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Peso weakens on potential Trump impeachment

THE peso weakened against the dollar on Friday as worries about the potential impeachment of US President Donald J. Trump haunted the market.

It closed at P50.815 against the greenback, 18 centavos weaker than on Thursday, according to data from the Bankers Association of the Philippines.

The peso also weakened by 17.5 centavos from a weak earlier.

The peso opened at P50.63 versus the dollar, weakened to as much as P50.86 and strengthened to as much as P50.625 a dollar.

Dollars traded slipped to $835.75 million from $998.7 million on Thursday.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion traced the peso’s decline to “global headwinds.”

“The market is cautious going into the holiday break with global headwinds like the impeachment of US President Donald Trump as potentially the main driver,” he said in a text message.

Reuters reported that after US Speaker Nancy Pelosi said she would not submit the impeachment case to the Senate until they have established how Republicans will manage the proceedings, Mr. Trump tweeted that he preferred an immediate trial.

“So after the Democrats gave me no due Process in the House, no lawyers, no witnesses, no nothing, they now want to tell the Senate how to run their trial,” he said on Twitter. “I want an immediate trial.”

Ms. Pelosi was not expected to move until lawmakers come back after their year-end recess in early January, according to aides.

The US House of Representatives on Wednesday approved two articles of impeachment against Mr. Trump. A trial next month to decide whether he will be convicted and removed from office is expected at the Senate, which is considered to be a “friendlier terrain” for the US president.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort traced the peso’s performance to US data.

“Stronger US initial jobless claims data also supported the latest gains in the dollar,” he said in a text message.

The number of Americans who filed for unemployment benefits slipped from more than a two-year high last week on labor market strength.

Data from the US Labor department released on Thursday showed that initial claims for state unemployment benefits went down by 18,000 to a seasonally adjusted 234,000 for the week.

Reuters said that although the drop did not unwind the jump by 49,000 seen last week, it likely does not indicate material shift in the labor market conditions as claims data tend to be volatile in the period after Thanksgiving. — Luz Wendy T. Noble

Bill seeks to double deposit insurance

A CONGRESSMAN has filed a bill seeking to double the maximum deposit insurance to P1 million pesos.

House Bill 5812 by Makati Rep. Luis N. Campos, Jr. will amend the Philippine Deposit Insurance Corp. (PDIC) charter.

The insurance hike is meant to adjust for inflation and protect depositors, the lawmaker said.

The measure also cited the closure of 41 banks from 2017 to 2019, affected thousands of depositors.

The Philippine banking system had P12.83 trillion in deposits as of June 30, 5.8% higher than a year earlier, according to the state deposit insurer.

These deposits were spread across 67.8 million accounts, 13.8% higher than a year earlier.

“Banking is impressed with public interest,” Mr. Campos said in the bill’s explanatory note. “It is, therefore, imperative to maintain faith and confidence in the country’s banking system as an indispensable element of the national economy and its continued growth and development.” — Genshen L. Espedido

More than 300 illegal Chinese workers arrested

THE Bureau of Immigration arrested 342 illegal Chinese workers in a raid of a Philippine Offshore Gaming Operator (POGO) in Quezon City, it said in a statement on Friday.

The suspects were found to have been working in the country without a permit or visa, the bureau said.

The online gaming operator was located inside the Global Trade Center Building in Bago Bantay, Quezon City. The Chinese workers were detained pending their deportation.

The arrests add to a list of incidents involving a number of undocumented Chinese workers employed by illegal online gaming operators in the Philippines.

“This is another massive arrest by our Intelligence Division, in coordination with the Quezon City Police District-National Capital Region Police Office, Immigration Commissioner Jaime H. Morente said in a statement. “This could not have been possible without their help.”

The POGO they worked for was licensed but did not have a permit to operate from the Philippine Amusement and Gaming Corp, the bureau said.

The online gaming operator might also be a front for other unscrupulous activities, the agency said.

The Chinese government had canceled the passports of all 342 workers, making them fugitives from justice, it added.

“We coordinated this operation with the Chinese government, which confirmed the company’s involvement in illegal activities, victimizing mostly their compatriots in China,” Immigration Intelligence Division chief Fortunato S. Manahan, Jr. said in the same statement.

In September, the bureau arrested 277 Chinese workers who were part of a fraudulent online scheme in Pasig.

