Facebook Instagram Linkedin X Youtube
Home Blog Page 13754

China’s $2 trillion of shadow lending turns focus on smaller banks

REGIONAL BANKS in China’s rust-belt provinces are driving the rapid expansion of shadow banking in the country, fueling a web of informal lending that poses wider risks to the financial system, according to a study by UBS Group AG.

Smaller rust-belt banks like Bank of Tangshan Co. and Baoshang Bank have been using products such as trust beneficiary rights and directional asset-management plans to hide the true state of their bad  loans and circumvent lending restrictions, the study by analyst Jason Bedford said.

Others have been using the shadow loan instruments to diversify away from lending in their struggling home provinces, exposing themselves to a much wider spectrum of Chinese corporate risk in the event of a default, according to the report.

By analyzing 237 Chinese banks, many of them small and unlisted regional lenders, Bedford casts a new spotlight on underground financing and the risks it poses to the nation’s $35 trillion banking industry.

Shadow loans grew almost 15% to 14.1 trillion yuan ($2.3 trillion) by December from a year earlier, equal to about 19% of economic output, he estimates.

“This is a sleeper issue,” Bedford wrote. “The remarkable level of concentration in regional banks in rust-belt region banks, combined with evidence that these assets are increasingly being used to roll over loans to existing borrowers as well as being swapped between banks without a clear transfer of risk are alarming.”

Accounting for this financing, Chinese banks’ nonperforming loans could be three times higher than the official published level, he said.

By recording such lending under “investment receivables” rather than “loans” on their financial statements, banks were able to disguise what is in effect lending, to get around regulatory lending curbs or heavy reliance on wholesale funding. Such financial engineering also enabled some lenders to overstate their capital adequacy ratios, understate nonperforming loans and reduce provision charges.

Authorities have renewed their campaign against financial leverage since the beginning of April to rein in risks associated with China’s $28 trillion debt pile, with a focus on unraveling interconnectedness among institutions and curbing shadow financing.

Signs have emerged in recent months that smaller banks have been harder hit by the campaign and their shares have underperformed as a result.

Banks with high levels of shadow loans would be most exposed to any drastic regulatory changes that could lead to a surge in bad-debt recognition. The transfer of shadow credit into formal credit could cause borrowers to breach loan covenants and single borrower limits, eventually leading to “a significant recapitalization of a large swath of the banking sector,” Bedford wrote.

To be sure, the analyst isn’t expecting any sudden changes. He’s of the view that regulation combined with economic reforms, particularly of state-owned enterprises, and continued deleveraging are needed to reduce risks.

In that light, investors should be wary of banks with “material” shadow loan exposure, Bedford said. UBS recommends investors buy shares of Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. Shadow loans at both firms accounted for less than 1% of total assets at the end of 2016, according to Bedford’s report.

ASSET QUALITY
Bank of Tangshan is an unlisted lender in the struggling northeast city of the same name, which produces more steel than any other city around the world. The firm’s shadow loans grew 86% last year to a size equal to 308% of its formal book, the highest of any bank in China, according to Bedford’s report.

Still, the bank reported a bad-loan ratio of just 0.05% last year, the lowest of any bank in UBS’ analysis, exemplifying the “distortion” shadow loan books create in assessing asset quality, Bedford said. Bank of Tangshan representatives didn’t respond to an email seeking comment.

Shadow loans can be used to circumvent regulations capping loans to a single borrower at 10% of a bank’s assets, or 15% in the case of a group company and its subsidiaries, according to Bedford. For example, he said that Baoshang Bank, an Inner Mongolia lender, has extended shadow loans equivalent to 126% of its net assets to one borrower.

Calls to Baoshang Bank’s general lines and board office in Baotou city weren’t answered.

CONTAGION RISK
Shadow-loan risk is most prevalent in China’s rust belt — the once-proud steel and metal-producing provinces in the country’s northeast, which have declined in growth and importance as the government shifts its economic focus away from industrial output to the higher-end consumer and services industries.

To jump-start declining profits, some rust-belt banks have turned to the informal banking sector to help them get around rules restricting them to lending just in their home provinces — by investing in loans extended by banks in more prosperous regions to higher-quality borrowers. Questions have arisen in the event of a default as to which bank bears the credit risk associated with the soured loan, leading to various court disputes, Bedford wrote.

“Shadow loans pose potential contagion risk between banks,” he said. — Bloomberg

How PSEi member stocks performed — August 30, 2017

Here’s a quick glance at how PSEi stocks fared on Wednesday, August 30, 2017.

Local stocks rebound as North Korea fears ease

LOCAL EQUITIES bounced back on Wednesday as investor concerns over ongoing geopolitical tensions with Japan, North Korea, and the US eased. 

The bellwether Philippine Stock Exchange index rose 0.10% or 8.34 points to close at 7,956.73 yesterday, slightly recovering from Tuesday’s drop following North Korea’s launching of a missile over Japan.

The broader all-shares index likewise inched up by 0.02% or 1.32 points to 4,722.

“Stocks shrugged off the North Korean missile launch and regained their footing to close higher on Wednesday,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

“I think what happened [on Tuesday] was a knee-jerk reaction because it surprised everyone even the big developed countries like the US. But at the end of the day it was nothing that created a panic or a crisis… The market accepted the situation and now is back to its sideways behavior,” Summit Securities, Inc. President Harry G. Liu said in a phone interview.

“So now the market is just waiting for a fundamental catalyst that will kick up 8,100 which I think in due time it’s more an upside market before the year ends,” Mr. Liu said.

Major US stock indexes also ended higher after recovering from steep early losses triggered by fears that hostilities in the Korean Peninsula could escalate.

Overnight, the Dow Jones Industrial Average rose 56.97 points or 0.26% to 21,865.37; the S&P 500 gained 2.06 points or 0.08% to 2,446.3 and the Nasdaq Composite added 18.87 points or 0.3% to 6,301.89.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose half a percent, taking cue from Wall Street’s higher close, as concerns about North Korea and Japan ebbed.

“Asian bourses may see some further stabilization if not recovery today as the risk-off concerns fade a little,” OCBC Bank said in a note.

Back home, four sectoral counters ended in the green, led by services, which booked an increase of 0.98% or 16.79 points to 1,714.89. The mining and oil sub-index followed, climbing 0.26% or 34.24 points to 13,152.79; holding firms rose 0.18% or 14.67 points to 7,852.15; and industrials gained 0.05% or 6.28 points to close at 11,025.13.

On the other hand, the financials counter declined by 0.47% or 9.37 points to 1,978.42 and property dropped 0.14% or 5.31 points to 3,728.29.

Value turnover stood at P5.87 billion yesterday, with 1.29 billion issues changing hands, down from Tuesday’s P6.87 billion.

“Volume was low moving into a US Labor Day Holiday,” Regina Capital’s Mr. Limlingan said.

Decliners outnumbered advancers, 101 to 91, while 53 names were unchanged.

Net foreign selling widened to P55.91 million on Wednesday from the P19.37 million recorded the previous day. — Arra B. Francia with Reuters

The benefits of working for a small company

According to our data, Filipino applicants—millennials included—aim for big, renowned companies. Salary plays a part here, but it is also the prestige of an established corporation (versus the relatively unknown name of a small or medium‑sized enterprise) that lures young ones in. Who wouldn’t want to soak up the honor?

But we digress.

The up‑and‑coming generation has so much more to achieve when employed in the sector that’s quickly rising to be the up‑and‑coming lifeblood of the Philippine economy. The small fish that is the lone millennial looking for a job will considerably do well in a small pond rather than gambling it all in a mad dash to get to the big, open sea. Here’s why:

More opportunity for growth

With the small size of SMEs, it is only natural that the company will try to utilize the talents of all its employees. That means more opportunities for professional growth for millennials. They can learn a plethora of new skills from seasoned supervisors and can also expect to handle more and more responsibility as their time with the company lengthens.

Also, once the company grows, the employees who remain can have a larger chance to be promoted to positions of leadership, eventually making them supervisors of their own teams.

A smaller team means more leeway

For some, more responsibility might mean more chances to mess up, but for the risky and courageous generational cohort (a.k.a. the millennials) this means more chances of trying out the techniques and tricks that they learned while at school or while interning, and also an opportunity to learn new skills.

In big corporations where the hierarchy is clearly defined and not easily scalable, new innovative ideas are often ignored at best or scorned at worst. The decision-making ultimately rests in the hands of seasoned, but sometimes out-of-touch, supervisors that are so far up the corporate food chain. Not wanting to upset an established work model, new business ideas ultimately languish and the millennial employee, discouraged and sometimes disheartened too, stews in the background.

A chance to do something worthwhile

Also, as the most socially conscious generation, millennials have this urge to do something worthwhile, to find an opportunity to do meaningful work. While it’s true that most of them immediately tend to act with their feet, leaving a company when they’re not happy anymore or they feel that they and their talents lie unappreciated, it is also a known fact that Millennials stick to their guns in a manner of speaking.

Working with SMEs will give them just that: a shot at creating something truly unique and totally new, whether this be a product or a campaign. Also, since SMEs are still on the process of developing a company culture, millennials can influence this creation to be more in line with their ideals and stand on pressing social issues.

Small companies tend to be more flexible

With a small staff, rules and regulations tend to be fewer when it comes to SMEs. There’s much room for flexibility between the company and its millennial employees. Those who want to pursue further studies can do so, those who prefer to work from home can probably negotiate this especially if the company is fully digital, and most importantly, with the loose hierarchy, millennials will be inclined to be more forward with their ideas and suggestions.

There will be real mentoring

While mentoring regularly happens in big corporations, it tends to be impersonal and usually involves several mentees and one mentor. When it comes to SMEs, mentoring is more personal in nature because of the size of the company and the necessity. The mentoring process also tends to be more of a two-way street, in which the mentor and the mentee exchange ideas and new learnings with each other.

Mentoring sessions in big companies tend to be more of a “sage on the stage” type while those in SMEs are more of the “guide on the side” variety. While those two are both with merit, the mentee ultimately learns more on the latter.

The vast ocean is inviting, yes, but at the same time, its vastness might be its biggest flaw. Predators abound, distances seem immeasurable, and prey seems to be getting fewer and fewer. On the other hand, it would look really nice on a fish’s resume and perhaps, the almostߛDarwinian competition is what the little fish needs to grow. Or maybe not.

For millennials wanting to see their marks, to prove their skills and their worth, ultimately, a small company is the place to start. After all, the smaller the body of water, the bigger the ripple of a single fish will be.

About JobStreet.com

JobStreet.com is a leading online job board presently covering the employment markets in Malaysia, Singapore, Hong Kong, Thailand, the Philippines, Indonesia and Vietnam. JobStreet.com currently services over 230,000 corporate hirers and over 15 million jobseekers in its database. To view jobs, click this link.

For more information about this article, or to schedule an interview with JobStreet.com Philippines, please call Mark Nichol Turija, Content Marketing Specialist, at 286-6222.

Agnes Locsin: Like no other

Continue

Project bonds not needed ‘for now’

By Melissa Luz T. Lopez
Senior Reporter

THE GOVERNMENT is not keen on offering bonds to fund big-ticket infrastructure projects, National Treasurer Rosalia V. De Leon said yesterday, noting that the country continues to have enough money to support public spending plans.

National Treasurer-Rosalia de Leon
National Treasurer Rosalia V. De Leon — BW FILE PHOTO

“For now, we are not really looking into project bonds because these are really focused on financing for a particular project… That’s something that we can explore, but the cost structures would have to be evaluated to ensure that these are cost-effective [compared] to what we are getting from our general issuances,” Ms. De Leon said during a webinar hosted by BPI Capital Corp.

The government generates fresh funds from the sale of Treasury bills and bonds every other week, as part of the P727.64-billion borrowing plan for 2017.

Ms. De Leon assured investors that the Philippines is in “a position of strength” with ample resources and healthy debt profile to support the government’s P8.44-trillion 2017-2022 infrastructure spending plan under the “Build, Build, Build” initiative of the administration of President Rodrigo R. Duterte.

The fiscal balance is expected to be maintained with the budget deficit projected to remain within three percent of gross domestic product (GDP) annually despite bigger spending, Ms. De Leon added, as the Treasury’s fund-raising and fresh revenues from tax reforms provide fresh liquidity.

“The financing comes as a secondary issue because what’s important is to get these projects off the ground,” Ms. De Leon said.

“Fortunately for us, we have the resources and the fiscal wherewithal to be able to build, build, build, so it’s not an issue for us anymore.”

The government will tap some $1.81 billion in official development assistance (ODA) in 2018 alone, Ms. De Leon said, noting that loans secured via Chinese and Japanese ODA come with below-market interest rates, hence, providing more “cost-efficient” funding sources.

BPI Executive Vice-President Dennis Gabriel M. Montecillo said banks will not necessarily run out of opportunities to take part in the infrastructure boom despite the government’s preference for foreign grants, saying that they can still lend to suppliers and real estate developers apart from private construction firms.

Ferdinand A. Pecson, executive director of the Public-Private Partnership (PPP) Center, added that PPPs still have a role to play in the infrastructure story particularly through operation and maintenance (O&M) contracts, as the government seeks to tap the expertise of companies in running day-to-day work in new facilities.

The O&M contract for Clark International Airport in Pampanga will be the first to be offered to private-sector investors under the Duterte administration’s hybrid PPP model, Mr. Pecson added.

NEW ISSUES
Plans to float specialized debt papers remain on the table as the Bureau of the Treasury readies paperwork in this regard, Ms. De Leon said.

She told reporters on the sidelines of yesterday’s Treasury bill auction that her office has yet to take up with the Department of Budget and Management (DBM) the planned offering of long-term bonds that would raise funds for the multi-year rehabilitation of Marawi City, which is currently experiencing the fourth month of battle between government forces and Islamic State-inspired militants.

“We will be discussing with Secretary (Benjamin E.) Diokno regarding the authority, because we need the authority in terms of where it will be spent,” she explained, adding that the tenor, among other details, is being determined.

Earlier this month, Finance Secretary Carlos G. Dominguez III said he was considering the issuance of P30 billion in “patriotic” bonds to support the recovery of war-torn Marawi.

The DBM had previously said that the government will release at least P15 billion for the city’s rehabilitation in the next two years, on top of the Chinese government’s donation worth P15 million and the Japanese government’s $2 million.

At the same time, Ms. De Leon said the Treasury is also preparing documents for the maiden issuance of panda bonds — yuan-denominated debt papers to be sold to Chinese investors — as the government looks for a “clear market” and opportunity to proceed with the plan.

In April, Mr. Dominguez had said he wants these papers offered by the “third or fourth quarter” this year, worth $200 million and with tenors of three and five years.

The government plans to secure a fifth of its borrowings from foreign sources this year, while 80% will be borrowed from the domestic market in an effort to limit the country’s exposure to external shocks.

PSE further hikes stake in fixed-income exchange

THE PHILIPPINE Stock Exchange, Inc. (PSE) has further increased its stake in the country’s fixed-income bourse with the acquisition of Investment House Association of the Philippines’ (IHAP) shares in the Philippine Dealing Systems Holdings Corp. (PDSHC) for P11.663 million.

PSE
BW FILE PHOTO

The PSE disclosed on Tuesday that it signed a share purchase agreement with IHAP on Aug. 25 to acquire for P320 apiece the latter’s 36,446 shares in PDSHC, equivalent to an additional 0.5831% stake.

The latest tranche brought PSE’s ownership in the fixed-income exchange to a total of 53.36%.

The price is based on PDSHC’s equity value of P2 billion.

A total of P10.72 million will be paid at the closing of the deal, while the remaining P946,303.07 will be held in escrow, according to the disclosure.

The agreement will still be subject to regulatory approvals of the Securities and Exchange Commission and Bangko Sentral ng Pilipinas.

PDSHC owns the Philippine Dealing & Exchange Corp., the Philippine Securities Settlement Corp., and the Philippine Depository & Trust Corp., the country’s sole depository for equities and fixed-income securities.

The acquisition is part of PSE’s long-standing efforts to take over the fixed-income bourse to achieve synergies in the two capital markets.

Last July, the PSE managed to get a majority ownership of the PDSHC after acquiring Whistler Technologies Services, Inc.’s eight percent stake for P160 million.

Prior to the deal with Whistler Technologies, the PSE also inked a deal with the Bankers Association of the Philippines and its affiliate companies to buy their cumulative 23.8% stake for P476.45 million.

The PSE had said in March that the goal was to own up to 67% of the PDSHC. This may include the buyout of other stakeholders led by The Singapore Exchange Ltd. with 20%, San Miguel Corp. and Philippine American Life and General Insurance Co. each with four percent, as well as the Financial Executives Institute of the Philippines Research and Development Foundation and the Development Bank of the Philippines, each with 3.08%, among others.

To proceed with the merger, the PSE has also been told by the SEC to bring down broker ownership in the bourse to 20% from 27.9% currently. Earlier this month, the PSE said it had given 52 inactive trading participants until the end of September to signify their intention to operate or else be declassified. Of these brokers, 14 hold shares in the PSE. Should the trading participants be declassified, broker ownership will be brought down to 23-24%.

The PSE has also announced plans to sell up to 11.5 million common shares out of the unissued portion of its authorized capital stock through a follow-on offering. This move is estimated to further bring down broker ownership to the SEC’s requirement.

PSE shares lost P3 or 1.25% to end P237 each yesterday. — Arra B. Francia

Approved PEZA investment pledges nearly double

THE Philippine Economic Zone Authority (PEZA), which contributes about a third of the country’s total committed investments, registered what it called an “unprecedented performance” as new approvals in the seven months to July reached P132.66 billion, up 89.4% from P70.03 billion in 2016’s comparable period.

“As to number of projects, we have as of July… 363 new projects. This means new ecozones and new industry locators. So we grew by 17.86% compared to last year’s performance,” PEZA Director-General Charito B. Plaza said in a press briefing yesterday at the agency’s main office in Taguig City.

She attributed the improvement to aggressive marketing and promotion efforts, among others. She also cited investors’ sentiment about “a better and more credible government.”

Employment generation as of June, according to the latest available data, hit 1,357,684 new jobs within the economic zones, 6.4% more than the 1,275,842 recorded in the same period last year. The figures represent the comparative periods as of June.

“PEZA usually multiplies this (employment figure) by eight… because we also create indirect employment like drivers, janitors, construction workers, concessionaires… all that will be built to respond to the needs of the workers of the industries and the ecozones,” Ms. Plaza explained.

“So we have 8 million jobs directly and indirectly created.”

Also as of midyear, export revenues generated by the ecozones hit $22.05 billion, up 12.4% from a year ago. “PEZA registers 80% of the total export income of the country,” Ms. Plaza said.

In terms of industrial sectors, ecozone development took the lead with approved investments of P75.41 billion, an increase of 95.2% from P38.64 billion previously.

Manufacturing came next with P21.55 billion, up 26.9% from P16.998 billion a year ago. Of this, electronics and semiconductors accounted for nearly half at P10.97 billion, an increase of 29.6% from P8.46 billion in the same period last year.

In contrast, investments in information technology — largely made up of business process outsourcing (BPO) firms and contact centers — fell by 33.4% to P8.14 billion from P12.22 billion.

“Most of our BPOs and call center locator industries are American companies,” which Ms. Plaza said were awaiting for “a clearer policy” US President Donald Trump on his policy to keep jobs home.

“Nevertheless none of those existing BPOs and call centers pulled out. They stayed and some even took the risk of still expanding by putting up new branches in different parts of the country.”

In the same press conference, Ms. Plaza brought in representatives from a Chinese entity, which is reportedly behind the proposed First Pangasinan Industrial Corp. (FPIC), a 60% Philippine-owned and 40% Taiwanese and Singaporean entity. The company is said to be also urging foreign entities to set up offices in its proposed economic zone in Pangasinan.

“After lengthy deliberation, the PEZA board had resolved to grant a pre-qualification clearance to FPIC’s Philippine-Chinese industrial economic zone,” she said.

Another prospective locator — Chinese entity Xianglu Dragon Group (XDG) — courted controversy after the Taipei Economic Cultural Council issued statements to the Philippine government and to media alleging that its chairman, Chen YouHao, embezzled money from Taiwan and fled to Xiamen, China.

Leonelle M. Infante, the Philippine legal counsel of XDG, denied the allegation.

“To set the record straight, Chairman Chen YouHao’s roots are from Xiamen, China. He had long been a well-respected and successful businessman in China, more than a decade before the Taiwanese government even filed a case against him in the year 2000, instigated by imprisoned Taiwanese President Chen Sui Bien, a ranking member of the current ruling DPP party of Taiwan, who was convicted of corruption,” Ms. Infante said.

“At that time, Chairman Chen was already considered one of the biggest investors in China, when he was forced to flee Taiwan due to political persecution.”

She also denied claims that XDG failed to make tax payments in China, saying that companies under it are among the biggest taxpayers in Xiamen.

“It is not true that the company is losing money. This can be easily proven by the audited financial statements presented to our government agencies,” she said.

“Again, I have to emphasize the facts that the projects in Pangasinan will not borrow any funds from the local Philippine financial institutions,” she said. “All the investment capital will be funded overseas.”

Ms. Plaza said the applicant’s pre-qualification has not yet been submitted to the Office of the President, which will issue the proclamation declaring FPIC as an ecozone qualified to receive government perks. — Victor V. Saulon

Robust growth continues

By Leo Jaymar G. Uy
Senior Researcher

GROWTH in assets of the country’s biggest banks continued to be robust last quarter, fuelled by these lenders’ aggressive loan expansion.

BusinessWorld’s 2nd Quarter Banking Report shows the combined assets of universal and commercial banks (U/KBs) operating in the country growing 13.93% to P14.01 trillion from P12.3 trillion the past year.

The latest asset growth pace is faster than the 13.41% year-on-year increase in the first quarter of this year and quicker than the 6.5% expansion of the country’s gross domestic product (GDP) in the second quarter. GDP, which is the amount of final goods and services produced in the country, measures the country’s economic performance for a period.

Fuelling asset growth in the second quarter of this year was the 18.38% year-on-year increase in bank loans to P7.116 trillion from last year’s P6.011 trillion. Loans comprise around half of the big banks’ assets.

But banks’ ability to absorb losses eased slightly as their median capital adequacy ratio (CAR) went down to 18.45% in the second quarter from 18.66% in the preceding three-month period. Nevertheless, the ratio remains well above the regulatory minimum of 10% set by the Bangko Sentral ng Pilipinas (BSP) as well as the international standard of eight percent. CAR, which is a measure of a bank’s solvency, indicates its ability to absorb losses without having to imperil funds entrusted by depositors.

In terms of profitability, the median return on equity (RoE) of U/KBs improved to 4.7% in the second quarter of this year from 4.27% in the first three months of 2017. RoE measures the amount that shareholders make on every peso invested in a company.

Asset quality edged down somewhat as the non-performing loan (NPL) ratio of the biggest banks increased to 1.74% in the second quarter from the first quarter’s 1.64%. This, as total bank borrowings increased 4.87% on a quarter-on-quarter basis.

The second quarter marks the last three months under the watch of former BSP chief Amando M. Tetangco, Jr., who was succeeded last July by current BSP Governor Nestor A. Espenilla, Jr.

Since 1987, BusinessWorld has been tracking the quarterly performance of the country’s largest lenders based on their published statements of condition.

The newspaper’s quarterly banking report ranks banks in terms of the size of their balance sheets. Apart from asset size, the report provides other key ratios to measure bank performance like capital adequacy, earnings and liquidity — all key components of the CAMELS (capital adequacy-assets-management capability-earnings-liquidity- sensitivity) system used internationally in evaluating a lender’s health.

Duterte: Ombudsman meting ‘selective justice’

By Ian Nicolas P. Cigaral
Reporter

PRESIDENT RODRIGO R. Duterte on Tuesday slammed anew the Office of the Ombudsman for supposedly engaging in “selective justice” as he criticized the way the constitutional body handled the corruption cases filed against several lawmakers.

Duterte: Ombudsman meting ‘selective justice’
Ombudsman Conchita Carpio-Morales is seen in a huddle with senators before the start of a budget hearing on her agency. Ms. Morales also disclosed on Aug. 29 that ‘we already started our fact-finding investigation’ on the Kian delos Santos case. — SENATE PRIB

In his speech before newly appointed government officials in Malacañang, Mr. Duterte said Ombudsman Conchita Carpio-Morales “has mastered the art of selective justice” by slowly acting on complaints against the “friendly” but quickly deciding against “perceived hostilities.”

“The Office of the Ombudsman rightly stresses the importance of due process of law. Yet it cannot act on complaints with the cold neutrality of an impartial tribunal,” Mr. Duterte said, adding that the body failed to perform its constitutional mandate.

“Harsh on some, soft on others even when they all suffer from similar or analogous circumstances….The enemy of the Ombudsman’s friend is the Ombudsman’s enemy too, so it seems. That is how I see it from where I stand,” he added.

To recall, Mr. Duterte earlier blasted Ms. Morales for speaking against his way of fighting narcotics and crime. He also told the Ombudsman to seek clearance from him first before investigating erring cops carrying out his drug war.

But Ms. Morales dismissed Mr. Duterte’s remarks and said the chief executive can’t meddle in the Ombudsman’s affairs. The President later said his statements against Ms. Morales were just a joke.

In his speech yesterday, Mr. Duterte questioned how Ms. Morales handled the corruption charges against senators allegedly involved in the misuse of Priority Development Assistance Fund (PDAF).

He then cited the cases of detained former senators Ramon “Bong” B. Revilla, Jr. and Jose “Jinggoy” E. Estrada as examples of Ms. Morales’s supposed impartiality, noting that some lawmakers who were linked to the same corruption scandal were allowed to post bail while others were not.

He also lamented the Ombudsman’s latest decision to indict Senator Gregorio “Gringo” B. Honasan II for alleged misuse of congressional funds. To recall, the President met with Mr. Honasan in Malacañang last Aug. 16.

“You know, it’s sauce for the goose, sauce for the gander. If you allow a certain person to post bail, there is absolutely no ground — legal or otherwise — na bakit ‘yung iba, hindi mo rin gawin (how come with the others, you’re not doing the same)?” he said.

“Bakit ang Ombudsman matagal na siya diyan, natapos na lang itong si Aquino, why can’t they just wind up the cases against the senators?” he said, referring to former president Benigno S.C. Aquino III. (How come the Ombudsman has been there for a long time, Aquino’s term is over, why can’t they just wind up the cases against the senators?)

In 2015, the Supreme Court (SC) granted former senator Juan F. Ponce-Enrile’s petition for bail after he was detained in connection with the multibillion-peso “pork barrel” scam of 2013.

While plunder is a non-bailable offense, the 91-year-old former senator argued in his bail petition that the prosecution has insufficient evidence, adding he is not a flight risk because of his advanced age and physical weakness.

According to Mr. Duterte, Ms. Morales’s office is also corrupt.

He then advised her to let the remaining months of her incumbency to be “truly reflective of your mandate to do justice to everyone without favor or bias.”

“I can only wish that the Ombudsman would go beyond the friendship bonds and adapt the afore-quoted principle as a governing rule in the performance of its constitutional mandate,” he said.

A retired member of the High Court, Ms. Morales was appointed to a seven-year term on July 25, 2011 following the exit of then-Ombudsman Ma. Merceditas N. Gutierrez on the heels of an impeachment campaign against her by the Aquino camp. She is set to end her term at the anti-graft body in July 2018.

She was appointed by Mr. Aquino, whom she recently indicted for his “liability” in the 2015 manhunt in Mamasapano, Maguindanao that took the lives of 44 police commandos. But Mr. Duterte has belittled this move against his predecessor.

