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The Cranberries singer Dolores O’Riordan, 46

LONDON — Irish singer-songwriter Dolores O’Riordan, frontwoman of the multimillion-selling rock band The Cranberries, died suddenly in London on Monday, aged 46, her publicist said.

“Irish and international singer Dolores O’Riordan has died suddenly in London today, family members are devastated,” Lindsey Holmes said in a statement.

“The lead singer… was in London for a short recording session,” she added. “No further details are available at this time.”

A spokeswoman for London’s Metropolitan police said officers are “dealing with a sudden death” after they were called to a hotel in Park Lane, in the center of the British capital, at 0905 GMT this morning.

She did not confirm the identity of the person found.

“A woman in her mid-40s was pronounced dead at the scene,” the spokeswoman said. “At this early stage it is being treated as unexplained and enquiries continue,” she added.

Irish Prime Minister Leo Varadkar was among the first to pay tributes, calling O’Riordan “the voice of a generation.”

“For anyone who grew up in Ireland in the 1990s, the Cranberries were an iconic band, who captured all of the angst that came with your teenager years,” he said in a statement. “Her voice and her contribution to music will be remembered far beyond her native county for many years to come.”

FAMILY ‘VERY DEVASTATED’
The London Hilton on Park Lane confirmed “with deep regret” that an unnamed guest had “sadly passed away” at its hotel.

“Team members acted swiftly to alert the Metropolitan Police and we are cooperating fully with their investigation,” a spokeswoman said.

The Cranberries achieved international success in the 1990s with their debut album Everyone Else is Doing it, So Why Can’t We? which included the hit single “Linger.”

Follow-up album No Need to Argue went to No. 1 in Australia, France, and Germany, and No. 6 in the United States.

The album also gave rise to politically charged single “Zombie,” an angry response to the deadly Northern Ireland conflict, which hit No. 1 across Europe. The band sold around 40 million records worldwide.

O’Riordan, from Friarstown in the Irish county of Limerick, will be buried in Ireland, according to the parish priest in her home town.

James Walton, priest at Ballybricken and Bohermore parish, told Britain’s Press Association her family “is very devastated and upset.”

“Her family are still waiting for more details to come from London about her death,” he said.

“The plan is for her to be buried here at home. When that will be will depend on when her body is released.”

‘IMMENSE INFLUENCE ON ROCK’
The Cranberries, formed in 1989 but went on a hiatus in 2003.

O’Riordan told AFP in a 2012 interview that “we were stuck in a rut. We just needed a break.”

She headed to Canada, where she gave birth to her third child, but The Cranberries reformed in 2009 after getting together for a one-off show.

“At home I’m a house-keeper and a mum. The kids are, like, ‘What’s for dinner? Where are my clothes?’. On tour it’s, like: ‘room-service,’” she said of the comeback.

She hit the headlines in 2014 after pleading guilty to assaulting three police officers and a flight attendant during a flight from New York to Ireland, and was diagnosed with bipolar disorder shortly afterwards.

The band was forced to cancel 14 concerts last year due to “medical reasons associated with a back problem” for O’Riordan.

The singer’s last Facebook posting came shortly before Christmas.

“Hi All, Dolores here. Feeling good! I did my first bit of gigging in months at the weekend, performed a few songs at the Billboard annual staff holiday party in New York with the house band,” it read.

“Really enjoyed it! Happy Christmas to all our fans!! Xo.”

The band recently played in South America, with O’Riordan tweeting pictures of a show in Lima, Peru.

O’Riordan married Don Burton, former tour manager of Duran Duran, in 1994 but the couple, who had three children together, divorced in 2014.

British 1980s band Duran Duran posted on their official Twitter page that “we are crushed to hear the news about the passing of Dolores O’Riordan. Our thoughts go out to her family at this terrible time.”

The Cranberries released their final album Something Else last year. — AFP

ADB grant to help fund Mindanao Railway initial planning

THE GOVERNMENT is planning to tap a $5-million grant from the Asian Development Bank (ADB) to prepare the first phase of the Mindanao railway, the Department of Finance (DoF) said.

The program is called the Strengthening Infrastructure Capacity and Innovation for Inclusive Growth technical assistance grant made in October.

“The Department of Transportation (DoTr) has proposed that preparation activities for the Tagum-Davao-Digos segment of the Mindanao Rail Project be covered by the ADB grant,” the DoF said in a statement.

The DoTr’s planning exercise is separate from the National Economic and Development Authority’s (NEDA) plan to utilize the funds for its Project Facilitation, Monitoring and Innovation Task Force — an interagency committee to address infrastructure development bottlenecks.

The Mindanao Rail project-Phase 1 spans 102 kilometers traversing the cities of Tagum, Davao, and Digos.

As approved by NEDA Board, it would cost some P35.26 billion, to be funded out of the government budget, and is targeted to start construction by the third quarter this year.

The government expects the first phase to be completed before 2022.

Aside from the technical assistance grant, the ADB also provided a $100-million loan in October for the preparation of its infrastructure projects — a majority of which will be implemented by the DoTr and the Department of Public Works and Highways.

The government on the other hand will provide counterpart funding of $60 million for the infrastructure preparation facility.

The administration plans to spend some P8.4 trillion in infrastructure until 2022, which is expected to boost economic growth to 7-8% starting this year. — Elijah Joseph C. Tubayan

How PSEi member stocks performed — January 16, 2018

Here’s a quick glance at how PSEi stocks fared on Tuesday, January 16, 2018.

Nation at a Glance — (01/17/18)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

How this food business won the heart of ‘u‑belt’ students

In a world of sushirritos and avocado toast, a Filipina millennial decided to bet on something else.

Kathleen Ragos, whose foray into the food business happened on her senior year in college in 2009 with a Morayta‑located kiosk called “Kubo” (that offered iced coffee called “Star Kubo”), decided in 2011 that the students in the university belt area were ready for budbod: a dish of glutinous rice wrapped in a banana leaf, the specialty of her hometown Rizal.

“I enjoyed it because there was a growing following, that’s when we decided to move the business to a 24‑seater place. We grew every semester until we could expand into a 90‑seater venue,” she recounted in an interview with SparkUp.

For Ragos, an education graduate, venturing into business is different from what she was supposed to pursue as a career, but her firsthand experience as a student constantly looking for affordable food and good service led her to put up the business.

Next month, her store, which is now called Juana’s Budbod and Coffee is opening its first branch at an SM mall.

“They (SM) are scouting for new potential concepts. They have invited us for a talk, deliberated over a panel if our concept and food are great. Gladly, we passed,” she said.

Though Cavite is relatively far from budbod’s origin, Ragos is confident that the dish “will be a hit in Cavite” with the “fast paced lifestyle of Caviteños who love to eat.”

STUDENT ROOTS

Juana’s story is a story of succeeding in the otherwise competitive student crowd. While places near schools command a high foot traffic (the Far Eastern University in Manila, for example, has a total of 30,000 students), it also means more competition—not just in terms of pricing but also concept.

“We like the creativity behind the simple concept of budbod. The usual comfort food in the university belt are oily food, so we make sure that our preparation is healthy and we serve vegetables on the side,” she said.

That eventually became a value that ran deep in the company’s veins: “We stick to our core principle to remain classic. Budbod is very powerful for us in a sense that it is served in a very unique way, and is eaten in a very unique way, but it looks simple. Everybody who sees budbod is interested to try it.”

Currently, at the lone Mendiola outlet, the flavourful thick rice sprinkled with meat and spices and served with ensalada (tomato, onion, salted egg salad) and Dalandan juice starts at ₱89. A group can also avail of its boodle fight version of the sticky delicacy.

Aside from the meals, Juana’s has a homey feel that harks to the provinces—something that those who hail from faraway lands may revel in when they’re tired of the typical urban, minimalist interiors of most Manila food shops.

For Ragos, running a business with students as the target market has its pros and cons. The business forces them to strictly base their products’ prices on the usual budget of college students, which, on the brighter side, teaches them to minimize cost.

“We carefully studied how to increase the yield of our meats without sacrificing the home‑cooked quality of the food, the process to achieve a good performance despite less manpower,” she said.

With their operation immensely depending on students’ schedule, Ragos said they have “play around their business model” to address lapses during off‑peak seasons, holidays, typhoons, and floods, which all prompt schools to suspend classes.

“We attend to the most obvious challenges of the business. We respond, correct, and develop what must be. We use tools to align everyone in the company with our vision and strategies, so that together we maintain the magic, synergy and charm of the business,” she said.

Putting up a food shop—or even just a small stall—in the vicinity of a school is probably the most ideal business. After all, where will students resort to after a long day? But succeeding in such venture requires more than sparing money and time. It takes courage to resist competition, the constant market movement because of trends, and ever‑changing taste of students.

BSP readies check on excessive lending

THE CENTRAL BANK will impose minimum leverage standards on big banks starting July, which will serve as another tool to prevent excessive debt exposures and improve their financial footing.

In a statement yesterday, the Bangko Sentral ng Pilipinas (BSP) said it will enforce the five-percent minimum leverage ratio covering universal and commercial banks starting July 1, mirroring a similar move by international regulators.

The computation of the ratio includes subsidiary and quasi-banks owned by a big bank.

Introduced in June 2015, the five-percent leverage ratio imposes a general standard on how much capital banks should have to cover non-risk weighted assets.

The central bank said the preventive measure is designed to “constrain the potential buildup of leverage in the banking industry and to promote stability of the financial system.”

Once in place, the leverage ratio will boost capital buffers maintained by banks against potential risks, and will complement the 6.0% common equity Tier 1 ratio, the 7.5% Tier 1 ratio, and the 10% capital adequacy ratio (CAR) imposed by the central bank.

The BSP defines the ratio as a backstop measure to mitigate the “excessive” accumulation of assets in the banking system by comparing a bank’s high-quality Tier 1 capital to its total loan exposures.

The five-percent standard to be imposed by the BSP is well above the three-percent minimum set under the Basel 3 regime, much like the domestic CAR which is above the eight-percent global standard.

Included in the computation of the leverage ratio are the reported amounts of accounts on the balance sheet as well as off-balance sheet items like derivatives and securities financing transactions, the central bank said in its statement.

Last year, central bank officials have said that big lenders are generally ready to comply with the five-percent leverage ratio as they remain armed with ample high-quality capital as buffers.

The leverage ratio forms part of an array of risk management measures outlined under the Basel 3 framework that was crafted by international policy makers to prevent a repeat of the 2008 Global Financial Crisis.

At the time, governments had to step in and bail out fallen banks using public money, which consequently triggered widespread recession.

Adoption of Basel reforms is voluntary and can be done gradually by central banks, with the full rollout scheduled by 2019. Last year, the BSP pushed back the adoption of the leverage ratio to 2018, citing revisions made by the Basel Committee on Banking Supervision on this regulatory standard. The global body adopted a simpler model for computing leverage that kicked in this month following a review of the standard. — Melissa Luz T. Lopez

Remittance increase slows in November

By Melissa Luz T. Lopez
Senior Reporter

CASH REMITTANCES increased annually for a second straight month in November last year but at a slower pace, the central bank reported yesterday, as overseas Filipino workers (OFWs) likely held on to their cash given a stronger exchange rate.

Money sent home by migrant workers totalled $2.262 billion that month, smaller than the $2.275 billion inflows recorded in October though two percent more than November 2016’s $2.217 billion, the Bangko Sentral ng Pilipinas (BSP) said.

While monthly inflows have stayed above $2 billion since February 2016, November 2017’s rise was slower than the year-ago’s 18.5% surge and October last year’s 8.4%, according to BSP data.

Remittances coursed through banks totaled $25.318 billion as of November, 4.0% more than the $24.341 billion recorded in 2016’s comparable 11 months. This growth pace matches the central bank’s forecast for the entire year, during which it expects total remittances to hit a fresh high at $28 billion.

The United States and Germany were the biggest sources of remittances in November alone.

Land-based OFWs sent 3.7% more money over the preceding year, while those working at sea wired 5.1% more than in 2016.

Sought for comment, a bank analyst said the stronger peso and easing price pressures on basic goods may have prompted overseas workers to send less money to their families in the Philippines.

“I think the slowdown in overseas Filipinos (OF) remittance growth for November was partly induced by a monthly appreciation in the Philippine peso vis-a-vis the US dollar as well as a moderation in inflationary pressures,” said Angelo B. Taningco, economist at Security Bank Corp. “[T]he stronger peso would tend to have discouraged OF remittances.”

The peso averaged P51.0384 versus the dollar in November, posting a slight recovery from the previous month’s P51.3433 as it traded at the P50 level against the greenback. The local currency touched fresh 11-year-lows in October as the peso traded above the P51 level against the greenback. A stronger peso-dollar rate meant that foreign currencies sent by OFWs are worth less once converted to pesos.

Domestic inflation also eased to 3.3% in November from October’s three-year peak of 3.5%, reflecting moderate overall price increases.

Mr. Taningco said remittance growth likely remained “modest” in December, as inflation steadied while the peso traded around the P49:$1 mark.

“With this, I believe OF remittances’ contribution to household consumption and economic growth during the fourth quarter of last year may have been modest also,” the bank economist added.

Remittances support domestic consumption, which in turn spurs overall economic growth. The Philippine economy expanded by 6.9% in the third quarter, pulling the nine-month climb to 6.7% against the government’s 6.5-7.5% full-year target for 2017.

Remittance increase slows in November

Jury still out on whether TRAIN will spur household consumption

By Krista Angela M. Montealegre
National Correspondent

AS CONSUMERS take on the burden of higher sales taxes, there is lingering uncertainty over the impact of the tax reform program on consumption — a key growth engine of the economy.

While the first of up to five planned tax reforms — Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) that was enacted last month and which took effect on Jan. 1 — will put more money into the pockets of Filipino wage earners who will now pay lower personal income tax, concerns have been raised over the tax plan’s potential effect on household spending since it will jack up levies on fuel, cars, tobacco, coal and sugar-sweetened drinks, among others.

Golden Arches Development Corp. (GADC), the master franchise holder of McDonald’s in the Philippines, and Max’s Group’s Inc., the country’s largest casual dining operator, will see higher input costs as a result of the tax plan overhaul, which they may pass on to consumers to protect their margins.

“There’ll be some period of resistance, but eventually we’ll be okay. I’m still very confident,” GADC President and Chief Executive Officer Kenneth S. Yang told reporters last week.

The Bangko Sentral ng Pilipinas (BSP) expects 2018’s full-year inflation to accelerate to 3.4% from 3.2% in 2017, with higher excise taxes adding “less than one percentage point” to price increases this year.

Consumption accounts for more than 60% of gross domestic product, which measures the value of final goods and services produced in a country.

“We may have to raise prices because our beverage prices will go up, but what we try to do is we balance everything out to make sure we continue to provide a lot of value for our customers,” Mr. Yang said.

McDonald’s offers bundled value meals that pair soda with regular fast-food menu staples hamburger and fried chicken.

S&R Membership Shopping has stopped serving unlimited soft drinks at the start of the year due to the higher taxes on sweetened beverages.

Max’s Group, on the other hand, is also exploring a number of options to mitigate higher input costs, including price increases and leveraging on its scale, Paul C. Cheah, the company’s investor relations officer, said in a mobile phone message.

“The market can absorb a price increase of 1-3% every year and when you go beyond that level, consumers cut down on their eating-out spend,” COL Financial Group, Inc. Head of Research April Lynn L. Tan said in a phone interview.

In the past, some companies had opted to cut the size of some their products instead of raising prices amid stiff competition in the industry.

Still, McDonald’s plans to open at least 40 branches this year and Max’s Group intends to roll out 80-90 new stores, including 20-30 outlets overseas, underscoring the solid outlook for their businesses, company officials said.

