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Volatility may persist after ‘wild’ April for market
VOLATILE TRADING is expected to continue this month after a rocky April for the Philippine stock market, analysts said.
On Tuesday, the Philippine Stock Exchange index (PSEi) dropped by 1.02% or 69.15 points from the previous day to end April at 6,700.49, while the broader all shares index went down by 0.48% or 17.34 points to end at 3,525.94.
Month on month, the PSEi declined by 2.9% or 203.04 points from its 6,903.53 close on March 27.
“April saw the year’s first major correction as the market quickly priced in the decreasing probability of interest rate cuts this year as well as the heightened risk of wider geopolitical conflicts,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
“It was also a particularly volatile month, with the index posting its highest and lowest levels since the start of 2024, and for a time, all index gains for the year were erased.”
Iran on April 13 launched more than 300 drones and missiles against Israel, its first direct attack on the country, in retaliation for a suspected Israeli air strike on its embassy compound in Damascus on April 11 that killed elite military officers, Reuters reported.
The month’s worst close was logged on April 16, with the PSEi hitting 6,404.97, lower than the end-2023 finish of 6,450.04, amid fears that the conflict would escalate. Easing tensions have allowed the index to rebound.
“April has been a wild ride. We saw the market attempt to break above 7,000, only to drop back down to 6,400 on geopolitical and inflation concerns. Now we’re halfway back to 7,000 again as first quarter earnings start to trickle in,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.
For this month, “market choppiness” is expected to persist as lingering inflation concerns are expected to keep central banks at home and abroad hawkish, Mr. Colet said.
The US Federal Reserve was set to announce its latest policy decision overnight, with markets expecting it to keep its target rate at 5.25%-5.5% for a sixth straight meeting amid sticky inflation.
The Bangko Sentral ng Pilipinas is expected to follow suit and keep its policy rate at a 17-year high of 6.5% for a fifth straight time at its own meeting on May 16 due to elevated prices of key commodities like rice due to the impact of El Niño.
“Hopefully, the market can sustain the momentum heading into May, although I’m a bit cautious because there’s a saying in the market to sell in May and go away,” Mr. Garcia said.
“Historically, May is not a good month for the stock market, but hopefully we’ll get a stream of good earnings… Based on what we have so far, it looks like this will be a good earnings season,” he added.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort put the PSEi’s major support at 6,360 and major resistance 6,800-6,820. — Revin Mikhael D. Ochave with Reuters
PHL trade talks with UAE expected next week
THE PHILIPPINES is expected to start the first round of negotiations for a comprehensive economic partnership agreement with the United Arab Emirates (UAE) next week, with a target to wrap up talks within the year, the Trade department said.
Undersecretary Allan B. Gepty of the Department of Trade and Industry told reporters that the Philippines will start the first round of talks on May 6.
“That is, of course, a very important free trade agreement (FTA) for the Philippines given that we have a lot of professionals and also businesses in the UAE,” Mr. Gepty said.
“Definitely, an FTA will be a big help for them as far as a stable business environment is concerned, and of course, in the same manner, it’s also important for UAE investors here in the Philippines because, as always, a stable business environment would really encourage more investment in this country,” he added.
Mr. Gepty said that the agreement will cover market access, intellectual property, competition, digital trade, and government procurement.
“And given the importance of the FTA, we hope to finish the negotiations within the year in time for, if I’m not mistaken, the 50th anniversary of our diplomatic relations with the UAE,” he said.
“So, if we can conclude that within the year, that would be a good milestone in our diplomatic relations, particularly economic relations,” he added.
He said that the negotiations will take place alternately in the UAE and in the Philippines, with the first round in Dubai.
“In the first round of negotiation, basically, it will focus on… the terms of reference. We’ll have to work within those terms of reference (in later sessions),” he said.
“In the first round, we’ll have to work and negotiate on the text of the FTA. We hope to conclude as many chapters as possible,” he added.
Asked if there are any potential stumbling blocks in the talks, he said: “I see a lot of alignment when it comes to the trade and investment policy direction of the Philippines and the UAE, so that’s why I’m confident that I think we can conclude the negotiation within the year.”
He said that the Philippines will negotiate market access for its agricultural and industrial products as well as services.
“We want to secure a preferential arrangement for all our products of interest, from agricultural products to industrial products,” he said. “What is interesting in the case of the UAE is that the Philippines is very strong in exporting aerospace parts to the UAE.”
