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Gov’t wants more laws repealed for business

By Victor V. Saulon
Sub-Editor
THE TRADE DEPARTMENT as well as other state agencies and offices have identified a host of laws either for repeal or amendment in their bid to further ease the burden on small businesses and to improve public services.
“The laws recommended for repeal today will be submitted to the Presidential Legislative Liaison Office, the main bridge of the Executive branch to the legislature,” Rowel S. Barba, undersecretary at the Department of Trade and Industry (DTI), said in an interview on Wednesday, explaining that “[t]he laws are no longer relevant today…”
The recommendation was made during the 4th Repeal Day, an exercise aimed at streamlining the business process, held at the Philippine International Convention Center in Pasay City.
“I think from day one, it’s now about 5,000,” Mr. Barba said, when asked for the total number of department orders and circulars that had been repealed.
“The Repeal Day today is the first time that we were able to recommend the repeal of laws.”
The laws recommended for repeal include Republic Act No. 7394 or The Consumer Act of the Philippines, as identified by the Food and Drug Administration which wants to overhaul and update definitions and product jurisdictions of state offices.
From the Department of Trade and Industry, the outdated laws are:

• RA 3952 or the Bulk Sales Law, which has been made obsolete by technological developments;

• Commerce Administrative Order No. 3 Series of 1993 or the Rules and Regulations Governing the Licensing and Bonding of Stock or Bond, Merchandise, Money or Exchange Ship and Real Estate Brokers, which has been made obsolete as well by technological developments;

• RA 247 or the Bonded Warehouse Act, which has been made obsolete by government measures to ensure food sufficiency and stable prices;

• Commonwealth Act 138 or an Act to Give Native Products and Domestic Entities the Preference in the Purchase of Articles for the Government; and

• The Professional Regulation Commission (PRC) recommended the repeal of Executive Order 565 and 565-A to allow the agency to elevate policy directions directly to Malacañang without having to get prior endorsement from the Department of Labor and Employment.

Other offices like the Department of Health (DoH), Department of Justice, Department of Foreign Affairs (DFA), Department of Public Works and Highways (DPWH), DTI, as well as the National Economic and Development Authority (NEDA) have identified 25 other laws that they recommended for amendment.
The DFA recommended amendment of the Philippine Foreign Service Act of 1991 and of the Philippine Passport Act of 1996 to better serve the public.
One of the laws recommended by NEDA for amendment is the Build-Operate-Transfer Law to streamline and consolidate all other legal issuances related to public-private partnerships.
The DPWH wants an amendment to RA 10752, An Act Facilitating the Acquisition of Right-of-Way Site or Location for National Government Infrastructure Projects, in order to better enable implementing agencies to entice property owners to opt for negotiated sale.
The Social Security System (SSS) recommended the amendment of RA 1161, An Act Further Strengthening the SSS, to update the agency’s investment capabilities. The SSS also proposed an unemployment or involuntary separation benefit for workers and their beneficiaries.
The DoH sought amendment of RA 4226, or the Hospital Licensure Law that was enacted in 1965, to cover new types of health facilities that need to be regulated.
The PRC recommended the amendment of the Philippine Nursing Act of 2002 in order to make it easier for review centers to operate.
The Quezon City government is seeking the amendment of Presidential Decree 856, or the Code on Sanitation in the Philippines, to provide a 365-day effectivity of sanitary permits. It also wants to scrap building fire inspection fees since this service is the responsibility of the Bureau of Fire Protection.
Sought for comment, Camiguin Rep. Xavier Jesus D. Romualdo, vice-chairman of the House of Representatives Trade and Industry committee, said the DTI and the Anti-Red Tape Authority (ARTA) that was formed by RA 11032 — or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 — should submit the list and brief the panel “so we can consider their recommendations and take appropriate action.”
Sought for comment, Guillermo M. Luz, who was private sector co-chairman of the now dissolved National Competitiveness Council, said: “Over time as the country eliminates and repeals all the outdated laws, all the irrelevant laws, we simplify the way things are done with government transactions, we simplify a lot of rules, regulations hopefully all the way to the local government level.”
“And when we have that, we will improve on the Ease of Doing Business [ranking] over time.”
Mr. Luz, associate director at Ayala Corp., led the first three Repeal Days.
During the event, the DTI and ARTA also launched the Project Repeal Guidebook as well as the Web portal Philippine Business Regulations Information System that serves as a database of all government-issued rules and regulations.
“One of the biggest problems faced by entrepreneurs is that you don’t even know the regulations you need to comply with. And the agencies only know their own regulations. They don’t know the regulations of each other,” said Roberto Martin Nolan Galang, World Bank senior private sector specialist for microeconomics, trade and investment.
“This one puts it all in one portal, so you can cross-reference regulations: you can now know that you have to go to one and then the other to complete [transactions]. And… it also showcases how many regulations there are.”

