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Lebanon wines bring villages back to life

BEIRUT — Lured by Lebanon’s wine making potential and nostalgia for his homeland, Maher Harb left a Paris consultancy job in 2010 and dug vines into the soil of family land unused since the country’s civil war.
Seven years later his Sept winery launched its first commercial vintage and is now looking to export as a number of European countries take an interest.
The 36-year-old is part of an expanding wine industry which is bringing life back to land abandoned during Lebanon’s 1975-90 civil war and waves of economic migration. It is also bringing Lebanese — and their money — back home.
“Giving up a career in Europe… is very hard; it is all because of how much we love this land and how much Lebanon deserves this,” said Harb, speaking in the hills above the coastal town of Batroun.
And as Lebanon wrestles with stagnant economic growth, heavy debts and political inertia, the industry’s success could serve as a model for other sectors looking to export.
Lebanon, where wine making dates back to the ancient Phoenicians, lies further south than most northern hemisphere wine-producing nations. But the mountains that rise up from its hot, humid Mediterranean coast provide the cooler, drier altitudes grapes need.
Since Lebanon’s civil war ended, a handful of wineries has expanded to around 45 commercial enterprises and a number of small-scale producers.
Global interest in Lebanon’s wines is growing, but output is low — a mere 8-9 million bottles annually compared to 5-6 billion bottles from the world’s largest producer Italy — and production costs are high.
So producers are striving to create a distinct, marketable identity for Lebanese wine based on quality, not quantity.
“Lebanese wine is already good quality, but it still lacks uniqueness,” said Harb.
“STORY TO TELL”
Producers are seeking that identity in the diversity of Lebanon’s terrain, creating wines which carry the unique taste of the small patch of soil and air in which the grape is grown.
“If you want to be competitive you have to have a signature and to show some form of your tradition… You cannot impress a guy who had the best wines on the planet with another Chardonnay,” said Eid Azar, a US-trained doctor and co-founder of Vertical 33, which grows grapes across the Bekaa valley and sold its first commercial wine in 2017.
“Each winery should have a story to tell,” he said from his tasting room in a hip Beirut street, next to a wall display of soil samples and grape names.
The wine industry’s success means the agriculture ministry wants it to be a model for improving the olive oil and arak sectors. Arak is a traditional aniseed-flavored liquor.
Producers are also looking to indigenous grapes for a Lebanese identity, moving away from imported, well-known French vines.
“People used to ask me: You in Lebanon have been making wine for more than 4,000 years, why do you use foreign grapes?” said Joe Assaad Touma of family run Chateau St. Thomas in the Bekaa, which is celebrating 20 years of wine-making.
Touma’s family had been making arak from local Obeidy grapes for 130 years and proved through genetic testing it was indeed indigenous.
Chateau St. Thomas made its first all-Obeidy wine in 2012. Both Sept and Vertical 33 also market an all-Obeidy wine.
IMPACT
Although the industry’s size is estimated by Lebanon’s wine production association UVL to be only around $500 million a year, the local impact of new wineries can be transformative in a country with poor regional development and job prospects.
Almost 20 years ago Naji Boutros gave up a finance career in New York and London and returned to his birth village of Bhamdoun to raise his family and grow wine. The village, a former summer tourism hot spot near the capital Beirut, had been decimated in the war which drove him and many others abroad.
“When we returned to Bhamdoun there was nobody here,” said Boutros. “The school used to have 30 students and now it has above 200, the town is full.”
He started with three plots of inherited land. Other expatriates began offering their unused land for planting and the Chateau Belle-Vue winery, restaurant and guesthouse developed, bringing life back to the hills and attracting tourists.
Although Lebanon’s wine industry often uses cheap Syrian laborers for harvesting, the workers picking grapes in the cool September dawn air were all local.
“We are proud… that the sons of Bhamdoun are on their land,” said Boutros. — Reuters

Espenilla gets B+ in central banker report card

Nestor A. Espenilla, Jr.
Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla, Jr.

