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Remittance increase slows in November

By Melissa Luz T. Lopez
Senior Reporter

CASH REMITTANCES increased annually for a second straight month in November last year but at a slower pace, the central bank reported yesterday, as overseas Filipino workers (OFWs) likely held on to their cash given a stronger exchange rate.

Money sent home by migrant workers totalled $2.262 billion that month, smaller than the $2.275 billion inflows recorded in October though two percent more than November 2016’s $2.217 billion, the Bangko Sentral ng Pilipinas (BSP) said.

While monthly inflows have stayed above $2 billion since February 2016, November 2017’s rise was slower than the year-ago’s 18.5% surge and October last year’s 8.4%, according to BSP data.

Remittances coursed through banks totaled $25.318 billion as of November, 4.0% more than the $24.341 billion recorded in 2016’s comparable 11 months. This growth pace matches the central bank’s forecast for the entire year, during which it expects total remittances to hit a fresh high at $28 billion.

The United States and Germany were the biggest sources of remittances in November alone.

Land-based OFWs sent 3.7% more money over the preceding year, while those working at sea wired 5.1% more than in 2016.

Sought for comment, a bank analyst said the stronger peso and easing price pressures on basic goods may have prompted overseas workers to send less money to their families in the Philippines.

“I think the slowdown in overseas Filipinos (OF) remittance growth for November was partly induced by a monthly appreciation in the Philippine peso vis-a-vis the US dollar as well as a moderation in inflationary pressures,” said Angelo B. Taningco, economist at Security Bank Corp. “[T]he stronger peso would tend to have discouraged OF remittances.”

The peso averaged P51.0384 versus the dollar in November, posting a slight recovery from the previous month’s P51.3433 as it traded at the P50 level against the greenback. The local currency touched fresh 11-year-lows in October as the peso traded above the P51 level against the greenback. A stronger peso-dollar rate meant that foreign currencies sent by OFWs are worth less once converted to pesos.

Domestic inflation also eased to 3.3% in November from October’s three-year peak of 3.5%, reflecting moderate overall price increases.

Mr. Taningco said remittance growth likely remained “modest” in December, as inflation steadied while the peso traded around the P49:$1 mark.

“With this, I believe OF remittances’ contribution to household consumption and economic growth during the fourth quarter of last year may have been modest also,” the bank economist added.

Remittances support domestic consumption, which in turn spurs overall economic growth. The Philippine economy expanded by 6.9% in the third quarter, pulling the nine-month climb to 6.7% against the government’s 6.5-7.5% full-year target for 2017.

Remittance increase slows in November

Jury still out on whether TRAIN will spur household consumption

By Krista Angela M. Montealegre
National Correspondent

AS CONSUMERS take on the burden of higher sales taxes, there is lingering uncertainty over the impact of the tax reform program on consumption — a key growth engine of the economy.

While the first of up to five planned tax reforms — Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) that was enacted last month and which took effect on Jan. 1 — will put more money into the pockets of Filipino wage earners who will now pay lower personal income tax, concerns have been raised over the tax plan’s potential effect on household spending since it will jack up levies on fuel, cars, tobacco, coal and sugar-sweetened drinks, among others.

Golden Arches Development Corp. (GADC), the master franchise holder of McDonald’s in the Philippines, and Max’s Group’s Inc., the country’s largest casual dining operator, will see higher input costs as a result of the tax plan overhaul, which they may pass on to consumers to protect their margins.

“There’ll be some period of resistance, but eventually we’ll be okay. I’m still very confident,” GADC President and Chief Executive Officer Kenneth S. Yang told reporters last week.

The Bangko Sentral ng Pilipinas (BSP) expects 2018’s full-year inflation to accelerate to 3.4% from 3.2% in 2017, with higher excise taxes adding “less than one percentage point” to price increases this year.

Consumption accounts for more than 60% of gross domestic product, which measures the value of final goods and services produced in a country.

“We may have to raise prices because our beverage prices will go up, but what we try to do is we balance everything out to make sure we continue to provide a lot of value for our customers,” Mr. Yang said.

McDonald’s offers bundled value meals that pair soda with regular fast-food menu staples hamburger and fried chicken.

S&R Membership Shopping has stopped serving unlimited soft drinks at the start of the year due to the higher taxes on sweetened beverages.

Max’s Group, on the other hand, is also exploring a number of options to mitigate higher input costs, including price increases and leveraging on its scale, Paul C. Cheah, the company’s investor relations officer, said in a mobile phone message.

“The market can absorb a price increase of 1-3% every year and when you go beyond that level, consumers cut down on their eating-out spend,” COL Financial Group, Inc. Head of Research April Lynn L. Tan said in a phone interview.

In the past, some companies had opted to cut the size of some their products instead of raising prices amid stiff competition in the industry.

Still, McDonald’s plans to open at least 40 branches this year and Max’s Group intends to roll out 80-90 new stores, including 20-30 outlets overseas, underscoring the solid outlook for their businesses, company officials said.

“The tax reform law is seen to boost consumer discretionary spending which in general should benefit the retail/food and beverage sector,” Mr. Cheah said.

SM Prime Holdings, Inc., the country’s biggest shopping mall developer and operator, also expressed confidence that consumer spending will stay robust despite the impact of higher inflation.

“Despite the increase taxes on key consumer products like fuel, sugar-related and ‘sin’ products, the overall impact favors higher purchasing power of most consumers,” SM Prime President Jeffrey C. Lim said in a text message, citing the higher net take-home pay of most salaried workers.

Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, concurred with Mr. Lim’s statement in an e-mail, saying the outlook for consumer spending remains strong for the year despite the implementation of the initial package of the tax reform program of President Rodrigo R. Duterte.

The sustained rapid economic expansion, expected to grow 6.5% year-on-year, will help support growth in household incomes, underpinning consumer spending growth that will also be boosted by lower income taxes in the tax reform package, Mr. Biswas said.

However, there have been some cautionary signs on spending even before the higher taxes kicked in.

Market research firm Kantar Worldpanel projected last month a “downward trend” in the purchasing confidence of Filipinos, who are buying less fast-moving consumer goods (FMCG) as they become “more conscious” of their spending.

“The impact (of the tax reform law) will not be immediate. We haven’t seen yet our take-home pay so most Filipinos are on a wait-and-see mode,” Lourdes B. Deocareza, new business development head at Kantar Worldpanel, said in a telephone interview.

Ms. Deocareza cited the weak purchasing confidence data, which stood at -11.8 points in July to September 2017, down from a confidence rating of 0.8 in the same period in 2015.

“Filipinos, generally, are not risk-takers. We are more prudent when it comes to these things. Kung before pa lang na (If we had been) leaning on the cautious side na, how much more with the TRAIN program happening,” she said.

Finance dep’t seeks to reduce political pressures on realty tax

THE THIRD tax reform package which the Department of Finance (DoF) plans to submit to Congress by “midyear” will seek to ensure that real property tax assessment levels are adjusted promptly and are insulated from local political concerns.

While Republic Act No. 7160, or the Local Government Code of 1991, requires provincial, city or municipal assessors “to undertake a general revision of real property assessments… every three years,” many local government units (LGUs) have failed to observe this requirement.

taxpayers
Besides shifting the burden on those who can pay more, the administration’s comprehensive tax reform plan hopes to further reduce local authorities’ dependence on their units’ annual share in national government tax collections. — BW FILE PHOTO

That omission, in turn, has left LGUs — the country’s 81 provinces, 145 cities and 1,489 municipalities — heavily dependent on their annual share in national government tax collections, called internal revenue allotment.

“The problem is most local governments are very hesitant to increase their assessments kasi constituents might get mad,” Finance Secretary Carlos G. Dominguez III told reporters on Thursday last week.

LGU officials are elected every three years and can be reelected up to a third straight term.

“So what we are going to suggest in the law is the national government provides the assessment on the values,” Mr. Dominguez said, adding that his department aims to submit the proposal to Congress by “midyear.”

A Bureau of Local Government Finance (BLGF) official, who declined to be identified, said in an interview yesterday, that the tax reform proposal will, among others, form a committee consisting of representatives of BLGF, the Bureau of Internal Revenue (BIR) and LGUs to regularly review local assessor’s property valuations before recommending new levels to the Finance secretary for final approval.

The proposal will seek to harmonize fair market values used to compute local real property taxes and zonal values used by the BIR to compute taxes on the sale and transfer of such properties.

