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House gets DoF proposal to cut corporate tax

THE ADMINISTRATION of President Rodrigo R. Duterte submitted to the House of Representatives on Monday the second of up to five planned tax reform packages — seeking to cut the corporate income tax rate and remove fiscal perks of sectors that do not need them — as lawmakers returned from a month-long Christmas-New Year break, the Finance department announced on Tuesday.

“The Department of Finance (DoF) has formally submitted to the House of Representatives this week the second package of the Duterte administration’s Comprehensive Tax Reform Program that aims to reduce corporate income tax rates and modernize fiscal incentives to investors… as committed… by Secretary Carlos (G.) Dominguez III last year,” the DoF said in a press statement.

The Constitution requires tax laws to emanate from the House, although the Senate can hold parallel public hearings without formally approving such measures until after the House does so.

That was the case of the first package which the DoF submitted to both chambers in September 2016 and which was enacted as Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion, on Dec. 19 last year. Slashing personal income tax rates as well as simplifying donor’s and estate tax systems, while plugging projected foregone revenues by either hiking or adding taxes on fuel, cars, minerals, tobacco, some investment products and sugar-sweetened drinks among others, will yield estimated net collections of P89.9 billion in the first year of the law’s implementation.

Yesterday’s press release quoted Finance Undersecretary Karl Kendrick T. Chua as saying that the just-submitted second package, which DoF designed to be “revenue-neutral,” seeks to gradually cut the corporate income tax rate to 25% from 30% currently and to modernize fiscal incentives for businesses by making them “performance-based, targeted, time-bound and transparent.”

The DoF estimates that redundant investor perks have been costing the government more than P301 billion a year in terms of foregone revenues.

“… [I]n general, we are giving up almost 0.8% of GDP (gross domestic product) so far… from these income tax holidays and custom duty exemptions. Together with the VAT, it is P301 billion, or two percent of GDP,” Mr. Chua said, clarifying that “[t]hese are only the investment incentives” and “do not yet include exemptions from the payment of local business taxes and the estimates on tax leakages.”

Citing 2015 data, Mr. Chua said income tax holidays, special rates, custom duty and import value added tax (VAT) breaks made up 53.77 billion, 32.48 billion, P18.4 billion and P159.82 billion, respectively, of foregone revenues that year, “almost five percent of national government revenues and 0.78% of GDP.”

Central bank looking out for tax reform’s wider impact on inflation

THE BANGKO SENTRAL ng Pilipinas (BSP) may raise interest rates should tax reform trigger price increases for all other consumer goods and services as well as wage hike petitions that, in turn, could push inflation beyond target.

“For the BSP, our concern there is the secondary impact on inflation. We’ve always understood that it would have an impact on inflation in the short run, but we don’t expect it to last,” BSP Governor Nestor A. Espenilla, Jr. said yesterday at the Edsa Shangri-La Hotel.

“It will last if people begin to believe that inflation is going overboard… and we may need to react to that.”

Enacted as Republic Act No. 10963, the Tax Reform for Acceleration and Inclusion (TRAIN) reduces personal income tax rates and provided a simpler system for computing donor and estate taxes. Foregone revenues will be offset by the removal of some exemptions from value-added tax, alongside higher tax rates for fuel, cars, capital gains and new taxes for sugar-sweetened drinks, among others.

The BSP has said that it expects the new taxes to add “less than one percentage point” to overall inflation, hence, keeping overall price movements manageable.

Pressed further, Mr. Espenilla said TRAIN’s second-round impact which the central bank is looking out for would include increases in daily minimum wage, the cost of other products and services even if these are not directly hit by the additional excise taxes imposed starting this month.

“We are looking at the secondary effects and on the impact on expectations of people. When people try to ask for more wages because of taxes, that’s a secondary effect that we need to evaluate and analyze the impact,” Mr. Espenilla said in an interview.

“When people try to jack up prices everywhere in the system although they are not part of the direct hit of TRAIN… we have to evaluate that.”

Mr. Espenilla said the new tax law gives people a sense that the prices of all other commodities should be rising.

GENERALLY POSITIVE
Despite this, Mr. Espenilla sees the tax reform as “positive” for the Philippine economy as it would unlock more disposable incomes despite the pickup in the prices of consumer goods.

“The economy is expected to continue to grow strongly this year and consumption spending will remain strong,” he added.

Bank economists have been flagging the need for the central bank to raise rates in order to keep up with rising inflation and contain the build-up of risks in the financial system, as well as with rising global yields as the United States tightens its monetary policy further. Last year saw the Federal Reserve increase policy interest rates three times, and another three increases are expected in 2018.

