Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 11713

No interest rate impact seen from tax reform

By Melissa Luz T. Lopez
Senior Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) will not have to adjust interest rates despite inflation pressures from tax reform that has just taken effect, a senior central bank official said, explaining that easing restrictions on rice imports could offset the impact of higher levies on basic goods.

The first of up to five planned tax reform packages — Republic Act No. 10963 — kicked in on Monday, which is expected to generate P82.3 billion in additional revenues in its first year of implementation.

The measure reduces personal income taxes for those earning below P2 million, alongside a simpler system for computing donor and estate taxes.

Foregone revenues will be offset by the removal of some value-added tax exemptions; increased tax rates for fuel, automobiles, tobacco, coal, minerals, documentary stamps, foreign currency deposit units, capital gains for stocks not in the stock exchange, and stock transactions; and new taxes for sugar-sweetened drinks and cosmetic enhancements.

BSP Deputy Governor Diwa C. Guinigundo said higher taxes on consumer goods will likely drive up inflation, but not at an alarming rate as far as the central bank is concerned.

“We anticipate that the impact on inflation is less than one ppt (percentage point). But that hardly justifies a monetary response from the BSP because the impact is on the supply side,” Mr. Guinigundo said in a mobile phone message when asked about the impact of the tax reform law.

“We shall consider adjusting our monetary stance when second-round effects are triggered because the demand side would be upset, generating demand pressure for higher wages and higher transport fares,” he added.

Split into up to five tranches, the entire tax reform program is designed to shift the burden to those who can afford to pay more, while raising additional revenues that will help finance the government’s ambitious P8.44-trillion infrastructure development effort until 2022.

The government has kept its annual inflation target at 2-4% for 2018 despite the expected impact of the first tax reform package.

In particular, the BSP sees full-year inflation averaging 3.4% this year, picking up from the 3.2% expected for the entire 2017.

Mr. Guinigundo said this showed that tax reform will not have much impact on overall price increases such that the central bank would have to step in.

The Monetary Board has kept its policy stance unchanged since September 2014, except for procedural cuts to key rates for the shift to an interest rate corridor scheme in June 2016. Manageable inflation and firm domestic demand has allowed the BSP to stand pat on policy settings, as these remain supportive of robust economic growth.

GAME CHANGER
On the flip side, Mr. Guinigundo said monetary authorities expect price pressures from higher taxes to be offset by a proposed law that seeks to allow a bigger supply of cheap rice to enter the Philippine market.

“[I]f Congress is able to pass the rice tariffication bill early enough this year, that could be a game changer because liberalizing rice imports would have the effect of cheapening the general price of rice which accounts for nearly nine percent of the consumer basket,” said the BSP official, who is an alternate member of the National Food Authority Council that sets rules and regulations for rice importation.

“Our initial estimate puts it at around 1 ppt reduction, which on balance could provide some counterweight to the inflationary pressure of the higher excise tax on fuel.”

Quantitative restrictions on rice imports — part of a preferential trade deal secured by the Philippines since 1995 — currently allows the country to limit the volume of rice imports every year in order to shield local farmers from cheap foreign rice.

Once lifted, individuals and businesses can import additional volumes of the crop, but will have to pay a higher tariff.

The BSP has been backing the lifting of rice quantitative restrictions as it would have “beneficial” effects to inflation.

Tariffs collected by the government are expected to support mass irrigation, warehousing, and rice research, Mr. Guinigundo added.

On balance, Mr. Guinigundo said the tax reform is expected to fund additional infrastructure projects that would “increase potential output” of the Philippine economy, and will eventually mitigate price pressures in the long run.

Aggressive public spending and equally upbeat household consumption are expected to spur annual economic growth to a faster 7-8% up to 2022, keeping the Philippines one of Asia’s fastest-growing economies.

Emerging markets sailed through storms in 2017. What next?

LONDON — After a year of double-digit returns, one of the key questions for emerging markets in 2018 is whether they will continue to be insulated from one another’s crises.

Contagion, an intrinsic feature of the sector for years, shrank to such an extent that an almost 10% drop in Brazil’s currency in a single day in May had little effect on its emerging market peers.

Was that proof investors now treat individual emerging markets on their own merits, rather than as members of a homogenous poor and crisis-prone bloc?

Or was it just a function of central bank money-printing and near-zero interest rates?

Both played a part.

Not too long ago, a sell-off like that of Brazil’s real currency on May 18 last year would have sent central banks in distant Asia and Africa scrabbling to defend their markets via interest rate rises or dollar sales.

