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Cash-rich banks don’t view ODA as competition for funding projects

BY  MELISSA LUZ T. LOPEZ

THE DUTERTE GOVERNMENT’S P8-trillion infrastructure spending plan was what local lenders were waiting for.

When it was announced in April, it created a stir in the industry for obvious reasons.

By helping lend money to big-ticket projects, local banks would be able to deploy cash and earn more from loans, instead of just placing them in low-yielding instruments.

Over the past year, the Philippines’ money supply has been posting double-digit increases, thanks to rising deposits and banks’ bigger capitalization. As a result, amounts that were available for corporate and retail lending have also grown.

But this expansion drove borrowing rates lower, prompting the central bank to step in by capturing excess funds just to bring rates closer to its benchmark.

With the government’s “Build, Build, Build” initiative, banks would have the opportunity to cash in on the infrastructure boom while also fulfilling a sense of duty to help upgrade the country’s roads and bridges.

THINGS CHANGED A MONTH LATER

What would have been a golden era for bank lending took a sudden turn when economic managers bared that the so-called DuterteNomics plan covering 2017-2022 meant a shift away from the public-private partnership (PPP) mode towards grant-funded and state-sponsored projects.

National Economic and Development Authority (NEDA) Undersecretary Rolando G. Tungpalan said in May that two-thirds of the projects will be wholly supported by government funds, with the remainder to be supported by other modes of financing. Some 18% will rely on PPP arrangements, while 15% will depend on official development assistance (ODA).

“The thing about the PPP program is because it was private-public, there was significant opportunity for banks to lend to the private side of PPPs… Now, we noticed a shift to ODA financing, which is really a government-to-government type, and that potentially could reduce the opportunity for banks to lend directly to these projects,” Cezar P. Consing, president and chief executive officer (CEO) at the Bank of the Philippine Islands (BPI), said in an interview. “However, I will say that the infrastructure needs of the country are so great that there’s probably room for both approaches.”

For this year alone, the government wants to spend as much as P847.2 billion for public infrastructure, accounting for 5.3% of gross domestic product (GDP). By next year, it is looking to spend over P1 trillion on projects nationwide, with the amounts expected to rise annually and peak at a share of 7.3% of GDP by 2022.

In defending the shift to ODA, Socioeconomic Planning Secretary Ernesto M. Pernia said the government simply wants faster and more efficient results, given that the Aquino administration’s PPP program saw but four projects completed within his six-year term against 53 on the pipeline.

Lined up under the DuterteNomics program are the P255-billion North line of the Philippine National Railways to be funded by ODA from Japan, eyed to link Metro Manila to Clark, Pampanga in 55 minutes; while funding for the P285-billion South line — which will connect Manila to Bicol — will be sourced from the Chinese government.

A man works on a government project, a 300-meter flyover that will connect two main expressways in Manila. / NOEL CELIS / AFP

The first phase of the Mindanao Railway that was planned to start by the fourth quarter will also be supported by a grant from Beijing, with the Tagum-Davao City-Digos segment seen to cost about P31.544 billion.

But will the new route taken towards the so-called “golden age of infrastructure” leave banks out in the cold?

Despite the shakeup in project financing options, Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla, Jr. said the lenders will not run out of chances to cash in on infrastructure opportunities. These are so huge that it’s beyond what the banking system can support by itself.

With wider project selection, there’s more than enough to go around as far as banks are concerned.

“There might be friction, but if we look at it more holistically and with a more long-term view, you’ll realize there’s really room for both,” Mr. Consing said, noting that the goal was to get the construction plans up and running.

Instead, the opportunity lies on what he calls the “second- and third-order benefits” drawn from getting more roads and transport systems, such as new business hubs which would need fresh funding as they sprout — new malls, offices, restaurants, housing sites, among others.

Developers are quick to put together townships, placing office buildings and condominiums around train terminals as communities rise with the new transport routes.

