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S&P raises Philippine GDP growth projection

S&P Global Ratings has increased its Philippine economic growth projection in the face of upbeat consumer demand and a surge in electronics exports.

The credit rater now sees Philippine gross domestic product (GDP) expanding by 6.6% in 2017, just above the low end of the government’s 6.5-7.5% growth goal for the year.

S&P analysts noted that the “upturn in global growth and trade” that has boosted demand — particularly for electronics products — will lift exports from Asia-Pacific economies.

This will add to already robust domestic consumption across Southeast Asian economies.

“Domestic demand looks stable for the next few years in the region,” S&P said in a Nov. 28 report.

“Malaysia, Thailand and the Philippines are part of the global electronics supply chain and have benefitted this year from the electronics recovery, while Indonesia has gained from higher commodity prices.”

Outbound shipment of Philippine goods had grown by 12.2% as of end-September, turning around from a 4.4% decline recorded in 2016’s comparable nine months, according to the Philippine Statistics Authority.

Previously, S&P gave a 6.4% growth forecast for Philippine economic growth, just below the official growth target.

Philippine GDP grew by a faster-than-expected pace of 6.9% in the third quarter, a rate deemed “impressive” by the debt watcher. This brought the year-to-date pace to a 6.7% climb, well within target.

The Philippine economy expanded by 6.9% in 2016, helped partly by a boost from spending related to last year’s national and local elections.

Economic managers have said that GDP growth should pick up this quarter as the government continues to improve spending, particularly on infrastructure and social services, and as household spending spikes as Christmas approaches.

Annual economic growth across member-states of the Association of Southeast Asian Nations is seen to average 5.1% for 2017 and 2018, picking up from the 4.8% pace posted a year ago.

Trade-related risks have “diminished,” as threats from policy shifts in the United States are expected to have abated following the visit of President Donald J. Trump in Asia. That, in turn, had helped ease trade tensions with China and — at least momentarily — geopolitical threats in the Korean peninsula.

“Unexpected financial market turbulence around the path of US monetary policy normalization remains on our risk list,” S&P said, even as analysts noted that global markets have priced in the much-anticipated rate hike this December and at least two more next year.

“Risks to the outlook include potential capital outflow pressures arising from changes in global monetary conditions and any unexpected slowdown in external demand.”

The Bangko Sentral ng Pilipinas has said that while a fresh Fed rate hike could trigger short-term volatility, the monetary authority stands well-equipped to weather such headwinds by deploying its policy tools as necessary. — Melissa Luz T. Lopez

Philippine investment boom leaves neighbors in the dust

CAPITAL INVESTMENT in the Philippines is surging past the rest of Southeast Asia as the government and firms ramp up spending.

In the first nine months of this year, net physical assets in the Philippines grew by 10.4% from a year earlier.

That compared with a 6.9% increase in Malaysia and 5.8% gain in Indonesia, according to data from statistics offices.

There’s reason to remain bullish on the outlook.

Philippine government spending jumped by 28% in October, the largest rise in almost a year, with another record budget planned for 2018.

Companies are also joining in: Metro Pacific Investments Corp. plans to invest as much as $16 billion through 2022 on road, water and power projects, while Ayala Land, Inc. is boosting capital spending to a record $2 billion next year.

President Rodrigo R. Duterte is building a network of railroads and highways across the archipelago in an ambitious $180-billion infrastructure program.

Investment firing up adds another engine to the economy, headed for a sixth year of growth exceeding six percent and among the world’s best performers.

CATCHING UP
“The government is very committed to keep spending strong and that has maintained the robust momentum of the investment cycle,” said Eugenia Fabon Victorino, an economist at Australia & New Zealand Banking Group Ltd. in Singapore.

“With growth firing on all cylinders, the Philippines is really standing out in a region where the outlook has turned more positive,” she added.

After lagging its neighbors for decades, the Philippines is catching up. Growth in net physical assets — or gross fixed capital formation — averaged 14.4% in the five years through 2016, the fastest in Southeast Asia and almost twice as fast as Malaysia, according to the World Bank.

Mr. Duterte wants to transform the Philippines into an upper-middle income country by the end of his term in 2022, and the cornerstone of his vision is a plan referred to as “Build, Build, Build.” It includes the capital’s first subway and a 653-kilometer railway to the south.

“Capital formation goes hand in hand with the focus on infrastructure,” said Jonathan L. Ravelas, chief market strategist at BDO Unibank, Inc.

