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Local shares join global rout on trade worries

THE LOCAL BOURSE took a dive on Monday as trade tension between the United States and China pummeled market sentiment across the globe.
The benchmark Philippine Stock Exchange index (PSEi) fell 1.51% or 112.85 points to close at 7,348.21 yesterday, marking its fourth day of losses, while the broader all-shares index dropped 1.21% or 54.74 points to 4,441.14.
“Equities markets were down all Asia including here in the PSE as worries that a rise in tensions between Washington and Beijing could ruin the chances of a trade deal,” Eagle Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Monday.
Canada’s arrest of Chinese tech giant Huawei’s chief financial officer last week continued to worry investors, despite a 90-day truce promised by US President Donald J. Trump and Chinese President Xi Jinping last month.
The PSEi took cues from Wall Street’s negative performance last Friday, when the Dow Jones Industrial Average lost 2.24% or 558.72 points to 24,388.95; the S&P 500 index retreated 2.33% or 62.87 points to 2,633.08; and the Nasdaq Composite index plunged 3.05% or 219.01 points to 6,969.25.
Most Asian indices also fell, with Japan’s Nikkei 225 closing 2.12% lower, the Shanghai Composite index shedding 0.82%, while MSCI’s broadest index of Asia-Pacific shares ex-Japan losing 1.4%.
Mr. Mangun, however, noted that from a technical standpoint, the PSEi’s decline was a “healthy pullback” given its rally in the last three weeks.
All sectoral indices moved to negative territory, led by holding firms which incurred a 2.11% loss or 153.81 points to 7,135.97. Financials shed 1.58% or 28.30 points to 1,766.99; property slumped 1.25% or 45.86 points to 3,600.40; industrials tumbled 1.12% or 122.19 points to 10,719.33; mining and oil slipped 1.11% or 93.63 points to 8,317.60; while services declined 0.32% or 4.62 points to 1,407.67.
Some 2.26 billion shares worth P14.84 billion switched hands, compared to last Fiday’s 2.32 billion issues worth P6.29 billion. Without block transaction of Melco Resorts and Entertainment (Philippines) Corp., turnover would have been P5.1 billion. The company’s majority shareholder concluded its voluntary tender offer last week, with the shares tendered crossed from the PSE yesterday.
Foreign investors turned buyers, with net purchases at P3.96 billion, compared to Friday’s P261.78 million in net sales. The large figure, however, could also be attributed to Melco’s block transaction.
Stocks that declined were more than double those that advanced, 134 to 59, while 43 others ended flat.
“Looks like we’ll be short of catalysts for the remainder of the year, with the only possible exception being year-end window dressing,” Papa Securities Corp. Head of Online Trading Arbee B. Lu said in a separate e-mail.
“Considering how US markets are heavily in the red though, we aren’t expecting a significant boost from funds abroad.” — Arra B. Francia

Peso weakens amid renewed trade tensions

PESO slightly weakened against the US dollar on Monday. — BW FILE PHOTO

THE PESO depreciated against the dollar on Monday amid risk-off sentiment and renewed concerns over China-US trade relations.
The local unit ended Monday’s session at P52.80 versus the greenback, nine centavos weaker than the P52.71-per-dollar finish last Friday.
The peso traded weaker the whole day, opening the session at P52.78 per dollar. It went to as low as P52.825 intraday, while its best showing stood at P52.72 against the US currency.
Trading volume thinned to $603.12 million from the $973.95 million that switched hands the previous day.
A trader said in an e-mail the peso slightly weakened on safe haven demand after the arrest of Huawei’s chief financial officer (CFO).
“The arrest sparked fears of renewed US-China tensions despite the recently-agreed 90-day ceasefire on new tariffs,” the trader said in an e-mail.
Huawei CFO Meng Wanzhou was arrested in Vancouver on Dec. 1 at the request of US authorities. The US accused Ms. Weng of defrauding multinational banks about Huawei’s control of a company that was operating in Iran, in violation of American sanctions.
This sparked concerns over the trade relations between the world’s two largest economies that recently agreed on a 90-day trade ceasefire.
“It is the general sentiment amid a potential escalation of tensions between the US and China because of the recent arrest of Huawei’s CFO,” Ruben Carlo O. Asuncion, UnionBank of the Philippines chief economist, said in a text message.
“Although domestic matters are seemingly stable, it is the external environment driving the sentiment about foreign exchange.”
For today, Mr. Asuncion as well as the trader expect the peso to trade between P52.70 and P52.90. — K.A.N. Vidal

