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Yields on term deposits inch up

By Melissa Luz T. Lopez, Senior Reporter
APPETITE FOR term deposits picked up this week, pushing yields slightly higher as banks sought bigger returns for their excess cash.
Bids for the term deposit facility (TDF) rose to P68.09 billion on Wednesday, rising from P51.196 billion the previous week to surpass the P50 billion which the Bangko Sentral ng Pilipinas (BSP) wanted to sell.
Demand went up across all tenors, with market players particularly gunning to get their funds parked under the one and two-week placements. The surge in tenders come a week after the Monetary Board’s decision to keep benchmark interest rates unchanged, with the view that inflation is becoming more manageable.
The seven-day papers received P28.079 billion in total offers, higher than the P22.593 billion tenders the previous week to fill the P20 billion which the central bank wanted to sell. Meanwhile, banks sought better margins for their TDF placements, with the week-long tenor climbing to a 5.1565% average versus 5.1411% a week ago.
Banks also grew more comfortable in locking in their loose cash for two weeks, as they put forward P27.259 billion tenders under the 14-day tenor. Demand grew from P16.9 billion last week to fill the P20-billion auction size.
Rates fetched for these papers rose to 5.1828% as lenders asked for returns from a narrow 5.125-5.22% range. This was higher than the 5.1765% average during the Feb. 6 exercise.
The 28-day notes also saw total offers increase to P12.752 billion from the P11.703 billion received previously, settling above the P10 billion up for sale. The average yield also inched higher to average 5.1839% from last week’s 5.1788%.
The TDF has been the central bank’s main channel in mopping up excess funds in the financial system. Through the weekly auctions, the BSP wants to bring market and interbank rates closer to its desired range through the yields which they accept.
The central bank on Thursday voted to keep policy settings unchanged at 4.25-5.25%, with the view that there is room to watch how previous rate hikes will be absorbed by the system now that inflation is clearly on its way down. Any adjustments to the benchmark borrowing rates will also affect acceptable yields under the TDF, as yields are based on the key rates set by the BSP.
BSP Deputy Governor Diwa C. Guinigundo said the latest TDF results dispel speculations of “tight” money supply conditions.
“As we indicated in previous TDF auctions, domestic liquidity remains ample. This is clearly shown by the oversubscription across all tenors [yesterday],” Mr. Guinigundo said in a text message to reporters, noting that liquidity has returned after the holiday demand and with sustained state disbursements.
“The market should understand that timing should be considered when observing monetary conditions.”
“There will be more permanent reduction in system liquidity if the BSP starts selling FX to the market and keeps the proceeds, reflecting negative market sentiment and leading to some sustained capital outflow. This is clearly not the case today,” he added.
Mr. Guinigundo also noted that the market may appear “low on liquidity” once the Bureau of the Treasury completes a fund-raising exercise, but he clarified that the money will eventually be released to the system once the budget for state projects are released. The funds will then find their way back to the banks as deposits, which will then support greater lending.
These remarks come after some market watchers insist that it is time for the BSP to release additional money supply via cuts in banks’ reserve requirement ratio. A one percentage point reduction in the reserves will unleash roughly P100 billion to the financial system.

Sealed Air to buy MGM’s packaging business

NEW YORK Stock Exchange-listed company Sealed Air Corp. said it is buying the flexible packaging business of local company MGM Food and Commodities Corp.
In a statement on Wednesday, Sealed Air said the deal is scheduled to close in April, but details of the transaction were withheld pending the release of its financial results.
The United States-based company said it wants to “leverage MGM’s expertise to expand its printing and lamination capabilities and better serve customers throughout the Asia Pacific region.”
“We are excited to have the talented team at MGM join us and improve our ability to deliver world-class innovations to the region’s rapidly growing food market,” Sealed Air President and Chief Commercial Officer Karl Deily was quoted as saying. in the statement.
Mr. Deily said the acquisition of MGM allows the company to expand its capacity and presence in Asia.
On its website, MGM said it has experience in providing premium products, packaging materials and food ingredients. The packaging business, which it is selling to Sealed Air, is involved in supplying laminated vacuum bags, thermoformable films, stand up pouches, grease proof papers, among other specialized packaging materials.
Sealed Air, on the other hand, has been in the Philippines for more than 20 years. It offers packaging solutions such as Cryovac brand food packaging solutions and Bubble Wrap brand cushioning. — Denise A. Valdez

