SOME of the proceeds from the offer of yen-denominated bonds will be used to redevelop properties owned by the Philippine government in Tokyo, the Finance secretary said on Tuesday.

“[The] samurai bond [funds] will be spent in Japan. We will reconstruct the embassy there,” Finance Secretary Carlos G. Dominguez, III said after the Treasury bond auction yesterday.

National Treasurer Rosalia V. de Leon added that Mr. Dominguez’s intention is for a property in Tokyo’s Shibuya ward to be “redeveloped.” The other uses of the proceeds from the offer, which will take place “within the year,” will refinance previous bond issues and also represent new borrowing.

“We may borrow some more… So partly refinancing, partly new debt, partly for that project,” Mr. Dominguez said.

The current Philippine embassy is in the Roppongi district of Tokyo’s Minato ward. It is unclear whether the Shibuya project represents a firm plan to move the embassy. Last week, Mr. Dominguez said he is looking at redeveloping a government-owned 2,500-square meter property in Nampeidai in the Shibuya ward, with plans to build three structures in the area.

Mr. Dominguez said the structures will include a building for the Philippine embassy and chancery, as well as apartments for the embassy staff, among others.

Ms. De Leon added that the amount to be raised will be determined by the cost of the redevelopment plan.

“Whatever the amount is, [that will we] issue in the samurai [bonds],” adding that they may issue additional amount “for their budgetary requirements.”

Asked for a preliminary estimate of the issue size, Ms. De Leon said between “$500 million to $700 million.”

Aside from the samurai bonds, the government will also issue yuan-denominated bonds, expected next month.

Last week, Ms. De Leon said the Treasury is looking at offering three- to five-year year papers, with the People’s Bank of China and National Association of Financial Market Institutional Investors having approved the issuance.

In November, the government and the Bank of China signed the underwriting agreement for the country’s maiden issue of $200 million worth of yuan-denominated securities. — Karl Angelo N. Vidal

INDONESIA is forgoing billions of dollars on offer from American companies eager to invest in Southeast Asia’s biggest economy, US Ambassador to Indonesia Joseph Donovan said.

As the US tries to arrest a deteriorating trade balance with Indonesia, which last year found itself in President Donald Trump’s cross-hairs, Donovan has also rejected complaints of increasing American protectionism. Indonesia had made significant progress on macroeconomic stability, improving the business environment, education and infrastructure, yet more must be done to encourage trade as well as foreign investment, he said.

“Those that caution the United States about being trade protectionist, I would respectfully suggest that they look at their own markets and they might find a good deal of ingrained protectionism there,” he said in an interview on Feb. 14 in Jakarta.

Indonesian officials such as Finance Minister Sri Mulyani Indrawati have consistently criticized the protectionist tone sounded by Trump, who last year accused a host of nations, including Indonesia, of potentially abusing their trade relationship with the world’s biggest economy. Since then, the US trade deficit with Indonesia has worsened to $13.3 billion from $13.2 billion in 2016, according to the US Census Bureau.

“The current protectionist language is definitely going to create concern about whether globally there will be a setback in the progress that has been made over the past three decades,” Indrawati said in an interview on Jan. 30.

Indonesia’s economy has been growing at about 5%. At the same time, however, the government has been struggling for revenue to fund Widodo’s ambitious infrastructure plans.

Oke Nurwan, director-general of Foreign Trade at the Trade Ministry, did not respond to questions about protectionism. He said Indonesia had made progress in terms of ease of doing business and was seeking to better manage imports, as well as targeting export growth of 11% in 2018.

Donovan said the US’s average tariff rate was less than 3% and half Indonesia’s average applied tariff rate. Despite the imbalance, he said trade in goods between the two nations had increased last year by about 7% to approximately $27 billion in bilateral terms, with US exports to Indonesia increasing about 14%.

Indonesia must do more to encourage foreign businesses to invest and trade, he said, adding that the US wants to see more access granted to American companies, particularly in the agriculture sector, including dairy, cotton, soybean, fruit and vegetables.

“Indonesia is leaving billions of dollars on the table right now in the field of power generation by not following through on offers by American companies,” he said, declining to reveal any specifics.

Ekoputro Adijayanto, the chief of the Indonesian Planning Ministry’s Center for Private Investment, said a number of US private equity firms had shown interest in Indonesia, including one that’s “seriously looking” to invest in greenfield power generation. But there also appeared to be a “Trump effect,” he said. “He’s trying to lure investors in the US to invest back in America, make America great again.”

“China is a bit different from other countries,” Adijayanto said. “Instead of us going there, they are coming here. Many Chinese companies are coming to our office.”

Figures show that in the space of three years, the US has lost significant ground to China in terms of foreign direct investment in Indonesia. Last year, direct investment from the US was worth $2 billion, according to the Indonesia Investment Coordinating Board, while Chinese foreign direct investment was $3.4 billion.

“It’s not a competition between America and China,” Donovan said. “What I look for are opportunities for American businesses to compete on a level and fair trade ground here. Rather than look at China, what I’m interested in doing is helping American businesses to do more here.”

Donovan said Indonesia must maintain the pace of economic reform established under President Joko Widodo and “stand up to protectionist voices who advocate for special interest under the guise of nationalism.” He cited Indonesia’s local content regulations — which saw Apple, Inc.’s market access curbed before the company built a domestic research facility — as “a real deterrent” to foreign participation in the Indonesian economy.

“It’s important to recognize that these companies have options. They can choose to be here, they can choose to be elsewhere in Asean, they can choose to be elsewhere in the world,” he said. — Bloomberg

THE Department of Trade and Industry (DTI) expects considerable progress within one to two years in the Philippines’ bid to negotiate a free trade agreement (FTA) with the US.

Trade Secretary Ramon M. Lopez told reporters on Tuesday that while both sides are still conducting their own studies, it may be possible to move to a phase of more intensive negotiations within two years’ time.

“Right now, it’s only exploratory but at least it’s moving, compared to last year when it wasn’t even moving. By the third year, we could really be at an advanced stage,” he added.

The DTI is currently looking into products that could be promoted further while the US is championing greater access for its meat products, Mr. Lopez said.

“I won’t say this will be fast. It’s a big economy (US) but we hope to seal it within this administration,” Mr. Lopez said.

Mr. Lopez added that negotiations for FTA need around three to five years.

In the meantime, the Philippines will continue to enjoy reduced to zero tariffs in selected exporters to the US through the Generalized System of Preferences (GSP) which has been recently amended to be renewed to every three years.

With the expected timeline, Mr. Lopez sees a smooth transition from being a GSP beneficiary to FTA partner.

The DTI is still in the process of negotiating the addition of footwear and garments to the list.

“Right now a lot of products are included. If it’s agro-business, I would expect   many, if not all, are included already. Otherwise I would push for more agro-based products to be included aside from garments,” he added.

“We have to align with the industry sectors to see whatever’s not in the GSP, that’s what we’re going to push for.”

Separately, the US-Philippines Society (USPS) announced it will help explore partnership opportunities in telecommunications construction, energy, agriculture and aerospace industries.

Mr. Lopez said that the aforementioned areas are the same areas that the Philippines has been inviting the US to invest in.

“It’s aligned with our push [which] is the innovation-driven industries,” he added.

USPS co-chair Manuel V. Pangilinan said that the country needs the US to help provide the needed capacity to build on the areas especially those dependent on technology.

“I think that there’s really need for the Philippines really to expand its contacts with American companies like in our case, in telecoms […] and that’s quite interesting to us because that exposes us to technological trends related to business,” he added.

Mr. Pangilinan heads Hong Kong-based First Pacific Co., Ltd.’s investments in the country which include Philex Mining, Corp., Metro Pacific Investments Corp., and Philippine Long Distance Telephone Co., Inc. (PLDT).

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary Mediaquest Holdings, has majority stakes in BusinessWorld through its Philippine Star Group. — Anna Gabriela A. Mogato

A LEGISLATOR on Tuesday submitted to the House of Representatives’ committee on agriculture and food a list of alleged rice cartels operating in the city of Manila.

The committee was conducting an inquiry into the rice inventory of the National Food Authority (NFA) amid the depletion of the agency’s buffer stock.

Manila Rep. Manuel Luis T. Lopez said that the 13 rice traders are based along a stretch of Dagupan Street in Tondo district.

Mr. Lopez, who gave the names of the traders, alleged that these companies control the price of rice in Metro Manila and challenged the Department of Agriculture (DA) and the NFA to conduct an inspection.

“Visit the warehouses, open them. We are not authorized, we don’t have police authority, but you (NFA administrator Jason Laureano Y. Aquino), being under the secretary, have police powers. So I challenge you to do that,” Mr. Lopez said.

However, Agriculture secretary Emmanuel F. Piñol said it is not the mandate of the DA to identify rice cartels.

The committee, chaired by ANAC-IP party-list Rep. Jose T. Panganiban, Jr., unanimously approved the motion to invite the companies named by Mr. Lopez in its next hearing. — Minde Nyl R. dela Cruz

THE GOVERNMENT will wait until the end of March before writing to PLDT, Inc. regarding plans by the government to assign the Connectivity Unlimited Resource Enterprise (CURE) frequencies without compensation to PLDT.

Department of Information and Communications Technology (DICT) Acting Secretary Eliseo M. Rio, Jr. said the department will respect the internal procedures of PLDT and will await the company’s formal communication to them.

“We will not rush them. Probably by the end of March,” Mr. Rio said in a phone interview, asked about the government’s notification time line.

Mr. Rio said the government is focused on releasing the final joint memorandum circular on the selection of the telecommunications industry’s “third player” on March 21. It wants to reassure the potential investor that CURE frequencies will be available.

“(PLDT has its) internal procedure. We trust they will honor their word.”

PLDT Chairman President and CEO Manuel V. Pangilinan told reporters yesterday: “There’s a process internally, dictated by our governance. I cannot just send a letter because I just want to send a letter…”

Mr. Pangilinan did not specify a time line.

PLDT this month agreed to the government’s plan to assign frequencies held by CURE to the telecom industry’s “third player” for no compensation.

President Rodrigo R. Duterte was “displeased” with the prospect of having to pay for the CURE frequencies, which were awarded to telcos for free after a “beauty contest” to allocate frequencies.

The government will award the remaining available frequencies, to the third player, including the third-generation (3G) CURE frequencies allowing the new entrant to compete with incumbents PLDT and Globe Telecom, Inc.

The frequency held by PLDT unit CURE was to be divested as a condition of National Telecommunications Commission (NTC) approval of the PLDT merger with Digitel Telecommunications Philippines, Inc. in 2011. NTC was supposed to auction the asset but failed to do so.

The 3G frequency bands were awarded via “beauty contest” by the NTC in 2005. PLDT acquired the 15 MHz band, Globe Telecom, Inc. 10 MHz, Sun Cellular (Digitel) 10 MHz, and CURE, 10 MHz. In 2007, PLDT bought CURE and operated the telco using the brand name RED Mobile. In 2011, PLDT filed for approval of its acquisition of Digitel.

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