PHILIPPINE HEADLINE NEWS ONLINE: Since 1997 © Copyright (PHNO) http://newsflash.org



BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

FILIPINO BILLIONAIRES LISTED IN PANAMA PAPERS DATABASE


MAY 10 -A marquee of the Arango Orillac Building lists the Mossack Fonseca law firm, in Panama City, Monday, April 4, 2016. Panama's president says his government will cooperate "vigorously" with any judicial investigation arising from the leak of a vast trove of information on the offshore financial dealings of the world's rich and famous. An international coalition of media outlets Sunday published investigations it said stemmed from the leak of 115 million records kept by the Panama-based law firm Mossack Fonseca on behalf of clients. AP/Arnulfo Franco 
Some of the Filipinos included in the Forbes magazine's annual billionaires list are also listed in the biggest leak of tax records from Panamanian law firm Mossack Fonseca. The International Consortium of Investigative Journalists published the database of the Panama Papers which includes nearly 214,000 offshore entities created in 21 jurisdictions. READ: ‘Panama Papers’ list global tax avoiders SM Prime Holdings chair Henry Sy Jr., eldest son of Henry Sy Sr., was listed as a shareholder of Success House International Limited, registered in the British Virgin Islands, and Ideal International Ltd., registered in Samoa. Sy Sr. and his family, with a net worth of $13.3 billion this year, remain the richest in the Philippines, according to Forbes.
Emperador Distillers owner Andrew Tan was listed as a beneficiary of Shiok Success International Ltd., registered address in Macau, and Dew Dreams International Ltd., with registered address in Quezon City, Philippines. Tan, who is also affiliated with Megaworld, McDonald's and Resorts World Manila, ranks sixth in the list of Filipino billionaires. Three members of the Angara clan, Henry Sy Jr. and Irene Marcos-Araneta are among the prominent Filipinos also listed in the Panama Papers database. READ MORE...

ALSO: Duterte presidency will not kill Philippine economy, expert says[RELATED: Duterte’s challenges and opportunities - By Roberto Romulo]


MAY 10 -Front-running presidential candidate Mayor Rodrigo Duterte gestures at photographers to move back prior to voting in a polling precinct at Daniel R. Aguinaldo National High School at Matina district, his hometown in Davao city in southern Philippines Monday, May 9, 2016. Duterte was the last to vote among five presidential hopefuls. AP / Bullit Marquez
A Duterte presidency will not lead to a loss of investments or economic ruin as some critics have warned, according to a professor of Economics at the University of Santo Tomas.
Professor Emmanuel Lopez, who has a doctorate in economics and is chair of the economics department at UST's Faculty of Arts and Letters, said that the business community may be "very jittery" because of the elections, but he expects things to stabilize once Duterte - who is expected to be proclaimed president-elect in coming days - names his economic managers. "I think it will not happen," he said of warnings that Duterte, whose campaign focused on a promise to eradicate drugs and crime, may be detrimental to the country's economic growth. He said that the business community will stabilize "after the smoke of battle has cleared" and the new president appoints a Finance secretary and names officials to bodies like the Board of Investments. The Manila Times reported on May 8 that a London-based think tank said Duterte might undo the gains of recent years, when gross domestic product grew an average of 6.3 percent according to government data. The report quoted Capital Economics Asia economist Gareth Leather as saying “there is a real risk that Aquino’s most important achievements could quickly start to unravel.” The camp of Liberal Party standard-bearer Manuel "Mar" Roxas - at a distant second place according to partial election results - also criticized Duterte for not discussing economic policies at a forum with the Makati Business Club in April. "Ignorance about the economy cannot be remedied by hiring advisers. The candidate must have a good grasp of the issues and take the matter seriously. This is an issue that involves jobs, income, and price of goods. This is a matter of life for our families," Akbayan Rep. Ibarra Gutierrez, Daang Matuwid coalition spokesperson, said. READ MORE...RELATED, Duterte’s challenges and opportunities...

ALSO: Duterte's transition team bares 8-point economic plan
[RELATED: Duterte and the economy - By Boo Chanco]