Colliers International cited Fairview; San Jose del Monte, Bulacan; Novaliches; and Commonwealth Avenue in Quezon City as good sites for development, especially with the construction of the Metro Rail Transit Line 7 in the works.

Outside the capital, the provinces of La Union, Pangasinan, Tarlac, Batangas, Naga, Iloilo, Bacolod, Cebu, Davao, and Cagayan de Oro are also seen as strategic locations for budding townships with blueprints for more link roads and local railways in sight.

Besides construction companies, the household sector, wholesale and retail trade, and food production are among those expected to benefit from higher infrastructure spending, the NEDA said.

For his part, Security Bank Corp. President and CEO Alfonso L. Salcedo, Jr. said that lenders can take part in the infrastructure story by lending to domestic contractors and suppliers, who would need to tap fresh funds for its working capital.

“As they participate in infrastructure development, their business with banks will also expand,” he said.

But this is not to say that Security Bank has limited resources to support government spending by way of lending to build more roads, bridges, and trains.

Currently, the Philippines’ fifth-largest bank in terms of assets boasts of fresh capital, giving it the capacity to lend more to conglomerates involved in big-ticket projects despite the 25% single borrower’s limit (SBL) imposed by the central bank.

“We are well-positioned to support the financing requirement of our large corporate customers because we have a higher SBL for our corporate customers as a result of the P37-billion capital investment by MUFG (Mitsubishi UFJ Financial Group) in Security Bank last year,” Mr. Salcedo said. The lender can also leverage on the expertise of its Japanese partner in terms of project finance, the executive added.

Both BPI and Security Bank see the construction boom as a net plus for the local economy, noting that the ODA financing track should not be viewed as competition.

Melissa Luz T. Lopez is a senior reporter of BusinessWorld. She covers the Bangko Sentral ng Pilipinas and the banking sector.

Inflation steadies in December

By Jochebed B. Gonzales, Senior Researcher

THE GENERAL INCREASE in prices of widely used goods and services sustained its pace in December from the preceding month, the government reported on Friday, even as core inflation eased to a four-month low.

Preliminary data from the Philippine Statistics Authority showed that the consumer price index (CPI) rose 3.3% year on year last month, unchanged from November, but faster than December 2016’s 2.6%.

December headline inflation matched the median in an analyst poll BusinessWorld conducted late last week and hovered around the midpoint of the Bangko Sentral ng Pilipinas’ (BSP) own 2.9-3.6% estimate.

For the entire 2017, inflation averaged at 3.2%, well within BSP’s 2-4% target band, at the same time, matching the central bank’s full-year forecast.

“Inflation in December 2017 was due to faster increases in food prices (corn, meat, fish, fruits, cereals), but tempered by lower non-food inflation (transport, housing, water, electricity, gas and other fuels),” the National Economic and Development Authority (NEDA) said in a separate statement.

OUTLOOK
BSP Governor Nestor A. Espenilla, Jr. said in a statement that inflation should likewise settle above above three percent until next year, but would still be manageable.

“The BSP expects inflation to remain manageable over the policy horizon as 2017 inflation settled within the National Government’s 3.0 percent ± 1.0 percentage point target range,” Mr. Espenilla said in a statement, even as he said that “inflation is projected to settle above the midpoint of the target range for 2018 to 2019”.

“Robust domestic economic activity, ample liquidity, and well-anchored inflation expectations continue to support within-target inflation,” he added.

“Looking ahead, the BSP will remain vigilant against any risks to the inflation outlook to ensure that the monetary policy stance remains consistent with the mandate of maintaining price stability conducive to economic growth.”

Socioeconomic Planning Secretary Ernesto M. Pernia said in the NEDA statement that the agency sees “inflation over the near-term to remain stable despite pressures that may be brought about by the newly enacted TRAIN (Tax Reform for Acceleration and Inclusion) program, weather patterns, and uncertainties in international oil markets”.