Localized peace deals get boost from gov’t

PRESIDENT Rodrigo R. Duterte has signed an order creating a national task force that will focus on localized peace processes to end the 50-year old communist armed conflict in the country.
Executive Order No. 70, signed on Dec. 4, institutionalizes the “whole-of-nation” approach in attaining inclusive and sustainable peace and directs the adoption of a national peace framework.
The whole-of-nation approach brings together government agencies, local government units, and civil society to address “the root causes of insurgencies, internal disturbances and tensions, and other armed conflicts and threats by prioritizing and harmonizing the delivery of basic services and social development packages by the government.”
The Task Force will be composed of the President as chair and the National Security Adviser as vice-chair. Most of the departments will be represented along with two private sector representatives who will be appointed by the President upon the group’s recommendation.
The Task Force is expected to formulate the policies for the peace strategy and implement these in coordination with relevant national government agencies, local government units (LGUs), civil society groups, and other stakeholders.
Funding requirements, based on the EO, will be charged against the existing appropriations of member-agencies of the Task Force and such other appropriate funding sources as the Department of Budget and Management (DBM) may identify, and when necessary, the Contingent Fund, subject to relevant laws, rules and regulations.
Mr. Duterte cancelled the peace talks last year with the communist umbrella group National Democratic Front of the Philippines (NDFP), the Communist Party of the Philippines (CPP), and its armed wing, the New People’s Army (NPA), citing their refusal to first sign a ceasefire agreement.
Various LGUs have since expressed support for localized peace talks and have been pursuing the surrender of NPA members, who are the ones fighting on the ground.
Armed Forces of the Philippines Spokesperson Brig. Gen. Edgard A. Arevalo said this new directive practically cuts out the NDFP in the peace process.
“Kailangan pa ba ang (Do we still need the) NDFP? Hindi na sila kailangan d‘yan (Not anymore),” Mr. Arevalo said in a phone interview yesterday.
He added that with the new strategy, the government is aiming to end the communist insurgency by 2019.
Also on Monday, the Palace released a copy of EO No. 69 that grants financial support to the citizen armed force geographical unit (CAFGU) active auxiliary service.
The CAFGU, which was created through the EO No. 264 (S. 1987), complements and supports the regular forces of the military in dealing with internal and external security threats.
Mr. Arevalo explained that CAFGU members have only been receiving a “subsistence allowance” of P160 per day.
Meanwhile, the Department of National Defense said it has been supporting localized peace talks, recognizing that local officials know and understand better the people and the situation in their respective areas.
“In fact, we encourage localized peace talks… (the) local chief executives mas alam nila kasi ‘yung (they know better their) constituents,” said DND Undersecretary for Civil, Veterans, and Retiree Affairs Reynaldo B. Mapagu during the launching of the Task Force Balik-Loob Christmas Campaign on Monday, Dec. 10.
Last year, various government agencies, including the DND, partnered for the implementation of the Enhanced Comprehensive Local Integration Program (E-CLIP) in pursuant to Administrative Order No. 10 signed by the President.
With the help of E-CLIP, which is led by the provincial governors, Mr. Mapagu said localized peace talks resulted to the surrender of NPA members.
Data from Task Force Balik-Loob indicates a total of 8,344 surrenderees, mostly coming from the areas under the military’s Eastern Mindanao Command.
CPP leader Jose Maria C. Sison, who has been exiled in the Netherlands, and NDF National Executive Committee member Luis G. Jalandoni were sought for comment on the new order, but have yet to respond as of press time. — Arjay L. Balinbin and Vince Angelo C. Ferreras

