressed the Philippines is likely to continue to have the highest average cost of construction for certain types of projects in ASEAN and suffer from some of the lowest foreign direct investment in the sector.

 
IN THIS UPDATE
 
 
+ RCEP text likely done by April at Asean meeting

National Affairs
Palace: Leftist Cabinet members enjoy Duterte's trust, confidence
Duterte labels CPP-NPA-NDF a terror group
Senate starts debates on emergency powers Tuesday
Peace talks to continue – Palace
CBCP denounces 'reign of terror' in Duterte drug war
The usual suspects: The president of the Philippines admits his war on drugs has been dirty
Sereno reaffirms judiciary’s duty to uphold Charter
Duterte ends ceasefire with NPA rebels
Speaker eyes con-ass by July
After PNP, Duterte bans NBI from drug war
Only select few from AFP to join drug war, Duterte says
IN NUMBERS: The Philippines' 'war on drugs'
US envoy optimistic on new MCC package
Philippines’ Rodrigo Duterte Puts Drug War on Hold
Duterte orders 'cleansing' of PNP, extends drug war again
Rodrigo Duterte Says Drug War Will Go On as Police Plan Purge
Most Pinoys want govt to assert rights over West PH Sea, distrust China and Russia - survey
OPINION: Everybody wants to cha-cha, but will it increase foreign direct investments?
Duterte: The Wartime President
DBM denies ASEAN 2017 bid rules favored one company

Customs
PH to explore FTA with US
Customs rid of erring brokers and importers
BOC’s 2017 performance targets jacked up
Draft PH customs order on export cargo clearance for public review
Philexport wants status quo on zero VAT exemption
BOC opens unit to monitor high-risk shipments
BOC bares latest lineup of importers facing delisting, suspension
Taxing oil in economic zones is illegal
Tobacco smuggling, fake stamps weigh on collections for sin tax
Applications For Transshipment Business Licence In ESSZone Need To Go Through BIMP-EAGA - Roselan

Defense & Security
Duterte taps China vs pirates in Sulu sea
US told: Do not build permanent arms depot
With EDCA intact, DND chief says US military to upgrade bases this year
Singapore, Philippines and US militaries organise multinational disaster relief exercise
Duterte open to joint maritime drills with Russia
Russia: ‘We need new partners in Asia Pacific, including PHL’
Russia offers Philippines arms and close friendship

Economics
Duterte's tax reform: More take-home pay, higher fuel and auto taxes
Tax reform to boost growth – BSP
LEDAC lists major policy directions
Decentralization not a guarantee for growth and development–WB
Economy grows fastest in three years
Philippine economy surges and shrugs off politics — for now
Tax bureau spells out 2017 programs
BusinessWorld | International reserves miss forecast, but deemed sufficient
Philippine year in review 2016
PH growth prospects brighter in 2017 – DOF

Energy
Palace gives suspended mining firms chance to explain
Legal battle looms as gov’t shuts mines
ENVIRONMENTAL CLAMPDOWN: Govt to close half of mines
NGCP study shows feasibility of VisMin grid interconnection
House panel moves to consolidate energy efficiency, conservation bills
‘Mining law needs proper implementation, not repeal’
Energy department suspends Mindanao spot market consultation on proposed rules
Meralco seeks regulatory approval for first solar power supply contracts
Power sector must be aware of disaster-response system - Cusi
50 MW solar power farm in South Cotabato now under negotiations, says  LGU official
Cusi wants NGCP to do pilot project on ‘underground’ power lines
Philippines to get first ocean power plant in San Bernardo Strait
Phl, Japan put up joint crediting mechanism for emissions
Energy demand to outpace production in coming years -- UN ESCAP
Quezon to host offshore natural gas hub
DOE chief’s China trip seen lifting energy ties
Malampaya outage in the Philippines raised to 2170MW
Chinese firm Xidian Holdings to inject $500m in Philippine energy project
Philippines' energy agency gears up for Malampaya shutdown
Alternative funding source for FiT not yet available -- Energy dep’t

Financial Services
Bangko Sentral to strictly monitor virtual currency exchanges
Philippines: Rules outlined for converting insurance mutuals
DoF gives taxpayers 2 yrs to process refunds, VAT credits
Philippines: Microinsurance penetration rate to hit 48% by 2022
6 more Asian banks seek PH entry – BSP
BSP Governor Tetangco: My term ends in July
Who Could Be Next in Line as Duterte's Central Bank Chief?
Philippines: Supreme Court Affirms SEC Guidelines on Compliance with Foreign Equity Restrictions

Food & Agriculture
Gov’t open to partial logging ban
PHL dairy imports up 50.39%–NDA
DA told: Focus on agriculture production to alleviate poverty
Local manufacturers’ group back unitary cigarette tax
Food security looks very different depending on where you are sitting
Sugar industry stakeholders to seek President’s help
Piñol eyes 10-year agriculture road map

Health & Life Sciences
USAID not closing doors on helping PH solve drug menace
Duterte’s Free Birth-Control Order Is Latest Skirmish With Catholic Church
Red Cross helps communities prevent water-borne diseases using surveillance mechanism
‘Income inequality high despite robust economy’
Duterte orders full implementation of modern family planning by 2018
Durterte's war on drugs is fanning the flames of the burgeoning HIV epidemic in the Philippines

ICT
IT-BPM sector expects sustained growth to continue
Philippine outsourcing sector braced for Duterte and Trump effect
PHL set to launch state-of-the-art air-traffic facilities

Infrastructure
BusinessWorld | BMI flags poor PPP environment
P100-B tollroad projects proposed
PCC seeks DTI’s assistance on foreign contractor licensing
Gov’t speeds up spending on infra
Ledac bats for reforms in procurement process | BusinessMirror
Duterte asked to open up construction sector
China and Philippines agree to cooperate on 30 projects worth US$3.7b
Lawmaker seeks change to BOT Law
Growth hinges on infrastructure plan
Philippines Plans New Ro-Ro Terminal
2017- 2021: The Philippines’ Golden Age for infrastructure and investments
P100-B Manila-Subic expressway/railway for President’s approval
Groundwork for MRT 7 officially starts
Proudly Pinoy technology solutions to address traffic woes
SBMA proposes P100-B expressway-railway from Manila to Subic
It's a Go for Manila-Clark Railway Project - BCDA
Bacolod Economic Highway bidding process starts next week
Business interest on Mindanao remains: Malaysian envoy says
Metro Manila flood control, bus rapid transit projects eyed for AIIB financing
Infrastructure investment to boost GDP growth to 7 percent this year–BPI economist
Lawmaker lists 12 top events driving PHL optimism for 2017
Businessmen’s wish list for 2017
Gov’t shortlists Japanese bidders for LRT-1 trains

Manufacturing
Toyota seeks gradual hike in auto excise tax
 
ARTICLE CLIPS
 
 
Regional Affairs

US to continue working productively with Philippines philstar.com 3rd Feb 2017
The United States will continue to work constructively and productively with the Philippines despite persistent human rights concerns under the Duterte administration. “It’s a relationship that we value and what I can say unequivocally is we’re going to continue to work productively with the Philippines where we can,” State Department deputy spokesman Mark Toner told Filipino journalists Wednesday. “I can say the willingness of the US to work constructively with the Philippines remains,” he said. Human rights concerns, he said, can be discussed even while efforts are being made to further strengthen relations between the two countries. The previous Obama administration had “privately” raised its concerns about extrajudicial killings in the country, to which President Duterte responded with profanity directed at the then US leader. The US, Toner emphasized, has a long and enduring security relationship with the Philippines and Washington is seeking always to improve such relationship. “We want to make this relationship even stronger,” he added. The State Department official said the US welcomes Manila’s improving relations with China and even with Moscow, saying Washington does not view the development as a “zero sum game.” He also said the Philippines is not in the US government’s list of countries “of concern,” and that Filipino travelers have nothing to worry about.

Duterte doesn't 'feel like sending' a Philippine envoy to US philstar.com 2nd Feb 2017
President Rodrigo Duterte is not inclined to appoint a Philippine envoy to the US as he assailed Washington anew for supposedly pitting the Philippines against China. “In the US, we have no ambassador. No ambassador will go there. Until now, we do not have an ambassador in the United States. I don’t feel like sending one,” the president said during a convention of the Philippine Association of Water Districts Thursday in Davao City. Protocols chief Ambassador Marciano Paynor was initially considered as Philippine ambassador to the US. His appointment did not push through as he was tasked to help in the preparations for the Association of Southeast Asian Nations meet. Duterte then named The STAR columnist Jose Manuel “Babe” Romualdez for the post but he declined due to health reasons. The Philippines’ relationship had had a rocky relationship with the US since Duterte assumed office last June 30. Duterte has criticized the US government for supposedly meddling with his crackdown on illegal drugs and for supposedly embarrassing him before the international community. Duterte claimed that the US is using the Philippines in its proxy war against China. Duterte said that while he wants to boost ties with China, he would eventually bring up the arbitral ruling on the South China Sea maritime dispute that favored the Philippines. “There will be a time during my term when we will have to talk about the arbitral judgment,” he said.

US envoy seeks to calm Trump fears BusinessWorld 1st Feb 2017
The United States is keeping its strong ties with the Philippines, its new ambassador said, in spite of political “concerns” that have recently put to question the decades-old bilateral relationship. US Ambassador Sung Y. Kim reassured yesterday that the Philippines is still one of the superpower’s strongest allies in Asia as he tried to downplay concerns over the policies of President Donald J. Trump. “In helping two countries, both US and the Philippines, I know there is still great enthusiasm for us to do business here,” he said yesterday in the general membership meeting of the Makati Business Club (MBC). “But recent developments have generated some questions and concerns. While we assure you that the US will continue to work with our partners in the Philippines to address those concerns, at the same time together, we would look for ways to increase foreign investment, reduce trade barriers, and streamline business regulations.” US and Philippine relations have been on the rocks under the administration of President Rodrigo R. Duterte, following criticism from former president Barack Obama who did not approve of Mr. Duterte’s bloody war on the narcotics trade. While Mr. Duterte has warmed up to the White House’s new occupant, uncertainties remain in the fields of bilateral military cooperation, business process outsourcing (BPO) and immigration.

Romualdez declines post as envoy to US philstar.com 1st Feb 2017
For health reasons, The STAR columnist Jose Manuel “Babe” Romualdez had to decline his appointment as ambassador to the United States. “I love my country but I have to take care of my health,” he said. He has cited eye problems. Last December, Romualdez accepted President Duterte’s offer to be the next ambassador to the US. In early January, however, Romualdez had to undergo emergency operation in his left eye due to a detached retina. This condition can be serious if not properly treated and would require special medical attention. Upon the advice of his doctor, Romualdez will have to avoid traveling by air for a minimum of six months as air pressure could permanently damage his eye. Initially appointed Special Envoy to the US, Romualdez has offered to continue working in that capacity. With the new Trump administration, Duterte would have to name a new ambassador sooner than later. It has been seven months since the Philippines had an ambassador in Washington. Industry sources said businessman and Special Envoy to the US Jose E.B. Antonio, a business partner of US President Donald Trump, has expressed interest in the position. The STAR tried to get his comment but was unable to reach him as of press time. Foreign affairs insiders said Malacañang is carefully weighing the matter because of potential conflict of interest if Antonio becomes the ambassador. Antonio is the founder, chairman and CEO of Century Properties Group (CPG), which is a business partner of Trump. The company is behind Trump Tower in Manila, which is licensed under the Trump Organization.                     

PH, Malaysia barter trade reopens – Palace The Manila Times 28th Jan 2017
MalacaÑang on Friday said the cross-border trade between the Philippines and Malaysia will reopen next month, almost a year after it was shut down. Quoting Mindanao Development Authority Secretary Abdul Khayr Alonto, Presidential spokesman Ernesto Abella said that starting on February 1, the ban on barter trade between Sabah, Malaysia and island provinces of the Autonomous Region in Muslim Mindanao (ARMM) will be lifted.

PH files diplomatic protests vs China over West PH Sea Rappler 17th Jan 2017
Foreign Affairs Secretary Perfecto Yasay Jr said he has filed at least 3 diplomatic protests against China following the Asian giant's actions in the West Philippine Sea (South China Sea). The separate diplomatic protests were filed over Chinese activities on Scarborough Shoal and its reported installation of weapons on reefs-turned-islands in the Kalayaan Group of Islands (Spratlys). "In my watch, I do recall having issued 3 or 4," Yasay told Pinky Webb of CNN Philippines on Monday, January 16. It is not clear when these low-key diplomatic protests were filed, however. Yasay was responding to questions about the actions that the country has taken to protect claims in the West Philippine Sea, especially in light of a report by the Center for Strategic and International Studies that Beijing appeared to have installed weapons on islands in the disputed territory. The revelation is a surprise considering Yasay's repeated statements that the Philippines will not protest China's activities in the West Philippine Sea as the country seeks to forge better relations with the military superpower.

Duterte, Abe want rule of law in seas philstar.com 13th Jan 2017
The need to uphold the rule of law in resolving regional conflicts highlighted the discussions yesterday between President Duterte and visiting Japanese Prime Minister Shinzo Abe at Malacañang. Duterte and Abe said their countries are resolved to deepen and expand relations “across a broad range of areas,” including defense and security. The two countries are embroiled in maritime disputes with China, which is claiming almost the entire South China Sea as well as an island in the East China Sea occupied by Tokyo. In his speech after their meeting, Duterte said the Philippines and Japan have shared interests in protecting their territories. “As proven defense and long-time partners, the Philippines and Japan are committed to further expand and deepen our relations across a broad range of areas,” Duterte said. The President also said he had an active discussion with the Prime Minister on enhancing maritime and security cooperation. Abe is the first leader invited by the President to visit the Philippines. Abe has selected Manila and Davao for his first stops in his roadshow visit around the region. Duterte stressed the need for the Philippines to seek Japan’s help in modernizing its Armed Forces in addition to previous agreements. Japan has been helping the Philippines in its modernization program. It delivered a multi-role response vessel to the Philippine Coast Guard last year to help in patrolling the West Philippine Sea. Japan is set to deliver to Manila 10 more 144-ft mid-sized coast guard ships, worth P8.8 billion ($188.52 million). Abe also batted for the need to boost the Regional Comprehensive Economic Partnership. “We agreed that we would continue cooperation toward the conclusion of a quality agreement,” he maintained. Duterte has been vocal about his support for a regional economic partnership while expressing disdain for the US-led Trans-Pacific Partnership (TPP) espoused by outgoing US President Barack Obama.

Abe vows P434-B aid, drug rehab support philstar.com 13th Jan 2017
A one-trillion-yen aid package for the Philippines (P434 billion at yesterday’s exchange rate) is one of the commitments made by visiting Japanese Prime Minister Shinzo Abe during his meeting with President Duterte yesterday. Apart from this, Duterte and Abe witnessed the signing of five agreements on trade, infrastructure and low carbon growth partnership. Japan’s aid package covers a five-year period in official development assistance and private sector investments. Japanese Foreign Press Secretary Yasuhisa Kawamura said Tokyo had provided approximately $20 billion over the past 50 years. Japan is the biggest source of ODA for the Philippines. Duterte, in his remarks at the banquet last night, underscored the importance of Japan as a partner for development of the Philippines. He also reiterated his regard for Japan as a “friend closer than a brother.” “In Tokyo, I said that Japan deserves its own rightful place in the constellation of the Philippines’ friends. Tonight, let me reiterate that Japan is a friend closer than a brother. That means that Japan is a friend unlike any other,” Duterte said. Abe also committed to help President Duterte in his campaign against illegal drugs, which has received strong criticisms abroad for alleged human rights abuses. “Also, we both agreed to work together in pursuing a comprehensive approach in the war against the illegal drug trade,” Duterte said. “As the Philippines pursues its campaign to destroy the illegal drugs apparatus, we welcome the expressed interest of Japan to support measures to address the tremendous social cost of drug addiction, this includes rehabilitation,” Duterte said. In response, Abe said Japan will help in rehabilitation efforts of drug addicts and in provision of treatment programs.

ASEAN host Philippines won't raise ruling vs China Rappler 12th Jan 2017
While hosting the Association of Southeast Asian Nations (ASEAN) Summit this year, the Philippines rejected the prospect of raising Manila's legal victory against Beijing during the regional meeting. "We are not going to raise this issue…because there is really no useful benefit," Philippine Foreign Secretary Perfecto Yasay Jr said in a news conference on Wednesday, January 11. Yasay was referring to the ruling by an arbitral tribunal at the Permanent Court of Arbitration against China's expansive claim over the West Philippine Sea (South China Sea). At the same time, Yasay hailed the Duterte administration's "pragmatic approach" toward the sea dispute. He said one of its positive effects is "the return of our Filipino fishermen to the Scarborough Shoal without the Philippines asking China to let them go back." In Thursday's news conference, Yasay also said ASEAN and China plan to finalize a framework code of conduct (COC) in the South China Sea by mid-2017. The proposed COC is a binding agreement to ensure peace and stability in the South China Sea, parts of which the Philippines claims as the West Philippine Sea. Before the COC is finalized, ASEAN and China adhere to a non-binding Declaration on the Conduct of Parties in the South China Sea, which urges "self-restraint" in the disputed waters. The Philippines' top diplomat explained that the framework COC "is the general agreement, and if there are necessary details that will have to be put there, then that can be a matter that will be discussed by the ASEAN member states."

