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Globe Q3 profit rises amid strong demand for data

By Arra B. Francia, Reporter

EARNINGS of Globe Telecom, Inc. attributable to the parent soared 76% in the third quarter of 2017, as the company continued to benefit from the expansion of its data segment in mobile and home broadband.

In a regulatory filing on Friday, the telecommunications giant said it delivered a net income attributable to the parent of P4.87 billion in the July to September period, higher than the P2.76 billion it realized in the same period in 2016. Revenues for the period grew 8.7% to P32.24 billion.

This pushed Globe’s nine-month attributable profit to P12.99 billion, 11% up year-on-year, following a 6% increase in revenues to an all-time high of P95.14 billion.

“We take pride in our accomplishments for the first nine months of the year with the sustained record-level revenues and EBITDA (earnings before interest, taxation, depreciation, and amortization). These achievement continue to inspire us to do the excellent work in all aspects of our business,” Globe President and Chief Executive Officer Ernest Cu said in a statement.

The company attributed the increase to its growing data segment, driven by its mobile and home broadband businesses, as well as its partnerships with global companies for innovative digital services.

Ayala Corp. and Ant Financial Services Group’s investment in Globe Fintech Innovations meanwhile helped offset the company’s share in equity losses and spectrum amortization connected to the acquisition of San Miguel Corp.’s telco assets.

Globe noted a 7% increase in mobile revenues in the nine months ending September to P73.1 billion, as the use of mobile data saw a strong uptake in the period. The company’s mobile subscribers reached 59.3 million during the period, which fell 9% year-on-year after it adopted a change in reporting strategy which excluded users who do not reload within 90 days from its count.

Mobile data service revenues stood at P31.3 billion, 20% higher year-on-year as the country saw higher smartphone penetration or 70% in the January to September period. Mobile data contributed 43% to the company’s mobile revenues.

Meanwhile, its home broadband business revenues grew 8% to P11.7 billion during the nine-month period. This was due to the robust demand for fast and reliable internet access, which drove the company’s customer base to 1.26 million subscribers by the end of September 30.

The company’s corporate data business delivered P7.6 billion in revenues, 4% up from the same period a year ago, as the segment saw increased usage during the period.

As of the end of September, Globe has spent P36.8 billion in capital expenditures to support its growing subscriber base and demand for data. Of this, around 84% has been exhausted for the data service needs of customers.

“As we focus more on the network improvement and differentiated customer experience, we expect to maintain our current momentum, and round out the year with a stable growth performance,” Mr. Cu said.

Globe currently has more than 24,000 base stations for the 4G network in order to support the service requirements of its subscribers.

Shares in Globe lost P12 or 0.59% to P2,030 each at the stock exchange on Friday.

Extradition eyed for Indonesian militant arrested in Marawi

By Rosemarie A. Zamora

THE Philippine government is looking at possible extradition of an Indonesian militant who is part of the terrorist Maute group on Wednesday, Nov. 1 in Marawi.

Authorities are considering the extradition of 23-old Muhammad Ilham Syahputra, who also admitted involvement in the 2016 attack on Jakarta that was claimed by ISIS, a Philippine military spokesperson said, adding that he is under police custody.

However, the matter is best handled by the Department of Justice, Armed Forces of the Philippines spokesperson Restituto F. Padilla Jr. said during a press briefing in Malacañang on Friday.

Officials from the DoJ have yet to respond to request for comment, as of this writing if it is possible for him to be extradited.

However, Syahputra is “facing serious charges here right now,” Mr. Padilla said.

Syahputra told police that he arrived in Marawi in November last year upon the invitation of Abu Sayyaf leader Isnilon Hapilon, who is also affiliated with ISIS.

“Cases will be filed against him for his participation and information coming from his narratives will continuously be validated before we believe every word he says,” Mr. Padilla added.

The main battle area, according to Mr. Padilla, “still harbors a number of stragglers,” with an estimated 36 militants remaining.

“What happened in the past few days are proof that the areas we are still prohibiting residents to enter are areas where threats remain from these stragglers,” he said in Filipino. “These are the remnants of the enemies who are still hiding in the area.”

