Indonesia bags Fitch rating upgrade after S&P lifts it from junk

December 22, 2017 | 12:30 am

JAKARTA — Indonesia won a second sovereign rating upgrade this year, with Fitch Ratings raising its assessment to the second-lowest investment grade, months after S&P Global Ratings lifted the nation out of junk status.

The nation’s stocks and currency rallied.

The rating on the nation’s long-term, foreign currency-denominated debt was raised one level to BBB with a stable outlook, Fitch said in a statement on Thursday.

AT PAR WITH THE PHILIPPINES
The upgrade puts Indonesia on par with the Philippines and Portugal, which received upgrades just this month.

Indonesia’s resilience to external shocks is among the key rating drivers as policy makers focus on stability, Fitch said, echoing similar comments from S&P which returned the country to investment grade in May.

These endorsements of the nation’s economic stability are likely to help President Joko Widodo as he embarks on a $62-billion borrowing plan next year.

“With US treasury yields trending higher lately, this upgrade will help limit any rise in Indonesia’s risk premium and keep yields low,” said Handy Yunianto, head of fixed-income research at PT Mandiri Sekuritas.

“We expect overall Indonesian yields to stay relatively low despite rising US yields. The pieces lined up for Indonesia on the macro front, where we see growth bottoming out while inflation is trending down with low volatility.”

Investors have been rewarded with the nation’s local notes surging 17% this year, compared with 12% for emerging Asian bonds, according to Bloomberg indexes.

The benchmark Jakarta Composite Index rallied as much as 1.1% to a record on Thursday, while the rupiah gained as much as 0.3% to 13,537 per dollar, the highest since Dec. 6, according to data compiled by Bloomberg.

FOREIGN RESERVES
Rising foreign-exchange reserves and strong economic growth are other reasons for the upgrade, Fitch said.

It expects Indonesia’s gross domestic product to rise 5.4% in 2018 and 5.5% in 2019, from 5.1% in 2017. Net foreign direct investment will cover the current-account deficit over the next few years as the ease of doing business ranking improves, the firm said.

Bank Indonesia welcomed the upgrade and said it will continue its commitment to maintaining macro-economic and financial system stability to support a strong, sustainable, balanced, and inclusive economic growth.

Moody’s Investors Service may follow the other two rating companies in upgrading the country, said Josua Pardede, an economist at PT Bank Permata. Mandiri’s Yunianto expects Moody’s upgrade as early as February.

ELECTIONS
Risks include potential emerging market pressure as the US proceeds with rate increases, Indonesia’s high dependence on commodities and high level of net and gross external debt, as well as the upcoming elections.

The possibility that political noise becomes a distraction from economic policy making in the run up to the 2018 local elections and 2019 presidential election represents a risk to the strong reform drive and could undermine domestic and foreign market sentiment, although such an outcome is not Fitch’s base case, it said.

INVESTMENTS ON A ROLL
Investment is set to gain further momentum on higher public infrastructure spending, lower borrowing costs and structural reform implementation.

The budget deficit will probably remain broadly stable at 2.7% of GDP and stay within the three percent ceiling.

Government revenue is very low; among Fitch-rated sovereigns, only four have lower government revenue as a percentage of GDP Sovereign’s exposure to banking-sector risks is limited. — Bloomberg

A guide to this year’s MMFF entries

December 22, 2017 | 12:30 am

By Zsarlene B. Chua
Reporter

Christmas in the Philippines — known for being long and festive — is never truly complete without families (the children flush with cash from their godparents and other assorted relatives) trooping to the cinemas come Dec. 25 for the annual Metro Manila Film Festival (MMFF).

The festival runs for two weeks — from Dec. 25 to Jan. 7.

Widely regarded as the country’s premiere film festival, the MMFF was established in 1974 “in recognition of the role of the film industry in providing artistic depictions of both this country’s stories and history” states the website of the Metropolitan Manila Development Authority, — better known as the MMDA — which runs the festival. But an earlier version of it was put into place in 1966 under the name Manila Film Festival, initiated by Mayor Antonio Villegas as a way of getting Filipino films into the city’s so-called “first run” theaters which showed American films back then (Filipino films were screened at second tier cinemas).

“[T]he yearly film festivals that followed popularized Tagalog films, thus convincing theater owners that these were marketable and profitable,” says the CCP Encyclopedia. “In 1975 the filmfest was expanded to include theaters and areas outside Manila and was renamed the Metro Manila Film Festival.”

Eventually, the festival spread throughout the archipelago but retained the name.

LUCRATIVE TIME OF THE YEAR
During the festival’s run, only the offical entries are shown in theaters — no foreign films are allowed to be screened — which makes it the most lucrative time of the year for local film producers. Which also means that competition to be chosen as a festival entry is fierce.

Last year, the MMFF opted not to go for the usual film franchises from Jose Marie “Vice Ganda” Visceral and Marvic “Vic” Sotto and instead went for films with a more independent bent and as a result, raked in considerably less in ticket sales than previous years: P373 million in 2016 compared to 2015’s P1.020 billion.

