Trash send-off

June 3, 2019 | 8:51 pm

Members of the non-government EcoWaste Coalition raise their message against the illegal entry of foreign waste into the Philippines as 2.561 tons of mixed plastic and electronic waste from Hong Kong is sent back on Monday, June 3, after it was discovered at the Mindanao Container Terminal (MCT) in Tagaloan, Misamis Oriental. The trash, which arrived at the port last February 2, was declared as assorted electronic accessories but authorities immediately flagged the shipment. “By quickly returning the illegal waste shipment and skipping bureaucratic delay, our nation is sending a clear and unambiguous warning to waste traffickers to stop sending other countries’ wastes into our ports,” EcoWaste Coalition National Coordinator Aileen Lucero said in a statement. “We heaved a sigh of relief as the entry of some 70 containers of similar trash was aborted with the seizure of this test cargo,” she added.

School opening 2019

June 3, 2019 | 8:51 pm

27.2M students start new school year

AS SCHOOL year 2019-2020 opened on Monday, 27.2 million students nationwide went to their kinder, elementary, junior high school, and senior high school classes, according to the Department of Education (DepEd). “Given our continuously increasing population and the challenges that we have to hurdle, we are likewise increasing our efforts to deliver quality, accessible, relevant, and liberating basic education… We are also continuously upgrading our facilities by improving resistance to typhoons and earthquakes,” DepEd Secretary Leonor M. Briones said in her message on the opening of classes.

Modern school

Education Secretary Leonor M. Briones interacts with Grade 8 and 12 students at Signal Village National High School in Taguig City on the opening day of the new school year.

Makeshift classroom after earthquake

Children of the Aeta indigenous community hold their first day of class in a makeshift classroom at the Diaz Elementary School in Porac, Pampanga on Monday. The school’s classrooms were destroyed during the magnitude-6.1 earthquake that struck parts of the Central Luzon region last April 22.

Early bird

A student waits at a makeshift classroom in Toong Integrated School, located in a mountain village in Cebu City, as she arrives early on the first day of school year 2019-2020. There are over two million public elementary and high school students in the Central Visayas Region.

Safety tips

A police officer talks to students of Agsam Integrated School in Lanuza, Surigao del Sur to reinforce the distribution of leaflets containing safety and security tips for students as the new school year starts. The Philippine National Police deployed some 120,000 officers nationwide to assist in the opening of classes.

Defense chief calls for measures to avoid war over sea dispute

June 3, 2019 | 8:49 pm

WITH THE “seismic geopolitical shift” in international relations, Defense Secretary Delfin N. Lorenzana said tensions between countries must be addressed to avoid “sleepwalking into another international conflict.” “The consequence of such seismic geopolitical shift is a troubling form of ‘superpower rivalry,’ which has now extended, to the anxiety of many in the region, even to the realm of trade, investment and cyberspace,” said Mr. Lorenzana during the 18^th Asia Security Summit at Singapore over the weekend. “With the untethering of our networks of economic interdependence, comes growing risk of confrontation that could lead to war. Our greatest fear, therefore, is the possibility of sleepwalking into another international conflict like WW1,” he said. The Defense chief called on actors in the Indo-Pacific region, including the Philippines, to do their best to manage tensions and avoid reckless miscalculations. “And this is where it’s crucial for us, all of us, to continue institutionalizing, upgrading, and expanding a whole range of Confidence-Building Measures, which could help major powers find an optimal set of mechanisms for conflict-avoidance. War benefits no one. Avoiding it is everyone’s shared responsibility,” he said. — Vince Angelo C. Ferreras

Dropping Smartmatic needs legal basis, says Comelec spokesperson

June 3, 2019 | 8:48 pm

COMMISSION ON Elections (Comelec) Spokesperson James B. Jimenez said there should be a legal basis before dropping its partnership with Smartmatic despite the reported glitches during the May 13 elections and the call of President Rodrigo R. Duterte. “There has to be a legal basis, but remember Smartmatic has nothing to do in counting of the votes. Ang (The) issues ay beyond that,” said Mr. Jimenez in a chance interview with reporters on Monday, June 3. He added that a forensic investigation is being conducted regarding the glitches. Meanwhile, Mr. Jimenez also said the Comelec is ready to investigate the low turnout of votes for party-lists in the May 13 elections, but discounted as a factor the placement of the names at the back of the ballot. “They (party-list representatives) are calling attention to a very large drop in number of votes for the party-lists and that deserves an investigation,” he said. Ako Bicol Party-list Rep. Alfredo A. Garbin Jr. lamented that the layout led to the low turnout of votes with only 27 million cast. Comelec earlier said the midterm polls had a voter turnout of about 75%, which means more than 47 million out of the 63 million registered voters. “Partylists are not mainstream, palaging makakalimutan (It can always be forgotten),” said Mr. Garbin. In response, Mr. Jimenez said the layout could not be cited as cause of disenfranchisement among the party-lists. “First of all, ‘yung sinasabi ng members na (what the members are saying on) disenfranchisement, I think most of these po is due to the fact that they (voters) did not vote for the party-list.” — Vince Angelo C. Ferreras

Labor leader convicted of illegal firearms possession

June 3, 2019 | 8:48 pm

THE SAN Mateo Regional trial Court (RTC) Branch 76 has convicted Labor organizer Marklen Maojo Maga of possession of firearms and affirmed the legality of his detainment last year. In the May 14 decision penned by Judge Josephine Z. Fernandez, the San Mateo RTC found Mr. Maga guilty beyond reasonable doubt for carrying a loaded .45 caliber pistol without a license. He has been ordered detained at the New Bilibid Prison for a period between eight years and one day to 14 years and eight months. In Feb. 2018, Mr. Maga was arrested by the police, which he said was carried out illegally. The court, however, noted that the arrest was legal with the apprehending officers carrying a warrant. Mr. Maga is a staff and organizer of the left-leaning labor group Kilusang Mayo Uno (KMU). Human rights group KARAPATAN Alliance for the Advancement of People’s Rights said in a statement on Monday, “Maoj’s unjust and condemnable conviction is an impetus for human rights advocates, trade unionists and activists to continue pushing back against a climate of political persecution and reprisal.” — Gillian M. Cortez

CARD plans education loan under Shari’ah financing project

June 3, 2019 | 8:47 pm

DAVAO CITY — The Center for Agriculture and Rural Development (CARD) Inc. is looking at including educational loans in its Shari’ah-inspired financing project that has gained traction in Mindanao.

In a press statement over the weekend, Gilnora Bahia, CARD operations director, said there is a proposal to include study loans in the Paglambo Project, which uses the Murabahah concept of the Islamic financial system.

“This (educational loan) will be a supplemental product and once they avail it, we will provide them with the school supplies they or their children need,” said Ms. Bahia, noting that the proposal is still in the planning stage.

Under the Murabahah concept, the borrower obtains money from the lender and uses the money to buy goods for his or her businesses. Both borrower and lender agree on the mark-ups on the goods that will serve as profit of the latter.

With this arrangement, the lender gets a fixed profit based on the agreement as well as the loan payment period, and eliminates the interest system which Islam prohibits.

CARD said the educational loan proposal developed as the Paglambo Project has grown fast from just having 56 Muslim families as members when it started a year ago to 4,182 as of April this year.

“This milestone on Paglambo’s membership showed how the Muslim communities of Mindanao welcomed CARD, Inc. and its program,” said Jocelyn D. Dequito, CARD executive director.

The project has also expanded its units from an initial two — located in Marawi City, Lanao del Sur and Shariff Aguak, Maguindanao — to 18 spread around the cities of Cotabato, Isabela in Basilan, and Zamboanga and Dapitan in Zamboanga del Sur.

Ms. Dequito said the project is part of the commitment of CARD, a microfinance non-government organization (NGO), to expand its goal of building financial inclusivity.

She also acknowledged and thanked the support to the project provided by Indonesian NGO Dompet Dhuafa, the Peace and Equity Foundation, and the Ramon Magsaysay Award Foundation. — Carmelito Q. Francisco

More than P1 rollback on fuel prices this week

June 3, 2019 | 8:46 pm

OIL COMPANIES Petron Corp. and PTT Philippines Corp. announced price rollbacks effective 6:00 a.m. on Tuesday at P1.70 per liter (/L) on gasoline, P1.05/L on diesel, and P1.00/liter on kerosene. Some companies such as Phoenix Petroleum have implemented the rollback last Saturday. The price cuts reflect movements in the international oil market, Petron said. — Janina C. Lim

Nation at a Glance — (06/04/19)

June 3, 2019 | 8:46 pm

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Price hikes could have steadied from Apr.

June 3, 2019 | 12:32 am

By Reicelene Joy N. Ignacio
Reporter

THE OVERALL RISE in prices of widely used goods likely slowed from a year ago in May though it could have steadied at April’s 16-month-low pace, according to a poll of economists late last week, even as the central bank’s estimate on Friday bared expectation that May could have paused a monthly inflation decline seen since November 2018.

A poll among 11 economists yielded a three percent estimate median, lower than the 4.6% inflation recorded in May 2018 and flat from April that was the slowest in 16 months or since December 2017’s 2.9%.

The Bangko Sentral ng Pilipinas’ (BSP) Department of Economic Research said on Friday last week that it expected May inflation to come in at 2.8-3.6% when the Philippine Statistics Authority reports official data on June 5.

A sustained slowdown in inflation coupled with a disappointing four-year-low 5.6% gross domestic product growth last quarter prompted the BSP’s Monetary Board (MB) to cut benchmark interest rates by 25 basis points (bp) in its May 9 meeting, partially dialing back a cumulative 175 bp hike fired off last year as inflation spiked.

The MB followed the May 9 rate easing with a 200 bp gradual cut in banks’ reserve requirement ratio (RRR) that is estimated to free up more than P200 billion for lending when the adjustments are completed in late July.

Emmanuel J. Lopez, Colegio de San Juan de Letran Graduate School dean, said in an e-mail: “I surmise that inflation rate for May has further gone down to 3.4% because prices remain stable despite intermittent oil price hike. Interest rate also has gone down, proof that there is no excess money in circulation…”

Robert Dan J. Roces, chief economist at Security Bank Corp., said: “We have been mentioning in the past the upside risk from higher oil prices but this month’s price averages for West Texas (Intermediate) and Brent have decreased 2.29 per barrel and 1.05/bbl, respectively, from last month’s mean. Further, retail pump price for premium gasoline… have fallen by around P1.15 since April 30.”

At the same time, “[r]isks to global oil prices remain… on the back of a prolonged United States-China trade war, Organization of Petroleum Exporting Countries’ cuts and (US) sanctions on Iran and Venezuela.”

“Food inflation has also continued to fall. The BSP has raised concerns about the effect of El Niño on food prices. Yet, despite minor disruptions, El Niño has not affected retail prices… Add to this, the effects to food price easing by the rice tariffication law that boosts imports of rice, ensuring stable supply.”

For his part, Michael L. Ricafort, head of economics research at the Rizal Commercial Banking Corp., noted that “[t]he peso exchange rate versus the US dollar has been confined in a relatively narrow P1 range (mostly at the range of P51.70-P52.70 levels) since the start of 2019 and currently near the lower part of the range… that helps lower prices of imports such as oil, rice, capital goods, other consumer goods, as well as… in easing overall inflation.”

Mr. Ricafort added that a “[h]igher base/denominator of inflation a year ago due to bigger and more price increases in most months of 2018… has mathematically reduced the year-on-year inflation since the start of 2019 and may lead to further easing of inflation for the remaining months of 2019 to the two percent levels or even lower especially in the latter part of 3Q in 2019 to the early part of 4Q 2019…”

Moody’s Analytics’ Katrina Ell said that “[s]ubdued rice prices are an important contributor to the deceleration” while “[o]il prices are an upward contributor.”

“We expect further interest rate cuts from the BSP this year to shore up domestic demand. There’s no need to keep the tightening from last year in place as inflation has cooled and capital is not flowing out of emerging markets as it was last year.”

HSBC, in its Global Economic Calendar, meanwhile said, “We expect headline inflation rose moderately to 3.1% y-o-y in May from 3.0% in April as a result of elevated oil prices and a continued increase in vegetable and fruit prices.”

“All things considered, however, inflationary pressures remain benign and headline prices are likely to hover around the midpoint of the Bangko Sentral ng Pilipinas’ 2-4% target,” it added.

“We expect full year inflation to average 3.1% in 2019, enabling the BSP to further loosen monetary policy in 4Q. We believe the BSP has scope for another 100-bp of RRR cuts and a 25-bp policy rate cut by yearend.”

PEZA approved pledges drop in first 4 months

June 3, 2019 | 12:31 am

INVESTMENT PLEDGES approved by the Philippine Economic Zone Authority (PEZA) — the second-biggest contributor to such commitments after the Board of Investments (BoI) — slid nearly a quarter in the first four months of the year as uncertainty mainly from the proposed alteration of tax perks made businesses stay on the sidelines and even look elsewhere for expansion.

Data which the investment promotion agency sent to reporters late last week show new project registrations declined 24.54% to P29.49 billion in the January-April period from P39.09 billion recorded in last year’s first four months.

Number of projects dipped by 1.24% to 159 from 161.

The same data showed direct employment went up 7.36% to 1.48 million last quarter from 1.379 million a year ago, while exports edged up 0.59% to $12.946 billion as of March from $12.869 billion a year ago.

The four months to April saw committed information technology investments drop 3.85% year-on-year in number of projects to 50 from 52 and by 7.08% in value terms to P4.632 billion from P4.985 billion.

Last quarter saw IT exports from PEZA’s economic zones rise 6.75% to $3.071 billion from $2.876 billion a year ago, while direct employment increased by 10.68% to 741,905 people from 670,300 a year ago.

“Andiyan pa ’yung TRAIN 2 (There is still uncertainty from the second Tax Reform for Acceleration and Inclusion package now awaiting approval in the Senate). Ang dami na gustong magtransfer, siguro mga 20 companies (About 20 companies are looking to relocate here). Pero ang (But the) next question, what about TRAIN 2?” PEZA Director-General Charito B. Plaza told reporters last week in Pasay City, noting that “big” investors concerned were mostly manufacturers based in China who flew in to inquire with her office personally.

The second tax reform package — which has been approved in final reading at the House of Representatives but is now dead in the water in the Senate, which has only until Tuesday left to act on any remaining bills under the 17^th Congress — seeks to cut the corporate income tax (CIT) rate gradually to 20% by 2029 from 30% currently, the highest in Southeast Asia, and restructure tax incentives by removing those deemed redundant which have been blamed for hundreds of billions of pesos in foregone revenues each year. Senators have favored the CIT cut but have proven cautious on the move to change tax incentives for fear of driving away investors and leaving more Filipinos jobless.

The Finance department had pushed these two reforms in tandem, since additional collections from the removal of redundant incentives are supposed to cancel out revenues to be foregone as CIT rate goes down.

The first tax reform package, TRAIN under Republic Act No. 10963 that went into effect in January last year, cut personal income tax rates in a bid to put more money into households’ pockets in order to further spur spending — which contributes nearly 70% to gross domestic product — but increased or added levies on a host of items and removed several value added tax exemptions.

At the same time, Ms. Plaza said that lower investment numbers can be expected before elections since businesses usually choose to stay at the sidelines till the political noise dies down.

But she noted that other locators seem to be “slowly” transferring their production to other sites.

Semiconductor manufacturers — whose sales abroad contribute more than half of total merchandise exports — said late last week that they hope to meet with the new batch of lawmakers who will be assuming their posts on July 22, and Ms. Plaza said she hopes the new 18^th Congress will be “friendlier” on this count.

Philippine Statistics Authority data show investment commitments approved by PEZA dropping by 40.97% to P140.242 billion last year — accounting for 12.94% of P1.084-trillion total commitments that made it the second-biggest contributor of such flows after BoI’s P914.96 billion — from P237.570 billion in 2017. — with Janina C. Lim

Analysts’ May Inflation Rate Estimates

June 3, 2019 | 12:30 am

THE OVERALL RISE in prices of widely used goods likely slowed from a year ago in May though it could have steadied at April’s 16-month-low pace, according to a poll of economists late last week, even as the central bank’s estimate on Friday bared expectation that May could have paused a monthly inflation decline seen since November 2018. Read the full story.

Q4 2018 labor turnover flat from third quarter

June 3, 2019 | 12:30 am

LABOR TURNOVER in the country’s large firms steadied in the fourth quarter compared to the previous quarter, according to the Philippine Statistics Authority (PSA).

Results from the PSA’s Labor Turnover Survey showed the labor turnover rate, which is the difference between rates of accession and separation in firms, settling at 0.8% in the last three months of 2018.

This means that for every 1,000 persons employed, large firms hired eight workers on a net basis in the fourth quarter.

The fourth-quarter labor turnover reading was unchanged from the third quarter result.

However, it is worth noting that this was an upward revision from the preliminary 0.6% turnover rate estimated in May.

“Labor turnover may be the same in the fourth quarter of 2018 at 0.8% [compared to the third quarter], but we have seen a slowdown in both accession rate and separation rate… as inflation rate reached a near decade-high of 6.7% in September 2018 and October 2018…” Rizal Commercial Banking Corp. economist Michael L. Ricafort said in a mobile phone message, adding that local interest rates “similarly reached their decade-highs in October 2018.”

Last year saw inflation accelerating for nine straight months, peaking at a nine-year-high 6.7% in September and October before decelerating to six percent in November and 5.1% in December. This brought the full-year 2018 average to a decade-high 5.2% against the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target range for 2018.

To quell inflation, the BSP hiked interest rates by a cumulative 175 basis points (bp) in five consecutive meetings in 2018. It was only in its May 9 meeting this year that the central bank took the first step in monetary policy normalization by partially dialing back benchmark rates by 25 bp. A week later, it announced a series of cuts in the reserve requirement ratios imposed on banks — the first of which took effect last Friday.

The rate of accession — which represents hiring by employers to either replace former employees or expand their workforce — was recorded at eight percent in the fourth quarter, slipping from the 9.5% in the preceding three months.

The rate of separation — involving termination and resignation — stood at 7.2%, also down from 8.7% in the preceding quarter.

Breaking down the accession rate, more people were hired in the fourth quarter due to business expansion at 4.1% compared to those who were employed as replacement for former employees at 3.9%.

The employee-initiated (resignations) separation rate stood at four percent while employer-initiated (retrenchment) separation rate was 3.3%.

The agriculture, forestry and fishing sector had an accession rate of 6.1% versus a 4.8% separation rate, resulting in a labor turnover rate of 1.3%.

Services had an 8.5% accession rate and a 6.6% separation rate, yielding a net job creation rate of 1.9%. With the exception of professional, scientific, and technical activities (-0.9%), all other service subsectors recorded net positive turnover rates.

On the other hand, industry posted a negative labor turnover rate with a separation rate of 9.5% versus the accession rate of 6.6%. Pulling down the sector were negative turnover rates in construction (-6.4%); mining and quarrying (-4%); and manufacturing (-2.5%).

Mr. Ricafort said that the net positive turnover in agriculture “may reflect replanting/recovery in agriculture production” in the fourth quarter following damage caused by Typhoon Ompong in September 2018.

The economist attributed industry’s net job loss to “adverse effects of the lingering US-China trade war… that may have slowed down demand for the country’s exports to China and the US.”

“Still, relatively higher interest rates and inflation rates in [the fourth quarter of 2018] (though already easing) may have kept manufacturers on a wait-and-see attitude while waiting for both inflation and interest rates to go down further before making more aggressive borrowings/purchases for new production facilities and expansion projects…”

Mr. Ricafort further surmised that uncertainties related to the proposed rationalization of fiscal incentives “may have partly added” to the sector’s negative labor turnover in the fourth quarter.

For the first quarter of this year, conditions in the labor market are expected to have improved amid the easing inflation rate and government signals to loosen its monetary policy.

“Much lower interest rates encourage more borrowings/financing by consumers and businesses including manufacturers that lead to more production facilities and greater economic activities that may, in turn, help create more jobs and business opportunities. Thus, industry labor turnover (job creation) may improve in [the first quarter of 2019],” Mr. Ricafort said.

The same is expected for the agriculture sector which the economist attributed to “better weather conditions” in the first quarter 2019 even as these were partly offset by El Niño’s impact on agriculture production. — Kimani Eros S. Franco