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Senator told to face music on drugs

PHILIPPINE STAR/MICHAEL VARCAS

PHILIPPINE Senator Ronald M. dela Rosa should stop trying to skirt responsibility for ex-President Rodrigo R. Duterte’s deadly drug war, a congressman said on Sunday.

“He should really get his facts straight and not just go out screaming conspiracy theories,” Party-list Rep. France L. Castro said in a statement.

Mr. Dela Rosa, who was Mr. Duterte’s national police chief who enforced the war on drugs, on Friday accused the government of President Ferdinand R. Marcos, Jr. of working with “leftists” and “yellows” to pin his predecessor for the deaths of thousands of drug suspects.

“First, he played nonchalant on the issue… When he felt the International Criminal Court heat was increasing, he begged Marcos, Jr. to protect him from the ICC,” she added. “Now he is saying that there is a conspiracy to nail him and former President Rodrigo Duterte and his ilk.”

Mr. Dela Rosa did not immediately reply to a Viber message seeking comment.

The Philippine government won’t stop the ICC from conducting their investigation of Mr. Duterte’s anti-drug campaign, Solicitor-General Menardo I. Guevarra said in July. — Kenneth Christiane L. Basilio

Labor protection pushed

PHILIPPINE STAR/ WALTER BOLLOZOS

A LABOR leader on Sunday urged the Labor department to increase spending on protecting workers’ rights and strengthening trade unions, after the Department of Budget and Management (DBM) said the agency has one of the lowest budget use rates.

“There is a need for more funding in certain areas to better support trade unions and the labor sector,” Federation of Free Workers President Jose Sonny G. Matula told BusinessWorld in a Viber message.

“We request more funding for labor education, particularly to support trade unions and federations in educating workers about their rights and responsibilities,” he added.

The DBM last week said the Labor department is one of the 10 agencies with the lowest spending. — Chloe Mari A. Hufana

La Union eyes higher rice output

NEDA

BAGUIO CITY — La Union expects to boost rice production after the provincial government and National Food Authority (NFA) signed a deal to increase the output of farmers in the province.

La Union Governor Raphaelle Veronica Ortega-David and NFA Administrator Larry Lacson signed a deed of usufruct on Aug. 7 at the Provincial Capitol in San Fernando City, greenlighting the construction of a P200-million rice processing center by the NFA on a two-hectare property owned by the province in Damortis, Santo Tomas town.

La Union is keen to leverage its rice self-sufficiency status as it tries to become the center of agri-tourism in Northern Luzon by 2025 with the construction of the facility, Ms. David said.

The integrated rice processing center will feature state-of-the-art technology such as a modern rice mill, mechanical dryer, 100,000-bag capacity warehouse, generator sets, a three-phase power supply, electronic truck scale and a staff house.

The bidding for the project will start this year, and the construction target is by July 2025. Once completed, the project will be the first NFA-owned rice processing center in the Ilocos region.

Mr. Lacson praised La Union’s rice sufficiency with 152,000 metric tons of rice produced in a year. With a production rate of 4.5 metric tons per hectare, the province also surpasses the national production average of four metric tons per hectare. — Artemio A. Dumlao

Shabu peddler busted in Kidapawan

PHILSTAR FILE PHOTO

COTABATO CITY — Police seized P800,000 worth of crystal meth (shabu) from a suspected trafficker who was entrapped on Friday night in Kidapawan City in Cotabato province.

Brigadier General James E. Gulmatico, director of the Police Regional Office-12, told reporters on Sunday that the 46-year-old suspect, who lives in Digos City, Davao del Sur, had been detained and was awaiting prosecution for drug trafficking.

The suspect was arrested after turning over 115 grams of the illegal drugs to nonuniformed personnel of the Police Regional Drug Enforcement Unit in a clandestine operation in in Kidapawan City. — John Felix M. Unson

Shipping reform bill expected to lower price of goods, DTI says

ICTSI

THE Department of Trade and Industry (DTI) said that the proposed International Maritime Trade Competitiveness Act could result in lower prices once the fall in logistics costs starts reflecting in the price of goods.

Trade Undersecretary Mary Jean T. Pacheco said that the proposed law, when passed, would help remove unnecessary charges being imposed by international shipping lines.

The committee handling the bill has already convened a technical working group, Ms. Pacheco told BusinessWorld on the sidelines of a budget hearing last week.

Asked for an estimate on how much costs should fall, she said: “There are various charges, but if those are going to be removed, that would decrease logistics costs by so much.”

“If the logistics cost comes down, whether import or export, it will definitely (lower prices)… every reduction in the cost will, at the end of the day, lower the prices of goods,” she added.

Under the proposed law, the Maritime Industry Authority will be given the authority to regulate charges imposed by international shipping lines.

“These charges (collected by shipping firms) are what the exporters and importers are saying are highly irregular and excessive. So you could just imagine what will happen if these charges are gone,” she added.

The measure was named a priority by business groups like the American Chamber of Commerce of the Philippines.

“This is one of the most important policy requests by the industries, and we are really hoping that this will be pursued because the President already signed the executive order that removed pass-through fees. Now we also need to address the high international shipping charges,” Ms. Pacheco said.

She said several bills could be consolidated into the final form of the International Maritime Trade Competitiveness Act, including House Bill 10507 filed by Rep. Rufus B. Rodriguez on June 6. — Justine Irish D. Tabile

Customs to track barge, domestic ship cargoes

Containers from the Manila International Container Terminal being offloaded at the CGT.

CONTAINERIZED goods shipped via barge and domestic vessels must now be registered with the Electronic Tracking of Containerized Cargo (E-TRACC) System, the Bureau of Customs (BoC) said. 

Customs Memorandum Order (CMO) No. 09-2024 details the rules for registering cargoes transiting via barge or domestic vessel with E-TRACC.

It also includes the rules for containers entering freeport zones as well as those for export.

This expands CMO 04-2020 and CMO 15-2023, which only covered the inland movement of containerized goods.

Launched in 2020, E-TRACC monitors in real time the movement of containerized goods using a global positioning system (GPS)-enabled tracking device.

The objective is to “generate real time and accurate information and to monitor the movement and location of containers using tracking devices and linking it in real time with the electronic documentation system.”

Containers loaded onto the barge or domestic vessel will only be covered by one booking, according to the bureau.

After the barge or domestic vessel completes its voyage, the authorized representative can immediately book for the transfer of individual containers from the terminal facility to a final destination in a special economic zone, the BoC said, in line with booking procedures set out under CMO 04-2020.

“The import containers shall remain at the terminal facility yard until these laden boxes are booked by their importer or authorized representative. Only booked containers will be sealed with an Electronic Customs Seal and allowed to commence transit to their Special Economic Zone destination.”

Meanwhile, the transfer of containers from the zone to the terminal facility for export must also be booked via the E-TRACC system under CMO 04-2020.

Once at the terminal facility, the customs officer must remove the Electronic Customs Seal before the authorized personnel can book a barge.

“No laden containers shall be allowed to be released/discharged by the terminal facility without the official documents and authorizations from the bureau,” according to the order.

At the transit terminal facility, laden containers with transit cargoes cannot be opened, nor be subjected to a physical examination, it said. Stuffing or stripping of cargoes at the facility are also not allowed.

Ingress and egress of empty containers will only be checked at the transit terminal facility, the BoC added. If there are changes in the mode of travel , a new booking would be required under the E-TRACC system.  

The E-TRACC service provider is tasked with ensuring that the system is updated to monitor the movement of containerized goods, BoC said.

It must also create corridors and routes for transit to and from the Manila South Harbor and Tanza Container Terminal, Inc., and from the latter to the Cavite Economic Zones one and two and vice versa.

Terminal facilities handling barge transfers should provide a suitable office for assigned Customs officers, pay the appropriate fees, and ensure stable internet access.

