MADRID -— Spain has seized ancient gold artefacts valued at €60 million ($63.6 million) stolen from Ukraine after thieves were caught trying to sell them in Madrid, Spanish police said on Monday.
The 11 pieces, primarily jewelry including intricate necklaces, bracelets and earrings, are dated from the Greco-Scythian period between the 8th and 4th centuries BC, police said.
The items were exhibited in a Kyiv museum between 2009-2013, and were smuggled out of Ukraine in 2016, Madrid National Police said in a statement, without identifying the museum.
The artefacts had forged documents to make it look as if they belonged to the Ukrainian Orthodox Church, police said.
Three Spanish and two Ukrainian nationals were arrested as part of the investigation, which began in 2021, after one of the pieces — a gold belt with rams heads — was sold in a private sale in Madrid. — Reuters
AN AFFORDABLE internet provider, a job placement hub, and a dark warehouse — these are the other possibilities for a technology-enabled sari-sari store, according to entrepreneur Ibrahim R. Bernardo.
Driven by a vision of a high-tech future for Philippine small retailers, Mr. Bernardo and his team transformed their enterprise solutions startup to offer complete tech support for sari-sari store owners.
Mr. Bernardo, co-founder and chief marketing officer of Packworks, said the company has adjusted its offerings to meet the tech demands of sari-sari stores, much like those of large firms.
“Pre-pandemic, it was our CSR [corporate social responsibility], and we were helping around 5,000 sari-sari stores with our app,” he told BusinessWorld on how the company started.
Sari-sari stores are small retail shops commonly found in residential areas in the Philippines, selling a wide range of consumer goods, from food and beverages to household items.
There are about 1.3 million sari-sari stores in the Philippines, which 94% of consumers depend on for daily needs, according to the Asian Preparedness Partnership.
Excluding those without paid employees, there are 40,549 sari-sari stores in the country, according to the Philippine Statistics Authority (PSA).
Packworks provides these small entrepreneurs with an ecosystem of solutions tailored to their market, Mr. Bernardo said. “We cater to the agri sector, carinderias, small businesses, and professional or ‘super’ sari-sari stores,” Mr. Bernardo said.
He said that super sari-sari stores can avail of an almost full enterprise resource planning solution, which includes inventory management and insights dashboards.
“We have a CRM [customer relationship management system] where they implement their own loyalty promo system because there are sukis — individuals or small sari-sari stores that go to them,” he added.
“The successful sari-sari stores even have local delivery, so they will have their husband, maybe, delivering and taking orders from the community on a motorcycle or pedicab,” he said, noting that 75% of sari-sari store owners are women.
Mr. Bernardo also noted the integral role of technology in recognizing sari-sari store owners as key opinion leaders in their respective communities.
“We amplify and put those super sari-sari stores on a podium and give them tools so that the smaller stores are inspired and emulated,” he said on directing efforts to maximize the potential of small community retailers.
“There are so many [possibilities] once you get them connected and provide value.”
MARKET DATA However, creating work in the social enterprise is similar to running a marathon and shooting oneself in both feet, Mr. Bernardo said.
“You got two bottom lines: your KPIs [key performance indicators] for social impact, and keeping the lights on and scaling,” he said.
Providing tech and data systems to small retailers happened to yield actionable, real-time sales insights for brands of fast-moving consumer goods, he noted, which became a revenue generator for Packworks.
“For the big brands, they’ve never seen this data before,” he said on Sari IQ, a business intelligence by-product of the value Packworks adds.
“We were one of the few people that were able to provide data on how well their products were doing versus their competition, whether it was in-stock or out-of-stock in these stores,” he added.
“And that’s how we make money,” he said on precision marketing insights by category at a sari-sari store level being the company’s main profit source.
The data was also used to track prices for certain categories, which is where the company saw discrepancies in the reported inflation rate of the national statistics agency versus the actual cost of goods in sari-sari stores, where most Filipinos buy from, Mr. Bernardo noted.
Packworks said the average price of food items purchased from small retailers in the Philippines rose 15.62% in January, while the official food inflation rate reported by the PSA was at 11.2% in the same month, BusinessWorld reported in February.
“You’re looking at a 4.4% impact earlier this year on the cost of goods, and that’s painful,” Mr. Bernardo said. “The other challenge sari-sari stores faced was the fact that prices were fluctuating so much.”
“Can you image a small store with 200 SKUs [stock keeping units] and almost every week or twice a week, the prices are changing?” he said. “It is so incredibly difficult for them to know if they’re making money, how much should they add, and they’re doing this analog.”
