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Peso weakens ahead of key US economic data

THE PESO weakened against the greenback on Tuesday due to the dollar’s strength ahead of key US data and geopolitical concerns.

The local currency closed at P55.085 versus the greenback on Tuesday, declining by 13.5 centavos from Monday’s P54.95 finish, Bankers Association of the Philippines data showed.

The peso opened Tuesday’s trading session slightly stronger at P54.94 per dollar. Its intraday best was at P54.91, while its weakest showing was at P55.10 against the greenback.

Dollars traded rose to $1.035 billion on Tuesday from $717.4 million on Monday.

“The peso depreciated amid geopolitical concerns on the Russia-Ukraine conflict after US President Biden made a surprise visit to Kyiv,” a trader said in an e-mail.

US President Joseph R. Biden on Monday made a surprise visit to Kyiv to send a message of “enduring support” for Ukraine and announce further military aid for the army of Ukrainian President Volodymyr Zelensky, Reuters reported.

The State department announced a further $460 million in US aid to Ukraine, including $450 million worth of artillery ammunition, anti-armor systems and air defense radars, and $10 million for energy infrastructure.

The dollar’s strength against other major currencies also dragged down the local unit, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The dollar hovered around its highest in six weeks, ahead of data this week that could offer direction on future interest rates, Reuters reported.

Strong US labor data and sticky inflation have raised US rate expectations and supported the dollar’s rally this month, and Tuesday’s European and US manufacturing data and Friday’s core personal consumption expenditures price index will guide the US Federal Reserve’s next steps.

After a quiet Monday during the Presidents’ Day holiday in the United States, the dollar stood at 134.65 yen, up 0.3% and was up 0.2% against the euro at $1.0665.

The US dollar index is on track for a fourth week of gains and is up about 1.7% through February so far, but has steadied around 104, down from a six-week high of 104.67 hit on Friday.

The US central bank hiked its fed funds rate by 25 basis points (bps) to a range between 4.5% and 4.75% at its Jan. 31 to Feb. 1 meeting. This brought cumulative increases since March 2022 to 450 bps.

The Fed’s next policy review is on March 21-22.

The peso might continue to weaken moving forward as the market awaits the release of the minutes of the Fed’s policy meeting on Wednesday, the trader said.

The trader sees the peso moving from P55 to P55.25 on Wednesday, while Mr. Ricafort expects it to trade between P54.95 and P55.15 per dollar. — A.M.C. Sy with Reuters

Kaliwa Dam construction progress hits 22%

A MAN arrives at a shallow part of Agos River, where the Metropolitan Waterworks and Sewerage System is planning to build a dam. — PHILSTAR FILE PHOTO / EFIGENIO TOLEDO IV

THE Metropolitan Waterworks and Sewerage System (MWSS) said on Tuesday that the Kaliwa Dam in Rizal and Quezon provinces is now 22% complete.

“(Including) detailed engineering design… the Kaliwa Dam is now 22% complete,” Leonor C. Cleofas, MWSS administrator, told reporters.

Ms. Cleofas said that MWSS hopes to complete the Kaliwa Dam, which will serve as the new source of water for Metro Manila, by the end of 2026, with operations commencing by 2027. 

Last year, the MWSS said a memorandum of agreement was concluded with the indigenous peoples around the Kaliwa river, a waterway in Rizal and Quezon provinces.

The Dumagat-Remontado indigenous peoples who have an ancestral domain claim, received a P160-million “disturbance fee” for the construction of the dam.

“It was a recognition that they are the owners of the ancestral domain; again, there is no transfer of ownership. Their ownership for the land is being recognized through the disturbance fee,” Josefina R. Agusti, regional hearing officer of the National Commission on Indigenous Peoples Calabarzon, told reporters.

She said P80 million each was distributed to Tanay Dumagat-Remontado Ancestral Domain Development, Inc. and to Pinagtaanan ne Dumagat-Remontado de General Nakar, the two IP organizations will also receive a share of the revenue, known as the “benefit share,” once the dam starts operations. 

“After the awarding of P80 million, of course we will be expecting their yearly benefit share which is P36 million for General Nakar, Quezon. For Tanay, Rizal, that is another P10 million per year,” Ms. Agusti said.

The Kaliwa Dam is a bulk water supply project which is a component of the New Centennial Water Source program of the MWSS. It is expected to supply 600 million liters per day of water.  — Ashley Erika O. Jose

Segment of South Commuter Railway line awarded to Leighton joint venture

PHILIPPINE STAR/EDD GUMBAN

THE GOVERNMENT has awarded the civil engineering, tunnel and building works contract for a segment of the South Commuter Railway (SCR) to the joint venture of Leighton Contractors (Asia) Ltd. and First Balfour, Inc., the Department of Transportation (DoTr) said.

Leighton Contractors (Asia), a Hong Kong-based unit of Australia’s CIMIC Group Ltd., and its Philippine partner First Balfour, were named the successful bidder for Contract Package S-03b (CP S-03b) of the SCR, the DoTr said.

In a notice of contract award, issued on Monday, the Transportation department said that the contract has an estimated total value, inclusive of provisional sums and value-added tax, of P23.92 billion.

The notice also provided a breakdown of the project cost by currency as follows: P21.92 billion, $14.63 million, and €21.38 million, with the duration of the contract set at 2,160 calendar days.

The contract covers the civil engineering, tunnel and building works for the 6.1-kilometer (km) railway, 4.7-km underground railway and 1.4-km at-grade railway.

CP S-03b will also include the building of station where the railway stops at the Food Terminal, Inc. property, as well as tunneling works to connect to the Metro Manila Subway Project Senate Station.

Once completed, the 54.6-km railway line connecting Metro Manila and Calamba, Laguna will help ease road congestion and contribute to the reduction of greenhouse gas emissions.

SCR will have 18 stations in total starting from Blumentritt, Manila and ending in Calamba.

On Feb. 17, the Transportation department issued the notices of award for CPs S-01 and S-02 to the joint venture of Indonesian firms PT Adhi Karya (Persero) Tbk. and PT PP (Persero) Tbk. and the Acciona Construction Philippines, Inc. and D.M. Consunji, Inc. joint venture, respectively. 

CP S-01, worth P11.62 billion, covers the civil engineering works for a 1.2-km railway viaduct, including an elevated station at Blumentritt, while the P28.3-billion CP S-02 covers a 7.9-km railway viaduct as well as the España, Santa Mesa, and Paco, Manila stations. — Justine Irish D. Tabile

BIR firms up definition of ecozone logistics providers eligible for zero VAT 

People line up to file their income tax returns at the Bureau of Internal Revenue office in Intramuros, Manila, April 18, 2022. — PHILIPPINE STAR/ RUSSELL A. PALMA

THE Bureau of Internal Revenue (BIR) said it has more clearly defined which economic zone logistics service enterprises (ELSE) are entitled to the zero value-added tax (VAT) incentive.

In a memorandum circular, the BIR said it published a clarification of eligible logistics providers as those engaged in “activities in support of exporters.”

“Despite its issuance, there are still some questions that need to be addressed,” it added.

It said ELSEs must be registered business enterprises supplying production-related raw materials and equipment catering exclusively to the requirements of export manufacturing enterprises registered with the Philippine Economic Zone Authority (PEZA), Clark Development Corp., Subic Bay Metropolitan Authority, Authority of the Freeport Area of Bataan or other special economic zones and freeports outside PEZA administration.

The industry “provides critical support, particularly to export manufacturing companies with their requirements for logistics support to facilitate their import and export shipments, sourcing raw materials, inventory management, just-in-time deliveries, localization, and process customization,” it added.

It also clarified that ELSEs that render at least 70% of their output or services to another registered export enterprise are covered by the definition of “export enterprise.”

