‘Foreign SWFs may own shares in public utilities’
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OREIGN Sovereign Wealth Funds (SWFs) can collectively invest a maximum of 30 percent in Philippine companies engaged in the operation of public utilities and critical infrastructure such as telecommunications, according to the newly released Implementing Rules and Regulations (IRR) of the Public Service Act (PSA). On Monday, the National Economic and Development Authority (NEDA) released the amendments of the IRR of the PSA in a bid to provide safeguard provisions to
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protect the country against national security concerns that may arise through any proposed merger or acquisition, or any investment in a public service. Section 44 states that foreign governments or foreign state-owned enterprises; entities controlled by foreign government or foreign stateowned enterprises; and an entity acting on behalf of a foreign government or state enterprise are prohibited from making any investment or owning capital in a public service or critical infrastructure.
“Sovereign wealth funds [SWF] and independent pension funds of each state may collectively own up to thirty percent [30 percent] of the capital of such a public utility entity or public service entity classified as critical infrastructure,” Section 44d of the IRR stated. “ T he cumu lative investment of such funds in the public service classified as a public utility or critical infrastructure, regardless of source of fund, shall not exceed thirty percent [30 percent] capital investment,” it added.
Further, Section 45 of the IRR provides that no foreign national can own more than 50 percent of the capital of entities engaged in the operation and management of public services in the Philippines. However, if an investment leads to a foreign national owning more than 50 percent of the capital stock of the public service, the country of the foreign national “accords reciprocity to Philippine nationals as provided under the Act and these Rules.” See “Foreign,” A2
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, March 21, 2023 Vol. 18 No. 157
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NEDA: LAND USE ACT KEY TO INFRA DEVELOPMENT
IMMIGRATION WOES Airport passengers crowd the immigration area at Terminal 1 of the Ninoy Aquino International Airport in Pasay City, Monday, March 20, 2023. The Bureau of Immigration apologized for the lengthy screening process at the immigration counters, as the government ramps up efforts to combat human trafficking in the country. It can be recalled that in November 2022, the Senate panel that broke the “pastillas” scam among corrupt immigration officers has exposed another nefarious operation, this time enabling the human trafficking of Filipino jobseekers within the Asean region, only to fall prey to Chinese syndicates that brutalize them. NONIE REYES
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By Cai U. Ordinario
@caiordinario
EGISLATING the Comprehensive Infrastructure Development Master Plan, a 50-year infrastructure master plan, is needed to boost the country’s growth and development to better guide the projects and programs of succeeding administrations. In his opening statement at the public hearing of the Senate Committee on Economic Affairs on Monday, Senator Joseph Victor G. Ejercito said a master plan, which will be “the plan of all plans,” will also allow the country to catch up with its neighbors. However, the National Economic and Development Authority (Neda) said that while it supports this proposal, there is the matter of passing a land use act that could better facilitate the implementation of infrastructure projects. “Kung may maiguguhit po tayo na maayos na blueprint na pinagtutulungan ng ating mga eksperto, matitiyak po natin na magpalit man ang pangulo o administrasyon ay may iisang plano na tayo susundan, maiba man ang engineer, foreman o karpintero ay may pangkalahatang gabay na pagbubuo ng mga pangarap,” Ejercito said.
“Probably, this is a result of our political system as well. Yung threeyear term and six-year term, with the term limit, most of our public officials, even Presidents, I would say, are only concentrated on the short and medium term. Yun ang pagkukulang natin, yung long-term planning,” he added. During the hearing, Neda Assistant Secretary Jonathan L. Uy said implementing projects whether at the national or regional level depend on the local land use plans. The proposed National Land Use Act has been languishing in Congress for over 30 years. “ The important thing, Mr. Chair, that we’d like to factor in what is discussed so far is essentially that a lot of the national master plans and regional master plans will depend on local land use and development plans.
MEDALLA: PHL CAN WITHSTAND SHOCKS FROM BANKING CRISIS
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HE Bangko Sentral ng Pilipinas (BSP) said the Philippine banking system and the entire economy can withstand the impact of the blight that has recently engulfed some foreign banks. BSP Governor Felipe M. Medalla told reporters on Monday that recent developments such as the collapse of some banks in the United States as well as the recent acquisition of Credit Suisse Group (CSG) AG by UBS Group AG through a “government-brokered deal” will not have an impact on the global economy, including the Philippines. Medalla also assured that the BSP will closely monitor these developments as well as “assess their impact on the banking system and respond accordingly.” “This means CSG is too big to fail. It does not look like that other Globally Systemically Important Banks [GSIBs] have the same problem, in which case the impact on the global economy— and therefore the Philippines— will not be significant,” Medalla said via Viber. In a note, the BSP chief assured the President that the banking sector can “withstand
possible shocks” that could emanate from the collapse of Silicon Valley Bank (SVB) and Signature Bank. Medalla also said losses of Philippine banks from rising interest rates are smaller relative to their counterparts in the United States. He noted that the interest rate hikes of the US Federal Reserve were larger. The US Fed has already raised key policy interest rates by 450 basis points (bps). The BSP Overnight Reverse Repurchase Rate is currently at 6 percent from 2 percent on May 19, 2022, or 400 bps rate hike over the same policy horizon. Further, Medalla said, the Philippine “yield curve did not invert similar to the US yield curve.” The US Treasury yield curve, BSP noted, continued to be inverted with 2-year and 10year US Treasury notes posting rates of 4.14 and 3.56 percent, respectively, as of March 16. The secondary market government security (GS) yields for the two-year and 10-year tenors, the BSP said, stood at 5.89 and 6.23 percent, respectively, as of March 17.
Flagship projects to bolster physical connectivity—DOF
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OST of t he f l agship projects that the gover n ment i ntend s to undertake are aimed at improving physical connectivity and the management of water resources, according to Finance Secretary Benjamin Diokno. Diokno presented the government’s infrastructure plan on Monday in a forum organized by
the Foreign Correspondents Association of the Philippines. The Infrastructure Flagship Project (IFP) list was recently approved by the National Economic and Development Authority (NEDA) Board. “The list also includes projects on health, energy and agriculture infrastructure,” he added. See “Flagship,” A12
See “Medalla,” A2
See “Neda,” A2
PESO EXCHANGE RATES n US 54.6780 n JAPAN 0.4148 n UK 66.7454 n HK 6.9665 n CHINA 7.9378 n SINGAPORE 40.7771 n AUSTRALIA 36.7163 n EU 58.4398 n KOREA 0.0418 n SAUDI ARABIA 14.5575 Source: BSP (March 20, 2023)