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BSP steadies policy until at least Feb., maintains inflation forecasts

By Melissa Luz T. Lopez
Senior Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) held fire on monetary policy yesterday as inflation remains within target and with economic growth remaining upbeat, which came despite a fresh rate hike in the United States that would trigger rising global yields.

As expected, the Monetary Board kept borrowing rates unchanged during its eighth and final policy review for 2017.

Rates stayed at 3.5% for the overnight lending rate, 3.0% for the overnight reverse repurchase rate, and 2.5% for overnight deposit.

The BSP will hold its next monetary policy review on Feb. 8, 2018.

The central bank last hiked key rates in September 2014, although procedural cuts were introduced in June 2016 for the shift to an interest rate corridor scheme.

“The Monetary Board’s decision is based on its assessment that the outlook for the inflation environment has been broadly unchanged,” BSP Governor Nestor A. Espenilla, Jr. said in a statement, adding that domestic economic activity has remained firm.

Inflation averaged 3.2% in the 11 months to November, with last month’s 3.3% pace reflecting the first slowdown in five months.

The 11-month average also settled within the 2-4% target range set by the central bank and matches the BSP’s forecast for 2017.

The BSP’s decision followed a third rate increase for 2017 introduced by the US Federal Reserve during its two-day review ending Wednesday that has long been factored in by markets amid the US’ slow but steady economic recovery. US monetary policy makers increased rates by another 25 basis points at the end of their Dec. 12-13 review. Fed officials also maintained their estimate of three more interest rate increases in 2018 and 2019.

Central bank officials have said that they need not move in sync with the Fed, as they focus more on domestic developments in setting interest rates.

“[T]here’s hardly any need to tighten monetary policy. We are saying this because the so-called overheating concerns due to high credit growth is at least misplaced. The economy continues to grow and an economy that is growing needs robust provision of domestic credit,” BSP Deputy Governor Diwa C. Guinigundo said in a briefing yesterday.

The BSP also kept the 20% reserve requirement ratio (RRR) on Thursday, but pointed out that it remains to be a “medium-term commitment” of the monetary authority.

“Until such time we are prepared to ease monetary policy and if the capital markets are sufficiently developed… that should usher in the proper environment for considering the possible reduction in the reserve requirement,” Mr. Guinigundo said.

Economists tapped in a BusinessWorld poll said an RRR cut may be introduced next year.

UBS economist Alice Fulwood said in a conference call yesterday that the BSP will likely hike policy rates three times in the second semester of 2018, in order to apply the brakes on inflation.

Capital Economics said the BSP may have room to keep rate adjustments on hold even all through 2018, and dismissed fears about double-digit bank lending growth as this merely supports additional production activities.

“[W]e believe next year will be more momentous,” HSBC Global Research said separately, noting that “market demand for liquidity continued to lift TDF (term deposit facility) rates and inflationary risks for 2018 are tilted to the upside.”

“We expect a 100bp cut to the RRR in 1Q18 to inject liquidity and fulfill policy objectives, and a 25bp policy rate hike in 2Q to limit inflationary risks,” HSBC Global Research economist Noelan Arbis said in a note.

“We do agree with the BSP that overheating concerns are misplaced, which is why we do not expect another rate hike until 3Q19 if one were to happen in 2Q18.”

INFLATION STEADY
The BSP also maintained inflation forecasts until 2019, even as overall price hikes are likely to pick up amid rising oil costs and the tax reform program that will be implemented starting January.

The BSP kept its annual inflation estimates at 3.2% this year, 3.4% next year and 3.2% in 2019.

Mr. Guinigundo said oil prices of up to $65 per barrel “would not be enough to upset” inflation to go beyond four percent.

Higher levies from the tax reform program that Congress ratified last Wednesday are also expected to prod price hikes further, even as the impact should be “transitory.” Resulting added revenues will spur economic output by supporting infrastructure projects.

Fed raises interest rates, leaves outlook unchanged

WASHINGTON — The Federal Reserve raised interest rates on Wednesday but left its rate outlook for the coming years unchanged even as policy makers projected a short-term jump in US economic growth from the Trump administration’s proposed tax cuts.

In an early verdict on the tax overhaul, Fed policy makers judged it would boost the economy next year but leave no lasting impact, with the long-run potential growth rate stalled at 1.8%. The White House has frequently said its tax plan would produce annual GDP growth of 3-4%.

The expected fiscal stimulus, coming on the heels of relatively bullish data, cleared the way for the US central bank to raise rates by a quarter of a percentage point to a range of 1.25% to 1.50%. It was the third rate hike this year.

