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Thailand bars prisons from using inmates to make fishing nets

REUTERS

BANGKOK — Thai jails have been banned from using prison labor to make fishing nets for private companies after a Thomson Reuters Foundation investigation found some inmates were forced to carry out the work under threat of beatings or delayed release.

The Corrections department said it had told prisons not to sign new net-making contracts, a decision welcomed by labor rights groups and prisoners’ families who had denounced exploitation in prison work programs.

“There are concerns that inmates may have been forced to work,” said Chan Vachiradath, a deputy director-general, in a written statement to the Thomson Reuters Foundation. “The Corrections department has therefore issued orders to reform prison labor according to human rights principles.”

Both the department and Khon Kaen Fishing Net (KKF), Thailand’s biggest fishing net producer, denied the use of forced labor in prisons. In a report in December, former inmates said the work was compulsory, but paid only a fraction of Thailand’s minimum wage, and some workers were not paid at all.

Chan said the memo barring new prison net-making contracts was issued on May 2, though it was not made public at the time. Some prisons have also announced immediate pay increases of up to 30% for some jobs, including the production of fishing nets, folding bags and needlework, the department added.

Labor rights campaigners welcomed the decision, but called on the government to ensure prison workers’ pay meets the legal minimum wage, and to allow independent inspection bodies access to prisons.

“This case shows that the Thai government must do much more to effectively identify and hold accountable Thai companies that seek to profit from forced labor in their supply chains,” added Jennifer Rosenbaum, executive director of the Global Labor Justice – International Labor Rights Forum.

Thailand’s prison work program was intended to provide on-the-job training that could help inmates secure paid work after their release, according to promotional material from the Corrections department.

But rights groups say it has become exploitative, citing low pay, harsh working conditions and the use of punishment when workers do not meet quotas.

KKF chief marketing officer Bordin Sereeyothin said “almost every prison in Thailand” manufactured nets, estimating that more than 100,000 inmates had been involved in their production.

He said the change would result in a loss of income for inmates, while net shortages would push up the price of seafood. “Finding hundreds of thousands of workers is not an easy task, and at the end of the day, it’s the fishermen and consumers who will face the burden,” he said. “Either by the end of this year or early next year, the prices of shrimp and crab will soar.”

However, family members of prisoners expressed relief. One former inmate, who asked to be identified only by his nickname Petch, said his elder brother — who is still being held at the southern Songkhla Provincial Prison — had recently been told they would no longer produce the nets.

“It’s a good thing, since it’s hard work, and they would be punished for not meeting the target,” said Petch, who also worked making nets while he was in jail. “If they no longer have to do it, their lives will be much better.” — Thomson Reuters Foundation

Lady Blazers collide with Lady Stags in clash of league titans

UNBEATEN College of St. Benilde Lady Blazers — SYNERGY/GMA NETWORK

COLLEGE of St. Benilde (CSB) aims to keep a firmer grip of the lead while San Sebastian College – Recoletos (SSC-R) hopes to grab a piece of it as the two collide on Friday in a clash of the league titans in the National Collegiate Athletic Association (NCAA) Season 97 volleyball at the Paco Arena.

The Lady Blazers have been unflappable at the helm after hurdling their first five assignments including a 25-17, 25-11, 25-12 rout of the Mapua Lady Cardinals on Tuesday and could solidify its grip of the top spot with another win at 12 p.m. against the Lady Stags.

SSC, for its part, has shown it has the tools and talent to challenge for the crown this season as seen in its strong 4-1 start that included two character-building, come-from-behind five-set wins — the last coming at the expense of University of Perpetual Help in a 24-26, 26-28, 25-20, 25-20, 17-15 squeaker on Sunday.

CSB coach Jerry Yee said they have prepared hard for this game.

“We just worked and prepared hard every game,” said Mr. Yee.

The Lady Stags are expected to ride on the shoulders of their top two hitters — MVP candidates Reyann Cañete and Katherine Santos.

Mses. Cañete and Santos, a super-rookie, have been leading the league in scoring after piling up a total of 95 and 84 points, respectively.

But SSC coach Roger Gorayeb knows it would take nerves of steal to beat CSB.