Still, the MMFF’s executive committee hailed it a triumph for the well-made Filipino films shown and during its awards ceremony, granted the Best Picture trophy to Baby Ruth Villarama’s Sunday Beauty Queen, the first documentary to have ever won the award in the festival’s history.

This year, people helming the festival decided to bring back the tried and true franchises, much to the displeasure of some committee members.

Upon the announcement of the first four entries (chosen based on script submission) which saw film franchises chosen over the Palanca-winning adaptation of the thriller Smaller and Smaller Circle directed by Raya Martin and Loy Arcena’s musical Ang Larawan (a film adaptation of National Artist for Literature Nick Joaquin’s play Portrait of an Artist as Filipino, with libretto and lyrics by National Artist for Theater and Literature Rolando Tinio), three executive committee members handed in their resignations: scriptwriter Ricky Lee, academician Rolando Tolentino, and broadcast journalist Kara Magsanoc-Alikpala.

“The results of the script selection speak for itself,” said Mr. Tolentino then.

The three were replaced by Quezon City Vice-Mayor Ma. Josefina “Joy” Belmonte-Alimurung, film director Maryo J. delos Reyes, and comic actor Arnel Ignacio who is also the AVP for Community Relations and Services of the Philippine Amusement and Gaming Corp.

Life went on and people behind Smaller and Smaller Circles decided to release the film on their own on Dec. 6. The backers of Ang Larawan decided to stay the course and eventually won a spot in the festival after re-submitting it as a finished film.

After all the drama, the festival is nearly upon us and here is a quick rundown of all the films the MMFF has to offer this year — in alphabetical order.

All of You
Directed by Dan Villegas

A romantic comedy about Gab (Derek Ramsay) and Gabby (Jennylyn Mercado) who met through a dating app. Despite their strong opposing views on marriage, they fell in love and decided to try being in a committed relationship. Then, after three years, the couple reevaluate the state of their relationship.

Mr. Ramsay and Ms. Mercado first hit the screens together in the 2014 MMFF entry English Only Please, which was also directed by Mr. Villegas.

MTRCB Rating: R-13

Ang Larawan
Directed by Loy Arcenas

This is the film adaptation of the musical version of National Artist for Literature Nick Joaquin’s play Portrait of the Artist as Filipino. The musical has a libretto and lyrics by National Artist for Theater Rolando Tinio and music by Ryan Cayabyab.

Set in 1941 Intramuros, it revolves around two sisters — Candida (played by Joanna Ampil) and Paula (Rachel Alejandro) — who, despite being destitute, try desperately to hold on to the only painting that their reknowned father finished in years.

Aside from being a story about the choice between ideals and pragmatism, the film is also a painting of Intramuros shortly before it became a costly casualty of the Second World War.

“I saw [the film] as a love letter to the Filipinos. The reason I wanted to do this film is because I feel like we lost so much of [the era] and I wanted to recapture it on film as a record of that era,” Mr. Arcenas told BusinessWorld during a media screening.

The film garnered a rare unanimous A grade from the Cinema Evaluation Board (CEB).

MTRCB Rating: PG

Ang Panday
Directed by Rodel Nacianceno

The umpteenth iteration of Carlos J. Caparas’ epic tale of a blacksmith-turned-savior-of-the-world sees actor Coco Martin — using his real name, Rodel Nacianceno — in his directorial debut. He also serves as the film’s executive producer and is the lead character.

The movie is about the grandson of the original Panday who discovers that he must follow in his predecessor’s footsteps and save the world after the previous Panday’s archnemesis, Lizardo (Jake Cuenca) decides to wreak havoc upon the world once again. He is then tasked to scour different worlds in order to gain the power of the legendary Panday sword.

“I wanted this film to be in touch with present-day life even if it commonly associated with fantasy… everything has to be real,” The Philippine Star quoted Mr. Nacianceno as saying at a press conference.

MTRCB Rating: G

Deadma Walking
Directed by Julius Alfonso

A film about friendship, Mr. Alfonso’s Deadma Walking is a dark comedy about Mark (Edgar Allan Guzman), a theater actor who mounts a fake but fantastic wake to fulfill the final wish of his best friend, John (Joross Gamboa), who is terminally ill (the movie’s title is a pun on “dead man walking”).

“There are a lot of films where friendship is a side story, but in this film it’s at the center,” said writer Eric Cabahug during a press conference.

“[It’s a story of how] best friends can be soulmates,” Mr. Alfonso added.

The film’s screenplay won second place at the 2016 Palanca Awards for Literature in the Screenplay Division and was also graded A by the CEB.

MTRCB Rating: PG

Gandarrapiddo: The Revenger Squad
Directed by Joyce E. Bernal

Starring comedians Jose Marie “Vice Ganda” Viceral and Daniel Padilla, and beauty queen Pia Alonzo Wurtzbach, Gandarrapiddo focuses on Gandarra, a gay superhero from another planet who is destined to save the world — unfortunately, his human form has forgotten all about his superhero identity and so the quest begins to make him remember in time to save the world.

This film marks Mr. Viceral’s return to the MMFF after 2015’s Beauty and the Bestie which featured Coco Martin, and is a follow-up to Mr. Viceral’s Super Parental Guardians which was released prior to the MMFF last year.

MTRCB Rating: G

Haunted Forest
Directed by Ian Lorenos

The only horror entry to the festival, the film tells the story of Nica (Jane Oineza), a teenager who relocates to the province after her policeman father Aris (Raymart Santiago) is reassigned. It turns out that the once quiet town they move to is now haunted by a sitsit, a supernatural being who preys on women and leaves the victim’s body in the middle of the forest.

Also in the cast are Jon Lucas, James Blake, and Maris Racal. The film is produced by Regal Entertainment, Inc., the company known for the long-running Shake, Rattle and Roll horror franchise.

MTRCB Rating: PG

Meant to Beh
Directed by Chris Martinez

This family comedy is the first film that Marvic “Vic” Sotto and Dawn Zulueta have made together in more than 30 years — their last film together was Okay Ka Fairy Ko! in 1995. Meant to Beh tells the story of a married couple who decide to separate after many years as they realized they never really loved each other. Their children then embark on a mission to get their parents to fall in love with each other — even if they are already in new relationships.

Mr. Sotto (who produces the film) has described the film “a serious film presented in a light manner,” as the film tackles a “quite serious and heavy” theme.

The film is also Mr. Sotto’s attempt “to level up in some ways and do a serious movie,” according to Interaksyon.

MTRCB Rating: G

Siargao
Directed by Paul Soriano

Known for films such as family drama Thelma (2011), and the suspense thriller Dukot (2016), Siargao marks Mr. Soriano’s first foray into the romance genre. The film revolves around Diego (Jericho Rosales), an island lover and the love interest of broken-hearted video blogger Laura (Erich Gonzales) and environmental activist and Siargao native, Abby (Jasmine Curtis-Smith) who are brought together in the eponymous island where they experience a second chance at love.

Aside from the story’s romance angle, Mr. Soriano also makes the case for environmental awareness all the while showcasing the beauty of the island that is best known for its surfing.

MTRCB Rating: PG

MetroPac Water bags P12.35-billion Iloilo project

December 22, 2017 | 12:15 am

METRO PACIFIC Investments Corp. (MPIC) on Thursday said its subsidiary has bagged the P12.35-billion project involving the rehabilitation and expansion of the existing water distribution system of Metro Iloilo Water District (MIWD).

In a disclosure to the stock exchange, the conglomerate said MetroPac Water Investments Corp. received on Dec. 20 the notice of award for the project, which also includes the operation and maintenance of the water district and the construction of wastewater facilities.

MPIC said its unit and the water district would enter into a joint venture agreement (JVA) upon completion of the post-award activities.

“A joint venture corporation shall be organized pursuant to the provisions set in the JVA. The joint venture corporation shall implement the project including the right to bill and collect tariff for the water supply and wastewater services provided to the customers in the service area of MIWD,” it added.

The project for the 25-year concession has an estimated cost of P12.35 billion. MPIC said an initial equity investment of P600 million is required next year.

The water district’s service area includes Iloilo City and seven municipalities, specifically Pavia, Oton, Maasin, Cabatuan, Sta. Barbara, Leganes and San Miguel. As of 2017, the estimated population in the service area of the water district is 844,618.

The project comes after MetroPac Water in August agreed to form a joint venture company with the Cagayan de Oro water district to undertake the supply of bulk treated water in one of Mindanao’s most populated cities.

MetroPac Water was awarded the 100 million liters per day (MLD) bulk water project in March. The project has a term of 30 years and renewable for another 20. It involves the construction of new water transmission lines and the rehabilitation of the Camaman-an reservoir.

The company also is has an 80% stake in Metro Iloilo Bulk Water Supply Corp. It invested P2.8 billion to produce a capacity volume of 46 MLD, from the previous 32 MLD.

Another one of its projects is the Maragondon Bulk Water Supply, a joint venture agreement with Lucio Tan-led MacroAsia Corp. in partnership with the Maragondon Water District.

For water distribution, MetroPac Water owns 27% of Laguna Aquatech Resources Corp. (LARC). LARC is a joint venture partnership with Equi-Parco Construction Company for the full concession of Laguna Water District.

In waste water solutions, MetroPac Water holds 65% of Ecosystem Technologies International, Inc.

MPIC, with the expertise of its unit Maynilad Water Services, Inc., has been looking to expand its water venture in the Association of Southeast Asian Nations (ASEAN) region.

For the long term, MPIC is looking to develop a pan-ASEAN water company, company Chairman Manuel V. Pangilinan had said in August.

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.