Abe Pledges Investments, Speedboats to China-Friendly Manila Associated Press 12th Jan 2017
Japanese Prime Minister Shinzo Abe on Thursday pledged $8.7 billion worth of business opportunities and private investments along with speedboats and other counterterrorism equipment to the Philippines, whose president has boosted ties with China. Following talks with President Rodrigo Duterte in Manila, Abe welcomed the Philippine leader's efforts to improve Manila's ties with Beijing "in light of the arbitral award," referring to the Philippines' victory in an arbitration ruling declaring China's claims to the South China Sea invalid. China has refused to recognize the July 12 arbitration decision and has warned the United States and other countries not involved in the territorial row not to meddle in the disputes, which Beijing wants to be settled through one-on-one negotiations with other rival claimant countries like the Philippines. Abe, however, said "the issue of the South China Sea is linked directly to regional peace and stability and is a concern to the entire international community." His two-day visit to Manila aims to further solidify relations with the Philippines at a time when Duterte is cozying up to China and Russia while taking a hostile stance toward Tokyo's main ally, the United States. Japan is among the top trading partners of the Philippines and one of its largest aid providers. Duterte visited Japan in October when he and Abe agreed to cooperate in promoting regional peace and stability and acknowledged the importance of their alliances with Washington. A survey released Thursday by independent pollster Pulse Asia shows most Filipinos trust Japan and the United States while a majority distrust China and Russia. The survey found 76 percent of adult Filipinos trust the U.S. while 70 percent expressed trust for Japan. Sixty-one percent said they lacked trust in China and 58 percent distrust Russia. The survey of 1,200 adult respondents nationwide between Dec. 6 to 11 had a margin of error of plus or minus 3 percent

Rody invites pal Trump to Asean summit philstar.com 11th Jan 2017
President Duterte sent an official invitation to incoming United States President Donald Trump to attend the Association of Southeast Asian Nations (ASEAN) summit to be held in the country in November. Presidential Communications Office Secretary Martin Andanar said Trump has not committed yet to visit the country for the ASEAN summit. Trump will take oath on Jan. 20. Duterte telephoned Trump last year to congratulate him for winning the US presidential elections. Meanwhile, the military and the Department of the Interior and Local Government (DILG) are preparing for the launching of the ASEAN summit in Davao City on Jan. 15.

DFA: South China Sea code of conduct an ASEAN 2017 priority philstar.com 5th Jan 2017
The South China Sea maritime row and a code of conduct for claimants would be among the priority topics during the Association of Southeast Asian Nations (ASEAN) meet to be hosted by the Philippines this year, a foreign affairs official said Thursday. Foreign Affairs Undersecretary Enrique Manalo said the goal is for the ASEAN and China to come up with a framework for the Code of Conduct for the South China Sea this year. “The issue of the South China Sea, of course, is in the agenda of the ASEAN. In fact, we will be undertaking ongoing work throughout the year focusing on the unfinished Code of Conduct of the South China Sea and the Declaration of the Code of Conduct and the principles of the Code of Conduct,” Manalo said in a press briefing in Malacañan. “One of our main goals this year in cooperation with China, not only Philippines but ASEAN and China, is to try and arrive at a framework for the Code of Conduct for the South China Sea by the end of the year. That will be one of our main priorities,” he added. The relationship between Manila and Beijing was strained after the Philippine government under then President Benigno Aquino III challenged China’s expansive maritime claim before an international court Last year, a Hague-based arbitral court ruled in favor of the Philippines and voided China’s maritime claim, which covers virtually the entire South China Sea. China has refused to recognize the decision, calling it “a mere piece of paper” and “illegal since day one.” President Rodrigo Duterte has vowed to seek closer ties with China and has expressed readiness to momentarily set aside the arbitral ruling. Manalo said the Hague ruling that invalidated China’s maritime claim need not be tackled during the ASEAN meet. Manalo noted that the whole purpose of the Code of Conduct is to manage disputes in a peaceful way and non-confrontational way.

RCEP text likely done by April at Asean meeting BusinessMirror 5th Jan 2017
ASEAN member-states will try to complete the text of the Regional Comprehensive Economic Partnership (RCEP)—the counterpart of the US-initiated Trans-Pacific Partnership—this year at the occasion of the Philippines’s hosting of the bloc’s meeting, Trade Secretary Ramon M. Lopez said on Thursday. Lopez added that this will be the focus of Asean leaders when they convene in Manila in April. “The main initiative we’ll try to push in the Asean leaders’ meeting is concluding the RCEP,” Lopez told reporters on Thursday. At a meeting of Asean trade ministers last November, the trade chief disclosed that options have been “narrowed” in terms of negotiating a common set of numbers in terms of services and goods to be included in the proposed free-trade agreement (FTA). According to a joint statement released after the meeting, the 16 countries have agreed to negotiate the RCEP as a single undertaking, instead of a piecemeal approach, to ensure both goods and services will be prioritized, upon the request of India. 

National Affairs

Palace: Leftist Cabinet members enjoy Duterte's trust, confidence philstar.com 8th Feb 2017
Malacañang on Wednesday maintained that left-leaning Cabinet members continue to enjoy President Rodrigo Duterte's trust and confidence as his alter egos. Presidential spokesperson Ernesto Abella welcomed the decision of Social Welfare Secretary Judy Taguiwalo, Agrarian Reform Secretary Rafael Mariano and National Anti-Poverty Commission lead convenor Liza Maza to stay in the Cabinet despite the cancellation of peace talks with the Communist Party of the Philippines-New People's Army-National Democratic Front. "The President chose them as his alter egos because he believes in their capacity to serve and deliver sustainable basic social services to the Filipino people," Abella said in a statement. The leftist Cabinet members, however, urged Duterte to resume the peace negotiations with the communist group. "After 15 years of impasse, the peace negotiations have made historic strides on many fronts. This time, by pursuing peace, and through the political will President Duterte, the talks have been productive," Mariano, Taguiwalo and Maza said in a joint statement. Duterte terminated the peace negotiations with the CPP-NPA-NDF after labeling the communist rebels as terrorists. He had also ordered the arrest of jailed leftist leaders who were temporarily released to join the formal talks in Oslo, Norway and Rome, Italy.

Duterte labels CPP-NPA-NDF a terror group philstar.com 6th Feb 2017
 A day after terminating the peace talks, President Duterte labeled communist rebels as terrorists and ordered the arrest of jailed leftist leaders who were allowed to join the negotiations. Duterte said the rebels committed atrocities despite the goodwill gestures displayed by the government. The NDF, the communist group’s political arm, represents the CPP and its armed wing the NPA in the peace talks. Duterte disclosed that the government had to talk to the judiciary to facilitate the release of rebel leaders who are part of the communist negotiating panel. With the peace talks now terminated, Duterte said security forces are ready for any rebel offensive. The government, however, is ready to accept NPA members who will surrender to live peaceful lives. On Saturday, Duterte announced that he is scrapping the peace talks with communist rebels and instructed government negotiators to “fold up the tents and come home.” He made the statement after the government and the communists lifted their respective unilateral ceasefires following a disagreement over the NDF’s demand to free hundreds of people whom it claims to be political prisoners. Duterte has refused to yield to the demand, which he described as tantamount to granting amnesty. The government has so far freed 23 rebel leaders and has allowed some ranking NPA members to join the peace talks. Duterte said the peace talks would remain canceled “unless there is a compelling reason that will benefit the interest of the nation.”

Senate starts debates on emergency powers Tuesday philstar.com 6th Feb 2017
The Senate will begin interpellation Tuesday for the proposed emergency powers for President Rodrigo Duterte. “We would start the plenary debates for the emergency powers so that we will finish and approve the bill at the soonest,” Sen. Grace Poe, chair of the Senate Committee on Public Services, said Monday. Poe expressed hope that the emergency powers would be “part of the solution” to the country’s traffic woes and other transport problems. Under Committee Report No. 24 or “An Act Compelling the Government to Address the Transportation and Congestion Crisis Through the Grant of Emergency Powers to the President,” Poe noted that alternative methods could be used to speed up implementation of key transportation projects. However, Poe said that if emergency powers would be approved, it would be valid and effective until the next adjournment of Congress or in June 2019—unless sooner withdrawn. The senator, meanwhile, assured that the Senate would work double time to ensure that the emergency powers will significantly ease commuters’ burdens. She also reminded the Department of Transportation (DOTr) that “emergency powers is not a gift to the administration but a challenge that compels the executive to move.”

Peace talks to continue – Palace Manila Bulletin News 5th Feb 2017
The peace talks between the government and the local communist group will continue despite both parties’ announcement of the termination of their respective unilateral ceasefire declarations, Malacañang said Friday night. With this development, the Armed Forces of the Philippines (AFP) assured yesterday that it has more than sufficient forces to meet the rebel group’s challenge. Presidential spokesperson Ernesto Abella said there was an apparent disconnect between the rebel leaders negotiating with the government and the leaders on the ground, leading to the lifting of the ceasefire. Earlier Friday, President Duterte lifted the unilateral ceasefire the government declared with Communist Party of the Philippines-New People’s Army-National Democratic Front (CPP-NPA-NDF). The termination came two days after the rebel group announced that they will withdraw their unilateral ceasefire effective February 10. But even while the rebel ceasefire is still in effect, NPA fighters staged attacks on government forces, the latest of which was the killing of three soldiers in an ambush last February 1. This prompted Duterte to lift the government ceasefire. Meanwhile, AFP Chief of Staff Gen. Eduardo Año said there is no need to call in the military reserves yet despite the termination of the ceasefire. Año placed the number of NPA combatants in the entire country at 3,700, half of whom are operating in Eastern Mindanao. He said this is the reason the AFP is focusing on community development programs in the countryside, especially those with Indigenous Peoples, so that the rebels would be denied additional recruits.

CBCP denounces 'reign of terror' in Duterte drug war Rappler 5th Feb 2017
The Catholic Bishops' Conference of the Philippines (CBCP) on Sunday, February 5, denounced the "reign of terror" in poor communities as President Rodrigo Duterte's war on drugs kills at least 7,000 people in the Philippines. "We, your bishops, are deeply concerned due to many deaths and killings in the campaign against prohibited drugs," CBCP president Lingayen-Dagupan Archbishop Socrates Villegas said in their strongest statement yet against the drug-related killings in the Philippines. "An additional cause of concern is the reign of terror in many places of the poor. Many are killed not because of drugs. Those who kill them are not brought to account," Villegas added on behalf of the CBCP. The war on drugs has killed at least 7,080 people as of January 31, or 7 months since Duterte took office. Up to 4,000 of them died in extrajudicial or vigilante-style killings. Many of them come from poor communities. The CBCP statement echoed the sentiments of many Filipinos who, according to Amnesty International adviser Matt Wells, "repeatedly described the 'war on drugs' as a war against the poor." While released only on Sunday, the CBCP statement was signed by Villegas on January 30. The CBCP issued this statement after its plenary assembly, a twice-a-year meeting where the Philippines' more than 80 bishops discuss pressing issues concerning the Catholic Church and Philippine society. The CBCP directed all priests in the Philippines to read this statement in all Sunday Masses on February 5.

The usual suspects: The president of the Philippines admits his war on drugs has been dirty The Economist 4th Feb 2017
Even Rodrigo Duterte, who initiated a bloodthirsty campaign against drug-dealers and drug-users on becoming president of the Philippines last year, and who brooks almost no criticism of his war on drugs, had to admit that the police had gone too far. Policemen from the national drug squad, including senior officers, falsely accused a South Korean businessman of involvement in narcotics. They hauled him off to the national police headquarters in Manila, demanded ransom from his family, pocketed the money and then strangled him, burning his body and flushing the ashes down a lavatory. After the National Bureau of Investigation, a separate agency, revealed all this, Mr Duterte ordered a pause in the campaign to give the police time to purge their ranks. He now wants the Philippine Drug Enforcement Agency, another independent force, to lead the war, which he says will continue until his term ends in 2022.

Sereno reaffirms judiciary’s duty to uphold Charter philstar.com 3rd Feb 2017
The Supreme Court (SC) has reaffirmed its commitment to defend the 1987 Constitution amid moves by allies of President Duterte to have it amended. In a statement on the 30th anniversary of the ratification of the Constitution yesterday, Chief Justice Ma. Lourdes Sereno said the judiciary would religiously perform its duties mandated in the Charter. Some of the framers of the 1987 Charter have also expressed their opposition to moves to have the Constitution amended. The SC statement, signed only by Sereno, was released just as allies of Duterte in the House of Representatives were pushing for Charter change to pave the way for a shift to federalism as promised by the President during the campaign. The House committee on constitutional amendments has passed a resolution calling for Congress to convene into a constituent assembly. It has also formed a technical working group to consolidate related resolutions in the chamber. Speaker Pantaleon Alvarez said they target the last three years of the Duterte administration as transition period toward federalism.

Duterte ends ceasefire with NPA rebels The Manila Times 3rd Feb 2017
Philippine President Rodrigo Duterte on Friday lifted a ceasefire with communist rebels, jeopardizing a peace process he launched last year to end a decades-long insurgency. The move comes two days after the Communist Party of the Philippines announced the end of its own self-declared ceasefire and claims by the military that Maoist fighters had killed six soldiers this week. The communist insurgency in the Philippines, which began in 1968, is one of the longest running in the world and has claimed an estimated 30,000 lives, according to the military. Duterte did not say whether the fourth round of peace negotiations set to start in the Norwegian capital Oslo in April would be stopped. Talks in Italy last week ended with no deal on a permanent cessation of fighting. A self-styled socialist, Duterte said he was disappointed by the ceasefire decision because his administration had provided a “golden opportunity” to a reach a peace deal with the rebels. The two sides separately declared ceasefires in August, and the informal arrangement largely held as they continued discussions in Rome. But the Communist Party said Wednesday it was ending its ceasefire and accused police and soldiers of human rights abuses in rebel-influenced rural villages. In his speech Duterte criticized the rebels for making “unreasonable demands” including asking for the release of 400 jailed guerrillas before agreeing to a bilateral ceasefire. The communists said Wednesday the end of the ceasefire did not mean they were pulling out of peace negotiations, adding it was possible to “talk while fighting.”

Speaker eyes con-ass by July philstar.com 3rd Feb 2017
If he could have his way, Speaker Pantaleon Alvarez wants senators and congressmen to convene as a constituent assembly (con-ass) in July to work on a new Constitution. He said lawmakers would rewrite the Charter to shift the nation to a federal system, as advocated by President Duterte, and to relax its restrictive economic provisions. Alvarez said he expected Duterte to soon appoint members of the consultative commission on Charter change, which the Chief Executive created in December. Alvarez said the commission should submit its report to the President and Congress in six months. The Speaker has a three-year timeline for shifting the nation to the federal system. He wants the new Charter to be submitted to the people in a plebiscite that would be held together with the midterm elections in May 2019. Duterte has expressed preference for a federal system with a strong president and a prime minister who assists the chief executive in running the government. Negros Occidental Rep. Alfredo Benitez has proposed a mix of federal-presidential setup with a two-chamber Congress. On the other hand, Cagayan de Oro City Rep. Maximo Rodriguez Jr. wants a pure federal-parliamentary form with a unicameral or one-chamber parliament. Benitez, Rodriguez, Quezon City Rep. Feliciano Belmonte Jr. and several House members are pushing for the relaxation of the Constitution’s economic provisions to allow 100-percent foreign ownership of land and businesses.

After PNP, Duterte bans NBI from drug war philstar.com 2nd Feb 2017
President Rodrigo Duterte on Thursday prohibited another key law enforcement agency from carrying out his deadly anti-drug crackdown after banning the Philippine National Police (PNP) from the campaign because of corruption, and suggested he will use the military instead. Duterte said his decision to exclude the National Bureau of Investigation (NBI) from the crackdown left him with fewer enforcers and increased the pressure for him to tap the military, which has been busy battling Muslim extremist groups on three battlefronts in Mindanao. "We can't use the police because it is corrupt. I cannot trust now the NBI because it is corrupt," Duterte said in a speech in his southern hometown, Davao City. "I have limited warm bodies, I still have so many wars to fight." Human rights groups expressed alarm at the president's statement, fearing that the deployment of counterinsurgency forces may worsen rights violations in a campaign that has already left thousands of drug suspects dead, including many in suspected extrajudicial killings. The 170,000-strong national police were barred from carrying out raids and making drug-related arrests after a group of officers used the crackdown as a cover to kidnap and kill a South Korean businessman for money in a still-unraveling scandal. That left the much-smaller Philippine Drug Enforcement Agency to wage the crackdown, which began after Duterte took office in June.

Only select few from AFP to join drug war, Duterte says philstar.com 1st Feb 2017
Only a “select few” from the military would be involved in the anti-drug war, President Rodrigo Duterte said, as he criticized some policemen for supposedly using the narcotics crackdown to commit abuses. Duterte said the Philippine National Police (PNP) has “lost its power” to enforce laws on illegal drugs and the only ones who can conduct such operations are Philippine Drug Enforcement Agency (PDEA) operatives. Duterte also lambasted some policemen who are involved in “pangikil” or extortion. On Tuesday, Duterte directed the military to arrest policemen involved in illegal drugs as he purges the PNP of scalawags. Duterte admitted that his anti-drug campaign can be used by some policemen to commit wrongdoings. PNP has suspended its anti-drug operations or Oplan Tokhang amid the fallout over the death of South Korean businessman Jee Ick-joo in the hands of members of the Anti-Illegal Drugs Group (AIDG). PNP chief Director General Ronald Dela Rosa admitted that the murder of Jee has affected the credibility of Oplan Tokhang, which critics claimed was used to extort money. The incident prompted Duterte to order the abolition of all anti-drug units of the PNP. He also admitted that the culture of corruption among the police is “matindi” or serious.

