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Villar inhibits from water concession review

JUSTICE UNDERSECRETARY Emmeline Aglipay-Villar has inhibited herself from the review of the concession agreements between the government and private firms Maynilad Water Services, Inc. and Manila Water Co., Inc.

“To eliminate any cloud of doubt on the impartiality of the Department’s review and renegotiation of the water concession agreements with the Metropolitan Waterworks and Sewerage System (MWSS) that my affinity to the owners of PrimeWater Infrastructure Corp. has brought, I am inhibiting from any involvement in the Department’s review and renegotiation of the said agreement,” Ms. Villar said in a memorandum addressed to Justice Secretary Menardo I. Guevarra.

Ms. Villar is married to Public Works and Highways Secretary Mark A. Villar, whose family owns PrimeWater.

Mr. Guevarra, meanwhile, said he asked Ms. Villar not to participate in the review.

“I requested Usec. Villar to inhibit herself na lang to dispel suspicions that the DoJ (Department of Justice) contract review may not be completely objective due to an alleged possible conflict of interest,” he told reporters in a mobile phone message.

“It’s unfair to Usec. Villar who has always acted with professionality, but the circumstances call for it. One thing I can say, any good lawyer will come to the same findings and conclusion,” he added.

Mr. Guevarra on Thursday said he is leading the review and that there was no conflict of interest in the review of the contracts of the two water utilities.

The Justice chief also said that it was only coincidental that the review fell under Ms. Villar’s supervision.

“The fact that Undersecretary Emmeline Villar is part of the DoJ review is totally irrelevant,” he said.

Mr. Guevarra said last week said that the department’s review has found a dozen onerous provisions in the contracts signed in February 1997, including the non-interference of the government in rate-setting and the government’s liability should the corporations suffer losses.

The extension of the contracts until 2037 from the original 2022 expiration was also found to be irregular, Mr. Guevarra said.

MWSS, the regulator of the two firms, has revoked the contract extension.

Mr. Guevarra on Monday said a team is being formed to draft the revised concession agreement, which is targeted for completion before the year ends.

LETTERS
Meanwhile, President Rodrigo R. Duterte is still reviewing the response of Maynilad and Manila Water regarding the alleged onerous provisions of the concession agreement and their request for discussions, according to Presidential Spokesperson Salvador S. Panelo

“As we have previously stated, Maynilad and Manila Water each wrote a formal letter making an offer to talk about the issue and renegotiate the onerous provisions of the contracts. There has been no acceptance by the President of their offer nor has he declined it,” Mr. Panelo said on Friday.

He added that the President “will not renege from his constitutional duty of enforcing the law (and) neither will he be swayed nor enticed into accepting a compromise”.

“All legal options are open to him. It must be remembered that the President is a lawyer and a public prosecutor for many years hence knowledgeable on the provisions of the anti-graft law,” he said, “Stated differently, the agreements violate every prohibited act of the law.”

The separate letters by the two firms, both dated Dec. 10, were released to the media by Malacañang Palace on Friday.

“Maynilad wishes to assure His Excellency of its willingness to cooperate with MWSS relative to HE’s Directive to have certain provisions of the Concession Agreement reviewed and amended,” reads the company’s letter.

It was signed by Chairman of the Board Manuel V. Pangilinan, and President and Chief Executive Officer Ramoncito S. Fernandez.

Manila Water, in its letter signed by Chairman Fernando Zobel de Ayala, made a similar assurance as well as puts in writing that “We will not collect the Php 7.39b arbitral award…”

Representatives of both concessionaires said during a hearing at the House of Representatives earlier this week that they will not pursue the award granted to them by a Singapore-based arbitration court and not increase rates in January.

In separate cases, the Permanent Arbitration Court has ordered the government to indemnify the companies for losses with amounts of P7.39 billion for Manila Water and P3.4 billion for Maynilad. — Vann Marlo M. Villegas and Genshen L. Espedido

Palace says Duterte’s SALN available at Ombudsman’s office

PRESIDENT RODRIGO R. Duterte’s Statement of Assets, Liabilities, and Net Worth (SALN) is available to the public at the Office of the Ombudsman,
Malacañang said on Friday, countering a report of its “alleged failure” to provide a copy to the media.

