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Rise of behavioral science

“Human behavior is going to be at the center of the massive shift that we’re witnessing globally today.” This is my quick reply to various types of audience in conferences and public fora when they ask me about my forecast for 2018 and beyond. I usually get blank stares as this is concept is still hard to comprehend. This is because we are constantly bombarded with technology concepts such as in data science, artificial intelligence, and digital transformation.

Indeed, the fusion of different technologies in the digital, physical and biological spheres, commonly referred to as the 4th Industrial Revolution (4IR) is disrupting businesses and organizations the world over, having a profound impact on the way we live, learn, work, and relate to each other.

But at the core of this are people who need to adapt to this new environment in order to maximize its benefits to society and minimize the associated risks. In fact, the World Economic Forum (WEF) established a council to exactly do this — composed of experts in various disciplines of behavioral science such as organizational behavior, behavioral economics, and consumer behavior.

Merriam-Webster defines behavioral science as “a branch of science that deals primarily with human action and often seeks to generalize about human behavior in society.” It explores the effect of human actions and interaction trough observation, appreciation, and integration by the behavioral scientist. It can address behavioral anomalies such as biases, overconfidence, and others, that can hinder behavior change, for example, adapting to new ways of doing things through the use of technology.

In a report of WEF, Iris Bohnet, Global Future Council on Behavioral Sciences, avers that “the discipline is helping to break new ground in multiple areas, from health care and education to social inclusion and consumer finance.”

She cites “education is an area where traditional approaches have held sway for a long time — and where increasing effectiveness is widely recognized as key to making the most of the 4IR, as the pace of technological change will lead to rapid shifts in the skills required. Behavioral scientists are looking now at possible ways to help students learn and teachers teach more effectively.”

In health care, “it’s been shown that small things like prompting people to take their medicine at the right time can have a huge impact in improving the efficacy of treatment. I expect we’ll see more behavioural science-inspired innovations in preventative care.”

She further cites a consumer finance example where “huge impacts from small tweaks to how credit card bills are presented, making it easier for people to understand the implications of being in debt, and what interest rates really mean.”

A more practical example was featured recently by the New York Times which headlined that Uber “has undertaken an extraordinary experiment in behavioral science to subtly entice an independent work force to maximize its growth.” The ride-hailing company said that they had “under-invested in the driver experience,” and expressed “its determination to treat drivers more humanely, it is engaged in an extraordinary behind-the-scenes experiment in behavioral science to manipulate them in the service of its corporate growth.” To do this, Uber has rolled out new features that allow drivers to set goals and view incentives for driving more.

This may seem manipulative and debatable, but it shows the potential of behavioral science to drive behavior change.

Take another practical example — Lemonade, an app-based peer-to-peer insurance company based in New York, who hired behavioral economics guru and author of best-seller Predictably Irrational, Dan Ariely, as its Chief Behavioral Officer. His job is to transform the experience of consumers in dealing with insurance as well as business processes, by influencing behaviors within the company and among consumers.

Behavioral science will become an integral part of business strategy in the future, just like how data science emerged and precipitously rising.

The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author may be e-mailed at reylugtu@gmail.com.

Reynaldo C. Lugtu Jr. is the Managing Director of The Engage Philippines, digital marketing and customer engagement solutions company, an information and communications technology firm. He is the Chairman of the ICT Committee of the Financial Executives Institute of the Philippines (FINEX). He teaches strategic management in the MBA Program of De La Salle University. He is also an Adjunct Faculty of the Asian Institute of Management

Wood industries ecozone planned for PICOP plantations

THE Philippine Economic Zone Authority (PEZA) is considering agro-forestry economic zone status for plantations operated by the defunct Paper Industries Corp. of the Philippines (PICOP).

If approved by the Department of Environment and Natural Resources, the zone will lead to the relaxing of a logging ban and create a certifying organization to regulate forest products used in paper making.

“During our dialogue with [Environment and Natural Resources] Secretary [Roy A.] Cimatu, the Director of the Bureau of Forest Management (Nonito M. Tamayo) mentioned that one reason that the industries who need it are importing because there is a need for a certification,” PEZA Director-General Charito B. Plaza said.

“There’s a certifying organization that will certify that these [pieces of] wood which will be used by industries are certified as good wood which we don’t have yet in the Philippines,” she added.

“Tree-plantation, wood-based industries, paper-making industries, all the industries [that depend on wood] will be located there.”

PICOP, a private company, maintained tree plantations in Mindanao. It shut down in 2001.

In August 2016,  Surigao del Sur Representative Johnny T. Pimentel filed a bill proposing an economic zone in Bislig, which will include the operations of PICOP.

In 2017, Chinese investors reportedly expressed interest in the economic zone. — Anna Gabriela A. Mogato

Performance projections for Southeast Asia and Northeast Asian partners

How PSEi member stocks performed — January 11, 2018

Here’s a quick glance at how PSEi stocks fared on Thursday, January 11, 2018.

What to see this week

6 films to see on the week of January 12-19, 2018

Ferdinand

Ferdinand
Based on the children’s picture book The Story of Ferdinand by Munro Leaf and illustrated by Robert Lawson, Ferdinand is about a bull who refuses to participate in bullfights. Captured after being mistaken for a wild beast, and determined to return home to his family, he finds himself facing the world’s greatest bullfighter. Directed by Carlos Saldanha, the animated film features the voices of John Cena, Kate McKinnon, Gina Rodriguez, Anthony Anderson, Miguel Angel Silvestre, Daveed Diggs, Gabriel Iglesias, Flula Borg, and Bobby Cannavale. Ben Kenigsberg of the New York Times writes, “Ferdinand, the new computer-animated adaptation from Carlos Saldanha (the Ice Age movies), speaks to its own time in a different way, dutifully adhering to the template for contemporary children’s films while avoiding much personality or distinction.”

MTRCB Rating: G

Jumanji: Welcome to the Jungle

Jumanji: Welcome to the Jungle
When four high school kids discover a video game console they have never heard of before, inadvertently enter the game itself taking the form of avatars they have chosen — a brawny adventurer, an Einstein, a middle-aged male professor, and a badass female warrior. For them to win and survive in the jungle, they are tasked to discover what Alan Parrish — the character played by the late Robin Williams in the original Jumanji film — left 20 years ago, or they would be stuck in the game forever. Directed by Jake Casdan, it stars Dwayne “The Rock” Johnson, Jack Black, Nick Jonas, Kevin Hart, Karen Gillan, and Bobby Cannavale. The Guardian’s Peter Bradshaw comments, “It’s a likable film which borrows liberally from everything and everyone, and if it’s put together by numbers, well, then it is done capably enough.”

MTRCB Rating: PG

Pitch Perfect 3

Pitch Perfect 3
After graduating from college and realizing that the real world is not quite working out for them as they expected, the Bellas reunite for a final performance at the USO tour. Directed by Trish Sie, it stars Anna Kendrick, Brittany Snow, Rebel Wilson, Anna Camp, Alexis Knapp, Chrissie Fit, Hailee Steinfeld, Hanna Mae Lee, Ester Dean, John Lithgow, Matt Lanter, and Elizabeth Banks. Despite the franchise’s huge fan base and success, Rotten Tomatoes gave the third installment a measly 31% rating. Empire Online’s Helen O’ Hara writes, “The film only truly comes alive in its performance scenes, which is as it should be, and a succession of pop hits guarantee toe-taps in the cinema. Music, at least, never lets these girls down, even if the rest of their lives — and their movie — fails to live up to what’s on stage.”

MTRCB Rating: PG

The Commuter

The Commuter
An insurance salesman’s routine commute home after work is disrupted when a mysterious stranger contacts him to uncover the identity of a hidden passenger before the train’s final stop. He soon realizes that he has been caught up in a criminal conspiracy. Directed by Jaume Collet-Serra, it stars Liam Neeson, Vera Farmiga, Patrick Wilson, Jonathan Banks, Elizabeth McGovern, and Sam Neill. Variety’s Guy Lodge remarks, “Collet-Serra cranks up this locomotive as he knows best, building as much breathless, senseless, real-time momentum as possible before train and plot go simultaneously, albeit spectacularly, off the rails.”

MTRCB Rating: R-13

Jeepers Creepers 3

Jeepers Creepers 3
The Creeper fights back after Sargent Tubbs teams up with a task force to destroy the creature after feeding on people for 23 days. Directed by Victor Salva, it stars Chester Rushing, Gabrielle Haugh, Meg Foster, Ryan Moore, Gina Philips, Justin Hall, Stan Shaw, Brandon Smith, Jonathan Breck. ING’s Adam Dileo remarks, “The Creeper remains one of the more interesting modern movie monsters.”

MTRCB Rating: R-13

Delirium

Delirium
A man inherits a mansion from his late parents following his release from a mental institution. Mysterious occurrences lead him to believe that the house might be haunted. Directed by Dennis Iliadis, it stars Topher Grace, Callan Mulvey, Genesis Rodriguez, Robin Thomas, and Patricia Clarkson.

MTRCB Rating: R-13

The first M.A.D. talks on volunteerism will be held this weekend

If volunteering for a cause was a part of your New Year’s resolutions then this might be the event for you.

On January 13—that’s this Saturday—I am M.A.D. (Making a Difference) kicks off the year with M.A.D. Talks 2018: Nagmahal, Nasaktan, Nag-volunteer. REPEAT! at the Meralco Theat

The event will bring together 150 youth volunteers from all over the country, including young professionals, student leaders, and members of the academe to listen and learn from each other and the invited resource speakers.

The forum will focus on the bayanihan culture and will promote volunteerism among the Filipino youth.

The first M.A.D. Talks is done in partnership with the Philippine National Volunteer Service Coordinating Agency (PNVSCA) and One Meralco Foundation, Inc.

I am M.A.D., a millennial-led collective of Filipino volunteers, is also preparing a solid list of events for the year. The group was a national finalist in the on-going 15th Search for the Ten Accomplished Youth Organizations (TAYO) Awards.

The group will also launch its re-vamped website and a multimedia promotional ‘Call for Volunteers’ to further spread its advocacy and mobilize the Filipino youth.

Christian Marx Rivero, co‑founder and chairman of I am Making A Difference, Inc., said that student leaders can further hone their potential by joining M.A.D. Camps. These 15 volunteer activities will be headed by I am M.A.D. across the country, to be announced during this forum.

For more information, you can visit I am M.A.D. on facebook or email them on iammadph@gmail.com.

FDIs close in on 2017 goal with Oct. surge

By Melissa Luz T. Lopez
Senior Reporter

NET foreign direct investment (FDIs) flows to the Philippines soared in October, logging the biggest amount in one-and-a-half years that brought the official 2017 target within reach.

Net FDI inflows totaled $2.017 billion that month, triple the $670 million that entered the country in October 2016. October’s amount also jumped from the $754 million recorded in September 2017, the Bangko Sentral ng Pilipinas (BSP) said yesterday.

FDI

October’s net inflow is the biggest since the record $2.244-billion investments recorded in April 2016 and marks the third straight month of year-on-year growth.

“The upswing in FDI reflects continued investor confidence in the country’s strong macroeconomic fundamentals and growth prospects,” the central bank said in a statement.

FDIs are a key source of capital for the local economy, which create more jobs for Filipinos as these fuel business expansion.

October saw President Rodrigo R. Duterte declaring the liberation of Marawi City after five months of battle between government forces and Islamic State-inspired militants, although Mindanao remains under military rule to this day.

Net equity placements fueled October’s surge, ballooning to $1.529 billion, 25 times the $60 million recorded in October 2016.

Gross equity inflows reached $1.595 billion, eclipsing $84 million recorded the past year, while total outflows more than doubled to $66 million from $23 million.

A “significant” portion of October’s equity capital investments went to electricity, gas, steam and air-conditioning supply activities, the BSP said. Among others, a consortium backed by Singapore’s GIC Pte Ltd. completed that month its acquisition of a 31.7% stake in Energy Development Corp. for $1.3 billion.

Other industries which got additional investments were manufacturing, construction, real estate, as well as wholesale and retail trade, the central bank added.

Surging net equity investments offset the 22% drop in intercompany lending to $431 million from $553 million in the same comparative months.

Reinvested earnings steadied at $57 million.

The Netherlands, Singapore, Kuwait, the United States and Germany were the biggest sources of foreign capital that month, according to central bank data.

The October haul brought year-to-date FDI net inflows to $7.856 billion, a fifth more than the $6.52 billion recorded in 2016’s comparable 10 months.

This brings the FDI haul closer to the central bank’s $8-billion projection for the entire 2017 and may even surpass 2016’s $7.93-billion net inflows.

“With investor general sentiment about the Philippines favorable, I expect the government FDI target to be smashed as the November and December data are released in the next two months,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said when sought for comment.

“[S]ophisticated investors are looking at the country and are waiting for opportunities to invest, whether direct or mere transitory investing… I can say that these interests are real and are being translated to actual long-term investments.”

BSP Governor Nestor A. Espenilla, Jr. has said that the Philippines’ infrastructure spending program as well as warmer ties with China and Russia will help fuel stronger foreign investment inflows, enough to mark another banner year.

Focus shifts to spending after TRAIN enactment

ENACTMENT of Republic Act (RA) No. 10963, or the Tax Reform for Acceleration and Inclusion Act (TRAIN) that took effect Jan. 1, will help dispel any doubts about the government’s ability to pursue its aggressive infrastructure development program, but much now depends on spending as planned, Moody’s Investors Service said yesterday.

“With respect to the tax reform which has been signed into law… we can say it would put the Philippine government in a better position to accommodate its ambitious infrastructure agenda,” Moody’s senior credit officer Christian De Guzman said in a webcast yesterday.

RA 10963, signed into law on Dec. 19, 2017 reduces personal income taxes for those earning below P2 million, alongside a simpler system for computing donor and estate taxes. Foregone revenues will be offset by the removal of some exemptions from value-added tax; increased tax rates for fuel, automobiles, tobacco, coal, minerals, documentary stamps, foreign currency deposit units, capital gains for stocks not in the stock exchange, and stock transactions; as well as new taxes on sugar-sweetened drinks and cosmetic surgery.

Bigger tax collections are expected to offset foregone revenues from personal income tax cuts, generating P89.9 billion in fresh funding this year.

Finance Secretary Carlos G. Dominguez III has said that 70% of these additional revenues will help fund big-ticket projects under the government’s “Build, Build, Build” program, which has a total financing need of P8.44 trillion until 2022. The state is looking to spend P1.1 trillion on infrastructure for this year alone.

“In the absence of that revenue pick up, we did expect the government to pare back on that ambitious infrastructure development agenda. However, the expected pick-up in revenues does give space to continue with that aggressive sort of spending,” Mr. De Guzman added.

The additional revenues generated by the tax package would likewise pad public coffers and support a stronger fiscal profile, he noted, saying: “Revenue has been a key weakness of the Philippine government as compared to similarly rated peers in the past.”

“This tax reform and the expected pick up in receipts will help close that gap.”

The Philippines holds a “Baa2” rating — a notch above minimum investment grade — with a “stable” outlook from Moody’s, which affirmed that score in June last year.

Moody’s expects the Philippine economy to grow by 6.8% this year, although short of the 7-8% target set by the administration of President Rodrigo R. Duterte who ends his six-year term in 2022.

It remains to be seen, however, whether increased tax collections will unlock the economy’s potentials to grow even faster, Mr. De Guzman said, as this would largely depend on the government’s ability to ensure prompt budget disbursements and project rollout, given a history of underspending.

POLITICAL RISKS
The Philippines’ robust economic momentum will likely remain resilient despite nagging security and political concerns.

Mr. De Guzman said political risks are “easing” after government forces recovered Marawi City from Islamic State-inspired militants after a five-month battle last year, even as Mr. Duterte extended martial law in Mindanao for a year till end-2018.

“However, we have not nor do we expect those domestic security threats to pose an immediate risk to economic growth,” the credit analyst said, adding he expects the Philippines to remain one of Asia’s fastest-growing economies this year. — Melissa Luz T. Lopez

PHL to remain among SE Asia’s fastest-growing economies — WB

By Elijah Joseph C. Tubayan
Reporter

THE PHILIPPINES can be expected to remain one of Southeast Asia’s fastest-growing economies, the World Bank said in its latest report, even as the global lender maintained the country’s growth projection for this year.

“The Philippines will continue to be the fastest-growing economy in the Association of Southeast Asian Nations (ASEAN), despite some stabilization of investment growth,” the World Bank said in the Global Economic Prospects report it released yesterday.

The World Bank expects the country’s economy to have grown by 6.7% in 2017, a pace that will be sustained until 2019 before slowing to 6.5% in 2020.

If realized, that pace will fall within the government’s 6.5-7.5% growth goal for 2017 but will fall short of a 7-8% annual target from 2018 to 2022.

Philippine projections are better than those for East Asia and the Pacific (6.4% in 2017, 6.2% in 2018, 6.1% in 2019 and 6.0% in 2020) and for the world (3.0% in 2017, 3.1% in 2018, 3.0% in 2019 and 2.9% in 2020.

The World Bank’s Philippine forecast matches its estimate for Vietnam and Laos for last year, while Cambodia will grow faster — by 6.8%.

For 2018, Cambodia is still seen to top Southeast Asia with 6.9%, while Myanmar will match the Philippines’ growth, following Laos’ 6.6% and Vietnam’s 6.5%.

The global lender on Dec. 15 hiked its Philippine projection for last year to 6.7% from 6.6% in the East Asia and the Pacific Economic Update report published in October, citing faster-than-expected merchandise export growth.

The 2018 and 2019 forecasts for the Philippines on the other hand were cut in the same October report from 6.9% and 6.8%, respectively in the July report.

To compare with other multinational lenders, the Asian Development Bank (ADB) likewise estimated a 6.7% forecast for 2017; while the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development have a 6.6% projection for this year.

For this year, the IMF sees the Philippine economy growing by 6.7%, while ADB and ESCAP project a 6.8% expansion.

Actual Philippine gross domestic product growth averaged 6.7% in the 10 months to October according to the Philippine Statistics Authority, and Socioeconomic Planning Secretary Ernesto M. Pernia has said that fourth-quarter expansion — scheduled to be reported later this month — may “be a bit higher than 6.7%.”

The World Bank credited state policy for the Philippines’ generally sound macroeconomic fundamentals.

“In some ASEAN economies, such as Indonesia and the Philippines, supportive monetary policy had spurred investment and, hence, capital accumulation in the wake of the global financial crisis,” the World Bank said.

“Rapid capital accumulation has also reflected infrastructure upgrades. In the Philippines, improved macroeconomic policy management and the government’s public-private partnership initiative, have boosted capital accumulation.”

East Asia and the Pacific, the same report said, “is expected to continue to be a major driver of global growth.”

But while risks to the region “have become more balanced,” they are “still tilted to the downside,” the report added, particularly citing geopolitical tensions on the Korean peninsula, a faster-than-expected tightening of financial conditions, a steeper-than-expected slowdown of major economies, increased protectionist sentiment in advanced economies like the United States and policy changes from the United Kingdom’s departure from the European Union.

GDP Outlook

Trade gap biggest on record in November; factory production continues to slide — PSA

By Lourdes O. Pilar, Researcher
and Camille A. Aguinaldo

THE COUNTRY’s trade-in-goods deficit continued to widen in November last year, bringing the gap to yet another record high after merchandise import growth outpaced exports’ increase.

Preliminary data released yesterday by the Philippine Statistics Authority (PSA) showed the November trade deficit reaching $3.781 billion, wider than the $2.491 billion shortfall in 2016’s comparable month and the previous record-high $2.819 billion deficit in October 2017.

The country’s import bill increased by 18.5% in November — its fastest pace in 11 months — to $8.744 billion, surpassing October’s 13.1% growth albeit slower than the 21% seen in November 2016.

Export, Import Performance

Imports of all commodity groups grew annually in November, with double-digit growth seen in organic and inorganic chemicals (44.9%); mineral fuels, lubricants and related material (38.6%); telecommunication equipment and electrical machinery (32.8%); miscellaneous manufactured articles (29.6%); iron and steel (26.4%); and electronic products (23.4%).

All item types posted double-digit increments, with imports of raw materials and intermediate goods increasing by 18.9% to $3.312 billion. Likewise, imports of mineral fuels, lubricant and related materials ($899.981 million); capital goods ($2.881 billion); and consumer goods ($1.615 billion) went up by 38.6%, 16.1%, and 14.4% respectively.

In contrast, merchandise exports grew just 1.6% to $4.963 billion, its slowest since November 2016. November’s increase was also slower than the 7.1% posted in October, but was still a turnaround from the 4.5% decline recorded in November 2016.

Sales of mineral products ($364.284 million) and petroleum products ($44.201 million) grew respectively by 128.5% and 130.4%, offsetting the declines in export sales of manufactured goods (-1.5% to $4.133 billion) and agro-based products (-28.5% to $288.479 million).

Electronic products, which account for 58.1% of the total outbound shipments, also expanded by 12.7% to $2.884 billion in November.

YEAR-TO-DATE COUNT
Merchandise exports increased by 10.8% to $58.099 billion in the 11 months to November, surpassing the government’s five percent target for 2017.

The same comparative 11 months saw a 9.3% merchandise import growth, a few points shy of the 10% official target for 2017.

Analysts point to the continued increase in imports to the government’s bid to ramp up infrastructure spending, but that its magnitude was unexpected.

In a research note, Nomura cited the slow export growth as “the main source of surprise” with the turnout way lower than the market’s (nine percent) and Nomura’s (13.7%) consensus.

“The strong import growth reflects a strong domestically driven economy. The recovery in imports of capital equipment underpins expectations that the economic capacity is also increasing to meet rising domestic demand and economic growth,” said ING Bank N.V. Manila economist Jose Mario I. Cuyegkeng.

“Data continues to indicate a strong economy. But the flip side is that a challenging trade and current accounts would pressure the Philippine peso again this year.”

ANZ Research economist Eugenia FabonVictorino was of a similar opinion: “Following the stabilization of the deficit in the second and third quarter [of last year], the unexpected widening of the deficit in October may once again add to the expectations of a current account deficit in 2018.”

“It is ironic that despite strong growth, the peso has been one of the worst performers in the region in 2017. A persistent widening of the deficit in 2018 could put the peso under renewed downward pressure,” she added.

Despite this, the robust growth in imports is seen to be positive in the long-run, according to Socioeconomic Planning Secretary Ernesto M. Pernia in a statement released by the National Economic and Development Authority (NEDA), which he heads.

“The timely implementation of the government’s infrastructure program will be critical to bringing down the cost of doing business and, thus, should make our exporters more competitive,” Mr. Pernia was quoted in NEDA’s statement as saying.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion concurred, adding that the trade deficit will persist as the country is further driven from being consumption-led to investment-driven.

The economist also said that in the long-run, this will boost competitiveness of the country’s exports due to lower cost of doing business “brought by easier movement of goods and services.”

“So, at this point, the widening of the trade deficit is not a major concern because it is an intended consequence as more investments contribute to economic growth,” he said.

For Nomura: “[t]he negative implications of the widening trade deficit on the deteriorating current account balance add to our cautious view on PHP.”

“While strong imports (particularly of capital goods) and recent tax reform add to positivity on the growth front, flow dynamics for the Philippines continue to look challenging.”

MANUFACTURING CONTINUES DROP
Also yesterday, PSA’s latest Monthly Integrated Survey of Selected Industries showed factory output in November continuing to tread in negative territory.

The volume of production index (VoPI) declined by 8.1% in November — its worst since the 12.5% contraction recorded in October 2011.

The November reading was worse than the four percent and 5.8% declines in September and October 2017, respectively.

Year-to-date factory output averaged 2.5%, slower than the 10.5% logged in 2016’s comparable 11 months.

Average capacity utilization, which is the extent by which industry resources are being used in the production of goods, was estimated at 83.9% with 11 of the 20 sectors registering capacity utilization rates of at least 80% in the 11 months to November last year.

NEDA said in a statement that “[t]he decrease in production volume can be partly attributed to the lower production of tobacco” in anticipation of implementation of Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act (TRAIN) that was signed into law on Dec. 19 last year and which took effect last Jan. 1. Among others, that first of up to five planned tax reforms raised the excise tax on tobacco products, along with a host of other items.

Looking forward, Mr. Pernia said the manufacturing output is expected to rebound this year due to increased state spending on infrastructure and by households that benefit from RA 10963’s reduction of personal income tax rates. “Despite the recent performance of the manufacturing sector, we remain optimistic given strong domestic and external demand. There are also considerable public and private investments in the country,” he said.

LP senators to lead Senate hearing on charter change

THE SENATE will continue its inquiry on charter change, tagged as a legislative priority by the Duterte administration, on the resumption of Congress next week.

It happens that this hearing will be conducted by leaders of the opposition Liberal Party (LP), headed in the Senate by Minority Leader Franklin M. Drilon.

Mr. Drilon, however, has also warned that charter change may be impeded by the planned impeachment of Chief Justice Maria Lourdes P.A. Sereno now being tackled by the impeachment committee in the House of Representatives.