IN NUMBERS: The Philippines' 'war on drugs' Rappler 31st Jan 2017
Exasperated by the illegal drugs menace in the country, President Rodrigo Duterte has waged an all-out campaign against it since he assumed office. From July 1, 2016 to January 31, 2017, there have been over 7,000 deaths linked to the "war on drugs" – both from legitimate police operations and vigilante-style or unexplained killings (including deaths under investigation). Here are the latest numbers based on revised data from the Philippine National Police (PNP). This page will be updated regularly. The PNP calls its campaign against illegal drugs "Oplan Double Barrel." (READ: Warning to drug dealers: PNP has 'double barrel' plan) Meanwhile, Project "TokHang" – a contraction of "toktok" and "hangyo" (Visayan words for "knock" and "request" respectively) – refers to the strategy of the police nationwide to go house-to-house in their jurisdictions and convince known drug pushers and users to surrender and change their ways. On January 30, PNP chief Ronald dela Rosa ordered a stop to police-initiated anti-illegal drug operations, thereby ending Oplan Tokhang and related activities like buy-busts and the service of search warrants. This is in accordance with President Duterte's pronouncement to "cleanse the police ranks" first after the PNP came under fire for the killing of South Korean businessman Jee Ick Joo in October 2016.

US envoy optimistic on new MCC package Manila Bulletin Business 31st Jan 2017
US Ambassador to the Philippines Sung Y. Kim yesterday expressed optimism that the Millennium Challenge Corp. (MCC) will approve the Second Compact package for the Philippines even as he assured that nothing has changed of the American policies in the country and the region. Kim, a keynote speaker at the General Membership Meeting of the Makati Business Club, said during the open forum portion that since the First Compact was managed and implemented successfully, he expects a positive decision from the MCC Board for the Second Compact. The MCC approved the $434-million aid to the Philippines in 2010 to fund infrastructure projects in the countryside and capacity-building to ensure good governance among government agencies. Kim, who just celebrated his second month as US Ambassador to the Philippines today, expressed this optimism even as he clarified some reports saying that the MCC already rejected the Second Compact MCC package for the Philippines. “They (MCC) decided to defer a decision on future projects for the Philippines, just deferred not rejected,” he said noting that deferment of decision is normal because of the immensity, complexity of the MCC projects and scale.

Philippines’ Rodrigo Duterte Puts Drug War on Hold The Wall Street Journal 30th Jan 2017
Philippine President Rodrigo Duterte ordered police to suspend the war on drugs after rogue officers kidnapped and killed a South Korean businessman, adding to the criticism swirling around the country’s bloody antinarcotics campaign. Police have killed over 2,000 people in the purge since Mr. Duterte took office in June, with an additional 5,000 killed by suspected vigilantes in a spasm of violence that has transfixed the nation. Speaking at a late-night media briefing Sunday, Mr. Duterte said he had to reorganize the way the police operate. National police chief Gen. Ronald dela Rosa said at a news conference Monday that authority for pursuing drugs cases would be handed over to the Philippine Drug Enforcement Agency until a purge of police ranks has been completed.

Duterte orders 'cleansing' of PNP, extends drug war again Rappler 30th Jan 2017
After the murder of a South Korean that President Rodrigo Duterte admits "embarrassed" him, he has ordered the "cleansing" of the Philippine National Police (PNP). During the joint command conference with police and the military on Sunday, Duterte ordered the dissolution of all anti-drug units in the police force. "As directed by the President, we agree to dissolve all anti-drug units at all levels including [the] Anti-Illegal Drugs Group," said PNP chief Director General Ronald dela Rosa in the same press conference. Duterte also instructed Dela Rosa to create a list of cops with criminal records and those who were reinstated after facing cases. These tainted personnel will be sent to the front lines of the government's offensive against terrorists in Mindanao. Duterte intends to create a "narcotics command" to weed out police involved in the drug trade. The new command will be under the Philippine Drug Enforcement Agency (PDEA). Given the overhaul of the PNP's implementation of the drug war, Duterte has decided to extend yet again his deadline for "suppressing" the country's drug problem. "The drug war I will extend to the last day of my term. Wala na 'yung March [deadline] (No more March deadline)," he said. March had been the latest deadline of his drug war after he had first extended it in September 2016.

Rodrigo Duterte Says Drug War Will Go On as Police Plan Purge The New York Times 30th Jan 2017
The top police official in the Philippines said Monday that he would suspend police participation in the nation’s bloody drug war while he conducted a purge of rogue officers. But President Rodrigo Duterte said earlier on Monday that the crackdown would continue until “the last day of my term,” raising questions about whether a suspension would do anything to halt the violence. At least 3,600 people, and possibly thousands more, have been killed by the police or by vigilantes since Mr. Duterte came to power. Human rights groups have said the extrajudicial killings of drug dealers and users may have been ordered by the police, a charge officials have denied. The head of the Philippine National Police, Ronald dela Rosa, said at a news conference on Monday that the Drug Enforcement Agency would instead have the authority to pursue drug cases. He was responding to criticism after a South Korean businessman was strangled at Police Headquarters last year by officers who later extorted ransom money from his family under the pretense that he was alive.

Most Pinoys want govt to assert rights over West PH Sea, distrust China and Russia - survey InterAksyon.com 27th Jan 2017
Most Filipinos believe the government should assert its rights over the West Philippine Sea, in the same way many of them do not trust either China or Russia. On the other hand, traditional allies United States and Japan still enjoy a lot of trust from Filipinos. This is according to a Pulse Asia survey conducted from December 6 to 11, 2016 among 1,200 adult respondents across the country. It has a ± 3 margin of error. The results of the survey showed that 76 percent of respondents trust ("a great deal" and "a fair amount") the US, and 70 percent trust Japan, with only 38 percent saying they trust China and Russia. Also, 74 percent said they trust the United Nations. However, only six percent of the respondents think foreign policy is an urgent concern, considering it one of the issues "malayo sa bituka (far from the gut)," Pulse Asia Director for Research Ana Maria Tabunda told a press briefing on Friday at the Fairmont Hotel in Makati City. The following were considered the three most urgent concerns: "Improving/increasing the pay of workers" (45 percent); "controlling inflation" (34 percent); and a tie between "reducing the poverty of many Filipinos" and "fighting criminality" (22 percent). But when asked if they agreed or disagreed with the statement, "The Philippine government should assert its right on the West Philippine Sea as stipulated in the decision of the Permanent Court of Arbitration," 84 percent agreed; 12 percent "may agree or may disagree;" three percent disagreed; and one percent didn't know.

OPINION: Everybody wants to cha-cha, but will it increase foreign direct investments? PAMPUBLIKO 27th Jan 2017
This opinion piece draws from the report and findings of the May 2015 AIM Policy Center working paper, “Economic Charter Change: Examining the Pros and Cons” by Ronald U. Mendoza and Monica M. Melchor. On June 20, President-elect Rodrigo R. Duterte released his proposed 10-Point Socioeconomic Agenda, which aims to address issues in sustainability, tax, infrastructure, business operations, human capital development, and health. Notably, the third point calls to relax constitutional restrictions on foreign ownership in order to attract more foreign direct investments (FDI). Yet, the proposed bill on easing foreign ownership failed to pass in the 16th Congress. There is strong evidence that lifting foreign investments restrictions could improve FDI inflows into the Philippines, particularly in the areas restricted in the Philippine Constitution. Nevertheless, openness to foreign ownership is a necessary but insufficient condition for attracting foreign investment.20 Mendoza and Melchor note that “easing restrictions on foreign ownership is necessary to encourage FDI and solidify the economic gains experienced in recent years, international experience and evidence suggests that it is not a silver bullet—other reforms need to be undertaken to ensure that the rapid economic growth and expansion is sustained." Lack of infrastructure and rampant corruption are just two of the barriers preventing more foreign investment in the Philippines, and they should be addressed as part of a broader drive to attract and facilitate business expansion in the Philippines.

Duterte: The Wartime President Rappler 3rd Jan 2017
President Rodrigo Duterte sits down with Rappler Executive Editor Maria Ressa for a one-on-one interview in the Malacañang Palace on Thursday, December 29. Just a little over a year ago,in October 2015, when he was still a Davao City mayor fending off rumors that he would seek the presidency, Duterte sat down with Rappler. At the time, he had already given two press conferences saying hewould not run. Fast forward to December 2016: Duterte holds the fort in Malacañang, making waves as one of the country's most controversial and popular leaders after just 7 months in office. He promised change - and that has happened, powered by the justified anger of the marginalized, overturning the status quo and old power structures. During this time, he has made good on pronouncements he made during the first Rappler interview. He warned of a "bloody" presidency. Today, the death toll of suspected drug personalities, both in and outside police operations, continues to rise. Duterte now faces the challenge of the 3 wars he has declared: against drugs, against corruption, and against government ineptitude. Has he lived up to his promises? Has the presidency changed him? What can the country expect in the next few years with him as leader?

DBM denies ASEAN 2017 bid rules favored one company philstar.com 3rd Jan 2017
The government complied with bidding procedures when it awarded a deal to manage events for the Philippines’ hosting of this year’s Association of Southeast Asian Nations (ASEAN) summit, Budget Secretary Benjamin Diokno said Tuesday. A Vera Files report claimed that the government had “tailor-made” the criteria for bidders of the P2.8 billion events management contract to favor StageCraft International, a firm headed by a certain Francisco Zabala. StageCraft, the only company that submitted a bid, offered to undertake the events management for P1 billion. Events Organizer Network Inc. (EON) has asked the budget department to declare a failure of bidding, saying the process only favored one bidder and therefore disadvantageous to the government. EON also claimed that the Budget department violated the law when it treated the contract as “goods” rather than “services,” which requires a longer process. Diokno denied that the process had irregularities and was changed to favor StageCraft. He said since the ASEAN would be held this year, the government has to “act with dispatch.” He said a bidding is not necessarily a failure even if only one party submitted an offer.

Customs

PH to explore FTA with US Manila Bulletin Business 5th Feb 2017
The Philippines will explore a bilateral free trade agreement with the US even as it will prioritize completion and implementation of existing and ongoing trade deals. Trade and Industry Secretary Ramon M. Lopez said the government will pursue free trade agreement option with the US in light of the Trump administration’s preference for bilateral FTAs instead of regional trade grouping arrangement.

Customs rid of erring brokers and importers The Manila Times 13th Jan 2017
The Bureau of Customs (BoC) has started cleansing its list of more than 11,000 accredited importers and customs brokers of misfits and those who have repeatedly violated existing laws and the bureau’s policies and procedures as part of its continuing reform efforts. Customs Commissioner Nicanor Faeldon on Friday ordered the suspension of the accreditation of an initial 100 plus Customs importers and brokers who are facing charges for violation of the Customs and Tariff Code of the Philippines, including misdeclaration and undervaluation, among other forms of technical smuggling for the July to December 2016 period only.

BOC’s 2017 performance targets jacked up Port Calls Asia 8th Jan 2017
The Philippine Bureau of Customs (BOC) has to meet higher performance targets this year amid a 2017 budget that is 45% bigger at P3.82 billion from the previous year’s P2.63 billion. Many of the customs agency’s major final outputs and performance indicators for this year have increased significantly from 2016 levels. However, some targets remain unchanged, including clearing all imported goods within 10 days of the filing of import declaration and having a high percentage of customers whose goods are cleared rating its service as “good or better.”

Draft PH customs order on export cargo clearance for public review Port Calls Asia 8th Jan 2017
The draft customs administrative order (CAO) that implements provisions of the Philippine Customs Modernization and Tariff Act (CMTA) governing export cargo clearance and issuance of the Certificate of Origin (CO) has been released. The draft orderwhich carries out relevant sections and provisions of Republic Act No. 10863, or the CMTA, is up for public consultation on January 12, also the deadline for submission of position papers from affected sectors.

Philexport wants status quo on zero VAT exemption philstar.com 5th Feb 2017
Local exporters are bucking the government’s proposal to lift the zero value added tax (VAT) exemption to indirect exporters, saying such a move will hurt the entire export industry. The Philippine Exporters Confederation Inc. (Philexport) is petitioning for a status quo on the zero VAT exemption, which currently applies to both indirect and direct exporters, even as the Department of Finance (DOF) proposes to retain the zero rating only for direct exporters. While it supports the move to reform Philippine tax policies and administration for greater compliance and higher collection, the Philippine Exporters Confederation Inc. (Philexport) said it does not agree with the proposal to remove the zero VAT exemption for indirect exporters as part of the government’s action plan to push for accelerated and inclusive tax reforms. Indirect exporters supply materials or services to direct exporters. The Finance Department has proposed to retain the zero rating only for direct exporters. Taking away the zero VAT rating for indirect exporters would hurt the entire export community, Philexport said in a position paper.

BOC opens unit to monitor high-risk shipments Manila Bulletin 2nd Feb 2017
In the fight against terror, the Bureau of Customs (BOC) may now monitor and prevent illegal entry of weapons of mass destruction (WMD) in the country’s ports with the opening of its own Container Control Unit (CCU). “Terrorists can't hurt if they don’t have weapons so this project aims to control proliferation, smuggling of any [unauthorized] weapons into the country,” BOC Commissioner Nicanor Faeldon told reporters after the opening ceremony of CCU. Faeldon noted how the new system will provide the BOC a “specific target of probable high-risk containers” filled with WMDs and other contraband items entering the ports.

BOC bares latest lineup of importers facing delisting, suspension Port Calls Asia 2nd Feb 2017
The Philippine Bureau of Customs (BOC) has updated its list of importers and customs brokers that are under investigation, have show cause orders, or are prohibited from reactivating their accreditation following government seizure of their shipments.

Taxing oil in economic zones is illegal BusinessMirror 1st Feb 2017
Smuggling of petroleum products has been rampant in the last couple of years. The value-added tax (VAT) and excise-tax exemptions of free-port and economic zones (FEZs) are being abused by enterprising individuals. To curtail this problem, the Bureau of Internal Revenue in 2012 required the payment of VAT and excise tax on the importation of petroleum coming directly from abroad and brought into the Philippines, including FEZs, by issuing Revenue Regulation (RR) 2-2012. ... This government policy was opposed by the FEZ locators, and the Supreme Court (SC) has sided with them. RR 2-2012 was recently struck down as illegal and unconstitutional (GR 210588, November 29, 2016).

Tobacco smuggling, fake stamps weigh on collections for sin tax BusinessWorld 1st Feb 2017
Smuggling and counterfeit tobacco tax stamps reduced the Bureau of Internal Revenue’s (BIR) revenue tobacco excise tax in 2016, according to a senior BIR official, citing preliminary data. The BIR collected P163.5 billion in excise tax for 2016, reported BIR Deputy Commissioner Nestor S. Valeroso during a Senate Ways and Means hearing yesterday. The bulk of this total, or P91.6 billion, was collected from the sin tax on cigarettes. The collections from cigarettes are lower than the P99.5 billion in 2015. Total excise tax collections for 2015 amounted to P158.3 billion. Mr. Valeroso told reporters on the sidelines of the hearing that the collections for 2016 still need to be reconciled with other data, but illicit trade and fake tax stamps has put an impact in losses in their collection. On the other hand, Senator Juan Edgardo M. Angara, chair of the Senate Ways and Means Committee, attributed this loss mainly to the deterrent effect of the sin tax law on cigarette consumption. “It’s because every year the tax [on cigarettes] gets higher, so people are smoking less,” Mr. Angara told reporters before the plenary session yesterday. “It’s effective from a health standpoint but from a revenue standpoint, the government is losing [revenue],” he added. “If we raise the tax, revenue collection might fall further, and that’s what we use to fund Philhealth and universal health care premiums.”

Applications For Transshipment Business Licence In ESSZone Need To Go Through BIMP-EAGA - Roselan Bernama 26th Jan 2017
The application process for transshipment licence or ship to ship transfer from Sabah to the Philippines would require the recommendation of the East ASEAN Growth Area (BIMP-EAGA) which is made up of Brunei, Indonesia, Malaysia and the Philippines. BIMP-EAGA chairman Datuk Roselan Johar Mohamed said the application for business licence was opened following the Sabah state government's decision to allow the transshipment business activities with the Philippines effective Feb 1 after it was suspended since April last year.

Defense & Security

Duterte taps China vs pirates in Sulu sea philstar.com 1st Feb 2017
In a bid to stop the expansion of extremism and piracy in the southern seas, President Duterte has requested China to patrol the areas in international waters leading to Malacca Strait and the Sulu Sea. “I also asked China if they can patrol the international waters without necessarily intruding into the territorial waters of the country. We would be glad if we have their presence,” Duterte said in a speech before newly promoted generals led by Armed Forces of the Philippines chief Gen. Eduardo Año at Malacañang last night. This developed as a special emissary of the Indonesian government flew in Monday night to seek clarification on a kidnapping incident. Duterte said he told the top Indonesian official that the Philippines and Indonesia have agreed to address the security concerns in the high seas bordering the two countries, as well as Malaysia. He was referring to the trilateral maritime agreement between the Philippines, Malaysia and Indonesia on joint air patrols in the problem areas. It was at this juncture that Duterte revealed that he has asked for China’s help if Philippine forces, with their meager resources, are unable to address the problem. Duterte expressed concern that the piracy and kidnapping incidents in Sulu Sea and Malacca Strait have impeded trade operations in the area.  