BANGKO SENTRAL ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. got the third-highest rating for his first year as central bank chief, with the Global Finance magazine touting sustained economic growth while noting the weaker peso and a wider trade gap as setbacks.
Mr. Espenilla received a “B+” grade from the New York-based publication. Global Finance releases an annual report card for central bankers, with the 2018 scores printed in their October edition.
This is the first time the magazine graded Mr. Espenilla after he assumed the post in July 2017, with the publication saying it was “too early to tell” during the previous year’s grading period. Prior to this, Mr. Espenilla was deputy governor for the Supervision and Examination Sector in charge of regulating banks and financial firms.
Global Finance covers 89 central bank governors around the world, with the highest rating of “A” given to the best-performing monetary authorities with “F” marking the lowest. They are judged based on their hand on inflation control, economic growth, currency stability and interest-rate management, as well as their ability to “protect independence” amid political pressure as well as financial supervision.
In grading Mr. Espenilla, Global Finance took stock of the BSP’s two tightening moves in May and June worth 25 basis points (bp) each.
“The BSP said its actions were designed to safeguard macroeconomic stability in an environment of rising commodity prices and ongoing normalization of monetary policy in advanced economies,” the magazine said.
The central bank kicked off a series of rate hikes earlier this year in the face of surging inflation, which has been picking up since the year opened. The BSP’s Monetary Board has raised benchmark rates by a total of 150 bps as of their September meeting in a bid to arrest elevated inflation expectations, even as price drivers are largely “supply-driven” amid surging oil prices; thin stocks of rice, vegetables and meat; plus the impact of the government’s tax reform program.
Inflation has since worsened to a nine-year high of 6.7% in September, with the current tally averaging five percent versus the 2-4% central bank target.
Still, Global Finance saw that growth prospects remain upbeat, but flagged key weaknesses for the Philippine economy.
“The Philippine economy grew at an annual rate of 6.8% in the first quarter of 2018, close to the target growth rate of 7% to 8% for the year,” the report card read. “Employment and wages are rising, but the Philippine peso slumped to a 12-year low as government spending on infrastructure drew in imports, widening the current account deficit.”
First-quarter growth has been revised to 6.6% while second-quarter expansion clocked in slower at six percent, which brought the first-half tally at 6.3%.
The peso has been trading near a 13-year low above P54 versus the dollar, while the current account has widened to a $3.1 billion deficit as of end-June from a $133-million gap during the same period last year.
Mr. Espenilla’s first year in office saw a 200bp reduction in bank reserves, a move meant to reduce the cost of money and seen to help deepen the local debt markets. He has also set sights on increased use of financial technology to bring more cash-based transactions into digital platforms for cheaper and easier access to money.
Mr. Espenilla is currently on a month-long medical leave for treatment. He was diagnosed with early-stage tongue cancer in November 2017.
Eleven central bankers were graded “A” by Global Finance, namely the governors in Australia, Chile, the European Union, Israel, Kuwait, Lebanon, Morocco, Paraguay, Russia and South Korea.
Former BSP Governor Amando M. Tetangco, Jr., who held the post for two terms from 2005 to 2017, received the top “A” grade from Global Finance for eight of his 12-year stint. — Melissa Luz T. Lopez

House approves new franchise for Jacinto’s network

THE House of Representatives passed on third and final reading the bill renewing the franchise granted to Rajah Broadcasting Network, Inc. (RBN), owned by businessman and presidential adviser Ramon “RJ” P. Jacinto.
House Bill 8177, which extended the franchise of Mr. Jacinto’s broadcasting network by another 25 years, received 202 affirmative votes and no negative votes.
Mr. Jacinto is currently the presidential adviser for economic affairs and information technology communications.
Aside from RBN, other companies under the RJ Group include RJ Guitar Center, Jacinto Color Steel, RJ Productions, RJ Bistro, RJ TV, RJ Academy of Music, RJ Recording and RJ Recording Studios.
RBN’s flagship radio station is RJ100.3 FM, which operates ten stations in key cities. The RBN also broadcasts through its AM radio station, DZRJ 810 AM Radyo Bandido.
House Bill 8177, if signed into law, will allow RBN to “continue its effective public through commercial FM and AM radio and television broadcasting in the Philippines” for the next 25 years, which may be revoked upon failure to operate continuously for 2 years.
The bill also mandates the RBN to also provide adequate public service time with a maximum of 10% of paid commercial time.
In compliance with the Constitutional provision, promoting public participation in public utilities, the RBN shall offer to the Filipino citizens at least 30% of its outstanding capital stock within five years from commencement of operations.
The network shall also be required to create employment opportunities and provide on-the-job training and to submit an annual report to Congress on or before April 30 of the following year.
Failure to provide the annual report will subject the grantee to a fine of P500 per working day of non-compliance. — Charmaine A. Tadalan