“There will be a proposed committee to review, there will be a single valuation. Right now, we have the zonal values prepared by the BIR and then the schedule of market values prepared by the local (government). So dalawang (two) values and we’re planning to make it a single valuation,” said the BLGF official.

“The committee will be the one to recommend to the Secretary of Finance. We are trying to strengthen them (LGUs) and separate the political side. Natatakot sila (Local officials are afraid) because of the political backlash since it (adjustments in assessments currently) will be through an ordinance.”

Mr. Dominguez said that, unlike RA 10963, or the Tax Reform for Acceleration and Inclusion that was enacted last month and which took effect on Jan. 1, the third package will be “revenue neutral.”

“…[F]or the local government it might be revenue-positive, but it really depends on them — how they will use that tool.”

Mr. Dominguez said LGUs will still exercise autonomy by deciding assessment levels, expressed in terms of percent of excess over valuation brackets.

“If they want to apply it high, or they want to apply it zero it’s up to them. So the principle of local autonomy is still maintained,” said Mr. Dominguez.

“So that’s what we will do, we will propose to the legislation where the national government will provide it (land values) and they (LGUs) impose the tax. Right now they do both.”

The BLGF official said the envisioned committee will cover only cities and provinces, since municipalities follow valuation set by provincial assessors. — Elijah Joseph C. Tubayan

SEC rescinds Rappler’s incorporation papers

By Krista A. M. Montealegre,
National Correspondent

THE Securities and Exchange Commission (SEC) has revoked the incorporation papers of online news site Rappler, Inc. and its parent company for failing to meet the constitutional limits on foreign ownership, as investors closely monitor the ruling’s implication on listed mass media companies.

In a 29-page decision dated Jan. 11, the SEC, in an en banc decision, ruled that Rappler and its parent Rappler Holdings Corp. (RHC) were “liable for violating the constitutional and statutory foreign equity restrictions in mass media.”

The Foreign Equity Restriction in Article XVI, Section 11(1) of the Constitution provides that “the ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly owned and managed by such citizens.”

“Revocation of certificate of incorporation on each respondent — Rappler, Inc. being the mass media entity that sold control to foreigners, and Rappler Holdings Corp. being its alter ego, existing for no other purpose than to effect a deceptive scheme to circumvent the Constitution,” the SEC said.

A copy of the ruling will be furnished to the Department of Justice “for appropriate action,” it added.

“There is substantial evidence that respondents intentionally created an elaborate scheme, upon which its receipt of over a million dollars from a foreign investor would be theoretically defensible — the investor would never own ‘stock’ and would never receive ‘dividends,’ and he would never become an officer or director, but respondents would still be able to give him his money’s worth in the form of negative control and cash distributions, all through a private contractual arrangement,” the SEC said.

While the “formal, in depth” investigation on Rappler’s corporate structure began on July 8, 2017, the SEC has embarked on an “internal, inter-departmental investigation” as early as December 2016 when it received a letter from the Office of the Solicitor General requesting an investigation “for any possible contravention of the strict requirements of the 1987 Constitution.”

SPOTLIGHT ON PDR
The probe focused on Rappler’s sale of Philippine Depositary Receipts (PDR) — a security which grants the holder the right to the delivery of sale of the underlying share — to foreign entities Omidyar Network Fund LLC. and NBN Rappler LP.

The SEC, also in its ruling, declared “void” the PDRs issued to Omidyar pursuant to Section 71.2 of the Securities Regulation Code for being a “fraudulent” transaction.

“The restriction of foreign equity prevents any scheme to transfer rights attached to equity — even in the guise of an equity derivative. The (Omidyar) PDR requirement of ‘prior discussion’ and ‘approval of 2/3’ was a grant of more than 0% control to foreigners; control no less than 100% reserved to Filipinos,” the SEC said.

The SEC explained that “control” is not limited to stock ownership, but involves “other schemes that grant influence over corporate policy, actions and structure.”

Armando A. Pan, Jr., officer-in-charge of the Office of the Commission Secretary, said in a mobile phone message on Monday the “decision is not final and executory” and Rappler can appeal the SEC ruling with the Court of Appeals within 15 days.

