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Duterte calls fired prison chief a ‘good man’

PRESIDENT Rodrigo R. Duterte on Friday said he still believed in his former prison chief, whom he fired early this week over the illegal release of felons convicted of heinous crimes for good conduct.

“Faeldon is a good man,” the president in a speech delivered in the Visayan language in Naga City.

Mr. Duterte recalled how Mr. Faeldon when he was still Bureau of Customs head reported to him about a Cebu-based businessman who kept cigarettes with fake tax stamps in three warehouses.

“We earned P37 billion because of that report by Faeldon,” the president said.

He was referring to the warehouses of Mighty Corp. that authorities raided in 2017. The cigarette company later paid the taxes.

Mr. Faeldon headed the Bureau of Customs but was forced to resign at the height of a controversy involving the shipment of billions of pesos worth of crystal meth from China. He was reappointed to the Office of Civil Defense before heading the BuCor in 2018.

Meanwhile, Justice Secretary Menardo I. Guevarra appointed a Bureau of Corrections (BuCor) official to temporarily head the agency after President Rodrigo Duterte fired Nicanor E. Faeldon.

BuCor Assistant Secretary Melvin Ramon G. Buenafe was appointed officer-in-charge, according to a copy of a department order.

Mr. Guevarra also created a committee headed by Justice Undersecretary Deo L. Marco, with Assistant Secretaries Neal V. Bainto and George Ortha II mandated that will supervise the bureau pending the appointment of new director general.

Mr. Duterte on Wednesday sacked Mr. Faeldon over the illegal release of almost 2,000 felons convicted of heinous crimes.

Also yesterday, Mr. Guevarra said his office would investigate corruption at the bureau after reports that parole grants have become for sale.

“That will be part of the investigation,” the Justice chief said. His office is already reviewing the processes being followed for convicts’ early release for good conduct, he told reporters.

“I do not have the facts before me but I tend to believe that is a very real possibility,” Mr Guevarra said.

During a Senate hearing on Thursday, a witness accused some prison officials of selling parole to families of convicts. — Vann Marlo M. Villegas

DoJ to finish hearing sedition complaint vs VP

GOVERNMENT prosecutors are about to finish hearing the sedition complaint against Vice President Maria Leonor G. Robredo and 35 others and will soon submit the case for decision.

Prosecutors on Friday said they have set a deadline for Sept. 11 for all counter-affidavits, after which the case will be submitted for resolution.

Police in July filed inciting to sedition, cyberlibel, libel, estafa, harboring a criminal and obstruction of justice against the officials accused of circulating a video linking President Rodrigo R. Duterte and his family to the illegal drug trade.

Meanwhile, two former opposition senatorial candidates and an ex-spokesman of the Supreme Court filed a countersuit against Peter Joemel Advincula, the self-confessed drug dealer who appeared in the videos.

Lawyers Jose Manuel I. Diokno, Lorenzo R. Tañada III and Theodore O. Te said the sedition allegations against them were “deliberate fabrications.”

Human Rights Watch has called on authorities to drop the “preposterous complaint,” calling it an attempt to harass and silence critics of the government’s bloody war on drugs.

A conviction for incitement to sedition carries a maximum penalty of six years in jail. — Vann Marlo M. Villegas

CoA probing P20M insurance claims from dead

STATE auditors are investigating about 2,000 claims worth more than P20 million made by supposedly dead members of the Philippine Health Insurance Corp. (PhilHealth) this year.

“The immediate conclusion would be they were fraudulent claims,” Commission on Audit Chairman Michael G. Aguinaldo told a Senate hearing on Thursday night. “You can’t come to this conclusion immediately because these treatments could be right before the person died,” he added.

Investigators also need to know when the supposed expense was incurred, Mr. Aguinaldo said.

CoA data show that 1,708 claims were made by 961 PhilHealth members from Jan. 3 to June 29 this year.

Valid claims can be made by the dependents of dead PhilHealth members, PhilHealth Senior Vice President Rodolfo B. Del Rosario, Jr. told senators. — Gillian M. Cortez

Budget delay’s impact hounds infrastructure spending into July

LATE ENACTMENT of this year’s national budget continued to weigh on infrastructure spending in July, the Budget department reported on Friday, even as it noted that a month-on-month surge showed “that disbursements are starting to normalize and accelerate in the second half…”

Infrastructure and other capital outlays surged by 73.1% to P75.2 billion in July from June’s P43.5 billion, but was still 11% smaller than the P84.5 billion disbursed in July last year.

