Monday, September 05, 2005

GOCCs Ultimatum

DOF whips GOCCs into shape
Michelle V. Remo
Inquirer News Service

THE DEPARTMENT of Finance is set to come out with performance contracts that will force heavily losing government-owned and -controlled corporations (GOOCs) to shape up.

Failure to comply with the contracts would mean dissolution or privatization for the GOCCs, the DOF said.

Finance Secretary Margarito "Gary" Teves said the DOF was looking at implementing the performance contracts for 2006.

He is hoping that the contracts will result in a marked improvement in the financial standing of the state-owned firms, especially the distressed ones.

Teves said GOCCs would be classified into three types depending on their mandates: profit-oriented, cost-centered, and service centered state-owned companies. Their classification will determine the type of contract they will have to observe.

He said the GOCCs, established for the purpose of generating revenues for the government, would be assessed based on the profit they earned, while the rest would be evaluated based on the fulfillment of their mandates.

"We [DOF and concerned GOCCs] have to mutually agree on the objectives," Teves told reporters. "If they don't perform according to the contracts, then they could be phased out or sold."

The finance chief said the DOF would initially come up with contracts for the 14 monitored GOCCs.

These are National Power Corp., National Electrification Administration, Local Water Utilities Administration, Metropolitan Waterworks and Sewerage System, Home Guarantee Corp., National Housing Authority, Light Rail Transit Authority, Philippine National Oil Co., National Irrigation Administration, National Development Co., Philippine Ports Authority, Philippine Economic Zone Authority, Philippine National Railways and National Food Authority.

For this year, the 14 monitored GOCCs are expected to post a combined budget deficit of P42.5 billion this year. Although still a deficit, the figure is already a significant improvement from the actual budget gap of P90.7 billion recorded in 2004.

The DOF earlier said the expected improvement in the fiscal standing of the state-owned firms was due to the sale of some of the assets of Napocor, which accounted for the bulk of the combined deficits last year. The DOF likewise cited this year the relatively lower interest rate, which served to trim down the cost of debt servicing by the GOCCs.

At present, the GOCCs are being reviewed for possible rationalization of their organizational setup.

Officials from the DOF and the Department of Budget and Management met last week to continue discussing the rationalization plan.

The rationalization plan is in accordance with the issuance of Executive Order No. 366.

Carabao Milk

PCCI pushes increased carabao milk production
Ronnel W. Domingo
Inquirer News Service

THE COUNTRY'S biggest business group is pushing for the increased production of carabao milk to help reduce the country's dependence on imported dairy products.

Donald G. Dee, president of the Philippine Chamber of Commerce and Industry, said the group was looking at successful milk production campaigns in India, Pakistan and China that can be replicated in the country.

"The continued rise of our import bill against export earnings is expected considering the minimal resources government has in promoting export businesses," Dee said.

"We must increase our exports to or step up production of items that take up significant parts of imports such as dairy products," he said.

The PCCI chief said some P497 million worth of milk was shipped in from abroad in 2004.

Government data show that in the past decade, imports of fresh milk was growing at a rate of 28 percent a year while domestic production was generally declining, although there was growth of up to 6 percent yearly in certain years.

Dee said the private sector was also pushing for the establishment of a body that would facilitate lending to small and medium businesses by maximizing a lending fund that has grown to P5.5 billion.

He said the government has shown that there were ample supply of funds for small businesses but that the problem was how to make it easy for entrepreneurs to secure loans.

Dee said efforts were under way to put up a Micro, Small and Medium Enterprises Surety Fund with an initial P1 billion from the World Bank's Industrial Guarantee and Loan Fund.

He said the government, through the IGLF, could work with a public sector-initiated SME Development Center, which would manage the P1-billion MSME Surety Fund.

"The objective is to increase availability and effectiveness of risk capital to SMEs," he said. "The fund will provide guarantee for SMEs with little or no collateral but have strong cash flows."

According to the Institute for Development and Econometric Analysis Inc., an Asian Development Bank study made in 2003 showed that the biggest constraint in existing lending programs for SMEs was that loan decisions depended on collateral such as land.

Cayetano Paderanga, who heads IDEA Inc., added that other past studies suggest that SMEs could not avail of available funds because loan requirements were too difficult to comply with.

"With the MSME Surety Fund, we can make it easy for prospective milk producers to secure loans for buying carabaos that are bred to yield more milk than the average cattle," Dee said.

Price War

Price war shifts to overseas call rates
Clarissa S. Batino
Inquirer News Service

LOCAL telecom giants are bringing the price war to a higher level-their overseas call rates.

