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(Mini Reads followed by Full Reports below)

LAGUNA LAKESHORE BIDDING FAILS; NO OFFERS FROM 3 BIDDERS


MARCH 29 -Photo shows the location map of the proposed Laguna Lakeshore Expressway Dike Project www.dpwh.gov.ph / No offers from 3 qualified bidders
The Department of Public Works and Highways (DPWH) was forced to terminate the bidding for the P123 billion Laguna Lakeshore Expressway-Dike project after no offers were made for the deal. “It’s a failed bidding,” Ariel Angeles, DPWH director for PPP service told reporters after all three qualified bidders did not submit offers. The three groups that had been expected to submit their bid documents yesterday were: Alloy Pavi Hanshin LLEDP Consortium (composed of Alloy MTD Capital BHD, Prime Asset Ventures Inc., Hanshin Engineering Constructions), San Miguel Holdings Corp. and Trident Infrastructure and Development Corp. (composed of Aboitiz Equity Ventures Inc., Ayala Land Inc., Megaworld Corp. and SM Prime Holdings Inc.). San Miguel Corp. president and chief operating officer Ramon S. Ang said the Laguna Lakeshore project is not feasible. “Government will have to re-examine its assumptions and redesign a mutually beneficial contractual structure best suited for a deal as large and complex as this one, given its potential to create opportunities that will generate the greatest benefit to a lot of people,” Ang said. READ MORE...

ALSO: LRT-2 bidding postponed anew


APRIL 3 -Member-secretary of the pre-qualification, bids and awards committee and assistant secretary for procurement at the Department of Transportation and Communication Camille Alcaraz, said the submission date has been moved from April 4 to a minimum of 10 days and a maximum of 30 days from the date when all final clearances and approvals have been obtained from the concerned government agencies. Philstar.com/File
The bidding for the operations and maintenance of the Light Rail Transit Line 2 (LRT-2) under the public-private partnership (PPP) program has been moved anew as the government still needs to secure approvals for the project.
Camille Alcaraz, member-secretary of the pre-qualification, bids and awards committee and assistant secretary for procurement at the Department of Transportation and Communication, said the submission date has been moved from April 4 to a minimum of 10 days and a maximum of 30 days from the date when all final clearances and approvals have been obtained from the concerned government agencies. The new bid submission date would be announced in a subsequent bulletin, she said. Prior to the April 4 deadline, the DOTC had set the bid submission date for the project on March 8. The deadline for submission of offers for the project was moved then as some of the pre-qualified bidders requested for a change in the composition of consortium members and list of sub-contractors. Groups pre-qualified to bid for the project are Aboitiz Equity Ventures Inc. and SMRT Transport Solutions consortium, D.M. Consunji Inc. and Tokyo Metro Co. Ltd. consortium, Light Rail Manila Holdings 2 Inc. consortium composed of LRMH of Ayala Corp. and Metro Pacific Investments Corp. (MPIC), RATP Transdev Asia, and RATP Development SA, and San Miguel Holdings Corp. and Korea Railroad Corp. consortium. READ MORE...

ALSO: China destroys 35 tons of Philippine bananas


MARCH 26 -WASTED BANANAS FROM THE PHL -Customs authorities at the southern Chinese city of Shenzhen destroyed 34.78 tons of "substandard bananas" imported from the Philippines due to excessive pesticide use, state TV said on Saturday.
The bananas, worth $33,000, were mashed and buried on Friday, state broadcaster CCTV reported, showing footage of digger mashing the fruit and moving them into a pit for landfill. CCTV said the sampling test indicated that the carbendazim contained in these bananas exceeded China's standard limits for pesticide residue in food. China would inform the Philippines of the incident and urge the country to take measures to ensure the quality and safety of the exported bananas to China, CCTV said. China is the Philippines' fourth-biggest export market after Japan, the United States and Hong Kong. Tensions between the two countries were rising amid the South China Sea dispute. The Philippines has brought against China over its South China Sea claims in the International Court of Arbitration in the Hague, and a ruling is expected in the next few months. In March 2012, China stopped a shipment of Philippine bananas, a month before the sea spat on the Panatag (Scarborough) Shoal erupted, after it found pests. Since then it has imposed stringent quarantine rules on other fruit from the Philippines. — Reuters  FULL REPORT.

ALSO: Foreign banks clamp down on RP transfers


APRIL 1 -BANKERS SEEK CLOSED-DOOR LAUNDERING PROBE
Bankers have sounded the alarm on the backlash of the scandal on the laundering in the country of $81 million stolen from the Bank of Bangladesh through hacking as foreign banks and governments have tightened their supervision over Philippine banks. Former Finance Secretary Roberto de Ocampo, who is now chairman of the Philippine Veterans Bank, urged the Senate yesterday to hold its subsequent hearings on the cyberheist “behind closed doors” to prevent the scandal from being a “global spectacle.” De Ocampo confirmed that Philippine banks’ remittance operations abroad experience tighter scrutiny from their partner foreign banks.  “That is bad news to our roughly 12 million OFWs (overseas Filipino workers). And that is only one example of problems we may be creating for ourselves over an isolated situation,” he said.“The money laundering issue we face started outside and appears to be largely limited to one branch of one bank. It appears to be an isolated case. Unfortunately for us, it has become a global spectacle,” De Ocampo said.De Ocampo said unintended consequences are starting to emerge and “be felt across the board” as the investigations are aired live on television. He said that holding the hearings behind closed doors “will yield even more information and thus be more productive.”  “Thus this investigation in aid of legislation could result in a positive outcome namely a strengthening of our AMLA (Anti-Money Laundering Act) law to include casinos in particular and the preservation of the globally recognized reputation of our banking system,” he said. De Ocampo warned that if adverse perceptions on the country’s banking system continues, “the gains we have had in the past will be at risk: our credit rating, foreign investments, economic growth and even our international banking and financial operations.” READ MORE...RELATED, Hacked Bangladesh Bank seeks Fed help to recover funds

