Outmaneuvering themselves
It has taken on a life of its own, but it was evident that President Rodrigo Duterte’s only purpose was to stop Vice-President Maria Leonor “Leni” Robredo’s criticism of his so-called “war on drugs” when he dared her on Oct. 31 to take charge of it for the next six months.
The Vice-President had declared that the brutal Duterte anti-drug campaign was a failure and has to be “tweaked,” by which she meant re-studied and re-oriented. Mr. Duterte conveniently forgot that he himself had admitted early this year that he has failed to fulfill his 2016 campaign promise to put an end to the drug problem within six months.
Apparently on the assumption that Mrs. Robredo would refuse to take the Duterte dare seriously, Presidential Spokesperson Salvador Panelo went as far as to announce that if she accepted the post of “anti-illegal drugs czar,” the Vice-President would “have under her command all offices, bureaus, agencies or government instrumentalities involved in the enforcement of the law on prohibited drugs,” that they would be under her direct supervision, and that “to ensure her effectiveness in combatting the drug menace, she would have a Cabinet Secretary portfolio.”
Mr. Duterte himself then said that the post he was offering would last till the end of his term in 2022 and not just for six months, which was the length of time he had earlier said he was giving the Vice-President to address the drug problem.
Panelo in effect withdrew his earlier announcement when, despite her spokesperson’s statements to the contrary, Vice-President Robredo took Mr. Duterte’s dare in stride and accepted his so-called offer. Instead of repeating what he said before Mrs. Robredo accepted responsibility for the anti-illegal drugs campaign, Panelo then told the media that she should talk to Mr. Duterte first so she can be told what her powers and duties are as Co-Chairperson of the Interagency Committee on Anti-illegal Drugs (ICAD).
Mrs. Robredo’s acceptance of that post was apparently more than what the regime had bargained for. Because her statement on why she accepted the post despite reservations by her Liberal Party colleagues, human rights groups, and critics of the Duterte regime’s bloody and selective “war on drugs” was intelligent, sober, and statesmanlike, it immediately gained her widespread support. The next public opinion surveys will very likely confirm a boost in her approval ratings.
The Duterte dare was all too obvious in its intentions. If she had ignored the dare, it would have given regime allies, trolls and media hacks the opportunity to dismiss her as all talk. If she accepted it — which, judging from their earlier statements, Mr. Duterte’s accomplices thought was unlikely — the agencies involved, among them the Philippine National Police (PNP) and the Philippine Drug Enforcement Agency (PDEA) whose head would be her co-chairperson, could throw all sorts of obstacles in her path to make sure she would fail.
The political consequences of being perceived as just a nitpicking fault-finder or a failure are obvious enough. Among others, it would write off Mrs. Robredo as a possible opposition candidate for the Presidency in 2022, and, by validating Duterte regime claims that she and the opposition are incompetent, would help pave the way for the victory of Mr. Duterte and company’s candidate in the elections that year.
But what are at stake are far beyond what’s obvious. It is not only Mrs. Robredo’s and the opposition’s political future in the next eight years till 2028. On the block as well would be the fate of what’s left of Philippine elite democracy and the further entrenchment of the incompetent provincial despotism that has hijacked the political system, weaponized the law against its critics, and brought corruption to unprecedented heights while the rest of the country falls deeper and deeper into the pit of poverty, injustice, violence, and mass misery.
Mrs. Robredo had no choice but to accept under these circumstances. But she has wisely refused to be lured into issuing any declaration that she would succeed in the next two-and-a-half years in ridding the country of the drug problem that the Duterte regime has failed to eradicate in the more than three years it has been in power. Instead of making any such claim, she has pledged only to save as many lives as possible by redirecting the anti-drug campaign away from the wanton killing of suspected drug users and pushers to looking at the drug problem as both a public health and human rights issue.
The mindless assumption that the multidimensional drug problem — it is an economic, social as well as political, psychological and cultural issue — can be solved overnight by simply killing or jailing users and pushers has time and again been disproven. What the experience of other countries shows is that it will require both time as well as a multi-pronged, multi-disciplinal approach to even begin to address it.
Launched by then President Richard Nixon nearly 50 years ago in 1971, the United States’ own “war on drugs” has failed to curb drug abuse. Instead “it has ruined lives, filled prisons and cost a fortune,” said a New York Times op-ed piece in 2017.
