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Central bank reassures on BoP deficit

THE COUNTRY’S external payments gap remains manageable, the Bangko Sentral ng Pilipinas (BSP) chief said, citing robust economic activity behind the latest numbers.

BSP Governor Nestor A. Espenilla, Jr. said concerns over the balance of payments (BoP) deficit are “misplaced,” since the gap merely reflects rapid economic expansion fueled by rising investments.

The BoP measures the country’s transactions with the rest of the world at a given time. A deficit means more funds left the economy than what went in, while a surplus shows that more funds entered the Philippines.

The country posted a $1.735-billion BoP deficit as of end-October, a reversal from the $1.465-billion surplus recorded in 2016’s comparable 10 months, according to central bank data. This is also substantially wider than the $500-million deficit expected by the central bank for the entire 2017.

Sustaining a current account deficit — which measures the country’s external trade in goods — should also not be a cause of worry. Mr. Espenilla said the central bank sees the country’s current account deficit settling “well below” one percent of gross domestic product (GDP) for the entire 2017, albeit reversing from the $601-million surplus posted a year ago that was equivalent to 0.2% of GDP. The BSP expects the current account shortfall to settle $600 million this year, ending 15 years of surplus.

“[A]s observed, previous current account surpluses actually reflected low levels of investment — something also unsustainable and undesirable. Behind the deficit, the economy’s rapid growth is backed by rising investments,” Mr. Espenilla explained, citing increased importation of raw materials and machinery behind latest trade data.

“Eventually, we expect this to translate to higher productivity and exports which will support sustainability of the current account and the overall external payments position.”

The economy is well-armed against external shocks with $80.616-billion gross international reserves as of end-October, he noted.

Inflows from the steady stream of worker remittances, business process outsourcing revenues, tourism receipts, and increasing investment flows will prop up the country’s external position to balance out the increased importation.

Mr. Espenilla added that the Philippines is on track to hit the government’s 6.5-7.5% growth goal for 2017, with indications that expansion will pick up further to 7-8% over the next few years amid robust household and public spending, with a boost from the government’s planned infrastructure boom.

Philippine GDP grew by a faster than expected 6.9% in the third quarter, which pulled the nine-month pace to 6.7% from the first half’s 6.55%. “Our economic outlook is strong and robust… Further economic growth of 7-8% over the medium term is expected,” the central bank chief said, as he downplayed overheating risks.

Still, the BSP remains “vigilant” over upbeat growth in bank lending, with total credit posting a 21.1% surge in September.

On the exchange rate, Mr. Espenilla said the “modest and controlled depreciation” of the peso against the dollar simply illustrates the economy’s “structural shift from being consumption-led to being more investment-led.”

The peso averaged P50.3412 against the greenback for the first 10 months, touching 11-year-lows in October as it logged above the P51 level. The central bank has employed “tactical intervention” to smooth out excessive swings during day-to-day trading. — Melissa Luz T. Lopez

Study notes firms’ low awareness of inclusive business

COMPANIES in the Philippines are largely unaware of inclusive business practices which would otherwise help overall rapid economic expansion benefit more of the poor, according to findings of a joint study of the Board of Investments (BoI) and the United Nations Development Program’s (UNDP) Istanbul International Center for Private Sector in Development (IICPSD) that were released to journalists yesterday.

A joint BoI-UNDP IICPSD press release — which accompanied the release of the Business+ The Philippines report — noted that inclusive business “offers an opportunity to not only generate profit, but also helps those at the base of the economic pyramid and thereby contribute to reducing poverty in the country.”

Findings from 19 interviews with Philippine business executives and results of an online survey e-mailed to senior executives of 223 companies of various sizes and belonging to various industries “showed that the current levels of awareness and engagement in inclusive business are low.”

“[A]wareness was quite low and the terminology was hardly in use at all,” read the report itself, citing a mean score of 1.51 out of 7 where 1 meant “not aware at all.”

“Even those companies that exhibited inclusive business practices were not aware that they were actually already doing it and they did not consider themselves inclusive businesses,” it added.

“The lack of awareness regarding their own practices in inclusivity can easily result in their not being able to go further with it and benefits not being maximized in terms of reaching the poor.”

And while respondents believed such models were applicable to their industry (4.64 out of 7) and could be successful when applied (4.60 out of 7), “this attitude did not necessarily lead to engaging inclusive business practices.”

The study noted that inclusive business can especially be applied to “entry points” for the poor into the value chain: being an employee, consumer, supplier, distribution channel member, and entrepreneur.

“Around 33.6% of the participant companies did not even target the poor as customers or consumers while 26.9% did not do business with the poor in their distribution channels and 22.9% did not do business with the poor as suppliers,” the report noted.