NEDA added that it expects steady supply of key agricultural commodities “within the near term”, with the crop outlook — according to the Philippine Statistics Authority as of October 2017 — showing increases in harvest areas across regions mainly due to sufficient water supply and continued government provision of fertilizer and high-yielding seeds.

Mr. Pernia said “any increases in prices in the first few months of 2018 will be tempered by the expected decline in power rates as capacity fees from power generators fell due to fewer power outages”.

SEGMENTS
The food and non-alcoholic beverages index, which account for nearly 40% of CPI, rose 3.5%, while the index of housing, water, electricity, gas and other fuels, which made up more than a fifth, was up by 3.8%.

Comprising 12% of the CPI basket, the index of restaurant and miscellaneous goods and services sub-group climbed by 3.0%.

Prices of alcoholic beverages and tobacco products grew increased by 6.4%.

“[F]aster price increases in food and beverages in December can be attributed to strong demand amid the holiday season as well as occurrence of typhoon ‘Vinta’ and tropical storm ‘Urduja’ disrupted supply of certain food items,” said Angelo B. Taningco, economist at Security Bank Corp.

“Also, the holiday season may have likely spurred demand for ‘sin’ products and prices in restaurant and other services, thereby raising their price inflation,” he added.

“The increase in global oil prices last month was also instrumental in the price hikes in fuels and utilities.”

Price increases were also observed on all other sub-indices namely: transport (2.4%), education (2.2%), furnishing, household equipment and routine maintenance of the house (1.9%), health (2.2%), clothing and footwear (1.8%), communication (0.4%) as well as recreation and culture (1.5%).

Holiday spending was also the main driver of December’s inflation according to Union Bank of the Philippines (UnionBank) chief economist Ruben Carlo O. Asuncion, even as he clarified that price upticks for the so-called “sin” commodities “might have been prompted by the anticipated tax increase particularly levied on tobacco products.”

SLOWING CORE
Core inflation, which is used in determining underlying price trends by stripping out volatile prices of food and fuel, stood at 3.0% in December, easing from 3.3% the preceding month.

It was also slower than the 3.3% and 3.2% clocked in September and October, respectively.

But for the entire 2017, core inflation averaged 2.9% compared to 2016’s 1.9%.

Economists interviewed held varying views on last month’s core inflation, but nonetheless suggested a more stable outlook on prices.

Security Bank’s Mr. Taningco attributed the slowdown to the transport sub-index whose price increase moderated to 2.4% last month from 4.4% in November.

Chidu Narayanan, Asia economist at Standard Chartered Bank, meanwhile, pointed to prices in housing. “Housing inflation dropped to a four-month low of 3.8% year on year, also driving core inflation down in December, after the rise in the past two months,” Mr. Narayanan said.

Land Bank of the Philippines (LandBank) market economist Guian Angelo S. Dumalagan, on the other hand, said: “The drop in core inflation might be attributed to the unexpected appreciation of the peso in December versus November. The decline in core inflation gives the BSP room to keep interest rates steady for now.”

UnionBank’s Mr. Asuncion agreed, saying the slowdown “indicates a more stable level of prices in the economy.”

“So, in this particular case, the BSP has basis to say that inflation will stay within their target of 2-4% at least in 2018,” added Mr. Asuncion.

STILL MANAGEABLE
For UnionBank’s Mr. Asuncion, “[T]he impact of the tax reform on inflation will be defined but largely minimal.”

“I see the BSP taking note of the impact of tax reform on inflation but the BSP will be largely prompted by the pace of the normalization of monetary policy in the US to temper the level of prices that can hamper further economic growth in the long-term.”

Landbank’s Mr. Dumalagan said “implementation of the tax reform coupled with the rise in government spending could potentially push inflation slightly higher, perhaps to 3.5% in the near term.”

“The BSP might keep its policy settings steady in the first semester, but it will be closely monitoring price dynamics as a result of the recently passed TRAIN law.”