The US is in fact still among those countries with the highest rates of drug use among their populations. Not original to the Duterte regime, but a phrase first coined by the US news media, the “war on drugs” is focused on making access to prohibited substances difficult. To combat their influx into its borders, the US spends billions in military aid to help Colombia — whose drug lords are among the main sources of the cocaine and other drugs that flood the US — stop the drug cartels. Drug abuse continues, however, and has led to the exponential growth of the US prison population as more and more young drug users end up in jail.
Closer to home, Thailand’s 2003 anti-drug campaign has similarly failed, despite the government of then Prime Minister Thaksin Shinawatra’s focus on killing drug dealers and users — a policy that by 2004 had cost over 3,000 deaths. Most of those killed, it later turned out, were not at all involved in the drug trade. Thailand’s drug problem has since worsened rather than abated.
Given these lessons from the experience of the US and Thailand, Mrs. Robredo wisely steered clear of promising the end of the drug problem under her watch. It isn’t only because her getting the full cooperation of the agencies involved is at least uncertain. It is also because the drug problem is rooted in, among other factors, poverty and the runaway corruption in some of those very agencies, among them, as the Senate hearings last September found, the PNP.
Meanwhile, the trap the regime set for Mrs. Robredo has backfired into a public relations disaster for it. It has enabled the Vice-President to focus on stopping extrajudicial killings (EJKs), while at the same time alerting the public to the imperative of holding Mr. Duterte to his pledge that the agencies under his command and control will provide Mrs. Robredo all the cooperation, support, information, and help she needs between now and 2022. By the end of his and her terms that year she could emerge the winner in the short-sighted attempt to silence and destroy her politically. Mr. Duterte and company have very likely outmaneuvered themselves.
Luis V. Teodoro is on Facebook and Twitter (@luisteodoro).
The Triune Brain and Selling
By Raju Mandhyan
SELLING is a process, and the stages of this process can be nebulous. It takes a while to understand and master the process, and the stages differ from industry to industry. These stages also continuously change over time as trends, technology, and theories of doing business evolve.
In the 1950s, transactional selling was the trend. Sales professionals drew attention to their products and services, generated the desire to buy in the buyer’s mind, and then moved in to close the deal. The process was sales person-driven and was typically a one-way street called Push.
In the 1980s when the range of products and services began to grow and the roads to market became congested, companies employed efforts to sell their products and services based on improved features, better advantages and increased benefits for the customer. The traffic in the business of selling was still jam-packed but the sales process had to become shrewd and tactical.
By the 1990s and into the new millennium, the world had had enough of being a material world and the trends became a lot more strategic and ecological. Sales professionals began learning to walk in the shoes of their customers. They began to think in terms of providing long-term ecological and sustainable solutions for their customers. The selling world began to realize that the hit-and-run techniques of the past weren’t working and did not make business sense or monetary logic. At the turn of the century and deep into the second decade of the 21st century, the profession of selling and the business it represented began to think in terms of the big picture, in systems. The business world and the selling profession realized the power and the wisdom of being altruistic, eco-conscious, value creators in the world.
This does not, at all, mean profits and profit making have been put aside. It means people have realized the long-term sense of nurturing and sustaining the resources from planet Earth. They have realized that all people are inter-connected. Exploiting and taking advantage of one group of people eventually harms many others and affects the entire world. Business and professional sales people have realized that making better use of the Earth’s resources and treating people fairly makes mighty good business sense. This is how smart businesses reap huge profits year after year.
Selling from the heart is, yes, about closing more deals, but it is also about being ethical in approach, conscientious in analysis, and creative in proving value-creating solutions. Above all, it’s about making sure the interventions provided do no systemic harm to the consumer, to the company, and to the ecology. Thus, it is not about greedily closing deals in the old way but about diligently diagnosing needs, offering options, earning trust, and establishing long-term partnerships with the client/customer. Tapping into the thesis of Dr. Paul Maclean’s study of the triune brain, effective selling from the heart is about aligning the choices of the Reasoning Brain, the Romantic Brain, and the Reptilian Brain towards the solution and value creation.
From an organizational and corporate perspective, the Reasoning Brain represents the analytical business side of the company, the Romantic Brain represents the visionary aspirations of the company, and the Reptilian Brain represents its values and deep-rooted culture. These three aspects of an organization also need to align for the company to grow, flourish, and lead in its field.