The circular also affirmed that purchases by registered ELSEs from VAT-registered suppliers are subject to VAT at a zero rate, but this only applies to goods and services directly and exclusively used in the registered project or activity of the ELSE.

The BIR also issued guidelines on the requirements for the availment of the VAT at zero rate. — Luisa Maria Jacinta C. Jocson

House approves bills barring LGU interference in Bataan economic zone 

BW FILE PHOTO

A HOUSE panel has approved bills clarifying the powers of the Authority of the Freeport Area of Bataan (AFAB) to manage the economic zone free of local government interference.

During the House joint meeting of the economic affairs and trade and industry committees, Bataan Rep. Albert S. Garcia said that while AFAB’s autonomy gives it the power to respond to its locators’ immediate needs, “the management of AFAB has noted that it still encounters certain regulatory and investment promotion challenges.”

“This bill seeks to further clarify or strengthen its regulatory jurisdiction and investment promotion function as well as introduce other amendments that can help further realize its potential as an engine of growth for Bataan and the country as a whole,” Mr. Garcia added.

House Bills No. 7058 and 7187 seek to amend the Republic Act (RA) No. 11453, known as An Act Strengthening the Powers and Functions of the AFAB, which itself amended RA No. 9728 or the Freeport Area of Bataan Act of 2009.

The bills seek to free AFAB from local government unit interference “pursuant to its autonomy and self-reliance.”

They also propose space technology as one of the industries to be managed by the AFAB.

Emmanuel D. Pineda, AFAB administrator, said the expansion of AFAB registered enterprises resulted in P7 billion in new investment in 2022.

The panel also approved bills creating special economic zones in Marinduque, Surigao City, Southern Leyte, Iligan, Camarines Sur, Occidental Mindoro, Sarangani, Maguindanao and Cotabato City, Misamis Occidental, and West Aklan. — Beatriz Marie D. Cruz

Sugar planters reject proposal for further molasses imports

PHILSTAR FILE PHOTO

SUGAR planters on Tuesday said the supply of molasses is adequate following a surge in import volumes, rejecting reported claims by the ethanol industry that more imports are needed.

“As the figures of (the Sugar Regulatory Administration) show, we have sufficient production and supply of molasses at this time,” Philippine Sugar Millers Association, Inc. (PSMA) Executive Director Jesus L. Barrera said in a Viber message.

According to Mr. Barrera, domestic production of molasses is “on upswing” while the demand has been “soft and slow.”

He noted that any additional molasses imports will further affect demand for domestic molasses, which he said was down by 17% this year.

An association of ethanol producers reportedly asked the government to allow regulated imports of molasses for use in bioethanol due to a “shortage” of the raw material.

Citing SRA data, the PSMA said domestic molasses production was 471,046.18 metric tons (MT) as of late January, up 3.38% from a year earlier.

The PSMA also said imports of molasses for potable alcohol and animal feed in 2022 was 608,310 MT, up 80%.

In January 2023, the volume of imported molasses increased 80% year on year to 88,702 MT.

“We have sufficient supply. There is no national emergency or shortage of molasses. We do not need to import more molasses specifically for bioethanol production,” the PSMA said in a statement on Monday.

Molasses is a by-product of sugarcane. — Sheldeen Joy Talavera

DBM issues warning over fund-release ‘fixers’

BW FILE PHOTO

THE Department of Budget and Management (DBM) warned against individuals or organized groups claiming to have the power to effect fund releases.

“In view of the numerous reports, all government entities are again reminded that upon submission of requests for fund releases to the DBM, the same are acted upon consistent with pertinent laws and established procedures and budgeting rules and regulations,” the department said in a Feb. 16 circular.

“It is to be emphasized that the DBM does not authorize any person or organized groups to facilitate or expedite fund releases for whatever purpose,” it added, noting that it also does not solicit requests for fund releases.

The department also called on government agencies to regularly advise their respective clients or stakeholders to rely only on official DBM channels.

“We strongly advise all National Government agencies, local government units, and all others concerned to refrain from entertaining or transacting with private individuals or organized groups of dubious character and be cautious of individuals introducing themselves as DBM employees,” it added.

The DBM added that it only deals with the agency head or local chief executive or their duly authorized representatives, who must be organic personnel of the government entity concerned. — Luisa Maria Jacinta C. Jocson

LANDBANK loans to agriculture, fisheries sectors top P261 billion in 2022

BW FILE PHOTO

LAND BANK of the Philippines (LANDBANK) said on Tuesday that it granted loans to farmers and fisherfolk totaling P261.7 billion in 2022, supporting 3.5 million borrowers.

It added in a statement that more than 766,000 or 22% of these were in the Philippines’ 20 poorest provinces.

The bank said it hopes to lend to 3.6 million farmers and fisherfolk this year.

The bank said it will be partnering with the Department of Agriculture (DA) and the Department of Agrarian Reform (DAR) to identify potential loan clients.

“LANDBANK continues to service the growth requirements of all players in the agribusiness value chain, making it the biggest lender to the agriculture sector. We remain committed to delivering timely and accessible credit to boost economic activities in the countryside and the country’s overall food production,” LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said in a statement.

The areas with the most beneficiaries were Nueva Ecija, Maguindanao, Bohol, Leyte, Pangasinan, Cotabato, Isabela, Cagayan, South Cotabato, and Ilocos Sur, the bank said.

LANDBANK said it released P15.3 billion last year under programs jointly implemented with the DA which supported over 252,000 borrowers.

It also released P751.7 million to 229 agrarian reform beneficiaries’ organizations under programs jointly implemented with the DAR.

LANDBANK said that of the P261.7 billion in outstanding loans posted in 2022, P46.6 billion directly benefited small farmers and fisherfolk. These included cooperatives, farmers’ associations, rural financial institutions, and other conduits.

Meanwhile, P87.8 million was used to finance the construction of 953.7 kilometers of farm-to-market roads, 4.5 kilometers of bridges, 50 public markets, 14 irrigation systems, and more in collaboration with local government units (LGUs), LANDBANK said. 

The bank also said that P66.5 billion of the total loans financed livestock and crop production, while P107.4 billion was deployed to agri-processing and trading projects.

It added that P166.8 billion was allocated to support small, medium, and large agribusiness enterprises, while P48.3 billion supported agri-aqua-related projects of LGUs and government-owned and -controlled corporations.

LANDBANK booked a net profit of P30.1 billion in 2022 on improved interest income, commissions, and foreign exchange gains. — Aaron Michael C. Sy

Metro Manila’s construction materials wholesale price index

PRICE growth for construction materials in the National Capital Region slowed in January at both the retail and wholesale levels, driven by the stronger peso, the Philippine Statistics Authority (PSA) reported on Tuesday. Read the full story.

Metro Manila's construction materials wholesale price index

Metro Manila’s construction materials retail price index

PRICE growth for construction materials in the National Capital Region slowed in January at both the retail and wholesale levels, driven by the stronger peso, the Philippine Statistics Authority (PSA) reported on Tuesday. Read the full story.

Metro Manila's construction materials retail price index

Philippine Congress told not to shield Duterte from ICC probe

PHILIPPINE STAR/MIGUEL DE GUZMAN

THE BIGGEST labor coalition in the Philippines on Tuesday denounced a Senate resolution seeking to protect former President Rodrigo R. Duterte from the International Criminal Court’s (ICC) probe of his deadly drug war.

“We believe that this move is a blatant disregard of justice for the thousands of victims of extrajudicial killings in the country and an insult to the ICC’s mandate to investigate and prosecute individuals who commit crimes against humanity,” Nagkaisa said in a statement.

“Justice is not the luxury of the rich, it is the right of every Filipino.”