On Thursday, shares in MPIC rose 0.60% to close at P6.75 each. — Victor V. Saulon

BSP approves rules for ‘branch-lite’ units

December 22, 2017 | 12:15 am

By Melissa Luz T. Lopez,
Senior Reporter

THE CENTRAL BANK will soon allow banks to set up dressed-down branches nationwide, as the regulator eases rules on banking offices in a bid to boost financial inclusion.

In a statement, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) said they have approved the option for banks to set up “branch-lite” units, which will allow lenders to set up simplified service outlets from the prescribed brick-and-mortar space.

“A branch-lite is considered a full branch, but then the bank would have the flexibility in designing the branch. It could be the look may not be so formal, because you can’t avoid that some people may be intimidated with the look of a branch,” BSP Deputy Governor Chuchi G. Fonacier told reporters in a recent ambush interview.

For one, Ms. Fonacier said a lite branch may be set up in a marketplace, which would effectively extend full banking services within a structure that’s more open and enticing to low-income Filipinos, versus the imposing vibe of branches often seen in business districts.

Lower processing fees will also be imposed on transactions done in these smaller bank outlets.

Existing BSP rules allow banks to set up branches — which do deposit-taking, service withdrawals, and maintain complete sets of books of accounts — as well as extension offices and other banking offices, including microfinance units. However, branch-lite offices will be excluded from the computation of capital requirements.

All banks may choose to set up branch-lite units, although such plans would still have to be approved by the Monetary Board similar to proposals to open other banking offices.

Through this, the BSP hopes to bring financial services to 570 cities and towns in the country which have no access to banks.

The National Baseline Survey on Financial Inclusion released by the central bank in 2015 showed that only 43% of Filipino adults had savings, with 68% of them opting to keep their money at home rather than placing them as bank deposits.

“With simplified and more flexible provisions, banks will be better able to expand in areas which are unbanked and underserved,” the central bank said, noting that the new rules allow enough room to tailor-fit services for the low-income market.

“The banking products offered in branch-lite units shall exclude those suited for sophisticated clients with high risk tolerance,” the BSP added.

Ms. Fonacier said the branch-lite offices would likewise “level the playing field” between banks and non-bank players in serving rural areas, as it allows room for competition in serving these markets.

Another reform eyed by the central bank is the creation of basic deposit accounts which will have no maintaining balances. This is seen to serve as the entry point for unbanked Filipinos to finally get aboard the formal financial system.

Peso strengthens further on profit taking ahead of holidays

December 22, 2017 | 12:14 am

THE PESO continued its rally against the dollar on Thursday as market players took profits ahead of the holiday season.

The local currency closed the session at P50.24, climbing five centavos from the previous day’s finish of P50.29 versus the greenback.

The peso opened stronger at P50.10 versus the dollar, which was also its best showing yesterday. Its intraday low, meanwhile, stood at P50.26 against the greenback.

Dollars traded soared to $630.2 million from the $490.8 million that changed hands a session ago.

A trader said the slight uptick of the peso yesterday was due to “profit taking ahead of the holiday season despite positive news regarding the US economy.”

The Republican-controlled US House of Representatives gave final approval on Wednesday to the biggest overhaul of the US tax code in 30 years, sending a sweeping $1.5-trillion tax bill to President Donald J. Trump for his signature.

In sealing Mr. Trump’s first major legislative victory since he took office in January, Republicans steamrolled opposition from Democrats to pass a bill that slashes taxes for corporations and the wealthy while giving mixed, temporary tax relief to middle-class Americans.

The House approved the measure by 224-201, passing it for the second time in two days after a procedural foul-up forced another vote on Wednesday. The Republican-led Senate had passed it 51-48 in the early hours of Wednesday.

Meanwhile, UnionBank of the Philippines (UnionBank) Chief Economist Ruben Carlo O. Asuncion noted that yesterday’s sideways movement can be attributed to continued optimism on the local tax reform bill.

“[The] dollar was little changed, again [due to] optimism on the result of the tax reform,” Mr. Asuncion said, noting that the market is on a wait-and-see mode as President Rodrigo R. Duterte is set to veto some provisions in the first tax reform package, which was signed into law on Tuesday.

On Wednesday, Budget Secretary Benjamin E. Diokno said the Department of Budget and Management has submitted a list of provisions the president can veto in the tax overhaul, as well as in the 2018 budget.

Mr. Diokno added that Mr. Duterte can “exercise his right for line item veto” when it comes to tariff, budget and tax.

“[The foreign exchange] is still very positive in terms of its response to the tax reform not until if we see some significant parts the president will veto,” Mr. Asuncion added.

For today, UnionBank’s chief economist expects the peso to trade between the P50.05 and P50.45 level, while another trader sees the local currency moving from P50.15 to P50.35.

“The local currency is expected to appreciate further amid profit-taking due to the fact that the markets recently already factored in major possible market movers and started to sell off their positions as the year ends,” a trader said.