Inflation mars ADB’s economic picture of PHL

By Elijah Joseph C. Tubayan
Reporter
THE ASIAN Development Bank (ADB) has retained economic growth estimates for the Philippines that made the country one of Asia’s best performers, but at the same time upped its projected inflation rate this year to one of the region’s fastest.
In the Asian Development Outlook Supplement which ADB released on Wednesday, the regional lender kept its 2018 and 2019 Philippine gross domestic product (GDP) growth forecasts at 6.4% and 6.7%, respectively, from its September report.
“GDP growth is seen accelerating through 2019, supported by robust public and private investment. Growth forecasts are maintained at 6.4% for 2018 and 6.7% for 2019,” ADB said.
If realized, the Philippines’ 2018 growth would be slower than the actual 6.7% recorded in 2017, while 2019’s pace would match that of last year.
The nine months to September saw GDP growth average 6.3%, which the ADB said “remained strong” even as it was slower than the 6.8% clocked in the same period last year.
“Investment was the biggest contributor to growth, followed by household consumption. Investment growth accelerated to 16.7% in the first three quarters from 9.8%. Public and private construction growth quickened, as did investment in durable equipment. Growth in government spending also picked up on higher social service expenditure and on salary hikes for government workers,” the development bank said.
“Drag on GDP growth from net exports deepened, however, as strong domestic demand fueled a surge in imports, especially of capital goods, and as a weaker external environment slowed export growth.”
ADB’s forecasts compare with the World Bank and International Monetary Fund’s 6.5% and 6.7% for 2018 and 2019, respectively, and the 6.7% estimate of the Organization for Economic Cooperation and Development for both years.
ADB’s economic growth prospects for the Philippines are higher than the Southeast Asia average estimates of 5.1% for 2018 and 2019, as well as the six percent and 5.8% in 2018 and 2019, respectively, of “developing Asia”, consisting of 45 of the regional lender’s 67 members.
The Philippines will be the third-fastest this year after Vietnam (6.9%) and China (6.6%), and will be the second-best in 2019, again after Vietnam (6.8%) and ahead of China (6.3%).
ADB stated that infrastructure spending was also strong in Brunei, Indonesia, and Thailand, but noted that Malaysia saw a decline.
INFLATION RISK
At the same time, ADB increased the Philippines’ inflation projection this year to 5.3% — matching the forecast of the Bangko Sentral ng Pilipinas — from five percent initially, and retained the four percent outlook for 2019.
“… the Philippines saw inflation moderate to 6.0% in November from a high of 6.7% in October, for an average of 5.2% in the first 11 months, well up from 2.9% a year earlier. Food prices rose significantly owing to weak agricultural output, and high global oil prices early in the year and new excise taxes contributed to inflation,” ADB said.
“While inflation is expected to ease, the full-year average is still likely to exceed the projection in the Update. The inflation forecast for 2018 is therefore revised up from 5.0% to 5.3%,” it explained.
“The recent buildup in inflationary pressure should moderate next year, with inflation still projected at 4.0%, as in the Update,” it noted, adding: “Tight monetary policy will kick in following a cumulative rate hike of 175 basis points implemented from May to November 2018.”
The ADB cited that: “Oil prices continue to drop as supply outpaces expectations, which reduces pressure on external balances in the region, particularly in India and the Philippines.”
Its inflation forecast for the Philippines is above Southeast Asia’s forecast average of 2.7% in 2018 and 2.8% in 2019, and on the list except for Kazakhstan, whose overall price increases will clock in at 6.3% this year and 6.5% in 2019.
Inflation rate outlook of select Asian economies

