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Banks seen to meet leverage standards

By Melissa Luz T. Lopez,
Senior Reporter

PHILIPPINE BANKS are broadly expected to meet minimum leverage standards set by the Bangko Sentral ng Pilipinas (BSP), its chief said, with lenders well-armed with capital buffers to maintain their sound positions.

On Monday, the central bank announced that it will implement the five-percent minimum leverage ratio covering universal and commercial banks by July, representing how much capital banks should have on hand to cover non-risk weighted assets.

The computation of the ratio includes subsidiary and quasi-banks owned by a big lender, which prevents excessive debt exposures which could trigger a funding crunch during times of financial stress.

“Today, the leverage ratio of practically all banks is well above five percent. There’s lot of room because the system is well-capitalized,” BSP Governor Nestor A. Espenilla, Jr. told reporters on Tuesday.

The BSP defines the ratio as a backstop measure to mitigate the “excessive” accumulation of assets in the banking system by comparing a bank’s high-quality Tier 1 capital to its total loan exposures.

Included in the computation of the leverage ratio are the reported amounts of accounts on the balance sheet as well as off-balance sheet items, including derivatives and securities financing transactions, the central bank said.

Once in place, the leverage ratio will boost capital buffers maintained by banks against potential risks, and will complement the 6% common equity Tier 1 ratio, the 7.5% Tier 1 ratio, and the 10% capital adequacy ratio (CAR).

The 5% standard is higher than the 3% minimum set under the international Basel 3 framework, like how the CAR is also above the 8% global standard.

“Generally, the approach of the BSP is we don’t set a standard if it’s not met at this time,” Mr. Espenilla said in explaining the timing of the new standard.

The liquidity coverage ratio (LCR) will also be implemented starting this year, another measure which will improve risk management among banks.

“The LCR is a powerful macroprudential tool. It requires banks to not just have capital but have enough assets in liquid form. That means it will lower the room for creating risk assets like loans,” Mr. Espenilla added.

The standard requires big banks to hold high-quality and easily convertible assets to cover its total net cash outflows for a 30-day period. Banks are expected to hold assets that will cover 90% of their monthly cash outflows this year, which will go up to 100% by 2019.

Both measures form part of the Basel 3 regime, which was crafted by international policy makers to improve risk management and prevent a repeat of the 2008 Global Financial Crisis. Excessive lending led to massive credit defaults, which then triggered the collapse of big banks and caused widespread recession worldwide.

Several economists have flagged overheating concerns for the Philippine economy as credit growth pushes at a double-digit pace, although central bank officials have said that this should not ring alarm bells just yet as lending has been diversified and productive.

BASIC ACCOUNTS
The central bank has also approved basic deposit accounts as a new banking product, which is expected to bring more Filipinos to use formal financial channels for their transactions.

Mr. Espenilla said the Monetary Board approved last week the creation of “no-frills” basic bank accounts, which will impose no maintaining balances and allow banks to accept new depositors with minimal documentary requirements.

Through this, anyone can open a basic account with a minimum deposit of P100. The account will be accessed for payments, remittances and fund transfers up to a maximum balance of P50,000 without being imposed reserve requirements.

This will complement the “branch-lite” units approved by the BSP in December, which allows lenders to set up dressed-down branches in town centers and even wet markets in order to bring their services closer to the public.

Both measures are expected to help improve financial inclusion, after a recent central bank survey showed that 571 towns and cities in the Philippines — about a third of the total — remain unbanked as of June 2017.

Getting more Filipinos aboard the banking channel also augurs well for the central bank’s goal of raising the share of electronic payments to 20% by 2020 by encouraging digital banking platforms.

Last Thursday, the Monetary Board officially recognized the Philippine Payments Management, Inc. as the industry-led management body for two automated clearing houses for digital transactions which are expected to go live this year.

The faster deployment and access to money is seen to spur increased economic activity, the central bank said.

GSIS looks to invest $800 million offshore

STATE PENSION FUND Government Service Insurance System (GSIS) wants to put $800 million in foreign-currency instruments to diversify its asset portfolio.

“$800 million is really for testing grounds in investment. It’s not too big… What we need is to understand the market globally, and we would like to look at our global fund managers how they handle,” GSIS President and General Manager Jesus Clint O. Aranas said in a press conference on Tuesday.