“The private sector has always been investing, but now public spending is catching up.” — Bloomberg

BSP trims term deposit offerings as demand weakens due to RTBs

By Melissa Luz T. Lopez,
Senior Reporter

THE CENTRAL BANK has slashed auction volumes for term deposits for December amid tepid demand as excess funds held by banks found its way to the government’s retail bond offer and other investment instruments.

The Bangko Sentral ng Pilipinas (BSP) will only be selling P80 billion worth of term deposits by December, down from the P130 billion offered this month amid a trend undersubscription for the week-long and month-long tenors.

This is the fourth time the BSP has trimmed the weekly auction volume this year, coming from a peak of P180 billion from January to August. By Dec. 6, the central bank will only accept bids of up to P40 billion for each of the week-long and month-long tenors.

The decision came as Wednesday’s P130-billion offering received a mere P82.727-billion demand, slipping from the P92.776 billion received a week ago as banks were reluctant to park their extra funds under the facility.

Bids for the seven-day tenor dropped to P37.351 billion from P52.415 billion last week, settling below the P40 billion which the central bank placed on the auction block. The firms also sought for lower returns to average at 3.4005%, coming from 3.4057% the previous week.

The 28-day term deposits were likewise barely filled, with tenders settling at P45.376 billion against the P90 billion which the BSP wanted to sell. However, this inched higher than the P40.361 billion in offers received last week.

The soft demand also drove yields lower to a 3.492% average, compared to 3.4926% last week.

The term deposit facility is currently the central bank’s main tool to capture excess liquidity in the financial system by allowing banks to place extra cash they hold, in exchange for a small return. Through this, the BSP expects to influence market rates to log closer to the 3% benchmark rate, coming from below the 2.5% floor of the interest rate corridor.

A central bank official said the reduction of the auction volume is in response to a shrinking supply of excess funds in the financial system, particularly after billions of pesos have been captured by retail Treasury bonds (RTB) dangled by the government last week.

“Banks have been withdrawing their excess liquidity from BSP facilities to fund loans to various production sectors, buy foreign exchange for clients’ imports and outward investment requirements, and investment in government securities and retail treasury bonds, among others,” BSP Deputy Governor Diwa C. Guinigundo said in a text message to reporters.

“[T]here is less excess liquidity to mop up. The BSP therefore decided that it should offer less volume in the TDF.”

The Bureau of the Treasury has so far raised between P100 billion and P200 billion from the five-year papers, Mr. Guinigundo said.

Mr. Guinigundo said funds raised under the RTB offering will eventually be absorbed and redeployed in the system as these are spent for the construction of big-ticket projects.

SM Prime bets on Bulacan growth with mall, condo

By Arra B. Francia, Reporter

SM PRIME Holdings, Inc. is taking advantage of the booming population in Bulacan with the opening of a new shopping mall and the development of a mid-rise condominium project.

In a statement issued on Wednesday, the holding firm for country’s richest man Henry Sy, Sr.’s property investments said it is slated to open SM Center Pulilan along the Plaridel-Pulilan Diversion Road on Friday (Dec. 1).

This will be the company’s fourth shopping mall in Bulacan, after SM City Marilao, SM City Baliwag, and SM City San Jose del Monte.

“The notable development and growth of this province gives us more reasons to keep on expanding in Bulacan while continuously providing utmost malling experience and convenience to more Bulakenyos,” SM Prime President Jeffrey C. Lim was quoted as saying in a statement.

The company noted 80% of the mall’s gross floor area of 27,000 square meters (sq.m.) has already been leased out to tenants. SM Hypermarket, Watsons, Ace Hardware, SM Appliance, and Surplus will also have branches at SM Center Pulilan.

SM Center Pulilan marks the sixth mall that SM Prime has opened this year, bringing its total mall count in the Philippines to 66. SM CDO Downtown Premier in Cagayan de Oro, SM Maison at Conrad Manila in Pasay City, SM Cherry Antipolo in Rizal, SM City Puerto Princesa in Palawan, and SM Center Tuguegarao Downtown in Cagayan started operations earlier this year.

Meanwhile, SM Prime’s subsidiary SM Development Corp. (SMDC) broke ground for Cheer Residences in Marilao, Bulacan, which is the company’s first vertical development in the area.

SMDC Assistant Vice-President for Marketing Chad D. Africa said the firm is ramping up investments in Bulacan as it projects the rise of property values in the area as the population grows.

“It’s a growing population, right now it is growing at a rate of about 1.95%. This means the population is growing, and they need homes, whether to buy or to rent, so we are positioned for that. At the same time, property values would keep on increasing,” Mr. Africa told reporters in a briefing after the groundbreaking ceremony in Marilao on Wednesday.