But the Fed’s forecast of three additional rate increases in 2018 and 2019 was unchanged from its projections in September, a sign the tax legislation moving through Congress would have a modest, possibly fleeting, effect.

The rate increase represented a victory for a central bank that has struggled at times to deliver on its promised pace of monetary tightening. It also allowed Fed Chair Janet Yellen, at her final press conference before her term ends in February, to signal an all-clear for the US economy a decade after the onset of the 2007-2009 recession. “At the moment, the US economy is performing well. The growth that we’re seeing, it’s not based on, for example, an unsustainable buildup of debt… The global economy is doing well, we’re in a synchronized expansion,” Ms. Yellen said. — Reuters

“There is less to lose sleep about now than has been true for quite some time, so I feel good about the economic outlook.”

But the central bank’s projections also contained some potential dilemmas for incoming Fed chief Jerome Powell.

The Fed now envisions a burst of growth, ultra-low unemployment of below four percent in 2018 and 2019 and continued low interest rates — yet little movement on inflation. Ms. Yellen said the persistent shortfall of inflation from the Fed’s two percent goal was the major piece of “undone work” she was leaving for Mr. Powell to figure out.

In its justification for Wednesday’s rate increase, which was widely expected by financial markets, the Fed’s policy-setting committee cited “solid” economic growth and job gains.

US stocks extended gains after the release of the policy statement before ending mixed, while Treasury yields dropped. The dollar fell against a basket of currencies.

Traders of US short-term interest rate futures kept bets the Fed would raise rates only twice next year.

The Fed now sees gross domestic product growing 2.5% in 2018, up from the 2.1% forecast in September. The pace of growth is expected to cool to 2.1% in 2019, slightly higher than the prior forecast of 2.0%.

“Changes in tax policy will likely provide some lift to economic activity in coming years,” Ms. Yellen said, adding that “the magnitude and timing of the macroeconomic effects of any tax package remain uncertain.”

The impact would “mainly” work to raise aggregate demand as households and companies have more money to spend, Ms. Yellen said, with “some potential” to raise investment and the economy’s longer-term growth.

The Fed also said on Wednesday it expected the nation’s unemployment rate would fall to 3.9% next year and remain at that level in 2019, well below what is considered to be full employment.

It previously had forecast a jobless rate of 4.1% for those two years.

But inflation is projected to remain shy of the central bank’s goal for another year, with weakness on that front still enough of a concern that policy makers saw no reason to accelerate the expected pace of rate increases.

“It shows at least some members of the Fed don’t see any reason to keep hiking rates in an environment where the economy is growing more strongly but certainly not overheating and where inflation hasn’t become a problem and doesn’t look like it is going to be one,” said Kate Warne, investment strategist at Edward Jones.

Policy makers do see the federal funds rate rising to 3.1% in 2020, slightly above the 2.8% “neutral” rate they expect to maintain in the long run. That indicates possible concerns about a rise in inflation pressures over time Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari dissented in the policy statement on Wednesday. — Reuters

GMR-Megawide submits lowest offer to upgrade Clark airport

By Patrizia Paola C. Marcelo,
Reporter

THE consortium of Megawide Construction Corp. and Bangalore-based GMR Infrastructure Ltd. has submitted the lowest-cost offer to upgrade the Clark International Airport (CIA), according to the Bases Conversion and Development Authority (BCDA).

The BCDA opened on Thursday the financial bids for the Clark International Airport (CIA) Phase I terminal upgrade, showing the GMR-Megawide consortium submitted the lowest offer at P9.36 billion. This was 25% lower than government’s set ceiling of P12.5 billion for the new airport terminal building.

“They (GMR-Megawide) are the lowest rated bid right now, but we are going to make sure they are responsive as well,” Joshua M. Bingcang, BCDA vice-president and chairman of the Special Bids and Awards Committee (SBAC), told reporters.

Sinohydro Corp. made the second lowest bid at P10.68 billion, followed by China Harbour Engineering Company Ltd. (P11.73 billion), China State Construction Engineering Corp. Ltd. (P12.3 billion), and the consortium of Tokwing Construction Corp. and China Machinery Engineering Corp. (P12.5 billion).

Only Megawide and Tokwing are the Philippine-based companies involved in the bidding.

The BCDA said the SBAC will do post-qualification evaluation and will award the contract on Dec. 18. Groundbreaking for the Clark project is scheduled on Dec. 20.

Mr. Bingcang said the SBAC will communicate with GMR-Megawide consortium’s clients to get feedback on past projects, as well as its banks to verify its funding capabilities.

If the GMR-Megawide consortium fails to meet the post-evaluation qualifications, the BCDA will then consider Sinohydro’s bid.