Philippine Long Distance Telephone Co. said it would offer an international long distance rate of as low as 10 US cents a minute to all its DSL subscribers starting Sept. 15. This would be equivalent to about P5.60 a minute at current exchange rates.

But Globe Telecom Inc. and its wholly owned subsidiary Innove Communications Inc. said they could bring down their IDD rates to as low as 5 US cents a minute after they secured the approval of the National Telecommunications Commission last week.

The standard IDD rate is 40 US cents a minute. Globe had cut its overseas call rate to 20 US cents a minute starting on the fifth minute under its ongoing promo. Sun Cellular is offering a similar 20 US cents-a-minute deal.

Butch Jimenez, head of PLDT's retail division, said the public should expect more price and product innovations from PLDT. "We intend to remain the leading player in the telecom industry by offering innovative service packages whenever new technology arises."

Not to be outdone, Globe assistant vice president Froilan Castelo said the recent NTC approval would allow his company to charge an even lower rate than what the competitors were offering.

"The NTC now allows us to charge as low as 5 US cents a minute on IDD. This will benefit our customers as we intend to give them more value for their money," Castelo said.

"We want to give our DSL subscribers better value for their money by offering attractive IDD rates," Jimenez said. Short for Digital Subscriber Line, DSL is PLDT's brand for its high-speed Internet product, which is now being used by about 70,000 customers.

Dubbed as PLDT ID-DSL, the new deal allows all DSL subscribers to avail themselves of IDD rates for as low as 10 US cents a minute.

Subscribers, however, have to pay a service fee of P50 a month. Starting Sept. 12, PLDT will also start charging P20 a month for those who would avail themselves of the P10 per local call promo.

DSL subscribers with Plans 2500 and up will enjoy a rate of 10 US cents a minute while subscribers with Plans 1995 and below will enjoy a rate of 15 US cents a minute.

Jimenez said the rates would be 62 to 75 percent cheaper against the 40 US cents a minute.

To offset any negative impact on its overseas revenues, Jimenez said PLDT would aggressively pursue DSL connections and upgrades.

"These new IDD rates bundled with our DSL subscriptions will drive more people to hook up to our broadband service. Also, we see some of those in Plan 1995 and below upgrading their plan to 2500 and above," he said.

DSL subscribers who want an even lower rate than 10 US cents can get PLDT's VoicePad service. This is a PC-to-phone service where DSL subscribers just need to log on to the PLDT myPad website and use the soft dialer from that site to call overseas for as low as 8 US cents a minute.

Tough competition had been bringing down telecom prices, according to NTC Chair Ronald Solis, saying these innovative deals were benefiting consumers.

Sun Cellular, which set off a price war in October 2004 when it launched its unlimited, within-network 24/7 pricing, started offering its Daylite Call and Text Unlimited.

With the new deal, Sun Cellular will charge a peso for every minute of within-network calls from 6 p.m. to a minute before midnight. But from midnight to a minute before 6 a.m., calls within Sun Cellular network will remain unlimited. Within-network text messaging will remain free all day long. Sun's 24/7 promo remains in effect even with these new offerings.

Globe is offering a new Celebrate promo that charges only P10 for every three-minute call and P15 for unlimited texting for 24 hours. Globe's nonstop, within-network text promo is also available for P25 for two days and P50 for five days.

PLDT had confined its P10-a-call promo strictly within the PLDT fixed-line network of 2.1 million subscribers.

CAP Takeover

SEC's plans for CAP put on hold
Elizabeth L. Sanchez
Inquirer News Service

THE CREATION of a management committee that will take over the troubled pre-need firm College Assurance Plan Philippines Inc. may be put on hold after the company filed for rehabilitation with a local court last week.

An official of the Securities and Exchange Commission said however that CAP's rehabilitation plan would not prevent the SEC from exercising its regulatory powers such as imposing sanctions on the company for perceived violations.

CAP earlier told the Makati Regional Trial Court that there was a need for the immediate suspension of payment of all claims against the company.

CAP officials explained that they decided to go to court to keep its business going. They said that this was the only way they could discharge their obligations to their plan holders.

CAP officials also said that they were forced to make the legal turn when the SEC threat to take over management became imminent.

CAP officials are afraid that the takeover will lead to the liquidation of the pre-need firm.

"In deference to the proceedings in court, we may [hold off] the appointment of a management committee," SEC commission secretary Gerard Lukban said. "Any effort on our part may be rendered academic."

Lukban explained that once a company filed for rehabilitation, the court would usually appoint a receiver to implement the rehabilitation plan.

"The receiver is also appointed to safeguard the assets ... of creditors or, in this case, the plan holders," Lukban said. "This is the same goal we want to achieve if and when we create a management committee."

CAP has admitted that it will be unable to service its debts falling due. CAP also said that it has more liabilities than assets.

CAP has proposed under an eight-year business development plan to build up its capital to P8.36 billion, and its trust fund to P14.36 billion.

United Against Glo

The Long View : Unity is the only choice

Manuel L. Quezon III
Inquirer News Service

TO DIVIDE, and thus conquer: that is the objective of the administration. To unite, and thus be impregnable: that is the challenge of the times.

A broad coalition of forces is heeding that challenge. The coalition was symbolized by Cory Aquino and Susan Roces' coming together in prayer last Friday night. It has a name: "Bukluran para sa Katotohanan." Its statement of principles will be released today.

Does the broad coalition represent only opportunism, desperation and naked ambition? To reflect on this question is to miss the essential point. This isn't about those arrayed against the President. This is about the President. The President showed cunning when she dared anyone who is without sin to cast the first stone, as Jesus did to the people who were about to stone to death a woman accused of adultery.

What the President forgot is that she is not the Christ. She is in the position of the woman accused of adultery. The closest that we can come to a stand-in for Christ is not the president of a secular state, but the Catholic bishops who said, "if she is accused of adultery, let the charges be investigated." They did not say, "No, she did not commit adultery," or "No, we are morally convinced no adultery took place." They said: "There are too many disturbing details in the allegations, and so some sort of human justice must take its course."

What did the country get? No form of human justice. No truth commission, and quite possibly, no impeachment. What it got, instead, is the woman accused of adultery proclaiming that all are adulterers, which is beside the point.

You would think she never went to school. In school, you can break the rules many times, even cheat many times, but once you get caught, it is irrelevant if the entire class broke the rules with you, or cheated with you, because you're the one who has been caught. You're the one who gets punished. As it is for being caught cutting class, or copying notes, so it is for adultery and any conceivable sin-including the sins that are in a class of their own, because only presidents can commit them.

It boggles the mind that someone accused of committing adultery against the nation-for after all, a president, some say, is wedded to the country-should now be proclaiming that everyone is an adulterer, and even suggesting that adultery be decriminalized. The price of adultery is supposed to be an annulment or divorce. It is not supposed to result in a coronation, much less the transformation of the state into a world-class bordello, which is what the move to institute Charter change is meant to do. But to do so is to be unfair to whores; it reduces all politics to the level of prostitution, where it may be now, but where it ought not to remain. Furthermore, to do so makes certain that politics never rises above the level of whoring, without taking into account that the ones agitating for the prostitutes' rights are not the prostitutes themselves but the pimps. For even if you say that the people are a bunch of whores, what has driven them and keeps them in prostitution? The pimps. It is the pimps who make a whore out of the public for the pleasure of vested interests.

This whole political crisis is about change and a fundamental reality about our society (which thrives on open secrets, but which reserves a curious kind of fury for those caught doing what everyone knew they were doing all along). Is it unfair? The President thinks so; but it is very Filipino.

We all have dirty linen, and no one wants them exposed. But once exposed, they must be washed, and some sort of redemption must be achieved. The religious-minded can reflect on the fact that Jesus kept company with tax collectors and prostitutes, but he was the Christ and his objective was to show no one was beyond redemption. In a political crisis, such as the one taking place, the President has refused to acknowledge culpability and defied every attempt to clear her name. Her supporters say, it is because those prosecuting her are as dirty as she is, or that their objective is not to clear the President's name but to topple her from power.

They forget that it requires neither sainthood nor good character or intentions to be a prosecutor and pursue a prosecution. There are accusations of sanctimoniousness and false piety all around, to be sure. But who, in our government, is expected to be the exemplar of secular virtues, or at the very least, the kind of leadership unafraid to be challenged? Who, of our leaders, must be imbued with a firm and unflinching faith and confidence in the people? Only the President of the Philippines has that burden and responsibility.

The President not only confuses herself with Christ; she thinks she is living in biblical times. The President's supporters see red flags, the faces of disreputable politicians, the lack of teeth in the ranks of the protesting poor, the inability of the clergy to undertake a crusade, the defection of some of the President's own people, and see a motley group of the disgruntled. They should see, instead, a grave crisis in the legitimacy of the President and in the society she exemplifies. She was given so much, and did so little; she could have led so well, instead she leads so badly; she could have given the country hope, but she had so little faith in her people and herself that she has done, and is doing, things that have brought her to the level of the worst of our past leaders. She continues to fatally divide her people. As Oliver Cromwell said to the Long Parliament, "You have sat too long for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go!"