“The Office of the President is not the repository of the SALNs of the President. Per Memorandum Circular No. 3 (series of 2015) of the Civil Service Commission (CSC), the instrumentality which has the authority to carry out the provisions of Republic Act No. 6713, it is the Office of the Ombudsman which is the repository of the original SALNs of the President, the Vice President and the Constitutional Officials,” Presidential Spokesperson Salvador S. Panelo said.

In a report entitled “Duterte’s secret SALN: The lie of his FOI (Freedom of Information)” published Dec. 4, the Philippine Center for Investigative Journalism (PCIJ) said the Office of the President and the Office of the Ombudsman failed to provide a copy of the President’s 2018 SALN, noting that this is the “first time in the last thirty years a President has not released his or her SALN.”

Mr. Panelo said the President submitted on time a declaration under oath of his assets, liabilities, and net worth, adding that “neither instrument requires the President to personally and directly furnish a copy thereof to the media or to whomever wants it”.

“Accordingly, PCIJ may want to direct its request to the Office of the Ombudsman. The Office of the President, can not dictate upon the Office of the Ombudsman the course of action it wishes to undertake relative to such request given that the latter is a separate and independent institution that we have no control of,” he said.

All government officials and employees are required to submit an annual SALN to the Office of the Ombudsman by April 30.

“We take strong exception to the thoughts bordering to innuendo of a few that the failures of the PCIJ in getting a copy of the President’s SALN can be ascribed to the President’s policy on transparency. Such accusation is baseless if not malicious,” Mr. Panelo said.– Genshen L. Espedido

Zarate files resolution to investigate SEA Games funds use

A LEGISLATOR has called for an investigation on the controversies involving the use of funds for the hosting of the 30th Southeast Asian (SEA) Games that was concluded Dec. 11.

Bayan Muna Rep. Carlos Isagani T. Zarate led the filing of House Resolution 602 last Thursday, which seeks to probe how the allocated budget was spent for the sporting event.

The resolution says the probe aims to shed light on the most controversial issues, including reports of several unfinished sports venues and the P50 million stadium cauldron.

“It is the primordial duty of the Congress, in the exercise of its legislative and oversight functions, to ensure that the people’s money was utilized for the benefit of the Filipino people and not wasted due to government inefficiency and corruption” part of the resolution said.

The resolution is pending before the House of Representatives committee on good government and public accountability. — Genshen L. Espedido

Burnt manufacturing plant not an ecozone firm, PEZA clarifies

THE PHILIPPINE Economic Zone Authority (PEZA) clarified on Friday that the manufacturing plant that burned down early December is not a PEZA-registered firm nor is it located within the Cavite Economic Zone (CEZ).

In a statement, PEZA said Betafoam Corp. is located in Paliparan I in Dasmarinas, Cavite and not within CEZ, which is located in the town of Rosario and neigboring General Trias City.

PEZA Director General Charito B. Plaza said their agency ensures safety in its ecozones through various measures and protocols.

“Through the affiliation as military reserve units of PEZA employees and workers in the ecozones, PEZAns and industry workers are prepared and able to respond to man-made and natural disasters and help in nation building,” she said.

Betafoam Corp. has been manufacturing polyethylene (PE) foam and insulation products since 2003.

It occupies a 10,000-square meter area for its factory and warehouse, and has 200 employees.

The fire incident in the morning of Dec. 6, which reached the fifth alarm, injured one worker.

The cause is still being investigated by the Bureau of Fire Protection Dasmarinas. — Vincent Mariel P. Galang

PAO asks Duterte to veto removal of its forensics lab budget

THE PUBLIC Attorney’s Office (PAO) has asked President Rodrigo R. Duterte to veto a provision in the 2020 budget that does not provide funding and limits other allocations from being used for its forensics laboratory.

In a letter dated Dec. 11, PAO cited that the P19.5 million allotted for the purchase of forensic laboratory equipment was deleted from the 2020 National Expenditure Program (NEP).

It added that there is a provision inserted in the General Appropriations bill that restricts PAO from using its maintenance and other operating expenses budget “to the effect that no funds may be used for the meetings and other maintenance and operating expenses of the PAO Forensic Laboratory.”

“These modifications in the President’s budget or the NEP have only one objective — to paralyze the PAO Forensic Laboratory and jeopardize its operations, depriving them the opportunity to assist the clients of the PAO,” the letter read.

It noted that it “cannot help but wonder” if the said modifications was “an act averse to the PAO’s and Administration’s efforts” in handling cases related to deaths allegedly due to Dengvaxia.

PAO said the deletion of certain allocations is unconstitutional because the Philippines Constitution mandates free access to courts and adequate free legal assistance.

“The changes in the budget would lead to its clients’ failure to present forensic evidence in their case,” it said.

“Securing the services of private practitioners to challenge the NBI’s/PNP’s/CHR’s (National Bureau of Investigation/Philippine National Police/Commission on Human Rights) forensic findings would be to practically deny PAO clients of such opportunity — because they are, in the first place, indigents,” PAO said.

“The inevitable consequence thereof is the denial of adequate legal assistance to PAO clients by reason of their poverty,” it added.

It would also violate the proprietary rights of the office’s eight complement plantilla personnel.

PAO said the Forensic Laboratory Division was created by the Department of Budget and Management (DBM) and is a “small unit” under the Office of the Chief Public Attorney.

“We humbly reiterate that the 2018 GAA (General Appropriations Act) gave the DBM the power to approve minor changes in the organizational structure and staffing pattern of agencies, and create positions up to a division chief and equivalent level under the Executive branch — the legal basis for the change in the structure of the Office of the Chief Public Attorney,” it said.

The letter was signed by PAO Chief Persida V. Rueda-Acosta and seven other officers. — Vann Marlo M. Villegas

PHL gov’t to engage UN in drug war through documentary

THE GOVERNMENT will engage the international community, particularly the United Nations (UN), on the Duterte administration’s anti-illegal drug campaign by showcasing a “balanced” documentary entitled Gramo, according to Presidential Communications Operations Office (PCOO) Secretary Jose Ruperto Martin M. Andanar.

The government-produced 50-minute film, which will have a version dubbed in English, presents measures being taken against illegal drugs and how those behind the trade are being made accountable.

“Ito’y isusumite natin sa ating Permanent Mission sa United Nations sa Geneva at sa New York at sila na ang bahala magbigay sa UN (We will submit this to our Permanent Mission to the United Nations in Geneva and New York, and it’s up to them to give it to the UN),” Mr. Andanar said on Thursday.

A screening is also planned for the diplomatic community in the country and other international audience.

The PCOO will also be partnering with other government agencies and private institutions in the transport and media sector to broadcast the film.

“It is very important to inform the public where we are taking this (drug war) for the next three years” Mr. Andanar said.

The UN has been critical of the Duterte administration’s anti-drug campaign, particularly on the issue of extrajudicial killings allegedly carried out by the police.

Last July, the UN Human Rights Council announced that it will conduct an investigation on the alleged crimes linked to the drug war.

President Rodrigo R. Duterte has repeatedly lashed at what he considers the meddling of international agencies in his drug war policy. — Genshen L. Espedido

Andanar denounces US Senate committee’s ‘impudent’ resolution

PRESIDENTIAL COMMUNICATIONS Secretary Jose Ruperto Martin M. Andanar denounced a US Senate committee resolution urging the Philippine governmentto release Sen. Leila M. de Lima and drop the charges against Rappler Executive Editor Maria A. Ressa, calling such a move as “impudent.”

“We find the passage of U.S. Senate Resolution 142 by the U.S. Senate's Foreign Relations Committee highly impudent,” Mr. Andanar said on Friday.

“To try to strong-arm the government into freeing Senator De Lima and dropping charges against Maria Ressa is infringing on our country's legal process and system, to which they have no say whatsoever,” he said.

The secretary pointed out that the cases against the two are undergoing the country’s independent judicial process.

Mr. Andanar said they see a “pattern” wherein Ms. De Lima and Ms. Ressa appear to be lobbying their case before the media and the US legislature “because they know that here, there is no merit to their claims.”

“We continue our good relations with the United States and our independent foreign policy. But, the government sees no point to give attention to an ostensible move by people who have little knowledge of the real matter at hand,” Mr. Andanar said.

In the resolution, the foreign relations committee said Ms. De Lima, a staunch critic of the administration’s war on drugs and has been detained since February 2017 over drug charges, was detained “solely on account of her political views and the legitimate excercise of her freedom of expression.”

The committee also said that the cases against Ms. Ressa, who is also critical of the administration, for cyber-libel and tax evasion charges is part of a pattern of “weaponizing rule of law to repress independent media.”

The Senate committee also asked President Donald Trump to sanction enforcers and Philippine officials liable for killings on the war on drugs and the arrest of Ms. De Lima, including revoking their US visas and freezing their assets in the US.– Vann Marlo M. Villegas

DBCC creates sub-committee on SDGs

THE DEVELOPMENT Budget Coordination Committee (DBCC) has approved the creation of a sub-committee on Sustainable Development Goals (SDGs) which is expected to help authorities align plans and projects for these targets.

National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon said the establishment of an SDG sub-committee under the DBCC serves as a “strong move” for the government in aligning its development programs for resource allocation.

“The budgetary process presents a good mechanism to support integration of the SDGs. Strong policy integration and alignment of resource allocation with the country priorities on the SDGs will help create an enabling environment for sustainable development,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted as saying in a statement on Friday.

The sub-committee will be co-chaired by two undersecretaries from the NEDA and the Department of Budget and Management (DBM), along with members from other concerned government agencies.

The sub-committee will give their advice on policy integration and resource allocation, SDG-related reports such as the Voluntary National Review, the monitoring of programs for the SDGs and other stakeholder engagements.

“We are committed to the SDGs because it is the key to ensure that current and future generations of Filipinos achieve their AmBisyon (ambition),” Mr. Pernia said.

The SDGs serve as a blueprint for countries around the world to achieve 17 goals set to address poverty, inequality, climate change, environmental degradation, peace and justice, among others. — B.M. Laforga

Fitch Solutions trims 2020 PHL sugar production forecast

SUGAR PRODUCTION in the Philippines for crop year 2019/2020 is projected to reach 2.1 million tons amid higher domestic consumption and as local prices remain higher than global levels, Fitch Solutions Macro Research said in its industry trend analysis.

“While unfavorable weather in recent months will lower yields and overall production in the short term, gradually decreasing sugar area due to prolonged labor shortages and rising competition from cheaper imported sugar will weigh on the industry in the longer term,” it said in the report published Dec. 12.

This projection is 4% lower than its previous production forecast of 2.2 million tons.

Target raw sugar production for this crop year is at 2.096 million metric tons (MT), down 5% year-on-year, due to factors such as weather conditions, and changes in hectarage of sugarcane planted, as well as if farmers were to shift planting other crops.

Fitch Solutions also projects that consumption will continue to increase as the domestic industrial market, or food manufacturers, continue to drive demand as they switch to sugar from high-fructose corn syrup (HFCS) due to tax imposed to drink sweeteners, which is higher for sugar-alternatives.

“The Philippines is still close to self-sufficient in sugar, with almost all of domestic output being consumed locally. According to the country’s Sugar Regulatory Administration (SRA), around 95% of total production is consumed by domestic industries, in particular industrial users such as beverage manufacturers,” the think tank noted.

The increase in tax is part of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which took effect January 2018. This imposed a P12 per liter tax in beverages that use HFCS, while a P6 per liter tax was imposed to beverages that use local sugar.

It also sees that exportation of Philippine sugar to the United States — which makes up about 5% of sugar production or about 140,000 tons — will continue despite local prices being well above the cost in the global market.

Fitch Solutions said local sugar prices will “remain uncompetitive by global standards” despite its projection of slightly higher global prices in 2020 at $13.5 per pound.

“The rise in global sugar prices is therefore not going to make the Philippines any more or less price-competitive. With sugar imports from Thailand rising, however, it is likely that cheaper imports will cap domestic prices to an extent,” it said.

SRA reported that as of the third week of November, the millgate price of sugar increased 1.83% to P1,516 per 50-kilo bag.

In the same period, sugar production was 216,996 MT, down from 305,850 MT the previous year. This is equivalent to 4.339 million 50-kilo bags, compared to 6.117 million 50-kilo bags a year earlier. This is due to factors such as prolonged El Nino, and farmers pushing back their milling activities. — Vincent Mariel P. Galang

PCC approves Mikuni Toyo’s acquisition of Hitachi Terminals

THE PHILIPPINE Competition Commission (PCC) has approved the full acquisition of Hitachi Terminals Mechatronics Philippines Corp. by Japanese firm Mikuni Toyo Co., Ltd. as the transaction is not seen to lessen competition in the domestic market.

“In a Commission Decision issued December 10, the competition authority affirmed the Mergers and Acquisitions Office’s findings that the acquisition is unlikely to result in substantial lessening of competition,” PCC said in a statement on Friday.

It was confirmed that the two firms produce different products for different purposes. Moreover, both are only manufacturing and assembling their products in their local manufacturing sites and are then exported to other countries.

“Parties operate merely as manufacturers and assemblers of Printed Circuit Boards for automotive remote engine starters (Mikuni Toyo), and ATM modules (Hitachi Terminals), which are all exported to their foreign parent entities and third parties outside of the Philippines,” PCC said in the decision.

Mikuni Toyo was established in 1989 in Japan and has a production facility in Light Industry and Science Park III in Sto. Tomas, Batangas through its affiliate Mikuni Electronics Corp., which was established in 2002. The company produces and assembles electronic boards used for air-conditioners, elevators, remote engine starters, and security systems.

Meanwhile, Hitachi Terminals is one of the businesses of Japan-based Hitachi Group in the Philippines through Hitachi Asia Ltd.- Philippine Branch, which was incorporated in 1996. It has a manufacturing plant in Subic Bay Freeport Zone, where it manufactures and assembles products for finance related machines such as card readers and banknote or coin cassettes used for Automated Teller Machines. All products are being exported to Japan.

The acquisition is in line with Mikuni Toyo’s diversification of its portfolio and expansion of its market in the manufacturing and assembly sector, specifically in Subic, which could also modernize the facilities and enhance production of Hitachi Terminals.

The PCC has already approved 188 mergers and acquisitions, while 201 are still subject for review. All in all, these have total value of P3.28 trillion. — Vincent Mariel P. Galang

Makati subway to link up with Megaworld’s Skytrain

INFRACORP

THE proposed Makati City subway will soon be connected to the planned monorail being built from the Guadalupe Metro Rail Transit (MRT Line 3) station to Megaworld Corp.’s township in Taguig City.

The subsidiary of Philippine Infradev Holdings, Inc. that is building the Makati subway on Friday said it is forming a joint venture with Megaworld for a common station with the Skytrain being developed by another Andrew L. Tan-led company.

In a disclosure to the stock exchange, Tiu-led Philippine Infradev said its wholly-owned subsidiary, Makati City Subway Inc. (MCSI), has received the term sheet for the joint venture from Megaworld.

The common station that the joint venture will build will link the $3.5-billion (approximately P177.14-billion) Makati City subway and the P3.5-billion Skytrain project of Tan-led Infracorp Development, Inc.

Infracorp is the infrastructure arm of Mr. Tan’s Alliance Global Group, Inc., the parent company of Megaworld.

Aside from linking the two rail projects to be built by the private sector, the common station will also have connections to the Guadalupe MRT station and the Pasig River ferry system.

“Under the Term Sheet, MCSI and Megaworld have 60 days to finalize definitive agreements covering the proposed joint venture, including, but not limited to, the Joint Venture Agreement and Articles of Incorporation. During the same period, MCSI will not enter into any agreement or any transaction pertaining to the land that will be used as the common station,” Philippine Infradev said in the statement.

MCSI’s subway project is a 10-kilometer underground railway system that will traverse Makati City’s central business district.

Infracorp’s Skytrain project, on the other hand, is a two-kilometer monorail that will link MRT-3’s Guadalupe station to Megaworld’s Uptown Bonifacio.

In the same disclosure, Philippine Infradev said it has signed a construction agreement with China Construction First Group Corp. Ltd. (CCFG) for the Makati City Subway Project.

The cost of construction is still to be determined, but duration is set at 42 months with six months grace period.

“Under the Construction Agreement, CCFG shall be responsible for the construction including materials, manpower, equipment and other requirements to complete the project,” the disclosure said.

Philippine Infradev also said it entered a memorandum of agreement with the University of Makati to offer a P20-million annual scholarship program to students that wish to study in China.

The program offers students the chance to enter Tongji University’s College of Civil Engineering and return to the Philippines with a guaranteed employment in MCSI for management or technical positions.

The company said Tongji University is known for its engineering, business and architecture programs.

Shares in Philippine Infradev on Friday posted a 0.01 point or 0.79% uptick to P1.27 apiece, while shares in Megaworld increased 0.05 points or 1.18% to P4.30 each. — Denise A. Valdez

ICTSI takes over container terminal in Brazil

Razon-led International Container Terminal Services, Inc. (ICTSI) has taken over the operations of a container terminal in Brazil.

The listed firm told the stock exchange Friday it has completed all regulatory approvals for its acquisition of Libra Terminal Rio S.A. (Libra Rio), the concessionaire for Terminal de Conteineres 1 (T1Rio) at the Port of Rio de Janeiro, Brazil.

“All conditions precedent and required regulatory approvals have been obtained and the transfer of the facilities to ICTSI management has been set on the 12th of December 2019,” it said in a disclosure on Friday.

The company’s wholly-owned subsidiary ICTSI Americas B.V. signed in July the share purchase agreement with Boreal Empreendimentos e Participacoes S.A. to buy 86,126,660 shares in Libra Rio amounting to 740 million Brazilian Reais (approximately P10.1 billion).

“The transaction will expand ICTSI’s footprint in the Brazilian container terminal market and is expected to generate value-accretive returns for ICTSI’s shareholders,” the company said.

ICTSI currently operates Suape Container Terminal at the Port of Suape in Brazil.

It is also present in other areas in Latin America through terminals at the Port of Guayaquil in Ecuador; Port of La Plata in Buenos Aires, Argentina; Port of Manzanillo and Port of Tuxpan in Mexico; Port of Buenaventura in Colombia and Puerto Cortes in Honduras.

Meanwhile, the company said on Friday it has received its second partial repayment from the Sudanese Ministry of Finance & Economic Planning in relation to its aborted takeover of the South Port Container Terminal at the Port of Sudan.

“ICTSI would like to inform the Exchange that it had earlier received from the Sudanese Government a second partial repayment of the Upfront Fee in the amount of AED110,190,000,” it said. The repayment is equivalent to approximately P1.52 billion.

The Sudanese government was supposed to turn over the South Port Container Terminal to ICTSI in April but was delayed due to the country’s ongoing political instability.

The company was paid 195.2 million euros (approximately P11.04 billion) in August for the first partial repayment.

“We continue productive discussions with the Ministry of Finance and Economic Planning of the Republic of the Sudan for the refund of the remaining balance of the Upfront Fee under the terms of the Refund Bond,” the company said Friday.

ICTSI reported an attributable net income of $184.9 million in the first nine months of the year, up 29% from last year, on the back of higher volumes and tempered expenses.

Shares in the firm at the stock exchange gained 4.60 points or 3.79% to P126 each on Friday. — Denise A. Valdez

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