Malacañang said on Tuesday, May 29, that the Department of Energy has given the green light to import “cheaper” diesel fuel from Russia.
“May go signal na mula sa DOE ang pag-angkat ng diesel sa Russia na mas mura,” Presidential Spokesperson Harry L. Roque, Jr. said in a press conference in Bondoc, Mountain Province on Tuesday morning, May 29.
Mr. Roque said he got confirmation from the DoE “last night,” May 28.
He also said the Philippine National Oil Company (PNOC) is beginning some “steps to import cheaper diesel from Russia.”
“It’s never been done before, although the Philippines has imported fuel from non-OPEC (Organization of the Petroleum Exporting Countries) members before,” he added.
The spokesman assured that if the Philippines is able to import cheaper diesel from Russia, “[oil products will be sold][ at a cheaper price to the public.” — Arjay L. Balinbin
Malacañang announced on Tuesday that the Mountain Province Dialysis Center at the Luis Hora Memorail Regional Hospital in Bauko, Mountain Province is “ now in full operation.”
Presidential Spokesperson Harry L. Roque, Jr. made the announcement in a press conference in Bondoc following the 47th Commencement Exercises of the Mountain Province State Polytechnic College (MPSPC).
Mr. Roque was the keynote speaker during the graduation ceremonies with the theme: “Sustaining Breakthroughs in Education: Realizing Ambisyon Natin 2040.”
“Patients in the province and the nearby towns of Ilocos Sur and Kalinga no longer need to go to Baguio City or La Trinidad for their dialysis treatment,” he added.
Mr. Roque said this is part of the effort of President Rodrigo R. Duterte’s administration “to provide the much-needed medical and health services to every Filipino.”
“Rest assured that the government will continuously work to improve its services, especially to the underserved and underprivileged members of our society,” he said. — Arjay L. Balinbin
The peso weakened against the dollar on Tuesday, May 29, anew as geopolitical uncertainties in Europe rose.
The local currency ended Tuesday’s session at P52.64 versus the greenback, down by 15 centavos from the P52.49-per-dollar finish the previous day.
The peso traded weaker the whole day, opening the session declining at P52.55 against the dollar. It slipped to as low as P52.67, while its intraday high stood at P52.51.
Dollars traded rose to $712.05 million from the $637.4 million that changed hands on Monday.
Traders interviewed on Tuesday said the peso depreciated due to the
“geopolitical uncertainties in the Eurozone, particularly in Italy and Spain.”
According to a Reuters report, the election campaign in Italy could focus on the country’s membership to European institutions after the anti-establishment 5-Star and League parties abandoned plans to form a government, causing fear from investors.
In addition, Spanish Prime Minister Mariano Rajoy will face a vote of confidence in his leadership by the end of the week, with corruption allegations hurled at dozens of people in his party threatening his rule.
“If you look at what happened globally, there has been political tensions in Italy and Spain. Because of this, the rate of the peso moved [lower],” a trader said in a phone interview Tuesday.
However, the first trader noted that the peso received some support intraday as oil prices moved lower.
“On the other side of it, the oil prices moved lower. This gave a little bit of support to some Asian currencies which were hit hard because oil prices are moving higher,” he said.
“We got a little bit of reprieve from that because OPEC (Organization of the Petroleum Exporting Countries) is expected to boost supplies going forward.” — Karl Angelo N. Vidal
Shares fell anew on Tuesday, May, 29, as investors remained cautious against inflationary pressures and the weakening peso given the lack of positive leads.
The benchmark Philippine Stock Exchange index gave up 0.53% or 40.54 points to 7,602.36, marking its third straight day of decline. The all shares index likewise lost 0.16% or 7.44 points to 4,640.67 on Tuesday.
“I think lukewarm sentiment continues to be the primary driver so far, based on value turnover being below-average recently. A lack of catalysts to look forward to is leaving key risks such as inflation and the weak peso to remain top-of-mind for most investors,” China Bank Securities Corp. Research Director Garie G. Ouano said via text.
Regional indices also closed lower on Tuesday, affected by higher oil prices in the world market.