The plan to place $800 million in “foreign currency-denominated instruments” is part of the pension fund’s target of a 9% per annum return of investment.

“These days, return of investment is at an average of 5.5%, below our ideal rate of 9% per annum. We want to beat that 9%…that’s why we have a risk conservative approach,” Mr. Aranas said, adding that the pension fund will be maximizing the “very good” market performance recently.

GSIS is looking to hire two external asset managers to have an allocation of $400 million apiece.

“The fund manager must have an experience to manage a global portfolio because we want a fund manager who knows how to do dynamic asset allocation,” said Gracita Gilda V. Bocanegra, senior vice-president of GSIS, adding that they are open to local firms.

As of November, 62% the pension fund’s assets were invested in financial assets, 24% in loans to its members, 6% in investment properties, 4% in cash and another 4% in property, equipment and other assets.

GSIS posted a net income of P84.15 billion in the first 11 months of 2017, up 52.52% from the P55.17 billion posted in the comparable year-ago period.

Income generated from loans slightly increased by 3.8% to P22.49, as active loan accounts as of November 2017 grew to 1.19 million from 720,342 accounts posted in the comparable year-ago period.

Revenues from insurance also grew 11.2% in the eleven months ended November 2017. This was driven by “increased social insurance contributions” as the number of contributing members rose to 1.7 million as of November last year.

In the expenditure side, GSIS paid more than P85 billion in social insurance claims and benefits in the period, up 13% from P75.1 billion in 2016.

Meanwhile, GSIS’ total assets rose 8% to P1.09 billion as of November 2017.

“The growth was driven by income from financial assets, which doubled to P52.12 billion on the back of the robust performance of financial markets,” a statement from GSIS read. — Karl Angelo N. Vidal

CLI reservation sales hit P4.58B in 2017

NEW RESIDENTIAL PROJECTS boosted Cebu Landmasters, Inc. (CLI)’s reservation sales in 2017, allowing it to post a 55.6% growth from 2016 figures.

In a statement issued Tuesday, the listed property developer said it booked reservation sales of P4.58 billion in 2017, exceeding its P4-billion target.

CLI said the growth was driven by newly launched residential projects — 38 Park Avenue in Cebu IT Park which offers 745 units, Casa Mira South in Cebu with 3,200 units, and Mivesa Garden Residences in Cebu with 1,514 units.

The company’s developments in Mindanao, such as the 798-unit Mesaverte in Cagayan de Oro and the 694-unit in Davao City, likewise showed robust  sales.

“All the projects we launched were well-received by their respective markets making 2017 another banner year,” CLI Chief Executive Officer Jose R. Soberano III was quoted as saying in a statement.

CLI aims to continue this growth in 2018 as it targets to book P7 billion in reservation sales, marking a 52% year-on-year increase. This will be driven by a total of 20 projects to be launched, half of which will be in Cebu.

The company said it will be entering two new locations in the Visayas area, with Bacolod to house two residential projects and a hotel. CLI will also be constructing a residential condominium in Iloilo, riding on the optimism on the expected economic growth in these areas.

“Reports from the National Economic Development Authority show that the Visayas region will zoom ahead of other regions in the next five years and is expected to outpace the projected 7-8% growth for the Philippines,” CLI said.

For Mindanao, CLI is planning the launch of two residential subdivisions and one condominium in Cagayan de Oro, as well as a central business district and two residential condominiums for Davao City.

“In 2018, we will continue to expand our footprint in the Visayas and Mindanao, and develop projects that respond to the growing market in these areas,” Mr. Soberano said.

With this, CLI looks to end 2018 with a total of 66 developments. These projects cater primarily to the mid-market segment, although the company noted some of its condominiums serve the high-end market as well.

CLI said it is counting on people with increased take-home pay to divert these funds into housing, following the lowering of personal income taxes from the newly enacted tax reform program.

This year, CLI is targeting a net income of P1.7 billion and revenues of P5.3 billion.

CLI booked a net income of P960 million in the first three quarters of 2017, 77% up from year-ago levels as revenues also jumped 67% to P2.77 billion in the same period.

Shares in CLI were down five centavos or 1.01% to P4.90 apiece at the stock exchange on Tuesday. — Arra B. Francia

Peso down on remittances

THE PESO slumped against the dollar on Tuesday as central bank data showed remittance growth slowed in November.

