THE MANILA North Road-Cauringan section in Sison, Pangasinan, fronting Artacho Elementary National High Schools, will be closed to traffic from 10 p.m. on July 13 to 6 a.m. the next day for the launching of the pedestrian overpass girder, the Department of Public Works and Highways announced yesterday. Motorists are advised to take the alternate Rosario-Damortis-San Fabian route via the Manaoag-Binalonan road.
TEN SCHOOLS in Leyte were destroyed by the 6.5-magnitude earthquake that struck the central part of the country on July 6, while 10 others were partially damaged. Leyte Division Schools Superintendent Ronilo Al Fermo said those destroyed are in the towns of Kananga, Jaro, Barugo and San Isidro, while the damaged are in Inopacan, Albuera, Merida, Barugo, and San Miguel. Mr. Fermo told The Freeman that school administrators will implement a shifting scheme so that all students can still have classes despite the limited classrooms. The Department of Education’s regional office has requested the central office for at least P120 million for repairs, Mr. Fermo said. “As of this moment, we are coordinating also with Department of Health-8 officials to provide psycho-social intervention for the rehabilitation and recovery of students from trauma they experienced from the quake,” he added. Philippine Institute of Volcanology and Seismology officials have assessed that the schools are not located along fault lines.
EVACUATION
In Ormoc City, at least 400 families in Barangay Lake Danao will have to be moved permanently to another barangay, said Ciriaco E. Tolibao II, head of the City Disaster Risk Reduction Management Office. Lake Danao and Tongonan are the two barangays recommended for total evacuation as these are directly in the path of the Philippine Fault Line. The city’s rescue units are rushing the evacuation, Mr. Tolibao said, even as continuous landslides in the mountainous village have hampered movement. As of Tuesday, Lake Danao could no longer be accessed by car, thus, evacuation will have to be done on foot. — The Freeman
KIBLAWAN, a second-class municipality in Davao del Sur with a population of less than 50,000, is proving to be one of the biggest challenges in the illegal drug campaign in the Davao Region, according to Philippine Drug Enforcement Agency Regional Director Adzhar A. Albani. “We have difficulty in entering the hinterlands (of Kiblawan),” he said, referring to areas where marijuana plants are grown and guarded by armed men. Mr. Albani also reported that two towns and 46 villages in the region have been declared “drug-free.” The two towns are Matanao, also in Davao del Sur, and Sta. Maria in neighboring Davao Occidental. All the 46 villages are outside Davao City. Mr. Albani said while anti-drug operations are ongoing, they are also validating areas that local officials claim to be free from the drug menace. — Carmelito Q. Francisco
THE DEPARTMENT of Tourism-Central Visayas (DoT-7) is hoping that the planned Cebu-Bangkok route by Thai Smile Airways, a subsidiary of Thailand flag carrier Thai Airways International, will push through soon. Judy D. Gabato, DoT-7 officer-in-charge regional director, said talks on the route had been undertaken, with the Philippine’s tourism attaché in Thailand among those pushing for the plan. “Hopefully it will materialize,” Ms. Gabato said in a recent interview. A March 28 report on the Bangkok Post said Thai Smile Airways’ planned launch of daily flights between Bangkok and Cebu was being put off for two months because of document processing issues. “Admittedly, we were not quite familiar with their procedures, resulting in more time required to complete the process,” Thai Smile acting Chief Executive Woranate Laprabang was quoted as saying. The launch was originally set for May 1. The new route is seen to cater to travelers to and from the two destinations as well as using Bangkok as a connecting point to Europe, the Middle East, and India. — The Freeman
THE DAVAO City council approved this week an ordinance that penalizes individuals who would leave their bag or others baggages unattended. The local law, the city government said in a statement yesterday, is intended to address terror threats in the city, where a bombing in September last year at a busy night market left 16 people dead and at least 65 injured. The ordinance has two main provisions in determining that a person committed the offense: (1) Anyone who lays down an unattended bag in a public place and walks away — even without causing alarm and panic; and (2) anyone who lays down an unattended bag in a public place, walks away, and such act causes alarm and panic. Under the first provision, first-time offenders will be warned and reprimanded, 2nd offense will mean a fine of P100, and P300 for the 3rd offense. Under the second provision, first-time offenders will be fined P1,000, then P3,000 for the 2nd time, and P5,000 or one-month imprisonment or both, depending on the court, for the 3rd-time. The unattended bags will also be confiscated and turned over to the police or the National Bureau of Investigation. Unclaimed bags will be disposed of within seven days. The ordinance will take effect 15 days after its publication in two local newspapers. — Mindanao Bureau
A ONE-STOP shop — with manpower from the Department of Social Welfare and Development, Philippine Health Insurance Corporation, Philippine Charity Sweepstakes Office, and the Davao City local government — has been opened across the government-run Southern Philippines Medical Center (SPMC), which caters mainly to the Davao Region population. “The one-stop-shop will make it easier for indigent patients (both from the city and neighboring towns) as they no longer need to go from one office to another to get medical assistance from the various local and national government offices,” Davao City Mayor Sara Duterte-Carpio said during last week’s launch. The center is an offshoot of the city’s Lingap Para sa Mahirap program that provides health support services to city residents. Ms. Duterte-Carpio said the one-stop shop will later transfer to a bigger office, currently under construction with a P20-million budget, located inside the SPMC compound. — Carmencita A. Carillo
Trade Tripper — Jemy Gatdula
With all due respect, to the Supreme Court and everyone else, different versions of Justice Marvic Leonen’s dissent must be spreading around the legal community. I say this because having read it myself, I simply cannot see the reason for the awe and outright emotional fan-gushing that some members of the legal community are heaping on it.
Because Justice Leonen’s dissent far from defends our Constitution (for it had no practical grounding in that document’s text) nor does it advocate for democracy (as it seemingly transgresses the doctrine of separation of powers).
At its very outset, Justice Leonen declares his unwillingness to grant “the President undefined powers of martial law.”
First of all, the powers are not his to grant.
Secondly, the powers are already defined, exhaustively so. It’s right there in Article VII.18 of the Constitution.
And as I pointed out in a previous article (“No highs, all lows with martial law,” 23 June 2017), the Supreme Court’s job in this matter should reasonably be limited to “whether the procedural requirements for martial law … have been met.”
Why? Because the judgment to call martial law is not with the unelected justices of the Supreme Court. Our people gave that power to the elected president of the Republic.
As regards abuses of discretion, in the “fog of war” they are to be lamented but expected.
It also means not every abuse of that discretion, assuming there is, empowers the Supreme Court to invalidate the actions of an equal branch of government.
Because the abuse must also be “grave,” a standard significantly high that common sense, prudence, and restraint — not conjectural technicalities — should play major parts.
Such virtues, unfortunately, are absent in Justice Leonen’s dissent.
He even goes on to create a two-part test (e.g., that “facts are sufficient when (a) it is based on credible intelligence and (b) taken collectively establishes that there is actual rebellion and that public safety requires …”).
Nowhere in the Constitution’s pages is the foregoing found. Justice Leonen was essentially legislating, a function obviously not granted to the Court.
To my mind, Justice Leonen’s dissent, in a theoretical legal sense, could actually be said to constitute an attempt (consciously or not) at a power grab.
By which I mean to expand the powers of the Court, concededly perhaps for benevolent motives, but nevertheless something which historical figures and legal commentators have been long suspicious of due to the dangers of creating a “judicial oligarchy.”
If so, Justice Leonen is not alone in this. Activist lawyers and members of the legal academe have long dreamt of establishing a legal doctrine whereby the unelected judiciary can advance policies by reading the Constitution in a manner detached from the actual words therein.
But the Supreme Court was purposely not designed to be a policy-making body. Our Constitution wisely gave that function to the two elected coequal branches of government.
The non-elected, permanent until 70-year-old appointees to the Court have, collectively, a simple function: to decide cases, determine grave abuse of discretion, and examine laws or treaties — all in accordance with the Constitution.
No more, no less.
Imagine a policy unacceptable (perhaps because it is “leftist,” etc.) to the Filipino citizenry. This likely means that no elected official will support it and thus such policy cannot democratically be made into law.
