THE Securities and Exchange Commission (SEC) has formally launched a probe into an alleged P2.6-billion unauthorized trading by brokerage DW Capital, Inc. (DWCI), with a hearing set for Tuesday next week.
Photo: InterAksyon
In a statement emailed to journalists on Friday, the SEC’s Markets and Securities Regulation Department said it set a “clarificatory hearing” for Aug. 29, kickstarting the investigation process first ordered by the corporate regulator on Aug. 18.
The SEC was acting on a petition filed by the Philippine Stock Exchange’s (PSE) watchdog Capital Markets Integrity Corp. (CMIC) which sought to take over the operations of DW Capital.
The core allegation is that the brokerage house “engaged in unauthorized trading of securities involving five (5) accounts which have total market value of short positions in the amount of PhP2,599,324,718.00 as of July 28, 2017,” according to the SEC-emailed document.
The case was brought to light after lawyers of the clients of DW Capital asked the PSE watchdog in early August to “prohibit DWCI from trading the shares of stock of their clients, and to direct DWCI to preserve the records of transactions pertaining to subject securities.”
DW Capital clients had wanted the “immediate delivery” of their shares of stocks, and so on Aug. 10, the PSE’s CMIC suspended the brokerage firm from trading the listed securities.
The PSE had sought the SEC’s intervention as under the Securities Regulation Code, the corporate regulator has the power to order an exchange or a self-regulatory organization (SRO) to take over the operation of a failed trading participant to protect the investing public.
The PSE’s CMIC is a self-regulatory organization and the primary regulator of the local stock market’s trading participants.
The SEC said DW Capital has yet to submit the documents and records it required the brokerage firm to submit under a subpoena duces tecum it handed down last Aug. 18. The brokerage earlier sought to partially quash that subpoena.
Those documents include the customer master list, stock position report detailed per customer, per stock, per location; portfolio reports; transaction reports; account ledgers; statement of accounts; confirmation invoices; and customer account information forms.
TROPICAL Storm Jolina is expected to make landfall in the province of Aurora on Friday night, Aug. 25, the weather bureau said in a 5:00 p.m. advisory on its Web site.
Facebook/PAGASA.DOST.GOV.PH
The storm is expected to make landfall between 6:00 p.m. and 9:00 p.m., PAGASA said in its advisory, adding that estimated rainfall is from moderate to heavy within the storm’s 300 km diameter.
The weather bureau said Jolina has maximum sustained winds of up to 80 kilometers per hour (kph) near the center and gustiness of up to 95 kph.
The storm is then expected to travel 65 km west-northwest of Sinait, Ilocos Sur, by Saturday afternoon, before leaving the Philippine Area of Responsibility (PAR) by Sunday afternoon.
Placed under Tropical Cyclone Warning System Number 2 (TCWS) are the provinces of Isabela, Aurora, Quirino, Kalinga, Mountain Province, Ifugao, Ilocos Sur, Benguet, Abra, La Union, and Nueva Vizcaya. Coastal areas are also cautioned of a possible storm surge, with a wave height at open sea of 4.1 to 14 meters.
TCWS Number 1 is in effect in the provinces of Cagayan including Babuyan Group of Islands, Apayao, Ilocos Norte, Nueva Ecija, Pangasinan, Northern Quezon including Polilio island, and Camarines Norte.
Metro Manila is expected to experience monsoon rains until Saturday with moderate to strong winds blowing from the southwest. Metro Cebu and the rest of Cebu province are expected to have light to moderate rains and thunderstorms while Metro Davao is expected to have partly cloudy to at times cloudy rainshowers or thunderstorms on Saturday.
GLOBE Telecom, Inc. on Friday said it had signed a $155-million loan with Metropolitan Bank & Trust Co. with terms of seven and 10 years.
“The loan shall be used to finance the company’s capital expenditures for the year,” the Ayala-led telecommunications company told the stock exchange.
The company made the disclosure days after Ernest L. Cu, its president and chief executive officer, said that Globe’s budget for the year would be around $750 million and $800 million.
