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Foreign direct investments continue to drop in October

By Melissa Luz T. Lopez, Senior Reporter
FOREIGN investments to the Philippines sustained a three-month slide in October, the central bank reported on Friday, casting doubt on forecasts of another banner year amid a slump in sentiment.
Foreign direct investments (FDI) plunged to $491.37 million for the month, marking a 74.2% plunge from the $1.904 billion tallied in October 2017.
This sustains a third straight decline in inflows, and is the lowest level logged since July 2017 when investments shored up just $344.19 million.
FDIs infuse additional capital for the Philippine economy, which open up more jobs and spur domestic activity by supporting business expansions.
The drop was attributed to a sharp decline in equity inflows, with the net investments plunging to $98 million from $1.529 billion a year ago. October saw gross placements at $112 million but cancelled out by $14 million in outflows. This is a far cry from the $1.595 billion investments a year ago, which was only met by $66 million in withdrawn capital.
Reinvested earnings, or funds which foreign businesses chose to keep here to fuel business expansions, slightly rose to $62 million from $57 million previously.
Investments in debt instruments or inter-company borrowings also rose to $331 million from $318 million, up 4.2% year-on-year.
In a statement, the BSP said bulk of the investments went into manufacturing; real estate; financial and insurance; electricity, gas, steam and air-conditioning supply; and wholesale and retail trade activities.
October’s plunge brought the 10-month FDI tally amounted to $8.53 billion, just 1.8% higher than the $8.376 billion received during the comparable period in 2017.
The biggest investment sources are Singapore ($905.65 million), Hong Kong ($263.97 million), China ($189.33 million), Japan ($183.51 million) and United States ($120.21 million), the central bank added.
The sustained decline in FDI inflows cast doubt on the BSP’s $10.4-billion forecast for 2018, which was revised from the initial $9.2-billion estimate and is higher than the $10.049 billion tally in 2017.
One analyst said the slump may be due to global geopolitical tensions, which kept investors wary of making big bets.
“I think the general sentiment on the uncertainties brought about by the US-China trade war has momentarily affected investor sentiment for the Philippines. Even as studies assert that a continued trade war may actually be beneficial for countries like the Philippines, the uncertainties are seemingly strong and forcing potential investors to wait and see again,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines.
“However, recent developments on the trade showdown showing improvement on general sentiment, may sway the negative tide of uncertainty,” he added.
Still, Mr. Asuncion flagged that while FDI inflows may improve, it “may not be enough” to realize the full-year estimate.
Michael L. Ricafort, economist at the Rizal Commercial Banking Corp., also noted that lower FDIs may have been due to the passage of package two of tax reform, which prompted a “wait-and-see” stance among investors as they seek clarity on the fate of fiscal incentives scheme in the country which the bill wants to revamp.
Rising inflation, higher interest rates and a weaker peso may have also turned foreign businesses away, but Mr. Ricafort said that FDIs “could start to pick up” now that prices are easing.