But if the logic of Justice Leonen’s dissent were to hold sway way, imagine that same unaccepted policy now supported by a small group of like-minded academics, activist lawyers, and even jurists. As it stands, a mere 5 justices of the Supreme Court (majority of its en banc quorum, which is 8 justices) can overturn the will of the elected 297 House members, 24 senators, and the president.
Going back to the martial law case, J. Leonen’s dissent sought to impose his discretion, his evaluation of the facts, his reading of the powers of the Executive branch, his desired policy approach not only over the head of a Branch of government but over the Constitution itself.
Yet the common good, democratic principles of limited government and separation of powers, and the rule of law all cry for judicial restraint, where doubts are to be resolved in favor of deference to a coequal branch.
Thankfully, the majority 11 upheld our constitutional principles.
Admittedly, many people are wary of President Duterte’s handling of the matter in Mindanao. But the fact is: he is the elected president for six years and not Justice Leonen.
And as much as some people may dislike the president, the remedy is not to expand the powers of the Court beyond that granted in the Constitution. It is simply to be more effective in the political process and encourage the Filipino people to vote better in the next elections.
Always remember: power once given will rarely be surrendered, and that the power to do good is also the power to do evil.
Jemy Gatdula is a Senior Fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.
Twitter @jemygatdula
The View from Taft — Armando J. Aguado
Known as primum non nocere in Latin, “first, do no harm” is often thought to be a part of the Hippocratic Oath that physicians take to symbolize their formal entrance into the profession. While the exact turn of phrase is nowhere to be found in the modern-day version of the Oath, the ideal it espouses remains at the core of every medical professional.
In my line of work, I have had the chance to see firsthand some of the significant challenges faced by the medical profession. Ranging from bed shortages, medicine unavailability, undermanned medical staff, and poorly maintained equipment, there is no shortage of concerns. One glaring area of opportunity is around the working conditions of hospital front-liners, particularly the resident doctors who work through graveyard shifts and take charge of the emergency rooms. To be a resident doctor, one must have received a bachelor’s degree, graduated from medical school, completed a year-long post-graduate internship (PGI), and passed the licensure exams. However, after all those years of schooling (roughly 4 years of college, 4 years of medical school, and 1 year of PGI), resident doctors in our country continue to be severely underpaid and extremely overworked.
Now, mindful that many doctors enter medicine with the noble purpose of helping others, let us set aside for a moment the part on being underpaid for the important work they do. What concerns me more are stories about how our resident doctors continue to work extended duties of up to 36 hours.
By way of comparison, if you knew that the driver of a vehicle you were about to ride in has been awake for that long, would you be comfortable having him or her drive for you? It would be a minor miracle if he or she could keep his or her eyes open, let alone drive safely. Why, therefore, shouldn’t the same standard apply to our doctors, who are every bit as human as the driver in our scenario?
In a 2008 study published by the Joint Commission Journal on Quality and Patient Safety, resident doctors working shifts longer than 24 hours were found to be at much greater risk for “occupational sharp injury, a motor vehicle crash on the drive home from work, and making a serious or even fatal medical error.” These findings have since been backed up in a 2013 report by Dr. P. Murali Doraiswamy of the Duke University Medical Center, who cited that doctors who were forced to work more than 24 hours made up to five times more serious diagnostic errors versus those on shorter shifts. It is thus no surprise that in the US, Canada, Australia, and Europe, governments and medical associations have restricted daily work for medical residents from between 16 to 28 hours (already inclusive of the hours for transitioning care).
In the Philippines, Senator Loren Legarda has taken up this cause and sponsored the creation of the Medical Residency Act of 2009, which seeks to limit working hours of residents to 24 hours and increase their compensation. Unfortunately, eight years later, the bill continues to languish in Congress with no end in sight.
This system badly needs remediation. In the absence of government action on the matter, hospitals should step in, do what is socially responsible, and join their foreign counterparts in ending this practice of 36-hour and “perpetual” duties.
Whatever cost savings are incurred for keeping residents on these highly extended duties should not outweigh the risks to the care of patients, or the health of the doctors themselves (not to mention the legal and reputational risks for malpractice cases). Otherwise, we will continue to play with fire with the safety of patients and the well-being of resident doctors nationwide.
“First, do no harm” should not just guide doctors, but should apply to them, too.
