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PHL signs air services agreement with Maldives

THE Philippines and the Maldives have signed an air services agreement, paving the way for the launch of direct flights between the two countries.
The Department of Transportation (DoTr) and the Civil Aeronautics Board said in a statement that the two countries concluded the agreement on April 17, after negotiators met in Manila on April 16-17 to draft the agreement.
The agreement allows for an initial entitlement of 1,200 seats weekly for each country’s designated airlines between Manila and the Maldives.
Flights originating from or going to locations outside Manila will be unlimited, in line with the government policy of promoting other gateways in the Philippines.
DoTr Undersecretary for Aviation Manuel Antonio L. Tamayo said in a text message that negotiations on the allocation of seats will follow.
The Philippine air panel was led by the Department of Foreign Affairs, with representatives from the DoTr, CAB, Department of Tourism, Department of Trade and Industry, and the Department of Labor and Employment as members.
The Maldives delegation was composed of senior officials of the Maldives Civil Aviation Authority. — Patrizia Paola C. Marcelo

Marking one year of Build, Build, Build

During the Boao Forum held in China last week, President Duterte said that the country’s Build, Build, Build (BBB) program will provide the solid backbone for growth.
Indeed, several analysts have cited the administration’s ability to execute its infrastructure program as an important factor for achieving our growth targets. To the administration’s credit, it has exerted a concerted effort to put together an infrastructure plan and promote it aggressively.
As the BBB marks one year since its launch in April 2017, it is high time to revisit the government’s infrastructure agenda and examine how the Duterte government has fared so far.
Recently, the Stratbase ADR Institute hosted a round table forum to discuss the Special Study written by Dr. Alvin Ang on “Financing Inclusive Infrastructure.” Dr. Ang’s study tackles the Official Development Assistance (ODA) and Public Private Partnership (PPP) debate and explores how infrastructure can become more inclusive to benefit a wider segment of the Filipino population. Experts also discussed challenges surrounding the government’s infrastructure plans and offered solutions to remedy these issues.
Although the Philippines has recorded stellar economic growth rates in the last few years, infrastructure investments have failed to keep pace with growing demand. Infrastructure to GDP spending, for example, averaged at only 2.4% from 2010 to 2016.
Consequently, the underinvestment in the sector has prevented us from reaching our full economic potential. JICA estimates that traffic congestion in Metro Manila now costs P3.5 billion in lost opportunities every day, a 45% increase from P2.4 billion in 2012. Unsurprisingly, several global rankings have scored the Philippines poorly in infrastructure quality.
In an effort to overturn our dismal performance, the Duterte administration promised to allocate record-breaking funds into the sector to usher in the “golden age of infrastructure.”
Unlike the Aquino administration, which was bogged down with scrutinizing deals made during Arroyo’s term, the Duterte administration quickly expanded on the plans and projects of its predecessors. Also in contrast to the Aquino government, the Duterte administration has decided to tap more into overseas financing. Several conglomerates have felt sidelined with the administration’s decision to favor ODA over PPP, especially for its flagship projects.
Notwithstanding this shift, the government’s aggressive infrastructure campaign has so far yielded promising results.
In 2017, infrastructure to GDP spending reached 3.6% and exceeded its target by P19.4 billion. This trend is expected to continue this year as the government has committed to roll out infrastructure projects in “full steam.” Reforms are also underway to speed up project implementation, such as a shift to an annual cash-based system, forcing government agencies to improve budget execution. A budget reform bill is also pending in Congress to institutionalize reforms in financial management, budgeting, and accountability.
build build build
In addition to increasing spending levels, it is also equally, if not more, important to consider what type of projects we’re investing in, where these projects will be located, as well as to ensure that these projects will generate optimal socioeconomic returns.
Prof. Epictetus Patalinghug, a trustee and convenor at Stratbase ADRi, pointed out that infrastructure may have a larger impact if it is invested in rural projects. Indonesia and Malaysia, for example, have reduced their poverty rates faster because they concentrated on rural infrastructure provision. China’s township and village enterprises, which also prioritized rural areas, was instrumental in propping up the Chinese economy.
Locally, the BBB’s less popular relative, the Three-Year Rolling Infrastructure Program (TRIP), deserves equal exposure. The TRIP covers 4,895 smaller infrastructure projects that will be rolled out within the next three years. A little under a third of these projects will be implemented in the five poorest regions in the country.
Prof. Patalinghug also observed that infrastructure spending has so far been directed towards funding new projects. However, project maintenance merits equal attention. The rates of return from World Bank-assisted road maintenance projects, for example, were nearly twice those of road construction projects.
While the improved infrastructure spending is promising, there are several problems the government still needs to overcome.
For instance, there have often been huge delays between project approval and project execution. Thus, the promise of increased infrastructure spending must come hand in hand with correcting institutional weaknesses, addressing absorptive capacity constraints, poor project evaluation and project selection, as well as tackling corruption. The continuity of infrastructure plans should also be ensured, especially since the scale of the BBB projects suggests that its completion dates will most likely spill over to the next administration.
According to experts, these execution bottlenecks are more pressing than concerns on which financing mode is more superior, since the PPP and ODA have their own strengths and weaknesses. A project should instead be assessed to determine which financing scheme is most appropriate for it.
Ultimately, the main issue here is whether the government can overcome these execution challenges.
As Dr. Alvin Ang pointed out, this year will be critical in that the Duterte administration should be able to deliver a much-improved infrastructure spending and faster implementation of programs. Filipinos are of course expecting concrete developments, rather than just mere lip service.
If successful, the BBB could become the Duterte administration’s legacy program. Otherwise, Duterte’s popularity might be eroded sooner if he fails to meet expectations.
 
Weslene Uy is a Senior Economic Research Analyst of the Stratbase ADR Institute.

The TRAIN in the eyes of the DoF and BIR

The law cannot just be gauged on the basis of its provision. One should consider how its administrator views it. It should be recalled Congress recently passed the Tax Reform for Acceleration and Inclusion (TRAIN) Act, with the veto of its certain provisions. It would thus be interesting to see how the government, through the Department of Finance (DoF) specifically the Bureau of Internal Revenue, implements the most recent revisions to the Philippine Tax Code.
Under the law, the DoF is mandated to issue its implementing regulations up to Jan. 30.
Within this timeframe, the DoF was able to issue the implementing regulations on petroleum products, tobacco products, stamp duties, and automobiles. The DoF subsequently issued the regulations on income tax, stock transaction tax, updated withholding tax, transfer tax, and VAT. It has not yet released the regulations on sweetened beverages and cosmetic procedures. The delay is understandable given the limited period given to DoF.
But how do the DoF and BIR view the TRAIN? Do they share the view of the legislators? There seems to be some divergence, and in certain cases, a muscle flexing interpretation of an existing provision not touched by the TRAIN.
A CASE OF MUSCLE FLEXING
An example of muscle flexing is RMC 12-2018. The BIR has adopted a stance that it may access information shared by clients with their lawyers and accountants.
Under the Rules of Court, information shared with lawyers are not only confidential but also privileged communication. In contrast, those shared with accountants are only regarded as confidential. The Accountancy law permits an administrative tribunal like the BIR to subpoena them.
The BIR cites as basis the lawyers’ ethical canon. It mandates a lawyer to reveal clients’ secrets “when required by law.” According to BIR, it refers to the Tax Code provision authorizing the Commissioner to obtain third- party information. The crux of the controversy: which is more important, the right of the BIR to gather information or the rule permitting a client to freely disclose information to his lawyer? It should be the latter.
CONGRESS SHOULD HAVE MADE ITS INTENTION CLEARER
The TRAIN eased compliance with reporting requirements. It has removed the DoF’s authority to prescribe the filing of monthly returns. Taxpayers are only mandated to file quarterly returns. The DoF has recognized this, but insisted taxpayers should still file monthly remittance forms. They hold the amount withheld in trust for the government. It remains to be seen whether this will ease taxpayers’ reporting.
In any case, the delay in filing these forms should not have the same consequences that attach with the delay in filing tax returns.
Employers must still file monthly compensation withholding tax (CWT) returns. Congress likely failed to note the special chapter on CWT when it removed the DoF’s authority to prescribe monthly returns. Per DoF, this requirement stays since the TRAIN did not remove it.
The case is different with regard to the fringe benefit tax (FBT). Even though the TRAIN (and the presidential veto) did not specifically remove the special FBT for certain personnel of foreign branches (like Regional Headquarters), the DoF’s position is that it has been removed. It is implied from the president’s veto on their preferential income tax. This is now subject of a court case.
Finally, the DoF is silent when the transfer is “made in the ordinary course of business (a transaction which is a bona fide, at arm’s length, and free from any donative intent),” which under the TRAIN should not give rise to an implied donation. This has been a source of dispute with BIR when securing a clearance for share transfers. The DoF is also silent when the “tax-free exchange” (like corporate restructuring) is VAT-free. Hopefully, the BIR would act on taxpayers’ requests involving these transactions without the issues they raised in the past.
It is the turn of the courts in proper cases to determine whether the DoF has acted beyond its mandate in making these issuances, or the BIR in implementing them. Taxpayers must remain vigilant, and if necessary request Congress for corrective legislation.
This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.
 
