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Duterte gets tough on China, leaning back to old ally America

After years of shifting the Philippines closer to China, President Rodrigo R. Duterte appears to be leaning back toward the US.

The 75-year-old leader on Tuesday gave his most forceful defense yet of a 2016 arbitration ruling in favor of the Philippines that said Beijing’s expansive territorial claims in the South China Sea breached international law. Addressing the United Nations General Assembly, Mr. Duterte said the decision “is now part of international law, beyond compromise and beyond the reach of passing governments to dilute, diminish or abandon.”

“We firmly reject attempts to undermine it,” Mr. Duterte said, without naming China. “We welcome the increasing number of states that have come in support of the award and what it stands for—the triumph of reason over rashness, of law over disorder, of amity over ambition.”

Mr. Duterte had resisted raising the tribunal ruling after he took power in 2016, embracing closer ties with China while announcing a “separation” from the US—his country’s biggest military ally for decades. But in recent months his government has started to shift back toward America, which remains widely popular among Filipinos, as Beijing has increased assertiveness in the South China Sea and the Philippine economy suffers due to the COVID-19 pandemic.

There’s now “more space for those critical of China to be heard and to have influence,” said Malcolm Cook, visiting senior fellow at the ISEAS-Yusof Ishak Institute and coordinator of its Philippines project, adding that officials known to be more hawkish on China have stepped to the fore while Mr. Duterte has dialed back on anti-US rhetoric. “The weights on the balance of Philippine foreign policy for good relations with the US and good relations with China have shifted this year in favor of the US.”

In June, the Philippines suspended its decision to end a 22-year-old agreement that facilitates joint military exercises with the US while starting to increase criticism of China’s moves in disputed waters. Mr. Duterte this month pardoned a US marine found guilty in 2015 of killing a transgender Filipina.

This week the Philippines welcomed the US and other nations to play a role in maintaining security in the South China Sea, following a similar statement from Vietnam earlier this month. China has accused the US of intervening in territorial disputes and called it “the biggest driver of militarization of the South China Sea.”

“I can swear to you, Western powers will be in the South China Sea,” Foreign Secretary Teodoro Locsin told lawmakers in a hearing in Manila on Monday. “We believe in the balance of power, that the freedom of the Filipino people depends on the balance of power in the South China Sea.”

Philippine officials have framed the recent moves as a reflection of the country’s independent foreign policy more than siding with one particular camp. The US alliance with the Philippines is its oldest in the region, with a mutual defense treaty signed in 1951 stipulating that either nation will respond militarily in the event of an attack on the other.

Mr. Duterte “upholds the Philippine national interest and no other country’s interest,” presidential spokesperson Harry L. Roque, Jr.,  said in a text message. Earlier this month, Mr. Roque told reporters that Mr. Duterte may have pardoned the US marine to curry favor in an effort to gain access to coronavirus vaccines.

The quest to secure a vaccine shows that Mr. Duterte isn’t abandoning Beijing: He said this month he would prioritize China and Russia in sourcing a COVID-19 vaccine over Western drugmakers, which require cash advances in exchange for supplies. The Philippines has been hit with the most infections in Southeast Asia with more than 291,000 known cases, and its economy is projected to fall by as much as 6.6% this year.

DRAWN TO CHINA

Mr. Duterte is “hedging his bets more at a time when he wants to keep several options open for access to vaccine and the Philippines is coming under more pressure from China in the South China Sea,” said Peter Mumford, Southeast & South Asia practice head at risk consultancy Eurasia Group. “Duterte is ideologically more drawn to China than he is the US, but his foreign policy is also driven by political and economic pragmatism.”

Given China’s recent posturing in the disputed sea, it remains a difficult task for Mr. Duterte to convince stakeholders it doesn’t pose a national security threat to the Philippines, said Rommel Ong, retired rear admiral in the Philippine Navy and professor at Ateneo de Manila University’s school of government.

In recent months, the Philippines has accused Beijing of surveying waters claimed by both countries, using its coast guard to seize fishing equipment near a disputed shoal, announcing new coral reef research facilities, and pointing a laser gun at a Philippine Navy ship. What’s more, China’s promise of billions of dollars promised by China for infrastructure hasn’t materialized.

“If China had fulfilled its investment promises and taken less aggressive in its actions in the South China Sea, the president would be in a better position to convince the various domestic stakeholders to align with his pro-China stance,” Mr. Ong said. — Bloomberg

Bosch, Philips launch social distancing solution for public spaces

Bosch and Philips, two multinational technology companies, launched PeopleCount, a social distancing solution for public and commercial spaces. Globaltronics, a local digital signage advertising company, serves as the sole distributor of the product in the country.

PeopleCount uses Bosch’s intelligent cameras to autonomously track and analyze the movements of people going in and out of a premises. The results are flashed on a Philips display, advising queuers when they can enter through a traffic light system. This full setup can then be managed on an application that serves as its main control.

The solution accommodates single or multiple cameras and monitors, which can be situated in different locations within the premises. There is no prerequisite hardware or software prior to installation. PeopleCount also does not need an Internet connection to operate.

“As more businesses reopen, maintaining safe distancing, especially in public areas, is the utmost concern for any premise owner. PeopleCount is a solution that helps business owners implement safe distancing measures without having to change their current systems,” said Rowena Bonifacio, country sales director of Bosch Philippines, in a statement.

Three packages inclusive of a Bosch professional surveillance camera, a Philips signage screen, and installation services are being offered at introductory prices until October 15.

Package A costs P72,000, originally P85,000, and comes with a 10-inch screen and wall bracket. Package B costs P93,000, originally P110,000, and carries a 24-inch screen and wall bracket. Package C costs P177,000, originally P210,000, and comes with a 50-inch screen and stand. — Mariel Alison L. Aguinaldo

Facebook removes Chinese accounts active in Philippines and US politics

Facebook Inc. said Tuesday it had removed a network of inauthentic Chinese accounts that were interfering in Asian and American politics, including some that posted material supporting and opposing US President Donald J. Trump.

The social networking company said it suspended 155 accounts on its main platform along with six Instagram accounts. The most widely followed accounts and pages were in the Philippines, where they shared content supporting China’s actions in the contested South China Sea and President Rodrigo R. Duterte.

The US accounts had fewer followers and posted content fueling both sides of the American election that will be held on Nov. 3, the company said.

Facebook cybersecurity policy chief Nathaniel Gleicher said that the takedown was the company’s first of Chinese-based accounts on foreign-interference grounds with any engagement in US politics. But he said the American accounts and groups seemed aimed mainly at building an audience.

“The volume of content is so low, it’s very hard to assess what their goal is,” Mr. Gleicher said.

Mr. Trump and his intelligence officials have said China was favoring Democratic challenger Joe Biden, while Democrats in Congress have said Russia is being more aggressive.

The Chinese embassy in Washington did not respond immediately to an e-mail seeking comment.

The network of accounts, pages, and groups used virtual private networks and other tools to make it appear they were operated from somewhere other than China, Facebook said.

Fewer than 3,000 people followed the fake American pages, while more than 100,000 accounts tracked those in Philippines.

The operation’s US assets, added between May and August, included a group called Biden Harris 2020 that had around 1,400 members and one called Trump KAG 2020 that said it supported Trump’s re-election and had just three members, according to analysis firm Graphika, which studied material from Facebook.

In the Philippines, accounts supported both Mr. Duterte and his daughter, who might run to succeed him in 2022. They also criticized Rappler, an independent media group that is a frequent target of the Duterte government. — Reuters

Nationwide round-up

Duterte likely to approve cap on COVID-19 testing fee

PRESIDENT RODRIGO R. Duterte will likely approve the health department’s recommendation of setting a price cap on RT-PCR testing for the coronavirus disease 2019 (COVID-19).

“Ang Presidente po ay nag-issue ng (The President issued an) executive order imposing price caps sa medicines so I don’t think it is impossible for him to issue this executive order (on testing fee),” Palace Spokesperson Harry L. Roque said in a briefing on Tuesday.

The Department of Health (DoH) made the recommendation on standardizing the coronavirus disease 2019 (COVID-19) testing fee using RT-PCR (Reverse transcription polymerase chain reaction) following reports of varied rates, with some laboratories and hospitals charging as much as P10,000.

Mr. Roque noted that the private-sector led Project ARK is offering cheaper RT-PCR testing at P1,750 to P2,000.

In another development, Mr. Roque said the government is unsure if the Philippines will be prioritized by the United States in terms of vaccine procurement without paying an Advance Market Commitment (AMC)

“We don’t know if any company in the United States will in fact give us without payment of AMC, but he’s (Mr. Duterte) sure that if it comes from Russia, if it comes from China, we can,” Mr. Roque said.

Mr. Duterte earlier this month criticized Western companies for requiring fees for vaccines that are still being developed.

Despite the criticism, the Palace said the Philippines will continue its cooperation with the Gavi COVAX alliance, which will allow easier access of members to COVID-19 vaccines. — Gillian M. Cortez

DSWD eyes P10-B emergency fund balance for livelihood assistance

THE DEPARTMENT of Social Welfare and Development (DSWD) is planning to tap P10 billion of the remaining emergency subsidy fund to distribute livelihood assistance to over 664,000 households.

DSWD on Tuesday reported that it has P10 billion savings from its budget for the social amelioration program, where low-income households affected by the coronavirus pandemic were given P5,000-8,000 each.

“We have a remaining of P10 billion still in our funds,” DSWD Secretary Rolando J. Bautista told senators.

He said its use will depend on the “instruction from the DBM (Department of Budget and Management), whether to return or realign.”

Mr. Bautista said the DSWD already has a proposal to use the fund for a livelihood program that will grant P15,000 each to 664,726 households.

“We actually intend to use that for part of the recovery, for the livelihood assistance grant. We already have the proposal, but as we had mentioned earlier, this should be approved by the OP (Office of the President).”

The DSWD has disbursed P99.9 billion for the first tranche of subsidy, benefitting P17.9 million households, and P83.1 billion for 13.9 million families for the second tranche, as provided under the first Bayanihan law.

For the second tranche, the department reduced the targeted beneficiaries to almost 14 million after learning from the local government units that some households were also recipients of subsidies from the labor and agriculture departments.

“During the validation and process, we were able to find out that there are lots of family beneficiaries who received more than one subsidy,” Mr. Bautista said.

“So, what we did was those who we have identified as double compensation, we did not include them in the second tranche.”

Senator Ralph G. Recto questioned the reduction in the number of beneficiaries, as opposed to the 18 million provided in the law.

The Finance sub-committee was tackling the P169.2 billion budget of DSWD for 2021, slightly higher than the P164 billion appropriated last year. The panel moved to endorse the budget for plenary deliberation.

Under the National Expenditure Program, P113 million will be allocated to the conditional cash transfer grant called Pantawid Pamilyang Pilipino Program and P23 million social pension for senior citizens among others. — Charmaine A. Tadalan

Interior secretary says crime rate dropped by nearly 50%

CRIME RATE in the Philippines dropped by nearly 50% during the six months starting mid-March, according to the Department of Interior and Local Government (DILG).

In a televised meeting on Monday, DILG Secretary Eduardo M. Año said only 16,789 crime incidents were reported from the start of the quarantine on March 17, a 47% reduction from the preceding six-month period.

“(F)rom 172 cases a day noon pong bago mag (before the) lockdown, naging (it went down to) 92 cases per day,” he said.

The number covers “eight focus crimes,” including robbery, car theft, and rape.

In a separate statement released Tuesday, Mr. Año said the data refutes the allegations by Human Rights Watch (HRW) and other critics of the administration that crimes, especially killings related to illegal drugs, increased during the quarantine period.

“These are nothing but baseless and bloated allegations of the leftist groups and their cohorts claiming an increase on extra-judicial killings just to mislead the public and demonize the administration,” he said.

“The entire PNP (Philippine National Police) was mobilized for COVID response, the crime rate nationwide dropped significantly, our people mostly stayed at home, curfew was implemented, the streets are relatively quiet, and now they will claim that extra-judicial killings increased?” he added. — Gillian M. Cortez and Emmanuel Tupas/PHILSTAR

DFA raises alert level in Mali, asks Filipinos there to be ready for evacuation

THE DEPARTMENT of Foreign Affairs (DFA) has raised the alert level in the West African country of Mali as it transitions to a new government following a military coup last month.

Alert Level 2 was raised on Sept. 18 “due to the current political and security situation in that country,” the DFA said in a statement on Tuesday.

Such a level, also billed as “Restriction Phase,” is raised when there are threats to life, security, and property of Filipinos arising from internal disturbances, instability, or external threat.

“During Alert Level 2, Filipinos are instructed to restrict non-essential movements, avoid public places, and prepare for evacuation,” the DFA said.

Filipino migrants in Mali have been asked to coordinate with the Philippine Embassy in Rabat, Morocco for assistance.

In a separate development, the department said it has repatriated 31-year old Rose Policarpio, an overseas Filipino worker who was in death row for alleged murder in the Kingdom of Saudi Arabia.

“Ms. Policarpio’s eventual acquittal is an example of the government’s commitment in protecting and promoting the rights of our OFWs (overseas Filipino workers),” Foreign Affairs Undersecretary Sarah Lou Y. Arriola said in a statement.

“This is a vindication of Ms. Policarpio and a clear declaration of her innocence.”

It took six years to settle the case of Ms. Policarpio over the death of her lady employer. — Charmaine A. Tadalan

Ombudsman defends restricted access to SALNs; stops lifestyle checks on gov’t officials

OMBUDSMAN SAMUEL R. Martires on Tuesday said the conduct of lifestyle checks does not prove that a public official is corrupt, and at the same time defended his recent order restricting public access to officials’ Statements of Assets, Liabilities, and Net Worth (SALN)

During the House hearing on the proposed 2021 budget of the Office of the Ombudsman, Mr. Martires said his office has stopped conducting lifestyle checks on government officials, adding that he was about to propose an amendment to Republic Act 6713, a law that establishes the code of conduct and ethical standards for public servants.

“When I assumed office, I ordered the stoppage of lifestyle checks. For a long time, I have doubts on the provision of the law regarding lifestyle checks. The pandemic just came in, but I was about to propose to Congress to amend (RA) 6713 because its provisions there are vague, illogical,” he said in mixed English and Filipino.

RA 6173 provides that “Public officials and employees and their families shall lead modest lives appropriate to their positions and income” and that “they should not indulge in extravagant or ostentatious display of wealth in any form.”

“Who are we to judge these people, on why someone bought a BMW (vehicle) despite having a small house and lacking parking space? Who are we to say that? Should we meddle in the life of someone if he’s not a plunderer,” he said in Filipino.

“This law has victimized so many people.”

During the hearing, ACT Teachers Party-list Rep. France L. Castro raised concerns on the Ombudsman’s Memorandum Circular No. 1 Series of 2020, which restricts the public, including the media, from getting copies of SALNs.

The order covers the 2019 SALNs of government officials and employees filed on August 30 this year.

Under Mr. Martires’ order, government agencies also cannot easily access the SALNs of public servants even for the purpose of a lifestyle check.

“What is it (SALN) for? The SALN is only being used to demonize government officials,” he said in Filipino.

Mr. Martires said SALNs cannot prove the guilt of an official accused of plunder.

In December 2019, former Presidential spokesman Salvador S. Panelo said President Rodrigo R. Duterte does not need to release his 2018 SALN.

Mr. Panelo said the responsibility to make public the President’s SALN, if it’s for the purpose of scrutiny, lies on the Ombudsman.

A copy of the document has yet to be made public.

The President appointed Mr. Martires in 2018. — Kyle Aristophere T. Atienza

NBI official arrested for bribery

AN OFFICIAL of the National Bureau of Investigation (NBI) has been arrested for accepting bribes from those involved in the money-making scheme of facilitating the illegal entry of foreign nationals.

NBI Deputy Director Ferdinand M. Lavin confirmed in a text message that NBI’s Legal Assistance Section chief Joshua Paul Capiral was arrested on Monday, but did not give details yet on the case.

In a Senate hearing, NBI Anti-Trafficking Division chief Janet Francisco also confirmed the arrest of Mr. Capiral in an entrapment operation.

The NBI early this month filed a corruption complaint against 19 Bureau of Immigration (BI) officials and employees found involved in the scheme.

An owner of a travel agency who pays the immigration officers for the entry of its Chinese passengers without the necessary documents was also recommended to be charged with corruption.

The BI welcomed the arrest of the NBI official.

“We will continue to pursue our campaign against BI personnel engaged in corrupt activities in coordination with NBI and other law enforcement agencies in support of President Duterte’s desire to cleanse the agency,” Immigration Commissioner Jaime H. Morente said in a statement.   

Mr. Morente said they also support the recommendations of the Senate committee for the reorganization and suspension of those involved. — Vann Marlo M. Villegas

DBCC flags banks’ concentration risk

THE Development Budget Coordination Committee (DBCC) said there is a need to monitor concentration risks arising from banks’ investments in government securities as well as recent efforts to boost domestic liquidity amid the pandemic.

In its Fiscal Risks Statement for 2021, the DBCC said banks hold P2.2 trillion of outstanding National Government (NG) securities or 42.9% of the total. The bulk (86.8%) are government bonds at P1.9 trillion, while the Treasury bills are at P300 billion.

“At the onset of the COVID-19 global pandemic, the Bangko Sentral ng Pilipinas (BSP) complemented the government’s liquidity management program through some extraordinary measures, such as the P300 billion repurchase agreement with the NG. The BSP also opened the window for purchases of government securities in the secondary market. Given the substantial investment of banks in government securities and recent government initiatives to boost domestic liquidity and address the extraordinary liquidity requirements of the economy, careful monitoring of concentration risk is deemed necessary,” the report said.

Concentration risk refers to the level of risk in a bank’s portfolio arising from concentration in a single counterparty, sector or country.

These risks may become an issue when the need for liquidity arises for banks, said National Treasurer Rosalia V. de Leon.

“If there is herd behavior due to need for liquidity by banks because of high NPLs (nonperforming loans), banks may trigger [a] sell-off of government securities, So as in anything, [there is] need to diversify,” Ms. De Leon said in a text message to BusinessWorld.

A sell-off would mean lower prices and higher yields at which the government will have to pay its debt through government securities, she said.

Ms. De Leon said this is why they want to have more buy-side institutional investors for securities with long maturities.

The banking industry’s NPL ratio stood at 2.67% as of end-July, up from the 2.53% seen in June and the highest in six years or since the 2.74% logged in August 2014, based on data from the BSP. Gross bad loans — or those left unpaid for at least 30 days after the due date — jumped by nearly a third to P290.1 billion from P219.6 billion in July 2019.

The BSP projects the industry’s NPL ratio to reach 4.6% by end-December.

The central bank has assured there remains ample liquidity in the financial system. In July, M3 — which is considered to be the broadest measure of money supply — rose by 14.5% year on year to about P13.6 trillion, slightly slower than the 14.9% expansion in the prior month.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the DBCC rightly took note of the “relatively high” concentration of holders of outstanding NG securities.

“Having a high concentration of types of owners could lead to a situation wherein market players would act in a similar fashion when faced with a turn in market sentiment,” Mr. Mapa said via e-mail.

“The DBCC may also be wary that a potential sell down in the bond market could lead to substantial losses for bond holders, majority of which are banks, who would then in turn face challenges to carry out their function as financial intermediaries should their cash flows and balance sheets come under pressure.”

The DBCC’s statement is only cautionary given government securities are among the safest investments, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“As a matter of prudence, credit risk needs to be diversified to address concentration risk in one or a few issuers or simply not putting all eggs in one basket,” he said in a text message.

“One alternative is to also encourage further diversification of investors in government securities to include more investors locally (i.e. from the investing public) and from overseas (i.e. more foreign investors), as part of capital market development, thereby also reducing reliance on banks as the biggest investors of government securities,” he added. — Luz Wendy T. Noble with inputs from Beatrice M. Laforga

BoC finds some undervalued rice shipments

By Beatrice M. Laforga, Reporter

SEVERAL TRADERS have undervalued rice shipments with provisional goods declaration, resulting in P1.4 billion in lost revenues, the Bureau of Customs (BoC) said.

A Finance department statement quoted Customs Commissioner Rey Leonardo B. Guerrero as saying they found the valuation of rice shipments with provisional goods declaration were “quite low compared with the prevailing market prices.”

“But those are subject to post-modification and post-audit. And in the meantime, we are still conducting the post-modification and verifying the payments of rice because some of them are clearly undervalued. So we will catch up in the post modification and post-audit,” Mr. Guerrero was quoted as saying during an Executive Committee meeting at the DoF.

The Bureau of Customs (BoC) accepts a provisional goods declaration if the private traders do not have regulatory permit, clearance or license present during the lodgement. The provisional declaration can be accepted if the duty and tax treatment of the goods would not be different from goods with complete declaration. The rules were outlined under Customs Memorandum Order (CMO) 07-2020 issued in March this year.

The widespread undervaluation of rice imports appear to have been substantiated after BoC concluded an audit of rice traders. Out of the 245 traders that imported rice from March 5 to June 20, 2019, the BoC audited 60 entities with the most number of incidents and highest percentage discrepancies between their declared transaction values and the published reference rates.

Vincent Philip C. Maronilla, Customs assistant commissioner heading the Post Clearance Audit Group, told BusinessWorld the audited rice importers were found to have owed the government more than P1.417 billion in deficiencies of customs duties, penalties, surcharges, and interest.

“In terms of level of compliance, the audit findings show a low level of compliance among the audited importers, as 47 out of 55 auditees, or 85.45%, were found to have committed violations of Customs laws and regulations in more than one of the issues discussed in the preceding section, and only 8 auditees were found to be compliant with their obligation to ensure the truthfulness and accuracy of the goods declaration,” Mr. Maronilla, who is also the agency’s spokesperson, said in a Viber message Tuesday.

The BoC launched the inquiry in August 2019 after the Federation of Free Farmers (FFF) warned the government may not meet its target collections since imported rice were being undervalued by traders to evade tariffs.

“The audit of import transactions, resolution of undervaluation cases, and actual collection of the correct tariffs, is long overdue. We reported this to DoF last August 2019 and followed it up again this year when we saw that the degree of undervaluation appeared to have worsened,” FFF National Manager Raul Q. Montemayor said in a Viber message Tuesday.

Data on the volume of rice imports that had been subjected to audit was not available as of press time.

“There were also imports from India and Pakistan were assessed the ASEAN rate of 35% tariff instead of 50%; there is no need to investigate this and BoC should have immediately collected the tariff differential. Part of the problem also arises from the wrong tariff code classification of various types of imports which we thought BoC would immediately address but which we can see from their weekly price memoranda they have not done so yet up to this time,” he added.

The rate of tariffs slapped on imported rice was increased to 35% of the declared value under Republic Act 11203 or the Rice Tariffication Law after the quantitative restrictions were lifted.

Rice tariff collections hit P11.036 billion in the seven months to July, up 4% from a year ago and higher than the BoC’s annual P10 billion target for the Rice Competitiveness Enhancement Fund (RCEF). RCEF supports farm mechanization and other measures to allow farmers to better compete against imports.

Jewels keep their luster amid coronavirus pandemic

By Joseph L. Garcia, Reporter

BOREALIS CRYSTALS continues to make money from jewelry sales amid a coronavirus pandemic, though it had been difficult to sustain operations due to supply and manpower constraints during the lockdown.

“We still made a profit in August, but it went down by quite a lot,” owner Czarielle Formalejo said in an e-mail.

“Gold sells far better than silver for us,” she said. “Customers don’t usually tell us that they’re purchasing our items as investments. Often they tell us that these will be heirloom pieces to be kept for sentimental purposes.”

BW Bullseye 2020-focusA pandemic that threatens health and lives urges people to pat their own thinning pockets, and wonder if their old adornments can help build a bridge to the new normal.

While most countries have abandoned the use of the gold standard after World War II, gold continues to capture the world’s markets and imagination.

“Gold has been a reliable store of value for thousands of years and since ancient civilizations,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in an e-mailed reply to questions.

Gold is more tangible and has an underlying value, unlike currency notes that are certificates of indebtedness of governments, he added.

“There is also a cultural aspect in the use of gold and the demand for it,” Mr. Ricafort said. “Some societies use gold as gifts, such as in India especially during weddings, making it a major global market for gold.”

World gold prices rose to a record $2,075 per ounce on Aug. 7, or up by about 28% since the year started, Mr. Ricafort said.

This as bond yields in the US and other developed countries fell to new lows of close to 0% or even negative in other countries, narrowing gold’s disadvantage as an investment that does not have interest rate returns unlike bonds and other fixed-income instruments, he added.

Gold prices have gone up by more than 80% in the past five years, he pointed out.

“Gold is considered a real asset and no one’s liability, said Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines. “Gold can be buried underground for years and never lose its value.”

GOLD ONLINE
“If you were lucky enough to buy gold in 2016 when the price was at an all time 10-year low of $1,050 per troy oz, you would have indeed made a sound investment,” Josef Sagemuller, a jewelry specialist at Salcedo Auctions, said in an e-mail.

More Filipinos have been investing in gold and jewelry during the pandemic, with online jewelry stores springing on Facebook, according to Jean Henri Lhuillier, president of Cebuana Lhuillier Pawnshop and the Chamber of Pawnbrokers of the Philippines, Inc.

Foreclosed jewelry pieces at pawnshops have also become popular targets of entrepreneurs who eventually sell these on Facebook Live, he said in a statement on Sept. 7.

“Based on the actual inventory of Cebuana Lhuillier’s foreclosed jewelry, the number of Filipinos who have been buying these items is growing,” Mr. Lhuillier said. “In fact, even during the quarantine period, the number of buyers significantly increased.”

He said more people are now seeing the value of jewelry and gold especially during the crisis. “You would be surprised by the types of jewelry being pawned off. Some are even heirloom pieces and sold at very good prices.”

Speaking of crisis, the sale of the Romanov collection — one of the world’s largest jewel collections from Russia’s last ruling dynasty — remains to be one of the best-documented cases of the role gems play in a crisis.

“Gems lost their magic and were prized solely for their monetary value,” according to the book The Flight of the Romanovs: A Family Saga by John Curtis Perry and Constantine Pleshakov. “Now, only the prosaic matter of survival counted: medicines, bribes for border guards, or daily bread,” according to the book about the survivors of the Bolshevik purge of their former ruling dynasty.

“Another advantage of jewelry investment during the crisis is that these are not as regulated as the flow of currencies that move from one bank or country to another,” Mr. Ricafort said. “However, jewelry, especially those involving huge amounts and physically larger may be regulated by Customs authorities at various ports of entry.”

Such was the case with the cache of Imelda R. Marcos, whose 60-piece jewels Greek national and Marcos crony Demetriou Roumeliotes had tried to smuggle out of the Philippines in 1986, when the late dictator Ferdinand E. Marcos was ousted by a popular uprising.

The Customs bureau seized the jewels from Mr. Roumeliotes at the Manila International Airport as he was about to leave the country. The Presidential Commission on Good Government (PCGG) has been trying to sell the jewels for years.

JEWELS AND DESIRES
One of the pieces left behind by Mrs. Marcos was also left behind by the Romanovs — a pearl and diamond tiara made in 1841 for Empress Alexandra Feodorovna (born Charlotte of Prussia), the wife of Czar Nicholas I.

“The tiara was seized in Malacañan Palace together with other jewelry items, on or shortly after Feb. 25, 1986 and transferred to the Bangko Sentral ng Pilipinas on March 1, 1986,” according to the PCGG. “It is part of the Malacañang Collection.”

Jewelry is usually evaluated in terms of the quality of the stones used, the purity of the gold and the craftsmanship, Mr. Sagemuller said. “Jewelry hardly ever depreciates in value but you have to be aware of what it is you are buying, and do your research.”

“When you choose to invest in quality stones and pieces, you will be able to hedge your savings and money from inflation, hyperinflation and economic crises,” he added.

It’s not enough that a piece of jewelry bears the name of the world’s most famous brands. “Cartier, Bulgari, Tiffany and the other jewelers are good investments because they usually keep their value over time,” Mr. Sagemuller said.

“However, the more common pieces that are mass produced will not appreciate as much as their haute joaillerie or high-end jewelry counterparts. Always buy stones of high quality in as big a size as you can afford,” he added.

Part of the attractiveness of jewelry as investments is in the meaning we give them. The Dowager Empress of Russia refused to sell her jewels because they served as a tangible link to her life before being forced into exile.

“The attractiveness of gold transcends many things,” Mr. Asuncion said. “Gold and the love for it may also be equated with greed, and sometimes, too much greed.”

Ms. Formalejo, mentioned at the outset, said emotions play an integral role in jewelry purchases. “Being a luxury item, it’s not a usual, everyday purchase so there’s a lot of thought that comes into it as well.”

Aja Raden, designer and author of Stoned: Jewelry, Obsession, and How Desire Shapes the World said of jewelry: “They’re not objects that can kill, or objects that can cure, or build, or even think. Jewels have one, and only one, real power: They reflect our desires back to us and show us who we are.”

Wilcon’s new stores make up for ‘lost time’

By Denise A. Valdez, Senior Reporter

WILCON DEPOT, Inc. is targeting to open two more stores by the end of the year to catch up on delayed construction from the two months of strict lockdown due to the coronavirus pandemic.

In a media briefing late Monday, Wilcon President and CEO Lorraine Belo-Cincochan said the company is looking to have a total of 63 stores by end-2020, down from its original target of opening 65 new stores.

“Our target has been revised to 63 this year because as we all know, the lockdown made everybody stop doing anything, especially construction… We are now at 61 stores… And we still plan to open two more by the end of this year, the last quarter of the year,” she said.

In the past months, Wilcon has already opened four new stores, and come next year, will open nine more stores to make up for “lost time” during the strict lockdown.

The island of Luzon was put under tight quarantine measures from mid-March to mid-May due to the rapid spread of coronavirus cases. While parts of the country remain under a relaxed quarantine to date, Wilcon has reopened its store network since May.

The company noted it saw pent-up demand coming in since it resumed operations, mostly for “soft goods” or products that do not require construction work.

“What happened was people locked up in their homes really saw all four corners of their houses and rooms… When we opened in May, they were coming in to Wilcon and replacing all the bulbs. Because we use the aircon, the electric fan, and everything more often, the tendency is there will be more wear and tear,” Ms. Belo-Cincochan said.

The work-from-home set-up is likewise pushing people to buy more furniture that would suit new household needs.

Because of this, the company is able to post an “encouraging” financial performance in the third quarter, said Rosemarie Bosch Ong, Wilcon chief operating officer.

“We’re still hopeful that (September) will give us better results, better than our August definitely. If you sum it up,… we can see some good numbers for the third quarter,” she said.

Wilcon’s earnings dropped 65% to P352.36 million in the first half of 2020. Its net sales declined 23% to P9.04 billion due to store closures during the strict lockdown.

Shares in Wilcon at the stock exchange grew 10 centavos or 0.65% to P15.60 each on Tuesday.

Aboitiz holding firm eyes up to P10-B bonds 

ABOITIZ EQUITY VENTURES, Inc. (AEV) is looking to issue up to P10-billion fixed-rate retail bonds in the fourth quarter of the year.

In a disclosure to the exchange on Tuesday, AEV said it has applied for authorization from the Securities and Exchange Commission to launch the second tranche of its P30-billion bond program

The program was registered in June last year, from which P5-billion bonds were already issued and listed within the same month.

For the second tranche, AEV wants to issue a primary offering of up to P5-billion bonds, which will have an oversubscription option of up to P5 billion.

The target is to do the offering within the fourth quarter, but may be later depending on market conditions.

Proceeds from the planned issuance will be used to partially refinance the company’s maturing loans.

AEV has tapped BDO Capital & Investment Corp. and First Metro Investment Corp. as joint issue managers, and with BPI Capital Corp., China Bank Capital Corp. and SB Capital Investment Corp., as joint lead underwriters for the offering. BDO Unibank, Inc. – Trust and Investments Group will be the trustee.

Similar to last year’s P5-billion first tranche bonds, the second tranche bonds will be listed at the Philippine Dealing and Exchange Corp. (PDEx).

AEV currently has seven bond listings at PDEx as of Sept. 18, two of which are scheduled to mature within the year: P10.46-billion bonds on Nov. 6 and P6.2 billion bonds on Nov. 21.

The company posted a 55% earnings decline to P4 billion in the six months ending June. Its power business, which contributes the majority of AEV’s income, dropped 57% to P2.9 billion.

Shares in AEV at the stock exchange shed 85 centavos or 1.80% to close at P46.50 each on Tuesday. — Denise A. Valdez

SC tells GMA to reinstate workers

By Vann Marlo M. Villegas, Reporter

THE Supreme Court ordered GMA Network, Inc. to reinstate 30 cameramen and assistant cameramen who were illegally dismissed in 2013.

In a statement, the SC’s public information office said the court’s third division on July 13 declared the petitioners as regular employees of GMA. It ordered the network to pay their back wages, allowances, and other benefits from the time of their dismissal up to their reinstatement.

GMA is also directed to pay each of the petitioners’ attorney’s fee equivalent to 10% of the total monetary award and the amount will have legal interest of 6% per year to be computed from the finality of the decision until full payment.

The court said there is an employer-employee relationship between the network and the camera operators who were hired between 2005 and 2011 and were all dismissed in May 2013.

It said that to be considered as independent contractors and not employees as claimed by the network, it must be proven that the petitioners were hired “because of their unique skills and talents and that GMA did not exercise control over the means and methods of their work.”

“In this case, GMA provided the equipment used during tapings and assigned supervisors to monitor the petitioners’ performance and guarantee their compliance with company protocols and standards,” the statement read.

“The Court also gave weight to petitioners’ arguments that they were regular employees having performed functions that were necessary and desirable to GMA’s usual business as a television and broadcasting company,” it said.

Only casual employees whose work is “neither necessary nor desirable to the usual business and trade” of the employer are required to render one year of service to become regular employees while those whose work is necessary attain regular status “from the time of engagement.”

There was also no showing that employees who were paid P750 to P1,500 per taping were hired because of their skills “not possessed by ordinary employees,” it said.

The court ruled that the work of the petitioners are “within the regular and usual business of GMA,” adding that “it would be absurd to consider the nature of the petitioners’ work of operating cameras as distinct or separate from the business of GMA, a broadcasting company that produces, records, and airs television programs.”

As regular employees with the right to security of tenure, they may only be terminated for “just or authorized cause, and after due notice and hearing.”

“As illegally dismissed employees, petitioners are entitled to reinstatement to their petitions with full backwages computed from the time of dismissal up to the time of actual reinstatement,” it said.

The court remanded the case to the labor arbiter to compute the backwages and other monetary awards.

A copy of the decision has yet to be posted.

GMA said it has yet to receive a copy of the decision.

Green groups seek halt of DMCI’s coal-fired power generator project

By Adam J. Ang

A GROUP of petitioners asked a Palawan court to stop the planned construction of a coal-fired power plant by the power arm of DMCI Holdings, Inc.

Environmental groups and some community leaders in Narra town, which were assisted by the Environmental Legal Assistance Center, filed with the Regional Trial Court in Puerto Princesa on Tuesday a complaint against DMCI Power Corp. for its pipeline 15-megawatt (MW) power plant project.

They are asking the court to issue an environmental protection order that will compel the company to stop pursuing its project. They also seek to cancel the implementation of its environmental compliance certificate (ECC) granted by the Department of Natural Resources and Environment-Environmental Management Bureau (DENR-EMB) in the Calabarzon region.

“The battle of Palaweños against coal has already been a long one, and we can neither afford nor intend to lose it. Letting coal in would cost the welfare of our people and of Palawan’s rich biodiversity,” Grizelda Mayo-Anda, the petitioners’ legal counsel, said in a virtual briefing.

The said order will also mandate the Palawan Council for Sustainable Development to review the strategic environmental plan clearance, which it issued to the power firm in 2015, as well as to prevent various local government agencies, including the Narra mayor’s office, from awarding other permits for the project.

The company secured an ECC for the project last year. It was also considered as an energy project of national significance by the Department of Energy (DoE). The coal-run generator was first opposed in 2012.

The petitioners also wanted the court to issue a writ of continuing mandamus, which will require the EMB to revisit and review DMCI Power’s ECC application, noting the company’s failure to conduct public hearings on the project and to provide clear impact projections, among others. 

“Nakita natin ang maraming pagkukulang sa pagsusuri nila (DENR) ng ECC application ng DMCI Power (The DENR’s evaluation of the ECC application of DMCI Power was not substantial),” Ms. Anda said.

DMCI Power is operating four existing diesel and bunker fuel-fired power plants across Palawan. It has three other power generators in Masbate, Oriental Mindoro, and Sultan Kudarat.

The publication reached out to the company for comments, but it has yet to respond as of press time.

One of the petitioners, Cynthia S. Del Rosario of Palawan Alliance for Clean Energy, said the province has “more than enough” of power capacity, which stands at 57 MW, to meet its present demand around 50 MW.

“Sa option na kung kailangan mag-entertain ng bagong service contracts, dapat renewable energy na, (In entertaining new service contracts, they must be renewable energy projects)” she added.

Sustainability think-tank Center for Energy, Ecology, and Development (CEED), another petitioner, feared that if the project will go online, it will raise power rates paid for by consumers. It cited the previous P9.38 per kilowatt-hour generation tariff in the supply contract between DMCI Power and the Palawan Electric Cooperative.

“There is no reason why Palaweños must be made to suffer exorbitant rates when renewable energy sources capable of providing cheap and clean electricity abound in our country,” Avril De Torres, the group’s research head, said.

In the first half of 2020, DMCI Power chipped in P256 million in income share to parent DMCI Holdings, Inc., a 10% increase from last year, attributed to higher energy sales in Palawan and lower fuel costs.

Shares in DMCI inched up 0.25% to close at P4.04 each on Tuesday.

Travel firms study ties with S. Korean counterparts

TRAVEL agencies are looking to develop an exclusive partnership with their counterparts in South Korea in preparation for the resumption of operations.

The Philippine Travel Agencies Association (PTAA) in a press release on Tuesday said that it might negotiate an agreement with the Korean Association of Travel Agencies, where each party will provide a list of members they exclusively work with.

PTAA also hopes that the agreement would help standardize tour costs, create a recommended list of destinations, and set up a complaints committee.

“We would highly appreciate the drafting and signing of a memorandum of understanding wherein both sides will commit to only dealing with accredited travel agencies and tour operators that are members of both our associations,” PTAA President Ritchie Tuaño said.

If signed, the potential agreement would be PTAA’s first same-level international partnership.

“Two-way tourism between our two countries have been growing over the past 10 years.  We want that growth trajectory to continue long term,” Mr. Tuaño said.

Tourist traffic between the two countries is high, with South Koreans leading tourist arrivals to the Philippines for the tenth year in a row last year with 1.99 million tourists.

Filipino tourism was South Korea’s eight largest market last year, with 503,867 arrivals.

PTAA is also asking South Korea for 100% visa-free entry for Filipinos.

The country earlier this year suspended some visa-waiver programs due to the pandemic, halting visa-free entry of Filipinos to Jeju island.

The Embassy of the Republic of Korea resumed short-term visa processing to Filipino business travelers and spouses of Korean citizens last July.

The tourism sector is one of the worst-hit industries during the pandemic, with revenue dropping 72% to P81 billion as of July 2020, the Tourism department said last month.

Last year, tourism contributed 12.7% to the country’s gross domestic product and employed 5.7 million people. — Jenina P. Ibañez

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