“We know that the UAE is also strong in the aerospace industry, as they have big airlines, so more than the parts, we are also eyeing services,” he added.
According to Tradeline Philippines, total trade between the Philippines and UAE grew over 5% to $1.9 billion in 2023. — Justine Irish D. Tabile
Sugar farmers proposing safety nets to go with easing of import process
SUGAR producers are calling for “appropriate safety nets” as the government eases entry requirements for agricultural imports.
In a statement, the Sugar Council — composed of three planter federations — urged the government to pursue programs to raise the competitiveness of the sugar industry and the rest of Philippine agriculture.
“The removal of the (Sugar Regulatory Administration’s) import rules, including its (power to set) fees and charges, would amount to loss of regulatory authority and SRA revenue,” it said.
Administrative Order No. 20 (AO 20) instructed the Department of Agriculture, the Department of Finance, and Department of Trade and Industry to simplify the administrative procedures for agricultural imports, while removing non-tariff barriers.
Under AO 20, the SRA was instructed to streamline and standardize sugar import rules. It was also ordered to admit more traders into the sugar import program.
In a position paper, the council said the current rules of the SRA cannot be considered barriers to be removed.
“The integrity of SRA and its ability to perform its mandate must be preserved,” it said.
It added that AO 20 can open the floodgates to sugar imports “that will kill the domestic industry.”
The Sugar Council had recommended a sugar import program based on the SRA’s analysis of market conditions prior to the start of the milling season. Industry stakeholders must also be consulted.
It added that imports should be subject to a so-called “trigger point” for bringing supply and demand into balance via imports.
The council is composed of the Confederation of Sugar Producers Associations, Inc., the National Federation of Sugarcane Planters, Inc., and the Panay Federation of Sugarcane Farmers, Inc. — Adrian H. Halili
Chipmakers see opportunity in growth of EVs, hybrids as gov’t weighs tariff changes
By Justine Irish D. Tabile, Reporter
THE semiconductor industry will be among the industries that expect to benefit from growing electric vehicle (EV) and hybrid electric vehicle (HEV) adoption, the chip industry association said.
Danilo C. Lachica, president of Semiconductor and Electronics Industries in the Philippines Foundation, Inc., told reporters on the sidelines of a briefing on Tuesday that electronics account for 90% of the components of both EVs and HEVs.
“So, yes, it does open up opportunities. But the thing is, until we have the infrastructure for EVs, like more charging stations and fast charging stations, personally, I’d rather go with hybrids first,” Mr. Lachica said.
“Eventually, EV will be the way to go. It’s hard to persuade jeepney drivers or even bus operators to wait 10 hours to charge an EV. We have to make sure that we have abundant fast charging stations for commercial use,” he added.
In March, the Tariff Commission held a public consultation to discuss the possible expansion of the coverage of Executive Order (EO) 12, which imposed zero tariffs on various types of EVs in order to promote green transport and cut carbon emissions.
The National Economic and Development Authority has proposed to add e-motorcycles and HEVs to the EO’s coverage.
The Department of Energy has said that the expanded coverage will help meet the targets of the Comprehensive Roadmap for the Electric Vehicle Industry (CREVI), while the Department of Trade and Industry has taken the position that expanded coverage will hinder efforts to rapidly expand the charging station network.
The coverage expansion is supported by the Chamber of Automotive Manufacturers of the Philippines, Inc., which said that the Philippines is recording growth in hybrid adoption, although the CREVI targets remain out of reach.
Trade Secretary Alfredo E. Pascual said a committee will meet on Friday to discuss the proposed expansion.
“We will consider their arguments, of course. But as we explained, the motivation for the lifting of the tariff on EVs is very clear: to increase the car population with electric engines for purposes of encouraging the setting up of charging stations,” Mr. Pascual told reporters on Monday.
“Hybrids do not need charging stations, and to be able to boost EV population, we need charging stations. And charging stations will only be set up if there are enough EVs to patronize them; that is why we are prioritizing EVs first,” he added.
For the meeting on Friday, Mr. Pascual said the committee will discuss whether there is room to broaden the scope of the EO.
“When the decision was reached to (remove) the tariff on EVs, it was very clear in our minds why we did it: to encourage the setting up of charging stations,” he said.
“Now we are going to broaden our scope… but I cannot speculate now because this is committee work,” he added.