Eric R. Recalde presently heads the Tax Department of Angara Abello Concepcion Regala & Cruz Law Offices. He assists clients in different fields of law, including Taxation, Trusts & Estates, Mergers & Acquisitions, Investment Law, Government Contracts, Public Private Partnership Arrangements and Privatization Projects, Antitrust & Trade Regulation.
errecalde@accralaw.com
(02) 830-8000

A biased Supreme Court, threat to our fragile democracy

Unless The Supreme Court, sitting as the Presidential Electoral Tribunal (PET) reverses itself on its position that a resolution issued in Year 2010 stipulating a minimum of 50% shading of the ballot ovals is required for validation of the ballot, its bias for the rich will become even more obvious. The Comelec had recognized a 25% shading threshold in an en banc resolution.
In response to her letter request to Comelec for guidance, following the protest filing in July 2016 by Ferdinand Marcos, Jr., Comelec Oversight Commissioner for the Random Manual Audit (RMA) Luie Tito Guia had written a memo to lawyer Felipa Anama, Clerk of the PET, informing the Supreme Court that the vote counting machines had been configured in May 2016 to count ovals with minimum shading of 25%. This threshold was considered adequate for preventing counting of accidental markings or unintended errors, and ensuring intentional votes are counted. In this country where a great majority are not used to reading and writing much, this makes sense.
The PET says it is “not aware” of such a Comelec Resolution. All it has to do is take the trouble to look for the document which should be in their files, and which was signed by then Comelec Commissioner Andres Bautista, Commissioners Guia, Christian Lim, Rowena Guanzon, Al Parreno, Arthur Lim, and Sheriff Abas. The en banc resolution formalized an agreement earlier and demonstrated by technology supplier Smartmatic prior to the May election that a 25% threshold was sensible and doable.
This development which seems to have escaped notice by major media channels is crucial to the survival of our increasingly threatened democracy. If Marcos Jr. is declared the winner in this protest, it can be attributed to this decision by the PET to stick to its guns on the 50% threshold whatever the evidence. It will also open up other protests from election losers from all over the country. It will be a major tragedy for the Filipino nation.
It will make all our marching in the streets starting from the assassination of Ninoy Aquino in 1983 until we deposed the dictator Marcos on EDSA in 1987 an arduous but futile undertaking.
The Marcos protest has been a grueling journey for Vice-President Leni Robredo who was, after all, a reluctant candidate who accepted her duty despite seemingly hopeless odds, especially not having the money for campaign financing. She had worked extremely hard from a starting base of 1% “likely to vote” to a final victory. The financial burdens placed on her and her supporters by the Marcos protest have been awesome. The Supreme Court even disallowed some of her donors from contributing to her protest expenses; at the same time that Marcos Jr. handily paid his millions, claiming that he, haha, had raised the money with help from friends.
This same Supreme Court has just recently revived a dormant case against Philippine Airlines (PAL) which FASAP (the Flight Attendants and Stewards Association of PAL) had won twice. Suddenly, out of the blue, the SC decided the FASAP illegal dismissal case in favor of the extremely wealthy PAL controlled by Lucio Tan who had earlier been convicted for tax evasion.
A few years ago, the Supreme Court, majority of whom were appointed by then President Gloria Macapagal Arroyo, and who, it seems were recommended by celebrity lawyer Estelito Mendoza, decided to award 20% shares of San Miguel Corporation to claimant Eduardo Cojuangco, Jr., who had funded purchase of the shares with coco levy funds held in the United Coconut Planters Bank of which he was then CEO. The ponente, Lucas Bersamin had stated in his opinion that the SC had decided that there was “no evidence,” haha, that Cojuangco was a Marcos crony. Here is another case of the rich (Cojuangco) winning over the poor (coconut farmers) notwithstanding the evidence.
I wonder whether new appointments to the Supreme Court which current President Rodrigo R. Duterte will be able to appoint during his 6-year term will improve the odds of obtaining fair justice for all in the Court of Last Resort.
The SC’s decision sitting as PET on the Marcos electoral protest vs. Vice-President Leni Robredo is crucial for the survival of our electoral democracy. Validation of the Marcos protest can lead to chaos, and who knows, the end to our democratic freedoms, including the right to choose our leaders through free and fair elections. We cannot let the situation proceed on this frightening course.
 
Teresa S. Abesamis is a former professor at the Asian Institute of Management and an independent development management consultant.
tsabesamis0114@yahoo.com

How Duterte compares with Trump on dictatorial tendencies

I came upon a very interesting article in Foreign Policy Magazine written by Stephen M. Walt, a professor of international relations at Harvard University, entitled, “Top 10 Signs of Creeping Authoritarianism, Revisited”
The article poses a very intriguing question about President Donald J. Trump: “Is the president looking more like a dictator after six months in the White House?”
The piece is obviously dated because Trump has been president of the United States for over a year now and the answer to Walt’s question is, “Yes, Trump is looking more like a dictator after a year in office,” based on the top ten signs that the author listed.
But what is even more striking is how the same set of red flags apply to President Rodrigo R. Duterte.
Walt’s check list of dictatorial tendencies follows:
1. SYSTEMATIC EFFORTS TO INTIMIDATE THE MEDIA:
Trump has openly waged war against the US media, calling those critical of him “fake” and their unflattering accounts of his governance “fake news.” According to Walt, Trump has “arbitrarily excluded reporters of some organizations from press pools, press conferences and other events.”
The Duterte administration has not only excluded a Rappler reporter from covering Malacañang, the president has actually warned “corrupt journalists” that they are fair game for liquidation. Duterte has also used his presidential powers against critical media organizations like the ABS-CBN broadcast network, Philippine Daily Inquirer and Rappler, which the Securities and Exchange Commission ordered to be shut down.
2. BUILDING AN OFFICIAL PRO-TRUMP MEDIA NETWORK:
Writes Walt: “There’s little doubt Trump has tried to favor (media) outlets that embrace him, which is why the White House gave press credentials to the right-wing blog Gateway Pundit and has given the reliably wacky and pro-Trump Breitbart privileged access…there’s no sign that the president intends to build a publicly funded pro-Trump media organization. But with Fox News and Sinclair (chain of TV stations) and the various alt-right websites in his corner, he may not need one.”
Duterte has done Trump one better in this regard. Early in Duterte’s presidency, his communications chief, Martin Andanar, actively pushed for an “independent state media.” Recently, Andanar announced an agreement with the Chinese government for a “media exchange program.”
Said Andanar, “We all know that the Xinhua News Agency is one of the most successful news agencies in the world and the CCTV is also one of the largest broadcasting networks in the world; China Radio International also.”
Without any doubt, China’s control of media operations and content is something that the Duterte government is salivating over.
However, Duterte did not invent authoritarian control over media. The unlamented President Ferdinand Marcos saw this as a requisite for maintaining power and every president since then has, to some degree, taken the same attitude.
3. POLITICIZING THE CIVIL SERVICE, MILITARY, NATIONAL GUARD, OR THE DOMESTIC SECURITY AGENCIES.
In this regard Trump can learn a thing or two from the Philippines about controlling government agencies, as well as ostensibly “co-equal” bodies like the legislature and the judiciary.
While Trump can only express exasperation over his lack of control over the office of the Attorney General (the equivalent of the Philippines’ Department of Justice), Duterte and every president before him, particularly Marcos, have lorded it over lapdogs and bootlickers in every branch of government, mainly because of the Golden Rule (He who has the gold makes the rules).
Of course, it can’t be said that Trump hasn’t tried nor is he expected to stop trying anytime soon. And if you think the Republican-dominated US Senate and the House are “independent” of Trump, think again.
4. USING GOVERNMENT SURVEILLANCE AGAINST DOMESTIC POLITICAL OPPONENTS.
Here again is an area where Duterte, as well as past Philippine presidents, trump Trump in the dictatorial department, although it is said that sending the bloodhounds of the Internal Revenue Service after political pains-in-the-neck is not beyond the inclinations of White House occupants. The difference is that, in the Philippines, using government power as a sledgehammer against political opponents is SOP, while it is done with greater subtlety in the US.
5. USING STATE POWER TO REWARD CORPORATE BACKERS AND PUNISH OPPONENTS.
Walt thinks the tendency of Trump for favoritism and nepotism is “Worrisome, but not a big problem so far.” But Walt did point out that the recent tax reforms instituted by Trump and the Republicans obviously tilted heavily in favor of the super rich. He also added that “All presidents accommodate powerful interest groups that backed them, and Trump is no exception.”
But favoring cronies and relatives is considered normal in the Philippines and Duterte and his government are simply living up to that classic axiom, “What are we in power for?”
6. STACKING THE SUPREME COURT.
Appointing agreeable and compliant members of the High Court is a prerogative exercised by US and Philippine presidents, but the Philippines may leave Trump gaping with envy at the way Duterte not only thinks he can control the Supreme Court, he has openly declared that the Chief Justice is an “enemy” and should be kicked out of her job.
7. ENFORCING THE LAW FOR ONLY ONE SIDE.
Walt raises red flags here over Trump’s seeming tolerance of right wing extremism — even of outright Nazism and racism. If Walt were in the Philippines, he won’t just be raising red flags, he would be blowing the whistle, ringing the alarm bells, and sounding the sirens over the way “justice” is dispensed.
8. REALLY RIGGING THE SYSTEM.
Writes Walt about Trump: “…the demographics of the US electorate give him (and the Republican Party) a big incentive to try to stack the deck in his favor, and that incentive only increases the lower his approval ratings go. How else can one explain the transparently bogus ‘voter fraud commission,’ headed by die-hard voter suppression advocate Kris Kobach…”
Once more, the Philippines is ahead of the US in the dictatorial tendency department, although “dagdag-bawas” and “Garcification” are probably just more advanced techniques for rigging the elections that our politicians learned from America’s notorious Tammany Hall.
9. FEARMONGERING.
Both Trump and Duterte are masters at exploiting the fears and anxieties of their political base and using them to foist policies that are unreasonable and even dangerous. But every despot, going back to Hitler, Stalin, and Mao Tse-tung has used fearmongering to rouse support from the masses.
10. DEMONIZING THE OPPOSITION.
If this is an indication of a dictatorial or authoritarian tendency, then Trump and Duterte do not have a monopoly of this tactic. It seems to me that this comes naturally with being a politician. Marcos demonized President Diosdado Macapagal. President Cory Aquino demonized Marcos. President Gloria Macapagal-Arroyo demonized President Joseph Estrada. President Benigno Aquino III demonized Arroyo. And now, Duterte is demonizing Aquino and the “Yellow Horde.”
Did I miss President Fidel Ramos? Actually, he is the only one I know of who went out of his way to reconcile with the opposition, even while he too demonized his cousin, Marcos.
Walt concludes: “President Trump does not have much respect for the existing constitutional order, especially when it impinges on his personal power or threatens his own position.”
In other words, Trump has dictatorial tendencies.
If that sounds familiar, that’s because Duterte is exactly the same. To paraphrase the poet, Percy Bysshe Shelley, “When these ten signs come, can dictatorship be far behind”
 
Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.
gregmacabenta@hotmail.com

BIR collects P6 billion from excise tax on sugary drinks

THE BUREAU of Internal Revenue (BIR) collected about P6 billion from the new sugary drinks tax in the first quarter.
“Sa (for) sugar-sweetened (beverages), P6 billion ang nakolekta namin dun (we collected P6 billion),” BIR Commissioner Caesar R. Dulay told reporters on Monday, April 16.
The BIR is temporarily collecting the excise taxes for sugar-sweetened beverages (SSB) through old tax return forms, as it has yet to release the final implementing rules and regulations specific for the sugary drinks’ tax regime.
“There is a work around with reference to temporary instruction on returns to be filed using the usual payment form but eventually it will be institutionalized may formal na return na,” said BIR Deputy Commissioner Marissa O. Cabreros.
“So far the RR (Revenue Regulation) on SSB is already with the DOF; it’s being reviewed,” she added. — Elijah Joseph C. Tubayan

Government cites legal hurdles in planned EO to abolish endo

The Department of Trade and Industry says government will face legal challenges in crafting a law that will end labor contractualization.
“There simply is difficulty in crafting an EO that will not violate the current law and still meet what the labor sector wants,” Trade Secretary Ramon M. Lopez told reporters in a Viber group message.
An EO that will cease job contractualization, according to Mr. Lopez, will violate the current Labor Code which renders contracting a legitimate hiring practice. The law is implemented through the Department of Labor and Employment’s Department Order No. 174, Series of 2017.
“Finally, what is important is that the illegal practice of 5-5-5 or Endo or illegal contractualization has been stopped. I believe this is what our President promised to stop during the campaign, not legitimate contracting. This is only my view,” Mr. Lopez said. — Janina C. Lim

Smart prepaid subscribers get free one-hour daily YouTube access until July

PLDT Inc. wireless unit Smart Communications Inc. (Smart) is giving prepaid customers free access for one hour daily to YouTube until July 15.
Smart said in a statement that Smart, TNT, and Sun Cellular subscribers can watch YouTube for free for one hour daily by registering to load packages like GigaSurf99, AllOutSurf99, GigaSurf 50, AllOutSurf 30, Panalo Data 30, Panalo Combo 30, Super Combo 20, and Big Time Data 70.
Smart said that other than from YouTube, they will also offer another video service to the bundle, Access to Smart360. Access to Smart360 (http://360.smart.com.ph) is a web portal where Smart, TNT and Sun subscribers can access digital content like television series and movies. The service will also be offered free for one hour daily with registration to the load packages. Other video content providers will also be included, depending on mutually agreed terms with Smart.
Smart aims to double the number of long-term evolution (LTE) base stations to about 17,700 and increase the number of LTE-equipped cell sites to over 6,800.
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. — Patrizia Paola C. Marcelo

Peso climbs on data

THE PESO strengthened slightly against the dollar on Tuesday as the pair traded sideways on the back of strong data from the US and China.
The local currency ended Tuesday, Apr. 17 session at P52.05 against the greenback, two centavos stronger than its P52.07-per-dollar finish the previous day.
The peso opened the session slightly stronger at P52.05 versus the greenback, which was also its best showing for the day. Meanwhile, it dipped to as low as P52.11, data from the Bankers Association of the Philippines showed.
Dollars traded declined to $427.3 million from the $518.1 million tallied on Monday.
A trader said in a phone interview Tuesday, Apr. 17 that the trading session was “uneventful.”
“We traded within the range. Clearly, there’s no direction whether to move higher or lower,” the trader said.
Meanwhile, another trader attributed the sideways movement to the upbeat data from the US and China.
“The peso went sideways Wednesday, Apr. 18 as the US reported stronger retail sales Tuesday, Apr. 17 and China posting sustained growth for the first quarter this year this morning,” the trader said in an e-mail on Tuesday.
Reuters reported that US retail sales rebounded in March after three months of decline as Americans purchased motor vehicles and other big-ticket items.
Meanwhile, China’s economy grew 6.8% in the first quarter, slightly better than expected, driven by strong consumer demand, healthy exports as well as robust property investment, also according to a Reuters report.
“[These left] markets indecisive as the two world’s largest economies seemingly came unscathed despite trade war rhetoric in the past few months,” the trader added.
For Wednesday, Apr. 18, the second trader sees the peso moving between P51.95 and P52.15 versus the dollar, while the first trader gave a slightly narrow range of P52 and P52.15.
“The local currency is likely to strengthen amid expectations of stronger Eurozone inflation for March,” the second trader noted.
Investors will also look at US housing starts data was released overnight, the first trader said, noting that this may “not be essential.” — Karl Angelo N. Vidal

PSEi drops further on lingering overseas concerns

By Arra B. Francia, Reporter
THE MAIN INDEX suffered another sell-off on Tuesday, weighed down by lingering concerns on the tensions surrounding the United States and Russia.
The 30-member Philippine Stock Exchange index (PSEi) dropped 1.86% or 146.86 points to close at 7,723.39 Tuesday, April 17. The broader all-shares index likewise lost 1.57% or 75.32 points to 4,695.96.
“Philippine markets were sold down due to the tensions developing between Russia, US, and Syria. Traders weighed on weekend strikes in Syria and potential for additional US sanctions against Russia,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.
Summit Securities, Inc. Harry G. Liu, meanwhile, said that fund managers are currently digesting the effects of these geopolitical tensions to global markets, noting that the implications of the trade war between the US and China will be more cause for concern once the ongoing rift between US and Russia settle down.
“I presume that world leaders and fund managers will digest what will happen to the trade war, where will the balance come in. Everybody’s still trying to figure out what the effects will be,” Mr. Liu said in a phone interview Tuesday, April 17.
The bloodbath trickled down to all sectoral counters, with the financials counter dropping 2.26% or 45.82 points to 1,975.27. The mining and oil sector shed 2.08% or 231.35 points to 10,864.71; holding firms gave up 1.78% or 140.41 points to 7,726.81; services fell 1.76% or 28.54 points to 1,589.34; industrials went down 1.39% or 155.88 points to 11,052.50; while property declined 1.31% or 47.58 points to 3,567.38.
Declining stocks prevailed for the day at 161 issues versus 57 that gained and 34 that remained unmoved.
Value turnover picked up, ending at P7.03 billion against Monday’s P4.77 billion, after some 1.23 billion issues switched hands.
Foreign investors turned sellers, reversing Monday’s P139.71-million net purchases for net foreign outflows of P453.85 million.
Summit Securities’ Mr. Liu said the market is still looking for a support level between 7,500 and 7,700 that will hold in the medium term.
“We should see some improvements in the coming weeks…Investors are just adapting a sideline attitude, they’re waiting for the right timing to come in,” he added.
In contrast, Wall Street regained momentum overnight, with the Dow Jones Industrial Average climbing 0.87% or 212.90 points to 24,573.04. Nasdaq Composite index added 0.70% or 49.64 points to 7,156.29, while the S&P 500 also ended in the green with a gain of 0.81% or 21.54 points to 2,677.84.
Most Asian indices stayed in positive territory on Tuesday, trekking developments of its global counterparts.

Peso rises on upbeat data from US, China

By Karl Angelo N. Vidal, Reporter
The peso strengthened slightly against the dollar on Tuesday, April 17, as the pair traded sideways on the back of strong data from the US and China.
The local currency ended Tuesday’s session at P52.05 against the greenback, two centavos stronger than the P52.07-per-dollar finish the previous day.
The peso opened the session slightly stronger at P52.05 versus the greenback, which was also its best showing for the day. Meanwhile, it dipped to as low as P52.11, data from the Bankers Association of the Philippines showed.
Dollars traded slipped to $427.3 million from the $518.1 million tallied on Monday.
A trader said in a phone interview that the trading session was “uneventful.”
“We traded within the range. Clearly, there’s no direction whether to move higher or lower. We don’t have anything to go on as well today,” the trader told BusinessWorld.
Meanwhile, another trader attributed the sideways movement to the upbeat data from the US and China.
“The peso went sideways today as the US reported stronger retail sales yesterday and China posting sustained growth for the first quarter this year this morning,” the trader said in an e-mail.
Reuters reported that the US retail sales rebounded in March after three months of decline as Americans purchased motor vehicles and other big-ticket items.
Meanwhile, China’s economy grew 6.8% in the first quarter, slightly better than expected, driven by strong consumer demand, healthy exports as well as robust property investment, also according to Reuters.
“[These left] markets indecisive as the two world’s largest economies seemingly came unscathed despite trade war rhetoric in the past few months,” the trader added.

New aviation deal to allow flights between Philippines and Maldives

The Philippines and Maldives have signed an air services agreement that will allow direct flights between the two destinations.
The agreement provides an initial entitlement of 1,200 seats weekly that can be flown by each country’s designated airlines between Manila and the Maldives.
Below is the statement by the Department of Transportation (DOTr) – Civil Aeronautics Board (CAB) on the said agreement:
17 April 2018
Direct flights between the Philippines and the Republic of Maldives are now closer to reality, as the two nations have successfully negotiated an agreement on air services on Tuesday.
Air negotiation panels of the two countries met in Manila on April 16 and 17 to draft the agreement after preliminary proposals were discussed in letter exchanges throughout the past few months.
The accord allows an initial entitlement of 1,200 seats that can be flown by each party’s designated airlines per week between Manila and the Maldives. However, flights originating from or destined for points outside Manila will be unlimited, in line with the Philippines’ pocket open skies policy which promotes other international gateways away from the capital.
The Philippine air panel was led by the Department of Foreign Affairs, with representatives from the Department of Transportation, Civil Aeronautics Board, Department of Tourism, Department of Trade and Industry and the Department of Labor and Employment as members.
The Maldives delegation was composed of the chairman, the chief executive and senior officials of the Maldives Civil Aviation Authority.
A tropical nation off the southern tip of the Indian subcontinent, the Maldives is composed of around 1,200 islands, atolls, and reefs, and is known for its paradise-like resorts that attract tourists worldwide.

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