US told: Do not build permanent arms depot BusinessMirror 30th Jan 2017
President Duterte has advised the United States not to build a “permanent” arms depot in the country. “I am serving notice to the armed forces of the United States: Do not do it. I will not allow it,” Duterte said late Sunday night. He said the Visiting Forces Agreement  between the Philippines and the US prohibits the construction of permanent facilities. The President warned that he may ultimately abrogate the treaty altogether “since it is an executive order.” Duterte said the US is unloading arms in the Philippines and it may put the country in “extreme danger,” amid the maritime dispute in South China Sea. “The missiles of China are pointed at the American military assets. Their [US] depot would serve as their supply line. The Philippines will be hit first. They will hit Cagayan, Palawan and Basa [Air Base, Pampanga],” Duterte said. He added that the US is egging the Philippines to use its victory in the international arbitration court, which favored the Philippines’s arbitration case filed against China’s massive claim of South China Sea. “The US is referring [to] it [South China Sea] as international seas. It’s not even closer to what we’re claiming that is ours, which is validated by the award,” Duterte said. Duterte added that  he does not want to fight China. Few days ago, Defense Secretary Delfin N. Lorenzana claimed that the US has approved the construction of barracks, warehouses and runways inside the military camps in the Philippines. The Enhanced Defense Cooperation Agreement (Edca), which was signed in 2014, allows the US to deploy US troops, equipment and supplies for maritime security and humanitarian operations in identified military camps in the Philippines.

With EDCA intact, DND chief says US military to upgrade bases this year InterAksyon.com 27th Jan 2017
The United States will upgrade and build facilities on Philippine military bases this year, Defense Secretary Delfin Lorenzana said on Thursday, bolstering an alliance strained by President Rodrigo Duterte's opposition to a US troop presence. The Pentagon gave the green light to start the work as part of the Enhanced Defense Cooperation Agreement, a 2014 pact that Duterte has threatened to scrap during barrages of hostility towards the former colonial power. "EDCA is still on," Lorenzana told a news conference. The Philippine Left immediately raised objections, urging Duterte to "clarify" Lorenzana's announcement, saying the work would turn Philippine facilities into "clearly US bases and will run counter to Duterte’s avowed independent foreign policy." EDCA allows the expansion of rotational deployment of US ships, aircraft and troops at five bases in the Philippines as well as the storage of equipment for humanitarian and maritime security operations. Lorenzana said Washington had committed to build warehouses, barracks and runways in the five agreed locations and Duterte was aware of projects and had promised to honor all existing agreements with the United States.

Singapore, Philippines and US militaries organise multinational disaster relief exercise Channel NewsAsia 25th Jan 2017
What happens when an active volcano erupts in the Philippines followed by a Category 5 typhoon striking the same area just five days later? That was the scenario presented to participants of a multinational drill called Exercise Coordinated Response (EX COORES), as they gathered in Singapore this week to practice real processes in the area of disaster relief. The aim is to strengthen co-operation among militaries during aid and disaster relief operations through a common coordination centre. In this case, the three-day exercise which started on Monday (Jan 23), was conducted at the Changi Command and Control Centre. It involved about 150 participants from 18 militaries, including that of Singapore, the Philippines, other ASEAN nations like Malaysia Brunei and Thailand as well as the US and China. "Many of the international militaries that are participating are interested to know how they can get into a country, how they can bring in the military equipment, fly in the airplanes into the country,” said exercise co-director COL Lee Kuan Chung. "So this exercise actually provides them a platform to exchange information, exchange point of contacts so that they are clearer - if the next disaster happens, they do not have to start scrambling." Non-military groups like the United Nations Office for the Coordination of Humanitarian Affairs (OCHA), the Red Cross, Red Crescent, and the Singapore Civil Defence Force (SCDF) were also present on Wednesday (Jan 25) to observe the exercise.

Duterte open to joint maritime drills with Russia BusinessMirror 5th Jan 2017
President Duterte will consider joint naval exercises with Russia to enhance the countries’ maritime cooperation, Presidential Spokesman Ernesto C. Abella said on Thursday, months after the Philippines decided to reduce military exercises with the United States. At a briefing in Malacañang, Abella said Duterte considered this week’s visit by two Russian warships to the capital Manila as a sign the Philippines could strengthen its naval diplomacy with Russia. Duterte is scheduled to visit one of the ships today, Friday. A memorandum of agreement would need to be signed between the Philippines and Russia to establish the framework of any future naval drills, Abella added, citing Defense Secretary Delfin N. Lorenzana. Abella said the President still opposed the permanent stay of any foreign troops in his country. On Wednesday Russian Ambassador to the Philippines Igor Khovaev said his country was not interested in military ties with the Philippines, but said Russia would be willing to help supply arms to the Southeast Asian nation. He also said military drills between the two countries could be an opportunity to share experiences and learn from each other.  

Russia: ‘We need new partners in Asia Pacific, including PHL’ BusinessWorld 5th Jan 2017
Russia’s ambassador to the Philippines on Wednesday took the occasion of this week’s Manila visit by two of his country’s warships to affirm ties with the Philippines as among Russia’s “new partners in the Asia-Pacific region...” Meanwhile, the US State Department for its part expressed confidence that the Philippines’ relations with Russia “won’t affect” bilateral relations with the United States. Accompanied by Rear Adm. Eduard Mikhailov on the deck of the Admiral Tributs, Russian ambassador Igor Khovaev was explicit in his response to repeated questions focusing on the geopolitical issues, saying that “Russia has no interest to create any military alliance in the Asia-Pacific region.” But the visit to Manila by a top-ranking officer of the Russian navy, Mr. Mikhailov, was also notable, as he led the crew of the anti-submarine ship Tributs and the tanker Boris Botuma. Sought for comment on possible interference from traditional partners of the Philippines such as the United States on Manila’s building ties with Moscow, Mr. Khovaev said: “We don’t rule out that.” Mr. Khovaev said Russia has no role in the maritime disputes in the region. As for joint military drills with the Philippines, the Russian ambassador said: “We are open, we have common problems that can only be solved by joint efforts. We are open for that, for any interested country.” Sought for comment regarding the visit by the Russian vessels, Herman Joseph S. Kraft, associate professor at the University of the Philippines’ political science department, said the Philippines’ taking part in joint military exercises with Russia is part of the independent foreign policy pursued by President Rodrigo R. Duterte’s administration. “But this would be difficult to do because of the difference in doctrines, traditions and processes between involved countries,” Mr. Kraft said in a text message. “At a basic level, joint military exercises need common procedures in communication.”

Russia offers Philippines arms and close friendship Reuters 4th Jan 2017
Russia is ready to supply the Philippines with sophisticated weapons including aircraft and submarines and aims to become a close friend of the traditional U.S. ally as it diversifies its foreign ties, Russia's ambassador said on Wednesday. Philippine President Rodrigo Duterte has thrown the future of Philippine-U.S. relations into question with angry outbursts against the former colonial power and some scaling back of military ties while taking steps to boost ties with China and Russia. Illustrating the transformation of Philippine foreign relations since Duterte took office in June, two Russian warships are on four-day visit to Manila this week, the first official navy-to-navy contact between the two countries. Russian Ambassador Igor Anatolyevich Khovaev took the opportunity to hold a news conference on board the anti-submarine vessel Admiral Tributs. He said he understood that the Philippines was intent on diversifying its foreign partners. "It's not a choice between these partners and those ones. Diversification means preserving and keeping old traditional partners and getting new ones. So Russia is ready to become a new reliable partner and close friend of the Philippines," he said. "We don't interfere with your relations with your traditional partners and your traditional partners should respect the interest of the Philippines and Russia." The Russian navy visit comes less than a month after Duterte sent his foreign and defence ministers to Moscow to discuss arms deals after a U.S. senator said he would block the sale of 26,000 assault rifles to the Philippines due to concern about a rising death toll in a war on drugs launched by Duterte.

Economics

Duterte's tax reform: More take-home pay, higher fuel and auto taxes Rappler 2nd Feb 2017
President Rodrigo Duterte, as early as the campaign, had vowed to lower the income tax rates shouldered by working Filipinos. Easier said than done, though, as taxes form an integral part of governance that help provide social services to citizens. A balancing act is needed to cater to both the welfare of taxpayers and government. In line with Duterte’s promise, the Department of Finance submitted its first proposal to the House of Representatives in September. The initial package of reforms, the first of 4, included the lowering of the personal income tax rates and the reduction of value added tax exemptions to counter revenue loss. The DOF, however, revised its proposal after the public and private sectors opposed the imposition of an immediate imposition of high taxes on fuel and cars. Many people also criticized the removal of VAT exemptions for senior citizens and PWD, prompting the agency to submit its amended proposal on January 17. The DOF and the Bangko Sentral ng Pilipinas said the lowering of income taxes and the subsequent increase in excise taxes would only have a “negligible” effect on the country’s inflation rate or the rate by which the prices of goods and services increase. The BSP expects a 3.3% inflation rate this year and 3% in 2018. “Why the impact on inflation is muted or moderate or modest is because the proceeds of the tax initiative will go back in terms of infrastructure, social spending, protection of the poor. In short, higher potential of the economy,” said BSP Deputy Governor Diwa Guinigundo in a Senate hearing on Tuesday, January 31.

Tax reform to boost growth – BSP philstar.com 1st Feb 2017
The proposed tax reform package of the Department of Finance (DOF) will have a positive impact on the country’s economic growth, according to a senior official of the Bangko Sentral ng Pilipinas. BSP Deputy Governor Diwa Guinigundo expressed support for the DOF’s proposed Comprehensive Tax Reform Program. Guinigundo said the implementation of the first package of the CTRP would contribute an additional 0.6 percentage point to the country’s GDP growth in 2017, and 0.2 percentage point in 2018. The BSP official explained lower personal and corporate income taxes would “incentivize” more factories and businesses to produce and invest more, particularly in goods and infrastructure. As such, he said the increased capacity and production would moderate price movements. Guinigundo said the BSP estimates inflation rate to go up by 0.5 to 0.7 percentage point in the next two years with the implementation of DOF’s proposed tax reforms. This is on top of the BSP’s projection of 3.3 percent inflation this 2017 and three percent in 2018. On the other hand, estimates from the DOF show higher increase in inflation rate once the first package of the CTRP be implemented.

LEDAC lists major policy directions philstar.com 1st Feb 2017
The executive and legislative departments have reached consensus on several key initiatives during the first meeting of the Legislative-Executive Development Advisory Council ( LEDAC) on Monday night, Socioeconomic Planning Secretary Ernesto Pernia said yesterday. During a luncheon meeting hosted  by the European Chamber of Commerce of the Philippines (ECCP) yesterday, he said these include the commitment to pursue a comprehensive tax reform program (CTRP), reform the procurement law to speed up the process, use the coconut levy fund within the term of the current administration, ease constitutional restrictions on foreign investments, and strengthen of the National Water Resources Board (NWRB). The LEDAC also resolved to introduce amendments in the implementing rules and regulations of the Government Procurement Reform Act to speed up the procurement process for government projects. During the meeting, senators also supported the passage of a law that would provide for the use of the coco levy fund which is now valued at around P74 billion. “We want to use the coconut levy during this administration in terms of improving agriculture, especially the coconut sector,” said Pernia. The easing of constitutional restrictions on foreign investments and strengthening of the National Water Resources Board (NWRB) “would also be taken up in Congress.”

Decentralization not a guarantee for growth and development–WB BusinessMirror 30th Jan 2017
Decentralizing governments is not a guarantee that growth and development will reach the poorest of the poor, according to the World Bank (WB). In its latest Global Development Report (GDR), the WB said decentralization is not a guarantee that growth and development will reach the poorest because of “unequal” distribution of power in society. “Successful reforms are not just about ‘best practice’. They require adapting and adjusting institutions in ways that build more effectively on local dynamics and address specific problems that continue to stand in the way of development that serves all citizens,” said Debbie Wetzel, Senior Director of the World Bank’s Governance Global Practice. The 2017 GDR explores how unequal distribution of power in a society interferes with policy effectiveness. The report helps explain why model anticorruption laws and agencies often fail to curb corruption, why decentralization does not always improve municipal services; or why well-crafted fiscal policies may not reduce volatility and generate long-term savings.

Economy grows fastest in three years Business World 27th Jan 2017
The Philippines economy grew at a three-year high in 2016, closing the period near the upper end of the official target range and providing impetus to meet 2017’s higher goal. In a press conference on Thursday, National Statistician Lisa Grace S. Bersales said the country’s gross domestic product (GDP) -- the total amount of final goods and services produced in the country -- grew by 6.6% in the October-to-December period. The fourth-quarter print marked the slowest expansion in a year that saw a downwardly revised seven percent in the third quarter, but was higher than the 6.5% recorded in 2015’s fourth quarter. “Let me note that the last quarter growth of an election year is usually slower than the first half due to the transition of government, and as investors adopt a ‘wait-and-see’ attitude,” Socioeconomic Planning Secretary Ernesto M. Pernia said during yesterday’s briefing. The performance towards the end of 2016 brought the full-year growth to 6.8%, perching closer to the higher end of the government’s 6-7% target for the year. Full-year growth in 2016 was the highest reading in three years since the 7.1% expansion in 2013. “We are likely either the third or fourth fastest growing major Asian emerging economy in the fourth quarter after China’s 6.8% and Vietnam’s 6.7%. For the full year of 2016, we could be the second fastest, with China growing at 6.7% and Vietnam at 6.2% for the whole year,” said Mr. Pernia, who is the National Economic and Development Authority’s (NEDA) director-general.

Philippine economy surges and shrugs off politics — for now Financial Times 26th Jan 2017
Economic growth in the Philippines surged in 2016, making it among the world’s fastest-growing countries last year as strong domestic demand helped it shrug off political risks at home and abroad. Southeast Asia’s second most populous country has emerged as a regional economic hotspot over the past few years as rivals have been hobbled by problems ranging from corruption scandals to political instability. Gross domestic product climbed 6.8 per cent, topping China’s 6.7 per cent, boosted by business investment and spending on the election that brought President Rodrigo Duterte to power. But the outlook for the Philippines has clouded. In particular, the future of its flagship US-focused outsourcing industry is uncertain as Mr Duterte has lashed out at Washington and President Donald Trump has criticised American companies who move jobs offshore. Capital Economics said it expected “solid growth rates” to continue in the near term despite the “major downside risks” of political uncertainties in both the Philippines and the US. It noted that low interest rates should support investment, modest consumer debt levels ought to sustain household spending and a further boost would come from a big government infrastructure programme of up to $160bn. 

Tax bureau spells out 2017 programs Business World 7th Jan 2017
The Bureau of Internal Revenue (BIR) yesterday spelled out steps it will take to hit its collection target this year, as the government scrambles to shore up revenues to help finance its bid to increase spending in support of faster economic growth. Revenue Memorandum Circular No. 5-2017 -- signed by Internal Revenue Commissioner Caesar R. Dulay on Dec. 22 last year but released only on Friday -- outlined priority thrusts aimed at helping the bureau collect some P1.829 trillion this year, about 79% of the national government’s programmed P2.313-trillion total tax revenues and 13.16% more than the P1.62 trillion it was entrusted to collect in 2016. The bureau collected P1.454 trillion in the 11 months to November 2016, some 9.6% more than the year-ago P1.327 trillion. That means it should have collected P166 billion in December alone to keep to the full-year program, compared to November’s actual P157.3-billion take. The government aims gross domestic product (GDP) growth to hit 6.5-7.5% this year from 2016’s targeted 6-7%, partly as it spends more on major infrastructure, before picking up to 7-8% annually between 2018 and 2022. Actual GDP growth hit 7.0% in 2016’s first three quarters after the country outpaced most major Asian economies, except India, in the second and third quarters.

BusinessWorld | International reserves miss forecast, but deemed sufficient Business World 7th Jan 2017
The country's foreign reserves slipped in December to hit the lowest in nearly a year, missing the full-year forecast as the central bank actively took part in currency trading and as the government settled external debts, although the level remains sufficient to cushion against market shocks. Gross international reserves (GIR) settled at $81.045 billion by end-2016, lower than the downward-revised $81.451 billion level seen in November. The amount is the lowest since the $80.692 billion reported in January 2016 and marks the third straight month of decline after peaking at $86.139 billion last September. The central bank had expected total reserves to have ended 2016 at $83.7 billion, but the actual amount was still more than end-2015’s $80.667 billion. In a statement on Friday, the BSP attributed the GIR decline to outflows as the national government paid maturing foreign debts, lower gold valuations in the international market, and to the central bank’s foreign exchange operations. The BSP said the government’s net foreign currency deposits and income from offshore investments helped offset the impact of such declines. The BSP may have more actively stepped in during currency trading that month, which saw the peso trade at the P49 level versus the dollar. At one point in Dec. 20 trading, the peso again flirted with the P50 level against the greenback following the decision by the United States Federal Reserve to push through with a much-anticipated interest rate hike. The central bank sometimes intervenes in daily foreign exchange trading to temper sharp swings of the peso, in keeping with monetary authorities’ goal of maintaining price and financial stability. Economists have repeatedly cited the BSP’s hefty reserves and the country’s robust economic growth as basis for their optimistic outlook on the Philippines, deeming it well-positioned to weather market volatility.