The local currency closed the session at P50.49 versus the greenback yesterday, losing 12 centavos from its P50.37-per-dollar finish on Monday.

The local unit traded weaker the whole day, opening at P50.40 versus the dollar. Its intraday low stood at P50.505, while its best showing was at P50.375 against the greenback.

Dollars traded climbed to $875.37 million from the $697 million that changed hands a session ago.

Traders interviewed on Tuesday attributed the peso’s weakness to the “disappointing” growth in remittance in November last year.

“I think it’s because of the perception on the slower growth in remittances. There’s a perception that remittances might not come in as expected,” Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, said over the phone.

Money sent home by overseas Filipinos stood at $2.262 billion that month, higher than the $2.217 billion posted in a comparable year-ago period, but lower than the $2.275 billion in October 2017, central bank data released on Monday showed.

The rise in remittances in November was slower at 2%, compared with the 18.5% growth the same period in 2016 and October 2017’s 8.4%.

“This was lower than the 7.3% year-on-year increase to $2.45 billion,” Jose Mario I. Cuyegkeng, senior economist of ING Bank, said in an e-mail sent to reporters.

Meanwhile, another trader said on Tuesday: “The peso weakened today as traders positioned ahead of resumption of US financial markets this week from a holiday [on Monday] despite the stronger balance of trade figures from the Euro area.”

For today, Mr. Asuncion said the local currency might move within P50.30 to P50.60, while another trader gave a slightly lower range of P50.35 to P50.65.

“The local currency is expected to move sideways [today] due to lack of fresh leads but may be driven by significant movements on the US markets,” the trader said. — Karl Angelo N. Vidal

Metro Pacific eyes Malaysian toll road deal within the year

METRO PACIFIC Investments Corp. (MPIC) is looking to close an agreement for a tollways venture in Malaysia this year.

“We hope we could close something within the year,” MPIC Chairman Manuel V. Pangilinan told reporters on the sidelines of the Financial Executives Institute of the Philippines anniversary gala on Jan. 15.

Mr. Pangilinan said MPIC sees Malaysia as the next viable country for an investment in tollways business, after entering the Indonesian market in November. Metro Pacific Tollways Corp. (MPTC) has increased its stake in Indonesia infrastructure holding company PT Nusantara Infrastructure Tbk.

In 2016, MPIC’s talks with a Malaysian company for a 50-kilometer tollway project fell through.

The conglomerate aims to continue its expansion into Southeast Asia and create a “pan-ASEAN” tollway network.

It currently has stakes in in Don Muang Tollway Public Company Limited, a major toll road operator in Bangkok, Thailand, and in CII Bridges and Roads, a firm with road and bridges projects in Ho Chi Minh City, Vietnam.

After Vietnam, Thailand, Indonesia, and possibly Malaysia, MPIC is eyeing opportunities in Myanmar, although there are no “visible” opportunities for now, Mr. Pangilinan said.

MPIC is one of three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo

House OK’s resolution on constitutional assembly

THE HOUSE of Representatives approved in plenary on Tuesday House Concurrent Resolution 9 convening the House and Senate into a constituent assembly.

A video uploaded on the House Web site showed Cebu (3rd District) Representative Gwendolyn F. Garcia of the House majority presiding over Tuesday afternoon’s plenary session that adopted the said resolution.

Anticipating Tuesday’s vote in a statement on Monday, Representative Roger Mercado, chairman of the committee on constitutional amendments said that with the approval of Resolution No. 9, all recommendations, including the PDP-LABAN draft Constitution and those reforms or amendments submitted by House members would be discussed by the different committees based on the rules on Congress as a constituent assembly.

“If we finish that today, we (then) will vote and approve the House resolution convening both houses into a constitutional assembly,” Mr. Mercado said on Monday.

He maintained the stand of the House on both chambers of Congress voting jointly.

“The Congress, upon the vote of all its members, so, both houses will be convened and upon a vote of three-fourth of all its members, meaning the House of Representatives and the Senate, then we can propose amendments to our Constitution,” Mr. Mercado said, quoting Article 17 of the Constitution.

The Senate, on the other hand, maintains that the two chambers must vote separately on this matter, and a majority senator, Panfilo M. Lacson, has filed a resolution to that effect.

