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Police, CIDG now have subpoena power

The Philippine National Police (PNP) and the Criminal Investigation and Detection Group (CIDG) now have the power to issue subpoenas under Republic Act (RA) No. 10973, which President Rodrigo R. Duterte signed into law on March 1.

RA No. 10973 grants the chief of the PNP and the director and deputy director of the CIDG the authority to administer oath and to issue subpoena and subpoena duces tecum.

The said Act amends RA No. 6975 or the Department of Interior and Local Government Act of 1990.

The new law says the issuance of subpoenas shall be “in relation to” an investigation being conducted by the PNP and the CIDG.

It adds: “[S]uch powers shall be exercised solely by the aforementioned officials and may not be further delegated to any other person or office.”

The subpoena shall state the nature and purpose of investigation, and shall be directed to the person whose attendance is required.

Moreover, in the case of a subpoena duces tecum, “it shall contain a reasonable description of the books, documents, or things demanded which must be relevant to the investigation.”

“Failure to comply with subpoena and subpoena duces tecum shall authorize the filing of a case for indirect contempt under the Rules of Court with the Regional Trial Court.”

The new law is a consolidation of Senate Bill No. 1239 and House Bill No. 4863.

In his sponsorship speech, Senator Panfilo “Ping” M. Lacson, Sr. explained: “[W]hen Republic Act No. 6975, otherwise known as the “DILG Act of 1990” was passed into law, it integrated the Philippine Constabulary and Integrated National Police to establish the Philippine National Police (PNP). A review of this law would show that most of the powers were carried over except for the subpoena power…It seems absurd that the CIU, now more known as the Criminal Investigation and Detection Group (CIDG), with a mandate to undertake monitoring, investigation, and prosecution of all crimes involving economic sabotage and other crimes of such magnitude and extent as to indicate their commission by highly-placed or professional criminal syndicates and organizations, has lost its subpoena powers.”

“Let us correct this oversight by restoring the subpoena powers of the CIDG Director and his/her deputies. It is submitted that these powers are indispensable to carry out the mandated investigatory functions of the [CIDG],” he added. — Arjay L. Balinbin

New appointments include Honeylet’s cousin who was fired last year

Malacañang on Friday announced President Rodrigo R. Duterte’s 17 new appointees, including former commissioner of Presidential Commission for the Urban Poor (PCUP) Melissa Avanceña Aradanas who has been appointed as deputy secretary general of the Housing and Urban Development Coordinating Council (HUDCC).

In December last year, Mr. Duterte fired Ms. Aradanas, who is a cousin of his partner Cielito “Honeylet” Avanceña, along with other officials of PCUP including its head Terry L. Ridon.

Mr. Duterte signed the appointment papers of Ms. Aradanas last Wednesday, March 7.

On the same day, the President also signed the appointment papers of the following officials:

• Ma. Mercedes V. Dumagan, Director III, Department of Environment and Natural Resources;

• Lorina Noemi N. Silvino, Member, representing the Film Industry, Cinema Evaluation Board, Film Development Council of the Philippines;

• Meizelle G. Antonio, Labor Arbiter, National Labor Relations Commission, Department of Labor and Employment;

• Jennifer R. Santos, Labor Arbiter, National Labor Relations Commission, Department of Labor and Employment;

• Elenita Leis Esguerra-Yu, Labor Arbiter, National Labor Relations Commission, Department of Labor and Employment;

• Valfrie G. Tabian, Acting Director General, Bureau of Corrections, Department of Justice;

• Monica P. Teodoro, Special Envoy of the President to the United Nations Children’s Fund (UNICEF)

• Bruce S. Concepcion, Special Envoy on Transnational Crime, Office of the President

• Nannette Z. Villamor-Dinopol, Deputy Administrator, Maritime Industry Authority, Department of Transportation;

• Felix S. Alicer, Director IV, Department of Environment and Natural Resources;

• Maria G. Isip, Director III, Department of Environment and Natural Resources;

• Arnelyn May A. Abdon, Director IV, Department of Finance;

• Euvimil Nina R. Asuncion, Director III, Department of Finance;

• Lilia Belina R. Tan, Director III, Department of Finance;

• Emee I. Macabales, Director III, Department of Finance;

• Mark David T. Ablang, Director IV, Department of Finance. — Arjay L. Balinbin

Cayetano: UN High Commissioner Zeid ‘being used’ to destabilize gov’t

The Philippines’ top diplomat on Friday said United Nations (UN) High Commissioner for Human Rights Zeid Ra’ad Al Hussein is being used to destabilize the Philippine Government.

“The High Commissioner may not be aware of it but he is being used in a well-orchestrated effort to destabilize a legitimate government that is being undertaken by parties with self-serving agendas and who stand to benefit the most by unseating President (Rodrigo R.) Duterte,” said Foreign Affairs (DFA) Secretary Alan Peter S. Cayetano.

Mr. Al Hussein, according to a Reuters report, said that Mr. Duterte’s slurs against UN human rights activists suggest he needs a psychiatric evaluation.

President Duterte’s administration, the report likewise said, has sought to get a UN human rights investigator, a former solon, and four former Catholic priests declared as “terrorists”.

In response to Mr. Duterte’s move, the UN High Commissioner said: “These attacks cannot go unanswered, the UN Human Rights Council must take a position.”

“He needs to submit himself to some sort of psychiatric examination. This kind of comment is unacceptable, unacceptable,” Mr. Al Hussein added.

Mr. Cayetano scored Mr. Al Hussein for his comments, saying that the “[t]he Philippines takes grave exception to the irresponsible and disrespectful comments of the United Nations High Commissioner for Human Rights that cast untoward aspersions regarding the President of the Republic of the Philippines.”

“This action of High Commissioner Zeid Ra’ad Al Hussein is completely uncalled for and demeans not only the Head of State of a Member-State, but tarnishes the reputation of the Office of the High Commissioner.”

The diplomat also said the world actually needs more Dutertes — leaders with empathy; leaders who listen to their people; and leaders who are ready to sacrifice their lives to protect their people.

Noting that Mr. Duterte’s government is concerned over Mr. Al Hussein’s comments, the Philippine diplomat warned that this “could set a dangerous precedent that the Council would have to immediately address as otherwise member-states could also fall victim to those who seek to politicize and weaponize human rights to undermine legitimate governments.”

“The comments of the High Commissioner bring great dishonor to the Human Rights Council and its noble endeavors. There is no reason whatsoever for such an unmeasured outburst directed against President Rodrigo Roa Duterte and it should not be repeated,” Mr. Cayetano stressed.

The Foreign Affairs Secretary also explained the inclusion of Victoria Tauli-Corpuz, the UN Special Rapporteur on the Rights of Indigenous Peoples, in the petition filed by the Department of Justice (DoJ) against the Communist Party of the Philippines (CPP)- New People’s Army (NPA).

“Contrary to the impression of the High Commissioner, Ms. Victoria Tauli-Corpuz was included in the list not because of her position as Special Rapporteur but because of her alleged links with the Ilocos-Cordillera Regional Committee (ICRC) of the CPP-NPA, which, if the High Commissioner is not aware of, is in the list of foreign terrorist organizations of both the United States and the European Union.”

“The High Commissioner may wish to know that the petition for proscription filed by the Department of Justice is a civil case that seeks to declare the CPP-NPA as a terrorist organization for its continuing terrorist activities in the Philippines. This action is in accordance with Republic Act 9372 or the Human Security Act of 2007 of the Philippines and is intended to protect the Filipino people. Ms. Tauli-Corpuz and the other individuals mentioned in the petition are there because of their membership in or association with the CPP-NPA as reported over the years by the Philippine National Police and the Armed Forces of the Philippines.” — Arjay L. Balinbin

Philippines hopes Kim-Trump summit will reduce Asia Pacific tensions

Great results can be expected from the meeting between United States (US) President Donald J. Trump and North Korea’s supreme leader Kim Jong-un, the Philippines said on Friday, March 9.

Messrs. Trump and Jung-on, according to reports, are expected to meet this May for negotiations over the issue of denuclearization of the Korean Peninsula.

“The Philippines welcomes the announcement of the acceptance by United States President Donald Trump of the invitation from Democratic People’s Republic of Korea leader Kim Jong-un for them to meet this May,” the Philippines’ top diplomat Alan Peter S. Cayetano said in a media statement.

“We join the rest of the international community in praying for a successful outcome of the meeting between the two leaders. This is a bold and unprecedented move that we hope would lead to reduced tensions in the Asia-Pacific Region,” he added.

Mr. Cayetano likewise noted that the meeting between the two leaders is “a bold move that could produce great results.”

The Philippine government, Mr. Cayetano said, is “encouraged by developments related to the inter-Korean dialogue initiative arising from the recent high-level visit of a delegation from the Republic of Korea to Pyongyang last Monday and Tuesday.”

“The Philippines hopes that this would lead to a tangible movement towards addressing the Korean Peninsula issue.”

Mr. Cayetano stressed that the Philippines is ready “to play a constructive role in contributing to peace and stability in the Korean Peninsula.” — Arjay L. Balinbin

Poe files bill streamlining kids’ adoption process

Senator Mary Grace Natividad S. Poe-Llamanzares announced on Friday that she has filed a bill that intends to streamline the adoption process in the country.

Once enacted, the proposed law would “give adoptive parents the opportunity to have the status of their adopted child or children regularized in law,” Ms. Llamanzares said in a statement.

She added: “It is also in the best interest of the parents and the children to have the records rectified for possible future uses such as medical or DNA purposes or for other legal matters.”

Ms. Llamanzares’ Senate Bill (SB) No. 1725 seeks to “allow the rectification of the simulated birth where the simulation was made for the best interest of the child and that such child has been consistently considered and treated by the person/s as his/her/their own.”

In her explanatory note, the lawmaker said the 1987 Philippine Constitution is “known for its social justice provisions as governing light.”

“The State shall promote social justice in all phases of national development, and the State values the dignity of every human person and guarantees full respect for human rights.”

The Senator argued that Republic Act No. 8552 (also known as the Domestic Adoption Act) “recognizes informal adoptions or more commonly known as simulated births.”

“While Section 21 (b) of the said Act penalizes any person who shall cause the fictitious registration of the birth of a child under the name(s) of a person(s) who is not his/her biological parent(s), it also provided for an amnesty for those who did so for the best interest of the child. However, this amnesty resulted in a lacuna in the law in that it only allowed the rectification of those who 1) did so before the effectivity of the law on 22 March 1998; and (2) filed a petition for adoption within five (5) years from the effectivity of the Act or until 22 March 2003,” she explained.

Hence, the formal adoption procedure in the country remains “tedious and excessively costly for ordinary Filipinos,” the senator said, adding, “This leaves a lot of adoptees under assumed filiation and unduly deprived of the benefits of legitimacy and succession.”

Ms. Llamanzares’ SB No. 1725 states that “a petition for the rectification of a simulated birth record should be filed within 10 years from the effectivity of the measure.”

Also, “instead of going through the courts, those who will file a petition may do so through the Social Welfare and Development Officer of the city or municipality where the child resides. The Secretary of the Department of Social Welfare and Development shall decide on the petition within 30 days from receipt of the recommendation of the department’s regional director.” — Arjay L. Balinbin

Trade gap continues to widen as imports outpace exports in January

THE Philippines’ trade deficit continued to widen in January with imports rising by double-digits amid flat exports growth.

Preliminary data released yesterday by the Philippine Statistics Authority (PSA) showed the January trade deficit reached $3.317 billion, expanding from $2.469 billion posted in the same period last year. This was also close to the $3.84 billion deficit posted in December.

Merchandise export receipts during the month was $5.219 billion, 0.5% more than the $5.191 billion recorded in January 2017.

Meanwhile, the country’s import bill continued to grow at double-digits at 11.4% to $8.536 billion in January from last year’s $7.660 billion.

These brought total trade to $13.754 billion, 7% higher compared to $12.851 billion on a year-on-year basis.

In a statement released by the National Economic and Development Authority (NEDA), the flat export growth was attributed to the “sluggish non-electronic and agro-based commodity sales” that was said to be its slowest since 2.3% in December 2016.

For Angelo B. Taningco, economist at Security Bank Corp., the export slowdown “may be attributed to a high base, especially since January 2017 recorded strong export growth.”

Michael L. Ricafort, Rizal Commercial Banking Corp. economist, was of the same view: “[The] higher prices of oil and other major global commodities and weaker peso exchange rate partly caused the year-on-year widening of the trade deficit, as well as the faster economic activities in the latter part of 2017 that required greater importation such as for capital equipment, raw materials, finished goods.”

Mr. Ricafort likewise noted that on a month-on-month basis, January’s trade deficit was narrower than the record-high $3.8 billion trade deficit in December 2017 that may be attributed to the increased import activities in December just when higher prices under the first package of the TRAIN (Tax Reform for Acceleration and Inclusion) law would take effect.

University of Asia and the Pacific (UA&P) economist Peter Lee U noted that January is “not a particular month for exports.”

“However, even as exports’ numbers were due to base effect, the quantities are still there,” he noted.

On the import side, double-digit increases were seen in six sectors, namely, industrial machinery and equipment (26%); iron and steel (25%); cereals and cereal preparations (22.9%); electronic products (18.9%); telecommunication equipment and electrical machinery (13.5%); and “miscellaneous” manufactured articles (11.4%).

By major types of goods, growth in imports of capital goods was 16.9% to $2.728 billion. Imports of raw materials and intermediate goods ($3.488 billion) and consumer goods ($1.364 billion) was higher by 14.9% and 8.1%, respectively.

On the export side, sales of “cathodes and sections of cathodes, of refined copper,” were valued at $85.24 million, significantly higher than the low base of $1.99 million or around a 4183.42% growth. Other sectors that posted robust export sales were gold (358.7%), machinery and transport equipment (23.6%); metal components (18.9%); and electronic equipment and parts (18.3%).

By major type of goods, exports of manufactured goods were 4.4% lower in January compared to the same period a year ago with a value of $4.344 billion. Exports of agro-based products were also down by 11.2% ($351.345 million). Bucking the trend were increases seen in mineral products (235.8% to $352.401 million); petroleum products (147.7% to $28.690 million); re-exports (557% to $56.789 million); and forest products (83.2% to $17.890 million).

For UA&P’s Mr. U, the double-digit growth in imports and exports of electronic products are “comforting.”

“Imported electronic products are usually re-assembled and tested here. This is an advance indicator that electronic exports will continue to grow, as electronics remain a large part of our exports and the economy,” he said.

On the composition of imports, Mr. U said that most of these are capital and intermediate goods or those needed for manufacturing production, which is a “good sign.”

Department of Trade and Industry Secretary Ramon M. Lopez concurred: “It’s a good sign that our manufacturing sector is continuously recovering…,” he told reporters on the sidelines of a press conference in Quezon City yesterday.

“It really has to be quality imports. This does not pertain to consumption but capital goods,” he reiterated.

The Trade Secretary likewise said that having a trade deficit is normal, but underscored the need for higher manufacturing capacity.

“Over the past decades, our country has been not prepared for a multi-production capacity, due to structural issues.For this reason, we usually import to address consumption needs rather than manufacture. Therefore, the country really needs to build production capacity, and address that structural problem,” he said.

“Higher production capacity should really be the one driving exports in the future. This way, a sustainable trade surplus is achieved.”

Looking forward, economists expect exports to grow this year but the trade deficit will continue to persist.

“With the global economy still set for a higher growth trajectory in 2018, the Philippines is off to a good start. However, it is essential for the national government to continue on its initiatives to support exports growth,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in the NEDA statement as saying.

The government targets exports and imports to grow by 8% and 9%, respectively, this year. Mr. Pernia, who also sits as NEDA’s director-general, said that the growth in exports will be “supported by a revival of the agribusiness sector.”

“To achieve this, the Philippines needs to build up integrated industries that would generate higher value addition, especially for key products such as bananas, cacao, coffee, mangoes, and rubber as well as for other emerging high value crops,” he said.

For Security Bank’s Mr. Taningco, imports will outpace exports this year with the trade deficit to reach as high as $32 million compared to the $29.6 billion in 2017.

“Import growth will be supported by government’s infrastructure spending program and lower inflation abroad [while] export growth will be reinforced by local manufacturing production and buoyant global economy exerting strong external demand for locally-made manufactured items,” he said. — Carmina Angelica V. Olano with inputs from Arra B. Francia

Economy on track to grow by at least 7% this year

By Melissa Luz T. Lopez, Senior Reporter

DAVAO CITY — The Philippines is on track to achieve at least seven percent growth this year, with the tax reform providing “fiscal firepower” to support infrastructure spending and boost investments, economic officials said.

Finance Secretary Carlos G. Dominguez III said the economy has enough room to further boost public spending and attract more investments, which will fuel faster growth in gross domestic product (GDP).

“This year, with a fortuitous convergence of trends, we fully expect to grow our economy at seven percent or better. The infrastructure program will provide the strong stimulus for growth. With substantial investment inflows, we aim to make our economic development investments-led,” Mr. Dominguez said during the Philippine Economic Briefing held at the SMX Convention Center in SM City Lanang Premier on Friday.

Philippine GDP expanded by 6.7% last year, slower than 2016’s 6.9% but still within the government’s 6.5-7.5% target range. The Duterte administration is targeting annual growth to log between 7-8% this year until 2022.

Mr. Dominguez said the P8-trillion infrastructure program under the state’s “Build, Build, Build” initiative will provide the necessary support for rapid expansion.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Maria Almasara Cyd Tuaño-Amador pointed out that the Tax Reform for Acceleration and Inclusion (TRAIN) law has provided “fiscal firepower” for the Executive to pursue its ambitious spending targets.

The government expects to collect an additional P82.3 billion from the TRAIN, which imposed additional taxes on fuel, cars, coal, sugar-sweetened drinks and a host of other items starting Jan. 1.

These new revenues will help fund plans to spend between P8-9 trillion priority infrastructure, which involve at least 75 big-ticket projects nationwide.

FOCUS ON MINDANAO
The Duterte administration is especially focusing on Mindanao for development, with five priority projects located in this region.

“The island is the focal point of major infrastructure projects that will enhance economic production, open new irrigated lands for our agriculture and make the movement of goods and people easier,” Mr. Dominguez said as he led the Davao leg of Asian Development Bank (ADB) meetings.

The Philippines is the host of this year’s ADB annual meetings, which will culminate on May 3-6 in Mandaluyong City.

The government is relying on funding aid from the ADB for several projects, including the $380-million loan to improve around 280 kilometers (km) of national roads and bridges in Zamboanga and Tawi-Tawi, and the $70-million Davao Public Transport Modernization Project.

The loan deal for road repairs was signed in January, while public transport reforms for Davao are currently at the design stage, said ADB country director Kelly Bird.

Other projects set for rollout are the P5.4-billion Malitubog-Maridagao Irrigation Phase 2 in North Cotabato and Maguindanao; the P4.86-billion Panguil Bay Bridge; and the expansion and improvement of the airports in Davao and Laguindingan worth P40.57 billion and P14.6 billion, respectively.

Meanwhile, the first phase of the P35.26 billion Mindanao Railway Project which will connect Davao City, Tagum and Digos will break ground within the third quarter, according to the Transportation department.

SPENDING SUSTAINED
Rolando U. Toledo, director at the Department of Budget and Management (DBM), added that bigger disbursements will boost investments and overall GDP growth.

“The passage of the TRAIN law and the 3% deficit target will allow us to spend more over the medium term,” Mr. Toledo said. “This reign of government spending will sustain the growth momentum with the GDP expanding by 7-8% over the medium term.

This budgetary strategy is sound, appropriate and sustainable.”

For 2018 alone, the DBM has earmarked P1.1 trillion for public infrastructure, equivalent to 6.1% of GDP and accounts for nearly a third of the P3.767-trillion spending plan.

Government spending picked up by 11% to P2.824 trillion in 2017 but missed the P2.909-trillion spending target, according to Treasury data. Infrastructure spending totalled P568.8 billion last year, jumping by 15.4% from the P493 billion released in 2016 and surpassing the P549.4 billion target under the 2017 budget.

Meralco bills to go up in March

MANILA Electric Co. (Meralco) is raising its rates this month, but the country’s largest distribution utility said only P0.85 out of the P0.97-per-kilowatt-hour (kWh) increase will be implemented “to cushion the impact of higher electricity rates on consumers.”

In a statement, Meralco said this brings the overall rate to P10.32 per kWh in March, from February’s P9.47 per kWh.

With this, households consuming 200 kWh a month will see a P170 increase in their monthly bills. Households that consume 300 kWh, 400 kWh, and 500 kWh will see an increase of P255, P340 and P425, respectively, in March.

The remaining 12 centavo per kWh increase will be reflected on the April billing.

From P4.6548 per kWh in February, Meralco said the generation charge for March will be P5.2962 per kWh.

“Contributing to the generation charge increase were higher charges from the Wholesale Electricity Spot Market (WESM), which increased by P1.4441 per kWh, because of tighter supply conditions in Luzon,” the utility said.

“The demand for power in the grid grew by around 366 MW in February due to warmer temperatures, while around 1,000 MW of generating capacity went on scheduled maintenance outage,” it added.

The share of WESM purchases to Meralco’s total requirement this month stood at 19%.

Accounting for 35% of the total, cost of power from Independent Power Producers rose by P0.2814 per kWh due to the annual scheduled maintenance outage of Quezon Power for February, as well as the continued depreciation of the peso.

Meralco said charges from plants under Power Supply Agreements went down by P0.3634 per kWh due to improved average plant dispatch. This accounted for 46% of Meralco’s total energy requirement.

Transmission charge to residential customers went up by P0.0503 per kWh due to an increase in ancillary service charges by the National Grid Corporation of the Philippines.

Taxes and other charges went up by P0.1583 per kWh this month.

“Meralco’s distribution, supply, and metering charges, meanwhile, have remained unchanged for 32 months, after these registered reductions in July 2015,” the company added.

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 interest in BusinessWorld through the Philippine Star Group, which it controls. — Janina C. Lim

Unsolicited proposal submitted for Davao, new Bohol airports

CHElSEA Logistics Holdings Corp. (CLC) has submitted to the Department of Transportation (DOTr) an unsolicited Public-Private Partnership (PPP) proposal to develop the Davao and New Bohol (Panglao) International airports.

In a disclosure to the stock exchange on Friday, CLC reported that the proposal — which was submitted to the DOTr on Feb. 5 — is for a 30-year concession covering the development, operation, and management of the areas in the two airports that are not within the Civil Aviation Authority of the Philippines’ control.

“We will modernize both Davao and Panglao international airports into world-class airports without government subsidy by implementing the development in three phases with an estimated total project cost of P67 billion,” CLC President & CEO Chryss Alfonsus Damuy was quoted as saying in a press release.

“However, for economical viability of the project, the succeeding works after the development of Phase 1 shall be subject to the traffic growth requirements and compliance with the minimum performance standards,” he added.

If proposal gains government approval by this year, “improvement of passenger experience and benefit to the community will start next year,” Mr. Damuy said.

CLC is anticipating airport traffic to grow to 8 million to 15 million passengers in Davao, and 1.5 million to 2.1 million passengers in the New Bohol International Airport in Panglao by 2050.

With the construction of a new full parallel taxiway, the Davao International Airport is expected to be able to accommodate 30 hourly aircraft movements. By the end of the 30-year concession period, the airport’s cargo terminal is expected to have three times its current capacity. Meanwhile, that of the new Bohol airport is expected to expand by 25%.

The two airports are among the five regional airports that were originally bundled for a PPP project during the Aquino administration, but not followed through since the Duterte administration came into power.

CLC will be contending with Aboitiz Equity Ventures for the New Bohol International Airport, with the latter having submitted a P148-billion proposal to develop, operate, and manage four regional airports, Bohol’s being one of them.

“We ensure that every project we undertake is aligned with our goal to be the preferred end-to-end supply chain logistics service provider in the country, and which will as a result, generate more value for our stakeholders and improved outcomes for Filipinos,” Mr. Damuy said in the release.

CLC’s net profit for 2017 grew by 17.5% growth to P161 million year on year following numerous acquisitions in ships and businesses that boosted its revenues.

Shares in CLC gained P0.470 or 6.28% to close at P7.95 each at the stock exchange on Friday. — Anna Gabriela A. Mogato

Aboitiz Equity earnings dip

ABOITIZ Equity Ventures, Inc. (AEV) saw its earnings dip in 2017, after incurring higher losses from the operations and refinancing of costs for its power business.

In a disclosure to the stock exchange on Friday, AEV said net income last year stood at P21.6 billion, 4% lower than the P22.5 billion it generated in 2016. The company attributed the decrease to non-recurring losses for the period, which swelled to P2.3 billion against 2016’s P347 million.

Excluding these one-off losses, AEV’s earnings would have increased by 5% to P23.9 billion.

“While we faced challenges that tested the resilience of our portfolio, these results still showed the underlying strength of our core operating businesses, prompting our optimism on the long-term fundamentals of our businesses,” AEV President and Chief Executive Officer Erramon I. Aboitiz said in a statement.

AEV’s power business remained to be the top contributor among its business, accounting for 69% of 2017 income. The banking and financial services segment followed with a share of 18%, food at 7%, while the remaining 6% is equally split between land and infrastructure.

Aboitiz Power Corp. (APC) generated a net income of P20.4 billion, 2% higher year-on-year, pushing its contribution to the parent to P15.7 billion.

The company recorded P2.9 billion in non-recurring losses for the period, due to the impairment and refinancing costs concerning Aseagas Corp., its renewable energy firm operating a Batangas plant, as well as GNPower Mariveles Coal Plant Ltd. Co. APC however managed to offset the losses through a recently acquired loan.

AEV’s banking unit through the Union Bank of the Philippines meanwhile penciled in a 17% profit decrease to P8.4 billion, following the absence of one-off trading gains. Core profit jumped 31% to P8.2 billion.

The higher cost of raw materials meanwhile pulled down the net income of AEV’s food business, which includes Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International, Pte. Ltd. The group’s net income slowed 2% to P1.7 billion in 2017.

On the other hand, the expansion of the export segment for the food business boosted Pilmico International’s earning to P98 million, significantly higher than the P7 million its posted in 2016.

Earnings of Aboitiz Land, Inc. also surged last year, jumping 295% to P744.2 million.

“The significant increase was due to exceptional business performance of its units and recognized fair valuation gains on investment properties,” the company said.

Softer cement prices continued to weigh on the performance of Republic Cement and Building Materials, Inc., with the company’s contribution to AEV’s income falling by 57% to P671 million. The company noted that while demand for cement grew slightly in 2017, lower prices and higher fuel and power costs failed to push a positive performance for the segment.

The Aboitiz group remains optimistic that its infrastructure business will recover given the government’s drive for more infrastructure projects.

“For Aboitiz, advancing business and communities continues through both ongoing and new initiatives. This year, we look forward to supporting the government’s ‘Build, Build, Build’ program through our infrastructure initiatives that aim to drive economic progress and improve the quality of life of our fellow Filipinos,” Mr. Aboitiz said.

Shares in AEV gained P1.05 or 1.43% to close at P74.30 each at the stock exchange on Friday. — Arra B. Francia

DMCI net income up 16%

EARNINGS of DMCI Holdings, Inc. climbed last year, buoyed by the double-digit growth of the coal energy, real estate and construction segments, as well as the recovery of the nickel mining business.

In a disclosure to the stock exchange on Friday, the Consunji-led firm reported 16% growth in net income attributable to shareholders to P14.8 billion last year from P12.7 billion in 2016 following the restatement of earnings from the housing business.

DMCI Homes restated the 2016 results to reflect the shift in accounting policy from the completed-contract method to the percentage-of-completion method in order to align with current accounting practice in the real estate industry.

Core net income rose at a faster pace of 17% to P14.8 billion from P12.6 billion without the one-time gain of P111 million from the sale of a 10% stake in Subic Water and Sewerage Company.

In the fourth quarter, DMCI Holdings grew its profits by 9% to P3.1 billion from P2.8 billion.

Revenues went up 18% year-on-year to P81 billion from P68 billion.

In a statement, DMCI Holdings Chairman and President Isidro A. Consunji was quoted as saying that “2017 was a challenging year for us but we were able to meet our earnings target of double-digit growth.”

Anchoring the earnings expansion was the strong performance of Semirara Mining and Power Corp., which saw its net profits improve by 15% to P8 billion from P6.9 billion on the back of 20% growth in average coal prices and a 21% jump in gross electric output.

Record real estate sales allowed DMCI Project Developers, Inc. — operating under the DMCI Homes brand — to grow its earnings by nearly half to P3.6 billion from the restated P2.4 billion a year ago.

Construction arm D.M. Consunji, Inc. booked an 11% rise in income to over P1 billion from P938 million due to lower operating costs, favorable settlement of pending claims, and earlier-than-expected completion of some minor projects.

The turnaround of its mining business also pushed the holding firm’s income despite the regulatory uncertainty. DMCI Mining Corp. swung to a net profit of P113 million from a net loss of P65 million following a drop in operating costs and the shipment of 525,000 wet metric tons of nickel ore from its old inventory.

Off-grid energy business DMCI Power Corp. suffered a 15% drop in earnings to P359 million from P424 million primarily due to the expiration of its income tax holiday for its Masbate operations.

Affiliate Maynilad Water Services, Inc. registered a 12% decline in income to P1.6 billion from P1.9 billion because of the delayed implementation of its tariff adjustment coupled with a one-time gain last year from the re-measurement of its deferred tax liability.

In terms of income contribution, Semirara accounted for 54%, DMCI Homes contributed 24%, and Maynilad added 11%. The balance was contributed by the off-grid power, construction, and mining units.

“For 2018, our financial performance will likely be more modest because of tapering electricity rates and the unresolved issues in our nickel mining and water businesses. But we see strong growth from our coal production and real estate segments,” Mr. Consunji said.

Shares in DMCI fell six centavos or 0.45% to close at P13.22 apiece on Friday. — Krista Angela M. Montealegre

DTI open to lowering capital threshold for foreign retail business owners

THE DEPARTMENT of Trade and Industry is open to lowering the paid-up capital threshold for foreigners to own retail businesses in the country to $500,000 at most, the agency’s chief said.

Trade Secretary Ramon M. Lopez noted that although the agency initially submitted a $200,00 cap proposal, which is in line with the suggestion of the country’s top economic managers and favorable to foreign chambers, he noted that a lawmaker has proposed a “middle ground” at $500,000.

Asked if he would consider this proposal, Mr. Lopez told reporters on Friday: “We’ll look into that.”

“At least it’s a lot lower than the $2.5 [million]. Protected pa rin with that amount, yung talagang small pero you allow na the medium to come in,” he added.

The Retail Trade Liberalization Act of 2000 requires a minimum paid-up capital of $2.5 million for a 100% foreign ownership of a retail business, a stake which will only be valid in the first two years. The maximum stake will be at 60%, thereafter. Meanwhile, two-folds of that or a $7.5 million capital can be wholly-owned by a foreigner without the restriction of a validity period.

Mr. Lope said the entry of more players may boost the market of local enterprises.

“Kung mas maraming independent medium and up size na foreign brands, I can imagine na we could also probably put in…the possibilty na mas maraming supplyan si micro SME,” he said.

“Ngayon kasi si micro SME will only have to talk to the limited big retailers only. Pero kapag marami na yang medium na foreign brand, kapag sourced locally yan, mas marami nang pwede bentahan ang micro SMEs.”

Meanwhile, the Board of Investments (BoI) offered a different solution to striking a balance between protecting micro and small retailers and liberalization, proposing to scrap the paid-up capital threshold for foreigners to own retail businesses here and instead apply the minimum requirement to each store that will be built by an enterprise.

“The $200 million is one of the requirements for pre-qualification so that’s not the money you’ll have to infuse…,” Marjorie Ramos-Samaniego, director of the BoI’s Legal and Compliance Service Division, told reporters on the sidelines of the Euro-PH Advocacy Fora held Friday at the Makati Shangri-la Hotel.

Under the law, foreign enterprises, wholly owned or with a majority ownership, may break up their stores in such a way that each branch has a paid-up capital of at least $830,000.

“If you have $830,000, you have four stores. So you can see how burdensome. You have the $2.5 million, you just come up with four stores which makes $830,000,” Ms. Ramos-Samaniego added.

The BoI said applying the country’s top economic team’s suggestion of a $200,000 paid-up capital is “ still too small” if applied to the proposed scheme.

As such, the agency will conduct a stakeholder consultation with the Philippine Retail Association in determining the suitable threshold that will be applied for each branch to be put up.

“Because to a certain extent, there still should be a safeguard measure,” the official added, noting that the BoI prioritizes protecting the micro and small scale enterprises while seeing the medium enterprise capable of standing on its own.

The regulator’s position stands in stark contrast with that proposed in Senator Sherwin T. Gatchalian’s Senate Bill No. 1639 in which terms on the threshold, including pre-qualifiers such as the minimum net worth of parent corporations, are totally removed.

“What we aim to do is simplify [the process] para pumasok and foreign investors at dumami,” Mr. Gatchalian told reporters on Friday.

Mr. Gatchalian said he does not see the move as posing a threat to “mom and pop” stores. — JCL

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