‘PURE HARASSMENT’
In a statement posted on its Web site, Rappler said the SEC decision was “pure and simple harassment,” noting it has “acted in good faith and adhered to the best standards in a fast-evolving business environment.”

“We intend to not only contest this through all legal processes available to us, but also to fight for our freedom to do journalism and for your right to be heard through an independent platform like Rappler,” it added.

President Rodrigo R. Duterte claimed in his second State of the Nation Address last June that Rappler is “fully owned by Americans,” an accusation that Rappler has repeatedly denied.

Listed mass media companies ABS-CBN Corp. and GMA Network, Inc. have issued PDRs in the past to obtain foreign capital without violating the constitution.

“I am just not sure if this will create a domino effect where ABS-CBN and GMA would be dragged into the investigation due to their PDR issuances too. But we won’t really know until the issue with Rappler has been fixed first,” said Jervin S. de Celis, equities trader at Timson Securities, Inc., noting that the “noise” may depress share prices of the media companies in the short term.

Solicitor General Jose C. Calida applauded the SEC ruling and vowed to defend the regulator’s “sound decision.”

“This decision demonstrates that even influential media outfits cannot skirt the restrictions set forth in the Constitution,” Mr. Calida said.

The National Union of Journalists of the Philippines, in a statement, said it is “outraged” at the SEC ruling, noting that it “was one of many threats (Mr.) Duterte has made against media critical of him and his governance, such as the Philippine Daily Inquirer and broadcast network ABS-CBN, whose franchise renewal he threatened to block.”

“Hindi muna ako magsasabi na ito ba ay tama o mali, kasi meron naman talaga tayong mga proseso na dapat na sinusunod. Basta ang nararapat dito, hindi pinipigil ang isang organisasyon kung naghahayag ng balita o opinyon basta lamang ito ay naaayon sa batas,” said Senator Grace L. Poe, chairperson of Senate Committee on Public Information and Mass Media. — with reports from Arra B. Francia, Minde Nyl R. dela Cruz and Camille A. Aguinaldo

Gov’t makes full award of Treasury bills

By Karl Angelo N. Vidal

THE GOVERNMENT made a full award of the P20 billion it planned to raise through the auction of Treasury bills (T-bills) yesterday, with yields ending mixed, as market players parked their funds in the shorter tenor.

Offers received for Monday’s auction totalled P50.1 billion, more than twice the amount the Bureau of the Treasury (BTr) wanted to raise through the auction of three-month, six-month, and one-year debt papers.

The government borrowed P9 billion under the 91-day term as it received bids worth P22.835 billion. With the strong demand, the average interest rate rose to 2.233% from the 2.148% fetched during the previous auction.

The Treasury also made a full award of the P6 billion programmed under the 182-day tenor as banks and financial firms wanted to lend as much as P13.93 billion yesterday. In turn, yields slid to 2.519% from 2.563%.

The 364-day papers followed this trend, with the government awarding P5 billion out of the P13.35 billion in tenders posted by market players. This drove the average yield sideways to 2.849% from the 2.952% fetched in the previous auction.

“Auction results revealed strong demand for the T-bills as average rates trended downward from the previous auction, except for the 91-day tenor,” according to a statement from the Treasury.

National Treasurer Rosalia V. De Leon explained that huge appetite for the shorter tenor drove the yields of the six-month and one-year papers down.

“There’s really a huge appetite for short-tenor maturities. They have to park it in something that is some shorter tenor,” Ms. De Leon said, adding that the yield for the three-month papers rose due to base effects.

Asked about the drivers for the huge demand in the short end, Ms. De Leon said: “There’s a lot of movements like the US Fed[eral Reserve]. Also, there’s some speculations that the BSP (Bangko Sentral ng Pilipinas) will tighten about two to three hikes. At the same time, there’s too much liquidity…”

Meanwhile, traders interviewed said they expected the full award of debt papers after the five auctions wherein the Treasury fully rejected all bids from the market.

“There was demand for the T-bills due to the five auction failures. The market is now ready to buy,” one trader said over the phone.

Prior to yesterday’s auction, BTr rejected five offerings as its cash buffer remained healthy after its successful retail Treasury bond offering last November wherein it raised P255.4 billion.

The Treasury plans to auction off P120 billion worth of Treasury bills and another P120 billion worth of Treasury bonds in the January to March period. This is higher than the P200 billion the BTr offered in the last quarter of 2017.

GLOBAL BONDS
Meanwhile, Ms. De Leon said the Treasury is just waiting for some clearances before offering the $2-billion global bonds, adding that they are “taking a very close look at the market.”

“US Treasuries have gone up by about five to seven basis points already. China would not be buying, but they eventually clarified that they’re rebalancing their portfolio. Japan has reduced its bond buying program. There’s some speculations that they started its tightening,” she explained.

Ms. De Leon added that the Treasury still finalizing the tenor with its underwriters, noting that they are looking at a maturity of around 10 to 25 years.

Asked for its underwriters, she said there would be six, with Citibank, N.A. and Standard Chartered Bank to serve as lead underwriters.

On Thursday, Deputy Treasurer Ma. Sharon P. Almanza told reporters that they are set to offer $2 billion worth of Republic of the Philippines bonds.

“The size of the transaction is $2 billion: $1 billion in new money and $1 billion for liab[ility management],” Ms. Almanza said.

Senator files resolution on constitutional assembly

SENATOR PANFILO M. Lacson on Monday, Jan. 15, filed a resolution calling on the Senate to convene itself into a constituent assembly to propose amendments and revisions in the 1987 Constitution.

Senate Resolution 580 proposes that the Senate “constitute itself into a Constituent Assembly to propose amendments to or revision of the Constitution and upon approval by three-fourths (3/4) vote of all its members, approve the said amendments to or revision of the Constitution.”

Yet members of the House of Representatives for their part insisted on joint voting by the two chambers of Congress in amending the Constitution.

According to Article 17, Section 1 of the Constitution on Amendments or Revisions, “Any amendment to, or revision of, this Constitution may be proposed by: (1) The Congress, upon a vote of three-fourths of all its Members; or (2) A constitutional convention.”

In Section 3 under the same Article, “The Congress may, by a vote of two-thirds of all its Members, call a constitutional convention, or by a majority vote of all its Members, submit to the electorate the question of calling such a convention,” the Constitution reads.

Senators, however, have insisted on voting separately on this matter, with an opposition member of the Senate noting that its inaction on this priority agenda may stop charter change on its tracks.

Justifying his proposition, Mr. Lacson cited in the resolution the opinion of constitutional experts Father Joaquin Bernas and retired Justice Adolfo Azcuna who both said that Congress is not required to convene jointly to discuss charter change.

“The two houses of Congress are not required, as they were under the 1935 Constitution, to be in…joint session,” Mr. Bernas was quoted as saying.

“There is no general provision which says that Congress…must meet in joint session. There is none. When it comes to amendment(s), it doesn’t say you have to meet in joint session,” Mr. Azcuna, who was also a member of the 1986 Constitutional Commission that drafted the present Constitution, told the senators for his part.

Majority Floor Leader Vicente C. Sotto III and Senators Juan Miguel F. Zubiri, Gregorio B. Honasan, and Grace Poe-Llamanzares have manifested that they be co-authors of the resolution filed by Mr. Lacson.

Several senators also took the position that both chambers must vote separately.

Ms. Poe said the House is free to file their own resolution regarding the constituent assembly. “They are free to file their own version. We believe that the voting should be separate,” she said in an interview with reporters.

But Southern Leyte Representative Roger G. Mercado, chairman of the House committee on constitutional amendments, said in a press briefing also on Monday: “On the part of the House of Representatives, we are limited to the provision (the said Article 17). We cannot make any interpretation other than what is stated in our Constitution.”

He added: “(F)orgive me from saying but I think my counterpart in the Senate, Senator [Francis N.] Pangilinan,…he was just wasting our time and the money of our people. Let us go ahead and convene already the constituent assembly (con-ass) and do our work. Because there are really needed provisions that have to be revisited and reviewed.”

Mr. Sotto when sought for comment said via text: “The Constitution clearly does not state jointly, only in the issue of martial law it is mentioned.”

The Senate committee on constitutional amendments and revision of codes is set to tackle the proposed revision on the 1987 Constitution on Wednesday.

Mr. Mercado said his committee is set to meet today, Jan. 16. — Minde Nyl R. dela Cruz and Camille A. Aguinaldo

PSE acquires San Miguel’s stake in PDS for P80 million

By Arra B. Francia, Reporter

THE Philippine Stock Exchange, Inc. (PSE) has increased its stake in the Philippine Dealing Systems Holdings Corp. (PDSHC), after buying the shares held by San Miguel Corp. (SMC) for P80 million.

In a disclosure posted Monday, the local bourse said it has signed a share purchase agreement (SPA) with SMC for the acquisition of 250,000 common shares in PDSHC, which translates to 4% of the company’s total issued and outstanding stock.

The transaction will bring PSE’s total stake in the PDS to 61.03%, upon securing the approval of regulatory agencies such as the Securities and Exchange Commission (SEC), the Bangko Sentral ng Pilipinas, and the Philippine Competition Commission (PCC).

The PSE will be paying P73.5 million at the closing of the deal, while the remaining P6.5 million will be held in escrow. The acquisition price is based on PDS’ total equity value of P2 billion, or P320 for each share.

This marks the PSE’s sixth SPA with former PDS shareholders. The PSE had earlier inked agreements with the Bankers Association of the Philippines, Whistler Technologies Services, Inc., Investment House Association of the Philippines, The Philippine American Life and General Insurance, Co., and Finex Research and Development Foundation, Inc.

Other shareholders in the PDS include the Development Bank of the Philippines with 1.54%, the Social Security System with 1.54%, and the Investment House Association of the Philippines with 1.12%.

The transaction also forms part of efforts to increase PSE’s stake in the fixed income bourse in preparation for the pending merger of the two markets.

“From a corporate standpoint, maintaining the business operations of both the PSE and PDSHC while reducing operational costs through synergies can result in greater business scalability and profitability. As the two companies have highly similar and integrated functions, there should be synergies that could be realized particularly from an infrastructure standpoint, particularly on the technology side,” the PSE said.

The PSE is looking to conclude its merger with the PDS in the coming months, as it has already secured clearance from the PCC to proceed with the transaction. It is now working on bringing down broker ownership to be granted exemptive relief from the SEC.

PSE’s attributable profit jumped 54% to P514 million in the first three quarters of 2017, following an 8% rise in revenues to P953 million during the period.

Shares in PSE were up P3 or 1.25% to end at P243 each on Monday.

CARD Bank launches mobile app

DAVAO CITY — A microfinance provider part of a huge group of companies that provides services to the poor is introducing its newly implemented mobile application in a nationwide scale.

Based on its statement released to BusinessWorld, (Center for Agriculture and Rural Development) Bank, Inc. said it is looking at deploying the core banking system — a component of its mobile application — this year to parts of the country where it is present.

CARD Bank is part of CARD MRI (Mutually Reinforcing Institutions), a group of initiatives directed at providing key services to the poor, including those in the remote areas.

CARD Bank said it has started its core banking system orientation for its staffers in Mindanao as it “hopes to roll out” its centralized system that has an online component by the second quarter of the year.

Dolores M. Torres, bank senior management adviser, said the bank will make sure it uses the latest in banking technology so it can be at par with big banks.

“We continue to improve our products and services aligned with the changing needs of our members and clients,” said Ms. Torres.

The bank said it is among the first, if not the first, in the Philippine microfinance industry “to use (the) core banking system.”

“We are breaking the traditional banking operations and re-engineered our technology to core banking system to deliver better and stronger result of our services,” said Flordeliza L. Sarmiento, CARD Bank managing director.

Among the components of the new system is the konek2CARD mobile application that allows clients to monitor transactions under their savings accounts through balance inquiry and make bank transfers, among others.

A client can also enroll his or her account in the mobile application to either pay loans or deposit savings online. In case there is no Internet, the client can visit an agent in the community for the transactions.

The bank is also enhancing the application to provide more services to its clients such as paying bills and for remittances.

The use of mobile application, it added, is also in line with the Bangko Sentral ng Pilipinas’ goal to increase electronic transactions from just 1% of total volume at present to 20% by 2020. — Carmelito Q. Francisco

Licuanan fired — Duterte

CHAIRPERSON PATRICIA B. Licuanan of the Commission on Higher Education (CHEd) has been “dismissed” from his position, President Rodrigo R. Duterte confirmed on Monday afternoon, Jan. 15.

“Let me just say I have dismissed Licuanan today….Many will follow,” Mr. Duterte said during the turnover of Mitsubishi patrol vehicles and the inauguration of the new regional crime laboratory office building in Davao City on Monday afternoon.

But earlier that day, Presidential Spokesperson Herminio Harry L. Roque, Jr. said “the President has received the resignation of CHEd Chairperson Patricia Licuanan, who also issued what she called a “resignation statement.”

Ms. Licuanan is an appointee of the previous administration and is supposed to be on a fixed term until 2018. Yet she and Vice-President Maria Leonor G. Robredo had been barred by Mr. Duterte from attending Cabinet meetings.

Commenting on Ms. Licuanan’s resignation, Senator Francis Joseph G. Escudero, chairperson of the Senate committee on education, said: “It is unfortunate given the reforms and good job that she has done in the past years; however, I respect her decision and wish her well in her future endeavors.” — Arjay L. Balinbin

Peso rises as dollar consolidates

THE PESO strengthened slightly against the dollar on Monday as the greenback weakened against other major and regional currencies.

The local currency moved sideways to end at P50.37 against the greenback yesterday, three centavos stronger than its P50.40-per-dollar close on Friday.

The peso opened Monday’s session at P50.32 against the dollar, while its intraday low stood at P50.41. Its best showing, meanwhile, was at P50.30 versus the greenback.

Trading volume climbed to $697 million yesterday from the $588.5 million that changed hands in the previous trading session.

“Dollar-peso is just consolidating. The dollar was trading significantly lower against the major currencies, so the dollar index was down,” a trader said in a phone interview yesterday.

The trader attributed the weakness of the dollar to the weaker-than-expected retail sales data released by the US Commerce department on Friday.

Despite recording a 0.4% increase in retail sales for the month of December, the data failed to reach the 0.5% expectation. The growth was due to strong consumer demand brought by the holiday season.

“Surprisingly, dollar-Asia moved [higher], but not significantly compared with the other major currencies,” the trader added.

Another trader said the peso appreciated yesterday “amid mixed US inflation readings.”

As US headline inflation showed a slower reading in December, core inflation, as measured by the consumer price index, rose 0.3% compared with the figure a month ago, topping analysts’ expectations.

For Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, market players are looking forward to the release of the Philippine economic growth data later this month.

“[Market players are] looking forward to the GDP (gross domestic product) numbers, which are [generally seen as] positive. Basically, the peso appreciated due to it,” Mr. Asuncion said.

He said expectations of upbeat GDP growth data are driven by “increased investments, particularly in the infrastructure, and consumer spending.”

For today, Mr. Asuncion said the local currency may move between P50.30 and P50.50, while the two traders gave a slightly wider ranges of P50.20 to P50.50.

“The peso is seen to appreciate [today] due to likely stronger balance of trade data from the Euro area which can weaken the dollar,” the second trader noted. — Karl Angelo N. Vidal

AboitizPower takes P3.7-B hit with permanent closure of biomass plant

ABOITIZ POWER Corp. (AboitizPower) is taking a hit of P3.7 billion as it permanently stopped the operations of a biomass power plant because of the lack of organic materials to produce electricity.

“Our top consideration now is to balance the interests of all our stakeholders, including that of Aseagas’ employees,” said AboitizPower President and Chief Operating Officer Antonio R. Moraza in a statement on Monday.

AboitizPower in November temporarily halted operations of its 8.8-megawatt (MW) power plant in Lian, Batangas under its unit Aseagas Corp. because of the unavailability of organic effluent wastewater from its supplier, Absolut Distillers, Inc. 

“Total value affected as a result of the closure is estimated to be at P3.7 billion, which represents Aseagas’ invested equity of P3.45 billion and the company’s estimated remaining obligations of around P250 million,” AboitizPower said.

Mr. Moraza warned last month that a write-off was a possibility.

“The company also took the opportunity to assess the plant’s other issues, and after a full assessment decided to make the plant shutdown permanent,” the company said yesterday.

Ahead of the permanent closure, Aseagas had prepaid an outstanding P2.368-billion loan with the Development Bank of the Philippines (DBP). The company had invested equity of around P950 million for the biomass plant and has around P460 million in outstanding liabilities aside from the DBP loan, AboitizPower had said.

Mr. Moraza gave his assurance that AboitizPower remained on track to add around 500 MW, mainly from baseload and hydropower plants in 2018, moving the company closer to its 2020 target of 4,000-MW net attributable capacity.

AboitizPower acquired the biomass plant in July 2016, as it expanded its renewable energy footprint, which covers large hydro, run-of-river hydro, geothermal and solar.

The deal was through Aboitiz Renewables, Inc., the listed company’s holding firm that houses its investments in renewable energy. AboitizPower acquired the Aseagas facility from parent firm Aboitiz Equity Ventures, Inc.

The acquisition, which marked AboitizPower’s entry into biomass technology, followed the company’s foray into solar power with the inauguration in April 2016 of San Carlos Sun Power, Inc.’s 59-MW peak solar power plant in Negros Occidental.

The biomass plant was expected to start operating and delivering power to the Luzon grid before October 2016.

The facility was meant to use and convert the organic effluent of Absolut Distillery into clean and renewable energy. It was supposed to power about 22,000 households while producing 33 tons per day of liquid carbon dioxide for the industrial and beverage industries.

On Monday, shares in AboitizPower rose by P1 or 2.50% to close at P41 each. — Victor V. Saulon

Psychiatrists to be invited to impeachment hearing

By Tricia Aquino
Interaksyon

MANILA — The House committee on justice will invite the psychiatrists who supposedly “gave failing marks on the psychiatric or psychological make-up” of Chief Justice Maria Lourdes Sereno during the impeachment hearings against her, the panel’s chair, Oriental Mindoro Representative Reynaldo Umali, said on Monday at the resumption of hearings in 2018.

The psychiatrists were “allegedly ‘fired’ or whose contracts were not renewed upon the assumption of the Chief Justice,” he said.

In her verified answer to the impeachment complaint filed against her by lawyer Lorenzo Gadon, Ms. Sereno denied that she “failed the psychological examination administered by the JBC (Judicial and Bar Council)” and that under the existing JBC policy, “an applicant to any position in the judiciary with a grade of four is unfit for the job.” These accusations were false, she said.

“There is no such provision whatsoever in JBC-009, or the Rules of the JBC in effect when the Chief Justice applied for a position in the Judiciary,” her answer read.

Aside from that, according to her verified answer, “under JBC No. 2016-01, or the Revised Rules of the Judicial and Bar Council (JBC Rules) presently in force, the results of the psychological examination of an applicant are to be used solely by the Council ‘for evaluation purposes only,’”

Her answer also stated that under the JBC Rules, results of such examinations are “strictly confidential and are used solely by the JBC for evaluation purposes.” Ms. Sereno had “not consented to the release of her evaluation results to complainant or any third party,” thus, “any copy in their hands is one obtained in violation of the JBC Rules, doctor-patient privilege, and/or the Chief Justice’s right to privacy.”

According to a press release from the House of Representatives Press and Public Affairs Bureau, there had been reports that two psychiatrists hired by the JBC gave Ms. Sereno a rating of “4” from a scale of 1 to 5, with “5” being the lowest. This grade meant that while she projected a “happy mood,” she also exhibited “depressive markers.”

The same press release noted that after the test results were revealed, Ms. Sereno, who was chairman of the JBC, refused to renew the contracts of the two psychiatrists and terminated them in 2013.

But in her verified answer, it was pointed out that Ms. Sereno’s evaluation results are “irrelevant to these proceedings as they do not constitute any of the acts alleged in the complaint as grounds for impeachment.”

“Even if true, a ‘4’ in the alleged evaluation is not an offense, let alone an impeachable one,” her verified answer read.

It was also included there that the psychiatrists “were under short-term consultancy contracts,” which were “no longer renewed by the JBC after the expiration of their respective terms.”

This decision “was arrived at by the JBC as a collegial body after a thorough review of the methodology, performance, qualifications, and relevant training of said individuals.”

As for Mr. Gadon’s allegation that Ms. Sereno “flies into a rage every time the issue of psychiatric testing comes up during deliberations in the JBC,” the verified answer said that this was “false, baseless, and . . . hearsay.”

It added that the allegation was not based on Mr. Gadon’s personal knowledge, but on “unsubstantiated and false news reports.”

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