Amazon to buy start-up Eero to help connect home devices

AMAZON.COM Inc. has agreed to acquire Eero, a builder of WiFi-networking tools, in another deal aimed at bolstering the retail and technology giant’s home devices business.
Eero, based in San Francisco, makes gadgets that extend WiFi coverage throughout a home using local networking, known as mesh technology, that removes hiccups in broadcasting internet signals.
The companies didn’t disclose the purchase price Monday when they announced the acquisition. Eero has raised $148 million in equity and debt, according to PitchBook Data Inc.
Amazon, builder of the hit Echo smart speaker line, is behind a growing range of home electronics, from Fire TV streaming sticks to a voice-controlled microwave. Last year, the company bought Ring, a builder of video doorbells and home security gear. — Bloomberg

New Nespresso flavors are inspired by coffee history

“PERK” can mean making something more lively, or else a small bonus. Last Tuesday, BusinessWorld experienced “perk” in every sense of the word with the launch of Nespresso’s limited edition blends: the Caffes Venezia and the Istanbul, held in the Nespresso boutique in Rockwell.
The blends take a cue from the birth of modern coffee shops: the coffeehouses of Istanbul and Venice, where thriving trade routes firmly established the role of coffee in the 16th century. From these two cities, the rise of coffee as a social ritual was recorded, and its influence continues today in the various coffeeshops we have in almost every city.
Caffe Istanbul is touted as a spicy blend made from Arabian coffee, taking inspiration from the city’s well-known Turkish coffee (though it’s not exactly the same, as Turkish coffee is unfiltered). To this reporter, it has a long, lovely lingering note of black pepper, and a scent like autumn leaves. Caffe Venezia, however, takes inspiration from the blends made in Italian coffeehouses in the 16th century, which eventually grew to the extensive coffee recipes in Italy today, worshipped by the rest of the world. This blend, in a gold capsule, has a scent like dried white flowers pressed in a book, and was mild, comforting, and creamy.
The tasting was held through an Espresso Appreciation class, where we were taught how to make espresso with the help of a Nespresso machine (just one press of a button; no levers or steam in your face). “I’ve worked in a coffee shop,” said our guide, Nespresso Coffee Adviser Bengie Paras. “It’s hard for me to make at least 10 consistent perfect espresso shots (with a traditional machine).”
He taught us to identify the parts of an espresso, namely the crema foam on top which protects the aroma, the body, which provides the flavor, and the heart, which follows through and lingers. He then taught us to foam our own milk, to be used to make our own cappuccinos.
Now, when we say perk, we’re not talking about the energizing effects of caffeine. Apparently, according to Nespresso Philippines’ Marketing Head Mileet Valdez, coffee appreciation classes such as the ones we had are offered to Nespresso Club members twice a week, on Thursdays and Fridays. One can become a Nespresso club member by registering their coffee-capsule machine via the website Nespresso.ph. “You can become a club member without buying the machine from us,” said Ms. Valdez, because one might have bought a set abroad, or else received one as a gift. There is one condition though: you must have bought the coffee capsules at least once, either online or in the Rockwell boutique.
Other perks include invitations and passes to events such as Art Fair Philippines or Cinemalaya, access to limited edition blends two weeks before their release, birthday discounts, and exclusive events: think one-night-only menus at places such as Mecha Uma.
Now this all makes it tempting to grab a machine, but isn’t the fun of coffee culture in going out and trying new blends? There are 25 varieties to choose from in the Nespresso line, and Ms. Valdez said, “We think that doing it at home is a response to changing coffee culture altogether.” Mindful of the costs of going out, she said, “People are entertaining more at home.”
“Coffee is also an element. They also need a good coffee system.”
But one of the problems of coffee capsule systems are the inevitable waste they leave behind, as if there weren’t enough trash in the world. Nespresso has a solution: recycling. The Nespresso capsules, made from aluminum, are collected at either the Rockwell boutique, a pop-up in Podium, or some Rustan’s branches. They can also be collected when you place an order online. The used capsules are then separated from the grounds with the grounds sent as fertilizer to partner organic farms, while the aluminum is reprocessed and sent for consolidation, and then smelting. That’s a pretty good ending to the cup that begins a day. — Joseph L. Garcia