Earlier this year, the company said it was allocating $750 million in capex for 2017. The bulk of the funds will be invested in data-related projects, modernization of fixed line data infrastructure, and requirements for transmission facilities and for the deployment of more Long-Term Evolution (LTE) services.
Globe said as of the end of the first half of this year, it had spent around $550 million, or P27.5 billion, “primarily to support the growing demand for data across our mobile, broadband and enterprise segments.”
On Friday, the company said its capex guidance for the year stands at $750 million, although its management was looking at raising the amount by $50 million to $100 million “to continue addressing the growing demand for quality data services in the country.”
It said the progress of capital deployment in the third quarter would determine whether management would seek approval from the board for additional funds.
For the first half, Globe recorded gross service revenues of P62.9 billion, higher by 5% compared with the P59.9 billion posted a year ago.
The robust revenue, which it described as “a new record-level” for Globe, was driven by the strong contribution of data-related products and services. It said mobile data, home broadband and corporate data business segments delivered solid performances.
The company also registered “record-level” EBITDA (earnings before interest, tax, depreciation and amortization) of P27.3 billion, up 6% from the level recorded in the same period last year.
Shares in Globe were unchanged at P2,050 on Friday. – Victor V. Saulon
THE government has laid down its strategy to deepen the debt market, with agencies looking to attract bigger auction volumes for Treasury notes and put up a repurchase market by 2019.
Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said on Friday that the authorities have released an inter-agency blueprint for debt market reform to industry participants, which outlines a sequence of measures that would create more fund-raising platforms for the government and generate fresh money supply.
Such plans will be opened for comment and suggestions and will later on be implemented by the regulators.
The BSP, the Bureau of the Treasury, the Securities and Exchange Commission (SEC), and the Department of Finance met with banks and financial firms qualified as eligible securities dealers – those that can bid for government-issued debt paper – as they unveiled a three-phase plan for the local capital market.
First, Mr. Espenilla said the agencies want to deepen the bond market by “increasing the supply of short-term securities. The agencies are likewise looking to set rules on derivatives and repo markets, creating “reliable financial benchmarks” for valuation of debt instruments, and putting up an integrated financial market infrastructure that will govern orderly trading and settlement of such transactions.
Mr. Espenilla said these plans would take a series of carefully-sequenced steps which will be carried out “over the next 18 months,” to be completed by early 2019.
“Today, the supply of government securities is relatively fragmented and the market is illiquid in certain parts. That’s an important piece of the reform,” the central bank governor said during a forum hosted by the Economic Journalists Association of the Philippines at the Ayuntamiento in Manila.
“The government securities market in effect is the most important element because it sets the risk-free yield curve, which is the foundation for pricing all other kinds of instruments.”
At present, the government raises fresh funds through the issue of Treasury bills (T-bills) and bonds every week. However, volumes offered and tenders received for each tenor varies, with market participants showing stronger preference for short-dated notes.
The Treasury offers T-bills which come with maturities of three months, six months, and one year; while T-bonds range from two to 20-year issuances.
Mr. Espenilla added that he expects to see “more regular” Treasury auctions across all maturities, which would result in a “full yield curve that’s relatively smooth and predictable.” He noted that greater public borrowing activity would likewise spur more issuances from corporates, particularly for infrastructure projects.
Asked what other changes can be expected by then, Mr. Espenilla said: “If plans do not miscarry, we should be seeing an active repo market – at least that’s our ambition.”
Under a repo agreement, one party sells a security – such as Treasury bills and bonds – to another which it will buy back at a specified price and a future date, in the process providing the seller with short-term liquidity which it can use to issue loans and service additional client withdrawals.
Mr. Espenilla said the initial reforms will be led by the Treasury, while the SEC and the BSP will step up their watch over regulated entities to ensure financial stability even as they vie for government-issued papers.
