Home Blog Page 11255

Electricity competition, EPIRA, and WESM

Last Monday, I discussed business competition in general and the role of the Philippine Competition Commission (PCC).
The theme will be continued in this piece and it will discuss electricity competition in particular, especially after I was able to interview PCC Chairman Arsenio Balisacan, the CEO of the Philippine Electricity Market Corp. (PEMC) and Chairman of Transition Committee Oscar Ala and PEMC Spokesperson Atty. Nino Juan.
The Electric Power Industry Reform Act (EPIRA) of 2001 or RA 9136 has drastically liberalized the Philippines electricity sector with at least three important provisions: (1) deregulation and demonopolization of the power generation sector, (2) creation of the Wholesale Electricity Spot Market (WESM), and (3) liberalization and demonopolization of electricity distribution via Retail Competition and Open Access (RCOA).
With these and other provisions of EPIRA, the questions to ask, among others would be:

(1) Were there many private generation companies (gencos) that entered the market competing with each other?

(2) Were there many retail electricity suppliers (RES) that entered the market competing with each other?

(3) Were there many players, gencos and distributors, that use the WESM spot market competition? And more importantly, (4) Have electricity prices for consumers gone down?

The short answer is YES to all four questions.
For gencos for instance, before EPIRA, the National Power Corp. (Napocor) was the state-owned power generation monopoly, which also incurred huge losses and public debts for many years.
As of April 2018, there were 113 gencos in the Luzon-Visayas grid alone and all of them are WESM participants. Excluded are gencos in the Mindanao grid which is not part of WESM yet. Of these 113 gencos, five players have become more efficient and more moneyed than others, except perhaps the government-owned Power Sector Assets and Liabilities Management Corporation (PSALM), which still owns previous Napocor-owned power plants, mostly hydro facilities in Mindanao and the Malaya plant in Rizal.
For retail competition, the number of contestable customers (CCs) or those with monthly peak demand of 750 KW or higher and have the freedom to pick their own service providers — such as electric cooperatives (ECs) and private distribution utilities (DUs) — have increased. RCOA implementation however, has been issued an indefinite TRO by the Supreme Court in February 2017 and this resulted in a decline in number of CCs.
Electricity fig.1
Here are the numbers for comparative electricity prices that include two types of customers, the captive market (small consumers who must stay with their DUs or ECs) and contestable market (they can leave their DUs or ECs and choose their own RES).

Contestable customers are able to enjoy lower average prices, P6.91/kWh, than captive customers that pay an average price of P7.78/kWh.
So there you see it.
Despite the noise created by certain sectors that EPIRA and WESM are not working, which leads them to call for a return to the old scheme of nationalization, these data show that indeed electricity competition is working.
It is true that Philippine electricity prices in general remain higher than most of our neighbors in the region but that is because of other factors like (a) many taxes especially the high VAT of 12% applied in all parts of the electricity supply chain, from generation to transmission, distribution and supply, even the system loss; (b) many charges in our monthly electricity bill including universal charge, system loss charge, feed-in-tariff (FiT) for favored renewables.
The transition of PEMC, the market operator of WESM, into a real Independent Market Operator (IMO) as explicitly specified in EPIRA may soon become a reality.
As a result, there will be no more government energy agencies and bureaucracies at the PEMC Board. Good work, PEMC Transition Team.
 
Bienvenido S. Oplas, Jr. is President of Minimal Government Thinkers, a member-institute of Economic Freedom Network (EFN) Asia.
minimalgovernment@gmail.com.

