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The 2018 National Budget, Infrastructure, and Economic Growth

The government slogan “Build, build, build!” resonates for many, especially those who have some grounding on economic growth theories. In a serious attempt to address the country’s decrepit infrastructure, the administration decided to pour in funds for “hard infrastructure” and implement projects that are physically necessary to facilitate trade and improve the country’s business climate.

The primacy of infrastructure development is very evident in the national budget for 2018 given the lofty sum apportioned to the sector. In his budget message in July 2017, President Duterte himself said that there was P1.097 trillion ($22.03 billion) to be allocated for infrastructure development in 2018. This is nearly one-third of the total 2018 national budget. To illustrate, the Department of Public Works and Highways (DPWH) will receive the largest departmental allocation in the 2018 national budget. DPWH, given its infrastructure development programs, will get P637.86 billion ($12.8 billion) — even surpassing the P553.3 billion budget of the Department of Education (DepEd), which usually receives the highest allocation among all government agencies. This is equivalent to 16.9% of the country’s total 2018 budget and is higher by 40.3% from the previous year’s budget. This budget will primarily be available for the construction, rehabilitation, and improvement of transportation infrastructure and flood control systems.

In addition, the Department of Transportation (DoTr) has been provided with P66.3 billion ($1.33 billion). This is a 24.4% increase in its annual budget compared to its allocation in 2017. In line with its mandate, the DoTr budget should allow for the provision of a safe, affordable, and comfortable public transportation system, especially big-ticket railway projects.

Then there is the P10-billion ($201 million) budget — predominantly allotted for infrastructure projects — to support the rebuilding and rehabilitation of Marawi, which has been shattered by a catastrophic siege that has resulted in severe human and physical damage.

Several studies on the growth of national economies show how transport infrastructure improvements (including road networks, airports, railways, ports, and logistics) have led to increased trade flows. Infrastructure, particularly information and communications technology (ICT), also strengthens trade, as the density in numbers of telephone lines, mobile phones, broadband access, Internet users, and secure Internet servers have a positive impact on trade for both exporters and importers.

Relatedly, it has been shown that, in lower-income countries, domestic revenue collections have a positive effect on firm performance, which could be channeled into the financing of public infrastructures that are vital to firms. Indeed, it has also been revealed in studies that tax revenue resources had a positive effect on infrastructure development. These studies recommend that the government should provide the necessary human and material infrastructure that are needed to support seamless tax collection so increased revenues can really enhance development.

Note that the National Budget for 2018 is intimately tied to the Comprehensive Tax Reform Package (CTRP) being nurtured by the government. The recently signed Tax Reform for Acceleration and Inclusion Law, the first package of the CTRP, seeks to lower personal income tax rates, limits value-added tax exemptions, introduces tax administration measures and raises excise taxes on several commodities, while generating the requisite funds for infrastructure spending, education, health and other social safety nets. This is seen as crucial for sustaining long-term economic growth.

While the government’s goals sound very rational and sensible, serious governance-related concerns remain.

For one, there is a need for vigilance in ensuring that the government is more prudent in spending its budget, and more importantly, that the actual budget allocated is being used in the programs as designed. It would be helpful indeed if investing in infrastructure translates to improving the flow of the economy and thereby the mitigation of price increases and additional levies for everyone. Unfortunately, as it stands, key infrastructure agencies have yet to unlock the solution to addressing public spending bottlenecks. There is also a continuing need for additional measures by government in ensuring that taxpayers do not avoid and evade taxation so enough revenues can be tapped for the economy. Authorities responsible for taxation should be strengthened and made more accountable in enforcing compliance by taxpayers.

It is only in this end that the national budget may be more fully and concretely seen as a real tool for national development.

Otherwise, for many Filipinos, especially the regular Juan and Juana, whose immediate concerns are about the daily sustenance of their families, this “Build, build, build!” slogan would only be an empty promise.

 

Louie C. Montemar is a Fellow of Stratbase ADR Institute.

From Reagan to Trump, and maybe Oprah, American celebrity politicians abound

WASHINGTON — Talk show queen Oprah Winfrey’s impassioned Golden Globes speech triggered speculation about her political future.

A 2020 presidential race between Oprah and Donald J. Trump, himself a TV titan, would be the celebrity-political battle of the millennium, made for — and by — television.

But they are by no means the first American screen stars to throw their hats in the political ring. Here are some notable standouts.

THE GREAT COMMUNICATOR
Prior to Trump, there was Ronald Reagan, the celebrity who achieved the greatest success in politics. Mr. Reagan earned notoriety as an actor in films like Knute Rockne, All American, in which he starred as football player George “The Gipper” Gipp.

He identified first as a Democrat but switched parties in the 1950s.

Elected twice as president of the Screen Actors Guild, the charismatic Mr. Reagan became California’s Republican governor in 1967, and won a landslide presidential victory in 1980 against Jimmy Carter.

OTHER HOLLYWOOD STARS
Mr. Reagan paved the way for several other silver-screened politicians, most notably Arnold Schwarzenegger.

The former Mr. Universe bodybuilder and star of the Terminator movies followed Mr. Reagan’s path to political stardom by becoming governor of California in 2003. But Mr. Schwarzenegger was born in Austria, meaning he could never serve as president.

Fred Thompson, who had roles in Die Hard 2 and The Hunt for Red October, parlayed his celebrity into a political career, serving as a Republican in the US Senate from 1994 to 2003. He ran unsuccessfully for president in 2008, and returned to acting.

Actor-filmmaker Clint Eastwood, star of Hang ‘Em High and director of Million Dollar Baby, has been involved in political issues for decades. From 1986 to 1988, he served as mayor of Carmel-by-the-Sea, California.

THE WRESTLER
Perhaps the most colorful television personality to enter US politics is Jesse “The Body” Ventura, a former Navy SEAL who became a popular bad-boy wrestler in the World Wrestling Federation, watched by millions in the 1970s and 80s.

His joke candidacy for governor of Minnesota in 1998 gained traction as he pushed a populist platform.

Seen as a precursor to Mr. Trump’s wild win in 2016, Minnesota voters sent a message to business-as-usual politicians, narrowly electing the bombastic wrestler.

Today, professional wrestling has made it to the White House. Linda McMahon, the ex-chief executive of WWE and a former Senate candidate herself, now heads the Small Business Administration under Mr. Trump.

TALK AND REALITY SHOW STARS
Jerry Springer became host of a tabloid-themed talk show in the 1990s, after serving as mayor of Cincinnati for a year from 1977. Mr. Springer also mulled runs for US Senate in 2000 and 2004, but did not formally enter the race.

Reality TV star Sean Duffy, a cast-member on MTV’s The Real World: Boston, is currently a Republican congressman from Wisconsin.

Sonny Bono and his pop-star wife Cher scored a huge television hit with 1970s variety program The Sonny & Cher Show. Mr. Bono served three years in the House of Representatives in the 1990s.

TV COMEDIANS
Late-night comedy sketch show Saturday Night Live has skewered American politics for decades, but it also produced a political star. Comedy actor Al Franken narrowly won a US Senate seat in 2008, only to resign last week following multiple accusations of sexual misconduct.

Two other television comedies produced members of Congress: Ben Jones, who played Cooter in good ol’ boy 1980s show The Dukes of Hazzard, and Fred Grandy of The Love Boat fame. — AFP

Military denies NPA claim on gov’t casualties

ASIDE FROM intensified clashes on the ground, the military and the rebels here have been fighting over the number of soldiers killed by rebel attacks during the last week of 2017. The military, through Maj. Gen. Noel Clement, commander of the 10th Infantry Division, denied the rebels’ claim that 26 soldiers were killed during a series of encounters in the Davao Region just a week before new year. He said the military “does not hide its casualties and always states facts based on results of the encounters.” “That is purely a propaganda statement to project an imagined strength of this terrorist organization,” he added as his rebuttal to Rigoberto Sanchez, spokesperson of the New People’s Army (NPA) in Southern Mindanao. Mr. Sanchez claimed the soldiers were killed during the defensive tactical operations of the rebels while both were implementing their respective cease-fire. “The tactical offensives against the rabid reactionary armed forces serve to underscore the growing demand to overthrow Rodrigo Duterte from power” said Mr. Sanchez. He identified the encounter sites as those in the areas of Davao Oriental and Compostela Valley. — Carmelito Q. Francisco

PSE extends suspension on trading of PAL shares

THE Philippine Stock Exchange has approved PAL Holdings, Inc.’s request to extend its trading suspension until Jan. 11, to give the company more time to file the necessary disclosures in relation to its planned quasi-reorganization.

“The present request for extension of trading suspension is made in order to allow the company to make the necessary disclosures requested by the Exchange in relation to the number of the Corporation’s issued and outstanding shares resulting from the amendments of the par value of its shares and the issuance of new shares,” the company said.

The extended trading suspension will run from Jan. 10 to 11.

PAL Holdings, which operates flag-carrier Philippine Airlines, initially sought for a voluntary trading suspension from Jan. 3 to 9, in line with the Securities and Exchange Commission’s approval to decrease PAL Holdings’ authorized capital stock to P13.5 billion from P30 billion, resulting from the decrease in par value of each share to 45 centavos from P1. 

The SEC further approved the increase in par value of each share to P1 from 45 centavos, as a result of the decrease in the number of shares corresponding to the authorized and subscribed capital stock of the company.

The company also secured approval for the valuation of shares for a proposed share-swap transaction with Zuma Holdings and Management Corp. The transaction will allow PAL to issue 19 shares for each Zuma share surrendered.

With this, PAL Holdings will issue a total of 1.65 billion shares from its authorized but unissued capital stock to Cosmic Holdings Corp. and Horizon Global Investments Ltd., which own 60% and 40% of Zuma, respectively.

Zuma is the majority owner of Air Philippines Corp., which is an affiliate of PAL Holdings.

PAL Holdings’ capital restructuring looks to clean up the company’s balance sheet, as it seeks the entry of a new investor group. The company announced as early as 2014 that it is talking with potential investors to help manage its fleet.

The company swung to a net loss of P4.95 billion in the first three quarters of 2017, from a P2.55 billion net profit recorded in the same period in 2016. Revenues, meanwhile, climbed by 16% to P98.6 billion during the same period.

PAL Holdings’ last trading price was at P5.15 per share, recorded last Dec. 29, 2017. — Arra B. Francia

Nissan’s new technology: mind controls car

NISSAN Motors has chosen the CES 2018 trade show — ongoing until Jan. 12 in Las Vegas, Nevada — to demonstrate a technology that will enable vehicles to interpret signals from the driver’s brain, redefining how people interact with their cars.

The car maker said its Brain-to-Vehicle (B2V) technology, the latest development in the Nissan Intelligent Mobility program, “promises to speed up reaction times for drivers and will lead to cars that keep adapting to make driving more enjoyable.”

Nissan said the technology is the result of research on brain decoding technology. By catching signs that the driver’s brain is about to initiate a movement — like turning the steering wheel or pressing the accelerator — the system is able to predict and assist in the action more quickly. The technology can also detect and evaluate when the driver is not comfortable over the vehicle’s behavior when it’s set to autonomous mode, and will alter driving style accordingly.

“When most people think about autonomous driving, they have a very impersonal vision of the future, where humans relinquish control to the machines. Yet B2V technology does the opposite by using signals from their own brain to make the drive even more exciting and enjoyable,” said Daniele Schillaci, an executive vice-president at Nissan.

Other possible uses include adjusting the vehicle’s internal environment, said Lucian Gheorghe, senior innovation researcher at the Nissan Research Center in Japan, who’s leading the B2V research. He cited the technology can use augmented reality to adjust what the driver sees and create a more relaxing environment.

The car maker explained B2V calls for the driver to wear a device that measures brain wave activity. This is then analyzed by autonomous systems that can react 0.2 seconds to 0.5 seconds faster than the driver.

A concert played in complete darkness

EXPERIENCE a concert in total darkness as the Goethe-Institut Philippinen brings renowned German musicians in a concert entitled, Concert in the Dark on Jan. 17 at the University of the Philippines (UP) Diliman.

Andreas Martin Hofmeir on the tuba and Barbara Schmelz on the piano will perform pieces from different composers around Europe in a program dubbed the “European Journey.”

The repertoire includes classics by Schubert, Schumann and Wagner.

Concert in the Dark is part of a series of musical engagements organized by the Goethe-Institut in Southeast Asia called anders hören or “listen differently.” This annual offering is meant to introduce the audiences in the region to not-so-common forms of appreciating music.

A professor at the Universität Mozarteum Salzburg (University of Music and the Performing Arts Mozarteum Salzburg), Mr. Hofmeir founded the popular Bavarian band LaBrassBanda and is a multiple award-winning cabaret performer.

He is a sought-after soloist and chamber musician and has given master classes all over the world. In 2004 he won the prestigious “Città di Porcia” International Tuba Competition and until 2008 was the solo tubist of the Bruckner-Orchester Linz under the baton of Dennis Russell Davies.

Meanwhile, Ms. Schmelz is a renowned product of the Universität Mozarteum.

Salzburg and the Royal Academy of Music in Copenhagen.

She heads the established concert series Musiktage Waging and is currently working as regional cantor in the church music department of the Diocese of Passau.

Her broad musical spectrum ranges from concertante and liturgical organ playing to singing, choir and conducting to improvisation, whereby the connection of music and liturgy plays an emphasized role.

Concert in the Dark is on Jan. 17, 7 p.m. at the Aldaba Recital Hall of UP Diliman.

Admission to the concert is free on a first-come-first-served basis. For more information, go to Goethe.de/Manila.

North Korea to send team to Winter Games

SEOUL — North Korea said during rare talks with the South on Tuesday it would send a delegation to the Pyeongchang Winter Olympics in South Korea next month and Seoul said it was prepared to lift some sanctions temporarily so the visit could take place.

At the first formal talks with South Korea in more than two years, North Korean officials said their delegation to the Games would consist of athletes, high-ranking officials and a cheering squad.

The talks are being closely watched by world leaders eager for any sign of a reduction in tension on the Korean peninsula, amid rising fears over North Korea’s missile launches and development of nuclear weapons in defiance of United Nations Security Council resolutions.

South Korea has unilaterally banned several North Korean officials from entry in response to Pyongyang’s ramped-up missile and nuclear tests, held despite international pressure.

However, some South Korean officials have said they see the Olympics as a possible opportunity for easing tension.

Foreign ministry spokesman Roh Kyu-deok said Seoul would consider whether it needed to take “prior steps,” together with the UN Security Council and other relevant countries, to help the North Koreans visit for the Olympics.

At Tuesday’s talks, the first since December 2015, Seoul proposed inter-Korean military discussions to reduce tension on the peninsula and a reunion of family members in time for February’s Lunar New Year holiday, South Korea’s vice unification minister Chun Hae-sung said.

The North has finished technical work to restore a military hot line with South Korea, he added, with normal communications set to resume on Wednesday. But Mr. Chun did not immediately say what information would be transferred along the hot line.

The North severed communications in February 2016, following the South’s decision to shut down a jointly run industrial park in the North.

South Korea also proposed that athletes from both sides march together at the Games’ opening ceremony and other joint activities during the Winter Olympics, Mr. Chun told reporters outside the talks.

Athletes from the two Koreas have paraded together at the opening and closing ceremonies of major international games before, although this has not been seen since the 2007 Asian Winter Games in China, after relations chilled under nearly a decade of conservative rule in the South.

It would also be the first time since 2005 that the North will send its female cheerleaders, dubbed the “cheering squad of beauty” by the South Korean media.

‘PEACE HOUSE’
The meetings continued on Tuesday afternoon after the two sides broke up for separate lunches. Officials began speaking at 10 a.m. (0100 GMT) in the three-storey Peace House just across the demilitarized zone on the South Korean side of Panmunjom truce village.

“North Korea said that they are determined to make today’s talks fruitful, and make it a groundbreaking opportunity,” South Korea’s Mr. Chun said.

Mr. Chun also said the South Koreans proposed resuming negotiations over the North’s nuclear program, but there was no specific response from the North.

However, North Korean officials said during the meeting they were open to promoting reconciliation through dialogue and negotiation, according to Mr. Chun.

The head of the North Korean delegation, Ri Son Gwon, said, “We came to this meeting today with the thought of giving our brethren, who have high hopes for this dialogue, invaluable results as the first present of the year…”

North Korea entered the talks with a “serious and sincere stance,” said Mr. Ri, chairman of the North’s Committee for the Peaceful Reunification of the Fatherland.

South Korean Unification Minister Cho Myoung-gyon expressed optimism as the meeting began.

“Our talks began after North and South Korea were severed for a long time, but I believe the first step is half the trip,” said Mr. Cho. “It would be good for us to make that ‘good present’ you mentioned earlier.”

“Everything feels slightly new as we have not had talks in a while,” he said.

Just before the delegation drove into the demilitarized zone, about 20 South Koreans were seen waving a banner that read: “We wish the success of the high-ranking inter-Korean talks.”

One man was spotted waving a flag with a unified Korean peninsula.

Each side’s delegation consisted of five senior officials.

The North Korean delegation walked over the border inside the joint security area to the Peace House around 0030 GMT, an official from the South’s Unification Ministry told reporters.

The United States, which has 28,500 troops stationed in South Korea as a legacy of the 1950-1953 Korean War, initially responded coolly to the idea of inter-Korean meetings, but US President Donald J. Trump later called them “a good thing.”

Mr. Trump has said he would like to see talks go beyond the Olympics. “At the appropriate time, we’ll get involved,” he said. — Reuters

Con Ass: Potential Disaster

How easily we forget. It is only a generation ago when we marched in the streets for years to oust a dictator, and promised ourselves and the world “Never Again.” Now, here we are again being bamboozled backwards into authoritarian rule; and so far, not enough pushback is being heard, especially from the business community. Nada.

In 1984, a year after Ninoy Aquino was assassinated, and when I was part of the business community, a group of business executives and professionals were gathered together by the late Jimmy Ongpin and his Harvard and other Ivy League friends, including businessman Mon “Boy Blue” del Rosario, Dr. Alfredo “Alran” Bengzon and Jesuit Fr. Joaquin Bernas into a cause-oriented movement which they named Manindigan (To Take a Stand). The way we expressed our stand was to publicly protest in the streets, and publish our positions in the largely mosquito press, since Ferdinand Marcos controlled, through his cronies and the government, much of the mass media. Men and women who were used to wearing formal business attire began to sport blue jeans, T-shirts, and running shoes, and marched in the streets.

Being young enough then, I was thrilled to march side by side with highly educated colleagues who dropped their inhibitions and boldly risked their careers to fight the dictator.

What started as a small, ragtag band grew into a potent and loud challenge to the Marcos government. We marched from Santo Domingo Church to Plaza Miranda, down to Liwasang Bonifacio. In time, on Fridays, we marched on Ayala Avenue and began what became “the confetti revolution,” which featured dropping shredded yellow pages from tall buildings. From a ragtag band, our confetti revolution drew many business executives, senior and junior into our rallies.

Jimmy Ongpin and his friends put up Veritas, an activist newspaper edited by Melinda Quintos de Jesus and some of us began to criticize the government in our columns. The late dauntless Joe Burgos, (whose forebears include the martyred Padre Burgos), father of Jonas Burgos, whose whereabouts are unaccounted for to this day, began to publish his Malaya newspaper, pioneer of the Mosquito Press in hidden basements, which he moved from place to place.

In time, the heroic Letty J. Magsanoc together with print media icon Eggie Apostol Duran turned a women’s magazine, Mr. and Ms. into an activist medium which later evolved into The Inquirer. We in Manindigan were able to obtain op-ed space in Raul Locsin’s then Business Day newspaper; and continued writing in his Businessworld.

I am reminded of a poster I once saw which said “Revolutions begin in quiet places.”

Today, we have a rude, authoritarian, profane president who is getting high satisfaction ratings. And a House Speaker who has no compunctions about using his power to push his personal vendettas against his rumored foes. This is a Congress that seems to meekly follow the President’s expectations, whether they are legal or not. Senator Leila de Lima has been detained for over a year based on testimony of long-term convicts, who it is said, have enjoyed certain privileges. The judiciary, including the Chief Justice is under fire, and threatened with impeachment when no impeachable offense have yet been cited.

The Court of Appeals has dismissed several cases, despite strong evidence, including that of former Governor Joel Reyes who had been convicted in the lower courts of masterminding the murder of environmental and media activist Gerry Ortega. The CA has also rendered null and void the $10 billion due Marcos human rights victims which they had won in Hawaii.

Police Superintendent Marvin Marcos, who had been convicted with strong evidence of leading the group that killed detained Albuera, Leyte Mayor Espinosa inside his jail cell, has been promoted and reassigned, unscathed to Mindanao.

Already our freedom of the press is under siege with seeming threats to cancel broadcast franchises and related businesses of media owners. And so on and on.

Today, we are being rushed into a new Constitution, bandied about as in support of “Federalism.” There are proposals for No Election in 2019 and terms extensions for all elected officials, national and local, all the way, it seems, to 2030, because it is said it will take at least 10 years for the transition to a new form of government. This should please most incumbents. The new Constitution, it seems to have been decided, will be crafted by a Constituent Assembly, consisting of the present Congress. It is not yet clear if the Senate will vote separately from the House of Representatives. This House has already demonstrated its acquiescence to what the Speaker, or the President wants; and the Speaker has made no secret of his brazen carrot or stick approach to getting bills passed. Rodrigo Roa Duterte has made enough statements and decisions against human rights, which is provided for under the present Constitution. There is enough evidence of a rule of men rather than of laws.

1987 Constitutional Commission member Christian Monsod has made a case for there being enough provisions in the 1987 People’s Constitution and the Local Government Code of 1991 for decentralization of powers and budget authority; but that these have not been supported by proper execution. The LGUs still have not been given adequate budget authority despite the Code. This makes them still beholden to the central government. Local Autonomy has not adequately taken places intended.

Now, in lieu of an elected Constitutional Convention, we are being bamboozled into a Constituent Assembly, the rationale being the desire to save money (P6-10 billion or so), and time, to ensure that the new Constitution is ratified in May this year.

A federal form of government for us does make sense in many ways. The problem is, why the rush? And can we trust this government to do right by our people?

Sure, the economy is doing well, thanks to monetary technocrats in the Bangko Sentral ng Pilipinas (BSP) and systems put in place by the outstanding BSP Governor Amado Tetangco and a few economic technocrats such as Ernesto Pernia in the present Cabinet. The Build, Build, Build program is laudable if carried out efficiently and effectively with less corruption than has been SOP.

It is still possible that this government will deliver the goods on the economy and on infrastructure. Let us hope doubling salaries of uniformed government personnel does not turn out to be fiscally irresponsible, given that if carried out, other civil servants such as teachers and health workers would not take this sitting down, if their salaries are also not doubled. The business community seems quite pleased enough with the way things are going. And seem to be indifferent, or quiet regarding brazen human rights and due process issues.

But what is the price to our sense of decency, our descendants’ sense of right and wrong, our equal access to protection of human rights, including freedom of speech and due process whether or not they are favored by the President, or other politicians?

Even without Constitutional change, human rights and due process under the laws are already being violated and abused. We are in danger of becoming a banana republic. Will the business community stay quiet, if not acquiescent? Ninoy Aquino and other human rights victims must be turning in their graves.

 

Teresa S. Abesamis is a former professor at the Asian Institute of Management and an independent development management consultant.

tsabesamis0114@yahoo.com

City to come up with a list of establishments to be reevaluated

CITY PLANNING and Development Office (CPDO) head Ivan Chin Cortez in an interview said they will come up with a list of establishments that need to be reevaluated for safety worthiness to prevent fire incidents like the tragic NCCC fire. Mr. Cortez said usually it would be the big establishments like malls, hospitals, and hotels that need to be reevaluated. In Davao there are not more than 15 establishments including malls, hospitals and even hotels being considered for inspection. “This reevaluation is supposed to be a regulatory action pero ang aming lang (but for us, this) is just to avoid what happened,” Mr. Cortez said, adding there is already a directive to come up with such a list of establishments. He urges new establishments to maintain the integrity of their approved floor plan and also recommends that the Bureau of Fire Protection conduct regular inspection if their recommendations are being followed. — Maya M. Padillo

Unilever may hold line on prices, sees boost from tax reform program

UNILEVER Philippines, Inc. said it hopes to absorb higher costs where possible instead of passing them on to consumers, adding that it expects the tax reform program to have a positive impact overall on consumer spending.

It added that it expects the main drivers for higher consumer goods prices to be rising crude oil prices and the increased cost of Chinese raw materials.

Vice-president for Sustainable Business and Communications Ed Sunico on Tuesday said: “Crude oil went up to around $60/barrel [so] that will affect us. The tax reform law, not much really. We’re now looking at the crude oil price… plus the raw materials coming from China have been increasing in cost also so that will have an impact on price,” he added.

“We’re looking forward to the good side of that should be an increase in consumer spending. [On balance] it’s positive so it’s good for us.”

Mr. Sunico said that the only segment that will be affected by the first tax reform package is the Lipton iced tea brand, which he described as a small part of Unilever Philippines’ business. The first tax package imposes an excise tax on sugar-sweetened drinks, as a health measure.

“As much as possible we don’t expect to pass on the higher prices. We try to look for way to keep the price [low] so we might do some hedging, find some areas to save on costs. That has always been the agenda for marketing just to make sure that the prices are kept to a minimum. It’s something that we’re looking at.”

Mr. Sunico said Unilever remains confident that overall growth will be high in 2018.

“All products have been growing but last year has been very good for us in our foods and ice cream business because they were saying that we had a pretty long summer last year. The foods category is around 20% of our business,” he added.

Mr. Sunico said that the company is set to unveil its largest distribution center in the Philippines in Cabuyao, Laguna in the first quarter.

It also hopes to adopt more widely a German technology called CreaSolv, which will recycle sachet packaging, helping reduce waste and plastic pollution.

CreaSolv separates the plastic components of sachets from the metal parts, generating plastic pellets than can be remanufactured.

Pilot testing is under way in Surabaya, Indonesia.

If found viable, the recycling service will be offered to outside parties.

“We plan to offer that to the industry, not just for ourselves, because it requires a big input of waste. It’s more of an industry effort, not just a company effort. That’s how big the facility is,” Mr. Sunico said.

He said a recycling plant is being planned around the supply of seven tons of plastic sachets per day. — Anna Gabriela A. Mogato

Volvos to turn electric, hybrid starting 2019

ALL Volvo cars to be launched starting 2019 will either be electric- or hybrid-powered, the car maker said in a statement.

Volvo said the development is “one of the most significant” by any car company as it moves away from the internal-combustion engine and toward electrification. The car maker said its portfolio will include fully electric cars, as well as plug-in hybrid and mild hybrid models.

“People increasingly demand electrified cars and we want to respond to our customers’ current and future needs,” said Hakan Samuelsson, president and chief executive of Volvo Cars.

Volvo said it will launch five fully electric cars between 2019 and 2021, three of which will be Volvo models and two will be high-performance cars wearing the Polestar badge — Volvo’s performance-car arm. These will be supplemented by a range of gasoline and diesel plug-in hybrid, and mild hybrid options, on all models that will still be powered by internal-combustion engines.

“Volvo Cars has stated that it plans to have sold a total of one million electrified cars by 2025. This is how we are going to do it,” Mr. Samuelsson said.

The company added it also plans to reduce the carbon emissions of its products and operations as it aims to achieve climate-neutral manufacturing operations by 2025.

Sta. Lucia to avail of P5-B corporate note facility

By Arra B. Francia, Reporter

STA. LUCIA LAND, Inc. (SLI) plans to avail of a seven-year corporate note facility of up to P5 billion to pay its existing obligations as well as to finance the development of its projects.

The property developer disclosed to the stock exchange on Tuesday its board of directors has authorized SLI to negotiate and avail of the facility with financial institutions. The corporate note facility comprises a base size of P3 billion, with an overallotment option of up to P2 billion.

The listed firm will be tapping a maximum of 19 investors for the facility.

“(The corporate note facility will be used) for the pre-payment of existing obligations of the corporation, the financing of project development costs, and general corporate purposes,” SLI said.

The company will have to secure regulatory approvals to proceed with the corporate note facility.

In the same board meeting, SLI was authorized to enter into a total of eight joint venture projects. The largest project is located in Bulacan, which covers a total of 715,410 square meters (sq.m.). This is followed by a Batangas project spanning 383,069 sq.m., and a project in Palawan with total size of 178,762 sq.m.

SLI will also partner with firms for projects in Baguio City, Quezon City, Cavite, Rizal, and Negros Occidental.

The company known for operating the Sta. Lucia Mall in Cainta is likewise ramping up its land bank, as it is slated to buy more than 1.01 million sq.m. of land. The biggest lot is located in Batangas, covering 524,015 sq.m., followed by a 239,000-sq.m property in General Santos City. Other areas where the company is purchasing land are Dagupan City, Cavite, Laguna, Rizal, Iloilo, and Davao.

Last September 2017, SLI disclosed plans to raise P15 billion in the local capital markets to fund its expansion in the next three to five years. This would accelerate the company’s development of more residential, retail, commercial, and tourism-related properties.

Incorporated in 1996, SLI develops horizontal and residential properties across the country, relying on overseas Filipino workers, families, foreign investors, retirees, young urban professionals, and newly married couples as its clients.

The company grew its attributable profit by 31% in the first three quarters of 2017 to P700.5 million, against the P534.1 million it realized in the same period a year ago. This comes on the back of a 17% year-on-year increase in revenues to P2.79 billion.

Shares in SLI added a centavo or 0.97% to close at P1.04 each on Tuesday.

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