Earlier on Tuesday, members of the House kicked off discussions on possible changes to the 30-year-old 1987 Constitution, with the aim of shifting to a system of federal government and allowing the president up to two terms in office.

The switch to a federal system was one of the key planks of President Rodrigo R. Duterte’s election campaign, aimed to remedy what he saw as neglect by a Manila-centric political establishment that has left provinces in perpetual poverty.

Mr. Duterte’s allies, who dominate the nearly 300-member House, want a Constitution that broadly aims to expand both legislative chambers, lengthen lawmakers’ terms, give provinces more fiscal autonomy, have a prime minister as head of government, and a separately elected president.

The tentative plan is to agree and draft the amendments late this year and hold a referendum in May 2019.

The push to change the Constitution has been a divisive issue, with critics accusing lawmakers of trying to prolong their stay in office, or of creating a way for Mr. Duterte to stay in power beyond the end of his term in 2022.

Opponents warn the process could bring a repeat of the 1970s-era of the late dictator Ferdinand E. Marcos and say they are troubled by Mr. Duterte’s stated admiration for him, and the President’s similar authoritarian traits.

The opposition says the 1987 Constitution was drafted to stop that from happening.

Mr. Duterte has made clear he has no desire to stay longer than his term and, if anything, would prefer to retire earlier.

Lawmakers have yet to decide on what federal model to adopt, Mr. Mercado said.

Also on Monday, Senator Juan Miguel F. Zubiri bared a planned schedule for the Senate to act on the proposed Bangsamoro Basic Law (BBL), the premise for establishing a new autonomous region in Mindanao on the watch of the Moro Islamic Liberation Front (MILF).

Mr. Zubiri said: “We will also be going to have a hearing this Jan. 23 which is on Tuesday where in all Cabinet officials, as well as the BTC (Bangsamoro Transition Commission) officials and members of the MILF will be here in the Senate. After which, on the 25th, we will have a hearing at Cotabato City and 26 we will be in Marawi and we will also have succeeding hearings in (the) Basulta (Basilan, Sulu, Tawi-Tawi) area. So we would like to assure the President and the Filipino people that we are prioritizing the BBL.

“I like to finish the discussion on 2nd and 3rd reading on (the) second week of March before the session break,” the senator added. “We will have the committee report ready by third week of February….After which I will bring the committee report in plenary and we will have three weeks to pass the measure.”

For his part, Senate President Aquilino Martin L. Pimentel III clarified: “BBL does not need Cha-cha. It is easier to achieve. It is common sense….In the context of the 1987 Constitution, so pag-isipan mong dalawa, anong mas (think about the two, which is more) achievable, BBL o charter change? Mas madali ang BBL (BBL is easier).” — main report by Reuters

Trust in Robredo jumps to ‘very good’

VICE-PRESIDENT Maria Leonor G. Robredo’s net trust rating jumped 16 points to “very good” +52, according to the Fourth Quarter 2017 Social Weather Survey conducted by the Social Weather Stations on Dec. 8-16 last year.

Ms. Robredo’s net trust of +52 (66% much trust minus 14% little trust) compares with her good +36 (6% much trust, 21% little trust, correctly rounded) in the SWS survey of September 2017. SWS classifies net trust ratings as follows: +70 and above, “excellent”; +50 to +69, “very good”; +30 to +49, “good”; +10 to +29, “moderate”; +9 to -9, “neutral”; -10 to -29, “poor”; -30 to -49, “bad”; -50 to -69, “very bad”; -70 and below, “execrable.”

Ms. Robredo’s net trust rating began with a moderate +29 when the polling group first surveyed it in December 2015. It peaked to very good +63 and +58 in June and September the next year, before dropping to good levels from December 2016 to September 2017, amid her criticisms of the conduct of President Rodrigo R. Duterte’s anti-drug campaign.

Ms. Robredo’s net-trust ratings improved to very good in the areas of the Visayas, Balance Luzon, and Mr. Duterte’s home region Mindanao, while it stayed moderate in Metro Manila.

In Mindanao, particularly, trust in Ms. Robredo leapt 26 points and two grades to very good +50, compared with moderate +24 in September last year.

Trust in Ms. Robredo also jumped 16 points and one grade in the Visayas (very good +64) and Balance Luzon (very good +56), but remained at a moderate +27 in Metro Manila, if still up by 5 points.

Among Classes D and E, where trust in Ms. Robredo has ranged between good and very good, she jumped 16 points to very good +53 in Class D and 18 points to very good +52 in Class E.

In terms of educational attainment — where trust in Ms. Robredo has also been in the “good” to “very good” levels among respondents who have finished up to some elementary, some high school and some college — she jumped 18 points among high school graduates (very good+51) and 19 points among non-elementary graduates (very good+66) and rose 8 points among elementary graduates (very good+52).

Ms. Robredo’s biggest leap, however, was by 36 points among college graduates (good+43), in sharp contrast to her net trust in this group of neutral +7 in September and moderate+15 in June last year .

SWS also noted that Ms. Robredo’s net trust rose by one grade to very good among both men and women as well as the 45-54 and 55-above age groups, while remaining good among the 18-24, 25-34, and 35-44 age groups.

The survey, which shows an overall spike in Ms. Robredo’s ratings, comes amid a brewing controversy over the planned abolition of her office in the constitutional shift to federalism that Congress is set to tackle.

The survey was conducted using face-to-face interviews of 1,200 adults (18 years old and above) nationwide: 300 each in Metro Manila, Balance Luzon, Visayas, and Mindanao (sampling error margins of ±3% for national percentages, and ±6% each for Metro Manila, Balance Luzon, Visayas, and Mindanao).

Interviewed by reporters about the new survey, Ms. Robredo said in part: “(N)apakalaking bagay nito para sa amin kasi gustong sabihin, kahit may ganitong limitasyon, nakakabigay pa rin ng parang positibong epekto iyong mga paghihirap na ginagawa namin — lalong lalo siguro iyong aming Angat Buhay program….” (This is significant for us because, even with our limitations, it shows there is a positive effect in what we’re struggling to achieve — especially through our Angat Buhay program….) — with Camille A. Aguinaldo

Blackwater, Phoenix look to sustain winning ascent

By Michael Angelo S. Murillo
Senior Reporter

THE Blackwater Elite and Phoenix Petroleum Fuel Masters, two teams currently on a roll in the PBA Philippine Cup, take on separate opponents today, looking to sustain their fine form and position themselves well in the race moving forward.

PBA Standings

Blackwater, winner of its last two games, faces off with the TNT KaTropa in the main game set for 7 p.m. at the Smart Araneta Coliseum while Phoenix, also riding a two-game ascent, clashes with the Rain or Shine Elasto Painters in the opener at 4:30 p.m.

The Elite (2-1) collide with the KaTropa coming off an impressive 94-77 victory over the Barangay Ginebra San Miguel Kings on Jan. 12.

Banking on a thorough attack on both ends of the court, the Leo Isaac-coached Elite held their own against a loaded Ginebra crew and underscored their standing as a potential dark horse in the Philippine Basketball Association’s (PBA) season-opening tournament.

JP Erram led Blackwater’s charge in the win over the Kings, winning player of the game honors on the strength of a double-double of 22 points and 11 rebounds to go along with six block shots.

Sophomore Mac Belo had 22 points and seven boards while Allein Maliksi came off the bench to chip in 17 points and seven rebounds.

“This is a huge win for us and a good start for us in 2018. The win boosts our confidence as individual players and as a team,” Mr. Erram said following their win.

“We just followed Coach Leo’s game plan and stuck with the system and put in the needed effort,” he added as described what did it for them against the Kings.

Out to stop Blackwater is TNT (1-2), which lost in its last outing.

Jayson Castro leads the KaTropa with averages of 15 points, 7.7 rebounds, eight assists and 1.3 steals per ball game.

Troy Rosario has been good for 14.7 points and 11.3 rebounds while Roger Pogoy is producing 11.3 points and five rebounds.

PHOENIX RISING
The Fuel Masters, meanwhile, sent the NLEX Road Warriors to a 102-95 loss in their last assignment on Jan. 7, anchored on much balance with at least six players scoring in double digits.

Matthew Wright was at the forefront, finishing with 19 points as veteran Jeff Chan fired 18 markers.

RJ Jazul finished with 15 points while rookie Jason Perkins added 14. Justin Chua and Doug Kramer were the two other Phoenix players in double-digits with 12 and 10 points, respectively.

“Key for us in this win was our defense especially against their perimeter guys. It is one of the strengths of NLEX and good thing we were able to execute what we set out to do,” said Phoenix coach Louie Alas.