Inflation rate outlook of select Asian economies

THE ASIAN Development Bank (ADB) has retained economic growth estimates for the Philippines that made the country one of Asia’s best performers, but at the same time upped its projected inflation rate this year to one of the region’s fastest. Read the full story.
Inflation rate outlook of select Asian economies

VAT refund claim deadline extended; PERA rules clarified

THE BUREAU of Internal Revenue (BIR) has extended anew the deadline for processing value-added tax (VAT) refund claims affected by a 2014 rule that had initially denied many of them.
In Revenue Memorandum Circular 102-2018 published yesterday, the BIR extended the deadline by a little over three months to March 29, 2019, from Dec. 14 previously. This is the second time it extended the deadline. In mid-June, the BIR extended the deadline by about six months from June 30 initially, to Dec. 14. The initial June 30 deadline was set in February last year.
The timetable for processing VAT refund claims is applicable to those affected by RMC No. 54-2014 The BIR under previous leadership implemented a 2014 circular that gave the Commissioner 120 days to decide on VAT refund applications, with inaction after the period “deemed a denial.” Claimants were also given 30 days from denial to elevate the claim to the Court of Tax Appeals.
The BIR implemented this rule retroactively, affecting many taxpayers’ pending claims and the chance to elevate them to the tax court upon expiration of the “120+30”-day period.
The BIR under the Duterte administration then issued Revenue Regulation 1-2017 in January last year to give “fair and adequate relief to taxpayer-claimants,” following a Supreme Court ruling that taxpayers “have every right to pursue their claims in the manner provided by existing regulations at the time it was filed,” and that RMC No. 54-2014 “cannot be applied retroactively as this would prejudice taxpayers whose VAT claims for tax credit or tax refund were filed and pending before June 11, 2014 the date RMC No. 54-2014 took effect.”
Deputy Commissioner Arnel SD. Guballa said the backlog of the applicable VAT refund claims are not that big, noting that the bureau will be able to act on pending claims within the adjusted timetable. “Kakayanin (We will manage),” he said by phone.
Under the tax code, VAT-registered taxpayers can claim a refund of their creditable input tax due or apply for a tax credit certificate for their zero-rated sales within two years from the end of the taxable year when sales were made.
Under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act that took effect in January, the maximum processing time for VAT refund claims is 90 days, shorter than the previous 120 days.
PERA TAX TREATMENT
The BIR on Wednesday has also issued clarifications on the tax treatment of the Personal Equity and Retirement Account (PERA).
The BIR published Revenue Memorandum Circular No. 99-2018 on Wednesday, providing frequently asked questions on administrative guidelines for PERA tax treatment.
It said that employers’ contributions to employees’ PERA are not subject to 35% fringe benefits tax and that contributing employers are not entitled to a five percent tax credit.
Employers are not affected by penalties for early withdrawal by employees from their PERA and neither will early withdrawals result in penalties on the transfer of funds from a PERA administrator to another.
Opening PERA accounts do not require the submission of a tax identification number, according to the circular.
It said that overseas Filipinos are also entitled to tax credit certificates in relation to a PERA.
Among others, the BIR also said that PERA transactions are subject to the 20% stock transactions tax.
The PERA was launched in 2016, seeking to encourage Filipinos to save up for their retirement through voluntary contributions, complementing mandatory contributions in state-run pension funds of the Government Service Insurance System for state employees and the Social Security System for those in the private sector. — E. J. C. Tubayan

Infrastructure spending speeds up in October

DISBURSEMENTS on national government infrastructure and other capital outlays accelerated in October, largely due to road works, health, and school facilities, the Department of Budget and Management (DBM) reported on Wednesday.
In the national government disbursement performance report, the DBM said that infrastructure spending and other capital outlays surged 83.4% to P94.4 billion in October from P51.5 billion in October 2017.
It also grew by 44.8% from P65.2 billion in September.
In a press briefing, Budget Secretary Benjamin E. Diokno attributed the state spending surge to rehabilitation, reconstruction and upgrading of damaged national roads, flood control and drainage improvement projects, construction of bypass or diversion roads, and road improvement or widening projects under the Department of Public Works and Highways (DPWH).
He also cited the procurements for health facilities by Department of Health, repair of school buildings, acquisition of equipment of various state universities and colleges under the Department of Education, as well as local infrastructure projects in the Autonomous Region in Muslim Mindanao.
This brought January-October infrastructure spending and other capital outlays to P665.1 billion, up 50.3% from P442.7 billion in the same period last year.
This is equivalent to 23.78% of the overall P2.80-trillion public funds disbursed in the same 10 months.
“We are glad to report that government spending has continued its strong outturn in the month of October, driven by our huge investments on social services and ‘Build Build Build’ [infrastructure development program],” said Mr. Diokno.
“There is no underspending, as critics falsely claim, and this is validated by the numbers. We’ll have a strong finish in 2018,” he added.
“Looking ahead, the public sector will continue to buoy the Philippine economy. Faster and more targeted spending will translate to wider roads and better mass transport systems, more accessible education and health services, and overall better standards of living for our people.”
Moreover, Mr. Diokno said that the DBM has released 96.5%, or P3.633-trillion of the P3.767-trillion budget for 2017, which is P4 billion bigger than the allotment release report last week. — Elijah Joseph C. Tubayan

Sabin Aboitiz to take helm at AEV in 2020

By Arra B. Francia, Reporter
ABOITIZ Equity Ventures, Inc. (AEV) President and Chief Executive Officer Erramon I. Aboitiz will step down from his post in January 2020, to be replaced by his brother and incumbent chief operating officer Sabin M. Aboitiz.
In a disclosure to the stock exchange on Wednesday, the conglomerate said the older Aboitiz will retire on Jan. 1, 2020. He has held the position since 2009, prior to which he served as the company’s chief operating officer.
Sabin Aboitiz is currently the president of AEV’s infrastructure unit, AEV Infra Capital, Inc. and president and CEO of Pilmico Foods Corp., AEV’s flour milling unit.
“A significant factor in our Group’s success over the past 100 years has been one of seamless succession and transition to the next generation of leaders, ensuring the continuity as well as the evolution of our culture, our policies, and how we do business,” Erramon Aboitiz said in a statement.
AEV also announced that Vice Chairman Enrique M. Aboitiz will now take on the role of chairman, following the death of Jon Ramon M. Aboitiz last November.
Meanwhile, AEV Director Mikel A. Aboitiz will assume the post of vice chairman, effective immediately.
The company also appointed Ana Maria A. Delgado as director to fill the remaining term of the late chairman. The 38-year-old executive is currently a senior vice-president, center head of consumer finance, and chief customer experience officer of Union Bank of the Philippines.
Ms. Delgado is part of the fifth generation of the Aboitiz family, most of whom are also being groomed to take on key leadership positions in AEV in the future.
Included in the company’s reorganization program is the appointment of Ricardo F. Lacson as the company’s data privacy officer effective on Feb. 1, 2019. Mr. Lacson is currently a vice- president for strategy at AEV, and was previously the vice-president for administration and customer services at the Visayas Electric Company.
The Aboitiz group of companies was founded in Cebu in the late 1800s as an abaca trading and general merchandise business. It has since diversified its core businesses to power generation, distribution and retail electricity supply, financial services, food manufacturing, real estate, infrastructure, and portfolio investments.
AEV’s subsidiaries include Aboitiz Power Corp., Union Bank, Pilmico, Aboitiz Land, Inc. and Aboitiz InfraCapital.
AEV saw its attributable profit rise by 28% to P7.23 billion in the third quarter of 2018, as revenues jumped by 30% to P51.88 billion.
This pushed AEV’s nine-month net income attributable to the parent to P17.32 billion, nine percent higher than the P15.90 billion it posted in the same period a year ago. This followed a 21% increase in revenues to P135.25 billion.
Shares in AEV gained 4.46% or P2.30 to close at P53.90 each at the stock exchange on Wednesday.

Preparatory work on Makati City subway begins

By Denise A. Valdez, Reporter
THE Makati City government and the consortium led by Philippine Infradev Holdings, Inc. (formerly IRC Properties, Inc.) broke ground on Wednesday the $3.7-billion Makati City Subway Project which aims to build an intracity railway system in the business district.
Makati Mayor Mar-Len Abigail S. Binay and Philippine Infradev President and Chief Executive Officer Antonio L. Tiu led the drilling program in front of the Makati City Hall, which is eyed as a subway stop for the 10-kilometer line.
At the same time, the Makati City government and the consortium formed by Philippine Infradev and Chinese firms Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Holdings Ltd. and China Harbour Engineering Company Ltd. signed on Wednesday a memorandum of understanding (MoU), signalling the beginning of the preparatory works for the project.
“Right now, we have a tentative route already. But the actual stations will still have to be finalized with the preparatory works to be done. So they have to do the soil testing, they have to check the feasibility of placing the different locations,” Makati City government spokesperson Michael Arthur R. Camiña told reporters after the event.
Philippine Infradev’s Mr. Tiu said the proposed alignment would begin at Ayala Avenue and would end near Ospital ng Makati. He estimated the travel time would be around 15 minutes from the two points.
The entire railway is slated for completion in 2025. Once completed, the subway will accommodate up to 700,000 passengers a day.
“The Makati Subway is a major infrastructure undertaking aimed at decongesting the traffic. So far, the country needs it and IRC is very capable of undertaking this,” Mr. Tiu said.
Mr. Camiña said the 30-year concession agreement for the Makati Subway is expected to be signed next year, once the preparatory works end.
“We’re looking siguro by next year na yun [We’re looking that will come by next year]. Because the MoU, we have to do feasibility studies and soil testing and the likes, and that will take several months. So baka mid-year next year or end of the year na ma-finalize yung contract [So maybe by mid next year or end of the year will that be finalized],” he said.
Philippine Infradev, then as IRC Properties, submitted in June the unsolicited proposal for the Makati City Subway Project. It told the stock exchange in October it has been approved by the Makati government after a Swiss challenge.
The terms of the project include possible connections to other transport systems such as the Metro Rail Transit Line 3, the Pasig River ferry and the proposed Metro Manila Mega Subway.

2GO-Nenaco merger gets SEC go signal

THE Securities and Exchange Commission (SEC) has approved 2GO Group, Inc.’s merger with parent company Negros Navigation Co., Inc. (Nenaco), the listed logistics company told the stock exchange on Wednesday.
2GO, which will be the surviving entity, said its merger with Nenaco will take effect by Jan. 1, 2019.
By Jan. 1, 2GO said all Nenaco’s assets and shares will be transferred to the company, and the estimated public float would be 11.91%.
“The resulting issued and outstanding capital stock of 2GO after the merger is 2,462,146,316,” 2GO said.
2GO announced the share swap deal in April, where all Nenaco shares are being converted into 2GO shares for a swap ratio of 0.26 share in 2GO per one Nenaco share.
The logistics company said the merger is meant to “simplify the corporate structure and to develop efficiencies and economies within the Group.”
“This is in line with 2GO’s efforts to streamline operations, reduce costs, and increase shareholder value,” it added.
In the first three quarters of the year, 2GO recorded a loss of P710.110 million versus an attributable net income of P71.285 million in the same period last year. It was dragged by a 7.15% decline in revenues for the nine-month period to P15.466 billion. — Denise A. Valdez