Palay production drops 2% in Q1
PRODUCTION of palay, or unmilled rice, fell 2% year on year to 4.69 million metric tons (MT) in the first quarter, according to the Philippine Statistics Authority (PSA).
The PSA said first quarter output missed its projection of 4.82 million MT, based on the standing crop as of March 1.
It added that the harvest from irrigated areas was 3.6 million MT, while rainfed palay production was 1.09 million MT.
The region with the top palay production was Central Luzon with 775 thousand MT, followed by the Cagayan Valley with 754 thousand MT.
The Central Luzon and Western Visayas palay harvests during the quarter fell 11% and 3%, respectively. Palay production in the Cagayan Valley rose 15%.
The Department of Agriculture’s official view of palay output this year is that it should not fall below 20 million MT. In 2023, palay production was 20.06 million MT.
Corn production was 2.53 million MT in the quarter, up 1% from the same period last year.
Yellow corn production rose 2% to 2.08 million MT.
It added that white corn output slipped 5% to 445 thousand MT for the period. — Adrian H. Halili
Imports necessary to ensure adequate supply during closure of key fishing grounds — DA
By Adrian H. Halili, Reporter
THE Department of Agriculture (DA) said fish imports are calibrated to ensure adequate supply when certain fishing grounds are closed to allow fish species to regenerate.
“Preparations are made prior to the start of the closed fishing season, there is transparency immediately as to how big (the import volumes will be),” Agriculture Assistant Secretary and Spokesperson Arnel V. de Mesa told BusinessWorld.
Last week, the DA approved the import of 25,000 metric tons (MT) of pelagic fish in anticipation of the three-month closed season in key fisheries.
“Kumbaga, hindi ’yung kung kailan may problema na at saka ka pa lang mag-announce ng imports (We don’t wait until the problem is here before announcing imports),” he added.
Under Memorandum Order No. 17, commercial fishing operations are allocated 80% or 20,000 MT, with the remaining 20% or 5,000 MT going to fisheries associations or cooperatives.
“The only good thing about it now is that it can be programmed right away. Because fisheries will close again by Nov. 1 in North East Palawan, and by Nov. 15 in the Visayas,” Mr. De Mesa said.
The fisheries where closed seasons are declared late in the year include northern Palawan, Ilocos, Negros Occidental, Capiz, and Cebu.
Sardine fishing is not allowed in northern Palawan between Nov. 1 and Jan. 31. Herring and mackerel cannot be caught in the Visayan Sea between Nov. 15 and Feb. 15.
Closed seasons are authorized by Republic Act No. 8550 or the Fisheries Code.
Last year, the department approved fish imports of 35,000 MT for sale in wet markets.
David B. Villaluz, chairman of the Philippine Association of Fish Producers, Inc. said that the DA’s importation plan may end up competing with aquaculture products.
“This is disadvantageous to aquaculture during the latter parts of the year. Duon kami bumabawi, dun magpro-produce ang aquaculture to offset supply during the closed fishing season, (That’s when we make up for the slower parts of the year. That’s when we hope to produce more when closed fishing season brings down supply),” Mr. Villaluz told BusinessWorld by phone.
In 2023, fisheries production dropped 6.5%, accelerating the 5% decline recorded in the prior year, according to the Philippine Statistics Authority.
Agriculture Secretary Francisco P. Tiu Laurel, Jr. has said that fish imports must arrive before Jan. 15.
Philippines lagging other jurisdictions in taxing digital transactions
By John Victor D. Ordoñez, Reporter
A 12% VALUE-ADDED TAX (VAT) on digital transactions is long overdue, with the Philippines lagging many countries in implementing one, a tax professional said.
“We are actually late in the game in taxing foreign digital service providers,” Eleanor L. Roque, tax principal of P&A Grant Thornton, said in a Viber message.
“If the government does not tax digital transactions, it is ignoring a good source of taxes.”
Senate Bill No. 2528, which seeks to require foreign online streaming platforms with subscribers in the Philippines to pay 12% VAT, is set for floor debate at the chamber.
Under the measure, nonresident electronic marketplaces will be required to withhold and remit VAT on transactions that are coursed through their platforms, if the buyer is in the Philippines.
The House of Representatives approved a similar measure in November 2022.
At least 15 countries, including France, Italy, Spain and the UK have laws on digital service taxes, according to PwC.
