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How PSEi member stocks performed — October 22, 2019

Here’s a quick glance at how PSEi stocks fared on Tuesday, October 22, 2019.

 

Russia proposes small arms manufacturing venture in PHL

RUSSIA is proposing weapons manufacturing in the Philippines for the export market, Russian Ambassador to the Philippines Igor Khovaev said in a briefing Tuesday.

The items proposed for manufacture here are small arms and other light weapons.

“We have a very good proposal for you Filipinos. We are ready to optimize a joint production of Russian sophisticated Russian light arms… here in the Philippines,” he said.

“They will be Philippine products based on Russian technology. The Philippines will then be an exporter of advanced small arms and light weapons.”

Mr. Khovaev said Russia will be working with the Philippine government and business partners in exploring the possibility of a manufacturing partnership.

“Both sides are committed to open up new horizons in defense cooperation, and one of these horizons is the joint manufacturing of weapons here on Philippine soil. So now both sides are exploring specific opportunities.”

Meanwhile, Mr. Khovaev reiterated that Russia is “ready” to supply weapons to the Philippines with “no political conditionality” to the deal.

He said that Russia wants to help the Philippines develop its own defense industry in the process of building a long-term strategic cooperation between the countries.

During his visit to Russia in early October, President Rodrigo R. Duterte signed a memorandum of intent on the possible construction of nuclear power plants in the Philippines.

“Russia is a nuclear superpower. We have the most sophisticated technologies in this field. And we are ready to help the Philippines in developing your nuclear industry, provided that our Philippine partners want that,” Mr. Khovaev said. — Jenina P. Ibañez

Rice farmers see ample supply even with safeguard measures

RICE FARMERS said the market will be well-supplied with the staple even if the government proceeds with safeguard duties that discourage further imports, though they did not say how prices will be affected.

“There will be no shortage of rice even if imports are temporarily stopped by the safeguard duties. We have more than enough rice, and the main harvest season has not yet ended,” Federation of Free Farmers National Manager Raul Q. Montemayor said in a statement.

He said that domestic supply is currently sufficient without imports.

The Philippine Statistics Authority (PSA) estimates that rice inventory in September was 57.9% higher year-on-year.

Rice imports are also estimated to have totaled 2.4 million metric tons (MMT) between March, when imports were liberalized, and August, well above the 7% import requirement needed to fill the domestic production gap, equivalent to 1.5 MMT to 2 MMT.

“In the meantime, palay prices continue to drop because of the glut in the market. The only way to remove this glut is to temporarily stop imports through the safeguard duties. Once the supply situation stabilizes, the government can easily remove or reduce the safeguard duties,” he said.

The DA terminated its investigation prior to the imposition of safeguard measures, citing the need to keep inflation in check. The government’s economic team has said that safeguard duties could raise inflation by 20 basis points to 1.2%.

The FFF called the termination of the safeguard measures process as a “policy walk back” because such measures are warranted by the Safeguard Measures Act.

Safeguard measures are warranted if the government can demonstrate that domestic industries suffer serious injury to unfair competition from imports.

“The use of safeguards is a policy option specifically mentioned in RA (Republic Act) 11203 (the Rice Tariffication Law) and prescribed under RA 8800 (the Safeguard Measures Act). It is based on the rules of the World Trade Organization, of which the Philippines is a founding member,” Mr. Montemayor said.

“[It was] designed precisely to help countries cope with market emergencies brought about by trade liberalization. Not availing of these remedies, even when these are urgently needed, is the real ‘policy walk back’,” he said. — Vincent Mariel P. Galang

Rice tariffs top P15 billion, exceed RCEF requirement

THE Department of Finance (DoF) said rice import tariffs have totaled P15 billion, ensuring a surplus after the Rice Competitiveness Enhancement Fund (RCEF) is provided P10 billion by law, which the government could deploy for aid to farmers.

The import tariff estimate was contained in a speech by Bangko Sentral ng Pilipinas (BSP) Monetary Board Member Bruce J. Tolentino.

“It’s already five billion pesos over and well above the P10 billion that’s supposed to be allocated for RCEF. The Cabinet is discussing now whether or not to use the extra (funds) for grants to those farmers who are badly affected by a change in the economic picture,” he said.

With the rice prices falling due to the Rice Tariffication Law and oil prices stable, Mr. Tolentino said that he sees inflation in October to be little changed or even lower than the 0.9% reading for September.

The RCEF will fund high-yielding seed, farm mechanization, training, and credit to make the industry more competitive. RCEF is to receive P10 billion a year over six years from rice import tariffs.

Mr. Tolentino said in his speech, delivered at an event organized by the Bankers Institute of the Philippines in Makati, that the Rice Tariffication Law has been fulfilling its purpose with rice prices falling and restructuring the rice industry.

“We have been paying two to three times (compared to) the world market for rice. And it’s not only recently, it’s been (that way) since the pre-war years. For example, right before the reforms in March, you could get rice in Thailand to the consumer for (the equivalent of) P22. The average price of that time for rice in the Philippines was double to triple that,” he said, noting that milled rice prices are currently six to seven pesos lower than levels before the law was implemented.

Prices, he said, are expected to fall further, bringing them in line with consumer prices in Vietnam and Thailand.

He said inflation has been well within the BSP target of 3% plus or minus 1%, as the price of rice, which is a major part of the food basket, continues to fall.

Towards the close of 2019, Mr. Tolentino is confident that inflation will continue to trend lower.

“(Inflation could go lower… purely from base effects. If you look at the rice prices they are still falling and oil is not going up,” Mr. Tolentino told reporters on the sidelines of the event.

BSP estimates that inflation will be at 2.9% for 2019 and 2020.

September inflation fell to a three-year low of 0.9%, according to the Philippine Statistics Authority. — Luz Wendy T. Noble

Laguna section of CALAX due to open at end of October

THE Department of Public Works and Highways (DPWH) said Tuesday it will open on Oct. 30 the first 7.4-kilometer (km) of the Laguna segment of the Cavite-Laguna Expressway (CALAX).

“Oct. 30, before Undas (All Saints’ Day), we can expect this to be passable,” Public Works Secretary Mark A. Villar told reporters, referring to the Subsections 6, 7, and 8 of the Laguna segment of the 45.3-kilometer CALAX project.

The entire length of CALAX project will connect the Manila-Cavite Expressway (CAVITEx) from Kawit, Cavite to the South Luzon Expressway (SLEx) at the Mamplasan Interchange in Biñan, Laguna.

The DPWH and the project’s concessionaire MPCALA Holdings, Inc. conducted a final inspection of the subsections of the Laguna segment Tuesday, which covered the Mamplasan Barrier onto Laguna Technopark Interchange, Laguna Boulevard Interchange all the way to Santa Rosa-Tagaytay Interchange.

“The project is 90% completed. The remaining 10% are portions of the expressway that need to be harmonized. We are fast-tracking those portions,” Mr. Villar was quoted as saying a statement.

He added that the DPWH will ensure that CALAX “will be passable and ready to serve motorists this October 30, in time for Undas.”

“We will open the entry and exit points at Mamplasan, Biñan and the Sta-Rosa Tagaytay Road. It’s a long weekend and apart from paying respects to the dearly departed, I’m sure a lot of families would want to take advantage of this time to do some bonding in Tagaytay, Batangas and Manila,” he explained.

Mr. Villar said around 10,000 cars are expected to enter and exit through these subsections, which will take about 10 minutes to drive.

The DPWH said with the completion of these subsections, travel time will fall significantly from the 45 minutes it currently takes to travel from Mamplasan to the Sta. Rosa-Tagaytay road.

“In order to decongest Sta. Rosa-Tagaytay Road, Governor’s drive, Aguinaldo Highway, it is imperative to deliver the total 45-kilometer length of CALAX by June 2022. Once completed it will only take about 45 minutes to an hour to drive from Mamplasan to Kawit, Cavite and will serve about 50,000 vehicles.” Mr. Villar was also quoted as saying.

MPCALA Holdings is controlled by Metro Pacific Tollways Corp., the tollways unit of Metro Pacific Investments Corp. (MPIC). MPIC is one of three key Philippine units of Hong-Kong based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

Debt service bill falls over 73% in Aug.

THE government’s debt service bill fell by more than 73% in August, the Bureau of the Treasury (BTr) said.

According to Treasury data, total debt payments declined 73.42% year-on-year to P31.58 billion. The August total was also much lower than the P92.46 billion worth of payments made in July.

Interest payments accounted for 62.1% of total payments, or P19.61 billion, down 30.71% from a year earlier.

Some 53.39% of interest payments or P10.47 billion went to foreign creditors.

Amortization fell 86.78% year-on-year to P11.97 billion in August.

Amortization on domestic debt was P8.783 billion, of which P8.679 billion was accounted for by the Treasury’s Bond Sinking Fund, while the remaining P3.187 billion went to foreign lenders.

The government borrows from both domestic and foreign lenders to pay for public projects and programs not covered by its ability to generate revenue.

In the eight months to August, the government made P509.295 billion in debt payments, accounting for 57.36% of the total P887.91 billion debt service program for 2019, based on the Budget of Expenditures and Sources of Financing (BESF) report.

Some P258.65 billion went to amortization while P250.65 billion was paid to settle interest payments. — Beatrice M. Laforga

Employers more willing to hire at senior high level

AROUND 19,000 jobs will be made available to senior high school graduates by the Philippine Business for Education’s (PBEd) youth employment program, reflecting growing confidence in hiring students with such credentials.

In a statement on Tuesday, PBEd announced “Over 19,000 entry-level jobs and 400 work immersion positions for senior high school graduates and students recently opened through ‘First Future’.”

“First Future” aims to provide training and employment opportunities to senior high school students and graduates by private-sector partners from various industries. The initiative is funded by the Citi Foundation as part of its Pathways to Progress initiative launched in December.

PBEd’s Second Job Outlook Survey of 80 companies across 20 industries in 2019 found that three out of five companies are open to hiring senior high school graduates while three out of five are also ready to hire them. This is higher than the result of the first Job Outlook Survey in 2017, which found that only one out of five companies were ready to hire K-12 graduates.

PBEd Chairman Ramon R. del Rosario, Jr. said he is positive more employers are starting to show confidence in K-12 graduates for entry-level jobs.

“We are pleased to announce that over the past year, we are now seeing more openness in what once was a hesitant environment, as more companies are choosing to hire based on competencies rather than credentials,” he said in a statement Tuesday.

Some of these jobs were offered in past caravans under First Future held in Manila and Cebu. Based on the 2,300 students who participated in both events, 35% were considered hireable while 52% were qualified for another round of interviews. — Gillian M. Cortez

Energy regulator rejects motion to reconsider NGCP listing ruling

THE Energy Regulatory Commission (ERC) has denied an appeal by two energy agencies to reconsider an earlier ERC rejection of their motion to intervene in the petition of privately owned National Grid Corp. of the Philippines (NGCP) to extend the period for its public listing.

In an order promulgated on Oct. 17, the ERC said a “careful scrutiny” of the allegations presented by the National Transmission Corp. (TransCo) and the Power Sector Assets and Liabilities Management Corp. (PSALM) in their motion for reconsideration “appeared that the same are rehashed arguments already raised” in various pleadings.

“To begin with, [TransCo and PSALM] maintained their position that they possess direct and substantial interest in the instant Petition. They reiterated that being the owners of the transmission system under Republic Act No. 9136 entitled ‘Electric Power Industry Reform Act of 2001’ (EPIRA), they have legal standing as intervenors in the instant Petition,” the ERC said.

“The Commission already addressed the said matter in its Order dated 25 June 2019. As mentioned by the Commission, a mere invocation of the EPIRA, which created [TransCo and PSALM], does not automatically vest them the right to intervene in the instant proceeding, absent any clear legal standing as required by the rules of the Commission,” it added.

The ERC said the two failed to show that they have direct and substantial interest in the proceedings and the outcome. It said the entirety of the petition for intervention and all other pleadings filed in relation to the case were “bereft of any allegations showing clear legal standing.”

NGCP started operations on Jan. 15, 2009 in accordance with RA 9511, the law that granted the company a franchise to engage in the business of conveying or transmitting electricity through a high-voltage backbone system of interconnected transmission lines, substations and related facilities.

Under the law, NGCP is required to list and make a public offering of its shares representing at least 20% of its outstanding capital stock or a higher percentage that may be provided by law within 10 years from the start of its operations, or until Jan. 14, 2019.

NGCP was granted the concession to operate TransCo’s transmission system and the grid by virtue of the concession agreement dated Feb. 28, 2008 with PSALM and TransCo.

On Nov. 13, 2018, NGCP sought the ERC’s approval of its proposed extension of the period for listing of its shares of stock. It cited as grounds the pending arbitration case filed before the Singapore International Arbitration Centre against PSALM and TransCo on their concession agreement, among others.

NGCP also said its delayed regulatory reset as a valid ground for the deferred listing. It said the listing requirement under Section 8 of RA 9511 “is merely directory.” The company cited the absence of implementing rules and regulations for compliance with Section 8, and that the timing of public offering is left to the discretion of NGCP’s board of directors.

On Dec. 21, 2018, TransCo questioned the authority and jurisdiction of the ERC over NGCP’s petition, saying that RA No. 9511 has no provision granting the same to the regulator.

On Feb. 15, TransCo and PSALM said they were participating in the proceedings by way of special appearance only, and sought the immediate dismissal of NGCP’s petition for the reason that the ERC has no jurisdiction to hear and decide the case.

On June 25, the commission denied TransCo and PSALM’s petition to intervene. They filed a motion for reconsideration on Aug. 22, and an urgent motion to resolve the same on Sept. 28.

In its denial of the motion for reconsideration, the ERC said a personal and substantial interest means that a party will stand to be affected by the act or decree being challenged.

In this case, it said TransCo and PSALM did not present any proof that they will suffer injury as a result of NGCP’s observance or non-observance of its franchise law.

The commission said it is undisputed that NGCP was granted the concession to operate and maintain the nationwide transmission system. The grant was categorically embodied in the concession agreement between NGCP and TransCo/PSALM.

However, the concession agreement was focused on the grant of authority to NGCP to maintain and operate the transmission facility and other related covenants, it said.

The concession agreement contains no provision that authorizes either TransCo or PSALM to ensure that NGCP complies with its franchise law, particularly its public listing obligation, the ERC said. — Victor V. Saulon

Protesters are united by something other than politics

By Tyler Cowen

THE WORLD increasingly finds itself under protest. As 2019 enters its final quarter, there have been large and often violent demonstrations in Lebanon, Chile, Spain, Haiti, Iraq, Sudan, Russia, Egypt, Uganda, Indonesia, Ukraine, Peru, Hong Kong, Zimbabwe, Colombia, France, Turkey, Venezuela, the Netherlands, Ethiopia, Brazil, Malawi, Algeria and Ecuador, among other places.

What gives? One possibility is that all of this is a random coincidence. Another is that news of such protests is now much more widely dispersed, and so they seem more widespread. But it is also worth considering what cause or causes these protests might share — and, more important, the means they have to spread their concern.

One frequent theme is people objecting to a price increase. In Ecuador, a focal point of the protests has been a demand for restoration of fuel subsidies. Petroleum price subsidies also have been central to the Haitian protests. In Lebanon, citizens have been upset at a new tax levied on the use of WhatsApp, with a social media tax also having been an issue in Uganda. In Sudan cuts to food and fuel subsidies have been a major complaint. In Chile they are protesting subway fare hikes.

The trend is that price increases may continue to become less popular. And, crucially, the internet will help people organize against such changes.

Consider that an old-style labor-oriented protest can be organized through the workplace or plant itself, through on-the-ground techniques that long predate the internet. There is a common locale and set of social networks in place, including perhaps a union. Those who suffer from a price increase, in contrast, typically do not know each other or have common social ties. Just about everyone buys gasoline, either directly or indirectly. The internet, however, makes it possible to mobilize these people into protests with prices as the common theme.

In other words: Protests of workers seem to be becoming less important, and protests of consumers are becoming more important.

You may recall that one of the original demands of the gilets jaunes (yellow vests) protests in France was for free parking in Disneyland Paris. If you think that sounds a little crazy, you haven’t yet internalized the nature of the new millennium.

In the future, efficiency-enhancing or austerity-induced changes in prices may be much harder to accomplish politically. The new trend is neither central planning nor market liberal reforms, but rather frozen prices, especially when those prices are set in the political realm.

One lesson is that fighting climate change will be harder. Fossil-fuel subsidies are broadly popular, citizens do not seem exceedingly willing to take on economic sacrifices these days, and in most poorer countries climate change is not a major concern. The demonstrations mobilized by Greta Thunberg were mostly in wealthier countries, but future carbon emissions will come increasingly from emerging economies. Even in the Netherlands, hardly a right-wing country, farmers are protesting for the right to continue their nitrogen emissions.

Another lesson is that effective redistribution may well become harder. Economists tend to see simple monetary transfers as the most effective means of redistributing wealth, whereas keeping prices low tends over time to lead to shortages and lower quality. Protests are not an especially salutary form of egalitarian pressure, so the underlying problems are unlikely to improve very much, which in turn could worsen the political pressures.

Consumer protests organized by the internet are also less likely to be ideological in the traditional left-vs.-right sense. People of widely varying political views, including people who do not have much of a view at all, can get upset by high prices. The internet may also be encouraging a “least common denominator” appeal to generate the largest protests possible. The point is that anyone expecting these protests to bring about their preferred set of policy changes is bound to be disappointed.

In particular, I would caution against interpreting the protests as within the American progressive framework of fighting inequality. While economic privation is a major theme, neither the absolute level of privation nor the degree of inequality seems to explain much. Haiti, the poorest country in the hemisphere and with some of the most dysfunctional politics, is seeing protests because the economic situation is so bad. In Chile, meanwhile, the wealthiest country in Latin America and with falling inequality, the demonstrations may be more a matter of high or rising expectations.

One thing is for sure: With mass protests, as with so much else, the internet is changing everything.

 

BLOOMBERG OPINION

Are we ready for stablecoins?

Financial inclusion has become a global challenge. In a recent International Monetary Fund (IMF) report, about 1.7 billion adults around the world remain unbanked which simply means that they are still without an account in a financial institution. China has the greatest number of these unbanked individuals, followed by India and then Pakistan.

The Bangko Sentral ng Pilipinas (BSP) estimates 77% of Filipinos are unbanked, which puts into perspective the challenge of expanding access to the advantages and opportunities of financial services to these millions of productive citizens. But the fact that almost all Filipinos have mobile phones, has prompted the BSP and banks to look to technology as a solution.

So many cryptocurrencies are jockeying to be next global currency. Among them is “stablecoin,” a term most of us are not familiar but has gotten the serious attention of the IMF which created a G7 working group to explore the implications and repercussions of stablecoins on economies around the world.

In its recently released report, it said, “Cross-border payments, however, remain slow, expensive and opaque, especially for retail payments such as remittances… Recent stablecoin initiatives have highlighted these shortcomings and emphasized the importance of improving the access to financial services and cross-border retail payments.”

Stablecoins and digital currencies which are built on Blockchain Systems are technological advancements which aim to revolutionize the financial sector but, more importantly, are created to solve the inefficiencies of the current system which resulted in billions of unbanked individuals for quite some time now.

Central to all these is the fact that the technology will allow the unbanked to have equal access to financial services. Digital currencies allow for instantaneous transactions or “borderless” transfer of ownership. Stablecoins were designed to provide that stability and minimize the volatility of the price experienced with other digital currencies, while Blockchain remains to be the incorruptible list of records or digital ledger containing transactions for digital currencies.

Funds transferred among banks and other institutions to discharge payment obligations arising from financial transactions across the entire economy brings efficiency and security while reducing cost is achieved in the Blockchain System.

The G7 stablecoin working group, led by Benoit Coure (a European Central Bank board member), released policy recommendations for stablecoin projects. Accordingly, a viable framework for these new technologies can exist with multi-stakeholder and cross-border cooperation.

The report said, “Linking stablecoin value to a pool of assets (such as fiat currency) might be more capable of serving as a means of payment and store of value, and they could potentially contribute to the development of global payment arrangements that are faster, cheaper and more inclusive than present arrangements but, being an emerging technology are still largely untested.”

This becomes relevant to the volume of personal remittances from Filipinos abroad which continues to be a dominant driver of the Philippine economy. The BSP has reported a 4.1% increase in the first five months of 2019 reaching $13.7 billion. This big market clicking on to mobile apps for remittance transactions becomes a real potential that needs to be assessed with caution.

The G7 Working Group further recommends that finance ministries, central banks, international organizations, standard setters, and other public authorities maintain the high level of international coordination and collaboration needed for cross-border policies and regulatory regimes that apply to stablecoins.

Digital currencies must provide a very high level of confidence in order to be “accepted” in everyday financial transactions. Security, efficiency, data protection, data privacy, financial stability, and adherence to monetary policy must be strictly observed. Like new innovations, there are risks. The IMF paper Fintech Notes, says that stablecoins can be seen as a threat to financial stability and integrity, monetary policy effectiveness, as well as competition standards. Banks may lose their position as financial intermediaries in the event that they lose deposits to stablecoin providers. Stablecoins may also be used for illegal activities like money laundering and terrorist financing.

It’s clear that stablecoin still has to weather legal, regulatory, supervisory, and operational challenges. Add to this the fact that they need to overcome the legacy of existing payment systems.

To address these concerns, the G7 report outlines a workable process guide to for government regulatory authorities and stakeholders to ensure that adoption of these new technologies are secure and will not be destructive to existing financial systems. The dominant stablecoin projects, including Libra, are supportive of this process.

At the recent ICT Innovation summit hosted by Stratbase, underlined in the discussions of participating government and industry thought leaders was the need for government and regulators to keep up with the pace of the new opportunities presented by innovative industries.

I believe that to promote innovation, we should nurture an institutional framework that attracts business and fosters growth. The government, for its part, needs to provide good governance and correct levels of protection and incentives.

As mobile technologies and more efficient connectivity become more accessible, stablecoin and other cryptocurrencies may become an alternative for the unbanked population. Regulators and financial institutions will be challenged to craft an enabling policy regime that protects the people from the risks and ensure the safe adoption of digital currencies.

 

Prof. Victor Andres “Dindo” C. Manhit is the founder and managing director of the Stratbase group and president of its policy think tank, the Albert del Rosario Institute for Strategic and International Studies (ADRi).

Boosting the Philippine economic scene through the Innovative Startup Act

According to the 2019 World Bank report, the Philippines ranks 124th out of the 190 economies in terms of ease of doing business. Meanwhile, its neighbors, namely: Malaysia, Vietnam, Singapore, Thailand and Indonesia, rank 15th, 69th, 2nd, 27th, and 73rd, respectively.

This in part shows that there is still so much more to be done to improve the Philippines’ competitiveness in terms of ease of doing business. Improvement in economic environment is needed; one that is more attractive and conducive to businesses, especially to new entrants with novel or innovative ideas that can help move and enliven the Philippine economy.

The Philippine Government is cognizant of this, and has stepped up the implementation of regulatory reforms. A welcome complement to its ongoing efforts is Republic Act No. 11337, or the Innovative Startup Act, which streamlines government and nongovernment initiatives in both local and international spheres to create new jobs and opportunities, improve production, and advance innovation and trade in the country. Aimed at encouraging the establishment and operation of innovative businesses crucial to Philippine economic growth and expansion, the law seeks to provide incentives and remove constraints for start-ups.

A start-up is any person or registered entity in the Philippines which aims to develop an innovative product, process or business model. A start-up’s innovation may be in the form of a new or significantly improved good or service, and the significant improvements may be in technical specifications, component materials, software in the product, user friendliness or other functional characteristics; or a new or significantly improved production or delivery method; or a new organizational method in business practices, workplace organization or external relations.

An interesting facet of this law is that it also takes into account start-up enablers, or persons or entities registered under the Philippine Startup Development Program that provides goods, services, or capital identified to be crucial in supporting the operation and growth of start-ups.

The Philippine Startup Development Program is composed of programs, benefits, and incentives for start-ups and start-up enablers promulgated through the respective mandates of national government agencies. This shall include those extended by nongovernment organizations in partnership with any national government agency. The lead agencies for the program are the Department of Science and Technology (DOST), Department of Trade and Industry (DTI), and the Department of Information and Communications Technology (DICT).

Host agencies are authorized to provide full or partial subsidy for the registration and cost in the application and processing of permits and certificates required for business registration, and for endorsement for the expedited processing of applicants with other government or private agencies or for the use of facilities, office space, equipment, and grants-in-aid for research, development, training, and expansion projects. To this end, the DTI is tasked to initiate and coordinate with national and local agencies involved with the registrations, licensing, and certification for start-ups and startup enablers endorsed by host agencies.

On the other hand, the Philippine Economic Zone Authority is tasked to promote the creation of Philippine Startup Ecozones to spur the growth and development of start-ups and start-up enablers.

To encourage start-up entrepreneurs from all over the world, the law also provides for the creation of start-up visas, which include the start-up owner visa, startup employee visa, and startup investor visa. The visas have an initial five year validity and may be renewed or extended with a three year validity. The application for start-up visas however requires endorsement from a host agency, on top of application requirements of the Department of Foreign Affairs (DFA). Meanwhile, multiple entry interim start-up visas valid for six months to one year shall be issued for free to prospective start-up owners, investors, or enablers upon the endorsement of the proper host agency.

Bearers of the visa shall be exempt from securing an Alien Employment Permit issued by the Department of Labor and Employment. As for qualified Filipino executives and qualified start-ups, they shall also be eligible to apply for an Asia Pacific Economic Cooperation (APEC) Business Travel Card, which allows for the streamlined entry to participating APEC economies. The DFA, DOLE, and Bureau of Immigration are tasked to promulgate the rules for the implementation of the provisions on start-up visas.

To serve as the primary source of information on statistics, events, programs, and benefits for start-ups and start-up enablers and related enterprises, the law also mandates the creation of the Startup Philippines Website. The website will show basic information on start-ups and start-up enablers, such as their business address, founders, contact information, and funding received.

For the education sector, the Department of Education, the Commission on Higher Education, and the Technical Education and Skills Development Authority are directed to develop and integrate in their curricula entrepreneurial programs that shall foster an environment conducive to innovation and extend incentives to academic institutions that provide funds and/or grants for the research of students and faculty.

With the passage of the Innovative Startup Act, businesses and would-be entrepreneurs with novel ideas will have a lot more support and incentives to look forward to. By encouraging innovative ideas through this legislation, the Philippines will not only create a more exciting environment for trade, but will also serve as a testament to its efforts to be globally competitive.

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

 

Genie Celini D. Nuevo is a Senior Associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Davao Branch.

(6382) 224-0996

gdnuevo@accralaw.com

Rogue cops: What else is new?

Remember that sick joke about how fast the cops arrived at a crime scene? Cops in other countries were said to arrive in just a few minutes. But Pinoy police were said to be at the scene of the crime at the moment it was being committed.

That’s the bad news. The worse news is that rogue cops are not unique to the Philippines. Even the so-called “ninja cops” that have been hogging the Manila headlines are unique only in terms of the cinematic nickname given them by the media. Drug-dealing policemen — specifically, cops who do a drug bust and then turn around and sell the drugs — are not a Pinoy innovation. They do it all over the world.

Remember the movie, The French Connection?

A Wikipedia entry tells about a French police officer whose business operation PNP General Oscar Albayalde would find familiar:

“François Stuber was a police captain and Deputy Head of the Drug Squad in Strasbourg, France. One of Stuber’s duties was to destroy drugs seized from operations; however between 2003 and 2007, the officer instead traded narcotics including marijuana, heroin and cocaine to an established drug network. In addition to this, Stuber also imported drugs from various other networks. The former captain had an intimate relationship with a worker from the local court, Laurence Hamon, where they would use court information to ensure his drug network associates were not under investigation. This method was also employed to avoid tracing mechanisms imposed by the Inspection Generale de la Police Nationale to detect any abuse of information. Stuber worked closely with Laurence, using her residence to store the seized drugs and her banking accounts to launder money. Stuber was jailed for the maximum term of 10 years.”

European police departments, particularly those in Eastern Europe, are notorious for rouge cops. Even Scotland Yard, with which Pinoys are familiar because of Sherlock Holmes, has not been spared. Wikipedia also posted this entry: “In the UK, an internal investigation in 2002 into the largest police force, the Metropolitan Police, Operation Tiberius found that the force was so corrupt that ‘organized criminals were able to infiltrate Scotland Yard at will’ by bribing corrupt officers… and that Britain’s biggest force experienced ‘endemic corruption’ at the time.”

The celebrated story of New York plainclothesman Frank Serpico is best remembered because of the portrayal of his crusade by Hollywood star, Al Pacino, in the movie Serpico. The cop exposed the corruption at the Brooklyn North Police precinct. He was shot during a drug bust but lived to tell his tale.

Does all of that make us feel any better? Well, only in the sense that misery loves company. Pinoy policemen are not the only scumbags. In fact, they are not the worst scumbags. Politicians and drug lords probably outrank them in the karera ng korap (corrupt race).

There’s more good news of sorts. The headlines tell us that some of the ninja cops and their bosses are actually being exposed. By politicians, no less! Talk about the pot calling the kettle black.

But that is small comfort. As I pointed out in an earlier column, corruption is as old as Adam and Eve. While well-meaning and heroic citizens must continue to expose and combat corruption — and resist being corrupted themselves — this is a scourge that is unlikely to be eliminated, no matter how hard crusaders try.

The police authorities on whom we depend for protection are as likely to be charmed by snakes and corrupted. That leaves us no choice but to regard authorities with caution and to prepare ourselves for the worst, the better to defend ourselves.

It’s pretty much like going to Rome, one of the most visited tourist places in the world. Upon arriving at the airport, you are immediately warned to beware of pickpockets (on my last visit there, I forgot the warning and lost my wallet).

Having said that, here’s something that should truly alarm us. Ninja cops are bad enough because they make President Rodrigo Duterte’s “war against drugs” a big joke. But what is worse is that the bigtime police scumbags have encouraged other rogue cops to prey on unwary and vulnerable citizens.

Remember the tanim bala (planting a bullet) epidemic that made the airports a hazardous place? Well, this Facebook post shared by my friend Divina Valencia Quesada (yes, the movie star) is even more scary:

“From an Ateneo Messenger group: On my way home today at around 8:15 p.m., as soon as I took a right turn from Star Gate towards Old Terminal, a policeman signalled me to stop.

“As I stopped, he asked me to open the trunk of the car. I opened the trunk from inside and was about to step down, but the policeman said, ‘Ok you may go.’

“I started my car and started driving, but something struck my mind, as from my rear view mirror, I saw one of the policemen immediately on his phone.

“I went a bit ahead and finding a good road light stopped my car. Switching off the engine I went and opened my car trunk.

“Guess what… I was shocked to see two small ziplock pouches with white crystals inside. I was numbed but just decided to throw it away and thanked God for saving me from such rascals who would have caught me in a drug-related case.

“The policemen must have informed their comrade standing at the next checkpoint to get hold of so-and-so car number.

“I was correct in my guess. Approximately half a mile later I was stopped by another policeman. This time too I was asked to open my trunk.

“Now I got down, went behind and opened the trunk physically. I’m sure they must have been puzzled and surprised that they did not find anything.

“Please don’t open your car trunk from the inside, for anyone, even at malls. Always step down and open the trunk with keys and permit searching under your own supervision.

“Kindly share this as much as you can, to save people.”

That warning about not leaving security guards at malls to open the trunk of cars on their own makes sense, but is too much of a hassle. Frankly, we should be thankful that the way these security guards “check” our vehicles is so perfunctory that a terrorist could bring in a load of explosives without being detected.

They could do worse. Not just tanim bala but tanim drugs!

 

Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.

gregmacabenta@hotmail.com

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