“We just have to be consistent and tough for us to have a chance this year,” said Mr. Gorayeb, the most titled among all NCAA coaches with 21 titles in women’s division alone.

Meanwhile, Mapua (3-2) battles San Beda (1-4) at 2:30 p.m. — Joey Villar

Manila second lowest in East and Southeast Asia in smart center rankings

Manila rose seven spots to 61st out of 76 ranked centers in the fifth edition of the Smart Centers Index (SCI) by Long Finance Initiative. The index rated the innovation and technology offerings of commercial and financial centers. The Philippine capital got the second lowest rating of 623 in East and Southeast Asia, ahead only of Taipei’s 562 (74th overall).

Manila second lowest in east and southeast Asia in smart center rankings

SFA Semicon sets P130-M share buyback program

SFA Semicon Philippines Corp. (SSP) on Thursday announced that it approved the implementation of a share buyback program of up to P130 million or nearly $2.5 million worth of common shares.

“The board’s decision reflects SSP’s faith in the underlying value of its stock and in the company’s value and future prospects, as well as in the suitability of the Philippines as an investment host,” SSP Chairman Dong Hwan Im said in a statement.

The share buyback program will be funded out of unrestricted retained earnings using cash generated from revenues.

The firm said that the program aims to “enhance shareholder value and to manifest confidence in SSP’s share value and prospects through the repurchase by SSP of its own shares of stock.”

Mr. Im added that he hopes the stock market will realize the underlying value of SSP shares as an investment and that the Philippine bourse will recover in the medium-term pending the resolution of global geopolitical tensions and uncertainties.

Earlier this year, SSP announced that it was allocating $65 million for its capital spending in the next five years.

In 2021, SSP’s net income after tax rose by 133% to $12.8 million from $5.5 million, driven by a boost in production.

SSP is a global outsourced semiconductor assembly and test company whose facilities are located in the Philippines. It is Clark Freeport Zone’s leading exporter of semiconductors with an aggregate export shipment value of $4.16 billion as of 2021.

The share buyback program starts on July 1, 2022 and will end upon the full usage of the approved allotment, or as may be directed by the board of directors subject to regulations.

At the stock exchange on Thursday, SSP shares rose by 21.21% or 21 centavos to close at P1.20. — Luisa Maria Jacinta C. Jocson

Investing out of the box

THE peso-dollar rate hit P55 as of this writing.  With expectations of further depreciation and the inflation scare everybody anticipates, whatever savings we have in our domestic currency is taking a beating.  If you had a set aside of P100,000 when the peso was at P50-$1, your purchasing power just got hammered by the peso depreciation.

The thinking investor will therefore want to explore new ways of storing the value of funds. Traditional investments refer to publicly available vehicles like stocks, bonds and cash. Many are now looking at alternatives which do not necessarily refer to uncommon types, but to those classified in the “others” category like real estate, commodities, private equity and hedge funds. These are outlets with risk characteristics different from the traditional ones.

But even before exploring the alternatives, one may want to consider alternative currencies for the traditional investment.  In other words, keep funds in stocks, bonds or cash but in other currencies.  This is called currency diversification, using more than one currency as one’s investing or financing strategy.  The idea is to reduce the foreign exchange risk than if all the portfolio exposure were in a single currency.

The main idea behind diversification involves looking at assets with low correlation with the traditional investments.  The objective is to yield higher long-term returns and lower the overall risk of the portfolio. A key determinant of portfolio risk is the extent to which the returns vary in tandem or in opposition. If the assets are not perfectly correlated, and preferably low, overall risk is reduced.

This strategy makes sense if we expect the peso to depreciate further.  The pronouncement of the incoming BSP Governor Dr. Felipe Medalla is clear, when he said: “what we care (more) about is Philippine inflation, not the exchange rate.”  Of course, we expect the BSP to continue to monitor and manage the exchange rate but in case of trade-off scenarios, the message should not be lost on the investor.

In one of my NGO involvements, I have proposed offshore investment for some of our investible funds. Is it unpatriotic? If the intention is to grow the funds so it can be invested domestically better, it is the rationale thing to do. Of course, what we hope won’t happen is for Filipinos with excess savings to move their funds to a foreign destination and keep it there. That will constitute capital flight.

