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The Business Case for Gender Diversity

Does gender composition of a company’s leadership team affect its financial performance?
McKinsey & Company’s Delivering Through Diversity (2018) report chronicles the global relevance of the correlation between diversity in the leadership and stronger financial performance of large companies. Diversity in this study is defined as having a greater proportion of women and ethnically/culturally diverse individuals in the executive team. Released earlier this year, the study expands its 2015 research, Why Diversity Matters, a widely cited work that influenced inclusion and diversity transformation initiatives across all sectors of society. Covering more than 1,000 companies across 12 countries, the 2018 study measured not just profitability this time, but also longer-term value creation.
Below are some significant findings of the updated study:
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• Gender diversity and business performance showed even greater correlation. Companies in the top-quartile for gender diversity on their executive teams had a 21% (vs. 15% in 2015) likelihood of outperforming their fourth-quartile industry peers on earnings before tax margin. Moreover, this study posted a 27% likelihood of outperforming fourth-quartile peers on longer-term value creation, as measured by economic profit margin.
• Having gender diversity on executive teams is positively correlated with higher profitability across geographies in the study, highlighting the role that executive teams (where the bulk of strategic and operational decisions are made) play in the financial performance of a company. Also worth noting is that the highest-performing companies on both profitability and diversity had more women in revenue-generating roles than in support roles on their executive teams.
• Gender diversity is just the tip of the iceberg. Executive team cultural diversity shows an even higher correlation with profitability. Companies in the top-quartile for cultural diversity on executive teams were 33% more likely to have industry-leading profitability. This would suggest that inclusion of diverse members, expanded beyond gender and cultural diversity, can be a key differentiator among companies.
• Opting out of diversity has a price. Overall, companies in the bottom quartile for both gender and cultural diversity were 29% less likely to achieve above-average profitability than were all other companies in the data set. Not only were they not leading; these companies were actually behind the curve!
The study is quick to point out that the correlation relationship is NOT causal, meaning that greater gender and cultural diversity in corporate leadership DOES NOT automatically translate into more profit. Rather, it indicates that companies that have diverse leadership are more successful than those that opt out of executive team diversity.
The success of a more diversified leadership team may be attributed to the fact that these companies are sourcing from a bigger and deeper pool of top talent who contribute to expanded customer orientation, better employee satisfaction, and more balanced decision making, all of which eventually make their path toward increasing returns. This success opens up the possibility that other forms of diversity (age, sexual orientation, experience, background, and mind-set) are also likely to contribute to some level of competitive advantage for the team that can source and retain such diverse talent.
So, there is a business case for gender and cultural diversity that goes beyond town hall jargon and actually ties to the much sought-after bottom line! Now the relevant question is: how diverse is YOUR executive team?
 
Maria Rosario N. Balagot is a Strategic Management Lecturer from the Management and Organization Department of the Ramon V. Del Rosario College of Business of De La Salle University. She is Head of Corporate Planning of Alstra, a Concepcion Industries company, and has spent over 30 years across multinational and local companies in the banking and financial services industry.
marionbalagot@gmail.com

Acceptable racism?

In a 2012 piece in The Spectator about the win of Chinese swimmer Ye Shiwen in the London Olympics, writer Ross Clark titled his commentary, “Sinophobia, the last acceptable racism.” He wrote about how Western coaches questioned China’s win of gold medals, initially insinuating possible illegal drug use, then later the use of inhumane and brutal training regimes.
I took note of Clark’s term, wondering whether or not there is ever a level of racism that can be deemed acceptable or justifiable. If black is black and white is white, then the appropriate reply to this query is “none.” For racism can never be acceptable or justified. But, in reality, we live in a world filled with various shades of gray, and not just black and white.
I have never considered racism much of an issue in modern-day Philippines, perhaps until now. I am not an academic, neither am I an expert in Sociology. However, as a journalist in the last 25 years, I have had the opportunity to closely observe many things happening in the country. And, to date, I sense an increasing anti-Chinese sentiment among our people.
People appear to have begun to dislike the Chinese because of their unilateral politics, their supposed territorial intrusions, their alleged “bullying,” and their use of economic might to get other countries’ compliance. As such, those who are vocal against the Chinese are labeled patriots and nationalists, while those seen supportive are labeled traitors and opportunists.
In reality, the issue has nothing to do with skin color or race. It is not strictly racism per se, as it doesn’t seem to be a matter of Filipinos seeing the foreign Chinese as inferior to them or seeing themselves as superior to the Chinese. People perhaps don’t like the Chinese not for who they are, but for what they do and how they do them.
My concern is that for some people, the distinction may not be clear. And their sentiment against what the Chinese do and how they do them may yet translate to a sentiment against the Chinese, in general. And this, I believe, is a brewing issue. The last thing we need now is a situation where the unscrupulous can take advantage of circumstances and feed the fire.
Is it possible for the sentiment against mainly foreign Chinese to broadly cover Chinese-Filipinos, too? Will Filipinos miss the distinction and lump them all together? Many Chinese-Filipinos do business in China or have business dealings with their foreign brothers. They entertain Chinese investments. So, does the government. Will anti-Chinese sentiment affect them as well?
More than 20 years ago, in May 1998, major riots occurred in the Indonesian cities of Medan, Jakarta, and Surakarta. This was in reaction to allegations of widespread cheating in legislative elections as well as the economic downturn resulting from the Asian financial crisis in 1997. The riots eventually saw the resignation of President Suharto and the creation of a new government.
The riots took place as the country grappled with food shortages and mass unemployment, and the main targets of the violence were not foreign but ethnic Chinese. More than a thousand people were estimated to have died in the riots. The ethnic Chinese, or the Chinese Indonesians, were blamed for the hardships, with many of them being in control of business and food supply.
Shops and supermarkets owned by Chinese Indonesians were looted, while those owned by indigenous peoples were left alone. Jakarta’s Chinatown was badly damaged, and some store owners allegedly paid local thugs to protect them because the police could not. In Surabaya, rioters also targeted Chinese-owned stores and homes, burning their contents.
Every time the issue of anti-Chinese sentiment arises, I cannot help but recall what happened in Indonesia 20 years ago. For, it is a fact that big businesses even in the Philippines are also controlled by ethnic Chinese, the Chinese Filipinos, including businesses involved in the supply of food, whether locally produced or imported.
Sentiment against the Chinese is not new in the Philippines, and it can happen again.
In a paper on retail trade by Assistant Professor Bing Baltazar C. Brillo of the Department of Social Sciences of UP Los Banos, he noted that as early as the Constitutional Convention in 1934-1935, government was already moving against Chinese businesses as “the Committee on Commerce headed by Salvador Araneta recommended the inclusion of a provision that only citizens of the Philippines and the United States would be allowed to engage in the retail business in the proposed Philippine Constitution” of 1935.
But, then President Manuel Quezon counseled against the passage of such laws for being ill-timed, and that it can come after the Philippines gained independence from the US. Moreover, “legislators feared international repercussions, particularly from the United States, China, and Japan (which at the time was poised to be a regional power).”
After the war, Congress actually passed a retail nationalization law but President Sergio Osmeña vetoed it, warning that other countries and the United Nations might see the law as discriminatory against their nationals residing in the Philippines. Incidentally, Osmeña, an illegitimate child, is of Chinese-Filipino ancestry. His father was surnamed “Sanson,” and his mother was a Suico-Osmeña. His wives, Estefania Chiong Veloso and Esperanza Limjap, were also of Chinese-Filipino ancestry.
A third attempt to block Chinese retailers occurred in 1950 during the Quirino Administration, but the bill filed in Congress was not passed for lack of time. But, in 1954, during the Magsaysay Administration, a fourth attempt succeeded. The Third Congress passed Republic Act No. 1180, or the Retail Trade Nationalization Act, which remained in effect until retail trade was “liberalized” in 2001 through a repealing law.
At the time, Prof. Brillo noted, data from the Bureau of the Census and Statistics showed that Filipinos owned only 51.9% of the total assets of the country, and the rest were owned by foreigners. Moreover, the same bureau reported in 1948 that of the total 12,274 alien retail trade establishments in the Philippines at the time, 12,087 were run by Chinese, and only the remaining 187 were operated by non-Chinese.
“The fundamental premise for nationalizing the retail trade was that Chinese domination resulted in an industry controlled by aliens,” Brillo noted. As RA 1180’s explanatory note stated, “Its purpose is to prevent persons who are not citizens of the Philippines from having a stranglehold upon our economic life. If the persons who control this vital artery of our economic life are those who owe no allegiance to this Republic, who have no profound devotion to our free institutions and who have no permanent stake in our people’s welfare, we are not really masters of our own destiny.”
Those who successfully lobbied for nationalizing the retail trade were the Filipino retail businesses, merchants and vendors, supported by the Philippine Chamber of Commerce (PCC) and the Philippine Chamber of Industries (PCI), as well as the state agency Bureau of Commerce. Those opposed were the Chinese General Chamber of Commerce (CGCC) and the Federation of Chinese Chambers of Commerce (FCCC). Both were supported by the Chinese government in Taiwan, and the American Chamber of Commerce (ACC). Filipino retailers threatened to use their votes to influence lawmakers, while the Chinese turned to the international community to pressure the Philippine Government.
About 46 years after RA 1180 was enacted, its critics claimed the law had already outlived its usefulness. By then, the assimilation of the ethnic Chinese has resulted in a retail industry full of Chinese-Filipinos, rather than pure or foreign Chinese nationals. And given other reasons as well, Congress deemed it already reasonable to “liberalize” retail trade in 2000.
But, with the way things are now, are we about to see “protectionism” rear its head once more? Will we see people or business groups lobby for Congress and the Executive to move towards curtailing, or limiting, particularly Chinese efforts to play a greater role in the Philippine economy?
Will we again discriminate against Chinese business and Chinese investments like we did in 1934-1954? Will we once again close certain industries to Chinese nationals, like in 1954-2000? Should we consider such seemingly racist effort “acceptable” like in 1954? Will there be increasing pressure on the government, from local and external sources, to reconsider its China pivot?
 