Philippine year in review 2016 BusinessWorld 6th Jan 2017
Accelerated growth, backed by rising spending on infrastructure and domestic demand, were the hallmark of the Philippines’ economy in 2016, though overseas political and economic uncertainties could darken prospects for 2017. The Philippine economy was a top performer in Southeast Asia in 2016, according to a November report from ratings agency Standard & Poor’s (S&P), due to its growing middle class, a business process outsourcing (BPO) boom and expansionary fiscal policy that emphasizes public infrastructure. GDP growth was on track to reach 6.5%, up from the 5.9% posted in 2015, according to the report. Looking forward, 2017 could be marked by greater volatility across the region, with interest rates likely to rise and foreign exchange rates set to be more fluid. As a result, S&P expects GDP growth to ease marginally to 6.3% next year and 6.2% in 2018. The IMF had a more positive outlook, however. According to the most recent “World Economic Outlook” report, released in October, GDP was projected to rise by 6.4% this year, accelerating to 6.7% in 2017 and 6.8% the following year. Inflation remained subdued through the year, assisted by weaker fuel costs. As of the end of October, consumer inflation was running at 2.3% -- well within the 2-4% target set by the central bank, the Bangko Sentral ng Pilipinas. The bank was expecting a dip in the final months of the year, as slight declines in rice, power and fuel prices were factored in. However, inflation is set to accelerate on increased economic volatility, with the IMF forecasting inflation will rise to 3.4% in 2017 before climbing to 3.5% by 2019.

PH growth prospects brighter in 2017 – DOF Manila Bulletin Business 2nd Jan 2017
The Department of Finance (DOF) remains bullish on prospects for continued high growth this year, saying the Duterte administration is committed in pursuing its accelerated spending program to sustain the economic momentum. But along with this high growth, the DOF said President Rodrigo R. Duterte also wants the economic benefits to spread to all sectors across all regions by way of more jobs and better living standards. Finance Secretary Carlos G. Dominguez III said that despite the political noise in the first six months of the Duterte presidency, growth has remained on the upswing on the back of the country’s rock-solid macroeconomic fundamentals. He said the government remains on track in realizing its vision of lifting six million Filipinos from poverty and transforming the Philippines into a high middle-income country in five years, with a per-capita gross national income (GNI) of $4,100. The optimistic outlook on the Philippines as one of Asia’s fastest-growing economies in the year ahead is shared by credit raters and other international institutions such as S&P Global, the Asian Development Bank and the International Monetary Fund. Dominguez said the Duterte administration is committed to pursuing the congressional approval of its proposed comprehensive tax reform program, the first in 30 years, to ensure the financial sustainability of the government’s spending plans for growth. He said the government needs to invest heavily in programs that will transform the economy from a consumption- to an investment-driven one, and at a much higher level from the current investment rate of 20 percent of GDP. By doing so, Dominguez said the Philippines could be on the par with its more vibrant neighbors that invest between 30 percent and 40 percent of their respective GDPs.

Energy

Palace gives suspended mining firms chance to explain philstar.com 9th Feb 2017
Suspended mining firms would be given the opportunity to present their side and to dispute the audit findings of the environment department, Malacañang said yesterday. Presidential spokesman Ernesto Abella said the evaluation of the environment and natural resources sector was discussed during the Cabinet meeting last Tuesday. “The President and his Cabinet collectively decided to observe due process with regard to the mining issue,” Abella said in a statement. “This means companies affected by mining closures for violations of environmental laws and regulations will be given the opportunity to respond to or dispute the audit, or make the necessary remedies to ensure compliance with government standards,” he added. Abella said the Department of Finance would have further discussions with the Department of Environment and Natural Resources (DENR) as concerned state agencies of the Minding Industry Coordinating Council. Early this month, Environment Secretary Gina Lopez ordered the closure of 23 metallic mines and suspended five others for serious environmental violations. The closure orders against the 23 mining firms were based on the final results and recommendations of the multi-sectoral audit teams formed to look into the compliance of mining operators with existing environmental laws and regulations.

Legal battle looms as gov’t shuts mines Business World 3rd Feb 2017
The government is shuttering more than half the country’s 41 metal mines and suspending operations of five others on environmental grounds, deepening a crisis miners have faced since the past administration and prompting the industry to gird for legal battle. Environment Secretary Regina Paz L. Lopez told reporters in a briefing yesterday at the headquarters in Quezon City of the Department of Environment and Natural Resources (DENR) that “15 of these mines are in watersheds.” “We have decided to close down every kind of mining operation in functional watersheds... [you] cannot and must not have any extractive industry in the watershed,” Ms. Lopez said. Stocks of most listed miners reeled from the news, dragging down the stock market that has already been reeling from uncertainty caused by US President Donald J. Trump’s protectionist moves. Ronald V. Recidoro, vice-president of the Chamber of Mines of the Philippines’ Legal and Policy division, said that affected companies will “definitely” appeal against the decision. “Due processes must have been observed if you want to cancel. That’s what’s lacking here. I don’t know if she even relied on the audit review.” Ms. Lopez declined to provide details of the recommendations given to her by the Mines and Geosciences Bureau-led technical review committee she formed in November to go over results of the wide-ranging audit that began in July last year.

ENVIRONMENTAL CLAMPDOWN: Govt to close half of mines Malaya Business Insight 3rd Feb 2017
The Department of Environment and Natural Resources (DENR) yesterday said it has ordered the closure of 21 mines in the campaign to fight environmental degradation by the industry. The 21 mines represent half of the 41 mines audited last year. Of the 21 mines ordered closed, 15 were found to be operating inside functional watersheds. They were said to have polluted water systems and silted up rivers. The closure order appears to be counter to what the Mines and Geosciences Bureau had earlier recommended but DENR secretary Regina Lopez was adamant about the closure order. The closed mines represent 50 percent of the country’s total nickel production and about 10 percent of world supply. Lopez said operations of six other mines have been suspended including the country’s top gold mine operated by Australia’s Oceanagold Corp. Of the 41 mines, 13 passed while six are for suspension and one was deferred judgment. Lopez said she is not concerned about the money but that “the people should not suffer. “Why should they suffer, so that stock market goes up? What’s more important, stock market or wellbeing of our people?” raged Lopez in a briefing yesterday. “We will close down any kind of mining in functional watersheds,” Lopez said. Lopez said the erring mining firms may file their appeal but the final say will come from President Duterte. The Chamber of Mines of the Philippines (COMP) said the DENR’s order did not observe due process.

NGCP study shows feasibility of VisMin grid interconnection BusinessMirror 1st Feb 2017
The National Grid Corp. of the Philippines (NGCP) on Wednesday released the results of a study that will interconnect the Visayas and Mindanao grids. “The NGCP is pleased to report we already finished the hydrographic survey that will determine the route of the Visayas-Mindanao Interconnection Project. With this development, we now have a clearer plan on the project’s implementation. Power-resource sharing between the country’s major islands will now become a reality,” the grid operator said. In an NGCP-commissioned hydrographic survey conducted from September to November 2016, a viable route along the country’s western seaboard—beginning in Cebu and terminating in Dipolog—was determined as viable for the implementation of the plans of interconnecting the Visayas and Mindanao grids. With the hydrographic survey result, the NGCP will now proceed with the preparation of a conceptual design, detailed cost estimate and update of system-simulation study using the Cebu-Dipolog route, in order to complete documents needed when it filed its application before the Energy Regulatory Commission in April this year. The project is envisioned to be finished by 2020, assuming all regulatory approvals are secured on time.

House panel moves to consolidate energy efficiency, conservation bills BusinessWorld 31st Jan 2017
The House committee on energy has formed a technical working group (TWG) tasked to consolidate five bills seeking to institutionalize energy efficiency and conservation (EE&C) measures. Measures that will be consolidated are House Bills (HB) 182 and 1220 filed by Parañaque Rep. Eric L. Olivarez and Oriental Mindoro Rep. Reynaldo V. Umali, HB 812, filed by Ako-Bicol Party-list Reps. Rodel M. Batocabe and Alfredo A. Garbin, Jr., HB 2388 filed by Batanes Rep. Henedina R. Abad and HB 1527 filed by House Deputy Speaker Gloria Macapagal-Arroyo. “The TWG shall be chaired by Rep. Umali, co-chaired by the other authors Reps. Olivarez and Abad and the other authors of the measures will be members of the TWG,” said Energy Committee Chairman Rep. Lord Allan Jay Q. Velasco (Marinduque) during the hearing. In his explanatory note, Mr. Umali said that it should be the goal of the government to “aggressively promote energy efficiency and conservation a way of life.” The House committee on energy during the 16th Congress, then chaired by Mr. Umali, approved an EE&C scheme in January 2016. The TWG will also consolidate two measures seeking to require the use of energy-efficient lighting products and a measure aiming to prohibit the manufacture, importation, sale and use of incandescent light bulbs

‘Mining law needs proper implementation, not repeal’ Philippine Daily Inquirer 30th Jan 2017
Repealing the Mining Act of 1995 would only encourage illegal mining activities that do not respect government regulations, according to an environment group. The Philippine Business for Environmental Stewardship (PBEST) warned against moves by Congress to repeal the Mining Act and replace it with proposed legislation collectively referred to as Alternative Mining Bills (AMBs). PBEST said the Committee on Natural Resources of the House of Representatives had started conducting technical working group meetings to deliberate on the AMBs. "The law has technically been just in operation for less than eight years, and a cycle in the mining industry spans more or less 20 years. There is no need to repeal the mining law. The real problem is implementation,” said Prof. Dindo Manhit, convenor of PBEST and president of Stratbase-Albert Del Rosario Institute. The Mining Act—or Republic Act No. 7942—faced constitutional challenges while Executive Order No. 79 in 2012 effectively stymied its implementation. Changing the rules in the middle of the game may just foster illegal mining activities that do not follow environmental regulations, Manhit said. He said while the goals set in amending the Mining Act or creating new mining regulations were in the best interest of the country, the proposed methods might not be the most effective. Some of the proposals include limiting the raw metals the country will produce to only serve the local market. PBEST said this would not jumpstart industrialization as envisioned but might even kill the mining industry.

Energy department suspends Mindanao spot market consultation on proposed rules Business World 24th Jan 2017
The Department of Energy (DoE) has put on hold the acceptance of comments for the draft rules covering the launch of a wholesale electricity spot market in Mindanao, citing “recent developments.” Energy Undersecretary Felix William B. Fuentebella did not immediately respond to a request for details on what transpired recently to prompt the DoE to “temporarily discontinue” accepting comments. The circular, entitled “Declaring the Launch of the Wholesale Electricity Spot Market (WESM) in Mindanao and Providing for Transition Arrangements” was posted last week. The draft placed the market’s launch on June 26, 2017. A source familiar with the matter said the DoE was awaiting the submission of an “annex” covering a power dispatch protocol and would post the amended draft circular shortly. The notice on the DoE web site called on the industry to disregard the previous draft as the agency “will be uploading the revised version soon.” The source added that there would be no change in the launch date, which should coincide with the introduction of a new system by the market’s governance arm, the Philippine Electricity Market Corp. (PEMC), for the Luzon and the Visayas market.

Meralco seeks regulatory approval for first solar power supply contracts philstar.com 24th Jan 2017
Power distribution giant Manila Electric Co. (Meralco) is seeking regulatory approval for its solar power supply contracts totalling 100 megawatts (MW) after undergoing price challenge as directed under the competitive selection process (CSP) policy. The company has concluded the price challenge for its two solar power supply contracts, Meralco SVP and head of customer retail services and corporate communications Alfredo Panlilio said in a recent interview. Previously, Meralco signed separate 50-MW supply contracts with Solar Philippines Tanauan Corp. and PowerSource First Bulacan Solar Inc. to diversify its power requirements. Both solar developers have offered a price of P5.39 per kilowatt-hour (kwh) for a period of 20 years, lower than the latest solar feed-in tariff (FIT) rate of P8.69 per kwh, once their respective projects start operation. Both contracts were subjected to a price challenge, where only the offer made by Power Source received a counter-offer from 7 Balboa of Soleq, the solar power arm of Singapore-based Equis Funds Group Pte Ltd., Panlilio said. Under the CSP policy, distribution utilities and electric cooperatives are mandated to undertake a bidding before finalizing power supply agreements with generation companies. If cleared by the ERC these will be Meralco’s first renewable energy power supply contracts in its portfolio.

Power sector must be aware of disaster-response system - Cusi Power Philippines 24th Jan 2017
IN A WORKSHOP IN QUEZON CITY, DEPARTMENT OF ENERGY SECRETARY ALFONSO CUSI SAID THAT EVERYONE IN THE ENERGY INDUSTRY “MUST BE ATTUNED TO THE EXISTING NATIONWIDE DISASTER – RESPONSE SYSTEM OF THE ENERGY SECTOR.” Cusi has emphasized this at DOE’s Disaster Response Protocol Workshop yesterday at the National Power Corporation (NPC) headquarters in Quezon City yesterday. In the protocol workshop, DOE undersecretary Felix William B. Fuentebella said that “the primary objective is for the energy sector to periodically review the implemented and established system of rules to effect the correct and appropriate conduct and procedures to be followed by the industry stakeholders.” The DOE secretary also said that the energy sector has long been implementing protocols to address and respond to calamities and disasters that take their toll on vital energy infrastructures.” Cusi added that the DOE will and is “proactively advocating energy resiliency in the face of the frequent and disastrous occurrences of natural and human-induced calamities in the country.”

50 MW solar power farm in South Cotabato now under negotiations, says  LGU official Philippine Information Agency 24th Jan 2017
Discussions  are in progress  for the construction of a 50-megawatt solar power plant in nearby Tantangan town, a municipal  official confirmed. If the project pushes through, it will be the second solar facility in  South Cotabato. Tantangan Vice Mayor Timee  Joy Torres-Gonzales  disclosed  in a press conference that  officials  of  nv vogt Philippines Solar Energy One, Inc., are in talks  with Mayor Benjamin Figueroa Jr. and land owners  for the possibility of  acquiring  100 to  130 hectares where the solar power energy developer  could construct its new  power plant. South Cotabato  Governor Daisy Avance-Fuentes  first announced the plan in her State of the Province Address  (SOPA) last  December 12. On January 23, 2016,  nv vogt  inaugurated  its  first  solar power plant in  the province.  The 8-hectare solar  farm located  in Barangay Centrala, Surallah  has a capacity  of 6.23 megawatt. It was reported that the project cost P1.3 billion. South Cotabato provincial government exempted the solar power developer from paying real property tax (RPT) for 10 years.

Cusi wants NGCP to do pilot project on ‘underground’ power lines Manila Bulletin Business 23rd Jan 2017
In the intent of weather-proofing the country’s energy facilities, Energy Secretary Alfonso G. Cusi is prodding the National Grid Corporation of the Philippines (NGCP) to come up with a pilot project on underground transmission facilities. He noted that this shall be part of the long-term plan on reinforcing the resiliency and cohesiveness of power facilities – for them to be able to withstand the recurrent strike of extreme weather swings primarily super-typhoons, earthquakes and other natural disasters. The energy chief, however, acknowledged that an “underground transmission line” could be 10 times more expensive than above-ground installations – and that is the reason why he has been exploring ways on how the Philippines can have access to the global climate change fund that could be funneled to projects affected by climate change risks. He said the proposed pilot project – that the NGCP may propose and identify – shall serve as “proof of concept” as to how underground transmission facilities could end up beneficial for a disaster-vulnerable country like the Philippines. Cusi explained that such installations may appear way too expensive at first, but if the cyclical damage sustained by power facilities and the cost of rehabilitating at every strike of typhoons be calculated, the overall cost may still end up reasonable in the long run.

Philippines to get first ocean power plant in San Bernardo Strait Power Philippines 23rd Jan 2017
The Philippine National Oil Company – Renewables Corp (PNOC-RC) has chosen the H&WB Asia Pacific (PTE. LTD) Corp and French partner Sabella SaS to build the first ocean power plant in the Philippines. The two companies will set out a tidal in-stream energy conversion technology in H&WB’s three areas in the San Bernardo Strait between Matnog, Sorsogon and Capul and Dalupiri in Northern Samar. “Tidal energy resource is considered more predictable and consistent than wave energy resource, and even wind for that matter,” H&WB said in a report by the Manila Times. In a report by the Manila Standard, PNOC RC says that it believes in tapping renewable energy streams along the country’s coasts and commits to helping in energy self-sufficiency with the Department of Energy’s policy of a balanced energy mix.

Phl, Japan put up joint crediting mechanism for emissions philstar.com 22nd Jan 2017
The Philippines and Japan have agreed to boost cooperation in the fields of energy, resources and the environment. Japan’s Ministry of Economy, Trade and Industry (METI) said both countries signed an agreement to establish a joint crediting mechanism (JCM). “Under this mechanism, Japan will implement various projects that will reduce greenhouse gas emissions in the Philippines through the utilization of Japan’s outstanding low-carbon technology. Through the mechanism, Japan will contribute not only to the Philippines’ environmental, energy and economic growth but also to international efforts to prevent climate change,” METI said. The agreement with the Philippines is the 17th partnership entered into by Japan following the JCM establishment with 16 partner countries which include Mongolia, Bangladesh, Ethiopia, Kenya, Maldives, Viet Nam, Lao PDR, Indonesia, Costa Rica, Palau, Cambodia, Mexico, Saudi Arabia, Chile, Myanmar, and Thailand. METI said the mechanism offers a means of achieving Japan’s reduction targets by quantitatively evaluating Japan’s contribution to greenhouse gas emission reductions and removal through efforts to facilitate the spread of greenhouse gas emission reduction technologies, products, systems, services, and infrastructure to developing countries, as well as promoting associated measures. Both parties also agreed to mutually recognize that verified reductions or removals from the mitigation projects under the JCM could be used as a part of their own internationally pledged greenhouse gas mitigation efforts.

