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The 11th Foreign Investment Negative List and its possible impact on online businesses

Odds are that in the past week, you liked a friend’s post on Facebook, bought food from Food Panda, and booked a ride with Grab. I, myself, have done those things in the past couple of hours. This is indeed the age of E-Commerce and online businesses. You look at the Forbes list and at the top you’ll find Mark Zuckerberg, Jack Ma, and Jeff Bezos, who, by means of the internet, created billion-dollar internet-based businesses. These pervasive online businesses also affect more traditional business models. For instance, a giant retailer like Toys “R” Us has announced plans to close because of online stores like Amazon. Travel sites like Expedia have rendered travel agents unnecessary. Traditional cable and satellite TV services are fast becoming obsolete as people now choose to stream similar contents using sites like Netflix.
The Philippines is likewise cashing in on the trend with emerging websites like Lazada, Zalora, and OLX. However, at present, there are restrictions in place when it comes to online based businesses registered in this country and I believe the proposed 11th Foreign Investment Negative List (FINL) will play a big role in the future of Internet businesses.
By way of background, last Oct. 2, 2018, the Business Inquirer published an article saying that the 11th FINL is now up for President Rodrigo Duterte’s signature. Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia said the Philippines will now allow up to 100 percent foreign ownership for internet-based businesses. He further stated that the proposed 11th FINL, which contains a draft executive order, will no longer consider internet businesses as mass media.
online business
As it stands, the 1987 Constitution under Article XVI Section 11(1) restricts foreign ownership over mass media saying that it should be 100% Filipino owned. Moreover, Republic Act (R.A.) No. 7042, otherwise known as the Foreign Investments Act of 1991, and the Tenth Regular Foreign Investment Negative List provide that except for recording, no foreign equity is allowed in mass media. When the 1987 Constitution was passed, the Internet was not yet in existence and traditional mass media was limited to print and broadcasting. However, subsequent legislations and opinions of the Securities and Exchange Commission (SEC) now consider the internet and mobile technology as platforms for mass media.
R.A. No. 7934, otherwise known as The Consumer Act of the Philippines, defines “mass media” as any means or methods used to convey advertising messages to the public such as television, radio, magazines, cinema, billboards, posters, streamers, hand bills, leaflets, mails and the like. Likewise, under R.A. No. 9211, otherwise known as the Tobacco Regulation Act of 2003, mass media is defined as any medium of communication designed to reach a mass of people. For this purpose, mass media includes print media such as newspapers and magazines, broadcast media such as radio and television, and electronic media such as the internet. These descriptions of mass media covering Internet platforms were reiterated by the Department of Justice in a 1986 opinion.
Several SEC opinions have now considered the internet and mobile technology as platforms for mass media and held that Internet-based platforms used for selling products are forms of mass media since the internet is used as a digital platform to broadcast information to the public. Relaxing this theory to allow foreign participation may change the internet-based business landscape in the Philippines.
Online based businesses would be ideal in the Philippines as nearly 60 million netizens have access to the internet. Many Filipinos spend a lot of their time on social media and online shopping. There are also more than 50 million Facebook users in the country. If the 11th FINL is passed, e-commerce giants like Amazon, Alibaba, or eBay can expand their business in the Philippines and bring in more investments. Conversely, Filipinos will also have more options on what website or online businesses to avail of to suit their needs. Whether this is good or bad through nationalistic eyes is a whole other topic and as I ponder on this question, I will order a burger from Food Panda.
This article is for general information and for educational purposes only. It is not offered as and does not constitute legal advice or legal opinion.
 
Agustin P. Geraldez, Jr. is an associate of the Corporate and Special Projects Department (CSPD) of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
apgeraldez@accralaw.com