Security Bank’s Mr. Taningco, on the other hand, sees a 25-basis point hike in key interest rates this year due to higher inflation risk. “I expect the BSP to closely monitor price developments and to adjust its monetary policy settings if the increase in inflation will make its inflation target unattainable,” he said.

Factory output likely fell further in November — Moody’s Analytics

VOLUME of factory output, as measured by the government’s Monthly Integrated Survey of Selected Industries (MISSI), likely decreased annually for a second straight month and by a bigger degree in November last year, Moody’s Analytics said in its Asia Pacific Economic Preview e-mailed to journalists on Friday, even as it clarified that the drop was due largely to a high base in 2016.

The comment comes amid assessment by IHS Markit for Nikkei, Inc. that improvement of Philippine manufacturers’ operating conditions bested those of peers in Southeast Asia in 2016’s last three months.

“We expect industrial production fell seven percent y/y in November after a 6.6% drop in the prior month,” Moody’s Analytics said, noting that “[i]ndustrial production growth has been in a downturn since the start of 2017.”

“Much of that reflects the high base from a year earlier, when activity was ramping up during the presidential election year.”

Moody’s Analytics’ projection also compares to a 15.1% surge recorded in November last year.

In its own assessment, IHS Markit said the seasonally adjusted Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) picked up to 54.8 in November from October’s 53.7, signaling “further improvement in business conditions” amid production expansion and new orders.

A PMI reading above 50 suggests improvement in business conditions compared to the previous month, while a score below that signals deterioration.

November’s reading, IHS Markit had said in its Dec. 2 report, was “the highest” for the year.

December, IHS Markit said in a Jan. 2 report, saw the Philippines’ PMI slip to 54.2 that nevertheless reflected “solid increase” from November and topped Southeast Asia’s 49.9 average for the same month. While Philippine output and new orders both grew at slower rates in December compared to November, growth remained marked and above 2017 averages, IHS Markit had noted, adding that “[d]omestic demand stood out as a key driver for manufacturing activity as export growth remained subdued.”

In its note yesterday, Moody’s Analytics said base effects that have been weighing on MISSI data “will fade in 2018”.

“Meanwhile, we expect firm external demand and strong investment to support a moderate recovery of industrial production this year,” Moody’s Analytics said.

“Infrastructure development is likely to ramp up thanks to President Rodrigo (R.) Duterte’s infrastructure development program, and that should help the production of key inputs such as cement.”

Government starts work on 2019 budget

THE DEPARTMENT of Budget and Management (DBM) has directed government offices to draft their spending plans for next year, issuing the National Budget Call for 2019 under National Budget Memorandum No. 129, dated Jan. 3.

The 2019 budget will be based on macroeconomic assumptions set by the Development Budget Coordination Committee (DBCC) in its Dec. 22 meeting.

The DBCC programmed a P4.213-trillion national budget for next year, 11.83% more than this year’s P3.767 trillion.

It has capped next year’s budget deficit at P574.5 billion — equivalent to three percent of gross domestic product — 9.7% bigger than the P523.7-billion fiscal shortfall programmed for this year.

Revenues are projected at P3.134 trillion, 12.4% more than this year’s P2.789-trillion program, while disbursements on the other hand are programmed at P3.708 trillion, which is 11.92% more than this year’s P3.313 trillion.

The government assumes a 7-8% GDP growth until 2022, when President Rodrigo R. Duterte ends his six-year term, and an inflation rate of 2-4% in the same period.

The DBM said that the 2019 budget “will continue to reflect administration policies such as the President’s 0+10-Point Socio-Economic Agenda, the Philippine Development Plan and the priority programs and projects contained in the 2017-2022 Public Investment Program, and will incorporate the 2019-2021 Three-Year Rolling Infrastructure Program.”

Under next year’s proposed budget, departments and agencies can incur contractual obligations and disburse payments only for goods actually delivered and services rendered and inspected within the fiscal year, with an extended payment period of three months.