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council
matort@yahoo.com

Increase in minimum public float for better corporate governance

Corporate governance is a system of rules and policies by which a company is directed and controlled. It influences the behavior of the company including how risks are managed and how objectives are set.
In the past decade, the interest in corporate governance, particularly in relation to accountability of its board of directors, exponentially increased.
With the collapse of high-profile corporations such as Enron, WorldCom, and MCI, Inc., the United States introduced the Sarbanes-Oxley Act which aimed to weed out corporations with bad governance and to restore public confidence. In Asia, the 1997 Asian financial crisis exposed the weak governance of many corporations, which led the business community to re-examine the effectiveness of their own corporate governance. The government, on the other hand, remains stricter than ever in imposing rules and regulations to restore public confidence.
In the Philippines, for publicly listed companies, the Security and Exchange Commission (SEC) has issued several listing guidelines that are required to meet certain governance standards, one of which is the implementation of the minimum public float requirement.
In order to become a publicly listed company, the SEC requires a certain percentage of a company’s listed securities to become part of the public float. The public float or free float represents the portion of outstanding stocks made available to the public investors for stock trading. This refers to the shares that are freely bought and sold by the public, meaning, those shares bought and sold to persons or organizations other than directors of the company and its subsidiaries and people connected to them.
Determining the public float is important for investors because it determines how many shares are actually bought and sold by the public, which in turn would show how valuable the stocks are by the number of times it is traded. The minimum public float requirement varies from country to country. In the Philippines, SEC issued Memorandum Circular No. 13, Series of 2017 (MC 13-2017) increasing the floating requirement on Initial Public Offerings from ten percent (10%) to twenty percent (20%).
Moreover, the SEC required those currently listed and traded in the Philippine Stock Exchange (PSE) to increase their public float to fifteen percent (15%) by the end of the year and again, increase the public float to twenty percent (20%) by the end of 2020.
Whether the minimum public float requirement should be increased or not is subject to many debates in the Philippines.
The MC 13-2017 cited four reasons justifying its increase. First, by increasing the minimum public float, the market depth increases. This means that the company will become more liquid which will then attract more investors. Second, increasing the minimum public float reduces market volatility, which helps in better price discovery. Third, large and dispersed shareholdings lessen the risk of collusive market action, hence, encouraging good governance. Lastly, a higher public ownership enhances free float market capitalization, which is important today especially with the ongoing ASEAN integration where the average minimum public float in ASEAN countries is at 20-25%.
Back in 2012, when SEC first imposed the ten percent (10%) requirement, a lot of companies had a difficult time complying with it. The reason is that the public float affects corporate governance either directly or indirectly through the market for corporate control.
While the MC 13-2017 cited its advantages, some companies were reluctant to increase such for reasons including increased disclosure, potential loss of control, and pressure to perform. Either way, when such MC 13-2017 will be implemented, erring companies will result in being subjected to administrative sanctions provided under Section 54 of the Securities Regulations Code.
The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes, and not offered as, and does not constitute, legal advice or legal opinion.
 
Ann Catherine L. Co is an Associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Cebu Branch.
(6332) 231-4223
clco@accralaw.com

Don’t blame Uber for your city’s congestion

By Leonid Bershidsky
A GROWING body of research shows that ride-hailing services such as Uber and Lyft increase rather than reduce congestion. These services, however, account for such a small share of urban travel that focusing on them as a source of trouble is probably wrong, if easing congestion is the goal. If they’re not the solution, they’re not really the problem, either.
Last week, transportation consultant Bruce Schaller released a report pointing out that 70% of Uber and Lyft trips occur in nine large US metropolitan areas, where they account for 90% of taxi rides (New York, where traditional taxis are still popular, is the one exception). In these areas, according to Schaller, the transportation network companies (the generic name industry professionals use for the ride-hailing firms) have added 5.7 billion miles of driving annually — and added to congestion because 60% of their customers would have used public transportation had these services not been available.
That fits the findings of other recent studies, such as the 2017 one by Regina Clewlow and Gouri Shankar Mishra of the University of California Davis, which found that 49% to 61% of ride-hailing trips wouldn’t have been made at all had the apps not been there. People would have walked, biked, or used public transit, and the services increased the total number of miles driven in big cities.
One might think that the problem here is that the only “ride-sharing” that occurs on most Uber or Lyft rides is between the driver and a single passenger — and the driver wouldn’t have gone anywhere if she hadn’t been hired. According to the Schaller report, only 20% of the transportation network companies’ rides are really shared, with several passengers taken on, and the rest are, in effect, single occupant vehicle trips, hated by all urban mobility experts for their environmental inefficiency and the congestion they create.
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Schaller, however, argues that shared services such as UberPool and Lyft Line are still net negatives: They add miles driven because their users, too, switch from public transportation such as buses and subways, and because even with such sharing, drivers move alone between drop-off and pickup points.
Robin Chase, a founder of Zipcar, the car-sharing service, made a strong argument against such conclusions: Ride-hailing accounts for a relatively small share of urban travel. According to New York’s 2017 Mobility Report, 258 million trips taken last year involved a for-hire vehicle. Subway ridership, meanwhile, reached 1.757 billion, and buses carried 638 million passengers. Besides, the report says, for 32% of New Yorkers the private car is the primary mode of transportation.
The disruptive new transportation companies get a lot of attention, but regulating them, incentivizing them to take on more passengers per ride, or imposing congestion surcharges on them probably won’t reduce congestion in any decisive way. And the ride-hailing firms’ recent interest in bike and scooter rentals, while ostensibly a helpful counterbalance to the growth in miles driven, could lead to unwanted consequences while cars still rule the road. Bicycle fatalities represent 2% of the US total, while bicycle trips account for 1% of the total. In the bike-crazy Netherlands last year, there were more cyclist fatalities than deaths in cars.
For most experts, the holy grail of urban transportation is still to make sure no one is driving around alone in a vehicle built to seat four, five or more people. There aren’t too many ways to achieve that goal beyond creating special lanes for collective transportation, including cars carrying several people, or banning single-occupant vehicles outright in certain areas, as Jakarta, the Indonesian capital, did until 2016. True, the ban was unpopular and led to the emergence of “jockeys” — people who piled into a car for a small fee. But when the restriction was canceled without explanation, congestion increased significantly — not just in the directly affected areas but on alternate routes as well, likely because more people decided they now could drive alone.
Anti-congestion measures should affect all kinds of vehicles — private cars, cabs, Ubers, short-time and long-time rentals. They should only be allowed to use faster lanes when they carry no fewer than three people, and in cities with the nastiest traffic, they should probably be kept out of the most congested areas if they only have one or two occupants. At the same time, cities need to invest in public transportation to keep it competitive; if the subway is seedy and unsafe and buses don’t run on time, people will be forced to consider alternatives, even costly and slow ones.
These, of course, would only be temporary solutions until cities manage to weave all available modes of transportation into seamless networks on which the most rational option is always available to a traveler with a subscription plan or a universal day ticket. On that issue, opponents such as Schaller and Chase find much common ground. The important thing is not to lose sight of the most basic goals: less time wasted in traffic, and cleaner air. Focusing on the new modes of transportation alone, or on their self-driving varieties that may become available soon, is a distraction.
 