I must also highlight the rapid growth of communication technology, the internet and the influence of social media in the last two decades. Because of this, the selling profession has had to adjust its stance, change garb, and fly rapidly to keep up with the explosive growth of information disbursement that has become part and parcel of the world we live in today.
Yet winning the heart is to orchestrate sales in such a way that the customer feels that he bought wisely instead of being sold to smartly. Yet the organization she represents must feel assured that all acquisitions will more than serve their needs in the near and long-term. Think about that.
Raju Mandhyan author, coach and learning facilitator.
Volatile Hong Kong poses a supply-chain quandary
By Jeffrey Goldfarb
THE CORPORATE calculus on Hong Kong is changing. For a third consecutive weekday, transport networks have been disrupted by violent anti-government protests, prompting schools to close and leaving workers stranded. Much the way toymakers and apparel vendors have accelerated their quest for factories outside China, its special administrative region poses an international supply-chain quandary.
Hong Kong boasts an admirable track record of surviving shocks, from regular typhoons to the SARS epidemic. Five months of demonstrations this year, however, present an unprecedented challenge. A day after police shot a protester at close range, college students battled law enforcement in a prolonged and fiery standoff. Tear gas was fired in the crowded central business district at lunchtime.
The unrest has exposed a government, led by Carrie Lam, and a police force ill-equipped to cope. A police spokesman saying the city’s rule of law has been pushed “to the brink of total collapse” can only prompt multinational companies to accelerate contingency planning. More than 1,500 of them, with nearly 200,000 employees, have stationed their regional headquarters in Hong Kong, in large part because of the city’s robust rule of law.
So far, there have only been small signs of financial capital flight. Bigger changes are becoming inevitable, though.
Human capital will be a real challenge. Banks, consultants and others in the services industry will struggle to entice Western executives to move to a volatile Hong Kong. Likewise, violence being directed at the city’s mainland Chinese residents is bound to dissuade southbound relocations. And many Hong Kongers themselves will seek an escape hatch. It has happened before: About 300,000 of them were living in Canada in the late 1990s, around the time of the British handover.
Nearly half of companies surveyed by the American Chamber of Commerce in Hong Kong said they were pessimistic about business prospects longer-term. More than a third reported wrestling with a possible talent drain and a quarter indicated plans to scale back or move away. And that was over a month ago, before the latest escalation. Finding a different hub will be difficult, especially for those that need proximity to the influential stock exchange, depend on Hong Kong as a gateway to the mainland or relish an independent judiciary. Each day of fresh violence, however, makes alternatives look better.
REUTERS BREAKINGVIEWS
The platform is killing the middleman
By Diana Princess Yamashita
IF VIDEO killed the radio star in the 1980s and ’90s, the social web has its own version of the generational killer: The platform killed the middleman.
Our most famous platforms, such as Uber and Airbnb, don’t show this statement in action. They simply bridge two sides of a marketplace — cars and passengers, rooms and renters — and make the connection more efficient, maximizing what was once just unutilized capacity. But the platforms with longer supply chains do show the death of the middleman.
Take for instance the case of agriculture. Farm-to-table is so in vogue as a restaurant and conscious consumption choice because it is so unnatural. Food rarely makes its way straight from farmers to our homes. Instead, crops usually go through a whole chain of middlemen, who add their own margin to the cost of goods but nothing else of value for either the producers or consumers. Expressed as a term, the traditional supply chain might look like farm-to-middleman-to-second-middleman-to-third-middleman-to-fourth-middleman-to-fifth-middleman-to-table.
In this supply chain, middlemen hurt both farmers and consumers. Middlemen take away profit that could otherwise go to farmers, who, in the Philippine context, are primarily impoverished subsistence farmers who could use every centavo. On the other side of the equation, middlemen make healthy food prohibitively expensive for many Filipinos. If there can be blights on crops, middlemen are blights on the distribution process.
APPROACHES TO REMOVING THE MIDDLEMAN
Fortunately, some agri-tech companies are challenging the hold of middlemen on agriculture. In China, there is Meicai — which translates into “beautiful vegetable” — and that’s arguably what it delivers to consumers in 12 to 18 hours, beginning when an order is placed. Meicai began when founder Liu Chuanjun noticed that the price of 500 grams of corn had held steady at 90 cents for over 10 years, even though the cost of producing it had risen dramatically.
Founded in 2014, Meicai is now a unicorn several times over, proving that there is tremendous value to be gained in restoring profits to farmers and making fresh fruits and vegetables more affordable to consumers.
The success of Meicai shows that middleman can be cut out of the equation, so long as you have a sizeable enough customer base. Middlemen, after all, are only entrenched in the supply chain because farmers have relied on them so long to go-to-market. If tech companies can provide them with an even better go-to-market channel, then the heyday of middlemen is done.
The way that tech companies provide this go-to-market differs. In the Philippines, for example, fin-tech Asenso Tech Pte, Ltd. has created an end-to-end business enabler that rests on four pillars, including an aggregated demand marketplace that lowers the cost of agricultural inputs, responsible capital, microinsurance, and a consumer-facing marketplace that helps farmers get their products directly in front of customers.
“When harvest comes, we will create localized marketplaces so our farmers can take advantage of over 400,000 sari-sari stores (micro stores) and 40,000 karinderias (eateries) within our ecosystem,” explained Winston Damarillo, a serial tech entrepreneur and Asenso’s founder and chief strategist.
Asenso, in short, takes a two-pronged approach in helping farmers go-to-market. It sells raw goods to stores, who sell the products individually, as well as to eateries, who combine the foodstuffs into higher value meals. Such diversification across multiple customer profiles accelerates Asenso’s rise as an all-inclusive platform and frees farmers away from the lock of middlemen.
Asenso’s model has already received acclaim — the company recently won the Asian Development Bank’s (ADB) Global AgriFin Innovation Challenge over 39 other entrants. In doing so, Asenso won a grand prize of $10,000, and, more importantly, a pilot roll-out in partnership with ADB. The pilot will undoubtedly help Asenso further refine how it can provide even more value in taking farmers to market.
How agritech products like Meicai and Asenso are bridging the gap between farmers and consumers and producing more value in the process should be an example to other industries traditionally full of middlemen. Examples include everything from artisan fields like woodworking to major industries like healthcare and public service.
Rethinking how value is created and delivered is the fastest path to innovation in fields long thought already on the cutting edge. For every middleman that we cut away, it’s more value we’re providing to consumers and producers, the most important part of the process because they together create supply and demand.
Diana Princess Yamashita is a journalism student at Colegio de San Juan de Letran-Manila, and working as an Executive Assistant for the chairman of an IT company in Manila, Philippines.
The world is awash in financial capital
By Noah Smith
A HUGE SHIFT has taken place in the global economy during the past few decades. Financial capital was once scarce and it’s now abundant. This has huge implications for policies ranging from taxation to fiscal austerity to financial regulation. Economists and commentators who haven’t internalized that shift can sound irrelevant and out of touch.
It’s getting easier for companies and governments to borrow. Interest rates have come down steadily since their peak in the early 1980s.
Some of this represents a decline in inflation, which reduces nominal interest rates. But real rates have come down, too. Nor is it simply a return to normalcy after the high interest rates of the 1980s. Economists Marco Del Negro, Domenico Giannone, Marc Giannoni, and Andrea Tambalotti estimate that global real interest rates are lower now than at any time on record. Stock returns, meanwhile, are very hard to predict, but historically high price-to-earnings ratios suggest that future returns will be lower than in past decades.
Why are interest rates dropping? One possibility is that growth is simply slowing and that all that capital is chasing a shrinking pool of profitable investments. Although that explanation could apply to the US and other rich countries, it makes less sense in a global context. World economic growth has held steady at about 3% since the 1970s.
Del Negro et al. crunch the numbers and find that growth isn’t a major reason for falling real interest rates. Instead, they cite an increasing desire for safety and liquidity. But this doesn’t mean investors are abandoning riskier investments; corporate borrowing spreads, apart from recessions, have remained roughly constant since the 1970s.
It’s not just governments that are finding it easier to borrow money; it’s corporations, too. The flood of investment dollars into high-profile projects with low expected returns, such as WeWork, is a sign of the times.
There are many potential reasons for capital abundance, including the rise of China, changes in the global population structure, the increase in wealth inequality, the increased ease of investing online and so on. But capital abundance also changes the way elected officials, central bankers and economists should think about policy.
A number of government policies are designed to spur investment in financial assets. Capital gains and dividends are taxed at a lower rate than ordinary income to encourage investment in stocks and bonds. One argument against wealth taxes and estate taxes is that they deter people from saving. But in a world of capital abundance these fears seem overblown. Why is it necessary to lure more dollars into the markets when people are already throwing their money at governments and companies alike?
There are implications for macroeconomic policy as well. Traditionally, the argument against government deficits is based on the idea of “crowding out.” More government borrowing, the idea goes, sucks up investment dollars that would otherwise be used to fund more productive private enterprises, starving businesses of financing. But with interest rates so low, this fear seems remote and overblown. Olivier Blanchard, former chief economist of the International Monetary Fund, estimates that low interest rates mean that the US could increase its ratio of debt-to-gross domestic product by 60 percentage points (from 104% today) without adverse consequences. Of course, the government money would have to be put to some useful purpose, although even borrowing to redistribute might make sense.
Higher government deficits might even help monetary policy do its job. If government borrowing did manage to raise interest rates from near zero, it would give central banks more space to stabilize the economy by cutting rates if a recession hits.
Governments might shy away from raising taxes on capital and wealth and borrow more out of fear of harming business investment (which is a very different thing than financial investment). A drop in capital spending would then hurt wages and reduce long-term living standards. But the fact of low interest rates means that if businesses aren’t investing, it’s not because of a lack of capital in the system; it’s because capital is being showered on some borrowers while selectively being withheld from other businesses that could put it to better use. Financial regulation that encourages lending to companies with high employment growth might therefore be a better tool for boosting investment than efforts to keep interest rates at historic lows.
So there’s a danger that governments will apply old solutions designed for the era of capital scarcity to today’s age of abundance. But there’s also the possibility that a shift to new approaches could go too far. Even as governments take advantage of capital abundance by increasing taxes and deficits, they must monitor conditions carefully should capital scarcity return.
BLOOMBERG OPINION
Hog raisers still positive due to limited size of ASF cull
By Vincent Mariel P. Galang
Reporter
THE hog industry remains positive about its prospects this year, noting that the number of animals culled in the wake of the African Swine Fever (ASF) outbreak remains small, while prices are also expected to rise, prompting growers to increase production.
“Sabi ko naman (production will rise) this year compared last year… kasi yung na-cull lang 0.5%, so maliit lang yun sa total (We expect production to rise since the cull accounts for only 0.5% of the total swine population),” Samahang Industriya ng Agrikultura (SINAG) Chairman Rosendo O. So said in a phone interview. SINAG is a group of agriculture industry stakeholders including hog raisers.
According to the Philippine Statistics Authority (PSA) the swine herd as of July 1 was 12.7 million head, down 0.6% year-on-year. Since the emergence of ASF on Luzon in July, the hog cull has resulted in the destruction of 70,000 animals.
The hog industry accounted for agriculture output by value of 15.74% of the national total, equivalent to P27.735 billion in the third quarter, according to the PSA.
The industry typically accounts for just under 16% of production value in each of the third quarters of 2018 and 2017.
Hog production grew 1.96% to 551,620 metric tons (MT) during the third quarter of 2019.
Bureau of Animal Industry (BAI) Director Ronnie D. Domingo said the industry has room to grow given the limited cull.
“Some may have stopped producing pigs, but many are sustaining if not increasing their production and preparing for the golden period when the pork prices start to increase. Some parts of Luzon especially those affected by ASF lowered their levels of production. This might be neutralized by the guarded increase in Visayas and Mindanao anticipating the supply vacuum left by Luzon pork suppliers,” he said.
According to PSA data, average the farmgate price of hogs in the third quarter was P103.66 per kilo, down 10% year-on-year.
The United Nations Food and Agriculture Organization (FAO) said in its Food Outlook report that the Philippines will be producing 1.963 million tons of pork in 2019, up 4%, while imports will total 149,000 tons, down 8%, and exports will total 2,000 tons, little changed from a year earlier. Pork consumption is estimated at 2.11 million tons, up 3%.
Rolando T. Dy, executive director of Center for Food and Agri-Business of University of Asia and the Pacific (UA&P), said he projects industry growth to slow by the end of the year, but all will still depend on how the outbreak is managed.
“The fourth quarter growth could be lower, but it will depend on how ASF pans out. Pork demand appears to be dented by misguided consumer perceptions regarding ASF,” he said in a text message.
Next year, Mr. So said it would be difficult to forecast performance, and supported local government bans on the movement of pork products until a better quarantine system is put in place.
Mr. Dy added that lower demand for pork due to ASF “could bring 2020 growth (of) near one percent,” as consumers shift to consumption of chicken.
TRO-exempt Build, Build, Build projects raise constitutional doubts
A BILL that would insulate flagship infrastructure projects from temporary restraining orders (TROs) issued by most courts has raised questions about the emergency powers that will trigger the proposed TRO exemption, legal experts and opposition politicians said.
Lawyer and Ateneo Policy Center research fellow Michael Henry Ll. Yusingco said House Bill 5456, which will become the Flagship Emergency Act of 2019 if passed, could contain provisions that violate the 1987 Constitution.
“The first problem of the bill is that the emergency powers of the President under the Constitution can only be exercised when there is a national emergency,” he said in an e-mail Thursday.
“What is the national emergency? I think this matter has not been established as a fact yet. So there is still no justification for the exercise of the President’s emergency powers.”
He added that the provision could also be seen as a “diminution” of the powers of the Supreme Court to establish the rules of procedure for the lower courts it supervises, which may also be unconstitutional.
HB 5456, filed by Representative Jose Ma. Clemente S. Salceda of Albay’s second district, proposes to grant the President special powers that allow his infrastructure projects to not be hindered by TROs from most courts.
The bill proposes to empower the President to “urgently utilize necessary government resources, exercise police power, and employ executive actions and measures,” to implement projects.
Mr. Salceda, who is the chamber’s Ways and Means Committee chairman, said in the explanatory note that the completion of key government projects, known as “Build, Build, Build” (BBB) in this administration, will complement economic and social legislation in Congress.
Senate Minority Leader Franklin M. Drilon, who questioned the slow progress of “Build, Build, Build” earlier this week, said the real issue is government agencies’ ineffective spending, and not the need for emergency powers.
“Kung nangangailangan ka ng 2,000 engineers sa DPWH (Department of Public Works and Highways), hindi kailangan ang emergency powers… to make sure that you spend the money allotted on time (If the DPWH needs 2,000 engineers, emergency powers are not needed and will not cause that department to spend the money allotted on time)” he told reporters in a briefing Thursday.
Mr. Drilon called “Build, Build, Build” a “dismal failure” earlier this week, claiming that the government has only started building nine of 75 flagship projects. The government has since revised its list of projects to 100, including those initiated by the private sector.
Section 11 of the bill prevents the courts, except the Supreme Court, from TROs or preliminary injunctions that would restrain project implementation.
The measure designates the chairman of the Bases Conversion Development Authority as the Flagship Program Manager to oversee the management and implementation of the program. The Flagship Program Manager is authorized to engage in direct contracting and direct negotiation of contracts.
The President’s spokesperson Salvador S. Panelo responded positively to the bill, saying that a common hurdle to the timely implementation of key projects is the need to acquire right of way.
“Sa tingin ko maganda yan yung kay (I think that is a good proposal of) Congressman Salceda because one of the reasons why bumabagal ang projects (projects are slow) is because of the right of way. Yung ibang owners kasi ayaw pumayag, yung iba nag-TRO (Some landowners don’t grant it while others file for TROs),” he said in a briefing Thursday.
Mr. Panelo’s statement comes after Albay Second District Representative Joey S. Salceda filed House Bill 5456 on Wednesday, which grants the President “special powers” in order to create policies and reorganize his office to implement the BBB better.
On Wednesday, Presidential Adviser for Flagship Projects Vivencio B. Dizon said that the government is not satisfied with the infrastructure program but clarified that 35 projects are currently under construction, contrary to Mr. Drilon’s count of nine, not including other projects that have been completed.
The program involves government spending on construction equivalent to 5.5% of GDP last year.
The total cost of the infrastructure program is P8.2 trillion. — Gillian M. Cortez and Charmaine A. Tadalan
Senate sees tough going for ‘ambitious’ FIA amendment
THE Senate will discuss a “more ambitious” amendment to the Foreign Investment Act (FIA) after the budget is approved, Economic Affairs committee chair and Senator Ma. Imelda Josefa R. Marcos said.
“I don’t see any easy sailing for the Foreign Investments Act,” Ms. Marcos told reporters in a briefing Thursday.
“It’s inevitably, extremely controversial but there’s no doubt that we need to start with a new investment act.”
The proposed amendment of Republic Act No. 7042, or the FIA of 1991, will make the Philippines less restrictive to foreign investment, and has been named a top priority of the economic development cluster for the first regular session of the 18th Congress, which closes on June 5 next year.
It is also included in the list of bills, supported by 14 local and foreign business groups, which was submitted to the Office of the President and the two chambers of Congress at the session opening.
“I think immediately after the budget, after all the foreign investment act is one of the priority measures of the administration,” she said when asked when the debates will be held.
“It’s already been passed on third reading in the House but they have much simplier version. I believe ours is a little more ambitious.”
The bill among others proposed to create the Investment Promotions Council, to be led by the Trade Secretary, to integrate efforts to attract foreign investment.
It also lowered the minimum employment requirement to 15 from 50 direct local hires for small- and medium-sized domestic enterprises with paid-in capital of at least $100,000. The provision is also present in the House version.
The bill also introduces new penalties ranging from P1 million to 20 million in fines and imprisonment of 6 to 30 years for graft and corrupt practices.
The House of Representatives, in its counterpart House Bill No. 300, excludes the “practice of profession” from the coverage of the Foreign Investment Negative List (FINL). The bill passed on final reading on Sept. 9.
The measure nearly made it out of the 17th Congress after securing third-reading approval in the House in January, but failed to make it out of the Senate before the June 3 adjournment. — Charmaine A. Tadalan
PECO digs in, won’t sell distribution assets to new franchise holder MORE
PANAY ELECTRIC CO., INC. (PECO) is not interested in selling its power distribution assets in Iloilo City to the area’s new utility, a company official said on Thursday, citing unresolved legal issues between the two parties and the need for rules on takeovers.
“We’re not interested in selling our assets to MORE [Electric and Power Corp.],” Marcelo U. Cacho, PECO head of public engagement and government affairs, said in a briefing Thursday at the office of Divina Law, the company’s legal counsel, in Makati City.
He made the statement when asked if there is a chance for PECO and MORE to settle their dispute.
PECO previously held the franchise to distribute power in Iloilo City, which it held for 95 years. MORE now holds the franchise, awarded by Congress early this year.
“What is happening right now between PECO and MORE does not just concern Iloilo City or the people of Iloilo,” he said.
Mr. Cacho said the way the expropriation of the assets was written under MORE’s franchise could affect every power distribution utility in the country “be it Meralco (Manila Electric Co.), be it PECO, be it all the cooperatives.”
“This can impact every cooperative because now it could create an opening for the takeover of every single cooperative by big businessmen that may or may not have the interest of the people in mind. So that’s really one of the biggest issues,” he said.
“There should be a proper mechanism that will be put in place to first study whether a utility should be taken over,” he added. “In the case of PECO versus MORE there was no such assessment made.”
Mr. Cacho also addressed the recent blackouts across Panay Island and the near-simultaneous electric pole fires in the city, which he said were beyond the control of PECO.
“Now, consumers of Iloilo are asking if this is sabotage to mask the reality that the new power distribution franchise holder is not capable of serving Iloilo because they have no distribution infrastructure in place at all,” he said.
He noted that MORE has tried to portray PECO in a bad light following these incidents.
“On the legal front, we have taken legal action against MORE. We have already, in fact, secured a judgment from the Regional Trial Court (RTC) of Mandaluyong declaring unconstitutional the expropriation that MORE is trying to implement against PECO,” lawyer Estrella C. Elamparo of Divina Law said.
“This judgment contains a permanent injunction prohibiting MORE from taking over the assets of PECO. They have now appealed that judgment in our favor to the Supreme Court. And they have in fact asked the Supreme Court for a temporary restraining order (TRO) to restrain the implementation of that permanent injunction and they have failed. The Supreme Court has already denied their prayer for a TRO,” she said.
“So the battle goes on, but so far the latest decision of not just the RTC Mandaluyong and the latest resolution of the Supreme Court have favored us,” she added. — Victor V. Saulon
Lazada reports record number of sellers topping P1M on Nov. 11
E-COMMERCE retailer Lazada Philippines said 1,141 of its sellers reported sales of at least P1 million on Nov. 11, the so-called “Singles’ Day” shopping holiday originating in China.
“By the end of the day, the Lazada Millionaires Club, where sellers past the P1 Million sale mark earn membership, rose to a new total of 1,141 sellers,” Lazada said in a statement Thursday.
In a phone message, Lazada Philippines said: “The Lazada Group set a new record with of over 3 million orders within the first hour across six markets in Southeast Asia — the Philippines, Singapore, Vietnam, Indonesia, Malaysia and Thailand. The Lazada group also hit more than double year-on-year growth in three areas — sellers, buyers and orders.”
Lazada Philippines also said that during the first hour of Singles’ Day 2019, one million Filipinos joined and one million items were immediately sold.
Singles Day, known in Chinese as Guanggun Jie, is meant to celebrate single people and relationships because of the number of times the numeral “1” appears in the Nov. 11 date, or 11/11. It has become the largest single shopping day in the world.
Lazada said Filipino shoppers collected up P170 million worth of vouchers for Singles’ Day.
“Big discounts were used by shoppers across categories, on top of the price mark-offs that reached as high as 95%,” it added.
Top performing brands during the Singles’ Day, according to Lazada, were Xiaomi, RealMe, and Huawei for Mobile; CooCaa, Philips, and TCL under Home Appliance; Pampers, Huggies, MamyPoko under Mother & Baby; Hydro Flask, Klean Kanteen, Mitsushi under General Merchandise; Maybelline, L’Oreal Paris, Olay for Health and Beauty; and American Tourister, Adidas, and FitFlop under Fashion.
Lazada Philippines Chief Executive Officer Raymond N. Alimurung said: “The support of customers to this year’s sale affirm 11/11’s crucial role in driving growth for eCommerce in the country.”
“Lazada is proud to be the pioneer of this Shopping Festival in Southeast Asia and look forward to setting new records with our partner brands and sellers in the upcoming mega campaigns we will have locally,” he added. — Arjay L. Balinbin
PHL to highlight coconut products at German fair
PHILIPPINE food manufacturers will head to Germany’s organic trade fair BioFach to promote their coconut products, the Department of Trade and Industry’s Center for International Trade Expositions and Missions (CITEM) said in a statement Thursday.
The Philippines is the second-largest coconut producer, and is the number one supplier of coconut oil to Germany. More than half of Philippine export revenue from Germany in 2017 was generated by coconut oil.
Nine Philippine companies will exhibit at BioFach, the world’s largest trade fair for organic food and agriculture, on Feb. 12-15. The trade fair welcomed 51,500 visitors and buyers in 2019, with 3,273 exhibitors from 98 countries.
“We are kicking off our 2020 export promotion activities for the food industry with a comeback to the world’s leading platform for organic food in line with DTI’s renewed thrust in elevating the country’s globally competitive food products from the organic, healthy and natural segment,” DTI Undersecretary Abdulgani M. Macatoman said in the statement.
CITEM Executive Director Pauline Suaco-Juan said the Philippines first joined the BioFach trade fair through CITEM in 1996, which resulted in initial orders of coconut oil-based herbal soap. Exhibitors from the Philippines came again in 1999, generating $80,000 in initial orders, mostly for banana chips.
Six of the Philippine companies attending the trade fair next year are coconut producers or manufacturers.
The companies will be showcasing virgin coconut oil (VCO), medium chain triglycerides (MCTs) oil, coconut water, coconut sap, vinegar and vinaigrette, coco syrup, sugar and flour, desiccated coconut, coconut cream and coco crisps. The Philippine pavilion will also featured banana chips, cacao chips and muscovado sugar.
The companies participating are AG Pacific Nutriceuticals Corp., Brandexports Philippines, Inc., Cardinal Agri Products, Inc., CJ Uniworld Corp., Filipinas Organic Coconut Product Corp., Lao Integrated Farms, Inc., See’s International Food Manufacturing Corp., Raw Brown Sugar Milling Co., Inc. and Tongsan Industrial Development Corp.
According to the Philippine Statistics Authority, export sales of coconut oil totaled $706 million in the first nine months of 2019, down 11.7% from a year earlier.
Desiccated coconut exports fell 30.8% to $182 million, while other coconut product exports fell 18.8% to $36 million.
The Philippines in October signed a memorandum of understanding with other members of the Association of Southeast Asian Nations (ASEAN), agreeing to specialize in seaweed and coconut product exports to international markets. — Jenina P. Ibañez