Alternative investments will offer characteristics the investor must be wary of.  Among these are lower liquidity, less regulation, lower transparency, higher risk and limited risk and return data.  The investor will have to undertake a serious introspection of his risk profile and appetite.

Alternative investments come in different categories.  Some identified categories include:  hedge funds, private capital, natural resources, real estate and infrastructure.  Another new category includes collectibles like art, antiques, coins, musical instruments and stamps.  This column space will not suffice to discuss these and, the reader is invited to check those they think fit their interests.  One of my students shared with the class a Ted Talk by Josh Luber,  a “sneakerhead” or collector of rare or limited sneakers.  He parlayed his passion into a $1-billion funding for a company he jointly founded, Stock X.

Like entrepreneurship, alternative investing especially in art forms has major risk and return complications.  But as an artist friend shared, buy an art piece because you like it as it is notoriously difficult to value.  It is an investment in one’s passion, but there have been financial returns in special cases.

My daughter Blessie is graduating this year with the degree of Bachelor of Applied Arts Major in Visual Design.  While she is looking for a job, she dabbles in digital art and joins art-themed bazaar selling digital creations like stickers, postcards, posters and the like. My wife and I accompany her to these events and while in my mental calculation, her investment in her products will take time for recovery, I also realize it’s another form of alternate investing for the youth.  Will it pay off?  It is totally unsure but her love for the craft should be enough for now as she has her traditional backup — Mom and Dad.

Alternative investing is definitely not for all but it is a class that deserves further inquiry for its benefits.  It may require a high degree of investment analysis and considering the level of liquidity it offers, it can be a challenge to some.  However, it is available and there should be  savers who will find some categories fitting their risk appetite.

We must realize we have an investment situation that needs an approach that goes beyond business as usual. Doing nothing means losing hard earned savings of the past. At the very least, we must maintain the purchasing power of our money. The aim is not to get rich, but to avoid getting poorer.

***

The views expressed herein are his own and does not necessarily reflect the opinion of his office as well as FINEX.

 

Benel Dela Paz Lagua was previously EVP and chief development officer at the Development Bank of the Philippines.  He is an active FINEX member and an advocate of risk-based lending for SMEs.  Today, he is independent director in progressive banks and in some NGOs.

What to see This Week (07/01/22)

A SCENE from the film Everything Everywhere All At Once

Everything Everywhere All At Once

THE WORLDWIDE hit film Everything Everywhere All At Once from A24 Studios is finally showing in Philippine cinemas. In the film, Evelyn (Michelle Yeoh) has to confront a multiverse on the brink of collapse — an extreme manifestation of the sensory overload that the modern world is increasingly defined by — to see the family that has always been there. Directed by Dan Kwan and Daniel Scheinert, the film also stars Stephanie Hsu, Ke Huy Quan, James Hong, Jamie Lee Curtis, and Jenny Slate. Empire Magazine’s Ben Travis writes: “A pure firework display of technical bravado, wild invention, emotional storytelling, comedic genius, action mastery and outstanding performances, Everything Everywhere All At Once is everything cinema was invented for.” Review aggregate site Rotten Tomatoes gives the film a very high score of 95%.

MTRCB Rating: R13

Minions: The Rise of Gru

UNIVERSAL Pictures and Illumination bring a new installment in the Minions animated film franchise, Minions: The Rise of Gru. The film takes viewers back to the 1970s, when the young aspiring supervillain Gru (voiced by Steve Carrell) had just met his yellow friends. The film also features the voices Taraji P. Henson as Belle Bottom, Lucy Lawless as Nunchuck, Dolph Lundgren as Svengeance, Danny Trejo as Stronghold, Jean-Claude Van Damme as Jean-Clawed, Michelle Yeoh as Master Chow, Russell Brand as the young Dr. Nefario, and Oscar-winner Julie Andrews as Gru’s mom. Variety’s Peter Debruge writes: “Audiences know what to expect, and Illumination delivers, offering another feel-good dose of bad behavior.” Review aggregate site Rotten Tomatoes gives the movie a score of 64%.

MTRCB Rating: PG

Dealing with a corrupt labor inspector

I’m the administration manager handling human resource (HR) for a factory with 500 workers. Last week, an inspector made a surprise visit and discovered many issues. He suggested that a favorable report is possible in exchange for a substantial amount of grease money. When I discussed the matter with the chief executive officer (CEO), he advised me to “settle” the issue without delay. I take it to mean he wants to bribe the inspector. Is this the right thing to do? — Miss Deal.

When in doubt, don’t. Go back to the CEO and clarify his intentions. Examine your personal values. How do they align with the values of the CEO and organization? And why would you risk your job to be party to a crime? The answers to these questions are easy if your ethics are well developed.

Bribery is downright immoral and patently illegal. Indeed, you are in a difficult spot if the CEO wants to bribe an inspector. If that happens, prepare to look for another job soon. The potential consequences are not worth it.

I have not heard stories of corrupt labor inspectors in a long time. This happened to me in the 1980s when I was the personnel supervisor at a telecommunications company. The inspector said he was willing to settle for the “SOP” in exchange for a favorable report.

I’m not sure what he meant by SOP, or “standard operating procedure.” Fortunately, it was not standard procedure for us to bribe people, much less government officials. I told the inspector that we were ready to face and correct any adverse findings.

He got the message right away and proceeded to list many violations, including imaginary and flimsy ones. Not satisfied, the poor guy tried to sell me insurance, which I courteously declined. Instead, I thanked him for the visit and gave him a company-branded umbrella and t-shirt.

OTHER FACTORS
This proved to be the exception; there are many honorable and respectable people in government. Nevertheless, management must be ready at all times to deal with good or bad inspectors. Here are some pointers:

One, inspections are often triggered by anonymous tips. It does not matter if you have 50 or 5,000 workers. A tip may come from anyone, including contractual employees or manpower agency temps. Even without such a complaint, be prepared.

Two, treat the labor inspector with respect. Don’t ignore the inspector. Make the visit as comfortable as possible. But don’t forget to ask for the inspector’s identification and mission orders.

Three, download a labor inspection checklist. Even if you think your company is compliant, it’s a good idea to study the 13-page checklist, which is available on the labor department website.

Four, cooperate fully on requests to examine records. It’s also possible the inspector may choose to interview random employees to verify your claims. Don’t volunteer anyone the inspector has not chosen.

Five, penalties for violations are reasonable. Even you don’t think so, being cited is a good reminder of your company’s obligations. Someday, a violation will turn up and your company will have to pay.

Last, persuade your boss to reject the bribery route. If you can’t do that, it means you haven’t established yourself as an authoritative and credible management partner. A friend who is a lawyer in charge of HR at a medium-sized bank would describe your predicament as despicable and a “sad event” in your career.

ENTRAPMENT
When I discussed your case with a high-ranking official at the Labor department, he recommended entrapping the inspector. Unfortunately, many HR executives will not go along with this suggestion. One longtime professional who retired three years ago as a senior vice-president for HR at a multinational bank said the bank’s foreign CEO would not tolerate even the appearance of bribery. Further, it is possible entrapment may endanger the CEO’s standing with the immigration bureau.

Another seasoned HR professional who has served with several major companies in a career of more than 35 years thinks it’s not advisable to participate in an entrapment operation unless the intent of the inspector is to unfairly shut the company down.

Another said it’s the job of the Labor department to police its ranks without the involvement of people from other organizations.

In conclusion, accept this piece of wisdom from Jose Angel Gurria, former secretary general of the Organisation for Economic Co-operation and Development (OECD): “Integrity, transparency and the fight against corruption have to be part of the culture. They have to be thought as fundamental values.” If you happen to work in an organization without those values, prepare to resign as soon as you can.

 

Consult with Rey Elbo on Facebook, LinkedIn or Twitter or send your questions to elbonomics@gmail.com or via https://reyelbo.consulting

How PSEi member stocks performed — June 30, 2022

Here’s a quick glance at how PSEi stocks fared on Thursday, June 30, 2022.


Peso rebounds on rate hike bets, oil

BW FILE PHOTO

THE PESO rebounded versus the dollar on Thursday, returning to the P54 level, on lower global oil prices and as the incoming Bangko Sentral ng Pilipinas (BSP) chief said they may consider a more aggressive rate hike at their August meeting to temper rising inflation.

The local unit closed at P54.975 per dollar on Thursday, rising by 8.5 centavos from its P55.06 finish on Wednesday, Bankers Association of the Philippines data showed.

The peso opened Wednesday’s session at P55.06 versus the dollar. Its weakest showing for the day was at P55.14, the lowest in over 16 years or since its P55.26 close on Oct. 25, 2005, while its intraday best was at P54.80 against the greenback.

Dollars exchanged inched down to $1.24 billion on Thursday from $1.27 billion on Wednesday.

“The peso exchange rate was stronger today … after the recent decline in global crude oil prices to among one-month lows,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso was also stronger after the latest signals of the possibility of a bigger local policy rate hike if necessary and depending on economic data,” Mr. Ricafort added.

Oil prices, which have soared in 2022 along with most commodity prices, edged lower on Thursday amid concerns about an unseasonable slowdown in US gasoline demand, Reuters reported.

Brent slipped 0.8% to $115.33 a barrel, while US crude declined 0.47% to $109.27.

Meanwhile, on Wednesday, incoming BSP Governor Felipe M. Medalla told reporters that the central bank may consider a more aggressive rate hike at its Aug. 18 meeting if inflation keeps its upward momentum, but noted the decision will remain data dependent.

Early in June, ahead of the US Federal Reserve’s decision to increase its own rates by 75 basis points (bps) at its own meeting that month, Mr. Medalla said he is not keen on raising borrowing costs by more than 25 bps per meeting.

The BSP last week raised benchmark interest rates by 25 basis points for a second straight meeting to cool rising prices. At that meeting, it raised its average inflation forecast for this year to 5% from 4.6% previously, well above its 2-4% target.

The central bank sees headline inflation picking up further and settling within the 5.7-6.5% range in June. Inflation stood at 5.4% in May, the fastest in three and a half years.

Nomura Holdings Head of Global FX Strategy Craig Chan on Thursday said the BSP’s dovish stance is putting pressure on the peso.

“We’re still going to be seeing the real policy rate becoming more negative… particularly in this current backdrop where there are pressures coming out, namely from the US Fed policy charge,” Mr. Chan said in a webinar.

“Our view is that we are going to be likely breaking new record highs in dollar-peso in the coming one to two months. It’s likely we see P56.50,” he added.

Meanwhile, a trader said in an e-mail that the peso appreciated ahead of likely softer US personal consumption expenditures inflation in May. The PCE price index is the Fed’s preferred inflation gauge.

For Friday, the trader said the peso might appreciate further due to potentially weaker US manufacturing purchasing managers’ index data.

The trader expects the local unit to move within P54.80 to P55 per dollar on Friday, while Mr. Ricafort gave a forecast range of P54.80 to P55.05. — K.B. Ta-asan with Reuters

PHL stocks drop on mounting inflation concerns

REUTERS

STOCKS declined further on Thursday as the Bangko Sentral ng Pilipinas (BSP) said headline inflation could have reached an almost four-year high in June.

The benchmark Philippine Stock Exchange index (PSEi) plunged by 147.76 points or 2.34% to close at 6,155.43 on Thursday, while the broader all shares index sank by 52.89 points or 1.56% to 3,336.23.

“The market declined amid a lack of positive catalysts at home, coupled with a higher inflation rate expectation this June. The BSP projects the inflation rate this June to settle within 5.7 to 6.5%. This weighed heavily on the sentiment as consumers’ purchasing power is anticipated to weaken. Moreover, the second-round effects are also expected, which may further push the inflation upward in the coming months,” Philstocks Financial Research Associate Claire T. Alviar said in a Viber message.

Ms. Alviar added that the possibility of an interest rate increase bigger than 25 basis points (bps) by the BSP due to rising inflation also weighed on sentiment.

“Philippine shares ended the last trading session of the semester in the red as the streets continued to search for the bottom of a vicious market sell-off. Concerns over a slowing economy and aggressive rate hikes consumed much of the first half of the year and fears of a recession are rising,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The BSP’s June forecast range is well above its 2-4% target and 5% projection for the year. Its low end would be the fastest monthly print since November 2018’s 6.1%, while the high end would be the quickest since October 2018’s 6.9%.