FDA to use mClinica app to monitor prescriptions

MCLINICA PTE. LTD. has developed a mobile app called Electronic Drug Safety System (eDSS) seen to aid in the modernization and innovation of the Philippine healthcare system.
In a statement, mClinica said the mobile app — a donation to the Food and Drug Administration of the Philippines (FDA) — will help the agency monitor dangerous medicines and counterfeits and collect prescription information digitally.
The mobile app allows pharmacists to take a photo of the prescription and enter related information, which is more efficient compared to the old process that requires them to write down all the information in logbooks as required by the 1969 Philippine Pharmacy Act.
The data gathered can give information on what medicines are in demand which could alert authorities to outbreaks, analyze treatment patterns and provide supply information.
“Paper logbooks were used for long enough — it’s time to modernize and innovate. That’s exactly what the eDSS does. Not only does it cut bureaucracy, but the eDSS mobile app is going to help millions of Filipino patients each time medicine is purchased,” FDA Director General Nela Charade G. Puno was quoted as saying in the statement.
“The data generated from the eDSS creates a national pharmacy information system that helps the FDA allocate resources efficiently as well as protect patients. The data will help us find counterfeits and recall dangerous or ineffective medicines instantly,” Ms. Puno said.
Use of the eDSS will start in Manila, Cebu, and Davao this year, and is expected to be fully implemented by 2020. Rural areas with limited Internet access are exempted in the implementation.
FDA inspectors from Visayas and Mindanao were oriented on the use of the app last Sept. 25. By the end of October, all inspectors are expected to be ready to implement the eDSS.
mClinica is a social enterprise catering to pharmaceutical companies, pharmacies, governments and non-government organizations. It mainly develops mobile platforms such as SwipeRX, SnapRX and Connect for use by these entities. — V.M.P. Galang

How PSEi member stocks performed — October 10, 2018

Here’s a quick glance at how PSEi stocks fared on Wednesday, October 10, 2018.

 
Philippine Stock Exchange’s most active stocks by value turnover — October 10, 2018

Self-rated poverty worsens in Q3 amid inflation pressures

SOCIAL WEATHER STATIONS (SWS), a polling organization, said Tuesday that more than 12.2 million families self-rated themselves as poor, equivalent to 52% of respondents in a study conducted at the end of September, up from 48% a quarter earlier.
According to the Third Quarter 2018 Social Weather Survey, respondents who declared themselves poor was “the second consecutive increase in Self-Rated Poverty (SRP) in 2018. Since the 42% recorded in March 2018, Self-Rated Poverty has increased by 10 points in total.”
SWS also reported that the September 2018 self-rated poverty rate was the highest since December 2014, where the level was also 52%.
SWS said that of the 52% self-rated poor families, “8% used to be non-poor 1-4 years ago (“newly poor”), and 6% used to be non-poor five or more years ago (“usually poor”). The remaining 39%, or about three out of four poor families, have never experienced being non-poor (“always poor”).”
SWS reported that the rise to 52% was attributed to the “sharp increases in Balance Luzon and Mindanao, offset by a sharp decrease in Metro Manila and an unchanged proportion in the Visayas.”
For Balance Luzon, SRP rose 12 percentage points to 47% in the September quarter from 35% in the June quarter. In Mindanao, there was also an increase in SRP of 5 percentage points to 65% from 60% previously. Visayas remained unchanged at 67% in both periods.
On the other hand, SRP declined by 17 points in Metro Manila to 26% in the September quarter from 43% in the June survey, with SWS calling it “a new record low for Metro Manila, overtaking the previous record low of 28% recorded in December 2000, June 2017, and December 2017.”
The survey also showed that among the 48% self-rated non-poor families, 10% used to be poor less than four years ago or are “newly non-poor” while 13% were formerly poor more than five years ago or are “usually non-poor.” On the other hand, 25% consider themselves “always non-poor.”
SWS said that the median Self-Rated Poverty Threshold (SRPT)is monthly income of P10,000, which is the minimum a family needs in order to pay for its expenses and not consider itself as poor. In the September survey, the Self-Rated Poverty Gap was P5,000, meaning this is the amount families lack in order to pay for their needs.
The September median SRPT for Metro Manila and Balance Luzon was P15,000 but for Mindanao and Visayas, it was P10,000.
Meanwhile, Self-Rated Food Poverty rose during the September study to 8.5 million families.
“The September 2018 survey also found 36% (est. 8.5 million) of families rating their food as Mahirap or Poor, termed by SWS as Food-Poor. This is 2 points above the 34% (est. 7.8 million) in June 2018,” SWS said.
The median Self-Rated Food Poverty Threshold (SRFPT), or the minimum monthly budget a family needs in food expenses, in Metro Manila is P7,250. For Balance Luzon, the SRFPT is P6,000 while it is at P5,000 for both the Visayas and Mindanao.
SWS added that the median Self-Rated Food Poverty Gap (SRFPG) or how much families lack to cover their food expenses is P3,000 in Metro Manila, Balance Luzon, and Mindanao. For the Visayas it is P2,500.
The non-commissioned survey had 1,500 participants nationwide and was conducted on Sept. 15-23.
In a statement, the Office of the Presidential Spokesperson said it is concerned over the results of the SWS survey, adding that the September Inflation Rate of 6.7% as reported by the Philippines Statistics Authority (PSA) is one of the factors behind the study’s findings.
“Government has thus implemented measures to cushion the impact of inflation and bring food on the table of poor families,” it added.
Federation of Free Workers (FFW) Assistant Vice-President Julius H. Cainglet concurred about inflation affecting the perception of poverty, saying in a message to reporters: “I think the survey is reflective of the actual conditions we find ourselves into, particularly as a direct effect of the rising inflation and the TRAIN Law.” He was referring to the tax reform law that took effect at the start of the year, which is known as Tax Reform for Acceleration and Inclusion (TRAIN).
Associated Labor Unions — Trade Union Congress of the Philippines (TUCP) Spokesperson Alan A. Tanjusay also said in a message to reporters: “The self-rated poverty result is a strong message that the sweeping worsening poverty is expanding from the indigents, the unemployed, the underemployed, the informal economy workers, the minimum wage earners, and towards the middle-income families.” — Gillian M. Cortez

