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Southeast Asia-focused China fund raising up to $3 billion for Silk Road projects

HONG KONG — A quasi-sovereign Chinese fund focused on Southeast Asia is targeting raising up to $3 billion in a new dollar fund, adding to its firepower for planned investments under Beijing’s “Belt and Road” initiative, people close to the matter said.

The China-ASEAN Investment Cooperation Fund (CAF), backed by the Export-Import Bank of China, is pitching the fund to prospective investors, they said.

Its plan to raise $1 billion mainly from Chinese state-owned enterprises was already known, but the fund has now tripled the amount it is seeking.

The planned capital-raising is the latest in a series by China’s state-backed firms and comes as the country’s landmark Belt and Road scheme has been ploughing billions of dollars into global infrastructure projects.

Beijing has called on financial firms to develop overseas lending businesses to help connect China with old and new trading partners such as the 10-member Association of Southeast Asian Nations (ASEAN). China’s state-controlled banks have already responded by raising billions.

Established in 2010, one year after then-premier Wen Jiabao pledged to set up a $10-billion fund to provide financing for major projects in ASEAN countries, CAF primarily invests in infrastructure, energy and natural resources in the region. It typically invests $50 million to $150 million in single companies and prefers minority stake investments, according to its Web site.

Its portfolio includes stakes in Philippines’ top shipping and logistics firm Aboitiz Transport Systems, Thailand’s largest deep-water port Laem Chabang Port and largest biomass power generator National Power Supply Public.

Introduced in 2013, the Belt and Road project is aimed at building a modern-day economic “Silk Road”, connecting China by land and sea to Southeast Asia, Pakistan and Central Asia, and beyond to the Middle East, Europe and Africa.

This would be the second dollar-denominated fund for CAF, which counts the World Bank’s International Finance Corp. (IFC) and sovereign wealth fund China Investment Corp. (CIC) as investors in its first fund that has almost fully invested the $1 billion it raised.

A unit of state-owned construction and engineering company China Gezhouba Group said late last year that it would invest $150 million of the $1 billion that CAF was seeking.

CAF aims to secure the $1 billion from state companies in the first half of 2018, and is also looking to attract global institutional investors for the remainder, said the people.

It was not immediately clear what kind of returns the new fund hoped to earn or if existing investors including IFC and CIC would take part in the latest fundraising.

One of the people said state-owned enterprises would not face capital-control obstacles in investing in the fund, given CAF was set up under the direction of China’s State Council, or cabinet, and that it managed to successfully raise and invest its first fund.

CAF declined to comment while the EXIM Bank didn’t respond to requests for comment.

All the people declined to be named as the fundraising plans were not public. — Reuters

PHL urged to spend $22.8 billion on cybersecurity

THE PHILIPPINES needs to spend $22.8 billion (P164 billion) on cybersecurity between 2017 and 2025 to be in line with “global best-in-class countries,” according to new research commissioned by Cisco Systems, Inc.

Citing the research “Cybersecurity in ASEAN: An Urgent Call to Action” carried out by consulting firm A.T. Kearney, Cisco said the Philippines only spent approximately 0.04% of its collective gross domestic product (GDP) on cybersecurity in 2017.

“It needs to spend $8.8 billion between now and 2025 to be in line with the average benchmark for mature markets like the US, UK and Germany. To match the global best-in-class, Philippines needs to spend $22.8 billion during that period,” Cisco said.

Enrique Rodriguez, Cisco country manager for Philippines, noted the Philippines is one of the countries most prone to cyber attacks in Southeast Asia.

“The country’s ability to tackle these threats will be a crucial factor in safeguarding its future economic growth. The government has outlined its approach in the recently released National Cyber Security Plan 2022,” Mr. Rodriguez was quoted as saying.

The Cisco official said stakeholders should work together and build the country’s cybersecurity capabilities. Among these efforts include “strengthening infrastructure, fostering research and development capabilities, boosting local cybersecurity industry and developing a pool of cybersecurity professionals.”

The research report also showed companies across the Association of Southeast Asian Nations (ASEAN) region face the growing risk of cyber attacks, which could expose the region’s top listed firms to a $750-billion erosion in current market capitalization.

