Ex-RCBC branch manager Deguito appeals conviction

January 29, 2019 | 12:02 am

FORMER Rizal Commercial Banking Corp. (RCBC) branch manager Maia Santos-Deguito, through her legal counsels, asked the Makati City court to reverse its Jan. 10 decision convicting her of eight counts of money laundering over the $81-million Bangladesh Bank heist in February 2016.
In the motion for reconsideration filed on Jan. 25, Ms. Deguito’s legal counsels said the prosecution failed to provide “direct proof” that she had knowledge of the said illegal transactions.
“Instead, it was only presumed by the Honorable Court from the alleged failure of Accused to do what the Honorable Court believes she should have done,” the motion read.
Judge Cesar O. Untalan of Makati City regional trial court Branch 149 on Jan. 10 found Ms. Deguito guilty of eight counts of money laundering and ordered her to pay a fine of $109-million while sentencing her to imprisonment of four to seven years for each count.
The case stemmed from the transfers from the account of the Bangladesh Bank with the Federal Reserve Bank of New York to four fictitious accounts opened at RCBC’s Jupiter Street branch in Makati City.
The court said Ms. Deguito “facilitated these transactions to their full and complete implementation without any sign of hesitation.”
The legal counsels of Ms. Deguito upheld that she verified the validity of the remittances and their sources and she met with the owners of the accounts before they were opened.
“Accused action was not the action of a guilty person. If it were true that the account owners ‘are all non-existing and fictitious persons; and accused Deguito was very well aware of the fact,’ then it was highly improbable that she would voluntarily and unnecessarily expose herself to the risk of discovery and punishment by agreeing to meet in public places like Midas Hotel and Casino, and even bringing two other persons with her,” they said.
They also said that Ms. Deguito did not have the authority to stop the transactions, disputing the court’s decision that she should have done such.
They claimed that the court “ignored the established fact” that remittances in the cases were credited to the accounts via “Straight Through Process.” They also added that the RCBC’s higher-ups put a hold on the transactions and then lifted it after determining the validity of the remittances.
They also said the testimonies that Ms. Deguito facilitated the transactions which the court relied on “should not be given merit” as they were “hearsay” only.
They said the court “misunderstood the meaning of a money laundering offense under the law” as the elements required for the said crime such as monetary instrument or property and the accused’s knowledge that this would be involved in an unlawful activity were not present when the accounts were opened.
The counsels also said the court imposed the wrong penalty on Ms. Deguito as the maximum imposable fine against her is only P24 million as she was charged of violation of Section 4(f) of Anti-Money Laundering Law which has a fine ranging from P1.5 million to P3 million and imprisonment of four to seven years. — V.M.M. Villegas

PHL bet Karen Gallman wins Miss Intercontinental

January 29, 2019 | 12:02 am

PHILIPPINE representative Karen Gallman made history when the 26-year-old analyst from Ubay, Bohol bested 83 other official delegates to win the country’s first Miss Intercontinental crown on Jan. 27. Ms. Gallman is the second queen from the 2018 batch of Binibining Pilipinas winners to win an international crown after Catriona Gray became the country’s 4^th Miss Universe in Bangkok, Thailand in December.

Primehomes set to complete two Larossa towers by 1st half

January 29, 2019 | 12:02 am

PRIMEHOMES Real Estate Development, Inc. set to complete two residential towers at its Larossa project in Capitol Hills, Quezon City within the first half of 2019.
In a statement, Primehomes said its Sampaguita and Magnolia buildings, which both have 10 storeys, will be open by June. The towers are part of the 3.6-hectare mid-rise residential community Larossa, along South Zuzuarregui Street corner Capitol Hills Drive, Barangay Matandang Balara.
A company representative said Sampaguita is currently 98% completed, while Magnolia is 91% completed.
A studio unit, with a size of 23.4 square meters (sq.m.), goes for P2.9 million. Studio Premier units, with sizes ranging from 28.5 sq.m. to 38.74 sq.m., are priced between P3.9 million to P5.3 million.
One-bedroom units are sized between 31.2 sq.m. to 69.12 sq.m., with prices ranging from P4.3 million to P9.6 million.
Amenities include an infinity pool, fitness area, and lush gardens.
Camia, the first tower at Larossa, was completed in 2017.
The Larossa project will have a total of 2,869 units.
Primehomes noted Larossa has a good location, given its proximity to UP Town Center, University of the Philippines Diliman, Miriam College, and Ateneo De Manila University.
“Giving more Filipinos an opportunity to live in one of the most premium residential communities, Primehomes offers its easy move-in program where interested buyers can treat themselves with the perfect condo unit at only 3% spot cash. The limited time offer provides homebuyers an option to settle 7% of the property cost within 1 year at 0% interest, while the remaining 90% must have pre-approved bank financing,” Primehomes said in a statement.
For Larossa, Primehomes partnered with Design Coordinates, Inc. and Metro Stonerich Corp. for the construction of the towers.
Aside from its flagship project Larossa, Primehomes’ other projects include The Green Line City, an eight-hectare mixed-use land development in Taguig City. — Vincent Mariel P. Galang

Goyo: The Boy General now streaming

January 29, 2019 | 12:01 am

BRASH ladies’ man Gregorio “Goyo” del Pilar rises to become one of the Philippines’ youngest generals in this historical epic sequel to Heneral Luna which is now streaming on Netflix. The historical biopic is directed by Jerrold Tarog and stars Paulo Avelino as the titular hero.

Permanent income

January 29, 2019 | 12:01 am

RETIRING after all those years of hard work is something to look forward to, but how can you be so sure that your financial situation is ready for it? Reality bites. Retirement planning is a financial necessity that should commence as soon as one finds some stability in his chosen career.
One of the more difficult issues in retirement planning is the determination of how much money to set aside so that the retiree will not outlive his money. It is important to maintain a livable income for life, to ensure that one has saved enough. How much should you spend for consumption now and how much should you save for retirement?
There are two approaches that you could take to computing how much you should save for your retirement: (1) aim for a target replacement rate of pre-retirement income, and (2) aim for maintaining the same level of consumption spending before and after retirement.
When you use the first approach, you first compute the amount you need to have accumulated in your personal retirement age. Then you compute the annual amount of savings needed to reach the future rate. Note, however, that this does not necessarily result in your having the same consumption level after retirement as you did during your working years.
If you plan to do the second approach, you will aim to save in order to spend the same amount of consumption before and after retirement. This implies that you need a constant stream of consumption at the same level in each of the next years of your existence.
Economists call the present value of one’s future labor income human capital and they call the constant level of consumption spending that has a present value equal to one’s human capital permanent income. This is computed by equating the present value of labor income until retirement with the present value of consumption spending over the remaining life cycle. It will allow determination of the regular savings needed to ensure constant consumption over one’s life cycle.
Milton Friedman was the pioneer thinker of the theory of “the permanent income” and not year-to-year income as the determining factor when assessing total consumption outlay. Although Friedman’s main objective was to challenge the traditional Keynesian consumption function, and in the end influence macroeconomic policy decisions, it is especially relevant for those seriously thinking about retirement.
The idea is one should smooth out spending over his career based on expectation about the amount of money to be earned over a lifetime, as opposed to only current income. Otherwise, the unintended benefit is a drastically downsized lifestyle just when one is in the twilight of his natural existence.
Admittedly, permanent consumption spending is based on what one knows about the future and on information that is readily available. Thus the concept while theoretically sound is not as easy to implement because of the many assumptions to be made about the future. Still, there is merit to consider one’s permanent income in calculating the magic number needed once retirement date comes into the picture.
After all, how many times have we seen retirees suddenly adjusting to an unfamiliar environment because they did not save enough. It is better to aim for a secured and constant quality of life for one’s lifetime so the journey at one’s end of day is peaceful and graceful. And may I paraphrase a quote from writer Gene Perret, “Retirement — it is nice to get out of the rat race, but do you have to learn to get along with less cheese?”

Benel D. Lagua is executive vice-president at the Development Bank of the Philippines. He is an active FINEX member and a long time advocate of risk-based lending for SMEs.

PHL stock index seen to end year at 8,600 level

January 29, 2019 | 12:01 am

LOCAL BROKERAGE firm COL Financial Group, Inc. is “cautiously optimistic” that the Philippine Stock Exchange index (PSEi) would end the year at the 8,600 level, as it expects inflation to further slow down and the peso to strengthen against the US dollar.
During a media briefing in Ortigas Center on Monday, COL Financial officials said inflation is seen to have peaked last year and will continue to fall this year, which may put an end to interest rate hikes by the central bank and increase consumers’ confidence to spend.
“Although there are reasons why we should be optimistic about this year, I feel like we have to be cautiously optimistic, I feel like the upside is capped,” COL Financial Chief Equity Strategist April Lynn C. Lee-Tan said during the briefing.
On Monday, the PSEi closed flat at 8,053.92.
Ms. Lee-Tan identified several risks that may hinder the growth of the PSEi this year, the first being the “twin deficits” — the budget deficit and the current account deficit. She noted the “twin deficits” will “limit the peso’s strength and interest rate decline.”
“Our current account is actually in the deficit because of the importation of a lot of capital goods, and if the government will pursue the “Build, Build, Build” program, we will continue to see a high level of budget deficit and current account deficit to continue,” Ms. Lee-Tan said.
She also flagged an expected slowdown in investment and government spending this year, due to the delay in the passage of the 2019 national budget and the election ban. Other risks include a “worse than expected” global economic slowdown, and tighter global liquidity conditions.
“We’re just expecting the market to go back to the mean. Mean reversion lang [only]… So that’s just our expectation of the market,” Ms. Lee-Tan said.
COL Financial expects banking, consumer, cement, and airline sectors are expected to rise this year. Mixed outlook is seen for property, power and telecommunications sectors. — Denise A. Valdez

Quezon City is most searched location on Lamudi

January 29, 2019 | 12:01 am

PROPERTY SEEKERS consider Quezon City as the top location when looking for houses, apartments, land and foreclosed properties, according to online property marketplace Lamudi.
In its report “The Digital Property Seeker Series 2019: 2018 Real Estate Market Overview,” Quezon City emerged as the most searched location in the following categories: house, foreclosed properties, land, and apartment.
For the house category, Quezon City accounted for 21% of the visits on Lamudi, more than double Parañaque City, which was in second place with 10%. They were followed by Las Piñas City (6.41%), Pasig City (3.83%), and Cebu City (3.07%).
“Those choosing to set up their residence in these areas could easily access the vastly improved public transportation network promised by the BBB (Build, Build, Build),” Lamudi said.
Among the major infrastructure projects in Quezon City are the first phase of the Metro Manila Subway Project at Mindanao Avenue, Tandang Sora and North Avenue, in Quezon City, and the Manila Metro Rail Transit System Line 7 (MRT-7) that would run from San Jose Del Monte, Bulacan to North Avenue in Quezon City.
For foreclosed property, Quezon City also topped the search category with 7% of the sessions, followed by Dasmariñas City (5.57%), Bacoor City (4.18%), Las Piñas City (3.30%), and Imus (3.16%).
Lamudi said the interest in foreclosed properties in several cities in Cavite “shows that investors are considering locations in different parts of the country.”
For lots, Quezon City was still the most searched location on Lamudi, followed by Tagaytay City, Antipolo City, Santa Rosa City, and Davao.
Lamudi noted apart from Quezon City, many property seekers are looking at investing in land outside of Metro Manila.
“While it is not conclusive, these searches could be in response to the government’s initiatives to decongest Metro Manila,” it added.
Quezon City also dominated the sessions made for apartments accounting for 24.71%, followed by Makati City (11.95%), Manila (7.53%), Cebu City (5.42%), and Pasig City (6.01%).
“It generally implies that apartment living in metropolitan areas would naturally rank high in this category. Apartments are a less costly alternative to houses and in some cases, condos. It is a logical choice for those who are living and working in major metropolitan areas,” Lamudi said.
For condominiums, Makati took the top spot, accounting for 17.8% of the sessions made on Lamudi. It edged Quezon City (15.37%), Taguig City (10.91%), Manila (11.68%), and Mandaluyong City (10.68%).
“It is no surprise that Makati occupies the number one spot. The city is home to the country’s premiere business district. Office workers could simply walk to their workplace from their condo. What is revealing about this data is the placement of Quezon City at number two. The increased conveniences of public transport has made it easier to come from this location with the MRT and LRT lines intersecting in Cubao, a main junction,” Lamudi said. — Vincent Mariel P. Galang

Which components of the Philippine economy contributed the most to its growth in 2018?

January 29, 2019 | 12:00 am

East-West Seed tops 2019 SSEA index

January 29, 2019 | 12:00 am

East-West Seed topped the 2019 South and Southeast Asia (SSEA) Seed Index, which evaluates seed companies in terms of their accessibility, especially to small farmers.
“We are extremely honored by this achievement. East-West Seed has always been synonymous with serving smallholder farmers since it was founded in 1982 and it is evident in everything we do to this day,” East-West President and Chief Executive Officer Bert van der Feltz said in a statement.
Netherlands-based Access to Seeds Foundation launched the second index, which evaluated 24 companies that operate in South and Southeast Asia.
In the first seed index in 2016, East-West Seed ranked first in the Global Vegetable and East Africa indices.
Access to Seeds Foundation Executive Director Ido Verhagen said the evaluation is necessary to see where companies should improve in order to serve farmers better.
“Seed companies play a key role in supporting smallholder farmer productivity. By measuring and comparing their performance, companies can see where improvements can be made to serve farmers better. Research agencies or investors interested in reaching smallholders use our research to identify companies to partner with,” Mr. Verhagen said.
According to Access to Seeds, East-West Seed demonstrates leadership as it has a breeding program for a large number of crops. The foundation stated that East-West Seed’s “high score in Seed Production can be attributed to its collaboration with smallholder farmers, who account for 95% of its production.”
East-West Seed distributes seeds for carrot, cabbage, cauliflower, eggplant, lettuce, melon, okra, pepper, pumpkin, squash and tomato.
“We see a growing attention for enabling small farmers to cope with the effects of climate change. This makes the Index very timely because seed companies play a key role in delivering new tools and technologies in the hands of smallholder farmers,” Coosje Hoogendoorn, senior research lead of Access to Seeds, said.
“Findings presented by the Index feed the dialogue on how the seed industry can support a growing food production in the world while remaining within planetary boundaries and reduce climate change impact,” she added. — R.J.N. Ignacio

How PSEi member stocks performed — January 28, 2019

January 29, 2019 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, January 28, 2019.

Philippine Stock Exchange’s most active stocks by value turnover — January 28, 2019.

Growth by elections and FDIs by PSA liberalization

January 28, 2019 | 9:57 pm

At the UP School of Economics Alumni Association (UPSEAA) sponsored “Economic Briefing” on Jan. 25, the speakers were DBM Secretary Benjamin Diokno and NEDA Secretary Ernesto Pernia. My former teacher in undergrad and graduate economics, Sir Ben Diokno said in his presentation that with high GDP growth in 2017 and 2018, “Duterte hit the ground running.”
During the open forum, I said that with growth of 6.9%, 6.7% and 6.2% for 2016 to 2018 respectively, it should be called “Duterte hit the ground screeching and decelerating.” Compared to the ASEAN 6, our neighbors have flat lining or increasing growth, only the Philippines has a declining growth. Sir Ben said we should not include 2016 in the analysis because it was an election year and all election years have higher growth than the following years.
I checked the numbers and I found that he is partly right, and partly wrong because we should include those election years in our analysis. Below are growth rates for Philippine election years 2007, 2010, 2013, 2016, and the respective years after them (See Table 1).

The above numbers show that (1) In 2007, All 10 economies had higher growth than 2008 because the latter was the start of the global financial turmoil that started in the US; (2) In 2010, again all 10 economies had higher growth than 2011 because 2010 was a recovery year after the 2008-2009 economic turmoil; (3) In 2013, all 10 economies except Vietnam and S. Korea had higher growth than 2014; (4) In 2016, all 10 economies had lower growth than 2017, except the Philippines.
In short, since 2016 was a bad year in the region compared to 2017, Philippine growth should have retained if not surpassed the 6.9% growth, but the opposite happened.
I sustain my statement in my column last Friday, that Dutertenomics is lousy in its macroeconomic management. Rising taxes, rising inflation, rising interest rates, and declining growth.
One saving grace that Dutertenomics can do to help reverse this bad trend is to ensure legislation of investments liberalization, foreign direct investments (FDI) especially since these will bring in more foreign capital and technology to blend with local capital and technology in serving local market and labor force.
FDI election
We have the lowest FDI inward stock among the important East Asian economies. We have low volume of air passengers (many of them, from domestic flights) and port container traffic, in TEU, 20-feet equivalent units (See Table 2).

We need to liberalize the entry of more foreign airlines and shipping lines because we are outside the Asian mainland and we are an archipelago with many detached islands.
There are bills in Congress now amending the Public Service Act (PSA, 1936). That 83-year- old law has many sectors listed as “public utilities” and the 1987 Constitution prohibits foreigners from owning more than 40% equity for these utilities.
In these congressional bills — HB 5828 (passed on Third Reading) and SB 1754 (still a Committee Report) — telecommunications and transportation will be lifted out of the list of “public utilities.” This means foreign investors can own perhaps up to 100% equity in telecoms, shipping lines, airlines, and possibly bus lines.
Last December, my family suddenly changed plans and decided to travel to Iloilo. By then airfares were 2x, up to 4x their regular rates. We need more competing airlines or more planes per existing airline to have more flights on peak travel season, more planes require more investments.
So I decided to drive the car via RORO ships again. The problem is waiting for many hours in the ports. We need more competing shipping lines or more boats per existing shipping company. More big boats require more investments.
If FDI and PSA liberalization are done by law before the term of the current Congress is finished, it will be a big boost for Dutertenomics and help pull the economy upwards in the next three years.

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.
minimalgovernment@gmail.com

Where is the Philippines in Global Hunger in ASEAN?

January 28, 2019 | 9:55 pm

What is the score of global hunger in ASEAN?
The Global Hunger Organization just released its 2018 results. The Global Hunger Index (GHI) has four indicators:

• Undernourishment: the share of the population that is undernourished (i.e., whose caloric intake is insufficient);

• Child wasting: the share of children under the age of five who are wasted (i.e., who have low weight for their height, reflecting acute undernutrition);

• Child stunting: the share of children under the age of five who are stunted (i.e., who have low height for their age, reflecting chronic undernutrition); and

• Child mortality: the mortality rate of children under the age of five (in part, a reflection of the fatal mix of inadequate nutrition and unhealthy environments).

“A GHI value of 0 would mean that a country had no undernourished people in the population, no children younger than five who were wasted or stunted, and no children who died before their fifth birthday. A value of 100 would signify that a country’s undernourishment, child wasting, child stunting, and child mortality levels were each at approximately the highest levels observed worldwide in recent decades. (https://www.globalhungerindex.org/).

This comparison will hopefully alert policymakers and politicians on the extent of hunger in the Philippines. The analysis focuses on ASEAN countries with large populations – Indonesia, the Philippines, Vietnam, Thailand, Malaysia and Myanmar. Peru was added as comparator as it has a great record in hunger reduction.
OVERALL
In the past 18 years, Myanmar led with a massive decline in GHI between 2000 and 2018, followed by Vietnam. Thailand was next. Indonesia and the Philippines had the highest GHI in 2018, followed by Myanmar.
UNDERNOURISHMENT
Indonesia and the Philippines had the highest degree of undernourishment. Myanmar and Vietnam recorded a rapid reduction from 2000 to 2018.
CHILD WASTING
The Philippines had the highest index among six countries. Myanmar and Vietnam led in the reduction.
CHILD STUNTING
Indonesia, the Philippines and Myanmar had the highest severity. Indonesia, surprisingly, posted an increase in stunting since 2000.
CHILD MORTALITY
Myanmar had the highest mortality, followed distantly by the Philippines, and Indonesia. Myanmar also posted the largest reduction, followed by Indonesia. Malaysia already posted a low value since 2000.
IMPLICATIONS FOR THE PHILIPPINES
The Philippines has a long way to go in reducing hunger. A key contributory factor to hunger is poverty. Low income and high food costs generally limit food quantity and quality intake. The Philippines had a far higher incidence of poverty of 21.6% compared to its neighbors: Malaysia (0.4%), Vietnam (7%), Thailand (8.6%) and Indonesia (10.6%). Myanmar posted 32.1% (Asian Development Bank).
First, since two thirds of all poor come from the farm and fishery sectors, Philippine government policies and programs must address income-raising crop productivity and diversification as well as nutrition. Second, stakeholders can learn from Peru’s experience.
Peru has achieved a good record. Between 2000 and 2018, its GHI decreased to 8.8 from 20.9, unmatched by the ASEAN countries. For example, between 2007 and 2014, stunting among children under the age of five fell from 29% to 14%. The government ministries, regional governments, health professionals and NGOs worked together to reduce child stunting caused by chronic undernutrition. The first 1,000 days in a child’s life are crucial. Children need good nutrition if they are going to develop to their full potential.
(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.)

Rolando T. Dy is the co-vice chair of the MAP AgriBusiness Committee and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.
map@map.org.ph
rdyster@gmail.com
http://map.org.ph