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MPIC still interested in MRT-3 O&M concession

THE Metro Pacific group said it remains interested in investing in the Metro Rail Transit Line 3 (MRT-3), after the government said earlier this month that it wants the private sector to come in for the operations and maintenance (O&M) of the train line.

Metro Pacific Investments Corp. (MPIC) Chairman Manuel V. Pangilinan told reporters last week the company still wants to be part of the Department of Transportation’s (DoTr) initiatives to improve the train system, noting its unsolicited proposal is “still there with the government.”

“I’m glad (Transportation) Secretary (Arthur P.) Tugade has mandated Sumitomo to start the rehab work for MRT-3. That’s much-needed. It’s a big step for Sec. Tugade,” he said, referring to the Japanese contractor tapped by the DoTr to rehabilitate the railway system.

Asked if the group remains keen to participate in the MRT-3’s eventual O&M, Mr. Pangilinan said, “Yes… We wait for their direction.”

MPIC, together with the Ayala Group and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., submitted in 2017 a P20-billion unsolicited proposal to take over the MRT-3 operations over a 30- to 32-year period.

The group was given original proponent status by the DoTr in 2017, after which the proposal was supposed to be turned over to the National Economic and Development Authority (NEDA) for further evaluation.

But progress was stalled at the DoTr level due to the government’s decision to tap Japanese contractors Sumitomo Corp. and Mitsubishi Heavy Industries, Ltd. (Sumitomo-MHI) for the rehabilitation of the MRT-3. The two parties signed the P16.985-billion, 43-month contract last year.

MPIC President and Chief Executive Officer Jose Ma. K. Lim said in January that the group may have to “reconfigure (its) proposal as an O&M” following the entry of Sumitomo-MHI.

Transportation Undersecretary for Railways Timothy John R. Batan said earlier this month that MPIC’s unsolicited proposal for the MRT-3 is still undergoing review, noting there are “legal issues” that need to be resolved first. He was referring to the ongoing arbitration case in Singapore between the Philippine government and MRT-3 contractor Metro Rail Transit Corp. over delayed equity rental payments.

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. — Denise A. Valdez

ICTSI Ecuador unit docks first 10,000-TEU capacity vessel

THE Ecuador subsidiary of International Container Terminal Services, Inc. (ICTSI) handled its first container vessel of 10,000-twenty foot equivalent unit (TEU) capacity at the Port of Guayaquil, ICTSI said

In a statement Tuesday, ICTSI said its Ecuador unit Contecon Guayaquil SA (CGSA) received on May 1 the 10,010-TEU neo-Panamax ship CMA CGM Cochin, to date the largest ship to dock in Ecuador.

“The vessel’s arrival highlights the importance of the recent dredging of the 95-kilometer main access channel leading to the country’s primary seaport. With deeper waters, the Port of Guayaquil is the first in Ecuador to accommodate ships of this size — elevating its status as a world-class port,” it said.

The City of Guayaquil tapped Luxemborg-based Jan De Nul Group last year for the dredging and maintenance of the port’s access channel. A deeper channel allows a port to receive larger container vessels.

“We congratulate and support the City of Guayaquil in its initiative to improve maritime access to the port. The dredging of the access channel paved the way for the arrival of these ships, which is something we look forward to as a huge boost to the local and national economy,” CGSA Chief Executive Officer José Antonio Contreras was quoted in the statement as saying.

ICTSI, through CGSA, was awarded the 20-year concession in 2007 to operate the container and multipurpose terminals at the Guayaquil. The port handles 85% of Ecuador’s imports and exports, and is a common gateway for trading banana, shrimp, fish, cocoa and wood.

The Razon-controlled port operator reported attributable net income gains of 77% in the first quarter to $72.4 million on the back of strong operating income and lower financing charges.

The company is setting capital expenditure at $380 million this year to expand its terminals in Manila, Mexico and Iraq and fund the acquisition of new equipment and maintenance works. — Denise A. Valdez

Japan minister does not expect trade war to trigger economic crisis

TOKYO — Japanese Finance Minister Taro Aso said on Tuesday the Sino-US trade war would not immediately trigger an economic shock on the scale of the “Lehman shock,” though the friction between the world’s two largest economies is unlikely to be resolved easily.

Mr. Aso said the Japanese government will lay the groundwork for a planned sales tax hike to be implemented barring a big economic shock like the collapse of Lehman Brothers about a decade ago.

Speaking to reporters after a cabinet meeting, Mr. Aso also said there’s no need to consider additional stimulus measures at the moment to ease the pain of the tax hike planned for October. — Reuters

China says has agreed with US to continue trade negotiations

BEIJING/WASHINGTON — China and the United States have agreed to keep talking about their trade dispute, the Chinese government said on Tuesday, as US President Donald Trump said he thought recent discussions in Beijing would be successful.

The slightly more optimistic comments came after both sides ramped up their trade war, with China announcing details of new tariffs against US imports on Monday, following the United States’ move last week to target Chinese imports.

The US Trade Representative’s office said it planned to hold a public hearing next month on the possibility of imposing duties of up to 25% on a further $300 billion worth of imports from China. Cellphones and laptops would be included in that list but pharmaceuticals would be excluded, the office said.

The prospect of global economy being derailed by the US and China sliding into a fiercer, more protracted dispute has rattled investors and led to a sharp sell-off on equities markets in the past week.

“My understanding is that China and the United States have agreed to continue pursuing relevant discussions. As for how they are pursued, I think that hinges upon further consultations between the two sides,” Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing, without giving details.

But China will not be bullied, he added.

“We hope that the US side does not misjudge the situation and not underestimate China’s determination and will to safeguard its interests.”

Sources have said talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.

Mr. Geng said China had shown sincerity by still sending a high level delegation to the US for talks last week and that China has remained calm in the face of pressure.

He put the blame on Washington for going back on its word in some previous rounds of talks, including last May, when the two reached an agreement in Washington but then the United States backed out a few days later.

“So you absolutely can’t put the hat on China of reversing positions and going back on one’s promises,” Mr. Geng said, adding China has shown goodwill in the talks and has kept its promises.

PROPAGANDA PUSH
The Shanghai Composite Index lost 0.7% and the blue chip CSI 300 was 0.6% lower on Tuesday. But both indexes rebounded from opening down 1%, supported by suspected state-backed purchases.

However, the onshore yuan weakened 0.1% to its lowest level since December 27, 2018, trading at 6.8874 per dollar, after the foreign ministry said it hopes the US does not underestimate its determination to defend its interests.

Chinese state media on Tuesday kept up a barrage of nationalistic commentary.

The ruling Communist Party’s official People’s Daily said in a commentary that the US needed to “give it a rest” with the complaints that it was losing out to China in the trade relationship.

China is not to blame of the huge trade deficit the US runs, and China is a hugely profitable market for US companies, the paper said, in commentary published under the pen name “Zhong Sheng,” meaning “voice of China.”

“US consumers, farmers, businesses and so on have become the victims of the trade frictions provoked by the United States. They are not victims of China’s ‘unfair competition.’”

Mr. Trump, who has embraced protectionism as part of an “America First” agenda, said he would talk to Mr. Xi at a G20 summit in late June.

“Maybe something will happen,” Mr. Trump said in remarks at the White House on Monday. “We’re going to be meeting, as you know, at the G20 in Japan and that’ll be, I think, probably a very fruitful meeting.”

Speaking several hours later at a dinner gathering at the White House, Mr. Trump said it should be clear in “three or four weeks” if a US trade delegation’s trip to Beijing two weeks ago was successful.

“I have a feeling it’s going to be very successful,” he said. — Reuters

The living spirit of our democracy

When I think of Filipinos who suffer from poverty, hunger, and inequality, the more I value my democratic duty to vote and have my will as a Filipino be counted thru the ballot. Free elections are the living spirit of all democracies. Clean and honest elections bestow the people’s trust to legitimately govern and serve the interest of the people.

We exercised this power when we went out to vote. No matter our status in life, every citizen has the same power to choose the leaders and the right to demand the highest levels of performance and integrity.

The vote I contributed last Monday is for the continuing fight for equal civil rights, justice, access to health, education, and jobs for every Filipino. As a taxpayer, I believe these social services and rights should be given to all Filipinos. It is important to remember that this country will only be strong if all children are provided with quality education and opportunities for a productive and prosperous life.

Democracy Watch challenges the newly elected officials of government to turn their advocacies and campaign promises into concrete actions, meaningful projects and developmental policy reforms that will spark positive change in our country. Let them be reminded that their mandate must be to serve the interest of the people and not the interest of their political sponsors.

Moving forward, the public must remain vigilant and attentive to the delivery of public service of the Duterte administration in the last half of his term, and of the newly elected officials especially on their advocacies. The responsibility and participation of civil society goes beyond elections and voting. We must hold our officials accountable for every government resource and every act in the execution of their duties. We must also hold them accountable for the power we have vested in them to yield only positive results that would benefit the country.

There is much room for improvement in our election process. Comelec must also be able to explain, extensively and openly, the delays that occurred during the unofficial tally. The public’s anticipation of the fast posting of election results was disrupted by technical issues. This unfortunate glitch has stirred valid concerns on the capacity of the mandated electoral body of the country.

Though elections were generally peaceful, there were still some incidents of electoral violence. On the other hand, the netizens of social media again played a critical role in promoting transparency as seen through the reports and updates of voters within their districts.

Democracy Watch is hopeful that despite delays in processing and issues experienced during elections, Comelec and its partner institutions would be able to resolve these issues at the soonest possible time.

Now that the 2019 elections are over, eyes will be turning toward 2022, a presidential election that may again shift the direction of the country. The next three years will require those elected to prove their worth as government leaders. But as is the case in any democracy, we as citizens must monitor the actions of government and demand change for the better because citizen participation does not end after voting.

Let us all continue to call for better governance and hold accountable all officials of the Republic.

 

Claudette Guevara is Deputy Executive Director for Programs of Stratbase ADR Institute and also Secretary-General of Democracy Watch Philippines.

Honoring those who stayed behind

I am writing this in Lourdes, France, the town of St. Bernadette to whom the Blessed Virgin Mary showed herself 18 times over a period of six months, from February to July, 1858. My wife and I are part of a pilgrimage to holy sites where Mother Mary appeared before young children to deliver messages to the world. Our trek began in Fatima in Portugal, stopped over in Madrid and Barcelona in Spain, and will culminate in Rome, with a visit to the Vatican and, hopefully, an audience with Pope Francis.

Nearly all of the 43 people in the group are Filipino-Americans from the San Francisco Bay Area, mostly from St. Joseph church in Pinole and St. Anne parish in Union City. The organizer of the pilgrimage is Fr. Geoffrey Baraan, pastor of St. Joseph and formerly of St. Anne.

The FilAms are all accomplished individuals, mostly retirees, who chose to build their lives and seek their fortunes in America. Fr. Baraan himself finished his priestly studies in the US, in spite of belonging to a prominent family in Pangasinan (two brothers, Francisco III and Rafael, were former Justice Undersecretary and Provincial Administrator, respectively). Not surprisingly, they attribute their success in life to having sought it overseas, instead of in the Philippines.

In the course of earlier trips to Europe and around the US, I have met similarly successful Filipinos who believe that they would not have “made it” if they had remained in the land of their birth.

In fact, it was to acknowledge the achievements of these fellow Pinoys that I conceived and persuaded GMA Network to sponsor the Alex Esclamado Memorial Awards for Community Service. The late Alex Esclamado was himself a high achiever in America. Among many honors, he was a recipient of the Philippine Legion of Honor, conferred by President Corazon Aquino for his courageous campaign against the Marcos dictatorship, as publisher-editor of Philippine News, a nationally circulated FilAm newspaper.

Several years ago, I met in San Francisco some remarkable alumni of the University of Santo Tomas. It was one of those occasions when I regretted having prematurely and unceremoniously left UST in my youth.

Despite my meager academic credentials, I had been invited to the annual reception and awards presentation of the Thomasians USA, an association of UST alumni residing in Northern California, because they needed a co-emcee for ABC TV anchor, Sydnie Kohara.

I had the good fortune of being seated with two of the evening’s awardees. Their credentials and those of the third honoree were truly impressive.

Dr. Jesus C. Bacala’s curriculum vitae read like that of five people combined: doctor of medicine, registered nurse, obstetrician, gynecologist, medical professor, dean of the UST College of Nursing, newspaper columnist, editor, poet, author of several nursing textbooks, soldier and lay minister.

A resident of Indiana, he had helped found the American College of International Physicians, the Indiana Philippine Medical Association, the Philippine Heritage Association and the Philippine American Society of Indiana and Kentucky.

The second awardee was Dr. Lupo T. Carlota whose book, Quantum Theory of Acupuncture, laid the scientific basis for the practice of the centuries-old art of healing. The book earned him the honor of an invitation to lecture in Beijing, Nanjing, Shanghai and in Taipei at the annual convention of the International Acupuncture Society.

Dr. Carlota was the founder and president of the Medical Acupuncture Research Institute of America (MARIA), which provided physicians across the US with advanced training in acupuncture and the application of his Meridian Regulatory Acupuncture (MRA) system of therapy, as well as the use of a digital precision instrument that he had invented.

He had graduated Meritissimus from the UST College of Medicine and, at the time of the awards, was president of the Association of Philippine Physicians in America and the American Board of Acupuncture Medicine.

Several years later, at the start of the incumbency of President George W. Bush, Dr. Carlota was appointed to the president’s commission on Asian American affairs. He had also been elected, at one time, to the city council of Lakeland, Tennessee where he and his family resided.

The third awardee was Dr. Cecilia M. Loleng, a full colonel in the US Army and a member of its medical training staff. She was one of the highest-ranking Filipinos in the American armed forces and had received three Army Commendation Medals and a Meritorious Service Medal.

Dr. Loleng was a graduate of Class ’63, UST College of Medicine, and was married to Dr. Gregorio Loleng, also a Thomasian.

As I conversed with Dr. Bacala and Dr. Carlota, I felt proud of their achievements in the US mainstream, but sad that the Philippines had to lose such brilliant people to America.

However, I could understand why they left. My own elder sister, Dr. Evangeline Garcia, herself a UST medical graduate, had found it necessary to immigrate to the US in the late 1960s. I guess, she felt that her medical practice would not flourish in the Philippines. Like Dr. Loleng, she was also an officer in the US armed forces. She would later retire as an Air Force lieutenant colonel.

On the other hand, I had a younger brother who was also a doctor and a graduate of the US College of Medicine. Vicente had never felt the need to leave the Philippines. As a matter of fact, upon passing the medical board exams in Manila, he decided to go home to Leyte to work as a rural doctor.

I think he, too, would have flourished overseas. He had many opportunities to pull up his roots, having worked with the World Health Organization on primary health care and having participated in several medical conferences abroad as a resource speaker. But he preferred to stick to his low-paying job as an assistant provincial health officer in Biliran, Leyte.

Every time I asked him about any plans to move to the US, where I had already taken up residence, he had one simple reply: “They have enough doctors in America. This is where I’m needed.”

Vicente died in his mid-40s, while still working as a rural doctor. He would not have it any other way.

Today, as an overseas Filipino, enjoying the fruits of my labors in a foreign land and seeing many of our countrymen honored for their achievements abroad, I cannot help thinking of my younger brother.

I also cannot help wondering why we often forget to honor those who have chosen to stay behind.

 

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

Developments in the Philippine Competition Commission’s enforcement activities

Early this year, the Philippine Competition Commission (PCC) Enforcement Office launched a leniency/whistleblower program offering immunity from suit and reduction of fines to cartel members who will provide information that will help the PCC investigate and prosecute cartels. This forms part of the PCC’s increased efforts in cracking down on anti-competitive agreements and conduct.

The Philippine Competition Act (PCA) prohibits anti-competitive agreements such as price-fixing and bid-rigging, and other agreements which have the object or effect of substantially preventing, restricting, or lessening competition. It also prohibits an entity/entities from abusing its dominant position by engaging in conduct that would substantially and negatively affect competition. Companies face up to Php 250 million in fines if found guilty of these acts.

Businesses were given a period of two years from the effectivity of the law to reorganize their business structure or to renegotiate agreements in order to comply with provisions of the PCA. Ever since the transitory period ended on August 8, 2017, the PCC has been more aggressive in its enforcement activities.

Some of the industries that have been subject of probes from the PCC include the garlic industry, international shipping lines (specifically, the imposition of unnecessary shipping charges on shippers), and the cement industry. More recently, the PCC has expressed its intention to look into an alleged cold storage cartel in the onion industry, and to probe whether recent power plant outages are an intentional scheme among power suppliers to raise electricity prices. It is also investigating allegations of bid rigging involving a government project awarded in 2017.

In 2018, the Enforcement Office opened 11 preliminary inquiries, nine of which ripened into full administrative investigations. Two of those full administrative investigations have been closed. One of the closed investigations involved the Philippine Academy of Ophthalmology, Inc. (PAO) and Philippine Health Insurance Corporation (PhilHealth). The PAO’s Mission Guidelines requires ophthalmologists to first obtain permission from the PAO or the local ophthalmologist of an area before they can conduct a medical mission in the area. Philhealth will not compensate the ophthalmologists conducting the medical mission if such permission is not obtained from the PAO or the local ophthalmologist of the area. The Enforcement Office raised competition concerns regarding the foregoing practice because by requiring visiting groups to get permission from PAO/the local ophthalmologists before they can conduct a medical mission, the PAO effectively imposed a barrier to entry, effectively limited competition, and facilitated the division of practice territory. However, despite such competition concerns, the investigation was closed as the parties were able to rectify the foregoing acts within the transitory period.

The other closed investigation involved the vessel fumigation business. The unnamed complainant alleged that certain inspection companies were engaged in irregular post-fumigation inspection to undermine the business reputation of the complainant, and that a major fumigation company was involved in the scheme. The Enforcement Office did not find any evidence which supported collusion among the inspectors. The Enforcement Office also noted that the major fumigation company allegedly involved in the scheme did not have sufficient market power to be considered as dominant in the vessel fumigation market. They also noted that there were many players in the vessel fumigation market, and that barriers to entry into the business were generally low. Further, customers can easily switch between fumigators without incurring any significant additional cost (i.e. switching costs were low).

Recently, the Enforcement Office filed a case against a mass housing developer for imposing an exclusive internet service tie-up on its tenants, preventing them from availing themselves of the services of other internet service providers. Aside from preventing other providers from installing fixed-line internet on units, the developer also prevented other providers from marketing to the condominium residents. It marks the first time the Enforcement Office has filed a case for abuse of dominant position under the PCA. It will be interesting to see how the case will turn out as it will set the standard of how similar cases will be prosecuted in the future.

Competition law is a relatively new concept in the Philippines, hence many businesses may not even be aware that they are engaging in activities or are parties to agreements that may be considered as anti-competitive. They may be engaged in agreements or conduct which may have been permitted before, but which must now be reevaluated in light of the PCA and the expiration of the two year transitory period. This is why it is important for practitioners to remain abreast of developments in this emerging field, so that they can effectively guide businesses in complying with the provisions of the PCA.

As the PCC increasingly expands its capabilities in investigating and prosecuting anti-competitive agreements and conduct, businesses and competition law practitioners must keep up.

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

 

Korina Ana T. Manibog is an Associate of the Corporate and Special Projects Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

ktmanibog@accralaw.com

(632) 830-8000

Senatorial elections and economic legislation

Kuala Lumpur — During the May 2018 Malaysian elections between former PM Najib and returning PM Mahathir, the latter was an underdog, he promised that if he wins, he would abolish the gross sales tax (GST) of 6%. He won, he did what he promised, and GST went down from 6% in May to zero in June. Result was drastic, across the board price declines and inflation rate went down from 1.8% in May to only 0.8% in June 2018. The average inflation January-May 2018 of 1.7% became 0.6% in June-October 2018.

This is the kind of real inflation-busting policy reforms we wish to see in the Philippines. Last year, 2018, we had the highest inflation rate at 5.2% in East Asia. Second and third highest were Vietnam (3.5% )and Indonesia (3.2%). Malaysia had only 1.0%. Year-to-date 2019, the Philippines still has the highest in East Asia with 3.6% while Malaysia has -0.3%.

Now the 2019 senatorial elections has produced unofficial results and the top 12 so far are Cynthia Villar, Grace Poe, Bong Go, Pia Cayetano, Bato dela Rosa, Sonny Angara, Lito Lapid, Imee Marcos, Francis Tolentino, Koko Pimentel, Nancy Binay, and JV Ejercito.

Just outside the Top 12, as of this writing, is opposition reelectionist Senator Bam Aquino, who is opposed to oil tax hikes under the TRAIN law of 2017, the main cause of inflation spikes in the country. And he may lose.

This means that an important policy alternative to reducing inflation — reverting the VAT from 12% (the highest in East Asia) to 10%, even 8%, in exchange for drastic reduction in exempted sectors — may not be entertained.

The top two senators, Cynthia Villar and Grace Poe, would remain to be good in economic legislation. Senator Villar headed the enactment of the Rice Tariffication Law (RA 11203) while Senator Poe will help enact an amendment to the Public Service Act (PSA), an 87-year-old legal dinosaur that restricts competition from foreign players in five sectors including telecoms and transportation (land, sea, air). We need this kind of economic liberalization that will help reduce inflation and expand mobility of goods and people/services across the country, across the globe.

Philippine Congress 2016 to 2019 has produced plenty of local laws. In particular, from March to April 12, 2019, Congress passed 38 new laws, only 7 of which are of national application (18%) while 31 are local or franchise laws. Some 14 laws are not shown or missing in both the Senate and House of Representatives list.

From the perspective of tax-conscious and regulations-wary citizens, three of the seven may be good laws — 11234, 11239, and 11261. The other four are either neutral or would mean more bureaucracies, like 11235.

We hope to see a new set of senators and representatives who are aware of the defects of high taxes, economic nationalism and restrictions. In the process, they will pass legislation that can substantially reduce inflation and interest rates, and propel more economic growth and job creation.

New Republic Acts (RA) of national significance, March-April 2019

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com

Peso at one-month low on US-China trade war

THE PESO plunged to a one-month low against the dollar on Tuesday due to China’s retaliation against the United States’ imposition of increased tariffs on Chinese goods.

The local unit closed Tuesday’s session at P52.435 versus the greenback, down 31.5 centavos from the P52.12-per-dollar finish last Friday.

This was the peso’s weakest showing in more than a month or since it closed at P52.44 per dollar on April 2.

The peso opened the session weaker at P52.37 per dollar, sliding to as low as P52.45. On the other hand, its best showing stood at P52.345 versus the US currency.

Dollars traded dropped to $881.1 million from the $1.001 billion that changed hands the previous session.

Foreign exchange traders said yesterday that the peso plunged versus the greenback due to renewed trade tensions between the US and China.

Chinese Finance Ministry said on Monday that Beijing is set to raise tariffs on $60 billion worth of American goods by June 1, a retaliatory measure for Washington’s increased levies on $200 billion in Chinese goods to 25% from the previous 10%.

US President Donald J. Trump said he had not decided on imposing the 25% tariff on the remaining $325 billion worth of Chinese imports.

Despite deepening US-China trade tensions, Mr. Trump confirmed he will meet his Chinese counterpart Xi Jinping next month during the G20 summit in Japan.

“Mainly, the dollar-peso is still driven by risk-off sentiment, which was also present in our local equity market given that it’s down by 1.23%,” a trader said in a phone interview, adding that the risk aversion among market players is seen across the Asian markets.

Another trader said apart from the trade tensions between the world’s two largest economies, the risk-off sentiment also stemmed from the anticipation of a possible cut in big banks’ reserve requirement ratio (RRR) on Thursday at the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board’s meeting.

Currently, commercial and universal banks are required to keep at least 18% of their deposits with the BSP.

Trimming the RRR by a percentage point is expected to unleash about P90 billion into the financial system.

For today, the first trader expects the peso to move between P52.35 and P52.65, while the other gave a P52.25-P52.55 range. — Karl Angelo N. Vidal

Shares plunge as China hikes tariffs on US goods

By Arra B. Francia, Senior Reporter

SHARES PLUNGED on Tuesday after China’s tariff hike retaliation against the United States, alongside impacts of the MSCI rebalancing.

The bellwether Philippine Stock Exchange index (PSEi) fell 1.23% or 95.54 points to close at 7,646.66 yesterday. The broader all-shares index likewise slumped 1.14% or 54.72 points to 4,736.54.

“This selloff was triggered by China’s retaliation to the tariff hike that was imposed by the US last week,” Timson Securities, Inc. Equity Trader Jervin S. de Celis said in a mobile phone message.

China said it will raise tariffs up to 25% on $60 billion worth of US goods starting June 1, after Chinese Foreign Ministry Spokesman Geng Shuang was quoted as saying that China will “never surrender to external pressure.”

The tariff hike came less than a week after US President Donald J. Trump more than doubled tariffs to 25% on $200 billion worth of Chinese goods as he cited the slow negotiations with Beijing.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan also attributed the market’s volatility to latest developments in the US-China trade war.

“With the midterm elections now out of the way, most fund managers looked overseas, where most of the major market making activity was happening,” Mr. Limlingan said in a mobile phone message.

“Coinciding with this (China’s retaliation) is the MSCI quarterly review announcement which will take effect on June 3,” Timson Securities’ Mr. De Celis added.

MSCI trimmed the index weight of some local firms, including SM Prime Holdings, Inc. (0.17%), Ayala Land, Inc. (0.15%), BDO Unibank, Inc. (0.12%), SM Investments Corp. (0.10%), and JG Summit Holdings, Inc. (0.08%).

On the other hand, MSCI increased the weight of Ayala Corp. by 0.82% and International Container Terminal Services, Inc. by 0.36%.

“Given the negative development in the Sino-US trade war, the changes in weight of these stocks exacerbated the movement especially during the morning session,” Mr. De Celis said.

Four sectoral indices moved to negative territory, led by financials which plummeted 3.04% or 52.95 points to 1,685.88. Holding firms went down by 2.3% or 169.53 points to 7,176.38; industrials dropped 0.71% or 82.49 points to 11,445.83, while services slipped 0.02% or 0.4 point to 1,595.17. In contrast, mining and oil jumped 1.18% or 86.81 points to 7,412.09, and property rose 0.94% or 38.81 points to 4,156.81.

Turnover improved to P11.95 billion after some 919.79 million issues switched hands, higher than Friday’s P7.55 billion.

Net foreign outflows doubled to P1.46 billion, compared to the previous session’s P688.25 million.

Decliners were more than double the advancers, 140 to 57, while 37 names were unchanged.

Dynasts fall in parts of NCR

DYNASTS were toppled in parts of the National Capital Region, according to results of the local race in this year’s midterm elections.

Former vice-mayor and basketball player Francis Zamora’s mayoral candidacy served to end the Estrada family’s decades-long dominance in San Juan City with 35,060 votes as against the 24,813 votes of Janella Estrada, the daughter of senatorial candidate Jinggoy E. Estrada. Mr. Estrada himself is trailing behind in the senatorial race at the 15th slot as of this reporting.

Three members of the Ejercito-Estrada family have led the city in the past. Former president Joseph E. Estrada ruled San Juan mayor from 1969 to 1986, while his son and reelectionist Senator JV Ejercito held the position for three consecutive terms from 2001 to 2010. He was succeeded by his mother Guia G. Gomez.

Mr. Zamora ran under the ruling PDP-Laban. His father Ronaldo won the congressional seat of the lone district of San Juan.

Just like his granddaughter, the elder Mr. Estrada failed in his reelection bid in Manila to that city’s vice-mayor, Francisco “Isko” Moreno Domagoso, who took the lead in the mayoral race with 354,327 votes over Mr. Estrada’s 210,407 votes.

Pasig City will also have a new mayor in city councilor Vico Sotto, nephew of Senate President Vicente Sotto III and son of comedian and songwriter Vic Sotto. The younger Mr. Sotto won by 206,226 votes against the 119,726 votes of incumbent Mayor Robert Eusebio, whose family ruled the city for 27 years.

On the other hand, Makati City will still be led by its incumbent mayor Abigail Binay-Campos, who got 179,522 votes as against the 98,653 votes of her brother, former mayor Jejomar “Junjun” S. Binay Jr.

The family’s patriarch and longtime mayor, former vice-president Jejomar C. Binay, had an unprecedented defeat in his congressional bid in Makati’s first district, with rival Romulo “Kid” Peña securing 71,035 votes as against his 65,229 votes.

The Cayetano family of Taguig is poised to keep its hold on the city with three members leading the race in different posts.

Former Foreign Affairs Secretary Alan Peter S. Cayetano and his wife incumbent Taguig Mayor Maria Laarni “Lani” L. Cayetano are leading the city’s congressional elections in the first and second district.

Alan Peter’s brother Lino S. Cayetano is leading in Taguig’s mayoral race. — Vince Angelo C. Ferreras

Canvassing of votes begins

By Gillian M. Cortez, Reporter

THE National Board of Canvassers (NBoC) convened on Tuesday, canvassing the first few certificate of canvass (CoC) from the midterm elections held Monday.

The CoCs, including from abroad, canvassed as of this reporting Tuesday late afternoon are from Mandaluyong (4th District), Las Piñas, Lapu-Lapu City in Cebu, Athens (Greece), Makati (4th District), Singapore, Camiguin, Marinduque, Agusan Del Norte, Sorsogon, Ilocos Norte, Bahrain, Muntinlupa, Southern Leyte, and Iligan City in Lanao del Norte.

Sitting on the NBoC board are Commission on Elections (Comelec) chairman Sheriff A. Abas and the poll body’s commissioners Al A. Parreño, Luie Tito F. Guia, Ma. Rowena Amelia V. Guanzon, Socorro B. Inting, Marlon S. Casquejo and Antonio T. Kho Jr.

Comelec on Tuesday said it is also mulling over charges against the developers of the Automated Election System (AES). “We’re reviewing with the law department…Let’s see if there are possible violations of contract,” Mr. Abas said, in connection with errors in the transparency server Monday night.

Mr. Casquejo also noted that the vote-counting machines (VCMs) used were the same ones used in the 2016 elections.

Smartmatic-TIM supplied the VCMs while S1 Technologies Incorporated provided the SD cards.

As of Tuesday morning, 961 VCMs are 961 out of more than 85,000 were reported defective; and 1,665 SD Cards out of a total 55,769 were also reported defective.

Mr. Abas still called the midterm elections “successful,” amid reports of malfunctioning VCMs as well as vote-buying.

“Wala kaming failure of election na natanggap….For us, isang magandang milestone ‘yun (We have no reports of failure of election [from any area]…For us, that is a good milestone),” he said at a press conference on Tuesday.

PPCRV BEGINS MANUAL ENCODING
For its part, election watchdog Parish Pastoral Council for Responsible Voting (PPCRV) on Tuesday began the manual encoding of election returns (ER) for the parallel counting of votes.

PPCRV Board Member Arwin A. Serrano said they have received around 8,000 election returns as of late Tuesday afternoon, most of these from Metro Manila and parts of Cavite.

He also said the ERs from other parts of Luzon, Visayas and Mindanao will have to be carried to their office via air transportation.

“Today, siguro lalagpas na tayo ng two-digit, baka ano na ‘yan 12,000 to 15,000 bago matapos ang araw na ‘to. Tomorrow we’re expecting mga 50% or more,” Mr. Serrano told reporters. (Today, maybe we can get past two digits, with around 12,000 to 15,000 (election returns) before the day ends. Tomorrow we’re expecting more than 50% or more).

PPCRV, which has some 300 volunteers, is tasked to encode copies of election returns they received and validate these results from the transparency server.

The National Citizen’s Movement for Free Elections (NAMFREL), for its part, said Tuesday it ruled out the possibility of hacking due to the delay in the transmission of unofficial election results over problems in the Comelec’s transparency server.

“There’s a big possibility that there was no hacking and the reason for that, when they started debugging, they know where to check, they know where to fix it,” Fernando “JR” Contreras Jr. of NAMFREL’s System Committee, said in a briefing on Tuesday.

“If you look at the timing, it was relatively quick, however, the negligence in testing is a different issue.”

The remarks followed a 7-hour delay in the transmission of election results to election watchdogs and media outlets. Operations were resumed at past 1:00 a.m., Tuesday.

“What can be done by the public to make sure the integrity of the election remains? One thing we can do, there are 30 copies printed per VCM, if any group has a copy of that they can verify it right now with the publicly available data,” Mr. Contreras said.

NAMFREL Secretary General Eric Jude O. Alvia suggested cross-checking the precincts with the election returns.

“There’s still the RMA (Random Manual Audit), I think the public has to look into those limited 715 precincts and just cross-check with the transmitted election returns,” he said.

“Another is that what we’re trying to do here in NAMFREL is that whatever VCMs that have been flagged and identified by us that were failing would be tracked for transmission points. We want to make sure that whatever vote that was cast in the precincts were processed and transmitted.”

The Philippine National Police (PNP), in its update Tuesday morning, said it has monitored a total of 225 incidents of vote-buying and arrested 441 violators. and eight rescued minors.

“Una, automated na kasi ang election natin (Our election is already automated). Seemingly, sabi nga ng Comelec, ‘yung mga VCMs natin ay incorruptible, hindi mo kaya i-manipulate (Seemingly, Comelec said that our VCMs are incorruptible, you cannot manipulate it. So the tendency ng mga kumakandidato (of the candidates) is they go directly to the voters,” said PNP chief Gen. Oscar D. Albayalde in a press briefing on Tuesday. — with Vann Marlo M. Villegas, Charmaine A. Tadalan, and Vince Angelo C. Ferreras

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