In the absence of a regional governance framework, the report showed shortage of skilled talent, and underestimation of risk will contribute to the heightened risk.

The study showed ASEAN countries are underspending on cybersecurity, with the region currently spending an average of 0.07% of its collective GDP on cybersecurity annually. It would need to increase the spending to between 0.35% and 0.61% of GDP between 2017 and 2025, “to be in line with the best in class.”

“The research estimates that this translates to $171 billion in collective spend needed across ASEAN countries during the period. Limited sharing of threat intelligence, often because of mistrust and a lack of transparency, will lead to even more porous cyber defense mechanisms,” Cisco said.

Naveen Menon, president of Cisco for ASEAN, said digital innovation and adoption are central pillars of economic growth for the regional bloc, and its success will depend on its ability to combat cyber threats.

“Cybersecurity needs to be an integral part of policy discussions at the semi-annual ASEAN Summit, with the aim of developing a unified policy framework for the region. The corporate sector also needs to start treating cybersecurity as a business-wide issue that can only be tackled by adopting a risk-centric approach to building resilience, rather than just an IT problem,” Mr. Menon said. — Patrizia Paola C. Marcelo

Gov’t makes partial award of Treasury bonds

THE GOVERNMENT yesterday made a partial award of fresh three-year Treasury bonds (T-bonds), as the Treasury tried to temper increase in rates.

At its auction on Tuesday, the Bureau of the Treasury raised just P14.891 billion out of the planned P20-billion borrowing from the fresh bonds maturing on Jan. 25, 2021.

The Treasury said the auction was met with healthy demand as total tenders reached P39.1 billion, nearly twice oversubscribed.

The three-year bonds fetched a coupon rate of 4.25%, higher than the 4.027% average rate fetched in the previous auction, as well as the 4.175% rate in the secondary market at noon time before the auction.

At the close of the secondary market trading yesterday, the bond yields ended flat at 4.175%.

Had the government made a full award of the bonds yesterday, the rate would have climbed to 4.287%.

“There would be significant increase in the rates if we have done a full award during this auction, so we decided not to moderate the increase which we think should really be at that level,” National Treasurer Rosalia V. De Leon told reporters shortly after the auction, adding that investors prefer shorter tenors.

In the previous T-bonds auction, the Treasury opted to fully reject the offers for the 10-year debt papers after fetching high rates, with the demand failing to reach the P20 billion the Treasury wanted to offer.

Ms. De Leon noted the healthy demand was driven by market players’ expectations of an interest rate hike by the US Federal Reserve, and anticipation of the monetary policy meeting of the Bangko Sentral ng Pilipinas on Feb. 8.

After the auction, a trader said the 4.25% coupon rate fell at the lower end of his expected range of 4.25-4.735%.

“However, we see that only a portion of the [P20 billion] offer was awarded. It shows that market is looking to buy short-term bonds but at a slightly higher rate,” the trader said in a text message.

The Treasury plans to auction off P120 billion worth of Treasury bills and another P120 billion worth of T-bonds in the January to March period. The P240 billion the Treasury plans to offer during the first quarter is higher than the P200 billion offered in the last quarter of 2017.

Meanwhile, Ms. De Leon said the Treasury saw a very good demand appetite for the last issuance, adding that “it was also a tough market.”

“We’ve seen that US Treasuries [were at] 2.55% when we launched, and it went as high as 2.66% when we entered the US market,” Ms. De Leon said. “Despite that, we saw the appetite is still very strong for the Philippine credit.”

Last week, the government offered $750 million worth of 10-year dollar-denominated bonds, while swapping 14 of the country’s old debt papers worth $1.25 billion.

The bonds were priced at par with a coupon of 3%, lower than the initial guidance of 3.3%, and a final spread of 37.8 basis points over the US Treasury. — Karl Angelo N. Vidal

Solaire to give Bloomberry shares to loyal patrons

A UNIT of Bloomberry Resorts Corp. (BRC) has bought P4.24 million worth of the company’s shares, which will be given as a reward for loyal patrons of Solaire Resorts and Casino.

