FMIC cuts 2019 economic growth forecast to 6-6.5% »Story on B1 HH
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TUESDAY, JULY 9, 2019
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Alan, Allan to share speaker’s term IT’S final: The House of Representatives will have two speakers in the 18th Congress — Alan Peter Cayetano and Lord Allan Velasco. President Rodrigo Duterte on Monday said Cayetano and Velasco would
Amnesty to PH: Revise drug war A
BY GLEE JALEA
N international human rights group has urged the Philippine government to revise its campaign against illegal drugs and hold those responsible in extrajudicial killings accountable.
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Termed-out senators will tip the Senate balance in the 18th Congress
Amnesty International (AI) on Monday urged the Ombudsman and
the Department of Justice to conduct “independent, impartial and effective”
äReviseA2
First word ILIPINO politicians started violating the term-limits provision of the Constitution as early as the fourth election under the 1987 Charter. äMakabentaA4
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OBSERVER YEN MAKABENTA
IN MY LINE ESUS OF SIGHT Clint Aranas, former president and general manager of the Government Service Insurance System (GSIS), insists he resigned on a matter of principle and was not fired. äTulfoA5
BOAT-RAMMING INCIDENT
RAMON T. TULFO
‘THEY JUST KILL’ Amnesty International Regional Director for East and Southeast Asia Nicholas Bequelin presents the group’s second report on drug killings. PHOTO BY RUY MARTINEZ
What’s inside BERNAL EYES ‘GRAND’ SONA
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MISLATEL SECUREScan PERMIT Filipinos TO OPERATE travel to 64 BusinessB1
countries without visa
WIMBLEDON SENSATION COCO GAUFF HEADLINES WEEK 2 SportsE1
THE net satisfaction rating of President Rodrigo Duterte rose to a personal high for the second quarter of 2019, with 4 out of 5 Filipinos voicing satisfaction with his performance, according to the Social Weather Stations (SWS). The survey, conducted from June 22 to 26, 2019, found that 80 percent of Filipinos were satisfied with the performance of Duterte, while 12 percent were dissatisfied. The remaining 9 percent were undecided.
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There goes Clint Aranas, a man of principle
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4 in 5 Filipinos satisfied with Duterte – SWS
CHINA: ARE RELATIONS WITH JAPAN ENTERING A NEW ERA?
Filipinos can travel to 64 countries without visa HOLDERS of Philippine passports can travel “visa-free” to 64 destinations, according to the 2019 Henley Passport Index, which put the country on the 80th spot in the
global ranking. Based on the Henley Passport Index, Filipinos can enter 34 countries visa-free, while 30 others require
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Frank ChingA6
Manila to hale Chinese to court
THE Philippine government would hale to court the captain and crew of the Chinese ship that rammed a Filipino fishing boat near Recto (Reed) Bank if the Chinese government failed to impose sanctions against them, Malacañang said on Monday. “If [China] cannot do that (impose sanctions), then we will sue them in our jurisdiction. O, e ‘di ba, in-endanger nila ang lives (They endangered lives). Pwedeng (We can file a case of) reckless imprudence resulting in serious damage of property and endangering the lives of our countrymen,” Palace spokesman Salvador Panelo said. “There is only one way by which they can justify the abandonment of our fisherfolk, and that is by so doing, their lives
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RICHARD YAP GIVES IN TO THE ‘LURE OF GOLD’ EntertainmentF1
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Turkey’s Ambassador to the Philippines Artemiz Sumer chats with The Manila Times President and Chief Executive Officer Dante Francis ‘Klink’ Ang 2nd during a visit to the editorial offices of the newspaper in Intramuros, Manila. PHOTO BY J. GERARD SEGUIA
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FMIC cuts 2019 economic growth forecast to 6-6.5% BY ANNA LEAH E. GONZALES
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IRST Metro Investment Corp. (FMIC) on Monday revised downward its economic growth projection for the country to 6-6.5 percent from the 6.8-7.2 percent it estimated earlier.
It also sees the Bangko Sentral ng Pilipinas further reducing banks’ reserve requirement ratio (RRR) by 2 percent, as well as policy rates by 50 basis points, before 2019 ends on the back of easing inflation. At the Ty-led investment bank’s midyear briefing in Bonifacio Global City, Taguig City, FMIC President Rabboni Francis Arjonillo said the delayed approval of the 2019 national budget was the “biggest factor” for lowered projection.