House declines Diokno request to postpone insertions hearing

THE HOUSE of Representatives maintained its decision to hold the “Question Hour” on Tuesday and declined Budget Secretary Benjamin E. Diokno’s postponement request.
“We stand firm on out intention to hold the Question Hour as scheduled and look forward on your appearance,” Majority Leader Rolando G. Andaya, Jr. of the 1st district of Camarines Sur said in a letter to Mr. Diokno on Monday.
The budget chief, in a letter dated Dec. 7, asked the chamber to “reschedule at a later date” to allow the Department of Budget and Management (DBM) to prepare a response to queries of the legislators.
“The additional time requested will enable the DBM to gather the necessary information and undertake coordination with the other agencies concerned,” Mr. Diokno said.
The Budget secretary was summoned upon the adoption of House Resolution No. 23, introduced by House Minority Leader Danilo E. Suarez of the 3rd district of Quezon, which sought to clarify the insertions in the National Expenditure Program.
Moreover, Mr. Andaya, in his privilege speech on Monday, countered DBM’s claim that a reenacted budget will result in economic slowdown.
“Let me remind everyone, that anyone who believes that a reenacted budget will result into economic slowdown, specifically in the first and second quarter as routinely announced by our Secretary of Budget… that’s a lot of hot air coming from his rear end. That is not true. Any person who believes that does not know his history,” he said.
Mr. Andaya recalled that in 2007, the country experienced a significant economic growth despite the budget bill’s late enactment on March 22.
“First quarter, we had 6.9% growth and the second quarter, a mind-boggling 8.3% growth for the second quarter,” Mr. Andaya said.
With Congress scheduled to adjourn on Dec. 12, the likelihood of a reenacted budget increases, considering the Senate is still in the process of tackling the General Appropriations Bill.
Meanwhile, despite its support for the chamber’s move to summon Mr. Diokno, Malacañang said the House, likewise, has to make some explanations.
“Well, you know the position of the Palace is that, that’s a different branch. Now they have to do their job. And I understand from what I read on the papers today that Budget Secretary Diokno has been invited to explain. So we leave it at that. We’ll see,” Presidential Spokesperson Salvador S. Panelo said in a briefing on Monday.
When asked about President Rodrigo R. Duterte’s position, Mr. Panelo said “his position is—I was talking to you when I say—he said that there will be some explanation on the part of Speaker (Gloria Macapagal-)Arroyo and others. So let’s hear them.” — Charmaine A. Tadalan

Congress to hold joint session on martial law extension

CONGRESS is set to hold a joint session on Wednesday, Dec. 12, to deliberate on the request of President Rodrigo R. Duterte to again extend martial law in Mindanao for another year.
“Joint session, Wednesday, nine o’clock,” Senate President Vicente C. Sotto III confirmed to reporters on Monday.
Senators were briefed yesterday by security officials on the situation in Mindanao and the factors that would justify a third extension of martial law, which was first declared on May 23, 2017 as the Marawi siege broke out.
“I think they were able to present some very compelling reasons for us to really consider the extension so we’ll discuss it within ourselves and then hopefully, let’s see how the debate goes as far as the Wednesday joint session is concerned,” Mr. Sotto told reporters after the hearing.
Meanwhile, Senate President Pro Tempore Ralph G. Recto said he is of the position that martial law could only be extended until six months given that the 17th Congress ends in June 2019.
“Our term of office is only until June. And this Congress extends martial law beyond this term… What is appealing is that they’re saying that they would be able wipe out the Abu Sayyaf with the one year extension… That is an appealing proposition to extend martial law. But then why not six months?” he said.
“If at all, maybe six months, at least (that’s) my position. And let the next Congress determine if they need six more months,” he added.
Senate Majority Leader Juan Miguel F. Zubiri also released to reporters Mr. Duterte’s letter to Congress, dated Dec. 6, asking the legislative branch for the martial law extension.
“A further extension of the implementation of martial law and the suspension of the privilege of the writ of habeas corpus in Mindanao will enable the AFP (Armed Forces of the Philippines), the PNP (Philippine National Police), and all other law enforcement agencies to finally put an end to the ongoing rebellion in Mindanao and continue to prevent the same from escalating in other parts of the country,” Mr. Duterte said in his letter to Congress.
Under the 1987 Constitution, the President can declare martial law in case of “invasion or rebellion, when the public safety requires it.” An extension of martial law may be approved by Congress, in a joint vote of at least majority of its members, “if the invasion or rebellion shall persist and public safety requires it.”
After the initial martial law declaration that was effective for 60 days as provided under the law, Congress granted a first extension until end-Dec. 2017, then a second one until end-2018. — Camille A. Aguinaldo