“The tax reform law is seen to boost consumer discretionary spending which in general should benefit the retail/food and beverage sector,” Mr. Cheah said.

SM Prime Holdings, Inc., the country’s biggest shopping mall developer and operator, also expressed confidence that consumer spending will stay robust despite the impact of higher inflation.

“Despite the increase taxes on key consumer products like fuel, sugar-related and ‘sin’ products, the overall impact favors higher purchasing power of most consumers,” SM Prime President Jeffrey C. Lim said in a text message, citing the higher net take-home pay of most salaried workers.

Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, concurred with Mr. Lim’s statement in an e-mail, saying the outlook for consumer spending remains strong for the year despite the implementation of the initial package of the tax reform program of President Rodrigo R. Duterte.

The sustained rapid economic expansion, expected to grow 6.5% year-on-year, will help support growth in household incomes, underpinning consumer spending growth that will also be boosted by lower income taxes in the tax reform package, Mr. Biswas said.

However, there have been some cautionary signs on spending even before the higher taxes kicked in.

Market research firm Kantar Worldpanel projected last month a “downward trend” in the purchasing confidence of Filipinos, who are buying less fast-moving consumer goods (FMCG) as they become “more conscious” of their spending.

“The impact (of the tax reform law) will not be immediate. We haven’t seen yet our take-home pay so most Filipinos are on a wait-and-see mode,” Lourdes B. Deocareza, new business development head at Kantar Worldpanel, said in a telephone interview.

Ms. Deocareza cited the weak purchasing confidence data, which stood at -11.8 points in July to September 2017, down from a confidence rating of 0.8 in the same period in 2015.

“Filipinos, generally, are not risk-takers. We are more prudent when it comes to these things. Kung before pa lang na (If we had been) leaning on the cautious side na, how much more with the TRAIN program happening,” she said.

Finance dep’t seeks to reduce political pressures on realty tax

THE THIRD tax reform package which the Department of Finance (DoF) plans to submit to Congress by “midyear” will seek to ensure that real property tax assessment levels are adjusted promptly and are insulated from local political concerns.

While Republic Act No. 7160, or the Local Government Code of 1991, requires provincial, city or municipal assessors “to undertake a general revision of real property assessments… every three years,” many local government units (LGUs) have failed to observe this requirement.

taxpayers
Besides shifting the burden on those who can pay more, the administration’s comprehensive tax reform plan hopes to further reduce local authorities’ dependence on their units’ annual share in national government tax collections. — BW FILE PHOTO

That omission, in turn, has left LGUs — the country’s 81 provinces, 145 cities and 1,489 municipalities — heavily dependent on their annual share in national government tax collections, called internal revenue allotment.

“The problem is most local governments are very hesitant to increase their assessments kasi constituents might get mad,” Finance Secretary Carlos G. Dominguez III told reporters on Thursday last week.

LGU officials are elected every three years and can be reelected up to a third straight term.

“So what we are going to suggest in the law is the national government provides the assessment on the values,” Mr. Dominguez said, adding that his department aims to submit the proposal to Congress by “midyear.”

A Bureau of Local Government Finance (BLGF) official, who declined to be identified, said in an interview yesterday, that the tax reform proposal will, among others, form a committee consisting of representatives of BLGF, the Bureau of Internal Revenue (BIR) and LGUs to regularly review local assessor’s property valuations before recommending new levels to the Finance secretary for final approval.

The proposal will seek to harmonize fair market values used to compute local real property taxes and zonal values used by the BIR to compute taxes on the sale and transfer of such properties.

“There will be a proposed committee to review, there will be a single valuation. Right now, we have the zonal values prepared by the BIR and then the schedule of market values prepared by the local (government). So dalawang (two) values and we’re planning to make it a single valuation,” said the BLGF official.

“The committee will be the one to recommend to the Secretary of Finance. We are trying to strengthen them (LGUs) and separate the political side. Natatakot sila (Local officials are afraid) because of the political backlash since it (adjustments in assessments currently) will be through an ordinance.”

Mr. Dominguez said that, unlike RA 10963, or the Tax Reform for Acceleration and Inclusion that was enacted last month and which took effect on Jan. 1, the third package will be “revenue neutral.”

“…[F]or the local government it might be revenue-positive, but it really depends on them — how they will use that tool.”

Mr. Dominguez said LGUs will still exercise autonomy by deciding assessment levels, expressed in terms of percent of excess over valuation brackets.

“If they want to apply it high, or they want to apply it zero it’s up to them. So the principle of local autonomy is still maintained,” said Mr. Dominguez.

“So that’s what we will do, we will propose to the legislation where the national government will provide it (land values) and they (LGUs) impose the tax. Right now they do both.”

The BLGF official said the envisioned committee will cover only cities and provinces, since municipalities follow valuation set by provincial assessors. — Elijah Joseph C. Tubayan

SEC rescinds Rappler’s incorporation papers

By Krista A. M. Montealegre,
National Correspondent

THE Securities and Exchange Commission (SEC) has revoked the incorporation papers of online news site Rappler, Inc. and its parent company for failing to meet the constitutional limits on foreign ownership, as investors closely monitor the ruling’s implication on listed mass media companies.

In a 29-page decision dated Jan. 11, the SEC, in an en banc decision, ruled that Rappler and its parent Rappler Holdings Corp. (RHC) were “liable for violating the constitutional and statutory foreign equity restrictions in mass media.”

The Foreign Equity Restriction in Article XVI, Section 11(1) of the Constitution provides that “the ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly owned and managed by such citizens.”

“Revocation of certificate of incorporation on each respondent — Rappler, Inc. being the mass media entity that sold control to foreigners, and Rappler Holdings Corp. being its alter ego, existing for no other purpose than to effect a deceptive scheme to circumvent the Constitution,” the SEC said.

A copy of the ruling will be furnished to the Department of Justice “for appropriate action,” it added.

“There is substantial evidence that respondents intentionally created an elaborate scheme, upon which its receipt of over a million dollars from a foreign investor would be theoretically defensible — the investor would never own ‘stock’ and would never receive ‘dividends,’ and he would never become an officer or director, but respondents would still be able to give him his money’s worth in the form of negative control and cash distributions, all through a private contractual arrangement,” the SEC said.

While the “formal, in depth” investigation on Rappler’s corporate structure began on July 8, 2017, the SEC has embarked on an “internal, inter-departmental investigation” as early as December 2016 when it received a letter from the Office of the Solicitor General requesting an investigation “for any possible contravention of the strict requirements of the 1987 Constitution.”

SPOTLIGHT ON PDR
The probe focused on Rappler’s sale of Philippine Depositary Receipts (PDR) — a security which grants the holder the right to the delivery of sale of the underlying share — to foreign entities Omidyar Network Fund LLC. and NBN Rappler LP.

The SEC, also in its ruling, declared “void” the PDRs issued to Omidyar pursuant to Section 71.2 of the Securities Regulation Code for being a “fraudulent” transaction.

“The restriction of foreign equity prevents any scheme to transfer rights attached to equity — even in the guise of an equity derivative. The (Omidyar) PDR requirement of ‘prior discussion’ and ‘approval of 2/3’ was a grant of more than 0% control to foreigners; control no less than 100% reserved to Filipinos,” the SEC said.

The SEC explained that “control” is not limited to stock ownership, but involves “other schemes that grant influence over corporate policy, actions and structure.”

Armando A. Pan, Jr., officer-in-charge of the Office of the Commission Secretary, said in a mobile phone message on Monday the “decision is not final and executory” and Rappler can appeal the SEC ruling with the Court of Appeals within 15 days.

‘PURE HARASSMENT’
In a statement posted on its Web site, Rappler said the SEC decision was “pure and simple harassment,” noting it has “acted in good faith and adhered to the best standards in a fast-evolving business environment.”

“We intend to not only contest this through all legal processes available to us, but also to fight for our freedom to do journalism and for your right to be heard through an independent platform like Rappler,” it added.

President Rodrigo R. Duterte claimed in his second State of the Nation Address last June that Rappler is “fully owned by Americans,” an accusation that Rappler has repeatedly denied.

Listed mass media companies ABS-CBN Corp. and GMA Network, Inc. have issued PDRs in the past to obtain foreign capital without violating the constitution.

“I am just not sure if this will create a domino effect where ABS-CBN and GMA would be dragged into the investigation due to their PDR issuances too. But we won’t really know until the issue with Rappler has been fixed first,” said Jervin S. de Celis, equities trader at Timson Securities, Inc., noting that the “noise” may depress share prices of the media companies in the short term.

Solicitor General Jose C. Calida applauded the SEC ruling and vowed to defend the regulator’s “sound decision.”

“This decision demonstrates that even influential media outfits cannot skirt the restrictions set forth in the Constitution,” Mr. Calida said.

The National Union of Journalists of the Philippines, in a statement, said it is “outraged” at the SEC ruling, noting that it “was one of many threats (Mr.) Duterte has made against media critical of him and his governance, such as the Philippine Daily Inquirer and broadcast network ABS-CBN, whose franchise renewal he threatened to block.”

“Hindi muna ako magsasabi na ito ba ay tama o mali, kasi meron naman talaga tayong mga proseso na dapat na sinusunod. Basta ang nararapat dito, hindi pinipigil ang isang organisasyon kung naghahayag ng balita o opinyon basta lamang ito ay naaayon sa batas,” said Senator Grace L. Poe, chairperson of Senate Committee on Public Information and Mass Media. — with reports from Arra B. Francia, Minde Nyl R. dela Cruz and Camille A. Aguinaldo

Gov’t makes full award of Treasury bills

By Karl Angelo N. Vidal

THE GOVERNMENT made a full award of the P20 billion it planned to raise through the auction of Treasury bills (T-bills) yesterday, with yields ending mixed, as market players parked their funds in the shorter tenor.

Offers received for Monday’s auction totalled P50.1 billion, more than twice the amount the Bureau of the Treasury (BTr) wanted to raise through the auction of three-month, six-month, and one-year debt papers.

The government borrowed P9 billion under the 91-day term as it received bids worth P22.835 billion. With the strong demand, the average interest rate rose to 2.233% from the 2.148% fetched during the previous auction.

The Treasury also made a full award of the P6 billion programmed under the 182-day tenor as banks and financial firms wanted to lend as much as P13.93 billion yesterday. In turn, yields slid to 2.519% from 2.563%.

The 364-day papers followed this trend, with the government awarding P5 billion out of the P13.35 billion in tenders posted by market players. This drove the average yield sideways to 2.849% from the 2.952% fetched in the previous auction.

“Auction results revealed strong demand for the T-bills as average rates trended downward from the previous auction, except for the 91-day tenor,” according to a statement from the Treasury.

National Treasurer Rosalia V. De Leon explained that huge appetite for the shorter tenor drove the yields of the six-month and one-year papers down.

“There’s really a huge appetite for short-tenor maturities. They have to park it in something that is some shorter tenor,” Ms. De Leon said, adding that the yield for the three-month papers rose due to base effects.

Asked about the drivers for the huge demand in the short end, Ms. De Leon said: “There’s a lot of movements like the US Fed[eral Reserve]. Also, there’s some speculations that the BSP (Bangko Sentral ng Pilipinas) will tighten about two to three hikes. At the same time, there’s too much liquidity…”

Meanwhile, traders interviewed said they expected the full award of debt papers after the five auctions wherein the Treasury fully rejected all bids from the market.

“There was demand for the T-bills due to the five auction failures. The market is now ready to buy,” one trader said over the phone.

Prior to yesterday’s auction, BTr rejected five offerings as its cash buffer remained healthy after its successful retail Treasury bond offering last November wherein it raised P255.4 billion.

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

GLOBAL BONDS
Meanwhile, Ms. De Leon said the Treasury is just waiting for some clearances before offering the $2-billion global bonds, adding that they are “taking a very close look at the market.”

“US Treasuries have gone up by about five to seven basis points already. China would not be buying, but they eventually clarified that they’re rebalancing their portfolio. Japan has reduced its bond buying program. There’s some speculations that they started its tightening,” she explained.

Ms. De Leon added that the Treasury still finalizing the tenor with its underwriters, noting that they are looking at a maturity of around 10 to 25 years.

Asked for its underwriters, she said there would be six, with Citibank, N.A. and Standard Chartered Bank to serve as lead underwriters.

On Thursday, Deputy Treasurer Ma. Sharon P. Almanza told reporters that they are set to offer $2 billion worth of Republic of the Philippines bonds.

“The size of the transaction is $2 billion: $1 billion in new money and $1 billion for liab[ility management],” Ms. Almanza said.

Senator files resolution on constitutional assembly

SENATOR PANFILO M. Lacson on Monday, Jan. 15, filed a resolution calling on the Senate to convene itself into a constituent assembly to propose amendments and revisions in the 1987 Constitution.

Senate Resolution 580 proposes that the Senate “constitute itself into a Constituent Assembly to propose amendments to or revision of the Constitution and upon approval by three-fourths (3/4) vote of all its members, approve the said amendments to or revision of the Constitution.”

Yet members of the House of Representatives for their part insisted on joint voting by the two chambers of Congress in amending the Constitution.

According to Article 17, Section 1 of the Constitution on Amendments or Revisions, “Any amendment to, or revision of, this Constitution may be proposed by: (1) The Congress, upon a vote of three-fourths of all its Members; or (2) A constitutional convention.”

In Section 3 under the same Article, “The Congress may, by a vote of two-thirds of all its Members, call a constitutional convention, or by a majority vote of all its Members, submit to the electorate the question of calling such a convention,” the Constitution reads.

Senators, however, have insisted on voting separately on this matter, with an opposition member of the Senate noting that its inaction on this priority agenda may stop charter change on its tracks.

Justifying his proposition, Mr. Lacson cited in the resolution the opinion of constitutional experts Father Joaquin Bernas and retired Justice Adolfo Azcuna who both said that Congress is not required to convene jointly to discuss charter change.

“The two houses of Congress are not required, as they were under the 1935 Constitution, to be in…joint session,” Mr. Bernas was quoted as saying.

“There is no general provision which says that Congress…must meet in joint session. There is none. When it comes to amendment(s), it doesn’t say you have to meet in joint session,” Mr. Azcuna, who was also a member of the 1986 Constitutional Commission that drafted the present Constitution, told the senators for his part.

Majority Floor Leader Vicente C. Sotto III and Senators Juan Miguel F. Zubiri, Gregorio B. Honasan, and Grace Poe-Llamanzares have manifested that they be co-authors of the resolution filed by Mr. Lacson.

Several senators also took the position that both chambers must vote separately.

Ms. Poe said the House is free to file their own resolution regarding the constituent assembly. “They are free to file their own version. We believe that the voting should be separate,” she said in an interview with reporters.

But Southern Leyte Representative Roger G. Mercado, chairman of the House committee on constitutional amendments, said in a press briefing also on Monday: “On the part of the House of Representatives, we are limited to the provision (the said Article 17). We cannot make any interpretation other than what is stated in our Constitution.”

He added: “(F)orgive me from saying but I think my counterpart in the Senate, Senator [Francis N.] Pangilinan,…he was just wasting our time and the money of our people. Let us go ahead and convene already the constituent assembly (con-ass) and do our work. Because there are really needed provisions that have to be revisited and reviewed.”

Mr. Sotto when sought for comment said via text: “The Constitution clearly does not state jointly, only in the issue of martial law it is mentioned.”

The Senate committee on constitutional amendments and revision of codes is set to tackle the proposed revision on the 1987 Constitution on Wednesday.

Mr. Mercado said his committee is set to meet today, Jan. 16. — Minde Nyl R. dela Cruz and Camille A. Aguinaldo

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