In a disclosure to the stock exchange on Tuesday, BRC said the board of directors of its subsidiary Bloomberry Resorts & Hotels, Inc. (BRHI) has approved the purchase of up to two million shares in the listed firm through the stock market.

“These shares shall be given as a reward to Solaire’s loyal patrons and as part of Solaire’s marketing program,” the company said.

Following the approval, BRHI on Monday bought 50,000 shares at P11.04 each and 332,900 at P11.08 each, for a total of P4.24 million.

Shares in BRC gained eight centavos or 0.72% to close at P11.26 on Tuesday.

BRHI is one of BRC’s subsidiaries, along with Sureste Solaire Korea Co. Ltd., and its subsidiaries Golden & Luxury Co., Ltd., and Muui Agricultural Corp.

Incorporated in 1999, BRC was originally called Active Alliance, Inc. engaged in the manufacture and distribution of customer communication and electronic equipment inside the Subic Bay Freeport. The original firm stopped operations in 2011, and changed its corporate name to the present one in 2012, also transforming itself into a holding company.

BRC has established a presence in China, Macau, Hong Kong, Singapore, Malaysia, Indonesia, Thailand, Taiwan, and Japan through marketing efforts. Marketing offices, meanwhile, are located across Asia and Australia.

Bloomberry Resorts saw its net income attributable to the parent soar 271% in the first nine months of 2017 to P5.96 billion, against the P1.60 billion it generated in the same period in 2016. This follows a 27% uptick in revenues to P28.07 billion during the period, fueled by all-time high records in its gaming segments. — Arra B. Francia

Monetary Board sets ‘know-your-member’ rules for loan associations

THE Monetary Board (MB) approved on Tuesday new guidelines to protect Non-Stock Savings and Loan Associations (NSSLAs) members and its investments.

In a statement on Tuesday, the MB said the guidelines cover the establishment of the true identity and eligibility of persons who want to become members of NSSLAs.

“The Know-Your-Member (KYM) guidelines set clear BSP’s expectations on the responsibilities of the Board of Trustees and Management of NSSLAs to establish and implement effective risk management system and risk control, and to set out the documentary requirements for membership, to ensure that all members are eligible,” the BSP said.

The rules also prevent the “use of NSSLAs, by unscrupulous persons, as a means to profit or to take advantage of their nature and operations.”

At the same time, the MB also approved rules and regulations covering NSSLAs’ investments using their unused or excess funds.

“Said guidelines clearly define the allowable investments and limit of such investments that NSSLAs can enter into,” the BSP said.

“The investments, which must not exceed 10% of the NSSLA’s total assets, unless otherwise approved by the MB, must be safe, readily marketable, high grade and locally issued,” it added.

NSSLAs are non-stock, non-profit corporation engaged in the business of accumulating the savings of its members and using such accumulations for loans to members to service the needs of households by providing long-term financing for home building and development and for personal finance.

According to Republic Act. No. 8367, or the Revised Non-Stock Savings and Loans Association Act of 1997, an NSSLA shall confine its membership to a well-defined group of persons and shall not transact business with the general public.

A “well-defined group” shall be defined by the Monetary Board, and shall consist of employees, officers, and directors of one company, including member-retirees; government employees belonging to the same department/branch/office; including member-retirees; and; immediate members of the families (up to second degree of consanguinity or affinity).

Data from the BSP showed there are 65 NSSLAs as of Jan. 22 this year. — Elijah Joseph C. Tubayan

The Tooth Doctor wins business name tussle vs D’Tooth Doctors

THE Securities and Exchange Commission (SEC) sided with dental clinic The Tooth Doctor in a tussle with D’Tooth Doctors Co. over their “confusingly similar” business names.

In a decision dated Jan. 16, the SEC en banc ordered D’Tooth Doctors to change its name after assessing that this was quite similar to another business entity, “The Tooth Doctor,” which was established at a much earlier date.

“Without a doubt, the two contending business names… are indeed misleading and confusingly similar, especially since both businesses are owned by dental doctors and engaged in dental services,” the SEC said.

Lilli Ann D. Fernando, who owns a dental clinic located inside Robinsons Galleria in Ortigas, had sought to register The Tooth Doctor, Inc. as a corporation with the SEC in 2014.

Prior to this request, The Tooth Doctor was already registered with the Department of Trade and Industry (DTI) since June 5, 1996. The Intellectual Property Office had also approved Ms. Fernando’s registration of the The Tooth Doctor trademark on Jan. 1, 2010 for period of 10 years.

However, the SEC’s Company Registration and Monitoring Department rejected Ms. Fernando’s application due to the existing registration of D’Tooth Doctors, saying it is “deceptively or confusingly similar” to the latter’s name. D’Tooth Doctors has been registered with the SEC since Nov. 20, 2008.

Appealing the decision, Ms. Fernando noted she had the right to use “The Tooth Doctor” as she has been using the name way before D’Tooth Doctors did.

In its Jan. 16 decision, the SEC en banc cited Section 18 of the Corporate Code of the Philippines in coming up with the decision, which stated in part that: “No corporate name may be allowed by the SEC if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing or contrary to existing laws.”

With this as basis, the commission accepted Ms. Fernando’s argument, thereby granting them  permission to use the corporate name “The Tooth Doctors, Inc.”

“The appellant (Ms. Fernando) has adequately proved that she has acquired a prior right to the use of the name. Consequently, this Commission rules that the appellee dental professional partnership (D’Tooth Doctors) be directed to change its partnership name immediately upon receipt of the Commission’s notice or directive,” the SEC en banc said. — Arra B. Francia

Peso hits two-month low on weak GDP data

THE PESO plunged against the dollar as it breached the P51 level on the back of slower-than-expected fourth-quarter Philippine economic growth and the end of the three-day US government shutdown.

The local currency ended Tuesday’s session at P51.10 versus the greenback, 26.5 centavos weaker than its P50.835-per-dollar close on Monday.

This is the peso’s weakest close in more than two months or since it closed at P51.18 per dollar last Nov. 14.

The peso opened yesterday’s session slightly stronger at P50.82 versus the dollar, while its intraday high stood at P50.80. The peso’s worst showing, meanwhile, landed at P51.145 against the greenback.

Dollars traded rose to $878.5 million from the $868.5 million that changed hands in the previous session.

“The peso depreciated strongly following the weaker Philippine fourth-quarter GDP (gross domestic product) data, finally breaching the 51-peso level today,” a trader said in an e-mail yesterday.

The Philippine Statistics Authority reported on Tuesday the Philippine economy grew 6.6% in the fourth quarter of 2017, slower than the revised 7% GDP data in the July-September period and the 6.7% median estimate in a BusinessWorld poll.

The full-year GDP stood at 6.7%, within the lower end of the government’s 6.5-7.5% target.

“The GDP numbers caused the dollar-peso trading to [plunge] to a [low] of P51.145 before we saw some profit-taking ahead of the close,” another trader said.

“We saw some Bangko Sentral ng Pilipinas (BSP) intervention, they provided some liquidity to smoothen the volatility.”

Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, said the peso’s weakness is not necessarily bad but rather good in the long- run.

“A weaker peso is better in the long-run and not a concern in the short-run, where you would expect constant volatility,” he said.

Mr. Asuncion added the end of the US government shutdown further dampened the market’s sentiment over the peso.

“I think so, too. But that sentiment will be short-lived since the US will have to deal with it again by Feb. 8,” he said.

US President Donald J. Trump on Monday evening (US time) signed a bill that will fund the federal government until Feb. 8.

For today, the traders expect the peso will move between P51 and P51.30, while Mr. Asuncion gave a higher range of P51.10 to P51.40. — Karl Angelo N. Vidal

DoF chief flags ‘potential nightmare’ in federalism

By Elijah Joseph C. Tubayan
Reporter

THE SHIFT to a federal form of government could be a “nightmare” for the Philippines, particularly in the fiscal policy side of the proposal according to the country’s Finance chief.

“Let’s just say it will be challenging, very challenging, because the tendency,…we will need different federal states to retain as much revenues as they can and give the national government as much expenses as they can,” Finance Secretary Carlos G. Dominguez III said at the Management Association of the Philippines’ inaugural meeting yesterday in Taguig City.

“So there’s potential for it to become a nightmare. We are watching very closely particularly the revenue-sharing schemes that are going to be improved in the local government,” he added.

The House of Representatives approved on Jan. 16. House Concurrent Resolution (HCR) No. 9 which calls on Congress to be convened into a constituent assembly, ahead of provisions being crafted on the watch of the House committee on constitutional amendments that aim to overhaul the present system of government into a federal structure. President Rodrigo R. Duterte has been pushing for this change in government structure since way before last year’s presidential campaign.

The House of Representatives and the Senate have been in a deadlock over the matter of voting jointly (the House’s stand) or separately on constitutional amendments.

The House leadership has said it will go ahead with charter change, but senators have questioned the constitutionality of that move as initiated by only one chamber. Senate minority leader Franklin M. Drilon, for his part, said the transmittal of HCR No. 9 to the Senate is “a recognition na kinikilala nila na kasama ang Senado sa pag-amyenda ng (that they recognize that the Senate is part of amending the) Constitution.”

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The House committee on constitutional amendments has yet to arrive at discussions on the federal governments’ fiscal regime.

The Department of Finance (DoF) earlier said that 99% of local government units’ (LGUs) projects right now rely mostly on internal revenue allotments (IRAs) provided by the national government, despite already having the power to tax measures not provided by the National Internal Revenue Code.

IRAs are the automatically earmarked funds for LGUs, equivalent to 40% share of national taxes collected three years prior to the planned fiscal year, as mandated by Republic Act No. 7160, or the Local Government Code of 1991.

Asian Development Bank Country Director Richard S. Bolt said in an earlier interview that aside from boosting their locally sourced revenues, there is a need for LGUs to develop spending capacity as the government moves to a federal government.

“If you(‘re) gonna push more budget down, you should have capacity (for) these things,” he said.

SC lifts TRO on 700,000 withheld license plates

THE SUPREME COURT (SC) has lifted its temporary restraining order (TRO) on the release of 300,000 pairs of car license plates and 400,000 pairs of motorcycle vehicle license plates donated by the Bureau of Customs (BoC) to the LTO in 2016.

The SC also declared as constitutional the use of appropriation under the Motor Vehicle Registration and Driver’s Licensing Regulatory Services in the 2014 national budget for the implementation of the Motor Vehicle License Plate Standardization Program (MVLPSP).

“The Court ruled that the 2014 GAA (General Appropriations Act) included an appropriation for the program and the use of the appropriation is constitutional,” SC Spokesperson Theodore O. Te said on Tuesday, Jan. 23.

According to Mr. Te, the Court noted that it already ruled in 2015 on the legality of the procurement of the MVLPSP and added that “whatever defects attended the procurement had been ‘cured’ by the appropriation in the 2014 GAA of the full amount.”

As the 2014 GAA contained appropriation for the MVLPSP, the Court ruled that the program can be implemented using said funds, Mr. Te further stated.

“The appropriation, both for procurement and implementation, has been examined and decided by the Court and may not be assailed anew under the present petition based on the same grounds, which had already been dealt with in the [Jacomille v. Abaya] Decision,” Mr. Te added.

The ruling was in connection with a petition filed by former Abakada Party-list Representative Jonathan dela Cruz and incumbent Parañaque Representative Gustavo S. Tambunting questioning the donation of the license plates seized by the BoC from J. Knieiriem B.V. Goes and Power Plates Development Concept, Inc. (JKG-PPI). The license plates were held at the Manila International Container Port (MICP) after the company failed to pay P40 million in duties and tax.

Messrs. Dela Cruz and Tambunting cited in their petition a notice by the Commission on Audit (CoA) to discontinue the implementation of the MVLPSP and asked JKG-PPI to return the P477.9 million that the government paid in advance as the program was not included in the 2013 GAA. However, the Supreme Court already ruled following a petition by Mr. Reynaldo Jacomille that the implementation of the program was constitutional after it was given appropriations in the 2014 GAA. — Minde Nyl R. dela Cruz

Streaking San Miguel and GlobalPort collide

By Michael Angelo S. Murillo
Senior Reporter

ON-A-ROLL San Miguel Beermen and GlobalPort Batang Pier try to extend their surge in the PBA Philippine Cup when they lock horns in the main game today at the Smart Araneta Coliseum.

The defending champions Beermen (4-0), the lone team left in the season-opening PBA tournament yet to drop a game, go for their fifth straight win in as many games in their 7 p.m. joust against the Batang Pier, who are winners of their last two after opening their campaign with back-to-back losses.

Playing in the curtain-raiser at 4:30 p.m., meanwhile, are the Meralco Bolts (1-3) against the Kia Picanto (1-4).

San Miguel’s latest victory came over the NLEX Road Warriors, 109-98, in a match last Friday that turned chippy as it wound up.

League most valuable players Arwind Santos and June Mar Fajardo led the way for the Beermen as they gallantly fought a tough challenge from the Road Warriors (2-3), who were seeking to get back on the winning track after dropping their previous two matches heading into the game.

Mr. Santos, the PBA MVP in 2013, had a double-double of 26 points and 13 rebounds, while reigning four-time MVP Fajardo had 25 points and 16 boards.

Alex Cabagnot and Marcio Lassiter each had 14 points while the former also added nine assists and seven rebounds.

The match also saw San Miguel guard Chris Ross get into a near-fight with NLEX’s Alex Mallari and a stinging verbal tussle with Road Warriors coach Yeng Guiao.

The two technical fouls from the incidents had Mr. Ross, who had four points, eight rebounds and four assists, ejected in the closing moments of the game.

Also thrown out was NLEX big man Michael Miranda for kicking Mr. Ross on the groin in one physical play while Mr. Guiao was also called for a technical foul with his shouting match with the San Miguel guard.

For their heated verbal altercation, Mr. Guiao was fined by the league P11,000 for obscene gesture and use of profane language while Mr. Ross is meted a penalty of P2,600 for incurring two technical fouls.

“It was a physical game but we have gone through a lot as a team. So the physicality is nothing new to us and I firmly believe we can handle it and that it wouldn’t derail us from our goals,” said Mr. Santos after their win.

TWO STRAIGHT FOR GLOBALPORT
On the part of GlobalPort (2-2), the two straight victories it has notched of late has allowed it to right its ship after getting off on the wrong foot with two losses in a row early on.

The Batang Pier have been showing far better chemistry which has allowed them to make things happen and move to the middle of the pack.

In their last game against Blackwater Elite on Friday where they came away with a 101-76 win, the Batang Pier had much balance with Sean Anthony leading the way with 22 points, seven rebounds, five assists and two steals.

Stanley Pringle finished with 17 points, 11 rebounds and five assists while Kelly Nabong had 16 points and seven boards.

“Offense is going well for us because of our ball movement. Hopefully we get to sustain this and continue to play together,” said Mr. Anthony.

BBL’s parliamentary features questioned

By Camille A. Aguinaldo

FORMER SENATE president Aquilino Q. Pimentel, Jr. on Tuesday flagged constitutional issues regarding the current version of the proposed Bangsamoro Basic Law (BBL), particularly the structure of the Bangsamoro government aimed at adopting a parliamentary system.

At the resumption of the Senate hearing on the BBL, senators tackled its provisions with security, budget, and finance officials as well as constitutional experts providing suggestions that would further refine the proposed measure.

For his part, Mr. Pimentel said the Bangsamoro government opting for a parliamentary system was “incongruous” with the presidential structure of the 1987 Constitution.

“The autonomous region envisioned in the Constitution which the BBL intends to govern must follow the form of government provided for in the fundamental law, and that is, none other than the presidential form of government,” he said.

According to Article 4, Section 2 of the draft BBL, “The Bangsamoro Government shall be parliamentary. Its political system is democratic, allowing its people to freely participate in the political processes within its territory.”

Mr. Pimentel also questioned the electoral system of the Bangsamoro government in which there is an elected parliament while its chief minister, who heads the government and the executive authority, is chosen by the members of that parliament.

Citing Article 10, Section 18 of the Constitution, the former Senate leader said: “The section clearly mandates that the Executive Department and the Legislative Assembly of the proposed Bangsamoro entity must be ‘elective and representative of the constituent political units’ in that area of our country.”

Mr. Pimentel also proposed ideas on how to improve the reserved powers of the Bangsamoro government, particularly its electoral office, human rights commission, justice system, education system, congressional districts, civil service, among others.

In an interview with reporters, Senator Juan Miguel F. Zubiri, who chairs the subcommittee on the BBL, said they could look into the provisions in question and tweak it in a way that complies with the Constitution.

“Our suggestion was: instead of calling it parliament, maybe we can still call it an assembly. And instead of calling it minister, you can call him executive director. We can change the names so it could address the unconstitutionality questions,” he said in a mix of Filipino and English.

Mr. Zubiri added that there would be a technical working group which would focus on the bill’s constitutionality issues so it passes through the Supreme Court if contested.

On security matters, National Security Adviser Hermogenes C. Esperon, Jr. suggested that the Armed Forces create military task forces for the region, instead of forming a Bangsamoro Military Command, as stated in the bill.

“I believe the Armed Forces is better able to serve purposes of defense and security without becoming a potential instrument of the leaders or personalities in an area for their own interests. I believe the Eastern Mindanao Command and the Western Mindanao Command are enough and sufficient. We can create other task forces, like the Joint Task Force (JTF) Zamboanga or JTF Pagadian, so we can be more flexible in that kind of setup,” he said.

Budget Secretary Benjamin E. Diokno for his part said the expenditure plan for the Bangsamoro government will have to depend on the size of its territorial jurisdiction.

On matters of revenue sharing, Finance undersecretary for legal services Bayani H. Agabin said they could not yet gauge if the proposed 6% annual block grant from the national government as well as the proposed 75%-25% local taxes share between the Bangsamoro and national governments would be enough for the region’s financial stability.

Mr. Agabin also mentioned that based on the estimates of the Office of the Presidential Adviser on the Peace Process (OPAPP), money that would be spent for BBL’s first year would be around P60 billion for the block grant, P10 billion for the special development fund, and an additional P10 billion for the transition.

Unseeded Mertens routs Svitolina to reach semis

MELBOURNE — Unseeded Australian Open debutant Elise Mertens blew away world number four Elina Svitolina in straight sets Tuesday to reach a first Grand Slam semifinal.

The Belgian world number 37, on a 10-match unbeaten streak after winning in Hobart this month, knocked out the Ukrainian 6-4, 6-0 in 1 hour 13 minutes.

Mertens, who is yet to drop a set, is the first Belgian to make the last four since Kim Clijsters in 2012.

“I’m lost for words. I don’t know what to say. I just gave my all today,” she said. “I played my game today and tried to stay aggressive.”

Mertens, 22, trains with her coach and boyfriend Robbe Ceyssens at the Kim Clijsters Academy in Belgium and has seen her world ranking rise from 127 at the end of 2016.

She had never been beyond the third round of a Grand Slam before in four appearances.

“He means a lot,” she said of the importance of Ceyssens.

“He’s by my side all the time. Since we have been together my game has only gone upward. All credit to him.”

Mertens made all the initial running, returning aggressively and mixing up her game cleverly, taking every opportunity to approach the net and cut off Svitolina’s passing avenues.

She broke the world number four in the third game and then again for a 5-2 lead.

Serving for the set, Mertens tightened and a double fault on break point handed the Ukrainian a way back.

Mertens still had a second chance to serve out. Another double fault allowed Svitolina a glimmer at 15-30, but Mertens composed herself and landed three first serves to secure the set 6-4.

The Belgian had powered 16 winners to Svitolina’s eight and significantly won nine of 12 points at the net.

Svitolina was immediately in trouble at 0-40 at the start of the second.

She saved those but a weak forehand into the net gave a fourth and Mertens landed an overhead smack on the sideline to secure the break.

Another break followed, and a third courtesy of a sumptuous backhand pass took Mertens to the brink of the last four at 5-0.

She completed the humbling of Svitolina with little fuss and will face either second seed Caroline Wozniacki or unseeded Carla Suarez Navarro for a place in Saturday’s final.

If she makes it she will emulate Clijsters, who won at Melbourne Park in 2011.

Mertens had a message for her countrywoman and tennis great who she said would be following the match in the middle of the night back home.

“Kim, thanks for watching and don’t get too stressed.” — AFP

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