Realpolitik

It seems that only President Donald Trump has a clear-cut — or, at least, unfuzzy — attitude towards the slaughter and reported dismemberment of Jamal Khashoggi, a columnist of Washington Post,allegedly on orders of Saudi Arabian crown prince Mohammed bin Salman. Kashoggi was last seen alive entering the Saudi embassy in Istanbul and, according to the CIA, was killed, cut up and disposed of on orders, or at least, with the full knowledge, of the crown prince.
Trump thinks that friendly relations with the Saudis, which translate into billions of dollars for America in arms purchases and investments, are more important to US interests than the grisly killing of a US resident who wasn’t an American citizen, anyway.
In fact, it is debatable whether US citizenship would have mattered to Trump, when weighed against the “benefits” that come with being a close ally of the Saudis, not to mention the repercussions of upsetting the cozy relationship.
American media and leaders on Capitol Hill, both Democrats and Republicans, have expressed grave concern over the killing and Trump’s nonchalant attitude, stressing that it besmirches the reputation of the US as a champion of justice and human rights.
Pragmatic observers say, Trump is simply practicing realpolitik. They also candidly add that if the Kashoggi killing were not so high profile and such fertile political and media fodder,American officialdom would have turned a blind eye to it.
The fact is that the US and other Western governments have routinely ignored Saudi Arabia’s human rights abuses for decades. But the Kashoggi killing leaves them caught between maintaining their moral ascendancy and protecting their economic, political and military interests. Trump, on the other hand, has no such problem, being unprincipled and amoral.
In other words, Trump is the perfect practitioner of realpolitik, a German term which is defined as “politics or diplomacy based primarily on considerations of given circumstances and factors, rather than explicit ideological notions or moral and ethical premises.”
A less esoteric — that is, moregarapalor brazen — illustration of realpolitik was reportedly expressed by a former Philippine secretary of foreign affairs, as follows: “If rape is inevitable, just lie back and enjoy it.”
This view of realpolitik appears to be the attitude of President Rodrigo Duterte in his relations with China, specifically in connection with the South China and the issue of Philippine territorial claims over parts of the area.
The recent state visit to Manila of Chinese President Xi Jinping is said to have resulted in an agreement to jointly exploit the wealth of oil and gas resources in what is considered Philippine territory. Along with that are expectations of expanded trade, direct investments, development loans and technical assistance.
Duterte has repeatedly pointed out the futility of going to war with China or even protesting China’s intrusion into territory claimed by the Philippines. He has admitted helplessness in the face of China’s encroachment, and has decided to apply realpolitik.

Xi Jinping and Rodrigo Duterte
President Rodrigo R. Duterte with Chinese President Xi Jinping. — PHILIPPINE STAR/KRIZJOHN ROSALES

In other words, allow the virtual rape and just “lie back and enjoy it.” And benefit from it. Thus, the joint exploration of natural resources and the loans and economic deals.
Some critics have warned that China’s designs go beyond joint exploration of resources. Former national security adviser Norberto Gonzales has even warned against a Chinese invasion of the Philippines.
In a news report, Gonzales “cited the building of Chinese defense bases right inside Philippine territory” and suggested that the Philippines “should prepare to be invaded by China.”
“Within hours,” Gonzales was quoted, “the Chinese can destroy most of the country’s defense facilities and probably some of our cities.”
Urging the government to “devise a contingency plan against a Chinese attack,” Gonzales added that “China does not have a history of invading other countries, but it is not averse to using military might to settle territorial conflicts.”
In this regard, Gonzales may want to consult Wikipedia to check out China’s history of invading neighboring countries like Korea and Vietnam, or he might want to consult his friends in the CIA to be reassured that the US will not allow that to happen to protect American interests.
At any rate, Duterte’s apologists and economic managers have pointed out the harsh reality that the Philippines does not have the financial and technological capability to exploit the natural resources and build the infrastructure required for national development.
“We will still need foreign investments, anyway,” they rationalize, “whether from the US or other countries. So why not China?”
Yes, indeed. Why not China? Didn’t China just sign a 99-year lease with Sri Lanka for control of the latter’s Hambatota Port, in order to pay off a loan? That was the only way the poor Sri Lankans could settle the IOU.
Are Duterte and his economic geniuses not concerned that they could be signing an IOU with the Philippines as collateral? Oh, but then, Duterte and these geniuses may be long dead when China decides to collect.
That’s realpolitik for you.
I had my introduction to realpolitik in my first ad agency job. I had refused to give in to a “request” of our biggest client that his girlfriend be made a star of a radio show that I was writing and directing. I protested that it was a matter of principle for me. I did not think that the client’s girlfriend was in the same category as the regular stars of the show.
My boss patiently explained that, while it was ideal for me to see things as either black or white, I needed to realize that in business, there was such a color as gray.
 
Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.
gregmacabenta@hotmail.com

Universal health care bill hurdles bicameral panel

By Camille A. Aguinaldo
Reporter
THE UNIVERSAL health care (UHC) bill, which provides automatic inclusion of all Filipinos in the government’s National Health Insurance Program, hurdled the bicameral conference committee level on Tuesday.
If signed into law, the bill will allow all Filipinos to be enrolled under the Philippine Health Insurance Corp. (PhilHealth) as direct or indirect contributors. Under the proposed measure, the PhilHealth ID is no longer needed for beneficiaries to avail themselves of such health benefits.
In a statement, Senator Joseph Victor G. Ejercito, chair of the Senate committee on health, said a provision was approved which provides the funding of the universal health care program from the incremental sin tax collections and 50% of the national government share from the Philippine Amusement and Gaming Corporation (PAGCor).
Other sources of funding include the 40% Charity fund, net of documentary stamp tax payment, mandatory contributions of the Philippine Charity Sweepstakes Office (PCSO), premium contributions of PhilHealth members, annual appropriations of the Department of Health (DoH), and the national government subsidy to PhilHealth under the General Appropriations Act (GAA).
Under the bill, PhilHealth’s primary care benefit package will now include medical examinations, medicines for basic conditions, and laboratory tests.
Patients are also given the freedom to choose his or her primary health care provider, whether public or private.
The bicameral panel also agreed to provide additional benefits for paying members as incentive for the increase in premium rate.
“The additional benefits will incentivize those who pay higher premiums and will encourage those who are voluntarily paying to keep paying,” Senate President Pro Tempore Ralph G. Recto, principal author of the bill, said in a statement.
The proposed measure also provides a gradual premium rate increase of .5% a year and gradual adjustment of income ceiling by P10,000 a year.
An income retention provision was also introduced in the bill, which will create a special health fund sourced from PhilHealth payments for local hospitals. The fund will be used to improve the health facilities and health service delivery of the local government units (LGUs).
The bill also creates a Health Technology Assessment Council (HTAC), which is tasked to study and make recommendations to the DoH and PhilHealth on developing policies in health insurance.
It also requires graduates of health-related courses with government scholarships to work for the government for three years.
Mr. Ejercito said he hoped the measure will be signed by President Rodrigo R. Duterte by Christmas and will be implemented next year so the benefits will be felt right away.
“We want to change that mentality that many Filipinos who are sick haven’t consulted with a doctor because of fear of the expenses,” he told reporters.

NICA proposes DICT power to shut down ‘harmful’ social media

By Vince Angelo C. Ferreras
Reporter
THE NATIONAL Intelligence Coordinating Council (NICA) on Tuesday proposed that the Department of Information and Communications Technology (DICT) be given authority to shut down social media accounts that may be deemed threats to public safety.
“We want the DICT to be empowered and to have authority to be able to shut down social media accounts like in Facebook, Twitter and other similar mechanisms,” said lawyer Roberton G. Lapuz of the NICA at a Senate hearing on Tuesday.
Committee on Public Order and Dangerous Drugs chair Senator Panfilo M. Lacson said the proposal will be included in the consolidated bill that would amend Republic Act 9372 or the Human Security Act of 2007.
“Definitely. In other countries as mentioned by one of the resource persons, the minister of transportation, for example, in Australia is within his mandate to shut down any account he deems (may add) peril (when it comes to) terrorism,” Mr. Lacson told reporters in an interview.
Mr. Lapuz for his part said, “We are getting our inspiration from many other jurisdiction like in India. They have this authority to shut down Facebook or ban other social media application that can be inimical to national interests.”
Lawyer Marwil N. Llasos, anti-terrorism program coordinator of the Institute of International Legal Studies also backed the proposal.
“Anything that is harmful or hurtful to the comfort, public safety, public order can be regulated by the State. The social media has been used as a means of radicalization already and the State has to preserve itself. We don’t have to wait for something to happen,” Mr. Llasos told the hearing.
He added, “I think there is clear and present danger of a substantive evil that the State has, not only a right, but a duty to protect the inhabitants. We don’t want another Marawi [Siege] to happen. I think this will be sustained even by appropriate judicial authorities when a case is filed to challenge this provision.”
Last October, top security officials proposed an extended period to 30 days on detention without warrant of arrest against suspected terrorists, from the present three days as prescribed under the Human Security Act and the Revised Penal Code.

Comelec short of funds for teacher training

THE COMMISSION on Elections (Comelec) said that it will need a bigger budget for the training teachers who will be assisting in the midterm elections next year.
During a hearing on Tuesday of the Joint Congressional Committee on Automated Elections regarding the status of the Comelec’s preparations for the national and local elections (NLE) in May, Comelec Chairman Sheriff M. Abas said they will try their best to stretch the allocation given to them by the Department of Budget and Management (DBM) for training members of the Board of Election Inspectors (BEIs).
“Dinidiskarte namin ang training kasi ang hiningi namin sa DBM ay P5 billion pero ang binigay nasa P1.7 billion lang (We’re strategizing the training because we asked the DBM for P5 billion, but we were given only P1.7 billion),” Mr. Abas said.
“We still need P3 billion (more).”
The proposed 2019 budget for the Comelec is P13 billion.
Mr. Abas said they are looking to deploy at least two BEIs per voting station and are expecting to train 255,000 people, including at least one technical support per station.
Comelec reported that there will be 85,000 precincts for the NLE.
In the meantime, Mr. Abas said they are employing various ways, such as the use of supplemental video, to educate BEIs since the training only comes every three years.
“Gumawa kami ng video at ‘yun ang magiging additional video d’un sa module para ‘yun ang ire-review ng teachers after the training (We made a video, additional to the module, that teachers can review after the training),” he said. — Gillian M. Cortez

15 Chinese nabbed for illegal online operations

THE NATIONAL Bureau of Investigation (NBI) arrested in two separate operations last week 15 Chinese nationals for illegal online activities.
Arrested last Nov. 22 in three condominium units in Manila were Pan Jianbei, Pan Taiyuan, Jie Lu, Shengbo Zhang, and Jian Lou Zhou.
The following day, the NBI nabbed another 10 in a residence in Angeles City, Pampanga. They were identified as Yu Shize, Lin Hai Yan, Li Jun Qin, Yu Wen Quian, Xiao Wen Lao, Cai Shui Rong, LinJingming, Ju Shi Lin, Qiu Zai Wei, and Xiao Jian Ze.
Those arrested in Manila were involved in online payment and banking transactions, and lottery game betting, while those in Pampanga were operating online gambling sites with administrative functions, fictitious We Chat account profiles and emails used to “entice male victims,” among others.
Those in Manila were charged for violation of Presidential Decree 1602 or Anti-Illegal Gambling Act in relation to Republic Act (RA) No. 10175 or Cybercrime Prevention Act, while those in Pampanga were charged for violation of the Anti-Gambling Act and RA No. 8484 or the act regulating the issuance and use of access devices in relation to the Cybercrime Prevention Act.
The NBI said all those arrested were holding tourist visas.
“This is the one were looking at na bago pumunta ‘yan dito (before they came here), they were already briefed there. They would come in as tourist but they would do their job dito (here) as part of online gambling,” the NBI said in a statement.
On Nov. 26, the Senate held an inquiry on the influx of Chinese workers in the Philippines. — Vann Marlo M. Villegas

Mayon, Kanlaon volcanoes under alert level 2

TWO of the most active volcanoes in the country — Mayon in Albay and Kanlaon in Negros — have been placed under alert level 2, which means a moderate level of unrest with volcanic earthquakes and emissions recorded. The Philippine Institute of Volcanology and Seismology (Phivolcs), in its Nov. 27 bulletins, warned that entry to the respective permanent danger zones (PDZ) of these two volcanoes are “strictly prohibited” and asked civil aviation authorities to advise pilots to avoid flying close to the summits “as airborne ash and ballistic fragments from sudden explosions and PDCs (pyroclastic density currents) may pose hazards to aircrafts.” For Mayon, Phivolcs said four volcanic earthquakes were recorded in the past 24 hours, two of which were related to phreatic eruptions that generated “grayish to grayish white ash plumes.” Mayon Kanlaon, meanwhile, had two volcanic earthquakes and “wispy to weak emission of white steam-laden plumes.”

Modern jeepneys begin plying Cebu City streets

AT least 40 modern jeepneys will start plying Cebu City’s roads today, Nov. 28, with two initial routes at a base fare of P8 for the first four kilometers (km) and an additional P1 for every succeeding km. The two routes are: Cebu City Hall-Asia Town I.T. Park via Robinsons Galleria Cebu-Cebu Business Park, and R. Duterte St.-Sykes via Happy Valley-Fuente Osmeña-Ramos St.-D. Jakosalem St.-Cebu Business Park. The Department of Transportation (DoTr)and the Land Transportation Franchising and Regulatory Board launched the jeepneys last Monday in partnership with Persano Corp.
BUS
Meanwhile, civil works for the city’s bus rapid transit (BRT) system is targeted to start by the second quarter next year, according to DoTr Assistant Secretary for Road Transport and Infrastructure Mark Richmund M. de Leon. He said he was scheduled to meet Monday night with the Technical Support Consultants (TSC) after they were mobilized last month. “I am meeting them to get details on how to fast-track the implementation of the project of the BRT and the intermodal and integrated solution for Metro Cebu,” Mr. de Leon said during the modern jeepney launch. He added that he would be asking the consultants to identify portions of the system that can be operated as soon as possible. — The Freeman

Cop, 2 others arrested for selling explosives to illegal miners

THE National Bureau of Investigation (NBI) has arrested three individuals, including a police officer, for illegally selling high explosives used by unlicensed miners in Mt. Diwalwal in Compostela Valley. The suspects were identified as Feliz P. Aleria and Mark A. Aleria, who were arrested in an entrapment operation in Tagum City, and Police Officer 2 Glenn O. Magalso, who was nabbed in a separate operation after constant calls to the two others asking for the proceeds of the explosives sale. Ferdinand M. Lavin, Forensic Investigation Service deputy director, said the explosives were also reportedly being sold to insurgent groups, including the New People’s Army and the Abu Sayyaf Group. “There is, I believe, an ongoing investigation being conducted… to further identify the other culprits in the wide-scale distribution and sale of explosives. Remember that these explosives were made available not only to miners… but we have information that this has reached the hands also of the insurgents,” he said. — Vann Marlo M. Villegas

24/7 Davao public library open by April 2019

A PUBLIC library in Davao City that will be open 24/7 is now under construction and is expected to be operational by April 2019. The P40-million Davao City Library and Information Center, which is being built from Trust Fund 2017 sources, is a collaboration between the Gawad Kalinga Community Development Foundation and the city government. It will be located along C. Bangoy Street, on the former Central 911 site across the Davao Light and Power Co. office. Vice-Mayor Bernard E. Alag said the four-storey building will replace the existing library currently housed at the third floor of the Sangguniang Panlungsod Building. Davao City Library head Pedrita M. Badar said the new library will have facilities for persons with disabilities. Gawad Kalinga Executive Director Jose Luis M. Oquiñena said the Davao project is one of the community libraries they have been building around the country. “So far, we have completed four, including one in Cebu and in Marawi,” Mr. Oquiñena said, adding that they are working on three more in Mindanao and two in the Visayas. Gawad Kalinga, which has recently partnered with the Big Bad Wolf Book Sale, is a recipient of part of the company’s book sale proceeds. Big Bad Wolf Book Sales turned over early this month P5 million for Gawad Kalinga’s community projects. — Carmencita A. Carillo

More than 50 petitions submitted for BARMM inclusion

THE Commission on Elections (Comelec) is now reviewing more than 50 petitions filed for inclusion in the Bangsomoro Autonomous Region in Mindanao (BARMM) and the approved list is targeted for release “within December,” according to Comelec Chairman Sheriff M. Abas. Hearings and presentation of evidence are ongoing, he said, after which the petitions will be raffled off to the Comelec commissioners for decision. The Bangsamoro Organic Law (BOL), which provides the setting up of the BARMM to replace the existing ARMM, will be subject to a referendum on Jan 21, 2019. Last month, the Comelec issued guidelines for areas contiguous to the territorial jurisdiction of BARMM that want to be part of the plebiscite. On the P857 million proposed budget for the plebiscite, Mr. Abas said they are scheduled to meet with the Senate next month for the final plenary on sourcing the fund. — Gillian M. Cortez

NHA chief takes over HUDCC sec-gen functions

By Arjay L. Balinbin
Reporter
MALACAÑANG on Tuesday announced that National Housing Authority (NHA) Acting General Manager Marcelino P. Escalada, Jr. has been designated Secretary-General of the Housing and Urban Development Coordinating Council (HUDCC).
In his memorandum to Mr. Escalada on Nov. 22, Executive Secretary Salvador C. Medialdea said: “In compliance with the instructions of the President, and to ensure the continuous and effective delivery of public service, you are hereby tasked to perform the functions of the Secretary-General of HUDCC, in addition to your current functions, effective immediately.”
President Rodrigo R. Duterte announced last week the firing of Falconi V. Millar, then HUDCC’s secretary-general.
Presidential Spokesperson Salvador S. Panelo said Mr. Millar was fired due to allegations of corruption.
For its part, the Task Force Bangon Marawi (TFBM) assured the public that the dismissal of Mr. Millar will “not distract” the ongoing reconstruction of Marawi City.
“We will not let this issue distract our continuing efforts to rehabilitate the city of Marawi. Debris management in the most affected area has been ongoing since the groundbreaking at the end of October, with the developer, FINMAT International Resources, Inc. already on board,” the task force said in its statement on Nov. 22.
“We are also preparing for the fourth Kawiyagan set for Nov. 29 — the livelihood convergence initiative of TFBM member agencies. The unwavering commitment of member agencies and stakeholders in this work continues to be the nucleus of government effort in bringing affected families and communities back on its feet and the battered city to normalcy.”

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