Nationwide round-up

Abaca production improves in first 9 months


ABACA fiber production increased by 4.5% to 49,803 metric tons (MT) in the first nine months of 2018 from the 47,644 MT in the same period last year. According to data released by the Philippine Fiber Development Authority (PhilFIDA) on Monday, Bicol emerged as the top producing region with 15,584 MT from Jan. to Sept. this year, although this is a 13.2% drop from the 17,962 MT in the first three quarters of 2017. The second top producing region was Davao at 9,921 MT, up by 18.5% from 8,371.5 MT. Third was Eastern Visayas at 6,189 MT, up 4.8% from 5,906 MT. “We are very pleased to report that production of the Philippine Abaca Fiber Industry continue its uphill climb and now at 4.5% or equivalent to 2,158.2 metric tons or 2.1582 (million) kilos or additional 95.92 40-footer container vans compared in 2017,” Kennedy T. Costales, Executive Director of PhilFIDA, said on a Facebook post. “Though it is still a far cry to where we want to be (25,000 metric tons), it is a fact that you cannot plant abaca today and harvest tomorrow. It takes an abaca plant to mature between 18 months to 24 months depending on the variety,” Mr. Costales added. — Reicelene Joy N. Ignacio

Arroyo daughter appointed to National Museum

PRESIDENT Rodrigo R. Duterte has appointed Evangelina Lourdes “Luli” Arroyo-Bernas, daughter House Speaker Gloria M. Arroyo, as chairperson of the Board of Trustees of the National Museum. The President also appointed Bases Conversion and Development Authority (BCDA) Director Retired Col. Yusop A. Jimlani as Presidential Adviser on Local Extremist Groups Concerns, with the rank of Undersecretary. Another appointee, Ramon Ike V. Señeres, brother of the late 2016 presidential candidate Roy V. Señeres, Sr., is now a member of the Board of Directors of the Philippine Charity Sweepstakes Office. The President signed the appointment papers of the said officials last Dec. 6. — Arjay L. Balinbin

Pichay shrugs off disqualification case

REPRESENTATIVE Prospero A. Pichay, Jr. of the 1st District of Surigao del Sur yesterday expressed confidence that the disqualification case filed against him before the Commission on Elections (Comelec) will be dismissed. “I’m very confident that will be dismissed,” he said in a phone interview with BusinessWorld Monday. Mr. Pichay, who is running for reelection in the 2019 midterm elections, noted that the same case was filed against him in 2016, but the Comelec allowed him to run for office. Last month, a Petition to Deny Due Course and to Cancel Certificate of Candidacy (CoC) was filed by Mary Elizabeth O. Ty, citing a 2011 Ombudsman decision declaring Mr. Pichay guilty of grave misconduct for unlawful use of state funds. The Ombudsman decision imposed a penalty of dismissal from his position as Local Water Utilities Administration (LWUA) Board of Trustees chairman and “forfeiture of all benefits, except leave credits, and disqualification to hold any public office.” — Gillian M. Cortez

Gasoline up, diesel continues drop

AFTER eight straight weeks of decreases, the price of gasoline will rise by P0.40 per liter (/L) this week, oil companies advised on Monday. The prices of diesel and kerosene, meanwhile, will be on their ninth consecutive week of decline. Diesel will be cheaper by P0.10/L, while kerosene by P0.45/L. For most of the companies, the price adjustments will take place today at 6:00 a.m. “These reflect movements in the international oil market,” Petron Corp. said in its advisory. — Victor V. Saulon

