DAVAO CITY — Dusit International is preparing for the formal opening ceremony of the dusitD2 Davao Hotel before the end of the month, but operations have already started on March 31.
“Our niche (are) the affluent,” the company said in a statement, with room rates starting at P5,500 a night.
“We are most excited to be in this preview period, and stand ready to provide a modern experience that showcases the best of Dusit. We warmly extend an invitation to those who will be traveling to Davao to stay with us, and be one of the very first to feel the difference,” Christopher Wichlan, hotel manager, is quoted in the statement.
Dusit said the 120-room hotel, a joint venture with Torre Lorenzo Development Corp., is “poised to redefine standards of upscale hotel living in the city.”
“All the fine details — the patterns, the fabrics, the scent, the lighting — are curated for the guest’s best experience. One can see and feel these accents across the different rooms and facilities — marking a truly authentic encounter that’s both delightfully Dusit, and uniquely Davao,” architect Manny Samson of Emsae Design, which designed the property, was also quoted in the statement.
DusitD2 is adjacent to the joint venture’s high-end condominium project and about 60 kilometers from their Lubi Plantation resort in Compostela Valley. — Carmelito Q. Francisco
CORPORATE GOVERNANCE in the local insurance industry improved in 2018, the Insurance Commission (IC) said.
Based on the 2018 ASEAN Corporate Governance Scorecard (ACGS) Report for Insurance, the IC said the local insurance sector recorded an average score of 41.34 points in 2018, up 1.61 points from the previous assessment.
For the 2018 report, the IC assessed 116 insurance companies and mutual benefit associations (MBA) comprised of 30 life insurers, 56 non-life insurance firms, 14 MBAs and 16 micro-MBAs.
Out of the insurance companies surveyed, Pru Life Insurance Corp. of UK (Pru Life UK) obtained the highest score of 105.19, followed by Insular Life Assurance Co. Ltd. with 104.53 points.
The life insurance sector continued to perform better compared with other sectors in 2018, logging an average of 56.98 points. Meanwhile, MBA and non-life sectors scored 40.28 points and 33.57 points, respectively.
Pru Life UK, Insular Life, FWD Life Insurance Co., Sun Life of Canada (Philippines), Inc. and Philippine American Life & General Insurance Co. were the top five life insurance firms with governance scores ranging between 86.92 and 105.19 points.
Meanwhile, the top five non-life insurers in terms of corporate governance last year include Pacific Cross Insurance Inc., National Reinsurance Corp. of the Philippines, MAA General Assurance Philippines, Inc., BPI/MS Insurance Corp., and Pacific Union Insurance Co., fetching scores from 59.29 to 82.07 points.
The top four MBA firms in 2018, garnering scores between 71.60 and 80.60 points, were CARD Mutual Benefit Association, Praxis Fides Mutual Benefit Association, Kasagana-Ka MBAI, and Knights of Columbus Fraternal Association.
“This shows that there is a continuous improvement in the performance of the life insurance, non-life insurance, and MBA sectors since the adoption of the ACGS in 2015,” Insurance Commissioner Dennis B. Funa said in the statement, adding that the insurance industry showed an average increase of 2.28 points for four years.
In the 2018 assessment, the insurance industry performed well in the area of equitable treatment of shareholders out of the five core principles of corporate governance, scoring 8.76 points out of the maximum points of 15.
“The 2018 report noted that, while other areas need to be improved, disclosure of corporate governance-related documents should be given special attention including Notice of Annual Stockholders/General Meeting, Minutes of Annual Stockholders/General Meeting, and Annual Report with section on suitability,” the statement from the IC read.
However, Mr. Funa noted that the industry’s score is still “considered as low” in comparison with the banking sector.
“This should be taken as an opportunity for them to review their current governance practices for further improvement, including the utilization of technology, and a challenge to ensure that their corporate governance practices are at par with regional standards.”
The ACGS, a tool used to evaluate corporate governance practices, was developed based on international benchmarks such as the Organization for Economic Cooperation and Development, Principles of Corporate Governance, the International Corporate Governance Network Governance Principles, as well as industry-leading practices from ASEAN and the world.
