banking finance

GSIS bent on selling Manila North Harbor property

July 1, 2019

The Government Service Insurance System (GSIS) has reiterated its plan to sell its 672,645-square meter property at the Manila North Harbor, which the International Container Terminal Services, Inc. (ICTSI) is currently occupying.      “As a government entity that exists to ensure the integrity of the funds of its members, GSIS is determined to sell it through public bidding upon the approval of the Board,” GSIS President and General Manager (PGM) Jesus Clint Aranas said.      According to him, the market value of the property is approximately Php33.632 billion based on the zonal valuation as of 9 May 2019 and as reflected in the GSIS books as of 20 May 2019.      Enrique Razon, president and chairman of ICTSI, reportedly said earlier that GSIS has only a “naked title” with no right to use the property.      “That does not preclude GSIS from disposing of the property,” Aranas asserted.      Meanwhile, the Philippine Ports Authority (PPA) has committed to donate a five-hectare resettlement site under a memorandum of understanding (MOU) with the National Housing Authority (NHA), LGU Manila, ICTSI, and Manila North Harbor Port, Inc. However, the ocular inspection report of NHA reveals that the proposed relocation site infringes on another GSIS property occupied by informal settlers and allocated for socialized housing pursuant to E.O. 108, series of 2002 with an area of 1.2 hectares of which belongs to GSIS.      For its part, GSIS emphasized that “no entity can commit, offer, or convey any property which it does not own.”      GSIS was never consulted and neither did it approve or consent to such donation or commitment on the overlapping portion which is registered and owned by GSIS.      GSIS likewise demanded that the MOU be rescinded, modified, or revised to exclude the overlapping portion of GSIS-owned property from the five hectares that is committed by PPA under the MOU.      The PPA (under its present General Manager Jay Daniel Santiago) and through its Legal Department, in a reply to GSIS’s demand to PPA to rescind, modify, or revise the MOU last 4 March 2019, did not directly address GSIS’s demand but instead questioned the validity of the 43-year-old title and asserted that PPA owns the North Harbor Property, despite the property being registered under the name of GSIS.      PGM Aranas cited, however, the Office of the Government Corporate Counsel, which ruled in 2015 that the validity of the title registered under the name of GSIS may only be questioned in a direct attack filed before a regular court.      Meanwhile, GSIS has invited ICTSI to discuss the use and rental of the disputed property.  But ICTSI referred GSIS’s letter to PPA and deemed that “it may not be useful to sit down with GSIS without the participation of PPA.”      As to the issue of the overlapping GSIS property under the MOU, despite efforts to obtain a certified true copy of the proposed MOU and the 26 February 2019 Minutes of the Congressional Hearing and signing ceremony of the MOU, GSIS has not received such copy to this day.      PPA has also begged off from attending a meeting called by the Inter-Agency Committee for the Disposition of the Parola Estate and instead requested the Committee that a separate meeting be scheduled with PPA, NHA, LGU Manila, and the Housing and Urban Development Coordinating Council (HUDCC) only to discuss the MOU, without any mention of GSIS.       The GSIS was also informed by the Inter-Agency Committee that it will now be excluded from subsequent committee meetings since the Inter-Agency Committee no longer has jurisdiction over the disposition of lands owned by GSIS and other Government-Owned and -Controlled Corporations (GOCCs) citing Section 5 II (d) of R.A. 11201 (Department of Human Settlements and Urban Development Act).       Notwithstanding, PGM Aranas maintains that the state pension fund will take appropriate legal measures to protect the interest of GSIS and its members.

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Inflation seen to settle back to target levels

June 7, 2019

THE Philippines’ inflation rate is expected to return to its deceleration mode in the coming months after an uptick to 3.2 percent last May from only three percent last April.  In a report, Michael L. Ricafort, Rizal Commercial Banking Corporation (RCBC) Economics & Industry Research Division head, attributed the rise of domestic inflation rate to the impact of a weaker peso on imports in the early part of May, higher global oil prices and the dry season, which affected some agricultural products and the operations of hydropower plants. “However, these were offset/mitigated by increased rice imports with the Rice Tariffication Law and other non-monetary measures to increase food/rice supply to lower prices and better manage inflation since the latter part of 2018,” he said. Ricafort expects the resumption of slowdown of inflation rates in the coming months, with the decline forecast to be faster due to elevated inflation rate last year. He said that a one-percent level inflation rate in the third quarter or early fourth quarter is even possible. Last year, inflation peaked at 6.7 percent in September and October. Ricafort said adequate rice supply due to larger imports and higher harvest during the summer is expected to further ease inflation rate in the coming months since rice accounts for around 10 percent of the inflation index. “Further easing in local monetary policy by way of another cut in policy rates remains possible as early as the next rate-setting meeting in June 20, 2019 (or in subsequent months),” he said. He added that possible reduction in the Federal Reserve’s key rates this year is also a plus on the BSP policy rates. Also, ANZ Research forecasts average inflation in the Philippines this 2019 to be at the mid-point of the government’s two to four percent target band despite the marginal uptick last May. The economic research firm traced the higher inflation rate last month partly to the El Niño but pointed out that “weaker demand pressures and a high base effect will likely keep annual inflation in check.” “As such, we continue to expect headline inflation around the mid-point of the target band,” it said but added that “impact of the El Niño poses a key risk to the inflation outlook." Relatively, ING Bank Manila senior economist Nicholas Mapa said food inflation will be a key factor in the country’ headline inflation for the remainder of the year, but believes the final numbers will still remain within government's target. He added that this development will be closely monitored by the BSP vis-à-vis their decisions on the policy rates. (PNA)

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BSP forecasts May inflation at 2.8%-3.6%

June 5, 2019

HIGHER jeepney fare in the Visayas, as well as upticks on selected food items are seen as risks to the May inflation, which the Bangko Sentral ng Pilipinas (BSP) projected to stay between 2.8 percent and 3.6 percent. “Positive base effects” may also contribute to the “temporary price pressures” in the fifth month of the year, the central bank said in a statement released Friday. This as the rate of price increases continues to decline after peaking at 6.7 percent in September and October last year. Domestic inflation rate in May 2018 rose to 4.5 percent from 4.3 percent in the previous month. Average inflation last year exceeded the government’s 2 percent to 4 percent target band from 2018 to 2020 after it hit 5.2 percent. Amid the upside risks seen for the month, the BSP said lower prices of rice and domestic oil, along with the cut in power rates, are seen to counter price pressures. “Looking ahead, the BSP will continue to be watchful of evolving price trends to ensure that the monetary policy stance remains consistent with remaining price stability,” it said. The continued deceleration of inflation has led the BSP’s policy-making Monetary Board to slash the central bank’s key policy rates by 25 basis points early last month and analysts project more cuts in the coming months as inflation is seen to continue its downtrend. (PNA)

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