ALSO: BSP wary over fallout, says RP banks stable


APRIL 3 -The Bangko Sentral ng Pilipinas (BSP) has moved to douse the fire threatening the entire banking industry as a result of the laundering in a local bank and casinos of $81 million believed stolen by hackers from the Bank of Bangladesh. Former Finance Secretary Roberto de Ocampo, speaking on behalf of the Bankers Association of the Philippines (BAP), has said that despite the theft and the subsequent laundering of the stolen funds having started overseas and was limited to one bank, the scandal has become a “global spectacle” as a result of the televised probe. BSP Gov. Amando Tetangco Jr., in a statement, said the Philippine banking system remains operationally sound and fundamentally strong based on “indicators on capitalization, asset quality, and the steady growth of assets, deposits and loans.”  He added the BSP is vested with the legal authority to take “appropriate enforcement actions against individual banks and their personnel for violation of banking laws and regulations as well as non-compliance with minimum regulatory standards on governance, risk management and market conduct.” Tetangco cited “the BSP’s track record demonstrates the will to decisively act by meting sanctions on erring bank directors and officers, restricting imprudent activities, prohibiting unsafe or unsound practices, and even shutting down banks.”  He said markets, which have become more attractive through financial stability, are also targeted destinations for capital flows.  “On this basis, the BSP said it has always recognized the urgency to maintain a strong prudential framework towards financial integrity as a necessary complement to financial stability,” he said. Ocampo lamented that as a result of the Senate investigation, “aired live on television” spawned unintended consequences that is “felt across the board.” “If we continue on this path, the gains we have had in the past will be at risk: our credit rating, foreign investments, economic growth and even our international banking and financial operations,” he warned. Tetangco said the BSP implements a comprehensive risk-based approach that is aligned with international best practices. “This particularly includes the Basel Committee’s standards as articulated in the updated Core Principles for Effective Bank Supervision,” he added. READ MORE...RELATED,
RCBC remains rock solid on its financials...

ALSO: By Gerardo Sicat - How our public infrastructure went poor -- A historical view


MARCH 30 -By Gerardo P. Sicat
Infrastructure investment is high on the list of issues that all the candidates for president keep harping on. So much is being promised by all. The biggest failure of the administration of President Aquino is in public infrastructure. True, he has widened the national highway system across the islands, but on the whole, he was more active in improving the process of review and contracting than in speeding up project implementation. He also stopped projects already on the way toward implementation by the previous administration. Infrastructure expansion is a long run proposition. Presidential terms are only for six years. During the last three decades, infrastructure quality has not kept pace with the country’s needs. It signals failure of leadership on this score. Before 1986: People Power revolt. As the 1980s opened, Philippine infrastructure was on course to be among the forward-looking programs in the ASEAN. Of the original ASEAN five (Indonesia, Malaysia, Philippines, Singapore, Thailand), the infrastructure facilities of the Philippines were at par with Thailand then, which was among the high growth economies of the region, and well ahead of Indonesia. This was on the collective mix of investments -- in roads, ports, in agricultural and industrial infrastructure. Infrastructure investment covered the country’s three main islands, each area being quite substantial. To deal more effectively with infrastructure construction, the government split the original infrastructure ministry so the units could focus more fully ontheir individual mandates – public works, road transport, and telecommunications. To consolidate the energy response to the oil crisis, the ministry of energy focused on power generation. Various institutional services to support infrastructure were given corporate structures to enable them to plan and implement efficiently. Corazon Aquino, 1986-1994. When she assumed office, Cory Aquino had inherited this extensive public infrastructure supporting economic development. Unfortunately, that legacy was not fully and effectively harnessed for the nation. Some of it was scuttled and quite a number of ongoing projects were stopped in their tracks. READ MORE...


READ FULL MEDIA REPORTS HERE:

Laguna Lakeshore bidding fails; No offers from 3 qualified bidders


Photo shows the location map of the proposed Laguna Lakeshore Expressway Dike Project www.dpwh.gov.ph/  No offers from 3 qualified bidders 

MANILA, APRIL 4, 2016 (PHILSTAR) By Louella Desiderio March 29, 2016 - The Department of Public Works and Highways (DPWH) was forced to terminate the bidding for the P123 billion Laguna Lakeshore Expressway-Dike project after no offers were made for the deal.

“It’s a failed bidding,” Ariel Angeles, DPWH director for PPP service told reporters after all three qualified bidders did not submit offers.

The three groups that had been expected to submit their bid documents yesterday were: Alloy Pavi Hanshin LLEDP Consortium (composed of Alloy MTD Capital BHD, Prime Asset Ventures Inc., Hanshin Engineering Constructions), San Miguel Holdings Corp. and Trident Infrastructure and Development Corp. (composed of Aboitiz Equity Ventures Inc., Ayala Land Inc., Megaworld Corp. and SM Prime Holdings Inc.).

San Miguel Corp. president and chief operating officer Ramon S. Ang said the Laguna Lakeshore project is not feasible.

“Government will have to re-examine its assumptions and redesign a mutually beneficial contractual structure best suited for a deal as large and complex as this one, given its potential to create opportunities that will generate the greatest benefit to a lot of people,” Ang said.

READ MORE...

In a letter to the DPWH, Alloy Pavi Hanshin LLEDP Consortium’s authorized representative Isaac David said there are unresolved issues affecting the propriety and validity of the procurement process for the project.

“With due respect, we strongly believe the bidding process is illegal and unenforceable transaction unless there is a signed presidential proclamation and signed tripartite agreement between PRA (Philippine Reclamation Authority)/LLDA (Laguna Lake Development Authority)/DPWH prior to the bidding,” he said.

David said it would be best for the bidding to be deferred until a new administration takes over to ensure transparency and fairness.

Roman Azanza, first vice president for business development at Aboitiz said Team Trident did not pursue participation in the bidding given concerns on the economic viability, balance of risks and rewards as well as securing financing for the project.

Given the complexity of the project, the group wanted more time to work with the government on a concession agreement that addresses the concerns of the private sector.

“If they (government) can come out with a revised CA that tackles most if not all of these concerns, then I think we would be willing to revisit (the project),” Azanza said.

DPWH Secretary Rogelio Singson said the government will have to look at the concerns raised by the pre-qualified groups.

“Well, we will have to assess why it failed. We received today some letters so we will have to assess,” Singson said.

While the PPP Center is committed to support DPWH to be on the project, PPP Center executive director Andre Palacios said a second bidding for the deal is unlikely within the term of President Aquino.

“For Lakeshore, I doubt if we can do another bidding within this administration,” Palacios said.

The Laguna Lakeshore Expressway Dike project involves the financing, design, construction as well as operations and maintenance of a 47-kilometer flood control dike with expressway toll roads under a 37-year cooperation period.

The project is also expected to reduce the travel time from Bicutan to Los Baños from 90 to 35 minutes.

The project is seen to provide a high standard highway with a dike that will ease traffic flow and mitigate flooding in western coastal communities along Laguna Lake. – With Evelyn Macairan, Czeriza Valencia


PHILSTAR

LRT-2 bidding postponed anew By Louella Desiderio (The Philippine Star) | Updated April 3, 2016 - 12:00am 1 2 googleplus0 0


Camille Alcaraz, member-secretary of the pre-qualification, bids and awards committee and assistant secretary for procurement at the Department of Transportation and Communication, said the submission date has been moved from April 4 to a minimum of 10 days and a maximum of 30 days from the date when all final clearances and approvals have been obtained from the concerned government agencies. Philstar.com/File

MANILA, Philippines – The bidding for the operations and maintenance of the Light Rail Transit Line 2 (LRT-2) under the public-private partnership (PPP) program has been moved anew as the government still needs to secure approvals for the project.

Camille Alcaraz, member-secretary of the pre-qualification, bids and awards committee and assistant secretary for procurement at the Department of Transportation and Communication, said the submission date has been moved from April 4 to a minimum of 10 days and a maximum of 30 days from the date when all final clearances and approvals have been obtained from the concerned government agencies.

The new bid submission date would be announced in a subsequent bulletin, she said.

Prior to the April 4 deadline, the DOTC had set the bid submission date for the project on March 8.

The deadline for submission of offers for the project was moved then as some of the pre-qualified bidders requested for a change in the composition of consortium members and list of sub-contractors.

Groups pre-qualified to bid for the project are Aboitiz Equity Ventures Inc. and SMRT Transport Solutions consortium, D.M. Consunji Inc. and Tokyo Metro Co. Ltd. consortium, Light Rail Manila Holdings 2 Inc. consortium composed of LRMH of Ayala Corp. and Metro Pacific Investments Corp. (MPIC), RATP Transdev Asia, and RATP Development SA, and San Miguel Holdings Corp. and Korea Railroad Corp. consortium.

READ MORE...

The LRT Line 2 Operation and Maintenance Project involves putting private sector efficiencies into the rail system which runs from Santolan station in Pasig City until Recto station in Manila, in order to provide a better service to passengers.

Under a 10-15 year cooperation period for the project, the private partner will handle the operation and maintenance of the existing LRT Line 2, the 4.14 kilometer east extension, and any other future extensions implemented by the government.

PPP Center executive director Andre Palacios earlier said the government was hopeful the LRT 2 OMP project could still be awarded before the end of President Aquino’s term.

The government earlier awarded other PPP projects on railways.

Light Rail Manila Corp. consortium composed of MPIC’s Metro Pacific Light Rail Corp., Ayala Corp.’s AC Infrastructure Holdings Corp., and Macquarie Infrastructure Holdings (Philippines) PTE Ltd. bagged the LRT Line 1 Cavite Extension and Operation and Maintenance PPP deal.

The Automatic Fare Collection System meanwhile, was won by AF Payments Inc., a consortium of MPIC and Ayala Corp.

Other rail deals under the PPP scheme up for bidding are the North South Railway Project (South Line) and the LRT Line 6 Project.

Launched in 2010, the PPP program is being implemented by the government to get the private sector involved in infrastructure development and to create more job opportunities.


GMA NEWS NETWORK

China destroys 35 tons of Philippine bananas Published March 26, 2016 5:51pm

Customs authorities at the southern Chinese city of Shenzhen destroyed 34.78 tons of "substandard bananas" imported from the Philippines due to excessive pesticide use, state TV said on Saturday.

The bananas, worth $33,000, were mashed and buried on Friday, state broadcaster CCTV reported, showing footage of digger mashing the fruit and moving them into a pit for landfill.

CCTV said the sampling test indicated that the carbendazim contained in these bananas exceeded China's standard limits for pesticide residue in food.

China would inform the Philippines of the incident and urge the country to take measures to ensure the quality and safety of the exported bananas to China, CCTV said.

China is the Philippines' fourth-biggest export market after Japan, the United States and Hong Kong. Tensions between the two countries were rising amid the South China Sea dispute.

The Philippines has brought against China over its South China Sea claims in the International Court of Arbitration in the Hague, and a ruling is expected in the next few months.

In March 2012, China stopped a shipment of Philippine bananas, a month before the sea spat on the Panatag (Scarborough) Shoal erupted, after it found pests.

Since then it has imposed stringent quarantine rules on other fruit from the Philippines. — Reuters


TRIBUNE

Foreign banks clamp down on RP transfers Written by Angie M. Rosales Friday, 01 April 2016 00:00



BANKERS SEEK CLOSED-DOOR LAUNDERING PROBE

Bankers have sounded the alarm on the backlash of the scandal on the laundering in the country of $81 million stolen from the Bank of Bangladesh through hacking as foreign banks and governments have tightened their supervision over Philippine banks.

Former Finance Secretary Roberto de Ocampo, who is now chairman of the Philippine Veterans Bank, urged the Senate yesterday to hold its subsequent hearings on the cyberheist “behind closed doors” to prevent the scandal from being a “global spectacle.”

De Ocampo confirmed that Philippine banks’ remittance operations abroad experience tighter scrutiny from their partner foreign banks.

“That is bad news to our roughly 12 million OFWs (overseas Filipino workers). And that is only one example of problems we may be creating for ourselves over an isolated situation,” he said.

“The money laundering issue we face started outside and appears to be largely limited to one branch of one bank. It appears to be an isolated case. Unfortunately for us, it has become a global spectacle,” De Ocampo said.

De Ocampo said unintended consequences are starting to emerge and “be felt across the board” as the investigations are aired live on television.

He said that holding the hearings behind closed doors “will yield even more information and thus be more productive.”

“Thus this investigation in aid of legislation could result in a positive outcome namely a strengthening of our AMLA (Anti-Money Laundering Act) law to include casinos in particular and the preservation of the globally recognized reputation of our banking system,” he said.

De Ocampo warned that if adverse perceptions on the country’s banking system continues, “the gains we have had in the past will be at risk: our credit rating, foreign investments, economic growth and even our international banking and financial operations.”

READ MORE...

Another source, recruitment consultant Emmanuel Geslani said in a television interview that financial authorities abroad have been asking Philippine banks to close down remittance programs in foreign jurisdictions.

Geslani said that what is being experienced now are “only delays but many of our local and Philippines banks have been closing down (their remittance operations) in several cities all around the world.”

RCBC hub in Italy closed



The remittance operations of Rizal Commercial Banking Corp. (RCBC), the bank which is at the center of the scandal, had closed its remittance operations in Italy.

In a statement, however, the bank said its remittance center was closed “because it could not meet on time the computer systems capabilities required of it by Banca D’Italia since 2014.”

“The closure is not in any way related to the current issue on money laundering,” RCBC global transactional banking head Manny Narciso said.

“The impact of the closure on operations and profitability will be minimal, since this is a relatively low margin business with high operating costs. Nevertheless RCBC wishes to continue serving the remittance needs of Filipinos in Italy, and we are therefore trying to find better ways to do so,” Narciso added.

De Ocampo said that while the Senate has its mandate to investigate, he urged “sobriety and circumspection lest we unwittingly put national interest at risk.”

“With this in mind, if we must continue to dig deeper, we must spare our institutions and our nation which has shown tremendous growth potential in the past years,” he added.

“Our banking system is strong and our bankers noted to be among the best in the region. Our BSP governor has even been recognized more than once as central bank governor of the year. Even the embattled RCBC is among our most reputable banks and has served the public well over many decades,” he said.



I-Remit CEO Bansan Choa said in another television interview 38 foreign banks in 16 countries closed a total of 89 bank accounts of local remittance firms.

“They (foreign banks) were saying the most of the bank and non-bank remittance companies are not complying with the AMLC (Anti-Money Laundering Council),” Choa said.

Choa estimated that about $1.4 billion in potential remittances were foregone due to the closure of the local money transfer hubs.

According to online news outfit Rappler, the remittance company of RCBC in Italy faced a hefty fine of $74,445.10 (P3.413 million) for its failure to comply with the country’s stringent anti-money laundering (AML) enforcement.

Subsequently, RCBC Telemoney Europe S.P.A was forced to end its remittance operations because of an order issued by the Banca d ’Italia, the central bank of Italy, on February 23, 2016.

BPI Europe Plc has informed its customers that it will close its Rome and Milan branches effective June 1 this year.

“In compliance with anti-money laundering and other UK regulations, BPI (Europe) Plc is currently requiring all of its clients to update their records with us,” BPI said in a statement.

Finance Secretary Cesar Purisima said the Department of Finance (DoF) supports the passage of an amendment to the Anti-Money Laundering Act (AMLA) on an urgent basis.

The DoF has long been vocal against the highly restrictive provisions protecting money launderers and tax evaders behind the veil of bank secrecy and thus supports relaxing it under certain circumstances.

Purisima said the DoF likewise supports the inclusion of casinos and real estate dealers in the list of covered institutions for transactional reporting.

“The DoF believes that the power to suspend transactions ought to be granted to the AMLC, and that the Bangko Sentral ng Pilipinas be given supervisory authority over remittance companies,” he said.

The DoF also noted how tax evasion is curiously left out of the AMLA, handicapping investigators and depriving the government of the legal means to go after tax evaders, and by extension, money launderers who obviously did not pay taxes for their cash inflows.

“The Philippines is only 1 of 3 countries in the entire world where tax authorities cannot access bank transactions (Switzerland and Lebanon being the other 2), and remain only 1 of only 2 countries in the world where tax evasion is not a predicate crime to money laundering,” Purisima said

Internal Revenue Commissioner Kim Jacinto-Henares said “far too often criminals have hidden behind bank secrecy laws.

It’s time to pierce the veil, within reason and under certain circumstances. If this saga reveals anything, it is that our laws need a serious updating.”

Chinese connection seen

The probability is not remote that the brains behind the plotting and execution of the $81 million cyber bank heist are Chinese nationals who operated even possibly in mainland China, Senate President pro tempore Ralph Recto said.

“This has all the makings of a ‘made in China’ problem. This problem was created by those from outside (of the country), not in the Philippines,” Recto added underscoring his observations that the entire scheme appears to have the signature of Chinese operations.



There are also reasons to believe, following the revelations made in the ongoing Senate blue ribbon committee investigation, that the country has also fallen victim in the cunning plan that raided the treasury of the Bank of Bangladesh and saw the laundering of the stolen money in the Philippines.

He said just like in a conventional bank robbery, “the robbers are not Filipinos, the accomplices are not Filipinos, the guards are not Filipinos, (the driver of a) get-away car is also not a Filipino.”

The problem was that the get-away car was parked in a garage owned by a Filipino, he said.

The Senate leader said the New York Federal Reserve washed its hands while the Filipinos have been trying the Bangladesh government.

“The early frantic calls of the Bangladesh Central Bank head were not even answered by New York. Even if Chinese nationals were involved, and I am not referring to Kim Wong, not a word was spoken from Beijing. If one small boat comes near Panatag Shoal, the Chinese government raises hell but in this case where a huge amount of money was lost, it fell silent,” he said.

-----------------------------------------------------

RELATED FROM THE INQUIRER

Bangladesh Bank seeks Fed help to recover funds @inquirerdotnet The Daily Star/Asia News Network 02:26 PM March 28th, 2016


PHOTO FROM THE DAILY STAR/ASIA

Bangladesh Bank (BB) has written a letter to the Federal Reserve chair seeking assistance to recover its funds stolen by cyber thieves.

Fazle Kabir, who took the reins of the central bank on March 20, also sent similar letters of late to Bangladesh’s permanent representative in the United Nations, the governor of the Philippines’ central bank and the head of its anti-money laundering council.

READ: Hackers steal $100M from Bangladesh bank

“We have launched a coordinated battle to recover the stolen funds,” Shubhankar Saha, executive director and spokesman of the BB, told The Daily Star.

“The new governor has requested the Fed to probe whether there was any fault on their part in disbursing the funds,” he said.

Bangladesh’s central bank lost US$101 million to hackers from its foreign currency reserve account with the Federal Reserve Bank of New York on February 5.

The Fed released the funds against five payment orders. Cyber thieves made another 30 payment orders, worth around $800 million, but those attempts were thwarted by the US central bank.

READ MORE...

Upon a request from the BB, Pan Asia Banking Corporation of Sri Lanka cancelled the payment of $20 million to its ultimate beneficiary. But the $81 million that entered the Philippines’ banking system was credited to beneficiary accounts with the Rizal Commercial Banking Corporation and eventually withdrawn.

READ: 6 Sri Lankans banned from leaving after Bangladesh bank hack

“We want to know why payments were made against the five orders and what the issue was with the rest 30 orders. Did the Fed follow the right procedures?” Saha said.

Soon after the incident, Andrea Priest, a New York Fed spokeswoman, said the payment instructions in question were fully authenticated by the SWIFT messaging system in accordance with standard authentication protocols.Earlier in February, a BB team visited the Philippines to talk to their counterparts on the issue.

RELATED STORIES

PH blocks $870M stolen from Bangladesh

Bangladesh central bank governor quits over $81m heist


TRIBUNE

BSP wary over fallout, says RP banks stable Written by Tribune Wires Sunday, 03 April 2016 00:00

The Bangko Sentral ng Pilipinas (BSP) has moved to douse the fire threatening the entire banking industry as a result of the laundering in a local bank and casinos of $81 million believed stolen by hackers from the Bank of Bangladesh.

Former Finance Secretary Roberto de Ocampo, speaking on behalf of the Bankers Association of the Philippines (BAP), has said that despite the theft and the subsequent laundering of the stolen funds having started overseas and was limited to one bank, the scandal has become a “global spectacle” as a result of the televised probe.

BSP Gov. Amando Tetangco Jr., in a statement, said the Philippine banking system remains operationally sound and fundamentally strong based on “indicators on capitalization, asset quality, and the steady growth of assets, deposits and loans.”

He added the BSP is vested with the legal authority to take “appropriate enforcement actions against individual banks and their personnel for violation of banking laws and regulations as well as non-compliance with minimum regulatory standards on governance, risk management and market conduct.”

Tetangco cited “the BSP’s track record demonstrates the will to decisively act by meting sanctions on erring bank directors and officers, restricting imprudent activities, prohibiting unsafe or unsound practices, and even shutting down banks.”

He said markets, which have become more attractive through financial stability, are also targeted destinations for capital flows.

“On this basis, the BSP said it has always recognized the urgency to maintain a strong prudential framework towards financial integrity as a necessary complement to financial stability,” he said.

Ocampo lamented that as a result of the Senate investigation, “aired live on television” spawned unintended consequences that is “felt across the board.” “If we continue on this path, the gains we have had in the past will be at risk: our credit rating, foreign investments, economic growth and even our international banking and financial operations,” he warned.

Tetangco said the BSP implements a comprehensive risk-based approach that is aligned with international best practices.

“This particularly includes the Basel Committee’s standards as articulated in the updated Core Principles for Effective Bank Supervision,” he added.

READ MORE...

“Well-trained (onsite) bank examiners and (offsite) bank supervisors periodically assess whether banks have the requisite overall governance framework to manage emerging risks. This includes mainstream risks on credit quality, market price movements and bank operations. In addition, specialist examination teams are in place to evaluate the effectiveness of a bank’s prevention program to ensure bank handling of the risks out of IT (information technology) and cyber security issues, money laundering and terrorist financing,” he added.

The money laundering watchdog Financial Action Task Force (FATF) said it will be sending a representative to the country soon for a new assessment on the country after the international group just recently removed the country from a watchlist of dirty money havens.

“On our own and as a collective body with other financial regulators, we have also focused specifically on the potential build up of systemic risks,” Tetangco said.

“The issues that we have been assessing covers quite a bit of ground, but they are inter-related by the common strand that they can create comingled risks that can be systemic in nature” he added.

Tetangco said the BSP has established a Financial Stability Committee made up of senior officials while the Financial Stability Coordination Council is made up of the Securities and Exchange Commission, the Insurance Commission, the Philippine Deposit Insurance Corp., the Department of Finance, the Bureau of Treasury, and the BSP.

“The BSP is very cognizant of the need to nurture financial stability but is also well aware that this must be aligned with the absolute objective of ensuring the integrity of the financial system,” Tetangco added.

He noted that several third parties have commented that the Philippines remains to be in a position of strength amid global volatilities since late 2015.

“These reforms also enable our banks to perform their role as catalysts of development under the ASEAN Vision 2020,” he said.

Wong pins scam on Deguito


DEQUITO

At the center of the controversy is the Yuechengco-owned RCBC which a casino junket operator probed in the Senate claimed top officials of the bank have no involvement in the scandal.

Kim Wong, who testitied in the probe of what is considered Asia’s biggest money-laundering case, cleared RCBC officials including president on-leave Lorenzo Tan of any involvement in the heist.

Tan was president of the BAP from 2013 to 2016 and chairman of the Asian Bankers Association from 2012 to 2014.

Wong, instead, told Senate investigators that it was the assistance of dismissed RCBC Jupiter Branch manager Maia Santos Deguito and PhilRem Service Corp. (PhilRem) to two big-time Chinese casino players that resulted in the laundering operation.

In a prepared statement that he read during the third hearing of the Senate blue ribbon committee, Wong said two Chinese casino players — Sua Hua Gao and Ding Zhize — were the ones who had masterminded this cyber crime, while Deguito was the one who did everything to facilitate the transfer of the money to fictitious dollar accounts at the RCBC Jupiter Branch in Makati City and the subsequent release of such funds from this bank.

PhilRem, in turn, was the entity that had remitted the $81 million — in several tranches in either dollar or peso notes — to the two casino players, Wong said.

When asked by Sen. Joseph Victor Ejercito later at the hearing if he was certain that Tan was never involved in the scam, Wong said: “I will stake my life in this, he does not know anything about it. I am referring to Mr. Tan. I will guarantee that.”

When Wong was asked earlier by Sen. Juan Ponce Enrile to comment on Deguito’s previous testimony that in one private party, Tan told her to take good care of Wong, he said this was not true.



Wong confirmed that he knew Deguito and had given her business when she was still connected with another bank (East-West Bank) but denied Deguito’s claim in her testimony.

Tan’s counsel Francis Lim said that Wong’s expose against Deguito and PhilRem and his statement clearing Tan of any involvement in the money laundering scheme proves that Deguito had unduly dragged Tan in this controversy in a “shrewd design” to muddle the issues in the ongoing Senate probe and “obscure her role as a principal player” in this heist.

Lim said in a statement that “Wong’s revelation reinforces that this $81-M heist was a plot carried out without the knowledge or consent of Mr. Tan, but rather executed with the indispensable assistance of Deguito in cahoots with unscrupulous persons not connected with the bank’s head office.”

“It vindicates our position that Ms. Deguito has maliciously dragged Mr. Tan into the fray in a shrewd design to muddle the issues before the Senate and confuse the public to obscure her role as a principal player in this money-laundering scheme,” Lim added.

RCBC is owned by the Yuchengco family, Cathay Financial Holdings Corp. — the largest financial services group in Taiwan — and the International Finance Corp. (IFC), which is the a member of the World Bank (WB) Group.

Deguito had unduly dragged Tan into this controversy by initially claiming he had knowledge of the scheme, but she later told the Senate that Tan actually had nothing to do with the opening of the bank accounts to which the laundered $81 million was remitted last February.

RCBC has pointed out, meanwhile, that “no evidence has been presented against Tan linking him to this issue,” and that its Board of Directors has “taken cognizance of the statement of Deguito before the Senate that Tan had nothing to do with the opening of the accounts that received the $81-million remittance.”

Tan first offered to go on leave on March 12, but the bank’s Board turned down what Lim described as his “gentlemanly and decent gesture,” as the owners and management vouched for his integrity and affirmed their trust in him.

But Tan made a second offer to go on leave during the Holy Week and insisted that the Board accept it so he could devote his time to clearing his name in the bank’s internal probe.

Lim said, “This was to avoid any perception of any undue influence on his (Tan) part in the ongoing internal investigation on the matter. It would also give him more time to address baseless personal attacks against him.”

At the start of the Senate inquiry last March 15, Tan told the Senate blue ribbon committee in a statement that: “I condemn as malicious and actionable insinuations that the top management of the bank knew of and tolerated alleged money laundering activities in one branch. I will fully cooperate with all ongoing inquiries and believe that I and consequently the bank’s management will be fully vindicated.”

In Tuesday’s resumption of the Senate probe of this $81-million money-laundering scheme, Wong said Deguito was the one who had opened four fictitious dollar accounts at her RCBC Jupiter Branch to which the stolen cash was deposited last February 5.

The money, which was remitted in four tranches, was later on consolidated in an account under the name of businessman William So Go.

However, Go testified at the Senate during the first hearing last March 15 that he never opened such an account at the Jupiter branch and has never even set foot in that bank.

Go also told senators in the first Senate hearing that Deguito later met with him at the Serendra Piazza to confess that she had opened a dollar account without his knowledge or consent, and offered him P10 million as payment for her transgression.

In the prepared statement that he read during the hearing, Wong said: “Maia did all the spadework to bring out the money from the bank.”

He added that, “It was also Maia who forged the five bank accounts. I referred only one foreigner to her.”

He later on identified this foreigner as Sua Hua Gao, whom he said was a Chinese big-time casino player from Beijing.
He also identified another foreigner junket player named Ding Zhize as part of the scam.

In his testimony, Wong said that Deguito tried to convince him to open an account at the RCBC Jupiter branch, during her meeting with him and Gao at Wong’s Midas Hotel office.

When Gao said that he was interested in opening a dollar account to facilitate the transfer of money for his casino operations, Wong said that Deguito replied “ako na ang bahala” in opening five accounts for this purpose.

On February 5, Wong said Deguito called him several times the whole day to inform Wong of the entry of $81 million — in five tranches consisting of $6 million, $25 million, $30 million and $20 million — in the four accounts.

Wong then requested that a part of the money be sent to Gao at the Solaire Casino, to which Deguito complied.

Wong presented to the committee a CCTV foto of Maia’s vehicle entering Solaire that night to deliver part of the funds and his own foto of the cash being delivered to the casino.

Wong said that he then got a total of $5 million and P300 million from the house of PhilRem executive Michael “Con Con” Bautista.

He said that he got P100-M cash and $3-M from Bautista at the latter’s house on February 9, another P100-M and $2-M on February 10 and P100 million more on February 14.

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RELATED FROM PHILSTAR

RCBC: Still rock solid HIDDEN AGENDA By Mary Ann LL. Reyes (The Philippine Star) | Updated April 3, 2016 - 12:00am 0 15 googleplus0 0


By Mary Ann LL. Reyes

Whatever the public perception is on the issue of money laundering, the Rizal Commercial Banking Corp. (RCBC) remains to be rock solid on its financials.

RCBC is the 7th largest privately-owned local bank with over P500 billion ($11 billion) in total assets, over P59 billion in capital funds and a very strong 16 percent capital adequacy ratio (CAR) as of February 2016. The CAR is a measure of a bank’s capability to absorb losses. It can be seen as a bank’s airbag, similar to those installed in cars to protect us in case of accidents. For RCBC, the 16 percent CAR is much higher than the regulatory requirement of 10 percent.

Even the more stringent Common Equity Tier 1 Ratio of the bank is strong at 12.88 percent also exceeding the minimum regulatory requirement (with capital conservation buffer) of 8.50 percent.

Over the past seven years, the bank has consistently worked on building financial strength, raising a total of P27.6 billion of capital since 2007 and unloading P4.7 billion of legacy non-performing assets from the Asian crisis.

Further fundamentals show that the bank has performed well in 2015 and has a strong balance sheet with non-performing loans (NPLs) at historical lows of 0.79 percent ratio and high NPL coverage 102 percent ratio. Provisions are said to be flat while credit cost was reduced at 0.8 percent.

The bank’s credit quality and strength was even supported by the recent upgrade of Moody’s. In May 2015, RCBC received a rating upgrade to Baa3 (stable) by Moody’s Investor Services from Ba2.

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According to Moody’s website, the upgrade of the long-term ratings of RCBC reflects the consistent improvement in the credit profile of the bank, backed by favorable operating conditions in the Philippines.

It said that “the upgrade of the bank’s BCAs and adjusted BCA to ba1 from ba3 reflects improvements in their asset quality profiles during a period in which new non-performing loans (NPL) formation has remained low in the Philippines. In addition, the bank’s capital buffers have improved, following Cathay Life’s P7.95 billion investment in new equity of RCBC, which was completed in April 2015.”

Other rating agencies have likewise recognized the bank’s stronger financial with upgrades, such as those by Fitch Ratings and Capital Intelligence in 2013.

RCBC has also continued to show its commitment to staying strong for its customers. At the onset, the bank has cooperated with the AMLC and complied with all their requirements. And the bank has given information to the public and the Senate related to the matter within legal limits.

RCBC and its officials have apologized for the involvement of their personnel in the money laundering scheme which is now the subject of Senate Blue Ribbon and AMLC investigations. The bank has also vowed to cooperate with these and any subsequent government proceedings within legal bounds.

The bank revealed that it is conducting its own inquiry and has engaged the help of SGV auditors and external counsel to help identify and address any weaknesses in its controls and operations which may have facilitated the scheme.

Upon the recommendation of the auditors, RCBC said that it will take appropriate action against any bank officer or staff found guilty of fault or negligence, and there may be changes in processes and policies as a result of the investigation.

BPOS still driving demand

The business process outsourcing (BPO) industry is still the main driver of the office market in the coming years and given this continued strong demand, more than one million square meters of office space are planned to open in the next two years in major business districts in Metro Manila, according to the latest report from Pinnacle Real Estate Consulting Services.

Despite this figure appears high, Pinnacle director for research and consulting Jojo Salas noted that overall vacancy across these business districts is still at a manageable six percent, from five percent at the end of 2015. Overall Grade A and Prime Grade A office stock in Metro Manila is approximately five million square meters, the report said.

In its Real Estate Market Insight for the first quarter, Pinnacle Research said big tenants would still have a hard time looking for suitable office, especially if they need contiguous floors. It is still a landlord’s market, the report said, thus, the landlords are still the winners in this segment.

The report revealed that rents in the Makati Central Business District (CBD) generally held up, where Premium Grade A buildings have a weighted average of P1,280 per sqm per month, Grade A buildings P865 per sqm per month, and Grade B&C buildings, P675 per sqm per month.

Pinnacle Research observed that some Grade B&C buildings, and even Grade A buildings are slightly lowering their asking rates due to competition from newer and better stocks in Bonifacio Global City, and other CBDs.

The weighted average rent in BGC is P870 per sqm per month while that for Grade A office buildings in Ortigas, Alabang, Quezon City, and Bay Area business districts is estimated at P650 per sqm per month. In Cebu, average Grade A office rent is P500 per sqm per month, while in Davao the average rent is P450 per sqm.

According to Pinnacle, much has been said about the fear of property bubble in the residential condominium market and that iven the estimated demand for housing at 5.5 million for this year, it is really a concern of right match of the supply being built vis-a-vis the actual demand.

For the residential condominium market, Salas said that what is a more accurate picture is that the residential segment of the real estate market is the most competitive at present since a lot of players have experienced high profitability in recent years.

Pinnacle pointed out that given the numerous developments in Metro Manila, the winners in this property segment are the buyers since there are a lot of choices, and financing is relatively easy. Likewise, future tenants of these residential units, especially those units bought as investment, would also be winners, enjoying the available choices as well as the competitive rents, it said.

The report added that rents have been generally stable, given the wide range of options in the market. Luxury condominium units command the highest rents that plateaued at P300,000 per month-level for big units of 300 sqm-cut. The typical rental range for luxury two-bedroom and three-bedroom units is between P120,000 to P250,000 depending on the size, location and furnishing. For the luxury and high-end segment, there are limited choices for rent.

Pinnacle also revealed that leasing of studio and one-bedroom units is stable and still ranges between P15,000 to P30,000, and may reach the P50,000 per month-level, depending on the location, furnishing, and amenities of the condominium building. It would be worthwhile to monitor the rents of one-bedroom and studio units to evaluate the yields of these “investment units,” it said.


PHILSTAR by Gerardo Sicat

How our public infrastructure went poor -- A historical view CROSSROADS (Toward Philippine Economic and Social Progress) By Gerardo P. Sicat (The Philippine Star) | Updated March 30, 2016 - 12:00am 0 10 googleplus0 0


By Gerardo P. Sicat

Infrastructure investment is high on the list of issues that all the candidates for president keep harping on. So much is being promised by all.

The biggest failure of the administration of President Aquino is in public infrastructure. True, he has widened the national highway system across the islands, but on the whole, he was more active in improving the process of review and contracting than in speeding up project implementation. He also stopped projects already on the way toward implementation by the previous administration.

Infrastructure expansion is a long run proposition. Presidential terms are only for six years. During the last three decades, infrastructure quality has not kept pace with the country’s needs. It signals failure of leadership on this score.

Before 1986: People Power revolt. As the 1980s opened, Philippine infrastructure was on course to be among the forward-looking programs in the ASEAN.

Of the original ASEAN five (Indonesia, Malaysia, Philippines, Singapore, Thailand), the infrastructure facilities of the Philippines were at par with Thailand then, which was among the high growth economies of the region, and well ahead of Indonesia.

This was on the collective mix of investments -- in roads, ports, in agricultural and industrial infrastructure. Infrastructure investment covered the country’s three main islands, each area being quite substantial.

To deal more effectively with infrastructure construction, the government split the original infrastructure ministry so the units could focus more fully ontheir individual mandates – public works, road transport, and telecommunications. To consolidate the energy response to the oil crisis, the ministry of energy focused on power generation.

Various institutional services to support infrastructure were given corporate structures to enable them to plan and implement efficiently.

Corazon Aquino, 1986-1994.

When she assumed office, Cory Aquino had inherited this extensive public infrastructure supporting economic development. Unfortunately, that legacy was not fully and effectively harnessed for the nation. Some of it was scuttled and quite a number of ongoing projects were stopped in their tracks.

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The political program of retribution against Ferdinand Marcos led her to dismantle part of that important legacy. The most well-known of this was the abolition of the energy ministry. That act reduced the program’s focus on energy development during this period. Moreover, she scuttled the nuclear power plant that was ready to come on stream.

This action led to the electricity crisis of the 1990s – a very sad economic episode for the whole nation.

The Cory Aquino presidency exhausted part of the public infrastructure put in place by the Marcos administration. Hardly much was added by way of new construction and so much of existing infrastructure deteriorated for lack of maintenance.

The reason, of course, was that the country had a tight budget constraint that could hardly make room for investments. This problem was partly self-inflicted.

Mrs. Aquino had amassed great political capital with the “people power victory over dictatorship” that a wiser leadership could have used. Instead, she embarked initially with a hostile and inexperienced approach to the country’s international creditors that closed windows of opportunity that had opened to her.

For those who wonder at this statement, the US Treasury gave an emergency lifeline to Mexico to save that country from economic disaster when a second debt problem arose again in the early 1990s.

Also, just recently, the new president of Argentina, Mauricio Macri, got a sizable external loan to bring the country back to economic health.

Remember, too, that Indonesia and Thailand received massive external aid when faced with the consequences of the 1997 East Asian financial crisis.

Fidel Ramos, 1995-2000.

Much of the presidency of Fidel Ramos was spent addressing the electricity gap that was left by Mrs. Aquino and paved the way for the resurgence of the building of public infrastructure. He had, in his own words, “to hit the ground running.”

Ramos was the most hardworking and talented post-1980s president of the nation.

He knew where to put the economic reforms to work, beginning with the opening up of the telecommunications sector and the privatization program to free more resources for public infrastructure.

Had he labored with a better endowment of infrastructure legacy than the massive messy problems that he had inherited, he could have laid the groundwork for broader economic advance on the infrastructure front.

He was the best argument for having much longer terms for presidents while those who followed him represented the best reasons why the presidential term should be a single and even shorter one.

Gloria Macapagal-Arroyo (and Estrada) years, 2001-2010.

There being little by way of infrastructure investments in the short Estrada years before he was ousted by People Power II, the next substantial stage of development was during the Gloria Macapagal-Arroyo years.

For one, her stay in office was long and exceeded the usual single term of six years. She succeeded the four years of Estrada’s unfinished term as the legal vice president before she was elected to a full term of six years.

Unfortunately, these were turbulent years, for after the “Hello, Garci” scandal (which implied a less than honest election process), her legitimacy was badly damaged, and her decisions in office became cluttered by political survival issues.

The result of this was mediocre performance in infrastructure investments. The only major program of new road construction was the SCTEX – the road connecting Subic to Tarlac and the North Expressway in Luzon.

There were improvements and expansions of the South Expressway and its expansion to Batangas, the improvement rehabilitation of existing roads and the initial programs designed to build a more extensive Ro-Ro transport system across the islands.

The main airport expansion in Manila, which was finished during this period, got locked up by an extended corruption scandal and by a decision to withhold its opening for some years.

Major infrastructure programs ended up in corruption scandals that led to them being held up or abandoned by the Noy Aquino administration when they took over, even after significant project funds had been spent.


The Roll-on, Roll-off, popularly known as RoRo, is an inter-island system of transportation that involves the driving of a motorized land vehicle in and out of an inter-island ferry or cargo ship. It is President Gloria Macapagal Arroyo's key development strategy to reduce the cost of inter-island transportation, and support the agri-fisheries modernization and food security programs of the Philippine Government. It offers an efficient and easier way to travel, therefore facilitating interaction, trade and tourism among the different regions of the Philippines. This process is made possible by nautical highways, with ports and ships that have facilities designed for transporting motorized vehicles.WIKIPILIPINAS.ORG

This was the case with Ro-Ro investments (arranged with French support) and in railway systems and telecommunications improvements (arranged with Chinese financing).

My email is: gpsicat@gmail.com. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/


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