Mr. Padilla also clarified that there was no premature declaration of Marawi City’s liberation from terrorists, as remaining stragglers have no bearing in the city’s overall security.

Despite continued operations for the remaining stragglers, the return of internally displaced persons in nine cleared barangays in Marawi will be completed today.

Office of Civil Defense Assistant Secretary Kristoffer James E. Purisima said that an estimated 6,462 residents will be expected to return home in the said barangays, including Basang Malutlut, Tampilong, Panggao Saduc, Datu Saber, Green, Morlataw Lucsadatu, Marawi Poblacion, East Basak, and Matampay.

Mr. Purisima also said that identification cards are being issued to residents to ascertain that the returning IDPs are legitimate Marawi residents.

“As previously mentioned, utilities such as water and electricity, and health services are already accessible in the identified barangays. Rolling stores and markets will be established to provide basic needs. Means of transportation within the areas will also be made available to provide mobility,” he said.

REBUILDING MARAWI
With the transition of the government to the rehabilitation and reconstruction of Marawi City from military operation, President Rodrigo R. Duterte issued on Oct. 27, Administrative Order No. 9, designating the Chairman of the Housing and Urban Development Coordinating Council (HUDCC) as Chairperson of Task Force Bangon Marawi and designating the Secretary of Defense and Secretary of Public Works and Highways as Vice-chairpersons.

As the head of the task force, HUDCC chairman Eduardo D. Del Rosario said in a statement that: “We will not only rebuild the physical structures but also rebuild the dreams of Marawi residents for a better future and a more progressive and secure Marawi.” The statement was read by Mr. Purisima.

Other members of the reorganized Task Force include:

NDRRMC Executive Director and Civil Defense Administrator, Undersecretary Ricardo B. Jalad as the new Executive Director of the Task Force.

HUDCC Assistant Secretary Avelino D. Tolentino III will be head of the Task Force Bangon Marawi Secretariat.

HUDCC Assistant Secretary Felix Castro will head the Task Force Bangon Marawi field office as manager.

Regional Director Raynildo S. Aniñon of the OCD-ARMM will be the executive officer of the Task Force Bangon Marawi field office.

ALLEGED FILIPINO ONLINE ISIS RECRUITER
In a related development, a Filipina who is alleged to be an online recruiter for the terrorist Islamic State in Iraq and Syria (ISIS), made an appearance during a preliminary investigation at the Department of Justice (DoJ), claiming she was deprived of the right to counsel.

Karen Aizha Hamden was assigned three lawyers – Atty. Raymund Nuque for her inquest and Attys. Don Chong Viray and Atty. Ricalde for a closed-door interview – but she insisted on writing her own counter-affidavit on a piece of paper on the spot.

However, DoJ Senior Assistant State Prosecutor Peter L. Ong did not allow her to do so, because “there was a seeming conflict when at the same time she was invoking her right to counsel, she would write without any lawyer to represent her.”

For his part, NBI Agent Joshua S. Santiago said that the Public Attorney’s Office (PAO) provided her with legal counsel the night she was brought in for inquest proceedings.

“After that it’s already her responsibility to contact her lawyer,” Mr. Santiago added.

Ms. Hamidon was arrested last Oct. 11 in her home in Taguig City by operatives of National Bureau of Investigation-Counter Terrorism Division (NBI-CTD) who seized her cellphones, laptops, tablets, and other electronic devices being used for her illegal online activities.

Ms. Hamidon was charged before the DoJ for 14 counts of violations of Article 318 (Inciting a Rebellion of Insurrection) of the Revised Penal Code,as amended, in relation to Section 6 of R.A. 10175 (Cybercrime Prevention Act of 2012) last Oct. 18.

Ms. Hamidon strongly denied the false accusations in relation to her involvement to the Maute group by saying: “My function is only through the usage of social media. I have nothing to do with any of those accusations like Maute, I have nothing to do with that. I strongly deny all of those alleged false accusations hurled against me.” – Andrea Louise E. San Juan

PAL settles P6B debt to CAAP, MIAA

PHILIPPINE Airlines (PAL) on Friday settled its P6 billion debt to the the Manila International Airport Authority (MIAA) and Civil Aviation Authority of the Philippines (CAAP).

In a joint statement, the Department of Transportation (DOTr), MIAA and CAAP said the flag carrier paid P6 billion in air navigational charges which have been incurred since the 1970s until July 30, 2017.

PAL Vice President for Legal Affairs Clara De Castro personally handed over a check for P5,677,887,615 to CAAP Chief Accountant Raul Eusebio at the latter’s office in Pasay City.

PAL also turned over a check worth P258,594,230.33, net of taxes, to MIAA Assistant General Manager for Finance and Administration Arlene Britanico.

PAL was given until December to settle its outstanding debt to the government.

Last month, DOTr said it accepted PAL’s P6 billion offer to settle its dispute with the government over unpaid fees.

“The DOTr has accepted the offer of PAL to pay in full the P6 billion claims of the CAAP/MIAA, and PAL commits to keep all their transactions updated and current with the CAAP/MIAA,” the DoTR had said.

At that time, PAL said it agreed to settle in order “to manifest their trust and confidence to (sic) President Rodrigo R. Duterte’s administration.”

The agreement came after Mr. Duterte on Sept. 26 gave PAL ten days to pay up or else he will cut off the flag carrier’s access to the Ninoy Aquino International Airport (NAIA) Terminal 2.

The DoTR then issued a final demand for PAL to fully pay its obligations, threatening legal action “to protect the interest of the government.”

According to the DoTR, PAL’s unpaid navigational fees and other charges reached P7.3 billion as of Sept. 26, 2017. This includes P6.96 billion payable to CAAP as of July 30, and P322.11 million to MIAA as of Sept. 26.

The issue over PAL’s unpaid charges had remained unresolved under the previous administrations.

When PAL was still owned by the government, it had enjoyed privileges such waiver of landing, take-off, and other fees at the NAIA.

However, the government insisted that PAL is no longer entitled to such privileges, since it was privatized in 1992. The flag carrier is now owned by tycoon Lucio Tan. – A.G.A. Mogato

De Lima asks high court to reconsider decision that junked request to recall arrest

DETAINED senator Leila M. De Lima, through one of her lawyers Florin T. Hilbay, asked the Supreme Court to reconsider its decision that junked her petition to recall her arrest warrant for lack of merit.

In her 24-page Motion for Reconsideration, Ms. De Lima said: “the High Tribunal should immediately rectify the continuing grave injustice committed against her because the majority of its members cannot even agree on the nature and cause of accusation.”

Last Oct. 10, the High Tribunal, voting 9-6, ruled against De Lima’s petition to nullify the arrest warrant issued against her by Muntinlupa Regional Trial Court Branch 204 for the trumped-up charge of illegal drug trade allegedly committed when she was justice secretary.

“The absence of a majority on the nature of the charges against Petitioner is the clearest possible indicator-coming from the Supreme Court itself-that the accusation ‘is blatantly a pure invention’ and a fake charge,’ to borrow from Justice Carpio. This is an institutional admission of the gravest consequence,” Ms. De Lima said.

“If the members of the majority could not even agree on the nature of the accusation reflected in the Information, such fact is an objective indicator that respondent judge could not possible have had probable cause to issue the warrant of arrest against Petitioner,” she added.

However, several political pundits agreed that the SC ruling is “one of the grossest injustices” borrowing the words of Senior Associate Justice Antonio T. Carpio who, along with Chief Justice Maria Lourdes P.A. Sereno, Associate Justices Marvic F. Leonen, Francis H. Jardeleza, Alfredo S. Caguioa, and Estela Perlas-Bernabe, dissented from the Court’s majority decision.

Ms. De Lima explained that five of the nine justices who voted to junk her petition maintained that the crime charged against her is “illegal drug trading”, while three other justices asserted that it is the crime of “conspiracy to commit drug trading”.

“If at least three members of the nine justices constituting the majority that voted against Petitioner believe that the charges are for Conspiracy to Commit Drug Trading, then it only follows that they must have concluded that respondent judge issued a warrant of arrest for an entirely different, and wrong case. To keep Petitioner in continued pre-trial detention is patent abuse of judicial authority,” Ms. De Lima said.

In Ms. De Lima’s Summation of Votes, Justices Presbitero J. Velasco Jr., Lucas P. Bersamin, Samuel R. Martires, Andres B. Reyes Jr., and Alexander G. Gesmundo agreed that the charge was for the “crime of illegal drug trading”, which is the original accusation of the Department of Justice (DoJ).

On the other hand, Associate Justices Teresita Leonardo-De Castro, Noel Tijam and Diosdado Peralta argued for the “crime of conspiracy to commit drug trading”, which is the subsequent formulation of the Office of the Solicitor General.

“We, therefore, face a situation where the DOJ originally charged Petitioner with Trading in Illegal Drugs, which charge was later ‘re-angled’ into a Conspiracy to Commit Drug Trading, which in turn is incompatible with the ponente’s (and four other Members’) understanding of the Information, which they believe charges Trading in Illegal Drugs. This is a circus only madmen can enjoy,” Ms. De Lima said.

Ms. De Lima also pointed out that Associate Justice Mariano del Castillo is confused as to whether the Information charged is Illegal Drug Trading or Conspiracy to Commit Drug Trading as he changed his mind from one to the other in a matter of four paragraphs.

“Bluntly put, in the absence of a majority to sustain the validity of the Information, Petitioner is entitled to an immediate release from pre-trial detention as a matter of right,” Ms. De Lima said.

“It is fortunate that Petitioner is a lawyer, a lawmaker and a human rights defender who is vigilant of her rights, who fights for her liberty and freedom not otherwise available to those who cower in fear and subjection,” she added. — Andrea Louise E. San Juan

New acquisitions lift IMI’s Q3 profit

INTEGRATED Micro-electronics, Inc. (IMI) booked a 20.6% increase in earnings in the third quarter of 2017, pushed by the positive performance of its recent acquisitions as well as the overall growth in the automotive sector.

The electronics arm of Ayala Corp. reported a net income attributable to the parent of $7.05 million in the July to September period, higher than the $5.85 million it realized in the same period in 2016.

This follows a 43% increase in revenues to $294 million, from $205 million a year ago.

“IMI today is different from the IMI more than ten years ago in the way we do things. We are now in the forefront of taking electronics to the next level penetrating high reliability markets and moving forward to a more advanced automotive electrification and autonomous driving,” IMI Chief Executive Officer Arthur R. Tan was quoted as saying in a statement.

Including the company’s first half earning results, IMI’s attributable profit jumped to $24.09 million in the nine months ending September, 15% up from the same period in 2016. Revenues for the period meanwhile grew 29% to $795.2 million.

The company attributed the increase to a rise in the demand for its automotive and industrial products. Its operations in Europe and Mexico for instance saw a 15% year-on-year growth in revenues in the January to September period due to higher demand for automotive lighting.

IMI further noted ongoing expansions and product introductions in the Mexico market that is helping support demand for its North American operations.

Revenues from China grew at a minimal 1%, as the company saw softer demand under its telecom infrastructure business. This however was offset by the growth in both automotive and industrial segments.

In the Philippines, revenues came in at $197.9 million, 4% higher year-on-year, riding on the back of new industrial applications.

The company’s acquisitions for 2017, which include VIA Optronics and STI International, contributed a total of $136.2 million for the period.

“We continue to gain momentum as the synergetic effects of our recent acquisitions kick in. As IMI builds its competence around the next generation of technologies in high value markets, we will be more involved in the ever evolving global value chains in the automotive, industrial, and aerospace markets,” IMI President and Chief Operating Officer Gilles Bernard said in a statement.

Shares in IMI rose 60 centavos or 3.3% to P18.80 apiece at the stock exchange on Friday. – Arra B. Francia

High court asked to review orders in Mamasapano case

THE Supreme Court was asked to review decisions of the Office of the Ombudsman that supposedly downgraded charges filed against former President Benigno S. C. Aquino III for his role in Mamasapano, Maguindanao mission that led to the deaths of more than 40 police officers in January 2015.