BLOOMBERG

Beermen race to 2-1 series lead over Kings

By Michael Angelo S. Murillo
Senior Reporter
THE San Miguel Beermen went 2-1 up in their best-of-seven Philippine Basketball Association Commissioner’s Cup finals series with the Barangay Ginebra San Miguel Kings after blowing past their opponents, 132-94, in Game Three on Wednesday night at the Smart Araneta Coliseum.
Using a strong third quarter, the defending champions Beermen turned a close game in the first half into a rout thereafter to move a step closer to repeating as champs in the midseason PBA tournament.
The contest got to a gunslinging start with the two teams engaging in a tight one-upmanship.
Barangay Ginebra held a 14-12 lead with six minutes remaining in the quarter before it went on a 7-2 run in the next minute and a half to stretch their lead to seven points, 21-14.
San Miguel though did not stay down for long, racking up seven quick points to tie the count at 21-all with three minutes left.
The Beermen completed the turnaround, going on a 9-6 run the rest of the way to claim a 30-27 advantage by the end of the quarter.
The Kings would start the second canto hot with veteran Mark Caguioa and Kevin Ferrer providing the spark off the bench.
They were able to level the score at 37-all at the seven-minute mark after which both teams kept each other within close range of one another.
At the end of the first half, San Miguel maintained the upper hand, 53-51.
The Beermen would open the third period scorching, outscoring the Kings, 9-0, led by Renaldo Balkman, June Mar Fajardo and Alex Cabagnot, in the first two and a half minutes to hold a 62-51 lead.
But import Justin Brownlee would pull Barangay Ginebra to within four points, 64-60, with 7:52 to go.
Chris Ross and Marcio Lassiter stopped the bleeding for San Miguel with a string of triples to give themselves more breathing room, 78-64, at the five-minute mark.
The Kings made attempts to come back anew but the Beermen would not allow them and instead pushed on the gas pedal further to stretch their lead to 20 points, 92-72, at the end of the third period.
San Miguel picked up where it left off to start the final frame, racking up seven straight points to build its lead to 27 points, 99-72, with 10:18 left.
From there the Beermen stayed on cruise control before sending the win to the dock.
Mr. Balkman led San Miguel with 28 points and 11 rebounds.
Mr. Ross had 23 points, going 7-of-13 from beyond the arc, while Mr. Fajardo had 22 markers.
Barangay Ginebra, meanwhile, was led by Mr. Brownlee with 32 points while Mr. Caguioa finished with 12.
“I did not expect this outcome as we were expecting a close fight. But I have to give credit to my players because they really showed they wanted to win,” said San Miguel coach Leo Austria after their Game Three victory.
“But this is just one win. There is still a long way to go. We are up in the series and this big win is a morale boost for us. We have to continue working though,” he added.
Game Four of the series is on Friday.

Peso inches higher as market eyes BSP meet

THE PESO strengthened further against the dollar on Wednesday as the market pocketed gains ahead of an expected tightening by the local central bank this month.
The peso closed Wednesday’s session at P53.08 versus the greenback, a centavo and a half stronger than the P53.095-per-dollar finish on Tuesday.
The peso opened the session stronger at its intraday high of P53.05 versus the dollar. Meanwhile, its worst showing for the day was at P53.15 against the US currency.
Dollars traded declined to $642.13 million yesterday from the $670.81 million that switched hands on Tuesday.
In a text message, an economist said the peso moved sideways with an upward bias on Wednesday.
“This probably was due to the considerable profit taking as the market expects a rate hike in the coming week,” Ruben Carlo O. Asuncion, UnionBank of the Philippines chief economist said in a text message.
The Bangko Sentral ng Pilipinas (BSP) has been hinting at another interest rate hike during its monetary policy meeting on Aug. 9.
Last month, BSP Governor Nestor A. Espenilla, Jr. said the monetary authority is ready to follow through the two tightening moves it has implemented this year to temper inflation expectations.
“The peso appreciated as market players remained optimistic on a possible BSP rate hike next week despite general strengthening of the dollar across major currencies ahead of likely hawkish guidance from the US Federal Reserve [on Thursday],” a foreign currency trader said in an e-mail.
Meanwhile, another trader said the pair traded within a very tight range as the dollar index moved sideways.
“The peso traded [up] since we saw offshore market selling near the close…” the second trader said.
For Thursday, Mr. Asuncion said the peso may play within P53 to P53.20 against the dollar while the first trader sees the pair trading between P52.95 and P53.15. The second trader said the local currency may move within P52.95 to P53.20 per dollar.
Meanwhile, most Asian currencies took to the sidelines on Wednesday, with China’s yuan choppy amid media reports that US plans to raise tariffs on $200 billion of Chinese goods. — KANV with Reuters