Most sectoral indices moved to negative territory, led by the counter for holding firms which plunged 1.16% or 87.44 points to 7,422.35. Mining and oil went down 0.54% or 52.57 points to 9,729.74, while industrial shed 0.53% or 58.45 points to 10,890.54. Property also dropped 0.51% or 19.50 points to 3,795.77.
On the other hand, services climbed 0.41% or 6.03 points to 1,488.86, while financials rose 0.09% or 1.63 points to 1,899.06.
Some 1.15 billion issues valued at P6.11 billion switched hands, higher than Monday’s value turnover of P5.39 billion. Decliners outpaced advancers, 101 to 89, while 54 issues were unchanged.
Foreign investors were net sellers for the 10th consecutive day, recording net sales of P169.14 million on Tuesday, although slower than the previous session’s P421.9 million.
The PSE announced that financial markets will be closed on June 12, Tuesday, in observance of the Philippine Independence Day. — Arra B. Francia
Manila Electric Co. (Meralco) expects its capital expenditure for the next regulatory period spanning mid-2019 to mid-2023 to track around the same amount as the previous period, at around P18 billion a year, its president said.
Meralco President and Chief Executive Officer Oscar S. Reyes told reporters that the distribution utility expects the customer count in the four years starting July 2019 to grow around the same rate as the previous years.
He also said that the company is looking at a load growth similar as those of the previous years.
The Energy Regulatory Commission (ERC) regulates the power distribution utility within a so-called “reset period” consisting of four regulatory years. The company’s regulatory year begins on July 1 and ends on June 30 of the following year. Its fourth reset period began on July 1, 2015 and ends on June 30, 2019. It is awaiting the release by the ERC of the final rules governing the filing of its fourth reset application. — Victor V. Saulon
JG Summit Holdings, Inc. is hiking its capital spending for 2018 as it aims to grow its petrochemical, airline, property, food and beverage, and banking businesses.
The Gokongwei-led conglomerate said on Monday, May 28, that it will be spending around P80 billion in capital expenditures this year. This is around 83% higher than the P43.5 billion it spent in 2017.
Bulk of the 2018 capex will go to Robinsons Land Corp. at P30 billion. JG Summit Petrochemical Corp. will corner P20 billion, while Cebu Air, Inc. will get “a little over P20 billion,” according to JG Summit President and CEO Lance Y. Gokongwei during their annual shareholders’ meeting late Monday.
The food and beverage business through Universal Robina Corp. (URC) will be spending P7 billion, while the balance will go to JG Summit’s smaller units.
Mr. Gokongwei said the company has already spent P11 billion out of the capex for the first quarter of 2018.
Moving forward, the company said it remains optimistic for growth prospects, amid various factors that are expected to affect its business units. This includes the implementation of the tax reform program that will hit products by URC, fuel surcharge rates weighing on Cebu Air’s operations, and the overall weakening of the peso. — Arra B. Francia
After the Labor agency released its list of companies guilty of labor-only contracting, the Makabayan bloc has filed on Tuesday, May 29, a resolution seeking to probe contractualization practices of the Subic Bay Metropolitan Authority (SBMA).
House Resolution 1916, directs the Committees on Bases Conversion and Labor to hold joint investigations on the alleged rampant contractualization in SBMA, which Bayan Muna Rep. Carlos Isagani T. Zarate noted to account for half of its total workforce.
“Presently, about 50% of SBMA operations rely on contract service-hired workers,” stated in the resolution.
The solons also mentioned concerns of SBMA workers on irregularities in the remittances of their SSS contributions and income tax returns. It was reported that employees found that half of their SSS contributions were “saved by the agency for retirement.” — Charmaine A. Tadalan
The evening of May 12, 2018 was no different from the other nights in Bonifacio Global City in Taguig: the business district was alive with lights from ubiquitous skyscrapers lining its exact grid pattern.
Before the sun set, the case was just the same — only the sparks were in the form of jolts of inspiration from nearly 500 delegates at the first ever SparkUp Summit, BusinessWorld SparkUp’s annual conference on ideation, entrepreneurship and innovation, held at the Samsung Hall of SM Aura in BGC.
Organized by SparkUp, BusinessWorld’s multimedia platform for the next generation of business people, the conference put the spotlight on the thriving business community, the progressive start-up ecosystem, and the future industry leaders through an immersive learning experience.