By Krista Angela M. Montealegre, National Correspondent
LOGISTICS solutions provider AAI Group of Companies is taking in a strategic investor to fund an aggressive expansion program aimed at riding the e-commerce wave ahead of a possible initial public offering (IPO) by 2020.
In a briefing late Thursday in Makati City, AAI Worldwide Logistics, Inc. President Arnie R. Brizuela said the group is in talks with a private equity firm for capital infusion and a Filipino strategic partner that will generate synergies for the business for the sale of a “meaningful minority” stake in the holding company this year.
Proceeds from the share sale will enable its new courier unit Black Arrow Express to scale up and boost its share of revenues to 50% by 2020 when revenues would have ballooned to P12 billion from the current P2 billion.
“We’re playing catch up so we have to focus,” AAI Group Chairman Rico V. Brizuela said.
The expansion of AAI Group comes at a time when competition in the highly fragmented logistics sector is heating up, as conglomerates like SM Investments Corp., Metro Pacific Investments Corp. and Ayala Corp. venture into this space.
Even Chelsea Logistics Holdings Corp. of businessman Dennis A. Uy, who has teamed up with SM to wrest control of 2GO Group, Inc., went public in August to beef up its war chest.
The entry of an investor will allow AAI Group to accelerate its expansion, setting the stage for its listing in the local bourse by 2020, or even earlier, through an IPO of as much as P5 billion, the company’s chairman said.
By that time, AAI Group wants Black Arrow Express to be “number one in logistics,” and “match or surpass” LBC Holdings, Inc. as the household name in courier services. Black Arrow handles an average of 17,000 transactions per day compared to the 150,000 transactions of LBC.
“It’s not bad to dream,” the younger Brizuela said.
Black Arrow Express has been operating for only 18 months, but now accounts for 30% of AAI Group’s business. Bulk of the revenues still comes from the traditional freight-forwarding business under AAI Worldwide, but that is expected to change given the rapid growth of e-commerce.
“How we see it, that is the future of the business,” the younger Brizuela said.
Black Arrow Express reached its millionth delivery this July, with more than 97% of its volumes coming from e-commerce. It is on its way to hit the three millionth delivery milestone by the end of the year.
Black Arrow Express offers clients “same day, next day” delivery fulfillment using its mixed fleet of motorcycles, vans and trucks. Its clients include Shopee, ABS-CBN TV Plus, Bench Online, among others.
Aside from Black Arrow Express, AAI+Peers will be one of the key pillars of the group with its services for moving large scale equipment such as specialty rigging and cranes seen benefiting from the government’s infrastructure push.
AAI Group offers the full range of logistics solutions from large-size and volume shipments, storage and handling, all the way to retail express delivery across the Philippines.
THE parents of slain teenager Kian Lloyd delos Santos on Friday, Aug. 25, filed a complaint at the Office of the Prosecutor of the Department of Justice against the three policemen allegedly behind his Aug. 17 murder, as well as their superior, Chief Inspector Amor Cerillo.
Vice-President Maria Leonor G. Robredo speaks with the father of Kian Lloyd delos Santos, the Grade 11 student who was allegedly shot by police on Aug. 11 during an anti-drug operation in Caloocan City. — OVP_INTERKASYON
Mr. delos Santos was killed in the course of an antidrug campaign in Caloocan City. CCTV footage showed him being accosted by the policemen toward a street corner where he was later shot dead.
The boy’s parents, Saldy F. delos Santos and Lorenza D. Delos Santos, were represented by Public Attorney’s Office (PAO) chief Persida V. Rueda-Acosta, in filing charges against Mr. Cerillo and the now-relieved cops, Police Officer 3 (PO3) Arnel Oares, PO1 Jerwin Cruz, and PO1 Jeremias Pereda.
During the Senate investigation yesterday on the death of delos Santos, it was established that Mr. delos Santos’s alleged involvement in illegal drugs was based on unverified social media comments. The three policemen, who said very little during the Senate proceedings, also maintained that the individual they were apprehending as seen on CCTV was not Mr. delos Santos but a police asset.
The Senate resumes its inquiry on Tuesday, Aug. 29.
Also on Friday Senator Ana Theresia Hontiveros-Baraquel said Justice Secretary Vitaliano N. Aguirre II should inhibit himself investigating Mr. delos Santos’s death.
“’Yung pag-sira niya sa credibilidad ng mga saksi para sabihin niya na ang mga batang saksi ay susceptible to suggestion….Bakit parang mas paniniwalaan pa niya ang mga testimoniya na convicted na halimbawa na drug lord, kesa paniwalaan niya ang mga bata na takot na takot na traumatized na nga pero naglalabas pa rin ng sarili nilang katotohaan?” she said. (He’s destroying the credibility of the witnesses, for him to say that these young witnesses are susceptible to suggestion….Why would he be more inclined to believe the testimony of a convicted drug lord, for example, than these children who are afraid and traumatized but are still coming out with their truth?)
She also questioned the planned move to place the three witnesses on her watch (two of them minors) under the custody of the Department of Justice.
Mr. Aguirre said he has no problem inhibiting himself, adding: “But she should also inhibit on Senate investigations and other matters where her fairness and impartiality are under question.”
For his part, Senate Minority Leader Franklin M. Drilon said the Office of the Ombudsman should investigate this case.
“What we have seen from the hearing is that there were obvious attempts to whitewash or minimize as much as they can the liability of the Caloocan policemen,” Mr. Drilon, a former justice secretary, said in a statement on Friday.
He said Mr. Aguirre showed partiality “in favor of the Caloocan policemen” when he characterized the death of the 17-year old student as “collateral damage” and an “isolated incident.”
“That is the worst statement I’ve ever heard from a justice secretary, whose principal mission is to uphold the rule of law and strengthen the people’s belief in our justice system,” the senator added.
‘THIS IS MURDER.’
Meanwhile, the United Nations’ (UN) special rapporteur on extrajudicial killings, Agnes Callamard, took to Twitter her response to the delos Santos case and qualified the minor’s death as a “murder.”
To be sure, even Ms. Acosta has described what happened to Mr. delos Santos as such.
“Yes, P[resid]ent Duterte, this is murder. All unlawful deaths must be investigated. To stop all murderers #Philippines,” Ms. Callamard tweeted.
“Autopsy confirms execution of #KianDelosSantos, latest symbol of a massive, government-led, human rights crisis,” she also said in a separate tweet.
Ms. Callamard, a vocal critic of Mr. Dutert drug war, previously faced harsh criticism from Duterte loyalists over an unofficial visit she made to the Philippines in May that the government claims was not authorized.
She was set to visit the Philippines to conduct an independent investigation on the alleged summary executions of suspected drug users, but this has been indefinitely put on hold as the government and the UN have reached a stalemate regarding conditions on the probe.
Ms. Callamard was among those who have added their collective voice to the clamor against the killing of Mr. Delos Santos and the conduct of the revitalized drug war, which saw its bloodiest outcome yet last week.
Commenting on the UN rapporteur’s tweets, Presidential Communications Assistant Secretary Omar Alexander V. Romero told reporters yesterday that Malacañang will wait for the results of investigations on Mr. Delos Santos’s death.
“Until there is a finding by a competent court that it is murder, that we can agree but we look forward to the results of the impartial investigation on this incident.” Mr. Romero said.
Mr. Duterte earlier vowed to bring justice for Mr. Delos Santos and assured the public that the cops behind the slay will “rot in jail” if proven guilty.
But despite the simmering public anger over the case, Mr. Duterte yesterday said his tough policy against drug-traffickers – which has been a hallmark of his three-decade political career – will remain.
The President also assured the police force he once accused of being “corrupt to core” of his protection as long as they do not commit crimes.
In a statement issued yesterday, Presidential Spokesperson Ernesto C. Abella said Mr. Delos Santos’s case is a “wake-up call” for government institutions to reform, including law enforcement agencies.