BSP downplays effect of Hanjin default on banking industry

By Melissa Luz T. Lopez, Senior Reporter
and Denise A. Valdez, Reporter
LOCAL banks’ exposure to embattled firm Hanjin Heavy Industries and Construction Philippines (HHIC-Philippines) is “negligible,” a senior central bank official said, noting that local lenders are well-placed to weather these loan defaults.
The South Korean shipbuilder’s unit based in Subic Bay filed for corporate rehabilitation last Jan. 8, leaving some $412 million in outstanding loans from Philippine banks in limbo.
Bangko Sentral ng Pilipinas (BSP) Officer-in-Charge Deputy Governor Diwa C. Guinigundo said they have received a report about Hanjin’s fallout, but an initial assessment by the regulator shows that the banking industry can weather this blow.
“Based on our initial assessment, some banks are exposed to Hanjin but relative to both total loans of the banking system and total FCDU (foreign currency deposit units) loans of the banking system, their exposure is very negligible,” Mr. Guinigundo said in a text message when sought for comment.
A report claimed that the Rizal Commercial Banking Corp. (RCBC), the state-owned Land Bank of the Philippines, Metropolitan Bank & Trust Co. (Metrobank), Bank of the Philippine Islands (BPI), and BDO Unibank, Inc. are now working together to cover their combined loan exposure to the Korean conglomerate. The lenders are said to be working to take control of Hanjin’s property in Zambales, with assets estimated at $1.6 billion.
This did not prevent investors to take caution, with bank stocks at the Philippine Stock Exchange seeing the biggest plunge during Friday’s session. By market close, the financials sub-index slipped by 2.54% amid the PSEi’s 1.02% decline and the broader all shares-index’s 0.73% dip.
Stock prices of three of the listed banks slid in the wake of the news. Shares at RCBC suffered the steepest blow as it dropped by 9.12% on Friday, while Metrobank and BPI stock prices went down by 4.82% and 4.76%, respectively. Meanwhile, BDO shares steadied from Thursday’s close.
The involved banks are among the 10 biggest lenders in the Philippines.
“The banks in compliance with the BSP’s regulations have risk management systems in place, they are very liquid and their profitability has been sustained. Their loan loss provisioning is more than a hundred percent. They can very well handle and manage this specific case,” Mr. Guinigundo added.
The central bank has long introduced a set of standards to manage credit risks by asking big banks to maintain capital buffers worth at least 10% of their assets, as well as maintaining a 25% single borrower’s limit (SBL) to manage exposures.
In particular, the SBL caps credit lines extended to a single person or firm to ensure that the banks will not fold even if that borrower will suddenly default.
However, Mr. Guinigundo declined to give further comments, noting that Hanjin’s fate is now pending before a regional trial court in Olongapo. Overall, he said that local banks are “very strong” and adequately capitalized overall.
In a separate statement, BDO President Nestor V. Tan admitted that they have an exposure to Hanjin but they are “more than adequately provided for” in terms of potential losses.
CHINESE FIRMS KEEN ON SUBIC SHIPYARD
Meanwhile, two shipbuilders from China have expressed interest in acquiring HHIC-Philippines, according to an official of the Department of Trade and Industry (DTI).
“Over the past two days, we have gotten in touch again with the mga pumuntang investors dati [investors who visited before]. Sinabi natin situation and malaki interest nila [We told them about the situation and they’ve shown great interest]… Dalawa from China [Two from China],”
Ceferino S. Rodolfo, DTI undersecretary and Board of Investments (BoI) managing director, said during a DTI press briefing in Makati City on Friday.
While naming the companies, Mr. Rodolfo described them as big shipyard operators in China. He said representatives from the Chinese companies have asked him for more information about HHIC’s Subic shipyard operations.
Last Tuesday, South Korean news agency Yonhap reported the Philippine unit of Hanjin filed for corporate rehabilitation almost 13 years after it was established.
In a statement, Subic Bay Metropolitan Authority (SBMA) said “serious financial trouble” pushed Hanjin to file for corporate rehabilitation with the Regional Trial Court of Olongapo City.
SBMA Chairman Wilma T. Eisma said Hanjin officials informed her that the company’s debts reached around $400 million from Philippine banks, and around $900 million from South Korean lenders.
“The bottomline is that the company said it does not have enough cash to repay its loans, and that it cannot continue with its operations under these circumstances,” Ms. Eisma was quoted in the statement as saying.
Mr. Rodolfo said while a number of investors have already been looking at opportunities in the Philippines for shipbuilding and repair — some of which have also visited Hanjin in Subic — the recent news sparked interest from investors.
“If you look at the assets of Hanjin, it’s very specialized for the very big vessels, international vessels. Very few companies would have that capability to produce those kinds of ships and market,” he said, noting that the two Chinese companies are in the business of building big ships, and the other one in producing roll-on, roll-off (RoRo) ships too.
“From an industry development perspective, our interest in the Philippines is to produce the smaller ones, those that would provide to us the RoRo ships. So we’re looking at all possibilities,” Mr. Rodolfo added.
The BoI official also recalled that around two to three investors visited the Subic shipyard last year, but HHIC-Philippines was valued then at $2.6 billion. Right now, he said the enterprise value of HHIC-Philippines is estimated at $1.6 billion.
Mr. Rodolfo noted the company has reduced its pool of workers to 3,800 from around 40,000 workers when it was at its peak.
SBMA said in its Wednesday statement the company is still working on six multi-million building projects.
Trade Secretary Ramon M. Lopez said the DTI is eager to find a white knight for HHIC-Philippines.
“The first objective natin [of DTI] is ma-replace siya ng [to replace it with] another shipbuilder that will take over,” he said during the briefing.
“Their problem really is the working capital, cash flow that is basically hampering their operation. So ang kailangan masuportahan [where support is needed] is first, to assist in the possible strategic investor coming from the industry to be the one doing, taking over. In other words, buying that business,” Mr. Lopez added.
HHIC maintains a shipyard at the Subic Bay Freeport Area since 2006 and has hired over 22,000 workers prior to this week’s shutdown.