Circular No. 14-2013 was issued in 2013 to mandate all insurance firms and MBAs to adopt the ACGS to develop their company website and post their responses to the ACGS questionnaire with supporting documents.
This was part of the IC’s move to raise the standard of corporate governance in the insurance industry.
Sought for comment, Pru Life UK President Antonio G. De Rosas said the company was able to receive the highest ACGS score among local insurers two times in a row.
“It is our culture as part of the Prudential Plc group to place utmost importance to corporate governance, compliance and risk management,” Mr. De Rosas said in a text message on Sunday. “As a life insurance company, our only commodity is our promise basked up by our reputation to deliver to customers financial security especially when they need it most.” — Karl Angelo N. Vidal
WHEN Honda Cars Philippines sent us local motoring media on a ride-and-drive of its 5th generation diesel-powered 7-seater CR-V from Manila to Bataan province early 2018, we got to appreciate for a day the power, stability, and drive technologies of the top-of-the-line diesel CR-V, the SX Diesel 9AT AWD powered by the 1.6-liter i-DTEC turbo engine on both well-paved highways and on dirt roads.
During that drive, we got to feel the oomph of its 300Nm of torque; the stability of the McPherson strut front suspension and the new E-type multi-link rear suspension; the larger tire size for better grip on all surfaces; the 208mm ground clearance; the enhanced Real Time All Wheel Drive system to better manage all surfaces (the system transferring 10% more torque to the rear wheels when needed); the safety and driver-assistive feature Honda Sensing with the Adaptive Cruise Control (ACC) and Low Speed Follow (LSF), and; the standard safety features such as the Vehicle Stability Assist (VSA), Hill Start Assist (HSA), Agile Handling Assist (AHA) and Anti-Lock Braking System (ABS) with Electronic Brake Distribution (EBD) to help prevent over and under steering on high-speed corners.
This gentle beast of a diesel workhorse was so feature-laden, I just had to have a return engagement to explore the other amenities and functions of this compact crossover.
That chance I got when last month, I drove a four-person video crew in a Passion Red Pearl CR-V SX Diesel to the mountainous regions of central and northern Luzon to document a cycling tour.
During this 5-day epic tour, the four of us spent at least eight hours inside the CR-V every day. Naturally, we arrived at the following conclusions about our ride and our “mobile home” on the road:
1) The power tailgate, activated by the key fob, is truly useful when your hands are carrying cameras, tripods, drones, lunch and luggage;
2) The fold-down rear seats are perfect when you need to take low-speed, tracking shots of your subjects;
3) The panoramic sunroof is a cameraman’s heaven for over-the-roof shots;
4) All seats are comfy enough to spend the entire day on without complaining about back problems;
5) But the middle seat in the second row could get equal design treatment as the six other seats. Every passenger who got assigned to that middle seat for the day wanted to be relocated the next day;
6) The 300Nm of torque and 120ps of power makes going ahead of the pack a breeze. In no time, we were well ahead of the main group and had enough time to set up the video equipment;
7) Despite the mountain terrain involving long ascents, and the rather “inefficient” style of my driving when we had to alternately zoom ahead of the pack or slow down to a crawl to track the rear, the CR-V SX Diesel consumed no more than 1.5 full tanks of fuel for the entire 1,200-km trip (the CR-V SX Diesel did get an official 23.96 km/liter reading in the 2017 DoE Ecorun);
8) The 208-mm ground clearance and the AWD sure gets useful when crossing shallow rivers;
9) When your passengers need you to open the sunroof, or to connect their Bluetooth devices to the infotainment pronto, it’s great that the driver can easily reach those controls;
10) For a video crew to afford the P2.125-million price tag of the CR-V SX Diesel, they need to work this hard everyday for the next three to five years. The good news is that they’d still get to enjoy their weekend days off.
JAPANESE apparel retailer Uniqlo welcomed the hot summer heat with a week-long interactive exhibit representing its three daily summer essentials line.
The exhibit, which runs until April 13, is located at the second floor of the Uniqlo Manila Global Flagship store in Glorietta 5, Makati City.
It features three rooms designed by Vince Uy and Daryl Chang with designs meant to “walk visitors through various summer experiences that mirror the characteristics of Uniqlo’s core items for the season,” according to a company press release.
