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PHL economy likely slowed in Q2 — Moody’s

By Elijah Joseph C. Tubayan, Reporter
PHILIPPINE economic growth may have decelerated in the second quarter weighed down by rising inflation despite robust consumption and investment, Moody’s Analytics said.
The sister company of debt watcher Moody’s Investors Service said gross domestic product (GDP) likely logged a 6.6% growth rate during the April to June period, slower than the 6.8% recorded in the first three months of the year, and a tad slower than the upwardly revised 6.7% in the second quarter of 2017.
It is also below the government’s 7-8% full-year target.
“GDP growth in the Philippines also likely softened a little. Consumer spending is healthy, thanks to steady inflows of overseas worker remittances and a firm labour market. External demand has remained solid but high base effects are at play,” Moody’s Analytics said in its Asia-Pacific Economic Preview dated Aug. 1.
“Consumer spending is healthy, thanks to steady inflows of overseas worker remittances and a firm labor market. Investment has been robust and is likely to remain strong, as the government boosts infrastructure development,” the report stated.
Central bank data showed April and May remittances grew 12.7% and 6.9% to $2.347 billion and $2.469 billion, respectively. Unemployment rate, meanwhile, slightly declined to 5.5% from 5.7% at the start of the second quarter.
Spending for infrastructure and other capital outlays, meanwhile, surged 48.63% to P195.6 billion in the second quarter — a notch higher than the P194.82 billion target for the period — according to data from the Department of Budget and Management.
“External demand has remained solid. Although these factors likely supported 6.6% GDP growth in the second quarter, rising price pressures will need watching,” Moody’s said.
Exports however declined 8.5% and 3.8% to $5.11 billion and $5.76 billion in April and May respectively, Philippine Statistics Authority (PSA) data showed.
Headline inflation hit a five-year high at 5.2% in June, and the six-month average at 4.3% — well above Bangko Sentral ng Pilipinas’ (BSP) 2-4% target band.
BSP Governor Nestor A. Espenilla had already said that the Monetary Board is considering “strong follow-through monetary adjustment” amid heightened inflation expectations with continued pressure on the peso.
The PSA is scheduled to report second-quarter GDP growth on Aug. 9, the same day of the BSP’s rate-setting Monetary Board meeting. The PSA will release July inflation data on Aug. 7.
“Among other things, it is likely that the sharp acceleration in inflation dampened spending and thereby GDP growth in Q2. Once the temporary disruption of the tax reforms have past, 7% GDP growth looks achievable considering the increase in infrastructure spending,” Veasna Kong, economist from Moody’s Analytics, said in an email when asked for further comment.
The Tax Reform for Acceleration and Inclusion law added and raised taxes on various items, while stripping out value-added tax exemptions and lowered personal income taxes, among others.

Fiscal deficit seen to fall below target this year

THE Philippines is expected to realize a fiscal deficit of 2.9% of gross domestic product (GDP) this year — slightly below the government’s 3% target — due to the sharp uptick in infrastructure spending, according to HSBC Global Research.
If realized, it would be greater than the actual budget gap of 2.2% of GDP logged in 2017.
“The Philippines has gone from an average deficit of -1.8% of GDP in 2007-2016 to 2.2% in 2017 and is on track to realize 2.9% in 2018 — with most of the increase going to infrastructure,” HSBC said in a research note dated July 31.
The Duterte government has pledged to spend about P8 trillion for infrastructure projects in a bid to grow the economy by 7-8% through 2022.
However, the fiscal deficit is below target so far, at P193 billion in the first semester, 25% higher than the P154.5 billion recorded in the same period last year, but 27% lower than the P264.3 billion target due to better-than-expected revenues.
HSBC warned of further inflationary pressures stemming from the government’s plan to widen the deficit target to 3.2% in 2019.
“The main takeaway is that further fiscal impulse should be expected into 2019, adding to what is already strong growth. Continued fiscal stimulus is likely to slightly delay the return of inflation to the mid-point of the BSP’s target, among other factors, which is partly why we expect the BSP (Bangko Sentral ng Pilipinas) to take decisive, pre-emptive action in its upcoming meeting,” HSBC said.
HSBC said it expects the central bank to raise policy rates by 50 basis points during its meeting on Aug. 9, which would be on top of the two 25 basis point hikes the BSP made in May and June.
The Development Budget Coordination Committee in its meeting last month widened the budget shortfall for 2019 as it seeks to accelerate spending for infrastructure and social programs.
The BSP expects inflation to reach 4.5% this year, and to return to its 2-4% target band by 2019.
Moreover, HSBC also noted the plan to shift to a Federal form of government and the Supreme Court’s ruling to increase internal revenue allotments to local government units (LGUs) may pose as a downward risk to the infrastructure plan.
“(A) recent Supreme Court ruling to increase national revenue allotments for local government units and/or an abrupt shift to Federalism may curb government spending on infrastructure projects in the near-to-medium term,” the report read.
Socioeconomic Planning Secretary Ernesto M. Pernia earlier admitted that such disruption may be possible due to the change in government structure.
Meanwhile, the government will file a motion for reconsideration on the high court’s order, seeking to clarify which taxes will be covered.
The court on July 23, ordered the “automatic release without further action” of LGUs’ “just share” of internal revenues that includes all national government taxes, not just the from Bureau of Internal Revenue, and that the government should implement the ruling prospectively.
Budget Secretary Benjamin E. Diokno said complying with the ruling would cost P160 billion more to the government, but noted that it could devolve some functions from the national government to the local government, to keep the fiscal deficit intact. — E.J.C. Tubayan

DoJ to consider extradition of Napoles, kin upon request of US court

JUSTICE Secretary Menardo I. Guevarra on Friday said his department will consider extradition, upon request by a US court, of Janet Lim Napoles and five other relatives who have been indicted in the United States in connection with a $20-million money laundering scheme.
He also confirmed the Bureau of Immigration records which show that a daughter of Ms. Napoles, Jeane Catherine Napoles, left the country on July 27.
Besides Janet Lim Napoles, Jo Christine Napoles, James Christopher Napoles, Reynald Luy Lim and Ana Marie Lim are still in the Philippines.
“Should the US request their extradition and they are not facing any court cases here, we will evaluate and commence the appropriate proceedings,” Mr. Guevarra said in a text message to reporters.
Article 11 of the Philippines’ extradition treaty with the US states that “The Requested State may postpone the extradition proceedings against a person who is being prosecuted or who is serving a sentence in that State.”
In the same provision, it was noted the Requested State may temporarily surrender the person to the Requesting State for the purpose of prosecution.
At present, the Napoles matriarch has pending cases at the Sandiganbayan. Should an extradition request be granted by the DoJ, the US government will have to wait until the conclusion of the case or a sentence, if any, has been served.
“(C)onsidering that an indictment has already been made in US courts, the US government has ways of tracking down the defendants anywhere, including tapping the assistance of the Interpol,” Mr. Guevarra said. — Charmaine A. Tadalan

Interviews for applicants of chief justice set Aug. 16

By Gillian M. Cortez
THE Judicial and Bar Council (JBC) will hold public interviews for applicants of the position of chief justice on August 16, the Supreme Court announced on Friday.
“Public interviews for all nominees for the post of Chief Justice on Aug 16, 9AM onwards at the Division Hearing Room, SC New Building. Proceedings will be live-streamed by the PIO,” the SC said on its Twitter.
SC Associate Justices Lucas P. Bersamin, Teresita L. De Castro, Diosdado M. Peralta and Andres B. Reyes Jr. are part of the five nominees for the position of chief justice. Davao Regional Trial Court Judge Virginia Tehano-Ang is the only nominee outside the SC.
Acting Chief Justice Antonio T. Carpio has declined his nomination, which had been by the Integrated Bar of the Philippines and by retired chief justice Hilario G. Davide, Jr.
In a media briefing last Tuesday, SC Spokesperson Theodore O. Te said Mr. Bersamin got the most votes for the chief justice position from the members of the SC. Mr. Bersamin got 10 votes while his fellow justices Ms. De Castro and Mr. Peralta got nine votes each. Mr. Peralta got two votes.
The JBC opened the position of chief justice on June 25. Deadline of application was July 26.
Former chief justice Maria Lourdes P.A. Sereno was removed through quo warranto last May 11, as rendered final on June 19 by the SC.
President Rodrigo R. Duterte must appoint a new chief justice within 90 days of the post’s vacancy.