Duterte tops Pulse Asia trust ratings survey

PRESIDENT Rodrigo R. Duterte remains the most trusted among the four top national officials, according to Pulse Asia’s December 2018 Nationwide Survey on the performance and trust ratings of key government officials.
But Mr. Duterte’s ally, House Speaker Gloria Macapagal-Arroyo, is the least trusted top official, according to the survey.
Released on Friday, Jan. 11, the Pulse Asia survey results for the month of December last year showed that Mr. Duterte’s trust rating was at 76%, up by four percentage points from his rating in September.
The trust ratings of Vice-President Maria Leonor G. Robredo (56%) and Senate President Vicente C. Sotto III (66%) did not change since the September survey.
The trust rating of Ms. Arroyo was 21%, up by two percentage points from her 19% trust rating in September.
The number Filipinos who distrust Ms. Arroyo has increased by two percentage points to 45% from 43% in September.
Meanwhile, Mr. Duterte’s distrust rating has decreased by three percentage points to 6% from 9% in September. The distrust ratings of Ms. Robredo and Mr. Sotto remained at 17% and 6%, respectively.
PERFORMANCE RATINGS
The same survey, which was conducted from Dec. 14 to 21 last year with a sample of 1,800 representative adults (18 years old and above) nationwide, showed that the approval rating of Mr. Duterte’s performance has increased by six percentage points to 81% from September’s 75%.
The Approval rating of Ms. Robredo rose by 1 percentage point in December from the previous 61%. From 73%, Mr. Sotto’s approval rating rose to 74%. Ms. Arroyo, for her part, got 27%.
“Most Filipinos express appreciation for the performance of President Rodrigo R. Duterte (81%), Vice-President Maria Leonor G. Robredo (62%), and Senate President Vicente C. Sotto III (74%),” said the report. “In contrast, a big plurality of Filipinos (43%) are critical of the work done by House Speaker Gloria Macapagal-Arroyo. Levels of indecision regarding the performance of these national government officials range from 13% for President Duterte to 30% for House Speaker Macapagal-Arroyo. Between September and December 2018, the only notable movement in these figures is the increase in the approval rating of President Duterte (+6 percentage points).”
Pulse Asia noted that there was no comparative performance data available for Ms. Arroyo because she was not included in the performance question in the September 2018 survey. She assumed the House leadership on July 23, 2018, less than three months before the survey was conducted.
“Just as President Duterte scores majority approval and trust ratings across geographic areas (69% to 96% and 67% to 91%, respectively) and socio-economic groupings (78% to 87% and 74% to 82%, respectively), Senate President Sotto also has the approval and trust of most Filipinos in the different geographic areas (66% to 77% and 60% to 73%, respectively) and socio-economic classes (72% to 74% and 63% to 68%, respectively),” the report said.
As for Ms. Robredo, the Pulse Asia said she “registers majority approval and trust ratings in most geographic areas (64% to 70% and 55% to 60%, respectively) and Classes D and E (61% to 72% and 55% to 62%, respectively). The latter also has a majority approval rating in Class ABC (56%). However, less than half of those in this socio-economic grouping trust the Vice-President (49%).”
On Ms. Arroyo, “the only majority figure obtained by the House Speaker is her 52% distrust rating in Metro Manila. Big pluralities to near majorities in the rest of Luzon (43% and 46%, respectively), the Visayas (47% and 49%, respectively), and Class D (44% and 46%, respectively) are critical of and distrust House Speaker Macapagal-Arroyo. Around the same percentages either disapprove of or are undecided about the latter’s performance in Metro Manila (46% versus 38%) and Class ABC (39% versus 32%) while she records essentially the same distrust and indecision figures in Mindanao (37% versus 38%), Class ABC (47% versus 31%), and Class E (42% versus 40%),” the report states.
“Public assessment of the lawmaker’s performance is split three ways in Mindanao and Class ABC with 29% to 33% being appreciative of what she did in the past quarter, 29% to 32% expressing ambivalence on the matter, and 38% to 39% having a negative opinion about it.”
Sought for comment, Presidential Communications Secretary Martin M. Andanar said in a statement: “The latest Pulse Asia Survey, which gives President Rodrigo Roa Duterte an 81% Approval and 76% Trust Rating, is a testament to how this administration is attuned to the needs of the greater majority. This government will continue to focus on the goal of giving a ‘comfortable life for all’ rid of hard drugs, criminality and corruption.”
For her part, Ms. Arroyo said: “Those trust ratings are not new to me. Remember, I was pilloried very much when I was president so I haven’t done much to overcome that because I just have to do my work. My thrust is to concentrate on my work. I already said it the last time, I am not a stranger to those kinds of ratings.”
SENATE, HOUSE, AND SUPREME COURT
From September to December 2018, the Pulse Asia survey results showed that gains in public approval were experienced by the Senate (69%, up by six percentage points), the Lower House (66%, up by 10 percentage points), and the Supreme Court (64%, up by 12 percentage points).
“In terms of the trustworthiness of these entities, the only marked movements are the: (1.) increase in trust ratings of the House of Representatives and the Supreme Court in the Visayas (both at +11 percentage points); (2.) gain in public trust experienced by the High Court in Class D (+7 percentage points); and (3.) drop in indecision figures recorded by the Supreme Court in the Visayas (-11 percentage points) and Class D (-9 percentage points),” the report said. — Arjay L. Balinbin

Trillanes charged with making grave threats

EMBATTLED opposition Senator Antonio F. Trillanes IV is facing yet another court case — this time he has been charged with threatening a government official.
In a document released on Friday, Janette O. Herras-Baggas, the Assistant City prosecutor of the Pasay Metropolitan Trial Court Branch 47, charged Mr. Trillanes with the crime of “grave threats” stemming from a confrontation with Labor Undersecretary Jacinto V. Paras during a Senate hearing last year.
According to the charge sheet, the senator made the following statements during the May 29, 2018 hearing which “created fear and anxiety on the mind” of Mr. Parras “that the threats will be carried out”:
“Ang lakas ng loob mo. Hindi magtatanggol ang amo mo. Matatapos din yan. Yayariin kita. Mersenaryo ka. Yayariin kita. (You’ve got some nerve. Your master will not save you. That will end. I will finish you. You are a mercenary. I will finish you.)”
“Tatawa-tawa ka pa. May araw ka din. Yayariin kita. (Go on, laugh. Your day will come. I will end you.)”
“Suwerte mo… mabait itong… secretary kun’di yayariin kita eh. (You are lucky… this secretary is nice, if he was not, I would finish you.)”
“I have conducted a preliminary investigation of this case in accordance with law, that the complainant was personally examined and that on the basis of the sworn statement and other evidence presented, there is reasonable ground to believe that the crime charged has been committed,” said the document which was signed by Assistant City Prosecutor.
Arraignment and a preliminary conference on the case have been set for the morning of Feb. 15, according to an order by Acting Presiding Judge Joeven D. Dellosa from the Pasay MTC dated Dec. 14, 2018. The order and the charge sheet, which was received by the court on Dec. 7, were only made public on Friday.
In the same order, Mr. Dellosa directed Mr. Paras “to appear before the Court on the same date for purposes of plea bargaining, where allowed, and notification of trial dates.”
Mr. Trillanes, who recently returned from a trip to Europe, said that he will face all the accusations against him in court.
“I just arrived from my trip last Wednesday despite all threats against me, precisely, to show there people that I am not afraid of them,” the senator said in a statement released on Friday.
This is not the first case Mr. Paras has filed against Mr. Trillanes. Last year, the Labor Undersecretary charged the Opposition Senator with inciting to sedition in relation to statements made by the senator after President Rodrigo R. Duterte issued Proclamation No. 572 which voided Mr. Trillanes’ 2011 amnesty on coup d’etat charges.
Because of Proclamation No. 572, Mr. Trillanes is currently facing a revived rebellion case in a Makati court related to the Manila Peninsula incident in 2007.
Mr. Trillanes also has a libel case in Davao. — Gillian M. Cortez

Estrella-Pantaleon bridge closure reset to Jan. 19

THE Metropolitan Manila Development Authority (MMDA) announced that the Estrella-Pantaleon Bridge which links Makati City and Mandaluyong City will be closed starting on Jan. 19 for three years of reconstruction.
The bridge was initially scheduled to close on Jan. 12. Prior to that, the bridge was closed for two days on September last year, but it was reopened for the Yuletide season upon the request of the MMDA.
The Department of Public Works and Highways (DPWH) will spearhead the reconstruction of the bridge.
MMDA General Manager Jose Arturo S. Garcia, Jr. said that it will be a total replacement. The new bridge will be made to handle more vehicles that traverse between Makati and Mandaluyong.
“Total replacement ang gagawin (It will be a total replacement)… This bridge is only two way, kaso ’yung capacity niya hindi na kaya ’yung 35,000 na dumadaan in an average [day] (it does not have the capacity to handle the average of 35,000 vehicles that pass through it a day). It’s not just the safety, it is about widening it to cater [to] more [vehicles],” said Mr. Garcia in a press briefing on Friday, Jan. 11.
Mr. Garcia said that from its current two lanes, the bridge will have four lanes and sidewalks after the reconstruction.
Aside from the volume of the vehicles that pass through the bridge, the MMDA also cited safety concerns about the bridge, citing the need to prepare for a possible high-magnitude earthquake in the future.
“’Yung Philvolcs, nagkaroon tayo ng study diyan. Matibay siya, pero hindi siya designed for a highly urbanized area,” said Mr. Garcia. (The Philvolcs [Philippine Institute of Volcanology and Seismology] had a study about the bridge. It is sturdy but it is not designed for a highly urbanized area.)
He added, “They really need to widen it at patibayan rin. Alam naman natin yung natural disasters hindi natin alam kung kailan darating ’yan.” (They really need to widen it and strengthen it. We all know that natural disasters are unpredictable.)
With the closure, motorists’ travel time between the cities could increase to 30 minutes to an hour, from the usual 10-minute drive when using the bridge.
Mr. Garcia said the replacement of the bridge, also known as Rockwell Bridge, will take 30 months.
The reconstruction of the bridge is part of the government’s flagship “Build, Build, Build” infrastructure project and is funded by the Chinese government with a budget of P1.47 billion.
The Estrella-Pantaleon bridge will be closed starting at 4 a.m. on Jan. 19.
On Monday, Jan. 14, the MMDA will start road clearing operations along the alternate routes which are as follows:
• All vehicles coming from the Cities of Mandaluyong, San Juan ,and Quezon City using the Mabuhay Lane (Sgt. Bumatay and Barangka Drive) must take right at Pantaleon, then Coronado, then take the Makati-Mandaluyong Bridge to their destination.
• Vehicles coming from Maysilo and San Francisco should go straight ahead to Coronado and the Makati-Mandaluyong Bridge to their destination.
• Other vehicles coming from Mandaluyong going to the Makati Business Center via EDSA can turn at the Guadalupe Cloverleaf to J.P. Rizal Ave. Extension, then turn left at Estrella towards their destination.
• All exiting vehicles from TIVOLI Garden Residences shall use the back gate located at the private road (Sen. N. Gonzales Road).
• All vehicles coming from Makati Ave. should take P. Burgos (which will be made a one way street), straight to the Makati-Mandaluyong Bridge, then Coronado, then San Francisco, then they can take the Mabuhay Lane to their destination.
• Vehicles coming from Rockwell can take Estrella then turn right at Gumamela St., then left at Camia St. to J.P. Rizal, then on to their destination.
• Public utility jeeps (PUJ) and tricycles shall be diverted to the Private Road (Sen. N. Gonzales Road) and vice versa. — Vince Angelo C. Ferreras

PNP, AFP ordered to secure the BOL plebiscite, elections

PRESIDENT Rodrigo R. Duterte has called on the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP) to secure the upcoming plebiscite to ratify the Bangsamoro Organic Law (BOL) and the National and Local Elections (NLE).
The president issued Memorandum Order (MO) 34 on Dec. 28, 2018, which states that the Commission on Elections (Comelec) will deputize the PNP, AFP, and other law enforcement agencies to ensure that the BOL plebiscite on Jan. 21 will be peaceful and orderly.
Also issued on the same day was MO 35 on the deputation by the Comelec of the PNP, AFP, and other law enforcement agencies for the midterm elections on May 13.
The two Memorandum Orders were only made public on Friday, Jan. 11.
Section 2 of Article 9-C of the 1987 Constitution states that the Comelec will “deputize, with the concurrence of the President, law enforcement agencies and instrumentalities of the Government, including the Armed Forces of the Philippines, for the exclusive purpose of ensuring free, orderly, honest, peaceful, and credible elections.”
On Dec. 28, the Comelec signed a Memorandum of Agreement (MoA) with the AFP and PNP before members of the media for the three agencies to work together in ensuring the safe implementation of the BOL plebiscite and NLE.
Comelec Spokesperson James B. Jimenez told reporters on Friday that the commission’s authority to deputize the law enforcement departments and agencies “is standard practice.”
He added that for the midterm elections, “We can provide training for them (the law enforcement departments and agencies) so that on election day, makakapagadminsiter sila ng (they can administer their) presence sa iba’t ibang (in different) polling places.”
Regarding the BOL, the Comelec announced the final list of petitioner-local government units (LGUs) that will take part in the plebiscite. The BOL states that areas that are contiguous have the option to join the new Bangsamoro region.
The plebiscite for the approved contingent areas of the Bangsamoro region will be on Feb. 6. — Gillian M. Cortez

Gov’t gaining grounds vs Reds — DILG

THE government is gaining ground against the communist insurgency as the number of rebels continues to decline, said Department of Interior and Local Government Secretary Eduardo M. Año.
Saying that 8,367 rebels surrendered to the government between July 1 and Dec. 28, 2018, Mr. Año said the communist movement is currently in a sharp decline. Many of the former rebels were granted benefits under the Enhanced Comprehensive Local Integration Program (E-CLIP).
“Lives are being changed by the E-CLIP program,” he said in a statement released on Friday, Jan. 11. “With more than a thousand former rebels who have received financial assistance last year, we hope that their testimonies will serve as an encouragement for more communist rebels to surrender.”
Of the 8,367, he said 1,207 were armed members of the New People’s Army (NPA) while the rest were with the Militia ng Bayan, the Sangay ng Partido sa Lokal, and underground mass activists.
The Interior secretary said that communist leader Jose Maria C. Sison cannot accept the decline of communist rebels.
“We must remember that Joma [Mr. Sison’s nickname] is a master-propagandist. He will twist facts to suit his own reality. Hindi niya kasi matanggap na nagtatagumpay ang programa ng gobyerno para sa mga rebelde at maraming rebelde na ang gustong magbagong-buhay (He cannot accept that the government’s program for rebels is succeeding and that there are many rebels who want to change their lives),” said Mr. Año.
He added, “To arrest the decline of the Communist movement, Joma and his minions has been clamoring for the resumption of the Oslo peace talks. That’s the best way to stop the hemorrhage. They were already given their chance and blew it, the train has left the station.”
Meanwhile, Mr. Sison said the communist party will remain steadfast despite attacks by government forces.
“In the test of strength in the battlefield, the revolutionary movement hopes and strives to win victories all the way to the overthrow of the Duterte regime and it is up to Duterte offer peace negotiations for addressing the roots of the armed conflict with comprehensive agreements on social, economic, and political reforms,” said Mr. Sison in a statement released on Friday.
He added, “In the meantime, the NPA has no choice but to intensify the armed struggle even as the NDFP (the National Democratic Front of the Philippines) keeps the door open to peace negotiations.”
Recently, Defense Secretary Delfin N. Lorenzana said that the government is aiming to put an end to the communist insurgency in the last three years of President Rodrigo R. Duterte’ term in office. — Vince Angelo C. Ferreras

Anti-Corruption Commission gets anti-red tape recommendatory powers

PRESIDENT Rodrigo R. Duterte has signed an executive order mandating the Presidential Anti-Corruption Commission (PACC) to recommend complaints of violations of the Anti-Red Tape Act to the Anti-Red Tape Authority (ARTA).
Released on Friday, Jan. 11, Executive Order (EO) No. 73, as signed by the President on Dec. 28 last year, amends EO No. 43 (series of 2017) that created the commission. EO No. 73 adds more items to Section 5 of EO. No. 43 on Jurisdiction, Powers, and Functions.
EO No. 73 states that the PACC shall “(r)ecommend to the Anti-Red Tape Authority, for investigation, violations of Republic Act No. 9485, otherwise known as the Anti-Red Tape Act of 2007, as amended, and its Implementing Rules and Regulations.
“After due investigation, recommend to the President the filing of appropriate criminal complaints before the Office of the Ombudsman or the Department of Justice, or otherwise refer such cases for appropriate action to these Officers.”
It also said that the PACC “shall perform such other functions or duties as may be assigned by the President.”
The EO added that “nothing shall prevent the President, in the interest of the service, from directly investigating and/or hearing an administrative case against any presidential appointee or authorizing other offices under the office of the President to do the same, as well as from assuming jurisdiction at any stage of the proceedings over cases being investigated by the commission.”
Sought for comment, PACC Commissioner and spokesperson Greco Antonious Beda B. Belgica told BusinessWorld in a phone message that “PACC only assists the President and recommends possible action. Red Tape cases, we can recommend to the President or ARTA.”
In an interview with BusinessWorld last December, PACC Chairman Dante L. Jimenez said that that his commission was preparing to ask Mr. Duterte to grant the agency prosecutorial powers and expand its jurisdiction.
Alongside the expansion of powers and jurisdiction, Mr. Jimenez said the commission’s manpower should also be increased as well as be provided with its own budget. — Arjay L. Balinbin

President Duterte appoints Ramos-Samaniego as BoI governor

PRESIDENT Rodrigo R. Duterte has appointed Board of Investments (BoI) Management Service Group OIC-Executive Director Marjorie O. Ramos-Samaniego as BoI governor.
Ms. Ramos-Samaniego is replacing Henry T. Co whose term expired on Sept. 17 last year.
“Pursuant to the provisions of existing laws, you are hereby appointed Governor, Board of Investments, Department of Trade and Industry, for a term of four years, vice Henry T. Co,” her appointment paper reads as signed by Mr. Duterte on Jan. 9.
The BoI, which is an attached agency of the Department of Trade and Industry (DTI), is mandated to promote investments in the country.
The Board is composed of seven governors as indicated in the Executive Order No. 226 or the Omnibus Investments Code of 1987 signed by President Corazon C. Aquino.
Also appointed on Jan. 9 were officials to the National Commission on Muslim Filipinos (NCMF) and Housing and Land Use Regulatory Board (HLURB).
Mr. Duterte appointed Lominog M. Lao as Director IV of the NCMF.
Marylin M. Pintor will serve a term of six years as commissioner of the HLURB. She is replacing Luis A. Paredes. — Arjay L. Balinbin

Salary increase for gov’t workers seen by February

By Melissa Luz T. Lopez, Senior Reporter
GOVERNMENT WORKERS can expect to receive higher salaries next month as the 2019 budget is expected to be signed into law, the country’s Budget chief said, adding that succeeding pay hikes will be revealed later this year.
Budget Secretary Benjamin E. Diokno said on Friday that the fourth tranche of salary increases for state workers and officials is slated to be in effect by next month, just as Congress is expected to finalize and have the P3.575-trillion national budget signed by President Rodrigo R. Duterte in the “first week of February.”
This represents the final tranche of the salary standardization law (SSL), which provides for salary increases for all government employees which started in 2016.
Mr. Diokno has clarified that workers will be entitled to a salary differential to cover the delayed implementation of the pay hike which should have taken effect Jan. 1.
The Department of Budget and Management (DBM) has also announced that work on a fresh SSL proposal has started, committing to higher salaries for state workers from 2020 to 2022.
The Governance Commission for GOCCs will soon tap an independent firm to study the wage structure of government workers versus their private sector counterparts, which will then be used in crafting the next wave of salary increases.
The GCG, however, cannot close the deal yet as funding for this study is under the 2019 budget bill.
“Results from the study are expected to be delivered by the independent firm before end of June this year. Consequently, the DBM will come out with a proposed salary schedule by the 3rd quarter of 2019,” the DBM said in a statement.
SUPPLIER PAYMENTS
In another development, the agency also released new rules to simplify the payment process done by government offices.
DBM Circular Letter 2018-14 requires suppliers or contractors without bank accounts in government servicing banks (GSBs) to coordinate the payment transfers using electronic clearing houses made available across lenders.
As a rule, all national government agencies (NGAs) do their transactions via the state-run Land Bank of the Philippines and the Development Bank of the Philippines.
“The suppliers/creditors as remitter shall shoulder the cost of transferring payment from the NGAs GSB to other GSB and NGA’s GSB to other non-GSBs,” the DBM issuance read, which took effect Jan. 2.
These transactions can either go through the InstaPay platform, which facilitates real-time interbank transfers worth P50,000 and below, or the Philippine Electronic Fund Transfer System and Operations Network, which are digital clearing houses involving local banks.
However, those who cannot tap these platforms may still collect payments through checks or cash. This option is limited to small-value payees with claims less than P10,000, those with one-time transactions with the state, or those with existing accounts.
These fall under the DBM’s Modified Direct Payment Scheme, which is also meant to improve cash management for the Bureau of the Treasury who reported P22.7 billion in unclaimed checks as of end-June last year.

PSALM bids out MTPP property in Manila

THE Power Sector Assets and Liabilities Management Corp. (PSALM) is once again bidding out the property of Manila Thermal Power Plant (MTPP) located along the Pasig River in Isla de Provisor, Paco Manila.
“Under the COA and DBM Disposal Guidelines & the PSALM Policies, the Disposal Committee may dispose a property through a process of Negotiation in cases of failure of second bidding. Thus, PSALM referred the matter to its Board of Directors, and PSALM’s Board resolved to approve the disposal of the MTPP Land thru Negotiated Sale Process on 03 December 2018,” Irene Joy B. Garcia, president and chief executive officer of PSALM explained in a text message to BusinessWorld.
In a statement on Jan. 11, the firm said the minimum offer price of the 20,975-square meter land is at P736.368 million. This property was previously a power plant that was the source of electricity for Luzon grid consumers until 2009. The said property was already bid out two times last year and was previously valued at P886 million, but these auctions failed because no bids were submitted.
“The sale of the Manila Thermal Power Plant’s Land underwent first round of bidding on 15 August 2018 which failed due to the non-submission of bids from any interested bidders. The second round of bidding was later scheduled on 23 November 2018. Said bidding likewise failed because no bidder purchased the bid documents,” Ms. Garcia noted.
Expressions of interest and acceptance of the negotiation procedures need to be submitted to the PSALM Privatization, Bids and Awards Committee from Jan. 10-23.
Deadline of submission of offers is on Jan. 31, 12 p.m. at the PSALM Office, 24th Floor Vertis North Corporate Center 1, North Avenue, Quezon City. — VMPG

Thailand appeals WTO ruling over cigarette imports

THE World Trade Organization (WTO) said on Friday Thailand is appealing the decision by a dispute panel that determined the country failed to comply with the WTO ruling against its regulations on cigarette imports.
In a statement on Friday, the WTO said Thailand’s appeal filed on Wednesday pertained to the case brought by the Philippines before the Geneva-based organization, specifically “Thailand — Customs and Fiscal Measures on Cigarettes from the Philippines (Article 21.5 — Philippines).”
“Thailand filed an appeal on 9 January concerning the WTO compliance panel report in the case brought by the Philippines…. Further information will be available within the next few days…,” it said.
The appeal will be reviewed by three members of a WTO appellate body, which needs to be comprised of individuals not affiliated with any government.
“Each member of the Appellate Body is appointed for a fixed term. Generally, the Appellate Body has up to 3 months to conclude its report,” the WTO said.
On Nov. 12, 2018, the compliance panel report, which found Thailand unable to follow recommendations on cigarette imports, was distributed to WTO members.
Both the Philippines and Thailand were given the chance to appeal the ruling, given that it is based on law and would not require the reopening of factual findings that have already been reviewed by the WTO dispute panel.
The Philippines first raised concerns on the fiscal and customs policies of Thailand on importing cigarettes in February 2008. The case was decided by the WTO in favor of the Philippines in 2010.
But in 2013, the Philippines complained Thailand’s failure to comply with the recommendations of the WTO, which Thailand said in 2014 it already accomplished. The issue was elevated to the WTO dispute panel, which eventually found Thailand did not comply with the ruling. — Denise A. Valdez

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