Energy demand to outpace production in coming years -- UN ESCAP Business World 18th Jan 2017
The Philippines will likely see the gap between energy production and demand increase in the next few years and must take steps to develop common infrastructure and energy policies in order to minimize the gap. However, low international oil prices are projected to increase domestic demand and allow the government to advance fiscal reforms in relation to energy, which is expected to increase revenue generation and boost public infrastructure spending in the Philippines. According to the report, the Philippines has been successful in expanding its rural electrification through grid extension and off-grid energy systems and has shown one of the highest growth rates for electricity access along with China, Lao People’s Democratic Republic (PDR), Mongolia and Vietnam. Off-grid systems such as micro-hydro, solar lanterns and solar home systems “are apt to meet the needs of remote communities, and micro- and mini-grids can play an instrumental role in electrification efforts.” The report proposes that the government “ensure affordability, reliability and sustainability” of energy access through policy making, institutional arrangements and improved financing as these are seen to develop the quantity and quality of energy services delivered in the country.

Quezon to host offshore natural gas hub The Manila Times 17th Jan 2017
Proving its apparent seriousness in providing clean alternative energy, the Energy World Corporation showed to the media its own Liquified Natural Gas carrier ship Ocean Quest, a tanker dedicated to EWC’s LNG hub terminal, a first in the Philippines, located in Barangay Ibabang Polo of this town. Stewart Elliot, managing director and CEO of EWC, said the tanker to be based in this town is capable of storing up to 128,000 cubic meters of LNG, making it a floating storage with regasification and processing equipment onboard required to provide re-gassified LNG directly to the power station. The ship, sailing under the Norwegian flag and coming from Malta before heading to the Philippines, is staying for a time in Pagbilao and will set sail for Singapore where it will be on standby when the LNG station here becomes operational. Eddie Rodriguez, EWC country manager, said they are waiting for the National Grid Corporation of the Philippines’ (NGCP) final approval to fully operate to provide cleaner and cheaper alternative energy to Luzon grid through the Wholesale Electricity Spot Market (WESM). The WESM is the country’s spot market for trading of electricity as a commodity. The 650-MW LNG Hub Terminal in this town consists of two full-containment onshore energy tanks with pump capacity of 130,000 cubic meters of LNG each. It also has its own jetty and marine infrastructure for the loading and unloading of LNG ships as well as regasification, control center and other ancillary facilities.

DOE chief’s China trip seen lifting energy ties The Manila Times 16th Jan 2017
Energy Secretary Alfonso Cusi will travel to China on a five-day official trip on January 21-25 to enhance energy cooperation between China and the Philippines. Cusi, in a statement, said the trip is borne out of a “gracious” invitation from the Chinese Ambassador to Manila Zhao Jianhua. The Department of Energy (DOE), he said, is “fortunate to have the opportunity to touch base with our counterparts in China’s own Ministry of Energy.” “The purpose of the meeting is exclusively to improve our overall energy development efforts, gain knowledge from their best practices and hopefully attract investments in our local energy projects,” Cusi added. This meeting is a “clear” indication that President Rodrigo Duterte’s state visit to China late last year was indeed successful, and is now yielding “tangible” benefits for the Philippines, according to the DOE chief.

Malampaya outage in the Philippines raised to 2170MW Asian Power 16th Jan 2017
Will the back-up plants be enough to cover for the shutdown? The energy department revealed that 2,170MW of power from Malampaya will be non-operational during the 20-day maintenance period. The initial outage was 1,850MW. Undersecretary Felix William B. Fuentebella was quoted in a report saying that power plant Avion can run on diesel, but San Gabriel plant cannot, raising the total outage to 2,170MW. The Malampaya shutdown will run from January 28 to February 16. Consequently, a power rate hike of P1.44 per kWh will be imposed. 

Chinese firm Xidian Holdings to inject $500m in Philippine energy project Asian Power 16th Jan 2017
It plans to set up a 232MW wind and solar project in Northern Philippines. Xidian Holdings, along with a Singapore-based consortium, signed a deal to invest $500m in building a 232MW wind and solar project in Ilocos Norte, a province located in Northern Philippines. The project's target completion date is mid-2018, and construction will begin by March as the groups are currently woking on the EPC contract. The 232MW project is part of Xidian Holdings' 500MW renewable energy investment portfolio by 2020.

Philippines' energy agency gears up for Malampaya shutdown Asian Power 10th Jan 2017
Affected natural gas plants will run on alternative or replacement fuel. Energy Secretary Alfonso G. Cusi pushes to firm up measures by each concerned agencies and power stakeholders during the course of the Malampaya maintenance repair from 28 January to 16 February 2017 to ensure readiness of all stakeholders and by way of ensuring consumers are protected from any market abuses. The Department of Energy (DOE) will closely coordinate with all Malampaya stakeholders including the Malampaya Consortium, the National Grid Corp. of the Philippines (NGCP), Manila Electric Company (MERALCO), Power Sector Assets and Liabilities Management (PSALM) Corp., Philippine Electricity Market Corp. (PEMC) and power generation companies and other distribution utilities to ensure sufficiency of power supply during the shutdown period. To ensure sufficient power supply, the DOE requires the affected natgas power plants to run on alternative or replacement fuel but it is more expensive than natural gas. Natural Gas as fuel only costs around P4/kilowatt-hour and replacement fuel, such as diesel which costs around P6-P8/kWh. Sec. Cusi then emphasized that “the Department is exploring all possible options and remedies to maximize protection for consumers.” Further, the DOE also encourages consumers to practice effective “demand-side management.” The Secretary of Energy also enjoined that “The public should also be proactive in computing the effect of price adjustments to be provided in the simulations given by the agencies concerned to for consumers to practice efficiency measures to avoid price shocks.”

Alternative funding source for FiT not yet available -- Energy dep’t Business World 6th Jan 2017
The Department of Energy (DoE) has not yet found the funds to replace the feed-in-tariff (FiT) allowance being collected from electricity consumers to repay investors in renewable energy projects. “There is none yet,” Energy Undersecretary Felix William B. Fuentebella said when asked whether the department had found a possible funding source. “We’re still looking and negotiating for funding,” he said. He said there would be no third round of FiT, a guaranteed payment for 20 years for the electricity produced by renewable energy developers, until the DoE has found an alternative funding source other than billing customers through a “FiT allowance.” “We will not put a deadline,” he said when asked about the timeline for the DoE’s attempt to free consumers of the so-called FiT-all, which is included in their monthly electricity bill.

Financial Services

Bangko Sentral to strictly monitor virtual currency exchanges philstar.com 9th Feb 2017
The Bangko Sentral ng Pilipinas (BSP) has stepped up its campaign against money laundering and terrorist financing through the strict monitoring of virtual currency exchanges as well as similar entities operating in the country. BSP officer-in-charge Nestor Espenilla Jr. issued Circular No. 944 laying down the rules and regulations governing the operations of virtual currency exchanges in the Philippines. “It is the policy of the Bangko Sentral to provide an environment that encourages financial innovation while at the same time ensure that the Philippines shall not be used for money laundering or terrorist financing activities and that the financial system and financial consumers are adequately protected,” he said. He explained the BSP’s Monetary Board decided to move ahead with adopting a formal regulatory framework in recognition of the rapid growth of virtual currency-based payments and remittance transactions, estimated at around $5 million to $6 million per month for certain major players. The new regulation, a first in Asia, seeks to balance the interests of promoting technological innovations with the potential to improve the level of inclusion and efficiency in the financial system. It also seeks to proactively address emerging risks to the system arising from these new technologies.

Philippines: Rules outlined for converting insurance mutuals Asia Insurance Review 6th Feb 2017
The Insurance Commission (IC) has issued a new directive for the demutualisation of domestic mutual life insurance companies, guided by the principle of protecting existing policyholders.

DoF gives taxpayers 2 yrs to process refunds, VAT credits The Manila Times 30th Jan 2017
Taxpayers, particularly foreign investors, seeking value-added tax credits and refunds now have two years to file appropriate documents instead of 120 days under a new set of rules issued by the Bureau of Internal Revenue. This new revenue regulation addresses the concerns of foreign investors, particularly the issues raised by the Japanese Chamber of Commerce and Industry of the Philippines (JCCIPI), regarding their VAT claims under a previous BIR rule, BIR Commissioner Caesar Dulay said in a statement issued by the Department of Finance. Finance Secretary Carlos Dominguez 3rd has signed Revenue Regulations (RR) RR1-2017 relieving taxpayer-claimants with denied VAT credit or refund claims because Memorandum Circular (RMC) 54-2014, issued by then BIR Commissioner Kim Henares, took effect retroactively in 2014, according to the DOF. RMC 54-2014 overturned RMC 49-2003 and barred taxpayers from filing additional documents after filing their claims since the retroactive order invalidated their applications under the provision of 120-rekconing of claims. Foreign investors seeking VAT refunds raised a howl as RMC 54-2014 required that they submit all supporting documents with their application. The VAT-related regulations dated January 3, 2017 gave taxpayers two years to apply for a tax credit certificate or refund of creditable input tax from the close of the taxable quarter when the sales were made.

Philippines: Microinsurance penetration rate to hit 48% by 2022 Asia Insurance Review 25th Jan 2017
The microinsurance penetration rate in the Philippines is expected to increase to 48.7% by 2022, from the 25.4% seen at the end of last September, according to Insurance Commissioner Dennis Funa. Unveiling some statistics, he said that 26 million Filipinos, or roughly a quarter of the country’s total population of 103.5 million, are protected by a microinsurance product.

6 more Asian banks seek PH entry – BSP The Manila Times 12th Jan 2017
Six banks from Asia are interested in setting up operations in the Philippines, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said at the annual reception for the banking community held Tuesday night. “We thank Congress for its full support of initiatives liberalizing foreign entry into the banking system. This eventually became law, specifically RA [Republic Act] 10574 and RA 10641. On the latter, we are happy to report that nine banks have entered the Philippine banking industry thus far, with six more banks expressing interest,” he said.

BSP Governor Tetangco: My term ends in July CNN 11th Jan 2017
Bangko Sentral ng Pilipinas Governor Amando Tetangco gave a clearer sign on Tuesday night that he's stepping down as central bank governor. "Indeed time flies. I end my second term as governor of the BSP on July 2, 2017. I take this opportunity, therefore, to thank the leaders of our banking industry and the BSP's partner institutions for working with us during the best of times, the worst of times, and all the times in between," he said during his annual address to the banking community.

Who Could Be Next in Line as Duterte's Central Bank Chief? Bloomberg 10th Jan 2017
Amando Tetangco’s term as governor of the Philippine central bank will expire on July 2 and he hasn’t disclosed yet if he’ll accept an offer from President Rodrigo Duterte to stay on for a third term. Tetangco, 64, has kept inflation below 5 percent for more than five years, allowing the bank to cut its benchmark interest rate to a record low. He has held office under three presidents, steered the economy through a global recession, and served as a pillar of stability for investors spooked by Duterte’s rhetoric around his war on drugs.

Philippines: Supreme Court Affirms SEC Guidelines on Compliance with Foreign Equity Restrictions Baker McKenzie 6th Jan 2017
In a recent decision, Roy III v. Chairperson Teresita Herbosa, et. al. (Roy Case)[1], the Supreme Court affirmed that the guidelines issued by the Philippine Securities and Exchange Commission (SEC) (SEC Guidelines) on determining compliance with foreign equity restrictions of corporations engaged in nationalized activities are valid. The pronouncements of the Supreme Court in the Roy Case should serve as a definite direction on how affected corporations should structure its equity.

Food & Agriculture

Gov’t open to partial logging ban Manila Bulletin News 2nd Feb 2017
The government is considering a partial logging ban instead of a total logging ban nationwide. Presidential spokesman Ernesto Abella said a new government body is expected to create a map to identify the areas where tree-cutting operations would be allowed. Abella said logging operations may be allowed in industrial farms, where trees are cultured for use as furniture, and other wood-based industries. The President earlier ordered the Department of Environment and Natural Resources, Department of Agriculture and Department of the Interior and Local Government to form a committee to craft the guidelines on the logging ban in the country. The President, in a recent Climate Change Commission en banc meeting, told Environment Secretary Gina Lopez to “stop all logging operations with no exemptions.” Duterte issued the directive after expressing concern over the recent massive floods in Northern Mindanao reportedly due to the unabated logging in the area.

PHL dairy imports up 50.39%–NDA BusinessMirror 31st Jan 2017
The country’s dairy imports from January to September 2016 expanded by 50.39 percent to 2.07 million metric tons (MMT) in liquid milk equivalent (LME), from 1.38 MMT-LME recorded in 2015, according to the National Dairy Authority (NDA). The latest NDA data showed that the figure has even surpassed the total volume of milk imports in 2015, or 15.47 percent, higher than the 1.79 MMT-LME recorded that year. It also surpassed the agency’s forecast of 1.85 MMT. NDA figures also revealed that the country’s milk imports rose by 4.44 percent to $598.81 million (P28.11 billion), from $573.36 million (P25.82 billion) recorded in 2015. The bulk of the country’s dairy imports was purchased from New Zealand, which accounted for 31.24 percent, which was followed by the United States (28.33 percent), according to NDA data. The expansion of the Philippines’s dairy imports during the period could be attributed to growing local demand, particularly the rapid expansion of the food-processing sector and the prevailing low price of dairy in the global market, according to a Global Agricultural Information Network (Gain) report in end-November last year. NDA data also showed the country’s outbound shipments of dairy products from January to September expanded by 75.47 percent to 178,460 MT-LME, from the 101,710 MT-LME registered in 2015. Malaysia remained as the top importer of Philippine dairy products, accounting for 55.36 percent of the exports share. Malaysia bought 98,792 MT-LME of dairy products, valued $37.51 million, from January to September.

DA told: Focus on agriculture production to alleviate poverty BusinessMirror 30th Jan 2017
A vice chairman of the House Committee on Economic Affairs on Monday said the Duterte administration should focus on the agriculture sector if it wants to alleviate poverty in the country. Liberal Party Rep. Josephine Ramirez-Sato of Oriental Mindoro made a statement after she expressed dismay over the poor performance of the agriculture sector during the last quarter of 2016. Earlier, the Philippine Statistics Authority (PSA) said the Philippine economy grew by 6.8 percent in 2016, the fastest in Asia, beating China (6.7 percent) and Vietnam (6.2 percent). During the last quarter, however, the country’s total economic production and performance, as measured by GDP, slowed down, recording only a 6.6-percent growth in the fourth quarter of 2016. But Sato said the PSA data also showed that agriculture sector declined further by 1.1 percent from October to December 2016.  The PSA said the decline was mainly due to two typhoons that hit the country during the period. “The Philippines can do better by investing more in agriculture, by putting in place appropriate programs that will address the multi-faceted problems besetting the sector,” Sato said. She added that the Department of Agriculture (DA) should intensify programs that make farming profitable to encourage farmers to do business in agriculture, hence boosting production and contributing to the country’s growth and development “the way it should.”

Local manufacturers’ group back unitary cigarette tax Philippine Daily Inquirer 30th Jan 2017
An association of local manufacturers has called on the Senate to junk the Lower House-approved bill to revert to the two-tier cigarette excise tax system that is being backed by homegrown Mighty Corp., which is now being investigated for allegedly using fake tax stamps. “How can the Senate act on a tax bill openly being pushed by a company now under investigation for tax evasion? No senator, especially the reelectionists, would want to be associated with this bill,” Federation of Philippine Industries chair Jesus L. Arranza said in a statement. Arranza was referring to House Bill (HB) No. 4144, which the Lower House already passed before Congress went on Christmas break even if it was filed only last October. HB 4144 was proposing that the two-tier system be maintained by slapping an excise tax rate of P32 a pack of cigarettes priced P11.50 and below as well as P36 for those priced higher. It also proposed an annual 5-percent increase in the excise tax beginning 2018. The bill was already transmitted to the Senate ways and means committee. But under Republic Act No. 10351 or the Sin Tax Reform Law, tobacco products were slapped a unitary rate of P30 a pack starting Jan. 1 this year, following a two-tier system last year wherein cigarettes priced P11.50 a pack were taxed P25 while those priced higher were slapped P29 a pack. Arranza had earlier pointed out that reverting to the two-tier cigarette excise tax system would violate the country’s antitrust law. “Once HB 4144 is passed in the Senate and becomes a law, I will file a case because that’s anticompetitive behavior,” according to Arranza.

Food security looks very different depending on where you are sitting The Conversation 22nd Jan 2017
In 1974, the World Food Conference declared that: “Every man, woman and child has the inalienable right to be free from hunger and malnutrition in order to develop their physical and mental faculties.” The conference set as its goal the eradication of hunger, food insecurity and malnutrition within a decade. Two decades later, in 1996, the World Food Summit was assembled in an explicit admission that this goal had not been met. More than 10,000 participants from 195 countries gathered in Rome and, over five days of intense discussion, set a target of reducing by half the number of undernourished people by no later than 2015. Food security was defined in the following declaration: The summit set out a seven-point plan of action, including managing population growth and migration, reducing poverty and promoting peace and stability. Ambitious goals which, so far, have failed with most future predictions showing things are going to get worse.