“Access to brands, helping their businesses with the tools specific to them, margin protection — there are many ways we’re helping the stores, but the challenges are still there.”
He noted majority of stores aided by Packworks have increased sales, “doing better with the app than without it.”
“That is outpacing inflation, and I guess that’s the most we can do at this point in time.”
GROWTH Mr. Bernardo said that the company’s next stage is rolling out radical, data-driven financial products that help sari-sari stores grow on a micro-level.
“Our goal is to lower the cost money,” he said on providing credit assistance to small sari-sari store owners, especially those who go back and forth from super sari-sari stores for stock. “They’ve been doing this for years, day in and day out.”
“What if I gave this person four grand through the superstore, and it’s not cash? It’s through the products that I know they sell,” he said. “They save time and money, and I know, because of the history of their transactions with us, that they’re professional and good for it.”
“These are little tactical things that we can do to make transactions more frictionless and allow them to grow their business more.”
Packworks is targeting to onboard 300,000 sari-sari stores in the Philippines to its ecosystem by the end of the year and another 200,000 in the next six to eight months, from the current 270,000 it has.
“It’s not just dreaming that this is something we could bring to other countries and help sari-sari stores and nanays there,” Mr. Bernardo said on the company currently working with multinational companies for expansion abroad.
“We’re looking at countries in the region. Africa isn’t out of the picture,” he added on the company’s plans to expand in countries that have a per capita income of $3,000 and below.
THE GOVERNMENT fully awarded the reissued Treasury bonds (T-bonds) it offered on Tuesday at a higher average yield amid rising US rates due to the ongoing war between Israel and Palestine.
The Bureau of the Treasury (BTr) raised P30 billion as planned via the reissued 10-year bonds it auctioned off on Tuesday as total bids reached P48.872 billion, higher than the offered volume.
The bonds, which have a remaining life of nine years and 10 months, were awarded at an average rate of 6.954%, with accepted yields ranging from 6.8% to 6.999%.
The average rate of the reissued bonds was 27.9 basis points (bps) higher than the 6.675% quoted for the papers when they were last offered on Oct. 17. It was also 32.9 bps above the 6.625% coupon for the series.
The average yield was also 32.2 bps above the 6.632% quoted for the 10-year bond and 42.7 bps higher than 6.527% seen for same bond series at the secondary market before Tuesday’s auction, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data provided by the Treasury.
“The Auction Committee fully awarded the reissued 10-year Treasury Bonds at today’s auction. With a remaining term of nine years and 10 months, the reissued bond series 10-71 fetched an average rate of 6.954%,” the BTr said in a statement on Tuesday.
“The auction attracted P48.9 billion in total tenders, 1.6 times the P30-billion offer. With its decision, the committee raised the full program of P30 billion, bringing the total outstanding volume for the series to P90 billion,” it added.
The Treasury made a full award of its offer even as the bonds fetched an average yield that is “much higher” than secondary market levels, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message.
Rates rose after US Treasury yields reached fresh highs, he said, as investors sought safe havens due to the war in the Middle East.
“The average auction yield was also higher amid the lingering geopolitical risks due to the Israel-Hamas war for more than two weeks already, with a potential risk of volatility in global oil prices that could lead to higher inflation and policy rates if the war escalates in the Middle East,” Mr. Ricafort added.
The yield on the benchmark 10-year US Treasury note was up 0.8 basis point at 4.846% in Asian hours on Tuesday, following the previous day’s quick decline after a brief rise above 5.0%, Reuters reported.
The run-up in yields on the 10-year Treasury note, seen as a safe haven in times of economic uncertainty and a benchmark for global borrowing costs, has been driven in part by investors pricing in stronger US growth.
Israel’s military intensified its assault on Hamas militants in Gaza, as the United States and other global powers called for aid to continue flowing into the besieged strip to prevent an already grave humanitarian crisis from worsening.
Israel’s military said it had hit more than 400 militant targets in Gaza overnight and killed dozens of Hamas fighters, including three deputy battalion commanders.
Demand for the T-bond offer was also weak, causing yields to rise, Mr. Ricafort added.
The BTr wants to raise P150 billion from the domestic market this month, or P60 billion via Treasury bills and P90 billion via T-bonds.
The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — M.J.B. Poliarco with Reuters
ALTERNERGY Holdings Corp. said on Tuesday that it had secured approval from the provincial government of Quezon for its 55-megawatt (MW) Alabat wind power project.
“We will be long-term partners for the development of not just the Alabat Island but the entire province. Our Alabat Wind Power Project is committed to delivering sustainable energy and growth to our community,” Alternergy President Gerry P. Magbanua said in a media release.
According to the company, the Quezon Provincial Development Council (PDC) described the wind project to be beneficial to the socioeconomic development of the province and its constituents.
The project aligns with the province’s vision and mission of optimized utilization of resources and provision of infrastructure and support services, it added.
Earlier this month, the company said it had tapped BPI Capital Corp., RCBC Capital Corp., and SB Capital Investment Corp. to lead in raising the P12-billion project financing for its two wind projects.
The endorsement from the PDC is one of the remaining preconstruction clearances for the Alabat wind power project, which expects its notice to proceed with construction by the second quarter of 2024.
The other project up for debt financing is the 86-MW Tanay wind power project in Rizal province, which is expected to be completed by 2025.
Alternergy won the bid for the projects through its project company Alternergy Tanay Wind Corp., under the second round of the green energy auction program of the Department of Energy.
The program is a competitive process of procuring renewable energy supply by offering capacities to qualified bidders at a set maximum or ceiling price.
For the second half, the listed energy company managed to swing to profitability with a consolidated net income of P38 million from the P145.2-million net loss in the same period last year.
The energy company aims to develop up to 1,370 MW of renewable sources such as onshore and offshore wind, solar, and run-of-river hydropower projects.
At the local bourse on Tuesday, Alternergy shares closed unchanged at P0.86 apiece. — Sheldeen Joy Talavera
During a Sept. 26, 2023, inquiry, the Philippine Senate cited in contempt four officers and members of an organization in Visayas who were allegedly involved in human right abuses and criminal activities disguised under the veil of cult-like practices. The contempt citation was issued by the Senate after the members and officers of the said organization allegedly refused to admit their roles in the cult-like activities. The inquiry stemmed from a Senate Resolution dated Sept. 13, 2023, where Senator Bato dela Rosa directed the Senate’s Committee on Public Order and Dangerous Drugs to conduct an inquiry in aid of legislation regarding the activities of “heavily armed private army of extremist groups” in Socorro, Surigao, Del Norte.
The power to cite a person in contempt, exercised by both the Senate and House of Representatives, is a constitutional prerogative granted to Congress to ensure obedience and respect for its proceedings. Such authority allows Congress to ensure that witnesses, resource persons, and individuals summoned for inquiry will abide by the rules set by our constitutional legislative bodies. As held by the Supreme Court in the landmark case of Arnault v. Nazareno1, a legislative body cannot legislate effective laws without having the necessary information on the issues sought to be addressed by such laws.
Congress’ contempt power indeed has legal and historical underpinnings, going as far back as 1796 when the United States House of Representatives exercised this power against those attempting to unduly influence its members.2 In McGrain v. Daugherty3, the United States Supreme Court also affirmed Congress’ exercise of its contempt power, ruling that some form of compulsion is necessary for Congress to obtain information necessary for effective legislation.
In the Philippines, the 1987 Philippine Constitution admittedly does not explicitly grant Congress the power of contempt. Instead, Congress’ power of contempt is commonly referred to as an “implied power,” often regarded as a necessary consequence of Congress’ power to conduct inquiries in aid of legislation. Article VI, Section 21 of the 1987 Philippine Constitution deals with Congress’ power to conduct inquiries in aid of legislation and provides that “[t]he Senate or the House of Representatives or any of its respective committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of persons appearing in or are affected by such inquiries shall be respected.”
The nature of Congress’ implied contempt power was clearly defined and explained by the Supreme Court in Negros Occidental II Electric Cooperative, Inc. v. Sangguniang Panlungsod of Dumaguete.4 In that case, the Supreme Court described Congress’ contempt power as “sui generis” considering that it is a unique authority exercised by Congress for its own self-preservation. This is because Congress, being that branch of government entrusted with legislative power, has the right to assert its power and penalize acts of contempt directed towards its exercise of legislative functions. Hence, the implied power of Congress to cite persons in contempt primarily stems from its status as one of the three great branches of government, rather than solely from its exercise of legislative power. Congress may, therefore, exercise its contempt powers and cite persons who act contemptuously during inquiries in aid of legislation, which undoubtedly form part of Congress’ legislative powers under the Constitution.
