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Thursday 18, 2014 Vol.4,102015 No. 40 Friday, December Vol. 11 No. 57

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Future bleak for export sector–World Bank

INSIDE

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chris martin

By Catherine N. Pillas

he outlook for Philippine exporters looks dim, as the country’s top export markets are increasingly strengthening their domestic manufacturing sectors via new technology, thus, lessening reliance on imports, the World Bank said during the National Export Congress on Thursday.

life

Roberto Martin N. Galang, operations officer for Trade and Competitiveness for the World Bank Group, presented to local exporters a bleak picture of the global economic growth and the state of trade in the coming years.

“The world market has changed. Unfortunately, we have foreseen that in the next few years; what used to be a growing and vibrant market will no longer be as such,” he said.

“Worse than that, unfortunately, Continued on A2

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brazil’S RouSseff FACES impeachment

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LIGHTS HOUSE A boy walks past Christmas decorations outside a house in Cainta, Rizal, on

ZUCKERBERG PHILANTHROPY

Sunday. The house is drawing huge crowds, especially during weekends, with visitors using the bright lights and festive Christmas décor as their backdrop for selfies with families and friends. AP/Aaron Favila

PAL to fly to the ‘City of Light’

By Ma. Stella F. Arnaldo

Special to the BusinessMirror

P WORLD

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IONEERING flag carrier Philippine Airlines (PAL) will be expanding its European network, adding Paris to its routes “by 2016-2017.”

The announcement of the new Manila-Paris route was made by David A. Lim, PAL senior vice president, Commercial Group, during

PESO exchange rates n US 47.1520

the carrier’s recent party to celebrate the second anniversary of its London route.

Lim told the BusinessMirror that the Paris route will likely be served via the Middle East, using Dubai as a layover, “with an evening departure out of Manila.”

He said other key European destinations that the carrier is considering flying via the Middle East route are Amsterdam and Germany.

CANILAO: GOVT CAN SAVE ORTHOPEDIC HOSPITAL PROJECT

For his part, Ryan T. Uy, PAL vice president for sales, added that the Paris route will use the Airbus 330, which can carry 368 passengers.

“This is temporary, until we get the A350.” The A350-900, which carries 325 passengers, will likely be used

by PAL as a standard aircraft for its long-haul destinations.

In flying via Dubai for its Paris route, Uy acknowledged that PAL is

The Philippines can resurrect a public-private partnership (PPP) project to upgrade an orthopedic hospital, despite the winner of the bid, Megawide Construction Corp., seeking to end the deal, said Cosette V. Canilao, the head of the government’s PPP Center.

“We can actually save it,” Canilao said in a phone interview on Wednesday. “There is still an opportunity.”

PPPs are the cornerstone of President Aquino’s drive to boost infrastructure. The program took a hit, after Megawide last month sought to terminate the P8.69-billion ($184-million) hospital PPP deal, citing the health department’s failure to deliver the site for the project among reasons. If the deal falls apart, it may put into question the viability of the PPP Program, where more than $22 billion of projects are lined up, Canilao said.

Under the contract, the health department has three options: contest the notice of termination of the deal; allow the deal to end; or convince Megawide to proceed with the project, Canilao said in a November 23 memo to the President, a copy of which was obtained by Bloomberg and confirmed by her.

Bad publicity

“The news of Megawide-World’s notice of termination was publicized by the media at a very bad time,” according to the memo, a

33-page document that included attachments. “It came while His Excellency was hosting country leaders of the Asia-Pacific Economic Cooperation and seeking to attract more foreign investments to the Philippines.”

The deal was signed in March 2014, and Megawide was scheduled to start construction in September 2014, according to the memo, which was addressed to the President through the secretaries of executive, finance, economic planning, Cabinet and justice.

Health Secretary Janette L. Garin wasn’t immediately available for comment. Megawide Spokesman Louie B. Ferrer declined to comment.

The health agency can assert that the notice of termination did not conform to procedural requirements, according to the memo. Any dispute will need to be resolved through either amicable means, a project disputeresolution board or arbitration, the memo said.

Elections risk

The stalled Megawide project underscores the challenges Mr. Aquino faces in his infrastructure drive, a key plank of his economic agenda. Scope for delays on big-ticket PPP projects will be “further exacerbated” by elections in May next year, BMI Research said in a December 2 note. Another risk is the lack of institutional capacity to conduct preconstruction See “Orthopedic,” A2

See “PAL,” A2

n japan 0.3828 n UK 70.4781 n HK 6.0839 n CHINA 7.3689 n singapore 33.4127 n australia 34.4779 n EU 50.0424 n SAUDI arabia 12.5688

Source: BSP (3 December 2015)

A2

News

BusinessMirror

Friday, December 4, 2015

PAL. . .

Continued from A1

basically following the template of the Middle Eastern carriers which offer European routes via their home hubs.

“We will bring the fight to them,” he stressed. Middle Eastern carriers are state-owned and receive subsidies for their operations. As such, they are able to offer cutthroat fares for their routes to the region, and then on to Europe.

At present, PAL has code-sharing agreements with Middle Eastern carriers, such that when one books a PAL flight say, to Abu Dhabi, essentially it is an Etihad flight.

Uy says the target market for the Paris route will be overseas Filipinos and leisure travelers. There are about 100,000 Filipinos living and working in France.

“It would be nice if we could fly to Rome, because there is a large religious tourism market [from Manila], as well as a great number of OFWs. But we don’t have fifth freedom rights with Italy,” he said.

The fifth freedom right allows an airline from one country to fly between two other countries. PAL had wanted to fly to Rome via the Middle East, as well. He underscored that the so-called golden triangle of European routes for any airline is London, Rome and Paris.

Meanwhile, the Department of Tourism (DOT) is strengthening its promotion of the Philippines to French travelers and recently sent a mission to encourage more visits.

Arturo Boncato Jr., DOT assistant secretary for Tourism Regulation, Coordination and Resource Generation, said, “We presented different tourism concepts to them such as emerging nature, eco-cultural, eco-adventure, as well as

off-the-beaten path destinations in our 13 regions to tour operators, which included chief executives and product managers.”

The DOT organized its road show in Paris on November 10, and “we highlighted heritage sites as well like Banaue. We introduced Lake Sebu, South Cotobato as a community-based ecotourism site. We also shared One Visayas Dives featuring various dive spots in Western, Central and Eastern Visayas.”

He said there was also “serious interest in Sarangani for paragliding and paramotor, as well as surfing in Siargao.” These tour operators are selling Asia, and will include the Philippines in their packages.

Boncato said there were scheduled inspection trips this December to update the French tour operators of the country’s tourism products but these were suspended due to the recent terrorist attacks in Paris. He is hopeful this will be resumed early next year.

During the visit of France’s President François Hollande in Manila in February, he said the Philippines makes for a good tourism destination for the French people. “There are wonderful [sites] that we should protect here, that we should support here...so that there will be more French tourists coming to the Philippines,” he told a gathering of the Makati Business Club.

On the other hand, he said, there were not enough Filipino leisure travelers to France.

Visitor arrivals from France grew almost 17 percent to 30,000 from January to September 2015. Because of its consistent double-digit growth rates in arrivals, France is considered a new emerging visitor market.

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Future bleak for export sector–World Bank Continued from A1

we’re also seeing a change on how trade plays a role in this global growth. Four or five years ago, this growth is driven by exports and trade; now this may no longer be the case. Even if the global market growth may go up again, trade may no longer follow,” Galang warned.

The World Bank officer explained that the advent of new manufacturing capabilities in developed countries, such as in the US and Germany, is invigorating domestic manufacturing that may lead to less dependence on imports.

“New manufacturing capabilities are allowing rich countries, like the US, that outsource their production globally to now manufacture half of their products in-house, so, therefore, we’ll no longer see competition from Vietnam and Mexico in terms of manufacturing for the global market but countries like Germany and the US,” Galang noted.

China appears to be going the same way—increasing local pro-

Ortophedic. . .

Continued from A1

duction—as a result of its economic rebalancing. Moreover, the Trans-Pacific Partnership (TPP) agreement, which includes fellow Asean nations Malaysia and Vietnam, may possibly put the Philippines at a disadvantage in the global trade.

“Two of our Asean neighbors— Malaysia and Vietnam—are members and we are unfortunately not.

And this might create problems going forward because an investor may see those two countries to be a good place for exports because of the TPP,” Galang said.

About 50 percent of the Philippines’s exports are shipped to countries belonging to the TPP, so the need to scale up the competitiveness of the export sector is imminent, advised the World Bank officer.

Going forward, while negotiations for the TPP had been concluded and will now undergo approval by individual members, the country has to implement domestic reforms to address nontariff barriers to trade.

“We really need to upscale our export competitiveness and capabilities so that we can still continue to set into these TPP markets. We need to at least start some of the reforms that the TPP requires so that we can remain competitive,” Galang said, citing bureaucratic red tape in the form of issuing licenses and harmonizing of standards as areas for improvement.

Department of Trade and Industry’s Export Marketing Bureau Director Senen M. Perlada said 2015 has proven to be a tough year for local exports due to the softening of demand from the country’s top export markets.

From January to September, merchandise exports declined by 7 percent, compared to the same period the year before, resting at $43.746 billion from $46.9 billion in 2014.

In September alone, exports dropped 24.7 percent—the steepest decline in over four years.

Meanwhile, the Asian Development Bank (ADB) downgraded its growth forecast this year for the

Philippine economy on the back of weak exports and imports.

In the A sian Development Outlook Supplement released on Thursday, the Manila-based multilateral development bank said full-year growth will likely hit 5.9 percent in 2015, instead of ADB’s initial 6-percent forecast in September 2015.

However, the ADB maintained its GDP estimate for 2016 at 6.3 percent.

“Net external demand weighed on GDP growth in the first three quarters, however, reflecting brisk expansion in imports on strong domestic demand and only a modest rise in merchandise exports.

The unexpectedly sharp drop in net external demand prompts a small downward revision in the growth forecast to 5.9 percent in 2015,” the ADB said. The ADB also said the third quarter performance of the economy, which was a growth of 6 percent, was already considered in the new estimate.

activities, such as documentation, spatial planning, feasibility studies, public consultation, permit issuance and land acquisition, it said.Megawide had already spent more than P400 million as of

Februar y this year on hiring Its shares fell a third day in Manila on Thursday.

The health agency and Megawide said in a November 17 joint statement that issues with the

project are an isolated case. Megawide had won other PPP projects including the upgrade of Cebu air port, construction of schools and a transport hub in Manila.

With Cai U. Ordinario

Bloomberg News

The Nation BusinessMirror

news@businessmirror.com.ph

Editor: Dionisio L. Pelayo • Friday, December 4, 2015 A3

Express bus service along Edsa from QC to Makati starts Saturday

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By Claudeth Mocon-Ciriaco | Correspondent

N an effort to decongest Epifanio de los Santos Avenue (Edsa) during the Yuletide season, the government will be implementing a holiday nonstop bus service starting December 5 until January 6.

Cabinet Secretar y Jose Rene D. Almendras said the move will encourage private-car owners to leave their vehicles and use the express buses, a “way of increasing efficiency of the use of Metro streets.”

“We want to see a shift in culture, from car-riding to bus-riding public,” Almendras said in a news briefing at the Metropolitan Manila Development Authority (MMDA) office in Makati City, which was also attended by MMDA Chairman Emerson Carlos, Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Winston Ginez, and traffic bureau executives in the Metropolis.

During the meeting, Almendras admitted that they are having a

hard time addressing traffic, particularly in the area of Edsa-Guadalupe in Makati City.

“W hen December comes in Guadalupe, we call it Guadalupe challenge, as traffic usually becomes really bad,” he said, adding that the shortage of buses is experienced by commuters from 6 to 9 a.m. and 5 to 9 p.m.

Almendras said the expressbus scheme is one of the mediumterm solutions to improve traffic along Edsa, especially with the holiday rush. He added that the Philippine National Police-Highway Patrol Group will escort the express buses “if needed.”

He reiterated that with the 120,000 new private vehicles in Metro Manila this year, it would

be necessary to improve the travel time of commuters.

The express buses will be picking up passengers from TriNoma, SM North Edsa in Quezon City and SM Megamall in Mandaluyong City, and bringing them to Park Square Ayala Center, Glorietta 5 and Park Square Terminal in Makati City.

The fares range from P50 to P80.

The buses can load or unload passengers along Ayala Avenue once inside the Makati City Central Business District.

The express buses start operations at 6 a.m., with trips every 30 minutes. The last trip will be at 10 p.m.

For his part, Ginez said that the LTFRB will be issuing special permits for the 20 express buses, which are exempted from the number- coding scheme.

The buses will be dispatched on t i me f rom t he ter m i n a l , whether the units are full of passengers or not.

Robert Siy, senior adviser for planning, said the objective of the holiday nonstop bus service is to provide additional high-capacity public-transport services to and from major destinations during the holiday season and reduce reliance on private-vehicle use.

FAVE PLACE With a mix and match of gourmet pizza, sizzling angus steaks and oven baked sushis, Torch is an ideal hangout for family and friends. It opened its first store in Greenhills, San Juan, in 2010, and recently opened its fifth store in Circuit Lane, Circuit Makati. Torch’s other stores are in UP Town Center, TriNoma and Greenbelt 5. Faye Pablo

BusinessMirror

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Friday, December 4, 2015

A5

THE LOVE LOCK GARDEN in Suntrust Verona is the community’s take on the famous Pont de l’Archeveche (Love Lock Bidge) in Paris, France. Here, couples and even families are encouraged to place their own locks around the fences of the garden to symbolize their undying love and unity.

VERONA: YOUR DREAM SUBURBAN COMMUNITY SOUTH OF MANILA

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B L R. G

FTER a hard day’s work, you seek solace in the comforts of your home where you can relax in the knowledge that you are in a place which is both safe and convenient.

You want to look forward to waking up each day to savor the cool mornings in the peace and quiet of your abode. Then you look forward to weekends to head out to a nearby park for a leisurely walk while bathing in early sunlight, far and away from the hustle and bustle of the city.

This is the kind of suburban bliss offered by Suntrust Properties’ Verona township in Silang, Cavite.

Dubbed “La Citta’ Di Amore” (“The City of Love”), Suntrust Verona is a 65-hectare Italian-inspired development that offers the best of both worlds – Tagaytay’s cool climate and leisure landmarks, and the proximity to Sta. Rosa, Laguna’s industrial and commercial district.

WELCOME TO “BOOM TOWN”

SUNTRUST Verona is just some minutes away from Sta. Rosa, Laguna, a golden zone of top workplaces, industrial parks, schools and shopping malls. This premier city and hub of Laguna is considered the Makati of the South in terms of economic activity and glamour.

Santa Rosa, also known as the Lion City of South Luzon, has attained an annual income of P2.3 B surpassing the income of Calamba City and Batangas City in 2013. This makes Santa Rosa the richest city in South Luzon in terms of annual income.

It’s not really surprising as Sta. Rosa is home to special economic zones, industrial parks and theme parks, among them are: Laguna Technopark Inc., Greenfield Automotive Park, Toyota Special Economic Zone, Lakeside Ecozone, Nuvali, Daystar Santa Rosa Industrial Park, Santa Rosa Industrial Complex, Meridian Industrial Complex, and the Enchanted Kingdom.

Verona is also just 15 minutes away from Tagaytay—one of the most visited vacation places of Manileños’ who wish to enjoy cool, refreshing weather for outdoor bonding with their family and loved ones.

And if Metro Manila is where

you need to be, an efficient road network has been put in place to and from Sta. Rosa to get you to your destination quickly and safely.

A Wide Array of Choice Units

SUNTRUST Verona also offers six model homes, all in keeping with the community’s Italian theme, namely Fiorenza, Gisella, Mariella, Amadea, Orabella and Caterina.

Orabella is a single-detached home with a lanai, a master bedroom (with toilet and bath), two bedrooms, balcony, veranda and a carport all nestled in a 176-square meter lot area. Caterina, Gisella and Amadea are also elegantly-designed, single-detached model houses with the same lot area as Orabella.

Another single-detached model home is Fiorenza, but masterfully done in a lot area of 120 square meters, while Mariella is an 88-square meter duplex.

All the model homes feature concrete tile roofing with accessories; fiber cement board with painted finish for the ground floor; second floor ceiling with light steel framing; flat bar stair handrail painted finish for steel railings; stainless steel sink with faucet; flush-type toilet bowl with lavatory; painted finish for interiors, textured cement paint finish for exteriors; reinforced concrete stairs and second floor partition.

Dolce Vita at its Best

TRULY a community of its own, residents will also get to enjoy the leisure amenities in Suntrust Verona which include the clubhouse with its swimming pool and basketball court; a themed nature park complete with bridgeways and hiking trail; shophouses and a clock tower with a viewing deck that is overlooking panoramic views of the southern Manila lowlands in the north, Mt. Makiling, Laguna de Bay and the Sta. Rosa lowlands in the east, the mountains of Silang

THE recent blessing and ceremonial opening of Suntrust Verona’s Love Lock Garden

in the west, and the mountains of Tagaytay in the south.

Verona: La Citta’ Di Amore is indeed a testimony of the Suntrust Brand Experience and in its commitment to build master-planned and self-sustaining townships for

the Filipino market. To this day, the company has successfully combined well-thought-out designs which focus on space-saving and functionality features while delivering a high standard of comfort and style customized to the needs

of Filipino families, making it today’s developer of choice.

Moreover, Suntrust is also a wholly-owned` subsidiary of Megaworld Corporation, the country’s No. 1 business process and outsourcing (BPO) office developer and

landlord in the Philippines. Both companies are headed and led by real estate magnate and visionary, Dr. Andrew L. Tan, who pioneered the LIVE-WORK-PLAY-LEARN township concept in the country.

A6 Friday, December 4, 2015 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Prostitution: You can’t have it both ways

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he unnecessary death of Jennifer Laude is the result of one individual perpetrating a vile and inhumane act on another. There can be no excuse or explanation acceptable for that behavior.

But is prostitution partially to blame?

As with many of the terrible events that happen in life, there is usually a series of “what ifs”. If you have ever been in an automobile accident, you know exactly what that means. What if I had left a few minutes later? What if I had been driving at a slower speed? What if I had been looking right instead of left?

In the Laude case, there are plenty of what ifs. Some are basically saying, what if the United States and Philippine military had not been conducting joint exercises. What if US military personnel had not been allowed on-shore leave? We would add to that, what if the national and local governments, as well as law-enforcement authorities did not turn a blind eye to prostitution in the Philippines?

Depending on the source, prostitution in the Philippines is not small with between 500,000 and 800,000 men and women choosing to be a part of this profession. Add to those numbers the women and children that are forced into the sex trade, and this is an issue that cannot be ignored any longer.

While it is easy to say that prostitution is a direct result of the US military bases being in the Philippines, the bases at Subic and Angeles have been gone for decades. Yet, the Coalition Against Trafficking in Women estimates that some 15,000 Australian men visit Angeles on sex tours every year. The Philippine Sex Workers Collective counts some 3,000 sex workers in Baguio City alone.

Either prostitution should be regulated with the proper protection in place for the workers, and laws—perhaps new laws—against prostitution should be enforced. Australia and many European countries have government-licensed brothels.

On the other hand, “legalizing [prostitution] is not an option, but instead [the government must] remove them [prostitutes] from poverty,” said Cordillera women Igorot leader Mila Singson, regional coordinator of the Gabriela Women’s party-list.

Yes, illegal prostitution is about poverty but it is also about health, public safety, drug usage, and violence against women and children.

There is no doubt that the legislature does not want to tackle the issue of legalizing the sex trade any more than it wanted to talk about contraception and family planning. Likewise, it does not want the laws strictly enforced because this may go against the generally accepted casual attitude in Philippine society toward prostitution.

Laude’s death is not the first nor will it be the last under similar circumstances. We all bear some responsibility. The lukewarm approach to prostitution where a crime is being perpetrated but the existing laws are not enforced is a failure. You can’t have it both ways.

Tough James Jimenez

O

spox

n the first day of December, the Supreme Court (SC) announced that it was issuing a temporary restraining order (TRO) enjoining the deactivation of registered voters without biometric information—the end point of the Commission on Elections’s (Comelec) 17-month #NoBioNoBoto campaign.

The ruling comes just as the Comelec is finishing up the Project of Precincts (POP)—essentially the list of precinct assignments for all of the approximately 54 million voters with biometrics—and, incidentally, a bare two weeks since the case was first brought before the High Tribunal.

Because of the timing, if nothing else, this TRO will materially impact the Comelec’s preparations for the elections next year. For instance, instead of being able to go ahead with the finalization of the POP—a step that is practically a condition sine qua non for the printing of ballots—the Comelec must now study how best to operationalize the potential addition of 2.4 million registered voters without biometrics to the list.

If the matter is not resolved at the level of the SC immediately, this might result in the release of a POP based on approximately 54 million voters, and a “supplemental POP” covering the 2.4

million registered voters without biometrics. If this is how it turns out, the potential for election-day confusion is increased significantly, which might lead to some precincts being underprovisioned. This, in turn, will increase the likelihood of failed elections being declared in those places that don’t get the necessary supplies for the elections.

If, on the other hand, the matter is quickly but adversely resolved, the Comelec might have to release a single POP, covering approximately 56 million voters. While this is probably the better administrative solution, it still throws out a lot of the old estimates. Remember that the POP is the not just about precinct assignments, it is also the basis for the number of ballots to be printed for each of the more than 90,000 polling places. Considering that each ballot has to be precinct-specific, and that the printed ballot-to-voter ratio has to be exactly 1:1, then you can see how exact

the POP must be.

Since the possibility of a 56-millionstrong electorate is such a recent development, you can also imagine how entire armies of Comelec employees are assaulting their adding machines right now to churn out computations, recomputations, checking each result, and double- triple- checking everything.

And we’re still only talking about preelection preparations.

If the injunction becomes permanent, and the Comelec is prevented from delisting more than 2 million registered voters without biometrics, the total number of voters will go from approximately 54 million to around 56 million.

With only a little over 90,000 vote counting machines (VCMs) available for use, this will mean that the voter to VCM ratio will likely increase from a comfortable 1:800 to a crowded 1:1,000.

In practical terms, this will mean longer queues, a longer election day that might well stretch out into the night, and the increased possibility of machine issues cropping up during voting.

Another distinct possibility spawned by this TRO is the reemergence of flying voters.

One of the major benefits of mandatory biometrics, as set forth in Republic Act (RA) 10367, is the elimination of multiple registrants from the list of voters. Obviously, a multiple registrant can only validate one registration since he only has one set of fingerprints. This set of fingerprints will definitively identify the registrant and, if the system finds other registration records with the

same fingerprints, then all those other registrant-identities will be delisted. But there’s the rub. The other records have to have biometrics information in order to be found. Without biometrics records, those other registrations—essentially alter egos of the multiple registrant— can escape detection for a long time. This gives rise to flying voters. With the SC’s TRO, the corrective function of biometrics is, therefore, effectively hobbled.

In fact, the Comelec has long suspected that many of the 2.4 million registered voters identified as having no biometrics are actually nonexistent in real life; multiple registrations that have thus far escaped detection and delisting. The TRO, however, has made this something of a moot point. Whether legitimate voters or not, these 2.4 million “voters” essentially get a free pass into the lists of voters, allowing the persons behind them to become flying voters.

There were valid reasons for the enactment of RA 10367, and the solution that the law prescribes isn’t outrageously difficult to do. All a person had to do was submit himself for biometrics capture. Close to 7 million people were able to do it, from May 2014 to October 2015. And for the most part, these people did it because they believed that the #NoBioNoBoto campaign represented a real chance at finally having a clean voters’ list.

Well, tough, said the petitioners.

James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Friday, December 4, 2015 A7

SMEs and trade: The connection of inclusive growth Alvin P. Ang

EAGLE WATCH

A

fter the conclusions of the Asia-Pacific Economic Cooperation (Apec) and Association of Southeast Asian Nations (Asean) integration meetings last week, the real work must now begin. Specifically, it is the role of small and medium enterprises (SMEs) that was highlighted as key in making the connection between facilitating trade and making growth inclusive.

The government has already put in place national policies to assist the SMEs, in general. There are two existing laws that should help support SMEs, these are the Magna Carta for SMEs and the recently passed Go Negosyo Act. The Magna Carta requires banks to provide at least 8 percent of their loan portfolio to the SME sector, while the Go Negosyo Act provides a broader environment of facilitation and also funding support for start-up firms with a centerpiece Negosyo Centers in all cities and municipalities.

The connection begins from understanding that the new order of trade is no longer competing and outselling others via a complete product but through a gamut of intermediate goods production. Consider the electronic products and gadgets that we have today. While the label says made in China, the actual product is an agglomeration of parts contributed from different countries. This way, it makes sense to be part of a regional agreement to cooperate rather than compete with each other. This also helps countries like the Philippines get into the global supply chain in a shorter time and in an efficient manner.

In the recently concluded Philippine Economic Society Annual Meeting, keynote speaker Ganeshan Wignaraja of the Asian Development Bank presented data on SMEs in the Southeast Asian region. Among the things he highlighted are as follows: a) 9 percent of SMEs in the region are part of the global supply chain; b) large firms dominate SMEs in the global supply chain; c) access to finance is a critical constraint; and d) most SMEs are financed internally, among others. These observations present a big challenge for SMEs in the region, as well as for the Philippines, in particular. Consider the table below (summarized from Wignaraja), it is clear that SMEs can play a big role in making growth inclusive, as they provide for more than 60 percent of employment and have a considerable share in GDP of about 40 percent. However, the shares are lower when considered for trade, as SMEs’ shares to exports are about 20 percent and individual country’s shares to the global supply chain is less than 3 percent. This means that the challenge is to convert and improve the current SME environment to allow them to participate in, and, thus, benefit from, trade. It is, therefore, important to have a target of how much do we expect SMEs to contribute to exports and supply chain.

For the Philippines, the Department of Trade and Industry (DTI) has been at the forefront of helping SMEs ride the global supply chain.

In a recent industry meeting which the DTI organized and I participated in, I have validated that many SMEs are being tapped by the international buyers to produce products for them.

However, similar to the findings of Wignaraja, many of them are unable to fulfill the requirements due to lack of funding and lack of sustained skills and capacities. Responding to these challenges is not straightforward, as different industries have different needs. However, the government has already put in place national policies to assist the SMEs, in general. There are two existing laws that should help support SMEs,

these are the Magna Carta for SMEs and the recently passed Go Negosyo Act. The Magna Carta requires banks to provide at least 8 percent of their loan portfolio to the SME sector, while the Go Negosyo Act provides a broader environment of facilitation and also funding support for startup firms with a centerpiece Negosyo Centers in all cities and municipalities. The Magna Carta has been in effect since 2008.

However, it is noted that the banking sector is not able to fully comply with the required 8-percent lending to the SME sector, despite the P500,000 penalty per quarter imposed by the law. Based on existing data from the Bangko Sentral ng Pilipinas, banks are only able to lend about 5.6 percent of their portfolio to the sector. This means that banks are willing to pay the penalty than take the risk of lending to SMEs. Thus, the issue is not access to funds per se, but the capacities and sustainability of the SMEs accessing banking funds. Lack of capacities means also that the SMEs are too small to become formal firms.

It is hoped that the Go Negosyo Act can be the catalyst for bringing SME first into the formal sector, and then eventually to the global value chain. The law rightly put in the core of SME development at the local level and not through the national government agencies. This should force local chief executives to be strategic in understanding their local competitiveness and provide the right environment for developing SMEs. These could include commitment to fast business permit approval; providing training for skills; capacities in basic financial accounting; creating local supply chains; facilitate the organization of local business associations; and helping smaller SMEs organize into a cooperative level, among others. It is a long way to go, but the journey has already started.

Alvin P. Ang, PhD, is professor of Economics and senior fellow of Eagle Watch, Ateneo de Manila University’s macroeconomic forecasting unit.

Share of SMEs to employment, GDP, exports and global supply chain

Vietnam Indonesia Philippines Thailand Malaysia

Share to Total Share to GDP Share to Total Share to Global Employment Exports Supply Chain 77 97 65 77 59

Summarized from Wignaraja Presentation at PES

40 58 36 39 32

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All in a day’s (or two days’) work Tito Genova Valiente

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rs. Venable says in Suddenly, Last Summer, when you lose a husband, you are a widow, but when you lose a son, there is no name for you.

Well, I lost all my keys in a week.

Then you can call me stupid or reckless. But, there is a place to go to when you lose keys—the manufacturer of keys. It is a wonder that, however difficult it is to open your door without the appropriate key, there is always an easy way to get another key to unlock any entrance. In this case, there is a man or a woman who crafts keys in a few minutes.

In my case, one morning, it was a young woman, amiable and accommodating. She looked at my original copy—somehow, there is always an original copy—and, with confidence, inspected the different forms of keys on the wall. She turned to me and offered to do the two keys in two different colors, so “you could easily distinguish one from the other.”

As my key woman was shaving off the plastic form to make a key, a young man stood beside me. He placed a small bag on the tall table and motioned the older man behind the counter that he was interested to have his bag repaired.

That day, I found out there are men who have their small bags repaired, instead of throwing them away. The young man opened the bag and showed the broken zipper. He stretched the cloth against which the zipper ran: it was torn.

The repairman looked at the ruins in front of him and quoted P500!

The repairman wanted also to change the ripped cloth to leather.

This means that there would be more than P500. I was looking at the young man beside me and was ready to advise him not to agree. But he agreed. At this point, the young woman handed me the keys both in streaks of colors that made the keys similar in shades, not in colors that I “could distinguish easily.”

Made to order. This is an act rare, almost not within our consciousness until we need the service.

Upon doctor’s order, I am now limiting my sugar intake. But, Doc, would I still be able to eat my favorite hamburger? The answer was yes, so long as there is no mayonnaise.

This brought me to eating made-toorder hamburger. As that fast food sweetly categorizes my burger, “just for you.” It sounds personal, almost timidly private.

Tailors were my first-ever contact with the world of madeto-order. We had our tailors, not in the fancy royal decree sort of things, but a tailor who was chosen by my father. The owner of the tailoring was from my father’s hometown, Buhi, which was noted for weavers, artisans and folk theater performers. In the absence of a brand—we had no ideas of brand then—we sought the tailor.

The names of the tailoring shops were unique. If they did not bear the owner’s name, their front was emblazoned with names that sounded smart: McRover, Stedman, McIntosh, Ascot...ours was McRover. It sounded nice. No one made fun of those names. Globalization was not even a sperm thought yet.

At the tailoring shop, you stand in front of the tailor who was also the master cutter. If the owner was not there, you ask for him especially.

If the owner was there, you greeted him and introduce yourself properly as the “son of Jose of Sta. Elena.” You went through these rituals because the owner or the tailor did not have to remember your name anyway because you were young. They would recognize your father or grandfather, but not you.

If you had no idea about the design of the polo shirt or the pants,

the tailor would offer his ideas. Being young, you were not expected to know how your shirt of pair of pants would appear when finished.

But you were there because you had chosen a fabric and a color. That was ultimately your fashion choice.

The more daring young men (the proto metrosexuals) would bring a photo of the pants they wanted to be copied. Usually in black-andwhite and rarely in color, the photos would be inspected and, however blurred, interpreted.

The presence of the tailor would connote the existence of textile stores. These were airy stores with long hallways fitted with glass cases the better to display their bolt of textiles. Usually encased are textiles with colors and designs fit for the Three Magis.

In the textile stores, one chose from the materials in open display.

You chose one and the saleslady would measure the cloth against imagined inches on the counter in front of her. For some and many reasons, you believed that she properly measured the fabric and that it would be enough for a new shirt or a pair of pants.

These tailoring shops and textile stores are all gone. In my old city, they were replaced by hawkers of mobile phones, and DVDs and gadgets. The place is noisy. You do not need manners in these places, only a voice as loud as your money.

E-mail: titovaliente@yahoo.com

The gift of mining

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ntimining advocates claim that the world doesn’t need mining and that economic development can be attained by developing tourism sites, conveniently forgetting that responsible mining can produce a huge income per hectare of land used, have no off-site effects and leave a useful rehabilitated landscape.

One case in point is a study done by a Japanese government agency, which sounded off the alarm of an “imminent loss” of Boracay’s marine and coastal ecosystems if the status quo prevails.

In a five-year study of the tourist spot, the Japan International Cooperation Agency (Jica) and a group of Japanese and Filipino scientists discovered that the island’s coral-reef ecosystem has been seriously degraded by tourism-related activities.

The study is part of a larger Jica project called Coastal Ecosystem Conservation and Adaptive Management (Cecam).

After analyzing satellite images, the team calculated that coral cover in Boracay declined by 70.5 percent between 1988 and 2011. They also noted that the highest decline over the 23-year period happened between 2008 and 2011, as tourist arrivals rose by 38.4 percent.

This only shows that there is also that danger in “overdeveloping” tourism sites and that environmental degradation is not caused by mining alone. What makes mining more viable is that mining firms are mandated by law to rehabilitate the areas which they have mined and within their operational life span, they provide direct employment to the community where they operate.

In the Jica study, it was found out that environmental destruction is partially caused by unmonitored snorkeling and diving activities in Boracay’s coral-rich areas.

Because of the decline, Jica also said the island is experiencing beach erosion—consequently endangering its white-sand shoreline. Coral reefs prevent erosion by lessening the impact of strong waves to the beach, the agency said. “[W]e hope that LGUs [local government units] and policy- makers

Coral cover in Boracay declined by 70.5 percent between 1988 and 2011.

will be able to use scientific and technological information from the project [Cecam] to address critical environment issues affecting the study’s pilot sites,” Jica Senior Representative Takahiro Morita said in a statement.

Cecam scientist Miguel Fortes from the University of the Philippines (UP) also noted the “alarming” decrease of water quality—unsafe for swimming and other human activities—in the eastern part of the island.

Jica said the direct discharge of untreated wastewater near the shore could spur algal blooms and

coral-reef deterioration.

The agency has installed closedcircuit television cameras along the beach for real-time monitoring of wave conditions and observation of algal blooms.

“It’s very crucial that the sustainability of Boracay’s environment will not be exchanged for short-term economic gains,” remarked Cecam scientist Ariel Blanco, who also hails from UP. “We hope to continue working with planners and policy-makers in the island through knowledge sharing that will help conserve the coastal environment.”