Sugar industry stakeholders to seek President’s help Manila Bulletin 20th Jan 2017
Stakeholders of the sugar industry will send a collective letter to President Rodrigo Duterte within the week to seek assistance in their campaign to stop the importation of the high fructose corn syrup (HFCS) by beverage companies. Kilusang Pagbabago-Negros Island Region spokesperson Archie Baribar said Thursday that they will ask the President to direct the Sugar Regulatory Administration (SRA) to immediately stop the importation of HFCS to protect the sugar industry.

Piñol eyes 10-year agriculture road map Business Mirror 18th Jan 2017
To address the perennial problems hounding the Philippine farm sector, Agriculture Secretary Emmanuel F. Piñol said on Wednesday he will push for a 10-year legislated road map to ensure the country’s food security. Piñol said legislating the food-security program will ensure its continuity even after President Duterte has stepped down from office.

Health & Life Sciences

USAID not closing doors on helping PH solve drug menace ABS-CBN News 3rd Feb 2017
The US government is not closing its doors to providing assistance to the Philippines to help solve the drug menace in the future, the US Agency for International Development (USAID) said Thursday. Gloria Steele, USAID Senior Deputy Assistant Administrator, said the US government has not placed any assistance to support the Duterte administration's war on drugs. "That was an area that was brought up. Right now, we don't have resources for that. We have not put in resources because the discussion is going on," she said. She said the non placement of funding on the war on drugs of President Duterte is not because of the alleged extra judicial killings and human rights violations but due to the financial programming of USAID, which is planned on a long-term basis. Assistance to other countries coming from USAID must be approved by US Congress; there are no conditions attached to USAID assistance given to foreign nations. The agency has been giving assistance to Latin America, Peru and Mexico to help the campaign against illegal drugs. Steele said the US is not closing its doors to the possibility of providing assistance to the Philippines in the future to help solve the country's drug problem. She said the Philippine Department of Health already brought up a possible partnership for rehabilitation facilities despite Duterte's previous statements maintaining that the Philippines does not need the assistance of the United States.

Duterte’s Free Birth-Control Order Is Latest Skirmish With Catholic Church The New York Times 27th Jan 2017
The Philippine president, Rodrigo Duterte, signed an executive order this month calling for the full and immediate enforcement of a 2012 law that would give six million women free government-distributed contraception and reproductive health services. Mr. Duterte portrayed the order as an antipoverty measure, with an official calling it “pro-life, pro-women, pro-children and pro-economic development.” But the order was also Mr. Duterte’s latest jab at the Roman Catholic Church, which wields significant power in the Philippines and has fought for years to keep the law from taking effect. Under the law, government agencies will provide modern family planning services, including free contraceptives and prenatal care to all women and families. The measure also mandates that sex education be taught in schools and that companies offer reproductive health services to their employees. But the law, which took more than 13 years to be passed by Congress before being signed into law in 2012, has yet to fully take effect, a testament to the power of the Catholic Church, anti-contraception groups and allied lawmakers. The church and other contraception opponents filed petitions with the Supreme Court, which issued several rulings blocking parts of the law. The court continues to prevent the Health Department from procuring, distributing or selling birth control implants, a ban that women’s health groups fear could be extended to the pill and other forms of hormonal birth control when existing certifications expire in 2018.

Red Cross helps communities prevent water-borne diseases using surveillance mechanism ReliefWeb 25th Jan 2017
The Philippine Red Cross, together with the state health department, and with support from the International Federation of Red Cross and Red Crescent Societies (IFRC), recently rolled out an orientation on the Surveillance in Post Extreme Emergencies and Disaster (SPEED) programme. SPEED is a mechanism activated during emergencies to provide real-time health information to around 65 Red Cross community volunteers in the provinces of Catanduanes, Albay, Camarines Sur and Marinduque.

‘Income inequality high despite robust economy’ The Manila Times 23rd Jan 2017
Income and social inequalities still persist in the country even as the economy shows brisk growth, with out-of-pocket spending for health care remaining a major portion of household expenditure, state-think tank Philippine Institute for Development Studies (PIDS) said. Given this, the government must expand its health benefit package for households, which should also include non-poor informal workers, PIDS said in a policy note. PIDS said that operationally, out-of-pocket spending, or OOP, is defined as “any direct outlay by households, including gratuities and in-kind payments, to health practitioners and suppliers of pharmaceuticals, therapeutic appliances, and other goods and services whose primary intent is to contribute to the restoration or enhancement of the health status of individuals or population groups. It is a part of private health expenditure. The level of OOP is an important indicator of an effective health-care system, it said.

Duterte orders full implementation of modern family planning by 2018 CNN 11th Jan 2017
President Rodrigo Duterte signed an executive order providing funds and support for modern family planning, in a bid to make modern family planning available to the poor by 2018. "This Order aims to intensify and accelerate the implementation of critical actions necessary to attain and sustain 'zero unmet need for modern family planning' for all poor households by 2018," reads Executive Order No. 12, signed by Duterte on January 9 and released on Wednesday. Among the strategies outlined in the four-page document is to do a comprehensive review of couples and individuals in need of family planning services.   "There is a plan in the next six months for local governments to go out in the field, to do house-to-house visits, identify those in need of family planning, [and work] with all these agencies," National Economic and Development Authority (NEDA) Director General Ernesto Pernia said in a press briefing Wednesday. Strengthening the Implementation of the Reproductive Health law is part of President Duterte's 10-point socio-economic agenda. 

Durterte's war on drugs is fanning the flames of the burgeoning HIV epidemic in the Philippines International Business Times 5th Jan 2017
The Philippines has long remained shielded from the global HIV epidemic, but things have changed in the last decade: the country has one of the fastest-growing HIV transmission rates in the world. According to the latest figures published by Aids/HIV registry of the Philippines, 3,112 people contracted the virus in July-October 2016, representing an average of 26 new cases diagnosed every day. The great majority of these occur through sexual contact among men who have unprotected sex with other men. The country's health authorities have been slow at recognising this and have struggled to deploy appropriate prevention and sexual health education, as a recent Amnesty International report has highlighted. Compared with sexual transmission, infection via drug injection currently represents a relatively minor threat in the Philippines. Over the same period (July-October), only 100 new cases were reported as relating to the sharing of infected needles. But this could soon change. Since President Rodrigo Duterte took office in May 2016 after campaigning on a platform of zero-tolerance against drug pushers and addicts, charities are worried that the number of new HIV cases due to drug injection may explode in the next few years as the government moves away from public health concerns to adopt more repressive policies.

ICT

IT-BPM sector expects sustained growth to continue Manila Bulletin Business 4th Feb 2017
The domestic IT-business process management industry is confident it can sustain growth saying they are on track with the projections under the new roadmap because businesses around the world continue to invest and expand in the Philippines. Ike Amigo, president and CEO of IBPAP (IT & Business Process Association of the Philippines) has confirmed that the projections of the Accelerate PH Roadmap 2022 are on track and the industry is geared to solve the challenges that, once overcome, will become a reason for increased global interest in Philippine IT-BPM services and revenue for the country. According to Amigo, the IBPAP the Philippines’ thriving IT and business process management (IT-BPM) sector remains positive in carrying out its plans for the coming years. This is because businesses from all over the world continue to express interest in investing in Philippine IT-BPM services. Some of these include: United States, Japan, New Zealand, Australia, Canada, India, and more. In fact, in addition to its thorough research in putting together the IBPAP did a recent quick-poll among its members to gauge the interest of global investors and found that they are continuing expansion plans to the Philippines. IBPAP issued this statement in reaction to an earlier statement of the Director-General of the Philippine Economic Zone Authority Charito Plaza that expansion projects of IT-BPM companies in the country have been put on hold because of the pronouncements of new US President Donald Trump that he will ban offshoring of American jobs. The Trump administration is seeking to pass the bill on “End of Offshoring Act” within its first 100 days in office.

Philippine outsourcing sector braced for Duterte and Trump effect Financial Times 22nd Jan 2017
Business from the US has driven a long boom in the Philippines’ flagship outsourcing industry, but potential political threats to ambitious growth plans now loom in both countries.  Global companies are scrambling to work out whether tough talk from Rodrigo Duterte and Donald Trump, the Philippine and US presidents, will mean trouble if they run operations in the Philippines. The election of the two outspoken presidents has raised an unexpected hurdle to the Philippine outsourcing industry’s goal to almost double revenues by expanding the range and geographic spread of the services it offers. Executives hope the new leaders will not target an industry that has helped push economic growth towards regional highs. 

PHL set to launch state-of-the-art air-traffic facilities BusinessMirror 5th Jan 2017
The soon-to-be-completed facilities of the next-generation satellite-based Communications, Navigation, Surveillance/Air Traffic Management (CNS/ATM) will put the Philippine aviation regulator on a par with its Asian neighbors Japan, South Korea, Singapore and China. The Japan International Cooperation Agency’s ¥22,049-million project is expected to complete the physical installation of all associated facilities by June this year to make way for full operation by the end of the year. The Philippines would be able to monitor 80 percent of the Manila Flight Information Region as assigned to the Philippines by the International Civil Aviation Organization (ICAO). The CNS/ATM is a computer-based flight data-processing system that enables aircraft operators to meet their planned times of departure and arrival, and adhere to their preferred flight profiles with minimum constraints and without compromising safety. The CNS/ATM was created to establish satellite-based CNS/ATM systems according to the specifications of the ICAO; deploy vital air-transport communication, surveillance and information facilities; and replace aging communication and air-traffic equipment in select airports nationwide. With the planned deployment, the Civil Aviation Authority of the Philippines will need to engage the services of 500 air-traffic controllers  over the next five years, when the satellite-based CNS/ATM system becomes fully operational.

Infrastructure

BusinessWorld | BMI flags poor PPP environment BusinessWorld 3rd Feb 2017
A poor environment for carrying out public-private partnership (PPP) projects risks spoiling investor appetite towards state construction deals despite a revitalized infrastructure push under the new administration, analysts at BMI Research said. “[D]espite the Philippines’ strong PPP regulations, the country’s subpar business environment continues to hold back key infrastructure projects,” the Fitch unit said in a report released yesterday as it cited lapses in the rollout of big-ticket PPP deals. “Although the World Bank ranks the Philippines’ PPP regulations as among the best in the world as it has clear and well-defined laws, transparency requirements and an independent dedicated agency, our Project Risk Index shows that the operating environment for infrastructure projects is still far behind,” BMI said. “We believe that good PPP regulations are important in bringing private finance and expertise to the infrastructure sector, but the case of the Philippines shows that improvements in a country’s fundamental operating environment are also essential.” Business groups have repeatedly pressed for reforms in the country’s build-operate-transfer and right-of-way laws to address legal impediments and fast-track project implementation, alongside cutting red tape in order to improve the local investment climate.

P100-B tollroad projects proposed Philippine Daily Inquirer 2nd Feb 2017
Two unsolicited tollroad projects valued at more than P100 billion have been proposed to ease road congestion in Metro Manila and nearby provinces. The projects were the 102-kilometer Manila to Quezon Expressway and the 17.7-km Manila to Taguig Expressway. The latter was submitted by the group that built the Metro Manila Skyway project. The projects would be evaluated by the Department of Public Works and Highways. According to the department, the Manila-Quezon expressway proposal covered the design, finance, construction, operation and maintenance of a tollroad that would cross Laguna de Bay and link Pasig City and Candelaria, Quezon. The P66.7-billion project, proposed by Grand Metro Manila Gateway Co. Inc., was aimed at alleviating traffic at the South Luzon Expressway. The project is also expected to boost development in Southern Tagalog areas, the DPWH said. The second unsolicited proposal was an almost P50-billion project that would rise “mostly along the Pasig River” and would connect Rizal province through Pasig, Makati and Manila. The proposals were made as President Duterte signaled his administration would welcome unsolicited bids. These were discouraged during the Aquino administration, which had a well-known bias against unsolicited projects. Projects pursued under the unsolicited mode would need to undergo a competitive challenge. Under this format, the government selects the project and bidders are invited to challenge the proponent. In case a superior bid is made, the project proponent is allowed to match the rival offer and be declared the winner.

PCC seeks DTI’s assistance on foreign contractor licensing BusinessWorld 1st Feb 2017
The Philippine Competition Commission (PCC) is seeking the help of the Department of Trade and Industry (DTI) in revising rules that currently make it difficult for foreign construction firms to do business here in the country. Commissioner El Cid R. Butuyan told BusinessWorld that the commission reached out to the DTI earlier in January for possible revisions in the nationality requirement for the licensing of contractors. The PCC filed an amicus curiae (friend of the court) brief with the Supreme Court on Dec. 19 by way of commenting on an ongoing case between the Philippine Contractors Accreditation Board (PCAB) and the Manila Water Company, Inc. (MWCI). In its brief, PCC asked the high court to nullify section 3.1 of the IRR, which licenses local contractors on a yearly basis, while requiring foreign contractors to seek licenses for each new construction project. This, in essence, is anti-competitive, PCC said. The PCAB issues two types of license to contractors -- Regular and Special. The Regular license is issued to domestic contractors and is valid for a year. The Special license is issued to joint ventures, consortia, or foreign contractors and is valid for individual projects only. Citing PCAB data, PCC said that out of the 1,600 Special licenses issued in 2015, only 20 were issued to foreign firms while four were issued to joint ventures or consortia with foreign participation. This is part of PCC’s efforts to conduct a “regulatory lookback,” which pertains to a review of existing policies to see which are anti-competitive.

Gov’t speeds up spending on infra philstar.com 31st Jan 2017
The government is aiming to accelerate infrastructure development this year through reforms in the procurement and implementation of projects, the Department of Budget and Management (DBM) said yesterday. In a statement, the DBM said the improved set of implementing rules and regulations of Republic Act 9184 or the Procurement Law would help expedite the launch and completion of infrastructure programs in the pipeline. Reforms in the execution of projects, such as the introduction of geo-tagging for improved project monitoring and allowing non-stop construction work to hasten project completion, will also be implemented. The government has allocated a total of P847.2 billion for nationwide infrastructure projects this year, up 13.8 percent from a year ago. The amount also accounted for about 25 percent of this year’s budget. Under the General Appropriations Act approved by President Duterte last December, the bulk, or P349.1 billion of the infrastructure budget was allotted to the Department of Public Works and Highways (DPWH), the Department of Agriculture, the Autonomous Region in Muslim Mindanao, and other government agencies and local government units. The Department of Transportation (DOTr), for its part, will spearhead the construction of bus transport systems that are envisioned to provide efficient, comfortable and inexpensive transportation to commuters in Metro Manila and Cebu.

Ledac bats for reforms in procurement process | BusinessMirror BusinessMirror 31st Jan 2017
To usher in the “golden age of infrastructure,” the Duterte administration said it will shorten the procurement process by amending the implementing rules and regulations (IRR) of the country’s procurement law. National Economic and Development Authority (Neda) Director General Ernesto M. Pernia said this is the reason the amendment of the IRR of Republic Act (RA) 9184, or the Government Procurement Act, has been identified as one of the priorities of the Legislative-Executive Development Advisory Council (Ledac). Pernia said the country’s “long” procurement process is slowing down the implementation of the government’s infrastructure projects. “We also talked about reforming procurement law, so that we can speed up construction of projects,” he said in a forum on Tuesday. The Neda chief said the IRR will be modified and revised to shorten the time needed to implement projects. He said this will be done by removing unnecessary provisions in the IRR, which he did not detail. This is also in keeping with one of the President’s primary directives to cut red tape and streamline government processes when he assumed office. Apart from streamlining the procurement process, Pernia said the government will revise the composition of the Ledac. Pernia said the Ledac will soon be called the Lejac to reflect the addition of the Judiciary in the council.

Duterte asked to open up construction sector BusinessMirror 30th Jan 2017
Easing the nationality requirement in the construction sector is one solid indication that the Duterte administration is really serious in pursuing its P8-trillion “golden age of infrastructure” program, the Joint Foreign Chambers (JFC) said. By relaxing the current 60-percent Filipino-equity requirement in the sector, the JFC said President Duterte will also gain more support from international investors for his grand infra push. “Given the focus of the administration of President Duterte on infrastructure development, which is fully supported by the business community, it will be necessary to create an environment in which infrastructure projects can be implemented effectively and timely,” the JFC added in the statement. The JFC said fair competition in the construction and engineering sectors is currently being undermined by the Philippine Contractors Accreditation Board (PCAB). The foreign business association has long been at loggerheads with the accreditation body for contractors, which operates under the auspices of the Department of Trade and Industry (DTI). Even the Philippine Competition Commission (PCC), in a comment sent to the Supreme Court recently, highlighted the importance of having a level playing field among contractors in the  construction industry. “It is a settled principle in economics that, if there are many players in the market, healthy competition will ensue. Competition results in better quality products and competitive prices that will benefit the public,” the PCC said in its brief. Competition in the construction industry would result in improvements in production processes, leading to economic benefits for the country.