Meanwhile, most Asian currencies edged higher against the dollar on Thursday, with the rupiah leading the gainers in the region and touching a two-week high after Fitch Ratings upgraded Indonesia’s credit rating.

“Asian currencies are trading firmer today, led by the Indonesian rupiah which jumped after a Fitch upgrade and a strong yuan fixing earlier,” Peter Chia, foreign exchange strategist at United Overseas Bank (UOB) in Singapore, said on Thursday.

The dollar index, which measures the greenback against a basket of six major currencies, was nearly flat at 0437 GMT.

The South Korean won and the Taiwan dollar gained as much as 0.1% and 0.2% respectively. — KANV with Reuters

8990 Holdings completes 2 buildings in Tondo

December 22, 2017 | 12:14 am

8990 Holdings, Inc. is set to complete two buildings in its P8-billion residential project in Tondo, Manila, which the mass housing developer said would attract more buyers.

In a statement issued Thursday, 8990 Holdings said two out of the 13 buildings for Urban Deca Homes Manila project will be completed by the end of 2017, with another six buildings now under construction.

“We’ve proven that the moment buildings are already put up, sales performance increases as well. Once our buyers saw that the buildings are already nearing completion, we noticed a steady increase in our sales. This will definitely keep our brokers very busy this Christmas season,” 8990 Chief Operating Officer Willibaldo J. Uy was quoted as saying in a statement.

All buildings are expected to be completed by 2020. The company then expects to book P21 billion from the sale of the project’s 13,000 units.

Adjacent to Urban Deca Homes Manila is 8990 Holdings’ first foray into mall development, Deca Mall Tondo. The P452-million community shopping mall will have two floors featuring retail and food tenants.

Deca Malls Tondo will be operational by 2018, by which time units in the first three towers of the residential project will also be turned over to their owners.

“Tondo has such a tightly knit community and the people who grew up there prefer to stay there. It is also attractive to entrepreneurs and employees who have businesses and work in the surrounding areas such as Caloocan-Malabon-Navotas-Valenzuela region and surrounding areas of Manila including Divisoria, Sta. Cruz and Ermita,” Mr. Uy said.

With its development in Tondo, 8990 remains bullish on Metro Manila’s affordable housing industry. The company will be replicating Urban Deca Homes Manila in Ortigas, which will feature 24 residential buildings with a total of 18,993 units, as well as a shopping mall.

8990 saw its attributable profit fall 22% to P2.47 billion in the first nine months of 2017, from the P3.2 billion it booked in the same period a year ago as it experienced a slowdown is securing permits for projects. Still, the company expects to book P4 billion in earnings by year-end.

Shares in 8990 added 12 centavos or 1.88% to close at P6.50 apiece at the stock exchange on Thursday. — Arra B. Francia

Seaoil partners with Caltex Australia

December 22, 2017 | 12:13 am

CALTEX AUSTRALIA Petroleum Pty Ltd. is acquiring a 20% equity interest in Seaoil Philippines, Inc. in a deal that the local company said is intended to be a long-term partnership between the two independent oil players.

“We have long sought for a strategic partner to complement our capabilities and competitive advantage, and we are optimistic that Caltex Australia, whose values we share and whose operations is like ours in complexity, can help accelerate our growth,” said Seaoil Chairman Francis L. Yu in a statement.

Seaoil, which claims to be the country’s largest independent fuel player, quoted Caltex Australia Chief Executive Officer Julian Segal as saying the definitive agreement between the two “is an exciting growth opportunity” for his group.

“The fact that [Seaoil] has chosen to enter this partnership with us is a testament to the skills and capabilities we have been building over many years in our company. It also demonstrates the value that can be created from our position as an independent fuel supplier in the Asia-Pacific region,” he said.

The partnership calls for Caltex Australia to supply fuel to Seaoil through Ampol, its fuel sourcing and shipping business in Singapore. The Australian firm will also support Seaoil’s growth strategy to double its retail network and terminal storage capacity over the next five years.

“This partnership will also mean exciting times for our employees, our franchisees, distributors and customers as we leverage our partner’s scale and expertise to provide high quality, affordable and accessible fuels and lubricants to the fast growing Philippine market,” Mr. Yu said.

Caltex Australia is a 100% publicly owned company, listed on the Australian Stock Exchange under the symbol CTX. It does not share any common ownership with the local Caltex brand, which is owned by Chevron Philippines, Inc.

Seaoil said Caltex Australia’s market capitalization at $6.5 billion to $7 billion surpasses by more than 70% the combined figure of locally listed Pilipinas Shell Petroleum Corp. and Petron Corp. It also supplies a third of Australia’s transport fuel needs under the Caltex brand and has an extensive terminal and retail network, including 76 depots, 12 terminals operated by Caltex, five major and bunker pipelines, nine airport jet fuel supply sites, and over 1,900 retail sites.

In 2016, Caltex Australia sold over 16 billion liters of transport fuels and supply in excess of 70,000 commercial customers. It also has operations in New Zealand under the Gull brand and Singapore under the Ampol brand.

