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PHL remains among weakest in rule of law

By Lourdes O. Pilar
Researcher

PHILIPPINE rule of law has remained one of the weakest in East Asia and the Pacific, according to an annual survey of the World Justice Project (WJP).

Where rule of law is strongest (or weakest)

The 2020 edition of WJP’s Rule of Law Index puts the Philippines at the 91st spot out of 128 countries globally, unchanged from the previous year. Its score was also unchanged at 0.47 on a 0 to 1 scale, where 1 indicates strongest adherence to the rule of law.

The score puts the Philippines at 13th out of 15 countries in East Asia and the Pacific (unchanged as in the previous year), and 13th out of 30 among lower-middle-income countries (compared to 14th previously).

WJP said the change in rankings “was calculated by comparing the 126 countries and jurisdictions measured in the 2019 index with the rankings of the same 126 countries and jurisdictions in 2020, exclusive of two new additions to the 2020 index [Kosovo and The Gambia].”

Denmark, Norway, and Finland were the top three overall performers, while the bottom three performers were the Democratic Republic of the Congo (126th), Cambodia (127th) and Venezuela (128th).

Meanwhile, New Zealand (seventh overall), Australia (11th), and Singapore (12th) were the top three countries with the highest rule of law scores in the East Asia and the Pacific region. On the other hand, the Philippines, Myanmar (112th), and Cambodia (127th) made up the region’s bottom three.

“More countries declined than improved in overall rule of law performance for a third year in a row, continuing a negative slide toward weakening and stagnating rule of law around the world. The majority of countries showing deteriorating rule of law in the 2020 Index also declined in the previous year, demonstrating a persistent downward trend,” the WJP said in its press release.

WJP also noted the Philippines as one of the countries with the largest average annual percentage drop in the rule of law over the last five years at 2.5%, along with Egypt (-4.6%), Venezuela (-3.9%), Cambodia (3%), Cameroon (-2.4%), Hungary (-2.1%), and Bosnia and Herzegovina (-2.1%).

Sought for comment, Justice Secretary Menardo I. Guevarra said the Filipinos’ respect for the rule of law “remains very high” and is “certainly much higher than the score given by the WJP.”

“[W]e continue to faithfully observe and adhere to our constitution as our fundamental law; our courts are functioning as they should; the crime rate is going down; and our legal system is as vibrant as any in this part of the world,” Mr. Guevarra told BusinessWorld in an e-mail.

“[H]owever, our structural challenges are numerous: lack of prosecutors, lack of judges, lack of resources relative to a huge population. Certain acts of violence have been sensationalized, and the existence of some misfits in law enforcement have attracted a lot of media attention, thus giving an unfair impression of widespread impunity and lack of respect for the law. While this may be true… at times, it is not, in my opinion, the general situation in our country,” he added.

In the WJP ranking, countries were assessed in 44 indicators that are, in turn, grouped into eight factors: constraints on government powers; absence of corruption; open government; fundamental rights; order and security; regulatory enforcement; civil justice; and criminal justice.

The Philippines’ score declined to 0.50 from 0.53 in the 2019 survey in terms of “constraints on government powers,” as well as that in “absence of corruption” (0.46 from 0.47); “open government” (0.52 from 0.53); and “fundamental rights” (0.41 from 0.42).

Meanwhile, the country saw improvement in its scores in “order and security” (0.65 from 0.60); “regulatory enforcement” (0.48 from 0.47); and “civil justice” (0.46 from 0.44).

Its score on “criminal justice” remained unchanged at 0.31.

The results of the 2020 WJP Rule of Index was based on more than 130,000 household and 4,000 expert surveys worldwide.

Where rule of law is strongest (or weakest)

PHILIPPINE rule of law has remained one of the weakest in East Asia and the Pacific, according to an annual survey of the World Justice Project (WJP). Read the full story.

Where rule of law is strongest (or weakest)

‘Hysteria’ over coronavirus hurting malls, hotels

PANIC over the spread of the coronavirus disease 2019 (COVID-19) around Metro Manila is hurting the property sector, as more Filipinos avoid visiting shopping malls and staying at hotels.

