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

DONE WITH AQUINOMICS? HERE COMES 'DUTERTE MAGIC'


JUNE 15 -Incoming Finance chief Carlos Dominguez III says the Duterte administration's 10-point agenda will make economic growth inclusive or felt by the ordinary Filipino. Rody Duterte/Facebook
Step aside Aquinomics, here comes "Duterte magic."
Ahead of President-elect Rodrigo Duterte's takeover on June 30, his incoming economic managers will consult business leaders next week to secure specific policy recommendations. The two-day conference in Davao City from June 20 to 21 will center on Duterte's now 10-point socioeconomic agenda, which his camp said was welcomed by investors as shown by stock market performance since last month's elections. "Higher net foreign buying in the local bourse over May-June period is testament to resurgent investor confidence in the Philippines," said Paola Alvarez, incoming spokesperson of the Department of Finance. "It cannot be denied that the election of a new President with a steadfast character and the appointment of a learned secretary of finance are contributing factors," she said in a statement on Wednesday. Incoming Finance chief Carlos Dominguez III will lay the groundwork by presenting the 10-point agenda which, he claimed, will make economic growth inclusive or felt by the ordinary Filipino. This covers continuing current macroeconomic policies, increasing business competitiveness, lowering income taxes, increasing infrastructure spending to 5 percent of economic output, promoting rural, human capital development and science and technology, ensuring land security, improving social programs like conditional cash transfers and better implementation of the reproductive health law. Citing data from the Philippine Stock Exchange (PSE), Alvarez said Duterte's election brought net foreign buying from May to the second week of June to rise 22 percent to P20 billion. "His economic policy is more micro than macro," said Emmanuel Lopez, chair of the economic department at the University of Santo Tomas. READ MORE...

ALSO: Tax reform, infra top Duterte economic plan
[10-POINT PROGRAM TO BE UNVEILED IN DAVAO CONFAB]


JUNE 16 -The economic team of incoming President Rodrigo Duterte will flesh out before businessmen the details of their 10-point socioeconomic agenda for the next six years, topmost of which is a commitment to keep the sound fiscal, monetary and trade policies put in place by previous administrations. In a statement issued Wednesday, the transition team of incoming Finance Secretary Carlos G. Dominguez said Duterte’s economic development team would meet with more than 300 business leaders in Davao City on June 20-21 at a consultative workshop called “Sulong Pilipinas: Hakbang Tungo sa Kaunlaran.” The workshop is co-organized by the Philippine Chamber of Commerce and Industry and the Mindanao Business Council. At the two-day consultative meeting, Dominguez will present the proposed 10-point economic agenda aimed at addressing the challenges to inclusive growth; while incoming Economic Planning Secretary and National Economic and Development Authority Director-General Ernesto M. Pernia will talk about the country’s economic health. The “21st century-style town hall meeting” will be moderated by incoming Department of Finance spokesperson Paola Alvarez.
Duterte is expected to grace the dialogue, as he is scheduled to give a response on the recommendations to be generated from the consultation. First on the list of the 10-point socioeconomic agenda was to “continue and maintain current macroeconomic policies, including fiscal, monetary and trade policies,” the draft conference agenda provided to reporters showed. READ MORE...RELATED, Duterte administration: An economic prognosis...

ALSO: Manny V. Pangilinan to government - Leave business alone
[TYCOON SAYS GOV’T MUST NOT MEDDLE TOO MUCH]
[RELATED: Drilon: Gov’t body can stop SMC-PLDT-Globe telecom deal


JUNE 19 -PLDT chairman Manuel V. Pangilinan. INQUIRER FILE PHOTO
DAVAO CITY, Philippines—Get out of the way. That’s how the government can help Philippine Long Distance Telephone Co. (PLDT) succeed in its multibillion-peso digital shift, the company’s chair, Manuel V. Pangilinan, said. Speaking to provincial journalists whom PLDT invited to Makati City for its annual stockholders meeting on Tuesday, Pangilinan said the company’s digital shift was likely to succeed if the government would not meddle too much. Some people, including people from the government, do not understand the implementation of major infrastructure needed to transform PLDT and Smart’s services into digital, and they could block the huge project, expected to be operational by 2018, because of lack of understanding of it, Pangilinan said. He said people from the government could help by not dipping their hands too much into the project. “The government’s share is to get out of the way,” he said. Joint venture with Globe PLDT is linking up with Globe Telecom to buy Vega Telecom Inc., the telco business of San Miguel Corp. (SMC), for P69.1 billion. The joint venture will improve the internet services of PLDT and Globe, the two companies said in separate statements announcing the partnership last month. READ: SMC sells telco assets to PLDT, Globe On Friday, however, the new antitrust body Philippine Competition Commission (PCC) said the PLDT-Globe deal would not be approved until after a comprehensive review. “A comprehensive review includes a determination of the relevant market, whether there will be substantial changes to the market structure, and the potential impact of the transaction on public welfare,” the PCC said in a statement. READ: PLDT, Globe reject PCC request to refile notice on SMC telco deal ‘Transitory’ guidelines The regulator’s decision could spur PLDT and Globe into taking legal action, as the two telcos consider the transaction approved under the PCC’s own “transitory” guidelines. READ MORE...RELATED, Drilon: Gov’t body can stop SMC-PLDT-Globe telecom deal...

ALSO: FOREIGN PORTFOLIO INVESTMENTS inflows jump by 40% in May [PEACEFUL ELECTIONS OUTCOME HELPS BOOST 'HOT MONEY' INFLOWS]


JUNE 17 -MORE foreign portfolio investments or “hot money” entered the country than the amount that was brought out in May, reversing the net outflows registered a month ago and in May last year. Bangko Sentral ng Pilipinas (BSP) data released on Thursday showed that in May this year, $1.78 billion in foreign portfolio investments flowed into the country— the highest inflow since May last year.
In the meantime, the $1.71 billion in hot money withdrawn in May was the biggest outflow since July last year. This resulted in a net inflow of $72.8 million. Foreign portfolio investments come in the form of placements in publicly listed shares, government and private sector IOUs, as well as in deposit certificates. Portfolio investments are considered short-term bets—hence, the term hot money—because these placements can be pulled out quickly. In a statement, the BSP attributed the 40.1-percent month-on-month and 12.3-percent year-on-year jump in registered portfolio investments to “large inflows in shares of a holding company and a universal bank, renewed interest in peso-denominated government securities and the relatively peaceful conduct of elections (in May).” Outflows, meanwhile, rose by 5.1 percent month-on-month “due to profit-taking,” the BSP said, although outflows were down by 20.7 percent year-on-year. The net inflows in May reversed the net outflows of $354.1 million in April, which was blamed on pre-election market jitters, as well as the $569.3-million net outflow in May last year. BSP data showed that the first two weeks of May yielded net outflows— $172.4 million on the week of May 2-6 or before the elections and $84.8 million on May 9-13 or the week following Election Day. The remaining two weeks and two trading days of May resulted in net inflows of $123.3 million (on May 16-20), $50.7 million (May 23-27), and $156 million (May 30-31). READ MORE...

ALSO: FINALLY, DOST-ICTO transitions to Department of ICT


JUNE 13 -The priority is to make sure that the structures are correct moving forward, says DOST-ICTO deputy executive director for eSociety Bettina Quimson (left).
The long wait for the Philippines’ new Department of Information and Communications Technology (DICT) isn’t over.
The DICT Act of 2015, also known as Republic Act (RA) No. 10844, officially took effect last Thursday, ushering in a new era of governance that is hopefully more focused on ICT as a tool for national development. The law, however, provides for a six-month transition for the full transfer of the functions of existing government agencies involved in ICT development. The Information and Communications Technology Office of the Department of Science and Technology (DOST-ICTO), which has served as the lead implementing agency of the government in ICT matters since its creation in 2011, has been abolished along with other government agencies with ICT functions. At the opening of the Innovative Strategies for Development Summit (ISDS) 2016, a three-day international conference on digital strategies for development hosted by the agency last week, executive director Louis Napoleon Casambre read a prepared statement acknowledging that it would take a much larger mandate for the Philippines to start playing catch-up in the vast global ICT arena. “With ICT now having the authority at the department level, the country’s push to catch up will be much stronger,” Casambre said. “Finally, we will have the focus to drive our ICT agenda as a key player for national development. By catching up, Casambre may be referring to the state of the nation vis-a-vis the rest of the world in using ICT for inclusive growth. While Metro Manila, for example, is drowning in enormous problems brought about by severe infrastructure shortage - congestion, massive traffic jams, perennial flooding, and high crime rate - the rest of the world has long started the journey toward developing smart cities, or masterplanned communities that integrate ICT solutions in the urban development framework. READ MORE...


READ FULL MEDIA REPORTS HERE:

Done with Aquinomics? Here comes 'Duterte magic'


Incoming Finance chief Carlos Dominguez III says the Duterte administration's 10-point agenda will make economic growth inclusive or felt by the ordinary Filipino. Rody Duterte/Facebook

MANILA, JUNE 20, 2016 (PHILSTAR) By Prinz Magtulis June 15, 2016 - 4:22pm -Step aside Aquinomics, here comes "Duterte magic."

Ahead of President-elect Rodrigo Duterte's takeover on June 30, his incoming economic managers will consult business leaders next week to secure specific policy recommendations.

The two-day conference in Davao City from June 20 to 21 will center on Duterte's now 10-point socioeconomic agenda, which his camp said was welcomed by investors as shown by stock market performance since last month's elections.

"Higher net foreign buying in the local bourse over May-June period is testament to resurgent investor confidence in the Philippines," said Paola Alvarez, incoming spokesperson of the Department of Finance.

"It cannot be denied that the election of a new President with a steadfast character and the appointment of a learned secretary of finance are contributing factors," she said in a statement on Wednesday.


DOMINGUEZ III

Incoming Finance chief Carlos Dominguez III will lay the groundwork by presenting the 10-point agenda which, he claimed, will make economic growth inclusive or felt by the ordinary Filipino.

This covers continuing current macroeconomic policies, increasing business competitiveness, lowering income taxes, increasing infrastructure spending to 5 percent of economic output, promoting rural, human capital development and science and technology, ensuring land security, improving social programs like conditional cash transfers and better implementation of the reproductive health law.

Citing data from the Philippine Stock Exchange (PSE), Alvarez said Duterte's election brought net foreign buying from May to the second week of June to rise 22 percent to P20 billion.

"His economic policy is more micro than macro," said Emmanuel Lopez, chair of the economic department at the University of Santo Tomas.

READ MORE...

"Generally, what he wants to do is to trickle down growth to the grassroots, something not done during the present administration," he said in a phone interview.

'Complementary' policies

Dubbed as Aquinomics, a play of the words "Aquino" and "economics", Aquino won on a platform to eradicate corruption through good governance, pushing six-year average economic growth to its fastest since the late 1970s.

But this was criticized of being largely unfelt as a little more than a quarter of Filipinos remain poor, according to latest census data. Under Aquino, the PSE index achieved more than 80 record highs.

"Aquino's and Duterte's policies are complementary, though. We have to accept the fact that Aquino did many things like infrastructure where Duterte can benefit," Lopez said.

For Duterte, he said new focus on eradicating crime, which is a "political move," could encourage more businesses to invest.

But Nicholas Antonio Mapa, economist at Bank of the Philippine Islands, was not impressed, saying the recent local stock market rally is not isolated.

"Pronouncements by (Ms.) Alvarez are obviously fallacious as foreign buying has been in the net positive for the region, save for Japan," he said in an e-mail.

"Policies are there, but implementation will be the true test if the magic alluded to by incoming Duterte team will quickly be figured out like a cheap card trick or lead to true transformation for our economy," Mapa said.

Alvarez, for her part, said the incoming administration is confident investors would rally behind it.

"We hope this investor trust and confidence in the stability of our market continues...," she said.


INQUIRER

Tax reform, infra top Duterte economic plan
[10-POINT PROGRAM TO BE UNVEILED IN DAVAO CONFAB]
By: Ben O. de Vera @BenArnolddeVera Philippine Daily Inquirer 12:44 AM June 16th, 2016

The economic team of incoming President Rodrigo Duterte will flesh out before businessmen the details of their 10-point socioeconomic agenda for the next six years, topmost of which is a commitment to keep the sound fiscal, monetary and trade policies put in place by previous administrations.

In a statement issued Wednesday, the transition team of incoming Finance Secretary Carlos G. Dominguez said Duterte’s economic development team would meet with more than 300 business leaders in Davao City on June 20-21 at a consultative workshop called “Sulong Pilipinas: Hakbang Tungo sa Kaunlaran.”

The workshop is co-organized by the Philippine Chamber of Commerce and Industry and the Mindanao Business Council.

At the two-day consultative meeting, Dominguez will present the proposed 10-point economic agenda aimed at addressing the challenges to inclusive growth; while incoming Economic Planning Secretary and National Economic and Development Authority Director-General Ernesto M. Pernia will talk about the country’s economic health. The “21st century-style town hall meeting” will be moderated by incoming Department of Finance spokesperson Paola Alvarez.


PERNIA

Duterte is expected to grace the dialogue, as he is scheduled to give a response on the recommendations to be generated from the consultation.

First on the list of the 10-point socioeconomic agenda was to “continue and maintain current macroeconomic policies, including fiscal, monetary and trade policies,” the draft conference agenda provided to reporters showed.

READ MORE...

Also part of the socioeconomic roadmap were:

Instituting progressive tax reform and more effective tax collection while indexing taxes to inflation, in line with the plan to submit to Congress a tax reform package by September

Increasing competitiveness and the ease of doing business, drawing upon successful models used to attract business to local cities such as Davao, as well as pursuing the relaxation of the constitutional restrictions on foreign ownership, except with regards land ownership, in order to attract foreign direct investments;

Accelerating annual infrastructure spending to account for 5 percent of the gross domestic product, with public-private partnerships playing a key role

Promoting rural and value chain development toward increasing agricultural and rural enterprise productivity and rural tourism

Ensuring security of land tenure to encourage investments and address bottlenecks in land management and titling agencies

Investing in human capital development, including health and education systems, as well as matching skills and training to meet the demands of businesses and the private sector

Promoting science, technology and the creative arts to enhance innovation and creative capacity toward self-sustaining and inclusive development

Improving social protection programs, including the government’s conditional cash transfer program, in order to protect the poor against instability and economic shocks

Strengthening the implementation of the Responsible Parenthood and Reproductive Health Law to enable, especially, poor couples to make informed choices on financial and family planning.

The Duterte administration’s economic agenda “emphasizes the need to maintain accelerated economic growth while ensuring that gains are broadly shared by the Filipino people,” the statement read.

It was also “anchored on the long-term Filipino 2040 vision and the next medium-term Philippine Development Planning (PDP) cycle, both led by Neda,” it added, referring to the AmBisyon Natin 2040 vision.

Launched in March, AmBisyon Natin 2040 was aimed at tripling Filipinos’ per capita income to about $11,000 in 25 years, such that the Philippines would become a high-income country in 2040 by implementing prescribed policies.

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

RELATED FROM PHILSTAR

Duterte administration: An economic prognosis By Emmanuel J. Lopez (philstar.com) | Updated June 17, 2016 - 3:59pm 1 57 googleplus0 0


CURFEW FRO MINORS: In this Wednesday June 8, 2016 photo, Filipino law enforcers carry a girl towards a vehicle after apprehending her for violating a night to dawn curfew for minors in Manila, Philippines. In a crackdown, dubbed “Oplan Rody," bearing Duterte’s name, police rounded up hundreds of children or their parents to enforce a night curfew for minors, and taken away drunk and shirtless men roaming metropolitan Manila's slums. The poor, who were among Duterte’s strongest supporters, are getting a foretaste of the war against crime he has vowed to wage. AP/Aaron Favila

An analysis After a rather fast-paced economic growth experienced in the first quarter of the year, boosting the local economy by an amazing growth rate of 6.9 percent, coming off from a 6.3-percent growth in 2015, is it a tell-tale sign of an economy on its way to a tiger status?

Does it indicate that the Philippines will achieve a higher economic position that complements investment rating upgrades the past few years?

With the impending changing of the guards in the finance and budget departments upon the assumption into office of President-elect Rodrigo Duterte, it is expected several policies will have to be rehashed, maintained or abrogated depending on their effect to the Duterte economic program.

As of late, local economic gurus predict a moderate increase in our GDP.

As expected, the next administration has no other recourse but to initially taper off government spending to take note of the previous regimes fiscal outlay. Recently, inflation rate has escalated to 1.6 percent, the highest in two years. This results in the spiraling cost of commodities equivalent to the same rate; the basic commodities are hardly hit.

Such pressure in supply have predominantly been influenced by the upsurge in election spending that started as early as the last quarter of the previous year.

This injection of funds resulted in acceleration of prices; basic goods primarily are effectively uncovered.

The incoming economic team of the Duterte administration stands to correct the situation by checking its own fiscal spending and hold on to the situation until such time that situation normalizes. Be that as it may, inflation rate (1.6 percent) by that much is within the economy's tolerable limit, much less a cause for alarm that may lead to extra economic measures to cushion the impact.

Investment spending should take the cue in our drive to sustain the growth prospect in 2016 and beyond. Prospects for infrastructure spending should endure to achieve the targeted growth of 7 to 8 percent.

What has been started by the Aquino administration in terms of ground work hopefully can be realized under the term of Duterte.


DUTERTE: ‘DECONGEST METRO MANILA TO END DAILY TRAFFIC WOES’ By Manny Pińol -One thing that sets Presidential frontrunner Rody Duterte apart from the other contenders is his ability to look at societal problems from a wider perspective and to offer practical and pragmatic solutions. DUTERTE.NET DECEMBER 1, 2015

The unabated congestion experience in almost all localities of Metro Manila in terms of vehicular traffic may soon see an easing—something which has eluded city dwellers for an undetermined number of years.

READ MORE...

Prospects for infrastructure spending should endure to achieve the targeted growth of 7 to 8 percent.

Euphoria

The economic euphoria purportedly brought about by the next government has not been experienced since the EDSA revolution of 1986. Hopefully, this can be translated to concrete local provisions. The Duterte presidency is expected to have its hands full in its first year amid an animated populace looking forward to radical promises and a turnaround in concerns on safety and security.

As of late, drug-related activities—coincidental or deliberate—have been at the center of police-related operations.

The aggressive operations and apprehensions against such felonies should have been done a long time ago. The president-elect's tirade against criminal activity may have brought the flurry of law enforcement efforts and targeting of crime syndicates.

Still, it could be a move to lessen the impact of Duterte's antagonism against what he perceives as incompetence and corruption in the police force.

The president-elect's tirade against criminal activity may have brought the flurry of law enforcement efforts and targeting of crime syndicates. Employment It is needless to say that employment should be among the main priorities of Duterte's administration.

All claims of economic growth will prove futile unless the government gives due recourse to the country's unemployment problem, which at a high of 6 percent. With a working population of 60 million, there are about 3.6 million Filipinos who are out of jobs, not because it is their choice but because they cannot find one.

Long-term growth should be in the horizon with the pro-people priorities of the new administration, taking into account the safety of the environment seems to have taken a backseat in previous administrations.

3.6 MILLION WITHOUT JOBS

There are about 3.6 million Filipinos who are out of jobs, not because it is their choice but because they cannot find one. True to his word, Duterte's pro-people stance is initiated by his marching orders to restructure the incomes taxes, which have proven to be unforgiving, unfair and anti-poor—perhaps even the highest in the ASEAN, if not one of the highest in the world.

Clamors been echoed in previous governments, yet were ignored. Officials failed to see that reforming the tax system can have some economic returns.

The growth forecast tapering-off to around 6.5 to 7 percent GDP is conservative considering that infrastructure developments are not yet fully realized until the middle of next year. It is most probable that a status quo may still be in the offing until the third quarter of 2017.

By then the economy will have to achieve a galloping growth by at least 7.5 to 8 percent in the next two years.


Emmanuel J. Lopez, Ph.D. is an associate professor at the University of Santo Tomas and the chair of its Department of Economics. Views reflected in this article are his own. For comments email: doc.ejlopez@gmail.com


INQUIRER

Manny V. Pangilinan to government: Leave business alone
[TYCOON SAYS GOV’T MUST NOT MEDDLE TOO MUCH
By: Judy Quiros @inquirerdotnet Inquirer Mindanao 01:01 AM June 19th, 2016


PLDT chairman Manuel V. Pangilinan. INQUIRER FILE PHOTO

DAVAO CITY, Philippines—Get out of the way.

That’s how the government can help Philippine Long Distance Telephone Co. (PLDT) succeed in its multibillion-peso digital shift, the company’s chair, Manuel V. Pangilinan, said.

Speaking to provincial journalists whom PLDT invited to Makati City for its annual stockholders meeting on Tuesday, Pangilinan said the company’s digital shift was likely to succeed if the government would not meddle too much.

Some people, including people from the government, do not understand the implementation of major infrastructure needed to transform PLDT and Smart’s services into digital, and they could block the huge project, expected to be operational by 2018, because of lack of understanding of it, Pangilinan said.

He said people from the government could help by not dipping their hands too much into the project.

“The government’s share is to get out of the way,” he said.

Joint venture with Globe

PLDT is linking up with Globe Telecom to buy Vega Telecom Inc., the telco business of San Miguel Corp. (SMC), for P69.1 billion.

The joint venture will improve the internet services of PLDT and Globe, the two companies said in separate statements announcing the partnership last month.

READ: SMC sells telco assets to PLDT, Globe

On Friday, however, the new antitrust body Philippine Competition Commission (PCC) said the PLDT-Globe deal would not be approved until after a comprehensive review.

“A comprehensive review includes a determination of the relevant market, whether there will be substantial changes to the market structure, and the potential impact of the transaction on public welfare,” the PCC said in a statement.

READ: PLDT, Globe reject PCC request to refile notice on SMC telco deal

‘Transitory’ guidelines

The regulator’s decision could spur PLDT and Globe into taking legal action, as the two telcos consider the transaction approved under the PCC’s own “transitory” guidelines.

READ MORE...

Under those guidelines, deals closed after the new competition law took effect but before its implementation rules take effect are deemed approved.

The PLDT-Globe deal with SMC was sealed on May 30, four days before the publication of the competition law’s implementation rules.

PLDT and Globe said they filed the required transaction notices under the PCC guidelines so the regulator could no longer challenge the deal.

But the PCC said the transitory guidelines did not dilute its authority to review transactions, especially if required by national interest and public policy.

“The review is intended to ensure that the transaction will, in the end, result in sustained gains for the public by not restricting competition,” the PCC said.

New competition

The announcement of the PLDT-Globe deal came after President-elect Rodrigo Duterte warned the two companies in May that he would open the Philippines to foreign telcos if they failed to improve their internet services.

With an average household download speed of 3.64 Mbps, the Philippines ranks 176th among 202 countries surveyed last year by internet metrics provider Ookla.

The local download speed is eight times slower than the global average broadband download speed of 23.3 Mbps.

In Asia, the Philippines has the second-slowest internet speed. Among 22 Asian countries studied by Ookla, the Philippines has a download speed just a tad faster than bottom-dweller Afghanistan.

Despite its slowness, internet service in the Philippines is expensive, $18.19 per Mbps compared with the global average of $5.21.

No public funds involved

To improve its services, PLDT is pouring billions of pesos for the shift to digital, and Pangilinan, in his speech to provincial journalists on Tuesday, stressed that no government funds were involved in the company’s investment.

“Whose money is being spent? It’s the private sector’s. There is no guarantee from the government, no government fund is involved, so get out of the way, period,” Pangilinan said.

“If ever the huge undertaking comes out lousy, it’s the company that will suffer the impact, to the delight of its competitors, and not the government,” he said.

If private projects fail, he added, “the government will not rescue us.”

Given the stiff competition in the digital industry, Pangilinan said, “we are mindful of other guys watching us.”

“We have to be on our toes. Somebody is watching us, like a wife, to police [our] ethical standards,” he said.

Improving the digital industry’s services will take time and lots of money, he said.

Higher capex

“The journey to the digital future will be long and the climb is steep,” he said.

“There will be false starts, there will be speed bumps, and there will be mistakes,” he said.

For PLDT to achieve its metrics, he said, the company has increased its capital expenditure (capex) to P43 billion this year and beyond. This is before the PLDT-Globe deal to acquire the SMC telco, which added some $100 million to PLDT’s capital expenditures, he said.

Pangilinan said the considerable increase in capital expenditure showed the seriousness of the massive effort being taken to transform the PLDT-Smart network into the Philippines’ most extensive and data-capable infrastructure.

The undertaking, he said, has also forced PLDT to adjust its financial track for the next three years, like resetting its core income guidance to P30 billion following the partial sale of its shares in power distributor Manila Electric Co.

Pangilinan said he was optimistic that PLDT’s P30-billion core income is “(the) new base from which the company will rise.” With a report from Miguel R. Camus/TVJ

RELATED STORIES

Can antitrust stop PLDT, Globe telco purchase?

After SMC telco buyout, PLDT-Globe duopoly continues

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

RELATED FROM THE INQUIRER

Drilon: Gov’t body can stop SMC-PLDT-Globe telecom deal SHARES: 521 VIEW COMMENTS By: Maila Ager @MAgerINQ INQUIRER.net 11:48 AM June 14th, 2016

The Philippine Competition Commission (PCC) can stop the joint acquisition of the San Miguel Corp (SMC) telecommunications assets by two industry giants if the deal, after a review, would encourage or result in a monopoly, Senate President Franklin Drilon said on Tuesday.

Drilon pointed out that under the Philippine Competition Act, the commission can review “whether a particular agreement or a particular practice would have monopolistic tendencies,” which he said would be prejudicial to public interest and to the expansion of the economy and business.

He cited as an example the recent agreement between the Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom to buy out the SMC’s Vega Telecom Inc. and two other telco companies with reported links to SMC.

READ: SMC sells telco assets to PLDT, Globe

“This is now subject to the review of the Philippine Competition Commission to see whether there is a monopoly or duopoly which prevent the coming-in of other players that therefore, kill competition,” Drilon said.


DRILON

Asked if there was a need to get the PCC’s nod before the deal was done, the Senate leader said: “No, but they have a right to review and they have the right to declare that these agreements stifle competition and therefore can stop it, theoretically.”

Asked again if there was a need for the PCC to go to the Supreme Court to stop the deal, Drilon said he could not recall if it was provided for in the law.

“But on their own, they can say that the agreement encourages or results in a monopoly and therefore this cannot be implemented – either portions, or the whole agreement,” he said.

PLDT and Globe earlier insisted that the Commission had no power to undo their joint acquisition last month./rga

READ: PLDT, Globe fight with gov’t regulator over SMC telecom sale


INQUIRER

FOREIGN PORTFOLIO INVESTMENTS or  ‘hot money’ inflows jump by 40% in May
[PEACEFUL ELECTIONS OUTCOME HELPS BOOST PORTFOLIO INVESTMENTS]
SHARES: 13 VIEW COMMENTS
By: Ben O. de Vera @BenArnolddeVera Philippine Daily Inquirer 12:42 AM June 17th, 2016

MORE foreign portfolio investments or “hot money” entered the country than the amount that was brought out in May, reversing the net outflows registered a month ago and in May last year.

Bangko Sentral ng Pilipinas (BSP) data released on Thursday showed that in May this year, $1.78 billion in foreign portfolio investments flowed into the country— the highest inflow since May last year.

In the meantime, the $1.71 billion in hot money withdrawn in May was the biggest outflow since July last year. This resulted in a net inflow of $72.8 million.

Foreign portfolio investments come in the form of placements in publicly listed shares, government and private sector IOUs, as well as in deposit certificates. Portfolio investments are considered short-term bets—hence, the term hot money—because these placements can be pulled out quickly.

In a statement, the BSP attributed the 40.1-percent month-on-month and 12.3-percent year-on-year jump in registered portfolio investments to “large inflows in shares of a holding company and a universal bank, renewed interest in peso-denominated government securities and the relatively peaceful conduct of elections (in May).”

Outflows, meanwhile, rose by 5.1 percent month-on-month “due to profit-taking,” the BSP said, although outflows were down by 20.7 percent year-on-year.

The net inflows in May reversed the net outflows of $354.1 million in April, which was blamed on pre-election market jitters, as well as the $569.3-million net outflow in May last year.

BSP data showed that the first two weeks of May yielded net outflows— $172.4 million on the week of May 2-6 or before the elections and $84.8 million on May 9-13 or the week following Election Day.

The remaining two weeks and two trading days of May resulted in net inflows of $123.3 million (on May 16-20), $50.7 million (May 23-27), and $156 million (May 30-31).

READ MORE...

In May, 83.3 percent of registered foreign portfolio investments were placed in Philippine Stock Exchange-listed securities (mainly of banks; food, beverage and tobacco companies; holding firms; property companies, and telecommunications firms), yielding net inflows of $46 million.

Peso government securities, meanwhile, saw net inflows of $27 million.

TOP 5

The top five sources of hot money in May were the Luxembourg, Singapore, Switzerland, the United Kingdom and the United States.

At the end of the first five months, inflows hit $6.6 billion while outflows reached $6.5 billion, resulting in a net inflow of $129 million.

The end-May net inflow was dwarfed by the $1.2 billion posted in the first five months of last year, as the BSP noted “profit-taking, concerns about the slowdown of the Chinese economy, and the decline in global oil prices” this year. Large inflows were recorded a year ago on the back of stock offerings of two holding companies, two universal banks and a property firm, the BSP said.


PHILSTAR

DOST-ICTO transitions to Department of ICT By Eden Estopace (The Philippine Star) | Updated June 13, 2016 - 12:00am 40 346 googleplus0 3


The priority is to make sure that the structures are correct moving forward, says DOST-ICTO deputy executive director for eSociety Bettina Quimson (left).

MANILA, Philippines - The long wait for the Philippines’ new Department of Information and Communications Technology (DICT) isn’t over.

The DICT Act of 2015, also known as Republic Act (RA) No. 10844, officially took effect last Thursday, ushering in a new era of governance that is hopefully more focused on ICT as a tool for national development.

The law, however, provides for a six-month transition for the full transfer of the functions of existing government agencies involved in ICT development.

The Information and Communications Technology Office of the Department of Science and Technology (DOST-ICTO), which has served as the lead implementing agency of the government in ICT matters since its creation in 2011, has been abolished along with other government agencies with ICT functions.

At the opening of the Innovative Strategies for Development Summit (ISDS) 2016, a three-day international conference on digital strategies for development hosted by the agency last week, executive director Louis Napoleon Casambre read a prepared statement acknowledging that it would take a much larger mandate for the Philippines to start playing catch-up in the vast global ICT arena.

“With ICT now having the authority at the department level, the country’s push to catch up will be much stronger,” Casambre said. “Finally, we will have the focus to drive our ICT agenda as a key player for national development.

By catching up, Casambre may be referring to the state of the nation vis-a-vis the rest of the world in using ICT for inclusive growth.

While Metro Manila, for example, is drowning in enormous problems brought about by severe infrastructure shortage - congestion, massive traffic jams, perennial flooding, and high crime rate - the rest of the world has long started the journey toward developing smart cities, or masterplanned communities that integrate ICT solutions in the urban development framework.

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These are cities that work with clockwork precision, powered by ubiquitous high-speed broadband, and feature, among others, smart transportation, high-tech healthcare services, high-quality digital education for the youth, and automated government services for all – things a Filipino can now only dream of in the next life.

In its five-year run, the DOST-ICTO and its partners have sought to bring technology to governance and strengthen industries through ICT. It has also tried to narrow the ever-widening divide between those who have access to technology no matter how limited and to those who have none at all.

“Some of these programs include the Juan, Konek! Free Wi-Fi Internet Access in Public Places Project, which seeks to provide free Internet access to almost all municipalities in the Philippines; Tech4ED, which builds digital literacy and ICT capabilities; and Rural Impact Sourcing, a program that enables people from the countryside to use their ICT skills to the fullest without having to go to urban areas,” Casambre summarized.

These efforts, however, need to be scaled up by the next administration to the level that could make a huge difference in the country’s economy and would allow us to take advantage of the opportunities in the digital age.

Opportunities for the digital economy


Undersecretary Louis Napoleon Casambre, DOST-ICTO executive director, says the DICT’s much larger mandate would allow the country to playing catch up in the vast global ICT arena.

In February this year, management consulting firm A.T. Kearney and Asian telecommunications company Axiata Group Berhad (Axiata) released a report showing that the growth of the digital economy could add $1 trillion to the GDP of the Association of Southeast Nations (ASEAN) bloc over the next 10 years.

“When it comes to market size and growth opportunities, there are few economic regions that can match ASEAN’s potential, especially when it comes to the digital economy. More than half of the bloc’s population is aged 30 or below. This is the consumer group which is most likely to contribute to the digital economy as they are most tech-savvy,” said Naveen Menon, partner and Asia-Pacific head of communications, media & technology practice at A.T. Kearney and one of the authors of the report, in a statement.

“The confluence of technology innovation, a youthful population, and robust economies can help ASEAN leapfrog into the vanguard of the digital economy,” he added.

As one of the more strategically situated countries in the ASEAN, the Philippines should be able to take advantage of this vast opportunity.

To meet this growth potential, the report recommended addressing important issues at the country level such as developing a comprehensive digital strategy, improving broadband and Internet access, accelerating innovation in mobile financial services, creating “smart” cities that harness the power of technology to empower businesses and consumers, and fostering a culture of digital innovation by revamping the K-12 and higher education system.

As the primary policy, planning, coordinating, implementing, and administrative entity of the executive branch of government that will develop the national ICT agenda, much lies in the hands of the newly-formed DICT.

Casambre also emphasized in a plenary session at ISDS 2016 that ICT cuts across all the 17 sustainable development goals identified by the United Nations, including putting an end to poverty and hunger, quality education, sustainable cities and communities, development work and economic growth, and good health and well-being, to name only a few.

Waiting for 1sT DICT team

The fate of the new DICT, however, now hangs in the balance as the country awaits the appointment of the first DICT secretary who can lead the charge in this new mission, as well as the three undersecretaries and four assistant secretaries that would comprise the team.

Brahima Sanou, director of the Telecommunication Development Bureau of the International Telecommunications Union (ITU), emphasized in his keynote address at the summit that there is a need for a shift from a vertical, siloed approach to policy making to collaborative regulation.

Casambre said in a press briefing that the agency has many recommendations for the incoming secretary but one of the most important is regulation or the need to address the legal environment.

“First, a lot of our problems stem from our antiquated laws. Second is the fact that only 17 percent of our schools are in areas with internet access. We are leaving behind 83 percent,” he said, adding that the wish list could actually be long.

DOST-ICTO deputy executive director for eSociety Bettina Quimson added that the important thing now is the crafting of the Implementing Rules and Regulations.

“We need to make sure that the structures are correct moving forward because right now we don’t have the people nor the actual capacity for all the things we need to do properly in the countryside,” she said. “We should have more regional offices and make sure that we have the budget to ascertain that all the programs we have can be done properly.”


Chief News Editor: Sol Jose Vanzi

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