All Kuwait on the Middle Eastern Front

No, this is not a new movie version of Erich Maria Remarque’s classic, All Quiet on the Western Front. It is an unsolicited suggestion for a movie on the dramatic rescue of abused overseas Filipino workers in Kuwait, in case the Department of Foreign Affairs wants to produce it and make a touchy diplomatic situation worse.
Of course, I’m being facetious.
For the record, I agree with Foreign Secretary Alan Peter Cayetano that the Philippine government is duty-bound and morally bound to rescue OFWs who desperately need help. No matter what Migrante or the Kuwaiti government says, in an emergency situation, emergency measures may have to be taken.
That having been said, I think that the diplomatic row resulting from the incident could have been minimized, if not completely avoided, if it had been handled more Kuwait-ly, to quote a punster — in other words, more discreetly, with no social media exposure.
Coming to the rescue of nationals in distress and mounting clandestine missions that have violated the laws of countries involved have been the theme of several Hollywood movies in recent years, among them, Seven Days at Entebbe, Zero Dark Thirty, and Argo.
The Entebbe film, which had a recent remake, was about hostages held at the airport in Idi Amin’s Uganda who were rescued by Israeli commandos. That truly deserved and got worldwide exposure, to the utter embarrassment of the Ugandan dictator and certified madman.
Zero Dark Thirty was about the intrusion of US special forces — SEAL Team Six — into Pakistani territory to assassinate al Qaeda’s Osama bin Laden. The US did not inform or seek permission from Pakistan, in spite of the obvious violation of that country’s territorial sovereignty, because of the highly secret nature of the mission and concerns that certain quarters in the Pakistani government were al Qaeda sympathizers.
However, at the risk of ruffling Pakistani diplomatic feathers, president Barack Obama decided to publicly announce the result of the mission because the world was eager to hear about Osama bin Laden’s extermination. Pakistan, naturally, protested and the US made a lame statement of contrition, but both countries appreciated the importance of maintaining good diplomatic relations in spite of the violation. Thus, after the usual noises, the issue was laid to rest.
Argo was about a CIA clandestine mission to extract six American diplomats from Tehran, following the seizure of the US embassy by Iranian students in 1979. Fifty-two other Americans were held hostage in the embassy for 444 days. The six diplomats had managed to avoid capture and had found refuge in the home of the Canadian ambassador. But they had to be spirited out of Iran as soon as possible.
CIA agent Tony Mendez, assigned to rescue the six, conceived a fantastic scheme that required setting up a phony film production company, ostensibly preparing to shoot a science fiction movie on location in Iran, and creating false identities for the Americans as Canadian film production personnel.
The caper succeeded. But the US made no announcement of the results and kept the operation secret for decades. It was only declassified in 1997 — 18 years later. Operation Argo was subsequently made into a movie starring and directed by Ben Affleck. The film won the Best Picture Oscar in 2013.
The mission was kept so secret that even the conferment of CIA’s highest award, the Intelligence Star, on Tony Mendez was also kept under wraps.
The rescue was also attributed to the Canadian government (which had to close down its embassy in Tehran). The US took no credit for it.
As can be seen, different circumstances required a different handling of the post-event narrative of the three daring missions. Operation Argo was kept a secret, in spite of having all the elements of an action-and-suspense-packed story because making it public would have endangered the lives of the 52 Americans being held hostage by the Iranians.
We wonder if it ever occurred to the DFA officials that they would put the thousands of OFWS in Kuwait at risk when they decided to tell the world about their own rescue operation. Couldn’t they have restrained themselves from posting their heroism on social media for the sake of the remaining OFWs?
We understand that there are some 5,000 OFWs who “lack proper documents,” as well as over a hundred thousand legal Pinoy workers in Kuwait. Who knows what the Kuwaiti employers and the Kuwaiti government itself may do to them as a result of the embarrassment they may have endured (even if deserved), as a result of the social media posting going viral.
It was bad enough (even if necessary) that Kuwaiti law was violated, but posting the video on social media for the world to see was like rubbing salt on a wound.
While we should appreciate the heroic efforts of Ambassador Renato Villa, Philippine envoy to Kuwait, and his staff to save our fellow Pinoys, and while we should encourage the continued militancy of the Department of Foreign Affairs and their overseas posts to ensure the welfare of the OFWs, we believe that something can be learned from Operation Argo.
On a trip to Bern, Switzerland, back in 2004, I learned about similarly heroic efforts of Filipina-Europeans to aid OFWs, mostly women, who were being abused by their employers. I was shown a video entitled, Breaking the Silence, about how Filipina domestics had been rescued from the homes of abusive foreign diplomats. The video was produced by Annie Misa Hefti, a Filipina-Swiss and one of the leaders of Babaylan, the Filipino Women’s Network in Europe. As a result, I invited Annie to present the video at the 3rd Global Filipino Networking Convention held in Cebu in early 2005.
Because the incidents all happened in Switzerland, no risks for other OFWs were involved. And making the abuses widely known was a necessity.
I also met Filomenita “Nitnit” Mongaya Hoegsholm, one of the leaders of Babaylan Denmark. She and I have been in touch of late concerning the disturbing plight of Filipina au pairs in Denmark. On a forthcoming trip to Copenhagen, I am arranging to meet with the Babaylan group to discuss this and to write about it.
I’m sure there are many stories of our countrymen and Philippine diplomats doing much to protect our distressed Filipinos overseas. These tales need to be told.
But, in some instances, prudence is the better part of valor and discretion is preferable to public acclaim, even if genuine heroism is displayed by those concerned.
I think the Kuwaiti rescue was one of those instances.
For the sake of those left behind, it would have been best to have remained Kuwait — uh, I mean, quiet — on the Middle Eastern Front.
 