In May, headline inflation was at 5.4%.

On Wednesday, BSP Governor Felipe M. Medalla told reporters that the central bank may consider a more aggressive rate hike at its Aug. 18 meeting if inflation keeps its upward momentum, but noted the decision will remain data-dependent.

Early in June, ahead of the US Federal Reserve’s decision to increase its own rates by 75 bps at its own meeting that month, Mr. Medalla said he is not keen on raising borrowing costs by more than 25 bps per meeting. The BSP on May 19 and June 23 hiked benchmark interest rates by 25 bps.

Majority of the sectoral indices ended in the red on Thursday, except mining and oil, which climbed by 100.71 points or 0.90% to 11,235.17, and industrials, which rose by 67.16 points or 0.74% to 9,110.72.

Meanwhile, services went down by 66.37 points or 3.86% to 1,649.01; holding firms fell by 202.42 points or 3.41% to 5,720.24; financials retreated by 31.07 points or 2.10% to 1,442.36; and property gave up 32.33 points or 1.12% to end at 2,835.31.

Decliners bested advancers, 117 versus 71, while 47 names ended unchanged.

Value turnover increased to P6.35 billion with 793.85 million shares changing hands from the P4.91 billion with 532.42 million issues seen on Wednesday.

Net foreign selling went up to P843.45 million on Thursday from P645.8 million seen the previous trading day. — Luisa Maria Jacinta C. Jocson

Completing Cabinet team is top task as Marcos begins term

FERDINAND “Bongbong” Marcos, Jr. took his oath of office as the 17th president of the Philippines before Chief Justice Alexander Gesmundo at the National Museum of Fine Arts in Manila on Thursday, June 30, 2022. — PHILIPPINE STAR/KRIZ JOHN ROSALES

PHILIPPINE President Ferdinand R. Marcos, Jr. administered on Thursday afternoon the mass oath-taking of the Cabinet members he has so far nominated.

Mr. Marcos has yet to name the chiefs of some departments that have crucial roles in the Philippines’ pandemic recovery.

“I suppose this is the first act of actual work that we will be doing for this administration,” Mr. Marcos said in a speech before the ceremony held  at the presidential palace.

Mr. Marcos, who was sworn in as the country’s 17th president on Thursday morning, started his six-year term without announcing his secretaries for the Department of Health, Department of Environment and Natural Resources (DENR), and Department of Energy (DoE).

In his inauguration speech that lasted for more than 20 minutes, Mr. Marcos mentioned the global oil crisis, which he partly attributed to the war between Russia and Ukraine.

“Surely, a free world awash with oil can assure supplies or we will find a way,” he said. “We are not far from oil and gas reserves that have already been developed.”

Mr. Marcos also touched on the coronavirus pandemic, mentioning the “gains made and lost, opportunities missed” because of the health crisis that has killed thousands of Filipinos.

The former senator also mentioned climate change, an issue that needs to be addressed by both the DoE and DENR, among and other agencies.

He has also yet to announce the chiefs of the Department of Foreign Affairs, Department of Science and Technology, and the Department of Human Settlements and Urban Development.

Mr. Marcos, 64, earlier said he would take over the Agriculture department to address the “severe” problems facing the sector.

He gave an emphasis on the need to achieve food self-sufficiency during his inaugural speech, which analysts said lack actual plans.

“Food sufficiency must get the preferential treatment the richest free trade countries always gave their agricultural sectors,” Mr. Marcos said. “Their policy boils down to, ‘Don’t do this, we do. Do what we tell you to’”.

“I’m giving that policy the most serious thought if it doesn’t change or make more allowances for emergencies with long-term effects.”

Among the Cabinet members appointed are: Vice President Sara Z. Duterte-Carpio (education), former SMC Tollways president Manuel “Manny” Bonoan (public works); former Philippine Airlines president Jaime Bautista (transportation); Bienvenido “Benny” Laguesma (labor); Susan “Toots” Ople (migrants workers); Benjamin E. Diokno (finance); Alfredo E. Pascual (trade); Jesus Crispin “Boying” Remulla (justice); Ivan John Uy (information and communications technology); Erwin Tulfo (social welfare); Christina Frasco (tourism); and Conrado Estrella III (agrarian reform).

The Philippine economy grew by 8.3% in the first quarter, slightly faster than government expectations, and analysts said that could give Mr. Marcos time to adjust and think of his game plan.

His predecessor, Rodrigo R. Duterte, left a record amount of debt used to bankroll infrastructure projects as well as for the pandemic response. A day before the former president ended his six-year term, the peso sank to its lowest in more than 16 years.—Kyle Aristophere T. Atienza

Transport group to seek another jeepney fare hike 

PHILIPPINE STAR/ WALTER BOLLOZOS

By Arjay L. Balinbin, Senior Reporter

A TRANSPORT group said on Thursday that the increase in the minimum fare for traditional jeepneys is still insufficient for operators and drivers to cope with soaring fuel prices, and that the new administration should expect another fare hike appeal.

Pakunsuwelo de bobo na lang ito (This is just a band-aid solution),” Mar S. Valbuena, chairman of the transport coalition Manibela, said of the increase in the minimum fare for traditional jeepneys to P11 from P9 in all regions starting July 1.

He noted that there has been a significant increase in the price of diesel.

Oil companies on Monday announced another round of hikes, P0.50 per liter for gasoline and P1.65 per liter for diesel. Since the start of 2022, per-liter prices of gasoline, diesel, and kerosene have gone up by P28.70, P41.15, and P37.95, respectively, as of June 14.

Mr. Valbuena said the ideal minimum fare for traditional jeepneys, given the current crisis, is P14, but he acknowledged that this will severely hurt consumers.

“The new administration should come up with a good solution),” he said in Filipino in a phone interview.

The administration of Ferdinand R. Marcos, Jr., who took his oath as the 17th president of the Philippines on Thursday, can continue the subsidy program for public utility vehicle operators and drivers, the transport leader said.

He added, however, that the service contracting program should be reviewed and made more inclusive.

The Marcos administration should also put on hold the implementation of the jeepney modernization program due to the crisis, he said.

Starting July 1, the minimum fare for modern jeepneys nationwide will be P13, according to the Land Transportation Franchising and Regulatory Board (LTFRB).

Transport groups that petitioned for another fare increase have pointed out that while the transport regulator on June 8 granted a P1 provisional increase to the minimum fare for traditional jeepneys in three regions, increasing it to P10 from P9 for the first four kilometers, the cost of diesel was already P81.25 per liter. The P1 increase took effect in the National Capital Region, Region III (Central Luzon), and IV (Calabarzon).

‘NOT ENOUGH’
Transport expert Rene S. Santiago said the latest “increase is not enough to unlock supply.”

Pampalubag loob (conciliatory gesture); headache is transferred to the next administration,” he said in a phone message to BusinessWorld.

“For public utility jeepneys in the National Capital Region, P15 (is the ideal minimum fare) based on my calculation and current diesel price per liter,” he added.

The LTFRB said in its seven-page decision on the recent petition for jeepney fare increase that it is “mindful of the present economic state of every Filipino brought about by the continuous rise in oil prices in the world market and the reeling effects of the pandemic.”

Terry L. Ridon, convenor of public policy think tank Infrawatch PH, called on Mr. Marcos to expand the fuel subsidies given to the transport sector.

“The current level of subsidies (P6,500 worth of fuel) is clearly not enough for ordinary transport operators to survive,” he said in an e-mailed statement.

He said Mr. Marcos can “trim the fat in previous national budgets, in which there was an inflated focus on intelligence funding.”

“If the President wants more money for social programs, he can basically cut confidential and intelligence funding to a quarter of its current size. For context, funding in these sectors was massively expanded by President Rodrigo R. Duterte,” he added.

Another transport group, the Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide or PISTON, said the new administration should suspend the implementation of fuel taxes.

There should also be “more government control over fuel retail prices,” PISTON said in a statement.

“That means junking the 1998 Oil Deregulation Law that allowed fuel prices in the country to go unchecked,” it added.