SMDC targets to generate P2.6 billion in sales from Cheer Residences over the next two years. The company said it has so far sold 35% of the 995 condominium units in the project.

“As of now, we’re more than one-third sold na. So if we continue with this rate, hopefully by 2019 we’ll be sold out,” SMDC Assistant Vice-President for Project Development Therese P. Sonsing-Fernando said during the same briefing.

The project’s seven towers will have five storeys each, offering what SMDC calls the “flexi-unit” that will have no divisions.

“It allows our homeowners to decide, depending on their stage in life how they want to use the unit,” Mr. Africa said.

Sizes of units range from 28.52 sq.m. to 43.09 sq.m., priced at P90,000 per square meter. On average, units are sold at a price of P2.6 million, with monthly amortization going for as low as P7,000.

Amenities in the 23,000-sq.m. development will include a clubhouse and function room, swimming pool, central park, and a children’s play area.

SMDC targets to complete the project by August 2020, with turnover to follow around that time. 

Cheer Residences is also situated right next to SM City Marilao. Mr. Africa noted the company will follow the strategy of putting up residential projects next to SM malls in the future.

“That has always been at the core of our developments. They’re buying a prime piece of lot, just like what we’re offering here, and it’s right beside the mall,” Mr. Africa said.

SM Prime posted a 15% increase in attributable profit for the first nine months of 2017 to P20 billion, riding on the expansion of its shopping malls and sales from its residential projects.

Shares in SM Prime were unchanged at P36.30 apiece at the Philippine Stock Exchange on Wednesday.

Philam Life looking to add health component to more insurance products

PHILIPPINE American Life and General Insurance Co., Inc. (Philam Life) wants to attach a health component to its products amid strong demand as part of its aim to narrow the insurance gap in the country.

In a media luncheon on Tuesday, Philam Life Chief Executive Officer Ariel G. Cantos said the company intends to address the market’s need to remain healthy.

“As an institution, we want to influence people to be healthy. That’s why our services, our products, and even our communication is now toward being healthy,” Mr. Cantos told BusinessWorld.

Mr. Cantos noted that while Filipinos are not fully committed in staying healthy despite setting this as a priority.

“According to a survey, 63% of the Filipinos want to be healthy. Unfortunately, are they doing something about it? We know that they don’t. That’s when the Vitality program enters,” he said in Filipino.

Vitality is a rewards program of Philam Life that provides incentives when clients achieve a wellness goal.

“When they engage in healthy activities such as exercise [and] check-ups, they can get points. [These can accumulate to obtain prizes.] For example, if you’re able to meet your goal in two weeks, [you can get free cellphone] load and movie [passes],” Mr. Cantos explained.

The Vitality program is mobile application-based, and Philam Life aims to get it incorporated to all insurance products in 2018.

Currently, the said program is attached to only three insurance programs.

Through this and other initiatives, Philam Life also intends to address the large protection gap — the amount of insurance that is still needed — in the Philippines.

To address this, Mr. Cantos said the company is looking to  strengthen its sales and agent force. The insurer will also ramp up its campaign to lure younger generations to avail of insurance products.

“One of the things we’re doing is [to] attract young financial advisors [because the younger demographics is more comfortable to talk to people their age] who understands them,” the official said.

To encourage more millennials to get into investing in insurance, financial advisers are equipped with digital tools such as mobile tablets and social media applications to get their potential clients engaged. — Karl Angelo N. Vidal

Global Business Power, Alsons finalize partnership in ATEC

ALSONS Consolidated Resources, Inc. (ACR) and Global Business Power Corp. (GBP) have finalized their partnership in a Mindanao power generation holding company.

In a statement released on Wednesday, ACR said it signed the shareholder’s agreement with GBP for the latter’s acquisition of a 50% stake in Alsons Thermal Energy Corp. (ATEC), which holds the Alcantaras’ baseload coal-fired power plant assets.

“We believe this partnership will greatly benefit power consumers, particularly in light of the planned interconnection of the Mindanao and Visayas grids which we strongly support,” ACR Chairman and President Tomas I. Alcantara was quoted as saying in a statement.

He said the partnership with GBP, a leading power producer in the Visayas, would also allow it to pursue other energy-based projects, particularly renewable power plants in Mindanao and Western Visayas.

“It will likewise allow ACR to accelerate its foray and entry in other energy-related enterprises in Southern Philippines, including the smaller islands with promising growth in power demand,” Mr. Alcantara said.

ATEC owns 75% of the 210-megawatt (MW) Sarangani Energy Corp. coal-fired power plant in Maasim, Sarangani province.

In September, the Philippine Competition Commission (PCC) gave the go-signal for GBP’s acquisition of a 50% stake in ATEC, saying the transaction “does not result in a substantial lessening of competition in the relevant market.”

“There appears to be neither increased ability nor incentive to engage in foreclosure, post-acquisition, in the power generation market […] and there appear[s] to be sufficient post-acquisition competitive constraints from competitors in the power generation market,” it said in the decision signed by PCC Chairman Arsenio M. Balisacan and three other commissioners.

GBP is an associate of Metro Pacific Investments Corp. (MPIC). MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

De Castro testifies, questions Sereno’s actions

SUPREME COURT (SC) Associate Justice Teresita J. Leonardo-de Castro on Wednesday testified before the House committee on justice hearing the impeachment complaint against Chief Justice Maria Lourdes P.A. Sereno

In the course of her testimony, Ms. De Castro downplayed reports that she gave Ms. Sereno a tongue-lashing after the Chief Justice supposedly altered the ruling in a temporary restraining order (TRO) that Ms. De Castro drafted.

The associate justice said the reports were “exaggerated,” explaining that she might have said what was on her mind in an “emphatic” manner during deliberations of the Supreme Court en banc, “but after the en banc, we eat together. Hindi po kami nag-aaway (We are not fighting).”

Lorenzo G. Gadon, the lawyer seeking Ms. Sereno’s impeachment, had alleged that she committed culpable violation of the Constitution by tampering with a TRO of the SC in G.R. No. 206844-45 (Coalition of Associations of Senior Citizens in the Philippines v. COMELEC).

Asked by lawmakers, Ms. De Castro said the consolidated two cases involving the coalition – also known as the Senior Citizens’ Party-list — were raffled to her in May 2013, after the midterm elections that year.

‘TAKEN ABACK’
The Commission on Elections (Comelec) earlier issued a resolution disqualifying the party-list group, which nevertheless garnered enough votes to earn it a seat in the House of Representatives. Ms. De Castro said she thought it would be unfair to the party-list to be disqualified given the votes it received.

At the time, the high court was in recess. Ms. De Castro said she had prepared a synopsis explaining the case to Ms. Sereno, as well as a draft TRO where she “explicitly” recommended the issuance of a TRO to the Comelec to prevent it from implementing its resolution.

Given the urgency of the matter, she submitted her recommendation to Ms. Sereno’s office, which received it at the “first hour” in the morning of May 29, 2013. At the time, only 14 party-lists were proclaimed winners by the Comelec.

Come afternoon, 53 party-lists were already proclaimed, prompting Ms. De Castro to worry that the Senior Citizens’ Party-list might lose its seat.

Ms. De Castro said that by the time Ms. Sereno arrived at the office, it was already in the afternoon — a “very late” hour. She said she had followed up the matter with the Chief Justice’s office throughout the day, but Ms. Sereno allegedly did not even call her up to discuss it with her.

When the TRO was released by Ms. Sereno, Ms. De Castro said she was “taken aback” because it attributed to her the recommendation that the Comelec stop proclaiming all remaining party-lists.

Ms. De Castro added that the Comelec resolution in question was not even referred to in the TRO.

She then wrote Ms. Sereno a letter to say that the TRO should only involve the Senior Citizens’ Party-list, as it was “very basic” that anyone who was not involved in a case should not be included in it.

Ms. De Castro said she also mentioned that the TRO from Ms. Sereno would violate the right of the party-lists to due process of law, and asked Ms. Sereno why she stopped the proclamation of the other groups.

The high court en banc took up the matter and decided to issue a status quo ante order. Ms. De Castro explained that the TRO was rescinded in the sense that it no longer covered all party-list groups, and that it now specifically referred only to the Senior Citizens’ Party-list.

Ms. Sereno’s spokespersons, in a press release, noted Ms. De Castro’s “mere recommendatory power.”

“The Chief Justice, during recess, is expressly empowered to ‘act’ on urgent cases requiring immediate action, even without the recommendation of the Member-in-Charge,” they said.

“The Chief Justice could not be accused of falsifying anything. In the exercise of her own discretion and authority to issue TROs when the Court is in recess, the Chief Justice elected to issue a temporary restraining order under terms she considered just and proper,” the spokespersons also said.

They explained further: “Justice De Castro had recommended the issuance of a TRO against a COMELEC Resolution, albeit limited to the petitioners in G.R. Nos. 206844 to 45. However, the assailed COMELEC Resolution actually affected party-list candidates other than those in G.R. Nos. 206844-45.”

“It also happened that a petition filed by another party-list candidate and docketed as G.R. No. 206952, had questioned the same COMELEC Resolution. G.R. No. 206952 was raffled to then Associate Justice Bienvenido L. Reyes. Justice Reyes had also recommended the issuance of a TRO against the COMELEC Resolution.”

“Upon the Chief Justice’s evaluation, the COMELEC Resolution could not be restrained in favor of one group but allowed to continue against others. For this reason, the TRO she issued was not limited to the petitioners in G.R. Nos. 206844-45.”

‘FABRICATION’
Earlier in her testimony, Ms. De Castro also raised the serious protest she had lodged against Ms. Sereno’s alleged misrepresentation of the en banc’s Nov. 27, 2012 deliberations on the creation of the Regional Court Administrator’s Office in Region 7 (RCAO-7).

Ms. Sereno’s alleged “fabrication” of a resolution that misrepresented the intent of the en banc on the RCAO-7 – merely to study the need for, not yet create the office — was one of the grounds for impeachment listed in the complaint by lawyer Lorenzo G. Gadon.

Ms. Sereno’s Administrative Order 175-2012 revives the Regional Court Administration Office-7 (RCAO-7) in Cebu City. The order was meant to decentralize the Manila-based Office of the Court Administrator under Jose Midas P. Marquez but was implemented without the required approval of the en banc.

Fielding questions mainly from Majority Leader Rodolfo C. Fariñas, Ms. De Castro said that after she wrote Sereno to protest the issuance of the resolution that reflected the supposed “ratification” by the en banc, in its Nov. 27, 2012, deliberations, of the revival of RCAO-7, the en banc met anew on the matter and issued a new resolution.

Prodded by Mr. Fariñas, Ms. De Castro said the en banc resolution “effectively overturned” the resolution issued by Sereno.

“The exchanges among the justice was clear, to just create a study group and the Chief Justice even said I will amend my Administrative Order, and I was relying on that,” Ms. De Castro said, adding that she had also taken issue with Sereno’s move to designate Judge Geraldine Faith Econg — someone outside the Office of Court Administrator and accountable only to the Chief Justice — to head RCAO-7.

Asked if Ms. Sereno replied to her letter protesting the apparent misrepresentation, De Castro replied, “Hindi po [No, sir]. She did not reply at all.”

Even during the deliberations (the matter was again taken up on Dec. 7), Ms. De Castro said Ms. Sereno did not explain why she issued AO 175.

In the Dec. 11, 2012 deliberations, the en banc subsequently decided to form a study committee to revisit the need to revive the RCAO and decentralize the functions of the Office of the Court Administrator, and designated Associate Justice Jose Perez to head the study group.

“It is a subtle way of overturning” Ms. Sereno’s issuance of her resolution, said Ms. De Castro, noting that “we didn’t want to embarrass” the Chief Justice.

“I’m not after putting her down, I just want to correct what has been done to put things in order as decided by the court in previous resolutions,” the associate justice added.

Lawyers for Sereno, who have been sending running commentaries to the media, asserted that the “SC en banc approved the creation of Regional Court Administrative Office (RCAO) in Region 7.”

Ms. Sereno’s counsel said: “It is false to say that the Chief Justice acted unilaterally and without the knowledge of the Court En Banc when she issued AO No. 175-2012. Precisely, the creation of said office, its budget as well as the designation of its staff, had already been approved and delineated in earlier Resolutions of the Court. The Chief Justice, after studying the problems besetting far-flung courts, simply implemented these earlier Court En Banc resolutions creating an RCAO in the seventh judicial region,” Ms. Sereno’s lawyers said, adding:

“Contrary to Complainant’s baseless allegations, there is no En Banc Resolution nullifying, superseding or otherwise ‘scrapping’ the Supreme Court’s resolutions creating the RCAO-7, including the assailed 27 November 2012 Resolution in A.M. No.12-11-9-SC.”

In a press statement also on Wednesday, the Sereno camp said: “Although the AO No. 175-2012 of the Chief Justice dated 9 November 2012 refers to the Judiciary Decentralized Office, she was not creating a new office, she was referring to RCAO-7.”

“This is clear from the AO No. 175-2012 itself which designates the Head of the JDO pursuant to En Banc Resolution of the Court in A.M. No. 06-11-09-SC dated 14 November 2006, which had created the RCAO-7.”

“The En Banc Resolution dated 27 November 2012 is clear that what it ratified was the action of the Chief Justice — ‘to revive the Regional Court Administration Office in Region 7.’ Even Justice de Castro’s 3 December 2012 letter to the Chief Justice itself expresses the Court’s supposed consensus on the JDO as a consensus ‘opposing the reopening of RCAO-7.’”

For his part, Mr. Fariñas said, reading Ms. De Castro’s letter, that the said administrative order “has transgressed the said constitutional authority of the court en banc and the statutory authority of the Office of the Court Administrator.”

The House leader also noted that PD No. 828, creating the Office of the Court Administrator in the Supreme Court, stated that the Chief Justice can only appoint staff with the approval of the court en banc.

Mr. Marquez, for his part, gave lawmakers a background of why the RCAO concept came to be, during the term of Chief Justice Artemio V. Panganiban, Jr., in 2006, as a move to decentralize the OCA functions to boost its fiscal responsibility, accountability and efficiency. — Tricia Aquino and Lira Dalangin-Fernandez of News5/interaksyon.com

San Miguel says looking to bid for Vietnam’s Sabeco

MANILA — The Philippines’ San Miguel Corp. is looking to bid for Vietnam’s largest brewer Sabeco, the conglomerate’s president said on Wednesday.

“Yes,” Ramon Ang told Reuters in a text message when asked if San Miguel is looking to join the bidding for the Vietnamese brewer.

Vietnam will kick off the sale of 54% of Sabeco, the maker of Bia Saigon and 333 beers, next month, in an ambitious deal the government hopes will raise at least $5 billion.

The long-awaited sale has already attracted interest from brewers seeking access to what is the second-most profitable market for Heineken, which holds 5% of Saigon Beer Alcohol Beverage Corp. (Sabeco).

But analysts said the tripling of Sabeco’s share price to 340,000 dong ($14.96) from its December 2016 listing, and a foreign ownership limit of 49% could deter some global brewers from participating in the auction.

The sale could provide a blueprint for other privatization which Hanoi is considering as part of broader economic reforms, including that of peer Habeco, in which Danish brewer Carlsberg owns 17.3%.

The minimum price for Sabeco’s sale was set at 320,000 dong a share, trade ministry official Truong Thanh Hoai told a news conference on Wednesday, days after the company held investor road shows in Singapore and London.

“The big sale is to increase the attractiveness,” Hoai said.

Foreigners already owned over 10% in Sabeco, and the total limit for such ownership was still capped at 49%, he said.

The government owns nearly 90% of Sabeco and analysts said the low float had inflated the market value.

“Through the two recent road shows, we saw a very high level of interest. Most investors highly valued Sabeco’s business performance and the potential of the beer market,” Sabeco Chairman Vo Thanh Ha told reporters.

Vietnam is on track to become Asia’s biggest per-capita beer market by 2021 and is shaping up as a battleground for global brewers thanks to a youthful population and beer-drinking culture.

However, Sabeco’s valuations have soared, with its shares trading at a price-to-earnings multiple of 49 compared with 20 for Japan’s Asahi Group Holdings for Thai Beverage PCL and 15 for Japanese brewer Kirin Holdings, Thomson Reuters data showed.

Kirin was also interested and would make a decision once sale details were finalized, a spokesman said this week after the Singapore road show. — Reuters

Peso strengthens further as tax bill gains traction

THE PESO continued its rally against the dollar on Wednesday on the back of positive sentiment on the passage of the Philippine tax reform bill.

The local unit finished at P50.27 against the greenback yesterday, strengthening from its P50.35 close on Tuesday.

The peso opened slightly weaker at P50.40, while its intraday low was seen at P50.44. Its best showing for the day was at P50.24.

Dollars traded increased to $728.90 million on Tuesday from $696.45 million in the previous session.

“The peso continued its move higher and that has been the trend lately. Looks as if it’s going to continue with a move lowering the dollar,” a trader said in a phone interview.

Traders attributed the peso’s climb to positive sentiment in the market as the passage of the first tax reform package nears.

“The market has been trying to monitor for directions going forward with the outcome of the bicameral meeting for the tax reform bill. That would be up by the first or second week of December,” the trader added, noting that if the revenue target will be close to the amount set by the Finance department is something that would push the peso upwards.

However, the peso’s ascent was tempered by morning trading, as the speech of the incoming US Federal Reserve chair Jerome H. Powell was considered hawkish.

“The peso traded stronger, although initially it opened weaker because overnight, we heard some hawkish remarks from Powell’s speech. It boosted the sentiment on the rate hike this December,” another trader said, noting that upbeat US economic data on non-deliverable fund also tempered the peso’s rise.

“I think the movement of the peso intensified when it broke the P50.46 average. At that point, we would see a bounce, but what happened is the peso breached it so I guess it triggered more selling after,” the first trader noted.

For today, a trader expects the peso to play within the P50.10-to-P50.50 level, while the other trader gave a slimmer range of P50.15 to P50.45.

Meanwhile, most Asian currencies moved sideways on Wednesday, as the market focused on progress in President Donald J. Trump’s tax cut plan while the South Korean won touched multi-year highs, unfazed by yet another show of aggression from the North.

US Senate Republicans pushed the president’s tax-cut bill through in an abrupt, partisan committee vote that set up a full vote by the Senate as soon as Thursday.

The greenback gained further traction against the yen after data showed a robust labor market propelled US consumer confidence to a near 17-year high in November.

The dollar index, however, which measures the greenback against a basket of six major currencies, was slightly lower at 0425 GMT.

Meanwhile, North Korea conducted its first missile test since September with a new type of intercontinental ballistic missile that it said could reach all of the US mainland.

The dollar also drew heart from Mr. Powell, Mr. Trump’s choice to lead the US Federal Reserve, defending plans to potentially lighten regulation of the financial sector during a controversy-free confirmation hearing.

In Asia, the South Korean won gained as much as 0.3% to push past a two-and-a-half year high, riding on expectations that the Bank of Korea will raise interest rates at its meeting on Thursday. — KANV with Reuters

Duterte wants Grace Poe ‘to be president someday if…’

PRESIDENT Rodrigo R. Duterte said he will consider Senator Grace Poe to be president someday if the Constitution will approve foundlings to run for office.

“I like Grace Poe to be president someday if the requirement remains to be same. But, I said, I think we will amend the Constitution and make that exemption, na ’yung (that) foundling are already qualified,” Mr. Duterte said on Tuesday, at the birthday party of lawyer and Philippine Amusement and Gaming Corp. (PAGCOR) President Alfredo C. Lim in Dasmariñas, Cavite.

Ms. Poe, an adopted daughter of actors Susan Roces and Fernando Poe, Jr. who, besides, also held US citizenship for a time, was confronted by questions on her citizenship during her presidential bid in 2016 — when Mr. Duterte also threw his hat in the presidential arena and expressed his objection to Ms. Poe’s candidacy.

Mr. Duterte did not believe that she is a natural-born citizen, prompting him to ran for the 2016 national elections.

“She’s my friend. I love her because she’s very good-natured, a gentle lady, and a true public servant. Wala akong problema diyan kay (I have no problem with) Grace,” Mr. Duterte said on Tuesday.

“Pero ’yung akin ho (But my concern is ) that would affect her also was the decision dito (here). Suddenly, I just said, “Eh kung ganun pala, eh ’di tatakbo na lang rin ako,” (If that’s the case then I will run also), he added, referring to a Supreme Court decision, during the 2016 election campaign, upholding Ms. Poe’s citizenship.

“A treaty overruling a very poignant and strict requirement that you must be a citizen paglabas mo sa mundong ito (when you come out into this world). Kasi kung wala kang (Because if you don’t have a) known father or mother, you are a foundling, and then you cannot really say with certainty now that you are a natural-born citizen. ’Yun lang po (That’s all). I disagreed with the Supreme Court,” Mr. Duterte also said.

He also urged Congress to shorten the terms of all government officials, including the President, when they start to amend the Constitution.

“I am addressing myself to Congress. Let us amend the Constitution. Shorten or restrict the powers of everybody, including the Presidency, but make a Constitution that would mandate more accountability and responsibility of officials,” said Mr. Duterte, who is pushing for a federal system of government.

He added: “Either you can do away with my presidency, but if you succeed, I said, in crafting a law, which would ensure stopping corruption in this country, I will be willing. Do not be afraid of dictatorship. I am not aiming for it. I do not ask it and I do not like it.” — Rosemarie A. Zamora

Former police chief Garbo, wife face ill-gotten wealth charges

THE NATIONAL Bureau of Investigation (NBI) yesterday filed ill-gotten wealth charges against former police director-general Marcelino P. Garbo, Jr. and his spouse, lawyer Rosalinda S. Garbo, before the Office of the Ombudsman.

NBI Director Dante A. Gierran, in a statement, said the investigation spearheaded by the NBI-Anti Graft Division showed the couple amassed assets “way beyond their legitimate income and for non-declaration of said assets in his statement of assets, liabilities and net worth (SALN), which by law is required for all public officials and employees.”

The NBI will file three charges against Mr. Garbo, including falsification of public documents for the SALN misdeclaration.

The other charges would be for violation of Section 8 in relation to Section 11 of the Code of Conduct and Ethical Standards for Public Officials and Employees or Republic Act (RA) 6713, and Violation of Section 7 of the Anti-Graft and Corrupt Practices or RA 3019.

In addition, the couple are facing “charges for violation of RA 1379 or An Act Declaring Forfeiture in Favor of the Government of Unlawfully Acquired Property, pertaining to the properties presumed to have been unlawfully acquired for being manifestly out of proportion to the lawful income of Mr. Garbo and his spouse, Ms. Garbo,” according to Mr. Gierran.

The NBI also recommended that “a corresponding request through the Mutual Legal Assistance Treaty (MLAT) be made with the United States (US) Government to determine if indeed lawyer Rosalinda S. Garbo or any member of the family owns a real property in the US and for their eventual forfeiture in favor of the Philippine Government in accordance with law.”

The NBI investigation, based on the complaint filed, was prompted by the President citing Mr. Garbo as among the high-ranking police officials allegedly involved in the illegal drug trade.

“In his speech at the 69th anniversary of the Philippine Air Force in July 5, 2016, President Rodrigo R. Duterte mentioned five PNP (Philippine National Police) Generals who are allegedly protectors of syndicates involved in illegal drug trade. One of those mentioned is PDDG Marcelo P. Garbo, Jr.,” the complaint states.

“The NBI Task Force Anti-Illegal Drugs was forthwith ordered by the NBI Director to conduct the investigation,” it noted.

“In Nov. 28, 2016, the Task Force referred the financial investigation (lifestyle check) aspect of the probe to the Anti-Graft Division for appropriate action. The objective of this financial investigation is to determine whether or not Gen. Garbo has amassed ill-gotten wealth when he was still an Officer of the PNP,” it added. — Andrea Louise E. San Juan

Lacson bats for pension inclusion in salary increase of uniformed personnel

SENATOR PANFILO M. Lacson is pushing for the inclusion of the increase in pension of retired soldiers and policemen in the joint resolution authorizing the increase in base pay of the government’s uniformed personnel.

“I’m appealing to (Senator Gregorio B. Honasan II, chairman of the Senate committee on national defense and security),” said Mr. Lacson, noting that the Senate could adopt the measure and just leave it to the bicameral conference with the House of Representatives if it would be rejected, or the President if he chooses to veto it.

The increase in the base pay of military and uniformed personnel (MUP), according to Mr. Lacson, will be sourced from the 2018 General Appropriations Act, which is why it should be immediately passed so that it could be incorporated in next year’s budget.

The senator said the funding will be taken specifically from the “MPBF (Miscellaneous Personnel Benefits Fund)” in the proposed 2018 budget.

The Department of Budget and Management (DBM), in a statement on its Web site, said that if the resolution is “signed by both houses of Congress, it will double the base pay of a Police Officer (PO)1 in the Philippine National Police (PNP), a Private in the Department of National Defense (DND), and equivalent ranks in the Bureau of Jail Management and Penology (BJMP), Bureau of Fire Protection (BFP), Philippine Public Safety College (PPSC), Philippine Coast Guard (PCG), and the National Mapping and Resource Information Authority (NAMRIA).”

“A PO1 will enjoy a 100% increase in monthly Base Pay from the current 14,834 pesos to 29,668 pesos. Overall, the adjustments will result to a 58.7% average increase in Base Pay for all MUP ranks, effective Jan. 1, 2018,” DBM said.

DBM said the increase in base pay of MUP would cost an additional P63.4 billion.

Mr. Lacson said including the pension increase is “doable” because there is a lot of “excess” funds as the Senate has seen during the budget deliberations.

He cited that there is at least P35.9 billion in floating fund.

The only question now, said Mr. Lacson, is “whether Malacañang (is willing) to include the retired sector.”

For his part, Senate President Aquilino L. Pimentel III said the legislative body will first sort out the tax reform and budget bills, then it can focus on the MUP base pay increase.

Mr. Pimentel acknowledged that under the military setup, increasing the base pay of active personnel automatically increases the pension rates.

“(In the) military side. When you increase the base of the military personnel, you will also have to increase the pension of the retirees kasi nga indexed daw ’yun, konektado (because they are indexed, or connected),” said Mr. Pimentel, whose version of the bill suspends that connection.

“Of course, I understand merong mga maapektuhan (some will be affected), may mga reaksyon (there are reactions), so hindi ito (so this would not be) smooth-sailing… kailangang pag-usapan (a dialogue is needed),” he said.

Mr. Pimentel also explained that the government may not afford to increase the base pay of the military along with the pension of the retirees. “In a perfect world, kailangang ganun (that is how it should be) , (but) can we afford it?” — Arjay L. Balinbin