Government News Analysis

And here’s the good news …

Good news for the Philippines

Anti-Duterte media hate to be the bearers of good news. They feel compelled to present a negative view of the Philippines – self-censoring, or at best down playing, anything good that’s happening in the country. The Volatilian™ has no such qualms. Here we bring you up to date with a few positive things that took place during the month of September.

1 September: Drug rehab centre for Central Luzon. Presidential spokesman, Ernesto Abella, announced that China has started work on the construction of a drug-rehab centre believed to be at Fort Ramon Magsaysay, Palayan, Nueva Ecija province – the country’s largest military base and one of the main training centres for the Philippine Army. Rehabilitation of addicts is part of Phase 2 of the government’s war on drugs.

4 September: Stranded OFWs brought home.118 Filipino Overseas Foreign Workers (OFWs) were repatriated from Saudi Arabia where they had been stranded in a camp in the capital, Riyadh, thanks to the ongoing efforts of the Department of Social Welfare and Development. They were among thousands of migrant oil and construction workers who were left high and dry by Saudi companies following the country’s economic slump. In the first half of this year OFWs had remitted a record US$13.2 billion to the Philippines.

5 September: Shabu street price soars. President Duterte’s anti-drugs campaign is hitting the shabu (crystal meth) business hard. The street price of the drug is soaring. In northeastern Luzon’s Cagayan Valley (Region II) the price per gram has risen by 25%; from PHP4,000 to PHP5,000. Following actions by the Philippine Drug Enforcement Agency and the Philippine National Police (PNP), illegal-drug operators there are finding it increasingly difficult to penetrate the market. They’re also running out of salesman; Region II has received 18,272 people surrendering – thousands of which were formerly employed in distribution.

6 September: Business leaders pledge cash for rehabs. Millions of dollars have been pledged by the Philippines’ private sector to build addition rehab centres around the country. A group of 13 business leaders are now working out plans with the Department of the Interior and Local Government to deliver the new facilities which will be part of an integrated nationwide comprehensive drug-rehabilitation programme.

Emergency gets weighty support. President Duterte’s declaration of a “state of lawless violence” received overwhelming support from two former presidents, Gloria Macapagal-Arroyo and Joseph Estrada, as well as from leading business groups including the Management Association of the Philippines, the American Chamber of Commerce of the Philippines, and the Philippine Chamber of Commerce and Industry. The president issued the order following the bombing of a night market in Davao City on 2 September.

8 September: Western Visayas gets its first solar power plant. The Iloilo Solar Power Plant at Miagao, Iloilo, was opened. It will produce 8.5 megawatts (MWs) of electricity which eventually will be channeled to the national grid under a 25-year Department of Energy contract. Plant owners, Cosmo Solar Energy (CSE), has invested PHP745 million in the project. A second plant, which will supply the national grid with a further 6.5MWs, is being considered by CSE in the nearby town of San Joaquin.

10 September: More people in work. The jobless rate and that of people looking for better employment fell to an 11-year low, according to data supplied by the Philippine Statistics Authority (PSA). Releasing its 2016 Labor Force Survey, PSA showed that 94.6% of the work force (around 41 million people) was employed – the highest employment rate since 2011.

12 September: Solo plan for fisheries. A bill was filed in the Philippine Senate that would create a new stand-alone department for the fisheries sector. It seeks to establish a Department of Fisheries and Aquatic Resources with equal standing to the Department of Agriculture which presently it comes under as the Bureau of Fisheries and Aquatic Resources. Senate Agriculture chairman, Francis Pangilinan, believes that the new department would redress the present resourcing imbalance to the sector.

14 September: Free irrigation water for small rice farms. With cross-party support in Congress already secured, the standoff between the government and the National Irrigation Association (NIA) looks to be over. It was announced today that the NIA will get an increased budget next year to pay their staff without charging the farmers for the water services. Duterte is also pressing Congress for the farmers’ accumulated debt of PHP13 billion to be discharged.

16 September: Tax-reform package ready to go.  Finance Secretary, Carlos Dominguez, announced that he’s putting the final touches to a tax-reform package which will cut income tax to 10%. He estimates it will cost the Treasury around PHP1 billion in tax revenue but that will be money well spent in providing a simpler, more equitable and more efficient system. Higher domestic consumption is another possible benefit.

17 September: Year-long Abu Sayyaf hostage freed. Kjartan Sekkingstad, a Norwegian who had been held captive for a year by the Abu Sayyaf terror group, was liberated in Jolo, Sulu province. Armed Forces of the Philippines personnel working alongside negotiators from the Moro National Liberation Front secured his release. Norwegian Prime Minister, Erna Solberg, expressed his gratitude to President Duterte and presidential peace adviser, Jose Dureza, for their tireless efforts over the past year which have resulted in Sekkingstad’s safe homecoming. This story played big in Norway, but got fairly minor coverage elsewhere.

19 September:  Visa BPO centre opens in Pasay. Credit card company, Visa, opened its business outsource processing (BPO) centre in the Mall of Asia at Pasay City, Manila. One of just four Visa Consumer Support sites globally, the 6,300 square meter state-of-the-art facility will employ 570 staff. “I am proud we are investing in our people here in the Philippines and supporting the country’s growth,” said Chris Clark, Group Executive, Asia Pacific, Visa. More than 1.2 million people are employed in the Philippines BPO sector.

20 September: No go for mobile lottery plan. Troubled online gaming company, Philweb, had its proposed mobile-phone-based lottery platform knocked back by the government-controlled Philippine Amusement & Gaming Corporation (Pagcor). Last month, Pagcor ended online gaming licences, effectively closing down Philweb’s chain of 286 e-Games outlets.

21 September: Residents’ rescue role. Sixty-year-old filling-station owner, Martina Yee, who was abducted in an Abu Sayyaf raid in Sirawai, Zamboanga Del Norte on 19 September, was freed by a joint army and police task force acting on information from local residents. The rescue is being heralded as an example of sound collaboration between the Armed Forces of the Philippines and the Philippine National Police – and equally significantly, of the growing level of assistance of the local community in providing information about the whereabouts of armed gangs.

Manila-Madrid memorandum. The Philippines and Spain are to sign a memorandum of understanding to bolster economic and financial cooperation. This was agreed by Finance Secretary Carlos Dominguez and Spain’s Ambassador to the Philippines, Luis Antonio Calvo Castaño. Areas to be explored include agriculture, disaster-relief finance, energy, and water infrastructure. A specific interest for Spain, according to Castaño, is “in investing in the Philippines’ infrastructure buildup, particularly rail projects”. After China, Spain has the largest high-speed rail network in the world.

22 September: Another hostage freed. The Moro National Liberation Front (MNLF) continues to play a key role in successfully freeing hostages from the terrorist Abu Sayyaf Group (ASG). This latest release was of Indonesian national, Herman Bin Manggak, who had been seized off the coast of Sabah, Malaysia, on 3 August. MNLF is working in conjunction with the government’s Joint Task Force Sulu, Sulu’s local government and others. Meanwhile, 7,000 army troops are engaged in the Sulu region to end ASG’s reign of terror. This is the biggest force the Philippine Government has ever to be put in the field in this region.

PERA accreditation for BDO. The Philippines’ top lender, BDO Unibank, became the country’s first accredited administrator of the Personal Equity and Retirement Account (or, PERA), after successfully satisfying the qualification requirements of both the central bank and the Bureau of Internal Revenue.

26 September: Support for tax plan. The Government’s tax-reform plan is submitted to Congress. Lauded by the Management Association of the Philippines (MAP) as attractive to investors, it is the first of four fiscal initiatives that will amend the 18-years-old National Internal Revenue Code (Tax Reform Act of 1997). “[This] will help improve the ease of doing business and encourage more local and foreign investment,” the MAP stated in a press release.

The peso takes a hit. The Philippine peso hit its weakest level in seven years, closing at PHP48.25:US$1. According to Bangko Sentral ng Pilipinas Governor, Armando M. Tetangco Jr., the local currency was reflecting “the continuing uncertainty about the US Fed’s next policy action,” alluding to speculation that a rate hike by the Fed was imminent. He added that strong forex demand for fixing and corporate requirements had also helped to weaken the peso.

29 September: Stock market steady. The much-predicted slip, slide, downward spiral or crash of the Philippine stock market still hasn’t happened. Ninety one days into the new administration, it closed at 7714.86; just 81.39 down from where it was when President Duterte took office on 20 June. On 27 July it hit its highest level ever, closing at 8100.48 – a milestone nearly all of us missed in the business coverage.

30 September: Endorsement from Mobius. Emerging markets investment specialist, Mark Mobius, of Franklin Templeton Investments, one of the world’s biggest asset-management operations, is bullish about the Philippines future as an investment destination, despite concerns that continue to be expressed over President Duterte’s illegal-drugs war. At the Asia Pacific Equity and Venture Capital Summit in Singapore, he said: “At the end of the day, I think the impact of the improved law and order will be positive”.

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