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Fund for local infra projects may be tapped for unemployed Filipinos

A lawmaker is seeking to create additional jobs to boost local employment, through the appropriation of at least 10% of all funds allotted for local infrastructure projects.

Transportation Committee Chair and Samar Representative Edgar Mary Sarmiento filed House Bill 7591, otherwise known as the Employment Generation Through Infrastructure Investment Program, which mandates the government through the Department of Public Works and Highways (DPWH) to automatically allocate no less than 10% of project costs of infrastructure projects to “labor-intensive items of work” designated as “COVID-19 Items of Work”

COVID-19 Items of Work are pure labor tasks that require minimal skills which are needed in the implementation of a portion of an infrastructure project which shall be identified by the DPWH.

The said set of works includes construction of footpaths, construction and rehabilitation of sanitary and community facilities, installation of small scale water supply systems for schools, among other “minor construction” activities.

The hired workers will be considered as “extra hands” who should not be given “items of work which necessitate the use of equipment,” according to Mr. Sarmiento.

The lawmaker said the house measure “could provide the much-needed lifeline for many Filipinos,” especially the overseas Filipino workers who were forced to come back to the Philippines and those who have returned to their provinces due to loss of jobs in the country’s metropolis due to the COVID-19 pandemic.

“This proposal basically wants the government to help Filipinos who want to help themselves. Giving employment to help our people survive the pandemic is more sustainable than giving dole-outs,” he said. “The bill aims to address two pressing concerns. First, it will address unemployment. Second, it will benefit the community as the infrastructure projects are communal.”

Mr. Sarmiento believes that the government’s Build Build Build program remains a driving force to sustain the economy against the backdrop of economic recession.

“We have long known that infrastructure investment creates a multiplier effect which substantially boosts economic growth. The bill creates a mechanism wherein local infrastructure investment will directly translate into job generation,” he said. — Kyle Aristophere T. Atienza

Enhanced protection, benefits for media workers eyed in Senate measure

A Senate measure is seeking to provide enhanced protection, security, benefits for the country’s media workers.

Senate President Vicente Sotto’s Senate Bill No. 1820, otherwise known as the Media Workers’ Welfare Act, guarantees security of tenure for media workers given how they go “the extra mile” to give the public necessary information.

“At times when reliable and accurate information is crucial, such as today amid the menacing health impacts of the coronavirus disease (COVID-19) pandemic, media workers have set aside all fear and reason and have gone the extra mile to gather facts and figures to make the public fully aware of what is happening in their government and communities,” Mr. Sotto said in a statement to the press on Friday. “The media has even gone beyond their duty of newsgathering. They have become the voice of the marginalized and the scared. They bridge and connect the people and their public leaders.”

Citing the hazardous circumstances media workers are exposed to, the bill also guarantees them P500 daily as hazard pay for dangerous coverage.

Mr. Sotto said that media workers should be provided a comprehensive benefits package while also receiving current benefits enjoyed by other workers in both public and private sectors, adding that they should also be entitled to insurance benefits aside from what the government currently provides.

The House measure also hold media entities, including their franchise holders, responsible for “all contents released under its name,”

“Owners of media entities, including the franchise holder, shall be solidarily liable for any claims against media workers in connection with their work, regardless of the nature of engagement,” the bill stated.

The bill also noted that stakeholders of a media entity shall also be “solidarily liable for any claims arising from the aired through advertisements.”

“Any agreement to the contrary shall be void,” it further said.

Asked to comment on the proposed measure, National Union of Journalists of the Philippine Chairperson Nonoy Espina told BusinessWorld that any attempt to legislate matters concerning the media has serious consequences, saying that it could be used by state forces to suppress or regulate the press.

“Actually, the NUJP is, on principle, against any attempt to legislate media matters. First, we should not be treated as a special sector or subject to class legislation because we are not entitled to any more rights as everyone else. Second, any legislation affecting the media may always be used to regulate or suppress,” Mr. Espina expressed.

