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Three sales elements

Proficient and capable salesmen are difficult to find and even harder to hold on to. The cost of recruitment is significant. We have recently calculated that it is costing upwards of 15% of annual salary to get an individual on board. Consider the subsequent costs of training, administration, provisions, uniforms, and all the other charges and levies associated with keeping a new employee for one year and one can understand the need to get it right first time and to bring individuals on board who will amortize those up-front costs by staying for more than a year or two.

Perhaps I am being a little unfair but it seems to me that millennials have little interest in winning a good job. I am continually frustrated by individuals who turn up for interview ill-equipped to answer any questions about our company and unable to provide any answers as to what they can contribute or why they would like a job with us. Their attitude seems to be, “Show us what you are willing to pay and we’ll decide if we want to work for you or not!”

Increasingly, we now look to professionals to fill our sales positions. We believe it is necessary for our sales engineers to have sufficient technical knowledge so they can understand how our products work and accurately explain to our clients who, for the most part, are also engineers. Product knowledge training goes some way to getting our people up to speed, however, those who have a solid technical background find it considerably easier to comprehend and absorb product knowledge.

Our sales executives must also understand “product application.” Clients want to deal with people who understand their problems. They increasingly expect sales executives to come up with innovative solutions. Our client base wants to discuss problems with engineers who really understand their situation. So we have discussed two basic requirements for sales engineers. They must have good product knowledge and an understanding of their client’s situation.

Selling is not for everybody. It requires self-discipline, tenacity and hard work to become successful. Sales managers look for sales staff with basic qualities. Gregarious, determined, hardworking personalities are well-suited to a career in sales.  Yet even this is not enough. No matter how hard a salesperson works, a constant stream of customers saying no to his products or services will quickly lead to demoralization.

The realities are that hard work and a positive attitude are not enough. Our sales executives must be able to sell products against strong and aggressive competitors. Without exposure and mastery of the correct skills and behaviors to use in a sales interaction, our salespeople will fail to meet targets.

So the last component for success is a clear understanding of the sales process and how to use it to influence a sale. Research shows that there are specific skills and behaviors that are used to enhance sales effectiveness. Quality sales training programs teach these skills.

To put all of this in context, I have newly hired engineers who are untrained and inexperienced in selling. It will take time to teach them the products and product application. I have a couple of sales engineers who come from other disciplines (nursing, chemical engineering, etc.) Fortunately, they have been with us long enough to have assimilated both product knowledge and selling skills. Nonetheless, they still find it difficult to see when faced with highly competent engineers who require technical explanations. Lastly, I have a couple of senior engineers who know both products and product application. However, neither of them are commercially oriented.

To build a strong sales team, I need all three elements. If I can’t achieve this at the time of recruitment, then training and experience will have to be gathered over time. As I say, the cost of recruitment is high. We pay good salaries and benefits; we just need to make sure we get some return on investment by knowing what we need, who we are hiring and by taking steps over time to fill the gaps in technical, sales, and application knowledge.

Terence Hockenhull is a long-term resident of the Philippines.  He is an accomplished sales consultant, and currently holds an executive sales position with an Italian geotechnical company.

hockenhull@gmail.com

Yanks’ new manager

Considering how many officials were involved in the selection of the Yankees’ new manager, it’s a wonder Aaron Boone needed only one interview to nail the job. Prior to tapping the playoff hero for the position, franchise owner Hal Steinbrenner relied on inputs from such notables as vice-president of operations Tim Naehring, vice-president of communications, Jason Zillo, and assistant general managers Jean Afterman and Mike Fishman. Yet, as GM Brian Cashman (on whose shoulders fell the task of making the final recommendation) noted, “there was a difference of opinion among the participants as to who their Number Two or Three choice was, but there was little to no difference of opinion as to who their Number One choice was. It wasn’t even close.”

If nothing else, the consensus underscores the esteem in which Boone is held. The Yankees’ short list of candidates for the hot seat was, needless to say, populated with outsized personalities sporting impressive resumes. The fact that he won out against the likes of coaches Rob Thomson, Hensley Meulens, and Chris Woodward, former manager Eric Wedge, and the well-traveled Carlos Beltran speaks volumes of his unique set of qualifications. Never mind that he had absolutely no experience working in the sidelines. For Cashman & Company, what mattered was his progressive outlook and capacity to communicate with a talented but young roster and impact games via a heady mix of advanced metrics and old-fashioned scouting.

Parenthetically, Boone knows the enormity of the task at hand. Because he will be wearing pinstripes, he is presumed to get his charges to compete for championships. Nothing less is acceptable. On the other hand, the front office isn’t so out of touch with reality as to compel him to produce from the get-go. It’s why he was inked to a three-year contract, with an option for a fourth season. “That doesn’t mean there won’t be some growing pains, and we’re okay with that,” Cashman said.

In any case, Boone is ready. “I understand what I signed up for,” he noted in his inaugural press conference yesterday. “I hope those expectations are ramped up each and every year,” he added, as good an indication as any that he believes the Yankees, who progressed ahead of schedule and came to within a set-to of reaching the 2017 World Series, are destined to do better. And so he figures “to get lost in the process,” confident that the wins will come accordingly.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is the Senior Vice-President and General Manager of Basic Energy Corp.

Roxas Holdings income rises 18% as of end-Sept.

ROXAS HOLDINGS, Inc. (RHI) grew its attributable profit by 18% during its fiscal year ending September, as the company managed to offset the impact of softer sugar prices through overall cost reductions.

In a disclosure to the stock exchange on Thursday, the listed sugar and ethanol producer posted a net income attributable to the parent of P119.78 million, lower than the P101 million it delivered in the same period in 2016.

The higher profit comes despite a 9% year-on-year drop in revenues to P10.95 billion, as the company implemented cost-cutting measures in the production side to reduce the impact of softer sugar prices.

“The improved relationship we have with planters and the upgrades that we implemented for the equipment and processes at our plants have paid off. We were able to reduce the overall costs of production, which also alleviated the impact of the soft prices of sugar,” RHI President and Chief Executive Officer Hubert D. Tubio said in a statement.

RHI’s sugar business accounted for bulk of the company’s revenues at 67% or P7.3 billion, lower by 7% year on year. This follows a 15% average decline in sugar prices.

During this period, the company milled 3.461 million metric tons of cane, producing 6.497 million bags of sugar weighing 50 kilograms each, which surpassed 2016’s production of 5.102 million bags.

The ethanol business segment, meanwhile, contributed P3.6 billion to the company’s revenues, 14% lower than the P4.2 billion it exhibited in 2016.

RHI attributed the decrease to delays in the enhancement of its plants during the early part of the year. The company noted it expands its production capacity by 82 million liters of ethanol per year. 

“We are hopeful that the expanded capacity and improved efficiency of the group’s ethanol business unit will underpin the continued growth of the business,” RHI Chairman Pedro E. Roxas was quoted as saying in a statement.

The company noted that it also delivered a 23% uptick in consolidated EBITDA (earnings before interest, tax, depreciation, and amortization) to P1.6 billion for the year, marking its second year of sustained growth after logging a 35% growth in 2016.

CDO LIFTED
At the same time, RHI said the La Carlota City government has lifted the cease-and-desist order issued last month against its Roxol Bioenergy Corp.’s (RBC) bioethanol plant over a “foul odor.”

“The lifting of the CDO is based on the results of our inspection and verification of the mitigating measures that you have implemented and committed to implement since the time of closure and onwards,” La Carlota Mayor Luis J. Jalandoni III said in a Dec. 5 letter to Roxol Chief Operating Officer Luis O. Villa-Abrille.

However, Mr. Jalandoni said the company should still comply with the requirements under the Environmental Clearance Certificate. He added that an inspection team will inspect Roxol’s facilities every last Friday of the month, as well as conduct random inspections every two months.

Mr. Jalandoni also asked Roxol to submit a monthly report on the pollution mitigation measures it has adopted.

Shares in RHI jumped 6.58% or 29 centavos to close at P4.70 apiece at the stock exchange on Thursday. — Arra B. Francia

Vladimir Putin will seek new term as Russia president

MOSCOW — President Vladimir Putin on Wednesday said he would seek a new six-year term in March elections, a move that would make him the longest-serving Russian leader since Joseph Stalin.

Mr. Putin, who has run Russia both as president and prime minister for the past 18 years, is expected to sail to victory, with only token opponents competing against him.

“I will offer my candidacy for the post of president of the Russian Federation,” he said during a visit to the GAZ car factory in Nizhny Novgorod, 400 kilometers (250 miles) east of Moscow.

He made the widely-expected announcement surrounded by cheering workers, who had prodded him to say whether he would seek a fourth presidential term in a carefully-choreographed ceremony.

“There is perhaps no better place and better excuse to announce this,” Mr. Putin said. “Russia will go only forward. And no-one will ever stop her.”

Predictably, Russian politicians praised the announcement.

But top Putin critic Alexei Navalny, who has declared a Kremlin bid despite not being allowed to run due to a suspended sentence for fraud, called the president a “swindler.”

“I suggest we don’t agree,” Mr. Navalny, a 41-year-old Western-educated lawyer, said on Twitter, referring to Putin’s plans.

Social networks were abuzz, with many ridiculing the Kremlin strongman and some comparing him to Robert Mugabe, the ousted leader of Zimbabwe.

“Vladimir Vladimirovich has decided to play the old Russian game dubbed ‘Out of the Kremlin feet first,’” said one critic, Aleksandr Kommari, on Facebook.

Muscovite Kirill Goncharov said he went to school and graduated from university under Mr. Putin.

“Time — the most important thing every person has — will be wasted on Vladimir Putin realizing his personal ambitions,” he said on Facebook.

Mr. Putin’s statement came as Russia reeled from a decision by the International Olympic Committee to ban the country from the Winter Games as punishment over claims of state-orchestrated doping.

But despite a litany of problems including corruption, poverty and poor health care, the 65-year-old leader enjoys approval ratings of 80%.

‘DO YOU TRUST ME?’
Just hours earlier Mr. Putin visited a glitzy ceremony for volunteers in Moscow where he sought to rouse supporters.

“I want to ask, do you trust and support me?” he addressed the huge audience of mostly young people. “Yes,” the audience chanted.

Prominent athletes and Soviet-era celebrities such as 83-year-old actor Vasily Lanovoi, took to the stage to extol Russian successes, such as Soviet victory in World War II.

Cosmonaut Sergei Ryazansky addressed the audience via video link from the International Space Station.

Mr. Putin has sought to appeal to the country’s youth after thousands of young Russians took to the streets earlier this year to protest alleged corruption among elites, targeting Prime Minister Dmitry Medvedev among others.

The demonstrations were sparked by a documentary fronted by Navalny.

Mr. Putin first became president after Boris Yeltsin sensationally resigned on New Year’s Eve 1999. At the end of his second term in 2008 he handed power to his protege Mr. Medvedev.

Mr. Putin then served a term as prime minister — although few doubted who was really in charge — and returned as president in 2012.

If he extends his rule to 2024, Mr. Putin will have led Russia longer than Leonid Brezhnev, who presided over an era of stagnation from 1964 to 1982 and became the target of derision in his later years.

Some analysts say that after 18 years of leadership — both as president and prime minister — Putin fatigue may be spreading across the country.

Many Russians say they would vote for Mr. Putin simply because they do not see an alternative, given the former KGB officer’s chokehold on domestic politics.

“So far he is the only one on the horizon,” Sergei Inshakov, a 36-year-old part-time taxi driver and former professional handball player, told AFP.

“It will be better, more dependable for everyone this way.”

With the result of the election a foregone conclusion, turnout could be low, harming the Kremlin’s hopes for a clear mandate, observers say.

According to a poll conducted by the independent Levada Centre pollster last month, just 58% of respondents said they would vote, down from 75% in December 2007.

Mr. Putin’s spokesman Dmitry Peskov said this week that those figures came ahead of the start of a political campaign and would grow.

Many expect Kseniya Sobchak, a 36-year-old glamorous former host of a television reality show and daughter of Mr. Putin’s former mentor, will likely be allowed to run, rekindling some public interest in the election.

But what comes after Mr. Putin’s expected reelection and later, after his new term ends in 2024, is the bigger question, analysts say.

“The main intrigue is, what will happen after 2018, how the configuration of power will be changing,” Tatyana Stanovaya, a Paris-based analyst for the Centre of Political Technologies in Moscow, told AFP.

Speculation has swirled over the past weeks that the Kremlin may be considering changes to the constitution or a new job for Mr. Putin in an effort to extend his grip on power beyond 2024.

“The main task for the Kremlin is to adapt the regime to Putin’s future status — be it an extension of presidential powers or the creation of a new post,” said Ms. Stanovaya. — AFP

GDP, inflation outlook of select Asia-Pacific economies

INFLATION could overshoot the central bank’s target range in 2018 on the back of higher taxes and rising global crude prices, which could prompt the monetary authority to raise rates by as many as four times next year, analysts at Nomura Global Research said. Read the full story.
Nomura flags rising 2018 lending rates

Nation at a Glance — (12/08/17)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

How to answer killer job interview questions

I’m 29 and looking for a job, after being laid off by a bankrupt company. This week, I was totally disappointed when a hiring manager asked me several difficult questions, which I believe are irrelevant to a supervisorial post that I’m applying for. One question that plastered me was this —  “Why do kamikaze pilots wear helmets when they are supposed to die anyway?” What’s happening now to the job market? — Being Tricked.

Why do golfers have to ask a fellow golfer: “Did you lose the ball?” or “Did you find it yet?” when you’re still out in the rough trying to look for it? What do they think you’re doing out there — checking on the fire ants or something? Why do people ask a motorist who’s trying to dig out of a sink hole that obvious question — “Are you stuck?”

If you’re a motorist, you’ll feel like answering: “No, my car died, and I want to give it a decent burial.” Or, while changing a flat tire on a rainy night beside a busy road, why is one asked, “Have you got a flat tire?” Then, you may feel like replying: “Of course, not! I always rotate my tires at night on a busy road, and particularly, when it’s raining.”

And so, asking irrelevant questions is not a monopoly of hiring managers. People tend to ask those questions, sometimes as a “normal” opening statement to help establish rapport, sympathy or for whatever its worth. If you respond positively, the one asking questions may offer help.

In your case, much depends on the timing when those killer questions are asked. Usually, an experienced and self-respecting employment manager would ask such difficult questions only after an applicant has already been put at ease. In the first few minutes of a job interview, the manager or his deputy must be amiable and friendly so that the applicants feel relaxed.

The sooner that an applicant has displayed his confidence, then those killer job interview questions may come, including those questions that you feel are immaterial.

Setting aside the timing, what prods some employers to ask those questions, anyway? The Internet is a repository of tough interview questions. There are even sites offering the best answers to those questions. But few of them explain why employers ask those questions.

In our context here in the Philippines, there are some wannabe technology companies that are trying to ape Microsoft and Google to win the war on talent. Remember that employers still rule the job market here. Take it or leave it. That’s why people and organizations often display a toxic style when conducting job interviews.

In your case, unless you’re applying for a job in a similar technology company, it’s difficult to understand why those questions are being asked in the first place. But let me tell you, asking those tough questions is one thing, but giving the right answers is also another thing. They may have the most difficult questions, but many of them don’t mind if you give the wrong answers as you’re normally assessed by how you react to those questions.

I’m not exactly sure what happened to you, but there are hiring managers out there who would conduct stress interviews to approximate situations that are actually happening in their organizations. And so, how would you save a “doomed interview?”

William Poundstone, author of Are You Smart Enough to Work at Google (2012) and How Would You Move Mount Fuji? (2004) offers this advice: “If you’re stumped, you’re stumped, and it’s no consolation that some may find the question easy. There is, however, an art to salvaging an ill-fated response. I’m not saying you can fake your way through these kinds of interview questions. I am saying it’s better interview etiquette to keep trying to answer the question until the interviewer cuts you off. Interviewers ought to know that innovation takes persistence, intuition, and luck. You can at least show you got the persistence part covered.”

In addition to what’s being offered by Poundstone, you may feel like getting back at those irrelevant questions, here’s my advice to you. You won’t lose anything if you diplomatically ask the hiring manager the following equally difficult questions. What’s the reason for the vacancy? Why doesn’t your management promote someone from within? Do you have a succession plan? What is the turnover rate of this company?

What’s the management style of my prospective boss? I read the company’s mission statement, tell me — what’s the meaning of “excellence in service is our creed?” Can you please give me a concrete example? What’s the plan of the company to become the number one player in the industry? If you don’t mind, how long have you been working for this company? What motivates you to stay long in this company?

With those intelligent questions, I’m almost sure you can turn the tide, and you can possibly get the next chance of being interviewed by the next-ranking hiring manager. Keep your fingers crossed. Whatever happens, “NO” should mean “next opportunity” with another prospective employer who can possibly give you another kind of stressful job interview.

elbonomics@gmail.com

How PSEi member stocks performed — December 7, 2017

Here’s a quick glance at how PSEi stocks fared on Thursday, December 7, 2017.

Duterte mulls ‘mass arrest’ of communist rebels

 

President Rodrigo R. Duterte on Wednesday, Dec. 6, said that he will soon order the mass arrest of the communist rebels.

“For those who are out temporarily out, you just maybe zero in now, because any day, I will order for their mass arrest,” Mr. Duterte said during his speech before newly-appointed generals and flag officers.

Mr. Duterte made the remarks a day after he declared the Communist Party of the Philippines (CPP) and the New People’s Army (NPA) as an identified terrorist organization.

Wala akong magawa eh. Ginusto ninyo. I’m addressing them to the TV, ginusto ninyo eh. I gave too much too soon. (You left me with no choice. You asked for it. I’m addressing [the communists] on TV: you asked for it)… You know, I released almost about 32 [political prisoners],” he added.

Mr. Duterte also made mention of NDF consultants Benito and Wilma Tiamzon who were freed by authorities upon the order of the chief executive to participate in the peace talks.

On Nov. 23, Mr. Duterte has signed Proclamation 360 terminating the peace negotiations between the government and the CPP-NDF-NPA.

Following the termination of talks, Mr. Duterte has warned communist leaders who have been released from jail in 2016 to surrender to the government or face “punitive actions”.

“I have ordered release of about 30, 40 communist leaders from Muntinlupa. Now, I will consider the movement of the Communist Party of the Philippines as a terrorist group. I am ordering those I have released temporarily to surrender or face again punitive actions,” he said during a Nov. 24 speech in Bulacan.

“You have to go back where you belong. I released you because I thought it might help you. Eh kung hindi makatulong then you are undercutting me before the eyes of the Filipino people, you must be joking. You must be joking because I will go after you and I do not really care whatever happens thereafter,” he added.

Infor to expand PHL footprint as it doubles down on AI

Enterprise software provider Infor is keen on growing its footprint in the Philippines as it ramps up its global strategy on cloud computing and artificial intelligence.

Soma Somasundaram, Infor’s executive vice president of global product development, said the company is actively looking for a new office space in addition to its Taguig office to house its growing workforce.     

Infor_Soma Somasundaram
Soma Somasundaram —
Photo: Infor

“[The Philippines] is a key location for us. We have a lot of technical expertise here. Two-thirds of the employee population here works on products. We actually have innovations coming out of this location,” Mr. Somasundaram said in an interview with BusinessWorld at Infor’s office in Bonifacio Global City, Taguig.  

Mr. Somasundaram, who manages the rollout of Infor’s suite of business applications, said the company’s workforce in the country “more than doubled in the last four years” as it hired more engineers to meet the company’s goal to expand into more vertical industries and accelerate the company’s cloud push.

“We are already running out of space. We need an additional office location within the next six months because we are hiring very, very aggressively,” he said, adding that the company adds 200 to 300 new employees every year.

Infor is beefing up its efforts to augment its cloud-based business applications to stay ahead of the digital curve, with a key focus on artificial intelligence (AI). In July, it launched Coleman, an AI platform that uses machine learning to improve processes such as inventory management, transportation routing, and predictive maintenance.

“Coleman is a digital assistant, much like Amazon Alexa or Google Home, designed for enterprises. You can ask questions like, ‘Tell me more about this particular product…’ and Coleman will pull up the data and show you things like, ‘Here’s how your product performed over the last four quarters’ or ‘Here’s how much inventory you have’”, Mr. Somasundaram said.

Infor is leveraging machine learning — a subset of AI that uses algorithms to analyze a massive amount of data, recognize patterns among the data, and make a prediction — to allow Coleman automate jobs and make AI-driven recommendations to enable users to make smarter business decisions.

“The days have gone when people fill out forms and somebody will key in the data in a computer. User experience now is much more intuitive. We say the best user experience is no user experience at all,” he said. 

Infor is just one of the many companies betting big on the promises of AI. Cloud giant AWS, a partner of Infor, announced during its re:Invent conference in early December a wide array of AI-powered cloud solutions.  

It’s a trend that will keep going over the next few years. According to market research firm International Data Corp. (IDC), global spending on cognitive and AI solutions will continue to see significant corporate investment over the next several years, achieving a compound annual growth rate (CAGR) of 54.4% through 2020 when revenues will be more than $46 billion.

“Intelligent applications based on cognitive computing, artificial intelligence, and deep learning are the next wave of technology transforming how consumers and enterprises work, learn, and play,” David Schubmehl, research director, Cognitive Systems and Content Analytics at IDC, said in IDC’s Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide.

“These applications are being developed and implemented on cognitive/AI software platforms that offer the tools and capabilities to provide predictions, recommendations, and intelligent assistance through the use of cognitive systems, machine learning, and artificial intelligence. Cognitive/AI systems are quickly becoming a key part of IT infrastructure and all enterprises need to understand and plan for the adoption and use of these technologies in their organizations,” he was quoted as saying in the report.

AI: THREAT OR ENABLER?

While AI is being heralded as the key to digital transformation, its integration in some industries is seen as a threat to jobs. News of robots increasingly taking over professions in healthcare, human resources and investment banking cast doubts on the impact of AI breakthroughs.

Infor’s Mr. Somasundaram, however, dismissed these claims and pointed out the unwarranted hype surrounding AI. Robots, he said, should be viewed as enablers, not as threats.

To prove his point, he cited one of Infor’s award-winning services, Infor Team Dynamics, which combines AI, in this case, Coleman, and Infor’s predictive behavioral analytics tool, Infor Talent Science, to streamline recruitment process. This AI-driven hiring tool uses large quantities of behavioral and performance data to predict who will be a company’s high performers, who will stay on the job longer, and who is most likely to receive a promotion. This service automates the process of candidate selection, succession planning, and development.

“My view is, worldwide, human talent is on the rise. People don’t want to do mundane work anymore. They want to be challenged, they want to pushed. I believe that human beings should be doing higher value work. I think by replacing mundane work and getting people to do more value work is actually an exciting thing,” Mr. Somasundaram said.  — Mira B. Gloria

Gov’t firms up dirty money reporting

THE ANTI-MONEY LAUNDERING Council (AMLC) has released new rules requiring banks and other covered firms to submit reports and alerts through the regulator’s online system within five days from its discovery.

In a statement, the state financial intelligence unit announced the adoption of the AMLC registration and reporting guidelines (ARRG) for financial institutions that will digitize submissions of alerts, analysis, investigation, and escalation of reports to the regulator.

The AMLC is tasked to track, investigate and recover ill-gotten wealth and combat terrorist financing.

The changes are outlined in Resolution No. 107, which takes off from the revised implementing rules finalized in 2016 and requires covered institutions to submit covered transaction reports (CTR) and suspicious transaction reports (STR) within five to 10 days from occurrence or discovery of suspected deals or incidents.

As a rule, covered entities must report to the AMLC any fund transfers amounting to more than P500,000 in a day. Suspicious transactions are those that appear out-of-pattern or unjustifiable compared to a person’s financial position, which may be taken as a potential case of unexplained wealth from illicit sources.

Under the ARRG, all reporting institutions are required to upload reports through AMLC’s online system, after logging on using unique 18-digit numbers assigned upon registration.

Covered firms should also put in place a STR chain spelling out the process of alerts, analysis and investigation that would determine whether a transaction would warrant being brought to the AMLC’s attention.

“The submission of CTRs beyond 12:01 a.m. of the day following the fifth working day from occurrence of the transaction shall be considered as non-submission of CTRs, and may be subject to appropriate administrative sanction,” the watchdog said.

The new platform also provides for the uploading of know-your-customer documents on the AMLC portal which may be used in tracing potential crimes such as kidnapping, drug trafficking or terrorist financing as the source of questioned wealth.

A separate facility will be created for casinos, the AMLC said, following the enactment of Republic Act No. 10927 last July. Casinos must regularly report single cash transactions worth more than P5 million as well as suspicious transactions to the AMLC.

“[T]he adoption of the ARRG should strengthen the tools available to the AMLC in its fight against money laundering and terrorism financing,” Executive Director Mel Georgie B. Racela said in the statement, noting that the new system will accommodate a bigger number of reported transactions. — Melissa Luz T. Lopez

State infrastructure expenditures, other capital outlays rise in October

GOVERNMENT SPENDING on infrastructure and other capital outlays grew by double-digit pace at the start of the fourth quarter on road works, purchase of transport equipment and rail extension projects, as agencies ramped up disbursements ahead of the year-end expiry of allotments.

An excerpt of a disbursement assessment report which the Department of Budget and Management (DBM) released to journalists yesterday showed infrastructure and other capital expenditures growing 17.8% to P51.5 billion in October from the P43.7 billion recorded in the same month last year.

At the same time, such expenditures slid by four percent from the P53.6 billion the government spent in September.

The Budget department said the increase was due to public works projects like road repair, upgrading and widening, flood control and rehabilitation or improvement of dike systems by the Department of Public Works and Highways (DPWH); acquisition of transport and other equipment under the Philippine National Police’s (PNP) Capability Enhancement Program; payment for various communication, navigational and air traffic management system projects; as well as consultancy and civil works for the Transportation department’s Light Rail Transit Lines 1 and 2 extension projects.

The 10 months to October saw infrastructure and other capital outlays increase by 11.8% to P442.7 billion from P395.8 billion in the same period in 2016.

This is equivalent to 80.58% of the P549.36-billion infrastructure and capital outlays programmed for this year.

Sought for comment, DBM Undersecretary Laura B. Pascua said in a text message: “The 1 yr validity of obligation appropriations should have guided the agencies for the whole year, and that’s why we saw continuous double-digit growth in infra for the whole year.”

The DBM attributed the increase in year-to-date expenditures to the implementation of the DPWH’s road infrastructure program, the Armed Forces of the Philippines’ (AFP) modernization program, the PNP’s capability enhancement program, repair and rehabilitation of schools under the Department of Education (DepEd) as well as of state universities and colleges, and the Health department’s acquisition of medical facilities and equipment.

The Budget department said it expects state expenditures to pick up further in the year’s last two months.

“Line agencies have been expediting the requests for the release of their allotments, as well as obligating these funds since the 2017 appropriations are valid only until Dec. 31 this year,” the report read.

As of October, the DBM has released P3.018 trillion, or 90.1% of the P3.35-trillion budget for 2017, according to a Status of Allotment Releases.

This means the government had some P332 billion yet to be released to agencies for November and December.

The DBM said that based on a preliminary report, about P137.5 billion worth of allotments were released as of the last week of November.

“The balances from agency-specific budgets meanwhile include mainly the requirements for the Basic Educational Facilities Fund (P73.4 billion), creation and filling up of positions in the DepEd (P33.9 billion) and AFP Modernization Program (P20.0 billion),” the Budget department noted.

“These releases are on top of the releases made earlier this year and could further fan the growth of disbursements in the last two months of 2017,” the report read.

Ms. Pascua noted that the fourth quarter usually sees bigger disbursements from agencies.

“So we expect this trend to continue.” — Elijah Joseph C. Tubayan