The budget’s approval was delayed for the first four-and-a-half months of the year on account of a dispute between the Senate and the House of Representatives over alleged anomalous insertions that President Rodrigo Duterte ultimately vetoed. Despite the revised forecast, Arjonillo said FMIC continued to have a “positive outlook” on the Philippine economy, as government spending was expected to catch up in the coming months. “After a slower-than-expected growth
in the first quarter of the year, we expect the rest of 2019 to be better,” he added. The country’s gross domestic product (GDP) hit a four-year low of 5.6 percent in January to March, which was blamed on the delayed budget approval. “The catch-up plan of the government to bring infrastructure spending to 5.2 percent of GDP is very encouraging and would strongly support our growth expectation,” Arjonillo said. For the second half, the FMIC chief said the bank projected economic growth to settle between 6.5 and 7 percent. Growth drivers include robust domestic demand, solid investment spending and tourism, he added. Data from FMIC showed that tourist arrivals in the first four months of the year reached 2.87 million. That figure
is expected to grow to 8.2 million by yearend. “Another positve sign is the rapidly decelerating inflation, which will provide the stimulus for consumer spending,” Arjonillo said. The rate of the increase in the prices of goods and services decelerated to 2.7 percent last month from 3.2 percent in May — the lowest since August 2017’s 2.6 percent, the Philippine Statistics Authority reported last Friday. FMIC projects inflation to fall and settle within the 2.7-3 percent range by yearend from 5.2 percent in 2018 on the back of lower crude oil and food prices. Easing consumer price growth would allow the central bank to slash its RRR and policy rates, which Arjonillo said “are aimed at stimulating growth to
While the May figure reversed April’s 5.9-percent contraction, it failed to boost the year-todate tally, which dropped by 4.6 percent to P267.9 billion from P280.8 billion in January-toMay 2018. In a comment, Rizal Commercial Banking Corp. economist Michael Ricafort said the year-on-year decline in the first five months of the year “may still reflect some spillover effects of the reenacted budget and delay in approval of the 2019 national budget from January to early April 2019, as well as some effects of the election ban on some government spending, including that for infrastructure.” Going forward, the Budget department said it had begun
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Mislatel secures permit to operate
Infra, capital spending jumps to P62B in May STATE infrastructure and capital spending rebounded in May from a month earlier, rising to P61.5 billion on the back of foreign-assisted publicworks projects and military modernization. In a report on Monday, the Department of Budget and Management (DBM) said the a m o u n t wa s a 5 . 9 - p e r c e n t increase from P58.1 billion in the same month last year. “The increase is credited to disbursements for foreignassisted infrastructure projects of the Department o f Tr a n s p o r t a t i o n a n d t h e Department of Public Works and Highways, as well as for capital outlay projects under the Armed Forces of the Philippines Modernization Program,” it explained.
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TUESDAY JULY 9, 2019
Business Times
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PROMISING ENTERPRISE
(From left) Nestor Palabyab, executive director of the Philippine Trade Training Center; Trade Assistant Secretary Amina Fajardo; Trade Secretary Ramon Lopez; and Abdulgani Macatoman, Trade undersecretary for the Trade Promotion Group prepare to cut the ceremonial ribbon to opening MSME Week 2019 on Monday. PHOTO BY JOHN ORVEN VERDOTE
THE Mislatel Consortium finally received on Monday night the permit and frequencies it needs to begin operating as the Philippines’ third major telecommunications player, nine months after its selection by the government. In a ceremony in Malacañang, D e n n i s U y, f o u n d e r a n d chairman of Udenna Corp. and unit Chelsea Logistics and Infrastructure Holdings Corp. — two members of the FilipinoChinese consortium, with Beijingrun China Telecommunications Corp. completing the group — accepted from President Rodrigo Duterte the certificate of public convenience and necessity in the
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Duterte’s BoC albatross DoF: China to probe cigarette machines Low-wage earners’ P ROUGH
RESIDENT Rodrigo Duterte has once again threatened to fire a number of officials of the Bureau of Customs (BoC) and place the irredeemably corrupt agency under the control of the military. While some who appreciate his bull in a china shop approach to doing some things may believe that this will accomplish something, those of us who have observed smuggling balloon over the past decade or so can only shake our heads in sympathy for his frustration. According to the best available research, the value of goods smuggled into the Philippines annually ranges from about P100 billion to about P180 billion. The most conservative estimate of tax revenue losses resulting from this is about P29.3 billion per year; in reality, the amount is likely two or three times as high. In dollar terms, the estimated value of smuggled goods has grown by an average of $3.55 billion per year since 2006; the only exception was 2009, when the global financial crisis-induced economic slowdown kept smuggling growth to a modest $500 million from the year before, an amount that could mostly be attributed to simple inflation. O f t h e t h r e e s u c c e s s i ve presidents confronted by the problem of smuggling during that time, Duterte seems to be the most sincere about trying to come to grips with it, but honest intentions are clearly not enough. The remedy of replacing the