China and Philippines agree to cooperate on 30 projects worth US$3.7b South China Morning Post 23rd Jan 2017
Beijing has agreed on ­bilateral cooperation with Manila on 30 projects worth US$3.7 billion, ­including ones for infrastructure and poverty alleviation. The agreement was reached after a meeting between Commerce Minister Gao Hucheng and Philippine Finance Secretary Carlos Dominguez III, who has been leading a cabinet delegation on its three-day visit to Beijing. Gao announced the deals without giving details, saying this “initial batch” of projects still needed to be finalised and then processed by the banks involved. Dominguez said he had a “very productive” meeting with Gao, and that they had discussed large projects in rural areas as well as some smaller bilateral undertakings, according to a report from Reuters. The meetings would cover cooperation on infrastructure projects such as the North-South railway line as well as the Min­danao and Subic-Clark lines, the Philippine Department of ­Finance said yesterday. Officials would also discuss some already proposed projects for bilateral financing and feasibility studies as well as the chairmanship by the Philippines this year of the Association of Southeast Asian Nations, the department’s statement said. Beijing has welcomed Duterte’s foreign policy shift away from traditional ally the United States, and towards doing more regional deals and business with China. Officials pledged US$15 billion in investment in the Philippines during Duterte’s visit to China in October, according to the Philippine Department of Finance. Duterte is due to visit Beijing again in May for a forum on China’s “One Belt, One Road” infrastructure scheme.

Lawmaker seeks change to BOT Law philstar.com 9th Jan 2017
Camarines Sur Rep. Luis Raymund Villafuerte has filed a bill that seeks to amend the Build-Operate-Transfer (BOT) Law to allow local government units (LGUs) to implement their own public-private partnership (PPP) programs. He said the bill would institutionalize the PPP mode of financing for both national government and LGU projects. “Although our country is one of the pioneers in private sector participation in major infrastructure projects in Asia with the enactment of the BOT Law, we have yet to fully utilize the advantages of the PPP as shown by our status as among the laggards in the region in terms of public infrastructure,” he said. Villafuerte noted that the administration plans to spend P8 trillion on public infrastructure between now and 2022 to sustain high growth and spared its benefits among all sectors. His proposed changes in the BOT law include strengthening the PPP institutional framework, providing financial and technical support, mandating transparent and competitive bidding, setting project standards, and granting incentives for PPP projects. Villafuerte, who is vice chairman of the House Committee on Local Government, said empowering LGUs in implementing PPP projects should be part of the preparatory measures that the national government should prioritize in paving the way for the switch to a federal system of government. “Federalism will empower LGUs to decide for themselves and craft their own development agendas customized in accordance to their respective resources, problems, development paths and potentials for growth,” he said. Speaker Pantaleon Alvarez has said the House would start working on the proposed shift to the federal system during the first quarter of this year.

Growth hinges on infrastructure plan BusinessWorld 5th Jan 2017
Sustaining the Philippines’ rosy growth story largely depends on the Duterte government’s ability to roll out infrastructure projects, an analyst at BMI Research said, signaling confidence this can be done even if no public-private partnership (PPP) project had been awarded in the first six months of the new administration. In the January edition of its Asia Monitor, BMI Research said economic growth should remain robust over the near term, assuming that the new administration carries out its plan to ramp up infrastructure spending. “Economic growth performance will largely depend on the Duterte administration’s ability to cut through red tape and get infrastructure and investment projects going, as well as to reassure investors of the government’s commitment to maintain and improve the public-private partnership program,” the report read. The current administration is looking to increase spending on infrastructure to an equivalent of 7.1% of gross domestic product (GDP) by 2022 -- the year its term ends -- from a programmed 4.3% of GDP in 2015 and from 1.8% in 2010, according to the December issue of EconomyPH of the government’s Investor Relations Office. This year’s P3.35-trillion national budget programs spending on public infrastructure to increase 13.79% to P860.7 billion equivalent to 5.4% of GDP in 2017 from P756.4 billion, or 5.1% of GDP, in 2016. Budget Secretary Benjamin E. Diokno said the administration expects to spend up to P9 trillion from 2017 to 2022 to plug the infrastructure gap which economists said has hampered the country’s growth potential.

Philippines Plans New Ro-Ro Terminal The Maritime Executive 5th Jan 2017
The Philippines Department of Transportation (DOTr) is studying a proposal to develop a common-user barge and ro-ro terminal in the province of Cavite, Philippines. DOTr says that the proposal, submitted by International Container Terminal Services, is in line with the agency’s proposed national transport plan to move goods through nautical highways more efficiently.  The Cavite Gateway Terminal (CGT) will support government initiatives to decongest Manila’s streets by reducing truck traffic on roads around the metropolitan area. CGT will be located within a six-hectare property in Tanza, Cavite. It will have a level of integration with other major Luzon port facilities for more cost-effective and time-bound access to the Cavite market for both inbound and outbound cargo.  Phase 1 of CGT’s development will support a throughput of 115,000 TEUs per year. The net effect of transshipping cargo from Manila’s ports to Cavite via barge and ro-ro equates to approximately 140,000 fewer truck trips on city roads on an annual basis. The terminal will also present new employment opportunities, both direct and indirect, for the provincial labor pool. Succeeding phases of CGT will support a substantial increase in capacity and will be built to account for projected annual volume increases in the Cavite market.

2017- 2021: The Philippines’ Golden Age for infrastructure and investments The Manila Times 5th Jan 2017
IN the next six years, P8 trillion will be up for grabs for consultants, contractors, and developers to accomplish crucial infrastructure projects. From the conversations I’ve had with several investors and business leaders, the opportunities are more than enough for local investors. Investors even said that definitely we would need the help of foreign contractors and developers to bring in expertise, technology, operations management, and funding. It’s possible that in the next few years we might see 20 kilometer-long bridges, connecting Bataan to Calabarzon, which I have been proposing for a very long time and named as Circumferential Road 10, and a bridge connecting the Visayas to Mindanao.

P100-B Manila-Subic expressway/railway for President’s approval Update Philippines 4th Jan 2017
Subic Bay Metropolitan Authority (SBMA) Chairman Martin Diño today said that he has submitted to President Rodrigo Duterte a list of infrastructure projects worth approximately PhP 140 billion. “The projects I submitted to the President are worth P140 billion,” Diño said in a roundtable in Quezon City as quoted by GMA News Online. Included in the list are Construction of multi-modal (expressway and railway) elevated highway connecting Subic Bay to Manila Port worth approximately 100 billion pesos, Expansion of Container Terminals 3 and 4, Construction of bypass road connecting seaport terminals to SCTEX, Upgrading of Subic Airport to international standards, and Widening of Ipo Road to four lanes. Diño previously said that the Manila-Subic expressway/railway “would shift cargo transit to Subic Port to relieve port congestion that has built up in the Port of Manila’s two container terminals. It would speed up the movement of goods in and out of the Port of Manila to serve its giant market of 20 million consumers; and it would finally help decongest heavy traffic in the metropolis.”

Groundwork for MRT 7 officially starts Update Philippines 4th Jan 2017
The Department of Transportation (DOTr) and San Miguel Corp. today conducted a ceremony for the start of construction of Metro Rail Transit Line 7 (MRT 7) at Doña Carmen, Quezon City. Conglomerate San Miguel Corporation (SMC) has full control of MRT 7 project and its designated facility operator. The MRT 7 project involves the financing, design, construction, operation and maintenance of the 23-kilometer elevated railway line with 14 stations from San Jose Del Monte, Bulacan to MRT 3 North Avenue in Quezon City; and the 22-kilometer asphalt road from Bocaue Interchange of the North Luzon Expressway (NLEX) to the intermodal terminal in Tala.

Proudly Pinoy technology solutions to address traffic woes Update Philippines 4th Jan 2017
Occidental Mindoro Rep. Josephine Ramirez Sato on Thursday urged the government to give full support to locally-developed mass transport systems as a practical solution in easing traffic congestion in urban centers throughout the country. According to the lady lawmaker, the Department of Science and Technology (DOST) already has several pilot mass transport projects developed by the country’s science and technology experts just waiting to be utilized. Sato, who heads the committee on Science and Technology of the powerful Commission on Appointments (CA), wants the DOST to take the lead in pursuing local technology solutions to traffic congestion. Sato fully supported the agency’s plan to inject science-based solutions to pressing problems such as traffic and the CA subsequently approved Dela Peña’s ad interim appointment on Wednesday. The Occidental Mindoro lawmaker said she is now inclined to support a budget increase for research and development to boost “Filipinnovations,” or what she calls “local innovative solutions” developed by the country’s science and technology experts.

SBMA proposes P100-B expressway-railway from Manila to Subic Rappler 4th Jan 2017
The Subic Bay Metropolitan Authority (SBMA) has proposed to the government a P100-billion elevated expressway and railway connecting Subic Bay to the Port of Manila to "shift the momentum of development" in the metropolis toward Subic and Clark. SBMA Chairman Martin Diño said in a statement that he would ask for the Office of the President's approval to include the financing of the project under the Philippine-China Framework of Cooperation, which was signed during President Rodrigo Duterte's state visit to Beijing, China. The proposed infrastructure, he explained, would shift cargo transit to the Subic Port to ease the congestion that has built up in the Port of Manila's two container terminals.

It's a Go for Manila-Clark Railway Project - BCDA Mass Transit 4th Jan 2017
The government is proceeding with a railway project that will aim to cut transit time between Manila and Clark Freeport Zone in Pampanga to one hour, an official said on Thursday. "The plan is to continue the railway project [Manila to Clark] within President Rodrigo Duterte's administration," Vivencio Dizon, president and chief executive of the Bases Conversion and Development Authority (BCDA) told reporters. Dizon said the Manila-Clark railway project is a priority of the Duterte administration. The initial plan was just to link Malolos in Bulacan to Clark in a rail project that was expected to cost around P117 billion. However, the DOTC announced last year that they planned to expand the coverage of the project from Malolos to Tutuban in Manila, thereby extending the railway from Manila to Clark. The Clark Rail segment will then link with the P288-billion North-South Commuter Rail (NSCR) project, which was approved by the National Economic and Development Authority Board in February 2015.

Bacolod Economic Highway bidding process starts next week Update Philippines 4th Jan 2017
The bidding process for the Php4.8 billion Bacolod Economic Highway (BEH) is set to start next week. This was announced by Bacolod City Lone District Representative Greg Gasataya Wednesday, saying the schedule was relayed to him by the Department of Public Works and Highway-Negros Island Region (DPWH-NIR). In September, the DPWH started negotiating with landowners who will be affected by the construction of the 24-kilometer highway. The DPWH then discussed the project with city officials and with the landowners to determine the exact area to be affected by the construction. It is expected to affect the properties of about 100 landowners. Gasataya said the DPWH committed to fast track the payment of the road right-of-way. The landowners will be paid based on the market value of the property, he added. The 24-kilometer BEH will cover areas across Barangays Sum-ag, Cabug, Felisa, Handumanan, Mansilingan, Estefania, Granada, Mandalagan, and Bata. Gasataya said the BEH is seen to open a new growth area in the city, and improve the traffic situation since an alternative route will be constructed.

Business interest on Mindanao remains: Malaysian envoy says Sun.Star 4th Jan 2017
In his visit to Malaysia last November, President Rodrigo Duterte said Malaysian business leaders expressed confidence in the many investment opportunities in the Philippines. The President added that Malaysian business leaders showed interest in investing in infrastructure, mass transportation development, building of regional centers, joint ventures in agribusiness, halal-certified products, and high value post-harvest processing facilities. Trade and industry secretary Ramon Lopez, in a previous report said there are already initial discussions with the Minister of Trade of Malaysia and a meeting with the Malaysia - Philippines Business Council headed by their President Dr. Tan Sri Azmil Khalid, the President and CEO of one of the largest infrastructure company with existing projects in the country. There are current investments like the Investment Promotion Agency with approved investment of about USD63 million.

Metro Manila flood control, bus rapid transit projects eyed for AIIB financing Rappler 3rd Jan 2017
A flood control project and a bus rapid transit (BRT) system, both in Metro Manila, are the first two infrastructure deals to be presented to the Asian Infrastructure Investment Bank (AIIB) for possible funding, after the Philippines' formal entry as a founding member of the Beijing-backed lender. Following last week's ratification by the Senate of the Articles of Agreement, National Treasurer Roberto Tan said in a statement on Monday, December 12, that the government may now request that the AIIB send a mission to the Philippines to discuss the proposed list of projects prepared by the National Economic and Development Authority (NEDA) for the bank's financing.

Infrastructure investment to boost GDP growth to 7 percent this year–BPI economist Business Mirror 2nd Jan 2017
The delivery of key infrastructure projects and programs can lift the Philippine GDP to around 7 percent in 2017, an economist said. He expects public spending mainly boosting this year’s economic growth. The government is ramping up public infrastructure spending to a record high P890.9 billion this year, or 5.2 percent of the country’s GDP. It targets to raise infrastructure spending as a share of GDP to 7 percent by 2022. The economist noted the government, thus, needs to enhance its ability to fund in the next six years its ambitious infrastructure programs, under the so-called Golden Age of Infrastructure of the new administration.

Lawmaker lists 12 top events driving PHL optimism for 2017 Business Mirror 2nd Jan 2017
The Philippines registered its most significant gains in 2016 under President Duterte, as the fastest-growing economy in Asia—a 7.1 percent  third quarter growth, its most robust in three years, which even surpassed China’s 6.7 percent  and Vietnam’s 6.4 percent. Noted  economist and Albay Rep. Joey S. Salceda, a member of the Duterte economic team, lists a dozen economic developments and events this year, on which the man on the street can brightly look forward to, as growth drivers. The year 2017 also jump-starts the “Golden Era of Transportation in the Philippines,” the eighth significant event, which includes the rapid development of international airports in Puerto Princesa City in Palawan, Daraga in Albay and Panglao in Bohol. This also includes the kick-off of the Mindanao Railways and the Southline component of the North-South Railways Program; the implementation of the bridges between Matnog, Sorogon and Allen, Samar, and between Leyte and Surigao. The list puts in ninth the implementation of the 42 industry road maps, Manufacturing Resurgence Program, small and medium enterprise in global value chain development and the new Investment Priority Plan of the Duterte administration. In 10th spot are the business trophy investments from Japan, including $25 billion committed by Marubeni and the big-ticket infrastructures funded by loans from China, seen to push further the country’s economic growth.

Businessmen’s wish list for 2017 Inquirer.net 2nd Jan 2017
Despite the growing confidence of the business community in the Duterte administration, the Philippine Chamber of Commerce Inc. (PCCI) is hopeful the government will be able to address crucial issues that will affect the investment climate in the country. Under this proposal, principal companies will be allowed to retain that flexibility of contracting certain services from third party agencies or service providers, which are expected to provide their workers a regular and permanent status, and will be mandated to provide benefits including retirement and separation packages. Also, the workers being deployed should not be co-terminus with the agency’s contract with the principal company. This would assure workers of security of tenure. Legitimate contractualization, according to certain quarters, is different from the illegal endo schemes wherein workers are hired temporarily for a five-month contract and transferred to another entity for another five-month contract. The head of the country’s biggest business organization was referring specifically to projects concerning transport and infrastructure and the proposed emergency powers by the Department of Transportation. For Management Association of the Philippines (MAP), its president, Perry Pe, said they were hopeful that the administration would push through with its plans to reduce corporate and individual taxes; cut red tape and further ease doing business in the country; lift the economic restrictions in the Philippines; continue honoring existing contracts, and further accelerating infrastructure spending.

Gov’t shortlists Japanese bidders for LRT-1 trains philstar.com 1st Jan 2017
The government is seeking anew offers from Japanese firms for the supply of 120 new light rail vehicles (LRVs) for the Light Rail Transit Line 1 (LRT-1) after a failed bidding last March. “Pursuant to the rules for Official Development Assistance (ODA) Funding, the DOTr (Department of Transportation) is inviting eligible Engineering, Procurement and Construction (EPC) Bidders of Japanese nationality to participate in the Competitive Bidding process following the procedures specified in the Guidelines for Procurement on the Japanese ODA Loans for the Procurement of New Rolling Stock LRV (4th Generation),” the department said in an invitation to bidders. The invitation was issued for the procurement of 120 new LRVs for the LRT-1 running from Roosevelt station in Quezon City to Baclaran station in Pasay City. The LRT-1’s extension would cover 11.7 kilometers or eight new stations across Pasay City, Parañaque City, Las Piñas City and Cavite.

Manufacturing

Toyota seeks gradual hike in auto excise tax philstar.com 30th Jan 2017
Toyota Motors Philippines Corp. (TMPC), the country’s market leader in automotive sales, said it is amenable to the planned excise tax hike on motor vehicles but urged the government for a “tempered” increase to avoid derailing the industry’s growth. TMPC vice chairman Alfred Ty expressed concern on the government’s current proposed rate, saying it is too high and would be detrimental to the local automotive industry. The House of Representatives is currently considering an administration proposal that would jack up excise tax by 100 percent for vehicles costing up to P1.1 million, and by more than 300 percent for those priced over P2.1 million. Under House Bill 4774 sponsored by Quirino Rep. Dakila Cua, the tax on automobiles priced up to P600,000 will go up from two percent to four percent, while those selling over P600,000 to P1.l million would be taxed at P24,000 (up from P12,000) plus 40 percent (up from 20 percent) of the amount in excess of P600,000. Those selling over P1.1 million up to P2.1 million, meanwhile, would be taxed P224,000 (up from P112,000) plus 100 percent (up from 40 percent) of the amount in excess of P1.1 million. Cars costing more than P2.1 million would have a tax amounting to P1.22 million (up from P512,000) plus 200 percent (up from 60 percent) of the amount in excess of P2.1 million. These new rates, however, are still not acceptable to the automotive industry.