Notably, Congress’ contempt power is not confined solely to the Senate or the House of Representatives. It may also be exercised by the respective committees established within each house of Congress. In Sabio v. Gordon5, Chairman Camilo L. Sabio of the Presidential Commission on Good Government argued that the Senate’s committees have no power to punish and cite him for contempt of Senate. In ruling that the Senate’s committees also exercise contempt powers, the Supreme Court emphasized that Article VI, Section 21 of the Constitution directly confers the power of inquiry to the respective committees within each house of Congress. Necessarily, any committee of Congress also has the authority to exercise all essential powers to fulfill its power of inquiry, including the power to cite a person in contempt.
On the other hand of the spectrum, recent cases have also underscored the importance of protecting the constitutional rights of persons appearing before congressional inquiries as mandated under Article VI, Section 21 of the Constitution. In the landmark case of Neri v. Senate6, the Supreme Court ruled that a valid exercise of Congress’ contempt power requires, a.) publication of its rules of procedure, and b.) respect for the rights of persons appearing before its committees. In Balag v. Senate7, the constitutional mandate that the rights of persons appearing before congressional committees must be respected was also used as basis to restrict the period of imprisonment of a person cited in contempt by the Senate. This is because the constitutional right to liberty can be violated when a person cited in contempt may be detained for an indefinite period without due process of law.
In the end, Congress’ exercise of this potent power carries with it an obligation to navigate the fine line between protecting the integrity of its proceedings and ensuring that the rights of persons appearing before its committees are respected. Congress’ power to cite a person in contempt remains an essential tool for the effective discharge of its legislative prerogatives. Be that as it may, it is important to remember that contempt of Congress is always subject to legal and constitutional limitations, lest we forget the Constitution’s mandate to protect the democratic ideals of the nation.
1 G.R. No. L-3820, July 18, 1950.
2 The Case of Robert Randall and Charles Whitney, Dec. 28, 1795 – Jan. 13, 1796 (Editorial Note),” Founders Online, National Archives, https://founders.archives.gov/documents/Madison/01-16-02-0092.
3 273 U.S. 135, 47 S. Ct. 319, 71 L. Ed. 580, 50 A.L.R. 1 (1927).
4 G.R. No. 72492, Nov. 5, 1987.
5 G.R. No. 174340, Oct. 17, 2006.
6 G.R. No. 180643, March 25, 2008.
7 G.R. No. 234608, July 3, 2018.
This article is for informational and educational purposes only. It is not offered and does not constitute legal advice or legal opinion.
Jaims Gabriel L. Orencia is an associate of the Litigation and Dispute Resolution department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
THE Philippine halal market has the potential to grow with current efforts from both the government and the private sector, the Philippine Exporters Confederation, Inc. (Philexport) said.
There is a “big chance” that the halal market in the Philippines will grow, and “we have hardly scratched the surface,” said George T. Barcelon, chairman and trustee of Philexport, in a phone interview with BusinessWorld on Monday.
Halal food follows the strict guidelines of Islamic dietary laws. The global halal market now covers sectors like clothing, pharmaceuticals, cosmetics, tourism, media, and more, beyond just food and beverages, the Department of Trade and Industry (DTI) said in a statement on Oct. 16.
Mr. Barcelon, who also chairs the Philippine Chamber of Commerce and Industry (PCCI), also expressed his hope that the Philippines could emulate countries involved in halal products, such as Thailand and Malaysia.
The DTI has partnered with global halal stakeholders, including regional powerhouses like Malaysia, Indonesia, and Brunei Darussalam. The department aims to learn from these countries to improve the Philippine halal industry’s credibility and integrity, it said.
Adroit Market Research expects the global halal market size to approach $3 trillion by 2029, growing at an annualized rate of 5.6% through the projected period.
Halal food has gained popularity among both Muslim and non-Muslim consumers. It is now seen not just as a religious mark but also as a sign of safe, hygienic, and reliable food, the research firm said on its website.
“I know we’re trying to work hard on this but I don’t know when… We’re still far from it… because first of all, we do have a Muslim population and they’re eating halal food, but you need to be competitive,” Mr. Barcelon said.
Philexport, PCCI, and the DTI have been working to expand the halal market in the Philippines, hoping to grow the country’s food and agriculture industry, he noted.
The DTI expects the Philippine halal industry to bring in P230 billion and create over 120,000 jobs for Filipinos in the next five years.
Such goals are achievable, said Mr. Barcelon. “But we must be competitive.”