In the same month, 324 Chinese workers were found to have been involved in cybercrime activities in Palawan. — Gillian M. Cortez

Duterte’s approval rating rose to record — Dominguez

PRESIDENT Rodrigo R. Duerte’s approval rating jumped to a “historical high” in December, one of his economic managers said on Friday, citing a poll by Pulse Asia Research, Inc.

The president’s rating climbed 9 points to 87% from a quarter earlier, Finance Secretary Carlos G. Dominguez III told reporters.

“This is the first time ever at this point in any administration that a president has reached this high,” the Finance cheif said. This is a historical high note,” he added.

The poll also showed that Mr. Duterte’s disapproval rating had declined by 3 points to 5%.

Nationwide, Mr. Duterte’s approval rate was highest in Mindanao at 98%, up from 92%. Visayas gave him 93%, which was also higher than 84% in the past quarter..

But his approval rating in the National Capital Region slipped by 2 points to 78%, while his rating rose to 83% from 69% for the rest of Luzon. — Beatrice M. Laforga

Duterte says he’s not answerable to ICC

PRESIDENT Rodrigo R. Duterte on Friday said he would never answer to the International Criminal Court (ICC) for his administration’s deadly war on drugs.

In a speech, the president said the court should not interfere with his anti-illegal drug campaign, which is supported by majority of Filipinos despite international criticism.

“I will never answer any question coming from you,” Mr. Duerte said, adding that he wasn’t afraid of the tribunal. “I am responsible to the Filipino.”

The ICC, from which the Philippines withdrew this year, is probing the drug war situation in the Philippines for alleged human rights violations.

Mr Duterte defended the killings done under his administration. He said human rights groups had failed to focus on the lives destroyed by drug traffickers.

He said he wanted to face human rights activists in court. “I want to debate with you what ills this country and I will be happy to answer you.”

Philippine police have said they have killed about 6,000 people in illegal drug raids, many of them resisting arrest. Some local nongovernmental organizations and the national Commission on Human Rights have placed the death toll at more than 27,000. — Gillian M. Cortez

Congressmen back revival of talks with Maoist rebels

MORE than a hundred congressmen have backed a resolution calling for the resumption of peace talks between the government and Maoist rebels.

House Deputy Minority Leader and Bayan Muna Rep. Carlos Isagani T. Zarate said 131 lawmakers signed House Resolution 636.

“This resolution sends a strong message of support from the members of the House in pursuing the peace process as a way of ending the root causes of the more than five-decade armed rebellion,” he said.

The lawmaker also warned the government against “saboteurs” who allegedly seek to derail the peace talks.

“It is good that more and more people like our fellow solons are seeing the need for genuine peace as paramount and they are not swayed by the lies of these militarists, in and out of government,” Mr. Zarate said.

Mr. Duterte earlier said he would send an envoy to the Netherlands to talk to Communist party of the Philippines founder Jose Maria Sison, who is in self-exile there, to revive negotiations. — Genshen L. Espedido

Senator says it’s difficult to appeal massacre case

PROSECUTORS might have a hard time appealing the dismissal of the 58th murder case against two members of a powerful clan in Maguindanao province a decade ago, a senator said on Friday.

“From a legal standpoint, it is difficult to make a case on the 58th victim, if the intention is to re-open the trial,” Senator Franklin M. Drilon Senate Minority Leader Franklin M. Drilon told reporters in a group message.

The 58th murder case involved photojournalist Reynaldo Momay, whose body was never found. His denture and jacket, however, were recovered from the crime scene.

“All those who were tried for the murder of the 58th victim were acquitted, on reasonable doubt, and to reopen the case for him will constitute double jeopardy,” said Mr. Drilon, a former Justice secretary.

A Quezon City court on Thursday convicted almost a hundred people in the massacre of more than 50 people, including 32 journalists, in what a global media watchdog has called the single deadliest attack on journalists.

Among those convicted were former Maguindanao Mayor Datu Andal “Unsay” Ampatuan, Jr. and his brother Zaldy, who is a former governor of the Autonomous Region in Muslim Mindanao, along with 26 other principal accused for 57 counts of murder.

More than a dozen more people were convicted as accessories to the crime. Their other brother, Datu Sajid Islam Ampatuan, was acquitted along with more than 50 others. — Charmaine A. Tadalan

6 shortlisted for top justice post

THE Judicial and Bar Council (JBC) has shortlisted six nominees for a vacancy in the Supreme Court.