The “Instagram-baiting” rooms are “Color in the Air” which features balloons in different color and “alludes to the playful nature of the season and the youthfulness of the Uniqlo U Crew Neck tees”; “Floating Free” which features origami cranes that “mirror the clean lines and smooth characteristics of Uniqlo’s collection of linen items and shorts”; and “A Walk in the Clouds” which features a bathtub filled with clouds meant to “exude the lightness and breathable qualities of Uniqlo’s DRY-EX line.”
“As the first of its kind for the brand, we hope that this exhibit will help visitors discover Uniqlo’s lineup of functional and colorful LifeWear for the summer season.”
The exhibit can be accessed for free but customer who buy P3,500 worth of Uniqlo items in a single-receipt purchase can claim a Uniqlo novelty item upon exit from the exhibit. — ZBC
A LOCAL debt watcher affirmed the top corporate rating of Philippine Savings Bank (PSBank) on the back of continued growth in the lender’s core interest income and strong market position.
In a statement sent to reporters over the weekend, the thrift bank secured a PRS Aaa (corp.) rating from the Philippine Rating Services Corp. (PhilRatings), or the highest corporate credit rating on the firm’s scale.
This means that the lender has a “very strong capacity” to meet is financial obligations within a one-year horizon.
The credit rater took into consideration PSBank’s solid market position, its well-defined and forward-looking strategy, highly-experienced management as well as continued growth in core interest income, attributable to loan portfolio expansion.
PhilRatings added that the savings banking arm of Metropolitan Bank & Trust Co. is a “significant” player in the consumer lending market driven by its car loan portfolio, which is expected to log a “moderated but still positive” growth this year.
PSBank’s consumer lending, accounting for 91.4% of its total loan book as of end-2018, tallied a compound annual growth rate (CAGR) of 14.2% between 2014 and 2018. Broken down, the CAGRs of PSBank’s auto and mortgage loans stood at 18.2% and 9.6%, respectively.
“Despite the significant decline in auto sales resulting from the implementation of the Tax Reform for Acceleration and Inclusion Act, PSBank managed to keep its market share of about 17.0%, which serves as an indication of the bank’s solid franchise in its chosen market,” PhilRatings said.
In a previous interview, PSBank President Jose Vicente L. Alde said the lender expects its consumer loans to “be better than last year’s” on the back of easing inflation and other factors, which will translate to softer loan rates.
PhilRatings added that the bank’s net interest income has been posting double-digit growth from 2015-2017, in line with the expansion of its loan portfolio.
Meanwhile, PSBank’s “solid” market position is seen to be supported by the digitalization of its products, channels and processes, enhancing customer experience and improve operational efficiency.
“[R]ecent product and service offerings have become more technology-based, as the bank prepares for the next generation of bank customers, who are seen to have more choices and be more demanding,” PhilRatings noted.
The debt watcher added that the digitalization push as well as the “solid” industry experience of its management headed by Mr. Alde will strongly support the lender’s competitive position going forward.
PSBank tallied a P2.7-billion net income in 2018, flat from the previous year’s level, even as its lending and deposit-taking businesses continued to expand.
The Ty-led savings lender ended 2018 with 250 branches, 575 automated teller machines and total assets worth P237.7 billion.
Shares in PSBank stood at P58 on Friday, up 70 centavos or 1.22% from the previous close. — K.A.N. Vidal
WASHINGTON — China’s lengthy approval process for genetically modified crops remains a sticking point in talks to end the trade war between China and the United States, according to two sources with knowledge of the talks.
Beijing has taken years to approve new strains of GM crops, which U.S. companies and farmers have complained stalls trade by restricting the sales of new products from companies such as DowDuPont Inc, Bayer AG, and Syngenta AG.
The issue is one of a host of U.S. complaints that the administration of President Donald Trump is demanding China address if it wants to end trade disputes that have cost both countries billions of dollars and slowed the global economy.
Trump on Thursday said the two sides were getting very close to a deal that could be announced in about four weeks, though there were still differences to be bridged.
GM crops and the approval process are still a “big issue” in the discussions, said one of the sources, who spoke on condition of anonymity.