Instead, its Latin American neighbor Chile cut interest rates with little weakening in its currency, while in the Middle East, Oman announced plans for a dollar bond.

Earlier that week, as the corruption scandal which exploded on May 18 brewed in Brazil, “junk”-rated West African state Senegal borrowed $1.1 billion on bond markets.

“Back in 2000, if Philippines sold off in the Asian morning, it meant Russia would sell off in the London morning,” said Steve Cook, co-head of emerging debt at PineBridge Investments.

Mr. Cook said his fund did not exit Brazilian markets on May 18, opting instead to shuffle the portfolio towards companies which would benefit from currency weakness.

“Brazil sold off because of political uncertainty, but we knew it doesn’t impact Colombia or Peru from a macro perspective.”

But a 2008-style crisis emanating from the United States or China would still spark indiscriminate flight from emerging markets towards “safe” assets such as the Swiss franc, specialists say.

“The single-largest driver of EM performance is and will continue to be — growth. As we are seeing synchronized growth recovery, that’s what is underpinning relatively low contagion,” said Polina Kurdyavko, co-head of emerging markets at BlueBay Asset Management.

Ms. Kurdyavko bought Brazilian bonds after the sell-off, judging that recovery from economic recession would continue and that “the fundamental story in Brazil is unchanged.”

Around half of the May 18 correction reversed over the following week as local and foreign funds snapped up bargains.

STRUCTURAL TRADE
Emerging bonds earned double-digit returns this year, shrugging off Venezuela’s expected default, in a striking contrast to crises in Asia in 1997 or Turkey in 2001, shock waves from which rippled through the developing world.

Change has been building for a while. There was little contagion from the July 2016 attempted coup in Turkey or Russia’s 2014 meltdown and even in 2013, the so-called Fragile Five developing countries were far worse hit than peers when the United States signalled plans to start unwinding its stimulus.

Russia’s decision on Dec. 15 to cut interest rates by half a percent, just two days after the US Federal Reserve raised rates, shows central bank policies are increasingly dictated by their own economic conditions, rather than the Fed.

Mexico and Turkey raised rates a day before Russia’s cut.

Expectations of more US rate rises and the European Central Bank halving its bond buying will test individual emerging economies in 2018, emerging market veterans say.

But the sector as a whole is insulated by sweeping changes within the asset class and its investor base in the past decade.

Improvements made since turn-of-the-century crises are easy to pinpoint — inflation-targeting central banks, floating currencies, and borrowing that is now 80% denominated in emerging currencies rather than dollars.

Increasing numbers of investors have also come to view emerging markets as a structural rather than short-term trade.

That includes many Western pension funds which a decade back may have shunned emerging markets as too risky but are now raising exposure to benefit from the high yields on offer.

Thomson Reuters fund research firm Lipper tracks over 13,000 dedicated emerging bond and equity funds, up from about 2,000 back in 2003. And just in emerging debt, the most widely used GBI-EM index is used as a benchmark by funds managing over$200 billion in assets, up ten-fold from 2007.

‘MORE STICKY’
Because dedicated investors do not tend to bail out wholesale when crisis strikes, “a crisis in one country can be supportive for the other,” said Richard Benson, co-head of portfolio investments at Millennium Global.

Mr. Benson recalled when he started his career 15 years ago, most investment firms would have a tiny allocation to developing economies, just to diversify portfolios, whereas now 5-10% of total assets are likely in emerging markets.

“So if there’s a crisis in Turkey, you underweight Turkey and buy Korea,” Mr. Benson added.

Other investors highlight the speed at which developing countries’ own savings pools are growing, allowing governments in the more sophisticated Asian, Eastern European or Latin American countries to meet most of their financing needs from local pension and insurance funds.

And these local investors not only stay put during selloffs, they also usually step up to buy when foreigners flee, limiting market falls.

Chris Perryman, a portfolio manager working with Steve Cook at PineBridge, noted for instance that up to 70% of new Chinese bonds are now sold within Asia, versus a fifth when he first started trading emerging debt 14 years ago.

“That’s due to the size of regional asset management capacity,” he said.

“The dedicated flow has become more sticky and less likely to run for the hills.” — Reuters

Grab Philippines, taxi operators seek to raise fares

TAXI OPERATORS and transport network service company Grab Philippines (MyTaxi.ph, Inc.) are seeking to raise fares, citing the impending increase in excise taxes on fuel under the new tax reform law.

In a press conference in Makati City on Wednesday, Grab country manager Brian P. Cu said the company will file an application to increase its fares by 6-10% before the Land Transportation Franchising and Regulatory Board (LTFRB).

“We’re looking at a fare increase of anywhere between 6-10% of current fares,” he said.

With the fare hike, a GrabCar user who pays an average of P150 to P170 per trip would have to pay P11 to P13 more.

Mr. Cu noted a full-time Grab driver spends between P800 to P1,100 on fuel a day. With the new tax reform law, he said a driver would face a 5% rise in gas expenses and around 2-3% for spare parts costs.

Excise taxes are estimated to increase by P2.50 per liter for diesel, and P7 per liter for gasoline.

“This would definitely impact their daily expenses which would impact their monthly earnings, and if a fare adjustment is not made, this would put in question their income on a monthly basis and thus further potentially reduce the number of TNVS (transport network vehicle services) vehicles plying the streets, because they would be forced to find other jobs that are better paying,” Mr. Cu said.

At the same time, the Philippine National Taxi Operators Association (PNTOA) also wants to hike its flag down rate to P50 but has yet to file a petition with the LTFRB.

“We are hoping that LTFRB would on its own volition grant a temporary P10 increase in the flag down rate. But if it does not happen, yes, we will file a petition,” PNTOA President Jesus Manuel “Bong” C. Suntay said in a text message.

For the LTFRB, board member Aileen Lourdes A. Lizada said the PNTOA and other transport groups should file a petition and justify the reasons for requesting a fare hike.

“If there is a petition for fare increase filed by PNTOA or any transport group for that matter, they need to justify why the Board should grant a fare increase and what services should be delivered and likewise we need to hear the side of the commuters’ group before the Board will issue any order,” Ms. Lizada said in a separate message.

The LTFRB in October 2017 approved higher taxi fares — a flag down rate of P40 with P13.50 added per kilometer and P2 added per minute of waiting time, from rates of P3.50 for every 300 meters and P3.50 per minute of waiting time.

Taxi meters have yet to re-calibrated, and the LTFRB said the increase should mean an improvement in services, including the launch of taxi-hailing applications.

“Taxi meters need to be re-calibrated and part of the decision is that there are taxi apps as well, if there is a fare increase there should be a corresponding ‘leveling up’ of their services,” Ms. Lizada said.

DOE TO CHECK OIL FIRMS
Meanwhile, the Department of Energy (DoE) expects prices of petroleum products to remain largely unchanged in the next 15 days when old stocks will be used up by retailers. However, the DoE warned that consumers will feel the full impact of the new excise tax rates on fuel by March or April.

Energy Undersecretary Felix Wiliam B. Fuentebella said the DoE had asked oil companies, which he said readily agreed, to submit their stock inventories as of Dec. 31, 2017 cut-off date and the start of the tax reform on Jan. 1, 2018.

“In addition, they have also agreed to share the data on when they sold to the dealers and retailers the stocks on which the [new] excise tax has been imposed,” he said in a press conference at the DoE headquarters in Taguig City on Wednesday.

Based on DoE computations, the price of gasoline starting on Jan. 1, 2018 — the start of the first tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) — will increase by at least P2.97 per liter. Diesel will increase by P2.80 per liter and kerosene by P0.36 per liter. The price increases also include the 12% value-added tax (VAT), the DoE said.

Mr. Fuentebella said the DoE has informed the oil companies that a team from the agency would be doing random checks on the refineries, depots and even retailers to check whether they are implementing the correct excise tax.

“We will make sure that old stocks will not be sold under new tax rates,” said Energy Assistant Secretary Leonido J. Pulido III.

Mr. Pulido said the submissions from the oil companies would include their importation, refined crude to give the DoE an idea of their existing inventory.

“We have historical data as well regarding consumption in previous years,” he said.

On top of the excise tax and the value-added tax, oil prices largely reflect the movement of prices in the international market, which move depending on the supply from oil producers and big consumers such as the US and China.

Mr. Fuentebella said other factors also have an impact on prices such as the peso rate against foreign currencies, freight costs, and the peace and order situation.

Asked about the impact of the excise tax on electricity prices, he said the DoE would be holding a meeting with the distribution utilities to discuss their distribution development plan in view of new regulations such as Renewable Portfolio Standards.

For 2019, the increase for gasoline prices under TRAIN is P2.24 per liter, while diesel and kerosene are expected to rise by P2.24 and P1.12 per liter, respectively.