Calixto V. Chikiamco, Foundation for Economic Freedom president, said digital taxes would “level the playing field” between online businesses and conventional businesses.
The government should earn hefty revenue as many transactions are now occurring in the digital space on nonresident platforms.
Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila, said such a measure would make these digital services more expensive for consumers.
“The large online companies will naturally transfer the taxes to the consumers, thus resulting in a greater wedge between buying and selling prices, which in turn raises prices and reduces the amount of online transactions,” he said via Messenger chat.
Last month, the Asian Development Bank said the government should consider expanding taxes for digital services and enhance revenue collection efforts.
The Department of Finance has said it “seeks to level the playing field between local and foreign digital service providers by clarifying that services provided by the latter in the country are subject to VAT.”
It said the measure is expected to bring in P83.3 billion in revenue from 2024 to 2028.
“This measure should obviously increase revenue, but it (Senate) should first figure out how to enforce the measure on nonresident personalities,” Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said via chat.
Gov’t urged to remove obstacles to extraction of ‘green’ minerals
POLICIES hindering the extraction of “green” minerals must be removed to facilitate the transition to renewable energy, an analyst said.
“Though the Philippines is known to have virtually untapped reserves for critical minerals such as copper and nickel, there is an urgency to expand capacity to harness these resources to supply the surging demand driven by the global transition to clean energy technologies,” Victor Andres C. Manhit, president of Stratbase ADR Institute, said in a Viber message.
The Philippines is under pressure to transition to more renewable sources of power as its sole commercial source of indigenous gas, the Malampaya field, is expected to be effectively depleted by 2027.
“To fully unlock the potential of the mining industry and effectively capitalize on the opportunities at hand, it’s crucial to ensure a stable and conducive policy environment,” Mr. Manhit said.
“This involves addressing regulatory roadblocks, streamlining permitting and regulation procedures for mining projects, enacting progressive and competitive mining fiscal regimes, harmonizing national and local mining taxation, and fostering an environment that attracts investors, among others,” he added.
The United Nations Conference on Trade and Development (UNCTAD) said that global production levels of critical minerals are insufficient to limit global warming to 1.5°C under the Paris Agreement.
“Global investment in critical energy transition minerals is not keeping pace with escalating demand,” UNCTAD said in a study.
The Philippines seeks to expand its share of renewables in the power generation mix to 35% by 2030 and to 50% by 2040.
Nickel, cobalt, and copper are deemed essential for electric vehicles solar panels, and lithium-ion batteries.
“I am sure the market will adjust when they see the need for more raw materials, i.e., produce more when they see the market needs more,” Jose M. Layug, Jr., president of the Developers of Renewable Energy for Advancement, Inc., said via Viber.
However, Philippine resource extraction should not come at the expense of the environment or communities near mining sites, Green Thumb Coalition convener Jaybee Garganera said.
“We caution both the government and the industry that this push for the transition minerals does not create more ‘sacrifice zones’” — where communities and ecosystems are destroyed for private profit and government revenue in the name of meeting global demand for nickel, Mr. Garganera said in an e-mail. — Beatriz Marie D. Cruz
Philippines says China has raised tensions, leveled up water attacks
THE PHILIPPINES on Wednesday accused China’s coast guard of elevating tensions in the South China Sea after two vessels suffered damage from water cannon use by Beijing.
The Philippine Coast Guard (PCG) also said the Chinese Coast Guard has leveled up its aggression given its more forceful attacks.
“The Chinese Coast Guard now has elevated the tension and the level of their aggression as well towards the Philippine Coast Guard (PCG) vessel,” PCG spokesman Jay Tristan Tarriela told a news briefing on Wednesday.
“This is the first time that we can say that a coast guard vessel has been subjected to a direct water cannon with that kind of pressure that even resulted in structural damage,” he said, noting that “Goliath is becoming more Goliath.”
“They don’t hesitate to use brute force to violate international law,” he added.
Philippine officials have said a coast guard ship and a fishery vessel were damaged when Chinese coast guard vessels fired water cannons at them while on their way to the disputed Scarborough Shoal on Tuesday to help Filipino fishermen.
China has previously used water cannons against Philippine Navy-crewed civilian supply vessels in the region.
The PCG on Tuesday said two China Coast Guard ships used jet stream water cannons against its vessel sailing some 1,000 yards away from the Scarborough Shoal, resulting in damage to its railing and canopy.
