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Myth: a religious sect’s endorsement assures election

On April 30, I wrote in this space that a religious sect endorses only the candidates who the polls show to be likely winners. By so doing, it sustains the myth that its endorsement assures victory.

Four days later, Mike Velarde, leader of the Catholic charismatic group El Shaddai, endorsed the candidacies of 14 senatorial candidates. Except for Sen. Bam Aquino and Dr. Willie Ong, all the Velarde-endorsed senatorial candidates were projected by Pulse Asia’s surveys to be the 12 winning senatorial candidates. One cannot but conclude that the choice of candidates was based on the results of surveys as the stands of many of the candidates are inconsistent with Catholic doctrines.

The Catholic Church waged a vigorous and relentless campaign against the passage of the Reproductive Health bill into law. Yet, among the candidates endorsed by El Shaddai leader Velarde was the champion of the RH bill in the Senate. The Church condemns the extra-judicial killings of drug traders and users, yet among those preferred by the Catholic group’s head was the former field commander of the forces behind the EJK. The Church is against the death penalty, yet two El Shaddai-backed candidates want the death penalty imposed again.

The Catholic bishops exhorted their faithful not to vote for those who have been accused of plunder. Velarde endorsed two former senators accused of that crime, while another belongs to a family notorious for political persecution and massive graft and corruption.

Friends told me I was wrong in calling El Shaddai a religious sect when it is a group within the Catholic Church. But it is not the El Shaddai charismatic group I referred to in my column as the religious sect that endorses only candidates that the polls show to be probable winners, although I consider El Shaddai by its rites, practices, and pronouncements — such as its endorsement of certain candidates referred to above — a religious sect, not a Catholic group.

I was referring in my column to a religious sect, while Christian is not Catholic. In fact, its disdain for Catholic beliefs, rites, and practices has long been manifest.

It is said that the sect’s support has been sought from the time of President Manuel L. Quezon. It is well known that politicians court the goodwill of the executive minister of the religious sect all year round and come election time candidates for national positions ask for his endorsement. That is because its members all vote for the candidates endorsed by the executive minister.

President Ferdinand Marcos nurtured the sect’s influence during his administration into a powerful political force so it could serve as his foil against the Catholic Church which was becoming more critical of him as his rule became more oppressive. He appointed a prominent member of the sect to the Supreme Court. He awarded the contract to supply the large-scale requirements of a major government agency to a company two of whose incorporators were prominent members of the sect.

It stood by Marcos when the people’s call for his ouster got louder and louder. It directed its members to vote for Marcos in the Snap Election of 1986. When the people roundly repudiated Marcos, the sect’s position of influence became tenuous. In the 1992 presidential election it endorsed Eduardo Cojuangco Jr. Once again, its presidential bet was soundly beaten, its political influence diminished markedly.

The sect learned its bitter lesson. Never again would it gamble on a candidate who has not been projected by the polls as the eventual winner. Thus, in 1998 it endorsed Joseph Estrada for president months before the elections. This in spite of the fact that Estrada’s private life is the antithesis to the teachings of the religious sect. Adulterous relationships, gambling of any kind, and excessive drinking are prohibited by the sect. Members found guilty of transgression of those rules are either suspended or expelled.

Estrada has been known to have sired children with several women. He frequented the casinos. His drinking sprees with his close friends were said to be nocturnal occurrences. But the sect endorsed Estrada just the same because the Social Weather Stations (Pulse Asia was not yet in existence then) consistently projected Estrada as the overwhelming preference of the voters.

In 2004 it delayed its endorsement of Gloria Arroyo until the last week of the campaign period when she emerged as being ahead of Fernando Poe, Jr, the rumored preference of the sect, by a wide margin. In 2010, it switched from Senator Manuel Villar to Senator Noynoy Aquino five days before Election Day, when Aquino had dislodged Villar from the top rank of the polls as Election Day neared.

After a long wait for its endorsement, it finally announced last Friday which 12 senatorial candidates it is endorsing. Nine of them are in the senatorial slate Davao City mayor Sara Duterte-Carpio’s Hugpong ng Pagbabago (HNP), two from the Nationalist People’s Coalition, and one independent. It did not endorse any candidate from the “Otso Diretso” ticket nor the other son of Estrada. All those endorsed by the sect are among those who occupied the top 12 spots in the surveys conducted by Pulse Asia this year.

It appears that that is how it chooses the candidate it will ask its faithful to vote for. It chooses a candidate not on the basis of any moral or political standard but on who the polls show to be the most likely winner. That is why it has given the less discerning traditional politicians the impression that its bloc vote is the deciding factor in the success of a candidate’s quest for an elective position.

I say, therefore, the sect’s endorsement as the deciding factor is only a myth created by the sect itself. The candidates it endorsed in recent elections would have won just the same, with or without its endorsement, as they are really the people’s choice as the surveys projected.

That is why I say political surveys have become dysfunctional as they are used by politicians to create a bandwagon effect. In the early years of election surveys in the Philippines, results of surveys were released to the public only after the polling places had closed, preventing the creation of a bandwagon effect. That is how it should be. But it is folly to expect the survey companies to stop their practice of releasing to the public the results of their election surveys. Their election forecasts promote their wares and their organizations, thus generating revenue for them.

 

Oscar P. Lagman, Jr. is a member of Manindigan! a cause-oriented group of businessmen, professionals, and academics.

oplagman@yahoo.com

120 years of the Spanish Chamber of Commerce

Last week, the Spanish Chamber of Commerce of the Philippines celebrated its 120th anniversary. La Camara, as the organization is fondly called, predates all other business groups in the country including the Filipino-Chinese Chamber of Commerce, the American Chamber of Commerce and even the Rotary Club. It was the first Spanish chamber to be established in Asia.

La Camara was founded in 1898 and was originally called the Manila Chamber of Commerce. It was set up to preserve the interest of Spanish enterprises following the release of the country from the colonial administration of Spain. It will be recalled that Spanish-owned companies controlled the most important industries of the era including public utilities, shipping, food and beverage manufacturing, the tobacco trade and the sugar trade. It was vital not to disrupt these industries so as not to destabilize the economy.

In 1989, the name of the organization was changed to the Spanish Chamber of Commerce of the Philippines and was housed in Casa España in the financial district of Binondo. Early records dated 1917 show that La Camara’s members were composed of the business elite of the time. Among them were Luis Llanso who was President, Santiago Elizalde, Juan Camahort and Anicieto Ruiz.

From its founding up to the Pacific War, La Camara was noted for its quarterly bulletin called El Boletin Oficial. It was among the few publications that provided in-depth analysis of the economy and of various industries, opinions on public policy and recommendations on how to improve the country’s business climate. Back then, La Camara had a strong sway over commercial legislation and public policy. It could be said that La Camara played an important role in the Philippines’ ascent towards becoming the second most advanced economy in Asia from the ’30s to the ’60s.

The second world war interrupted La Camara’s operations and the organization remained virtually inactive during the Japanese occupation. After the Philippines gained its independence in 1946, however, La Camara was reincorporated upon the initiative of Tabacalera & Co., Ayala Corporation, Elizalde y Cia, Roxas y Cia., San Miguel Corporation and Philippine Airlines, which was then controlled by Andres Soriano.

In October 1951, President Elpidio Quirino visited Spain to mark the reestablishment of Filipino-Spanish diplomatic relations. The Philippine Chief Executive was welcomed by the Spanish government with full diplomatic honors and regale. The fact that the Philippine economy was growing at double digit rates following the war reconstruction efforts and that companies of Spanish origin were predominant in the business scene bolstered Quirino’s profile and that of the Philippines. It was a proud moment for the country.

From the ’50s to ’90s, El Boletin Oficial continued but with decreasing gravitas. Publication eventually ceased in 1998. Since then, La Camara’s efforts have been focused on developing commercial relations between the Philippines and Spain, forwarding the interest of companies of Spanish origin, data banking and paving the way for Spanish investors into the Philippines.

While La Camara has kept a relatively low profile in the last few years, its importance in the business scene cannot be denied. Its members are still among the elite of the business community, albeit now considered Filipino (although still of Spanish origin). Among them are Aboitiz Equity Ventures, the Ayala Group, Roxaco and Elro Corporation of the Elizaldes, Tabacalera de Filipinas, Rayomar, Fundador, the MFT Group, DM Wenceslao and Associates, Solid Cement and Lhuillier & Co., among many others.

These days, the real contribution of La Camara to the country lies in facilitating the entry Spanish investors. The number of Spanish companies operating in the Philippines is on an all-time high and they include technology behemoths Indra and Amadeus; energy giant Gamesa Eolica; engineering firms Acciona, Inclam S.A, and Alsina; financial services providers Mapfre Insular and Ibero Asistencia; healthcare provider Sanitas S.A.. The influx of Spanish companies is due to the many opportunities brought about by governments Build Build Build program, a growing middle class and vibrant consumer demand.

CURIOUS FACTS
Those born before 1975 will still remember how our American textbooks vilified everything of Spanish origin and romanticize everything that is American. I was one of them. Now I recognize that it was all part of an insidious campaign to Americanize the Filipino people.

This is why most Filipinos belonging to older generations still associate Spain with the abuses of the friars, plundering of our natural resources and perpetuating an inefficient governmental system where the church and state were one and the same. We were made to resent the Spanish way of life and scoffed at such traditions as the afternoon siesta and monthly religious fiestas.

Meanwhile, the American way of life was romanticized. Through the Hollywood propaganda machine, glamour and the hedonistic lifestyle were made sexy while chastity and piousness were made out-of-date. From singing Ave Maria, the Filipinos were made to boogie to the tunes of Glen Miller. Worse, we were made fans of all products of American origin

We know better now and recognize how the United States has indoctrinated the Filipino to forward its own agenda. While the allegations of Spanish abuses may be true in isolated cases, it does not tell the full story. What the American never told us was that Spain actually set us up to be a modern republic.

Unbeknownst to many, it was Spain that unified the archipelago from one composed of several fiefdoms into a united country, duly governed by a central government. It introduced civil, criminal, administrative, labor and corporate laws based on the roman template. It established the country’s financial system including the use of notes, taxes and the banking system. It built roads, bridges, city gates, water reservoirs and sewer systems to enable local societies to thrive. It established the country’s educational system and the first university.

All these were colonial contributions that the Americans conveniently relegated as a mere footnote in our history.

Lesser spoken of is the fact that as early as the 15th century, the Philippines would have been a Japanese colony if not for Spanish intervention.

Records show that in the year 1573, the Japanese were already trading gold and silver with the inhabitants of Pangasinan, Cagayan and Manila. In 1580, the leader of the Japanese flotilla forced the natives of Cagayan to give Japan their fidelity and submission. They used violence through iron weapons to coerce the natives into submission. The Japanese established a stronghold in Cagayan and embarked on a series of bloody raids of surrounding territories within the island of Luzon. Slowly but surely, the Japanese were taking political control of the island.

The Spanish governor-general at the time was Gonzalo Ronquillo Peñalosa. With permission from King Philip II, the Spanish navy, led by Juan Pablo de Carrion was ordered to launch an attack against the Japanese forces, first in the West Philippine Sea and then in the Cagayan River. Forty Spaniards in five vessels battled close to 400 Japanese troops led by Tay Fusa, a Japanese feudal lord, who came with 19 ships. Despite the overwhelming number of Japanese, their katanas and muskets proved no match to Spanish cannons.

The Japanese attempted to surrender on the condition that they be recompensed with gold fort their losses. Carrion refused and ordered them to leave Luzon. The Japanese waged two separate attacks after that. They were defeated by the Spaniards in both instances.

Luzon was pacified and Japanese looting ceased. To commemorate Spanish-Philippine victory, the city of Nueva Segovia was established in Cagayan. Today, it is known as Lal-lo in the Cagayan Administrative Region.

Persistent, Japanese chieftain Toyotomi Hideyoshi demanded on several occasions in 1590 that the people of Philippines surrender to the Japanese flag. Their efforts were blunted by the Spaniards on each occasion. The Japanese ceased from invading Philippine territories as the Spaniards were faithful in protecting the Philippines.

Another fact not mentioned in American textbooks is that the Philippines would have been a full Muslim nation if not for Spanish intervention.

Islam first came to Southeast Asia by way of Muslim traders from the Middle East, Turkey and Armenia in the 9th century. By the 12th century, the Sufi order waged a massive conversion campaign of Southeast Asia beginning with Northern Sumatra and Melecca. Eventually, both cities became the nerve center of the Muslim movement.

By the year 1380, the Muslim movement spread to the Philippines via Brunei and Borneo, first in the island of Sulu, and then in southwestern Mindanao. The conversion of the Visayas and parts of Luzon was gaining momentum if not quelled by the Spaniards who perpetuated Christianity.

As we celebrate La Camara’s 120th year, of which I am a proud member, I hope we could all objectively appreciate what Spain has contributed to the Philippines.

The future is bright for both nations. If the projections of Pricewaterhouse Coopers, Goldman Sachs and HSBC are to be believed, the Philippines is poised to be the 19th largest economy in the world by the year 2050 and Spain the 26th (the 5th largest in the EU). It serves our best interest to cooperate, collaborate and conspire for mutual benefit. After all, that is what close friends do.

 

Andrew J. Masigan is an economist

Recommendations on qualification, disqualifications, and competence of directors under the CG Code for PLCs

The CG Code for Publicly-Listed Companies (PLCs) through its “adopt or explain approach,” is able to avoid all the legal obstacles that may be found in the Board-enabling clauses of the original and Revised CG Codes, by adopting a formal Principle 1 for “Establishing a Competent Board,” thus:

Principle 1:

The company should be headed by a competent, working Board to foster the long-term success of the corporation, and to sustain its competitiveness and profitability in a manner consistent with its corporate objectives and the long-term best interests of its shareholders and other stakeholders.

and then provides for a set of recommended structures that seek to ensure Board competence and independence, thus:

Recommendation 1.1

The Board should be composed of directors with a collective working knowledge, experience or expertise that is relevant to the company’s industry/sector. The Board should always ensure that it has an appropriate mix of competence and expertise and that its members remain qualified for their positions individually and collectively, to enable it to fulfill its roles and responsibilities and respond to the needs of the organization based on the evolving business environment and strategic direction.

Recommendation 1.2

The Board should be composed of a majority of non-executive directors who possess the necessary qualifications to effectively participate and help secure objective, independent judgment on corporate affairs and to substantiate proper checks and balances.

Recommendation 1.3

The Company should provide in its Board Charter and Manual on Corporate Governance (CG) a policy on the training of directors, including an orientation program for first-time directors and relevant annual continuing training for all directors.

Recommendation 1.4

The Board should have a policy on board diversity.

The afore-quoted Recommendations do not empower the Boards of PLCs, by the sheer exercise of business judgment, to adopt qualifications and disqualifications that become binding in the election process for the members of the Board of Directors (BOD), or on the continued tenure of the directors who have been duly elected into the Board. The CG Code for PLCs leaves it to the Board to determine which processes it may adopt by which the recommendations can be put into effect, whether by introduction of the proper by-law provisions, or by adopting Board policies and guidelines in the executive search that become integral in the manner of nominating candidates into the Board.

What needs to be discussed in this section are the important practical and legal differences between locating the set of qualifications and disqualifications through clear by-law provisions, or merely pursuing them through a policy of guidelines or by actual practice in the nomination and election processes.

We will illustrate such differences in legal consequences by looking at Recommendation 1.4 that “The Board should have a policy on board diversity.” If the Board’s policy on diversity provides for, say, at least 40% in the members of the Board being of the feminine gender, and that provision is in the by-laws of the company, then the nomination and election process that ensures that at least 40% of those elected into the Board are females would be legally effective. The Nominating Committee can then pursue a nomination process for the annual election of the members of the Board that would allow the determination of those who receive a plurality of votes between assuring that the winning nominees would be split between nominees of the male gender who would constitute 60% of the membership of the Board, and the nominees of the female gender who would constitute 40% of the Board membership. This is the same procedure that is followed in the annual stockholders’ meeting to arbitrarily set the nomination and election of the members of the Board between the regular members and the independent directors.

On the other hand, if the policy of diversity is not provided for in the by-law provisions, and can be found only in guidelines of the Board or through a Board policy, then although the nomination process can be tailored to seek the declared policy, nothing can prevent the majority and/or the minority stockholders from insisting on nominating and casting their votes to a number of candidates who may end up winning all the seats which do not meet the diversity desired. The main reason for this is that unlike in the case of independent directors as a statutorily required component of all PHCs as provided for in the Securities Regulation Code, and the nomination and election processes can be tailor-fit to achieve the required regular-to-independent director’s ratio, the diversity ratio that does not find itself expressed as a by-law provision, thereby does not a have legal and binding effect on the stockholders who have a right to nominate and cast their votes in favor of candidates who are not otherwise disqualified under the by-laws of the company. In other words, when a policy of diversity is not expressed clearly in the by-laws of the corporation, the Board may campaign among the stockholders for a set of candidates that meet such diversity policy, but they cannot oppose the candidacy, much less disqualify other candidates who do not fall within the diversity policy set by the Board.

The foregoing discussions highlight the downside of the “comply or explain approach” of the CG Code for PLCs in that it would pursue fruition of the CG reforms in the PLC sector by relying on either the political will of the BOD who either pursue permanent company reforms through formal amendments of their articles of incorporation and/or by-laws, or use their position of corporate influence to convince the majority or controlling stockholders to dilute their majority representation in the Board itself.

Remuneration Rules under the Revised CG Code

The Revised CG Code contains specific provisions that empower the Boards of PHCs to develop attractive and competitive remuneration structures for both directors and corporate officers, thus:

J) Remuneration of Directors and Officers

The levels of remuneration of the corporation should be sufficient to be able to attract and retain the services of qualified and competent directors and officers. A portion of the remuneration of executive directors may be structured or be based on corporate and individual performance.

Corporations may establish formal and transparent procedures for the development of a policy on executive remuneration or determination of remuneration levels for individual directors and officers depending on the particular needs of the corporation. No director should participate in deciding on his remuneration.

The corporation’s annual reports and information and proxy statements shall include a clear, concise and understandable disclosure of all fixed and variable compensation that may be paid, directly or indirectly, to its directors and top four (4) management officers during the preceding fiscal year.

To protect the funds of a corporation, the Commission may, in exceptional cases, e.g., when a corporation is under receivership or rehabilitation, regulate the payment of the compensation, allowances, fees and fringe benefits to its directors and officers.

There are clear implications under the Revised CG Code seeking to establish director’s compensation as a cornerstone in good CG practice. Indeed, a system of “professional directorship” for covered corporations must include a necessarily formal compensation system that would “attract and retain the quality of directors to run the company successfully.” Nonetheless, because of the limitation under the Corporation Code against the grant of any form of remuneration or compensation to directors as such, outside of formal stockholders’ grant and/or provisions in the by-laws, it would be difficult, and perhaps also highly suspicious, to develop a system of director’s compensation would fall within the business judgment control of the BOD.

By necessary implication from the decision in Western Institute of Technology, the BOD of any corporation retains the power to provide for compensation for members of the board who occupy at the same time “officer” position, such as Chairman, Corporate Secretary, Corporate Treasurer, etc. In such case, their compensation really pertains to their position as officers, not as directors as such. This situation is amply covered by provisions of the Revised CG Code that refers to compensation for executive directors: “A proportion of executive directors’ remuneration may be structured so as to link rewards to corporate and individual performance.”

Consequently, the provisions of the Revised CG Code on compensations for non-executive directors become problematic to implement, for their compensation is precisely for their role as directors only. Thus, the provision that ties the non-executive directors’ compensation to individual qualifications and performance:

• Levels of remuneration of non-executive directors shall reflect their experiences, responsibilities and performances.

• Levels of remuneration for non-executive directors shall reflect the time commitment and responsibilities of the office or position.

would be extremely difficult to implement based on the following legal considerations.

Firstly, it is clear from the language of Section 38 of the Corporation Code that the granting and setting of compensation or remuneration for directors as such is outside of the legal competence and power of the BOD of any corporation. Therefore, the adoption by the Board of a system of compensation for directors outside of by-law provisions cannot be implemented by mere board resolution, and would require stockholders’ approval representing at least two-thirds (2/3) of the outstanding capital stock. This would be an extremely difficult system to enforce because the stockholders’ meeting is held once a year, and the setting of a special meeting of the stockholders and obtaining thereat a two-thirds (2/3) ratificatory vote would be extremely expensive, and may not engender obtaining the best and brightest of candidates who are elected into the board for a term of only one year.

Secondly, any system that allows the BOD to provide individually for a measure of compensation for individual directors would amount to a measure of “disciplining” in the hands of the Board, and therefore would have a difficult time overcoming the “good governance” principle under the Corporation Code that prohibits any form of “punishment and reward” in the hands of the BOD with respect to any of their members.

Thirdly, matters on directors’ compensation are inherently conflict-of-interests situations for the Board, and therefore are treated with much reservation under Philippine Corporate Law, as matters that inherently cannot be dealt within the Board’s exercise of business judgment. Under any scenario one can think of, when it is the BOD, or through its Remuneration Committee, that sets the compensation package of any director as such, even when the Revised SEC Code provides that the affected director cannot participate in the proceedings wherein his compensation is set, nonetheless, it would be a case where the members of the Board would be tempted to be involved in a system of “I scratch your back, and you scratch my back.” That is the reason why, under Section 38 of the Corporation Code, no such occasion is granted to the BOD of any corporation to be in a tempting position to grant, through the exercise of business judgment, compensation to any of the directors as such.

The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP

 

Cesar L. Villanueva is Chair of the MAP Corporate Governance Committee, the Founding Partner of the Villanueva Gabionza & Dy Law Offices, and the former Chair of the Governance Commission for GOCCs (GCG).

cvillanueva@vgslaw.com

map@map.org.ph

http://map.org.ph

Battlefield 2019:Political seats for the taking: by the numbers

Battlefield 2019<>Political seats for the taking: by the numbers

Reforms’ fate at stake in today’s polls

By Charmaine A. Tadalan
Reporter

RESULTS of today’s midterm elections will give a clearer picture of how secure remaining economic and other structural reforms, as well as business-friendly local initiatives, will be in the last three years of President Rodrigo R. Duterte’s term, analysts and business leaders said in separate interviews late last week.

The Federation of Filipino Chinese Chambers of Commerce & Industry, Inc. (FFCCCII), for one, said the next Congress, which opens its first of three regular sessions on July 22, should continue economic reforms and policies of the present administration, with an even stronger focus on job generation. “For businesses people and investors, continuity, stability and security are important. Our economy is improving. The key now is job creation, which means we need to speed up skills and technologies. FFCCCII is united in the government’s efforts to spur job creation and generate economic output that extend to all regions of the country,” FFCCCII President Henry Lim Bon Liong said in a mobile phone message on Friday.

The British Chamber of Commerce Philippines (BCCP) cited the need to speed up development of infrastructure projects and moves to further open up the economy to more foreign investments “Obviously, what we’d like to see is a continuation of the ‘Build, Build, Build’ program after the election, or the acceleration thereof, and of course with a change of perspective, we’re hoping to see an acceleration or continuing expansion, liberalization of the economy in order to increase foreign direct investments,” BCCP Chairman Chris Nelson said by phone on Saturday.

The Philippine Chamber of Commerce and Industry (PCCI) shared this view, citing the need for more amendments to the Republic Act No. 7042, or the Foreign Investments Act of 1991, and RA 8762, or the Retail Trade Liberalization Act of 2000.

Leaders of the chambers also said lawmakers in the next Congress should sustain efforts to further ease restrictions on doing business.

“One area that I would like the new Congress to really look at is to make our country more competitive so that there will be more foreign direct investments, and also the fact that we would really need to implement this bill that has been passed, the ease of doing business law, which is anti-red tape, because it affects a lot of MSME (micro, small, medium enterprises),” PCCI Chairman George T. Barcelon said in a phone interview on Friday.

Mr. Duterte on May 28 signed RA 11032,or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, which amends RA 9485 or the Anti-Red Tape Act of 2007.

Mr. Barcelon said the administration will likely have “a bigger number” of supporters in the Senate this time, based on the list of favorites in recent surveys.

“I would like to think this would be a positive sign, if the proper bills that will be passed in Congress will help the business sector. When I say business sector, I’m talking about the country itself, whether there will be more economic activity,” he said.

For Employers Confederation of the Philippines President Sergio R. Ortiz-Luis, Jr., “I guess majority of us feel it is better for the administration to have a control on the Congress, so that they can move in unison.”

Economists cited Congress’ crucial role in Mr. Duterte’s reform agenda, with some noting how lawmakers revised and at times watered down some tax bills, reducing revenues they had been designed to bring in.

Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail on Saturday that “both the House and the Senate need people who will work relentlessly for appropriate fiscal and other economic reforms.”

“Crucial reforms are the rationalization of incentives and reduction of corporate income taxes. These ones will help drive foreign direct investments higher. The current environment has left the country behind our Asian neighbors.”

Michael L. Ricafort, economist at Rizal Commercial Banking Corp., said in a separate e-mail that “the outcome of mid-term elections on May 13, 2019 will be significant as this provides a strong signal on the level of support/mandate to be given by elected lawmakers from both the Senate and House of Representatives to the administration for the next/remaining three years in terms of the passage of key economic and fiscal reform measures, as well as other priority legislative measures.”

Ateneo Policy Center senior research fellow Michael Henry Ll. Yusingco said “[t]he mid-term elections, for the business sector, will always be about continuity and predictability, meaning, they expect the reforms they have supported to be carried through the next half of the President’s term.”

“For this reason, the business sector would not like the new Congress to make surprise changes, especially concerning tax and investment reforms promised by the administration,” Mr. Yusingco said in an e-mail.

“They will probably tolerate minor adjustments in the administration’s development program, but will likely protest substantial deviations in fiscal and economic policies in the last stretch of the President’s term,” he added, specifically cautioning against moves to shift to a federal form of government that could distract lawmakers from more important reforms.

Integrated Development Studies Institute Director George Siy said in a phone message, Friday, it is important to elect the “right leaders” who will “continue our growth momentum”.

“We need less politics and more enterprises, technologies, reengineering our culture, especially as our regional neighbors are also fast-tracking their development.”

Maria Ela L. Atienza, University of the Philippines political science professor, cited the need for lawmakers who can think “independently and scrutinize legislative proposals” of Malacañang.

LOCAL CONCERNS
At the local level, business leaders said administrative and legislative officials to be elected today should ensure sustainability of projects and policies that have proven to support economic activity.

They also stressed the importance of closer cooperation and coordination between the national and local governments.

“Local government units (LGUs) are every important in our society. The national level would provide the macro direction, (but) the efforts to really push it are here at the local level,” PCCI-Iloilo Chapter President Jobert A. Peñaflorida said in an interview on Friday.

“They (LGUs) have their own initiatives, but it is also important that these program and initiatives of the different LGUs are aligned with that of the national government and at that same time… supported by the national leadership.”

The PCCI-Iloilo Chapter held a forum for local candidates last April 30 to provide “a suitable” venue where they could present their agenda.

“That is very critical because we are now in a period of growth and we want to see sustainability, and sustainability will be determined by the kind of policies and priorities that each of these candidates is going to pursue should they win the elections,” Mr. Peñaflorida said.

Davao City Chamber of Commerce and Industry, Inc. President Arturo M. Milan said that he sees the mid-term elections as a vote on economic stability needed for sustained investor confidence.

“I hope that there will be continuity. If majority of the winners are from the administration, then there is a validation that they agree, then there will be continuity now for the next three years,” said the business leader from Davao, Mr. Duterte’s hometown.

“This (election) will mean for me as stability for our economy…this is an election for the President.” — with reports from Emme Rose S. Santiagudo in Iloilo City and Maya M. Padillo in Davao City

Grid firm says supply of power so far sufficient

By Victor V. Saulon
Sub-Editor

The NATIONAL GRID Corporation of the Philippines (NGCP) expects May 13’s available power generating capacity in Luzon to be at 11,740 megawatts (MW) as against a peak system demand of 9,047 MW, giving the grid operator a margin of 2,693 MW sufficiently covering the midterm elections.

In the Visayas, it expects available capacity on Monday to reach 2,295 MW as against peak demand of 1,955 MW, or an operating margin of 340 MW.

Available capacity in Mindanao is expected at 2,240 MW versus peak demand of 1,635 MW or a margin of 605 MW.

The figures, supplied by NGCP on request, are expected to sufficiently tide the country during the elections.

“Monday is a holiday so demand is low,” Cynthia P. Alabanza, NGCP spokesperson, said in an interview on Friday when asked for a general assessment on power supply and demand for Monday.

The Department of Energy (DoE) said the system requires a regulating reserve equivalent to four percent of peak demand, or 361.88 MW on Monday, giving Luzon enough buffer to cover even the contingency and dispatchable reserves that are equivalent to the two identical units of the power plant in Sual, Pangasinan, each with a capacity of 647 MW.

NGCP said the expected power supply and demand projection was based on available data as of 2 p.m. on Friday, May 10.

As of 1 p.m. on Sunday, NGCP said: “NGCP’s transmission lines and facilities are under normal operations.”

“Hindi naman siya critical (It’s not really critical),” Department of Energy (DoE) Undersecretary William Felix B. Fuentebella said in an interview on Friday when asked on concerns about a possible spike in power demand during vote count after Monday’s elections.

He said the situation on May 14 could be on the “borderline” of a yellow alert, a notice issued by NGCP when there is no more dispatchable reserve and the system is already tapping into its contingency reserve.

“Mas okay ‘yung May 15. May 16, May 17 okay din (May 15 is better. May 16, May 17 will also be okay),” he said, assuring that the power system has sufficient supply for election week.

His assurance comes as Luzon on Friday was once again on yellow alert from 1-3 p.m. as peak power demand hit 10,524 MW against available capacity of 11,433 MW, leaving an operating margin of just 909 MW.

A major cause of the supply deficiency was the de-rating of a number of hydroelectric power plants, which usually happens amid a prolonged lack of rainfall especially during the dry months.

A total of 885 MW was lost as a result of the reduced capacity of the de-rated plants.

Separately, the Energy Regulatory Commission (ERC) released results of a study that showed up to 72% of the power plants in Luzon to be 16 years old or older, possibly adding to the energy reserve deficiency experienced in the country’s biggest power grid in March and April this year.

“Are the outages related to the ages of the plants in Luzon?” ERC Spokesperson Floresinda B. Digal asked, adding that a review of the information submitted to the commission appears to support a correlation between the age of the plants and the unscheduled shutdowns.

She said the “revealing” outcome of the ERC review showed that plants that are at least 16 years old contributed to 62% of the power outages in the March 5-April 25 period.

At the same time, Ms. Digal also said that plants that are less a year old and no older than five years accounted for a big number of outages. She said the ERC was still studying the reasons given by the power plant owners.

Sought for comment, Ranulfo M. Ocampo, president of the Philippine Electric Owners Association, said the thinning reserves could be a result mainly of rising power demand.

“The demand is increasing. Our population is increasing because of economic progress; naturally the demand for power will also increase,” he said in an interview on Friday.

“The rehabilitation of power plants can only do so much.”

Youth increasingly key to putting policy makers in place, but not a ‘solid’ vote

ABOUT 61 million voters, with the youth forming a considerable segment of this electorate, are expected to vote in today’s mid-term elections, the outcome of which will influence policy making in the remaining three years of the administration of President Rodrigo R. Duterte.

A voters profile released by the Commission on Elections (Comelec) in February 2016 shows the 18-24 age group back then totaling 11,026,578 voters, the 25-29 group totaling 7,370,037 voters and the 30-34 group totaling 6,333,398. Altogether, these groups form a total of 24,730,013 million voters, or almost half that year’s registered body of 54,363,844 million then. “This is compared to the senior vote of 6.69 million: 60-64 years old — 2,596,255; and 65 years old and above — 4,098,996,” BusinessWorld reported at that time.

The 2016 voters profile remains posted on the Comelec’s Web site, whereas its updated profile now has 61,843,750 registered voters (or an increase of 7,479,906 voters), but that latest total has no demographic breakdown.

Data from Comelec’s web site also show that voter turnout from 2016’s registered electorate was 81.9% or 44,549,848 voters — of whom an estimated 16 million voted for Mr. Duterte as president.

Three years into his administration, the electorate is again under scrutiny because of its predominantly young composition.

But analysts interviewed in 2016 and in this election season agree that the youth vote is not monolithic. In 2016, analyst Ramon C. Casiple noted that “their votes are significant but it is not decisive because they are not solid. This means all candidates will have a share in this age group and it remains to be seen how solid they will be.”

Sought for comment over the weekend, sociology professor Louie C. Montemar of the Polytechnic University of the Philippines said via e-mail, “Walang bloc vote mula sa sektor ng kabataan. Hindi ito maituturing na gaya ng boto mula halimbawa sa INC. Hindi solido ang boto ng kabataang Pinoy.” (There is no bloc vote from the youth sector. This cannot be regarded as a vote like the INC [Iglesia ni Cristo]. The vote of the Filipino youth is not solid.)

Mr. Montemar explained: “Una, ang tingin ng iba, malaking bilang ng botante ang kabataang nasa 18 hanggang 30 taong gulang… Sa iba naman, ang youth vote ay iyong tendensiya o potensiyal ng kabataan na bumoto gamit ang mas kritikal na pag-iisip… Dahil dito, mas malawak ang kanilang paningin at sila ay bukas ang pag-iisip na iboto ang mga alternatibong politiko at hindi ang mga tradisyunal na politiko o ang mga tinatawag na trapo. (First, some think that voters aged 18-30 years old constitute a large chunk of the electorate. For others, the youth vote refers to the tendency or potential of the youth to be critical in their thinking… which makes them broad-minded and open to alternative and not traditional politicians.)

“Nagkakaroon ng kaguluhan at kalabuan sa ikalawang pag-unawa sapagkat pinapalagay ng iba na ang lahat o karamihan ng kabataan ay ganito nga mag-isip — na sila ay lubos na kritikal at nakataya na nga laban sa mga trapo. Maling pagpapalagay ito. Sa ganitong pagtingin, pinapalagay na isang bloc vote ang kabataan.” (There is confusion about the youth because others presume that most if not all young voters think this way… This is a wrong assumption — regarding the youth as a voting bloc.)

Mr. Montemar cited such factors behind the youth vote as quality of education (“Ang kalidad ng edukasyon na nakukuha nila ay hindi pare-pareho”) and unequal exposure to mass media (“Hindi rin pantay-pantay ang exposure nila sa impormasyon at mass media”).

“Pansining sa mga lumabas na mock elections… May mga paaralang mas malakas pa rin ang isang kampo habang sa iba nama’y mas malakas pa rin ang kabilang kampong electoral. May mga paaralang mas bukas sa mga alternatibong ideya at pagkilos.” (Notice the mock elections. There are schools where one political camp has a strong showing, while another camp has a stronger showing in the other campuses. And there are schools that are open to alternative ideas and movements.)

Mr. Montemar also cited the strong war machinery of so-called traditional politicians, or trapo (a play on the Filipino word for rag): “Malakas ang makinarya ng mga trapo at sa salaping gamit nila para makalikom ng suporta,” noting that “malaking bahagi ng kabataan ang nahihila nila at naeempleyo pansamantala para sa halalan” (A considerable segment of the youth is persuaded toward that side and employed for the meantime during the campaign.)

At the same time, advocacy groups promoting the cause of the youth had been active in the election campaign that ended Friday, alongside cause-oriented groups representing women, labor, the urban poor and other sectors.

UP political science professor Maria Ela L. Atienza agrees there is “loose organizing and mobilizing” among the said groups. “However, there is no united front…” she said. “There is still no solid women’s vote, youth vote, etc.” — Ricky S. Torre with Arjay L. Balinbin, Gillian M. Cortez and Charmaine A. Tadalan

Foreign flows into Asian equities falter

BENGALURU — Foreigners were net buyers of Asian equities for the fourth straight month in April, but analysts doubt such inflows could be sustained amid an escalating tariff war between the world’s top two economies.

The United States raised levies on Friday to 25% from 10% on $200 billion worth of Chinese goods and Beijing said it would strike back in the midst of last-ditch talks to rescue a trade deal.

Foreign investors have sold $2 billion worth of Asian equities so far this week after a net $11.23 billion purchase last month, data from stock exchanges in South Korea, Taiwan, India, Thailand, the Philippines, Indonesia and Vietnam showed.

“Heightened risk sentiment on the back of a twist in US-China trade negotiations certainly does not serve Asia equities well,” said Jingyi Pan, a Singapore-based market strategist with financial services firm IG.

Some market participants still hold out hopes of a Sino-US trade deal as negotiators in Washington agreed to stay at the table for a second day.

“The question would be how long negotiations would sustain and for how long we will have the latest tariffs in place,” Pan said, adding that foreign outflows would likely be congruent with the time taken to resolve the trade spat.

In April, Indonesian equity markets led the region with a foreign inflow of $3.75 billion, largely driven by Mitsubishi UFJ Financial Group’s move to raise stakes in Bank Danamon Indonesia and Bank PT Bank Nusantara Parahyangan.

India received about $3 billion of foreign money on expectations Prime Minister Narendra Modi will come back to power in the seven-phase election that winds up on May 19, and on hopes the central bank will cut policy rates further to prop up the economy.

Foreigners invested $2.2 billion and $1.8 billion in South Korean and Taiwanese markets respectively, last month.

MSCI’s broadest index of Asia-Pacific shares posted its fourth straight monthly gain in April on optimism that the United States and China were inching towards a trade deal.

But this month, the index has declined over three percent. — Reuters

FPH to spend P8 billion for new headquarters

By Arra B. Francia
Senior Reporter

FIRST Philippine Holdings Corp. (FPH) will be spending P8 billion over the next five years to develop its new headquarters in Ortigas Center.

“The cost of redevelopment is about P8 billion, but that will be over a span of five years…It’s designed to be very energy efficient and water efficient so that it’s consistent with our values,” FPH President and Chief Operating Officer Francis Giles B. Puno told reporters after the company’s annual shareholders’ meeting in Makati last Friday.

The company will start demolishing the six-storey Benpres building — which was the Lopez group’s headquarters since 1971 — by the middle of the year. It will make way for a 40-storey Grade A building to be called the Chronicle Building, named after the group’s now-defunct newspaper, The Manila Chronicle.

The Chronicle Building will house the Lopez group companies, but Mr. Puno said they also plan to lease out about half of the building’s floor space.

“It’s for the group, pretty much. But we will also be able to lease out office space to outside tenants, at least 50-50,” Mr. Puno said.

FPH’s business units include energy firm First Gen Corp., Energy Development Corp., First Philippine Industrial Corp., First Philippine Properties Corp., and Rockwell Land Corp., among others.

The Lopez group earlier said it targets to secure the Leadership in Energy and Environmental Design certification for the building.

Several firms have been redeveloping their offices recently, opting to incorporate environmentally friendly features in their new headquarters.

Ayala-led Bank of the Philippine Islands last year announced that it will tear down its 40-year-old main office at the corner of Ayala and Paseo de Roxas avenues in Makati. The listed lender expects to complete the tower in about four years. It also plans to lease out a portion of the new building to other tenants.

PLDT, Inc. Chairman Manuel V. Pangilinan also said last week that they are looking to redevelop their Makati headquarters into a vertical office tower with green features and “plenty of open spaces.”

“At the end you have to make a choice as to what work environment you want to bring for your people,” Mr. Pangilinan said.

FPH booked a net income attributable to the parent of P10.28 billion in 2018, 76% higher than the P5.86 billion it posted the year before. Gross revenues also went up 21% to P131.31 billion for the year.

Shares in FPH went up 0.52% or 40 centavos to close at P77 each at the stock exchange on Friday.

A taste of the Alternative Learning System

Imagine being at a high school one sunny Saturday in March. Instead of being surrounded by restless sulking teenagers, you are surrounded by adolescent and adult learners who are smiling shyly and who look happy to be there. There is some nervous energy as there are visitors to observe the Alternative Learning System – Education and Skills Training (ALS-EST) teaching-learning sessions, but the excitement and pride of everyone – from the school leaders to the teachers and learners – are more palpable.

You choose to observe the Food Processing session. You enter one of the school’s technical-vocational laboratories and sit at the back. When the lesson begins, you notice that the teacher is nervous. Her voice grows steadier as she guides the learners from one collaborative activity to another. You appreciate that, despite the observers, she is able to create a safe and inclusive space where mistakes are okay and everyone participates. In smaller groups, learners recap the process of making salted eggs, compute the total cost of ingredients, as well as the selling price of a salted egg using the cost of ingredients and the 140% return on investment (ROI) ‘rule’ — all with the use of various tables and graphs.

You secretly wonder if you can pull off making salted eggs yourself as you observe the teacher demonstrate the entire process. You learn how to keep the eggs submerged in the saline solution, the difference between duck and chicken eggs, as well as the importance of vinegar in making the purple color stick to the egg shells.

As the teacher gives a short quiz, you reflect on the lesson and how impressed you are with the clear links between the mathematical and scientific concepts and the skills being taught. Yesterday the school leaders were just explaining the curriculum integration process they created. Seeing how mapping of competencies, making of a curriculum web, curriculum brief and session guide can result in a teaching-learning session that seamlessly combines basic education concepts and skills training makes you bask in the school and program’s successful innovation.

It’s a good illustration of how a clear central office vision coupled with schools’ involvement in co-designing the implementation of that vision is a recipe for an effective innovation process.

Talking with two learners afterwards makes you even more convinced of the impact of ALS-EST. One 45-year-old learner relays how, before ALS-EST, she would have a lot of idle or tambay time. Now that she is attending the weekend ALS-EST sessions, she is more preoccupied; she prepares salted eggs, pickled vegetables, and other processed food products for herself and loved ones. She also shares with her neighbors what she has learned from ALS-EST and has been encouraging them to join as well. Another learner, a young mother, is pleased that she is able to prepare smoked fish, preserves, and, of course, salted eggs for her family. She is heartened by the fact that some of her friends who are ALS-EST graduates have been hired as cooks or vendor assistants.

You leave the laboratory. You are the first group at the Principal’s office. In true DepEd fashion, snacks have been laid out. The bicho-bicho, a Bacolodnon dessert that resembles an elongated donut rich in coconut meat fillings, stands out and tempts you to bite into it. In addition to food, juice tetra-packs and coffee, the Inocencio V. Ferrer Memorial School of Fisheries (IVFMSF) bulletin on a flatscreen welcomes you. You see and hear even more ALS-EST learners talk about why they joined the program and what benefits it has resulted in.

Upon having a few bites of bicho-bicho and a few sips of coffee, you go out of the office and head to the ALS-EST center. You see a tarpaulin with a covenant of support to the ALS-EST Program accompanied by signatures from various stakeholders, such as the ALS literacy teacher, ALS skills teachers, the Assistant Schools Division Superintendent (ASDS), and even the city mayor.

You walk behind the tarpaulin and look inside the window slats of the ALS-EST center. The room is small –maybe even smaller than a regular classroom. Someone tells you that the learners are reviewing for an Accreditation and Equivalency (A&E) test happening in a few days. You wonder how the learners are able to study given the crowded classroom and the 30 or so visitors/observers. You look forward to the day when their ALS-EST center would be bigger, more suitable to their needs, and a source of pride. You think about the ALS-EST Learning Center built in Lawaan, Eastern Samar and wish that more centers like that would be built over the next few years.

You head back to the air-conditioned office. You’d like to listen in to the review session but there are too many people and it’s almost impossible to hear what’s going on. The Cookery and Electronic Products Assembly and Servicing (EPAS) groups are already there; you just need to wait for the Shielded Metal Arc Welding (SMAW) group to finish their observation. In the meantime, you are given a box of smoked fish with a lovely green ribbon and tag, a product of the ALS-EST Food Processing class. You say a heartfelt thanks but are actually unsure of what to do with it, given that you’re a vegetarian. You breathe deeply and hold on to the box.

The gift is not really the one in the box. You have been wanting to see actual ALS-EST learning delivery since its launch in 2017. Finally, you are here – experiencing an actual ALS-EST teaching-learning session.

You feel grateful to be part of this. As you became more involved in the program and the development of the ALS-EST Handbook for Implementers, you began to understand how it is a key ALS reform. It reflects the importance of going beyond basic and functional literacy and explicitly linking learning with employment or entrepreneurship (and not just higher education and middle-level skills development). In addition, by integrating not just skills training but life skills, work readiness skills, and learning-to-learn skills, the learners are given the possibility of having not just more opportunities in terms of economic engagement but also community participation and development.

The SMAW group is finally done with their observation. You are herded to the multi-purpose hall for the requisite picture-taking. One learner brought her baby; someone from DepEd Central Office carries the baby on her lap as the adults around her coo and make googly eyes. Click, click, click.

You feel glad that, beyond lifelong learning, ALS-EST reinforces other crucial K to 12 features, such as inclusive education. As an ALS program, it provides a viable alternative to the existing formal education instruction for Filipino youth and adults who are unable to access or have dropped out from formal basic education. By expanding the scope of ALS and increasing the possible exits, it increases the number of learners who are motivated to and able to participate in non-formal education programs.

The program has also started to advocate and develop project-based and portfolio assessments to complement the usual paper and pencil test for ALS A&E. Adding these kinds of authentic assessments makes the program even more inclusive and learner-centered.

More photos are taken. There are photos with everyone, there are photos with the school representatives, i.e. the ALS-EST coordinator, the skills teachers, and the other school personnel; division representatives and one Public Schools District Supervisor (PSDS); with the learners and some of their family members and friends.

You find it remarkable that the program, apart from building a constituency, has also built on many of the Senior High School (SHS) resources and lessons — from the use of the technical-vocational laboratories, expertise of the SHS teachers and even SHS immersion experiences. Many ALS-EST implementers are doing what many SHSs have been doing, such as linking with local industry and LGU priorities and getting support in the form of industry and career mentoring, work experience, hands-on activities and additional skills training from partners from the private sector.

Slowly you start the long process of saying goodbye and thanking the school for hosting. You wonder if it’s realistic to be able to visit Ubay, Bohol in the near future to see how ALS-EST sessions in dairy buffalo production look like. You are delighted by the prospect of being able to milk a carabao! But that’s another ALS-EST feature for another day.

 

Krupskaya M. Añonuevo is an education consultant, researcher, and facilitator. She is interested in teacher professional learning, inclusive education, and, more recently, equivalence programs. Send her your ALS-EST stories at krupskaya.anonuevo@gmail.com . She is also a fellow of the Action for Economic Reforms (AER).

MPTC on the lookout for opportunities in SE Asia

By Denise A. Valdez
Reporter

METRO PACIFIC Tollways Corp. (MPTC) remains on the lookout for opportunities to expand its presence in the Southeast Asian countries where it currently has tollroad investments, as the company continues its plans to create a pan-ASEAN tollway network.

MPTC President Rodrigo E. Franco told reporters last week that the company’s subsidiaries and affiliates in Vietnam, Indonesia and Thailand are looking at several projects that it may invest in.

MPTC parent Metro Pacific Investments Corp. (MPIC) currently has a 44.9% stake in Vietnam’s CII Bridges and Roads, and a 29.45% stake in Thailand’s Don Muang Tollway Public Co. Ltd. (DMT). Its unit in Indonesia, PT Metro Pacific Tollways Indonesia (PT MPTI), also has a 77.94% stake in Indonesia’s PT Nusantara.

For Vietnam, Mr. Franco said MPTC is looking at the government’s plan to bid out a “North-South Expressway” that will link the north and south of the country through two highways with a combined total length of 3,262 kilometers.

“Vietnam, there are several opportunities. But our affiliate there is already undertaking several projects,” he said, referring to CII Bridges and Roads.

“What they’re trying to build in Vietnam is really a North-South highway. In fact, there is a plan… to bid out some projects comprising the North-South highway… What they would do is (parcel it out) and get some private sector developers to bid on those projects,” he added.

“There are still pockets of opportunities, especially (since) all our focus has always been in the south… And in the south, there’s lots of opportunities there, because it’s a growth area. So we continue to explore those opportunities.”

For Indonesia, Mr. Franco said PT MPTI is looking at some opportunities for an unsolicited proposal that it may submit to the government.

“In Indonesia, what we are seeing is there are several projects that are either in the pipeline or concessions awarded in the past but have not been constructed. So those are opportunities. Apart from that, they also have, like us, this unsolicited proposal scheme that allows developers to think of projects that they can develop… Our subsidiary there is looking at several,” he said.

Mr. Franco noted no proposal has been submitted yet, but he believes Indonesia is never lacking in opportunities because it has “some catching up that needs to be done in terms of road infrastructure.”

THAILAND
In Thailand, Mr. Franco said DMT is a “solid contributor” of revenues to MPTC as the toll road industry has been relatively maturing.

“Relatively mature na ang toll road, at least what we’ve invested. It goes to the airport kasi, so the traffic growth is… siguro sa mga low single-digit ang traffic growth nyan. But that’s because medyo walang expansion, walang extension,” he said, referring to the Don Muang tollway.

“So as I said, relatively mature. But it’s good. It’s earning very well. We get comfort with that,” he added.

But next month, DMT Executive Vice-President for Business and Finance Sakda Panwai told reporters Friday the company will be participating in a government bidding for two toll road projects.

“We purchased two bidding documents. One is Motorway M6. The other one is Motorway M81,” he said during a media briefing in Bangkok.

Motorway M6 or the Bang Pa-in — Nakhon Ratchasima Intercity Motorway Project is a 196-kilometer toll road connecting Thailand and Laos, while Motorway M81 or Bang Yai — Kanchanaburi is a 96-kilometer highway connecting Nonthaburi to Kanchanaburi.

DMT Vice-President for Project Management Jakkrit Tongnaka said the company is preparing for the submission of operations and maintenance (O&M) bids on June 27, with the results expected by September.

“These are the two projects we are preparing for… MPIC has all the information before we make the bidding. And we need to have the approval of the board members; MPIC is one of the members. They have the right to make decisions,” he said.

Asked about the planned bidding, Mr. Franco said in a mobile message: “The company has been looking at the new PPP (public-private partnership) opportunities for some time. But the launch of the projects has been postponed several times.”

Mr. Panwai noted the traffic for the toll road business in Thailand is growing 3% to 5% annually, with an average daily revenue of 8.88 million baht in 2018.

MPIC is one of three key Philippine units of First Pacific, 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.

Low growth, high taxes as election issue

In election years, the Philippines’ GDP growth rate is always above 6.5% – except in 2001 (terrorist attack in the US, Gloria Arroyo anemic growth) and 2019. Philippines’ growth trajectory is on a downhill: 6.9% in 2016, 6.7% in 2017, 6.2% in 2018, and only 5.6% in the first quarter of 2019. Growth deceleration since Dutertenomics was invented is further confirmed.

In 2017, all East Asian economies grew faster than their 2016 levels – except the Philippines. And in 2018 when Philippine growth further decelerated, three neighbors managed to grow faster than their 2017 levels – Vietnam, Indonesia, and Thailand. Election years in the Philippines were selected in table 1.

What explains consistent growth deceleration under Dutertenomics?

To help answer this question, recall this equation in basic macroeconomics:

GDP = household consumption (C) + government consumption (G) + private investment (I) + Exports less Imports (X-M).

So the two main reasons for our growth deceleration are the following.

One, growth of C (biggest component at 57% of gross national income [GNI] in 2017-2018) has been declining, from 7.2% in 2016 down to 5.9% in 2017 and 5.6% in 2018. The series of murders in the Duterte drugs war since the 2nd half of 2016 to 2017 contributed to this, many people were scared to go out especially at night. Then the TRAIN law implemented in 2018 resulted in huge spike in inflation, people were spending less.

Two, growth of I (24%-26% of GNI in 2017-2018) is decelerating, 25% in 2016 and higher in previous years, down to only 9% in 2017, 14% in 2018, 7% in Q1 2019 (see table 2).

A “Joint statement on Q1 2019 GDP growth Economic Team (NEDA-DOF-DBM)” was issued last Friday.

“The budget impasse in Congress during the first three months of the year set off a spending cutback, which, in turn, stifled economic activity… This resulted in underspending of about P1 billion pesos per day, equivalent to P80-90 billion in disbursements for the first quarter of 2019. Were it not for this, the economy could have received a tremendous boost from much higher state spending… economy should have grown by at least one percentage point higher, at 6.6 to 7.2 percent in the first quarter, if the 2019 fiscal program had been approved on time.”

Dangerous philosophy, wrong prognosis by this administration. Why?

One, more state spending which requires more state taxation, more public borrowings would mean more growth? Wrong. As shown in table 2 above, growth deceleration in C and I, decline in private consumption and private investments, are the main reasons why overall GDP growth has been declining from 2016 to Q1 2019.

Two, G is small, only 9% share of GNI, and even a high G growth of 13% in 2018 failed to uplift the overall growth that year. Populist if not socialistic philosophy of more state spending, more taxation, is an ideological dinosaur that persists until today.

It is good that independent and opposition candidates like Serge Osmeña are explicit in campaigning for abolishing the oil tax under the TRAIN law as an election issue.

Significant tax cut will increase consumer confidence, C will pick up and it will pull up overall growth. TRAIN law’s cut of personal income tax (PIT) was a good move but the various tax hikes were not, they erased and negated the good will in PIT cut.

The pending TRABAHO bill (previously called TRAIN 2 bill) has been causing investment uneasiness, among the reasons why growth of I has decelerated to only 5% in Q4 2018, 7% in Q1 2019.

Hoping that the victorious senatorial and congressional candidates will introduce VAT rate cut from 12% (highest in East Asia) to 10%, even 8% in exchange for drastic reduction in exempted sectors.

 

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

minimalgovernment@gmail.com

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