Chief Justice Diosdado M. Peralta’s promotion in October left an opening at the high court.

Of the 15 applicants, the JBC nominated Manuel M. Barrios, Samuel H. Gaerlan, Ramon R. Garcia, Jhosep Y. Lopez, Jose Midas P. Marquez and Eduardo B. Peralta, Jr., according to a copy of the JBC’s letter to President Rodrigo R. Duterte. — Charmaine A. Tadalan

Suspect charged for selling fake tax cards

THE Bureau of Internal Revenue (BIR) filed charges against a suspect who illegally sold more than 100 fake tax identification number (TIN) cards to Chinese workers.

In a statement on Friday, the bureau said the suspect had sold and delivered 126 fake TIN cards to an informant with a promise to hasten the process.

The tax agency said the TINs were invalid and were registered under a different name or company. — Beatrice M. Laforga

Consumers, businesses remain bullish this quarter

CONSUMERS remained bullish this quarter, though less so than in the July-September period, while business confidence improved, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

Consumers’ “current quarter” confidence index (CI) slipped to 1.3% from 4.6% last quarter, with the reading in the National Capital Region going down to 7.7% from 13.2% and that outside NCR similarly dropping to 0.3% from 3.2%, according to results of the fourth-quarter Consumer Expectations Survey which the BSP conducted last Oct. 1-12 among 5,421 households nationwide.

The CI is computed as the percentage of households that answered in the affirmative less the percentage of those that answered when asked on specific indicators for the overall condition of the economy, household finances and household income.

CONSUMER CONCERNS
“According to respondents, their less favorable outlook for Q4 2019 was due to… higher prices of commodities, low or no increase in salary/income, increase in household expenses, and high unemployment rate,” the BSP said in a news release summarizing survey results, citing weakened sentiment across all three main indicators and across all income groups.

Consumer expectation for the “next three months” and the “next 12 months” slipped, to 15.7% from 15.8% and to 26.4% from 29.8%, respectively.

“Similar to Q4 2019, the lower CI for Q1 2020 and the next 12 months stemmed from households’ anticipation of higher prices of commodities, no or low increase in salary/income, high unemployment rate and increase in household expenses,” the central bank noted.

“…[F]or Q1 2020, consumer sentiment across component indicators was generally steady compared to Q3 2019 survey results,” it said, adding that “[f]or the next 12 months, respondents’ outlook on economic condition of the country and family financial situation was less favorable, while family income remained broadly steady compared to Q3 2019 survey results.”

The outlook for household spending on basic goods and services steadied at 37.1% for the first three months of 2020, compared to the “next quarter” reading in the third-quarter survey. “This indicates that respondents who expect to spend more on goods and services outnumbered those who said otherwise, but the number that said so remained generally unchanged compared to Q3 2019 survey result for Q4 2019,” the BSP explained.

Households’ spending outlook was mixed across commodity groups:

• steady for food, non-alcoholic and alcoholic beverages and tobacco, fuel, and personal care and effects;

• while more respondents expected an acceleration of expenditures on transportation, education, recreation and culture, clothing and footwear, medical care, communication, restaurant and cafes, and house rent and furnishing;

• and fewer respondents anticipated higher spending on electricity and water.

The percentage of households that considered this quarter as a good time to buy big-ticket items declined to 27.2% from the 28.9% recorded in the third-quarter survey.

The BSP noted that a “less sanguine outlook on buying conditions was evident” for consumer durables, motor vehicles, as well as house and lot, blaming respondents’ “waning” buying intentions to greater priority on food and other basic needs from big-ticket items, high prices of big-ticket items and low or insufficient income.

The percentage of those who intend to buy big-ticket items in the next 12 months similarly decreased across the three big-ticket items.

The latest survey also showed that consumers expect inflation, interest and unemployment rates to increase and exchange rate to depreciate in the the next 12 months.

BUSINESSES MORE CONFIDENT
Business CI improved to 40.2% in the “current quarter” from 37.3% in the third-quarter survey, with the NCR reading edging up to 42.2% from 40.4% and the reading outside the capital going up to 36.8% from 31.9%, according to the fourth-quarter Business Expectations Survey which the BSP conducted last Oct. 3-Nov. 25 among 1,477 firms drawn from a combined list of the 2017 BusinessWorld Top 1000 Corporations in the Philippines and the Securities and Exchange Commission’s (SEC) Top 7,000 Corporations in 2010.