The DTI said that the development of the halal industry aligns with its four primary objectives: fostering regional growth, achieving food security, enhancing and expanding micro- to medium-sized enterprises, and enabling job skills matching and skills upgrading. — Aaron Michael C. Sy
THERE’S a growing need for the European Central Bank (ECB) to rethink how soon it starts shrinking the €1.7-trillion ($1.8-trillion) stash of bonds it bought during the pandemic — or risk disorienting markets down the line.
At a meeting this week in Athens, the ECB is set to begin discussing ending reinvestments under the pandemic emergency purchase program (PEPP) before the current end-2024 cutoff. That would fully align quantitative-tightening (QT) efforts with interest rate policy, which has delivered an unprecedented 10 straight hikes to drag inflation back toward 2%.
Some officials see PEPP purchases, which can currently act as a first defense should the bond yields of euro-zone governments jump unreasonably, as a key instrument amid budgetary jitters in countries like Italy.
But there are compelling grounds to halt reinvestments more quickly: Doing so too far into next year, or to match the existing deadline, risks the move happening alongside rate cuts to buoy Europe’s struggling economy, sending mixed signals to investors.
“We wouldn’t be surprised if the ECB brings forward the end to PEPP reinvestments by several quarters,” said Reinhard Cluse, chief economist for Europe at UBS. “What’s important is that they have to make an announcement before they start cutting interest rates. Otherwise, communication will be very difficult.”
With borrowing costs to be left on hold this week for the first time since the ECB began lifting them more than a year ago, officials are increasingly focusing on other parts of their toolkit.
Bonds from a larger portfolio — amassed from 2015 during fears of deflation — are already being allowed to roll off. But with the key policy rate at 4% to try to constrain economic activity and tame prices, PEPP reinvestments have become an outlier.
There’s a “strong argument in favor of stopping PEPP reinvestments sooner than the end of next year” because that would be “consistent with our interest-rate policy,” Governing Council member Madis Muller said last month.
The ECB hasn’t updated the program’s guidelines since December 2021 — well before rate hikes started. Back then, it promised future roll-offs “will be managed to avoid interference with the appropriate monetary stance.”
Barclays economists reckon an average of about €18 billion a month comes due under PEPP, though there are no official disclosures.
With the option to invest the proceeds of maturing securities across the currency bloc’s 20 members, some policy makers are wary to forgo such sums should debt markets take fright at the growing impact of the ECB’s hikes to date.
Flexibility was used immediately after it was introduced as officials tilted reinvestments toward Italy, Spain and Portugal and away from Germany and France.
While markets have since been steadier, the latest rout in Italian bonds is a reminder of how quickly investor confidence can fade. Even some ECB hawks, like Slovenia’s Bostjan Vasle, are hesitant to relinquish a tool that could restore calm if needed.
That’s especially the case as delays in overhauling European Union fiscal rules could prolong the lifespan of existing arrangements — potentially forcing governments into sharp fiscal consolidations and threatening penalties that could rattle investors.
Coronavirus is now firmly in the rear-view mirror, leaving PEPP untouched is getting harder to justify.
“There are certainly some Governing Council members who’ll be concerned,” said Ulrike Kastens, an economist at German asset manager DWS. “On the other hand, bond reinvestments are expansive to a certain extent, so they don’t really fit into the landscape any longer.”
Comments from policymakers in recent weeks show the Governing Council is far from a consensus. A Bloomberg poll showed 43% of economists expect the ECB to bring forward the end to PEPP reinvestments — up from 39% before.
Ms. Kastens at DWS and her counterparts at Morgan Stanley are among those expecting a December announcement that reinvestments will start to be lowered as early as March, though a looming review of the ECB’s operational framework may mean more time is required.
Any concerns about breaking the pledge to maintain PEPP reinvestments through 2024 — a cost Dutch central-bank chief Klaas Knot said last month that he doesn’t think the ECB should incur “at this moment” — are likely to be overcome, according to UBS’ Mr. Cluse.
“The concept of forward guidance has been badly damaged over the past two years as a number of pledges by central banks were broken,” he said. “Compared with that damage, the additional credibility loss caused by shorter PEPP QT would in my view be quite limited.” — Bloomberg
THE Board of Investments (BoI) said it is expecting $4 billion worth of investment from two Chinese manufacturers of offshore wind equipment.
The two Chinese companies making towers, turbines and blades have recently visited the Philippines, Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo told reporters.
“Hopefully we can close it this year. They have been to the Philippines to look at different locations and I think they are already closing in on one particular location where they might be close to each other,” Mr. Rodolfo said.
He said that the Chinese companies expect to capture orders from offshore wind project proponents holding service contracts with the Department of Energy.