E-mail attacks seen as top cyber threat in 2019

CYBERSECURITY PROVIDER Palo Alto Networks sees e-mail attacks as the top threat in 2019, with attackers becoming more diverse and sophisticated in their methods.
In a press briefing on Dec. 6 at the Makati Shangri-La, officials said the top threat businesses should watch out for next year, most especially in the Philippines, are attacks done via e-mails, where cybercriminals can steal company and personal information.
“A lot of the attacks are coming from emails, so when you open it, it’s a phishing site. Most of it starts in the business e-mail… You click on that site, you know it’s valid site, but it’s a phishing site. That phishing site will harness your valid credentials, and the attacker now will use the valid credentials to steal your money or steal your private information,” Oscar Visaya, country manager of Palo Alto, told BusinessWorld.
Because of this, Mr. Visaya said companies should always be critical of emails they receive and be able to assess their current cybersecurity state.
“I think number one is to take a look at their current state. Where are we right now… One of the things we are advising our customers, both public and private sector is visibility. So, you cannot control what you cannot see,” he said.
“So, that’s why we have to be aware of those emails coming to us… Dapat lang mataas ‘yung curiosity (curiosity should be high) when it comes to receiving these emails,” he noted.
The firm also noted that as operations become more connected with each other, threat risks are also becoming more and more inevitable. Kevin O’Leary, field chief security officer at Asia Pacific of Palo Alto, used the manufacturing sector as an example during his speech. He said operations in this industry are moving into the application of information technology in the process of exchange or movement of goods. Each element in the chain is a risk and the more complex the chain becomes, the higher the risk of attacks.
Still, Palo Alto said firms are already moving to formalize their data protection frameworks. It sees that next year will see many countries take their first steps towards protecting the people’s data. In the Philippines, the Data Privacy Act of 2012 is already being implemented to protect all kinds of information and covers both natural and juridical persons involved in the processing of personal information.
The use of cloud services is also seen to thrive next year, which could also give rise to new threats. Mr. O’Leary noted that local businesses have increasingly been using cloud technology in their operations.
“In some ways, you could look at that and say there’s been a little bit of a lag in terms of how businesses have taken up cloud services within the Philippines and yes, in some ways, that is a bad thing, but there is positive side to that, which is the learning that you can get from all the mistakes that other people made,” he said.
Lastly, critical infrastructure, which now includes the banking and financial services, telecommunications and the media, is becoming more digital and automated, making them easy targets for cybercriminals, most especially the energy, water, and public transport sectors that usually rely on legacy and unpatchable systems.
“We try to move not just us as a company but, I think, all of security technology start to move away from being seen as point solutions…and seen as a something as a little bit more holistic and something that really impacts everybody’s life on a daily basis from a consumer side, but also in terms of how business is ran and managed,” Mr. O’Leary said.
“It’s not just technology. It’s not just part of IT department of all the businesses. It’s actually a really important part of our business these days… So much is done through smartphones. People, their ability to touch IT is much greater now than it was before and we need to be conscious about how we manage our security into the future,” he said.
Meanwhile, Mr. Visaya said the move towards digital transformation in the country should always be accompanied by the transformation of security.
“As I mentioned earlier, I know that the government is undergoing digital transformation. A lot of companies on many different sectors are undergoing digital transformation, but they have to realize that they should also transform their security… The benefits of digital transformation will be at risk if they are not protected,” Mr. Visaya said.
Palo Alto is a California-based cybersecurity company that has been operating in the country for five years. It offers products like advanced firewalls and cloud-based offerings and they cater to all types of companies. — V.M.P. Galang

ABS-CBN sound stages finally open in Bulacan

ABS-CBN Corp. on Wednesday inaugurated two sound stages in San Jose del Monte City, Bulacan, which the multimedia giant says will help reduce production costs of its television shows and movies.
In a statement, ABS-CBN said the new production hub will enable them to produce content at par with international quality standards without having to shoot in remote locations.
The Lopez-led company saw its production costs grow 8% in the nine-month period to P9.56 billion, which contributed to a 5% increase in its direct costs and expenses to P28.190 billion.
ABS-CBN said last year the sound stages are expected to reduce production expenses by 10% to 15%.
Aside from projected savings, ABS-CBN President and Chief Executive Officer Carlo L. Katigbak said the new facility will help the company expand its audience as it brings its content to the international stage.
“The sound stages represent the beginning of a plan to establish a production hub that include sound stages, backlots, production and post production facilities and offices that will allow both ABS-CBN and Philippine-based productions to match production facilities found elsewhere in the world,” the statement said.
ABS-CBN has a 7.7-hectare land in Bulacan intended to house its new production facilities. The two sound stages that were inaugurated are 1,500-square meter in size with a breezeway, dressing rooms and support rooms for technical facility.
The listed media firm saw its net attributable income fall 32% to P1.627 billion in the first three quarters, affected by its flat consolidated revenue at P29.49 billion and a 5% growth in expenses. — Denise A. Valdez