This requirement, Budget Secretary Benjamin E. Diokno said in a press release on Friday, “enforces the original intent of the appropriations law — for the budget, as it was planned and legislated — to be fully executed within the year”.

At the same time, regional and local government plans and budgets will be streamlined to ensure consistency with the priority programs and projects of the national government, the statement added.

The 2019 budget preparation calendar shows that the proposed spending plan will be presented to the President and the Cabinet for final adjustments on June 14 and will be submitted to the President on July 9 in time for submission to Congress when Mr. Duterte delivers his third state of the nation address on July 23. — Elijah Joseph C. Tubayan

Cuy appointed to DDB, Año as OIC to DILG

PRESIDENT Rodrigo R. Duterte has appointed former Department of Interior and Local Government (DILG) officer-in-charge Catalino S. Cuy as the new chairman of the Dangerous Drugs Board (DDB), and retired Armed Forces chief Eduardo M. Año as the new officer-in-charge of the DILG.

Mr. Cuy assumes the post formerly occupied by Dionisio R. Santiago and Benjamin P. Reyes, who were both relieved by Mr. Duterte for contradicting his view on the scope of the country’s drug problem.

Mr. Duterte took offense, in particular, with Mr. Santiago’s statement that the 10,000-bed rehabilitation center in Nueva Ecija was a mistake and a waste of money. The facility was built in 2016 through funding from Chinese real estate billionaire Huang Rulun.

The new DDB chief will have a brief term until July 4 this year, as shown by a copy of his appointment letter released to the media on Friday, Jan. 5.

Mr. Año, for his part, takes over the position of former interior secretary Ismael D. Sueno who was fired by Mr. Duterte in April last year due to corruption allegations. Being recently retired, however, Mr. Año cannot yet be given a full appointment.

The President signed the appointment papers of Messrs. Cuy and Año on Thursday, Jan. 4. — Arjay L. Balinbin

Duterte accepts son’s resignation as Davao vice-mayor

PRESIDENT Rodrigo R. Duterte “has already accepted this afternoon the resignation of Davao City Vice-Mayor Paolo (Z.) Duterte,” presidential spokesman Harry L. Roque, Jr. confirmed on Friday, Jan. 5.

The younger Mr. Duterte announced his resignation on Christmas Day before the Davao City Council, citing personal and other issues. His resignation follows some three months after he and brother-in-law Manases R. Carpio were implicated by opposition Senator Antonio F. Trillanes IV in a so-called Davao Group operating in smuggling and drug trafficking. Days after Mr. Duterte’s resignation, he and Mr. Carpio sued Mr. Trillanes in a Davao court.

In a letter to Mr. Duterte by Executive Secretary Salvador C. Medialdea dated Friday, Jan. 5, Mr. Medialdea said, “On behalf of President Rodrigo Roa Duterte, this is to inform you that your resignation is hereby accepted, effective immediately.”

Mr. Duterte’s sister, Davao Mayor Sara Z. Duterte, and Officer-in-Charge Catalino S. Cuy of the Interior Department were also furnished copies of Mr. Medialdea’s letter.

Grab files petition for 5% fare increase

GRAB Philippines (MyTAXI.PH, Inc.) has filed a petition for a 5% fare increase in response to the increase in excise taxes for fuel, among others, under the new tax reform program.

The ride-sharing company filed on Friday, Jan. 5, with the Land Transportation Franchising and Regulatory Board (LTFRB) a petition to increase its P10 to P14 per kilometer charge to P11 to P15 per kilometer, and increase its P2 per minute charge to P2.10 per minute, to compensate Grab drivers for impending price increases in fuel and spare parts from higher excise taxes.

“The content is 10 centavos increase per minute so the current cap on per minute is P2, so we’re asking P2.10. The current cap per kilometer is P10-P14, we’re asking for P11-P15 per kilometer. It’s only small, but the reason for doing this is because our drivers need to be able to take home enough pay for their livelihoods, with the TRAIN [Tax Reform for Acceleration and Inclusion] law and the implementation of the TRAIN law,” Grab Philippines communications head Leo Emmanuel Gonzales told reporters after the filing of the petition.

