| Regional Affairs
Does PHL hold the US ‘China Card’? BusinessMirror 2nd Jun 2016
The IISS Shangri-La Dialogue, or the 15th Asia Security Summit, will be held from June 3 to 5 in Singapore. This event is sponsored by the International Institute for Strategic Studies, “where Asia-Pacific defense ministers engage in dialogue aimed at building confidence and fostering practical cooperation.”
Duterte set to pursue Sabah claim The Star Online 2nd Jun 2016
Philippine President-elect Rodrigo Duterte said he would stick to the government’s original position on the Sabah issue. “I stick with the original position of the government, nothing has changed,” Duterte said. He was asked by the Inquirer on his government’s plan on the country’s claim over Sabah. “But only through peaceful means. We don’t have the luxury of getting into trouble or another war, we just have to talk to everybody to develop our country. “We can’t afford to fight, let’s just talk, and I hope Malaysians will understand. “We will make clear to them what is going to happen. “If we file an actual case in (the international) court, and it is sure we will win, and yet, we don’t want trouble, so can we resolve this by other means?” Duterte said. It was reported that Sabah Chief Minister Datuk Seri Musa Aman had reaffirmed that the state would never acknowledge any such claim and would continue to be a part of Malaysia. Prime Minister Datuk Seri Najib Tun Razak had also responded by saying that Sabah’s independence through Malaysia has been internationally recognised by the United Nations since 1963.
China to Duterte admin: Return to dialogue Rappler 1st Jun 2016
China on Wednesday, June 1, urged the Philippines' incoming Duterte administration to "return to dialogue" to resolve the dispute between Manila and Beijing over the West Philippine Sea (South China Sea). "We hope the Philippines' new government can honor their commitments and return to dialogue with China to properly handle the disputes so as to contribute to the healthy and stable development of bilateral relations," Chinese Foreign Ministry spokesperson Hua Chunying said. The state-run Xinhua News Agency reported Hua's statement on Wednesday. Hua was reacting to the comment by incoming Philippine Foreign Secretary Perfecto Yasay Jr supporting bilateral or one-on-one talks between the Philippines and China.
Duterte admin open to multilateral talks on South China Sea issue - Yasay CNN Philippines 31st May 2016
Metro Manila (CNN Philippines) — Less than a month before president-elect Rodrigo Duterte assumes office, incoming Foreign Affairs Sec. Perfecto Yasay said the next administration was willing to "explore" the necessity of multilateral negotiations to resolve the issue on the disputed South China Sea. In an interview with CNN Philippines on Tuesday, Yasay stressed that although bilateral or multilateral talks were possible, in the end, the decision of the United Nations (UN) arbitral tribunal must prevail.
G7 leaders agree on sending strong message on South China Sea Philippine Star 27th May 2016
The leaders of the Group of Seven (G7) advanced economies have agreed that there is a need to send a strong message on China's maritime claims in the South China Sea. China is locked in territorial disputes with Japan and several Southeast Asian nations including the Philippines and Vietnam. "Prime Minister (Shinzo) Abe led discussion on the current situation in the South China Sea and East China Sea. Other G7 leaders said it is necessary for G7 to issue a clear signal," Japanese Deputy Chief Cabinet Secretary Hiroshige Seko said. According to reports, this agreement prompted a sharp rejoinder from China, which is not a member of the G7. China warned the G7 that it should not meddle with the South China Sea issue and suggested that the group should focus on itself and "not poke its nose into other countries or matters beyond its remit."
PH to assert claims over Spratlys, Sabah – Duterte Manila Bulletin 27th May 2016
Incoming President Rodrigo Duterte turned his tough talk on China and Malaysia as he maintained that the Philippines would assert its claims over disputed territories in the West Philippine Sea and Sabah, respectively. “Whether you want to believe it or not, that is beside the point. The point is, that is ours,” Duterte said in a press conference early Thursday. He was referring to territories in the Spratly Islands in the West Philippine Sea, which were claimed by China when the Asian giant built artificial islands on reefs and shoals, then established structures. China has been maintaining that the disputed areas fall within the “nine-dash line” which it asserts as its territory. But the Philippines has challenged this claim in the United Nations Arbitral Tribunal and said that China violated the United Nations Convention on the Law of the Sea (UNCLOS), on exclusive economic zones and territorial seas. Duterte likewise maintained that his administration “will stick to our claim” on Sabah. “We are allowing proprietary heirs to talk (with Malaysia). Since it is part of our claim, it will be there as our land,” he said.
Duterte insists West PH Sea, Sabah territories belong to PH Manila Bulletin 26th May 2016
Incoming president Rodrigo Duterte turned his tough talk on China and Malaysia as he maintained that the Philippines would assert its claims over disputed territories in the West Philippine Sea and Sabah. “Whether you want to believe it or not, that is beside the point. The point is, that is ours,” Duterte said in a press conference early Thursday. He was referring to territories in the Spartly Islands located in the West Philippine Sea which were claimed by China when the Asian giant established structures in some of the islands. China has been maintaining that the disputed areas fall within the “nine-dotted line” which it asserts as its territory. But the Philippines has challenged this claim in the International Tribunal for the Law of the Sea, and said that China violated the United Nation Convention on the Law of the Sea, or UNCLOS, on exclusive economic zones and territorial seas. Duterte likewise maintained that his administration “will stick to our claim” on Sabah. “We are allowing proprietary heirs to talk (with Malaysia). Since it is part of our claim, it will be there as our land,” he said.
National Affairs
17 senators back Koko for Senate presidency Inquirer 8th Jun 2016
With the Liberal Party (LP) and the Nationalist People’s Coalition (NPC) joining the emergent Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban), a “supermajority” has emerged in the Senate, giving President-elect Rodrigo Duterte control of Congress and assuring support for his legislative agenda that includes a shift toward federalism and the return of the death penalty. Sen. Aquilino “Koko” Pimentel III, president of the PDP-Laban that fielded Duterte as its standard-bearer in the May 9 elections, is likely to be voted Senate President in the 17th Congress. Pimentel, Senate President Franklin Drilon of the LP and Sen. Vicente Sotto III of the NPC have decided to join forces to form the supermajority of 18 senators, Sotto told the Inquirer on Tuesday, two months before the new Congress convenes on July 25.
Duterte secures ‘super majority’ in House The Philippine Star 8th Jun 2016
With Speaker Feliciano Belmonte Jr. coming here to express the Liberal Party’s support for the incoming administration, president-elect Rodrigo Duterte has secured a “super majority” in the House of Representatives, giving him leverage to push his agenda, an ally said yesterday. Davao del Norte Rep. Pantaleon Alvarez, a member of the Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban), said more than 200 lawmakers are joining the bloc and would also support his bid to become House speaker. Alvarez said Liberal Party (LP) members are among those who support his bid for the speakership. “With the support of Speaker (Feliciano) Belmonte, we will have a super majority,” Alvarez told reporters in a chance interview here. There are about 290 members of the House of Representatives. Alvarez said about 60 members of the super majority belong to PDP-Laban, while the rest are from the Nacionalista Party of businessman Manuel Villar, the Nationalist People’s Coalition of tycoon Eduardo Cojuangco Jr., the National Unity Party, Lakas of detained former president Gloria Macapagal-Arroyo and LP. While Duterte’s allies have mustered enough numbers to become what they described as a super majority, Belmonte said the House would not be reduced to a mere rubber stamp of the Palace.
DTI opens first of 4 innovation hubs for business start-ups, SMEs BusinessMirror 7th Jun 2016
The Department of Trade and Industry (DTI) is looking to set up three more innovation hubs catering to start-ups this year, offering coworking spaces to technology-based micro, small and medium enterprises (MSMEs). This was announced at the soft launch of the DTI’s first “Negosyo Center Plus: Innovation Hub”—an iteration of the agency’s one-stop shop Negosyo Centers—that specifically caters to start-ups, at the DTI International Building in Makati City on Monday. The project is done through the Export Marketing Bureau (EMB), an attached office of the DTI, in support of the SlingshotMNL initiative to create an “innovation ecosystem” nationwide. Trade Secretary Adrian S. Cristobal Jr. said the hub provides space for start-ups to meet with prospective clients, network with government-agency experts and conduct businesses, under the guidance of concerned government agencies. EMB Director Senen M. Perlada said that enabling innovation is a key goal in the Philippine Export Development Plan (PEDP), the export component of the PEDP. The PEDP underscores that having a National Innovative System (NIS) plays a part in enhancing the innovative capacity of the export sector. Part of the NIS is providing an avenue for interaction and collaboration between and industries, which is what the innovation centers provide. The innovation centers will serve as venues where technology-based start-ups can meet and pitch ideas to investors, as well as collaborate with similar start-ups.
Duterte names former NPA rebel as labor undersecretary Inquirer 2nd Jun 2016
President-elect Rodrigo Duterte Thursday night named more members in his Cabinet, led by a former Anakpawis congressman. In his press conference at the presidential guest house here, Duterte said former Anakpawis Rep. Joel Maglungsod is his new undersecretary in the Department of Labor and Employment. Duterte said Maglungsod is a former New People’s Amy rebel. Maglungsod is the latest of the progressives Duterte included in his Cabinet. He earlier put former Anakpawis Rep. Rafael Mariano as agrarian reform secretary and activist UP Prof. Judy Taguiwalo as social welfare secretary. He also put TV5 Aksyon reporter Martin Andanar to head the Presidential Communications Operations Office. He also named as Land Transportation Office chief Gen. Edgar Galvante. Duterte named his chief aide Christopher “Bong” Go as special assistant to the president and as Presidential Management Staff chief. Duterte put Ed Del Rosario to the Department of National Defense as undersecretary for civil veterans and retirees. TVJ
Sweeping Cha-cha eyed Philstar 31st May 2016
Speaker Feliciano Belmonte Jr. believes that the incoming Duterte administration must consider sweeping Charter changes when the Constitution is amended to switch to a federal system of government. “We need to look at the other parts of the Constitution that require change,” he said. Belmonte said the planned constitutional convention or con-con should not limit itself to the proposed shift to a federal system. “Yes, it will open a Pandora’s box, but I’m confident that the con-con delegates will do some improvement, not a throwback,” he said. Cha-cha should be done through a convention, not Congress sitting as a constituent assembly, since it would do a comprehensive review of the Constitution, Belmonte said. He said one of his biggest regrets was the failure of Congress to approve his Cha-cha proposal to lift constitutional restrictions on foreign ownership of certain businesses.
Duterte lays down tough gov’t policy mb.com.ph 31st May 2016
Incoming President Rodrigo R. Duterte held his first “Cabinet” meeting at the Department of Public Works and Highways (DPWH) guesthouse in Panacan district, Davao City, where he named a dozen more members to his Cabinet and detailed the policies of his new government anchored on a campaign promise to fight criminality, corruption, and illegal drugs, a day after he was proclaimed by Congress.
Duterte makes new Cabinet picks; BIR, BoC filled Business World 31st May 2016
President-elect Rodrigo R. Duterte assembled his Cabinet on Tuesday, naming a former coup leader and a lawyer to head revenue-generating agencies, a day after a joint session of Congress declared him the winner of the May 9 presidential elections. “I can assure you, they are men of honesty and integrity,” Duterte told a news conference in Davao City, where he was mayor for more than two decades before he was elected president.
Duterte presents Cabinet Inquirer 31st May 2016
Saying he chose people “with integrity and honesty,” President-elect Rodrigo Duterte on Tuesday presented members of his Cabinet for the first time, a “hardworking” roster he handpicked to address his top governance priorities such as red tape, corruption and crime. Emerging from a three-hour meeting at the presidential guesthouse here, Duterte announced new appointees to critical positions in the security cluster. “It’s not a simple job looking for the composition of the Cabinet. I am reminded of the man holding a lamp during daytime. He was asked why are you bringing a lamp in the daylight when you can see everything? The man said ‘because I am looking for an honest man,’” Duterte said in an evening press conference. “It took me several days. When I’m not around the public eye, it’s because I’m reviewing papers of recommendees, and I can assure you that we are all men of integrity, honesty,” he said.
Joint Congress officially proclaims Duterte as President-elect and Robredo as Vice president-elect Manila Bulletin 30th May 2016
At exactly 4:10 p.m. Monday, the Joint Congress formally proclaimed Davao City Mayor Rodrigo “Rody” Duterte and Camarines Sur Rep. Maria Leonor “Leni” Robredo as the next Philippine President and Vice President, respectively. The proclamation came after Congress, sitting as National Board of Canvassers (NBOC) finished the canvassing of votes, with Duterte garnering 16,601,997 votes, and Robredo with 14,418,817. Duterte won by more than six million votes against his closest rival, former Secretary Mar Roxas, who had only more than nine million votes. Robredo, on the other hand, won the vice presidency in a tight race after she overtook second placer Senator Ferdinand Marcos Jr., who only posted more than 260,000 votes. Senate President Franklin Drilon and House Speaker Feliciano Belmonte Jr. made the joint proclamation following unanimous approval of Resolution of Both Houses 1 declaring Duterte and Robredo as official winners.
New admin faces many labor woes Business Mirror 27th May 2016
Problems with contractualization, job loss and unemployed youth face the next administration, according to Labor Secretary Rosalinda Baldoz.Baldoz said the Department of Labor and Employment (Dole) was looking at ways to avert job losses, particularly in the semiconductor industry where “around 7,000 jobs face obsolescence.” “We have alerted all the Dole regional offices on this. We’re looking for the right up-scaling [of skills] to prevent workers in this sector from becoming jobless,” she said in her keynote address at the 3rd National Career Advocacy Congress at the Midas Hotel in Pasay City yesterday.
‘All Noy officials must go’ The Philippine Star 27th May 2016
There will be no room in the next administration for appointees of President Aquino, incoming president Rodrigo Duterte made clear yesterday. “They have to go,” he said, even as his transition team continues its search for people to fill the remaining positions in his Cabinet and other key offices. Duterte also wants a massive revamp in the Philippine National Police, National Bureau of Investigation, Bureau of Corrections and Philippine Drug Enforcement Agency when he assumes office on June 30. The plan stemmed largely from the death of five people, including an American citizen, in a concert at the Mall of Asia grounds on Sunday. Authorities said these were due to drug overdose resulting in heart attack, kidney failure and dehydration. Duterte did not hide his dismay over the incident. Meanwhile, outgoing Sen. Sergio Osmeña III yesterday said Duterte has all the power to reorganize the executive department, including the bureaus of Customs (BOC) and Internal Revenue (BIR). “The president has the power to reorganize the executive branch but he would need laws to establish new departments and appropriations,” Osmeña said. But reelected Sen. Ralph Recto said Duterte may not have meant it literally when he talked of abolishing some government offices. Duterte also tagged the Land Transportation Office (LTO) as “most corrupt,” adding that it might be better to simply disband all three agencies. “I’m very sorry but the most corrupt agencies – BIR, Customs, LTO – those three… I might as well abolish them,” Duterte said in a press conference in Davao City recently.
