Home Blog Page 13181

Stage father

Courtside
Anthony L. Cuaycong

Remember the Energizer Bunny? He of the bass drum just chugging along. And going. And going. And doing so for what has seemed like forever. You’d think he’s unique, having been around for the better part of three decades. Well, lo and behold, there’s one like him, and gaining surprising traction as well. Goes by the name of LaVar Ball, who, by all indications, is having a, well, ball in the face of all the attention generated by a constantly running motor — or, to be precise, motormouth.

Conditions seen right for panda bonds if needed

THE GOVERNMENT will find conditions suitable should it proceed with a plan to sell yuan-denominated debt papers this semester in order to diversify funding sources further, according to a senior executive of First Metro Investment Corp. (FMIC).

White House gaffe names Xi as President of Taiwan, not China

BEIJING — President Donald J. Trump’s press secretary mislabeled Chinese President Xi Jinping as the leader of Taiwan after a much-anticipated meeting at the Group of 20 (G20) summit, adding an embarrassment to a record of fraught relations.

Repeating history

Streetwise
By Carol Pagaduan-Araullo

“Those who cannot remember the past are doomed to repeat it.”

There are those who want us to forget the bitter lessons of martial law and the Marcos dictatorship. They say these hard-earned lessons should be discarded as irrelevant to our current situation because the threat of ISIS-inspired extremism is real and only martial law can stop it.

There is also the claim that President Rodrigo Duterte is motivated only by the desire to save the country from “terrorists” and the menace of illegal drugs. To do so, he has not hesitated in using the full might of the state — martial law — in order to finally slay these evils as no other previous administration has been able to.

We go back to the first lesson of martial law under the Marcos dictatorship: a mailed-fist approach to quash rebellions, much more revolutionary struggles, espousing causes that resonate with and draw support from the people — is bound to fail.

Even as we condemn terrorist activities that do nothing but violate human rights and harm civilians, we cannot turn a blind eye to the historical, socioeconomic and political roots of the armed conflicts among the Bangsamoro.

Assuming for the sake of argument that ISIS-inspired or even ISIS-funded rebel forces are active in Mindanao, it still cannot be denied that these are the offspring, albeit illegitimate, of the centuries-old oppression and discrimination suffered by the Moro people.

It is well-known that some of them, such as the Maute Group and the Bangsamoro Islamic Freedom Forces or BIFF, broke away from the Moro Islamic Liberation Front (MILF), because they perceived the latter as abandoning the fight for self-determination in exchange for a flawed peace agreement with the government.

The Abu Sayyaf Group (ASG) initially also claimed to have a political agenda akin to the Moro National Liberation Front (MNLF), the oldest armed secessionist force in Muslim Mindanao, but eventually deteriorated into a bandit group notorious for its kidnap-for-ransom activities. Recall that Senator Aquilino Pimentel had exposed the dubious origins of the ASG, a likely creation of the AFP and CIA in order to sow dissension among the MNLF as well as to undermine its political legitimacy.

Curiously, the government, especially the AFP, has always diminished the threat posed by these groups. We were told that these are small groups operating in circumscribed areas with narrow support from the Moro populace. At the onset of the operation to capture alleged ASG leader Isnilon Hapilon in Marawi City, the connection of these groups with the dreaded Daesh or ISIS in Iraq and Syria, was at best tenuous. (The AFP repeatedly said these groups merely claimed allegiance to ISIS in a bid to boost its fearsome reputation and perhaps acquire foreign funding.)

President Duterte says he recognizes the legitimacy of the MILF and MNLF as representing the nationalist aspirations of the Bangsamoro. He has nothing but contempt for the combined Maute Group/ASG/BIFF forces he categorizes as “terrorist” with no redeeming value.

Unfortunately he had been led to believe that the latter exist in a vacuum or have sprung up out of nowhere due to an evil, fanatical, foreign-inspired ideology. In the beginning of the Marawi siege, it appears he had been led to believe that these groups were an inconsequential number and could be crushed militarily in a matter of weeks so long as the armed forces of the state are given free rein.

But this was not to be. The ferocity and protractedness of the fighting shows how much the AFP had underestimated the rebel groups in Marawi City. The recourse to bombardment of the city to flush out what seems to be an elastic number of rebels has led to its destruction and depopulation with hundreds of casualties with no clear end in sight.

These subsequent developments served to bolster the argument for martial law in Marawi City and even adjoining provinces, but why the recourse to it in the entirety of Mindanao?

Defense Secretary Lorenzana admitted at the press conference in Russia that “other rebel groups” including the New People’s Army was also a target. GRP chief negotiator Bello countered Lorenzana’s seeming slip of the tongue only as a prelude to chastising the CPP-NPA’s call for intensification of tactical offensives against government forces in response to martial law.

This was followed by a chorus of peace spoilers questioning the NDFP’s sincerity in the ongoing peace talks. It is a line repeated ad nauseam in the mass media as the trigger for Duterte’s decision to withdraw the GRP negotiating panel from the 5th round of talks. It conveniently obfuscates the fact that martial law was indeed intended and in actuality is being used against the CPP-NPA and communities suspected to be under its sway.

In fact, with the acquiescence of Congress to Proclamation 216 and the imprimatur of the Supreme Court, the AFP has become more openly assertive about targeting the NPA. While Duterte has not withdrawn his “all-out-war” declaration against the CPP-NPA since February and has now cloaked the military’s abuses with the “legality” of martial law, Lorenzana has the gall to call for the collapse of the peace talks citing recent NPA tactical offensives.

Duterte’s martial law is actually the anti-thesis of his touted “movement for change.” In the hands of the pro-US militarists in the Duterte regime, it is being used as an extraordinary tool for fascist repression. The thousands of extrajudicial killings in Duterte’s ruthless “war on drugs” is a portent of what is bound to happen in the intensified “war on terror” under martial law.

It would be foolhardy to think Duterte was merely engaging in hyperbole when he said that like Marcos’s martial rule, his would be just as “brutal.”

Should Duterte extend martial law beyond 60 days and/or expand its coverage to the rest of the country, he will be dooming any remaining reformist impetus in his regime. In so doing, he will also doom the GRP-NDFP peace negotiations already in limbo because of the GRP’s insistence on a premature bilateral cease-fire before any agreements on basic socioeconomic reforms and Duterte’s policy of holding political prisoners hostage to the NDFP’s capitulation.

And yet the second major lesson from Marcos’s martial law comes to the fore. Rather than douse the flames of rebellion and revolution, martial law can only fuel more armed and unarmed resistance.

In fact, Marcos’s martial law was said to be the number one recruiter of the New People’s Army.

The US-backed Marcos dictatorship was eventually ousted from power by a people roused by its rapacity, brutality, and mendacity.

Martial law could indeed be the harbinger of a revolutionary upsurge that could seriously challenge, weaken and even bring down a completely reactionary and isolated Duterte regime.

Streetwise -- Carol Pagaduan-AraulloCarol Pagaduan-Araullo is a medical doctor by training, social activist by choice, columnist by accident, happy partner to a liberated spouse and proud mother of two.

carol_araullo@yahoo.com

DTI warns traders vs jacking up prices in earthquake-affected areas

A RESIDENT of Tacloban City, Marichor Villacorte, said a solar flashlight that cost P120 before Thursday’s 6.5-magnitude earthquake in Leyte is now being sold at P380. Candles, which used to cost P40 are now being sold at P80, while lamps, previously sold at only P35 now cost P70. Complaints of a sudden surge in prices of commodities have reached the Department of Trade and Industry Office-Region 8, prompting Regional Director Cynthia R. Nierras to issue a warning against “unscrupulous activities” by business owners. The earthquake caused a region-wide power blackout. Restoration work is ongoing with some parts expected to get electricity service back by today. Ms. Nierras said the complaints were mostly coming from Tacloban City and the Anibong district. — The Freeman

This way to the exit

Fence Sitter
By A. R. Samson

In sports, even when the athlete’s best days are behind him, the money for yet another round can be too attractive to turn down. This is even harder when there are championship belts that can still be contested. Thus the boxing legend who has lost four of the last nine fights, the most recent to a complete unknown, may still convince himself it’s not yet time to hang up the gloves. Will he go for a rematch? In this case, the decision may no longer be in his hands. The promoters and the paying public may grow tired of the spectacle, even pained to see the tenacity of an obsession that has lost its moorings.

Leaving the stage and heading for the exit (stage right) can be a daunting prospect. But can exits be planned?

Investors are always advised to have an exit plan when they set up their portfolio. When buying a stock, it should be clear what the profit target is and therefore the right time for selling. This exit plan applies as well when the price is going down, with a preset “stop loss” exit.

An exit plan is an architectural metaphor. Emergency exits are designed to allow safe passage out of a building or room in cases of emergency, like a fire.

Once a new CEO is appointed to his new job, he has to do three things. First, he has to listen to subordinates and colleagues to understand the situation and have a clear picture of where the current organization is. Second, he draws up plans to address the needs of the organization and maybe offer up a vision of where it should be going.

Lastly, he should develop an exit strategy for himself. As soon as he takes over, the CEO must prepare for a succession plan and his eventual moving out of the organization. Of course this can change when he gets too comfortable.

An exit strategy is obvious for projects like hosting the Miss Universe contest. Such projects have definite starts and finishes. A temporary organization is established with clear goals and definite exit points. This applies as well to movie productions. Although incorporated to establish shareholdings and how to distribute profits or losses, once the movie is wrapped up and shown in theaters with the video rights secure, the project is done. And the CEO or producer exits, looking for his next entrance.

Why are corporate appointments often open-ended?

With all the management talk of succession planning and preparing the organization for the next generation, exit plans are often taboo topics with CEOs. They’re only discussed for “others.” Thus, successions are implemented effectively at the lower levels. The incumbent may take a travel leave, only to come back to a redecorated office with a new photo on the table and a box of his old stuff at the anteroom where his secretary may be teary-eyed.

CEOs (like sports icons) may have unplanned exits. They are replaced if the company is acquired or shareholders revolt and elect a successor. Seldom does the CEO leave according to a timetable of his own making. The appellation of “lame duck” seems to justify not making succession plans.

The appointment to the leadership of the central bank with its fixed term allows for a much desired “continuity” of policies and an orderly transfer of power. Elected officials also have their own designated exit points, although continuity here is not expected. Exiting gracefully is a luxury only the self-assured can pull off. And timing is of the essence.

In family corporations, the patriarch may step down and leave the “day-to-day” operations in the hands of the next generation. The position and moral authority of “patriarch” and founder cannot really be handed over to anyone. This is a title that belongs to a particular individual given up only in a horizontal exit. Thus, the founder is there available to be consulted for major moves and when needed referee squabbling siblings.

An exit plan is not a will, although that is another variant. It is just a realization of one’s diminished value or skills and recognition that someone much younger may provide a more energetic alternative.

Still, an exit plan even in architecture may be improvised. It can be a door or a window through which one is pushed out… from the 11th floor.

Fence Sitter -- A. R. SamsonA. R. Samson is chair and CEO of Touch DDB.

ar.samson@yahoo.com

Dissecting domestic tourism

MILLENNIALS were the most traveled within the country last year, according to the latest data released by the Philippine Statistics Authority and Department of Tourism. Read the full story.

Stock market hardly moves on lack of leads

THE Philippine Stock Exchange index (PSEi) barely moved yesterday in the absence of any catalyst.

At the close of trading on Friday, the benchmark index settled at 7889.33, up 1.02 points or 0.01% from Thursday’s 7888.31. The broader all-shares index likewise hardly moved, shedding only 0.04 points to end the day at 4735.12.

Counters were mixed, with the financials, services and property sub-indices up, and the holding firms, mining and oil, and industrials down.

Philstocks.ph senior analyst Justino B. Calaycay, Jr. attributed the small gain to the lack of a catalyst: “Obviously there’s not enough to push the stocks higher or lower. Value turnover is rather thin.”

Decliners outnumbered advancers by only two, with 46 issues unchanged. Trading value eased to P6.901 billion, as 2.029 billion shares changed hands.

“Basically this is just a continuation of the index’s short-term range trade,” said Regina Capital Development Corporation (RCDC) analyst Paul Michael Angelo in an e-mail.

“Stock market actually closed 0.6% higher compared to Monday opening so I don’t think it is bearish. Considering the volume that we had today, I think this is just a preparation for a stronger week ahead,” he said, adding that the release of external trade data next week could be a catalyst.

The most actively traded stocks were Metropolitan Bank and Trust Company (up by 3.63%), its parent GT Capital Holdings, Inc. (down 0.41%), Pilipinas Shell Petroleum Corporation (down 0.22%) Ayala Land, Inc. (up by 0.13%), and Metro Pacific Investments Corporation (up by 0.15%).

“We’re keeping tabs on a handful of stocks,” said Mr. Calaycay, citing Meralco, Global-Estate Resorts, Inc (GERI) and Travelers International Hotel Group, Inc.

Resorts World-owner Travelers got a boost from news it was accelerating development of its hotels. This came several days after the state regulator lifted a suspension order on the casino-operator, which last month shuttered because of a fire set off by an individual.

“GERI is a bit surprising, although we have been particularly bullish on the stock,” said RCDC’s Mr. Angelo. “I guess the market is now beginning to appreciate the sound earnings that GERI contributed to MEG during 1Q17 and is expected to continue the same momentum for the first half of 2017.”

Megaworld Corp. is the parent company of GERI, which is among the day’s top gainers, climbing 15.33%. Others in the top five are MJC Investments Corporation (up 12.50%), MacroAsia Corporation (up 9.54%), The Philodrill Corporation and Century Properties Group (each up 8.33%).

Philstocks’ Mr. Calaycay sees the market trading sideways in the next couple of weeks, with a big movement expected to come right after President Rodrigo R. Duterte’s State of the Nation Address later this month. — Mario M. Banzon

Philippines, Japan firm up infrastructure partnership

THE COUNTRY’S economic team and its Japanese counterpart moved to streamline infrastructure implementation as they firmed up the list of Japan-funded projects during their second High Level Joint Committee and Infrastructure Development and Economic Cooperation meeting on Friday.

PHL-Japan meeting
The government’s economic team meet with their Japanese counterparts during the second Philippines-Japan High Level Joint Committee on Infrastructure Development and Economic Cooperation Meeting. Photo taken July 7, 2017. PHOTO CREDIT: NEDA’S OFFICIAL TWITTER ACCOUNT

“Both sides have made significant progress in finalizing the list of flagship cooperation projects in the Philippines for funding by Japan and identifying several others for possible Japanese financing, in step with the intensified public investment program of the Duterte presidency,” Finance Secretary Carlos G. Dominguez III said in his opening statement at a press briefing after the meeting.

“Both sides have also discussed plans and actions to be undertaken in a mutually agreed schedule that will ensure the swift implementation of big-ticket projects,” said Mr. Dominguez, who heads the Philippine government’s economic team.

The meeting was attended by chiefs of the National Economic Development and Authority, Department of Budget and Management, Department of Public Works and Highways, Department of Transportation, and the Bases Conversion and Development Authority (BCDA). Attendees on the Japanese government’s side included Hiroto Izumi, special advisor to Japan Prime Minister Shinzo Abe, and other high-ranking officials.

This was the second meeting between the two nations, with the first conducted in Tokyo last March where the Philippine delegation pitched its list of infrastructure projects.

“The overall theme speed in processing and implementation of these projects, how much traction does this theme take hold,” said Socioeconomic Planning Secretary Ernesto M. Pernia.
Mr. Pernia said nine projects were reviewed, namely the P2.05 billion Harnessing Agribusiness Opportunities through Robust and Vibrant Entrepreneurship Supportive of Peaceful Transformation project; the P214 billion Mega Manila Subway; the P93.37 billion Malolos-Clark railway; the P9.8 billion Cavite Industrial Area Flood Management; the P4.01 billion Dalton Pass East Alignment Alternative Road project; the Malitubog-Maridagao Irrigation Project, Stage 2; the Road Network Development Project in Conflict-Affected Areas in Mindanao; the Circumferential Road 3 Missing Link project; and the Pasig-River Marikina Channel Improvement project phase four.

Collectively, the nine projects, which will be funded through loans from the Japan International Cooperation Agency (JICA) mixed with funds from other multilateral lenders, are worth an initial P315.42 billion, or $6.289 billion.

However, this is a shorter list compared to the initial 14 projects proposed in the first meeting.

Mr. Pernia said the list will still be subject to changes in the upcoming meeting, which has yet to be scheduled.

The third meeting will seek to finalize the list of projects before it is signed by the Philippines’ and Japan’s heads of states in November during the Association of Southeast Asian Nations (ASEAN) Summit and Related meetings.

“Both sides have decided to continue holding expert-level consultations to address issues pertaining to proposed railway projects and to pinpoint solutions to ensure the smooth implementation of these ventures,” said Mr. Dominguez.

On top of the listed projects, both countries also discussed possible participation in the power, environment, agriculture, information and communications technology, and disaster prevention and preparedness sectors.

The economic managers said the partnership signal rejuvenated relations between Manila and Tokyo as part of President Rodrigo R. Duterte’s foreign policy rebalancing.

Also, during the meeting, the BCDA and the Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (JOIN) signed the memorandum of cooperation for the Clark Green City project to firm up the financing commitment made last March.

JOIN earlier said it will provide an initial $2 million for the project, or 55% of the total cost, while the BCDA will shoulder the rest. — E.J.C. Tubayan

Tax perks for BoI firms, locators to stay

THE PROPOSED tax reform program will retain fiscal incentives for firms registered with the Board of Investments (BoI) as well as economic zone locators stated under the Special Economic Zone (SEZ) Act, the Finance department clarified.

business centers
“The fear that the Philippine BPO (business process outsourcing) industry will lose its competitiveness because of the proposed tax reform has no basis.” — Finance Undersecretary Karl Kendrick T. Chua

Finance Undersecretary Karl Kendrick T. Chua said the removal of value-added tax (VAT) exemptions under the Tax Reform for Acceleration and Inclusion Act or House Bill 5636 is limited to indirect exporters, as direct exporters that send their goods out of the country will continue to enjoy tax perks.

“Receipts from foreign services within the SEZs of the Philippine Economic Zone Authority (PEZA) will remain VAT-exempt, as is the case now, because they are outside customs territory by legal fiction, or zero-rated if the exporters are outside the special economic zone, including those that are BoI-registered,” Mr. Chua said in a statement.

“As for exporters outside SEZs, they are zero-rated on VAT payments and are entitled to get back their VAT payments once they apply for such refunds under the proposed 90-day refund system, while all other taxpayers, including suppliers to exporters will have to pay the VAT,” he said.

However, Mr. Chua also clarified that the zero-rated VAT privilege of indirect exporters will be removed only “if and when a credible and enhanced system is put in place” that will allow affected companies to get cash refunds of their VAT payments within 90 days after their filing of VAT refund applications with the Bureau of Internal Revenue.

“The fear that the Philippine BPO (business process outsourcing) industry will lose its competitiveness because of the proposed tax reform has no basis. Certain industry stakeholders are likely misinterpreting the provisions of the bill, said Mr. Chua.

The clarification was made following calls from PEZA and the BPO industry to retain their tax perks to keep them competitive against neighboring BPO hubs.

The removal of VAT exemptions is part of the Finance department’s bid to broaden the tax base and plug up leakages to increase revenue collections.

The Finance department first package of the tax reform program is expected to yield a P1.163 trillion net revenue from 2018 to 2022, which will be earmarked for infrastructure and social spending. — E.J.C. Tubayan

BSP excludes clearing, settlement from SBL

By Melissa Luz T. Lopez,
Senior Reporter

THE CENTRAL BANK will exclude payment transactions of conglomerates from its computation of the single borrower’s limit (SBL) of financial firms, providing leeway for banks to further raise the loans they extend to these big players.

The Bangko Sentral ng Pilipinas headquarters in Manila -- BW file photo
Businesses must maintain a clearing and settlement account with a local or foreign bank and enter into an agreement with the lender to designate such account as “exclusively for short-term payment transactions,” the BSP said. — BW FILE PHOTO

In a statement, the Bangko Sentral ng Pilipinas (BSP) said it has relaxed the SBL for banks and quasi-banks by allowing them to remove short-term payment and settlement transactions from the cap, effectively freeing up more funds which such companies can borrow.

“Said exclusion was accorded as applying SBL to clearing and settlement accounts may impede financial market activities and fund transfers from one institution to another. Moreover, the distinct nature of clearing and settlement accounts as mere ‘pass through’ for short-term payment transactions entails relatively low credit exposure to the clearing and settlement bank,” the central bank said on Friday.

The SBL is intended to cap banks’ credit exposure to a single client to a maximum of 25% of a bank’s net worth. The ceiling includes loans, credit guarantees, and securities underwritten by universal and commercial banks as well as investment houses that were unsold after 90 days.

This comes at a time of rapid credit growth and with the Duterte administration pursuing an aggressive infrastructure push, which banks are looking to cash in on by underwriting loans for various big-ticket projects.

“It is an easing because we are basically distinguishing between normal transactions and clearing and settlement transactions, because these are the major temporary payments,” BSP Governor Nestor A. Espenilla, Jr. told reporters on the sidelines of a meeting of the Credit Management Association of the Philippines on Friday.

“In the course of settlement sometimes the balances exceed SBL. But it’s very temporary, so if you have to put an SBL on that, it will hamper the clearing and settlement process.”

Mr. Espenilla said the simpler rules will help banks prevent going beyond the loan exposure ceiling, which would merit penalties for breaching the limit.

Businesses must maintain a clearing and settlement account with a local or foreign bank and enter into an agreement with the lender to designate such account as “exclusively for short-term payment transactions,” the BSP said. Banks and quasi-banks, in turn, must adopt internal controls to properly identify which accounts are considered as mere settlement channels versus loan accounts.

Mr. Espenilla added that the reform would promote the efficiency of the payment system,” as the new rule acknowledges that such deposits stand as petty cash kept by businesses to settle its dues.

International credit raters said there are minimal risks seen for the Philippine banking system despite the double-digit credit growth, as these loans currently support upbeat domestic economic activity. However, they noted that corporate lending continues to take the biggest chunk of borrowings, which meant bigger exposures split among several big businesses.

Peso rebounds ahead of US payrolls data

THE PESO rebounded versus the dollar on Friday due to profit-taking ahead of the release of US non-farm payrolls data.

Peso notes
AFP

The local currency finished at P50.58 against the greenback to cap the week, jumping nine centavos from its P50.67-per-dollar finish on Thursday.

The peso opened the session at P50.64 versus the dollar. It dropped to as low as P50.68 against the greenback, while its intraday high was at P50.54.

Dollars traded rose to $514.7 million from the $429.9 million logged on Thursday.

“[S]ome players were just trying to reduce dollar positions ahead the NFP release, although it is still expected to probably be higher,” a trader said.

The trader said the US economy is expected to have created around 180,000 jobs last month.

If realized, this would be higher than the 138,000 recorded in May, according to US Bureau of Labor Statistics data.

“If it’s lower than 180,000, then the dollar would probably correct a bit after this, given that they’re just trying to lower their base ahead of that event,” the trader added.

The peso has been trading above the P50 level since late last month, but Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla said that it is not a cause for concern.

“It’s not a concern. BSP has always said it’s market pricing, and our concern is primarily in terms of excessive volatility… We want the exchange rate to continuously reflect market conditions and underlying fundamentals,” he told reporters on Friday. — EJCT