In a briefing in Makati City yesterday, Pronove Tai President and Chief Executive Officer Monique C. Pronove said the coronavirus outbreak will weigh heavily on the hospitality and retail sectors, as the number of foreign tourists plunge and major public events such as conferences are canceled or postponed.

“Mass hysteria will impact the property sector in the first half of 2020 as a reaction to COVID-19,” she said.

“Occupancy level will drastically decrease due to lower tourist arrivals, as well as temporary postponement of large MICE (meetings, incentives, conferences and exhibitions).”

Major trade events, such as the Philippine Hospitality Summit, Chamber of Thrift Banks Convention, Philippine World Building and Construction Exposition and Franchise Asia Philippines, scheduled this month have been postponed to later dates. These were supposed to be held at convention centers, hotels and events venues around Metro Manila.

Pronove Tai said occupancy levels in the hospitality sector have been averaging 65% for the last five years, but this may be halved due to COVID-19.

Government estimates showed the Philippines may lose as much as 1.42 million foreign tourist arrivals this year, amid a travel ban imposed on Chinese tourists. Of the 8.26 million visitor arrivals last year, Chinese tourists was the second-biggest source at 1.74 million.

At the same time, Ms. Pronove noted that major regional retail centers will see lower foot traffic, as Filipinos are advised by health officials to avoid crowded public spaces and practice social distancing.

While some call for a lockdown of Metro Manila, Ms. Pronove warned such a move will be counterproductive, as this will further drag the country’s economy that is largely powered by consumer spending.

“Our call to action is to disinfect… We have a responsibility to keep the economy going,” she said, adding that buildings should always be disinfected.

“What I’m very scared of (is turning public spaces into) virtually ghost towns. We don’t want that to happen, because jobs will be affected, the economy will be affected. We can prevent it through education,” Ms. Pronove said.

Mall operators have been implementing measures to ensure the safety of its customers and employees.

SM Supermalls President Steven Tan said temperature checks are implemented at the malls’ entrance, where alcohol dispensers are also available. He said common areas are regularly disinfected, and comfort rooms are sanitized every 30 minutes.

Ayala Malls, Inc. President Jennylle Tupaz in a statement said high-touch surfaces such as escalator handles, railings and elevator buttons are regularly disinfected, while sanitizers are available at elevators and concierge counters at all of its malls.

“Restrooms strictly follow our standard 5-10-15 protocol, where cubicles and water closets are cleaned for every five customers, surfaces are wiped every 10 minutes, and restroom amenities such as soap, hand sanitizers, and toilet papers are replenished every 15 minutes,” Ms. Tupaz said.

RESILIENT SECTORS
Unlike the retail and hospitality sectors, the office, residential and industrial warehousing segments are likely to be more resilient during these times.

“This hysteria will obviously impact those two sectors. But the leases for offices, for other sectors, these are three- to five-year leases. It’s not going to go down drastically. Landlords will always adopt a wait-and-see attitude,” Ms. Pronove said.

Property developers said they expect demand for residential spaces to remain high, although purchases may be delayed until the COVID-19 outbreak subsides.

In a separate panel discussion by online property marketplace Lamudi yesterday, officials of Federal Land, Inc. (FLI) and PHINMA Property Holdings Corp. said business has been performing well, and may remain so if things do not worsen in the next months.

“Our first two months were very good. The first week of March was also very good in terms of sales of our residential units. So we are not feeling the effect yet,” FLI Executive Vice-President Catherine C. Ko said.

“We anticipate, though, that…there may be a little resistance. We might have to hold off on some of our open houses… If people don’t come and see our model units, maybe there’ll be a move to postpone buying, but not to cancel outright,” she added.

PHINMA Property Chief Executive Officer Raphael B. Felix shared the same view: “Things were good. Do I expect it to be otherwise? Depends how this escalates.”

Unlike going to a mall or eating out at a restaurant, he said buying a property is not a decision that one makes overnight and could change in an instant.

“If it’s going to continue its trend — you get about five new cases every week — then I don’t see it affecting much. Why? Home buying is something you plan for… It’s something you plan for well in advance. People have this in their minds, they have it as an objective, and they’re out to do it,” Mr. Felix said.

However, property developers are looking at how the virus fallout may impact projects, in the event of disruption in the shipment of raw materials and lack of available labor.

“If you don’t have workers constructing the buildings, then we will be delayed. We have not seen any of that happening yet… but we are already monitoring,” FLI’s Ms. Ko said.

PHINMA Property’s Mr. Felix said building completions may be affected if shipments of raw materials from China are delayed.

“The major effect of all of these is to our income statement. Our accounting system in this country is based on percentage completion. If our construction projects don’t go, even if all the sales are there, we don’t recognize revenues. That’s a big problem for us,” he said. — Denise A. Valdez

Udenna takes over Chevron stake in Malampaya

Malampaya gas-to-power project fuels five power plants in Luzon with a capacity of 3,200 megawatts

UDENNA CORP. said on Wednesday that its unit had completed the acquisition of Chevron Malampaya LLC’s 45% stake in the Malampaya gas-to-power project located offshore of northwest Palawan.

“We see immense potential in natural gas, the fuel of the future, and we are optimistic and excited to bring its full benefits to Filipinos,” Udenna Chairman Dennis A. Uy said in a statement.

The completed deal comes months after Udenna announced in November last year that its subsidiary UC Malampaya Philippines Pte Ltd. had signed a sale and purchase agreement to acquire Chevron’s stake in the deepwater project, the country’s only source of natural gas in large commercial quantity.

The Malampaya field supplies five power plants in Luzon, serving 30% of the national demand for electricity with a capacity of 3,200 megawatts.

UC Malampaya is joining Shell Philippines Exploration B.V., which also has a 45% stake, and state-owned Philippine National Oil Co. Exploration Corp. (PNOC-EC), which owns the remaining 10%, in developing the almost two-decades-old Malampaya project under the Department of Energy (DoE)-awarded Service Contract 38.

“We look forward to working with our joint venture partners, Shell and PNOC-EC, and Malampaya’s key stakeholders, including the Philippine [DoE], to ensure that Malampaya continues to play an important role in developing a sustainable clean energy business in the Philippines,” Mr. Uy said.

Udenna’s statement could mean that PNOC-EC did not exercise its right to acquire 10% of the shares sold by Chevron.

In December last year, DoE Secretary Alfonso G. Cusi told reporters that PNOC-EC was exercising its right “because we feel that the acquisition price is very advantageous for [the company] to invest.”

Mr. Cusi chairs the board of PNOC-EC.

Sources at the DoE, Shell Philippines and PNOC either declined or did not respond when asked to validate whether PNOC-EC did not exercise its right.

The deal between Udenna unit UC Malampaya and the unit of Chevron Philippines, Ltd. to buy the full stake of the consortium partner was signed on Oct. 25, 2019. The parties did not disclose the value of the acquired stake.

Udenna holds Mr. Uy’s interest in diversified businesses, including distribution and retail of finished petroleum products, shipping and logistics.

The Davao City businessman’s portfolio has expanded to property development, education, food, gaming, tourism, and infrastructure. — Adam J. Ang

SEC plans to ease filing rules for firms amid virus

THE Securities and Exchange Commission (SEC) is planning to relax regulatory policies for corporations amid the coronavirus disease 2019 (COVID-19) outbreak.

In a statement Wednesday, the country’s corporate regulator said it is finalizing two memorandum circulars that would allow remote communication for meetings and extend the deadline for filing annual reports.

“The SEC will issue a memorandum circular to provide guidelines on the attendance and participation of directors, trustees, stockholders, members and other officers of corporations in regular and special meetings through remote communication,” it said.

“(It) is likewise set to issue a memorandum circular giving all affected companies more time to submit their annual reports (SEC Form 17-A), including annual financial statements, for the period ended December 31, 2019, as well as quarterly reports (SE Form 17-Q) for the first three months of 2020 for publicly listed companies,” it added.

This comes after the bourse operator Philippine Stock Exchange, Inc. advised shareholders of publicly listed firms on Tuesday to explore remote participation in annual stockholder meetings scheduled in the coming weeks.

“In line with the President’s declaration of a state of public health emergency, the Commission will explore and implement all appropriate measures to help contain the spread of COVID-19 and mitigate its effects,” SEC Chairperson Emilio B. Aquino was quoted as saying in the statement.

The SEC said it has started doing meetings remotely to explore the possibilities that companies may implement to address the threat of COVID-19.

The extended period for submitting regulatory filings will likewise accommodate companies that are affected by travel restrictions and work suspensions.

Until the circulars are out, the regulator said companies may use the SEC Express Nationwide Submission to file annual reports via courier. Copies of the filings may be obtained by the public by requesting through www.secexpress.ph or calling (02) 8737-8888.

As of writing, the number of confirmed COVID-19 cases in the Philippines stood at 33, some of which were results of local transmission of the virus.

The Department of Health advised the public to avoid going to public places and attending mass gatherings to limit the spread of the virus. — Denise A. Valdez

SMC foods and drinks unit posts 6% profit increase to P32 billion

PROFITS of San Miguel Food and Beverage, Inc. (SMFB) climbed 6% in 2019, driven by higher volumes of its products and an increase in average selling prices.

In a statement yesterday, the listed food and beverage arm of San Miguel Corp. (SMC) said its consolidated net income in 2019 stood at P32.28 billion. Consolidated revenues also improved 9% to P310.79 billion.

The main driver of the company’s growth was its beer business, which posted a 10% increase in revenues to P142.27 billion backed by increased beer volumes.

The food segment added P139.46 billion in revenues, up 5% year on year, due to the recovery of its poultry business previously challenged by an industry-wide decline. It noted consumer demand also remained strong for its key products such as Tender Juicy Hotdogs, Purefoods Chicken Nuggets, Purefoods Corned Beef, Magnolia Gold Butter and Star Margarine.

The spirits and liquor segment had the highest jump in revenues at 17% to P29.06 billion. The increase was driven by a 14% rise in volumes, which the company attributed to successful promotional campaigns.

“We continue to remain confident in the strength of the Philippine consumer and resilience of the economy,” SMFB President and Chief Executive Officer Ramon S. Ang was quoted in the statement as saying.

“We believe we have the ability to overcome the challenges we now face as we continue to expand the breadth of our product offerings and reinforce our presence in markets. We remain focused on delivering the best products, and providing improved results to all our stakeholders,” he added.

In a separate disclosure to the stock exchange, SMFB said its board of directors approved looking at alternatives to conduct the company’s annual stockholders’ meeting amid the coronavirus outbreak.

“In light of public health concerns…, the board approved for management to study whether to allow stockholders to attend and vote through remote communication…, and if so, for management to determine the mechanics to implement such mode of voting…,” it said.

The annual stockholders’ meeting of SMFB is scheduled on June 3.

Shares in the company at the stock exchange closed flat on Wednesday at P67 each. Shares in its parent SMC were also flat at P119.50 each. — Denise A. Valdez

Venture capital firm Kickstart sees more local investing opportunities

By Arjay L. Balinbin
Reporter

KICKSTART Ventures, Inc. said it sees more opportunities to invest this year in startups that offer Internet-of-Things (IoT) innovations for “smarter living.”

“We are seeing a lot in network technology and IoT. We are seeing a lot of opportunities around connected devices. Some [startups] are locals and some of them are from overseas. This is the year that there are more and more companies that think how to make devices more intelligent, connect them to the cloud and help people analyze data,” Kickstart Vice President Joan Cybil Yao said in a recent interview.

Kickstart is a venture capital firm, a wholly-owned subsidiary of Globe Telecom, Inc. and backed by Ayala Corp. and SingTel. It has invested in 42 digital startups across seven countries since it was established in 2012.

“The bulk of our investments are here in the Philippines. The others are in the US, Canada, Israel, Indonesia, Singapore, and Malaysia,” Ms. Yao said.

For her part, Kickstart President Minette B. Navarrete said the company is also looking to invest in areas that are relevant to the Ayala Corp. and the Department of Trade and Industry.

“We are faithful to the kind of future we want to build; hence, we have four descriptors for the future that we would like to build, and these four themes shape the kinds of investments we want to make,” she said.

The four investment themes, she said, are: A Frictionless Future, From Automation to Augmentation, Smarter Living, and A World of Plenty.

“How do we remove frictions for a regular person on a day to day basis? That’s what a frictionless future is… What we would also like to do is look for a technology which enhances the human capital and makes work less dangerous, less repetitive, more enriching, and more engaging. As for the smarter living, we are looking for a technology which makes people’s lives more secure, or maybe more enjoyable, or maybe helps them integrate better with other people in the community,” Ms. Navarrete said.

For the fourth theme, she said: “We are looking for solutions that are more reliable, more affordable, and more accessible to get services to wider population whether it’s water, energy or clean air.”

Ms. Navarrete said Kickstart started with $2.5 million seed fund in 2012, followed by $50 million growth fund in 2015.

“Last year, we got a new fund from Ayala, and that’s a commitment of $195 million,” she added.

On her assessment of the company’s performance last year, Ms. Navarrete said: “I think it was a big year for us. We nearly doubled the deal flow. We invested and raised more cash.”

Ms. Yao said the company is currently in talks with “quite a few” startups.

“We have presented them to our investment committee, and some are in the final stages of the deal while others are in the earlier stages,” she noted.

Amazon launches business selling automated checkout to retailers

AMAZON.COM Inc. on Monday is set to announce a new business line selling the technology behind its cashier-less convenience stores to other retailers, the company told Reuters.

The world’s biggest web retailer said it has “several” signed deals with customers it would not name. A new website Monday will invite others to inquire about the service, dubbed Just Walk Out technology by Amazon.

The highly anticipated business reflects Amazon’s strategy of building out internal capabilities — such as warehouses to help with package delivery and cloud technology to support its website — and then turning those into lucrative services it offers others.

Its chain Amazon Go has brought shopping without checkout lines into the mainstream, and the market for retail without cashiers — one of the most common vocations in the United States — could grow to $50 billion, US venture firm Loup Ventures has estimated.

Dilip Kumar, Amazon’s vice president of physical retail and technology, had no market forecast to share but said shoppers’ preferences will determine how big the business becomes.

“Do customers like standing in lines?” he asked. “This has pretty broad applicability across store sizes, across industries, because it fundamentally tackles a problem of how do you get convenience in physical locations, especially when people are hard-pressed for time.”

Unlike Amazon Go stores, shoppers will insert a credit card into a gated turnstile to enter, rather than scan an app. The turnstiles will display the logo “Just Walk Out technology by Amazon,” but all other branding and store aspects will be controlled by the retailer using the service.

Items picked up by a customer and any guests who enter with them will be added to the shopper’s virtual cart. The store will then bill the credit card once the person or group leaves the store — no bar code scans or checkout lines necessary.

Kumar said Amazon will install the technology including ceiling cameras and shelf weight sensors at retailers’ stores, whether they are new locations or retrofits, and it will have a 24-7 support line.

COURTING RIVALS?
A by-product of demand for the offering would be increased usage of Amazon Web Services, the company’s cloud that underpins its checkout-free systems.

Still, high demand is by no means certain. Other vendors including Grabango and AiFi are offering automated checkout to retailers, which in the past have been loath to hand deals to their rival Amazon that has been the biggest disruptor of their brick-and-mortar businesses.

Media reports have said Amazon was in talks to bring its technology to airport stores, for instance, rather than to Walmart Inc or Target Corp. Kumar said Amazon “potentially” could sell the service to big box rivals but would not speculate.

He declined to comment on the service’s business model or pricing, saying, “a lot of those are bespoke deals.”

One issue that may arise is who owns the shopper data, something that businesses typically want in order to tailor marketing offers and build their customer base.

Shoppers who desire a receipt will be able to type their email into a kiosk at any store. Amazon will send receipts to that address each subsequent time the credit card is used at a Just Walk Out location, no matter the retailer. Kumar said Amazon saves the email address and ties that to the credit card information, solely for the purpose of charging the customer.

Kumar would not discuss whether or how Amazon would integrate this into retailers’ loyalty programs but said, “These are the retailers’ customers.”

“We prohibit the use of Just Walk Out technology data for anything other than supporting Just Walk Out retailers,” he said. — Reuters

Yields on BSP’s term deposits drop on virus, lower oil prices

YIELDS on the central bank’s term deposits declined. — BW FILE PHOTO

YIELDS ON THE central bank’s term deposit facility (TDF) declined further on Wednesday amid developments in the coronavirus disease 2019 (COVID-19) outbreak and the recent drop in oil prices.

Bids for the term deposits offered by the Bangko Sentral ng Pilipinas (BSP) amounted to P217.39 billion on Wednesday, beyond the P150 billion auctioned off by the central bank and also higher than the P168.216 billion seen the previous week for the P120-billion offer.

Tenders for the seven-day deposits totaled P66.733 billion, surpassing the P50 billion on offer and also beating the P48.697 billion in bids logged on March 4.

Yields for the tenor ranged from 3.7% to 3.8%, down from the 3.75% to 3.85% margin logged last week. This caused the average rate to drop to 3.7557%, down by 2.64 basis points (bps) from last week’s 3.7821%.

For the 14-day term deposits, total bids amounted to P70.844 billion, higher than the P50 billion on offer as well as the P52.454 billion in tenders seen last week for the P40 billion on the auction block.

Banks sought yields ranging from 3.75% to 3.8125%, a slimmer band compared to the 3.765% to 3.85% range seen last week. This brought the average rate to 3.7757%, slipping by 5.45 bps from the 3.8102% seen on March 4.

On the other hand, bids for the one-month term deposits hit P79.813 billion, higher than the P50 billion on offer and also going beyond the P67.065 billion worth of tenders logged last week for a P30-billion offering.

Yields sought by banks for the 28-day tenor ranged from 3.675% to 3.78%, a wider margin compared to the 3.75% to 3.8% seen last week. With this, the average rate for the papers settled at 3.7436%, inching down by 4.24 bps from the 3.786% seen a week ago.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the lower yields to weaker investor sentiment caused by the coronavirus disease 2019 (COVID-19) outbreak, as well as tensions caused by the oil price war.

“These lower yields indicate the continuing impact of the COVID-19 and oil price war uncertainties on investor sentiment. The downward pressure on yields is expected to continue as players continue to take on lesser risks,” Mr. Asuncion said in an e-mail.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort also said the decline in oil prices may have dragged down yields further.

“The latest decline in TDF auction yields was largely triggered by the sharp decline in global oil prices, to new 4-year lows, thereby could reduce the country’s inflation rate and further increase the odds of a further cut on local policy rates,” Mr. Ricafort said in an e-mail.

Reuters reported that Saudi Arabia on Tuesday announced that it would heighten its oil supplies to a record high in April, raising the stakes in a standoff with Russia and effectively rebuffing Moscow’s suggestion for new talks.

On Monday, oil prices fell by about 30% after Saudi Arabia slashed its selling price in a bid to start a price war with Russia amid falling demand in the market on the back of the COVID-19 outbreak.

The BSP’s Monetary Board will have its second policy-setting meeting on March 19. BSP Governor Benjamin E. Diokno has said the COVID-19 outbreak, the emergency rate cut of the US Federal Reserve last week, as well as the 2.6% headline inflation print in February will be among the factors they will consider in their rate decision.

Rates of the BSP’s overnight deposit, overnight reverse repurchase, and overnight lending facilities are currently at 3.25%, 3.75% and 4.25%, respectively. — Luz Wendy T. Noble with Reuters

Senate resolution on ABS-CBN operation turned over to NTC

THE Senate on Wednesday turned over to the National Telecommunication Commission (NTC) the resolution allowing ABS-CBN Corp. to operate while its franchise extension is pending in Congress.

“This is the official turnover of the approval of the resolution authored by Senator Drilon and all the members of the Senate to the NTC for the provisional authority of ABS-CBN so they could continue operations while their application is pending in both Houses,” Majority Leader Juan Miguel F. Zubiri said in a briefing, Wednesday.

Under Senate Resolution No. 344, thirteen senators moved to authorize the commission to permit the continued operation of ABS-CBN and subsidiary, ABS-CBN Convergence, Inc.

The resolution also covered other franchisees, whose applications are likewise pending in the House of Representatives, namely: Sky Cable Corp. and Amcara Broadcasting Network, Inc.

Mr. Zubiri guaranteed that the chamber would act swiftly on the bills, once the franchises are transmitted.

“We’ll hope and pray na pagbalik natin sa May 4, maaksyunan agad ng ating (that upon our return on May 4, the franchise will be acted on by our) colleagues sa House of Representatives,” he said. “Dito sa senado (In the senate), we guarantee very quick discussions on the matter and we’ll dispose [of] it as soon as possible.”

The House Legislative Franchises Committee on Tuesday started tackling the ABS-CBN franchise, adopting in the process the letter, written by Palawan Rep. and chair of the committee Franz E. Alvarez and House Speaker Alan Peter S. Cayetano, to allow ABS-CBN to continue operation.

The NTC was represented by Deputy Commissioner Edgardo V. Cabarios, who assured the provisional authority will be issued “unless we are restrained by the court.’’

Senate Minority Leader Franklin M. Drilon, for his part, clarified that any case against ABS-CBN will not affect the provisional authority.

“In our view, while the application for the renewal of the franchise is pending, de facto the expired franchise will continue to exist, especially the authority granted by the NTC,” he said in the same briefing.

Meanwhile, the Senate has approved on third and final reading the bills extending the franchise granted to six broadcasting networks for 25 years.

The bills are for the franchise application of Broadcast Enterprises and Affiliated Media, Inc. (BEAM), Crusaders Broadcasting System (CBS), Bicol Broadcasting System, Inc., Golden Broadcast Professional, Inc., Gold Label Broadcasting System, Inc. (GPBI), and the Global Satellite Technology Services, Inc.

“We want to make sure that all franchises are given equal opportunity and prompt scrutiny as we recognize the value of able media firms as sources of job opportunities and information, especially in the countryside,” Senator Grace S. Poe-Llamanzares said in a statement, Wednesday.

Beam largely caters to Metro Manila, Cebu and Davao. It also reaches audiences in Baguio and Naga in Luzon, Iloilo in Visayas and Zamboanga in Mindanao. CBS, meanwhile, is a religious radio network that operates the DWAD 1098 AM station.

Bicol Broadcasting operates radio stations, serving Camarines Sur and some areas in Camarines Norte and Albay among other parts of the Bicol region. It’s DWLV station offers retro hits, while DWLV-FM serves public information and current affairs programming.

GBPI is a Zamboanga-based network with flagship programs, Dateline Teleradyo and Dateline Zamboanga. It also operates Magic 95.5 FM; while the Gold Label, established in Dumaguete, is known for its Power 91 DYGB-FM, which offers both news and music and entertainment.

The Global Satellite, formerly the First United Broadcasting Corp., is an alternative source of international entertainment and information. It operates a news channel, the Global News Network, and radio stations, Pampanga44, Naga43, and Cagayan de Oro45 among others.

The networks’ franchises will all expire in May, while Gold Label’s will end in July.

Ms. Llamanzares said the granting of franchises is a public duty and reiterated that it is a privilege granted by Congress. — Charmaine A. Tadalan

Wells Fargo CEO tells US Congress bank is tackling regulatory issues

NEW WELLS FARGO & Co. Chief Executive Officer (CEO) Charlie Scharf testified on Tuesday that substantial change was under way at the bank as lawmakers grilled him on the status of its remediation efforts and contingency plans related to coronavirus.

“We are putting a substantially different group of people in charge of these issues,” he told members of the House Financial Services Committee.

Since taking over the scandal-plagued bank late last year, Mr. Scharf has shaken up its leadership and overhauled the bank’s business lines, winning over some regulators in the process.

Last week the Office of the Comptroller of the Currency, the bank’s top regulator, said it was encouraged by the new leadership. Many lawmakers were cautiously optimistic that Mr. Scharf was the right person for the job but said righting the bank would be a tall task.

“While I wish you luck, it is clear to this Committee that the bank you inherited is essentially a lawless organization that has caused widespread harm to millions of consumers throughout the nation,” Democratic House Financial Services Committee Chair Maxine Waters said in her opening remarks.

Ms. Waters on Thursday told reporters that after meeting with Scharf, she had no indication that he had a compelling plan for turning around the bank.

In a report released last week, the committee unearthed documents and e-mails that appeared to reveal complacency on the part of the bank’s directors and management, including board Chair Betsy Duke, regarding its various regulatory issues. Ms. Duke resigned on Monday.

When pressed for details on the status of the bank’s remediation efforts and a timeline for getting over the bank’s regulatory hurdles, Mr. Scharf was light on specifics but was clear that his management team was committed to working through the banks issues with a fresh sense of urgency.

Ms. Waters and others on the committee, which is responsible for overseeing financial firms and their regulators, quizzed Mr. Scharf on the health of the banking system amid turmoil in global markets, and on social issues like gun financing and lending to minority groups.

Bank stocks have been hurt more than other sectors as the spreading coronavirus has led to lower interest rates and raised concerns about future credit costs as businesses are squeezed, according to analysts.

“We understand the seriousness of concerns felt by customers and employees about the coronavirus,” Mr. Scharf said in prepared remarks. During the hearing, he declined to provide specifics on how the bank planned to help consumers and clients who are facing hardships due to the health crisis, however.

When Mr. Scharf took the reins in October, he inherited a bank that was under federal investigation, subject to more than a dozen consent orders and hindered by an unprecedented Federal Reserve cap on its balance sheet growth. Sources inside the bank say that he has focused on tackling the bank’s problems by cutting unnecessary meetings and focusing on accountability.

The bank has also recently announced a number of initiatives that may appeal to the Democratic majority committee, such as increasing the minimum wage for its employees.

Prior CEOs John Stumpf and Tim Sloan left the company shortly after similar appearances before Congress.

Ms. Waters on Tuesday asked the Justice department to determine if Mr. Sloan broke the law in giving “misleading” sworn testimony to her panel one year ago, when he told lawmakers the bank was complying with a settlement to remediate customers harmed by its sales practices. Bank regulators said afterwards the bank was still coming up short in its efforts.

The Justice department declined to comment on Ms. Waters’ request.

Mr. Sloan’s attorney said the allegation was “inaccurate and completely unfounded.”

“His testimony to the committee about those efforts was truthful and in good faith,” Josh Cohen, of Clarence Dyer & Cohen LLP in San Francisco, said in an emailed statement. — Reuters

LT Group’s board approves P2-B share buyback

LT Group, Inc. is planning to buy back up to P2-billion worth of shares from the stock market until the end of next year.

In a disclosure to the stock exchange yesterday, the Lucio C. Tan-led company said its board of directors had approved the share buyback program which will start next Friday, March 20.

“[T]he board approved the corporation’s buyback program for the purpose of purchasing its shares from the Philippine Stock Exchange (PSE) starting Mar. 20 until Dec. 31, 2021 for an amount of not more than P2 billion from its unrestricted retained earnings…,” it said.

It added these shares are intended to be resold to the market “when it is beneficial to the corporation.”

Shares in LT Group gained 11 centavos or 1.34% yesterday to close at P8.31 apiece. This is a 53% drop from its 52-week high of P17.60 per share.

Buyback programs are commonly done by companies to preserve share price when they think their shares are undervalued.

Aside from LT Group, companies that have announced approving share buyback plans or have increased the amount of existing programs are Robinsons Retail Holdings Inc., Megawide Construction Corp., Metro Pacific Investments Corp. and Ayala Land Inc.

The market has been highly volatile in recent weeks, falling to bear market territory this week after closing at 6,312.61 on Monday. The Philippine Stock Exchange index picked up 34.88 points or 0.55% yesterday to settle at 6,353.26.

Earnings of LT Group grew 17% to P14.72 billion in the nine months to September 2019, while total revenues increased 27% to P68.86 billion. — Denise A. Valdez