Mr. Gonzales said fares have not been adjusted since the imposition in December 2016 of fare caps on transport network companies (TNCs) by the LTFRB, while prices of commodities and demand for Grab services have increased.

“Since December 2016, the first time LTFRB put a cap on our fares, demand has increased as of December by 30%, just this December… You can imagine the increase of demand, and yet the fares have not yet been adjusted. Prices of commodities have also increased. We just feel that it’s just fair and right, this petition to slightly increase the fares. We hope through our petition the Board can see that what we’re asking is just right,” Mr. Gonzales told reporters.

On Wednesday, Grab Philippines country head Brian P. Cu announced the company’s plan to file a petition for a fare increase. Mr. Cu said that 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 faces a 5% rise in gas expenses and about a 2-3% increase in spare parts costs.

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

A spokesperson for ride-sharing company Uber Philippines (Uber Systems, Inc.) said that the company currently has no plans to increase fares.

“No plans at this time. But we will monitor impact on driver earnings,” Catherine Avelino, head of communications for Uber, said in a text message. — Patrizia Paola C. Marcelo

CA rules against Mary Jane Veloso’s deposition in case against alleged recruiters

THE Court of Appeals (CA) has reversed a resolution by a local court allowing the deposition of convicted drug trafficker Ms. Mary Jane F. Veloso against her alleged recruiters Ms. Maria Cristina P. Sergio and Mr. Julius L. Lacanilao.

Ms. Veloso is unable to personally testify in the illegal recruitment case against Ms. Sergio and Mr. Lacanilao because of her continued detention in Yogyakarta, Indonesia, where she was scheduled for execution in 2015 until a last-minute stay that year.

She was apprehended in Indonesia in April 2010 after she was found in possession of 2.6 kilograms or 2,600 grams of heroin in her luggage. Possession of drugs is penalized by death under Indonesian laws.

Judge Anarica J. Castillo-Reyes of Nueva Ecija Regional Trial Court (RTC) Branch 88, in a resolution dated Aug. 16, 2016, ordered the taking of Ms. Veloso’s testimonies in Indonesia, but this was challenged by Ms. Sergio and Mr. Lacanilao.

The CA, in a ruling on Jan. 4, Thursday, said “the circumstances in this case call for the application of Rule 119” of the Revised Rules of Criminal Procedure which “categorically states that the conditional examination of a prosecution witness (Ms. Velos, in this case) shall be made before the court where the case is pending.”

This is in recognition of the constitutional right of confrontation and cross-examination of Ms. Maria Cristina P. Sergio and Mr. Julius L. Lacanilao, the two accused in the illegal recruitment case filed by the parents of Ms. Veloso.

“The respondent Judge has committed grave abuse of discretion when it granted the Motion for Leave of Court to Take the Testimony of Complainant Mary Jane Veloso by Deposition Upon Written lnterrogatories,” said the CA decision penned by Associate Justice Ramon M. Bato, Jr. and concurred by Associate Justices Manuel M. Barrios and Renato C. Francisco.

“We are not unmindful of the gravity of the offenses charged against the petitioners. Likewise, We are not oblivious of the sad and unfortunate fate that befell Mary Jane,” the decision stated.

A lawyer of Ms. Veloso said the CA ruling is “both frustrating and ironic.”

“We are disappointed that the taking her material testimony is being prevented by our own courts, the Court of Appeals in particular, upon the motion of the accused illegal recruiters’ defense team,” lawyer Edre U. Olalia of the National Union of People’s Lawyers (NUPL) said in a press statement. NUPL stands as the private prosecutors and Philippine counsel for Ms. Veloso.

Mr. Olalia insisted that “no fundamental right is violated” should Ms. Veloso testify in writing as the “counsel will be present when her disposition is taken in Indonesia in the presence not only of the same Philippine judge hearing the case” and “other concerned judicial and consular officials of the Philippines and Indonesia.”