Bourse pierces 7,800 on sustained foreign buying

By Arra B. Francia, Reporter
SHARE prices bounced back on the first day of August after taking a breather in the wake of a five-day rally, lifted by sustained net foreign buying for the sixth straight session and peso’s appreciation against the dollar.
The Philippine Stock Exchange index (PSEi) surged 2.16% or 166.22 points to close at 7,838.22, pushing the main index to its highest level in around three months, while the all-shares index jumped 1.63% or 75.40 points to 4,679.52.
“The peso’s recent strength and continued foreign inflows boosted the PSEi once again — 166.22 points this time to close at its high of 7,838.22,” Papa Securities Corp. trader Gabriel Jose F. Perez said in an e-mail.
Foreign investors marked their sixth straight trading day of net buying, amounting to P324.41 million versus Tuesday’s P255.59 million.
Regina Capital Development Corp. Managing Director Luis A. Limlingan also attributed the PSEi’s increase to the peso’s appreciation, which he noted allowed investors to shrug off weaker-than-expected Purchasing Managers’ Index reading for July.
The peso strengthened against the dollar on Wednesday to close P53.08 against Tuesday’s P53.095, but the local currency was still 6.31% weaker year to date.
“Also propelling the PSEi was the overnight performance of the other markets. US stock market indexes closed higher Tuesday but off their session highs (read S2/5), following news that the Trump administration made little progress in resolving its trade dispute with China,” Mr. Limlingan said in a mobile phone message.
Much of Asia was mixed, with Japan’s Nikkei and TOPIX indexes gaining 0.86% and 0.94%, respectively, while Hong Kong’s Hang Seng, the Shanghai SE Composite Index and the blue-chip Shanghai-Shenzhen CSI 300 dropped 0.85%, 1.81% and two percent, respectively.
Locally, all sectoral indices gained: mining and oil by 4.99% or 484.99 points to 10,199.40; holding firms by 3.14% or 238.52 points to 7,832.26; property by 1.63% or 61.39 points to 3,816.20; services by 1.60% or 23.97 points to 1,517.55; industrials by 1.54% or 166.81 points to 10,996.99; and financials by 0.49% or 9.26 points to 1,868.18.
Some 966.44 million shares switched hands, resulting to a turnover of P7.18 billion, compared to Tuesday’s 842.02 million issues worth P7.05 billion.
Stocks that gained outnumbered those that fell, 120 to 74, while 46 others were flat.
Seventeen of Wednesday’s 20 most active stocks gained, including PXP Energy Corp. (up 39.02% to P14.18); Ayala Land, Inc (2.69% to P41.95); Aboitiz Equity Ventures, Inc (4.10% to P59.70); SM Investments Corp. (4.21% to P990); and Metro Pacific Investments Corp. (2.97% to P4.85).
Three stocks on that list lost: Bank of the Philippine Islands; Bloomberry Resorts Corp. and Metropolitan Bank & Trust Co.

Malacañang sacks Deputy Ombudsman

By Arjay L. Balinbin, Reporter
THE OFFICE of the President has ordered the dismissal of Overall Deputy Ombudsman Melchor Arthur H. Carandang for “graft and corruption, and betrayal of public trust.”
Executive Secretary Salvador C. Medialdea signed the decision last Monday, July 30.
In a statement, Presidential Spokesperson Harry L. Roque, Jr. said, “The Office of the President has come to the decision to dismiss Overall Deputy Ombudsman Melchor Arthur H. Carandang after giving due consideration to the administrative complaints filed against him. “
Mr. Roque said Mr. Carandang’s “acts of making public statements about allegations in an ongoing investigation were in breach of his duty to protect confidential information.”
The Office of the President, according to Mr. Roque, found that “the same acts demonstrated manifest partiality and violated the Anti-Graft and Corrupt Practices Act.”
He added: “This decision was reached after giving Mr. Carandang the appropriate opportunity to respond to the charges made against him.”
The decision cited a report by ABS-CBN in September last year about the alleged ill-gotten wealth of Mr. Duterte and his family.
“The source of the said news report was respondent Carandang who agreed to an interview by (Henry Omaga) Diaz (of ABS-CBN). In the said interview, respondent Carandang declared that the OMB acquired evidence of the said ill-gotten wealth, in the form of bank transaction records, from the Anti-Money laundering Council (AMLC),” the decision read.
Sought for comment, University of the Philippines (UP)-Diliman law professor Antonio G.M. La Viña said this is the “first test” for new Ombusdman Samuel L. Martires who officially assumed his post yesterday.
“This is actually his first test whether he will defend his right to discipline his colleagues in the Office of the Ombudsman or he will now give up that independence to the Office of the President,” Mr. La Viña said in a phone interview.
He added that the next step for Mr. Carandang is he “can go to the Supreme Court to have the decision reversed.”
“The Supreme Court actually had ruled on a similar case already that in fact the President does not have that kind of power over the deputy ombudsman,” Mr. La Viña said.
He added that the implication of the decision is that “(i)f Ombudsman Martires agrees to it, there will be questions about how independent he is going to be or how assertive he is going to be” in protecting the independence of his office.
Also sought for comment, lawyer and political consultant Michael Henry Yusingco said: “The next course of action for Deputy Ombudsman Carandang depends on how newly appointed Ombudsman Martires treats the dismissal order from Malacañang. If Ombudsman Martires adopts the position of former Ombudsman Morales, that is to assert the constitutional independence of the Office of the Ombudsman, then he can continue doing his job unhindered.”
“Mr. Carandang can go directly to the Supreme Court to challenge the dismissal. He can of course use the Supreme Court’s decision in G.R. No. 196231, January 28, 2014 as the basis for his legal action,” Mr. Yusingco also said.
He added that if the dismissal order is executed, “the public will certainly view the independence of the Office of the Ombudsman as compromised.”
“Again, the optics of the whole saga naturally leads to this perspective. Many people will now suspect that the new Ombudsman may not be as fierce in asserting the constitutional independence of the Office of the Ombudsman. If this happens, then it will set us back in our drive against graft and corruption in government. Because to get rid of this scourge, the country needs an uncompromising and fiercely independent Ombudsman,” Mr. Yusingco said.