In 2014, the GMR-Megawide consortium won the contract for the P17.52-billion Mactan-Cebu International Airport (MCIA) Passenger Terminal Building project under the Aquino administration’s flagship public-private partnership (PPP) program and the concession to develop MCIA for a period of 25 years.

In June this year, the GMR-Megawide consortium submitted a P208-billion unsolicited proposal for the 50-year long-term development of MCIA.

Megawide is also awaiting approval of the East-West Railway Project. It announced in July that it acquired a stake in the consortium composed of East-West Rail Transit Corporation and Alloy MTD, giving it the right to participate in the Philippine National Railways’ (PNR) rail project.

Megawide is also the private partner for the Southwest Integrated Terminal Exchange (SWITX) an intermodal transport terminal intended to provide connectivity for commuters in the southern parts of Metro Manila.

Other PPP projects awarded to Megawide include the modernization of Philippine Orthopedic Center together with World Citi, and the school infrastructure project phase I and II.

Fitch upgrades lenders’ ratings

FITCH RATINGS raised its scores for government-owned Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) to investment grade following its move to upgrade the sovereign’s rating earlier this week.

The long-term issuer default ratings (IDRs) of Landbank and DBP were upgraded by a notch to “BBB-,” the minimum investment grade from the previous “BB+”, with a “stable” outlook.

In a statement on Thursday, Fitch said the IDR upgrades of Landbank and DBP were driven by expectations of “an improving sovereign fiscal profile,” which led to the upgrade of the banks’ support rating floors (SRFs) as well.

Last Monday, the global debt watcher raised the Philippines’ IDR to “BBB” with a “stable” outlook. This is a notch above the minimum investment grade and is aligned with the ratings earlier given by Moody’s Investors Service and S&P Global Ratings.

“The ratings on DBP and [Landbank] also reflect our expectation that the sovereign’s propensity to provide extraordinary support to both banks remains high in times of need,” the statement read, with the debt watcher citing unique policy mandates, full government ownership as well as systemic importance as the key drivers.

Concurrently, Fitch also raised the SRFs of BDO Unibank, Inc., Metropolitan Bank & Trust Co. (Metrobank), Bank of the Philippine Islands (BPI), Philippine National Bank (PNB), China Banking Corp. (China Bank) and Rizal Commercial Banking Corp. (RCBC).

Fitch upgraded the SRFs of Landbank, DBP, BDO, Metrobank and BPI to investment-grade “BBB-” from “BB+,” while those on China Bank, PNB and RCBC were raised to “BB,” two notches below investment grade, from “BB-.”

The debt watcher’s rating actions on the private banks also stemmed from the country’s improving capacity to provide support in times of need.

“We believe BPI, BDO and Metrobank are of strong significance to the banking system and economy, given their market shares of around 12%-18% by assets.”

“We also see the mid-tier banks — [China Bank], PNB and RCBC — as systematically important, albeit less so than their larger peers,” Fitch added. — KANV

Peso edges up as Fed hikes rates

THE PESO continued to move sideways against the dollar on Thursday as positive developments on the Philippine tax reform package tempered effects of the US Federal Reserve’s interest rate hike.

The local unit closed the session at P50.47 yesterday, inching up from its P50.48-per-dollar finish on Wednesday.

The peso opened stronger at P50.37, while its intraday high was registered at P50.35 a dollar. Its worst showing was P50.48 versus the greenback.

Dollars traded went down to $475.7 million from the $576.95 million that traded hands in the previous session.

A trader attributed the sideways movement of the peso to the result of the Fed’s two-day policy meeting.

“Today, we traded [higher] on the back of FOMC (Federal Open Market Committee) meeting last night,” the trader said on Thursday.

The trader noted that some were buying on dips in the afternoon session.

On Wednesday, the Fed raised key short-term rates by a quarter of a percentage point, as expected, and projected three more hikes in both 2018 and 2019, unchanged from the last round of forecasts in September.

That disappointed some investors, who had expected the Fed to raise its interest rate outlook next year, given robust economic growth and lower unemployment levels in the United States.

Meanwhile, Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, attributed the generally upbeat peso performance to the ratification of the first package of tax reform bill.

“The Fed rate hike has already priced in, so somehow, the impact of the [tax reform package] becoming a law affected the market more,” Mr. Asuncion said over the phone in Filipino.

“Generally, market players have upward sentiments on the TRAIN (Tax Reform for Acceleration and Inclusion bill), so it’s something good for the value of the peso,” he added.

On Wednesday night, the Senate and House of Representatives ratified the bicameral committee report on the tax reform package. The bill is now waiting for the approval of President Rodrigo R. Duterte. Once signed, it will be implemented by Jan. 1.