Seaoil has a 6% market share in the Philippines and is a pioneer in alternative fuels, including bioethanol gasoline and biodiesel. — Victor V. Saulon

ERC commissioners ordered suspended

December 22, 2017 | 12:11 am

THE Office of the Ombudsman has ordered the suspension of top officials of the Energy Regulatory Commission (ERC) in connection with “unwarranted benefits” to the Manila Electric Co. (Meralco) and its affiliates in the course of their securing Power Supply Agreements with the agency.

ERC Commissioners Gloria Victoria C. Yap-Taruc, Alfredo J. Non, Josefina Patricial A. Magpale-Asirit, and Geronimo D. Sta. Ana were ordered suspended for one year without pay for violating Section 3(e) of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act.

Dismissed chairman and CEO Jose Vicente B. Salazar was also ordered suspended, in lieu of which, the Ombudsman said in its decision, “the penalty is converted into a fine in the amount equivalent to respondents’ salaries for six months payable to the Office of the Ombudsman and may be deductible from respondents’ retirement benefits, accrued leave credits or any receivables from their offices.”

In that decision dated Sept. 29 and released this week, the Ombudsman said the extension of a deadline by the ERC in its Competitive Selection Process (CSP) gave leeway for seven distribution utilities (DUs) affiliated with Meralco to bag “lucrative power supply agreements without complying with the mandated CSP.”

“Their gross inexcusable negligence led to the circumvention of the government policy requiring CSP, and denied the consumers the ‘opportunities to elicit the best price offers and other PSA (power supply agreement) terms and conditions from suppliers,’” the Ombudsman said.

The Ombudsman said the extension was done “purportedly to pursue the government’s policy of infusing competition and implementing CSP in PSAs and PSCs (petroleum service contracts), but which, as evidence shows, digresses from said policies to favor companies.”

Lawyer Neri J. Colmenares, a petitioner in this case, said in an interview with DZMM that the officials so charged are now deemed “suspended.” With the Ombudman’s decision, Mr. Colmenares said, “Do not ever rush the approval of these contracts kasi wala na kayong poder to issue that (because you don’t anymore the authority to issue that)….”

But Floresinda B. Digal, ERC spokesperson, said when sought for comment: “Considering that the ERC is under the Executive Department, the Commission will be seeking guidance from the Office of the President relative to the recently released Ombudsman decision, especially that this will have a significant impact not only to the electricity consumers but to the economy as well.”

Also sought for comment, Presidential Spokesperson Harry L. Roque, Jr. said “the day-to-day affairs of the Energy Regulatory Commission will continue. Although, if all the commissioners…are suspended, then they cannot agree on policy issues because they are (a) collegial body according to the EPIRA (Electric Power Industry Reform Act) law.” — Minde Nyl R. dela Cruz with Arjay L. Balinbin

Palace: Action being taken on Davao Boys in Reuters story

December 22, 2017 | 12:10 am

MALACAÑANG ON Thursday, Dec. 21, said the government has already taken action regarding the so-called Davao Boys of police officers in Quezon City who were the subject of a special report by Reuters on the Duterte administration’s drug war.

“There is a writ of amparo issued by the Supreme Court against the police station (No. 6 of the Quezon City Police District), so the response is we’re not taking it sitting down,” Presidential Spokesperson Herminio Harry L. Roque, Jr., said at a press briefing on Thursday.

He added: “The government, when that petition for Amparo was filed in the Supreme Court, did not oppose the petition and that’s why the Supreme Court issued the Writ of Amparo.”

On the other hand, Philippine National Police (PNP) Chief Director-General Ronald M. dela Rosa said in an interview with reporters that squad commander Lito Patay has been reassigned to another province to make him eligible for promotion. The Reuters story identified Mr. Patay as the leader of the Davao Boys who presided over the fierce anti-drug campaign in parts of Quezon City on the watch of Station No. 6.

A writ of amparo, as defined by Section 1 of the Rule on the Writ of Amparo, “is a remedy available to any person whose right to life, liberty and security is violated or threatened with violation by an unlawful act or omission of a public official or employee, or of a private individual or entity.”

“A writ of amparo will not provide for criminal sanctions against the respondents. What it will do is it will prompt the respondents to investigate, and the PNP right now is under obligation to investigate and confirm the reports of the petitioners in that writ of amparo,” Mr. Roque explained.

He added that, “if the investigation concludes that the police operation complained about was pursuant to the law, then the President will stand by the policemen.”

“But as in the case of Kian (delos Santos’s killing on Aug. 16), if it is proven that there was excessive use of force and that the use of force is tantamount to murder, then the President will order their prosecution.”

“Now, the nature also of the writ of amparo is that the court itself will inquire from the PNP regularly what is the status of the investigation, what can you tell us about the truth or falsity of the claims made by the petitioners,” Mr. Roque also said.

“I stress, this writ of amparo was precisely against the same police station mentioned by this reporter,” He said, too, regarding the Reuters story written by Clare Baldwin and Andrew R.C. Marshall.

For his part, Mr. Dela Rosa stood by Mr. Patay, saying that Station No. 6 in Quezon City had Metro Manila’s most serious drug problem and he personally sent Mr. Patay there because he was a “very professional” and “very dedicated” officer capable of dealing with it.

Mr. Patay handpicked and headed a unit of 10 men who called themselves the Davao Boys, which racked up the highest number of kills in Quezon City, a violent front line in Mr. Duterte’s ferocious anti-narcotics campaign.

“He (Mr. Patay) was chosen because I have big trust in him, he has the balls to face the problems. He will fight,” Mr. Dela Rosa told reporters.

“He is not an officer who is after money, who will be assigned in an area only to collect money, he is not that kind of officer. He has focus. I assigned him there because I know he can deliver.”

Asked about the high rate of killings in areas under Mr. Patay, he said deaths were inevitable where the drugs trade was rampant.

“So what’s the problem? The worst drug problem is there in station 6, so if you hit the problem head on, you face the problem head on then, there would always result in casualties,” Mr. Dela Rosa said.

He said Mr. Patay had been “given a free hand” at Station 6 and had command responsibility over his operations.

“It is his own call whatever he does there, he has to solve the drug problem,” Mr. Dela Rosa said. — reports by Arjay L. Balinbin and Reuters

One telco eyed for remaining frequencies

December 22, 2017 | 12:09 am

THE DEPARTMENT of Information and Communications Technology (DICT) is looking at allocating the remaining telco frequencies to one player or consortium of players in order to make this third party compete with PLDT, Inc. and Globe Telecom, Inc.

“Before, there were many frequencies, only one or two apply, so you can allocate, without going into a contest. But now, there are a few frequencies left, if many apply, then we’ll have a ‘beauty contest.’ We want to allocate the remaining frequencies to just one telco. If they still split it, Globe (and PLDT) might buy them,” DICT Officer-in-Charge Eliseo M. Rio, Jr. told reporters on Wednesday.

An official of the Philippine Competition Commission (PCC) said last week that based on the commission’s data, only 12.8% of the spectrum will be available for a potential third player.

PLDT and Globe acquired the coveted 700-mHz band from San Miguel Corp. (SMC), which last year sold off its telco assets.

Mr. Rio said they are targeting to allocate the remaining frequencies by the first quarter next year.

President Rodrigo R. Duterte has instructed the DICT and National Telecommunications Commission (NTC) to fast-track the application of a third telecommunications provider in the Philippines, to “be up and about by the first quarter of 2018.”

Malacañang has identified China Telecom Corp. Ltd. as the Chinese government’s choice to enter the Philippine market.

However, China Telecom’s local partner has yet to emerge. The law only allows for maximum 40% foreign ownership for telco businesses.

Philippine Telegraph and Telephone Corp. (PT&T) Chairman Salvador B. Zamora told BusinessWorld last week that they are in talks with China Telecom, adding that the Chinese company is also in talks with other local providers.

Among other local providers are NOW Corp. and IP Converge Data Services, Inc.

Mr. Rio said in a social media post over the weekend that no matter how “financially and technically robust” the third player may be, the frequencies available are not comparable to the ones allocated to PLDT and Globe, and said that possible areas in which the third player can compete include building cellphone tower for lease to other companies including the incumbents, and fixed-line Internet service to underserved areas.

Mr. Rio also said on Wednesday that companies from Japan, South Korea, China, Australia, and the United States are interested in entering the Philippines. He declined, however, to name these companies while they have not yet publicly declared interest.

Also on Thursday, Presidential Spokesman Harry L. Roque, Jr. assured that government regulators are beefing up cybersecurity measures amid the anticipated entry of China Telecom.

“They should not worry because the government is already worried,” Mr. Roque told a regular news briefing.

Last month, President Rodrigo R. Duterte offered Beijing a chance to challenge the dominant carriers PLDT, Inc and Globe Telecom, Inc. Beijing has chosen China Telecom, which needs to partner with a Philippine company in line with the constitutionally prescribed 40% cap on foreign ownership of domestic telecoms firms.

PLDT announced it had allotted a record sum of at least P50 billion ($997 million) for capital expenses next year as it prepares to take on a competitor.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo with a report by Reuters

Sison twits Duterte’s ‘flip-flop’ on truce

December 22, 2017 | 12:08 am

COMMUNIST UNDERGROUND LEADER Jose Maria Sison chided what he called President Rodrigo R. Duterte’s flip-flopping on the matter of observing a truce with communist rebels.

Mr. Duterte had declared a unilateral cease-fire, despite having issued two proclamations classifying the rebels as terrorists and canceling peace negotiations.

“Those who will dance to Duterte’s flip-flop would only be fooled,” Mr. Sison said in an interview with Kodao Productions on Wednesday, Dec. 20.