The labor group said working with the ICC would ensure erring state officials are held accountable for abuses during the drug war.

On Monday, Senator Robinhood Ferdinand “Robin” C. Padilla filed a resolution seeking the “unequivocal defense” of Mr. Duterte from the ICC probe.

As this developed, Senator Jose “Jinggoy” Estrada filed a similar resolution expressing the upper chamber’s “strong opposition” to the ICC investigation.

Under Senate Resolution 492 filed on Monday, the lawmaker said the pre-trial chamber’s decision to resume the probe undermines the country’s judicial system.

“The Senate of the Philippines strongly opposes the decision of the ICC to resume its investigation of the crimes committed in Philippine territory, in questioning the fully capable judicial system of the Philippines as well as disrespecting its sovereignty,” he said.

Mr. Estrada was among the 17 lawmakers who voted for the concurrence of the Senate to the Rome Statute, the treaty that created ICC, during the 15th Congress.

“I would like to make it clear that I did not change my mind insofar as casting my vote to concur with the ratification of the Rome Statute some 12 years ago,” he said in a separate statement on Tuesday.

“My stance on this issue is also based on the Rome Statute’s principle of complementarity, which recognizes a state’s right to exercise jurisdiction over most serious crimes of international concern,” he added, noting that under this principle, the ICC will only act if the state is “unable or unwilling to investigate and prosecute the crime.”

The Philippines withdrew from the ICC in March 2018 under Mr. Duterte, who said there was “a concerted effort on the part of the United Nations special rapporteurs to paint me as a ruthless and heartless violator of human rights who allegedly caused thousands of extrajudicial killings.”

‘INTERFERENCE’
“It is clear that we enforce the law and those concerned pursue individuals found guilty of violations,” Mr. Estrada said, noting that at least four criminal cases have been filed against erring cops.

“Any interference by the ICC in the jurisdiction of our government would be considered a violation of Philippine sovereignty,” he added.

Former President and Pampanga Rep. Gloria Macapagal Arroyo and more than a dozen congressmen made a similar call last week,  saying the Philippines had a functioning justice system.

President Ferdinand R. Marcos, Jr. on Saturday called the ICC’s probe a threat to the country’s sovereignty, saying the ICC did not have jurisdiction over the Philippines.

“I have stated it often, even before I took office as president, that there are many questions about their jurisdiction and what can be — what we in the Philippines regard as an intrusion into our internal matters and a threat to our sovereignty,” he told reporters.

“We call on the Senate and the House to withdraw their resolutions and to respect the ICC’s mandate to investigate and prosecute individuals who commit crimes against humanity,” Nagkaisa said.

Last month, the ICC pre-trial chamber reopened its investigation into the killings and so-called crimes against humanity under Mr. Duterte’s anti-illegal drug campaign. 

The Hague-based tribunal said it was not satisfied with Philippine efforts to probe the deaths.

In a decision on Feb. 17, the ICC appeals chamber granted the Philippine government’s request for more time to file its appeal to suspend the probe. It gave the country up to March 13.

ICC prosecutor Karim Ahmad A. Khan on Feb. 16 asked the international court to deny the Philippines’ request, saying it did not raise new arguments to justify halting the probe.

The international tribunal, which tries people charged with crimes against humanity, genocide, war crimes and aggression, suspended its probe of Mr. Duterte’s deadly war on drugs in 2021 upon the Philippine government’s request.

The Philippine government estimates that at least 6,117 suspected drug dealers had been killed in police operations. Human rights groups say as many as 30,000 suspects died.

More than 30 member-states of the United Nations Human Rights Council in November urged the Philippine government to do something about extralegal killings in connection with Mr. Duterte’s anti-illegal drug campaign. 

The Philippines has accepted 200 recommendations from the UN Human Rights Council, including investigating extralegal killings and protecting journalists and activists. — John Victor D. Ordoñez and Alyssa Nicole O. Tan

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