For today, a trader said the peso will move between P50.40 and P50.60, while Mr. Asuncion gave a wider range of P50.50 to P50.80.

Asian currencies rose against the dollar on Thursday, as a guarded outlook from the Federal Reserve on the economy weighed on the greenback following its widely anticipated interest rate rise.

The dollar index, which tracks the greenback against a basket of six major currencies, was down 0.06% at 93.370, after dipping 0.7% on Wednesday. — K.A.N. Vidal

Higher taxes seen to make PSE less competitive

By Arra B. Francia, Reporter

FOREIGN INVESTORS may lose their interest in the Philippine Stock Exchange (PSE) once it raises stock transaction taxes (STT) in 2018 as part of the first package of the government’s tax reform program due for implementation in the first quarter.

PSE President Ramon S. Monzon explained the 20% increase in STT — from 50 basis points (bps) to 60bps of the gross selling price — would make the local bourse less competitive against other markets in Asia.

“We have to be conscious about what the other capital markets are doing in the region, or even globally. Because the foreign investors will always go to a place where the transaction costs are less because it’s hard enough to make money on a trade. But if you add the transaction cost, we become very uncompetitive (compared) to the other stock exchanges,” Mr. Monzon told reporters in Makati late Wednesday.

The increased STT forms part of the first package of the Tax Reform for Acceleration and Inclusion (TRAIN), which Congress ratified on Wednesday evening. The tax measure would still need President Rodrigo R. Duterte’s signature before becoming a law.

The adjusted taxation scheme aims to collect up to P130 billion more revenues for the country, in order to finance the Duterte administration’s massive infrastructure program that would see over P8 trillion in spending for roads, railways, and airports, among others, in the next six years.

Mr. Monzon noted the Philippine tax imposed on stock transactions is already the highest in the region, followed by the Burma Malaysia Exchange with a tax of 30 bps of the transaction value. The Hong Kong Exchange charges a stamp duty of 10bps of the transaction value, while the Singapore Exchange has none.

“We really compete with the other exchanges like Thailand, Malaysia, Indonesia, Vietnam. We compete for the money of the foreign investors. So when you increase STT, you are increasing the friction cost. As it is right now, before the increase, that 50bps STT was already the highest in the whole region,” the PSE president said.

He added this could further impact the trading volume in the PSE, which remains at the same level as it had in 2016 despite recording fresh highs this year.

“We’ve had 12 new highs in the market this 2017. In fact, we hit the high of 8,600 in one trading day. We had a P62-billion tender offer from EDC (Energy Development Corp.)… And yet volume is just the same, if not less than volume for 2016,” Mr. Monzon said.

Given the increase in STT, the PSE would then have to launch more programs to attract more foreign investors.

“Obviously we need to do a lot of work to increase interest in our capital markets and at the PSE side, we are really embarking on a lot of initiatives to make it more attractive to the foreign investors,” Mr. Monzon said.

These initiatives include the launch of short selling functions and centralized securities borrowing and lending by the first quarter of 2018, as well as new indices in the future.

Jollibee continues branch expansion in Hong Kong, Brunei, UAE

HOMEGROWN fastfood giant Jollibee Foods Corp. (JFC) continues to expand in Asia and the Middle East, adding three new stores as it moves forward with its plan to increase revenue contributions from international operations.

JFC on Thursday said it recently opened three new stores located in Brunei International Airport, Hong Kong, and the United Arab Emirates (UAE).

The Brunei branch is the company’s 15th in the country, opened in time for JFC’s 30th year anniversary there.

“When we started our first Jollibee Brunei branch back in 1987, we wanted to appeal not only to Filipinos, but to locals as well. Thirty years on, we are very happy to see the growth of Jollibee into a brand which is well-loved by the Bruneian community,” said JFC Chief Executive Officer Ernesto Tanmantiong was quoted as saying in a statement.

Jollibee also opened an outlet in Wan Chai district,located on the northern shore of Hong Kong Island. The company noted the area has a population of around 180,000, of which 15,000 are Filipinos.

“The (Wan Chai) store posted impressive sales on its first three days of operation, showing a good balance of Filipino and local customers,” Mr. Tanmantiong said.

The listed fastfood giant opened the doors of its ninth store in UAE, which is JFC’s largest store in the country to date.

The new store openings are in line with JFC’s goal to become the fifth largest restaurant company in the world. Currently, the company ranks as the 11th largest global restaurant operator aside from being the biggest in Asia.

JFC targets to end the year with a total of 4,000 stores across the globe. As of September, it had a total of 3,644. Of this, 2,756 are in the Philippines composed of 1,023 under the Jollibee brand, 510 under Chowking, 262 under Greenwich, 411 under Red Ribbon, 471 under Mang Inasal, and 79 under Burger King.

Oveseas, JFC has a footprint of 888 stores. It has an additional 355 outlets under the Smashburger brand, where JFC holds a 40% interest.

This international store expansion will potentially drive foreign sales to 50% of the company’s total sales. As of 2016, international sales accounted for only 20% of JFC’s business.

In the first nine months of 2017, the company saw its net income attributable to the parent increase by 16.3% to P5.11 billion, following a 15% jump in revenues to P94.51 billion.

Shares in JFC shed P3 or 1.21% to close at P244 apiece at the Philippine Stock Exchange on Thursday. — Arra B. Francia

Skills of the future

What are the skills needed in the future workplace in 2020 and beyond? This was the question I sought to answer in front of about a hundred recruiters from various companies during the RecruiTech: Recruitment and Technology Forum organized by Asia Select.

As I consult and converse with several organizations from all over the country on digital transformation, I get a good sense of the current and future state of digital transformation across several sectors. A sound baseline is a 2016 Microsoft study on the state of digital transformation in the country, showing that 32% of companies surveyed have a full digital transformation strategy in place, 43% in progress with specific strategy, and 25% with limited or no strategy in place. By 2020, I forecast that 75% will have a full strategy in place and being implemented.

Therefore, employers in the future will require new set of skills from experienced professionals and new graduates. The top hard skills that recruiters will be looking for are those that involve one or some of the following domains: cloud computing, data science and analytics, cybersecurity, data privacy, Internet-of-Things (IoT), and artificial intelligence (AI).

While these technologies, especially AI, threatens to replace jobs through automation, certain soft skills will become indispensable and cannot be replaced by robots. Distilling from the list propounded by the World Economic Forum (WEF), I enumerate six requisite skills by 2020 and beyond.

1. Complex problem-solving
This is the most desired skill to have by 2020, which is defined by WEF as the capacity “to solve novel, ill-defined problems in complex, real-world settings.” Organizations will go through fast-changing settings brought about by technology and new ways of working, such that employees will need to handle uncertainties in different situations. They need to see the big picture, understand relationships of variables, and define alterative solutions to a problem.

The WEF report says “[m]ore than one third (36%) of all jobs across all industries are expected by our respondents to require complex problem-solving as one of their core skills.”

2. Critical thinking
Employers lament over the fact that the crop of graduates we have now lack critical thinking — the skill in using logic and reasoning, being able to use these to interrogate an issue or problem, generate alternative solutions to the problem, and consider the pros and cons of each approach.

This is the main skill I endeavour to develop among my students in graduate school — by challenging students’ thinking, engaging them in debate, and even confusing them with radical solutions to a problem. Our educational system has a lot to do to develop this skill in the future generations.

3. Creativity
The complexity of the future requires employees to connect the dots with seemingly disparate information, consider all the ideas together, and present something fresh. A skill in tandem with complex problem solving, this requires openness of the mind to new ideas to build new ones.

4. Empathy
This is the ability to understand and share the feelings of another, specifically customers, colleagues, and other stakeholders in an organization. The complexity of the future will bring out new stress levels among people, and this skill among employees will help bring out the best customer experience or employee engagement.

5. People management
With potentially AI replacing jobs in the workplace, and new stress levels come out, it’s vital that managers and team leaders know how to motivate their team members, maximize their productivity, coach their staff, and respond to their needs.

6. Cognitive flexibility
This is the mental ability to switch between thinking about two different concepts, and to think about multiple concepts simultaneously. This requires employees to grasp Peter Senge’s mental models — conceptual frameworks consisting of generalizations and assumptions that affect how we view the world and act in it; but multiple mental models for that matter.

Now, there are challenges in developing these skills among the youth and current crop of employees. Our educational system and employee training programs should innovate and apply the self-same future skills, like creativity and complex-problem solving, to make sure that employees of the future develop these skills.

Another challenge if for employers and recruiters — how can one evaluate and detect these skills among future employees. While hard skills should can be easily assessed, new methodologies in interviewing and evaluation should likewise be developed to assess soft skills.

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 emailed 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.

Adult joblessness drops 3.3 points in third-quarter survey of SWS

THE SOCIAL Weather Stations (SWS) in its third quarter survey found adult joblessness at 18.9%, which the polling group said “is the lowest recorded joblessness rate since the 18.4% in September 2016.”

This latest figure in the The Third Quarter 2017 Social Weather Survey covers an estimated 8.7 million adults and is 3.3 points below the 22.2% last June, covering an estimated 10.5 million adults.

September’s adult joblessness rate consisted of “those who voluntarily left their old jobs at 10.4% (est. 4.8 million adults), those who involuntarily lost their jobs at 6.6% (est. 3.1 million adults), and first-time job seekers at 1.9% (est. 860,000 adults),” SWS said — noting further that the proportion of those who resigned or left their old jobs voluntarily fell by 1.8 points (12.1% in June to 10.4% in September), those who were retrenched rose by 0.5 points (6.1% in June to 6.6% in September), and the proportion of first-time job seekers fell by 2.1 points (3.9% in June to 1.9% in September).

Apart from the decline in adult joblessness, optimism that there will be more jobs decreased by one point to 45% in September, while pessimism that there will be fewer jobs rose by three points from 15% in June to 18% in September.

“The proportion of those who say there will be no change in job availability fell by three points from 30% in June 2017 to 27% in September 2017,” SWS said. “This downgrades the Net Optimism on Job Availability score (% more jobs minus % fewer jobs) by three points from the very high +31 in June 2017 to a high +28 in September 2017.”

The survey noted that adult joblessness among women fell by 4.9 points from 31.5% in June to 26.5% in September. “This is the lowest figure among women since the 26.1% in September 2017,” the polling group said.

“Among men, adult joblessness decreased by 1.8 points from the 15.2% in June to the 13.5% in September. It has been below 20% since March 2014.”

Adult joblessness fell by 10.6 points among 18 to 24 year olds (from 60.8% in June to 50.2% in September) and by 10.4 points among 25 to 34 year olds (from 31.7% to 21.3%)

Among the 35-44 age bracket, joblessness decreased by 4.1 points (from 17.0% in June to 12.8% in September), but increased by 3.8 points among the 45 and above (from 9.9% to 13.8%).

SWS data on joblessness differs in certain areas from the recently released Labor Force Survey. The Social Weather Survey was conducted September 23-27, using face-to-face interviews of 1,500 adults (18 years old and above) nationwide, 600 in Balance Luzon and 300 each in Metro Manila, the Visayas and Mindanao (with sampling error margins of ±3% for national percentages, ±4% for Balance Luzon, and ±6% each for the other mentioned areas).

SMB begins Philippine Cup title retention bid

By Michael Angelo S. Murillo
Senior Reporter

THE 43rd season of the Philippine Basketball Association (PBA) fires off this weekend with the San Miguel Beermen kicking off their quest for a four-peat for the Philippine Cup title.

San Miguel starts its bid against a retooled Phoenix Petroleum Fuel Masters in the lone game slated on opening day on Sunday, Dec. 17, at 6:45 p.m. at the Smart Araneta Coliseum.

The game follows the traditional parade of teams and opening ceremonies to usher in the new season of Asia’s play-for-pay league.

The Beermen come into the new season hoping to bounce back after missing out on the opportunity to win a rare grand slam following their failure to add the season-ending Governors’ Cup to the two titles it won earlier last season.

They are parading a practically intact core led by four-time PBA most valuable player June Mar Fajardo, Alex Cabagnot, Chris Ross, Marcio Lassiter and Arwind Santos, coached by Leo Austria.

Gilas Pilipinas cadet Christian Standhardinger is also part of the team but due to his current commitment with the ASEAN Basketball League he will not be available until the next conference.

Former University of Santo Tomas stalwart Louie Vigil is also one of the rookies of the Beermen.

“We hope to bounce back next conference. Our target is to win a fourth straight All-Filipino title,” said Mr. Fajardo following their early exit in the Governors’ Cup.

In winning their third straight Philippine Cup title last season, the Beermen also bagged the Jun Bernardino Perpetual Trophy.

They joined the Talk ’N Text Tropang Texters, who won three straight Philippine Cup titles from 2011 to 2013, as the only holders of the prestigious trophy.

San Miguel beat the Barangay Ginebra San Miguel Kings in the Philippine Cup finals last season, 4-1, with Mr. Ross emerging as finals MVP.

RETOOLED
Hoping to trip the Beermen early in their quest are the Fuel Masters, who are coming back this season retooled.

Former Alaska Aces deputy Louie Alas is now the coach of Phoenix and he is hoping to bring a winning culture to the young franchise.

Incoming sophomore and Gilas shooter Matthew Wright banners the team anew along with veterans Jeff Chan, JC Intal, RJ Jazul, Doug Kramer and Willy Wilson.

Rookie Jason Perkins and former Kia Picanto guard LA Revilla also join the team.

“We hope to be a better team defensively. Management wanted us to change the culture in the team and chart a path to be consistently competitive,” said Mr. Alas upon his acceptance of the Phoenix job.