July disbursements for these items brought year-to-date spending to P386.6 billion, still 11.6% smaller than the P437.2 billion spent in last year’s first seven months.

An excerpt from the department’s report blamed “the lingering effect of the delayed approval of the 2019 budget and the [45-day public works] election ban [ahead of the May 13 midterm polls].”

“The contraction recorded mostly from lower DPWH (Department of Public Works and Highways) disbursement, however, was moderated by growth posted in the Judiciary for construction, repair and rehabilitation of courts of justice, and in the Department of National Defense for the advance payment made in connection with the purchase of military equipment under the Armed Forces of the Philippines modernization program,” the report explained.

The department said it expected improvement in succeeding months, since “[t]he implementation of new programs and projects of the DPWH and the Department of Transportation are currently under way”.

“Based on the revised disbursement program submissions of said departments, spending by the two main infrastructure agencies is heavily concentrated in the second semester,” the report read.

“This, along with the allotment releases in August, can therefore propel government spending in the second semester with the completion and/or partial completion of infrastructure works and corresponding progress billings.”

Sought for comment, Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, Inc., described July’s smaller-than-planned infrastructure spending as a “missed opportunity” even as the month-on-month spike showed the government’s “catch-up plan” is well under way.

For Mr. Asuncion, the government “will be able to increase spending, but may come up short of the plan to spend everything of what was planned for 2019”.

For Michael L. Ricafort, economist at Rizal Commercial Banking Corp., “underspending” could lead to “some slowdown in the broader economic/GDP growth” should it persist this quarter.

The government operated on a reenacted 2018 budget until mid-April when President Rodrigo R. Duterte signed the P3.662-trillion budget for 2019. Economic managers have blamed the late budget enactment, which left new projects unfunded in the first three-and-a-half months, for the disappointing 5.5% gross domestic product (GDP) expansion last semester. The economy now has to expand by at least 6.4% in the second semester to meet the lower end of 6-7% target this year.

Mr. Ricafort said GDP growth could “pick up” this semester and next year “due to the spill-over government spending, especially on infrastructure into 2020 (from 2019)”.

“The sharp decline in both inflation and interest rates would also help spur greater demand for loans/financing, including those for financing various infrastructure projects especially the big-ticket infrastructure projects under the ‘Build Build Build’ program, as well as those for their contractors and other suppliers that are part of their supply chain,” he said in an e-mail.

“The government’s preference for using official development assistance loans — which are cheaper and with longer tenors (with grace period) and could be much faster to implement by the government once approved (with less parties/partners do deal with) — would also help in speeding up the deployment and completion of the major/biggest infrastructure projects, especially those under the ‘Build Build Build’ program.” — Beatrice M. Laforga

Farmers call for limits to rice imports, hike in NFA buffer stock

A FARMERS’ association pressed the government to regulate rice imports more closely to allow domestic farmers and traders to dispose of their inventory particularly during the current harvest, and called for an increase in the National Food Autority’s buffer stock minimum to support the market.

“Government must focus on the supply side, because that is where the problem is coming from. It must find a way to manage the inflow of imports until the supply glut disappears and farmers and traders are able to unload their stocks,” Federation of Free Farmers (FFF) National Manager Raul Q. Montemayor said in a statement.

Farmers are currently bringing in their crops amid a shortage of storage space in key rice-growing areas. Meanwhile, traders are still holding significant inventories from the last harvest because they purchased domestic rice at relatively high prices that cannot compete with cheaper imports, and are unwilling to sell at a loss.

The resulting softening of the market for palay, or unmilled rice, has depressed farmer incomes with reports emerging that traders are paying as little as P7 per kilogram.

FFF proposed the implementation of other measures like special safeguard duties, as well as trade remedies like anti-dumping measures, which would allow the government to temporarily impose additional duties on rice imports, making them more expensive.

According to the Bureau of Customs (BoC), 2.4 million tons of have arrived to the Philippines as of July since the enactment of the Rice Tariffication Law, which opened up the import market to private traders who must pay tariffs on their shipments starting at 35% for Southeast Asian Rrce.

The imports are equivalent to 17% of the Philippines’ annual consumption.

“We actually need to import only 10% of our needs because we can produce 90%, so there is already an excess supply of 7% in the market and this glut will become worse if more imports come in and coincide with the main harvest,” Mr. Montemayor said.

The Philippine Statistics Authority (PSA) estimates that the average price of palay was P17.62 per kilo in the second week of August.

The National Food Authority (NFA) has been limited by the law to procuring rice only from domestic farmers, but Mr. Montemayor said that this is not enough while farmers are exposed to competition from imports.

He noted that the P7-billion budget of the NFA can only purchase about 412,000 metric tons (MT) at P17 per kilo, which is only 2% of the country’s annual rice output. If it were to absorb 10% of output, the agency would need P35 billion.

The government also plans to increase the country’s buffer stock to 90 days as another way to boost the procurement of domestic rice.

“If they want NFA to have a buffer stock equivalent to 90 days, they will need to invest around P80 billion. Where will they get that money, and where will NFA and the LGUs [local government units] store that palay?,” Mr. Montemayor said.

LGUs have recently been roped in by the Department of Agriculture (DA) to participate in direct palay purchasing, milling and marketing at “reasonable” prices to help provide a floor to the market for farmers.

“In 2018, farmers were enjoying very good prices above P20 per kilo even without NFA having to buy a single kilo of palay. Why, because there was a tight supply of rice in the market and the NFA ran out of stocks to control the market. This shows that palay prices can be influenced through proper demand and supply management without government having to directly intervene in the market,” he said. — Vincent Mariel P. Galang

Price growth seen easing until Oct. before returning to 2% level by yearend

PRICE increases are expected to lose momentum until October before a recovery in headline inflation to around the 2% level in December, according to an economic bulletin issued by the Department of Finance (DoF).

“If the MoM (month-on-month) price increase is kept to at most 0.2%, year-on-year price change will continue its decline until October before reverting to the 2% level starting December,” the DoF said in the statement released Friday.

The DoF also noted that core inflation, which strips out volatile items like fuel, is also easing.

“Core inflation eased to 2.9% for the month while the overall CPI (Consumer Price Index) increased by 0.17% month-on-month in August, less than the 0.25% MoM increase in July,” it said.

The Philippine Statistics Authority (PSA) reported on Thursday that August headline inflation slowed to 1.7% in August from 2.4% in July and 6.4% a year earlier.

Last month’s inflation was slightly lower than the 1.8% median estimate in BusinessWorld’s poll of 12 economists late last week. It also was also at the midpoint of a 1.3-2.1% range estimated by the central bank.

In the eight months to August, inflation is averaging 3%, at the midpoint of the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target range for 2019 but still higher than the the central bank’s 2.6% forecast for the entire year.

“The decline in inflation is traced to the lower rate of increase in the prices of both food and non-food items. Rice price, in particular, clocked its largest year-on-year decline of 5.2%,” it said.

Growth in the food index has slowed to as much as 0.3% from July’s 1.7% and 8.2% a year earlier.

Following the release of data, National Economic and Development Authority (NEDA) said the Rice Tarrification Law brought down the domestic retail and wholesale price of rice by 10-13%. The law “continues to help increase [the] rice supply,” NEDA Undersecretary Rosemarie G. Edillon said.

The law allowed more liberal imports of rice by private entities sho had to pay an import tariff of 35% on grain sourced from Southeast Asia. — Beatrice M. Laforga

NPC initiates proceedings against 3 online lending firms

THE National Privacy Commission (NPC) has found three online lending firms to have violated the privacy of persons who were allegedly shamed publicly, including maliciously disclosing the private information of borrowers.

“The investigation determined that their business practice specifically targets the privacy of persons, practically making a profit out of people’s fear of losing face and dignity. These unethical practices simply have no place in a civilized society and must stop,” Privacy Commissioner Raymund E. Liboro said in a press conference on Friday to release the outcome of the agency’s probe.

He said the operators of the lending applications could face imprisonment of up to seven years and fines of up to P5 million for violating the Data Privacy Act of 2012.

The lending firms were identified as Fast Cash Global Lending, Inc., Unipeso Lending Co., Inc., and Fynamics Lending, Inc. The commission’s fact-finding reports recommended the criminal prosecution of the firms’ board members for violating provisions of the privacy law.

Ivy D. Patdu, deputy privacy commissioner, said NPC had ordered executives behind the lending apps to respond within 10 days of their receipt of the agency’s order to file an answer to explain the allegations in the commission’s reports.

She said if the respondents fail to answer without justification, the commission would make its final decision based on available evidence and information contained in the reports.

Mr. Liboro said aside from criminal prosecution, the fact-finding team also recommended issuing a temporary or permanent ban on the processing of personal data by the lending firms “as urgently required by public interest” as well as the issuance of compliance orders against them.

He said NPC received a total of 921 complaints about the same offenses, namely: use of contact list or phone directory without consent or authority; disclosure of unwarranted or false information to other persons; use of personal information for harassment and threatening communications; and unduly intrusive personal data processing.

The complains prompted the commission to create a taskforce to probe the lending firms. The three lenders mentioned accounted for 61% of the complaints, he said.

Fast Cash Global operates the Fast Cash online app; Unipeso operates the Cashlending app; and Fynamics operates PondoPeso.

The NPC officials noted that the firms are registered with the Securities and Exchange Commission (SEC).

Mr. Liboro said the privacy law, which is meant to protect the private information of individuals, ensures that they are not harmed with illegal or unauthorized use of their personal details.

He cautioned online users against the downloading of online lending applications, and to carefully read the terms and conditions as these might include “dangerous permissions” such as access to a person’s live location, phone books and social media account, or even camera control. — Victor V. Saulon

Mindanao to export initial 5,000 MT of rice to Papua New Guinea

WWW.FACEBOOK.COM/SECMANNYPINOL

AN INITIAL 5,000 metric tons (MT) of rice from Mindanao will be shipped to Papua New Guinea following the signing of a memorandum of understanding between farmers’ groups represented by the Mindanao Development Authority (MinDA) and PNG’s Central Province government.

MinDA Chair Emmanuel F. Piñol, in a post on his social media page Friday, said he signed the agreement on Sept. 5 with Central Province Governor Robert Agarobe in Port Moresby.

Mr. Piñol said the export deal, which covers premium quality and organic rice, is intended to “protect the region’s farmers from the adverse effects of massive rice importation.”

The first shipment will be sent “as soon as the export documents are completed.”

Under the program, Central Province, through its Economic Enterprise Office, will import the Mindanao rice for distribution in the province and other parts of the country.

Mr. Piñol, citing PNG Prime Minister James Marape, said there is “a niche market for good-eating quality rice” in PNG, which imports about 400,000 MT of rice annually from Australia, Thailand and Vietnam.

Mindanao produced 4.26 million MT of rice in 2017, according to MinDA data.

Mr. Piñol, who served as head of the Department of Agriculture before moving to MinDA, said the agreement is an offshoot of the December 2017 meeting between President Rodrigo R. Duterte and then PNG Prime Minister Peter O’Neil in Da Nang, Vietnam.

In 2018, the two countries signed an agricultural cooperation agreement.

Mr. Piñol said MinDA is also planning to link Mindanao’s poultry farmers with PNG for the export of dressed chicken. — Marifi S. Jara

House panel approves P8.2-B Office of the President budget

THE House appropriations committee on Friday approved the P8.201 billion budget of the Office of the President for 2020, taking under six minutes with no interpellation.

The 2020 budget, which is 21.07% higher than the department’s 2019 spending plan, was approved following the motion of Albay-1st district Rep. Edcel C. Lagman to terminate proceedings immediately after opening the hearing.

Of the total, P1.070 billion was appropriated for personnel services, P6.703 billion for maintenance and other operating expenses (MOOE), and P427.46 million for capital outlays.

Bayan Muna Rep. Ferdinand R. Gaite requested details on the OP’s funding on intelligence operations and peace talks among others, which Davao-3rd district Rep. and panel chairman Isidro T. Ungab directed to be submitted instead in writing.

“We would like to present a manifestation to also raise questions with the budget as proposed by the Office of the President, regarding certain matters regarding the confidential expenses, intelligence expenses, the issue of the lowering, although slightly, of the budget for personnel services and also the prospects of the peace talks with CPP-NPA (Communist Party of the Philippines-New People’s Army),” Mr. Gaite said.

The committee concluded budget deliberations on Friday and is set to begin plenary debate on each agency’s spending plan on Sept. 11. The House of Representatives targets final approval of the proposed P4.1-trillion national budget by Oct. 4.

Both chambers plan to submit the 2020 national budget bill by Dec. 15 for President Rodrigo R. Duterte’s signature.

The committee also tackled the P1.697-billion budget for the Presidential Communications Operations Office (PCOO), which is 12.23% higher.

The PCOO budget will be distributed as follows: P764.432 million for personnel services, P719.400 million for MOOE and P213.890 million for capital outlays.

During the hearing, opposition lawmakers questioned the News and Information Bureau, particularly on the alleged publication of “fake news.”

PCOO Secretary Jose Ruperto Martin M. Andanar assured ACT Teachers Rep. France L. Castro and Kabataan Rep. Sarah Jane I. Elago that it is not the policy of the agency to “red tag” any organization. — Charmaine A. Tadalan

Del Monte Pacific recurring earnings post first-quarter turnaround

Del Monte Pacific Ltd. (DMPL) said recurring first-quarter net income attributable to the company’s owners was $4.15 million, reversing losses amounting to $3.73 million a year earlier.

The listed company said in disclosure to the exchange Friday that including one-off items, it posted a net loss of $38.26 million, after a profit of $3.02 million in the same period last year. The company’s first quarter ends in July. Its reporting currency is US dollars.

Sales during the quarter slipped by 14% to $375.86 million mainly due to lower sales in the US, although this was partly offset by higher sales in the Philippines and the S&W branded business in Asia.

US subsidiary Del Monte Foods, Inc. (DMFI) contributed $241.4 million or 64% of the group sales. Its sales declined by 22% after it divested the Sager Creek business and the reduced sales of low-margin non-branded business. Gross margin improved by 7.4 percentage points to 20.3%.

“Del Monte continued to diversify beyond the canned goods aisle and introduced innovative products in the growing categories of refrigerated produce and frozen to cater to demand for health and wellness, snacking and convenience,” the company said.

Reversing a decline a year earlier, sales in the Philippines grew by 2% in peso terms and 4% in dollar terms due to the peso’s appreciation.

“Retail sales grew by 4% in volume and 9% in peso sales value. Non-retail food service declined due to a change in a customer’s procurement policy. Price increase and lower direct promotion spend saw a positive contribution of 4.8% to net sales growth, driven by a series of price adjustments across all categories mostly in 2019,” it said.

In retail, sales in the general trade segment, which accounted for about 50% of Philippine sales, grew by 4% year-on-year, and by 20% quarter-on- quarter, as the group continued to make progress in improving its distributor business, which dampened results in the past year.

Sales in the modern trade segment, which made up about 30% of domestic sales, increased by 7%.

During the quarter, the company posted a gross profit of $91.1 million, up 17% from a year earlier, and much improved gross margin of 24.3%, up 6.5 percentage points.

It said the improvement was “mainly due to increased prices in the USA and Philippines, higher sales of fresh pineapple, divestiture of the low-margin Sager Creek vegetable business and reduced sales of low-margin private label, thus improving sales mix.”

DMPL, which is dually listed on the Singapore Main Board and Philippine Stock Exchange, recorded earnings before interest, tax, depreciation and amortization (EBITDA) of $36.6 million, significantly higher than the $18.8 million previously.

The quarter’s EBITDA included $2.1 million of one-off expenses mainly related to severance and loss on partial disposal of assets of a plant in Crystal City, Texas.

Without the one-off expenses related mainly to plant closures in the US, the group’s recurring EBITDA would have been $38.7 million, the company said. The comparative EBITDA in the previous year was $27.3 million.

On Friday, Del Monte Pacific shares slipped 1.01% to close at P5.89. – Victor V. Saulon

Rizal Bank to sell $300M dollar bonds

RIZAL Commercial Banking Corp. (RCBC) is returning to the US dollar bond market by selling $300 million of five-year unsecured bonds amid strong demand from investors overseas, it said in a statement on Friday.

Proceeds of the borrowing will support the bank’s loan portfolio and green projects, it said.

The five-year debt notes, which will be issued on Sept. 11, is a drawdown from its $2-billion medium-term note program. The notes have a coupon rate of 3% a year at 99.751 — Beatrice M. Laforga

Dollar reserves at $85.61B as of August

THE country’s gross international reserves (GIR) rose by $430 million to$85.61 billion as of end-August , the central bank said in a statement on Friday.

The month-on-month increase in reserves reflects the National Government’s net foreign currency deposits and the central bank’s income from investments abroad, Bangko Sentral ng Pilipinas said.

The increase was partly tempered by payments for foreign debt, it added.

The end-August GIR, which serves as a buffer for liquidity shocks, is equivalent to 7.5 months worth of imports and payments of services and primary income, BSP said.

It is also equivalent to 5.2 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.

Net international reserves (NIR), which refer to the difference between the BSP’s GIR and total short-term liabilities, also increased by $430 million $85.6 billion during the period, it said.

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