“They want to invest here because of the local demand and then the opportunity to make us as their hub for the region and also the other big markets like the US and Europe,” Mr. Rodolfo said.
On the sites being considered, he said: “It is impossible (for them to locate) inland, they should be situated near a port, for ease of transport from the manufacturing base to the project area,” he said.
He said that the two companies will be getting the standard set of incentives from the government, though it is likely they will qualify for a longer period to avail of incentives.
“They will receive the standard perks. But their investment will presumably exceed the threshold (that will allow) the President (the flexibility to offer) a longer incentive availment period,” he added.
The two companies hope to finalize their location decisions this year, the negotiations for which the government is closely monitoring, Mr. Rodolfo said.
In the nine months to September, approved BoI investments totaled P740 billion, more than double the year-earlier approvals of P362 billion.
Asked whether the BoI is still confident in hitting its P1.5-trillion investment approvals target this year, Mr. Rodolfo said: “We remain hopeful, but it is almost November.”
“The important thing is by the end of December our pipeline of very strong projects will be around that amount, P1.5 trillion,” he said.
THE Maharlika Investment Fund (MIF) may have a negative impact on the Philippines’ fiscal flexibility by denying the government access to the dividends of major state banks, a former central bank official said.
GlobalSource Partners Country Analyst Diwa C. Guinigundo, a former deputy governor of the Bangko Sentral ng Pilipinas (BSP), said Executive Order (EO) 43, which President Ferdinand R. Marcos, Jr. issued last week, overrides the law on dividends, which requires government financial institutions (GFIs) to remit at least 50% of their profits to the government.
“This move could impose both fiscal sustainability and financial stability consequences,” he said in a note. “By waiving its potential income from GFIs’ dividends to fund the MIF, the Philippine government is also denying itself of additional revenue.”
“Unless this is compensated for by higher taxes or higher borrowing or both, fiscal space could be compressed further,” he added.
EO 43 reduced Land Bank of the Philippines’ (LANDBANK) dividend obligation to 0% of net earnings from 50% previously, in compensation for providing seed capital to the MIF. The Development Bank of the Philippines (DBP) is also requesting similar dividend relief.
The executive order was issued after both banks remitted their contributions to the Maharlika Investment Corp. (MIC), which manages the Philippines’ first sovereign wealth fund.
The MIF will have authorized capital stock of P500 billion. Under the law, LANDBANK and DBP are responsible for P50 billion and P25 billion, respectively, of the MIC’s initial funding.
The BSP also said the two GFIs are seeking regulatory relief from the central bank as a result of their contributions to the sovereign wealth fund.
According to Mr. Guinigundo, the lending operations of the two state-run banks could be constrained unless they are given more time to build up their capital.
“They could fail in their statutory mission to helping agriculture and industry, as well as in putting up critical infrastructure in the Philippines,” Mr. Guinigundo said.
Under BSP regulations, all investments of banks are fully charged against a bank’s capital. This means the investment of DBP and LANDBANK in the MIF will be deducted from the banks’ capital in computing for their capital adequacy ratios.
This ratio compares the available capital that a bank has on hand to its risk-weighted assets. The more risk a bank is taking on, the more capital it will be required to keep on hand to protect depositors.
“By extending assistance to these two GFIs, the BSP will be effectively belying the claims of both institutions that their balance sheets are essentially robust. But if no support is given, the GFIs might eventually get into trouble,” Mr. Guinigundo said.
“They could end up violating the BSP’s regulatory capital requirements, and penalized with controls on lending and declaration of dividends. Financial stability becomes a challenge when depositors eventually become jittery and market confidence is eroded,” he said.
The Department of Finance (DoF) has said both banks “maintain their solid financial positions” despite their contributions to the fund. It also said that the banks’ contributions are taken from their investible funds and not from the loanable funds to farmers and other sectors.
Foundation for Economic Freedom President Calixto V. Chikiamco said the government’s fiscal space is already at risk due to the likely economic slowdown this year.
Gross domestic product (GDP) growth may average 4.5-5% this year, below the government’s 6-7% target.
“The government’s fiscal plan was anchored on 6% to 6.5% growth for the next five years,” Mr. Chikiamco said.
The economy grew 4.3% in the second quarter, its weakest showing in more than two years. First half GDP stood at 5.3%. Third-quarter GDP data will be released on Nov. 9.
“For sure, the weakening of the balance sheets of DBP and LANDBANK will constrain their ability to lend. This will not only contribute to the economic slowdown, but also to the non-generation of dividends,” Mr. Chikiamco said.
Last week, Mr. Marcos suspended the MIF law’s implementing rules and regulations (IRR) in order to amend its organizational structure.
Mr. Marcos also clarified the suspension would not impact on the MIF’s target to begin operations by the end of the year.
The economic team has said it is working with the Office of the President to review the MIF rules. The government has yet to specify which exact provisions from the IRR need revision.
“How tweaking the IRR can address the fundamental flaw of the law to achieve the best shape of the MIF escapes us. No matter how the IRR is cleaned up, the basic issues cannot be fixed,” Mr. Guinigundo said.
“But market talk is rife that this EO was issued to give the President the legal means to appoint his own choice of the MIF head. By so doing, the President might be drawn into politicizing the MIF and open it to questions of credibility. Lack of safeguards and governance issues could render the MIF unattractive to potential investors,” he added.
The MIC board will consist of the president and chief executive officer (CEO) of the MIC, the president and CEO of LANDBANK and DBP, as well as two regular directors and three independent directors from the private sector.
The Finance secretary will serve as the board chairperson in ex-officio capacity. — Keisha B. Ta-asan
INVESTMENT in agriculture from both the public and private sector needs to be integrated to ensure food security, Metro Pacific Agro Ventures, Inc. said.
Speaking at a BW Insights and Project KaLIKHAsan forum on Monday, Juan Victor Hernandez, president and chief executive officer of Metro Pacific Agro, said food security requires maximizing resources and a degree of investment coordination among public and private entities, adding that the shortcomings of agriculture are long-running.
“The problems from 30 years ago are the same exact problems we’re seeing today,” Mr. Hernandez said, identifying the need in particular to consolidate efforts in investing in technology for agriculture as well as for other industries.
This has resulted in other countries in the region overtaking the Philippines in crop production, with food security in the country deteriorating, he noted.
The United Nations’ (UN)State of Food Security and Nutrition in the World report estimated that 50.9 million people in the Philippines did not have constant access to adequate food in 2022.
The Philippines thus accounted for almost half of the 110.9 million food-insecure in Southeast Asia.
The UN report also indicated that around 5.9 million Filipinos (or 5.2% of the population) were undernourished in the 2020-2022 period, the second-highest in the region.
Demand for food in Southeast Asia is expected to grow 40% by 2050, business intelligence organization Eco-Business said.
Gerald Glenn F. Panganiban, program director for the National Urban and Peri-Urban Agriculture Program of the Department of Agriculture (DA), said increased funding is “not always enough” to solve the food security issue.
While the DA’s current crop priority is rice with a 2024 budget of P30.87 billion, Mr. Panganiban also noted the limited funding for high-value crops (HVC) of P1.94 billion, which he said may limit the potential of HVC farmers to access markets and minimize post-harvest losses.
The Philippines classifies coffee, cacao, fruit, root crops, vegetable crops, and legumes as HVCs.
Farmers in the Philippines lose up to 50% of their harvest each year, according to a Research Gate study.
According to the Trends in Food Science and Technology journal, more than 40% of food waste in the region occurs at the post-harvest level as the crop progresses through the supply chain.
Mr. Panganiban said that agricultural tech know-how resides in various silos, adding that “It’s just a matter of integrating them.”
“Government money will never be enough,” according to Ruth P. Novales, vice-president and corporate affairs executive at Nestlé Philippines. “We need to be creative and supportive of each other through complementation efforts.”
Ms. Novales said farmers require support through every stage of the value chain. “If you don’t hold the hand of the farmer from beginning to end, you won’t have a hand to hold,” she added.
“If our farmers don’t have markets they can sell to or profit from, they will die a natural death,” the DA’s Mr. Panganiban said, citing the need to provide post-harvest support, credit, and other interventions.
Citing the dairy industry, Mr. Hernandez said one of the DA’s partnerships is with ice cream brand Carmen’s Best, in which Metro Pacific Investments Corp. holds a 51% stake.
Mr. Hernandez said the P22.5-billion dairy industry is on the rise with an inclusive model supporting farmers. “We have the elements of what needs to be done,” he added.
“It’s high time that the public and private sector really work together to push agendas,” he added, noting that the growth of the business process outsourcing industry was the result of public-private collaboration, which can be replicated for the agriculture sector.
The US Department of Agriculture’s Foreign Agricultural Service estimates that 99% of dairy consumption in the Philippines is serviced by imports, as domestic production cannot meet demand.