Pag-IBIG CEO ‘saddened’ by SC ruling on Delfin Lee case

PAG-IBIG FUND in a statement Wednesday quoted its CEO as saying he was “saddened” by the Supreme Court (SC) ruling on Delfin Lee’s P6.6 billion Globe Asiatique scam case.
The SC said on Tuesday it has downgraded the syndicated estafa case against Mr. Lee to simple estafa, a bailable offense.
In the statement, Pag-IBIG Fund CEO Acmad Rizaldy P. Moti said: “We’re saddened by the recent turn of events in the Globe Asiatique scam case but we continue to trust in due process and our justice system. This recent decision of the Supreme Court does not mean that he is innocent of fraud. The trial will continue. We will continue to pursue what is in the best interest of the Fund, our members, and all the home owners and borrowers affected by Lee’s actions.”
He added, “Pag-IBIG Fund shall closely coordinate with the Department of Justice, being the lead counsel and public prosecutor, to determine the next steps we will take.”
The statement also said, recalling the background of this case: “In 2012, Delfin Lee, his son Dexter Lee, Christina Sagun, Cristina Salagan and Atty. Alex Alvarez were indicted for syndicated estafa after separate probes of the Department of Justice and the National Bureau of Investigation concluded that Lee and his cohorts used fake buyers and fraudulent documents to deceive Pag-IBIG Fund into releasing loan proceeds in the amount of P6.6 billion to his firm, Globe Asiatique Realty Holdings Corporation.”
“Lee went into hiding to evade the case but he was nabbed by the police in March 2014. His cohorts are still at large to this day.”

Napoles, kin indicted by US grand jury

ALLEGED PORK BARREL-scandal mastermind Janet Lim Napoles and five members of her family were indicted Tuesday in the United States for money laundering and other charges, according to a statement from the US Department of Justice.
Ms. Napoles, 54, was accused by a federal grand jury “for conspiring to funnel in and out of the United States approximately $20 million in Philippine public funds obtained through a multi-year bribery and fraud scheme,” said the statement titled, “Six Filipinos Indicted for Domestic and International Money Laundering and Conspiracy for Multi-Year Bribery and Fraud Scheme.”
Also charged in the indictment for Conspiracy to Commit Money Laundering, Domestic Money Laundering and International Money Laundering were Jo Christine Napoles, 34; James Christopher Napoles, 33; Jeane Catherine Napoles, 28; Reynald Luy Lim, 52; and Ana Marie Lim, 47.
The statement also said: Four defendants together with approximately 20 Philippines legislators and other government officials not charged in US indictments converted to their own benefit hundreds of millions of dollars in Philippine public funds through the intricate scheme and then transmitted approximately $20 million from that scheme into the United States to purchase assets, including real property and luxury vehicles.
The statement added: “The defendants fraudulently converted money from a lump-sum discretionary ‘Priority Development Assistance Fund’ granted to each member of the Philippines Congress as well as other government funds designed to benefit poor Filipinos.
The statement said further that the money was paid to dozens of non-governmental organizations controlled by Ms. Napoles, for “development projects (that)…were not performed. Instead, the money was diverted to kickbacks for the legislators and other government officials, and for the personal use of the Napoles family.”
“Approximately $20 million of those funds were diverted to money remitters in the Philippines and then wired to Southern California bank accounts where the money was used to purchase real estate, shares in two businesses, two Porsche Boxsters, and finance the living expenses of three family members residing in the United States: Jeane Napoles, Reynald Lim, and Ana Lim,” the statement also said.
“Even after Jannet (sic) Napoles made a highly publicized statement admitting that she had bribed Philippine legislators in connection with these ‘ghost projects,’ the defendants attempted to convert the proceeds of this crime to their own use,” US Attorney Nick Hanna said in the statement.
Court documents were also cited indicating that approximately $12.5 million in Southern California real estate has been seized by the US Attorney’s Office and is subject to a civil forfeiture case pending before United States District Judge James V. Selna.
The statement said the Department of Justice of the Philippines and also the Office of the Ombudsman, Anti-Money Laundering Council, and Commission on Audit continue to provide “substantial assistance” to US authorities, in line with the Mutual Legal Assistance Treaty between the two countries and through the Financial Crimes Enforcement Network.
Last week, Ms. Napoles was denied bail regarding her cases in connection with the PDAF scam. She was also indicted for her alleged role in the 2004 fertilizer fund scam.
Her brother Ronald and her children Jo Christine and James Christopher face 97 counts of graft and malversation of public funds in connection with the Malampaya fund scam. — with Gillian M. Cortez

Bicameral panel approves coco levy fund

By Camille A. Aguinaldo, Reporter
THE bicameral conference committee on Wednesday approved the proposed measure allowing farmers to benefit from the coconut levy funds collected by the government during the Marcos regime.
The proposed Coconut Farmers and Industry Development Trust Fund Act seeks to convert P100 billion in coconut levy assets into a trust fund for farmers and the coconut industry. It was identified as among the priority bills of Congress by the Legislative-Executive Development Advisory Council (LEDAC).
About 3.5 million farmers are expected to benefit from the long overdue measure once enacted into law.
“This will serve as a foundation of our future in our continued quest for sustainable development, poverty alleviation and food security. Our farmers have long waited for the moment where they could enjoy the funds which are rightfully theirs,” Senator Cynthia A. Villar, who chairs the Senate committee on agriculture and food, said in a statement.
She also told reporters that the committee adopted the provisions of the Senate version regarding a reconstituted Philippine Coconut Authority (PCA), the body that would manage the trust fund..
Under the House version, the bill called for the creation of a Trust Fund Committee composed of five government officials and six farmer representatives.
“The Senate version was adopted and then it will be managed by a reconstituted PCA. No committee will be formed, just the reconstituted PCA,” Ms. Villar told reporters.
The PCA will be composed of a representative from the agency, Department of Finance (DoF), Department of Agriculture (DA), Department of Budget and Management (DBM), one coconut industry stakeholder, and six coconut farmers with two representatives each from Luzon, Visayas, and Mindanao.
Ms. Villar also said the trust fund will be invested in treasury bills for the PCA to spend on scholarships for children of farmers, health benefits, a shared facilities program, farm improvement programs to encourage self-sufficiency, and empowerment of coconut farmer organizations including their cooperatives. The bicameral panel set P5 billion as the annual amount to be spent from the coconut levy fund.
At least P10 billion will also be automatically appropriated as the yearly budget of PCA sourced from the General Appropriations Act for the development of the coconut industry. The amount will be spent on infrastructure, planting, replanting and establishment of nurseries, research and development, disease control and eradication, fertilization, new products and derivatives of coconut oil products, and credit through Landbank and the Development Bank of the Philippines.
The Senate panel included Ms. Villar and Senator Francis N. Pangilinan while the House of Representatives contingent was composed of ANAC-IP partylist Rep. Jose T. Panganiban, Jr., Quezon Reps. Danilo E. Suarez and Angeline Helen D. Tan, Bohol Rep. Arthur C. Yap, AAMBIS-OWA partylist Rep. Sharon S. Garin, Zamboanga City Rep. Celso L. Lobregat, Negros Oriental Rep. Manuel T. Sagarbarria, Albay Rep. Edcel C. Lagman, Sorsogon Rep. Evelina G. Escudero, and BUTIL partylist Rep. Cecillia Leonila V. Chavez.

Arroyo agrees to separate voting by two chambers on charter change

By Charmaine A. Tadalan
HOUSE Speaker Gloria M. Arroyo has agreed to separate voting when the two chambers of Congress convene into a Constituent Assembly to amend the 1987 Constitution.
“We want to move forward, to be realistic. Better to move forward and achieve something rather than be stubborn and achieve nothing,” Ms. Arroyo said in an ambush interview Wednesday.
“We will work with the Senate. We are going to constitute a committee on Constitutional Amendments,” she added.
A resolution convening the Senate and the House of Representatives (HoR) as a Constituent Assembly was adopted by the House as early as January 2018.
For his part, opposition Senator Francis N. Pangilinan, who heads the Senate Committee on Constitutional Amendments and Revision of Codes, said in a phone message: “Looking at the voting record of the Supreme Court in the last two years, a ruling in favor of Con-Ass voting jointly is not far-fetched.”
He added: “The SC already rendered the Senate inutile and inconsequential in removing (the) Chief Justice through impeachment. What will prevent it from doing it yet again in the constitutionally mandated process of amending the Charter?”
Senator Aquilino Martin L. Pimentel III, on the other hand, welcomed Ms. Arroyo’s remarks. “That helps because at least that should settle the issue on how the vote is taken and counted; Hence we can now focus on the substance of federalism,” he said.

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