The central bank said survey respondents attributed improved optimism to expectation of higher consumer demand during the holiday and harvest seasons; increase in sales, orders and projects; more favorable macroeconomic conditions such as faster economic growth and lower inflation and unemployment rates; bigger government spending, mainly in infrastructure and (e) business expansion.

The BSP also noted that respondents anticipated positive impact of the country’s hosting of the Nov. 30-Dec.11 2019 Southeast Asian Games in terms of availability of more jobs and increased consumer spending.

At the same time, business confidence for the “next quarter” fell to 40.3% from 56.1%, while the reading for the “next 12 months” improved slightly to 59.6% from 58.6%.

Optimism weakened for “next quarter”, with the CI dropping to 40.3% from 56.1% in the third-quarter survey due to expectations of lower consumer demand after the holiday and harvest seasons; decline in sales and orders; stiffer competition; and other factors like rising prices, concerns about the African Swine Flu outbreak and fishing ban period.

Businesses turned more optimistic about prospects for the next 12 months due to expectations of sound macroeconomic fundamentals such as more stable economic growth and lower inflation and interest rates; increased consumer demand; bigger government spending on infrastructure; development of new product lines/models and marketing and business strategies; business expansion; as well as new projects, clients and customers.

Respondents also expected financial conditions to remain tight, even as they saw easier access to credit.

Survey results also suggested that more firms will continue to hire in the next quarter and the next 12 months, although the number of those who said so was lower than in the preceding quarter’s survey.

Moreover, the percentage of industries that plan to expand “next quarter” slipped to 29.1% from 30.4% in the past quarter’s survey, with manufacturing; electricity, gas and water; as well as agriculture fishery and forestry turning more conservative, while mining and quarrying businesses turned more optimistic.

The reading for expansion plans for the “next 12 months” improved slightly to 38.1% from 37.9% on increases for manufacturing as well as mining and quarrying, while businesses turned more conservative in the electricity, gas and water as well as agriculture, fishery and forestry sectors.

The latest survey also showed that respondents expect the peso to appreciate, interest rate to decline and inflation rate to increase for the current quarter.

While they expected the overall increase in prices of widely used goods to keep within the central bank’s 2-4% target range for 2019 and 2020 they expected inflation to average 2.9% for this quarter, three percent for 2020’s first three months and 3.2 percent for the next 12 months.

They also expect the peso to average P51.5 to the greenback this quarter, P51.7 per dollar in 2020’s first three months and P51.8 to the dollar for the next 12 months.

Regulator to renegotiate Metro Manila water deals

THE ADMINISTRATOR of the Metropolitan Waterworks and Sewerage System (MWSS) said on Friday that it had given the country’s two largest water concessionaires a chance to renegotiate new terms of their contract with the government, ending speculation on their fate while clarifying issues that have arisen since Dec. 3.

In a statement, MWSS Administrator Emmanuel B. Salamat said his office had been directed to discuss with Manila Water Company, Inc. and Maynilad Water Services, Inc. to remove the supposed “illegal and onerous provisions” of their contract.

“MWSS has been expressly directed to renegotiate the Concession Agreements with Manila Water and Maynilad in order to remove the illegal and onerous provisions of the same as determined by the Department of Justice, as well as to include such other provisions that are beneficial to the consumers and the entire nation,” he said.

Mr. Salamat said events and developments in recent weeks on the actions of MWSS through its board of trustees, and the pronouncements made by President Rodrigo R. Duterte and other government agencies and officials “have resulted in numerous, and at times, inaccurate speculations.”

He said the 25-year concession agreements spanning 1997-2022 with Maynilad and Manila Water “are still valid and subsisting contracts.”

He said the MWSS board resolution dated Dec. 9, 2019 only revoked the previous resolution dated April 16, 2009 involving the extension period from 2022 to 2037 of Manila Water’s concession.

The Dec. 9 resolution also revoked another board resolution dated Sept. 10, 2009 on the extension of Maynilad’s concession for the same period.

“This action of the Board did not result in the rescission or outright cancellation of the said contracts, which requires a separate and distinct act to be legally effective. As such, the government through the MWSS is giving the two Concessionaires the opportunity to renegotiate and agree on the new terms of the Concession Agreement,” he said.