P-Noy urged to ink bill amending housing act Business Mirror 27th May 2016
The Chamber of Real Estate Builders’ Association (Creba) remains hopeful that the amendatory bill to the Urban Development and Housing Act of 1992—a critical policy that will enable developers to reduce the country’s huge housing backlog—will still gain the last-minute approval of President Aquino, after hurdling Congress earlier this week. Speaking to Creba members during the association’s monthly meeting on Thursday, National Chairman Charlie A.V. Gorayeb underscored the need for Aquino to sign the bill into law to encourage more developers to ramp up housing production.
Leni Robredo is vice president Inquirer 27th May 2016
Liberal Party candidate Camarines Sur Rep. Ma. Lenor “Leni” Robredo is the country’s vice president. This was the result of the official count in the House of Representatives which showed her leading with 14,418,817, or just 263,473 votes apart from her closest rival Sen. Ferdinand “Bongbong” Marcos Jr. who got 14,155,344. Congress sitting as the National Board of Canvassers finished tabulating the total number of 166 certificates of canvass around 7:18 p.m. on Friday. Robredo was declared the winner after the canvassing, which incidentally was the 58th birthday of her late husband Jesse Robredo.
Rise of Clark from US base to economic hub drawing praises Inquirer 27th May 2016
In less than two months, the sentiment has changed among farmers in the upland villages of Capas town in Tarlac province about a plan to create the Clark Green City (CGC). Most of them gained a sense of certainty when their kabalen (provincemate), President Aquino, led groundbreaking rites of the project on April 11 behind a World War II shrine in Barangay Aranguren in Capas. The city in the making, spanning 9,450 hectares, sits within 36,000 hectares of military base land formerly rented by the United States until 1991 when the Philippine Senate ordered the closure of American bases and the pullout of the troops. Aside from size, there’s nothing like its concept. Proposed by the state agency, Bases Conversion and Development Authority (BCDA), and approved by the National Economic and Development Authority in 2013, the Clark Green City is “primed as the Philippines’ most modern and the first technologically integrated city with a mix of residential, commercial, agroindustrial, institutional and information technology developments at the same time having a green, sustainable and intelligent community for its residents, workers and business establishments.” During the groundbreaking rites, Mr. Aquino said CGC would be “home to companies, retail outlets, schools, government offices, residential communities, parks and even urban farms, eventually accommodating an estimated 1.12 million residents and 800,000 workers.” Residents and farmers are excited because Mr. Aquino mentioned that the first five years are going to generate P64.7 billion of investments.
Draconian laws vowed vs. crime Philippine Star 26th May 2016
The country is facing a “peace and order crisis” including crippling traffic jams, and the incoming 17th Congress may have to pass draconian measures to address this, Davao del Norte Rep. Pantaleon Alvarez said yesterday. Alvarez, who is the choice of incoming president Rodrigo Duterte to be the next speaker of the House of Representatives, also said extra powers may be sought by the executive to deal with the crisis. Priority measures include amending the 1987 Constitution to shift the form of government to a federal system, reimposing the death penalty and lowering the age of criminal liability, Alvarez said. Asked if the measures would be “draconian,” he replied, “yes, yes.” Alvarez said the legislative priorities would address what he described as a “peace and order crisis” as Duterte promised “change in three to six months.”
Duterte plans to pardon GMA, allow burial of Marcos to ‘erase’ hatred BusinessMirror 26th May 2016
Presumptive President Rodrigo R. Duterte is ready to pardon former President Gloria Macapagal-Arroyo and allow the burial of former President Ferdinand E. Marcos at the Libingan ng mga Bayani to “erase” hatred in a divided nation. Duterte told reporters on Monday night that he has talked to Arroyo and offered to grant her pardon, but the former president refused because “she must admit the sin” to be eligible for pardon. “To my mind she should also be released. Lahat ng mga kasama niyang nademanda, nasa labas na. Si Mrs. Arroyo na lang [ang detained],” he said. As a prosecutor and lawyer, Duterte believes that there is no good case against Arroyo. “I offered. I talked to her. Sabi ko, if I become president, ipa-pardon kita [I said if I become president, I will pardon you] not because you are my friend, but I also believe that there is no good case against you,” Duterte recalled telling Arroyo when they had a chance to talk through lawyer Raul L. Lambino. On the other hand, he would allow the burial of Marcos at the Libingan ng mga Bayani not because he is a hero, but because he was a Filipino soldier. He said the issue on whether to allow Marcos to be buried has created a division among the Filipino people and hurt some, especially the Ilocanos. Duterte said it depends on the Marcos family as to when they prefer to bury the former dictator. “They can arrange it immediately,” he added.
Customs
Aquino signs CMTA into law GMA 31st May 2016
President Benigno Aquino III has signed into law the Customs Modernization and Tariff Act (CMTA), the Bureau of Customs said on Tuesday. The law - Republic Act 10863 - updates the Tariff and Customs Code, last amended in 1978, and is supposed to modernize the bureau's facilities, procedures, and overall operations. "We, at the Bureau of Customs, are pleased to announce that Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA), has been approved and signed into law by His Excellency President Benigno Aquino III," Customs Commissioner Alberto Lina said in an emailed statement. RA 10863 was signed by President Aquino on Monday, according to the Presidential Legislative Liaison Office (PLLO), Communications Secretary Hermino Coloma, Jr. confirmed in a text message. With the CMTA in place, several reforms will be implemented at the BOC that include full electronic processing of shipments, streamlining of export and import procedures, and simplified processes for seizure and disposition of illegal goods.
Palace signs into law economic-sabotage penalties for agri smuggling Business World 27th May 2016
In a mobile phone message, Secretary of the Presidential Communications Operations Office Herminio B. Coloma, Jr. confirmed that Mr. Aquino signed on May 23 Republic Act (RA) 10845, “An Act Defining Large-Scale Agricultural Smuggling as Economic Sabotage, Prescribing Penalties Therefor and for Other Purposes”. RA 10845 classifies economic sabotage as “any act or activity which undermines, weakens or renders into disrepute the economic system or viability of the country or tends to bring out such effects and shall include, among others, price manipulation to the prejudice of the public especially in the sale of basic necessities and prime commodities.”
Dominguez wants say on Customs law The Standard 7th Jun 2016
Incoming Finance Secretary Carlos Dominguez asked outgoing Customs Commissioner Alberto Lina not to tie the hands of the Duterte administration in implementing Customs reforms. Dominguez told reporters he called up Lina after learning that the agency was already preparing the implementing rules and regulations of the recently enacted Customs Modernization and Tariff Act. “I called Bert Lina [and] I told him, Bert, I heard you’re putting out the IRR for that new law. I said don’t tie my hands. I said you know, obviously I cannot tell you what to do, or what not to do, but I’ll tell you, I’ll look at it very badly if you tie my hands,” Dominguez said.
‘Change’ should begin at BOC–manufacturers BusinessMirror 5th Jun 2016
For the manufacturing sector, “change”—as promised by President-elect Rodrigo R. Duterte—must begin at the Bureau of Customs (BOC). The Federation of Philippine Industries (FPI) said the incoming administration should make good on its promise to rid the ranks of the BOC of corrupt personnel if he expects to see a significant growth and more economic contribution from domestic manufacturers. Jesus L. Arranza, FPI chairman, said that, given the pledge of the incoming president to level the playing field between foreign and local investors, he expects Duterte to keep customs authorities in line. This is part of the “change is coming” pledge that Duterte’s team has been harping since the campaign period. The FPI chairman clarified that he is not asking for undue advantage for local manufacturers versus importers, but a tighter watch on the BOC to really level the playing field. “If smuggling, undervaluation or cheating on the standards of a product [food or nonfood] is eliminated, I expect a boost to the local manufacturing,” he added. Arranza has been saying that the Customs is the economy’s first line of defense, so the government must take extra efforts to ensure it is rid of irregularities. Arranza offered the FPI’s conditional support to the incoming administration, hinged on the crackdown on smuggling.
New tariff law to boost BOC collection capability The Philippine Star 3rd Jun 2016
The newly signed Customs Modernization and Tariff Act (CMTA) will streamline personnel of the Bureau of Customs (BOC) and cut down the process of releasing imported shipments, Commissioner Alberto Lina said. Meanwhile, Presidential Communications Operations Office Secretary Herminio Coloma Jr. said the CMTA or Republic Act 10863 would boost the capability of the BOC as one of the top two revenue-generating agencies of the government and the Philippines’ competitiveness in global trade. Lina said aside from the higher tax-free benefits that overseas Filipino workers (OFWs) would enjoy when bringing in balikbayan boxes, the new law would also instill changes in the bureau’s structure and operations. The BOC chief, who succeeded in lobbying for the passage of the CMTA, said the law would not lead to the abolition of the agency, but might trigger a streamlining of procedures and personnel, especially since they intend to shift to automation. The proposed reorganization would affect 3,600 personnel of the BOC, but since he is planning to make the agency’s operations 24/7, those displaced during the daytime shift would be reassigned to nighttime duties. There are also plans to review the current systems in the Post Entry Audit and the BOC’s computerization program.
Customs chief to Faeldon: Be ready for 24/7 Inquirer.net 1st Jun 2016
Customs Commissioner Alberto Lina said he wished his successor, former Marine Capt. Nicanor Faeldon, the best of everything, telling him to “be ready for a 24-hour job.” He said the Bureau of Customs (BOC) would soon come out with the Implementing Rules and Regulations (IRR) of the recently signed Customs and Modernization and Tariff Act (CMTA) that provide tax exemption of up to P150,000 for balikbayan boxes sent home by overseas Filipino workers.
IRR for new Customs law readied Business World 1st Jun 2016
Finance officials have set an end-June target to complete drafting the implementing rules of the newly signed Customs Modernization and Tariff Act (CMTA) as part of a smooth transfer of power to the new administration. Customs Commissioner Alberto D. Lina said that while he has not been introduced yet to former Marine Capt. Nicanor E. Faeldon -- known for leading two military sieges during the Arroyo administration -- he will have to set a meeting with his successor prior to the June 30 takeover. Mr. Faeldon was named late Tuesday by president-elect Rodrigo R. Duterte as his administration’s Customs commissioner.
Defense & Security
US closely ‘watching’ Duterte, says expert Inquirer 8th Jun 2016
The United States is “watching very carefully” the moves of President-elect Rodrigo Duterte, particularly during his first 100 days in Malacañang, and his reaction to the much-awaited ruling of a United Nations tribunal court on the Philippines’ maritime row with China, according to an expert of a US-based think tank. “It is ironic that we are watching because if you ask leaders in Washington right now, they would say the US-Philippine relationship is at a high point,” said Ernest Bower, a nonresident senior adviser for the Southeast Asia Program at the Center for Strategic and International Studies. In an interview with the Inquirer on Monday, Bower said the long-standing relations between the Philippines and the United States were even made stronger during the Aquino administration. “There is no reason to believe that a new leader of the Philippines would sacrifice all those good things to move into a direction that would put the Philippines in a less secure and less economically prosperous position,” he said. “I think the proof is really in the pudding. In other words, what we are watching is who he selects to be in his Cabinet. What his first 100 days would look like, what actions he takes particularly around things like the response to the arbitral case in The Hague,” Bower said. Duterte has appointed Perfecto Yasay, a lawyer and former chair of the Securities and Exchange Commission with no background in foreign policy and diplomacy, as acting foreign secretary for one year until Sen. Alan Peter Cayetano takes over. Retired Maj. Gen. Delfin Lorenzana’s designation as the next defense chief is considered to be a silver lining in what is apparently a shallow bench in the security cluster of the Duterte Cabinet. Lorenzana served as a defense attaché to Washington.
China eyeing air defense zone over South China Sea – report Rappler 1st Jun 2016
China is eyeing an Air Defense Identification Zone (ADIZ) over the disputed South China Sea (West Philippine Sea) and is just waiting for the right time to announce it, according to a report Wednesday, June 1. Citing sources close to the People's Liberation Army as well as a report from the Kanwa Defense Review, the South China Morning Post reported that China is preparing for an ADIZ in the regional hotspot, based on the exclusive economic zones (EEZs) of its 7 artificial islands in the Spratlys, as well as of Woody Island in the Paracel Islands. The trigger for an announcement would be if the United States continues making "provocative moves" that would challenge China in the region, the SCMP said, citing the unnamed source. Establishing an ADIZ over the South China Sea would mean China will exercise monitoring and control of civilian aircraft movement in the area. The possible declaration would also be a U-turn from China's stance in 2014, when the country's foreign ministry said that Beijing doesn't need an ADIZ in the region. Back then, the foreign ministry said that it has "yet to feel any air security threat from the ASEAN countries and is optimistic about its relations with the neighboring countries and the general situation in the South China Sea region." The area is seen to overlap with the EEZs of other maritime claimants in the region: Vietnam, Malaysia, and the Philippines.
Asia military spending rises in China’s shadow Business World 1st Jun 2016
Defense budgets will keep rising, according to IHS Jane’s, which forecasts spending in Asia Military Spending Rises in China’s Shadow. Global defense contractors are circling for business in Asia, with countries from Australia to Vietnam upgrading and adding everything from submarines to fighter jets as China expands its military reach. Defense budgets will keep rising, according to IHS Jane’s, which forecasts spending in the Asia-Pacific region will climb 23% to $533 billion annually by 2020. That will put it on par with North America, which is expected to account for a third of global defense spending by then, from almost half now. The figures reflect a shifting strategic dynamic, as China pushes for greater influence and the US seeks to preserve decades of dominance in the western Pacific. While military spending in Asia is coming off a low base -- especially in Southeast Asia -- and remains a relatively small proportion of gross domestic product, nations that for years relied on old and at-times outdated ships and planes are starting to renovate their fleets.
Brunei vows to continue backing Mindanao peace process Inquirer.net 1st Jun 2016
The Royal Brunei Armed Forces (RBAF) has vowed to continue participating in Mindanao’s peacekeeping operations, with RBAF considering sending more permanent representatives to oversee the transformation of Moro Islamic Liberation Front (MILF) fighters into peace-loving citizens. RBAF Commander Major General Mohd Tawih Abdullah said the RBAF will not rule out the possibility of sending more permanent representatives to join the International Decommissioning Board (IDB) should the peacekeeping process continue to work well. Speaking to reporters on the sidelines of RBAF’s 55th anniversary celebration yesterday, he said the RBAF currently has one permanent representative in the IDB.
PH proposes to expand agreement on air, naval encounters Inquirer 27th May 2016
The Philippines is pushing for the inclusion of coast guards and other maritime forces in the Code of Unplanned Encounters at Sea (Cues), an agreement covering air and naval encounters among 20 countries. The proposal was made at the Association of Southeast Asian Nations (Asean) Defense Ministers Meeting (ADMM) in Laos this week, the Department of National Defense said in a news release on Friday. It said the proposal would “hopefully once more be positively considered by the ADMM.” The Philippines made the proposal amid rising tensions in the hotly contested South China Sea, which is mostly claimed by China. The conduct of freedom of navigation patrols in the disputed waters by the United States has been consistently opposed by China. The current Cues, which covers standards for communication, safety procedure for naval ships and aircraft during unplanned encounters at sea, only covers naval forces. Countries that joined the 2014 agreement include, US, China, Japan, Asean countries, among others. The defense chiefs at the meeting also emphasized the importance of fast-tracking the conclusion of the Code of Conduct in the South China Sea, it added. Also at the defense ministers’ meeting, the DND mentioned about a Philippine proposal to establish a cybersecurity working group by the Asean defense chiefs. The concept paper proposed by Defense Secretary Voltaire Gazmin last year in Malaysia aimed to cater cybersecurity challenges was approved last Wednesday.
Indonesia, Philippines launch coordinated border patrols to curb maritime piracy Antara News 27th May 2016
The navies of Indonesia and the Philippines have launched coordinated border patrols to address maritime piracy and other international crimes in the shared maritime border of the two countries, an Indonesian navys spokesman stated. The coordinated border patrols involve Indonesias warship KRI Sura-802 and the Philippines BRP Pangasinan (PS31), spokesman of the Indonesian Navys Eastern Fleet Lt Col Maman Sulaeman noted in a press statement made available to ANTARA here on Friday. The coordinated patrols, under the codename "Corpat Philindo XXX-16," will be carried out in the shared maritime border of Sulawesi waters from May 28 to June 1 after the two navies launched a preparation phase on May 25-28 in North Sulawesis cities of Bitung and Manado, he remarked. The official opening of this mission was held in Surabaya, East Java, on May 26, Sulaeman revealed, adding that the two navies not only focused on the military but also social, cultural, and economic aspects to address international crimes taking place in the maritime border shared by the two countries.
Economics
PHL seen topping Asian, world growth BusinessWorld 8th Jun 2016
The World Bank remains bullish on the Philippines despite expectations of slower global growth, buoyed by robust domestic demand and strong fund inflows that continue to anchor its economy against external headwinds. In the June Global Economic Prospects report it released yesterday, the multilateral lender maintained its 6.4% forecast growth for the Philippines -- against the government’s 6.8-7.8% target for 2016 -- allowing it to remain one of the fastest-growing economies in Asia Pacific and the world amid paling global growth prospects. For the next two years, the World Bank expects the Philippines to grow 6.2% annually, against the government’s 6.6-7.6% and 7-8% targets for 2017 and 2018, respectively. The World Bank slashed its forecast for global growth to 2.4% for 2016 and to 2.8% in 2017 -- compared to the 2.9% and 3.1% projections given last January -- due to “significant” downgrades in the forecast for export-oriented economies, factoring in “heightened domestic uncertainties” and “a more challenging external environment.” Global growth is then expected to pick up to 3.0% in 2018. The Philippines is expected to remain resilient to external headwinds on account of its narrow budget gap and steady inflows from remittances and trade in services, as well as robust domestic spending. “Among the large developing ASEAN (Association of Southeast Asian Nations) economies, Vietnam and the Philippines have the strongest growth prospects. In the Philippines, growth is projected to firm to 6.4% in 2016, with an accelerated implementation of public-private partnership projects and strong domestic demand. The country benefits from diversified export markets and low global commodity prices.”
Businesses chart southern expansion Business World 6th Jun 2016
Considered Mindanao’s gateway by local and foreign businesses, Davao City has moved to the forefront of investors’ radar screens with the victory of Mr. Duterte, enjoying significant interest from airlines, property developers, manufacturers, as well as business process outsourcing (BPO) and agricultural firms. “It’s a continuous expansion, but they are more aggressive now. Businessmen are seeing this opportunity because the President-elect is from Davao and most of his time will be spent there. It’s a good destination because prices in Davao are cheaper versus Metro Manila,” Astro C. del Castillo, managing director at First Grade Finance, Inc., said by phone. Amid the looming uptick in economic activity in the city, flag carrier Philippine Airlines (PAL) plans to “increase available seats and make Davao a mini hub,” PAL President Jaime J. Bautista said in a text message.
Medium-term growth targets up for review, may be lowered Philstar 6th Jun 2016
Despite promising higher government spending, the Duterte administration is contemplating on lowering economic growth targets this year until 2019 during a review before it takes over this month. "Public spending, especially for public infrastructure, does not affect economic growth instantaneously. There is usually a lag," said incoming Budget Secretary Benjamin Diokno on Monday. "(President-elect Rodrigo) Duterte's economic team will have a chance to re-assess current government forecasts when we meet before the end of June," he said in a text message. Under the medium-term economic program, gross domestic product (GDP) growth is targeted to rise between 6.8 and 7.8 percent this year. It is expected to slow down to 6.6 and 7.6 percent next year, before bouncing back to seven to eight percent in 2018 and 6.9 to 7.9 percent in 2019.
IRR of Philippine Competition Act now out Rappler 4th Jun 2016
The newly-established anti-trust body on Friday, June 3, released more detailed implementing rules and regulations (IRR) for the Philippine Competition Act,adding joint ventures under its turf and relaxing rules on reporting for mergers and acquisitions (M&As). The revised IRR was released 4 days after Globe Telecom, Incorporated and Philippine Long Distance Telephone Company (PLDT) announced the P69.1-billion deal to buy all of San Miguel Corporation’s telecommunication business. This will guide the Philippine Competition Commission (PCC) on how to proceed with the case of San Miguel’s sale of telecommunication assets, which according to several researchers is an "anti-competitive deal." In its revised IRR, the PCC retained the P1-billion threshold of reporting M&As and joint ventures. But the PCC said in its IRR that publicly listed companies – which are set to acquire 20% of another company’s outstanding voting shares – will no longer have to report their proposed deal to the commission. Compared to the draft IRR released in May, the latest version adds a provision called "joint venture." If companies fail to notify the PCC of transactions that meet the thresholds, their merger, acquisition or joint venture would be rendered void. The companies will also face a fine equivalent to 1%-5% of the consideration. The IRR of the Philippine Competition Act was published in major dailies Friday, June 3, making the law effective after 15 days or on June 18, 2016.
Property boom seen to continue Inquirer 3rd Jun 2016
The Philippine real estate market is expected to sustain its robust growth this year, driven largely by a strong economy and the continued entry and expansion of outsourcing companies, growing developments outside central business districts. CBRE Philippines chair and founder Rick M. Santos said business process outsourcing (BPO) firms were seen to continue to prosper in the coming years given the educated young labor force, low cost of labor, notable customer service, low rental rate and high yield rate that would provide a thriving environment for foreign investors. “The Philippines is becoming one of the most preferred outsourcing destinations of American and European companies which are struggling to maintain employment levels in their mother countries,” Santos said.
Duterte to make P-Noy’s PDP really inclusive Business Mirror 3rd Jun 2016
Incoming Economic Planning Secretary Ernesto M. Pernia said the Duterte administration may only tweak the existing Philippine Development Plan (PDP) according to its priorities, instead of crafting one from scratch. “There is already a medium-term development plan. I’m not going to junk that. I’m just going to fine-tune that according to our vision,” Pernia told the BusinessMirror. The economic and social priority of the Duterte administration, Pernia said, is addressing inequality. He said the poor, not only the rich, should benefit from the country’s economic gains. The uneven distribution of wealth, Pernia said, is the reason the Philippines continues to struggle from high poverty rates.
Foreign, local investments in Q1 to create 59K+ jobs–PSA data Business Mirror 3rd Jun 2016
The total approved foreign and Filipino investments in the first quarter of 2016 is estimated to generate nearly 60,000 new jobs, according to the Philippine Statistics Authority (PSA).PSA data showed that the P99.5 billion worth of total approved investments in the first quarter will generate approximately 59,324 new jobs. This represents an increase of 31.3 percent from the 45,197 potential jobs estimated to be generated in the same period last year, but was significantly lower than the 169,075 new jobs expected to be generated from approved investments in the fourth quarter of 2015.
Foreign investment pledges up by 19.2% in first quarter Business World 2nd Jun 2016
Data released by the Philippine Statistics Authority (PSA) yesterday showed that foreign pledges approved by the government’s seven investment promotion agencies (IPAs) rose 19.2% in the first three months to P26 billion from the previous year’s P22 billion. The first-quarter haul however was lower than the P139 billion posted in the fourth quarter of 2015. The seven IPAs include the Board of Investments (BoI), Philippine Economic Zone Authority (PEZA), Clark Development Corp. (CDC), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan, BoI-Autonomous Region in Muslim Mindanao (BOI-ARMM) and Cagayan Economic Zone Authority (CEZA).
Yawning budget hole contemplated Business World 1st Jun 2016
The incoming administration could allow the budget deficit to yawn to its widest in six years as it loosens its purse strings to cover the Duterte government’s spending priorities. Benjamin E. Diokno, who has been handpicked by president-elect Rodrigo R. Duterte to lead the Department of Budget and Management (DBM), said the new administration may peg the country’s budget gap at 3% of gross domestic product (GDP) which, if realized, would be the widest since 2010. The incoming Budget chief also contemplates tweaks to the 2016 and 2017 national budget, which assumed a deficit of 2% of GDP, the ceiling set all throughout President Benigno S.C. Aquino III’s six-year term. “A deficit-to-GDP ratio of 3% is still manageable especially if it will be devoted to public infrastructure,” Mr. Diokno said in a mobile phone message to BusinessWorld. Mr. Diokno, who previously served as Budget secretary of former President Joseph E. Estrada, had been a vocal critic of the Aquino administration’s prudent fiscal policy.
Alvarez wants an active Ledac in Duterte administration Business Mirror 1st Jun 2016
Incoming PDP-Laban Rep. Pantaleon D. Alvarez of Davao del Norte, who is almost sure of clinching the House speakership under the administration of incoming President Rodrigo R. Duterte, vowed to push for regular Legislative-Executive Advisory Council (Ledac) meetings in the 17th Congress. Alvarez said the Ledac is needed for a smooth and early passage of priority measures of the incoming Duterte administration and the 17th Congress. “We need a regular Ledac because [those] meeting[s] [are] needed for the successful passage of bills,” he told the BusinessMirror. Lawmakers and members of the Executive branch draw up a list of priority measures in Congress during Ledac meetings. The council is chaired and presided over by the President himself.
Demystifying Duterte’s Eight Points BusinessWorld 30th May 2016
While Duterte’s broad outline seemed to have calmed, if not excited, some business leaders, those of us who insist on more concrete strategies will have to wait for a more detailed policy platform. And while each of the points raised make sound economic sense, those of us who are more keen on seeing results than counting on promises will have to assess the feasibility and potential impact of the proposed actions on the basis of recent data and their trajectories. We attempt a speedy evaluation of where the country’s economy currently stands with respect to Duterte’s eight points, and what implementing each of these action points really entails. We organize Duterte’s eight point agenda under four main themes: (1) sound macroeconomic policy and tax reform, (2) national competitiveness, (3) capacity building, and (4) agricultural and rural development.
Of black swans, outliers: incoming Finance chief talks in retrospect BusinessWorld 29th May 2016
At the outset, incoming Finance Secretary Carlos G. Dominguez said he did not want to talk just yet about the technical details of tax reform -- an issue that is politically sensitive and at the same time critical to continuing the country’s economic gains, especially if the Philippines were to compete in the context of an integrated Association of Southeast Asians Nations. “But I promise I will call,” he said, when he is ready to divulge the tax reform program. Midway into the interview, the 71-year-old Mr. Dominguez, who grew up in the same neighborhood in Davao City as incoming president Rodrigo R. Duterte but has long been based in Manila, hesitated as candid shots were taken of him. Quickly looking at his casual shirt, he said maybe it would be better if he just gave a file photo of himself. When told that it was rather apt before he officially assumes as Finance Secretary, he said: “Well, I guess I still am on holiday,” then he pauses and ponders before adding with a chuckle, “before the tsunami hits.” The following are excerpts of the interview.
New regime seen business-friendly Inquirer 27th May 2016
The first 100 days in office of incoming President Rodrigo Duterte will be under scrutiny but at least one big international fund manager is optimistic that President Aquino’s successor can continue or even intensify an anticorruption campaign and promote a business-friendly regime. Mark Mobius, executive chair of Templeton Emerging Markets Group and an influential fund manager specializing in emerging markets, said the first 100 days would be crucial and businessmen would like to see a continuation of the elimination of corruption and promotion of lean government that had characterized the Aquino administration. “Based on his track record and campaign statements, there is a good chance Duterte will not only continue Aquino’s stance but may even come out harder against crime and corruption,” Mobius said in a blogsite of Franklin Templeton dated May 18. “Clearly, the Philippine population would like to have a strong and clean anticorruption and anticriminal government that will come out hard against criminals, and Duterte has the background to deliver that,” Mobius said. “Additionally, despite some socialist leanings, Duterte’s record as former mayor of Davao was actually one of being very business-friendly, with the major business groups in the city doing very well under his administration,” Mobius said.
A talk with Duterte’s chief economist The Manila Times Online 26th May 2016
“It’s an indictment of the Aquino administration.” So declared professor emeritus Ernesto Pernia of the University of the Philippines School of Economics, about the landslide victory of Davao Mayor Rodrigo Duterte. President Benigno Aquino 3rd promised to slash poverty by eradicating corruption. In fact, the country’s economic expansion hardly dented poverty, unlike similar growth in neighboring countries. And lawlessness in the streets, the ports, and the corridors of power escalated, with crime, smuggling and pork barrel trebled under Aquino. Now, after drafting Duterte’s economic program last December, Prof. Pernia is to be the incoming Chief Executive’s chief economist. The University of California Berkeley-educated former Asian Development Bank lead economist will head the National Economic and Development Authority, the country’s socio-economic planning body. Much of Duterte’s eight-point governance program announced two weeks ago was proposed by Pernia, whose sister is married to a close cousin of the presumptive president-elect. Speaking to this writer soon after the elections, the economist, who was with the ADB in 1986-2003, at with UP afterward, highlighted key thrusts for 2016-22, including rebalancing the economy, the need to accelerate infrastructure development, and the importance of spreading Davao's business formula to other cities in the country.
Duterte vows economic growth outside of ‘dead’ PH capital Manila Bulletin 26th May 2016
Incoming Philippine president Rodrigo Duterte pledged Thursday to spread economic activity beyond the overpopulated capital of Manila, calling it a “dead” city overrun by shantytowns. Duterte said he would create new jobs by setting up economic zones outside of Manila to spread the wealth beyond the sprawling metropolis of about 15 million people, and that he would not allow any more factories to be built in the capital. “I have to create more jobs but Manila is already saturated,” Duterte told reporters in the southern city of Davao, which he has ruled as mayor for most of the past two decades. “If there are any investors coming in, I will tell them I will not allow factories anymore in Manila, not only because it is a dead city but because I have to build a new environment for the people.” Duterte, who won a landslide election victory just over two weeks ago, said repeatedly while campaigning one of his top priorities would be improving the lives of about 26 million Filipinos, more than a fourth of the population, who live on $1.30 a day or less. Popular frustrations over the sharp rich-poor divide that largely remain despite years of continuous strong economic growth under incumbent leader Benigno Aquino helped to bring Duterte to power, analysts have said. Lack of opportunities around the rest of the Philippines have for decades made Manila a magnet for people seeking a better life, but millions have instead been forced to live miserable existences in mega-slums. “I will ask the engineers to find land because we will build economic zones there,” Duterte said, adding people living in the Manila slums would be moved there. “I have to relocate them but before I relocate them, I have to establish economic activity.” Manila accounts for more than a third of the economic output of the country, with two surrounding regions contributing another quarter, according to official data.
Poverty statistics at multi-year lows BusinessWorld 26th May 2016
Researchers now estimate some 10.5 million Filipino families consider themselves poor -- their numbers shrinking from last year’s tally -- while an even fewer 6.9 million reported they barely have enough food to put on their tables. Results of the latest Social Weather Stations (SWS) survey -- conducted between March 30 and April 2 -- put both self-rated poverty and food poverty rates at multi-year lows, prompting Malacañang to challenge the incoming Duterte presidency to sustain gains made by the Aquino government. The SWS survey showed 46% of those polled (equivalent to 10.5 million families) rated themselves “mahirap” or poor. The results are better than those of a similar survey done in December 2015, which put the estimate at 11.2 million families, or 50% of respondents. SWS, which polled 1,500 adults for this round, said its survey has sampling error margins of ±3 points for national percentages and ±6 points each for Metro Manila, Balance Luzon, the Visayas and Mindanao. At 46%, the latest self-rated poverty rate was the lowest in over four years or since December 2011’s 45%, reflecting drops across all regions except in Mindanao.
BOI investment pledges surged 64% as of April Inquirer 26th May 2016
The value of investment pledges approved by the Board of Investments (BOI) surged by 64 percent to P117.3 billion in the first four months of the year, reflecting the continued confidence of investors in the Philippines. Trade Secretary Adrian S. Cristobal Jr. and Trade Undersecretary Ceferino S. Rodolfo said in a briefing Wednesday that the significant growth in investment approvals was driven by infrastructure and energy projects. Among the big ticket projects noted in the first four months of the year were the P16.7-billion project registered by Megawide Cebu Airport Corp. and the P15.2-billion project of Light Rail Manila Corp., Rodolfo reported. Others include the 150-megawatt Bayog Wind Power in Ilocos, which will require some P14.7 billion; and the P4.9-billion, 25-MW biomass project in Negros Occidental. Despite the stellar growth, the Department of Trade and Industry will keep its 5 percent investment growth target. Meanwhile, Cristobal noted that the Philippines had maintained its strong position amid global economic volatility as the country’s recent performance demonstrated “remarkable economic resilience owing to vigorous governance and reforms.” “The country is on the verge of economic transformation. Sources of growth have become more diversified, showing changes in the structure of the economy. First the growth of manufacturing has outpaced services in the past four years after more than a decade. Although services has been the main growth driver of the economy for the past decades, manufacturing has been contributing substantially since 2013,” Cristobal said. A manufacturing resurgence, according to Cristobal, was also evident as the sector has consistently surpassed the growth of services for the past nine quarter. The manufacturing sector, he said, regained its strong position as it grew by 8.1 percent in the first quarter of 2016, the highest rate posted in the past even quarters.
Philippines imports bounced back in March Financial Times 26th May 2016
The Philippines may be grappling the same muted global demand as other Asian exporters, but the latest trade data suggest it isn’t part of the problem. Imports to the Philippines grew 11.7 per cent year on year in March to $6.358bn, according to the Philippine Statistics Authority, rebounding after a fall to growth of 1.19 per cent in February and coming in comfortably above economists’ consensus forecast of 8.9 per cent. Industrial machinery imports rose 50.4 per cent year on year, while telecoms equipment shipments were up 26 per cent and electronics imports jumped 30.1 per cent. Local trading partners reaped the benefits of continued robust demand as the value of shipments from China and Japan rose 45.3 per cent and 48.9 per cent year on year to $1.035bn and $770m, respectively. Imports of US-made goods fell 3.7 per cent in value terms during the period to $574m. Together with a previously reported 15.1 per cent year-on-year fall in March exports, the latest import figures pushed the Philippines’ trade deficit to $1.747bn last month from a $1.104bn deficit in February, far beyond a consensus forecast of a $1.355bn deficit from economists.
Energy
World Bank urges PHL to invest in technologies vs climate change Business Mirror 31st May 2016
Philippine government and businesses should invest in technologies aimed at tackling climate change, at the same time, supporting innovation, the World Bank said. World Bank Group senior economist Dr. Marcin Piatkowski advised the country to develop technologies that can make it less susceptible to the impact of natural disasters. “Probably, it would be difficult to become a global champion in innovation on climate change today. Americans, Chinese, Europeans and others are spending tens of billions of dollars every year on technologies that would lessen the impact,” he said in a forum on the sidelines of the general membership meeting of the Philippine Exporters Confederation Inc.
Pnoy sets sweeping review of PHL energy policy; reliance on coal to be cut Interaksyon 26th May 2016
As the country transitions to a new administration, expect a sea change in the national energy policy, specifically, a reduction in reliance on coal, despite the recent approvals of coal-fired projects.The Climate Change Commission said Thursday President Benigno S. Aquino III has set into motion an urgent and comprehensive review of the government’s energy policy to cut down dependence on coal and move to a low-carbon future.Under Commission Resolution No. 2016-001, signed May 18 by President Aquino, the CCC will lead key government agencies in facilitating within the next six months “a national policy review and framework development on energy, through a whole-of-nation approach, in accordance with a low carbon development pathway and national goals and targets for climate change mitigation and adaptation, disaster risk reduction and sustainable development.”The resolution is envisioned to set in place a clear government policy on coal-fired power plants, which are the biggest sources of man-made carbon emissions, accounting for about 35 percent of global greenhouse gas (GHG) emissions.
Groups welcome ADB support to PH clean energy goals Inquirer 8th Jun 2016
Civil society groups on Wednesday welcomed the support of the Asian Development Bank (ADB) to the Philippines’ clean energy goals. “ADB is fully supportive of the COP21 (Paris climate talks) outcomes. We are fully supportive of the country’s clean energy ambitions,” Richard Bolt, ADB’s country director for the Philippines, said on the sidelines of the 11th Asia Clean Energy Forum. Bolt reacted to calls demanding the bank to respond to the review of the Philippine energy pathway, consistent with the 1.5°C global warming limit referenced in the Paris climate talks as well as with global energy trends. “The Duterte administration’s goal to transition early to clean energy deserves full support from the international investment community. We applaud ADB’s positive response and hope they will follow through,” said Renato Redentor Constantino, executive director of Institute for Climate and Sustainable Cities.
Duterte to mining firms: Shape up The Philippine Star 6th Jun 2016
President-elect Rodrigo Duterte read the riot act to mining firms that he said are plundering the environment and making huge profits from the country’s resources. Speaking during the “Du31” thanksgiving and victory party organized by his supporters on Saturday, the tough-talking Duterte directed his ire at mining firms that he said have despoiled the land, particularly in Mindanao. “Mining people must shape up,” he said. “They have to stop the spoiling of the land,” Duterte told a cheering crowd of more than 200,000 people who trooped to Crocodile Park in Davao City where the thanksgiving party was held. “In Surigao, they are destroying the land. They are destroying Mindanao,” he added. He noted that many big mining firms are owned by foreigners, who make huge profits using the country’s natural resources. Duterte also promised to help the people of Mindanao, particularly those who have been placed on the margins of business endeavors because of the select few that benefit from the country’s resources.
AES set to complete energy storage plant The Standard 6th Jun 2016
AES Philippines, a unit of AES Corp. of the US and Electricity Generating Public Company Ltd. of Thailand, expect to complete the country’s first 10-megawatt, battery-based energy storage facility in Masinloc, Zambales province late this month. EGCO president Chanin Chaonirattisai said in a statement the 10-MW lithium-ion battery energy storage located at the 600-MW Masinloc coal-fired power plant aimed to provide reserve power and grid stability services to the Luzon grid. “The construction commenced in December 2015 and now it is over 90 percent complete,” the official said. EGCO invested in the 300-MW expansion of the Masinloc power plant and battery-storage project following an agreement signed with AES in 2014. “We are continuously expanding our investments in overseas markets to keep pace on the company’s earnings growth, especially in the Southeast Asia where the company has strong presence. Lately, we have joined with our partners in Masinloc Unit 1-3 power plants to develop an electricity-related business battery energy storage” in the Philippines,” Chanin said. The facility, once completed, will be one of the first advanced energy storage installations in Southeast Asia and among the largest in all of the continent.
Robust growth drives up power demand BusinessMirror 3rd Jun 2016
The economy’s robust growth in the first quarter, which likely topped 2015’s fourth-quarter growth of 6.5 percent, helped boost demand for electricity in May, according to the Manila Electric Co. (Meralco). Power sales in Meralco franchise areas grew 9.5 percent in May owing to strong demand recorded across all sectors, the company said. “The May MTD [month-to-date] stood at 9.5 percent, while the estimated YTD [year-to-date] will be around 12.1 percent,” said Alfredo S. Panlilio, Meralco senior vice president and head of customer retail services and corporate communications. Last week Meralco said sales in the first four months of 2016 “were very strong.” In the months ahead, however, sales growth may be dampened by lower demand coming from the residential segment, which was the most significant contributor to the increase in energy sales in the first quarter of the year. The lower demand could be a result of cooler temperature. “With the onset of the rainy season, there might be an impact on sales because of the cool weather, but it is too early to say how it will end up by yearend,” Panlilio said.
Meralco asks court to rule on open access’ Business World Online 2nd Jun 2016
Manila Electric Co. (Meralco) has asked the court to rule whether the rules issued by energy regulators to fully implement retail competition and open access (RCOA) in the Philippine electric power industry is in line with the law. In its petition for declaratory relief, Meralco said it was a well-settled rule that “administrative regulations cannot extend the law or amend a legislative enactment, for settled is the rule that administrative regulations must be in harmony with the provisions of the law.” The country’s largest distribution utility was referring to the “contradiction” of the Energy Regulatory Commission (ERC) resolutions and a Department of Energy (DoE) circular with Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001, and its implementing rules and regulations. Its 91-page filing before Branch 157 of the Pasig City Regional Trial Court was also seeking for the issuance of a temporary restraining order and/or writ of preliminary injunction against ERC Resolution 5, which was issued on March 8, 2016, as well as Resolutions 10 and 11, both issued on May 12, 2016. Aside from the ERC resolutions, Meralco asked the court to rule on DoE Circular No. DC2015-06-0010, which provides the policies to facilitate the full implementation of RCOA. The filing was received by the court on May 27, 2016.
Thailand: DCORP to acquire stakes in solar power plants in Philippines DealStreetAsia 2nd Jun 2016
Thailand based renewable energy developer Demeter Corporation (DCORP) is doing due diligence to purchase 40 per cent stake in two solar power companies in the Philippines for $15.36 million. It expects to complete the due diligence and sign the share purchase agreement in July, DCORP’s chief executive Apichet Bhusry said in a statement. According to the memorandum of understanding(MoU) signed, DCORP will acquire a 40 per cent stake in a 200-megawatt power plant (not exceeding $9.6 million) and the other 40-per-cent in a 120-megawatt power plant (not exceeding $5.76 million.) Bhusry said they the company was applying to obtain the service contract in order to meet the volume of the generated electricity as specified in the MOU and to increase the power purchase rate under Feed-in-Tariff basis. DCORP is diversifying from its core media business to invest heavily in renewable energy and has formed a 60:40 joint venture firm with Yingli Green Energy Holding Co, a subsidiary of the world’s second largest solar panel manufacturer Yingli Solar. Yingli plans to use Thailand as a base to expand its business outside China and is setting up its first overseas solar panel plant in Rayong with total investment of $19 million.
Lopez Group backs FPHC’s clean energy thrust The Manila Times Online 1st Jun 2016
Lopez Holdings Corp. on Wednesday said it fully supports investee First Philippine Holdings Corp.’s (FPHC) call for a low carbon future via clean energy. Manuel Lopez, chairman and chief executive officer of Lopez Holdings, told the company’s stockholders meeting that clean energy is necessary for the Philippines to be able to fulfill its commitments to the 21st Conference of Parties, also known as the 2015 Paris Climate Conference or COP21. The commitment includes the reduction of greenhouse-gas emissions conditionally by 70 percent by year 2030. Lopez said FPHC subsidiary First Gen Corporation has the cleanest portfolio of power plants in the Philippines with electricity generated from steam, water, wind and natural gas. Last week, FPHC said it will aggressively double its wind power capacity in the next three years to help the country reduce its reliance on coal-fired plants. FPHC president and chief operating officer Francis Giles Puno said FPCH will be spending about $450 million in the next three years to double its wind capacity to 300 megawatts from 150 megawatts currently. The announcement came after FPHC chairman and CEO Federico Lopez declared that they will not develop, support or invest in any coal-fired power plant in line with global efforts to mitigate climate change
New Philippine govt plans review of coal power projects, push for renewables Reuters 1st Jun 2016
The new Philippine administration needs to review dozens of coal-fired power projects now underway or still on the drawing board as it seeks increased use of renewable energy, the country's incoming economic planning chief said. "We need to revisit those projects and I think we probably should not push too many coal-fired plants because they are bad especially for communities where power plants are built," President-elect Rodrigo Duterte's choice for economic planning minister, Ernesto Pernia, said. Speaking on Thursday in a live interview with ABS-CBN News Channel, Pernia said: "We are supposed to gradually, in due time, move toward more renewable energy." Some of the Philippines' biggest companies, including San Miguel Corp, Aboitiz Power Corp and Manila Electric Co, are planning to increase their power generation portfolio by building more coal-fired power plants.
Duterte warns power firms: Shape up or I’ll let foreigners in Inquirer 29th May 2016
Incoming President Rodrigo Duterte warned local power companies he would open the market to foreign firms to bring cheap and stable power supply to the country if the local utilities didn’t shape up and deliver better services to consumers. “I told you before, shape up,” Duterte said in a late-night press conference Thursday, addressing power utilities. “Because if you don’t and the public will suffer, if (the supply problem) remains unaddressed, I’ll invite all foreign investors,” he said. Duterte said he would ask foreign investors if they would be interested in building power plants in the country, but that he would keep power facilities owned by the government in the hands of the government. Among these are the Agus hydropower plants in the two Lanao provinces and Pulangi hydropower facility in Bukidnon province. Duterte said plans to privatize these government facilities “should not be applied yet at this time” because private power firms cannot even provide a sufficient supply of electricity. Duterte said opening the country’s power sector to foreign investors would be more beneficial to consumers than selling government-owned power assets.
Aquino orders sweeping review of PH’s energy policy Inquirer 27th May 2016
The Aquino administration has ordered a review of the country’s energy policy, which may see the Philippines moving away from carbon-intensive coal power generation. In a statement, the Climate Change Commission (CCC) said President Aquino signed Commission Resolution No. 2016-001, which mandated the agency to lead an “urgent and comprehensive” review of the government’s energy policy within the next six months. CCC was told to do “a national policy review and framework development on energy, through a whole-of-nation approach, in accordance with a low carbon development pathway and national goals and targets for climate change mitigation and adaptation, disaster risk reduction and sustainable development.” CCC, with the help of other concerned government agencies, was also ordered to set a clear government policy on coal-fired power plants, the biggest source of man-made carbon emissions, accounting for about 35 percent of global greenhouse gas (GHG) emissions.
San Miguel investing more in clean coal technology The Philippine Star 27th May 2016
Diversified conglomerate San Miguel Corp. (SMC) is shunning coal-fired power plants and will instead continue to invest in “clean coal” technology, its top official said yesterday. “We will continue to invest in clean coal. As long as it’s clean technology, we are investing in that,” SMC president and COO Ramon Ang said yesterday. He said that investing in a clean coal fired power plant is more expensive at $2 million per megawatt. The so-called clean coal uses the circulating fluidized bed (CFB) technology that has the ability to achieve lower emission of pollutants. By using this technology, up to 95 percent of pollutants will be absorbed before being emitted to the atmosphere. As of the end of 2015, SMC’s power subsidiary SMC Global Power controls 2,903 megawatts of combined contracted capacity. It currently accounts for 17 percent of the power supply of the national grid and a significant 22 percent share of the Luzon grid. The Lopez Group has taken a strong stance against the use of coal in the country. First Philippine Holdings chairman Federico Lopez said the Lopez Group will set an example and will not pioneer any coal-fired power plant. At present, the Philippines has 17 operating coal plants and a additional 29 new coal plants will be only by 2020, based on the approvals issued by the Department of Energy.
DoE nominee Cusi must weigh conflicting interests -- FPI Business World Online 26th May 2016
The Federation of Philippine Industries (FPI) said the incoming Energy secretary should not be influenced by the “conflicting agendas” of industry stakeholders, and needs to stake out a policy vision suited to the country’s development needs. Edgardo G. Alabastro, vice-chairman of FPI’s environment committee, said Alfonso G. Cusi, incoming president Rodrigo R. Duterte’s choice to head the Department of Energy (DoE), said the country should not allow itself to be dictated by the United Nations Framework Convention on Climate Change (UNFCCC), an international treaty that includes the Philippines as signatory. The country committed to reduce its emissions by 70% from current levels by 2030. The Paris conference in December 2015 saw parties to the UNFCCC agreeing to keep a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels. “I understand that he (Mr. Cusi) is a competent manager but he needs to develop a vision. He should not allow himself to be pushed around by all the conflicting agendas of the [energy industry] stakeholders,” Mr. Alabastro said in a phone interview. FPI has in the past questioned the country’s so-called intended nationally determined contribution to the United Nations, saying big emitters like China, United States and the European Union had made commitments well below what the Philippines is offering. The federation also pointed out that the country needs to depend on coal-fired plants to fuel its economic growth.
Aquino OKs energy-policy review to wean PHL from coal addiction BusinessMirror 26th May 2016
The Climate Change Commission (CCC) is set to lead a sweeping review of the country’s energy policy to cut down the country’s dependence on coal as fuel source, and prompt a shift toward a low-carbon development path. President Aquino, who is also the chairman of the climate-change body, signed on May 18 Commission Resolution 2016-001, a move lauded by environmental and climate justice activists. The resolution designates the CCC to lead key government agencies in facilitating within the next six months the national policy review and framework development toward low-carbon pathway. According to the CCC, the resolution is envisioned to set in place a clear government policy on coal-fired power plants, which are the biggest sources of man-made carbon emissions, accounting for about 35 percent of global greenhouse-gas (GHG) emissions. Aside from the President, CCC Vice Chairman Emmanuel de Guzman and commissioners Frances Veronica Victorino and Noel Antonio Gaerlan signed the resolution. Under the resolution, the Department of Environment and Natural Resources (DENR), the Department of Energy (DOE) and the National Economic and Development Authority (Neda) are urged to harmonize policies and regulations on new and existing coal-fired power plants, and assess their impacts on the environment, as well as include low-carbon development and climate-change adaptation and mitigation strategies in the formulation of all national and local development plans.
Energy regulator pushing for system audit of National Grid The Standard 26th May 2016
Energy Regulatory Commission chairman Jose Vicente Salazar expressed confidence National Grid Corporation of the Philippines will push through with its earlier commitment to back the system audit of the country’s power grid system. Salazar said the audit would be the first compliance assessment of NGCP since receiving the franchise to operate, maintain and expand the country’s power transmission system in 2008. The audit aims to assess how NGCP is operating the grid, how it is maintaining the reliability of the country’s transmission system, and how its operations comply with regulations concerning the wholesale electricity spot market. Salazar said the ERC was concerned that delays in the audit of NGCP “could adversely affect the processing of the applications for its capital expenditure and revenue requirements” pending before the regulatory body. “It is important that we have a clear assessment first of how it is doing its job before we consider the NGCP’s petition to raise the level of revenues it is allowed to make and to use money on capital expenditures,” Salazar said. He said the performance audit of the NGCP was also crucial “to the country’s bid to ensure that the whole power supply infrastructure from generation to distribution to industries and households continue to be efficient, reliable and cost-effective.” Salazar said the audit of the NGCP was set to be done by an independent third party to be procured by NGCP itself.
Financial Services
Listing rules eased for PPP firms Business World 31st May 2016
The stock market will open up to companies with public-private partnership (PPP) contracts worth at least P5 billion, according to draft listing rules issued for public comment. The Philippine Stock Exchange, Inc. (PSE) on Monday released the proposed supplemental listing and disclosure rules applicable to the private-sector proponents of PPP infrastructure projects. The release comes barely a year after a series of consultations that began in August 2015 and included the PPP Center, the PSE, Securities and Exchange Commission and the Asian Development Bank. The draft rules, according to the PSE document, “relaxed” the exchange’s listing rules that require companies to have a three-year track record of being profitable and with operating history before going public. The PPP company can lodge an initial listing application without meeting those standards, the PSE said. Most PPP proponents, anyway, are a consortium of companies or joint ventures newly formed specifically for the government-initiated projects. Easing the rules would be in step with most Asian exchanges -- Bursa Malaysia, Hong Kong Exchanges and Clearing, Ltd., Stock Exchange of Thailand, and Taiwan Stock Exchange -- which, the PSE noted, have provisions for listing of infrastructure project companies, most of them financing those deals through debt and cash.
Dominguez ‘not crazy’ about Purisima plan BusinessWorld 8th Jun 2016
The government can reduce income tax rates without having to raise the value-added tax (VAT), with the new administration willing to forego revenues and incur a bigger fiscal deficit to fund development, the incoming Finance chief said. The government of President-elect Rodrigo R. Duterte will cut income tax rates, incoming Finance Secretary Carlos G. Dominguez told reporters last June 3, without going into details. Reforming the country’s decades-old income tax regime had become a key issue in the May 9 general elections, with all presidential candidates backing calls to lower income tax rates. The outgoing administration of President Benigno S.C. Aquino III has opposed proposals in Congress to lower personal and corporate income tax rates last adjusted in 1997. The Department of Finance (DoF) under Cesar V. Purisima’s leadership had warned against eroding government revenues and called for a holistic approach to reforming the tax system that would include new sources of revenue to offset those that will be foregone in tax cuts. The Finance department has submitted a tax reform package for the next administration’s consideration. The proposed reform package entails an increase in the VAT rate to 14% from 12% and the expansion of the levy’s coverage to recover revenues foregone with lower income tax rates. “I am not crazy about that... I think the VAT is a regressive tax reform. I think it’s more of a burden to the lower-income than higher-income [earners],” Mr. Dominguez said.
Dooc bucks plan to hike VAT anew BusinessMirror 7th Jun 2016
Adjusting the value-added tax (VAT) upward would hit hardest insurance companies, the Insurance Commission chief said, noting the incoming administration’s finance officials should tread slowly on tweaking the tax structure. Insurance Commissioner Emmanuel F. Dooc said during the BusinessMirror Coffee Club forum on Tuesday that measures for tax reform should be subject to further thorough review before they are implemented or undertaken by the administration of President-elect Rodrigo R. Duterte, as the nonlife insurance industry would suffer a direct hit. And to help the insurance sector, Dooc said the government should remove the VAT imposed on insurers and revert to the imposition of premium tax. The Department of Finance (DOF) has prepared a comprehensive tax-reform study proposing an increase from the current 12-percent VAT to 14 percent. Dooc said the increase will hit the insurance industry hard because the 12-percent VAT excludes taxes on document stamp tax (DST), fire tax and local government taxes. Dooc noted that only the nonlife segment is subject to tax burdens, totaling to as high as 27.5 percent. Dooc said he is aware incoming Finance Secretary Dominguez is wary of the DOF proposal for a VAT increase. He added he plans to ask the 17th Congress to pass a proposed bill to reduce VAT for the nonlife industry. Dooc noted that compared to other Asian countries, the Philippines remained the country with the highest taxes imposed on non-life insurance products. He said Singapore offers a low 8 percent.
BSP eyes rules on use of virtual currency Inquirer 7th Jun 2016
The Bangko Sentral ng Pilipinas (BSP) will soon draft rules to govern the use of bitcoin as the country becomes one of the fastest-growing markets for the virtual currency. BSP Deputy Governor Nestor A. Espenilla Jr. also told reporters that monetary authorities were reviewing industry proposals to ease the cap on foreign exchange transactions. Espenilla said data showed that the Philippines was third-fastest in the world in terms of bitcoin applications as growth in the first half of last year exceeded 100 percent. “In the Philippines, bitcoin exchanges or estimated transactions passing through registered companies here range between $2 million and $3 million a month. So it is not a small amount of transactions,” Espenilla pointed out.
Next Congress eyed to plug loopholes in laundering law BusinessMirror 6th Jun 2016
The Senate, running out of time as the 16th Congress adjourned its final session on Monday, is leaving it up to the next Congress to enact remedial legislations proposed by the Blue-Ribbon Committee to prevent a repeat of the $81-million money- laundering scheme involving funds stolen by hackers from the Bank of Bangladesh account at the Federal Reserve in New York. Sen. Sergio R. Osmeña III, who spearheaded the inquiry, said Blue Ribbon panel chairman Sen. Teofisto D. Guingona III is set to file the report on Tuesday. The report, containing their findings and recommendations resulting from seven committee hearings, is expected to be pursued by the members of the 17th Congress that convenes in July. The committee listed legislative and policy recommendations that the Senate probers endorsed for the members of the 17th Congress to pursue in order to avert another big-time money-laundering scandal involving casinos and the local banking system, which tainted the Philippines’s image in the global financial community. Osmeña also confirmed that among the recommendations is the early passage of a law that will include casinos among covered institutions under the anti-money-laundering law, in effect amending Republic Act 9160, to strengthen the powers of the Anti-Money Laundering Council to check and impose sanctions against violators. The committee, likewise, endorsed easing bank secrecy restrictions, as well as amendments to the foreign-currency deposit law.
Philippines Finance Chief May Cede Revenue for Growth Bloomberg 3rd Jun 2016
Carlos Dominguez, who is set to become finance secretary in the Philippines, said the incoming government of President-elect Rodrigo Duterte is willing to initially lose revenue through income-tax cuts to help boost economic growth and reduce poverty. Lower income levies will be part of a tax reform bill submitted to lawmakers by September, Dominguez, 70, said in an interview on Friday at his office in Manila. The new administration may consider raising duties on alcohol and cigarettes, while an increase in the sales tax is unlikely, he said.
Commercial bank lending up 15.6% in April Inquirer 1st Jun 2016
Commercial banks’ lending activities grew by 15.6 percent year-on-year to P5.22 trillion in April, reversing the slowdown posted a month ago, Bangko Sentral ng Pilipinas data showed. In April, the increase in outstanding loans to residents and non-residents, net of reverse repurchase (RRP) placements with the BSP, was higher than the 14.8 percent in March. Bank lending inclusive of RRPs rose 14.8 percent to P5.5 trillion, also faster than the previous month’s 13.5-percent growth.“On a month-on-month seasonally adjusted basis, commercial bank lending increased by 1.5 percent for loans net of RRPs and by 1.7 percent for loans inclusive of RRPs,” the BSP said.
PH banks ‘least affected’ by commodity risks The Manila Times Online 30th May 2016
Debt watcher Moody’s Investors Service sees rising credit risk from commodity sector lending among Asia Pacific banks, but said that banks in the Philippines will be among the ‘least affected’, due to their low exposure to these kinds of loans. “The least affected will be banks in Hong Kong, Australia, Taiwan and the Philippines, because of either the banks’ low exposure to the energy/commodity sectors, the low reliance of these economies on commodities exports, or both,” the report stated.
PH banks among ‘most resilient,’ says Moody’s Inquirer 30th May 2016
Philippine banks would be among the most resilient from shocks caused by loan exposure to commodity-related industries such as oil, given local lenders’ low lending activity to such sectors. In a report titled “Commodity Exposure Will Add to Asset Quality and Profitability Pressure” released Monday, debt watcher Moody’s Investors Service said that in general, “banks in Asia-Pacific show moderate loan exposure to borrowers in commodity-related industries,” with such loans accounting for an average of only about 7 percent of gross loans.
North Korea-linked 'Lazarus' hackers hit a fourth bank in Philippines CNNMoney 26th May 2016
It's now clear the global banking system has been under sustained attack from a sophisticated group -- dubbed "Lazarus" -- that has been linked to North Korea, according to a report from cybersecurity firm Symantec. In at least four cases, computer hackers have been able to gain a dangerous level of access to SWIFT, the worldwide interbank communication network that settles transactions. In early February, hackers broke into Bangladesh's central bank and stole $101 million. Their methods appear to have been deployed in similar heists last year targeting commercial banks in Ecuador and Vietnam. Symantec revealed evidence on Thursday that suggests hackers used the same technique to slip into a bank in the Philippines in October. Symantec (SYMC) did not name the bank. Hackers infected desktop computers at the bank, said Eric Chien, technical director of Symantec Security Response. But researchers still aren't sure if they succeeded in stealing any money.
Aquino signs law giving more protection to 50 million deposit account holders Interaksyon 26th May 2016
Millions of bank depositors stand to benefit from the new law recently signed by President Aquino III giving depositors more protection. The new law, Republic Act 10846, amends the Charter of the Philippine Deposit Insurance Corp., or the deposit insurance law. As of December 2015, there are about 50 million deposit account holders. The law, which will take effect 15 days following the publication in the Official Gazette or in two newspapers of general circulation, gives PDIC fiscal and administrative autonomy and authority to resolve problem banks while still open.
Food & Agriculture
From food security to productivity growth: OECD urges shift in Philippine agri policy Philippine Star 3rd Jun 2016
The Philippines should abandon food security as a primary agriculture policy and instead focus on boosting production and climate change adaptation, the Organization for Economic Cooperation and Development (OECD) said. An OECD team is in town as part of a continuing analysis, which started last year, the country’s agricultural policies. There is a need “to improve agricultural policy performance to enhance the sector’s long-term productivity growth and resilience,” according to the presentation of the team’s initial findings to the government. It cited, for instance, “refocusing the policy package targeting food security” which has been employed “over the past decades.”
It’s food security, not rice self-sufficiency, for Pernia BusinessMirror 2nd Jun 2016
The Philippines would be better off importing rice from neighboring Southeast Asian countries than implementing an expensive rice self-sufficiency program, the incoming economic planning chief said on Thursday. Economic Planning Secretary Ernesto M. Pernia told the BusinessMirror that the Aquino administration’s rice self-sufficiency program was a “wrong policy.” “The rice self-sufficiency [program], that’s a wrong policy. We will push for food security not self-sufficiency, because we should be doing things that we have comparative advantage in,” Pernia said.
Agri spending to expand, with focus on infra, R&D -- Diokno BusinessWorld 1st Jun 2016
“Yes, we will increase... We will still have to review the numbers with NEDA (National Economic Development Authority),” said incoming Budget and Management Secretary Benjamin E. Diokno in a phone interview. Financing, according to Mr. Diokno, will support agriculture-enhancing infrastructure projects such as farm-to-market roads which reduces farmers’ costs in transporting produce. The next administration also aims to channel more funds into research and development, interventions such as seed and fertilizer, and in boosting manpower in the agriculture sector.
‘Rice self-sufficiency is still the way to go’ BusinessMirror 8th Jun 2016
The incoming chief of the Department of Agriculture (DA) will not abandon the Aquino administration’s bid to become self-sufficient in rice and is even considering the expansion of palay-production areas to wipe out imports. Incoming Agriculture Secretary Emmanuel F. Piñol announced on Wednesday that he is targeting to expand rice-production areas in the country by 1 million hectares to achieve rice self-sufficiency. He added that he has already asked regional directors of the DA to provide a list of irrigated and rain-fed areas, as well as the potential production areas in each region. According to the incoming DA chief, the additional 1 million hectares of rice-producing areas will be able to plug the chronic shortfall in the country’s palay output. At a 60-percent milling recovery rate, he said harvest from these additional areas could yield 4.8 MMT of rice a year. Beefing up the country’s output by nearly 5 MMT will allow the Philippines to export rice to other countries such as Africa, Piñol said.
Piñol eyes palm-oil regulatory body BusinessMirror 7th Jun 2016
Local palm-oil producers threw their support behind the plan of incoming Agriculture Secretary Emmanuel F. Piñol to put up a regulatory body that will oversee the development of their industry. Philippine Palm Oil Development Council Inc. (PPDCI) Vice President Erwin Garcia said on Tuesday a bill calling for the creation of the Philippine Palm Oil Development Authority is now being crafted by Piñol’s team. “Piñol said his first move is to create a separate body that will look into oil-palm production in the country. He said they are drafting a bill now, so that it can be taken care of immediately once he assumes office on July 1,” Garcia told the BusinessMirror. Currently, the palm-oil industry is being regulated by the Philippine Coconut Authority (PCA), an attached agency of the Department of Agriculture (DA). He said the creation of a separate agency for oil palm would hasten the industry’s development and “unlock” the potential of palm-oil production, which is badly in need of government support. Aside from the creation of the agency, Garcia called on the government to put in place a “concrete” plan to help oil-palm producers.
DA vows to help farmers expand exports to Asean Business Mirror 7th Jun 2016
The Department of Agriculture (DA) on Tuesday said it remains committed to help farmers produce high-quality products for export to neighboring Association of Southeast Asian Nations (Asean) countries. Agriculture Secretary Proceso J. Alcala said Southeast Asia is one of the “most dynamic” regions in the world, having 618 million consumers representing around 10 percent of the global population. “The DA, together with other government agencies, continues to focus its resources on key infrastructure to make the sector more productive and resilient,” Alcala said. “With tariff barriers significantly eliminated in 2010, the DA continues to strengthen its regulatory functions and policies, as nontariff measures remain to safeguard human, plant and animal health and safety with increased trade,” he added.
Change our rice policy Rappler 1st Jun 2016
'If the incoming Duterte administration's objective is to make food more affordable, then it should go in the opposite direction and make a real change: abolish the NFA's rice monopoly' I hope the newspapers are wrong when they reported that the incoming Duterte administration will recentralize all rice imports under the National Food Authority (NFA) by removing all private sector licenses to imports. The reports also said that the incoming administration will achieve rice self-sufficiency in 3 years. If this is the case, this will neither represent a change in policy nor progression. In fact, it will be retrogression to the past when the NFA controlled and undertook all rice imports. Because the Philippine government didn't want to liberalize rice importation, it asked the World Trade Organization for an interim measure of allowing rice imports by the private sector, but with a quantitative restriction. This request was granted twice, but only after sacrificing other agricultural goods whose tariffs had to be brought down faster. The last relief in the abolition of quantitative restrictions was granted by the WTO in 2014, but this will expire in 2017. I am therefore puzzled as to how the incoming Duterte administration will recentralize all rice imports under the NFA because this would obviously be a violation of our WTO commitments.
Agri fund program good until 2022 The Standard 30th May 2016
An agricultural program designed to extend funding to small farmers and fisherfolks has just been given a new lease on life, according to Senator Cynthia Villar. The Agricultural Competitiveness Enhancement Fund will be good up to year 2022 as a result of President Benigno Aquino’s signing into law the enabling measure known as Republic Act 10848, which took effect May 23, 2016. Under the law, 80 percent of the fund will be set aside as loan to micro and small enterprises with minimal interest. Only P5 million per cooperative and P1 million per individual will be released strictly for the acquisition and establishment of agri-based production and post-production, and processing, machineries, equipment and facilities to achieve modern agricultural practices.
Fast start for Agriculture Secretary-designate Manny Piñol Manila Bulletin 29th May 2016
Agriculture Secretary – designate Manny Piñol is off to a fast start. As part of his preparations for his new assignment he embarked on what he called “Biyaheng Bukid” pilgrimage to as many key agricultural production areas as he could before he formally assumes office on June 30. His objectives: to meet in person his many constituents, particularly small farmers and fisherfolk; to see for himself the challenges and opportunities they face, and to test ideas with them which can guide him and the Department of Agriculture (DA) to make good on the promise of President-elect Rodrigo Duterte of Available and Affordable Food for all Filipinos.
Climate-smart rice technologies seen to boost Philippine rice production Northbound Philippines News Online 28th May 2016
RRI, Los Baños, Laguna — Cultivating climate-smart rice varieties in unfavorable environments could boost local rice production on rainfed rice farming areas that often experience low productivity, poverty, and hunger, according to Department of Agriculture (DA) Assistant Secretary for Operations Edilberto de Luna. Funded by the International Fund for Agricultural Development (IFAD), CURE, a “network of networks,” focuses on rice farming systems where low and unstable yields are common and extensive poverty and food security prevail.
Smugglers to face harsher penalties The Manila Times 27th May 2016
President Benigno Aquino 3rd has signed into law the Anti-Agricultural Smuggling Act (Republic Act 10845) to impose stiffer penalties on the large-scale smuggling of agricultural products. Senator Cynthia Villar, principal sponsor of the bill, said the law would boost the campaign against smuggling, which continues to threaten the livelihood of farmers and the food security in the country. With smuggling now a non-bailable charge, Villar said the process of prosecuting violators would largely improve.
New Philippine president to face early test over food security Reuters 26th May 2016
MANILA - While Philippine elections this month were dominated by talk about crushing crime, the next president faces another critical early test: ensuring there is enough rice for the country's more than 100 million people. The Philippine crop is suffering mounting drought damage, just as the country's big Asian rice suppliers also suffer from an El Nino weather pattern. There are now concerns that potentially vital imports may be delayed as the incoming administration of Rodrigo Duterte, who campaigned on making food available and affordable, looks to overhaul policies and review existing state purchase plans.
Duterte gov’t faces early test over food security; rice policy in focus Business World 26th May 2016
WHILE Philippine elections this month were dominated by talk about crushing crime, the next president faces another critical early test: ensuring there is enough rice for the country’s more than 100 million people. The Philippine crop is suffering mounting drought damage, just as the country’s big Asian rice suppliers also suffer from an El Niño weather pattern.
Health & Life Sciences
Health care bill okayed The Standard 29th May 2016
The House of Representatives has approved on third and final reading of a bill that seeks to integrate hospice and palliative care into the Philippine health care system. House Bill 6422, of Nueva Ecija Rep. Estrellita Suansing, seeks to improve the quality of life of terminally ill patients and minimize the financial burden of their families. Likewise, the measure aims to prevent the draining of resources of public hospitals and local government units in providing medical and financial support to terminally ill indigent patients. The bill mandates all government and private hospitals to provide palliative and hospice care to all patients with life-threatening illness. The measure requires hospitals, private hospice institutions, medical practitioners, health and social workers for hospice and palliative care to be accredited by the DoH in partnership with the National Hospice and Palliative Care Council of the Philippines to ensure standard quality services.
Army to acquire P6.2-M worth of drugs, medicines Update Philippines 29th May 2016
To ensure that all of its personnel will be given adequate medical care in case of injury or sickness, the Philippine Army (PA) has allocated the sum of PHP6,240,000 for the procurement of drugs and medicines for the use of the Army General Hospital (AGH) in Fort Bonifacio, Taguig City. Receipt and opening of bids is scheduled on June 21, 1:00 p.m. at the Philippine Army Bids and Awards Committee Conference Room in Fort Bonifacio, Taguig City.
Philippines: Zamboanga outbreak death toll rises to 22 Outbreak News Today 29th May 2016
The outbreak of acute gastroenteritis (AGE) caused by at least three viruses, rotavirus, adenovirus and norovirus, in the southern Philippine city of Zamboanga has grown to some 3,000 cases since it began in late March. In addition, the death toll in “Asia’s Latin City” is now at 22.
Lawmaker to refile medical marijuana bill Philstar Global 28th May 2016
MANILA, Philippines - Inspired by incoming president Rodrigo Duterte’s stance on marijuana, reelected Isabela Rep. Rodolfo Albano III said yesterday he would again file his bill allowing the use of marijuana for medical purposes when the 17th Congress opens on June 30. “I have high hopes under the Duterte administration that this measure would be enacted into law. Finally, there is hope for our people, especially our children, who suffer from medical conditions like epilepsy, cancer and multiple sclerosis,” Albano said.The lawmaker added he would ask the incoming president to endorse the measure, especially after Duterte was quoted as being in favor of legalizing the use of marijuana and its byproducts for medicinal use while maintaining his opposition to its use for recreational purposes.
DOH: Medicine for Tuberculosis now in PH Manila Bulletin 27th May 2016
The medicine for multidrug-resistant tuberculosis (MDR-TB) is now in the Philippines, the Department of Health (DOH) and its partners announced Friday (May 27, 2016) in Makati City; giving hope to TB patients who only have limited treatment options because of antimicrobial resistance (AMR).
Rody won’t oppose medical marijuana Philstar Global 26th May 2016
DAVAO CITY, Philippines – Incoming president Rodrigo Duterte is not opposed to the legalization of marijuana for medicinal use, but is against its use for recreational purposes. “Medical marijuana, yes, because it is really an ingredient of modern medicine now,” he told reporters on Monday night when asked about his stance on legalizing marijuana. Duterte anchored his campaign on curbing crime and illegal drugs. He said he would still have those who use marijuana for recreational purposes arrested.
ICT
The problem with the SMC telco deal Inquirer 7th Jun 2016
President-elect Rodrigo R. Duterte is aware his overall economic goals demand no less than making the nation’s communications infrastructure fast, reliable and affordable—reminiscent of the time when President Fidel V. Ramos, upon his ascendancy to the presidency in 1992, deregulated the telco industry for the same very urgent reason. Duterte did not even wait until June 30 to issue a warning to publicly listed Philippine Long Distance & Telephone Company (PLDT) and Globe Telecom, the two biggest companies controlling the industry, to improve the speed of internet service in the Philippines, one of the slowest and most expensive in the world. But that aspiration may have faded with the sale of San Miguel Corp.’s (SMC) 700-megahertz (MHz) service band to the major players in a P70 billion buyout deal.
Philippines Hurries with Cyber Security, May Regulate Bitcoin As Well NEWSBTC 6th Jun 2016
The Philippines may soon introduce bitcoin regulations as the country’s central bank decides to tighten its screws around money laundering. The bank is also focused on improving the security of the cyber infrastructure. The South East Asian country of Philippines has suddenly decided to go hard on the money transfer and remittance businesses in the country. The sudden crackdown seems to be connected with the recent report published by Reuters and Fortune which pointed out serious cyber security lapses on the US Federal Reserve’s part. Incidentally, the report also mentioned the theft of over $81 million from a Federal Reserve account belonging to the Central Bank of Bangladesh. According to reports emerging from the Philippines, the country has canceled the money transmitter license of Philrem Service Corporation, a leading remittance service operator as its service was allegedly used by the hackers to transfer money from the account belonging to the Central Bank of Bangladesh. The Philippine Central Bank is stepping up its cyber security and is apparently considering ways to regulate Bitcoin in order to prevent money laundering. By the looks of it, the traditional banking sector is currently reduced to the state of a headless chicken after reports emerged about the SWIFT Network being compromised. SWIFT Network has so far been the only international banking network used by banks across the world to transfer money across the world. Unlike bitcoin, SWIFT is not highly secure, nor is it decentralized. At the same time, the security of SWIFT Network can only be as strong as that of a bank with the weakest cyber security. It is not a surprise that one can find a long list of banking institutions that still operate using substandard cyber security set up which can be easily compromised by the hackers.
Trust issue hounds PH’s e-commerce growth Manila Bulletin 6th Jun 2016
Filipino consumers have quickly warmed up to digital product marketing, but brands are faced with a Filipino mindset over trust issue in conducting transactions online. According to Ann Rayner, global head of communications research of TNS, a global consumer insight, after the Filipino consumers have overcome the issue of access to the digital media they are now battling over trust issue. “The Philippines is catching up in the speed of lightning,” said Rayner referring to how Filipinos have embraced the digital world, particularly using the smart mobile phones. But, Rayner also said, that “trust issue in the Philippines is holding back, that is a mindset that is holding growth in e-commerce in the country.” E-commerce in the Philippines has been growing 9 percent a year in a span of one year outstripping the global e-commerce growth of only 3 percent, Rayner said. Just last year, 20 percent of Filipinos have bought online and half of these purchases were done via mobile phone. “This makes the use of mobile phones as the next stage in the e-commerce journey,” she adds.
Faster Internet speeds vowed in 12 months Tempo 5th Jun 2016
INTERNET users have long complained of the very slow Internet speed in the country, the slowest in Southeast Asia and one of the slowest in all of Asia. The Philippines has an average Internet speed of only 2.8 megabits per second (mb/s), compared to South Korea’s 26.7, Sweden’s 19.1, Japan’s 17.4, and Hong Kong’s 16.8 in the Akamai Technologies’ State of the Internet report for 2015. In our part of the world, Singapore has 12.5 mb/s; Taiwan, 10.1; and Indonesia, 7.8. Businesses in the Philippines have been specially hurt by the poor Internet connections. They rely on the Internet for the fast and reliable delivery of goods and services. While email and online platforms are said to be efficient, the volume of exchanges between businesses and clients have slowed the broadband connections. A glimmer of hope appeared with the recent announcement that the Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom, the duopoly which runs our two principal systems Smart and Globe, have acquired additional spectrums from conglomerate San Miguel Corp.’s telecoms business for R69.1 billion. With the deal, PLDT and Globe will have use of four additional frequencies. This should enable them to speed up Internet service at a lower cost, the National Telecommunications Commission (NTC) said.
Is third telco player still possible in PHL? BusinessMirror 2nd Jun 2016
The National Telecommunications Commission (NTC) on Thursday said PLDT Inc. and Globe Telecom Inc. have returned a total of 85 megahertz (MHz) across 2G and 4G bands after their acquisition of the prized 700-MHz band to allow a third player to enter the market. In an interview with the BusinessMirror, NTC Deputy Commissioner Edgardo V. Cabarios listed the returned frequencies as follows: 20 MHz of the 700-Mhz band; 15 MHz of the 2,500 to 2,700MHz band; 40 MHz of the 3,400 to 3,500-MHz band, and 10 MHz of the 800-MHz band. The rational behind the returned frequencies is to allow a third player to enter the market, according to officials of PLDT and Globe Telecom.
‘PLDT, Globe deal to improve internet access in 6 months’ Business Mirror 30th May 2016
The transaction that allowed the duopoly in the Philippine telecommunications market to gain access to assets of San Miguel Corp. (SMC) has given the pair more power experts said, placing consumers at the losing end of the bargain. Monday saw a whirlwind of events, with telco executives announcing in separate media conferences they have secured access to the prized 700 megahertz (MHz) band, as they coacquired three holdings firms that San Miguel owns. This, according to officials at Globe Telecom Inc. and PLDT Inc., is crucial to unlocking the secrets to faster and more reliable Internet services in the country. The 700 MHz band has a key role in expanding mobile broadband into the rural areas of the country, enable mobile operators to cut capital and network costs, thereby accelerating rollout and lower the price for end users, according to a report put out by the international telecommunications association GSMA. Utilizing the 700 MHz spectrum would allow the deployment of a high-capacity LTE based wireless and fixed broadband network to deliver higher data rate and LTE wireless broadband service. For Mary Grace Mirandilla-Santos, an independent researcher on information and communications technology (ICT) and telecommunications policies, the two companies’ access to the precious 700 MHz band will pressure telcos to deliver their heavenly promises. “This is a challenge for the two telcos to improve service since they’ve been touting the 700 MHz as, seemingly, a panacea to the Philippine Internet problem. But any industry observer knows that any particular spectrum is not the only missing link to the Philippine Internet problem. Lack of infrastructure, like cell sites, poor interconnection and, most important, the lack of competition, hampers improvements in Internet service,” she told the BusinessMirror. Experts are firm in their belief that competition in the market has been thwarted. “The transaction, for the short term, strengthens the status quo even more—the status quo being the effective duopoly of PLDT-Smart and Globe Telecom. It is even worse for the long term; the ability for a third player and more to enter is now significantly weakened,” consumer group Democracy.Net.PH Cofounder Pierre Tito Galla told the BusinessMirror.
Globe to invest $500M to expand corporate data network Manila Bulletin 27th May 2016
Globe Telecom is investing close to $500 million to expand its corporate data network over a five-year period beginning 2016 to meet the increasing bandwidth requirements of corporate and enterprise clients. In a statement, Rizza Maniego-Eala, Globe Acting Chief Finance Officer, said that the corporate data expansion will support the growth of its business clients, including finance, services, retail, IT-BPO and manufacturing enterprises as they expand their operations to Visayas, Calabarzon and Davao. Globe Business, the corporate information and communications technology (ICT) arm of Globe Telecom, drives revenue growth of leading Business Process Outsourcing (BPOs) companies in the Philippines based on statistics by Call Center Focus. “With the deployment of fiber broadband technology, the infrastructure for data connectivity of enterprises allows for fast, critical connections involving huge amounts of data at all times,” she said. “A growing number of enterprises today use software applications delivered via cloud which require significant bandwidth. Deploying fiber in key areas will enhance productivity, efficiency and competitiveness of businesses that will sustain the growth momentum of the Philippine economy,” said Maniego-Eala. Specifically, the expansion of its corporate data network will address client needs for additional bandwidth as they embrace new network technologies such as Software Defined Network/ Network Function Virtualization, Cloud, Big Data, among others.
Subsidy needed to improve Internet Sun.Star 27th May 2016
FOLLOWING the stern warning of presumptive president Rodrigo Duterte to telcos, a PLDT official believes a subsidy is vital to help push for faster and cheaper Internet service in the country. PLDT SME data solutions category head Marc Frederick T. Roxas explained the importance of government subsidy for communications infrastructure. “What would be better is if the government could subsidize to help us push our infrastructure to many more locations so everyone could benefit,” said Roxas in an interview at the sidelines of a PLDT press conference in Cebu City yesterday. “It would really entail help from government to improve our service. Since we are in an archipelago, the investment (of telcos) will be really expensive,” he added. In the US, for instance, the government allocates funds called the Universal Service Fund that subsidizes rural telephone and broadband services. Duterte recently told telcos to shape up or he would ease the entry of large foreign players, who are limited to a 40 percent ownership under the present setup. Giant telcos PLDT and Globe Telecom said in separate statements that they are supporting the call for faster Internet. “We support the call for faster Internet. In fact, Globe is at the forefront of building the much needed infrastructure nationwide to make Internet services easily accessible either through mobile or wireline. This is supported by heavy investments over the years to make sure the Philippines is at par with other countries in terms of technology use,” said Yoly Crisanto, Globe senior vice president for corporate communications. Likewise, PLDT said it is on a major three-year network investment program.
US companies welcome creation of DICT – Cuisia Manila Bulletin 26th May 2016
Philippine Ambassador to the United States Jose L. Cuisia, Jr. said yesterday the American business community is a strong supporter for the creation of the Department of Information and Communications Technology (DICT) stressing the passage of Republic Act (RA) No. 10844 will long be remembered as one of the important pillars of President Aquino’s economic legacy. “The DICT strategically positions the Philippines as a leader in the dynamic global ICT market. It will support not just the business process management industry where the Philippines is already a leader, but also all other ICT-enabled sectors. It will likewise improve overall economic competitiveness through enhanced digital connectivity and integration. But most importantly, it is hoped that the Internet experience of Filipinos, particularly the youth, will be enhanced and thus allow them to use their ideas, creativity and imagination in the world digital economy,” said Cuisia. Signed into law by the President on May 23, 2016, RA 10844 provides that the DICT will be the “primary policy, planning, coordinating, implementing and administrative entity of the Executive Branch… that will plan, develop and promote the national ICT development agenda.”
Globe Telecom urges govt to ease regulations on new cell sites GMA News Online 26th May 2016
lobe Telecom on Thursday urged the government anew to ease the process of establishing new cell sites, noting that Metro Manila is the most "problematic area" to do so. "Metro Manila is critical in the deployment of new cell sites as many of our customers are also concentrated in this area. However, there is a myriad of issues that restrains realization of our plans to establish more cell sites in the area and improve the internet experience of our customers," Joel Agustin, Senior Vice President for Program Governance, Network Technical Group, said in a statement. According to Globe, the issues encountered during the deployment of new cell sites range from the opposition of neighbors and homeowners associations to "political bickering." According to Globe President and CEO Ernest Cu, the easing of regulations on new cell sites would help the Philippines grow its internet backbone and enable local businesses to remain competitive "amid rapid digitization." Telecom operators currently need to secure an average of 25 permits at the local government level. It takes at least eight months to process the papers for building a single cell site. The actual construction of the infrastructure, costing an average of P18 million per site, adds to the timeline of the project.
PLDT, Globe start rollout of high-speed internet infra Inquirer 8th Jun 2016
Telco giants Philippine Long Distance Telephone Co. and Globe Telecom announced initial rollout plans for the high-speed mobile internet infrastructure across their networks. PLDT spokesman Ramon Isberto said 360 cell sites in Manila, Cebu and Davao would be outfitted with equipment that will use the 700 Megahertz spectrum within 2016. Globe said it would roll this out across 200 cell sites in the next few months. Globe and PLDT on May 30 announced a deal to buy San Miguel Corp.’s telecommunications unit for close to P70 billion. That gave each player equal access to SMC’s valuable radio frequencies, including the 700 MHz band, ideal for covering large geographic areas. Globe fired up its first 700Mhz cell site over the weekend near Hardin ng Bougainvillea in UP Diliman, Quezon City. PLDT chair and CEO Manuel V. Pangilinan, meanwhile, said via his Twitter account that the first 700MHz site was launched in Tanay, Rizal late Tuesday. Joel Agustin, Globe Senior Vice President for Program Governance, Network Technical Group, said in a statement the next step for Globe was to roll out the 700 MHz in 200 sites this year. Globe and PLDT control about 15,000 cell sites across the country. The conservative rollout against their total network comes as device support for this frequency is still limited to high-end smartphones like Samsung’s S6 Edge+, Note 5, S7, S7 Edge, and J5 2016. A Globe spokesperson said the newly acquired SMC assets means the company can bring the technology to more affordable handset models.
BSP readies rules for virtual money, crowdfunding BusinessWorld 6th Jun 2016
BSP Deputy Governor Nestor A. Espenilla, Jr. said regulators are preparing new rules to cover the use of digital money after noting an estimated $2-3 million in bitcoin transactions in a month. The bitcoin is a form of electronic currency used for paying for goods sold through the Internet and also for investment. The BSP is the sole authority that can issue money in the Philippines through bank notes and coins used as legal tender. The central bank official said the Philippines is currently third in the world in terms of bitcoin use, with the number of users having more than doubled as of the first half of 2015. The BSP is also checking crowdfunding and peer-to-peer lending, Mr. Espenilla said. “As a regulator, all is centered on what are bank-like activities: money taken from the public in one way or another and re-lent to somebody... If something walks or talks like that, then it may be considered a banking activity.” BSP will team up with the Securities and Exchange Commission since some crowdfunding may be tantamount to issuing securities to the public.
Philippines Clamps Down on Money Changers, Boosts Cyber Security Bloomberg.com 5th Jun 2016
Philippine central bank will tighten rules and strengthen its online security unit to combat money laundering and cyber crimes, Governor Nestor Espenilla said Saturday. Rules governing foreign-exchange dealers and remittance companies will be revised in the next two to three months, Espenilla told a forum in Mactan City, Cebu. The Philippines has been in the spotlight after one of the largest bank heists in modern history, where thieves hacked into Bangladesh Bank’s account at the U.S. Federal Reserve in February and routed $81 million in funds to accounts at Rizal Commercial Banking Corp. The money was transferred by a remittance company into gaming halls.
Globe, PLDT take over SMC's telco assets CNN 31st May 2016
A landmark deal among major telecommunications players promises to bring much faster internet speeds to mobile phone users in the next few months. However, it also raised concerns that valuable telco assets are becoming even more concentrated in the hands of a few, removing competition in a fast-growing and lucrative market. San Miguel Corp. (SMC) sold its telco assets to the Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom, Inc. for about P70 billion on Monday. At the center of the deal is the 700-megahertz spectrum frequency, which is more cost-efficient to operate, has wider coverage, and reaches indoor areas better. Globe and PLDT are splitting the assets, each taking a 50% stake in Bell Telecommunications Philippines, Inc.; Eastern Telecommunications Philippines, Inc., and Tori Spectrum Telecommunications, Inc. (formerly wi-Tribe), among others. It represents a coup for the two carriers, who have dominated the industry since 2011, when the Pangilinan-run PLDT bought out Digital Telecommunications Philippines, Inc. (Digitel), which operated Sun Cellular. The hold Globe and PLDT have on the telco market has been controversial. Their supposed duopoly was heavily discussed during the presidential and vice-presidential campaigns. Candidates said the country's sluggish internet speeds and high prices were due to the lack of competition in the industry.
Execs wish for tempered hopes on I.C.T. department BusinessMirror 30th May 2016
With the establishment of the Department of Information and Communications Technology (DICT), the people must temper their outlook and realize the new Cabinet body faces a herculean task in tackling the challenges in the technology sector. “I know everybody is excited that, finally, the bill has been passed,” Information and Communications Technology Office (ICTO) Deputy Executive Director Monchito B. Ibrahim said. “I urged the people to manage their expectations, as the new body will have its full hands in the first 60 days in implementing the rules and regulations.” After a long lobby by interest groups, President Aquino signed on May 24 Republic Act (RA) 10844, or the DICT Act of 2015. Prior to the signing of the DICT Act, the ICT concerns of government under the ICTO were placed under the purview of the Department of Science and Technology. The DICT “will be at the forefront in leading our country and our citizens forward into the digital economy,” Casambre, ICTO executive director, said in his May 18 letter to Hermogenes, the deputy executive secretary for legal affairs of the Office of the President. The ICTO provided the BusinessMirror a copy of Casambre’s letter to Hermogenes only on May 26. The same day, Ibrahim told the BusinessMirror that the DICT will have the National Telecommunications Commission, National Privacy Commission, and Commission on the Prevention of Cybercrime as attached agencies. According to Ibrahim, the DICT will have to focus on four key areas to develop ICT in the country: e-government, infrastructure, accessibility and innovation.
SMC sells telco assets to PLDT, Globe Inquirer 30th May 2016
Industry giants Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom will jointly buy out the telecommunications assets of conglomerate San Miguel Corp. in a deal expected to cement their duopolistic hold on the local market amid the growing clamor for better Internet services. The surprise development comes as SMC, a diversified conglomerate that planned to launch a rival service this year to compete in the industry’s hottest segment—mobile high-speed internet—was made to face hurdles on almost all fronts in its bid to become a viable third telco player. Inquirer sources with knowledge of the deal said that PLDT, Globe and SMC have agreed in principle to what was expected to be a transaction worth a little more than $1 billion. An agreement is scheduled to be signed between the transacting parties this morning. It is expected to be the biggest deal of its kind since PLDT restored the telco duopoly in 2011, when it acquired the Gokongwei family’s Digital Telecommunications Philippines Inc. (Digitel), which operates Sun Cellular. Digitel was the first to launch industry-changing unlimited texting and calling plans that affected the bottomline of Globe and Smart. Officials of PLDT, Globe and SMC did not immediately respond to requests for comment.
Infrastructure
Gov’t infra spending surges in Q1 Manila Bulletin 29th May 2016
Infrastructure spending surged in the first three months of the year as government accelerates implementation of flagship infrastructure projects, the Department of Budget and Management (DBM) reported over the weekend.Based on government’s first-quarter disbursement report, total infrastructure and other capital outlays jumped 53 percent in January to March this year to P104.8 billion from P68.5 billion last year. The end-March 2016 infrastructure spending was equivalent to 16.8 percent of this year’s total program, DBM said. Meanwhile, total government budget disbursements in the first three months was short of target by 13 percent to P591.5 billion against the P680.7-billion goal, but year-on-year, expenditures grew 17 percent from P504 billion.
High-speed link with Manila needed to spur Clark use BusinessMirror 8th Jun 2016
Put up a high-speed transport system that will link Clark and Manila, and an action plan by the national government on airport and aviation development that will compel airlines to cooperate. These are the ideas behind the suggestion made by Manila International Airport Authority (Miaa) General Manager Jose Angel A. Honrado to fast-track the transfer of operations from the Ninoy Aquino International Airport (Naia) to Clark Field in Pampanga. Honrado made the suggestion during the signing of a tripartite agreement among Miaa, Civil Aeronautics Board (CAB) and Civil Aviation Authority of the Philippines (Caap). These agencies agreed to efficiently use the available slots for domestic air carriers to lessen air congestion. Honrado said the Naia had reached its maximum limit of 35 million passengers per year and his long-term solution to the congestion problem is to develop and use Clark International Airport. At least 36.7 million passengers used the airport in 2015. He added that Cebu Pacific, Cebgo and Air Asia can initiate the transfer to alleviate the air-traffic congestion in Manila. Miaa Spokesman David de Castro said Honrado made the suggestion in response to criticisms that he had stalled the plans of airlines who wanted to transfer from Manila to Clark.
Incoming DOF chief ‘rejects’ Purisima’s CTRP Manila Bulletin 5th Jun 2016
MANILA– The Philippines’ incoming finance minister Carlos Dominguez says he is open to diversifying the country’s borrowings to fund infrastructure projects and will push for a cut in income taxes to keep the Southeast Asian country on track for growth. Boosting infrastructure spending is among the priorities for the new government of Rodrigo Duterte, the firebrand mayor from Davao City in the south, who won the May 9 election by promising he will go hard against crime and corruption and improving basic government services. That includes addressing the Philippines’ horrific traffic jams that have weighed on economic growth, and Dominguez told Reuters he will ensure there are enough funds for new infrastructure projects. Sukuk bonds “are certainly in the menu,” as well as yuan borrowings, in terms of fund-raising. “It’s not diversification for diversification’s sake, it’s (getting) the best deal. It depends on who gives us a better deal, will it be the local market or the international market?”
Lots of room for NAIA infra upgrades before tapping Clark -- CAAP Business World Online 3rd Jun 2016
THE Civil Aviation Authority of Philippines (CAAP) said the country’s main airport has room to expand its infrastrucure to resolve its congestion problems, even as the government pursues the construction of a second airport as a longer-term alternative. Rodante S. Joya, Deputy Director General for Operations of CAAP, told reporters during an interview in Pasay City that the next government should prioritize the repair of terminal buildings and runways to ease airport traffic. “We must expand the capacity of terminal buildings and aircraft parking of NAIA (Ninoy Aquino International Airport). There’s still enough space there,” according to the CAAP official.
Govt infrastructure spending surges in Q1 The Manila Times 29th May 2016
Government spending on infrastructure rose in the first quarter of 2016 from a year and quarter earlier, with the Department of Budget and Management (DBM) expressing confidence the robust capital expenditure growth will continue in the current quarter. A DBM assessment released over the weekend showed government spending for infrastructure and other capital outlays jumped 52.8 percent to P104.8 billion in the first three months of the year from P68.5 billion spent a year earlier. The budget agency said among the projects that helped boost capital expenditures were completed works of the Department of Public Works and Highways (DPWH) from its regular maintenance, repair and rehabilitation operations of road networks nationwide. Transport infrastructure projects of the Department of Transportation and Communications (DOTC), and implementation of local infrastructure development projects in the Autonomous Region of Muslim Mindanao (ARMM), were also cited. Some non-infrastructure programs, however, are included under the expenditure category.
‘PPP Act should be high on new administration’s agenda’ BusinessMirror 26th May 2016
Stakeholders in the public-private partnership (PPP) arena—businessmen and government officials alike—are dismayed by the failure of the 16th Congress to pass the proposed PPP Act, which contains the needed amendments to the build-operate-transfer law that will shift the country’s infrastructure development to higher gears. “We were hoping that the PPP Act will pass the current Congress, because it is an infrastructure bill intended to address the infrastructure problem that we are currently experiencing,” PPP Center Executive Director Andre C. Palacios told the BusinessMirror in an interview. Sans the passage of the bill, the country might slide into a so-called infrastructure crisis, which will require extraordinary efforts to mitigate. “Without the law, the PPP Center and the next government will need to push harder to develop infrastructure,” Palacios said. With this, Makati Business Club (MBC) Executive Director Peter Angelo B. Perfecto, European Chamber of Commerce of the Philippines (ECCP) External Vice President Henry J. Schumacher and Megawide Construction Corp. Corporate Information Officer Louie B. Ferrer are one in their call for the Duterte administration to consider the bill a priority. Duterte earlier made statements that his administration will continue the PPP Program, as this is another avenue for infrastructure development in the Philippines.
PSE: Draft framework for listing PPP projects finished BusinessWorld 26th May 2016
PSE will publish the draft framework within the week for public comment, its chief operations officer, Roel A. Refran told reporters on the sidelines of the Asia Real Estate Summit 2016 presented by JLL Philippines in Pasay City on Wednesday. “We will be actually already ready to post for public comments so expect it to come either by [today] or Friday. We are going to do one-on-one consultations also to get their inputs,” Mr. Refran said.
Manufacturing
Study finds strong global potential in five PH industries mb.com.ph 3rd Jun 2016
The Philippines is urged to concentrate on developing specific niché products in the global value chains (GVCs) on five domestic industries – automotive, electronics and electricals, aerospace, chemicals, paper – which have the biggest potential to compete globally, according to a new study. The Duke University Center on Globalization, Governance, & Competitiveness (Duke CGGC) was commissioned by the Science, Technology, Research, and Innovation for Development (STRIDE) Program and the Advancing Philippine Competitiveness (COMPETE) Project of the United States Agency for International Development (USAID) to assist the Board of Investments (BOI) in its efforts to further develop framework and strategies in developing domestic industries under the Manufacturing Resurgence Program.
SMC to invest P60 B in Bataan Freeport The Philippine Star 26th May 2016
Diversified conglomerate San Miguel Corp. (SMC) is expected to invest about P60 billion in various developments in the Freeport Area of Bataan (FAB). In a briefing yesterday, Authority of the Freeport Area of Bataan (AFAB) chairman and administrator Deogracias Custodio said a subsidiary of SMC EFARE Investment Holdings Inc. secured last year the go signal to develop a 500 hectare property in the Bataan Freeport into an industrial park. SMC is seen to spend P40-to P50-billion for the construction of a 600-megawatt coal-fired power plant within the FAB. Aside from the industrial estate and the power plant, SMC is also expected to expand its feeds plant in Mariveles at a cost of P2.21 billion. “San Miguel’s B-Meg is at least doubling (the capacity) of their plant. They plan to register the plant with us. The existing one is registered with the Board of Investments but the expansion will be under AFAB,” Custodio said. SMC is one of the country’s largest conglomerates with interests in food, beverage, infrastructure, packaging, oil refinery, beer, and power. AFAB expects approved investment pledges to reach P7 billion this year, up 13 percent from the previous year driven by the continued entry of manufacturing firms. “We’re looking at establishing ourselves as a BPO player also. Right now, the growth is still in manufacturing such as bag and shoe manufacturing,” Custodio said. As of the first quarter, AFAB had already approved P194 million worth of foreign direct investments in the Freeport, majority of which comprise BPO firms.
DTI, JICA plan 2-yr PH auto industry potential study The Manila Times 26th May 2016
A joint technical study on the country’s automotive industry and how the Philippines can take a vital position in the global value chains (GVCs) will be crafted in two years. The Department of Trade and Industry (DTI) and the Japan International Cooperation Agency (JICA) signed a two-year technical cooperation project to come up with a study on the “Elaboration of Industrial Promotion Plans Using Value Chain Analysis.” It will examine the Philippine automotive industry and the country’s capacity and which potential areas could be developed and make it big in the automotive GVCs. “As a strong driver for economic growth and job creation, the automotive industry has substantial multiplier effects on knowledge transfer and linkages creation within the domestic economy. Our goal is to deepen our participation in GVCs to spur foreign and domestic investments and generate more employment,” said Trade Undersecretary Ceferino S. Rodolfo. The agreement was signed by DTI representatives and JICA Philippine Office Chief Representative Susumo Ito. Apart from being incorporated into the Manufacturing Industry Roadmap, the study will also recommend Industrial Promotion Plans including action plans encompassing the sectors automotive, auto-parts, and auto-electronics. “The DTI-JICA project complements the country’s Comprehensive Automotive Resurgence Strategy (CARS) Program. Through CARS, we intend to become a full participant in the value chain of automotive manufacturing in the region,” said Rodolfo, who is also the head of DTI’s Board of Investments (BOI). Signed into law by President Benigno S. Aquino 3rd as Executive Order No. 182 in May last year, the program provides fiscal support for investment in the production of auto parts and other strategic parts that are not normally produced in the country, and provides variable incentives to induce both volume production and logistics efficiency.
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