MAY 13 -Presumptive president Rodrigo Duterte's economic team said the national government will follow the "Davao model" where licenses in doing business are given in the shortest possible time.
The transition team of presumptive president Rodrigo Duterte on Thursday bared the eight-point economic agenda of the incoming administration. In a televised press conference in Davao City, Carlos Dominguez, a member of the Duterte transition team, enumerated Duterte's plans that centered on taxes, infrastructure, social services and rural development. Dominguez, a former Cabinet secretary for the Corazon Aquino and Fidel Ramos administrations, said that foremost, the incoming government will continue and maintain the country's current macroeconomic policy.
"However, in the case of tax revenue collection, efforts will be complemented by reforms in the bureaucracy of the tax-collecting agencies. This will fulfill the president-elect's promise that there will be less corruption in the government," he said. Secondly, Dominguez said the Duterte administration will accelerate the public-private partnerships to create jobs and inject economic activity in the country. "We are going to hold the people to their contracts," he said. Dominguez said the incoming administration will also ensure the attractiveness of the Philippines to foreign direct investments by easing economic restrictions and by enhancing competitiveness of doing business in the Philippines. He said the national government will follow the "Davao model" where licenses in doing business are given in the shortest possible time. In addition, Dominguez said this "also means reducing crime in the areas to increase the security of businessmen and consumers." Fourth in the agenda is the plan to develop the rural areas in the country by providing support services to small farmers to improve their productivity. "It also means that we are going to encourgae more agricultural processing in the agricultural areas," Dominguez said. He added that the new government will also promote tourism in the rural areas of the country. Furthermore, he said the Duterte administration will address the bottlenecks in the land administration system, where four state agencies - Land Registration Administration, Department of Environment and Natural Resources, National Commission on Indigenous Peoples and the Department of Agrarian Reform - have difficulty cooperating. "Security of land tenure is very important because it encourages foreign investment in the rural areas," he said. Moreover, Dominguez said they will also strengthen the basic education system and provide scholarships for tertiary education, which he said is relevant to the needs of the private sector. "We will try to match what is taught with what is demanded in the field," he said. READ MORE...RELATED, Duterte and the economy...

ALSO: Duterte admin assured of funds with only 31% of agency budgets spent


MAY 12 -A resident checks the damage of a tarpaulin billboard of leading presidential candidate Mayor Rodrigo Duterte along a boulevard at his hometown in Davao city in southern Philippines Wednesday, May 11, 2016. Duterte has widened his lead in an unofficial tally but still refuses to claim victory. AP/Bullit Marquez
Only around 31 percent of state agency budgets were spent over the first four months of the year, underscoring the availability of funds for the looming Duterte administration. A total of P650.27 billion in notices of cash allocation (NCA) were issued as of April, data from the Department of Budget and Management (DBM) showed. That accounted for 31.4 percent of the P2.071-trillion budget for departments and offices as well as special purpose funds for their immediate needs. The 2016 outlay is worth P3.002 trillion. The balance of P930.7 billion is in the form of automatic appropriations used mainly for debt servicing, retirement and pension for state workers and revenue share of local government units. An NCA is that one last document presented by agencies to the Bureau of the Treasury to get checks. Once encashed with government banks, funds are deemed disbursed. "I do expect them to continue to spend to complete projects before (President) Aquino bows out," said Nicholas Antonio Mapa, economist at Bank of the Philippine Islands. READ MORE...MBC to next leaders - Let's work together for inclusive growth...

ALSO: Stocks slip as poll euphoria ends


MAY 13 -Analysts said the market was in for a correction due to the lack of clarity in the incoming government’s economic program. File photo
MANILA, Philippines - Local stocks fell Thursday, failing to sustain the two-day post election euphoria as investors looked for firmer leads.
The benchmark Philippine Stock Exchange index shed 71.48 points or 0.97 percent to finish at 7,325.04 while the broader all shares index ended lower by 33.36 points or 0.76 percent to end at 4,354.95. All the sectoral indices closed in the red. Volume turn over reached P8.59 billion with decliners ahead of advancers, 105 to 81 while 47 stocks were left unchanged. The index rose 5.8 percent over the past two days after an unofficial count of votes by an election commission-accredited watchdog showed firebrand mayor Rodrigo Duterte had won Monday’s presidential election, ending months of uncertainty for investors. Analysts said the market was in for a correction due to the lack of clarity in the incoming government’s economic program. The market decline was also attributed to the slump in the US and European equities. READ MORE...RELATED, BSP, JP Morgan optimistic about PH growth under Duterte...


READ FULL MEDIA REPORTS HERE:

Filipino billionaires listed in Panama Papers database


A marquee of the Arango Orillac Building lists the Mossack Fonseca law firm, in Panama City, Monday, April 4, 2016. Panama's president says his government will cooperate "vigorously" with any judicial investigation arising from the leak of a vast trove of information on the offshore financial dealings of the world's rich and famous. An international coalition of media outlets Sunday published investigations it said stemmed from the leak of 115 million records kept by the Panama-based law firm Mossack Fonseca on behalf of clients. AP/Arnulfo Franco

MANILA, MAY 16, 2016 (PHILSTAR) By Patricia Lourdes Viray May 10, 2016 - Some of the Filipinos included in the Forbes magazine's annual billionaires list are also listed in the biggest leak of tax records from Panamanian law firm Mossack Fonseca.

The International Consortium of Investigative Journalists published the database of the Panama Papers which includes nearly 214,000 offshore entities created in 21 jurisdictions.

READ: ‘Panama Papers’ list global tax avoiders

SM Prime Holdings chair Henry Sy Jr., eldest son of Henry Sy Sr., was listed as a shareholder of Success House International Limited, registered in the British Virgin Islands, and Ideal International Ltd., registered in Samoa.

Sy Sr. and his family, with a net worth of $13.3 billion this year, remain the richest in the Philippines, according to Forbes.

Emperador Distillers owner Andrew Tan was listed as a beneficiary of Shiok Success International Ltd., registered address in Macau, and Dew Dreams International Ltd., with registered address in Quezon City, Philippines.

Tan, who is also affiliated with Megaworld, McDonald's and Resorts World Manila, ranks sixth in the list of Filipino billionaires.

Three members of the Angara clan, Henry Sy Jr. and Irene Marcos-Araneta are among the prominent Filipinos also listed in the Panama Papers database.

READ MORE...

Former Sen. Edgardo Angara, his wife former Aurora Rep. Gloria Angara and their son Sen. Juan Engardo "Sonny" Angara were all listed as shareholders of Arkwright Assets Limited, a company registered in the British Virgin Islands.

Irene Marcos-Araneta, sister of vice presidential aspirant Sen. Ferdinand "Bongbong" Marcos Jr., and her husband Gregorio Ma. Araneta III are listed as officers of Orient Wind Development Limited which is registered in the British Virgin Islands.

Former Sen. Consuelo "Jamby" Madrigal was also in the list as a shareholder of Vines Global Limited, a company registered in the British Virgin Islands.

ABS-CBN Eugenio Lopez III was also in the list for his connection to Derrydowns Limited, registered in the British Virgin Islands.

San Miguel Corp. (SMC) is listed as a shareholder of Carmen Red Ltd., a company with listed address in Beijing, China but registered in the British Virgin Islands. SMC shareholder Inigo Zobel is also in the list as an officer of Southern Isles Limited, registered in the British Virgin Islands.

The Panama Papers is a trove of more than 11.5 million leaked files from Mossack Fonseca. ICIJ, however, clarified that it will not publish the totality of the leak nor will it disclose raw documents.

"The database contains a great deal of information about company owners, proxies and intermediaries in secrecy jurisdictions, but it doesn’t disclose bank accounts, email exchanges and financial transactions contained in the documents," the ICIJ said in its report published on Tuesday.

RELATED: Panama Papers: Are Filipino politicians tagged in the biggest leak in history?


PHILSTAR

Duterte presidency will not kill Philippine economy, expert says By Jonathan de Santos (philstar.com) | Updated May 10, 2016 - 1:53pm 74 2470 googleplus1 0


Front-running presidential candidate Mayor Rodrigo Duterte gestures at photographers to move back prior to voting in a polling precinct at Daniel R. Aguinaldo National High School at Matina district, his hometown in Davao city in southern Philippines Monday, May 9, 2016. Duterte was the last to vote among five presidential hopefuls. AP / Bullit Marquez

MANILA, Philippines - A Duterte presidency will not lead to a loss of investments or economic ruin as some critics have warned, according to a professor of Economics at the University of Santo Tomas.

Professor Emmanuel Lopez, who has a doctorate in economics and is chair of the economics department at UST's Faculty of Arts and Letters, said that the business community may be "very jittery" because of the elections, but he expects things to stabilize once Duterte - who is expected to be proclaimed president-elect in coming days - names his economic managers.

"I think it will not happen," he said of warnings that Duterte, whose campaign focused on a promise to eradicate drugs and crime, may be detrimental to the country's economic growth. He said that the business community will stabilize "after the smoke of battle has cleared" and the new president appoints a Finance secretary and names officials to bodies like the Board of Investments.

The Manila Times reported on May 8 that a London-based think tank said Duterte might undo the gains of recent years, when gross domestic product grew an average of 6.3 percent according to government data. The report quoted Capital Economics Asia economist Gareth Leather as saying “there is a real risk that Aquino’s most important achievements could quickly start to unravel.”

The camp of Liberal Party standard-bearer Manuel "Mar" Roxas - at a distant second place according to partial election results - also criticized Duterte for not discussing economic policies at a forum with the Makati Business Club in April.

"Ignorance about the economy cannot be remedied by hiring advisers. The candidate must have a good grasp of the issues and take the matter seriously. This is an issue that involves jobs, income, and price of goods. This is a matter of life for our families," Akbayan Rep. Ibarra Gutierrez, Daang Matuwid coalition spokesperson, said.

READ MORE...

MBC members, including chair Ramon Del Rosario Jr., said after the forum that they had hoped that Duterte would have talked about his proposed economic policies.

RELATED: Duterte talks dirty to big business

But Lopez said that Philippine economic policies will remain the same for about a year into Duterte's administration, with any changes coming gradually. "Of course, there has to be a transition [period], especially after six years," he said, adding the Duterte administration will have little choice but to maintain the status quo in the meantime.

In debates and campaign speeches, Duterte has indicated that he will put an end to labor contractualization - hiring employees for short periods without government-mandated benefits - but has also called on labor unions to let him implement his plans before going on strike or holding protests.

Lopez added that Duterte's focus on peace and order might even convince investors to come in if the Davao City mayor makes good on a campaign promise to minimize crime within three to six months.

He said that Duterte should focus on making economic growth inclusive. The Aquino administration has been criticized for supposedly failing to translate GDP growth into improving the lives of Filipinos in the lower and middle classes and analysts have said that resentment at that helped fuel the Duterte campaign.

"It should go down to the grass roots," Lopez said of any economic gains under Duterte.

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

RELATED FROM PHILSTAR

Duterte’s challenges and opportunities FILIPINO WORLDVIEW By Roberto R. Romulo (The Philippine Star) | Updated May 13, 2016 - 12:00am 0 2 googleplus0 0


By Roberto R. Romulo

Mayor Duterte will assume the presidency of the nation that has recorded strong economic growth, but whose benefits have not trickled down to the majority of the population as desired. While the current administration also touted “inclusive growth” as its goal, they were unable to make much progress leading to a groundswell of dissatisfaction with the status quo.

The incoming President was quick to recognize that dissatisfaction and his message resonated well with the electorate. His challenge now is to make good on his promise that economic growth will redound to the benefit of all Filipinos in an equitable and sustainable way.

However, politics is a team sport, and the country and the world will be watching closely as Mayor Duterte selects his Cabinet and as he rolls out the economic plan that will deliver the equitable growth he spoke of so frequently and passionately during his campaign.

His appointments to DFA, DND, DOF, DTI and DOTC (currently the symbol of incompetence and insensitivity) will say a great deal about the quality of his team and the approach he will take in important policy areas.

Last but equally important is the BSP. Governor Say Tetangco, has done an exceptional job and he has a well-earned reputation internationally as one of the world’s best central bank governors. His term will end in 2017 and the business community would welcome his reappointment, which will be an important signal to the global financial community.


TETANGCO

Much of the country’s economic success during the past two administrations happened on his watch and his continued stewardship of our nation’s monetary policies will be important to the achievement of this next administration’s goals.

Mayor Duterte is a plain speaker with a colorful vocabulary, but he is also a seasoned political leader who has a track record of delivering progress to his constituents. Now he will be tested and judged on a wider national and global platform.

In looking at those goals, there are two areas that stand out as critically important to ensuring that our growth over the next six years is both inclusive and sustainable.

Disaster and Climate-Resilient Agriculture The Philippines is the 13th most climate–vulnerable out of 186 countries according to the 2016 Climate Change Vulnerability Index.

Mindanao will be the hardest hit by changes in climate averages and extremes. By 2030, 1.4 million Filipinos will be at higher risk of hunger due to lower agricultural production caused by climate change. One should note that farmers are the lowest paid sector in the country.

Despite the fact that every administration has launched programs, we have not made progress in moving the agriculture sector forward.

Agriculture yielded the lowest productivity and lowest incomes with an average growth P1.3 percent in the last five years.

More than any other sector of our economy, agriculture is the most vulnerable to the vicissitudes of nature. We cannot do much to prevent nature from taking its course but much can be done to mitigate its negative impact. A strong agricultural sector prepares us for the impact of natural hazards and climate change, making us more disaster-and climate-resilient.

Plans are underway to establish an alliance to help bring agriculture to the forefront of our national development agenda.

The Carlos P. Romulo Foundation, the Zuellig Family Foundation and the Manila Observatory have decided to convene this alliance in late July. In the coming weeks, we intend to consult with experts, national and local government representatives, business and civil society organizations on the feasibility of launching a multi-stakeholder alliance to accelerate agricultural development in our country.

Mindanao, as the bread basket of the country, is the ideal place to pilot this initiative.

The results of our study will be made available to the incoming President for his consideration.

DICT

The role of information technology was clearly discernible in the elections: automation of voting and registration, the speedy transmission of election results, the impact of social media and the rendering of more accurate voter surveys. The use of information technology has definitely influenced the way the government and the citizenry interact with each other.

It has proven to be indispensible in promoting efficiency and is a tool against corruption. I remain an unabashed supporter of e-governance and, hence, the urgency of establishing a Department of Information and Communications Technology that will contribute to the incoming Administration’s drive for efficient government service and in fighting corruption.

E-Governance transforms the relationship between government and citizens from a monolithic bureaucracy dispensing its services to helpless and powerless beneficiaries to a customer focused institution providing service to a more demanding and ICT literate public, much like how a bank or a telephone company would now treat its customers.

This requires not only a major shift in the mindset of our government agencies, it also requires a dramatic re-engineering of our government processes to ensure that services are delivered effectively. For example, it means linking the data bases of at least seven government agencies so that an OFW does not have to line up seven times in seven different locations, waiting for hours to get his/her NBI clearance, birth certificate, CHED or PRC certificate, DFA passport, OWWA clearance, etc., etc. just so he/she get employed overseas.

The creation of DICT can develop a seamless platform which can link our government agencies and their respective data bases resulting not only in speeding up transactions with government from anything like licenses and permits to procurement, but also promoting transparency to curb opportunities for graft and corruption as well. A more extensive data base and its rendering will also contribute to more effective law enforcement.

Simply stated, unless the citizenry can avail of efficient government services utilizing 21st century technology, the government would have been remiss in their responsibilities.

In the afterglow of the incoming President’s overwhelming mandate, he has earned the goodwill of all the citizenry from all walks of life.

I share the hope he uses this mandate wisely and wish the incoming administration success in the face of myriad challenges to our prosperity, well-being, security and sovereignty.


PHILSTAR

Duterte's transition team bares 8-point economic plan By Jovan Cerda (philstar.com) | Updated May 12, 2016 - 5:14pm 92 2130 googleplus0 3


Presumptive president Rodrigo Duterte's economic team said the national government will follow the "Davao model" where licenses in doing business are given in the shortest possible time.

MANILA, Philippines - The transition team of presumptive president Rodrigo Duterte on Thursday bared the eight-point economic agenda of the incoming administration.

In a televised press conference in Davao City, Carlos Dominguez, a member of the Duterte transition team, enumerated Duterte's plans that centered on taxes, infrastructure, social services and rural development.

Dominguez, a former Cabinet secretary for the Corazon Aquino and Fidel Ramos administrations, said that foremost, the incoming government will continue and maintain the country's current macroeconomic policy.

"However, in the case of tax revenue collection, efforts will be complemented by reforms in the bureaucracy of the tax-collecting agencies. This will fulfill the president-elect's promise that there will be less corruption in the government," he said.

Secondly, Dominguez said the Duterte administration will accelerate the public-private partnerships to create jobs and inject economic activity in the country. "We are going to hold the people to their contracts," he said.

Dominguez said the incoming administration will also ensure the attractiveness of the Philippines to foreign direct investments by easing economic restrictions and by enhancing competitiveness of doing business in the Philippines.

He said the national government will follow the "Davao model" where licenses in doing business are given in the shortest possible time. In addition, Dominguez said this "also means reducing crime in the areas to increase the security of businessmen and consumers."

Fourth in the agenda is the plan to develop the rural areas in the country by providing support services to small farmers to improve their productivity.

"It also means that we are going to encourgae more agricultural processing in the agricultural areas," Dominguez said. He added that the new government will also promote tourism in the rural areas of the country.


Carlos Domiguez. INQUIRER FILE PHOTO

Furthermore, he said the Duterte administration will address the bottlenecks in the land administration system, where four state agencies - Land Registration Administration, Department of Environment and Natural Resources, National Commission on Indigenous Peoples and the Department of Agrarian Reform - have difficulty cooperating.

"Security of land tenure is very important because it encourages foreign investment in the rural areas," he said.

Moreover, Dominguez said they will also strengthen the basic education system and provide scholarships for tertiary education, which he said is relevant to the needs of the private sector.

"We will try to match what is taught with what is demanded in the field," he said.

READ MORE...

On the area of tax administration, Dominguez said the that the incoming government will make the tax system more progressive by indexing the tax collection gradiations to the inflation rate.

Lastly, the Duterte government also plans on expanding the conditional cash transfer program initiated by the Arroyo administration and expanded during the Aquino administration.

"We will also index that to inflation so that the real value of the money for people under the program will be maintained," he said.

In addition, the new government vowed to expand the coverage of the Philippine Health Insurance System.

Dominguez said that a number of items in the new government's economic agenda will have to be addressed through a constitutional convention.

"We will push for something more friendly to foreign investments," he said.

Currently, foreigners are barred by the Consitution from owning more than 40 percent of real properties and businesses in the Philippines.

Pressed on the issue of labor contractualization which Duterte vowed to address, Dominguez said the transition team has yet to talk in detail about it but promised that it will be removed in the new administration.

He added that the transition team has yet to make economic growth targets pending consideration of the effects of El Niño to the country's agricultural sector.

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

RELATED FROM PHILSTAR

Duterte and the economy DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) | Updated May 13, 2016 - 12:00am 4 192 googleplus0 3


BOO CHANCO

The day after the election, when it was clear Duterte will be the next Philippine President, the PSEi went up to 7,174.88 or 183.01 points... and the next day it ended at 7,396.52 up 221.64 points. So it turns out those fear mongers about a Duterte victory are off the mark!

But it is wrong to attribute that dramatic rise from days of decline simply to Duterte’s victory. Coincidentally, other regional markets were also up for various reasons.

Indeed, Asian equities ended mostly higher prompted by a weaker yen and higher oil prices. The markets are now so international, so intertwined and so affected by a variety of events that it is a mistake to attribute a rise or a decline to a single domestic reason.

Of course, if a revolution broke out and there is blood spilled on Ayala Avenue and the market collapsed, the cause and effect is clear. But in more normal days, the market and the economy for that matter rises and falls not because of one event but based on a complicated mix of issues and events.

Anyway, I had been saying here that all the doomsayers about a Duterte presidency before the elections were wrong. For one thing, our economy has become so resilient and there are so many good things going for it so that neither an Aquino nor a Duterte can take full credit or blame for it.

But it is undeniable there was high anxiety among many of our movers and shakers about the prospect of a Duterte presidency.

The failure of Duterte to say much about his plans for the economy during a Makati Business Club forum left local business decision makers bewildered on how he plans to deal with the economy.

Indeed, there are few hints on how Duterte views the economy and what he may want to do. Concerns were expressed he may not have a good grasp of how our economy works, most specially in the context of the globalized world.

For instance, someone from a long faded oligarch family was reported to have convinced Duterte he should have a basic steel industry (Iligan?) as the backbone of his economic agenda. Many scoffed the proposal is made at a time when China’s steel mills are underutilized and Tata Steel is desperately trying to get rid of their steel plant in the UK. Duterte must be careful he does not produce his own set of rent seeking oligarchs out to use government resources for their own dreams.

Actually, Duterte’s instincts are better than he realizes on where to invest for the future: EDUCATION. The knowledge industry will be increasingly hot.

We need to go up the next level in our BPOs since call centers as we know them may be rendered obsolete by technology. Investing in education and teacher training will get a faster and better return on investment economically and socially than putting up a Philippine steel mill at a time of global supply glut.

What keeps me reassured about Duterte’s economic agenda is the information that one of his top advisers is Dr. Ernie Pernia, a former ADB economist and professor emeritus at the UP School of Economics. Dr Pernia will surely give him sound economic advice, if Duterte will listen to him.


Ernesto M. Pernia Professor Emeritus up School of Economic Research Interests : Development Economics, Demographic Economics, Human Resource Economics ECON.UPD.EDU

A Rappler article of Marites Vitug revealed that Pernia sat down for a meeting with Duterte early this year to talk about economics. Vitug wrote that Duterte appeared comfortable with Pernia, who discussed the proposed economic platform with power-point slides.

But Duterte was reported to have spoken animatedly about law and order and why it is important in the grand scheme of things. It is Duterte’s belief that if criminality is solved, a major obstacle to investments is hurdled. That makes sense to me. Why invest in a country where your personal security is under threat?

The key points raised by Pernia, according to Vitug, covered the following:

Investment climate: infrastructure development, streamlining of bureaucracy, taxation following regional/global standards, labor market stability, prudence in fiscal and monetary policy and easing of constitutional restrictions on foreign direct investments (FDIs).

Regional and rural development: Shift of emphasis on infrastructure spending from Metro Manila and Calabarzon to regional/provincial urban centers, rural/agricultural areas.

Decentralization of governance toward eventual federalism and a radical reform of the judicial system.

Vitug wrote Duterte did not disagree with Pernia on any of those. But — and this is a big but — he has not “internalized” the economic issues.

“There is a need for an intensive discussion and he needs to think about these deeper,” Pernia says.

Duterte didn’t talk about any of those issues in the two occasions he faced the business community.

Indeed, Vitug said Pernia thinks about Duterte’s lack of focus on economic issues and sharpness in framing inequality and poverty as key parts of his platform and, in a light vein, quips: “I really don’t know if he considers me one of his economic advisers.”

It impressed me that in a Go Negosyo forum, Duterte became cautious on what to say about tax reform beyond a statement that he is for it. He explained he visited former Prime Minister Cesar Virata before going to the forum to precisely ask about tax reform.

According to Duterte, Virata advised him to first convene a panel of experts and not promise anything until he understands the ramifications of the tax reform issues. That’s when I saw the man is not irresponsible and he can be expected to act in the nation’s best interests.

Another favorite topic that will affect businessmen is contractualization. Here, his position is no different from all his rivals in the last election.

I suspect that none of them realizes all the implications of an outright ban they were promising on the campaign trail. Now is the time for affected industry groups to send him position papers that explain their concerns.

The business community can rest assured that on some big issues, they have Duterte on their side. He is in favor of relaxing constitutional restrictions on foreign investments. Amending the Constitution for this and other reforms is on top of his agenda.

I am not sure how the entry of Jose Ma Sison as an influential adviser will affect Duterte in his position.


COMMUNIST FOUNDER JOMA SISON

If we let the communists have their way, they would isolate the country’s economy from the rest of the world. One just needs to see what isolation can do to a country like Myanmar to realize the strategy of the commies is not only outdated, but wrong.

There is one other thing Duterte said that hopefully will not change once Sison gets in the picture. Duterte said he has no plans to continue agrarian reform which he described as having done nothing good to farmers or land owners. In Duterte’s Skype conversation with Sison, the communist leader mentioned agrarian reform as one of his concerns.

As to the bottleneck to investments as a result of red tape, Duterte often cites what he has done in Davao. He said he has declared a war on red tape because “That’s what investors don’t like.”

He said in Davao City, processing of government documents is limited to 72 hours. Any delays have to be explained to the Office of the Mayor. He said he would also get rid of any redundancies in government offices, reconfiguring the system so that only five or seven signatures are required for a permit to be issued.

Of course, there are other things about the economy that investors want assurances from a President Duterte. But for now, maybe knowing that Dr Pernia may have Duterte’s ear should be reassuring enough for the business community.


PHILSTAR

Duterte admin assured of funds with only 31% of agency budgets spent By Prinz Magtulis (philstar.com) | Updated May 12, 2016 - 3:58pm 1 184 googleplus0 0


A resident checks the damage of a tarpaulin billboard of leading presidential candidate Mayor Rodrigo Duterte along a boulevard at his hometown in Davao city in southern Philippines Wednesday, May 11, 2016. Duterte has widened his lead in an unofficial tally but still refuses to claim victory. AP/Bullit Marquez

MANILA, Philippines - Only around 31 percent of state agency budgets were spent over the first four months of the year, underscoring the availability of funds for the looming Duterte administration.

A total of P650.27 billion in notices of cash allocation (NCA) were issued as of April, data from the Department of Budget and Management (DBM) showed.

That accounted for 31.4 percent of the P2.071-trillion budget for departments and offices as well as special purpose funds for their immediate needs.

The 2016 outlay is worth P3.002 trillion. The balance of P930.7 billion is in the form of automatic appropriations used mainly for debt servicing, retirement and pension for state workers and revenue share of local government units.

An NCA is that one last document presented by agencies to the Bureau of the Treasury to get checks. Once encashed with government banks, funds are deemed disbursed.

"I do expect them to continue to spend to complete projects before (President) Aquino bows out," said Nicholas Antonio Mapa, economist at Bank of the Philippine Islands.

READ MORE...

"But at least this is a very different case from 2010 where coffers were emptied and spent prior to the turnover of power," he said in an e-mail.

For the past five years, the Aquino government has been criticized for persistent underspending partly blamed for a slowdown in growth to 5.8 percent last year.

The DBM, in turn, has repeatedly said that it is the line agencies which are not spending fast despite getting around 92 percent of their budgets already as of April.

Of the P650.27 billion NCA releases as of April, only P574.44 billion was actually disbursed.

The remaining P20.84 billion represented unencashed checks, P54.98 billion accounts for NCAs not yet utilized, while nearly P76 billion sat at agency bank accounts.

NCA utilization rate was pegged at 92 percent, slowing down from 96 percent in the first quarter.

The Commission on Elections topped agencies with 100-percent utilization as it spent more before the presidential elections.

"There has been very little trouble allocating funds to agencies. The real bottleneck has been in line agencies' ability to encash and disburse," Mapa said.

He added he expects the next government of presumptive winner Rodrigo Duterte to continue reforms to speed up spending.

"Hopefully, the incoming president can continue this pace of learning by line agencies to help them disburse funds...," he said.

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

RELATED FROM PHILSTAR

MBC to next leaders: Let's work together for inclusive growth By Levi A. So (philstar.com) | Updated May 10, 2016 - 9:54pm 1 14 googleplus0 0


Despite the polarizing character of this elections, the MBC urged the public to support the new leaders and to let the process of genuine healing begin. Philstar.com / File

MANILA, Philippines — Votes have been cast and as numbers from unofficial and partial results come in, the Makati Business Club (MBC) on Tuesday said that the business community is ready to partner with government to ensure sustainable and inclusive growth.

Although numbers transmitted from the Commission on Elections (Comelec) transparency server are unofficial, the MBC in a statement said they convincingly reflect the will of the electorate.

"We welcome the clear mandate given our new leaders by our people and the credibility of the elections." It noted that the record 81 percent voter turnout indicates the "rock-solid commitment" of Filipinos to uphold democracy.

Despite the polarizing character of this elections, the MBC urged the public to support the new leaders and to let the process of genuine healing begin.

READ MORE...

"Friendships must be restored, mutual trust must be reestablished, and wounds must begin to heal... Let us focus on those aspirations that unite us, rather than on the issues that divide us. After all, despite our divisions, we all aspire for the common goal of authentic freedom and inclusive development."

RELATED: Leni Robredo says cheating allegations unfair

It also commended Comelec for the automated elections seen by many as highly credible, clean, and honest.

"It is our hope that the 2016 elections bring forth a country grounded on the principles of protecting and strengthening our democratic institutions, and on decency, integrity, justice, empathy, competence, peace and order especially in Mindanao, and respect for the rule of law," MBC said.


PHILSTAR

Stocks slip as poll euphoria ends By Iris Gonzales (The Philippine Star) | Updated May 13, 2016 - 12:00am 1 4 googleplus0 0


Analysts said the market was in for a correction due to the lack of clarity in the incoming government’s economic program. File photo

MANILA, Philippines - Local stocks fell Thursday, failing to sustain the two-day post election euphoria as investors looked for firmer leads.

The benchmark Philippine Stock Exchange index shed 71.48 points or 0.97 percent to finish at 7,325.04 while the broader all shares index ended lower by 33.36 points or 0.76 percent to end at 4,354.95.

All the sectoral indices closed in the red. Volume turn over reached P8.59 billion with decliners ahead of advancers, 105 to 81 while 47 stocks were left unchanged.

The index rose 5.8 percent over the past two days after an unofficial count of votes by an election commission-accredited watchdog showed firebrand mayor Rodrigo Duterte had won Monday’s presidential election, ending months of uncertainty for investors.

Analysts said the market was in for a correction due to the lack of clarity in the incoming government’s economic program.

The market decline was also attributed to the slump in the US and European equities.

READ MORE...

“The Duterte win in the polls have settled in – fully discounted for the moment – but the Robredo-Marcos tiff for the second highest post in the land remain contentious. So far however, this has not lent any negativity in the market place. Not saying it won’t only that it hasn’t yet,” said Justino Calaycay of A& A Securities.

Asian markets slid yesterday with MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.3 percent after Wall Street suffered its worst day since February following downbeat quarterly retail report.

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

FROM RAPPLER.COM

BSP, JP Morgan optimistic about PH growth under Duterte
[ 'We would expect that the economy will continue to be stable and the macro economy will continue to attract confidence of the markets,' says the BSP]
Rappler.com Published 6:00 PM, May 13, 2016 Updated 6:00 PM, May 13, 2016 4K Twitter Reddit Email 4K


ECONOMIC OPTIMISM. The business community has so far reacted positively to the prospect of Rodrigo Duterte taking over the reins of government. File photo by Alecs Ongcal/Rappler

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) and global investment bank giant JP Morgan expect the Philippines to continue its economic momentum under president elect Rodrigo Duterte.

BSP deputy governor Diwa Guinigundo said an annual 7%-8% GDP growth for the Philippines is “doable” despite the change in leadership set to be official on June 30.

"We would expect that the economy will continue to be stable and the macro economy will continue to attract confidence of the markets," Guinigundo said.

The BSP’s Monetary Board kept interest rates unchanged for 13th straight policy setting meetings since October 2014 on Thursday, May 13, as inflation remained within the BSP’s target range of 2%-4 %

The central bank also kept its inflation forecast at 2.1% for this year and 3.1 % in 2017.

The BSP target echoes that of the targets set by the Duterte camp. On Thursday, the latter said it is eyeing 7-8% economic growth as it aggressively pursues poverty alleviation.

“If we want to reduce the poverty rate, we need a higher growth,” said Duterte spokesman Peter Laviña.

Former agriculture secretary and Duterte transition team member Carlos Dominguez III pointed out that the market’s positive reaction to the election bodes well for growth.

“We are very encouraged by the reaction of the stock market to the election of (incoming) President Duterte. In the last 3 days, the stock market has gone up in value by 5%,” he said, adding that the peso also strengthened against the dollar.

The president-elect’s team has moved quickly since the elections, most notably releasing at 8 point economic agenda which highlights Duterte’s intention to maintain the current macroeconomic policies and infrastructure spending while reforming tax..

Duterte has also signaled that he is willing to consider lifting constitutional restrictions on foreign ownership.

Absence of drastic shifts encouraging

These developments were welcomed by banking giant JP Morgan. It said that both the financial and equities market welcomed the economic agenda of the incoming administration in its latest Asia Pacific Equity Research.

“We believe that financial markets will welcome the explicit commitment of the incoming administration in keeping the current macro-economic policies, particularly its focus on infrastructure,” the investment bank said.

“The absence of any drastic shifts is encouraging, in our view. The focus on grassroots development is also laudable, as inclusive growth has been a persistent problem of the economy. It also helps that the new government is cognizant of the need to maintain fiscal discipline despite its goal of making income tax more progressive,” JP Morgan added.

While JP Morgan welcomed the incoming administration’s broad outlines, it cautioned however that "the appointment of a capable and experienced cabinet and economic team, and eventually, the ability to execute, are the next milestones to watch for." – Rappler.com


Chief News Editor: Sol Jose Vanzi

© Copyright, 2016 by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved


PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE