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After Cebu City: Mandaue and Lapu-Lapu mull anti-counterflow law

OFFICIALS OF Lapu-Lapu and Mandaue cities are now looking into the implementation of an anti-counterflowing law, similar to that of Cebu City which takes effect today, Feb. 5. Cebu Mayor Tomas R. Osmeña signed last Friday Executive Order (EO) No. 34, which will penalize counter-flowing with a P500 fine on the driver and impounding the vehicle for 30 days. The EO was issued amid the rising concern over the worsening traffic condition in the city and its neighboring areas in Metro Cebu. “Most annoying of all these traffic violations are reckless driving, most specifically what is known as driving left or counter-flowing, which to the mind of the general public is not only a brazen disregard of basic road courtesy, but a cold display of indifference to the safety and wellbeing of other road users,” reads a part of the order. Francisco Ouano, operations chief the Cebu City Transportation Office (CCTO), said 24 teams of mobile patrol groups will be deployed in three shifts. Each team has four members composed of three city traffic enforcers and one policeman. Fifty members of Task Force Alpha, the enforcement arm of the CCTO, will also supplement the mobile patrol personnel in implementing the EO. — The Freeman

Indonesia’s unstable rules keeping foreign investors away

JAKARTA — The chief of Indonesia’s investment board said on Friday frequent and abrupt changes in regulations were discouraging foreign investors from putting money into Southeast Asia’s biggest economy.

Earlier last week, Thomas Lembong warned that Indonesia is ”still losing out” to neighbors such as the Philippines, Vietnam and Thailand.

Mr. Lembong, head of the Investment Coordinating Board, told reporters on Friday it is common knowledge that “sudden and constant changes in regulations create instability that is hard for any investor who’s willing to take a risk with their capital.”

“Thailand, Vietnam, Malaysia have more stable regulations.”

Foreign investors have applauded some efforts by the government to streamline regulations, but say there are still too many restrictive regulations and a stifling bureaucracy.

Indonesia’s economy has been growing at about five percent annually in recent years, but policy makers have been frustrated by an inability to speed up the pace, partly due to sluggish consumption and tepid investment.

Last year, Indonesia recorded 8.5% more foreign direct investment (FDI) in rupiah terms than it attracted in 2016.

For 2017, FDI in sectors excluding banking and oil and gas was 430.5 trillion rupiah ($32 billion). For 2016, it reported an 8.4% increase in rupiah terms.

Indonesia has sought to scale back a so-called “negative investment list” that restricts or caps sectors open to foreign investors.

In February 2016, President Joko Widodo’s administration opened up sectors ranging from e-commerce and telecommunication equipment in a move dubbed “Big Bang”.

But Mr. Widodo’s pledge to revise the list further is yet to materialise.

The revision “is in process. The president has instructed us to evaluate this but let’s abide by the existing one for now,” Trade Minister Enggartiasto Lukita said on Friday.

On Wednesday, Mr. Widodo warned that Indonesia was losing out to neighbours in export markets.

“This big country of Indonesia is inferior to Thailand in terms of exports. With enormous resources and human resources, we are losing. There is something wrong and something has to be changed,” the state news agency Antara quoted him as saying in a speech at the Trade Ministry.

Mr. Lukita said overcomplicated regulations and red tape were also obstructing foreign trade agreements.

Indonesia had only reached one free trade deal in the past eight years, with Chile, he said. — Reuters

ARMM vows continued infra project delivery despite latest Abu Sayyaf attack

THE AUTONOMOUS Region in Muslim Mindanao (ARMM) government has condemned the latest attack by members of the Abu Sayyaf group that left two road project workers dead and two others seriously injured, but vowed to carry on with the implementation of public infrastructure needed for development. “We remain firm in our determination to continue building the infrastructure our people need. Yes, we grieve, but these attacks will not deter the ARMM regional government from continuing efforts to provide the infrastructure and vital services our people need,” ARMM Governor Mujiv S. Hataman said in a statement released on Feb. 3. Last week, an Abu Sayyaf gunman shot at a Department of Public Works and Highways (DPWH)-ARMM truck and a transit mixer with an M203 assault rifle, killing the drivers of both vehicles. Two more DPWH-ARMM personnel who were with the slain drivers are still in critical condition. Mr. Hataman said, “The DPWH-ARMM builds so development can reach the most isolated and poorest communities — even if our district engineer has been attacked twice with hand grenades, even as the department has been subjected to numerous threats, and attempts at extortion.” — Mindanao Bureau

Übermensch*

In Shakespeare’s Act III of Julius Caesar, Mark Anthony joined the funeral of, after Brutus and kindred souls had done the Ides of March number on, Julius Caesar. The starting line of his famous spiel included: “I came to bury Caesar, not to praise him.”

To the Thanksgiving Lunch for the passage of TRAIN Stage 1 at the Ayuntamiento de Manila, I came to praise the intrepid warriors who powered TRAIN over the top, and not to bury its badly attenuated namesake. I fully supported the original Department of Finance’s (DoF) TRAIN: it was finely tuned, met the canons of reform economics and was compassionate.

But after Congress did a number on the DoF TRAIN, the country got an attenuated law, still useful in the net, but clearly not the roar that the original would have been. The promulgators and supporters of the DoF TRAIN, mostly youthful and idealistic, Karl’s marauders I call them, aimed for the stars; the legislative leadership aimed, as it were, for the gutter. The compromise law was, well, a molehill.

True, we should be grateful that some real reforms were passed: taxes on fuel and petroleum products adjusted, some VAT exemptions abolished, remedies to bracket creep provided, and vehicle and sugar-based beverage tax adjusted and cash givebacks to the vulnerable. But the congressional powers also retained many more VAT exemptions for favored constituencies and at the last minute swung blindly to produce new imposts (e.g., coal tax and wheeling charges VAT) that would exacerbate power poverty and push back job creation in the Philippines. Such crass defilement of a work of art makes me boil.

The net revenue realization, said to be P90 billion, what with new and future freebies in the wake of the 2019 election and the recognized land mines such as the military pensions, will leave little for Build, Build, Build. Would that Build, Build, Build does not morph into Borrow, Borrow, Borrow!

I wept because instead of a roar, the final product (RA 10963) is a whimper. Twice a whimper under the “shock and awe” presidency of Rodrigo Duterte. While shock and awe is amply and routinely applied in the assault on political targets, it was hardly present in the economic battle. The few line item vetoes by Malacañang, though in correct direction, were hardly shock-and-awe standard.

Perhaps I was being naïve.

Didn’t I know that compromise is the heart of politics? Was not the Comprehensive Tax Reform Program of 1996 eviscerated in Congress on the revenue issue? One that took 15 years to correct with the Sin Tax Law? I dared to hope that the “fire and brimstone” president would finally muster the roar to lift the Philippines out of mediocrity.

Mediocrity? Does the Philippines, being an economic growth leader in this fast growing region of the world in the last three years, spell mediocrity? I am grateful for the growth spurt. But the name of the game is sustained growth for decades, not growth spurts. It makes a whale of a difference.

As a coffee shop denizen, I sometimes become reluctant witness to chatter, mostly of no consequence. But two weeks ago, I overheard the following conversation between a young affluent-looking dad and her daughter:

Daughter: “Dad, where will I study after the grades?”

Dad (in between barking sharp instructions to an apparent underling in his cellphone): “You will go and join your cousins in Canada. Go and never come back, ever!”

While the sentiment is familiar, I was disturbed by write-this-in-stone undertone: “There is no hope for you here!” Whereas our Asian neighbors have by now succeeded in reversing the diaspora of talent, the Philippines continues to push talent out. Growth spurts don’t do that. Sustained rapid decadal economic growth — the real target of original DoF TRAIN — does it.

The by-word during the Thanksgiving Lunch for TRAIN Stage 1 was: “This is just the first step!” For the lunch also saw the launch of “TRAIN Stage 2”: the lowering of corporate income taxes in return for the long-delayed reset button on, nee decapitation of, the chaotic corporate tax holiday system. The DoF will henceforth have the monopoly to grant tax perks for permanent control. The group assembled was raring to go. In this congregation of resolve, the pain of the brush-off was being buried under the avalanche of hope.

But TRAIN 2 will struggle against the headwind of the 2019 Senate election. The story oft-told is how incumbent Sen. Recto lost his senate seat after championing the VAT law. Good economics seldom makes good politics is the message of Joseph Capuno, Orville Solon, and this writer in a 2009 paper entitled Is Local Development Good Politics?

Worse, attention will be riveted on constitutional change, federalism, the death penalty and who knows, yet another scandal. Does this faze Karl’s marauders? No. They are on an unstoppable vortex of giving of themselves.

When I left DoF I asked the secretariat to procure a TNVS ride to the LRT station. Issa of the secretariat got me an Uber and off I was. As I made a move to pay, the Uber man said the trip is charged to Issa’s account. Grateful, I offered a hefty tip to the Uber man. He firmly brushed my offer aside saying, “It’s ok” with a smile. “Aha!”, I realized excitedly, “Übermensch!” Perhaps there is hope for the country.

*Übermensch is German for “superman”; it was the goal for all humanity to strive for in F. Nietzsche’s Thus Spake Zarathustra (1896).

 

Raul V. Fabella is a retired professor of the UP School of Economics and a member of the National Academy of Science and Technology. He gets his dopamine fix from hitting tennis balls with wife Teena, bicycling and struggling with the guitar where he spells rank amateurism.

NAIA gets its act together

For much of the decade, traveling through the Ninoy Aquino International Airport (NAIA) has always been an emotionally exhausting experience for my peers and I.

As we traverse the process of departure and arrival through its four terminals, we are reminded of how inefficient government can be what with numerous processes that are both redundant and tedious.

Under the watch of the former management, NAIA was the nation’s armpit — its source of stink and grime.

From 2011 through 2013, it was rated the world’s worst airport by the “Guide to Sleeping in Airports,” one of the more respected airport evaluators in the globe. Another esteemed airport evaluator, Skytrax, did not even bother to rate NAIA, just to say that it should be avoided for its horrid conditions.

For years, the riding public were made to suffer through runway congestion, kilometric cues at the baggage X-ray checkpoints, insufficient immigration stalls, filthy comfort rooms, and equipment breakdowns. The management simply blamed everything on the aging NAIA facility and the Arroyo administration.

In 2015, airport security personnel and baggage handlers embarked on a bullet planting scheme as a means to extort money from passengers.

Colloquially known as laglag bala, the former management was again unable to resolve the modus operandi. NAIA’s former general manager even had the gumption to blame the riding public for packing bullets in their suitcases and the media for magnifying the problem. This was a new low for NAIA, something resonated negatively throughout the Aquino administration.

The public had enough and clamored for change. Those affected took their revenge in the ballot box.

NAIA UNDER NEW MANAGEMENT
As change swept the land with President Rodrigo Duterte ascending to power, a new general manager was appointed to head the Manila International Airport Authority and NAIA. That person is Eddie V. Monreal.

Monreal comes with sterling credentials having had more than 30 years experience in the aviation industry. He was the former country manager of Cathay Pacific who was responsible for operating its Manila and Cebu hubs. Both hubs operated with the professionalism associated with Cathay Pacific and this was reflected in its superior ground service and profitable operations throughout three decades. As the new GM of NAIA, Monreal is perfectly aware of the needs of the airlines and passengers alike.

A year and a half into his post and the NAIA has become a better airport in all aspects. The conflicting negative emotions we used to feel when traveling through NAIA have been replaced by sentiments of hope and appreciation. For this, the management deserves the nod of the public for their hard work and good management.

Laglag bala has become a thing of the past and so are chronic departure and arrival delays due to runway congestion. The airport experience is now more pleasant with better maintained facilities. No longer is NAIA among the worst airports in the world nor in Asia.

Today, it is ranked somewhere in the middle of the pack, ranked slightly lower than Jakarta’s Soekarno-Hatta International Airport.

As a frequent traveler using terminals 1, 2, and 3, I tried to put my finger on what exactly Monreal has done to make my airport experience a better one. I realized that it is not one thing but numerous seemingly minor things.

Nowhere is this more evident than in the resolution of runway congestion.

By restricting general aviation (eg. private jets and charters) during peak hours and by imposing a rule whereby pilots are disallowed from requesting clearance for take off unless they are prepared to do so within five minutes, on time performance for departures and arrivals have improved from an abysmal 47% to 82% today. This is on a par with most airports in Asia.

The flow of departing passenger through baggage X-Ray inspections to check-in and onward to immigration is now faster and painless. Simple reforms were done to make this possible.

For one, Monreal opened all access gates into the airport and installed an X-ray machine in each of them. Inside, check-in counters were renovated with each airline operating the maximum number of counters for faster processing. What a big difference this has made.

Inside the departure hall, immigration booths have been re-configured to have four officers per stall instead of just two. This has doubled the processing capacity of immigration registries. Making the process even faster was the elimination of airport tax payments. It is now incorporated in the ticket cost.

Although all three terminals are advancing in age, several physical improvements have made them more comfortable for the riding public.

In terminal 2, for instance, comfort rooms have been expanded to service more people at a time. Thousands of new waiting chairs have been added in all four terminals and a better selection of food and duty free stores are now on offer for the passenger’s convenience.

In terms of mechanical facilities, a rigid preventive maintenance calendar was put in place so as to reduce the frequency of equipment breakdowns. Today, all aero bridges are in service as are the baggage conveyor belts and X ray machines. This was not the case three years ago.

In the passenger halls, sanitation of the rest rooms are now handled by the airlines themselves simply because they do a better job at it. In addition, a new agency has been appointed to keep the common areas clean, the work force of which are tenured workers, not five month temps.

Arriving passengers breeze through with faster baggage claims (because all conveyor belts are working) and they no longer have to contend with over-aggressive porters inside the arrival hall. Porters are banned from this area. Decrepit baggage carts have also been retired and replaced

Outside, passengers now have a choice between inter-airport shuttles, Ube express, metered or coupon taxis. The “official” airport taxis no longer have a monopoly of the airport taxi business.

In managing an organization as complex as NAIA, consistency is key. Monreal is often seen around the airport premises doing inspections and correcting systems and people on the spot, if out of place. He is strict in a paternal way and admired by his men for his professionalism and the work ethic akin to a private sector executive. Morale among the airport personnel has never been higher.

MOVING FORWARD
A lot of work has yet to be done.

Among the improvements that are in the pipeline is the repair of NAIA 3’s insufficient air-conditioning. It should be done by April this year. Also in the works is the long-awaited construction of rapid exits on the runway.

When completed this July, the main runway will be able to accommodate more movements per hour.

An additional 1,500 CCTV cameras will also be put up to augment the exiting 700, making the NAIA on a par with the more advanced airports in the world, surveillance-wise.

Terminal 2 will finally be given its long-overdue renovation and expansion. The check-in hall will be expanded to encompass the space that presently acts as the building arcade (covered area before the entrance gates). When completed, terminal 2 will not only be more spacious , it will have the capacity to absorb PAL’s fleet expansion.