Rice tariff scheme remains goal despite ‘surprise’ order to import more freely

PRESIDENT Rodrigo R. Duterte’s order for the “unimpeded” importation of rice has caught economic agencies off guard, though they pointed to the ultimate goal remains a rice tariff accompanied by freer inbound movement of the commodity.
National Food Authority (NFA) Director Angel G. Imperial, Jr., the agency’s spokesman, said he was “surprised” by Mr. Duterte’s directive.
“We were really surprised… that is why we did not know what to say yesterday,” Mr. Imperial told BusinessWorld in Filipino in a chance interview at the Palace on Wednesday after his economic briefing with Finance Assistant Secretary Antonio Joselito G. Lambino II and Trade Undersecretary for Consumer Protection Ruth B. Castelo.
During the briefing, Mr. Imperial said the President’s directive is not currently possible to implement because of the need to “submit it to the (NFA) Council so that we would have clear guidelines to follow.”
“Our principal, the Council, will still clarify this, at least with the chairperson of the Council, Secretary (Emmanuel F.) Piñol,” he added.
For his part, Mr. Lambino said: “The directive was issued Monday night. We are less than two days from that time. So we are, of course, happy that there is a massive streamlining that is underway. But what we want to get to is a tariffied regime.”
He added: “For that, we should be watching very closely and support, as much as we can, the movement in the Senate of the Rice Tariffication Bill. It is in amendment phase at the Senate, which means it’s in plenary then needs to go to bicam, before being signed into law.”
Mr. Imperial said, “We are managed by the (NFA) Council and all the things that we will be implementing should be approved by the Council so that there will be really clear guidelines to follow.”
The Department of Trade and Industry’s Ms. Castelo said: “Just a clarification on… the unimpeded importation of rice and vis-a-vis the NFA Council, NFA regulations on licensing and accreditation, it is the President’s directive and direction to make importation unimpeded, hassle-free, and with less restrictions; but currently, since we have the NFA regulations still in place while waiting for the Rice Tariffication Law, we still follow regulations although this is now less restrictive and easier for importers to bring in rice.”
“We’ll get to that destination as soon as we have the rice tariffication law. At the moment, we are still easing up the restrictions,” she added.
As for the timeline, Mr. Imperial said: “So far, I do not know. We will check.”
On Tuesday, Palace spokesperson Herminio L. Roque, Jr. announced that the President has ordered the unimpeded importation of rice in a bid to tame inflation.
Mr. Roque added that “the NFA no longer has any say on how much rice should be imported; anyone who can afford it and will pay tariffs will be allowed to import rice.”
“It’s a free market now for rice. No accreditation, no permits. Well, of course, they need to procure import permits, otherwise they might run into problems. But no one will have to approve the importation anymore, as long as they comply with the documentary requirements,” Mr. Roque said. — Arjay L. Balinbin

Failure to win PHL orders dampens Vietnam rice prices

PRICES of unmilled rice fell further in Vietnam after it failed to obtain a government-to-government order from the Philippines in the second half of May and increased China import tariffs in July, according to the United States Department of Agriculture.
According to the USDA’s Global Agricultural Information Network (GAIN), prices in Vietnam were propped up in the first five months of the year despite a bumper harvest due to high export demand, but began to fall in May with the harvest of the second crop.
According to the Vietnam Food Association, Vietnam exported 0.7 million metric tons of rice to the Philippines, and 1.1 million metric tons to China, which is Vietnam’s largest export market.
It said the price of unmilled rice, known in the trade as paddy, fell to 5,900 Vietnamese dong per kilogram in September from 6,500-6,600 dong in May.
The Philippines’ National Food Authority (NFA) allocated a total of P6.1 billion to procure 250,000 metric tons of rice. In April, the NFA rejected an offer from Vietnam of $540 per metric ton (MT) for a shipment of 50,000 MT of rice at a grade of 15% broken grains. A Thai offer of $530/MT for 120,000 metric tons of 25% brokens.
The reference price of NFA was $483.63 per metric ton for 15% brokens, and $474.18 for 25% brokens, which both countries failed to match.
The bid’s failure led to the decline in inventories of NFA rice, leaving consumers no choice but to buy from commercial dealers.
The NFA Council recently approved the importation of 750,000 MT of rice arriving in batches of 250,000 MT every two weeks.
At least 13 bidders from Thailand and Vietnam were present in the pre-bid meeting for the first batch of imports. Standby volume of 1 million MT has also been authorized for 2019, according to the NFA Council.
According to GAIN, paddy prices in Vietnam had been propped up by an expected increase in demand from the Philippines and Indonesia by the end of the market year 2017-2018.
The USDA estimates that China will remain the largest rice importing country, with shipments projected at 5.5 million MT in 2019. — Reicelene Joy N. Ignacio

DoF still hoping to get its way on mining royalty

THE DEPARTMENT of Finance (DoF) will continue to push for its version of a new fiscal regime for the mining industry as the legislation moves forward through Congress, an official said Wednesday.
The House ways and means committee approved on Monday a tax reform bill that diluted the DoF’s original proposal to make it more acceptable to the mining industry.
Assistant Secretary Ma. Teresa S. Habitan said that although the measure as approved creates a new stream of revenue, it is still lower than the original proposal.
“As far as happiness goes, there is some level of satisfaction that the issue of compensating the State as owner of the resource (in the form of royalty) is openly being discussed and considered,” she said in an e-mail yesterday.
“There used to be no royalties paid by mines outside mineral reservations. Will push (in the) Senate for DoF version… Revenues (are smaller) in the House version,” she added, but did not provide an initial estimate of the potential government revenues.
The House bill establishes a revenue-sharing scheme to compensate the state as the owner of the mineral resource.
It proposes that mining firms outside areas declared mineral reservations should pay a royalty equivalent to 1-5% of their profit margins on a sliding scale, as well as an additional tax on their windfall profits.
The royalty comes on top of the corporate income tax, excise tax, local business tax, and other levies paid to indigenous people, among others.
Currently, most mines in the Philippines operate outside mineral reservations and do not pay such a royalty. Those operating within pay a royalty of 5% on gross output.
The bill lowered the royalty payable by firms inside mineral reservations to 3%.
The DoF proposes to harmonize the fiscal regime for mining by imposing a uniform royalty of 5% of gross output.
“The DoF proposal submitted to the Senate is the same as what we submitted in the House. That provides another opportunity to debate the best way to be responsible stewards of natural resources,” she said in an e-mail.
Ways and means committee chair Estrellita B. Suansing defended the bill, saying that lowering the royalty for miners within mineral reservations was fair.
“The disparity is great of (miners inside reservations pay royalty based on) margins and those inside (reservations) based on gross output. We brought them closer, because it’s unfair. We will lose a lot and we already have existing revenue based on gross output,” she said in a phone interview yesterday.
“The rationale behind is the government already has investments in mineral reservations, and there is some certainty that there are minerals,” she added, as opposed to outside reservations, where discovery is less certain.
The Chamber of Mines of the Philippines has said that the DoF’s version would kill the mining industry, as it would come on top of the doubling of mineral excise taxes from 2% to 4% on gross output under the Tax Reform for Acceleration and Inclusion (TRAIN) law that took effect in January.
It said a royalty based on margins is “equitable.”
“The Chamber of Mines does not believe that any further taxes imposed on the industry are warranted… Nevertheless, given the pressure for further tax increases, the Chamber is of the opinion that a structure based on a profits-based royalty and a windfall profits tax as passed by the House Ways and Means Committee, with the rates thereon tied to operating margins, is the most equitable manner in achieving this,” Rocky G. Dimaculangan, the chamber’s vice-president for communications, said in a mobile phone message yesterday.
“The Chamber notes that a profits-based royalty is the same structure used in other mineral-rich countries such as Canada, Peru, Chile and South Africa. By adopting this, the structure will help sustain existing mining operations and hopefully encourage quality investments in the hugely untapped Philippine minerals sector,” he added.
The bill also seeks to deter miners from loading up on debt by disallowing the deduction of interest expense beyond certain indebtedness levels, with the threshold set at a 3:1 debt to equity ratio.
It also covers small-scale miners within and outside mineral reserves, who will be made to pay a royalty amounting to 1/10 of 1% of gross output.
The bill is now up for second reading at the House of Representatives. It forms part of a wide-ranging tax reform program that also seeks to overhaul the country’s corporate tax and incentives regime, streamline the property valuation system, harmonize taxes on financial products, raise “sin” taxes, and offer tax amnesty. — Elijah Joseph C. Tubayan

House not likely to pass 2019 Budget before recess

THE P3.757-TRILLION Budget Bill for 2019 is unlikely to hurdle the House of Representatives ahead of the Oct. 12 recess.
House Minority Leader Danilo E. Suarez of the third district of Quezon confirmed that House Bill 8169, or the Fiscal Year 2019 General Appropriations Bill (GAB), will not be taken up on third reading during Wednesday’s session, the last session day before Congress resumes on Nov. 12.
“No, not a chance,” Mr. Suarez said in a briefing Wednesday, when asked by reporters if the bill will be considered at the plenary.
Rep. Edcel C. Lagman of the first district of Albay said “it (budget) will not be taken up today.”
“This will be taken up after we come back from our Halloween break on the 2nd week of November,” Mr. Lagman told reporters.
Mr. Suarez and Mr. Lagman are both members of the Small Committee constituted to receive and resolve amendments from other lawmakers.
The Small Committee was created following the second-reading approval of the budget on Oct. 3 after 11 days of deliberation. The Committee had earlier set the deadline for proposed amendments on Oct. 9.
The panel also includes Majority Leader Rolando G. Andaya, Jr. of the first district of Camarines Sur, Maria Carmen S. Zamora of the first district of Compostela Valley, Federico S. Sandoval II of Malabon, Corazon N. Nuñez-Malanyaon of first district of Davao Oriental and COOP NATCCO Rep. Anthony M. Bravo.
Meanwhile, the Office of the Speaker in a statement said President Rodrigo R. Duterte on Tuesday night made a request to Speaker Gloria M. Arroyo to include in the budget housing projects for the police and the military, among others.
“President Duterte also requested Speaker Arroyo to include in the 2019 budget the funding for the housing projects for the members of the Armed Forces of the Philippines and Philippine National Police and the water system for the housing project for the victims of Yolanda,” the statement read.
In its last version, the education sector, infrastructure and local government had the biggest share of the budget.
Some P659.3 billion is allocated for the education sector; P555.7 billion for the Department of Public Works and Highways and P225.6 billion for the Department of Interior and Local Government. — Charmaine A. Tadalan

DoF denies China ODA was leverage for joint exploration

THE DEPARTMENT of Finance (DoF) said that Chinese loans and grants were not employed as leverage to arrive at a joint energy exploration agreement in the South China Sea.
The DoF disputed the claim after an online media outlet reported, without citing a source, that Chinese ambassador to the Philippines Zhao Jianhua hindered the delivery of official development assistance (ODA) to force the Philippines to agree to joint exploration.
“The topic of joint (oil) exploration was never raised in our discussions with our counterparts particularly during loan negotiations and processing of new loans, even during the bilateral meetings/high-level meetings with this office,” the DoF said in a statement on Wednesday.
“This is a grossly malicious claim without any basis. There is no link whatsoever between the Chinese loans and grants and the proposed joint oil exploration deal between the two countries,” it added.
The Chinese embassy has yet to reply to queries at deadline time.
The Finance department said that meetings both here and in China only involved negotiations on the funding for infrastructure projects under the government’s “Build, Build, Build” program, and that the delay was “mostly due to (the Philippine government’s) internal processes.”
“In fact, the proposed infrastructure projects we are undertaking with the cooperation of China all go through a very stringent process of approvals to ensure that they comply with the Government Procurement Act and other applicable laws,” the DoF said.
Foreign Affairs Secretary Alan Peter S. Cayetano said last week that he is “trying to rush” the framework for a 60-40 joint exploration between Manila and Beijing, in favor of the former.
Economic managers and their Chinese counterparts last met in August in Beijing, where they discussed an indicative list of 12 infrastructure projects proposed for feasibility study assistance. Both parties meet every quarter to firm up partnership agreements and streamline the process.
The Philippines has so far signed with China grant agreements supporting the Estrella-Pantaleon and Binondo-Intramuros bridges across Pasig river, the acquisition of radio and broadcasting equipment, the Philippine-Sino Center for Agricultural Technology-Technical Cooperation Program Phase 3, as well as feasibility studies for the Davao City Expressway Project and the Panay-Guimaras-Negros Island Bridge.
In terms of loan agreements, the Philippines and China have only signed one covering the P2.69-billion Chico River Pump Irrigation Project.
Chinese President Xi Jinping is expected to visit the Philippines next month to sign more loan deals, kicking off the start of project implementation.
Projects covered by the expected loan signings include the New Centennial Water Source-Kaliwa Dam project; financing for a project management consultant for the Philippine National Railways South Long-Haul project; and the Safe Philippines project, Phase 1, according to the DoF.
Other projects lined up for China funding include the Davao-Samal Bridge construction project, the Ambal-Simuay River and Rio Grande de Mindanao River Flood Control projects, the Pasig-Marikina River and Manggahan Floodway Bridges project, the Subic-Clark Railway, and the rehabilitation of the Agus-Pulangi hydroelectric power plants.
Mr. Duterte obtained $9-billion worth of ODA commitments from China in late 2016. — Elijah Joseph C. Tubayan

BPO night-pay bill may trigger demands from other workers

A BILL granting additional pay to Business Process Outsourcing (BPO) employees on the night shift might encourage workers in other industries to demand similar benefits, a wage regulator said.
The House Committee on Labor and Employment on Wednesday held initial deliberations on House Bill (HB) 2225 written by Rep. Zajid G. Mangudadatu, which seeks to give BPO employees a night differential of 25% of basic pay.
“We support the legislative intent, taking into consideration the hazards, risks and stress associated with night work; however… what we are concerned about is the impact of additional night shift pay for other workers in other industries,” National Wages and Productivity Commission Executive Director Patricia P. Hornilla told the panel.
Committee Chair Randolph S. Ting of the third district of Cagayan said the panel will have to consult lawyers, as well as other stakeholders about the bill.
“We need to check on its constitutionality because of the requirement of equal protection under the law… why is it only for BPOs?” Mr. Ting told BusinessWorld in an interview.
HB 2225 seeks to compensate night-shift BPO employees for taking on added risks to their safety and health.
The measure also hopes to include employees of BPO companies operating in Information Technology Centers as well as in locations accredited by the Philippine Economic Zone Authority.
IT & Business Process Association Philippines, Inc (IBPAP) Executive Director for Industry and External Affairs Nicki S. Agcaoili said BPO firms currently provide night employees additional pay.
“Current practice is we pay 10% (more) per hour, if their shift falls between 10 p.m. and 6 a.m.,” Mr. Agcaoili said.
He added the BPO industry is still drafting its position but has taken into account the proposed measure’s possible impact on the industry and its competitiveness against other countries.
“We have to factor in the competition, like India and China. Currently only the Philippines offers a night differential,” Mr. Agcaoili told the panel. — Charmaine A. Tadalan

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