DELAYS FACED BY PACIFIC TRADE DEALS SHOW NATIONS WANT QUALITY, NOT SPEED
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ASIA’S CHIEFS (From left) Malaysian Prime Minister Najib Razak, Myanmar leader Aung San Suu Kyi, Thai Prime Minister Prayuth Chan-ocha, Vietnamese Prime Minister Nguyen Xuan Phuc, South Korean President Moon Jae-in, Japanese Prime Minister Shinzo Abe, Philippine President Duterte, Chinese Premier Li Keqiang, Singaporean Prime Minister Lee Hsien Loong, unidentified Laotian representing Lao PDR Prime Minister Thongloun Sisoulith, Cambodian Prime Minister Hun Sen and Indonesian President Joko Widodo pose for a group photo during the Asean Plus Three Commemorative Summit in the 31st Asean Summit on November 14. AP
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fter talks aimed at wrapping up a giant Pacific trade deal almost collapsed in acrimony in Vietnam last week, ministers are now warning that a rival Asian pact should also focus on quality over speed. That doesn’t mean the 16-nation Regional Comprehensive Economic Partnership (RCEP) won’t get done. But the fraught negotiations in Da Nang over the Trans-Pacific Partnership (TPP) showed that nations aren’t going to rush trade deals just to defend globalization against the rising protectionist mood since Donald J. Trump entered the White House. The RCEP, which includes China and India but not the United States, is on the agenda for discussions at regional summits this week in Manila. Most officials acknowledge the deal will miss a year-end deadline, though they hope to have a framework agreement in early-2018. Several RCEP nations are also in the TPP,
which was reduced to 11 members when Trump withdrew the US on his first day in office, citing a perceived risk to US jobs. Moving ahead on the TPP since then has proven difficult, and talks were almost scuttled entirely in Vietnam after Canada refused to sign a framework agreement without changes, demanding a “high quality” outcome. After two days of wrangling, a framework agreement on the TPP was signed, but months of potentially painful work remain to get an actual deal. That preoccupation with finalizing the TPP has seen the focus shift from the RCEP. “The RCEP has been a priority after the TPP almost collapsed without the US, but, in the last few months, there has been some pickup in momentum for TPP,” Malaysian Trade Minister Mustapa Mohamed said last week in an interview in Vietnam. “The RCEP was a priority when we knew that the TPP was not going anywhere.” Continued on A12
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Wednesday, November 15, 2017 Vol. 13 No. 35
Lack of consensus on key items delays forging of RCEP
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By Catherine N. Pillas & Cai U. Ordinario
@c_pillas29 @cuo_bm
isagreement among the six trading partners of Southeast Asian countries concerning key provisions in the Regional Comprehensive Economic Partnership (RCEP) made it difficult to conclude the mega trade deal under the Asean chairmanship of the Philippines this year. A s e a n E conom ic M i n i ste r s Chairman and Philippine Trade Secretary Ramon M. Lopez said the “substantial conclusion of the RCEP still remains a goal.” His statement was read by Philippine Lead and Trade Undersecretary Ceferino S. Rodolfo in a news briefing held in
Pasay City on Tuesday. “Talks were not at a standstill; there was progress. We just couldn’t conclude it,” Rodolfo told reporters. He noted that the Association of Southeast Asian Nations’ six dialogue partners—China, South Korea, Japan, Australia, New Zealand and
There was progress in talks. We just couldn’t conclude it.”—Rodolfo
India—could not find a common ground on “contentious issues” in the mega trade deal. “Within the RCEP, we can see that developed countries are willing to open their markets to sectors of interest to Asean. The issue lies among themselves and we’re [Asean membercountries] are being affected by those issues,” Rodolfo said. See “RCEP,” A2
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PHL committed to uphold rule of law, human rights Teddy Locsin Jr.
free fire Philippine statement delivered by Ambassador Teddy Locsin Jr. at the “76—Report of the International Criminal Court” on October 30, at the United Nations General Assembly, New York. Mr. President, your excellencies, colleagues: e thank President Silvia Fernández de Gurmendi for her comprehensive report. As a real democracy, and a multiethnic Christian majority and Muslim minority society which cherishes diversity in all aspects—in the spirit of religious and political tolerance which has marked both religions at their best—and whose core values are American, the Philippines once again reaffirms its commitment to justice and to fighting intolerance and impunity, ensuring that perpetrators account for their crimes. The Philippines remains strongly committed to upholding the rule of law and human rights.
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Continued on A10
ECONOMISTS BUCK PROPOSAL BMReports TO GIVE SMALL ENTERPRISES TAX-EXEMPTION PRIVILEGE Asean Vision 2025 articulates Southeast Asian nations’ goal
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ranting “absolute” tax exemption to help micro, small and medium enterprises (MSMEs) could become a disincentive that would hinder the sector’s growth in the long run, according to local economists. On Monday Deputy Speaker Romero S. Quimbo of Marikina City told the BusinessMirror that MSMEs do not require additional funds but tax exemptions. EagleWatch Senior Fellow Alvin Ang said granting an absolute tax exemption to MSMEs is similar to the move of the government to grant minimumwage exemptions to firms that have less than 10 employees. “I do not favor exempting small businesses from paying taxes because it will become an incentive to remain small,” Ang told the BusinessM irror. “This is similar to the policy of exempting firms with less than 10 employees from complying to the minimum-wage law. These firms never had an incentive to grow.” For mer Tar iff Commissioner George N. Manzano said, however, that absolute tax exemption, in general, is good for MSMEs, especially for the micro enterprises. Tax exemption, Manzano added, becomes a disincentive, especially for firms “at the border” of becoming
ANG: “This is similar to the policy of exempting firms with less than 10 employees from complying to the minimum-wage law. These firms never had an incentive to grow.”
a large firm. This also requires a huge adjustment when MSMEs eventually graduate to a tax regime from a notax system. University of Asia and the Pacific School of Economics Dean Cid L. Terosa, for his part, said tax exemptions can also be abused, especially when the implementing rules and regulations are not followed to the letter. “We need to help them [MSMEs] help themselves without affecting the welfare of other sectors,” Terosa said. Economists, however, welcomed the proposal of President Duterte to roll out a P50-billion support fund for MSMEs. However, Terosa said this must be financed through means other than increasing or introducing new taxes. Terosa said one of the ways by which this can be done is through concessional-loan financing from the country’s official development assistance. See “Economists,” A2
PESO exchange rates n US 51.2320
By Henry J. Schumacher
Special to the BusinessMirror
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Conclusion
HE Association of Southeast Asian Nations, at 50 in 2017, can be proud that major strides have been taken toward its “Vision 2025.” Big business has adapted particularly well to the regional environment with major companies from most of the Asean states having realized the advantages of the single market many years ago. For them, the Asean Vision 2025 means new opportunities and more business growth. But in a region where the disparities among the member-countries stand out more that the commonalities, many sectors of society are struggling to come to terms with the dawning reality. Small and medium enterprises (SMEs), which make up the bulk of businesses and employers in countries across the region, are wondering what will happen when their locally made products face better or cheaper imported goods. Workers in many countries worry if they
MEMBERS of the Philippine National Police line up outside the Cultural Center of the Philippines, which is near the site where leaders from several countries are meeting to discuss trade and political issues within the “Asean 2025” framework. NONIE REYES
will still have jobs once betterqualified, multilingual people from the neighboring countries arrive in their country to work. The reality is that the formation of the Asean Economic Community (AEC) on January 1, 2016, is not the goal in and of itself. The AEC
integration is, rather, an ongoing work in progress requiring constant adaption and reinvention in the light of continuous and often unpredictable global change. The full implementation of key measures and the realization of benefits for stakeholders may carry through
under the Vision 2025 Agenda. As we move forward, it is also important to closely watch disruptive technologies that can affect reaching the Asean Vision 2025. In a study, titled “Southeast Asia at the crossroads: Three path
n japan 0.4510 n UK 67.2369 n HK 6.5668 n CHINA 7.7159 n singapore 37.6319 n australia 39.0746 n EU 59.7826 n SAUDI arabia 13.6615
Continued on A2
Source: BSP (14 November 2017 )
A2 Wednesday, November 15, 2017
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Asean Vision 2025 articulates Southeast Asian nations’ goal Continued from A1
to prosperity,” McKinsey Global Institute highlights the relative low base in terms of digital infrastructure, adoption and innovation of Asean member-states, with the notable exception of Singapore. If the region, however, would put the necessary backbone infrastructure in place, it could harness the power of technology to drive productivity improvements. Asean’s low starting point implies that it has a larger opportunity for technology-driven growth than more developed regions. Five closely related digital technologies are poised to create substantial economic growth and changes in society across sectors. The mobile Internet can pave the way for productivity gains and more
RCEP. . .
Continued from A1
Some of the hurdles, according to him, are those that relate to trade in goods, specifically the formula for cutting tariffs and other parameters related to tariff elimination. There was already agreement among the parties regarding the common concession basis, or those concessions given to all parties equally, and common flexibilities, which pertain to a lower level of tariff reduction on certain goods that will be applied to all parties. Disagreements on“deviations”in tariff elimination, or those that will have to be negotiated between two parties, have slowed down talks on the RCEP. Rodolfo said the negotiating parties have already found a solution to this “deviation” problem, but this cannot be disclosed yet. Asean member-countries are asking their six trading partners to eliminate duties on 92-percent of the covered tariff lines. The six trading partners are also dragging their feet on the so-called “valueadding mechanisms,” which would effectively require them to ensure that RCEP partners would not be “unduly disadvantaged” by their trade deals with other non-RCEP members.
efficient delivery of vital services, provide the basis for geographical barriers and widen access to information, products and services to rural populations that have been excluded from technologies, including financial services, so far. Big data, or the ability to analyze huge volumes of data extract insights and act on them in close real time, could be a source of advantage for the region. To better cater to consumers, companies will need to understand increasingly granular micro segments of their markets. For the Philippines, given its expertise in businessprocess outsourcing and knowledge-process outsourcing, can provide data analytics for third parties. This goes from providing financial
institutions with sophisticated risk-management data to sharing medical records, patient data and health-care analysis. The Internet of Things refers to networks of sensors and actuators embedded in machines and other physical objects that connect with one another and the Internet. Radio-frequency identification, for example, can track products as they move through warehouses and transportation hubs to store shelves, allowing companies to tighten their supply chain to avoid stock-outs, excess inventory and losses. Global Positioning System enabled telematics can manage fleets and distribution networks in real time. The automation of knowledge
work fosters advances in artificial intelligence, machine learning, and natural user interfaces; it can go a long way toward filling gaps or empowering workers with less training to achieve greater impact. Cloud technology offers companies across the region access to secure storage and infrastructure services, basic software and enterprise systems at pay-as-yougo rates. Many small enterprises have limited access to IT services today, but cloud technology can give them new productivity tools without forcing them to tie up capital in IT systems. Given the fact that the Asean is made up of SMEs, this technology is extremely important. Advances in cloud computing will also reduce
Under the investments chapter of the proposed trade deal, some trading partners are not keen on provisions pertaining to the investor settlement-dispute mechanism and those that would affect state-owned enterprises. Another sticking point concerns the movement of natural persons. Despite these roadblocks, the completed sections of the RCEP hold promise for small businesses. These are the rules of origin section, which promises a more business-friendly treatment on goods, from small and medium enterprises (SMEs), as well as the electroniccommerce sector. “We can resolve all [hurdles] as long as we stick to an Asean-centrality mindset,” Rodolfo said. During the inaugural RCEP summit at the leaders’level, President Duterte called on ministers and negotiators to “intensify efforts in 2018 to bring RCEP to conclusion and ensure we have the necessary support to achieve this outcome.” Parties to the RCEP are conducting negotiations on the trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, ecommerce and SMEs.
that the RCEP was not forged under the Philippines’s chairmanship of the Asean, but they are more optimistic that the mega trade deal will be completed in Singapore next year. Former Tariff Commissioner George Manzano told the B usiness M irror that he had an inkling the agreement will not come through this year because of how the negotiations have been progressing. “At the rate the negotiations had been going, everyone [knew] that [it won’t come through this year]. It’s not something surprising,” Manzano said in a phone interview on Tuesday. This view was shared by University of the Philippines School of Economics Professor Ramon Clarete, who expressed confidence that the RCEP will be forged next year. Clarete also said the Philippines should continue with its reforms, particularly in helping micro, small and medium enterprises to prepare for the changes that will come with the RCEP. Manzano added that, while the RCEP is not as “ambitious” as the Trans-Pacific Partnership in terms of scope, the Philippines and other Asean countries should still continue to roll out reforms to cope with the changes it may bring. In particular, he said RCEP countries
must continue efforts to reduce nontariff barriers, which make intraregional trade “less transparent.” For the Philippines, Manzano said the government and private sector must pursue efforts that will increase market access of businessmen, which means addressing supply bottlenecks and capacity issues. On Monday ADB Economic Research and Regional Cooperation Department Principal Economist Jong Woo Kang said that, if Asean leaders are experiencing a difficult time in arriving at a consensus for RCEP, the leaders should focus on “practical goals” and common interests. Kang added this means accommodating flexibilities and “longer-term liberalization plans” that will allow members to adapt to the agreements in installments, depending on their government’s priorities. The RCEP negotiations were launched by the 10-member Asean and China, India, Japan, South Korea and New Zealand during the 21st Asean Summit and Related Summits in Phnom Penh, Cambodia, in November 2012. The 16 RCEP participating countries account for almost half of the world’s population, contribute about 30 percent of global GDP and over a quarter of world exports.
‘Not surprising’
Local economists were not surprised
the costs associated with storing and analyzing big data. These five disruptive technologies, together with several sector-specific innovations like 3D printing, infrastructure design, advanced genomics in agriculture and health care, have the potential to unleash substantial economic impact in the years to come. Within many sectors, there is large value at stake for companies that move quickly to digitize their operations and carve out competitive positions. Disruptive technologies can accelerate the region’s growth and progress—and not only for its higher-income economies. To capture opportunity, however, policymakers need to prioritize building
the backbone infrastructure and low-cost Internet access. Additional challenges include establishing a policy framework for data sharing, data-privacy protection and cybersecurity, as well as supporting SMEs in technology adoption. In conclusion, over the next years, the Asean will be one of the world’s fastest-growing consumer markets, with Asean members’ GDP forecast to rise more than fourfold to $10 trillion by 2030. The combined GDP of membernations is already significantly larger than India’s economic output and, by 2018, it will exceed that of Japan, according to US industry analyst IHS Global Insight. Let’s all be part of and contribute to the Asean 2025 Vision!
Trudeau. . .
Economists. . .
because these shipments of waste materials that have been here for three years might pose health issues in the long run, even if it is properly treated,” Casilao said. “To prove its serious commitment, we asked PM Trudeau to expedite its measure so that these mixed waste materials would be shipped back to their country for proper disposal,” Casilao added. Moreover, the Makabayan lawmaker said dumping of Canada’s trash was a “product of corruption” in the customs in connivance with its brokers. “Also, it is a product of unfair trade relationship, as our trade policy is geared to further open our market to foreign exports, especially to non-Asean members,” he said. “This is one of the effects of the Asean in terms of trade; even waste materials are exported aside from various surplus of agricultural products which gradually kill our farmers’ livelihood and agriculture industry,” he added.
Ang said there is also a need to assess the growth potential and the specific products that MSMEs receiving the assistance will manufacture, or the services they can provide. “MSMEs receiving the assistance must have a clear business plan. If these firms are only involved in trading or the provision of basic services, they should not be given funding. The government should evaluate these firms’ long-term potential,” Ang said. Manzano also said that, while the additional funding can help address the current lack of access to financing for MSMEs, the government must put in place a mechanism that will encourage repayment. He explained that MSMEs involved in agriculture production or services often have low repayment for the low-interest loans they obtained through government-owned institutions or programs. Manzano said the government can also consider helping them with capacity building, particularly in accounting and finance. He said this is one of the reasons MSMEs are not considered “bankable” by financial institutions. “Some may not have good accounting records [that] prevent the market from catering to them.” The lack of funds usually sends MSMEs to the doorsteps of loan sharks, who lend them funds at a high cost. In a 2016 working paper, the Asian Development Bank Institute (ADBI) said the interest can often reach 20 percent. In the country, the ADBI said this is known as “5-6 financing”, which means that, for every $5 borrowed over a one-week period, borrowers need to pay $6. The $1 interest rate is equivalent to an interest rate of 20 percent. This informal financing scheme also requires borrowers to pay on a daily basis, which means it is an additional burden, especially for small businesses that do not earn a lot of profits. Cai U. Ordinario
Continued from A12
Continued from A1
Russia. . .
Continued from A12
direct flight services between their capital cities. “On aviation, the Philippines and Russia discussed launching direct flights between Manila and Moscow under existing agreements,” she said. Currently, there are no direct flights between the two cities. The Russian government expressed in January its interest in cooperation in the areas of energyefficiency technology, information technology and business-process management, tourism, infrastructure, science and technology, industry development, aerospace, tourism and electronics. 2Bilateral relations between the Philippines and Russia are deemed to have improved since President Duterte announced his policy on increased cooperation with China and Russia.
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SC upholds gun ban during election period By Joel R. San Juan @jrsanjuan1573
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HE Supreme Court (SC) has upheld the constitutionality of a resolution issued by the Commission on Elections (Comelec) requiring private security personnel and bodyguards to seek authority from the poll body to possess and carry firearms during the implementation of the election gun-ban period in 2016. In an en banc decision penned by Associate Justice Benjamin Caguioa, the tribunal denied for lack of merit the petition filed by Philippine Association of Detective and Protective Agency Operators (Padpao) Region 7 Chapter seeking to declare as unconstitutional Section 2(e), Rule 3 of Comelec Resolution 10015, which provided for the rules and regulations on the ban on bearing, carrying or transporting of firearms and other deadly weapons and the employment, availment or engagement of the services of security personnel or bodyguards during the election period, more commonly referred to as the “gun ban.” Section 2 (e), on the other hand, provides for the documentary requirements for the application for authority to possess and carry firearms and deadly weapons during election period. The said provision covers private security-service providers (PSSPs), which include private security agencies (PSAs). Padpao is an association of licensed security agencies and company security forces in Region 7 under Republic Act (RA) 54873, or the
The Court takes judicial notice of the fact that, historically, Philippine elections have been marred by violence and unnecessary bloodshed, and [that] additional guidelines must be put in place to eliminate or, at least, lessen the threat. Whether the gun ban has been an effective deterrent is a different matter, which is beyond the Court’s domain.”—SC
private security agency (PSA) law. Padpao assailed the validity of Section 2(e) insofar as its application to PSAs is concerned. It asserted that the Comelec does not have any authority to promulgate rules regarding the bearing, carrying or transporting of firearms by PSAs. The group insisted that PSAs should not be required to secure authority from the Comelec, as RA 5487 already grants to PSAs and their security guards, watchmen, detectives, and security personnel the authority to possess, bear, carry and transport firearms, being necessary equipment for the conduct of its business and practice of its personnel’s profession. They further averred that the resolution violated the constitutional tenets of equal protection of laws and non-impairment of obligations of contracts as it impairs the contracts of its member-PSAs with their respective clients. The petitioner added that the Comelec contradicted itself in issuing the said resolution. It noted that while Section 1, Rule 3 of Resolution 10015, provides that PSSPs or PSAs may bear, carry or transport firearms or deadly weapons, immediately thereafter, Section 2 mandates that they must apply for the said authority. But the SC held that, “PSAs’ contracts with their clients are not affected in any manner by the requirement of having to obtain from the Comelec written authority to bear, carry and transport firearms outside of their residence or place of work and in public places, during election period.” “All that PSAs must do is to secure such authority,” the Court said. Furthermore, the Court said that the Comelec validly exercised its rulemaking authority in issuing the assailed provision of Resolution 10015. “The power of the Comelec to promulgate rules and regulations to enforce and implement elections laws is enshrined in the Constitution, “the Court held.” The SC also said that RA 5487 and its implementing rules do not prohibit other government agencies from imposing additional restrictions relating to the conduct of business by PSAs and PSSPs under special circumstances. “The Court takes judicial notice of the fact that, historically, Philippine elections have been marred by violence and unnecessary bloodshed, and [that] additional guidelines must be put in place to eliminate or, at least, lessen the threat. Whether or not the gun ban has been an effective deterrent is a different matter, which is beyond the Court’s domain,” the SC said.
Editor: Vittorio V. Vitug • Wednesday, November 15, 2017 A3
De lima to AFP: Defy Duterte directive to halt WPS projects
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By Butch Fernandez
@butchfBM
etained Sen. Leila M. de Lima on Tuesday prodded the Armed Forces to complete the construction of soldiers’ sheds in remote South China Sea (West Philippine Sea [WPS]) outposts, in defiance of President Duterte’s directive to cease building activities in the contested territories also being claimed by China. “Do not betray your people and your country in this watershed moment of our sovereignty and independence,” de Lima said in a public appeal addressed to the AFP. “Do not follow Duterte down his traitor’s path.” In a news statement e-mailed to Senate reporters, the detained lawmaker lamented the presidential directive to stop ongoing South China Sea projects was issued to Filipino troops, even as Chinese construction continues. “China keeps building, while our President behaves like a good lapdog to his Chinese masters and orders his own military to stop building sheds for troops defending the country’s sovereignty,” de Lima said. The senator suggested that “the AFP should take note that their Commander in Chief is fast becom-
ing, if he is not yet, the proverbial Manchurian Candidate.” “To the officers and men of the AFP, you have a long history of heroes and patriots,” de Lima said. “You should know treason when it rears its ugly head in your motherland.” She asserted that “there is no more treasonous conduct and act of betrayal than relinquishing our Spratlys territories in the midst of an international decision,” saying “we have every right to hold on to and defend those islands and atolls as part of our exclusive economic zone, to the exclusion of China.” De Lima added: “Since when has the AFP taken orders conveyed from the generals of the People’s Liberation Army [PLA]? Since when has our military become a mere sub-unit of the PLA, our generals forced to swallow and follow trea-
sonous orders that practically ask them to abandon their posts and betray the national interest? At the same time, the senator voiced concern that the upcoming Asean-China talks on a so-called Code of Conduct in the Spratlys “will only reinforce the Philippines’s” disadvantaged status quo position, vis-à-vis China’s unmitigated island-building and deployment of blue-water assets and coast guard in the area.” “We have already won our claims at the International Arbitral Tribunal of the Unclos [United Nations Convention on the Law of the Sea]. That victory should serve as our framework in sofar as bilateral and multilateral talks on the Spratlys is concerned,” de Lima declared. “We are backed up by international law, the Unclos, an unprecedented victory in an international case, and the support of the world’s largest democracies.” De Lima lamented that “only our Chinese lackey of a President continues to betray us and our victory, dragging with him the whole Armed Forces who still think they are following orders from a Filipino Commander in Chief, instead of a Chinese lapdog.” The senator said the AFP should be aware that there might be “no turning back from this policy of subservience or defeatism.” “It could be that the status quo of Chinese dominance and Philippines’s defaulting in the Spratlys is firmly irreversible,” de Lima added, warning that “in the future, despite
@joveemarie
By Rene Acosta
@reneacostaBM
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outheast Asia, especially the Philippines, cannot afford to have the Arab-based terror group Islamic State (IS) in its midst, owing to the destruction it has brought in Iraq and Syria, Australian Prime Minister Malcolm Turnbull said on Monday. Turnbull issued the statement during the counterterrorism capability demonstration by Filipino and Australian soldiers on Monday afternoon at Camp Aguinaldo, adding Manila and the whole of the region cannot afford to lose
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anadian Prime Minister Justin Trudeau on Tuesday said Canada is now looking forward to becoming a key trade partner of the Philippines and other members of the Association of Southeast Asian Nations. During the Asean-Canada 40th Anniversary Commemorative Summit, Trudeau said Canada wants to join the East Asia Summit (EAS) and to be Asean’s key partner for the next 50 years. “We are ready to contribute to Asean’s success in an increasingly globalized world by joining the EAS,” he said. The EAS is composed of Asean members, the Philippines, Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand, Vietnam, and Australia, China, Japan, India, New Zealand, Republic of Korea, Russia and the United States. According to Trudeau, working with the EAS would be a “tremendous economic opportunity” for Canada. “This will allow Canada to be a full, dynamic partner of Asean, a partner that can truly contribute to the organization and its mission,” he said. “Our stance on free trade puts us in an ideal position to work with you to encourage growth that benefits everyone, and that is sustainable. We believe trade can create good, well-paying jobs for the middle class and those working hard to join it,” he added.
In the future, despite Duterte, it will only have itself to blame for this most unfortunate state of affairs, where the Filipinos’ own defenders, the AFP, has allowed itself to become a mere annex of the People’s Liberation Army, as led by China’s Manchurian Candidate in the Philippines.”— de Lima
Australia boosts PHL’s counterterrorism capability to the international terror group. He assured Australia’s commitment in supporting the drive against the IS and its efforts to establish a foothold in Southeast Asia. “We cannot afford to let them have a foothold anywhere else, let alone in our region, everything is connected. Syria, Iraq, the Philippines, Indonesia, straits of Australia, we are all connected instantly,” Turnbull said. “We are in the same fight, and that is why now more than ever, the Australian Defense Force, the Armed Forces of the Philippines are working together, supporting each other,
learning from each other, fighting the fight, we cannot afford to lose,” he added. Turnbull said the fight against the threat of IS is global, noting that its fighters are interconnected as shown in the siege of Marawi City, which, he noted, was quickly ended by the Duterte administration, and which was supported by Canberra. “Many of the fighters for Islamic State that propelled in Marawi were from all over the world. They come from Indonesia or Malaysia, they’ve been to the Middle East, some of them were Arabs from the Middle East, it is a global fight,” he said.
Canada eyeing to be Asean’s key trade partner–Trudeau By Jovee Marie N. dela Cruz
Duterte, it will only have itself to blame for this most unfortunate state of affairs, where the Filipinos’ own defenders, the Armed Forces of the Philippines, has allowed itself to become a mere annex of the People’s Liberation Army, as led by China’s Manchurian Candidate in the Philippines.”
Special Assistant to the President Christopher Lawrence Go poses for a selfie with Canadian Prime Minister Justin Trudeau on the sidelines of the 31st Asean Summit and Related Meeting at the Cultural Center of the Philippines in Pasay City on Tuesday. Photo by Albert Alcain/Presidential Photo
In a news conference, Trudeau said Canada is deeply committed to multilateral institutions and “the East Asia Summit is an important one in an extremely compelling and growing region of the world.” “Over the past couple of days, I also expressed Canada’s desire to join in the East Asia Summit,” he said. By joining the EAS, he added Canada would be able to address issues outside of the Asia-Pacific Economic Cooperation (Apec). “Canada is a Pacific country, [and] being able to engage on broader issues of security, development, human rights, economic opportunity broader than
just the Apec, is very much in line with how Canada wants to ensure, engage constructively with the region and, indeed, with the world,” he added. “But there is more than just economics to discuss. The region has become the central place for discussing around Pacific issues,” Trudeau said. In 2015 the National Economic and Development Authority announced that the Canadian government will be extending P3.09 billion worth of official development assistance (ODA) grants to the Philippines until 2022. This was included in the Mutual Accountability Framework (MAF) between the governments of the Philippines and Canada signed by the two countries. The Canadian government will extend some P441.83 million worth of ODA grants to the Philippines in fiscal year 2015 to 2016. In fiscal year 2016 to 2017, the Philippines is set to receive ODA grants of around P552.29 million and another P625.93 million in fiscal year 2017 to 2018. For fiscal years 2018 to 2020, the Philippine government will receive P736.39 million a year or a total of P1.47 billion in ODA grants. The Philippines-Canada MAF’s objective is to establish the shared desire between the Philippine and Canadian governments to support broad-based and sustainable economic growth. This will be done through creating available resources in support of programs, projects and activities that will create employment, significantly reduce vulnerabilities to poverty and improve the quality of life of all Filipinos.
The Australian prime minister said the IS managed to recruit fighters around the world after it initially “developed reputation” and projected an image of invincibility through its conquest of swathes of territories in Iraq and Syria. In Marawi it was, however, stumped by the military, which, Turnbull said, Australia was proud to have supported. “We are delighted, proud to help you win that war in that city,” Turnbull said, noting how the government is working in order to ensure that such terrorism will not happen again anywhere else in the country.
Economy
A4 Wednesday, November 15, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon
PHL, New Zealand strengthen ties on geothermal devt By Lenie Lectura
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@llectura
he Philippines and New Zealand agreed on Tuesday to further strengthen ties in the power sector. The New Zealand Ministry of Foreign Affairs, represented by New Zealand Ambassador to the Philippines Ambassador David Strachan, and Energy Secretary Alfonso G. Cusi signed a memorandum of understanding (MOU) meant to strengthen the geothermal-energy cooperation between the two countries. The bilateral arrangement creates a platform for New Zealand’s geothermal industry to engage with the Philippines in accelerating and promoting geothermal development. This can be done via exchange of experiences, information and technical assistance. The MOU refreshes the arrangement initially signed in 2012. The New Zealand has had a long history of partnership with the Philippines on geothermal energy dating back to its initial development in the 1970s. The MOU signing was witnessed by New Zealand Prime Minister Jacinda Ardern. She also witnessed two more MOU signings between Tourism New Zealand’s Chief Executive Stephen England-Hall and Philippine Airlines CEO Jaime Bautista. The third MOU was signed between Metservice’s Chief Executive Peter Lennox and Pagasa’s Deputy Administrator Dr. Flaviana Hilario. In 2012 the Department of Energy (DOE) and New Zealand Cooperation on Geothermal Energy inked an arrangement that took effect for five years, the objective of which is to enhance geothermal-energy cooperation between the two countries through government-level collaboration and the facilitation of private-sector activity. The cooperation included an establishment of a geothermal institute in the Philippines as an extension of the Geothermal Institute in New Zealand, and grant for short training courses for DOE personnel.
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NG gross borrowings rose 34.13% to ₧623.779B as of end-Sept–BTr By Rea Cu
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@ReaCuBM
he national government has reported gross borrowings amounting to P623.779 billion as of end-September, representing a 34.13-percent growth compared to the recorded P465.036 billion in the same period for 2016, data from the Bureau of the Treasury (BTr) showed.
BTr data showed that government had made gross borrowings amounting to P623.779 billion during the first nine months of the year. This showed an expansion of 34.13 percent compared to the gross borrowings made in the same period for 2016. Broken down, gross borrowings made
by the government to offshore accounts accounted for P160.135 billion of the total, while those that were made to local institutions accounted for P463.644 billion for the period. Borrowings from the global bonds exchange that was made by the government was funded in February amount-
Asean urges UNFCCC to enhance support to climate-resilient cities By Jasper Emmanuel Y. Arcalas @jearcalas
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HE Association of Southeast Asian Nations is urging the developed country parties of the United Na-
tions Framework Convention on Climate Change (UNFCCC) to improve the support they are pouring to create climateresilient cities in the region. The 10-nation Asean released on Tuesday its joint statement on climate change for the 23rd Session of the Conference of Parties (COP 23) to the UNFCCC. “The need to issue a joint statement by the A sean member-states is to articulate the Asean’s common concerns and the need at the UNFCCC COP 23,” the joint statement read. “[The Asean] calls upon developed country parties to enhance support [to] the ongoing efforts on promoting low-carbon and climateresilient Asean cities,” it added. The Asean also reminded the developed country parties to comply with their commitment of providing $100 billion to developing countries by 2020. “[The Asean] calls upon developed-country parties to honor and fulfill their existing mitigation commitments that include financial support amounting to $100 billion annually under the convention,” it said. In 2010 the developedcountry parties of the UNFCCC promised to scale-up the level of financial support provided and mobilized to developing countries. The financial assistance seeks to help developing countries cope with the rising impacts of climate change. A document from the UNFCCC indicated that the developed countries have already poured in an aggregate value of $62 billion in 2014 as part of its commitment. The Asean also urged the Green Climate Fund to facilitate and promote direct access to the fund for the Asean and other developingcountry parties. A sea n member-st ates also vowed to strengthen its rapid-response capacity on climate-change adaptation and disaster risk reduction under their agreement on Disaster Management and Emergency Response. “[The Asean] calls upon developed country to parties to provide the means of implementation to Asean in order to enhance sustainable management, as well as conservation of biodiversity, ecosystems and landscapes,” they said.
ing to P99.566 billion, which comprised the bulk of external borrowings for the period. While the payment of fixed-rate Treasury bonds took most of the chunk of domestic borrowings amounting to P229.820 billion. External gross borrowings for the period showed a 15-percent increase from the recorded P139.229 billion in the same period for 2016, while domestic borrowings also expanded by 42.3 percent from the recorded P325.807 billion in 2016. For the month of September alone, the government has borrowed a combined P42.501 billion, which showed a contraction of 58.48 percent from the P102.358 billion recorded in the same month for 2016. Broken down, external gross borrowings for the month totaled P5.501 billion, while domestic borrowings took most at P37 billion. This showed a 137.7-percent expansion from the
₧889.72B
The amount which the Duterte administration intend to borrow for 2018, taking into account a wider deficit ceiling of 3 percent P2.314-billion external borrowings for September 2016, and a contraction of 63 percent from the domestic borrowings of P100 billion for 2016, respectively. The Duterte administration earlier bared its plan to borrow around P889.72 billion for 2018, taking into account a wider deficit ceiling of 3 percent. The government’s economic leaders pointed out that it is eyeing a borrowing mix of 80:20, with 80 percent being sourced from local markets and 20 percent from foreign entities.
Groups to Asean: Reject US coal agenda By Jonathan L. Mayuga @jonlmayuga
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ivil-society organizations across Southeast Asia on Tuesday denounced what it called the obvious “collusion” among leaders of Association of Southeast Asian nations, East Asia and the United States, in pushing for the coal agenda in the region. In a joint statement issued in time for the country’s hosting of the Asean meetings, the Center for Energy, Ecology and Development, GreenID Vietnam, Philippine Movement for Climate Justice, Sanlakas and Walhi Indonesia said Southeast Asia remains highly vulnerable to climate change, the effects of which have inflicted damage and continue to pose threats to a very climate-vulnerable region. “Yearly, Southeast Asia is hit by extreme natural disasters, such as flooding due to sea-level rise, droughts and tropical cyclones influenced by monsoons,” the news statement read. Southeast Asia has taken on the reputation of a hub of economic growth, especially with its gross domestic performance remaining resilient throughout the years. Currently, the sixth-largest economy in the world, the Asean is projected to become the fourth-largest economic bloc by 2030. However, despite this economic trajectory, the Asean remains to be a home to many of the world’s population that live in extreme poverty. The region is dominated by low or lower middle-income nations. One hundred twenty-seven million to 130 million Southeast Asian people continue to have no access to electricity—a situation that both affects these people’s access to basic rights and services and their ability to rise above their poverty.
Coal-investment push
The groups lamented that huge corporations and developed countries like the US and Japan have zeroed in on the region as an economy ripe enough for hosting a number of their investments. “Most striking of these investments being peddled in the region are investments on the expansion of coal—an energy source long called out by environmentalists and affected communities as the dirtiest, most destructive energy source there is.” Despite the realities of destructive coal, the Asean, the US and East Asian leaders have made efforts in making coal more palatable, they alleged. “We denounce these coal policies as an explicit and dangerous denial of the climate effects of coal and the urgency of responding to the issue of climate change—a denial which is poised to cost more lives from the people of a climate-vulnerable Asean, in service of the few corporate interests dominating the countries that insist on the proliferation of destructive and outdated coal,” the statement added. Currently, Asean leaders, sanctioning the increase of coal use in their local region and welcoming more coal investments from across the globe, have branded coal as the key to further Asean’s economic growth. They have gone so far as to initiate a program to “enhance the image of coal” in the Asean Economic Community Blueprint for 2025, they added. Meanwhile, the US and East Asian countries, like Japan, ride on the Asean- coal frenzy by promoting more coal projects within the region, echoing claims made by the region’s leaders that coal is the key to power development. Corporations in the Donald J. Trump-led US have been bent to encourage more coal mining on US lands owned by their federal government as part of an aggressive push to invigorate the struggling American
coal industry and more broadly exploit commercial opportunities on public lands, they said. “Coal extracted from these lands are to be marketed as ‘cheap and reliable’ energy for ‘power hungry’ countries, such as those in Southeast Asia,” the statement said. On the other hand, corporations in a Shinzo Abeled Japan—a country recently shaken by energy insecurity brought by nuclear-power failure—have successfully pushed for the prime minister to promote coal as the succeeding primary energy source within and outside of the country. Supporting the US’s Asian-coal push and building on its reputation as a technologically advanced society, Japan has recently peddled its clean-coal technology to Asean countries.
‘Clean coal’ myth
The group added there’s no such thing as cleancoal technology. Coal-affected communities, environmental advocates, people’s movements and organizations, they said, have repeatedly debunked the myth of coal as a “cheap,” “reliable” and “clean” energy source. “We stress on all leaders pushing for coal that coal comes primarily with the price of people’s health, life and livelihoods,” they added. The high amount of carbon emissions that it releases shoots up the atmosphere’s temperature and causes global warming, which has posed grave threats to communities, such as those in the Asean region. Recent studies project that a 4.8 degrees Celsius average temperature could result to a 70-centimeter rise in sea level by 2100 in Indonesia, the Philippines, Thailand and Vietnam, resulting in major problems for many of Asean’s largest coastal cities, such as Jakarta, Bangkok and Manila. Millions may have to be resettled and massive expenditures incurred to protect the coastal cities. Projections of economic losses include a decline up to 50-percent of rice yield potential by 2100 and a loss of 6.7 percent of GDP each year by 2100, among many other impacts like 50-percent drop of fish catch by 2050, and the continuation of intense storms and extreme droughts. “And for all its disastrous effects, coal has never been relied upon by the energy poor of Southeast Asia to provide the electricity they need—coal prioritizes power for huge industries rather than households,” they said. “The process for capturing the carbon from coal’s emissions is so complex and energy intensive that it results to sapping more than 20 percent of the electricity that the plant is supposed to produce for consumers,” the statement added. Because of the complicated process involved in this technology, clean coal is currently too expensive, especially for the poorer countries in Asean, and will take years before reaching a viable economic price. They argued that even at a competitive price, clean coal is inefficient in reducing the emissions that traditional coal-combustion releases. Meanwhile, clean coal’s air pollution-control technologies, while promising to capture hazardous air pollutants released by coal, are merely stored in ash dumps or unlined waste ponds that poison surface and groundwater. These setbacks of “clean coal” do not even begin to account for the environmental degradation caused by all coal—whether “clean” or not—during the rest of the coal life cycle. Even “clean” coal implies environmental and social costs, taking into account the effects of coal mining, preparation and transport.
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Editor: Jun B. Vallecera • Wednesday, November 15, 2017
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Economist links manufacturing to more inclusive growth, poverty alleviation
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upporting the expansion of manufacturing is key to achieving sustained and inclusive economic development and to eradicating abject poverty in the Philippines, according to an eminent economist and academic.
Raul V. Fabella, national scientist and professor emeritus at the University of the Philippines School of Economics, said the contribution of manufacturing and industry to local output or the GDP, have declined in recent years, coinciding with developmental slowdown and unabated
poverty in the country. Referencing data from the World Bank for the period 19862009, Fabella noted that manufacturing share fell from 25 percent in 1986 to 19 percent in 2009, while industry share fell from 35 percent to 29 percent. In contrast, services share
rose from 40 percent in 1986 to 57 percent in 2009. The Philippines’s manufacturing sector has been bucking the trend observed among the least developed countries (LDCs) that are fast catching up with more developed peers, and is following the pattern observed in mature economies, Fabella said. He said “catch-up LDCs” tend to post gains in the shares of manufacturing and industrial sectors, while recording either losses or gains in the share of the service sectors. On the other hand, mature economies like South Korea manifest loss in the shares of industry and manufacturing, even as they mark gains or flat growth in services. The Philippines “mimics mature economy trends,” Fabella observed
during a recent presentation on the topic inclusive capitalism in lowincome economies. Comparing Philippine performance with those of fast-rising developing economies in Asia and those of developed nations from 1986 to 1996, Fabella showed that emerging economies during that period demonstrated big spikes in the shares of manufacturing and industry in relation to GDP. Indonesia, Malaysia, Thailand, and China all showed robust positive growth for manufacturing and industry during the 10-year period; in contrast, the shares of these two sectors in the Philippines contracted, while services posted healthy expansion during the period. In the same span of time, South
Korea, Germany and the United States registered growth surges in services share, while showing deep cuts in the shares of industry and manufacturing, Fabella added. In terms of poverty reduction, meanwhile, Fabella cited figures showing how poverty rates in the Philippines were much lower than either China or Vietnam circa 1990, but that by around 2010, China and Vietnam had drastically lowered their poverty rates, while poverty in the Philippines remained high, having gone down only slightly. The economist stressed that institutional and policy changes are needed to stimulate Philippine economic growth and significantly slash high poverty rates. He suggests “embracing rather than fearing a weak peso to
Real-time fund transfers set for Q1 next year By Bianca Cuaresma
@BcuaresmaBM
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eal-time electronic-fund transfers at any time of the day should be available for financial consumers by early next year as the Bangko Sentral ng Pilipinas (BSP) prepares to launch Instapay in the first quarter. Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. confirmed the launch of InstaPay service within the first three months next year and comes on the heels of the PESONet or the Philippine EFT System and Operations Network, the first automated clearinghouse under the National Retail Payment System (NRPS). InstaPay, the second automated clearinghouse under the same initiative, is focused on facilitating low value, real-time electronic-fund transfers by enabling the payer to send instructions to his financial institution to transfer funds held in his account to the account of a payee, who then receives the full value immediately. The service was seen available 24/7. Credit to account of a beneficiary is instant. The BSP said they are now finalizing the guarantee of the new system, as a guarantee fund is needed to answer for the clearing straight away. T he schedu led launch of
InstaPay next year is part of the BSP’s NRPS initiative launched in December 2015. The initiative aims to move 20 percent of the total transactions in the country from cash and checks at the moment and into the digital sphere by 2020. In 2014 a study by Better Than Cash Alliance said only about 1 percent of all transactions in the Philippines was digital. Early this year, the BSP said InstaPay would facilitate small value payments that will be especially useful for paying for toll fees and tickets, and for e-commerce that enables micro, small and medium enterprises. The BSP further said payment products can be built on InstaPay, enabling merchants to accept digital payments from both e-money and bank accounts even without point-of-sale terminals.
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BSP relaunches merger program for rural lenders
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Maximizing resources to reach people in need President Roberto B. Tan of the Philippine Deposit
Insurance Corp. is the keynote speaker during the 60th Charter Anniversary of the Rural Bankers Association of the Philippines (RBAP) on October 24. Tan emphasizes the rural banks’ crucial role in providing much-needed financial services to the countryside, and the importance of consolidation and innovation for the rural banks to become stronger and more competitive. He also encourages them to take advantage of the benefits provided by the Consolidation Program for Rural Banks.
The US yield curve is flattening and here’s why it matters f you haven’t been paying attention to the persistent flattening of the United States yield curve, you’re way behind it. Peter Cecchini, chief market strategist at Cantor Fitzgerald, calls it “the most important thing to have a clear idea about now.” Billionaire fund manager Bill Gross says we’re rapidly approaching a point at which the trend will induce an economic slowdown. Others claim it’s only natural, with the Federal Reserve (the Fed) raising short-term interest rates in the face of stubbornly low inflation. To put it simply, the Treasury yield curve measures the spread between short- and longterm debt issued by the US government. It’s the extra compensation that investors demand to lock away their money for an extended period. No matter which theory of flattening you subscribe to, the world’s biggest bond market is sending a signal that traders can’t ignore. The longer the trend continues, the more likely its effects could spread to bank earnings and the real economy, while, at the same time, it would limit the Fed’s ability to respond when these risks emerge. To get a sense of just how dramatic this trend has been, here’s a look at a handful of curve measures now versus the start of 2017. In trading on Monday, they were all close to the flattest levels in a decade. From two years to 10 years: 72 basis points,
sustain investment-led growth.” He also calls for the scaling up of the quantity and quality of Philippine infrastructure under the government’s “Build, Build, Build” program, and seeks the lowering of the cost of power, including by connecting the Visayas and Mindanao grids to give substantial new capacity to the Visayas region. His other recommendations include for the government to amend the Public Service Act and lift the constitutional limits to foreign ownership, and continue its strategic retreat to its core competence by, for example, privatizing the Metro Rail Transit and Ninoy Aquino International Airport 1 and 3. He also recommends the implementation of the retail competition and open access
down from 125; From two years to 30 years: 119 basis points, down from 187; From five years to 10 years: 33 basis points, down from 52; From five years to 30 years: 80 basis points, down from 114. Everyone has their favorite theory for why this is happening and what it means for the economy and the markets, and all of them likely play a part so here’s a breakdown of each one: The simplest reason for the flattening comes from looking separately at what’s going on with short rates, the most sensitive to Fed policy expectations, and longer-term yields, which take their cues from the outlook for inflation and economic growth. After years of balking at tightening monetary policy for fear of disrupting markets, Fed officials finally stuck to their plan in 2017, earning bond traders’ trust in the process. The two-year Treasury yield is at the highest level since 2008, as investors prepare for a rate hike in December, and begin to build up expectations for further increases next year. With short-end yields climbing, the curve historically tends to flatten as longer-term rates rise more slowly. But since the start of 2017, 10-year and 30-year yields have actually declined. And the culprit behind that appears
to be stubbornly muted inflation. Even with US jobs growth humming along and unemployment at the lowest level since 2000, the Fed’s preferred gauge of price growth was running at just 1.6 percent in September. It fleetingly rose above the central bank’s 2-percent target at the start of the year, but has since struggled. This all raises the specter of what some call a potential “policy mistake” from the Fed. That narrative “has ruffled a few feathers,” BMO Capital Markets strategists Ian Lyngen and Aaron Kohli wrote in a note last week. “Growth is moving at a solid clip and the labor market is ostensibly at full employment—so why aren’t we in an environment with a steeper curve and higher yields?” Their conclusion is the Fed has built up a reputation as an inflation fighter. That means going forward, traders should expect a lower yield range for 10- and 30-year Treasuries than they might have otherwise. Another factor pinning down longer-term yields: forced buyers, both in the US and elsewhere. Asset-liability managers like insurance companies and pension funds are always seeking duration, and 30-year Treasuries are among the best ways to get it. Combine that appetite with increased demand from passive mutual fund giants like Vanguard and BlackRock, and
you’ve got a recipe for a sustained bid on the long end of the Treasury curve. If that wasn’t enough, Treasury recently announced that it wants to focus increased issuance in bills and shorter-dated coupon maturities, like two- and five-year notes. That creates relative scarcity at the long end of the curve and a premium at the short end to absorb the extra supply. Some see it as no coincidence that on the day of the Treasury’s refunding announcement, the yield curve from five to 30 years flattened by the most in two weeks. “For all the discussions about the yield curve these days, one factor that is really driving positioning in the Treasury market is the expectation of future Treasury issuance,” Ben Emons, head of credit portfolio management at Intellectus Partners, wrote in a note. To Cantor Fitzgerald’s Cecchini, those looking only within the US to understand the yield curve are missing the bigger picture. The global bond market is still awash in central bank purchases, he said, most notably from the Bank of Japan and the European Central Bank. And over the course of the past few years, the yield spread between 10-year Treasuries and German bunds has grown wider, creating an opportunity for overseas investors to add US debt. Bloomberg News
he government launched anew the rescue program for problematic rural lenders under updated terms that allow them to consolidate or merge under more flexible terms until 2019. The Philippine Deposit Insurance Corp. (PDIC) said the program will run until October 29, 2019, consistent with the goal of putting more resilient rural lenders and a less fragmented system by encouraging mergers and consolidation. The participating entities are the PDIC, the Bangko Sentral ng Pilipinas (BSP) and the Land Bank of the Philippines. The new Consolidated Program for Rural Banks (CPRB) seeks to boost and enhance rural bank viability and financial stability via a consolidation, including lowering the number of banks involved in a proposed merger. Regulations now allow less than five banks to consolidate, provided the resulting bank has capital adequacy ratio of 12 percent and combined unimpaired capital of at least P100 million. In the old CPRB that expired in August, merging lenders numbering four or fewer require a favorable endorsement from the Countryside Financial Institutions Enhancement Program Technical Committee. Earlier, Deputy BSP Governor for the Supervision and Examination Sector, Chuchi Fonacier, said three proposed consolidations seeking approval have been filed at this point. Fonacier said the applications are in different stages of completion, although one is in the “advanced” phase and in the process of gathering the documents for the formation of their new umbrella bank. The BSP said approval of the proposed consolidation could come early in 2018. Bianca Cuaresma
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Wednesday, November 15, 2017
The World BusinessMirror
Rise in teen suicide, social media coincide; is there link?
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HICAGO—An increase in suicide rates among United States teens occurred at the same time social-media use surged and a new analysis suggests there may be a link.
Suicide rates for teens rose between 2010 and 2015 after they had declined for nearly two decades, according to data from the federal Centers for Disease Control (CDC) and Prevention. Why the rates went up isn’t known. The study doesn’t answer the question, but it suggests that one factor could be rising socialmedia use. Recent teen suicides have been blamed on cyberbullying, and social-media posts depicting “perfect” lives may be taking a toll on teens’ mental health, researchers say. “A f t e r ho u r s o f s c r o l l i n g through Instagram feeds, I just
feel worse about myself because I feel lef t out,” sa id C a it l i n Hearty, a 17-year-old Littleton, Colorado, high-school senior who helped organize an off line campaign last month after several local teen suicides. “No one posts the bad things they’re going through,” said Chloe Schilling, also 17, who helped with the campaign, in which hundreds of teens agreed not to use the Internet or social media for one month. The study’s authors looked at CDC suicide reports from 20092015 and results of two surveys given to US high-school students to measure attitudes, behaviors
briefs Quake kills 430 in Iranian border rebuilt after war TEHR AN, Iran—Rescuers dug with their bare hands on Monday through the debris of buildings felled by an earthquake that killed more than 430 people in the border region of Iran and Iraq, with nearly all the casualties occurring in an area rebuilt after their ruinous 1980s war. The 7.3-magnitude earthquake struck last Sunday at 9:48 p.m. Iran time, just as people were going to bed. The worst damage appeared to be in the Kurdish town of Sarpol-e-Zahab in the western Iranian province of Kermanshah, which sits in the Zagros Mountains that divide the two countries. Residents fled without time to grab their possessions as apartment complexes collapsed into rubble. Outside walls of some buildings were sheared off, power and water lines were severed, and telephone service was disrupted. Residents dug frantically through wrecked buildings for survivors as they wailed. Firefighters from Tehran joined other rescuers in the desperate search, using dogs to inspect the rubble. AP
Seoul: North Koreans fired 40 shots at defector, hit him with 5 SEOUL, South Korea—Four North Korean soldiers fired 40 rounds at a comrade fleeing into South Korea and hit him five times in the first shooting at the jointly controlled area of the heavily fortified border since 1984, the South’s military said on Tuesday. South Korean soldiers did not fire their weapons in response, but Monday’s incident occurred at a time of high animosity over North Korea’s nuclear program, and Pyongyang has expressed intense anger over past defections. The soldier is being treated at a South Korean hospital after a five-hour operation for the gunshot wounds he suffered during his escape across the Joint Security Area. His personal details and motive for defection are unknown, and his exact medical condition is unclear. AP
New sex assault allegation hits Moore; he calls it false WASHINGTON—A second woman emerged on Monday to accuse Roy Moore of sexually assaulting her as a teenager in the late-1970s, this time in a locked car, further roiling the Alabama Republican’s candidacy for an open Senate seat. Moore strongly denied it, even as his own party’s leaders intensified their efforts to push him out of the race. Senate Majority Leader Mitch McConnell took a remarkably personal swipe at his party’s candidate for a Senate seat the GOP cannot afford to lose. “I believe the women,” he said, marking an intensified effort by leaders to ditch Moore before a December 12 special election that has swung from an assured GOP victory to one that Democrats could conceivably swipe. Moore abruptly called a news conference in Gallant, Alabama, after a tearful Beverly Young Nelson’s detailed the new allegations to reporters in New York. “I can tell you without hesitation this is absolutely false. I never did what she said I did. I don’t even know the woman,” Moore said. AP
and interests. About half a million teens ages 13 to 18 were involved. They were asked about use of electronic devices, social media, print media, television and time spent with friends. Questions about mood included frequency of feeling hopeless and considering or attempting suicide. The researchers didn’t examine circumstances surrounding individual suicides. Dr. Christine Moutier, chief medical officer at the American Foundation for Suicide Prevention, said the study provides weak evidence for a popular theory and that many factors influence teen suicide. The study was published on Tuesday in the journal Clinical Psychological Science. Data highlighted in the study include: n Teens’ use of electronic devices, including smartphones for at least five hours daily more than doubled, from 8 percent in 2009 to 19 percent in 2015. These teens were 70 percent more likely to have suicidal thoughts or actions than
those who reported one hour of daily use. n In 2015 36 percent of all teens reported feeling desperately sad or hopeless, or thinking about, planning or attempting suicide, up from 32 percent in 2009. For girls, the rates were higher—45 percent in 2015 versus 40 percent in 2009. n In 2009 58 percent of 12th grade girls used social media every day or nearly every day; by 2015 87 percent used social media every day or nearly every day. They were 14 percent more likely to be depressed than those who used social media less frequently. “We need to stop thinking of smartphones as harmless,” said study author Jean Twenge, a psychology professor at San Diego State University who studies generational trends. “There’s a tendency to say, ‘Oh, teens are just communicating with their friends.’ Monitoring kids’ use of smartphones and social media is important, and so is setting reasonable limits,” she added. AP
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New guidelines see rise in US adults with high blood pressure
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NAHEIM, California—New guidelines lower the threshold for high blood pressure, adding 30 million Americans to those who have the condition, which now plagues nearly half of United States adults. High pressure, which for decades has been a top reading of at least 140 or a bottom one of 90, drops to 130 over 80 in advice announced on Monday by a dozen medical groups. The change means an additional 14 percent of US adults have the problem, but only an additional 2 percent will need medication right away; the rest should try healthier lifestyles, which get much stronger emphasis in the new advice. Poor diets, lack of exercise and other bad habits cause 90 percent of high blood pressure. “I have no doubt there will be controversy. I’m sure there will be people saying ‘We have a hard enough time getting to 140,’” said Dr. Paul Whelton, a Tulane University physician who led the guidelines panel. But the risk for heart disease, stroke and other problems drops as blood pressure improves, and the new advice “is more honest” about how many people have a problem, he said. Currently, only half of Americans with high blood pressure have it under control. The upper threshold for high blood pressure has been 140 since 1993, but a major study two years ago found that heart risks were much lower in people who aimed for 120. Canada and Australia lowered their cutoff to that; Europe is still at 140 but is due to revise its guidance next year.
The guidelines were announced on Monday at an American Heart Association conference in Anaheim.
What the changes mean
The guidelines set new categories and get rid of “prehypertension:” n Normal: Under 120 over 80 n Elevated: Top number 120-129 and bottom less than 80 n Stage 1: Top of 130-139 or bottom of 80-89 n Stage 2: Top at least 140 or bottom at least 90 That means 46 percent of US adults have high pressure (stages 1 or 2) versus 32 percent under the old levels. How common it is will roughly triple in men under 45, to 30 percent, and double in women of that age, to 19 percent. For people over 65, the guidelines undo a controversial tweak made three years ago to relax standards and not start medicines unless the top number was over 150. Now, everyone that old should be treated if the top number is over 130 unless they’re too frail or have conditions that make it unwise. “The evidence with this is so solid, so convincing, that it’s hard to argue with the targets,” said Dr. Jackson Wright, a guidelines panel member from University Hospitals Cleveland Medical Center. Older people “have a 35-to-50-fold higher risk of dying of a heart attack or stroke compared to younger people.” AP
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Protesters jeer as Trump team promotes coal at climate talks
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O N N , G e r m a n y — T h e Tr u m p administration made its debut at a United Nations conference on climate change on Monday by giving a fullthroated defense of fossil fuels and nuclear energy as answers to driving down global greenhouse-gas emissions. The forum—the only official appearance by the United States delegation during the annual two-week climate gathering of nearly 200 nations—illustrated how sharply the administration’s views are at odds with those of many key participants in the climate negotiations. George D. Banks, special adviser to President Donald J. Trump on international energy issues, led a panel with top US energy executives. “Without question, fossil fuels will continue to be used, and we would argue that it’s in the global interest to make sure when fossil fuels are used that they be as clean and efficient as possible,” Banks said. “This panel is controversial only if we chose to bury our heads in the sand.” But even before the Trump team could make its case, the panel was disrupted for more than 10 minutes by scores of chanting and singing demonstrators. The protesters then walked out, leaving the room half empty. Throughout the remainder of the presentation, audience members shouted down and mocked White House officials who attempted to explain away Trump’s stated view
that global warming is a hoax. It was a rude reception for the Trump administration at the first major UN climate conference since Trump took office, and declared that the US would withdraw from the Paris climate accord signed by more than 195 nations in 2015. Trump has filled top environmental posts with officials who have expressed doubt about established climate science, including studies published by numerous federal agencies. Trump, who ran on a pledge to revive the US coal industry and whose Cabinet includes a number of prominent oil and gas enthusiasts, sent his team here with a clear message—that extracting and using significant amounts of oil, gas and coal would be a priority of the administration. The US presentation came the same day that a new study showed that emissions were rising worldwide after three years on a plateau. Researchers said the emissions growth was driven largely by increased burning of coal in China and India. “The question is not if we will continue to use coal, but how,” said Holly Krutka, vice president of coal generation and emissions technologies at Peabody Energy. Michael Bloomberg, a former New York mayor who has spent tens of millions of dollars on a campaign to shut down coal plants, said, “Promoting coal at a climate summit is like promoting tobacco at a cancer summit.” New York Times News Service
Wednesday, November 15, 2017
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US Senate bill would hike taxes for 13.8M W
ASHINGTON—Promoted as needed relief for the middle class, the Senate Republican tax overhaul actually would increase taxes for some 13.8 million moderate-income American households, a nonpartisan analysis showed on Monday. The assessment by Congress’s Joint Committee on Taxation emerged as the Senate’s ta xwriting committee began wading through the measure, working toward the first major revamp of the tax system in some 30 years. Barging into the carefully calibrated work that House and Senate Republicans have done, President
Donald J. Trump called for a steeper tax cut for wealthy Americans, and pressed GOP leaders to add a contentious health-care change to the already-complex mix. Trump’s latest tweet injected a dose of uncertainty into the process as the Republicans try to deliver on his top legislative priority. He commended GOP leaders for
getting the tax legislation closer to passage in recent weeks and then said, “Cut top rate to 35% w/all of the rest going to middle income cuts?” That puts him at odds with the House legislation that leaves the top rate at 39.6 percent and the Senate bill as written, with the top rate at 38.5 percent. Trump also said, “Now how about ending the unfair and highly unpopular individual mandate in [Obama]care and reducing taxes even further?” Overall, the legislation would deeply cut corporate taxes, double the standard deduction used by most Americans, and limit or repeal completely the federal deduction for state and local property, income and sales taxes. It carries high political stakes for Trump and Republican leaders in Congress, who view passage of tax cuts as critical to the GOP
preserving its majorities at the polls next year. With few votes to spare, Republican leaders hope to finalize a tax overhaul by Christmas, and send the legislation to Trump for his signature. The key House leader on the effort, Rep. Kevin Brady, said he’s “very confident” that Republicans “do and will have the votes to pass” the measure this week. Brady, chairman of the House Ways and Means Committee, said he doesn’t expect major changes to the bill as it moves to a final vote in the House. Still, he added Trump’s call for removing the requirement to have health insurance as part of the tax agreement “remains under consideration.” Trump and the Republicans have promoted the legislation as a boon to the middle class, bringing tax relief to people with moderate incomes, and boosting the economy to create new jobs. “This bill is not a massive tax cut for the wealthy.... This is not a big giveaway to corporations,” Sen. Orrin Hatch, Republican-Utah, chairman of the Senate Finance Committee, insisted as the panel had its first day of debate on the Senate measure. Hatch also downplayed the analysis by congressional tax experts showing a tax increase for several million US households under the Senate proposal. Hatch said “a relatively small minority of taxpayers could see a slight increase in their taxes.” The committee’s senior Democrat, Sen. Ron Wyden of Oregon, said the legislation has become “a massive handout to multinational corporations and a bonanza for tax cheats and powerful political donors.” The analysis found that the Senate measure would actually increase taxes in 2019 for 13.8 million households earning less than $200,000 a year. That group, about 10 percent of all US taxpayers, would face tax increases of $100 to $500 in 2019. There also would be increases greater than $500 for a number of taxpayers, especially those with incomes between $75,000 and $200,000. By 2025 21.4 million households would have steeper tax bills. The analysts previously found a similar magnitude of tax increases under the House bill. Neither bill includes a repeal of the so-called individual mandate of Barack Obama’s Affordable Care Act, the requirement that Americans get health insurance or face a penalty. Several top Republicans have warned that including the provision, as Trump wants, would draw opposition and make passage tougher. A key moderate Republican in the Senate said it’s too early to say whether including repeal of the insurance mandate would cost her vote on the tax bill. “I’m going to see what the Finance Committee winds up with and what we do on the [Senate] f loor,” Sen. Susan Col lins of Maine said. Collins did say she opposed Trump’s idea of reducing the top tax rate for the wealthiest earners. A mong the big gest d if ferences in the two bills that have emerged: The House bill allows homeow ners to deduct up to $10,000 in property taxes, while the Senate proposal unveiled by GOP leaders last week eliminates the entire deduction. Both versions would eliminate deductions for state and local income taxes and sales taxes. AP
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AseanWednesday
Wednesday, November 15, 2017 • Editor: Max V. de Leon
BusinessMirror
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Trudeau urges just solution to Rohingya crisis
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anadian Prime Minister Justin Trudeau brought up his country’s concerns about human rights and extrajudicial killings in the Philippines when he met with President Duterte, whose “war on drugs” has earned widespread condemnation for leaving thousands of suspected drug pushers and users dead. Trudeau told a news conference he mentioned the issue to Duterte during their conversation on Tuesday before Canada’s summit with the 10-member Association of Southeast Asian Nations. He said he impressed on Duterte the need for respect for the rule of law and offered Canada’s support and help. Duterte, he added, was receptive to his comments. US President Donald J. Trump did not publicly take Duterte to task for the drug crackdown and avoided questions about whether he’d raise human-rights concerns with the Filipino leader during a private meeting. Trudeau also told Southeast Asian heads of state, including Myanmar’s leader, Aung San Suu Kyi, that he’s asked his special envoy to engage in diplomatic efforts to find ways in which Canada can help resolve the Rohingya crisis.
He called on Tuesday for a “sustainable and just solution” to the ongoing crisis, stressing the importance of recommendations and the final report of the advisory commission headed by former United Nations Secretary-General Kofi Annan to help chart the path toward a peaceful resolution. More than 600,000 Rohingya Muslims have fled to neighboring Bangladesh since August, when their homes were torched by Buddhist mobs and soldiers. Although Rohingya Muslims have lived in Myanmar for decades, the country’s Buddhist majority still sees them as invaders from Bangladesh. The government denies them basic rights, and the United Nations has called them one of the most persecuted minorities in the world. Trudeau told the Asean-Canada summit that his country will
Asean syncs connectivity plan with Xi’s Belt and Road By Elijah Felice E. Rosales @alyasjah
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Myanmar State Counselor Aung San Suu Kyi (left) shakes hands with President Duterte before the opening ceremony of the 31st Asean Summit in Manila on Monday. AP
continue to support humanitarian and political efforts and will continue to work with Myanmar and Bangladesh to allow for the return of displaced people. Suu Kyi has assured other Southeast Asian nations that her government is implementing the recommendations of a commission led by
Annan on the situation in Rakhine state, where more than half a million Rohingya Muslims have fled to neighboring Bangladesh. Presidential Spokesman Harry L. Roque also said Suu Kyi pledged on Monday that repatriation of the displaced people would begin within three weeks after Myanmar signed
a memorandum of understanding with Bangladesh. The memorandum was signed on October 24. He added Suu Kyi gave no further details. Roque added at least two Asean leaders brought up the Rohingya issue on Monday. Roque said Suu Kyi did not refer to the Rohingya by name. AP
Trump’s handshake challenge: He grimaces, grins, grips
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E grimaced. He grinned. He gripped. President Dona ld J. Trump is known for his long, at times aggressive, handshakes with world leaders. But at an international summit in the Philippines on Monday, he struggled briefly with a different kind of handshake. The Association of Southeast Asian Nation conference in Manila kicked off with a group photo of world leaders. And then the announcer intoned that it was time for the leaders to take part in a “traditional” Asean handshake. It’s a cross-body exercise in which leaders extend their right arms over their left and shake the opposite hands of those on either side. The announcer’s instructions appeared for a moment to baffle Trump, who, at first, simply crossed his hands in front of him. Then, looking around, Trump turned to the leaders who flanked him—Vietnamese Prime Minister Nguyen Xuan Phuc to his right, President Duterte to his left—and simply extended his arms outward. That wasn’t quite right, either. Trump laughed, crossed his arms and reached to the correct sides. He grimaced at first, particularly when bending down to reach the hands of the shorter leaders on either side. And then, with an exaggerated smile, he vigorously gripped their hands. Trump ended his swing through Asia hailing progress in advancing his goal of reducing the United States trade deficit. Trump took off from Manila on Air Force One after two days of
‘Tremendously successful’
U.S. President Donald J. Trump (center) reacts as he does the “Asean-way handshake” with Vietnamese Prime Minister Nguyen Xuan Phuc (left) and President Duterte on stage during the opening ceremony at the Asean summit at the Cultural Center of the Philippines on Monday in Manila. Trump initially did the handshake incorrectly. Trump is on a five-country trip through Asia traveling to Japan, South Korea, China, Vietnam and the Philippines. AP
meetings hosted by the Asean, the final stop on a trip that also took him to Japan, South Korea, China and Vietnam. He encountered dozens of regional leaders, including formal meetings with the heads of Asia’s five biggest economies and met briefly with Russian President Vladimir Putin. “After my tour of Asia, all Countries dealing with us on trade know that the rules have changed,” Trump said on Twitter on Tuesday. “The United States has to be treated fairly and in a reciprocal fashion.
The massive trade deficits must go down quickly!” The president spent the bulk of his public appearances emphasizing the need to reduce trade deficits, and also pushed for Asian nations to buy US military equipment. He publicly advocated his “America first” policies, warning US trading partners that he was ready to take more protectionist steps in a bid to help American businesses and workers. Trump announced on Twitter that he will be making a “major statement” when he returns to Washing-
ton. But while Trump made rhetorical waves during his first visit to the region as president, questions about how much he actually achieved continue to linger. Business deals announced by the president are tentative agreements that may not be fulfilled. And while the president railed against what he viewed as systemic flaws in the US trading relationship with its Asian partners, he neither publicly requested nor received specific assurances to address issues like market access and intellectual-property theft.
Instead, the president seemed to relish the efforts by Asian leaders to lavish him with state dinners and ceremonial welcomes. Each of his Asian hosts appeared eager to fete Trump with elaborate parades and entertainment, in efforts that solicited warm praise from the US president—without the expense of actual policy concessions. The president and senior White House staff say that the red-carpet treatment was itself a win, and underscored new deference and respect for the US in relationships they say were worn thin by former President Barack Obama’s efforts within the region. And they argue Trump will be able to capitalize the relationships in the future, parlaying his warm ties with Asian leaders into major concessions on trade, military sales and foreign policy. “I made a lot of friends at the highest levels,” Trump said on Tuesday as he attended the East Asia Summit, where leaders discuss a range of regional economic and security issues. Praising himself for “a tremendously successful trip,” he said said things had gone well from the moment he walked off the plane. The president returns to Washington facing a battle over tax reform and more congressional hearings probing his administration’s ties to Russia. “Excited to be heading home to see the House pass a GREAT Tax Bill with the middle class getting big TAX CUTS!” he said on Twitter. AP/Bloomberg
More work needed for Asean economic integration as challenges emerge
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he emergence of China as a rising superpower and the increasing link between economics and security have undermined the foundations on which the Association of Southeast Asian Nation was built, experts said at a forum ahead of the regional bloc’s summit. The 50-year-old regional grouping should, thus, adapt if it is to continue its economic journey, former Foreign Secretary Roberto R. Romulo said. “Asean’s embrace of globalization was responsible for its rapid economic transformation. Unfortunately, we now live in a world
fraught with uncertainties.” Romulo was speaking at “Asean Leadership amid a New World Order,” a discussion organized by private think tank Stratbase ADRi, where titans of the Philippine economy talked about the changing international landscape and how these affect the region’s business community. For Romulo, a way to deal with this is for Asean to be more aggressive in its pursuit of deepening economic integration, even as it has already made strides in this area with the removal of nontariff measures and the
implementation of a single window. From the Japanese perspective, Prof. Yorizumi Watanabe of the Faculty of Policy Management of the Graduate School of Media and Governance, Keio University, pointed out at Brexit and the impact of Trump presidency as two major sources of uncertainty. Watanabe said that with the United State’s withdrawal from the Trans-Pacific Partnership (TPP), China can take advantage by imposing its own power-oriented trade policies, such as the aggressive use of antidumping measures and the
state subsidies on steel. There will be less incentives to enhance freetrade agreements in the absence of TPP, further jeopardizing trade liberalization in East Asia. Dindo Manhit, president of Stratbase ADRi, echoed the need for a more robust mechanism to participate in the global economy, in particular the urgent need to make economic gains not just sustainable but also inclusive. “Although global trade is expected to rebound from its tepid performance in 2016, the future contours of global trade are still hazy. The
much-delayed Regional Comprehensive Economic Partnership [RCEP] is sometimes considered the last active hope for greater international economic cooperation,” he said. Former Trade Secretary Gregory L. Domingo said micro, small and medium enterprises (MSMEs) account for 99 percent of businesses in the region, thus, the need for a mechanism like the RCEP. He explained: “MSMEs don’t feel the benefit of free-trade agreements. To export, over 30 documents are necessary. MSMEs feel left out, a source of resentment.”
he Association of Southeast Asian Nations and China have agreed to join forces in accelerating the implementation of their respective connectivity plans while, at the same time, utilizing local procurement for the completion of projects. In a joint statement, the Asean and China have decided to synergize the Master Plan on Asean Connectivity and the Belt and Road Initiative as part of efforts to facilitate trade and enhance people mobility. They have also agreed to maximize the Silk Road Fund and special loans for infrastructure cooperation, but have maintained engineering materials that will be used for the projects must be purchased from domestic firms. “[We] encourage the cooperation between private sectors from both sides on the investment, construction and operation of infrastructure projects,” the statement read. “Such cooperation could cover, but not limited to, development planning, project designing, investment and financing, design consulting, construction, installation and debugging, operation and maintenance, as well as manufacturing, processing and supplying of equipment and building materials to encourage the utilization of locally available supplies.” “[We decided to] take necessary measures to promote business practices that will encourage respective domestic production, as well as ensure mutually beneficial implementation of infrastructure connectivity cooperation,” the statement added. The Asean and China have seen the need to join forces in further deepening the cooperation on infrastructure connectivity due to the “rapid, comprehensive and significant progress achieved” in economic and trade relations between the two parties. Trade volume between the Asean and China stood at $368 billion in 2016, making the superpower the largest trading partner of the regional bloc. On the other hand, the Asean is the third-largest source of foreign direct investments inflows of China. The Asean and China have concluded their connectivity plans must be in harmony so as to bolster trade and people mobility—two mutual objectives indicated in the Master Plan on Asean Connectivity and the Belt and Road Initiative. With this, they have agreed to “improve the linkages of infrastructure development strategies between each other, encourage information exchange and sharing of best practices through information and experience exchanges.” The Asean and China have also decided to talk about potential development plans laid on the prospect of consolidating a list of priority projects for infrastructure connectivity. Under the Master Plan on Asean Connectivity, the Asean aims to build multiple connections from within and outside of the region. The master plan includes the establishment of land, maritime, air, information and communications technology and energy infrastructure. One of its major projects, the roll-on, roll-off cargo shipping connecting Davao and General Santos cities with Bitung, Indonesia, was launched by President Duterte and Indonesian President Joko Widodo in April. On the other hand, the Belt and Road Initiative is the ambitious multibilliondollar infrastructure campaign of Chinese President Xi Jinping aimed at transforming large areas of Asia into economic zones and trading routes. From Mongolia to Malaysia, Thailand to Turkmenistan and Indonesia to Iran, waves of Chinese projects, including power plants, solar farms, motorways, bridges, ports and high-speed railways, are scheduled to be constructed and funded by China-backed institutions. The initiative is Xi’s master plan at reviving the maritime Silk Road and estimates indicate Beijing will spend $150 billion each year in countries that will take part in it.
ExportUnlimited BusinessMirror
Editor: Efleda P. Campos • Wednesday, November 15, 2017 A9
PHL exporters join Paris Chocolate Show
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By Gil Gabriel D. Ragil | DTI-EMB
HE Philippines participated at the Salon du Chocolat, Mondial du Chocolat and du Cacao (Paris Chocolate Show) from October 28 to November 1, 2017, in Porte de Versailles, Paris, France.
Each year, thousands of visitors congregate at the Parc des Expositions to visit the booths and stands of 220 participating exhibitors. Visitors find chocolatiers, patissiers, confectioners and other artisans from all over the world. With over 500 participants from 60countries,includingrenowned chefs and pastry chefs, the Salon du Chocolat featured the biggest names from the chocolate and patisserie worlds, making it a must-see event. A yearly trade fair for the international chocolate industry, it began in 1994 supported by the French Ministry of Foreign Affairs. Previous venues were Paris (France), New York (the United States), Tokyo (Japan) and Moscow (Russia). The major highlight of this fiveday global event was the announcement of the winners of the International Cocoa Awards in a highly celebrated ceremony on October 30 in the presence of representatives and farmers from 50 countries.
Attendance was by invitation only. The Philippine participation was the very first time the country was represented at the Salon du Chocolat. The Emerging Products Division of the Export Marketing Bureau under the Trade and Investments Promotion Group of the Department of Trade and Industry organized an Overseas Business Matching Mission (OBMM) in close collaboration with the Philippine Trade and Investment Center (PTIC) in Paris, France, with the booth design provided by the Center for International Trade Expositions and Missions. Commercial Attache Froilan Emil D. Pamintuan of the PTIC in Paris did everything, including using his personal funds to ensure the successful initial foray of Philippine cacao producers and chocolate makers at Salon du Chocolat. A total of 18 company representatives from eight agencies/companies involved in cacao farming and production
and chocolate making comprised the members of the Philippine delegation. Val Turtur, chairman of the Philippine Cacao Industry Council based in Davao City in Mindanao, headed the delegation. Companies that joined the OBMM were Malagos Agri-Ventures Corp., Auro Chocolates, Dalareich Food Products/ Ginto Fine Chocolates Corp., Hiraya Artisan Chocolates Inc., Kablon Farm Foods Corp., Nutrarich Nutraceutical Innovations and Theo and Philo Chocolate Factory Inc. Interestingly, the Cacao Excellence Program chose the cacao-bean samples sent by Charita Puentespina of Puentespina Farms as one of the best 50 samples from a total of 166 samples received from 40 countries for its 2017 edition. Malagos AgriVentures Corp. is a sister company of Puentespina Farms, both being members of the Puentespina Group of Companies based in Malagos Garden Resort, Davao City. The 50 cocoa samples were made into 50 chocolates using the same process to determine the bean quality only. The very best was then chosen by a jury and awarded the International Cocoa Award in a ceremony that was the major highlight of the Salon du Chocolat. The Philippine participation at Salon du Chocolat was hailed by the cocoa and chocolate sectors as a breakthrough for their farmers, artisans, producers and manufacturers in the highly competitive and exciting world of chocolates. Proud of the quality
and delicacy of their cacao and chocolates, Filipino exporters belonging to this sector were very upbeat, they were able to join the globally famous chocolate brands of Europe, the US, Belgium, France and Japan. Those participating at Salon du Chocolat had their hands full given its program alone lined up a total of 12 activities during the five-day event. Its 2017 Show Program listed the following: live demos, Chocolate Fashion Show, Salon du Chocolat Junior, workshops, live performances, Japan area, chocolate sculptures, bookstore and booksigning, conferences, cocoaproducing countries, the opening night, and BtoB Village. Activites and subevents for chocoholics and foodies alike were enjoyed immensely. The live demos by top chefs, great French and international chefs, pastry chefs, master chocolatiers and young talents followed one another in the Pastry Show demonstration area in presenting their best chocolate recipes. One learned tips, techniques and how to create one’s own chocolate delights from the masters. For passionate foodies, the L’Atelier de Sens areas was reserved for free pastry and chocolate workshops every day during the Salon. L’Atelier de Sens was founded in 2004 and had three workshops in Paris and one in Lyon, both in France. They are highly considered as the perfect partner to delight chocoholics. The Salon du Chocolat maintained its policy that to understand chocolate is to love it.
Usapang Exports goes to Cebu, Davao, Manila By Patricia G. Blacer
Trade-Industry Development Specialist DTI-EMB
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HE E x por t M a rket i ng Bureau (EMB) of the Department of Trade and Industry (DTI) brings its Usapang Exports activity to Cebu, Davao and Manila. One of the activities lined up to celebrate the annual National Exporters’ Week (NEW), this activity aims to gather exporters, business-support organizations, officials from relevant government agencies, and other stakeholders. With the theme Innovate. Collaborate. Export!”, this edition aims to promote the culture of innovation and collaboration to grow exports. The Usapang Exports series is slated on November 21 at Cebu Grand Hotel, November 23 at Royal Mandaya Davao and December 6 in Makati City. PhilExport Cebu and DTI Davao will serve as co-organizers of this event. Presidential Proclamation 931, s. 1996 and House Resolution 33
have declared the first week of December each year as the NEW to encourage all sectors of society to move as one toward the promotion and development of Philippine exports. This year, the focus of the activity will be topics on innovation, collaboration and export trends. Speakers from the EMB, Industrial Technology Development Institute of the Department of Science and Technology, Intellectual Property Office of the Philippines and other private-sector experts of e-commerce, packaging and creative services will comprise the roster of speakers. Lectures on packaging-technology services, consumer and global trends, packaging patents, creative- services exports, collaboration techniques, online tools for export marketing and testimonials from successful exporters are some of the featured topics this year. For event details and registration inquiries, please contact the Export Assistance and Business Matching Division of the EMB at pecp@dti.gov.ph.
A10 Wednesday, November 15, 2017 • Editor: Angel R. Calso
Opinion BusinessMirror
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editorial
Helping the backbone of Philippine economy
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fter years of having to make do with what little the government can dole out, micro, small and medium enterprises (MSMEs) may be finally getting the support they need so they can expand and take advantage of free trade deals. In his keynote message during the Association of Southeast Asian Nations Mentors for Entrepreneurship Network at the Asean Business and Investment Summit last Sunday, President Duterte declared that he intends to increase funding for MSMEs. In his speech, the President suggested an amount of P50 billion for MSME development. The President’s pronouncement came after Manila urged the World Trade Organization (WTO), which would hold its 11th Ministerial Conference in Argentina next month, to help MSMEs participate in international trade. In the country’s statement concerning its priorities for the WTO meet, the Philippines asked the WTO to consider how the multilateral trading system can impact and benefit MSMEs. In the recently concluded Asia-Pacific Economic Cooperation summit held in Vietnam, the President had also urged his fellow leaders to give MSMEs the support they need to flourish in the international market. The Philippine Chamber of Commerce and Industry, the country’s biggest business organization, earlier told the BusinessMirror that access to financing is the chief concern of MSMEs. While many MSMEs are keen on making it in the international stage and benefiting from free-trade agreements, they could not do so because they do not have the funds that will allow them to leverage information technology. The inability to have access to cheap credit also prevents small businessmen from ensuring that their products are on a par with international standards and joining trade exhibits where they can promote their offerings. Despite grappling with these challenges for years, Philippine MSMEs continue to serve as the backbone of the country’s economy. Based on 2015 data from the Philippine Statistics Authority (PSA), of the 900,914 establishments in the Philippines, 99.5 percent are MSMEs, while the remaining 0.5 percent (4,075) are large enterprises. PSA data also showed MSMEs generated a total of 4,784,870 jobs in 2015 versus 2,981,819 for the large enterprises. This means that small businesses contributed nearly 61.6 percent of total jobs generated by all types of business establishments that year. Of the total jobs created by the sector, micro enterprises accounted for nearly 30 percent; small enterprises, 25.3 percent; and 6.8 percent by medium enterprises. Trade Secretary Ramon M. Lopez said the money that the President wants to allot to the MSMEs will not just be used for expanding MSMEs’ access to cheap financing. He said part of the amount will be used for training, product development, as well as local and foreign market promotion. Trainings and mentoring would certainly help MSMEs, as many of them are unfamiliar with the terms of free-trade deals. The President should also consider increasing the funding of the Center for International Trade Expositions and Missions, an agency attached to the Department of Trade and Industry, so it could help more MSMEs participate in trade exhibits. But pouring money on the MSME sector is not enough. The Duterte administration should continue to focus on implementing the needed reforms to cut red tape and make it easier for local and foreign investors to do business in the country. The President should also stop at nothing to stamp out corruption in government.
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Art Amansec
All About Social Security
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our Social Security System (SSS) officials stand accused of insider trading, that is, using their own money, they (except one of them) allegedly bought a few shares of stock from SSS contacts or brokers that allegedly yielded them a consolidated profit of about P500,000. An SSS commissioner who made the accusation believes that the four are legally and ethically prohibited from doing so, since, using SSS brokers, they should trade stocks for and on behalf of the SSS alone, which employs them. SSS Chairman Amado D. Valdez, a former law dean and seasoned legal practitioner and SSS President and COO Emmanuel F. Dooc, a lawyer and much-awarded insurance man, upon receipt of the complaint against the four, lost no time in sending them formal notices to explain. The two SSS heads also started the investigation process by organizing an investigating committee that will determine whether or not the complaint is valid, or whether or not the four officials should be exonerated. The formal investigating process cannot be rushed. The four officials are entitled to enjoy their Constitutional rights to due process and
presumption of innocence. They cannot just be condemned without trial or deprived of the opportunity to get their lawyers of choice. Preliminary remedies had, however, to be done and were done. The four had been stripped of their usual functions and reassigned to the office of the chairman under the latter’s close control and supervision while they are under investigation. Safekeeping of relevant documents has been assured. Two are said to have tendered their resignations for one avowed reason or another. As of this date, 3 of the 4 have not yet submitted to the committee their counter-affidavits, which should contain their defenses. They were given a few more days from today to submit them. Meantime, SSS employees all over the country led by their labor union president, Amorsolo Competente, have gone on social
media and other outlets to extend their moral support to the four officials. The employees contend that the four are honest and honorable men who do not deserve the trial by publicity and flak they have been receiving since day one when the controversy erupted. Not to be outdone, Congress and traditional media joined in the row by calling for the condemnation of the four officials and prompt investigation of whether or not the SSS coffers have been touched or compromised at all by the alleged activities of the four. The truth is no SSS money has been touched or been compromised. The other truth is that the present set of SSS commissioners, led by Valdez and Dooc, both Duterte appointees, will not tolerate any shenanigans that will compromise SSS funds. Commission meetings are all duly recorded, their minutes taken and their reading will reveal how earnestly the two leaders have embarked on a resolve to keep intact and unsullied the integrity of the funds, and to increase them through wise investments in real estate, stocks, government securities and equities. Valdez and Dooc have even gone out of their way to increase the SSS funds by, among others, fund-boosting measures, going around the metropolis and some parts of the country, encouraging employers to report their employees for coverage, pay their overdue
SSS premium contributions and threatening them with arrests and lawsuits should they fail to. It was Commissioner Pompee la Viña, Duterte’s former media campaign chief, who unearthed the alleged anomaly. As chairman of the powerful Investment Oversight Committee, it is part of his task to recommend to the Commission en banc intelligent-investment measures and direction of SSS -sur plus funds and see to it that investment activities of SSS officials are all done above board and singularly geared toward the funds’ care and augmentation. There is no truth at all to the speculation coming from a few quarters that a percolating political quarrel or maneuvering is obtaining among the SSS commissioners. Through the stewardship of Dooc and the guidance of Valdez, life and service to members go on at the SSS. Differences of opinion and perception have been relegated into the background in the holy names of public interest and public service. Before making any conclusions or suggestions regarding the charge against the four SSS officials, it is the better part of discretion and fairness for everyone to await the outcome of the ongoing formal investigation against them. But by and large, the current row notwithstanding, the public has still a reason to believe in the lofty goals of, and the men and women behind, the Social Security System.
PHL committed to uphold rule of law, human rights Teddy Locsin Jr.
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The SSS row: A reason to believe
Continued from A1
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he legacy of Nuremburg is that individuals can be made accountable even if their acts were not statutory crimes, and governments tolerated them or even sanctioned them. “Crimes against international law are committed by men, not by abstract entities, and only by punishing individuals who commit such crimes can the provisions of international law be enforced.” A reaffirmation of man’s free will for good and evil. Without Nuremburg, we have little hope and commitment of saving ourselves and our children from the scourge of war, which twice in our founding fathers’ and mothers’ lifetimes brought untold sorrow to all humanity. Without Nuremberg, justice could not have coped with the limitless ingenuity of evil men in perpetrating acts that defied the imagination of lawmakers until they saw with horror those acts done from the Rape of Nanking to Auschwitz,
from the killing fields of Biafra and Cambodia to Bosnia and Rwanda, from the blood bath that created Bangladesh to the torture centers of the Caliphate. People, individually, then collectively, make justice work. In the same way, they commit injustices on a vast scale. There have been many heroes—from Nuremburg to the creation of the International Criminal Court, the adoption of the Rome Statute in 1998, and the
election of its first bench of judges in 2003. These heroes—too many to name but not enough to have prevented the outrages they prosecuted and judged—range from lawyers and civil society advocates, to witnesses and the victims. Mr. President, no one is above the law. The Philippines joins previous speakers in upholding and defending the Rome Statute. To be sure, despite the creation of the Court, one thing has not changed—the collective work of delivering international justice remains a vocation that is difficult, thankless and even dangerous. Challenges remain. One is universality. The Philippines joins the call for many more countries to ratify or accede to the Rome Statute. Yet, whether or not we are States Parties, we should all protect human rights and build domestic capacities to enforce them and punish their violation. The Philippines again calls on the Security Council P5 to refrain from using their veto in situations patently involving mass atrocity crimes, and to take the necessary follow-up measures in situations referred to the Court so as to uphold the credibility of both institutions.
In the same spirit of genuine understanding, and ahead of the 16th Assembly of States Parties in December, the Philippines also supports full and candid dialogue and consultations to address allegations of inequality and unfairness in the work of the Court. Judges are only human, as the High Commissioner on Human Rights so eloquently put it. Nonetheless, the work these judges do far, far outweighs the flaws of individuals that discredit the Court’s noble mission: to wit, justice where none would otherwise be possible; the protection of the weak that none of the strong will protect; and the vindication of their rights which have been trampled. In this context, let me briefly refer to the Philippine campaign against illegal drugs, which pose an existential threat to our country. We were advised to tolerate a worsening drug situation; urged to live with the threat it poses by avoiding strong measures to defeat it; and to legalize drugs so as to make addiction a benign condition. But legalizing such a crime does not make it less so. We refuse to do that. We cannot live with what will See “Locsin,” A11
Opinion BusinessMirror
www.businessmirror.com.ph
Beware the silent serial killer on the loose
China rises Edgardo J. Angara
Michael Makabenta Alunan
on the contrary
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he lackluster celebration of the Clean Air month of November that is seemingly getting unnoticed only reflects not only our lack of understanding of air pollution as the silent killer on the loose, killing more than other environmental issues combined, but also the absence of our collective resolve to systematically reduce it massively through direct forms of intervention. Deadly killers in the air? Despite 18 years of the Clean Air Act, emission levels may be worse now with more vehicles contributing 93 percent of total air pollution in Metro Manila, up from over 70 percent three decades back, partly because of no massive technological and institutional intervention while smokestack factories moved out to the countryside. Deaths from cardiovascular and respiratory diseases resulting indirectly from air pollution have risen, while health costs and lost economic opportunities have ballooned from $2.2 billion in 1990 to $2.8 billion in 2013, says a World Bank and Institute for Health Metrics and Evaluation study. Deaths of Filipinos caused by air pollution soared over a 23-year period from 38,676 in 1990 to 57,403 in 2013, it added. Mortality figures may be higher if we include the 85,000 Filipinos who die yearly because of respiratory diseases like bronchitis, emphysema, pneumonia, etc., which are aggravated by air pollution. The contributory effects of emissions to rising respiratory diseases cannot be denied. World Bank’s publication, Enviroment Monitor 2002, cited the University of the Philippines Institute of Public Health’s study, saying jeepney drivers recorded the highest chronic obstructive pulmonary diseases at 32.5 percent and pulmonary tuberculosis at 17.5 percent. Men are more vulnerable because they smoke more, but the correlation with vehicle emissions is undeniable as street children recorded the second-highest incidence. Air pollution brings more diseases. The World Health Organization (WHO) has confirmed that even cardiovascular diseases, such as strokes and ischaemic heart disease and lung cancer are caused mainly by air pollution. The WHO said outdoor air pollution results in ischaemic heart disease, or 40 percent of total; stroke, another 40 percent; chronic obstructive pulmonary disease (COPD), 11 percent; lung cancer, 6 percent; and acute lower respiratory infections, 3 percent. Indoor air pollution induces strokes by 34 percent; ischaemic heart disease, 26 percent; COPD, 22 percent; acute lower respiratory infections, 12 percent; and lung cancer, 6 percent. These findings double previous mortality estimates, thus premature deaths worldwide have now hit about seven million yearly as of 2014, confirming air pollution as the world’s largest single environmental health risk. World Bank cited a lower mortality of 5.5 million people killed in 2013, and resulting health costs, foregone labor income and lost opportunities of $225 billion. About 90 percent of the affected population are the poor from developing countries, which have poor clean-air programs and lax-enforcement measures. Sure miss with measure? So far, our clean-air programs are limited to measuring air pollution from all angles, dimensions, its manifestations and content, but no institutional program in providing knowledge and actual solutions to reducing emissions. We measure air pollution in many ways, which are necessary initially, but will surely miss the point if we just keep measuring endlessly. For one, we measure ambient air pollution or how dirty the
air is, spending yearly hundreds of millions of pesos in procuring airmonitoring stations. And yet, data derived here cannot diagnose problems and sources of pollutions, what more identify solutions. Moreover, unlike in continental countries, which have more stagnant air, our archipelago has regular sea breeze and air turbulence that dilute pollution concentrations, thus making ambient air measurements inaccurate, says expert Dr. Emman Anglo. More so as most stations cannot make realtime readings, thus their high 25percent margins of error. We also measure at Private Emission Testing Centers and Motor Vehicle Inspection Systems, which are often not implemented owing to rampant practice of “Nonappearance” paper compliance. Again, plans to conduct emissions inventory, focusing on area sources like counting barbecue grills, stoves, etc. is another measuring activity that is impractical as it requires mobilizing an entire army for data-gathering house to house. Moreover, why worry about area sources or household pollution, which is lower than smokestack factories, much more against vehicle emissions, which share 93 of total air pollution. Penalties aren’t fine, education is. Again, emissions are measured when caught by Anti-Smoke Belching Units (Asbus). Public transport can get caught and fined several times a day, but no amount of penalties nor frequency of arrests will reduce emissions. Not even a change of vehicle or engine will guarantee no emissions, owing to 14-hour operations and passenger overloads. Not being taught what to do, transport groups have no other choice to survive but succumb to the culture of compromise, which explains why some erring Asbus conduct road apprehension with apprehension or turn their heads elsewhere when smoke-belchers come around. What is not implemented is Section 46 of the Clean Air Act, which requires that apart from penalties, smoke-belchers must undergo seminars on emissions reduction. Education, after all, is more lasting and empowering. Education also complies with Section 11, mandating government to make available all information, best practices and technological options on pollution control. Maintenance is key. Educational seminars provide theory and knowledge, but are useless, unless put to practice through actual periodic maintenance. As public transport is over-stressed with 14 hours running time and passenger overloads, it is vulnerable to maintenance downtimes, which can affect amortization payments of the transport modernization program. Perhaps, it is wise for government to enable transport groups to operate their own in-house maintenance centers to prevent maintenance breakdowns, assure continuous amortizations, and provide additional livelihood for the sector that will suffer the financial brunt of modernization. This way they need not pass on this burden to commuters through fare hikes. Moreover, we can arrest air pollution as the No. 1 silent serial killer.
E-mail: mikealunan@yahoo.com.
A
T the recent Asia-Pacific Economic Cooperation summit in Da Nang, Vietnam, President Donald J. Trump repeated his “America First” campaign rhetoric and said that the United States would no longer tolerate “chronic trade abuses.” For some, this clearly demonstrates the US’s decision to turn its focus inward and cede global leadership. In contrast, Chinese President Xi Jinping in his speech at Da Nang spoke about how the international community “worked in concert to steer the global economy back to recovery,” and how it “should uphold multilateralism, pursue shared growth through consultation and collaboration, forge close partnerships and build a community with a shared future for mankind.” If the US is indeed retreating from global leadership, that mantle seems to now fall on China. In the case of free trade and global investment, China now appears to
be its foremost champion. Where the prospects of the Trans-Pacific Partnership have been all but scuttled by the US’s exit in January, the free-trade pact of choice now seems to be the Regional Comprehensive Economic Partnership (RCEP), actively backed by Beijing. The RCEP is a proposed freetrade agreement between 16 countries—namely the 10 Asean members (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and the remaining members of Asean Plus Six (China, Japan, South Korea,
Poaching of agents Dennis B. Funa
INSURANCE FORUM
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oaching is considered as a dispute that can be the subject of dispute settlement among life-insurance companies under the current regulations. Circular Letter 2013-32, dated November 4, 2013 was issued to provide for the settlement procedures. In this circular, the word “poaching” is never used. Instead, it is referred to as an issue on “Recruitment of Transfers of Employees and Sales Producers.” The circular has been perceived to be ineffective and lacking in sufficient deterrent. Poaching of agents is the transfer of significant number of insurance agents to rival insurance firms usually with monetary incentives and other perks. Poaching is costly and requires a deep pocket for the poacher. The detrimental effects of this induced agent migration both to the industry and the policyholders have been noted. Agent poaching is fuelled by intense market competition and the need to expand and obtain the top producing sales force. It is difficult to grow an agency. It requires investment in training and recruiting the right people in the first place. The attrition rate in the insurance agency sector is high, especially in the first year of recruitment. Most of the dropouts are the nonperformers. Indeed, the top producing sales force are rare species. These are the agents that are good at networking and can build good relationships with clients. Perhaps, the issue is explained well by Mark Tay, executive director of Wen Consulting in Singapore, “life-insurance sales is largely labor-intensive, so the more agents you recruit the more sales you get. In a mature market like Singapore it’s very difficult to recruit in significant numbers. There’s also a cultural aversion to sales and commission-
Locsin. . .
continued from A10
not let our people live in peace and well-being, in freedom and national security. Ever in the mind of every country in Asia is the subjugation of a great empire (China) by two others (United Kingdom and Imperial Japan) flooding it with opium. We remain resolute in combatting the proliferation of drugs and the prevalence of drug addiction in our country. A whole-of-nation approach is needed to solve this problem. And vigorous law enforcement is definitely part of it. As many of
based jobs so companies resort to poaching.” No doubt, the regulator should issue guidelines regulating the recruitment of agents. Insurance is a business driven by distribution. Distribution through agents is still the most prolific channel in the Philippines. Agent poaching usually comes with monetary incentives, such as upfront lump-sum payment, and sign-on bonuses for the crossover agents. In other words, an insurance company “buys” the top-performing sales force. It could also come with a “bond” period where the monetary incentives could be retrieved or “clawed back” if sales quotas are not met. In other words, they will have to return the incentives given to them. This may be the trigger for the agents to engage in unethical sales practices. While the agents may earn immediate financial rewards, it would not speak well of their reputation as it would seem that they market their wares to the “highest bidder.” Poaching would usually involve the team leader and the members of the agency team.
Wednesday, November 15, 2017 A11
India, Australia and New Zealand). Once finalized, the RCEP will cover up to 3.4 billion people, nearly 50 percent of the world’s population, and account for up to $49.5 trillion or nearly 40 percent of global GDP. The RCEP complements the even bigger “Belt and Road Initiative,” Beijing’s avowed push launched in 2013 to invest at least $1 trillion for highways, bridges, ports, trains, warehouses and even industrial parks to connect up to 68 countries across Asia, the Middle East and Europe. This 21st century maritime and land-silk road will also include “soft infrastructure,” such as crosscountry optical cable networks and enhanced satellite communications to ensure digital connectivity across the countries involved. To help realize the vision of the “Belt and Road Initiative,” China launched in 2013 the Asia Infrastructure Investment Bank, which started full operations in December 2015. Starting with $50 billion in capital, the Asian Infrastructure Investment Bank aims to finance infrastructure projects—from road networks to mobile-phone towers—throughout the poorer sections of Asia. In 2014 the Economist described it as the
“World Bank” for Asia. Leadership in the global fight against climate change is another void that China appears to be filling with the US’s apparent retreat. As President Trump announced in June the US’s withdrawal from the Paris Accord, China quickly forged an alliance with the European Union focused on helping the world reduce carbon emissions. In January Beijing announced it would invest up to $361 billion in renewable energy, as it transitions away from its dependence on dirty fossil fuels like coal. In fact, according to a forthcoming World Energy Outlook report by the International Energy Agency, China is projected to install up to a third of the entire globe’s new installed capacity in solar and wind energy in the coming decades. In witnessing the US’s retreat, one could repeat the refrain, “Goodbye, I hate to see you go,” as the Sue Thompson song goes. But while it appears China will act strongly for global trade, infrastructure and climate change—what song should the world sing as it takes up global leadership?
Poaching of agents has been recognized as “unhealthy” for the insurance industry for various reasons. Paramount of these reasons is the damage to the interests of the policyholders. It is also unethical as insurance firms simply obtain experienced agents from other firms without having invested in their training and development.
should be in place is that these monetary incentives should be shouldered by the company’s stockholder and not sourced from the insurance funds.
insurance industry for various reasons. Paramount of these reasons is the damage to the interests of the policyholders. It is also unethical as insurance firms simply obtain experienced agents from other firms without having invested in their training and development. According to Roland Yeo, president of the Insurance and Financial Practitioners Association of Singapore, “The company which acquired the rival agents via poaching instantly has a pool of experienced agents with high motivation to perform, thus increasing its revenue and shareholder value.” The practice also “discourages investment in human-resource training and impedes professionalism.” A poor investment in training results to sales agents with little knowledge about the product they are selling. And, of course, there is the disruption caused to the company by the exodus of agents.
Mis-selling or overselling
One of the negative effects of agent poaching is the possible resulting mis-selling by crossover agents who will be under pressure to meet sales targets in their new firm.
Higher costs
Negative effects
Poaching of agents has been recognized as “unhealthy” for the
The monetary incentives themselves could be detrimental as it could drive up the insurance costs when they are passed on to the customers. One safeguard that
you now know, and the UN alerted us, there is an intimate and indisputable relationship between terrorism and the illegal drug trade. The siege of Marawi and what was found there proves it conclusively. Let me repeat basic principles. The Philippines is committed to upholding the rule of law and respecting human rights in the fight against illegal drugs. We do not condone killings. It is tragic that many deaths resulted outside of lawful police operations. They are being investigated and prosecuted in the Philippines’s criminal justice system, as many of them were found to be rubouts committed by unknown groups
perhaps taking advantage of the government’s campaign. Accountability in the campaign is of overriding concern to the President; he has ordered the internal cleansing of the entire police organization, relieved a major command, and taken the campaign away from the national police to a specialized drug-enforcement agency with a long record of cooperation with its counterparts in the United States and Europe. Government critics now object that the agency is too small to cope with the drug problem. It is either too much or too little. You cannot please everybody. As a State Party to the Rome Stat-
E-mail: angara.ed@gmail.com, Facebook and Twitter: @edangara
Churning or twisting
Another danger for the policyholder is when insurance policies are improperly replaced after the transfer of the agent to another insurance firm. In this instance, the policy issued by an insurer will be surrendered and “switched” with another policy of the new insurer. Replacing the insurance policy may entail a reunderwriting which could mean an increase in premiums or a reduction in coverage. This is also known as “churning” or “twisting.” Also to be noted is that surrendering or terminating a policy before its maturity may incur penalties for early termination. This is natural consequence when agents are under pressure to sell.
Orphaned policies
When the insurance agent leaves the insurance company, the policy issued by that company will be left without a dedicated servicing agent. It will be an “orphaned” insurance policy. While a new agent will be assigned to service the affected policies, the absence of a relationship with the new agent will make the client a lower priority. Relationship and trust are two important elements in the role of the insurance agent. Finally, competition based on poaching is not sustainable as each company can simply counter-poach or retaliate. It can also offer additional incentives or what is known as the “golden handcuffs” to retain their sales talents. In the end, it is the industry that will suffer. Lawyer Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016. E-mail: dennisfuna@yahoo.com.
ute, the Philippines will cooperate to provide true information, and has invited the United Nation to do so, with the exception of politicized individuals with a personal stake in proving themselves right regardless. Mr. President, the Court is a court of last resort. The Philippines has a responsibility and a right itself to prosecute crimes under the Rome Statute. We have a functioning criminal justice system able to prosecute these crimes. In the spirt of the laws, let us both show that complementarity works, and that biased intervention even if merely vocal is not necessary. Thank you for your attention.
2nd Front Page BusinessMirror
A12 Wednesday, November 15, 2017
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Duterte, Modi bilateral talks centered on entry of cheap Indian medicines
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By Elijah Felice E. Rosales
@alyasjah
resident Duterte is determined to allow Indian pharmaceutical companies to enter the Philippine market, citing the need for affordable and effective medicines at a time Filipino households are spending more for health. In his bilateral meeting with Indian Prime Minister Narendra Modi on Monday night, the President said he intends to bolster what is already a “good relationship with India,” especially on trade. He said he wants to begin this renewed trade ties by allowing Indian pharmaceutical companies to open branches in the Philippines.
“We want to discuss trade relations further and especially [on] the most important one…and I’m happy that you’re here, because we can’t find the medicines, and you have it [in] India. [You have medicines] people can really afford to buy,” Duterte said. The President added India has produced medicines at the cheapest
DUTERTE: “I’m more interested really in the medicines because we are a poor country.... If there is an investor that could be interested, an Indian citizen of yours who would want to venture in our place, we would be happy.”
price, hitting the United States for exporting “very, very expensive” pharmaceutical products. “You know, you bring or you go to any other place, [like] America, [their] medications and tablets, it’s very, very expensive,” Duterte lamented to Modi. The President also told Modi to visit the country some other time, and bring along Indian businessmen interested to enter the Philippine market. He said he will be happy “to see you building an investment that would include the medicines,” among others. “I’m more interested really in
the medicines because we are a poor country. But you know how it is with America, they don’t believe in generics because they do not make money, so it’s very expensive really actually,” Duterte said. “If there is an investor that could be interested, an Indian citizen of yours who would want to venture in our place, we would be happy.” To jump-start negotiations, the President instructed Finance Secretary Carlos G. Dominguez III, Agriculture Secretary Emmanuel F. Piñol, Trade Secretary Ramon M. Lopez and Health Secretary Francisco T. Duque III to begin discussing with their Indian counterparts how to boost trade relations between Manila and New Delhi. According to the Philippine Statistics Authority (PSA), Filipino households saw their out-of-pocket expenditures for health go up by 52.4 percent in 2016. The PSA also
reported households spent P342 billion for their various health needs, such as medicines, food supplements, pharmaceutical products and diagnostic needs, among others, in 2016. The increase in out-of-pocket expenditures contributed to the 10.5-percent hike in the total health expenses of P655 billion in 2016, from P593 billion in 2015. This summed up to a contribution of 4.5 percent to the country’s GDP. The PSA reported most of the out-of-pocket expenses were allocated to hospitals at 41.1 percent, or P259 billion, while pharmacies followed at 27.5 percent or P173 billion. Aside from improving trade relations, the bilateral meeting between Duterte and Modi saw the exchange of memorandums of understanding on defense; agriculture and related fields; foreign services; and cooperation in the field of
Russia vows to support PHL transport development
CHEERED DAYS BACK, TRUDEAU NOW JEERED ON CANADIAN WASTES By Jovee Marie N. dela Cruz
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ays after earning the praise of Filipinos for dining at a locally bred fast-food chain, Canadian Prime Minister Justin Trudeau on Tuesday was criticized for his failure to act decisively on the 103 container vans of waste materials that were illegally shipped to the Philippines from Canada, from 2013 to 2014. A ileen Lucero, national coordinator of the EcoWaste Coalition, said while “we do not have any problem with PM Trudeau stopping by a 100-percent Filipino-owned restaurant, he should have gone as well to the nearby port to see for himself the reeking Canadian trash shipments right there, and then made the announcement to take the garbage out of the Philippines.” “That act would have merited greater media mileage, and endeared him to all Filipinos,” Lucero added. She said years after these tons of wastes were dumped in the Philippines, Filipinos are still waiting for the Canadian government to act and take them back. Lucero said 26 of the 103 container vans of Canadian garbage were illegally disposed at a private landfill in Tarlac from June to July 2015, angering local officials and residents and galvanizing citizens’ opposition against foreign-waste disposal in the country. Trudeau on Tuesday said that, while the garbage came from a private business, not the Canadian government, they are now working to resolve the issue, saying his government “is very much engaged in finding a solution.” “I expressed to President Duterte the assurance of my officials here in the Philippines and back in Canada that we will continue to work on this and hopefully resolve this,”
By Lorenz S. Marasigan
TRUDEAU: “Even though it originally came from Canada, we had legal barriers and restrictions that prevented us from being able to take it back.”
@joveemarie
Trudeau pointed out. During the Asia-Pacific Economic Cooperation summit Manila in 2015, the Canadian prime minister said t he solut ion wa s a l ready being developed to address the problem. But in a news conference on Tuesday, Trudeau explained that Canada was prevented by its own legal regulations from taking back the 2,450 tons of garbage in 2015. “Even though it originally came from Canada, we had legal barriers and restrictions that prevented us from being able to take it back,” he said. “Those regulations and those impediments have now been addressed, so it is now theoretically possible to get it back.” The prime minister also said the two governments need to address some questions, such as who should shoulder the shipping expenses of the trash back to Canada. “There’s still a number of questions around who would pay for it, where the financial responsibility is. This was, at its origin, a commercial transaction. It did not involve government.”
Expedite
Part y-list Rep. A riel B. Casilao of Anakpawis asked Trudeau to expedite the return of about 103 containers of trash materials back to Canada. “PM Trudeau already said that he is committed to President Duterte that his government is finding a solution to address the issue. We hope that the solution would be soon See “Trudeau,” A2
micro, small and medium enterprises. The President also held bilateral meetings with Japanese Prime Minister Shinzo Abe, South Korean President Moon Jae-in and Russian Prime Minister Dmitry Medvedev. Duterte and Abe witnessed the exchange of notes on the Metro Manila Subway project, Arterial Road Bypass Project Phase 3 and socioeconomic development program. On the other hand, Moon said he hopes Filipinos can take time to visit South Korea in 2018 for the Winter Olympics. “I hope that many Filipinos can visit [South] Korea for the Pyeongchang Winter Olympic Games next February, and enjoy the winter in [South] Korea.” In the bilateral meeting between the President and Medvedev, the two leaders committed to carry on with the growing trade and defense relations between Manila and Moscow.
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PAL DIRECT FLIGHTS TO NEW ZEALAND New Zealand Prime Minister Jacinda Ardern (center) witnesses the signing of memorandum of understanding (MOU) on boosting tourism between Philippine Airlines (PAL) and Tourism New Zealand. Under the MOU, PAL will mount direct flights from Manila to Auckland, New Zealand. Signing the MOU are PAL President and COO Jaime Bautista (left) and Tourism New Zealand Chief Executive Stephen England-Hall. ALYSA SALEN
Delays faced by Pacific trade deals show nations want quality, not speed Continued from a1
Differences remain on the RCEP, Mustapa added. “We have to have a good agreement. We can’t be pushing just for the sake of meeting deadlines,” he said. “We need to have quality.” Both the RCEP and TPP have been tugged back and forth for years amid strategic jockeying between the US and China. President Xi Jinping attempted to accelerate RCEP talks after Trump’s election upended the TPP negotiations. The deals take different approaches to integrating Asia-Pacific trade. The TPP goes beyond traditional trade issues to address intellectual property, labor rights and state-owned enterprises. It would have covered 40 percent of the global economy, if the US had stayed in. While the RCEP focuses on tariffs on goods, it also extends to services, wading into the contentious issue of worker migration. And its biggest economies have disputes over history and territory—China and Japan, and China and India— that are hindering discussions. The RCEP must also bridge the
interests of mature, developed economies, such as Australia and Japan, with emerging markets like Cambodia and Lao PDR.
High ambition
Austr a li a n Trade Minister Steve Ciobo said in an interview in Vietnam that he was seeking a high-quality RCEP deal. “Concluding these deals is not about doing it as quickly as possible,” Ciobo said. “I don’t think we’ll be able to conclude by the end of the year; I think we will move into next year,” he added. “But I think that also reflects a high level of ambition for RCEP, as well. We need to be pragmatic, but we still need to make sure we have as much as we can.” Preeti Saran, India’s top diplomat for Asia, said the country remained committed to the RCEP, but wanted a “balanced” outcome. Some ministers said momentum for the RCEP wasn’t slowing, even as they agreed the end-year deadline will slip. “The RCEP is moving on just fine,” Philippine Trade Secretary
Ramon M. Lopez said in an interview in Vietnam. “The actual signing, I think we can probably expect the year after next.” Thai Commerce Minister Apiradi Tantraporn said ministers hoped to at least report some progress while in Manila. “Of course we still have differences, in level of ambition for one thing, and we are working very hard,” she said in an interview in Vietnam. The parties want “to finalize it, hopefully, by the early part of next year, so we can go on and do the legal scrubbing,” she added. China, for one, said the ongoing TPP negotiations wouldn’t be a factor for the RCEP. “I don’t think the TPP negotiations will be a set back toward RCEP,” Zhang Jun, an economic affairs official at China’s foreign ministry, said in a briefing in Vietnam last week. “There indeed are some challenges in the RCEP negotiations, but we have achieved steady progress over the years, and are confident about the future of RCEP negotiations.” Bloomberg News
@lorenzmarasigan
ransportation Secretary Arthur P. Tugade and Russian Minister of Transportation Minister Maksim Sokolov on Tuesday agreed to cooperate on rail, maritime, road and aviation development in the Philippines. “The meeting is very cordial and productive. They expressed gratitude for the warm welcome given to them by the Filipino people, and they look forward to even closer ties should these plans materialize,” Transportation Assistant Secretary Leah M. Quiambao said in a text message. For one, she said, the Philippines and Russia will pursue the exploration of Russia’s development assistance for the Northern Luzon railway corridor, including the deal for the future New Clark City. “Russian assistance will commence with a grant for the preparation of a detailed feasibility study. Russia is expected to bring with it its development experience, gained in the course of building its 86,000 kilometer of mainline and 60,000 kilometer of secondary railway lines,” Quiambao said. The two countries also agreed on cooperating for the development of new technologies for road safety. “On satellite navigation technologies, the Philippines and Russia will explore utilization of Glonass —similar to GPS—for road-emergency response, truck-weight monitoring and air-navigation applications,” Quiambao said. Glonass, which stands for Global Navigation Satellite System, is a navigation system operating through a space-based satellite. “On maritime-transport education, the Philippines and Russia will pursue the deployment of training vessels to the Philippines’s learners and trainersexchange programs between the Philippine Merchant Maritime Academy and Russia’s maritime academy, and possible donation by Russia of a training vessel to the Philippines,” Quiambao said. The two countries, likewise, discussed the possibility of starting See “Russia,” A2