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Tough times ahead

Free agency in the National Basketball Association doesn’t officially start until the evening of June 30, and yet quite a few movements have already been marked as done — or, at least, as good as done. Among them are the departures of Celtics linchpins Kyrie Irving and Al Horford, the willingness (desire, even) of top management to keep them notwithstanding. Due to an unfortunate confluence of events, a campaign that was looked upon with loads of promise this time last year instead wound up dealing tons of disappointment. Dysfunction reared its ugly head, thus making divorce all but a foregone conclusion.

The operative phrase, to be sure, is “all but.” Despite the seeming certainty of the exits, the fact that there is still time on the clock underscores the possibility of the status quo being perpetuated. And as unlikely as it may seem, pro hoops annals are littered with enough occurrences of the improbable to keep it in play. Never mind that Irving has long been sending signals that he would rather be donning anything other than green and white, and that Horford, by extension, figures to latch on to a better opportunity to chase a ring without sacrificing optimal earning capacity.

Creditably, the Celtics are operating with the worst in mind, and have thereby made draft-day deals designed to provide them with cap room to go after a high-profile free agent, not to mention the flexibility to trade high-potential assets for proven talent. The flipside is that, regardless of outcome, they’re left to scramble and rework their best-laid plans. Their multi-year project to acquire Anthony Davis fell by the wayside, and chemistry issues stunted their aptitude to be greater than the sum of their parts.

In this regard, not a few quarters have pegged the Celtics to be better off accepting the inevitable. After all, it’s not as if they’re rebuilding from scratch. They remain competitive, with Jayson Tatum and Jaylen Brown headlining a youthful base boasting of enviable skill sets. On the other hand, they’re not about playoff appearances. Ultimately, they’re about championships. And names on the rise won’t cut it. Stars will, and they’ve got a grand total of one — assuming Gordon Hayward even gets to regain his pre-injury form.

In any case, the Celtics will keep plodding on. Tough times are ahead, but Danny Ainge and Brad Stevens will make sure they’re in the best possible position to contend for the hardware. Are Irving and Horford gone? The answer will come on June 30. No matter what, however, they’ll continue to forge ahead. Which, in the final analysis, is all that matters.

 

Anthony L. Cuaycong has been writing the Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

Over 100 retailers rally with Huawei, offers special warranty program to confirm use of Google apps

To assure consumers who are interested in Huawei phones, partner retailers and dealers will offer a “Special Warranty Program” for upcoming purchases of any current Huawei model. All devices covered by this special warranty will have no issue concerning the usage of Google apps and services such as Google Play Store, Gmail, Google Maps, Photos, Chrome, and YouTube. The same goes as well with non-Google ones such as Facebook, Instagram, and WhatsApp.

This special warranty is offered exclusively by participating dealers to show their continued support to the brand while at the same time provide a worry-free experience for consumers with their new Huawei device. Key retail partners such as MemoXpress, Rulls, and around 30 more support the special warranty program, reassuring consumers that all Huawei devices purchased from them are fully equipped with Google services ready to go.

As dealers are offering this special warranty, current users of Huawei models express their confidence in the strength of their phones and also their satisfaction with the exceptional after-sales service.

Mark Anthony Lacsamana, a Huawei Mate 20 Pro User, agreed earnestly when asked if the device was worth his money.

“It’s because everything that I want in a phone is here. The camera, for example, is clear even at a distance. And then, in terms of its durability, it remains sturdy and has no scratches at all even when my phone fell several times,” he said in the vernacular.

Meanwhile, another customer, Ryan Lu, took his Huawei Nova 3i in for Service Day, and he’s proud of his choice of device. “It’s very stylish, unique, and affordable. And also, it’s very powerful,” he said of the device’s features, among them the KIRIN 710 processor. What he likes the most about the phone, however, is its capability for him to personalize and customize.

Ryan Lu shows his Nova 3i

Regarding recent issues involving Huawei and Google, Mr. Lu is unfazed, and he no longer bothers with them as long as the phone works well. In fact, he shared that his family, who would join him on that Service Day, were influenced by his purchase to buy Huawei phones for themselves.

Pauline Delicano is another proud and satisfied Nova 3i owner. Having tried other brands before, she switched to Huawei the moment she had the chance.

“Now, it’s one of the most competitive brands. I think it [the issues] doesn’t really matter as long as we will get the services that we have always been getting. I don’t think it wouldn’t affect us that much as long as the current users won’t be experiencing any problems,” Ms. Delicano said.