Respondents had an overall inclusiveness mean score of 3.74, consisting of: 4.39 for employing poor people, 4.03 for investing in less developed neighborhoods, 3.79 for emphasizing the poor in one’s business strategy, 3.74 for considering poor people as entrepreneurs in one’s business model, 3.72 for emphasizing the poor in one’s mission statement, 3.52 for doing business with the poor (such as low-income producers) as suppliers, 3.41 for doing business with the poor in the distribution channel (e.g. as carriers, retailers, etc) and 3.35 for targeting the poor as customers/consumers.

Social enterprises had the highest scores across entry points, followed by large Philippine corporations, multinational corporations and small- and medium-scale enterprises.

The study also cited emerging inclusive business (IB) models in agriculture, tourism, health and education “but many of these companies were not aware that they were already undertaking IB practices.”

It also noted that respondents “see the national and local government bureaucracy and the existing regulatory environment in the country as the most significant challenges in doing inclusive business.”

In his foreword to the study, Ola Almgren, United Nations Resident Coordinator and UNDP Resident Representative in the Philippines, noted that while the country’s economy “has undergone unprecedented growth in recent years”, with gross domestic product expansion averaging 6.2% from 2010 to 2016 to make the Philippines “one of the fastest growing economies in Asia”, rates of underemployment and of poverty are still relatively high at 18.3% and 25.2%, respectively, while “inequality is still one of the highest in the region particularly in terms of income”.

“There are several ways companies can contribute to development but one is proving effective, sustainable, and feasible while addressing the unfulfilled gaps of poverty – inclusive business,” Mr. Almgren wrote.

“At its heart is the integration of the base of the economic pyramid — those that often get left behind — into companies’ value chains to ensure both commercial success and social impact,” he explained.

“Inclusive business underscores the idea that the pursuit of profit and development can and should be supportive of society’s more challenged sectors.”

For instance, Mr. Almgren said, “[c]ompanies can shift focus to creating commercially viable goods and services that will have a significant social impact while addressing the needs of the poor.” — with inputs from A. G. A. Mogato

Gov’t rejects banks’ bids for T-bills as rates go up

THE GOVERNMENT rejected all bids at yesterday’s auction of Treasury bills (T-bill) as it saw weak demand due to its recent offer of retail bonds.

The Bureau of the Treasury rejected bids totalling P10.5 billion, falling short of the planned P20-billion borrowing.

Broken down, the 91-day debt paper was met with demand worth P3.995 billion, lower than the Treasury’s offer of P8 billion.

The Treasury also rejected P3.466 billion worth of bids for the 182-day tenor, which also fell short of its P6-billion offer.

Lastly, the 364-day debt papers attracted P3.021 billion in demand, also below the programmed borrowing of P6 billion.

At the previous auction of T-bills last Nov. 16, average rates of the three-month, six-month and one-year tenors were quoted at 2.148%, 2.563% and 2.952%, respectively.

Meanwhile, at the secondary market ahead of yesterday’s auction the 91-day, 182-day and 364-day papers carried yields of 3.0318%, 2.9283% and 3.1008%, respectively.

Following the Treasury’s rejection of all offers, the yield on the three-month T-bill closed unchanged, while the rates of the six-month and one-year securities respectively dropped to 2.9075% and 3.0839%.

National Treasurer Rosalia V. De Leon said the government rejected all bids by banks after rates went above what the Treasury was willing to pay.

“[It’s really high.] If you would look, [we saw bids increase by] an average of 30 to 35 bps (basis points) across all tenors,” Ms. De Leon said after the auction.

The official said liquidity also went to the government’s offer of retail Treasury bonds (RTB).

“At the same time, [probably] they’re thinking that we may also reject given we have the abundant subscription into the RTB,” Ms. De Leon noted.

Meanwhile, sought for comment, traders said they anticipated the rejection, with one noting that increase in yields by more than 10 bps will be too big for Treasury.

“The banks are keen on buying RTBs so it’s not that surprising to see thinner volume of bids,” a trader said over the phone.

The Treasury awarded P130 billion worth of five-year retail bonds last Nov. 20 at a 4.625% yield.

Ms. De Leon said they have closed the offer period as of 3:30 PM yesterday, earlier than the initial cut-off date of Nov. 29.

The government borrows from both local and external sources to tap market liquidity in order to finance its budget deficit capped at 3% of gross domestic product, or about P482.1 billion.