Nevertheless, he also said: “If the AFP and the PNP will not attack, they will not be ambushed by the NPA (New People’s Army).”

“The NPA must therefore be alert against treachery, attacks and occupation of communities by the enemies,” Mr. Sison added.

The government’s unilateral cease-fire takes effect 6 p.m. of Dec. 23 to 6 p.m. of Dec. 26, and 6 p.m. of Dec. 30 to 6 p.m. of Jan. 2, 2018.

In response, Presidential Spokesperson Herminio Harry L. Roque, Jr. said: “We should be thankful that the President is pushing through with the unilateral cease-fire altogether, (because he) could have ignored it completely and not declared anything.”

“I felt that it was a right decision because, finally, I personally felt it’s Christmas with the announcement. If Joma Sison did not feel any spirit of Christmas because of the (suspension of military operations), well, I feel sorry for him. That’s what happens when you’re not here in the Philippines anyway,” Mr. Roque also said of the exiled communist leader.

For his part, Presidential Adviser on the Peace Process Jesus G. Dureza said in a statement on Thursday that Mr. Duterte’s unilateral declaration “is a bold step. It is a clear indication of his unwavering desire to bring sustainable and durable peace in the land despite the cancellation of peace negotiations with the CPP/NPA/NDF.”

In its statement, the Department of National Defense said: “We urge those who are waging war against our sovereign government and inflicting harm on the Filipino people to spend this period in reflection and seriously reconsider returning to the fold of law.”

Also on Thursday, House Speaker Pantaleon D. Alvarez in a statement noted that the Makabayan bloc in the House of Representatives “has not accessed funds from Congress at all.”

Mr. Alvarez said in his statement: “In the first place, the so-called Makabayan bloc consisting of party-list groups identified with the mainstream Left has not accessed funds from Congress at all. We do not know where they get funds for projects for their constituents. All we know is that the communist rebels with whom they have an ideological and political affinity impose what’s known as ‘revolutionary taxation’ in areas where they operate.”

He added: “According to the military, in southern Mindanao alone, the NPA collects close to P500 million yearly in revolutionary taxes. This is plain and simple extortion. We have not heard from the Makabayan bloc a clear and unequivocal condemnation of revolutionary taxation, leading us to suspect that they either directly or indirectly benefit from it.”

The Makabayan bloc in response said: “We in the Makabayan bloc, detest the malicious and dangerous red-tagging by Speaker Pantaleon Alvarez. It is clear that the House leadership just wants to divert attention from the now awakened issue of thriving pork barrel in Congress.”

“Speaker Alvarez should just stick to the issue of pork barrel at hand and not try to use a smokescreen or flagrantly justify the continued proliferation of patronage politics.” — reports by Arjay L. Balinbin and Minde Nyl R. dela Cruz

Infra program on track; north rail line due in Q1

December 22, 2017 | 12:08 am

THE GOVERNMENT’S infrastructure timetable is on track with more project launches expected in the first quarter, Finance Secretary Carlos G. Dominguez III said.

His remarks follow groundbreaking on the first “hybrid PPP (Public-Private Partnership),” the Clark International Airport expansion project, which got off the ground with initial funding from the government, with the PPP mode to be employed in the operations and maintenance portion of the project.

“This shovel-ready project was approved in the first 18 months of the Duterte administration. In fact, the formal approval came only six months ago,” Mr. Dominguez III said in a speech during the groundbreaking ceremony of the Clark Airport expansion project on Wednesday.

The government tweaked the pure PPP model, which it said was too slow, by funding the initial stages of the project. It also wants to tap more official development assistance (ODA) to finance an ambitious infrastructure-building drive.

“In the previous administration, the projects of PPP took an average of 30 months from conception to start of implementation. It took the Cavite-Laguna Expressway 50 months to conceptualize and begin the implementation,” Mr. Dominguez said.

“This will not happen in the case of the many infra projects that will commence in the Duterte administration in the next few months. This administration brooks no delay in building the projects that the people need and the public deserves,” he added.

Among projects to be rolled out in the first quarter next year are the Malolos-Clark Philippine National Railways North line, the Quezon City and EDSA portion of the Metro Manila Bus Rapid Transit system, and the first phase of the Mindanao Rail Project.

Socioeconomic Planning Secretary Ernesto M. Pernia has said that the government will be able to implement about 12 big-ticket infrastructure projects next year.

This year, the National Economic and Development Authority (NEDA) Board approved 14 new projects, with most implemented through hybrid PPP mode.

Under the new government, 36 projects were approved by the NEDA Board, worth P1 trillion.

Mr. Pernia also said that he expects another 15 project approvals in 2018.

The government aims to spend about P8.4 trillion in infrastructure until 2022, which is expected to boost economic growth by seven to 8% over the same period, while providing more jobs to cut the unemployment rate to three to 5% from 5.5% in 2016, and bring down the poverty rate to 14% from 21.6% in 2015. — Elijah Joseph C. Tubayan

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