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Bacolod City, Philippines Thursday, January 17, 2019
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with Benjamin Calderon


Rock & Refuge

The process of finding, implementing, and improving solutions to problems is continuous as problems arise also constantly. When the House Committee on Metro Manila Development directed the Department of Transportation (DOTr) to legitimize and regulate motorcycles as public transport vehicles, the action is to address the problem of the current law and regulations being implemented are not appropriately addressing the actual circumstances of reality.

“The main issue here is that the current law does not allow for motorcycles to ferry passengers. Passed way back in 1964, that law is over half-a-century old, 54 years to be exact, and sorely needs to be repealed or amended,” Manila Rep. Cristal Bagatsing said.

During the hearing conducted by the House Committee, we come to be informed that when the Supreme Court temporary restraining order (TRO) came out that allowed the Land Transportation Franchising and Regulatory Board (LTFRB) to apprehend Angkas rider-partners ferrying passengers, many of those adversely affected constituents reached out to their respective representatives. Preventing Angkas to operate deprives over 25,000 motorcycle riders a decent livelihood and deprives thousands of commuters what could possibly be the fastest and most convenient mode of transportation available in busy city streets—one that is monitored, deemed safe and provides liability insurance.

“Regulation, not prohibition, is the answer—as informal motorcycle colorums are already the main transportation choice of thousands of commuters, even before Angkas,” Rep. Bagatsing added.

This is a well appreciated development on the regulation of motorcycles ferrying passengers or locally called the “habal-habal” to which I concur and look forward to the application of the appropriate regulatory rules and regulations to our community.

Our banking industry as a whole, and the affected commercial banks as a consortium, is addressing the credit default of Hanjin Heavy Industries and Construction-Philippines (HHIC-Phil) in the total amount of at least $412 million (Php21.8 Billion at $1: Php53) owed to five of the billion country’s biggest banks. Of the five banks, RCBC— which is reported to have the largest exposure to HHIC-Phil at around $140 million—is seen to be most affected. The other banks’ exposures are smaller, the ratings agency noted: around $60 million for both BDO and BPI, around $80 million for Land Bank and about $72 million for Metrobank. While the legal procedures initiated by the borrower and creditors start to be sorted out, the loan default will negatively impact the creditors’ cash, profitability, capital and credit ratings.

Hanjin has tried to explain the why the company ran into this situation. Hanjin’s allegations that it obtained loan credit facilities from different local banks to finance its shipbuilding operations, but that its cash flow was adversely affected by payment schemes that were based on “pre-determined milestones in the construction.” Hanjin, likewise, claimed that “most of its customers attempted to evade payments, or worse cancelled their shipbuilding contracts,” thereby resulting in inadequate cash flow. Hanjin’s explanation to the court of how its financial troubles began jibes with the account of the so-called heavy-tail contracts cited in a Business Mirror “Broader Look” report wherein big shipping lines place several orders for vessels but make huge payments only toward the tail end of the production, forcing shipbuilders like Hanjin to borrow heavily to be able to meet the order. This event will be a simultaneous strong test on the banking industry and the five banks as to how good their fundamental are in addressing the problem of a loan default.

Let us end with an anecdote that encourages us to find solutions to our problems calmly and creatively. With the following. A Russian businessman walks into a Swiss bank in Geneva and asks for a $10,000 loan. He offers his luxury Mercedes car as collateral. The collateral is too good, and the bank manager approves the loan. A year later, the Russian comes back. He repays the loan and the 10% interest and is ready to collect his car. Finally, the puzzled bank manager dares to ask him: "Excuse me, sir, could you tell me: did you really need that $10,000 so badly? In order to get the money, you left your luxury car with us for a whole year!" The Russian replied, ‘That's simple – just think outside the box: where else in Geneva can I find such a great parking place for just $1,000 a year?"'*

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