Philippines out of FATF watchlist
Removing the Stain
After more than four years, an impediment to inflows of foreign investments and overseas worker remittances into the country has finally been cleared.
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| The Philippines "cleans dirty money better" |
On 11 February 2005, the Paris-based Financial Action Task Force (FATF) against money laundering removed the Philippines, Indonesia, and the Cook Islands from its watchlist of noncooperative countries and territories. According to the FATF, the three countries have “stricter customer identification, suspicious transaction reporting, bank examinations, and legal capacities to investigate and prosecute money laundering.” Furthermore, “recent visits to these countries confirmed that they are effectively implementing anti-money laundering measures to remedy the deficiencies that were identified by the FATF.”
The country’s Anti-Money Laundering Council noted FATF’s satisfaction with the swiftness of issuance of freeze orders by courts as well as the appointment by the Supreme Court of special courts to handle money laundering cases.
The removal of the Philippines from the watchlist also qualifies the country for membership to the Egmont Group of financial intelligence units for the exchange of information on and prosecution of cross-border financial crimes.
Competition in cellphone market
Price Wars
What started out as an innovative marketing scheme by a new player in the sector is now turning out to be a no-holds barred pricing war among local telephone companies. And rightly so, these companies badly need to secure dominance in a viciously cut-throat industry.
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| Consumers stand to benefit from tougher competition in the cellphone market |
Globe Telecom and Smart Communications, through their subsidiaries – Innove Communications and Pilipino Telephone Co., respectively – filed petitions with the National Telecommunications Commission asking to issue a cease-and-desist order against Sun Cellular’s "24/7" service. The latter offers unlimited text and call rates to subscribers for an additional fee of P100 and P250, depending on the subscriber's preferred period of unlimited cellular access. The unlimited plan is only good for calls made and text messages sent among Sun Cellular subscribers.
Innove and Piltel claimed that Sun Cellular, the trade name of Digitel Mobile Philippines (a unit of listed Digital Telecommunications Phils., owned by tycoon John Gokongwei), was practicing "predatory" or cut-throat competition pricing in offering the "24/7" service. The complainants wanted the NTC to set all call rates at P5.50 per minute and to order Sun Cellular from charging lower rates. Sun Cellular which planned to offer the service only as a promotional campaign made it permanent following its success in drawing thousands of new subscribers. The campaign boosted the company’s subscriber base to 1.1 million as of end-2004.
Digitel’s “24/7” plan, according to Piltel, was destroying the "fundamental market pricing considerations when it priced its service at a level where no new market entrants in the cellular market can still compete. Therefore, any losses Digitel may incur at the moment may be recovered later when it has severely weakened its competitors and successfully driven them out of the market." Piltel claimed Sun’s pricing scheme threatens its viability in the already crowded cellular market.
"Digitel charges Piltel a wholesale rate of P4.50 per minute access charge to its network, while its own subscribers have an unlimited retail access to its own network at P250 a month, or P100 every 10 days," Piltel said.
Globe and Smart which claims 95% of the cellular phone market argued that their subscription base suffered due to Sun’s marketing efforts which attracted a substantial number of new users. Compared to these two giants, Sun Cellular is a very small competitor with less than 5% of the market, Digitel officials said.
For its part, the NTC has required Digitel to answer the charges made by its competitors. "The Commission required Digitel to answer charges within 15 days on Sun Cellular's 24/7 plan. We did not issue a cease-and-desist order because the Commission believes the circumstances do not warrant stopping “24/7” since there is no prejudice or damage to the public," NTC Commissioner Ronald Olivar Solis said.
In the end, consumers would only stand to benefit from lower call rates if competition is allowed in a market as dynamic and technologically impermanent as today’s telephone industry.
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