Stripe, a $23-billion start-up, reckons with waning globalization

IN 2010, when Patrick Collison founded Stripe Inc. with his younger brother John, he thought the world was headed toward ever-increasing globalization, economic stability and international commerce.
Now, based on the events of the last couple years, no one holds “so Panglossian a view,” said the 30-year-old chief executive officer. “There are more headwinds to global economic integration than there were any time in the past 20 years,” Collison said. “That’s going to make global expansion more difficult for businesses in general.”
Stripe builds software and payment infrastructure that helps businesses accept money online and across borders. And even as nationalism is on the rise, Stripe will continue its de-facto march for globalization, as if its business depended on it, which in some respects, it does. Collison said the company will add a half-dozen countries in the next couple months to the 23 where service is widely available today.
Part of the wager investors have made on Stripe is that it can keep getting a piece of more transactions and in more places. However, the business is vulnerable to an economic downturn that would constrain consumer spending and the spread of a strain of politics that could place higher barriers on companies to operate internationally. So, it’s natural that Collison would see impediments to global trade as “obviously a bad thing.”
Yet, Stripe’s backers remain optimistic. After Tiger Global Management led a $245 million investment in September, the hedge fund put in another $100 million last week. Stripe said the deal pushes the company’s valuation to $22.5 billion. One thing that could drive further momentum for the business, according to Collison, is that red tape makes Stripe more valuable to companies. As doing business internationally becomes more complicated, more companies will want to pay for a service like Stripe to handle it for them, he said.
Collison will test this theory with a forthcoming expansion in the euro zone. The new markets — Estonia, Greece, Latvia, Lithuania, and Poland — are smaller economies that may have more trouble navigating the European Union’s volatile business climate as it grapples with the consequences of Brexit, the internet privacy rule known as the General Data Protection Regulation and a dimming economic outlook across the region. Collison said the countries have strong developer talent and vibrant tech scenes. Stripe should assess these markets on their potential and not their current size, he added.
Stripe will also offer services in Malaysia soon, and Collison said the company is eyeing India. Stripe has been testing the product with customers in India for about a year, and the world’s second-most-populous country is expected to generate more e-commerce growth in the future. However, local regulations pose obstacles to a nationwide rollout.
This year, in an attempt to keep a more global perspective, Stripe plans to make the majority of its hires in locales outside of its headquarters in San Francisco. It currently has engineering hubs in Dublin, Seattle, and Singapore. “There’s so much that’s market- and country-specific about money,” he said. “We don’t want to be this San Francisco company that swaggers in, thinks it knows everything and has all the answers.”
“There’s so much that’s market- and country-specific about money”
Collison, an Ireland native who dropped out of MIT to start Stripe, said many Americans have been focused on the wrong economic trends. “From my standpoint, the biggest thing in internet news, like if you were writing the annual report of the internet last year,” — he made typing motions in the air — “is barriers between countries getting higher and much more active, country-specific regulation.”
Even as Collison was eager to discuss some of the global economy’s greatest questions, he was reticent to discuss one of his own. He declined to comment on plans for an initial public offering.
Collison said Stripe benefits when online commerce grows. The idea harkens back to one Google has promoted over the years, that increased internet usage helps its ad business. Perhaps not coincidentally, Stripe has been hiring more people from the search giant. Diane Greene, the former CEO of Google Cloud, recently joined as the fourth outside director on Stripe’s board. The company also hired its chief technology officer and head of security from Google.
In addition to processing payments, Stripe runs some seemingly tangential project s. It publishes a quarterly magazine about software engineering called Increment; it acquired a forum for entrepreneurs called Indie Hackers; and it recently started printing books through Stripe Press about broad ideas in economics, technology and management.
The ventures have prompted some observers to scratch their heads. It’s a curious way for a young company to spend investor money. But if books, magazine articles and an online community can help someone make the jump to starting an online business, Collison reasons, then they might choose to accept payments through Stripe.
“These are not just feel-good projects,” Collison said. “There’s a real, underlying, strategic reason. Ultimately, what will determine Stripe’s success in 10, 20, 30 years is the overall vibrancy and success of the internet economy. If we really take that seriously — and we try to — then these are important.” — Bloomberg

Investors most bullish on US Treasuries since September 2016 — survey

Many investors are bullish on US Treasuries.

NEW YORK — Bond investors were the most bullish about owning US longer-dated government debt since September 2016, a couple of months before Donald Trump was elected US president, a J.P. Morgan survey showed on Tuesday.
Investors have piled into cash and low-risk Treasuries in recent weeks on worries over slowing global growth and trade tensions between China and the United States.
Moreover, the Federal Reserve in late January took back its promises of “further gradual increases” in interest rates, and said it would be “patient” before hiking rates again.
The share of investors who said they were “long,” or hold more longer-dated Treasuries than their portfolio benchmarks, exceeded those who were “short,” or hold fewer longer-term government debt issues than their benchmarks, by 9 percentage points. This was the widest margin since Sept. 12, 2016, J.P. Morgan said.
Last week, the share of investors who were “short” was greater than the share of “long” investors by 3 percentage points.
On Tuesday, benchmark 10-year Treasury yields were 2.670%, down from 2.704% a week ago.
Thirty percent of the investors surveyed said they were long on US government bonds, up from 25% the previous week.
The share of investors who said they were short Treasuries declined to 21% from 28% a week earlier.
The percentage of investors who said they were “neutral,” or holding Treasuries equal to their portfolio benchmarks, edged up to 49% from 47% a week earlier, J.P. Morgan said.
Active clients, which include market makers and hedge funds, were net long in longer-dated Treasuries by 10 percentage points, the most they have been net long since Dec. 17. They swung from a net short of 10 points in the prior week.
Trump won the presidential election on Nov. 8, 2016. — Reuters

Trading of Hanjin Heavy stocks suspended on KRX

TRADING of Hanjin Heavy Industries & Construction Co Ltd stocks have been suspended on the Korea Exchange (KRX) until end-March due to capital impairment, South Korean news agency Yonhap reported on Wednesday.
Yonhap said the shipbuilder reported losses ballooned to 1.32 trillion won ($1.18 billion) in 2018, from a 278 billion won loss in 2017. This was attributed to the continued losses from its Philippine affiliate, Hanjin Heavy Industries and Construction Philippines Inc. (HHIC-Phil), which operates a shipyard in Subic.
Yonhap quoted Hanjin Heavy as saying it expects its financial standing to improve once it implements debt-for-equity swaps with its creditors.
Busan-based Hanjin Heavy had built the shipyard in Subic in 2004, to take advantage of low wages in the Philippines.
However, a slump in the global shipbuilding industry caused new orders to dry up, adversely affecting Hanjin Heavy and HHIC-Phil’s operations.
HHIC-Phil is now under corporate rehabilitation. During a hearing at the Olongapo Regional Trial Court last Friday, HHIC-Phil said claims from banks, suppliers and other service providers reached over P48 billion as of Feb. 1.
The company is set to lay off over 3,000 workers on Feb. 15.