Armando J. Aguado is an affiliate of the American Psychological Association and a lecturer with the Department of Psychology of Mapúa University. He is taking his Doctor of Business Administration studies at De La Salle University.
armando_ricardo_aguado@dlsu.edu.ph
Fence Sitter — A. R. Samson
Musical theater often reserves a rousing, wake-up-the-nappers number for the end that also seamlessly segues into the curtain call where the cast is reintroduced in groups or solo, for their share of a standing ovation and scattered whoops of appreciation. The main stars fade back for this last number with the chorus line left behind, then reappear in ascending order of importance.
Can there be a more rousing ending than the finale of the fun musical Kinky Boots (showing at RCBC) where the whole cast prances around and bellows “Raise you up/ Just be,” all of them, yes all, male and female (“and those who haven’t made up their minds”) dancing on stiletto heeled thigh-reaching boots? For a musical with unfamiliar songs (albeit with words and music by Cyndi Lauper — but no “Time After Rime” or “True Colors”) but with great credentials (bestowed with the Tony, Olivier, and Grammy awards) the performance was awesome with the audience reaction to match. The dance numbers made me hold my breath for the possible ankle injury for the men in drag and heels. There was thankfully no call for audience participation — bring your own stiletto boots.
I always enjoy the curtain call as an opportunity to show appreciation and love for hard work made to look like simple fun. A prolonged applause punctuated with lusty screams of delight and dancing-in-place demonstrate the rollicking success of Kinky Boots. Movies too (like Mama Mia with an awkward Pierce Brosnan) in the end credits employ this device to show the actors performing one more number, or splicing together bloopers and outtakes. The Marvel movies have patented using the rolling end credits for a short trailer, a nasty device that moviegoers too eager to leave miss, thinking there’s nothing more to see but the name of the caterers and hairdressers.
Curtain calls need to be part of our culture. Applause is a way of showing gratitude for talent and hard work.
The curtain call’s equivalent in the corporate world is the “despedida party” for executives on their way out. This ritual aims to honor a departing colleague who gets treated and toasted (or roasted) by those staying behind. However, unless the retiree is leaving on his mandatory retirement or migrating to Canada to pursue career opportunities in retailing bed sheets, an exit is not always cause for celebration.
Of course, there’s the food and drinks, maybe a singer the honoree can duet with. The banquet allows people to do something enjoyable without having to talk to each other or speculate on the real story behind this occasion.
There are speakers that applaud the honoree — he always asked me to do work he passed off as his own, and that’s how I learned to outsource. This parade of speakers extols the honoree’s virtues. The accolades revolve around “niceness.” Note that this is different from making meaningful contributions to the bottom line.
Anecdotes fall under the category of thoughtfulness — he brought me home one time during a typhoon where he himself got stranded and had to check into a motel with his EA. These heroic stories are seldom work-related.
There is a video presentation to lighten up the mood. Pictures of the honoree are shown, when he still had hair and his waistline did not require industrial-strength belts. Some triumphal moments include video greetings from past bosses — I don’t remember his first name.
The tricky segment is the “acceptance speech.” Like the loser in a talent contest who still has to render a final number and say positive things about the judges, this segment requires self-control and the ability to be a good sport. This part is done at the end, when everyone is drunk and half of the invitees have gone home.
Should companies simply emulate the theater tradition of a curtain call? The honoree can just take a bow and be joined by a supporting cast for the dance number, not necessarily in red stiletto boots, but with the spotlight on the stage as the orchestra raises the pitch of the music for the audience to join in.
And then the house lights go up. The show is over, and the audience heads for the parking area, after a stop at the washroom. Probably, that may not work too well with corporate farewells.
There is after all a big difference between a curtain call… and the final curtain.
A. R. Samson is chair and CEO of Touch DDB.
Static — Marvin A. Tort
Grab and Uber, which are referred to as “ride-sharing” companies although seemingly perceived by the government more as transport businesses, have reportedly been each fined P5 million by land transportation regulators for using drivers that lack the necessary government permits.
Doing so violated the terms of Grab’s and Uber’s “accreditation” by the Land Transportation Franchising and Regulatory Board (LTFRB) as Transport Network Companies or TNCs. Meanwhile, erring drivers — or those driving for Grab and Uber without permit to do so — have also asked for amnesty.
I personally benefit from “sharing-economy” services like Uber and AirBnB. I have never tried Grab, nor Lyft, nor Wunder, or any other carpooling service. However, I have used AirBnB locally, and have used Uber in Metro Manila, in Cebu, and abroad. And to be honest, I find these services convenient and practical.
But, while I patronize these sharing-economy services, I still wonder how these businesses are seemingly allowed to operate in the grey. I am unclear as to which laws actually apply, and thus govern and regulate, them and others in the so-called “sharing economy.”
And this lack of clarity, in my opinion, appear to allow these companies to offer services to the public subject more to regulators’ “discretion” rather than clear and precise regulations. Should such a situation continue? Should regulators exercise more discretion rather than universally apply strict standards equally to all?
For example, according to LTFRB itself, the penalty for Grab’s and Uber’s recent violation should have been “revocation of accreditation.” But instead, they were just fined. And this, says LTFRB board member and spokesperson Aileen A. Lizada, is due to the fact that shutting down Grab and Uber is detrimental to the riding public.
In other words, LTFRB decided to hold back its punches in light of what it perceived to be the greater good. However, should this now be the “standard” for the exercise of the state’s regulatory functions? Should laws and rules be applied arbitrarily and with more discretion? Justice must no longer be blind? Will this lead to greater or lesser transparency and accountability in public governance?
An LTFRB official told reporters, “If we follow the penalty imposed by [our rules], the penalty is cancellation of accreditation, but we have been very constant in our stand that the LTFRB stakeholders are the riding public, so we will consider the riding public’s concern, because if we penalize by canceling the accreditation, we are penalizing our stakeholders.”
While I agree with the need for Grab and Uber to continue operating, and understand how and why they came about and have become popular transport alternatives, I don’t exactly agree with the LTFRB logic on this. Not that I want Grab and Uber to lose their accreditation. On the contrary, I want them to stay on.
However, it worries me that LTFRB is setting a dangerous precedent by allowing them to get away with what I consider a major transgression with a miniscule fine. Yes, I believe P5 million is just a drop in the bucket for these two firms. They got a slap on the wrist despite also putting the public at great risk for riding with drivers who lacked the necessary permits.
Grab and Uber justified their violation of LTFRB rules by claiming that they let “Transport Network Vehicle Service (TNVS) drivers” operate their cars and use the ride-sharing systems, even if their permits have not been issued, because of the great public demand for transportation.
Grab Philippines country head Brian P. Cu admits to some negligence in the faithful and strict compliance with government rules, but also claims “all was done in the spirit of competition” and “in the spirit of earnings for our Grab partners.”
He also said Grab was “actually quite happy with the [LTFRB] decision” not to cancel the company’s accreditation and to just fine it P5 million. Of course. Why wouldn’t he be? I mean, what’s P5 million compared to closing shop, right?
Even against a suspension, which leads to business losses during the suspension period, the P5 million fine is still the lighter penalty as Grab, and Uber, and their drivers, get to keep all the profits they made from operating illegally.
I cannot understand how can Grab justify breaking the rules in the “spirit of competition” and in the “spirit of earnings?” Yes, without Grab and Uber even temporarily, the public will suffer. But, the Republic will not fall.
LTFRB, in my opinion, should have instead canceled the Grab and Uber accreditation because of the violation. Pending application of all erring drivers should have been tossed out as well. Then, these TNCs and TNVS drivers should have been made to reapply under stricter conditions, without no assurances or guarantees of approval.
Moreover, these TNCs and TNVs should have been made to account for all the profits they made while operating illegally, and they should have been made to either refund these to customers or credit back to customer accounts, or to pay an equivalent fine to the LTFRB, with the fund to be used to improve LTFRB services.
In the case of LTFRB, I understand that it is already swamped with complaints against erring buses, jeepneys, and taxis. And now, it has to deal with issues involving Grab and Uber. Meeting public transport need is the priority, but this should not be at the expense of the law. There should be little to no incentive for breaking rules of violating the law. And, penalty should be hefty enough to deter violation.
Other than the relatively small fine, LTFRB also goes on to say that there is no deadline for Uber and Grab to remove from service those drivers without permits. Huh? Shouldn’t they be removed immediately? They lack permits and should not be operating, no matter what. I mean, what kind of signal is LTFRB sending all other public utility drivers? That it is ok to violate the law?
Moreover, is this not unfair to those who went through the process and expense of getting permits? Or, is this just LTFRB’s way of apologizing to Grab and Uber, and the public, for its failure to process all the driver applications in an efficient and timely manner?
Drivers justify operating illegally by claiming their permits are pending because their “applications were either not processed judiciously by the previous administration or did not make it to the cut-off as a result of the suspension.” In short, their response to bureaucratic lapse is to violate the law? Should this be acceptable? How different is this from extrajudicial killings?
And now the drivers ask for amnesty, like nothing happened, so they can “get the opportunity to start anew and set things straight.” But wait, while they operated illegally, didn’t they profit? Didn’t they make money? Simply put, profit was their incentive or motivation to violate the law, and not public service? Same with Grab and Uber? And now they ask for another chance?
With Grab and Uber now reportedly up for re-accreditation, perhaps LTFRB should review and rethink its processes to avoid a repeat of the present scenario. Like I said, I support Grab and Uber and their drivers, and I support their continued operations. But, there has got to be a better way of making sure that Grab and Uber and their drivers all operate legally and fairly — and all pay their taxes.
Marvin A. Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.
THE SECURITIES and Exchange Commission (SEC) is giving 2GO Group, Inc. until Friday to submit a written clarification on substantial revisions to its 2015 and 2016 audited financial reports.
In a statement sent to reporters via mobile phone message on Wednesday, the corporate regulator said its Markets and Securities Regulation Department sent a July 11 letter ordering the listed logistics firm “to provide clarification and additional information on the restatement,” including circumstances requiring the restatement; basis of the restatement and reclassification of accounts, “discussing the impact of the newly adopted accounting policy” and overall impact of the revisions on the company’s operations and financial condition, among others.
“The company is required to submit the written clarification on the restatement by July 14…” read the text sent by Armando A. Pan, Jr., officer-in-charge of SEC’s Office of the Commission Secretary.
The revisions had resulted in about a billion pesos slashed from 2015 and 2016 profits, as well as a net loss for the first quarter of this year from a previously reported net income.
SEC Chairperson Teresita J. Herbosa told reporters separately at the Philippine Stock Exchange on Tuesday afternoon that the regulator will quiz both the former and current management of 2GO.
“I don’t think they are normal,” Ms. Herbosa said of the changes, adding that if the discrepancies are “really that big, that calls for a really big investigation.”
“Financial statements originate from the company’s finance officials. They will also be held liable if proven there is fraudulent misrepresentation or even deficiencies — meaning failure to comply with international financial reporting standards, internationally accepted principles of accounting,” Ms. Herbosa explained.
The firm that conducted the audit may also be sanctioned, she added, in this case R.G. Manabat & Co., the local partner of international accounting firm KPMG that has since stood by the results of its work.
“… [F]ollowing our authority to accredit auditors when they do publicly listed companies, we will have to look at whether we have to revoke and impose penalties on them.”
Asked how much in fines 2GO faces should it be proven to have misrepresented its financial standing, Ms. Herbosa replied: “It will not be less than a million pesos.”
“And then there is probably a daily fine of P10,000 at least since the time it was discovered and… attention has been called that there has been really wrong accounting,” she added. “So the penalties will run from that time.”
The new management of 2GO, led by businessman Dennis A. Uy’s Udenna Corp. and Henry Sy, Sr.’s SM group hired SyCip Gorres Velayo & Co. (SGV) to conduct a special audit after they took over the logistics company in April.
Among others, that audit zeroed in on receivables as “key audit matter”, resulting in P3.86 billion worth of receivables in the first quarter that exclude doubtful accounts of P1.46 billion.
It also reduced consolidated revenue “by the amounts that did not meet the revenue recognition criteria” amounting to P53.7 million and P19.1 million for the three months ending March 31, 2017 and 2016, as well as P222 million and P34.7 million for the years ended Dec. 31, 2016 and 2015, respectively.
Neither did 2GO meet in some cases the minimum current ratio and the maximum debt-to-equity ratio required by the company’s long-term loan agreements, resulting in reclassification of some noncurrent liabilities to current liabilities — or those falling due within a year. That resulted, for instance, in current liabilities ballooning 39% to P12.119 billion in the first quarter from the original P8.718 billion.
“However, the group has not received a notice of default from its creditors and the group continues to pay the long-term loans based on original credit terms,” the revised report read.
SGV’s review also significantly altered bottom lines, with net income for 2015 cut by 90% to P105.13 million from the P1.08 billion previously reported, 2016 profit slashed by 74% to P344.03 million from P1.35 billion, and this year’s first quarter recording a P264.863-million net loss from a P267.562-million net income originally.
Ms. Herbosa told reporters: “This time, we are going to prioritize this because of the reports regarding the over-inflated figures,” adding that the corporate regulator wants “the parties to explain why that happened.”
“It will probably entail a special audit,” she said, separate from the SEC’s evaluation of companies’ regular reports.
It will take the corporate regulator three weeks to a month to complete the special audit.
In a statement released on Tuesday, Mr. Uy — speaking as chairman of Chelsea Logistics Holding Corp. that owns about a third of 2GO — said the restated items are non-cash and non-recurring, hence, “[t]he prospective profitability of 2GO remains strong.”
Trading of 2GO shares resumed yesterday after a two-day suspension on July 10 and 11 upon the release of the restated results.
From a closing price of P23.30 each on Friday last week, 2GO stocks yesterday dropped as much as 27% to P17 apiece before significantly paring losses to close just 2.15% weaker at P22.80 per share. — Arra B. Francia
By Melissa Luz T. Lopez
Senior Reporter
FOREIGN BANKS can still find room in the Philippines to cash in on its growth story, Moody’s Investors Service said, noting that sound operating conditions can accommodate new players despite aggressive lending by existing players.
“Right now, where the Philippines is, there continues to be room for growth for the banking system. While there are good propositions for bank consolidation efforts, there continues to be room to accommodate more entrants in the market,” Moody’s vice-president and senior analyst Simon Chen said in a recent roundtable discussion with the media.
“We are seeing more and more foreign banks being involved in the banking system. If we look at overall banking system, there continues to be healthy competition.”
There were 599 banks in the Philippines as of end-March, fewer than the 602 lenders in business as of end-2016. Mr. Chen said the count declined as some small banks were forced into liquidation by regulators after these were found unviable.
Despite a few closures, branches expanded to 10,679 offices from 10,576 at end-2016, signaling continued growth of the financial system.
Moody’s maintained its “stable” outlook for the Philippine banking system in its mid-year update for Asia and the Pacific, noting that domestic economic conditions are likely to support bank profits and keep asset quality steady over the next 12-18 months.
In May, Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. said there were eight new Asian banks looking to enter the Philippines, which would add to nine foreign banks that set up in the country over the last two years.
Mr. Espenilla has said that more global banks see the Philippines as a viable business site, given a huge consumer market, robust overall economic growth and the government’s aggressive infrastructure push that provide opportunities to expand their loan portfolios. These players are searching for new drivers of growth, as prospects in more developed economies in the region moderate.
Mr. Chen added that he expects big banks to see higher non-performing loans as the lenders “refocus” credit lines to the riskier sectors of consumer and small-scale firms, but said that this is unlikely to erode the industry’s generally strong footing.
Bad debts held by Philippine banks accounted for just 1.98% of their total loans as of end-May, lower than the 2.23% share recorded in 2016’s comparable five months, according to latest available BSP data.
In a July 11 report, analysts at BMI Research said they expect bank lending to rise by 17% this year from 2016’s 17.3% increase.
“Our constructive view on the Philippine economy has also been confirmed by improving corporate profitability, and we expect this to have a positive effect on asset quality and profitability of banks over the coming quarters,” their report read, citing the first quarter’s relatively fast 6.4% gross domestic product growth.
Banks’ hefty capital buffers also provide a degree of comfort for local players, as these assure that they have more than enough to compensate for a sudden funding crunch or big-time credit defaults, BMI said.
Universal and commercial banks reported a capital adequacy ratio at 14.38% as of end-2016, which is well above the BSP’s 10% minimum requirement and the international eight percent standard.
