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

SAYS ORTIZ-LUIS: INVESTORS NOT DETERRED BY PH WAR ON DRUGS, EJKs
[ALSO: FOREX SEPTEMBER 20, 2016: September 24-
Peso nears 48 to $1 level]


SEPTEMBER 20 -A leader of an exporters’ group views the Duterte administration’s war on drugs and the alleged extrajudicial killings associated with it are not deterrent to investments. Sergio Ortiz-Luis, president of the Philippine Exporters Confederation Inc., even challenged foreign chambers earlier reported to have said the issue is causing worry to investors “to name, names” of foreign companies which have packed up their bags or those which had planned to invest in the country but did not because of the drug issue. “Name one or two... because FDI (foreign direct investments) for one go for the money they will earn, they don’t care if 50 percent of Filipinos kill each other so long as they’re protected. That’s more of a statement of advocacy on part of the foreign chambers,” Ortiz-Luis said. “Have you heard of any foreign companies that have closed down? Or can they name names of those intending to come in but did not? What do they care as long as they’re not affected? If investors are watching and going to invest in Asia, and I know that the Philippines is now succeeding in taking away drugs and criminality, shouldn’t I as a foreign investor put it on my radar screen finally? ” he added. READ MORE...ALSO,
FOREX SEPTEMBER 20, 2016: September 24- Peso nears 48 to $1 level...

ALSO: Gregorio Araneta III takes chairmanship of PhilWeb replacing Ongpin[ALSO: BSP to Duterte-spooked investors: Economy more fun in the country]


SEPTEMBER 20 -Businessman Gregorio Ma. Araneta III, chairman and chief executive officer of the Araneta Properties Inc. and the son-in-law of former president Ferdinand Marcos, has been elected chairman of PhilWeb Corp.
In a meeting yesterday, PhilWeb’s board of directors appointed Araneta as its new chairman to replace businessman and former trade minister Roberto Ongpin. Ongpin resigned last month after President Duterte singled him out as an oligarch who must be destroyed. Araneta is the second largest shareholder of PhilWeb and has been a director of the company for a number of years. He also has other business interests in property development and energy aside from his investment in the company. Ongpin earlier decided to divest his entire holdings, equivalent to 771.6 million PhilWeb shares or 53.76 percent of the company through a private placement. READ MORE... ALSO, BSP to Duterte-spooked investors: Economy more fun in the country...

ALSO: 33% of comprehensive tax reform money for the poor - DOF underSec
[RELATED: Business groups back proposed tax reforms]


SEPTEMBER 21 -A third of the projected increase in tax collections under the proposed comprehensive tax reform program will be allocated for targeted subsidies for the poor. Karl Kendrick Chua, newly-appointed finance undersecretary, said on the sidelines of the Committee on Ways and Means’ hearing on tax reform measures yesterday that about P122 billion will be reserved for a subsidy plan that will support the poor who may be affected by the higher taxes. The Department of Finance’s (DOF) proposed tax package is expected to generate P566.4 billion in new revenues, but the government will lose P198.3 billion by slashing personal income tax rates, among others. The net revenue impact of the proposed tax program is P368.1 billion, with a third amounting to more than P122 billion. “We think, for the overall proposal, we have to give back about one-third, in terms of subsidies,” Chua said. “As I have mentioned for our full proposal, it’s around P368 billion, that’s around two percent of GDP (gross domestic product), one-third of that will be given in the form of targeted subsidies,” he added. READ MORE...RELATED, Business groups back proposed tax reforms...

ALSO: Rody not worried about turning off investors
(Despite China’s seizure of areas clearly within Philippine territory, Beijing has never been at the receiving end of Duterte’s vitriol. The National Economic and Development Authority (NEDA) yesterday also downplayed concerns raised by S&P Global Ratings, saying the administration has been very clear about its growth plan under its 10-point economic agenda.)
[RELATED: Duterte on S&P rating - China, Russia are waiting for me]


SEPTEMBER 22 -Despite its concern, S&P affirmed on Wednesday the Philippines’ long-term credit rating of ‘BBB’ and short-term credit rating of ‘A-2,’ with a stable outlook. President Duterte shrugged off S&P’s concern, saying the Philippines is formulating “a new foreign policy.” 
DAVAO CITY, Philippines – President Duterte said yesterday he is not worried about turning off European and American investors with his foul mouth as he can always turn to China and Russia for investments. “They make an issue of my mouth. They always complain about my mouth. I do not care if they do not invest here. They can all go away, I can go to China, I can go to Russia. They are waiting for me,” the President said in remarks before policemen at Camp Alagar, the regional police command in Cagayan de Oro City. “Wala akong pakialam sa inyo (I don’t care about you),” he added. He was reacting to S&P Global Ratings’ expressing its concern over diminishing predictability of government economic policies. Despite its concern, S&P affirmed on Wednesday the Philippines’ long-term credit rating of ‘BBB’ and short-term credit rating of ‘A-2,’ with a stable outlook.Duterte shrugged off S&P’s concern, saying the Philippines is formulating “a new foreign policy.” Cabinet members also disputed S&P’s assessment but were nevertheless more diplomatic about it. “I think the policy making has not changed,” Trade secretary Ramon Lopez said in a press briefing in Malacañang. “We have investment protection that will give peace of mind to our investors. Our FTA (free trade agreements), they are all being honored,” he added. READ MORE...RELATED, Duterte on S&P rating: China, Russia are waiting for me...

ALSO: ANALYSIS - How should the Philippines engage the world?
[RELATED: Rody - My mouth is my weakness, my strength]
(“Do not complain about my mouth, that’s my asset. My mouth is my weakness, it is also my strength. My mouth is not a problem. It cannot bring down the country,” President Rodrigo Duterte told police officers in Cagayan de Oro City yesterday.)


SEPTEMBER 22 -President Rodrigo Duterte waves to bid goodbye to well wishers before his departure from Laos on September 8, following his participation in the 28th and 29th ASEAN Summits. PPD/King Rodriguez
An analysis on the government's "independent" foreign policy
President Rodrigo Duterte has begun to chart a new foreign policy for the Philippines. His path, which he terms "independent," is one that reviews and realigns the Philippines' friendships with other countries. While the president’s mandate to define the country’s approach to foreign relations is unassailable, the administration should nevertheless reconsider its strategy in terms of potentially alienating established economic and security partners. Instead, the Philippines should maintain its good relations with trusted friends and pursue constructive relations with all of its neighbors, in both word and deed. There are three principles of foreign policy-making that serve as guiding principles for the field. First, a country’s approach must defend the country’s fundamental interests. These include the security and integrity of our territory, the health of our economy, and the protection of Filipino citizens abroad. READ MORE...RELATED, Rody: My mouth is my weakness, my strength...

ALSO: By Babae Romuladez - Duterte becomes pragmatic on US-Phl relations [ALSO: The best presidential offense]


SEPTEMBER 22 -SPYBITS By Babe Romualdez
It would seem President Duterte has finally realized the importance of our relationship with the United States, judging from his most recent statement reiterating that he does not want American troops to get out of Mindanao. The President admitted, we need the United States as an important ally especially with regard to our problem with China over the disputed maritime territories in the South China Sea especially since “we do not have armaments” and “not enough firepower” – knowing fully well that war with China is definitely not an option either way. Many “practical” and “patriotic” Filipinos heaved a sigh of relief with the development, saying we have to be pragmatic and set aside our so-called emotional, nationalistic feelings about our alliance with the United States. While it may be a good move to explore new ties with other countries like China or Russia and follow an independent foreign policy, we should not do so at the expense of old friends like the US. Our ties have been too deep that even our country’s educational system is patterned after the American model. We have a democratic style of government very similar to the United States, and foremost of which is that we have a very deep people-to-people connection as seen in the more than four million Filipinos living in the United States. Our sources within the military expressed shock at the earlier pronouncements of the President when he said he wanted the Americans to leave Mindanao. In fact, Defense Secretary Delfin Lorenzana openly admitted, “we still need” the Americans in Mindanao because “they have the surveillance capabilities that our armed forces don’t have.” READ MORE...ALSO, The best presidential offense...


READ FULL MEDIA REPORTS HERE:

SAYS ORTIZ-LUIS; Investors not deterred by war on drugs, EJKs

MANILA, SEPTEMBER 26, 2016 (MALAYA)  By Irma Isip September 20, 2016 - A leader of an exporters’ group views the Duterte administration’s war on drugs and the alleged extrajudicial killings associated with it are not deterrent to investments.

Sergio Ortiz-Luis, president of the Philippine Exporters Confederation Inc., even challenged foreign chambers earlier reported to have said the issue is causing worry to investors “to name, names” of foreign companies which have packed up their bags or those which had planned to invest in the country but did not because of the drug issue.

“Name one or two... because FDI (foreign direct investments) for one go for the money they will earn, they don’t care if 50 percent of Filipinos kill each other so long as they’re protected. That’s more of a statement of advocacy on part of the foreign chambers,” Ortiz-Luis said.

“Have you heard of any foreign companies that have closed down? Or can they name names of those intending to come in but did not? What do they care as long as they’re not affected? If investors are watching and going to invest in Asia, and I know that the Philippines is now succeeding in taking away drugs and criminality, shouldn’t I as a foreign investor put it on my radar screen finally? ” he added.

READ MORE...

Ortiz-Luis also said collateral damage can be expected from the war against drugs.

“What’s the difference with those (civilians) who died during bombings… (and the) civilians who are dying now in the war (against drugs)? I don’t think there’s much difference. I don’t think they should pontificate on us for this,” he added.

Ortiz-Luis also said the government is winning the war on drugs and no foreign entity should meddle with the action.

“We have declared a war and I think we’re winning and in the past we’ve declared a war on Mindanao and it’s the Americans who stopped us and (on this) they probably will stop us or tell us how to do it. I don’t think that’s fair,” he added.

But he said in certain ways, the fight is “overdone” which he noted could be “part of the formula to bring fear… Otherwise, how will they surrender?”

“If every time there’s a protest, (do) you give in? And everytime they run to some foreign association, we will stop? We will never be able to do this,” Ortiz-Luis added.

“If we are able to succeed in this in one year, I’m sure the foreign countries will probably take a lesson from us and make us a model. Indonesia, I think, is thinking of making us a model,” he noted.


FROM BANGKO SENTRAL NG PILIPINAS

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PHILSTAR UPDATE SEPTEMBER 24, 2016

Peso nears 48 to $1 level By Lawrence Agcaoili (The Philippine Star) | Updated September 24, 2016 - 12:00am 0 21 googleplus0 0


The peso shed 16 centavos to close at 47.99 from Thursday’s 47.83 to $1. It opened at 47.60 and hit an intra-day low of 48 to $1. STAR/File photo

MANILA, Philippines - The peso yesterday flirted with the 48 to $1 level amid the strong demand for the greenback as well as concerns about the tirades made by President Duterte against known allies of the Philippines.

The peso shed 16 centavos to close at 47.99 from Thursday’s 47.83 to $1. It opened at 47.60 and hit an intra-day low of 48 to $1.

This was the weakest level since the local currency closed at 47.995 to $1 last Jan. 29.

Volume of trade amounted to $590.5 million, higher than Thursday’s $502.855 million.

Traders believe there is a strong demand for dollar from companies that usually import more raw materials in the third quarter in preparation for the strong demand during the Christmas season.

“There is strong corporate demand for dollars as the third quarter is an importation quarter,” a trader said.

The Bangko Sentral ng Pilipinas (BSP) kept the country’s monetary policy stance unchanged on Thursday amid the strong domestic demand and the benign inflation environment.

Likewise, the US Federal Reserve kept interest rates unchanged but signaled it could tighten monetary policy by the end of this year.

BSP Governor Amando Tetangco Jr. said earlier the holding off of further action by the US Fed showed it could be a little bit more patient in the normalization of interest rates.

“For our markets this may mean that we could possibly see some slowing in the weakness of the peso in the near term until the next Fed meeting again. It may even encourage very short term trades to squeeze some more juice from the carry,” he said.

Tetangco added monetary authorities would continue to monitor developments to determine excessive market reactions.

According to him, the recent weakness in the peso has been due to a number of factors including the actions of the US Fed, Bank of Japan, and the European Central Bank.

“It is normal price action that in the run up to these meetings, volatility heightens and markets become defensive and take profit on positions. Of particular interest relative to the peso is the Fed action,” he said.


PHILSTAR

Araneta takes chairmanship of PhilWeb By Iris Gonzales (The Philippine Star) | Updated September 20, 2016 - 12:00am 1 123 googleplus0 1

MANILA, Philippines - Businessman Gregorio Ma. Araneta III, chairman and chief executive officer of the Araneta Properties Inc. and the son-in-law of former president Ferdinand Marcos, has been elected chairman of PhilWeb Corp.

In a meeting yesterday, PhilWeb’s board of directors appointed Araneta as its new chairman to replace businessman and former trade minister Roberto Ongpin.

Ongpin resigned last month after President Duterte singled him out as an oligarch who must be destroyed.

Araneta is the second largest shareholder of PhilWeb and has been a director of the company for a number of years.

He also has other business interests in property development and energy aside from his investment in the company.

Ongpin earlier decided to divest his entire holdings, equivalent to 771.6 million PhilWeb shares or 53.76 percent of the company through a private placement.

READ MORE...

He is now in talks with investment bankers on how best to go about the share sale.

PhilWeb is on temporary shutdown after the Philippine Amusement and Gaming Corp. refused to renew its license which expired on Aug. 10.

The company is behind the popular e-Games network, which are internet cafes exclusively dedicated to casino games.

With the technology provided by PhilWeb, patrons can choose from more than 300 casino games, including baccarat, blackjack, various slot machine games, video poker and sports betting.


Irene Romualdez Marcos & husband Greggy Araneta

There were about 268 operating e-Games cafes across the country, majority of which are owned and operated by independent entrepreneurs.

PhilWeb continues to negotiate with Pagcor for the renewal of its license especially after Duterte backtracked on online gaming, saying he may allow this to continue if the outlets are located far from schools and churches.

The company is also studying the viability of participating in the Duterte administration’s plan to roll out offshore gaming to help offset revenue losses as a result of the shutdown of PhilWeb’s e-games network.

“To safeguard the welfare of the Filipinos at the same time meet the agency’s revenue targets to help fund the government’s nation-building programs, Pagcor will also venture into licensing of offshore gaming operators,” Pagcor said.

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ALSO FROM THE INQUIRER

BSP to Duterte-spooked investors: Economy more fun in the country@inquirerdotnet
Philippine Daily Inquirer 12:22 AM September 24th, 2016

Despite external volatilities as well as sociopolitical risks on the domestic front, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. urged investors not to waver and trust the country’s strong economy.

“Let me deal with the elephant in the room. I know you are not newbies to volatility. Therefore I think it is important that, in all the sociopolitical events surrounding the market today, we should not lose sight of the fact that our macrofundamentals are solid and that these were built over years of deliberate conscientious reforms,” Tetangco said in a speech before financial industry associations Thursday night.

He asked investors not to be carried away by sentiments, which he admitted could run—and sometimes “over-run”—the markets.

Reports claimed foreign investors have been pulling out funds in the stock market, which some blamed to souring bias over President Duterte’s controversial statements and policies. The peso has also been experiencing weaknesses against the greenback in the last few weeks.

Further fueling market volatility was debt watcher S&P Global Ratings’ recent report where it noted that Duterte’s law and order thrust brought about “rising uncertainties” in the governance front and “could undermine respect for the rule of law and human rights, through the direct challenges it presents to the legitimacy of the judiciary, media, and other democratic institutions.”

“When combined with the President’s policy pronouncements elsewhere on foreign policy and national security, we believe that the stability and predictability of policymaking has diminished somewhat,” S&P said on Wednesday.

Tetangco assured market players “the BSP has the tools to help ride out the volatilities.”

“We can also employ targeted macroprudential tools to bring about a more directed influence on market behavior, if and as warranted,” the BSP chief added.

“In turn, we expect that the market would take measured risks—lend to viable projects that generate jobs, create client-suitable products, utilize your liquidity not just for financial assets, make your capital work. Our regulations and our policy framework are geared towards providing a balanced, safe and sustainable operating environment for you,” Tetangco said. Ben O. de Vera


MALAYA BUSINESS INSIGHT

33% of comprehensive tax reform allocated money for the poor By ANGELA CELIS September 21, 2016

A third of the projected increase in tax collections under the proposed comprehensive tax reform program will be allocated for targeted subsidies for the poor.

Karl Kendrick Chua, newly-appointed finance undersecretary, said on the sidelines of the Committee on Ways and Means’ hearing on tax reform measures yesterday that about P122 billion will be reserved for a subsidy plan that will support the poor who may be affected by the higher taxes.

The Department of Finance’s (DOF) proposed tax package is expected to generate P566.4 billion in new revenues, but the government will lose P198.3 billion by slashing personal income tax rates, among others.

The net revenue impact of the proposed tax program is P368.1 billion, with a third amounting to more than P122 billion.

“We think, for the overall proposal, we have to give back about one-third, in terms of subsidies,” Chua said.

“As I have mentioned for our full proposal, it’s around P368 billion, that’s around two percent of GDP (gross domestic product), one-third of that will be given in the form of targeted subsidies,” he added.

READ MORE...


In Photo: World Bank Group senior country economist Karl Kendrick Chua (left) briefs the media regarding the Philippine Economic Update January 2015 edition during a news conference held in Taguig City. Also present during the briefing is World Bank Group lead economist Rogier van den Brink. FROM THE BUSINESS MIRROR.CO.PH

Chua however clarified that the estimated figures are still preliminary and subject to change until the proposal is passed into law.

“But then, we’re doing this (targeted subsidies) in a very fair way today. Unlike 10 years ago, we now know the households by name and address, and this is the basis for the 4Ps (Pantawid Pamilyang Pilipino Program),” Chua said.

“We can reach out and target the poor so that they will get the benefits directly, instead of (having) a middle man or a trader who have other reasons to get the subsidies,” he added.

Chua said currently, there are 15 million households on the government’s targeting system.

“I understand some four million receive the CCT (conditional cash transfer), (but) the CCT cannot solve everything. We need livelihood, we need to assist them but we need the targeting system that we hope can be used for all programs,” he said.

Chua cited the planned increase in fuel excise tax as one of the reasons for the need to have targeted subsidies.

“We realized that majority of the oil is consumed really by the rich who can afford cars, so many countries have moved from subsidizing to just providing targeted transfers to the poor and that is what exactly what we want to do,” Chua said.

“As I mentioned, the top 10 percent of Filipino households consume 60 percent of oil products, while the top one percent consume 20 percent, (and they) are those who basically have cars that cause a lot of traffic congestion and pollution. So what we are proposing are for those who are in the lower 50 percent of the population, we can provide assistance to them by improving our CCT program for instance,” he added.

Chua said the ordinary working class can also be protected partially through a cash card scheme or some discounts, so that the fare price does not translate fully to them.

“And you know oil price have gone so low that this is the opportunity we have to do, especially since it hasn’t been adjusted for 20 years,” he added.

Under the DOF proposal, he said, excise tax on gasoline and related fuel products will increase from P4.35 to P10 per liter while diesel and the other products with zero excise tax will be slapped with P6 per liter.

“It will be gradual, so the proposal will have a gradual implementation beginning 2017 and will mature by 2019. So it doesn’t mean that once it is implemented you will be hit by a P10 increase, it could be P4 to P6 to P8, but for now these are being finalized as we improve the package,” he said.

Chua said the DOF is already in the final stages in the crafting of its tax reform package. The Committee on Ways and Means asked the DOF to submit the final copy of its tax proposal within the week.

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

RELATED FROM PHILSTAR

Business groups back proposed tax reforms By Richmond Mercurio (The Philippine Star) | Updated September 24, 2016 - 12:00am 0 11 googleplus0 0


“Having fair, simple and easy-to-comply tax laws will help improve the ease of doing business in the country and will encourage more local and foreign investments,” the Management Association of the Philippines (MAP) said in a statement yesterday. STAR/File photo

MANILA, Philippines - Local business groups have reiterated their support to the Duterte administration’s tax reform plan, citing its importance in making the country a more attractive investment destination.

“Having fair, simple and easy-to-comply tax laws will help improve the ease of doing business in the country and will encourage more local and foreign investments,” the Management Association of the Philippines (MAP) said in a statement yesterday.

“The MAP fully supports the tax reform package of the Duterte administration for a simpler, equitable, and efficient tax system that would encourage voluntary compliance, lower the compliance cost, promote progressivity, and expand the tax base while spreading the tax burden,” the group added.

The MAP is urging the Department of Finance (DOF), the Senate, and the House of Representatives to exhaust all possible means to make the tax system simpler to administer, fairer to taxpayers, and more attractive to investors.

The business group said the enactment of a holistic tax reform measure would correct current inequities, encourage compliance, and pursue measures that would counter the effects of tax rate adjustments.

The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, has also aired its support to the comprehensive tax reform program being proposed by the DOF.


Philippine Chamber of Commerce and Industry President George T. Barcelon.

PCCI president George Barcelon lauded the government’s initiatives to reform the country’s tax system, saying it is high time that inefficiencies and loopholes are plugged.

“Widening the tax base, simplifying the tax structure, and making the system easier to administer will significantly minimize tax evasion, improve compliance and collection, and make the system equitable and efficient,” Barcelon said.

PCCI said the comprehensive tax reform program would play a significant role to meet the government’s commitment to increase and accelerate delivery of infrastructure projects and social services.

To further increase tax collection, the group is also pushing for a special tax regime for micro and small enterprises to encourage this taxpayer segment to be compliant.

The administration-backed tax reform package will be submitted to Congress on Monday, with government support ensuring its passage although not likely by the end of the year as targeted.

The first of four packages meant to amend the nearly two-decade-old National Internal Revenue Code will be handed to the House Ways and Means Committee “on Monday, 10 a.m.,” the Department of Finance said yesterday.

“The tax reform package may be described as the linchpin of the broader reform package envisioned by the Duterte administration,” Finance Secretary Carlos Dominguez said in a statement.

Chances are high it will be passed, although at this early, the House committee that will tackle it tried to temper expectations it will be in effect by next year as DOF earlier said.

“Our target is to bring it to the plenary by the end of the year,” said committee chairman Quirino Rep. Dakila Carlo Cua.

“Definitely, it will be passed, it’s just a question when,” he said in a phone interview.

As promised by President Duterte during his campaign, the first of four packages aims to lower personal income taxes by restructuring the tax brackets that currently impose a maximum of 32 percent on earnings of more than P500,000.

Under the plan, the 32 percent will now be charged for those earning between P3 and P5 million every year, while a new 35-percent levy will be slapped on those with more than P5 million.

To offset revenue losses, excise taxes on oil will be adjusted, with diesel no longer exempted, while exemptions to value-added tax will also be reduced.

Dominguez said a “uniform” excise tax on sweetened beverages worth P10 per liter will also be imposed. – With Prinz Magtulis


PHILSTAR

Rody not worried about turning off investors By Alexis Romero and Edith Regalado (The Philippine Star) | Updated September 23, 2016 - 12:00am 1 1 googleplus0 0


Despite its concern, S&P affirmed on Wednesday the Philippines’ long-term credit rating of ‘BBB’ and short-term credit rating of ‘A-2,’ with a stable outlook. President Duterte shrugged off S&P’s concern, saying the Philippines is formulating “a new foreign policy.”

DAVAO CITY, Philippines – President Duterte said yesterday he is not worried about turning off European and American investors with his foul mouth as he can always turn to China and Russia for investments.

“They make an issue of my mouth. They always complain about my mouth. I do not care if they do not invest here. They can all go away, I can go to China, I can go to Russia. They are waiting for me,” the President said in remarks before policemen at Camp Alagar, the regional police command in Cagayan de Oro City. “Wala akong pakialam sa inyo (I don’t care about you),” he added.

He was reacting to S&P Global Ratings’ expressing its concern over diminishing predictability of government economic policies.

Despite its concern, S&P affirmed on Wednesday the Philippines’ long-term credit rating of ‘BBB’ and short-term credit rating of ‘A-2,’ with a stable outlook.

Duterte shrugged off S&P’s concern, saying the Philippines is formulating “a new foreign policy.”

Cabinet members also disputed S&P’s assessment but were nevertheless more diplomatic about it.

“I think the policy making has not changed,” Trade secretary Ramon Lopez said in a press briefing in Malacañang.

“We have investment protection that will give peace of mind to our investors. Our FTA (free trade agreements), they are all being honored,” he added.

READ MORE...

Presidential Communications Secretary Martin Andanar said the S&P assessment “gives the government greater resolve to make the economy growth robust, sustainable and inclusive.”

“The President’s commitment in the anti-illegal drug campaign and criminality will enhance the country’s image to attract more foreign investments. Peace and order is a must for investors to invest more in the country,” Andanar said. “As we all know, consumer optimism soared at the start of this presidency.”

The President even joked about preferring to go to Asian countries where there is bountiful and lavishly served food.

“Eh, dun sagbot lang (there they just serve grass),” the President said, apparently referring to salads served in Western countries.

Despite China’s seizure of areas clearly within Philippine territory, Beijing has never been at the receiving end of Duterte’s vitriol.

The National Economic and Development Authority (NEDA) yesterday also downplayed concerns raised by S&P Global Ratings, saying the administration has been very clear about its growth plan under its 10-point economic agenda.

Rolando Tungpalan, NEDA deputy director general for investment programming, said that as far as economic policy is concerned, the Duterte administration remains focused on its strategy for making economic growth more inclusive.

Such strategy includes accelerating infrastructure projects and attracting more investments in the agriculture and industry sectors.

10-POINT ECONOMIC AGNEDA

“If we go back to the 10-point agenda, we have clarity. We are saying we are inviting foreign investments in the agriculture and industry sectors. We are spreading progress outside of Metro Manila to the regions and rural areas; we are building infrastructure that would boost competitiveness and productivity,” Tungpalan told reporters on the sidelines of the 2nd annual policy conference of the Philippine Institute of Development Studies (PIDS).

The credit rating firm said a higher rating is unlikely over the next two years but stressed it may reconsider such position if “improvements in the policy environment lead us to a better assessment of institutional and governance effectiveness.”

The administration’s 10-point economic agenda covers continuance and maintenance of current macroeconomic, fiscal, monetary and trade policies; institution of a progressive tax reform and more effective tax collection; increasing the competitiveness of businesses and improving the ease of doing business; accelerating annual infrastructure spending; promoting rural development; ensuring security of land tenure to encourage investments; investing in human capital development; promoting science and technology; improving social protection and strengthening the implementation of the Responsible Parenthood and Reproductive Health Law.

Tungpalan also noted that in the case of the mining industry – which strongly requires policy stability – the government has not made new policy pronouncements that contradict existing policies.

The Department of Environment and Natural Resources (DENR) has launched a sweeping audit of the operations of the country’s 40 metallic mines, more than half of which have been recommended for suspension for various violations.

Tungpalan stressed the government is operating within the bounds of existing laws and has so far not introduced new policies.

“In the case of the mining sector, there is an existing law so it is a matter of enforcing those laws until the laws are amended. So we are sticking to the rules that are already available and there are no new policy pronouncements that take over existing policies. I see no evidence of inconsistencies for far,” he said.

NEDA deputy director general for policy and planning Rosemarie Edillon said the agency is ensuring policy coherence in the creation of the new medium-term country development plan. – With Czeriza Valencia, Lawrence Agcaoili

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RELATED FROM PHILSTAR

Duterte on S&P rating: China, Russia are waiting for me By Alexis Romero (philstar.com) | Updated September 22, 2016 - 9:00pm 20 2606 googleplus0 2


Malacañang Photo Bureau/Released
MANILA, Philippines -- I don’t care.

This was President Rodrigo Duterte’s reaction to credit rater Standard & Poor’s assessment that predictability in policymaking – one of the considerations in making investment decisions – diminished under his administration.

S&P, a US-based financial services firm that rates the abilities of companies and governments to pay their obligations, affirmed on Wednesday the Philippines’ long-term credit rating of ‘BBB’ and short-term credit rating of ‘A-2,’ with a stable outlook.

Standard and Poor's is accredited as a rater by the US Securities and Exchange Commission but is not a government agency.

READ: S&P tags downside risks to Philippine growth

While the rating is a notch above investment grade, the credit watchdog said the stability and predictability of policymaking in the country has “diminished somewhat” in light of Duterte’s policy pronouncements on foreign policy and national security.

Duterte shrugged off the assessment, saying the Philippines is formulating "a new foreign policy."

"Go away. We'll start on our own. I can go to China, Russia. They are waiting for me," the president told police officers in Cagayan de Oro City on Thursday.

"Wala akong pakialam sa inyo (I don’t care about you)," he added.

READ: Foreign investors hesitant amid extrajudicial killings

Cabinet members also disputed S&P’s assessment but were more diplomatic about it.

"I think the policymaking has not changed," Trade Secretary Ramon Lopez said in a press briefing in Malacañang.

"We have investment protection, that will give peace of mind to our investors. Our FTA (free trade agreements), they are all being honored," he added.

Presidential Communications Secretary Martin Andanar said the S&P assessment “gives the government greater resolve to make the economy growth robust, sustainable and inclusive.”

"The president’s commitment in the anti-illegal drug campaign and criminality will enhance the country’s image to attract more foreign investments. Peace and order is a must for investors to invest more in the country," Andanar said.

"As we all know, consumer optimism soared at the start of this presidency."

On Tuesday, members of the Philippine Chamber of Commerce and Industry said the war on drugs is good for business despite a rise in deaths attributed to the government's drive against narcotics.

"Many of us believe in the same thing, these are allegations,” PCCI president George Barcelon said. “We would not want to jump to conclusion on this issue."

Sergio Ortiz-Luis Jr., president of the Philippine Exporters Federation Inc., also disputed reports that foreign investors have become wary of coming into the country because of the killings.

"They don’t care if 50 percent of Filipinos kill each other so long as they are not affected," he said.

READ: 'Rift with EU to hurt economy'


PHILSTAR

How should the Philippines engage the world? By Dindo Manhit (philstar.com) | Updated September 22, 2016 - 4:22pm 1 46 googleplus0 0


President Rodrigo Duterte waves to bid goodbye to well wishers before his departure from Laos on September 8, following his participation in the 28th and 29th ASEAN Summits. PPD/King Rodriguez

An analysis on the government's "independent" foreign policy

President Rodrigo Duterte has begun to chart a new foreign policy for the Philippines. His path, which he terms "independent," is one that reviews and realigns the Philippines' friendships with other countries. While the president’s mandate to define the country’s approach to foreign relations is unassailable, the administration should nevertheless reconsider its strategy in terms of potentially alienating established economic and security partners. Instead, the Philippines should maintain its good relations with trusted friends and pursue constructive relations with all of its neighbors, in both word and deed.

There are three principles of foreign policy-making that serve as guiding principles for the field.

First, a country’s approach must defend the country’s fundamental interests. These include the security and integrity of our territory, the health of our economy, and the protection of Filipino citizens abroad.

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Second, it must seek to achieve its goals while espousing national and universal values, such as upholding our commitments and complying with or enforcing international law. Third and important for a less-developed country, it must strive for all of the above in the most efficient or least costly manner.

Independence must contribute to our overall foreign policy objectives

It goes without saying that Filipinos want a foreign policy that is independent, at least if the term is understood as a policy crafted by Filipinos without undue pressure from other countries. If the president’s aim is a foreign policy that resists external demands and elevates the national interest, he would be upholding his duties under the Constitution. However, in light of the three principles, independence alone is not sufficient for a sound foreign policy.

Beyond an independent stance lies the complex dynamics that will directly and indirectly affect the administration’s objectives of national development.

Foremost among these is the ten-point economic manifesto envisioned to transform the country into a true economic tiger and a force in the region. An unwelcoming atmosphere in the Philippines could easily dampen the country’s economic relationships. In the United States, as elsewhere, private investors have reportedly grown skittish about the Philippines’ prospects. The US economy is the Philippines’ largest source of private investment and second-largest export market after Japan.

Unfortunately, in President Duterte’s case, the term ‘independent’ appears to be shorthand for pushing the United States away and pulling China closer.

Although his spokesmen and secretaries would issue follow-up statements to clarify the president’s meaning, these do little to mask his sentiments on the Philippines-US relationship. Any reader paying attention to the past few weeks’ news comes away with the sense that the Philippines is not looking to strengthen its ties with its traditional ally.

The country can pursue its independence without squandering its hard-earned, advantageous relationships with other countries. At the end of the day, the government’s new stance must be calibrated to ensure that it does not compromise the administration’s ten-point plan and the Philippines’ overall economic security.

Drastic shifts can undermine the government’s credibility

A cavalier take on the Philippines’ international ties, as evinced by the president’s off-the-cuff remarks, could have a very real impact on the country’s fundamental interests.

At the same time, we cannot miss the fact that President Duterte’s statements mark a philosophical, not only geopolitical, shift in the Philippines’ approach to foreign affairs.

MORE BALANCED VIEW

In contrast to the Aquino administration’s officially ‘principled’ tack, which did build on the country’s ties with the United States, but at the same time alienated China, the new approach signals an ostensibly more balanced view of the Philippines’ interests.

Some have hoped that Duterte’s early overtures to China would help our country to reaffirm the view that, although we welcome the Arbitral Tribunal’s favorable ruling, the situation in the West Philippine Sea need not encompass the entirety of the Philippines-China relationship.

Although our economic relationship with China is not as strong as with other countries, there are tangible benefits to encouraging greater trade, leveraging Chinese funds for infrastructure, and engaging in educational, cultural, and scientific exchanges. Steps toward this end would benefit Filipino and Chinese citizens alike, not least by helping build trust and understanding between our peoples.

WARMING UP TO CHINA

However, the government appears to be warming up with China less for these benefits and more to signal a quick break from the United States, which is unfortunate. It has created this impression by taking strong measures beyond the requirements of prudence. It is one thing for the administration to downplay the Arbitral Tribunal’s favorable ruling, out of a fear of possible retribution. It is another thing entirely to halt patrols with the United States and limit them to a minimal 12 nautical mile distance—far less than the full 200 nautical mile spread of the country’s Exclusive Economic Zone.

By taking such drastic steps, the administration gives the impression of swinging wildly and insincerely instead of taking smaller, but more meaningful steps toward friendly relations. Part of why such steps give the impression of insincerity is that they do not fit into the aforementioned principles for foreign policy. The decisions to halt joint patrols, limit the patrolling distance, and even purchase weapons from China, seem designed to please Beijing but not defend the safety and integrity of our country nor sustain our commitment to uphold and help enforce international law.

If it wants to build good ties and earn the respect of our neighbors, the administration must also reconsider whether big gestures are the way to go. Being careful with our pronouncements and calibrated with our actions will send a more meaningful signal not only to China, but also to all of the Philippines’ international partners. Such care will help the president and his team achieve the Philippines’ foreign policy objectives.

Dindo Manhit is the president of Stratbase-Albert Del Rosario Institute (ADRi) for Strategic and International Studies.

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RELATED FROM PHILSTAR

Rody: My mouth is my weakness, my strength (The Philippine Star) | Updated September 24, 2016 - 12:00am 24 4259 googleplus3 2


“Do not complain about my mouth, that’s my asset. My mouth is my weakness, it is also my strength. My mouth is not a problem. It cannot bring down the country,” President Rodrigo Duterte told police officers in Cagayan de Oro City yesterday. Philstar.com/AJ Bolando

MANILA, Philippines - Don’t worry about the cussing; it won’t bring down the country.

“Do not complain about my mouth, that’s my asset. My mouth is my weakness, it is also my strength. My mouth is not a problem. It cannot bring down the country,” President Duterte told police officers in Cagayan de Oro City yesterday.

Responding to criticisms that he is not behaving like a statesman, Duterte said he does not care if he is unpopular in other countries as long as he fulfills his mandate to serve the Filipino people.

“I am just a small town mayor, my mouth is rural. I never took a course on statesmanship, and I do not intend to be one. And just plainly, if you could call me mayor, I’d be happy because that’s almost my affiliation. Never mind if I’m unpopular there in Europe. I’m not from Europe. I am just the president of the Philippines, just the Philippines,” he added.

Duterte, known for his tough and often foul talk, said he never applied to be a statesman and he does not intend to be one.

“I applied as president of the Philippines and I was elected,” he said. “(With regard to a) statesman, I don’t know how he would dress, I do not even know how he would open a statement. But what I know is that I have to serve the greater interest of the Filipino people.”

The President also justified his tough words for the European Union and other groups that lecture him about human rights.

The EU has asked Duterte to investigate and stop the extralegal killing of suspected drug personalities. Duterte responded by saying “F**k you” and claimed that the regional bloc is hypocritical for lecturing on him while maltreating migrants.

“I cursed because one would think that with all the pontification and every word that they utter, they like it to be treated as an ex cathedra thing,” the President said.

“Kung sila marurunong, tayo binababoy (While they may appear knowledgeable, we are being bastardized),” he added.

Duterte nearly cursed the EU again yesterday, but managed to hold back.

“We will only aspire for one nation, I will not obey the unreasonable mandates of whatever from EU. EU de…,” he said, not completing the Spanish term for bastard.

Investors not turned off by invectives

Sen. Ralph Recto expressed belief that the President’s cursing would not affect investment.

He said hard-nosed investors are attracted by incentives and are not repelled by invectives, and they go to where money can be made, like the Philippines with “an irresistible large market of over 100 million consumers.”

He also said “a president’s colorful language is not a risk to be managed. Trading does not stop because the President has again thrown a tantrum.”

“The leader of the land where they’ll be sinking their money in can drop ‘F’ bombs for all they care. In search for the almighty profit, throughout human history, merchants march with soldiers to war, often ahead of mercenaries,” Recto said.

“What is impolite to investors are the abrupt changes in rules. What is inelegant language to them are the rules of red tape,” he added.

Recto also believes investors are not complaining about Duterte’s bad language but are angry over traffic congestion, weak infrastructure and slow internet. And it is fortunate that the economy rests on strong fundamentals and numbers that matter are healthy so far.

Investors, he said, can live with a president who constantly curses for as long as government policies are consistent, and contracts, except fraudulent ones, are honored.

“They can live with a president who predictably swears for as long as the rules of business are predictable,” the senator said.

He said for as long as Duterte’s verbal tirades do not metamorphose into official state policy, no great harm is done, “except maybe to our sensitive ears.”

But Recto said there is a need to boost the Philippines’ global tourism PR drive to negate the bad press the country is getting.

He noted the current setup of damage control where Cabinet members grab the nearest microphone every time the President says something of shock value, in order to reassure the nation and the world that existing policies remain and current treaties are not rescinded.

“We can only be thankful that after the President’s regular ‘shock and awe’ show, Cabinet members already know the drill, and come out with fire hoses ready,” Recto said.

But Recto noted that those close to Duterte should remind him that good statecraft requires the discipline of carefully choosing the right words for the right occasion.

Camarines Sur Rep. Luis Raymund Villafuerte also urged Duterte’s critics to give him a chance to do his job and achieve his goal of real change.

He said it is imperative for all Filipinos to transcend their personal partisan interests and support the President at this point because the continued investment-grade rating of S & P Global Ratings for the Philippines is “proof enough that the Duterte administration is on the right track in pursuing a 10-point socioeconomic agenda that will arrest lawlessness and curb generational poverty.”

“It will be the height of irony if the Philippines goes bust at the end of the Duterte presidency just because we Filipinos did not believe – as much as foreign institutions did – that we can do it,” he added. – With Jess Diaz, Paolo Romero, Edith Regalado


PHILSTAR

Duterte becomes pragmatic on US-Phl relations SPYBITS By Babe Romualdez (The Philippine Star) | Updated September 22, 2016 - 12:00am 2 58 googleplus0 0


SPYBITS By Babe Romualdez

It would seem President Duterte has finally realized the importance of our relationship with the United States, judging from his most recent statement reiterating that he does not want American troops to get out of Mindanao.

The President admitted, we need the United States as an important ally especially with regard to our problem with China over the disputed maritime territories in the South China Sea especially since “we do not have armaments” and “not enough firepower” – knowing fully well that war with China is definitely not an option either way.

Many “practical” and “patriotic” Filipinos heaved a sigh of relief with the development, saying we have to be pragmatic and set aside our so-called emotional, nationalistic feelings about our alliance with the United States.

While it may be a good move to explore new ties with other countries like China or Russia and follow an independent foreign policy, we should not do so at the expense of old friends like the US. Our ties have been too deep that even our country’s educational system is patterned after the American model.

We have a democratic style of government very similar to the United States, and foremost of which is that we have a very deep people-to-people connection as seen in the more than four million Filipinos living in the United States.

Our sources within the military expressed shock at the earlier pronouncements of the President when he said he wanted the Americans to leave Mindanao. In fact, Defense Secretary Delfin Lorenzana openly admitted, “we still need” the Americans in Mindanao because “they have the surveillance capabilities that our armed forces don’t have.”

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As we have previously pointed out, American GPS technology was critical in pinpointing the location of the notorious Abu Sayyaf terrorist Ghalib Andang alias Commander Robot, and which led to his capture.


LORENZANA

Having been a military general, Lorenzana certainly recognizes the key support provided by US troops in counterterrorism operations in terms of intel sharing, training, and technical assistance.

Let’s face it, our close ties with America forged over seven decades of diplomatic relations has been very beneficial to the country.

The US is the largest grant donor to this country with over $5 billion in aid provided in the last three decades through the USAID – and this does not even include the hundreds of millions donated by the US government for Super Typhoon Yolanda rehabilitation efforts. In terms of military assistance, the figure has reached $66 million in 2015 alone.

Foreign Secretary Jun Yasay’s comments that Filipinos are no longer the “little brown brothers” of America – referring to the words of then governor-general William Howard Taft – should be a non-issue.


YASAY

Such “paternalistic” sentiment as displayed by Taft is in the past (and where it should be confined in obsolescence) because relations between the two countries have reached a state where mutual respect is very much observed today.

Just how important the relationship with the US is in terms of our economy can also be gleaned from the movement in the stock market over the past five weeks (from mid-August to Sept. 16) with the PSE index consistently going on a downtrend – shaking investor confidence in the country.

Hopefully, the government can work out the kinks that come with a “complex” relationship such as the one we have with the US and continue to work on mutual issues like terrorism or even the drug menace. The President should not allow himself to get all riled up when the US, the United Nations or even the European Union raise concerns on the issue of human rights.

The US does that all the time to many other countries like Thailand, for instance, during the time of Thaksin Shinawatra when the Thai government also launched a war against illegal drugs. As for the UN – it’s part of their mandate to express concern over controversial issues that impact on the rights of people worldwide.


TUGADE

‘Political will needed to solve transportation problems’

The Manila Overseas Press Club’s Transportation forum with Secretary Art Tugade as guest speaker was a huge success with the Big Room of the Manila Golf and Country Club filled with guests – which only goes to show that people are really interested in the issue of congestion and traffic.

A lot of people sent me text messages and emails saying they were impressed by the DOTr Secretary’s wit and straightforwardness during the forum

Saying the solutions cannot be handled by one man or one group alone but must be addressed by “the totality and with commonality from the community,” Tugade said that one reason why the past administration failed to deliver to the satisfaction of the public is that it lacked “political will.”

One needs a stick to wield political will, and that can be done through the granting of emergency powers that will help put an end to the practice in the past of using (and abusing) technicalities – such as the issuance of injunctions and temporary restraining orders mostly due to cases filed by losing bidders – to delay the implementation of critical projects, Tugade noted.

He gave his assurance the emergency powers would not be abused because the DOTr would practice transparency and accountability, and would also be compliant with “Freedom of Information.” Besides which, the emergency powers would be limited to two years and would still be subject to oversight from both houses of Congress, he said.

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ALSO FROM PHILSTAR BUSINESS

The best presidential offense AS EASY AS ABC By Atty. Alex B. Cabrera (The Philippine Star) | Updated September 25, 2016 - 12:00am 1 175 googleplus0 0


By Atty. Alex B. Cabrera

Talking to soldiers at a military camp in Compostela Valley, he said that in a democracy, people elect a president, and that was how he became president. “But you and me, we are just the same. We are both workers, working in government. Maybe I am your supervisor, but we are just the same. We’re both workers.” The soldiers were disarmed with his humility.

He then asked the soldiers to study profiles of terrorists, as he taught them that terrorists love to wear caps, sometimes wigs; and their eyes are wiggly and couldn’t stop moving. The soldiers saw a president-mentor – the first in a very long time.

Then he said that his priority is to give the soldiers body protection (bulletproof vests), and intelligence officers will get thinner vests to be less obvious.


PROMISES TO MILITARY. President Duterte visits the 10th Infantry Division in Mawab, Compostela Valley PHOTO FROM RAPPLER.COM

He announced that he placed orders for 120,000 units of .45 caliber pistol – as he intended to give one to each soldier – this elicited appreciative applause from the men. He has empathy and knows what the soldiers really need.

In the same live telecast, he showed a folder, about half the thickness of a telephone directory, bearing names that include narco politicians. He told the soldiers, “When you make the arrest, and they resist, shoot them.” And apparently in jest (?), he said, “If they do not resist, shoot them anyway so that we can get them over and done with.”

He promised a good prize, like a house and a lot (that he will try to solicit from wealthy friends), to each soldier who can show him a medal of valor. And he assured them that no one will go to jail except him, if necessary, for their sake. He said that he who does his job does not commit a crime.

After his speech, the soldiers swarmed around him for picture-taking, like excited children. The above scene I just related, along with the impending “doubling” of salaries of military personnel, explains to all of us why today is the best time to be a Philippine soldier.

It is however the worst time to be secretary of foreign affairs. Precious time that should be spent bridging the gaps in relationships is now spent on damage control that’s gone overdrive. The flip-flops coming from impulsive outbursts and softening of stance after, unduly give an appearance of unpredictability to a country that is actually politically and economically stable. The truth is, even if the Philippines is dubbed as the next tiger of Asia, it is still a cub. Cubs can still be slaughtered by grown-up cats. And even when the cub matures, it needs to learn how to hunt in packs and belong to that community of cats to survive.

It is an understatement to say the world is interconnected. I would say the world is intertwined, not only economically, but emotionally. People learn and get offended in real time of things not necessarily happening in their own country.

There is a timeless mantra in criminal justice system that “it is better to let 10 guilty men go free than wrongfully convict an innocent one”. It even bears more weight to say that it is better not to pull the trigger on 10 suspects than to shoot by mistake an innocent individual. Because that innocent one can be anyone of us, or anyone we care for, at any place, at any time, in any circumstance that’s least expected. The ugly phrase “collateral damage” can only be acceptable for property damage, never for priceless human lives. That is why the US, the UN and the EU parliament’s sentiments are not out of line.

Some things can adjust, but certain things will not change with our President, like his war on drugs.

So instead of defending himself from attacks on his program, he should employ offense as the best defense. I mean, he should implement and promote the other parts of his politics of change. Go back to opening up the economy by amending the constitution to allow Filipinos access to better service, harness private sector strength through public-private partnerships and turn around the approval and implementation of those infrastructure projects, and pay attention to digital infrastructure as well.

Insist on the ROI of the more than P2 billion APEC Summit investment that was spent last year to invite investments here and improve trade and relations of the Philippines with the world. Rid the judicial system of corruption rather than deny people their day in court.

Go back to remembering the idea of a government for the people and an economic progress that brings inclusive growth. We are still moved by the determined campaign for genuine change by a president whose best asset is not statesmanship but sincerity and selflessness. But let not the campaign for change be through the politics of fear and death. Let bravery challenge the institutions of deceptions and lies, but let change usher in through the politics of hope – and life.

* * *

Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the Educated Marginalized Entrepreneurs Resource Generation (EMERGE) program of the Management Association of the Philippines (MAP). Email your comments and questions to aseasyasABC@ph.pwc.com . This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.


Chief News Editor: Sol Jose Vanzi

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