The Bureau of Fisheries and Aquatic Resources vessel, which was also rammed by Chinese vessels three times, had damage to its ventilation, electrical, navigation and radio systems. It also sustained superficial hull damage.
In 2016, a United Nations-backed tribunal in the Hague voided China’s expansive claims in the South China Sea. It also upheld the rights of small-scale Filipino and Chinese fishermen to fish at Scarborough Shoal.
The shoal is 240 kilometers west of the main Philippine island of Luzon and is nearly 900 kilometers from Hainan, the nearest major Chinese landmass.
A spokesperson at the Chinese Embassy in Manila said Scarborough Shoal, which it calls Huangyan Dao, “has always been China’s territory” and urged the Philippines to “stop making infringement and provocations at once and not to challenge China’s resolve to defend our sovereignty.”
“China is incrementally increasing its aggression against the Philippines, while also trying to stay below a level that might result in a direct triggering of its 1951 Mutual Defense Treaty with the United States,” said Raymond M. Powell, SeaLight director at the Gordian Knot Center for National Security Innovation at Stanford University.
While China’s actions are intended to signal its determination to assert its so-called “historic rights” to parts of the waterway, they are also “generating unprecedented reputational costs that Beijing won’t find it easy to repair,” he said in an X message.
“China may believe it is winning the battle for the South China Sea, but it is losing far more ground across a number of other fronts by its naked aggression,” Mr. Powell said.
“We have Manila to thank for stripping away Beijing’s false veneer of respectability and showing us the full extent of its mendacity,” he added.
The Philippines’ traditional and nontraditional allies have condemned China’s actions, with the US saying they were “detrimental to regional peace and stability.”
The Philippine Coast Guard on Tuesday also said the Chinese Coast Guard had installed a 380-meter floating barrier that “covers the entire entrance of the shoal.”
The European Union’s top envoy in Manila, Luc Veron, said “dangerous maneuvers, water cannoning, floating barrier or any aggressive behaviors, are a threat to safety of life at sea, the freedom of navigation and the prohibition of the use of force or coercion.”
France’s embassy in Manila said in a statement it opposes “any threat or use of force contrary to international law.”
“The use of water cannons on PCG vessels risks safety and undermines regional stability,” the embassy of New Zealand in Manila said in a statement. “We call for a peaceful resolution of disputes in full accordance with UNCLOS (United Nations Convention on the Law of the Sea).”
The United Kingdom, Japan, France, Australia, Canada and Finland also expressed concern over the incident.
“The Philippines will not be deterred from pursuing legitimate and lawful activities in our maritime zones, including Bajo de Masinloc (Scarborough Shoal), which is a vital source of livelihood for our fisherfolk,” the National Security Council said in a statement on Tuesday night. — Kyle Aristophere T. Atienza with Reuters
Congressman seeks probe of BI over Chinese influx
By Kenneth Christiane L. Basilio and Chloe Mari A. Hufana
A CONGRESSMAN has sought a probe of the Bureau of Immigration (BI) for allegedly allowing the entry of at least 1,500 Chinese nationals to study in Cagayan province in northern Philippines, citing potential bribery.
In a privilege speech on Tuesday night, Manila Rep. Bienvenido M. Abante, Jr. said the agency should how the students got their visas. He also filed a resolution calling for the investigation.
“The chief of the Immigration Regulation Division should be summoned and asked to explain how these Chinese nationals entered our country,” he told the plenary.
Immigration Commissioner Norman G. Tansingco has said 1,516 Chinese nationals in Cagayan had been given student visas. More than 400 Chinese nationals are physically attending schools in the province, while others are enrolled in distance learning.
Lawmakers from both Houses of Congress have sought an investigation of the influx of Chinese students in Cagayan as a matter of national security.
“The Bureau of Immigration will fully cooperate with the inquiry and agrees that the actions of foreign students in the country are worth looking into by government intelligence agencies as it is necessary for the preservation of national safety and security,” bureau spokesperson Dana Krizia M. Sandoval told BusinessWorld in a Viber Message.
Mr. Abante said the House of Representatives should look at the country’s visa system. “If initially they were allowed to enter on the strength of tourist visas, [the bureau] should explain how they were able to obtain student visas.”
“While these Chinese nationals are ‘students,’ their influx and their choice of school location should awaken and alarm us,” he added.