Volunteers Against Crime and Corruption (VACC) and kin of Special Action Force (SAF) 44 represented by Felicitas D. Nacino and Helen E. Ramacula on Friday filed the petition for certiorari seeking to annul, reverse, and set aside the consolidated resolution and order issued by Ombudsman Conchita C. Morales dated June 13 and September 5, 2017 regarding the case.

Both orders were questioned by the petitioners, saying that the original case they filed was “the 44 counts of reckless imprudence resulting in homicide,” VACC legal counsel Ferdinand S. Topacio said.

Earlier this July, the Ombudsman has ordered the filing of charges against Mr. Aquino for his alleged role in the anti-terrorist operation. Mr. Aquino was ordered charged with usurpation of authority. Co-accused in the case are former Philippine National Police (PNP) chief Alan L. M. Purisima, and former SAF chief Getulio Napeñas, who was the commander of the unit at the time of the mission.

Although the operation was able to neutralize Malaysian terrorist and bomb-maker Zulkifli Abdhir, among others, it nevertheless also led to the deaths of the 44 SAF officers, and 18 others from the Moro Islamic Liberation Front and its splinter group, the Bangsamoro Islamic Freedom Fighters.

The petitioners challenged the said resolution and order of the Ombudsman, citing “grave abuse of discretion amounting to lack or in excess of jurisdiction.”

“The Ombudsman is protecting the former president because the ‘usurpation of authority’ can be easily dismissed. For us, this was set up to be dismissed if the Supreme Court would investigate it, thereby protecting the former president from any criminal liability for the death of 44 troopers,” Mr. Topacio said.

“They can always say that the chief executive cannot usurp public authority because he is the chief executive. All authority emanates from him,” Mr. Topacio said.

The case has to be “44 counts of reckless imprudence resulting in homicide because according to the board of inquiry report, ultimately President Aquino is at fault.”

“What kind of Ombudsman is that? She is supposed to be a protector of the people, not of [Mr. Aquino], not of a particular party,” Mr. Topacio said. — Arjay L. Balinbin

No penalties for BDO over card skimming cases

THE BANGKO SENTRAL ng Pilipinas (BSP) has not imposed any sanctions on BDO Unibank, Inc. over reported card skimming cases back in June.

The listed lender has not received any penalties from the regulator after the bank was found to be compliant with BSP regulations, a senior official said.

Instead, affected depositors will be covered by payouts under the liability shift framework enforced by the central bank for compromised accounts which have not yet migrated to the more secure Europay Mastercard Visa (EMV) chip cards.

Back in June, the Sy-led bank confirmed at least 95 reports of card fraud after at least seven automated teller machines were reportedly tapped into using skimming devices that stole client data and passwords. Skimming victims will be reimbursed after the bank completes its investigation, a bank executive had said during a Congressional inquiry.

The central bank has not imposed a penalty on BDO as the card fraud cases were “handled properly,” following an investigation rolled out by the regulator. The central bank found BDO “compliant” with existing regulations, particularly the liability shift framework which covers ATM and card-based transactions.

The new rule places the burden on banks in cases of theft or losses coming from card skimming if it has not yet adopted the microchip technology, in a bid to boost consumer protection.

The BSP has also required banks to set up reserves for potential card fraud in its balance sheets to make sure that it will bear the burden of covering possible theft cases for non-EMV cards still in use.

The fraud loss provision will be a mandatory buffer that banks have to set aside, similar to loan loss reserves for soured debts. The provision should be in place and reported quarterly starting Sept. 30.

All banks and card-issuing firms need to fully deploy EMV cards and terminals by June 30, 2018. – Melissa Luz T. Lopez

PAL to launch 4 routes from Cebu in December

DAVAO CITY – Philippine Airlines (PAL) is capping the year with the launch of several new domestic and international routes from airports outside its main hub in Metro Manila.

The flag-carrier will launch in December flights from Cebu to Siargao, Camiguin, Ozamiz and Legazpi, as well as to Bangkok, while Cebu-Beijing flights will start this month.

This week, PAL started operating direct flights between Davao City to Tagbilaran, Bohol, Cagayan de Oro City, and Zamboanga City.

“Passengers (from Davao) no longer have to pass through Cebu anymore, no transit or transfer via Manila to get to these areas,” said Ronald Mangahas, PAL Express assistant vice president for airport services outstation, during Thursday’s launching ceremony.

Mr. Mangahas said these new routes will also be particularly convenient for persons with disabilities as there would be no more transfers.

Mr. Mangahas said the flight network expansion has been made possible by the company’s growing fleet.

“Additional airplanes means we can do more flights to more destinations,” he said.

PAL is currently awaiting the arrival of several new aircraft, including 12 Bombardier Q400 with a total seating capacity of 86, including six premium seats. PAL’s initial Bombardier Q400 aircraft was turned over to the company in July this year, with five more expected to be delivered in 2018 and two more in early 2019.

PAL is also set to beef up its operations with the delivery of two 280-seater B347, eight 200-seater A321 Neo, and four 280-seater A350 aircraft.

Harry D. Inoferio, PAL senior assistant vice president for Visayas-Mindanao sales, said they are continuously studying the viability of other flights from the regional airports, both domestic and international.

“We are slowly but surely studying the possibility of launching new flights, to make sure it becomes sustainable,” Mr. Inoferio said during the event.

Mr. Inoferio said they have also started offering premium seats in the new flights, which are more expensive but will provide more leg room and comfort to passengers.

PAL will fly the Davao-Tagbilaran route four times a week, the Davao-Cagayan de Oro route daily, and the Davao-Zamboanga route three times a week. – Carmencita A. Carillo

ABS-CBN, GMA claim ratings lead in October

ABS-CBN Corp. and GMA Network Inc. again claimed to have dominated nationwide TV ratings for the month of October.

In a statement, ABS-CBN cited Kantar Media data which showed it had an average national audience share of 46% in October, 13 points more than GMA’s 33%.

Kanta Media uses uses a nationwide panel size of 2,610 of both rural and urban households to represent nationwide viewership.

ABS-CBN likewise claimed top spots in specific areas such as Mega Manila and Metro Manila with an average audience share of 36% and 41%, respectively, as opposed to GMA’s score of 34% and 27% in the aforementioned areas.

ABS-CBN said it dominated the morning, afternoon and evening blocks with average audience shares of 39%, 47% and 50%, respectively. In the same survey, GMA only reaped 32%, 33%, and 31%, respectively, in the said blocks.

In a separate statement, GMA said it maintained its lead in National Urban Television Audience Measurement (NUTAM), with an average total day people audience share of 41.7%, versus ABS-CBN’s 38.1%.

GMA said it ranked first in Mega Manila with a 48.8% total day people audience as opposed to ABS-CBN’s score of 29.3% in a survey conducted from Oct.1-21.

While in Urban Luzon, GMA also bested ABS-CBN’s 32.6% share with a 47.2% total day people audience share.

GMA said it had more viewers in the morning, afternoon and evening blocks with 38.5%, 45.4% and 40.2% shares, respectively, as compared to ABS-CBN’s shares in the same blocks which were 35.9%, 37.5% and 39.4%, respectively. – Anna Gabriela A. Mogato

Milagros in Masbate now free of red tide, gov’t says

THE coastal waters of Milagros in Masbate are now free of red tide poison, the Bureau of Fisheries and Aquatic Resources said in a Shellfish Bulletin No. 35 dated Oct. 30.

However, it noted that the coastal waters of Irong-Irong Bay, Maqueda Bay, Villareal Bay and coastal waters of Daram Island in Western Samar; Matarinao Bay in Eastern Samar; Carigara Bay in Leyte; Inner Malampaya Sound, Taytay and Puerto Princesa Bay, Puerto Princesa City in Palawan; and coastal waters of Milagros and Mandaon in Masbate, all remain positive for the paralytic shellfish toxin.

The bureau warned the public that all types of shellfish and alamang in the following areas contain more than the regulatory limit of shellfish poison, making them unfit for harvest, selling, and consumption.

However, the agency said that several species – including of fish, squids, shrimps, and crabs – are safe to eat provided that they are fresh and washed thoroughly, and internal organs such as gills and intestines are removed before cooking. — Janina C. Lim

BSP lowers risk weighting for MSME loans vis CSFs

By Melissa Luz T. Lopez, Senior Reporter

LOANS to small-scale businesses secured through credit surety cooperatives will be given a lower risk premium, as the Bangko Sentral ng Pilipinas (BSP) eyes to prod more banks to lend to this sector.

The central bank through Circular 979 said loans extended to micro, small and medium enterprises (MSMEs) will be assigned a 20% risk weight, provided that these borrowings are guaranteed by a credit surety fund (CSF) cooperative.

Previously, all MSME loans come with a 75% risk weight, which makes it tasking for these small firms to borrow from banks and financial institutions.

The Monetary Board eased the rules covering CSF-guaranteed credit lines “to further support the growth of the micro, small and medium enterprises,” it said in a statement published on Friday.

“This policy intends to facilitate the increased flow of funds to MSMEs that will translate to the further growth of the sector and of the domestic economy,” the BSP said in the statement.

Philippine MSMEs account for 99% of local firms and 60% of employment but contribute only 36% of gross value added, according to the May 2016 Investment Policy Review of the Organization for Economic Cooperation and Development.

The central bank’s CSF program provides alternative collateral for MSMEs by organizing them into cooperatives with a pooled fund. CSF units serve as guarantor for its member groups and non-government organizations as they make formal loans from banks, which in turn improves the chances for these small businesses to secure bank loans.

A firm can incur a loan worth as much as 10 times the amount which they poured into the surety fund, with a minimum placement of P100,000.

Local government units and state-run agencies like the Industrial Guarantee and Loan Fund, the Development Bank of the Philippines, and the Land Bank of the Philippines also extend aid to CSF facilities in the form of grants or investments, so that its members can borrow bigger amounts.

There are currently 50 CSFs in the country.

Banks have been stringent towards lending to small firms despite a mandatory 10% credit quota as provided under Republic Act 9677 or the Magna Carta for MSMEs.

Under the law, banks must set aside 8% of its total loan portfolio for micro and small firms, while 2% should be allotted for medium-sized companies. However, only rural and cooperative banks are able to meet the lending requirements, with the bigger players opting to pay fines rather than lend to the “risky” sector.

Peso rallies further after Fed chair appointment

THE PESO continued to rally versus the greenback on Friday, as traders assess the new US Federal Reserve chair and amid growing skepticism on planned cuts for corporate taxes there.

The local currency closed at P51.21 against the dollar on Friday, gaining 21 centavos from its P51.42-per-dollar finish on Thursday.

The peso opened the session slightly stronger at P51.36 against the dollar, which was also the unit’s low for the day. It reached an intraday peak of P51.14.

Dollars traded on Friday totalled $690.2 million, up from the previous day’s $562.4 million.

Traders attributed the rally to a weaker dollar due to the appointment of Fed governor Jerome H. Powell as the new Fed chair, replacing the incumbent Janet L. Yellen who will leave her seat by February.

“The expectation on the new Fed chair took a reverse after the nomination of the dovish Powell. Two to three weeks ago, the dollar rallied as traders expect [John B.] Taylor’s nomination,” a trader said in a phone call.

A second trader, meanwhile, attributed to the peso’s uptick to “growing skepticism” as Republican lawmakers in the lower house submitted a bill cutting the corporate tax to 20% from the current 35%.

Earlier, US President Donald J. Trump said he expects the bill to be consolidated with the Senate’s, and be enacted by the end of the year.

“The corporate tax cut seemed to be negative for the market, dragging the dollar down,” the trader said.

“The stock market [on Friday] is on a buying mode after the all-time high close [on Thursday], prompting the peso to appreciate,” the trader added.

The accumulated remittances during the two-day break this week also boosted the peso, the second trader noted. – Karl Angelo N. Vidal

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