With all the improvements going on, I would like to propose two more.

First, the management must put a limit to the hundreds of billboards and ad signs that cause visual clutter in the airport. As it stands, NAIA does not look like the gateway to the country but the gateway to Filinvest or DMCI showrooms what with oversized, ugly billboards at every turn. Outdoor advertising firms are abusive by nature and must be controlled. The airport belongs to the Filipino people, not the few outdoor advertising firms that bagged the concession.

Secondly, the arrival waiting area extension of terminal 1 must be renovated. It has become decrepit through time and not reflective of the progressive nation we are today. It also debases the dignity of greeters as they are blocked off by a steel gate. Why not open the second level deck? Both the passengers and greeters deserve a more dignified experience.

That said, I am happy about NAIA’s progress. It has ceased to become the symbol of government inefficiency but a symbol of resilience, hope, and positive change.

 

Andrew J. Masigan is an economist.

No regrets

“No regrets,” written by Edwin Batongbacal, is the last chapter (or the penultimate one, if we count the “Afterword”) of A Time to Rise: Collective Memoirs of the Union of Democratic Filipinos (KDP or Katipunan ng mga Demokratikong Pilipino). “No regrets,” is an appropriate statement for many of the comrades who waged a revolution, which could not be won in their lifetime.

The volume, edited by Rene Ciria Cruz, Cindy Domingo, and Bruce Occena and published in 2017 by the University of Washington Press, had its launch in Manila on Feb. 2.

I am honored to have Rene, Cindy, and Bruce as friends and comrades — all brilliant heroic, and dedicated and yet mere mortals whose lives have gone through many up and downs, including the demise of their organization and the failure of the revolution that they waged in their prime.

It is that acceptance of defeat — as well as the humility that comes with it — that gives this volume the virtue of authenticity and integrity.

True, the volume has a special meaning for me because not only do I personally know the editors of the volume, but I am also a relative or a friend of other contributors and KDP members. Odette Polintan (author of Working the Corridors of Power) is my first cousin. We are the same age, and have been friends since childhood. She became an activist in St. Theresa’s high school but dropped out of school to become a full-time revolutionary. She was later assigned to do political work in the US, including lobbying US politicians and government officials to withdraw support for the dictatorship. If not for her, I would not have become a student activist.

Odette’s late daughter Silahis contributed her story from the perspective of a young daughter of activist parents. She wrote: “Growing up with the KDP has taught me many lessons I use in life. I have seen the world from many different perspectives. I know about my parents’ struggles that opened the doors for my generation. By teaching me their beliefs and causes, my parents have given me the best possible gift: at fifteen, I had knowledge and an understanding most of my friends did not.”

And Odette’s partner David Della wrote two chapters: “A Little Red Book,” and “A Day I’ll Live with for the Rest of My Life.” In the latter chapter, Dave narrates how he nearly died at the hands of dictator Marcos’s agents. He was lucky that he arrived late for a meeting with his two close friends and anti-Marcos trade unionists, Silme Domingo (the brother of Cindy) and Gene Viernes. The hired guns of Marcos assassinated the two unionists inside the union’s office in downtown Seattle. The names of Domingo and Viernes are now enshrined in the Bantayog ng mga Bayani.

The KDP’s membership was not restricted to Filipinos and Filipino-Americans. In the book, the Caucasian-American journalist Elaine Elinson describes how she and comrades conducted propaganda to denounce bad people like dictators Marcos and Somoza and their master, Reagan.

The volume thus combines personal stories — some happy and light, others bittersweet or painful — with readings on lessons of the struggle. With respect to the latter, Rene Ciria Cruz’s Introduction is both a short history and a critical summing-up of KDP’s work and experience. He concludes: “Alienated from the main body of the Philippine Left and unmoored by the collapse of the socialist paradigm, the remaining members of the KDP family voted to disband the organization in 1986.”

I do not wish to delve into the relationship of the KDP with the Communist Party of the Philippines (CPP). Suffice it to say that KDP was once under the CPP but was compelled to separate from it because of ideological and political differences.

An interesting episode was the KDP’s shift of its strategy and tactics to pursue a broad democratic front that included anti-Marcos but anti-communist forces. This was a similar idea, known as popular democracy, cultivated by homegrown revolutionaries like the late Boy Morales, Edicio de la Torre, Gani Serrano, et al. Such would have led to an alliance with liberal democrats and social democrats and the CPP’s participation in the snap presidential elections. The dynamics of the snap elections created the conditions that overthrew dictatorship and installed Cory Aquino as president. But the CPP took a position of boycotting the elections.

The communist Left’s participation in the elections and its tactical support for Cory Aquino could have shaped history in a different course. Even the CPP accepted that its boycott was a “tactical blunder.” I disagree though that the error was tactical. It was a strategic one.

But what would have been the counterfactual? Assuming the CPP supported Aquino and would therefore have been a pivotal player in the post-dictatorship transition, would it have been able to sustain the political gains?

It depends on whether one agrees with Ciria Cruz, when he acknowledges “the collapse of the socialist paradigm.”