Export groups have called E-TRACC redundant and an unnecessary expense, as their logistics providers already track cargoes via GPS. — Beatriz Marie D. Cruz

LNG inclusion in green energy auction alongside RE queried

BW FILE PHOTO

By Sheldeen Joy Talavera, Reporter

LIQUEFIED natural gas (LNG) should not be included in the Green Energy Auction Program (GEAP), because it is a fossil fuel, an analyst said.

“While the GEAP is a welcome initiative to increase power supply, including LNG in this auction would be inappropriate,” Noel M. Baga, convenor of think tank Center for Energy Research and Policy, said in an e-mail.

“The (program) is designed to implement the Renewable Portfolio Standard under the Renewable Energy Act, which is applicable only to renewable energy resources. LNG, being a fossil fuel, does not meet this definition,” he added.

Mr. Baga said that regulators should strengthen the competitive selection process (CSP) for all energy sources by establishing “uniform, transparent bidding rules and limit distribution utilities’ ability to tailor bid requirements.”

GEA refers to the competitive process for procuring renewable energy supply, while CSPs are a requirement for distribution utilities to select the lowest-cost electricity supplier.

Mr. Baga said that it is crucial to enhance the regulatory power of the Energy Regulatory Commission over the bidding process, as well as “requiring full cost declaration from energy importers in their bids and minimizing exemptions.”

“The ultimate goal is to promote competition and ensure the least-cost electricity for consumers,” he said.

Sam Reynolds, LNG/gas research lead at the Institute for Energy Economics and Financial Analysis, said that the proposal to include LNG in the auction “is likely meant to open up additional avenues for fossil fuel investment.”

This will also “create opportunities” for LNG projects that “have faced extensive delays,” he said.

Mr. Reynolds likewise said that LNG facilities can still compete for contracts through conventional channels, such as the CSPs.

“Inclusion of LNG in the GEAP could complicate these green energy mechanisms and ultimately jeopardize the country’s transition to cleaner, cheaper renewable electricity,” he said.

The Department of Energy (DoE) announced last month that it will conduct the fourth GEA round in the fourth quarter. The auction involves integrated renewable energy and energy storage systems.

The DoE said it is considering offering LNG capacities due to the “anticipated high entry of renewable energy into the grid resulting from the GEA.”

“A series of studies and simulations on several impacts, such as price, dispatch, contracts, energy and capacity, will be conducted,” it said.

In the last two years, the DoE has conducted two auction rounds, awarding bids amounting to 5,306 megawatts (MW) of renewable energy capacity with commitments to deliver power in the 2024-2026 period.

Some energy companies, such as First Gen Corp. and Meralco PowerGen Corp., welcomed the possible inclusion of LNG in GEA-4.

“We welcome the GEA-4 of the DoE and the possible inclusion of LNG,” First Gen Vice-President Ramon A. Carandang said via Viber.

First Gen has four power plants with over 2,000 MW of capacity that run on natural gas.

Emmanuel V. Rubio, president of MGen, said that the company supports the proposed inclusion of LNG in the auction round.

“It’s a recognition for the need of a balancing energy to smoothen the variability of renewable energy supply. This way, new LNG capacities will also have another channel to offer their output,” he said via Viber.

“This proposal will also determine the full cost of electricity for variable renewable energy and not just the levelized cost which is commonly used but does not consider the full system cost,” he added.

MGen, along with Aboitiz Power Corp. and San Miguel Global Power Holdings Corp., is planning to launch the country’s “first and most expansive” LNG facility in Batangas, with the $3.3-billion landmark agreement announced in March.

Clothing, footwear spending seen growing 10.5% this year

WALDEMAR-UNSPLASH

By Justine Irish D. Tabile, Reporter

CONSUMER spending on clothing and footwear is estimated to grow by 10.5% this year, despite a decline in the second quarter, analysts said.

Brice Dunlop, associate director for consumer and retail at BMI, said that although clothing and footwear are essentials, consumers can “quickly cut back on the item in the short term to make sure their budgets are met.”

 This is in comparison to the two other big components of the average household’s budget, which are food and drink or housing and facilities, “where spending is a lot stickier in the short term.”

 “Consumer spending on clothing and footwear is very price-sensitive, as consumers often always have lower-priced close substitutes available,” Mr. Dunlop told BusinessWorld by phone.

The Philippine Statistics Authority (PSA) reported that the only sub-item under household final consumption expenditure to post negative growth in the second quarter was clothing and footwear, which declined by 4.8%.

“The wide variety of cheaper clothing and footwear retail, combined with inflationary pressures, will have led to the contraction over the second quarter,” Mr. Dunlop said.

“However, we do not believe this weakness will persist over the year. We still hold a positive outlook for the Filipino consumer and forecast household spending on clothing and footwear to grow 10.5% year on year over the year,” he added.

 Accounting for inflation, he estimates the sub-category’s real growth at between 5% and 6% over the year.

“(This will) mostly be driven by the positive outlook for disposable income levels,” he added.

Asked to comment, Bain & Co. partner Yukiko Tsukamoto said that the decline in spending on clothing and footwear is something to watch out for.

 “The decline in clothing and footwear will be an indicator to watch if Philippine consumers are managing their discretionary spending amid inflation,” she said.

 “But other spend data indicates that Philippine consumer spend continues to grow overall,” she added.

According to the PSA, household spending grew 4.6% in the second quarter, slowing from the 5.5% growth in the same quarter in 2023.

The growth was driven by goods and services; transport; and housing, water, electricity, gas and other fuels, it added.

Metro Pacific Agro Ventures weighs meat, eggs, aquaculture expansion

PHILIPPINE STAR/KRIZ JOHN ROSALES

METRO PACIFIC Agro Ventures, Inc. (MPAV) said it is looking to expand into various segments of the protein business like meat, eggs, and aquaculture.

“Part of our core strategy is to look at the Filipino plate… meat, eggs, or aquaculture — All of those are very interesting,” MPAV President and Chief Executive Officer Jovy I. Hernandez said during a briefing in Pasig City last week.

“We continuously want to look at areas where we can implement technology that will increase yield,” he added.

MPAV is the agriculture unit of Metro Pacific Investments Corp. (MPIC).

Mr. Hernandez said any meat expansion will involve managing the risk posed by animal diseases.

“We’re kind of cautious with meat because of the African Swine Fever (ASF) in terms of pork, and with bird flu for chicken,” he said.

He described the egg business as “a very interesting area that we will take a look at.”

MPAV has business interests in vegetable production, coconut processing and export, integrated dairy processing, and ice cream through the Carmen’s Best brand.

Mr. Hernandez said MPAV’s dairy business is expected to be self-sufficient in milk by 2026 following its recent investments.

MPAV recently acquired 100% ownership of Universal Harvester Dairy Farms, Inc. (UHDFI) for over P700 million to support the growth of its dairy business.

UHDFI operates the Bukidnon Milk Co. brand, and is active in the Visayas and Mindanao markets.

MPAV is also expecting Metro Pacific Dairy Farms in Laguna to be operational by the first quarter of 2025.

In 2022, MPIC acquired a controlling stake in The Laguna Creamery, Inc., which owns the brands Carmen’s Best ice cream and Holly’s Milk.

MPIC is one of three key Philippine units of First Pacific, 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 share in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

Sugar import program seen yielding traders small profit

BOC - PUBLIC INFORMATION AND ASSISTANCE DIVISION (BOC-PIAD)

THE Sugar Regulatory Administration (SRA) said importing refined sugar is expected to allow traders to recover their costs and earn a small profit after shipping raw sugar to the US at a loss.

“Given that these traders (who participated in the US export trade) will also be given the chance to import refined sugar, the cost of money and other fees they incurred will probably give them just a little profit to recoup their expenses,” the regulator said in a statement on Sunday.

Last week, the SRA authorized imports of 240,000 metric tons (MT) of refined sugar. About 176,000 MT will fill any supply gaps that may emerge during the milling off season.

About 30 traders in the US export trade bought raw sugar at an average price of P2,700 per bag and obtained a US export price of P1,800 per bag, resulting in a loss of P900 per bag.

“It will take about 15 days to load the US shipments provided we have good weather,” SRA Administrator Pablo Luis S. Azcona said.

He added that another 30 days is needed for the cargo to reach the US.

Under Sugar Order 3, the Philippines allowed the export of 25,300 metric tons of raw sugar to fill its US sugar quota.

The Philippines has until Sept. 30 to fill the US quota.

Participants in the sugar export program will also be able to import refined sugar.

Mr. Azcona said that the Bacolod City government had also eased its truck ban for those carrying sugar cargo for loading. — Adrian H. Halili

How background checks can help prevent employment fraud

IN BRIEF:

In the digital era, background checks are essential to mitigate the financial and security risks associated with employment fraud, including the rise of sophisticated tactics such as deepfake technology.

HR teams are pivotal in creating a culture of proactive compliance, leveraging various industry best practices to increase the precision and speed of background checks while ensuring recruitment processes comply with legal standards.

• Investing in advanced, tech-forward hiring tools can protect organizations from operational and reputational damage, align new talent with company values, and build a secure workforce.

Employment fraud not only takes a financial toll due to the hiring of an ill-suited candidate but also increases the risk of occupational fraud. The events that marked the beginning of the 2020s spurred unprecedented transformation by compelling organizations to accelerate their digital journey and enable remote working and business continuity. While it ushered in a new working world of tech-powered solutions, the accelerated pace of growth also left organizations vulnerable to heightened fraud risk.

According to the Occupational Fraud 2024: A Report to the Nations issued by the Association of Certified Fraud Examiners (ACFE), out of 183 cases documented in the Asia-Pacific region, 12 (6%) of those were from the Philippines. This report analyzes 1,921 real cases of occupational fraud that were investigated between January 2022 and September 2023. However, it should be noted that the Asia-Pacific region reports the highest loss due to the cost of fraud compared to other regions in the study, with losses amounting to $1.2 million, compared to Western Europe which came in second with losses of $1 million.

According to ACFE’s Report to the Nations 2024, 16% of the organizations that fell victim to fraud had chosen to onboard candidates despite the red flags that were raised during the background screening process, illustrating their dire need to hire.

To mitigate such risks, HR departments can lay the groundwork for organizational compliance efforts and cultivate an environment committed to following rules and policies. Through the support of HR personnel, compliance approaches can evolve from being reactive to proactive, enabling businesses to effortlessly integrate new regulations.

REMOTE HIRING AND BACKGROUND CHECKS
During these challenging times, human resource functions find themselves struggling to bridge the talent gap in organizations through remote hiring. However, without the tried-and-tested safety measures such as employee background checks in place, fraudsters exploit the loopholes in the tech-enabled virtual interviews and skill-assessment processes to con organizations into hiring inadequately skilled, unscrupulous, or downright unqualified candidates for important positions through impersonation, proctored interviews, and so forth. The lack of continuous monitoring also results in issues such as multiple employment and compromised employee performance.

In the realm of talent acquisition, HR teams play a pivotal role in ensuring compliance. They must ensure that the recruitment process adheres to employment laws and remains impartial, equitable, and free of discrimination. In an era where employment fraud is escalating, the onboarding process is particularly susceptible to modern fraud tactics, including overstated resumes, the use of deepfakes (artificial intelligence or AI-produced media where someone’s likeness or voice is replaced with another’s) during interviews, the submission of counterfeit documents, and undisclosed criminal histories. As such, HR can act as a safeguard by employing risk mitigation strategies to recruit candidates with verified qualifications and employment records.

THE COST OF OCCUPATIONAL FRAUD
Organizations share confidential information and valuable data with employees based on the trust established during the onboarding process. If the relationship is built on false pretense or with forged documents submitted by the candidate to improve their chances of being recruited, it can prove detrimental to the organization.

All types of fraud are breaches of trust. Occupational fraud is the costliest and most common form of deception that takes place within organizations.

The Report to the Nations 2024, which covered 1,921 cases of occupational fraud in 138 countries, reported losses of more than $3.1 billion incurred by affected companies. Candidates who use fraudulent ways to get hired and submit inauthentic documents during pre-employment background checks are likely to operate with the same mindset during their employment, resulting in increased incidences of occupational fraud.

LONG-TERM REPERCUSSIONS OF EMPLOYMENT FRAUD
A fraudulent candidate presents false information due to the lack of appropriate credentials to secure the position organically. With the advent of technology and remote jobs, fraudsters are creating deepfakes to impersonate qualified professionals and land jobs on their behalf.

Such frauds can hamper overall team productivity, compromise business outcomes, and expose the organization to legal and reputational damage. While employees committing employment fraud stand to lose their jobs when their misdemeanors come to light, the organization incurs long-term reputational damage in the ordeal.

LEVERAGING TECHNOLOGY IN BACKGROUND CHECKS
With the introduction of improved background check processes, HR teams can now utilize industry experience to thoroughly scrutinize candidates’ resumes, documents, references, academic qualifications, and professional experience— all by one specialist. Automated HR compliance solutions can reduce the inaccuracies associated with manual background checks and offer faster processing times compared to traditional methods.

This ensures that the hired candidates meet the company’s requirements and adhere to its policies. While the primary objective of background checks is to detect fraud, they can also serve to assess cultural and value alignment, assisting HR in selecting candidates who resonate with the company’s values.

Employment fraud, like every other scam, is difficult to avoid. However, occurrences can be considerably reduced by implementing innovative solutions offered by employee background verification companies.

Organizations can help prevent the hiring of unqualified professionals by investing in tech-forward tools for background verification, leveraging data and cutting-edge innovations like face-matching and geo-tagging to address the loopholes in the employee verification process in a timely and cost-effective manner. Preemptive measures such as employee background checks can help reduce instances of fraud.

SAFEGUARDING THE FUTURE OF WORK
The importance of comprehensive background checks in the modern workplace cannot be overstated. As organizations navigate the complexities of a digitalized employment landscape, the need for robust verification processes becomes increasingly critical to prevent employment fraud and its associated costs.

Advanced tools that harness centralized viewing are not only streamlining the background check process but are also enhancing the accuracy and integrity of hiring decisions. In addition, companies can explore engaging with third-party professionals with an extensive track record in fraud and integrity services. These measures are instrumental in building a trustworthy workforce that upholds the values and standards of the organization.

Ultimately, by investing in and prioritizing thorough background checks as well as fostering a culture of compliance and ethical hiring, companies can protect themselves from the financial, operational, and reputational damage caused by employment fraud, ensuring a secure and prosperous future for their business and employees alike.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.

 

Roderick M. Vega is the forensic and integrity services leader of SGV & Co.

Philippines makes Olympic history; Cignal broadcasts global triumph

THE PHILIPPINES delivered a stellar performance at the Olympic Games. Led by the nation’s “Golden Boy,” Carlos Yulo, Filipino athletes showcased exceptional talent and determination, making the Philippines one of the leading Asian countries in the recently concluded Olympics.

Mr. Yulo captured the hearts of millions with his remarkable achievements. Having secured two gold medals, his success has inspired countless Filipinos to pursue their athletic dreams.

Cignal TV, the country’s leading sports content provider, played a key role in enabling Filipinos worldwide to witness these historic moments. As the official broadcaster of the Olympic Games in the Philippines, Cignal brought the excitement and drama of the competition across the nation and beyond. Through its extensive reach and innovative technology, Cignal ensured that every passionate sports fan could cheer for their countrymen and experience the thrill of the competition.

“Thank you Cignal for bringing the our games, you shown to the whole country our fight, competitions and our training camps,” said Mr. Yulo.

“We are glad that we were able to deliver this historic event and enrich the lives of Filipinos,” said Cignal TV President and Chief Executive Officer, Jane Jimenez-Basas. “We will continue to do our part to foster a sense of national pride through sports,” she added.