“The timetable must be realistic. The Speaker (Pantaleon D. Alvarez) is talking about a plebiscite in May of 2018, that is four months away. Just looking at the situation (that seems unlikely) because, right now, they are trying to impeach the Chief Justice,” Mr.. Drilon said in an interview Wednesday e-mailed to the media.

“Based on the statement of Cong(ressman Reynaldo V.) Umali, (head of the House impeachment committee), the impeachment complaint will be brought to the Senate sometime in April or May. The moment it is transmitted to us, we have no choice but to sit as an impeachment court, and the moment we sit as an impeachment court, goodbye legislative agenda, goodbye federalism, goodbye BBL (Bangsamoro Basic Law),” the Senate opposition leader also said.

For his part, Mr. Drilon’s ally in the opposition Liberal Party, Senator Franklin N. Pangilinan, said the Senate committee on constitutional amendments and revision of codes, which he heads, will tackle a number of key questions regarding charter change.

“Is there a need to amend or revise the Constitution? Why or why not? If so, what parts of the Constitution should be amended or revised? Why? Should the amendments or revisions be proposed by a Constitutional Convention or by the Congress itself acting as a constituent assembly? Why? If Congress convenes as a constituent assembly to amend or revise the Constitution, should the Senate and the House of Representatives vote jointly or separately? Can Congress pass a resolution limiting the power of the Constituent Assembly or Constitutional Convention, or are their powers plenary?” Mr. Pangilinan said in a statement.

Besides his committee, the Senate committee on electoral reforms and peoples’ participation will also co-lead the Senate inquiry on charter change. This committee is led by detained LP Senator Leila M. de Lima, who has signed a notice of meeting together with the other senators regarding the Jan. 17 hearing on charter change.

This legislative agenda is being pushed more openly by Mr. Alvarez, Mr. Duterte’s leading congressional ally, marked his 60th birthday on Tuesday with a gathering with his constituents at the New Tagum City Hall in Davao Del Norte’s First District.

“This year, 2018, we will revise our Constitution for a shift to a federal form of government. Let us unite and support this initiative of the President,” Mr. Alvarez was quoted in a statement as saying.

Not all of Mr. Duterte’s allies have been all-out in their expression of support for charter change, particularly in the Senate majority.

For his part, Senator Joseph Victor G. Ejercito said on social media on Wednesday: “We should not railroad a process that would fundamentally alter our system of government.”

“(T)he most important issue for me is that the Congress has to vote separately. I am not prepared to support a process that would diminish the power and independence of the upper chamber,” he also said, regarding the contentious point on how Congress should vote when it convenes as a constituent assembly to amend or change the 1987 Constitution. — with Arjay L. Balinbin

Palace: South Korean telco keen to be third player

By Arjay L. Balinbin

A SOUTH KOREAN firm, apart from Beijing’s China Telecom, is interested in entering the telecommunications industry in the country, according to Communications Secretary Jose Ruperto Martin M. Andanar.

“We had a Cabinet meeting with the President, the 21st Cabinet meeting which was also the first Cabinet meeting for this year. At the meeting, DICT (Department of Information and Communications Technology) Acting Secretary Eliseo M. Rio, Jr. mentioned that so far there are two foreign companies that have expressed interest to be the third player in the telecommunications industry. First, the China Telecom, plus the consortium which was not mentioned. Second in the list is the Korean telecom company with its partner, the Philippine Telegraph and Telephone Corp. (PT&T),” Mr. Andanar said in Filipino in a radio interview on Tuesday night, Jan. 9.

It will be recalled that in November last year, President Rodrigo R. Duterte had offered the People’s Republic of China the opportunity to operate as one of the key players in the telecommunications industry in the country.

Mr. Andanar likewise announced that the government is targeting to have the third telecommunications player start its operations “this year.”

He added that the DICT has been “fast-tracking” the entry of the third telecom player in order to make the telecommunications industry in the country “more competitive,” noting that the PLDT Group, through the initiative of Manuel V. Pangilinan, has already committed “P58 billion” as its capital expenditure for this year. For its part, Globe Telecom, the only other telco player in the country, will be “adding over P47 billion” to its investment.

“We can really see that even just the announcement itself encourages these two telco giants to invest more money for the improvement of their services. So, that in itself is already a victory for the Filipino people,” Mr. Andanar said.

This is really going to be an exciting year for the telco industry for 2018,” he added.

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