The issue has been a source of tension between the two countries for years. China is the biggest buyer of U.S. soybeans, the bulk of which are genetically modified. If it does not approve new strains, then farmers in the United States cannot plant them because China may reject shipments that include them.
Seed companies cannot fully commercialize sales of new strains without those approvals. The two sides had appeared to make some progress on the issue in January, when China approved a handful of GMO crops for import. They were the first in about 18 months. The move did not address the core U.S. concerns over delays to the process.
A spokeswoman from the Office of the U.S. Trade Representative, who is leading the Washington team in the discussions, did not respond immediately to request for confirmation or comment.
China’s Ministry of Agriculture and Rural Affairs did not immediately respond to faxed questions on Friday, which was a public holiday in China.
It is unclear what differences on the issue remain. The United States wants China to accelerate its approval process and make it more similar to Washington’s.
Beijing allows imports of GMO soybeans and corn for use in animal feed, even though it does not permit planting of them.
China bought about 60 percent of U.S. soy exports, worth about $12 billion, before the ongoing U.S.-China trade war and could reject shipments of unapproved varieties.
Beijing promised to speed up its review of applications during previous trade talks with the United States in 2017. In the past, Beijing has held back approvals of imported GMO products amid concerns about anti-GMO sentiment in China.
The trade deal, should it be agreed, is expected to include a six-year time frame for purchases of more than $1 trillion in U.S. goods, including commodity products. — Reuters
SHARES MAY edge lower in the following days as investors take a break for the upcoming Holy Week.
The bellwether Philippine Stock Exchange index (PSEi) firmed up 0.24% or 19.05 points to close at 7,873.18 last Friday. However, it was down on a weekly basis by 0.6% or 47 points, weighed down by the 2.5% decline in mining and oil and a 1% drop in services.
Turnover slowed by 1.53% to P5.54 billion. Net foreign buying persisted for the week, albeit 21% lower to P573 million.
“Investors may continue to sit on the sidelines as we go into to the holiday season and maybe wait as long as after the election in May. Because of this, we may continue to see the index go lower,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a market report.
Mr. Mangun noted that the PSEi has held its support level at 7,840 in the past two weeks, but has yet to break above its resistance of 8,000.
“The general investors sentiment has gone from “cautious” to “extremely cautious” as investors are probably anticipating an event that would be negative for the market or possibly waiting until the end of an event that could go either way,” he explained, noting that this event could be the upcoming midterm elections.
“The bottom line is local investors are staying away indefinitely and this will cause the market to go lower.”
Meanwhile, online brokerage 2TradeAsia.com highlighted the slower inflation result in March. The Philippine Statistics Authority reported on Friday that headline inflation last month stood at 3.3% — lower than the market consensus of 3.5%.
“For now there’s room to welcome the outcome, as tamer prices will induce consumer and investment spending,” 2TradeAsia.com said, although noting that the impact of El Niño on agriculture and water could still affect inflation moving forward.
2TradeAsia.com also noted that investors may change their portfolio mix in the second quarter.
“Build-up in local political campaign plus expected bond float from some of the market’s large caps might prod changes in portfolio mix, at least over the second-quarter run. Special emphasis could divert part of the liquidity on coupon returns from corporate bond floats, especially for investors that have little appetite for risk,” the online brokerage said.
Investors are also seen to look forward to shareholders’ meetings lined up for the month, most of which will happen after the Holy Week break from April 18 to 19. 2TradeAsia.com said this could drum up excitement on corporate expansions, dividend declarations, and other capital-raising exercises.
Eagle Equities’ Mr. Mangun placed the PSEi’s support level from 7,800 to 7,900, with resistance from 8,000 to 8,140.
Financial markets will be closed on Tuesday for the Araw ng Kagitingan holiday.
EVER thought of franchising a business? Here is how you can determine how you can invest your hard-earned capital in a franchising business without wasting time and effort.
Velle Cacha-Manuel, group marketing manager of Francorp Philippines, said a good franchise is unique, profitable, and systemized.
Franchising, which she defines as a method of practicing and using another’s perfected business concept, should also offer a continuous transfer of knowledge. She said one of the main advantages of franchising is “there is a strong branding and brand recall. You don’t have to do it from scratch.”
Given that the brands open for franchising are already established, a franchisee can be assured of making profit. Of course, there are disadvantages, like having to follow a system consistently in terms of pricing, location, and territorial restrictions. There is also the chance to still fail.
Before signing the franchising contract, a franchisee should consider several factors, while answering questions such as why the need to own a franchise. Most of the time, the answer is wanting another source of income. The next step is to start researching about the brand and to look for features that are of interest to the franchisee.
“Is it a unique brand and concept that you love? Is this a product or service I love and I would want to pay for. You have to be the first and last customer of your brand, of your franchise,” Ms. Manuel said in a seminar during the Franchise Asia Expo 2019 held in Pasay City from March 29 to 31.
The would-be franchisee should also look into his or her understanding of the business, including how it matches existing resources (time, experience, and capital to be invested). A check on the track record of the franchisor is also valuable. A visit to one of the franchise stores of the target business is a must to get more information about it through current franchisees. The franchisee should also assess what makes the brand different from its peers.
Extra attention should be given to the terms and conditions involved in the agreement, which should include the renewal process, the required capital investment and fees (franchise fees, royalties, marketing contribution, and training and support), the purchase of products, territory, and termination.
A knowledge of who made this important document is key to avoiding “scam-ish” deals. Brands that present too-good-to-be-true claims tend to pressure franchisees. They usually have no list of franchisees and outlets, and have a vague company profile.
“Ask who developed the franchise program. The last thing that you really don’t like to happen is Google your franchise agreement since they don’t have an operations manual. If they really can’t tell you if they have an operations manual and no other parties are involved in doing their franchise program then that maybe is a red signal to take a step back,” she said.
When asked about her advice to those who want to venture in this kind of business, she told BusinessWorld after the seminar, “You have to be ready in the submission process when you go into franchising business because that’s really how it will work. It’s really duplicating the success of the brand. You have to be in love with the brand, believe in its purpose, believe in its mission kasi ‘yun ‘yung mga [because those are the] valuable stuff that will really ignite them to continue the business.”
Francorp Philippines is part of the worldwide franchise consulting firm Francorp, which is based in Chicago. It also has consultants in South America, other parts of Asia, Middle East, and South Africa. Francorp Philippines’ clients account for 25% of the total franchises in the country. The firm works with more than 5,000 entrepreneurs per year through seminars, events, and other activities. Some of its clients are Jollibee, Potato Corner, Max’s Restaurant, Chatime, Goldilocks, and Pancake House.
The event organizer, Philippine Franchise Association, is a voluntary self-regulating body for franchising in the country. Its members range from micro to large businesses both from the Philippines and abroad in the fields of food, retail, services, and other types of businesses.
Not many people may realize it, but there has been a bountiful harvest of legislation from the 17th Congress. Both Houses of Congress have produced significant economic and socially progressive legislation since signed into law by President Duterte. Credit no doubt goes to House Speaker Gloria Macapagal-Arroyo and Senate President Tito Sotto, both legislative veterans who know how to make their respective chambers productive.
While many recently passed laws are good, a few belong to the “good intentions but unforeseen consequences” category. An example of the latter is the 105-day Maternity Leave Law. It will saddle private employers and the Social Security System with paying for the benefits provided in that law, an unnecessary added financial burden for SMEs (Small and Medium-sized Enterprises). The irony of the law is that while it may seem pro-women, the consequence may be that companies will hire fewer women given prospectively higher financial costs of female employees going on maternity leaves.
Another recent law that effectively taxes labor-intensive firms is the law declaring December 8, or the Feast of the Immaculate Concepcion for Catholics, a special non-working holiday. The Philippines already has the most non-working holidays in Asia and adding another holiday is an onerous burden to labor-intensive firms because they have to pay 130% of basic salaries if employees go to work. Besides, where does it stop? Another holiday for Iglesia ni Kristo? How about for Seventh Day Adventists? Or the Aglipayans? These other religions can cry religious discrimination.
Another very bad law is the Free Tertiary Education Act. The Act subsidizes both rich and poor students alike since the subsidy is given to the SUC (State University or College) and not to the student.
However, there are excellent, if not good, laws which emanated from the 17th Congress. The hugely important law is the Rice Tariffication Act. It’s a hugely pro-poor and pro-development law. It’s also momentous since the dismantling of the National Food Authority’s legal monopoly on rice importation has been attempted by reformists for years, but never accomplished in previous congresses until now. It’s hugely pro-poor because it will lower and stabilize the price of the poor’s main staple, rice, and effectively increase their real incomes. It’s hugely pro-development because wage demands from labor will be tempered by the lower price of rice, making our companies more cost competitive. Moreover, the huge chunk of the agriculture budget going into rice in pursuit of a foolish rice self-sufficiency policy can now be channeled into higher value crops.
The other hugely important law, but in the political sphere, is the Bangsamoro Organic Law (BOL). Like the Rice Tariffication Act, the BOL has been years in the making, repeatedly foiled in its various previous versions. Finally, bucking history, the 17th Congress passed it. The BOL will give more meaningful autonomy to the Bangsamoro region and lay the foundation for peace and development in the strife-torn area. And for those who are fans of the parliamentary system, the BOL will provide a real experiment as it provides for a party-based parliamentary system in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
Agriculture, which is the country’s laggard sector, just got a big boost with the passage of the Agriculture Free Patent Act (RA 11231). It removes Commonwealth-era restrictions that prevent an estimated 2.5 million agricultural patents from being bankable. For the first time, corporations, not just individuals, will also be allowed to buy agricultural patents, paving the way for corporations to invest in the countryside.
Among the legislative cornucopia of the 17th Congress is pro-business legislation. One is the Ease of Doing Business Act, which aims to cut bureaucratic red tape and eliminate corrupt practices. The law mandates that processing time for transactions with government and government corporations is three working days for simple transactions, seven working days for complex transactions, and twenty working days for highly technical ones, with corresponding penalties for bureaucrats if government mandates aren’t followed.
In this spirit of cutting down on red tape is EVOSS or Energy Virtual One Stop Shop Law. Under EVOSS, prospective energy investors can get their permits through an online platform. It aims to cut down on the hassle and time needed to get permits for energy projects.
Another law which should be helpful to SMEs is the Personal Security Property Act (RA 11057). The law aims to enable SMEs to use non-real estate assets (inventory, equipment, and other personal property) as collateral for bank loans by strengthening the legal framework for secured transactions. For movable collateral, the law establishes an electronic centralized registry under the Land Registration Authority.
The Revised Corporation Code should also be a boon to SMEs. It provides for One Person Corporations. The old law required five incorporators with a minimum capital stock. It gives more flexibility for entrepreneurs, who can make sole decisions and who don’t have to rope in five friends to be incorporators and board members.
There are also a number of socially progressive legislation. A superb law that will yield high economic and social returns is the First 1,000 Day Law (RA 11148) authored by Senator Grace Poe. It seeks to provide health and nutrition services to the first 1,000 days of a child’s development. The law provides for nutrition programs for babies and their mothers up to two years of age. It aims to reduce the number of stunted (3.5 million) and malnourished children with nutrition services and health programs for babies and pregnant women.
PHILIPPINE STAR/MICHAEL VARCAS
Another huge health measure is the Universal Health Care Law. It intends to enroll every Filipino into the National Health Insurance Program. The law is ambitious and expensive (about PHP 257 billion). The government should be prudent in implementing it, lest it blow a hole in the budget. However, properly implemented, it can lead to cost-effective health care with emphasis on disease prevention and community-based health care. It can also lead to innovations if the primary implementor, Philhealth, uses various modes of PPP (Private Public Partnership) in implementing various parts of the law.
The Mental Health Care Act (RA 11036) is also another landmark health measure because, for the first time, mental illness will be recognized and integrated into the nation’s health care system.
I would also count the National ID Law as socially progressive legislation, although it also benefits the economy and strengthens peace and order and security. Too often, poor citizens cannot access banking services or social services for the lack of an ID.
However, there’s a risk that excessive social welfare spending will outpace productivity growth, causing inflation or stagnation. The government, therefore, must carefully calibrate implementation of social welfare spending relative to productivity growth.
Aside from pro-business and socially progressive legislation, the output of the 17th Congress includes pro-consumer laws. Among these are Number Portability Act, the Free Public Wifi Law, and the Estate Tax Amnesty.
The Number Portability Act, authored by Senator Win Gatchalian, will help spur competition in the telecommunications sector since mobile consumers can retain their old numbers even when switching to a new service provider. This will be a boon to the third telco as it tries to carve out market share by offering lower prices.
The Estate Tax Amnesty will help free up “dead capital” from estate property that couldn’t be sold or transferred due to the high taxes and fines under the old law.
There are two laws that will strengthen government institutions. After many years, a new Central Bank Charter was passed (RA 11211), a legacy of the late BSP Governor Nesting Espenilla who died shortly after the law was enacted. The new Charter strengthens the capital base of the Bangko Sentral to PHP 200 billion and mandates it to “pursue price stability conducive to a balanced and sustained growth of the economy.” The new law also gives it more powers over money service businesses, payment operators and other types of financial institutions. It restores BSP’s powers to issue its own debt papers.
Finally, the new SSS law similarly strengthens the Social Security System, ensuring that it remains financially sound to service its members. It also mandates compulsory coverage of overseas Filipino workers.
However, the 17th Congress hasn’t ended yet. There are still nine session days left before the current Congress adjourns sine die to pave the way for newly elected officials in the 18th Congress. It still has the time to pass the Public Service Act Amendment and the Open Access in Data Transmission Act. As I stated before, the Public Service Act Amendment, which seeks to remove foreign ownership restrictions in the strategic industries of transport and telecommunications to foster competition and facilitate technology transfer, is the most consequential piece of economic legislation since the founding of the Republic. The Senate would be remiss in its duty if it fails to pass this landmark measure.
On the other hand, the Open Access in Data Transmission Act will foster more competition and innovation in the broadband industry. The Open Access in Data Transmission Act, and not the entry of the third telco, is the real game changer to enable Filipino consumers to enjoy faster and cheaper Internet service.
It’s too bad that the impression of the Philippines abroad is all about extra-judicial killings (EJKs) and the bloody anti-drug war, thanks to our foul-mouthed President. However, there are some real positive changes — even some socially progressive legislation absent in advanced countries — going on. We can only hope that the 18th Congress, the last under President Duterte, will continue to pass legislation that will sustain economic growth with social inclusion.
Calixto V. Chikiamco is a board director of the Institute for Development and Econometric Analysis.
The good news in Philippine inflation is that the numbers are declining in the past three months of 2019. The bad news is that even such “low inflation” is actually the highest in East Asia, among the more mature economies with updated numbers. Dutertenomics should be ashamed of this.
And even in the Bangko Sentral ng Pilipinas (BSP) quarterly Business Confidence Survey, the trend is a continuing decline from 46.8 in 2015 to 34.0 in 2018. Again, Dutertenomics should be ashamed of this continuing erosion of business confidence in the country (see table).
Meanwhile, we see President Duterte doing U-turns in major policies. First, his centerpiece program drug war, the kill-kill-kill policy, has resulted in some 25,000 murders but recently he admitted that he cannot control illegal drugs in his term.
Second, the shift from integrated PPP to hybrid PPP just to favor China contractors and financing — the need for more taxes to pay for more loans when many infrastructure projects can be financed entirely by private contractors under integrated PPP. Among the casualties of this shift is the delayed construction of Kaliwa Dam and additional 600 million liters per day for Metro Manila.
Third, his avowed fight against corruption is contradicted by the release from jail of two former senators linked to plunder, Sen. Bong Revilla and Jinggoy Estrada, who are each seeking a fresh term under the Hugpong/Duterte slate.
And fourth, his economic team’s avowed promise of economic stability is contradicted by deterioration in macro fundamentals. GDP growth is decelerating, 6.9% in 2016, 6.7% in 2017, and 6.3% in 2018. Inflation rate worsened ever since TRAIN law was implemented in 2018 with its high oil-coal tax hikes among other tax hikes, and business confidence index continues to decline.
The Duterte government’s economic management is poor while its political bragging is high. It has a chance to reverse this by at least targeting a 1-2% inflation rate this midterm election year via suspension of oil tax hikes part 2, or a tax cut somewhere. Instead, it continued its economic and political arrogance by expanding the spend-spend-spend, tax-tax-tax, borrow-borrow-borrow mantra.
I hope that voters will take note of these and punish the Duterte senatorial lineup, as well as their congressional and local government candidates.
Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers
My main message in “The Decline of Political Parties” (BusinessWorld, 1 April 2019) is that path dependence can explain how Philippine political parties have been emasculated. That is, our colonial history has determined the path of our political parties, and it will be difficult to reverse this.
The political parties arising from the course of our history are bereft of an ideology and a long-term program, are dependent on patronage and particularistic interests, and are driven by personalistic ambitions. The question then is whether these basic problems can be addressed through reforms by legislation.
The reform to strengthen political parties has been on the agenda since the fall of the Marcos dictatorship and the restoration of nominal liberal democracy. As far back as the 12th Congress (2001-04), we have seen bills filed in Congress regarding the reform of political parties.
The volume edited by Paul Hutchcroft titled Strong Patronage, Weak Parties: The Case for Electoral System Redesign in the Philippines (Anvil Publishing, 2019) tackles the different issues revolving around electoral systems, particularly political parties. One chapter, written by Ramon C. Casiple, is devoted to how legislation (the political party development bill) can strengthen political parties.
Casiple summarizes the main features of bills on strengthening political parties that have been filed since the 12th Congress, namely:
• Penalizing turncoatism (defecting from one party to another).
• Regulating campaign finance and expenditures.
• Providing state subsidy to accredited political parties.
It is telling that the so-called traditional politicians (or trapos) — those who prosper through patronage and the pork barrel and who eschew program and ideology — are among those who have filed bills on political party development. That suggests their interests will not be harmed by the reform.
Of course, the devil is in the details of the bills. And despite bi-partisan or multi-partisan support for the different yet similar bills, substantial legislation has yet to happen.
But even assuming that the reforms above will eventually happen, we ask: Will these reforms really the transform the political parties? Will these reforms really lead parties to promote ideology and coherent programs as well as reject personality-oriented politics, patronage, and elite capture?
That the trapos can go along with and even sponsor the reforms suggests that they can game the rules.
Even a strict rule on turncoatism can easily be gamed by forming a coalition with whoever is in power. Note, for example, in the current setup that the majorities in the Senate and the House of Representatives are made up of opportunistic coalitions. Although it is most desirable for a politician to be part of the party in power, a constraint on being able to shift to the dominant party will not alter the behavior of the politician to remain part of the majority through other means in order to have access to power and resources. Incidentally, only in the Philippines can one witness a minority in the House of Representatives being loyal to the leadership of the majority.
The regulation of campaign finances and expenditures is most difficult to enforce. Notwithstanding transparency measures, an investigator will have a hard time identifying and monitoring the source of financing, without inside information, when resources used by politicians take the following forms: legitimate government projects; veiled and layered financing from vested interests; and worse, resources from illegal economic activities like the narcotic trade, gunrunning, and jueteng.
The reforms then must go beyond those directly related to electoral systems and must include measures that are hard to pass such as the lifting of the bank secrecy law. And despite an Executive Order on freedom of information (FoI), its implementation is hampered by the lack of the culture of transparency in the bureaucracy. In addition, the bureaucracy uses other legal obstructions to withhold information (like a restrictive interpretation of the Data Privacy Act).
State subsidy for political parties is good on paper, but its unintended consequence can lead to further strengthening the already dominant political parties. The parties of trapos already have access to other bigger sources of financing, including those that are difficult to track. Further, in a situation where institutions are weak, such state subsidy will be a source of corruption.
This is not to say that the reforms on political development do not have merit. Rather, they are insufficient, especially when the old type of electoral politics is deeply entrenched. Reforms beyond electoral processes are necessary.
Meantime, the few small and floundering political parties that are driven by principles and ideology have to reinvent themselves. They have to find novel ways to break into the system, despite the rules being stacked against them.
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.