Meanwhile, Magnolia Hotshots’ Paul Lee is the latest recipient of the PBA Player of the Week honors after averaging 17 points, four assists, two rebounds and 1.5 blocks in their two wins over Kia Picanto and NLEX.

In winning the award Mr. Lee beat out Alaska’s Calvin Abueva, Vic Manuel and Chris Banchero, GlobalPort’s Stanley Pringle, Blackwater’s Erram and Belo, and San Miguel’s June Mar Fajardo and Arwind Santos.

Duterte to fire 3 generals, 49 cops

PRESIDENT Rodrigo R. Duterte said he “will fire 49 policemen and 3 generals this week.”

“I am on a purging spree. I’ll be firing more people in government,” Mr. Duterte said at the inauguration of the new communications, navigation, surveillance/air traffic management (CNS/ATM) systems held at the Philippine Air Traffic Management (ATM) Center in CAAP compound in Pasay City on Tuesdayafternoon.

The President likewise said that he will ask his officials who have traveled more than 20 times to step down, adding that those officials sitting on delayed public works projects “should also get out immediately.”

“I am not the Ombudsman, but administratively I could hang you,” the President added.

The event was attended by Executive Secretary Salvador C. Medialdea, Department of Transportation (DoTr) Secretary Arthur P. Tugade, and CAAP Director General Capt. Jim C. Sydiongco.

The said project, which is also being implemented by the DoTr and the CAAP, is financed by the Japan International Cooperation Agency (JICA) under a P10.8-billion loan agreement between the Philippine government and the Japanese government. — Arjay L. Balinbin

Sharapova and Kerber light up Aussie Open

MELBOURNE — Former champions Maria Sharapova and Angelique Kerber turned on the style to sweep into the Australian Open second round Tuesday, but it was curtains for lanky Canadian Milos Raonic.

With temperatures heating up in Melbourne, the two Grand Slam winners wasted little time on court.

Sharapova, still working her way back from a 15-month ban for taking the performance-enhancing substance meldonium, showed glimpses of the tennis that made her a five-time major winner.

The 2008 Melbourne Park champion, now ranked 48, battled past Germany’s Tatjana Maria 6-1, 6-4 and will next play either 14th seed Anastasija Sevastova of Latvia or American Varvara Lepchenko.

“I cherish these moments. I love it here,” said the Russian, who returned from her drugs ban in April last year.

“It’s been a couple of years and I wanted it to be really meaningful to me.”

“I felt like I have got a lot of things out of the way physically and emotionally and mentally last year,” said Sharapova, who only returned to Grand Slam action at the US Open, where she reached the last 16.

“(In 2017) there was a lot of firsts again for me, playing the first tournament, first Grand Slam, and just different feelings and what it would be routinely.

“But it felt pretty routine today, just really happy to be back here.”

On paper this should have been a close match. Sharapova, who is climbing her way back up the tennis ladder following her ban, is ranked 48th with her German opponent one place higher.

But the gulf in class and experience between Sharapova, who has won 36 singles titles, and the 30-year-old journeywoman yet to register a WTA title was evident from the opening exchanges.

Fellow former world number one Kerber, who won the tournament in 2016, was also impressive in dismissing Anna-Lena Friedsam 6-0, 6-4.

“2017, I have said goodbye already, I am not looking back,” she said after a forgettable last season that saw her relinquish the number one spot and slide down the rankings.

She is now on a 10-match win streak after a perfect early season.

“I’m just trying to enjoy it again on court,” said the German, who turns 30 this week.

Sixth seed Karolina Pliskova and eighth seed Caroline Garcia also progressed, in contrast to the other side of the draw that saw Venus Williams, Sloane Stephens and Coco Vandeweghe crash out on Monday.

American woes continued with Madison Brengle sent packing by British ninth seed Johanna Konta.

Auckland Classic champion Fernando Verdasco was among men to make the second round, with a straight-sets win over 20th seed Roberto Bautista Agut.

But Raonic, who has made at least the last eight over the past three years in Melbourne, was bundled out by 86th-ranked Slovakian Lukas Lacko in four sets.

It was his earliest Grand Slam exit in seven years as he fights back from a wrist injury.

GOOD CHANCE
Roger Federer, rated as favorite to win his 20th Grand Slam title even at the venerable age of 36, makes his entrance in a night match on Rod Laver Arena.

The second seeded Swiss, who is coming off an extraordinary 2017, when he won a fifth Australian Open title and a record eighth at Wimbledon, faces Slovenia’s Aljaz Bedene.

Twelve-time Grand Slam winner Novak Djokovic is also in action, amid reports he is leading a push to create an independent players union to fight for even more prize money.

The Serb, returning from a long break with an elbow injury, plays American Donald Young on Margaret Court Arena. Fellow injury-plagued star Stan Wawrinka also makes his comeback from injury Tuesday.

World number one Simona Halep takes the court later as she chases a first Grand Slam title, with Wimbledon champion and third seeded Garbine Muguruza making her bow in an evening match.

Former world number one Pliskova was among those to move smoothly into the second round, with a steady 6-3, 6-4 win over Veronica Cepede Royg.

The tall tattooed Czech, who made the quarterfinal in Australia last year, was largely untroubled and is looking for a deep run at the tournament.

“I’ll take it match by match and I think I have a good chance,” she said.

Sydney-born Konta also made the last eight in 2017 and showed no signs of her recent hip injury as she dismantled Brengle 6-3, 6-1.

She can’t wait for her next match on Thursday even though temperatures are forecast to hit 40 Celsius (104 Fahrenheit) later in the week.

“I look forward to the heat, I love it,” she said. — AFP

GSIS to charge government for military pension management

THE GOVERNMENT Service Insurance System (GSIS) will ask the national government for a fee upon managing the planned pension scheme for military personnel.

“We would do actuarial study for you, we would make it sustainable for the military, but of course we would charge a monthly fee,” said GSIS President and General Manager Jesus Clint O. Aranas in a press briefing yesterday.

Mr. Aranas said the pension for retired troops would be separate from its current group of pensioners, composed of former government workers, to sustain its actuarial life.

This comes as the government aims to make pensions for military and uniformed personnel contributory, and managed by the GSIS, instead of being funded by taxpayers.

The new contributory scheme is planned to apply only to new recruits.

Budget Secretary Benjamin E. Diokno earlier said that a capital infusion amounting to P7 to P9 trillion is required to fund the proposed pension scheme. — Elijah Joseph C. Tubayan

Reallocation of frequencies may require new legislation

By Patrizia Paola C. Marcelo,
Reporter

PLANS to reallocate mobile frequency may require legislation, the Department of Information and Communications Technology (DICT) said, possibly prolonging the process of introducing a third player in the telecommunications industry.

“This may need a law, new legislation, and it may take a long time. We cannot take it back without due process,” DICT Officer-in-Charge and Undersecretary Eliseo M. Rio, Jr. said in a phone interview.

Mr. Rio said that a new law might be needed because if the government simply takes back the frequencies and reassigns them to another telecommunications firm, “it will go to court, before we get them [frequencies].”

Mr. Rio has said that the DICT will draft a policy seeking a “more equitable” distribution of frequencies, particularly with the upcoming entry of a third player.

Incumbents PLDT, Inc. and Globe Telecom, Inc. hold the majority of radio frequencies. The Philippine Competition Commission estimates that only 12.8% of the spectrum will be available for a potential third player.

Mr. Rio said that even in the event the department takes a “non-interference” approach, and opens up the spectrum to joint use, there is a legal process to be observed.

“We cannot take them back without any due process, it will affect public interest, and their subscribers. What you can do is take those without users, but then again, it needs quasi-judicial process,” Mr. Rio said, adding that there is the  challenge of proving that telcos are not utilizing frequencies. “The telcos will say, we have plans to use it, we’re just waiting for investors, etc.”

PLDT and Globe have said that they are using frequencies in the 700-megahertz (MHz) spectrum which they acquired from their purchase in 2016 of San Miguel Corp.’s telco assets.

While the DICT is studying how to reallocate frequencies, it has stated in its policy guidelines for the entry of a third player that the winner of the “auction” or selection process will be assigned available frequencies.

The government will choose the third player, based on the highest committed investment for the first five years. Applicants must have a congressional telco franchise, must not be an affiliate of PLDT or Globe, and have a commitment from a foreign partner if applicable.

Mr. Rio has estimated that the third player will need to spend P300 billion over five years, or P60 billion per year, in capital and operating expenses.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.

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