On the other hand, Mariel Tanggol, a Huawei concept store supervisor and a firm supporter of the brand, mentioned how thrilled her sales team was after hearing about the warranty program.

“Before the warranty program, I saw the eagerness among the sales promoters to help out consumers with their questions. But after the warranty came out, I also saw, as a supervisor, how they became more confident and motivated in demonstrating the units and explaining to customers about the issue,” she said.

Ms. Tanggol together with her sales team at SM Mall of Asia branch felt the trust and confidence of consumers towards the brand, and she has even seen a significant impact in sales after the announcement of the warranty program.

Huawei sales team

Ultimately, consumers will benefit the most with the warranty program wherein they now think that they are getting the value for the money they spent.

Also, according to the store supervisor, most consumers were surprised by the fact that dealers offer after-sales services like the special warranty. She also found that 99% of the customers who heard the news from the sales promoters expressed ecstatic remarks about this while showing contentment as well.

Furthermore, MemoXpress Vice President for Operations Edward Tan shared his warm response with Huawei’s fine way of addressing recent issues, saying, “We are one with Huawei in pushing for quality service including after-sales initiatives that will surely put Filipino consumers first.”

“We express our support and full trust with Huawei through this special warranty program to prove that Huawei devices are safe to purchase,” Mr. Tan added.

Edward Tan, Vice President for Operations at MemoXpress

Huawei’s products and services are available in more than 170 countries, and are used by a third of the world’s population. Fourteen R&D centers have been set up in the United States, Germany, Sweden, Russia, India and China. Huawei Consumer BG is one of Huawei’s three business units and covers smartphones, PC and tablets, wearables and cloud services, etc. Huawei’s global network is built on almost 30 years of expertise in the telecom industry and is dedicated to delivering the latest technological advances to consumers around the world.

‘Hot money’ flows out for 3rd straight month in May

MORE foreign capital went out of the Philippines in May for the third straight month, amid the escalating trade tensions between the United States and China, the Bangko Sentral ng Pilipinas (BSP) reported on Friday.

Foreign portfolio investments — also known as hot money because of the ease by which these funds enter and leave the economy — saw a net outflow of $749.84 million in May. This was significantly more than the $206.25 million net outflow in May 2018, and the $298.83 million that left the country in April 2019.

This brought the five-month tally to a $685.27 million net outflow, reversing the $813.81 million in net inbound capital logged during the same period in 2018.

The BSP forecasts $4 billion in net inflows for 2019.

Gross outflows stood at $1.988 billion in May, higher than the $1.418 billion seen in the same month last year and the $1.289 billion logged in April.

This offset the $1.238 billion in foreign capital that entered the country in May, a tad higher than the $1.212 billion in gross inflows seen a year ago and the $989.96 million the prior month.

Broken down, all investment instruments posted a net outflow, particularly the listed securities at the Philippine Stock Exchange ($508 million), peso government securities ($241 million) and other local currency debt papers and other portfolio instruments (each at less than $1 million).

The central bank attributed the 54.2% month-on-month increase in gross outflows in May to the “renewed trade tensions between the US and China.”

Trade tensions between the world’s two largest economies simmered again after Beijing and Washington imposed tit-for-tat levies on each other’s imports.

The US increased tariffs on $200 billion worth of Chinese goods to 25% from the previous 10% on May 10. In response, China slapped American imports higher levies of up to 25% on certain goods effective June 1.

President Donald J. Trump said Tuesday he is set to meet his Chinese counterpart Xi Jinping next week during the G20 Summit next week in Japan to discuss trade issues.

The BSP said the US continued to be the main destination of fund outflows, receiving 81.5% of total remittances.

On the other hand, the central bank said gross inflows grew 25% month-on-month as investors reacted on the lower inflation for April 2019 amid the midterm polls, as well as the BSP’s move to cut the reserve requirement ratio of big banks.

Roughly 81.5% of investments registered in May were in PSE-listed debt papers, particularly in holding firms and companies pertaining to property, banking, food, beverage, tobacco and transportation services.

By country, the top five investors last month were the United Kingdom, the US, Malaysia, Singapore and Luxembourg, accounting for 76.7% of the total.

Ruben Carlo O. Asuncion, UnionBank of the Philippines, Inc. chief economist, said there have been “not so good news” about the “protracted” trade conflict between Beijing and Washington.

“Emerging markets like the Philippines are usually very vulnerable to volatility brought by unfavorable sentiments mentioned,” Mr. Asuncion said in a text message. — K.A.N.Vidal

Outlook for PHL banks still stable

THE local banking industry will continue to benefit from robust economic growth of the Philippines, debt watchers Moody’s Investors Service and S&P Global Ratings said.

In a report, Moody’s said its outlook for the Philippine banking system remains “stable” for the next 12-18 months.

“Among other factors that will underpin the credit profiles of banks in the country, robust economic growth will continue to support asset quality at current strong levels,” Moody’s said.

The debt watcher projects the country’s gross domestic product (GDP) growth — which will remain among the highest in Asia — at six percent in 2019 and 6.2% in 2020, underpinned by “robust domestic consumption and an expansionary fiscal policy” despite the four-month delay in the enactment of the 2019 national budget.

“Private consumption, which contributed 68.5% of the country’s real GDP in 2018, will continue to be supported by the Philippines’ young population and remittances from Filipinos living overseas,” Moody’s said.

It added that easing inflation will “help improve consumers’ purchasing power.”

Latest data showed prices of basic goods and services grew 3.2% in May, a tad faster than the three percent tallied the previous month, driven by food and non-alcoholic beverage as well as water, electricity, gas and other fuel costs.

The easing inflation environment triggered the Bangko Sentral ng Pilipinas (BSP) to slash its benchmark rates by 25 basis points to a key rate of 4.5%.

However, the central bank opted to take a “prudent pause” in cutting rates to allow it to “observe and assess the impact of prior adjustments” such as the phased reduction in reserve requirement ratio (RRR) until July.

“We expect loan growth to recover to 13%-15% annually over the next 12-18 months as the Philippines’ central bank ends monetary tightening now that inflation is easing,” the debt watcher said.

Citing BSP data, Moody’s said year-on-year loan growth moderated to 11.9% in the first quarter of 2019, from 17.4% a year earlier.

Due to this rapid credit expansion, Moody’s expects the capitalization of local banks to “weaken moderately,” as consumption will continue to outpace generation.

However, shareholder support will prevent the significant deterioration of capital, as seen in the recent stock right offers (SRO) of big banks.

In 2018, Metropolitan Bank & Trust Co., Bank of the Philippine Islands, Rizal Commercial Banking Corp. and UnionBank of the Philippines, conducted SROs to support lending growth.

Philippine National Bank, meanwhile, is set to raise about P12 billion in July by offering 276.63 million common shares.

Moody’s expects profitability of banks to be stable as growth of net interest margins (NIM) offsets higher operating expenses due to investments in IT infrastructure and branch network.

“In addition, planned cuts in reserve requirement ratios for banks will help NIMs widen by enabling banks to deploy funds more efficiently,” the credit rater added.

BSP Governor Benjamin E. Diokno started slashing big banks’ RRR in May until it reaches 16% next month. He also vowed to bring the cash requirement to a single-digit percentage by the time he ends his term in 2023.

On the other hand, Moody’s said banks will maintain strong asset quality despite increases in interest rates, since “economic conditions are healthy and financial performance of Philippine corporates… remains strong.”

The debt watcher assigned a “Baa2” credit rating for the Philippines with a “stable” outlook, a notch above the minimum investment grade.

Meanwhile, in a separate statement, S&P kept its banking industry country risk assessment (BICRA) score to the local lending sector to group 5.

It mentioned that the economy’s strong growth trajectory, strong fiscal policies and an improving investment climate “provide sound growth opportunities for the country’s banks.”

Nikita Anand, S&P Global Ratings credit analyst, said the increase in non-performing loans will continue over the past few quarters.

“[H]igher interest rates will increase borrowers’ debt servicing burden,” Ms. Anand was quoted as saying. “Nevertheless, the increase in non-performing loans will overall be moderate and manageable for banks due to broadly supportive macroeconomic conditions.”

She added banks’ cost-to-deposit ratios will continue to climb as additional liquidity brought by the reduction in RRR will enable the lenders to grow.

The debt watcher upgraded the Philippines’ BICRA score by a notch to group 5 from group 6, citing “improvement in the institutional framework of the country’s banking system” with enactment of the law strengthening the central bank on Feb. 14. — Karl Angelo N. Vidal

Globe launches first 5G service in Southeast Asia

Globe Telecom, Inc. launched the first 5G broadband service in Southeast Asia. The Philippines is also the third in Asia to have 5G broadband service, after South Korea and Japan. — Reuters

MANILA — Globe Telecom Inc on Thursday launched Southeast Asia’s first 5G broadband service, with embattled Huawei Technologies Co Ltd. providing the equipment, a win for the Chinese firm despite cybersecurity worries from Western nations.

The Philippines is also the third in Asia to have 5G broadband service, after South Korea and Japan.

The Ayala-led telecoms firm aims to offer high-speed internet to tens of thousands of homes and offices in key urban centers as part of its $1.2 billion capital spending this year, Alberto de Larrazabal, Globe’s chief commercial officer, told reporters.

Globe would use Huawei’s equipment like radios and modems to deliver 5G quality broadband internet, he added. Huawei and Finland’s Nokia were Globe’s equipment providers for its 4G service.

The United States had warned that next-generation 5G equipment, which some telecoms experts see as more vulnerable to attack than previous technology, could be exploited by the Chinese government for spying if supplied by Huawei, which the company denies.

Washington, a treaty ally of Manila, had persuaded governments and telecoms operators to shun Huawei, the world’s largest maker of telecommunications equipment.

Globe hired independent firms “to ensure that our security protocols are up to date, to make sure privacy and security issues are addressed,” Mr. de Larrazabal said.

Philippine consumers, the world’s top social media users, often get frustrated with slow and choppy internet connections. The Philippines’ mobile internet and fixed broadband speeds lag behind its neighbors, data from Ookla’s Speedtest Global Index showed.

It ranks 107th among 178 countries in terms of fixed broadband speed at 19.55 megabits per second (Mbps) versus the global average of 59.6 Mbps. Among 140 countries, it ranks 107th in terms of mobile internet speed at 15.10 Mbps, nearly half of the 27.22 Mbps global average.

Globe is owned by Philippine conglomerate Ayala Corp, with Singapore Telecommunications Ltd holding a minority stake.

Globe At Home Air Fiber 5G is a fixed wireless broadband that uses technology where a site transmits connectivity to the home without the use of wired connection.

Plans range from 20Mbps to 100Mbps as opposed to existing 4G broadband plans that offers 5Mbps to 20Mbps. Air Fiber 5G will be available next month for home use broadband.

As for availability of 5G service to mobile handsets, Globe is still waiting for 5G capable handsets to become more pervasive.

“When the handsets with 5G become…more affordable…more pervasive then we can think about whether rolling it out for mobile makes sense. But for now it’s very targeted, it’s going to be somewhat stationary for at home use,” Mr. de Larrazabal said. — Reuters with report from Katrina T. Mina

Former DFA chief arrives home after detention in Hong Kong

By Arjay L. Balinbin, Reporter

FORMER Foreign Affairs secretary Albert F. Del Rosario was held at the Hong Kong International Airport on Friday before his return to Manila also that day.

“We are still in the immigration office, almost four hours na (already),” Mr. del Rosario said in a phone-patch interview on DZMM TeleRadyo on Friday morning.

Mr. del Rosario, who serves as non-executive director at the Hong Kong-based First Pacific, said he was supposed to attend a meeting by the First Pacific board of which he is a member and has informed the Department of Foreign Affairs (DFA) of his plan.

Melody M. del Rosario, vice-president for Public Relations and Corporate Communications at Metro Pacific Investments Corporation, confirmed to BusinessWorld via phone message that the company has a board meeting this week. “Yes, they have,” she said.

Mr. del Rosario also confirmed this during his interview saying: “I have a board meeting for First Pacific and then I have shareholders’ meeting also for First Pacific. All business.”

Both the former Foreign Affairs chief and retired Ombudsman Conchita Carpio-Morales sent a “communication” to the International Criminal Court (ICC) last March asking the organization to conduct a preliminary examination against Chinese President Xi Jinping and other officials in connection with the harassment of Filipino fishermen in the West Philippine Sea.

Last month, Hong Kong immigration authorities held Ms. Morales when she and her family went there for a five-day vacation.

Mr. del Rosario, when asked if the ICC communication that he and Ms. Morales have filed could be related to this incident, said: “Yes.”

Presidential Spokesperson Salvador S. Panelo, for his part, said in a CNN interview: “We cannot question the authority, the right of a country to stop or to investigate any guest or visitor wanting to enter that particular country. That’s their exclusive domain.”

“Now, whether or not a person is a security risk to them is for them to determine, not us…. Now, with respect to Albert del Rosario, I cannot also understand the good Ambassador, why he knew from the very start that the Hong Kong authorities have detained former Ombudsman Morales. Of course, we can only speculate that it could have been in relation to the case filed against China. But having said that, because if I were del Rosario, I would have not gone to Hong Kong,” he added.

In a phone message, Justice Secretary Menardo I. Guevarra, who has been designated by President Rodrigo R. Duterte as officer-in-charge while he is in Bangkok for a summit, said: “As OIC, I will request the DFA to find out the reason for former SFA’s exclusion and extend whatever assistance could be given to him as a former foreign minister of our country.”

“But personally, I believe that the lesson derived from former Ombudsman Morales’s similar experience should have been clear to him,” he added.

Senator Richard J. Gordon, in his statement, said the Hong Kong authorities acted with “disrespect” in the manner they treated Mr. del Rosario.

“Hong Kong authorities acted with disrespect and exhibited lack of good judgment. The maintenance of good and friendly relations, bilateral or multilateral, state to state, people to people, is a main objective of every government,” he said.

First Pacific has presence in the Philippines through key units PLDT, Metro Pacific Investments Corp., and Philex Mining Corp.

Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls.

Locsin: PHL, China to conduct separate inquiries on boat sinking

By Charmaine A. Tadalan, Reporter

THE Philippines and China will conduct separate inquiries on the June 9 sinking of a Filipino boat near Recto Bank in the West Philippine Sea, the Department of Foreign Affairs (DFA) said, Friday.

“There will be NO joint investigation. China and Philippines will conduct their respective investigations,” Foreign Affairs Secretary Teodoro L. Locsin, Jr. said in a social media post, Friday.

The remarks followed Justice Secretary Menardo I. Guevarra’s recommendation for a joint inquiry on the incident, which left 22 Filipino fishermen abandoned at sea until their rescue by a Vietnamese vessel.

Likewise, the Chinese government, through Foreign Ministry Spokesperson Lu Kang, recommended a joint investigation, which the Palace considered as a “possibility.”

“The main focus for DFA is what is clearest of all — the abandonment of fishermen to the elements whether deliberately or accidentally caused,” Mr. Locsin said in a separate post.

Mr. Locsin also said this matter is the concern of the DFA, the Department of National Defense (DND) and the National Security Council. “I’ve stated my view of this proposal; DFA will act on MY VIEW & no one else’s. I talked to ES (Executive Secretary Salvador C.) Medialdea; Palace supports me. That’s that,” he said.

“Also I listen only to the DND and NSA (National Security Adviser). This is a matter beyond civilian agencies’ remit and falls well within the DFA’s, DND’s & NSA’s. Period.”

For his part, Presidential Spokesperson Salvador S. Panelo responded to Senator Panfilo M. Lacson’s describing him as the “defense counsel of China.”

“The perception that my pointing out certain circumstances surrounding the Reed Bank incident previously unknown to us creates the impression that I’m acting as China’s counsel is sheer non sequitur as well as a shallow analysis of my examination of the incident,” Mr. Panelo said in a statement, Friday.

Former President and outgoing House Speaker Gloria Macapagal-Arroyo for her part told reporters, “I support President Duterte because he knows what he’s doing. And he wants to be friends with China and at the same time of course, he is promoting the national interest. Which is also my attitude.”

“We want to be friends with China but the parameters is also national interest. That is the same parameter that President Duterte is espousing, so I support fully whatever will be his action there.” — with Vince Angelo C. Ferreras

DICT presents alternative automated election system

By Charmaine A. Tadalan, Reporter

THE Department of Information and Communications Technology (DICT) on Friday presented its proposed alternative automated election system, aimed at improving transparency.

The vote tallying machine, as proposed, is a “point-of-sales style wireless terminal,” with an attached scanner and projector that allows poll watchers to capture, validate and display the physical ballot image.

“Makikita ng audience every vote, makikita nila ‘yung actual ballot. Kung wala silang rejection, isasama sa official count,” Acting Secretary Eliseo M. Rio Jr. said during a demonstration on Friday at the DICT Building in Quezon City. (The audience will see every vote, they’ll see the actual ballot. If they have nothing to reject, the ballot is not rejected, it will be included in the official count.)

DICT said the technology needed to develop the machines is available in the Philippines. It will present the same on July 15, alongside other developers, to the Commission on Elections (Comelec) for its consideration.

The Department is also considering other modes of ballots that will not allow over-voting, which said had been a major problem in previous elections. Mr. Rio said the over 9 million votes for various candidates were not counted due to over-voting by around 1.2 million voters.

“Itong concept namin (Our concept) will make it impossible for the voter to vote more than what is needed,” Mr. Rio said.

The other modes the government can choose from include a hand-written, fill-in-the-blanks ballot with an optical character recognition that will auto-populate the enumerator app, a multiple choice ballot with an optical mark recognition engine, and a barcode sticker-based ballot with image processing engine.

“I think it’s about roughly around P700-800 million, ‘yung ginamit natin (what we spent) last electio. Ito (For this, we’ll use) P30 million, malaking savings makukuha sa ballot (which can generate savings),” Mr. Rio said, noting the Comelec will no longer need to print ballots unique to each local government units (LGUs).

At present, Comelec prints different ballots for each LGU for the election of local executives as well as members of the House of Representatives.

Moreover, the DICT said it is also in discussion with Congress for a possible amendment of the election automation law. “The lawmakers are already coming up with a hybrid law. In fact, we wanted the hybrid law to be implemented for the 2019 elections, but di na naabutan (it didn’t make it on time).”

Duterte to tackle maritime dispute in ASEAN

By Arjay L. Balinbin, Reporter

PRESIDENT Rodrigo R. Duterte on Friday said he will tackle “lengthily” the disputes in the South China Sea at the 34th Association of Southeast Asian Nations (ASEAN) Summit in Bangkok.

Mr. Duterte made his remarks at the oathtaking of his son, Sebastian “Baste” Z. Duterte, as Davao City vice-mayor.

The President, who was scheduled to depart for Bangkok on Friday evening, said in his speech: “Ang tanong ko lang sa China, we’re friends. Pero ang China nag draw ng line dikit sa coastlines (My question for China, we are friends, but China has drawn a line close to the coastlines)…. Is it correct for China to declare ownership of an ocean?”

He added that if China can claim an entire ocean, then he can also claim the Sulu Sea and require all passersby to secure a permit from the Philippine government.

“I am thinking of claiming the Sulu Sea as ours. Wag kayong dumaan pagwala kayong permiso sa akin (Do not pass through the area without permission from me). I don’t mind if America will claim the Pacific Ocean…. That is the danger there. I will talk lengthily about this sa (at the) ASEAN,” he said.

He also said, “Simple lang (It is simple), can you claim an ocean as your own? Eh di (So,) I will claim mine…. That is what we will talk about tomorrow.”

On the June 9 Recto Bank incident, he reiterated that an investigation is necessary.

“We consider it a maritime incident and it should be investigated ng Coast Guard…. Hindi yung tatawagan mo yung…warships. You do not call the Navy pag walang gera (You do not call the Navy if there is no war),” he said.

“Hindi ako takot sa China. Takot ako na…walang kalaban laban tayo (I am not scared of China. I am scared that we’re no match…. Pero kung sabihing (But if you say that) America has the right to interfere, it becomes a bloody confrontation.”

He noted that China has committed to compensate if the incident was its fault.

“Why do we have to go into a convoluted argument. That is the problem. A little knowledge is a very dangerous thing. Not good,” he added.

He further said the incident was “not an attack on our sovereignty.”

“Kaibigan natin ang China, marami namang Chinese dito, pati pamilya ko Chinese. Pero ganito, ang problema ng China nag-draw siya ng nine dash line (China is our friend. There are many Chinese here anyway, even my family. But the problem is that China drew a nine-dash line [in the South China Sea]),” the President said.

BuCor flagged for excess salaries, other violations

By Vince Angelo C. Ferreras, Reporter

THE Commission on Audit (COA) has flagged the Bureau of Corrections (BuCor) for several violations including excess salaries and many unimplemented projects.

According to COA’s 2018 audit report, only 14 of 61 projects were implemented last year. “Of the 61 procurement activities totaling P88,648,912.00, only 14 projects/activities or 23 percent, were implemented amounting to P36,074,123.13,” the report said.

“Apparently 47 projects or 77 percent, with a total estimated budget of P51,067,600.00, were not implemented at all,” it added.

But COA also cited BuCor’s explanation that the delay in the projects’ implementation was “due mainly to lack of material and lack of bidders.” The agency recommended the immediate implementation and completion of unimplemented projects and remittance to the Bureau of Treasury of all unused balances.

COA also noted that salaries paid to three deputy directors-general were not consistent with the approved organizational structure and staffing pattern of the BuCor Act of 2013. In accordance with that law, the three officials are only each entitled to a base pay rate of P86,227 per month.

“However, the three Deputy Director(s) General claimed their salaries for the month of November at the rate of P128,467.00 each based on the salary rate of civilian official as Assistant Secretary, which is inconsistent with OSSP (Organization Structure and Staffing Pattern),” the report said.

The auditing agency also reported that the representation allowance and transportation allowance (RATA) were paid to the designated Director, Directorate for Finance and Logistics (DFL), a position which is not approved by the Department of Budget and Management.

“Her designation (Bienvenida F. Tupas) as Director, DFL, does not entitle her to P17,000 RATA since this position was not among the position(s) approved by DBM. The foregoing updated organizational units prescribed by DBM do not include the position of Director, Directorate for Finance and Logistics, instead, the Finance Division with Organizational Code of 22.3 was retained,” COA said.

Sought for comment, COA said that BuCor “maintains that the ranks as provided for in Section 9(b) of RA 10575, otherwise known as ‘The Bureau of Corrections Act of 2013,’ shall be adopted.”

State auditors also flagged BuCor’s overstocked medicines worth P15.5 million.

“Apparently, actual demand of patients (was) not considered in the procurement of drugs and medicines, resulting in excess procurement of drugs and medicines amounting to P15,501,612.25. This is a manifestation of a clear disregard of the actual needs of patients or purchases of the same even without the need/basis to purchase,” said COA.

State auditors reported that an example of excess procurement is the medicine Verapamil, of which 99,300 tablets were received by BuCor, but only a total of 3,450 tablets were given to inmates during the year.

COA also called out delays in the public bidding and awarding to contract of suppliers. COA recommended that BuCor should “undertake planning and effective prioritization in its procurement and keep track of the movement of drugs and medicines to ensure safety stock levels and avoid excessive purchases,” COA said.

Also according to COA, two food caterers failed to comply with the food safety requirement stipulated in their food substance agreement with BuCor, resulting in poor catering services and endangering the health of inmates. The caterers identified in the report were Aurora F. Sumulong Eatery and V&J Trading.

State auditors said the caterers failed to comply with most of the food safety requirements including sanitary permit, employment of food compliance officer, employment of dietitian, health certificate of food handlers, and pest treatment certification.

COA said BuCor has already issued a notice to terminate to the two caterers.

“They (BuCor) further justified that they are observing due process and will update the audit team on the status of the said notice,” said the report.

Indonesian militant in Maute siege guilty of possession of firearm

AN INDONESIAN militant involved in the Maute group’s 2017 siege of Marawi City has been found guilty of illegal possession of firearm.

Taguig Trial Court Branch 266 ruled that accused Muhammad Ilham Syahputra violated the Comprehensive Firearms and Ammunitions Act, Republic Act No. 10591.

It was reported that “one Caliber .45 Caspian pistol with SN 475269 and inserted with loaded magazine containing seven live ammunitions of Caliber .45,” was recovered from Mr. Syahputra in a joint police operation, following the declaration of martial law in Mindanao after the Maute siege.

The court noted that Syahputra was not a licensed or registered firearm holder.

The operation was led by the Marawi City Police Station, Criminal Investigation and Detection Group-Autonomous Region in Muslim Mindanao, Provincial Investigation Detection Management Branch and Provincial Intelligence Branch of Lanao del Sur Provincial Police Office.

Syahputra faces eight years and one day up to 10 years, eight months and one day of imprisonment.

The Court also ruled that Syahputra is not guilty of being in possession of a fragmentation grenade. “The Initial Verification report adduced by the prosecution does not include the negative finding that accused is not authorized to possess a fragmentation grenade,” the court said in part. — Charmaine A. Tadalan

Agriculture trade deficit widens in Q1

okra farmer
PHILSTAR/JOVEN CAGANDE

By Carmina Angelica V. Olano, Researcher

THE trade deficit in agriculture commodities widened in the first quarter, the Philippine Statistics Authority (PSA) said.

Data from the PSA released Friday showed outbound shipments of agricultural goods totalled $1.5 billion in the first quarter, up 0.57% year-on-year.

Meanwhile, around $3.56-billion worth of farm products were shipped into the country during the period, up 14.35% from a year earlier.

As a result, the first-quarter deficit in agriculture trade was $2.06 billion, up 26.95% from the $1.63-billion gap a year earlier.

Total agricultural trade, which is the sum of imports and exports, was valued at $5.06 billion in the first quarter, up 9.9% from $4.6 billion in the same period of 2018.

Agriculture accounted for 11.5% or $5.06 billion of total trade, which was $44.05 billion in the first quarter.

The Philippine incurred its biggest agriculture deficit with the Association of Southeast Asian Nations (ASEAN) at $1.03 billion followed by the United States ($489.81 million), Australia ($177.18 million), and the European Union ($165.25 million).

On the other hand, trade in farm goods with Japan was in surplus by $230.59 million.

Edible fruit and nuts were the country’s top agricultural export at $611.57 million, or 40.89% of the value worth of total goods shipped.

Other top farm goods exports include animal or vegetable fats and oils ($231.75 million); tobacco and manufactured tobacco substitutes ($107.09 million); preparations of meat, of fish or of crustaceans, molluscs and other aquatic invertebrates ($103.34 million); fish and crustaceans ($90.81 million); and preparations of cereals, flour, starch, or milk ($75.66 million).

Meanwhile, the country’s top imports were cereals at $969.14 million, followed by miscellaneous edible preparations ($402.31 million); residues and waste from the food industries ($393.24 million); dairy produce ($320.57 million); and meat and edible meat offal ($296.51 million).

UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion said although a trade deficit in agriculture is expected, it still implies weakness in the sector.

“Having more agriculture commodity imports than exports describe a rather weak productivity of the agriculture sector. It is not new, however, that Philippine agriculture has been a laggard contributor to general economic growth of the country,” he said in an e-mail.

Mr. Asuncion also noted that agriculture trade was driven by imports amid increasing local demand for food.

“With increasing economic growth is increasing demand for food and other agriculture products. Aside from higher demand, changes and easing in domestic policy particularly relating to agriculture commodity imports can be another reason for the growth in agriculture growth,” he said.

Michael L. Ricafort, head of Rizal Commercial Banking Corp.’s (RCBC) economics research division, had a similar assessment.

“The faster growth in the imports of agricultural products also partly reflect the increased requirements of the local economy, which remains to be among the fastest growing in ASEAN,” he said in a separate e-mail.

Mr. Ricafort also noted that the increased importation of agricultural products may be attributed to the impact of the government’s efforts to manage inflation last year.

“The wider agricultural trade deficit in the first quarter may reflect the increased importation of rice/food, fish, sugar, and other agricultural products…to increase the local supply…to lower their prices and better manage overall inflation,” he said.

Headline inflation slowed to 3.8% in the first quarter compared to 5.9% in the fourth quarter of 2018 according to PSA data. The slowdown was mostly broad-based with much of the downtrend seen in the heavily weighted food and non-alcoholic beverages index at 4.6% in the first quarter versus the 8% in the fourth quarter last year. Food alone averaged 4.1% in the first three months of the year against the 7.7% average in the preceding quarter.

Mr. Ricafort said the flat growth in the country’s agriculture exports may be attributed to the global economic slowdown largely due to ongoing trade tensions between the US and China since July of last year.

“Economic growth in China, which is the world’s second biggest economy and the biggest importer/buyer of various agricultural commodities, has been among the slowest in nearly 30 years,” he said.

TRADE SEEN PICKING UP
Both economists expect agriculture trade to pick up in the coming months.

“At the end of this year, robust growth is expected because of the policy changes in agriculture commodities importation,” UnionBank’s Mr. Asuncion said, adding that risks to this outlook “usually come from perennial weather disturbances.”

RCBC’s Mr. Ricafort had the same view: “Agricultural imports could continue to increase in the coming months in view of the full implementation of the Rice Tariffication Law, which removes the volume limits on rice imports in able to increase local supply of rice (to address any risk of shortage in the supply of cheaper rice just like what happened earlier in 2018), as well as increased imports of fish, corn, sugar and other food/agriculture items to increase local supply and lower local prices of these agricultural commodities in the local market…,” he said.

Mr. Ricafort likewise noted “improved trade and diplomatic relations” with major markets for the country’s agriculture exports, particularly in huge markets such as China, Japan, and South Korea.

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