Best of Piedmontese wines in full display


GRANDI LANGHE is a very important regional bi-annual event in Italy that is exclusively for wine trade professionals, made up of wine buyers, wine press people, sommeliers, and wine business owners, both local and international. It is organized by the Consorzio di Tutela Barolo Barbaresco Langhe e Dogliani and the Consorzio di Tutela del Roero with its fourth edition just recently concluded — showcasing once more the best of Piedmontese wines. This year, just like its previous staging in 2017, the event was also prearranged in association with Albeisa, the organizer of the Nebbiolo Prima, to ensure that the Grandi Langhe come right after the Nebbiolo Prima.
While Nebbiolo Prima is a press-only event focusing on only Nebbiolo wines from the DOCG (Denominazione di Origine Controllata e Garantita) regions of the more renowned Barolo, Barbaresco, and the newer Roero, Grandi Langhe covers the entire wine portfolio of the wine rich and versatile Langhe area in the province of Cuneo in Piedmont, northern Italy. I was very fortunate to attend my very first Grandi Langhe event.
CHANGES TO GRANDI LANGHE
Aside from the change in dates, moving up from April to January this year to most likely complement Nebbiolo Prima, Grandi Langhe also made tweaks to improve its offering. The event has been condensed to two days from previous three, and the venue was reduced to one, the Palazzo Mostre e Congressi in magical Alba. Previously, the event was held in different locations, with the wines also subdivided via regions. Now all of the best that Piedmont wines have to offer were in one location, with booths at Palazzo Mostre e Congressi set-up according to the municipality of origin of the wineries.
Two hundred and six wineries participated with over 1,000 wines showcased. Most of the wineries in attendance had family members manning the booths, which made it even better during the interaction and tasting of the wines.
Aside from the new vintages of top Nebbiolo wines of DOCGs Barolo, Barbaresco, and Roero, others presented were the wines made from other Piedmont varietals like dolcetto, barbera, pelaverga, freisa and the region’s most important white varietal, arneis. Also present were some international grapes like chardonnay, riesling, sauvignon blanc, and pinot noir, which is called pinot nero here.
While there were easily over a dozen DOC and DOCG regions, my interest other than the Barolos and Barbarescos (which I will cover in this column in the coming weeks via my Nebbiolo Prima experience), were the beautiful wines from Roero Arneis DOCG and the surprisingly amazing sparkling wines from the Nebbiolo d’Alba DOC (Denominazione di Origine Controllata).
ARNEIS FROM ROERO
Roero is a vineyard area in the north-east of the province of Cuneo in Piedmont. Roero became a DOC region in 1985 and was promoted to a DOCG 20 years later in 2005. The red Roero DOCG wines are made from 100% nebbiolo grapes and are part of the regular nebbiolo prima. Red Roeros are known for being good value wines compared to their more illustrious neighboring DOCGs of Barolo and Barbaresco. Arneis, however, is the most common white wine varietal of Roero, and it is the varietal in the white DOCG counterpart of the region. Arneis can also be produced under Langhe DOC if not 100% coming from Roero.
Arneis is one of those varietals that can grow on you. Arneis wine is not as aromatic as the other popular whites like Chardonnay or Sauvignon Blanc, but it has its own appeal with a more subtle nose that shows white peach, green vegetables, and white flowers. On the palate, the wine always shows freshness, nice citrus, mineral notes and is quite dry and crisp.
I tasted a lot of very good Arneis wines at Grandi Langhe, including the following: Cascina Chicco Roero Arneis Anterisio 2018 (very fresh, clean, persistent peach finish), Marsaglia Societa Agricola Semplice Roero Arneis Serramiana 2018 (well-structured, pineapple, honeyed at the end), Tenuta Carretta Roero Arneis Cayega 2017 (crisp, green apple, minerals), and Giacomo Vico Roero Arneis 2017 (a burst of citrus, nice flintiness).
Based on the export price given to me, and as a small importer myself, a Roero Arneis should be priced between P1,000/bottle to P1,500 per bottle in our country — not cheap at all. In Manila, I know that Zen Asia carries Vietti, one of my favorite Barolo brands, and Vietti makes a very good Roero Arneis too, but this beautiful varietal is sadly more of a rare sighting than the norm among available wines in our market.
NEBBIOLO IN A NEW BUBBLY LIGHT
Nebbiolo remains the unbeatable superstar varietal of the region. According to the seminar I attended at the event, 37% of the entire Langhe wine region is planted to nebbiolo, followed by 27% of dolcetto, 15% of barbera, and the balance among all the other varietals combined. The previewed wines of the Barolo 2015 and the Barbaresco 2016 proved once more how amazing the Nebbiolo wines can be. But what really caught my attention was the Nebbiolo d’Alba DOC sparkling wines which, when done classic method, a.k.a. methode champenoise, can really be gorgeous.
Nebbiolo d’Alba is a DOC encompassing a larger area around the town of Alba. The DOC was bestowed in 1970, and was named after the nebbiolo grape from which they can only be made from. Instead of just still Nebbiolo wines, this DOC is now making arguably some of Italy’s best sparkling wines.
I am a bigger fan of Franciacorta than I am of Prosecco and the Philippines’ favorite sparkling wine of all time, Asti Spumante. The reason may be because Franciacorta (DOCG from Lombardy) is more of a clone of Champagne, made with the same methode champenoise and even the use of same varietals of chardonnay (majority) and pinot noir, but with pinot blanc instead of pinot meunier. Now, being a self confessed Nebbiolo lover, a champagne-style sparkling wine made with 100% nebbiolo is certainly not only interesting but also quite intriguing.
While admittedly I may have encountered the Nebbiolo d’Alba spumante in previous trips to Alba, it was in this particular trip to Nebbiolo Prima back-to-back with Grandi Langhe that I got my opportunity to taste and understand a bit more of this version of Italian champagne. During the Nebbiolo Prima, I got to taste these bubbly Nebbiolos during our evening dinners with wine producers. At one of the dinners, I was lucky to be in the same table as Gianluca Viberti, the avant-garde owner and wine maker of 460 Casina Bric. Gianluca is as passionate of a wine owner as I have ever encountered and it was enthralling for me to listen to him talk about his proud creation, the Nebbiolo Metodo Classico Rose Brut Nature. This nice rose de noir sparkling wine had a very alluring bright pink salmon color, relentless effervescence, flowers, violets, fresh strawberries, and was dry and super crisp at the end.
The 460 Casina Bric Nebbiolo Rose Brut Nature only comes in magnums and is also packaged in individual wooden box.
From my small sample size, the taste of Nebbiolo sparkling wines were quite different from champagnes, and indeed the Nebbiolo charm had transformed elegantly into this sparkling wine version. I am extremely impressed, but, having tasted just a handful of Nebbiolo d’Alba sparkling wines, it is hard to say how far this sparkling wine version will go.
Production of the Nebbiolo d’Alba sparkling wine is also still very tiny at the moment. Nebbiolo d’Alba sparkling wines can come in either Metodo Classico or the Martinotti method a.k.a. Charmat. Prices of Nebbolo d’Alba sparkling will not be cheap (priced just below Champagnes), but Nebbiolo wines are never low priced to start with.
For my next column, I will start my humble review of the Barolo, Barbaresco, and Roero wines I blind-tasted at the Nebbiolo Prima. More from Piedmont is coming.
The author has been a member of the Federation Internationale des Journalists et Ecrivains du Vin et des Spiritueux or FIJEV since 2010. For comments, inquiries, wine event coverage, and other wine-related concerns, e-mail the author at protegeinc@yahoo.com. He is also on Twitter at twitter.com/sherwinlao.

How PSEi member stocks performed — February 13, 2019

Here’s a quick glance at how PSEi stocks fared on Wednesday, February 13, 2019.

 
Philippine Stock Exchange’s most active stocks by value turnover — February 13, 2019.

Trade-in-goods deficit balloons to fresh peak in 2018

Trade-in-goods deficit balloons to fresh peak in 2018

Contracting arrangements finalized for common station

THE government signed on Wednesday an agreement with a contractor tasked to build the last component of the so-called Unified Grand Central Station — previously known as the common station for the Metro Rail Transit (MRT) and Light Rail Transit (LRT) lines, with the station due to open in late 2020.
The Department of Transportation (DoTr) and the consortium of BF Corp. and Foresight Development and Surveying Co. (BFC-FDSC) signed the P2.8-billion deal for Area A of the common station in North Avenue, Quezon City.
The common station will link four train lines: LRT-1, MRT-3, MRT-7, and eventually, the Metro Manila Subway. It will have three sections that are being built separately: Area A by BFC-FDSC, Area B by Ayala Corp. and Area C by San Miguel Corp., the concessionaire for the MRT-7 project.
DoTr Undersecretary for Railways Timothy John R. Batan said adding the subway to the train lines that are linked to the common station requires an expansion of the lot size of Area B, which will serve as the common concourse, from 7,000 square meters (sq. m.) to 14,000 sq. m.
“When we were planning for only three lines to connect with the common station, we estimated foot traffic at 500,000 in the opening year in 2020. (But the subway) means we need to accommodate 1.2 million passengers a day,” he said.
On the subway, Mr. Batan said department officials are scheduled to go to Japan next week to meet with the Japanese government to discuss the groundbreaking, originally scheduled for mid-January but moved due to “scheduling issues.”
“We’re coordinating with the Japanese on the scheduling. (But) they have started working on the design,” he said.
At the same event, Transportation Secretary Arthur P. Tugade announced that the department will inaugurate the Tutuban-Malolos portion of the North-South Commuter Railway (NSCR) on Friday.
“On Friday, we will be inaugurating… the Tutuban-Malolos portion of the Tutuban-Clark Railway. This is again one project that has been long delayed,” he said.
Mr. Tugade said the department has arranged for Sumitomo Mitsui Construction Co., Ltd. to build the train line, which will run 38 kilometers from Manila to Bulacan with 10 stops.
Mr. Batan said the NSCR project costs P777.55 billion, covering the 56 kilometers from Calamba to Tutuban, 38 kilometers from Tutuban to Malolos and 53 kilometers from Malolos to Clark. — Denise A. Valdez

Economic team still preparing projects for Comelec waiver

BUDGET Secretary Benjamin E. Diokno said the government is still preparing the list of major projects which it will submit to the Commission on Elections (Comelec) soon for exemption from the election ban on public works, apart from the foreign-backed works which are typically exempt.
“We recognize that there’s a forthcoming election, there will be an election ban. Fortunately, foreign-assisted projects are not covered by the ban,” Mr. Diokno said yesterday.
The poll body prohibits public works as well as the hiring and transfer of government workers between March 29 and May 12, ahead of the midterm elections on May 13.
“There are a lot of foreign-assisted projects. The train from Davao is ongoing,” Mr. Diokno added.
In August, the construction of the first phase of the P85-billion Mindanao Railway Project was reportedly due to start in January, with the preliminary right-of-way acquisition phase due to be completed by the end of 2018.
The railway project, which covers the Tagum-Davao-Digos segment, is projected to start operating by 2021.
“I think what is needed is a detailed list of projects, not blanket authority (from the Comelec),” Mr. Diokno said in a series of text message to BusinessWorld.
He added that the Department of Public Works and Highways as well as the Department of Transportation are “in the process of identifying local projects that we would like exempted.”
Late last month, Socioeconomic Planning Secretary Ernesto M. Pernia said he will bring up the proposal to the Cabinet at its Feb. 6 meeting, in a bid to push GDP growth amid delayed enactment of the 2019 national budget.
Mr. Pernia added that the economic managers will likely identify projects “of national importance” for exemption from the 45-day ban.
Asked to comment, Comelec Spokesperson James B. Jimenez said the commission cannot grant a blanket exemption before the proposal is made.
“(There’s still no) request… and the Comelec is very willing to help but we cannot give you a blanket assurance unless we see what the assurance is for,” Mr. Jimenez said in an interview.
“Show us that it’s a big ticket. Show us what it is; what is the impact, what is the reach, what is needed to be done now.”
The economic team of President Rodrigo R. Duterte has warned that a delay in enactment of the P3.757-trillion spending plan will hurt GDP growth, as it will leave new projects — including those under the government’s flagship “Build, Build, Build” program — unfunded this semester.
The NEDA also expects a reduction of 1.1-2.3 percentage points in the full-year GDP growth if the 2019 budget is not passed at all.
On Friday, the House of Representatives and the Senate ratified the proposed P3.757-trillion national budget for this year. The 2019 budget bill will then be forwarded to Malacañang for Mr. Duterte’s signature.
Meanwhile, Mr. Diokno said he is certain that the rice tariffication bill will be enacted, and ruled out a veto.
“Let’s wait, it could either lapse into law or the President will sign it. But certainly, a veto is not possible. I’m confident,” Mr. Diokno said in a news conference on Wednesday.
The rice tariffication bill was passed by the House on Aug. 13 and by the Senate on Nov. 14. It was transmitted to Malacañang on Jan. 15.
It is expected to lapse into law by Feb. 17 unless Mr. Duterte signs or vetoes the measure.
Mr. Diokno added that the economic managers sent a memo to the President strongly urging the signing of the bill.
The bill amends Republic Act No. 8178 or the Agricultural Tariffication Act, removing the government from the role of importing rice and allowing the staple to be imported more freely by the private sector while implementing a minimum tariff rate of 35% for rice shipped in from elsewhere in Southeast Asia. — Karl Angelo N. Vidal with Gillian M. Cortez

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