This year, the government has set a P727.64-billion borrowing plan, 80% of which or P582.11 billion will be sourced from local lenders through T-bills and Treasury bonds. The P145.53-billion balance, meanwhile, will be borrowed from external creditors. — K.A.N. Vidal

MGen finalizes loan for Atimonan project

By Victor V. Saulon, Sub-Editor

MERALCO POWERGEN Corp. (MGen), the power generation arm of Manila Electric Co. (Meralco), has agreed with lenders on the terms of a P107.5-billion loan to fund about two-thirds of its 1,200-megawatt (MW) coal-fired power plant in Atimonan, Quezon.

“We’ve come to an agreement with the banks,” said Betty C. Siy-Yap, Meralco senior vice-president and chief finance officer, in a chance interview on the sidelines of the Management Association of the Philippines annual membership meeting on Monday at the Bonifacio Global City.

MGen is borrowing from eight local banks in Philippine pesos. The company previously placed the project’s cost at P135 billion.

“We need the PSA (power supply agreement) before we can finalize that one (loan),” she said. “But there’s an agreement.”

However, Ms. Siy-Yap said MGen unit Atimonan One Energy, Inc. (A1E) could not draw down on the loan amount until the PSA had been approved. The supply contract is pending with the Energy Regulatory Commission (ERC).

“The financial close will be achieved when we have the PSA approval,” she said.

She said so far, the questions raised by the ERC regarding the PSA had been clarified by the Meralco group.

“So I think they’re in the final stages,” she said, adding that the questions asked by the regulator were largely technical in nature and had been answered.

Separately, Oscar S. Reyes, Meralco president and chief executive officer, said “the prospects are good” for the sell down of the company’s stake in A1E. Meralco previously said that it would maintain a stake of least 51% and would not cede control of the project.

“Initially we had eight or 10,” Mr. Reyes said on the number of entities interested in investing in the project. “We are down to a shortlist of four.”

Mr. Reyes said the final selection would depend on “certain approvals,” referring to the PSA.

Sought for comment, Meralco Chairman Manuel V. Pangilinan said: “We’re close to finding one. It’s gonna be a foreign company.”

Asked if the group had identified one, he said so far the selection is “a short list of companies.”

“These are companies that are listed in their home domain,” Mr. Pangilinan said.

Asked about the prospects of the PSA approval with the appointment of a new ERC chairman, Mr. Reyes said: “I personally don’t know the chair too well.”

On Friday, the ERC confirmed receipt of Malacañang’s appointment of former solicitor-general Agnes T. Devanadera as its new chairman.

“We’re all hopeful that with her filling the position, that she can lead the ERC moving forward,” Mr. Reyes said.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

European Central Bank sticks with planned loan writedown rules amid Italian opposition

THE European Central Bank (ECB) is sticking to the substance of its plan to toughen bad-loan rules for euro-area banks even as it makes some adjustments in response to a barrage of criticism from Rome and Brussels, according to people with knowledge of the matter.

The ECB was accused of overreach in its recent proposal to hold banks to firm deadlines for writing down loans that turn sour. Daniele Nouy, the central bank’s head of supervision, has said that the wording of the plan will be improved and some concessions could be made. But the core of the plan will remain in place, the people said, asking not to be identified because the deliberations are private.

The draft guidance requires banks to provision fully for loans that turn sour from the start of next year, with a two year deadline for unsecured nonperforming debt and seven years for secured. Many of the 19 countries represented on the ECB Supervisory Board support a similar approach to existing bad debt, though they’re mindful of the potential economic damage that could result from forcing banks into rapid writedowns, the people said.

Nicolas Veron, a senior fellow at Brussels-based think tank Bruegel, said that despite the criticism, the ECB’s supervisory actions on nonperforming loans “will be largely aligned with the initial proposal, and that’s good.” He also said the ECB needs to work on its communication skills.

‘WOODEN ANSWERS’
“On individual banks, they must give those wooden answers, but on policy issues it’s a bit different,” Veron said. “They should engage, they should consult, they should know their audience. They shouldn’t be surprised by such a reaction.”

An ECB spokesman declined to comment.

The ECB’s draft guidance was published on Oct. 4. Officials in Italy, whose banks are weighed down by 318 billion euros ($379 billion) of bad loans, lined up to challenge it, with Finance Minister Pier Carlo Padoan warning that forcing banks to dispose of soured debt too quickly could “ derail” a recovery in the country’s financial system.

The European Parliament joined the pushback, led by its Italian president, Antonio Tajani, who said the ECB had proposed measures applying to all banks under its supervision, a power reserved for lawmakers.

Nouy has consistently disputed this claim. Last week, she reiterated that the ECB was setting out “supervisory expectations” with “no automatic actions attached to them.” The guidance “provides the basis for a structured dialogue with each individual bank,” she said.

The draft guidance for future nonperforming loans will be the subject of a public hearing on Nov. 30. The ECB is accepting comments on the proposal until Dec. 8.

Nouy has said the wording of the guidance will be improved to clarify that it will be applied on a bank-specific basis. The Jan. 1 start date could be moved back if the ECB needs more time to process feedback it receives during the public comment period. And she conceded that the comply-or-explain approach set out in the proposal “is probably not the right concept to be used in this context.”

The backlash against the ECB’s proposal on future nonperforming loans may have been an attempt to bully the supervisor into toning down the measures under consideration for banks’ soured-loan stock, the people said.

EXISTING DEBT
ECB supervisors discussed the need to extend the guidance to the stock when they signed off on the proposal for new bad loans at a meeting in October, said the people. Still, the options for the stock haven’t been formally discussed and no decision has been taken, they said.

Options for adapting the guidance to existing debt include a phase-in for provisions on loans that are overdue and haven’t been sufficiently written down, the people said. Another variant would stretch writedowns over a longer period than foreseen for new nonperforming loans (NPL).

A third would use the provisioning calendar as a last-resort punishment for laggard banks. The criteria could also be applied only to parts of a bank’s loan portfolio, one of the people said.

ECB President Mario Draghi and other EU authorities are prodding banks to sell or wind down the bad debt choking their balance sheets to spur lending and support economic growth. The central bank insists it can’t solve the problem on its own, and that laws need to change to allow banks to access collateral on delinquent debt more quickly.

The European Commission earlier this month began its own consultation process on “common minimum levels of capital that EU banks must set aside to cover incurred and expected losses on newly originated loans that turn nonperforming.” This followed the release of an action plan agreed on by EU member states in July.

“Despite all the progress, we’ll be dealing with the NPL issue for a while longer, this is far from over,” Korbinian Ibel, a director general at the ECB’s single supervisory mechanism, said last week. “There’s a lot that needs to be done which is outside the supervisor’s remit but very much that of the legislator. That’s the only way banks can quickly and forcefully reduce NPLs over the long term.” — Bloomberg

Ten years after retirement, Gokongwei says JGS businesses continue to flourish

JOHN L. GOKONGWEI, JR. found it odd that 10 years after his retirement he would be named “Management Man of the Year 2017,” a recognition that he accepted as rightly timed similar to how he mapped the course of JG Summit Holdings, Inc. (JGS) through the years.

“I have to say though that the timing is impeccable. The mark of a good manager, as they say, is to make oneself dispensable, and I believe that 10 years hence, the business has prospered under their capable leadership, coupled by a bench of professional management,” he said in a recorded acceptance speech just before he personally accepted the award given by the Management Association of the Philippines (MAP).

Mr. Gokongwei was referring to his brother James L. Go, JG Summit chairman and chief executive officer, and son Lance Y. Gokongwei, president and chief operating officer, as the capable leaders who took over the reins of the company he founded.

In his speech, the senior Gokongwei narrated how JG Summit was among the first Philippine businesses to list in 1993.

“Before that, we had built a pretty successful business, but in order to fulfill our ambitions of becoming a pan-ASEAN conglomerate, we would have to raise money in the capital markets and eventually in international credit markets. More so, unless placed under the spotlight of the public eye, a family-managed company would not be under pressure to perform. We would become soft and flabby,” he said.

In the process, he transformed his company into what he called a hybrid of family-led and publicly listed business that works.

“On the other hand, remaining family-managed would imbue the business with the stability, strong culture, and long-term vision necessary to see our investments bear fruit,” he said.

Mr. Gokongwei said the balance had allowed JG Summit to invest in capital-intensive businesses that bridged the first phase of its growth to its present one. This also allowed the group to provide local consumers with choices, including affordable air travel through Cebu Pacific Air.

“It has allowed us to contribute to our country’s manufacturing base, a step necessary to a nation’s progress, through JG Petrochemicals,” he said.

“It has allowed us to plant the Philippine flag in Thailand, Indonesia, Malaysia, Singapore, China, Cambodia, and Laos, where Universal Robina is now a major player, and in Oceania, where we have acquired leading snack food companies in Australia and New Zealand.”

This has also allowed the company to acquire holdings in Manila Electric Co., PLDT, Inc. and Singapore’s United Industrial Corp.

“Today, JG Summit and RRHI (Robinsons Retail Holdings, Inc.) are among the top conglomerates in the country, family-led, but professionally run,” he said.

Towards the end of his speech, Mr. Gokongwei said that aside from sustainability and succession, the mark of a good manager is “to build value, create jobs, and make money for shareholders.”