Meanwhile, a diplomacy expert said lawmakers might be justified in seeking to investigate the influx of Chinese students in Cagayan after recent cyber-attacks by Chinese hackers.
“Given the prevalence of modern tactics in warfare today including hacking and other cybersecurity attacks, it is not surprising anymore that the probe is being viewed from a national security point of view,” Josue Raphael J. Cortez, diplomacy and international affairs lecturer at the De La Salle-College of St. Benilde in Manila, said in a Facebook Messenger chat.
“In recent months, we have seen innumerable hacking on state websites, and given that China is among the primary countries utilizing cyber-warfare today, there is a possibility that some of these students are now being considered to be state intel,” he added.
Critics have slammed the anti-Chinese sentiment as Sinophobia amid growing tensions between the two nations in the South China Sea.
Tensions between the Philippines and China have worsened in the past year as Beijing continues to block resupply missions to Second Thomas Shoal, where Manila grounded a World War II-era ship in 1999 to assert its sovereignty.
On Tuesday, the Philippines accused China’s coast guard of harassment and damaging one of its boats near the Scarborough Shoal in the South China Sea.
The Philippine Coast Guard (PCG) said the two vessels stood their ground at the shoal, a key battleground in the South China Sea, but one sustained damage from the use of water cannons by two Chinese Coast Guard ships on April 29.
‘RIDICULOUS’
Last month, Surigao del Norte Rep. Robert Ace S. Barbers sought the investigation, saying some of the students might be spies.
The probe is not based on racism and Sinophobia, but a matter of national security, he said.
The Department of Information and Communications Technology in February linked the hacking of several state websites to internet protocol (IP) addresses from China.
Teresita Ang-See, founding president of Filipino-Chinese organization Kaisa Para Sa Kaunlaran, called the probe “ridiculous.”
“It is ridiculous,” she said in an e-mailed reply to questions. “What spies and what will they be spying on? In a country where nothing is secret, you don’t need students to spy on you.”
Most of the foreign students enrolled in Cagayan schools are masteral and PhD students, she pointed out.
“Now, they felt devastated because their hard work went down the drain when do-gooders destroyed the repute of their school and denigrated the degrees they will obtain,” she added.
Mr. Cortez said the students might just have been attracted to low-cost schools in the Philippines.
Ms. Ang-See said the Philippines “renounces war as an instrument of national policy.” She urged lawmakers to keep that in mind for diplomacy to work.
“Although diplomatic avenues have been criticized for taking a long time to [bring about] a peaceful resolution to the conflict… it is still the most viable [way],” Mr. Cortez said.
A United Nations-backed tribunal in the Hague ruled in 2016 that China’s expansive claim had no legal basis, a decision Beijing has rejected.
CoA flags PCGG advances for condo repairs
THE COMMISSION on Audit (CoA) has flagged the Presidential Commission on Good Government (PCGG) for using cash advances as payment for the repair and development of six condominium units.
The PCGG released P1.6 million worth of cash advances as payment for the renovation of the units, which is illegal, state auditors said in a report.
The agency created in 1986 to go after the alleged ill-gotten wealth of the late dictator Ferdinand E. Marcos, Sr. and his cronies also failed to provide detailed engineering plans for the project, CoA said.
“Various expenses incurred for the repair and improvement of six condominium units at Galeria de Magallanes aggregating ₱1.614 million as of Aug. 31, 2023, were paid through cash advances,” it said.
“[This is] not in accordance with (a) CoA circular… prohibiting the grant of cash advance for payments on account of infrastructure projects,” according to the report.
The PCGG did not reply to a Facebook Messenger chat and e-mail seeking comment.
The agency also granted a cash advance worth P500,000 to a consultant to appraise sequestered and surrendered properties in Cavite, CoA said.
“[This] is beyond the allowable limit of 15% of the total contract price,” CoA said. “Moreover, the advance payment was not requested in writing by the consultant and not secured by an irrevocable standby letter.”
State auditors also flagged the PCGG’s purchase of building materials after it exceeded the initial budget allocated for the contract by P1,860.
“The purchase order for the procurement of various construction materials amounting to P306,610 was questionable as the same exceeded the approved budget for the contract of P304,750,” CoA said in the report.
It also noted that the bid was awarded to the second-lowest calculated bidder “for no good reason.” “Had the award of contract been made to the lowest bidder, the agency could have saved at least P53,355,” state auditors said. — Kenneth Christiane L. Basilio