Mr. Espenilla said Philippine monetary authorities will bare new inflation forecasts during their Feb. 8 policy meeting — their first this year — as they have incorporated TRAIN’s impact into their baseline forecasts.

The Monetary Board kept borrowing rates unchanged during its Dec. 14 review as it saw inflation settling within the 2-4% annual target until 2019. The BSP expects a 3.4% average inflation this year, coming from 3.2% in 2017.

“It will be an interesting policy meeting,” Mr. Espenilla said.

“That will give us a better handle as to whether we can continue our initial assessment that we don’t necessarily have to react to this because this is known as transitory and minimal.”

There appears to be a change in tack, following previous assertions by central bank officials that they have enough leeway to keep any tweak on policy interest rates on hold.

EXTERNAL RISKS
Mr. Espenilla also flagged potential risks from global developments that could take a toll on the Philippine economy.

Continuing uncertainty for the United States’ economy, potential instability in Europe amid the United Kingdom’s exit from the European Union, political tremors in the Middle East and tensions on the Korean peninsula could roil markets worldwide.

“We can get a curve ball from any of these issues,” Mr. Espenilla said, adding cybersecurity threats to potential market risks.

Still, the central bank chief said prospects remain “very good” for the Philippine economy this year amid indications that robust growth will continue with a fiscal deficit that’s under control and a strong banking system.

RESERVE STANDARDS
Mr. Espenilla said Philippine monetary authorities are carefully timing their plan to reduce the 20% reserve requirement ratio imposed on big banks, mindful that the financial system remains awash with cash despite some tightening in liquidity conditions in December.

“There’s the basic management of liquidity, and there’s also the desire to change the way we manage liquidity,” the central bank chief said.

“We want to substitute reserve requirements with open market instruments without necessarily increasing liquidity. The BSP is planning such a maneuver.”

Mr. Espenilla has said that he wants to see the reserve standard cut to single-digit levels to remove such “inefficiency” from the banking system, even as he said such an adjustment will be done gradually in order not to flood the market with cash and trigger imbalances in the economy. — Melissa Luz T. Lopez

Press freedom image takes a hit as Rappler faces uphill battle

By Krista A. M. Montealegre
National Correspondent

MULTIMEDIA news Web site Rappler, Inc. faces an uphill battle to challenge the Securities and Exchange Commission’s (SEC) decision to revoke its incorporation papers, a ruling that fed suspicions about the government’s hand in undermining press freedom.

“We have no problem. They should bring it to court if they want to. Kahit anong baliktad gawin (From any point of view), it was an admitted violation pa nga,” SEC Chairperson Teresita J. Herbosa said in an interview in Pasay City on Tuesday.

In a press briefing, Armando A. Pan, Jr., officer-in-charge of the Office of the Commission Secretary, said Rappler can undertake corrective measures to cure the “fraudulent” Philippine depositary receipts (PDR) with the SEC, but the Department of Justice (DoJ) can still pursue criminal charges against it.

The SEC, which has no quasi-judicial power, has endorsed its ruling to the DoJ “for appropriate action.”

“They can issue new PDRs. If they want to register they can, but the decision stands,” Mr. Pan said, noting that companies seeking to register their securities can amend their filings with the commission, but this is before an en banc decision has been made.

“The DoJ will start the proceedings…” he said.

For now, Rappler can continue its operations, as it has 15 days from Jan. 12 to file an appeal with the Commission on Appeals, Mr. Pan said.

The SEC, in a 29-page decision dated Jan. 11, ruled that Rappler and its parent Rappler Holdings Corp. (RHC) were “liable for violating the constitutional and statutory foreign equity restrictions in mass media,” resulting in the revocation of their incorporation papers.

At the center of the SEC ruling is Rappler’s sale of PDRs — securities that give holders the right to the delivery or sale of the underlying share without conferring ownership or control — to Omidyar Network Fund LLC, which contains a “repugnant” provision requiring Rappler to seek approval of PDR holders on corporate matters.

“These rights are reserved to the shareholders of a corporation. Ordinarily, PDR holders cannot do this, but when it comes to Omidyar PDR holders, these rights were given to them,” Mr. Pan said.

The SEC, in its ruling, declared “void” the PDRs issued to Omidyar Network, arguing that “control” is not limited to stock ownership alone but encompasses “other schemes that grant influence over corporate policy, actions and structure.”