He said MWSS “acknowledges the cooperation showed by both concessionaires not only in expressly declaring that they would no longer collect or enforce the recent arbitral awards but also in their expressed willingness to renegotiate the inequitable provisions of the Concession Agreement.”

“In view thereof, MWSS and the Concessionaires will exert all necessary efforts to comply with the directive of the President to execute a new water concession agreement after 2022 which is currently being drafted by the Department of Justice.

He said MWSS is “fully engaged” in ensuring the performance of its mandates under Republic Act No. 6234, as well as “to achieve the purpose for, and the intention behind, the directives of the President.”

“It is committed to materially contribute to the satisfactory resolution of the various issues for all the stakeholders,” he said.

He said the continuity of the water sector public-private partnership “depends on strong communication channels and handholding engagement so that the basic access to water and wastewater services will not be jeopardized, which includes fully addressing and accomplishing the urgent call for new water and sewerage infrastructure projects.”

Despite the clarification, share prices of listed companies concerned continued to weaken: Manila Water by four percent to P7.44 apiece (60.4% down from P18.80 last Dec. 3); Metro Pacific Investments Corp. (which owns more than half of Maynilad) by 4.12% to P3.26% (25.7% down from P4.39 last Dec. 3); and DMCI Holdings, Inc. (which owns a fourth of Maynilad) by 1.39% to P6.38 each (1.8% down from P6.50 last Dec. 3).

Metro Pacific is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group. — Victor V. Saulon

More major infrastructure projects near final approval

THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY (NEDA) Investment Coordination Committee-Cabinet Committee (ICC-CabCom) approved projects on Friday with a total cost of P626.11 billion, officials announced in a press conference after the meeting.

In a statement yesterday, the Department of Finance (DoF) said the projects approved during the meeting were the:

• unsolicited operate-add-transfer (OAT) proposal for the Davao International Airport;

• unsolicited OAT proposal for Laguindingan Airport;

• Bataan-Cavite interlink bridge;

• Metro Rail Transit Line 4 project (MRT 4);

• EDSA Greenways project;

• Maritime Safety Enhancement program;

• Bataan-Cavite Interlink Bridge (BCIB) project

• fourth bridge of the Cebu-Mactan Bridge and Coastal Road Construction project;

• Davao City Coastal Bypass Road, including the Bucana Bridge project;

• Capas-Botolan Road Project;

• Panay-Guimaras-Negros Island Bridges project;

• change in scope, cost and supplemental loan of the the Davao City Bypass Construction Project;

• as well as implementation extension and increase in cost of the Samar-Pacific Coastal Road Project-Loan Validity.

With this development, these projects are a step away from final approval by the NEDA Board, which is chaired by President Rodrigo R. Duterte.

In a press conference following the NEDA ICC-CabCom meeting, Bases and Conversion Development Authority President and Chief Executive Officer Vivencio B. Dizon said the MRT 4 project and the proposed EDSA greenways will be financed by the Asian Development Bank (ADB).

Mr. Dizon said the Bucana bridge project will be “another huge and iconic bridge” and will be funded through a grant from China. “In fact, when this is done, this will be the longest bridge in the country by far,” he said.

A project that will be financed by China through official development assistance is the Panay-Guimaras Negros island bridge.

Meanwhile, Mr. Dizon said the approved Capas-Botolan Road project is not part of the infrastructure flagship list but is still considered a major project.

“Since the NEDA approved the new list, we’ve already approved a total of 14 projects, including those that were approved today, so you can see that we’re really accelerating the approvals in order for the implementing agencies to already begin within 6-8 months projects on the ground, and we say begin, heavy equipment on the ground. That’s the goal. We’re happy with the progress but we want to accelerate it further.” he said.

Public Works and Highways Secretary Mark A. Villar said: “We fast-track all these projects before the end of the year so that next year, we can focus purely on the detail engineering and procurement of these big-ticket project.”

“So with all of these projects, they are good to go and we can expect implementation will start sooner than later,” Mr. Villar said.

The government has overhauled its flagship project list, increasing the number to 100 projects from 75 originally. Projects deemed not feasible were dropped while those that are deemed more feasible and have higher impact on people’s quality of life were kept. The new list also includes more projects funded through public-private partnership. — Beatrice M. Laforga

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