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

Much EndO About Nothing

German-American socialist editor and author, Oscar Ameringer, once said: “Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other.” This is, indeed, a tough balancing act if at all possible. President Rodrigo R. Duterte found this to be so, at least with respect to the issue of “contractualization.”
During the 2016 election campaign, he promised, as were the other candidates to be fair, to put an end to the Endo or the practice of engaging employees on contractual basis, thus, avoiding the onset of regularization. Towards this end, his administration has issued DoLE Department Order No. 174. Just recently on May 1 (Labor Day) and in a dramatic fashion, he signed the much-anticipated Executive Order No. 51 (EO 51) and, the tough guy as he is, warned firms involved in labor-only contracting that “their days were numbered.” Malacañang immediately claimed that this is the fulfilment of the President’s campaign promise to end the endo. But is this really the case? Or, as Shakespeare said, is it just a case of much ado about nothing?
Let me count the ways.
The EO expressly prohibits illegal contracting. It says: “contracting or subcontracting when undertaken to circumvent the worker’s right to security of tenure, self-organization and collective bargaining, and peaceful concerted activities xxx, is hereby strictly prohibited.” Pro-labor? Not so fast. Illegal contracting has always been illegal since Adam. The Labor Code says labor-only contracting is illegal. Certainly, the EO did not make it so. So nothing much here. It was a fuss over nothing.
Next, the EO provides that “in case the compliance order involves a directive to regularize workers, the employment of the latter shall not be terminated pending appeal of such order except for just or authorized cause.” Again, this is not new. This is already in a previous DoLE Department Order on the conduct of inspection, i.e. DO 183.
If at all, the EO even made this as pro-management. Under DO 183, there is no qualification, at least not explicitly — i.e. pending appeal, the employees shall not be terminated. Full stop.
Under the EO, the employees can be separated if there is just or authorized cause. So the employees can be separated due to redundancy pending appeal? Hell yes, and it’s a management prerogative. So much about security of tenure.
The EO further provides that the “Secretary of Labor and Employment may, by appropriate issuances, in consultation with the National Tripartite Industrial Peace Council xxx, declare activities which may be contracted out.” This is substantially the same as Article 106 of the Labor Code, only that it expressly states that the Secretary of Labor and NTIPC can choose which activities can be contracted out.
But this could swing either way. The Secretary’s determination may or may not be in favor of labor. And the question is, can the Secretary go against the Labor Code and case law? The Supreme Court has time and again ruled that even core activities can be contracted out. Ditto with the Labor Code. So, playing it safe, the Secretary can just say he will act in accordance with the law and jurisprudence and we are back to square one.
At bottom, therefore, the EO is just much EndO about nothing. In trying to balance the interests of labor and management, the EO comes up short. It is neither here nor there. Even the President himself said that the EO has “no teeth” (Duterte admits his executive order on ‘endo’ has no bite — Inquirer.Net, May 4, 2018).
The President, prior to the issuance of the EO, had said that it is not within his power to prohibit absolutely contracting out, let alone legitimate. It is up to the Congress to do that. He should have stuck to such position. He should not have issued the EO, May 1 or not.
Arguably, he has a point because Article 106 of the Labor Code only gives the DoLE Secretary the power to regulate contracting out per se. Of course, our friends from the labor sector do not agree. They never agree anyway.
But I agree. Let the Congress do it. The House of Representatives has approved House Bill 6908 and the battle is now in the Senate. Let’s see where this Endo saga, with politicians steering, will lead us. The more important question is, will Congress end Endo? I want to give Congress the benefit of the doubt even as I am again and again reminded of Ameringer: “Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other.”
The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.
 
Neptali B. Salvanera is a Partner and Monitor at the Labor and Employment Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
(632) 830-8000
nbsalvanera@accralaw.com.

Peso edges up ahead of BSP meet

THE PESO inched higher against the dollar on Tuesday ahead of the local monetary policy meeting as well as inflation data in the US.
The local currency ended at P51.85 versus the greenback yesterday, two centavos stronger than the P51.87-per-dollar finish on Monday.
The peso traded within range, opening the session slightly stronger at P51.86 against the greenback. It dropped to as low as P51.945, while its best showing stood at P51.83 versus the dollar.
Dollars traded soared to $727 million from the $585 million logged the previous session.
Traders interviewed yesterday said the peso-dollar pair “traded fairly quiet” and moved within a tight range.
“Although there was volume, there’s no direction as to where the next direction for the dollar-peso will be,” a trader said in a phone interview.
The trader added: “We’re still waiting for the BSP (Bangko Sentral ng Pilipinas) meeting on Thursday.”
Investors are on a wait-and-see stance ahead of the monetary policy meeting of the BSP tomorrow.
In a BusinessWorld poll, nine out of 11 economists said the monetary authority will likely hike benchmark rates at Thursday’s meeting as inflation hit multi-year highs in the previous months.
Inflation has been accelerating steadily this year. It picked up to a five-year high of 4.5% last month from the 4.3% print logged in March.
The BSP has also said inflation is becoming broader than initially expected.
“What we react to is whether it’s spreading and it is affecting expectations. And our reading, based on the latest data, it seems to have spread somewhat,” BSP Governor Nestor A. Espenilla, Jr. said last week ahead of the April data.
Aside from the BSP’s monetary policy meeting, another trader said investors a also waiting for the US consumer price data.
“The peso moved sideways today despite being generally weaker within the day on expectations of strong US consumer price index (CPI) data this week,” another trader said on Tuesday.
For today, the first trader sees the peso moving between P51.80 and P51.95 versus the dolar, while the other gave a wider P51.70-P52 forecast range.
“The local currency is still seen to move sideways as investors will factor in possibly stronger US CPI data and bets ahead of likely upbeat Philippine GDP (gross domestic product) data due to be released on Thursday.”
A separate BusinessWorld poll of 10 economists yielded a 6.8% median GDP growth estimate for the January to March period on the back of higher household and consumer spending.
The median rate is higher than the 6.5% economic growth tallied in the same period last year. — K.A.N. Vidal

Shares rebound on SM Prime, Ayala Land results

LOCAL SHARES bounced back on Tuesday as index heavyweights reported positive performances for the first quarter, prompting investors to go bargain hunting.
The bellwether Philippine Stock Exchange index (PSEi) climbed 0.58% or 44.29 points to close at 7,577.57 yesterday. The broader all-shares index likewise rose 0.60% or 27.72 points to 4,629.33.
“SM Prime Holdings, Inc. and Ayala Land, Inc. (ALI) reported double-digit [income] growth. These issues manifested a good growth of the consumer as well as property sector, which definitely boosted investor confidence,” Diversified Securities, Inc. equities trader Aniceto K. Pangan said in a phone interview.
SM Prime on Monday said its net income grew by 15% to P7.6 billion, driven by its provincial mall expansion.
Shares in the company were among the most actively traded yesterday, jumping 4.79% to P33.90 each.
On the other hand, ALI’s earnings grew 17% to P6.52 billion as it benefited from higher residential sales alongside commercial leasing revenues. ALI’s share price likewise gained 0.25% to close at P40.10 each yesterday.
“Plus most regional markets were up which carried on the investors to bargain hunt on a number of issues helping the market to move up, rebound on today’s trading,” Mr. Pangan said on Tuesday.
Most Asian indices ended in positive territory yesterday, tracking the gains posted in US markets.
Overnight, the Dow Jones Industrial Average went up 0.39% or 94.81 points to 24,357.32. The S&P 500 index rose 0.35% or 9.21 points to 2,672.63, while the Nasdaq Composite index firmed up 0.77% or 55.60 points to 7,265.21.
Back home, the financials sector was the lone sub-index that declined, losing 0.59% or 11.21 points to 1,886.54.
Property surged 2.05% or 72.23 points to 3,582.03. Mining and oil went up 0.68% or 68.55 points to 10,082.93; services gained 0.56% or 8.49 points to 1,524.94; industrials added 0.50% or 54.99 points to 11,054.47; while holding firms closed 0.44% or 33.47 points higher to 7,610.70.
Advancers narrowly outpaced decliners, 98 to 96, while 48 names closed unchanged.
Some 793.39 million issues were traded, resulting in a value turnover of P7.23 billion, higher compared to the P5.90 billion seen on Monday.
Net foreign outflows slimmed to P225.77 million, versus the P462.74-million net sales recorded in the previous session.
Investors are also awaiting the results of the Bangko Sentral ng Pilipinas’ meeting on Thursday, where the body will decide on whether to hike or maintain current monetary policy settings.
“Right now [the market is] just nearly recovering. But we still have to see. Foreign selling will indicate that market has stabilized and maybe start to recover from that point,” Mr. Pangan said. — Arra B. Francia

Teo resigns amid ad deal controversy

By Denise A. Valdez
TOURISM SECRETARY Wanda T. Teo has resigned Monday, her lawyer confirmed Tuesday.
Lawyer Ferdinand S. Topacio said Ms. Teo personally submitted her letter of resignation to Executive Secretary Salvador C. Medialdea before the start of the Cabinet meeting. He added that Ms. Teo privately met with President Rodrigo R. Duterte later in the evening, and emphasized that Ms. Teo resigned of her own volition.
Malacañang confirmed on Tuesday that Mr. Duterte has accepted Ms. Teo’s resignation.
“Her decision to leave her position was made after a long and deliberate reflection and soul-searching with respect to the events that have transpired the past few weeks,” Mr. Topacio said in a press conference Tuesday.
He added that Ms. Teo was not at first inclined to resign, but said there were probably other factors that eventually led her to do so.
“The enemies of the President were seizing upon this issue to do harm to the Presidency. That’s something she could not accept,” Mr. Topacio said.
“We are not admitting guilt. It was more of delicadeza to protect the family name and to show the people the Tulfos do not wish to benefit from government funds.”
Ms. Teo and her brothers had been caught in a controversy over a P60-million advertising deal between her department, the media company of Bienvenido “Ben” T. Tulfo, and broadcaster Erwin T. Tulfo’s program on government network PTV-4.
Mr. Topacio also said that Ms. Teo did not know that Mr. Tulfo’s show, Kilos Pronto, is hosted by her brothers. “She did not know. She was only informed later on. Do you think if she knew, she would not have vetoed it?” he said.
He said there is nothing illegal with the advertising deal, it just “did not look good.”
The lawyer added: “There is no allegation on the part of the CoA (Commission on Audit) that there was something illegal or improper with the disbursement of funds by PTV4 to Bitag. Ang sinasabi ng CoA, ‘O nag-disburse pala kayo ng ganitong amount. Amin na yung resibo para ma-liquidate.’” (What CoA is saying is give us the receipts since you disbursed this amount, so we could liquidate the disbursement.)
As for possible liability on Ms. Teo’s part, Mr. Roque said this will now be up to the Office of the Ombudsman. — with Arjay L. Balinbin

Palace adviser appointed special envoy to Kuwait

By Arjay L. Balinbin, Reporter
PRESIDENT Rodrigo R. Duterte has appointed Presidential Adviser on Overseas Filipinos Workers’ (OFW) Affairs Abdullah D. Mama-o as the Philippines’ special envoy to Kuwait, Presidential Spokesperson Harry L. Roque, Jr. said on Tuesday.
“Secretary Mama-o (has) just returned from Kuwait. He came bearing good news for the President. The good news though, we will withhold releasing until we’ve had actual realization, Mr. Roque said in his press briefing.
The spokesman added: “But the President then said that Secretary Mama-o will be appointed as Special Envoy to Kuwait and he was tasked to return to Kuwait immediately to make sure that all Filipinos who should be sent back home, can return home. I do now know when Secretary Mama-o can actually fly back to Kuwait, but the marching order of the President was as soon as possible.”
Kuwait News Agency (KUNA) reported last week, May 1, that Mr. Mama-o, in his capacity as Presidential Adviser on OFWs, had met with Kuwaiti Deputy Foreign Minister Khaled Al-Jarallah on that day to discuss the recent labor issues between the two countries.
The two states, according to KUNA, expressed their “willingness to promote and develop their friendly relations and to overcome the ongoing crisis for the common interest of both.”
It will be recalled that the Kuwaiti government had expelled Philippine Ambassador Renato O. Villa last month, citing his embassy’s “undiplomatic acts” in the Persian Gulf state when it rescued some distressed Filipino workers there.
Mr. Duterte appointed Mr. Mama-o in 2016 as his adviser on OFWs, with the rank of Secretary.
According to his Facebook page profile, Mr. Mama-o is a graduate of San Beda College of Law, where Mr. Duterte also earned his law degree.
Chan Robles Virtual Law Library shows that Mr. Mama-o was admitted to the Philippine Bar on June 20, 1973.
The Presidential Communications Operations Office could not yet provide Mr. Mama-o’s resume as of this reporting. The Kuwaiti Embassy in Manila was also sought for comment.
Also on Tuesday, Labor Secretary Silvestro H. Bello III said there will be a partial lifting of the deployment ban to Kuwait if negotiations on the Memorandum of Understanding (MoU) between the Philippines and the Persian Gulf state are successful.
Mr. Bello said the MoU being pushed between the two states is the reason why the President appointed Mr. Mama-o as special envoy to Kuwait.
“If Secretary Mama-o succeeds in convincing them (Kuwait) to sign the MoU, this may pave the way for me to recommend to the President the partial lifting of the ban,” Mr. Bello told reporters on Tuesday.
He emphasized that only “skilled workers” will be allowed for deployment under the partial lifting. — with Gillian M. Cortez

Gov’t, Reds begin back-channel talks

(LtoR) The founder of the Filipino Communist Party and National Democratic Front’s (NDF) Chief Political Consultant, Jose Maria Sison; Norwegian Special Envoy, Elisabeth Slattum; Philippines’ Presidential Advisers on the Peace Process Jesus G. Dureza and Silvestre H. Bello III take part in a meeting as part of the peace talks between the Government of the Philippines (GRP) and the NDF organised by the Dutch government on April 2, 2017 in the Dutch town of Noordwijk aan Zee. / AFP PHOTO / Sophie MIGNON

MALACAÑANG ON Tuesday said the Government of the Republic of the Philippines (GRP) is currently holding informal back-channel talks in Europe with the Communist Party of the Philippines-New People’s Army-National Democratic Front (CPP-NPA-NDF) in a bid to resume peace negotiations within 60 days.
“President Duterte was briefed last night [May 7] after the Cabinet meeting by Cabinet Secretaries Jesus G. Dureza and Silvestre H. Bello III to inform him that the efforts to resume peace negotiations with the CPP-NPA-NDF are underway with back-channel informal talks now taking place in Europe,” Presidential Spokesperson Harry L. Roque, Jr. told reporters in a press briefing at the Palace.
He added: “Secretaries Dureza and Bello informed the President that his clear directives are being relayed across the table, and are now the subject of discussions in the ongoing meetings.”
Mr. Bello also serves as GRP panel chairman while Mr. Dureza is Mr. Duterte’s adviser on the peace process.
Mr. Roque likewise said that according to Mr. Dureza, the government’s team in Europe has informed him “there are initial positive results.”
“The team will return home soon to personally brief the President of the outcome. Secretary Bello said they are doing their best to meet the deadlines set by the President about the resumption of talks within 60 days,” Mr. Roque said.
Last month, Mr. Duterte invited CPP founder Jose Maria Sison to return home for the peace talks.
For his part, Mr. Sison said, he will only return to Manila if his “comrades and lawyers are satisfied with legal and security precautions.”
“In response, I declare that I will certainly return home when a significant advance in the peace negotiations has been achieved within the framework of The Hague Joint Declaration and when my comrades and lawyers are satisfied with legal and security precautions,” Mr. Sison said in a statement. — Arjay L. Balinbin

ConCom introduces proposal strengthening PCC

By Charmaine A. Tadalan
A SUBCOMMITTEE of the Consultative Committee (ConCom) on Charter Change proposed creating a national competition authority to “strongly” regulate a liberalized economy under a federal republic.
Subcommittee on Economic Reforms chair Arthur N. Aguilar said the provision gives the federal competition body “exclusive powers to formulate and execute policies and laws and regulations on fair competition that will cut across all federated regions.”
“This means that the federated regions cannot formulate their own competition policy or create their own competition authority,” Mr. Aguilar added.
He added that the Subcommittee on Constitutional Bodies will determine whether the structure of the national competition authority will be a “full constitutional body or a constitutional agency,” clarifying too that “what we have envisioned is (to) definitely have elements of ensured independence and security of tenure within a fixed term.”
The same Subcommittee will also be tasked to determine the institutional design, and define the powers and functions, membership, and extent of authority of the proposed competition body.
At present, there is only one provision in the 1987 Constitution against anti-competitive behavior. As stated in Article 12, Section 19, “The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.”
Mr. Aguilar said his subcommittee opted to retain the provision as it serves as “a general preamble (which) we will craft to (give) more specific powers for the national competition authority.
The sub-panel further proposed to prohibit anti-competition agreements, including anti-competitive mergers and acquisitions, rent-seeking behavior, and abuse of dominant position.
“If we are to liberalize the economy, we have to make sure that there will be fair and healthy competition and no players will be allowed to dominate any industry or market,” Mr. Aguilar said.
Sustaining a competitive market was included in the standpoints of the Philippine Competition Commission (PCC), which according to them, benefits both businesses and consumers in the long run. “While greater competitive pressure may reduce revenues in the short run, the same pressure can lead inefficient firms to shape up and improve their processes or technology,” the PCC said in a study submitted to the Subcommittee as part of the commission’s position paper.
The ConCom Technical Working Group will formulate the exact wording of these provisions for submission to the en banc next week.

Guevarra to Dela Rosa: Destroy drug machinery in Bilibid

JUSTICE Secretary Menardo I. Guevarra on Tuesday told reporters in a text message he plans to meet with newly appointed Bureau of Corrections (BuCor) chief Ronald M. Dela Rosa on Friday.
He pointed out: “There’ll be only one marching order for chief Dela Rosa: destroy the drug machinery inside the penitentiary,” Mr. Guevarra said, referring to the New Bilibid Prison in Muntinlupa City which the former Philippine National Police (PNP) chief now oversees.
According to the BuCor official website, New Bilibid Prison “houses not only death convicts and inmates sentenced to life term, but also those with numerous pending cases, multiple convictions, and sentences of more than 20 years.”
Mr. Dela Rosa took his first day of office on Monday and inspected the maximum security prison which is rumored to be a hive for high-profile drug personalities and their illegal activities. He warned convicted drug lords that he was the “boss” in the prison.
BuCor is one of the several attached agencies under the Department of Justice (DoJ). — Dane Angelo M. Enerio

SC rules in favor of burger chain in contempt charge filed by McDonald’s

LOCAL burger chain L.C. Big Mak Burger, Inc. (Big Mak) has won against fast-food giant McDonald’s Philippines after the Supreme Court (SC) reversed a contempt ruling that stemmed from charges of trademark infringement and unfair competition.
The 13-page decision promulgated on Feb. 14 and penned by SC First Division Associate Justice Noel G. Tijam dismissed McDonald’s complaint accusing Big Mak of defying a Sept. 5, 1994, ruling by Makati Regional Trial Court Branch 137 that ordered them to pay a P600,000 fine and to stop using the “Big Mak” name for being similar to McDonald’s own “Big Mac” mark.
According to the recent decision, McDonald’s accused Big Mak of “using for its fast food restaurant business the name ‘Big Mak’… to confuse, mislead, or deceive the public into believing that (their) goods and services originate from…those of McDo’s, and…otherwise unfairly trading on the reputation and goodwill of the McDonald’s Marks, in particular the mark ‘Big Mac.’”
McDonald’s then filed a petition for contempt against Big Mak and its president Francis Dy for “(continuing) to disobey and ignore their judgement obligation by continuously using, as part of their food and restaurant business, the words ‘Big Mak’” and for “(refusing) to fully pay the damages awarded to the respondent in the said case.” Big Mak denied the claims and said “it offered and tendered payment” to McDonald’s.
The case was brought to the Court of Appeals (CA) where Big Mak was found guilty of indirect contempt in a decision dated Feb. 2, 2017. The CA upheld its ruling in a decision on July 26 that year, following Mr. Dy’s motion for reconsideration.
When the case was elevated to the high court, whose decision read in part: “Contrary to what respondent attempted to impress to the courts, it is not wholly true that petitioner continues to use the mark ‘Big Mak’ in its business, in complete defiance to this Court’s decision.”
It added: “As early as during the trial of the said case, certain changes had already been made by the petitioner to rule out the charge of infringement and unfair competition.”
“The use of petitioner’s corporate name instead of the words ‘Big Mak’ solely was evidently pursuant to the directive of the court in the injunction order. Clearly, as correctly found by the RTC, (petitioner) had indeed desisted from the use of ‘Big Mak to comply with the injunction order,” the decision read further, referring to Big Mak’s decision to use the names “Super Mak” and “L.C. Big Mak Burger, Inc.” after the 1994 ruling.
These acts, the court said, “belie the imputation of disobedience, much less contemptuous acts, against (petitioner).”
The SC decision reversed and set aside the CA’s 2017 decision and reinstated a ruling on April 7, 2014 by Makati RTC Branch 59 favoring Mr. Dy.
Chief Justice Maria Lourdes P.A. Sereno (since on leave) and Associate Justices Teresita L. De Castro, Mariano C. Del Castillo, and Francis H. Jardeleza concurred with Mr. Tijam’s decision. — Dane Angelo M. Enerio

Palace to probe PhilHealth finances, expenditures

THE PALACE said on Tuesday that it will investigate the alleged multi-billion peso losses of the Philippine Health Insurance Corp. (Philhealth), including the travel expenses of the agency’s interim president, Celestina Ma. Jude de la Serna. “All I can say is, now with all the news that are coming out, this will be investigated by the Palace,” Presidential Spokesperson Harry L. Roque, speaking in Filipino, said in his interview with DZMM on Tuesday morning, May 8. — Arjay L. Balinbin
>> See related story on GOCC subsidies rise 27% in 2017 led by PhilHealth https://goo.gl/jNvxVH