“The President has clearly stated that the war against drugs is not a license to break the law….Those found responsible would be held accountable before the law,” Mr. Abella said.
“We hope this serves as a reminder to the PNP (Philippine National Police) personnel to follow the established PNP policies and operational procedures; that their personnel are properly guided in the conduct of police operations, particularly in the adherence to the rule of law and due process,” he added. – withIan Nicolas P. Cigaral
PHILIPPINE Savings Bank (PSBank) said it will deactivate its magnetic strip cards starting Sept. 1, as it fully shifts to Europay Mastercard Visa (EMV) cards.
“All non-EMV PSBank cards can no longer be used beginning Sept. 1, 2017,” PSBank said in a statement.
“Clients should replace their non-EMV cards now at any PSBank branch. Replacement is free of charge,” it added.
PSBank, the thrift banking arm of Metropolitan Bank & Trust Co, started to issue its EMV chip-enabled cards on Jan. 3.
It said that more than 600 of its automated teller machine (ATM) terminals are all EMV-ready.
In 2014, the Bankgo Sentral ng Pilipinas (BSP) issued Circular No. 859 or the Europay, Mastercard and Visa implementation guidelines, which imposes the EMV standard on local card-issuing firms, with the original deadline set last Jan. 1 this year. The deadline was extended to Jan. 1, 2018.
The EMV card system is currently the international standard as it is deemed more secure compared to the magnetic strip cards which are prone to skimming – usually done by illegally tapping into automated teller machine (ATM) terminals to steal client data.
There are around 76 million debit and prepaid cards in the country, alongside 8.5 million credit cards, according to the central bank.
Banks also operate 19,084 ATMs nationwide. The regulator also told lenders to take extra steps to invite cardholders to turn in their old cards and have these upgraded to EMV-equipped ones.
The central bank also warned that non-compliance with its tighter EMV guidelines would be considered a “serious offense” that would warrant penalties from the regulator.
In the first half, PSBank’s net profit was P1.18 billion, up 2% from a year earlier.
PSBank closed at P88.2 on Friday, gaining five centavos or 0.06%. – Elijah Joseph C. Tubayan
THE military on Friday, Aug. 25, said troops were able to regain control of the Grand Mosque and a police station located at the heart of besieged Marawi City, provincial capital of Lanao del Sur, where state forces are battling pro-Islamic State (IS) militants.
A Muslim policeman prays inside a building riddled with bullet holes as a mosque is reflected on a glass window during a lull in fighting in Marawi on the southern island of Mindanao on May 29, 2017. — AFP
Clashes erupted in Marawi on May 23 and are now well into their third month, under an environment of martial law as President Rodrigo R. Duterte had also declared that day.
In a press briefing at Malacañang, Armed Forces of the Philippines (AFP) Spokesperson Brigadier-General Restituto F. Padilla, Jr. said advancing troops were able to recover the city’s Grand Mosque and police station through an “envelopmental approach.”
He said such developments were “very important operational achievements.”
“So having it under the hands of government provides us the impetus to symbolically say that nakuha na natin ‘yung sentro mismo ng bayan (that we have captured the city center). Ganon din ‘yung Marawi City Police Station, kasi ito’y place of authority (The same with the Marawi City Police Station, because this is a place of authority),” Mr. Padilla said.
But retaking the two buildings, which were located in the city’s strategic points, was not easy, Mr. Padilla said, adding that enemy resistance led to three soldiers wounded.
He said the military’s efforts to seize control of the Grand Mosque took almost a month. No civilian hostages were found inside the place of worship, Mr. Padilla said.
“We did not conduct a frontal attack because we wanted to preserve the Grand Mosque, owing to the promise of our Commander-in-Chief, the President, and our Chief of Staff, who strongly provided guidance not to destroy any place of worship even if international protocols would allow us to do that,” the military spokesman said.
“So for almost a month, we took over or tried to get all the facilities around the Grand Mosque in an envelopmental approach. It was not a frontal attack, but an envelopmental approach that targeted all nearby installations around the Grand Mosque so that we can constrict it,” he added.
The band of gunmen that overran Marawi was led by Lanao-based Omarkhayam and Abdullah Maute, who had joined forces with Isnilon Hapilon, leader of the dreaded kidnapping-for-ransom gang Abu Sayyaf Group (ASG).
Authorities earlier said the Maute terrorists have converted commercial buildings in Marawi – a significant Muslim city in the predominantly Catholic Philippines – into defensive and staging positions, and the madrasas (Islamic schools) and mosques as snipers’ nests.
According to Mr. Padilla, the Islamist militants who occupied Marawi’s Grand Mosque might have fled to other nearby mosques, where the next military offensives will be focused.
Last month, Congress overwhelmingly voted to extend Mr. Duterte’s martial rule in Mindanao until yearend to defeat the band of jihadist extremists that overran the predominantly Muslim city and to dismantle the terror network in the region.
Mr. Duterte visited the war-torn city last Thursday for the third time, where he set foot on the main battle area and fired a shot at enemy positions.
“So whether there was a target hit [by the President], they did not say,” Mr. Padilla said.
“So he just wanted to perhaps show our troops that he was one with them every step of the way,” he added.
As of Aug. 25, security forces have neutralized 596 enemies in Marawi while government casualties reached 129.
The number of civilians killed by bandits in the course of the urban warfare remains at 45, while air strikes and artillery bombings by troops as well as deadly street combats have left the city in ruins.
On Wednesday, French aid groups said intense fighting in Mindanao combined with extreme weather events created a “humanitarian catastrophe” in the strife-torn southern region.
But the government, in response, insisted that it is addressing all the needs of people displaced by the Marawi siege.
“We do not think it’s a humanitarian crisis because we’re addressing the situation that’s happening,” Deputy Administrator for Administration of the Office of Civil Defense Kristoffer James Purisima told Palace reporters yesterday.
“We know what’s happening on the ground and we’re addressing all the needs of our IDPs (internally displaced persons), whether they be in our evacuation centers or home-based,” he added.
PHILWEB Corporation said that Textron Software Solutions Inc. (Textron) acquired some shares in the listed company in a P34.75-million deal that comes just a few days after it regained an operating license from Philippine Amusement and Gaming Corp. (Pagcor).
Textron, an authorized licensor of casino software program RealTime Gaming, has P34.7 million in receivables from PhilWeb and that was written off in exchange for 5,791,333 PhilWeb shares, the listed company told the stock exchange on Friday.
“PhilWeb Corporation has been a tremendous licensee and partner since 2005 and we look forward to a long and successful relationship,” the PhilWeb disclosure quoted Textron as saying.
PhilWeb said on Tuesday that Pagcor has granted it a Provisional Certificate of Accreditation to be an accredited Electronic Gaming System (EGS) Service Provider.
The accreditation means that the company can offer software and other services to the operators of Pagcor-licensed gaming sites for electronic games.
The approval came a year after the expiration in August 2016 of the company’s license to supply software systems to gaming sites. PhilWeb is now under a new owner – businessman Gregorio M. Araneta III – after former Marcos trade minister Roberto V. Ongpin divested all his holdings.
ECONOMIC managers said they will maintain fiscal discipline and resist pressure to implement populist policies after President Rodrigo R. Duterte approved measures to introduce free university tuition and increased salaries for security forces.
Budget Secretary Benjamin Diokno reveals the means on how the government can source funds for the different infrastructure projects under the “Build! Build! Build!” program during the DuterteNomics Forum at Conrad Manila in Pasay City on April 18, 2017. Also in the photo are Presidential Spokesperson Ernesto Abella, Transportation Secretary Arthur Tugade, and Executive Secretary Salvador Medialdea. — Presidential Communications
Mr. Duterte signed Republic Act No. 10931, which introduced free tuition in state universities and colleges, despite the advice of his economic team.
“The new law mandating free tuition and miscellaneous fees for all public tertiary institutions still has no clear funding mechanism. I assure you we will not compromise on fiscal discipline and court runaway debt to please populist demands,” Finance Secretary Carlos G. Dominguez III said in a video message during the Economic Journalists Association of the Philippines Economic Forum yesterday at the Ayuntamiento in Manila.
Other measures include the salary hike for military and other uniformed personnel despite the already high pension costs ssociated with these services, which the Development Budget Coordination Committee flagged as a fiscal risk, as well as the pending free irrigation bill.
Budget Secretary Benjamin E. Diokno said these commitments, especially pensions, were the “elephant in the room” that needs to be addressed.
Mr. Diokno noted that if no reforms are introduced to the pension system, its seed fund will require some P8 trillion. Pensions for retired military and other uniformed personnel are currently tied to the salaries of ther counterparts on active duty, meaning benefits will escalate with every salary increase.
“We didn’t start that. Right now our estimate is that will amount to something like 8 trillion pesos. No president after (Fidel V.) Ramos tried to deal with it. Nowhere in the world do we have that kind of system. We are going to have address that issue or else it will become a full-blown crisis,” he said.
“We will address that before the end of the year,” added Mr. Diokno.
The populist measures came as the government spends massively on infrastructure. Mr. Dominguez said that overall, the economic team will remain prudent while still considering ways to increase the budget deficit ceiling beyond the current 3% cap.
“We intend to maintain the regime of fiscal discipline even as we are prepared to widen the deficit margin a little more,” Mr. Dominguez said.
With the economy seeing investments taking a greater share of the pie, aided by the government’s infrastructure plan, the impact is reflected in the current account balance, which swung into a deficit in recent months.
On the deficit – which has resulted in the peso depreciating to 11-year lows – Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla said that it will be contained to a maximum of 1% of gross domestic product (GDP).
“I think we have to analyze the current account deficit in the proper context. The current account deficit today is lower than 1% of GDP, and we have no intention of seeing the current account deficit go higher than 1% of GDP,” Mr. Espenilla said, while noting that the deficit is no cause for concern, as it is mainly driven by the import of capital goods – a signal that economic activity will pick up.
The central bank projects an upwardly-revised $500-million balance of payments deficit this year, equivalent to 0.2% of gross domestic product (GDP). In July, the deficit widened for the fourth straight month to $678 million.
“These investments, if properly executed, should enlarge productive capacity, and our ability yto export and produce goods and services. So if you look at it… it should correct over time,” said Mr. Espenilla.
“So long as these investments are good, we shouldn’t be in trouble and the situation should remain manageable,” he added.
Socioeconomic Planning Secretary Ernesto M. Pernia meanwhile presented the government’s 75 flagship infrastructure projects, all amounting to an initial P1.58 trillion.
Mr. Pernia said that the government aims to prioritize those projects that can be completed within this presidential term. This approach has led to a preference for funding projects from the government budget and Official Development Assistance, leaving the operations and maintenance component to be left to public-private partnership concessions.
However, Mr. Pernia said that the team is still open to all possible sources of financing.
“We need to make sure that the project’s financing sources will achieve our objective of speed of execution in processing, as well as the terms especially when it comes to tariffs to be charged to the users. We have not closed any doors in terms of financing sources,” he said.
The government plans to raise infrastructure and social spending to about 7.1% of gross domestic product (GDP), or P8.4 trillion, until the end of its term, in a bid to boost the economy to growth of 7-8% next year until 2022, from 6.9% in 2016.
Mr. Espenilla said monetary policy is “appropriately calibrated and well communicated with the balance of safeguards to price stability and providing support to economic expansion.”
As far as the macroeconomy is concerned, Mr. Espenilla said: “Inflation is firmly under control, the economy grows robustly, the public sector deficit is under control, GIR (gross international reserves) is very ample, almost (covering) nine months imports of goods and services, the external debt position is very low – only 24% of GDP from a peak of 60% in 2005.” – Elijah Joseph C. Tubayan
THE Department of Energy (DoE) has started asking private sector entities that are interested in exploring for oil, gas and coal resources to come out with their proposals under the new Philippine conventional energy contracting program.
