Take Duterte’s warning seriously, Sotto tells telcos

Senate President Vicente Sotto III said that it is “possible” for the government to take over telecommunications companies (telcos) that fail to deliver quality service to the public.

“That is possible. The government can remove those franchises anytime with another law,” said Sotto, adding that local telcos “should seriously take up what the president said.”

Sotto stressed that Duterte’s remarks only concern Smart and Globe and are not intended for foreign investors.

With the law that “practically removed red tape already,” telcos should report violators of the law, and the government will “go after these people who are giving you a hard time,” he added.

Former top PLDT executive joins Dennis Uy’s DITO CME Holdings, Inc.

PLDT’s former top 2 executive Ernesto “Eric” Alberto, who previously served the firm as its Chief Revenue Officer, joined Davao-based businessman Dennis Uy’s DITO CME Holdings, Inc.

With nearly 20 years of experience in the telecommunications industry after his resignation from PLDT last year, Alberto now serves as the independent director of DITO CME. Alberto earlier said that Uy, whom he considers as a personal friend, had approached him about the position, according to a report by Inquirer.

DITO CME is linked to DITO Telecommunity, the country’s third major telco player partly owned by China. DITO has been experiencing delays which resulted in missing its technical audit last July 8. The company said that the National Telecommunications Commission (NTC) has given them a six-month extension for the audit until January 2021.

Filipinos’ trust in China goes bad under Duterte administration

A Social Weather Stations (SWS) survey conducted from July 3 to 6 shows that Filipinos’ trust in China fell from “poor” to “bad” with a net trust rating of -36. The latest figure is down by 9 points from its net trust rating of -27 in December 2019.

The latest trust figures for China are the lowest since the “bad” net trust rating of -37 seen in April 2016, a few months before Duterte assumed the presidency. SWS said the net trust in China had only been positive in nine out of the 53 times it surveyed this item since August 1994.

Its record low net trust rating was a “bad” -46 in September 2015.

The growing Philippines-China bilateral relationship contributed to the trust rating downfall as it is seen by many as a weak move of President Rodrigo Duterte’s government in issues against China linked to the West Philippine Sea and POGOs.

Meanwhile, Filipinos’ trust in the United States (US) and Australia remain in the positive range based on the survey.

Dennis Uy targets to secure P1 billion sales on share amid COVID-19

The gaming and hospitality business of Davao-based businessman Dennis Uy’s Udenna Corporation, the Philippine Resorts Group Holdings, Inc. is set to do a follow-on offering of up to 300 million shares priced at P1 to P2.50 per share.

The company disclosed that the said move is approved by its board of directors, and the shares will be carved out of the company’s unsubscribed portion of the corporation’s authorized capital stock.

In business terms, companies usually do follow-on offerings for various reasons including the need to raise capital to finance debt or to fund acquisitions.

Recent reports say that Uy’s DITO Telecommunity, the country’s third major telco player, lost two shareholders who withdrew their funds from the firm which currently faces setbacks after setbacks causing the delay in its commercial launch.

DITO Telecommunity is also required to pay a fine of P25.7 billion to the government after missing the July 8 deadline of its technical rollout.

More European countries ban Huawei from their 5G networks

More countries are now recognizing Huawei is a threat to data privacy through its use of 5G technology and are likely to ban the Chinese company, according to United States (US) National Security Advisor Robert O’Brien.

The Trump-led US government continues to attack the tech giant as US-China tensions proliferate over trade and maritime disputes.

The Netherlands, France, Italy, Germany, and the United Kingdom (UK) surprised many after announcing a ban against Huawei from their 5G networks.

“Each country is going to make their decisions for their own country, but I think there’s a growing recognition everywhere that Huawei is a problem,” O’Brien told journalists in Paris.

“Europe is awakening to the threat of China,” the US official continued, citing the Asian giant’s aggression toward Hong Kong and India in recent weeks as Western nations grapple with the COVID-19 pandemic.

Still, other European nations have only imposed limits on using Huawei equipment for 5G or declined to do so to avoid conflict with a major economic power.

Washington believes Huawei equipment could give Chinese authorities a back door into networks that would allow it not only to spy on government secrets but also to rake in vast amounts of personal data.

China starts to collect taxes on Chinese citizens living abroad

China has started collecting taxes from its residents living abroad, surprising those who were not required to pay levies back home on abroad pay.

State-owned enterprises (SOEs) in Hong Kong, which enjoy one of the most minimal expense rates on the planet, advised mainland Chinese expatriates as of late to declare their 2019 salary so they can pay charges at home.

China, which charges assessments of as high as 45 percent, changed its annual duty rules in January last year to begin collecting money from its citizens around the world, similar to what the United States (US) mandates to Americans living abroad.

Beijing just revealed the guidelines this year with the most proficient method to record expenses, getting numerous expatriates level footed.

The move flags the start of what could be a significant purge for one of the biggest ex-pat communities on the planet. Chinese state media revealed that there are around 60 million ethnic Chinese living abroad.

The South China Morning Post (SCMP) also reported that there are 80,000 to 150,000 mainland Chinese working in Hong Kong. Chinese citizens working in Macau have likewise been advised to begin paying personal charges back home, as per the Nikkei Asian Review.

Chinese Internet giant Tencent conned by Chinese scammers

An irony of a sort, but this is true.

Internet giant Tencent has filed a lawsuit against Chinese chili sauce company Lao Gan Ma (老干妈) over unpaid advertisement fees, freezing its 16.24 million Chinese yuan ($2.3 million) assets.

Tencent said that it had signed a promotional agreement with Lao Gan Ma worth tens of millions of yuan in March 2019. The Chinese Internet company fulfilled its end of the bargain but yet to receive any compensation for its efforts.

But, as it turned out, Lao Gan Ma declared that it didn’t sign any deal with Tencent and they’ve already reported the matter to the police.

Police in Guiyang, Guizhou province announced that they arrested three people for forging Lao Gan Ma’s seal, posing as market managers for the company and inking a contract with Tencent.

According to police, the scammers were after online game package codes that Tencent gave away while promoting Lao Gan Ma during its annual mobile game tournament. They then turned around and resold these codes online for a profit.

Based on a traditional chili sauce recipe from Guizhou province, the Lao Gan Ma was established in 1996 by Tao Huabi when she was 50 years old. Her face now adorns the label of the celebrated sauce which occupies more than 65% of the market in China and exports to over 30 countries around the world.

A peek into the expanding assets and debts of Udenna Corporation and DITO Telecommunity’s Dennis Uy

DITO Telecommunity, the country’s third telco player, is far from meeting its commitment of bringing 27Mbps of Internet speeds to the Philippines through 1,600 cell towers. Days before its supposed technical deadline on July 8, the firm under Davao-based businessman Dennis Uy’s Udenna Corporation has only set up 300 operational cell towers.

Apart from the major setbacks that challenges DITO Telecommunity, based on reports, Uy is also facing growing debts due to his buying spree of companies in the country. In an article published on Rappler dated January 2019, a finance expert said that Uy is “spreading himself too thin,” and that a look at the earnings of the companies compared to liabilities is enough proof of Uy’s “very weak balance sheet.”

Based on the same report, Uy has 47 firms under his belt encompassing various essential industries in the country, 36 of which he bought through bank loans after President Rodrigo Duterte was elected.

Uy, who’s known to be an ally and a close friend of Duterte donated P30 million to the latter’s presidential campaign, making him one of the largest donors to support the then Davao mayor’s candidacy. The businessman’s connection to the president surely has an impact on why banks continue to lend him loads of money, according to bank experts.

“It’s a gray area, and banks are betting on Uy. It helps that he’s close with Duterte. But if loans go any further and the balance sheet keeps on tilting, banks may lose trust,” an anonymous banker told Rappler.

Among Uy’s biggest lenders include the BDO Unibank, Philippine National Bank, and Bank of China-Cayman branch.

In 2017, Uy’s Udenna recorded a 200% increase on its year-on-year debts, with its interest bearing loan reaching P85.8 billion. In the same year, Uy jotted his most expensive transaction for 2017 amounting to P34.1 billion which was utilized for the acquisition of shares in Global Gateway Development Corporation which supervises the 177-hectare of Clark Freeport Zone. Uy’s buying spree has resulted in P70.1 billion spending, a figure that’s 606.9% up on its year-on-year.

These numbers are expected to skyrocket even more, especially that in the succeeding years after 2017, Uy has ventured into more companies, including DITO Telecommunity, which is expected to spend up to P257 million in five years. Since DITO has yet to record revenue, especially the continuous delay in its commercial launch, Uy is up against yet another wave of debt.

PH debt up by P8.6 trillion this Q3 2020 due to COVID-19 crisis

If we were to follow Development Budget Coordination Committee’s (DBCC) projected end-2020 analysis, the Philippines would incur a P9.59-trillion debt by year’s end.

This debt stock prediction might come true as the government’s total outstanding obligations at end-May rose 3.4% from P8.6 trillion a month ago and went up by a faster 12.3% from P7.9 trillion a year ago, as reported by the Bureau of the Treasury (BTr) this past week.

A P1.53 trillion difference from the year’s end analysis and yet we are just starting to get up from slumber to reactivate the economy this Q3.

The BTr attributed the month-on-month debt surge to the “increased reliance on government securities issuance and external loan availments to fund its COVID-19 response amid a sharp drop in revenue collections.”

Department of Finance (DOF) officials said that local debt will account for about three-fourths of yearly borrowings to temper foreign exchange risks.

Shipping company of DITO Telecommunity’s Dennis Uy records net loss of P345 million in Q1 2020

Chelsea Logistics and Infrastructure Holdings Corp., the shipping firm of Davao-based businessman Dennis Uy, experienced a plunge in the first quarter of the year after it recorded a net loss of P345 million.

Chelsea is part of Uy’s Udenna Corporation which owns DITO Telecommunity, the country’s third major telecommunications player, 40 percent of which owned by state-owned China Telecom.

According to Chryss Alfonsus Damuy, president and chief executive of Chelsea, the challenges encountered by the company will likely remain in the following quarter. He added that the company remains optimistic that it will recover through the help of some projects.

Chelsea has unsolicited proposals to upgrade the Davao International Airport and the Davao Sasa Port, both of which are part of the “Build, Build, Build” program under the government of President Rodrigo Duterte, a close friend of Dennis Uy.

DITO Telecommunity, meanwhile, has been experiencing a lot of setbacks in the deployment of its services which the company attributed to the COVID-19 crisis.