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BSP assessing BPI glitch

THE BANGKO Sentral ng Pilipinas is still assessing the glitch at the Ayala-led bank. — BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) is still assessing the technical glitch encountered by the Bank of the Philippine Islands (BPI) as it upgraded its systems earlier this month.

“We’re still assessing whether kung hindi ba talaga sila naging (they were not) careful about it when they tried to do the migration,” BSP Deputy Governor Chuchi G. Fonacier told reporters in Makati on Tuesday.

“We’re still reviewing what’s the situation. Were there backup plans or can we say mayroon ba talagang (was there really) neglect or what? So iyon ang tinitignan natin (That’s what we are looking at),” Ms. Fonacier said.

BPI underwent a major systems upgrade from April 5-7 — making changes to more than 41,000 programs, lines of codes, and copy books — and advised clients that its services, such as online banking, mobile app, automated teller machines and cash accept machines, as well as debit and prepaid Card services, would be unavailable during that time.

However, the unavailability of BPI’s mobile and online channels extended days beyond the stipulated time for some of its customers.

In a speech last week at the bank’s annual stockholders’ meeting, BPI President and Chief Executive Officer Cezar P. Consing said: “Clearly, this was a challenging exercise and we regret the inconvenience that this caused.”

“Unfortunately, a process that in a test environment took less than a day to complete and had been scheduled for over a full weekend spilled over to the following week, inconveniencing many of our clients,” Mr. Consing explained.

BPI reported a net income of P6.72 billion in the first quarter of 2019, up by 7.6% from the P6.25 billion posted in the same period of the previous year.

RHI says still keen on selling Batangas sugar mill

By Arra B. Francia, Senior Reporter

ROXAS Holdings, Inc. (RHI) is negotiating with local firms for the sale of its Batangas sugar mill, after its deal with Gokongwei-led Universal Robina Corp. (URC) fell through due to regulatory restrictions.

RHI Chief Finance Officer Celso T. Dimarucut said Tuesday that three companies have expressed interest in purchasing the assets of Central Azucarera Don Pedro, Inc. (CADPI) in Nasugbu, Batangas.

“Right now there are some ongoing discussions and due diligence…Hopefully we will be able to do something within the year, before our fiscal year ends in September,” Mr. Dimarucut told reporters after RHI’s annual shareholders’ meeting in Makati yesterday.

Mr. Dimarucut said the companies are not players in the sugar industry, but have products that are very close that would allow them to expand their portfolio.

Tycoon Lucio Tan, Sr.’s Tanduay Distillers, Inc. disclosed in March that it is conducting due diligence for CADPI, since this will give it access to its own source of molasses — a necessary raw material for manufacturing alcohol.

RHI expects the due diligence process to be completed within two months, after which the transaction will have to be presented to the Philippine Competition Commission (PCC).

CADPI’s assets are valued at P6.5 billion, according to RHI’s annual report. Mr. Dimarucut, however, noted that URC’s purchase price was higher than the book value.

URC failed to get the PCC’s approval for the acquisition of CADPI last February, as the competition watchdog cited how the transaction will result to a monopoly that may be harmful to sugarcane farmers.

Proceeds from the sale of the Batangas facility will be used to help bring down RHI’s debt of about P11 billion, since the company has incurred several loans to support its production.

“Whatever proceeds we get from that sale we will use that to bring down the debt. But there will still be some residual amount that is needed for the regular working capital,” Mr. Dimarucut explained.

Sought for an outlook for the year, Mr. Dimarucut said they expect to incur a net loss. RHI booked a net loss of P197 million from October to December 2018, the first quarter of its fiscal year 2019. This came amid a 127% increase in revenues to P2.27 billion.

RHI President and Chief Executive Officer Hubert D. Tubio echoed the same sentiment, saying he expects sugar production to be less than the three million 50-kilogram bags it posted in crop year 2018.

“It’s a continuation of what we see from last year because of the effects of weather condition. I think it’s more particularly pronounced in the area of Nasugbu, Batangas where I think most of the fields are not irrigated, so it’s really heavily dependent on rains,” Mr. Tubio explained.

Mr. Tubio cited how the whole district of Batangas has generally seen a drop in production last year to 1.15 million tons from 2.3 million tons before. Of this, CADPI milled about 813,000 tons — the lowest in 31 years.

“That is the biggest challenge not only for us, but also for the planters and the government…Our hope is the government will help us, particularly in the area of irrigation, where the area of Nasugbu is wanting,” Mr. Tubio said.

At Amboise, Leonardo’s last years paint a picture of Franco-Italian harmony

AMBOISE, Loire Valley, France — Commemorations for Leonardo da Vinci’s 500th anniversary begin this week in Amboise, in the Loire Valley, with France and Italy setting aside recent tensions to honor the memory of the Renaissance genius in the town where he spent his final years.

In 1516, aged 64, Leonardo da Vinci left Italy to enter the service of King Francis I of France. Many of his masterpieces — St. John the Baptist, the Mona Lisa — followed him and were sold to the French monarch, forming a legacy now exhibited at the Louvre museum in Paris.

Amid diplomatic tensions between Rome and Paris, his legacy has become contentious, with Italy’s Culture undersecretary Lucia Borgonzoni in November telling Italian media she wanted to renegotiate the planned lending of his works to the Louvre for an anniversary exhibition, because “the French cannot have it all.”

It is unclear, for example, whether the iconic drawing of the Vitruvian Man will eventually leave Venice to join the Louvre for the display.

But on Thursday, in Amboise, French President Emmanuel Macron and Italian counterpart Sergio Mattarella will seek to ease strains between the two normally close allies that have grown more acute since mid-2018, mostly over migration policy.

They will gather at Da Vinci’s tomb, a modest grave in a chapel of Amboise castle containing his presumed remains, and will pay a visit to his house nearby, the Clos Luce, where he died on May 2, 1519.

“It’s an extremely solemn gesture, showing that the two countries have this shared memory, this figure, a culture that binds our two countries,” the director of Amboise castle Jean-Louis Sureau told Reuters in an interview.

Da Vinci’s arrival in France was no accident, because King Francis I wanted him to join the Court to participate in its international influence and refinement, Mr. Sureau said.

“Leonardo da Vinci was unquestionably born in Italy, he’s Florentine, but beyond that, he led a career at the service of several powerful men. This career, and his life, end here, in France,” Mr. Sureau added.

During his three years in France, Da Vinci focused on perfecting unfinished masterpieces, drawing and scientific writing, but also took part in organizing lavish parties for the King of France.

“This universal man, who, to be clear, was first and foremost Italian, can also be seen as the symbol of a European culture, built beyond traditional divisions,” Catherine Simon Marion, delegate general of the Clos Luce, said. — Reuters

Central bank to release ESG guidelines

THE BANGKO SENTRAL ng Pilipinas (BSP) is looking to release this June guidelines incorporating environmental, social, and governance (ESG) finance in banks’ operations.

“They should already incorporate the assessment or impact where some environmental risks would materialize. It would be applicable to all banks, but we are cognizant of the business model. It will largely dependent on the business model and the complexity of size of the operations,” BSP Deputy Governor Chuchi G. Fonacier told reporters in Makati on Tuesday.

“We’re trying to finalize it within May for exposure to the industry…and hopefully by June we can already have it,” Ms. Fonacier said.

Ms. Fonacier said that the guidelines will come out as a circular, but will not be specific rules, as there is no “one-size-fits-all” ESG model for the banks.

“One-size-fits-all is not the approach… High level principles lang siya. Hindi siya sobrang detalyado (It will only contain high level principles. It won’t be very detailed),” Ms. Fonacier said.

In her speech, Ms. Fonacier said the earthquakes that hit the country last week should serve as a wake up call to develop sustainable finance.

“We should prepare for threats or risks that may happen any time especially those that have prolonged significant impact such as those resulting from environmental degradation, climate change or social risks,” Ms. Fonacier said.

She noted that a mandatory approach to sustainable finance may result in short-lived success and even derail progress in embedding ESG in the finance industry as some banks may choose to simply pay penalties “rather than get exposed to uncertain risks” — which is a challenge the BSP is already facing in its mandated lending programs.

“Thus, the BSP believes that the best regulatory approach remains to be one that is “enabling.” An enabling regulatory environment provides high level principles rather than mandatory requirements and considers the business model as well as the size, structure, and complexity of operations of a bank in defining expectations on sustainable finance,” Ms. Fonacier said.

The official said the BSP’s existing regulations on corporate and risk governance will serve as a foundation for its ESG guidelines.

“The proposed policy expects banks to conduct scenario analysis to assess their vulnerabilities over several ESG scenarios and incorporate such results in their capital planning exercises. Banks shall be given flexibility with respect to managing environmental and social risk. We are looking at initially adopting a “comply or explain” approach as we transition to higher expectations in this respect,” she explained. — RJNI

SEC approves rules on social, sustainability bonds

THE Securities and Exchange Commission (SEC) has greenlit the guidelines for the issuance of social and sustainability bonds in line with regional standards.

The commission en banc approved the Guidelines on the Issuance of Social Bonds under the Association of Southeast Asian Nations (ASEAN) Social Bond Standards (SBS), or SEC Memorandum Circular No. 9, during its April 25 meeting.

The ASEAN SBS was developed by the ASEAN Capital Markets Forum, which aims to provide an alternative funding route for companies whose projects provide a social benefit. On the sidelines of the Sustainable Finance Dialogue Forum in Makati Tuesday, SEC Commissioner Ephyro Luis B. Amatong told reporters examples of projects with social benefit include those providing “medical assistance, education, low-cost housing, water.”

On the other hand, projects involved in alcohol, gambling, tobacco, and weaponry may not be used for the issuance of social bonds, as per Section 11 of the memorandum.

The project must also specify a target population, including those living below the poverty line, marginalized populations, vulnerable groups, the unemployed, people with disabilities, migrants or displaced persons, the undereducated, and underserved, according to Section 12 of the approved guidelines.

The social bonds must be issued by an ASEAN-member country. A non-ASEAN issuer may also register provided that the project where the funds will be used is located in an ASEAN country.

The same en banc session saw the approval of the Guidelines on the Issuance of Sustainability Bonds Under the ASEAN Sustainability Bond Standards (SUS), or SEC Memorandum Circular no. 8.

Mr. Amatong explained that sustainability bonds are like a combination of green bonds and social bonds, so that a project with social benefits may also be environmentally friendly.

“So when you have an energy-efficient, low-cost housing project, potentially that is sustainable use of proceeds,” Mr. Amatong cited as an example.

As such, issuers of sustainability bonds must be compliant with both the ASEAN SBS and ASEAN Green Bond Standards (GBS). The SEC approved the guidelines for the latter back in August 2018.

Projects allowed under the ASEAN GBS include those for renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of living natural resources and land use, terrestrial and aquatic biodiversity conservation, clean transportation, and climate change adaptation, among others.

Following their issuance, Mr. Amatong said the bonds will be listed on the Philippine Dealing & Exchange Corp., similar to regular bonds.

Companies who issue social and sustainability bonds must also provide an annual report of the offering’s use of proceeds, to ensure that the money raised were actually used for socially beneficial projects.

“The benefit is just attracting investor diversification. If you diversify enough, the pricing becomes tighter… So the more people who want to loan to you, that will make the cost of borrowing lower,” Mr. Amatong said. — Arra B. Francia

Museo de Intramuros opens May 2

THE public can explore and learn about Philippine culture and history by visiting Museo de Intramuros in Manila which opens to the public starting May 2. Admission is free. Managed by the Intramuros Administration (IA), Museo de Intramuros is located in two reconstructions inside the walled city: the San Ignacio Church and the attached Mission House of the Society of Jesus. The museum was designed to house the period art collections of IA that includes ecclesiastical art, furniture, vestments, textiles, and other artifacts. Museo de Intramuros’ official opening, which took place on April 29, was among the highlights of the Intramuros Administration’s 40th anniversary as an institution. The current exhibition presents the story of the evangelization of the Philippines from the perspective of the Filipinos. It explores changes in the “Filipino” psyche as colonization introduced a new religion and culture to the natives. Curated by Dr. Esperanza Gatbonton, Gino Gonzales, Dr. Cecilia dela Paz, Santiago Pilar and Martin Tinio, the exhibition has six components: The Immaculate Conception, The Religious Order, The Patronato Real and the establishment of Parishes, Religious Colonial Paintings, The establishment of a parish and sacred vessels, and The Indio Response.

SSS loan releases increase

THE Social Security System (SSS) saw a pickup in loan releases for retiree pensioners following the relaxed rules approved by the Social Security Commission.

In a statement sent to reporters on Tuesday, the state pension fund said it approved P150.34 million in loans under its Pension Loan Program (PLP) in March, up 53.8% from P97.748 million in loans disbursed to 4,081 retirees in February.

Last month, SSS allowed more retirees to avail of the PLP by relaxing minimum pension requirements.

The new rules allow retiree pensioners with regular and posted monthly pension of at least one month to avail of the lending facility, from the previous requirement of having at least six months of regular pension.

The new guidelines for PLP applications also allow the use of other government-issued identification cards such as Driver’s License, National Bureau of Investigation Clearance, Passport and Voter’s ID among others.

As of end-March, SSS pension loan releases reached P788.664 million to more than 32,872 retiree pensioners.

SSS Bacolod branch approved the most number of applications at 2,240, while the Diliman branch released the highest amount of loans worth P48.08 million.

The SSS launched the loan program on Sept. 3 to respond to growing demand from senior citizens for cheap loans — particularly for emergency medical expenses — and steer them away from loan sharks and other informal lenders. — KANV

Tokhang and talkbacks

By Maria Jovita Zarate

Theater Review
Tao Po!
Written by Maynard Manansala
Directed by Ed Lacson
Presented by Let’s Organize for Democracy and Integrity (LODI)
April 16
PETA Theater Center

TWO EVENTS transpired on April 16 at the PETA Theater Center in Quezon City. The first was the performance of Mae Paner (a.k.a. Juana Change) of a four-part monodrama written by Maynard Manansala and directed by Ed Lacson. The second was the talkback — a forum that followed after the curtain call where the play’s lone actor, the playwright, informants, and sources of inspiration went up the stage to answer queries from the audience.

FOUR VIGNETTES, ONE ACTOR
The phrase “tao po,” as anthropologist Michael L. Tan clarified during the talkback, was an expression that arose during the Spanish times, when a visitor knocked on someone’s door and remarked “tao po” to affirm that he or she is a tao (person), not the aswang or maligno (monsters in Philippine folklore) who occassionally roams the pueblo. “Tao po” is both an assurance that a conversation can be pursued, or a mutually beneficial transaction can happen once a person has been allowed entrance into the dwelling.

In Mr. Manansala’s play on the extrajudicial killings, generally called tokhang, the popular greeting at the doorstep is subverted to create a host of meanings, both good and evil, betrayal and redemption. The title could extend to mean “tao po kami, hindi baboy na kinakatay na lamang…” (we are people, not pigs that are just slaughtered) or “tao po” could be the treacherous words of masked men who knock then stomp on a shanty door to send a volley of gunfire. “Tao po, tao po kami” (We are people) is also that anguished plea from the poor to reiterate their humanity.

Activist and actress Mae Paner takes on four characters, shifting gender, class, and social positions in every role. The first vignette tackled a photojournalist talking to a group of students about the craft of taking pictures in a time of tokhang, where the camera can be an instrument of truth and an accessory to untruth. In the next vignette, Ms. Paner is Nanay Rosing, a zumba instructor stalked by the ghosts of husband and son who were dragged out of their home by the police and shot repeatedly.

In the third vignette, the actress takes on the role of a man, a Davao City policeman who moonlights as a hired killer of drug users and pushers. The last monologue was about a young girl who roams around a public cemetery’s tokhang wall, that unusually tall pile of freshly cemented niches where casualities of Duterte’s drug war are shoved and then quickly covered with a slab of concrete.

The best of the four monologues is arguably the photojournalist’s — taut and lean, with a narrative arc that moved up and down very subtly as he argued his case against the drug war and the tabloid industry with restraint and quiet dignity. Nanay Rosing’s story contrasted the ludic pleasures of dancing to workout music and the incarcerating grip of the memory of husband and son as they were pulled by the ankles and shot. In Duterte’s drug war, no one is ever whole again, trauma leaves wounds that never mend, and yet each of these four characters are all in the process of transforming. The killer’s conscience is not unscathed: he knows the gun is trained on small time users, runners, and pushers, but as a member of the police force he is also summoned to protect the big fish. The orphan’s hopes are like the flickering lights of the candles she offers at those makeshift tombs.

THEATER TALKBACK
Not everyone stays for the talkback sessions. Some find themselves vexed at the patronizing manner in which talkbacks are moderated. Talkbacks can be redundant or can oversimplify the viewing experience.

This talkback though had different tack, largely because of the underhanded style of actor and cultural activist, Joel Saracho, who was tasked to moderate.

From the audience the participants ranged from a law student from the De La Salle University who implored “Please, please, tell us how we can help” to a PUP student who spoke from the theater’s balcony and with a dispassionate inflection: “Nakaka-relate ako kasi tatlong kamag-anak ko na ang natokhang” (I can relate because three of my relatives were killed extrajudiciously) and you knew his stolid disposition was a way of hiding his rage. Screenwriter Bibeth Orteza reiterated the play’s potential to speak to many publics, and goaded the creative team to translate the play into Ilonggo, Waray, Ilokano, and all the major languages of the country. Sunita Mukhi of the College of St. Benilde’s was visibly moved and spoke with force and conviction “Look, everyone, this is the redemptive capacity of the arts.”

But the most powerful voices were the sources and inspiration of the stories featured in this monodrama. Ms. Paner introduced them as Nanay Rosing and the young girl as Lovely. You would think some questions can be very naïve but the responses generate a world of meanings.

A member of the audience took to the microphone and asked “How do feel, Nanay, when you see your story performed?” Nanay Rosing’s quivering voice belied the strength she has forged deep inside and says “Masaya ako nandito kayong lahat, masaya ako hindi pala ako nag-iisa, masaya ako na nakilala ko sila Mae…” (I am happy that you are all here, I am happy to know that I am not alone, I am happy to have met Mae and company) And then Ms. Paner turned to Lovely, the inspiration for the vignette built around the tokhang cemetery wall. She tells the audience that the young girl tries her best to attend most performances of Tao Po! even if she has to borrow money for transportation because it helps her build a sense of connection with people and organizations who care about the plight of children orphaned by the drug war.

Seated at the far end, slightly slouched and head bowed down, photojournalist Raffy Lerma carried with him a kind of diffidence so when someone from the audience stood up and asked “Can we hear from Raffy Lerma?” one would think he would not oblige, and please, could we leave him to his silence because, fair enough, his pictures have spoken.

But no, because Mr. Lerma had a lot to say and, yes, the first vignette is his story, and his angers and frustration he did not hide when he talked about the system that underpins photojournalism in the Philippines. Mr. Lerma admitted to being numbed by the sight of dead bodies, as much as five in a night crawl, but he had to call his own attention so he would not turn insensitive to the idea that he makes his living from the misery of others. For Mr. Lerma, the answers went beyond the photograph and the camera, as he revealed: “Humanap ako ng koneksyon. Nandoon sa pamilya ng mga namatayan, binisita ko sila, sa lamay, pagkatapos ng lamay. Pag pumupunta nga ako sa kanila at nakikilala nila ako, at binabati na ‘Kuya Raffy,’ natutuwa ako…” (I search for a connection. With the family of the dead, I visited them at the wake, after the wake. When I came to them and they learned who I was, their greeting me “elder brother Raffy, I am glad…”)

Both events — the performance and the talkback — carried equal weight in this theater of trauma and testimony. Each buoyed the other in the ferocious currents of Duterte’s drug war. This is a rare moment in the theater scene — when the talkback is more than an appendage to the performance. In the heat of the discussion, the talkbalk became muscle and sinew to the bone of the performance. It transformed the individual experience of viewing to a community conversation for constructing and sharing meaning and making these stories seared into our memory. After all, theater has always been about community.

As the talkback wound down, it felt like the theater had transformed the audience to become its own society.

Tao Po! continues to go on a national tour. On May 8, 4 p.m., it will be staged in La Salle Lipa Centrum, Lipa City, Batangas. On May 10, it will have two performances, at 10 a.m. and 3 p.m., at the University of the Cordilleras in Baguio City. Parties who are interested to sponsor the play may contact Mae Paner through maepaner@gmail.com.

The author writes about the performing arts scene in the country today. She is a member of the jury of Gawad Buhay, the country’s first industry awards body for the performing arts and teaches at the University of the Philippines Open University.

Super consortium’s amended NAIA proposal under review

THE Department of Transportation (DoTr) said it is now reviewing the new draft agreement submitted by the super consortium seeking to rehabilitate the Ninoy Aquino International Airport (NAIA) Monday.

Transportation Undersecretary for Planning Ruben S. Reinoso, Jr. said that after the assessment of the DoTr, the agreement may be turned over to the National Economic and Development Authority (NEDA) for further evaluation.

“We’ll review compliance with (existing) agreements and if ok, endorse to NEDA,” he said in a text message Tuesday, referring to the NAIA consortium’s submitted draft agreement late Monday.

Mr. Reinoso said the DoTr and the consortium agreed on provisions of the draft agreement last Friday. The government earlier set an April 30 deadline for the deal.

The draft agreement includes amended provisions “pertaining to acts of LGU (local government units), judiciary & legislative,” Mr. Reinoso said.

Once the proposal is approved by the NEDA Investment Coordination Committee and the NEDA Board, a Swiss challenge would be conducted.

Under the Swiss challenge, other companies will be invited to submit competing proposals, which the consortium will then have the chance to match.

The consortium initially said it wants to start the competitive process by mid-2019 and kick off the NAIA rehabilitation later this year.

In a chance interview Monday, Transportation Secretary Arthur P. Tugade said the DoTr wants the concession agreement for the NAIA rehabilitation to be patterned after the concession deal on the Clark International Airport.

“We are now comparing the template with Clark with their final proposal. If it is in parallel, then it’s a go. Okay na ’yun [That’s okay],” he told reporters.

Mr. Tugade earlier imposed the April 30 deadline, threatening the consortium that he may drop the proposal because he found the negotiations to be taking too long. The negotiations started after the group was given original proponent status in September.

The NAIA consortium is seeking to rehabilitate and expand NAIA over a 15-year period, with a concession price of P102 billion. It said this will increase the capacity of the Manila gateway from the current 30.5 million annual passengers to 47 million in two years and to 65 million in four years.

The consortium is composed of seven of the country’s top conglomerates, namely: Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc.; and Metro Pacific Investments Corp. — Denise A. Valdez

How PSEi member stocks performed — April 30, 2019

Here’s a quick glance at how PSEi stocks fared on Tuesday, April 30, 2019.

 

Unions push for passage of bill banning ‘endo’ before Congress adjourns

LABOR LEADERS renewed their call to legislators and lawmakers to finally pass the Security of Tenure (SoT) Bill before the Congress adjourns late next month.

On Tuesday — the eve of Labor Day — the heads of the biggest unions jointly asked the legislators to pass the law that will ensure the security of tenure of workers nationwide.

The unions included Sentro ng mga Nagkakaisa at Progresibong Manggagawa (Sentro), the Federation of Free Workers (FFW), the Trade Union Congress of the Philippines (TUCP), Partido Manggagawa (PM), and Kilusang Mayo Uno (KMU).

The SoT Bill is currently in the amendment stage at the Senate. It was certified as urgent last year by President Rodrigo R. Duterte.

The bill hopes to give workers a clear pathway to job security by doing away with practices like “endo,” the termination of employment before the sixth month, which denies workers the benefits and protections of permanent employee status.

“We still have an opportunity from May 20 to June 7. Nine days! That’s why we’re asking the senators to issue the amendments because we are running out of time. It has been going on since the 12th Congress. It’s already the 17th Congress… we are really pushing for this passage. Hopefully when (Congress) adjourns on May 20, amendments will already be submitted,” TUCP President Raymond C. Mendoza told reporters in a briefing Tuesday.

Nagkaisa Labor Coalition (NAGKAISA) Chairperson Sonny G. Matula said legislators should raise penalties for employers who are found to be engaged in labor-only contracting, which is prohibited by the Labor Code of the Philippines.

According to Section 288 of the Labor Code, violators “shall be punished with a fine of not less than One Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos (P10,000.00).”

Ang penalty ay napakababa… hanggang ngayon hindi maka-comply ang mga employer sa security of tenure ay dahil napakababa ang penalty niya (The penalty is too low… until now, employers don’t comply because the penalty is low),” Mr. Matula said.

KMU chairperson Elmer C. Labog said: “This is unacceptable. We cannot legitimize labor-only contractors who do nothing but recruit and deploy workers… They connive with principal business owners to deprive workers of security of tenure and other basic labor rights.”

On May 1, 2018, Mr. Duterte signed Executive Order 51 which purported to crack down on illegal forms of contractualization. Mr. Labog said a law must be in place to institutionalize the changes.

“It will go down as a legacy of failure and one of the greatest unfulfilled promises of President Rodrigo Duterte,” the KMU chairperson said. — Gillian M. Cortez

Makabayan bloc asks SC to rule on legality of Meralco deposits

THE Makabayan bloc filed a petition before the Supreme Court (SC), questioning the legality of the bill deposits collected by Manila Electric Co. (Meralco) from its consumers.

In an 36-page petition, Makabayan bloc, led by Senate candidate Neri J. Colmenares, said it asked the SC to stop Meralco from collecting the bill deposit, saying the provision is not allowed under the Electric Power Industry Reform Act (EPIRA) and the Meralco franchise.

The bloc said that under EPIRA, distribution utilities are only entitled to impose distribution wheeling charges and connection fees as approved by the Energy Regulation Commission (ERC). It also said that a distribution utility has the obligation to supply power in the “least-cost manner” to its subscribers subject to collection of retail rates.

“It (bill deposit) is not a charge for any electric service, but rather an amount posted by consumers for future or anticipated electric service that is not paid. By its nature as mere guarantee, it does not form part of retail rate, and as such, is not an allowed exaction under the EPIRA,” it said.

It also asked the court to order ERC to implement the refund of the bill deposits to the consumers and direct the Commission on Audit to conduct audit of all funds collected from bill deposits.

The Magna Carta for Residential Electricity Consumers promulgated by ERC in 2004 provided that consumers are obliged to pay bill deposit which shall be equivalent to the estimated billing for one month when they apply for connection.

Bill deposits are to be refunded within one month after termination of service as long as all bills have been paid, while customers who paid electric bills on or before the due date for three years can demand refunds prior to the termination of service, according to the Magna Carta.

Makabayan said the bill deposits of Meralco amounted to P29 billion, based on the power company’s audited 2018 financial statements.

The Makabayan bloc also said that imposition of bill deposit is inconsistent with promotion of consumer interests under the Magna Carta.

“[T]he ERC’s authorisation of Bill Deposit in the Captive Market does not promote consumer interest; rather it only promotes the interest of DUs (distribution utility) and ensures their profit, to the prejudice of consumers,” it said.

Citing findings of the Office of the Ombudsman, the bloc said the bill deposit collected by Meralco has been “commingled” and used to finance its capital and operating costs.

“The captive consumers are being used as unwitting investors of Meralco but without the corresponding benefits and advantages. This is clearly disadvantageous to the consumers’ interest,” it said.

“Having commingled the Bill Deposit with its general funds and used for other purposes, Meralco endangers the right to refund the Bill Deposit by the consumers,” it added.

It also said that the interest rate to the bill deposit is “unfair and clearly disadvantageous to the consumers’ interest,” noting the Ombudsman findings.

The Ombudsman has said that interest on bill deposits was reduced from 10% to 0.50% in 2011 to 2012 and reached 0.25% in 2014 to 2016. However, it said that the company, despite acknowledging low interest rates in bill deposits “which appear discriminatory” on the part of the consumers, allegedly failed to adopt measures to advance the interests of its consumers by providing reasonable returns on the deposits.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly-owned by 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. — Vann Marlo M. Villegas