“Even if tomorrow or next week let’s say a company is willing to do exploration work in certain identified areas, then okay, we will run it through a Swiss challenge,” DoE Secretary Alfonso G. Cusi told reporters.
He said the government wasted time under the previous system – the Philippine energy contracting round – and has set back energy exploration by about two years because of the lengthy interval between contracting rounds.
“Now anybody, any willing investor, can propose and say that I want to explore a particular area,” he said. “They determine the area that they want to explore.”
The new tack is departure from the DoE’s earlier pronouncement that a new contracting round is in the offing for petroleum and coal in its goal to create wealth for the industry to fund more energy development projects.
In July, the DoE’s energy resource development bureau (ERDB) said it planned to conduct a new contracting program by December to discover additional energy reserves.
The new round would have been the sixth Philippine energy contracting round, a system of awarding service contracts for petroleum and coal prospecting areas.
ERDB previously said it was hopeful that the new contracting program would discover another Malampaya, the offshore Palawan gas find that supplies a number of power generation plants in Batangas that deliver about 20% of the country’s electricity requirements. The government receives a portion of the revenue from the project.
The bureau said the areas to be offered under the new contracting program include parts of the West Philippine Sea, Sulu Sea and areas around Palawan province. In the fifth round the DoE offered 11 areas with a total area of about 4.8 million hectares.
Under the new program, the process will be faster as exploration companies need not wait for any declaration from the DoE to open any new contracting round.
“I will evaluate your offer, if it’s acceptable meeting the standard, I will publish it so the public will know then I’ll have it challenged to test that your bid is really fair and equitable to all parties,” Mr. Cusi said.
He also said the exploration arm of state-led Philippine National Oil Co. (PNOC) is not barred from coming up with proposals. – Victor V. Saulon
THE Home Development Mutual Fund, beter known as the Pag-IBIG Fund, said net profit in the first half grew 13% year-on-year.
In a statement, the state-run housing lender recorded a P13.3 billion net income as of end-June, aided by improved collections resulting from its tie-ups with third-party collection agents.
Pag-IBIG Chief Executive Officer Acmad Rizaldy P. Moti said in a statement: “Pag-IBIG’s increased income for the first half of 2017 was due in part on the increased housing loan collections worth P20.46 billion. This is 10% higher, or P1.8 billion more than the P18.66 billion collected for the same period last year.”
The housing lender first partnered with third-party collectors in 2013. As of end-June, Pag-IBIG said that it has 20 accredited collecting agencies that have collected a total of P2.2 billion.
Outsourced tele-collection services generated P3 billion during the same period.
“The high collection rates in housing loan amortizations led to Pag-IBIG’s single-digit non-performing loans ratio, or 9.8%. Pag-IBIG has maintained its high collection efficiency ratio of 90.2%,” it said.
““With President Rodrigo Roa Duterte’s directive to streamline government processes, it is
commendable that Pag-IBIG is taking steps to make sure that its members are readily served,” Housing and Urban Development Coordinating Council (HUDCC) Chairperson Eduardo D. del Rosario was quoted in a statement as saying.
Pag-IBIG earlier reported that its housing loans grew 17% year-on-year to P28.8 billion in the January to June period, which translated to 36,139 families who have availed of the loan product.
Mr. Moti earlier said that the agency aims plans to sign mortgage agreements on 82,000 housing units before the close of the year, equivalent to about P65 billion in housing loans, up 13% from the P57.31-billion housing loan takeout recorded in 2016, which covered 77,503 borrowers.
Takeout is the process by which a mortgage lender such as Pag-IBIG pays the owner of the unit – usually a developer or the loan-originating bank – thereby taking ownership of the property while assuming responsibility for collecting on the mortgage. – Elijah Joseph C. Tubayan