Proper enforcement of labor laws is enough, said the union leader. “All we want is the proper enforcement of laws such as those on labor,” he said.

Mr. Sotto’s proposed measure on media mandates the country’s labor department to create a News Media Tripartite Council that will cater to the concerns of media stakeholders.

Under the penal provision, a penalty of P30,000 to P500,000,000 would be imposed on a person or entity operating as a job contractor without a license. — Kyle Aristophere T. Atienza

BJMP pushes for law placing provincial jails under its control

The Bureau of Jail Management and Penology (BJMP) on Friday said that it supports the measure of lawmakers to place provincial jails under BJMP’s control, adding that this will streamline management of jails.

In a Laging Handa briefing on Friday, BJMP Spokesperson Xavier Solda said it is about time for provincial jails to have a standard management system.

“Ang nais po nating gawin, tulungan iyong ating mga provincial governors sa pagma-manage ng mga jail facilities nila na mag-extend ang BJMP ng karanasan kung papaano mas matutulungan pagdating sa reformation and rehabilitation programs. Pagdating sa records management, sa pag-strengthen ng security ng facility mahalagang factor po kasi ito,” he said.

(What we want to do is help our provincial governors in managing jail facilities with BJMP extending their experiences on how to help in terms of reformation and rehabilitation programs. When it comes to records management, [BJMP] can strengthen the security of the facility which is a valuable factor.)

The current law states that provincial governments have control over provincial and sub-provincial jails.

Earlier this week, the Senate Committee on Public Order and Dangerous Drugs approved a bill that will transfer the control of provincial and sub-provincial jails to the BJMP to establish a national standard in managing these facilities.

Senator Ronald M. dela Rosa, who heads the panel, said many provincial jails are in poor condition, with overcrowding and poor sanitation. — Gillian M. Cortez

 

PHL economy won’t be worse in next 12 months: Diokno

THE ECONOMY will not deteriorate further in the next 12 months as businesses are gradually resuming and with the virus better managed, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said on Friday.

“Let me assure everyone that based on immediate past, nowcast, and forecast data, the Philippines is now on its way to recovery. Hence, the economy would be in a better — not worse — shape 12 months from now,” Mr. Diokno told reporters in a Viber message on Friday.

The central bank chief’s statement came after a survey released by the Social Weather Stations (SWS) on Wednesday showed adult Filipinos had a 40% economic pessimism rate. This was the highest since the 52% logged back in June 2008.

More Filipino adults expect worse economic conditions in the next 12 months than those who expect it to stay the same (24%) and those who are optimistic that the economy will improve (30%), the SWS survey conducted among 1,555 adult Filipinos across the country showed.

Mr. Diokno said the survey only reflects the perception of a “limited number of adults with limited information.”

“I expect that the economy will be more open in Q4 than in Q3, more open in Q1 2021 than in Q42020, and so on. So it boggles my mind how the economy will be worse 12 months from now,” Mr. Diokno said.

After the country’s gross domestic product’s (GDP) record 16.5% contraction in the second quarter, which plunged it into recession, Mr. Diokno said he “cannot imagine how the economy will be worse off” as lockdown measures have already been eased since then.

Mr. Diokno added the virus is now better contained and lockdowns have been more localized and granular, allowing more businesses to reopen.

The government expects gross domestic product to shrink by 4.5% to 6.6% this year amid the ongoing crisis. By 2021, the economy is seen bouncing back with a 6.5% to 7.5% growth.

The economy may continue to contract until the first quarter of 2021 due to the crisis, but the decline will be less steep, said ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa.

“Although we may not see gross domestic GDP to contract by 16.5% anymore, negative GDP and the challenging job market may still be enough reason to be pessimistic over the next few months,” Mr. Mapa said in an email.

“We may have seen the worst of the downturn but it will be a while before we get back to where we were prior to COVID-19,” he added.

