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Authorities call for calm, vigilance in bombing aftermath

AS OFFICIALS delivered words of sympathy to the families of those who died and those wounded in last Friday’s bombing at the headquarters of the 1st Brigade Combat Team in Indanan, Sulu, they also called on the public for calm, vigilance, and support as the government pursues its campaign against acts of terror. “The island province of Sulu has suffered enough. I therefore call on all Filipinos and people of Sulu to unite and help our security forces in our common goal: to stop this heinous ideology that is trying to take its root in the province of Sulu and other parts of Mindanao,” Presidential Peace Adviser Carlito G. Galvez Jr. said in a statement. Major General Cirilito E. Sobejana, who assumed as new commander of the Western Mindanao Command (WMC) last June 28, same day as the bomb attack, said in a separate statement: “The WMC will be relentless in its effort to bring long and lasting peace and progress in the Bangsamoro Region and the adjoining provinces that it covers.” Three soldiers died in the bombing and more than 10 others were wounded.

Davao is 1st port visit of USS Montgomery’s 1st deployment

THE UNITED STATES Navy’s combat ship USS Montgomery (LCS 8), escorted by the Davao coastguard and the Philippine Navy, arrived at the Sasa Port in Davao City Saturday, it’s first port visit on its first deployment. “This is the first visit for Montgomery and this is our main deployment, everything is a first for us,” Commander Edward A. Rosso, the ship’s commanding officer, said in an interview with the media. He said port visits are valuable as it allows them to demonstrate their commitment to maritime security in the region while strengthening relationships with allies. “We arrived here aiming to strengthen our partnership and our alliance with the Philippines by exchanging cultural ideas, interoperability,” said Mr. Rosso, who was stationed at the former US military’s Clark Air Force Base in Luzon in 1990-1991. “We had an opportunity today wherein two coastguard ships and Philippine Navy ships escorted us. It is a good opportunity to establish a dialogue and work some communication and language barrier. That is the kind of stuff that we need to work on,” he added. Mr. Rosso also dismissed speculations that their port call has something to do with the recent large research vessels sent by China in Davao. “It has nothing to do with the Chinese. The US and the Philippines have been in a partnership over the years. Think about the over four million Filipino-Americans in the US. Anytime is 350,000 Philippine citizens traveling in the US and most of them US veterans,” Mr. Rosso also said, “We have a bunch of sailors from Filipino-American descent. They’re excited to be back here in the Philippines and show off what they have learned and how they support the US-Philippine alliance.” — Maya M. Padillo

Senators set to file pet bills ahead of 18th Congress opening

SENATORS WILL begin filing their pet bills and resolutions on Monday, three weeks before the opening of the 18th Congress on July 22, the Office of the Senate Secretary said Sunday. “These guidelines, in consultation with the Office of the Senate President and concerned officers of the Legislative Department, are prescribed to prevent early and long queuing, conserve human resources and manpower, and maintain order within the Senate premises,” the statement quoted Senate Secretary Myra Marie D. Villarica as saying. Among the first to file are Senate President Vicente C. Sotto III, Senate Minority Leader Franklin M. Drilon, Senators Panfilo M. Lacson, Francis N. Pangilinan and Senate President Pro-Tempore Ralph G. Recto, in that order. Mr. Pangilinan, in a statement Sunday, said he will re-file the proposed Coconut Farmers and Industry Development Act or the Coco Levy Act, which was approved by the 17th Congress but was vetoed by President Rodrigo R. Duterte. The next batch will be Senators Manuel M. Lapid, Pia S. Cayetano and Ramon B. Revilla Jr., Richard J. Gordon, Aquilino L. Pimentel III and Senate Majority Leader Juan Miguel F. Zubiri. Next would be reelected Senators Nancy S. Binay, Grace Poe-Llamanzares, Juan Edgardo M. Angara and Cynthia A. Villar, and incumbent Senator Emmanuel Joel J. Villanueva, Sherwin T. Gatchalian, Leila M. de Lima, and Emmanuel D. Pacquiao. The last would be newly-elected Senator Christopher Lawrence T. Go, Francis N. Tolentino, Imee R. Marcos and Ronald M. dela Rosa. — Charmaine A. Tadalan

PHL joins capacity-building program for Arms Trade Treaty

AMID THE Duterte administration’s campaign against terrorism, the Office of the Special Envoy on Transnational Crime (OSETC) on Sunday announced that the government has participated in a capacity building program with the Expertise France and the German Federal Office for Economics and Export Control (BAFA) for the implementation of the Arms Trade Treaty (ATT), which the Philippines signed in 2013. The ATT is an international treaty that regulates international trade in conventional arms like small arms, ammunition, and armored fighting vehicles, among others. The treaty also seeks to prevent and eradicate illicit trade and diversion of these arms. The OSETC headed by Special Envoy Amb. Bruce S. Conception and the BAFA conducted a four-day forum under the 2nd phase of the European Union’s Arms Trade Treaty Outreach Project (EU ATT OP II) entitled “Working Together for Combatting Illicit Trafficking in Arms” in Taguig City, from Jun 25 to 28, the OSETC said in a statement on Sunday. “Discussed were the coordination mechanisms of licensing, enforcement, and investigation with respect to the control of international arms’ transfers; and outreach efforts for the industry and capacity-building opportunities in relation to the implementation by Philippines of the ATT,” it added. — Arjay L. Balinbin

CoA report: NBI fails to acquire 7 of 8 state-of-the-art equipment; P8.7 million worth of honoraria released by PSC irregular

THE COMMISSION on Audit (CoA) flagged the National Bureau of Investigation (NBI) for acquiring only one of the eight planned state-of-the-art equipment and facilities as of December 2018, contrary to Republic Act 108671, the National Bureau of Investigation Reorganization and Modernization Act. “Of the eight acquisition of state-of-the-art investigative and intelligence equipment and establishment of forensic and scientific laboratories programmed in CY 2018, using the funds retained from clearance and other fees collected by NBI amounting to P244,500,000, only one, or 12.5 percent was accomplished as of December 31, 2018,” reported the state auditors. CoA said the failure of NBI to fast track the procurement process “delayed the much needed modernization of the Bureau.” CoA also called out the agency for its inability to fully utilize a P58.22 million budget for various projects, wherein only P33.4 million was used. Further, the state auditors noted that this P33.4 million was actually spent for health care services for 1,474 regular employees of the bureau. “Although the acquisition of health care service for the regular employees was authorized in RA 108671, the payment for it amounting to P32,646,629.40 was not in accordance with any of the purposes of the released NCA’s (notice of cash allocation,” said CoA.

SPORTS COMMISSION
CoA also called out the Philippine Sports Commission (PSC) for the irregular grant of honoraria totaling P8.7 million. “The grant of honoraria to PSC officials and employees and other personnel involved in sports programs/activities was inconsistent with BC (Budget Circular) 2007-1 since those undertakings could not be considered a special project as defined therein. The implementation of programs/activities geared towards the promotion and development of sports is inherent to PSC’s mandate, thus deemed a regular and permanent function,” said the report. Further, CoA noted that PSC granted honoraria, amounting to P516,300, to lecturers and resource persons without the necessary supporting documents. CoA also pointed out that 17 individuals, who were not designated in the PSC, were included in the payroll for honoraria but “the nature of their participation in the programs/events could not be ascertained due to lack of information provided in the transaction documents.” The report said, “[The management should] provide information as to the name of office/s of the individuals connected with PSC who received honorarium and the nature of their participation/involvement in the PSC’s programs events.” — Vince Angelo C. Ferreras

Central bank expects inflation to have resumed slowdown this month

HEADLINE INFLATION this month — to be reported on July 5 — likely slowed from a year ago and from May amid lower rice prices, an electricity rate reduction and a stronger peso that made imports cheaper, the Bangko Sentral ng Pilipinas (BSP) Department of Economic Research said in an e-mail on Friday.

“The BSP Department of Economic Research projects June 2019 inflation to settle within the range of 2.2-3.0%,” according to the e-mail, explaining that “[l]ower rice and domestic oil prices, along with downward adjustment in electricity rates and recent peso appreciation, are seen to temper inflation pressure during the month.”

The lower end of BSP’s estimate would be the slowest in more than two-and-a-half years or since November 2016’s 2.1%, while the ceiling would match April’s pace and would be the slowest since December 2017’s 2.9%.

The ceiling of BSP’s June estimate compares to May’s 3.2%, which had interrupted six straight months of slowdown from a nine-year-high 6.7% in September and October 2018, and the 5.2% clocked in June last year.

BSP’s June estimate would take first-half inflation to a 3.32%-3.45% range against the central bank’s downward-adjusted 2.7% forecast average and 2-4% target band for 2019. Actual headline inflation averaged 3.6% in the five months to May.

Philippine Statistics Authority (PSA) data show average retail price of well-milled rice fell by 2.3%, 2.7% and 2.7% year-on-year in the first to third weeks of June, respectively, to P43.02 per kilogram (/kg) as of the third week, while average retail price of regular milled rice dropped by 4.1%, 4.4% and 4.7% annually in the first to third weeks, respectively, to P38.68/kg as of the third week.

The Energy department, however, reported that year-to-date adjustments of fuel pump prices amounted to a net increase of P3.70 per liter for gasoline, P2.75/liter for diesel and P1.10/liter for kerosene as of June 26.

Meanwhile, the overall rate of Manila Electric Co. — the country’s biggest electricity distributor — dropped for the second straight month by P0.1948 per kilowatt hour (/kWh) to P10.0918/kWh in June from P10.2866/kWh in May.

Rice accounts for 9.59% of the theoretical basket of goods used by a typical household that is the basis for computing year-on-year overall price changes, while liquid fuel, solid fuel, gasoline and electricity contribute 0.13%, 1.22%, 1.28% and 4.8%, respectively.

Supporting importers, the peso finished P51.24 against the dollar on Friday, appreciating by 3.9% from June 2018’s P53.34 close, while the local currency’s weighted average amounted to P51.233 to the greenback, 4.1% stronger than the year-ago P53.404, according to data from the Bankers Association of the Philippines. — with inputs from Mark T. Amoguis

MWSS fines Maynilad

THE METROPOLITAN Waterworks and Sewerage System (MWSS) is penalizing Maynilad Water Services, Inc. for failure to comply with service obligations as stipulated in its concession agreement with the government.

In a statement on Friday, the government’s water regulator said it is ordering Metro Manila’s west zone concessionaire to pay P2,500 in rebate per household for customers affected by a water interruption in Barangay Captain Albert Aguilar in Las Piñas City last month.

“The primary reason is Maynilad’s failure to provide 24/7 water services to its customers who were severely affected by the water service interruption last May 2019 in portions of Brgy. Captain Albert Aguilar in Las Piñas City,” MWSS said.

It noted the affected customers were “deprived” of water service, as the minimum water pressure recorded in the area for more than 15 days was at seven pounds per square inch (psi), versus the normal water pressure of between 30-80 psi.

The concession agreement between the MWSS and Maynilad says failure to meet a service obligation within 15 days in cases where the failure could adversely affect public health or welfare is subject to penalties.

The penalty on Maynilad will be implemented through rebates in monthly water bills or statements of account of customers “until fully expended.”

“The MWSS Regulatory Office (MWSS-RO) will facilitate the implementation of the rebate to all affected customers as soon as possible and would like to assure the public that it is doing everything in its power to protect their interest,” the MWSS said.

In a statement sent via mobile phone message, Maynilad confirmed it has already received the notice on service obligation failure from the MWSS-RO. “[W]e will coordinate with our regulators to determine the rationale behind their decision and how they arrived at their computations. We will set our next course of action based on this discussion,” it said.

Last Apr. 30, the MWSS issued a notice of service obligation failure to Maynilad, citing service interruptions and low water pressure in parts of its concession area. The letter then did not include a fine imposition yet.

Five days before that, the MWSS fined Metro Manila’s east zone concessionaire Manila Water Company, Inc. P1.134 billion — consisting of a P534.05-million penalty and a P600-million fund for the development of a new water supply source — for water shortage across Metro Manila in March. The fine on the Ayala-led water firm will be distributed to consumers in the form of a deduction in monthly water bills.

Metro Pacific Investments Corp., which had a 52.8% stake in Maynilad as of end-2018, saw its share price slashed by 0.21% to end at P4.80 apiece on Friday, while DMCI Holdings, Inc., which has a 25% stake, saw its price drop 1.53% to P10.30 each.

Metro Pacific is one of three Philippine units of Hong Kong-based First Pacific Company Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez

Nomura sees ‘marginal improvement’ in Q2 GDP growth

OVERALL ECONOMIC GROWTH likely picked up slightly this quarter from January-March but was still a slowdown from a year ago due to improved but still-muted government spending, Euben Paracuelles, executive director and senior economist for Southeast Asia at Nomura Securities Company Ltd’s Research Division, said in a June 28 note e-mailed to journalists on Friday.

Mr. Paracuelles said he expected second-quarter gross domestic product (GDP) growth — which the Philippine Statistics Authority will report on Aug. 8 hours ahead of the central bank’s fifth policy review for the year — to clock in at 5.8%.

Actual GDP growth clocked in at 6.2% in April-June last year.

“The government’s monthly fiscal surpluses in April and May support our Q2 GDP growth forecast of 5.8%, which is only a marginal improvement from the growth of 5.6% in Q1,” he wrote in Nomura Asia Insights: Double-barreled policy easing in H2.

Latest Treasury data show year-to-date fiscal deficit down by 99.4% to P809 million as of May from P138.7 billion in 2018’s first five months, as revenues grew 10.7% to P1.314 trillion from P1.186 trillion, while the government spent 0.8% less at P1.315 trillion from P1.325 trillion due to the four-month delay in the 2019 national budget, which President Rodrigo R. Duterte slashed by P95.3 billion to P3.662 trillion when he signed it into law in mid-April to take out irregular allocations.

“This implies GDP growth in H1 is tracking well below the government’s full year 6-7% target, which has already been scaled down from 7-8% earlier,” Mr. Paracuelles said.

“Our Q2 forecast takes into account government spending and total investment growth that are still moderating, but by less than in Q1,” he explained, adding that “[t]here are also additional headwinds from escalating US-China trade tensions, which are hurting exports across the region.”

JUNE INFLATION EXPECTED AT 2.9%
He also said that he expects headline inflation to fall “below the mid-point of BSP’s 2-4% target at around 2.9% y-o-y in June from 3.2% in May” and the year-ago 5.2%.

The outlook compares to the central bank’s 2.7% forecast average and 2-4% target range for full-year 2019.

“This not only reflects a lower crude oil price average so far this month but also likely slightly lower core inflation, which is consistent with moderating GDP growth in Q1,” Mr. Paracuelles explained.

He added that he expects the overall rise in prices of widely used goods to slow further to 2.1% next quarter on the back of falling rice retail prices, after the government liberalized importation, as well as base effects from price increases in the wake of tax hikes in January last year.

OUTLOOK
For the rest of the year, Mr. Paracuelles said, state macro policy “will become much more expansionary.”

“Fiscal spending, in our view, has been relatively slow to recover after the budget was delayed and approved only by mid-April. This will likely prompt the authorities to intensify implementation of ‘catch-up’ spending plans, although these will only likely be more successful well into H2,” he wrote.

Mr. Paracuelles also noted that local governments, whose new elective officials assume office only on Tuesday after winning the May 13 mid-term elections, are in the midst of a leadership transition. “Partly because of this transition, capital outlays tend to be slower in the two months after elections before picking up again,” he said.

“The initially slow rebound in fiscal disbursements should also provide a justification for BSP to resume policy rate cuts shortly, focusing on supporting growth further while the inflation outlook remains benign, as we expect headline CPI inflation to fall well below the mid-point of the 2-4% target in coming months.”

After hiking benchmark interest rates by 25 basis points in March, the central bank left those rates unchanged on June 20 as a “prudent pause for the time being” to allow it to assess the impact of the preceding policy rate cut and the 200bp reserve requirement ratio cuts being implemented in tranches from May to July.

The central bank raised policy interest rates by a total of 175 bp last year in the face of multi-year-high inflation rates that peaked at a nine-year-high 6.7% in September and October.

Duterte plans ‘mini’ Cabinet revamp affecting five secretaries

PRESIDENT Rodrigo R. Duterte on Thursday evening announced an impending “mini revamp” in his Cabinet that will see three department secretaries removed, but his spokesman sought to downplay the statement the following day.

“Gusto ko ng medyo — hindi naman major — mini revamp, mini lang, mini revamp (I am looking at a mini revamp, not a major one),” Mr. Duterte told reporters on the sidelines of the oath-taking of Senator-elect Christopher Lawrence T. Go on Thursday evening.

“Ang mga position? Magpili pa ako kung sinong patayin ko sa kanila (Which positions will be affected? I will pick who among them will die),” he added.

“Sa Cabinet members lima; limang positions na gusto kong mabakante… (Five among Cabinet members, five positions I want to open up).”

Presidential Spokesperson Salvador S. Panelo, however, clarified that the President later withdrew his statement, saying in a televised interview. “Iyon ang huling sinabi niya. Pero nung paalis na siya, sinabi niya, wala (That is what he said. But when he was about to leave, he said there will be no revamp).”

“Binawi niya. Di antayin na lang natin. Absolute discretion niya naman ‘yun eh (He took back his announcement. Let us just wait for the official announcement since Cabinet movements are subject to his absolute discretion).”

FARM CHIEF TO MINDANAO PLANNING BODY
Mr. Duterte, on Thursday evening also confirmed the offer of Agriculture Secretary Emmanuel F. Piñol to resign, and said he was considering transfering him to the Mindanao Development Authority (MinDA) to lead coordination of the national government and the Bangsamoro Autonomous Region in Muslim Mindanao.

But the President said he has yet to accept Mr. Piñol’s offer to resign.

“I cannot see anybody in the horizon except Piñol… was born in Mindanao and grew up there. He is a farmer, then a governor,” the President said in a media interview at the Malacañan Palace.

Saying that the Mindanao [Development] Authority position is a Cabinet position,” Mr. Duterte said: “Sabi ko, ‘pumunta ka na lang doon, tulungan mo na lang ako’. (I told him to transfer there and help me). Get them started… hurry up, hurry them up so that they would have the first regular organized government that they have long wished for.”

Mr. Piñol, for his part, said he will continue work on advocacies in the Department of Agriculture, pending finality of his MinDA reassignment.

“I am a soldier of the President and I believe that a warrior does not choose the battlefields nor the battle. It is not the size of the battlefield or the odds that matters but it is how you fight to win the battle,” Mr. Piñol said in a social media post, Friday.

“Until such time, the President decides on where to field me to wage another battle, I will continue my advocacies and work in the Department of Agriculture.” — Charmaine A. Tadalan

Impeach me, I’ll jail you — Duterte dares foes to test him

PRESIDENT Rodrigo R. Duterte has threatened opponents with prison if they try to impeach him, the latest in what a top United Nations official and an Asian lawmakers’ group this week called a pattern of persecution and assaults on free speech.

Mr. Duterte vented his anger late on Thursday amid intense media scrutiny and accusations that he is siding with China over a June 9 sinking of a Filipino fishing boat by a Chinese vessel, which happened inside Manila’s Exclusive Economic Zone (EEZ).

The maverick leader has echoed Beijing’s line that it was an accident, not an intentional ramming, and shrugged off the presence of Chinese fishermen inside the Philippine EEZ, saying he would allow it out of friendship.

Some high-profile critics, among them a top judge and a former foreign minister, have called that a breach of the constitution, or worthy of his impeachment.

“Me? Will be impeached? I will jail them all,” Duterte told reporters. “Try to do it and I will do it. Son of a bitch.”

He added: “I am challenging you to do it. You really want to force my hand into it? Okay. You sons of bitches, do it. Yes. File it.”

A report on Tuesday by the ASEAN Parliamentarians for Human Rights chided the Duterte administration for what it said were threats and aggressive rhetoric and trumped-up criminal charges against opponents that amounted to “deliberate effort to muzzle critics and weaken checks and balances.”

UN High Commissioner for Human Rights Michelle Bachelet on Monday said there was a “very real risk of violence” for Filipinos who speak out, noting threats were publicly made by state officials.

While Mr. Duterte’s popularity and mandate have been bolstered by a recent midterm election, the sinking incident has put the domestic spotlight on cracks that are appearing in his much-trumpeted foreign policy of non-confrontation with China in return for economic incentives.

Some analysts say China’s offers of high-interest infrastructure loans and promises of massive investments have won Duterte’s acquiescence, but with much of that yet to materialise and China further militarising its artificial islands and strengthening its fishing militia, Duterte risks looking like he is being duped.

Asked on Friday about threats to jail opponents, presidential spokesman Salvador S. Panelo said Duterte was merely upset that people could not see he had the country’s interests at heart.

“He cannot understand why people are against his policy,” Mr. Panelo told reporters.

JUSTICE CHIEF EXPLAINS
On Friday, Justice Secretary Menardo I. Guevarra said anyone can file an impeachment complaint against the President but noted that its proceedings is different from regular courts.

“Anyone is free to file an impeachment complaint against the President. But remember that unlike an ordinary action in court, impeachment is not a strictly legal proceeding,” Mr. Guevarra said in a mobile phone message.

He added that there are a lot of factors to be considered in impeachment proceedings. “It involves a whole gamut of political, economic, and other considerations. In the end the question is, did the president act against the general interest of the entire Filipino nation,” he said.

In his Friday media briefing, Mr. Panelo said: “How can a President be scared of impeachment?”

“An impeachment is a number’s game. Eh super majority nga ‘yung sa Kongreso. Baka sa Committee on Justice eh wala na kaagad ‘yun (We command a super majority in Congress, that an impeachment complaint will end in the Committee on Justice level),” Mr. Panelo said. — Reuters with Vann Marlo M. Villegas and Charmaine A. Tadalan

Palace says using 2016 Hague ruling as a bargaining chip with Beijing

MALACAÑANG on Friday asserted the July 2016 Hague ruling against China’s encompassing claims to much of the South China Sea serves as a “bargaining leverage” against China amid issues surrounding the Reed Bank incident.

Asked if the arbitral ruling is indeed useless, Presidential Spokesperson Salvador S. Panelo said in a televised interview, Friday, “Hindi rin. (It is not) You know why? Kasi nagagamit natin eh… ‘Hoy, amin iyan sabi ng arbitral ruling, kaya nandito kami’. (We are using it, telling Beijing: ‘Hey, the arbitral ruling says we have a right to resources in that disputed area, that is why we are there’.”

“Meron ka ngayong bargaining leverage. Kung wala yun, wala kang ibibigay na ‘anong basis niyo bakit kayo nandito? (We now have a bargaining leverage. If it weren’t for that ruling, we cannot justify our presence in the area.)”

At the same time, “[n]ag-uusap na nga bilang magkakaibigan, (We are talking as friends), so what we cannot get from the arbitral ruling through force or enforcement, we can get through friendly negotiations.”

This stemmed from the June 9 sinking of a Philippine fishing boat by a Chinese vessel which left 22 Filipino fishermen abandoned at sea, before they were rescued by Vietnamese counterparts.

WRIT OF KALIKASAN
Meanwhile, Friday also saw the Office of the Solicitor General (OSG) asking the Supreme Court (SC) to inhibit Senior Associate Justice Antonio T. Carpio from participating in the Writ of Kalikasan petition seeking the protection and preservation of three shoals in the West Philippine Sea.

In a press release, the OSG said it filed the motion to inhibit Mr. Carpio from the case due to his “personal bias and manifest partiality.”

“It is interesting that even before the OSG filed its motion for inhibition, Justice Carpio already told the media that he will not inhibit in this case. This puts the OSG in a bind. Our motion will be an exercise in futility if the issue of his inhibition will be solely left for him to decide. It should be the Supreme Court, as a collegial body, which should decide on our motion,” Solicitor-General Jose C. Calida said.

The OSG said the grounds for Mr. Carpio’s inhibition are his active participation in the South China Sea (SCS) arbitral proceedings and “his continuing public pronouncements against the actions taken by the government in relation to the July 2016 arbitral award that ruled against China’s encompassing claim to much of the South China Sea.

The OSG also said Mr. Carpio’s “mere appearance” as a Philippine representative in the arbitral proceedings is sufficient ground for his inhibition from the petition.

“Justice Carpio’s participation before the South China Sea Arbitral Tribunal and knowledge of the facts and issues therein, coupled with his personal pronouncements and issuances leads to the impression he has already reached a conclusion and prejudged this case, even before the petitioners can present their case,” Mr. Calida said.

The OSG also noted that under the New Code of Judicial Conduct promulgated by the SC, a judge who is unable to decide on a case impartially should be disqualified.

The OSG said in its motion that Mr. Carpio has shown “penchant for projecting a foreign policy regardless of its alignment with the policies of the current administration” due to his public statements on the arbitral award.

“In the constitutional order of our government, the President has always been the chief architect of foreign policy. The Supreme Court has recognized this in several cases. A sitting member of the Court cannot supplant the authority of the President to direct our foreign policy,” Mr. Calida said.

The SC is set to hold oral arguments on July 5 on the petition for Writ of Kalikasan filed by a group of fisherfolk last April seeking the protection and rehabilitation of Scarborough Shoal (also known as Panatag Shoal), Ayungin Shoal and Panganiban Reef (also known as Mischief Reef).

The petitioners asked the SC to direct the government to enforce laws protecting the environment in the disputed seas, noting the Executive’s weak response to China’s activities there that are believed to be destroying corals and putting endangered sea life at risk.

Mr. Carpio on Tuesday also branded as unconstitutional Mr. Duterte’s statement that he was allowing Chinese fishermen to fish within the Philippines exclusive economic zone. — Charmaine A. Tadalan and Vann Marlo M. Villegas

Jollibee targets 50% revenue share from foreign stores in 5-7 years

JFC Holdings Corp., which controls the Jollibee fast food chain, said it hopes to achieve a 50/50 mix between foreign and domestic store revenue in five to seven years, noting that growth rates are stronger at its overseas locations.

“Overall, if you look at our financial statements in many years, interestingly, the changes in foreign exchange rate has benefitted us and one of the reasons is precisely because we are diversified,” JFC Chief Financial Officer Ysmael V. Baysa told reporters Friday on the sidelines of the company’s annual shareholder meeting in Ortigas district.

At present, revenue derived from foreign stores account for 20% of the company’s overall revenue.

“That’s why our goal is to make increase it to 50/50. I think, because foreign business is growing faster than local, I think it will take to five to seven years to do that,” Mr. Baysa told reporters.

Asked about the prospects for the domestic business, the company said imported inputs account for only 20% of its raw materials.

“The effect of the exchange rate over the long term is quite manageable,” Mr. Baysa added.

JFC Chairman Tony Tan Caktiong will focus on aggressively expanding stores in current markets, and is open to mergers and acquisitions in the Philippines, the US and China.

“What we’re looking at now is how to start expanding the existing market, how do we add stores in the current markets so that is our focus now,” Mr. Tan Caktiong said.

“We’re always on the lookout, really focused on the three markets, the Philippines, China and US. We’re still looking at the US and China for potential M&A. We’re looking at some other brands that can add value,” Mr. Tan Caktiong added.

In China, particularly, JFC sees huge potential and is not worried about possible restrictions on the repatriation of profits.

“The potential in China is so huge that we can just keep on investing. We don’t worry about repatriation. I think over the next many years will still be on expansion mode,” Mr. Tan Caktiong said.

Mr. Baysa said the business keeps growing even without opening stores,”so the conecpt of growing a business is in a way less dependent on stores because of delivery.”

JFC operates the Dunkin’ Donuts franchise in China.

The company is also looking to have 150 stores in the US and 100 stores in Canada over the next five years. It also has 50 stores planned for Europe, 25 of which will be located in the UK.

The company said it will open at least 500 new stores this year, equally split between the Philippines and overseas locations. Most of the new international stores will be in Vietnam at 120, while 40 will open in North America.

JFC allotted P17.2 billion for capital expenditure to support the store expansion and renovation of old stores.

Store count at the end of the first quarter was 4,543 across various brands such as Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, and Pho24.

JFC’s net income attributable to the parent fell 14.7% to P1.54 billion in the first quarter, amid a 14.1% increase in revenue to P40.35 billion.

The company said its recently-acquired US burger chain Smashburger weighed down on the consolidation result, as did slower same-store sales growth due to high inflation.

Mr. Tan Caktiong said Smashburger’s performance can improved in a year, based on the group’s experience with past acquisitions.

“The product is really really good, so what we need to do is update all the standards which is being started. Standard, meaning the store… Being managed,” Mr. Tan Caktion said.

Meanwhile, the company expects lower inflation in the first quarter to lead to a recovery in Philippine consumers’ purchasing power in the second half. — Janina C. Lim

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