Rappler has argued that PDR holders do not interfere in editorial matters.

While Rappler issued the securities to Omidyar in 2015, Mr. Pan said the SEC did not have access to the terms and conditions of the PDRs at that time because the multimedia news Web site asked for exemptive relief for the registration of the securities.

The SEC grants exemptive relief when securities are sold through a private placement or issued to less than 19 qualified institutional buyers, among others.

“That’s why we had to issue a subpoena so the documents will be made available to the special panel,” Mr. Pan said.

The Philippine Stock Exchange (PSE) has two listed PDRs: ABS-CBN Holdings Corp. and GMA Holdings, Inc. The mass media companies have issued PDRs to the public in the past to obtain foreign capital without violating the Constitution.

“The ABS-CBN (and) GMA PDRs were registered — unlike the Omidyar PDRs where a notice of exemption was filed — because they were offered to the public,” Mr. Pan said.

“I was told GMA and ABS-CBN PDRs do not contain those political rights.”

Investors appeared to have shrugged off the Rappler issue, with the bellwether PSE index (PSEi) hitting another intraday high on Tuesday.

“It shouldn’t affect (the investment community) as Rappler’s PDRs didn’t follow what listed companies do, i.e. no control is given to the investors. PDRs should be economic only,” Eduardo V. Francisco, president of BDO Capital and Investment Corp., said by phone.

Mr. Francisco, who has assisted several listed companies in issuing PDRs, said the SEC had a legal basis in its decision against Rappler.

“With Rappler, while the PDRs are not voting, there is exercise of control. Just to change the address you need the approval and you need to consult with the PDR holders,” Mr. Francisco said.

“It is not just economic right; there is control. It is not a true PDR in the spirit.”

The SEC decision against Rappler has marked the latest showdown between the press and the administration of President Rodrigo R. Duterte, who has slammed media for their critical coverage of his bloody war on the narcotics trade.

Presidential Spokesperson Harry L. Roque, Jr. yesterday said Mr. Duterte had not influenced the corporate regulator’s decision against Rappler and that the President had called him to ask why critics were pointing the finger at him.

“He did not like the fact that Rappler was saying this is a result of the President’s dislike of Rappler,” Mr. Roque said in a regular news briefing in Malacañan Palace.

“Of course not, he had nothing to do with this decision. He was not even aware there was a decision coming up.”

Responding to Rappler’s description of the decision as “pure and simple harassment,” SEC’s Mr. Pan said: “We never think about that — harassment.”

“We only assess governance and ownership structure of Rappler. As to claims of restraint of press freedom, hindi naman. We focused on the PDR issue, the security itself.”

Interestingly, Omidyar Network, owner of the PDRs in question, is a philanthropic investment firm founded by online auction firm e-bay founder Pierre Omidyar, who reportedly pledged to donate $100 million to fund investigative journalism and combat the spread of “fake news” online.

“Regardless of whether it’s political or legal in nature, I think it may, in general, have a negative impact on people’s perception of press freedom in the Philippines,” RCBC Capital Corp. President Jose Luis F. Gomez said in a mobile phone message. — with Reuters input

Phoenix Petroleum to form JV with Thailand’s Tipco Asphalt

PHOENIX Petroleum Philippines, Inc. is teaming up with a Thailand-based asphalt maker and a local company to distribute bitumen products in the country, as it seeks to take advantage of the government’s aggressive infrastructure program.

In a disclosure to the stock exchange on Tuesday, the company led by Davao-based businessman Dennis A. Uy said its board of directors approved the execution of a joint venture agreement with Tipco Asphalt Public Company, Limited, and Carlito B. Castrillo for PhilAsphalt Development Corp.

The joint venture company will market and distribute bitumen and bitumen-related products in the country. Refined bitumen is primarily used as asphalt cement for road construction.

Describing bitumen as one of the by-products of crude oil refining, Phoenix Petroleum said the deal effectively allows it to expand its portfolio of petroleum products.

“Phoenix’s strategic focus will be on creating growth and opportunities in highly attractive industries and markets that are complementary to its core fuel business and are underpinned by strong macroeconomic fundamentals,” the listed company said.

According to its Web site, Tipco Asphalt “manufactures and distributes asphalt products servicing road construction, maintenance and paving industries, essential for transportation.” It has manufacturing facilities and asphalt terminals in every region in Thailand, and operates a refinery in Kemaman, Malaysia.

After the execution of the joint venture deal, Phoenix Petroleum said the parties will apply for incorporation and registration of the joint venture company within 30 days.

The total authorized capital stock of the joint venture company is estimated at P275 million.

Phoenix Petroleum and Tipco Asphalt will each own 40% of the joint venture, with PhilAsphalt’s Mr. Castrillo will own 20%.

A precedent condition for the completion of the deal is the incorporation of PhilAsphalt in 30 days and the assignment of Mr. Castrillo’s shares to PhilAsphalt.

The new company will also lease a parcel of land from Calaca Industrial and Seaport Park for the construction of a terminal.

On Tuesday, shares in Phoenix slipped 0.49% to close at P12.28 each. — Victor V. Saulon

Banks seen to meet leverage standards

By Melissa Luz T. Lopez,
Senior Reporter

PHILIPPINE BANKS are broadly expected to meet minimum leverage standards set by the Bangko Sentral ng Pilipinas (BSP), its chief said, with lenders well-armed with capital buffers to maintain their sound positions.

On Monday, the central bank announced that it will implement the five-percent minimum leverage ratio covering universal and commercial banks by July, representing how much capital banks should have on hand to cover non-risk weighted assets.

The computation of the ratio includes subsidiary and quasi-banks owned by a big lender, which prevents excessive debt exposures which could trigger a funding crunch during times of financial stress.

“Today, the leverage ratio of practically all banks is well above five percent. There’s lot of room because the system is well-capitalized,” BSP Governor Nestor A. Espenilla, Jr. told reporters on Tuesday.

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

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

Once in place, the leverage ratio will boost capital buffers maintained by banks against potential risks, and will complement the 6% common equity Tier 1 ratio, the 7.5% Tier 1 ratio, and the 10% capital adequacy ratio (CAR).

The 5% standard is higher than the 3% minimum set under the international Basel 3 framework, like how the CAR is also above the 8% global standard.

“Generally, the approach of the BSP is we don’t set a standard if it’s not met at this time,” Mr. Espenilla said in explaining the timing of the new standard.

The liquidity coverage ratio (LCR) will also be implemented starting this year, another measure which will improve risk management among banks.

“The LCR is a powerful macroprudential tool. It requires banks to not just have capital but have enough assets in liquid form. That means it will lower the room for creating risk assets like loans,” Mr. Espenilla added.

The standard requires big banks to hold high-quality and easily convertible assets to cover its total net cash outflows for a 30-day period. Banks are expected to hold assets that will cover 90% of their monthly cash outflows this year, which will go up to 100% by 2019.

Both measures form part of the Basel 3 regime, which was crafted by international policy makers to improve risk management and prevent a repeat of the 2008 Global Financial Crisis. Excessive lending led to massive credit defaults, which then triggered the collapse of big banks and caused widespread recession worldwide.

Several economists have flagged overheating concerns for the Philippine economy as credit growth pushes at a double-digit pace, although central bank officials have said that this should not ring alarm bells just yet as lending has been diversified and productive.

BASIC ACCOUNTS
The central bank has also approved basic deposit accounts as a new banking product, which is expected to bring more Filipinos to use formal financial channels for their transactions.

Mr. Espenilla said the Monetary Board approved last week the creation of “no-frills” basic bank accounts, which will impose no maintaining balances and allow banks to accept new depositors with minimal documentary requirements.

Through this, anyone can open a basic account with a minimum deposit of P100. The account will be accessed for payments, remittances and fund transfers up to a maximum balance of P50,000 without being imposed reserve requirements.

This will complement the “branch-lite” units approved by the BSP in December, which allows lenders to set up dressed-down branches in town centers and even wet markets in order to bring their services closer to the public.

Both measures are expected to help improve financial inclusion, after a recent central bank survey showed that 571 towns and cities in the Philippines — about a third of the total — remain unbanked as of June 2017.

Getting more Filipinos aboard the banking channel also augurs well for the central bank’s goal of raising the share of electronic payments to 20% by 2020 by encouraging digital banking platforms.

Last Thursday, the Monetary Board officially recognized the Philippine Payments Management, Inc. as the industry-led management body for two automated clearing houses for digital transactions which are expected to go live this year.

The faster deployment and access to money is seen to spur increased economic activity, the central bank said.

GSIS looks to invest $800 million offshore

STATE PENSION FUND Government Service Insurance System (GSIS) wants to put $800 million in foreign-currency instruments to diversify its asset portfolio.

“$800 million is really for testing grounds in investment. It’s not too big… What we need is to understand the market globally, and we would like to look at our global fund managers how they handle,” GSIS President and General Manager Jesus Clint O. Aranas said in a press conference on Tuesday.

The plan to place $800 million in “foreign currency-denominated instruments” is part of the pension fund’s target of a 9% per annum return of investment.

“These days, return of investment is at an average of 5.5%, below our ideal rate of 9% per annum. We want to beat that 9%…that’s why we have a risk conservative approach,” Mr. Aranas said, adding that the pension fund will be maximizing the “very good” market performance recently.

GSIS is looking to hire two external asset managers to have an allocation of $400 million apiece.

“The fund manager must have an experience to manage a global portfolio because we want a fund manager who knows how to do dynamic asset allocation,” said Gracita Gilda V. Bocanegra, senior vice-president of GSIS, adding that they are open to local firms.

As of November, 62% the pension fund’s assets were invested in financial assets, 24% in loans to its members, 6% in investment properties, 4% in cash and another 4% in property, equipment and other assets.

GSIS posted a net income of P84.15 billion in the first 11 months of 2017, up 52.52% from the P55.17 billion posted in the comparable year-ago period.

Income generated from loans slightly increased by 3.8% to P22.49, as active loan accounts as of November 2017 grew to 1.19 million from 720,342 accounts posted in the comparable year-ago period.

Revenues from insurance also grew 11.2% in the eleven months ended November 2017. This was driven by “increased social insurance contributions” as the number of contributing members rose to 1.7 million as of November last year.

In the expenditure side, GSIS paid more than P85 billion in social insurance claims and benefits in the period, up 13% from P75.1 billion in 2016.

Meanwhile, GSIS’ total assets rose 8% to P1.09 billion as of November 2017.

“The growth was driven by income from financial assets, which doubled to P52.12 billion on the back of the robust performance of financial markets,” a statement from GSIS read. — Karl Angelo N. Vidal

CLI reservation sales hit P4.58B in 2017

NEW RESIDENTIAL PROJECTS boosted Cebu Landmasters, Inc. (CLI)’s reservation sales in 2017, allowing it to post a 55.6% growth from 2016 figures.

In a statement issued Tuesday, the listed property developer said it booked reservation sales of P4.58 billion in 2017, exceeding its P4-billion target.

CLI said the growth was driven by newly launched residential projects — 38 Park Avenue in Cebu IT Park which offers 745 units, Casa Mira South in Cebu with 3,200 units, and Mivesa Garden Residences in Cebu with 1,514 units.

The company’s developments in Mindanao, such as the 798-unit Mesaverte in Cagayan de Oro and the 694-unit in Davao City, likewise showed robust  sales.

“All the projects we launched were well-received by their respective markets making 2017 another banner year,” CLI Chief Executive Officer Jose R. Soberano III was quoted as saying in a statement.

CLI aims to continue this growth in 2018 as it targets to book P7 billion in reservation sales, marking a 52% year-on-year increase. This will be driven by a total of 20 projects to be launched, half of which will be in Cebu.

The company said it will be entering two new locations in the Visayas area, with Bacolod to house two residential projects and a hotel. CLI will also be constructing a residential condominium in Iloilo, riding on the optimism on the expected economic growth in these areas.

“Reports from the National Economic Development Authority show that the Visayas region will zoom ahead of other regions in the next five years and is expected to outpace the projected 7-8% growth for the Philippines,” CLI said.

For Mindanao, CLI is planning the launch of two residential subdivisions and one condominium in Cagayan de Oro, as well as a central business district and two residential condominiums for Davao City.

“In 2018, we will continue to expand our footprint in the Visayas and Mindanao, and develop projects that respond to the growing market in these areas,” Mr. Soberano said.

With this, CLI looks to end 2018 with a total of 66 developments. These projects cater primarily to the mid-market segment, although the company noted some of its condominiums serve the high-end market as well.

CLI said it is counting on people with increased take-home pay to divert these funds into housing, following the lowering of personal income taxes from the newly enacted tax reform program.

This year, CLI is targeting a net income of P1.7 billion and revenues of P5.3 billion.

CLI booked a net income of P960 million in the first three quarters of 2017, 77% up from year-ago levels as revenues also jumped 67% to P2.77 billion in the same period.

Shares in CLI were down five centavos or 1.01% to P4.90 apiece at the stock exchange on Tuesday. — Arra B. Francia

Peso down on remittances

THE PESO slumped against the dollar on Tuesday as central bank data showed remittance growth slowed in November.

The local currency closed the session at P50.49 versus the greenback yesterday, losing 12 centavos from its P50.37-per-dollar finish on Monday.

The local unit traded weaker the whole day, opening at P50.40 versus the dollar. Its intraday low stood at P50.505, while its best showing was at P50.375 against the greenback.

Dollars traded climbed to $875.37 million from the $697 million that changed hands a session ago.

Traders interviewed on Tuesday attributed the peso’s weakness to the “disappointing” growth in remittance in November last year.

“I think it’s because of the perception on the slower growth in remittances. There’s a perception that remittances might not come in as expected,” Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, said over the phone.

Money sent home by overseas Filipinos stood at $2.262 billion that month, higher than the $2.217 billion posted in a comparable year-ago period, but lower than the $2.275 billion in October 2017, central bank data released on Monday showed.

The rise in remittances in November was slower at 2%, compared with the 18.5% growth the same period in 2016 and October 2017’s 8.4%.

“This was lower than the 7.3% year-on-year increase to $2.45 billion,” Jose Mario I. Cuyegkeng, senior economist of ING Bank, said in an e-mail sent to reporters.

Meanwhile, another trader said on Tuesday: “The peso weakened today as traders positioned ahead of resumption of US financial markets this week from a holiday [on Monday] despite the stronger balance of trade figures from the Euro area.”

For today, Mr. Asuncion said the local currency might move within P50.30 to P50.60, while another trader gave a slightly lower range of P50.35 to P50.65.

“The local currency is expected to move sideways [today] due to lack of fresh leads but may be driven by significant movements on the US markets,” the trader said. — Karl Angelo N. Vidal

Metro Pacific eyes Malaysian toll road deal within the year

METRO PACIFIC Investments Corp. (MPIC) is looking to close an agreement for a tollways venture in Malaysia this year.

“We hope we could close something within the year,” MPIC Chairman Manuel V. Pangilinan told reporters on the sidelines of the Financial Executives Institute of the Philippines anniversary gala on Jan. 15.

Mr. Pangilinan said MPIC sees Malaysia as the next viable country for an investment in tollways business, after entering the Indonesian market in November. Metro Pacific Tollways Corp. (MPTC) has increased its stake in Indonesia infrastructure holding company PT Nusantara Infrastructure Tbk.

In 2016, MPIC’s talks with a Malaysian company for a 50-kilometer tollway project fell through.

The conglomerate aims to continue its expansion into Southeast Asia and create a “pan-ASEAN” tollway network.

It currently has stakes in in Don Muang Tollway Public Company Limited, a major toll road operator in Bangkok, Thailand, and in CII Bridges and Roads, a firm with road and bridges projects in Ho Chi Minh City, Vietnam.

After Vietnam, Thailand, Indonesia, and possibly Malaysia, MPIC is eyeing opportunities in Myanmar, although there are no “visible” opportunities for now, Mr. Pangilinan said.

MPIC is one of three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo

House OK’s resolution on constitutional assembly

THE HOUSE of Representatives approved in plenary on Tuesday House Concurrent Resolution 9 convening the House and Senate into a constituent assembly.

A video uploaded on the House Web site showed Cebu (3rd District) Representative Gwendolyn F. Garcia of the House majority presiding over Tuesday afternoon’s plenary session that adopted the said resolution.

Anticipating Tuesday’s vote in a statement on Monday, Representative Roger Mercado, chairman of the committee on constitutional amendments said that with the approval of Resolution No. 9, all recommendations, including the PDP-LABAN draft Constitution and those reforms or amendments submitted by House members would be discussed by the different committees based on the rules on Congress as a constituent assembly.

“If we finish that today, we (then) will vote and approve the House resolution convening both houses into a constitutional assembly,” Mr. Mercado said on Monday.

He maintained the stand of the House on both chambers of Congress voting jointly.

“The Congress, upon the vote of all its members, so, both houses will be convened and upon a vote of three-fourth of all its members, meaning the House of Representatives and the Senate, then we can propose amendments to our Constitution,” Mr. Mercado said, quoting Article 17 of the Constitution.

The Senate, on the other hand, maintains that the two chambers must vote separately on this matter, and a majority senator, Panfilo M. Lacson, has filed a resolution to that effect.

Earlier on Tuesday, members of the House kicked off discussions on possible changes to the 30-year-old 1987 Constitution, with the aim of shifting to a system of federal government and allowing the president up to two terms in office.

The switch to a federal system was one of the key planks of President Rodrigo R. Duterte’s election campaign, aimed to remedy what he saw as neglect by a Manila-centric political establishment that has left provinces in perpetual poverty.

Mr. Duterte’s allies, who dominate the nearly 300-member House, want a Constitution that broadly aims to expand both legislative chambers, lengthen lawmakers’ terms, give provinces more fiscal autonomy, have a prime minister as head of government, and a separately elected president.

The tentative plan is to agree and draft the amendments late this year and hold a referendum in May 2019.

The push to change the Constitution has been a divisive issue, with critics accusing lawmakers of trying to prolong their stay in office, or of creating a way for Mr. Duterte to stay in power beyond the end of his term in 2022.

Opponents warn the process could bring a repeat of the 1970s-era of the late dictator Ferdinand E. Marcos and say they are troubled by Mr. Duterte’s stated admiration for him, and the President’s similar authoritarian traits.

The opposition says the 1987 Constitution was drafted to stop that from happening.

Mr. Duterte has made clear he has no desire to stay longer than his term and, if anything, would prefer to retire earlier.

Lawmakers have yet to decide on what federal model to adopt, Mr. Mercado said.

Also on Monday, Senator Juan Miguel F. Zubiri bared a planned schedule for the Senate to act on the proposed Bangsamoro Basic Law (BBL), the premise for establishing a new autonomous region in Mindanao on the watch of the Moro Islamic Liberation Front (MILF).

Mr. Zubiri said: “We will also be going to have a hearing this Jan. 23 which is on Tuesday where in all Cabinet officials, as well as the BTC (Bangsamoro Transition Commission) officials and members of the MILF will be here in the Senate. After which, on the 25th, we will have a hearing at Cotabato City and 26 we will be in Marawi and we will also have succeeding hearings in (the) Basulta (Basilan, Sulu, Tawi-Tawi) area. So we would like to assure the President and the Filipino people that we are prioritizing the BBL.

“I like to finish the discussion on 2nd and 3rd reading on (the) second week of March before the session break,” the senator added. “We will have the committee report ready by third week of February….After which I will bring the committee report in plenary and we will have three weeks to pass the measure.”

For his part, Senate President Aquilino Martin L. Pimentel III clarified: “BBL does not need Cha-cha. It is easier to achieve. It is common sense….In the context of the 1987 Constitution, so pag-isipan mong dalawa, anong mas (think about the two, which is more) achievable, BBL o charter change? Mas madali ang BBL (BBL is easier).” — main report by Reuters

Trust in Robredo jumps to ‘very good’

VICE-PRESIDENT Maria Leonor G. Robredo’s net trust rating jumped 16 points to “very good” +52, according to the Fourth Quarter 2017 Social Weather Survey conducted by the Social Weather Stations on Dec. 8-16 last year.

Ms. Robredo’s net trust of +52 (66% much trust minus 14% little trust) compares with her good +36 (6% much trust, 21% little trust, correctly rounded) in the SWS survey of September 2017. SWS classifies net trust ratings as follows: +70 and above, “excellent”; +50 to +69, “very good”; +30 to +49, “good”; +10 to +29, “moderate”; +9 to -9, “neutral”; -10 to -29, “poor”; -30 to -49, “bad”; -50 to -69, “very bad”; -70 and below, “execrable.”

Ms. Robredo’s net trust rating began with a moderate +29 when the polling group first surveyed it in December 2015. It peaked to very good +63 and +58 in June and September the next year, before dropping to good levels from December 2016 to September 2017, amid her criticisms of the conduct of President Rodrigo R. Duterte’s anti-drug campaign.

Ms. Robredo’s net-trust ratings improved to very good in the areas of the Visayas, Balance Luzon, and Mr. Duterte’s home region Mindanao, while it stayed moderate in Metro Manila.

In Mindanao, particularly, trust in Ms. Robredo leapt 26 points and two grades to very good +50, compared with moderate +24 in September last year.

Trust in Ms. Robredo also jumped 16 points and one grade in the Visayas (very good +64) and Balance Luzon (very good +56), but remained at a moderate +27 in Metro Manila, if still up by 5 points.

Among Classes D and E, where trust in Ms. Robredo has ranged between good and very good, she jumped 16 points to very good +53 in Class D and 18 points to very good +52 in Class E.

In terms of educational attainment — where trust in Ms. Robredo has also been in the “good” to “very good” levels among respondents who have finished up to some elementary, some high school and some college — she jumped 18 points among high school graduates (very good+51) and 19 points among non-elementary graduates (very good+66) and rose 8 points among elementary graduates (very good+52).

Ms. Robredo’s biggest leap, however, was by 36 points among college graduates (good+43), in sharp contrast to her net trust in this group of neutral +7 in September and moderate+15 in June last year .

SWS also noted that Ms. Robredo’s net trust rose by one grade to very good among both men and women as well as the 45-54 and 55-above age groups, while remaining good among the 18-24, 25-34, and 35-44 age groups.

The survey, which shows an overall spike in Ms. Robredo’s ratings, comes amid a brewing controversy over the planned abolition of her office in the constitutional shift to federalism that Congress is set to tackle.

The survey was conducted using face-to-face interviews of 1,200 adults (18 years old and above) nationwide: 300 each in Metro Manila, Balance Luzon, Visayas, and Mindanao (sampling error margins of ±3% for national percentages, and ±6% each for Metro Manila, Balance Luzon, Visayas, and Mindanao).

Interviewed by reporters about the new survey, Ms. Robredo said in part: “(N)apakalaking bagay nito para sa amin kasi gustong sabihin, kahit may ganitong limitasyon, nakakabigay pa rin ng parang positibong epekto iyong mga paghihirap na ginagawa namin — lalong lalo siguro iyong aming Angat Buhay program….” (This is significant for us because, even with our limitations, it shows there is a positive effect in what we’re struggling to achieve — especially through our Angat Buhay program….) — with Camille A. Aguinaldo

Blackwater, Phoenix look to sustain winning ascent

By Michael Angelo S. Murillo
Senior Reporter

THE Blackwater Elite and Phoenix Petroleum Fuel Masters, two teams currently on a roll in the PBA Philippine Cup, take on separate opponents today, looking to sustain their fine form and position themselves well in the race moving forward.

PBA Standings

Blackwater, winner of its last two games, faces off with the TNT KaTropa in the main game set for 7 p.m. at the Smart Araneta Coliseum while Phoenix, also riding a two-game ascent, clashes with the Rain or Shine Elasto Painters in the opener at 4:30 p.m.

The Elite (2-1) collide with the KaTropa coming off an impressive 94-77 victory over the Barangay Ginebra San Miguel Kings on Jan. 12.

Banking on a thorough attack on both ends of the court, the Leo Isaac-coached Elite held their own against a loaded Ginebra crew and underscored their standing as a potential dark horse in the Philippine Basketball Association’s (PBA) season-opening tournament.

JP Erram led Blackwater’s charge in the win over the Kings, winning player of the game honors on the strength of a double-double of 22 points and 11 rebounds to go along with six block shots.

Sophomore Mac Belo had 22 points and seven boards while Allein Maliksi came off the bench to chip in 17 points and seven rebounds.

“This is a huge win for us and a good start for us in 2018. The win boosts our confidence as individual players and as a team,” Mr. Erram said following their win.

“We just followed Coach Leo’s game plan and stuck with the system and put in the needed effort,” he added as described what did it for them against the Kings.

Out to stop Blackwater is TNT (1-2), which lost in its last outing.

Jayson Castro leads the KaTropa with averages of 15 points, 7.7 rebounds, eight assists and 1.3 steals per ball game.

Troy Rosario has been good for 14.7 points and 11.3 rebounds while Roger Pogoy is producing 11.3 points and five rebounds.

PHOENIX RISING
The Fuel Masters, meanwhile, sent the NLEX Road Warriors to a 102-95 loss in their last assignment on Jan. 7, anchored on much balance with at least six players scoring in double digits.

Matthew Wright was at the forefront, finishing with 19 points as veteran Jeff Chan fired 18 markers.

RJ Jazul finished with 15 points while rookie Jason Perkins added 14. Justin Chua and Doug Kramer were the two other Phoenix players in double-digits with 12 and 10 points, respectively.

“Key for us in this win was our defense especially against their perimeter guys. It is one of the strengths of NLEX and good thing we were able to execute what we set out to do,” said Phoenix coach Louie Alas.

Meanwhile, Magnolia Hotshots’ Paul Lee is the latest recipient of the PBA Player of the Week honors after averaging 17 points, four assists, two rebounds and 1.5 blocks in their two wins over Kia Picanto and NLEX.

In winning the award Mr. Lee beat out Alaska’s Calvin Abueva, Vic Manuel and Chris Banchero, GlobalPort’s Stanley Pringle, Blackwater’s Erram and Belo, and San Miguel’s June Mar Fajardo and Arwind Santos.

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