Senate bill filed on benefits for child development workers

By Camille A. Aguinaldo, Reporter
SENATOR Leila M. De Lima has filed a bill creating a magna carta law for about 50,000 child development workers (CDWs) in the country.
Senate Bill No. 1894, filed on July 30, provides child development workers security of tenure and social protection measures in times of sickness, disability or retirement.
“With millions of our youth dependent on them, it is high time for government to recognize their important role in society and grant them as much support as possible to ensure that they are cared for the way they care for our young,” said Ms. De Lima, who chairs the senate committee on social justice, welfare, and rural development.
The bill proposes at least one permanent position each for CDW I and CDW II in all child development centers nationwide.
It also calls for the creation of a special personnel selection board tasked to ensure that qualified CDWs are assigned in every center.
The proposed measure further ensures CDWs are provided with overtime pay, hazard allowance, subsistence allowance, free legal services, health benefits, as well as access to livelihood, loans and grants.
CDWs are also given access to continuing education, skills training and other knowledge enhancement programs that will be equivalent to formal or academic training units.
“These workers, exercising special parental authority over children under their care, play a crucial role in the development of the minds of these children, thereby requiring a commensurate response from government in ensuring that their work conditions are ideal and their needs are met,” Ms. De Lima said.

Palace: Death penalty up to Senate

By Charmaine A. Tadalan
MALACAÑANG on Friday said the reimposition of capital punishment is up to the Senate, following the Vatican’s move to declare death penalty as “inadmissible.”
“I think the matter of the death penalty is in the hands of the senators now. So we leave it to the Senate whatever decision they may have. The President would still try gentle persuasion but it’s really a decision of the senators now,” Presidential Spokesperson Harry L. Roque, Jr. said in a press briefing.
He added, nevertheless, that the death penalty on drug-related offenses and other heinous crimes, such as murder and rape, remains a priority of the Duterte administration.
The House of Representatives in March 2017 passed on third and final reading the measure imposing capital punishment. Said bill is now with the Senate. However, all Senate bills relating to the imposition of death penalty remain pending at the committee level.
Senate President Vicente C. Sotto III, for his part, said he will find a common ground to push for the proposed measure.
“Let me think it over. I’ll try to find some kind of a compromise,” Mr. Sotto said in a phone message to reporters Friday. “But I have a formula ready if death penalty for high level drug traffickers is not possible.”
On the other hand, Senate Minority Leader Franklin M. Drilon said, “There is no death penalty vote in the Senate. It will die if put to a vote today. Malacañang knows this. I do not think they will waste their political capital on the death penalty bill. Thus, the decision to leave to the senators the decision to approve or junk the measure.”
Senator Francis N. Pangilinan said Liberal Party senators “oppose the restoration of the death penalty. We do not see it as a deterrent to crime.”

Palace: Carandang’s dismissal up to incoming Ombudsman Martires

By Charmaine A. Tadalan
MALACAÑANG on Friday urged incoming Ombudsman Samuel R. Martires to “immediately” implement the dismissal order on Overall Deputy Ombudsman Melchor Arthur H. Carandang.
“Well, as far as I know… it is the OP (Office of the President) that should also implement that but we leave it to the incoming Ombudsman how it will be implemented,” Presidential Spokesperson Harry L. Roque, Jr. said in a press briefing.
“We will await Ombudsman Martires’s assumption into his new office and we would hope that decision be executed as soon as possible,” he added. The President last week announced the appointment of Mr. Martires, succeeding retired Ombudsman Conchita Carpio-Morales.
Malacañang, in a decision dated July 30, ordered Mr. Carandang’s dismissal for making public statements on an ongoing investigation on President Rodrigo R. Duterte’s wealth and disclosing related confidential information.
Mr. Roque said Mr. Carandang can avail himself of “judicial review,” but maintained the order was “founded on facts and law.”
“Clearly, he violated the Anti-Money Laundering Act himself when he made public certain documents, which was later on confirmed by AMLC not to be accurate,” Mr. Roque said.
“So it was really ‘tsismis’ (gossip) on a matter that should have been handled on a confidential basis, and I think that merits the order of dismissal,” he added.