TRADE BEN KRITZ
management and personnel at the BoC has been attempted and failed so often that one might wonder if Customs is really the problem. There hardly seems to be anywhere else to look, however, apart from the Philippines’ challenging geography as an island nation. In any event, it is believed that most smuggling is of the technical variety, wherein illicit cargoes are brought into the country under the very noses of those whose job is to prevent that. Compared with other nearby trade destinations, there is no obvious alternative reason why smuggling should be so rampant here. Customs duties, taxes, and other fees are about average compared with the other Asean countries, and so is the time required to (legally) import a shipment – at 15 days, the Philippines is slower than Singapore, Malaysia, and Thailand (at 4, 8, and 13 days, respectively), but much faster than Vietnam, Myanmar, Cambodia, Indonesia, and Laos. The unfortunate conclusion one must make, in the absence of any other plausible explanation, is that the problem does indeed lie in the BoC. Since changing
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CHINESE customs officials will look into the unathorized export of cigarette-making machines to the Philippines that originated from China, the Department of Finance (DoF) said on Monday. In a statement, the Finance department quoted Customs Commissioner Rey Leonardo Guerrero as saying in a report to Finance Secretary Carlos Dominguez 3rd that Manila had reiterated its concern over the export of these machines to the Chinese vice minister of the General Administration of Customs of China on the sidelines of the 28th Asean
Customs Directors-General Meeting in Laos. “I asked them if they could stop such exportations on their part, because this is creating problems, as far [as] we’re concerned,” Guerrero said. Chinese customs officials agreed “to look into the matter,” he added. Dominguez earlier ordered the Bureau of Customs (BoC) and the Bureau of Internal Revenue (BIR) to work closely with their Chinese counterparts in stopping these machines from entering the country illegally. This came after BIR
Commissioner Caesar Dulay reported that the illegal tobacco trade has shifted from smuggling cigarettes to producing locally counterfeit brands using these machines. Based on earlier BIR raids, counterfeiters were able to manufacture fake versions of popular brands using smaller and more portable versions of the machines, the Finance department said. On May 29, the BIR Strike Team tasked to crack down on the illicit tobacco trade conducted an inventory of machines,
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Strong US jobs data dampen PSEi THE stock market fell back to the 8,000 level on Monday, joining a global rout, as investor sentiment dampened hopes of a Federal Reserve rate cut. The benchmark Philippine Stock Exchange index (PSEi) dropped by 0.82 percent or 66.42 points to close at 8,051.52, while the broader All Shares declined by 0.65 percent or 32.21 points to finish at 4,913.47. AAA Southeast Equities Inc. research head Christopher Mangun said the local market tracked a global decline after US jobs came in stronger than expected. “Most of Asia was down today (Monday) after [a] stronger-thanexpected US jobs report came in over the weekend, which weakens
the case for a massive rate cut from the Federal Reserve this month,” he said. P2P Trade Online sales associate Gabriel Jose Perez agreed, saying the weakness “may have come from strong US jobs data last Friday, given the upcoming Fed meeting later this month, where the market is already expecting at least a 25-basis point cut.” The US economy in June added 224,000 jobs, bucking expectations of a drag on jobs due to business uncertainties over trade tensions between the United States and China. The number showed a significant jump from May’s 75,000. “Market movement for tomorrow could be dictated by how US markets move tonight, in
response to further moves from the aforementioned jobs data. Support for the PSEi is at the 8,000 mark, while resistance remains at the recent high of 8,139,” Perez said. In the region, Tokyo declined by 0.98 percent, Shanghai fell 2.58 percent, Hong Kong dropped 1.54 percent, Seoul plunged 2.20 percent, Jakarta lost 0.34 percent, Singapore decreased 1.12 percent. Only Bangkok finished firmer, up 0.04 percent. In Manila, most sectoral results were down except for mining and oil, up 0.39 percent. More than 949 million issues were traded valued at P5.6 billion. Losers led winners, 119 to 74, while 50 issues were unchanged. ANGELICA BALLESTEROS
home loans hit P4.52B
THE Home Development Mutual Fund (Pag-IBIG Fund) reported on Monday that the socialized housing loans it extended to 11,894 members from the minimum-wage and low-income sectors reached P4.52 billion in the first half of 2019. According to the state-run agency, the figure represents nearly 30 percent of the total number of housing loans financed by the agency from January to June. Pag-IBIG Fund financed 41,746 housing loans worth P37.07 billion in the first half to help members acquire or improve their homes. “Socialized housing is designed especially for minimum and lowwage workers. President Rodrigo Roa Duterte directed that there be government programs catering to this underserved sector. Hence, we have this housing program that is suited for their financial capacity,” said Secretary Eduardo D. del Rosario, chairman of the Housing and Urban Development Coordinating Council (HUDCC) and the Pag-IBIG Fund Board of Trustees. “This is the essence of the BALAI (Building Adequate, Livable, Affordable and Inclusive) Filipino Communities Program of
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