Co-presented by Globe myBusiness Academy, SparkUp Summit was a whole-day affair filled with motivational keynotes, thought-provoking sessions, and insightful panel discussions. It was mounted in partnership with Accenture Philippines and supported by Hyundai Asia Resources, Inc. and FWD Life Insurance Corp.
This year’s theme, “Idea Capital of the Business World,” highlighted how the new force of entrepreneurs grew and developed fresh and novel business ideas.
Francis Kong, director of Inspire Leadership Consultancy, opened the summit by discussing the fundamentals of running a business.
Francis J. Kong
In order to succeed in business, he said an entrepreneur should “continue learning, rise up and grind, and compete with pros” to “elevate standard and benchmark.”
“You have to understand the why of what you want to do in business,” Mr. Kong said in his keynote speech.
Millennial food entrepreneurs Sean Bautista of Tetsuo and Francis Reyes of Caravan Food Group, Inc. shared pointers on how to come up with creative business concepts.
Mr. Bautista emphasized the importance of having an “artistic approach,” saying it can “augment your business.”
Sean Bautista of Tetsuo
“Don’t be afraid of injecting things that are not conventional in your industry,” he said.
The trio of Ali Sangalang, Panch Alvarez and Jim Bacarro, who run local clothing company Linya-Linya, shared the stage to tackle how to build a remarkable brand.
In introducing a concept that will entice the local market, Mr. Sangalang said business owners “have to know, understand, and experience the Filipino way of life.” “You have to interact and engage with the people in order to create relatable content and products.”
To maintain fresh, creative ideas, Mr. Bacarro said one should “interact” and “immerse” in “new environments so new solutions can come out.”
Panch Alvarez of Linya linya
Mr. Alvarez shared an advice to aspiring entrepreneurs, “’Wag kayong matakot mag-start. Kahit saan ang starting point, lundagin nyo.”
Gino Borromeo, vice-president and chief strategy officer of McCann WorldGroup Philippines, talked about the importance of a strong branding for a business.
“Your brand has to stand for something meaningful to people,” he said. “If you don’t stand for anything, you [won’t] stand out.”
Gino Borromeo of McCann Worldgroup Philippines
Leading a marketing agency that is behind some of the most popular and successful product campaigns in the country, Mr. Borromeo shared how his company incorporates creative concepts in coming up with effective projects for their clients.
“People’s idea of a brand comes from their experience with the brand. The really remarkable brands will delight you by giving you something you don’t expect,” Mr. Borromeo said.
Chef Miko Aspiras
Meanwhile, Tasteless Food Group founder Miko Aspiras, and Tralulu founder and CEO Andrew Cua shared how their businesses cater to Filipino consumers by incorporating Filipino experience into their offerings.
In a panel discussion moderated by Patch Dulay — founder and CEO of The Spark Project — Mr. Bautista, Mr. Borromeo, Mr. Aspiras, and Daniel Lumain — co-founder and COO of Akaba Ltd. Design Co. — tackled the opportunities that global trends open for local businesses.
Second keynote speaker Joan Yao, vice-president of Kickstart Ventures, Inc., shared her years of experience working with startups.
Joane Yao of Kickstart Ventures, Inc.
She said that the “increasing accessibility and availability of the internet” to more Filipinos “is creating opportunities to reach more consumers.”
Mr. Lumain and Carmina Bayombong, founder and CEO of social enterprise InvestEd, talked about running an impact-driven business while ensuring sustainability.
Carmina Bayombong of InvestEd
“I urge you to search for your advocacy and dive right into it. All you need to do is to start,” Ms. Bayombong said.
Petalier founders Diane Yap and Lauren Gavino, as well as Pushkart.ph founder and CEO Joshua Aragon, shared their strategies in utilizing the digital space to grow their businesses.
Shubhabrata Sengupta, lead innovator at Accenture Philippines, and Shahab Shabibi, co-founder and CEO of Machine Ventures, gave a glimpse of how innovation is changing the landscape of different industries.
Shubhabrata Sengupta of Accenture Philippines
“Every disturbance is helping us to think something different, to think beyond our basic understanding; that’s where innovation comes,” Mr. Sengupta said.
For his part, Mr. Shabibi said a company’s success is measured beyond its margins. He said that “the most successful companies are those with shared missions.”
Shahab Shabibi of Machine Ventures
On how innovation brought by technology shapes the business landscape, Mr. Shabibi said, “The future is happening right now. Anything that you’ll be using in the next couple of years are already in the making.”
An insightful panel discussion on the future of the local tech startup scene concluded the summit.
Moderated by Katrina Chan, executive director of QBO Philippines, Ms. Bayombong, Mr. Shabibi, Mr. Cua and Mr. Aragon shared how they see the country’s startup ecosystem in the next few years, especially with the emergence of new technologies.
The future may be uncertain, but with SparkUp Summit’s speakers, there’s a whole new business world to look forward to.
SparkUp Summit, which will be held annually, is brought to you by BusinessWorld’s SparkUp and Globe myBusiness Academy; in partnership with Accenture Philippines; supported by FWD Life Insurance Corp. and Hyundai Asia Resources, Inc.; with organization partners Go Negosyo, Young Entrepreneurs Society, Society of Thomasian Entrepreneurs, FEU Entrepreneurship Club, ADMU AMA, PJMA, DLSU BMS, UE JFINEX, UA&P BEA, JCFAP, UST JFINEX, NU NSE, UPCE, AIESEC PH, and PUP JME; media partners Philippine Star, Philippine Star Campus, DZUP, The LaSallian, NU The National, The Benildean, The New Builder, adobo magazine, Green Giant FM, TOMCAT, Jumpstart Magazine, and iMPACT; venue partners SM Aura Premier; event partners Fiera de Manila, Inc. and Voyager Innovations, Inc.; featured brands My Chef Philippines, Bagwings, Candid Coffee, The Blends Project, Natural Health Philippines, Bayani Brew, StyleGenie PH, Linya-Linya, Gouache, Guppy Shorts, Machine Ventures, Taxumo, Pushkart.ph – Grocery Delivery, and Project T Solutions.
In 2016, the story of taxi driver Roderic Almeda went viral. He had been selling peanut butter from his cab when he met art director and graphic artist, Troy Sitosta, who gave the humble product a complete redesign, creating a new logo, writing brand copy, and even printing out hanging signs that told his story.
With Sitosta’s makeover, sales for Almeda’s peanut butter business – or “RJ’s” as it was now called – soared. Customers flooded his cell phone number, which was posted in many of the news stories on Alameda, and growing Facebook page with orders.
To top itall off, Sitosta did not charge for his work, calling it “good honest work for a good and honest family man.”
So why did this tale capture the public’s hearts and minds? On one level, there is the feel good element of someone taking their business to the next level with the help of a kind and talented good samaritan, but the real pull of this story is in its contrasts: Filipinos don’t typically associate cab drivers with being entrepreneurs, much less one as hardworking as Almeda. In terms of associations, the majority of Filipinos probably think of cab drivers as public servants who provide a service to the country’s commuters.
But all taxi drivers are entrepreneurs, not just the few ones like Almeda who may opt to sell a product from his taxi. Think about it: Like entrepreneurs, cab drivers provide both a product (i.e. the cab itself) and a service (transportation from point A to point B), and their success depends on their diskarte, or resourcefulness. They must know where their customers are in order to maximize their resources, serve their customers in a friendly and courteous manner if they wish to earn tips, and manage their finances on a day-to-day basis. In short, cab drivers are essentially entrepreneurs in yellow offices.
Why’s it important to think of cab drivers as entrepreneurs? There are many reasons, but the most significant is that they are an overlooked profession. Take for example a recent regulatory hearing I attended. At the hearing, a group of transportation network vehicle service (TNVS) drivers booed in response to the policy-maker’s questioning of Grab’s illegal two-peso per minute top-up on the base fare. One TNVS driver even said that “sixty thousand families will lose their livelihood” if the 2-peso per minute additional fare is removed. In other words, there is a vocal and organized contingent of TNVS drivers and their stakeholders that are routinely out to protect their interests.
Taxi drivers, in contrast to TNVS drivers, do not have supporters who are just as vocal in the transportation space. They are a forgotten demographic. Many transportation and mobility companies have come to the Philippines and spoke of “disruption” and “innovation,” often with little regard for the tens of thousands of taxi drivers who could lose their livelihoods as a result. That’s why I’ve made it Micab’s advocacy to try to shift the national branding of our cab drivers: If we begin to view them as professionals, they will act accordingly. As an industry, they will then be able to compete with anyone in the world.
I’ll be the first to admit: We have a long way to go. As the story of Almeda itself shows, cab drivers don’t have the best image with the country’s public—to the point that the tale of one of them selling peanut butter as an additional, honest living is newsworthy. But there are tens of thousands of Almedas across the country, each focused on providing the best service to their customers in order to succeed at their small business. They are our brothers, fathers, sons, uncles, friends, and neighbors, all of whom deserve respect as our nation’s most agile entrepreneurs: They go where the customers are and take them wherever they need to be.
What can other founders learn from how we are trying to empower cab drivers? As I mentioned above, I think it’s far too easy for some some startups to become technology-centric and focus on the “innovation” and “disruption” and lose sight of all the stakeholders in their ecosystem, especially those that are already commonly overlooked. We need to remember that tech is just a means to an end in serving our most important constituent: people.
By Elijah Joseph C. Tubayan Reporter
THE PROPOSED 11th Regular Foreign Investment Negative List, which will be more “aggressive” in opening up more economic sectors to foreign ownership or participation, is undergoing careful review to make sure it is legally sound, an economic planning official said in a recent interview.
The new list was supposed to have replaced last year the existing roster that took effect in 2015.
Asked on progress of the new list, Rosemarie G. Edillon, undersecretary for Policy and Planning at the National Economic and Development Authority (NEDA), said the document has yet to reach President Rodrigo R. Duterte’s (PRRD) desk. “The 11th RFINL is with OES (Office of the Executive Secretary) for legal review before it is endorsed for PRRD’s signature,” Ms. Edillon said in a mobile phone message last Thursday.
Ms. Edillon said that the government is making sure that the proposed liberalization of more sectors does not violate the constitution nor any other law, as the directive of the NEDA Board, led by Mr. Duterte, was to be as “aggressive as possible.”
Malacañang zeroed in on eight sectors and activities in its bid to further ease limits to foreign participation and ownership under Memorandum Order No. 16, signed by Executive Secretary Salvador C. Medialdea on Nov. 21 last year. “To raise the Philippines’ level of competitiveness… the NEDA Board and its member agencies are hereby directed to take immediate steps to lift or ease existing restrictions on foreign participation in the following investment areas or activities,” the order read, enumerating private recruitment; practice of professions where allowing foreign participation will redound to public benefit; contracts for construction and repair of locally funded public works; public services “except activities and systems that are recognized as public utilities such as transmission and distribution of electricity, water pipeline distribution system and sewerage pipeline system”; culture, production, milling, processing and trading — except retailing — of rice and corn and acquiring these grains “and by-products”; teaching at higher education levels; as well as retail trade and domestic trade enterprises.
“There has to be some legal scrubbing; they need to very very sure,” Ms. Edillon said.
“If you ask me then we’re way past. But then, I understand that it’s better to be sure. Be aggressive, but we still want to be within the bounds of the law.”
According to the NEDA official, “drastic” additions in the new list include opening up of training centers to foreign participation, as well as the practice of professions that do not require a license. “I think the most drastic changes that we’re slightly iffy with, is with respect to opening up of training centers for higher level skills development. It doesn’t form part of our hierarchical education structure, meaning short-term courses like data analytics, programming,” she explained in a phone call interview on Monday. “Also… teaching in higher education, especially those that do not require licensure; for instance: mathematics, economics, English.”
The 10th two-year RFINL issued in 2015 had retained virtually unchanged the preceding roster of domestic activities and sectors restricted to foreign participation: licensed professions; retail; cooperatives; private security agencies; small-scale mining; utilization of marine resources; ownership, operation and management of cockpits; and manufacture, repair, stockpiling and/or distribution of nuclear weapons.
Foreigners can have limited stakes of up to 25% in private recruitment for local or overseas employment and construction and repair of locally-funded works like infrastructure and foreign-assisted projects.
Areas where foreigners can own up to 30% are: advertising; exploration, development and utilization of natural resources; private lands; public utilities; education; rice and corn administration; financing and investment companies; supplies to state-owned corporations and agencies; defense-related structures; public utility franchises; and private domestic and overseas construction contracts.
The list of industries allowing up to 40% foreign ownership include security; defense; those industries that pose a risk to health and morals, such as gambling, bath houses and massage clinics; and small-scale and medium-scale enterprises of a certain size. ‘BETTER LATE THAN NEVER’
Sought for comment, the American Chamber of Commerce of the Philippines, Inc. (AmCham) Senior Advisor John D. Forbes said in an e-mail yesterday that the group has “encouraged liberalization of the FINL for two decades.”
“Based on President’s Duterte’s MO 16, we anticipate the forthcoming FINL will represent the most serious effort yet of any administration to level the playing field for foreign investors. We look forward to its release,” Mr. Forbes said.
For European Chamber of Commerce of the Philippines President Guenter Taus, release of the new negative list would be “better late than never.” At the same time, Mr. Taus welcomed the scheduled enactment on Monday evening of the Ease of Doing Business Act that will streamline regulatory processes as well as of other “existing laws in order to facilitate the entry of foreign players into the local market.”
NEDA’s Ms. Edillon said that the government will pursue amendments to other laws like the Public Service Act that will open up telecommunications and other utilities to greater foreign participation, and the Retail Trade Liberalization Act that will do the same to this sector.
THE HOUSE COMMITTEE on ways and means will study the option of giving President Rodrigo R. Duterte the power to suspend tax increases under the Tax Reform for Acceleration and Inclusion (TRAIN) law amid concerns over elevated prices of consumer goods, the head of the panel said in a television interview on Monday.
Despite Republic Act No. 10963 already having a provision to suspend succeeding petroleum excise tax hikes triggered when global oil prices reach a certain threshold, House ways and means committee chairman Dakila Carlo E. Cua (Quirino) said that Congress may introduce more safeguards.
“Pag kulang pa ‘yan (If the safeguard under the law does not suffice), we can also legislate further enhancements. Bigyan natin yung Presidente ng kapangyarihan (We could give the President the authority) to suspend other features. Kung kailangan natin ‘yan (If we need more safeguards), why not?” Mr. Cua said yesterday in an interview with Cignal TV’s One News.
“That’s the option we’re thinking of,” he added, noting that the possibility had been discussed when TRAIN was still a bill.
“I’m open to pushing for that authorization so it can be studied and targeted.”
Offhand, he said, suspending hikes in fuel excise tax provided under the law will benefit the rich more than the poor, since the top 13 million richest households account for 50% of the petroleum consumption.
“But for me, the most important is the rollout of social benefits,” he added.
Mr. Cua said that such measure is possible, as he recalled that the administration of former president Gloria M. Macapagal-Arroyo moved to delay the coverage of fuel in the extended value-added tax program.
The concerns came as inflation clocked 4.5% in April — the fastest clip in more than five years — bringing the four-month average to 4.1%, which is above the Bangko Sentral ng Pilipinas’ 2-4% target for full-year 2018.
That prompted the central bank last May 10 to raise benchmark interest rates for the first time in nearly four years by 25 basis points in response to elevated inflationary pressures, even as monetary authorities said price pressures should moderate in 2019.
The Department of Finance (DoF) in a separate statement yesterday has defended the TRAIN law, saying it only contributed only 0.4 of a percentage point to April’s inflation reading, and of that amount, increases in petroleum taxes only accounted for 0.2 of a percentage point.
Finance Undersecretary Karl Kendrick T. Chua has said that high world oil prices, triggered by unexpected geopolitical and global economic developments, have been responsible for the pump price hikes, together with the peso’s sharp depreciation.
Mr. Chua said that “the DoF does not have any plans of immediately suspending the increased rates of excise taxes on petroleum products for 2018 as this is not the mechanism sanctioned by law.”
The law reads that the “scheduled increase in the excise tax on fuel… shall be suspended when the average Dubai crude oil price based on Mean of Platts Singapore for three months prior to the scheduled increase of the month reaches or exceeds $80 per barrel.”
Reuters has reported that the Organization of the Petroleum Exporting Countries, as well as top producer but non-OPEC member Russia, started withholding supplies in 2017 to tighten the market and prop up prices, which in 2016 fell to their lowest in more than a decade at less than $30 per barrel. Prices have soared since the start of the cuts last year, with Brent breaking through $80 per barrel earlier this month. But prices have been on the downtrend lately in the face of unabated US production gains and statements by Saudi Arabia and Russia that they may increase supplies.
Moreover, Mr. Chua said that the Finance department “is working closely with the lead implementing agencies of projects related to TRAIN to ensure that the mitigating measures will be delivered to the people at the soonest possible time while ensuring the least leakage.”
This year, the poorest 50% of Filipino households will receive P200 a month in state subsidies, which will increase to P300 a month in 2019 and 2020. The DoF said that the Department of Social Welfare and Development has so far released some P4.3 billion to the Land Bank of the Philippines for some 1.8 million beneficiaries of the Pantawid Pamilyang Pilipino Program, with cash transfers conditional on recipients ensuring their children go to school and avail of preventive healthcare. Another 2.6 million household beneficiaries are in the process of getting their cash subsidies in May and June. — Elijah Joseph C. Tubayan
THE PHILIPPINE Competition Commission (PCC) noted in a report released on Monday that Grab Holdings, Inc.’s acquisition of the Southeast Asian business of rival Uber Technologies has led to a surge in prices and deteriorating service quality.
In an executive summary of its statement of concerns, PCC’s Mergers and Acquisitions Office (MAO) found that Grab Holdings’ and MyTaxi.PH Inc.’s purchase of Uber and Uber Systems Inc. on March 25 “has resulted and will likely continue to result in substantial lessening of competition” in the ride-hailing market.
Before the transaction, Grab prices were “flat to declining,” but weeks after the sale saw “higher fares and increased frequency of surge-pricing applied.”
The findings were from the monitoring of 27,648 booking requests and mystery shopper surveys involving 1,104 rides, according to MAO’s report that was e-mailed to reporters on Monday.
“Results of the market investigation, as well as comments from the riding public on the effects of the transaction submitted to the Office, indicate that the quality of services of Grab has decreased post-Transaction in the following manner: increased driver cancellation; forced cancellation of rides; and increased waiting times,” the statement read.
“This is compounded by the loss of a competitor in Uber where trips were less likely to be cancelled due to features which mask the destination of a prospective rider until the start of a trip,” it added.
“While the Office notes that there are new entrants to the relevant market, historical data show that it would take a significant amount of time and cost for these new players to grow a driver and rider base sufficient to contest the incumbent. During such period, Grab will not be constrained by any competitor, allowing it to exercise its market power in the relevant market,” it explained.
“Therefore, the Office finds that new entrants in the relevant market are not likely to exert sufficient competitive pressure on Grab.”
This price surge came despite an increase in the supply of drivers for Grab as several Uber drivers transferred.
“Post-Transaction prices of Grab indicate that prices are increasing, while quality of service is deteriorating, to the detriment of the riding public,” the statement read further, noting that passenger surveys and interviews indicated more trip cancellations by drivers and longer waiting times.
“The Transaction results in Grab being able to profitably increase its prices given its market share as riders will not shift to other modes of public transportation,” it noted, adding that other parties’ “entry into the… market will not be timely, likely and significant such that a new entrant will not serve as a competitive constraint against Grab.”
PCC Chairman Arsenio M. Balisacan said in a press conference at PCC’s headquarters in Pasig City that the entry of new ride-hailing companies will not be enough to revive competition in a market that is dominated by a “near monopoly.”
“‘Yung sinasabi naming substantial lessening of competition, pinatunayan dito sa report,” Mr. Balisacan said in the briefing.
“Considering that Grab now holds a near monopoly of both the driver and customer base in the relevant market, Grab can unilaterally raise its prices and reduce the quality of its services, as it experiences no sufficient competitive constraint from any other market participant,” the statement read.
Both companies were notified about MAO’s findings on May 22 and have until this Friday to comment. — Janina C. Lim