Trillanes posts bail for libel cases at Pasay court

SENATOR Antonio F. Trillanes IV again secured temporary liberty upon posting bail of P96,000 for four counts of libel pending in a Davao City court, which has issued arrest warrants against him. Mr. Trillanes made the bail payment at the Pasay City regional trial court (RTC) Branch 118, which lifted the warrants of arrest. “The Warrant of Arrest dated 07 December 2018 issued against the accused is hereby lifted and set aside,” Judge Rowena Nieves A. Tan ordered. Ms. Tan also ordered the senator to “coordinate with and/or report to (Davao) RTC Branch 54” within 30 days from the receipt of the order to follow up the date of his arraignment. The libel complaints were filed by former Davao City vice mayor Paolo Z. Duterte and brother-in-law Manases Carpio in September 2018 after the senator linked them to corruption and extortion involving ride-hailing services. In the same Davao Court, the prosecution’s motion to issue a hold-departure order against Mr. Trillanes is currently pending and he is ordered to file his comment/opposition within five days from Dec. 7. — Vann Marlo M. Villegas

Abu Sayyaf member in Samal raid convicted

A TAGUIG City court has convicted an Abu Sayyaf member for murder and homicide over the group’s attack on Pearl Farm Beach Resort in Samal in 2001. In the ruling dated Dec. 3, Judge Marivic C. Vitor of the Taguig City Regional Trial Court (RTC) Branch 266 found Hasim Alibasa Radjuli guilty of the murder of Jimmy Culam, a security guard of the resort, and sentenced him to reclusion perpetua or 20 to 40 years of imprisonment. Radjuli has also been found guilty of homicide for killing resort employee Rolando Jara, with a penalty of eight to 14 years, eight months, and one day in prison. The convict is also ordered to pay the family of the victims designated amounts for damages. The verdict emphasized the testimony of a fellow Abu Sayaff member, Julashrey Abtani, who was acquitted of piracy for lack of proof. — Vann Marlo M. Villegas

Balangiga bells’ long journey home: Manila stopover today

THE three Balangiga Bells, taken as a war booty by American soldiers from the Eastern Samar town with the same name in 1901, are scheduled to land at the Villamor Airbase in Pasay City today before finally returning home on Dec. 14. President Rodrigo R. Duterte will attend the Saturday homecoming ceremony, but will skip the turnover in Pasay as earlier announced, according to Presidential Spokesperson Salvador S. Panelo. In a press briefing on Monday, US Embassy in Manila Spokesperson Molly Koscina said the return of the bells was “the right thing to do” and that “is really in line with American Values.” Two of the bells had been part of a memorial for fallen US veterans located in Wyoming, USA. The third bell was in a US military base in South Korea. “They will have replicas of the original bells,” Ms. Koscina said. “There have been a number of presidents that have worked on the return of the Balangiga bells. A number of secretaries of Defense, a number of Philippine and US ambassadors. It’s been decades worth of work and decades of US veterans protesting to the return of the bells,” she said. — Gillian M. Cortez and Arjay L. Balinbin

Davao City businesses with more than 10 workers now required to get drug test clearance for permit

COMPANIES in Davao City with more than 10 workers are now required to have at least 10% of their employees undergo illegal drug testing after Mayor Sara Z. Duterte-Carpio recently signed the implementing rules and regulations of an ordinance passed five years ago. The requirement applies to both new business permit applications and renewals. Under the ordinance, a random testing process will be implemented involving 10% of the company’s workforce, including contractors and service-oriented employees in establishments like shopping malls. The Philippine Drug Enforcement Agency is tasked to do the testing and issue the corresponding clearance within 10 days. The City Anti-Drug Abuse Council, meanwhile, is responsible for the information campaign and monitoring the implementation of the ordinance. — Carmelito Q. Francisco

BOL campaign begins


A banner opposing the ratification of the Bangsamoro Organic Law (BOL) hangs over the Delta Bridge approaching Cotabato City, right above a welcome sign for guests and participants to the campaign kick-off event inside the Autonomous Region in Muslim Mindanao (ARMM) government compound within the city. Inside the ARMM compound, various groups held banners calling for a “yes” vote. Cotabato City, under the SOCCSKSARGEN Region, is one of the areas proposed for inclusion in the Bangsamoro ARMM (BARMM) and will be among the plebiscite sites.

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