For 2020, the price increases for gasoline, diesel and kerosene are P1.12, P1.68 and P1.12 per liter, respectively. — Patrizia Paola C. Marcelo and Victor V. Saulon

Seven-day term deposits twice oversubscribed

By Melissa Luz T. Lopez,
Senior Reporter

BIDS for week-long term deposits ballooned to twice the amount of the instruments offered during yesterday’s auction, as banks held more cash by the end of the holiday season. 

Demand for the seven-day tenor surged to P95.55 billion on Wednesday, more than double the P40 billion which the Bangko Sentral ng Pilipinas (BSP) placed on the auction block. Total tenders also picked up from the P59.808 billion in offers received the previous week.

The overwhelming bids drove the average yield down to 3.3654% as banks sought returns ranging from 3.25-3.4%. The rate declined from the 3.3995% average fetched during the Dec. 27 exercise.

The term deposit facility (TDF) is currently the central bank’s main tool in shoring up excess funds in the financial system. The window allows banks to park the extra cash they hold under the BSP in exchange for a small margin, which is determined through weekly bids hosted by the central bank.

Through this, the BSP expects to bring market rates closer to the 3% benchmark borrowing rate, coming from below the 2.5% floor of the interest rate corridor when the TDF auctions started in June 2016.

“After the holidays, liquidity goes back to the banks. They are now more liquid and they need to place their money very quickly,” BSP Deputy Governor Diwa C. Guinigundo said in a text message to explain the sudden spike in demand.

Tighter competition for the limited supply of week-long term deposits thus drove rates down, he added.

The central bank has kept the weekly term deposit auctions limited to the week-long instruments since mid-December, in light of a smaller surplus of cash held by financial players over the holiday season.

The 28-day tenor was last offered on Dec. 13, during which the P40 billion auction volume was met by just P33.005 billion in total demand.

Despite the recovery in bank bids, the central bank decided against offering the month-long tenor next week, although this maturity will likely be revived over the near term.

“We shall restore the 28 days TDF in due time as liquidity normalizes after the holidays and the banks have more regular view of their investment horizon,” Mr. Guinigundo added.

The shorter tenor lends more “flexibility” for banks to manage their funds and service client demands over the Christmas season, when there is greater demand for cash as Filipinos spend more for celebrations and gift-giving activities.

The BSP is in talks with banks as they consider offering a new tenor for term deposits, which would likely be longer than a week but shorter than a month.

Another P40 billion worth of seven-day term deposits will be up for grabs on Wednesday.

Tighter anti-money laundering monitoring now in force

TIGHTER RULES on report submission on potential dirty money transactions take effect today, under new guidelines which also require financial firms to upload customer data to the online portal of the Anti-Money Laundering Council (AMLC).

In December, the financial intelligence unit announced the adoption of comprehensive AMLC registration and reporting guidelines (ARRG) for financial institutions, which will digitize submissions as well as the flagging of alerts, analysis, investigation, and escalation of reports to the regulator.

The changes are outlined under AMLC Resolution No. 107 which compels covered institutions to submit covered transaction reports and suspicious transaction reports within five to 10 days from the occurrence or discovery of such deals.

The guidelines also make it mandatory for firms to upload know-your-customer documents to accompany suspicious transaction reports, which is expected to make it easier for the AMLC to assess and go after illegal wealth.

The online filing of these client data is required for funds believed to be proceeds of kidnap-for-ransom, drug trafficking, murder, hijacking and terrorism. Among the information sought by the regulator include signature cards; customer information sheets; and scanned copies of government-issued identification cards, articles of incorporation for businesses; and digital photos.

“The requirements for the uploading of know-your-customer documents and the uploading of electronic returns for freeze orders shall take effect on the first banking day of January 2018,” the financial intelligence unit said in an advisory posted on its Web site.

The AMLC is tasked to track, investigate, and recover ill-gotten wealth and combat terrorist financing.

As a rule, covered entities must report to the AMLC any fund transfers amounting P500,000 in a day. Meanwhile, suspicious transactions are those which appear out-of-pattern or unjustifiable compared to a person’s financial position, which may be taken as a potential case of unexplained wealth from illicit sources.

Under the ARRG, all reporting institutions are required to upload reports through AMLC’s online system through unique 18-digit numbers assigned upon registration, where they will course all submissions to the regulator.

A separate platform will be created for casino and other gaming operators, following the recent passage of a law that requires the reporting of single cash transactions worth above P5 million and suspicious transactions to the AMLC.

These changes come after a government-wide survey showed that money laundering threat in the Philippines remained “high” as of 2015-2016, unchanged from a previous report which covered the years 2011 to 2014.

The Philippines remains vulnerable to money laundering as gaps in local laws keep the country as a viable venue for dirty money with banks and remittance agents used as main channels, according to the second National Risk Assessment report published last month.

Other platforms considered with a “high” risk of being used for dirty money deals include jewelry dealers, lawyers, accountants, casinos, and non-profit organizations. Meanwhile, risks involving insurance brokers and securities dealers were given a “medium” threat rating as investment-related scams and pyramid schemes remain.

The Philippines also serves as a safe haven for international criminals to cleanse ill-gotten funds, the AMLC said. Some P608 billion worth of dirty money trickled in from foreign sources, the biggest of which are in Kazakhstan and the United States. Bulk of these funds were drawn from fictional entrepreneurship, tax evasion and fraud, and were mostly transferred via bank transactions.

Back home, the biggest sources of illegal funds are tax evasion, smuggling, copyright infringement, illegal manufacturing of firearms and explosives, environmental crimes, investment fraud, drug trafficking, and corruption in government, the report added.

In July last year, the Philippines got out of the watch list of the Asia Pacific Group on Money Laundering, which is the regional unit of the global watchdog Financial Action Task Force that monitors the adequacy of laws to combat dirty money. — Melissa Luz T. Lopez

SBS Philippines buys Coca-Cola’s warehouse

By Krista A. M. Montealegre,
National Correspondent

SBS PHILIPPINES Corp. is taking over a warehouse facility owned by a subsidiary of multinational beverage giant The Coca-Cola Corp. to improve its distribution capability and generate gains from operational enhancements and diversification of income streams.

SBS, in a disclosure to the stock exchange, said its subsidiary Lence Holdings Corp. (LHC) entered into a binding commitment with The Coca-Cola Export Corp. (TCCEC)-Philippine Branch for the acquisition of warehouse facilities and property lot at the Silangan Industrial Park in Calamba, Laguna for P520 million.

The deal, expected to close this month, involves a 4.7-hectare warehouse facility complex with ambient and cold storage facilities, machinery and other building improvements.

SBS will use the property for its warehouse and distribution operations that will serve as a key distribution hub for regional market customers south of Metro Manila.

“(T)he south depot will allow greater opportunities for customers cut down on their logistics and sourcing organization, integrate the Corporation’s procurement and logistic capabilities in their business processes, and promote collaborations for supply chain optimization to simplify their operations,” SBS said.

The logistics facility presents a good investment opportunity to broaden its asset base, the company said, noting that it can also lease or use the other areas for additional business building projects of the group.

To facilitate the transaction, LHC entered into a share purchase agreement with TCCEC — a Delaware-registered company licensed to do business in the Philippines as a branch and the Bank of the Philippine Islands in trust for the Coca-Cola Affiliated Companies in the Philippines Retirement Plan — for the purchase of 100% interests in Benesale Land, Inc. (BLI).

BLI owns the parcel of land on which the facility is located. LHC separately entered into an asset purchase agreement with TCCEC for the assets within the property.

LHC, which was incorporated in November, is 65% owned by SBS. SBS Holdings and Enterprises Corp. controls 25% and the Sytengco family holds the remaining 10%.

A chemical trader and distributor, SBS diversified into the property and investments business last year to offset some of the fluctuations in the chemical trading business and, at the same time, provide a new income source for the company.

Shares in SBS added 18 centavos or 3.21% to close at P5.78 apiece on Wednesday.

Peso rises to new six-month high

THE PESO continued to strengthen against the dollar as trading resumed on Wednesday amid uncertainty over the US Federal Reserve leadership.

The local currency closed the session at P49.81 against the greenback yesterday, 12 centavos stronger than its P49.93-per-dollar close on Friday.

Wednesday’s finish was also the peso’s best close since it ended at P49.63 against the dollar last June 15.

The peso traded stronger the whole day as it opened the session at P49.80, also its intraday high. Its worst showing, meanwhile, was just at P49.92 against the dollar.

Trading volume dropped to $634.2 million yesterday from the $742.2 million that changed hands in the previous trading session.

“The peso appreciated at the first trading day of the year amid the local tax reform bill’s effectivity this year along with the overall global weakness of the dollar on uncertainty over the Federal Reserve’s direction under incoming Fed chair Jay Powell,” a trader said in an e-mail on Wednesday.

Economists are concerned how the Fed will perform this year in terms of its interest rate policies, given that the experienced members of the Fed’s board of governors will step down from their positions.

Meanwhile, another trader noted that yesterday’s trading was mostly just consolidation.

“[Yesterday, we didn’t see] aggressive offers in the offshore market so I’m not sure if that’s an indication. I guess we’ll continue to consolidate,” the trader added.

A third trader attributed the peso’s rally to accumulated flows over the long weekend and the upbeat performance of the local bourse.

Yesterday, the Philippine Stock Exchange index closed at another all-time high of 8,724.13, up 1.93% or 165.71 points.

For today, the second trader said the peso will move between P49.75 and P50 against the dollar, while the first trader gave a mostly stronger range of P49.65 to P49.85.

“The peso is expected to continue [to] strengthen primarily due to profit taking prior to the release of December FOMC (Federal Open Market Committee) minutes…,” the first trader said. — Karl Angelo N. Vidal

ICT Davao urges BPOs to improve safety systems

DAVAO CITY — Business process outsourcing (BPO) companies should adopt better safety systems at their facilities to prevent a repeat of the deadly fire at New City Commercial Center (NCCC) mall, where an American firm was holding office, according to the head of ICT Davao, Inc.

“There will be short term effect and people will naturally ask themselves whether working in a BPO will really be safe. I think for as long as the BPOs will be able to show they have adopted better systems and a better appreciation on how to fix their facilities so that the incident will not occur again or they can mitigate or avoid it then I’m sure the workers will still appreciate BPO jobs,” ICT Davao President Samuel Matunog said in an interview.

ICT Davao is the umbrella organization of the information communication technology industry in the Davao region.

Mr. Matunog said at present, there are an estimated 45,000 to 50,000 BPO workers in Davao. He is still hoping to increase the figure to 70,000 within the next three years.

“Malaki naman ang industry natin and we have other facilities and so many developers are building structures not within the malls. We have several facilities built for BPOs following international standards,” he said.

A fire hit NCCC mall last Dec. 23, killing 37 employees of BPO firm Research Now SSI and one mall employee.

Mr. Matunog noted SSI, which has been operating in Davao since 2008, is committed to continuing its operations.

“We expect in the next 60 days… they can resume operations in Davao so their 500 other workers will not lose their jobs. They continue to receive their salary and benefits while the company is relocating to a new and better site,” he said.

Mr. Matunog said ICT Davao and the IT and Business Process Association of the Philippines will study the results of the investigation into the fire, and will make recommendations.

He said companies should conduct annual safety drills as required by the Bureau of Fire Protection and in compliance with labor regulations. — Maya M. Padillo

Alvarez: ‘No-El’ in shift to federalism ‘possible’

HOUSE SPEAKER Pantaleon D. Alvarez on Wednesday, Jan. 3, raised the possibility of the 2019 midterm elections giving way to the shift toward a federal form of government if this is approved in a plebiscite, as planned this year.

In an interview with journalist Karen Davila of ANC, Mr. Alvarez said convening Congress into a constituent assembly (along with) revising the Constitution is “number one” in this year’s legislative agenda.

“Para sa akin (For me), we can convene by January, puwede nating i-submit iyan for (we can submit this to a) referendum (in the) barangay elections (of) May,” Mr. Alvarez said.

Asked about the likelihood of a no-election scenario in the midterm, the Speaker said “I have to be frank about it….Anything is possible. You know why? Let’s be practical. Kapag nag-shift ka (If you shift) into a different form of government,…you need a transition government.”

He added: “Mag-eleksyon tayo sa 2019 (Let’s have elections in 2019). That’s not a problem. Pero dapat tingnan natin dito na ano ba ang praktikal, ano ba ang objective dito (But we have to see what’s practical, what’s the objective)?”

“Magshi-shift ka into a federal form of government, magbabago yung istraktura ng gobyerno (If you shift into a federal form of government, the structure of government will change)….”

The Speaker said, when asked, there were ways (“may mga paraan”) to convince the Senate into supporting this agenda, noting that this is a “priority of this administration” and “the advocacy of (the ruling) PDP(-Laban) is federalism. (So) I don’t see any reason why (the) Senate President will not be working on it also.”

“This is a question of patriotism,” Mr. Alvarez also said.

He also took the position that Congress as convened into a constituent assembly will vote jointly on the matter.

Senate President Aquilino Martin L. Pimentel III, when sought for comment, told reporters: “That is not an ‘either-or’ situation. We can shift to federalism and allow all scheduled elections under the existing (Constitution) to go on and be held. What is important are the transitory provisions which will govern the terms and duties of those elected in the last election under the 1987 Constitution.”

“And before we can operate under a new constitution, the provisions of the existing constitution must be followed. Hence, if there are scheduled elections under the existing constitution, then this must be followed,” the Senate leader added.

Asked about the possibility of President Rodrigo R. Duterte’s term being extended under federalism, Mr. Pimentel said: “Depends on the transitory provisions. And depends too on when we approve the new constitution. If 2019, then the next three years will be the transitory period. We can extend the President’s term, number one, if really necessary, and two, if he is amenable to it, and three, since that extension will be part of the new constitution, the new constitution is approved by the people themselves.”

For his part, Presidential Spokesperson Herminio Harry L. Roque, Jr. said when sought for comment: “(T)he President always looks to the Constitution as his guiding document. The Constitution sets the date for the next elections in 2019. So unless the Constitution is amended ahead of the 2019 elections, it will have to push through.”

He added: “I can categorically state that PRRD does not want that (term extension). He wants to cut short his term rather than lengthen it.”

For his part, opposition Senator Francis N. Pangilinan said in a statement: “After witnessing the congressional hearings on extrajudicial killings, on Senator De Lima’s alleged connection with drug syndicates, on the P6.4-billion BoC shabu smuggling scandal allegedly involving the Davao group, the impeachment of Chief Justice Sereno, the approval of the 1-year extension of martial law in Mindanao, the slashing of the CHR budget to P1,000, will you trust Congress with charter change?”

Akbayan Representative Tomasito S. Villarin said in part: “The cat is out of the bag. It reveals the true intentions of the Duterte administration to perpetuate themselves in power. It speaks volume of how they have arrogated power unto themselves and instilled fear upon the people who oppose their position.”

Kabataan Party-list Representative Sarah Jane I. Elago in her statement said: “Setting aside Barangay and SK elections for the sake of giving way to the shift to federalism, along with the proposals of term extension, only allows the current administration to appoint interim officers who are subservient to its anti-people policies. The youth has vehemently opposed the subsequent election postponements as a form of depriving the people of their inherent and democratic right to choose their leaders. — with M.N.R. dela Cruz

Malacañang defers announcement on official to be sacked

MALACAÑANG HAS deferred its planned disclosure of the name of the government official expected to be fired by President Rodrigo R. Duterte.

Presidential Spokesperson Herminio Harry L. Roque, Jr. said on Wednesday, Dec. 3, “I read a text instructing me to hold in abeyance announcement of who it is that the President will sack next. Of course, this is not the first time it has happened. When he announced that he will fire an entire commission, he did not mention which commission first and it took a couple of days before I was authorized to make the announcement.”

He added: “So, although I was directed to announce as early as Jan. 30, the instruction was to announce in our next press briefing, which is today. But of course, the beginning of the day, I was asked to defer with the said announcement.”

Mr. Roque also said he had been advised by the Presidential Management Staff (PMS) that the President was “reviewing the legislative charter of the agency” which is currently headed by the said official.

As for the possibility that the official could be from the Philippine Charity Sweepstakes Office (PCSO), Mr. Roque said: “I can make the confirmation that the official…is not from the PCSO (Philippine Charity Sweepstakes Office).”

The spokesman noted Mr. Duterte’s awareness of PCSO board member Sandra Cam’s allegation on agency’s Christmas party said to cost about P10 million.

“He knows about the issue. I have confirmed that he knows about the issue,” Mr. Roque said, adding that the President “holds in high esteem both (the) PCSO General Manager and Sandra Cam” whom he recently appointed to the post. — Arjay L. Balinbin

PBA: improving the product

By Michael Angelo S. Murillo
Senior Reporter

WHILE the Philippine Basketball Association (PBA) has been in existence for a good four decades now, challenges continue to persist which officials are not shying away from but instead taking head-on, knowing fully that through it they are only going to make the league stronger.

Currently, foremost of the tests Asia’s first play-for-pay league is facing is how to bring back fans to the games, with gate receipts the PBA recognizes could be better.

Last season, the PBA reported that gate receipts breached the P200-million mark, translating to a 3% increase from the previous year.

The numbers were greatly pulled up by the PBA’s decision to play the final three games of the Governors’ Cup finals between the Barangay Ginebra San Miguel Kings and Meralco Bolts in the mammoth Philippine Arena in Bulacan.

The move proved to be a blockbuster one with Game Five of the finals attracting 36,445 fans then 53,642 in Game Six and 54,086 in the rubber match Game Seven.

Despite finishing with a gain in gate receipts, league governor Al Panlilio of Meralco said the PBA no doubt has some shaping-up to do to attract the fans back.

“Our concern really is how to bring back fans to the games. We’ve noticed that the crowd attendance has gone down and maybe the interest is waning. At the end of the day it’s the product which is the PBA and we need to take a look at how we can attract the fans back and entice new ones, the younger generation,” Mr. Panlilio said in a recent interview with BusinessWorld.

“We want to see once again the Crispa-Toyota days when the game venues were filled. That’s the task that we need to look at moving forward,” he added.

The Meralco official went on to say that they should also look at the bylaws of the league and if necessary make the needed reforms so as to have the league stand on firmer footing and avoid conflicts within the organization in the future.

Recently the PBA Board of Governors was embroiled in an impasse over the standing of erstwhile league commissioner Chito Narvasa.

Just after the culmination of Season 42, seven teams, namely TNT KaTropa, Alaska Aces, Blackwater Elite, Meralco, NLEX Road Warriors, Rain or Shine Elasto Painters and Phoenix Petroleum Fuel Masters, citing “loss of confidence” over “questionable” decisions of Mr. Narvasa, including giving the go-ahead to the deal that sent the number one pick in the recent rookie draft from the Kia Picanto to the powerhouse San Miguel Beermen which turned to be big man Christian Standhardinger, called for his outright resignation.

Five teams — San Miguel, Barangay Ginebra, Magnolia Hotshots, Kia and GlobalPort Batang Pier — meanwhile, batted for Mr. Narvasa’s retention until due process had been done.

Mr. Narvasa has since stepped down and the PBA is set to come up with a search committee tasked to look for the next commissioner.

Right now officer-in-charge of the league is media bureau chief Willie Marcial.

“It was really difficult,” said Mr. Panlilio of the impasse the board was in.

“The group was really divided; views were different. But the thing is we never gave up. We wanted it to work out for the fans and our stakeholders and we needed to resolve it,” he added.

Mr. Panlilio further said that the board is now united albeit some healing needs to be done.

“We are now united but, of course, some healing needs to happen. And it already has begun. Like in any family there are misunderstandings and we need to work it out because we are better off as a group,” he said.

Season 43 of the PBA started on Dec. 17 and is to resume on Sunday, Jan. 7, after taking a week-long break for the New Year celebration.

Quarter of land will be drier under 2°C warming

MORE THAN a quarter of Earth’s land surface will become “significantly” drier even if humanity manages to limit global warming to two degrees Celsius, the goal espoused in the Paris Agreement, scientists said on Monday.

But if we contain average warming to 1.5°C (2.7 degrees Fahrenheit), this will be limited to about a tenth — sparing two-thirds of the land projected to parch under 2°C, they concluded in a study published in Nature Climate Change.

At 1.5°C, parts of southern Europe, southern Africa, central America, coastal Australia and Southeast Asia — areas home to more than a fifth of humanity — “would avoid significant aridification” predicted under 2°C, said study coauthor Su-Jong Jeong of the Southern University of Science and Technology in Shenzhen, China.

“Accomplishing 1.5°C would be a meaningful action for reducing the likelihood of aridification and related impacts,” he told AFP.

Jeong and a team used projections from several climate models, under different warming scenarios, to predict land drying patterns.

Aridification is a major threat, hastening land degradation and desertification, and the loss of plants and trees crucial for absorbing Earth-warming carbon dioxide.

It also boosts droughts and wildfires, and affects water quality for farming and drinking.

The team found that at 2°C, which could arrive any time between 2052 and 2070, between 24% and 32% of the total land surface will become drier.

This includes land in all five climate categories today — hyper-arid, arid, semi-arid, dry sub-humid, and humid.

But at 1.5°C — the lower, aspirational limit also written into the climate-rescue Paris Agreement — this is reduced to between 8% and 10%, said Jeong.

Under the pact, signed in the French capital in 2015, countries have filed pledges for reducing climate-altering greenhouse gas emissions from burning coal, oil and natural gas.

But these goals place the planet on track for warming of more than 3°C, which scientists warn will lead to life- and asset-threatening superstorms, sea-level rise, floods and drought.

“Because present mitigation policies do not appear to be sufficient to achieve the 1.5°C temperature goal, more efforts to mitigate global warming are therefore urgently needed to reduce the spread of aridification,” the study authors said. — AFP

1...11,71211,71311,714...12,730Page 11,713 of 12,730
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube