How PSEi member stocks performed — February 15, 2018
Here’s a quick glance at how PSEi stocks fared on Thursday, February 15, 2018.
‘Third player’ may prefer to await bill liberalizing public services
By Camille A. Aguinaldo
SENATOR Sherwin T. Gatchalian wants the telecommunications industry’s new entrant, the so-called “third player,” to enter the market after the passage of a bill which would liberalize industries providing public services.
“On the third player, I’m sure he’s conducting due diligence. If he hears this, he might as well wait for the amendment of the public services act so he could enter the market quickly and he can majority-own the company,” he told BusinessWorld on Thursday.
“It is to the advantage of the new player to wait for this act to be approved,” he added.
Mr. Gatchalian said he expects the proposed measure to become law before Congress goes on break by March, noting its inclusion in the Legislative-Executive Development Authority Council’s (LEDAC) priority bills.
The senator’s remarks were made on the same day the Department of Information and Communications Technology (DICT) moved the deadline for selecting the “third player” to May 18.
The Senate committee on public services and on economy last week tackled Senate bill Nos. 695, 1261, 1441 and 1594, which proposed amendments to the 81-year-old Public Services Act or Commonweath Act. No. 146.
Mr. Gatchalian, who chairs the committee on economy, said the proposed measure will clearly provide a definition of public utilities and public services, which have been used interchangeably over the years and have caused confusion on whether certain sectors are subjected to foreign equity restrictions.
The Constitution limits the operation of a public utility to companies whose ownership is at least 60% Filipino-owned. Meanwhile, the Public Service Act does not define a public service or public utility and included only a list.
If the law is passed, Mr. Gatchalian said public service providers, such as airlines and telecommunications, will be open to foreign investment. Only electric power distribution and transmission, water pipeline distribution and sewerage pipeline system will be restricted.
“With public services, it’s basically liberalizing the industries. To give you a specific example, telecoms will now be considered public services so it would not be subjected to the 60-40 limitation. It will be open to the 100% foreign ownership,” Mr. Gatchalian said.
He added that the application for franchises will be easier since companies will no longer require approval from Congress.
Mr. Gatchalian said the proposed measure would increase competition, lower prices, and improve services. It would also attract foreign investors since they would be given control over companies.
“That’s what we want for the (third telco player): to be no longer hassled when it enters the country. This has always been the complaint of foreign investors that our system is too bureaucratic,” he said.
Transport dep’t evaluation of NAIA rehab proposal may take 2 months
THE Department of Transportation (DoTr) said it will take two months to evaluate a P350-billion proposal by a consortium of conglomerates to rehabilitate Ninoy Aquino International Airport (NAIA).
Undersecretary for Aviation Manuel Antonio L. Tamayo said that the agency will evaluate the proposal, but the Manila International Airport Authority (MIAA) will also need to come up with its own recommendation.
“About two months,” Mr. Tamayo told reporters on Feb. 15 on the sidelines of an event when asked about the timeline for evaluating the proposal.
The “super consortium” of conglomerates Aboitiz Infra Capital, Inc., AC Infrastructure Holdings Corp., Alliance Global Group, Inc., AEDC, Filinvest Development Corp., JG Summit Holdings, Inc. and Metro Pacific Investment Corp., submitted to the government on Feb. 13 a proposal for the rehabilitation of NAIA to turn it into a regional hub.
The P350-billion project involves the improvement and expansion of the current NAIA terminals under the first phase, and the building of a second runway in the second phase, which will raise the airport’s capacity to 100 million passengers per year.
The consortium has tapped Changi Airports International Pte. Ltd. to provide technical support in the areas of master planning, operations optimization and commercial development.
The DoTr has to give the proponents original proponent status (OPS) before the offer can be evaluated by the National Economic and Development Authority (NEDA) Board. — Patrizia Paola C. Marcelo
General gov’t debt rises to 36.4% of GDP at mid-2017
GENERAL GOVERNMENT (GG) debt as share of the economy inched higher at the end of June 2017, the Finance department said yesterday.
The Department of Finance reported that the general government debt-to-gross domestic product (GDP) ratio slightly rose to 36.4% as of end-June 2017 from 35.3% a year earlier.
GG debt consolidates the outstanding debt of the national government (NG), local government units (LGUs), the Central Bank Board of Liquidators and social security institutions (SSIs), less that held by the Bond Sinking Fund (BSF).
According to the report, the debt share rose as “the debt ratios reflected the increase in programmed borrowings” since NG expenditures picked up last year resulting in a higher deficit.
NG debt, net of BSF, rose to P5.8 trillion, up 10.3% from a year earlier.
“Because the BSF can only invest in government securities, and these holdings are considered intra-sectoral and netted from total outstanding NG debt, the decline in BSF holdings, combined with peso depreciation, led to higher outstanding NG debt for the period,” the report added.
Debt owed to domestic creditors was P3.331 trillion at the end of last year’s second quarter, representing 61% of the total. Foreign borrowing, on the other hand, amounted to P2.166 trillion.
The national government intends to maintain an 80:20 financing mix, in favor of domestic lenders.
LGU debt climbed 9.2% to P85.8 billion in end-June from the P78.6 billion recorded in the same period in 2016.
Holdings of government securities by social security institutions reclined by P59.7 billion, far outweighing LGU loans held by the Municipal Development Fund Office, which rose by P3.5 billion. — Karl Angelo N. Vidal
Senate panel maintains ERC needs to conduct open hearings
THE Senate committee on energy has maintained its stance that deliberations at the Energy Regulatory Commission (ERC) be opened to the public to ensure transparency on the positions taken by its members on contentious issues.
“Here at the Senate, the deliberations are open. You can see which senator has taken what position or argument,” Senator Sherwin T. Gatchalian, the committee chairman, said in an interview.
“We’re open here. So the same principles (should apply to the ERC),” he added.
Mr. Gatchalian made the comments in view of the ERC’s preference to maintain confidentiality on some aspects of its deliberations before coming up with a decision on applications that seek the commission’s action.
In his proposed legislation, Senate Bill No. 1490 entitled “An Act Enhancing the Governance Structure of the Energy Regulatory Commission,” the senator called for an “open meeting” where the public may participate.
“So the same principles — so that we will inform the public of our arguments, we will enlighten the public and the public also will be guided accordingly,” Mr. Gatchalian said.
In its comments and position on the Senate bill, the ERC cited the “deliberative process privilege” invoked by the Supreme Court: “Broadcasting such discussions to the public would have a chilling effect on those who take part in it. One would be careful not to take unpopular positions or make comments that border on the ridiculous, which often is a way of seeing issues in a different perspective.”
Mr. Gatchalian said after last week’s hearing on his bill, a technical working group would go over the points raised by the invited resource persons, which included the ERC and industry stakeholders.
“There’s a need to really be specific in the roles of the chairman, the roles of the executive director, the roles of the commissioners because this is where difficulties in interpretation have emerged,” he said.
He said the “problem with interpretation” caused the squabbles at the ERC in the past, which also gave rise to a “power play” that delayed the issuance of crucial decisions. “We consumers are on the losing end,” he said. — Victor V. Saulon
Senate to hold inquiry on frigate procurement
By Camille A. Aguinaldo
THE SENATE opens its inquiry on Monday into the controversial P15.5-billion frigate procurement program for the Philippine Navy which allegedly involved Special Assistant to the President Christopher Lawrence T. Go.
The Senate committee on national defense and security chaired by Senator Gregorio B. Honasan II would determine through the investigation if the acquisition of the warships promoted the goals of the Armed Forces of the Philippines’ (AFP) modernization program and complied with pertinent laws.
Senator Antonio F. Trillanes IV, one of the lawmakers who called for the investigation last Jan. 17, said he expects the facts to be laid down first to clear out the speculations and allegations in the controversy.
“We need to know what really happened in this frigate deal. Did the Philippine Navy (want) what was bought for them? If not, why did that happen? What were the interventions? We need to present the facts on hand to remove the conjectures and speculations,” he said in a radio interview Sunday.
He added that the purpose of the inquiry concerned not only the Philippine Navy but also the other branches of service under the AFP.
“There are different information coming in about people in Malacañang intruding (in the AFP’s) modernization program,” the senator said in Filipino.
According to news reports, Mr. Go purportedly intervened in the Philippine Navy’s project and endorsed to Defense Secretary Delfin N. Lorenzana a supplier which will provide the Combat Management System (CMS) for the purchased warships.
Mr. Go, who also heads the Presidential Management Staff (PMS), has denied taking special interest in the frigate deal, saying that someone might be using his name.
In a statement Sunday, Presidential Spokesperson Harry L. Roque, Jr. said the Senate investigation on Monday is a “welcome opportunity” for Mr. Go to shed light on the issue.
“Expect Secretary Go to tell all, and as instructed by the President, he would likely demand for an open and transparent Senate inquiry to show that he — and the administration — has nothing to hide as he would squarely answer questions in full view of the public,” he said.
Mr. Trillanes, who was once a Navy officer, believed that Mr. Go did not act on his own when he allegedly approached Mr. Lorenzana on the frigate’s weapons system supplier.
“This is just a conjecture… Because to the people who know Bong Go, he’s purely a right-hand man. He is the executive assistant of Duterte. He will not strategize on his own. This is the allegation until it is cleared out in the hearing,” he said in a mix of Filipino and English.
The senator also wanted to know if the frigate deal was connected to the sacking of Philippine Navy Flag Officer-in-Command Vice Admiral Ronald Joseph S. Mercado last Dec. 18.
“At the very least, it remains a mystery why was he relieved. In the military, there has to be a major scandal or negligence as a reason why you are removed from office that way,” he said.
Mr. Lorenzana has said the sacked Navy chief lost his “trust and confidence” when he “jeopardized” the frigate deal.
Mr. Mercado’s successor, Vice Admiral Robert A. Empedrad, said earlier he would seek an executive session if senators probed the weapons system of the frigate deal.
Mr. Trillanes said Mr. Empedrad’s request may be granted, but other aspects of the hearing must be public, such as the procurement process of the warships.
For repatriated OFWs, anywhere but Middle East
IF OVERSEAS Filipino workers (OFWs) repatriated from Kuwait had it their way, the Middle East would not be among their destinations.
So went a statement to that effect by the Department of Foreign Affairs (DFA) on Saturday night, Feb. 17, amid efforts to repatriate OFWs in Kuwait.
“Many of them expressed their desire to seek employment opportunities in countries other than those in the Middle East,” DFA noted about the OFWs.
But the DFA also cited the need for a three-month extension of the Gulf state’s amnesty program for Filipinos illegally working there, as more than 8,000 OFWs have yet to be repatriated.
“At present, the Department of Foreign Affairs-Office of Migrant Workers Affairs (DFA-OMWA) and the Embassy [in Kuwait] are negotiating with the Kuwaiti government to extend the amnesty program for three months. The said program will allow OFWs who overstayed their work visas to leave the Gulf state without any fines or penalties,” DFA said in a media statement on Saturday night, Feb. 17.
The department added that the amnesty program “will allow OFWs without proper work documents to process the necessary papers for them to work legally in Kuwait.”
On Sunday, Feb. 18, 177 OFWs from Kuwait arrived in Manila following repatriation efforts by the DFA-OMWA and the Philippine Embassy in Kuwait.
The DFA said there are now a total of “1,700 repatriated OFWs since last week, and they are among the 10,000 overstaying OFWs in Kuwait.”
“Majority of these are household service workers who are grantees of the amnesty from the Kuwaiti government. The OFWs hail from different provinces in the Philippines, particularly from the Visayas and Mindanao, [and most of them] are victims of illegal recruitment,” DFA said. “Many of them were recruited through social media and entered Kuwait through other neighboring countries.”
Last week, Department of Labor and Employment (DoLE) Secretary Silvestre H. Bello III, on instructions by President Rodrigo R. Duterte, ordered a total ban on the deployment of OFWs to Kuwait amid the rising deaths and abuse of Filipinos in the Gulf state, including the case of Joanna Demafelis whose body was found in a freezer. Her remains arrived home on Friday.
The repatriated OFWs, according to the DFA, will be leaving for their home provinces after receiving P5,000 each in financial assistance from the government.
Undersecretary Bernard P. Olalia of DoLE’s Human Capital Development and Regional Operations said in a radio interview last week that the “Czech Republic, Japan, New Zealand, Germany, South Korea, Singapore, Europe and the US” are alternative work destinations for the displaced OFWs.
According to the Labor department, the guidelines on the deployment ban as released last week “covers all types of workers being deployed for the first time for overseas employment in Kuwait, without distinction as to skill, profession or type of work.”
“The ban exempts Balik-Manggagawa or the OFWs who are vacationing in the Philippines who will be returning to the same employer to finish their contracts, at the end of his/her vacation; and OFWs who are returning to Kuwait on a new contract with the same employer,” DoLE said in a statement.
The statement added: “Also, seafarers who will be transiting through or boarding in Kuwait to join their principals are not covered by the total ban.” — Arjay L. Balinbin
After Boracay: Siargao, Samal, Coron up for monitoring
ESTABLISHMENTS IN three island tourist destinations — Siargao and Samal in Mindanao, and Coron in Palawan — are at the top of the Department of Tourism’s (DoT) monitoring list as government starts cracking down on violators of environmental laws in Boracay.
“We will be monitoring all the resorts nationwide… we have regional directors of DoT to check every now and then,” Tourism Secretary Wanda T. Teo said at a press conference in Davao City last Friday, Feb. 16, for the launching of the Go South campaign.
Ms. Teo said there have been reports of establishments in Siargao, Samal, and Coron that are practicing improper sewage disposal, similar to the problem in Boracay.
“After Boracay, there’s Coron and Siargao,” she said.
The Department of Environment and Natural Resources (DENR) has started issuing on Feb. 14 Notices of Violation to 51 establishments in Boracay out of the 300 recommended for closure by DENR Secretary Roy A. Cimatu. The crackdown comes after President Rodrigo R. Duterte threatened to close the entire island to tourists if the matter is not addressed within six months.
Tourism Undersecretary Katherine de Castro, in the same press conference, said one of the first steps that will be taken is setting up a DoT office in Siargao, an island popular for surfing.
In Samal, officially named the Island Garden City of Samal, Ms. Teo said they will tap the private sector’s assistance in checking resorts and other establishments for compliance to environmental requirements.
“Beaches in Samal will learn that they have to take care kasi eventually they will be like Boracay if they will not take care of their environment. Magtulungan tayo (We have to help each other), with the government and the private sector,” Ms. Teo said.
Ms. Teo said the lessons from Boracay is “a bitter pill that people have to swallow.” — Maya M. Padillo
Teacher representatives renew call for pay increase in 2019
REPRESENTATIVES ANTONIO L. Tinio and France L. Castro of party-list ACT Teachers have reiterated demands for the immediate salary increase for all government employees in 2019 instead of 2022. The lawmakers, with the group All Government Employees (GE) Unity, are calling for a P16,000 starting salary for civilian personnel, P30,000 for entry-level public school teachers and nurses, and P31,000 for Instructor I in state universities and colleges (SUCs). “Our government employees can no longer wait for two more years. Salary increases for public schoolteachers and other government employees is urgently needed,” Mr. Tinio said in a press statement. He cited that the recent implementation of the TRAIN (Tax Reform for Acceleration and Inclusion) law has caused price spikes “which are unrelentingly hitting Filipinos now, especially the majority who are poor.” Ms. Castro said: “The doubling of the basic pay of military and uniformed personnel was swiftly enacted with the certification of urgency from the President and the joint resolution of Congress. Our civilian personnel deserve nothing less.” The party-list lawmakers announced plans to conduct a protest on Feb. 21 to call for the salary increases. — Minde Nyl R. dela Cruz
Marine battalion deployed against NPAs in Cagayan
AFTER BATTLING extremists in Mindanao, the Marine Battalion Landing Team 8 (MBLT8) will be fighting communist rebels in the Cagayan Valley region. The military’s Northern Luzon Command said the Marines arrived at Port Irene in Santa Ana, Cagayan on BRP Tarlac on Friday and will join Joint Task Force Tala in operations against the New People’s Army (NPA). The Marines will operate in seven Cagayan towns — Santa Ana, Gonzaga, Buguey, Camalanlugan, Santa Teresita, Lallo and Aparri. Lt. Gen. Emmanuel B. Salamat, Northern Luzon Command chief, said MBLT 8 will contribute to the military’s “effort of bringing a lasting peace and sustainable development in Northern Luzon.” The MBLT 8 was previously deployed to Jolo, Sulu and Tawi-Tawi, where the military has also been conducting operations against the Abu Sayyaf. — philstar.com
Fuel prices roll back in unusual weekend adjustment
OIL COMPANIES have rolled back over the weekend the prices of gasoline, diesel and kerosene, each by more than a peso per liter, two days ahead of the usual Tuesday price adjustment. Gasoline prices are down this week by P1.05 to 1.15 per liter (/L), diesel by P1.25 to 1.30/L and kerosene, by P1.20/L. Most of the companies implemented the price cut at 6 a.m. on Sunday. No advise was given on why they were cutting prices earlier than usual except to say that the price adjustments reflected the movement of prices in the international market. Phoenix Petroleum Philippines, Inc. was among the earliest to implement the price cut on Saturday, 6 a.m. Last Tuesday, the per liter prices of gasoline, diesel and kerosene were also slashed by P1.00, P1.30 and P0.85, respectively. The move followed consecutive price hikes since the start of the year. — Victor V. Saulon