On building value, he said the company has never been afraid to enter into competitive markets but in doing so, it introduced innovative products.

“For example, both C2 and Great Taste White shook up the consumer beverage and coffee markets when they were introduced. Sun Cellular and Cebu Pacific also shook up the telecom and airline businesses by providing choices to many Filipinos, thus improving their lives,” he said.

Mr. Gokongwei said his company had created 60,000 jobs in the Philippines, including through the Gokongwei Brothers Foundation, which helps talented but less-fortunate kids “receive a fair shake in life.”

“Third, we have created value for our shareholders,” he said.

In 1956, he recalled putting up Universal Robina Corp. with P3.5 million, money that he saved from selling used clothing, old newspapers, and other knick knacks. He also put in money from friends to whom he said he remains grateful.

JG Summit listed in 1993 with a market capitalization of P6.3 billion, but now his two holding companies — JG Summit and RRHI — are valued at P665 billion.

In closing, he thanked his mother and siblings for being his partners in starting JG Summit.

“When we were still operating out of a small tindahan on Martinez St. in Cebu City, they acted as bodegeros, clerks, all-around handymen. They were with me from the very beginning,” he said.

Sought for comment, his son Lance said: “We’re just very proud for my father.” — Victor V. Saulon

House inquiry on Sereno awaits SC invitees

THE House committee on justice on Monday resumed hearings on the impeachment complaint against the chief justice without majority of the resource persons, including the two magistrates invited to testify on several impeachable acts allegedly committed by Maria Lourdes Sereno.

The attendance to the hearing of Supreme Court (SC) associate justices Teresita J. Leonardo-De Castro and Noel Tijam, and lawyer Theodore Te, the high court’s chief public information officer, would still be determined by the full court. The 15 SC justices, sitting en banc, will meet on Tuesday, Nov. 28.

Oriental Mindoro Representative Reynaldo V. Umali, chairperson of the committee, also called for an executive session to discuss how to deal with the absence of the invited resource persons.

“We will call for an executive session to deal with the request of many witnesses or invited guests, who seek a deferment of their appearance in today’s hearings because they clarified they needed the authorization from the Supreme Court en banc because of a prior internal policy and rule of the SC,” he said.

“The chair manifested that we will respect this internal rule as we call on them to also respect the impeachment rules of the committee,” Mr. Umali added.

Siquijor Representative Ramon V.A. Rocamora and ABS party-list Representative Eugene Michael B. De Vera proposed that the committee also discuss during the executive session whether or not it would accept the pleadings submitted by Ms. Sereno if she does not attend the hearings.

In his testimony on Monday’s hearing, The Manila Times senior reporter Jomar Canlas denied that Ms. de Castro was his informant and further refused to reveal who his sources were.

He was named by lawyer Lorenzo G. Gadon as the source of his information on the falsification of a temporary restraining order (TRO) and other charges that Mr. Gadon filed against Chief Justice Maria Lourdes P.A. Sereno.

Ms. Sereno is accused, among other offenses, of falsifying, tampering or altering the TRO of the Supreme Court (SC) in the case of the Senior Citizen’s Party List vs COMELEC in GR No. 206844-45.

Ms. De Castro supposedly recommended the issuance of a TRO and sent a draft to Ms. Sereno’s office, but the final version from Ms. Sereno was different from the original one.

During Monday’s continuation of the House committee on justice’s preliminary investigation on the possible impeachment of Ms. Sereno, Mr. Canlas stated, “At the outset, I hereby deny that I have intimated to Atty. Gadon that the source of my article is SC Associate Justice Teresita J. Leonardo-De Castro.”

The journalist invoked Republic Act (RA) 53, also known as the Shield Law, as amended by RA 1477, which provides that any publisher, editor, columnist, or duly accredited reporter cannot be compelled to reveal the source of his news report unless in case of national security.

Mr. Canlas went on to emphasize that he had never disclosed his sources to anyone in his 25 years as a journalist, mostly covering the justice beat.

When asked by the members of the committee, Mr. Canlas maintained his stand not to disclose his sources who he added “are reliable and well-placed.” He also said that in line with his responsibility as a journalist, he vetted the information he gathered with several sources before writing his article.

Regarding Mr. Gadon, Mr. Canlas said, “It was some time in March, your honors please, and that’s the first time I met him.”

When asked to comment, Mr. Gadon said, “Your honor, I cannot really remember now whether it was Jomar Canlas who intimated it to me but I talked to him several times and he may have intimated it to me, your honor.”

He also said: “Mr. Jomar Canlas may have intimated it to me or not but I really cannot remember because there are a lot of people who are giving me information during those times and considering that there are 300 or so documents involved in this case, your honor, I really cannot now recall, or I cannot really say that he did not disclose it to me.”

Oriental Mindoro Representative Doy C. Leachon, vice-chairman of the justice committee, said: “Mr. Chair, I would like to remind the complainant that we’re dealing only with one of these cases [out of 27 charges], this particular case of TRO, and if you (Mr. Gadon) cannot provide, there must be, again as I said during the last hearing, you must be having some problems here.”

Asked if he stood by a 2013 story of his titled “Justice blasts Sereno over TRO mess,” wherein he reported that the chief magistrate supposedly “endured a harsh tongue-lashing from… De Castro” due to the “tampered” TRO, and cited a separate The Manila Times story where “Sereno admitted that she tinkered with de Castro’s draft ruling,” Mr. Canlas said he did.

Mr. Canlas’s article also notes that The Manila Times had gotten “hold of a copy of Sereno’s letter to De Castro, wherein the chief justice allegedly admitted that she had deliberately changed the recommendation made by the latter who was the designated ponente of the TRO” or the justice assigned by the court to write its ruling.

The lawmakers then asked Mr. Canlas to produce the letter, but he said he did not turn it over to The Manila Times, and could no longer find it in his files, which he obtained in 2013.

Nevertheless, Mr. Canlas said he believed there was an “irregularity committed.”

He added that two documents were involved in the TRO issue: the original recommended TRO by Ms. De Castro, and the TRO that Ms. Sereno crafted later on.

Last Wednesday, Ms. De Castro issued a statement to reporters, saying, “I have never released to Jomar Canlas any information, report, or document regarding the work of the Court.” — reports by Tricia Aquino and Lira Dalangin-Fernandez of interaksyon.com and Minde Nyl R. dela Cruz

Witness in alleged right-of-way scam presented

AN IMMIGRATION Lookout Bulletin Order (ILBO) has been issued against former budget secretary Florencio B. Abad, former public works secretary Rogelio L. Singson and 41 others alleged to be involved in a so-called Road Right of Way scam that has supposedly cost the government P8.7 billion.

The ILBO dated Nov. 24 and approved on Monday by Justice Secretary Vitaliano N. Aguirre II read in part: “Considering the gravity of the possible offenses which may have been committed, there is a strong probability that they may attempt to place themselves beyond the reach of the legal processes of this Department by leaving the country.”

“We thus deem the issuance of an ILBO against the subject persons prudent in order to at least monitor the itineraries of their flight, travel, and/or whereabouts,” it added.

“The syndicate was allegedly led by Ms. Wilma Mamburam, Col. Chino Mamburam, Nelson Ti and Mercedita Dumlao, in connivance with other government officials and private individuals,” the ILBO further read, adding:

“They have been allegedly operating particularly in General Santos City wherein the group would collect ‘just compensation’ for the road right-of-way using fake land titles under fake claimants.”

Messrs. Singson and Abad are listed, respectively, as numbers 21 and 22 on the ILBO.

Mr. Aguirre bared last week the alleged scam which he said a witness could attest to. On Monday, he held a press briefing presenting the witness, Roberto S. Catapang Jr., who, he said, has been placed on the Witness Protection Program.

Mr. Catapang, for his part, said: “Hindi ko sila na-meet (Messrs. Singson and Abad) pero may documents to show na alam nila ang transaction.” (I did not meet them but there are documents to show that they know about the [scam]).

The government witness also presented a Dec. 23, 2013, letter of request by Mr. Singson and approved by Mr. Abad, in connection with a payment of P500 million for 18 fake land titles.

“Dec. 23, sinulat ni Secretary Singson, inapprove agad ni Secretary Abad,” Mr. Catapang said. (Dec. 23, Secretary Singson wrote a letter, approved right away by Secretary Abad.)

Mr. Aguirre for his part noted the said amount’s approval four days after its request. “Unusual. Christmas Time. Di nila hinintay bagong taon,” he said. (They didn’t wait for the new year.)

Mr. Catapang also named an in-law of former president Benigno S. C. Aquino III. — Andrea Louise E. San Juan

Pangilinan says PLDT open to partnership with Chinese telco

PLDT, Inc. is keen on partnering with a Chinese company to become the third player in the country’s telecommunications industry.

“I think it’s a rather novel idea. And I think it’s something we should consider at the PLDT level,” said Manuel V. Pangilinan, PLDT president, chairman and chief executive officer, told reporters on the sidelines of the Management Association of the Philippines annual membership meeting on Monday at the Bonifacio Global City.

“Yeah, either at PLDT or at Voyager or both,” he added, referring to Voyager Innovations, Inc., the digital innovations unit of PLDT and subsidiary Smart Communications, Inc.

He made the statement when asked about his views of a third player entering the industry as announced by President Rodrigo R. Duterte.

He said his “stock answer” would be that he welcomes a third, fourth or fifth player, which Mr. Duterte said he would offer to a Chinese company.

“Voyager is in the process of looking for strategic partners and it’s possible that we may have a Chinese partner,” Mr. Pangilinan said.

“Voyager is a start-up innovation company, not only in fintech, but they’re also in e-commerce, they’re also in marketing technology as well,” the PLDT chairman said.

He said it would not be up for the company to say whether there is room for a third player in an industry dominated by PLDT and Smart on one hand, and Ayala-led Globe Telecom, Inc. on the other.

But should the PLDT group partner with a Chinese firm, Mr. Pangilinan said: “Most likely they would come in at the Voyager, the parent company.”

“We will announce it when it happens,” he said, adding he would want the partnership to happen “as fast as we’d like to.”

Earlier this month, Mr. Duterte offered China the chance to operate the third telecommunications carrier in the country during a bilateral meeting with Chinese Premier Li Keqiang. No specific Chinese company was mentioned.

“The telecom industry’s duopoly is about to end with the entry of the Facebook subsidiary as well as the offer by the President of the People’s Republic of China to operate the third telecom’s carrier,” Presidential Spokesperson Harry L. Roque, Jr. had said.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Victor V. Saulon

Peso strengthens ahead of Powell hearing

THE PESO surged against the dollar on Monday as the greenback performed weak in Asian trading.

The local unit closed at P50.51 against the greenback yesterday, gaining 21 centavos from Friday’s P50.72-per-dollar finish.

Yesterday’s close was also the highest in over three months or since Aug. 8’s P50.44-a-dollar finish.

The peso opened Monday’s session slightly stronger at P50.71 against the greenback. It moved to as low as P50.74 during the session, while its intraday high was its closing rate.

Dollars traded, however, slid to $655.06 million from last Friday’s $751.65 million.

Traders attributed the peso’s strength to the generally weak performance of the dollar in Asian markets.

“The peso opened flat this morning but it gradually [climbed] in the afternoon trading partly due to the weaker dollar elsewhere,” a trader said over the phone on Monday.

Guian Angelo S. Dumalagan, market economist of Land Bank of the Philippines (Landbank), attributed the dollar’s slump to weak US economic data released on Friday.

“The peso appreciated today amid last Friday’s weaker-than-expected US data on manufacturing and services,” Mr. Dumalagan said on Monday, noting that the persistent concerns over the low US inflation also affected the greenback.

Another trader said the market is on a wait-and-see mode as Jerome H. Powell, US President Donald J. Trump’s nominee to head the Federal Reserve, appears at a Senate confirmation hearing Senate on Tuesday where his policy views will be put under a microscope.

The US Senate Banking Committee holds a hearing on Tuesday to confirm Mr. Powell to succeed Janet L. Yellen at the Federal Reserve.

“Apart from continuity in the Fed’s stance to gradually hike rates, Powell is on board with the unwinding of the Fed’s balance sheet to $2.5-3 trillion from $4.5 trillion,” DBS Group’s FX Strategist Philip Wee said in a note.

Landbank’s Mr. Dumalagan added that the peso may rode to the stronger euro brought by the “upbeat Eurozone data and positive assessments from [European Central Bank] President [Mario] Draghi last week.”

Traders are expecting the peso to move higher today, playing between P50.30 and P50.80.

The dollar index, which measures the greenback against a basket of six major currencies, was flat at 0523 GMT, while US bond yields were unmoved from Friday’s levels. — with Reuters

Duterte to seek special session on draft BBL

PRESIDENT Rodrigo R. Duterte on Monday, Nov. 27, said he will ask Congress to hold a special session on the proposed Bangsamoro Basic Law (BBL).

“I will work very hard for it, I will ask Congress for a special session just to hear you talk about it. Sabi ko ito sagrado ito, importante to. Mahalaga ito (I said this is sacred, this is important.),” Mr. Duterte said, addressing the first Bangsamoro Assembly held in Sultan Kudarat on Monday by the country’s main Muslim guerrilla group, the Moro Islamic Liberation Front (MILF).

The group staged a huge rally Monday at its southern headquarters that attracted Christians and rival rebels, in a joint effort with the government to reignite a stalled peace process.

“I will ask Congress, I said, one day, one session. Nur Misuari would be there to present their platform, then we’ll work (this) out. If it’s not in consonance with each other, then we work out but at least the Filipino people should be given a day what we intend to do,” he added.

Mr. Duterte also reiterated his promise to have the BBL passed.

“Ang akin, it must be inclusive, lahat. Walang maiiwan dito sa peace talks na ito, MILF, MNLF, lahat na, Lumad, kailangan kasali,” he said.

(It must be inclusive, all. No one should be left behind in these peace talks. MILF, MNLF [Moro National Liberation Front], all, even Lumad, they need to be included.)

Mr. Duterte did not give further details on his proposed special session, but said, “Me? I support you. Do not ever, ever, question me. Delay? Of course it entails delay. It takes forever to move. Somebody has to push it. Because there are thousands of concerns.”

Under Article VI, Section 15 of the 1987 Constitution, “The President may call a special session at any time.”

The MILF signed a peace deal in 2014 that would give the nation’s Muslim minority self-rule over parts of the southern region of Mindanao, but a proposed law to implement the pact has not been able to get through Congress.

The immediate objective of Monday’s rally was to build support for the proposed law.

No firm crowd numbers were immediately available as of Monday morning but an AFP journalist at Camp Darapanan reported seeing tens of thousands of people.

Among those in attendance were Cardinal Orlando Quevedo, the archbishop of Cotabato and the highest Catholic Church official in Mindanao, as well as members of the MILF’s main rival, the Moro National Liberation Front (MNLF).

The BBL, currently pending in the House of Representatives, is aimed at establishing the Bangsamoro Autonomous Region which would replace the Autonomous Region in Muslim Mindanao.

The proposed law was drafted by the Bangsamoro Transition Commission and endorsed in the House last September by Speaker Pantaleon D. Alvarez and House Majority Leader Rodolfo C. Fariñas. — Rosemarie A. Zamora, with a report by AFP

Senate OK’s priority bill on ‘balik’ scientists program

THE SENATE on Monday, Nov. 27, approved on third and final reading a priority bill which seeks to institutionalize benefits and incentives for scientists, engineers, and innovators of Filipino descent residing overseas to encourage them to stay in the country and work for national development.

Senate Bill No. 1533, also known as the Balik Scientist Act, was principally authored and sponsored by Senator Paolo Benigno “Bam” Aquino IV. It was approved on third and final reading with 13 affirmative votes, no negative vote and no abstention, the Senate reported in a statement on Monday.

Senate President Aquilino Martin Pimentel III and Senators Juan Miguel Zubiri, Joel Villanueva, Richard Gordon, Grace Poe, Sherwin Gatchalian, JV Ejercito and Cynthia Villar also served as co-sponsors of the measure.

Mr. Aquino said the measure would institutionalize the Balik Scientist Program, which was first launched in 1975 “to bring back Filipino scientists, engineers, and technology entrepreneurs to work in various fields, including heath, food and agriculture, information and communications technology (ICT), and even alternative energy.”

Among the benefits, incentives and privileges to be made available to Balik scientists under the program are tax and duty exemptions to importation of professional equipment and materials, exemption from licensing or permitting requirements, free medical and accident insurance “covering the duration of the engagement awarded by the Department of Science and Techonology (DoST), reimbursement of expenses for baggage related to scientific projects, and even exemption from “renouncing their oath of allegiance to the country where they took the oath.”

Grantees can participate in Grants-in-Aid research and development projects of the DoST with an initial lump sum research subsidy of P500,000 for short-term program, P500,000 to P2,000,000 for the medium-term program, and P2,000,000 for the long-term program, in accordance with relevant government rules and regulations and the need of the program involved.

The benefits also include special working and non-working visas, a round-trip business class airfare from a foreign country to the Philippines “exempt from local travel tax,” and DoST-subsidized visa applications.

Mr. Aquino, according to the Senate statement, said the bill sets different incentives and benefits for Balik scientists who would either work for the Philippines under a short-term program (minimum of 15 days to maximum of 6 months), a medium-term program (more than 6 months but not exceeding 1 year) or long-term program (1 to 3 years, subject to DoST renewal).

The bill also mandates additional benefits and rewards for “long-term” Balik scientists, such as the grant of special non-immigrant visas to the scientist, his or her spouse and their dependents as well as exemptions from requirements like immigration clearance certificate, alien employment permits, and payment of multiple entry fees.

Under the bill, long-term Balik Scientists awardees would enjoy relocation benefits, such as support in securing job opportunities for the spouse of the awardee, and admission support for the children of awardees in preferred schools, relocation allowance and monthly housing or accommodation allowance, and funding for the establishment and development of a facility or laboratory.

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