Nestlé’s Ms. Novales said the Philippines must aim for regenerative agriculture, starting with good planting materials and upskilling farmers on the best harvest and post-harvest procedures.
She noted the company has made strides with the Bureau of Plant Industry in discovering and accrediting new plants with triple the yield potential and enhanced resistance to climate change.
She recommended going for easy wins like incentivizing manufacturers, removing tolls for shipments of raw materials and food, and drafting roadmaps for farmers and crops.
Recher Ondap, key accounts manager for government and industrial clients at Bayer Crop Science Philippines, Inc., said food technology solutions promise the production of more crops for less, while non-tech solutions include consolidating farmland to achieve scale.
Another element of the food security conundrum is getting consumers to choose local.
“It’s on us to continue the sustainability of the very farmer we’re trying to support,” Pacita U. Juan, co-vice chair of the Management Association of the Philippines environment committee, said on the subject of diversifying the Filipino diet.
“Eating what is local is key,” she said. “We’re being flooded with imports because we eat them. The power is with the consumer.”
“There are options. We just need to know about them and have access to them,” according to Ellen Ruth F. Abella, nutrition officer and officer-in-charge for the nutrition policy and planning division of the National Nutrition Council.
Ms. Abella said the targets of Pinggang Pinoy, a guide to eating the right amounts of nutritious food developed the Food and Nutrition Research Institute of the Department of Science and Technology), can easily be met by someone eating mostly Filipino cuisine.
Caitlin Punzalan, corporate and government affairs lead at Mondelez Philippines, Inc., said the company is continuously looking at reformulating packaged snacks to add functional ingredients.
The company’s practice is to brand its products as snacks dense in vitamins and minerals to be eaten with mindfulness, and not as formal meal replacements, Ms. Punzalan said. — Miguel Hanz L. Antivola
THE BOARD of Investments (BoI) has updated its guidelines for granting value-added tax (VAT) zero-rating certifications for registered export enterprises (REEs) making local purchases.
Memorandum Circular (MC) No. 2023-007 governs the local purchases of goods and services directly and exclusively used in the registered project or activity. Eligibility for such a certification is good for 17 years from date of registration. The MC was signed on Oct. 17 and published on Oct. 24.
Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said that the MC clarifies the changes to the revenue regulations in the implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
“We need this to implement the IRR; this will serve as guidance to BoI-registered business enterprises (RBEs) … to make sure that even if their income tax holiday (ITH) incentive period ends, they can still register but only for purposes of availing of VAT zero-rating, as long as they are exporters,” Mr. Rodolfo said.
He said that some exporters, whose incentive availment period has ended, had not been allowed to avail of VAT zero-rating prior to the amendment of the IRR.
In August, the Departments of Finance (DoF) and Trade and Industry (DTI) approved the amendment of Rule 18, Section 5 of the CREATE Act IRR.
As a result of the amendment, transitory registered export enterprises (REEs) with expired income tax-based incentives may continue to enjoy VAT zero-rating on local purchases until the electronic sales reporting system of the Bureau of Internal Revenue (BIR) is fully operational, or until the expiration of the 10-year transitory period, whichever comes earlier.
Based on MC No. 2023-007, the qualified RBEs for VAT zero-rating are: BoI REEs registered under the CREATE Act; BoI REEs that are still enjoying their ITH incentive; and BoI REEs whose income tax-based incentives have expired.
BoI REEs may be issued VAT zero-rating certificate as long as both the supplier and the BoI REE buyer are VAT-registered, the exports of the BoI REE represent at least 70% of total production, and the local purchases of goods and services are directly used in the registered project or activity of the BoI REE.
The BoI will provide the BIR Audit Information, Tax Exemption and Incentives Division within 20 days following the close of each taxable quarter, a list of BoI REEs holding VAT zero-rating certificates.
The MC however excludes janitorial, security, financial and consultancy services, marketing and promotion and services rendered for administrative operations from activities classified as directly and exclusively used in the registered project or activity.
Once the documentary requirements are served and the procedures to issue the certificate are completed, the BoI’s Incentives Administration Service or the BoI Extension Office will release the certificate to the authorized representative of the BoI REE, which will be valid for one year.
The certificate may be revoked due to failure to comply with the registration terms, commitments and conditions, failure to export at least 70% of production, and fraudulent documentation or any other type of misrepresentation. — Justine Irish D. Tabile
This has resulted in other countries in the region overtaking the Philippines in crop production, with food security in the country deteriorating, he noted.