“Given the novelty of the legal situation involving two jurisdictions and her circumstances of being detained in a foreign land unable or disallowed to go home as yet, her deposition would shed light on the truth, the whole truth and nothing but the truth,” Mr. Olalia added. — Minde Nyl R. Dela Cruz

Globe holds 2018 capex budget steady at $850 million

GLOBE Telecom, Inc. has set aside a capital expenditure (capex) budget of $850 million (P42.37 billion) for 2018, unchanged from a year earlier, primarily to meet demand for bandwidth-intensive content.

In a statement, the telecommunications company said the capex budget was approved by its board.

Globe President and CEO Ernest L. Cu told reporters in October that the company may keep capex unchanged in 2018.

“Majority of the company’s capex for 2018 is geared to meet customer demand for more bandwidth-intensive content, which, in turn, will support the revenue momentum of our data-related services”, Mr. Cu said in the statement.

Mr. Cu said capital spending for the year is intended to finance the delivery of fast Internet service to two million homes by 2020.

Part of the capex will also be used for the deployment of multiple-input, multiple-output (MIMO) technology to expand and enhance its long-term evolution (LTE) network.

Globe began deployment of LTE sites using the 700 MHz band in June 2016, after the company and PLDT, Inc. teamed up to buy the telecommunications assets of San Miguel Corp. for P69.1 billion.

In 2017 Globe’s capex budget rose $100 million to finance expansion of its mobile data network.

Globe chief financial officer (CFO) Rizza Maniego-Eala told reporters in October that Globe could issue retail bonds in 2018.

Globe’s attributable profit in the first nine months of 2017 was P12.99 billion, up 11% year-on-year, following a 6% increase in revenue to a record P95.14 billion.

It registered a 7% increase in mobile revenue in the nine months to P73.1 billion, led by strong uptake of mobile data. Home broadband revenue grew 8% to P11.7 billion, driving the company’s customer base to 1.26 million subscribers by the end of September. — Patrizia Paola C. Marcelo

NEDA lists rice-growing areas expected to be competitive under tariff scheme

THE National Economic Development Authority (NEDA) said it expects 39 rice-growing areas to remain competitive on a cost basis when rice moves to a tariff system for imports when quantitative restrictions (QR) are lifted.

Citing a study by its Agriculture, Natural Resources and Environment Staff (ANRES), NEDA said in a statement that the competitive areas have a P4 per-kilo cost advantage over Thai and Vietnamese rice imports which will be levied a 35% tariff.

“Rice per kilogram in these areas will be P4 cheaper compared with Thai and Vietnamese rice. And these provinces can produce about 73% of the total food requirement of the country,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

The growing areas where production costs are deemed competitive are: Nueva Ecija, Kalinga, Pampanga, Bataan, Biliran, Bulacan, Zamboanga del Sur, Isabela, Bukidnon, Nueva Vizcaya, Laguna, Pangasinan, Lanao del Norte, Aurora, Compostela Valley, Albay, Leyte, Zamboanga Sibugay, Negros Occidental, South Cotabato, Camarines Sur, Zamboanga City, Sultan Kudarat, Sorsogon, Cavite, Palawan, Antique, Iloilo, Aklan, Surigao del Sur, Capiz, Masbate, Catanduanes, Eastern Samar, Northern Samar, Basilan, Western Samar, Guimaras, and Maguindanao.

NEDA said growing areas have the potential to increase their yields through increased use of hybrid seed and more advanced farm management practics.

NEDA also proposed upgrades to the irrigation system, further mechanization, increasing infrastructure connectivity and boosting farm credit to increase yields across the board.

ANRES also noted that seven provinces had yields better than the national average of 4 metric tons (MT) per hectare (ha.), though costs are higher. It did not list these areas.

Of the areas deemed competitive on cost, 14 had yields averaging 3.5 MT/ha., or below the national average. These are Palawan, Antique, Iloilo, Aklan, Surigao del Sur, Capiz, Masbate, Catanduanes, Eastern Samar, Northern Samar, Basilan, Samar, Guimaras, and Maguindanao.

The QR on rice imports is a special privilege granted by the World Trade Organization (WTO), which has been extended three times since it was first imposed in 1995. In April 2017, before the termination of the WTO Special Treatment on rice, President Rodrigo R. Duterte issued Executive Order No. 23 retaining the Minimum Access Value (MAV) level of 805,200 MT and extending the lower tariff rates imposed on some commodities for three years or until the Agricultural Tariffication Law is amended.

NEDA is pushing for the amendment of Republic Act No. 8178 or the Agricultural Tariffication Act of 1996 to pave the way for the removal of the QR on rice imports and the imposition of the 35% tariff rate instead.

“The revenue from the 35% tariff can be used to supplement available government funds to develop the agriculture sector and bring it at par with our ASEAN counterparts,” Mr. Pernia said.

CA affirms ruling against martial-law victims in claims against Marcos estate

THE Court of Appeals (CA) on Wednesday, Jan. 3, denied for lack of merit a motion for reconsideration filed by a coalition of victims of human rights violation during the martial-law regime of the late dictator Ferdinand E. Marcos.

The resolution penned by Associate Justice Normandie B. Pizarro and concurred by Associate Justices Samuel H. Gaerlan and Jhosep Y. Lopez read in part: “This Court finds no new or substantial matter that would warrant a reversal or modification of our July 7, 2017 decision affirming the assailed disposition.”

The group of martial-law victims, represented by Mses. Priscilla Mijares, Loreta Ann P. Rosales, Hilda B. Narciso Jr., and Mariani Dimaranan SFIC, and Mr. Joel C. Lamangan had earlier filed a petition calling for the recognition of the Class Action No. MDL 840 filed before the Hawaii District Court.

The Hawaiian Court ruled that the complainants should be given $2 billion worth compensation from the estate of the late Mr. Marcos.

The CA reiterated its previous ruling that “the categorization or classification of the claimants into three (3) subclasses is a tacit recognition that no common question of law and fact exists between/among the claimants,” and added that MDL 840 was “improperly lodged as a class suit.”

Likewise, the judgment of the Hawaii Court gave “no opportunity for the Marcos Estate to confront each and every claimant,” the CA stated.

The CA also noted that the ruling “was filed under the Alient Tort Statute (ATS), also called Alient Tort Claims Act (ATCA)” which based the decision upon a different law, “presumably the Torture Victim Protection Act.”

“This invalidates the disposition considering that a decision that does not conform to the form and substance required by the Constitution and the law is void and deemed legally nonexistent,” the CA decided. — Minde Nyl R. Dela Cruz

Grab seeks fare hike

RIDE-APP company Grab Philippines on Friday, Jan. 5, petitioned the Land Transportation Franchising and Regulatory Board (LTFRB) for a fare hike.

“The content is 10 centavos increase per minute so the current cap on per minute is P2, so we’re asking P2.10. The current cap per kilometer is P10-P14, we’re asking for P11-P15 per kilometer. It’s only small, but the reason for doing this is because our drivers need to be able to take home enough pay for their livelihoods, with the TRAIN law and the implementation of the TRAIN law. The increase of excise taxes in gasoline has this effect on TNVS transport. We will not ask this if not for the benefit of our drivers,” Grab Philippines (MyTAXI.PH, Inc.) Ph Public Affairs Head and Spokesperson Leo Gonzales told reporters.

“Since December 2016, the first time LTFRB put a cap on our fares, demand has increased as of December by 30%, just this December, eh that was last year pa. You can imagine the increase of demand, and yet the fares have not yet been adjusted. Price of commodities have also increased. We just feel that it’s just fair and right, this petition to slightly increase the fares. Hopefully, through our petition, the Board can see that what we’re asking is just right.”

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