Duterte on kidnapped OFWs in Libya: ‘I will send the frigate’

By Camille A. Aguinaldo, Reporter
PRESIDENT Rodrigo R. Duterte on Friday said the Philippines will send two warships to Libya in efforts to secure the release of three kidnapped Filipinos and a South Korean national in the North African country.
South Korea on Thursday has deployed its own warship, the 4,000 tonne Munmu the Great, to Libya in an apparent show of force.
“The Koreans (have) — nagpadala ng barko doon (They sent ships there). You know I’m not joking, magpadala rin ako (I will send, too). If they begin to hurt the three Filipinos there, I will send the frigate,” he said in his speech during the inauguration of the Northern Mindanao Wellness and Rehabilitation Center in Bukidnon.
Mr. Duterte said he will raise the matter in his command conference next week. He further plans to direct members of the Cabinet to “raise the bar higher,” especially on anti-piracy measures.
“I’d like to make (the) announcement in the next Cabinet meeting and the command conference. I want you to come up with modality raising bar higher so — I cannot swallow the — ‘yung mga pirata pasabugin na ninyo (bomb the pirates),” he said.
According to reports, three Filipino engineers and a South Korean national working as technicians at a water plant in Libya were kidnapped early July. Risks for foreign workers have been high in Libya due to the presence of various armed groups, including Islamist militants linked to Al Qaeda and the Islamic State.
A video shared on social media last week showed the four kidnapped workers with an armed guard seen behind them. Their captors remained unidentified.
“Kayo ang putulan ko ng ulo… Trabahante lang sa barko tapos kidnapin nila (It’s your heads I will behead….They are just workers then they are kidnapped),” Mr. Duterte said.
Foreign Affairs Assistant Secretary Elmer G. Cato said there are continuing efforts by the Department of Foreign Affairs to ensure the kidnapped workers’ “safe and early release.”

Senator urges House bill on free Wi-Fi, clean restrooms in transport terminals

SENATOR Grace Poe-Llamanzares in a statement on Friday urged the House of Representatives to approve a counterpart measure on her bill for clean restroom facilities and free internet access in transport terminals.
Ms. Poe cited Senate Bill 1749 or “Act to Improve Land Transportation Terminals, Stations, Stops, Resto Areas and Roll-on/Roll-off Terminals” as having been approved on third and final reading last week.
“The Senate has done its part, we hope the House will pass a counterpart measure, so that the public can be assured of a worthwhile experience when traveling using our terminals,” she said in her statement.
The bill also mandates that terminals must have separate lactating stations for breastfeeding mothers.
The Senate bill further instructs the Department of Information and Communications Technology, in coordination with the Department of Transportation and other concerned agencies to provide free internet access in the terminals.
The senator also noted that several bills seeking the provision of hygienic public restrooms in transportation terminals are pending at the House.
Ms. Poe said that when her bill becomes law, she would ensure adequate funding for clean toilets and free Wi-Fi service in transport terminals.

Special envoy in shortlist for WHO Western Pacific regional director

By Camille A. Aguinaldo, Reporter
SPECIAL Envoy for Global Health Initiatives and physician Susan P. Mercado is among the official list of nominees to become the World Health Organization (WHO) Western Pacific Regional Director,the Department of Foreign Affairs said on Friday.
In a statement, the DFA said Dr. Mercado is among four nominees in the list, the others being from Malaysia, Japan and New Zealand.
“The acceptance of Dr. Susan P. Mercado’s nomination by the WHO is proof of her expertise and experience in th field of public health, which was evident when President Rodrigo Duterte appointed her as Special Envoy this year. We wish her all the best in her candidature,” Foreign Affairs Secretary Alan Peter S. Cayetano said in a statement.
The new Western Pacific Director will be elected during the WHO’s regional consultative meetings of the Western Pacific scheduled in Manila in October.
In May, the Philippines nominated Dr. Mercado for the position, citing her track record in the field of public health. If named to the position, she will be the first woman to head the Western Pacific Regional Office (WPRO).
Dr. Mercado has worked for the WHO for more than 15 years, serving as the Director for Noncommunicable Disease and Health, and Regional Adviser for Health Promotion under WPRO. She was also the Team Leader of the organization’s Tobacco Free Initiative and Urban Health Equity of the WHO Kobe Center in Japan.
Prior to her work in WHO, she was an undersecretary and chief of staff in the Department of Health (DoH). She obtained her philosophy undergraduate degree (magna cum laude) and her doctor of medicine and master in public health degrees at the University of the Philippines.
“As the Philippine candidate, I am campaigning on a platform of responsiveness and empowerment. I believe that being approachable and accessible is the key to effective leadership,” Dr. Mercado said in a statement.
“WHO can do a better job in enabling self-determination and creating new spaces in public health discourse and governance where member states can freely discuss how best to effectively optimize and share resources in ways that are culturally appropriate and sensitive to local contexts,” she added.

PHL’s top diplomat hits back at ex-president over maritime dispute

By Camille A. Aguinaldo, Reporter
THE country’s top diplomat took to social media on Friday to respond to recent statements against him by former president Benigno S.C. Aquino III over the issue of transparency on the South China Sea issue.
In an open letter posted on Facebook, Mr. Cayetano lamented that the former president “chose to play with words” and compared the issue with their hairstyles. “While we both lost some of our hair, your administration lost control of Scarborough and a great opportunity to expand tourism, infrastructure and agriculture,” Mr. Cayetano said.
“We also lost many opportunities for cooperation in fields like science and technology, protection of the environment, among others, all because of the approach you, together with former Sec. (Albert F.) Del Rosario and Senator (Antonio F.) Trillanes (IV), chose to adopt and implement,” he added.
Mr. Aquino earlier criticized the Foreign Affairs Secretary over the Duterte administration’s lack of disclosure regarding its responses on China’s militarization activities in the disputed waters. He later called on Mr. Cayetano to be transparent with his politics as they were with their “hairstyle.”
Mr. Cayetano on Friday then listed 11 questions which revolved around the Aquino administration’s response regarding the standoff between Chinese and Philippine ships in Scarborough Shoal back in 2012. He said he hoped the former President would answer the questions to “help enrich public discussion on the issue.”
“How did we lose control of Scarborough shoal in 2012 during your watch? Who made the decision to end the stand-off by ordering Philippine ships to leave, and on (whose) advice?” he said.
He also questioned the involvement of Mr. Trillanes during the standoff and the latter’s refusal to disclose the “purpose and nature of his trips” to China as emissary.
Back in 2012, a Philippine Navy ship was about to apprehend Chinese fishing boats poaching in Scarborough Shoal when two Chinese surveillance ships blocked them. The surveillance ships placed themselves between the Philippine warship and the Chinese fishing vessels, preventing the Filipino Navy from making arrests.
“What exactly was Sen. Trillanes (‘s) role and mandate? He made 16 trips to China as your emissary. Where are the reports and what were the agreements reached?” Mr. Cayetano said.
Mr. Cayetano also asked about Mr. Aquino’s discussion with then United States President Barack Obama and whether there was any commitment he secured from the US on dealing with the maritime issue.
“(Mr. Obama) reportedly affirmed to Japan that the mutual defense treaty will be put into action if the Senkaku Islands are threatened. Did Mr. Obama tell you that the US does not get involved with territorial disputes like in the WPS (West Philippine Sea)? How did you respond to that?” he said.
He also asked if the Aquino administration had plans or proposals to explore oil and gas in the West Philippine Sea.
“Our people await your response to these questions in earnest, to be fully informed finally of the background of our complicated situation. Your response will help us decide on how to proceed further in shaping our policy with China,” Mr. Cayetano said.
“If, indeed, transparency is important to you as you claim, then consider your early response to these questions as crucial,” he added.
His last additional question was: “May we have your alternatives or proposals instead of merely criticizing the government today?”

Arroyo assures no zero budget for congressmen

By Charmaine A. Tadalan
HOUSE Speaker Gloria M. Arroyo on Friday assured there will be no zero budget for lawmakers on her watch.
“I was supposed to make a proper announcement pero nasabi ko na, meron nga akong listahan and halos lahat nga was opposing me. Pero ganun pa man, as a gesture of goodwill, hindi sila bibigyan ng zero,” Ms. Arroyo told reporters in an ambush interview. (I was supposed to make a proper announcement, but I already mentioned it, I have a list, which includes most of those opposing me. But nevertheless, as a gesture of goodwill, they won’t be given zero.)
“That’s why I won’t give zero budget even to those congressmen (who) don’t like me at all,” she added.
District representatives critical of the administration were once threatened with budget cuts or zero funding for their constituents.
For his part, House Majority Leader Rolando G. Andaya, Jr. said the Speaker had given orders to ensure funds are allocated for every district.
“Appropriations proposed by the executive for projects and programs in a congressional district represented by a non-majority coalition member will not be drastically cut or reduced to zero,” Mr. Andaya said. “On the contrary, if the funds are found to be lacking, there is always the possibility of an augmentation, yan po ang sabi ni Speaker (that’s what the Speaker said),” Mr. Andaya said.
He added: “Gusto ko rin po klaruhin, na wala naman talagang distrito sa kasalukuyan na absolutely zero budget, kasi merong mga national projects (si) President Duterte.”
(I would also like to clarify that there are really no districts now that have absolutely zero budget, because President Duterte has national projects [in the countryside].)

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