Demand for term deposits surges

By Melissa Luz T. Lopez, Senior Reporter
DEMAND FOR term deposits soared this week, with players crowding the one-week tenor ahead of the central bank’s rate-setting meeting.
Bids for short-term deposits rose to P85.065 billion on Wednesday, coming from P69.643 billion the previous week to settle well above the P70 billion the Bangko Sentral ng Pilipinas (BSP) put up for auction.
Banks scrambled to put their extra cash in shorter tenors, with all three maturities going oversubscribed.
The seven-day term saw tenders reach P52.171 billion yesterday, surging from the P36.406 billion in offers received last week to fill the P40 billion on the auction block.
Despite this, yields still climbed to average 5.1135%, up by about 10 basis points (bp) from the 5.0168% fetched the previous week. Banks wanted higher returns ranging from 4.9-5.2498%, hovering close to the ceiling set by the central bank.
The 14-day deposits also saw bids improve this week to P21.184 billion, maximizing the BSP’s P20-billion offer and picking up from the P20.057 billion received during the previous exercise. The average yield likewise rose to 5.1649% from 5.1271% the week prior.
On the other hand, demand for the 28-day tenor softened to P11.71 billion, lower than the P13.18 billion fetched last week but still filled the P10 billion which the BSP wanted to sell. Yields climbed further to average 5.1952%, a new high compared to 5.1433% the previous week.
Since June 2016, the term deposit facility (TDF) has been the central bank’s primary tool to capture excess liquidity. Through the weekly auctions, the BSP can bring market and interbank rates closer to its desired range by setting the standard for short-term instruments by setting the accepted margins for these placements.
TDF rates have been rising since mid-November after the BSP raised benchmark yields by another 25 bps. This marked the fifth straight hike from the BSP this year, which brought benchmark rates within the 4.25-5.25% range.
Sought for comment, BSP Deputy Governor Diwa C. Guinigundo said market players may be taking positions ahead of the Monetary Board’s rate-setting meeting today.
“Markets believe inflation trend is downhill so the banks are more willing to place their money with the BSP,” Mr. Guinigundo said via text message.
The BSP will hold their eighth and last policy meeting today, with market players expecting a pause after a cumulative 175-bp rate increase since May. This comes after headline inflation dropped to six percent in November, confirming views that prices have peaked and will ease back to the 2-4% target in 2019.
Mr. Guinigundo previously noted that banks may also be holding on to more cash to service bigger client payments and withdrawals, as demand usually surges during the holidays.

The taste of Christmas: Memories of lola’s kitchen


MEMORIES OF Christmas past are indelibly stamped on the holiday menu of Guevarra’s, chef Rolando Laudico’s buffet restaurant.
The menu will include the following as mains: Lengua ala Pobre with Mushrooms, Lechon kawali in taro sinigang sauce, Menudo pastel pie, Chicken ala king, Shrimp in coconut brandy sauce, Steamed fish mayonesa, Orange chicken galantina, Roast turkey with chestnut and chorizo stuffing
Ngohiong fried chicken, and Pata hamonado. Head spinning from all the choices, I ended up having to tuck into the turkey and the lengua (ox tongue), with a side of adobo lechon paella (vinegar stewed roast pig paella). The dishes I chose were perfectly comforting, and the lechon paella gave it a zesty touch.
The restaurant is one of several ventures by chef-endorser Mr. Laudico which include a Tribu Babaylan in Quezon City (where he sits as consultant) and OK Café in Pasig. Mr. Laudico has also done television stints, as a host and judge, for example, on Food Challenge Seasons one and two in the Asian Food Channel.
Mr. Laudico said that the dishes for the Christmas buffet were “Not exactly family recipes, but recipes that I loved eating during Christmas when I was a kid.”
He points out the site of Guevarra’s, a rambling house built in the 1920s in San Juan. “[It’s] like going back to your lola’s house.”
“We really wanted a whole experience.”
A DIFFICULT YEAR
It has not been an easy year for Mr. Laudico: a patron who had been hospitalized earlier this year was told that their family had been infected with cholera. It created quite a stir on Facebook, the family recalling that one of the establishments they ate in was Guevarra’s. The health department of San Juan closed the restaurant for five days as a precaution. “They checked us, and they’ve been checking us constantly,” said the chef.
“In fact, the first time they checked us, they said our place was highly satisfactory.” Another health check last month gave the restaurant a score of 95/100. Third-party agencies and the national Department of Health also stepped in. “They didn’t find anything,” said Mr. Laudico.
“The fact that they had themselves (the complainant) tested almost two weeks after they had eaten here… you know?” said Mr. Laudico with some frustration. “But for them to pin it on us — that cholera [scare — it’s really unfair, and baseless.”
Stepping beyond the troubles earlier this year, Mr. Laudico is setting his sights on the near future, with the launch of a line of sausages, done in partnership with Aguila Gourmet Meats, set to be released either later this month or early next year. — J.L. Garcia

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