With this, Mr. Mapa said the government should redouble efforts to boost economic activities to complement the sizeable moves done by the central bank so far. — L.W.T. Noble

Fitch sees worse decline in power sector in the near term

By Denise A. Valdez, Senior Reporter

THE RESEARCH UNIT of Fitch Solutions Group Ltd. has downgraded its forecast for the Philippines’ power and renewables sector this year, projecting a 5.9% decline in power consumption and a 14% drop in coal generation.

In a Sept. 10 report sent on Friday, Fitch Solutions Country Risk & Industry Research said it continues to see the coronavirus pandemic weighing on the Philippines’ power sector in the near to medium term.

Problems stemming from the pandemic such as government financial constraints, weaker private investments and disruptions in labor and supply chains will remain a drag to the industry.

However, Fitch sees power demand rebounding strongly in the longer term, resulting in the need for an additional 44.8 gigawatts of new power capacity by 2040.

“This is driven by strong macroeconomic and demographic growth, along with government goals to achieve a 100% electrification rate by 2022…, which will drive up power demand over the coming years,” it said.

Before the coronavirus pandemic, Fitch was anticipating a 5% growth in power consumption this year. This was revised to a 2.4% contraction after the pandemic, but is now downgraded further to a 5.9% drop due to the continuing effects of the lockdown.

“As the market continues to struggle to contain the virus, we have seen renewed lockdowns across several cities, and our initial expectation for a (second half) recovery is now unlikely,” it said.

“Philippines has seen one of the longest and strictest lockdowns, which has led to a substantial slowdown in economic activity… (We have) revised real GDP [gross domestic product] growth for 2020 to contract by 9.1%, and we expect the recession to weigh heavily on power demand and generation by extension,” it added.

Power generation, particularly from coal, is likewise seen taking a hit from the pandemic. Fitch anticipates a 14% decline in coal generation this year, larger than its 8.4% forecast in the last quarter and its 5.1% forecast before the pandemic.

The decline can be attributed to coal’s baseload nature, among other reasons, which led to several coal-power plants temporarily suspending operations during the strict lockdown, the research firm said.

Until the medium term, Fitch expects that the Philippines’ power sector will remain challenged by other effects of the pandemic. Specifically, it said the financial limitations of the government may push it to redirect funds from infrastructure projects to more “immediate concerns” such as wage subsidies and handouts.

But the research firm projects power consumption to grow 4.6% annually from 2020 to 2029, with the growth coming from the demand for thermal sources and renewable energy, and in the longer term, nuclear power.

“We believe that President Duterte will likely pivot back to his infrastructure strategy and ‘Build Build Build’ campaign after the situation improves, which will provide the necessary support for the power sector,” Fitch said.

Export-oriented PEZA firms may now sell 50% of their output locally

HALF OF THE production of export-oriented economic zone manufacturing locators may be sold locally during the pandemic, the Philippine Economic Zone Authority (PEZA) said.

Export locators with PEZA incentives must have an export threshold of at least 70% of their production. Under PEZA’s recommendation, the domestic sales allowance has increased to 50% from the previous 30% of the total sales of the locators.

PEZA Director-General Charito B. Plaza said in a webinar on Friday this would put foreign owned businesses “on equal footing” with Filipino-owned locator companies.

“This will benefit not just the export producers with their expanding sales and increased access to the domestic market, but also the local economy through the ecozones’ enhanced forward and backward linkages,” she said.

She said this is a COVID-management measure to assist locators affected by the pandemic by allowing them to sell manufactured products locally while global export demand is down.

“In the process, PEZA is able to keep the locators afloat as well as the economy by ensuring the continuous operations of the makers and thereby sustaining the created jobs, livelihood, and other economic opportunities.”

This has been approved by the interagency task force on the coronavirus, Ms. Plaza said.

Merchandise exports in July declined by 9.6% to $5.654 billion compared with a revised 12.5% fall in June, preliminary data from the Philippine Statistics Authority showed. This marked the fifth straight month of decline.

Meanwhile, imports fell for the 15th consecutive month in July by 24.4% to $7.481 billion. — J.P. Ibañez

DBM releases 95.6% of budget at end-August

THE DEPARTMENT of Budget and Management (DBM) has released 95.6% of the P4.1-trillion spending plan for 2020 as of end-August.

The agency has so far released P3.924 trillion of the budget, data from the DBM showed. This leaves P176.303 billion yet to be distributed to respective government units.

Line agencies have already received 90.58% or P2.127 trillion out of the reduced P2.348-trillion programmed under the 2020 General Appropriations Act.

Some 49% or P297.395 billion of the P491.422 billion allotment for special purpose funds have also been released. The funds include budgetary support to state-owned firms, allocations to local government units (LGUs) and the contingent fund, among others.

Under automatic appropriations, the DBM has already disbursed P1.261 trillion, higher than the downwardly-adjusted program of P1.259 trillion. The segment includes retirement and life insurance premiums and the internal revenue allotment of local government units, among others.

On the other hand, the DBM has already completed the disbursement of other releases worth P237.148 billion under the 2019 General Appropriations Act. — LWTN

PCC pushes transition period for lower capital requirement for foreign retail investors

THE COMPETITION regulation body is proposing a grace period for the lowering of the capitalization requirement for foreign retail investors.

The Retail Trade Liberalization Act (RTLA) or House Bill No. 59 passed on third reading in March seeks to reduce the required minimum paid-up capital for foreign retail investors to $200,000, or around P10 million, from $2.5 million.

Under the version being tackled by the Senate, the proposed capitalization requirement is $300,000 or just below P15 million.

“Perhaps we can have a short transition period commencing with a $300,000 minimum capitalization requirement and then after x number of years, whether it’s three years or some other period, lower it down to $200,000,” Philippine Competition Commission (PCC) Commissioner Johannes Benjamin R. Bernabe said in a webinar organized by the American Chamber of Commerce of the Philippines on Friday.

“That might be a more suitable way of addressing the concerns about the actual figure to be finally agreed upon, and also provide some degree of grace period for the local MSMEs (micro-, small-, and medium-sized enterprises) to adjust,” he added.

The RTLA has been touted by the Trade department and foreign business chambers as a means to attract more foreign direct investments (FDI), especially after the Philippines was ranked as one of the most restrictive in terms of FDI regulations by the Organisation for Economic Cooperation and Development.

But local retailers flagged the RTLA as a threat to MSMEs as it could subject them to unfair competition from foreign investors.

The PCC said it supports the amendments to the RTLA but with measures to address the challenges faced by MSMEs.

Mr. Bernabe said there should be easing of regulatory permit requirements in improving credit access. The traditional criteria for credit access should be made more flexible for small businesses during the pandemic, he said.

Some other flanking measures include “enhancing the ability of MSMEs to partake of improvements in technology, reducing high electricity costs, and providing for a stronger linkage between the manufacturing supply base and those which are in the supply sector, the retail trade sector,” he said. — Jenina P. Ibañez

Q2 foreign investment pledges lowest in 9 quarters

By Marissa Mae M. Ramos, Researcher

Investment pledges made by foreign companies in the second quarter slumped to its lowest level in over two years, amid the global economic downturn caused by the coronavirus pandemic, according to data from the Philippine Statistics Authority (PSA).

The PSA said approved foreign investment pledges plunged 69% to P15.461 billion in the three months to June from P49.575 billion in the same period last year. This represents the amount of foreign-led projects given the go-signal by the country’s seven investment promotion agencies (IPAs).

The second-quarter result was the lowest amount since the P14.208 billion recorded in the first quarter of 2018, as well as the largest quarterly decline since the 82.8% plunge in the fourth quarter of 2017.

For the first six months of 2020, the approved foreign investment pledges reached P44.604 billion, only roughly half of the P95.560 billion during the same period a year ago.

Meanwhile, combined pledges of foreigners and Filipinos approved by IPAs totaled P575.34 billion, 5.4 times more than the year-ago P106.963 billion. Domestic pledges reached P559.879 billion in the second quarter, accounting for 97.3% of the total.

Should these commitments materialize, foreign and local investments pledged in the second quarter would generate 36,572 jobs, 21.4% higher than the projected additional employment of 30,135 a year ago.

Only six of the 17 regions recorded foreign pledges in the second quarter. Of these, the National Capital Region got 85.8% of the total or P13.262 billion. This is triple the commitments in the region in the second quarter of 2019.

CALABARZON — the region immediately south of Metro Manila consisting of Cavite, Laguna, Batangas, Rizal, and Quezon — received P1.884 billion in investment pledges or 12.2% of the total, followed by Ilocos Region’s P130.8 million (0.8% share), Davao Region’s P74 million (0.5%), Cagayan Valley’s P57.5 million (0.4%), and Central Luzon’s P51.7 million (0.3%).

Among the seven IPAs monitored by the PSA, the Philippine Economic Zone Authority contributed 65.4% of the total foreign investment pledges in the second quarter at P10.106 billion.

It was followed by the Board of Investments (BoI) at P5.258 billion; Cagayan Economic Zone Authority at P57.5 million; Subic Bay Metropolitan Authority at P25.8 million; Clark Development Corp. at P13.6 million; and the Authority of the Freeport Area of Bataan’s P45,672.

There are no approved commitments for the BoI-Bangsamoro Autonomous Region in Muslim Mindanao.

The United States was the biggest source of investment commitments during the period with P9.079 billion, nine times more than the P997.1 million in the second quarter of 2019 and accounting for 58.7% of the total. It was followed by the United Kingdom with P2.033 billion (13.2% share) and the Netherlands with P1.853 billion (12% share).

PANDEMIC’S EFFECT

“The decline in approved foreign investment pledges in the second quarter may still be due to the effects of the COVID-19 (coronavirus disease 2019) pandemic on investor sentiment and confidence on how the Philippines’ approach to managing and containing the pandemic relative to other neighboring economies,” John Paolo R. Rivera, an economist from the Asian Institute of Management, said in an e-mail.

The economist also said the surge in commitments from Filipino nationals would likely indicate “improving local sentiment on the domestic economy and optimizing opportunities on sectors that thrived during the quarantine period and will continue to thrive in the new normal.”

By sector, the administrative and support service activities made up 53.4% of the total foreign pledges in the second quarter with P8.262 billion. This was 2.6 times more than the P3.126 billion a year ago. This was followed by transportation and storage’s 25.3% share at P3.916 billion, up 4.4 times from last year’s P893.8 million. Manufacturing was third at P1.731 billion with an 11.2% share, but the amount of total pledges was 71.8% less than a year ago.

Mr. Rivera said enterprises under administrative and support services may have been operational during the lockdowns and would most likely grow in the new normal.
Asked for his outlook for the rest of the year, the economist said it would still depend on how the economy performs amid the pandemic.

“[A]s the Philippines moves on its way to ‘flattening the curve’, industries and sectors seen to survive and expand in the new normal would expect growth in [approved foreign investments,” Mr. Rivera said.

The foreign investment commitments tracked by the PSA are different from actual capital inflows tracked by the Bangko Sentral ng Pilipinas (BSP) for balance of payments purposes.

The BSP recorded $2.379-billion in January-May net inflows, down 25.6% from the past year’s $3.196 billion.

SEC strengthens stockholders’ right to inspect corporate records

The Securities and Exchange Commission (SEC) will investigate complaints against companies that refuse to allow stakeholders to inspect or reproduce corporate records.

The SEC issued a new memorandum circular on Aug. 20 to uphold the right of any director, trustee, stockholder or member of a corporation to request copies or excerpts of corporate records for inspection. This right is guaranteed under the Revised Corporation Code of the Philippines.

If such a right is violated, the memorandum said affected individuals may file a complaint with the SEC, through its Company Registration and Monitoring Department or any of its extension offices. Complainants need to pay a filing fee of P10,130.

The SEC considers it a violation if the company refuses to allow a stakeholder to inspect corporate records, fails to take steps to allow access to corporate records, and fails to give a reasonable amount of time to inspect records.

Upon receipt of a complaint, the regulator will investigate the case by summoning the involved respondents to a clarificatory conference.

The parties have an option to settle the matter amicably, but the SEC may still proceed with its investigation and decide on whether the respondents may be penalized.

The sanctions for such violation will be any or all of the administrative sanctions listed in the Revised Corporation Code of the Philippines. These are a P5,000-P1,000 fine per day of violation, a permanent cease and desist order, revocation of certification of incorporation, and dissolution of the corporation and forfeiture of its assets.

While the guidelines aim to enforce the right to inspect and/or reproduce corporate records, such activity is still bound by confidentiality rules under prevailing laws, such as the Intellectual Property Code of the Philippines, the Data Privacy Act and the Securities Regulation Code. — Denise A. Valdez

Duterte signs Bayanihan II into law

President Rodrigo R. Duterte on Friday signed the Bayanihan to Recover as One Act (Bayanihan II), which provides a P165.5 billion fund to boost the country’s coronavirus disease 2019 (COVID-19) response.

Executive Secretary Salvador C. Medialdea confirmed that Mr. Duterte signed on Friday the Bayanihan II law, which also extends the special powers granted by Congress to the President to deal with the health crisis.

The Bayanihan II law will provide a stimulus package of P140 billion plus a P25.5 billion standby fund. The law is expected to benefit industries and sectors affected by the COVID-19 crisis, while also providing more funding to the healthcare sector.

This is a follow up to the Bayanihan to Heal as One Act which was signed last March 24. The first Bayanihan law granted Mr. Duterte special powers to realign the funds under the 2019 and 2020 national budgets to COVID-19 measures. The law expired on June 24.

The second Bayanihan law will expire on December 31, 2020.

Bayanihan II forms part of the Finance department’s P180-billion stimulus plan, which also includes the tax relief contained in the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE).

Mr. Duterte first imposed a Luzon-wide lockdown in mid-March to contain the spread of the COVID-19. The stringent lockdown halted nearly all economic activity, plunging the economy into a recession when gross domestic product contracted by a record 16.5% in the second quarter. — Gillian M. Cortez

Security Bank records surge in digital transactions

SECURITY BANK Corp. recorded higher digital transactions during the last five months amid restrictions due to the coronavirus disease 2019 (COVID-19).

The bank’s digital transactions soared 170% from March 17 to Aug. 31, it said in a statement on Friday.

Security Bank said the growth was driven by the implementation of the enhanced community quarantine which began in April.

Online fund transfers were among the growth drivers as these climbed 312% this year from the 2019 level. Security Bank said these transactions included remittances sent via eGiveCash and withdrawn from its automated teller machines as well as online interbank fund transfers via InstaPay.

Online transactions for bills payment also grew by 48% from the year-ago level.

“We have seen a surge in the number of people transacting via Security Bank Online with transactions growing steadily month-on-month. We’ve also noticed that a huge chunk of transactions come from online bills payment. This has been one of the main drivers of our electronic channel growth with a 48% increase versus the previous year,” Security Bank Executive Vice President and Head of Transaction Banking Group John Cary L. Ong was quoted as saying.

The bank said it is developing more digital tools to ensure clients can make financial transactions safely amid the COVID-19 pandemic.

“Security Bank will continue to test and roll out new user-friendly features, streamline our digital solutions, and strengthen our technology and platforms to support the changing needs of our customers. Our commitment to continuous innovation allows us to provide BetterBanking services to those we serve,” Mr. Ong added.

Security Bank’s net income increased 8% year on year to P2.8 billion in the second quarter.

The bank’s shares closed at P95.10 apiece on Friday, gaining 10 centavos or 0.11% from its previous finish. — K.K.T. Jose

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