Opening ceremonies for PBA Season 43 is slated for 4 p.m.

Ceres, Global dispute PFL first season title

By Michael Angelo S. Murillo
Senior Reporter

THE inaugural season of the Philippines Football League (PFL) culminates this weekend with the first-ever final match to be played involving Ceres-Negros FC and Global Cebu FC.

After six months of regular season and semifinal play, the maiden PFL year comes to a close with Visayas-based clubs Ceres and Global battling at the Panaad Park and Football Stadium for the top prize on Saturday, Dec. 16, beginning at 6 p.m.

Ceres and Global wound up at second and fourth place, respectively, at the end of the regular season before mastering their opponents in the two-legged, home-and-away semifinals to barge into the championship game.

Ceres was a 3-1 aggregate winner over third-seeded Kaya FC-Makati while Global fashioned out a narrow 3-2 victory on aggregate over top-seeded FC Meralco Manila.

For local football observer and writer Lorenzo del Carmen, that the first-ever final of the PFL is featuring a Ceres-Global encounter is hardly surprising, notwithstanding the struggles the two teams had in the season.

“I am not surprised that Ceres and Global made the final since man for man I think both have the most talented squads in the country. Their exploits in foreign competitions only helped them have the experience to knock out Kaya and Meralco in the semifinals,” said Mr. Del Carmen, who writes for local site Tiebreaker Times, when asked by BusinessWorld for his thoughts on the about-to-happen final.

“Simply put, this match will be exciting for local football fans because Ceres and Global have proven themselves not just in the local scene but also internationally. Ceres ended up 2017 AFC Cup ASEAN Zonal Winners while Global recently reached the 2017 Singapore Cup final. The talent on show will also be exciting to watch. Ceres has the likes of Stephan Schrock and Roland Muller while Global fields Misagh Bahadoran and Pika Minegishi,” he added.

Mr. Del Carmen said that if “The Busmen” play to form there is every reason to believe that they wind up as the league’s first champion.

“I think Ceres will narrowly beat Global. It has posted 1-0 wins this season over the Cebu side, which speaks a lot of Global’s capabilities, but I predict that Ceres will win the championship in a one-goal victory,” he said.

BATTLE FOR THIRD
Meanwhile serving as aperitif to the PFL finals is the battle for third today at the Rizal Memorial Football Stadium between Meralco and Kaya.

While their PFL championship quest was cut short, both teams are determined to finish the season on a high note.

“It’s been an emotional last few days, [since the semifinal loss], but we are starting to pick up. We have to be positive. We don’t want to end on a low. We finished the league as top seed, so we don’t want to be seen as being fourth place after all the hard work we have put in since January,” said Sparks skipper Simon Greatwich.

It is a sentiment shared by Meralco coach Aris Caslib, saying “Everyone felt the missed opportunity but the players know very well that we have a commitment to the club, the fans, and our families to play our best.”

The Meralco-Kaya battle for third happens at 9 p.m.

Senate approves higher base pay for military, police

THE SENATE approved Wednesday on third and final reading two resolutions seeking to increase the base salary of military and uniformed personnel (MUP) starting January next year and calling for a review of the salary scheme of civilian personnel.

The Senate approval followed a similar move by the House of Representatives, but sparked a warning by a party-list representative that the near-doubling of the base pay of the uniformed personnel would cause serious distortions between them and over a million civilian personnel in the State sector.

The Senate apparently recognized this, so that right after approving Senate Joint Resolution 11 — introduced by Senate President Aquilino Martin L. Pimentel III, Panfilo M. Lacson, Gregorio B. Honasan II and Cynthia A. Villar — increasing the base pay of MUP, the Senate also considered a separate resolution pushed by Minority Leader Franklin M. Drilon.

Mr. Honasan, chairman of the Senate Committee on National Defense and Security and sponsor of the bill, said that once the joint resolution is enacted into law, the base salary of all military and police personnel, including jail guards, firemen, coast guards and those under the National Mapping and Resource Information Authority and the Philippine Public Safety College would double.

“The President has repeatedly made promises of higher salaries to the military and the police personnel. In support of this commitment, this joint resolution, if enacted into law, would double the MUPs’ base pay,” Mr. Honasan said in his sponsorship speech.

He cited a Department of Budget and Management report showing the compensation package would result in an average increase of 58.7% for all MUPs.

A joint resolution, like a bill, requires the approval of both houses and the signature of the President. It has the force and effect of a law once approved by the President.

“Let me emphasize that under existing laws, the base pay schedule of military and uniformed personnel or the MUP was last increased eight years ago,” Mr. Honasan said.

He said the pay hike for MUPs would motivate those in active service to perform better and be more committed to the service. At the same time, such would encourage civilians to join the service, thereby improving the recruitment process and reinvigorating public service.

“Unlike other vocations, uniformed personnel experience almost daily, risks of losing their lives, physical injury or psychological trauma. Our uniformed personnel including their families give up personal comfort so that ordinary Filipino citizens may live in peace,” he said.

CIVILIAN PERSONNEL
Meanwhile, the Senate also adopted Resolution No. 575, authored by Mr. Drilon and Senate Majority Leader Vicente C. Sotto III, to adjust the base pay of civilian personnel.

Mr. Drilon said the resolution sought to prevent the discrepancy and distortion in the salary structure of civilian personnel.

The resolution aims to bring the salary of civilian personnel closer to their military and uniformed personnel counterparts, whose base pay will be hiked starting 2018, as Mr. Drilon cautioned that the increase in the base pay of the MUP could distort the current pay structure in the government.

Mr. Drilon explained that as a result of the increase in the base pay of the uniformed personnel, the salary of entry-level personnel in the military would surpass the salaries currently received by some professionals in the bureaucracy including lawyers, nurses, teachers and doctors.

“The base pay for civilian personnel with salary grade 11 shall be raised to the same level of a private, Fire/Jail Officer I, Police Officer I, and Apprentice Seaman/Seaman Third Class provided under this Resolution,” Mr. Drilon said.

The resolution tasked the Department of Budget and Management to recompute and readjust the base pay of civilian personnel below and above salary grade 11 to bring the salary of civilian personnel closer to their military and uniformed personnel counterparts and eliminate overlaps in between salary grade allocations of government personnel to recognize differences in duties and responsibilities of the positions, Mr. Drilon said.

The new base pay rates for the civilian personnel shall take effect six months after the increase in the base pay of MUP takes effect, he noted.

WARNING
Before the Senate approved the resolution on the MUP base pay hike, ACT Party-list Rep. Antonio Tinio warned: “House Joint Resolution (HJR) 18 which the Lower House quickly approved and the Senate is posed to also railroad will put a wide salary gap between government personnel who have similar qualifications,” said Tinio. “Civilian employees will be left far behind by their armed counterparts although they have similar, even higher qualifications, or have spent equal, even more years in government service.”

During the floor deliberations, Mr. Tinio proposed to amend HJR 18 to include all government employees, civilian and MUP, and give a P3,000-increase across the board. The amendment was quickly rejected by the sponsors.

A candidate soldier, a trainee who is only required to have a minimum of 72 units in college or technical and vocational course, will already earn P18,587 monthly while thousands of rank-and-file employees with Salary Grades 1-10 will get P10,510 to P18,718 in 2018. An Administrative Aide I who possesses the same level of educational attainment as the trainee candidate soldier will receive only P10,510, Mr. Tinio pointed out.

“The 100% increase for Police Officer 1 (PO1) and Private will give them P29,668, almost P10,000 more than the P20,179 to be received under the third tranche of the revised Salary Standardization Law (SSL 4) by a Teacher I, a Nurse I, a Private Secretary, a Registrar I, and a Guidance Counselor I at SG11. The bulk of government workers, who are at the forefront of education and health services, are entry-level teachers, nurses and middle-level personnel in the public sector,” lamented Party-list Rep. France Castro.

“The salary of a Teacher I falls short of the standard family living wage of P1,145 per day. This is aggravated by the shortage of funds for school maintenance and other operating expenses that leaves teachers with no choice but to shell out from their pockets to provide for their own teaching materials and other classroom needs. With their meager salaries, they end up vulnerable to predatory and usurious loans,” she added. “This is a dire situation also experienced by other professionals and employees in government and is one of the many reasons for a substantial pay hike.”

“Moreover, a PO 1 and a Private will get an even bigger pay than the Php29,010 (SG 15) salary of a Head Teacher II and a School Nurse II. While Head Teachers possess several years of experience and training, applying for entry-level positions in the military and police would definitely attract more,” Mr. Tinio said. “‎Teachers, clerks, aides and many other rank-and-file workers who have been in the service for about 10 to 20 years have never received pay as high as P20,000 to P30,000. This is an injustice that might lead to the demoralization in the ranks of the civilian bureaucracy.”

A Second Lieutenant, who is a Philippine Military Academy graduate or required to have a bachelor’s degree and to complete a one-year Officer Candidate School, will be paid P39,356. The pay of long-time educators and master’s or doctoral degree holders such as Principal l, Master Teacher I and Associate Professor I and veteran health workers such as Nurse IV and Midwife VI will be only be P2,743 higher, at P42,099 (SG19). — News5/InterAksyon

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