In other words, for the Left to advance, the socialist paradigm likewise has to be overhauled. Absent that, not only the CPP but also the other Left forces will remain marginalized and they can taste the whiff of power only by hanging on the coattails of what they call “class enemies.”

Many activists, including myself, have gone through many failures or defeats in what seems to be an interminable struggle. We made our choices. The movement, including the bad experiences, made us mature and wise. We are now better people.

I thus echo what Edwin Batongbacal said, “No regrets.”

 

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

Fake news: up close and personal

It was only a few days after the Securities and Exchange Commission (SEC) en banc found “Rappler, Inc., and Rappler Holdings Corporation, a mass media entity, and its alter ego violating the constitutional and statutory Foreign equity Restrictions in Mass Media enforceable through laws and rules within the mandate of the Constitution” (SP case No. 08-17 001 Decision dated January 11, 2018). “President Rodrigo Duterte hit Rappler anew (not the first time) just as it reeled from the SEC revocation of its registration over supposed foreign ownership (absolutely not allowed under the Constitution)” (CNN Philippines, January 17, 2018).

“Duterte was particularly irked by Rappler’s report citing documents that Special Assistant to the President Bong Go intervened in a multibillion-peso project for the Philippine Navy. The President slammed the news item, calling the site a peddler of fake news (Ibid.).” Bong Go denied endorsing to Defense Secretary Delfin Lorenzana, Hanhwa Thales, a South Korean company, to provide the combat management system (CMS) of two brand new Navy frigates to be built by Hyundai Heavy Industries (Ibid.). Sec. Lorenzana denied firing former Philippine Navy chief Ronald Joseph Mercado, who preferred the Thales Tacticos CMS.

“Your articles are rife with innuendos and pregnant with falsity. We don’t intervene with the affairs of the Armed Forces. You can stop your suspicious mind from roaming somewhere else. But since you are a fake news outlet and I am not surprised your articles are also fake,” Duterte was quoted to have said (Ibid.).

And so the SEC-Rappler issue on foreign ownership morphed into a Fake News accusation and a counter-claim of press freedom curtailment. Opinion columnist Randy David said: “There’s no question about it: Rappler’s legal troubles were triggered by its commentaries and criticisms of President Duterte and his policies. Mr. Duterte has said many times that he finds these criticisms unfair, and that he will not take them sitting down. Rappler’s persecution follows a clear pattern under this administration (Philippine Daily Inquirer, Jan. 21).

While Rappler was busy trying to appeal their foreign ownership issue — clearly and objectively a separate matter in the eyes of the regulator SEC — the Senate put together their second hearing on Fake News (the first was in October, 2017), purportedly to evolve legislation to control or define this, as it ingrains into the “New Normal” (live on CNN Philippines, Jan. 30).

Perhaps the Manila Times editorial subsequent to the Senate “investigation in aid of legislation” describes well how the whole televised exercise came across to many: “At the second hearing on fake news by the Senate committee on public information and mass media, we were startled to witness how the process turned into a smorgasbord of freewheeling and self-serving statements by its many resource persons”(The Manila Times, February 1).”

“Things would have been different had the Senate committee requested its resource persons to present coherent and concise statements on their thinking and recommendations on how to best address the fake news problem, instead of just letting everyone orate to promote their own self-interests (Ibid.).”

Yet in the next breath, The Manila Times editorial said: “Maria Ressa, chairman and CEO of the beleaguered Rappler organization, had the effrontery to make this insinuation (that the paper is controlled by Duterte) on the flimsy ground that President Duterte appointed last year our chairman emeritus, Dr. Dante Ang, as special envoy for international public relations of our government (Ibid.).” Up close and personal!

And Senator Manny Pacquiao, at the Senate hearing, seemed livid at now Presidential Communications Undersecretary Lorraine Badoy who posted in her blog in 2016 that Pacquiao, (then a Senatorial candidate) a Christian, was maintaining his mistress in a subdivision (the house later turned out to be Pacquiao’s staff’s). Pacquaio did not stop until he elicited a public apology from Badoy who admitted her sources were subdivision guards and a vendor of taho (ABS-CBN, Jan. 30).

Badoy recovered her “dignity” by publicly declaring at the Senate hearing, “The Vice-President (Leni Robredo) is one of the primary purveyors of fake news and the President may be an even bigger victim than she is (GMA News, Jan. 30).” After Badoy, veteran journalist Ellen Tordesillas said “fake news” in the country is primarily spread by no less than President Rodrigo Duterte. She lamented how misinformation is spread using taxpayers’ money (ABS-CBN, Jan. 31). At the Senate hearing, Tordesillas said Vera Files is keeping a tally of how many lies the President told in each speech. Rappler corroborates this: “The President knows who produces fake news in the Philippines, and it certainly is not Rappler. He doesn’t have to look far from where he sits in Malacañang (CNN Philippines, Jan. 17).”

Vergel Santos, director of the Center for Media Freedom and Responsibility, said in a 2006 talk show already dissecting this Fake News monster: “there is no such thing as good news or bad news. There is only news. It’s good or bad depending on who views it (Ellen Tordesillas blog: “Curtailing freedom of expression redux,” Jan 22 2018, citing Santos). All the personal hatred, and all that scheming, manipulating grasping for power, besmirching reputations, changing perceptions! In the Christian Ten Commandments, there is the eighth commandment that says, “You shall not bear false witness against your neighbor (Ex 20:16).”

Tordesillas pointed out that “there are moves in the House of Representatives to insert the words ‘responsible exercise’ in the freedom of speech part in the Constitution’s Bill of Rights, a revival of the same attempt made by the government of Gloria Arroyo in 2006 (Ibid.).” “But the proposed change in the freedom of expression provision strikes at the core of our basic rights as a citizen of a democratic country. The key change here is in the word ‘responsible’. Who will determine what responsible exercise of freedom of speech is? Who will determine what a responsible press is? Who will determine responsible petition for redress of grievances?” (Ibid.)

In other words, there is no ready solution to the proliferation of fake news in our country, or even in the world, where other countries are getting alarmed about this malady. The point to remember is that the surge of freedom from the convenient facility that is social media gives must be balanced with the exacting demand for verifiable sources and statistics — we just do not fight others’ battles by believing and joining in on “viral” opinions and perceptions. If it’s up close and personal for the ones attacking others, and up close and personal for the “victims,” it must be up close and personal for the individual third party-reader/listener to Fake News to determine and discern what is objectively true, and what is subjective and colored by personal motivations.

In the end, each and every one must have to live and survive in the Real World, not in the Fake World of Fake News.

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Seven-year Treasury bonds to fetch higher rates

TREASURY BONDS (T-bonds) on offer tomorrow are likely to fetch higher yields on the back of higher US Treasury yields and heightened inflation expectations.

The Bureau of the Treasury plans to raise as much as P20 billion during Tuesday’s auction of fresh seven-year T-bonds set to mature on Feb. 8, 2025.

“I would expect [Tuesday’s auction] to be higher. I would expect the market to bid up the rate close to the 5% level,” a trader said in a phone interview.

Another trader projected the yields to land within the 4.875-5.125% range “to reflect recent upward trend in US treasury yields and higher inflation expectations.”

On Friday, the 10-year US Treasury climbed to a four-year high of 4.85% on the back of higher payrolls and rising wages.

Last month, the US created additional 200,000 jobs, higher than the market consensus around an increase of 180,000 jobs and the 148,000 jobs booked in December. 

The growth in average hourly earnings sped up to 2.9% in the 12 months ending last month, with a month-on-month growth of 0.3% in January, data released by the US Labor Department on Friday showed.

The upbeat economic data prompted investors to expect accelerating US inflation.

On the demand side, the traders said Tuesday’s auction is unlikely to be oversubscribed, with a trader saying: “If ever bids will exceed the offer only because they (market players) commanded higher yields.”

“The market will demand of the seven-year papers depending on the rate. But in my opinion, if it’s not [within the 5% level], walang makikitang demand (demand will be absent),” the second trader said.

Should the Treasury accept bids at 5%, the trader projected rates in the secondary market to climb “conservatively by 20 basis points” from its current levels.

“But if they decide to reject [some bids], I expect the market to be quiet or everybody will stay on the sidelines just to watch,” the trader said, adding that the Treasury can reject unreasonable bids on the back of its healthy cash position.

The trader cited the issuance of retail Treasury bonds in December which raised P255.4 billion as well as the dollar-denominated global bonds where it raised $750 million of fresh funds while swapping $1.25 billion worth of old bonds.

At the secondary market on Friday, the seven-year bonds were quoted at 5.7146%.

During its last offer of seven-year bonds in October, the government fully awarded the reissued papers, as banks ditched the central bank’s term deposit facility for government securities and as yields inched down a notch.

The Treasury plans to auction off P120 billion worth of Treasury bills and another P120 billion worth of Treasury bonds in the January to March period. This is higher than the P200 billion the BTr offered in the last quarter of 2017.

The government borrows from local and foreign sources to fund its budget deficit, which for this year is capped at 3% of the country’s gross domestic product.

The government has set a P888.23-billion gross borrowing plan for this year, 22.05% higher than last year. — Karl Angelo N. Vidal

Ayala to spend over P200 billion in 2018

By Arra B. Francia, Reporter

THE AYALA GROUP will be setting aside over P200 billion in capital expenditures this year, a top official said last week.

Ayala Corp. (AC) Chief Finance Officer Jose Teodoro K. Limcaoco said the conglomerate’s spending plan this year will be bigger than the P185 billion it has set for 2017, as it continues to grow its property, telecommunications, water, power, industrial, health care, and education businesses.

“As a group, it’s bigger than the 2017 plan… It’s more than P200 billion,” Mr. Limcaoco told reporters in Makati City on Friday.

In previous years, Ayala Land, Inc. (ALI) has cornered bulk of the group’s capex.

In a separate interview, ALI Chief Finance Officer Augusto Cesar D. Bengzon said they are likely to spend over P100 billion next year.

“This year so far it looks like there’s demand, so we’ll probably launch similar, if not a greater amount of residential projects… More projects equals to more capex,” Mr. Bengzon said.

Meanwhile, Mr. Limcaoco noted AC’s banking unit, Bank of the Philippine Islands, will be conducting a stock rights offering, which will be considered part of the capex.

“Just the BPI rights offering, that’s capex already for us. And we will take our proportionate share, BPI believes they’re trying to do a rights offering of P40-50 billion. We’re about 48%, so we’re talking P20-25 billion,” Mr. Limcaoco said. 

AC’s core businesses also include Globe Telecom, Inc. and Manila Water Co., Inc. The country’s oldest conglomerate has also been ramping up the development of its industrial, power, education, and health units to further accelerate growth.

DUE DILIGENCE
The listed conglomerate earlier disclosed it is looking at the potential merger of its education unit, Ayala Education, Inc. (AC Education) with the Yuchengco group’s House of Investments, Inc. (HI). AC Education currently has a total of 23 schools, the largest stand-alone chain of private high schools in the country.

On the other hand, HI’s iPeople, Inc. operates Mapua University through Malayan Education System, Inc. Mapua has two subsidiaries, Malayan Colleges Laguna and Malayan Colleges Mindanao.

“We’re doing due diligence now. The goal is to sign definitive agreements by the first quarter and then seek approval from the PCC (Philippine Competition Commission) thereafter,” Mr. Limcaoco said.

Should the proposed merger push through, AC and the Yunchengco group will be able to cover the full spectrum of the education cycle. Mr. Limcaoco also noted one of the goals is to further develop APEC schools.

“I think we’re at 23 schools today, and I think we’re trying to work on the 23 first. I guess we will have to work with the Yuchengcos when this merger pushes through to see what happens,” he said. 

HEALTH CARE
Meanwhile, the AC executive said they are looking to include hospitals under its health care business as well. ALI, which operates the chain of Qualimed hospitals along with the Mercado medical group, is mulling the sale of its hospital business.

With this, Mr. Limcaoco said they looking at transferring the business under Ayala Healthcare Holdings, Inc.

“We will participate if we think the values are right. Pwedeng kami ang bumili (We can buy it). But we have a partner there, so the partner has to agree also,” he said.

AC has a five-year target to hit a net income of P50 billion by 2020, banking on the growth of its core and relatively newer businesses.

The conglomerate’s attributable profit stood at P23.2 billion in the first nine months of 2017, 18% higher year on year, following a 21% increase in revenues to P170 billion during the period.

Peso seen weakening on upbeat US jobs data, Fed

THE PESO is seen to weaken against the dollar this week as upbeat US economic data and hawkish remarks from Federal Reserve officials will likely support the greenback.

On Friday, the local currency recovered against the dollar, ending at P51.45 per dollar, on the back of profit taking and a surge in remittances.

“The dollar might continue to appreciate as a trend this week because of upbeat US economic reports, likely hawkish remarks from various US Federal Reserve officials, and possibly mixed data from the Philippines,” Guian Angelo S. Dumalagan, market economist of Land Bank of the Philippines (Landbank), said in an e-mail on Saturday.

US job growth surged in January and wages increased further, recording their largest annual gain in more than 8-1/2 years, bolstering expectations that inflation will push higher this year as the labor market hits full employment.

Non-farm payrolls jumped by 200,000 jobs last month after rising 160,000 in December, the US Labor Department said on Friday.

The unemployment rate was unchanged at a 17-year low of 4.1%. Average hourly earnings rose 0.3% in January to $26.74, building on December’s solid 0.4% gain.

That boosted the year-on-year increase in average hourly earnings to 2.9%, the largest rise since June 2009, from 2.7% in December. Workers, however, put in fewer hours last month likely because of bitterly cold weather.

Mr. Dumalagan said the hourly earnings data is the “leading indicator of inflation.”

The robust employment report underscored the strong momentum in the economy, raising the possibility that the Federal Reserve could be a bit more aggressive in raising interest rates this year. The US central bank has forecast three rate increases this year after raising borrowing costs three times in 2017.

Mr. Dumalagan added that likely firm US non-manufacturing data and hawkish remarks from some Fed officials might give the dollar a boost.

This week, Fed officials James B. Bullard and William C. Dudley, among others, will deliver speeches which may fuel expectations of more US rate hikes this year, Landbank’s chief economist said.

“A small but growing minority of investors are already speculating of four US rate hikes this year, higher than the modal forecast of three,” he said.

Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, noted that locally, market players may look to the January inflation report for leads.

“[I’m looking at] expected high inflation rates due to impact of TRAIN,” Mr. Asuncion said in a mobile phone message, referring to the Tax Reform on Acceleration and Inclusion act.

For Mr. Dumalagan, although the Bangko Sentral ng Pilipinas is expected to keep its monetary settings steady in its meeting on Thursday, the stronger-than-expected inflation in January may prompt the central bank to tighten policy settings in future reviews.

The “cautious to hawkish” take of the central bank’s monetary policy meeting might temper dollar’s ascent, he noted.

For this week, Mr. Dumalagan expects the peso to move within P51.20 to P51.80, while Mr. Asuncion gave a slimmer range of P51.50 to P51.80.

“The factors that could reverse the dollar’s forecasted upward bias include any unexpected hawkish moves from the BSP and surprising dovish remarks from US policy makers, especially from incoming Fed Chair [Jerome H.] Powell,” Mr. Dumalagan added. — K.A.N. Vidal with Reuters

Meralco considers new offer from Solar Philippines

By Victor V. Saulon, Sub-Editor

DISTRIBUTION UTILITY Manila Electric Co. (Meralco) expects its required solar power capacity to grow, as it considers the new offer from Solar Philippines Power Project Holdings, Inc. on top of a separate offer from Lopez-led First NatGas Power Corp., its chairman said.

“We’re trying also to diversify our fuel sources, just in case, because for example if a typhoon hits a particular area wala ka nang (you won’t have) solar power so kailangan you (need to) have other sources. So it’s good for Meralco to diversify,” Meralco Chairman Manuel V. Pangilinan said. 

He confirmed receiving an offer from Solar Philippines President Leandro L. Leviste for solar power at P2.99 per kilowatt-hour (kWh), a price that is lower than electricity sourced from gas-fired power plants.

Last month, Mr. Leviste disclosed an offer for 24/7 power after Meralco invited price challengers to an unsolicited proposal from First NatGas for the supply of 414 megawatts (MW).

Solar Philippines said it made an the offer after Meralco declared a failure of bidding in a competitive selection process (CSP), in which no company qualified to challenge the proposal of First NatGas.

However, the CSP requirement was for the fuel for the power generation of the price challenger to be the same as the original power supplier, which is natural gas.

“Meralco may now choose whether to re-bid this under the same terms, or amend the terms to allow other technologies to compete on the basis of cost,” Solar Philippines had said.

Mr. Pangilinan described First NatGas’ offer as a “high price,” without disclosing a figure.

“In a way it’s different because natgas is gas, and solar is solar. It can’t be all solar. It can’t be all coal. It can’t be all gas,” he said.

“Part of our mandate is to source the least cost and we take that very seriously. On the other hand, we should also diversify the sources because if we are dependent on just a single source then that’s not good,” he said.

Asked whether Meralco would consider both offer, Mr. Pangilinan said: “Yes, of course.”

He said at present, Meralco sources 35% of the power it distributes to consumers from natural gas-fired plants. Solar power accounts for a small portion, he added.

“It’s (solar) not big but it will be growing. We could see that it will be,” he said. 

BIR says Mighty’s excise taxes surge in last 4 months of 2017

CIGARETTE TAX collections on Mighty Corp. brands surged 262% to P20.22 billion in the last four months of 2017, after Japan Tobacco International (JTI) took over the local company, according to data from the Bureau of Internal Revenue (BIR).

A Department of Finance (DoF) statement quoted BIR Commissioner Caesar R. Dulay as saying the excise tax payments on Mighty brands rose by P14.65 billion during the September to December period, from the P5.57 billion during the same period in 2016. 

The P4-billion increase in monthly excise tax payments from Mighty is bigger than the Department of Finance’s (DoF) earlier estimate of P2 billion in additional tax payments.

Mighty Corp.’s tobacco payments for the last four months of 2017 represented 28.38% of the overall excise tax collections of P71.24 billion in the same period — which was 26.68% higher from 2016’s P56.24-billion take.

During the September to December period, excise tax collections from the tobacco industry accounted for 57.4% of the total excise tax collections or P40.91 billion. Other sources of excise payments include alcohol, fuel, automobiles, minerals, and non-essential goods, among others. 

“What stands out there is the Mighty-JTI improvement in collections as they represented 262% improvement from September to December,” Mr. Dulay said. 

Mighty Corp. in July last year offered to settle its tax liabilities for P25 billion and sell its business to JTI to exit the tobacco business, after agents of the BIR and Bureau of Customs raided its warehouses in Pampanga, Bulacan, and General Santos City. 

The BIR later filed before the Department of Justice three criminal complaints against Mighty for its use of counterfeit revenue stamps and non-payment of excise taxes. 

From the tax settlement and the sale of Mighty’s assets to JTI, the government has so far collected about P30 billion, which is the largest sum of taxes ever collected from a single corporate entity. 

Finance Secretary Carlos G. Dominguez III earlier said JTI might have been “front-loading stocks” of Mighty brands during the September-December period in anticipation of the increase in excise tax payments in 2018.

Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act (TRAIN) imposes a P32.50 excise tax per cigarette pack starting this year, from 2017’s P30 per pack. This will increase gradually to P40 by 2022.

The DoF has said it will support Senator Emmanuel “Manny” D. Pacquiao’s bill to raise the tobacco excise tax further to P60 per pack under the so-called Package 2+ expected to be submitted to Congress by mid-February.

JTI Philippines Managing Director Manos Koukourakis has said that instead of increasing taxes further, the government should look at curbing cigarette smuggling, which is said to became more rampant after the imposition of new taxes. — Elijah Joseph C. Tubayan

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