NOT ALLUDING TO SERENO
Still on the topic of corruption, Mr. Duterte yesterday also clarified that he was not referring to SC Justice Ma. Lourdes P.A. Sereno when he hit an unnamed government official’s luxurious travels.

“Si Justice Sereno made insinuations that siya ‘yung itinuturo ko (that I was alluding to her). Actually, none of the above… generic ‘yun.”

“Ako naman, I rely on documents that are given to us here in the Palace. I do not put a premium of truth in it actually,” he added.

In his speech on Aug. 22, Mr. Duterte said he is looking into the expensive trips allegedly made by an official who is not under the Executive branch as he vowed anew to fight corruption.

Responding to Mr. Duterte’s remarks, Ms. Sereno, in a town hall in Cebu City, said: “That’s his revelation. I don’t know who he’s talking of, definitely I don’t feel alluded to.”

“My travels, my security, and vehicle requirements are all regular and above the board public documents — the record will speak for itself and I have not objected to the public release of the same,” she added.

Early this month, the SC granted the request of two groups for documents that will support their impeachment case against the Chief Justice.

The impeachment case, however, will have to be endorsed by a lawmaker to be formally lodged in the House committee on justice for hearing.

Malacañang earlier said Mr. Duterte, with whom Ms. Sereno had been at loggerheads since June last year, is hands off the case.

The complainants’ memorandum flagged several administrative orders by Ms. Sereno, including the appointment of lawyer Brenda Jay Mendoza as chief of the Philippine Mediation Center of the Philippine Judicial Academy, granting foreign travels and allowance to staff of the Office of the Chief Justice, and “long delay” in certain appointments.

Uber back on the road after paying P190-M fine

By Patrizia Paola C. Marcelo

THE LAND Transportation Franchising and Regulatory Board (LTFRB) on Tuesday, Aug. 29, lifted its suspension of the operations of Uber Philippines (Uber Systems, Inc.) after the ride-sharing company paid a fine of P190 million and showed proof of compensation worth P299.24 million to affected drivers/operators.

Uber back on the road after paying P190-M fine
Driver operators outside the Uber main office in Mandaluyong City — REUTERS/DONDI TAWATAO

The LTFRB in an order dated Aug. 25 said Uber must pay a fine of P190 million and ensure financial assistance to its drivers/operators in order for the agency to lift its month-long suspension. This was in response to a manifestation filed by Uber offering to pay a P10-million fine in lieu of the month-long suspension ordered by LTFRB on Aug. 14

COMPENSATION
The regulator in its order also directed Uber to pay its transport network vehicle service (TNVS) operators until the day of resumption of operations. Uber previously said it had already spent around P100 million for the compensation of its over 36,000 active operators/drivers.

LTFRB ordered the suspension of Uber operations due to what the agency said was the company’s violation of its July 26 order directing transport network companies (TNCs) to stop accepting and activating accreditation applications.

Representatives of Uber submitted to LTFRB yesterday a check with an amount of P190 million, as well as a bank transaction certification by Wells Fargo showing financial assistance payments made to TNVS operators from Aug. 15 until yesterday.

LTFRB said the lifting of the suspension of Uber is “subject to further verification of actual receipt by TNVS peer-operators of the amount due to each of them.”

Uber released a statement following the announcement of the lifting of the suspension: “We have complied with the requirements outlined by the LTFRB, and are grateful for the opportunity to serve the Philippines again.”

The company also said operations have resumed as of 5:00 p.m. yesterday.

‘INABILITY’ OF LTFRB
Senator Grace Poe, chair of the Senate Committee on Public Services, said that she will complete a report on the bill on TNVS.

“For the sake of the commuters, I am committed to complete as soon as possible the report on the TNVS bill that is currently undergoing TWG (technical working group) meetings. The TWG meetings aim to thresh out and address all related issues concerning the operation of Uber, Grab and the like,” the senator said in a statement.

Ms. Poe also said the bill aims to prevent another suspension, rooted in what she said in the “inability” of LTFRB to adapt to technology.

“This way, we may avoid the recurrence of a similar suspension affecting the TNVS community, which is rooted (in) the apparent inability of the LTFRB to adjust and adapt to new technology. Based on what happened, it seems that it flexes its discretion as a whimsical regulator just for the sake of imposing regulations,” Ms. Poe said.

Trust in gov’t highest since 2011: survey

By Patricia B. Aquino
Interaksyon

THE PEOPLE’S trust in the government is at its highest since 2011, according to the fifth Philippine Trust Index (PTI), a survey by communications agency EON Group.

duterte
President Rodrigo R. Duterte pictured during the Parade and review held at Camp Aguinaldo last July 01, 2016. — Michael Varcas / Philippine Star

From 40% of respondents saying they trusted the government in 2011, to 58% in 2012, to 50% in 2014 and 2015, trust had grown by 30 percentage points to 80% in 2017. 1,200 Filipinos aged 18 to 65 were surveyed from March to April 2017 — before President Rodrigo R. Duterte declared martial law in Mindanao, and also before the killing of 17-year-old Kian Loyd delos Santos in Caloocan City, with CCTV footage and witnesses revealing that he was supposedly murdered by the police, countering the latter’s initial claims that it was a shootout.

Of government “sub-institutions,” the Office of the President had the highest trust at 82%. In comparison, it had 54% in 2011, during the first year of then President Benigno S.C. Aquino III, and the first year EON conducted a survey.

In the 2017 PTI, the Office of the President was followed by local government units, with a 78% trust rating. The Senate, House of Representatives, Supreme Court, and Regional Trial Courts had the same trust rating of 67%, followed by the Cabinet, with 65%.

LOWEST TRUST FOR OVP
The Office of the Vice-President (OVP) had the lowest trust rating among the government sub-institutions monitored by EON, at 57%.

As for the main institutions EON monitored in each survey, it found that trust was highest in the Church and the academe at 93% for both institutions. It was followed by the government, the media (78%), business (75%), and nongovernmental organizations (59 %).

Government agencies which provided social services were also looked at. Respondents afforded the greatest trust in Philhealth, the Social Security System, the Department of Education, the Technical Education and Skills Development Authority, the Department of Social Welfare and Development, the Department of Health, and Pag-ibig, respectively. On the other end of the spectrum, the lowest trust was given to the National Economic and Development Authority, the Department of Budget and Management, and the Department of Finance, respectively.

According to EON chief innovation officer Mori Rodriguez, speaking at the launch of the PTI on Tuesday at the Maybank Performing Arts Theater in Taguig City, this had to do with the frequency of interactions between the respondents and government agencies.

People could only trust what they know and understand, he added.

Presidential Communications Assistant Secretary Michel Kristian R. Ablan welcomed the results, saying the Office of the President had tried to draw closer to the public by holding daily press briefings and livestreaming Mr. Duterte’s events.

University of the Philippines law student Farah Ali Ghodsinia, who hails from Marawi City, said that Mindanaoans and Muslim Filipinos supported the President because he came from Mindanao and repeatedly talked about his lineage. She believed the government was sincere, and that it was pursuing a “noble goal,” which was peace.

After doing outreach work in Lanao, however, she sensed disquiet among the people who were displaced by the fighting between government troops and the Maute terrorist group.

“Who really is protecting us here? There are a number of groups who say that the air strikes should stop. But then there are also other groups who say that, you know what, wait, this is being done for your safety and protection. So there is this growing sense of confusion which I feel should be dearly addressed,” she said.

She also noted that people were suffering from trauma and needed to hear that the government would not be left behind. Communication between the government and local leaders, tribal leaders, religious leaders, NGOs, and civil society groups on the ground was essential, Ms. Ghodsinia stressed.

“You already have the credibility and the charisma, but you know, further boosting on the delivery of [development promises] will be really essential,” she said.

Mr. Ablan acknowledged her recommendations.

“Of course the bar is set high, and by no means are we going to rest on our laurels. We do recognize that we have to deliver on the… promised programs and everything. Otherwise… the high ratings may fall and they may fall fast,” he said.

Iain Twine, vice-chairman for communications marketing firm Edelman’s Asia-Pacific team, added that the government was in a honeymoon period, which was why it was possible that its trust rating would plummet next year.

EON also found that Filipinos would trust a government that improved their daily lives in concrete ways.

Their satisfaction was based on the Duterte administration’s ability to accomplish the following, in this order:

1. Putting corrupt politicians to jail,

2. Preparing communities for disasters,

3. Ensuring national peace and security,

4. Providing better job opportunities,

5. Helping the poor address their basic needs,

6. Improving the Philippine economy,

7. Protecting Philippine territories,

8. Preserving Filipino cultural heritage,

9. Supporting industry development,

10. Meeting target tax collections, and

11. Solving traffic problems.

For the first time, EON also looked at social media from June 2016 to June 2017, with the help of its social media listening tool Groundswell.

The Office of the President and the Office of the Vice-President were most mentioned among the discussions about the government, at 37% and 29%, respectively. The former had the most positive sentiments, while the latter had the most negative ones.

Issues that were most discussed online were the Marawi crisis and martial law in Mindanao, death penalty, extrajudicial killings, war on drugs, and violent groups such as the Abu Sayyaf and the New People’s Army, in that order.

1...13,75313,75413,755...14,246Page 13,754 of 14,246
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube